/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/091012.mbx T R O U B L E D C O M P A N Y R E P O R T E R Monday, October 12, 2009, Vol. 13, No. 282 Headlines 3C RIVERSIDE: Wants Access to Cash Securing Loan with FABT 400 CENTENNIAL: Building Foreclosed by Lenders ACCURIDE CORP: Bank Debt Trades at 3% Off in Secondary Market ACCURIDE CORP: Case Summary & 30 Largest Unsecured Creditors ACCURIDE CORP: S&P Sr. Secured Debt Rating Cut to 'D' on Filing ADVANCED MICRO: Appoints Thomas Seifert as Chief Financial Officer AFFILIATED COMPUTER: Bank Debt Trades at 1.17% Off ACCURIDE CORP: Wins Nod on First-Day Motions, Interim DIP Loan AGA MEDICAL: S&P Puts 'B+' Corp. Rating on CreditWatch Positive AIRTRAN HOLDINGS: Expects to Raise $145MM in Securities Offerings ALLIS-CHALMERS: Has Enough Liquidity, Conservative Debt Profile AMC ENTERTAINMENT: Bank Debt Trades at 6% Off in Secondary Market AMERICAN BUSINESS: Trustee Reaches $100-Mil. Settlement with Banks AMERICAN NATURAL ENERGY: Completes Debenture Repurchase AMERICAN REPROGRAPHICS: S&P Puts 'BB+' Rating on $36.1 Mil. Loan AMERICANA FOODS: Capricorn's Appeal on Dismissed Claims Dumped AMR CORP: To Announce Q3 Results on October 21 ANESIVA INC: Posts $3.27-Mil. Loss in Second Quarter APPLETON PAPERS: Inks Second Amendment to BofA Credit Agreement APPLETON PAPERS: Terms of Second Lien Notes Indenture ARAMARK CORP: Bank Debt Trades at 8% Off in Secondary Market ASARCO LLC: Agrees to Allow Strider Construction Claims ASYST TECHNOLOGIES: Can Hire True Partners as Tax Consultant AURORA OIL: Files Chapter 11 Plan; to Give Control to Lenders AVAYA INC: Bank Debt Trades at 19% Off in Secondary Market AVIS BUDGET: Bank Debt Trades at 6.25% Off in Secondary Market BABCOCK & WILCOX: Sales Agreement Eliminated CERCLA Liability BICENT POWER: Moody's Downgrades Ratings on First Lien to 'B1' BIOMET INC: Bank Debt Trades at 4% Off in Secondary Market BOWL & BOARD: Bankruptcy Case Converted to Ch 7 Liquidation BT BUSINESS: Voluntary Chapter 11 Case Summary BRUCE R SMITH: Files for Creditor Protection in Canada CANWEST GLOBAL: Chapter 15 TRO Hearing on October 15 CANWEST GLOBAL: Discloses Cash Flows Projection During CCAA Case CANWEST MEDIA: Moody's Cuts Probability of Default Rating to 'D' CAPITAL GROWTH: July Debentures Convertible at $0.15 Per Share CELANESE US: Bank Debt Trades at 6.41% Off in Secondary Market CENTAUR LLC: Hoosier Park in No Imminent Danger of Bankruptcy CENTRO NP: Extends Consent Solicitation to October 15 CHAMPION FORD: Bank of Choice Is Highest Bidder for Boulder Asset CHRYSLER LLC: New Chrysler to Stick to Plan to Shut 8 Plants CIRCUIT CITY: M. Mondragon Defends Adversary Proceeding CIRCUIT CITY: Park National Bought Claims in September CIRCUIT CITY: Sirius XM Says Debtor Breached Distribution Pact CIT GROUP: Inks Supplemental Indentures with BoNY Mellon CITIGROUP INC: Discloses Equity Stake in Various Companies CITIGROUP INC: Files October Investments Offerings Brochure CITIGROUP INC: To Issue Four Series of Notes; Files Docs with SEC CITIGROUP INC: To Accept Finra Fine in Tax-Linked Stock Deals CITY OF SAN DIEGO: Budget Deficit May Rise $22-Mil. Next Year CLEM CARINALLI: Creditors Meeting Set for Nov. 6 CONTINENTAL ALLOYS: S&P Retains Developing Watch on 'CCC' Rating COOPER-STANDARD: Court OKs FTI as Fin'l Advisor to Committee COOPER-STANDARD: Files Bankruptcy Rule 2015.3 Reports COOPER-STANDARD: Gets Nod to Employ Foley as Special Counsel CUNNINGHAM BROADCASTING: MOU Allows Termination of Sinclair LMAs DAZLBET PARTNERS LLC: Voluntary Chapter 11 Case Summary DECODE GENETICS: Increases Secured Promissory Note to $2.8MM DODART PROPERTIES LLC: Case Summary & 20 Largest Unsec. Creditors E*TRADE FIN'L: Citadel Converts $60MM of Debentures to Equity EASTMAN KODAK: Pays $12,000,000 Placement Fee to KKR EDGE PETROLEUM: Needs More Time to File Schedules and Statements EDGE PETROLEUM: Wants to Hire Akin Gump as Counsel EDGE PETROLEUM: Gets Delisting Notice From Nasdaq Stock Market ELECTRIC MACHINERY: Wins $6.3 Judgment Against Hunt Construction ENERGY PARTNERS: Has New Hedging Program Following Emergence ESTATE FINANCIAL: Former Executives Plead Guilty of Fraud FAIRPOINT COMMUNICATIONS: Windstream Communications May Buy Debt FLYING J: Court Extends Exclusive Plan Filing Period until Nov. 29 FLYING J: Gets Court's Final Approval to Obtain DIP Financing FONTAINEBLEAU LV: To Have Examiner at Judge's Behest FORD MOTOR: September Sales Off 6% as Cash For Clunkers Ended FORD MOTOR: Surpasses September Market Surge in U.K. FREDDIE MAC: CEO Gets Green Light to Name President or COO GENERAL MOTORS: New GM Draws Progress in Business Plan GENERAL MOTORS: Old GM Expects to Liquidate by Mid 2010 GENERAL MOTORS: Old GM Further Amends Wind-Down Loan Facility GENERAL MOTORS: Old GM Proposes Claims Settlement Procedure GENERAL MOTORS: Old GM Says 72 Reclamation Claims Have No Value GEORGIA GULF: Capital World Investors Discloses 26.6% Stake GEORGIA GULF: Registers 31.1MM Common Shares for Resale GEORGIA GULF: UniCredit SpA Discloses 18.19% Equity Stake GREATER ATLANTIC: Commences Consent Solicitation on TruPS Buyback HAMILTON SPECTATOR: J. Kara Wins Old Printing Plant for $3MM HARVEST OPERATIONS: Moody's Reviews 'B3' Corporate Family Rating HINDU TEMPLE: Denies Ownership of Assets in Balance Sheet ILLINOIS FINANCE: Fitch Cuts Ratings on $20 Mil. Bonds to 'BB+' IRVINE SENSORS: Sells $2.44MM in Preferreds to 66 Investors IRVINE SENSORS: To Issue Series B Convertible Preferreds JAYHAWK ENERGY: Posts $596,000 Net Loss in Quarter Ended June 30 JOHN STOKES: Court Keeps Order Converting Case to Chapter 7 JOHNSONDIVERSEY INC: Clayton Investment Won't Alter Moody's Rating JOHNSONDIVERSEY INC: Fitch Comments on Clayton's $477 Mil. Deal JON HARDER: Can't Block Secured Creditors from Pursuing LLCs KIWA BIO-TECH: CEO Wei Li Receives $75,000 Salary for 2008 KIWA BIO-TECH: No Schedule Yet for Annual Stockholders' Meeting LE-NATURE'S INC: Trustee, BDO Spat Heads to Arbitration LIFE SCIENCES: To Hold Stockholders' Meeting on Lion Merger LITHIUM TECHNOLOGY: Inks Three Consulting Agreements LIZ CLAIBORNE: Unveils New Distribution Strategy for Franchise MAGUIRE PROPERTIES: Amends CEO's Restricted Stock Units Agreement MAXXAM INC: Reviews Impact of 5th. Circuit Ruling in PALCO Case MIRANT CORPORATION: Moody's Affirms 'B1' Corporate Family Rating MTI TECHNOLOGY: Taps Elmer Martin as Reorganization Tax Counsel NCI BUILDING: Inks Lock-Up and Voting Agreement with Lenders NEXCEN BRANDS: Appoints Lane as VP & Chief Accounting Officer NEXCEN BRANDS: KPMG Raised Going Concern After 2008 Results NEXCEN BRANDS: Had $865,000 Net Loss in First Quarter NTK HOLDINGS: Secures Commitment for $250MM Financing for Prepack NUVEEN INVESTMENTS: Says Progress Continues in ARPs Refinancing OXIS INT'L: Has Standstill and Forbearance Deal with Bristol OXIS INT'L: Raises $2MM by Selling Securities to Investors PAETEC HOLDING: Registers 8-7/8% Notes for Exchange Offer PALM INC: Capital World Investors Discloses 10.3% Equity Stake PALM INC: Registers 15.7MM Common Shares Under 2009 Stock Plans PANOLAM INDUSTRIES: Weil Gotshal, Perella Weinberg on Board PARMALAT SPA: Creditors Convert Warrants for 37,195 Shares PEANUT CORP: Hartford Must Set Up Fund to Compensate Victims PHILADELPHIA NEWSPAPERS: Bankruptcy Judge Allows Credit Bid PLIANT CORP: Apollo-Proposed Chapter 11 Plan Confirmed POLAROID CORP: Gets Court Nod for Employment of Co-Counsel PRIMARY ENERGY: Moody's Assigns 'Ba1' Rating on $105 Mil. Loan PROBE MANUFACTURING: KB Development Discloses Equity Stake RADIENT PHARMACEUTICALS: To Deconsolidate JPI Venture in China REALOGY CORP: Closes $135MM Delayed Draw Portion of 2nd Lien Loan REVLON INC: Closes Exchange Offer; MacAndrews Loan Maturity Moved ROYAL HAWAIIAN: Files for Chapter 11 Bankruptcy Protection SALLY BEAUTY: Acquires Schoeneman in $71 Million Merger Deal SEMGROUP ENERGY: Vitol to Purchase SGLP General Partner SEQUA CORPORATION: Moody's Confirms 'Caa1' Corporate Family Rating SHAW GROUP: Moody's Assigns 'Ba1' Rating on Senior Bank Facility SHINGLE SPRINGS: S&P Downgrades Issuer Credit Rating to 'B-' SINCLAIR BROADCAST: MOU Allows Cunningham to Terminate LMAs SIX FLAGS: Pens $3M Deal With New Orleans SMURFIT-STONE: Gets Court Nod to Assume SAP America License Deal SMURFIT-STONE: Sued by i2i to Bar Release of Trade Secret SMURFIT-STONE: Wants to Abandon Capital Stock of i2i Europe SOUTH BEACH RESTAURANT: Files for Chapter 11 Bankruptcy Protection SPEEDWAY MOTORSPORTS: Moody's Retains 'Ba1' Corp. Family Rating SUN-TIMES MEDIA: Court OKs Asset Sale to Investor Group SYSIX TECHNOLOGIES: Sent to Chapter 11 by 3 Creditors TELETOUCH COMMUNICATIONS: Unit Seeks Arbitration with AT&T TELLIGENIX CORP: Files for Ch 11 Bankr. After State Lawsuit TERRA-GEN FINANCE: Moody's Assigns 'Ba3' Rating on $225 Mil. Loan THOMAS GENTRY: Kentucky Horse Racing License Revoked TOYS R US: Terminates Ron Boire's Employment as EVP TRINITAS GOLF: Files for Ch 11 Bankr. to Avert Foreclosure Sale USA SPRINGS: NewCo to Buy Almost Two-Thirds of Assets VELOCITY EXPRESS: Nasdaq Delists Common Stock Effective Oct. 16 VERASUN ENERGY: 4 Trade Creditors Sell $57,000 in Claims VERASUN ENERGY: AP Services Awarded $1.75MM Success Fee VERASUN ENERGY: North Dakota Gets Partial Stay Relief VERASUN ENERGY: Schauers Wants Lift Stay to Continue Appeal VERENIUM CORP: To Raise $12.3MM in Offering of Shares, Warrants VISTEON CORP: Bid for $8.1MM Top Officer Bonuses Rejected * Atty Calls E-Filing in Bankruptcy Court Anti-Competitive * Bankruptcy Experts Expect More Business to Fail * Depository Trust Renews Call for Supporting Trade Repositories * Frank Pledges to Revise Derivatives Draft * U.S. Consumer Credit Fell By $12 Billion in August * Whalen Predicts Bank Losses to Be Twice 1990s' Rate * Credit Solutions Reaffirms Commitment to Debt Settlement Group * Greenhill Expands Financing Advisory & Restructuring Group * Lawyers to Fight Bankruptcy Law that Bars "More Debt" Advice * BOND PRICING -- For the Week From October 5 to 9, 2009 ********* 3C RIVERSIDE: Wants Access to Cash Securing Loan with FABT ---------------------------------------------------------- 3C Riverside, LLC, asks the U.S. Bankruptcy Court for the Western District of Tennessee for permission to: -- use cash receipts secured under certain prepetition loan documents; and -- grant adequate protection to its prepetition lender. The Debtor has three notes payable to its principal lender, First American Bank and Trust Company of Vacherie, LA: (i) a note secured by land; (ii) a note secured by additional land; and (iii) a third note in the amount of $1,000,000. To secure the Notes, Debtor and Bank are party to two mortgages and a certain Commercial Security Agreement dated Feb. 20, 2009. Under the Security Agreement, Debtor granted Bank a security interest in inventory, proceeds, accounts, and general intangibles, rents and income. The Debtor relates that it explored various options for financing its Chapter 11 case and can identify no other sources to finance operations and preserve its business other than the Bank's asserted cash collateral. The Debtor submits that the Bank will be adequately protected, the real estate allegedly securing Bank's $4,500,000 claim values at more than $20,000,000. Additionally, Debtor has potential postpetition bids, which could yield much as $1,000,000 by year end. FABT Objects FABT, a secured creditor of the Debtor, objects to the Debtor's cash collateral motion relating that: a. the Debtor's motion is not properly a motion for use of cash collateral, but instead seeks to force post-petition financing through FABT; and b. the Debtor failed to offer adequate protection for use of the Bank's collateral or for additional financing. About 3 C Riverside Properties Cordova, Tennessee-based 3 C Riverside Properties, L.L.C., filed for Chapter 11 on Sept. 11, 2009 (Bankr. W.D. Tenn. Case No. 09- 30025). Henry C. Shelton III, Esq., at Adams and Reese, represents the Debtor in its restructuring effort. According to the Debtor's schedules, it has assets of at least $25,131,500, and total debts of $6,263,461. 400 CENTENNIAL: Building Foreclosed by Lenders ---------------------------------------------- Boulder County Business Report says that in September 2009, lenders filed for foreclosure on 400 Centennial Parkway in Louisville owned by a fund of Crestone Capital Advisors LLC. Public records say that Crestone Capital borrowed $5.37 million on the building from lender Nomura Credit & Capital Inc. in February 2007. According to BCBR, the 10-year loan due in 2017 had a fixed rate of 5.85%. Nomura Credit filed for foreclosure, claiming a failure by Crestone Capital to make timely monthly payments, says the report. Crestone Capital Advisors LLC -- http://www.crestonecap.com/-- is based in Boulder, Colorado, and provides fully integrated investment management and wealth advisory services to a select group of entrepreneurial families nationwide. ACCURIDE CORP: Bank Debt Trades at 3% Off in Secondary Market ------------------------------------------------------------- Participations in a syndicated loan under which Accuride Corporation is a borrower traded in the secondary market at 97.20 cents-on-the-dollar during the week ended Oct. 9, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 0.70 percentage points from the previous week, The Journal relates. The loan matures on Jan. 6, 2012. The Company pays 225 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's Ca rating and Standard & Poor's C rating. The debt is one of the biggest gainers and losers among widely quoted syndicated loans in secondary trading in the week ended Oct. 9, among the 155 loans with five or more bids. About Accuride Corp. Accuride Corporation (OTCBB: AURD) -- http://www.accuridecorp.com/ -- is one of the largest and most diversified manufacturers and suppliers of commercial vehicle components in North America. Accuride's products include commercial vehicle wheels, wheel-end components and assemblies, truck body and chassis parts, seating assemblies and other commercial vehicle components. Accuride's products are marketed under its brand names, which include Accuride, Gunite, Imperial, Bostrom, Fabco, Brillion, and Highway Original. Accuride said it has agreed to a balance sheet restructuring with the ad hoc committee of holders of its 8-1/2 percent senior subordinated notes and the steering committee of senior lenders under its credit agreement. To complete the proposed restructuring, Accuride's U.S. entities on October 8 filed a voluntary petition for protection under Chapter 11 of the U.S. Bankruptcy Code to seek approval of the prepackaged plan of reorganization (Bankr. D. Del. Case No. 09-13449). Accuride's petition listed assets of $682 million against debt totaling $847 million. Liabilities include a $304 million term loan and a $100 million revolving credit, plus the $275 million in subordinated notes. ACCURIDE CORP: Case Summary & 30 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Accuride Corporation 7140 Office Circle Evansville, IN 47715 Bankruptcy Case No.: 09-13449 Debtor-affiliates filing subject to Chapter 11 petitions: Entity Case No. ------ -------- Accuride Cuyahoga Falls, Inc. 09-13450 Accuride Distributing, LLC 09-13451 Accuride EMI, LLC 09-13452 Accuride Erie L.P. 09-13453 Accuride Henderson Limited Liability Company 09-13454 AKW General Partner L.L.C. 09-13455 AOT Inc. 09-13456 Bostrom Holdings, Inc. 09-13457 Bostrom Seating, Inc. 09-13458 Bostrom Specialty Seating, Inc. 09-13459 Brillion Iron Works, Inc. 09-13460 Erie Land Holding, Inc. 09-13461 Fabco Automotive Corporation 09-13462 Gunite Corporation 09-13463 Imperial Group Holding Corporation - 1 09-13464 Imperial Group Holding Corporation - 2 09-13465 Imperial Group, L.P. 09-13466 JAII Management Company 09-13467 Transportation Technologies Industries, Inc. 09-13468 Truck Components Inc. 09-13469 Type of Business: The Debtors make and supply commercial vehicle components in North America. The Debtors' products include commercial vehicle wheels, wheel-end components and assemblies, truck body and chassis parts, seating assemblies and other commercial vehicle components. See http://www.accuridecorp.com/ Chapter 11 Petition Date: October 8, 2009 Court: District of Delaware (Delaware) Judge: Brendan Linehan Shannon Debtors' Counsel: David S. Heller, Esq. Caroline A. Reckler, Esq. Latham & Watkins LLP 233 South Wacker Drive, Suite 5800 Chicago, IL 60606 Tel: (312) 876-7700 Fax: (312) 993-9767 Debtors' Local Counsel: Michael R. Nestor, Esq. Kara Hammond Coyle, Esq. Young Conaway Stargatt & Taylor, LLP 1000 West Street, 17th Floor Wilmington, DE 19801 Tel: (302) 571-6600 Fax: (302) 571-1253 Debtors' Financial Advisor: Howard Korenthal MorrisAnderson 55 W. Monroe Street Suite 2500 Chicago, IL 60603 Tel: (312) 254-0880 Fax: (312) 727-0180 Debtors' Claims Agent: The Garden City Group Inc. 105 Maxess Road Melville, NY 11747 Tel: (800) 327-3664 The Debtors' financial condition as of Aug. 31, 2009: Total Assets: $682,263,000 Total Debts: $847,020,000 The Debtor's Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ BNY Midwest Trust Company senior sub. notes $291,037,847 Robert Cafarelli 2 N. LaSalle Street, Suite 1020 Chicago, IL 60602 Tel: (312) 827-8688 Fax: (312) 827-8527 Matalco Inc. trade payable $1,113,730 Brian Muirhead 850 Intermodal Drive Brampton, Ontario L6T0B5 Canada Tel: (905) 790-2511 Fax: (905) 790-2057 Joseph Tryerson & Son Inc. trade payable $804,609 Nicholas Harris 2015 Polymer Drive Chattanooga, TN37401 Tel: (615) 248 2327 Fax: (615) 248-2336 Ryerson trade payable $791,756 Dora Foster 1502 Champion Drive Carrolton, TX 75006 Tel: (214) 707-7484 Fax: (927) 484-1932 Gallatin Steel Company trade payable $557,663 Marty Ashcraft 4831 US Highway 42 West Ghent, KY 41045-9704 Tel: (859) 567-3113 Fax: (800) 504-4307 American Colloid Co. trade payable $323,409 Prime Trade Inc. trade payable $321,506 Anixter Fasteners trade payable $248,044 Foseco Metallurgical Inc. trade payable $236,594 Hydro Aluminum North America trade payable $230,801 B&B Metal Processing Co. Inc. trade payable $228,683 Dawlen Corporation trade payable $220,379 Sisu Axle Inc. trade payable $217,475 B&D Thread Rolling trade payable $215,247 General Bearing Corporation trade payable $204,880 Motion Industries trade payable $195,460 Automotive & Reservoir Ind. trade payable $189,987 Church Electric Inc. trade payable $185,412 Royster Machine Shop LLC trade payable $180,775 Nu Way trade payable $177,355 CC Metal & Alloys trade payable $163,509 Integrys trade payable $152,380 Seimetal Forms trade payable $143,816 Dauber Company Inc. trade payable $138,446 Bailey Tool Manufacturing Co. trade payable $137,424 Larpen Metallurgical Service trade payable $119,250 Mercury Precision Products trade payable $119,082 HFI LLC trade payable $119,038 Suburban Electrical Engineers trade payable $118,601 Cartus Corporation trade payable $115,832 The petition was signed by James H. Woodward, Jr., senior vice president and chief financial officer. ACCURIDE CORP: S&P Sr. Secured Debt Rating Cut to 'D' on Filing --------------------------------------------------------------- Standard & Poor's Ratings Services said it has lowered its issue ratings on Accuride Corp.'s senior secured debt to 'D' following the company's announcement that it has filed for Chapter 11 bankruptcy protection. The corporate credit rating and the issue rating on the company's subordinated notes were lowered to 'D' on Aug. 6, 2009. Accuride said its lenders have agreed to a prearranged debt restructuring plan that, if approved by the bankruptcy court, would extend the maturity of the company's secured revolving credit facility and "first-out" term loan through June 30, 2013. Accuride's "last-out" term loan could be repaid with proceeds from a rights offering of new convertible notes, which the company plans to conduct following emergence from bankruptcy. Accuride said the rights offering would be backstopped by certain holders of the existing subordinated notes. S&P could revise its recovery rating on the "last-out" term loan. Accuride said its Canadian and Mexican subsidiaries would not be included in the bankruptcy filing. Ratings List Accuride Corp. Corporate credit rating D/--/-- Downgraded Accuride Corp. To From -- ---- Senior Secured (1 issue) D C Recovery Rating 6 6 Senior Secured (2 issues) D CC Recovery Rating 1 1 ADVANCED MICRO: Appoints Thomas Seifert as Chief Financial Officer ------------------------------------------------------------------ Advanced Micro Devices said Thomas Seifert has been apponted as senior vice president and chief financial officer. Mr. Seifert, 46, will report to Dirk Meyer, AMD president and chief executive officer, and will have responsibility for leading the company's global financial organization. Mr. Seifert succeeds Robert Rivet, who was previously promoted to chief operations and administrative officer. "Thomas is a talented industry veteran with a wealth of knowledge and experience managing the operations and finances of companies in the most difficult and competitive sectors of the semiconductor industry," said Mr. Meyer. "This knowledge and experience will enable him to further strengthen AMD's financial foundation and help accelerate our transformation into a product design and marketing leader." In a regulatory filing, AMD said Mr. Seifert was appointed Senior Vice President and CFO on September 17, 2009. The appointment becomes effective October 12. Pursuant to the terms of the offer letter dated as of September 1, 2009, between Mr. Seifert and the Company, Mr. Seifert's annual base salary will be $525,000. Mr. Seifert is also eligible for an annual performance bonus under the Company's Executive Incentive Plan in a target amount of 150% of his base salary, to be payable upon his achievement of certain performance goals and objectives to be determined by the Company's Board of Directors. Mr. Seifert will also receive an option to purchase 250,000 shares of the Company's common stock at an exercise price equal to the closing price of the Company's common stock on the date of the grant. The Shares will vest over a 36-month period from date of grant: 33.3% on November 15, 2010 and then 8.3% every three months over the next 24 months, assuming Mr. Seifert's continuous active service with the Company. In addition, Mr. Seifert will be granted 125,000 restricted stock units. Notwithstanding the vesting information contained in the Offer Letter, the RSUs will vest 33.3% on each of November 9, 2010, November 9, 2011, and November 9, 2012, assuming Mr. Seifert's continuous active service with the Company. Pursuant to a relocation expenses agreement dated September 3, 2009, between Mr. Seifert and the Company and a sign-on bonus agreement dated as of September 1, 2009, between Mr. Seifert and the Company, the Company will reimburse Mr. Seifert for certain relocation expenses incurred by Mr. Seifert and pay Mr. Seifert a one-time sign-on bonus of $150,000 in connection with his employment with the Company. In the event Mr. Seifert's employment with the Company is terminated within 13 months of the Effective Date, Mr. Seifert will repay all such relocation expenses and the sign-on bonus to the Company. In the event Mr. Seifert's employment with the Company is terminated after 13 months of the Effective Date but less than 24 months after the Effective Date, Mr. Seifert will repay all such relocation expenses to the Company and the sign-on bonus, less 8.33% of such relocation expenses and sign-on bonus for each full month of employment completed after the 12th month of employment. Prior to joining the Company and from October 2008, Mr. Seifert served as Chief Operating Officer and Chief Financial Officer of Qimonda AG. From April 2006 to October 2008, Mr. Seifert served as Chief Operating Officer of Qimonda AG, and from 2001 to April 2006, Mr. Seifert served as Senior Vice President and General Manager of Infineon AG. Mr. Seifert received a bachelor's degree from Friedrich Alexander University, a master's degree in economics from Wayne State University, and a master's degree in business administration from Friedrich Alexander University. About Advanced Micro Devices Headquartered in Sunnyvale, California, Advanced Micro Devices Inc. (NYSE: AMD) -- http://www.amd.com/-- provides innovative processing solutions in the computing, graphics and consumer electronics markets. As reported by the Troubled Company Reporter on October 7, 2009, Standard & Poor's Ratings Services revised its outlook on Advanced Micro Devices to positive from negative. S&P also affirmed the company's 'CCC+' corporate credit rating and all issue-level ratings. The rating reflects AMD's inconsistent and weak operating profitability, its challenged market position in microprocessers and uncertainties with respect to ongoing disputes with Intel Corp. (A+/Stable/A-1+). Sufficient liquidity and its recent joint venture with Advanced Technology Investment Corp.- that alleviates heavy capital spending requirements-partly offset those concerns. The TCR said May 26, 2009, Fitch revised the senior unsecured debt rating on Advanced Micro Devices to 'CC/RR6' from 'CCC/RR6'. Fitch affirmed AMD's Issuer Default Rating at 'B-'. The Rating Outlook is Negative. AFFILIATED COMPUTER: Bank Debt Trades at 1.17% Off -------------------------------------------------- Participations in a syndicated loan under which Affiliated Computer Services, Inc., is a borrower traded in the secondary market at 98.83 cents-on-the-dollar during the week ended Friday, Oct. 9, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents a drop of 0.45 percentage points from the previous week, The Journal relates. The loan matures on Feb. 13, 2013. The Company pays 200 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's Ba2 rating and Standard & Poor's BB rating. The debt is one of the biggest gainers and losers among widely quoted syndicated loans in secondary trading in the week ended Oct. 9, among the 155 loans with five or more bids. Affiliated Computer Services, Inc. (NYSE:ACS) -- http://www.acs- inc.com/ -- is a provider of business process outsourcing and information technology services to commercial and government clients. The Company has two segments based on the clients it serves: commercial and government. The commercial segment accounted for approximately 60% of its revenues during the fiscal year ended June 30, 2008 (fiscal 2008). The Company provides services to a variety of clients worldwide, including information technology, human capital management, finance and accounting, customer care, transaction processing, payment services and commercial education. During fiscal 2008, revenues from the government segment accounted for approximately 40% of the Company's revenues. The Company services its clients through long-term contracts. It supports client operations in more than 100 countries. In March 2009, it acquired e-Services Group International. In June 2009, it completed the acquisition of United Kingdom-based Anix. ACCURIDE CORP: Wins Nod on First-Day Motions, Interim DIP Loan -------------------------------------------------------------- Accuride Corporation has received approval from the U.S. Bankruptcy Court of key "first day" motions which will give the company the resources and flexibility to fund on-going uninterrupted operations. The Court-approved motions include: * Permitting Accuride to pay employee wages, employee benefits, and reimbursable expenses; * Granting immediate access, to $25 million of the Company`s $50 million Debtor-in-Possession (DIP) loan; * Allowing Accuride to honor the terms of key customer programs; and * Authorizing Accuride to use its existing cash management systems and bank accounts to cover future expenses including supplier payments. "The prompt approval of our first-day motions solidifies our ability to ensure normal operations at all of our facilities, providing for uninterrupted supply and on-time delivery to our customers," said Bill Lasky, Accuride's President, CEO, and Chairman of the Board. "[The] Court action, establishes a strong basis for us as we move through this process and should provide our employees, customers, and suppliers with reassurance that we have the necessary liquidity as we put into place the capital structure for the pursuit and implementation of our strategic initiatives." On October 8, 2009, Accuride Corporation filed a voluntary petition for relief under Chapter 11 of the U.S. Bankruptcy Code in the District of Delaware. As a result of the restructuring, the Company expects to eliminate a significant portion of its existing debt and emerge as a financially stronger company with a sustainable capital structure. About Accuride Corp. Accuride Corporation (OTCBB: AURD) -- http://www.accuridecorp.com/ -- is one of the largest and most diversified manufacturers and suppliers of commercial vehicle components in North America. Accuride's products include commercial vehicle wheels, wheel-end components and assemblies, truck body and chassis parts, seating assemblies and other commercial vehicle components. Accuride's products are marketed under its brand names, which include Accuride, Gunite, Imperial, Bostrom, Fabco, Brillion, and Highway Original. Accuride agreed to a balance sheet restructuring with the ad hoc committee of holders of its 8-1/2% senior subordinated notes and the steering committee of senior lenders under its credit agreement. To complete the proposed restructuring, Accuride's U.S. entities on October 8 filed a voluntary petition for protection under Chapter 11 of the U.S. Bankruptcy Code to seek approval of the prepackaged plan of reorganization (Bankr. D. Del. Case No. 09-13449). Accuride's petition listed assets of $682 million against debt totaling $847 million. Liabilities include a $304 million term loan and a $100 million revolving credit, plus the $275 million in subordinated notes. AGA MEDICAL: S&P Puts 'B+' Corp. Rating on CreditWatch Positive --------------------------------------------------------------- On Oct. 8, 2009, Standard & Poor's Ratings Services placed its B+' corporate credit and other ratings on Plymouth, Minnesota-based AGA Medical on CreditWatch with positive implications. "The CreditWatch listing is prompted by AGA Medical Holdings' planned IPO," said Standard & Poor's credit analyst Cheryl Richer. The company's common stock is being offered at a selling price of between $19 and $21 per share. Estimated proceeds of $152 million, net of underwriting discounts and offering expenses, are based on an average share price of $20. The proceeds will be used primarily to pay down the $65 million principal amount of 10% senior subordinated payment-in-kind notes due 2012, $48 million of accrued and unpaid dividends on Class A common stock and Series A and Series B preferred stock, and $25 million on the revolving credit facility. In addition, the Series A and Series B preferred stock (which S&P view as a quasi debt security) will be converted into common stock immediately prior to the completion of the offering. If the proposed IPO is successful, S&P believes AGA Medical's financial risk profile will materially improve, given debt paydown and the elimination of preferred stock in the capital structure. In addition, liquidity will improve as the company regains access to its $25 million revolving credit facility. Adjusted debt to EBITDA could fall to less than 4x from 8.6x for the 12 months ended June 30, 2009. AIRTRAN HOLDINGS: Expects to Raise $145MM in Securities Offerings ----------------------------------------------------------------- AirTran Holdings, Inc., intends to offer $100,000,000 aggregate principal amount of 5.25% Convertible Senior Notes due 2016. AirTran has granted the underwriters of the notes offering a 30-day option to purchase up to an additional $15,000,000 aggregate principal amount of the notes, solely to cover over- allotments. The Company expects proceeds of $97,250,000 after underwriting discounts and commissions. Morgan Stanley & Co. Incorporated is acting as sole bookrunner and Raymond James & Associates, Inc., is acting as co-manager for the notes offering. SkyWorks Securities, LLC, will act as financial advisor to AirTran. AirTran also intends to offer common stock pursuant to an underwriting agreement with Morgan Stanley Co. Incorporated, acting as sole bookrunner and Raymond James & Associates, Inc., as co-manager. Specifically AirTran intends to offer 9,842,520 shares of its common stock to the public at a price of $5.08 per share. AirTran has granted the underwriters the option to purchase up to 1,476,378 shares of AirTran's common stock solely to cover over-allotments, if any. The Company expects proceeds of $47,812,502 after underwriting discounts and commissions. The notes will be convertible into AirTran common stock at an initial conversion rate of 164.0420 shares of AirTran common stock per $1,000 principal amount of notes, which is equivalent to an initial conversion price of approximately $6.10 per share of AirTran common stock and represents an approximately 20% premium to the price at which AirTran's common stock was offered in the concurrent common stock offering. The conversion rate and the conversion price will be subject to adjustment in certain circumstances. The notes will bear interest at a rate of 5.25% per annum, payable on May 1 and November 1 of each year, beginning May 1, 2010. The notes will mature on November 1, 2016, and may not be redeemed by AirTran prior to maturity. Holders of the notes may require AirTran to repurchase all or any portion of the notes if AirTran is involved in certain types of corporate transactions or other events constituting a fundamental change. The notes are senior unsecured debt obligations of AirTran. There is no sinking fund for the notes. The closing of the notes offering and the common stock offering are expected to occur on October 14, 2009, subject to satisfaction of various customary closing conditions. Neither the closing of the notes offering nor the closing of the common stock offering will be contingent on the closing of the other. AirTran intends to use the net proceeds from the offerings for general corporate purposes. AirTran has filed a registration statement with the Securities and Exchange for the offering of the notes and the offering of the common stock. AirTran initially planned to offer $75,000,000 aggregate principal amount of Convertible Senior Notes due 2016 and grant the underwriters a 30-day option to purchase an additional $11,250,000 aggregate principal amount of the notes, solely to cover over- allotments, if any. AirTran also initially planned to offer 9,000,000 shares of its common stock and grant the underwriters a 30-day option to purchase up to an additional 1,350,000 shares of common stock from AirTran solely to cover over-allotments, if any. A full-text copy of the final prospectus supplement related to the convertible notes offering is available at no charge at: http://ResearchArchives.com/t/s?46b7 A full-text copy of the final prospectus supplement related to the common stock offering is available at no charge at: http://ResearchArchives.com/t/s?46b8 A full-text copy of the free writing prospectus is available at no charge at http://ResearchArchives.com/t/s?46b9 Headquartered in Orlando Florida, AirTran Holdings Inc. (NYSE: AAI) -- http://www.airtran.com/-- a Fortune 1000 company, is the parent company of AirTran Airways, which has been ranked the number one low-cost carrier in the Airline Quality Rating study for the past two years. AirTran is the only major airline with Wi-Fi on every flight and offers coast-to-coast service on North America's newest all-Boeing fleet. Its low-cost, high-quality product also includes assigned seating, Business Class and complimentary XM Satellite Radio on every flight. * * * As reported by the Troubled Company Reporter on October 7, 2009, Moody's Investors Service affirmed the Caa2 corporate family and probability of default ratings of AirTran Holdings Corp., Inc., the Ca rating on AirTran's $96 million senior unsecured convertible notes due in 2023 and also the SGL-4 Speculative Grade Liquidity Rating. Moody's also changed the ratings outlook to stable from negative. The TCR said on July 10, 2009, Standard & Poor's Ratings Services affirmed the airline's corporate credit rating at CCC+/Stable/--. ALLIS-CHALMERS: Has Enough Liquidity, Conservative Debt Profile --------------------------------------------------------------- Allis-Chalmers Energy Inc. said Munawar H. Hidayatallah, its Chief Executive Officer, and Victor M. Perez, its Chief Financial Officer, were slated to make a presentation at the 2009 Johnson Rice Energy Conference on October 7, 2009. The conference was held October 6 to 8, 2009, in New Orleans, Louisiana. Messrs. Hidayatallah and Perez said the Company has satisfactory liquidity and conservative debt profile. The Company, they said, has low current debt maturities and low reliance on bank debt. Messrs. Hidayatallah and Perez estimate 50% to 60% of the Company's 2009 EBITDA is attributable to its international markets. In response to economic and industry conditions, the Company has, among other things: -- reduced its workforce and benefits and reduced fixed costs -- eliminated or downsized certain operations locations; -- enhanced revenues, focusing on growth markets and restructuring sales force; -- reduced capital expenditures; -- reduced revolver borrowings; and -- managed working capital -- credit and collections; inventory A full-text copy of the Company's presentation materials is available at no charge at http://ResearchArchives.com/t/s?46b6 Houston, Texas-based Allis-Chalmers Energy Inc. (NYSE: ALY) -- http://www.alchenergy.com/-- is a multi-faceted oilfield services company. Allis-Chalmers provides services and equipment to oil and natural gas exploration and production companies, domestically primarily in Texas, Louisiana, New Mexico, Oklahoma, Arkansas, offshore in the Gulf of Mexico, and internationally, primarily in Argentina, Brazil and Mexico. Allis-Chalmers provides directional drilling services, casing and tubing services, underbalanced drilling, production and workover services with coiled tubing units, rental of drill pipe and blow-out prevention equipment, and international drilling and workover services. * * * As reported by the Troubled Company Reporter on July 15, 2009, Standard & Poor's Ratings Services raised its corporate credit rating on Allis-Chalmers Energy to 'B-' from 'SD' (selective default). The outlook is negative. At the same time, S&P raised the issue-level rating on Allis-Chalmers' unsecured notes to 'B-' (the same as the corporate credit rating) from 'D'. S&P revised the recovery rating on this debt to '4' from '3' indicating expectations of average (30%-50%) recovery of principal in the event of a payment default. The TCR said July 9, 2009, Moody's Investors Service affirmed Allis-Chalmers' B3 Corporate Family Rating, changed its Probability of Default Rating to B3 from B3/LD, and upgraded its $225 million 9% senior notes due 2014 to Caa1 (LGD 4, 62%) from Caa3 (LGD 3, 35%) and its $205 million 8.5% senior notes due 2017 to Caa1 (LGD 4, 62%) from Ca (LGD 4, 40%). The rating outlook is stable. AMC ENTERTAINMENT: Bank Debt Trades at 6% Off in Secondary Market ----------------------------------------------------------------- Participations in a syndicated loan under which AMC Entertainment, Inc., is a borrower traded in the secondary market at 94.27 cents- on-the-dollar during the week ended Oct. 9, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents a drop of 0.55 percentage points from the previous week, The Journal relates. The loan matures on Jan. 23, 2013. The Company pays 175 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's Ba2 rating and Standard & Poor's BB- rating. The debt is one of the biggest gainers and losers among widely quoted syndicated loans in secondary trading in the week ended Oct. 9, among the 155 loans with five or more bids. Headquartered in Kansas City, Missouri, AMC Entertainment Inc. -- http://www.amctheatres.com/-- is organized as an intermediate holding company. Its principal directly owned subsidiaries are American Multi-Cinema, Inc., and AMC Entertainment International, Inc. The Company conducts its theatrical exhibition business through AMC and its subsidiaries and AMCEI. As reported in the Troubled Company Reporter June 1, 2009, Standard & Poor's Ratings Services affirmed its ratings on AMC's proposed senior unsecured notes due 2019, following the company's announcement that it intends to issue $600 million of notes (upsized from $300 million). The issue-level rating remains at 'B-' (one notch lower than the 'B' corporate credit rating on AMC) and the recovery rating remains at '5', indicating S&P's expectation of modest (10% to 30%) recovery for noteholders in the event of a payment default. According to the Troubled Company Reporter on May 29, 2009, Moody's Investors Service rated AMC's new $600 million senior unsecured notes B1. Proceeds will be used to retire AMC's $250 million 8.625% notes due August 2012 and to bolster liquidity by reducing outstanding amounts under its $200 million senior secured revolving term loan due January 2012 and adding to the company's cash balance. The TCR also said June 1, 2009, Fitch Ratings assigned a 'B/RR4' rating to AMC's senior unsecured note offering due 2019. AMERICAN BUSINESS: Trustee Reaches $100-Mil. Settlement with Banks ------------------------------------------------------------------ Harold Brubaker at The Philadelphia Inquirer reports that George L. Miller at the Philadelphia accounting firm Miller, Coffey, Tate L.L.P., the bankruptcy trustee for American Business Financial Services Inc. has reached a $100 million settlement with investment banks that helped the Company package loans into securities. Citing Mr. Miller, The Philadelphia Inquirer relates that the settlement would provide no immediate relief for investors due to additional litigation. The Philadelphia Inquirer relates that Steven M. Coren, Mr. Miller's lawyer, said that the settlement is for a lawsuit that the trustee filed three years ago in Philadelphia's Court of Common Pleas calls for: -- $55 million from JPMorgan Chase & Co., including Bear Stearns Cos. Inc.; -- $37.5 million from Credit Suisse; and -- $7.5 million from Morgan Stanley. The Philadelphia Inquirer, citing Mr. Miller, says that two legal battles remain before investors receive any money from American Business' estate. One involves Greenwich Capital Financial Products Inc., which provided $500 million of debtor-in-possession financing to American Business Financial after the bankruptcy filing, a lawsuit that froze payments to investors. The second is an arbitration case against the lender's accounting firm, BDO Seidman L.L.P. Miller, which is seeking $962 million from that firm. About American Business Financial Headquartered in Philadelphia, Pennsylvania, American Business Financial Services, Inc., -- http://www.abfsonline.com/-- together with its subsidiaries, is a financial services organization operating mainly in the eastern and central portions of the United States and California. The company originates, sells and services home mortgage loans through its principal direct and indirect subsidiaries. The company, along with four of its subsidiaries, filed for chapter 11 protection on Jan. 21, 2005 (Bankr. D. Del. Case No. 05-10203). The Bankruptcy Court converted the cases to a chapter 7 liquidation on May 17, 2005. Bonnie Glantz Fatell, Esq., at Blank Rome LLP represents the Debtors. George L. Miller was appointed chapter 7 trustee in the case. John T. Carroll, III, Esq., at Cozen O'Connor, represents the Case Trustee. When the Debtors filed for protection from their creditors, they listed $1,083,396,000 in total assets and $1,071,537,000 in total debts. AMERICAN NATURAL ENERGY: Completes Debenture Repurchase ------------------------------------------------------- American Natural Energy Corporation said October 1 it completed the repurchase of the outstanding 8% Secured Debenture debt and accrued interest totaling $3.7 million, previously announced on July 23, 2009. Since completing a $2 million private placement of common shares in July 2009 and the completion of the transaction, ANEC has retired a total of $10.825 million in secured debentures, eliminated approximately $2.9 million in accrued interest and approximately $2.2 million in accounts payable and accrued liabilities and assumed operations of its Bayou Couba field. Since assuming operations of the Bayou Couba field, daily production has been increased to approximately 150 barrels of oil per day with the implementation of field operating efficiencies. ANEC plans to commence recompletion of behind pipe zones in 3 wells during October and to commence development drilling opportunities before the end of the year. Tulsa, Oklahoma-based American Natural Energy Corporation (TSX Venture: ANR.U) is an independent exploration and production company with operations in St. Charles Parish, Louisiana. As of June 30, 2009, ANEC had total assets of $3,313,407 and total liabilities of $23,467,408. The Company has said it currently has a severe shortage of working capital and funds to pay its liabilities. The Company's debentures in the amount of $10,825,000 which were due on September 30, 2006, have been in default since that time. As of August 7, 2009, certain debentures have been re-purchased and the remainder of the debentures has agreed upon repurchase terms. As of June 30, 2009, interest in the amount of $2,815,000 on the debentures had accrued and was unpaid when due. The Company has no current borrowing capacity with any lender. The Company incurred a net loss of $1,908,000 for the six months ended June 30, 2009. The Company has sustained substantial losses during the years ended December 31, 2008, and December 31, 2007, totaling roughly $61,000 and $3.2 million, respectively, and has a working capital deficiency and an accumulated deficit at June 30, 2009, which leads to substantial doubt concerning the ability of the Company to meet its obligations as they come due. The Company also has a need for substantial funds to develop its oil and gas properties and repay borrowings as well as to meet its other current liabilities. AMERICAN REPROGRAPHICS: S&P Puts 'BB+' Rating on $36.1 Mil. Loan ---------------------------------------------------------------- Standard & Poor's Ratings Services assigned its issue-level and recovery ratings to American Reprographics Co. LLC's new $36.1 million class B term loan due 2012, which was issued under the accordion feature of the company's credit agreement. S&P rated the loan 'BB+' (two notches higher than the 'BB-' corporate credit rating on the company) with a recovery rating '1', indicating S&P's expectation of very high (90% to 100%) recovery for lenders in the event of a payment default. On Oct. 5, 2009, the Company amended its credit agreement to include a $35 million term loan pre-payment (applied pro rata to the amortization in the first three quarters of 2010) and less stringent leverage, senior leverage, interest coverage, and fixed- charge coverage ratio financial covenants. In addition, the amendment reduced the revolving credit commitment by $25 million to $49.5 million, and consenting lenders deferred a total of $36.1 million of 2011 amortization payments until December 2012, the maturity date of the credit facilities, by converting these obligations into the class B term loan. The agreement also increased maximum pricing on the initial revolving credit and term loan facilities to LIBOR plus 3.75% from LIBOR plus 1.75%.The interest rate for the class B term loan is LIBOR plus 4.75%. The corporate credit rating on American Reprographics is 'BB-' and the rating outlook is negative. Ratings List American Reprographics Co. LLC Corporate Credit Rating BB-/Negative/-- New Ratings $36.1M class B term loan due 2012 BB+ Recovery Rating 1 AMERICANA FOODS: Capricorn's Appeal on Dismissed Claims Dumped -------------------------------------------------------------- CoolBrands International Inc. said that the New York state appellate court has dismissed an appeal by Capricorn Investors III of an earlier decision that threw out most of its claims against the Company in the Chapter 7 bankruptcy of Americana Foods, The Canadian Press reports. According to The Canadian Press, CoolBrands said that the appellate court found no merit in Capricorn's claims of fraudulent inducement, negligent misrepresentation, and other arguments. The Canadian Press says that the appeal was against a June 13, 2008 decision by Judge Bernard J. Fried of the New York State Supreme Court in which seven of 10 claims made by Capricorn in its complaint against CoolBrands and its affiliates and officers were dismissed. Capricorn, The Canadian Press relates, has also commenced an appeal of Judge Fried's July 16, 2009 dismissal of its revised complaint in its entirety. The appeal is yet to be heard, says the report. About Coolbrands International Headquartered in Ontario, Canada, CoolBrands International Inc. (Toronto: COB.A.TO) -- http://www.coolbrandsinc.com/-- operated in the frozen dessert segment (until it was sold on April 1, 2007) and managed the operations of its former foodservice segment under contract with the purchaser of the foodservice business. Beginning in the latter part of fiscal 2006 and carrying on into fiscal 2007, CoolBrands has been in the process of selling its operating business units in an effort to eliminate operating losses and to raise cash to repay its debt obligations. Going Concern Doubt BDO Seidman LLP, in Melville, New York, expressed substantial doubt about Coolbrands International's ability to continue as a going concern after auditing the Company's financial statements as of the year ended Dec. 31, 2006. The auditing firm pointed to the company's recurring losses from operations and subsequent discontinuation of many of it key operations. About Americana Foods Based in Dallas, Texas, Americana Foods Limited Partnership aka Americana Foods I Limited Partnership, a subsidiary of CoolBrands International Inc. (TSX: COB.A), manufactures soft serve mixes, packaged ice cream, frozen snacks and other food products for CoolBrands and for well known national retailers, food companies and restaurant chains. CB Americana LLC filed an involuntary chapter 7 Case against the Company on Oct. 11, 2006 (Bankr. N.D. Tex. Case No. 06-34387). CB Americana is represented in the case by Jason S. Brookner, Esq., at Andrews Kurth LLP. AMR CORP: To Announce Q3 Results on October 21 ---------------------------------------------- AMR Corporation, parent company of American Airlines, Inc., anticipates announcing third quarter 2009 earnings on Wednesday, October 21, 2009. In conjunction with the announcement, on that date AMR will host a conference call with the financial community at 2 p.m. Eastern Time. During this conference call, senior management of AMR will review, among other things, details of AMR's third quarter financial results, the industry environment, recent strategic and cost reduction initiatives, the revenue environment, cash flow results, liquidity measures, capital requirements and will provide an outlook for the future. A live webcast of this call will be available on the Investor Relations page of the American Airlines Website http://www.aa.com/ A replay of the webcast will also be available for several days following the call. Headquartered in Forth Worth, Texas, AMR Corporation (NYSE: AMR) operates with its principal subsidiary, American Airlines Inc. -- http://www.aa.com/-- a worldwide scheduled passenger airline. At the end of 2006, American provided scheduled jet service to about 150 destinations throughout North America, the Caribbean, Latin America, including Brazil, Europe and Asia. American is also a scheduled airfreight carrier, providing freight and mail services to shippers throughout its system. Its wholly owned subsidiary, AMR Eagle Holding Corp., owns two regional airlines, American Eagle Airlines Inc. and Executive Airlines Inc., and does business as "American Eagle." American Beacon Advisors Inc., a wholly owned subsidiary of AMR, is responsible for the investment and oversight of assets of AMR's U.S. employee benefit plans, as well as AMR's short-term investments. AMR Corp. reported a net loss of $390 million for the second quarter of 2009, or $1.39 per share. At June 30, 2009, the Company had $24.1 billion in total assets; $8.2 billion in total current liabilities, $8.3 billion in long- term debt, less current maturities, $572 million in obligations under capital leases, less current obligations, $6.8 billion in pension and postretirement benefits, and $3.1 billion in other liabilities, deferred gains and deferred credits; resulting in a $3.0 billion stockholders' deficit. * * * AMR carries a 'CCC' issuer default rating from Fitch Ratings. It has 'Caa1' corporate family and probability of default ratings from Moody's. It has 'B-' corporate credit rating, on watch negative, from Standard & Poor's. ANESIVA INC: Posts $3.27-Mil. Loss in Second Quarter ---------------------------------------------------- Anesiva, Inc., reported a net loss of $3,266,000 on zero revenue for the second quarter ended June 30, 2009, compared with a net loss of $21,859,000 on contract revenues of $302,000 for the same period in 2008. Research and development expenses decreased 84% to $1,726,000 in the three months ended June 30, 2009, compared to $10,598,000 in the corresponding period last year. The decrease in research and development expenses was primarily due to: -- decrease in clinical trial costs of $5.1 million primarily due to the completion of Phase 2 and Phase 3 Adlea trials for post surgical pain and osteoarthritis pain during fiscal 2008; -- decrease in compensation and employee related expense of $2.3 million due to lower headcount as a result of the restructuring events in fiscal 2008; -- decrease in facilities and related expenses of $847,000 due to lower headcount and overhead allocation; -- decrease in professional services of $223,000 primarily due to lower clinical related expenses; and -- decrease in other research and development expenses of $211,000. General and administrative expenses decreased 65% to 1,505,000 in the three months ended June 30, 2009, from $4,278,000 in the same period of 2008. At June 30, 2009, the Company's consolidated balance sheet showed $1,950,000 in total assets, and $20,371,000 in total liabilities, resulting in a $18,421,000 stockholders' deficit. The Company's consolidated balance sheet also showed strained liquidity with $1,502,000 in total current assets available to pay $19,621,000 in total current liabilities. Full-text copies of the Company's consolidated financial statements for the quarter ended June 30, 2009, are available for free at http://researcharchives.com/t/s?46a5 Going Concern Doubt As reported in the Troubled Company Reporter on April 7, 2009, Ernst & Young LLP, in Palo Alto, California, expressed substantial doubt about Anesiva, Inc.'s ability to continue as a going concern after auditing the Company's consolidated financial statements for the year ended December 31, 2008. The auditing firm said that the Company has incurred recurring operating losses and negative cash flows from operations and has a working capital deficiency. The Company has an accumulated deficit of $322.8 million as of June 30, 2009. Additionally, the company has used net cash of $9.4 million and $39.9 million to fund its operating activities for the six months ended June 30, 2009, and 2008, respectively. To date the Company's operating losses have been funded primarily from outside sources of capital. About Anesiva Based in South San Francisco, California, Anesiva, Inc. (Nasdaq: ANSV) -- http://www.anesiva.com/-- was incorporated on January 19, 1999, in Delaware. The Company is a biopharmaceutical company focused on the development and commercialization of novel therapeutic treatments for pain management. Anesiva's lead product candidate is Adlea, a novel small molecule formulation of capsaicin that is currently in development for the management of acute pain following orthopedic surgeries. APPLETON PAPERS: Inks Second Amendment to BofA Credit Agreement --------------------------------------------------------------- Appleton Papers Inc., as borrower, Paperweight Development Corp., certain subsidiaries of PDC or the Company as guarantors, the lenders, and Bank of America, N.A., as administrative agent, swing line lender and L/C issuer, on September 30, 2009, entered into a second amendment to the Company's Credit Facility. The Second Amendment amends the terms of the Credit Facility to, among other things: -- permit the additional secured indebtedness evidenced by the Second Lien Notes; -- provide for a permanent reduction of revolving commitments by $30 million according to this schedule: (i) $5 million at December 31, 2009; (ii) $10 million at March 31, 2010; and (iii) $15 million at June 30, 2010; -- revise certain definitions, ratios and covenants contained in the Credit Facility (including the revision of provisions regarding asset dispositions and extraordinary receipts in a manner that would expand the circumstances under which prepayment of amounts under the Credit Facility would be required); -- permit less than 100%, but greater than 50%, ownership of PDC by the employee stock ownership plan; -- increase the interest rate margin applicable to the term loans; and -- provide payment to the lenders consenting to the amendment of a fee based on their commitments at the time of effectiveness of the amendment. The Appleton Papers Retirement Savings and Employee Stock Ownership Plan, through its employee stock ownership plan, owns 100% of the common stock of PDC, which, in turn, owns 100% of the Company. A full-text copy of the Second Amendment to Credit Agreement, dated as of September 30, 2009, among Appleton Papers Inc., as the U.S. Borrower, Paperweight Development Corp., certain guarantors, Bank of America, N.A. as administrative agent, swing line lender and L/C issuer, and the lenders, is available at no charge at: http://ResearchArchives.com/t/s?46a0 Distressed Exchange As reported by the TCR on August 20, 2009, Standard & Poor's Ratings Services lowered its corporate credit rating on Appleton Papers to 'CC' from 'B'. At the same time, S&P lowered the issue- level ratings on the company's senior notes and subordinated notes to 'C' from 'CCC+'. The outlook is negative. S&P also placed 'B+' issue-level rating on the Company's secured bank credit facilities on CreditWatch with negative implications. The recovery rating remains '2', indicating S&P's expectation of substantial (70% to 90%) recovery in the event of payment default. The rating actions follow Appleton's announcement that it is offering to exchange $200 million of proposed new second-lien secured notes for the outstanding senior unsecured and subordinated notes in its capital structure. In the case of the subordinated notes, the exchange for the new notes would represent a substantial discount to the par amount. For the senior unsecured notes, the exchange for the new notes would be at par, while the maturity would be extended beyond the original maturity of the existing notes. "As a result, S&P view the exchanges as being tantamount to default given Appleton's stressed and highly leveraged financial risk profile and S&P's concerns around Appleton's ability to service its current capital structure over the intermediate term due to the challenging operating environment," said Standard & Poor's credit analyst Andy Sookram. The TCR also said Moody's Investors Service assigned a B3 rating to Appleton Papers' proposed new secured notes due 2015 and downgraded the company's existing senior subordinated notes to Ca from Caa1. At the same time, Moody's downgraded the company's probability of default rating to Caa3 from B2. Moody's also affirmed the company's B2 corporate family rating and speculative grade liquidity rating of SGL-4. The outlook remains negative. Because the exchange offer for the senior subordinated debt is being done at 60% of par, and nonconsenting holders of the existing senior unsecured and senior subordinated notes will lose certain rights and be effectively subordinated to the new notes, Moody's views the exchange offer to be a distressed exchange, which is an event of default under Moody's definition of default. About Appleton Papers Appleton Papers Inc., headquartered in Appleton, Wisconsin, develops and manufactures specialty coated paper products, including carbonless paper, thermal paper, and other specialty papers. It also develops and manufactures flexible packaging products. APPLETON PAPERS: Terms of Second Lien Notes Indenture ----------------------------------------------------- Appleton Papers Inc. on September 30, 2009, issued $161,766,000 aggregate principal amount of new 11.25% Second Lien Notes due 2015 in connection with its previously announced private offers to exchange its outstanding 8.125% Senior Notes due 2011 and 9.75% Senior Subordinated Notes due 2014. The Company accepted for exchange $91,692,000 aggregate principal amount of the Senior Notes, representing 84.02% of the outstanding Senior Notes, and $104,084,000 aggregate principal amount of the Senior Subordinated Notes, representing 77.41% of the outstanding Senior Subordinated Notes. The Second Lien Notes were issued pursuant to an indenture, dated as of September 30, 2009, among the Company, each of the guarantors, and U.S. Bank National Association, as trustee and collateral agent. Second Lien Notes Indenture The Second Lien Notes mature on December 15, 2015. The Second Lien Notes will accrue interest from the issue date at a rate of 11.25% per year and will be payable in cash semi-annually in arrears on each June 15 and December 15, commencing December 15, 2009. The Company's obligations under the Second Lien Notes are guaranteed by Paperweight Development Corp. and certain of the Company's present and future domestic and foreign subsidiaries that guarantee the Company's obligations under its existing senior credit facility. The Guarantees are second priority senior secured obligations of the Guarantors. The Second Lien Notes and the Guarantees rank equally in right of payment with all of the Guarantors' existing and future senior debt, including their guarantees under the Credit Facility, and rank senior in right of payment to all of the Guarantors' existing and future subordinated debt. The Guarantees are effectively subordinated to all of the first priority senior secured debt of the Guarantors, to the extent of the collateral securing such debt, including their guarantees under the Credit Facility. The Second Lien Notes and the Guarantees are secured by a second- lien security interest in the collateral granted to the Collateral Agent for the benefit of the holders of the Second Lien Notes. These liens are junior in priority to the liens on this same collateral securing the Company's obligations under the Credit Facility, and to certain other permitted liens. The collateral securing the Second Lien Notes consists of substantially all of the Company's and the Guarantors' property and assets that secure the Company's obligations under the Credit Facility, which excludes: (i) assets over which the granting or perfection of a security in such assets would violate any applicable law or the provisions of the respective contract to be pledged (except to the extent applicable law renders such provisions unenforceable), (ii) certain commercial tort claims in an amount under a determined threshold, (iii) leaseholds, (iv) certain fee interests in real property and (v) certain other limited exceptions. While the collateral securing the Company's obligations under the Credit Facility includes the equity interests of the Company and substantially all of its domestic subsidiaries, the collateral securing the Company's obligations under the Second Lien Notes does not include securities and other equity interests of the Company, PDC or their respective subsidiaries. On or prior to March 15, 2011, the Company may redeem the Second Lien Notes, in whole but not in part, at 122.50% of the principal amount plus accrued and unpaid interest as set forth in the Indenture; provided, however, that if prior to such redemption, a Payment In Kind has been made pursuant to the term of the Indenture, then the redemption price will be 111.25% of the principal amount plus accrued and unpaid interest as set forth in the Indenture. After March 15, 2011, the Company may redeem the Second Lien Notes, in whole but not in part, at a redemption price equal to the "make-whole" amount set forth in the Indenture. The Company may also, subject to certain limitations, use the proceeds of certain sales of the Company's equity interests to redeem up to 35% of the aggregate principal amount of the Second Lien Notes at the redemption price set forth in the Indenture. If the Company experiences specified change of control events, the Company must offer to repurchase the Second Lien Notes at a repurchase price equal to 101% of the principal amount of the Second Lien Notes repurchased, plus accrued and unpaid interest, if any, to the applicable repurchase date. If the Company sells assets under specified circumstances, the Company must offer to repurchase the Second Lien Notes at a repurchase price equal to 100% of the principal amount of the Second Lien Notes repurchased, plus accrued and unpaid interest, if any, to the applicable repurchase date. The Appleton Papers Retirement Savings and Employee Stock Ownership Plan, through its employee stock ownership plan, owns 100% of the common stock of PDC, which, in turn, owns 100% of the Company. In the event that (1) the ESOP ceases to beneficially own 100% of the common stock of PDC or PDC ceases to beneficially own 100% of the common stock of the Company; (2) the ESOP ceases to have all voting power in respect of PDC or PDC ceases to have all voting power in respect of the Company; (3) the ESOP transfers any of its economic interest in PDC or PDC transfers any of its economic interest in the Company; or (4) the ESOP is terminated; then, the Company will make a one-time payment in respect of the Second Lien Notes to the holders thereof in the form of an additional payment of Second Lien Notes in an amount equal to 11.25% of the principal amount of the Second Lien Notes then outstanding, subject to certain exceptions set forth in the Indenture. The Indenture governing the Second Lien Notes contains covenants that, among other things, restrict the Company's and PDC's ability, and the ability of the Company's restricted subsidiaries, to: -- sell assets or merge or consolidate with or into other companies; -- borrow money; -- incur liens; -- pay dividends or make other distributions; -- make other restricted payments and investments; -- place restrictions on the ability of certain of the Company's subsidiaries to pay dividends or other payments to the Company; -- enter into sale and leaseback transactions; -- amend particular agreements relating to the Company's Transaction with the Company's former parent Arjo Wiggins Appleton Limited and the ESOP; and -- enter into transactions with certain affiliates. These covenants are subject to important exceptions and qualifications set forth in the Indenture. The Indenture provides for customary events of default. In the case of an event of default arising from specified events of bankruptcy or insolvency, all outstanding Second Lien Notes will become due and payable immediately without further action or notice. If any other event of default under the Indenture occurs or is continuing, the Trustee or holders of at least 25% in aggregate principal amount of the then outstanding Second Lien Notes may declare all the Second Lien Notes to be due and payable immediately. The Second Lien Notes were issued in reliance upon Section 4(2) of the Securities Act of 1933, as amended, and Regulation S under the Securities Act. The Second Lien Notes and the Guarantees have not been registered under the Securities Act, and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. Supplemental Indentures On September 9, 2009, a third supplemental indenture, dated as of September 9, 2009, to the indenture, dated as of June 11, 2004, governing the Senior Notes, was entered into among the Company, as issuer, each of the guarantors, and U.S. Bank National Association, as trustee. Additionally, on September 9, 2009, a third supplemental indenture, dated as of September 9, 2009, to the indenture, dated as of June 11, 2004, governing the Senior Subordinated Notes, was entered into among the Company, as issuer, each of the guarantors, and U.S. Bank National Association, as trustee. The Supplemental Indentures amend the Original Indentures to, among other things, eliminate substantially all of the restrictive covenants and certain events of default and related provisions contained in the Original Indentures and the Old Notes. The Supplemental Indentures and the related amendments did not, however, become operative until September 30, 2009 when the Old Notes tendered in the Exchange Offers were accepted for exchange by the Company pursuant to the terms of the Exchange Offers. Second Lien Collateral Agreement On September 30, 2009, the Company, PDC and the Guarantors entered into a second-lien collateral agreement in favor of the Collateral Agent. Pursuant to the Second Lien Collateral Agreement and subject to certain exceptions, the Grantors have granted a continuing second-lien security interest in substantially all of their respective present and future assets to secure the prompt and complete payment, observance and performance of, among other things, their respective obligations under the Second Lien Notes. Distressed Exchange As reported by the TCR on August 20, 2009, Standard & Poor's Ratings Services lowered its corporate credit rating on Appleton Papers to 'CC' from 'B'. At the same time, S&P lowered the issue- level ratings on the company's senior notes and subordinated notes to 'C' from 'CCC+'. The outlook is negative. S&P also placed 'B+' issue-level rating on the Company's secured bank credit facilities on CreditWatch with negative implications. The recovery rating remains '2', indicating S&P's expectation of substantial (70% to 90%) recovery in the event of payment default. The rating actions follow Appleton's announcement that it is offering to exchange $200 million of proposed new second-lien secured notes for the outstanding senior unsecured and subordinated notes in its capital structure. In the case of the subordinated notes, the exchange for the new notes would represent a substantial discount to the par amount. For the senior unsecured notes, the exchange for the new notes would be at par, while the maturity would be extended beyond the original maturity of the existing notes. "As a result, S&P view the exchanges as being tantamount to default given Appleton's stressed and highly leveraged financial risk profile and S&P's concerns around Appleton's ability to service its current capital structure over the intermediate term due to the challenging operating environment," said Standard & Poor's credit analyst Andy Sookram. The TCR also said Moody's Investors Service assigned a B3 rating to Appleton Papers' proposed new secured notes due 2015 and downgraded the company's existing senior subordinated notes to Ca from Caa1. At the same time, Moody's downgraded the company's probability of default rating to Caa3 from B2. Moody's also affirmed the company's B2 corporate family rating and speculative grade liquidity rating of SGL-4. The outlook remains negative. Because the exchange offer for the senior subordinated debt is being done at 60% of par, and nonconsenting holders of the existing senior unsecured and senior subordinated notes will lose certain rights and be effectively subordinated to the new notes, Moody's views the exchange offer to be a distressed exchange, which is an event of default under Moody's definition of default. About Appleton Papers Appleton Papers Inc., headquartered in Appleton, Wisconsin, develops and manufactures specialty coated paper products, including carbonless paper, thermal paper, and other specialty papers. It also develops and manufactures flexible packaging products. ARAMARK CORP: Bank Debt Trades at 8% Off in Secondary Market ------------------------------------------------------------ Participations in a syndicated loan under which ARAMARK Corporation is a borrower traded in the secondary market at 92.06 cents-on-the-dollar during the week ended Oct. 9, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents a drop of 0.65 percentage points from the previous week, The Journal relates. The loan matures on Jan. 26, 2014. The Company pays 188 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's Ba3 rating and Standard & Poor's BB rating. The debt is one of the biggest gainers and losers among widely quoted syndicated loans in secondary trading in the week ended Oct. 9, among the 155 loans with five or more bids. ARAMARK Corporation -- http://www.aramark.com/-- is the world's #3 contract foodservice provider (behind Compass Group and Sodexo) and the #2 uniform supplier (behind Cintas) in the US. It offers corporate dining services and operates concessions at many sports arenas and other entertainment venues, while its ARAMARK Refreshment Services unit is a leading provider of vending and beverage services. The Company also provides facilities management services. Through ARAMARK Uniform and Career Apparel, the company supplies uniforms for healthcare, public safety, and technology workers. Founded in 1959, ARAMARK is owned by an investment group led by chairman and CEO Joseph Neubauer. Aramark Corp. carries a 'B1' long term corporate family rating from Moody's, a 'B+' long term issuer credit ratings from Standard & Poor's, and a 'B' long term issuer default rating from Fitch. ASARCO LLC: Agrees to Allow Strider Construction Claims ------------------------------------------------------- ASARCO LLC entered a contract with Strider Construction Co., Inc., on February 27, 2004, under which Strider agreed to perform remediation work at certain of the Debtor's properties in the city of Everett, Washington. In July 2004, ASARCO's wholly owned subsidiary, Domestic Realty Company, Inc., agreed to sell the Properties to the Housing Authority of the city of Everett. In connection with the sale, ASARCO and Domestic Realty entered into a "Remediation Agreement" with the Everett Housing Authority. Under the Remediation Agreement, ASARCO and Domestic Realty agreed to pay the costs of certain environmental remediation efforts at the Properties and to indemnify the Everett Housing Authority for certain losses relating to remediation efforts at the Properties. Also, in connection with the sale, ASARCO executed an Assignment of Remediation Contract and Consent, by which it transferred to the Everett Housing Authority certain rights under the Strider Contract. The Everett Housing Authority subsequently paid Strider $475,000 under a settlement agreement aimed at resolving certain disputes between the Everett Housing Authority and Strider, including alleged breach of contract relating to the Assignment. Under the Settlement Agreement, the Everett Housing Authority also agreed to assign to Strider all of its rights, if any, to recover from ASARCO any portion of the $475,000 the Everett Housing Authority paid to Strider. On July 19, 2006, Strider, as assignee of the Everett Housing Authority, filed Claim No. 10339 in the ASARCO bankruptcy case, seeking recovery of $475,000. In support of the claim, Strider submitted copies of the Settlement Agreement and the Remediation Agreement. In addition, under the Settlement Agreement, the Housing Authority agreed to pursue its own claim against ASARCO for $675,000 in costs and damages allegedly incurred as a result of alleged defaults by ASARCO and assigned 20% of its recovery on the claim to Strider. On July 21, 2006, the Housing Authority filed Claim No. 10424, seeking recovery of $443,000. In support of the claim, the Housing Authority submitted a copy of the Remediation Agreement and other documents relating to the sale of the Properties. ASARCO subsequently filed an objection to Claim No. 10424. By September 1, 2009, the Housing Authority assigned Claim No. 10424 to Strider. ASARCO, Strider, and the Housing Authority reviewed their records, exchanged correspondence relating to the claims, and held conference calls to discuss resolution of the claims. As a result of those discussions, ASARCO and Strider have reached an agreement regarding partial allowance of the Indemnity Claim and partial allowance of the Damages Claim. The parties stipulate that: (a) The Indemnity Claim, Claim No. 10339, is allowed as a general unsecured claim for $366,075. All amounts asserted in the Indemnity Claim in excess of $366,075 are disallowed; and (b) The Damages Claim, Claim No. 10424, is allowed as a general unsecured claim for $90,000. All amounts asserted in the Damages Claim in excess of $90,000 are disallowed. 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) ASYST TECHNOLOGIES: Can Hire True Partners as Tax Consultant ------------------------------------------------------------ The U.S. Bankruptcy Court for the Northern District of California authorized Asyst Technologies, Inc., to employ True Partners Consulting, LLC, as tax consultant. The Court also approved the employ of Foreign IP Specialists. Headquartered in Fremont, California, Asyst Technologies, Inc. -- http://www.asyst.com/-- is a leading provider of integrated automation solutions primarily for the semiconductor and flat panel display manufacturing industries. The Company is the parent company of seven subsidiaries located in various jurisdictions worldwide. Principally, the Company is the owner of a non- operating holding company organized under the laws of Japan, Asyst Technologies Holdings Company, Inc. Asyst Japan Holdings in turn owns the operating company Asyst Technologies Japan, Inc. The Company filed for Chapter 11 on April 20, 2009 (Bankr. N.D. Calif. Case No. 09-43246). Ali M.M. Mojdehi, Esq., Janet D. Gertz, Esq., and Rayla Dawn Boyd, Esq., at the Law Offices of Baker and McKenzie, serve as the Debtor's bankruptcy counsel. Epiq Bankruptcy Solutions LLC is the Debtors' notice and claims agent. AlixPartners, LLP serves as financial advisor. Andrew I. Silfen, Esq., Mette H. Kurth, Esq., Michael S. Cryan, Esq., and Schuyler G. Carroll, Esq., at Arent Fox LLP, represent the official committee of unsecured creditors. As of December 31, 2008, Asyst had total assets of $295,782,000 and total debts of $315,364,000. The Company's Japanese subsidiaries, Asyst Technologies Holdings Company, Inc., and Asyst Technologies Japan, Inc., entered into related voluntary proceedings under Japan's Corporate Reorganization Law (Kaisha Kosei Ho) on April 20, 2009. Kosei Watanabe was appointed as Trustee of Asyst Japan Holdings and ATJ. AURORA OIL: Files Chapter 11 Plan; to Give Control to Lenders ------------------------------------------------------------- Aurora Oil & Gas Corporation and its affiliate Hudson Pipeline & Processing Co., LLC, have filed a proposed amended Chapter 11 plan of reorganization and an explanatory disclosure statement. Holders of administrative claims and DIP facility claims will be paid in full, in cash. Under the Plan, outstanding letters of credit issued under the debtor-in-possession financing facility may be converted to LoCs issued under the exit facility. According to the Disclosure Statement, first lien lenders owed in excess of $73.8 million will recover 63% of their claims through the issuance of new secured notes and 32 million shares of the preferred stock of reorganized Aurora. Holders of second lien loan claims in excess of $56 million will receive 56 million shares of class A common stock of reorganized Aurora, for a 0.000002% recovery. Holders of general unsecured claims against Aurora will receive their pro rata share of $150,000 cash allocated to them, for a 6% to 9% recovery. Holders of allowed general unsecured claims against HPPC will split $50,000 in cash, for a recovery of 72% to 100%. Holders of existing common stock won't receive anything. The Bankruptcy Court will convene a hearing to consider approval of the adequacy of the information in the Disclosure Statement on November 4. The Debtor may begin soliciting votes on, then seek confirmation of, the Plan, following approval of the Disclosure Statement. A copy of the Plan filed on October 7, 2009, is available for free at: http://bankrupt.com/misc/AuroraOil_DiscStatement.pdf A copy of the Disclosure Statement is available for free at: http://bankrupt.com/misc/AuroraOil_Plan.pdf 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. Donlin Recano serves as claims and notice agent. Aurora listed between $100 million and $500 million each in assets and debts in its petition. AVAYA INC: Bank Debt Trades at 19% Off in Secondary Market ---------------------------------------------------------- Participations in a syndicated loan under which Avaya Inc., is a borrower traded in the secondary market at 80.90 cents-on-the- dollar during the week ended Oct. 9, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 0.40 percentage points from the previous week, The Journal relates. The loan matures on Oct. 26, 2014. The Company pays 275 basis points above LIBOR to borrow under the facility. The bank debt is not rated by Moody's and Standard & Poor's and is one of the biggest gainers and losers among widely quoted syndicated loans in secondary trading in the week ended Oct. 9, among the 155 loans with five or more bids. Avaya Inc., based in Basking Ridge, New Jersey, is a supplier of communications systems and software for enterprise customers. The Troubled Company Reporter stated on Sept. 16, 2009, that 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 $900 million. AVIS BUDGET: Bank Debt Trades at 6.25% Off in Secondary Market -------------------------------------------------------------- Participations in a syndicated loan under which Avis Budget Car Rental LLC is a borrower traded in the secondary market at 93.75 cents-on-the-dollar during the week ended Oct. 9, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 0.46 percentage points from the previous week, The Journal relates. The loan matures on April 1, 2012. The Company pays 125 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's Ba3 rating and Standard & Poor's CCC+ rating. The debt is one of the biggest gainers and losers among widely quoted syndicated loans in secondary trading in the week ended Oct. 9, among the 155 loans with five or more bids. Based in Parsippany, New Jersey, Avis Budget Group, Inc., provides car and truck rentals and ancillary services to businesses and consumers in the United States and internationally. As reported by the Troubled Company Reporter on April 30, 2009, Standard & Poor's Ratings Services assigned a '6' recovery rating to Avis Budget Car Rental LLC's (CCC+/Developing/--) unsecured notes, indicating expectations of negligible (0%-10%) recovery of principal in the event of a payment default. Avis Budget Car Rental LLC is a subsidiary of Avis Budget Group, Inc. (CCC+/Developing/--). BABCOCK & WILCOX: Sales Agreement Eliminated CERCLA Liability ------------------------------------------------------------- WestLaw reports that "exclusivity of remedy" clause in a prepetition purchase-and-sales agreement for the sale of industrial property of a Chapter 11 debtor that was recognized to have significant environmental problems, when viewed as a whole in context of provisions in the agreement broadly and comprehensively outlining all potential environmental liability, both for problems discovered prior to and after closing, had to be interpreted as barring any non-contractual claims by the buyer under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). Thus, a proof of claim filed by the buyer for non- contractual CERCLA or CERCLA-type damages had to be disallowed, as barred by the terms of the parties' prepetition purchase-and-sales agreement. A release executed by potentially responsible parties need not specifically refer to liability under CERCLA in order to be effective in releasing CERCLA liability. In re Babcock & Wilcox Co., --- B.R. ----, 2009 WL 2849083 (Bankr. E.D. La.) (Brown, J.). Babcock & Wilcox Company, together with its debtor-affiliates, filed for Chapter 11 protection on February 22, 2000, (Bankr. E.D. La. Case No. 00-10992), and emerged from Chapter 11 on Feb. 22, 2006. Jan Marie Hayden, Esq., at Heller, Draper, Hayden, Patrick & Horn, L.L.C., represented the Debtors. BICENT POWER: Moody's Downgrades Ratings on First Lien to 'B1' -------------------------------------------------------------- Moody's Investors Service has downgraded the first lien and second lien ratings of Bicent Power LLC to B1 and B3 from Ba3 and B1 respectively. The outlook has been revised to stable. This concludes the review that was initiated on July 13. The downgrade reflects the increase in refinancing risk stemming from the project's financial underperformance to-date and Moody's expectation that the underperformance is likely to continue. The distinction between the first and second lien ratings is being widened from one to two notches to reflect the much higher loss likely to be borne by second lien lenders in the event of a failed refinancing, as suggested by the increased gap between first and second lien financial metrics. The company has underperformed expectations to-date and its revised forecasts appear considerably weaker than was originally anticipated, particularly after the existing debt is refinanced. Nevertheless, the company will be challenged to achieve its revised forecasts by several potentially significant cost increases facing it in the next several years. In light of this together with the company's high leverage, refinancing risk is a growing concern. Though the pending sale of Bicent's interest in the Hartwell Project will result in the elimination of the project level debt and a significant reduction in the first lien term loan, it will have a mixed impact on the forecast financial metrics due to the reduction in cash flow (albeit structurally subordinated cash flow) and generating capacity and will result in a meaningful reduction in asset diversification, which previously was an important credit strength of the company. However, near term default risk remains manageable in Moody's opinion thanks to the company's high level of contracted cash flows, notwithstanding the slower than expected debt pay down and lower financial metrics. In 2008, fully consolidated debt service coverage (including project debt at Hartwell and the commodity swap embedded loan and excluding draws on the operating reserve) was just 1.07x, well below the initial forecast of 1.38x. Performance also fell short of expectations in the second half of 2007, when coverage was just 1.00x compared to a forecast of 1.19x. Based on the company's operating budget, coverage is expected to improve to 1.58x in 2009, but it will still be far short of management's initial base case forecast of 2.24x. Furthermore, the improvement in 2009 is primarily attributable to the expected receipt of a significant one-time bonus payment for the completion by Colorado Energy Management, a Bicent subsidiary that provides power plant EPC contractor service, of a gas-fired generation unit it constructed for a third party. Coverage from recurring revenues is expected to equal just 1.12x. Largely due to this underperformance, Moody's now expects that Bicent will have repaid $40 million less debt by the end of 2009 than was anticipated at the time of the sale of one of Bicent's assets, the Mountainview wind farm, in early 2008. This will result in a first lien debt balance of $169 million, 30% more than previously anticipated, and will have an ongoing impact on Bicent's financial metrics due to the terms of repayment, which are based upon a cash sweep. The lower than expected pay down is the result of a number of factors including these: 1) the EPC bonus for the completion by Colorado Energy Management of the Hobbes gas-fired generation unit is now projected to be $10 million lower than initially expected due to increased material costs; 2) operating expenses are much higher than initially forecast -- in 2009, operating expenses excluding CEM are now expected to be $9.5 million higher than forecast, an increase of 37%; and 3) 2008 and 2009 interest expense is expected to be $5.2 million higher than initially projected due to lower debt pay down. However, a portion of the lower than expected pay down is also attributable to a projected $6.6 million increase in working capital balances relative to previously forecasts. In addition, just $6.5 million of the operating reserve is forecast to have been used, which is $5.5 million less than anticipated in the initial forecast. Notwithstanding the slower than anticipated debt pay down to-date, financial metrics are only expected to be slightly weaker than originally forecast for the remaining term of the loans, assuming the company is able to achieve its forecast going forward. In 2013, roughly six months before the first lien term loan matures, debt service coverage is forecast to be 1.3x, compared to 1.5x originally. However, metrics are now projected to deteriorate much more sharply shortly after the loans are refinanced than was previously anticipated, due to a more conservative operating cash flow forecast together with the higher projected debt balances. Consolidated debt service coverage in 2016 is now projected to be just 1.01x, down from 1.41x initially, and FFO/Debt just 6%. Including the holdco PIK note, which is currently worth approximately $50 million but is projected to accrete to $125 million by 2016, FFO/Debt is now projected to equal less than 1%. While this debt is not an obligation of the borrower itself, it still increases the borrower's refinancing risk in Moody's opinion. It is important to note that this forecast deterioration in the metrics coincides with a significant increase in merchant exposure due to the expiration of the Hardin hedge. Despite the company's more conservative forecast, there is increased uncertainty going forward regarding the company's ability to achieve its projections as a result of a number of potential cost increases facing it. Though the company has not achieved its operating expense forecasts since acquiring the portfolio, it does not appear to have significantly revised its expense forecasts. The company could also face a significant increase in fuel costs for its Hardin Generating Station after the 2010 expiration of its current coal supply contract, which remains below market notwithstanding recent decreases in the market price of coal. In addition, there is now an increased probability that some form of carbon emissions regulation will have been implemented by the time the debt is refinanced. While there remains significant uncertainty regarding the ultimate costs of any such regulation and which parties will have to bear these costs, Moody's believes that this could potentially have a meaningful impact on Bicent's financial performance, particularly given the Hardin generating station's relatively high heat rate and resulting carbon emissions levels. Lastly, in light of recent changes in credit market conditions, the company is likely to face higher margins on its debt when it is refinanced, which will place additional pressure on its already narrow forecast financial metrics. While the company still expects to receive a $12 million bonus payment for the completion of Hobbes by the end of the year, Lea Power Partners, the owner of the plant, has asserted that Colorado Energy Management, Bicent's EPC and O&M service provider subsidiary, has failed to meet certain of its obligations under the EPC contract. Bicent has provided a $10 million letter of credit supporting its obligations, though no draws have been made to date and management asserts that Lea's claims have no merit. To the extent that Bicent's bonus payment is reduced further and/or Lea draws on the LC, Bicent's metrics will be weaker than currently forecast. The financial swap relating to the Hardin Generating Station, which is the most significant of the company's power and energy sales contracts and hedges, expires shortly after the term loans are schedule to mature. As a result, contracted cash flows net of fixed expenses are forecast to decline to just 3% of total EBITDA in 2016. If the Hardin agreement is not extended or replaced, the company will almost wholly exposed to merchant energy market conditions. This would constitute a significant change in the company's risk profile that could result in a further increase in the credit spreads it will have to pay on its refinanced debt. The company's metrics are expected to be very narrow at this point to begin with, leaving it with very financial flexibility in the event revenues are lower or financing costs higher than expected. On the other hand, this may provide the company the opportunity to recover a portion of its costs related to carbon, which it would probably be unable to do if it were locked into a long-term hedge or contract. While the commodity hedge will terminate in 2015, it includes an embedded loan that will still be outstanding in the amount of $46.5 million. Bicent will be required to repay this amount over the next four years through monthly payments of approximately $1.1 million, which will create a significant drain on cash flow. In addition, in 2015, the year after the term loans mature, the company will face a $6.4 million increase in property taxes related to the Hardin station. These issues were disclosed in conjunction with the initial financing, but they are of greater concern now in light of the other changes that the credit has undergone and is expected to encounter going forward. Due to the lower than expected pay down to-date, Moody's expects that the company will be in violation of its leverage covenant by early 2012 if it is unable to obtain renegotiate the covenant, obtain a waiver, or implement an equity cure, as the covenant level will drop much more quickly than Bicent's actual leverage ratio is expected to. The covenant steps down to 6.75x by the first quarter of 2012, while the leverage ratio is forecast to be nearly 7.5x as of the end of 2011, which is just three months earlier. Moody's note that the covenant only applies to the letter of credit and working capital facilities, not the term loans. These both mature in July of 2012 and would therefore need to be replaced anyway not long after the covenant violation is forecast to occur regardless of the violation itself. However, any replacement credit facilities or alternative means of providing credit support and liquidity the company is able to obtain are likely to be more expensive. Moody's notes that while the company is required to apply the first 75% of any excess cash flows to the prepayment of first lien debt, it can choose how to allocate the remaining 25% among the first and second lien term loans and the PIK note at the holding company level. Management has indicated that it is its intention to apply all this money towards the repayment of the first lien. If it were instead to use it to repay the PIK note, which is considerably more expensive, the forecast debt pay down and financial metrics for the operating company could weaken somewhat, though the impact would likely be fairly minimal due to the low forecast debt service coverage levels. Bicent's gas-fired units have generally demonstrated sound operating performance with high availability factors. While they have been dispatched very little, cash flows have not been affected as they are all subject to tolling agreements. However, the Hardin station suffered a major outage in the middle of December 2007 due to the failure of a generator step-up transformer. It was brought back on-line by These February with a replacement transformer, but it operated at just 87% of capacity until the original transformer was fully repaired that July. The company was able to recover all of the $4.1 million in associated expenses and as well as $3.9 million of foregone revenues (net of a 30 day deductible equal to $2.5 million) through insurance proceeds. Bicent currently owns an indirect 50% interest in the Hartwell Generating Station, a 310-MW gas-fired peaking unit located 100 miles northeast of Atlanta, Georgia. The remaining interest is held by affiliates of International Power American (IPA). Hartwell has a lucrative tolling agreement with Oglethorpe Power Corporation for its full capacity that extends through 2019 and, as of the end of 2008, had approximately $58 million in project level debt. Bicent and IPA have agreed to sell Hartwell to Oglethorpe for an amount management indicates exceeds the valuation placed on the asset at the time it acquired the portfolio. Proceeds will sufficient to fully pay down the project debt and generate a dividend to Bicent of approximately $45 million. This exceeds the $40 million floor amount in the credit agreement, permitting the sale of the asset without lender consent. Bicent will be required to apply the first $40 million of net proceeds towards debt pay down along with at least 75% of the excess. As the only asset in the portfolio east of the continental divide, as well as the only one that is not wholly-owned (or even controlled by Bicent), Hartwell does not fit into management's strategic vision for the company. In addition, Hartwell is the only asset in the portfolio with project level debt. As a result, the cash flows it generated for Bicent were structurally subordinated and arguably of lower quality than those generated by Bicent's other assets. However, the impact of the sale and subsequent debt pay down on the company's projected financial metrics is mixed. (All current forecast figures cited in this report reflect the impact of the sale.) While consolidated debt service coverages improve in some years and deteriorate in others, on average the impact is positive. There is a slight improvement in Bicent's unconsolidated average and maximum leverage ratio, but the consolidated leverage ratio is expected to be higher beginning in 2010. In addition, first lien debt/kw increases slightly and on a consolidated basis, it increases considerably, while FFO/Debt is weaker throughout the forecast period. However, the mix of generation changes as well, with the portfolio becoming more weighted towards baseload, which should allow it to support higher debt/kw. That said, the sale will also result in reduced geographic and fuel diversity and increased asset concentration, with Hardin now projected to contribute up to 64% of consolidated EBITDA, up from 50% if Hartwell were not sold and just 40% prior to Bicent's sale of the Mountainview wind farm last year. This increases the portfolio's exposure to various risks associated specifically with Hardin, including increases in coal costs and potential carbon regulation. In addition, the notional amount of Bicent's interest rate hedges is expected to exceed its outstanding debt following the sale. Because of currently low swap rates and resultant high breakage costs, however, the company intends to keep these hedges in place. From the company's perspective, they will help mitigate interest rate exposure on its $59 million in holdco PIK debt. The stable outlook reflects the project's highly contracted cash flows, which should help stabilize its financial performance. However, the rating could face further downward pressure if the company faces further cost increases or serious operating problems such that debt service coverages remain below 1.2x. The rating is unlikely to be upgraded unless the company is able to delever considerably in excess of current expectations and it extends the hedge for its Harding Generating Station beyond the maturity of the debt, thereby reducing refinancing risk. The last rating action on the company's debt occurred on July 13, 2009, when the ratings were placed under review for possible downgrade. Bicent Power LLC is an independent power generation company headquartered in Easton, MD. It is owned by Beowulf Energy LLC and Natural Gas Partners. Bicent owns a portfolio of five electric power generating facilities with an aggregate capacity of 536 MW consisting of a 120 MW coal unit located in Montana (Hardin), three gas-fired combustion turbines in Colorado and one in California, and a 50% interest in a CT in Georgia. Bicent also owns Colorado Energy Management, a provider of power plant EPC, refurbishment, and O&M services. BIOMET INC: Bank Debt Trades at 4% Off in Secondary Market ---------------------------------------------------------- Participations in a syndicated loan under which Biomet, Inc., is a borrower traded in the secondary market at 96.25 cents-on-the- dollar during the week ended Oct. 9, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 0.49 percentage points from the previous week, The Journal relates. The loan matures on March 25, 2015. The Company pays 300 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's B1 rating and Standard & Poor's BB- rating. The debt is one of the biggest gainers and losers among widely quoted syndicated loans in secondary trading in the week ended Oct. 9, among the 155 loans with five or more bids. Biomet, Inc. -- http://www.biomet.com/-- based in Warsaw, Indiana, is one of the leading manufacturers of orthopedic implants, specializing in reconstructive devices. Through its EBI subsidiary, the firm also sells electrical bone-growth stimulators and external devices, which are attached to bone and protrude from the skin. Subsidiary Biomet Microfixation markets implants and bone substitute material for craniomaxillofacial surgery. In 2007 Biomet was acquired by a group of private equity firms for more than $11 billion. Biomet Inc. continues to carry a 'B2' long term corporate family rating from Moody's and a 'B+' long term foreign issuer credit rating from Standard & Poor's. BOWL & BOARD: Bankruptcy Case Converted to Ch 7 Liquidation ----------------------------------------------------------- Tovia Smith at NPR reports that Mark Giarrusso has signed papers converting Bowl & Board's Chapter 11 reorganization case to Chapter 7 liquidation, as he wasn't confident enough that his business was going to rebound and couldn't risk going forward. Mr. Giarrusso fell behind on rent in his Brookline, Massachusetts store in 2008, and his landlord sued him, forcing him into bankruptcy protection. NPR relates that Mr. Giarrusso had been fighting the landlord's lawyer who was trying to force him to liquidate. Bowl & Board is a family-owned chain of housewares stores in New England. BT BUSINESS: Voluntary Chapter 11 Case Summary ---------------------------------------------- Debtor: BT Business Holdings, LLC 2104 Shadowbrook Drive Wall, NJ 07719 Bankruptcy Case No.: 09-36940 Chapter 11 Petition Date: October 8, 2009 Court: United States Bankruptcy Court District of New Jersey (Trenton) Debtor's Counsel: Eugene D. Roth, Esq. Law Office of Eugene D. Roth Valley Pk. East 2520 Hwy 35, Suite 307 Manasquan, NJ 08736 Tel: (732) 292-9288 Fax: (732) 292-9303 Email: erothesq@verizon.net Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of its 20 largest unsecured creditors when it filed its petition. The petition was signed by Stephen M. Vita, managing member of the Company. BRUCE R SMITH: Files for Creditor Protection in Canada ------------------------------------------------------- Bruce R. Smith Limited has received protection from its creditors under the Companies' Creditors Arrangement Act pursuant to an Order of the Ontario Superior Court of Justice (Commercial List) issued October 8, 2009, which allows it time to restructure its business and affairs. KPMG Inc. is the Court appointed Monitor. Hamilton law firm, Scarfone Hawkins LLP, is representing Bruce R. Smith in its restructuring efforts. Bruce R. Smith began its trucking operations in 1947 with one truck hauling from the farming communities of Norfolk County to destinations in southwestern Ontario. At present, Bruce R. Smith has a fleet of approximately two hundred and fifty tractors and one thousand, one hundred trailers, and operates from six locations throughout southern Ontario and one in Montreal, Quebec, with customers throughout the provinces of Ontario and Quebec, and the United States. Bruce R. Smith currently employs approximately 325 employees. Bruce R. Smith is well known in the trucking industry and has specialized equipment, including trailers for refrigerated and heated product transportation, multi-axel vans for heavy commodities, multi-axel flat decks for the steel industry, and fifty-three foot quad vans and tandem trailers for the beverage industry. Because of Bruce R. Smith's expertise and reputation in many specialized sectors, its customers include businesses in the steel, packaging, manufactured goods, beverage, food stuffs and refrigerated products industries. However, as a result of the severe North American economic recession, and particularly its impact on the North American automotive/manufacturing sectors, Bruce R. Smith's revenues have declined significantly, and the corporation now has more equipment and equipment carrying costs than can be supported by its decreased revenue base. While its revenue base is showing early signs of recovery and Bruce R. Smith has taken every possible step to address the necessary restructuring issues outside of formal legal proceedings, it has determined that it is in the best interests of its shareholders, employees and creditors to seek protection pursuant to the CCAA in order to restructure to bring its short to mid term cost structure in line with a lower revenue model. Bruce R Smith has had preliminary discussions with its major secured creditors and is pleased to advise that they are supportive of the application, and have expressed a willingness to support a restructuring. Accordingly, it will be business as usual during the restructuring process as far as Bruce R. Smith's customers are concerned, and the corporation intends to try and preserve as much of its employment base as possible. It is Bruce R. Smith's intent to emerge from CCAA protection with stronger, more efficient trucking operations. Further information and a copy of the Order can be accessed on the Monitor's Web site at http://www.kpmg.ca/BruceRSmithand further inquiries may be directed to the Monitor, Attention: Brad Newton at bradnewton@kpmg.ca, or to Bruce R. Smith's solicitors. CANWEST GLOBAL: Chapter 15 TRO Hearing on October 15 ---------------------------------------------------- Canwest Global Communications Corp. said hearings before the U.S. Bankruptcy Court for the Southern District of New York to: -- continue the temporary restraining order is scheduled for October 15, 2009; and -- recognize its Chapter 15 application is scheduled for November 3, 2009. FTI Consulting Canada Inc., the Court-appointed Monitor in the proceedings commenced by the Company and certain of its subsidiaries under Canada's Companies' Creditors Arrangement Act, sought protection on October 6, 2009, in the United States Bankruptcy Court under Chapter 15 of the United States Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No. 09-15994) for certain of the entities involved in Canwest's television business that filed for protection under the CCAA, including Canwest, Canwest Media Inc. and Canwest Global Broadcasting Inc./Radiodiffusion Canwest Global Inc. The Monitor obtained an immediate temporary restraining order from the United States Bankruptcy Court to protect Canwest and Canwest Television Limited Partnership, one of Canwest's principal broadcasting subsidiaries. Canwest's day-to-day operations and television programming are expected to continue without interruption during its restructuring. On Tuesday, Canwest, along with certain of its subsidiaries, filed for creditor protection under the CCAA with the intention of reorganizing. At the initial hearing before the Ontario Superior Court of Justice (Commercial List) at Toronto, which is overseeing Canwest's CCAA proceedings, FTI was appointed as Monitor and foreign representative for Canwest. FTI was also authorized by the Canadian Court to file the Chapter 15 cases to protect Canwest's interests and assets in the United States. Through the Chapter 15 cases, the Monitor is requesting that the United States Bankruptcy Court recognize the Canadian CCAA cases in the United States with respect to certain of the Canwest entities and provide limited aid to the CCAA proceedings, including a stay of proceedings and actions in the United States against the entities included in the Chapter 15 proceedings. The Monitor is also asking for a preliminary injunction to prevent television studios and other television content providers from interfering with Canwest's broadcasting rights to its many popular American hit shows. "We've taken action now to ensure the long-term viability of Canwest's operations," said Leonard Asper, President and CEO of Canwest. "Our goal is to complete the restructuring process in Canada as quickly as possible." He added, "The commencement of the Chapter 15 cases will protect Canwest's CCAA proceedings so that Canwest can emerge from CCAA a financially stable company that is ready to take advantage of the Canadian economy as it begins to improve." Judge Stuart M. Bernstein presides over the Chapter 15 cases. Evan D. Flaschen, Esq., at Bracewell & Giuliani LLP, in Hartford, Connecticut, serves as Chapter 15 Petitioner's counsel. The Chapter 15 Debtors disclosed estimated assets of $500 million to $1 billion and estimated debts of $50 million to $100 million. In a regulatory filing with the U.S. Securities and Exchange Commission, Canwest Media disclosed C$4,847,020,000 in total assets and C$5,826,522,000 in total liabilities at May 31, 2009. About Canwest Global Canwest Global Communications Corp. (TSX: CGS and CGS.A) -- http://www.canwest.com/-- an international media company, is Canada's largest media company. In addition to owning the Global Television Network, Canwest is Canada's largest publisher of English language daily newspapers and owns, operates and holds substantial interests in conventional television, out-of-home advertising, specialty cable channels, web sites and radio stations and networks in Canada, New Zealand, Australia, Turkey, Indonesia, Singapore, the United Kingdom and the United States. CANWEST GLOBAL: Discloses Cash Flows Projection During CCAA Case ---------------------------------------------------------------- Canwest Global Communications Corp. disclosed a projection of the cash flows, cash and secured obligations of CMI and the subsidiary credit parties under Canwest Media Inc.'s secured credit facility for the expected duration of the Canwest entities' filings under the Companies' Creditors Arrangement Act (Canada): Projected For the 3 months ending 11/30/09 02/28/10 -------- -------- Canadian Television Receipts C$124,691,000 C$127,127,000 Operating disbursements (150,387,000) (123,979,000) Capital expenditures (4,173,000) (4,587,000) Corporate and Other Net operating cash flows (4,643,000) (2,901,000) Restructuring disbursements (7,649,000) (7,156,000) Advance from proceeds from sale of Ten Network Holdings Limited 190,000,000 - Financing disbursements (3,195,000) (384,000) ----------- ---------- Total Net Cash Flow C$144,644,000 (C$11,880,000) Canwest expects to emergence from the CCAA filing on February 28, 2010. Upon emergence, Canwest projected these cash transactions: Unrestricted cash as at February 28, 2010 C$11,397,000 Equity proceeds 65,000,000) Repayment of secured intercompany note (85,000,000) Claims (8,000,000) Retention and restructuring (8,000,000) Transaction costs (10,000,000) -------------- Emergence financing requirement (cash) (34,603,000) Emergence financing requirement letters of credit (2,000,000) -------------- Total emergence financing requirement (C$36,603,000) Canwest also developed financial projections for Canwest Television Limited Partnership and CMI. In June 2009, Canwest and CMI entered into confidentiality, non- disclosure and non-use agreements with certain members of an ad hoc committee of holders of 8% senior subordinated notes of CMI to facilitate the discussion of a possible recapitalization transaction. Pursuant to the Confidentiality Agreements, Canwest disclosed information, including certain non-public information to certain members of the Ad Hoc Committee through the Ad Hoc Committee's financial and legal advisors. The Confidentiality Agreements require Canwest to now disclose publicly certain of the Non-Public Information. A full-text copy of Canwest's release is available at no charge at: http://ResearchArchives.com/t/s?46b4 About Canwest Global Canwest Global Communications Corp. (TSX: CGS and CGS.A) -- http://www.canwest.com/-- an international media company, is Canada's largest media company. In addition to owning the Global Television Network, Canwest is Canada's largest publisher of English language daily newspapers and owns, operates and holds substantial interests in conventional television, out-of-home advertising, specialty cable channels, web sites and radio stations and networks in Canada, New Zealand, Australia, Turkey, Indonesia, Singapore, the United Kingdom and the United States. On October 6, 2009, Canwest Global, Canwest Media Inc., Canwest Television Limited Partnership (including Global Television, MovieTime, DejaView and Fox Sports World), The National Post Company and certain subsidiaries voluntarily entered into, and successfully obtained an Order from the Ontario Superior Court of Justice (Commercial Division) commencing proceedings under the Companies' Creditors Arrangement Act. The CMI Entities' commencement of these proceedings was undertaken in furtherance of a proposed recapitalization transaction that is supported by over 70% of holders of the 8% senior subordinated notes issued by CMI. On the same day, FTI Consulting Canada Inc., the Court-appointed Monitor in the CCAA proceedings, sought protection in the United States Bankruptcy Court under Chapter 15 of the United States Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No. 09-15994) for certain of the entities involved in Canwest's television business that filed for protection under the CCAA, including Canwest, Canwest Media Inc. and Canwest Global Broadcasting Inc./Radiodiffusion Canwest Global Inc. Judge Stuart M. Bernstein presides over the Chapter 15 cases. Evan D. Flaschen, Esq., at Bracewell & Giuliani LLP, in Hartford, Connecticut, serves as Chapter 15 Petitioner's counsel. The Chapter 15 Debtors disclosed estimated assets of $500 million to $1 billion and estimated debts of $50 million to $100 million. In a regulatory filing with the U.S. Securities and Exchange Commission, Canwest Media disclosed C$4,847,020,000 in total assets and C$5,826,522,000 in total liabilities at May 31, 2009. CANWEST MEDIA: Moody's Cuts Probability of Default Rating to 'D' ---------------------------------------------------------------- Moody's Investors Service downgraded the probability of default rating for Canwest Media Inc. to D in response to the company's announcement that it, along with key wholly-owned television affiliate companies and The National Post Company, had filed voluntary petitions for reorganization under the Companies' Creditors Arrangements Act. The company's corporate family rating is revised to Caa3 while its speculative grade liquidity rating remains unchanged at SGL-4 (weak). Despite the CFR upgrade and prospects of an above-average corporate-level recovery, there are sufficient non-debt claims in the form of payables, under-funded pension, and the like, that ratings for the company's US$761 million 8% senior subordinated notes due 15 September, 2012 were unchanged at Ca (LGD4, 62%). Shortly following these rating actions, Moody's will withdraw all of the relevant ratings (refer to Moody's ratings withdrawal policy on moodys.com). Rating actions: Issuer: Canwest Media Inc. -- Probability of Default Rating, Downgraded to D -- Corporate Family Rating, Revised to Caa3 from Ca -- Speculative Grade Liquidity Rating, Unchanged at SGL-4 -- US$761 million 8% senior subordinated notes due 15 September, 2012, Unchanged at Ca (LGD4, 62%) -- Outlook, Unchanged - Negative Moody's most recent rating action concerning Canwest was taken on April 20, 2009, at which time the company's probability of default rating was downgraded to Ca/LD as a consequence an interest payment on its US$761 million 8% senior subordinated notes due 15 September, 2012, not having been paid prior to the expiration of the applicable cure period. Canwest's ratings were assigned by evaluating factors Moody's believes are relevant to the credit profile of the issuer, such as i) the business risk and competitive position of the company versus others within its industry, ii) the capital structure and financial risk of the company, iii) the projected performance of the company over the near to intermediate term, and iv) management's track record and tolerance for risk. These attributes were compared against other issuers both within and outside of Canwest's core industries and Canwest's ratings are believed to be comparable to those of other issuers of similar credit risk. Canwest Media Inc. is wholly-owned by Winnipeg, Manitoba, Canada- based Canwest Global Communications Corp., a publicly traded international media company with interests in broadcast television, publications, radio, specialty television channels, out-of-home advertising and interactive operations. Substantially all of the publicly traded parent company's operations are held though Canwest. CAPITAL GROWTH: July Debentures Convertible at $0.15 Per Share -------------------------------------------------------------- Capital Growth Systems, Inc., entered into a series of transactions as of July 31, 2009, related to amendment of its existing financing and the funding of additional financing. The transactions are comprised of: (i) entry into a Second Amendment and Waiver Agreement with its senior secured lender, ACF CGS, LLC as Agent for itself and other lenders with respect to $8.5 million of senior secured financing, restoring the loan to good standing, and setting adjusted covenants and other terms and conditions; (ii) issuance of $7.0 million of principal amount of original issue discount convertible senior secured debentures -- July Debentures -- representing the funding of $4.0 million of subscription amount (inclusive of $500,000 of subscriptions credited against liabilities of the Company to the respective holders) and $3.0 million of original issue discount added to principal, coupled with warrants to purchase up to 12.5 million shares of Common Stock, all exercisable or convertible at $0.24 per share -- July Warrants -- subject to adjustment (and with an adjustment to the exercise price on up to $15.0 million of existing debentures; the purchase agreement for the July Units provides for the issuance of up to an additional $2.0 million of cash subscription amount of July Units (representing up to an additional $3.5 million of principal amount of July Debentures inclusive of the OID factor and July Warrants to purchase up to an additional 6,250,000 shares of Common Stock), to be funded to the extent of the shortfall of collection by the Company of at least $2.0 million by August 31, 2009 of certain designated receivables or contract amounts; and (iii) authorization for the issuance of up to $4,125,000 of secured convertible original issue discount debentures -- VPP Debentures -- to certain creditors of the Company in exchange for release of up to $2.5 million of obligations to the creditors (with the debentures to contain an OID factor of up to $1,625,000), and coupled with warrants to purchase up to 12,890,625 shares of Common Stock -- VPP Warrants -- all exercisable or convertible at $0.24 per share, subject to adjustment. On August 27, 2009, the Company received aggregate subscription proceeds, inclusive of the pre-funded amount of $200,497, totaling the required $2,000,000 Cash Subscription Amount and had issued the corresponding Second Tranche Debentures and warrants. Pursuant to the July Securities Purchase Agreement, in the event that the Company had not repaid the Cash Subscription Amount paid in by the Holders by September 30, 2009, the conversion price of the July and Second Tranche Debentures held by the Holder and the exercise price of the corresponding July and Second Tranche Warrants, would be reduced from $0.24 per share to $0.15 per share (subject to adjustments for forward and reverse splits and other adjustments called for in the July and Second Tranche Debentures and the corresponding Warrants). The Company did not repay Cash Subscription Amount paid in by the Holders by September 30, 2009. Therefore, as of October 1, 2009, the conversion price of the Holders' July and Second Tranche Debentures and the exercise price for the corresponding July and Second Tranche Warrants was automatically reduced to $0.15 per share. Additionally, the Company had previously issued debentures and warrants in March 2008 and November 2008. Nine Holders also hold debentures and warrants issued in March 2008 or November 2008. As such, the March and November Holders received July Debentures and Warrants as consideration for their execution of the 2009 Sub Debt Consent, Waiver and Amendment Agreement. Additionally, Aequitas Capital Management, Inc., a Holder, received a July Debenture and Warrant from the Company in lieu of a portion of the fees owed to Aequitas by the Company. The March and November Holders and Aequitas received July Debentures that are now convertible at $0.15 per share. As of June 30, 2009, the Company had $52.1 million in total assets and $86.7 million in total liabilities, resulting in $34.5 million in shareholders' deficit. As of June 30, 2009, the Company's current liabilities exceeded its current assets by $29.9 million. Cash on hand at June 30, 2009, was $1.3 million -- not including $500,000 restricted for outstanding letters of credit. As reported by the Troubled Company Reporter on August 24, 2009, the Company's net working capital deficiency, recurring operating losses, and negative cash flows from operations raise substantial doubt about its ability to continue as a going concern. However, the Company said the successful delivery on major customer contracts entered into since mid-2008 and continued success in closing these types of contracts will move it into profitability. In addition to those new contracts, management believes that the inclusion of VDUL's business and cash flows will have a positive impact on future results. At the same time, expenses are managed closely and lower-cost outsource opportunities are given case-by- case consideration. On May 22, 2009, the Company received from ACF CGS, LLC, a formal notification of certain covenant violations that occurred and continue to exist under the Loan Agreement dated November 19, 2008, by and among the Company and its subsidiaries. The Borrowers have timely paid all debt service obligations under the Loan Agreement. The Borrowers have agreed that the Forbearance Agreement constitutes an additional "Loan Document" under the Loan Agreement. Among other things, the Forbearance Agreement contemplates that from May 1, 2009, until the date that the Agent either waives all of the specified defaults or the parties otherwise agree, the Loan will continue to bear interest at the default rate of interest as specified in the Loan Agreement. About Capital Growth Systems Based in Chicago, Illinois, Capital Growth Systems Inc. (OTC BB: CGSY) doing business as Global Capacity Group Inc., delivers telecom integration services to systems integrators, telecommunications companies, and enterprise customers worldwide. It provides an integrated supply chain management system that streamlines and accelerates the process of designing, building, and managing customized communications networks. The Company also provides connectivity services for network integrators who bundle telecommunication solutions to enterprise customers; offers global pricing and quotation software and management services for data communications; and assists customers to reduce connectivity costs and attain understanding and control of their deployed communications network. CELANESE US: Bank Debt Trades at 6.41% Off in Secondary Market -------------------------------------------------------------- Participations in a syndicated loan under which Celanese US Holdings LLC is a borrower traded in the secondary market at 93.59 cents-on-the-dollar during the week ended Oct. 9, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents a drop of 0.61 percentage points from the previous week, The Journal relates. The loan matures on April 2, 2014. The Company pays 175 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's Ba2 rating and Standard & Poor's BB+ rating. The debt is one of the biggest gainers and losers among widely quoted syndicated loans in secondary trading in the week ended Oct. 9, among the 155 loans with five or more bids. Celanese Corporation -- http://www.celanese.com/-- is an integrated producer of chemicals and advanced materials. It is a producer of acetyl products, which are intermediate chemicals for many industries, as well as a global producer of high performance engineered polymers that are used in a variety of end-use applications. Celanese operates principally through four business segments: Advanced Engineered Materials, Consumer Specialties, Industrial Specialties and Acetyl Intermediates. Advanced Engineered Materials segment develops, produces and supplies a portfolio of high performance technical polymers. Consumer Specialties segment consists of its Acetate Products and Nutrinova businesses. Its Industrial Specialties segment includes its emulsions and AT Plastics businesses. Acetyl Intermediates segment produces and supplies acetyl products. Celanese US Holdings LLC, formerly BCP Crystal US Holdings Corp., is a subsidiary of Celanese Corp. CENTAUR LLC: Hoosier Park in No Imminent Danger of Bankruptcy ------------------------------------------------------------- Justin Schneider at Herald Bulletin reports that Centaur, LLC, officials said that Hoosier Park Racing & Casino is in no imminent danger of bankruptcy. According to Herald Bulletin, State Sen. Luke Kenley had said predicted in a televised report Hoosier Park's bankruptcy due to trouble repaying two large bonds. Herald Bulletin states that Hoosier Park has two large bonds due within 90 days. Herald Bulletin says that Centaur borrowed heavily to pay a $250 million licensing fee to Indiana and to fund the construction of its 92,000-square-foot casino. Citing Centaur Chairperson Roderick Ratcliff, Herald Bulletin states that under no circumstances would Hoosier Park close its doors. Mr. Ratcliff said that the park's first loans are due in 2012, the report says. Herald Bulletin relates that without parity in Indiana gaming, the park's financial future is uncertain. Mr. Ratcliff, according to Herald Bulletin, framed Hoosier Park's financial troubles in the larger context of excessive taxation. Herald Bulletin quoted Mr. Ratcliff as saying, "The model set up for the racinos today does not work. Even without the $250 million license, we would be unable to compete." Centaur, LLC, is a subsidiary of Centaur Inc., which owns and operates Hoosier Park, a "racino", which opened in June 2008, in Anderson, Indiana, near Indianapolis, and Fortune Valley Hotel and Casino, located approximately 35 miles from Denver, Colorado. The company also owns Valley View Downs, a development project in Pennsylvania. CENTRO NP: Extends Consent Solicitation to October 15 ----------------------------------------------------- Centro NP LLC has extended the deadline for its previously announced consent solicitation with respect to amendments to the 1995 indenture governing its outstanding 7.65%, 7.68% and 7.97% senior notes due 2026 and its outstanding 6.90% senior notes due 2028. The Consent Solicitation, previously scheduled to expire at 5:00 P.M. New York City Time on October 6, 2009, will now expire at the earlier of (i) 5:00 P.M. New York City Time on October 15, 2009, and (ii) 5:00 P.M. New York City Time on the date that the Company has received valid consents sufficient to execute the Supplemental Indenture. The Company will make a public announcement of the Effective Time at or prior to 9:00 A.M. New York City Time on the next business day after the Effective Time. The Company believes that the consent payment of $35 per $1,000 principal amount of Securities to consenting noteholders and the ability to shorten the maturity by 12 to 14 years, combined, offers tremendous value to those noteholders holding the Securities. Additionally, if the proposed amendments with respect to the debt incurrence covenant are not adopted, once the Company has ceased to experience the unusually large non-cash charges that it has recently experienced, the Company would once again be able to incur debt under the indenture without any amendment being required. As reported by the Troubled Company Reporter on September 23, Centro NP commenced a consent solicitation with respect to amendments to the 1995 indenture governing various senior notes issued by the Company: Consent Fee Outstanding Per $1,000 Put Right Principal Security Principal Repurchase CUSIP No. Amount Description Amount Date --------- ----------- ----------- ----------- ---------- 64806Q AA2 US$10,000,000 7.97% Senior US$35.00 01/15/2014 Notes Due 2026 64806Q AD6 US$25,000,000 7.65% Senior US$35.00 01/15/2014 Notes Due 2026 64806Q AF1 US$10,000,000 7.68% Senior US$35.00 01/15/2014 Notes Due 2026 64806Q AG9 US$10,000,000 7.68% Senior US$35.00 01/15/2014 Notes Due 2026 64806Q AK0 US$25,000,000 6.90% Senior US$35.00 01/15/2014 Notes Due 2028 64806Q AL8 US$25,000,000 6.90% Senior US$35.00 01/15/2014 Notes Due 2028 BofA Merrill Lynch is the Solicitation Agent for the Consent Solicitation. Questions regarding the Consent Solicitation may be directed to BofA Merrill Lynch at (980) 388-4603 (collect) and (888) 292-0070 (toll free). As reported by the Troubled Company Reporter on September 10, 2009, Centro NP warned in an August 2009 regulatory filing it has substantial short-term liquidity obligations consisting primarily of short-term indebtedness, which it may be unable to refinance on favorable terms or at all. During the remaining six months of 2009, the Company has an aggregate of US$47.5 million of mortgage debt, notes payable and credit facilities scheduled to mature and US$13.9 million of scheduled mortgage amortization payments. If principal payments on debt due at maturity cannot be refinanced, extended or paid, the Company will be in default under its debt obligations, and it may be forced to dispose of properties on disadvantageous terms. The defaults may in turn cause cross defaults in certain of the Company's or its affiliates' other debt obligations. Centro NP also noted it is no longer permitted to make draws under an Amended July 2007 Facility. As a result, and because of the restrictions imposed on the Company by the Amended July 2007 Facility, as well as its Super Bridge Loan, its Residual Credit Facility and the Indentures, it may not be able to repay or refinance short-term debt obligations that comes due. The Company said there is substantial doubt about its ability to continue as a going concern. In addition, uncertainty also exists due to the liquidity issues currently experienced by the Company's parent and the ultimate parent investors, Centro Properties Limited and Centro Property Trust. According to the Company, the half yearly financial statements of the Company's ultimate parents, Centro Properties Limited and Centro Property Trust, which were filed with Australian regulatory bodies on February 26, 2009, identified material uncertainty (equivalent to substantial doubt) about those entities' ability to continue as a going concern. The Amended July 2007 Facility is a US$350.0 million revolving credit facility with Bank of America N.A. The Super Bridge Loan is a US$1.9 billion second amended and restated loan agreement entered into by Super LLC with JPMorgan Chase Bank, N.A., as administrative agent. The Residual Credit Facility is a US$370.0 million credit facility entered into by certain subsidiaries of Centro NP Residual Holding LLC -- Residual Joint Venture -- with JPMorgan Chase Bank, N.A., as agent and lender. The Indentures govern the unsecured senior notes issued by Centro NP's predecessor, New Plan Excel Realty Trust, Inc. U.S. Bank Trust National Association is the trustee under the Indentures. Centro NP said management is working with both its lenders and the lenders of its affiliated entities, and also with management of the ultimate parent investors of the Company, to access a number of options that address the Company's ongoing liquidity issues. Factors that may impact this include the current and future condition of the credit market and the U.S. retail real estate market. The Company said the extension of certain debt facilities to December 31, 2010, gives it more time to consider a range of different plans to address its longer term liquidity issues and potential funding from distributions from the Residual Joint Venture and potential asset sales, among other things, should provide the Company with the ability to pay its debts as and when they become due and payable. At June 30, 2009, the Company had US$3,434,106,000 in total assets, including US$28,514,000 in cash and cash equivalents and US$9,678,000 in marketable securities; against US$1,896,991,000 in total liabilities and US$24,542,000 in redeemable non-controlling interests in partnerships. Centro NP's credit ratings are all below investment grade. Standard & Poor's current rating is CCC+; outlook negative. Fitch's current rating is CCC/RR4; rating watch negative. Moody's current rating is Caa2; negative outlook. Centro NP LLC owns and develops community and neighborhood shopping centers throughout the United States. The Company was formed in February 2007 to succeed the operations of New Plan Excel Realty Trust, Inc. CHAMPION FORD: Bank of Choice Is Highest Bidder for Boulder Asset ----------------------------------------------------------------- Boulder County Business Report that Champion Ford LLC defaulted on a loan and now the 3200 28th St. in Boulder -- former Ford and later Kia car dealership location -- is being auctioned, with Bank of Choice as the highest bidder. Citing Bank of Choice Special Assets Vice President Bill Beamer, BCBR states that if the bank gets the certificate of ownership, it would seek to sell the property. According to BCBR, Bank of Choice had filed for foreclosure on the property, saying that $4.2 million remained on the original $4.6 million adjustable-rate loan for the property issued in March 2005 when Champion Ford LLC bought it for $6.2 million. Champion Ford LLC is a dealer of new or used Ford car. CHRYSLER LLC: New Chrysler to Stick to Plan to Shut 8 Plants ------------------------------------------------------------ Chrysler Group LLC Chief Executive Sergio Marchionne said the automaker will stick to its plan to shut down eight plants in North America according to its initial schedule, Reuters reported. Mr. Marchionne's statement came after media reports said that Chrysler Group's plant in Sterling Heights, Michigan, would remain open until at least 2012. The plant, which makes the Chrysler Sebring and the Dodge Avenger, is slated for closure at the end of 2010. "There are no plans on my desk that the decision is going to be reversed," Reuters quoted Mr. Marchionne as saying. He said the automaker would advise the White House's auto task force of its updated turnaround plan this week. "I think we are going to advise them of the fact, that, based on the current assessment of conditions, there is absolutely no need today to go up there and revisit that decision," Reuters quoted Mr. Marchionne as saying. "And, if and when that need were to arise, then we will look at this as part of a wider set of choices that may or may not include Sterling Heights," he said. About Chrysler LLC Chrysler Group LLC, formed in 2009 from a global strategic alliance with Fiat Group, produces Chrysler, Jeep(R), Dodge, Mopar(R) and Global Electric Motors (GEM) brand vehicles and products. With the resources, technology and worldwide distribution network required to compete on a global scale, the alliance builds on Chrysler's culture of innovation -- first established by Walter P. Chrysler in 1925 -- and Fiat's complementary technology -- from a company whose heritage dates back to 1899. Headquartered in Auburn Hills, Michigan, Chrysler Group LLC's product lineup features some of the world's most recognizable vehicles, including the Chrysler 300, Jeep Wrangler and Dodge Ram. Fiat will contribute world-class technology, platforms and powertrains for small- and medium-sized cars, allowing Chrysler Group to offer an expanded product line including environmentally friendly vehicles. Chrysler LLC and 24 affiliates on April 30 sought Chapter 11 protection from creditors (Bankr. S.D.N.Y (Mega-case), Lead Case No. 09-50002). Chrysler hired Jones Day, as lead counsel; Togut Segal & Segal LLP, as conflicts counsel; Capstone Advisory Group LLC, and Greenhill & Co. LLC, for financial advisory services; and Epiq Bankruptcy Solutions LLC, as its claims agent. Chrysler has changed its corporate name to Old CarCo following its sale to a Fiat-owned company. As of December 31, 2008, Chrysler had $39,336,000,000 in assets and $55,233,000,000 in debts. Chrysler had $1.9 billion in cash at that time. In connection with the bankruptcy filing, Chrysler reached an agreement with Fiat SpA, the U.S. and Canadian governments and other key constituents regarding a transaction under Section 363 of the Bankruptcy Code that would effect an alliance between Chrysler and Italian automobile manufacturer Fiat. Under the terms approved by the Bankruptcy Court, the company formerly known as Chrysler LLC on June 10, 2009, formally sold substantially all of its assets, without certain debts and liabilities, to a new company that will operate as Chrysler Group LLC. Fiat has a 20 percent equity interest in Chrysler Group. Bankruptcy Creditors' Service, Inc., publishes Chrysler Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Chrysler LLC and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CIRCUIT CITY: M. Mondragon Defends Adversary Proceeding ------------------------------------------------------- Circuit City Stores, Inc., and its units have asked the Court to dismiss Marlon Mondragon's purported class action complaint filed on March 17, 2009, or, in the alternate, ordering Mr. Mondragon to plead a more definitive statement. Mr. Mondragon was an employee of Circuit City at its retail store located in Palisades Mall, in West Nyack, New York. On November 2, 2008, Circuit City announced its intention to close 154 retail stores, including the Nyack Store. As a consequence, on or shortly after November 2, Mr. Mondragon was advised that his employment by Circuit City was or would be terminated. Circuit City commenced a store-closing sale at the Nyack Store, as well as store-closing sales at 153 other retail store locations on November 5, 2008, Douglas M. Foley, Esq., at McGuireWoods LLP, in Richmond, Virginia, related. After the hearing held on November 10, 2008, the Court allowed, on an interim basis, the Debtors to make payment in an estimated amount of $8,000,000 to $10,000,000 to employees that were entitled to receive advance notice of termination under the Workers Adjustment and Notification Act even though the Debtors maintained that these payments were arguably not entitled to administrative expense status. The Court approved the Debtors' request for a final order authorizing the continuation of the WARN Payments after the hearing held on December 6, 2008. The Debtors have moved to dismiss the claim of Marlon Mondragon, on behalf of himself and others similarly situated, arguing that: (a) Mr. Mondragon's WARN Act claim is a prepetition claim, which should be addressed through the claims administration process, not by way of an adversary proceeding, because it supposedly accrued prior to the bankruptcy petition; and (b) Mr. Mondragon's WARN Act claim should be adjudicated through the claims administrative process rather than the adversary proceeding. Counsel for Mr. Mondragon, Gary E. Mason, Esq., in Washington, D.C., argued that the Debtors' arguments fail because: (1) Mr. Mondragon's claim is not a prepetition claim since the claim did not vest until after the Debtors terminated Mr. Mondragon without a WARN compliant, 60-day notice, or payment after the petition was filed. (2) even if Mr. Mondragon's claim was a prepetition claim, it should nonetheless be litigated in the adversary proceeding because Mr. Mondragon and the putative class' WARN Act claims will be expedited and handled more efficiently in a class adversary proceeding where the claims can be handled collectively rather than in a piecemeal fashion. Thus, as numerous courts have recognized, an adversary proceeding provides a less protracted and more efficient litigation framework for management of WARN Act claims, regardless of when the claims vested, Mr. Mason said. Moreover, Rule 7023 and Federal Rule of Civil Procedure are "always applicable" in an adversary proceeding without any action of the court. Thus, Mr. Mondragon need not file a motion seeking application of Rule 7023 and Rule 23, nor a class proof of claim, in order to prosecute his claims and the claims of the class he seeks to represent, provided there is no prejudice, which the Debtors do not, and cannot, allege. Accordingly, dismissal of the Amended Mondragon Complaint on this basis would be unwarranted, Mr. Mason added. Debtors Reply The dispute between Mr. Mondragon and the Debtors requires the Court to resolve the bankruptcy law question of when Mr. Mondragon's purported "claim" under the WARN Act first arose. The facts alleged by Mr. Mondragon demonstrate that under controlling Fourth Circuit precedent, Mr. Mondragon held, at most, a contingent claim under the WARN Act as of the Petition Date. Consequently, Mr. Mondragon's alleged WARN Act Claim, if any, is a prepetition unsecured claim, Douglas M. Foley, Esq., at McGuireWoods LLP, in Richmond, Virginia, on behalf of the Debtors, asserted. The Fourth Circuit Court of Appeals applies the "conduct test" to determine when a claim arises. Under the conduct test, a claim arises when the event or conduct giving rise to the claim first occurs, Mr. Foley noted. Mr. Mondragon cited the bankruptcy court's decision in In re Powermate Holding Corp., 394 B.R. 765, 776 (Bankr. D. Del. 2008). Neither Powermate nor the cases on which the Delaware bankruptcy court relied support Mr. Mondragon's theory that the alleged WARN Act Claim is a postpetition administrative expense because Mr. Mondragon's actual employment loss occurred postpetition, Mr. Foley told the Court. Indeed, those cases are factually distinguishable, Mr. Foley said. They involve situations in which employment terminations occurred either without notice or with notice being given substantially contemporaneous with termination and, thus, notice and termination were both either prepetition or both post-petition, Mr. Foley noted. Thus, the critical date is not the date of the actual employment loss; rather, it is the date that Mr. Mondragon was notified of his impending termination as a result of an alleged "plant closing" or "mass layoff," which date was admittedly prepetition, Mr. Foley argued. In addition, Mr. Mondragon failed to obtain prior authority to proceed on a class claim and any class claim is now time-barred under the General Bar Date Order. Mr. Mondragon's request to proceed on the Amended Complaint should be denied and the adversary proceeding dismissed, Mr. Foley maintained. About Circuit City Headquartered in Richmond, Virginia, Circuit City Stores Inc. (NYSE: CC) -- http://www.circuitcity.com/-- was a specialty retailer of consumer electronics, home office products, entertainment software and related services in the U.S. and Canada. Circuit City Stores together with 17 affiliates filed a voluntary petition for reorganization relief under Chapter 11 of the Bankruptcy Code on November 10 (Bankr. E.D. Va. Lead Case No. 08- 35653). InterTAN Canada, Ltd., which runs Circuit City's Canadian operations, also sought protection under the Companies' Creditors Arrangement Act in Canada. Gregg M. Galardi, Esq., and Ian S. Fredericks, Esq., at Skadden, Arps, Slate, Meagher & Flom, LLP, are the Debtors' general restructuring counsel. Dion W. Hayes, Esq., and Douglas M. Foley, Esq., at McGuireWoods LLP, are the Debtors' local counsel. The Debtors also tapped Kirkland & Ellis LLP as special financing counsel; Wilmer, Cutler, Pickering, Hale and Dorr, LLP, as special securities counsel; and FTI Consulting, Inc., and Rotschild Inc. as financial advisors. The Debtors' Canadian general restructuring counsel is Osler, Hoskin & Harcourt LLP. Kurtzman Carson Consultants LLC is the Debtors' claims and voting agent. The Debtors disclosed total assets of $3,400,080,000 and debts of $2,323,328,000 as of August 31, 2008. Circuit City has opted to liquidate its 721 stores. It has obtained the Bankruptcy Court's approval to pursue going-out-of- business sales, and sell its store leases. Bankruptcy Creditors' Service, Inc., publishes Circuit City Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Circuit City Stores Inc. and its debtor-affiliates. (http://bankrupt.com/newsstand/or215/945-7000). CIRCUIT CITY: Park National Bought Claims in September ------------------------------------------------------ The Bankruptcy Clerk recorded claims against Circuit City Stores Inc. that changed hands in September 2009: Claim Amount Transferor Transferee Number Transferred ---------- ---------- ------ ----------- eReplacements Media Solutions 319 189,484 Holdings, LLC eReplacements Media Solutions 1078 127,681 Holdings, LLC Funai Service United States Debt 1028 1,036 Corporation Recovery LLC Manufacturers and Park National Bank 8079 353,043 Traders Trust Company, as Trustee Manufacturers and Park National Bank 8618 381,457 Traders Trust Company, as Trustee Manufacturers and Park National Bank 12594 688,156 Traders Trust Company, as Trustee Manufacturers and Park National Bank 12600 1,097,137 Traders Trust Company, as Trustee Manufacturers and Park National Bank 12615 688,156 Traders Trust Company, as Trustee Manufacturers and Park National Bank 12727 1,097,137 Traders Trust Company, as Trustee Signature Home United States Debt 13210 17,548 Furnishings Recovery LLC Marco Lin WEC 96D Appleton-1 Bank of America, as 7953 -- Investment Trust trustee for the 12573 -- registered holders 13751 -- of GMAC Commercial Mortgage Securities, Inc., Mortgage Pass- Through Certificates, Series 1998-C2 WEC 96D Appleton-2 Bank of America, as 7950 -- Investment Trust trustee for the 12911 -- registered holders of GMAC Commercial Mortgage Securities, Inc., Mortgage Pass- Through Certificates, Series 1998-C2 About Circuit City Headquartered in Richmond, Virginia, Circuit City Stores Inc. (NYSE: CC) -- http://www.circuitcity.com/-- was a specialty retailer of consumer electronics, home office products, entertainment software and related services in the U.S. and Canada. Circuit City Stores together with 17 affiliates filed a voluntary petition for reorganization relief under Chapter 11 of the Bankruptcy Code on November 10 (Bankr. E.D. Va. Lead Case No. 08- 35653). InterTAN Canada, Ltd., which runs Circuit City's Canadian operations, also sought protection under the Companies' Creditors Arrangement Act in Canada. Gregg M. Galardi, Esq., and Ian S. Fredericks, Esq., at Skadden, Arps, Slate, Meagher & Flom, LLP, are the Debtors' general restructuring counsel. Dion W. Hayes, Esq., and Douglas M. Foley, Esq., at McGuireWoods LLP, are the Debtors' local counsel. The Debtors also tapped Kirkland & Ellis LLP as special financing counsel; Wilmer, Cutler, Pickering, Hale and Dorr, LLP, as special securities counsel; and FTI Consulting, Inc., and Rotschild Inc. as financial advisors. The Debtors' Canadian general restructuring counsel is Osler, Hoskin & Harcourt LLP. Kurtzman Carson Consultants LLC is the Debtors' claims and voting agent. The Debtors disclosed total assets of $3,400,080,000 and debts of $2,323,328,000 as of August 31, 2008. Circuit City has opted to liquidate its 721 stores. It has obtained the Bankruptcy Court's approval to pursue going-out-of- business sales, and sell its store leases. Bankruptcy Creditors' Service, Inc., publishes Circuit City Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Circuit City Stores Inc. and its debtor-affiliates. (http://bankrupt.com/newsstand/or215/945-7000). CIRCUIT CITY: Sirius XM Says Debtor Breached Distribution Pact -------------------------------------------------------------- To recall, Circuit City Stores Inc. sued Sirius XM Radio Inc. before the Bankruptcy Court, seeking a disallowance of the Sirius' claims and turnover of property. Sirius XM did not file a proof of claim by the Jan. 30, 2009 prepetition claims bar date. However, it filed an administrative claim against the Debtors. Sirius XM is the successor by merger of XM Satellite Radio Inc., and Sirius Satellite Radio Inc. On April 1, 2007, the Debtors and XM Satellite entered into an XM Sales and Marketing Agreement. On May 29, 2008, the Debtors and Sirius Satellite entered into a Retail Distribution Agreement. They are also parties to several advertising agreements. Pursuant to the Sirius XM Contracts, Sirius XM was obligated to remit to the Debtors, and the Debtors were entitled to payment from Sirius XM, for activation commissions and receivables. According to Mr. Foley, the Debtors performed these services and demanded payment. As of August 24, 2009, Sirius XM is indebted to the Debtors for an aggregate of $7,105,868. Circuit City sued Sirius for, among other things, breach of contract on due to its failure to pay the Unpaid Obligations. Sirius XM Answers Sirius XM Radio Inc., denies the allegations in Circuit City Stores, Inc.'s Complaint. Sirius XM is not a party to the XM Contract and does not have sufficient information regarding the XM Contract, Christopher L. Perkins, Esq., at LECLAIR RYAN, A Professional Corporation, in Richmond, Virginia, told the Court. Mr. Perkins asserted that the Complaint failed to state facts sufficient to constitute a cause of action upon which relief can be granted. He added that Circuit City is precluded from recovering costs or attorneys' fees in whole or in part under applicable law because the Debtor fails to allege facts or causes of action sufficient to allow recovery of costs or attorneys' fees against Sirius XM. Sirius XM has suffered damages on account of Circuit City's breaches of the Retail Distribution Agreement and, therefore, Sirius XM has no liability to the Debtor due to the doctrines of set-off and recoupment, Mr. Perkins said. Sirius XM reserves the right to assert additional defenses that become available or apparent during discovery and to amend its Answer. Sirius XM also asserts a counterclaim for breach of contract against Circuit City. Mr. Perkins argues that Circuit City failed to provide numerous postpetition services to Sirius XM under the terms of the Retail Distribution Agreement and committed numerous breaches of the Agreement. Sirius XM is in the process of fully analyzing Circuit City's breaches of the Retail Distribution Agreement and calculating the damages and lost profits that it suffered from such breaches, he says. Sirius XM asks the Court: (a) with respect to the Complaint, that Circuit City's claims be dismissed with prejudice and that the Debtor take nothing on the Complaint; (b) with respect to the Counterclaim for Breach of Contracts, that it be entitled to damages in an amount to be determined at trial; (c) to the extent that it is determined that Sirius XM's damages do not exceed any damages or claims of Circuit City, that Sirius XM be permitted to exercise its rights of recoupment with respect to the damages; and (d) for an award of costs and attorneys' fees in its favor. About Circuit City Headquartered in Richmond, Virginia, Circuit City Stores Inc. (NYSE: CC) -- http://www.circuitcity.com/-- was a specialty retailer of consumer electronics, home office products, entertainment software and related services in the U.S. and Canada. Circuit City Stores together with 17 affiliates filed a voluntary petition for reorganization relief under Chapter 11 of the Bankruptcy Code on November 10 (Bankr. E.D. Va. Lead Case No. 08- 35653). InterTAN Canada, Ltd., which runs Circuit City's Canadian operations, also sought protection under the Companies' Creditors Arrangement Act in Canada. Gregg M. Galardi, Esq., and Ian S. Fredericks, Esq., at Skadden, Arps, Slate, Meagher & Flom, LLP, are the Debtors' general restructuring counsel. Dion W. Hayes, Esq., and Douglas M. Foley, Esq., at McGuireWoods LLP, are the Debtors' local counsel. The Debtors also tapped Kirkland & Ellis LLP as special financing counsel; Wilmer, Cutler, Pickering, Hale and Dorr, LLP, as special securities counsel; and FTI Consulting, Inc., and Rotschild Inc. as financial advisors. The Debtors' Canadian general restructuring counsel is Osler, Hoskin & Harcourt LLP. Kurtzman Carson Consultants LLC is the Debtors' claims and voting agent. The Debtors disclosed total assets of $3,400,080,000 and debts of $2,323,328,000 as of August 31, 2008. Circuit City has opted to liquidate its 721 stores. It has obtained the Bankruptcy Court's approval to pursue going-out-of- business sales, and sell its store leases. Bankruptcy Creditors' Service, Inc., publishes Circuit City Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Circuit City Stores Inc. and its debtor-affiliates. (http://bankrupt.com/newsstand/or215/945-7000). CIT GROUP: Inks Supplemental Indentures with BoNY Mellon -------------------------------------------------------- CIT Group Inc., its guarantor affiliates, and The Bank of New York Mellon, as trustee, on October 1, 2009, entered into these supplemental indentures: -- First Supplemental Indenture, dated as of October 1, 2009, to the indenture, dated as of August 26, 2002, between the Company, The Bank of New York Mellon (as successor to J.P. Morgan Trust Company, National Association, as successor to Bank One Trust Company, N.A.), as trustee, and The Bank of New York Mellon (as successor to Bank One, N.A., London Branch), as London paying agent and London calculation agent See http://ResearchArchives.com/t/s?46ab -- First Supplemental Indenture, dated as of October 1, 2009, to the indenture, dated as of October 29, 2004, between the Company and The Bank of New York Mellon (as successor to J.P. Morgan Trust Company, National Association), as trustee See http://ResearchArchives.com/t/s?46ac -- Third Supplemental Indenture, dated as of October 1, 2009, to the indenture, dated as of January 20, 2006, between the Company and The Bank of New York Mellon (as successor to JPMorgan Chase Bank, N.A), as trustee (as supplemented by the first supplemental indenture, dated as of February 13, 2007 and second supplemental indenture, dated as of October 23, 2007) See http://ResearchArchives.com/t/s?46ad -- Third Supplemental Indenture, dated as of October 1, 2009, to the indenture, dated as of January 20, 2006, between the Company and The Bank of New York Mellon (as successor to JPMorgan Chase Bank, N.A.), as trustee (as supplemented by the first supplemental indenture, dated January 31, 2007 and the second supplemental indenture, dated as of December 24, 2008) See http://ResearchArchives.com/t/s?46ae -- Fourth Supplemental Indenture, dated as of October 1, 2009, to the indenture, dated as of June 2, 2006, between the Company, The Bank of New York Mellon (as successor to JPMorgan Chase Bank, N.A.), as trustee, and The Bank of New York Mellon (as successor to JPMorgan Chase Bank, N.A., London branch), as issuing and paying agent, calculation agent and authenticating agent (as supplemented by the first supplemental indenture, dated as of February 27, 2007, the second supplemental indenture, dated as of March 1, 2007 and the third supplemental indenture, dated as of March 1, 2007) See http://ResearchArchives.com/t/s?46af -- Fourth Supplemental Indenture, dated as of October 1, 2009, to the indenture, dated as of September 24, 1998, between the Company and The Bank of New York (as successor to JPMorgan Chase Bank, N.A.) as trustee (as supplemented by the first supplemental indenture, dated as of June 1, 2001, the second supplemental indenture dated as of February 14, 2002 and third supplemental indenture dated as of July 2, 2002) See http://ResearchArchives.com/t/s?46b0 On October 1, 2009, CIT Group Funding Company of Delaware LLC, the Company, as a guarantor, the Guarantors and The Bank of New York Mellon, as trustee, entered into these supplemental indentures: -- First Supplemental Indenture, dated as of October 1, 2009, to the indenture, dated as of November 1, 2006, among the Company, as issuer, CIT Group Inc., as guarantor, and The Bank of New York, as trustee See http://ResearchArchives.com/t/s?46b1 -- First Supplemental Indenture, dated as of October 1, 2009, to the indenture, dated as of May 31, 2005, among the Company, as issuer, CIT Group Inc. as a guarantor, and The Bank of New York Mellon (as successor to JPMorgan Chase Bank), as trustee See http://ResearchArchives.com/t/s?46b2 Under each of the supplemental indentures, the notes that became subject to the Company's and Delaware Funding's current exchange offers, and that were issued under the indentures being supplemented, were provided guarantees of the principal, premium, if any, and interest on the Notes, and other monetary obligations under the indentures, by all of the Company's current domestic wholly owned subsidiaries, with the exception of Delaware Funding, CIT Bank and other regulated subsidiaries, special purpose entities and immaterial subsidiaries. Each of the guarantees relates to all Notes issued under the indenture being supplemented. The maximum aggregate liability of each Guarantor under each of these guarantees is limited to an aggregate of $50,000. The guarantees are subordinate to senior indebtedness as defined in the amended indentures. The Company, certain of its subsidiaries, Barclays Bank PLC, as administrative agent, and the Requisite Lenders as set forth in the amendment, entered into the Third Amendment to the Amended and Restated Credit and Guaranty Agreement, which became effective on October 1, 2009, to permit certain subsidiaries of the Company to provide the guarantees. A full-text copy of the Barclays credit agreement is available at no charge at http://ResearchArchives.com/t/s?46b3 Restructuring Plan CIT Group, on July 29, 2009, entered into a credit agreement, with Barclays Bank PLC, as administrative agent and collateral agent, and the lenders party thereto, for loans of up to $3 billion. In connection with the credit agreement, CIT Group was required to adopt a restructuring plan acceptable by lenders starting October 1, 2009. CIT Group on October 1 announced that it has commenced a restructuring of its capital structure that has been approved by the Company's Board of Directors and by the Steering Committee of CIT's bondholders. The announcement is an important step in a comprehensive restructuring plan to enhance CIT's capital levels, improve its liquidity and return the Company to profitability. Under the plan, CIT Group Inc. and CIT Group Funding Company of Delaware LLC (Delaware Funding) are launching exchange offers for certain unsecured notes. The Company said that if it does not achieve the objectives of the exchange offers, it may decide to initiate a voluntary filing under Chapter 11 of the U.S. Bankruptcy Code. Therefore, the Company is concurrently soliciting bondholders and other holders of CIT debt to approve a prepackaged plan of reorganization. The Company has been informed by advisors to the Steering Committee that, subject to review of the offering memorandum, approximately $10 billion of outstanding unsecured indebtedness have already indicated their intention to participate in the exchange offer or vote for the prepackaged plan of reorganization. Evercore Partners, Morgan Stanley and FTI Consulting are the Company's financial advisors and Skadden, Arps, Slate, Meagher & Flom LLP and Sullivan & Cromwell LLP are legal counsel in connection with the restructuring plan. Houlihan Lokey Howard & Zukin Capital, Inc. serves as financial advisor, and Paul, Weiss, Rifkind, Wharton & Garrison LLP serves as legal counsel to the Steering Committee of CIT's bondholders. About CIT Group CIT Group Inc. (NYSE: CIT) -- http://www.cit.com/-- is a bank holding company with more than $60 billion in finance and leasing assets that provides financial products and advisory services to small and middle market businesses. Operating in more than 50 countries across 30 industries, CIT provides an unparalleled combination of relationship, intellectual and financial capital to its customers worldwide. CIT maintains leadership positions in small business and middle market lending, retail finance, aerospace, equipment and rail leasing, and vendor finance. Founded in 1908 and headquartered in New York City, CIT is a member of the Fortune 500. As of June 30, 2009, CIT Group had total assets of $71,019,200,000 against total debts of $64,901,200,000. CITIGROUP INC: Discloses Equity Stake in Various Companies ---------------------------------------------------------- Citigroup Global Markets Inc.; Citigroup Financial Products Inc.; Citigroup Global Markets Holdings Inc.; and Citigroup Inc. disclosed that they: -- no longer hold shares of Key Tronic Corporation common stock; -- hold 421 shares or roughly 0% of the common stock of RF Industries, Ltd; -- no longer hold Auction Rate Preferred Securities of Nuveen Multi-Strategy Income & Growth Fund 2; -- no longer hold Auction Rate Preferred Securities of Nuveen Floating Rate Income Opportunity Fund; -- hold 801,465 shares or roughly 1.7% of the common stock of Medis Technologies Ltd.; and -- hold 17,611 shares or roughly 0% of the common stock of Six Flags, Inc. CFP is the sole stockholder of CGM. CGM Holdings is the sole stockholder of CFP. Citigroup is the sole stockholder of CGM Holdings. 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. The U.S. Treasury and the Federal Deposit Insurance Corporation agreed to 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, the third-biggest U.S. bank, received $52 billion in bailout aid. 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. Citigroup is one of the banks that, according to results of the government's stress test, need more capital. CITIGROUP INC: Files October Investments Offerings Brochure ----------------------------------------------------------- Citigroup Inc. filed with the Securities and Exchange Commission the CitiFirst Structured Investments Offerings Brochure for October 2009. The Offerings are: -- CitiFirst Protection Investments * 2% Minimum Coupon Principal Protected Notes Based Upon the Russell 2000(R) Index * Principal Protected Notes Based Upon a Basket of Currencies -- CitiFirst Performance Investments * ELKS(R) Based Upon Wells Fargo & Company * ELKS(R) Based Upon Schlumberger Limited * Buffer Notes Based Upon the Dow Jones Industrial AverageSM -- CitiFirst Opportunity Investments * Global Recovery PLUSSM Based on the Performance of a Basket Composed of Equity and Commodity Exchange Traded Funds and Bond Indices A full-text copy of the October brochure is available at no charge at http://ResearchArchives.com/t/s?469b 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. The U.S. Treasury and the Federal Deposit Insurance Corporation agreed to 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, the third-biggest U.S. bank, received $52 billion in bailout aid. 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. Citigroup is one of the banks that, according to results of the government's stress test, need more capital. CITIGROUP INC: To Issue Four Series of Notes; Files Docs with SEC ----------------------------------------------------------------- Citigroup Inc. filed with the Securities and Exchange Commission documents relating to the issuance by Citigroup Funding Inc. of: -- $_________ of Stock Market Upturn NotesSM Based Upon the iShares(R) MSCI Brazil Index Fund Due 2011, at $1,000.00 per Note See http://ResearchArchives.com/t/s?464a -- $_________ of Stock Market Upturn NotesSM Based Upon the Energy Select Sector SPDR(R) Fund Due 2011, at $1,000.00 per Note See http://ResearchArchives.com/t/s?464b -- $3,100,000 of 14 Month S&P-GSCI Total Return Linked Notes Due 2010 See at http://ResearchArchives.com/t/s?464c -- $3,100,000 of Notes Based Upon the S&P GSCI TM Precious Metals Total Return Index Due December 3, 2010 See http://ResearchArchives.com/t/s?464d 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. The U.S. Treasury and the Federal Deposit Insurance Corporation agreed to 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, the third-biggest U.S. bank, received $52 billion in bailout aid. 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. Citigroup is one of the banks that, according to results of the government's stress test, need more capital. CITIGROUP INC: To Accept Finra Fine in Tax-Linked Stock Deals ------------------------------------------------------------- David Scheer at Bloomberg News reports that Citigroup Inc. will pay $600,000 to settle a regulator's claims that it inadequately supervised transactions that helped international customers avoid U.S. taxes on stock dividends, according to a person familiar with the matter. According to the report, investigators at the Financial Industry Regulatory Authority, which polices almost 4,800 U.S. firms, found Citigroup Global Markets failed to supervise the system of trades and swap contracts and inadequately monitored certain communications, the person said, declining to be identified because the matter isn't public. Bloomberg recounts that a U.S. Senate inquiry last year found that Wall Street firms concocted derivatives and stock-loan deals to help clients including international hedge funds avoid hundreds of millions of dollars in taxes. Citigroup, aware the Internal Revenue Service might deem its transactions improper, voluntarily disclosed them and paid $24 million in taxes for 2003 through 2005, the Senate's Permanent Subcommittee on Investigations said in a report released in September of 2008. Under the system, an overseas client typically sold U.S. shares to Citigroup before dividends were paid, then later received an amount similar to the dividend through a derivative contract, according to the person familiar with Finra's findings. Citigroup initially lacked written procedures to oversee the system, and after the firm adopted a policy, employees didn't always follow it, the person said. 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. The U.S. Treasury and the Federal Deposit Insurance Corporation agreed to 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, the third-biggest U.S. bank, received $52 billion in bailout aid. 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. Citigroup is one of the banks that, according to results of the government's stress test, need more capital. CITY OF SAN DIEGO: Budget Deficit May Rise $22-Mil. Next Year ------------------------------------------------------------- Joe Britton at City News Service reports that the San Diego City Council's Independent Budget Analyst Andrea Tevlin said that the city's budget deficit next fiscal year could be as much as $22 million higher than the $179 million projected by Mayor Jerry Sanders. City News Service relates that Mayor Sanders' five-year financial outlook anticipates annual budget deficits in excess of $130 million through 2015. According to City News Service, Independent Budget Analyst Andrea Tevlin said that the city's financial situation is dire and few options are available to solve the problem. City News Service states that Mayor Sanders said that San Diego's budget deficit in fiscal year 2011, which begins on July 1, will be $179 million, due to dropping tax revenues and rising pension costs, but Mr. Tevlin disputed the mayor's property and hotel tax revenue projections, saying that the shortfall would be more like $201 million. CLEM CARINALLI: Creditors Meeting Set for Nov. 6 ------------------------------------------------ Nathan Halverson at The Press Democrat reports that a meeting of Clem Carinalli's creditors is set for November 6 Odd Fellows Hall, 545 Pacific Ave., in Santa Rosa. According to The Press Democrat, dozens of Mr. Carinalli's lenders attended a closed-door meeting on Thursday where they took the first step to creating the panel that will play a vital oversight role in the bankruptcy of the county's largest individual landowner. The Press Democrat relates that North Coast Bank President Raymond Byrne said after the meeting that banks want the matter resolved more quickly to appease shareholders, which would likely mean selling off Mr. Carinalli's real estate holdings in the near future and writing off any unpaid debt. The U.S. Bankruptcy Judge Alan Jaroslovsky converted the Chapter 7 liquidation case of Clem Carinalli and his wife, Ann Marie, into Chapter 11 reorganization, at the behest of the Debtors. As reported by the TCR on September 17, 2009, a group of investors claiming that they are owed almost $1 million by Mr. Carinalli filed a petition to force him into Chapter 7 bankruptcy in the U.S. Bankruptcy Court in Santa Rosa. Mr. Carinalli owes creditors some $150 million. Exchange Bank President William Schrader said that the involuntary bankruptcy could delay loan payments to the bank and other institutions. Mr. Carinalli said that he was hoping to avert bankruptcy and instead negotiate privately with investors, as that would increase the odds of paying creditors back. Mr. Carinalli hired debt restructuring consultant Steve Huntley to negotiate with creditors. CONTINENTAL ALLOYS: S&P Retains Developing Watch on 'CCC' Rating ---------------------------------------------------------------- Standard & Poor's Ratings Services said that its ratings on Continental Alloys & Services Inc., including the 'CCC' corporate credit rating, remain on CreditWatch, where they were placed on June 18, 2009, with developing implications. This means the rating could be raised or lowered following the completion of S&P's analysis. "We are keeping the ratings on CreditWatch to reflect S&P's ongoing concern regarding Continental's ability to comply with the financial covenants governing its existing bank credit facility," explained Standard & Poor's credit analyst Sherwin Branford. Specifically, the company is required to maintain total debt to EBITDA at less than 3x for the life of the facility. However, as of Sept. 30, 2009, S&P estimates that leverage was well in excess of that level, resulting in the need for the company to negotiate a temporary waiver from its lending group while it negotiates amendments to the agreement. Weakness in natural gas drilling activity, combined with lower steel prices, have significantly reduced the company's volumes and gross margins. In resolving the CreditWatch status of the ratings, which S&P expects to occur over the next few months, S&P will monitor the company's ability to remain in compliance with its financial covenants -- either through negotiations with its lending group regarding an amendment to the existing agreement or its ability to reduce debt balances. S&P could take an unfavorable ratings action if the company is not able to remain in compliance with its covenants, leading to a default under the credit agreement. There is potential for an upgrade if, in S&P's view, the company will be able to remain in compliance with its covenants in the near to intermediate term, either through an amendment or significantly reduced debt balances, as operating performance will likely remain challenged during the next several quarters. COOPER-STANDARD: Court OKs FTI as Fin'l Advisor to Committee ------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Delaware authorized the Official Committee of Unsecured Creditors of Cooper-Standard Holdings Inc. to retain FTI Consulting Inc. to provide financial advisory services, effective Aug. 13, 2009. In a September 30 order, the Court held that the Debtors have no obligation to indemnify FTI for any claim or expense for a contractual dispute in which the Debtors allege the material breach of FTI's contractual obligations unless the Court determines that indemnification, contribution or reimbursement would be permissible. The U.S. Trustee has the right to object to FTI's monthly fees and the completion fee, according to the court order. "The services of FTI are deemed necessary to enable the Committee to assess and monitor the efforts of the Debtors and their professional advisors to maximize the value of their estates and to reorganize successfully," says Patrick Healy of Wilmington Trust Company, chair of the Creditors Committee. As financial adviser of the Creditors Committee, FTI Consulting is tasked to: (1) assist in assessing and monitoring the Debtors' short-term cash flow, liquidity, prepetition claim payments and operating results; (2) assist in reviewing issues including payments to key suppliers and reclamation claims, in reviewing the Debtors' corporate structure and in analyzing inter- company transactions; (3) assist in evaluating employee-related issues and motions; (4) assist in reviewing tax issues about claims or stock trading, preservation of net operating losses, plans of reorganization, and asset sales; (5) assist in reviewing the Debtors' business plan, claims reconciliation process and estimation; (6) assist in valuating business and in reviewing capital structure alternatives; (7) assist in reviewing chapter 11 plan of reorganization and disclosure statement, and in reviewing or preparing information and analyses necessary for the confirmation of that plan; (8) assist in evaluating and analyzing avoidance actions, including fraudulent conveyances and preferential transfers; and (9) attend meetings of Debtors, potential investors, banks, other secured lenders, the Creditors Committee and other concerned parties. In return for its services, FTI Consulting will be paid $250,000 per month for the first three months, $200,000 per month for the next six months, $150,000 per month thereafter and a completion fee of $2.5 million. The completion fee will be paid to the firm upon confirmation of a Chapter 11 plan of reorganization or liquidation, and the sale of most of the Debtors' assets. FTI Consulting will also be reimbursed of its expenses and will be indemnified for claims resulting from or in connection with its retention. Michael Eisenband, senior managing director of FTI Consulting, assures the Court that his firm is eligible to represent the Creditors Committee because it does not represent any other entity having an interest adverse to the panel in connection with the Debtors' bankruptcy cases. About Cooper-Standard Cooper-Standard Automotive Inc. -- http://www.cooperstandard.com/ -- headquartered in Novi, Michigan, is a leading global automotive supplier specializing in the manufacture and marketing of systems and components for the automotive industry. Products include body sealing systems, fluid handling systems and NVH control systems. The Company is one of the leading suppliers of chassis products in North America, with about 14% of market share. The Company's main custoemrs include Ford Motor Company, General Motors, Chrysler, Audi, Volkswagen, BMW, Fiat and Honda, among other automakers. Cooper-Standard Automotive employs approximately 16,000 people globally with more than 70 facilities throughout the world. Cooper-Standard is a privately held portfolio company of The Cypress Group and Goldman Sachs Capital Partners Funds. Cooper-Standard Holdings Inc., together with affiliates, filed for Chapter 11 on August 4, 2009 (Bankr. D. Del. Case No. 09-12743). Attorneys at Fried, Frank, Harris, Shriver & Jacobson LLP and Richards, Layton & Finger, P.A., will serve as bankruptcy counsel to the Debtors. Lazard Freres & Co. is serving as investment banker while Alvarez & Marsal is financial advisor. Kurtzman Carson Consultants LLC is notice, claims and solicitation agent. In its bankruptcy petition, the Company said that assets on a consolidated basis total $1,733,017,000 while debts total $1,785,039,000 as of March 31, 2009. The Company's Canadian subsidiary, Cooper-Standard Automotive Canada Limited, also sought relief under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice in Toronto, Ontario, Canada. Bankruptcy Creditors' Service, Inc., publishes Cooper-Standard Bankruptcy News. The newsletter tracks the Chapter 11 and CCAA proceedings undertaken by Cooper-Standard Holdings Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945- 7000) COOPER-STANDARD: Files Bankruptcy Rule 2015.3 Reports ----------------------------------------------------- Cooper-Standard Holdings Inc. and its affiliated debtors filed in Court a report on the value, operations and profitability of those companies in which they hold a substantial or controlling interest as of June 30, 2009, as required by Rule 2015.3 of the Federal Rules of Bankruptcy Procedure. Allen Campbell, chief financial officer of CS Holdings, reported that the Debtors' estates hold 20% interest or more in these companies: Interest of Companies the Estate --------- ----------- Cooper-Standard Automotive Canada Ltd. 100% Cooper-Standard Automotive Sealing de Mexico S.A. de C.V. 80% Cooper-Standard Automotive Services S.A. de C.Y. 99.99% Coopermex, S.A. de C.Y. 99.99% 4 Cooper-Standard Automotive de Mexico 99.99% S.A. de C.Y. Manufacturera El Jarudo, S. de R.L. de C.Y. 99.99% Cooper-Standard Automotive de Mexico Fluid Services, S. de R.L. de C.Y. 99.97% Cooper-Standard Automotive Fluid Systems de Mexico, S. de R.L. de C.Y. 99.97% Cooper-Standard Automotive FHS, SA de c.y. 99.8% Cooper-Standard Automotive Japan KK 100% Cooper-Standard Automotive Korea Inc. 100% Cooper-Standard Services Korea, Inc. 100% Cooper-Standard (Suzhou) Automotive Co., Ltd. 100% Metzeler Automotive Profiles India Private Ltd. 74% Cooper-Standard Automotive India Private Ltd. 99.99% Cooper-Standard Automotive HIS (Australia) 100% Pty. Ltd Cooper-Standard Automotive Brasil Sealing Ltda. 100% Cooper-Standard Automotive Brasil Fluid 69.02% Systems Ltda. Itatiaia Standard Industrial Ltda. 54.71% SPB Comercio e Participacoes Ltda. 100% Cooper-Standard Automotive France SAS 81.0% Cooper-Standard Automotive Polska Sp. z 0.0. 100% Cooper-Standard Automotive UK Sealing Ltd. 100% Cooper-Standard Automotive FHS Ceska 99.9% republika S.r.O. CSA International Holdings CV 99.995% Guyoung Technology Co. Ltd. 20.23% Nishikawa Standard Company LLC 50% The Debtors also filed in Court financial statements for some of the companies held by the Debtors, a copy of which is available for free at http://bankrupt.com/misc/CooperRule2015.3June30.pdf CS Holdings Wants Rule 2015.3(a) Reports for Joint Ventures Sealed Cooper-Standard Holdings Inc. and its affiliated debtors seek court approval to file under seal reports of financial information about the joint ventures where they hold controlling or substantial interests pursuant to Rule 2015.3(a) of the Federal Rules of Bankruptcy Procedure. The move came after the U.S. Bankruptcy Court for the District of Delaware issued an order, authorizing the Debtors to file until October 5, 2009, their financial reports on companies where they hold a controlling or substantial interest. The Debtors directly own equity interests in 26 non-debtor affiliates, four of which are joint ventures. They own at least 50% interest in three of these four joint ventures. "The information required by Bankruptcy Rule 2015.3(a) with respect to the joint ventures is highly confidential and commercially sensitive such that its disclosure will harm the Debtors' operations," says the Debtors' counsel, Drew Sloan, Esq., at Richards Layton & Finger P.A., in Wilmington, Delaware. Mr. Sloan says disclosure of the information would also harm the Debtors' business relationship with their partners since the joint ventures are governed by agreements that require the Debtors to keep "highly sensitive commercial information" strictly confidential. The Debtors also seek court approval to file under seal their financial reports about the joint ventures until October 30, 2009. The hearing to consider approval of the Debtors' request is scheduled for October 27, 2009. Creditors and other concerned parties have until October 20, 2009, to file their objections. About Cooper-Standard Cooper-Standard Automotive Inc. -- http://www.cooperstandard.com/ -- headquartered in Novi, Michigan, is a leading global automotive supplier specializing in the manufacture and marketing of systems and components for the automotive industry. Products include body sealing systems, fluid handling systems and NVH control systems. The Company is one of the leading suppliers of chassis products in North America, with about 14% of market share. The Company's main custoemrs include Ford Motor Company, General Motors, Chrysler, Audi, Volkswagen, BMW, Fiat and Honda, among other automakers. Cooper-Standard Automotive employs approximately 16,000 people globally with more than 70 facilities throughout the world. Cooper-Standard is a privately held portfolio company of The Cypress Group and Goldman Sachs Capital Partners Funds. Cooper-Standard Holdings Inc., together with affiliates, filed for Chapter 11 on August 4, 2009 (Bankr. D. Del. Case No. 09-12743). Attorneys at Fried, Frank, Harris, Shriver & Jacobson LLP and Richards, Layton & Finger, P.A., will serve as bankruptcy counsel to the Debtors. Lazard Freres & Co. is serving as investment banker while Alvarez & Marsal is financial advisor. Kurtzman Carson Consultants LLC is notice, claims and solicitation agent. In its bankruptcy petition, the Company said that assets on a consolidated basis total $1,733,017,000 while debts total $1,785,039,000 as of March 31, 2009. The Company's Canadian subsidiary, Cooper-Standard Automotive Canada Limited, also sought relief under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice in Toronto, Ontario, Canada. Bankruptcy Creditors' Service, Inc., publishes Cooper-Standard Bankruptcy News. The newsletter tracks the Chapter 11 and CCAA proceedings undertaken by Cooper-Standard Holdings Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945- 7000) COOPER-STANDARD: Gets Nod to Employ Foley as Special Counsel ------------------------------------------------------------ Cooper-Standard Holdings Inc. and its affiliated debtors obtained approval of the U.S. Bankruptcy Court for the District of Delaware to employ Foley & Lardner LLP as their special counsel effective August 3, 2009. The Debtors seek to employ Foley as special counsel in coordination with their general bankruptcy counsel, Fried Frank Harris Shriver & Jacobson LLP because of the firm's extensive experience in automotive industry restructurings, according to Chun Jang, Esq., at Richards Layton & Finger P.A., in Wilmington, Delaware. "Foley also has significant knowledge of the Debtors' operations and legal issues, having represented the Debtors in numerous legal matters over the last several years in nearly all aspects of their businesses," Mr. Jang further says. As the Debtors' special counsel, Foley is tasked to handle automotive-related issues including supplier or customer-related issues, and other matters with respect to which the firm has previously been involved. Foley will be paid for its services based on the firm's hourly rates and will also be reimbursed of its expenses. The professionals at the firm who are expected to provide legal assistance to the Debtors and their hourly rates are: Professionals Title Hourly Rate ------------- ----- ----------- Judy O'Neill Partner $675 Steven Hilfinger Partner $625 Ann Marie Uetz Partner $560 John Simon Senior Counsel $560 Ryan Bewersdorf Associate $465 Omar Lucia Associate $340 Adam Wienner Associate $345 Veronica Crabtree Paralegal $195 Ms. Uetz assures the Court that her firm does not hold or represent any interest adverse to the Debtors or their estates, and that the firm is a "disinterested person" as that term is defined under Section 101(14) of the Bankruptcy Code. About Cooper-Standard Cooper-Standard Automotive Inc. -- http://www.cooperstandard.com/ -- headquartered in Novi, Michigan, is a leading global automotive supplier specializing in the manufacture and marketing of systems and components for the automotive industry. Products include body sealing systems, fluid handling systems and NVH control systems. The Company is one of the leading suppliers of chassis products in North America, with about 14% of market share. The Company's main custoemrs include Ford Motor Company, General Motors, Chrysler, Audi, Volkswagen, BMW, Fiat and Honda, among other automakers. Cooper-Standard Automotive employs approximately 16,000 people globally with more than 70 facilities throughout the world. Cooper-Standard is a privately held portfolio company of The Cypress Group and Goldman Sachs Capital Partners Funds. Cooper-Standard Holdings Inc., together with affiliates, filed for Chapter 11 on August 4, 2009 (Bankr. D. Del. Case No. 09-12743). Attorneys at Fried, Frank, Harris, Shriver & Jacobson LLP and Richards, Layton & Finger, P.A., will serve as bankruptcy counsel to the Debtors. Lazard Freres & Co. is serving as investment banker while Alvarez & Marsal is financial advisor. Kurtzman Carson Consultants LLC is notice, claims and solicitation agent. In its bankruptcy petition, the Company said that assets on a consolidated basis total $1,733,017,000 while debts total $1,785,039,000 as of March 31, 2009. The Company's Canadian subsidiary, Cooper-Standard Automotive Canada Limited, also sought relief under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice in Toronto, Ontario, Canada. Bankruptcy Creditors' Service, Inc., publishes Cooper-Standard Bankruptcy News. The newsletter tracks the Chapter 11 and CCAA proceedings undertaken by Cooper-Standard Holdings Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945- 7000) CUNNINGHAM BROADCASTING: MOU Allows Termination of Sinclair LMAs ---------------------------------------------------------------- Sinclair Broadcast Group, Inc., has entered into a non-binding memorandum of understanding with Cunningham Broadcasting Corporation, its local marketing agreement partner in six markets. As of June 30, 2009, Cunningham's stations provided Sinclair with approximately $70.0 million of annual total revenue. Sinclair notes Cunningham is currently facing significant financial and economic challenges. On June 5, 2009, the administrative agent under Cunningham's bank credit facility declared an event of default under the facility for failure to timely deliver certain annual financial statements as required. As of such date, a rate of interest of LIBOR plus 5%, which rate includes a 2% default rate of interest, has been instituted on all outstanding borrowings under the Cunningham bank credit facility. On June 30, 2009, the default was waived and the termination date of the Cunningham bank credit facility was extended to July 31, 2009, subject to certain conditions, including maintaining the default interest rate. On July 31, 2009, the Cunningham bank credit facility was further extended to October 30, 2009. The extension requires that Cunningham make $200,000 principal payments on its term loan facility as of the first day of each of August, September and October with the balance due on October 30, 2009. To delay or avoid any potential bankruptcy of Cunningham, the lenders under Cunningham's existing credit facility have indicated their willingness to replace such credit facility with a new credit facility, which is conditioned upon Cunningham's demonstration that it can repay the outstanding principal balance due under the facility within three years. As a result, Cunningham asked Sinclair to restructure certain of its arrangements with Sinclair, including the LMAs, which negotiations led to the execution of the MOU. Under the terms of the MOU, upon the consummation of the tender offers by Sinclair Television Group, Inc. for any and all of Sinclair's outstanding 3.0% Convertible Senior Notes due 2027 and 4.875% Convertible Senior Notes due 2018 and the related financing, the following arrangements between Cunningham and Sinclair would be amended and restated and become effective: (i) the LMAs, (ii) option agreements to acquire Cunningham stock, and (iii) certain acquisition or merger agreements relating to television stations owned by Cunningham. If the LMAs and other agreements are amended and restated pursuant to the MOU, they will have these material revised terms: -- Cunningham will have the right to terminate the LMAs and the other agreements upon a "change of control" of Sinclair, which will occur if the Smith brothers no longer own or control at least 51% of the voting power of Sinclair; -- If Cunningham files for bankruptcy protection under Chapter 11 of the United States Bankruptcy Code, it will not seek to reject the LMAs or the other agreements in a bankruptcy proceeding until such time as the parties to the MOU have had a reasonable time to negotiate, in good faith, mutually agreeable amendments to such LMAs or other agreements; -- The LMAs and the other agreements will terminate on July 1, 2016, provided that Sinclair will have three options to extend the term, each option for an additional five-year term; -- In consideration of the new terms of the LMAs and other agreements and the extension options, beginning January 1, 2010, and ending on July 1, 2012, Sinclair will be obligated to pay Cunningham the sum of approximately $29.1 million in 10 quarterly installments of $2.75 million and one quarterly payment of approximately $1.6 million, which amounts will be used to pay off Cunningham's bank credit facility and which amounts will be credited toward the purchase price for each Cunningham Station, in accordance with a specified allocation, that is acquired by Sinclair pursuant to any of the option, acquisition or merger agreements or Cunningham's put option applicable to such Cunningham Station -- Purchase Price Credit Payments. An additional $3.9 million, approximately, will be paid in two installments on July 1, 2012, and October 1, 2012, as an additional LMA fee, in addition to the LMA Fee. Notwithstanding, if Cunningham seeks to terminate the LMAs or the other agreements, including in connection with a change in control, then Sinclair will have the right to assign the LMAs or the other agreements being terminated to a third party or parties. Upon such termination by Cunningham any remaining obligation of Sinclair to pay the amounts indicated will be terminated. The aggregate purchase price of the television stations, $78.5 million as of September 30, 2009, will be decreased by each Purchase Price Credit Payment as it is paid, but, subject to certain terms, will be increased by 6% annually; -- Beginning on October 1, 2012, and continuing thereafter during the terms of the LMAs (or any extensions thereto), Sinclair will be obligated to pay Cunningham an annual LMA fee for the television stations equal to the greater of (i) 3% of each station's annual net broadcast revenue and (ii) $5.0 million (reduced proportionally if one or more stations are purchased by Sinclair). The LMA Fee will be subject to cost-of-living increases every five years during the LMA term or any extension thereof. The LMA Fee will be allocated as follows: (i) a portion equal to 6% of the aggregate purchase price of the television stations will be allocated to the payment of interest on the remaining portion of the aggregate purchase price; and (ii) the remainder as a fee to Cunningham for services provided under the LMAs. After the $29.1 million payable to Cunningham is paid in full, and as long as the LMA Fee is paid each year, the aggregate purchase price will no longer increase because the 6% interest due on the aggregate purchase price will be paid in full each year as indicated; -- Cunningham will have a put option, under which Cunningham may require Sinclair to purchase the television stations on July 1, 2016, which is the termination date of the initial term of the LMAs or at the expiration of any renewal term. Sinclair may assign its obligation to purchase the television stations to a third party in the event that it cannot acquire the television stations as a result of Federal Communications Commission rules or for any other reason. If Cunningham exercises its put option, the purchase price for the Cunningham Station(s) acquired will be the lesser of (i) the portion of the aggregate purchase price in effect at such time allocable to such Cunningham Station(s) and (ii) the appraised fair market value of such Cunningham Station(s); -- The prices under the existing options to purchase Cunningham stock will be adjusted to make them consistent with the purchase prices and terms contained in the amended and restated acquisition agreements. In addition, in lieu of acquiring the assets of any of the Cunningham Stations under the acquisition agreements, Sinclair will have an option to acquire for cash all of the issued and outstanding stock of each subsidiary of Cunningham, on terms and conditions substantially similar in all material respects to the amended and restated option agreements. In the event Sinclair determines to acquire any of the Cunningham Stations under any of the acquisition or merger agreements, Cunningham may cause Sinclair to acquire the stock of the Cunningham subsidiary or subsidiaries that hold the Cunningham Station rather than the assets of the Cunningham Station pursuant to the acquisition or merger agreement and may require the price to be paid in cash rather than Sinclair stock. In addition, the acquisition and merger agreements will be subject to a financing condition; -- Cunningham will be obligated to pay liquidated damages to Sinclair if Cunningham terminates any of the option, acquisition or merger agreements for any reason other than a termination resulting from the exercise of Cunningham's put option or Sinclair's material breach, act or omission. The liquidated damages will be in an amount equal to the sum of all Purchase Price Credit Payments made by Sinclair to Cunningham that have decreased the aggregate purchase price of the Cunningham Stations plus the additional LMA fee payments, not to exceed $33.0 million in the aggregate; -- During the period that the Convertible Notes (or any notes issued to refinance the Convertible Notes) are outstanding, Sinclair will have consent rights (which consent may not be unreasonably withheld or delayed) over Cunningham's future borrowings, with the exception of (i) borrowings for the acquisition by Cunningham of certain television stations for which Sinclair has freely assignable purchase option agreements that it cannot currently exercise; and (ii) any amounts totaling less than $10.0 million in the aggregate; and -- Cunningham will purchase, upon Sinclair's request, Sinclair's options to purchase five television stations currently operated by Sinclair under LMAs with other LMA partners, for a purchase price of $100 per station. Once such options are purchased, Cunningham will be obligated to immediately exercise the rights to acquire such television stations, to the extent financing is available on reasonable terms and conditions and subject to FCC approval. Immediately following Cunningham's acquisition of these stations, Cunningham will enter into amended LMAs with Sinclair for each such television station, whereby Sinclair will pay the operating cost of each such station, plus an amount equal to the interest paid by Cunningham to its lender(s) on borrowed funds for Cunningham's acquisition of the stations, plus $400,000 per year per station. Sinclair will have the option to acquire each of the television stations for an amount equal to the amount paid by Cunningham for such station. The amendments and restatements to the LMAs and other agreements require the consent of the lenders under Cunningham's bank credit facility and the lenders under our bank credit facility. While these lenders have been provided the MOU and have expressed verbal support for the terms thereunder, formal written approval has not yet been obtained. There is no assurance that the parties to the MOU will succeed in negotiating amended and restated LMAs and other agreements on the terms set forth or that the lenders will consent to the amended and restated LMAs and other agreements. In the event the LMAs and option, acquisition and merger agreements are not amended and restated pursuant to the MOU, Cunningham may be forced to file for protection under Chapter 11 of the Bankruptcy Code. Sinclair's bank credit agreement contains certain cross-default provisions with respect to Cunningham, pursuant to which a default would be caused by the institution of insolvency or similar proceedings, whether voluntary or involuntary, with respect to Cunningham. If Cunningham is unable to avoid bankruptcy, Sinclair would need to negotiate with the lenders under the Bank Credit Agreement to avoid any default and acceleration thereunder. Any amendment to, or waiver of a default under, the Bank Credit Agreement would likely be on terms less favorable to Sinclair than the current terms. Furthermore, if Cunningham or any of its subsidiaries were to declare bankruptcy, Cunningham or such subsidiary could seek to reject some or all of Sinclair's LMAs or other agreements with Cunningham and its subsidiaries If the bankruptcy court overseeing a Cunningham bankruptcy authorized a rejection of the LMAs or other agreements Sinclair would experience a material reduction in revenues and current rules and regulations of the FCC would not permit Sinclair thereafter to enter into new LMAs or other agreements with Cunningham or a successor to Cunningham on equivalent terms. About Cunningham Broadcasting Cunningham Broadcasting Corporation is the owner-operator and FCC licensee of WNUV-TV, Baltimore, Maryland; WRGT-TV, Dayton, Ohio; WVAH-TV, Charleston, West Virginia; WTAT-TV, Charleston, South Carolina; WMYA-TV (formerly WBSC-TV), Anderson, South Carolina; and WTTE-TV. About Sinclair Broadcast Group Based in Baltimore, Maryland, Sinclair Broadcast Group, Inc. (Nasdaq: SBGI) -- http://www.sbgi.net/-- one of the largest and most diversified television broadcasting companies, currently owns and operates, programs or provides sales services to 58 television stations in 35 markets. The Company's television group reaches approximately 22% of U.S. television households and includes FOX, ABC, CBS, NBC, MNT and CW affiliates. As of June 30, 2009, the Company had $1.60 billion in total assets and $1.75 billion in total liabilities. Sinclair carries Moody's Investors Service's Caa2 Corporate Family Rating and Caa3 Probability of Default Rating; and Standard & Poor's Ratings Services' 'B-' corporate credit rating. DAZLBET PARTNERS LLC: Voluntary Chapter 11 Case Summary ------------------------------------------------------- Debtor: Dazlbet Partners, LLC 3004 53rd Ave. E. Bradenton, FL 34203 Case No.: 09-22876 Type of Business: The Debtor operates an agricultural and farming business. Chapter 11 Petition Date: October 8, 2009 Court: United States Bankruptcy Court Middle District of Florida (Tampa) Debtor's Counsel: Bernard J. Morse, Esq. Morse & Gomez PA 11268 Winthrop Main Street, Suite 102 Riverview, FL 33578 Tel: (813) 341-8400 Fax: (813) 463-1807 Email: chipmorse@morsegomez.com Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $10,000,001 to $50,000,000 The Debtor did not file a list of its 20 largest unsecured creditors when it filed its petition. DECODE GENETICS: Increases Secured Promissory Note to $2.8MM ------------------------------------------------------------ deCODE genetics, Inc., reports that on October 1, 2009, the secured promissory note dated September 11, 2009, among deCODE genetics, MediChem Life Sciences, Inc., deCODE Biostructures, Inc. and Saga Investments LLC, as amended on September 25, was further amended to increase the principal amount thereof to $2,870,000. All other terms of the note remain in place. As reported by the Troubled Company Reporter, on September 25, 2009, the secured promissory note dated September 11, among decode genetics, MediChem Life Sciences, deCODE Biostructures, and Saga Investments was amended to increase the principal amount thereof to $1,870,000. On September 24, 2009, to conserve its financial resources, deCODE genetics committed to the closing of its facility in Woodridge, Illinois. As part of the closure, deCODE eliminated roughly 60 positions, effective principally from September 25. Remaining operations are expected to cease as soon as practical. deCODE estimates that it in connection with the closure of, and winding down of operations at, the facility, it will incur cash expenditures of roughly $580,000 in employee-related costs, $150,000 in chemical disposal costs, $150,000 in utility costs, and $460,000 in contract termination fees. deCODE estimates that it will incur a total of roughly $1,500,000 in cash expenditures connection with the closure of the facility and the winding down of operations. Closure of the Woodridge facility has resulted in a default by deCODE's subsidiary, deCODE Chemistry, Inc., under its lease for the facility and the draw by the landlord under such lease on the $5,000,000 letter of credit securing the lease. The amount of additional charges that deCODE may incur under generally accepted accounting principles in connection with such default and draw will depend, in part, on actions to be taken by the landlord under the lease. Accordingly, deCODE cannot at this time estimate the total charges. However, it does not expect that the total cost will result in future cash expenditures other than those set forth. Going Concern Doubt deCODE genetics' balance sheet at June 30, 2009, showed total assets of $69.85 million and total liabilities of $313.92 million, resulting in a stockholders' deficit of $244.07 million. As of June 30, 2009, the Company had cash and cash equivalents of $3.80 million, compared to $3.70 million at Dec. 31, 2008. In early 2009 deCODE sold its ARS for $11.3 million in cash, and in April it signed licensing agreements with Celera Corporation under which it received an upfront payment and will receive royalties on sales of Celera testing products and services incorporating deCODE genetic risk markers. deCODE states it has sufficient resources to fund operations only into the latter half of the third quarter. The Company is simultaneously pursuing several options to ensure sufficient funding to take it to the execution of strategic options that can support the near- and longer-term viability of our core business. Regardless, deCODE's planned operations require immediate additional liquidity substantially in excess of the amounts, raising substantial doubt about deCODE's ability to continue as a going concern. In deCODE's ongoing strategic review, deCODE was evaluating and pursuing various alternatives aimed at focusing its business and underpinning ongoing product development and commercialization in its core business, including the sale of some or all of deCODE's US medicinal chemistry and structural biology units. About deCODE Genetics deCODE genetics Inc. (Nasdaq: DCGN) -- http://www.decode.com/-- operates as a biopharmaceutical company that applies discoveries in human genetics to develop drugs and diagnostics for common diseases. The Company serves pharmaceutical companies, biotechnology firms, pharmacogenomics companies, government institutions, universities, and other research institutions primarily in the United States, Europe, and internationally. The Company was founded in 1996 and is headquartered in Reykjavik, Iceland. DODART PROPERTIES LLC: Case Summary & 20 Largest Unsec. Creditors ----------------------------------------------------------------- Debtor: Dodart Properties LLC PO Box 40233 Santa Barbara, CA 93140-0233 Bankruptcy Case No.: 09-14160 Chapter 11 Petition Date: October 8, 2009 Court: United States Bankruptcy Court Central District of California (Santa Barbara) Judge: Robin Riblet Debtor's Counsel: David T. Berry, Esq. 5296 S Commerce Dr., Suite 200 Salt Lake City, CA 84107 Tel: (801) 265-0700 Fax: (801) 263-2487 Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's 20 largest unsecured creditors is available for free at: http://bankrupt.com/misc/cacb09-14160.pdf The petition was signed by David Dodart, managing member of the Company. E*TRADE FIN'L: Citadel Converts $60MM of Debentures to Equity ------------------------------------------------------------- Citadel Limited Partnership reports that on October 5, 6 and 7, 2009, the firm and its affiliates tendered $60,034,000 face amount of E*TRADE Financial Corporation Class A Debentures for conversion into 58,059,961 shares of Common Stock. Following these conversions and sales of E*TRADE shares on October 5, 6 and 7, Citadel will hold a total of roughly $826,910,000 face amount of the Class A Debentures and roughly 166,162,027 shares of Common Stock -- not counting shares issuable upon conversion of the Debentures. The Class A Debentures are convertible into Common Stock of E*TRADE at the price of $1.034 per share subject to certain limitations upon the conversion. Pursuant to section 12.01(b)(i) of the indenture for the Debentures, no holder may convert Debentures to the extent that the conversion would cause the holder to "beneficially own, as defined in Rule 13d-3 of the Exchange Act, in excess of 9.9% of the Common Stock outstanding immediately after giving effect to such conversion". In light of the number of shares of Common Stock outstanding and the number of shares of Common Stock owned by Citadel, the Debentures held by CEF are presently convertible into 18,382,616 shares of Common Stock. Accordingly, Citadel LP; Citadel Investment Group, L.L.C.; Kenneth Griffin; Citadel Equity Fund Ltd.; Citadel Securities LLC, f/k/a Citadel Derivatives Group LLC; Citadel Derivatives Trading Ltd.; Wingate Capital Ltd.; and Citadel AC Investments Ltd. Disclosed holding in the aggregate 184,559,043 shares or roughly 9.9% of E*TRADE's common stock. About E*TRADE Financial The E*TRADE FINANCIAL (NASDAQ: ETFC) family of companies provides financial services including trading, investing and related banking products and services to retail investors. Securities products and services are offered by E*TRADE Securities LLC (Member FINRA/SIPC). Bank products and services are offered by E*TRADE Bank, a Federal savings bank, Member FDIC, or its subsidiaries. * * * The Company's current senior debt ratings are Caa3 by Moody's Investor Service, CC/CCC-(3) by Standard & Poor's and B (high) by Dominion Bond Rating Service. The Company's long-term deposit ratings are Ba3 by Moody's Investor Service, CCC+ (developing) by Standard & Poor's and BB by DBRS. EASTMAN KODAK: Pays $12,000,000 Placement Fee to KKR ---------------------------------------------------- Affiliates of Kohlberg Kravis Roberts & Co. L.P. disclosed in a regulatory filing with the Securities and Exchange Commission that on September 29, 2009, Eastman Kodak Company paid KKR a $12,000,000 placement fee and reimbursed certain costs and expenses incurred by KKR and its affiliates in connection with the parties' investment agreement. Specifically, on September 29, 2009, (i) KKR Jet Stream (Cayman) Limited, an exempted limited company organized under the laws of the Cayman Islands, purchased from Kodak $279,728,000 aggregate principal amount of Senior Secured Notes due 2017 and KKR Jet Stream LLC purchased from Kodak Warrants to purchase Common Stock exercisable for 37,297,084 shares of Common Stock, for an aggregate amount of $268,539,000, (ii) 8 North America Investor (Cayman) Limited, an exempted limited company organized under the laws of the Cayman Islands, purchased from Kodak $15,064,000 aggregate principal amount of Senior Secured Notes and Warrants exercisable for 2,008,472 shares of Common Stock for an aggregate amount of $14,461,000 and (iii) OPERF Co-Investment LLC, a limited liability company organized under the laws of the State of Delaware, purchased from Kodak $5,208,000 aggregate principal amount of Senior Secured Notes and Warrants exercisable for 694,444 shares of Common Stock for an aggregate amount of $5,000,000. The aggregate amount of funds used to purchase the Securities was $288,000,000. These funds were provided from general funds available to the KKR entities and the applicable subsidiaries and affiliates, including capital contributions from investors. KKR Jet Stream LLC may be deemed to beneficially own the 37,297,084 shares of Kodak Common Stock issuable upon exercise of the Warrants it holds, which amount constitutes roughly 12.2% of the outstanding Common Stock. The shares of Common Stock issuable upon exercise of the Warrants held by KKR Jet Stream LLC, combined with the 2,008,472 shares of Common Stock issuable upon exercise of the Warrants held by 8 North America Investor (Cayman) Limited and the 694,444 shares of Common Stock issuable upon exercise of the Warrants held by OPERF Co-Investment LLC constitutes roughly 13.0% of the outstanding Kodak Common Stock. The KKR transaction, along with a separate private placement transaction of $400 million aggregate principal amount of Convertible Senior Notes due 2017, which closed on September 23, was part of an overall $700 million financing transaction designed to reinforce Kodak's strategic direction and strengthen the company's financial position. Under the terms of the agreement, and subject to certain exceptions, the KKR group is required to hold the warrants and shares issuable upon exercise of the warrants for a minimum of two years. So long as the KKR group holds warrants to purchase at least 50% of the number of shares of Kodak common stock issuable upon exercise of warrants purchased in the transaction (or at least 50% of the shares issued upon exercise thereof), KKR will have the right to nominate up to two members of Kodak's Board of Directors. If that warrant amount falls below 50%, but is at least 25%, KKR will have the right to nominate one member of Kodak's Board of Directors. If that warrant amount falls below 25%, the KKR group will no longer have the right to nominate any directors. The net proceeds of the KKR transaction, along with the net proceeds of the separate convertible senior note offering, are being used in part by Kodak to repurchase the company's existing 3.375% Convertible Senior Notes due 2033, a move that will bolster the company's balance sheet and free up capital for core investments. Excess proceeds will be used for general corporate purposes. About Eastman Kodak Headquartered in Rochester, New York, Eastman Kodak Company -- http://www.kodak.com/-- provides imaging technology products and services to the photographic and graphic communications markets. Kodak'S balance sheet at June 30, 2009, showed total assets of $7,106,000,000 and total liabilities of $7,215,000,000, resulting in shareholders' deficit attributable to Kodak of $112,000,000. The Troubled Company Reporter on September 22, 2009, said Fitch Ratings affirmed Kodak's Issuer Default Rating at 'B-'; Senior secured revolving credit facility at 'BB-/RR1'; and Senior unsecured debt at 'B-/RR4'. On Sept. 18, 2009, Standard & Poor's Ratings Services revised its recovery rating on Eastman Kodak's senior unsecured debt to '6', indicating S&P's expectation of negligible (0% to 10%) recovery in the event of a payment default, from '5'. S&P lowered the issue- level rating to 'CCC' (two notches lower than the 'B-' corporate credit rating on the company) from 'CCC+', in accordance with S&P's notching criteria for a '6' recovery rating. EDGE PETROLEUM: Needs More Time to File Schedules and Statements ---------------------------------------------------------------- Edge Petroleum Corp. and its debtor-affiliates ask the U.S. Bankruptcy Court for the Southern District of Texas for a 30-day extension of the time to file their schedules of assets and liabilities, and statements of financial affairs. The Debtors' filing deadline, absent an extension, is Oct. 13, 2009. The Debtors tell the Court that they will not be able to complete the schedules and statements by the initial deadline. They need more time to gather, compile and prepare information from books, records and documents relating to numerous claims, assets and contracts, the Debtors relates. About Edge Petroleum Edge Petroleum Corporation (Nasdaq:EPEX) (Nasdaq:EPEXP) is a Houston-based independent energy company that focuses its exploration, production and marketing activities in selected onshore basins of the United States. At June 30, 2009, the Company's balance sheet showed total assets of $264,030,000, total liabilities of $252,492,000 and stockholders' equity of $11,538,000. The Company has retained Akin Gump Strauss Hauer and Feld as legal counsel, and Parkman Whaling LLC as financial advisor. Kurtzman Carson Consultants LLC serves as claims and notice agent. EDGE PETROLEUM: Wants to Hire Akin Gump as Counsel -------------------------------------------------- Edge Petroleum Corp. and its debtor-affiliates ask the U.S. Bankruptcy Court for the Southern District of Texas for permission to employ Akin Gump Strauss Hauer & Feld LLP as their counsel. The firm has agreed to, among other things: a) render legal advice regarding the powers and duties of the Debtors that continue to operate their business and manage their properties as debtor-in-possession; b) take all necessary action to protect and preserve the Debtors' estates, including the prosecution of actions on the Debtors' behalf, the defense of any actions commenced against the Debtors, the negotiation of disputes in which the Debtors are involved, and the preparation of objections to claims filed against the Debtors' estates; and c) perform all other necessary legal advice services in connection with the prosecution of these Chapter 11 cases. The firm's current hourly rates for professionals: Partners $460-$1,050 Special Counsel and Counsel $250-$810 Associate $160-$580 Paraprofessionals $105-$270 The Debtors assure the Court that the firm is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. About Edge Petroleum Edge Petroleum Corporation (Nasdaq:EPEX) (Nasdaq:EPEXP) is a Houston-based independent energy company that focuses its exploration, production and marketing activities in selected onshore basins of the United States. At June 30, 2009, the Company's balance sheet showed total assets of $264,030,000, total liabilities of $252,492,000 and stockholders' equity of $11,538,000. The Company has retained Akin Gump Strauss Hauer and Feld as legal counsel, and Parkman Whaling LLC as financial advisor. Kurtzman Carson Consultants LLC serves as claims and notice agent. EDGE PETROLEUM: Gets Delisting Notice From Nasdaq Stock Market -------------------------------------------------------------- Edge Petroleum Corporation has received notice from The Nasdaq Stock Market that the company's common stock and 5.75% series A cumulative convertible perpetual preferred stock will be delisted from the Exchange at the opening of business on October 13, 2009 pursuant to the Exchange's Listing Rules 5100, 5110(b) and IM- 5100-1, and a Form 25-NSE will be filed with the Securities and Exchange Commission, which will remove the Company's securities from listing and registration on the Exchange. According to the Notice, the determination to delist the Company's securities was based on (i) the announcement by the Company on October 2, 2009 that it and each of its subsidiaries have filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code and the associated public interest concerns raised by such bankruptcy petitions; (ii) concerns regarding the residual equity interest of the existing listed securities holders; and (iii) concerns about the Company's ability to sustain compliance with all requirements for continued listing on the Exchange. The Company may appeal the Exchange's determination to a Hearings Panel, pursuant to the procedures set forth in the Exchange's Listing Rule 5800 Series. However, the Company does not intend to take any further action to appeal the Exchange's decision, and therefore it is expected that the Company's securities will be delisted and trading suspended at the opening of business on October 13, 2009. If the Company does not appeal the Exchange's decision, the Company's securities will not be immediately eligible to trade on the OTC Bulletin Board or in the "Pink Sheets." The Company's securities may become eligible if a market maker makes application to register in and quote the security in accordance with SEC Rule 15c2-11, and such application is cleared. About Edge Petroleum Edge Petroleum Corporation (Nasdaq:EPEX) (Nasdaq:EPEXP) is a Houston-based independent energy company that focuses its exploration, production and marketing activities in selected onshore basins of the United States. At June 30, 2009, the Company's balance sheet showed total assets of $264,030,000, total liabilities of $252,492,000 and stockholders' equity of $11,538,000. Edge Petroleum filed for Chapter 11 on October 2, 2009 (Bankr. S.D. Tex. Case No. 09-20644). The Company has retained Akin Gump Strauss Hauer and Feld as legal counsel, Jordan, Hyden, Womble, Culbreth & Holzer, P.C., as local counsel, and Parkman Whaling LLC as financial advisor. Kurtzman Carson Consultants LLC serves as claims and notice agent. ELECTRIC MACHINERY: Wins $6.3 Judgment Against Hunt Construction ---------------------------------------------------------------- In connection with the construction of the Orange County Convention Center in Orlando, Florida, located north of Disney World and in between Universal Studios and Sea World, Electric Machinery Enterprises, Inc., sued Hunt Construction Group, Inc., The Clark Construction Group, Inc., and Construct Two Construction Managers, Inc. (Bankr. M.D. Fla. Adv. Pro. No. 03-00811). Based on the evidence adduced in the course of a 39-day trial, Judge Williamson entered a $6,376,000 judgment against Hunt Construction Group, plus interest, attorneys' fees, and costs. See In re Electric Machinery Enterprises, Inc., --- B.R. ----, 2009 WL 2710266 (Bankr. M.D. Fla.). Based in Tampa, Florida, Electric Machinery Enterprises, Inc., filed for Chapter 11 protection on May 29, 2003 (Bankr. M.D. Fla. Case No. 03-11047). The Debtor filed a Chapter 11 plan in September 2003 premised on a transaction with EarthFirst Technologies. Electric Machinery's Chapter 11 filing was precipitated by an adverse court decision on a disputed construction contract. The dispute has been resolved pursuant to Electric Machinery's Plan of Reorganization. ENERGY PARTNERS: Has New Hedging Program Following Emergence ------------------------------------------------------------ Energy Partners, Ltd., has established its first hedging program following its emergence from Chapter 11 bankruptcy proceedings with the purchase of crude oil floors and the placement of swap contracts that cover the period from October 2009 to December 2011. The recently completed commodity risk management program has met the conditions of the hedging requirements under the Company's credit facility. The volumes hedged in the fourth quarter of 2009 average approximately 2,788 barrels of oil (bbl) per day, representing approximately 58% to 70% of that quarter's estimated oil production. The majority of the volume hedged in the fourth quarter 2009 is in the form of puts with a floor of $60/bbl. For full year 2010 and 2011, the total volume hedged averages approximately 2,722 bbls per day, of which the majority is comprised of swaps with an average NYMEX price of $70.02/bbl. Founded in 1998, Energy Partners, Ltd. -- http://www.eplweb.com -- is an independent oil and natural gas exploration and production company based in New Orleans, LA and Houston. The company's operations are primarily located in the Gulf of Mexico shelf. 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 effort. The Debtors also tapped 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. Energy Partners' reorganization plan became effective September 21, 2009. ESTATE FINANCIAL: Former Executives Plead Guilty of Fraud --------------------------------------------------------- KSBY reports that Karen Guth and Joshua Yaguda, the former executives of Estate Financial, Inc., pled guilty to 26 felony counts of fraud. According to KSBY, Ms. Guth and Mr. Yaguda are accused of mishandling more than $300 million dollars of investors' money, and the court is recommending a prison sentence of eight years for Mr. Yaguda and 12 years for Ms. Guth. Estate Financial, Inc., is a California corporation formed in 1991 for the purpose of brokering loans secured by deeds of trust on real property located primarily in California. On June 25, 2008, five creditors filed a petition to force Estate Financial into Chapter 11 bankruptcy protection. FAIRPOINT COMMUNICATIONS: Windstream Communications May Buy Debt ---------------------------------------------------------------- Rural carrier Windstream Communications may be buying FairPoint Communications debt, Josh Kosman at The New York Post reports, citing a person familiar with the matter. The NY Post notes that if Windstream, with 3.2 million access lines and a big Florida and Georgia presence, acquires FairPoint, with 1.7 million entry points, it would become one of the country's biggest phone carriers. According to The NY Post, big traders like John Paulson and Angelo Gordon already bought large positions in the bank debt of the Company, tangling with Drexel Burnham Lambert alum Lawrence Post, who has a significant FairPoint bond position through his Post Advisory Group. FairPoint Communications, Inc. (NYSE: FRP.BC) -- http://www.fairpoint.com/-- provides communications services to communities across the country. FairPoint owns and operates local exchange companies in 18 states offering advanced communications with a personal touch, including local and long distance voice, data, Internet, television and broadband services. As of June 30, 2009, Fairpoint reported $3.24 billion in total assets, $321.41 million in total current liabilities, $2.91 billion in total long-term liabilities, and $1.23 million in total stockholders' equity. The TCR reported on October 1, 2009, that Moody's Investors Service downgraded FairPoint Communications, Inc.'s corporate family rating to Caa3 from Caa2. According to the TCR on October 5, 2009, Standard & Poor's Ratings Services said it lowered the corporate credit and senior secured debt ratings on Charlotte, North Carolina-based local telephone provider FairPoint Communications Inc. to 'D' from 'CC', and lowered the unsecured debt rating on the company's cash pay unsecured notes to 'D' from 'C'. FLYING J: Court Extends Exclusive Plan Filing Period until Nov. 29 ------------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Delaware extended until Nov. 29, 2009, Flying J Inc. and its debtor-affiliates' exclusive period to file a Chapter 11 plan. The Court also extended until Jan. 28, 2010, the Debtors' exclusive period to solicit votes to approve a Chapter 11 plan. Based in Ogden, Utah, Flying J Inc. -- http://www.flyingj.com/-- is among the 20 largest private companies in America, with 2007 sales exceeding $16 billion. The fully integrated oil company employs approximately 14,700 people in the U.S. and Canada through its interstate operations, transportation, refining and supply, exploration and production, as well as its financial services and communications, divisions. Flying J and six of its affiliates filed for bankruptcy on December 22, 2008 (Bankr. D. Del. Lead Case No. 08-13384). Flying J sought Chapter 11 protections after a precipitous drop in oil prices and disruption in the credit markets brought to bear significant short-term pressure on the company's liquidity position. Attorneys at Kirkland & Ellis LLP represent the Debtors as counsel. Young, Conaway, Stargatt & Taylor LLP is the Debtors' Delaware Counsel. Blackstone Advisory Services L.P. is the Debtors' investment banker and financial advisor. Epiq Bankruptcy Solutions LLC is the Debtors' notice, claims and balloting agent. In its formal schedules submitted to the Bankruptcy Court, Flying J listed assets of $1,433,724,226 and debts of $640,958,656. An official committee of unsecured creditors has been appointed in the case. Pachulski Stang Ziehl & Jones LLP has been tapped as counsel for the creditors' panel. FLYING J: Gets Court's Final Approval to Obtain DIP Financing ------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware authorized, on a final basis, Flying J Inc. and its debtor-affiliates to: (a) obtain postpetition financing; and (b) grant adequate protection in the form of liens and superpriority claims to its secured lender. The Court also approved the employment of Blackstone Advisory Services L.P., as investment banker and financial advisor. Based in Ogden, Utah, Flying J Inc. -- http://www.flyingj.com/-- is among the 20 largest private companies in America, with 2007 sales exceeding $16 billion. The fully integrated oil company employs approximately 14,700 people in the U.S. and Canada through its interstate operations, transportation, refining and supply, exploration and production, as well as its financial services and communications, divisions. Flying J and six of its affiliates filed for bankruptcy on December 22, 2008 (Bankr. D. Del. Lead Case No. 08-13384). Flying J sought Chapter 11 protections after a precipitous drop in oil prices and disruption in the credit markets brought to bear significant short-term pressure on the company's liquidity position. Attorneys at Kirkland & Ellis LLP represent the Debtors as counsel. Young, Conaway, Stargatt & Taylor LLP is the Debtors' Delaware Counsel. Blackstone Advisory Services L.P. is the Debtors' investment banker and financial advisor. Epiq Bankruptcy Solutions LLC is the Debtors' notice, claims and balloting agent. In its formal schedules submitted to the Bankruptcy Court, Flying J listed assets of $1,433,724,226 and debts of $640,958,656. An official committee of unsecured creditors has been appointed in the case. Pachulski Stang Ziehl & Jones LLP has been tapped as counsel for the creditors' panel. FONTAINEBLEAU LV: To Have Examiner at Judge's Behest ---------------------------------------------------- Fontainebleau Las Vegas LLC will be investigated by an examiner at the order of U.S. Bankruptcy Judge A. Jay Cristol. Judge Cristol called for an examiner after concluding the parties "are not cooperating with one another." Judge Cristol is pushing for a quick sale of the stalled, partially completed $2.9 billion casino resort on the Las Vegas Strip. Citing the lack of progress in reorganizing Fontainebleau's debt and a motion by key lenders that the Project be liquidated, Judge Cristol ordered Fontainebleau attorneys on Thursday to appear at a hearing next Wednesday to show cause why an examiner should not be appointed. He proposed the appointment of an examiner without being requested to do so and on his own initiative According to Judge Cristol, selling the project makes more sense than converting the case from a Chapter 11 reorganization to a Chapter 7 liquidation and appointing a trustee to supervise a sale, as proposed by the lenders. A hearing on the Chapter 7 conversion is set for Oct. 28. "The court believes it is more expeditious to proceed with any potential sale as soon as possible rather than to wait until Oct. 28, when a trustee, if appointed, would be required to expend a significant amount of time to obtain counsel, familiarize himself or herself with this case and effectuate a sale," Judge Cristol said in his order, reports the Las Vegas Sun. "It also appears more economical to immediately appoint an examiner than to appoint a trustee whose fees and expenses would likely far exceed the costs and expenses of an examiner. The court therefore believes it is in the best interest of the estate and all parties to appoint an examiner at this time to examine, negotiate and supervise a sale of debtors' assets." Judge Crystol said, "The Term Lender Steering Group submits that completion of the Las Vegas project is not possible and a sale of the project to a third party and liquidation of the remaining assets is the only viable course to realize any meaningful value for the creditors . . . The debtors have indicated they have made efforts to arrange a sale of the Las Vegas project, but the Term Lenders appear to be concerned about a possible conflict of interest and accordingly filed the motion to convert." About Fontainebleau Las Vegas Fontainebleau Las Vegas Holdings, LLC -- http://www.fontainebleau.com/-- is constructing a luxury resort, Fontainebleu Las Vegas, on the northern end of the Las Vegas Strip. Fontainebleau Las Vegas Holdings, LLC, Fontainebleau Las Vegas, LLC, Fontainebleau Las Vegas Capital Corp. filed for Chapter 11 protection on June 9, 2009 (Bankr. S.D. Fla. Lead Case No. 09-21481). Judge A. Jay Cristol presides over the Debtors' cases. Scott L Baena, Esq., at Bilzin Sumberg Baena Price & Axelrod LLP, represents the Debtors in their restructuring efforts. The Debtors' Financial Advisor are Moelis & Company LLC and Citadel Derivatives Group LLC. The Debtors' Special Litigation Counsel is David M. Friedman, Esq., at Kasowitz, Benson, Torres & Friedman LLP and the Debtors' Special Counsel is Jack J. Kessler, Esq., and Alan Rubin, Esq., at Buchanan Ingersoll & Rooney PC. The Debtors' Claims Agent is Kurtzman Carson Consulting LLC. Attorneys at Genovese Joblove & Battista, P.A., and Fox Rothschild, LLP, represent the Official Committee of Unsecured Creditors. As of June 9, 2009, Fontainebleau Las Vegas LLC listed more than $1 billion in debt and a similar amount in assets, while each of Fontainebleau Las Vegas Capital Corp. and Fontainebleau Las Vegas Holdings, LLC, listed less than $50,000 in assets and more than $1 billion in debts. Bankruptcy Creditors' Service, Inc., publishes Fontainebleau Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Fontainebleau Las Vegas Holdings, LLC, and its debtor- affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) FORD MOTOR: September Sales Off 6% as Cash For Clunkers Ended ------------------------------------------------------------- Ford Motor Company said in a statement that September sales were 6% lower than a year ago. This followed a 2% increase in July and a 17% increase in August, marking the first time in four years that Ford is reporting a quarterly sales increase. Ford said the rise in sales in July and August offset September's 6% post-Cash for Clunkers decline in the quarter. Ford, Lincoln and Mercury third quarter sales were 5% higher than a year ago in the U.S., making Ford the only full-line manufacturer to report a sales increase in the period. Ford estimates it gained over 2 points of market share versus last year in September and the third quarter. September marked the 11th time in the last 12 months Ford has gained retail market share. "Our balanced new lineup of high-quality, fuel-efficient products helped us navigate through an exceptional period in industry sales," said Ken Czubay, Ford vice president, U.S. Marketing, Sales and Service. "With its volatile sales peaks and valleys and dramatic segment shifts, the third quarter was a great test of our One Ford Plan - building a range of vehicles from small cars to hard-working trucks." Other automakers also reported lower sales. Nissan Motor Co. said September sales were off 7% from last year. Toyota Motor Co. reported 13% lower sales. About Ford Motor Based in Dearborn, Michigan, Ford Motor Company (NYSE: F) -- http://www.ford.com/-- manufactures or distributes automobiles across six continents. With about 201,000 employees and about 90 plants worldwide, the company's automotive brands include Ford, Lincoln, Mercury and Volvo. The company provides financial services through Ford Motor Credit Company. The Company has operations in Japan in the Asia Pacific region. In Europe, the Company maintains a presence in Sweden, and the United Kingdom. The Company also distributes its brands in various Latin-American regions, including Argentina and Brazil. * * * Ford Motor carries a 'Caa1' corporate family rating, with stable outlook, and speculative grade liquidity rating of SGL-3 from Moody's Investors Service. Ford Motor's CFR was upgraded from 'Caa3' to 'Caa1' in September 2008. FORD MOTOR: Surpasses September Market Surge in U.K. ---------------------------------------------------- Ford car sales were up by over 22% in September, compared with the same month in 2008. This is twice the size of the market increase after a busy month of new "59" plate and "scrappage" registrations. Over 54,500 new cars left Ford dealerships -- 22.2% more than during September 2008. The market leader, Ford, took 14.8% of all car sales and 15.7% of the total UK vehicle market last month once commercial vehicle registrations are factored in. In either case, Ford's share is around a percentage point higher than a year ago. September's top selling car in the UK was the Ford Fiesta -- the seventh time the model has topped the monthly sales charts in 2009. For the year to date, the Ford Fiesta is the UK's top seller with the Ford Focus at number two. Ford's 2009 success, with its stylish and affordable car and commercial vehicle ranges, means that so far this year the Blue Oval brand accounts for more than one in seven new vehicle sales. While the scrappage scheme has added over 22,700 Ford registrations since its launch in May, sales of Ford Fiesta and Ford Kuga models have increased for the full year to date period compared with last year, despite the weaker market. In fact, compared with 2008, the Ford Fiesta has added over 18,000 sales during this period, raising its share of the UK car market from 4.1% to 6.1%. For the year to date, Ford has increased its share of the UK car market by 1.7 percentage points to 16.4%, compared to the same period in 2008, while its share of the total UK vehicle market is 1.2 percentage points higher at 17.3%. Nigel Sharp, Ford Britain managing director, said: "September is of course a very important month for the British car market. As market leader, we expect to do well, but for us to have achieved a sales increase that was twice as big as the overall market growth proves that, once again, the twin strengths of our new and exciting product range and our tremendous dealer network have enabled us to increase our market share. The importance of the government's scrappage scheme, not least for the automotive supplier base, has been well documented, and we welcome its extension because the underlying level of demand remains weak. In this context, it is gratifying to note that the SMMT have increased their estimate for full year sales for the UK to 1.825 million units (compared with 2.132 million sales in 2008)." About Ford Motor Based in Dearborn, Michigan, Ford Motor Company (NYSE: F) -- http://www.ford.com/-- manufactures or distributes automobiles across six continents. With about 201,000 employees and about 90 plants worldwide, the company's automotive brands include Ford, Lincoln, Mercury and Volvo. The company provides financial services through Ford Motor Credit Company. The Company has operations in Japan in the Asia Pacific region. In Europe, the Company maintains a presence in Sweden, and the United Kingdom. The Company also distributes its brands in various Latin-American regions, including Argentina and Brazil. * * * Ford Motor carries a 'Caa1' corporate family rating, with stable outlook, and speculative grade liquidity rating of SGL-3 from Moody's Investors Service. Ford Motor's CFR was upgraded from 'Caa3' to 'Caa1' in September 2008. FREDDIE MAC: CEO Gets Green Light to Name President or COO ---------------------------------------------------------- Effective October 9, 2009, the Bylaws of Freddie Mac (formally known as the Federal Home Loan Mortgage Corporation) were amended to authorize the Chief Executive Officer to appoint a President or Chief Operating Officer, subject to prior review by the Chairman of the Board and, if the Chairman deems it appropriate, by the full Board. Previously, Section 5.2 of the company's Bylaws provided for the Board of Directors to elect, if the positions were to be filled, the President and the Chief Operating Officer. Section 5.2, as amended, is set forth in its entirety: "Section 5.2 Appointment and Term. The Board of Directors shall elect the Chief Executive Officer. The Audit Committee of the Board of Directors shall elect the Senior Vice President - General Auditor. Except as otherwise determined by the Board of Directors, the Chief Executive Officer shall appoint all additional officers; provided, however, that the appointment of a Chief Compliance Officer or a Chief Enterprise Risk Officer shall be subject to the approval of the Board of Directors, and the appointment of a President and/or Chief Operating Officer, if one or both of such positions are to be filled, shall be subject to prior review by the Chairman of the Board of Directors and, if the Chairman so determines, by the Board of Directors. Any appointment by the Chief Executive Officer under this section is subject to the legal, regulatory or supervisory limitations, requirements and approvals that apply to appointments by the Board of Directors. Each officer elected by the Board of Directors or appointed by the Chief Executive Officer shall hold office until his or her successor is elected or appointed and qualified or until his or her death, resignation or removal as provided in this Article 5. Election or appointment of an officer shall not, in and of itself, create any contract rights in the officer against the Corporation. The Federal Home Loan Mortgage Corporation (FHLMC) NYSE: FRE -- http://www.freddiemac.com/-- commonly known as Freddie Mac, is a stockholder-owned government-sponsored enterprise authorized to make loans and loan guarantees. Freddie Mac was created in 1970 to provide a continuous and low cost source of credit to finance America's housing. Freddie Mac conducts its business primarily by buying mortgages from lenders, packaging the mortgages into securities and selling the securities -- guaranteed by Freddie Mac -- to investors. Mortgage lenders use the proceeds from selling loans to Freddie Mac to fund new mortgages, constantly replenishing the pool of funds available for lending to homebuyers and apartment owners. Conservatorship As reported by the Troubled Company Reporter, the U.S. government took direct responsibility for Fannie Mae and Freddie Mac, placing the government sponsored enterprises under conservatorship on September 7, 2008. James B. Lockhart, director of Federal Housing Finance Agency, said that Fannie Mae and Freddie Mac share the critical mission of providing stability and liquidity to the housing market. Between them, the Enterprises have $5.4 trillion of guaranteed mortgage-backed securities (MBS) and debt outstanding, which is equal to the publicly held debt of the United States. Among the key components of the conservatorship, the FHFA, as conservator, assumed the power of the Board and management. GENERAL MOTORS: New GM Draws Progress in Business Plan ------------------------------------------------------ General Motors outlined progress it has made toward achieving commitments in its business plan, including implementing a leaner structure, building stronger brands, and driving a company culture that puts the customer at the center of everything it does. Since launching the new company on July 10, GM has made demonstrable progress in positioning the company for success; putting in place a new global operating structure, a leaner and more streamlined executive leadership team, and a reconstituted Board of Directors. Emerging is a new GM with a cleaner balance sheet, fewer employees, an improved cost structure, a stronger dealer network, and streamlined global operations. Most importantly, the company has successfully launched new vehicles around the world that are performing especially well in their respective markets. "Over the past ninety days since we created the new GM, we've already launched a number of new, fuel-efficient, highly successful cars and crossovers; introduced a new marketing campaign that highlights our best-in-class fuel economy, quality, warranty and safety performance; sworn in a new Board of Directors; and overhauled our management," said GM President and CEO Fritz Henderson. "We are taking aggressive actions and moving quickly to transform our culture into one that is truly customer focused," Henderson said. New Vehicle Launches Perform Especially Well Consumer reaction to GM's newest vehicles is very positive. In the U.S., newly launched vehicles, including the Chevrolet Equinox, Cadillac SRX, Buick LaCrosse, GMC Terrain and Chevrolet Camaro all exceeded sales expectations in September. September year-over-year sales of the all-new Chevrolet Equinox are up 94 percent, and the all-new Cadillac SRX sales are up 105 percent compared with August. Additional marketplace recognition came from the recent naming of three GM brand cars, Buick LaCrosse, Cadillac CTS Sport Wagon and Chevrolet Camaro, and two GM brand trucks, Cadillac SRX and Chevrolet Equinox, to the short list of nominees in the North American Car/Truck of the Year competition. The winners in each category will be announced at the North American International Auto Show in January. To help spur demand, in early September, GM launched a new advertising campaign titled "May the Best Car Win," which reinforces the company's confidence in design excellence and award-winning vehicle quality. Edmunds.com reports brand interest in GM vehicles is up approximately 11 percent since the campaign launched. In other world markets, the Daewoo Matiz Creative was launched in South Korea last month and has helped to double GM's market share in the mini segment in that country within the first three weeks of sale. Demonstrating the strength of GM's new global small car, since its introduction to the Australia market in late June, the all new Holden Cruze has become one of the country's top 10 selling nameplates. The Chevrolet Agile is now launching in Brazil and Argentina, and initial receptivity by consumers and media is positive. In Europe, the new Opel Astra, introduced at the Frankfurt Motor Show, is ramping up production. The Astra is expected to perform well as a complement to the award-winning Insignia. Chevrolet Volt Remains on Track The Chevrolet Volt extended-range vehicle remains on track to begin production in late 2010. To date, more than 80 pre- production Volts have been built and are being road-tested. GM also recently announced a $43 million investment in Brownstown Township, Mich. to manufacture the required lithium-ion battery packs. Improved Sales Performance GM's preliminary global market share in the third quarter was 11.9 percent, up 0.3 percentage points from 11.6 percent share in the first half of the year, compared to 12.4 percent in 2008. The company's U.S. market share was 19.5 percent in the third quarter, consistent with the first half of the year. U.S. market share in 2008 was 22.1 percent. Most recently, GM's September share was 20.6 percent, one of the highest months in 2009, showing that the company's strong new launch products are capturing consumer interest. The four core brands accounted for more than 90 percent of GM's September U.S. sales. As of September 30, dealer inventory was 424,000 units with 81 days supply, down from 582,000 and 99 days supply at the end of the second quarter. Going forward, production will continue to be aligned tightly with demand. GM is increasing fourth quarter North America production to help rebuild the supply of vehicles in high customer demand. Rationalizing Manufacturing GM has continued consolidating manufacturing operations while maintaining the flexibility to meet market demand. Third quarter 2009 production was 533,000 vehicles, compared to a fourth quarter production forecast of approximately 655,000, or a 23 percent increase. The company added approximately 60,000 units into the third and fourth quarter North America production schedules to meet growing consumer demand. Shifts have been added at CAMI, which produces the Chevrolet Equinox and GMC Terrain, and the Lordstown Complex, which produces the Chevrolet Cobalt. Additionally, third shifts will be added early next year at three plants to increase production of in-demand vehicles. In the last 90 days, Pontiac Assembly and Wilmington Assembly both have ceased operation, as part of the previously announced plan to reduce operating plants in the U.S. By year-end 2009, GM will have reduced the number of operating plants in the U.S. to 41, down from 47 in 2008, excluding the component plants recently acquired from Delphi. Dealer Consolidations Continue As previously announced, GM is consolidating U.S. dealers through wind-down agreements, including Pontiac and Saturn dealerships. The company continues to work toward a more competitive dealer distribution structure, with approximately 5,800 dealers at the end of the third quarter, down from approximately 6,375 dealers at the end of 2008. Even after the dealership consolidation is completed in 2010, GM will have more dealerships serving customers than any competitor in the U.S. Workforce Reductions In the U.S., GM reduced its workforce from approximately 29,700 salaried at the end of 2008 to approximately 24,300 salaried as of October 7, 2009, or 18.2 percent. GM's hourly employment has been reduced from approximately 62,000 people to 49,200 people in the same time period, or 21 percent. Expanding International Operations In the Asia Pacific region, General Motors India and Reva Electric Car Company entered into a collaboration agreement and have begun feasibility studies to jointly develop electric vehicles for the Indian market. The agreement will accelerate GM's progress toward meeting future electric vehicle needs in markets around the world. GM also recently announced the establishment of its China Science Lab in Shanghai. This facility will conduct important research projects and is expected to contribute to worldwide technological innovation. The Lab's initial focus will be on research related to advanced propulsion technology. The China Science Lab is GM's eighth research facility. Also in China, GM China and China FAW Group recently created FAW- GM Light Duty Commercial Vehicle Co. Ltd. to produce and sell light-duty trucks and vans. The 50-50 joint venture will also engage in research and development, exports and aftersales support. In Brazil, GM do Brasil opened a new, expanded technical center in Sao Paulo. The Center employs more than 2,000 engineers and designers to develop new vehicles. It is the largest automotive technical center in Latin America. Asset Sales Near Completion GM continues to work toward closing the sale of the Hummer and Saab brands. The company has made further progress on agreements and necessary regulatory approvals for the sale of Hummer to Sichuan Tengzhong Heavy Industrial Machinery Co. Ltd., and has reached agreement with Koenigsegg Group AB to purchase Saab. GM also is working to close the sales transaction of a majority stake in Opel/Vauxhall. Opel/Vauxhall operations will be 55 percent owned by Magna International and Sberbank; 10 percent by employees; and the balance retained by GM. Delphi As part of the resolution to the Delphi bankruptcy, GM recently acquired Delphi's global steering business and four key U.S. sites. In addition, the Pension Benefit Guaranty Corporation is assuming Delphi's pensions covering 70,000 Delphi workers and retirees, while GM will provide benefits to a limited group of Delphi hourly employees and retirees. These agreements were finalized on October 6. Looking Ahead - Key GM Priorities Leading into 2010, GM will continue to focus on its customers, cars and culture. The company will continue to promote its full range of vehicles with special attention paid to new launches, while emphasizing its brands in-market, and allocating resources to improve consumer consideration of GM vehicles. GM will maintain an intense focus on business performance, improving cash flow and EBIT. Additionally, the company will work to grow the revenue line through stabilization of market share in the U.S. and growth in important markets like China and India. As a newly created entity, GM is continuing to implement "fresh-start" reporting, which encompasses the determination of the fair value of its assets and liabilities, by March 31, 2010. The company is also continuing to prepare for an IPO as soon as practical. While significant progress has been made since the new company emerged, challenges still remain. These include uncertainty in the rate of recovery of the U.S. economy and the auto industry, the company's ability to continue rebuilding consumer purchase consideration and completing the remaining structuring actions. "We've made a lot of progress in 90 days, but we don't think for a second that we can begin to ease off the accelerator," Mr. Henderson said. "We have been granted an extraordinary second chance to reinvent this company. We are driving hard to change the way we interact with our customers, to ensure our new cars and trucks are the best in their segment, and to change the way we operate and how think about the business. We need to prove ourselves every day, and we will." About General Motors Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- as 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). 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. 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, serves as the Chief Executive Officer for Motors Liquidation Company. 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. Bankruptcy Creditors' Service, Inc., publishes General Motors Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Motors Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). GENERAL MOTORS: Old GM Expects to Liquidate by Mid 2010 ------------------------------------------------------- Al Koch, chief restructuring officer of Motors Liquidation Company, formerly General Motors Corporation, is embarking on a plan to liquidate the "Old GM" by mid of 2010 and to seek approval from the U.S. Bankruptcy Court for the Southern District of New York to distribute Old GM's holdings of "New GM" stock and warrants to unsecured creditors, Emily Chasan of Reuters.com reported on October 1. "The assets that I have and that my team has to liquidate are pretty challenging," Mr. Koch said in comments to the Reuters Restructuring Summit in New York, noting that completing most of the liquidation process could take another five years, Ms. Chasan said. "The properties that we have to dispose of are so large, that it's going to be very difficult to find users for them, and many of them have some environmental remediation that's required," Mr. Koch continued. Mr. Koch anticipates at least $30 billion in creditors' claims against Motors Liquidation Co., which has about 200 properties, of which about 100 are leased to the "New GM" for its current use, but will eventually revert back to the old company. Motors Liquidation, however, expects to have difficulty finding buyers for its assets, Mr. Koch said, adding that many properties are expected to be repurposed. Any funds the company recovers from the liquidation are likely to flow back to the government, which extended approximately $50 billion to bail GM out through Bankruptcy. About General Motors Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- as 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). 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. 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, serves as the Chief Executive Officer for Motors Liquidation Company. 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. Bankruptcy Creditors' Service, Inc., publishes General Motors Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Motors Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). GENERAL MOTORS: Old GM Further Amends Wind-Down Loan Facility ------------------------------------------------------------- Motors Liquidation Company, formerly General Motors Corporation, and its debtor affiliates, notified Judge Robert E. Gerber of the U.S. Bankruptcy Court for the Southern District of New York, that on September 29, 2009, they entered into the second amendment to the Amended and Restated DIP Facility with the U.S. Department of the Treasury and Export Development Canada as lenders and certain domestic subsidiaries of the Debtors as guarantors. The DIP Facility, dated July 10, 2009, was first amended to include the DIP Lenders' agreement to provide a facility up to $950 million to finance working capital needs and other general corporate purposes incurred in connection with the Wind-Down, including the payment of expenses associated with the administration of the Chapter 11 cases. On July 29, 2009, a first amendment to the Amended and Restated DIP Facility was made to essentially reflect that, among other things, the securities issued by the United States government may have maturities of two years or less from the date of acquisition. According to Steve Karotkin, Esq., at Weil Gotshal & Manges LLP, in New York, the Second Amendment constitutes "ministerial and technical changes to the DIP Credit Facility," including: (1) deletion from the definition of "Interest Period" the phrase "(i) initially, the period commencing on the Borrowing Date, as defined in the Existing Credit Agreement, with respect to the Loan and ending three months thereafter," and replacement with "(i) initially, the period commencing on July 10, 2009 and ending three months thereafter;" (2) replacement of the list of the Credit Agreement Guarantors, to include: * MLC of Harlem, Inc. * Environmental Corporate Remediation Company, Inc. * Remediation and Liability Management Company, Inc. * MLCS, LLC * MLCS Distribution Corporation (3) replacement of the list of the Credit Agreement Pledgors, to include: * Motors Liquidation Company * MLCS, LLC * MLCS Distribution Corporation (4) amendments to Schedules 1.1G, 3.10, 3.15, 3.16, 3.21 and 3.28 to the Credit Agreement, which the Debtors did not specifically disclose; and (5) acknowledgment and agreement between the Borrower and the Lenders that the aggregate amount of interest accrued as of September 1, 2009, on the loans pursuant to the DIP Facility -- amounting $1,175,000,000 for the period from July 10 to September 1, at Eurodollar interest rate plus applicable margin of 5% -- is $8,812,500 Mr. Karotkin adds that the Second Amendment to the Amended and Restated DIP Facility will become effective upon the date on which each Lender will have received: -- the Second Amendment executed and delivered by a duly authorized officer of the Borrower and the Required Lenders; and -- the Acknowledgement and Consent executed and delivered by the duly authorized officers of the Guarantors and Pledgors. The Borrower also makes these representations and warranties to each Lender as of the Second Amendment Effective Date, or before and after giving effect to the Second Amendment: (a) Each Loan Party has all necessary corporate or other power, authority and legal right to execute, deliver and perform its obligations under this Amendment and the Acknowledgment and Consent to which it is a party. The execution, delivery and performance by each Loan Party of the Amendment, as well as the Acknowledgment and Consent to which it is a party, has been duly authorized by all necessary corporate or other action on its part. Similarly, the Second Amendment, and the Acknowledgment and Consent have been duly and validly executed and delivered by each Loan Party and constitutes a legal, valid and binding obligation, and is enforceable against all of the Loan Parties. No authorizations, approvals or consents of, and no filings or registrations with, any governmental authority are necessary for the execution, delivery or performance by each Loan Party of the Second Amendment. (b) The execution and delivery of the Second Amendment will not: * conflict with or result in a breach of (i) the charter, by laws, certificate of incorporation, operating agreement or similar organizational document of any Loan Party, (ii) any requirement of law, (iii) any applicable law, rule or regulation, or any order, writ, injunction or decree of any Governmental Authority, (iv) any material Contractual Obligation; or * constitute a default under any material Contractual Obligation; or * except for Permitted Liens under the DIP Facility, result in the creation or imposition of any Lien upon any property of any Loan Party. (c) Each of the representations and warranties made by the Borrower pursuant to the Loan Documents is true and correct in all material respects on and as of the Second Amendment Effective Date, as if made on and as of that Date. (d) No Default or Event of Default has occurred and is continuing, or will result from the consummation of the transactions contemplated by the Second Amendment. A full-text copy of the second amendment to the Amended and Restated DIP Facility is available for free at: http://bankrupt.com/misc/GMAmendedDIP_2ndAmendment.pdf About General Motors Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- as 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). 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. 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, serves as the Chief Executive Officer for Motors Liquidation Company. 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. Bankruptcy Creditors' Service, Inc., publishes General Motors Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Motors Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). GENERAL MOTORS: Old GM Proposes Claims Settlement Procedure ----------------------------------------------------------- Rule 3007(c) of the Federal Rules of Bankruptcy Procedure prohibits Motors Liquidation Company, formerly general Motors Corporation, and its debtor-affiliates from filing a single objection to multiple proofs of claims filed in their Chapter 11 cases, "[u]nless otherwise ordered by the court or permitted by subdivision." Bankruptcy Rule 3007(e) also provides that a debtor may file an omnibus objection for up to 100 claims that (i) duplicate other claims, (ii) have been filed in the wrong case, (iii) have been amended by subsequently filed proofs of claim, (iv) were not timely filed, (v) have been satisfied or released during the bankruptcy cases, (vi) were presented in a form that does not comply with applicable rules, (vii) are interests, rather than claims; or (viii) assert priority in an amount that exceeds the maximum amount under Section 507 of the Bankruptcy Code. The Debtors anticipate that although they will object to a number of the Claims on the grounds that Claims are either duplicative or have been satisfied, they will also object to many Claims on additional grounds not set forth in Bankruptcy Rule 3007(d), Harvey R. Miller, Esq., at Weil, Gotshal & Manges LLP, in New York, relates. Accordingly, the Debtors sought and obtained authority from Robert E. Gerber of the United States Bankruptcy Court for the Southern District of New York to file Omnibus Claims Objections to no more than 100 claims in a single motion on these Additional Permitted Grounds: (a) the amount asserted by the claims contradicts the Debtors' books and records; (b) the Claims were incorrectly classified; (c) the Claims seek recovery of amounts for which the Debtors are not liable; (d) the Claims do not include sufficient documentation to ascertain the validity of the Claim; and (e) the Claims are objectionable under Section 502(e)(1) of the Bankruptcy Code. The Debtors will comply with Bankruptcy Rule 3007 in all other respects, including that each Omnibus Claims Objection will: -- state that claimants receiving the objection should locate their names and claims in the objection; -- list claimants alphabetically, provide a cross-reference to claim numbers, and, if appropriate, list claimants by category of claims; -- state the grounds of the objection to each Claim and provide a cross-reference in the omnibus objection pertinent to the stated grounds; -- state the identity of the objector and the grounds for the objections; -- be numbered consecutively with other omnibus objections filed by the same objector; and -- contain objections to no more than 100 Claims. According to Mr. Miller, preparing and filing individual pleadings for each objection not specifically set forth in Bankruptcy Rule 3007(d) would be a time consuming and costly process. Hence, he says, objecting to multiple Claims in an omnibus fashion on grounds other than those set forth in Bankruptcy Rule 3007(d) will ease the administrative burden on the Court and the administrative and financial burden on the Debtors' estates during the claims reconciliation process. Moreover, allowing the Debtors to file Omnibus Claims Objections to no more than 100 Claims at a time on the Additional Permitted Grounds is not likely to prejudice the rights of creditors. In fact, it may enhance the rights of creditors by not only preserving the value of the Debtors' estates ultimately available for distribution but also expediting when creditors will be paid, Mr. Miller points out. Claims Settlement Procedures The Debtors also anticipate a large number of objections to the Claims can be settled for relatively small amounts when compared with the overall value of the Debtors' estates. To spare the Debtors' estates of expense, delay and uncertainty that otherwise would be associated with litigating the Claims, the Debtors will establish these Claims Settlement Procedures: (1) The Debtors will settle any and all Claims asserted against them without prior approval of the Court or any other party-in-interest whenever (i) the aggregate amount to be allowed for an individual Claim -- the Settlement Amount -- is less than or equal to $1 million; or (ii) the Settlement Amount is within 10% of the non-contingent, liquidated amount listed on the Debtors' schedules of assets and liabilities, so long as the difference in amount does not exceed $1 million. The De Minimis Settlement Amounts will not include (x) any settlement of a Claim to which General Motors Company is a party or beneficiary or any present or former insider of the Debtors is a party, or (y) any settlement of a Claim that includes a release by any of the Debtors of a claim they may have against a creditor pursuant to Chapter 5 of the Bankruptcy Code. (2) If the Settlement Amount for a Claim is not a De Minimis Settlement Amount but is less than or equal to $50 million, the Debtors will submit the proposed settlement to the Official Committee of Unsecured Creditors. If there is a timely objection made by the Creditors' Committee, the Debtors may either (i) renegotiate the Settlement and submit a revised notification to the Creditors' Committee or (b) file a request with the Court for the approval of the existing Settlement under Rule 9019 of the Federal Rules of Bankruptcy Procedure. Absent an objection from the Creditors' Committee, the Debtors may proceed with the Settlement. (3) If the Settlement Amount for a Claim is not a De Minimis Settlement Amount and is greater than $50 million, the Debtors will be required to seek the approval of the Court. (4) Under the Settlement Procedures, the Debtors may settle claims where some or all of the consideration is being provided by a third party and where the Debtors are releasing claims against creditors or third parties. (5) On a quarterly basis, beginning on the quarter that starts on October 1, 2009, the Debtors will file with the Court a report of all settlements of Claims into which the Debtors have entered during the previous quarter, but will not report settlements that are the subject of a separate Rule 9019 request. The Settlement reports will set forth the names of the parties with whom the Debtors have settled, the relevant Proofs of Claim numbers, the types of Claims asserted by the party, and the amounts for which the Claims have been settled. (6) On a monthly basis, beginning on November 1, 2009, the Debtors will provide the Creditors' Committee with a separate report of all settlements of a De Minimis Settlement Amount entered into in the preceding calendar month. Mr. Miller points out that given the extraordinary size and complexity of the Debtors' cases and claims pool, the Creditors' Committee has reviewed and approved the thresholds set forth in the Proposed Procedures that reflect the unique circumstances the Debtors will be facing during the Claims Reconciliation Process. Absent the Settlement Procedures, the Debtors would be required to seek specific Court approval for each individual compromise and settlement of a Claim. Accordingly, Mr. Miller asserts, the Settlement Procedures constitute a cost-effective method for resolving outstanding claims and avoid the expense and risk inherent in litigating those Claims. About General Motors Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- as 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). 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. 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, serves as the Chief Executive Officer for Motors Liquidation Company. 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. Bankruptcy Creditors' Service, Inc., publishes General Motors Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Motors Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). GENERAL MOTORS: Old GM Says 72 Reclamation Claims Have No Value --------------------------------------------------------------- Motors Liquidaiton Co., formerly General Motors Corp., and its units contend that 72 reclamation claims asserted by requesting sellers each in varied amounts ranging from $2,854 to $16,502,266, are invalid. A list of the Disputed Reclamation Claims is available for free at http://bankrupt.com/misc/GM_DisputedReclamationClaims.pdf Harvey R. Miller, Esq., at Weil Gotshal & Manges LLP, in New York, relates that Debtors' pre- and postpetition indebtedness were secured by liens on substantially all of the Debtors' assets. Therefore, prior to the Petition Date and for the entire duration of the Reclamation Period, secured liens existed on substantially all of the Debtors' assets, including the Goods described in the Reclamation Demands. Accordingly, the Debtors have concluded that the existence of the Liens renders the Reclamation Claims valueless, Mr. Miller says. In addition, Mr. Miller says, the Requesting Sellers have no right, pursuant to Section 546(c) of the Bankruptcy Code, to reclaim goods delivered to the Debtors on a date that was not within the period beginning on the date that preceded the Petition Date by 45 days -- or April 17, 2009 -- and ending on the day immediately preceding the Petition Date -- or May 31, 2009. Thus, the Requesting Sellers' Reclamation Claims are invalid to the extent that they seek to reclaim goods that were delivered to the Debtors on a date prior to the Reclamation Period or on or after the Petition Date. Mr. Miller continues that the Requesting Sellers entered into a trade agreements with the Debtors, which provide that the Sellers may not assert any reclamation claim or similar claim, including any claim under Section 503(b)(9) of the Bankruptcy Code, on account of any goods shipped prepetition and for which they have not been paid. Moreover, payment to such Essential Suppliers for goods shipped prepetition either have been made or are in the process of being made. Therefore, Reclamation Claims asserted by Sellers who signed a Trade Agreement are invalid, according to Mr. Miller. About General Motors Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- as 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). 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. 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, serves as the Chief Executive Officer for Motors Liquidation Company. 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. Bankruptcy Creditors' Service, Inc., publishes General Motors Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Motors Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). GEORGIA GULF: Capital World Investors Discloses 26.6% Stake ----------------------------------------------------------- Capital World Investors is deemed to be the beneficial owner of 8,770,360 shares or 26.6% of the 32,934,000 shares of Georgia Gulf Common Stock believed to be outstanding as a result of Capital Research and Management Company acting as investment adviser to various investment companies registered under Section 8 of the Investment Company Act of 1940. The Income Fund of America, Inc., an investment company registered under the Investment Company Act of 1940, which is advised by Capital Research and Management Company, is the beneficial owner of 2,659,046 shares or 8.1% of the 32,934,000 shares of Common Stock believed to be outstanding. CRMC manages equity assets for various investment companies through two divisions, Capital Research Global Investors and Capital World Investors. The divisions generally function separately from each other with respect to investment research activities and they make investment decisions and proxy voting decisions for the investment companies on a separate basis. One or more clients of Capital World Investors have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the Common Stock of Georgia Gulf Corporation. Capital World Investors holds more than 5% of the outstanding Common Stock of Georgia Gulf as of September 30, 2009 on behalf of clients American High-Income Trust, The Income Fund of America, Inc. About Georgia Gulf Georgia Gulf Corporation (NYSE: GGC) is a manufacturer and international marketer of two integrated chemical product lines, chlorovinyls and aromatics. The Company's primary chlorovinyls products are chlorine, caustic soda, vinyl chloride monomer (VCM), vinyl resins and vinyl compounds. Its aromatics products are cumene, phenol and acetone. The Company has four business segments: chlorovinyls; window and door profiles, and moldings products; outdoor building products, and aromatics. At June 30, 2009, the Company's balance sheet showed total assets of $1.62 billion and total $1.70 billion, resulting in a stockholders' deficit of $85.46 million. Georgia Gulf has said factors that gave rise to the substantial doubt about the Company's ability to continue as a going concern have been remediated. As of June 30, 2009, the Company is in compliance with all required debt covenants. In August 2009, Moody's Investors Service upgraded the Corporate Family Rating of Georgia Gulf to B2 from Caa2 as a result of the completion of the private debt-for-equity exchange offer and an amendment to its credit facility that substantially improves the company's liquidity. As reported by the Troubled Company Reporter on September 7, 2009, Standard & Poor's Ratings Services raised its ratings on Georgia Gulf, including its corporate credit rating to 'B' from 'D'. The outlook is stable. GEORGIA GULF: Registers 31.1MM Common Shares for Resale ------------------------------------------------------- Georgia Gulf Corporation filed with the Securities and Exchange Commission a prospectus relating to up to 31,148,503 shares of Georgia Gulf common stock that may be offered for sale by stockholders. The selling stockholders may offer the shares from time to time directly or, alternatively, through underwriters, broker-dealers or agents. The shares may be sold in one or more transactions at fixed prices, at prevailing market prices at the time of sale, at varying prices determined at the time of sale, or at a negotiated price. The sales may be effected in transactions (which may involve block transactions) on any national securities exchange or quotation service on which the common stock may be listed or quoted at the time of sale, in the over-the-counter market, in transactions otherwise than on the exchanges or services or in the over-the-counter market, through the writing of options or by any other method. Georgia Gulf will not receive any proceeds from the sale of the shares. Georgia Gulf will pay all expenses associated with the registration of the shares. The selling stockholders will pay underwriting discounts, commissions and transfer taxes, if any, relating to their sale or disposition of the shares. Georgia Gulf's common stock is listed on the New York Stock Exchange under the symbol "GGC." About Georgia Gulf Georgia Gulf Corporation (NYSE: GGC) is a manufacturer and international marketer of two integrated chemical product lines, chlorovinyls and aromatics. The Company's primary chlorovinyls products are chlorine, caustic soda, vinyl chloride monomer (VCM), vinyl resins and vinyl compounds. Its aromatics products are cumene, phenol and acetone. The Company has four business segments: chlorovinyls; window and door profiles, and moldings products; outdoor building products, and aromatics. At June 30, 2009, the Company's balance sheet showed total assets of $1.62 billion and total $1.70 billion, resulting in a stockholders' deficit of $85.46 million. Georgia Gulf has said factors that gave rise to the substantial doubt about the Company's ability to continue as a going concern have been remediated. As of June 30, 2009, the Company is in compliance with all required debt covenants. In August 2009, Moody's Investors Service upgraded the Corporate Family Rating of Georgia Gulf to B2 from Caa2 as a result of the completion of the private debt-for-equity exchange offer and an amendment to its credit facility that substantially improves the company's liquidity. As reported by the Troubled Company Reporter on September 7, 2009, Standard & Poor's Ratings Services raised its ratings on Georgia Gulf, including its corporate credit rating to 'B' from 'D'. The outlook is stable. GEORGIA GULF: UniCredit SpA Discloses 18.19% Equity Stake --------------------------------------------------------- UniCredit S.p.A.; Pioneer Global Asset Management S.p.A.; Pioneer Investment Management, Inc.; and Pioneer Institutional Asset Management, Inc., report that they beneficially owned in the aggregate 6,002,058 shares or roughly 18.19% of Georgia Gulf Corporation common stock. PIM and PIAM are direct subsidiaries of PGAM and wholly owned indirect subsidiaries of UniCredit SpA. PGAM is a limited liability company and the holding company incorporating all of the UniCredit SpA asset management business. About Georgia Gulf Georgia Gulf Corporation (NYSE: GGC) is a manufacturer and international marketer of two integrated chemical product lines, chlorovinyls and aromatics. The Company's primary chlorovinyls products are chlorine, caustic soda, vinyl chloride monomer (VCM), vinyl resins and vinyl compounds. Its aromatics products are cumene, phenol and acetone. The Company has four business segments: chlorovinyls; window and door profiles, and moldings products; outdoor building products, and aromatics. At June 30, 2009, the Company's balance sheet showed total assets of $1.62 billion and total $1.70 billion, resulting in a stockholders' deficit of $85.46 million. Georgia Gulf has said factors that gave rise to the substantial doubt about the Company's ability to continue as a going concern have been remediated. As of June 30, 2009, the Company is in compliance with all required debt covenants. In August 2009, Moody's Investors Service upgraded the Corporate Family Rating of Georgia Gulf to B2 from Caa2 as a result of the completion of the private debt-for-equity exchange offer and an amendment to its credit facility that substantially improves the company's liquidity. As reported by the Troubled Company Reporter on September 7, 2009, Standard & Poor's Ratings Services raised its ratings on Georgia Gulf, including its corporate credit rating to 'B' from 'D'. The outlook is stable. GREATER ATLANTIC: Commences Consent Solicitation on TruPS Buyback ----------------------------------------------------------------- Greater Atlantic Financial Corp. on October 5, 2009, commenced a consent solicitation to obtain the consent of holders of 6.50% Cumulative Convertible Trust Preferred Securities of Greater Atlantic Capital Trust I to a supplemental indenture to the Indenture, dated as of March 20, 2002, by and between Greater Atlantic and Wilmington Trust Company, as Indenture Trustee, governing the junior subordinated debentures related to the Securities. The terms of the supplemental indenture would permit Greater Atlantic to purchase the Securities in the tender offer despite the fact that Greater Atlantic exercised its right under the Indenture to defer interest payments on the debentures. Greater Atlantic is offering to pay $1.05 per share for the 6.50% Cumulative Convertible TruPS. The Company has said about 960,738 shares of 6.50% Cumulative Convertible TruPS are outstanding. On June 15, 2009, Greater Atlantic entered into a definitive Agreement and Plan of Merger with MidAtlantic Bancorp, Inc., and GAF Merger Corp. Pursuant to the Agreement and Plan of Merger, MidAtlantic will acquire GAFC. As a result of certain provisions of the federal securities laws, MidAtlantic and Acquisition Sub are deemed to be co-bidders in the tender offer. A full-text copy of the First Amendment of Agreement and Plan of Merger, dated as of September 29, 2009, is available at no charge at http://ResearchArchives.com/t/s?467d About Greater Atlantic Greater Atlantic Financial Corp. is a bank holding company whose principal activity is the ownership and management of Greater Atlantic Bank. The bank originates commercial, mortgage and consumer loans and receives deposits from customers located primarily in Virginia, Washington, D.C. and Maryland. The bank operates under a federal bank charter and provides full banking services. As of June 30, 2009, the Company had $204,596,000 in total assets and $216,209,000 in total liabilities, resulting in $11,613,000 in stockholders' deficit. Going Concern Doubt The Troubled Company Reporter reported on January 21, 2009, that BDO Seidman, LLP, in Richmond, Virginia, in a letter dated January 12, 2009, to the Board of Directors and Stockholders of Greater Atlantic Financial Corp. expressed substantial doubt about the company's ability to continue as a going concern. The firm audited the consolidated statements of financial condition of Greater Atlantic Financial Corp. and its subsidiaries as of September 30, 2008, and 2007 and the related consolidated statements of operations, stockholders' equity (deficit), comprehensive income (loss) and cash flows for each of the two years in the period ended September 30, 2008. HAMILTON SPECTATOR: J. Kara Wins Old Printing Plant for $3MM ------------------------------------------------------------ The Hamilton Spectator reports that Jamil Kara of Vancouver said that his company, J. Kara Capital Corp., won the auction for the old Hamilton Spectator printing plant at 80 King William Street with a $3,101,010 bid. The deal would close on October 16, The Hamilton Spectator says, citing Mr. Kara. According to The Hamilton Spectator, the plant went into receivership in 2008 before being completely converted into a 50-unit condo apartment building. The Hamilton Spectator relates that receiver Ira Smith had recommended selling the plant to Canlight Realty Corp. for $2.2 million until J. Kara submitted a last-minute offer of $2.5 million last week, and the Ontario Superior Court Justice Peter Cumming then allowed anyone interested to submit sealed bids by Friday afternoon. The Hamilton Spectator, founded in 1846, is a newspaper published every day but Sunday in Hamilton, Ontario, Canada. HARVEST OPERATIONS: Moody's Reviews 'B3' Corporate Family Rating ---------------------------------------------------------------- Moody's Investors Service placed Harvest Operations Corp.'s (Harvest) ratings under review for possible downgrade and lowered its Speculative Grade Liquidity rating to SGL-4 from SGL-3. Ratings placed under review were Harvest's B3 Corporate Family Rating, B3 Probability of Default Rating and Caa1 senior unsecured rating. The review for possible downgrade reflects: i) Harvest's refinancing risk, with its revolver (C$1.1 billion outstanding) expiring on April 30, 2010, and its $250 million 7.875% senior unsecured notes maturing in October 2011; ii) declining reserves, production and cash flow from upstream operations and limited available cash flow or funding to halt this decline; iii) Moody's expectation that the refinery operation will require significant capex to enhance and maintain its competitive position and will produce negative free cash flow at current crack spreads; and iv) continued unit holder distributions in the face of the above challenges. Harvest's SGL-4 Speculative Grade Liquidity rating reflects weak liquidity. On a weakening of oil prices, Harvest is unlikely to be able to fund its capex, interest payments, and distributions from internally generated cash flow over the next 12 to 15 months, and will have to rely on external financing, the availability and amount of which is uncertain. Compliance with financial covenants will be dependent on the terms of any new credit facility, which, if available, can be expected to have much more restrictive covenants than those in place. While the company may look to sell some non-core assets to reduce debt, alternative liquidity sources are limited given that all assets are pledged to the revolver lenders, and any proceeds from asset sales would be required to repay debt. The review will focus on: i) Harvest's ability to renew its revolver in a timely manner, the size of the revolver and resultant available liquidity, and the terms of any such financing; ii) the company's ability to maintain its production given the high distributions and limited available cash flow and liquidity to develop reserves; and iii) the company's plans to address the currently weak cash flow of the refinery. Downgrades: Issuer: Harvest Operations Corp. -- Speculative Grade Liquidity Rating, Downgraded to SGL-4 from SGL-3 On Review for Possible Downgrade: Issuer: Harvest Operations Corp. -- Probability of Default Rating, Placed on Review for Possible Downgrade, currently B3 -- Corporate Family Rating, Placed on Review for Possible Downgrade, currently B3 -- Senior Unsecured Regular Bond/Debenture, Placed on Review for Possible Downgrade, currently Caa1, LGD4, 65% Outlook Actions: Issuer: Harvest Operations Corp. -- Outlook, Changed to Rating Under Review From Stable The last rating action was on March 20, 2007, when Harvest's CFR and PDR were downgraded to B3 from B2, its senior unsecured rating was downgraded to Caa1 from B3, and a stable outlook was assigned. Harvest Operations Corp. is a wholly-owned operating subsidiary of Harvest Energy Trust, an integrated, publicly traded oil and natural gas unit trust based in Calgary, Alberta, with conventional producing oil and gas reserves in Western Canada, a refinery in Come-By-Chance, Newfoundland, and a small number of retail gasoline stations. HINDU TEMPLE: Denies Ownership of Assets in Balance Sheet --------------------------------------------------------- Andria Simmons at The Atlanta Journal-Constitution reports that the Hindu Temple and Community Center of Georgia, Inc. leader Annamalai Annamalai said that assets listed on temple balance sheets as of December 2008 -- including three cars worth $148,000, statues of idols valued at $168,000, and other religious merchandise worth $134,000 -- belonged to other parties. According to The Atlanta Journal-Constitution, Mr. Annamalai often dodged questions about the value of land holdings and other assets and said that "the temple doesn't own anything . . . . The bookkeeper didn't know. The [Hindu] Temple of Georgia doesn't own anything." The Atlanta Journal-Constitution relates that some critics and creditors question Mr. Annamalai's lifestyle as being lavish, as he lives in a million-dollar mansion in Sugarloaf Country Club in Duluth. According to court documents, the temple owes Mr. Annamalai some $435,000 for three months' salary and a bonus. The Atlanta Journal-Constitution states that Mr. Annamalai spent untold legal fees on 24 lawsuits that are pending in various local and federal courts against people he claims have either maligned the temple or failed to pay fees for ritual services. Mr. Annamalai, according to The Atlanta Journal-Constitution, said that: -- two Lexus vehicles and a Mercedes listed on the temple balance sheets belong to him; -- 108 valuable statues that the temple has boasted about owning were on loan from another temple in Arizona; and -- other religious merchandise on display at the temple belongs to Indian Handicrafts in India. The Atlanta Journal-Constitution says that the temple owns three properties -- 9 acres in Norcross, a 52-acre undeveloped tract in Carrollton, and a 17-acre residential property in the same city. According to the report, Mr. Annamalai valued the properties at $7 million, $2.1 million and $250,000, respectively. Mr. Annamalai hadn't produced appraisals to show why the value of the properties increased so much only a few years after the temple bought them, the report says, citing Valerie Richmond, an attorney representing Anderson Lake. Hindu Temple and Community Center of Georgia, Inc., filed for Chapter 11 bankruptcy protection on August 31, 2009 (Bankr. N.D. Ga. Case No. 09-82915). ILLINOIS FINANCE: Fitch Cuts Ratings on $20 Mil. Bonds to 'BB+' --------------------------------------------------------------- Fitch Ratings has downgraded to 'BB+' from 'BBB-' the rating on approximately $20 million Illinois Finance Authority revenue bonds (Lutheran Social Services of Illinois Obligated Group LSSI), series 2006. The Rating Outlook is Stable. The rating downgrade reflects the deterioration in Lutheran Social Services of Illinois Obligated Group's operating profile and its liquidity (both for the obligated group and including the Cornerstone Foundation [Cornerstone]) over the past four fiscal years. Cornerstone Foundation is a non-obligated affiliate that does not directly pledge its cash and investments to bondholders, but does exist solely to support LSSI's mission and is viewed as an additional source of liquidity. At June 30, 2009, LSSI and Cornerstone had combined cash and investments of $19.6 million, which equates to 78 days cash on hand, 108% cash to debt, and a 14.3 times cushion ratio. These figures have been on a steady decline since fiscal year 2005, when they stood at 114 DCOH, 188% cash to debt, and 18.5x cushion ratio. Moreover, liquidity for the obligated group has declined by approximately 50% since fiscal 2005, with DCOH at 26, cash to debt at 36% and the cushion ratio at 4.8x, as of June 30, 2009. Liquidity had been a historical strength of LSSI and is a critical factor in LSSI's credit profile, since LSSI not only relies on Cornerstone for balance sheet support but is also dependent on it for annual contributions to cover operating deficits. In fiscal years 2007 and 2008, LSSI continued to have negative excess margins of -1.9% and -5.6% (adjusted for a one time $6 million gain on the sale of property), respectively, and unaudited results for year-end fiscal 2009 show a -2.8% excess margin. For fiscal years 2007 and 2008, LSSI operational profile showed further weakness as it had two consecutive years of negative cash flow margins. From fiscal 2001 through fiscal 2006, LSSI recorded positive cash flow from operations that averaged approximately $2.1 million per year. While unaudited results show LSSI returning to positive cash flow in fiscal 2009, at approximately $850,000, it is still below the cash flow levels it had earlier in the decade. Operating pressure has come from the fiscal and political turmoil in the state of Illinois. LSSI receives more than 70% of its funding from the state. On a regular basis, LSSI does not receive timely payments from the state, which puts further pressure on LSSI's balance sheet and forces it to use a $4 million line of credit, on which it pays interest. While LSSI has worked to align revenue with expenses, state program cuts are a growing credit concern. In July 2009, Fitch downgraded the rating on State of Illinois's GO bonds to 'A' from 'AA-'. The 'A' rating was affirmed in September 2009, with Fitch noting the state's credit standing to be negatively affected by its inability to fully address current spending needs and accumulated deficits as well as its structural budget gap. The full press release, Fitch Rates Illinois' $400MM GOs 'A', dated Sept. 15, 2009, is available at www.fitchratings.com. The Stable Outlook reflects management efforts to better align revenues and expenses since the hiring of a new COO in fiscal 2007. LSSI has consolidated administrative functions and areas, including consolidating four foster care offices into one central office, as well as working to keep staffing flexible to adjust to changes in state contract funding levels. LSSI has a relatively light debt burden as maximum annual debt service ($1.4 million) is 1.9% of revenue. This contributes to manageable fixed costs, and with management working to control variable expenses (salaries and benefits), it helps mitigate program cuts from the state. The Outlook also reflects the solid demand for and essentiality of the services LSSI provides (foster care, mental health, senior services and substance abuse). While these services may face budget cuts, it is unlikely that they will be completely eliminated. Fitch believes that these factors combined with Cornerstone's historical support of LSSI provide stability at the current rating level. LSSI, headquartered in Des Plaines, IL, is a large, not-for-profit residential and social services provider. Total revenues of the obligated group in fiscal 2008 were approximately $98.4 million. In addition, LSSI has 16 non-obligated affiliates. LSSI covenants to provide audited financial statements within 180 days of each fiscal year-end and quarterly disclosure of the first three fiscal quarters within 90 days. IRVINE SENSORS: Sells $2.44MM in Preferreds to 66 Investors ----------------------------------------------------------- Irvine Sensors Corporation on September 30, 2009, entered into a Subscription Agreement with 66 accredited investors, pursuant to which the Company sold and issued to the Investors an aggregate of 3,490 preferred stock units at a purchase price of $700 per Unit. The $2,443,000 aggregate purchase price for the Units was paid in cash to the Company. Each Unit is comprised of one share of the Company's newly created Series B Convertible Preferred Stock, plus a five-year warrant to purchase the number of shares of the Company's Common Stock equal to 30% of the number of shares of Common Stock issuable from conversion of one share of Series B Stock at the initial conversion price. The initial exercise price of each Investor Warrant is $0.55, which was 110% of the last consolidated closing bid price of the Company's Common Stock as determined in accordance with Nasdaq rules immediately preceding the Company entering into the binding Subscription Agreement. The total number of shares of Common Stock issuable upon exercise of the Investor Warrants at the initial exercise price is 2,094,000 in the aggregate. Each share of Series B Stock is convertible at any time at the holder's option into 2,000 shares of Common Stock at an initial conversion price per converted share of Common Stock equal to $0.50, which was the last consolidated closing bid price of the Company's Common Stock as determined in accordance with Nasdaq rules immediately preceding the Company entering into the binding Subscription Agreement. The conversion price of the Series B Stock is subject to adjustment for stock splits, stock dividends, recapitalizations and the like. The total number of shares of Common Stock issuable upon conversion of the Series B Stock at the initial conversion price is 6,980,000 in the aggregate. In consideration for services rendered as the lead placement agent in the Private Placement, on September 30, 2009, the Company paid J.P. Turner & Company, LLC (i) cash commissions aggregating $195,440, which represents 8% of the gross proceeds of the Private Placement, (ii) a management fee of $48,860, which represents 2% of the gross proceeds of the Private Placement and (iii) an expense allowance fee of $73,290, which represents 3% of the gross proceeds of the Private Placement, and issued to J.P. Turner Partners, L.P. a five-year warrant to purchase 907,400 shares of the Company's Common Stock at an exercise price of $0.55 per share, which was 110% of the last consolidated closing bid price of the Company's Common Stock as determined in accordance with Nasdaq rules immediately preceding the Company entering into the Agent Warrant. The Investor Warrants and the Agent Warrant may be exercised in cash or pursuant to a net exercise provision if the Company does not register the shares of Common Stock issuable upon exercise of the Investor Warrants or Agent Warrant on or prior to March 30, 2010. The exercise price of the Investor Warrants and the Agent Warrant is subject to adjustment for stock splits, stock dividends, recapitalizations and the like. The Investor Warrants and Agent Warrant also are subject to a blocker that would prevent each holder's Common Stock ownership at any given time from exceeding 4.99% of the Company's outstanding Common Stock (which percentage may increase but never above 9.99%). None of the Series B Stock, Investor Warrants, Agent Warrant or the Common Stock issuable upon conversion or exercise thereof has been registered under the Securities Act of 1933 and none may be offered or sold in the United States absent registration or an applicable exemption from registration requirements. The Company does not plan to register the Series B Stock, Investor Warrants or Agent Warrant (or the Common Stock issuable upon exercise of the Investor Warrants or Agent Warrant), but has agreed to file a registration statement on Form S-3 covering the resale of such number of shares of Common Stock issuable upon conversion of the Series B Stock as is permitted to be registered for resale under the rules of the Securities and Exchange Commission. The number of shares of the Company's Common Stock outstanding immediately after the closing of the Private Placement was 9,995,716 shares. About Irvine Sensors Headquartered in Costa Mesa, California, Irvine Sensors Corporation (NASDAQ: IRSN) -- http://www.irvine-sensors.com/-- is a vision systems company engaged in the development and sale of miniaturized infrared and electro-optical cameras, image processors and stacked chip assemblies and sale of higher level systems incorporating such products and research and development related to high density electronics, miniaturized sensors, optical interconnection technology, high speed network security, image processing and low-power analog and mixed-signal integrated circuits for diverse systems applications. As of June 28, 2009, Irvine Sensors had total assets of $6,627,800 and total liabilities of $11,999,000, resulting to stockholders' deficit of $5,371,200. Optex Systems, Inc., a Texas corporation and a wholly owned subsidiary of Irvine Sensors, on September 21, 2009, filed a voluntary petition for relief under Chapter 7 of the United States Bankruptcy Code in the United States Bankruptcy Court in California. * * * Grant Thornton LLP in Irvine, California, in a letter dated January 9, 2009, pointed out that the Company incurred net losses of $21.6 million, $22.1 million, and $8.4 million for the years ended September 28, 2008, September 30, 2007, and October 1, 2006, respectively, and the Company has a working capital deficit of $16.1 million at September 28, 2008. "These factors, among others, raise substantial doubt about the company's ability to continue as a going concern." IRVINE SENSORS: To Issue Series B Convertible Preferreds -------------------------------------------------------- Irvine Sensors Corporation reports that on September 25, 2009, it filed with the Delaware Secretary of State a Certificate of Designations of Rights, Preferences, Privileges and Limitations of Series B Convertible Preferred Stock that created a new Series B Convertible Preferred Stock of the Company, authorized 10,000 shares of Series B Stock with a par value of $0.01 and designated the rights, preferences, privileges and limitations of the Series B Stock. The Series B Stock is non-voting, except to the extent required by law. With respect to distributions upon a deemed dissolution, liquidation or winding-up of the Company, the Series B Stock ranks senior to the Common Stock and junior to both the Company's Series A-1 10% Cumulative Convertible Preferred Stock and Series A-2 10% Cumulative Convertible Preferred Stock. The liquidation preference per share of Series B Stock equals its stated value, $1,000 per share. The Series B Stock is not entitled to any preferential cash dividends; however, the Series B Stock is entitled to receive, pari passu with the Company's Common Stock, such dividends on the Common Stock as may be declared from time to time by the Company's Board of Directors. Each share of Series B Stock is convertible to Common Stock at any time at the holder's option at the conversion price as set forth in the Certificate of Designations. The Series B Stock is not redeemable by the holder thereof, but the Company will have the right, upon 30 calendar days' prior written notice, to redeem the Series B Stock at its stated value, $1,000 per share. The approval of the holders of at least a majority of the then outstanding Series B Stock will be required for certain matters, including to (i) amend the Certificate of Designations in a manner which would impair the rights of the holders of the Series B Stock or (ii) issue any shares of preferred stock with rights, preferences or privileges senior to or pari passu with the Series B Stock. The Series B Stock is also subject to a blocker that would prevent each holder's Common Stock ownership at any given time from exceeding 4.99% of the Company's outstanding Common Stock (which percentage may increase but never above 9.99%). About Irvine Sensors Headquartered in Costa Mesa, California, Irvine Sensors Corporation (NASDAQ: IRSN) -- http://www.irvine-sensors.com/-- is a vision systems company engaged in the development and sale of miniaturized infrared and electro-optical cameras, image processors and stacked chip assemblies and sale of higher level systems incorporating such products and research and development related to high density electronics, miniaturized sensors, optical interconnection technology, high speed network security, image processing and low-power analog and mixed-signal integrated circuits for diverse systems applications. As of June 28, 2009, Irvine Sensors had total assets of $6,627,800 and total liabilities of $11,999,000, resulting to stockholders' deficit of $5,371,200. Optex Systems, Inc., a Texas corporation and a wholly owned subsidiary of Irvine Sensors, on September 21, 2009, filed a voluntary petition for relief under Chapter 7 of the United States Bankruptcy Code in the United States Bankruptcy Court in California. * * * Grant Thornton LLP in Irvine, California, in a letter dated January 9, 2009, pointed out that the Company incurred net losses of $21.6 million, $22.1 million, and $8.4 million for the years ended September 28, 2008, September 30, 2007, and October 1, 2006, respectively, and the Company has a working capital deficit of $16.1 million at September 28, 2008. "These factors, among others, raise substantial doubt about the company's ability to continue as a going concern." JAYHAWK ENERGY: Posts $596,000 Net Loss in Quarter Ended June 30 ---------------------------------------------------------------- JayHawk Energy, Inc., reported a net loss of $595,871 on total net revenues of $169,407 for the third quarter ended June 30, 2009, compared with a net loss of $661,544 on total net revenues of $452,315 in the same period in 2008. For the three-month period ending June 30, 2009, oil sales were $144,257, compared to $430,022 for the same period in 2008. The Company reported that the decline in lil sales was primarily attributable to declines in prices received for its crude oil. Additionally, all five wells where shut-in for 45 days during the months of January and February 2009, due to constraints of weather conditions. Revenues derived from the sale of gas for the three months ending June 30, 2009, were $25,150, compared with $22,293 in the corresponding period of 2008. Total costs and operating expenses were $765,278 for the third quarter ended June 30, 2009, compared with $1,113,859 in the comparable period last year. The Company incurred a net loss of $1,782,485 on total net revenues of $383,278 for the nine months ended ended June 30, 2009, compared with a net loss of $994,753 on total net revenues of $710,872 in the same period in 2008. For the nine months ended June 30, 2009, oil sales were $295,214, compared to $688,579 for the same period in 2008. Gas sales were $88,064 for the nine months ended June 30, 2009, compared with $22,293 in the corresponding period of 2008. Net cash used by operating activities totaled $159,227 for the nine months ending June 30, 2009, compared to $548,520 used in operating activities for the nine month period ending June 30, 2008. Net cash used in investing activities totaled $32,772 in the nine months ending June 30, 2009, as compared to $5,489,167 used in the same period ending June 30, 2008. Net cash provided by financing activities during the nine months ending June 30, 2009, was $200,000. For the nine month period ending June 30, 2008, $5,899,901 was provided by financing activities. The Company says that its revenue and operating cash flows are highly dependent on the prices it receives for crude oil and natural gas. A substantial decline in these prices will further reduce the Company's operating results and cash flows, and will impact its rate of growth and the carrying values of its assets. For the immediate future the Company plans to reduce its operating expenses, consolidate its properties, and fund its future operations by joint venturing, obtaining additional financing from investors, and attaining additional commercial production. However, the Company says is no assurance that it will be able to achieve these objectives. At June 30, 2009, the Company's consolidated balance sheet showed $9,228,410 in total assets, $1,611,412 in total liabilities, and $7,616,998 in total stockholders' equity. The Company's consolidated balance sheet at June 30, 2009, also showed strained liquidity with $396,723 in total current assets available to pay $1,473,769 in total current liabilities. Full-text copies of the Company's consolidated financial statements for the third quarter ended June 30, 2009, are available for free at http://researcharchives.com/t/s?46a2 Going Concern Doubt Meyers Norris Penny LLP, in Calgary, Canada, expressed substantial doubt about JayHawk Energy, Inc.'s ability to continue as a going concern after auditing the Company's consolidated financial statements for the year ended September 30, 2008. The auditing firm said that the Company's ability to continue as a going concern is dependent on obtaining sufficient working capital to fund future operations. About JayHawk Energy Based in Post Falls, Idaho, JayHawk Energy, Inc. (OTC BB: JYHW) -- http://www.jayhawkenergy.com/-- and its wholly owned subsidiary JayHawk Gas Transportation Corporation, is engaged in the acquisition, exploration, development, production and sale of natural gas, crude oil and natural gas liquids primarily from conventional reservoirs within North America. The Company incorporated in April 2004 as Bella Trading Company, Inc. and changed management and entered the oil and gas business in June of 2007. To date, the Company has acquired three main properties, the Uniontown in Kansas, the Candak in North Dakota, and Girard in Kansas. JOHN STOKES: Court Keeps Order Converting Case to Chapter 7 ----------------------------------------------------------- Tristan Scott at the Missoulian reports that John Stokes has failed to gain from his bid for a bankruptcy reorganization. According to the report, the Hon. Ralph B. Kirscher of the U.S. Bankruptcy Court for the District of Montana has denied John Stokes' request for an additional 20 days to prepare for his arguments, saying that legal paperwork critical to his case has remained locked inside the KGEZ station since he lost control of his assets and was ushered off the premises on September 24. Missoulian, citing Judge Kirscher, relates that motions for reconsideration under Chapter 11 bankruptcy are "extremely limited" in their scope, and that Mr. Stokes had ample time to prepare for Thursday's hearing. "I think given your intellect and knowledge of this case you've had adequate preparation to support your position in these matters. In any event, these motions for consideration are denied," the report quoted Judge Kirscher said as saying. The report states that James H. Cossitt, a Kalispell attorney representing the Chapter 7 trustee in the matter, said that the issues raised in Mr. Stokes' motions don't require any documentation. According to Missoulian, Mr. Stokes represented himself as a pro se litigant during a motions hearing. Mr. Stokes explained that he unsuccessfully sought representation from 45 different attorneys but has finally retained counsel from Atlanta who will be arriving in Montana this week, the MIssoulian relates. John Stokes owns a Kalispell radio station. He filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the District of Montana. Mr. Stokes' bankruptcy filing includes his two unregistered corporations, Z-600 Inc. and Skyline Broadcasting. The Court eventually converted Mr. Stokes' Chapter 11 reorganization case to Chapter 7 liquidation when the Debtor failed to accurately disclose his assets to the court, meet financial reporting requirements, pay filing fees, file state or federal income taxes for years. JOHNSONDIVERSEY INC: Clayton Investment Won't Alter Moody's Rating ------------------------------------------------------------------ Moody's Investors Service stated that it does not expect to take any immediate rating action following JohnsonDiversey, Inc.'s announcement that Clayton, Dubilier & Rice, Inc., will invest $477 million for a 46% equity interest in the company as part of a broader recapitalization transaction valued at $2.6 billion. The last rating action on JohnsonDiversey was on June 10, 2008, at which time affirmed the B2 Corporate Family Rating and B2 Probability of Default Rating of JohnsonDiversey and raised the rating on the senior subordinated notes to B2 from B3. JohnsonDiversey, Inc., is a leading global supplier of cleaning, hygiene, and sanitizing products, equipment and related services to the institutional and industrial cleaning and sanitation markets. JOHNSONDIVERSEY INC: Fitch Comments on Clayton's $477 Mil. Deal --------------------------------------------------------------- Fitch Ratings views the announced $477 million equity investment by a Clayton, Dubilier & Rice managed fund in JohnsonDiversey, Inc.'s and the recapitalization, which include debt financing of approximately $1.9 billion, as moderately positive for JohnsonDiversey's ratings. The transaction is expected to close before year-end, subject to completion of the debt financing and regulatory approvals. Fitch will review JohnsonDiversey's ratings, when more details about the transaction become available. Fitch currently rates JohnsonDiversey -- Issuer Default Rating 'B-'; -- Senior secured bank credit facilities 'BB-/RR1'; -- Subordinated debt rating 'B-/RR4'. In addition, Fitch rates JohnsonDiversey Holdings Inc.: -- IDR 'B-'; -- Senior discount notes 'CCC/RR6'. The Rating Outlook for both JohnsonDiversey and JohnsonDiversey Holdings, Inc., was revised to Negative from Stable on April 6, 2009. The Negative Outlook reflects JohnsonDiversey's continued negative free cash flow levels, weak credit metrics after adjusting for debt levels at the parent company and when viewed against funds from operations (FFO as opposed to EBITDA based metrics) and the potential for deteriorating earnings and cash flow levels stemming from weak global economic conditions. Another key driver of the Negative Outlook related to Fitch's concerns about potential changes in the capital structure of the company stemming from the December 2010 debt maturities and the May 2010 'put' by Unilever. As currently announced, the change in ownership of the company combined with the recapitalization of the company's debt structure appear to have removed concerns related to this risk as current bondholders are not expected to realize negative implications from the transaction. As per the announcement, a CD&R managed fund will invest $477 million for a 46% equity interest in JohnsonDiversey. At the same time, the Johnson family will reduce its ownership stake to 50% from the current 67%. Unilever NV (Unilever) also will reduce its equity stake in the company to 4% from 33%. Unilever is expected to receive $158 million in cash and $250 million in notes with a 10.5% coupon, which is payable in cash or kind. Fitch views the envisaged new ownership structure as moderately positive as it removes uncertainties related to Unilever's put option. The transaction also includes debt financing of approximately $1.9 billion. While details of the debt financing are not yet available, Fitch expects that proceeds will be used to repay all or a substantial portion of the company's existing debt of approximately $1.5 billion including $391 million of senior discount notes at JohnsonDiversey Holdings, Inc. as of July 3, 2009. As a result, Fitch anticipates that debt maturities will be more balanced and extended over a longer period of time than maturities for the company's existing debt. It is important to note that Fitch does not anticipate debt levels in aggregate to fall as a result of the proposed transaction. All of the company's existing debt and credit facilities will mature between now and 2013, including the $175 million revolving credit facility with $51 million outstanding as of July 3, 2009, the fully drawn $100 million Delayed Draw Term Loan, both maturing in December 2010, and $325 million Term Loan B maturing in December 2011, $617 million 9.625% Senior Subordinated Notes in 2012 and the structurally subordinated $391 million 10.67% Senior Discount Notes at the holding level in 2013. JohnsonDiversey is a global player in the industrial and institutional (I&I) cleaning market and sells its products into these product segments: floor care, foodservice, food processing, restroom/housekeeping, laundry and industrial. JohnsonDiversey is currently a wholly owned subsidiary of JohnsonDiversey Holdings, which is currently owned by Commercial Markets Holdco (67%) and Unilever (33%). JohnsonDiversey had approximately $3.1 billion in net sales, and Fitch calculated operating EBITDA of approximately $323 million for the last twelve months ending July 3 2009. The company also announced that it will change its name to 'Diversey, Inc' upon closing of the transaction. JON HARDER: Can't Block Secured Creditors from Pursuing LLCs ------------------------------------------------------------ WestLaw reports that a Chapter 11 debtor failed to show that he had a reasonable likelihood of a successful reorganization. Thus, he was not entitled to a preliminary injunction barring lenders from pursuing collection actions against senior assisted living facilities (ALF) for which he was a guarantor. The debtor was a member of hundreds of LLCs formed to own and operate the ALFs. However, he had assigned his interests in LLCs to a restructuring officer. There was no evidence as to the ALFs' value to the debtor. In re Harder, --- B.R. ----, 2009 WL 960225 (Bankr. D. Ore.). Jon M. Harder is the chief executive officer and majority shareholder of Sunwest Management Inc., the manager of over 280 senior living facilities around the country, serving over 18,000 residents and employing 12,000 people. The care facilities are owned and operated by more than 700 special purpose entities, generally LLCs that own the facilities and the underlying real estate. Mr. Harder and some affiliated LLCs filed for Chapter 11 protection (Bankr. D. Ore. Case No. 08-37225) on December 31, 2008, is represented by James Ray Streinz, Esq., at McEwan Gisvold LLP, in Portland, Ore., and estimated more than $100 million in debts and assets at the time of the filing. KIWA BIO-TECH: CEO Wei Li Receives $75,000 Salary for 2008 ---------------------------------------------------------- Kiwa Bio-Tech Products Group Corporation's Chief Executive Officer Wei Li received a $75,000 salary in 2008, according to a regulatory filing by the Company with the Securities and Exchange Commission. The CEO was also paid $75,000 for 2007. Chief Financial Officer Lianjun Luo received a $48,000 salary in 2008. In 2007, the CFO received a $60,000 salary, which included $12,000 in Non-Equity Incentive Plan Compensation. The Company said it had no officers or directors whose total annual salary and bonus during either 2008 or 2007 exceeded $100,000. Headquartered in Claremont, California, Kiwa Bio-Tech Products Group Corporation (OTC BB: KWBT.OB) -- http://www.kiwabiotech.com/ -- develops, manufactures, distributes and markets bio- technological products for agricultural and natural resources and environmental conservation. The Company has established two subsidiaries in China: (1) Kiwa Shandong in 2002, a wholly owned subsidiary, and (2) Kiwa Tianjin in July 2006, of which the company holds 80% equity. Going Concern Doubt On March 6, 2009, Mao & Company, CPAs, Inc., in New York City expressed substantial doubt about the Company's ability to continue as a going concern after auditing the Company's financial results for periods ended December 31, 2008, and 2007. The auditors pointed that the Company has suffered recurring losses from operations, has debts maturing in 2009 and has a working capital deficit and a net capital deficiency as of December 31, 2008. KIWA BIO-TECH: No Schedule Yet for Annual Stockholders' Meeting --------------------------------------------------------------- Kiwa Bio-Tech Products Group Corporation will hold its Annual Meeting of the Stockholders on [_______] [___], 2009, at 10:00 a.m. local time at the Company's executive office located at Room 1702, Building A, Beijing Global Trade Center, 36 North Third Ring Road East, Dongcheng District, Beijing, People's Republic of China. The purpose of the annual meeting is to consider and vote upon each of these proposals: 1. elect five nominees as nominated by the Board of Directors to serve a one-year term on the Board of Directors set to expire at the 2010 annual meeting of stockholders and until their respective successors are elected and qualified; 2. ratify the selection and appointment of AGCA, Inc., as the Company's independent auditors for the fiscal year ending December 31, 2009; 3. approve an amendment to our certificate of incorporation to increase the number of authorized shares of the Company's common stock from 400,000,000 to 800,000,000 shares; and 4. transact other business as may properly come before the meeting or any adjournment thereof. Only stockholders of record at the close of business on August 24, 2009, will be entitled to notice of, and to vote at, the annual meeting and any adjournments thereof. A full-text copy of the proxy statement is available at no charge at http://ResearchArchives.com/t/s?46a6 On September 25, the Company filed with the Securities and Exchange Commission Amendment No. 1: -- on Form 10-Q/A to its Quarterly Report on Form 10-Q for the period ended June 30, 2009 See http://ResearchArchives.com/t/s?46a7 -- on Form 10-Q/A to its Quarterly Report on Form 10-Q for the period ended March 31, 2009 See http://ResearchArchives.com/t/s?46a8 -- on Form 10-K/A to its Quarterly Report on Form 10-K for the year ended December 31, 2008 See http://ResearchArchives.com/t/s?46a9 The Company filed Amendment No. 1 to amend Item 4 "Controls and Procedures". At June 30, 2009, the Company's balance sheet showed total assets of $4.98 million and total liabilities of $10.61 million, resulting to a stockholders' deficit of $5.63 million. For three months ended June 30, 2009, the Company posted a net loss of $601,219 compared with a net loss of $640,744 for the same period in 2008. For six months ended June 30, 2009, the Company posted a net loss of $1.44 million compared with a net loss of $1.34 million for the same period in 2008. Headquartered in Claremont, California, Kiwa Bio-Tech Products Group Corporation (OTC BB: KWBT.OB) -- http://www.kiwabiotech.com/ -- develops, manufactures, distributes and markets bio- technological products for agricultural and natural resources and environmental conservation. The Company has established two subsidiaries in China: (1) Kiwa Shandong in 2002, a wholly owned subsidiary, and (2) Kiwa Tianjin in July 2006, of which the company holds 80% equity. Going Concern Doubt On March 6, 2009, Mao & Company, CPAs, Inc., in New York City expressed substantial doubt about the Company's ability to continue as a going concern after auditing the Company's financial results for periods ended December 31, 2008, and 2007. The auditors pointed that the Company has suffered recurring losses from operations, has debts maturing in 2009 and has a working capital deficit and a net capital deficiency as of December 31, 2008. LE-NATURE'S INC: Trustee, BDO Spat Heads to Arbitration ------------------------------------------------------- Law360 reports that a dispute between BDO Seidman LLP and Le- Nature's Inc.'s liquidation trustee over engagement letters will be hashed out in arbitration after a federal court tossed out the bulk of the case this summer and the accounting firm agreed to drop its sole remaining claim, which alleged a breach of a mediation agreement. Headquartered in Latrobe, Pennsylvania, Le-Nature's Inc. -- http://www.le-natures.com/-- makes bottled waters, teas, juices and nutritional drinks. Its brands include Kettle Brewed Ice Teas, Dazzler fruit juice drinks and lemonade, and AquaAde vitamin-enriched water. Four unsecured creditors of Le-Nature's filed an involuntary Chapter 7 petition against the company on Nov. 1, 2006 (Bankr. W.D. Pa. Case No. 06-25454). On Nov. 6, 2006, two of Le-Nature's subsidiaries, Le-Nature's Holdings Inc., and Tea Systems International Inc., filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code. Judge McCullough converted Le Nature's Inc.'s case to a Chapter 11 proceeding. The Debtors' cases are jointly administered. The Debtors' schedules filed with the Court showed $40 million in total assets and $450 million in total liabilities. Douglas Anthony Campbell, Esq., Ronald B. Roteman, Esq., and Stanley Edward Levine, Esq., at Campbell & Levine, LLC, represents the Debtors in their restructuring efforts. The Court appointed R. Todd Neilson as Chapter 11 Trustee. Dean Z. Ziehl, Esq., Richard M. Pachulski, Esq., Stan Goldich, Esq., Ilan D. Scharf, Esq., and Debra Grassgreen, Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub LLP, represent the Chapter 11 Trustee. David K. Rudov, Esq., at Rudov & Stein, and S. Jason Teele, Esq., and Thomas A. Pitta, Esq., at Lowenstein Sandler PC, represent the Official Committee of Unsecured Creditors. Edward S. Weisfelner, Esq., Robert J. Stark, Esq., and Andrew Dash, Esq., at Brown Rudnick Berlack Israels LLP, and James G. McLean, Esq., at Manion McDonough & Lucas represent the Ad Hoc Committee of Secured Lenders. Thomas Moers Mayer, Esq., and Matthew J. Williams, Esq. at Kramer Levin Naftalis & Frankel LLP, represent the Ad Hoc Committee of Senior Subordinated Noteholders. In July 2008, the Chapter 11 plan of liquidation for Le-Nature's took effect. LIFE SCIENCES: To Hold Stockholders' Meeting on Lion Merger ----------------------------------------------------------- Life Sciences Research, Inc., intends to hold a special meeting of stockholders to ask them to consider and vote upon a proposal to approve the merger of Lion Merger Corp. with and into the Company pursuant to the terms of the Agreement and Plan of Merger, dated as of July 8, 2009, among Lion Holdings, Inc., Lion Merger Corp. and the Company. No date has been set yet for the special meeting. Lion Holdings and Lion Merger Corp. were newly formed by Andrew H. Baker, the Chairman and Chief Executive Officer of the Company, to engage in the proposed merger. Lion Merger Corp. is a wholly owned subsidiary of Lion Holdings, Inc. If the proposed merger is completed, each issued and outstanding share of the Company's voting common stock, par value $0.01 per share, owned by shareholders -- other than shares owned by Lion Holdings, Inc., Lion Merger Corp., or any other direct or indirect wholly owned subsidiary of Lion Holdings, Inc. (including shares to be directly or indirectly contributed to Lion Holdings, Inc. by Mr. Baker and his affiliate, Focused Healthcare Partners, L.L.C., prior to the effective time of the merger) and shares owned by any direct or indirect wholly owned subsidiary of the Company -- will be converted into the right to receive $8.50 in cash, without interest and less any applicable withholding taxes. The price represents a premium of roughly 77% over the closing market price of the Company's voting common stock of $4.79 per share on March 3, 2009, the last trading day prior to public announcement of Mr. Baker's initial offer to acquire the Company for $7.50 per share. The price also represents a premium of 13% over Mr. Baker's initial proposal and a premium of 18% over the closing market price of the Company's voting common stock of $7.18 per share on July 8, 2009, the last full trading day prior to the announcement by the Company that it had entered into the merger agreement. A special committee of the board of directors consisting solely of the Company's non-employee, independent directors was charged with evaluating strategic alternatives for the Company and unanimously recommended approval of the merger. Based upon this recommendation, the Company's board of directors, with Andrew Baker and Brian Cass abstaining, has unanimously determined that the merger and the transactions contemplated by the merger agreement are in the best interests of the Company and its stockholders, and has unanimously approved the merger. The board of directors, with Messrs. Baker and Cass abstaining, recommends approval of the merger. Mr. Baker and his affiliates beneficially owned as of the record date roughly 18.4% of the Company's shares, which shares would be counted for purposes of determining the state law vote but would not be counted for purposes of determining the neutralized vote. Accordingly, assuming that Mr. Baker and his affiliates voted all of their shares in favor of the merger, the affirmative vote of greater than roughly 38.7% of the remaining 81.6% of the shares (or 31.6% of all outstanding shares) would be required to approve the merger for purposes of the state law vote, and, assuming all of the Company's stockholders voted all of their shares with respect to the merger, the affirmative vote of a majority of the remaining 81.6% of the shares would be required to approve the merger for purposes of the neutralized vote. A full-text copy of the proxy statement is available at no charge at http://ResearchArchives.com/t/s?469f About Life Sciences Research Headquartered in East Millstone, New Jersey, Life Sciences Research Inc. (NYSE Arca: LSR) -- http://www.lsrinc.net/-- is a global contract research organization providing product development services to the pharmaceutical, agrochemical and biotechnology industries. LSR operates research facilities in the United States and the United Kingdom. As of June 30, 2009, the Company had $183,594,000 in total assets and $191,293,000 in total liabilities, resulting in $7,699,000 in stockholders' deficit. LITHIUM TECHNOLOGY: Inks Three Consulting Agreements ---------------------------------------------------- Lithium Technology Corporation on September 25, 2009, entered into a consulting agreement with each of Steenbergh Management B.V., FMSUD Consultancy B.V., and OUIDA Management Consultancy B.V. Each of the Consulting Agreements has a term until December 31, 2010, and may be terminated on 60 days written notice. Each Consulting Agreement provides that the Consultant will consult with the directors, officers and employees of the Company concerning matters relating to the management and organization of the Company, its financial policies, the terms and conditions of employment of the Company's employees, and generally any matter arising out of the business affairs of the Company. The Steenbergh Consulting Agreement provides for Christiaan van den Berg, an employee of Steenbergh, the Chief Executive of Arch Hill Capital and the Co-Chairman of the Board of the Company, to spend a minimum of 32 hours per month in fulfilling his obligations under the Consulting Agreement and the payment by the Company of a monthly fee of Euros 4,167. The FMSUD Consulting Agreement provides for Fred J. Mulder, an employee of FMSUD and the Co-Chairman of the Board of the Company, to spend a minimum of 32 hours per month in fulfilling his obligations under the Consulting Agreement and the payment by the Company of a monthly fee of Euros 4,167. The OUIDA Consulting Agreement provides for Theo M.M. Kremers, an employee of OUIDA Management Consultancy B.V. and the Chief Executive Officer and a director of the Company, to spend a minimum of 160 hours per month in fulfilling his obligations under the Consulting Agreement and the payment by the Company of a monthly fee of Euros 20,820. On March 25, 2009, the Company filed an Amendment to its Restated Certificate of Incorporation with the Secretary of State of the State of Delaware, to increase the number of authorized shares of the Company's common stock to 3,000,000,000 shares. The increase in the number of authorized shares of common stock was needed in order for the Company to have an adequate reserve of common stock available for issuance upon conversion of existing convertible securities and exercise of outstanding options and warrants and to satisfy certain commitments to issue common stock. The Company has instructed its transfer agent to issue 264,103,114 shares of Company Common Stock upon conversion of all outstanding 100,000 shares of Series B Preferred Stock, 583,000,000 shares of Company Common Stock upon conversion of all outstanding 233,200 shares of Series C Preferred Stock, 190,172,300 shares of Company Common Stock to Arch Hill Capital due in connection with a February 2008 debt exchange, and 19,500,000 shares to certain current and former executives and consultants for share compensation due and owing by the Company. Going Concern Doubt The June 11, 2009 audit report of Amper, Politziner & Mattia LLP, in Edison, New Jersey, raised substantial doubt about the Company's ability to continue as a going concern. The Company posted a net loss of $6,414,000 for the year ended December 31, 2008, from a net loss of $24,391,000 in 2007. Revenues from product sales increased to $4,167,000 or 59% in the year ended December 31, 2008 from $2,609,000 in the same period in 2007. As of December 31, 2008, the Company had total assets of $11,107,000, and total liabilities of $21,897,000, resulting in stockholders deficit of $10,790,000. Based in Plymouth Meeting, Pennsylvania, Lithium Technology Corporation is a global manufacturer and provider of rechargeable energy storage solutions for diverse applications. The Company designs and builds a limited amount of large format, cylindrical lithium-ion (Li-ion) rechargeable cells and engineers and builds lithium-ion (Li-ion) rechargeable batteries complete with battery management systems for use in transportation, military/national security and stationary power markets. LTC also manufactures its own unique large format, cylindrical cells. LIZ CLAIBORNE: Unveils New Distribution Strategy for Franchise -------------------------------------------------------------- Liz Claiborne Inc disclosed bold steps to further the revitalization of the Liz Claiborne brand franchise and to significantly alter its earnings trajectory. To accomplish this, the company has entered into a long-term licensing agreement with J. C. Penney Company, Inc., under which JCPenney will become the exclusive department store destination for all Liz Claiborne and Claiborne branded merchandise in the United States and Puerto Rico. The other important element of this strategy is moving the distribution of the Liz Claiborne New York brand designed by Isaac Mizrahi to QVC. As a result of these agreements, the company expects the Liz Claiborne wholesale brand franchise to swing from a meaningful adjusted operating loss in 2009 to a targeted adjusted operating profit in 2010. Liz Claiborne and Claiborne Brands Exclusive to JCPenney The Liz&Co. and Concepts by Claiborne brands, launched at JCPenney in 2007, have consistently been among JCPenney's strongest exclusive brand performers, reflecting the enormous appeal of the Liz Claiborne brand to the JCPenney customer. This milestone, strategic agreement substantially expands this highly successful partnership by launching full lifestyle collections under both the Liz Claiborne and Claiborne brand names, available in JCPenney stores, catalog and on jcp.com beginning in Fall 2010. With this agreement, all Liz Claiborne merchandise at JCPenney - which will include approximately 30 merchandise categories will now be sold in JCPenney's highly affordable better/best pricing category. Liz Claiborne Inc. will lead the design process, JCPenney will be responsible for sourcing, production, marketing and distribution and they will together merchandise the brand. Additional highlights of the JCPenney agreement include: -- The agreement has a term of up to 10 years beginning in August 2010. At the end of year five, after certain consents have been obtained, JCPenney will have the option to acquire the licensed trademarks and other Liz Claiborne brands for use in the U.S. and Puerto Rico. JCPenney will also have the option to take ownership of the marks in the same territory at the end of year 10. -- Liz Claiborne Inc. will receive design service fees and royalties as a percent of sales plus gross profit sharing with guaranteed minimums. -- The merchandise will be sourced by JCPenney's well established sourcing organization to leverage a long history of supplier relationships and leading edge, proprietary technology and processes. -- The launch of Liz Claiborne and Claiborne will include a full range of apparel for women and men, as well as accessories, shoes and home. -- Liz Claiborne Inc. retains the rights to market and distribute the Liz Claiborne, Liz & Co., Claiborne and Concepts by Claiborne labels outside of the U.S. Commenting on the JCPenney strategic partnership, Liz Claiborne Inc. chief executive officer William L. McComb said: "There are few brands, across the American landscape, with the history, cultural significance, and consumer credentials as the Liz Claiborne brand. Today, we've taken bold steps that honor this amazing heritage. After two very successful years partnering with JCPenney, we decided it was time to take it to the next level. The commitment, the connection to the consumer and the brand stewardship JCPenney has brought to the table have been nothing short of outstanding. I have often talked about the need for strategies that allow companies to 'win with the winners' and this strategic alliance with JCPenney turns those words into action. By simplifying our model and working with them as our exclusive department store partner, we can reach the consumer and profitably manage the future of this iconic brand." Myron E. (Mike) Ullman, III, chairman and chief executive officer of JCPenney said: "Liz Claiborne is one of the most recognized brands in the history of American apparel retailing with a deeply loyal following, and our research shows that it is among the most desired by the JCPenney customer. In capitalizing on each of our strengths, this agreement brings huge benefits to both companies by giving our customers a substantially expanded Liz Claiborne offering at a more accessible price point than ever before." Liz Claiborne New York, Designed by Isaac Mizrahi, Moves to QVC Liz Claiborne Inc., in collaboration with Isaac Mizrahi, announced that it has entered into an agreement to offer the prestigious Liz Claiborne New York line on QVC, one of the world's leading multimedia retailers, beginning with Fall 2010 merchandise. Under the agreement, Isaac Mizrahi will design the line of premium apparel, accessories and home products; QVC will merchandise and source the product, with Liz Claiborne Inc. providing brand management oversight. Liz Claiborne New York will exit the department store channel completely after Holiday 2009. Additional highlights of the QVC deal include: -- QVC has the rights to use the Liz Claiborne New York brand with Isaac Mizrahi as creative director on any apparel, accessories, or home categories in their U.S. and international markets. -- Liz Claiborne New York product at QVC will have higher-end styling and quality. -- The multi-year agreement has renewal rights. -- Liz Claiborne Inc. receives royalty on net sales. Regarding the move to QVC, Mr. McComb said, "In order for us to fully capitalize on the Liz Claiborne New York brand's vast equity with consumers, we needed to find a more productive distribution strategy. Given QVC's rich, brand-enhancing selling environment and its extremely consumer-centric culture, as well as its recent announcement to support the launch of the comprehensive lifestyle collection IsaacMizrahiLive!(TM), QVC is ideal for Liz Claiborne New York. I am excited to think that Isaac Mizrahi and Liz Claiborne New York will play a major role at QVC as they become one of the great success stories of the next decade." Isaac Mizrahi said, "The opportunities for the Liz Claiborne New York brand inherent in this new distribution strategy with QVC are thrilling for me. It affords us the ability to elevate the brand and effectively balance the collection so that we are able to maximize its sales potential. It is exciting for me to link my relationship with Liz Claiborne and my relationship with QVC, together we will revolutionize the way a brand builds and provides a direct voice to the customer." Commenting on this agreement, QVC's president and CEO Mike George said, "We're thrilled to collaborate with the Liz Claiborne organization to celebrate and reignite the heritage of this incredible fashion story in an entirely fresh, new retail environment. This iconic fashion brand, powered by the brilliant design talent of Isaac Mizrahi, presented through QVC's immersive multimedia experience -- for anyone who loves to shop, it's an exciting glimpse at the future of retailing." About Liz Claiborne Liz Claiborne Inc. -- http://www.lizclaiborneinc.com/-- designs and markets a global portfolio of retail-based premium brands including Kate Spade, Juicy Couture, Lucky Brand and Mexx. The Company also has a refined group of department store-based brands with strong consumer franchises including the Liz Claiborne and Monet families of brands, Kensie, Kensiegirl, Mac & Jac, and the licensed DKNY Jeans Group. * * * As reported by the TCR on August 19, 2009, Standard & Poor's Ratings Services lowered its corporate credit rating on New York- based Liz Claiborne Inc. to 'B' from 'BB-'. The outlook is negative. S&P also lowered the senior unsecured debt rating to 'B-'. The recovery rating remains '5', indicating S&P's expectation of modest (10% to 30%) recovery in the event of a payment default. As of July 4, 2009, Liz Claiborne had about $1.6 billion of debt outstanding (including capitalized operating leases). According to the TCR on August 17, 2009, Moody's Investors Service lowered Liz Claiborne Inc's Corporate Family Rating and Probability of Default Rating to B2 from Ba3. The Company's EUR 350 million senior unsecured notes were lowered to Caa1 (LGD 5, 83%) from B2 (LGD 5, 85%). All of the Company's ratings were placed on review for further possible downgrade. MAGUIRE PROPERTIES: Amends CEO's Restricted Stock Units Agreement ----------------------------------------------------------------- Maguire Properties, Inc., and Maguire Properties, L.P., and Nelson C. Rising, the Company's President and Chief Executive Officer, on October 1, 2009, entered into an amendment to Mr. Rising's restricted stock units agreement dated as of May 17, 2008, pursuant to which Mr. Rising was originally granted 1,250,000 restricted stock units. The RSUs were previously subject to both time-based vesting and stock price-based vesting. In terms of satisfying the time-based criteria, 20% of the RSUs vested on May 17, 2009, and the remaining 80% vest pro rata on a daily basis through May 17, 2013, subject to Mr. Rising's continued employment. In terms of satisfying the price-based criteria, 20% of the RSUs were previously subject to vesting in installments at stock price targets of $25.00, $30.00, $35.00, $40.00 and $45.00. The purpose of the amendment was solely to eliminate the price-based criteria; the time-based criteria and other provisions remain unchanged. The RSUs will continue to vest in full in a termination without cause, termination for good reason, death/disability or change in control (each as defined in Mr. Rising's employment agreement with the Company dated as of May 17, 2008), with the elimination of the price-based criteria removing that condition to accelerated vesting. In taking action to amend the terms of Mr. Rising's RSUs, the Company's Board of Directors noted the significant economic downturn and related factors beyond the control of the Company or its management, occurring shortly after Mr. Rising commenced employment with the Company and subsequent to the grant of the RSUs, and the resulting unfavorable and unpredictable market conditions affecting companies generally and the real estate industry in particular (including the Company). In the six months immediately following the commencement of Mr. Rising's employment, the S&P 500 Index decreased by approximately 40% and the MSCI US REIT Index decreased by approximately 56%. The Company's Board of Directors (upon recommendation by the Compensation Committee) determined that due to these factors, the price-based vesting conditions originally included in Mr. Rising's RSU award were not realistically achievable, and therefore, the RSU award was not continuing to serve its essential purposes of incentivizing and retaining Mr. Rising. The Compensation Committee and the Board thus determined that it would be appropriate and desirable to remove the price-based vesting conditions. The RSUs were originally granted to Mr. Rising upon his commencement of employment with the Company and comprise his only Company equity grants other than an additional 250,000 restricted stock units subject to time-vesting conditions that were also granted upon employment commencement. As reported by the Troubled Company Reporter on August 12, 2009, Maguire Properties may relinquish control of seven Southern California buildings with $1.06 billion of debt and said it's not planning on filing for bankruptcy. In its second quarter 2009 report on Form 10-Q, the Company warned, "We may not have the cash necessary to repay our debt as it matures. Therefore, failure to refinance or extend our debt as it comes due, or a failure to satisfy the conditions and requirements of such debt, could result in an event of default that could potentially allow lenders to accelerate such debt. If our debt is accelerated, our assets may not be sufficient to repay such debt in full, and our available cash flow may not be adequate to maintain our current operations. If we are unable to refinance or repay our debt as it comes due (particularly in the case of loans with recourse to our Operating Partnership) and maintain sufficient cash flow, our business, financial condition, results of operations and common stock price will be materially and adversely affected, and we may be required to file for bankruptcy protection." As of June 30, 2009, the Company's assets total $4,392,301,000 against debts of $4,866,253,000, for a stockholders' deficit of $473,952,000. Maguire Properties said in an August 10 statement that its Board of Directors has approved management's plan to seek to dispose of four former EOP/Blackstone assets and two other assets in cooperation with lenders as well as Park Place I and certain parking areas and development rights. During the quarter ended June 30, 2009, the Company recorded a non-cash impairment charge of approximately $345 million associated with these assets. About Maguire Properties Maguire Properties, Inc. -- http://www.maguireproperties.com/-- is the largest owner and operator of Class A office properties in the Los Angeles central business district and is primarily focused on owning and operating high-quality office properties in the Southern California market. Maguire Properties, Inc. is a full- service real estate company with substantial in-house expertise and resources in property management, marketing, leasing, acquisitions, development and financing. MAXXAM INC: Reviews Impact of 5th. Circuit Ruling in PALCO Case --------------------------------------------------------------- MAXXAM Inc. said it is in the process of evaluating an appellate court's decision in the bankruptcy cases of The Pacific Lumber Company and the ruling's potential effect on MAXXAM. MAXXAM has previously disclosed the bankruptcy proceedings of the Company's former forest products subsidiaries, The Pacific Lumber Company and its subsidiaries, including the loss entirely of the Company's equity interests in these subsidiaries upon consummation of the MRC/Marathon Plan, which plan of reorganization was approved by the Bankruptcy Court. MAXXAM has also previously disclosed that various parties had appealed the matter to the Court of Appeals for the Fifth Circuit. PALCO 5th Cir. Ruling As reported by the Troubled Company Reporter, the Fifth Circuit on September 29, 2009, issued a ruling that reversed certain liability releases of plan proponents that were part of the MRC/Marathon Plan, remanded one matter to the Bankruptcy Court for further consideration, and otherwise rejected the appeal. Specifically, Chief Judge Edith H. Jones, writing for the 5th Circuit Court of Appeals in New Orleans, entered an opinion affirming a ruling by the Bankruptcy Court in July 2008 that confirmed the Chapter 11 plan for Scotia Pacific Co. and its affiliate Pacific Lumber proposed by Mendocino Redwood Company, LLC and Marathon Structured Finance Fund L.P., Palco's secured lender and rejected a plan by noteholders. Judge Jones only remanded minor issues back to the Bankruptcy Court. She concluded that the bankruptcy judge may have made an $11.1 million mathematical mistake in calculating the value of part of the noteholders' collateral. "[W]e reject the Noteholders' complaints against the plan's payout of cash in full for their allowed secured claim, but we remand the administrative priority claim. We also reverse in part the broad non-debtor releases," Judge Jones wrote. Bill Rochelle at Bloomberg News noted that while the approved plan wasn't overturned, Judge Jones penned an "important opinion, with its warning that implementing a reorganization plan doesn't exempt it from appellate review. Judge Jones held, "We hold that equitable mootness does not bar review of issues raised on appeal concerning the treatment of the Noteholders' secured claims; nor does it bar re-evaluation of whether their administrative priority claim was correctly calculated; nor does it bar review of the plan's release clauses insulating multiple parties from liability. Equitable mootness does foreclose our review of issues related to the treatment of impaired and unsecured classes." Judge Jones said the implementation of the plan last year didn't preclude appellate review of the plan's treatment of noteholders with $800 million in claims secured by Scotia's 210,000 acres of California redwood timberland. Judge Jones held that paying the noteholders $513 million cash in full satisfaction of their claims was proper because with the exception of collateral that may have been left out of the valuation, the court's result is not "clearly wrong" in deciding that the timberland was worth only $513 million. Judge Jones also ruled that the plan could be "crammed down" on the noteholders even though they voted against it. Because the plan paid the noteholders all their collateral was worth, cramdown was proper, Judge Jones said. "We conclude that the MRC/Marathon plan, insofar as it paid the Noteholders the allowed amount of their secured claim, did not violate the absolute priority rule, was fair and equitable, satisfies 11 U.S.C. Sec. 1129(b)(2)(A )(iii), and yielded a fair value of the Noteholders' secured claim." A copy of Judge Jones' decision is available for free at: http://researcharchives.com/t/s?460b Mathematical Error According to Judge Jones, it is not certain, however, whether the court accounted for the $11.1 million account receivable when it valued the Noteholders' post-petition collateral. The ultimate $513.6 million valuation reflects the Noteholders' security interest in the Timberlands and cash and cash equivalents as of the petition date. Contrary to the assertion of MRC/Marathon, the exhibit the court used to arrive at the value of Scopac's cash on hand on the petition date itemizes the $11.1 million in net accounts receivable Scopac had in May 2008 and segregates that amount from the court's starting point of $48.7 million. How much of the $11.1 million receivable consists of unpaid log deliveries is unstated, but a note to this exhibit indicates that accounts receivable are no longer being collected from Palco. The court may have made a mathematical error and deprived the Noteholders of this post-petition administrative priority claim. "Therefore, we remand for a determination of the value of this administrative priority claim and the extent to which effective relief is available," Judge Jones wrote. 5th Cir. Appeal of Confirmation Order On July 8, 2008, the Bankruptcy Court confirmed the Chapter 11 plan proposed by Mendocino Redwood Company, LLC and Marathon Structured Finance Fund L.P., Palco's secured lender and denied confirmation of a plan proposed by the indenture trustee of over $700 million in timber collateralized notes due 2028. The Bank of New York Mellon Trust Company, N.A., as Indenture Trustee, and other parties appealed the Confirmation Order to the Fifth Circuit Court of Appeals and requested the Fifth Circuit to stay the Confirmation Order pending appeal. Following the Fifth Circuit's denial of the request for a stay of the Confirmation Order, the MRC/Marathon Plan closed on July 30, 2008 and the Debtors emerged from bankruptcy. The Marathon/Mendocino Plan transferred the PALCO and Scopac assets, on the plan effective date, to Marathon and Mendocino in exchange for certain amounts, including the provision of more than $500 million to the timber noteholders. BoNY's plan contemplated PALCO and Scopac's continuation as a going concern until its sale on the Plan effective date, with a possible credit bid from noteholders. The bankruptcy judge held that the BoNY plan is not viable and feasible and fails to facilitate Scopac's reorganization but effects a foreclosure of the timberlands. About Pacific Lumber Based in Oakland, California, The Pacific Lumber Company and its subsidiaries operated in several principal areas of the forest products industry, including the growing and harvesting of redwood and Douglas-fir timber, the milling of logs into lumber and the manufacture of lumber into a variety of finished products. Scotia Pacific Company LLC, Scotia Development LLC, Britt Lumber Co., Inc., Salmon Creek LLC and Scotia Inn Inc. are wholly owned subsidiaries of Pacific Lumber. Scotia Pacific, Pacific Lumber's largest operating subsidiary, was established in 1993, in conjunction with a securitization transaction pursuant to which the vast majority of Pacific Lumber's timberlands were transferred to Scotia Pacific, and Scotia Pacific issued Timber Collateralized Notes secured by substantially all of Scotia Pacific's assets, including the timberlands. Pacific Lumber, Scotia Pacific, and four other subsidiaries filed for chapter 11 protection on Jan. 18, 2007 (Bankr. S.D. Tex. Case Nos. 07-20027 through 07-20032). Jack L. Kinzie, Esq., at Baker Botts LLP, is Pacific Lumber's lead counsel. Nathaniel Peter Holzer, Esq., Harlin C. Womble, Jr., Esq., and Shelby A. Jordan, Esq., at Jordan Hyden Womble Culbreth & Holzer PC, is Pacific Lumber's co-counsel. Kathryn A. Coleman, Esq., and Eric J. Fromme, Esq., at Gibson, Dunn & Crutcher LLP, acts as Scotia Pacific's lead counsel. Kyung S. Lee, Esq., at Diamond McCarthy LLP, is Scotia Pacific's co-counsel, replacing Porter & Hedges LLP. John D. Fiero, Esq., at Pachulski Stang Ziehl & Jones LLP, represents the Official Committee of Unsecured Creditors. When Pacific Lumber filed for protection from its creditors, it listed estimated assets and debts of more than $100 million. Scotia Pacific listed total assets of $932,000,000 and total debts of $765,978,335. The Debtors filed their Joint Plan of Reorganization on Sept. 30, 2007, which was amended on Dec. 20, 2007. Four other parties-in- interest have filed competing plans for the Debtors -- The Bank of New York Trust Company, N.A., as Indenture Trustee for the Timber Notes; the Official Committee of Unsecured Creditors; Marathon Structured Finance Fund L.P, the Debtors' DIP Lender and Agent under the DIP Credit Facility; and the Heartlands Commission, which represents the tribal members of the Bear River Band of Rohnerville Rancheria and PALCO employees. On July 8, 2008, the Court confirmed the Modified First Amended Joint Plan of Reorganization With Technical Modifications for the Debtors proposed by Marathon Structured Finance Fund L.P., Mendocino Redwood Company, LLC, and the Official Committee of Unsecured Creditors. The Debtors emerged from bankruptcy protection on July 30, 2008. The Reorganized Entities have been renamed as Humboldt Redwood Co., under the management of Mendocino Redwood. About MAXXAM Inc. Houston, Texas-based MAXXAM Inc. (NYSE Amex: MXM) currently conducts the substantial portion of its operations through its subsidiaries, which operate in two industries -- Residential and commercial real estate investment and development (primarily in second home or seasonal home communities), through MAXXAM Property Company and other wholly owned subsidiaries of the Company, as well as joint ventures; and racing operations, through Sam Houston Race Park, Ltd. a Texas limited partnership wholly owned by the Company, which owns and operates a Texas Class 1 pari-mutuel horse racing facility in the greater Houston metropolitan area, and a pari-mutuel greyhound racing facility in Harlingen, Texas. As of June 30, 2009, the Company had $370.3 million in total assets and $778.6 million in total liabilities, resulting in $408.3 million in stockholders' deficit Going Concern Doubt As reported by the Troubled Company Reporter on April 7, 2009, Grant Thornton LLP said the uncertainty surrounding the real estate industry and the ultimate outcome of proceedings involving MAXXAM Inc.'s former unit, Pacific Lumber Company, and their effect on the Company, as well as the Company's operating losses raise substantial doubt about the ability of the Company to continue as a going concern. MIRANT CORPORATION: Moody's Affirms 'B1' Corporate Family Rating ---------------------------------------------------------------- Moody's Investors Service affirmed the ratings of Mirant Corporation (B1 Corporate Family Rating) and its subsidiaries Mirant Mid-Atlantic, LLC (Ba1 pass through trust certificates), Mirant North America, LLC (Ba2 senior secured and B1 senior unsecured) and Mirant Americas Generation, LLC (B3 senior unsecured). Separately, Moody's affirmed Mirant's speculative grade liquidity rating at SGL-1. The rating outlook remains stable for Mirant, MIRMA, MNA and MAG. "The ratings affirmed for Mirant and its subsidiaries incorporate the company's forward hedging strategy, which has provided some near-term cushion against current challenging market conditions, and its good liquidity position" said Moody's Vice President Scott Solomon. "The rating, however, is tempered by Moody's expectation for reduced cash flow generation and downward pressure on the company's financial metrics over the near-term" added Solomon. Mirant's financial performance had been driven in large part by declining reserve margins and an increase in the price paid for power and capacity in the markets that Mirant operates. As a result, Mirant's key consolidated financial metrics (consolidated ratio of adjusted consolidated cash from operations before changes in working capital or CFO pre W/C to consolidated debt and CFO pre W/C to interest expense) have been strong for its rating category, averaging approximately 19% and 3.5 times, respectively, during the three year period ending 2008. The current weak state of the economy, however, has been a significant factor for an increase in natural gas supply and a reduction in electric demand. As a result, these factors have pressured power prices and Mirant's profitability margins to a certain degree. Mirant's strategy of hedging forward a significant portion of its base load capacity has provided near-term protection against current market conditions. That being said, the expiration of hedged positions over the near-term, which were entered into when power prices where stronger, are expected to cause a weakening of Mirant's CFO pre W/C to consolidated debt and CFO pre W/C to interest expense to a range of 10 to 15% and 2.2 to 3.0 times level, respectively, in 2010. While clearly lower, Moody's believe that the above cited ranges, when combined with the company's current good liquidity position, support Mirant's existing ratings. The SGL-1 rating reflects an expectation that Mirant's liquidity profile will remain good over the next four quarters as a result of an expected generation of a modest amount of free cash flow, maintenance of significant cash balances and continued access to substantial revolving credit availability. The company faces limited scheduled debt payments until 2011. Mirant's liquidity profile at June 30, 2009 was strong, consisting of approximately $1.9 billion of consolidated cash holdings and $600 million of availability under MNA's senior secured revolving credit facility due 2012. The only items outstanding against the revolving credit facility were letters of credit tied to its hedging program. MNA remains well within the required compliance with its two financial covenants and does not anticipate any need to drawn upon its senior secured credit facilities over the near term. Mirant's consolidated 2009 year-end liquidity is expected to well exceed $2 billion. Although MNA is in compliance with its financial covenants, it is currently restricted from making distributions by the free cash flow requirements under the restricted payment test. The primary factor lowering the free cash flow calculation for MNA is its significant capital expenditure program. The restriction, however, is not of significant analytical concern as (1) Mirant has significant unrestricted cash available, at its discretion, to make capital contributions to MNA and (2) the restricted payment test has a carveout that provides for distributions to MAG in an amount equal to the amount of interest payable by MAG. Given the amortization of MNA's senior secured term loan and voluntary repayment of MAG's senior unsecured notes due 2011, Moody's has revised its LGD point estimates for Mirant's subsidiaries: Mirant North America, LLC * $850 million 7.375% senior unsecured bonds due 2013 to LGD 4, 54% from LGD 4, 55%; * $755 million senior secured revolving credit facility due 2013 to LGD 2, 29% from LGD 2, 21%; * $376 million (originally $700 million) senior secured term loan due 2013 to LGD 2, 29% from LGD 2, 21%; Mirant Americas Generation, LLC * $535 million 8.3% senior unsecured notes due 2011 to LGD 5, 86% from LGD 5, 85%; * $450 million 8.5% senior unsecured notes due 2021 to LGD 5, 86% from LGD 5, 85%; * $400 million 9.125% senior unsecured notes due 2031 to LGD 5, 86% from LGD 5, 85%. The point estimate for Mirant Mid-Atlantic's approximately $873 million pass through certificates is unchanged at LGD 2, 15%. Moody's last rating action on Mirant and its subsidiaries occurred on December 20, 2007, when the CFR for Mirant was upgraded to B1 from B2. Mirant Corporation, headquartered in Atlanta, Georgia, is an independent power producer that owns or leases a portfolio of electricity generating facilities totaling approximately 10,300 megawatts. MTI TECHNOLOGY: Taps Elmer Martin as Reorganization Tax Counsel --------------------------------------------------------------- The U.S. Bankruptcy Court for the Central District of California authorized MTI Technology Corp. to employ Elmer Dean Martin III as reorganization tax counsel. Headquartered in Tustin, California, MTI Technology Corp. -- http://www.mti.com/-- was a global provider of end-to-end information infastructure for mid to large size companies. At the time of its bankruptcy filing, the Debtor had three primary groups of assets, the majority of which have now been sold: (1) European Subsidiaries - The Debtor owned all of the issued and outstanding capital sock of each of MTI Technology GmbH, incorporated in Germany, MTI Technology Limited, incorporated in Scotland, and MTI France S.A.S., incorporated in France. (2) A U.S.-based service division known as "Collective", which was acquired by the Debtor approximately 18 months ago. (3) A separate, U.S.-based sales and service division other than Collective. The Company filed for Chapter 11 protection on Oct. 15, 2007 (Bankr. C.D. Calif. Case No. 07-13347). Ivan L. Kallick, Esq., at Mannatt Phelps & Phil; Christine M. Fitzgerald, Esq., and Eve A. Marsella, Esq., at Clarkson, Gore & Marsella APLC, represent the Debtor as counsel. Omni Management Group LLC serves as the Debtor's claim, noticing and balloting agent. The U.S. Trustee for Region 16 appointed nine creditors to serve on an Official Committee of Unsecured Creditors in the Debtor's case. Winthrop Couchot Professional Corporation represents the Committee as general insolvency counsel. As of Aug. 21, 2007, the Debtor had total assets of $19,955,578 and total debts of $33,093,308. NCI BUILDING: Inks Lock-Up and Voting Agreement with Lenders ------------------------------------------------------------ NCI Building Systems, Inc., on October 8, 2009, entered into a lock-up and voting agreement with certain lenders under the Company's existing term loan credit agreement. Concurrently with the execution of the Term Lender Lock-Up Agreement, the Company entered into: (1) a third amendment to the Investment Agreement, dated as of August 14, 2009, by and between the Company and Clayton, Dubilier & Rice Fund VIII, L.P., as previously amended by that amendment, dated as of August 28, 2009, by and between the Company and the CD&R Fund and by that second amendment, dated as of August 31, 2009, by and between the Company and the CD&R Fund; and (2) an amendment to the Lock-Up and Voting Agreement, dated as of August 31, 2009, with holders of more than 79% of the Company's outstanding convertible notes, in each case, to accommodate the Term Lender Lock-Up Agreement. Including the Consenting Term Lenders, the Company has commitments or confirmation of intent from lenders holding more than two thirds of the outstanding principal amount of the term loans. Amendment to Investment Agreement In the Investment Agreement, the Company agreed to issue and sell to the CD&R Fund for an aggregate purchase price of $250 million, 250,000 shares of a newly created class of preferred stock, par value $1.00 per share, of the Company to be designated the Series B Cumulative Convertible Participating Preferred Stock. The closing of the Equity Investment is subject to the satisfaction or waiver of a number of closing conditions set forth in the Investment Agreement, including, among others: -- the consummation of an exchange offer by the Company to acquire all of the Company's existing 2.125% Convertible Senior Subordinated Notes due 2024 in exchange for a combination of cash and shares of common stock, par value $0.01 per share, of the Company, which exchange offer is subject to a number of conditions, including the tender of at least 95% of the aggregate principal amount of such convertible notes; -- the refinancing of the Company's existing credit agreement, including the partial prepayment of roughly $143 million in principal amount of the existing $293 million in principal amount of outstanding term loans thereunder and a modification of the terms and an amendment and extension of the maturity of the remaining $150 million outstanding balance of the term loans; and -- entry into a new $125 million asset-based revolving credit facility. Amendment No. 3, among other things, amends the terms of the refinancing of the Company's existing credit agreement contemplated by the Investment Agreement, such that: (1) the applicable margin for term loans under the new credit agreement would be increased by 100 basis points; (2) upon consummation of the restatement of the new credit agreement the Company would be required to use reasonable best efforts to obtain the full amount of any 2009 tax refunds that are legally due to the Company; (3) on or before the date that is 45 business days after the date on which 2009 tax refunds are received, the Company will be required to prepay a portion of the term loans under the new credit agreement equal to (a) the greater of (x) $10 million and (y) 50% of 2009 tax refunds actually received by the Company or its subsidiaries, minus (b) the aggregate principal amount of term loans previously prepaid or repurchased pursuant to the terms of the new credit agreement; and (4) a definition of "ABL Default Event" has been added to the form of Amended Credit Agreement that will provide that an ABL Default Event will have occurred if any of certain specified major events of default has occurred and is continuing, and the administrative agent or collateral agent under the ABL facility agreement has exercised any remedy provided for thereunder and has not rescinded such action. Term Lender Lock-Up Agreement On October 8, 2009, the Company entered the Term Lender Lock-Up Agreement with the Consenting Term Lenders. Pursuant to, and subject to the terms set forth in the Term Lender Lock-Up Agreement, each Consenting Term Lender has irrevocably agreed, among other things: -- to accept its share of the prepayment of roughly $143 million of the term loans outstanding under the existing credit agreement applicable to the obligations under the existing credit agreement held by it, and, with respect to the remaining obligations under the existing credit agreement held by it, to execute an amendment and restatement of the existing credit agreement substantially in the form of the form of Amended Credit Agreement; -- to the extent such Consenting Term Lenders hold or beneficially own, or serve as manager or investment advisor having the unrestricted power to vote or dispose of, any of the Company's outstanding convertible notes, to tender all such convertible notes in the Exchange Offer on the terms set forth in the Investment Agreement and -- to vote all obligations under the Company's existing credit agreement or all convertible notes held by it in favor of the prepackaged plan contemplated by the Investment Agreement. Each Consenting Term Lender also agreed, from and after the date of the Term Lender Lock-Up Agreement, not to directly or indirectly transfer any convertible note or term loan under the Company's existing credit agreement or interest therein other than a transfer that (1) does not require registration under the U.S. Securities Act of 1933, as amended, and (2) that is in accordance with the terms of the Company's existing credit agreement and the indenture under which the convertible notes were issued, as applicable, to (a) a transferee that is a Consenting Term Lender or any of its affiliates or (b) a transferee that is a "Qualified Institutional Buyer" within the meaning of Rule 144A promulgated under the Securities Act. Unless a transfer is being made to a Consenting Term Lender, such transfer must be pursuant to a privately negotiated transaction and the transferee must execute and deliver to the Company a joinder agreement pursuant to which the transferee agrees to be bound by the terms of the Term Lender Lock-Up Agreement. Under the Term Lender Lock-Up Agreement, and subject to the terms and conditions therein, among other things, the Company agreed that each term lender that, prior to the filing of the bankruptcy proceeding contemplated by the prepackaged plan, if applicable, executes an amendment and restatement of the existing credit agreement substantially in the form of the form of amended credit agreement contemplated by the Investment Agreement to give effect to the term loan refinancing will receive a consent fee equal to 2.0% of the aggregate principal amount of term loans held by such lender prior to giving effect to such refinancing and has also agreed that: (1) holders of convertible notes representing at least a majority of the outstanding convertible notes may submit proposed persons to serve as the initial "Unaffiliated Shareholder Directors" as of the closing of the transactions contemplated by the Investment Agreement, and the Company will consider in good faith any such proposed persons; (2) prior to the appointment of the initial Unaffiliated Shareholder Directors and prior to the closing of the Equity Investment, the Company will provide notice of the Company's proposed initial Unaffiliated Shareholder Directors; and (3) in the event that holders representing at least a majority of the outstanding convertible notes provide written notice to the Company that they object to the proposed initial Unaffiliated Shareholder Directors, the Company will propose alternative candidates to serve as the initial Unaffiliated Shareholder Directors so that at least one of the two initial Unaffiliated Shareholder Directors is acceptable to holders of convertible notes representing at least a majority of the outstanding convertible notes. In addition, except to the extent that the Common Stock received by the Consenting Term Lenders in the Exchange Offer has been previously registered under an effective registration statement and is freely tradable, the Company has agreed to enter into a registration rights agreement containing customary indemnification provisions for selling shareholders that will provide registration rights to the Consenting Term Lenders in the event that the transactions contemplated by the Equity Investment are consummated or, in the alternative, if the prepackaged plan is confirmed and the Common Stock received by the Consenting Term Lenders is not freely tradable pursuant to the provisions of Section 1145 of title 11 of the United States Code. Under such registration rights agreement, and subject to customary blackout periods in connection with earnings releases and material corporate developments, the Company will (1) no later than five business days following the closing of the Equity Investment or, in the alternative, the confirmation of the prepackaged plan, file with the U.S. Securities and Exchange Commission a "shelf" registration statement covering resales of the Common Stock received by the Consenting Term Lenders on a delayed or continuous basis and (2) use its best efforts to maintain the effectiveness of such registration until the earlier of (a) six months after the closing of the Equity Investment or, in the alternative, the confirmation of the prepackaged plan and (b) the date on which all such Common Stock held by the Consenting Term Lenders can be resold pursuant to Rule 144 of the Securities Act without limitation as to volume or compliance with any manner of sale requirements. If, however, during the six months after the closing of the Equity Investment or, in the alternative, the confirmation of the prepackaged plan, there is not "adequate current public information" with respect to the Company for purposes of resales of Common Stock under Rule 144(c) under the Securities Act, then the Company will use its best efforts to maintain the effectiveness of the registration until the earlier of (a) 12 months after the closing of the Equity Investment or, in the alternative, the confirmation of the prepackaged plan and (b) the date on which all such Common Stock held by the Consenting Term Lenders can be resold pursuant to Rule 144 of the Securities Act without limitation as to volume or compliance with any manner of sale requirements. The Term Lender Lock-Up Agreement may be terminated by holders of 66-2/3% of the convertible notes and term loans held by all Consenting Term Lenders under certain circumstances, including, among other things, if (1) an event occurs that would provide either the Company or the CD&R Fund with the right to terminate the Investment Agreement under the terms of the Investment Agreement, (2) the Investment Agreement is terminated; (3) there is a material breach of the Company's obligations under the Term Lender Lock-Up Agreement; (4) the economic terms of the transactions contemplated by the Investment Agreement are altered or amended in a manner adverse to the consenting lenders; (5) the consideration (or mix of consideration) being offered in the transactions contemplated by the Investment Agreement is altered or amended; (6) the other terms of the transactions contemplated by the Investment Agreement are altered or amended in a manner materially adverse to the Consenting Term Lenders; or (7) the minimum tender condition of the proposed Exchange Offer is altered or amended, or an amendment to the Company's existing credit agreement as contemplated by the Investment Agreement is executed and in effect and, at such time, such amendment is not binding on all lenders under the Company's existing credit agreement. Amendment to the Existing Lock-Up Agreement On October 8, 2009, concurrently with the execution of Amendment No. 3 and the Term Lender Lock-Up Agreement, the Company entered into an amendment to the Existing Lock-Up Agreement. The amendment, among other things, modifies the definition of Transactions to accommodate the Term Lender Lock-Up Agreement and the amendment contemplated thereby of certain terms of the form of Amended Credit Agreement. A full-text copy of Amendment No. 3, dated as of October 8, 2009, to the Investment Agreement, dated as of August 14, 2009, by and between NCI Building and Clayton, Dubilier & Rice Fund VIII, L.P., including the Amended Terms of the Term Loan Refinancing, is available at no charge at http://ResearchArchives.com/t/s?469c A full-text copy of the Lock-Up and Voting Agreement, dated as of October 8, 2009, by and among NCI and the signatories thereto, is available at no charge at http://ResearchArchives.com/t/s?469d A full-text copy of Amendment No. 1, dated as of October 8, 2009, to the Lock-Up and Voting Agreement, dated as of August 31, 2009, by and among NCI Building and the signatories thereto, is available at no charge at http://ResearchArchives.com/t/s?469e About NCI Building NCI Building Systems, Inc. (NYSE: NCS) is one of North America's largest integrated manufacturers of metal products for the nonresidential building industry. NCI is comprised of a family of companies operating manufacturing facilities across the United States and Mexico, with additional sales and distribution offices throughout the United States and Canada. NCI is proposing a financial restructuring to address an immediate need for liquidity in light of a potentially imminent default under, and acceleration of, its existing credit facility, which may occur as early as November 6, 2009 (which may, in turn, also lead to a default under, and acceleration of, its other indebtedness, including the $180.0 million in principal amount of 2.125% Convertible Senior Subordinated Notes due 2024, and the high likelihood that it will be required to repurchase the convertible notes on November 15, 2009, the first scheduled mandatory repurchase date under the convertible notes indenture A copy of NCI's Preliminary Prospectus/Disclosure Statement is available at no charge at http://ResearchArchives.com/t/s?4626 As of August 2, 2009, the Company had $627.63 million in total assets; and $624.23 million in total current liabilities and $21.62 million in total long-term liabilities. NEXCEN BRANDS: Appoints Lane as VP & Chief Accounting Officer ------------------------------------------------------------- NexCen Brands, Inc., has appointed Brian D. Lane as Vice President, Chief Accounting Officer. He will report to Mark Stanko, Chief Financial Officer. Mr. Lane commenced his employment on September 28, 2009. In this capacity, Mr. Lane will serve as the Company's principal accounting officer assuming such duties from Mark Stanko, the Company's Chief Financial Officer, effective on October 5, 2009. Mr. Lane, 47, will be responsible for overseeing the Company's SEC reporting and corporate accounting functions as well as managing its accounting policies and procedures. Previously, on September 14, 2009, the Company entered into an Offer Letter with Mr. Lane which detailed the terms of his subsequent employment. Prior to joining the Company, from 2008 to 2009, Mr. Lane served as Chief Accounting Officer for Altisource Portfolio Solutions, a financial services company. From 2005 to 2008, Mr. Lane held the position of Controller for the Credit Card Division of CompuCredit Corporation, a financial services company. From 1998 to 2005, Mr. Lane was the Chief Financial Officer for Blimpie International, Inc., a franchisor of quick service restaurant brands. Mr. Lane started his career with Ernst & Young LLP, where he served both public and private companies during his 11 years with that firm. Mr. Lane received a BBA in accounting from the University of Georgia. He is a certified public accountant. Offer Letter Summary Pursuant to the Offer Letter, Mr. Lane will receive an initial annual base salary, subject to periodic review and upward adjustment, as well as various perquisites and benefits. Mr. Lane may be eligible to receive a performance-based bonus, at the Company's sole discretion or pursuant to the Company's bonus plan then in effect. Mr. Lane will also be eligible to receive a stock option grant of the Company's common stock, at the sole discretion of the Company and subject to the approval of the Company's Compensation Committee, under the terms of the Company's 2006 Long Term Equity Incentive Plan. Either the Company or Mr. Lane may terminate Mr. Lane's employment, at will, with or without cause for any reason whatsoever. Pursuant to the Offer Letter, Mr. Lane also executed an employee representation letter on September 14, 2009. Under the terms of the employee representation letter, which is signed by all employees of the Company, Mr. Lane acknowledged his obligations, during and after his employment with the Company, with respect to (i) confidential information, (ii) records and other property of the Company, (iii) non-solicitation of customers and employees, and (iv) non-disparagement of the Company and non-interference with the Company's business relationships. Kenneth J. Hall, Chief Executive Officer of NexCen Brands, Inc., stated, "We are very pleased to have Brian join NexCen Brands and further expand our accounting team. His many years of experience in accounting and finance combined with his leadership skills in a number of industries, including franchising, will be a strong asset to the Company. We look forward to Brian's contributions as we continue to enhance our financial reporting processes." About NexCen Brands NexCen Brands, Inc. (PINK SHEETS: NEXC.PK) is a strategic brand management company with a focus on franchising. It owns a portfolio of franchise brands that includes two retail franchise concepts: TAF(TM) and Shoebox New York(R), as well as five quick service restaurant (QSR) franchise concepts: Great American Cookies(R) MaggieMoo's(R), Marble Slab Creamery(R), Pretzelmaker(R) and Pretzel Time(R). The brands are managed by NexCen Franchise Management, Inc., a subsidiary of NexCen Brands. As of March 31, 2009, the Company had $111,484,000 in total assets against $158,750,000 in total liabilities, resulting in $47,266,000 in stockholders' deficit. NEXCEN BRANDS: KPMG Raised Going Concern After 2008 Results ----------------------------------------------------------- KPMG LLP, in New York, N.Y., expressed substantial doubt about NexCen Brands, Inc.'s ability to continue as a going concern after auditing the Company's consolidated financial statements for the year ended December 31, 2008. The auditing firm said that the Company faces certain liquidity uncertainties. NexCen Brands, Inc., reported a net loss of $255.8 million for the year ended December 31, 2008, compared with a net loss of $4.9 million for the year ended December 31, 2007. The Company recognized $47.0 million in revenues in 2008, an increase of $27.4 million, or 140%, over $19.6 million in revenues for 2007. The increase in revenues reflect full-year operating revenues in 2008 for Marble Slab Creamery (acquired in February 2007), MaggieMoo's (acquired in February 2007), Pretzel Time (acquired in August 2007) and Pretzelmaker (acquired in August 2007), and the partial-year operating revenues from Great American Cookies (acquired in January 2008). Of the $47.0 million in revenues recognized in 2008, $24.8 million related to royalties, an increase of $9.0 million, or 57%, over 2007; $3.6 million related to franchise fees, an increase of approximately $200,000, or 5%, over 2007; and $1.3 million related to licensing and other revenues, an increase of approximately $900,000, or 209%, over 2007. The remaining $17.3 million in 2008 revenues were from the sales of cookie dough and other ancillary products to the Company's Great American Cookies franchisees. Total operating expenses were $194.2 million in 2008, an increase of $167.5 million from $26.7 million in 2007. The Company said that this year-over-year increase is not indicative of future operating expenses, as the increase encompasses many significant expenses that are specific to the events of 2008, including impairment charges related to intangible assets of $137.9 million, $3.9 million in professional fees related to special investigations and $1.1 million in restructuring charges. Excluding impairment charges related to intangible assets, professional fees related to special investigations and restructuring charges, operating expenses in 2008 were $51.3 million, an increase of $24.6 million, or 92%, from 2007. This increase reflects the additional expenses incurred by the Company in operating the brands that it acquired, including $11.5 million in cost of sales, a $10.0 million increase in SG&A expenses, a $1.5 million increase in corporate and franchising professional fees, and a $1.6 million increase in depreciation and amortization. Loss from continuing operations before income taxes was $159.6 million in 2008, an increase of $151.6 million from a loss of $8.0 million in 2007. In 2008, the Company recorded net losses from discontinued operations of $102.2 million. This amount includes $53.8 million of operating loss (including impairment charges of $66.9 million) from Bill Blass and Waverly which comprised the Company's Consumer Branded Products business, a net loss of approximately $10.6 million on the sale of those businesses, an impairment of UCC Capital goodwill of $37.5 million, and approximately $800,000 in net loss from the Company's discontinued UCC Capital loan servicing business. In 2007, the Company recognized net income from discontinued operations of $4.0 million. Balance Sheet At December 31, 2008, the Company's consolidated balance sheet showed $113.9 million in total assets and $163.4 million in total liabilities, resulting in a $49.5 million stockholders' deficit. The Company's consolidated balance sheet at December 31, 2008, also showed strained liquidity with $18.4 million in total current assets available to pay $18.7 million in total current liabilities. Financial Condition During 2008, total assets decreased by approximately $246 million, while total liabilities decreased by approximately $200,000. These changes reflect the acquisitions of assets related to Great American Cookies, offset by the sale of assets related to Bill Blass and Waverly, a decrease in cash used for acquisitions and operating expenses, and a decrease in the value of intangible assets. As of December 31, 2008, the Company had approximately $8.3 million cash on hand. The Company also had long-term restricted cash of $940,000, used to secure letters of credit issued as security deposits on the Company's leased facilities. The Company anticipates that cash generated from operations will provide it with sufficient liquidity to meet the expenses related to ordinary course operations, including debt service obligations, for at least the next twelve months. The Company says that nonetheless, market and economic conditions may worsen and negatively impact its franchisees and its ability to sell new franchises. The Company adds that it is highly leveraged and that it has no additional borrowing capacity under the current BTMU Capital Corporation credit facility; and the current BTMUCC credit facility imposes restrictions on its ability to freely access the capital markets. In addition, the current BTMUCC credit facility imposes various restrictions on the use of cash generated by operations. Net cash used in operating activities was $10.4 million in 2008, compared to net cash used in operating activities of $3.4 million in 2007. The cash used in operating activities in 2008 reflects cash generated from operations offset by an increase to working capital. Cash used in operating activities in 2007 primarily reflects increases in accounts receivable, prepaid expenses and other assets reflecting growth in the businesses the Company acquired. Net cash used in investing activities was $56.6 million in 2008, primarily used for the acquisition of Great American Cookies, offset by proceeds of $35.4 million from the sale of the Company's Consumer Branded Products business. Net cash used in investing activities was $146.2 million in 2007 primarily used for the acquisitions of Bill Blass, Marble Slab, MaggieMoo's, Waverly, Pretzel Time, and Pretzelmaker. Net cash provided by financing activities in 2008 was $28.7 million, which primarily reflects the borrowing of $70.0 million under the January 2008 Amendment to the original BTMUCC credit facility, offset by principal repayments in 2008 of approximately $37.9 million. Net cash provided by financing activities in 2007 of $112.6 million primarily reflects borrowing on the original BTMUCC credit facility, as well as $2.5 million received by the Company from the sale of minority interest in BB Jeans, LLC. Full-text copies of the Company's consolidated financial statements for the year ended December 31, 2008 are available for free at http://researcharchives.com/t/s?4696 Based in New York, NexCen Brands, Inc. (PINK SHEETS: NEXC.PK) -- http://www.nexcenbrands.com/-- is a strategic brand management company that owns and manages a portfolio of seven franchised brands, operating in a single business segment: Franchising. Five of the Company's brands (Great American Cookies, Marble Slab Creamery, MaggieMoo's, Pretzel Time and Pretzelmaker) are in the quick service restaurant industry. The other two brands (The Athlete's Foot and Shoebox New York) are in the retail footwear and accessories industry. All seven franchised brands are managed by NexCen Franchise Management, Inc., a wholly owned subsidiary of the Company. The Company's franchise network, across all of its brands, consists of approximately 1,750 retail stores in approximately 40 countries. In 2008, the Company narrowed its business model to focus only on its franchised brands. Previously, the Company had owned and licensed the Bill Blass consumer products brand in the apparel industry and the Waverly consumer products brand in the home goods industry. The Company sold the Waverly brand on October 3, 2008, and the Bill Blass brand on December 24, 2008. NEXCEN BRANDS: Had $865,000 Net Loss in First Quarter ----------------------------------------------------- NexCen Brands, Inc., reported a net loss of $865,000 on revenues of $11.9 million for the first quarter ended March 31, 2009, compared with a net loss of $5.3 million on revenues of $10.2 million in the same period of 2008. The $1.7 million quarter-over-quarter increase in revenues reflects full quarter operating revenues from Great American Cookies (acquired on January 28, 2008). Total operating expenses for the three months ended March 31, 2009, were $10.1 million, a decrease of $2.7 million, or 21%, from $12.8 million for the 2008 comparable quarter. The Company says the decrease in operating expenses reflects its ongoing cost reduction measures that began in May 2008 along with reduced stock compensation expenses, slightly offset by increases in cost of sales and depreciation and amortization. Operating income was $1.8 million in first quarter 2009, compared to an operating loss of $2.6 million in the first quarter of 2008. The Company's loss from continuing operations in the first quarter of 2009 was $732,000, an improvement from a loss in the first quarter of 2008 of $6.4 million. For the three months ended March 31, 2009, the Company recognized a net loss from discontinued operations of $133,000, resulting primarily from wind-down activities of NexCen's Consumer Branded products business. For the three months ended March 31, 2008, the Company recognized net income from discontinued operations of $1.1 million, consisting primarily of net income from Bill Blass and Waverly, which comprised the Company's Consumer Branded Products business. Balance Sheet At March 31, 2009, the Company's consolidated balance sheet showed $111.5 million in total assets and $158.8 million in total liabilities, resulting in a $47.3 million stockholders' deficit. As of March 31, 2009, the Company had a total of approximately $8.3 million of cash on hand, including short-term restricted cash of $1.0 million. This compares to cash on hand of approximately $8.3 million as of December 31, 2008. Cash Flow from Operations Cash generated from operations was $357,000 in the first quarter of 2009 compared to cash used in operations of $4.2 million in the first quarter of 2008. Cash provided by operating activities as of March 31, 2009, improved by $4.6 million between the respective periods, reflecting a reduction in net loss of $5.6 million (from continuing operations), as a result of cost containment and other measures taken by the Company, partially offset by a decrease of roughly $600,000 in working capital. NexCen Brands anticipates that cash generated from operations will provide the Company with sufficient liquidity to meet the expenses related to ordinary course operations, including debt service obligations, for at least the next twelve months. The Company says that nonetheless, market and economic conditions may worsen and negatively impact its franchisees and its ability to sell new franchises. The Company adds that it is highly leveraged and that it has no additional borrowing capacity under the BTMU Capital Corporation credit facility; and the BTMUCC credit facility imposes restrictions on its ability to freely access the capital markets. In addition, the BTMUCC credit facility imposes various restrictions on the use of cash generated by operations. Company Debt The Company's debt was $142.5 million at March 31, 2009, compared to $142.3 million at December 31, 2008. Full-text copies of the Company's first quarter 2009 financial statements are available for free at: http://researcharchives.com/t/s?46a1 Going Concern Doubt As reported in the TCR on October 12, 2009, KPMG LLP, in New York, N.Y., expressed substantial doubt about NexCen Brands, Inc.'s ability to continue as a going concern after auditing the Company's consolidated financial statements for the year ended December 31, 2008. The auditing firm said that the Company faces certain liquidity uncertainties. NexCen Brands, Inc.reported a net loss of $255.8 million for the year ended December 31, 2008, compared with a net loss of $4.9 million for the year ended December 31, 2007. At December 31, 2008, the Company's consolidated balance sheet showed $113.9 million in total assets and $163.4 million in total liabilities, resulting in a $49.5 million stockholders' deficit. Full-text copies of the Company's consolidated financial statements for the year ended December 31, 2008 are available for free at http://researcharchives.com/t/s?4696 Based in New York, NexCen Brands, Inc. (PINK SHEETS: NEXC.PK) -- http://www.nexcenbrands.com/-- is a strategic brand management company that owns and manages a portfolio of seven franchised brands, operating in a single business segment: Franchising. Five of the Company's brands (Great American Cookies, Marble Slab Creamery, MaggieMoo's, Pretzel Time and Pretzelmaker) are in the quick service restaurant industry. The other two brands (The Athlete's Foot and Shoebox New York) are in the retail footwear and accessories industry. All seven franchised brands are managed by NexCen Franchise Management, Inc., a wholly owned subsidiary of the Company. The Company's franchise network, across all of its brands, consists of approximately 1,750 retail stores in approximately 40 countries. In 2008, the Company narrowed its business model to focus only on its franchised brands. Previously, the Company had owned and licensed the Bill Blass consumer products brand in the apparel industry and the Waverly consumer products brand in the home goods industry. The Company sold the Waverly brand on October 3, 2008, and the Bill Blass brand on December 24, 2008. NTK HOLDINGS: Secures Commitment for $250MM Financing for Prepack ----------------------------------------------------------------- Nortek, Inc. announced October 9 that it has secured a commitment for a $250-million asset-based revolving credit facility in conjunction with its prepackaged plan of reorganization, which includes an undertaking to use commercially reasonable efforts to form a syndicate of lenders to increase the facility to $300 million. The credit facility, which will be available upon consummation of the Prepackaged Plan, will be provided by a group of lenders including Bank of America, N.A.; GE Capital, Restructuring Finance; Wells Fargo Foothill LLC; Wells Fargo Foothill Canada ULC; and PNC Bank National Association. Nortek said proceeds from the credit facility will be used primarily to replace the existing facility, and for payment of certain fees and expenses in connection with the transaction, working capital, and other general corporate purposes. Nortek has previously announced that it has reached agreements to accept the terms of Nortek's Prepackaged Plan with note holders representing more than 66 2/3% of the outstanding amounts of its 8 1/2% Senior Subordinated Notes due 2014, as well as a substantial portion of the outstanding amount of its 10% Senior Secured Notes due 2013. Richard L. Bready, Nortek Chairman and Chief Executive Officer, said, "We are pleased that the company was able to secure exit financing at this early stage of our reorganization process. The financing will provide the reorganized company with liquidity for working capital and ensure that trade creditors, suppliers and employees continue to receive all amounts owed to them in the ordinary course of business." On September 18, 2009, Nortek announced that it had begun a solicitation of votes from certain of its creditors for its Prepackaged Plan. Upon completion of the solicitation, Nortek intends to implement the reorganization plan through the commencement of Chapter 11 cases by Nortek and its domestic subsidiaries. When concluded, the agreements and subsequent reorganization will eliminate approximately $1.3 billion in total indebtedness. The Company said votes from note holders must be received by Financial Balloting Group LLC ("FBG"), Nortek's voting agent, before October 16, 2009 at 5:00 p.m. Solicitation materials have been provided to creditors of record entitled to vote on the Prepackaged Plan. Note holders who need additional information regarding the balloting process or solicitation materials can contact FBG at 646-282-1800. A full-text copy of the Disclosure Statement is available at no charge at http://ResearchArchives.com/t/s?4526 The Company had funded debt at July 4, 2009 of $2.27 billion, consisting of: (in millions) ------------- NTK Holdings' 10 3/4% Senior Discount Notes due 2014, net of unamortized discount of approximately $6.9 million $396.1 NTK Holdings' senior unsecured loan facility due 2014, including approximately $69.9 million of debt accretion related to the PIK option 271.7 Nortek's 10% Senior Secured Notes due 2013, net of unamortized discount of $6.5 million 743.5 Nortek's 8 1/2% Senior Subordinated Notes due 2014 625.0 Nortek's ABL Facility 165.0 Nortek's long-term notes, mortgage notes and other indebtedness 36.9 Nortek's short-term bank obligations 18.4 Nortek's 9 7/8% Senior Subordinated Notes due 2011, including unamortized premium 10.0 --------- Consolidated debt at July 4, 2009 $2,266.6 About NTK Holdings NTK Holdings Inc., the parent company of Nortek Holdings and Nortek Inc., is a diversified global manufacturer of branded residential and commercial ventilation, HVAC and home technology convenience and security products. NTK Holdings and Nortek offer a broad array of products including range hoods, bath fans, indoor air quality systems, medicine cabinets and central vacuums, heating and air conditioning systems, and home technology offerings, including audio, video, access control, security and other products. As reported by the TCR on Sept. 4, 2009, NTK Holdings, Inc., and Nortek, Inc. entered into a restructuring and lockup agreement with bondholders to effectuate a comprehensive restructuring of the Company's debt under Chapter 11. When concluded, the Agreement will eliminate approximately $1.3 billion in total indebtednes by, among other things, exchanging debt to bondholders for equity in the Company. The Company will file its bankruptcy petition, together with a pre-packaged Chapter 11 plan following the conclusion of the solicitation period. The Company has tapped Blackstone Group and Weil, Gotshal & Manges to aid in its restructuring effort. NTK Holdings and its units have assets of $1,655,200,000, against debts of $2,778,100,000 as of July 4, 2009 NUVEEN INVESTMENTS: Says Progress Continues in ARPs Refinancing --------------------------------------------------------------- Nuveen Investments Inc. said progress continues in the refinancing of Auction Rate Preferred securities, which were used as leverage in 100 of the Company's closed-end funds when the ARPs market froze in early 2008. Nuveen Investments made the disclosure at the Deutsche Bank Leveraged Finance Conference on October 1. Nuveen Investments said the $500 million second lien debt refinancing in July and August improved its financial flexibility. Proceeds of the refinancing were used to provide payment of $223 million of Senior Notes due 2010 and pay down some of the outstanding $2.33 billion of Senior Secured Term Loan, which matures in 2014. Nuveen said current strategic focus is on growing Mutual Fund and Institutional business while maintaining leadership positions in Retail Managed Accounts and Closed-end Funds. A copy of the Company's presentation slides shown by Nuveen Investments on October 1, 2009, is available at no charge at: http://ResearchArchives.com/t/s?464e Nuveen obtained a new $450 million second-lien term loan facility on July 28, 2009, pursuant to an amendment to the Credit Agreement, dated as of November 13, 2007, among Windy City Investments, Inc., the Company, the lenders from time to time party thereto, and Deutsche Bank AG New York Branch, as administrative agent for the Lenders. The First Amendment provided the Company with the option to request one or more additional tranches of Additional Term Loans, subject to certain limitations, up to an aggregate amount not to exceed $50 million. In light of favorable market conditions, the Company elected to borrow the full $50 million pursuant to an Incremental Second-Lien Term Loan Agreement, dated as of August 11, 2009, among Windy City, the Company, the Administrative Agent, the Guarantors party thereto and the Incremental Second-Lien Term Loan Lenders party thereto. The Incremental Additional Term Loans are subject to the same terms and conditions of the Credit Agreement as the Additional Term Loans. Affiliates of certain investors in the indirect parent company of the Company acted as arrangers in connection with this financing and received customary fees. With the net cash proceeds of the Incremental Additional Term Loans, the Company repaid $45,407,250 of existing first-lien term loans issued under the Credit Agreement at par. A full-text copy of the First Amendment to Credit Agreement is available at no charge at http://ResearchArchives.com/t/s?43aa A full-text copy of the Incremental Agreement is available at no charge at http://ResearchArchives.com/t/s?43a6 As of June 30, 2009, Nuveen had total assets of $6,374,384,000 and total liabilities of $5,423,871,000. Nuveen Investments, Inc., headquartered in Chicago, is a U.S.- domiciled holding company whose subsidiaries provide investment management products and services to retail and institutional investors predominantly in the US. The company's assets under management were $128 billion as of June 30, 2009. Nuveen Investments carries Moody's B3 senior secured debt rating, Caa1 corporate family rating, and Caa3 senior unsecured debt rating. OXIS INT'L: Has Standstill and Forbearance Deal with Bristol ------------------------------------------------------------ In connection with the sale of securities by Oxis International, Inc., on October 1, 2009, the Company and Bristol Investment Fund, Ltd., entered a Standstill and Forbearance Agreement. The Company and Bristol are parties to the Securities Purchase Agreement, dated October 25, 2006, pursuant to which the Company issued to Bristol convertible debentures, of which $2,689,958 remain currently outstanding, inclusive of principal and interest. The Company acknowledges that an Event of Default has occurred under the October 2006 Debentures, including failure to pay outstanding principal amount on the Maturity Date and failure to pay the Monthly Redemption Amount. As a result of the occurrence and continuation of the Existing Defaults, Bristol is entitled to, among other things, immediately enforce its rights and remedies against the Company. Bristol agreed to refrain and forbear from exercising certain rights and remedies with respect to (i) certain convertible debentures -- October 2006 Debentures -- issued pursuant to the Securities Purchase Agreement, dated October 25, 2006 and (ii) demand notes issued by the Company on October 8, 2008, March 19, 2009, April 7, 2009, April 28, 2009, May 21, 2009 and June 25, 2009x. In connection with the sale of the October 2009 Securities by the Company, the Company and Bristol have also entered into a waiver agreement pursuant to which Bristol waived certain rights with respect to the October 2006 Debentures and Bridge Notes. About Oxis International Oxis International, Inc., is currently engaged in the development of neutraceutical products for sale to general consumers. This activity had minimal sales during 2008. Thus, most of the financial performance discussion relates to products and product lines not owned or engaged in by Oxis for much of 2008 and these operations are not a part of the on-going business into 2009. As of December 31, 2008, Oxis had $590,000 in total assets and $4,270,000 in total liabilities, resulting in $3,680,000 stockholders' deficit. Oxis said it has incurred an accumulated deficit of $74,854,000 through December 31, 2008. Its cash holdings were $22,000 at December 31, 2008. Oxis will need to seek additional debt or equity financing to pay for basic operating costs, to expand operations, implement its marketing campaign, or hire additional personnel. However, it may not successfully obtain debt or equity financing on terms acceptable to it, or at all, that will be sufficient to finance operating costs in 2009 and its other goals. If additional financing is not available or is not available on acceptable terms, Oxis will have to curtail operations. As of August 31, 2009, Oxis was 31 months behind in payments under its secured convertible debentures. The Company said it did not have and currently does not have the financial capability to make the required payments. OXIS INT'L: Raises $2MM by Selling Securities to Investors ---------------------------------------------------------- Oxis International, Inc., on October 1, 2009, entered into a financing arrangement with several accredited investors, pursuant to which it sold various securities in consideration of a maximum aggregate purchase price of $2,000,000. In connection with the October 2009 Financing, the Company issued these securities to the October 2009 Investors: -- 0% Convertible Debentures in the principal amount of $2,000,000 due 24 months from the date of issuance, convertible into shares of the Company's common stock at a per share conversion price equal to $0.05 per share; -- Series A warrant to purchase such number of shares of the Company's common stock equal to 50% of the principal amount invested by each investor resulting in the issuance of Class A Warrants to purchase 20,000,000 shares of common stock of the Company. -- Series B warrant to purchase such number of shares of the Company's common stock equal to 50% of the principal amount invested by each investor resulting in the issuance of Class B Warrants to purchase 20,000,000 shares of common stock of the Company. The full principal amount of the Debentures is due upon default under the terms of the Debentures. The Class A Warrants and Class B Warrants are exercisable for up to five years from the date of issue at a per share exercise price equal to $0.0625 and $0.075 for the Class A Warrants and the Class B Warrants, respectively, on a cash or cashless basis. The Company and the October 2009 Investors have agreed to place the proceeds from the October 2009 Financing in escrow. On a monthly basis, the Company and the nominee for the October 2009 Investors will send a joint statement, subject to settlement with existing creditors, to the escrow agent for the release of funds. The conversion price and the exercise price will be subject to full ratchet anti-dilution adjustment in the event that the Company issues, after the closing date, common stock or common stock equivalents at a price per share less than the conversion price associated with the Debentures or the exercise price associated with the Warrants and to other normal and customary anti-dilution adjustment upon certain other events. From October 8 until such time the Debentures are no longer outstanding, if the Company effects a subsequent financing, the October 2009 Investors may elect, in their sole discretion, to exchange all or some of the October 2009 Debentures (but not the Warrants) for any securities or units issued in a subsequent financing on a $1.00 for $1.00 basis or to have any particular provisions of the subsequent financing legal documents apply to the documents utilized for the October 2009 Financing. If at any time after October 8, the Company will determine to prepare and file with the Commission a registration statement relating to an offering for its own account or the account of others, then it will include the shares of common stock underlying the Securities on the registration statement. The Company will file a proxy or information statement with the Commission no later than 30 days from the Closing Date and use its best efforts to obtain, on or before October 31, 2009, the approvals of the Company's stockholders as may be required to issue all of the shares of common stock issuable upon conversion or exercise of the Debentures and the Warrants. Upon obtaining the Stockholder Approval and complying with the required filing, the Company will file a certificate of amendment to its certificate of incorporation with the State of Delaware. The October 2009 Investors have contractually agreed to restrict their ability to convert the Debentures and exercise the Warrants and receive shares of the Company's common stock such that the number of shares of the Company common stock held by an October 2009 Investor and its affiliates after the conversion or exercise does not exceed 4.9% of the Company's then issued and outstanding shares of common stock. A full-text copy of the Securities Purchase Agreement by and between Oxis International, Inc. and the October 2009 Investors dated October 1, 2009, is available at no charge at http://ResearchArchives.com/t/s?46aa About Oxis International Oxis International, Inc., is currently engaged in the development of neutraceutical products for sale to general consumers. This activity had minimal sales during 2008. Thus, most of the financial performance discussion relates to products and product lines not owned or engaged in by Oxis for much of 2008 and these operations are not a part of the on-going business into 2009. As of December 31, 2008, Oxis had $590,000 in total assets and $4,270,000 in total liabilities, resulting in $3,680,000 stockholders' deficit. Oxis said it has incurred an accumulated deficit of $74,854,000 through December 31, 2008. Its cash holdings were $22,000 at December 31, 2008. Oxis will need to seek additional debt or equity financing to pay for basic operating costs, to expand operations, implement its marketing campaign, or hire additional personnel. However, it may not successfully obtain debt or equity financing on terms acceptable to it, or at all, that will be sufficient to finance operating costs in 2009 and its other goals. If additional financing is not available or is not available on acceptable terms, Oxis will have to curtail operations. As of August 31, 2009, Oxis was 31 months behind in payments under its secured convertible debentures. The Company said it did not have and currently does not have the financial capability to make the required payments. PAETEC HOLDING: Registers 8-7/8% Notes for Exchange Offer --------------------------------------------------------- PAETEC Holding Corp. filed with the Securities and Exchange Commission AMENDMENT NO. 1 TO FORM S-4 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 to register $350,000,000 8-7/8% Senior Secured Notes due 2017 and Guarantees of 8-7/8% Senior Secured Notes due 2017. PAETEC Holding is offering to exchange up to $350,000,000 8-7/8% Senior Secured Notes due 2017 which have been registered under the Securities Act of 1933 for any and all outstanding 8-7/8% Senior Secured Notes due 2017. The Exchange Offer: -- The notes have been registered under the Securities Act of 1933, as amended, and are being offered in exchange for the outstanding, unregistered notes, or "original notes," that the Company issued on June 29, 2009. -- The Company will exchange all original notes that are validly tendered and not withdrawn prior to the expiration of the exchange offer for an equal principal amount of exchange notes. -- The exchange offer will expire at 5:00 p.m., New York City time, on November 2, 2009, unless extended by the Company. -- The Company may withdraw tendered outstanding original notes at any time prior to the expiration of the exchange offer. -- The exchange of outstanding original notes for exchange notes pursuant to the exchange offer generally will not be a taxable event for U.S. federal income tax purposes. -- The Company will not receive any proceeds from the exchange offer. The Exchange Notes: -- The terms of the exchange notes will be substantially identical to the terms of the original notes, except that the exchange notes are registered under the Securities Act, and the transfer restrictions, registration rights and related additional interest terms applicable to the original notes will not apply to the exchange notes. -- The exchange notes will mature on June 30, 2017. The Company will pay interest on the exchange notes semi- annually on June 30 and December 31 of each year, commencing on December 31, 2009. -- The exchange notes will be guaranteed on a senior secured basis by each of the Company's domestic restricted subsidiaries in existence on the issue date of the original notes and by all of the Company's domestic restricted subsidiaries thereafter, other than certain excluded subsidiaries. -- The exchange notes and the guarantees will be secured on a first-priority basis, equally and ratably with the Company's senior secured credit facilities and any future pari passu secured obligations, subject to permitted liens, by substantially all of the Company's assets. -- The Company does not intend to list the exchange notes on any securities exchange. A full-text copy of the prospectus is available at no charge at: http://ResearchArchives.com/t/s?4653 About PAETEC Holding PAETEC Holding Corp., through its subsidiaries, provides integrated communications services, including local and long distance voice, data, and broadband Internet access services, primarily to business and institutional customers. On February 8, 2008, PAETEC Holding completed its combination by merger with McLeodUSA Incorporated, which became a wholly owned subsidiary of PAETEC Holding upon completion of the merger. As of June 30, 2009, PAETEC had in service 223,311 digital T1 transmission lines, which represented the equivalent of 5,359,464 access lines, for over 47,000 business customers in a service area encompassing 82 of the country's top 100 metropolitan statistical areas. As of June 30, 2009, the Company had $1,453,905,000 in total assets and $1,259,830,000 in total liabilities. Effective on June 1, 2009, the Company entered into a Second Amendment and Waiver to its Credit Agreement with its lenders which amends the Credit Agreement, dated as of February 28, 2007, and amended as of June 27, 2007. The Amendment grants the Company the right, at its option and subject to specified conditions, voluntarily to prepay term loans outstanding under its term loan facilities at any time and from time to time during a period beginning on the effective date of the Amendment and ending 18 months after such effective date. The total cash payments to be made by the Company in connection with such voluntary prepayments may not exceed $100,000,000, excluding amounts applied to the payment of accrued and unpaid interest and fees. The Amendment also modifies some of the restrictive covenants in the Credit Agreement primarily to permit the Company to issue senior secured notes and to allow the Company and its subsidiaries to incur indebtedness and related obligations under such notes if specified conditions are satisfied. * * * As reported by the Troubled Company Reporter on June 18, 2009, Standard & Poor's Ratings Services assigned PAETEC Holding's proposed senior secured notes due 2017 an issue-level rating of 'B' (the same as the corporate credit rating) with a recovery rating of '3', indicating expectations for meaningful (50%-70%) recovery in the event of payment default. At the same time, S&P affirmed all other ratings on PAETEC, including the 'B' corporate credit rating. The outlook is stable. Moody's Investors Service assigned a B1 rating to the senior secured note issuance. Moody's affirmed all other ratings, including the SGL-1 liquidity rating. The rating outlook remains stable. PALM INC: Capital World Investors Discloses 10.3% Equity Stake -------------------------------------------------------------- Capital World Investors is deemed to be the beneficial owner of 16,952,000 shares or 10.3% of the 165,329,477 shares of Palm Inc. Common Stock believed to be outstanding as a result of Capital Research and Management Company acting as investment adviser to various investment companies registered under Section 8 of the Investment Company Act of 1940. About Palm Inc. Headquartered in Sunnyvale, California, Palm Inc. (Nasdaq:PALM) -- http://www.palm.com/-- provides mobile computing solutions worldwide. The company offers Palm Treo smartphones, Palm LifeDrive mobile managers, and Palm handheld computers, as well as software, services, and accessories. At August 31, 2009, Palm had $793.951 million in total assets; against total current liabilities of $703.122 million, long-term debt of $389.0 million, non-current deferred revenues of $150.096 million, non-current tax liabilities of $5.9 million, Series B redeemable convertible preferred stock of $267.905 million, and Series C redeemable convertible preferred stock of $16.876 million. At August 31, 2009, Palm had $1.602 billion in accumulated deficit and $738.948 million in stockholders' deficit. PALM INC: Registers 15.7MM Common Shares Under 2009 Stock Plans --------------------------------------------------------------- Palm, Inc., filed with the Securities and Exchange Commission a registration statement on Form S-8 to register these securities: Proposed Maximum Aggregate Title of Securities Amount to be Offering to be Registered Registered Price ------------------- ------------ --------- Common Stock $0.001 par value 9,932,035 $168,347,993 per share, to be issued under the 2009 Stock Plan Common Stock $0.001 par value 5,817,033 $98,598,709 per share, to be issued under the 2009 Employee Stock Purchase Plan A full-text copy of the registration statement is available at no charge at http://ResearchArchives.com/t/s?4654 Palm shareholders approved on September 30, 2009, the 2009 Stock Plan and the 2009 Employee Stock Purchase Plan, which will replace the Amended and Restated 1999 Stock Plan and the Amended and Restated 1999 Employee Stock Purchase Plan. Palm has filed Post-Effective Amendment No. 1 to: -- its Registration Statement No. 333-152586 on Form S-8 filed on July 29, 2008, to deregister 1,479,582 shares previously registered that remain available for future grant under the 1999 ESPP. The 1,479,582 ESPP Shares deregistered by the Post-Effective Amendment No. 1 were registered by the subsequently filed registration statement on Form S-8 for the 2009 ESPP. -- its Registration Statement No. 333-160828 on Form S-8 filed July 27, 2009, to deregister 6,984,343 shares previously registered that remain available for future grant under the 1999 Stock Plan, and 1,479,582 shares previously registered that remain available for future grant under the 1999 ESPP. The 6,984,343 Stock Plan Shares deregistered by the Post-Effective Amendment No. 1 were registered by the subsequently filed registration statement on Form S-8 for the 2009 Stock Plan. The 1,479,582 ESPP Shares deregistered by the Post -Effective Amendment No. 1 were registered by the subsequently filed registration statement on Form S-8 for the 2009 ESPP. -- its Registration Statement No. 333-148528 on Form S-8 filed on January 8, 2008, to deregister 1,479,582 shares previously registered that remain available for future grant under the 1999 ESPP. The 1,479,582 ESPP Shares deregistered by the Post-Effective Amendment No. 1 were registered by a subsequently filed registration statement on Form S-8 for the 2009 ESPP. About Palm Inc. Headquartered in Sunnyvale, California, Palm Inc. (Nasdaq:PALM) -- http://www.palm.com/-- provides mobile computing solutions worldwide. The company offers Palm Treo smartphones, Palm LifeDrive mobile managers, and Palm handheld computers, as well as software, services, and accessories. At August 31, 2009, Palm had $793.951 million in total assets; against total current liabilities of $703.122 million, long-term debt of $389.0 million, non-current deferred revenues of $150.096 million, non-current tax liabilities of $5.9 million, Series B redeemable convertible preferred stock of $267.905 million, and Series C redeemable convertible preferred stock of $16.876 million. At August 31, 2009, Palm had $1.602 billion in accumulated deficit and $738.948 million in stockholders' deficit. PANOLAM INDUSTRIES: Weil Gotshal, Perella Weinberg on Board ----------------------------------------------------------- Weil, Gotshal & Manges LLP and Richards, Layton & Finger, P.A., will act as legal advisors to Panolam Holdings Co., Panolam Holdings II Co., Panolam Industries International, Inc., Panolam Industries, Inc., Pioneer Plastics Corporation, Nevamar Holding Corp., Nevamar Holdco, LLC, and Nevamar Company, LLC, when the Company files for bankruptcy. Perella Weinberg Partners LP will serve as the Company's financial advisors. The firms can be contacted at: (1) Weil, Gotshal & Manges LLP 767 Fifth Avenue New York, NY 10153 Tel: (212) 310-8000 Attn: Gary T. Holtzer, Esq. -- and -- Weil, Gotshal & Manges LLP 200 Crescent Court, Suite 300 Dallas, TX 75201 Tel: (214) 746-7700 Attn: Stephen A. Youngman, Esq. (2) Richards, Layton & Finger, P.A. One Rodney Square P.O. Box 551 Wilmington, DE 19899 Tel: (302) 651-7700 Attn: Mark D. Collins, Esq. (3) Perella Weinberg Partners LP 767 Fifth Avenue New York, NY 10153 Tel: (212) 287-3200 Attn: Adam Verost Credit Suisse, as agent and on behalf of the Required Consenting Senior Secured Debt Holders, is represented by: Sidley Austin LLP 555 West Fifth Street Los Angeles, California 90013 Attn: Jennifer Hagle, Esq. Fax: (213) 896-6600 Email: jhagle@sidley.com Conway Del Genio serves as financial advisors to the Agent. Apollo Capital Management and Eaton Vance Management, as Consenting Note Holders, are represented by: Akin Gump Strauss Hauer & Feld LLP One Bryant Park New York, New York 10036 Attn: Lisa Beckerman, Esq. Fax: 212-872-1002 Email: lbeckerman@akingump.com The Blackstone Group L.P., acts as financial advisors to the Consenting Note Holders. As reported by the Troubled Company Reporter, Panolam Industries on September 25, entered into a restructuring support agreement with noteholders holding approximately 66% in aggregate principal amount of its 10-3/4% Senior Subordinated Notes due 2013, lenders holding approximately 83% in aggregate principal amount of its senior debt and Credit Suisse, Cayman Islands Branch, as the administrative agent for the lenders. Pursuant to the Restructuring Support Agreement, the Consenting Holders have agreed to restructure and recapitalize the Company on the terms set forth in (i) a proposed prepackaged plan of reorganization, (ii) a related term sheet, and (iii) a new intercreditor agreement term sheet. The Company launched a formal solicitation of votes for the Plan from its creditors on October 2, 2009. Plan votes are due November 2. Pursuant to the Restructuring Support Agreement, the Consenting Holders agreed to vote in favor of and support the Plan, subject to the terms and conditions of the Restructuring Support Agreement. Upon receiving the requisite formal acceptances, the Company, its parent corporation and certain of its domestic subsidiaries will commence a voluntary prepackaged proceeding under Chapter 11 of the Bankruptcy Code before the U.S. Bankruptcy Court for the District of Delaware. The purpose of the Financial Restructuring is to reduce Panolam's leverage and to enhance its long-term growth and competitive position. Specifically, the Financial Restructuring is designed to reduce the book value of Panolam's outstanding debt obligations (including its outstanding revolving credit facility borrowings, Term Loan borrowing and gross amount of Senior Subordinated Notes) from approximately $344,514,000 as of June 30, 2009, to a book value currently estimated to be approximately $171.4 million (in each case excluding debt discount) on a pro forma basis as of the consummation of the Financial Restructuring. Panolam will also be able to improve its liquidity by extending the maturity dates on its existing term credit facility from 2012 to 2014 and its existing revolving credit facility from 2010 to 2013. The restructuring pursuant to the proposed Plan would eliminate approximately $16 million in annual cash interest payments to the holders of Senior Subordinated Notes Claims, and free up additional cash that can be reinvested in their businesses. Pursuant to the Plan, (i) holders of the senior debt will receive a combination of cash and new first lien notes in the reorganized company, (ii) holders of the senior subordinated notes will have their notes cancelled in exchange for shares of the new common stock of the reorganized company and (iii) holders of the existing capital stock will have their shares cancelled in exchange for warrants to acquire 2.5% of the new common stock of the reorganized company under certain circumstances. Holders of General Unsecured Claims will receive payment in full in cash. Holders of Senior Subordinated Notes Claims are projected to recover 49% of their claims. A full-text copy of the restructuring support agreement is available at no charge at http://ResearchArchives.com/t/s?464f A full-text copy of the prepackaged Plan is available at no charge at http://ResearchArchives.com/t/s?464f A full-text copy of the disclosure statement is available at no charge at http://ResearchArchives.com/t/s?4650 About Panolam Industries Panolam Industries International, Inc., is a market leader and innovator in the decorative laminate industry. The Company's products, which are marketed under the widely recognized Panolam(R), Pionite(R), Nevamar(R), and Pluswood(R) brand names, are used in a wide variety of residential and commercial indoor surfacing applications, including kitchen and bath cabinets, furniture, store fixtures, case goods, and other applications. The Company had $412,283,000 in assets against debts of $440,162,000 as of Dec. 31, 2008. PARMALAT SPA: Creditors Convert Warrants for 37,195 Shares ---------------------------------------------------------- Parmalat S.p.A. communicates that, following the allocation of shares to creditors of the Parmalat Group, the subscribed and fully paid up share capital has now been increased by 41,289 euros to 1,703,143,566 euros from 1,703,102,277 euros. The share capital increase is due to the allotment of 4,094 shares and the exercise of 37,195 warrant. [The latest status of the share allotment is]: -- 24,858,814 shares representing approximately 1.5% of the share capital are still in a deposit account c/o Parmalat S.p.A., of which: * 13,128,518 or 0.8% of the share capital, registered in the name of individually identified commercial creditors, are still deposited in the intermediary account of Parmalat S.p.A. centrally managed by Monte Titoli (compared with 13,133,181 shares as at July 23, 2009); * 11,730,296 or 0.7% of the share capital registered in the name of the Foundation -- Fondazione Creditori Parmalat -- of which: (i) 120,000 shares representing the initial share capital of Parmalat S.p.A. (unchanged); (ii) 11,610,296 or 0.7% of the share capital that pertain to currently undisclosed creditors (compared with 11,775,469 shares as at July 23, 2009). 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 presided over the Parmalat Debtors' U.S. cases. On June 21, 2007, the U.S. Court granted Parmalat permanent injunction. PEANUT CORP: Hartford Must Set Up Fund to Compensate Victims ------------------------------------------------------------ AboutLawsuits.com reports that Bankruptcy Court Judge William E. Anderson has required Hartford Insurance, the insurance company for Peanut Corp. of America, to create a $12 million fund from insurance proceeds to compensate people who contracted food poisoning and other health complications from tainted peanuts sold by the Company. According to AboutLawsuits.com, e-mails secured by federal agents appear to show that PCA President Stewart Parnell was aware that the peanut butter and ingredients they produced may be contaminated with salmonella and ordered that shipments continue to go out. Judge Anderson has given victims until October 31 to file a claim seeking compensation for illness- related expenses from the fund with the claim administrator, Roy Creasy, the bankruptcy trustee for Western Virginia, AboutLawsuits.com relates. The report states that about 175 known claims for severe illnesses or deaths have already been filed. Distribution of the fund will be determined by the extent of victim's illnesses, the report says, citing Mr. Creasy. Following a nationwide outbreak of Salmonella poisoning that reports say sickened more than 700 people and killed nine, Peanut Corporation of America -- http://www.peanutcorp.com/-- filed a Chapter 7 bankruptcy petition in February 2009 (Bankr. W.D. Va. Case No. 09-60452). The Company estimated its assets and liabilities in the range of $1 million to $10 million at the time of the filing. As reported in the Troubled Company Reporter on March 31, 2009, Federal Insurance Co. provides Peanut Corp. of America with $1 million of insurance coverage and initiated the interpleader action in the Bankruptcy Court to help figure out how to divide the insurance proceeds as claims exceed the amount of coverage. PHILADELPHIA NEWSPAPERS: Bankruptcy Judge Allows Credit Bid ----------------------------------------------------------- U.S. Bankruptcy Judge Stephen Raslavich ruled in a 26-page opinion that Philadelphia Newspapers LLC must allow secured lenders to use money owed to them as part of their bid for the Company's assets. Court documents say that the lenders could make a credit bid in the auction of the Philadelphia Newspapers' dailies, using some of the $300 million owed to senior lenders. Because the proposed stalking horse bidder Bruce E. Toll is an insider, Judge Raslavich also ruled that the buyer isn't entitled to a break-up fee if it loses at the auction. Judge Raslavich allowed Philadelphia Newspapers to submit new bid procedures that would allow for credit bidding and would delete a break-up fee for Mr. Toll. The bankruptcy judge didn't rule on the auction procedures following a hearing on October 1 due to the parties' disputes as to credit bidding. Philadelphia Newspapers opposed a credit bid by lenders owed more than $400 million, saying that it would have a "chilling effect" on competing bidders. A credit bid would top the stalking-horse bid submitted by a group of local investors, including Bruce E. Toll, vice chairman of homebuilder Toll Brothers Inc. Creditors, on the other hand, accused the current owners of Philadelphia Newspapers of trying to "game" the bankruptcy system to keep insiders in control. The Company is contemplating an October 22 auction, wherein a group of local investors, including Bruce E. Toll, would be lead bidder for its business. The Debtors have filed a proposed Chapter 11 plan built around the sale of the business to Mr. Toll or to the highest bidder. 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. PLIANT CORP: Apollo-Proposed Chapter 11 Plan Confirmed ------------------------------------------------------ BankruptcyData reports that the U.S. Bankruptcy Court confirmed Pliant Corp.'s Joint Plan of Reorganization Proposed by Apollo Management VI, L.P. on behalf of its affiliates, dated August 14, 2009. Terms of the Plan On the Plan Effective Date, Reorganized Pliant and Berry Plastics Corporation -- which is 79%-owned by Apollo Investment Fund VI, L.P. and Apollo Investment Fund V, L.P. collectively -- will enter into an Intercompany Services Agreement. Berry will contribute assets related to its Stretch Films business to the applicable Reorganized Debtors in exchange for (a) the issuance to Berry or its designated subsidiary of 20% of Reorganized Pliant Common Stock and (b) subject to the satisfaction of certain performance- based thresholds, the obligation to issue to Berry or its designated subsidiary additional shares of New Common Stock representing 5% of the New Common Stock on a fully-diluted basis. The Stretch Films business produces both hand and machine-wrap stretch films, which are used by end users to wrap products and packages for storage and shipping. The stretch films products are sold to distributors and retail and industrial end users under the MaxTech(R) and PalleTech(R) brands. Issuance of Securities On the Effective Date, the authorized capital stock of Reorganized Pliant will consist of 5,350,000 shares of capital stock, of which up to 5,000,000 shares will be New Common Stock, and up to 350,000 shares will be New Preferred Stock. Reorganized Pliant will also issue in exchange for claims $250,000,000 aggregate principal amount of 11-1/2% Senior Secured Notes due 2015 under an indenture, and 1,930,000 Rights to purchase New Common Stock in a Rights Offering. Specifically, Reorganized Pliant expects to issue: (a) a total of 514,666 shares of New Common Stock to Berry, members of Berry management (or an entity owned by them) and a total of 1,930,00 shares of New Common Stock to Apollo and the other Holders of Second Lien Notes Claims exercising their Rights pursuant to the Rights Offering, (b) up to a total of 262,400 shares of New Preferred Stock to holders of Second Lien Notes Claims, (c) an aggregate of $250.0 million of 11-1/2% Senior Secured Notes due 2015 to Holders of First Lien Notes Claims, and (d) a total of 1,930,000 Rights to purchase all or a portion of its Pro Rata share of the Rights Allocation to holders of Holder of an Allowed Second Lien Notes Claim. The Rights represent the right to acquire 75% of the issued and outstanding shares of New Common Stock, immediately upon consummation of the Plan, subject to dilution in the event Reorganized Pliant issues management compensatory stock options or other compensatory awards denominated in shares of New Common Stock. Pliant filed an Application for Qualification on Form T-3 with the Securities and Exchange Commission in connection with the issuance of New Senior Secured Notes. A full-text copy of the Form T-3 is available at no charge at http://ResearchArchives.com/t/s?43b7 On the Effective Date, affiliates of Apollo are expected to own at least 57.5% of the new Common Stock of Pliant. Treatment and Recovery of Claims As of August 28, 2009, Pliant's capitalization consisted of: Title Amount Amount of Class Authorized Outstanding -------- ---------- ----------- Common Stock, $0.01 par 100,050,000 97,348 shares value per share shares Series AA Preferred Stock, 335,650 334,894 shares par value $.01 per share shares Series M Preferred Stock, 8,000 shares 8,000 shares par value $.01 per share 18% Senior Subordinated $24,000,000 $26,500,000 Notes due 2012 11-1/8% Senior Secured unlimited $262,400,000 Notes due 2009 11-5/8% Senior Secured unlimited $393,800,000 Notes due 2009 and 11-1/8% Senior Secured Notes due 2009 Capitalization of Pliant as of the Effective Date: Title Amount Amount of Class Authorized Outstanding -------- ---------- ----------- Common stock, par value 5,000,000 2,444,666 shares $0.001 per share -- shares New Common Stock Series A Cumulative 350,000 up to a total of Perpetual Redeemable Shares 262,400 shares Preferred Stock, par value $.01 per share 11-1/2% Senior Secured $250,000,000 $250,000,000 Notes due 2015 The Plan provides that: -- the First Lien Notes Claims will receive $100.0 million in Cash and $250.0 million of New Senior Secured Notes to be issued pursuant to the Plan, -- the Second Lien Notes will receive, in respect of each $1,000 of Allowed Claims, at the Holder's option either (a) $87.50 in cash and $87.50 in liquidation preference of New Preferred Stock if such Holder elects to receive cash and New Preferred Stock or if such Holder does not make an election on the Ballot, or (b) a Pro Rata share of the Rights allocation if such Holder elects to receive Rights, -- General Unsecured Claims will receive at the Holders' option either (a) $0.175 on the dollar in cash or (b) the amount in cash it would have received as a member of the Small Claims Class, -- Small Claims under or reduced to $3,000 will be paid in full in cash, -- the DIP Facility Claims and Prepetition Credit Facility Claims will be paid in full in cash, and -- Claims and Interests of Pliant's existing equity holders will be extinguished. Treatment and recovery under the Apollo Plan: Estimated Allowed Estimated Class Claim/Interest Treatment Amount Recovery ----- -------------- --------- ---------- --------- N/A Admin Expense Unimpaired 18,800,000 100% N/A DIP Facility Unimpaired 40,000,000 100% N/A Priority Tax Unimpaired 3,900,000 100% 1 Priority Non-Tax Unimpaired N/A 100% 2 Other Secured Unimpaired 20,800,000 100% 3 Prepetition Credit Facility Unimpaired 145,030,000 100% 4 First Lien Notes Impaired 393,840,000 89% 5 Second Lien Notes Impaired 262,400,000 17.5% 6 General Unsecured Impaired 11,300,000 17.5% 7 Senior Subordinated Notes Impaired 26,500,000 0% 8 Small Claims Unimpaired 1,100,000 100% 9 Intercompany Unimpaired N/A N/A 10 Section 510(b) Impaired -- N/A 11 Pliant Preferred Stock Interests Impaired N/A N/A 12 Pliant Outstanding Common Stock Interest Impaired N/A N/A 13 Subsidiary Interests Unimpaired N/A N/A Reorganization Value The Plan Proponents have not prepared an independent valuation for the Reorganized Debtors with the addition of the contributed Berry Assets, synergies and Intercompany Services Agreement. However, based upon the proposed contribution to the Reorganized Debtors through the Rights Offering, the Proponents have determined that the implied total enterprise value for the Reorganized Debtors with the addition of the contributed Berry Assets is roughly $612.7 million. The implied total enterprise value reflects the sum of: -- The implied total equity value of the Reorganized Debtors of roughly $257.3 million, which is derived from the contribution of $193.0 million in cash under the Plan in exchange for 75% of the equity of the Reorganized Debtors (subject to dilution in the event Reorganized Pliant issues management compensatory stock options or other compensatory awards denominated in shares of New Common Stock); and -- Net debt and preferred stock at emergence of roughly $355.4 million, which is comprised of a revolving credit facility balance of $74.5 million, $250.0 million of New Senior Secured Notes, capital leases of $24.5 million, New Preferred Stock of $11.4 million, and cash of $5.0 million. The revolving credit facility balance does not reflect certain bankruptcy-related costs paid post- emergence. Exit Facility Pursuant to a Commitment Letter dated as of June 24, 2009, Barclays Capital has committed to provide a senior secured asset- backed revolving credit facility as exit facility to Reorganized Pliant. The Exit Facility will provide borrowing availability equal to the lesser of $175 million or the borrowing base, which is a function, among other things, of Reorganized Pliant's and its guarantor subsidiaries' accounts receivables and inventory. The borrowing base is, at any time of determination, an amount (net of reserves) equal to the sum of: up to 85% of the value of eligible accounts receivable plus the lesser of up to 85% of the net orderly liquidation value of eligible inventory and up to 65% of the cost of eligible inventory. The Exit Facility includes borrowing capacity available for letters of credit and for borrowings on same-day notice, referred to as swingline loans, and matures on the third anniversary of the closing date. Amounts outstanding under the Exit Facility will bear interest at a rate equal to, at Reorganized Pliant's option, a base rate plus 3.50% per annum or an adjusted LIBOR rate plus 4.50% per annum. Reorganized Pliant will also be required to pay a commitment fee to the lenders under the Exit Facility in respect of the unutilized commitments thereunder at a rate equal to 1.00% per annum and a customary letter of credit fees and agency fees. Reorganized Pliant's obligations under the Exit Facility will be guaranteed by certain of Reorganized Pliant's subsidiaries and will be secured by a first-priority security interest in Reorganized Pliant's and its guarantor subsidiaries' accounts receivable and other rights to payment (including with respect to the Berry Assets), inventory (including with respect to the Berry Assets), all documents, instruments and general intangibles (including intellectual property) relating to accounts receivable and inventory, deposit accounts, cash and cash equivalents (including with respect to the Berry Assets), all of the equity interests held by Reorganized Pliant and its guarantor subsidiaries (provided that such pledge will not include the equity interests of any foreign subsidiary other than a pledge of 65% of the equity interests of each first-tier foreign subsidiary of Reorganized Pliant and each such guarantor subsidiary) and all products and proceeds of the foregoing, and a second priority security interest in substantially all of Reorganized Pliant's and its guarantor subsidiaries' other assets, subject to certain customary exceptions and carveouts. The Exit Facility will contain a number of customary covenants and is subject to customary closing conditions, including a requirement that after giving effect to all borrowings incurred under the Exit Facility on the closing date, there shall be at least $35.0 million of remaining availability under the Exit Facility. A full-text copy of the Joint Plan proposed by Apollo is available at no charge at http://ResearchArchives.com/t/s?43b9 A full-text copy of the Disclosure Statement is available at no charge at http://ResearchArchives.com/t/s?43b8 Counsel to Apollo: Wachtell, Lipton, Rosen & Katz Philip Mindlin, Esq. Douglas K. Mayer, Esq. Andrew J. Nussbaum, Esq. 51 West 52nd Street New York, NY 10019 Tel: (212) 403-1000 Fax: (212) 403-2000 -- and -- Morris, Nichols, Arsht & Tunnell LLP Derek Abbott, Esq. 1201 North Market Street P.O. Box 1347 Wilmington, DE 19899-1347 Tel: (302) 658-9200 Fax: (302) 658-3989 About Pliant Corp Headquartered in Schaumburg, Illinois, Pliant Corporation produces polymer-based films and flexible packaging products for food, beverage, personal care, medical, agricultural and industrial applications. The Company has operations in Australia, New Zealand, Germany, and Mexico. Pliant and 10 of its affiliates filed for Chapter 11 protection on January 3, 2006 (Bankr. D. Del. Lead Case No. 06-10001). James F. Conlan, Esq., at Sidley Austin LLP, and Edmon L. Morton, Esq., and Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor, represented the Debtors in their restructuring efforts. The Debtors tapped McMillan Binch Mendelsohn LLP, as Canadian counsel. As of September 30, 2005, the Company had $604.3 million in total assets and $1.19 billion in total debts. The Debtors emerged from Chapter 11 on July 19, 2006. Pliant Corp. and its affiliates again filed for Chapter 11 after reaching terms of a pre-packaged restructuring plan. The voluntary petitions were filed February 11, 2009 (Bank. D. Del. Case Nos. 09-10443 through 09-10451). The Hon. Mary F. Walrath presides over the cases. Jessica C.K. Boelter, Esq., at Sidley Austin LLP, in Chicago, Illinois, and Edmon L. Morton, Esq., at Robert S. Brady, Esq., at Young Conaway Stargatt & Taylor, LLP, in Wilmington, Delaware, provide bankruptcy counsel to the Debtors. Epiq Bankruptcy Solutions LLC acts as claims and noticing agent. The U.S. Trustee for Region 3 appointed five creditors to serve on an official committee of unsecured creditors. The Creditors Committee selected Lowenstein Sandler PC as its counsel. As of September 30, 2008, the Debtors had $688.6 million in total assets and $1.03 billion in total debts. POLAROID CORP: Gets Court Nod for Employment of Co-Counsel ---------------------------------------------------------- The U.S. Bankruptcy Court for the District of Minnesota authorized Polaroid Corporation and its debtor-affiliates to employ Paul, Hastings, Janofsky & Walker LLP, Faegre & Benson LLP, and Lapp Libra Thomson Stoebner & Pusch Chartered as co-counsel. The Court also authorized the employment of Lindquist & Vennum PLLP as special counsel; Sotheby's, Inc. as consignment and sales agent and auctioneer; and Wulsin Murphy LLP as special property tax counsel. Polaroid Corporation -- http://www.polaroid.com/-- makes and sells films, cameras, and other imaging products. Polaroid Corp., together with 11 affiliates, filed voluntary petitions for Chapter 11 on December 18, 2008 (Bankr. D. Minn., Lead Case No. 08-46617). Judge Gregory F. Kishel handles the Chapter 22 case. George H. Singer, Esq., James A. Lodoen, Esq., and Sandra S. Smalley-Fleming, Esq., at Lindquist & Vennum P.L.L.P, are counsel to the Debtors. Cass Weil, Esq., James A. Rubenstein, Esq., and Sarah E. Doerr, Esq., at Moss & Barnett, have been tapped as special counsel. The law firms of Baker & McKenzie and C&A Law represent the Debtors as special foreign legal counsel. Paul Hastings, Janofsky & Walker LLP, and Faegre & Benson LLP represent the Committee. According to the Company, the financial structuring process and the bankruptcy filing are the result of events at Petters Group Worldwide, which has owned Polaroid since 2005. This was the Company's second bankruptcy filing. The Company first filed for bankruptcy on October 12, 2001 (Bankr. D. Del. Lead Case No. 01-10864). PRIMARY ENERGY: Moody's Assigns 'Ba1' Rating on $105 Mil. Loan -------------------------------------------------------------- Moody's Investors Service has assigned a Ba1 rating to Primary Energy Operations LLC's proposed $105 million senior secured term loan due 2014. The rating outlook is stable. Primary Energy is a holding company consisting of four 'inside the fence' power generation projects totaling 284 MW and one 'inside the fence' pulverized coal injection facility. The four power generation projects sell power and other services to host steel mills owned by ArcelorMittal USA (senior unsecured Baa3-stable outlook) or United States Steel Corporation (US Steel, CFR Ba2- negative outlook) under contracts maturing between 2011 and 2018. The pulverized coal injection facility is jointly owned with ArcelorMittal and the project sells its services to ArcelorMittal under a tolling contract maturing in 2025. The projects reached commercial operations from 1993 to 2003. Four of the projects utilize waste heat or blast furnace gas to fuel operations. The proceeds from the $105 million term loan and a $50 million equity rights offering by Primary Energy Recycling Corporation will be used to refinance an existing $135 million senior secured term loan, fund reserves and pay fees and expenses related to the transactions. The Ba1rating reflects robust financial metrics even under conservative stress scenarios, accelerated pay down of the first lien debt under the cash sweep, ArcelorMittal as offtaker for four out of the five projects and a strong historical operating performance. The rating also reflects approximately 40% of revenue tied to variable payments driven by the host mills production levels, re- contracting risk for three of the projects prior to loan maturity, approximately 15% of cash flow sourced from US Steel, lack of termination payments under four of the offtake contracts and close integration with the host steel mills. Moody's views the conservative financing structure to be a major strength that reduces the fundamental challenges facing Primary Energy due to its close integration with the host steel mills and the difficult environment facing the US steel industry. Moody's expects Primary Energy to achieve minimum and average FFO/Debt of 30% and 60%, respectively, while debt service coverage ratios is expected to be a minimum and average of at least 4 times and 6 times, respectively. These metrics are robust for the rating and the high average credit metrics is primarily due to the accelerated pay down of the term loan under the 100% excess cash sweep. The Ba1 rating for Primary Energy considers these credit strengths: Key Credit Strengths * Offtake contracts with host mills owned by ArcelorMittal or US Steel provide steady fixed capacity payments and the variable energy payments do not have fuel price risk. * Primary energy benefits from operational diversification and has demonstrated reliable operational performance with availability averaging 95% and forced outage rate averaging less than 2% for the power generation projects. * ArcelorMittal performs operations and maintenance for three of the projects. * The host steel mills enjoy a relatively strong competitive position in the US with the ArcelorMittal facilities in the bottom 1/3 in terms of cost competitiveness according to a market consultant. * Relatively low initial leverage and accelerated repayment of debt facilities results in robust credit metrics even under downside scenarios. * The projects combined have a demonstrated history of EBITDA generation which has ranged from $33 MM to about $47 MM since 2006. * The underlying projects' cost competitiveness relative to other options available to the host mills support the projects' ability to renew expiring contracts assuming the host steel mills are economic. * Project finance features include a 1st lien on assets, cash flow waterfall, 100% excess cash sweep and a 6-month cash funded debt service reserve. Key Credit Weaknesses * Close integration of the projects with the host steel mills limits revenue alternatives for the projects if the host mill shuts down. * Only one of the projects contains an explicit termination payment if the host mill permanently shuts down. * The steel producing sector has come under significant stress given the economic downturn resulting in a number of idled production capacity and reduced production levels at non-idle plants. * Approximately 40% of the Primary Energy's revenues are tied to variable payments under its offtake contracts and the variable payments are effectively linked to the host steel mill's production levels. * The North Lake project faces contract maturity in 2011 while Cokenergy and Portside projects face contract maturities in 2013 and these contracts combined represent a large majority of consolidated EBITDA. * US Steel is a major offtaker and represents approximately 15% of EBITDA. * Primary Energy is relatively sensitive to unanticipated sharp increase in capital expenditure given the explicit covenant limitation on capital expenditures. Primary Energy's stable outlook reflects Moody's expectation of full debt amortization prior to maturity, continued solid operations and strong financial metrics. The stable outlook also considers the expectation that the US steel industry is likely to moderately improve over time. Limited prospects exist for a rating upgrade in the near term. Over the longer term, positive trends that could lead to an upgrade include significant improvement to the US steel industry and substantial debt repayment according to initial projections. The rating could be downgraded if the US steel industry deteriorates further, if the contract counterparties deteriorate in credit quality, if the underlying projects incur operating problems or if Primary Energy does not achieve the forecasted credit metrics. The ratings are predicated upon final documentation in accordance with Moody's current understanding of the transaction and final debt sizing consistent with initially projected credit metrics and cash flows. Primary Energy owns a portfolio consists of four 'inside the fence' power generation projects totaling 284 MW and one 'inside the fence' pulverized coal injection facility. The four power related projects sell power, steam, hot water to host steel mills owned by ArcelorMittal or US Steel under contract maturing between 2011 and 2025. Primary Energy is indirectly 85.7% owned by Primary Energy Recycling Corporation and 14.3% by EPCOR USA Ventures LLC. PROBE MANUFACTURING: KB Development Discloses Equity Stake ---------------------------------------------------------- KB Development Group, LLC, disclosed holding 152,000,000 shares of Probe Manufacturing Inc. common stock. The managing member of KB Development Group is Kambiz Mahdi who is the Chief Executive Officer and Director of Probe. Mr. Mahdi also owns 18,062,660 shares of common stock of Probe. The number of shares outstanding of each of Probe's classes of common stock, as of August 14, 2009, was 184,638,320. Based in Lake Forest, California, Probe Manufacturing Inc. (OTCBB: PMFI) -- http://www.probemi.com/-- provides electronics manufacturing services to original equipment manufacturers of industrial, automotive, semiconductor, medical, communication, military, and high technology products. The company was founded in 1993. It was formerly known as Probe Manufacturing Industries, Inc., and changed its name to Probe Manufacturing Inc., in 2005. Probe Manufacturing's balance sheet at June 30, 2009, showed total assets of $1,106,891 and total liabilities of $1,733,776, resulting in a stockholders' deficit of $626,885. On Aug. 14, 2009, W.T. Uniack & Co. CPA's, P.C., expressed substantial doubt about Probe Manufacturing Inc.'s ability to continue as a going concern after auditing financial statement for three and six month period ending June 30, 2009. RADIENT PHARMACEUTICALS: To Deconsolidate JPI Venture in China -------------------------------------------------------------- Radient Pharmaceuticals Corporation reports that during the second quarter of 2009, its management became aware of internal management disputes in China that resulted in a deterioration of both operational and financial controls by JPI's management over the operating entity JJB. "We are in the process of reclassifying our China pharmaceutical manufacturing and distribution business operations JJB, which is conducted through JPI) as a business investment, rather than a consolidated operating subsidiary of our Company, based on the nature of the current relationship," Radient Pharmaceuticals said. "On September 29, 2009, upon the Board's approval, we entered into a binding agreement among and with Mr. Henry Jia, Mr. Frank Zheng, Mr. Yuan Da Xia -- China Shareholders -- which detailed the rights and duties of the parties and outlined the Company's limited role in JPI's future operations and JPI's plan to raise money and become a public company on a Chinese Exchange. Pursuant to the Agreement, we are obligated to complete various agreements with the China Shareholders relating to the plan for the deconsolidation, including agreements that will reduce our interest in JPI/JJB to a minority ownership interest." The Agreement contemplates: -- Debt Conversion Agreement with the China Shareholders to convert certain accrued salaries and expenses currently owed to the China Shareholders into shares of JPI at a pre-conversion valuation of US$28 million for JPI; -- Share Exchange Agreement for the exchange of certain shares of the Company's stock currently held by the China Shareholders or their affiliates for stock of JPI at a pre-conversion valuation of US$28 million for JPI, subject to an independent valuation; -- Debt Conversion Agreement between the Company and JPI to restructure certain debts of JPI/JJB that are owed to the Company; and -- JPI will agree to use its best efforts to complete an IPO on the Shenzhen Stock Exchange, Hong Kong Stock Exchange, Shanghai Stock Exchange or a similar exchange by September 30, 2012. The parties will use their best efforts to complete the plan of Deconsolidation in accordance with this timeline: October 2009 Entry into Definitive Agreements between JPI, ADL and the China Shareholders. October 2009 Completion and approval of Equity Incentive Plan for JPI. October 2009 Complete independent valuation of JPI. November - Commence and close private placement of December 2009 JPI stock. Prior to Complete IPO of JPI stock on Shenzhen, September 30, 2012 Hong Kong, Shanghai or similar stock exchange. Despite the loss of control and deconsolidation of JPI, the Company still believes JPI has a promising future. Yet, the deconsolidation process of JPI and JJB is anticipated to materially and adversely affect the Company's 2009 earnings and sales. The Company may record a loss excluding one-time charges from the deconsolidation of JPI and JJB of a yet to be determined amount. In addition, there can be no assurance that the Company will ever realize any significant value from its interest in JPI and JJB. A full-text copy of the Deconsolidation Agreement is available at no charge at http://ResearchArchives.com/t/s?4652 Going Concern Qualification On April 15, 2009, AMDL filed with the SEC an Annual Report on Form 10-K in which included an audit opinion with a "going concern" explanatory paragraph which expresses doubt, based upon current financial resources, as to whether AMDL can meet its continuing obligations without access to additional working capital. The Company intends to raise additional capital and pursue expense reductions to ensure its ongoing financial viability. This disclosure is in compliance with the NYSE Alternext US Company Guide Rule 610(b) requiring a public announcement of the receipt of an audit opinion that contains a going concern qualification and does not reflect any change or amendment to the consolidated financial statements as filed. Further information regarding the going concern qualification is contained in AMDL's Annual Report on Form 10-K for the year ended December 31, 2008. About Radient Pharmaceuticals Headquartered in Tustin, CA with operations in China, Radient Pharmaceuticals, fka AMDL Inc., along with its subsidiary, JPI, is a pharmaceutical company devoted to the research, development, manufacturing, and marketing of diagnostic, pharmaceutical, nutritional supplement, and cosmetic products. The Company employs over 510 people in the U.S. and China. The Company had assets of $35,240,702 against debts of $7,727,742 as of June 30, 2009. REALOGY CORP: Closes $135MM Delayed Draw Portion of 2nd Lien Loan ----------------------------------------------------------------- Realogy Corporation on October 9, 2009, closed on the $135 million aggregate principal amount delayed draw portion of second lien incremental term loans, which increases the aggregate principal amount of second lien incremental term loans issued under the incremental loan (accordion) feature of its existing senior credit facility to $650 million. As reported by the Troubled Company Reporter, Realogy Corp. on September 28, 2009, announced the closing of $515 million aggregate principal amount of the expected $650 million of second lien incremental term loans under the incremental loan (accordion) feature of our existing senior credit facility. The Incremental Term Loans are guaranteed by Domus Intermediate Holdings Corp. and certain other of Realogy's direct or indirect subsidiaries that guarantee the existing loans and other obligations under the Credit Facility. The Incremental Term Loans are secured by liens on the assets of the Company, Intermediate and the Subsidiary Guarantors that secure the First Priority Obligations and such liens are junior in priority to the First Lien Obligations and any permitted refinancings thereof. The Incremental Term Loans bear interest at a rate of 13.50% per annum and interest payments are payable semi-annually in arrears with the first interest payment payable on April 15, 2010. The Incremental Term Loans will mature on October 15, 2017, and there is no scheduled amortization for the Incremental Term Loans. The Incremental Term Loans may be voluntarily prepaid only after the payment in full of the First Lien Obligations, although the Incremental Term Loans may be refinanced at any time as permitted under the terms of the Credit Facility. In addition, Realogy may make prepayments of the Incremental Terms Loans at any time to the extent such prepayments are consented to by the lenders of the First Lien Obligations under the Credit Facility. Any such voluntary prepayment will be subject to a make-whole premium if made prior to the October 15, 2012, and will be subject to a prepayment penalty if made on or after October 15, 2012, but prior to October 15, 2013. The Incremental Term Loans will not be subject to any mandatory prepayments until the payment in full of the First Priority Obligations. Upon the payment in full of the First Priority Obligations, 100% of the net cash proceeds of asset sales and dispositions, subject to certain exceptions and customary reinvestment provisions, will be applied as a mandatory prepayment of the Incremental Term Loans on the terms set forth in the Credit Facility. The Incremental Term Loans will be subject to the same affirmative and negative covenants and events of default set forth in the Credit Facility. Upon payment in full of the First Lien Obligations, the Credit Facility shall automatically be amended to delete the senior secured leverage ratio covenant. Realogy received $515 million of proceeds on the Closing Date and expect to receive an additional $135 million on a delayed draw basis on Oct. 9, 2009, subject to receipt of additional lender commitments on or before such date. Initial proceeds from the Incremental Term Loans were used to (1) reduce borrowings under our $750 million revolver under the Credit Facility and (2) refinance roughly $220 million of Realogy's 11.00%/11.75% Senior Toggle Notes due 2014 pursuant to the Icahn Exchange. In connection with the closing of the Incremental Term Loans, on September 28, 2009, the Company entered into, among other documents and agreements, an Incremental Assumption Agreement, an Intercreditor Agreement, a First Amendment to the Company's Guarantee and Collateral Agreement and a Second Lien Guarantee and Collateral Agreement: (A) Incremental Assumption Agreement The Incremental Assumption Agreement, by and among the Company, Intermediate, the lenders party thereto, JPMorgan Chase Bank, N.A., as administrative agent, and Wilmington Trust Company, as collateral agent, sets forth the terms pursuant to which certain financial institutions and other entities agreed to make the Incremental Term Loans to the Company under the accordion feature of the Credit Facility. (B) First Amendment to Guarantee and Collateral Agreement The First Amendment to the Guarantee and Collateral Agreement, by and among the Company, Intermediate, the Subsidiary Guarantors and the Administrative Agent amends the existing Guarantee and Collateral Agreement, dated as of April 10, 2007, by and among the Company, Intermediate, the Subsidiary Guarantors and the Administrative Agent. The First Amendment to Guarantee and Collateral Agreement gives effect to the effective subordination of the security interests and other liens securing the Incremental Term Loans to the security interests and other liens securing the First Priority Obligations. (C) Second Lien Guarantee and Collateral Agreement Pursuant to the Second Lien Guarantee and Collateral Agreement, by and among the Company, Intermediate, the Subsidiary Guarantors and the Second Lien Collateral Agent, each of the Company, Intermediate and the Subsidiary Guarantors granted a second priority lien and security interest in favor of the Second Lien Collateral Agent for the benefit of the lenders of the Incremental Term Loans, any additional lenders in the future that may be secured on a pari passu basis, the Administrative Agent and the Collateral Agent on all of their tangible and intangible assets that secure the First Priority Obligations to secure the Incremental Term Loans and the other related secured obligations defined in the Second Lien Guarantee and Collateral Agreement. (D) Intercreditor Agreement The Intercreditor Agreement, by and among the Company, Intermediate, the Subsidiary Guarantors, the Administrative Agent and the Second Lien Collateral Agent, sets forth the respective rights and obligations between the lenders and other related secured parties with respect to the First Priority Obligations and the Second Lien Secured Parties, including the relative priority of the liens granted by the Company, Intermediate and the Subsidiary Guarantors to secure the First Priority Obligations and the Second Priority Obligations. (E) Icahn Exchange On September 24, 2009, Realogy entered into a letter agreement with Apollo Management VI, L.P., RCIV Holdings (Luxembourg) S.a.r.l., an affiliate of Apollo Management, certain investment funds managed by Apollo Management, and Icahn Partners, L.P. and certain of its affiliates. Realogy's principal stockholders are investment funds affiliated with, or co-investment vehicles managed by, Apollo Management. Pursuant to the terms of the Letter Agreement, Icahn exchanged roughly $220 million aggregate principal amount of the Senior Toggle Notes held by it for $150 million aggregate principal amount of the Incremental Term Loans. Icahn also sold the balance of the Senior Toggle Notes held by it for cash to RCIV in a privately negotiated transaction and used a portion of the cash proceeds to participate as a lender in the Incremental Term Loans. The transactions with Icahn closed concurrently with the closing of the Incremental Term Loans. About Realogy Corp. Realogy Corporation is one of the largest real estate service companies in the United States with reported revenues of about $4.7 billion for the year ended December 31, 2008. Realogy was incorporated in January 2006 to facilitate a plan by Cendant Corporation to separate Cendant into four independent companies - one for each of Cendant's real estate services, travel distribution services, hospitality services (including timeshare resorts), and vehicle rental businesses. The separation became effective July 2006. Headquartered in Parsippany, N.J., Realogy is owned by affiliates of Apollo Management, L.P., a leading private equity and capital markets investor. Realogy fully supports the principles of the Fair Housing Act. Realogy Corp. had assets of $8,425,000,000 against debts of $9,430,000,000, for a total stockholders' deficit of $1,005,000,000 as of June 30, 2009. As reported by the Troubled Company Reporter on September 28, 2009, Standard & Poor's Ratings Services assigned a 'C' issue- level rating to Realogy Corp.'s proposed $475 million second-lien term facility due January 2014 with a recovery rating of '6', indicating S&P's expectation for negligible (0% to 10%) recovery for lenders in the event of a payment default. REVLON INC: Closes Exchange Offer; MacAndrews Loan Maturity Moved ----------------------------------------------------------------- Revlon, Inc., on October 8, 2009, consummated its exchange offer in which each issued and outstanding share of Revlon Class A common stock was exchangeable on a voluntary basis for one share of a newly-issued series of Revlon preferred stock. The Exchange Offer expired in accordance with its terms at 11:59 p.m., New York City time, on October 7. Revlon indicated that it issued 9,336,905 shares of Revlon Series A preferred stock to stockholders (other than MacAndrews & Forbes Holdings Inc. and its affiliates) in exchange for the same number of shares of Revlon Class A common stock tendered for exchange. The Class A common stock tendered in the Exchange Offer represented 46% of the shares of Revlon Class A common stock not beneficially owned by MacAndrews & Forbes and its affiliates. Revlon has accepted for exchange all validly tendered shares of Class A common stock. In connection with the consummation of the Exchange Offer, MacAndrews & Forbes contributed to Revlon $48,645,275 in principal amount of the Senior Subordinated Term Loan between Revlon's wholly-owned operating subsidiary, Revlon Consumer Products Corporation, and MacAndrews & Forbes (representing $5.21 of the principal amount of such loan for each share of Revlon Class A common stock exchanged in the Exchange Offer). For each share of Revlon Class A common stock exchanged in the Exchange Offer, Revlon issued to MacAndrews & Forbes one share of Class A common stock, or 9,336,905 shares of Class A common stock in the aggregate. Upon consummation of the Exchange Offer, certain amendments to the terms of the Senior Subordinated Term Loan became effective, including amendments: -- extending the maturity date of the portion of the Senior Subordinated Term Loan that will remain owed to MacAndrews & Forbes -- the Non-Contributed Loan -- from August 1, 2010, to the fifth anniversary of consummation of the Exchange Offer, or October 8, 2014, and changing the interest rate on the Non-Contributed Loan from 11% to 12% per year; and -- extending the maturity date of the Contributed Loan from August 1, 2010, to the fourth anniversary of consummation of the Exchange Offer, or October 8, 2013, and changing the interest rate on the Contributed Loan from 11% to 12.75% per year. As a result of these transactions: -- MacAndrews & Forbes and its affiliates beneficially own in the aggregate 37,544,640 shares of Revlon Class A common stock, or 77.5% of the Revlon Class A common stock, all 3.125 million shares of Revlon's Class B common stock and 78.9% of the combined Revlon Class A common stock and Class B common stock (representing 77.3% of the combined voting power of the Revlon Class A and Class B common stock and the Series A preferred stock); and -- Revlon's stockholders (other than MacAndrews & Forbes and its affiliates) beneficially own in the aggregate 10,898,432 shares of Revlon Class A common stock, or 22.5% of the Revlon Class A common stock, and all 9,336,905 shares of the Revlon Series A preferred stock (which, together with the Revlon Class A common stock held by such stockholders, represent 22.7% of the combined voting power of the Revlon Class A and Class B common stock and the Series A preferred stock). On October 8, 2009, Revlon amended its certificate of incorporation to (1) clarify that the provision requiring that holders of its Class A Common Stock and holders of its Class B Common Stock receive the same consideration in certain business combinations shall only apply in connection with transactions involving third parties and (2) increase the number of Revlon's authorized shares of preferred stock from 20 million to 50 million and, accordingly, to increase the number of Revlon's authorized shares of capital stock from 1,120,000,000 to 1,150,000,000. About Revlon Headquartered in New York City, Revlon, Inc. (NYSE: REV) -- http://www.revloninc.com/-- is a worldwide cosmetics, hair color, beauty tools, fragrances, skincare, anti-perspirants/deodorants and personal care products company. The Company's brands, which are sold worldwide, include Revlon(R), Almay(R), Mitchum(R), Charlie(R), Gatineau(R), and Ultima II(R). At March 31, 2009, Revlon Inc. had $784,700,000 in total assets; $300,900,000 in total current liabilities, $1,183,600,000 in long- term liabilities, $107,000,000 in long-term debt of affiliates, $222,900,000 in long-term pension and other post-retirement plan liabilities, and $65,400,000 in other long-term liabilities; resulting in $1,095,100,000 in stockholders' deficit. ROYAL HAWAIIAN: Files for Chapter 11 Bankruptcy Protection ---------------------------------------------------------- Royal Hawaiian Showroom LLC has filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the District of Hawaii, listing liabilities in excess of $10 million owed to more than 100 creditors. Chad Blair at Pacific Business News reports that Royal Hawaiian's largest unsecured claims include: -- $4.6 million to Taisei Construction Co. of Honolulu for construction work, -- $5.6 million to Central Pacific Bank for loan, lease and credit line; and -- $693,259 to B.P. Bishop Estate for lease payments and utilities. Pacific Business relates that Royal Hawaiian opened the theatrical show Waikiki Nei in August 2008 after several delays, but closed two months later, due in part to poor ticket sales. Honolulu, Hawaii-based Royal Hawaiian Showroom is owned by producer Roy Tokujo. It is located in the Royal Hawaiian Center, a Waikiki shopping complex owned by Kamehameha Schools, aka Bishop Estate. SALLY BEAUTY: Acquires Schoeneman in $71 Million Merger Deal ------------------------------------------------------------ Beauty Systems Group LLC, a subsidiary of Sally Beauty Holdings, Inc., on September 30, 2009, entered into an Agreement and Plan of Merger with Schoeneman Beauty Supply, Inc., the shareholders of Schoeneman and F. Dale Schoeneman, as shareholder representative, pursuant to which Schoeneman merged into a wholly owned acquisition subsidiary of the Company. The aggregate merger consideration for the transaction was $71 million, subject to certain adjustments, including an adjustment based on closing date net assets. In its news statement, Sally Beauty Holdings paid cash of approximately $61 million, net of the present value of the future incremental tax benefit expected to be realized by the Company from the transaction. The Company currently expects to realize approximately $10 million of present value future tax savings as a result of expected future incremental depreciation and amortization tax deductions relating to the assets acquired in this transaction. The Company has agreed to indemnify the shareholders of Schoeneman for certain increased tax liabilities that they may incur as a result of the structure of the transaction. The Merger Agreement contains conventional representations and warranties, covenants and indemnities. The parties have agreed to set aside in escrow an aggregate amount of $18 million of the merger consideration to secure the indemnification and other obligations of the shareholders of Schoeneman and certain covenants under the Merger Agreement. In connection with the transactions, certain of the shareholders of Schoeneman agreed to restrictive covenants regarding, among other matters, non-competition with the business of Schoeneman, the confidentiality of information relating to the business of Schoeneman and the solicitation of employees, customers and suppliers of Schoeneman. The addition of Schoeneman is expected to provide BSG with a greater presence in the Northeast region of the U.S. "The Beauty Systems Group segment was built through a series of strategic acquisitions such as Schoeneman," said Gary Winterhalter, CEO of Sally Beauty Holdings. "We believe Schoeneman is a natural addition to our BSG business and supports our long-term objective to grow the Company. We utilized some of our available cash to fund the acquisition, but still have ample liquidity to grow organically and pay down debt. In fact, during the fiscal 2009 fourth quarter, we made an optional repayment of $20 million on our term loan facilities." "This acquisition directly supports BSG's strategy of extending our distribution reach in important geographic regions of the U.S.," said John Golliher, president of the Beauty Systems Group. "We expect this combination to provide us with a greater opportunity to compete in Pennsylvania, Southern New Jersey, Delaware, and West Virginia. Schoeneman brings its highly skilled employees, strong customer relationships and proven distribution channels to BSG. By combining our two companies, we believe we can create additional value for our customers, suppliers, and our stockholders." Dale Schoeneman, Chief Executive Officer of Schoeneman Beauty Supply, Inc., stated, "We are excited about Sally's Beauty System Group LLC acquisition. Not only do the two companies share similar cultures, but the added scale and financial resources of the BSG organization bring enormous benefits to our customers, employees, suppliers and community. The Schoeneman family looks forward to BSG's management team bringing new opportunities to the business." The acquisition is expected to be slightly accretive, post integration costs, to Sally Beauty Holdings' earnings per share in 2010. Cost synergies are expected to be realized upon full integration of Schoeneman, and the Company projects additional accretion to Sally Beauty Holdings earnings per share in 2011. About Schoeneman Schoeneman Beauty Supply, Inc., is headquartered in Pottsville, Pennsylvania and employs over 500 people, including over 100 direct sales consultants. Sales revenue in fiscal 2009 is projected to be in the range of $86 million to $89 million. The Company owns 43 professional-only beauty supply stores located in Pennsylvania, Southern New Jersey, Northern Delaware and West Virginia. The direct sales consultants further extend its distribution reach to Maryland, Washington D.C., and Northern Virginia. Schoeneman carries approximately 10,000 SKU's with a focus on the mid-to-high end of beauty professional products. About Sally Beauty Denton, Texas-based Sally Beauty Holdings, Inc. (NYSE: SBH) -- http://www.sallybeauty.com/-- is an international specialty retailer and distributor of professional beauty supplies with revenues of more than $2.6 billion annually. Through the Sally Beauty Supply and Beauty Systems Group businesses, the Company sells and distributes through over 3,700 stores, including approximately 200 franchised units, throughout the United States, the United Kingdom, Belgium, France, Canada, Puerto Rico, Mexico, Japan, Ireland, Spain and Germany. Sally Beauty Supply stores offer more than 6,000 products for hair, skin, and nails through professional lines such as Clairol, L'Oreal, Wella and Conair, as well as an extensive selection of proprietary merchandise. Beauty Systems Group stores, branded as CosmoProf or Armstrong McCall stores, along with its outside sales consultants, sell up to 9,800 professionally branded products including Paul Mitchell, Wella, Sebastian, Goldwell, and TIGI which are targeted exclusively for professional and salon use and resale to their customers. The Company posted net earnings of $31,489,000 for the three months ended June 30, 2009, from net earnings of $29,359,000 for the same period a year ago. The Company posted net earnings of $72,143,000 for the nine months ended June 30, 2009, from net earnings of $56,098,000 for the same period a year ago. At June 30, 2009, the Company had $1,464,897,000 in total assets and $2,110,057 in total liabilities, resulting in $650,695,000 in stockholders' deficit. SEMGROUP ENERGY: Vitol to Purchase SGLP General Partner ------------------------------------------------------- SemGroup Energy Partners, L.P., has been informed that Vitol Inc., part of the Vitol Group of companies, October 8, 2009, entered into an agreement with Manchester Securities Corp., an affiliate of Elliott Management Corporation, to purchase 100% of the membership interests of SemGroup Energy Partners G.P., L.L.C., SGLP's general partner, and SGLP's subordinated units. Because this is a private transaction, financial terms were not disclosed. The agreement is subject to a number of customary closing conditions and approvals, including consent from SGLP's lenders under its credit facility. Vitol Inc. is the principal U.S. subsidiary of the Vitol Group. Vitol is engaged in the global physical supply and distribution of crude oil, petroleum products, coal, natural gas, and other commodities. Vitol was founded in 1966, and is headquartered in the Netherlands. Vitol moves over 5 million barrels of crude oil and petroleum products every day throughout the world, charters more than 3,000 ships annually and had annual revenues of $191 billion in 2008. Kevin Foxx, President and Chief Executive Officer of SGLP's general partner, stated, "We want to express our thanks and appreciation to Manchester, which has provided us a tremendous amount of support and leadership throughout the past 15 months. We are also pleased that Manchester has reached agreement with Vitol, one of the largest independent energy companies in the world. We believe our assets can be a great fit into Vitol's U.S. business model and we look forward to working with them and growing our business." About SemGroup Energy Partners LP Based in Tulsa, Oklahoma, SemGroup Energy Partners, L.P. (Pink Sheets: SGLP.PK) -- http://www.SGLPEnergy.com/-- owns and operates a diversified portfolio of complementary midstream energy assets consisting of roughly 8.2 million barrels of crude oil storage located in Oklahoma and Texas, roughly 6.7 million barrels of which are located at the Cushing, Oklahoma interchange, roughly 1,150 miles of crude oil pipeline located primarily in Oklahoma and Texas, over 200 crude oil transportation and oilfield services vehicles deployed in Kansas, Colorado, New Mexico, Oklahoma and Texas and roughly 7.4 million barrels of combined asphalt and residual fuel storage located at 46 terminals in 23 states. SGLP provides crude oil terminalling and storage services, crude oil gathering and transportation services and asphalt services. As of June 30, 2009, SGLP had total assets of $314.5 million; and total current liabilities of $28.4 million, long-term debt of $417.8 million, and long-term capital lease obligations of $11 million; resulting in Partners' deficit of $131.7 million. About SemGroup LP SemGroup L.P. -- http://www.semgrouplp.com/-- is a midstream service company providing the energy industry means to move products from the wellhead to the wholesale marketplace. SemGroup provides diversified services for end users and consumers of crude oil, natural gas, natural gas liquids, refined products and asphalt. Services include purchasing, selling, processing, transporting, terminaling and storing energy. SemGroup serves customers in the United States, Canada, Mexico, Wales, Switzerland and Vietnam. 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) SEQUA CORPORATION: Moody's Confirms 'Caa1' Corporate Family Rating ------------------------------------------------------------------ Moody's Investors Service has confirmed Sequa Corporation's Caa1 Corporate Family and the Probability of Default Ratings. Simultaneously, the company's senior secured bank credit facility rating was confirmed at B2 and the rating for the senior unsecured notes was confirmed at Caa2. The rating outlook is negative. This action completes the review for possible downgrade that was initiated March 16, 2009. The confirmation of the Caa1 CFR continues to reflect the company's highly levered capital structure resulting from the 2007 buyout by The Carlyle Group, the significant revenue and operating profit decline in the last several quarters, and the substantial enterprise value decline. Moody's believes that Sequa's significant amount of debt relative to cash flow generation could suggest that the company's capital structure is unsustainable and that the company could seek to restructure its debt in the future. The confirmation also reflects Moody's recognition of Sequa's initiatives during the past several months in downsizing its production capacity and reducing its cost base in response to the significant revenue and earnings decline across all three of its operating segments: aerospace, automotive and metal coating. The confirmation is also supported by expectation that the liquidity profile, given the company's cash position and unused capacity and availability under its revolver and receivables purchase facility, is sufficient to meet ongoing near term requirements including modest capital expenditures. The negative outlook considers that absent a meaningful upturn in revenue and cash flow, Sequa's capital structure, which includes debt exceeding 100% of revenue, could be unsustainable and require restructuring. The company faces additional cash flow pressure in 2010 as the $241 million (balance as of 6/30/09) of 13.5% senior notes become cash pay. In addition, the negative outlook reflects the concern that the rate of profitability and margin improvement could be outpaced by ongoing decline in the revenue base of its three segments should demand not stabilize. These ratings/assessments have been affected: Confirmed * Corporate Family Rating at Caa1; * Probability of Default Rating at Caa1; * $150 million senior secured revolver due December 2, 2013 at B2 (LGD2, 27%); * $954 million (originally $1,200 million) senior secured term loan due December 3, 2014 at B2 (LGD2, 27%); * $500 million 11.75% senior notes due December 1, 2015 at Caa2 (LGD5, 81%); * $241 million (as of 6/30/09, originally $211.4 million; PIK through December 1, 2009) 13.5% senior discount notes due December 1, 2015, at Caa2 (LGD5, 81%). The rating outlook was changed to negative. The last rating action was on March 16, 2009 when the CFR was downgraded to Caa1 and placed on review for further possible downgrade. Sequa Corporation, headquartered in New York, is a diversified industrial company operating in three business segments: aerospace through Chromalloy Gas Turbine, automotive through ARC Automotive and Casco Products and metal coating through Precoat Metals. LTM revenue as of 6/30/09 was approximately $1.5 billion. SHAW GROUP: Moody's Assigns 'Ba1' Rating on Senior Bank Facility ---------------------------------------------------------------- Moody's Investors Service assigned a Ba1 rating to the amended senior secured bank facility of The Shaw Group Inc. and affirmed the company's Ba1 Corporate Family and Probability of Default ratings. The rating outlook remains stable. Ratings Assigned * Senior Secured Bank Facility of Ba1, LGD 3, 40% Ratings Affirmed: * Corporate Family Rating of Ba1 * Probability of Default Rating of Ba1 Ratings Withdrawn: * Senior Secured Credit Agreement of Ba1, LGD 3, 43% Shaw's amended $1.2 billion bank agreement effectively extends the final maturity date of this facility to October 2012 from April 2011 previously and alleviates financial covenant pressures that had developed under the terms of its pre-existing bank facility. The amended facility is fully available for funded borrowing purposes, although Moody's expects Shaw will use its facility solely to support its letter of credit needs. The amount of the facility will periodically reduce to an authorization of $1 billion by April 2011. Shaw's liquidity profile further benefits from its strong cash balances, free cash flow profile and lack of funded debt. Shaw's Ba1 corporate family rating considers the company's established position as a leading contractor to an assortment of end markets, with a particular advantage in the burgeoning nuclear power market. The rating is further supported by the current strength of Shaw's balance sheet and robust cash flow metrics as well as its large and growing backlog level. The rating is constrained by project execution risks, the existence of material weaknesses in internal controls over financial reporting and the potential that Shaw's balance sheet may eventually be altered should it choose to refinance some or all of the limited recourse obligations related to its 20% ownership of the Westinghouse Group. Moody's last rating action on The Shaw Group Inc. was on April 18, 2008 at which time its rating was upgraded to Ba1 with a stable outlook. The Shaw Group Inc., located in Baton Rouge, Louisiana, is a diversified engineering, technology, construction and industrial services organization. Revenues for the twelve months ending May 31, 2009, were approximately $7.2 billion. SHINGLE SPRINGS: S&P Downgrades Issuer Credit Rating to 'B-' ------------------------------------------------------------ Standard & Poor's Ratings Services said it lowered its ratings on El Dorado County, California-based Shingle Springs Tribal Gaming Authority; the issuer credit rating was lowered to 'B-' from 'B'. At the same time, the ratings were placed on CreditWatch with negative implications. "The downgrade reflects continued weakness in operating performance as the property is experiencing a slower than expected ramp up following its opening in December 2008," said Standard & Poor's credit analyst Melissa Long. S&P continues to expect that the casino will generate a level of EBITDA that is below S&P's estimate of fixed charges in 2009 and S&P believes that excess cash balances are ample to make up the shortfall. However, S&P is concerned that the property will need to grow EBITDAM in 2010 to continue to meet all of its fixed charges. The CreditWatch listing reflects the likely violation of financial covenants contained within the Authority's furniture, fixtures, and equipment facility. These covenants, which include a fixed charge and senior leverage test, will be measured for the first time in the quarter ending Sept. 30, 2009. The Authority has stated that it does not believe it will be in compliance with the covenants as of the Sept. 30, 2009, measurement date once it completes its financial statements. Failure to be in compliance with these financial covenants would constitute an event of default under the FF&E facility. The Authority has entered into a forbearance agreement with FF&E lenders while it seeks to negotiate a waiver and amendment. In resolving the CreditWatch listing, S&P will monitor the Authority's progress toward addressing its likely covenant violations. If S&P concludes that the Authority will not be able to successfully negotiate a waiver and amendment with FF&E lenders, the rating could be further lowered. SINCLAIR BROADCAST: MOU Allows Cunningham to Terminate LMAs ----------------------------------------------------------- Sinclair Broadcast Group, Inc., has entered into a non-binding memorandum of understanding with Cunningham Broadcasting Corporation, its local marketing agreement partner in six markets. As of June 30, 2009, Cunningham's stations provided Sinclair with approximately $70.0 million of annual total revenue. Sinclair notes Cunningham is currently facing significant financial and economic challenges. On June 5, 2009, the administrative agent under Cunningham's bank credit facility declared an event of default under the facility for failure to timely deliver certain annual financial statements as required. As of such date, a rate of interest of LIBOR plus 5%, which rate includes a 2% default rate of interest, has been instituted on all outstanding borrowings under the Cunningham bank credit facility. On June 30, 2009, the default was waived and the termination date of the Cunningham bank credit facility was extended to July 31, 2009, subject to certain conditions, including maintaining the default interest rate. On July 31, 2009, the Cunningham bank credit facility was further extended to October 30, 2009. The extension requires that Cunningham make $200,000 principal payments on its term loan facility as of the first day of each of August, September and October with the balance due on October 30, 2009. To delay or avoid any potential bankruptcy of Cunningham, the lenders under Cunningham's existing credit facility have indicated their willingness to replace such credit facility with a new credit facility, which is conditioned upon Cunningham's demonstration that it can repay the outstanding principal balance due under the facility within three years. As a result, Cunningham asked Sinclair to restructure certain of its arrangements with Sinclair, including the LMAs, which negotiations led to the execution of the MOU. Under the terms of the MOU, upon the consummation of the tender offers by Sinclair Television Group, Inc. for any and all of Sinclair's outstanding 3.0% Convertible Senior Notes due 2027 and 4.875% Convertible Senior Notes due 2018 and the related financing, the following arrangements between Cunningham and Sinclair would be amended and restated and become effective: (i) the LMAs, (ii) option agreements to acquire Cunningham stock, and (iii) certain acquisition or merger agreements relating to television stations owned by Cunningham. If the LMAs and other agreements are amended and restated pursuant to the MOU, they will have these material revised terms: -- Cunningham will have the right to terminate the LMAs and the other agreements upon a "change of control" of Sinclair, which will occur if the Smith brothers no longer own or control at least 51% of the voting power of Sinclair; -- If Cunningham files for bankruptcy protection under Chapter 11 of the United States Bankruptcy Code, it will not seek to reject the LMAs or the other agreements in a bankruptcy proceeding until such time as the parties to the MOU have had a reasonable time to negotiate, in good faith, mutually agreeable amendments to such LMAs or other agreements; -- The LMAs and the other agreements will terminate on July 1, 2016, provided that Sinclair will have three options to extend the term, each option for an additional five-year term; -- In consideration of the new terms of the LMAs and other agreements and the extension options, beginning January 1, 2010, and ending on July 1, 2012, Sinclair will be obligated to pay Cunningham the sum of approximately $29.1 million in 10 quarterly installments of $2.75 million and one quarterly payment of approximately $1.6 million, which amounts will be used to pay off Cunningham's bank credit facility and which amounts will be credited toward the purchase price for each Cunningham Station, in accordance with a specified allocation, that is acquired by Sinclair pursuant to any of the option, acquisition or merger agreements or Cunningham's put option applicable to such Cunningham Station -- Purchase Price Credit Payments. An additional $3.9 million, approximately, will be paid in two installments on July 1, 2012, and October 1, 2012, as an additional LMA fee, in addition to the LMA Fee. Notwithstanding, if Cunningham seeks to terminate the LMAs or the other agreements, including in connection with a change in control, then Sinclair will have the right to assign the LMAs or the other agreements being terminated to a third party or parties. Upon such termination by Cunningham any remaining obligation of Sinclair to pay the amounts indicated will be terminated. The aggregate purchase price of the television stations, $78.5 million as of September 30, 2009, will be decreased by each Purchase Price Credit Payment as it is paid, but, subject to certain terms, will be increased by 6% annually; -- Beginning on October 1, 2012, and continuing thereafter during the terms of the LMAs (or any extensions thereto), Sinclair will be obligated to pay Cunningham an annual LMA fee for the television stations equal to the greater of (i) 3% of each station's annual net broadcast revenue and (ii) $5.0 million (reduced proportionally if one or more stations are purchased by Sinclair). The LMA Fee will be subject to cost-of-living increases every five years during the LMA term or any extension thereof. The LMA Fee will be allocated as follows: (i) a portion equal to 6% of the aggregate purchase price of the television stations will be allocated to the payment of interest on the remaining portion of the aggregate purchase price; and (ii) the remainder as a fee to Cunningham for services provided under the LMAs. After the $29.1 million payable to Cunningham is paid in full, and as long as the LMA Fee is paid each year, the aggregate purchase price will no longer increase because the 6% interest due on the aggregate purchase price will be paid in full each year as indicated; -- Cunningham will have a put option, under which Cunningham may require Sinclair to purchase the television stations on July 1, 2016, which is the termination date of the initial term of the LMAs or at the expiration of any renewal term. Sinclair may assign its obligation to purchase the television stations to a third party in the event that it cannot acquire the television stations as a result of Federal Communications Commission rules or for any other reason. If Cunningham exercises its put option, the purchase price for the Cunningham Station(s) acquired will be the lesser of (i) the portion of the aggregate purchase price in effect at such time allocable to such Cunningham Station(s) and (ii) the appraised fair market value of such Cunningham Station(s); -- The prices under the existing options to purchase Cunningham stock will be adjusted to make them consistent with the purchase prices and terms contained in the amended and restated acquisition agreements. In addition, in lieu of acquiring the assets of any of the Cunningham Stations under the acquisition agreements, Sinclair will have an option to acquire for cash all of the issued and outstanding stock of each subsidiary of Cunningham, on terms and conditions substantially similar in all material respects to the amended and restated option agreements. In the event Sinclair determines to acquire any of the Cunningham Stations under any of the acquisition or merger agreements, Cunningham may cause Sinclair to acquire the stock of the Cunningham subsidiary or subsidiaries that hold the Cunningham Station rather than the assets of the Cunningham Station pursuant to the acquisition or merger agreement and may require the price to be paid in cash rather than Sinclair stock. In addition, the acquisition and merger agreements will be subject to a financing condition; -- Cunningham will be obligated to pay liquidated damages to Sinclair if Cunningham terminates any of the option, acquisition or merger agreements for any reason other than a termination resulting from the exercise of Cunningham's put option or Sinclair's material breach, act or omission. The liquidated damages will be in an amount equal to the sum of all Purchase Price Credit Payments made by Sinclair to Cunningham that have decreased the aggregate purchase price of the Cunningham Stations plus the additional LMA fee payments, not to exceed $33.0 million in the aggregate; -- During the period that the Convertible Notes (or any notes issued to refinance the Convertible Notes) are outstanding, Sinclair will have consent rights (which consent may not be unreasonably withheld or delayed) over Cunningham's future borrowings, with the exception of (i) borrowings for the acquisition by Cunningham of certain television stations for which Sinclair has freely assignable purchase option agreements that it cannot currently exercise; and (ii) any amounts totaling less than $10.0 million in the aggregate; and -- Cunningham will purchase, upon Sinclair's request, Sinclair's options to purchase five television stations currently operated by Sinclair under LMAs with other LMA partners, for a purchase price of $100 per station. Once such options are purchased, Cunningham will be obligated to immediately exercise the rights to acquire such television stations, to the extent financing is available on reasonable terms and conditions and subject to FCC approval. Immediately following Cunningham's acquisition of these stations, Cunningham will enter into amended LMAs with Sinclair for each such television station, whereby Sinclair will pay the operating cost of each such station, plus an amount equal to the interest paid by Cunningham to its lender(s) on borrowed funds for Cunningham's acquisition of the stations, plus $400,000 per year per station. Sinclair will have the option to acquire each of the television stations for an amount equal to the amount paid by Cunningham for such station. The amendments and restatements to the LMAs and other agreements require the consent of the lenders under Cunningham's bank credit facility and the lenders under our bank credit facility. While these lenders have been provided the MOU and have expressed verbal support for the terms thereunder, formal written approval has not yet been obtained. There is no assurance that the parties to the MOU will succeed in negotiating amended and restated LMAs and other agreements on the terms set forth or that the lenders will consent to the amended and restated LMAs and other agreements. In the event the LMAs and option, acquisition and merger agreements are not amended and restated pursuant to the MOU, Cunningham may be forced to file for protection under Chapter 11 of the Bankruptcy Code. Sinclair's bank credit agreement contains certain cross-default provisions with respect to Cunningham, pursuant to which a default would be caused by the institution of insolvency or similar proceedings, whether voluntary or involuntary, with respect to Cunningham. If Cunningham is unable to avoid bankruptcy, Sinclair would need to negotiate with the lenders under the Bank Credit Agreement to avoid any default and acceleration thereunder. Any amendment to, or waiver of a default under, the Bank Credit Agreement would likely be on terms less favorable to Sinclair than the current terms. Furthermore, if Cunningham or any of its subsidiaries were to declare bankruptcy, Cunningham or such subsidiary could seek to reject some or all of Sinclair's LMAs or other agreements with Cunningham and its subsidiaries If the bankruptcy court overseeing a Cunningham bankruptcy authorized a rejection of the LMAs or other agreements Sinclair would experience a material reduction in revenues and current rules and regulations of the FCC would not permit Sinclair thereafter to enter into new LMAs or other agreements with Cunningham or a successor to Cunningham on equivalent terms. About Cunningham Broadcasting Cunningham Broadcasting Corporation is the owner-operator and FCC licensee of WNUV-TV, Baltimore, Maryland; WRGT-TV, Dayton, Ohio; WVAH-TV, Charleston, West Virginia; WTAT-TV, Charleston, South Carolina; WMYA-TV (formerly WBSC-TV), Anderson, South Carolina; and WTTE-TV. About Sinclair Broadcast Group Based in Baltimore, Maryland, Sinclair Broadcast Group, Inc. (Nasdaq: SBGI) -- http://www.sbgi.net/-- one of the largest and most diversified television broadcasting companies, currently owns and operates, programs or provides sales services to 58 television stations in 35 markets. The Company's television group reaches approximately 22% of U.S. television households and includes FOX, ABC, CBS, NBC, MNT and CW affiliates. As of June 30, 2009, the Company had $1.60 billion in total assets and $1.75 billion in total liabilities. Sinclair carries Moody's Investors Service's Caa2 Corporate Family Rating and Caa3 Probability of Default Rating; and Standard & Poor's Ratings Services' 'B-' corporate credit rating. SIX FLAGS: Pens $3M Deal With New Orleans ----------------------------------------- Law360 reports that a bankruptcy judge on Thursday signed off on a settlement agreement that will see Six Flags Inc. shelling out $3 million to the city of New Orleans, where one of the Company's outposts was shuttered after sustaining damage during Hurricane Katrina. 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). SMURFIT-STONE: Gets Court Nod to Assume SAP America License Deal ---------------------------------------------------------------- Smurfit-Stone Container Corp. and its affiliates obtained the Court's authority to assume and modify software license agreements under a master license agreement with SAP America, Inc. James F. Conlan, Esq., at Sidley Austin LLP, in Chicago, Illinois, relates that in connection with their continuing review and analysis of material executory contracts, the Debtors determined that if they assumed the Master License Agreement without modification, they would be obligated to (a) continue paying maintenance fees for certain of the licenses, including licenses for the SAP Business Suite Professional, and (b) pay the full amount of the approximately $4,000,000 in installment payments. After evaluating their options, including the possibility of rejecting the Master License Agreement and replacing the SAP Software with a different product, the Debtors engaged SAP in discussions regarding potential modifications to certain aspects of the existing Master License Agreement, including the timing of implementation of licenses and the payment of annual maintenance fees. As a result of the discussions, the Debtors and SAP have agreed to, among other things, (i) reduce the upfront license fee for the SAP Software from $4,000,054 to $3,250,000, (ii) suspend, effective October 1, 2009, the annual maintenance fees until the Debtors actually implement the SAP Software, and (iii) modify the Master License Agreement to allow the Debtors to "reinstate" individual licenses for their employees at any time, provided that the Debtors will be obligated to (a) reimburse SAP for all unpaid maintenance fees associated with reinstated licenses for the period of suspension, and (b) continue paying annual maintenance fees with respect to reinstated licenses. Mr. Conlan, however, notes that the Debtors will not be obligated to pay any maintenance fees with respect to licenses that are not reinstated. He adds that SAP's agreement to make modifications to the Master License Agreement is conditioned upon the Debtors assuming the Master License Agreement. The Debtors and SAP agree that SAP was owed a total of approximately $4,097,066 on account of various licenses under the Master License Agreement. The Debtors have agreed to pay these amounts. About Smurfit-Stone Smurfit-Stone Container Corp. -- http://www.smurfit-stone.com/-- is one of the leading integrated manufacturers of paperboard and paper-based packaging in North America and one of the world's largest paper recyclers. The Company operates 162 manufacturing facilities that are primarily located in the United States and Canada. The Company also owns roughly one million acres of timberland in Canada and operates wood harvesting facilities in Canada and the United States. The Company employs roughly 21,250 employees, 17,400 of which are based in the United States. For the quarterly period ended September 30, 2008, the Company reported roughly $7.450 billion in total assets and $5.582 billion in total liabilities on a consolidated basis. Smurfit-Stone and its U.S. and Canadian subsidiaries filed for Chapter 11 protection on January 26, 2009 (Bankr. D. Del. Lead Case No. 09-10235). Certain of the company's affiliates, including Smurfit-Stone Container Canada Inc., a wholly owned subsidiary of SSCE, and certain of its affiliates, filed to reorganize under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice in Canada. Smurfit-Stone joined pulp- and paper-related bankruptcies as rising Internet use hurts magazines and newspapers. Corporacion Durango SAB, Mexico's largest papermaker, sought U.S. bankruptcy in October. Quebecor World Inc., a magazine printer and Pope & Talbot Inc., a pulp-mill operator, also sought cross-border bankruptcies for their operations in the U.S. and Canada. James F. Conlan, Esq., Matthew A. Clemente, Esq., Dennis M. Twomey, Esq., and Bojan Guzina, Esq., at Sidley Austin LLP, in Chicago, Illinois; and Robert S. Brady, Esq., and Edmon L. Morton, Esq., at Young Conaway Stargatt & Taylor in Wilmington, Delaware, serve as the Debtors' bankruptcy counsel. PricewaterhouseCooper LLC, serves as the Debtors' financial and investment consultants. Lazard Freres & Co. LLC acts as the Debtors' investment bankers. Epiq Bankruptcy Solutions LLC acts as the Debtors' notice and claims agent. Bankruptcy Creditors' Service, Inc., publishes Smurfit-Stone Bankruptcy News. The newsletter tracks the Chapter 11 proceeding and ancillary foreign proceedings undertaken by Smurfit-Stone Container Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) SMURFIT-STONE: Sued by i2i to Bar Release of Trade Secret --------------------------------------------------------- i2i Europe Ltd. has filed a verified complaint against Smurfit- Stone Container Enterprises and 121 Europe Division of Smurfit- Stone Container Enterprises, Inc. seeking entry of an order enjoining the Debtors from soliciting Europe's customers and misappropriating trade secret information in alleged violation of a sale broker agreement and noncompetition agreement existing between SSCE and Europe. However, the Complaint was filed under seal in accordance with Europe's granted request to file it under seal. Subsequently, Europe filed a motion for a temporary restraining order and preliminary injunction and on September 30, 2009, the Court entered a stipulated order regarding Europe's request for temporary restraining order, pursuant to which the Debtors and i2i agreed that: (1) without further order from the Court, until October 20, 2009, the Debtors will not, without prior written consent of i2i Europe, take any action prohibited by the Noncompetition Agreement and agree to immediately cease any and all contact with any of Europe's customers, except to the extent necessary for processing existing orders or packaging in accordance with Europe's existing business, and except to the extent the Debtors contact the customers to offer products or services other than merchandising solutions, which includes, but is not limited to, market research, branding, design photography, artwork production, pre-press, sourcing, packaging manufacture, fulfillment, and inventory management; (2) the Debtors' first omnibus objection to claims scheduled to be heard by the Court on September 30, 2009, solely as it relates to Europe, will be continued to a date on or before October 20, 2009, subject to the Court's availability; (3) the Parties will negotiate a briefing schedule to address Europe's motion for preliminary injunction. The Parties agree to schedule a hearing date on or before October 20, 2009, subject to the Court's availability; (4) the Parties' agreement does not constitute any admission of the truthfulness of allegations or an admission of any wrongdoing on the part of Debtors; and (5) the Parties acknowledge that Debtors have not conceded that the Court is the appropriate forum for resolution of Europe's Motion or Adversary Complaint and the Debtors in no way waive any right to object to the Court's jurisdiction. About Smurfit-Stone Smurfit-Stone Container Corp. -- http://www.smurfit-stone.com/-- is one of the leading integrated manufacturers of paperboard and paper-based packaging in North America and one of the world's largest paper recyclers. The Company operates 162 manufacturing facilities that are primarily located in the United States and Canada. The Company also owns roughly one million acres of timberland in Canada and operates wood harvesting facilities in Canada and the United States. The Company employs roughly 21,250 employees, 17,400 of which are based in the United States. For the quarterly period ended September 30, 2008, the Company reported roughly $7.450 billion in total assets and $5.582 billion in total liabilities on a consolidated basis. Smurfit-Stone and its U.S. and Canadian subsidiaries filed for Chapter 11 protection on January 26, 2009 (Bankr. D. Del. Lead Case No. 09-10235). Certain of the company's affiliates, including Smurfit-Stone Container Canada Inc., a wholly owned subsidiary of SSCE, and certain of its affiliates, filed to reorganize under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice in Canada. Smurfit-Stone joined pulp- and paper-related bankruptcies as rising Internet use hurts magazines and newspapers. Corporacion Durango SAB, Mexico's largest papermaker, sought U.S. bankruptcy in October. Quebecor World Inc., a magazine printer and Pope & Talbot Inc., a pulp-mill operator, also sought cross-border bankruptcies for their operations in the U.S. and Canada. James F. Conlan, Esq., Matthew A. Clemente, Esq., Dennis M. Twomey, Esq., and Bojan Guzina, Esq., at Sidley Austin LLP, in Chicago, Illinois; and Robert S. Brady, Esq., and Edmon L. Morton, Esq., at Young Conaway Stargatt & Taylor in Wilmington, Delaware, serve as the Debtors' bankruptcy counsel. PricewaterhouseCooper LLC, serves as the Debtors' financial and investment consultants. Lazard Freres & Co. LLC acts as the Debtors' investment bankers. Epiq Bankruptcy Solutions LLC acts as the Debtors' notice and claims agent. Bankruptcy Creditors' Service, Inc., publishes Smurfit-Stone Bankruptcy News. The newsletter tracks the Chapter 11 proceeding and ancillary foreign proceedings undertaken by Smurfit-Stone Container Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) SMURFIT-STONE: Wants to Abandon Capital Stock of i2i Europe ----------------------------------------------------------- Smurfit-Stone Container Corp. seek the Court's approval to file under seal their request for authority to abandon the capital stock of i2i Europe Ltd. As previously reported, in their 13th omnibus motion to reject unexpired leases and executory contracts, the Debtors moved to reject a sale broker agreement and noncompetition agreement existing between Smurfit-Stone Container Enterprises, Inc. and i2i Europe. James F. Conlan, Esq., at Sidley Austin LLP, in Chicago, Illinois, notes that the Agreement is a joint venture between SSCE and Weedon Holdings Ltd. Europe subsequently filed, under seal, an objection to the 13th Omnibus Motion simultaneous with a verified complaint against SSCE. Europe also filed a motion for a temporary restraining order and preliminary injunction seeking to enjoin SSCE and its division in Europe from breaching the Agreement. On September 30, 2009, the Court entered a stipulated order regarding Europe's request for temporary restraining order, pursuant to which the Debtors and i2i agreed to a consensual temporary restraining order. On the same day, the Debtors adjourned the hearing of the 13th Omnibus Motion as it pertains to the Agreement until the omnibus hearing on October 20, 2009. Mr. Conlan points out that i2i has filed all of its pleadings under seal and as discussed in Europe's seal motions related to the pleadings, there is a risk of exposing confidential commercial information about Europe's structure, strategy and sales to the general public. For these reasons, the Debtors believe it is in the best interests of all parties involved to file the Abandonment Motion and related exhibits under seal. About Smurfit-Stone Smurfit-Stone Container Corp. -- http://www.smurfit-stone.com/-- is one of the leading integrated manufacturers of paperboard and paper-based packaging in North America and one of the world's largest paper recyclers. The Company operates 162 manufacturing facilities that are primarily located in the United States and Canada. The Company also owns roughly one million acres of timberland in Canada and operates wood harvesting facilities in Canada and the United States. The Company employs roughly 21,250 employees, 17,400 of which are based in the United States. For the quarterly period ended September 30, 2008, the Company reported roughly $7.450 billion in total assets and $5.582 billion in total liabilities on a consolidated basis. Smurfit-Stone and its U.S. and Canadian subsidiaries filed for Chapter 11 protection on January 26, 2009 (Bankr. D. Del. Lead Case No. 09-10235). Certain of the company's affiliates, including Smurfit-Stone Container Canada Inc., a wholly owned subsidiary of SSCE, and certain of its affiliates, filed to reorganize under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice in Canada. Smurfit-Stone joined pulp- and paper-related bankruptcies as rising Internet use hurts magazines and newspapers. Corporacion Durango SAB, Mexico's largest papermaker, sought U.S. bankruptcy in October. Quebecor World Inc., a magazine printer and Pope & Talbot Inc., a pulp-mill operator, also sought cross-border bankruptcies for their operations in the U.S. and Canada. James F. Conlan, Esq., Matthew A. Clemente, Esq., Dennis M. Twomey, Esq., and Bojan Guzina, Esq., at Sidley Austin LLP, in Chicago, Illinois; and Robert S. Brady, Esq., and Edmon L. Morton, Esq., at Young Conaway Stargatt & Taylor in Wilmington, Delaware, serve as the Debtors' bankruptcy counsel. PricewaterhouseCooper LLC, serves as the Debtors' financial and investment consultants. Lazard Freres & Co. LLC acts as the Debtors' investment bankers. Epiq Bankruptcy Solutions LLC acts as the Debtors' notice and claims agent. Bankruptcy Creditors' Service, Inc., publishes Smurfit-Stone Bankruptcy News. The newsletter tracks the Chapter 11 proceeding and ancillary foreign proceedings undertaken by Smurfit-Stone Container Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) SOUTH BEACH RESTAURANT: Files for Chapter 11 Bankruptcy Protection ------------------------------------------------------------------ South Beach Restaurant Authority, LLC, has filed for Chapter 11 bankruptcy protection, listing $100,000 to $1,000,000 in assets and $100,000 to $1,000,000 in liabilities. The Miami New Times relates that in April 2009 Bert Hurstfield, one of South Beach Restaurant's investors, sued the Company and the other partners, Steve Marlton and Barron Kidd, for allegedly taking almost $1 million from him under false pretenses. According to the New Times, Mr. Hurstfield accused the defendants of securities fraud, breach of fiduciary duty, breach of contract, constructive trust, accounting, breach of oral contract, and unjust enrichment. According to the report, Mr. Hurstfield contended that he invested $500,000 for a stake in the Miami branch of the club, and invested $338,000 more. Citing Mr. Hurstfield, the report says that the agreement would have made him an equity shareholder in South Beach Restaurant, entitled to 25% of profits from the Company. According to foodforthoughtmiami.com, the lawyers from the two parties said that they had met several times in an effort to amicably resolve the dispute, and were close to completing a settlement to resolve the entire matter. South Beach Restaurant Authority, LLC, is the operator of Apple and is based in Miami Beach, Florida. SPEEDWAY MOTORSPORTS: Moody's Retains 'Ba1' Corp. Family Rating --------------------------------------------------------------- Moody's Investors Service said Speedway Motorsports, Inc.'s Ba1 Corporate Family Rating and stable rating outlook are not affected by Motorsports Authentics LLC's decision to cease paying certain guaranteed minimum royalties under several license agreements and the violation of the financial statement covenant in MA's credit facility triggered as a result of that decision. The last rating action on SMI was a revision of the company's outlook to stable from negative and upgrade of its speculative grade liquidity rating to SGL-2 from SGL-4 on July 20, 2009. SMI's ratings were assigned by evaluating factors that Moody's considers relevant to the credit profile of the issuer, such as the company's (i) business risk and competitive position compared with others within the industry; (iii) capital structure and financial risk; (iii) projected performance over the near to intermediate term; and (iv) management's track record and tolerance for risk. Moody's compared these attributes against other issuers both within and outside SMI's core industry and believes SMI's ratings are comparable to those of other issuers with similar credit risk. SMI, headquartered in Concord, NC, is the second largest promoter, marketer and sponsor of motor sports activities in the US primarily through its ownership of eight major race tracks (including Kentucky Speedway). NASCAR sanctioned events account for the majority of SMI's approximate $600 million annual revenue. SUN-TIMES MEDIA: Court OKs Asset Sale to Investor Group ------------------------------------------------------- Law360 reports that a judge has given his blessing to bankrupt newspaper publisher Sun-Times Media Group Inc.'s $25 million asset sale to STMG Holdings LLC, a private investor group led by Chicago businessman and Mesirow Financial Holdings Inc. CEO James C. Tyree. Sun-Times Media Group, Inc. -- http://www.thesuntimesgroup.com/-- (Pink Sheets: SUTM) owns media properties including the Chicago Sun-Times and Suntimes.com as well as newspapers and Web sites serving more than 200 communities across Chicago. The Company and its affiliates conduct business as a single operating segment which is concentrated in the publishing, printing, and distribution of newspapers in greater Chicago, Illinois, metropolitan area and the operation of various related Web sites. The Company also has affiliates in Canada, the United Kingdom, and Burma. Sun-Times Media's balance sheet at September 30, 2008, showed total assets of $479.9 million, total liabilities of $801.7 million, resulting in a stockholders' deficit of roughly $321.8 million. The Company and its affiliates filed for Chapter 11 bankruptcy protection on March 31, 2009 (Bankr. D. Del. Case No. 09-11092). James H.M. Sprayregan, P.C., James A. Stempel, Esq., David A. Agay, Esq., and Sarah H. Seewer, Esq., at Kirkland & Ellis LLP, assist the Debtors in their restructuring efforts. Kurtzman Carson Consultants LLC is the Debtors' claims agent. As of November 7, 2008, the Debtors listed $479,000,000 in assets and $801,000,000 in debts. SYSIX TECHNOLOGIES: Sent to Chapter 11 by 3 Creditors ----------------------------------------------------- Creditors filed an involuntary Chapter 11 petition against Sysix Technologies Inc. Comerica Bank, owed $21,497,827, two other creditors signed the bankruptcy petition. Based in Westmont, Illinois, Sysix Technologies provides computer technology systems for businesses. Jeffrey Galen, Esq., at Galen & Davis LLC, at Encino, California, serves as counsel to the petitioners. TELETOUCH COMMUNICATIONS: Unit Seeks Arbitration with AT&T ---------------------------------------------------------- Progressive Concepts, Inc., a Texas corporation and a wholly owned subsidiary of Teletouch Communications, Inc., commenced an arbitration proceeding against New Cingular Wireless PCS, LLC and AT&T Mobility Texas LLC, seeking at least $100 million in damages. The binding arbitration was commenced to seek relief for damages incurred when AT&T prevented the Company from selling the popular iPhone and other "AT&T exclusive" products and services that PCI is contractually entitled to provide to its customers. In addition, the Company's Initial Statement of Claim alleges, among other things, that AT&T has violated the longstanding non- solicitation provisions of a certain distribution agreement by and between the companies by actively inducing customers to leave PCI for AT&T and employing predatory business practices. PCI is represented in this matter by Bracewell & Giuliani, LLP. A full-text copy of the Notice and Initial Statement of Claims is available at no charge at http://ResearchArchives.com/t/s?4651 "AT&T has been trying to deliver a one-two punch in an attempt to run us out of business for some time," said T. A. "Kip" Hyde, Jr., PCI's chief executive officer. "The first punch came when AT&T prevented us from selling the iPhone and other 'exclusive' products and services. The second punch came when AT&T began aggressively marketing and reaching out to our customers. However, the unique nature of our contract and strong relationship with our customers allows us to fight this predatory Goliath. We tried to negotiate in good faith with AT&T, but are now forced to fight back. We initiated this legal action not only to stand up for our company and protect our customers, but also to make a positive impact on the wireless industry as a whole. The anti- competitive and predatory practices of AT&T must end." In June 2007, Apple, Inc. (NASDAQ: AAPL) introduced the iPhone to the North American market and named AT&T as the only authorized carrier provider in an exclusive agreement between them that has never been made public. Although a distribution agreement was in place with PCI by which the Company was entitled to sell the iPhone and the other "exclusive" products and services, AT&T has actively and aggressively prevented PCI from selling such products as the iPhone, U-verseSM TV, Netbooks, bundled billing and a variety of other products and services. In fact, AT&T has gone so far as to prevent PCI from providing to its customers important wireless safety and protection services such as Family Mapping, a family/child location service, and Smart Limits, a cellular parental control feature. "For more than 25 years, our various distribution agreements have called for and require exclusivity with AT&T. In exchange, we are entitled to sell everything they sell. It's that simple," explained Mr. Hyde. "By preventing us from selling the iPhone and other new products and services, AT&T has interfered with our customer relationships and is determined to damage our business. Plus, the required binding arbitration provides certainty to the outcome -- they lose, they pay. There is no appeal." PCI's position is that the non-solicitation provision in its primary distribution agreement has been systematically violated by AT&T, which is specifically prohibited from targeting or inducing existing PCI customers to switch to AT&T's billing and customer support services. "Many smaller AT&T agents and even some of their larger distributors and retailers are impacted by AT&T's ruthless tactics, and PCI is one of the few companies in a position to do something about it," said Mr. Hyde. "It's our duty to fight AT&T's anti-competitive business practices -- for our customers, for our employees, for our shareholders, and on general business principles. This is America. Monopolies and unfair competition, especially against smaller businesses, are not well-regarded here." About Progressive Concepts Inc. dba Hawk Electronics Progressive Concepts, Inc., operates retail stores known locally as Hawk Electronics. The company's primary business is the sale and service of cellular services and products under its distribution agreements with AT&T. PCI sells cellular telephones, cellular telephone accessories, cellular service plans, along with proprietary warranty programs and third-party insurance plans which it directly bills to individual consumers, businesses, and government agencies. PCI is a billing services operating company which performs a variety of management services for its customers, including accounting, collections, staffing, payroll and marketing services. About Teletouch Communications For over 40 years, Teletouch Communications, Inc. -- http://www.teletouch.com/-- has offered a comprehensive suite of telecommunications products and services including cellular, two- way radio, GPS-telemetry, wireless messaging and public safety/emergency response vehicle products and services throughout the U.S. With over 80,000 wireless customers, Teletouch's wholly- owned subsidiary, Progressive Concepts, Inc. (PCI), is a leading provider of ATT Mobility(R) (NYSE: T) services (voice, data and entertainment), as well as other mobile, portable and personal electronics products and services to individuals, businesses and government agencies. As of May 31, 2009, the Company had $24,356,000 against total liabilities of $34,807,000, resulting in shareholders' deficit of $10,451,000. The Company's May 31 balance sheet showed strained liquidity with $16,899,000 in total current assets against total liabilities of $19,704,000. TELLIGENIX CORP: Files for Ch 11 Bankr. After State Lawsuit ----------------------------------------------------------- Telligenix Corp. has filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Middle District of Florida, listing outstanding debt of up to $50 million against assets of between $1 million and $10 million. State records say that the bankruptcy filing was made three days after Dynetech Corp. and several related companies were folded into Telligenix. Orlando Business Journal relates that the bankruptcy filing also comes after Texas prosecutors accused in a lawsuit filed in Texas District Court in Harris County on September 18 five businesses tied to Dynetech of breaching the state's deceptive trade practices and consumer protection law in its business-training seminars. Business Journal says that the businesses include: -- Telligenix, Business Skills Corp., fka Dynetech Training & Simulation Corp.; -- American Cash Flow Corp.; -- B2G Institute Inc., fka B2G Group; and -- B2G Venture. Telligenix Corp. -- http://www.telligenix.com/-- provides educational process management to a number of independently contracted seminar providers and individuals, including Robert Allen, and others. Telligenix handles the educational process management for a number of training institutes and others in the real estate, investment and entrepreneurship spaces. TERRA-GEN FINANCE: Moody's Assigns 'Ba3' Rating on $225 Mil. Loan ----------------------------------------------------------------- Moody's Investors Service has assigned a Ba3 rating to Terra-Gen Finance Company, LLC's proposed $225 million of senior secured credit facilities. The facilities are made up of a $200 million senior secured term loan and a $25 million senior secured working capital facility, both due 2012. The rating outlook is stable. Terra-Gen is a special purpose entity formed by affiliates of ArcLight Capital Partners, which owns or leases a portfolio of 831 MWs of renewable generating capacity. The portfolio is made up of 387 MWs of geothermal, 80 MWs of solar and 364 MWs of wind generation located in the western US. Approximately 73% of the capacity is sold to Southern California Edison (sr. unsec. A3) under long term contracts maturing from 2013 to 2030 and revenue under these contracts represents about ninety percent of Terra- Gen's consolidated cash flows over the next five years. Terra- Gen's significant ownership interests include Coso Geothermal Power Holdings LLC (Coso Power: Ba1 sr. secured; negative outlook), which represents more than 50% of the Terra-Gen's consolidated cash flow over the medium term. The term loan will be used solely to refinance the existing bridge facility and to pay fees and expenses related to the transaction. The working capital facility will be used to provide working capital from time to time and for other general corporate purposes. It will primarily be used to support the issuance of letters of credit to replace existing letters of credit. The Ba3 rating considers the benefits of portfolio diversification across 21 power plants and three renewable technologies (solar, wind and geothermal). The rating also reflects the mostly contracted cash flows generated under long-term power purchase agreements with primarily investment grade counterparties; generally strong operating performance across the portfolio; a capable operator with a long operating history; and strong political and regulatory support for renewable energy. In addition, Terra-Gen benefits from the involvement of a financially supportive sponsor in ArcLight, which has invested over $700 million of cash equity into Terra-Gen to date. ArcLight has also contributed approximately $38.5 million into an accelerated capital expenditure program at Coso Power and will provide a guarantee to provide an additional $30 million. Terra-Gen is undergoing a significant capital expenditure program for Coso Power. The total cost of the remaining capital expenditure program will be approximately $102 million between now and 2011, and it will be funded in part by equity infusions from ArcLight. The program includes geothermal resource augmentation by water injection, which is a program intended to increase the level of production and decrease or stop the future decline by preventing fluid loss. The program also includes a new enhanced drilling plan to further develop the field, which will generate substantial economic benefit to Coso Power by restoring steamfield capacity and increasing production. All the permits for Hay Ranch has been approved and issued. Therefore, Terra-Gen has commenced construction of the pipeline and expects to begin pumping water in late Q4 2009. The Hay Ranch Project will cost approximately $14.3 million to complete, of which Terra-Gen has already spent approximately $6.3 million. The rating considers the execution risk associated with a refinancing at Dixie Valley, the refinancing risk on $90 million left outstanding at term in 2012 in the base case, and a major capital expenditure program though 2011. The Ba3 rating for Terra-Gen considers these credit strengths: * Terra-Gen benefits from contracted project revenues, which are generated through resource diverse projects in its portfolio. 100% of cash flows are contracted through November 2013 with 90% under fixed price arrangements through April 2012, 60% through 2018 and then 90% through 2030. * All of the projects have long operating histories with the most recent project entering operation in 2000 (excluding the recent Alite acquisition, which commenced operation in 2008). * Terra-Gen's portfolio is comprised of 21 projects spread over three different renewable technologies, thus diversifying operational and technology risk. * The collateral is similar to other holding company financings and consists of security in the equity interests of Terra-Gen and its intermediate holding companies, collateral in all the accounts and the existence of a restricted payments test. Importantly, liquidity at the Terra Gen level is supported by a 9 month debt service reserve composed of a 3-month cash funded debt service reserve plus a 6 month LOC provided by ArcLight. The LOC will be for the account of Arclight for the term of the debt. * The project sponsor, ArcLight, is a strategic investor focused exclusively on the power and energy sectors. ArcLight has also put in approximately $38.5MM into Coso Power to date to support capex and is committing to put in another $30MM into Coso Power's capital expenditure program. In addition, Terra-Gen is ArcLight's single largest investment with over $700 million in cash equity invested in the borrower to date. The rating also reflects these areas of credit concern: * The potential for geothermal reserve decline represents a key risk for Terra-Gen, since the largest source of cash flows (approximately 60-70%) comes from the three geothermal plants (Coso Power, Dixie Valley, Beowawe). * The execution of the Dixie Valley refinancing introduces execution risk to Terra-Gen, which could delay the funding for the major capital expenditure program and could impact the degree of refinancing risk at Terra-Gen. * There is refinancing risk in 2012 when approximately $90 million is expected to be left outstanding at the end of term in the base case. This risk is mitigated by the fact that there is still a weighted average of 14 years left under the long-term PPA contracts underpinning cash flow, which should help to facilitate refinancing. In addition, there are other potential sources of cash to take out the debt, including the repowering/refinancing of the wind assets and further equity infusions from ArcLight. * From 2012 to 2018, Terra-Gen will rely on floating SRAC for about 30-40% of consolidated cash flows (depending upon the year). Terra-Gen will be looking to refinance its remaining debt balance in 2012 when floating SRAC exposure is expected to increase. * Coso Power is engaged in a major capital program through 2011, which could result in possible cost overruns and reduced cash flow. * A degree of concentration risk exists since more than 90% of the revenue is derived from SCE and 75% of Terra-Gen's assets are located in California. In addition, Terra-Gen relies heavily on Coso Power for cash flow since Coso Power represents more than 50% of the consolidated cash flows. Terra-Gen's stable outlook reflects the expectation of stable consolidated cash flow generation under long term fixed price contracts through 2012 and the successful implementation of capital programs at several operating companies, including Coso Power. The outlook also incorporates projected strong operating performance across the portfolio and moderate de-leveraging on a consolidated basis over the medium term. Limited prospects exist for a rating upgrade in the near future. Positive trends that could lead to an upgrade include the execution of the Dixie Valley refinancing such that there is a rapid deleveraging of Terra-Gen debt and higher sustained generation output at Coso Power above the base case forecast. Terra-Gen's ratings could be lowered if it does not achieve successful implementation of the accelerated capital program such that generation output at Coso Power is significantly below the base case forecast, there is a failure to complete the Dixie Valley refinancing or there is a very substantial deterioration in the credit quality at SCE. The ratings are predicated upon final documentation in accordance with Moody's current understanding of the transaction and final debt sizing consistent with initially projected credit metrics. Terra-Gen Finance Company, LLC, is a wholly-owned subsidiary of Terra-Gen Power, LLC. Terra-Gen Power is a holding company that was formed to acquire and own an 831 MW portfolio of renewable generation assets primarily located in California. The majority of the portfolio's capacity is sold to SCE under long term contracts maturing from 2013 to 2030. Terra-Gen is privately owned by affiliates of ArcLight Capital Partners. THOMAS GENTRY: Kentucky Horse Racing License Revoked ---------------------------------------------------- Gregory A. Hall at courier-journal.com reports that thoroughbred horseman Tom Gentry, who was convicted of fraud and went bankruptcy, has had his 2009 Kentucky owner's license revoked for lying on his application. Mr. Gentry was licensed at Ellis Park in Henderson, Kentucky, courier-journal.com relates, citing Kentucky Horse Racing Commission chief steward John Veitch. According to courier-journal.com, Mr. Veitch said that Mr. Gentry indicated on the application that he had not been suspended previously, even though he had been suspended in California in the 1990s due to concerns about fiscal responsibility. Mr. Gentry, the report says, pleaded guilty in 1994 in a federal district court in Kentucky to money laundering and bankruptcy fraud in a case that stemmed from his 1987 bankruptcy proceedings. Mr. Gentry said he doesn't know whether he will appeal, the report states. Thomas E. Gentry, dba Tom Gentry Farm, filed for Chapter 11 bankruptcy protection (Bankr. E.D. Ky. Case No. 87-50064). TOYS R US: Terminates Ron Boire's Employment as EVP --------------------------------------------------- In connection with the elimination of his position, Ron Boire's employment with Toys "R" Us, Inc., was terminated without cause on September 22, 2009. Mr. Boire has served as the Company's Executive Vice President - President - "R" Us Brands since February 2009. Mr. Boire has not advised the Company of any disagreement with the Company or any matter relating to the Company's operations, policies or practices. 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. TRINITAS GOLF: Files for Ch 11 Bankr. to Avert Foreclosure Sale --------------------------------------------------------------- The Trinitas Golf Course owner Mike Nemee said that the Company has filed for Chapter 11 bankruptcy protection, canceling a proposed October 2 sale of their 280-acre ranch, The Pine Tree reports. Craig Cassidy at The Union Democrat relates that Mike and Michelle Nemee filed for bankruptcy to forestall a foreclosure auction of their property and to buy time for their two lawsuits against the Calaveras County to proceed. The Union Democrat says that the Board of Supervisors had ruled that the Trinitas Golf was unauthorized under the county zoning code and had to stop operations. The Trinitas Golf Course is a golf course owned by Mike and Michelle Nemee. USA SPRINGS: NewCo to Buy Almost Two-Thirds of Assets ----------------------------------------------------- New Hampshire Business Review reports that an undisclosed company has agreed to buy almost two-thirds of USA Springs' assets for $55 million. Citing USA Springs' lawyer Alan L. Braunstein, NHBR relates that the new company, referred to as NewCo and represented by Boston attorney Daniel S. Bleck, would continue to work with the Debtor to finish the bottling plant. NHBR notes that creditors should be paid in fall if the deal goes through before Christmas. NewCo's identity will be kept secret from the public until next month, when a disclosure statement is due, and during that time, USA Springs could entertain competing bids from other buyers, says NHBR. The report states that if USA Springs backed out of the deal, the bankrupt estate would have to pay as much as a $1.5 million penalty, and if the deal fizzles and the Company ends up going at a fire sale, NewCo will have to wait in line like all the other unsecured creditors. Mr. Brunstein said that NewCo would continue to use the services of the company's principals, according to NHBR. NHBR says that NewCo would own 65% of the new company, while Rotondo and the other USA Springs investors would retain 35% interest. Based in Nottingham, New Hampshire, USA Springs Inc. filed for Chapter 11 bankruptcy protection on June 27, 2008 (D. N.H. Case No. 08-11816). Armand M. Hyatt, Esq., at Hyatt & Flynn, PLLC, and Earl D. Munroe, Esq., at Muroe & Chew, represent the Debtor in its restructuring efforts. An Official Committee of Unsecured Creditors has been appointed in the case. The Committee's counsel is Terrie Harman, Esq., at Harman Law Offices. In its schedules, the Debtor disclosed $127,000,335 in assets and $13,913,901 in liabilities. VELOCITY EXPRESS: Nasdaq Delists Common Stock Effective Oct. 16 --------------------------------------------------------------- The Nasdaq Stock Market, Inc., has determined to remove from listing the common stock of Velocity Express Corporation, effective at the opening of the trading session on October 16, 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 Rule 5550(b)(1). The Company was notified of the Staffs determination February 4, 2009. 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 April 20, 2009, granting the Company an exception until August 3, 2009, conditioned upon the Company's regaining compliance by that date. On July 27, 2009, the Panel issued a decision notifying the Company that because it had not regained compliance with Rule 5550(b)(1),it did not qualify for inclusion on the Exchange. Trading in the Company's securities was suspended on August 5, 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 Panel's Determination to delist the Company became final on September 17, 2009. About Velocity Express Velocity Express -- http://www.velocityexpress.com/-- has one of the largest nationwide networks of regional, time definite, ground delivery service areas, providing a national footprint for customers desiring same day service throughout the United States. The Company's services are supported by a customer-focused technology infrastructure, providing customers with the reliability and information they need to manage their transportation and logistics systems, including a proprietary package tracking system that enables customers to view the status of any package via a flexible web reporting system. Velocity, together with 12 affiliates, filed for Chapter 11 on Sept. 24, 2009 (Bankr. D. Del. Case No. 09-13294). The Company listed assets of $94.1 million and debt of $120.6 million as of Sept. 1. ComVest Velocity Acquisition I, LLC, buyer of the Debtors' assets, is represented in the case by Kenneth G. Alberstadt, Esq., at Akerman Senterfitt LLP in New York. DIP Lender Burdale is represented in the case by Jonathan M. Cooper, Esq., Randall L. Klein, Esq., and Sarah J. Risken, Esq., at Goldberg Kohn Bell Black Rosenbloom & Moritz, LTD., in Chicago, Illinois. VERASUN ENERGY: 4 Trade Creditors Sell $57,000 in Claims -------------------------------------------------------- Four creditors transferred their claims totaling $57,366 in VeraSun Energy Corp.'s Chapter 11 cases to various transferees: Transferor Transferee Amount ---------- ---------- ------ Midwest Engineering VonWin Capital $32,719 Consultants, Ltd. Management LP ECSI Liquidity Solutions, 13,054 Inc. Fairfield Inn of Pioneer Funding Group 7,047 Brookings LLC Bend Rite Custom United States Debt 4,546 Fabrication, Inc. Recovery LLC About VeraSun Energy Headquartered in Sioux Falls, South Dakota, VeraSun Energy Corp. -- http://www.verasun.com/or http://www.VE85.com/-- produces and markets ethanol and distillers grains. Founded in 2001, the company has a fleet of 16 production facilities in eight states, with 14 in operation. The Company and its debtor-affiliates filed for Chapter 11 protection on October 31, 2008 (Bankr. D. Del. Case No. 08-12606). Mark S. Chehi, Esq., at Skadden Arps Slate Meagher & Flom LLP represents the Debtors in their restructuring efforts. AlixPartners LLP serves as their restructuring advisor. Rothschild Inc. is their investment banker and Sitrick & Company is their communication agent. The Debtors' claims noticing and balloting agent is Kurtzman Carson Consultants LLC. The Debtors' total assets as of June 30, 2008, was $3,452,985,000 and their total debts as of June 30, 2008, was $1,913,214,000. VeraSun closed on April 1, 2009, the sale of substantially all of its assets to Valero Renewable Fuels, a subsidiary of Valero Energy Corporation, North America's largest petroleum refiner and marketer. The purchased assets included five ethanol production facilities and a development site. The facilities are located in Aurora, South Dakota; Fort Dodge, Charles City, and Hartley, Iowa; and Welcome, Minnesota, and the development site is in Reynolds, Indiana. Valero paid $350 million for the ethanol production facilities in Aurora, Fort Dodge, Charles City, Hartley and Welcome, in addition to the Reynolds site. Valero also successfully bid $72 million for the Albert City facility and $55 million for the Albion facility. The purchase price also includes working capital and other certain adjustments. VeraSun also completed on April 9 the sale to AgStar Financial Services PCA of substantially all of the assets relating to the company's production facilities in Dyersville, Iowa; Hankinson, North Dakota; Janesville, Minnesota; Central City and Ord, Nebraska; and Woodbury, Michigan. AgStar released the USBE Subsidiaries from their obligations under $319 million of existing indebtedness and assumed certain liabilities relating to the AgStar Facilities. On April 13, US BioEnergy Corporation and US Bio Marion LLC completed the sale to Marion Energy Investments LLC, as assignee of Dougherty and First Bank & Trust, of substantially all of the assets relating to the Debtors' production facility in Marion, South Dakota. The consideration for the acquired assets consisted of release of US Bio Marion from its obligations under approximately $93 million of existing indebtedness to the Marion Buyers, payment by MEI of $934,861 in cash and assumption by the Marion Purchasers of certain liabilities relating to the Marion facility. VeraSun Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). VERASUN ENERGY: AP Services Awarded $1.75MM Success Fee ------------------------------------------------------- The Bankruptcy Court has awarded AP Services LLC, on a final basis, and authorized the Debtors to pay, a success fee totaling $1,750,000 no earlier than the effective date of the Debtors' plan of liquidation. VeraSun Energy had obtained the Court's approval to hire AP Services to assist them in the wind down of their estates. Barry Folse, a managing director at APS was to lead the APS engagement through the wind down process. Mr. Folse is a senior member of the APS Case Management Services practice and has assisted other debtors in liquidating and winding down their estates including Genuity, Cable & Wireless, Fleming Companies, and Sabratek. To further streamline APS engagement, four APS professionals previously dedicated to supporting the Debtors' operations and sale process agreed to transition off from the Debtors' engagement, or dramatically reduce their roles; while three APS professionals specializing in the wind down of Chapter 11 estates including claims administration and other matters will remain on the engagement. AP Services LLC asked the Court to direct the Debtors to pay it $1,750,000 as its contingent success fee. Pursuant to an agreement with the Debtors, APS is entitled to a contingent success fee amounting to $3,500,000 if the Debtors either confirm a plan of reorganization that becomes effective or completes one or more transactions that substantially transfers a significant portion of the business as a going concern to another entity that becomes effective or is consummated within 18 months of October 31, 2008. Laura J. Eisele, Esq., APS' associate general counsel, asserts that while APS has earned the entire success fee, APS is seeking approval for payment of a Contingent Success Fee in the reduced amount of $1.75 million. APS responded to the Debtors' need for speed by out-pacing its original target timeframe, Ms. Eisele contends. She notes that APS assisted and led the Debtors in planning, negotiating, executing and closing the asset purchase agreements for the sales of substantially all of their assets and, thus, effectuating and consummating the Sales. Roberta A. DeAngelis, the acting United States Trustee for Region 3, objected to the payment of the contingent success fee, arguing that although the Debtors have sold substantially all of their assets, the Debtors' bankruptcy case is not yet at its conclusion. "On the contrary, the Debtors have only recently filed a plan of liquidation and a disclosure statement, and have requested a confirmation hearing on October 14, 2009," the U.S. Trustee noted. Even if the Debtors' Plan is confirmed on October 14 and becomes effective 10 days later, the case is at least 45 days from its earliest possible conclusion, the U.S. Trustee added. The Court awarded the contingent success fee despite the objection. About VeraSun Energy Headquartered in Sioux Falls, South Dakota, VeraSun Energy Corp. -- http://www.verasun.com/or http://www.VE85.com/-- produces and markets ethanol and distillers grains. Founded in 2001, the company has a fleet of 16 production facilities in eight states, with 14 in operation. The Company and its debtor-affiliates filed for Chapter 11 protection on October 31, 2008 (Bankr. D. Del. Case No. 08-12606). Mark S. Chehi, Esq., at Skadden Arps Slate Meagher & Flom LLP represents the Debtors in their restructuring efforts. AlixPartners LLP serves as their restructuring advisor. Rothschild Inc. is their investment banker and Sitrick & Company is their communication agent. The Debtors' claims noticing and balloting agent is Kurtzman Carson Consultants LLC. The Debtors' total assets as of June 30, 2008, was $3,452,985,000 and their total debts as of June 30, 2008, was $1,913,214,000. VeraSun closed on April 1, 2009, the sale of substantially all of its assets to Valero Renewable Fuels, a subsidiary of Valero Energy Corporation, North America's largest petroleum refiner and marketer. The purchased assets included five ethanol production facilities and a development site. The facilities are located in Aurora, South Dakota; Fort Dodge, Charles City, and Hartley, Iowa; and Welcome, Minnesota, and the development site is in Reynolds, Indiana. Valero paid $350 million for the ethanol production facilities in Aurora, Fort Dodge, Charles City, Hartley and Welcome, in addition to the Reynolds site. Valero also successfully bid $72 million for the Albert City facility and $55 million for the Albion facility. The purchase price also includes working capital and other certain adjustments. VeraSun also completed on April 9 the sale to AgStar Financial Services PCA of substantially all of the assets relating to the company's production facilities in Dyersville, Iowa; Hankinson, North Dakota; Janesville, Minnesota; Central City and Ord, Nebraska; and Woodbury, Michigan. AgStar released the USBE Subsidiaries from their obligations under $319 million of existing indebtedness and assumed certain liabilities relating to the AgStar Facilities. On April 13, US BioEnergy Corporation and US Bio Marion LLC completed the sale to Marion Energy Investments LLC, as assignee of Dougherty and First Bank & Trust, of substantially all of the assets relating to the Debtors' production facility in Marion, South Dakota. The consideration for the acquired assets consisted of release of US Bio Marion from its obligations under approximately $93 million of existing indebtedness to the Marion Buyers, payment by MEI of $934,861 in cash and assumption by the Marion Purchasers of certain liabilities relating to the Marion facility. VeraSun Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). VERASUN ENERGY: North Dakota Gets Partial Stay Relief ----------------------------------------------------- The North Dakota Public Service Commission previously asked the United States Bankruptcy Court for the District of Delaware to lift the automatic stay so that it can commence an action in the North Dakota District Court against VeraSun Hankinson LLC, one of the Debtors, and to maintain an action against Liberty Mutual Insurance Company. Liberty subsequently filed an objection which led to discussions between the Commission and Liberty. The discussions led to both parties agreeing that the state insolvency proceeding contemplated by the Commission should move forward on a limited basis. The Parties agreed that the stay should only be lifted to allow the Commission to: -- seek its appointment as trustee under Chapter 60-04 of the North Dakota Century Code; and -- take possession of relevant books and records of the warehouseman, issue and publish a notice of appointment and notice to file claims with the Commission, and evaluate claims presented to it within the statutory period prescribed by applicable North Dakota law. The Debtors agreed to provide the Commission with documents and records to assist it and the Commission agreed to provide the Debtors and Liberty with a report and recommendation and to seek further stay reliefs to the extent the Commission seeks to take any further action in the State Court Proceeding. About VeraSun Energy Headquartered in Sioux Falls, South Dakota, VeraSun Energy Corp. -- http://www.verasun.com/or http://www.VE85.com/-- produces and markets ethanol and distillers grains. Founded in 2001, the company has a fleet of 16 production facilities in eight states, with 14 in operation. The Company and its debtor-affiliates filed for Chapter 11 protection on October 31, 2008 (Bankr. D. Del. Case No. 08-12606). Mark S. Chehi, Esq., at Skadden Arps Slate Meagher & Flom LLP represents the Debtors in their restructuring efforts. AlixPartners LLP serves as their restructuring advisor. Rothschild Inc. is their investment banker and Sitrick & Company is their communication agent. The Debtors' claims noticing and balloting agent is Kurtzman Carson Consultants LLC. The Debtors' total assets as of June 30, 2008, was $3,452,985,000 and their total debts as of June 30, 2008, was $1,913,214,000. VeraSun closed on April 1, 2009, the sale of substantially all of its assets to Valero Renewable Fuels, a subsidiary of Valero Energy Corporation, North America's largest petroleum refiner and marketer. The purchased assets included five ethanol production facilities and a development site. The facilities are located in Aurora, South Dakota; Fort Dodge, Charles City, and Hartley, Iowa; and Welcome, Minnesota, and the development site is in Reynolds, Indiana. Valero paid $350 million for the ethanol production facilities in Aurora, Fort Dodge, Charles City, Hartley and Welcome, in addition to the Reynolds site. Valero also successfully bid $72 million for the Albert City facility and $55 million for the Albion facility. The purchase price also includes working capital and other certain adjustments. VeraSun also completed on April 9 the sale to AgStar Financial Services PCA of substantially all of the assets relating to the company's production facilities in Dyersville, Iowa; Hankinson, North Dakota; Janesville, Minnesota; Central City and Ord, Nebraska; and Woodbury, Michigan. AgStar released the USBE Subsidiaries from their obligations under $319 million of existing indebtedness and assumed certain liabilities relating to the AgStar Facilities. On April 13, US BioEnergy Corporation and US Bio Marion LLC completed the sale to Marion Energy Investments LLC, as assignee of Dougherty and First Bank & Trust, of substantially all of the assets relating to the Debtors' production facility in Marion, South Dakota. The consideration for the acquired assets consisted of release of US Bio Marion from its obligations under approximately $93 million of existing indebtedness to the Marion Buyers, payment by MEI of $934,861 in cash and assumption by the Marion Purchasers of certain liabilities relating to the Marion facility. VeraSun Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). VERASUN ENERGY: Schauers Wants Lift Stay to Continue Appeal ----------------------------------------------------------- Curt Schauer and Susan Schauer, residents of Valley County, Nebraska, previously filed a case against Val-E Ethanol LLC, predecessor-in-interest to VeraSun Energy Corporation, in the Valley County District Court. The case is related to the granting of a zoning permit to Val-E for the construction of an ethanol plant in the area, which the Schauers oppose. In addition, the Schauers also filed a separate action in the Valley County District Court regarding violations of open meeting laws by the Valley County Planning Commission and the Valley County Board of Supervisors related to the zoning permit granted to Val-E. The District Court ruled in favor of Valley County and the Schauers appealed the ruling to the Nebraska Supreme Court. The Schauers note that during the pendency of the Appeal, the Debtors acquired the Ethanol Plant. Subsequently, the Appeal was stayed when the Debtors filed for Chapter 11 protection. As part of their liquidating process, the Debtors sold the Ethanol Plant to AgStar Financial Services, Inc., which then sold the Ethanol Plant to Green Plains Renewable Energy, Inc. Against this backdrop, the Schauers ask the United States Bankruptcy Court for the District of Delaware to lift the automatic stay so that they can continue the Appeal. The Schauers contend that lifting the automatic stay is appropriate because the Debtors no longer own the Ethanol Plant. About VeraSun Energy Headquartered in Sioux Falls, South Dakota, VeraSun Energy Corp. -- http://www.verasun.com/or http://www.VE85.com/-- produces and markets ethanol and distillers grains. Founded in 2001, the company has a fleet of 16 production facilities in eight states, with 14 in operation. The Company and its debtor-affiliates filed for Chapter 11 protection on October 31, 2008 (Bankr. D. Del. Case No. 08-12606). Mark S. Chehi, Esq., at Skadden Arps Slate Meagher & Flom LLP represents the Debtors in their restructuring efforts. AlixPartners LLP serves as their restructuring advisor. Rothschild Inc. is their investment banker and Sitrick & Company is their communication agent. The Debtors' claims noticing and balloting agent is Kurtzman Carson Consultants LLC. The Debtors' total assets as of June 30, 2008, was $3,452,985,000 and their total debts as of June 30, 2008, was $1,913,214,000. VeraSun closed on April 1, 2009, the sale of substantially all of its assets to Valero Renewable Fuels, a subsidiary of Valero Energy Corporation, North America's largest petroleum refiner and marketer. The purchased assets included five ethanol production facilities and a development site. The facilities are located in Aurora, South Dakota; Fort Dodge, Charles City, and Hartley, Iowa; and Welcome, Minnesota, and the development site is in Reynolds, Indiana. Valero paid $350 million for the ethanol production facilities in Aurora, Fort Dodge, Charles City, Hartley and Welcome, in addition to the Reynolds site. Valero also successfully bid $72 million for the Albert City facility and $55 million for the Albion facility. The purchase price also includes working capital and other certain adjustments. VeraSun also completed on April 9 the sale to AgStar Financial Services PCA of substantially all of the assets relating to the company's production facilities in Dyersville, Iowa; Hankinson, North Dakota; Janesville, Minnesota; Central City and Ord, Nebraska; and Woodbury, Michigan. AgStar released the USBE Subsidiaries from their obligations under $319 million of existing indebtedness and assumed certain liabilities relating to the AgStar Facilities. On April 13, US BioEnergy Corporation and US Bio Marion LLC completed the sale to Marion Energy Investments LLC, as assignee of Dougherty and First Bank & Trust, of substantially all of the assets relating to the Debtors' production facility in Marion, South Dakota. The consideration for the acquired assets consisted of release of US Bio Marion from its obligations under approximately $93 million of existing indebtedness to the Marion Buyers, payment by MEI of $934,861 in cash and assumption by the Marion Purchasers of certain liabilities relating to the Marion facility. VeraSun Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). VERENIUM CORP: To Raise $12.3MM in Offering of Shares, Warrants --------------------------------------------------------------- Verenium Corporation has priced an underwritten public offering of 2,250,000 shares of its common stock and warrants to purchase an additional 900,000 shares of common stock at a price to the public of $6.00 per unit. Each unit consists of one share of common stock and a warrant to purchase 0.40 of a share of common stock. The shares of common stock and warrants are immediately separable and will be issued separately. The warrants have a five-year term and an exercise price of $7.59. Net proceeds after estimated underwriting discounts and commissions and estimated expenses, will be roughly $12.3 million, providing the Company with several additional months of operating capital into 2010. The offering was to close October 9, 2009, subject to the satisfaction of customary closing conditions. Lazard Capital Markets LLC is acting as the sole book-running manager for the offering. A full-text copy of the Prospectus Supplement is available at no charge at http://ResearchArchives.com/t/s?46a4 A full-text copy of the Underwriting Agreement is available at no charge at http://ResearchArchives.com/t/s?46a3 About Verenium Based in Cambridge, Massachusetts, Verenium Corporation (Nasdaq: VRNMD) -- http://www.verenium.com/-- is a leader in the development and commercialization of cellulosic ethanol, an environmentally-friendly and renewable transportation fuel, as well as high-performance specialty enzymes for applications within the biofuels, industrial, and animal health markets. The Company possesses integrated, end-to-end capabilities and cutting-edge technology in pre-treatment, novel enzyme development, fermentation and project development for next-generation biofuels. Through Vercipia, the Company is moving rapidly to commercialize cellulosic technology for the production of ethanol from a wide array of non-food feedstocks, including dedicated energy crops, agricultural waste, and wood products. In addition to the vast potential for biofuels, a multitude of large-scale industrial opportunities exist for the Company for products derived from the production of low-cost, biomass-derived sugars. Verenium's Specialty Enzyme business harnesses the power of enzymes to create a broad range of specialty products to meet high-value commercial needs. Verenium's world class R&D organization is renowned for its capabilities in the rapid screening, identification, and expression of enzymes-proteins that act as the catalysts of biochemical reactions. VISTEON CORP: Bid for $8.1MM Top Officer Bonuses Rejected --------------------------------------------------------- Law360 reports that a bankruptcy judge has reportedly rejected auto parts supplier Visteon Corp.'s request to approve bonuses of as much as $8.1 million for its 12 top officers, but the company did get the go-ahead to give $3.3 million in long-term incentives to 83 other managers and to enter a $30.6 million accommodation agreement with General Motors Corp. As reported by the TCR on Sept. 23, Visteon Corp. has already trimmed the size of its proposed bonus program by 86% to win support from lenders and the official committee of unsecured creditors. The program originally proposed in June would have cost as much as $80.1 million to cover 2,500 executives and workers. Creditors, suppliers, and customers rose in opposition, noting how automakers and parts supplier abandoned similar programs. The new program proposes to pay a maximum of $11.4 million and will cover 12 senior executives and 83 other managers. According to Bloomberg's Bill Rochelle, although Visteon reduced the program to $11.4 million from $80.1 million, the U.S. Trustee and the United Auto Workers union again opposed and persuaded the bankruptcy judge to disapprove $8.1 million in bonuses for 12 executives. 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) * Atty Calls E-Filing in Bankruptcy Court Anti-Competitive ---------------------------------------------------------- Law360 reports that a Chicago attorney has taken aim at the Supreme Court of Illinois, the U.S. Bankruptcy Court for the Northern District of Illinois and the American Bar Association, alleging federal bankruptcy laws and electronic filing requirements have wrongly undercut competition in the U.S. legal industry. * Bankruptcy Experts Expect More Business to Fail ------------------------------------------------- Chelsea Emery at Reuters reports that bankruptcy professionals at the Reuters Restructuring Summit in New York this week have a grim view on the U.S. corporate recovery, as consumers will be stingy with their spending. James Sprayregen, a bankruptcy attorney for Kirkland & Ellis, said that media, real estate, and private equity-sponsored companies are most in need of drastic restructuring, Reuters relates. "We are still headed for an avalanche of deals over the next 12 to 18 months that will keep the restructuring world quite busy," Reuters quoted GE Capital, Restructuring Finance managing director Robert McMahon as saying. According to Reuters, higher unemployment and little bank lending will keep a lid on economic gains, likely forcing thousands more companies into default, bankruptcy or liquidation. Reuters states that miserly bank lending is exacerbating the problem. The U.S. economic recovery will be sluggish as "basically bankrupt" financial companies and indebted consumers impede it, Simon Kennedy and Rainer Buergin at Bloomberg News report, citing billionaire investor George Soros. * Depository Trust Renews Call for Supporting Trade Repositories ---------------------------------------------------------------- The Depository Trust & Clearing Corporation called for legislative language mandating a trade repository for over-the-counter credit derivatives contracts in testimony submitted to the House Financial Services Committee. Larry E. Thompson, DTCC General Counsel, "As the operator of the only global trade repository, we have a unique perspective on its value in helping regulators mitigate systemic risk during a crisis. We believe that all derivatives traded by U.S. financial institutions should be reported to a single trade repository for each asset class, which would serve regulators as a comprehensive source of information. From a public policy perspective and in the interests of ensuring the stability and transparency of financial markets, there must be a consolidated, comprehensive single entity that collects and maintains the underlying position data and makes it available to regulators in the most efficient, timely and usable manner." In the testimony, Mr. Thompson expressed concern that current legislative proposals, which require only those trades that are not cleared through a central counterpartyto be reported to a repository, could undermine the goals of re-regulation and represent a step backward by reducing the level of transparency that now exists in the marketplace. "We are concerned that the legislative proposals under consideration would have the effect of denying regulators the opportunity to see systemic risk from a central vantage point because it would fragment the existing information on CDS contracts stored in the repository," Mr. Thompson said. "We strongly recommend that the draft legislation before the House be revised to ensure that all credit default swap trades, regardless of whether they are cleared or not, be reported to a single swap repository, which exists to provide regulators and the public with the consolidated information they need during normal times, and, especially, at times of crisis." DTCC has publicly stated that it will support all efforts to create central counterparty services planned in the U.S. and overseas on a non-discriminatory basis. Mr. Thompson stressed that when both the CCP and repository work in tandem to support each others functions, risk can be significantly mitigated -- and transparency enhanced in the marketplace. "We are concerned that some in the OTC derivatives market may assume once a trade guarantee is provided through a central counterparty, there may be less need for a central registry to track the underlying position data," Thompson said. "We reject this view, based on our long experience managing the risk flowing from the failure of a single member firm. At the critical juncture of a firm failure, knowing the underlying position data of multiple transactions in a timely manner will be significant in providing transparency to regulators--and in protecting confidence in the market itself. We believe the role of having a central repository should be reinforced as a matter of public policy." DTCC supports the goal of transparency and believes repository data should be shared with regulators in the U.S. and overseas. DTCC also supports the efforts of the OTC Derivatives Regulators' Forum, a group of international regulators who announced plans this week to develop a global framework for regulatory cooperation and to share ideas and information on CCPs and trade repositories serving the OTC derivatives market. The Trade Information Warehouse not only provides essential information on the underlying position data of CDS transactions, but it also mitigates risk by handling the calculation, netting, and central settlement of payment obligations between counterparties, and automates the processing of "credit events" -- situations where the protection against default provided by a credit default swap is activated. Since last year, DTCC has seamlessly processed or is processing, through the Warehouse, more than 40 credit events, including the Lehman Brothers and Washington Mutual bankruptcies as well as the conservatorships for Freddie Mac and Fannie Mae. Because the industry had in place a robust, centralized infrastructure for the CDS market in the wake of last year's financial turmoil, market participants were able to manage the multiple processing and operational challenges they faced with a greater degree of certainty and efficiency. Following the Lehman bankruptcy last year, DTCC played a significant role in unwinding over $500 billion in open trading positions from trades in equities, mortgage-backed and U.S. government securities, without any loss to the industry--and avoiding additional burden on taxpayers. The Warehouse connects and services over 1,400 global dealers, asset managers, and other market participants. About DTCC The Depository Trust & Clearing Corporation (DTCC), through its subsidiaries, provides clearance, settlement and information services for equities, corporate and municipal bonds, government and mortgage-backed securities, money market instruments and over- the-counter derivatives. In addition, DTCC is a leading processor of mutual funds and insurance transactions, linking funds and carriers with financial firms and third parties who market these products. DTCC's depository provides custody and asset servicing for more than 3.5 million securities issues from the United States and 117 other countries and territories, valued at $27.6 trillion. In 2008, DTCC settled more than $1.88 quadrillion in securities transactions. DTCC has operating facilities in multiple locations in the United States and overseas. For more information on DTCC, visit www.dtcc.com. * Frank Pledges to Revise Derivatives Draft ------------------------------------------- ABI reports that House Financial Services Chairman Barney Frank (D-Mass.) said yesterday that he would narrow his proposal to better regulate the multitrillion-dollar derivatives market, noting he agreed with regulators' criticisms of the draft. * U.S. Consumer Credit Fell By $12 Billion in August ---------------------------------------------------- ABI reports that the Federal Reserve reported yesterday that U.S. consumer credit fell in August for a seventh straight month as banks maintained restrictive terms and job losses made households reluctant to borrow. * Whalen Predicts Bank Losses to Be Twice 1990s' Rate ----------------------------------------------------- Credit losses at U.S. banks won't reach their highest levels "until well into next year," in the judgment of Christopher Whalen from Institutional Risk Analytics, Bill Rochelle reported. In connection with a forthcoming article in Bank Credit Analyst, Mr. Whalen said the "financial hit" next year to the banking industry and the U.S. economy will be "dreadful." According to the report, to support his thesis, Mr. Whalen's analysis of banks' financial condition tells him that losses in the current credit cycle will be twice what they were in the 1990s. He believes the aggregate loss rate for the banking industry as a whole will be 4%, or twice the rate in the early 1990s. Improving banks' financial strength will be difficult, Mr. Whalen says, because the larger banks "as a group" don't have sufficient earnings to support higher levels of equity capital. Mr. Whalen, according to Bloomberg, continues to predict that some 1,000 banks will fail. He says that government ownership of banks, financial assets and real estate "may become a medium-term necessity." * Credit Solutions Reaffirms Commitment to Debt Settlement Group ---------------------------------------------------------------- Credit Solutions has completed an intensive, 3-day audit for compliance with the best-practice standards of The U.S. Organizations for Bankruptcy Alternatives, a leading U.S. debt negotiation industry association dedicated to consumer protection. The company first earned USOBA certification in October 2008 via an independent audit by BSI Management Systems, a division of The BSI Group -- the accredited global registrar that works with organizations to assess the implementation and administration of their quality management systems and business processes. To maintain USOBA certification, Credit Solutions' sales, customer service and settlement operations are audited "top-to-bottom" annually to ensure they are continuing their commitment to USOBA's standards of excellence, consumer protections and disclosures, and customer satisfaction. "Our USOBA audits also are designed to reassure current and prospective clients that we are committed to the highest standards of professional conduct and business best-practices," said Credit Solutions CEO Doug Van Arsdale. According to the National Conference of State Legislatures, 41 bills have been introduced at the state level this year that would regulate debt settlement, credit counseling, and debt management programs. And despite changes in bankruptcy legislation that made filing for bankruptcy more difficult, record numbers of Americans have done so. USOBA members often are consumers' last hope before bankruptcy. About USOBA USOBA is dedicated to providing its member companies with important, industry related information, including compliance requirements, as well as advocating on behalf of its membership for fair and appropriate industry regulation that maintains the utmost in consumer protection. USOBA members are provided a USOBA State Law Summary guide, the only one of its kind in the industry, to better ensure and promote national compliance. This guide contains the laws and regulations, state by state, and has been reviewed by regulators and legislators. About Credit Solutions The nation's debt settlement industry leader, Credit Solutions is recognized by the American Business Awards for the "Best Customer Services Department in Financial Services" and won a 2009 Red Herring 100 North America Award for its custom online technology. Since its founding in 2003, the company has settled more than $1 billion in consumer debt, helping over 250,000 Americans achieve debt freedom. * Greenhill Expands Financing Advisory & Restructuring Group ------------------------------------------------------------ Greenhill & Co., Inc. disclosed that Gareth Davies will join the firm as Managing Director. Mr. Davies will join the Firm's Financing Advisory and Restructuring Group and be based in London. Mr. Davies, 37, has been a Managing Director in the Restructuring Advisory team at Close Brothers Corporate Finance. Mr. Davies has worked in Financing Advisory and Restructuring at Close Brothers since 1997, having previously qualified as a Chartered Accountant at PricewaterhouseCoopers. Simon Borrows, Co-Chief Executive Officer of Greenhill, said, "Gareth is another important senior recruit to our Financing Advisory and Restructuring Group. This addition follows the recent recruitment in New York of Andy Kramer, former Head of Restructuring in the Americas for UBS. The Firm has been busy giving independent advice to companies on a variety of restructuring matters this year, demonstrated by our recent work for Bearingpoint, Chrysler, Fleetwood Enterprises, NCI Building Systems, U.S. Shipping and the U.S. Pension Benefit Guaranty Corporation in respect of the Delphi and Lyondell Basell bankruptcies. Likewise, we have been active in advising on financings apart from restructurings, including recent assignments for Inchcape, Ladbrokes, Rexam and Shanks Group in the UK. We believe that opportunities for us both in complex restructurings and in other financings will continue to grow, and both our Financing Advisory and Restructuring team and many of our industry sector specialists are focused on these opportunities." About Greenhill & Co. Greenhill & Co., Inc. is a leading independent investment bank that provides financial advice on significant mergers, acquisitions, restructurings and other financial matters; assists private funds in raising capital from investors; and manages merchant banking funds. It acts for clients located throughout the world from its offices in New York, London, Frankfurt, Toronto, Tokyo, Chicago, Dallas, Houston, Los Angeles and San Francisco. * Lawyers to Fight Bankruptcy Law that Bars "More Debt" Advice -------------------------------------------------------------- Thomas B. Scheffey at The Connecticut Law Tribune reports that Robert Milavetz -- the founder of an 11-lawyer bankruptcy firm in the suburbs of Minneapolis -- and other lawyers will fight a 2005 law that seemed to forbid lawyers from advising bankruptcy clients to incur any more debt. According to The Law Tribune, the new law apparently required bankruptcy lawyers to include in their advertisements that "we are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code." The report says that Mr. Milavetz made a federal case of it, seeking declaratory relief in a Minnesota federal court. The Law Tribune relates that the U.S. government argued that Congress' orders weren't a breach of the First Amendment right to free speech, or commercial free speech law. The Law Tribune states that the 8th U.S. Circuit Court of Appeals rendered a split decision, holding that the directive to not advise taking on debt was unconstitutional, but that the advertising requirement had a rational basis in a legitimate governmental purpose. The government and Mr. Milavetz wanted to go to the U.S. Supreme Court and appeal the parts they lost, with Mr. Milavetz tapping bankruptcy scholar D. Eric Brunstad, a partner in Dechert to handle the petition for certiorari, according to The Law Tribune. The Justice Department and Mr. Brunstad, The Law Tribune relates, beat steep odds and won their petitions for certiorari, and the combined cases have a total of six issues. The report states that arguments are set for December. * BOND PRICING -- For the Week From October 5 to 9, 2009 -------------------------------------------------------- Company Coupon Maturity Bid Price ------- ------ -------- --------- 155 E TROPICANA 8.75% 4/1/2012 1.25 ABITIBI-CONS FIN 7.88% 8/1/2009 13.00 ADVANTA CAP TR 8.99% 12/17/2026 5.00 AMBAC INC 9.38% 8/1/2011 58.85 AMBASSADORS INTL 3.75% 4/15/2027 45.50 AMER GENL FIN 3.40% 10/15/2009 97.50 AMER GENL FIN 3.88% 10/15/2009 99.56 AMER GENL FIN 4.20% 10/15/2009 98.60 AMER GENL FIN 4.25% 11/15/2009 96.10 AMER GENL FIN 4.55% 10/15/2009 99.10 AMER GENL FIN 5.25% 7/15/2010 80.00 AMER GENL FIN 5.65% 7/15/2010 79.00 AMER GENL FIN 8.75% 9/15/2012 38.00 AMR CORP 10.40% 3/10/2011 46.00 AMR CORP 10.45% 11/15/2011 49.00 ANTHRACITE CAP 11.75% 9/1/2027 40.75 ANTIGENICS 5.25% 2/1/2025 39.04 ARCO CHEMICAL CO 10.25% 11/1/2010 64.95 BANK NEW ENGLAND 8.75% 4/1/1999 10.03 BANK NEW ENGLAND 9.88% 9/15/1999 10.03 BANKUNITED FINL 3.13% 3/1/2034 7.30 BELL MICROPRODUC 3.75% 3/5/2024 40.00 BOWATER INC 6.50% 6/15/2013 21.00 BOWATER INC 9.38% 12/15/2021 23.50 BOWATER INC 9.50% 10/15/2012 22.00 BROOKSTONE CO 12.00% 10/15/2012 43.00 CALLON PETROLEUM 9.75% 12/8/2010 46.60 CAPMARK FINL GRP 7.88% 5/10/2012 21.69 CAPMARK FINL GRP 8.30% 5/10/2017 22.75 CCH I LLC 9.92% 4/1/2014 0.55 CCH I LLC 10.00% 5/15/2014 1.00 CCH I LLC 11.75% 5/15/2014 1.00 CCH I LLC 12.13% 1/15/2015 1.00 CCH I LLC 13.50% 1/15/2014 1.63 CCH I/CCH I CP 11.00% 10/1/2015 18.00 CCH I/CCH I CP 11.00% 10/1/2015 18.13 CCK-CALL10/09 8.00% 4/15/2023 100.50 CHAMPION ENTERPR 2.75% 11/1/2037 17.00 CHARTER COMM HLD 10.75% 10/1/2009 2.00 CHARTER COMM INC 6.50% 10/1/2027 34.25 CIT GROUP INC 3.85% 11/15/2009 69.90 CIT GROUP INC 3.95% 12/15/2009 58.00 CIT GROUP INC 4.05% 2/15/2010 58.00 CIT GROUP INC 4.13% 11/3/2009 65.50 CIT GROUP INC 4.25% 2/1/2010 63.00 CIT GROUP INC 4.25% 9/15/2010 58.20 CIT GROUP INC 4.30% 3/15/2010 59.00 CIT GROUP INC 4.30% 6/15/2010 59.00 CIT GROUP INC 4.35% 6/15/2010 57.00 CIT GROUP INC 4.45% 5/15/2010 56.42 CIT GROUP INC 4.60% 8/15/2010 60.10 CIT GROUP INC 4.63% 11/15/2009 78.25 CIT GROUP INC 4.75% 12/15/2010 61.00 CIT GROUP INC 4.80% 12/15/2009 56.52 CIT GROUP INC 4.85% 12/15/2009 65.10 CIT GROUP INC 4.85% 3/15/2010 61.00 CIT GROUP INC 4.90% 12/15/2010 58.00 CIT GROUP INC 5.00% 11/15/2009 60.00 CIT GROUP INC 5.00% 11/15/2009 61.25 CIT GROUP INC 5.00% 11/15/2009 69.47 CIT GROUP INC 5.00% 12/15/2010 58.50 CIT GROUP INC 5.00% 3/15/2011 66.10 CIT GROUP INC 5.00% 3/15/2012 49.00 CIT GROUP INC 5.05% 11/15/2009 69.50 CIT GROUP INC 5.05% 3/15/2010 57.00 CIT GROUP INC 5.05% 11/15/2010 56.80 CIT GROUP INC 5.05% 12/15/2010 64.00 CIT GROUP INC 5.05% 3/15/2011 56.50 CIT GROUP INC 5.15% 2/15/2010 69.00 CIT GROUP INC 5.15% 3/15/2010 56.75 CIT GROUP INC 5.15% 2/15/2011 57.00 CIT GROUP INC 5.15% 2/15/2011 53.60 CIT GROUP INC 5.15% 4/15/2011 56.00 CIT GROUP INC 5.20% 11/3/2010 59.00 CIT GROUP INC 5.25% 5/15/2010 55.55 CIT GROUP INC 5.25% 9/15/2010 56.00 CIT GROUP INC 5.25% 11/15/2010 72.00 CIT GROUP INC 5.25% 11/15/2010 57.85 CIT GROUP INC 5.25% 11/15/2010 56.80 CIT GROUP INC 5.25% 12/15/2010 54.00 CIT GROUP INC 5.30% 6/15/2010 61.00 CIT GROUP INC 5.35% 6/15/2011 58.13 CIT GROUP INC 5.35% 8/15/2011 56.50 CIT GROUP INC 5.40% 5/15/2011 53.00 CIT GROUP INC 5.45% 8/15/2010 56.82 CIT GROUP INC 5.50% 8/15/2010 64.10 CIT GROUP INC 5.60% 4/27/2011 60.00 CIT GROUP INC 6.25% 12/15/2009 60.00 CIT GROUP INC 6.25% 2/15/2010 57.00 CIT GROUP INC 6.50% 12/15/2009 60.01 CIT GROUP INC 6.50% 2/15/2010 56.80 CIT GROUP INC 6.50% 3/15/2010 58.10 CIT GROUP INC 6.50% 12/15/2010 56.00 CIT GROUP INC 6.50% 1/15/2011 56.00 CIT GROUP INC 6.50% 3/15/2011 59.00 CIT GROUP INC 6.60% 2/15/2011 56.50 CIT GROUP INC 6.75% 3/15/2011 63.00 CIT GROUP INC 6.88% 11/1/2009 65.00 CIT GROUP INC 12.00% 12/18/2018 18.75 CITADEL BROADCAS 4.00% 2/15/2011 17.50 CLEAR CHANNEL 4.40% 5/15/2011 62.50 COOPER-STANDARD 8.38% 12/15/2014 15.70 CREDENCE SYSTEM 3.50% 5/15/2010 51.50 DAYTON SUPERIOR 13.00% 6/15/2009 20.00 DECODE GENETICS 3.50% 4/15/2011 15.00 DELPHI CORP 6.50% 8/15/2013 2.00 DEX MEDIA INC 8.00% 11/15/2013 19.00 DEX MEDIA INC 9.00% 11/15/2013 15.00 DEX MEDIA INC 9.00% 11/15/2013 19.00 DEX MEDIA WEST 9.88% 8/15/2013 18.50 DOWNEY FINANCIAL 6.50% 7/1/2014 16.25 DUNE ENERGY INC 10.50% 6/1/2012 55.00 EDDIE BAUER HLDG 5.25% 4/1/2014 0.35 FAIRPOINT COMMUN 13.13% 4/1/2018 11.50 FAIRPOINT COMMUN 13.13% 4/1/2018 14.00 FINLAY FINE JWLY 8.38% 6/1/2012 1.00 FLEETWOOD ENTERP 14.00% 12/15/2011 40.75 FORD MOTOR CRED 5.00% 10/20/2009 99.50 FRANKLIN BANK 4.00% 5/1/2027 1.25 GASCO ENERGY INC 5.50% 10/5/2011 45.50 GENERAL MOTORS 7.13% 7/15/2013 14.00 GENERAL MOTORS 7.40% 9/1/2025 14.13 GENERAL MOTORS 7.70% 4/15/2016 14.50 GENERAL MOTORS 8.10% 6/15/2024 13.75 GENERAL MOTORS 8.25% 7/15/2023 13.88 GENERAL MOTORS 8.38% 7/15/2033 14.25 GENERAL MOTORS 8.80% 3/1/2021 15.25 GENERAL MOTORS 9.40% 7/15/2021 14.00 GENERAL MOTORS 9.45% 11/1/2011 13.75 GMAC LLC 5.00% 10/15/2009 99.88 GMAC LLC 6.75% 11/15/2009 96.50 GMAC LLC 6.85% 10/15/2009 99.70 HAIGHTS CROSS OP 11.75% 8/15/2011 43.00 HAWAIIAN TELCOM 9.75% 5/1/2013 2.25 HERBST GAMING 7.00% 11/15/2014 4.00 HERBST GAMING 8.13% 6/1/2012 4.00 IDEARC INC 8.00% 11/15/2016 4.19 INDALEX HOLD 11.50% 2/1/2014 1.00 INN OF THE MOUNT 12.00% 11/15/2010 43.00 INTCOMEX INC 11.75% 1/15/2011 74.50 INTL LEASE FIN 4.10% 10/15/2009 99.25 INTL LEASE FIN 4.30% 10/15/2009 97.50 INTL LEASE FIN 4.45% 10/15/2009 98.50 INTL LEASE FIN 4.50% 11/15/2009 97.14 JOHN HANCOCK LIF 3.45% 10/15/2009 99.80 KAISER ALUM&CHEM 12.75% 2/1/2003 8.75 LANDAMERICA 3.13% 11/15/2033 29.25 LAZYDAYS RV 11.75% 5/15/2012 3.00 LEHMAN BROS HLDG 4.00% 8/3/2009 9.00 LEHMAN BROS HLDG 4.38% 11/30/2010 15.50 LEHMAN BROS HLDG 4.50% 7/26/2010 15.50 LEHMAN BROS HLDG 4.70% 3/6/2013 13.60 LEHMAN BROS HLDG 4.80% 3/13/2014 12.50 LEHMAN BROS HLDG 4.80% 6/24/2023 12.15 LEHMAN BROS HLDG 5.00% 1/14/2011 15.85 LEHMAN BROS HLDG 5.00% 1/22/2013 13.00 LEHMAN BROS HLDG 5.00% 2/11/2013 13.00 LEHMAN BROS HLDG 5.00% 8/3/2014 13.50 LEHMAN BROS HLDG 5.00% 8/5/2015 11.50 LEHMAN BROS HLDG 5.00% 5/28/2023 13.50 LEHMAN BROS HLDG 5.00% 6/17/2023 12.50 LEHMAN BROS HLDG 5.10% 1/28/2013 12.00 LEHMAN BROS HLDG 5.10% 2/15/2020 11.25 LEHMAN BROS HLDG 5.15% 2/4/2015 11.75 LEHMAN BROS HLDG 5.20% 5/13/2020 13.50 LEHMAN BROS HLDG 5.25% 2/6/2012 15.30 LEHMAN BROS HLDG 5.25% 2/11/2015 13.50 LEHMAN BROS HLDG 5.25% 3/5/2018 10.90 LEHMAN BROS HLDG 5.25% 3/8/2020 13.00 LEHMAN BROS HLDG 5.25% 5/20/2023 13.50 LEHMAN BROS HLDG 5.35% 2/25/2018 13.50 LEHMAN BROS HLDG 5.35% 3/13/2020 12.99 LEHMAN BROS HLDG 5.35% 6/14/2030 13.50 LEHMAN BROS HLDG 5.38% 5/6/2023 12.15 LEHMAN BROS HLDG 5.40% 3/6/2020 12.65 LEHMAN BROS HLDG 5.40% 3/20/2020 11.00 LEHMAN BROS HLDG 5.40% 3/30/2029 13.50 LEHMAN BROS HLDG 5.40% 6/21/2030 13.50 LEHMAN BROS HLDG 5.45% 3/15/2025 12.50 LEHMAN BROS HLDG 5.45% 4/6/2029 13.50 LEHMAN BROS HLDG 5.45% 2/22/2030 11.09 LEHMAN BROS HLDG 5.45% 7/19/2030 12.51 LEHMAN BROS HLDG 5.45% 9/20/2030 12.50 LEHMAN BROS HLDG 5.50% 4/4/2016 16.00 LEHMAN BROS HLDG 5.50% 2/4/2018 13.50 LEHMAN BROS HLDG 5.50% 2/19/2018 13.50 LEHMAN BROS HLDG 5.50% 11/4/2018 11.00 LEHMAN BROS HLDG 5.50% 2/27/2020 12.15 LEHMAN BROS HLDG 5.50% 8/19/2020 12.20 LEHMAN BROS HLDG 5.50% 3/14/2023 12.38 LEHMAN BROS HLDG 5.50% 4/8/2023 13.50 LEHMAN BROS HLDG 5.50% 4/15/2023 13.50 LEHMAN BROS HLDG 5.50% 4/23/2023 13.50 LEHMAN BROS HLDG 5.50% 8/5/2023 11.88 LEHMAN BROS HLDG 5.50% 10/7/2023 12.15 LEHMAN BROS HLDG 5.50% 1/27/2029 13.50 LEHMAN BROS HLDG 5.50% 2/3/2029 13.38 LEHMAN BROS HLDG 5.50% 8/2/2030 12.50 LEHMAN BROS HLDG 5.55% 2/11/2018 13.00 LEHMAN BROS HLDG 5.55% 3/9/2029 11.15 LEHMAN BROS HLDG 5.55% 1/25/2030 11.75 LEHMAN BROS HLDG 5.55% 9/27/2030 12.99 LEHMAN BROS HLDG 5.55% 12/31/2034 13.50 LEHMAN BROS HLDG 5.60% 1/22/2018 13.00 LEHMAN BROS HLDG 5.60% 9/23/2023 11.00 LEHMAN BROS HLDG 5.60% 2/17/2029 12.15 LEHMAN BROS HLDG 5.60% 2/24/2029 12.50 LEHMAN BROS HLDG 5.60% 3/2/2029 13.50 LEHMAN BROS HLDG 5.60% 2/25/2030 12.50 LEHMAN BROS HLDG 5.60% 5/3/2030 12.38 LEHMAN BROS HLDG 5.63% 1/24/2013 16.75 LEHMAN BROS HLDG 5.63% 3/15/2030 12.00 LEHMAN BROS HLDG 5.65% 9/14/2020 14.00 LEHMAN BROS HLDG 5.65% 11/23/2029 12.05 LEHMAN BROS HLDG 5.65% 8/16/2030 12.51 LEHMAN BROS HLDG 5.65% 12/31/2034 13.50 LEHMAN BROS HLDG 5.70% 1/28/2018 12.51 LEHMAN BROS HLDG 5.70% 2/10/2029 12.50 LEHMAN BROS HLDG 5.70% 4/13/2029 13.50 LEHMAN BROS HLDG 5.70% 9/7/2029 13.50 LEHMAN BROS HLDG 5.70% 12/14/2029 13.50 LEHMAN BROS HLDG 5.75% 4/25/2011 14.88 LEHMAN BROS HLDG 5.75% 7/18/2011 15.00 LEHMAN BROS HLDG 5.75% 5/17/2013 16.00 LEHMAN BROS HLDG 5.75% 3/27/2023 12.50 LEHMAN BROS HLDG 5.75% 10/15/2023 13.50 LEHMAN BROS HLDG 5.75% 10/21/2023 11.00 LEHMAN BROS HLDG 5.75% 11/12/2023 13.50 LEHMAN BROS HLDG 5.75% 11/25/2023 13.50 LEHMAN BROS HLDG 5.75% 12/16/2028 13.50 LEHMAN BROS HLDG 5.75% 12/23/2028 13.50 LEHMAN BROS HLDG 5.75% 8/24/2029 11.38 LEHMAN BROS HLDG 5.75% 9/14/2029 12.38 LEHMAN BROS HLDG 5.75% 10/12/2029 13.50 LEHMAN BROS HLDG 5.75% 3/29/2030 12.15 LEHMAN BROS HLDG 5.80% 9/3/2020 13.50 LEHMAN BROS HLDG 5.80% 10/25/2030 13.50 LEHMAN BROS HLDG 5.85% 11/8/2030 13.00 LEHMAN BROS HLDG 5.88% 11/15/2017 12.50 LEHMAN BROS HLDG 5.90% 5/4/2029 11.75 LEHMAN BROS HLDG 5.90% 2/7/2031 12.51 LEHMAN BROS HLDG 5.95% 12/20/2030 11.30 LEHMAN BROS HLDG 6.00% 7/19/2012 16.00 LEHMAN BROS HLDG 6.00% 12/18/2015 13.00 LEHMAN BROS HLDG 6.00% 2/12/2018 11.50 LEHMAN BROS HLDG 6.00% 1/22/2020 13.00 LEHMAN BROS HLDG 6.00% 2/12/2020 11.20 LEHMAN BROS HLDG 6.00% 1/29/2021 12.75 LEHMAN BROS HLDG 6.00% 10/23/2028 12.50 LEHMAN BROS HLDG 6.00% 11/18/2028 12.50 LEHMAN BROS HLDG 6.00% 5/11/2029 11.01 LEHMAN BROS HLDG 6.00% 7/20/2029 13.50 LEHMAN BROS HLDG 6.00% 4/30/2034 11.50 LEHMAN BROS HLDG 6.00% 7/30/2034 13.50 LEHMAN BROS HLDG 6.00% 2/21/2036 12.50 LEHMAN BROS HLDG 6.00% 2/24/2036 12.51 LEHMAN BROS HLDG 6.00% 2/12/2037 13.50 LEHMAN BROS HLDG 6.05% 6/29/2029 11.00 LEHMAN BROS HLDG 6.10% 8/12/2023 12.15 LEHMAN BROS HLDG 6.15% 4/11/2031 13.50 LEHMAN BROS HLDG 6.20% 9/26/2014 16.25 LEHMAN BROS HLDG 6.20% 6/15/2027 13.50 LEHMAN BROS HLDG 6.20% 5/25/2029 13.50 LEHMAN BROS HLDG 6.25% 2/5/2021 12.75 LEHMAN BROS HLDG 6.25% 2/22/2023 13.50 LEHMAN BROS HLDG 6.40% 10/11/2022 12.50 LEHMAN BROS HLDG 6.50% 2/28/2023 13.50 LEHMAN BROS HLDG 6.50% 3/6/2023 7.75 LEHMAN BROS HLDG 6.50% 9/20/2027 12.13 LEHMAN BROS HLDG 6.50% 10/18/2027 13.50 LEHMAN BROS HLDG 6.50% 10/25/2027 13.50 LEHMAN BROS HLDG 6.50% 11/15/2032 12.75 LEHMAN BROS HLDG 6.50% 1/17/2033 12.13 LEHMAN BROS HLDG 6.50% 2/13/2037 12.00 LEHMAN BROS HLDG 6.50% 6/21/2037 12.50 LEHMAN BROS HLDG 6.50% 7/13/2037 10.90 LEHMAN BROS HLDG 6.60% 10/3/2022 12.94 LEHMAN BROS HLDG 6.63% 1/18/2012 16.25 LEHMAN BROS HLDG 6.63% 7/27/2027 13.90 LEHMAN BROS HLDG 6.75% 12/28/2017 0.06 LEHMAN BROS HLDG 6.75% 7/1/2022 13.50 LEHMAN BROS HLDG 6.75% 11/22/2027 13.50 LEHMAN BROS HLDG 6.75% 3/11/2033 13.50 LEHMAN BROS HLDG 6.75% 10/26/2037 11.89 LEHMAN BROS HLDG 6.80% 9/7/2032 11.55 LEHMAN BROS HLDG 6.85% 8/16/2032 13.50 LEHMAN BROS HLDG 6.85% 8/23/2032 12.13 LEHMAN BROS HLDG 6.88% 5/2/2018 17.50 LEHMAN BROS HLDG 6.90% 9/1/2032 12.85 LEHMAN BROS HLDG 7.00% 4/16/2019 13.60 LEHMAN BROS HLDG 7.00% 5/12/2023 11.56 LEHMAN BROS HLDG 7.00% 10/4/2032 11.50 LEHMAN BROS HLDG 7.00% 7/27/2037 13.60 LEHMAN BROS HLDG 7.00% 9/28/2037 12.38 LEHMAN BROS HLDG 7.00% 11/16/2037 12.25 LEHMAN BROS HLDG 7.00% 12/28/2037 11.85 LEHMAN BROS HLDG 7.00% 1/31/2038 12.26 LEHMAN BROS HLDG 7.00% 2/1/2038 11.00 LEHMAN BROS HLDG 7.00% 2/7/2038 11.05 LEHMAN BROS HLDG 7.00% 2/8/2038 10.25 LEHMAN BROS HLDG 7.00% 4/22/2038 12.50 LEHMAN BROS HLDG 7.05% 2/27/2038 12.50 LEHMAN BROS HLDG 7.10% 3/25/2038 13.75 LEHMAN BROS HLDG 7.20% 8/15/2009 16.05 LEHMAN BROS HLDG 7.25% 2/27/2038 10.75 LEHMAN BROS HLDG 7.25% 4/29/2038 12.13 LEHMAN BROS HLDG 7.35% 5/6/2038 10.84 LEHMAN BROS HLDG 7.73% 10/15/2023 12.88 LEHMAN BROS HLDG 7.88% 8/15/2010 15.25 LEHMAN BROS HLDG 8.00% 3/5/2022 8.25 LEHMAN BROS HLDG 8.00% 3/17/2023 13.15 LEHMAN BROS HLDG 8.05% 1/15/2019 11.50 LEHMAN BROS HLDG 8.40% 2/22/2023 14.00 LEHMAN BROS HLDG 8.50% 8/1/2015 14.50 LEHMAN BROS HLDG 8.50% 6/15/2022 8.00 LEHMAN BROS HLDG 8.75% 12/21/2021 11.00 LEHMAN BROS HLDG 8.75% 2/6/2023 12.00 LEHMAN BROS HLDG 8.80% 3/1/2015 15.50 LEHMAN BROS HLDG 8.92% 2/16/2017 12.34 LEHMAN BROS HLDG 9.00% 12/28/2022 11.00 LEHMAN BROS HLDG 9.50% 12/28/2022 12.98 LEHMAN BROS HLDG 9.50% 1/30/2023 13.50 LEHMAN BROS HLDG 9.50% 2/27/2023 12.75 LEHMAN BROS HLDG 10.00% 3/13/2023 13.50 LEHMAN BROS HLDG 11.00% 10/25/2017 10.05 LEHMAN BROS HLDG 11.00% 6/22/2022 11.02 LEHMAN BROS HLDG 11.50% 9/26/2022 13.38 LTX-CREDENCE 3.50% 5/15/2011 48.42 MAJESTIC STAR 9.50% 10/15/2010 53.00 MAJESTIC STAR 9.75% 1/15/2011 6.84 MERISANT CO 9.50% 7/15/2013 22.04 MERRILL LYNCH #N/A N.A% 3/9/2011 95.10 MILLENNIUM AMER 7.63% 11/15/2026 6.00 MORRIS PUBLISH 7.00% 8/1/2013 28.00 NEWARK GROUP INC 9.75% 3/15/2014 20.06 NEWPAGE CORP 12.00% 5/1/2013 47.83 NORTH ATL TRADNG 9.25% 3/1/2012 38.55 NTK HOLDINGS INC 10.75% 3/1/2014 2.56 OSCIENT PHARM 12.50% 1/15/2011 3.00 PALM HARBOR 3.25% 5/15/2024 45.00 PANOLAM INDUSTRI 10.75% 10/1/2013 27.00 PLY GEM INDS 9.00% 2/15/2012 57.00 QUALITY DISTRIBU 9.00% 11/15/2010 52.10 QUANTUM CORP 4.38% 8/1/2010 61.00 RADIO ONE INC 6.38% 2/15/2013 35.00 RADIO ONE INC 8.88% 7/1/2011 46.75 RAFAELLA APPAREL 11.25% 6/15/2011 26.75 RAIT FINANCIAL 6.88% 4/15/2027 40.00 READER'S DIGEST 9.00% 2/15/2017 2.75 RESIDENTIAL CAP 8.38% 6/30/2010 77.00 RH DONNELLEY 6.88% 1/15/2013 4.25 RH DONNELLEY 6.88% 1/15/2013 5.95 RH DONNELLEY 6.88% 1/15/2013 7.98 RH DONNELLEY 8.88% 1/15/2016 5.00 RH DONNELLEY 8.88% 10/15/2017 5.50 ROTECH HEALTHCA 9.50% 4/1/2012 30.50 SIX FLAGS INC 9.63% 6/1/2014 26.25 SIX FLAGS INC 9.75% 4/15/2013 24.00 SPACEHAB INC 5.50% 10/15/2010 45.25 SPHERIS INC 11.00% 12/15/2012 52.00 STATION CASINOS 6.00% 4/1/2012 26.75 STATION CASINOS 6.50% 2/1/2014 4.50 STATION CASINOS 6.63% 3/15/2018 2.94 STATION CASINOS 6.88% 3/1/2016 3.50 TEKNI-PLEX INC 12.75% 6/15/2010 80.00 THORNBURG MTG 8.00% 5/15/2013 4.00 TIMES MIRROR CO 6.61% 9/15/2027 2.00 TIMES MIRROR CO 7.25% 3/1/2013 5.50 TIMES MIRROR CO 7.25% 11/15/2096 8.25 TIMES MIRROR CO 7.50% 7/1/2023 4.00 TOUSA INC 7.50% 1/15/2015 0.13 TOUSA INC 9.00% 7/1/2010 11.13 TOUSA INC 9.00% 7/1/2010 10.00 TRANSMERIDIAN EX 12.00% 12/15/2010 18.00 TRIBUNE CO 4.88% 8/15/2010 6.05 TRIBUNE CO 5.25% 8/15/2015 6.00 TRIBUNE CO 5.67% 12/8/2008 5.63 TRONOX WORLDWIDE 9.50% 12/1/2012 47.13 TRUE TEMPER 8.38% 9/15/2011 1.00 TRUMP ENTERTNMNT 8.50% 6/1/2015 9.90 TXU CORP 4.80% 11/15/2009 90.00 USFREIGHTWAYS 8.50% 4/15/2010 62.75 VERASUN ENERGY 9.38% 6/1/2017 14.13 VERENIUM CORP 5.50% 4/1/2027 44.06 VESTA INSUR GRP 8.75% 7/15/2025 0.73 VION PHARM INC 7.75% 2/15/2012 25.51 VISTEON CORP 7.00% 3/10/2014 21.75 WASH MUT BANK FA 5.65% 8/15/2014 0.25 WASH MUT BANK NV 5.55% 6/16/2010 31.00 WASH MUTUAL INC 4.20% 1/15/2010 87.55 WASH MUTUAL INC 8.25% 4/1/2010 69.60 WCI COMMUNITIES 4.00% 8/5/2023 1.56 WCI COMMUNITIES 6.63% 3/15/2015 4.00 WCI COMMUNITIES 7.88% 10/1/2013 1.00 WCI COMMUNITIES 9.13% 5/1/2012 1.00 WII COMPONENTS 10.00% 2/15/2012 45.00 WILLIAM LYONS 7.63% 12/15/2012 48.75 YELLOW CORP 5.00% 8/8/2023 29.00 YELLOW CORP 5.00% 8/8/2023 49.63 YOUNG BROADCSTNG 8.75% 1/15/2014 0.38 ********* 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. Howard C. Tolentino, 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 **