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/raid1/www/Hosts/bankrupt/TCR_Public/091020.mbx T R O U B L E D C O M P A N Y R E P O R T E R Tuesday, October 20, 2009, Vol. 13, No. 290 Headlines ABITIBIBOWATER INC: Agrees With Boralex on Dolbeau Operations ABITIBIBOWATER INC: Gets C$33MM 'Black Liquor' Credit From Canada ABITIBIBOWATER INC: Resumed Mackenzie Operations on Oct. 13 ACCURIDE CORP: Projects $52MM Loss in '09, $28.2MM Profit in '10 ALLIS-CHALMERS: RBC Lenders Relax Investment, Sale Provisions AMC ENTERTAINMENT: Fitch Affirms Issuer Default Ratings at 'B' AMERICAN BUSINESS: Distributions to Noteholders by Year's End AMR CORP: Resumes Talks with Japan Airlines AMR CORP: FAA Probes American Airlines on Substandard Jets ANDERSON HOMES: Disclosure Statement Hearing on October 29 ANGIOTECH PHARMACEUTICALS: To Restate Statements of Operations ARIES MARITIME: Rocket Marine Gets 2.66MM Shares From Grandunion ASSET RESOLUTION: Files Chapter 11 Over Investor Disputes ATC HEALTHCARE: Hoberman Miller Replaces Weiser as Accountants AVENTINE RENEWABLE: Pres. & CEO Resigns; Interim CFO Assumes Role BANK OF AMERICA: Outgoing CEO Agrees to Give Up 2009 Salary BANK OF AMERICA: Suffers $1-Bil. Loss in Q3; 2nd Qrtly Loss in '09 BEARINGPOINT INC: Court Extends Plan Filing Deadline to Oct. 27 BERNARD MADOFF: Montauk Retreat Closes for $9.41 Million BERNARD MADOFF: Trustee, SIPC Outline Legal Theory for Claims BERNARD MADOFF: 3 Victims Appeal Dismissal of Trustee Suit BOISE PAPER: Moody's Assigns 'B3' Rating on $300 Mil. Senior Notes BOISE PAPER: S&P Assigns 'BB-' Rating on $300 Mil. Senior Notes CALPINE CORP: Boosts Senior Note Offering to $1.2BB CASCADIA PROJECT: Files for Ch 11 Bankr. to Dodge Foreclosure CENTRO NP: Extends Consent Solicitation to October 27 CHAMPION ENTERPRISES: Anestis Leaves Board to Work on Transaction CHAMPION ENTERPRISES: Lenders to Forbear Until October 30 CHARTER COMMS: Agrees to Broadcast Lions Games on Channel 11 CHARTER COMMS: Omnibus Motion to Assume Real Property Leases CHEMTURA CORP: Gets Nod to Hire A&L Goodbody as Irish Counsel CHEMTURA CORP: Gets Nod to Hire D&P as Valuation Experts CHEMTURA CORP: Exclusive Periods Extension Sought CHEMTURA CORP: Wins Nod for Deal with Sprague Energy CHRYSLER LLC: No Direct Circuit Court Appeal for Jilted Dealers CIRCUIT CITY: Comptroller Wants Interest on "Oversecured Claim" CIRCUIT CITY: Hain Capital Group Buys Claims CIRCUIT CITY: Proposes Jan. 5 Deadline to Remove Actions CIT GROUP: Icahn Offers $6-Bil. Loan, Criticizes Board & Plan CMR MORTGAGE: Wants Obtain $6 Million DIP Financing From Investors CONSECO INC: Fitch Assigns 'B-/RR6' Rating on Senior Debt Issue COYOTES HOCKEY: Glendale Spent $2.1MM on Outside Consultants COYOTES HOCKEY: Hearing on Team Sale Set for October 26 CROCS INC: PNC Loan Amendment Decreases Net Worth Requirement DEL MONTE: Tender Offer for 8-5/8% Notes Closes DELTA AIR LINES: Resumes Talks with Japan Airlines DOLLAR THRIFTY: Expects 12% Drop in Q3 Vehicle Rental Revenues DRYSHIPS INC: Appoints Ziad Nakhleh as Chief Financial Officer DRYSHIPS INC: To Release Quarterly Results on October 26 ELECTROGLAS INC: Access to DIP Financing Expires October 30 EPIX PHARMACEUTICALS: FDA Approves Physician-Sponsored IND ERICKSON RETIREMENT: Files for Ch 11; Redwood Agrees to Buy Assets ESCADA AG: Insolvency Court Appoints Creditors' Committee ESCADA AG: More Than 10 Investors Express Interest for Assets ESCADA AG: US Unit's Schedules of Assets & Liabilities ESCADA AG: US Unit's Statement of Financial Affairs FAIRCHILD CORP: To Liquidate Assets Under Chapter 11 Plan FAIRPOINT COMMS: Verizon May Urge Windstream to Buy Assets FAIRPOINT COMMS: Lawmakers to Meet to Discuss Woes FATBURGER RESTAURANTS: To File Reorganization Plans in November FEDERAL-MOGUL: To Hold 3Q Financial Results Call on October 29 FEDERAL-MOGUL: Wins Shield Patent Dispute With Lydall FILENE'S BASEMENT: Can File Chapter 11 Plan Until November 30 FIRSTFED FINANCIAL: Extends Tender Offer Deadlines to November 6 FIRSTFED FINANCIAL: Home-Loan Modifications Pass $1.4 Billion FONTAINEBLEAU LV: Jeffrey Truitt Appointed as Examiner FORUM HEALTH: Wants Charles Neumann as Interim CEO FLYING J: Calpine Rival Prevails in $9.7M Flying J Credit Sale FREEDOM COMMS: Bonus Program Approved by Bankruptcy Court HIDEAWAY MARINA: Files Chapter 11 in Fort Lauderdale GENERAL MOTORS: Executes Pact Relating to GM Nova Scotia Notes GEORGIA GULF: Fidelity and Marathon Disclose Equity Stake GLOBAL MOTORSPORT: Court Sets Oct. 23 Disclosure Statement Hearing GOLDEN EAGLE: Board Adopt New Equity Compensation Plan GOLDEN EAGLE: Mining Firm Offers $10 Mil. for Gold Bar Mill GPS INDUSTRIES: Assets Sold; Biz. Merged with ProLink GRAMERCY CAPITAL: Settles Exchange of $97.5MM Jr. Sub. Notes GREDE FOUNDRIES: Court Sets November 30 as Claims Bar Date GREEKTOWN HOLDINGS: Creditors Accept Mgt. Plan, Reject Luna Plan GREEKTOWN HOLDINGS: Detroit Wants Changes to Luna Plan GREEKTOWN HOLDINGS: Luna Plan Faces Objection From Mgt., UAW GREEKTOWN HOLDINGS: Luna/Plainfield Want Mgt. Plan Rejected GREENSHIFT CORP: Files Infringement Suit Against Westfalia GRUBB & ELLIS: Kojaian Discloses 24.6% Equity Stake HARRAH'S OPERATING: S&P Downgrades Rating on $9.25 Bil. Facilities HARVEST OIL: Plan Confirmation Hearing to Begin Nov. 9 HEIDTMAN MINING: Court Extends Exclusive Plan Filing to January 10 HIDEAWAY MARINA: Files for Chapter 11 Bankruptcy Protection IL LUGANO: Wants to Sell Condominium Unit No. 1206 for $506,000 INDALEX HOLDINGS: Court Approves Committee's Bid to Convert Case INVESTCORP BANK: Fitch Affirms Issuer Default Rating at 'BB+' JACO ELECTRONICS: To Delist and Deregister Shares From Nasdaq JFK AERO: Moody's Confirms 'Ba2' Ratings on Revenue Bonds KEARNEY CONSTRUCTION: Accused of Polluting, Richard E. Jacobs Says LANG HOLDINGS: May Let Go of Space in Jason Steiner's Building LEHMAN BROTHERS: Examiner Wants to Compel ABN to Produce Documents LEHMAN BROTHERS: AmEx Gets $3.9MM From Barclays as Part of Deal LEHMAN BROTHERS: Gets Nod to Hire Contract Attorneys Provider LEHMAN BROTHERS: TSFC Wants Prompt Decision on Reserve Fund Deals LEHMAN BROTHERS: Wins Nod for Protocol on Transfer Loans to SPEs LEHMAN BROTHERS: Bankruptcy Fees Cross $400 Million Mark LEHMAN BROTHERS: Says Negotiators Knew Barclays Got $5BB Discount LEVEL 3: Closes Offering and Sale of $275MM of 7% Senior Notes LYONDELL CHEMICAL: Shaw Entities File Disc. Statement Objections LYONDELL CHEMICAL: To Close Carrington LDPE Plant in U.K. LYONDELL CHEMICAL: U.S. Govt. Object to 502 Claims Disallowance MAGNA ENTERTAINMENT: Global Gaming Plans to Upgrade Remington Park MAGNA ENTERTAINMENT: Lone Star Park Headed for Second Auction MAINLINE CONTRACTING: Must File Plan of Reorganization by Jan. 13 MDC PARTNERS: Moody's Assigns Corporate Family Rating at 'B1' MGIC INVESTMENT: Posts $517.8-Mil. Net Loss in Third Qtr. 2009 MICROMET INC: May Issue $150 Million in Securities MIDWAY GAMES: Completes Sale of Certain Assets to SouthPeak MILLER BROTHERS: Lays Off 85 Workers at Three Mine Sites MOHEGAN TRIBAL: Moody's Assigns 'B1' Rating on $200 Mil. Notes MURRAY ENERGY: Moody's Assigns Corporate Family Rating at 'Caa1' MURRAY ENERGY: S&P Assigns Corporate Credit Rating at 'B' NORTEL NETWORKS: Committee Wants Ciena Deal Improved NORTEL NETWORKS: November 13 Auction for Ethernet Networks Biz. NORTEL NETWORKS: Seeks Canada Court Nod to Auction GSM Business NORTEL NETWORKS: Signs Deal With PBGC on Enterprise Biz Sale NORTEL NETWORKS: Terms of Stipulation With IRS on Tax Claim NOVADEL PHARMA: Discloses Results of 2009 Stockholders' Meeting NEXSTAR BROADCASTING: BofA Lenders Amend Financial Covenants OCTAVIAR LIMITED: Liquidators Secure AU$125 Million Cash PALMDALE HILLS: Heavy Rains Worry SunCal on Hazards at Oak Project PARTICLE DRILLING: Exits Chapter 11 Bankruptcy Protection PEANUT CORP: Simon & Luke Urges Salmonella Victims to Sue PHILADELPHIA NEWSPAPERS: Plan Exclusivity Until December 4 PHOENIX FOOTWEAR: Sees $310,000 Net Profit for October 3 Quarter PHOENIX FOOTWEAR: Wells Fargo Loan Amended, Forbearance Extended PIKE NURSERIES: Court OKs $3MM Settlement with Roark Capital PILGRIM'S PRIDE: FWISD Objects to Valorem Tax Terms of Plan PILGRIM'S PRIDE: Kornitzer No Longer Serving on Creditors Panel PILGRIM'S PRIDE: Parties File Disclosure Statement Objections PREBUL AUTO: Civil Disputes Won't Be Transferred to State Court PRIMARY ENERGY: S&P Assigns 'BB+' Rating on $105 Mil. Senior Loan PROLIANCE INT'L: Wants Sole Rights for Plan Filing Until January READER'S DIGEST: Proposes Bertelsmann Outsourcing Pacts READER'S DIGEST: Proposes to Reject 2 Executory Contracts READER'S DIGEST: To Sell Assets Under $500,000 in Ordinary Course REFCO INC: RCM Trustee Gets Nod to Abandon Chase Securities REFCO INC: Refco Inc Post-Confirmation 3rd Quarter Report REFCO INC: Refco LLC 7 Trustee Says Fee Application Premature REGAL ENTERTAINMENT: Fitch Affirms Issuer Default Rating at 'B+' REPUBLIC STORAGE: Court Confirms Plan of Liquidation S&K FAMOUS: Unsecured Creditors to Recover 6% Under Plan SCO GROUP: Announces Strategic Plan and Management Change SEITEL INC: Appoints Marcia H. Kendrick as CFO and Executive VP SEMGROUP LP: Chaparral Energy Wants Prompt Decision on Contract SEMGROUP LP: Koch Entities Want Prompt Decision on Contract SEMGROUP LP: Producers Committee Taps McKool Smith as Co-Counsel SEMGROUP LP: Wins Nod to Amend Agreements With McCoy Petroleum SERVICE CORPORATION: Keystone Deal Won't Affect Moody's Ba3 Rating SOVRAN SELF: Fitch Upgrades Issuer Default Rating From 'BB+' SEVEN FALLS: Foreclosure Sale Proceeds After 3 Postonements SKYWI: Files for Chapter 7 Bankruptcy Protection SONIC MEDICAL: Files Chapter 11 on Long Island SOUTH MARSH: Files Chapter 11 in Pensacola, Florida SPANSION INC: Auditor OKs $360,874 for McKenzie for March-May SPANSION INC: Gilles Delfassy to Step Down as Director SPORTSCLICK INC: Deal to Buy Green Swan Terminated STALLION OILFIELD: Gets Support for Plan, Files for Chapter 11 STALLION OILFIELD: Case Summary & 30 Largest Unsecured Creditors STATION CASINOS: Gets Final Nod for $150 Mil. of DIP Financing STATION CASINOS: Sec. 341 Meeting Adjourned to November 9 STATION CASINOS: U.S. Trustee Opposes Employee Pay Beyond Cap STERLING MINING: Supplemental Financing OK'd; Objections Overruled S-TRAN HOLDINGS: Wants Continues Access to ACFS Cash Collateral SUN-TIMES MEDIA: Jim Tyree Discloses New Owners, Management Team TAVERN ON THE GREEN: Can Remain Open in Christmas Through New Yr. TLC VISION: Responds to FDA Warning Letters to LASIK Facilities TOUSA INC: Creditors Restart Suit against Technical Olympic TRICO MARINE: S&P Assigns Corporate Credit Rating at 'CCC' TRINITY CHRISTIAN SCHOOL: Files in Chapter 11 in West Virginia TRIPLE CROWN: Cancels Unsold Shares Issuable Under Incentive Plans TROPICANA ENT: Adamar of NJ Proposes Claims Objection Protocol TROPICANA ENT: NJ Debtors Propose Revised Deal to Sell Assets TROPICANA ENT: NJ Debtors Propose Lift Stay for Insurance Payment UAL CORP: May Be Fined $3.8 Mil. for Maintenance Violations UAL CORP: Settles With Los Angeles on Revenue Bonds UAL CORP: Will Release Third Quarter 2009 Results Today VELOCITY EXPRESS: Wants to Hire PWC as Financial Advisor VIRGIN MEDIA: Seeks Amendments to Senior Facilities Agreement VITESSE SEMICONDUCTOR: Lender Talks Go On; Forbearance Extended VITESSE SEMICONDUCTOR: Reinstates Execs' Annual Base Salaries WATERFORD GAMING: $200 Mil. Note Issues Won't Move Moody's Rating WCI COMMUNITIES: Court OKs Sale of Singer Island Resort to Urgo WL Homes: Hit with WARN Class Action by Ex-Worker WOLVERINE TUBE: Alpine Offers to Sell Stake to Plainfield, Alkest WORKSTREAM INC: Expects to Close Noteholder Deal by November 30 WORKSTREAM INC: Posts 359,882 Loss in Fiscal Qtr. Ended Aug. 31 W.R. GRACE: R. Finke Proffers Statements on PD Claim Treatment W.R. GRACE: No Objections to Sale of 5% ART to Chevron W.R. GRACE: Submits Second Set of Plan Modifications X-RITE INC: Appoints Rajesh Shah as Chief Financial Officer * Court Says Champerty Can't Curb Debt Buyers' Rights * Consumer Confidence Falls, Lower Than All Predictions * Default Rates Raise Questions on Gov't. Role in Mortgage Lending * Florida Bankruptcy Filings Up 48% in First Nine Months * Home Foreclosures, Consumer Prices Rise; Rents Decline * Mitsubishi to Offer $700-Mil. DIP Loans to U.S. Firms * Credit Solutions Settles NY Client's $10K Debt for $4K * Judge Prudence Carter Beatty to Retire at Year's End * Large Companies With Insolvent Balance Sheets ********* ABITIBIBOWATER INC: Agrees With Boralex on Dolbeau Operations ------------------------------------------------------------- AbitibiBowater, Inc., and Boralex Power Income Fund entered into an agreement in principle on October 2, 2009, in relation to the temporary operation of the Dolbeau power station. The Dolbeau power station was closed in June 2009 "due to a lack of wood- residue supplied mainly by AbitibiBowater," according to the Canadian Press. Under the Agreement, the Fund would operate its cogeneration plant at Dolbeau-Mistassini from November 15, 2009, to April 15, 2010, and during that period it would produce electricity and the steam required to heat the Abitibi paper mill. In exchange for the steam, Abitibi would provide 75,000 dry tons of wood residue to the Fund for the duration of the Agreement. The accord is also conditional upon the agreement of controller of Abitibi's C-36 and on certain closing conditions. Boralex Power Income Fund is an unincorporated open-ended trust that indirectly owns ten power generating stations located in the province of Quebec and in the United States producing energy from different sources including wood-residue or natural gas thermal and cogenerating facilities as well as hydroelectric power stations. In total, these power stations have an installed capacity of 190 MW. Abitibi cancelled eight service, maintenance and supply contracts with Boralex in September 2009, which led to a strain in their relations. AbitibiBowater reasoned out that the cancellation of the Contracts were part of its restructuring efforts, the Canadian Press added. About AbitibiBowater Inc. Headquartered in Montreal, Canada, AbitibiBowater Inc. -- http://www.abitibibowater.com/-- produces a wide range of newsprint, commercial printing papers, market pulp and wood products. It is the eighth largest publicly traded pulp and paper manufacturer in the world. AbitibiBowater owns or operates 23 pulp and paper facilities and 29 wood products facilities located in the United States, Canada, the United Kingdom and South Korea. Marketing its products in more than 90 countries, the Company is also among the world's largest recyclers of old newspapers and magazines, and has third-party certified 100% of its managed woodlands to sustainable forest management standards. AbitibiBowater's shares trade over-the-counter on the Pink Sheets and on the OTC Bulletin Board under the stock symbol ABWTQ. The Company and several of its affiliates filed for protection under Chapter 11 of the U.S. Bankruptcy Code on April 16, 2009 (Bankr. D. Del. Lead Case No. 09-11296). Judge Kevin J. Carey presides over the case. The Company and its Canadian affiliates commenced parallel restructuring proceedings under the Companies' Creditors Arrangement Act before the Quebec Superior Court Commercial Division the next day. Alex F. Morrison at Ernst & Young, Inc., was appointed CCAA monitor. Paul, Weiss, Rifkind, Wharton & Garrison LLP, serves as the Debtors' U.S. bankruptcy counsel. Stikeman Elliot LLP, acts as the Debtors' CCAA counsel. Young, Conaway, Stargatt & Taylor, in Wilmington, Delaware, serves as the Debtors' co-counsel, while Troutman Sanders LLP in New York, serves as the Debtors' conflicts counsel in the Chapter 11 proceedings. The Debtors' financial advisors are Advisory Services LP, and their noticing and claims agent is Epiq Bankruptcy Solutions LLC. The CCAA Monitor's counsel is Thornton, Grout & Finnigan LLP, in Toronto, Ontario. Abitibi-Consolidated Inc. and various Canadian subsidiaries filed for protection under Chapter 15 of the U.S. Bankruptcy Code on April 17, 2009 (Bankr. D. Del. 09-11348). Judge Carey also handles the Chapter 15 case. Pauline K. Morgan, Esq., and Sean T. Greecher, Esq., at Young, Conaway, Stargatt & Taylor, in Wilmington, represent the Chapter 15 Debtors. As of Sept. 30, 2008, the Company had $9,937,000,000 in total assets and $8,783,000,000 in total debts. Bankruptcy Creditors' Service, Inc., publishes AbitibiBowater Bankruptcy News. The newsletter provides gavel-to-gavel coverage of the Chapter 11 proceedings and parallel proceedings under the Companies' Creditors Arrangement Act in Canada undertaken by Abitibibowater Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). ABITIBIBOWATER INC: Gets C$33MM 'Black Liquor' Credit From Canada ----------------------------------------------------------------- AbitibiBowater has qualified for "black liquor" credits in the amount of C$33,213,351 under Natural Resources Canada's Pulp and Paper Green Transformation Program, through the Company's black liquor-producing mills in Fort Frances and Thunder Bay, Duane Hicks of Fort Frances Times Online reported. "The Government of Canada is taking unprecedented steps by investing C$1 billion in a program that will build a brighter and more sustainable future for Canada's forest communities," said the Honourable Stockwell Day, Minister of International Trade, on behalf of the Honourable Lisa Raitt, Minister of Natural Resources, in an official statement. "The Pulp and Paper Green Transformation Program will generate new investments in pulp and paper facilities across Canada, making it greener and more sustainable," Minister Day added. Black liquor is a byproduct of the "kraft process," which is one of the processes used by pulp mills during the production of paper pulp. Jean-Phillipe Cote, director of Public Affairs and Government Relations at AbitibiBowater, specified that the recorded "black liquor" production from AbitibiBowater's mills in Fort Frances and Thunder Bay had total assessed credits valued at C$33,213,351. He said that the credits "can be used for any environmentally-beneficial, energy-related project at any of our mills in Canada," besides Fort Frances or Thunder Bay. "It's an important component for us, you can imagine," Mr. Cote told FFTimes.com, adding that the Program is "a good example of federal support for our industry in the currently challenging times." AbitibiBowater was among the 24 companies, representing 38 pulp and paper mills, across Canada that qualified for the Green Transformation Program. The 24 companies that qualified for the Program, including AbitibiBowater, will now have access to funding to invest in capital projects that improve their environmental performance through increased renewable energy production or improved energy efficiency, according to Minister Day. The firms are expected to begin receiving funding for projects in late 2009 or early 2010, but will have to submit project proposals for their facilities subject to assessment by the Canadian federal government. Firms will have until March 31, 2012, to draw on the funding to finance approved capital projects that offer demonstrable environmental benefits. "At this stage, it is too premature to speculate on what projects specifically we'll work on, or where, or how," Mr. Cote disclosed, noting that the Company is "considering various options." About AbitibiBowater Inc. Headquartered in Montreal, Canada, AbitibiBowater Inc. -- http://www.abitibibowater.com/-- produces a wide range of newsprint, commercial printing papers, market pulp and wood products. It is the eighth largest publicly traded pulp and paper manufacturer in the world. AbitibiBowater owns or operates 23 pulp and paper facilities and 29 wood products facilities located in the United States, Canada, the United Kingdom and South Korea. Marketing its products in more than 90 countries, the Company is also among the world's largest recyclers of old newspapers and magazines, and has third-party certified 100% of its managed woodlands to sustainable forest management standards. AbitibiBowater's shares trade over-the-counter on the Pink Sheets and on the OTC Bulletin Board under the stock symbol ABWTQ. The Company and several of its affiliates filed for protection under Chapter 11 of the U.S. Bankruptcy Code on April 16, 2009 (Bankr. D. Del. Lead Case No. 09-11296). Judge Kevin J. Carey presides over the case. The Company and its Canadian affiliates commenced parallel restructuring proceedings under the Companies' Creditors Arrangement Act before the Quebec Superior Court Commercial Division the next day. Alex F. Morrison at Ernst & Young, Inc., was appointed CCAA monitor. Paul, Weiss, Rifkind, Wharton & Garrison LLP, serves as the Debtors' U.S. bankruptcy counsel. Stikeman Elliot LLP, acts as the Debtors' CCAA counsel. Young, Conaway, Stargatt & Taylor, in Wilmington, Delaware, serves as the Debtors' co-counsel, while Troutman Sanders LLP in New York, serves as the Debtors' conflicts counsel in the Chapter 11 proceedings. The Debtors' financial advisors are Advisory Services LP, and their noticing and claims agent is Epiq Bankruptcy Solutions LLC. The CCAA Monitor's counsel is Thornton, Grout & Finnigan LLP, in Toronto, Ontario. Abitibi-Consolidated Inc. and various Canadian subsidiaries filed for protection under Chapter 15 of the U.S. Bankruptcy Code on April 17, 2009 (Bankr. D. Del. 09-11348). Judge Carey also handles the Chapter 15 case. Pauline K. Morgan, Esq., and Sean T. Greecher, Esq., at Young, Conaway, Stargatt & Taylor, in Wilmington, represent the Chapter 15 Debtors. As of Sept. 30, 2008, the Company had $9,937,000,000 in total assets and $8,783,000,000 in total debts. Bankruptcy Creditors' Service, Inc., publishes AbitibiBowater Bankruptcy News. The newsletter provides gavel-to-gavel coverage of the Chapter 11 proceedings and parallel proceedings under the Companies' Creditors Arrangement Act in Canada undertaken by Abitibibowater Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). ABITIBIBOWATER INC: Resumed Mackenzie Operations on Oct. 13 ----------------------------------------------------------- AbitibiBowater, Inc., was slated to resume operations at its Mackenzie lumber mill on October 13, 2009, following an accord between the Company and the United Steelworkers Union, Arthur Williams of Prince George Free Press reported. The Company closed down the Mackenzie Mill in January 2008, the report noted. The resumption of its operations will take 60 to 70 people back to work, according to United Steelworkers Local 1- 424 President Frank Everitt. "We're hopeful it's for the long term. It certainly breathes some employment into Mackenzie," Mr. Everitt told the Prince George Free Press. Mr. Everitt specified that the planer mill will restart on October 13 with 100 days of work, while the sawmill will resume operations on October 19 for a 70-day work schedule. About AbitibiBowater Inc. Headquartered in Montreal, Canada, AbitibiBowater Inc. -- http://www.abitibibowater.com/-- produces a wide range of newsprint, commercial printing papers, market pulp and wood products. It is the eighth largest publicly traded pulp and paper manufacturer in the world. AbitibiBowater owns or operates 23 pulp and paper facilities and 29 wood products facilities located in the United States, Canada, the United Kingdom and South Korea. Marketing its products in more than 90 countries, the Company is also among the world's largest recyclers of old newspapers and magazines, and has third-party certified 100% of its managed woodlands to sustainable forest management standards. AbitibiBowater's shares trade over-the-counter on the Pink Sheets and on the OTC Bulletin Board under the stock symbol ABWTQ. The Company and several of its affiliates filed for protection under Chapter 11 of the U.S. Bankruptcy Code on April 16, 2009 (Bankr. D. Del. Lead Case No. 09-11296). Judge Kevin J. Carey presides over the case. The Company and its Canadian affiliates commenced parallel restructuring proceedings under the Companies' Creditors Arrangement Act before the Quebec Superior Court Commercial Division the next day. Alex F. Morrison at Ernst & Young, Inc., was appointed CCAA monitor. Paul, Weiss, Rifkind, Wharton & Garrison LLP, serves as the Debtors' U.S. bankruptcy counsel. Stikeman Elliot LLP, acts as the Debtors' CCAA counsel. Young, Conaway, Stargatt & Taylor, in Wilmington, Delaware, serves as the Debtors' co-counsel, while Troutman Sanders LLP in New York, serves as the Debtors' conflicts counsel in the Chapter 11 proceedings. The Debtors' financial advisors are Advisory Services LP, and their noticing and claims agent is Epiq Bankruptcy Solutions LLC. The CCAA Monitor's counsel is Thornton, Grout & Finnigan LLP, in Toronto, Ontario. Abitibi-Consolidated Inc. and various Canadian subsidiaries filed for protection under Chapter 15 of the U.S. Bankruptcy Code on April 17, 2009 (Bankr. D. Del. 09-11348). Judge Carey also handles the Chapter 15 case. Pauline K. Morgan, Esq., and Sean T. Greecher, Esq., at Young, Conaway, Stargatt & Taylor, in Wilmington, represent the Chapter 15 Debtors. As of Sept. 30, 2008, the Company had $9,937,000,000 in total assets and $8,783,000,000 in total debts. Bankruptcy Creditors' Service, Inc., publishes AbitibiBowater Bankruptcy News. The newsletter provides gavel-to-gavel coverage of the Chapter 11 proceedings and parallel proceedings under the Companies' Creditors Arrangement Act in Canada undertaken by Abitibibowater Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). ACCURIDE CORP: Projects $52MM Loss in '09, $28.2MM Profit in '10 ---------------------------------------------------------------- Accuride Corporation disclosed in a filing with the Securities and Exchange Commission its projections to its future financial performance, in connection with the negotiation of the Company's pre-negotiated restructuring plan. Accuride gave these projections to noteholders: (in millions) Operating Adjusted Capital Year Revenue Profit EBIDTA Expenditure ---- ------- ------ ------ ----------- 2009 $575.8 ($52.0) $21.5 $19.8 2010 768.8 28.2 79.6 17.0 2011 1,022.7 99.4 152.3 30.6 2012 1,246.9 145.2 200.9 36.0 2013 1,456.1 181.0 36.0 36.0 A full-text copy of the summary of the projection is available for free at http://ResearchArchives.com/t/s?4711 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). The Debtors have selected Latham & Watkins LLP as counsel; Young Conaway Stargatt & Taylor, LLP as co-counsel; Goodmans LLP as Canadian Counsel; MorrisAnderson as financial advisor; and The Garden City Group Inc. as claims agent. 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. ALLIS-CHALMERS: RBC Lenders Relax Investment, Sale Provisions ------------------------------------------------------------- Allis-Chalmers Energy Inc. and certain of its subsidiaries on October 13, 2009, entered into a Fifth Amendment to its existing Second Amended and Restated Credit Agreement dated as of April 26, 2007, with Royal Bank of Canada, as administrative agent and collateral agent, and the lenders party thereto. The Fifth Amendment, among other things, permits the Company to invest up to $30 million in the aggregate in foreign subsidiaries and foreign joint ventures, of which no more than $5,000,000 shall be cash and the remainder of which will be equipment and inventory. In addition, certain provisions were amended to allow the Company to dispose of equipment and inventory by (i) transferring equipment and inventory to foreign subsidiaries and foreign joint ventures or (ii) entering into lease agreements with foreign persons of equipment or inventory moved from the U.S. to a foreign jurisdiction, subject to the $30 million cap. Members of the lending consortium are: -- Royal Bank of Canada, as Administrative Agent and Collateral Agent; and as Lender and L/C Issuer; -- Caterpillar Financial Services Corporation, as Lender; -- JPMorgan Chase Bank, N.A. as a Lender; -- Wells Fargo Bank, N.A. as a Lender; -- Natixis, as a Lender; and -- Whitney National Bank, as a Lender A full-text copy of the Fifth Amendment to Second Amended and Restated Credit Agreement, dated as of October 13, 2009, by and among the Company, as borrower, certain subsidiaries of the Company, as guarantors, Royal Bank of Canada, as administrative agent, and the lenders named thereto, is available at no charge at http://ResearchArchives.com/t/s?471e About Allis-Chalmers Energy 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: Fitch Affirms Issuer Default Ratings at 'B' -------------------------------------------------------------- Fitch Ratings has taken these rating actions on AMC Entertainment Inc., Marquee Holdings Inc. (parent company), and AMC Entertainment Holdings, Inc. (parent of Marquee), and also revised certain issue level ratings to align with changes to Fitch's rating definitions: AMC -- Issuer Default Rating affirmed at 'B'; -- Senior secured credit facilities affirmed at 'BB/RR1'; -- Senior unsecured notes affirmed at 'B/RR4'; -- Senior subordinated notes revised to 'CCC/RR6'from 'CCC+/RR6'. Marquee -- IDR affirmed at 'B'; -- Senior discount notes revised to 'CC/RR6' from 'CCC/RR6'. AMC Holdco -- IDR affirmed at 'B'; -- Senior unsecured term loan revised to 'CC/RR6' from 'CCC/RR6'. Approximately $2.4 billion in total debt is affected. The Rating Outlook remains Stable. The ratings and Outlook reflect these key considerations: -- While net leverage of 6.5 times (x) (gross leverage of 8.5x) is high, Fitch expects this leverage to be at its peak and expects the company to reduce leverage over time. -- Fitch estimates that through the AMC Holdco, the company has approximately $550 million in cash, as of July 2, 2009. Fitch expects that this cash will be deployed for the purpose of reducing leverage by either 1) reducing debt levels (likely through continued debt repurchases) and/or 2) by making deleveraging/accretive acquisitions. There is no tolerance in the rating for a high-multiple acquisition or for dividends paid to the sponsors. -- Fitch expects that the movie exhibitor industry will continue to be challenged in growing attendance. Fitch expects that the 2010 film slate and the announced 2011 films will be able to draw sufficient attendance to maintain current levels or at least keep declines in the 1% to 2% range. Most importantly, the quality of films produced by the studios is largely out of the exhibitors' control. Assuming all things are equal, an attendance decline of 5% to 10% (similar to 2005) could lead to a negative rating action for AMC. Fitch estimates that due to the fixed cost structure nature of movie exhibitors, a 5% to 10% decline in attendance coupled with the inability to drive growth in concession per patron could result in EBITDA declines in excess of 20%, driving interest coverage below 1.5x. -- Fitch notes that concession revenues have remained relatively stable despite the weak economic conditions. While Fitch does not anticipate a significant decline in concession per patron, Fitch remains cautious that high margin concessions (which represent 28% of AMC's total revenues and carry 89% gross margins), may be vulnerable to reduced per-guest concession spending due to cyclical factors or a re- acceleration of commodity prices. -- Fitch expects that AMC's build-out of new theaters and renovation of existing theaters are mostly complete and that capital expenditures will begin to approach maintenance levels by 2011/2012 (Fitch estimates below $75 million), improving AMC's limited free cash flow generation. Fitch believes that the industry continues to operate beyond a point of saturation in large designated market area (DMA) markets. Fitch would likely view the purchase of modern theater assets, at attractive/delevering multiples, as a positive to a neutral credit event. However, there is little tolerance in the rating for continued capital deployment for the construction of new theaters in saturated markets. -- The ratings also reflect the current and prospective challenges facing the movie exhibitor industry, including increasing indirect competition from other distribution channels, such as DVD, video on demand or the Internet, as well as the shrinking release window and the concentrated base of film distributors. -- AMC's ratings are supported by the company's competitive positioning as the second-largest domestic movie exhibitor, with 307 theatres and 4,610 screens, with a leading market share in many of the largest DMAs and the highest average screen count per theatre of 15. Fitch believes that the movie exhibitor industry will continue to be a key component of a movie's release. As of the end of AMC's fiscal first quarter, revenues were up 5.5% with EBITDA up approximately 11%. Fitch expects revenues and EBITDA to be flat for the year. As of July 2, 2009, AMC has adequate liquidity which is supported by cash of $555 million (including approximately $80 million in cash at the AMC Holdco, estimated by Fitch) and $185 million in availability under its $200 million committed revolving credit facility (reduced by $14.2 million in letters of credit). The company's maturity schedule is manageable. AMC's first material maturity is its revolving credit facility, which comes due in 2012. AMC's term loan amortizes annually at $6.5 million and has a final maturity in January 2013. Free cash flow for July 2009 latest 12 months was a positive $55.4 million. As of July 2009, net leverage through AMC was 5.1x, net leverage through Marquee was 6.0x and net leverage through AMC Holdco was 6.5x. Fitch expects consolidated net leverage to decline over time, but to remain above 5.0x for the next few years. Fitch expects that AMC can address its near-term maturities with cash on hand and free cash flow and recognizes that there is refinancing risk in 2013 and beyond. This refinancing risk is incorporated into the rating. AMC's Recovery Ratings reflect Fitch's expectation that the enterprise value of the company, and hence, recovery rates for its creditors, will be maximized in a restructuring scenario (going- concern), rather than a liquidation. Fitch estimates an adjusted, distressed enterprise valuation of $1.2 billion using a 5x multiple and including a conservative estimate for AMC's 19% stake in National CineMedia, Inc. of approximately $110 million. The 'RR1' Recovery Rating for the company's secured bank facilities reflects Fitch's belief that 91%-100% expected recovery is reasonable. While Fitch does not assign Recovery Ratings for the company's operating lease obligations, it is assumed that the company rejects only 30% of its remaining $4.2 billion in operating lease commitments due to their significance to the operations in a going-concern scenario and is liable for 15% of those rejected values (at a net present value). The 'RR4' Recovery Ratings for AMC's senior unsecured notes (equal in ranking to the rejected operating leases) reflect an expectation of 31%-50% recovery. The 'CCC/RR6' rating for AMC's senior subordinated notes reflects the bonds structural seniority over Marquee's and AMC Holdco's debt ('CC/RR6') and Fitch's expectation for zero recovery. AMERICAN BUSINESS: Distributions to Noteholders by Year's End ------------------------------------------------------------- Holders of notes issued by American Business Financial Services Inc., haven't received distributions from proceeds of settlements with the bankrupt estate of ABFS but are expected to receive their pro rata share of the payoffs by the end of 2009. Jeff Blumenthal at Philadelphia Business Journal reports that more than $150 million has been collected in settlements with various entities connected to ABFS. The money received from the various court proceedings will be turned over to the two indenture trustees, Wells Fargo & Co. and Law Debenture Corp., Business Journal relates, citing George Miller, the bankruptcy trustee for ABFS. According to Business Journal, lawyer Todd Collins of plaintiffs class action law firm Berger & Montague said that after deducting lawyers fees and other expenses, he hopes to start distributing the settlement money to noteholders by year-end, adding that the process is complicated because noteholders must submit proofs of claims. 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. AMR CORP: Resumes Talks with Japan Airlines ------------------------------------------- Japan Airlines Corp. is likely to incur a group operating loss of around JPY200 billion in fiscal 2009, much bigger than earlier projected operating loss of 59 billion yen, Kyodo News reports. The news agency, citing sources close to the matter, says the latest forecast has been presented to JAL's main creditors by a task force of corporate turnaround experts recently launched by the government to evaluate the airline's assets. According to Kyodo, the sources said the swelling loss expected for the year through March 31 is due to increases in spending needed for downsizing JAL's corporate structure and workforce, in addition to sluggish revenues from its operations. Kyodo says JAL may also consider selling JAL Hotels Co., a subsidiary which runs about 60 hotels in Japan and abroad, and closing a total of 27 offices globally over the next two years. Talks with Delta, AMR Resumed Japan Airlines resumed talks with Delta Air Lines Inc. and AMR Corp.'s American Airlines over a possible capital alliance, Bloomberg News reports. Executives from the two U.S. carriers visited Tokyo in the last two weeks and may return this month, Bloomberg discloses citing three people familiar with the matter, who declined to be identified because the talks aren't public. According to Bloomberg, the carrier will also release a revised restructuring plan, drawn up with a state-appointed panel, by month's end. The Troubled Company Reporter-Asia Pacific reported on October 7, 2009, that Japan Airlines was planning to put on hold alliance talks held separately with Delta Air Lines and AMR Corp's American Airlines. JAL has decided to focus first on putting together a restructuring plan with the government task force that is overseeing the airline's revival. As reported by the TCR on Sept. 15, 2009, AMR Corp. and Delta Air are reportedly in separate talks with Japan Airlines to forge an expansive joint venture with the carrier. The Wall Street Journal said that American Airlines would also consider taking a minority stake in JAL, although any such investment would likely be capped at hundreds of millions of dollars. Delta is also negotiating to acquire a minority stake of around US$300 million in JAL. The Journal relates that Delta wants JAL to join its rival SkyTeam alliance. Restructuring Plan As reported in the TCR-Asia Pacific on Sept., 2009, Japan Today said that a team of government-appointed corporate turnaround experts was set up on September 25 to create a restructuring plan for struggling Japan Airlines. The move effectively gives JAL two more months to review options after transport minister Seiji Maehara questioned the feasibility of its original plan. The team, which will make a recommendation to the transport minister by late October or early November, will be led by Shinjiro Takagi, who served as chairman of the decision-making panel of the now-defunct Industrial Revitalization Corp. of Japan, the body which assisted heavily indebted but otherwise viable firms from 2003 to 2007. The team will take charge of due diligence on JAL's assets and will scrutinize its business improvement plan to offer advice for the future direction of the airline, according to Japan Today. About Japan Airlines Japan Airlines Corporation -- http://www.jal.co.jp/-- is a Japan- based holding company that is active in five business segments through its 225 subsidiaries and 82 associated companies. The Air Transportation segment is engaged in the operation of passenger and cargo planes. The Air Transportation-Related segment is engaged in the transportation of passengers and cargoes, the preparation of in-flight food catering, the maintenance of aircraft and land equipment, as well as the fueling business. The Travel Planning and Marketing segment is involved in the planning and sale of travel packages. The Card and Leasing segment is engaged in the provision of finance, cards and leasing services. The Others segment is involved in businesses related to hotels, resorts, logistics, wholesale, retail, real estate, printing, construction, manpower dispatch, as well as information and communication. The Company has numerous global operating locations. JAL International Co. Ltd. is a wholly owned operating subsidiary of Japan Airlines Corporation. * * * As reported in the Troubled Company Reporter-Asia Pacific on February 11, 2009, Moody's Investors Service changed the outlook on the Ba3 long-term debt rating and issuer rating of Japan Airlines International Co. Ltd. to negative from positive. The outlook change reflects Moody's view that JALI's profitability is likely to remain pressured amid the recent sharp decline in airline passenger demand. Japan Airlines continues to carry Standard & Poor's Ratings 'B+' LT Foreign & Local Issuer Credit. The outlook is positive. About AMR Corp 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. AMR CORP: FAA Probes American Airlines on Substandard Jets ---------------------------------------------------------- The Federal Aviation Administration is expanding its probe into suspected structural problems with rear bulkheads on a small portion of American Airlines' fleet of McDonnell Douglas MD-80 jets, Andy Pasztor at The Wall Street Journal reports, citing people familiar with the matter. According to The Journal, American Airlines operated jets later found to have substandard repairs. American Airlines earlier this year took more than a dozen planes out of passenger service, retiring several of them, after finding they had improper bulkhead repairs. The Journal relates that preliminary FAA findings found that as many as 16 American Airlines twin-engine MD-80s that were operated for months despite allegedly substandard bulkhead repairs. The Journal, citing people familiar with the matter, states that agency investigators are delving into whether other MD-80s also may have been flown for repairs at low altitudes without passengers. 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. ANDERSON HOMES: Disclosure Statement Hearing on October 29 ---------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of North Carolina has set a hearing for October 29, 2009, to consider the approval of the disclosure statement explaining Anderson Homes, Inc., et al.'s plan of reorganization dated September 11, 2009. Objections to the disclosure statement must be filed no later than October 20, 2009. According to the disclosure statement, the Plan contemplates that the best opportunity for creditors lies in (i) continued operation of the business, (ii) modification and restructuring of the existing secured debt, (iii) satisfaction of Convenience Claims (less than $5,000 in amount) by a single partial payment, and (iii) satisfaction of unsecured claims by a series of partial payments from future sales. The net revenues from ongoing business operations, draws on construction loans, and sales of lots and houses (including sales of properties which may result in credit-bids by the secured lenders) are expected to generate sufficient funds to fund the payment obligations under the Plan. The Debtors estimate that the aggregate amount of allowed unsecured claims under Class 13 is approximately $6.44 million. Class 13 is impaired under the Plan. The Plan provides for the creation of a "pot" of money in the aggregate amount of $1,500,000 for payment of such claims, pro rata, within 36 months after the Plan's Effective Date. Commencing with closings which occur after the Plan's Effective Date, $5,000 from each of the first 300 closings will be reserved from the Net Sale Proceeds, accumulated on a calendar-quarter basis and paid within 30 days after the end of each calendar quarter to the holders of Class 13 allowed Unsecured Claims. The existing equity interests in each of the Debtors under Class 14 will be extinguished, and the Reorganized Debtors will issue 100% of the new equity interests to Dave Servoss in consideration for the waiver and release of any prepetition unsecured claims which may be scheduled or asserted by Dave Servoss or any entity 100% owned or controlled by him. In addition, these new equity interests will be made subject to a pledge and security interest in favor of the Liquidating Trustee for the benefit of the holders of Class 13 allowed unsecured claims, to secure the Plan treatment of said claims until paid or satisfied in accordance with the terms of the Plan. Class 14 is impaired under the Plan. Secured claims are classified under Classes 1 through 10: Class 1 Bank of America $122,550 Impaired. Will retain its liens on the collateral. Paid in full within 12 months after the Effective Date. Class 2 Capital Bank $2,400,000 Impaired. Will retain its liens on the collateral. Paid in full within 18 months after the Effective Date. Class 3 KeySource Bank $667,000 Impaired. Will retain its liens on the collateral. Paid in full within 12 months after the Effective Date. Class 4 Paragon Bank $3,150,000 Impaired. Will retain its liens on the collateral. Paid in full within 12 months after the Effective Date. Class 5 RBC Bank $1,200,000 Impaired. Will retain its liens on the collateral. Will be paid from the sale of its collateral whether by sale to a third party or credit bid. Class 6 Regions Bank $3,900,000 Impaired. Will retain its liens on the collateral. Paid in full within 18 months after the Effective Date. Class 7 Wachovia Bank $3,300,000 Impaired. Will retain its liens on the collateral. Paid in full within 18 months after the Effective Date. Class 8 James Goldston $568,000 Impaired. Will retain its and William Goldston liens on the collateral. Paid in full within 36 months after the Effective Date. Class 9 Stock Building $1,562,950 Impaired. The Debtors do Supply not believe the claims secured by the Stock deeds of trust are "secured" for purposes of Sec. 506(a) of the Bankruptcy Code and will instead be included in Class 13 for allowed unsecured claims. Class 10 44A Lien Holders Impaired. The Debtors do not believe the claims are "secured" within the meaning of the Bankruptcy Code. Each 44A lien claim will be treated as part of the Class 13 allowed unsecured claims. A full-text copy of the Disclosure Statement is available at no charge at: http://bankrupt.com/misc/AndersonHomes.DisclosureStatement Headquartered in Raleigh, North Carolina, Anderson Homes, Inc., et al., are engaged in the development, construction and sale of residential properties in the form of single-family homes, townhomes and condominiums. Said properties are held for sale to the public and constitute the Debtors' inventory, which the Debtors sell in the ordinary course of business. The Debtors own, construct improvements on, and sell (i) single-family houses and townhomes in subdivisions known and referred to as Edgewater, Bridgewater, Bridgewater West, Cobblestone, Haw Village, Ridgefield, Amberlynn Valley, Cane Creek, Muirfield Village, Pine Valley, Quail Meadows, Thornton Commons Place, Willow Ridge, Creekside at Landon Farms, Keystone Crossing, Sterling Ridge, Jeffries Creek, Briar Chapel, and Villas at Forest Hills, and (ii) condominiums known as Blount Street Commons. Anderson Homes and its units filed for Chapter 11 on March 16, 2009 (Bankr. E.D. N.C. Lead Case No. 09-02062). Gerald A. Jeutter, Jr., Esq., and John A. Northen, Esq., at Northen Blue, LLP, represent the Debtors in their restructuring effort. At the time of the filing, Anderson Homes said it had total assets of $17,190,001 and total debts of $13,742,840. ANGIOTECH PHARMACEUTICALS: To Restate Statements of Operations -------------------------------------------------------------- Following a review by management, Angiotech Pharmaceuticals, Inc., has determined to restate its consolidated statements of operations to reflect the prior $650 million goodwill impairment charge taken by Angiotech in 2008 as operating expense instead of its current classification as other expense. Pending the restatement, Angiotech's consolidated statements of operations for the fiscal year ended December 31, 2008, and earnings releases and similar communications containing information from such statements of operations, should not be relied on by investors. Angiotech's management currently expects that the restatement will have no effect on Angiotech's consolidated balance sheets, statements of cash flows, net loss or net loss per share for the fiscal year ended December 31, 2008. Management has discussed the matter with PricewaterhouseCoopers LLP, its independent registered public accounting firm. Based in Vancouver, British Columbia, Angiotech Pharmaceuticals Inc. (NASDAQ: ANPI, TSX: ANP) -- http://www.angiotech.com/-- is a pharmaceutical and medical device company with over 1,500 dedicated employees. Angiotech discovers, develops and markets innovative treatment solutions for diseases or complications associated with medical device implants, surgical interventions and acute injury. As of June 30, 2009, the Company had $382.3 million in total assets; and $58.6 million in total current liabilities and $620.6 million in total non-current liabilities; resulting in $297.0 million in stockholders' deficit. The Company had $843.1 million in accumulated deficit as of June 30, 2009. ARIES MARITIME: Rocket Marine Gets 2.66MM Shares From Grandunion ---------------------------------------------------------------- Aries Energy Corporation, Rocket Marine Inc., Captain Gabriel Petridis, individually, and as the holder of 50% of the outstanding shares of capital stock of Aries Energy, and Mons S. Bolin, individually, and as the holder of 50% of the outstanding shares of capital stock of Aries Energy, disclose that pursuant to a Securities Purchase Agreement, dated as of September 16, 2009, by and between Aries Maritime Transport Limited and Grandunion Inc., Aries Maritime and Grandunion completed the transactions contemplated by the Purchase Agreement on October 13, 2009. On the Closing Date, Aries Maritime issued 18,977,778 shares of Common Stock, of which 16,311,111 shares were issued to Grandunion and 2,666,667 were transferred to Rocket Marine. As consideration for the Purchased Shares, Grandunion contributed to Aries Maritime 100% of the capital stock of three companies, each owning a capesize vessel. As consideration for the Transferred Shares, the Rocket Marine entities have entered into a voting agreement with Grandunion, dated as of September 16, 2009, and effective as of the Closing. Pursuant to the Voting Agreement, the controlling persons of Rocket Marine have agreed to cause Rocket Marine to vote the 17,563,544 shares of Aries Maritime Common Stock owned by Rocket Marine in accordance with instructions from Grandunion on all matters to be considered and voted upon by Aries Maritime shareholders. The Voting Agreement will remain in effect for so long as any of the Rocket Marine entities own any of the Rocket Marine Shares. The Rock Marine entities disclose holding 36.6% of the Company's common shares. The purpose of the transaction is for Grandunion to obtain a controlling stake in the Company, and to provide additional revenue producing assets and additional capital to Aries Maritime. Pursuant to the Purchase Agreement, as of the Closing, Jeffrey Owen Parry has resigned as President of Aries Maritime and Michael Zolotas, the executive director, president and a co-owner of Grandunion was appointed President, Nicholas Fistes, a co-owner of Grandunion, has been appointed Chairman of the Board of Directors of the Issuer and Allan Shaw has been appointed as the Issuer's Chief Financial Officer. Prior to the Closing, Aries Maritime had obtained resignations from the incumbent members of its Board of Directors and increased the size of its Board of Directors from five members to seven. As of the Closing, the Board of Directors consists of: Nicholas Fistes, Michael Zolotas, Allan Shaw, Masaaki Kosaka, Spyros Gianniotis, Apostolos Tsitsirakis and Panagiotis Skiadas. Going Concern As reported by the Troubled Company Reporter on July 8, 2009, Aries Maritime said the audit report of the Company's independent registered public accounting firm, PricewaterhouseCoopers S.A., included in the Company's Form 20-F filed with the U.S. Securities and Exchange Commission contains an explanatory paragraph which notes that there are specific factors which raise substantial doubt about the Company's ability to continue as a going concern. These factors include the Company's 2008 and 2007 net losses and a previously announced re-classification of long term debt due to its inability to meet certain financial covenants under its revolving credit facility. Aries Maritime is currently in negotiations with its lenders to obtain waivers for certain financial covenants. The Company has plans in place to improve the performance and financial strength of the Company. These plans primarily relate to the reduction of expenses, possible sales of vessels and the potential addition of assets to enhance future cash earnings. As of June 30, 2009, the Company had US$299.5 million in total assets and US$246.2 million in total liabilities. As of March 31, 2009, the Company had US$309.4 million in total assets and US$248.0 million in total liabilities. About Aries Maritime Aries Maritime Transport Limited (NASDAQ: RAMS) is an international shipping company that owns and operates products tankers and container vessels. The Company's products tanker fleet consists of five MR tankers and four Panamax tankers, all of which are double-hulled. The Company also owns a fleet of two container vessels with a capacity of 2,917 TEU per vessel. Four of the Company's 11 vessels are secured on period charters. Charters for two of the Company's products tanker vessels currently have profit-sharing components. ASSET RESOLUTION: Files Chapter 11 Over Investor Disputes --------------------------------------------------------- According to Bloomberg News' Bill Rochelle, Asset Resolution LLC, formed to hold assets taken in foreclosure of a $67 million loan to an affiliate of Compass Partners LLC, filed for Chapter 11 protection on Oct. 14 in New York (Bankr. S.D.N.Y. Case No. 09-16142). The Company listed assets of $423 million and debt of only $22.6 million. Asset Resolution filed along with 14 subsidiaries that own the foreclosed investments. Bloomberg relates the Company said bankruptcy was the only means for dealing with disputes with investors in the underlying assets acquired through foreclosure. Mr. Rochelle says the financial problems can be traced to the bankruptcy of USA Commercial Mortgage Co., a so-called hard money lender that filed in April 2006 and confirmed a liquidating Chapter 11 in January 2008. One of USA Commercial's principals pleaded guilty to fraud. According to Mr. Rochelle, Silar Advisors LP lent $67 million to Compass to finance the purchase of the remaining interests in defaulted commercial loans and servicing rights from USA Commercial. Silar foreclosed on Compass in September 2008 when alleged interference from former investors in USA Commercial prevented proper management and sale of the underlying properties. Silar formed Asset Resolution to own and manage the foreclosed assets. Asset Resolution says that resort to the bankruptcy court is the only means for halting interference from former USA Commercial investors and selling the portfolio in an orderly manner. ATC HEALTHCARE: Hoberman Miller Replaces Weiser as Accountants -------------------------------------------------------------- The Audit Committee of the Board of Directors of ATC Healthcare, Inc. on October 15, 2009, accepted Weiser LLP's resignation as the Company's independent registered public accounting firm. The Audit Committee retained Hoberman, Miller, Goldstein & Lesser, P.C., as the Company's new accountants. The Company has not filed financial statements for the fiscal years ended February 28, 2009, and February 29, 2008. Weiser did not issue a report or have any association with the financial statements for any period including the interim periods and fiscal years ended February 28, 2009, and February 29, 2008. Therefore, the Company does not have financial statements for either of the past two years which contain an adverse opinion or disclaimer of opinion or were qualified or modified as to uncertainty, audit scope or accounting principles. During the fiscal years ended February 28, 2009, and February 29, 2008, and through October 15, 2009, there have been no disagreements with Weiser (as defined in Item 304(a)(1)(iv) of Regulation S-K) on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of Weiser, would have caused them to make reference thereto in their report on the financial statements for such fiscal years. During the fiscal years ended February 28, 2009, and February 29, 2008, and through October 15, 2009, there were no reportable events as defined in Regulation S-K Item 304(a)(1)(v). During the fiscal years ended February 28, 2009, and February 29, 2008, and during the subsequent interim period prior to engaging HMGL, the Company did not consult with HMGL regarding either: (i) The application of accounting principles to a specified transaction, either completed or proposed; or the type of audit opinion that might be rendered on the Company's financial statements, and neither was a written report provided to the Company nor was oral advice provided that HMGL concluded was an important factor considered by the Company in reaching a decision as to an accounting, auditing or financial reporting issue; or (ii) Any matter that was either the subject of a disagreement or a reportable event, as each term is defined in Items 304(a)(1)(iv) and (v) of Regulation S-K, respectively. Headquartered in Lake Success, New York, ATC Healthcare Inc. (OTC:AHNA) -- http://atchealthcare.com/-- provides medical supplemental staffing services. AVENTINE RENEWABLE: Pres. & CEO Resigns; Interim CFO Assumes Role ----------------------------------------------------------------- Aventine Renewable Energy Holdings, Inc., disclosed in a filing with the Securities and Exchange Commission that its president and chief executive officer, Ron Miller, resigned to pursue new opportunities. His resignation is effective Oct. 23, 2009. The Company also disclosed that Mr. Miller also resigned his position as director of Aventine. "[Mr. Miller]" has been with Aventine since its formation and was a central part of Aventine's birth and growth, Bobby Latham, Aventine's chairman of the board, said. [Mr. Miller's] leadership will be missed, but the Company understands and respects his decision to make a fresh start, just as the Company prepares for its fresh start through the bankruptcy process. We wish him the very best. We likewise pledge our full support to the management team in place." Aventine's board appointed George T. Henning, Jr., as interim chief executive officer and president of the Company, effective Oct. 24, 2009. Mr. Henning has served as the Company's interim chief financial officer since March 2009 and will retain that position. The board's decision to appoint Mr. Henning as interim CEO is supported by the Bankruptcy lenders under the Company's senior secured debtor-in-possession financing facility and the holders of the majority of the Company's prepetition unsecured notes. Mr. Henning is a retired financial executive with over 35 years of senior financial management experience, including previous positions with Eastern Gas and Fuel Associates, LTV Corporation and its predecessor companies, and Pioneer Americas Company. Mr. Henning holds a MBA from Harvard University and a BA from Pennsylvania State University. Mr. Henning serves as a member of the Board of Trustees of the Pennsylvania State University. Daniel R. Trunfio, Jr., current chief operating officer, agreed to stay on in that position. Mr. Trunfio will be assuming additional responsibilities in light of Mr. Miller's resignation. In connection with his appointment as interim CEO, Mr. Henning's salary was increased to $390,000 per year. The salary of Mr. Trunfio, the Company's chief operating officer, has also been increased to $390,000. About Aventine Renewable Energy Holdings Pekin, Illinois-based Aventine Renewable Energy Holdings, Inc. (Pink Sheets: AVRN) -- http://www.aventinerei.com/-- is a producer and marketer of ethanol to many leading energy companies in the United States. In addition to ethanol, Aventine also produces distillers grains, corn gluten meal, corn gluten feed, corn germ and brewers' yeast. Morgan Stanley Capital Partners IV bought Aventine in May 2003 from Williams Cos. Aventine had a public offering in May 2006. The Morgan Stanley group retained 28% of the stock at year's end. The Company and its affiliates filed for Chapter 11 on April 7, 2009 (Bankr. D. Del. Lead Case No. 09-11214). Joel A. Waite, Esq., and Ryan M. Bartley, Esq., at Young, Conaway, Stargatt & Taylor, serves as bankruptcy counsel to the Debtors. Davis Polk & Wardwell is special tax counsel and Houlihan, Lokey, Howard & Zukin, Inc., is the financial advisor. Garden City Group, Inc., has been engaged as claims agent. Donald J. Detweiler, Esq., at Greenberg Traurig, LLP, serves as counsel to the official committee of unsecured creditors. When it filed for protection from its creditors, Aventine Renewable listed between $100 million and $500 million each in assets and debts. BANK OF AMERICA: Outgoing CEO Agrees to Give Up 2009 Salary ----------------------------------------------------------- ABI reports that Kenneth Feinberg, the Treasury Department's pay czar, pushed outgoing Bank of America Corp. CEO Kenneth D. Lewis into giving back about $1 million he received so far this year and forgoing the rest of his $1.5 million salary for 2009. Mr. Lewis, 62 is retiring by the end of the year. Bank of America has been unable to shake off effects of the economic contraction that drove the Company to take two taxpayer bailouts. The Company posted a $1 billion third-quarter loss, or 26 cents per diluted share, compared with a profit of $1.18 billion, or 15 cents, a year earlier. According to Bloomberg, regulators and shareholders criticized Lewis's pursuit of Merrill Lynch & Co. The bank reported a fourth- quarter loss in 2008, its first in 17 years, and Lewis is trying to lead a rebound while fending off state and federal probes involving elements of the Merrill deal. He has agreed to give up his 2009 salary and bonus, Bloomberg said. Bank of America's board has hired executive recruiter Russell Reynolds Associates Inc. to assist with its search for a new chief executive officer, The Wall Street Journal has reported. Based in Charlotte, North Carolina, Bank of America -- http://www.bankofamerica.com/-- is one of the world's largest financial institutions, serving individual consumers, small and middle market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk-management products and services. The Company serves more than 59 million consumer and small business relationships with more than 6,100 retail banking offices, nearly 18,700 ATMs and online banking with nearly 29 million active users. Following the acquisition of Merrill Lynch on January 1, 2009, Bank of America is among the world's leading wealth management companies and is a global leader in corporate and investment banking and trading across a broad range of asset classes serving corporations, governments, institutions and individuals around the world. Bank of America offers support to more than 4 million small business owners. The Company serves clients in more than 150 countries. Bank of America Corporation stock is a component of the Dow Jones Industrial Average and is listed on the New York Stock Exchange. The bank needed the government's financial help in completing its acquisition of Merrill Lynch. Merrill Lynch & Co. Inc. -- http://www.ml.com/-- is a wealth management, capital markets and advisory companies with offices in 40 countries and territories. BofA has received US$45 billion in government bailout money since the economic collapse in 2008. As reported by the Troubled Company Reporter on March 27, 2009, Moody's Investors Service lowered the senior debt rating of Bank of America Corporation to A2 from A1, the senior subordinated debt rating to A3 from A2, and the junior subordinated debt rating to Baa3 from A2. The preferred stock rating was downgraded to B3 from Baa1. The holding company's short-term rating was affirmed at Prime-1. BANK OF AMERICA: Suffers $1-Bil. Loss in Q3; 2nd Qrtly Loss in '09 ------------------------------------------------------------------ Bank of America Corporation reported a third-quarter 2009 net loss of $1.0 billion. After deducting preferred dividends of $1.2 billion, including $893 million related to dividends paid to the U.S. government, the diluted loss per share was $0.26. Those results compared with net income of $1.2 billion, or diluted earnings per share of $0.15, during the year-ago period. Through the first nine months of the year the company had net income of $6.5 billion, or $0.39 per share after preferred dividends, compared with $5.8 billion, or $1.09 per share a year earlier. Results were negatively impacted by continued weakness in the U.S. and global economies and stress on the consumer, which continues to result in high credit costs. Earnings in the quarter were affected by $2.6 billion in pretax mark-to-market and credit valuation adjustments on certain liabilities, including the Merrill Lynch structured notes, and a $402 million pretax charge to pay the U.S. government to terminate its asset guarantee term sheet. Despite the loss in the period, the company strengthened its reserves, capital position and liquidity through efficient balance sheet and capital management. "The company's core performance was impacted by a number of non- core items," said Chief Executive Officer and President Kenneth D. Lewis. "The market's improved view of Bank of America's credit cost the company due to non-cash marks on liabilities. "Excluding those items, our revenue continued to hold up well," Lewis said. "Obviously, credit costs remain high, and that is our major financial challenge going forward. However, we are heartened by early positive signs, such as the leveling of delinquencies among our credit card customers." Third-quarter 2009 business highlights: * Average retail deposits in the quarter increased $93.0 billion, or 16 percent, from a year earlier, including the net impact of $72.1 billion in balances from Merrill Lynch and Countrywide. Excluding Countrywide and Merrill Lynch, retail deposits grew $20.9 billion, or 4 percent, from the year-ago quarter. * Global Wealth and Investment Management was ranked No. 1 among U.S. wealth managers with more than 25 percent of the nation's top 100 financial advisors, according to two surveys conducted by Barron's. The number of households with assets greater than $250,000 increased 4 percent compared with the second quarter including the impact of the market. * Bank of America received Federal Deposit Insurance Corp. (FDIC) approval to exit the debt guarantee program under the FDIC's Temporary Liquidity Guarantee Program (TLGP). Additionally, the company will opt out of the six-month extension of the Transaction Account Guarantee Program (TAGP) that guaranteed full insurance coverage from the FDIC on non-interest-bearing transactional accounts greater than $250,000. * Bank of America completed the conversion of Countrywide's deposit systems. The integration of Merrill Lynch remained on track with cost savings expected to surpass original estimates for the first year. * For the nine months ended September 30, Bank of America Merrill Lynch ranked No. 1 in high-yield corporate debt, leveraged loans and mortgage-backed assets based on volume, both globally and in the U.S., No. 3 and No. 2 in global and U.S. investment banking fees, respectively, and No. 2 in global and U.S. asset-backed securities and syndicated loans based on volume, according to Dealogic third-quarter league tables. * During the quarter, Bank of America signed an agreement to sell the long-term asset management business of Columbia Management to Ameriprise Financial for approximately $1 billion, subject to certain adjustments. The transaction is expected to close in spring 2010. * Bank of America funded $95.7 billion in first mortgages, helping nearly 450,000 people either purchase a home or refinance their existing mortgage. This funding included $23.3 billion in mortgages made to 154,000 low- and moderate-income borrowers. Approximately 39 percent of first mortgages were for purchases. * To help homeowners avoid foreclosure, Bank of America has provided rate relief or agreed to modifications with approximately 215,000 customers during the first nine months of 2009. In addition, approximately 98,000 Bank of America customers are already in a trial period modification under the government's Making Home Affordable program at September 30. * Bank of America extended $183.7 billion in credit during the quarter, including commercial renewals of $50.9 billion, according to preliminary data. New credit included $95.7 billion in first mortgages, $65.5 billion in commercial non-real estate, approximately $8.3 billion in commercial real estate, $4.5 billion in domestic and small business card, $2.7 billion in home equity products and nearly $7.0 billion in other consumer credit. * During the third quarter, Small Business Banking extended more than $471 million in new credit consisting of credit cards, loans and lines of credit to more than 29,000 customers. * Bank of America continued to respond to consumer needs during the quarter. The company announced an easy-to- understand BankAmericardr BasicTM Visar credit card that features one basic rate for all types of transactions. The company also announced changes to checking account options and services that will help customers limit overdraft fees. A full-text copy of the Press Release is available for free at: http://researcharchives.com/t/s?471c According to Bloomberg News, BofA's $1-billion quarterly loss was more than analysts estimated and the only one posted by the nation's three biggest lenders. Credit Card Business According to Bloomberg News, Bank of America plans to overhaul its credit-card business after the unit posted five straight quarterly losses totaling $4.7 billion with no sign of profit ahead. "We have a lot of people looking at the business and looking at the changes that need to be made both in infrastructure and other ways we can make money," Mr. Lewis told analysts after BoA posted its second quarterly loss in less than a year. "A lot of people are having trouble making money in credit cards, and that is going to put a lot of pressure on the banks," said Paul Miller, an analyst with FBR Capital Markets Corp. JPMorgan Chase & Co., the biggest U.S. card lender, is predicting more losses next year, "and Bank of America's credit performance is much worse than theirs," Mr. Miller said. About Bank of America Based in Charlotte, North Carolina, Bank of America -- http://www.bankofamerica.com/-- is one of the world's largest financial institutions, serving individual consumers, small and middle market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk-management products and services. The Company serves more than 59 million consumer and small business relationships with more than 6,100 retail banking offices, nearly 18,700 ATMs and online banking with nearly 29 million active users. Following the acquisition of Merrill Lynch on January 1, 2009, Bank of America is among the world's leading wealth management companies and is a global leader in corporate and investment banking and trading across a broad range of asset classes serving corporations, governments, institutions and individuals around the world. Bank of America offers support to more than 4 million small business owners. The Company serves clients in more than 150 countries. Bank of America Corporation stock is a component of the Dow Jones Industrial Average and is listed on the New York Stock Exchange. The bank needed the government's financial help in completing its acquisition of Merrill Lynch. Merrill Lynch & Co. Inc. -- http://www.ml.com/-- is a wealth management, capital markets and advisory companies with offices in 40 countries and territories. BofA has received US$45 billion in government bailout money since the economic collapse in 2008. As reported by the Troubled Company Reporter on March 27, 2009, Moody's Investors Service lowered the senior debt rating of Bank of America Corporation to A2 from A1, the senior subordinated debt rating to A3 from A2, and the junior subordinated debt rating to Baa3 from A2. The preferred stock rating was downgraded to B3 from Baa1. The holding company's short-term rating was affirmed at Prime-1. BEARINGPOINT INC: Court Extends Plan Filing Deadline to Oct. 27 --------------------------------------------------------------- The Hon. Robert E. Gerber of the U.S. Bankruptcy Court for the Southern District of New York entered a bridge order extending the exclusive period of Bearingpoint Inc. and its debtor-affiliates to file a Chapter 11 plan until Oct. 27, 2009. The Debtors said that they have been working closely with the Official Committee of Unsecured Creditors to achieve an expeditious and orderly conclusion to these chapter 11 cases, and believe that the proposed plan is in the best interest of their creditors. The Debtors assured that the creditors will not be harmed by the relief requested and the proposed second extension of the exclusive periods is justified and appropriate under the circumstances. About BearingPoint BearingPoint, Inc. -- http://www.BearingPoint.com/-- was one of the world's largest providers of management and technology consulting services to Global 2000 companies and government organizations in more than 60 countries worldwide. Based in McLean, Va., BearingPoint -- a former consulting arm of KPMG LLP - - has approximately 15,000 employees focusing on the Public Services, Commercial Services and Financial Services industries. The Company's service offerings are designed to help clients generate revenue, increase cost-effectiveness, manage regulatory compliance, integrate information and transition to "next- generation" technology. BearingPoint, Inc., fka KPMG Consulting, Inc., together with its units, filed for Chapter 11 protection on February 18, 2009 (Bankr. S.D.N.Y., Case No. 09-10691). The Debtors' legal advisor is Weil, Gotshal & Manges, LLP, their restructuring advisor is AlixPartners LLP, and their financial advisor and investment banker is Greenhill & Co., LLC. Jeffrey S. Sabin, Esq., at Bingham McCutchen LLP represents the Creditors' Committee. Garden City Group serves as claims and notice agent. BearingPoint disclosed total assets of $1,762,689,000, and debts of $2,231,839,000 as of September 30, 2008. BERNARD MADOFF: Montauk Retreat Closes for $9.41 Million -------------------------------------------------------- Bernard Madoff's former home in Montauk, New York, sold for $9.41 million, Oshrat Carmiel at Bloomberg News reported, citing a statement by the U.S. Marshals Service. The property was listed for $8.75 million. "It goes directly to the Department of Justice fund for the Bernard Madoff Victims, so that's obviously great news," said Roland Ubaldo, a deputy U.S. Marshal in New York. He didn't disclose the identity of the buyer. The property is the first of three once owned by Mr. Madoff that the government is selling to pay restitution to victims of Mr. Madoff's Ponzi scheme, the largest in history. The 3,000 square-foot home on Old Montauk Highway, on the east end of New York's Long Island, was seized July 1 by U.S. Marshals. About Bernard L. Madoff Bernard L. Madoff Investment Securities LLC and Bernard L. Madoff orchestrated the largest Ponzi scheme in history, with losses topping US$50 billion. On December 15, 2008, the Honorable Louis A. Stanton of the U.S. District Court for the Southern District of New York granted the application of the Securities Investor Protection Corporation for a decree adjudicating that the customers of BLMIS are in need of the protection afforded by the Securities Investor Protection Act of 1970. The District Court's Protective Order (i) appointed Irving H. Picard, Esq., as trustee for the liquidation of BLMIS, (ii) appointed Baker & Hostetler LLP as his counsel, and (iii) removed the SIPA Liquidation proceeding to the Bankruptcy Court (Bankr. S.D.N.Y. Case No. 08-01789) (Lifland, J.). Judge Denny Chin of the U.S. District Court for the Southern District of New York on June 29, 2009, sentenced Mr. Madoff to 150 years of life imprisonment for defrauding investors in United States v. Madoff, No. 09-CR-213 (S.D.N.Y.). BERNARD MADOFF: Trustee, SIPC Outline Legal Theory for Claims ------------------------------------------------------------- According to Bill Rochelle at Bloomberg News, the trustee for Bernard L. Madoff Investment Securities Inc. and the Securities Investor Protection Corp. outlined their legal theory for calculating the amount of customers' claims and in the process revealed details about the world's largest Ponzi scheme. SIPC trustee Irving H. Picard said -- in addition to Mr. Madoff and Frank DiPascali Jr., the firm's former chief financial officer -- the fraud required the "labor of many individuals." The papers don't say whether the other Madoff employees were aware of the criminal scheme. According to Joseph Looby, one of the trustee's fraud investigators from FTI Consulting Inc., Mr. Madoff, to carry out the trading strategy, advertised to his customers would have required more options contracts than were available on the Chicago Board Options Exchange, In October 2002, for example, Mr. Looby said that Mr. Madoff would have needed 13 times more options than were executed on the CBOE for the stock he supposedly was buying. When BLMIS went out of business in December, customers were shown as having $73.1 billion of net equity in their accounts. At the time, the amount deposited but not withdrawn by customers was $20 billion, with the difference representing fictitious profits. As before, the trustee said that customer profits were "entirely fabricated." The filings by the SIPC and the trustee on Oct. 16 were made under a litigation schedule established in September for determining the amount of customers' claims. Customers are to file papers on Nov. 13 and Dec. 11. The trustee and the SIPC will file their reply on Jan. 15 in advance of a Feb. 2 hearing. According to Mr. Rochelle, the trustee and SIPC are taking the position that a customer's claim should equal the difference between the amount of cash deposited and the amount withdrawn. Some customers contend the amount of a claim should take into consideration the time-value of money or equal the balance on the last account statement. The trustee's method would disadvantage long-time investors who took little out before the fraud surfaced. On the other hand, the trustee's theory could help investors who had taken out less than they invested by knocking out claims of customers who had recovered all their cash investments. About Bernard L. Madoff Bernard L. Madoff Investment Securities LLC and Bernard L. Madoff orchestrated the largest Ponzi scheme in history, with losses topping US$50 billion. On December 15, 2008, the Honorable Louis A. Stanton of the U.S. District Court for the Southern District of New York granted the application of the Securities Investor Protection Corporation for a decree adjudicating that the customers of BLMIS are in need of the protection afforded by the Securities Investor Protection Act of 1970. The District Court's Protective Order (i) appointed Irving H. Picard, Esq., as trustee for the liquidation of BLMIS, (ii) appointed Baker & Hostetler LLP as his counsel, and (iii) removed the SIPA Liquidation proceeding to the Bankruptcy Court (Bankr. S.D.N.Y. Case No. 08-01789) (Lifland, J.). Judge Denny Chin of the U.S. District Court for the Southern District of New York on June 29, 2009, sentenced Mr. Madoff to 150 years of life imprisonment for defrauding investors in United States v. Madoff, No. 09-CR-213 (S.D.N.Y.). BERNARD MADOFF: 3 Victims Appeal Dismissal of Trustee Suit ---------------------------------------------------------- Erik Larson at Bloomberg News reports that three of Bernard Madoff's victims who sued Irving H. Picard, the liquidator of Bernard L. Madoff Investment Securities LLC -- for allegedly miscalculating their claims -- have taken an appeal from the dismissal of their lawsuit by a New York bankruptcy judge. Investors Diane and Roger Peskin and Maureen Ebel asked a federal district court in New York to remove Irving Picard as trustee for failing to protect victims and deducting money from repayment checks from the Securities Investor Protection Corp., the quasi- government agency that hired him. "Picard has a fiduciary duty as a matter of law to investors," their lawyer, Helen Chaitman, Esq., said in an e-mail sent to Bloomberg News. "He has acted in violation of that duty as SIPC's puppet, seeking to enrich SIPC at the investors' expense." Their suit against Mr. Picard was dismissed Sept. 10 by U.S. Bankruptcy Judge Burton Lifland in Manhattan, who said the litigation could "wreak havoc on the claims adjudication process" for thousands of Madoff victims. About Bernard L. Madoff Bernard L. Madoff Investment Securities LLC and Bernard L. Madoff orchestrated the largest Ponzi scheme in history, with losses topping US$50 billion. On December 15, 2008, the Honorable Louis A. Stanton of the U.S. District Court for the Southern District of New York granted the application of the Securities Investor Protection Corporation for a decree adjudicating that the customers of BLMIS are in need of the protection afforded by the Securities Investor Protection Act of 1970. The District Court's Protective Order (i) appointed Irving H. Picard, Esq., as trustee for the liquidation of BLMIS, (ii) appointed Baker & Hostetler LLP as his counsel, and (iii) removed the SIPA Liquidation proceeding to the Bankruptcy Court (Bankr. S.D.N.Y. Case No. 08-01789) (Lifland, J.). Judge Denny Chin of the U.S. District Court for the Southern District of New York on June 29, 2009, sentenced Mr. Madoff to 150 years of life imprisonment for defrauding investors in United States v. Madoff, No. 09-CR-213 (S.D.N.Y.). BOISE PAPER: Moody's Assigns 'B3' Rating on $300 Mil. Senior Notes ------------------------------------------------------------------ Moody's Investors Service assigned a B3 rating to Boise Paper Holdings, L.L.C.'s proposed $300 million senior unsecured notes due 2017. Boise Paper Holdings, L.L.C., a wholly owned subsidiary of Boise Inc., intends to use existing cash and the proceeds from the proposed note offering to repay a portion of the first lien term loan, repurchase the second lien term loans, and exercise the option to retire the company's seller's note. Moody's affirmed the B1 corporate family rating and the company's other existing debt ratings -- refer to the list below. In addition, Moody's upgraded the company's speculative grade liquidity rating to SGL-2 from SGL-3 and changed the outlook to stable from negative. Following the close of the transaction, Moody's will withdraw the ratings on the second lien term loans. The ratings assignment and affirmation reflect the company's market position as the third largest producer of uncoated free sheet paper in North America and continued cost improvements over the intermediate term due to recent rationalization actions and reduced energy costs. The ratings also incorporate declining product demand, high leverage during a slow economic recovery, high input cost exposure, and recent price declines in 2009. The stable outlook considers the company's reduced debt level after the transaction, the expectation of future debt reduction over the near term, an improved liquidity position, and relatively favorable pricing trends in the uncoated freesheet sector. Despite the 14% decline of year-to-date uncoated freesheet production, pricing has remained relatively stable as industry leaders have proactively taken downtime to match production with orders and manage inventory levels. Nonetheless, Moody's believes the company's operating performance will continue to be challenged by a slow economic recovery, reduced demand, challenges of shifting to higher margin specialty products and exposure to high fiber and chemical costs. The company's SGL-2 speculative grade liquidity rating indicates a good liquidity position over the next twelve months. The company reached an agreement to amend its first lien credit agreement and change its leverage financial covenants to add a net first lien leverage ratio of 3.25x and to comply with a new total net debt leverage ratio of 4.75x. The first lien leverage ratio goes to 3.0x and the total net leverage ratio goes to 4.50x in the third fiscal quarter of 2011. The minimum interest coverage ratio of 2.5x will not be changed under the amendment. Despite the aforementioned operating performance challenges, Moody's expects the company to comply with these new financial covenants over the next twelve months. Boise maintains a $250 million senior secured bank credit facility that is committed through 2013. Currently, aggregate outstanding amounts are $0 million, with availability of approximately $226 million after considering outstanding letters of credit. The company will likely have $110 million of cash on the balance sheet post transaction with approximately $27 million of debt due in 2010 and $49 million due in 2011. Ratings Assigned: -- Senior Unsecured Notes, B3 (LGD5, 84%) Ratings Affirmed: -- Corporate Family Rating, B1 -- First Lien Secured Revolver, Ba3 (LGD3, 31%) -- First Lien Secured Term Loan A, Ba3 (LGD3, 31%) -- First Lien Secured Term Loan B, Ba3 (LGD3, 31%) Ratings Changed: -- Speculative Grade Liquidity Rating changes to SGL-2 from SGL- 3 -- Outlook changes to stable from negative Moody's last rating action was on March 12, 2009, when Boise's corporate family rating was lowered to B1 from Ba3. Boise Paper Holding, L.L.C., a wholly owned subsidiary of Boise Inc., headquartered in Boise, Idaho, is the third largest North American producer in uncoated free sheet paper and has a significant presence in the markets for linerboard, corrugated containers, and specialty and premium paper products. BOISE PAPER: S&P Assigns 'BB-' Rating on $300 Mil. Senior Notes --------------------------------------------------------------- Standard & Poor's Ratings Services said that it assigned its 'BB-' issue-level (the same as the corporate credit rating) and '4' recovery ratings to Boise Paper Holdings LLC's proposed $300 million senior unsecured notes due 2017 based on preliminary terms and conditions. Boise Finance Co., Boise's subsidiary, will be the co-issuer. The '4' recovery rating indicates S&P's expectations for average (30%-50%) recovery for bondholders in the event of a payment default. Standard & Poor's also said that it revised its outlook on Boise to stable from negative. In addition, Standard & Poor's affirmed its ratings on the company, including the 'BB-' corporate credit rating. The company plans to use the proceeds from the new notes -- combined with cash on hand -- to pay down $75 million of its first-lien bank debt and fully repay its $72 million of 15.75% payment-in-kind notes and $261 million second-lien term loan. "The affirmation and outlook revision recognize the debt reduction that Boise has achieved in 2009 through internal cash generation," explained Standard & Poor's credit analyst Pamela Rice. "They also take into account the additional meaningful debt reduction that should occur following Boise's proposed refinancing." Pro forma for the transactions, total debt (adjusted for about $150 million of debt-like obligations as of June 30, 2009) would have been $1.07 billion, a decline of $180 million since year-end 2008. Total adjusted debt to EBITDA, pro forma for the transactions, is 4.2x compared with 6.1x as of Dec. 31, 2008. The amendment to the company's credit agreement that is contingent on the completion of the notes offering loosens the total leverage ratio covenant for the remainder of the term. This alleviates S&P's concerns about the company's ability to comply with the existing covenant at the end of 2010 because of previously aggressive step downs. Also, Boise's business portfolio has performed well during the current recession. Along with lower raw material and energy costs and cost savings from capacity rationalization, this has strengthened operating margins to more than 12% in the first half of 2009 compared with well below 10% in the first six months of 2008. As a result, EBITDA (excluding alternative fuel mixture tax credits) in the first half of 2009 was almost twice the level produced in the comparable prior-year period. Although S&P believes financial results over the next several quarters could weaken modestly because of product price declines and rising input costs, S&P expects credit measures to remain in line with ratings expectations as debt decreases further. Specifically, S&P expects leverage of about 4x and FFO to debt in the high teens percentage area. The ratings on Boise reflect the company's participation in cyclical paper and packaging markets, moderate size, customer- concentration risk, and aggressive debt leverage. The ratings also incorporate the company's moderate product diversity and a growing value-added product mix. Boise is the third-largest producer of uncoated freesheet in North America. It also manufactures containerboard, corrugated products, and newsprint. The outlook is stable. Boise has improved its financial risk profile to a level that S&P expects should enable it to maintain credit measures in line with the ratings, even if cash flow declines in 2010 as price and cost pressures weigh on earnings. Specifically, S&P expects debt to EBITDA of about 4x and EBITDA interest coverage of approximately 3x. S&P could lower the ratings if market conditions deteriorate substantially more than S&P currently expect such that earnings decline by 25%-30% compared with the 12 months ended June 30, 2009, and S&P expects leverage to exceed 5x on a sustained basis. S&P could raise the ratings if Boise's debt reduction is more substantial than S&P expects or its earnings strengthen because of a more rapid increase of value-added products in Boise's product mix and S&P believed leverage will be sustained at 3x-3.5x. A higher rating would also be predicated on S&P's comfort regarding the sustainability of OfficeMax volumes. CALPINE CORP: Boosts Senior Note Offering to $1.2BB --------------------------------------------------- Kate Haywood at Dow Jones Newswires reports that Calpine Corp. has added an extra $450 million to its 7.25% senior note offering, increasing it to $1.2 billion. The Associated Press relates that the offering would close on October 21. According to Dow Jones, Ivy High Income Fund portfolio manager Bryan C. Krug said that the new bond deal offers holders of Calpine's existing term loan a chance to switch into a similar amount of the eight-year senior secured notes. Citing Standard & Poor's LCD, Dow Jones relates that Calpine's term loan totals $5.9 billion. Dow Jones states that the term loan was put in place to help Calpine's exit from bankruptcy, and the Company was trying to cut the refinancing risk linked to this facility. The new bonds, says Dow Jones, have a first-priority guarantee on substantially all of Calpine's assets and this security package is the same as Calpine's existing loan facility. The terms of Calpine's loan mean that the new bonds will be used to repay the bank facility at par, Dow Jones, citing analyst KDP Investment Advisors Timothy Doherty. Dow Jones says that the exchange will let Calpine push out the maturity on this portion of its debt by three years and the new bonds are set to mature in 2017, while the loan matures in 2014. Calpine will release third quarter 2009 financial results on October 30, 2009, before the opening of the New York Stock Exchange. At the same time, management plans to update its 2009 guidance and provide guidance for 2010 financial performance. Meanwhile, KDP Investment Advisors Inc., according to Bloomberg News, said that Calpine Corp.'s recent debt exchange didn't offer the best value to loan holders, who were "led to the slaughter by the Company and the investment banks." "We think loan holders could have done better," Timothy Doherty, an analyst for Montpelier, Vermont-based KDP wrote in a report. KDP lowered its rating on Calpine's term loan to "hold" from "buy," citing expectations that the company might attempt similar exchanges "that do not properly compensate loan holders in the future." The 7.25 percent notes fell about six points after trading began, "which implies that the loan holders received only 94 cents of value for their exchanged loans rather than the full par value they should have expected," Mr. Doherty wrote. Founded in 1984, Calpine Corporation -- http://www.calpine.com/-- is a major U.S. power company, currently capable of delivering more than 24,000 megawatts of clean, cost-effective, reliable and fuel-efficient electricity to customers and communities in 16 states in the United States and Canada. Calpine (NYSE:CPN) owns, leases and operates low-carbon, natural gas-fired and renewable geothermal power plants. Using advanced technologies, Calpine generates electricity in a reliable and environmentally responsible manner for the customers and communities it serves. The Company and its affiliates filed for Chapter 11 protection on December 20, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-60200). Attorneys at Kirkland & Ellis LLP represented Calpine while attorneys at Akin Gump Strauss Hauer & Feld LLP, represented unsecured creditors. On Dec. 19, 2007, the Bankruptcy Court confirmed Calpine's plan of reorganization. The Plan became effective Jan. 31, 2008. * * * Calpine carries a 'B2' probability of default and long term corporate family ratings from Moody's and 'B' issuer credit ratings from Standard & Poor's. CASCADIA PROJECT: Files for Ch 11 Bankr. to Dodge Foreclosure ------------------------------------------------------------- The News Tribune of Tacoma reports that Cascadia Project LLC has filed for Chapter 11 bankruptcy protection, to keep HomeStreet Bank from selling most of the site in a foreclosure auction. Cascadia Project LLC has defaulted on two loans totaling $72.9 million including interest and fees, The Associated Press reports, citing HomeStreet. Court documents say that one loan was due in February and the other was due in July. The AP quoted Cascadia Project's chief operating officer and former Pierce County executive John Ladenburg as saying, "We're not bankrupt. The assets are worth far more than the loans outstanding to HomeStreet. We expect that, like (General Motors), that four to six months from now we'll be in good shape when we can restructure our debt." According to The AP, Cascadia Project has letters of intent from two national corporations to work on housing and office park projects as part of the development. Citing Bonney Lake Mayor Neil Johnson, The AP relates that Cascadia Project owes the city some $200,000 and had agreed to spend another $750,000 in mitigation on a project to redesign the Highway 410-Sumner-Buckley Highway intersection. According to The AP, Deputy Pierce County Executive Kevin Phelps said that he believes the $84,000 Cascadia Project owes Pierce County is for property taxes and that he knows corporate lawyer Patrick Kuo, the leader of the project, well and believes that the developer is determined to complete the project. Court document say that more schedules are due to the U.S. District Court in Seattle by October 30. Cascadia Project LLC develops what was expected to be the largest master-planned community near Bonney Lake. CENTRO NP: Extends Consent Solicitation to October 27 ----------------------------------------------------- To allow additional time for discussions with certain noteholders, 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 15, 2009, will now expire at 5:00 P.M. New York City Time on October 27, 2009. Except as modified, all terms and conditions of the Consent Solicitation will remain in full force and effect. 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 ENTERPRISES: Anestis Leaves Board to Work on Transaction ----------------------------------------------------------------- Robert W. Anestis, a director of Champion Enterprises, Inc., on October 16, 2009, announced his resignation from the Board of Directors, effective immediately. Mr. Anestis, with the concurrence of the Board of Directors, will be working with a third party that is considering a possible transaction with the Company, although there can be no assurance that any such transaction will be proposed or take place. Troy, Michigan-based Champion Enterprises, Inc. -- http://www.championhomes.com/-- operates 27 manufacturing facilities in North America and the United Kingdom distributing its products through independent retailers, builders and developers. The Champion family of builders produces manufactured and modular homes, as well as modular buildings for government and commercial applications. As of July 4, 2009, the Company had $596.4 million in total assets; and total current liabilities of $269.6 million, long-term debt of $193.5 million, deferred tax liabilities of $38.1 million, and other long-term liabilities of $31.4 million; resulting in shareholders' equity of $63.6 million. In August 2009, Standard & Poor's Ratings Services lowered its ratings, including its corporate credit ratings, on Champion Enterprises and Champion Home Builders. S&P lowered the corporate credit ratings to 'CC' from 'CCC-'. The outlook is negative. "The rating action reflects the increased likelihood of a debt restructuring, which S&P would view as distressed and tantamount to default," said Standard & Poor's credit analyst George Skoufis. At the end of the second quarter, the company was not in compliance with the amended financial covenants contained in its bank credit facility. In addition to seeking an amendment to the credit facility, Champion is exploring other alternatives, which could include a debt restructuring. The lenders have agreed to grant a forbearance until October 30, 2009. CHAMPION ENTERPRISES: Lenders to Forbear Until October 30 --------------------------------------------------------- Champion Enterprises, Inc. and Champion Home Builders Co., a wholly owned subsidiary of the Company, and certain additional subsidiaries of the Company on October 9, 2009, entered into a waiver and forbearance agreement relating to the Amended and Restated Credit Agreement among the Company, Champion Homes, Credit Suisse, Cayman Islands Branch, as Administrative Agent, and the lenders party thereto, dated as of April 7, 2006, as amended. Pursuant to the Forbearance Agreement, the Lenders have agreed to forbear from taking certain actions as a result of the Company's failure to pay principal installments under the Credit Agreement in the amount of $1,500,000, that were payable on or about September 30, 2009, and interest and fee payments in the amount of approximately $1,918,872, that were payable on or about October 5, 2009. Moreover, the Forbearance Agreement provides waivers of certain financial covenants as of the end of the Company's 2nd and 3rd quarters of 2009. Pursuant to the terms of the Forbearance Agreement, the Lenders have agreed to forbear from accelerating the maturity of the loans outstanding under the Credit Agreement and from exercising other remedies under the Credit Agreement until October 30, 2009. However, the Forbearance Agreement is subject to termination prior to such date upon the occurrence of certain triggering events described in the Forbearance Agreement. Troy, Michigan-based Champion Enterprises, Inc. -- http://www.championhomes.com/-- operates 27 manufacturing facilities in North America and the United Kingdom distributing its products through independent retailers, builders and developers. The Champion family of builders produces manufactured and modular homes, as well as modular buildings for government and commercial applications. As of July 4, 2009, the Company had $596.4 million in total assets; and total current liabilities of $269.6 million, long-term debt of $193.5 million, deferred tax liabilities of $38.1 million, and other long-term liabilities of $31.4 million; resulting in shareholders' equity of $63.6 million. In August 2009, Standard & Poor's Ratings Services lowered its ratings, including its corporate credit ratings, on Champion Enterprises and Champion Home Builders. S&P lowered the corporate credit ratings to 'CC' from 'CCC-'. The outlook is negative. "The rating action reflects the increased likelihood of a debt restructuring, which S&P would view as distressed and tantamount to default," said Standard & Poor's credit analyst George Skoufis. At the end of the second quarter, the company was not in compliance with the amended financial covenants contained in its bank credit facility. In addition to seeking an amendment to the credit facility, Champion is exploring other alternatives, which could include a debt restructuring. CHARTER COMMS: Agrees to Broadcast Lions Games on Channel 11 ------------------------------------------------------------ Charter Communications Inc. has reached agreement with WLUC-TV on October 9, 2009, to place the Detroit Lions broadcast from the Fox Network on Charter's channel 11, the Daily Press reports. Don Gladwell of Charter said the deal will remain in effect through 2012. "The only area not on (right now) is Iron Mountain. There is an issue our engineer is working on," he said. "It is very good for everybody," the Daily Press quoted Mr. Gladwell as saying. "We all understood we had Lions' fans out there just as passionate about their football team as Packers' fans. I'm glad Barrington (Broadcasting, WLUC's owners) and Charter could come to an agreement to help," he continued. According to Denny Grall of the Daily Press, the first Lions game on Fox to air on channel 11 will be on November 1, 2009, against the St. Louis Rams. "Lions' fans will have their games on the basic tier and the digital channel (306) and the Packers on WLUK-TV (Fox)," Mr. Gladwell said. "Fox UP (recently added to WLUC as its second network) will be on channel 11." About Charter Communications Based in St. Louis, Missouri, Charter Communications, Inc. (Pink OTC: CHTRQ) -- http://www.charter.com/-- is a broadband communications company and the fourth-largest cable operator in the United States. Charter provides a full range of advanced broadband services, including advanced Charter Digital Cable(R) video entertainment programming, Charter High-Speed(R) Internet access, and Charter Telephone(R). Charter Business(TM) similarly provides scalable, tailored, and cost-effective broadband communications solutions to business organizations, such as business-to-business Internet access, data networking, video and music entertainment services, and business telephone. Charter's advertising sales and production services are sold under the Charter Media(R) brand. Charter Communications and more than a hundred affiliates filed voluntary Chapter 11 petitions on March 27, 2009 (Bankr. S.D.N.Y. Case No. 09-11435). As of March 31, 2009, the Debtors had total assets of $13,650,000,000, and total liabilities of $24,501,000,000. Pacific Microwave filed for bankruptcy April 20, 2009, disclosing assets of not more than $50,000 and debts of more than $1 billion. Charter filed its Chapter 11 petitions to implement a financial restructuring, which, upon approval, would reduce the Company's debt by approximately $8 billion. The Hon. James M. Peck presides over the cases. Richard M. Cieri, Esq., Paul M. Basta, Esq., and Stephen E. Hessler, Esq., at Kirkland & Ellis LLP, in New York, serve as counsel to the Debtors, excluding Charter Investment Inc. Albert Togut, Esq., at Togut, Segal & Segal LLP in New York, serves as Charter Investment, Inc.'s bankruptcy counsel. Curtis, Mallet-Prevost, Colt & Mosel LLP, in New York, is the Debtors' conflicts counsel. Ernst & Young LLP is the Debtors' tax advisors. KPMG LLP is the Debtors' independent auditors. The Debtors' valuation consultants are Duff & Phelps LLC; the Debtors' financial advisors are Lazard Freres & Co. LLC; and the Debtors' restructuring consultants are AlixPartners LLC. The Debtors' regulatory counsel is Davis Wright Tremaine LLP, and Friend Hudak & Harris LLP. The Debtors' claims agent is Kurtzman Carson Consultants LLC. Bankruptcy Creditors' Service, Inc., publishes Charter Communications Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by Charter Communications and more than 100 of its affiliates. (http://bankrupt.com/newsstand/or 215/945- 7000) CHARTER COMMS: Omnibus Motion to Assume Real Property Leases ------------------------------------------------------------ Charter Communications Inc. and its units notify Bankruptcy Judge James Peck and parties-in-interest that they will present to the Court on October 22, 2009, their omnibus request to assume all of their nonresidential real property leases, except for certain rejected leases. Objections to the request are due October 19. The Rejected Leases are composed of (i) five unexpired nonresidential leases, which the Debtors rejected under the Court's order dated April 15, 2009, and (ii) four unexpired nonresidential leases that the Debtors will reject pursuant to Article VII(A) of the Debtors' Plan of Reorganization. Richard M. Cieri, Esq., at Kirkland & Ellis LLP, in New York, avers that the relief sought is precautionary. He notes that the confirmation of the Debtors' Plan will lead to the proposed assumption of the Debtors' Unexpired Leases on the Plan's effective date. The request proposes to assume the Unexpired Leases pursuant to the cure procedures in the Plan, to which no party has objected, Mr. Cieri asserts. To be clear, he says, certain parties have formally or informally objected to the Debtors' proposed cure amounts, but not to the actual assumption of the Unexpired Leases, and the Debtors are actively negotiating to resolve all those objections. Because the request is being filed on notice of presentment, if a properly filed objection is received, the Debtors ask that the Court enter a bridge order granting the Debtors provisional authority to assume the Unexpired Leases until a hearing on the request and all properly filed objections can be held. The Debtors have prepared and participated in a full confirmation hearing, which also included review of the Unexpired Leases as part of a comprehensive effort by their management and professionals to identify those nonresidential real property leases that are necessary to the Debtors' ongoing business operations and which will continue to provide a net benefit to the Debtors' bankruptcy estates, Mr. Cieri asserts. He points out that the Debtors have determined the assumption of the Unexpired Leases is necessary to provide them continued access to and use of certain premises that are necessary for their operations. Mr. Cieri further contends that the Debtors will cure defaults with respect to the Unexpired Leases and have provided adequate assurance of future performance under the Unexpired Leases. About Charter Communications Based in St. Louis, Missouri, Charter Communications, Inc. (Pink OTC: CHTRQ) -- http://www.charter.com/-- is a broadband communications company and the fourth-largest cable operator in the United States. Charter provides a full range of advanced broadband services, including advanced Charter Digital Cable(R) video entertainment programming, Charter High-Speed(R) Internet access, and Charter Telephone(R). Charter Business(TM) similarly provides scalable, tailored, and cost-effective broadband communications solutions to business organizations, such as business-to-business Internet access, data networking, video and music entertainment services, and business telephone. Charter's advertising sales and production services are sold under the Charter Media(R) brand. Charter Communications and more than a hundred affiliates filed voluntary Chapter 11 petitions on March 27, 2009 (Bankr. S.D.N.Y. Case No. 09-11435). As of March 31, 2009, the Debtors had total assets of $13,650,000,000, and total liabilities of $24,501,000,000. Pacific Microwave filed for bankruptcy April 20, 2009, disclosing assets of not more than $50,000 and debts of more than $1 billion. Charter filed its Chapter 11 petitions to implement a financial restructuring, which, upon approval, would reduce the Company's debt by approximately $8 billion. The Hon. James M. Peck presides over the cases. Richard M. Cieri, Esq., Paul M. Basta, Esq., and Stephen E. Hessler, Esq., at Kirkland & Ellis LLP, in New York, serve as counsel to the Debtors, excluding Charter Investment Inc. Albert Togut, Esq., at Togut, Segal & Segal LLP in New York, serves as Charter Investment, Inc.'s bankruptcy counsel. Curtis, Mallet-Prevost, Colt & Mosel LLP, in New York, is the Debtors' conflicts counsel. Ernst & Young LLP is the Debtors' tax advisors. KPMG LLP is the Debtors' independent auditors. The Debtors' valuation consultants are Duff & Phelps LLC; the Debtors' financial advisors are Lazard Freres & Co. LLC; and the Debtors' restructuring consultants are AlixPartners LLC. The Debtors' regulatory counsel is Davis Wright Tremaine LLP, and Friend Hudak & Harris LLP. The Debtors' claims agent is Kurtzman Carson Consultants LLC. Bankruptcy Creditors' Service, Inc., publishes Charter Communications Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by Charter Communications and more than 100 of its affiliates. (http://bankrupt.com/newsstand/or 215/945- 7000) CHEMTURA CORP: Gets Nod to Hire A&L Goodbody as Irish Counsel ------------------------------------------------------------- Chemtura Corp. and its units sought and obtained the Court's permission to employ A&L Goodbody Solicitors as their Irish counsel nunc pro tunc to May 12, 2009. Following the commencement of their Chapter 11 cases, the Debtors believed it to be in their best interests to employ foreign counsel to advise them regarding maintaining statutory solvency under the laws of certain countries, certain statutory audit consideration and related restructuring matters with respect to their foreign non-debtor subsidiaries. Stephen C. Forsyth, the Debtors' executive vice president and chief financial officer, relates that A&L is particularly well suited to serve as the Debtors' Irish counsel because it is an international full-service law firm with more than 236 attorneys in five offices. Significantly, A&L has extensive experience in cross-border insolvencies, including, among others, Waterford Wedgewood plc, Adams Childrenswear, Lehman Brothers, Sachsen LB Europe plc, Parmalat and XL Leisure Group, he adds. As Irish counsel to the Debtors, A&L will provide these specific services: (a) Advise the Debtors with respect to the powers and duties of their non-debtor Irish subsidiaries; (b) Advise and consult on the impact of the Debtors' Chapter 11 proceedings on their Irish subsidiaries; (c) Take all necessary action to protect and preserve the Debtors' interest in their Irish subsidiaries and their value; (d) Advise the Debtors with respect to the implementation or impacts of any asset dispositions relating to the non- Debtor Irish subsidiaries; and (e) Consult with the Debtors in relation to any accounting, tax or other regulatory requirements regarding the non- Debtor Irish subsidiaries. Mr. Forsyth says that by retaining A&L to provide restructuring advice related exclusively to the Debtors' non-Debtor Irish entities, A&L will be able to better focus on its respective competencies in the reorganization of the Debtors. He clarifies that A&L will not serve as restructuring counsel to the Debtors in their Chapter 11 cases. While certain aspects of A&L's representation will necessarily involve both A&L and the Debtors' restructuring counsel, the Debtors believe, and will require, that the services provided by A&L will be complementary rather than duplicative of the services to be performed by their restructuring counsel. The Debtors will pay for A&L's legal services on an hourly basis in accordance with its ordinary and customary hourly rates in effect on the date services are rendered, and will reimburse actual and necessary out-of-pocket expenses. A&L's applicable hourly rates for each of the above-referenced services to be provided are: Partners EUR600 Associates EUR450 Solicitors EUR280 to EUR320 Trainees/Paralegals EUR150 David Baxter, Esq., a partner at A&L, assured the Court that his firm is a "disinterested person" as the term is defined under Section 101(14) of the Bankruptcy Code. About Chemtura Corp. Based in Middlebury, Connecticut, Chemtura Corporation (CEM) -- http://www.chemtura.com/-- with 2008 sales of $3.5 billion, is a global manufacturer and marketer of specialty chemicals, crop protection products, and pool, spa and home care products. Chemtura Corporation and 26 of its U.S. affiliates filed voluntary petitions for relief under Chapter 11 on March 18, 2009 (Bankr. S.D.N.Y. Case No. 09-11233). M. Natasha Labovitz, Esq., at Kirkland & Ellis LLP, in New York, serves as bankruptcy counsel. Wolfblock LLP serves as the Debtors' special counsel. The Debtors' auditors and accountant are KPMG LLP; their investment bankers are Lazard Freres & Co.; their strategic communications advisors are Joele Frank, Wilkinson Brimmer Katcher; their business advisors are Alvarez & Marsal LLC and Ray Dombrowski serves as their chief restructuring officer; and their claims and noticing agent is Kurtzman Carson Consultants LLC. As of December 31, 2008, the Debtors had total assets of $3.06 billion and total debts of $1.02 billion. Bankruptcy Creditors' Service, Inc., publishes Chemtura Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by Chemtura Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CHEMTURA CORP: Gets Nod to Hire D&P as Valuation Experts -------------------------------------------------------- Chemtura Corp. and its units sought and obtained the Court's authority to employ Duff & Phelps LLC to provide valuation services related to allocation of value among certain assets nunc pro tunc to August 12, 2009. Stephen C. Forsyth, the Debtors' executive vice president and chief financial officer, relates that Duff & Phelps has significant qualifications and experience in providing services in support of valuation efforts to companies emerging from Chapter 11 proceedings. As valuation experts to the Debtors, Duff & Phelps is expected to: (a) assist management with an allocation of the Debtors' reorganization value among certain of the Debtors' assets for financial reporting purposes for Fresh Start Accounting in accordance with American Institute of Certified Public Accountants' Statement of Position 90-7 "Financial Reporting by Entities in Reorganization"; (b) assist management with an allocation of the reorganization value of the Debtors among certain of the Debtors' assets for tax reporting requirements in accordance with the U.S. Internal Revenue Code and related regulations; (c) assist Chemtura's management with the identification of intangible assets and liabilities to be recognized apart from goodwill; (d) assist management in the assessment, and preparation of analysis, of the respective fair value and remaining useful life of certain assets and liabilities, including (i) certain tangible assets; (ii) certain intangible assets (customer relationships and contracts, technology and know-how, trade names and trademarks, and in-process research and development); (iii) certain contingent assets and liabilities; and (iv) certain non-controlling interests; (e) assist management in the allocation of goodwill pursuant to the Statement of Financial Accounting Standards No. 142 and estimation of the fair value of the Debtors' Reporting Units' Total Enterprise Value and allocate the total reorganization value in proportion to their TEVs; and (f) assist in the allocation of the reorganization value and the subject assets and liabilities to each of the Debtors. The Debtors will pay Duff & Phelps on an hourly basis in accordance with the firm's ordinary and customary hourly rates in effect on the date services are rendered, and will reimburse the firm of its actual and necessary out-of-pocket expenses. The hourly rates charged by Duff & Phelps are: Managing Director $585 Director $525 Vice President $430 Senior Associate $360 Analyst $250 Administrative $70 Michael H. Dolan, a managing director at Duff & Phelps, assured the Court that his firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About Chemtura Corp. Based in Middlebury, Connecticut, Chemtura Corporation (CEM) -- http://www.chemtura.com/-- with 2008 sales of $3.5 billion, is a global manufacturer and marketer of specialty chemicals, crop protection products, and pool, spa and home care products. Chemtura Corporation and 26 of its U.S. affiliates filed voluntary petitions for relief under Chapter 11 on March 18, 2009 (Bankr. S.D.N.Y. Case No. 09-11233). M. Natasha Labovitz, Esq., at Kirkland & Ellis LLP, in New York, serves as bankruptcy counsel. Wolfblock LLP serves as the Debtors' special counsel. The Debtors' auditors and accountant are KPMG LLP; their investment bankers are Lazard Freres & Co.; their strategic communications advisors are Joele Frank, Wilkinson Brimmer Katcher; their business advisors are Alvarez & Marsal LLC and Ray Dombrowski serves as their chief restructuring officer; and their claims and noticing agent is Kurtzman Carson Consultants LLC. As of December 31, 2008, the Debtors had total assets of $3.06 billion and total debts of $1.02 billion. Bankruptcy Creditors' Service, Inc., publishes Chemtura Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by Chemtura Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CHEMTURA CORP: Exclusive Periods Extension Sought ------------------------------------------------- Chemtura Corp. is asking the Bankruptcy Court to extend its exclusive period to file a Chapter 11 plan until February 11, 2010, BankruptcyData reports. Chemtura is also asking for an April 12, 2010 extension of its exclusive period to solicit acceptances of that plan. A hearing on the proposed extension is scheduled for October 27. Based in Middlebury, Connecticut, Chemtura Corporation (CEM) -- http://www.chemtura.com/-- with 2008 sales of $3.5 billion, is a global manufacturer and marketer of specialty chemicals, crop protection products, and pool, spa and home care products. Chemtura Corporation and 26 of its U.S. affiliates filed voluntary petitions for relief under Chapter 11 on March 18, 2009 (Bankr. S.D.N.Y. Case No. 09-11233). M. Natasha Labovitz, Esq., at Kirkland & Ellis LLP, in New York, serves as bankruptcy counsel. Wolfblock LLP serves as the Debtors' special counsel. The Debtors' auditors and accountant are KPMG LLP; their investment bankers are Lazard Freres & Co.; their strategic communications advisors are Joele Frank, Wilkinson Brimmer Katcher; their business advisors are Alvarez & Marsal LLC and Ray Dombrowski serves as their chief restructuring officer; and their claims and noticing agent is Kurtzman Carson Consultants LLC. As of December 31, 2008, the Debtors had total assets of $3.06 billion and total debts of $1.02 billion. Bankruptcy Creditors' Service, Inc., publishes Chemtura Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by Chemtura Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CHEMTURA CORP: Wins Nod for Deal with Sprague Energy ---------------------------------------------------- Chemtura Corp. has won approval from the Bankruptcy Court of a stipulation with Sprague Energy Corp. Before the Petition Date, the Debtors and Sprague Energy Corp. entered into a natural gas sales agreement, pursuant to which Sprague supplies natural gas for certain of the Debtors' manufacturing locations at a fixed price and volume which range from $9 to $10 per MMBTU. However, due to the significant decrease in the market price of natural gas in the market, the Debtors are making payments to Sprague in amounts exceeding the market value of the natural gas received by up to $150,000 per month. Accordingly, the Parties agree to amend the terms of their original Agreement to reflect that: a. Sprague will supply natural gas to Chemtura Corporation for August 2009 and Chemtura will pay Sprague the market price for the natural gas, plus 50% of the price differential between the current market price and the contract price of the natural gas provided for in the Original Agreement. Sprague will bear the cost of the remaining 50% of the price differential between the market price of natural gas in August 2009 and the contract price for the same provided for in the Agreement; b. For the months of September 2009 through December 2009, Sprague will supply natural gas to Chemtura at a price determined in accordance with the New York Mercantile Exchange monthly last day settlement price and the monthly contract basis price; c. The 2009 fixed price contracts between Sprague and Chemtura may be liquidated at Sprague's discretion prior to the close of the September 2009 transaction between the parties. Sprague will bear the cost of any loss incurred based on the difference between the contract and market price. Sprague will file a general unsecured claim with the Court within 30 days after the Stipulation and Order is approved by the Court, for the full amount of the mark-to- market loss generated by the liquidation of the remaining fixed price contracts for 2009 and the loss from the assumption of 50% of the difference between the contract price and the market price by Sprague set in section (a); d. Chemtura will not be required to prepay for any of the natural gas supplied by Sprague during the remainder of 2009 and through December 2010; e. The amount of the security deposit posted by Chemtura will be $300,000 to cover gas supply in an amount based on the cost of natural gas to be supplied by Sprague for the month of January 2010. In the event the cost of natural gas for any month beyond January 2010 exceeds the security deposit posted, the security deposit will be increased to meet the increased amount. Sprague will not be required to pay Chemtura the amount of any interest earned on account of Chemtura's security deposit; f. Sprague will maintain standard payment terms for Chemtura for the remainder of 2009, through and including December 2010, and will not require any monthly prepay or additional security beyond the security deposit; g. Sprague agrees that Chemtura may purchase a fixed price supply of natural gas from Sprague through December 2010 and up to 80% of monthly volume requirements in accordance with price terms to be agreed upon by the parties and without demand for financial assurance above the security deposit specified in section (e); and h. Except as specifically amended by the Amendments, all other terms and conditions of the Agreement remain in force and effect. About Chemtura Corp. Based in Middlebury, Connecticut, Chemtura Corporation (CEM) -- http://www.chemtura.com/-- with 2008 sales of $3.5 billion, is a global manufacturer and marketer of specialty chemicals, crop protection products, and pool, spa and home care products. Chemtura Corporation and 26 of its U.S. affiliates filed voluntary petitions for relief under Chapter 11 on March 18, 2009 (Bankr. S.D.N.Y. Case No. 09-11233). M. Natasha Labovitz, Esq., at Kirkland & Ellis LLP, in New York, serves as bankruptcy counsel. Wolfblock LLP serves as the Debtors' special counsel. The Debtors' auditors and accountant are KPMG LLP; their investment bankers are Lazard Freres & Co.; their strategic communications advisors are Joele Frank, Wilkinson Brimmer Katcher; their business advisors are Alvarez & Marsal LLC and Ray Dombrowski serves as their chief restructuring officer; and their claims and noticing agent is Kurtzman Carson Consultants LLC. As of December 31, 2008, the Debtors had total assets of $3.06 billion and total debts of $1.02 billion. Bankruptcy Creditors' Service, Inc., publishes Chemtura Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by Chemtura Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CHRYSLER LLC: No Direct Circuit Court Appeal for Jilted Dealers --------------------------------------------------------------- Bankruptcy Judge Arthur Gonzalez denied a request by dealers to make a direct appeal to the U.S. Court of Appeals from an order terminating the dealership and enjoining the pursuit of a state- court lawsuit aimed at forcing New Chrysler to reinstate the dealership, Bill Rochelle at Bloomberg News says. According to the report, Judge Gonzalez, who entered the ruling without a hearing, says appeals involving Old Chrysler are no longer emergencies, as the business have been sold. Crain CDJ LLC and seven dealerships in Wisconsin has asked Judge Gonzalez for certification of an appeal directly to the Second Circuit on a ruling that terminated their dealership contracts. Old Carco LLC, formerly Chrysler LLC, which has sold its business to Fiat S.p.A., said, in response that there are no unsettled questions or exigent circumstances that require certification of the Appellants' appeals. Lawyers for Chrysler also wrote in a court filing that the dealers' claims are "inaccurate or overstated." The Wisconsin dealers have insisted in their request for a direct appeal that if they can't win the right to keep selling cars, they will suffer "irreparable harm." The dealers also said their case is "beyond the scope of the bankruptcy code," and presents novel issues about whether a bankruptcy court can bar actions by two non-bankrupt companies. Judge Gonzalez had approved Old CarCo LLC's request to enforce the automatic stay and the order approving the sale of substantially all of their assets to Fiat S.p.A. The Judge ruled that dealers should withdraw their actions by September 10, 2009, or they will be subject to a sanction of $10,000 per day and payable to the Court until full compliance. The dealers are enjoined from pursuing any future action against New Chrysler with respect to any rejected dealer agreements. 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: Comptroller Wants Interest on "Oversecured Claim" --------------------------------------------------------------- The Texas Comptroller of Public Accounts timely filed a proof of claim in the Debtors' cases for $1,690,627 for prepetition sales- use tax. The claim was filed as a secured claim and the Texas Comptroller believes the claim to be an oversecured claim. To the extent if any shortfall in collateral value, which the Texas Comptroller does not believe there is any, the claim is entitled to priority treatment pursuant to Section 507(a)(8)(C) of the Bankruptcy Code, counsel for Texas Comptroller, Mark Browning, Esq., assistant attorney general, relates. Additional Texas franchise taxes are due from the Debtors for 2008 and 2009, but the Debtors failed to file the required franchise tax returns. The exact amount of those claims are unknown, according to Mr. Browning. Mr. Browning states that as an oversecured creditor, the Texas Comptroller is entitled to (i) postpetition, pre-Effective Date interest under Section 506(b) of the Bankruptcy Code, and (ii) post-Effective Date interest for any period during which the Texas Comptroller's secured claim remains unpaid. Mr. Browning argues, among other things, that the Plan "attempts to deny the Texas Comptroller its statutory right to [Section] 506(b) interest and at the same time unilaterally declare the Texas Comptroller's claim to be unimpaired and deny the Texas Comptroller the right to vote on the Plan as part of an impaired class." The Plan does not comply with Section 506(b) of the Bankruptcy Code and therefore, under Section 1129(a)(1), (2), and (3), cannot be confirmed, he asserts. In addition, the Plan fails to provide for post-Effective Date interest on the Texas Comptroller's oversecured claim, failing to comply with Sections 1129(b)(2)(A) and 511. Those sections require that post-Effective Date interest under applicable non- bankruptcy be paid on allowed secured claims so that they receive present value equal to the amount of the claims, Mr. Browning notes. Against this backdrop, the Texas Comptroller asks the Court to deny confirmation of the Plan. The Chapter 11 Plan Circuit City is already scheduled to appear before the Bankruptcy court on November 23 to seek confirmation of its Joint Plan of Liquidation. The Plan is being co-sponsored by the unsecured creditors committee. The Plan provides for the orderly liquidation of the remaining assets of the Debtors and the distribution of the proceeds of the liquidation of the Debtors' assets according to the priorities set forth under the Bankruptcy Code. Unsecured creditors are estimated to recover up to 13.5% of their allowed claims. A copy of the Disclosure Statement and First Amended Plan, a full- text copy of which is available at no charge at: http://bankrupt.com/misc/CC_DS&1stAmPlan_092409.pdf 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/or 215/945-7000). CIRCUIT CITY: Hain Capital Group Buys Claims -------------------------------------------- The Bankruptcy Clerk recorded claims that changed hands in October 2009: Claim Amount Transferor Transferee Number Transferred ---------- ---------- ------ ----------- American Scale Corp. Liquidity Solutions, 675 $1,130 Inc. Dallas Cowboys Hain Capital -- $133,500 Football Club Holdings, LLC Ltd. & Pro Silver Star, Ltd. HRB Digital LLC, Hain Capital Group, 14349 465,567 f/k/a H&R Block LLC Digital Tax Solutions, LLC Ion Audio, LLC Credit Suisse 6273 445,182 International Martinair Inc. Liquidity Solutions, 493 170,235 Inc. THQ, Inc. Hain Capital 747 514,159 Holdings, LLC Thomson Inc., f/k/a Hain Capital 1059 446,517 Thomson Multimedia, Inc. WE Energies Liquidity Solutions, -- 30,784 Inc. 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/or 215/945-7000). CIRCUIT CITY: Proposes Jan. 5 Deadline to Remove Actions -------------------------------------------------------- Section 1452 of the Judiciary and Judicial Procedures Code provides that a party may remove any claim or cause of action in a civil action to the district court where that civil action is pending, if that district court has jurisdiction of that claim or cause of action. In line with this, Circuit City Stores, Inc., and its debtor- subsidiaries seek to further extend the time period within which they may remove pending proceedings through the later of: (a) January 4, 2010, or (b) 30 days after entry of an order terminating the automatic stay with respect to any particular action sought to be removed. The current removal period expired on October 6, 2009. The Debtors are winding down their remaining affairs. Moreover, the Debtors have negotiated a consensual plan of litigation with the Official Committee of Unsecured Creditors and have obtained approval of the associated disclosure statement, Douglas M. Foley, Esq., at McGuireWoods LLP, in Richmond, Virginia, relates. The Debtors submit that the requested extension is in the best interests of their estates and creditors because it will afford the Debtors a sufficient opportunity to make fully informed decisions concerning whether the Actions may and should be removed, thereby protecting the Debtors' valuable right to adjudicate lawsuits, according to Mr. Foley. The Debtors' adversaries will not be prejudiced by an extension because the adversaries may not prosecute the Actions absent relief from the automatic stay, Mr. Foley says. Moreover, nothing in the Debtors' motion will prejudice any party to a proceeding that the Debtors seek to remove from pursuing remand pursuant to Section 1452(b) of the Judiciary and Judicial Procedures Code, he adds. 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/or 215/945-7000). CIT GROUP: Icahn Offers $6-Bil. Loan, Criticizes Board & Plan ------------------------------------------------------------- Carl Icahn sent a letter to CIT Group's board of directors on October 19, claiming that the company is shamelessly offering certain large unsecured bondholders the opportunity to purchase $6 billion in secured loans in the company at well below fair market value. The largest holders will be given that right at the expense of thousands of smaller bondholders who will not be given the same opportunity. However, to purchase the undervalued loans the bondholders will be required to vote in favor of the company's proposed Exchange Offer or its Plan of Reorganization. Mr. Icahn stated that "this is reminiscent of the old Tammany political machine's vote-getting tactics." Mr. Icahn stated that the existing Board of CIT, which has reigned over its ruin, is proposing a Plan of Reorganization which is designed to keep the existing regime and its handpicked successors in control of a reorganized CIT in the future as well as giving the Board releases against certain claims that shareholders and bondholders would have against them. As an alternative, Icahn has offered to underwrite a $6 billion loan which would save the company as much as $150 million in fees to prospective lenders under the company's proposed financing. More importantly, Icahn's offer would not force bondholders to vote for the current plan which Icahn claims would entrench current board members and give them releases for a range of past acts. Mr. Icahn stated in the letter that if the Board did not wish to work with him on his offer to underwrite the $6.0 billion term loan because of his "strained relationship" with the company, he is certain that there are other banks who would be eager to underwrite the financing, with large savings to CIT, as long as there is not a vote-buying condition. CIT Group acknowledged receipt of a letter from Mr. Icahn regarding CIT's efforts to secure financing and offering to underwrite an alternative $6 billion loan. According to CIT, the letter is its first indication of Mr. Icahn's interest in underwriting an alternative financing and the Company intends to ask Mr. Icahn for more information regarding his proposal. According to the statement, CIT and its Board of Directors, in consultation with the Steering Committee of CIT Lenders, has developed a comprehensive restructuring plan designed to enhance its capital levels, bolster liquidity and return the Company to profitability. Over the past several months, CIT has actively solicited competitive financing proposals and remains open to securing financing on the most beneficial terms. Icahn's Letter to Board Board of Directors CIT Group, Inc 505 Fifth Avenue New York, NY 10017 October 19, 2009 Ladies and Gentlemen: I am reaching out to you to address what I view as the latest example of incompetent and unconscionable behavior on the part of the Board of Directors of CIT. Specifically, I am referring to approximately $6.0 billion in a secured term loan currently being offered by the company. The economics offered to prospective lenders are well in excess of what the current syndicated loan market should dictate, given the loan's collateral coverage. This loan is a bad-faith attempt to buy votes for the company's Exchange Offer/Plan of Reorganization, since all prospective lenders must vote their CIT debt in favor of the company's plan in order to receive an allocation of the new loan. The FDIC currently has a cease-and-desist order outstanding against your Utah Bank, and we would propose to issue our own cease-and-desist order against your rigging the voting process. The Board of CIT, after years of mismanaging our assets, has over the past year pleaded with the government to bail them out. The government, after studying the problems at our company, flatly turned down the bail-out. So now the Board, in their wisdom, has determined to ask the unsecured creditors of CIT to bail them out by voting to approve a pre- packaged bankruptcy plan. The plan would, of course, give the Board releases against certain claims that shareholders and bondholders would have against them, and I believe there are many. Even worse, the plan would leave a majority of the existing Board, or their chosen successors, in control of our company for years to come. The company argues that they must stay in control because a change of control at the company might cause the Federal government to close down our very small bank. Interestingly, the government has already effectively shut down the bank by issuing a "cease and desist" order. Ironically, based on the actions of the government concerning our present Board, we believe that a complete change in the Board would be a positive, rather than a negative, factor in influencing the government to resuscitate our bank. We agree with the Board on one thing, that CIT's roughly $60 billion of assets should be allowed to be "run-off" or sold. However, as CIT's largest creditor, we see no reason that the current Board (whose negligence created this mess in the first place) should continue to control our company. Furthermore, the Board would have us remain a bank holding company even though our banking operations are effectively shut down. The incremental value which may, hypothetically, be built through the bank several years down the road pales in comparison to the loss of value which would likely occur if this Board, like the proverbial fox in the henhouse, is left in place to manage our $60 billion in assets. In the proposed plan to "bail-out" the Board at the expense of most bondholders, the new term loan would amend and increase the company's existing $3.0 billion first lien secured facility and would result in term debt of approximately $9.0 billion. The term debt would be secured by a first lien on virtually all of the company's unencumbered assets, which currently total over $30 billion. In exchange for committing to and funding the term loan, the company is offering prospective lenders a total of 5.0% in commitment and funding fees, for a total cost to the company of $300 million in addition to an interest rate of at least 9.50%. In light of the gross over-collateralization and rich pricing being offered to investors, we view this upfront payment as excessive. (By way of example, when the company arranged its $3.0 billion existing term loan in July, 2009, lenders were also paid 5.0% for their commitment in the form of original issue discount. Once freed to trade in the secondary market the loan immediately traded to approximately 105% of par, indicating that a 5.0% OID was far greater than what was necessary to syndicate the facility. While the structure and pricing for the two facilities differ somewhat, it is obvious to us that the company is once again destroying value.) Were the transaction a simple financing with no requirements to vote in favor of the company's proposal, we would attribute the exorbitant payment to continued incompetence on the part of a Board and management team which has brought the company to the brink of bankruptcy. (This new credit facility, the existing term facility and the Goldman Sachs swap financing completed in 2008 are only a few recent examples which demonstrate that those running the company are incompetent, or worse, when seeking funding in the capital markets -- disturbing given that CIT is a financial institution for whom the capital markets are its lifeblood). However, what is even more reprehensible than the wasted money is that this money is being used to buy votes to entrench and protect the current Board. We cannot sit idly by and watch you continue to destroy the value of the bondholders' assets, in this case by outrageously overpaying fees in order to induce your largest bondholders to vote for a plan which benefits and leaves in place an entrenched Board of Directors in charge of our company following its restructuring or bankruptcy. We will vote on your plan at the end of the month and I call on you to make this a fair vote. As such, subject to documentation acceptable to us which could be done in a matter of days, we are prepared to underwrite an alternative term loan on substantially the same terms and conditions as the currently proposed Expansion Term Facility outlined in the term sheets dated and sent to us September 30, 2009, with two modifications: (i) we will charge a 1.25% commitment fee and a 1.25% funding fee, for a total of 2.50% (exactly 50% of the currently proposed fees), and (ii) we will not require an affirmative vote for the company's Exchange Offer and/or Plan of Reorganization as a pre-condition to lenders participating in the financing. We are eager to move forward on the financing, which will be offered to all bondholders. This will be a first step toward protecting the value of our assets. We look forward to working with you and your advisors to complete documentation for the facilities. However, if you do not wish to work with me because of our "strained relationship," I am certain that there are a number of other banks who would also be eager to underwrite the financing, with large savings to CIT, as long as there is not a vote-buying condition. Sincerely Carl C. Icahn 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. Under CIT's restructuring plan, holders of $1,000 of old notes maturing in 2009 will receive $900 in New Notes and 0.40749 shares of new preferred stock; in 2010 will receive $850 in new notes and 1.22248 shares of new preferred stock; in 2011 and 2012 will receive $800 in new notes and 2.03746 shares of new preferred stock; in 2013 through 2017 and in 2036 will receive $700 in new notes and 3.25993 shares of new preferred stock; in 2018 will receive 4.07492 in shares of new preferred stock; and in 2067 will receive 2.03746 shares of new preferred stock. The Offers will expire at 11:59 p.m., (prevailing Eastern Time), on October 29, 2009. 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. CIT Group Inc. on October 16 amended its restructuring plan to further build bondholder support. The amended terms of the restructuring plan include, among others: * A comprehensive cash sweep mechanism to accelerate the repayment of the new notes; * The shortening of maturities by six months for all new notes and junior credit facilities; * An increased amount of equity offered to subordinated debt holders reflecting agreements with holders of the majority of its senior and subordinated debt; * The inclusion of the notes maturing after 2018 that had previously not been solicited as part of the exchange offer or plan of reorganization; * An increase in the coupon on Series B Notes, to 9% from 7%, being issued by CIT Delaware Funding; and * Provided preferred stock holders contingent value rights in the plan of reorganization, and modified the allocation of common stock in the recapitalization after the exchange offers, as part of an agreement with the United States Department of Treasury. About CIT Group Inc. 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. CMR MORTGAGE: Wants Obtain $6 Million DIP Financing From Investors ------------------------------------------------------------------ CMR Mortgage Fund II, LLC, asks the U.S. Bankruptcy Court for the Northern District of California for permission to: a) borrow $5,000 each from two lead investors; b) transmit its draft private placement memorandum to certain qualified, accredited investors, including existing members of the Debtor who are willing advance funds on the same terms; and c) solicit a total of $1 million to $6 million in financing from investors. The Debtor relates it is prohibited from issuing stock in exchange for the contributions from individual investors and must therefore resort to a debt offering to generate the funds it needs to pay debt service and operate. No third parties are willing to advance funds to Debtor on an unsecured basis without priority. The Debtors add that Garry Samuels and Don Strouzas, investors, stepped forward as the first to agree to loan funds to protect their investments. Salient Terms of DIP Financing Loan Amount: $1 million to $6 million Interest Rate: 12% per annum. Liens, Payments, Or Other Adequate Protection: Noteholders are to receive administrative priority Maturity Date: December 31, 2014 Events of Default: Non-payment of principal plus interest at maturity. Borrowing Conditions: Minimum participation of loans totaling $1 million and approval of the U.S. Bankruptcy Court About CMR Mortgage Fund II San Francisco, California-based CMR Mortgage Fund II, LLC, is a limited liability company organized for the purpose of making or investing in business loans secured by deeds of trust or mortgages on real properties located primarily in California. The Company previously funded lending activities through loan pay downs or pay offs, as well as by selling its membership interests, and by selling all or a portion of interests in the loans to individual investors. The Company commenced operations in February 2004. The Company ceased accepting new members in the third quarter of 2006. The Company filed for Chapter 11 protection on March 31, 2009 (Bankr. N. D. Calif. Case No. 09-30788). Robert G. Harris, Esq., at the Law Offices of Binder and Malter, represents the Debtor as counsel. The Debtor listed between $10 million and $50 million each in assets and debts. CONSECO INC: Fitch Assigns 'B-/RR6' Rating on Senior Debt Issue --------------------------------------------------------------- Fitch Ratings has affirmed all the ratings assigned to Conseco Inc. and its subsidiaries and removed the ratings from Rating Watch Negative. Fitch has assigned a Negative Rating Outlook to the ratings. In addition, Fitch has assigned a 'B-/RR6' rating to Conseco's new 7% convertible senior debt issue. See the full ratings list at the end of this release. Fitch placed Conseco's ratings on Rating Watch Negative on March 3, 2009. The current affirmation and Watch removal reflect the company's recently announced capital transactions, which: -- Remove 2010 refinancing risk by replacing Conseco's 3.5% convertible debentures that are puttable in September 2010 with a new debenture maturing in 2016; -- Provide additional equity capital. Fitch expects that by addressing its refinancing risk, Conseco will avoid an audit opinion for 2009 financial statements with a 'going concern' qualifier. Inclusion of such an opinion would be considered a covenant violation under Conseco's secured credit agreement. The Negative Outlook reflects Fitch's concern regarding the potential for higher than expected investment losses and its impact on Conseco's capital, earnings, and ability to stay in compliance with the financial covenants in Conseco's secured bank facility. Temporary covenant relief granted under the bank facility expires and covenants revert back to previous levels in the third quarter. Based on Conseco's financial position on June 30, 2009, the company is very close to a covenant violation under the previous levels. The covenants of immediate concern are those related to statutory capital and risk based capital ratio. Based on a detailed analysis of Conseco's investment portfolio using Fitch's stress testing methodology, Fitch's base case projection for investment losses is in the range of $200-$250 million for the remainder of 2009-2010. Fitch notes that the company is currently working on various initiatives, such as a public equity offering of at least $200 million, which Fitch believes are important in the effort to improve statutory capital. Fitch also expects continuation of the progress the company has made in improving operating performance in its business lines. Fitch has affirmed these ratings with a Negative Outlook and removed the ratings from Rating Watch Negative: Conseco, Inc. -- Issuer Default Rating at 'B+'; -- Senior secured bank credit facility at 'B+/RR4'; -- Senior unsecured debt at 'B-/RR6'. Bankers Life and Casualty Company -- Insurer Financial Strength at 'BBB-'. Conseco Life Insurance Company Bankers Conseco Life Insurance Company Conseco Insurance Company Conseco Health Insurance Company Colonial Penn Life Insurance Company Washington National Insurance Company -- IFS at 'BB+'. COYOTES HOCKEY: Glendale Spent $2.1MM on Outside Consultants ------------------------------------------------------------ The city of Glendale has spent about $2.1 million on outside consultants to keep the National Hockey League's Phoenix Coyotes from relocating, public records show. The Associated Press reports that Glendale has used the money on two legal firms, three sports-business experts, and a media spokesperson in trying to protect the city's investment in Jobing.com Arena. Glendale officials said that the city could use lose $500 million if Phoenix Coyotes left the city, as the city depends on the sales taxes from shops and restaurants in the district as well as on fees that the team pays to play at the arena, to pay off the $180 million that Glendale spent on the facility, The AP states. Dewey Ranch Hockey LLC, Arena Management Group, LLC, Coyotes Holdings, LLC, and Coyotes Hockey, LLC -- owners and affiliates of the Phoenix Coyotes National Hockey League team -- filed for Chapter 11 protection (Bankr. D. Ariz. Case No. 09-09488) on May 5, 2009. The Debtors are represented by Thomas J. Salerno, Esq., at Squire, Sanders & Dempsey, LLP, in Phoenix, and estimate their assets and liabilities are between $100 million and $500 million. COYOTES HOCKEY: Hearing on Team Sale Set for October 26 ------------------------------------------------------- Carrie Watters at The Arizona Republic reports that Phoenix Coyotes will discuss what it will take to sell the team to the National Hockey League and get it out of bankruptcy during a hearing set for October 26. Lawyers of Phoenix Coyotes' unsecured creditors have been working with the NHL to revise its bid so that the team can be sold and creditors paid. Court documents say that the hearing would "ensure that any renewed NHL offer will satisfy the court's concerns." Dewey Ranch Hockey LLC, Arena Management Group, LLC, Coyotes Holdings, LLC, and Coyotes Hockey, LLC -- owners and affiliates of the Phoenix Coyotes National Hockey League team -- filed for Chapter 11 protection (Bankr. D. Ariz. Case No. 09-09488) on May 5, 2009. The Debtors are represented by Thomas J. Salerno, Esq., at Squire, Sanders & Dempsey, LLP, in Phoenix, and estimate their assets and liabilities are between $100 million and $500 million. CROCS INC: PNC Loan Amendment Decreases Net Worth Requirement ------------------------------------------------------------- Crocs, Inc., its subsidiaries, Crocs Retail, Inc., Crocs Online, Inc., Ocean Minded, Inc., Jibbitz, LLC and Bite, Inc., and PNC Bank, National Association, on October 14, 2009, entered into First Amendment to Revolving Credit and Security Agreement to clarify the intentions and understandings of the parties with respect to the tangible net worth financial covenant contained in the Revolving Credit and Security Agreement dated September 25, 2009. The Amendment decreases the Borrowers' minimum tangible net worth requirement from $266 million to $205 million, measured at the end of each fiscal quarter, commencing with the fiscal quarter ending December 31, 2009. A full-text copy of the First Amendment to Revolving Credit and Security Agreement is available at no charge at: http://ResearchArchives.com/t/s?4721 About Crocs Inc. Based in Niwot, Colorado, Crocs Inc. (NASDAQ: CROX) designs and sells a broad offering of footwear, apparel, gear and accessories that utilize proprietary closed cell-resin, called Croslite. The Company sells Crocs-branded products throughout the U.S. and in 128 countries, through domestic and international retailers and distributors and directly to end-user consumers through its webstores, Company-operated retail stores, outlets and kiosks. Going Concern Doubt Deloitte & Touche LLP, in Denver, Colorado, has raised substantial doubt about Croc's ability to continue as a going concern. As reported by the Troubled Company Reporter on August 11, 2009, the Company continues to re-evaluate its operating plans for 2009 and beyond, and has undertaken certain restructuring and right- sizing activities to address the potential for continued decreases in revenues. The Company's ability to continue as a going concern is dependent upon achieving a cost structure which supports the levels of revenues the Company is able to achieve. There can be no assurance that any actions taken by the Company will result in a return to profitability. As of June 30, 2009, the Company had $437.5 million in total assets; and $175.6 million in total liabilities; resulting in $261.9 million in stockholders' equity. The Company's cash and cash equivalents increased 50% to $77.5 million at June 30, 2009, from $51.7 million as of December 31, 2008. DEL MONTE: Tender Offer for 8-5/8% Notes Closes ----------------------------------------------- Del Monte Foods Company previously announced that its wholly owned subsidiary Del Monte Corporation had commenced a cash tender offer for any and all of its 8-5/8% Senior Subordinated Notes due 2012, of which $450 million principal amount were outstanding at such time. In conjunction with the Tender Offer, Del Monte also solicited consents to adopt proposed amendments to the indenture under which the Notes were issued, dated as of December 20, 2002, that would eliminate substantially all restrictive covenants and certain event of default provisions contained in the Indenture. On October 1, 2009, the Company announced that as of 5:00 pm, New York City time, on September 30, 2009, $438,748,000 aggregate principal amount of the Notes had been validly tendered and not withdrawn, which represented approximately 97.5% of the outstanding aggregate principal amount of the Notes. Del Monte accepted for purchase and payment all of such tendered Notes. The Company announced October 16 that an additional $1,785,000 aggregate principal amount of Notes, or approximately 0.4% of the original outstanding aggregate principal amount of the Notes, were validly tendered and not withdrawn after the Consent Time but at or prior to 11:59 p.m., New York City time, on October 15, 2009, pursuant to the Tender Offer. The Expiration Date marks the expiration of the Tender Offer. Del Monte accepted for purchase and payment all of such additional Notes. The remaining $9,467,000 principal amount of the Notes that were not tendered and purchased pursuant to the Tender Offer currently remain outstanding and the holders thereof are subject to the terms of the Indenture, as amended by the terms of the Second Supplemental Indenture entered into on September 30, 2009 and effective October 1, 2009. BofA Merrill Lynch and Barclays Capital served as joint Dealer Managers and Solicitation Agents and Global Bondholder Services Corporation served as Information Agent and Depositary for the Offer. About Del Monte Foods Based in San Francisco, California, Del Monte Foods Company (NYSE: DLM) -- http://www.delmonte.com/-- is one of the country's largest and most well-known producers, distributors and marketers of premium quality, branded food and pet products for the U.S. retail market, generating approximately $3.6 billion in net sales in fiscal 2009. Its brands including Del Monte(R), S&W(R), Contadina(R), College Inn(R), Meow Mix(R), Kibbles `n Bits(R), 9Lives(R), Milk-Bone(R), Pup-Peroni(R), Meaty Bone(R), Snausages(R) and Pounce(R), Del Monte products are found in eight out of ten U.S. households. The Company also produces, distributes and markets private label food and pet products. Del Monte Foods carries 'BB-' issuer credit ratings from Standard & Poor's and a 'BB' long term issuer default rating from Fitch. DELTA AIR LINES: Resumes Talks with Japan Airlines -------------------------------------------------- Japan Airlines Corp. is likely to incur a group operating loss of around JPY200 billion in fiscal 2009, much bigger than earlier projected operating loss of 59 billion yen, Kyodo News reports. The news agency, citing sources close to the matter, says the latest forecast has been presented to JAL's main creditors by a task force of corporate turnaround experts recently launched by the government to evaluate the airline's assets. According to Kyodo, the sources said the swelling loss expected for the year through March 31 is due to increases in spending needed for downsizing JAL's corporate structure and workforce, in addition to sluggish revenues from its operations. Kyodo says JAL may also consider selling JAL Hotels Co., a subsidiary which runs about 60 hotels in Japan and abroad, and closing a total of 27 offices globally over the next two years. Talks with Delta, AMR Resumed Japan Airlines resumed talks with Delta Air Lines Inc. and AMR Corp.'s American Airlines over a possible capital alliance, Bloomberg News reports. Executives from the two U.S. carriers visited Tokyo in the last two weeks and may return this month, Bloomberg discloses citing three people familiar with the matter, who declined to be identified because the talks aren't public. According to Bloomberg, the carrier will also release a revised restructuring plan, drawn up with a state-appointed panel, by month's end. The Troubled Company Reporter-Asia Pacific reported on October 7, 2009, that Japan Airlines was planning to put on hold alliance talks held separately with Delta Air Lines and AMR Corp's American Airlines. JAL has decided to focus first on putting together a restructuring plan with the government task force that is overseeing the airline's revival. As reported by the TCR on Sept. 15, 2009, AMR Corp. and Delta Air are reportedly in separate talks with Japan Airlines to forge an expansive joint venture with the carrier. The Wall Street Journal said that American Airlines would also consider taking a minority stake in JAL, although any such investment would likely be capped at hundreds of millions of dollars. Delta is also negotiating to acquire a minority stake of around US$300 million in JAL. The Journal relates that Delta wants JAL to join its rival SkyTeam alliance. Restructuring Plan As reported in the TCR-Asia Pacific on Sept., 2009, Japan Today said that a team of government-appointed corporate turnaround experts was set up on September 25 to create a restructuring plan for struggling Japan Airlines. The move effectively gives JAL two more months to review options after transport minister Seiji Maehara questioned the feasibility of its original plan. The team, which will make a recommendation to the transport minister by late October or early November, will be led by Shinjiro Takagi, who served as chairman of the decision-making panel of the now-defunct Industrial Revitalization Corp. of Japan, the body which assisted heavily indebted but otherwise viable firms from 2003 to 2007. The team will take charge of due diligence on JAL's assets and will scrutinize its business improvement plan to offer advice for the future direction of the airline, according to Japan Today. About Japan Airlines Japan Airlines Corporation -- http://www.jal.co.jp/-- is a Japan- based holding company that is active in five business segments through its 225 subsidiaries and 82 associated companies. The Air Transportation segment is engaged in the operation of passenger and cargo planes. The Air Transportation-Related segment is engaged in the transportation of passengers and cargoes, the preparation of in-flight food catering, the maintenance of aircraft and land equipment, as well as the fueling business. The Travel Planning and Marketing segment is involved in the planning and sale of travel packages. The Card and Leasing segment is engaged in the provision of finance, cards and leasing services. The Others segment is involved in businesses related to hotels, resorts, logistics, wholesale, retail, real estate, printing, construction, manpower dispatch, as well as information and communication. The Company has numerous global operating locations. JAL International Co. Ltd. is a wholly owned operating subsidiary of Japan Airlines Corporation. * * * As reported in the Troubled Company Reporter-Asia Pacific on February 11, 2009, Moody's Investors Service changed the outlook on the Ba3 long-term debt rating and issuer rating of Japan Airlines International Co. Ltd. to negative from positive. The outlook change reflects Moody's view that JALI's profitability is likely to remain pressured amid the recent sharp decline in airline passenger demand. Japan Airlines continues to carry Standard & Poor's Ratings 'B+' LT Foreign & Local Issuer Credit. The outlook is positive. About Delta Air Lines With its acquisition of Northwest Airlines, Atlanta, Georgia-based Delta Air Lines (NYSE: DAL) -- http://www.delta.com/or http://www.nwa.com/-- became the world's largest airline following merger with Northwest Airlines in 2008. From its hubs in Atlanta, Cincinnati, Detroit, Memphis, Minneapolis-St. Paul, New York-JFK, Salt Lake City and Tokyo-Narita, Delta, its Northwest subsidiary and Delta Connection carriers offer service to more than 376 destinations worldwide in 66 countries and serves more than 170 million passengers each year. The merger closed on October 29, 2008. Northwest and 12 affiliates filed for Chapter 11 protection on September 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930). On May 21, 2007, the Court confirmed the Northwest Debtors' amended plan. That amended plan took effect May 31, 2007. Delta and 18 affiliates filed for Chapter 11 protection on September 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923). Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represented the Delta Debtors in their restructuring efforts. On April 25, 2007, the Court confirmed the Delta Debtors' plan. That plan became effective on April 30, 2007. (Bankruptcy Creditors Service Inc. publishes Delta Air Lines Bankruptcy News, http://bankrupt.com/newsstand/or 215/945-7000). * * * Delta Air Lines has $44,480,000,000 in assets against total debts of $43,500,000,000 in debts as of June 30, 2009. Delta Air Lines and Northwest Airlines carry a 'B/Negative/--' corporate ratings from Standard & Poor's. They also continue to carry 'B2' corporate family ratings from Moody's. DOLLAR THRIFTY: Expects 12% Drop in Q3 Vehicle Rental Revenues -------------------------------------------------------------- Dollar Thrifty Automotive Group, Inc., said based on preliminary results, it expects vehicle rental revenues for the third quarter of 2009 to decrease approximately 12% compared to the third quarter of 2008, as an approximate 12% improvement in pricing on a year-over-year basis did not fully mitigate an approximate 21% decline in transaction days. Location closures represented approximately 4% of the decline in transaction days, while the remaining decline resulted from lower demand for Dollar Thrifty's services at its current price point and a planned reduction in its fleet capacity as part of the Company's focus on return on assets. "Optimizing the mix between pricing and volume is a primary focus area for the Company in 2009. I am pleased to report for the second consecutive quarter that the Company achieved a double- digit increase in rate per day compared to the prior year period, and also achieved its revenue targets for the quarter. One other highlight was that for the month of September, rental revenues were down only 3% compared to September 2008, indicating we may have seen the worst of the rental revenue declines for this business cycle," said Scott L. Thompson, Chief Executive Officer and President. Dollar Thrifty said the data relating to the third quarter results are preliminary estimates based on information available at this time, and will be updated in conjunction with the Company's third quarter earnings release. About Dollar Thrifty Automotive Group Dollar Thrifty Automotive Group, Inc. -- http://www.dtag.com/, http://www.dollar.com/and http://www.thrifty.com/-- is headquartered in Tulsa, Oklahoma. The Company's brands, Dollar Rent A Car and Thrifty Car Rental, serve value-conscious travelers in over 70 countries. Dollar and Thrifty have over 600 corporate and franchised locations in the United States and Canada, operating in virtually all of the top U.S. and Canadian airport markets. The Company's approximately 6,400 employees are located mainly in North America, but global service capabilities exist through an expanding international franchise network. As of June 30, 2009, the Company had $2.58 billion in total assets and $2.35 billion in total liabilities. * * * The TCR said April 6, 2009, that Standard & Poor's Ratings Services lowered its ratings on DTAG, including the long-term corporate credit rating to 'CCC' from 'CCC+'. The outlook is negative. DRYSHIPS INC: Appoints Ziad Nakhleh as Chief Financial Officer -------------------------------------------------------------- DryShips Inc. has named Ziad Nakhleh as the Company's Chief Financial Officer effective November 1, 2009. The position was previously occupied on an interim basis by Mr. George Economou, Chairman and Chief Executive Officer. Mr. Nakhleh, 37, has over 12 years of finance experience. From January 2005 to September 2008, he served as Chief Financial Officer of Aegean Marine Petroleum Network Inc., a publicly traded marine fuels logistics company listed on the New York Stock Exchange, where he led the company's $200 million IPO in December 2006. During his tenure at Aegean, Mr. Nakhleh as well as managing the corporate finance and accounting aspects of the company, was extensively involved in maintaining investor confidence and contributing to the expansion of the company by way of corporate and asset acquisitions. For the past year, he was engaged in a consulting capacity to various companies in the shipping and marine fuels industries. Prior to his time with Aegean, Mr Nakhleh was employed at Ernst & Young and Arthur Andersen in Athens. Mr. Nakhleh is a graduate of the University of Richmond in Virginia and is a member of the American Institute of Certified Public Accountants. George Economou, Chairman and Chief Executive Officer, commented: "We are pleased to have Ziad join our management team. He is a welcome addition to Dryships and his capital and debt markets experience will be valuable going forward. We now have an experienced and talented senior management team in place to help manage and grow DryShips". As reported by the Troubled Company Reporter, DryShips on October 13 said that it has signed agreements with Nord LB and West LB on waiver terms for $116 million and $67 million respectively of our outstanding debt. Mr. Economou said, "I am pleased to report another set of waivers from our banks who remain extremely supportive of DryShips. We are now left with $187.5 million of outstanding debt, where constructive discussions with the banks continue for waivers and we expect to have those concluded shortly." About DryShips Inc. DryShips Inc. -- http://www.dryships.com/-- based in Athens, Greece, is an owner and operator of drybulk carriers and offshore oil deep water drilling that operate worldwide. DryShips owns a fleet of 41 drybulk carriers comprising 7 Capesize, 30 Panamax, 2 Supramax and 2 newbuilding Drybulk vessels with a combined deadweight tonnage of over 3.7 million tons, 2 ultra deep water semisubmersible drilling rigs and 4 ultra deep water newbuilding drillships. DryShips Inc.'s common stock is listed on the NASDAQ Global Market where trades under the symbol "DRYS". DRYSHIPS INC: To Release Quarterly Results on October 26 -------------------------------------------------------- DryShips Inc. will release its results for the third quarter and nine months ended September 30, 2009, after the market closes in New York on Monday, October 26. DryShips' management team will host a conference call the following day on Tuesday, October 27, 2009, at 8:30 a.m. Eastern Daylight Time to discuss the Company's financial results. Conference Call details: Participants should dial into the call 10 minutes before the scheduled time using the following numbers: 1(866) 819-7111 (from the US), 0(800) 953-0329 (from the UK) or +(44) (0) 1452 542 301 (from outside the US). Please quote "DryShips". A replay of the conference call will be available until October 29, 2009. The United States replay number is 1(866) 247- 4222; from the UK 0(800) 953-1533; the standard international replay number is (+44) (0) 1452 550 000 and the access code required for the replay is: 2133051# Slides and audio webcast: There will also be a simultaneous live webcast over the Internet, through the DryShips Web site. Participants to the live webcast should register on the website approximately 10 minutes prior to the start of the webcast. As reported by the Troubled Company Reporter, DryShips on October 13 said that it has signed agreements with Nord LB and West LB on waiver terms for $116 million and $67 million respectively of our outstanding debt. Mr. Economou said, "I am pleased to report another set of waivers from our banks who remain extremely supportive of DryShips. We are now left with $187.5 million of outstanding debt, where constructive discussions with the banks continue for waivers and we expect to have those concluded shortly." About DryShips Inc. DryShips Inc. -- http://www.dryships.com/-- based in Athens, Greece, is an owner and operator of drybulk carriers and offshore oil deep water drilling that operate worldwide. DryShips owns a fleet of 41 drybulk carriers comprising 7 Capesize, 30 Panamax, 2 Supramax and 2 newbuilding Drybulk vessels with a combined deadweight tonnage of over 3.7 million tons, 2 ultra deep water semisubmersible drilling rigs and 4 ultra deep water newbuilding drillships. DryShips Inc.'s common stock is listed on the NASDAQ Global Market where trades under the symbol "DRYS". ELECTROGLAS INC: Access to DIP Financing Expires October 30 ----------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware, in its first amended final order, extended until Oct. 30, 2009, Electroglas, Inc.'s access to the $2,000,000 of postpetition financing from QVT Fund LP, Quintessence Fund L.P., Peninsula Master Fund Ltd. and Peninsula Technology Fund LP. As reported in the Troubled Company Reporter on July 29, 2009, the DIP facility will be secured by senior first-priority liens upon all prepetition and post-petition property of the Debtors. The DIP liens will be subject only to the first prepetition liens of Comerica Bank and the carve-out for professional fees, U.S. Trustee fees, and Bankruptcy Court fees. The DIP lenders are also granted superpriority claims with priority over all administration expenses, other than superpriority claims granted to Comerica and the Carve-Out. Under the DIP agreement, the interest rate will be 12% p.a. and default interest will be 14% p.a. The Debtors also received authorization to use cash collateral of Comerica and the Note Parties to fund operating expenses and fund professional and other fees associated with the sale of substantially all of the Debtors' assets. The Note Parties refer to the holders of the Debtors' 6.25% notes due 2027, and Bank of New York Mellon Trust Company, N.A., as trustee and collateral agent for the noteholders. The Debtors' access to the DIP financing will expire on the earliest to occur of (a) Oct. 30, 2009; (b) the closing of a sale of the Debtors' assets, (c) the effective date of a plan of reorganization for any of the Debtors confirmed pursuant to Section 1129 of the Bankruptcy Code, or (d) the date that is the commitment termination date (as defined in the DIP Credit Agreement) and (e) the occurrence of a DIP Event of a Default and/or Cash Collateral Event of Default. As adequate protection for any diminution in the value of its interest in the prepetition collateral, including cash collateral, Comerica is granted replacement liens upon all present and after- acquired property of the Debtors, and superpriority claims, senior in all respects to the DIP liens and superpriority claims granted to the DIP lenders and the replacement liens and superpriority claims granted to the note parties, subject and subordinate only to the Carve-Out. About Electroglas, Inc San Jose, California-based Electroglas, Inc., supplies semiconductor manufacturing test equipment and software to the global semiconductor industry, and have been in the semiconductor equipment business for more than 40 years. The Debtors' other major source of revenue comes from their business of designing, manufacturing, selling and supporting motion control systems for advanced technologies. The Company and Electroglas International, Inc., filed for Chapter 11 on July 9, 2009 (Bankr. D. Del. Lead Case No. 09-12416). David B. Stratton, Esq., and James C. Carignan, Esq., at Pepper Hamilton LLP represent the debtors in their restructuring efforts. No official committee of unsecured creditors has been appointed in the Chapter 11 cases. The Debtors listed total assets of $19,625,000 and total debts of $31,542,000. EPIX PHARMACEUTICALS: FDA Approves Physician-Sponsored IND ---------------------------------------------------------- The U.S. Food and Drug Administration has approved a Physician- Sponsored IND and continuation of the fourth 6-month open label extension of PRX-03140, a novel 5HT4 partial agonist for the potential treatment of Alzheimer's Disease. The patient was enrolled initially in a two week Phase 2a study in August 2007 where she received 100 mg per day of PRX-03140 in combination with her normal daily dose of Aricept((R))(10 mg). Based on the marked progress during the original two week study, the patient's daughter sought continued compassionate use of PRX-03140 for her mother and a protocol was submitted to the FDA and approved. The progress seen in the first 2-week study has continued during the past two years (19 months of dosing) and four FDA approved 6-month open label extensions. The latest open label extension will be administered under a new Physician-Sponsored IND under the supervision of Dr. Lucy Hornstein. "When I was approached by the patient's daughter to continue the compassionate use therapy of PRX-03140 for her mother, I was compelled by the progress her mother had experienced and the overall apparent safety of the drug," notes Dr. Hornstein. On July 20, 2009, EPIX Pharmaceuticals, Inc., entered into an Assignment for the Benefit of Creditors in accordance with Massachusetts law. The purpose of the Assignment is to conclude the Company's operations and provide for an orderly liquidation of its assets. The Assignment is a common law business liquidation mechanism under Massachusetts law that is an alternative to a formal bankruptcy proceeding. Under the terms of the Assignment, the Company transferred all of its assets to an assignee for orderly liquidation and distribution of the proceeds to the Company's creditors. The designated assignee for the Company is Joseph F. Finn, Jr. at Finn, Warnke & Gayton, 167 Worcester Street, Suite 201, Wellesley Hills, MA 02481. The PRX-03140 program will be sold at auction on Wednesday, October 21 at 3 pm EDT. About Joseph F. Finn, Jr., C.P.A. Joseph F. Finn, Jr., C.P.A., is the founding partner of the firm, Finn, Warnke & Gayton, Certified Public Accountants of Wellesley Hills, Massachusetts. He works primarily in the area of management consulting for distressed enterprises, bankruptcy accounting and related matters, such as assignee for the benefit of creditors and liquidating agent for a corporation. He has been involved in a number of loan workouts and bankruptcy cases for 35 years. His most recent Assignments for the Benefit of Creditors in the biotech field include Spherics, Inc., ActivBiotics, Inc., and Prospect Therapeutics, Inc. About EPIX Pharmaceuticals EPIX Pharmaceuticals, Inc. (NASDAQ:EPIX), is a biopharmaceutical company focused on discovering and developing novel therapeutics through the use of its proprietary and highly efficient in silico drug discovery platform. The company has a pipeline of internally-discovered drug candidates currently in clinical development to treat diseases of the central nervous system -- see http://www.trialforAD.com/-- and lung conditions. EPIX also has collaborations with leading organizations, including GlaxoSmithKline, Amgen and Cystic Fibrosis Foundation Therapeutics. As reported by the Troubled Company Reporter, EPIX on July 20, 2009, entered into an Assignment for the Benefit of Creditors in accordance with Massachusetts law. Following the Company's unsuccessful efforts to effect a strategic alternative, including a financing, recapitalization, sale or disposition of corporate assets, merger or strategic business combination, the Company's Board of Directors determined it was in the best interests of the enterprise to cease the Company's operations and to provide for an orderly liquidation of its assets by entering into the Assignment. ERICKSON RETIREMENT: Files for Ch 11; Redwood Agrees to Buy Assets ------------------------------------------------------------------ Erickson Retirement Communities LLC has filed for Chapter 11 bankruptcy protection, listing more than $1 billion in assets and more than $1 billion in liabilities owed to 254 creditors, including Wells Fargo & Co. and the Garnet Valley School District. According to Anton Troianovski at The Wall Street Journal, Erickson Retirement said that it reached an agreement to sell its assets to Redwood Capital Investments LLC, an investment company controlled by a Baltimore staffing-services entrepreneur. The Journal states that the terms of Redwood Capital's bid weren't disclosed but Erickson Retirement said that the lenders support the agreement, which still requires bankruptcy court approval. The report says that other bidders could still emerge. The Journal states that Erickson Retirement's two Chicago-area communities warned bondholders in June that they may need to seek bankruptcy protection and in July, the Company lost an Ohio development to foreclosure. The Journal relates that Erickson Retirement is faced with a heavy debt load taken on during a boom-time expansion, as continuing- care retirement communities like those built by the Company were popular development projects during the credit boom. With the rapid expansion in recent years, the Company is left vulnerable to the credit crunch and the housing bust that followed, The Journal says. The Journal notes that people have been moving into new Erickson communities more slowly than projected. A Senate committee has asked the Government Accountability Office to examine whether the communities are sufficiently regulated, The Journal reports. Erickson Retirement Communities LLC is one of the biggest developers of retirement communities. Erickson Retirement helped pioneer "continuing-care retirement communities," which offer independent living, assisted living, and skilled nursing care on the same campus. Erickson Retirement develops the communities and leases them to not-for-profit corporations, which enter into a management contract with Erickson and raise tax-exempt bonds to purchase the real estate from the company. Erickson Retirement manages 19 retirement communities that are home to 23,000 residents. ESCADA AG: Insolvency Court Appoints Creditors' Committee --------------------------------------------------------- Pursuant to a notice addressed to holders of 7.5% Escada AG Senior Notes due 2012, the Company said that the Regional Court of Munich in Germany appointed a preliminary committee of creditors in Escada AG's Insolvency Proceeding, according to a Bloomberg News report dated October 13, 2009. The Preliminary Creditors' Committee, which the German Insolvency Court appointed pursuant to a decree dated August 27, 2009, consists of: (1) a member of the works council of the Escada AG, as issuer to an Indenture dated March 23, 2005; (2) an employee of the Works Agency Munich; and (3) a member of the board of one of the Issuer's suppliers or service providers. By further decree dated September 29, 2009, the German Insolvency Court appointed these two additional members to the Preliminary Creditors' Committee. They are: (1) HypoVereinsbank AG, Unterfohring; and (2) the lawyer, Dr. Bernd Meyer-Lowy, with address at Kirkland & Ellis International LLP, in Munich. The March 2005 Indenture, which relates to the EUR200,000,000 7.5% Notes due 2012 issued by Escada AG, as amended, was reached among these parties: * The Bank of New York Mellon, successor-in-interest to The Bank of New York, as indenture trustee, registrar, transfer agent, and principal paying agent; * Escada (USA) Inc., ESCADA (U.K.) Ltd., Escada (Asia) Ltd., Primera Holding GmbH, Primera GmbH & Co. KG, Apriori Textilvertriebs GmbH, Cavita Fashion GmbH, Primera Retail GmbH, Laurel GmbH and Primera (Far East) Limited, as initial Subsidiary Guarantors; and * The Indenture Trustee and BNY Financial Services PLC, as Irish Paying Agent. The German Insolvency Court stated that it will become necessary within the preliminary Insolvency Proceedings to take, or prepare for taking, important decisions regarding the future business of Escada AG. The appointment of the Preliminary Creditors' Committee will serve the purpose to let the creditors participate in such decisions to be taken or to be prepared. As of October 15, 2009, The Bank of New York Mellon, as Trustee to the Indenture, has not been appointed to the Preliminary Creditors' Committee. BoNY Mellon can be appointed to the Committee at the German Insolvency Court's discretion. Under the German Insolvency Code, members of the Preliminary Creditors' Committee will (i) support and supervise the Preliminary Insolvency administrator's execution of office, and (ii) keep themselves informed of the course of business, and (iii) inspect the books and records and examine the transaction of funds and money holdings. The members of a the Preliminary Creditors' Committee will be liable for damages to all creditors with a right to separate satisfaction, and all insolvency creditors if they voluntarily or negligently violate their duties. The German Insolvency Court may appoint a creditors' committee "after opening of (final) insolvency proceedings but before the first creditors' assembly" is held. The German Insolvency Code provides that after opening of Final Insolvency Proceedings, the Creditors' Assembly will decide whether to establish a creditors' committee. The Creditors' Assembly may specifically (i) vote for the dismissal of members appointed by the Insolvency Court, and (ii) appoint other or additional members to the Committee. While the German Insolvency Code does not explicitly provide the possibility to appoint a Preliminary Creditors' Committee within Preliminary Insolvency Proceedings, several insolvency courts -- among them the German Insolvency Court in the preliminary insolvency proceedings over the assets of Escada AG -- have appointed preliminary creditors' committees before the opening of final insolvency proceedings. Accordingly, the provisions of the German Insolvency Code regarding the creditors' committee should apply mutatis mutandis, the Notice specified, according to Bloomberg. About ESCADA AG The ESCADA Group -- http://www.escada.com/-- is an international fashion group for women's apparel and accessories, which is active on the international luxury goods market. It has pursued a course of steady expansion since its founding in 1976 by Margaretha and Wolfgang Ley and today has 182 own shops and 225 franchise shops/corners in more than 60 countries. As of August 10, 2009, the Escada Group operated 176 owned stores and so-called shop in shops, of which 26 owned stores are located in the United States and operated by Escada (USA) Inc. and 2 stores are planned to be opened in the United States before year end. Escada Group products are also sold in 163 stores worldwide which are operated by franchisees. Escada Group had total assets of EUR322.2 million against total liabilities of 338.9 million as of April 30, 2009. ESCADA AG filed of an insolvency petition in Munich, Germany, on August 13, 2009. The competent Municipal Court of Munich has appointed Dr. jur. Christian Gerloff as preliminary insolvency administrator. Wholly owned subsidiary Escada (USA) Inc. filed for Chapter 11 on August 14, 2009 (Bankr. S.D.N.Y. Case No. 09-15008). O'Melveny & Myers LLP has been tapped as bankruptcy counsel. Kurtzman Carson Consultants serves as claims and notice agent. Judge Stuart M. Bernstein handles the case. Escada US listed US$50 million to US$100 million in assets and US$100 million to US$500 million in debts in its petition. Bankruptcy Creditors' Service, Inc., publishes Escada USA Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Escada USA, and the insolvency proceedings of ESCADA AG and its units. (http://bankrupt.com/newsstand/or 215/945-7000) ESCADA AG: More Than 10 Investors Express Interest for Assets ------------------------------------------------------------- Escada AG has drawn interest from "some 10 to 20 investors from all over the world," consisting of fashion companies, financial investors and wealthy families, each of which have handed in their non-binding offers to Insolvency Administrator Dr. Christian Gerloff, Reuters reports, citing an unnamed source. Escada AG said in September 2009, that it is seeking a buyer "for the whole company, including its Escada USA unit." The potential investors' final offers are due by the end of October 2009, as Escada AG plans to present its new owner to the public at the beginning of November. The best proposal, not necessarily the highest bid, could secure Escada AG's future, the source told Reuters. As previously reported, Escada AG has gained interest from potential buyers from Germany and abroad, including German billionaires and Escada AG shareholders Wolfgang and Michael Herz, private equity firms Change Capital LLP, Vestar Europe and Sun Capital Partners Inc., LVMH Moe Hennessy Louis Vuitton SA and PPR SA. Notably, Nickolaus Becker, former chairman of EM.TV AG, is the only party to have publicly informed Dr. Gerloff of his interest in the Escada assets. In a separate report, shareholder Rustam Aksenenko sold 15,000 shares of stock at Escada AG at a price of EUR0.67 per share, Reuters says. In September 2009, the Herz Brothers also trimmed their holdings in the Company to below 20% from close to 25%. Escada AG is rushing its buyer hunt. It is aiming to close a deal by early November 2009, because its financing will run out by December at the latest. The Company "needs about EUR30 million, or $44.33 million, in fresh capital," Reuters specifies. About ESCADA AG The ESCADA Group -- http://www.escada.com/-- is an international fashion group for women's apparel and accessories, which is active on the international luxury goods market. It has pursued a course of steady expansion since its founding in 1976 by Margaretha and Wolfgang Ley and today has 182 own shops and 225 franchise shops/corners in more than 60 countries. As of August 10, 2009, the Escada Group operated 176 owned stores and so-called shop in shops, of which 26 owned stores are located in the United States and operated by Escada (USA) Inc. and 2 stores are planned to be opened in the United States before year end. Escada Group products are also sold in 163 stores worldwide which are operated by franchisees. Escada Group had total assets of EUR322.2 million against total liabilities of 338.9 million as of April 30, 2009. ESCADA AG filed of an insolvency petition in Munich, Germany, on August 13, 2009. The competent Municipal Court of Munich has appointed Dr. jur. Christian Gerloff as preliminary insolvency administrator. Wholly owned subsidiary Escada (USA) Inc. filed for Chapter 11 on August 14, 2009 (Bankr. S.D.N.Y. Case No. 09-15008). O'Melveny & Myers LLP has been tapped as bankruptcy counsel. Kurtzman Carson Consultants serves as claims and notice agent. Judge Stuart M. Bernstein handles the case. Escada US listed US$50 million to US$100 million in assets and US$100 million to US$500 million in debts in its petition. Bankruptcy Creditors' Service, Inc., publishes Escada USA Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Escada USA, and the insolvency proceedings of ESCADA AG and its units. (http://bankrupt.com/newsstand/or 215/945-7000) ESCADA AG: US Unit's Schedules of Assets & Liabilities ------------------------------------------------------ A. Real Property $0 B. Personal Property B.1 Cash on hand Register Funds - Central Valley, NY, et al. 6,400 Register Funds - Beverly Hills, CA, et al. 4,800 Register Funds - South Coast, CA, et al. 4,200 Register Funds - Boston, MA, et al. 2,700 Register Funds - Manchester, VT, et al. 2,400 Petty Cash - New York Corporate Office 2,212 Register Funds - Manhasset, NY, et al. 2,000 Register Funds - Palm Beach, FL 1,100 Register Funds - Phoenix, AZ 700 B.2 Bank Accounts Corporate Bank Account - JPMorgan Chase 3,959,338 Corporate Bank Account - PNC Bank 41,144 Others 179,795 B.3 Security Deposit American Express Collateral 200,000 Bal Harbour Shops, Ltd. 140,000 560 Broadway Association 72,538 GGP Ala Moana LLC 74,097 Others 60,428 B.4 Household goods 0 B.5 Book, artwork and collectibles 0 B.6 Wearing apparel 0 B.7 Furs and jewelry 0 B.8 Firearms and other equipment 0 B.9 Insurance Policies Massachusetts Mutual Life 158,350 Massachusetts Mutual Life 69,000 B.10 Annuities 0 B.11 Interests in an education IRA 0 B.12 Interests in IRA, ERISA, Keogh, et al. 0 B.13 Stock and Interests Metlife 133,430 B.14 Interests in partnerships & joint venture 0 B.15 Government and corporate bonds 0 B.16 Accounts Receivable Gross Accounts Receivable as of 07/31/09 6,261,844 B.17 Alimony 0 B.18 Other Liquidated Debts Owing Debtor Internal Revenue Service Tax Refund 1,510,696 B.19 Equitable or future interests 0 B.20 Contingent and non-contingent interests 0 B.21 Other Contingent and Unliquidated Claims 0 B.22 Patents 0 B.23 Licenses, franchises & other intangibles 0 B.24 Customer lists or other compilations 0 B.25 Vehicles 0 B.26 Boats, motors and accessories 0 B.27 Aircraft and accessories 0 B.28 Office Equipment 0 B.29 Machinery, equipment and supplies in business Furniture and Fixtures 5,823,094 Leasehold Improvements 4,356,291 Assets Under Construction 3,177,240 Wholesale Shop in Shops 930,039 Others 157,047 B.30 Inventory Inventory as of 07/31/09 23,872,859 B.31 Animals 0 B.32 Crops 0 B.33 Farming equipment and implements 0 B.34 Farm supplies, chemicals and feed 0 B.35 Other Personal Property 0 TOTAL SCHEDULED ASSETS $51,203,746 ========================================================= C. Property Claimed as Exempt $0 D. Creditors Holding Secured Claims 0 E. Creditors Holding Unsecured Priority Claims U.S. Customs and Border Protection 13,711,412 NYC Dept. of Finance 68,275 NY State Dept. of Taxation and Finance 57,422 Texas State Comptroller 28,277 California State Board of Equalization 23,481 Others 309,662 F. Creditors Holding Unsecured Non-priority Claims Bank of New York -- London 285,700,000 Escada AG 37,317,117 Bayerische Hypo-und Vereinsbank -- Luxembourg 18,400,000 Others 5,869,518 TOTAL SCHEDULED LIABILITIES $361,482,165 ========================================================= Escada USA also submitted to the Court a 4-page schedule of the executory contracts and unexpired leases that have not been assumed and assigned as of October 14, 2009. A complete list of the Contracts and Leases is available for free at: http://bankrupt.com/misc/EscadaSAL_Contracts&Leases.pdf The Debtor previously re-filed a request, asking the Court to extend the time by which it may file its schedules of assets and liabilities, schedules of executory contracts and unexpired leases, and statements of financial affairs through October 16, 2009, to "provide for a longer objection period." The Debtor noted that as of the original Schedules Filing Deadline, which expired on October 13, 2009, its finance and legal departments' limited personnel were unable to complete the Schedules and Statements due to their day-to-day duties that significantly increased due to the Chapter 11 case. About ESCADA AG The ESCADA Group -- http://www.escada.com/-- is an international fashion group for women's apparel and accessories, which is active on the international luxury goods market. It has pursued a course of steady expansion since its founding in 1976 by Margaretha and Wolfgang Ley and today has 182 own shops and 225 franchise shops/corners in more than 60 countries. As of August 10, 2009, the Escada Group operated 176 owned stores and so-called shop in shops, of which 26 owned stores are located in the United States and operated by Escada (USA) Inc. and 2 stores are planned to be opened in the United States before year end. Escada Group products are also sold in 163 stores worldwide which are operated by franchisees. Escada Group had total assets of EUR322.2 million against total liabilities of 338.9 million as of April 30, 2009. ESCADA AG filed of an insolvency petition in Munich, Germany, on August 13, 2009. The competent Municipal Court of Munich has appointed Dr. jur. Christian Gerloff as preliminary insolvency administrator. Wholly owned subsidiary Escada (USA) Inc. filed for Chapter 11 on August 14, 2009 (Bankr. S.D.N.Y. Case No. 09-15008). O'Melveny & Myers LLP has been tapped as bankruptcy counsel. Kurtzman Carson Consultants serves as claims and notice agent. Judge Stuart M. Bernstein handles the case. Escada US listed US$50 million to US$100 million in assets and US$100 million to US$500 million in debts in its petition. Bankruptcy Creditors' Service, Inc., publishes Escada USA Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Escada USA, and the insolvency proceedings of ESCADA AG and its units. (http://bankrupt.com/newsstand/or 215/945-7000) ESCADA AG: US Unit's Statement of Financial Affairs --------------------------------------------------- Christopher D. Marques, chief financial officer, executive vice president and treasurer at Escada (USA) Inc., disclosed that during the two years immediately preceding the Petition Date, the Company generated income from the operation of its business in these amounts: Source Amount ------ ----------- Operating income for the fiscal year ending October 31, 2007 $74,433,000 Operating income for the fiscal year ending October 31, 2008 $54,866,000 Estimated operating income for the calendar year ending as of August 13, 2009 $18,663,300 Escada USA paid or made transfers to various creditors within 90 days prior to the Petition Date, a list of which is available for free at http://bankrupt.com/misc/Escada_SoFa3b.pdf Within one year before the Petition Date, Escada USA also paid amounts to, or for the benefit of, creditors who are or were insiders, consisting of Anthony Lucia, Christian Marques, Escada AG, Lawrence C. DeParis, Scott Klion and William H. Scott. A complete list of the Insider payments, withdrawals or distribution details is available for free at: http://bankrupt.com/misc/Escada_SoFa3c.pdf According to Mr. Marques, the Company was a party to these lawsuits and administrative proceedings litigated in Los Angeles, Hawaii and New York courts or agencies, within one year immediately preceding the Petition Date: Nature of Caption of Suit Proceeding Status --------------- ---------- ------ Coscolluela, Maripaz Workers' Compensation Open Escada (USA) Inc. v. Andrea's Fashions, Inc. Breach of Contract Settled Escada (USA) Inc. v. Utiliquest Negligence Dismissed Kim, Deborah v. Escada (USA) Inc. Personal Injury Open Sakaue, Yumiko v. Escada (USA), Inc. Wrongful Termination Open Sakaue, Yumiko Workers' Compensation Open U.S. Customs and Border Protection Audit Imported Goods Duties Open The Company also gave gifts or made charitable contributions within one year immediately preceding the Petition Date to various institutions, a complete list of which is available for free at http://bankrupt.com/misc/Escada_SoFa7.pdf Escada USA reported losses, aggregating $257,069, in October 2008 and April 2009 due to inventory shrinkage. The Company paid $40,000 to Kurtzman Carson Consultants LLC on August 14, 2009, for consultation and debt consolidation services, according to Mr. Marques. The Company disclosed that it closed its Business Account No. XXXX1203 with Bank of America in Seattle, Washington, on September 8, 2009. Mr. Marques reported that for the period from May 1991 to February 2008, Escada USA occupied and subsequently vacated these premises: * 10 Mulholland Drive, Hasbrouck Heights, NJ 07604 * 621 Route 46, West Hasbrouck Heights, NJ 07604 * 1302 Fifth Avenue, Seattle, WA 98101 * 133 Maiden Lane, San Francisco, CA 94108 * 6121 West Park Boulevard, Plano, TX 75093 * 3111 North St., Helena Highway St., Helena. CA 94574 * 5401 West Oakridge Road, Orlando, FL 32821 * 48650 Seminole Drive, Cabazon CA 92230 As a corporation, Escada USA owned 5% or more of the voting or equity securities of B.E.M. Enterprise within January 1992 and September 2008. Within two years to the Petition Date, Gary Prusakowski and Christian D. Marques kept or supervised the keeping of books of account and records of Escada AG. Messrs. Prusakowski and Marques were in possession of the books and records as of the Petition Date. Sal Nobile & Company, LLP, and PriceWaterhouse Coopers rendered auditing, tax, and tax compliance services to the Company from 1987 to 2009, according to Mr. Marques. The last two sets of inventories taken of Escada USA's property totaled $66,183,598, and were conducted within these periods: Inventory Dates Total Amount of Inventory --------------- ------------------------- October 18 to 31, 2008 $32,598,395 April 18 to May 14, 2009 $33,585,203 RGIS, Dimple Mishra and Antonella Loria were in possession of the Inventories, Mr. Marques disclosed. Escada AG, as shareholder, holds 100% of the shares of Escada USA's Common A, Common B, Preferred A and Preferred B Stocks. Dr. Bruno Salzer, Dr. Werner Lackas, Michael Bornicke, Anthony C. Lucia, William H. Scott, Christian D. Marques and Scott A. Klion do not hold any Escada USA shares. Lawrence C. DeParis, former director, president and chief at Escada, terminated his relationship with Escada USA in September 2008. Markus Schurholz left his post as director of the Company in February 2009. About ESCADA AG The ESCADA Group -- http://www.escada.com/-- is an international fashion group for women's apparel and accessories, which is active on the international luxury goods market. It has pursued a course of steady expansion since its founding in 1976 by Margaretha and Wolfgang Ley and today has 182 own shops and 225 franchise shops/corners in more than 60 countries. As of August 10, 2009, the Escada Group operated 176 owned stores and so-called shop in shops, of which 26 owned stores are located in the United States and operated by Escada (USA) Inc. and 2 stores are planned to be opened in the United States before year end. Escada Group products are also sold in 163 stores worldwide which are operated by franchisees. Escada Group had total assets of EUR322.2 million against total liabilities of 338.9 million as of April 30, 2009. ESCADA AG filed of an insolvency petition in Munich, Germany, on August 13, 2009. The competent Municipal Court of Munich has appointed Dr. jur. Christian Gerloff as preliminary insolvency administrator. Wholly owned subsidiary Escada (USA) Inc. filed for Chapter 11 on August 14, 2009 (Bankr. S.D.N.Y. Case No. 09-15008). O'Melveny & Myers LLP has been tapped as bankruptcy counsel. Kurtzman Carson Consultants serves as claims and notice agent. Judge Stuart M. Bernstein handles the case. Escada US listed US$50 million to US$100 million in assets and US$100 million to US$500 million in debts in its petition. Bankruptcy Creditors' Service, Inc., publishes Escada USA Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Escada USA, and the insolvency proceedings of ESCADA AG and its units. (http://bankrupt.com/newsstand/or 215/945-7000) FAIRCHILD CORP: To Liquidate Assets Under Chapter 11 Plan --------------------------------------------------------- The Fairchild Corporation and its affiliates have filed with the U.S. Bankruptcy Court for the District of Delaware a proposed disclosure statement for their joint plan of liquidation under Chapter 11 of the Bankruptcy Code. Following the Plan's Effective Date, the Liquidating Trust will manage the affairs of the Debtors and will focus its attention on the orderly liquidation of the Estates' remaining assets and the wind-down of the Debtors' businesses. Pursuant to the Plan, each holder of an allowed general unsecured claim, including all claims relating to environmental claims, PBGC unsecured claims, retiree claims and banner claims, will receive its pro rata share of the Distributable Assets, if any, available from the Liquidating Trust after full payment or other satisfaction in accordance with the Plan of all allowed administrative claims, all allowed priority tax claims and all claims in Classes 1 through 4, in accordance with the terms of the Plan. General unsecured claims are impaired under the Plan, and holders thereof may vote on the Plan. On the Plan's Effective Date, all Interests held as of the Record Date will be allowed and the holders of allowed Interests will receive their pro rata share, after giving effect to the relative rights of said Interests with respect to the other Interests of the Debtors under applicable non-bankruptcy law, of any amount of the Distributable Assets that is remaining after full payment or other satisfaction in accordance with the Plan of all allowed administrative claims, all allowed priority tax claims and all claims of Classes 1 through 5. Allowed Interests are impaired under the Plan and in light of the substantial probability that there will be no distribution of Class 6 Interests, holders thereof may not vote and are deemed to reject the Plan. Pursuant to the Plan terms, the PBGC secured claims will be deemed to have been satisfied by the contribution by the Debtors of the amount of $1,956,670 to the Pension Plan which contribution occurred in September, 2009. The PBGC secured claim is not entitled to interest under the Plan. PBGC secured claims are impaired under the Plan. Holders thereof may vote on the Plan. Classification of Claims and Interests The Plan segregates the various claims against and interests in the Debtors into 6 classes: Estimated Class Description Recovery Status ----- ---------------------- --------- ----------------------- 1 PBGC Secured Claim 100% Impaired and entitled to vote 2 Claims Secured by Real 100% Unimpaired, deemed to Property accept the Plan and not entitled to vote 3 Other Secured Claims 100% Unimpaired, deemed to accept the Plan and not entitled to vote 4 Other Priority Claims 100% Unimpaired, deemed to accept the Plan and not entitled to vote 5 General Unsecured Claims [TBD] Impaired and entitled to vote 6 Interests 0% Impaired, deemed to reject the Plan and not entitled to vote A hearing is set for Nov. 9, 2009, at 10:00 a.m., to consider approval of the Debtors' disclosure statement. Objections, if any, are due Nov. 2, 2009, at 4:00 p.m. A full-text copy of the Debtors' disclosure statement is available for free at http://ResearchArchives.com/t/s?4715 A full-text copy of the Debtors' plan of liquidation is available for free at http://ResearchArchives.com/t/s?4716 About Fairchild Corporation Based in McLean, Virginia, The Fairchild Corporation (OTC: FCHD.PK) -- http://www.fairchild.com/-- operated in two distinct divisions, Fairchild Sports and Banner Aerospace Holding Company I, Inc. In addition to these two operating divisions, Fairchild owned several parcels of real estate in Farmingdale, New York, which it had been in the process of selling or developing. Currently, the Debtors' operations are mainly centered on Fairchild Sports, which is a division of the Debtors that concentrate primarily on protective apparel, helmets and technical accessories for motorcyclists. Additionally, Fairchild continues to own several substantial parcels of real estate in Farmingdale, New York, and a number of unrelated investments. Fairchild and 60 of its affiliates filed for Chapter 11 protection on March 18, 2009 (Bankr. D. Del Lead Case No. 09-10899). Steven J. Reisman, Esq., Timothy A. Barnes, Esq., and Veronique A. Hodeau, Esq., at Curtis, Mallet-Prevost, Cold & Mosle LLP, are bankruptcy counsel to the Debtors. Jason M. Madron, Esq., Michael J. Merchant, Esq., and Mark D. Collins, Esq., at Richards, Layton & Finger, P.A., serve as the Debtors' co-counsel. On April 6, 2009, Roberta A. DeAngelis, the Acting U.S. Trustee for Region 3, appointed three creditors to serve on the official committee of unsecured creditors of the Debtors. FAIRPOINT COMMS: Verizon May Urge Windstream to Buy Assets ---------------------------------------------------------- Samuel Greenholtz at Fierce Telecom said that Verizon might urge Windstream to buy FairPoint Communications, Inc., in exchange for future consideration. Mr. Greenholtz stated that FairPoint's collapse might hurt Verizon. According to him, Verizon doesn't want to see the FairPoint deal fail, as there is a huge deal with Frontier that is being reviewed by numerous regulators around the country, who may start to hesitate or at least place all kinds of restrictions or mandates that will lead to the collapse of the sale, halting Verizon's plans to sell off even more residential properties in the future. Mr. Greenholtz added that Windstream may wait until FairPoint files for bankruptcy and gets its debt restructured, but Verizon can make it worth it to Windstream to take on the debt in exchange for getting attractive territory at a song. He said Windstream might not wait for FairPoint to go bankrupt as there may be more than one suitor at that point and the price could even go up significantly. Headquartered in Charlotte, North Carolina, FairPoint Communications, Inc. -- http://www.fairpoint.com/-- 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. FairPoint is traded on the New York Stock Exchange under the symbol FRP. On Sept. 29, Moody's Investors Service repositioned FairPoint Communications, Inc.'s Probability of Default Rating to Ca/LD from Ca to reflect the limited default that has occurred following non- payment of the principal due on its credit facility on Sept. 30, 2009. The "/LD" suffix will be removed after three business days. FAIRPOINT COMMS: Lawmakers to Meet to Discuss Woes -------------------------------------------------- Eric Parry at The Eagle Tribune reports that legislators from the three northern New England states will meet in November to discuss about FairPoint Communications, Inc.'s woes. Meredith Hatfield, New Hampshire's consumer advocate, said that it's unclear what role legislators can play in helping to solve FairPoint's operational and computer problems and that the Company could also file for bankruptcy by the time legislators meet in Concord on November 12. Headquartered in Charlotte, North Carolina, FairPoint Communications, Inc. -- http://www.fairpoint.com/-- 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. FairPoint is traded on the New York Stock Exchange under the symbol FRP. On Sept. 29, Moody's Investors Service repositioned FairPoint Communications, Inc.'s Probability of Default Rating to Ca/LD from Ca to reflect the limited default that has occurred following non- payment of the principal due on its credit facility on Sept. 30, 2009. FATBURGER RESTAURANTS: To File Reorganization Plans in November --------------------------------------------------------------- Courtney Sherwood at Portland Business Journal reports that two subsidiaries of Fog Cutter Capital Group Inc. that operate Fatburger fast-food franchises will file reorganization plans in the first half of November. According to Business Journal, Fog Cutter CEO Andrew Wiederhorn said that the Company will also file long-overdue earnings reports with the U.S. Securities and Exchange Commission by year-end and is planning to unload an eyeglass lens manufacturer and real estate holdings to focus on the fast-food business. The two subsidiaries in bankruptcy are located in Sherman Oaks, California. The cases are In re Fatburger Restaurants of California Inc., 09-13964, and In re Fatburger Restaurants of Nevada Inc., 09-13965, both in U.S. Bankruptcy Court, Central District California (Woodland Hills). Portland, Oregon-based Fog Cutter didn't file bankruptcy. FEDERAL-MOGUL: To Hold 3Q Financial Results Call on October 29 -------------------------------------------------------------- Federal-Mogul Corporation (Nasdaq: FDML) announced that the Company's third quarter 2009 financial results conference call and audio Web cast will be held on Thursday, October 29, 2009, at 9:00 a.m., EDT. To participate in the call: Domestic calls: 888-713-4214 International calls: 617-213-4866 Pass code I.D. # 92799663 To facilitate rapid connection the morning of the call and to pre-register, visit: https://www.theconferencingservice.com/prereg/key.process?key=P6X T3YLHE) The live audio Web cast will be available on October 29, 2009, in the Investor Relations section of the corporate Web site: http://phx.corporate-ir.net/phoenix.zhtml?c=97066&p=irol-irhome An audio replay of the call will be available two hours following the call and will be accessible until November 30, 2009, at: Domestic calls: 888-286-8010 International calls: 617-801-6888 Pass code I.D. # 84343227 The third quarter press release can be downloaded on October 29, at 7:15 a.m., EDT, at http://federalmogul.mediaroom.com/. Investor Relations Contact: David Pouliot (248) 354-7967 David.Pouliot@federalmogul.com About Federal-Mogul Federal-Mogul Corporation is a leading global supplier of powertrain and safety technologies, serving the world's foremost original equipment manufacturers of automotive, light commercial, heavy-duty, agricultural, marine, rail, off-road and industrial vehicles, as well as the worldwide aftermarket. The company's leading technology and innovation, lean manufacturing expertise, as well as marketing and distribution deliver world-class products, brands and services with quality excellence at a competitive cost. Federal-Mogul is focused on its sustainable global profitable growth strategy, creating value and satisfaction for its customers, shareholders and employees. Federal-Mogul was founded in Detroit in 1899. The company is headquartered in Southfield, Michigan, and employs nearly 39,000 people in 36 countries. Visit the company's Web site at: http://www.federalmogul.com/ The Company filed for Chapter 11 protection on October 1, 2001 (Bankr. Del. Case No. 01-10582). Lawrence J. Nyhan Esq., James F. Conlan, Esq., and Kevin T. Lantry, Esq., at Sidley Austin Brown & Wood, and Laura Davis Jones, Esq., at Pachulski, Stang, Ziehl & Jones, P.C., represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $10.15 billion in assets and $8.86 billion in liabilities. Federal-Mogul Corp.'s U.K. affiliate, Turner & Newall, is based at Dudley Hill, Bradford. Peter D. Wolfson, Esq., at Sonnenschein Nath & Rosenthal; and Charlene D. Davis, Esq., Ashley B. Stitzer, Esq., and Eric M. Sutty, Esq., at The Bayard Firm represent the Official Committee of Unsecured Creditors. On March 7, 2003, the Debtors filed their Joint Chapter 11 Plan. They submitted a Disclosure Statement explaining that plan on April 21, 2003. They submitted several amendments and on June 6, 2004, the Bankruptcy Court approved the Third Amended Disclosure Statement for their Third Amended Plan. On July 28, 2004, the District Court approved the Disclosure Statement. The estimation hearing began on June 14, 2005. The Debtors submitted a Fourth Amended Plan and Disclosure Statement on November 21, 2006, and the Bankruptcy Court approved that Disclosure Statement on February 6, 2007. The Fourth Amended Plan was confirmed by the Bankruptcy Court on November 8, 2007, and affirmed by the District Court on November 14. Federal-Mogul emerged from Chapter 11 on December 27, 2007. (Federal-Mogul Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) * * * As reported by the TCR on June 5, 2009, Standard & Poor's Ratings Services said it has lowered its corporate credit rating on Federal-Mogul Corp. to 'B+' from 'BB-'. S&P also lowered the ratings on the company's senior secured debt; the recovery ratings are unchanged. The outlook is negative. "The ratings reflect Federal-Mogul's weak business risk profile as a major participant in the highly competitive global auto industry, and its aggressive financial risk profile," S&P said. FEDERAL-MOGUL: Wins Shield Patent Dispute With Lydall ----------------------------------------------------- Federal-Mogul Corporation has prevailed over an infringement lawsuit filed by Lydall Thermal/Acoustical Inc., Automotive News reports. According to Chad Halcom of Automotive News, the U.S. Court of Appeals in Washington has upheld a lower Court's ruling that Federal-Mogul did not infringe Lydall's patent on certain insulating shields, which are mounted in engine compartments for fire and heat protection. Federal-Mogul's ReflectShield 1440 apparently bears some resemblance to Lydall's patented insulation shields. About Federal-Mogul Federal-Mogul Corporation is a leading global supplier of powertrain and safety technologies, serving the world's foremost original equipment manufacturers of automotive, light commercial, heavy-duty, agricultural, marine, rail, off-road and industrial vehicles, as well as the worldwide aftermarket. The company's leading technology and innovation, lean manufacturing expertise, as well as marketing and distribution deliver world-class products, brands and services with quality excellence at a competitive cost. Federal-Mogul is focused on its sustainable global profitable growth strategy, creating value and satisfaction for its customers, shareholders and employees. Federal-Mogul was founded in Detroit in 1899. The company is headquartered in Southfield, Michigan, and employs nearly 39,000 people in 36 countries. Visit the company's Web site at: http://www.federalmogul.com/ The Company filed for Chapter 11 protection on October 1, 2001 (Bankr. Del. Case No. 01-10582). Lawrence J. Nyhan Esq., James F. Conlan, Esq., and Kevin T. Lantry, Esq., at Sidley Austin Brown & Wood, and Laura Davis Jones, Esq., at Pachulski, Stang, Ziehl & Jones, P.C., represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $10.15 billion in assets and $8.86 billion in liabilities. Federal-Mogul Corp.'s U.K. affiliate, Turner & Newall, is based at Dudley Hill, Bradford. Peter D. Wolfson, Esq., at Sonnenschein Nath & Rosenthal; and Charlene D. Davis, Esq., Ashley B. Stitzer, Esq., and Eric M. Sutty, Esq., at The Bayard Firm represent the Official Committee of Unsecured Creditors. On March 7, 2003, the Debtors filed their Joint Chapter 11 Plan. They submitted a Disclosure Statement explaining that plan on April 21, 2003. They submitted several amendments and on June 6, 2004, the Bankruptcy Court approved the Third Amended Disclosure Statement for their Third Amended Plan. On July 28, 2004, the District Court approved the Disclosure Statement. The estimation hearing began on June 14, 2005. The Debtors submitted a Fourth Amended Plan and Disclosure Statement on November 21, 2006, and the Bankruptcy Court approved that Disclosure Statement on February 6, 2007. The Fourth Amended Plan was confirmed by the Bankruptcy Court on November 8, 2007, and affirmed by the District Court on November 14. Federal-Mogul emerged from Chapter 11 on December 27, 2007. (Federal-Mogul Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) * * * As reported by the TCR on June 5, 2009, Standard & Poor's Ratings Services said it has lowered its corporate credit rating on Federal-Mogul Corp. to 'B+' from 'BB-'. S&P also lowered the ratings on the company's senior secured debt; the recovery ratings are unchanged. The outlook is negative. "The ratings reflect Federal-Mogul's weak business risk profile as a major participant in the highly competitive global auto industry, and its aggressive financial risk profile," S&P said. FILENE'S BASEMENT: Can File Chapter 11 Plan Until November 30 ------------------------------------------------------------- The Hon. Mary Walrath of the U.S. Bankruptcy Court for the District of Delaware extended the exclusive periods of Filene's Basement Corp. and its debtor-affiliates to: * file a Chapter 11 plan until Nov. 30, 2009; and * solicit acceptances of that plan until Jan. 28, 2010. The Debtors said they expect to continue to use the Chapter 11 process to carry on the orderly liquidation of their remaining assets and the fixing of claims asserted against the Debtors in an effort to maximize the value of their assets for the benefit of all creditors and other stakeholders and consummate a plan of liquidation under the Bankruptcy Code. About Filene's Basement Corp. Filene's Basement Corp., also called The Basement, is a Massachusetts-based chain of department stores owned by Retail Ventures, Inc. The oldest off-price retailer in the United States, The Basement focuses on high-end goods and is known for its distinctive, low-technology automatic markdown system. As of late 2006, the company operated stores in metropolitan areas of eight U.S. states and Washington, D.C. The chain also uses a 470,000-square-foot distribution center in Auburn, Massachusetts. The store's name is derived from the subterranean location of its flagship store, in the basement of the former Filene's department store at Downtown Crossing in Boston, Massachusetts. Filene's Basement, Inc., and its affiliates filed for Chapter 22 on May 4, 2009 (Bankr. D. Del. Case No. 09-11525). James E. O'Neill, Esq., Laura Davis Jones, Esq., Mark M. Billion, Esq., Michael Seidl, Esq., and Timothy P. Cairns, Esq., at Pachulski Stang Ziehl & Jones LLP, represent the Debtors in their restructuring effort. The Debtors listed $50,000,001 to $100,000,000 in assets and $100,000,001 to $500,000,000 in debts. Filene's Basement filed for Chapter 11 bankruptcy protection in August 1999. Filene's Basement was bought by a predecessor of Retail Ventures the following year. As reported by the Troubled Company Reporter on October 23, 2000, the U.S. Bankruptcy Court confirmed Filene's Basement's Amended Joint Plan of Liquidation, filed on June 16, 2000. Retail Ventures in April 2009 transferred the unit to Buxbaum Group, which appraises and liquidates assets, for no proceeds. FIRSTFED FINANCIAL: Extends Tender Offer Deadlines to November 6 ---------------------------------------------------------------- FirstFed Financial Corp. is extending the Expiration Date and Consent Payment Deadline with respect to its previously announced cash tender offers and consent solicitations for its outstanding senior debt securities. The Expiration Date will now be 5:00 p.m., New York City time, on November 6, 2009, unless extended or earlier terminated by the Company, and the Consent Payment Deadline will now be 5:00 p.m., New York City time, on November 6, 2009, unless extended or earlier terminated by the Company. To be eligible to receive the purchase price of $200.00 per $1,000 in principal amount of Securities, which includes the consent payment of $20.00 per $1,000 in principal amount of Securities, holders must validly tender, and not validly withdraw, their Securities prior to the Consent Payment Deadline. Securities purchased in the tender offers will be paid for on the applicable settlement date for each tender offer, which, assuming the tender offers are not extended, will be promptly after the applicable Expiration Date. The terms and conditions of the tender offers and consent solicitations are described in the Offer to Purchase and Consent Solicitation Statement, dated June 19, 2009 (as amended or supplemented from time to time, the "Offer to Purchase"), and the related Letter of Transmittal and Consent. Except for the extension of the Expiration Date and Consent Payment Deadline as described in this press release, all other terms and conditions of the tender offers and consent solicitations remain unchanged. As of 5:00 p.m., New York City time, on October 15, 2009, the Company had received tenders and consents from holders of $50,000,000 in aggregate amount of the Fixed/Floating Rate Senior Debt Debentures due March 15, 2016, representing 100% of such securities, $20,000,000 in aggregate amount of the Fixed/Floating Rate Senior Debt Debentures due June 15, 2015, representing 40% of such securities, and $43,000,000 in aggregate amount of the Fixed/Floating Rate Senior Debt Debentures due June 15, 2017, representing 86% of such securities. As of 5:00 p.m., New York City time, on October 16, 2009, the Company had received tenders and consents from holders of $50,000,000 in aggregate amount of the Fixed/Floating Rate Senior Debt Debentures due March 15, 2016, representing 100% of such securities, $50,000,000 in aggregate amount of the Fixed/Floating Rate Senior Debt Debentures due June 15, 2015, representing 100% of such securities, and $43,000,000 in aggregate amount of the Fixed/Floating Rate Senior Debt Debentures due June 15, 2017, representing 86% of such securities. For additional information regarding the terms of the tender offers and consent solicitations, please contact James P. Giraldin, President and Chief Operating Officer of the Company, at (310) 302-1713. Requests for documents may be directed to the Corporate Secretary of the Company at (310) 302-5600. The tender offers and consent solicitations are being made solely pursuant to the Offer to Purchase and the related Letter of Transmittal and Consent, which set forth the complete terms of the tender offers and consent solicitations. Going Concern As reported by the Troubled Company Reporter on August 21, 2009, FirstFed's second quarter report on Form 10-Q includes a note on its ability to continue as a "going concern". The Company and its banking unit First Federal Bank of California are operating under Amended Orders to Cease and Desist issued on May 28, 2009, by the Office of Thrift Supervision. As required by the Amendments, the Company and the Bank have submitted a detailed capital plan to the OTS addressing how the Bank will meet and maintain a tier 1 core capital ratio of 7% and a minimum total risk-based capital ratio of 14% by September 30, 2009. The Bank's risk-based capital ratio was 9.63% at June 30, 2009, and its core and tangible capital ratios were 4.79%. These capital ratios are below the levels required by the Bank's federal regulators to be considered "well capitalized". "The ability of the Company and the Bank to continue to meet all of the requirements of the Amendments and the Orders will be affected by market conditions in the economy and other uncertainties. Declining real estate values and rising unemployment in the state of California could have a significant impact on future losses incurred on loans. In addition, there can be no assurance in the current economic environment that the Company will be able to raise capital to regain "well capitalized" status or to meet future regulatory requirements. Due to these conditions and events, substantial doubt exists in the Company's ability to continue as a going concern," the Company stated. FirstFed posted a comprehensive loss $48.74 million or $3.37 per diluted share of common stock for the second quarter of 2009 compared with a comprehensive loss of $36.56 million or $2.60 per diluted share of common stock for the second quarter of 2008. About FirstFed Financial Based in Los Angeles, California, FirstFed Financial Corp. (OTC-FFED.PK) -- http://www.firstfedca.com/-- is a savings and loan holding company. The Company owns and operates First Federal Bank of California, a federally chartered savings association. At June 30, 2009, the Company had $6.36 billion in total assets and $6.20 billion in total liabilities. FIRSTFED FINANCIAL: Home-Loan Modifications Pass $1.4 Billion ------------------------------------------------------------- September figures show that First Federal Bank of California, a wholly owned subsidiary of FirstFed Financial Corp., has modified more than $1.4 billion worth of home mortgages, enabling nearly 3,000 California families to avert foreclosure. The Bank's workouts continue to perform better than those of banks nationally, fulfilling the Obama Administration's goal for lenders to provide affordable and sustainable mortgages to borrowers who face hardship. The strong loan-modification results accompany other positive financial trends for First Federal Bank of California. Overall loan delinquencies declined significantly as of September 30, 2009 compared to their previous peak levels. Loans that were 30-59 days delinquent fell to $70.6 million as of September 30, or 55% lower than the $157.5 on January 31, 2009, according to unaudited, unconsolidated monthly results. Loans that were greater than 60 days delinquent fell to $16.8 million, or 95% lower than the $341.3 million on February 28, 2009. Loans in foreclosure fell 38% to $281.8 million from $456.2 million on June 30, 2009. September capped the most active three-month period for loan modifications since First Federal Bank of California launched its program. Nearly 900 mortgages worth some $442 million were modified in the July to September quarter. The Bank, a Southern California community lender for 80 years, has reached out to residential-mortgage holders and to date, has successfully modified more than one-third of its option arm loan portfolio. First Federal Bank of California's early, proactive and sustained effort to respond to its borrowers' needs has produced a pace- setting loan-modification program. Compared to the national average, far fewer loans modified by the Bank have defaulted as of August 31, the latest date for which there is comparative data. Just 28.3% of the loans modified by First Federal Bank of California in the first quarter of 2008 had become at least 30 days delinquent 12 months after they were modified. By contrast, that figure is 65.9% for national banks and federally regulated thrifts, according to a September report by the Office of the Comptroller of the Currency and the Office of Thrift Supervision. In other words, for the earliest home loans that were modified -- those with the longest track record by which to measure performance -- two-thirds of the mortgages nationally have fallen 30 days behind, while less than one-third of First Federal Bank of California's are similarly delinquent. Thanks to refinements in its loan-modification program and its flexibility in working with borrowers because the Bank holds the mortgages in its own portfolio, First Federal Bank of California has steadily improved its success rate. The most recent results show that the Bank modified 304 home mortgages worth $153 million in September, nearly three times the volume of its loan modifications in September 2008. First Federal Bank of California acted early to offer modifications even before borrowers defaulted on their payments. Over 90% of the loans that the Bank has modified since the program started were current at the time they were modified. The Bank converted many adjustable- rate loans into fixed-rate mortgages for up to 10 years and eliminated negative-amortization provisions for modified loans. These steps have reduced the risk of foreclosure and potential loan losses. Loan delinquency trends also point to reduced risk of foreclosure. Recently, loans that were 30-59 days delinquent largely have not deteriorated to more serious categories of delinquency in following months. They either have been cured or they remained less than 60 days delinquent. First Federal Bank of California, a federally chartered savings association, operates 39 retail banking offices in Southern California. FirstFed Financial Corp. is a savings and loan holding company. Total Modified Total Modified Date Modified Loans Balance ------------- -------- -------------- 02/29/08 133 $67,047,095 03/31/08 86 $41,770,910 04/30/08 122 $57,674,168 05/31/08 68 $31,913,335 06/30/08 135 $61,669,438 07/31/08 178 $82,481,190 08/31/08 128 $55,524,834 09/30/08 122 $57,784,775 10/31/08 109 $50,748,718 11/30/08 67 $29,364,029 12/31/08 102 $52,771,594 01/31/09 79 $34,496,170 02/28/09 110 $53,989,363 03/31/09 156 $77,157,055 04/30/09 174 $85,036,389 05/31/09 132 $59,723,698 06/30/09 140 $69,526,456 07/31/09 221 $105,632,386 08/31/09 361 $182,824,246 09/30/09 304 $153,140,462 -------- -------------- Total 2,927 $1,410,276,311 A graph of the approved modifications is available at no charge at http://ResearchArchives.com/t/s?471f Going Concern As reported by the Troubled Company Reporter on August 21, 2009, FirstFed's second quarter report on Form 10-Q includes a note on its ability to continue as a "going concern". The Company and its banking unit First Federal Bank of California are operating under Amended Orders to Cease and Desist issued on May 28, 2009, by the Office of Thrift Supervision. As required by the Amendments, the Company and the Bank have submitted a detailed capital plan to the OTS addressing how the Bank will meet and maintain a tier 1 core capital ratio of 7% and a minimum total risk-based capital ratio of 14% by September 30, 2009. The Bank's risk-based capital ratio was 9.63% at June 30, 2009, and its core and tangible capital ratios were 4.79%. These capital ratios are below the levels required by the Bank's federal regulators to be considered "well capitalized". "The ability of the Company and the Bank to continue to meet all of the requirements of the Amendments and the Orders will be affected by market conditions in the economy and other uncertainties. Declining real estate values and rising unemployment in the state of California could have a significant impact on future losses incurred on loans. In addition, there can be no assurance in the current economic environment that the Company will be able to raise capital to regain "well capitalized" status or to meet future regulatory requirements. Due to these conditions and events, substantial doubt exists in the Company's ability to continue as a going concern," the Company stated. FirstFed posted a comprehensive loss $48.74 million or $3.37 per diluted share of common stock for the second quarter of 2009 compared with a comprehensive loss of $36.56 million or $2.60 per diluted share of common stock for the second quarter of 2008. About FirstFed Financial Based in Los Angeles, California, FirstFed Financial Corp. (OTC-FFED.PK) -- http://www.firstfedca.com/-- is a savings and loan holding company. The Company owns and operates First Federal Bank of California, a federally chartered savings association. At June 30, 2009, the Company had $6.36 billion in total assets and $6.20 billion in total liabilities. FONTAINEBLEAU LV: Jeffrey Truitt Appointed as Examiner ------------------------------------------------------ According to Bill Rochelle at Bloomberg News, Jeffrey Truitt was appointed as the examiner to investigate Fontainebleau Las Vegas LLC. Truitt, from Santa Ana, California, is a principal with X Roads Solutions Group. As reported by the TCR on Oct. 12, 2009, Bankruptcy Judge A. Jay Cristol, at his behest, ordered an examiner who will investigate Fontainebleau Las Vegas. 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) FORUM HEALTH: Wants Charles Neumann as Interim CEO -------------------------------------------------- Forum Health Inc. is asking the bankruptcy court to let it hire Charles Neumann as its interim CEO, saying that a "leadership void" at this stage of the Chapter 11 bankruptcy case would do "maximum damage" to the Company, court documents say. Walter Pishkur left the post in September. Business Journal Daily reports that Mr. Neumann's firm, FTI Consulting Inc., would be paid $75,000 per month for Mr. Neumann's services plus "reasonable" out-of-pocket expenses. According to court documents, Mr. Neumann would serve as interim CEO effective October 12 through Dec 31, 2009, with the interim services agreement automatically renewing for successive one-month terms until either Forum or FTI provide 30 days notice of intent to terminate the agreement. Based in Warren, Ohio, Forum Health -- http://www.forumhealth.org/ -- offers health care services. The primary service area consists of the northeast Ohio counties of Mahoning, Trumbull and Columbiana; and northeast Ohio counties of Ashtabula, Geauga and Portage and the Pennsylvania counties of Mercer and Lawrence. Forum Health and its affiliates filed for Chapter 11 protection on March 16, 2009 (Bankr. N.D. Ohio Lead Case No. 09-40795). Paul W. Linehan, Esq., and Shawn M Riley, Esq., at McDonald Hopkins LLC, serve as lead counsel to the Debtors. The Debtors have also tapped Michael A. Gallo, Esq. at Nadler Nadler & Burdman Co., LPA as co- counsel; Kurtzman Carson Consultants LLC as claims, noticing and balloting agent; and Huron Consulting Services LLC as financial advisors. Alston & Bird LLP represents the official committee of unsecured creditors formed in the Chapter 11 cases. At the time of its filing, Forum Health estimated that it had assets and debts both ranging from $100 million to $500 million. FLYING J: Calpine Rival Prevails in $9.7M Flying J Credit Sale -------------------------------------------------------------- Law360 reports that thwarting Calpine Energy Services LP's late grab for Flying J Inc.'s emission reduction credits, the Bankruptcy Court has approved the $9.7 million deal with Hydrogen Energy California, a low-carbon power company forged by BP PLC and Rio Tinto. 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. FREEDOM COMMS: Bonus Program Approved by Bankruptcy Court --------------------------------------------------------- Freedom Communications Inc. won authorization from the Bankruptcy Court to adopt a bonus program that may pay as much as $7 million, including $5 million for managers and executives, Bloomberg News said. The plan had met opposition from unsecured creditors, who claim the Debtor is trying to plunder the estate for the benefit of wealthy company insiders. Freedom Communications, headquartered in Irvine, Calif., is a national privately owned information and entertainment company of print publications, broadcast television stations and interactive businesses. The company's print portfolio includes approximately 90 daily and weekly publications, including approximately 30 daily newspapers, plus ancillary magazines and other specialty publications. The broadcast company's stations -- five CBS, two ABC network affiliates and one CW affiliate -- reach more than 3 million households across the country. The Company's news, information and entertainment Web sites complement its print and broadcast properties. Freedom Communications filed for Chapter 11 on Sept. 1, 2009 (Bankr. D. Del. Case No. 09-13046). Attorneys at Young Conaway Stargatt & Taylor, and Latham & Watkins LLP serve as Chapter 11 counsel. Houlihan, Lokey, Howard & Zukin, Inc., serves as financial advisor while AlixPartners LLC is restructuring consultant. Logan & Co. serves as claims and notice agent. Freedom Communications had $757,000,000 in assets against debts of $1,077,000,000 as of July 31, 2009. HIDEAWAY MARINA: Files Chapter 11 in Fort Lauderdale ---------------------------------------------------- Hideaway Marina LP filed a Chapter 11 petition on Oct. 14 in Fort Lauderdale, Florida (Bankr. S.D. Fla. Case No. 09-32179), listing assets of $6.5 million and debt totaling $11.5 million. Creditors include the $3 million secured claim of Landmark Bank, which obtained the appointment of a receiver for the marina in May. The bankruptcy judge allowed the receiver to maintain control of the marina until a motion can be heard for appointment of a Chapter 11 trustee. Secured claims total $5.8 million. Hideaway Marina is based in Pompano Beach, Florida. GENERAL MOTORS: Executes Pact Relating to GM Nova Scotia Notes -------------------------------------------------------------- In a regulatory filing with the Securities and Exchange Commission on October 9, 2009, Motors Liquidation Company disclosed its entry into a lock up agreement with General Motors Nova Scotia Finance Company, General Motors of Canada Limited, General Motors Nova Scotia Investments Limited, and certain holders of GM Nova Scotia's outstanding 8.375% notes due December 7, 2015, and GM Nova Scotia's 8.875% notes due July 10, 2023, relating to the GM Nova Scotia Notes. GM Nova Scotia is a wholly-owned subsidiary of Motors Liquidation and the GM Nova Scotia Notes are guaranteed by Motors Liquidation. Under the Agreement, GM Nova Scotia provided the Noteholders with consent to a bankruptcy order with respect to GM Nova Scotia pursuant to the Bankruptcy and Insolvency Act of Canada. On October 9, 2009, the Noteholders filed an application to the Nova Scotia Supreme Court for the Order, which was approved. Motors Liquidation does not expect to realize any value from GM Nova Scotia on account of its equity interest, Motors Liquidation Vice President and Treasurer James Selzer disclosed. 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: Fidelity and Marathon Disclose Equity Stake --------------------------------------------------------- Fidelity Management & Research Company, a wholly owned subsidiary of FMR LLC and an investment adviser registered under Section 203 of the Investment Advisers Act of 1940, is the beneficial owner of 7,199,619 shares or 21.861% of the Common Stock outstanding of Georgia Gulf Corporation as a result of acting as investment adviser to various investment companies registered under Section 8 of the Investment Company Act of 1940. The number of shares of Common Stock of Georgia Gulf Corporation owned by the investment companies at September 30, 2009 included 7,199,619 shares of Common Stock resulting from the assumed conversion of 7,199,619 shares of GEORGIA GULF CORP 144A (1 shares of Common Stock for each share of Convertible Preferred Stock). Members of the family of Edward C. Johnson 3d, Chairman of FMR LLC, are the predominant owners, directly or through trusts, of Series B voting common shares of FMR LLC, representing 49% of the voting power of FMR LLC In a separate filing, Marathon Asset Management, LP, said it may be deemed to beneficially own 2,576,000 shares, or 7.8% of the shares deemed issued and outstanding as of October 16, 2009, of Georgia Gulf. The general partner of Marathon is Marathon Asset Management GP, LLC. Bruce Richards and Louis Hanover are the managing members of Marathon Asset Management GP, LLC. 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. GLOBAL MOTORSPORT: Court Sets Oct. 23 Disclosure Statement Hearing ------------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Delaware has scheduled a hearing on October 23, 2009, to consider the adequacy of the information in the disclosure statement explaining Global Motorsport Group, Inc., et al.'s Chapter 11 plan of liquidation, which is dated July 31, 2009. Approval of the disclosure statement paves the way for the Debtors to solicit support on the Plan, then approval of the Plan at the confirmation hearing. Under the Plan, there are six classes, all of which are impaired. Classes 1 through 4 are entitled to vote on the Plan. Intercompany claims under Class 5 and Equity Interests under Class 6 are not entitled to vote. The Debtors ask the Bankruptcy Court to schedule a confirmation hearing for December 8, 2009. A full-text copy of the Debtors' Chapter 11 plan of liquidation is available for free at: http://bankrupt.com/misc/global.chapter11plan.pdf A full-text copy of the disclosure statement explaining the Debtors' Chapter 11 Plan is available for free at: http://bankrupt.com/misc/GlobalMotorsport.DS.Part1.pdf http://bankrupt.com/misc/GlobalMotorsport.DS.Part2.pdf As reported in the Troubled Company Reporter on August 11, 2009, pursuant to the Plan terms, prepetition lenders will retain all distributions made prior to the Plan's effective date in full and final satisfaction of said claims. The distributions will be deemed indefeasibly paid in full and not subject to disgorgement. All other Lender Group Claims will be waived. Other secured claims will receive either (i) the net liquidation proceeds from the assets of the Debtors upon which it holds a lien senior to the lien of Ableco Finance or (ii) the Debtors or the Liquidating Debtors will abandon the collateral in full and complete satisfaction of said other secured claims. General unsecured claims will receive a pro rata share of the assets recovered by a trust. Equity Interests will be cancelled and will receive no distribution under the Plan. Following the Plan's effective date, the liquidating Debtors will wind up their affairs and dissolve. Distributions under the Plan will be sourced from Cash on hand, the Agent Contribution and Causes of Action. The Plan places the various claims against and interests in the Debtors into 6 classes: Class Status Voting Rights ----- ------ ------------- Class 1 - Priority Claims Impaired Entitled to Vote Class 2 - Lender Group Claims Impaired Entitled to Vote Class 3 - Other Secured Claims Impaired Entitled to Vote Class 4 - General Unsecured Claims Impaired Entitled to Vote Class 5 - Intercompany Claims Impaired Not Entitled to Vote Class 6 - Equity Interests Impaired Not Entitled to Vote About Global Motorsport Headquartered in Morgan Hill, California, Global Motorsport Group Inc. -- http://www.gmgracing.com/-- is a dealer of European model sports cars. The Company is also known as Global Motorsport Parts Inc. The Company and three of its affiliates filed for protection on January 31, 2008 (Bankr. D. Del. Lead Case No. 08-10192). Laura Davis Jones, Esq., James O'Neill, Esq., and Joshua Fried, Esq., at Pachulski Stang Ziehl & Jones LLP, serve as counsel to the Debtors. T. Scott Avil, Esq., at CRG Partners Group LLC, is the Debtors' restructuring services provider. Federico G.M. Mennella, Esq., at Lincoln International Advisors, LLC, is the Debtors' investment banker. The Debtors selected Epiq Bankruptcy Solution LLC as their claims agent. The U.S. Trustee for Region 3 has appointed five creditors to serve on an Official Committee of Unsecured Creditors. Fox Rothschild LLP and Andrews Kurth LLP serve as the Committee's counsel. Edward T. Gavin, CTP, at NachmanHaysBrownstein, Inc., is the Committee's financial advisor. Adam Harris, Esq., and David Hillman, Esq., at Schulte Roth & Zabel LLP, serve as counsel to the prepetition and postpetition secured lenders. When the Debtors filed for protection from their creditors, they listed assets of between $50 million and $100 million and debts of between $100 million and $500 million. GOLDEN EAGLE: Board Adopt New Equity Compensation Plan ------------------------------------------------------ The Board of Directors of Golden Eagle International Inc. on October 7, 2009, adopted a new equity compensation plan and granted options under that plan and approved the terms of employment agreements between both the Company's chief executive officer and its chief financial officer. Both employment agreements and the equity compensation plan itself are subject to shareholder approval. Since they are subject to shareholder approval, the employment agreements are not enforceable against the Company and the options granted pursuant to the plan are not exercisable. Consequently the disclosure in this report is being voluntarily provided by the Company. (A) Revised 2009 Equity Incentive Plan On October 7, 2009, the Company adopted the Golden Eagle International, Inc. Revised 2009 Equity Incentive Plan. Additionally, on that date the Board of Directors nullified the 2009 Equity Incentive Plan which was adopted on March 27, 2009. The earlier (March 2009) plan is not effective because it, too, was subject to shareholder approval which has not been obtained. The Revised Plan and all options granted pursuant to it, are subject to consideration and approval by Golden Eagle shareholders by no later than October 6, 2010. Concurrent with the adoption of the Revised Plan the Board of Directors granted options to Golden Eagle executive officers and directors, as well as several of Golden Eagle key employees. The options granted under the Revised Plan only vest if and when the Company's shareholders approve the Revised Plan, and will be exercisable for a three year term through October 7, 2012. The exercise price of all options granted under the Revised Plan is $0.0011 which was established by calculating the average of the closing price for the 10 trading days prior to October 7, 2009 ($0.0010), the date the Board approved the Plan, plus the addition of 10% to that average price. The options were granted as follows: Terry C. Turner, President, 200,000,000 Chief Operating Officer and Chairman of the Board of Directors Harlan (Mac) DeLozier, Vice 100,000,000 President for Bolivian Operations and Director Tracy A. Madsen, Vice President 75,000,000 for U.S. Operations, Chief Financial Officer, Corporate Secretary and Treasurer Alvaro Riveros, Director 10,000,000 Blane W. Wilson, Chief Operating 80,000,000 Officer (B) Executive Employment Agreements On October 7, 2009, the Company's Board of Directors approved the general terms of employment agreements between the Company and: 1) Terry Turner, the Company's Chief Executive Officer, President and Chairman of the Board of Directors; and 2) Tracy A. Madsen, the Company's Chief Financial Officer and Vice President of U.S. Administration. The Agreements are contingent upon receiving shareholder approval by October 7, 2010. If the Agreements are not approved by Golden Eagle shareholders before October 7, 2010, they will be void ab initio. However, it is expected that if the shareholders do not approve the Agreements Mr. Turner will continue to serve as an at- will employee and Mr. Madsen will continue to serve under the terms of his existing employment arrangement. If they become effective following shareholder approval, the Agreements are both for an initial 3-year term and will renew for successive one year terms unless terminated by the Company or the Executive. The Turner Agreement provides for a base salary of $180,000, which is equal to Mr. Turner's current salary; the Madsen Agreement provides for a base salary of $110,000, which is equal to his current salary. The Agreements provide that the Executive is eligible to receive a discretionary cash bonus based on the Company's business and results are eligible to participate in the Company's equity based compensation plans and to receive other standard employee benefits. The Agreements impose restrictive covenants on the Executive, such as confidentiality obligations and non-solicitation restrictions. If the Agreements are terminated by the Company without cause, or not as a result of the Executive's death or disability, the Executive is entitled to a severance payment equal to the Executive's base salary at the rate in effect on the termination date for a period of 6 months, plus one month for each year that Executive has been with the Company, or through expiration of the Agreement's original term, whichever is a shorter period of time. However, in no event will the Executive be entitled to less than 6 months of severance pay. The Agreements also provide for a severance payment upon a "change of control event" or if the Agreements are terminated by the Executive for "good reason." For the purpose of the Agreements "good reason" includes: a material breach of the Agreement or other terms of employment by the Company; a significant change or diminution in the Executive's duties; and the requirement that the Executive, without his consent, be based at an office or location more than 50 miles from his current work location. The severance to be paid to Mr. Turner upon a change of control event or upon the Agreement being terminated for good reason is calculated using the greater of: 1) An amount equal to Mr. Turner's base salary at the rate in effect on the termination date for a period of 6 months, plus one month for each year that Mr. Turner has been with the Company, or through expiration of the Agreement's original term, whichever is a shorter period of time; or 2) An amount equal to 2 times the sum of (a) Mr. Turner's then current annual base salary and (b) the amount of the most recent discretionary bonus paid to Mr. Turner (if any) less applicable withholding. The severance to be paid to Mr. Madsen upon a change of control event or upon the Agreement being terminated for good reason is calculated using the greater of: 1) An amount equal to Mr. Madsen's base salary at the rate in effect on the termination date for a period of 6 months, plus one month for each year that Mr. Madsen has been with the Company, or through expiration of the Agreement's original term, whichever is a shorter period of time; or 2) An amount equal to (a) one year of Mr. Madsen's current annual base salary and (b) the amount of the most recent discretionary bonus paid to Mr. Madsen (if any) less applicable withholding. Liquidity and Capital Resources The Company's auditors issued a going concern opinion on its audited financial statements for the fiscal year ended December 31, 2008, as the Company had a significant working capital deficit and substantial losses since inception. The Company said these and other matters raise substantial doubt about its ability to continue as a going concern. "Due to our working capital deficit of $657,148 at June 30, 2009, and $1,117,599 at December 31, 2008, we are unable to satisfy our current cash requirements for any substantial period of time through our existing capital. We anticipate total operating expenditures of approximately $1,000,000 pending adequate financing over the next twelve months for general and administrative expenses," the Company said. "Our cash balance of $86,508 as June 30, 2009, is insufficient to meet these planned expenses. In order to continue to pay our expenses, we intend to generate revenue from our contract to operate the Jerritt Canyon mill and may seek to raise additional cash by means of debt and/or equity financings. We have substantial commitments as summarized under our Capital Commitments and Requirements Section above that are subject to risks of default and forfeiture of property and mining rights. If we are unable to meet our obligations, or negotiate satisfactory arrangements, we may have to liquidate our business," the Company added. The Company also said if it has any liabilities that it is unable to satisfy and it qualifies for protection under the U.S. Bankruptcy Code, it may voluntarily file for reorganization under Chapter 11 or liquidation under Chapter 7. "Our creditors may also file a Chapter 7 or Chapter 11 bankruptcy petition. If our creditors or we file for Chapter 7 or Chapter 11 bankruptcy, our creditors will take priority over our stockholders. If we fail to file for bankruptcy under Chapter 7 or Chapter 11 and we have creditors; such creditors may institute proceedings against us seeking forfeiture of our assets, if any," the Company said. About Golden Eagle Headquartered in Salt Lake City, Utah, Golden Eagle International, Inc., (OTCBB: MYNG) is engaged in contract gold milling operations in the state of Nevada in the United States. It has also been involved in the business of minerals exploration, mining and milling operations in Bolivia through its Bolivian-based wholly owned subsidiary, Golden Eagle International, Inc. (Bolivia); however it is engaged in no operations in Bolivia at this time as certain of those operations are suspended pending changes in the social/political and mine taxing environments in Bolivia while the Company has terminated its interest in other Bolivian projects. The Company has entered into an agreement with Queenstake Resources USA, Inc., a wholly owned subsidiary of Yukon-Nevada Gold Corp., to operate the Jerritt Canyon gold mill located 50 miles north of Elko, Nevada. As of June 30, 2009, the Company had total net assets of $7,557,245 compared to total assets of $6,123,914 as of December 31, 2008. The assets include current assets, such as cash and prepaid expenses. The current assets increased to $1,955,427 as of June 30, 2009, from $209,392 as of December 31, 2008. As of June 30, 2009, the Company had $2,725,398 in total liabilities. GOLDEN EAGLE: Mining Firm Offers $10 Mil. for Gold Bar Mill ----------------------------------------------------------- Golden Eagle International, Inc., has received a Letter of Intent offering $10 million for the purchase of the Company's Gold Bar mill from LWMG, LLC, a private exploration and mining company with mining interests in Nevada and Utah. The Gold Bar mill is a 3,500 to 4,000 ton-per-day carbon-in-pulp gold mill located 25 miles northwest of Eureka, Nevada, that the Company has owned since 2004. The terms of the LOI provide for a $1 million down payment to be made by October 30, 2009, with $9 million deposited into escrow pending the completion of the permitting process. LWMG has also offered to negotiate a long-term operating agreement (referred to as a "tolling relationship" in its LOI), which would call for Golden Eagle to be the operator of the Gold Bar mill. However, if the permitting process were not successful, then the offered purchase price would decline to $5 million. The Company anticipates that it and LWMG will meet in the near future to negotiate the terms and conditions of both the proposed sale of the Gold Bar mill and the operating agreement. Golden Eagle also intends to carry out due diligence regarding LWMG's offer, and further intends to cooperate with LWMG on its due diligence with respect to the proposed transaction. Among the questions to be addressed during the negotiation period are when the $1 million down payment will be made and the conditions for its return to LWMG, when the $9 million will be deposited into escrow, the nature of the permitting that will be required as a condition for the full $10 million purchase price, to allocate responsibility for permitting and due diligence operations, to set forth additional conditions precedent to the transaction, and to establish a timetable for the completion of the transaction. While Golden Eagle cannot offer any assurance that it will reach satisfactory terms with LWMG regarding its offer to purchase the Gold Bar mill, or for an operating agreement, the Company intends to enter into good faith negotiations with LWMG to seek mutually beneficial terms and conditions. Liquidity and Capital Resources The Company's auditors issued a going concern opinion on its audited financial statements for the fiscal year ended December 31, 2008, as the Company had a significant working capital deficit and substantial losses since inception. The Company said these and other matters raise substantial doubt about its ability to continue as a going concern. "Due to our working capital deficit of $657,148 at June 30, 2009 and $1,117,599 at December 31, 2008, we are unable to satisfy our current cash requirements for any substantial period of time through our existing capital. We anticipate total operating expenditures of approximately $1,000,000 pending adequate financing over the next twelve months for general and administrative expenses," the Company said. "Our cash balance of $86,508 as June 30, 2009, is insufficient to meet these planned expenses. In order to continue to pay our expenses, we intend to generate revenue from our contract to operate the Jerritt Canyon mill and may seek to raise additional cash by means of debt and/or equity financings. We have substantial commitments as summarized under our Capital Commitments and Requirements Section above that are subject to risks of default and forfeiture of property and mining rights. If we are unable to meet our obligations, or negotiate satisfactory arrangements, we may have to liquidate our business," the Company added. The Company also said if it has any liabilities that it is unable to satisfy and it qualifies for protection under the U.S. Bankruptcy Code, it may voluntarily file for reorganization under Chapter 11 or liquidation under Chapter 7. "Our creditors may also file a Chapter 7 or Chapter 11 bankruptcy petition. If our creditors or we file for Chapter 7 or Chapter 11 bankruptcy, our creditors will take priority over our stockholders. If we fail to file for bankruptcy under Chapter 7 or Chapter 11 and we have creditors; such creditors may institute proceedings against us seeking forfeiture of our assets, if any," the Company said. About Golden Eagle Headquartered in Salt Lake City, Utah, Golden Eagle International, Inc., (OTCBB: MYNG) is engaged in contract gold milling operations in the state of Nevada in the United States. It has also been involved in the business of minerals exploration, mining and milling operations in Bolivia through its Bolivian-based wholly owned subsidiary, Golden Eagle International, Inc. (Bolivia); however it is engaged in no operations in Bolivia at this time as certain of those operations are suspended pending changes in the social/political and mine taxing environments in Bolivia while the Company has terminated its interest in other Bolivian projects. The Company has entered into an agreement with Queenstake Resources USA, Inc., a wholly owned subsidiary of Yukon-Nevada Gold Corp., to operate the Jerritt Canyon gold mill located 50 miles north of Elko, Nevada. As of June 30, 2009, the Company had total net assets of $7,557,245 compared to total assets of $6,123,914 as of December 31, 2008. The assets include current assets, such as cash and prepaid expenses. The current assets increased to $1,955,427 as of June 30, 2009, from $209,392 as of December 31, 2008. As of June 30, 2009, the Company had $2,725,398 in total liabilities. GPS INDUSTRIES: Assets Sold; Biz. Merged with ProLink ----------------------------------------------------- Falconhead Capital, LLC, disclosed the formation of GPSI Holdings, LLC. GPSI was created through the acquisition of and subsequent three-way merger of GPS Industries, Inc., ProLink Systems, Inc., and a series of assets previously owned by David Chessler, who has been named CEO of GPSI. GPS Industries was acquired through a sale process conducted under Section 363 of the U.S. Bankruptcy Code. Financial terms of the transactions were not disclosed. Falconhead has immediately established GPSI as the leading player in the golf cart-mounted GPS industry globally, with systems deployed on nearly 1,000 courses predominantly in North America and Europe. Falconhead expects that the acquisition of these businesses at very attractive valuations, and their combination, will result in significant cost, revenue and technological synergies that will position GPSI for significant profitable growth. In particular, GPSI will implement extensive product and service improvements that will benefit customers and enhance the playing experience for players around the world. Falconhead's partner in GPSI is Greg Norman, the professional golfer and head of Great White Shark Enterprises, a corporation primarily focused on golf. Mr. Norman, a long-time member of Falconhead's advisory board, was involved in conceiving and executing the transactions. Mr. Norman will own a significant equity stake in GPSI and has entered into an agreement to promote the company's business. As part of GPSI's long-term growth strategy, the company has established an exclusive partnership with Club Car to leverage its sales force of more than 120 representatives and its extensive global distribution network. David S. Moross, chairman and chief executive officer of Falconhead Capital, said, "We are proud to create the leading provider of cart-mounted GPS services to golf courses. The transactions that led to the formation of GPSI Holdings further demonstrate our ability to pursue and complete complex investment opportunities, and the new company is highly complementary to our investment strategy given our long ties to golf, and our expertise in leisure and lifestyle. By bringing together these three businesses, we have created a new company with the financial strength, operational efficiency, technology expertise, business model and geographic reach necessary to succeed over the long term. "We are fortunate that our friend Greg Norman is our partner in GPSI, given his immense stature in the golf world as a player and businessman. We look forward to working together to further build this powerful platform," Mr. Moross concluded. Mr. Norman said, "This transacti`on further promotes the consolidation of the industry which started with GPS Industries' acquisition of UpLink in late 2008 and now includes the merger with ProLink and ProView. This consolidation, together with other strategies, several of which specifically capitalize on the current economic landscape, will position GPSI to realize its full potential. It has been a pleasure to work closely with David and the Falconhead team, and we look forward to a very successful venture." About Falconhead Capital Falconhead Capital, LLC -- http://www.falconheadcapital.com/,with $500 million of assets under management, is a private equity firm established in 1998 to provide investors with significant long- term capital appreciation by investing globally in consumer- focused businesses in the sport, leisure, lifestyle, and media categories. In addition to NYDJ, Falconhead Capital's current portfolio investments include Competitor Group, Inc., Extreme Fitness, Inc., Not Your Daughter's Jeans, Our365 (f/k/a Growing Family), Escort, Inc., and Premier, Inc. Past Falconhead portfolio investments include, among others, National Powersport Auctions, Maritime Telecommunications Network, The Golf Warehouse, and ESPN Classic Europe, LLC. About Great White Shark Enterprises Great White Shark Enterprises is a multi-national corporation headed by Greg Norman with offices in West Palm Beach, Fla., and Sydney, Australia. The Company administrates a variety of businesses including Greg Norman Golf Course Design, Greg Norman Collection (apparel), Greg Norman Estates (wine), Greg Norman Production Company (event management), Medallist Developments and Southern Cross Developments (real estate development), and numerous other merchandising and licensing arrangements. About GPSI Holdings LLC Headquartered in Sarasota, Florida, GPSI Holdings develops, manufactures and sells new and refurbished cart-mounted GPS distance measurement devices along with the related infrastructure for use with golf course operations, and provides service required to properly maintain the units. Golf courses benefit from GPSI's systems through increased customer satisfaction, improved course management, potential revenue generation and enhanced safety. About GPS Industries GPS Industries, Inc., was a golf course global positioning system manufacturer in Sarasota, Florida. It filed for Chapter 11 bankruptcy protection on July 31, 2009 (Bankr. M.D. Fla. Case No. 09-16766). Judge Catherine Peek McEwen presides over the case. Richard J. McIntyre, Esq., at McIntyre, Panzarella, Thanasides & Eleff, in Temple Terrace, Florida, serves as the Debtor's counsel. The Debtor listed $2,971,388 in assets and $27,901,483 in debts in its petition. GRAMERCY CAPITAL: Settles Exchange of $97.5MM Jr. Sub. Notes ------------------------------------------------------------ Gramercy Capital Corp. on October 16 said that it has settled an exchange of $97.5 million of junior subordinated notes due June 30, 2035, issued by its operating partnership subsidiary for an equivalent par value amount of various classes of bonds previously purchased in the open market issued by affiliates Gramercy Real Estate CDO 2005-1, Gramercy Real Estate CDO 2006-1 and Gramercy Real Estate CDO 2007-1. The exchange leaves $52.5 million of additional junior subordinated notes outstanding. Gramercy Capital Corp. -- http://www.gramercycapitalcorp.com/-- is an integrated commercial real estate finance and property investment company whose Gramercy Finance division focuses on the direct origination and acquisition of whole loans, subordinate interests in whole loans, mezzanine loans, preferred equity, CMBS and other real estate securities, and whose Gramercy Realty division targets commercial properties net leased primarily to financial institutions and affiliated users throughout the United States. Gramercy is externally-managed by GKK Manager LLC, which is a wholly-owned subsidiary of SL Green Realty Corp. Gramercy is headquartered in New York City, and has regional investment and portfolio management offices in Los Angeles, California, Jenkintown, Pennsylvania, and Charlotte, North Carolina. GREDE FOUNDRIES: Court Sets November 30 as Claims Bar Date ---------------------------------------------------------- Grede Foundries Inc. and its debtor-affiliates ask the Hon. Robert D. Martin of the U.S. Bankruptcy Court for the Western District of Wisconsin to set Nov. 30, 2009, as deadline for creditors to file proofs of claim. The Debtors propose Jan. 13, 2009, as last day of all governmental units to file proofs of claim. All proofs of claim must be filed to: Grede Foundries Claim Processing c/o Kurtzman Carson Consultants LLC 2335 Alaska Avenue El Segundo, California 90245 Based in Reedsburg, Wisconsin, Grede Foundries, Inc. -- http://www.grede.com/-- produces ductile iron, grey iron and specialty metal parts. The Company serves the automotive, heavy truck, off-highway, diesel engine and industrial markets and is one of the largest cast-iron foundry companies in the United States. The Company filed for Chapter 11 on June 30, 2009 (Bankr. W.D. Wisc. Case No. 09-14337). Daryl L. Diesing, Esq., Jerard J. Jensen, Esq., and Daniel J. McGarry, Esq., at Whyte Hirschboeck Dudek S.C., represent the Debtor in its restructuring efforts. The Debtor selected Conway Del Genio Gries & Co. as restructuring advisor; Leverson & Metz S.C. as special counsel; and Kurtzman Carson Consultants LLC as claims agent. The Debtor listed total assets of $143,983,000 and total debts of $148,243,000. GREEKTOWN HOLDINGS: Creditors Accept Mgt. Plan, Reject Luna Plan ---------------------------------------------------------------- The Joint Plan of Reorganization submitted by Greektown Holdings LLC and its debtor affiliates and Merrill Lynch Capital Corporation was overwhelmingly supported by prepetition lenders. According to a certification filed by Michael J. Paque, a senior managing consultant of Kurtzman Carson Consultants LLC, the Debtors' voting and claims agent, 80.6% of the Prepetition Lenders voted to accept the Debtors' Plan. The Lenders who gave a "yes" vote to the Debtors' Plan have claims, aggregating $220 million, against the Debtors. However, the Plan was also overwhelmingly rejected by holders of general unsecured claims and trade claims. Voting Results on the Debtors' Plan ___________________________________________________________ | | | | | | Accepting | Rejecting | | Class |________________________|______________________| | | No. of | Amount | No. of | Amount | | | Holders | Held | Holders | Held | |___________|_________|______________|_________|____________| | | | | | | | 2, 8, | 75 | $220,747,338 | 18 | $60,563,749| | 13, 17, | | | | | | 21, 25 | (80.65%)| (78.47%) | (19.35%)| (21.53%) | |___________|_________|______________|_________|____________| | | | | | | | | 6 | $700,436 | 31 | $12,671,073| | 10 | | | | | | | (16.22%)| (5.24%) | (83.78%)| (0.00%) | |___________|_________|______________|_________|____________| | | | | | | | | 2 | $54,183 | 8 | $3,176,266 | | 11 | | | | | | | (20.00%)| (1.68%) | (80.00%)| (98.32%) | |___________|_________|______________|_________|____________| | | | | | | | | 0 | $0.00 | 1 | $1 | | 28 | | | | | | | (0.00%) | (0.00%) | (100%) | (100%) | |___________|_________|______________|_________|____________| | | | | | | | | 0 | $0.00 | 1 | $56,336,740| | 31 | | | | | | | (0.00%) | (0.00%) | (100%) | (100%) | |___________|_________|______________|_________|____________| On the other hand, the Alternative Plan of Reorganization submitted by Luna Greektown LLC and Plainfield Asset Management LLC and its affiliates was overwhelmingly rejected by all creditors. Voting Results on the Luna Plan ___________________________________________________________ | | | | | | Accepting | Rejecting | | Class |________________________|______________________| | | No. of | Amount | No. of | Amount | | | Holders | Held | Holders | Held | |___________|_________|______________|_________|____________| | | | | | | | 2, 9, | 0 | $0.00 | 90 |$273,124,294| | 15, 20, | | | | | | 25, 30 | (0.00%) | (0.00%) | (100%) | (100%) | |___________|_________|______________|_________|____________| | | | | | | | | 3 | $10,745,000 | 66 |$147,361,000| | 5 | | | | | | | (4.35%) | (6.80%) | (95.65%)| (93.20%) | |___________|_________|______________|_________|____________| | | | | | | | | 0 | $0.00 | 4 | $81,073 | | 6 | | | | | | | (0.00%) | (0.00%) | (100%) | (100%) | |___________|_________|______________|_________|____________| | | | | | | | | 6 | $541,200 | 16 | $15,243,619| | 12 | | | | | | | (27.27%)| (3.43%) | (72.73%)| (96.57%) | |___________|_________|______________|_________|____________| | | | | | | | | 9 | $122,936 | 15 | $3,450,905 | | 13 | | | | | | | (37.50%)| (3.44%) | (62.50%)| (96.56%) | |___________|_________|______________|_________|____________| | | | | | | | | 0 | $0.00 | 1 | $1 | | 34 | | | | | | | (0.00%) | (0.00%) | (100%) | (100%) | |___________|_________|______________|_________|____________| | | | | | | | | 0 | $0.00 | 1 | $56,336,740| | 37 | | | | | | | (0.00%) | (0.00%) | (100%) | (100%) | |___________|_________|______________|_________|____________| | | | | | | | | 2 | $271,295 | 5 | $3,450,905 | | 38 | | | | | | | (28.57%)| (8.57%) | (71.43%)| (94.43%) | |___________|_________|______________|_________|____________| The summary ballot reports of the Plan Proponents are available for free at: http://bankrupt.com/misc/GrktnDebtSum.pdf http://bankrupt.com/misc/GrktnLunaSum.pdf The Detroit Free Press reported that Conway MacKenzie Inc. professional Charles Moore have informed the Michigan Gaming Control Board Tuesday, October 13, of the voting results on the Debtors' Plan. "We are very pleased with where things stand today, though we anticipate challenges and we anticipate a contested confirmation hearing," Crain's Detroit Business quoted Mr. Moore as telling the MGCB. Several objections have already been filed with respect to the confirmation of the competing Chapter 11 Plans in the Debtors' cases. The hearing for the Bankruptcy Court's recommendation of the best plan for the Debtors has been scheduled for November 3, 2009. The Court will also be taking into consideration the voting results tabulated by Kurtzman. The Plan is also subject for approval by the MGCB. At the MGCB meeting Tuesday, Mr. Moore also revealed the Greektown Casino's enterprise value is $540 million, "an amount that has been kept confidential until now because investors have been bidding on a purchase of the casino," Daniel Duggan of Crain's Detroit Business related. Greektown Casino aims to exit bankruptcy by December 31, 2009, Mr. Moore also told the MGCB, according to The Detroit Free Press. About Greektown Casino Based in Detroit, Michigan, Greektown Holdings, LLC, and its affiliates -- http://www.greektowncasino.com/-- operates world-class casino gaming facilities located in Detroit's historic Greektown district featuring more than 75,000 square feet of casino gaming space with more than 2,400 slot machines, over 70 tables games, a 12,500-square foot salon dedicated to high limit gaming and the largest live poker room in the metropolitan Detroit gaming market. Greektown Casino employs approximately 1,971 employees, and estimates that it attracts over 15,800 patrons each day, many of whom make regular visits to its casino complex and related properties. In 2007, Greektown Casino achieved a 25.6% market share of the metropolitan Detroit gaming market. Greektown Casino has also been rated as the "Best Casino in Michigan" and "Best Casino in Detroit" numerous times in annual readers' polls in Detroit's two largest newspapers. The Company and seven of its affiliates filed for Chapter 11 protection on May 29, 2008 (Bankr. E.D. Mich. Lead Case No. 08-53104). Daniel J. Weiner, Esq., Michael E. Baum, Esq., and Ryan D. Heilman, Esq., at Schafer and Weiner PLLC, represent the Debtors in their restructuring efforts. Judy B. Calton, Esq., at Honigman Miller Schwartz and Cohn LLP, represents the Debtors as their special counsel. The Debtors chose Conway MacKenzie & Dunleavy as their financial advisor, and Kurtzman Carson Consultants LLC as claims, noticing, and balloting agent. When the Debtor filed for protection from its creditors, it listed consolidated estimated assets and debts of $100 million to $500 million. Bankruptcy Creditors' Service, Inc., publishes Greektown Casino Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by Greektown Casino and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GREEKTOWN HOLDINGS: Detroit Wants Changes to Luna Plan ------------------------------------------------------ The City of Detroit asks the Court not to confirm the Plan of Reorganization submitted by Luna Greektown LLC and Plainfield Asset Management LLC and its affiliates unless certain paragraphs are revised. Representing the City, Cezar M. Froelich, Esq., at Shefsky & Froelich Ltd., in Chicago, Illinois, contends that the Luna Plan fails to adequately address the consent required of the City to the assignment, transfer, or modification of the Development Agreement related to the development, construction and operation of Greektown Casino's newest hotel in Detroit. To cure the Luna Plan defects at a minimum, Mr. Froelich submits that certain paragraphs of the Luna Plan must be amended by adding these provision: * Paragraph 6.2.5 -- All authorizations, consents, and regulatory approvals required for this Plan's effectiveness will have been obtained including, without limitation, any required MGCB and City of Detroit regulatory approvals and consents; * Paragraph 6.28 -- The City of Detroit, a municipal corporation, The Economic Development Corporation of the City of Detroit, a Michigan public body corporate, and the Luna Plan Proponents, a new Michigan limited liability company, will enter into an Amended and Restated Development Agreement, that amends, supersedes, and restates in its entirety an agreement as originally executed as of August 2, 2002, as amended by that certain First Amendment to Development Agreement dated July 2003. Mr. Froelich tells the Court that discovery of the matters raised by the Luna Plan and the City's objection is ongoing. Before the City filed its confirmation objection, it entered into a Court-approved stipulation for an extension of the time the City may filed an objection to the Debtors' Plan from October 13, 2009 to October 26, 2009. About Greektown Casino Based in Detroit, Michigan, Greektown Holdings, LLC, and its affiliates -- http://www.greektowncasino.com/-- operates world-class casino gaming facilities located in Detroit's historic Greektown district featuring more than 75,000 square feet of casino gaming space with more than 2,400 slot machines, over 70 tables games, a 12,500-square foot salon dedicated to high limit gaming and the largest live poker room in the metropolitan Detroit gaming market. Greektown Casino employs approximately 1,971 employees, and estimates that it attracts over 15,800 patrons each day, many of whom make regular visits to its casino complex and related properties. In 2007, Greektown Casino achieved a 25.6% market share of the metropolitan Detroit gaming market. Greektown Casino has also been rated as the "Best Casino in Michigan" and "Best Casino in Detroit" numerous times in annual readers' polls in Detroit's two largest newspapers. The Company and seven of its affiliates filed for Chapter 11 protection on May 29, 2008 (Bankr. E.D. Mich. Lead Case No. 08-53104). Daniel J. Weiner, Esq., Michael E. Baum, Esq., and Ryan D. Heilman, Esq., at Schafer and Weiner PLLC, represent the Debtors in their restructuring efforts. Judy B. Calton, Esq., at Honigman Miller Schwartz and Cohn LLP, represents the Debtors as their special counsel. The Debtors chose Conway MacKenzie & Dunleavy as their financial advisor, and Kurtzman Carson Consultants LLC as claims, noticing, and balloting agent. When the Debtor filed for protection from its creditors, it listed consolidated estimated assets and debts of $100 million to $500 million. Bankruptcy Creditors' Service, Inc., publishes Greektown Casino Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by Greektown Casino and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GREEKTOWN HOLDINGS: Luna Plan Faces Objection From Mgt., UAW ------------------------------------------------------------ Greektown Holdings, LLC, and Merrill Lynch Capital Corporation ask the Court to deny confirmation of the Chapter 11 Plan submitted by Luna Greektown LLC and Plainfield Asset Management and its affiliates. The Luna Plan has been unanimously rejected by the prepetition lenders and overwhelmingly rejected by all other classes of creditors, Daniel J. Weiner, Esq., at Schafer and Weiner PLLC, in Bloomfield Hills, Michigan, points out. Mr. Weiner contends that the Luna Plan improperly classifies the Luna Plan Proponents' Claim in order to "gerrymander" an accepting Class, and therefore does not comply with Sections 1129(a)(1) and 1129(a)(10) of the Bankruptcy Code. In addition, Mr. Weiner points out, the Luna Plan fails to comply with the cram-down provisions of Section 1129(b) of the Bankruptcy Code since under the Luna Plan, the Prepetition Lenders neither receive deferred cash payments equal to the value of their claims while retaining their liens, nor do they receive the "indubitable equivalent" equal to the value of their secured claims. For these reasons, Mr. Weiner asserts, on the Debtors' behalf, that the Luna Plan cannot be confirmed. UAW Objection The International Union, United Automobile, Aerospace and Agricultural Implement Workers of America, together with the Detroit Casino Council as a party to a collective bargaining agreement covering a substantial majority of the Debtors' hourly workforce, ask the Court to deny confirmation of the Chapter 11 Plan submitted by Luna Greektown LLC, but reserves its rights regarding the Plan submitted by the Debtors and Merrill Lynch Capital Corporation. Niraj R. Ganatra, Esq., the UAW's associate general counsel, notes that the Debtors' Plan provides for continued and future performance by the Debtors of the CBA while the Luna Plan does not specify any treatment of the CBA. "Rather, the [Luna Plan] retains broad powers allowing Debtors to reject executory contracts, up to and including the Effective Date," Mr. Ganatra points out. A Luna Plan cannot be confirmed if it operates to reject the CBA, he says. Hence, without the inclusion of certain modifications with respect to the CBA, the Luna Plan cannot be confirmed, Mr. Ganatra asserts. The UAW maintains that it opposes Court approval of any Plan providing rejection of the CBA. Creditors Committee Objection The Official Committee of Unsecured Creditors and Deutsche Bank Trust Company Americas, as Indenture Trustee for the Senior Notes, filed an objection to the Joint Plan of Reorganization submitted by the Debtors and Merrill Lynch Capital Corporation. The document, however, was filed under seal pursuant to the Court's order regarding discovery on the competing plans for Greektown Casino's reorganization. In a separate filing dated October 15, 2009, the Committee asked the Court not to confirm Luna Greektown LLC and Plainfield Asset Management LLC's Alternative Chapter 11 Plan. Representing the Committee, Joel D. Applebaum, Esq., at Clark Hill PLC, in Birmingham, Michigan, argues that the Luna Plan "piggybacks upon the Debtors' and Prepetition Lenders' remarkable undervaluation of the Debtors' gaming enterprise and defective financial projections." He elaborates that the Luna Plan compounds those defects by proposing a plan of reorganization premised on a grossly depressed valuation, which grants the Luna Plan Proponents a significant amount of equity in the Reorganized Debtors in exchange for marginal consideration, while virtually eliminating the rights of the Debtors' unsecured creditors. Mr. Applebaum points out that "to accomplish its coup, the Alternative Plan Proponents improperly construct[ed] a separate class of impaired creditors, namely a class comprised solely of the claims of the Alternative Plan Proponents, in violation of Section 1122(a) of the Bankruptcy Code." He contends that gerrymandering for the purpose of creating an accepting class of creditors has been flatly rejected by courts. The Luna Plan has been rejected by all classes of creditors, except that of the Alternative Plan Proponents, therefore the Luna Plan is not fair and equitable within the meaning of Section 1129(b) of the Bankruptcy Code, Mr. Applebaum emphasizes. In sum, the Committee asserts that the Luna Plan is not confirmable for these reasons: 1. It improperly classifies similar claims separately for the sole purpose of gerrymandering; 2. It provides for the payment of in excess of 100% of the Prepetition Lenders' claims; 3. It discriminates in treatment between holders of general unsecured claims; 4. It improperly provides for substantive consolidation of all of the Debtors' estates; 5. It grants improper releases to the Released Parties; 6. It violates the best interest of creditors test because under a proper liquidation analysis which would include the value of certain avoidance actions, unsecured creditors would receive more in a liquidation than under the Luna Plan; and 7. It was proposed in bad faith. Before the Committee filed its confirmation objection, it entered into a Court-approved stipulation with the Official Committee of Unsecured Creditors and Luna Greektown LLC and Plainfield Asset Management LLC and its affiliates for an extension of the Committee's time to object to the Debtors' Plan from October 13, 2009 to October 15, 2009. Jim & Viola Papas Objection Dimitrios Papas and Viola Papas, Pegasus Greektown Inc., Dionysis LLC, and Helicon Development LLC d/b/a/ Helicon Holdings oppose confirmation of the Chapter 11 Plan proposed by Luna Greektown LLC's and Plainfield Asset Management LCC and its affiliates. Lisa S. Gretchko, Esq., at Howard & Howard Attorneys PLLC, in Royal Oak, Michigan, contends that the Luna Plan is not confirmable because it violates Sections 524 and 553 of the Bankruptcy Code. The Papases timely filed Proofs of Claim against Kewadin Greektown Casino LLC and Monroe Partners LLC. The Luna Plan classifies the Papases' Kewadin Claim in Class 37, and the Monroe Claim in two separate classes, namely Class 34 and Class 35. "This treatment of the Papases' Monroe Claim is confusing, at best," Ms. Gretchko says. The Luna Plan, Ms. Gretchko contends, should not be confirmed until and unless the treatment of all claims is clear and understandable. She notes that as long as the Luna Plan is unclear, it is impossible for creditors to cast an informed ballot on the Luna Plan. Pegasus, Dionysis and Helicon each timely filed Proofs of Claim of up to $5,427,052, which are secured by rights of setoff, and have been put in Class 11 entitled "Other Allowed Secured Claims Against Greektown Casino LLC." On August 17, 2009, the Official Committee of Unsecured Creditors and Deutsche Bank Trust Company Americas filed a motion for authorization to initiate and prosecute avoidance claims on behalf of the Debtors' estates. Ms. Gretchko points out that without any factual support whatsoever, the Movants in the Avoidance Claim Motion assert that the transfers of proceeds from certain bonds allegedly issued by certain of the Debtors before the Petition Date purportedly "support colorable and extremely valuable Avoidance Claims" and that the potential defendants of the claims are insiders or former insiders of the Debtors, including the Papases, who allegedly received said proceeds without having given any discernable equivalent value in return." The Papases filed a response and reservation of rights to the Avoidance Claim Motion on September 1, 2009. A hearing on the Avoidance Claim Motion was conducted on September 3, 2009, but the Court has not yet issued a ruling as of presstime. Ms. Gretchko asserts that if the Court confirms either one of the competing Plans, then either the Debtors or other parties charged with commencing avoidance actions might file avoidance claims against the Papases. The Papases vehemently dispute the merits of any avoidance claims that might be raised against them, asserting that there is no factual or legal basis for those claims, nor have the Committee, Deutsche Bank or any other party alleged anything more than mere conjecture, conclusory allegations and self-serving rhetoric in their Avoidance Claim Motion or otherwise. Ted and Maria Gatzaros concur with the Papases and ask the Court to deny confirmation of the Debtors' Plan and the Luna Plan. The Gatzaros are the holders of allowed secured claims, having timely filed two proofs of claim against Kewadin Greektown Casino LLC and Monroe Partners LLC, each amounting to $56,336,740 plus other amounts more described in the Proofs of Claim. About Greektown Casino Based in Detroit, Michigan, Greektown Holdings, LLC, and its affiliates -- http://www.greektowncasino.com/-- operates world-class casino gaming facilities located in Detroit's historic Greektown district featuring more than 75,000 square feet of casino gaming space with more than 2,400 slot machines, over 70 tables games, a 12,500-square foot salon dedicated to high limit gaming and the largest live poker room in the metropolitan Detroit gaming market. Greektown Casino employs approximately 1,971 employees, and estimates that it attracts over 15,800 patrons each day, many of whom make regular visits to its casino complex and related properties. In 2007, Greektown Casino achieved a 25.6% market share of the metropolitan Detroit gaming market. Greektown Casino has also been rated as the "Best Casino in Michigan" and "Best Casino in Detroit" numerous times in annual readers' polls in Detroit's two largest newspapers. The Company and seven of its affiliates filed for Chapter 11 protection on May 29, 2008 (Bankr. E.D. Mich. Lead Case No. 08-53104). Daniel J. Weiner, Esq., Michael E. Baum, Esq., and Ryan D. Heilman, Esq., at Schafer and Weiner PLLC, represent the Debtors in their restructuring efforts. Judy B. Calton, Esq., at Honigman Miller Schwartz and Cohn LLP, represents the Debtors as their special counsel. The Debtors chose Conway MacKenzie & Dunleavy as their financial advisor, and Kurtzman Carson Consultants LLC as claims, noticing, and balloting agent. When the Debtor filed for protection from its creditors, it listed consolidated estimated assets and debts of $100 million to $500 million. Bankruptcy Creditors' Service, Inc., publishes Greektown Casino Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by Greektown Casino and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GREEKTOWN HOLDINGS: Luna/Plainfield Want Mgt. Plan Rejected ----------------------------------------------------------- Luna Greektown LLC and Plainfield Asset Management LLC and its affiliates ask the Court to deny confirmation of the Chapter 11 Plan submitted by Greektown Holdings LLC and and Merrill Lynch Capital Corporation. Katherine R. Catanese, Esq., at Foley & Lardner LLP, in Detroit, Michigan, contends that the Debtors' Plan continues to ignore the "elephant in the room," which is the requirement of satisfying the standards for licensing a casino under Michigan law. She adds that the Debtors' Plan still fails to provide any mechanism for the equity holders in the Reorganized Debtors to either (i) be licensed by the Michigan Gaming Control Board to own a casino, or (ii) qualify for any exemptions to the MGCB's licensing requirements. The Debtors' Plan is conditioned on the Prepetition Lenders' ability to obtain licensing from the MGCB or to be exempt, but the Debtors have not provided any information on how that condition will be satisfied, Ms. Catanese tells the Court. "[Moreover,] nowhere in the Debtors' Plan is there any indication that any Prepetition Lenders intend to become licensed, instead, it appears highly likely that many of the PrePetition Lenders will seek to avail themselves of exemptions," Ms. Catanese points out. She adds that if all, or virtually all of the Prepetition Lenders attempt to claim exemptions, the Debtors' creditors could run the risk that: (1) the MGCB would conclude that granting everyone an exemption would in effect swallow the licensing requirements; or (2) if the MGCB does not reach that conclusion, the business may suffer from the lack of an active, engaged owner, thereby diminishing recoveries for all stakeholders. For these reasons, Ms. Catanese asserts that the Debtors' Plan therefore fails to comply with Michigan law and cannot be confirmed. About Greektown Casino Based in Detroit, Michigan, Greektown Holdings, LLC, and its affiliates -- http://www.greektowncasino.com/-- operates world-class casino gaming facilities located in Detroit's historic Greektown district featuring more than 75,000 square feet of casino gaming space with more than 2,400 slot machines, over 70 tables games, a 12,500-square foot salon dedicated to high limit gaming and the largest live poker room in the metropolitan Detroit gaming market. Greektown Casino employs approximately 1,971 employees, and estimates that it attracts over 15,800 patrons each day, many of whom make regular visits to its casino complex and related properties. In 2007, Greektown Casino achieved a 25.6% market share of the metropolitan Detroit gaming market. Greektown Casino has also been rated as the "Best Casino in Michigan" and "Best Casino in Detroit" numerous times in annual readers' polls in Detroit's two largest newspapers. The Company and seven of its affiliates filed for Chapter 11 protection on May 29, 2008 (Bankr. E.D. Mich. Lead Case No. 08-53104). Daniel J. Weiner, Esq., Michael E. Baum, Esq., and Ryan D. Heilman, Esq., at Schafer and Weiner PLLC, represent the Debtors in their restructuring efforts. Judy B. Calton, Esq., at Honigman Miller Schwartz and Cohn LLP, represents the Debtors as their special counsel. The Debtors chose Conway MacKenzie & Dunleavy as their financial advisor, and Kurtzman Carson Consultants LLC as claims, noticing, and balloting agent. When the Debtor filed for protection from its creditors, it listed consolidated estimated assets and debts of $100 million to $500 million. Bankruptcy Creditors' Service, Inc., publishes Greektown Casino Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by Greektown Casino and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GREENSHIFT CORP: Files Infringement Suit Against Westfalia ---------------------------------------------------------- The U.S. Patent and Trademark Office on October 13, 2009, issued U.S. Patent No. 7,601,858, titled "Method of Processing Ethanol Byproducts and Related Subsystems" (the '858 Patent") for the extraction of corn oil to GS CleanTech Corporation, a wholly-owned subsidiary of GreenShift Corporation. GS CleanTech Corporation filed a legal action on October 13, 2009 in the U.S. Bankruptcy Court for the Southern District of New York captioned GS CleanTech Corporation v. GEA Westfalia Separator, Inc.; and DOES 1-20, alleging infringement of the '858 Patent. On October 13, 2009, GreenShift filed a Motion to Dismiss with the same court relative to a separate complaint filed previously by Westfalia alleging (1) false advertising in violation of the Lanham Act ss. 43(a); (2) deceptive trade practices and false advertising in violation of New York General Business Law ss.ss. 349, 350 and 350-a; and (3) common law unfair competition. On October 13, 2009, Westfalia filed its First Amended Complaint in the matter captioned GEA Westfalia Separator, Inc. and Ace Ethanol, LLC v. GreenShift Corporation, which compliant included Ace Ethanol, an ethanol production company, and added claims seeking a declaratory judgment of invalidity or non-infringement. On October 13, 2009, ICM, Inc., filed a complaint in the United States District Court (Kansas District) in the matter captioned ICM, Inc. v. GS CleanTech Corporation and GreenShift Corporation, alleging unfair competition, interference with existing and prospective business and contractual relationships, and deceptive trade practices. ICM is also seeking declaratory judgment of invalidity and non-infringement of the '858 patent. About GreenShift GreenShift Corporation develops and commercializes clean technologies that facilitate the efficient use of natural resources. It owns four corn oil extraction facilities located in Oshkosh, Wisconsin; Medina, New York; Marion, Indiana; and Riga, Michigan. It has also installed one facility in Albion, Michigan under a modified version of its market offering where clients paid the Company to build the extraction facility. As of June 30, 2009, the Company had $20,799,615 in total assets and $73,835,046 in total liabilities, resulting in $53,035,432 in stockholders' deficit. GreenShift said management intends to raise capital from debt and equity transactions to fund operations, to increase revenue and to cut expenses to reduce the loss from operations. There can be no assurances that the Company will be able to eliminate both its working capital deficit and its operating losses. GRUBB & ELLIS: Kojaian Discloses 24.6% Equity Stake --------------------------------------------------- Kojaian Holdings LLC, Kojaian Ventures, L.L.C., and C. Michael Kojaian disclosed holding 16,045,322 shares or roughly 24.6% of the outstanding shares of Grubb & Ellis Company Common Stock. As reported by the Troubled Company Reporter, Grubb & Ellis on October 1, 2009, obtained an amendment to its senior secured revolving credit facility which, among other things, modifies and provides the Company an extension from September 30, 2009, to November 30, 2009, to (i) effect its recapitalization plan and in connection therewith to effect a prepayment of at least 72% of the Revolving Credit A Advances, and (ii) sell four commercial properties, including the two real estate assets that the Company had previously acquired on behalf of Grubb & Ellis Realty Advisors, Inc. About Grubb & Ellis Company Named to The Global Outsourcing 100(TM) in 2009 by the International Association of Outsourcing Professionals(TM), Grubb & Ellis Company (NYSE: GBE) -- http://www.grubb-ellis.com/-- is one of the largest and most respected commercial real estate services and investment companies in the world. Its 6,000 professionals in more than 130 company-owned and affiliate offices draw from a unique platform of real estate services, practice groups and investment products to deliver comprehensive, integrated solutions to real estate owners, tenants and investors. The firm's transaction, management, consulting and investment services are supported by highly regarded proprietary market research and extensive local expertise. Through its investment subsidiaries, the company is a leading sponsor of real estate investment programs that provide individuals and institutions the opportunity to invest in a broad range of real estate investment vehicles, including public non-traded real estate investment trusts (REITs), tenant-in-common (TIC) investments suitable for tax-deferred 1031 exchanges, mutual funds and other real estate investment funds. HARRAH'S OPERATING: S&P Downgrades Rating on $9.25 Bil. Facilities ------------------------------------------------------------------ Standard & Poor's Ratings Services said it lowered its issue-level rating on Harrah's Operating Co. Inc.'s $9.25 billion senior secured credit facilities and $2.095 billion senior secured notes, and removed the ratings from CreditWatch with negative implications, where they were placed on Sept. 22, 2009. As outlined in S&P's press release on Sept. 22, 2009, given the greater amount of first-lien senior secured debt outstanding following the funding of the $1 billion incremental senior secured term loans, S&P revised its recovery rating on these issues to '2' from '1'. The '2' recovery rating indicates S&P's expectation of substantial (70% to 90%) recovery for lenders in the event of a payment default. In addition, S&P lowered its issue-level rating on these issues to 'B-' (one notch higher than the 'CCC+' corporate credit rating) from 'B', in accordance with S&P's notching criteria for a '2' recovery rating. The corporate credit rating on Harrah's Entertainment Inc. is 'CCC+' and the rating outlook is developing. The rating reflects the company's weak credit metrics and limited liquidity. In addition, it reflects S&P's expectation for continued negative trends in net revenues and EBITDA over the next few quarters, which could challenge Harrah's ability to service its debt obligations given extremely thin EBITDA coverage of interest. Ratings List Harrah's Operating Co. Inc. Corporate Credit Rating CCC+/Developing/-- Ratings Lowered; Recovery Rating Revised Harrah's Operating Co. Inc. To From -- ---- Senior Secured B- B/Watch Neg Recovery Rating 2 1 HARVEST OIL: Plan Confirmation Hearing to Begin Nov. 9 ------------------------------------------------------ The U.S. Bankruptcy Court for the Western District of Louisiana has approved Harvest Oil & Gas, LLC, et al.'s second amended disclosure statement in support of the second amended plan of reorganization of the Debtors dated October 6, 2009. The approval of the disclosure statement paves the way for the Debtors to solicit support on the Plan, then approval of the Plan at the confirmation hearing. The Court fixed November 4, 2009, as the last date for filing written acceptances or rejections of the Plan. November 4, 2009, is also fixed as the last date for filing and serving objections, if any, to the confirmation of the Plan. November 9, 10, 12, and 13, 2009, at 9:00 a.m. are fixed as the dates and times for hearing on confirmation of the Plan. A copy of the second amended plan of reorganization is available for free at http://bankrupt.com/misc/harvestoil.chapter11plan.pdf A copy of the second amended disclosure statement, which details the terms of the second amended plan of reorganization, is available for free at: http://bankrupt.com/misc/harvestoil.disclosurestatement.pdf Macquarie's secured claim under Class 2 will be paid in cash in accordance with the terms of the Macquarie Credit Agreement. Wayzata's secured claim under Class 3, in the event that it votes to accept the Debtors' Plan, will be paid in cash in accordance with the terms of the Wayzata Credit Agreement. In addition, on the later of the Plan's Effective Date and the date Wayzata's secured claim becomes an allowed secured claim, the holder of the allowed secured claim will receive the Wayzata New Shares. Each holder of General unsecured claims under Class 6 will receive in cash, at the written election of said holder made at or prior to the confirmation hearing, (i)(x) 90% of of the amount of the allowed general unsecured claim on the Effective Date and (y) 10% of the amount of the allowed general unsecured claim 90 days after the Effective Date plus interest on the allowed general unsecured claim at the applicable interest rate plus applicable fees as provided by applicable law that are allowed; or (ii) 100% of the allowed general unsecured claim on the Effective Date plus interest on the allowed general unsecured claim for the applicable interest period at the federal interest rate. Non-Warrant Equity Interests in Saratoga Resources, Inc. under Class 9 will retain their allowed Equity Interests, which will be converted to identical Equity Interests in Reorganized Saratoga on the Effective Date; provided that holders of these allowed Non- Warrant Equity Interests in Saratoga will receive no distribution in respect of their allowed Non-Warrant Equity Interests until all allowed claims are paid in full in accordance with the terms of the Plan. Holders of allowed Warrants in Saratoga under Class 10 will retain their allowed Equity Interests, which will be converted to identical Equity Interests in Reorganized Saratoga on the Effective Date; provided that holders of these allowed Warrants in Saratoga will receive no distribution in respect of their allowed Warrants or the Non-Warrant Equity Interests issuable upon the exercise of the Warrants until all allowed claims are paid in full in accordance with the terms of the Plan. Classes of Claims and Equity Interests The Plan places the various claims against and Interests in the Debtors into 10 classes: Class 1 -- Priority Unsecured Claims Class 2 -- Macquarie Secured Claim Class 3 -- Wayzata Secured Claim Class 4 -- Oil Well Lien Act Claims Class 5 -- Other Secured Claims Class 6 -- General Unsecured Claims Class 7 -- State Lessor Audit Royalty Claims Class 8 -- Management Note Claim Class 9 -- Non-Warrant Equity Interests Class 10 -- Warrants Claimants under classes 2, 3, 4, 5, 6, 7, 8, and allowed Equity Interests under classes 9 and 10 are entitled to vote to accept or reject the Plan. Class 1 is unimpaired under the Plan and is deemed to have accepted the Plan. About Harvest Oil and Gas, LLC Headquartered in Covington, Louisiana, Harvest Oil and Gas, LLC -- http://www.harvest-oil.com/-- is engaged in the acquisition, development and exploration of energy resources. The Debtors have approximately 110 wells in production, including 109 wells in Louisiana and one well in Texas. The Debtor and its debtor- affiliates filed for Chapter 11 protection on March 31, 2009 (Bankr. W.D. La. Lead Case No. 09-50397). Robin B. Cheatham, Esq., at Adams & Reese LLP, represents the Debtors in their restructuring efforts. The Debtors listed between $100 million and $500 million each in assets and debts. HEIDTMAN MINING: Court Extends Exclusive Plan Filing to January 10 ------------------------------------------------------------------ The U.S. Bankruptcy Court for the Western District of Arkansas extended Heidtman Mining, LLC's exclusive periods to file a Plan of Reorganization and solicit acceptances of the Plan to Jan. 10, 2010, and March 9, 2010. Toledo, Ohio-based Heidtman Mining, LLC, filed for Chapter 11 on June 12, 2009 (Bankr. W.D. Ark. Case No. 09-72912). George H. Tarpley, Esq., Marcus Jermaine Watson, Esq., at Cox Smith Matthews Incorporated; and Mark W. Hodge, Esq., at Chisenhall, Nesturd & Julian, represent the Debtor in its restructuring efforts. The Debtor estimated $10 million to $50 million in assets and $50 million to $100 million in debts in its bankruptcy petition. HIDEAWAY MARINA: Files for Chapter 11 Bankruptcy Protection ----------------------------------------------------------- Pierre Gaudreau has filed a bankruptcy petition to put his marina company, the Hideaway Marina Limited Partnership, into Chapter 11 bankruptcy protection, listing $11.5 million in assets and $6.9 million in liabilities, which include: -- $3 million owed to Landmark Bank on the property, which is valued at $6.5 million; -- $1.6 million judgment to Tom Gonzales of TG Inv. LLC; and -- $1.2 million in promissory notes owed to John and Sabrina Divine. Court documents say that the Hideaway Marina has been in the hands of a receiver since June. Hideaway Marina Limited Partnership is a marina in Pompano Beach, Florida. IL LUGANO: Wants to Sell Condominium Unit No. 1206 for $506,000 --------------------------------------------------------------- IL Lugano, LLC, asked the U.S. Bankruptcy Court for the District of Connecticut for authority to sell its condominium unit free and clear of liens, claims and encumbrances pursuant to Section 363 of the Bankruptcy Code. The Debtor related that the hotel portion of its property in Fort Lauderdale, Florida has 23 condominium units, 10 units of which were sold to third parties. Peter and Julie Whittington agreed to purchase Unit No. 1206 for $505,620. The Debtor proposed to close the sale on Oct. 14, 2009. Based in Fort Lauderdale, Florida, IL Lugano, LLC is the owner of a 4-star, boutique-style, luxury condominium-hotel property located in Fort Lauderdale, Florida, which opened to the public on January 16, 2008. The Debtor is a wholly owned subsidiary of SageCrest Vegas LLC, which is a wholly owned subsidiary of SageCrest II LLC. On August 17, 2008, SageCrest II, LLC and SageCrest Holdings Limited each filed a voluntary petition for Chapter 11 protection (Bankr. D. Conn. Lead Case No. 08-50754). The hotel portion of the property has 105 rooms and the condominium portion of the property has approximately 23 condominium units. Since the Petition Date, IL Lugano has completed construction of an upscale Todd English restaurant, which opened to the public on November 17, 2008, and is expected to generate substantial additional revenue. The Company filed for Chapter 11 protection on August 29, 2008 (Bankr. D. Conn. Case No. 08-50811). Douglas J. Buncher, Esq., at Neligan Foley LLP, and James Berman, Esq., at Zeisler and Zeisler, represent the Debtor as counsel. When the Debtor filed for protection from its creditors, it listed assets of between $50 million and $100 million and debts of between $1 million and $10 million. IL Lugano filed for bankruptcy to prevent any adverse judgment and subsequent enforcement actions against IL Lugano in a lawsuit filed by EPI NCL, LLLC, in the Circuit Court of the 17th Judicial Circuit of Broward County, Florida, which was set for trial on September 2, 2008, and to allow adequate time for completion of the restaurant and sale of the property. INDALEX HOLDINGS: Court Approves Committee's Bid to Convert Case ---------------------------------------------------------------- The Hon. Peter J. Walsh of the U.S. Bankruptcy Court for the District of Delaware, at the behest of the Official Committee of Unsecured Creditors, converted the Chapter 11 cases of Indalex Holdings Inc. and its debtor-affiliates to Chapter 7 liquidation proceedings. According to the Troubled Company Reporter on Sept. 28, 2009, the Committee relates that the Debtors, which are non-operating entities and insider Sun Capital Partners Inc. have postured these cases to eliminate any remaining chance of another creditor -- other than Sun Capital -- receiving a distribution from these Chapter 11 cases. While there are Chapter 11 cases that primarily benefit only secured creditors, in the present matter the purported secured creditor, Sun, is an insider that has received in excess of $80 million in potentially avoidable transactions and now seeks, among other things, waivers of those very actions in exchange for these cases continuing another few months, which continued period will result in a projected net loss to the bankruptcy estates of $761,000. According to the Committee, potential value can be derived for the benefit of creditors in these cases but only if the Court immediately converts these cases to Chapter 7. Sun Capital, through an affiliates, bought all of the outstanding capital stock of the Debtor Indalex Inc. and Canadian non-Debtor Indalex Limited from Honeywell International Inc. in a highly leveraged transaction on Feb. 2, 2006, it infused Sun Capital personnel throughout the Indalex organization and made certain that it maintained control going forward, said Michael J. Roeschenthaler, Esq., at McGuirewoods LLP in Pittsburgh, Pennsylvania. About Indalex Holdings Indalex Holdings Corp., a wholly owned subsidiary of Indalex Holdings Finance Inc., through its operating subsidiaries Indalex Inc. and Indalex Ltd., with headquarters in Lincolnshire, Illinois, is the second largest producer of soft alloy extrusion products in North America. The Company's aluminum extrusion products are widely used throughout industrial, commercial, and residential applications and are customized to meet specific end- user requirements. Indalex operates 10 extrusion facilities, 29 extrusion presses with circle sizes up to 20 inches, a variety of fabrication and close tolerance capabilities, two anodizing operations, two billet casting facilities, and six electrostatic paint lines, including powder coat capability. Indalex is indirectly controlled by private-equity investor Sun Capital Partners Inc. Sun Capital purchased Indalex in 2005 from Honeywell International Inc. for $425 million. Indalex is the 12th investment by Boca Raton, Florida-based Sun Capital to file in Chapter 11 since January 2006. Indalex Holdings and four affiliates filed for Chapter 11 on March 20 (Bankr. D. Del., Lead Case No. 09-10982). Donald J. Bowman, Jr., Esq., at Young, Conaway, Stargatt & Taylor, in Wilmington, Delaware, has been tapped as counsel. Epiq Bankruptcy Solutions LLC is the claims and noticing agent. In its bankruptcy petition, Indalex listed assets of $356 million against debt totalling $456 million. As reported in the TCR on July 28, 2009, the Bankruptcy Court has authorized Indalex to sell its business to Sapa Holding AB. Sapa offered to pay (i) $90.1 million in cash and for the Debtors' U.S. assets; and (ii) $31.7 million in cash for the Canadian assets. INVESTCORP BANK: Fitch Affirms Issuer Default Rating at 'BB+' ------------------------------------------------------------- Fitch Ratings has affirmed the long- and short-term Issuer Default Ratings of Investcorp Bank BSC and its subsidiaries Investcorp SA and Investcorp Capital Ltd at 'BB+' and 'B', respectively. In addition, Fitch also affirmed the individual ratings at 'C'. The long-term and individual ratings are also removed from Rating Watch Negative where they were placed on May 11, 2009. The Rating Outlook is Negative. The affirmation reflects Investcorp's strong Gulf-based alternative investment franchise and its recent $500 million capital raise. The firm's preference share issuance reduces near- term liquidity pressure and provides cushion against further asset value deterioration and earnings volatility. The firm's regulatory capital adequacy ratio of 20% at fiscal year-end (FYE) 2009 is a significant improvement from a low of about 13% in September 2008 and compares favorably to 18% at FYE08. Fitch notes that Investcorp has managed its liquidity during the financial crisis and paid down maturing debt and met client hedge fund redemptions without imposing gates. The lack of gates has helped the firm maintain its franchise and reputation with clients despite the losses experienced over the last year as was typical of most fund of hedge fund managers. The current ratings incorporate Investcorp's deleveraging efforts, which include the redemption of approximately $1.1 billion of its HF co-investments which was converted to liquidity. The company now has in excess of $1.2 billion in highly liquid assets (cash and similar). The trend for Investcorp's FoHF business has been positive in calendar year 2009, though significant market uncertainty remains. Fitch believes that over time Investcorp's balance sheet and earnings will exhibit less overall volatility as the firm reduces its on-balance sheet co-investments across private equity, real estate and hedge funds, though this will take some time to occur as legacy private equity and real estate exposures remain. Despite Investcorp's actions to reduce risk and leverage, Investcorp continues to confront a challenging operating environment for alternative investments, particularly in private equity and real estate, which is reflected in the Negative Outlook. The firm remains vulnerable to further deterioration from asset value declines in its private equity and real estate co-investments and faces limited exit opportunities in these segments. Client AUM has declined 31% since FYE08 to $8.9 billion at FYE09. The decline in AUM will depress fee generating ability in the future and it will likely take some time for the firm to get back to higher AUM levels. In addition, the lack of transaction activity in private equity and real estate has further reduced the firm's fees, and Fitch expects that these fees will take some time to recover given the weak operating environment. In addition, Investcorp has significant debt maturities coming due over the next three years. While the firm has reduced its reliance on short-term funding and has drawn down on its medium- term note facilities to extend its maturities, Investcorp has close to $863 million of debt maturing over the next year, with $480 million due before the end of calendar year 2009. Based on the firm's current cash position and liquidity it can meet its near-term debt maturities comfortably, but its financial flexibility will be hampered absent some level of refinancing. The company is currently negotiating with its lenders to refinance a portion of these facilities, which Fitch expects to occur before the end of the year. Without some level of debt refinancing, the company's financial flexibility and ability to continue to fund new commitments going forward will be more constrained and will likely lead to downward rating pressure. Further erosion in client AUM, coupled with material further deterioration in Investcorp's private equity and/or real estate co-investment valuations could also lead to negative rating pressure. On the other hand, the Negative Outlook could be resolved positively if there is improvement in the operating environment for alternative investment managers, which would include increasing client AUM, recovery in fees and positive valuation/realization momentum in the firm's private equity and real estate segments. Demonstration of positive, sustainable earnings, reduced balance sheet co-investing exposure, reduced leverage, and improved client AUM and its subsequent effect on increasing stable earnings could lead to possible positive ratings momentum over the long-term. Fitch has affirmed these ratings: Investcorp Bank BSC -- Long-term IDR at 'BB+'; -- Short-term IDR at 'B' -- Individual rating at 'C' -- Support '5'; -- Support floor 'NF'. Investcorp SA -- Long-term IDR at 'BB+'; -- Short-term IDR at 'B'; -- Individual rating at 'C' -- Support '5'; -- Support floor 'NF'. Investcorp Capital Ltd. -- Long-term IDR at 'BB+'; -- Senior debt at 'BB+'. -- Short-term IDR at 'B'; -- Individual rating at 'C' -- Support '5'. The long-term IDR, debt ratings, and individual ratings are also removed from Rating Watch Negative. The Rating Outlook is Negative. JACO ELECTRONICS: To Delist and Deregister Shares From Nasdaq ------------------------------------------------------------- Jaco Electronics, Inc., on October 16 said that it intends to file an application on Form 25 with the Securities and Exchange Commission to voluntarily withdraw its common shares from listing on The Nasdaq Stock Market's Global Market. Following the filing of the Form 25, the Company intends to deregister its shares and to cease publicly filing its periodic reports with the SEC. Jaco anticipates that its 10-K for the fiscal year ended June 30, 2009, will be its last publicly filed periodic report. Shares of Jaco's common stock are expected to continue trading on the "pink-sheets" following delisting and deregistration. Jaco noted that the reasons for its withdrawal from listing and registration relate to the cost of filing periodic reports with the SEC and meeting other applicable regulatory requirements, which are prohibitive for the Company at this time in light of its current financial position. Accordingly, Jaco believes it is in the best interests of shareholders at this time to significantly reduce such expenses, and that the anticipated cost savings from this action more than offset the benefits of being a reporting company. As previously disclosed, Jaco was informed in September 2009 by the Listing Qualifications Department of The Nasdaq Stock Market that the Company's common stock was subject to delisting from the Nasdaq Global Market and indicated that it was evaluating what actions it would take in response to the notices it received from NASDAQ. In addition, on October 14, 2009, the Company received a Delinquency Compliance Plan Alert Letter from NASDAQ due to its failure to timely file its Form 10-K for the fiscal year ended June 30, 2009. The Company believes that it may be difficult and expensive to seek to regain compliance with the NASDAQ continued listing requirements, and therefore has determined to voluntarily delist from NASDAQ. The Company does not intend at this time to arrange for a listing, registration or quotation on another national securities exchange or quotation medium. Commenting on the announcement, Jaco Electronics' Chairman and Chief Executive Officer, Joel Girsky, stated, "The decision by Jaco's Board of Directors to deregister and leave the Nasdaq Global Market was made after careful consideration of the advantages and disadvantages of being a SEC reporting company including the high costs and demands on management's time arising from compliance with the many SEC and Sarbanes-Oxley requirements. The current economic climate has not only impacted the capital markets, but the global display industry as well. As such, we are constantly looking for ways to reduce costs and increase shareholder value as we continue to focus our efforts on growing the core business and leveraging our comprehensive LCD offerings and integrated LCD solutions." Jaco Electronics, Inc. -- http://www.jacodisplays.com/-- is a distributor of active and passive electronic components used in the manufacture and assembly of electronic products to a variety of industrial original equipment manufacturers (OEMs). Jaco also sells products to contract electronics manufacturers, particularly in the Far East, who manufacture products for companies in select segments of the electronics industry. The Company also is a provider of flat panel display and supporting technology products and services. Jaco distributes a range of semiconductors (active components), including transistors, diodes, memory devices, microprocessors, micro controllers, other integrated circuits, active matrix displays and various board-level products, as well as passive products, consisting primarily of capacitors, resistors and electromechanical devices including power supplies, relays, switches, connectors and printer heads. Jaco distributes over 45,000 stock items. JFK AERO: Moody's Confirms 'Ba2' Ratings on Revenue Bonds --------------------------------------------------------- Moody's Investors Service has confirmed the Ba2 rating on the Special Airport Facility Revenue bond ratings of the JFK Aero, LLC, and revised the outlook to stable. This rating action resolves Moody's watchlist actions from April 3, 2009, when the ratings were downgraded and placed on review for downgrade due to Moody's concerns about the company's revenue levels as a result of the delinquent payments from Alliance Airlines (not rated). The confirmation reflects Moody's expectation that the company will achieve a debt service coverage of at least 1.0 times and meet all covenants for 2009 due to an agreement with Alliance Ground International, LLC (AGI, not rated) to guaranty the payment and terms of the Alliance lease. The rating level is based on the strong air cargo market at the airport, the strength of the facility's main tenants, lower than originally expected revenues, and reduced reserve levels. The bonds are supported by lease payments from the company's three tenants Alliance, Delta Air Lines (long term corporate family rated B2), and Lufthansa Cargo (long term corporate family rating Ba1). Alliance accounts for approximately 9.9% of the facility's revenues and has had a history of falling behind on its lease payments. AGI is now making the payments for Alliance, but at amount capped by the guaranty agreement. The company has maintained coverage near 1.3 times in recent years, but given the non-performance of the Alliance lease earlier in the year and the lower payments by AGI debt service coverage is expected to be 1.03 times for 2009. The company is projecting coverage to increase to 1.21 times for 2010 now that lease payments have stabilized. While lease revenues are not directly impacted by cargo throughput, the poor economic conditions that are affecting the global cargo industry present continuing risks to the project's revenues. Global trade volumes have been down approximately 10- 20% throughout 2009 and continued poor performance will pressure the finances of the tenants, which could impact their ability to pay monthly rent. This risk is offset by the strength of the project's main tenants Lufthansa and Delta, which represent 46.6% and 42.7% of the lease revenues, respectively. Cargo operations only represent a small part of the revenues for both of these large, stable airlines, but their low credit ratings and declining passenger traffic make serious financial problems an ever-present concern. Lease revenues are also stabilized by the long-term nature of the contracts of the main tenants. Delta's lease is through July 13, 2028, which extends beyond the maturation of the bonds on July 1, 2028. This lease represents one of the company's longest term leases demonstrating its commitment to the facility. The Lufthansa and Alliance leases have co-terminus expirations on June 30, 2013, in order to provide Lufthansa with the ability to expand its presence at the facility. This presents some renewal risk for the facility in the medium term, but Moody's does not expect this to be a strong concern because of the facility's location at John F. Kennedy International Airport (Port Authority of New York and New Jersey rated Aa3) one of the nation's largest international hubs and cargo centers. Moody's expects the limited reserves that secure this transaction will remain an ongoing concern in the medium term and this is a key component of the recent downgrade. The bonds are secured by a debt service reserve of $15.15 million, but other reserves are limited to only about $4.3 million in the supplemental reserve, capital improvement, surplus and earnings fund. The current lessees do not have any security on deposit, except for a $1.4 million letter of credit for the Delta lease that is provided by JPMorgan Chase. The Alliance lease was originally secured by $670 thousand in cash, but those funds were depleted during the months that Alliance failed to make its required lease payments. The reserve position limits the flexibility of the structure to absorb further disruptions in lease payment streams before impacting the debt service reserve fund. Outlook The outlook is stable based on Moody's expectation that all tenants will continue to pay their lease payments on-time and AGI will continue to honor its commitments through the guaranty agreement. What Could Change the Rating Up: Significant improvements in debt service coverage that indicate wider financial margins or an increase of financial liquidity in funds pledged to the bondholder could place positive pressure on the rating. What Could Change the Rating Down: Disruptions in lease revenues or increases in operating expenses that narrow debt service coverage or require the company to draw on its financial or debt service reserves could pressure the rating downward. The last rating action was on April 3, 2009, when the ratings on the bonds were downgraded and placed on review for possible downgrade. The Aero JFK, LLC bond ratings were assigned by evaluating factors believed to be relevant to the credit profile of the issuer such as i) the business risk and competitive position of the issuer versus others within its industry or sector, ii) the capital structure and financial risk of the issuer, iii) the projected performance of the issuer over the near to intermediate term, iv) the issuer's history of achieving consistent operating performance and meeting budget or financial plan goals, v) the nature of the dedicated revenue stream pledged to the bonds, vi) the debt service coverage provided by such revenue stream, vii) the legal structure that documents the revenue stream and the source of payment, and viii) and the issuer's management and governance structure related to payment. KEARNEY CONSTRUCTION: Accused of Polluting, Richard E. Jacobs Says ------------------------------------------------------------------ Janet Leiser at Tampa Bay Business Journal reports that the Richard E. Jacobs Group -- developer of the Cypress Creek Town Center, a million-square-foot retail project that has faced numerous delays and environmental issues -- is alleging that Kearney Construction Co. is a "serial polluter" that places its profits above the protection of Florida's environment. According to Business Journal, Richard E. Jacobs blamed Kearney for its millions of dollars in damages from environmental fines to the loss of tenants to increased fees for brokers and lawyers, saying that the Company didn't install a temporary storm water management system at the 100-acre mall portion of the mixed-use site to protect Cypress Creek from runoff. Richard E. Jacobs alleged that it wouldn't have hired Kearney if it had known about the 30 or so warning notices issued against the contractor by the Hillsborough County Environmental Protection Commission's wetlands division for failing to control turbid storm water. Kearney didn't construct needed measures to divert storm water runoff from federally protected Cypress Creek, the report states, citing Richard E. Jacobs. J.G. Cypress Creek LLC, the Richard E. Jacobs entity developing the mall on State Road 56 at Interstate 75, said in court documents that Kearney "intended to gamble that there would be minimal rainfall during construction and that only minimal measures would be needed." According to court documents, Kearney assumed that the developers would be the ones that would have to pay if there were fines by federal or state agencies and that "even if Kearney was responsible for paying the fines, its cost savings in not constructing the necessary storm water control measures would far outweigh the likely amount of fines imposed." Kearney Construction Co., LLC, is a Florida limited liability company affiliated with Kearney Construction Company Inc., a family company with over 53 years of experience in the construction industry, specializing in site development and infrastructure construction including clearing, earthwork, utility construction, storm drainage, curbs, sidewalks, and roadwork including sub-base, base, and asphalt placement. KCC Co., LLC, and certain of its affiliates filed for Chapter 11 on Aug. 26, 2009 (Bankr. M.D. Fla. Case No. 09-18848). Two if its debtor-affiliates filed for separate Chapter 11 on June 4, 2009. Stephen R. Leslie, Esq., at Stichter, Riedel, Blain & Prosser, represents the Debtors in their restructuring effort. In its petition, Kearney listed assets and debts both ranging from $10,000,001 to $50,000,000. LANG HOLDINGS: May Let Go of Space in Jason Steiner's Building -------------------------------------------------------------- Tom Daykin at the Journal Sentinel reports that Jason Steiner, a developer who operates several buildings in Delafield, expects Lang Holdings, Inc., to cancel its lease for 7,000 square feet of office space. The Journal Sentinel relates that during the past two years, tenants in five of his buildings have either not renewed or cancelled leases as the companies have either downsized or gone out of business. Lang Holdings Inc. is a supplier of calendars, greeting cards, stationery and back-to-school supplies. Lang Holdings includes a number of brands which are some of the most well known in the gift, specialty and mass merchandiser markets, including LANG, Avalanche Publishing and Turner Licensing. Headquartered in Delafield, Wisconsin, Lang Holdings is owned by private equity firm Catterton Partners. The Company was acquired in 2003 by Catterton, who also owned Archway Cookies prior to its bankruptcy filing in 2008. The Company filed for Chapter 11 on July 16, 2009 (Bankr. D. Del. Case No. 09-12543). The petition said assets are more than $50 million while debt is less than $50 million. LEHMAN BROTHERS: Examiner Wants to Compel ABN to Produce Documents ------------------------------------------------------------------ Anton Valukas, the examiner appointed in the Chapter 11 cases of Lehman Brothers Holdings Inc. and its affiliated debtors, asks the Court to compel ABN AMRO Inc. to produce a set of documents in connection with his investigation into what caused the Debtors' bankruptcy. The move came after the examiner failed to obtain a set of documents from ABN AMRO, containing information about the short selling of the stock of LBHI or any of its affiliates. Instead of producing the documents, ABN AMRO, through a September 1 letter, objected to the subpoena sent by the examiner because the subpoena, according to ABN AMRO, would require disclosure of confidential information and documents protected from investigation, among other reasons. Robert Byman, Esq., at Jenner & Block LLP, in New York, says ABN AMRO's refusal to comply with the subpoena is baseless. "The mere possibility that a privilege may apply to some materials provides no basis to refuse compliance with the subpoena," he points out. Mr. Byman also says ABN AMRO's assertion that the production of documents would disclose confidential information is without merit as the examiner intends to execute a protective order for materials that would be provided. Mr. Valukas also asks the Court to compel ABN AMRO to provide a witness who can provide testimonies under oath concerning the company's information technology systems, which he could use to evaluate the company's accounts. The Court will hold a hearing on November 18, 2009, to consider approval of the request. ABN has until October 16, 2009, to file its objection. Creditors and other concerned parties, meanwhile, are given until October 9, 2009, to object. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy September 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition listed $639 billion in assets and $613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on September 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on September 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: AmEx Gets $3.9MM From Barclays as Part of Deal --------------------------------------------------------------- American Express Travel Related Services Company Inc. asks the U.S. Bankruptcy Court for the Southern District of New York to approve a revised settlement agreement with Barclays Capital Inc., which settlement requires Barclays to pay $3.9 million to American Express. The agreement also authorizes American Express to file a claim of not more than $7 million against Lehman Brothers Holdings Inc. and another $7 million claim against its retail brokerage, Lehman Brothers Inc. The original agreement was supposed to be presented to the Court for approval in September but it drew flak from LBHI and LBI's trustee, which prompted American Express and Barclays to revise the terms of the agreement. Under the revised deal, American Express' claim against LBHI was reduced by as much as $5.28 million. American Express is also required to amend the proof of claim it previously filed in Court, which seeks payment of $12.28 million. American Expressed also agreed to waive all other claims it may have against LBHI and LBI that stemmed from their contracts including the Business Travel Services Agreement and the Global Corporate Services Commercial Account Agreement, which will be deemed assumed and assigned to Barclays as of September 22, 2008. It also agreed to waive its claims against former LBHI employees who owe an undisclosed sum to American Express under the contracts. Barclays previously excluded the two contracts from a list of agreements it decided to assume as part of its acquisition of LBHI's North American broker-dealer business, a move that resulted in a month-long dispute with American Express and ended by the signing of the settlement agreement. A full-text copy of the settlement agreement is available for free at http://bankrupt.com/misc/LehmanSettlementAmEx.pdf About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy September 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition listed $639 billion in assets and $613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on September 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on September 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: Gets Nod to Hire Contract Attorneys Provider ------------------------------------------------------------- Lehman Brothers Holdings Inc. and its affiliated debtors obtained approval of the U.S. Bankruptcy Court for the Southern District of New York to employ DiscoverReady LLC as provider of contract attorneys effective October 15, 2008. The Debtors tapped the firm to provide them with lawyers who would review documents and assist in the production of those documents in connection with the investigation being conducted by Anton Valukas, the examiner appointed by the bankruptcy court, and by the Securities and Exchange Commission. Richard Krasnow, Esq., at Weil Gotshal & Manges LLP, in New York, says the employment of the contract attorneys through DiscoverReady would help the Debtors avoid the unnecessary expense of hiring an outside law firm or additional in-house attorneys to provide the services. Rather than paying DiscoverReady an hourly rate for its services, the Debtors negotiated a fixed fee amount per document that is reviewed. A copy of the document detailing the firm's fee structure is available for free at: http://bankrupt.com/misc/LehmanDiscoverReadyFees.pdf The Debtors will also reimburse DiscoverReady for all pre- approved travel and other out-of-pocket costs and expenses incurred by the firm in connection with its services. In connection with DiscoverReady's employment, the Debtors also seek a court ruling exempting the firm from filing interim fee applications or fee statements. Each contract attorney, however, will be required to execute an affidavit and disclosure statement, certifying that he does not represent or hold interest adverse to the Debtors and their estates. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy September 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition listed $639 billion in assets and $613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on September 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on September 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: TSFC Wants Prompt Decision on Reserve Fund Deals ----------------------------------------------------------------- Tobacco Settlement Financing Corporation asks the U.S. Bankruptcy Court for the Southern District of New York to compel Lehman Brothers Special Financing Inc. to either assume or reject their two contracts known as Reserve Fund Agreements. The agreements serve as investment vehicles through which TSF invests reserve funds as a source of backup payment for its debt on account of the tobacco settlement bonds it issued in 2003 pursuant to an indenture with Bank of New York. Under the agreements, LBSF is required to deliver securities to TSF in exchange for payment of purchase prices that are constructed to ensure that TSF receives guaranteed rates of return on its investments. LBSF reportedly defaulted under the two contracts when it filed for bankruptcy protection and failed to deliver securities in that resulted in TSF investing the reserve funds in replacement securities at a rate of return that was lower than the rate guaranteed under the agreements. "LBSF no longer conducts the type of business contemplated under the [agreements], and, therefore, LBSF cannot cure its prior failure to deliver securities and other defaults or perform its ongoing obligations to TSF," says TSF's attorney, Robert Michaelson, Esq., at K&L Gates LLP, in New York. According to Mr. Michaelson, it is unlikely that LBSF could find another company willing to assume its obligations given the changes in the market for the agreements in the past few years where interest rates on tobacco settlement backed bonds have increased sharply while general market rates have declined. He adds that LBSF has also been "out of the money" under the agreements since its bankruptcy filing. The Court will hold a hearing on October 14, 2009, to consider approval of the request. Creditors and other concerned parties have until October 8, 2009, to file their objections. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy September 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition listed $639 billion in assets and $613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on September 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on September 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: Wins Nod for Protocol on Transfer Loans to SPEs ---------------------------------------------------------------- Lehman Brothers Holdings Inc. and its affiliated debtors obtained court approval to implement a process for transferring their loans to "non-debtor special purpose entities" wholly-owned by LBHI. The loans to be transferred include commercial and residential mortgage loans, which are secured by real property or interests therein that may be subject to foreclosure or deeds and assignments in lieu of foreclosure. Jacqueline Marcus, Esq., at Weil Gotshal & Manges LLP, in New York, says the transfer of loans to the special purpose entities would ensure that the Debtors realize the value of the loans they transfer out of their estates. "Granting the relief requested would enable the Debtors to continue to efficiently foreclose on defaulting real estate loans and realize the economic value of the related [properties] without exposing the estate to potential liabilities arising from the [properties]," Ms. Marcus says, adding that it would also help the Debtors save administrative costs associated with separately seeking court approval for every single transaction. The Debtors, Ms. Marcus says, anticipate that many of their loans will be subject to foreclosure or other similar proceedings given the volatility that has developed in the mortgage lending market over the past two years as the value of real estate has declined and the risk of non-payment by the borrowers of mortgage loans has increased. The Debtors propose to implement this process for transferring their residential and commercial real estate loans: (1) Without further court order or approval of and notice to any party, the Debtors may transfer real estate loans or the related foreclosure judgments to the special purpose entities directly or indirectly wholly-owned by LBHI or Lunar Real Estate Holdings LLC, LBHI's subsidiary that was created for the sole purpose of owning the equity of the special purpose entities; and where a special purpose entity takes title to the property through execution of a deed in lieu of foreclosure, assignment in lieu of foreclosure or similar mechanism, grant releases to the borrowers, indemnitors and guarantors of their obligations under those loans. (2) To the extent the Debtors seek to sell real estate loans or properties held by a special purpose entity, or for that matter an entire special purpose entity holding those loans or properties, in one or more related transactions to the same purchaser, the aggregate value or purchase price of which is less than $10 million, the Debtors may sell the loans and the properties, or the special purpose entities holding the loans and properties without further court order or approval of any other party, provided that the Debtors will provide notice of the sale to the Official Committee of Unsecured Creditors following the closing of the sale. (3) With respect to a sale where (i) the aggregate value or purchase price of the real estate loans and properties included in the sale is equal to or greater than $10 million but less than $25 million; (ii) the purchase price of the loans and the properties is less than 50% of their aggregate value; or (iii) the purchaser is a person employed by the Debtors on or after September 15, 2007, or an entity unaffiliated with the Debtors for which a person they employed on or after September 15, 2007, is materially involved in the negotiations of the purchase of the loan, the Debtors will submit to the Creditors' Committee a summary of the proposed sale transaction identifying the loans and properties, their aggregate face value, the proposed purchaser, the purchase price and the material terms and conditions of the proposed sale. (4) The Creditors' Committee will be required to submit any objections to a sale identified in a Residential or Commercial Portfolio Sale Summary so as to be received by the Debtors within 10 days after service of the summary. In the event the Creditors' Committee objects to the sale, the Debtors may attempt to resolve the objection by furnishing the panel with additional information to demonstrate the reasonableness of the proposed dale. If the objection is not resolved, the Debtors may transfer the loans or properties held by the special purpose entity to LBHI, and file a motion in Court seeking approval of the sale. (5) For any sale where the aggregate value or purchase price of the real estate loans and properties is equal to or greater than $25 million, the Debtors will be required to file a motion in Court seeking approval of the sale and, to the extent deemed necessary by the Debtors, they may, without approval or notice, transfer the loans and the properties to LBHI in order to seek court approval of the sale. The Court will convene a hearing on September 15, 2009, to consider approval of the proposed procedures. Creditors and other concerned parties have until September 10, 2009, to file their objections. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy September 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition listed $639 billion in assets and $613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on September 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on September 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: Bankruptcy Fees Cross $400 Million Mark -------------------------------------------------------- Lehman Brothers Holdings Inc. paid a total of $402.9 million in fees and expense reimbursements to attorneys, financial advisers and other consultants since filing for bankruptcy on September 15, 2008, until Sept. 30, 2009. ($ in thousands) Filing Date Professionals Role Through Sept-09 -------------- ----- --------------- * Debtors - Section 363 Professionals Alvarez & Marsal LLC Interim Management $169,246 Kelly Matthew Wright Art Consultant and Auctioneer 38 Natixis Capital Markets Inc. Derivatives Consultant 6,027 * Debtors - Section 327 Professionals Bingham McCutchen LLP Special Counsel - Tax 6,044 Bortstein Legal LLC Special Counsel - IT 1,853 Curtis, Mallet-Prevost Colt & Mosle LLP Special Counsel - Conflicts 10,263 Ernst & Young LLP Audit and Tax Services 1,160 Huron Consulting Tax Services 1,136 Jones Day Special Counsel 7,759 Lazard Freres & Co. Investment Banking Advisor 11,864 McKenna Long & Aldridge LLP Special Counsel - Commercial Real Estate Lending 1,919 Reilly Pozner LLP Special Counsel - Mortgage Litigation and Claims 1,160 Simpson Thacher & Bartlett LLP Special Counsel - SEC Reporting, Asset Sales, and Congressional Testimony 1,730 Weil Gotshal & Manges LLP Lead Counsel 98,546 * Debtors - Claims and Noticing Agent Epiq Bankruptcy Solutions LLC Claims Mgt. & Noticing Agent 2,773 * Creditors - Sec. 327 Professionals FTI Consulting Inc. Financial Advisor 13,551 Houlihan Lokey Howard & Zukin Capital Inc Investment Banking Advisor 4,355 Milbank Tweed Hadley & McCloy LLP Lead Counsel 29,202 Quinn Emanuel Urquhart Oliver & Hedges LLP Special Counsel - Conflicts 2,935 Richard Sheldon, Q.C. Special Counsel - UK 68 * Examiner - Sec. 327 Professionals Duff & Phelps LLC Financial Advisor 13,629 Jenner & Block LLP Examiner 17,359 * Fee Examiner Feinberg Rozen LLP Fee Examiner 267 -------- Total Non-Ordinary Course Professionals 402,883 Debtors - Ordinary Course Professionals 14,126 US Trustee Quarterly Fees 378 -------- Total Professional Fees and UST Fees $417,387 ======== The figures reflected in the table represent cash disbursements from LBHI's filing date through the end of September 2009 and do not include holdback amounts required by court order for Non- Ordinary Course Professionals. The figures do not include accruals. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy September 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition listed $639 billion in assets and $613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on September 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on September 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: Says Negotiators Knew Barclays Got $5BB Discount ----------------------------------------------------------------- According to Bloomberg News, Lehman Brothers Holdings Inc. said in an unsealed court filing that executives who negotiated the sale of the bank's North American brokerage business to Barclays Plc knew they were giving the U.K.-based bank a $5 billion discount. Executives including Ian Lowitt, Paolo Tonucci and Bart McDade knew that Barclays was getting securities valued at about $50 billion for $45 billion in cash, according to a September motion unsealed Oct. 15 in U.S. Bankruptcy Court in New York in which Lehman asked for the return of some assets. Some executives negotiating the deal knew they would receive offers to work at Barclays after the sale, Lehman said, citing e-mails and deposition testimony. LBHI is asking the U.S. Bankruptcy Court for the Southern District of New York to revisit a ruling at the end of September 2008 approving the sale of its North American broker-dealer business to Barclays Capital Inc. The move by LBHI, which is now being led by Alvarez & Marsal, came following the results of LBHI's investigation into the sale, showing that the deal that closed differed from the one approved by the Court and allegedly gave the U.K. bank "immediate and enormous windfall profit" in the sum of $8.2 billion. LBHI clarified in its motion under Rule 60(b) of the Federal Rules of Civil Procedure that it is not necessary to undo the sale and said the Court only needs require Barclays to return to the Sellers' estates the value it took in excess of what LBHI and Lehman Brothers Inc. were entitled to convey based on the record before the Court. James W. Giddens, trustee for the Liquidation of Lehman Brothers Inc. under the Securities Investor Protection Act, filed its own Civil Rule 60(b) motion in the SIPA proceedings, alleging that the transfer of additional assets to Barclays in accordance with the Sept. 19, 2008 order by the Bankruptcy Court would create an unfair windfall for Barclays at the expense of public customers. Barclays purchased substantially all of Lehman's North American broker-dealer assets in a sale transaction negotiated, approved and executed within the span of a few days immediately following LBHI's filing for bankruptcy. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy September 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition listed $639 billion in assets and $613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on September 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on September 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEVEL 3: Closes Offering and Sale of $275MM of 7% Senior Notes -------------------------------------------------------------- Level 3 Communications, Inc., on October 15, 2009, consummated the transactions contemplated by a Securities Purchase Agreement that it executed with certain investors on October 1 in connection with the offering and sale of $275,000,000 aggregate principal amount of its 7% Convertible Senior Notes due 2015, Series B. The Notes are senior unsecured obligations of the Company, ranking equal in right of payment with all of the Company's existing and future unsubordinated indebtedness. The New Notes mature on March 15, 2015 and pay 7 percent annual cash interest. Interest on the Notes is payable on March 15 and September 15 of each year, beginning on March 15, 2010. The New Notes are convertible by holders into shares of the Company's common stock, par value $0.01 per share, at an initial conversion price of $1.80 per share (which is equivalent to a conversion rate of 555.5556 shares of Common Stock per $1,000 principal amount of the New Notes), subject to adjustment upon certain events, at any time before the close of business on March 15, 2015. Holders may require the Company to repurchase all or any part of their New Notes upon the occurrence of a designated event (change in control or a termination of trading) at a price equal to 100% of the principal amount of the New Notes, plus accrued and unpaid interest to, but excluding, the repurchase date, if any. In addition, if a holder elects to convert its New Notes in connection with certain changes in control, the Company will pay, to the extent described in the Second Supplemental Indenture governing the New Notes, a make-whole premium by increasing the number of shares deliverable upon conversion of such Notes. The New Notes were issued pursuant to an Indenture, dated as of December 24, 2008 -- Base Indenture -- between the Company and The Bank of New York Mellon, as Trustee, as supplemented by a Second Supplemental Indenture, dated as of October 15, 2009, between the Company and the Trustee. The offering was made pursuant to the Company's Registration Statement on Form S-3 (File No. 33-154976) filed on November 4, 2008. Under the Registration Statement, the Company may offer its debt and equity securities from time to time in one or more offerings. About Level 3 Broomfield, Colorado, Level 3 Communications, Inc. (NASDAQ: LVLT) -- http://www.Level3.com/-- provides fiber-based communications services. Level 3 offers a portfolio of metro and long-haul services, including transport, data, Internet, content delivery and voice. At June 30, 2009, the Company had $9.2 billion in total assets and $8.4 billion in total liabilities. * * * LVLT, along with its wholly owned subsidiary Level 3 Financing, Inc., has a 'B-' Issuer Default Rating and a Positive Rating Outlook. LYONDELL CHEMICAL: Shaw Entities File Disc. Statement Objections ---------------------------------------------------------------- Shaw Maintenance, Inc., and Shaw Global Energy Services, Inc.; H&S Constructors, Inc.; and the Port of Houston Authority complain that the Disclosure Statement accompanying the Debtors' Joint Plan of Reorganization does not contain adequate information for creditors to make an informed judgment with respect to the Plan. The Shaw Entities point out that the Disclosure Statement does not adequately describe the treatment of, and distributions on their Secured Claims, classified as Other Secured Claims under the Plan, that are due and payable prior to effective date of the Plan. WHM Custom Services, Inc.; Diamond Refractory Services, L.P.; M&I Electric Industries, Inc.; Tiger Tower Services, LLC; Oliver Equipment Company, Inc.; and Gajeske Incorporated, lienholders, join in the Shaw Entities' objection. H&S Constructors, for its part, argues that the Disclosure Statement is so deficient that H&S cannot even determine (i) which class its secured claim falls under the Plan, and (ii) the amount of debt on Debtor Equistar Chemicals, LP's refinery in Corpus Christi, Texas that is subject to H&S liens. H&S is a holder of $1,000,000 of mechanics and materialman's liens. Meanwhile, the Port of Houston Authority, a holder of $199,383 claims, contends that the Disclosure Statement fails to indicate and explain clearly the proposed distribution to the Port in the event that the Plan is confirmed or the Debtors liquidate under Chapter 7 of the Bankruptcy Code. Accordingly, the Objecting Parties ask the Court to deny the approval of the Disclosure Statement unless it is amended to correct the deficiencies raised in their objections. About Lyondell Chemical LyondellBasell Industries is one of the world's largest polymers, petrochemicals and fuels companies. It is the global leader in polyolefins technology, production and marketing; a pioneer in propylene oxide and derivatives; and a significant producer of fuels and refined products, including biofuels. Through research and development, LyondellBasell develops innovative materials and technologies that deliver exceptional customer value and products that improve quality of life for people around the world. Headquartered in The Netherlands, LyondellBasell -- http://www.lyondellbasell.com/-- is privately owned by Access Industries. Basell AF and Lyondell Chemical Company merged operations in 2007 to form LyondellBasell Industries, the world's third largest independent chemical company. LyondellBasell became saddled with debt as part of the US$12.7 billion merger. On January 6, 2009, LyondellBasell Industries' U.S. operations and one of its European holding companies -- Basell Germany Holdings GmbH -- filed voluntary petitions to reorganize under Chapter 11 of the U.S. Bankruptcy Code to facilitate a restructuring of the company's debts. The case is In re Lyondell Chemical Company, et al., Bankr. S.D.N.Y. Lead Case No. 09-10023). Seventy-nine Lyondell entities, including Equistar Chemicals, LP, Lyondell Chemical Company, Millennium Chemicals Inc., and Wyatt Industries, Inc. filed for Chapter 11. In May 2009, one of the cases was dismissed -- Case No. 09-10068 -- because it is duplicative of Case No. 09- 10040 relating to Debtor Glidden Latin America Holdings. The Hon. Robert E. Gerber presides over the case. Deryck A. Palmer, Esq., at Cadwalader, Wickersham & Taft LLP, in New York, serves as the Debtors' bankruptcy counsel. Evercore Partners serves as financial advisors, and Alix Partners and its subsidiary AP Services LLC, serves as restructuring advisors. AlixPartners' Kevin M. McShea acts as the Debtors' Chief Restructuring Officer. Clifford Chance LLP serves as restructuring advisors to the European entities. Lyondell Chemical estimated that consolidated assets total US$27.12 billion and debts total US$19.34 billion as of the bankruptcy filing date. Lyondell has obtained approximately US$8 billion in DIP financing to fund continuing operations. The DIP financing includes two credit agreements: a US$6.5 billion term loan, which comprises a US$3.25 billion in new loans and a US$3.25 billion roll-up of existing loans; and a US$1.57 billion asset-backed lending facility. Luxembourg-based LyondellBasell Industries AF S.C.A. and another affiliate were voluntarily added to Lyondell Chemical's reorganization filing under Chapter 11 on April 24, 2009, in order to seek protection against claims by certain financial and U.S. trade creditors. On May 8, 2009, LyondellBasell Industries added 13 non-operating entities to Lyondell Chemical Company's reorganization filing under Chapter 11 of the U.S. Bankruptcy Code. All of the entities are U.S. companies and were added to the original Chapter 11 filing for administrative purposes. The filings will have no impact on current business or operations as none of the entities manufactures or sells products. Bankruptcy Creditors' Service, Inc., publishes Lyondell Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lyondell Chemical Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LYONDELL CHEMICAL: To Close Carrington LDPE Plant in U.K. --------------------------------------------------------- LyondellBasell Industries announced that it will close the low density polyethylene (LDPE) plant located at its Carrington, U.K., site by the end of this year. "Taking into account the current market environment and our future projections, we've concluded that the plant is no longer economically viable," said Tassilo Bader, LyondellBasell Senior Vice President, Olefins and Polyethylene, Europe and International. "We are able to meet projected customer demand for LDPE with product supplies from our other LDPE facilities." LyondellBasell will focus its LDPE production activities in Europe at Wesseling, Germany and at the company?s world-scale plant located in Berre, France. "Market conditions require economies of scale and low conversion costs," Mr. Bader said. "With more than 300 KT of capacity, our Berre plant represents a dramatic step change in the production of LDPE, with superior investment and operational economics." With a nameplate capacity of 185 KT per year, the Carrington plant is one of the company's smallest LDPE manufacturing sites. LyondellBasell has begun consultations with Trade Union and employee representatives to determine the appropriate path forward for approximately 50 employees who will be affected by the closure of the LDPE facility. The 210 KT per year polypropylene plant located at the Carrington site is not affected by this business decision. About Lyondell Chemical LyondellBasell Industries is one of the world's largest polymers, petrochemicals and fuels companies. It is the global leader in polyolefins technology, production and marketing; a pioneer in propylene oxide and derivatives; and a significant producer of fuels and refined products, including biofuels. Through research and development, LyondellBasell develops innovative materials and technologies that deliver exceptional customer value and products that improve quality of life for people around the world. Headquartered in The Netherlands, LyondellBasell -- http://www.lyondellbasell.com/-- is privately owned by Access Industries. Basell AF and Lyondell Chemical Company merged operations in 2007 to form LyondellBasell Industries, the world's third largest independent chemical company. LyondellBasell became saddled with debt as part of the US$12.7 billion merger. On January 6, 2009, LyondellBasell Industries' U.S. operations and one of its European holding companies -- Basell Germany Holdings GmbH -- filed voluntary petitions to reorganize under Chapter 11 of the U.S. Bankruptcy Code to facilitate a restructuring of the company's debts. The case is In re Lyondell Chemical Company, et al., Bankr. S.D.N.Y. Lead Case No. 09-10023). Seventy-nine Lyondell entities, including Equistar Chemicals, LP, Lyondell Chemical Company, Millennium Chemicals Inc., and Wyatt Industries, Inc. filed for Chapter 11. In May 2009, one of the cases was dismissed -- Case No. 09-10068 -- because it is duplicative of Case No. 09- 10040 relating to Debtor Glidden Latin America Holdings. The Hon. Robert E. Gerber presides over the case. Deryck A. Palmer, Esq., at Cadwalader, Wickersham & Taft LLP, in New York, serves as the Debtors' bankruptcy counsel. Evercore Partners serves as financial advisors, and Alix Partners and its subsidiary AP Services LLC, serves as restructuring advisors. AlixPartners' Kevin M. McShea acts as the Debtors' Chief Restructuring Officer. Clifford Chance LLP serves as restructuring advisors to the European entities. Lyondell Chemical estimated that consolidated assets total US$27.12 billion and debts total US$19.34 billion as of the bankruptcy filing date. Lyondell has obtained approximately US$8 billion in DIP financing to fund continuing operations. The DIP financing includes two credit agreements: a US$6.5 billion term loan, which comprises a US$3.25 billion in new loans and a US$3.25 billion roll-up of existing loans; and a US$1.57 billion asset-backed lending facility. Luxembourg-based LyondellBasell Industries AF S.C.A. and another affiliate were voluntarily added to Lyondell Chemical's reorganization filing under Chapter 11 on April 24, 2009, in order to seek protection against claims by certain financial and U.S. trade creditors. On May 8, 2009, LyondellBasell Industries added 13 non-operating entities to Lyondell Chemical Company's reorganization filing under Chapter 11 of the U.S. Bankruptcy Code. All of the entities are U.S. companies and were added to the original Chapter 11 filing for administrative purposes. The filings will have no impact on current business or operations as none of the entities manufactures or sells products. Bankruptcy Creditors' Service, Inc., publishes Lyondell Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lyondell Chemical Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LYONDELL CHEMICAL: U.S. Govt. Object to 502 Claims Disallowance --------------------------------------------------------------- The United States, acting on behalf of the Environmental Protection Agency, the California Department of Toxic Substances Control, the California Regional Water Quality Board and the California State Water Resources Control Board, Los Angeles Region, allege that the Debtors' proposed disallowance of their claims under Section 502(e)(1)(B) of the Bankruptcy Code is an improper effort to preemptively impair the enforcement of authority of the United States and the California Environmental Agencies under federal and state environmental laws designed to protect human health and safety. Preet Bharara, Esq., assistant attorney for the Southern District of New York, argues that the Governmental Entities have not yet taken any enforcement action against the Debtors or, have taken any steps to secure the Debtors' compliance with their injunctive obligations. In these circumstances, the Comprehensive Environmental Response, Compensation, and Liability Act jurisdictionally bars the United States Bankruptcy Court for the Southern District of New York from conducting the type of preenforcement review sought by the Debtors. Thus, the issues raised in the Objections are not ripe for judicial resolution, he argues. Mr. Bharara further contends that the Debtors are wrong in asserting that their liability for injunctive obligations should be limited solely to property that they own and operate. This contention has been rejected by the Second Circuit in In re Chateaugay Corp., 944 F.2d 997 (2d Cir. 1991) as well as by the Third, Fourth, Fifth and Seventh Circuits, he cites. Under the Disclosure Statement accompanying the Debtors' Joint Plan of Reorganization, almost all of the Debtors that are subject of the Debtors' Objections will be liquidating and thus, are not entitled to discharge under Section 1114 of the Bankruptcy Code. Thus, the law is clear that injunctive obligations to remedy ongoing pollution are not claims dischargeable in bankruptcy, he maintains. The Governmental Entities, therefore, ask the Court to overrule the Debtors' Objections to their proofs of claim. In a separate request, the Governmental Entities ask the Court to withdraw the reference from the New York Bankruptcy Court to the United States District Court for the Southern District of New York of the Debtors' Objections to the Governmental Entities' Claims. Committee Supports Debtors The Official Committee of Unsecured Creditors supports the Debtors' Objections to the claims of the United States, the California Department of Toxic Substances Control, the California Regional Water Quality Board and the California State Water Resources Control Board. Steven D. Pohl, Esq., at Brown Rudnick LLP, in Boston, Massachusetts, points out that the analysis of whether the prepetition environmental injunctive or work obligations are claims under the Bankruptcy Code and settled case law depends on whether the Debtors owned the property or not. However, the Debtors never owned or operated these third party sites, he says. The Committee asks the Court to authorize the disallowance of the Governmental Entities Proofs of Claim related to prepetition environmental injunctive and work obligations associated with non-Debtor owned third party sites. About Lyondell Chemical LyondellBasell Industries is one of the world's largest polymers, petrochemicals and fuels companies. It is the global leader in polyolefins technology, production and marketing; a pioneer in propylene oxide and derivatives; and a significant producer of fuels and refined products, including biofuels. Through research and development, LyondellBasell develops innovative materials and technologies that deliver exceptional customer value and products that improve quality of life for people around the world. Headquartered in The Netherlands, LyondellBasell -- http://www.lyondellbasell.com/-- is privately owned by Access Industries. Basell AF and Lyondell Chemical Company merged operations in 2007 to form LyondellBasell Industries, the world's third largest independent chemical company. LyondellBasell became saddled with debt as part of the US$12.7 billion merger. On January 6, 2009, LyondellBasell Industries' U.S. operations and one of its European holding companies -- Basell Germany Holdings GmbH -- filed voluntary petitions to reorganize under Chapter 11 of the U.S. Bankruptcy Code to facilitate a restructuring of the company's debts. The case is In re Lyondell Chemical Company, et al., Bankr. S.D.N.Y. Lead Case No. 09-10023). Seventy-nine Lyondell entities, including Equistar Chemicals, LP, Lyondell Chemical Company, Millennium Chemicals Inc., and Wyatt Industries, Inc. filed for Chapter 11. In May 2009, one of the cases was dismissed -- Case No. 09-10068 -- because it is duplicative of Case No. 09- 10040 relating to Debtor Glidden Latin America Holdings. The Hon. Robert E. Gerber presides over the case. Deryck A. Palmer, Esq., at Cadwalader, Wickersham & Taft LLP, in New York, serves as the Debtors' bankruptcy counsel. Evercore Partners serves as financial advisors, and Alix Partners and its subsidiary AP Services LLC, serves as restructuring advisors. AlixPartners' Kevin M. McShea acts as the Debtors' Chief Restructuring Officer. Clifford Chance LLP serves as restructuring advisors to the European entities. Lyondell Chemical estimated that consolidated assets total US$27.12 billion and debts total US$19.34 billion as of the bankruptcy filing date. Lyondell has obtained approximately US$8 billion in DIP financing to fund continuing operations. The DIP financing includes two credit agreements: a US$6.5 billion term loan, which comprises a US$3.25 billion in new loans and a US$3.25 billion roll-up of existing loans; and a US$1.57 billion asset-backed lending facility. Luxembourg-based LyondellBasell Industries AF S.C.A. and another affiliate were voluntarily added to Lyondell Chemical's reorganization filing under Chapter 11 on April 24, 2009, in order to seek protection against claims by certain financial and U.S. trade creditors. On May 8, 2009, LyondellBasell Industries added 13 non-operating entities to Lyondell Chemical Company's reorganization filing under Chapter 11 of the U.S. Bankruptcy Code. All of the entities are U.S. companies and were added to the original Chapter 11 filing for administrative purposes. The filings will have no impact on current business or operations as none of the entities manufactures or sells products. Bankruptcy Creditors' Service, Inc., publishes Lyondell Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lyondell Chemical Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) MAGNA ENTERTAINMENT: Global Gaming Plans to Upgrade Remington Park ------------------------------------------------------------------ Murray Evans at The Associated Press reports that Global Gaming RP LLC, the likely new owners of Magna Entertainment Corp.'s Remington Park, told the Oklahoma Horse Racing Commission that it is planning upgrades on the park, including flat-screen televisions, renovated corporate boxes, and new or updated gaming machines in the casino. The AP relates that Global Gaming, which got the bankruptcy court's approval to buy the park, is awaiting racing license before the sale can become final. According to The AP, the commission could grant preliminary approval at its November 19 meeting. The Global Gaming would then ask for a special meeting in December for final approval, the report states, citing Randy Calvert, an attorney for Global Gaming RP and a former commission chairman. Based in Aurora, Ontario, Magna Entertainment Corp. is North America's largest owner and operator of horse racetracks based on revenue. The Company develops, owns and operates horse racetracks and related pari-mutuel wagering operations, including off-track betting facilities. MEC also develops, owns and operates casinos in conjunction with its racetracks where permitted by law. MEC owns and operates AmTote International, Inc., a provider of totalisator services to the pari-mutuel industry, XpressBet(R), a national Internet and telephone account wagering system, as well as MagnaBet(TM) internationally. Pursuant to joint ventures, MEC has a 50% interest in HorseRacing TV(R), a 24-hour horse racing television network, and TrackNet Media Group LLC, a content management company formed for distribution of the full breadth of MEC's horse racing content. Following its failure to meet obligations to lenders led by PNC Bank, National Association, and Wells Fargo Bank, National Association, and controlling shareholder MI Developments Inc.'s decision not to provide further financial backing, Magna Entertainment Corp. and 24 affiliates filed for Chapter 11 on March 5, 2009 (Bankr. D. Del. Lead Case No. 09-10720). Marcia L. Goldstein, Esq., and Brian S. Rosen, Esq., at Weil, Gotshal & Manges LLP, have been engaged as bankruptcy counsel. Mark D. Collins, Esq., L. Katherine Good, Esq., and Maris J. Finnegan, Esq., at Richards, Layton & Finger, P.A., are the Debtors' local counsel. Miller Buckfire & Co. LLC is the Debtors' investment banker and financial advisor. Kurtzman Carson Consultants LLC is the claims and noticing agent for the Debtors. Magna Entertainment Corp. had total assets of US$1.054 billion and total liabilities of US$947.3 million based on unaudited consolidated financial statements as of December 31, 2008. MAGNA ENTERTAINMENT: Lone Star Park Headed for Second Auction ------------------------------------------------------------- According to Bill Rochelle at Bloomberg News, Magna Entertainment Corp. will reopen the auction for the sale of Lone Star Park near Dallas, Texas. The new auction will take place Oct. 23. Until the Oct. 15 hearing, when another offer surfaced, Global Gaming LSP LLC thought it would receive the green light to buy the track for $27 million. The hearing to approve the sale to whomever makes the best offer on Oct. 23 will be held Oct. 28. Global Gaming will qualify for a breakup fee if it's outbid. The Bankruptcy Court has approved the procedures for the bidding an auction for Magna Entertainment Corp.'s Pimlico Race Course, home to the Preakness Stakes, and Laurel Park race course, in Maryland. Magna Entertainment has proposed: * an auction for the tracks in Pimlico and Laurel Park in Maryland on Jan. 8, with bids due November 2, and a sale hearing on Jan. 11; * a Feb. 25 auction for the tracks Santa Anita and Golden Gate Fields in California, and Gulfstream in Florida; with bids due Feb. 10 and a sale hearing on Feb. 26 Bloomberg relates that Magna already sold several tracks to generate $157 million to $205 million. The tracks sold include Remington Park and Thistledown. In addition, the $27 million sale of Lone Star Park is scheduled for approval at a hearing on Oct. 14. About Magna Entertainment Based in Aurora, Ontario, Magna Entertainment Corp. is North America's largest owner and operator of horse racetracks based on revenue. The Company develops, owns and operates horse racetracks and related pari-mutuel wagering operations, including off-track betting facilities. MEC also develops, owns and operates casinos in conjunction with its racetracks where permitted by law. MEC owns and operates AmTote International, Inc., a provider of totalisator services to the pari-mutuel industry, XpressBet(R), a national Internet and telephone account wagering system, as well as MagnaBet(TM) internationally. Pursuant to joint ventures, MEC has a 50% interest in HorseRacing TV(R), a 24-hour horse racing television network, and TrackNet Media Group LLC, a content management company formed for distribution of the full breadth of MEC's horse racing content. Following its failure to meet obligations to lenders led by PNC Bank, National Association, and Wells Fargo Bank, National Association, and controlling shareholder MI Developments Inc.'s decision not to provide further financial backing, Magna Entertainment Corp. and 24 affiliates filed for Chapter 11 on March 5, 2009 (Bankr. D. Del. Lead Case No. 09-10720). Marcia L. Goldstein, Esq., and Brian S. Rosen, Esq., at Weil, Gotshal & Manges LLP, have been engaged as bankruptcy counsel. Mark D. Collins, Esq., L. Katherine Good, Esq., and Maris J. Finnegan, Esq., at Richards, Layton & Finger, P.A., are the Debtors' local counsel. Miller Buckfire & Co. LLC is the Debtors' investment banker and financial advisor. Kurtzman Carson Consultants LLC is the claims and noticing agent for the Debtors. Magna Entertainment Corp. had total assets of US$1.054 billion and total liabilities of US$947.3 million based on unaudited consolidated financial statements as of Dec. 31, 2008. MAINLINE CONTRACTING: Must File Plan of Reorganization by Jan. 13 ----------------------------------------------------------------- The Honorable Randy D. Doub, United States Bankruptcy Judge for the Eastern District of North Carolina, has ordered Mainline Contracting, Inc. to file a disclosure statement and plan of organization on or before January 13, 2010. As reported in the Troubled Company Reporter on October 13, 2009, Mainline Contracting asked the Bankruptcy Court for authority to use cash collateral of Branch Banking and Trust Company to make payment of its ordinary operating expenses including payroll, rent, and job associated expenses. The Debtor related that Branch Banking and Trust Company claims to be owed $2.9 million on the line of credit. BB&T also has an equipment loan on which $12.2 million is owed. The Debtor granted a security interest in its accounts receivable to Branch Banking and Trust in connection with a line of credit. The Debtor estimates that its cash collateral is valued in excess of the obligation to BB&T. BB&T Objects Branch Banking and Trust Company, a secured creditor, through its counsel, Howard, Stallings, From & Hutson, P.A., objected to the Debtor's cash collateral motion relating that (a) it does not consent to the Debtor's use of its cash collateral or the a lien on Debtor's Borrower Investor's Deposit Account ending 7975; and (b) it must be provided adequate protection for the Debtor's use of cash collateral. About Mainline Contracting Durham, North Carolina-based Mainline Contracting, Inc., operates a construction company. The Company filed for Chapter 11 on Sept. 15, 2009 (Bankr. E.D.N.C. Case No. 09-07927). Everett Gaskins Hancock & Stevens, LLP, represents the Debtor in its restructuring effort. In its schedules, the Debtor listed total assets of $23,027,505 and total liabilities of $33,280,644. MDC PARTNERS: Moody's Assigns Corporate Family Rating at 'B1' ------------------------------------------------------------- Moody's Investors Service assigned MDC Partners Inc. a B1 Corporate Family Rating, B1 Probability of Default Rating and SGL- 2 Speculative Grade Liquidity rating, and also assigned a B2 rating to MDC's proposed $200 million issuance of senior unsecured notes due 2016. These first-time ratings for MDC are assigned in connection with the company's proposed refinancing of its debt with the net proceeds from the note offering. The rating outlook is stable. Assignments: Issuer: MDC Partners Inc. -- Corporate Family Rating, Assigned B1 -- Probability of Default Rating, Assigned B1 -- Speculative Grade Liquidity Rating, Assigned SGL-2 -- $200 Million Senior Unsecured Notes due 2016, Assigned B2, LGD4-65% Outlook Actions: Issuer: MDC Partners Inc. -- Outlook, Assigned Stable MDC's B1 CFR reflects the company's modest revenue base and cash flow, and below average industry margins generated from its position as the ninth largest marketing services network in the world. MDC offers a full suite of marketing services, with good creative execution and experience with digital marketing channels leading to some major accounts and strong organic growth during the last economic expansion. The company is nevertheless vulnerable to changes in cyclical client spending, and its much higher client, industry and geographic concentration than rated peers creates greater potential revenue and cash flow volatility from the win or loss of key clients and/or creative personnel. MDC has historically undergone shifts in its business mix, but has operated solely in the marketing services business since the end of 2006 (Moody's expects this focus to continue). MDC will likely seek to supplement organic business development with acquisitions, which creates event risk and potential leverage volatility. Debt- to-EBITDA leverage (incorporating Moody's standard adjustments) is high at present, but Moody's expects it will fall to a low 4x range in 2010. The company is targeting a conservative 1x net debt-to-EBITDA leverage ratio (excluding Moody's standard adjustments with EBITDA calculated before stock compensation expense). With a decline in leverage, the financial profile could support a higher rating over time if accompanied by margin improvement and greater scale and diversity. The stable rating outlook reflects Moody's expectation that MDC will generate good free cash flow and maintain a good liquidity profile as it navigates the current economic downturn and executes its growth strategy, and that leverage will decline over the next 18 months. The B2 rating on the senior unsecured notes reflects both the structural and effective subordination to the company's proposed $75 million (unrated) senior secured revolving credit facility. The revolver will be secured by substantially all of the assets of domestic subsidiaries and guaranteed by MDC and all of its present and future subsidiaries. The unsecured notes will be effectively subordinated to the secured revolver and additionally structurally subordinated with respect to non wholly-owned subs, which will guarantee the revolver but not the notes. MDC generated approximately 72% of LTM 6/30/09 EBITDA from wholly-owned subsidiaries, but this percentage could decline as MDC tends to purchase less than a 100% ownership interest when completing acquisitions. The notes' degree of structural subordination to the credit facility and operating company liabilities (such as trade payables) would increase if assets and earnings at non wholly-owned subsidiaries grow in relation to the consolidated entity. MDC's ratings were assigned by evaluating factors Moody's believe are relevant to the credit profile of the issuer, such as i) the business risk and competitive position of the company versus others within its industry, ii) the capital structure and financial risk of the company, iii) the projected performance of the company over the near to intermediate term, and iv) management's track record and tolerance for risk. These attributes were compared against other issuers both within and outside of MDC's core industry and MDC's ratings are believed to be comparable to those of other issuers of similar credit risk. MDC Partners Inc. is a marketing communications and consulting services holding company whose agencies serve customers across the globe. Annual revenues approximate $550 million. MGIC INVESTMENT: Posts $517.8-Mil. Net Loss in Third Qtr. 2009 -------------------------------------------------------------- MGIC Investment Corporation reported a net loss for the quarter ended September 30, 2009 of $517.8 million, compared with a net loss of $115.4 million for the same quarter a year ago. Diluted loss per share was $4.17 for the quarter ending September 30, 2009, compared to diluted loss per share of $0.93 for the same quarter a year ago. The net loss for the first nine months of 2009 was $1.042 billion, compared with a net loss of $249.8 million for the same period last year. For the first nine months of 2009, diluted loss per share was $8.39 compared with a diluted loss per share of $2.26 for the same period last year. Curt S. Culver, chairman and chief executive officer of MGIC Investment Corporation and Mortgage Guaranty Insurance Corporation ("MGIC"), said that he was pleased to report that Fannie Mae has approved MGIC Indemnity Corporation ("MIC"), a wholly owned MGIC subsidiary, as an approved mortgage insurer in selected jurisdictions and that we are working closely with Freddie Mac and hope to have their approval soon. He added that once Freddie Mac's approval is finalized that he is optimistic that the Office of the Commissioner of Insurance for the State of Wisconsin will issue a decision allowing the reactivation of MIC in the very near future. Relative to operating results he stated that the weak economy, higher unemployment and lower home prices continue to keep cure rates low which resulted in an increase in the delinquent inventory and consequently higher losses incurred for the quarter. He further added that while there has been minimal financial benefit to date, for the first time we are seeing signs that the various loan modification programs of the US Treasury Department and the private sector, that are designed to help responsible homeowners avoid foreclosure, are being implemented. Total revenues for the third quarter were $413.3 million, compared with $461.6 million in the third quarter last year. Net premiums written for the quarter were $278.3 million, compared with $365.0 million for the same period last year. Net premiums written for the first nine months of 2009 were $956.2 million, compared with $1.105 billion for the same period last year. Included in other revenue, for the third quarter of 2009, was a gain of $6.4 million that resulted from the repurchase of $42.3 million of long term debt due in September 2011. New insurance written in the third quarter was $4.6 billion, compared to $9.7 billion in the third quarter of 2008. In addition, the Home Affordable Refinance Program accounted for $450.0 million of insurance that is not included in the new insurance written total due to these transactions being treated as a modification of the coverage on existing insurance in force. New insurance written for the first nine months of 2009 was $17.0 billion compared to $42.8 billion in the first nine months of 2008. Persistency, or the percentage of insurance remaining in force from one year prior, was 85.2 percent at September 30, 2009, compared with 84.4 percent at December 31, 2008, and 82.1 percent at September 30, 2008. As of September 30, 2009, MGIC's primary insurance in force was $216.8 billion, compared with $227.0 billion at December 31, 2008, and $228.2 billion at September 30, 2008. The fair value of MGIC Investment Corporation's investment portfolio, cash and cash equivalents was $8.7 billion at September 30, 2009, compared with $8.1 billion at December 31, 2008, and $7.7 billion at September 30, 2008. In the third quarter of 2009, we recorded a tax benefit of $100.3 million, which is primarily to offset a tax liability on $279.5 million of unrealized gains that were recorded to equity. At September 30, 2009, the percentage of loans that were delinquent, excluding bulk loans, was 13.97 percent, compared with 9.51 percent at December 31, 2008, and 7.54 percent at September 30, 2008. Including bulk loans, the percentage of loans that were delinquent at September 30, 2009, was 16.92 percent, compared to 12.37 percent at December 31, 2008, and 10.20 percent at September 30, 2008. Losses incurred in the third quarter were $971.0 million, up from $788.3 million reported for the same period last year primarily due to an increase in delinquencies. Net underwriting and other expenses were $59.1 million in the third quarter as compared to $62.4 million reported for the same period last year. Wall Street Bulk transactions, as of September 30, 2009, included approximately 104,000 loans with insurance in force of approximately $17.2 billion and risk in force of approximately $5.1 billion. During the quarter the premium deficiency reserve declined by $19.3 million from $227.1 million, as of June 30, 2009, to $207.8 million as of September 30, 2009. The $207.8 million premium deficiency reserve as of September 30, 2009, reflects the present value of expected future losses and expenses that exceeded the present value of expected future premium and already established loss reserves. Within the premium deficiency calculation, the Company's present value of expected future paid losses and expenses was $2,341 million, offset by the present value of expected future premium of $489 million and already established loss reserves of $ 1,644 million. The premium deficiency reserve as of June 30, 2009, reflected the present value of expected future paid losses and expenses of $2,491 million, offset by the present value of expected future premium of $595 million and already established loss reserves of $1,669 million. The premium deficiency reserve of $1,210.8 million was initially established in the fourth quarter of 2007, and has declined by $1,003.0 million to $207.8 million as of September 30, 2009. MGIC Investment Corp. -- http://www.mgic.com/-- is a holding company and, through its wholly owned subsidiary Mortgage Guaranty Insurance Corp., provides private mortgage insurance in the U.S. MGIC is licensed in all 50 states of the U.S., the District of Columbia, Puerto Rico and Guam. One of MGIC's subsidiaries is licensed in Australia and another is in the process of becoming licensed in Canada. In addition to mortgage insurance on first liens, the company, through its subsidiaries, provides lenders with various underwriting and other services and products related to home mortgage lending. The company has ownership interests in less than majority owned joint ventures and investments, principally Sherman Financial Group LLC and Credit-Based Asset Servicing and Securitization LLC, which it refers to as C-BASS. Sherman is principally engaged in purchasing and collecting for its own account delinquent consumer receivables. * * * MGIC Investment carries a 'CCCu' long term local issuer credit rating, with negative outlook, from Standard & Poor's. It carries a 'B' long term issuer default rating from Fitch. MICROMET INC: May Issue $150 Million in Securities -------------------------------------------------- Micromet Inc. filed a shelf registration statement in connection with its plan to offer, from time to time, of up to $150,000,000 of any combination of securities, either individually or in units. Micromet may offer common stock or preferred stock upon conversion of debt securities; common stock upon conversion of preferred stock; common stock, preferred stock or debt securities upon the exercise of warrants; or common stock, preferred stock or debt securities upon the exercise of subscription rights. Micromet's prospectus provides a general description of the securities it may offer. The Company's common stock is traded on the Nasdaq Global Market under the symbol "MITI." On October 14, 2009, the sales price of the common stock was $5.97 per share. A full-text copy of the prospectus is available at no charge at: http://ResearchArchives.com/t/s?471b About Micromet Inc. Micromet Inc. (Nasdaq: MITI) -- http://www.micromet-inc.com/-- is a biopharmaceutical company developing novel, proprietary antibodies for the treatment of cancer, inflammation and autoimmune diseases. Four of its antibodies are currently in clinical trials, while the remainder of the product pipeline is in preclinical development. As of June 30, 2009, the Company had $69.8 million in total assets; and $30.5 million in total current liabilities, $7.31 million in deferred revenue, and $2.05 million in other non- current liabilities; and $29.9 million stockholders' equity. The Company had $212.4 million in accumulated deficit as of June 30, 2009. Going Concern Doubt In its annual report on Form 10-K for the year ended December 31, 2008, Micromet said that as of December 31, it had an accumulated deficit of $198,200,000, and it expects to continue to incur substantial, and possibly increasing, operating losses for the next several years. "The conditions create substantial doubt about our ability to continue as a going concern," the Company said. However, Ernst & Young LLP, in McLean, Virginia, the Company's independent accountants, did not include a going concern language in its March 16, 2009 audit report. MIDWAY GAMES: Completes Sale of Certain Assets to SouthPeak ----------------------------------------------------------- Midway Games Inc. and two of its U.S. subsidiaries, Midway Home Entertainment Inc. and Midway Studios Los-Angeles Inc. completed the sale of the certain assets created under a license agreement between TNA Entertainment, LLC and MHE, with certain exclusions, to SouthPeak Interactive Corporation. On Sept. 18, 2009, the Company and its U.S. subsidiaries entered into an asset purchase agreement with SouthPeak pursuant to Section 363 of the U.S. Bankruptcy Code. SouthPeak agreed to purchase the purchased assets for $100,000 plus the aggregate of any cure amounts and other assumed liabilities under assumed contracts. The sale was approved by the Court on Oct. 1, 2009. A full-text copy of the asset purchase agreement is available for free at http://ResearchArchives.com/t/s?4710 Headquartered in Chicago, Illinois, Midway Games Inc. (OTC Pink Sheets: MWYGQ) -- http://www.midway.com/-- with offices throughout the world, was a leading developer and publisher of interactive entertainment software for major videogame systems and personal computers. The Company and nine of its affiliates filed for Chapter 11 protection on February 12, 2009 (Bankr. D. Del. Lead Case No. 09-10465). Michael D. DeBaecke, Esq., Jason W. Staib, Esq, and Victoria A. Guilfoyle, Esq., at Blank Rome LLP, in Wilmington, Delaware; and Marc E. Richards, Esq., and Pamela E. Flaherty, Esq., at Blank Rome LLP, in New York, represent the Debtors in their restructuring efforts. Attorneys at Milbank, Tweed, Hadley & McCloy LLP and Richards, Layton & Finger, P.A. represent the official committee of unsecured creditors as counsel. Epiq Bankruptcy Solutions, LLC, is the Debtors' claims, noticing, and balloting agent. On July 10, 2009, Midway and certain of its U.S. subsidiaries completed the sale of substantially all of their assets to Warner Bros. Entertainment Inc. in a sale approved by the Court. The aggregate gross purchase price is roughly $49 million, including the assumption of certain liabilities. Midway is disposing of its remaining assets. At June 30, 2009, the Debtors had $1.39 billion in total assets and $1.59 billion in total liabilities. A full-text copy of the Debtors' monthly operating report for the month ended June 30, is available at http://researcharchives.com/t/s?41c1 MILLER BROTHERS: Lays Off 85 Workers at Three Mine Sites -------------------------------------------------------- The Associated Press reports that Miller Brothers Coal LLC said that it has laid off 85 workers at mine sites in the Magoffin, Floyd, and Knott counties, due to weak demand for coal and the uncertainty that new mining permits will be issued. According to WYMT-TV, Miller Brothers officials said that hours were also reduced for the more than 200 remaining employees. Eeastern Kentucky coal company Miller Brothers Coal LLC is operating under Chapter 11 bankruptcy and is reducing production at several sites, according to The Associated Press. MOHEGAN TRIBAL: Moody's Assigns 'B1' Rating on $200 Mil. Notes -------------------------------------------------------------- Moody's Investors Service assigned a B1 rating to Mohegan Tribal Gaming Authority's proposed $200 million second lien notes due 2017. MTGA's B3 Corporate Family Rating, B3 Probability of Default Rating, and long-term debt ratings were affirmed. The company's existing $250 million 6 1/8% senior unsecured notes due 2013, however, are expected to be lowered one-notch to B2 if the second lien offering closes as currently planned. The rating outlook is negative. The B1 rating on MTGA's new second lien notes -- two notches higher than the company's Corporate Family Rating -- acknowledges the substantial credit cushion that will be afforded to the notes by the large amount of debt that will rank junior to the notes in the pro forma debt structure. The B1 rating on the second lien notes also assumes the transaction will close as currently planned and is subject to the review of final documentation. The net proceeds from the new second lien notes will be used to repay the entire amount of the company's $147 million term loan due March 2012 and reduce the company's outstanding revolver borrowings by about $44 million. Moody's expects that the senior unsecured notes will be lowered one-notch to B2 if the second lien offering closes as currently planned. This would reflect MTGA's decision to issue debt that will rank ahead of the senior unsecured notes along with the full repayment of $330 million of senior subordinated debt in July 2009 with borrowings under the revolving credit facility. The Caa2 ratings on MTGA's outstanding senior subordinated notes are not expected to be affected by the addition of the new second lien notes other than a minor change in the LGD assessments of senior unsecured notes. MTGA's B3 Corporate Family and Probability of Default ratings continue to reflect the company's high leverage (debt/EBITDA remains close to 7.0 times), continued weak performance at its Connecticut casino, the threat of additional competition in the Northeastern U.S., and relatively modest cushion with its financial covenants. Additionally, while the full repayment of the first lien term loan will provide near-term relief with respect to debt maturities, MTGA still has large amount of debt coming due in March 2012 when its revolver expires. Outstanding revolver borrowings will represent approximately one-third of the company's pro forma total debt outstanding. MTGA's rating outlook is currently negative. However, the successful closing of the second lien combined with amendments to the leverage covenants in the company's bank loan agreement, could result in an outlook revision to stable. The successful issuance of second lien notes will eliminate the risk associated with a possible increase in the company's term loan amortization requirement -- one of the primary reasons for the current negative outlook. MTGA's bank agreement includes a provision that increases the term loan amortization to $30 million per quarter -- from only $750 thousand per quarter -- beginning June 2010 if its $147 million term loan is not fully repaid prior to that date. MTGA recently disclosed that it is seeking modifications to the leverage covenants contained in its bank credit facility. The company faces a step-down in its senior leverage and total leverage covenant in March 2010. While the company is currently in compliance with its leverage covenants, the weak gaming demand environment coupled with the step-downs could make it difficult for the company to remain in compliance. The offering of the second lien notes is not conditioned upon the company obtaining these amendments. New rating assigned: * $200 million second lien notes due 2017 at B1 (LGD 3, 31%) Ratings affirmed: * Corporate Family Rating at B3 * Probability of Default Rating at B3 * Senior unsecured notes at B1 (LGD 3, 32%) * Senior subordinated notes at Caa2 (LGD 5, 79%) Moody's previous rating action on MTGA occurred on May 1, 2009, when the company's Probability of Default and Corporate Family ratings were lowered to B3 from B2 and a negative rating outlook was assigned. MTGA owns and operates a gaming and entertainment complex located near Uncasville, Connecticut, known as Mohegan Sun, and a gaming and entertainment facility offering slot machines and harness racing in Plains Township, Pennsylvania, known as Mohegan Sun at Pocono Downs. MTGA generates annual net revenues of approximately $1.5 billion. MURRAY ENERGY: Moody's Assigns Corporate Family Rating at 'Caa1' ---------------------------------------------------------------- Moody's Investors Service assigned a first time corporate family rating of Caa1 to Murray Energy Corporation. Moody's also assigned a Caa1 probability of default rating, a Caa1 (LGD 3; 46%) rating on the proposed $440 million second priority senior secured notes, and a B1 (LGD 1; 4%) rating on the proposed $25 million revolving credit facility. Proceeds from the notes issuance and cash on hand are intended to refinance approximately $485 million of existing first, second, and third lien debt. The rating outlook is stable. The new ratings are subject to review of the final documentation. Murray's Caa1 corporate family rating reflects significant debt levels, concentration of EBITDA at key coal mines, production risk stemming from challenging operating conditions and geologic risks, and annual production of approximately 25 million tons. The ratings are supported by the company's long-term contracts with highly-rated utility customers, experience with longwall mining, freight advantages associated with water-based transportation and proximity to customers, and largely union-free workforce. In addition, the ratings positively consider Murray's production, sale, and delivery of high heat, high sulfur coal which is able to meet the requirements of its utility customers with scrubbers. The Caa1 rating considers the level of EBITDA needed to support the significant debt in Murray's capital structure. Currently, the majority of the company's EBITDA is derived from two longwall mines in Northern Appalachia. Challenging geologic and operational conditions can result in unexpected interruptions as Murray has experienced at some of its other mines. While leverage has declined significantly in 2009, in Moody's opinion, debt leverage is likely to rise in 2010 due primarily to a lower selling price and, to a lesser extent, rising production costs. Moody's believe that a high level of fixed charges could limit Murray's ability to significantly reduce absolute debt over the intermediate term. The Caa1 corporate family rating positively considers the company's relationship with many of its large, highly rated utility customers. Murray has maintained relationships with some customers since shortly after the company's inception in 1988. The company recently benefited from price adjustments, set to cease on January 1, 2010, for contracts with its two largest customers. Moody's believes that future price adjustments may be less certain. Given the company's significant debt, Murray's ability to independently sustain its operations at normalized contract terms will be a critical factor for the ratings. The stable rating outlook incorporates Murray's adequate near-term liquidity profile and its highly contracted position for the remainder of 2009 and 2010. The outlook is contingent on the company's ability to meet production targets and control its costs within Moody's expectations. Ratings assigned include: * Corporate Family of Caa1 * Probability of Default of Caa1 * $25 million first lien revolving credit facility due 2012 of B1 (LGD 1; 4%) * $440 million second priority lien senior secured note due 2015 of Caa1 (LGD 3; 46%) * Stable Outlook Murray Energy Corporation is a privately owned coal mining company which produced approximately 25 million tons in 2008. The company controls approximately 900 million tons of reserves including an estimated 365 million unassigned tons. MURRAY ENERGY: S&P Assigns Corporate Credit Rating at 'B' --------------------------------------------------------- Standard & Poor's Ratings Services said that it assigned its 'B' corporate credit rating to Pepper Pike, Ohio-based Murray Energy Corp. The outlook is stable. Standard & Poor's also said that it assigned an issue-level rating of 'BB-' (two notches above the corporate credit rating) to Murray's proposed $25 million senior secured revolving credit facility due 2012. The recovery rating is '1', indicating S&P's expectation of very high (90%-100%) recovery for lenders in the event of a payment default. In addition, Standard & Poor's assigned an issue-level rating of 'B+' (one notch higher than the corporate credit rating) to Murray's proposed $440 million second-lien secured notes due 2015. The recovery rating is '2', indicating S&P's expectation of substantial (70%-90%) recovery for noteholders in the event of a payment default. Murray will use the proceeds from the proposed notes, combined with excess cash balances, to repay outstanding amounts under its existing senior secured credit facility. "The ratings on Murray reflect the combination of its vulnerable business risk profile and aggressive financial risk profile," noted Standard & Poor's credit analyst Maurice Austin. "The 'B' rating is also based on its relatively small size, lack of operating diversity, high customer concentration, and high debt levels." Still, the company maintains a relatively favorable cost profile, benefits from long-term contracts, and is expected to maintain appropriate liquidity for its 'B' rating. S&P expects that Murray's liquidity position will remain sufficient to meet operating, capital, and debt-service requirements over the near-to-intermediate term. Pro forma 2009 for the proposed financings, Murray will likely have about $53.7 million of excess balance-sheet cash and full availability under its new $25 million revolving credit facility. The company generated about $145 million in cash flow from operations for the first six months of 2009 compared with about $80 million for the same period in 2008, primarily as a result of the renegotiation of contracts from Murray's largest customers. Based on current operating assumptions, S&P expects cash flow from operations of about $250 million during 2009, decreasing to about $110 million in 2010, as S&P expects U.S. electricity consumption to continue to decline, resulting in lower production levels. In 2009, S&P expects capital expenditures of about $120 million, declining to about $45 million in 2010 as Murray completes spending related to increasing the number of ventilation shafts and upgrading a coal preparation plant. S&P expects that the company's annual maintenance capital spending will be $40 million- $70 million. Financial covenants governing the company's revolving credit facility will likely include a maximum total leverage ratio and a minimum interest coverage ratio. S&P expects Murray to maintain a sufficient cushion in the near term under both covenant requirements after it completes its current debt issues. Murray's debt maturities over the next several years are manageable, as the revolver matures in 2012, and the senior secured notes do not mature until 2015. However, the bond indenture provides the company the opportunity to repay up to 10% of the debt each year during the three-year non-call period. The stable outlook reflects S&P's expectation that despite lower demand for coal because of recession-induced declines in electricity consumption, Murray's credit measures will remain at a level S&P would consider appropriate for a 'B' rating. Specifically, S&P expects 2010 adjusted debt to EBITDA of about 4.5x, driven by a decline in 2010 EBITDA of more than 60% -- to about $115 million -- as a result of lower production. "We would consider a negative rating action if, as a result of deterioration in operating performance during the next several quarters, the company's credit measures weaken to a level that S&P would consider inconsistent with the current 'B' rating," Mr. Austin added. Specifically, if adjusted debt to EBITDA were to exceed and likely remain at more than 5.5x, which could occur if electricity consumption continues to decline, resulting in an extended decline in coal prices. A positive rating action, though less likely in the near term given recent production curtailments and coal price weakness, could occur if coal demand increases faster than expected and results in higher coal prices and increased production. NORTEL NETWORKS: Committee Wants Ciena Deal Improved ---------------------------------------------------- BankruptcyData reports that Nortel Networks' official committee of unsecured creditors filed with the U.S. Bankruptcy Court an objection to the Company's motion seeking authorization to enter into a stalking horse sales agreement with Ciena Corporation for the sale of certain assets of Nortel's Metro Ethernet Networks business. According to the report, the objection states that, although the committee generally supports the sale of the assets, it feels that some elements of the agreement and bidding procedures are contrary to the bankruptcy goal of maximizing proceeds of the Debtor's estate. The committee specifically objects to exemption of the stalking horse bidder from the generally applicable requirement that the runner up at the sales auction serve as an alternative purchaser. The assets to be sold include those of NNI, Canada-based Nortel Networks Ltd. and Nortel Networks UK Ltd., which Ciena agreed to acquire for US$390 million in cash and 10 million shares of its common stock pursuant to two separate agreements. The shares to be issued by Ciena were valued at US$131 million based on the closing price of the company's common stock on NASDAQ as of October 6, 2009. Under the court-approved bidding process, companies interested to acquire the Optical Networking and Carrier Ethernet business are required to submit their bids by November 9, 2009, to be followed by an auction on November 13 if more than one qualified bid are received. About Nortel Networks Nortel Networks (OTCBB:NRTLQ) -- http://www.nortel.com/-- delivers communications capabilities that make the promise of Business Made Simple a reality for our customers. The Company's next-generation technologies, for both service provider and enterprise networks, support multimedia and business-critical applications. Nortel's technologies are designed to help eliminate the barriers to efficiency, speed and performance by simplifying networks and connecting people to the information they need, when they need it. Nortel Networks Corp., Nortel Networks Inc., and other affiliated corporations in Canada sought insolvency protection under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice (Commercial List). Ernst & Young has been appointed to serve as monitor and foreign representative of the Canadian Nortel Group. The Monitor also sought recognition of the CCAA Proceedings in the Bankruptcy Court under Chapter 15 of the Bankruptcy Code. Nortel Networks Inc. and 14 affiliates filed separate Chapter 11 petitions on January 14, 2009 (Bankr. D. Del. Case No. 09-10138). Judge Kevin Gross presides over the case. James L. Bromley, Esq., at Cleary Gottlieb Steen & Hamilton, LLP, in New York, serves as general bankruptcy counsel; Derek C. Abbott, Esq., at Morris Nichols Arsht & Tunnell LLP, in Wilmington, serves as Delaware counsel. The Chapter 11 Debtors' other professionals are Lazard Freres & Co. LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims and notice agent. The Chapter 15 case is Bankr. D. Del. Case No. 09-10164. Mary Caloway, Esq., and Peter James Duhig, Esq., at Buchanan Ingersoll & Rooney PC, in Wilmington, Delaware, serves as Chapter 15 petitioner's counsel. Certain of Nortel's European subsidiaries have also made consequential filings for creditor protection. The Nortel Companies related in a press release that Nortel Networks UK Limited and certain subsidiaries of the Nortel group incorporated in the EMEA region have each obtained an administration order from the English High Court of Justice under the Insolvency Act 1986. The applications were made by the EMEA Subsidiaries under the provisions of the European Union's Council Regulation (EC) No. 1346/2000 on Insolvency Proceedings and on the basis that each EMEA Subsidiary's centre of main interests is in England. Under the terms of the orders, representatives of Ernst & Young LLP have been appointed as administrators of each of the EMEA Companies and will continue to manage the EMEA Companies and operate their businesses under the jurisdiction of the English Court and in accordance with the applicable provisions of the Insolvency Act. Several entities, particularly, Nortel Government Solutions Incorporated have material operations and are not part of the bankruptcy proceedings. As of September 30, 2008, Nortel Networks Corp. reported consolidated assets of $11.6 billion and consolidated liabilities of $11.8 billion. The Nortel Companies' U.S. businesses are primarily conducted through Nortel Networks Inc., which is the parent of majority of the U.S. Nortel Companies. As of September 30, 2008, NNI had assets of about $9 billion and liabilities of $3.2 billion, which do not include NNI's guarantee of some or all of the Nortel Companies' about $4.2 billion of unsecured public debt. Bankruptcy Creditors' Service, Inc., publishes Nortel Networks Bankruptcy News. The newsletter tracks the Chapter 11 proceeding and ancillary foreign proceedings undertaken by Nortel Networks Corp. and its various affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000) NORTEL NETWORKS: November 13 Auction for Ethernet Networks Biz. --------------------------------------------------------------- Nortel Networks Inc. and its affiliates sought and obtained approval from the U.S. Bankruptcy Court for the District of Delaware to implement a bidding process for the sale of their optical networking and carrier ethernet business to Ciena Corp. or to any company that offers a better bid for the assets. The assets to be sold include those of NNI, Canada-based Nortel Networks Ltd. and Nortel Networks UK Ltd., which Ciena agreed to acquire for US$390 million in cash and 10 million shares of its common stock pursuant to two separate agreements. The shares to be issued by Ciena were valued at US$131 million based on the closing price of the company's common stock on NASDAQ as of October 6, 2009. The first agreement covers the sale of Nortel's Optical Networking and Carrier Ethernet businesses in North America, Caribbean and Latin America, and Asia. The second agreement governs the sale of Nortel units' businesses that are based in Europe, Middle East and Africa. Both agreements include the planned sale of Nortel's OME 6500, OM 5000 and CPL platforms, its industry-leading 40G/100G technology, and related services business. They also cover all patents and intellectual property that are predominantly used in the businesses and provide for the transition of most of Nortel's customer contracts executed in connection with the business. Philippe Morin, president of Nortel Metro Ethernet Networks, said in an October 7 statement that the proposed sale is a "positive step forward for the future of Nortel's Optical Networking and Carrier Ethernet customers and employees." "The sale of these businesses to a strong and stable buyer enables the innovation of one of the foremost leaders in the optical industry to continue to thrive," Mr. Morin said. "Employees have done a tremendous job stabilizing our business under challenging conditions while continuing to deliver on product and service commitments. We are particularly pleased that the agreements would offer a significant number of the employees in the Optical Networking and Carrier Ethernet teams an opportunity to continue their world-class innovation," Mr. Morin said. Under the terms of the agreements, at least 2,000 employees or more than 85% of the global Optical Networking and Carrier Ethernet employee base would be offered employment with Ciena. These include employees assigned to the Optical Networking and Carrier Ethernet businesses in Europe, Middle East and Asia who would be transferred to Ciena. Completion of the sale is subject to regulatory conditions, approval of the U.S. and Canadian governments and approval of the courts in France and Israel. The sale agreements are also subject to purchase price adjustments. Bidding Process Under the court-approved bidding process, companies interested to acquire the Optical Networking and Carrier Ethernet business are required to submit their bids by November 9, 2009, to be followed by an auction on November 13 if more than one qualified bid are received. Ciena's US$390 million offer will serve as the "stalking horse" bid or the lead bid at the auction. In the event Ciena is not selected as the winning bidder, the Nortel units are required to pay Ciena a break-up fee of up to US$10.7 million and reimburse as much as US$3.6 million for its expenses. Ciena is required to provide a 5% deposit of the purchase price. NNI originally proposed to exempt Ciena from this particular auction rule or the deposit requirement, but eventually changed this and other rules after the Official Committee of Unsecured Creditors and its major suppliers, Flextronics Corp. and Flextronics Telecom Systems Ltd., questioned why only the other bidders were required to provide a deposit. Anixter Inc., another major supplier, also filed an objection in Court, complaining over the lack of sufficient information about what assets of the Optical Networking and Carrier Ethernet business would be sold to the winning bidder. Doug Bacon, Ciena's lawyer, said that aside from agreeing to put up a 5% deposit, Ciena will also let courts decide whether it can block the return of rival bidders' deposits and accepted restrictions on payment of a breakup fee, according to a report by Bloomberg News. The Bankruptcy Court earlier rejected Nortel's request for a Ciena-led auction. Judge Gross said the breakup fee to be paid to Ciena if its purchase of the Nortel unit were to fall through was "not consistent" with Delaware law. "Without a successful closing, there is no benefit to the estate," Judge Gross said, saying that result wasn't acceptable. The buyer shouldn't have a veto on bidders getting their deposits back, he said. The winning bid at the auction will be presented to the U.S. Bankruptcy Court for approval at a hearing on November 19, 2009. NNL and its Canada-based affiliates has also sought permission from the Ontario Superior Court of Justice, which handles their insolvency cases, to implement the bidding process. Ernst & Young Inc., the firm appointed to monitor Nortel's Canadian assets, also recommend the approval of the bidding process as noted in its 24th Monitor Report. The request was approved by the Canadian Court, according to a report by The Canadian Press. Meanwhile, administrators of the Nortel units located outside of North America can sell those Nortel assets without court approval. In some jurisdictions, however, the sale will be subject to consultation with employee representatives prior to finalization of the terms of sale. A full-text copy of the document detailing the bidding process for the Optical and Ethernet Businesses is available for free at: http://bankrupt.com/misc/NortelBiddingEthernet.pdf A Gamble Worth Taking Ciena Chief Executive Gary Smith said the agreement with Nortel is a gamble worth taking, according to a report by the Wall Street Journal. Mr. Smith said the Nortel assets dovetail nicely with Ciena's advanced optical equipment, which is the company's core business, WSJ reported. Mr. Smith downplayed concerns about Ciena's ability to properly incorporate the Nortel assets. Instead, Mr. Smith has hired outside consultants with experience in large mergers to advise Ciena. He also insisted Ciena's executives are familiar with the technology produced by Nortel's optical and Ethernet division, according to the report. The business in which Ciena and Nortel participate expected to surge once global growth resumes, WSJ noted. The Yankee Group, a market-research firm, estimates that demand for optical and Ethernet equipment could reach $85 billion, WSJ reported. Business weekly Barron's related in its October 12 edition that Ciena's stock price could double in 2010 with the Nortel deal. Quoting Morgan Keegan analyst Simon Leopold, Barron's said Ciena's stock price could rise to $24.50, which is currently trading at just under $13. About Nortel Networks Nortel Networks (OTCBB:NRTLQ) -- http://www.nortel.com/-- delivers communications capabilities that make the promise of Business Made Simple a reality for our customers. The Company's next-generation technologies, for both service provider and enterprise networks, support multimedia and business-critical applications. Nortel's technologies are designed to help eliminate the barriers to efficiency, speed and performance by simplifying networks and connecting people to the information they need, when they need it. Nortel Networks Corp., Nortel Networks Inc., and other affiliated corporations in Canada sought insolvency protection under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice (Commercial List). Ernst & Young has been appointed to serve as monitor and foreign representative of the Canadian Nortel Group. The Monitor also sought recognition of the CCAA Proceedings in the Bankruptcy Court under Chapter 15 of the Bankruptcy Code. Nortel Networks Inc. and 14 affiliates filed separate Chapter 11 petitions on January 14, 2009 (Bankr. D. Del. Case No. 09-10138). Judge Kevin Gross presides over the case. James L. Bromley, Esq., at Cleary Gottlieb Steen & Hamilton, LLP, in New York, serves as general bankruptcy counsel; Derek C. Abbott, Esq., at Morris Nichols Arsht & Tunnell LLP, in Wilmington, serves as Delaware counsel. The Chapter 11 Debtors' other professionals are Lazard Freres & Co. LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims and notice agent. The Chapter 15 case is Bankr. D. Del. Case No. 09-10164. Mary Caloway, Esq., and Peter James Duhig, Esq., at Buchanan Ingersoll & Rooney PC, in Wilmington, Delaware, serves as Chapter 15 petitioner's counsel. Certain of Nortel's European subsidiaries have also made consequential filings for creditor protection. The Nortel Companies related in a press release that Nortel Networks UK Limited and certain subsidiaries of the Nortel group incorporated in the EMEA region have each obtained an administration order from the English High Court of Justice under the Insolvency Act 1986. The applications were made by the EMEA Subsidiaries under the provisions of the European Union's Council Regulation (EC) No. 1346/2000 on Insolvency Proceedings and on the basis that each EMEA Subsidiary's centre of main interests is in England. Under the terms of the orders, representatives of Ernst & Young LLP have been appointed as administrators of each of the EMEA Companies and will continue to manage the EMEA Companies and operate their businesses under the jurisdiction of the English Court and in accordance with the applicable provisions of the Insolvency Act. Several entities, particularly, Nortel Government Solutions Incorporated have material operations and are not part of the bankruptcy proceedings. As of September 30, 2008, Nortel Networks Corp. reported consolidated assets of $11.6 billion and consolidated liabilities of $11.8 billion. The Nortel Companies' U.S. businesses are primarily conducted through Nortel Networks Inc., which is the parent of majority of the U.S. Nortel Companies. As of September 30, 2008, NNI had assets of about $9 billion and liabilities of $3.2 billion, which do not include NNI's guarantee of some or all of the Nortel Companies' about $4.2 billion of unsecured public debt. Bankruptcy Creditors' Service, Inc., publishes Nortel Networks Bankruptcy News. The newsletter tracks the Chapter 11 proceeding and ancillary foreign proceedings undertaken by Nortel Networks Corp. and its various affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000) NORTEL NETWORKS: Seeks Canada Court Nod to Auction GSM Business --------------------------------------------------------------- Nortel Networks Corporation asks the Ontario Superior Court of Justice to approve a bidding process in connection with the sale of the global operations of Nortel Networks Ltd. and other units using the Global System for Mobile communications standard. The Nortel units are suppliers of GSM, a widely deployed wireless technology standard for mobile phone networks as well as GSM for Railways, a secure wireless communication system for railway operators based on GSM technology. "A sale of the GSM assets is the best opportunity to maximize the value of the GSM assets and reduce the continuing cost related to the support and development of GSM business," says NNC's attorney, Derrick Tay, Esq., at Ogilvy Renault LLP, in Toronto, Ontario. Mr. Tay says the Nortel units have experienced difficulties in finding new customers for their GSM assets since they filed for creditor protection before the Canadian Court early this year. "The potential purchase price that could be realized through a sale of the GSM assets is likely to decline over time if the GSM assets remain unsold and that any significant delay in doing so could result in a material reduction of price," Mr. Tay further says. Ernst & Young Inc., the firm appointed to monitor the assets of NNC and its Canadian affiliates, supports the approval of the bidding process. "[Ernst & Young] is of the view that the sale process is designed to provide a commercially reasonably approach for Nortel to attempt to market and maximize value for its GSM business," the firm noted in its 23rd Monitor Report. NNI Wins Court Nod to Implement Bidding Process Nortel Networks Inc. and its U.S.-based affiliates obtained approval from the U.S. Bankruptcy Court for the District of Delaware to implement their proposed bidding process in connection with the sale of the GSM business. Interested parties have until November 5, 2009, to submit their bids for the GSM business. An auction will be held November 9 if more than one qualified bid is received. The U.S. Bankruptcy Court will hold a hearing on November 19, 2009, to consider approval of the sale of the GSM business to the winning bidder. Creditors and other concerned parties have until November 12, 2009, to file their objections. A full-text copy of the Debtors' agreement on the sale of the GSM business is available without charge at: http://bankrupt.com/misc/NortelGSMAgreement.pdf Prior to the approval, Anixter Inc., a major supplier of the Debtors, filed an objection in Court, complaining that the Debtors did not provide sufficient information about what assets of their GSM business will be sold. Anixter said it is unable to ascertain the extent to which the Debtors intend to include any Anixter contract in the proposed transaction and the extent to which its rights may be directly affected. About Nortel Networks Nortel Networks (OTCBB:NRTLQ) -- http://www.nortel.com/-- delivers communications capabilities that make the promise of Business Made Simple a reality for our customers. The Company's next-generation technologies, for both service provider and enterprise networks, support multimedia and business-critical applications. Nortel's technologies are designed to help eliminate the barriers to efficiency, speed and performance by simplifying networks and connecting people to the information they need, when they need it. Nortel Networks Corp., Nortel Networks Inc., and other affiliated corporations in Canada sought insolvency protection under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice (Commercial List). Ernst & Young has been appointed to serve as monitor and foreign representative of the Canadian Nortel Group. The Monitor also sought recognition of the CCAA Proceedings in the Bankruptcy Court under Chapter 15 of the Bankruptcy Code. Nortel Networks Inc. and 14 affiliates filed separate Chapter 11 petitions on January 14, 2009 (Bankr. D. Del. Case No. 09-10138). Judge Kevin Gross presides over the case. James L. Bromley, Esq., at Cleary Gottlieb Steen & Hamilton, LLP, in New York, serves as general bankruptcy counsel; Derek C. Abbott, Esq., at Morris Nichols Arsht & Tunnell LLP, in Wilmington, serves as Delaware counsel. The Chapter 11 Debtors' other professionals are Lazard Freres & Co. LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims and notice agent. The Chapter 15 case is Bankr. D. Del. Case No. 09-10164. Mary Caloway, Esq., and Peter James Duhig, Esq., at Buchanan Ingersoll & Rooney PC, in Wilmington, Delaware, serves as Chapter 15 petitioner's counsel. Certain of Nortel's European subsidiaries have also made consequential filings for creditor protection. The Nortel Companies related in a press release that Nortel Networks UK Limited and certain subsidiaries of the Nortel group incorporated in the EMEA region have each obtained an administration order from the English High Court of Justice under the Insolvency Act 1986. The applications were made by the EMEA Subsidiaries under the provisions of the European Union's Council Regulation (EC) No. 1346/2000 on Insolvency Proceedings and on the basis that each EMEA Subsidiary's centre of main interests is in England. Under the terms of the orders, representatives of Ernst & Young LLP have been appointed as administrators of each of the EMEA Companies and will continue to manage the EMEA Companies and operate their businesses under the jurisdiction of the English Court and in accordance with the applicable provisions of the Insolvency Act. Several entities, particularly, Nortel Government Solutions Incorporated have material operations and are not part of the bankruptcy proceedings. As of September 30, 2008, Nortel Networks Corp. reported consolidated assets of $11.6 billion and consolidated liabilities of $11.8 billion. The Nortel Companies' U.S. businesses are primarily conducted through Nortel Networks Inc., which is the parent of majority of the U.S. Nortel Companies. As of September 30, 2008, NNI had assets of about $9 billion and liabilities of $3.2 billion, which do not include NNI's guarantee of some or all of the Nortel Companies' about $4.2 billion of unsecured public debt. Bankruptcy Creditors' Service, Inc., publishes Nortel Networks Bankruptcy News. The newsletter tracks the Chapter 11 proceeding and ancillary foreign proceedings undertaken by Nortel Networks Corp. and its various affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000) NORTEL NETWORKS: Signs Deal With PBGC on Enterprise Biz Sale ------------------------------------------------------------ Nortel Networks Inc. sought and obtained the Court's authority to enter into an agreement with the Pension Benefit Guaranty Corporation that would clear the way for the completion of the sale of its enterprise solutions business. The Nortel-PBGC Agreement requires the PBGC, a federal agency that protects the pension of American workers and retirees, to waive its claims against two of NNI's wholly owned subsidiaries whose shares are among those included in the sale of NNI's Enterprise Solutions Business to Avaya Inc. The units, Nortel Government Solutions Inc. and DiamondWare Ltd., are both members of NNI's "controlled group," which makes them potentially liable to the PBGC on account of unfunded benefits and other charges under a pension plan previously sponsored by NNI. The NNI-sponsored plan is a tax-qualified, single-employer, defined benefit pension plan covered by the Employee Retirement Income Security Act. As of January 1, 2009, there are about 22,220 present and former Nortel employees and their beneficiaries who are entitled to receive benefits under the pension plan. NNI's attorney, Ann Cordo, Esq., at Morris Nichols Arsht & Tunnell LLP, in Wilmington, Delaware, points out that the sale agreement governing the acquisition of the Enterprise Solutions Business Unit requires NNI to transfer its assets and shares to Avaya, free and clear of any and all liens and claims. To satisfy this requirement, she continues, the Debtors must resolve any and all claims the PBGC might assert against NGSI and DiamondWare and any and all liens the PBGC might assert against the stock in the subsidiaries. The Sale Agreement also includes a provision conditioning Avaya's obligation to close on the sale on the PBGC's waiver of its claims against the buyer, NGSI and DiamondWare as well as the release of liens with respect to the Pension Plan, according to Ms. Cordo. Accordingly, Nortel and the PBGC agree on these salient terms: (1) The PBGC will release and waive any claim, lien or interest against non-Debtor subsidiaries NGS and DiamondWare arising under the ERISA solely as to the Pension Plan. (2) In consideration of the PBGC Waiver, NNI agreed to grant the PBGC a lien on the proceeds of the sale of the Enterprise Solutions Business that are allocated to the sale of NGS Shares and the DiamondWare Shares. The PBGC Lien will not be less than 30% of the Share Sale Proceeds. (3) The parties acknowledge that pursuant to an IRS Stipulation, NNI will also grant a lien to the IRS on the Share Sale Proceeds, which lien will be junior to and subordinated in all respects to the PBGC Lien. If the amount of the Share Sale Proceeds exceed the combined amount of the PBGC Lien and the IRS Lien, the excess will be remitted in equal parts to the PBGC and to NNI. (4) The proceeds of the Avaya Sale Agreement, including the Share Sale Proceeds, will be held in an escrow amount until the time as the Enterprise Proceeds are allocated among the Sellers and the EMEA Sellers. Furthermore, NNI agrees that the Enterprise Proceeds allocated to the U.S. Debtors will continue to be held in escrow until the time as (x) the Share Sale Proceeds are determined, and (y) the PBGC Lien is determined. A full-text copy of the NNI-PBGC Stipulation is available without charge at http://bankrupt.com/misc/NortelSTIPPBGC.pdf About Nortel Networks Nortel Networks (OTCBB:NRTLQ) -- http://www.nortel.com/-- delivers communications capabilities that make the promise of Business Made Simple a reality for our customers. The Company's next-generation technologies, for both service provider and enterprise networks, support multimedia and business-critical applications. Nortel's technologies are designed to help eliminate the barriers to efficiency, speed and performance by simplifying networks and connecting people to the information they need, when they need it. Nortel Networks Corp., Nortel Networks Inc., and other affiliated corporations in Canada sought insolvency protection under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice (Commercial List). Ernst & Young has been appointed to serve as monitor and foreign representative of the Canadian Nortel Group. The Monitor also sought recognition of the CCAA Proceedings in the Bankruptcy Court under Chapter 15 of the Bankruptcy Code. Nortel Networks Inc. and 14 affiliates filed separate Chapter 11 petitions on January 14, 2009 (Bankr. D. Del. Case No. 09-10138). Judge Kevin Gross presides over the case. James L. Bromley, Esq., at Cleary Gottlieb Steen & Hamilton, LLP, in New York, serves as general bankruptcy counsel; Derek C. Abbott, Esq., at Morris Nichols Arsht & Tunnell LLP, in Wilmington, serves as Delaware counsel. The Chapter 11 Debtors' other professionals are Lazard Freres & Co. LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims and notice agent. The Chapter 15 case is Bankr. D. Del. Case No. 09-10164. Mary Caloway, Esq., and Peter James Duhig, Esq., at Buchanan Ingersoll & Rooney PC, in Wilmington, Delaware, serves as Chapter 15 petitioner's counsel. Certain of Nortel's European subsidiaries have also made consequential filings for creditor protection. The Nortel Companies related in a press release that Nortel Networks UK Limited and certain subsidiaries of the Nortel group incorporated in the EMEA region have each obtained an administration order from the English High Court of Justice under the Insolvency Act 1986. The applications were made by the EMEA Subsidiaries under the provisions of the European Union's Council Regulation (EC) No. 1346/2000 on Insolvency Proceedings and on the basis that each EMEA Subsidiary's centre of main interests is in England. Under the terms of the orders, representatives of Ernst & Young LLP have been appointed as administrators of each of the EMEA Companies and will continue to manage the EMEA Companies and operate their businesses under the jurisdiction of the English Court and in accordance with the applicable provisions of the Insolvency Act. Several entities, particularly, Nortel Government Solutions Incorporated have material operations and are not part of the bankruptcy proceedings. As of September 30, 2008, Nortel Networks Corp. reported consolidated assets of $11.6 billion and consolidated liabilities of $11.8 billion. The Nortel Companies' U.S. businesses are primarily conducted through Nortel Networks Inc., which is the parent of majority of the U.S. Nortel Companies. As of September 30, 2008, NNI had assets of about $9 billion and liabilities of $3.2 billion, which do not include NNI's guarantee of some or all of the Nortel Companies' about $4.2 billion of unsecured public debt. Bankruptcy Creditors' Service, Inc., publishes Nortel Networks Bankruptcy News. The newsletter tracks the Chapter 11 proceeding and ancillary foreign proceedings undertaken by Nortel Networks Corp. and its various affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000) NORTEL NETWORKS: Terms of Stipulation With IRS on Tax Claim ----------------------------------------------------------- Nortel Networks Inc. and the U.S. Department of Justice sought and obtained the Court's approval of a stipulation, requiring the Internal Revenue Service to release its claims against two of NNI's subsidiaries. The Court's ruling clears the way for the completion of the sale of NNI's Enterprise Solutions Business to Avaya Inc., which would have been foiled by the IRS' $3 billion claim against NNI and its subsidiaries, including Nortel Government Solutions Inc. and DiamondWare Ltd. Under its deal with NNI, Avaya is authorized to terminate the parties' Sale Agreement unless the IRS' claim is resolved by October 15, 2009. NGS and DiamondWare are wholly owned subsidiaries of NNI whose shares are among those included in the sale of the Nortel's Enterprise Solutions Business Unit. The stipulation between NNI and the DOJ requires the IRS to release its claim against NGS and DiamondWare at the closing of the sale. It also requires the IRS to waive its right to take any action in connection with the tax liabilities of NNI and its consolidated group for the year ending December 31, 2005, and for the subsequent years during which NGS and DiamondWare are members of the consolidated group. In return, NNI acknowledges a claim in favor of the IRS with respect to corporate alternative minimum tax for NNI's taxable year ending December 31, 2005, through December 31, 2008, of not less than $8 million for corporate alternative minimum tax and $1.8 million for interest and penalties. NNI also agreed to grant the IRS a lien on the portion of the sale proceeds allocated to the NGS Shares and the DiamondWare Shares. The parties further agree that the IRS Lien created is junior to and subordinated in all respects to the rights of the Pension Benefit Guaranty Corporation to assert a lien against the assets of NGS and DiamondWare pursuant to the Employee Retirement Income Security Act of 1974. The parties' Stipulation was a product of mediation between NNI and the IRS, which was handled by Judge John Gibbons. Judge Gibbons was appointed on October 5, 2009, by the U.S. Bankruptcy Court for the District of Delaware to serve as the mediator. A full-text copy of the NNI-DOJ/IRS Stipulation is available without charge at http://bankrupt.com/misc/NortelStipIRS.pdf In a related development, IRS withdrew the motion it filed in the U.S. District Court for the District of Delaware, asking the District Court to take the responsibility away from the Bankruptcy Court of all issues relating to NNI's objection to IRS' $3 billion claim on grounds that the resolution of the federal income tax issue requires material consideration of non- bankruptcy law. About Nortel Networks Nortel Networks (OTCBB:NRTLQ) -- http://www.nortel.com/-- delivers communications capabilities that make the promise of Business Made Simple a reality for our customers. The Company's next-generation technologies, for both service provider and enterprise networks, support multimedia and business-critical applications. Nortel's technologies are designed to help eliminate the barriers to efficiency, speed and performance by simplifying networks and connecting people to the information they need, when they need it. Nortel Networks Corp., Nortel Networks Inc., and other affiliated corporations in Canada sought insolvency protection under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice (Commercial List). Ernst & Young has been appointed to serve as monitor and foreign representative of the Canadian Nortel Group. The Monitor also sought recognition of the CCAA Proceedings in the Bankruptcy Court under Chapter 15 of the Bankruptcy Code. Nortel Networks Inc. and 14 affiliates filed separate Chapter 11 petitions on January 14, 2009 (Bankr. D. Del. Case No. 09-10138). Judge Kevin Gross presides over the case. James L. Bromley, Esq., at Cleary Gottlieb Steen & Hamilton, LLP, in New York, serves as general bankruptcy counsel; Derek C. Abbott, Esq., at Morris Nichols Arsht & Tunnell LLP, in Wilmington, serves as Delaware counsel. The Chapter 11 Debtors' other professionals are Lazard Freres & Co. LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims and notice agent. The Chapter 15 case is Bankr. D. Del. Case No. 09-10164. Mary Caloway, Esq., and Peter James Duhig, Esq., at Buchanan Ingersoll & Rooney PC, in Wilmington, Delaware, serves as Chapter 15 petitioner's counsel. Certain of Nortel's European subsidiaries have also made consequential filings for creditor protection. The Nortel Companies related in a press release that Nortel Networks UK Limited and certain subsidiaries of the Nortel group incorporated in the EMEA region have each obtained an administration order from the English High Court of Justice under the Insolvency Act 1986. The applications were made by the EMEA Subsidiaries under the provisions of the European Union's Council Regulation (EC) No. 1346/2000 on Insolvency Proceedings and on the basis that each EMEA Subsidiary's centre of main interests is in England. Under the terms of the orders, representatives of Ernst & Young LLP have been appointed as administrators of each of the EMEA Companies and will continue to manage the EMEA Companies and operate their businesses under the jurisdiction of the English Court and in accordance with the applicable provisions of the Insolvency Act. Several entities, particularly, Nortel Government Solutions Incorporated have material operations and are not part of the bankruptcy proceedings. As of September 30, 2008, Nortel Networks Corp. reported consolidated assets of $11.6 billion and consolidated liabilities of $11.8 billion. The Nortel Companies' U.S. businesses are primarily conducted through Nortel Networks Inc., which is the parent of majority of the U.S. Nortel Companies. As of September 30, 2008, NNI had assets of about $9 billion and liabilities of $3.2 billion, which do not include NNI's guarantee of some or all of the Nortel Companies' about $4.2 billion of unsecured public debt. Bankruptcy Creditors' Service, Inc., publishes Nortel Networks Bankruptcy News. The newsletter tracks the Chapter 11 proceeding and ancillary foreign proceedings undertaken by Nortel Networks Corp. and its various affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000) NOVADEL PHARMA: Discloses Results of 2009 Stockholders' Meeting --------------------------------------------------------------- NovaDel Pharma Inc. held its 2009 Annual Meeting of Stockholders on October 15, 2009. The 2009 Annual Stockholders' Meeting was held at the offices of Morgan, Lewis & Bockius LLP, located at 502 Carnegie Center, Princeton, New Jersey. Mark Baric, Thomas Bonney, Steven Ratoff and Dr. Charles Nemeroff were elected directors of the Company. In addition, J.H. Cohn, LLP, was approved as the Company's auditors for 2009. Mr. Ratoff, Chairman of the Board, Interim Chief Executive Officer and Interim Chief Financial Officer, reviewed the progress of the Company. Mr. Ratoff noted that NovaDel is actively engaged in licensing its two approved drugs, NitroMist(TM) and ZolpiMist(TM), and the Company's goal is that licenses will be in place by the end of this 2009 fiscal year. Mr. Ratoff indicated that if that objective is achieved, these products could be launched by the licensee as early as the third quarter of 2010. Mr. Ratoff also reviewed the current pipeline of the Company, noting that progress on the development of these opportunities is limited by the current lack of financial resources. Finally, Mr. Ratoff noted that while the Company's financial condition has improved as a result of the financing agreement with Seaside, LLC, substantive company progress requires additional financial resources. A full-text copy of NovaDel's updated corporate presentation is available at no charge at http://ResearchArchives.com/t/s?471d About Novadel Pharma Flemington, New Jersey-based NovaDel Pharma Inc. (NYSE AMEX: NVD) -- http://www.novadel.com/-- is a specialty pharmaceutical company developing oral spray formulations for a broad range of marketed drugs. The Company's proprietary technology offers, in comparison to conventional oral dosage forms, the potential for faster absorption of drugs into the bloodstream leading to quicker onset of therapeutic effects and possibly reduced first pass liver metabolism, which may result in lower doses. Oral sprays eliminate the requirement for water or the need to swallow, potentially improving patient convenience and adherence. As of June 30, 2009, the Company had $2,358,000 in total assets and $9,146,000 in total liabilities, resulting in $6,788,000 in stockholders' deficit. The Company filed with the Securities and Exchange Commission its Annual Report for the year ended December 31, 2008, which included an audit opinion with a "going concern" explanatory paragraph. The going-concern explanatory paragraph from NovaDel's independent registered public accounting firm -- J.H. Cohn LLP in Roseland, New Jersey -- expressed substantial doubt, based upon current financial resources, as to whether NovaDel can continue to meet its obligations beyond 2009 without access to additional working capital. NEXSTAR BROADCASTING: BofA Lenders Amend Financial Covenants ------------------------------------------------------------ Nexstar Broadcasting, Inc., a subsidiary of Nexstar Broadcasting Group, Inc., on October 8, 2009, entered into the Second Amendment to the Fourth Amended and Restated Credit Agreement, dated as of April 1, 2005, together with Nexstar Broadcasting Group, Nexstar Finance Holdings, Inc., Bank of America, N.A., as Administrative Agent and as L/C Issuer, Banc of America Securities LLC, as joint lead arranger and joint book manager, UBS Securities LLC, as co- syndication agent and joint lead arranger, and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as co-syndication agent and joint book manager, and the several banks parties thereto. The Amendment modifies certain terms of Nexstar Credit Agreement, including, but not limited to, changes to financial covenants, including the Consolidated Total Leverage Ratio and Consolidated Senior Leverage Ratio, a general tightening of the exceptions to the negative covenants (principally by means of reducing the types and amounts of permitted transactions) and an increase to the interest rates and fees payable with respect to the borrowings under the Amended Nexstar Credit Agreement. Prior As Amended ----- ---------- Consolidated Total Leverage Ratio: July 1, 2009 through Sept. 30, 2009 6.50 to 1.00 6.75 to 1.00 Oct. 1, 2009 to Dec. 31, 2009 6.50 to 1.00 8.75 to 1.00 Jan. 1, 2010 through March 31, 2010 6.50 to 1.00 9.50 to 1.00 April 1, 2010 through June 30, 2010 6.50 to 1.00 10.25 to 1.00 July 1, 2010 through Sept. 30, 2010 6.25 to 1.00 9.25 to 1.00 Oct. 1, 2010 through and including March 31, 2011 6.25 to 1.00 7.75 to 1.00 April 1, 2011 and thereafter 6.00 to 1.00 6.00 to 1.00 Consolidated Senior Leverage Ratio: July 1, 2009 through Sept. 30, 2009 4.50 to 1.00 5.50 to 1.00 Oct. 1, 2009 to Dec. 31, 2009 4.50 to 1.00 7.00 to 1.00 Jan. 1, 2010 through March 31, 2010 4.25 to 1.00 7.00 to 1.00 April 1, 2010 through June 30, 2010 4.25 to 1.00 7.50 to 1.00 July 1, 2010 through Sept. 30, 2010 4.25 to 1.00 6.75 to 1.00 Oct. 1, 2010 through and including March 31, 2011 4.25 to 1.00 5.50 to 1.00 April 1, 2011 and thereafter 4.00 to 1.00 4.00 to 1.00 The Amended Nexstar Credit Agreement revises the calculation of Consolidated Total Leverage Ratio to exclude the netting of cash and cash equivalents against total debt. On an annual basis following the delivery of Nexstar's Broadcasting, Inc.'s year end financial statements, the Amended Nexstar Credit Agreement requires mandatory prepayments of principal, as well as a permanent reduction in revolving credit commitments, subject to a computation of excess cash flow for the preceding fiscal year. The Amended Nexstar Credit Agreement also places additional restrictions on the use of proceeds from asset sales, equity issuances, or debt issuances (with the result that such proceeds, subject to certain exceptions, be used for mandatory prepayments of principal and permanent reductions in revolving credit commitments), and includes an anti-cash hoarding provision which requires that Nexstar Broadcasting, Inc. utilize unrestricted cash and cash equivalent balances in excess of $15 million to repay principal amounts outstanding, but not permanently reduce capacity, under the revolving credit facility. The Amended Nexstar Credit Agreement also revised the interest rate provisions. As amended, borrowings under the Facility may bear interest at either (i) a Eurodollar Rate, which has been amended to include an interest rate floor equal to 1% or (ii) a Base Rate, which, as amended, is defined as the greater of (1) the sum of 1/2 of 1% plus the Federal Funds Rate, (2) Bank of America, N.A.'s prime rate and (3) the sum of (x) 1% plus (y) the Eurodollar Rate. The definition of applicable margin was changed to eliminate the pricing grid and replace it with a fixed rate. As amended, the applicable margin for Eurodollar loans is a rate per annum equal to 4% and the applicable margin for Base Rate loans is a rate per annum equal to 3%. On October 8, 2009, Mission Broadcasting, Inc. entered into its first amendment to its Third Amended and Restated Credit Agreement dated as of April 1, 2005, among it, Bank of America, N.A., as Administrative Agent and as L/C Issuer, Banc of America Securities, as joint lead arranger and joint book manager, UBS Securities LLC, as co-syndication agent and joint lead arranger and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as co- syndication agent and joint bank manager, and the several banks parties thereto. A full-text copy of the Second Amendment to Fourth Amended and Restated Credit Agreement is available at no charge at: http://ResearchArchives.com/t/s?4720 Nexstar Broadcasting, Inc., Nexstar Broadcasting Group and Nexstar Finance Holdings, Inc., continue to guarantee full payment of any and all obligations under the Amended Mission Credit Agreement in the event of a default thereunder. The Amended Nexstar Credit Agreement expanded certain cross-default provisions such that the breach of certain warranties, representations or covenants under the Amended Mission Credit Agreement now constitute an event of default under the Amended Nexstar Credit Agreement. Nexstar Broadcasting Group, Inc., as of June 30, 2009, owned, operated, programmed or provided sales and other services to 63 television stations (inclusive of the digital multi-channels), which includes affilates of NBC, ABC, CBS, Fox, MyNetworkTV and The CW in markets located in New York, Pennsylvania, Illinois, Indiana, Missouri, Texas, Louisiana, Arkansas, Alabama, Utah, Massachusetts, Florida, Montana and Maryland. Through various local service agreements, Nexstar provided sales, programming and other services to stations owned or operated by independent third parties. As of June 30, 2009, the Company had $629,760,000 in total assets and in total liabilities of 789,371,000, resulting in stockholder's deficit of $159,611,000. OCTAVIAR LIMITED: Liquidators Secure AU$125 Million Cash -------------------------------------------------------- The Sydney Morning Herald reports that Bentleys Corporate Recovery, the recently appointed liquidator of Octaviar Limited, has secured AU$125 million in cash from the group and was moving to raise more cash from the sale of Octaviar's childcare business, Sunkids. The Herald states that one month since replacing Deloitte as the liquidator under court order, Bentleys said it planned to hold "public examinations" in the first half of 2010, which could shed more light into the dealings that led to the collapse of the financial group after it fell into administration in September 2008. According to the report, Bentleys said it had liaised with the Australian Securities & Investments Commission. Bentleys, as cited by the Herald, said it was also negotiating the former MFS chief executive David Anderson's "ongoing role" with the group. This follows a revelation in BusinessDay last week that Mr. Anderson was paid more than AU$940,000 in consultancy fees from the group's former administrator and liquidator Deloitte, the report notes. The Herald relates Bentleys said it had started closing down Octaviar's offices and was in talks with the Tax Office to access AU$60 million that was under a "freezing order." About Octaviar Limited Headquartered in Queensland, Australia, Octaviar Limited (ASX:OCV) -- http://www.mfsgroup.com.au-- formerly known as MFS Limited, operates as an Investment Management business with a portfolio of businesses and assets, including: operating businesses in the leisure and childcare sectors; real estate portfolio; 35% interest in the Stella Group; operating businesses which hold AFSL licenses and act as Responsible Entity for a number of Managed Investment Schemes. * * * As reported in the Troubled Company Reporter-Asia Pacific on Sept. 15, 2008, Octaviar Limited appointed John Greig and Nicholas Harwood of Deloitte as Voluntary Administrators. The directors of three Octaviar subsidiaries, Octaviar Financial Services Pty Ltd, Octaviar Investment Notes Limited and Octaviar Investment Bonds Limited, also appointed Messrs. Greig and Harwood as Voluntary Administrators. The TCR-AP reported on Sept. 17, 2008, that Fortress Credit Corporation (Australia) II Pty Ltd., one of Octaviar Limited's major creditors, appointed Stephen James Parbery and Anthony Milton Sims of PPB as receivers and managers for Octaviar. Octaviar's the creditors in December 2008 voted for a deed of company arrangement over two entities in the Octaviar group, Octaviar Limited and Octaviar Administration Pty Limited. The three other companies in the group were subsequently wound up. The TCR-AP reported on Aug. 4, 2009, that the Supreme Court of Queensland placed Octaviar Limited into liquidation. Justice Philip McMurdo terminated a deed of company arrangement that has been in place since December, naming company administrators John Greig and Nick Harwood at Deloitte, as provisional liquidators. Administrators and liquidators Greig and Harwood at Deloitte were replaced by Bentleys Corporate Recovery under court order. PALMDALE HILLS: Heavy Rains Worry SunCal on Hazards at Oak Project ------------------------------------------------------------------ Examiner.com reports that heavy rains in the Bay area may have temporarily alleviated the fire risk at SunCal Cos.'s Oak Knoll project, but they raise new concerns among area residents over the potential for above-ground hazardous substances to be washed into Rifle Range Creek. According to Examiner.com, a group of Oakland residents formed the Oak Knoll Coalition to "ensure that SunCal's plans for the site are a good fit with the surrounding community and that they conduct their project responsibly." The coalition posted on its Web site that "nothing in the SunCal material so far suggests that native ecosystems will be a priority in either the open space, creek or greenbelt corridors." The coalition, says the report, also hoped to forge a partnership between the East Bay Regional Parks District and SunCal to "turn over ownership of the designated open space and restored creek corridor to the parks agency." About SunCal Companies SunCal Companies is a California developer. Palmdale Hills Property LLC and other units were formed to develop various residential real estate projects located throughout the western United States. Lehman Brothers Holdings Inc. and an affiliate committed to SunCal on a $2.3 billion funding for the development of various residential real estate projects. The amounts were secured by, among other things, first priority trust deeds on the projects, which include oceanlots in San Clemente, in California. LBHI stopped funding after it filed for bankruptcy in September 15, 2008. Palmdale together with affiliates, which include SunCal Bickford, and LBL-SunCal Northlake LLC, filed for Chapter 11 protection before the U.S. Bankruptcy Court for the Central District of California on Nov. 6, 2008 (Case No. 08-17206). In its petition, Palmdale estimated assets and debts of between $100,000,001 to $500,000,000. Paul J. Couchot, Esq., at Winthrop Couchot PC, represents the Debtors in their restructuring effort. PARTICLE DRILLING: Exits Chapter 11 Bankruptcy Protection --------------------------------------------------------- Greg Barr at Houston Business Journal reports that Particle Drilling Technologies, Inc., has emerged from Chapter 11 bankruptcy with fresh financial backing and a commitment from an energy industry giant intact. Particle Drilling, according to Business Journal, is back in business as a privately held entity, financed by businessman and investor Edward Heil. Business Journal relates that the new holding company is known as PDTI Holdings LLC, but continues to do business as Particle Drilling. Based in Houston, Particle Drilling Technologies, Inc., a Nevada corporation, filed for Chapter 11 on May 30, 2009 (Bankr. S.D. Tex. Case No. 09-33744). On June 1, 2009, Particle Drilling Technologies, Inc., a Delaware Corporation, filed for Chapter 11 (Bankr. S.D. Tex. Case No. 09-33830). Particle Drilling is a development stage oilfield service and technology company owning certain patents and pending patents related to the Particle Impact Drilling technology. Edward L. Rothberg, Esq., at Weycer, Kaplan, Pulaski & Zuber, represents the Debtors as counsel. Particle Drilling Tehnologies, Inc., a Nevada corporation, listed between $1 million and $10 million each in assets and debts. Particle Drilling Technologies, Inc., a Delaware corporation, listed less than $1,000,000 to $10,000,000 each in assets and debts. PEANUT CORP: Simon & Luke Urges Salmonella Victims to Sue --------------------------------------------------------- Jane Mundy at LawyersandSettlements.com reports that Ron Simon at Simon of Simon and Luke, who has been in negotiations on behalf of his clients since April, is urging people sickened by Peanut Corporation of America's products that contained Salmonella to file a lawsuit against the Company. LawyersandSettlements.com quoted Mr. Simon as saying, "The court has finally approved our settlement process. If you qualify you are entitled to part of this $12 million without having to file a lawsuit." According to the report, Mr. Simon said that it is crucial that victims file now because the court has set a deadline and anyone who has a claim must file by October 31. Peanut Corporation of America -- http://www.peanutcorp.com/-- filed a Chapter 7 bankruptcy in February 2009 (Bankr. W.D. Va. No. 09-60452). The Company listed both assets and liabilities in the range of $1 million to $10 million. PHILADELPHIA NEWSPAPERS: Plan Exclusivity Until December 4 ---------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of Pennsylvania further extended the exclusive period of Philadelphia Newspapers LLC and its debtor-affiliates to file a Chapter 11 plan and solicit acceptances of that plan on the earliest to occur of: * December 4, 2009; * failure of the Debtors to file the bid procedures motion, obtain a hearing date on request, or complete their case in support of motion by Oct. 1, 2009; * failure of the Debtors to complete their case in support of approval of the disclosure statement by Oct. 28, 2009; * failure of the Debtors to hold an auction related to the sale And declare a successful bidder by Nov. 18, 2009; and * the Debtors withdraw or make an amendment to or seek authority to make an amendment to the Chapter 11 Plan. This is the third time the Court extended the Debtors' exclusive plan filing period. As reported by the TCR on October 15, Philadelphia Newspapers has filed an appeal on the Bankruptcy Court's ruling last week that gives its creditors the right to use the $300 million in debt they are owed as part of their bid to acquire the Company. The Company is contemplating an auction wherein a group of local investors, including Bruce E. Toll, would be lead bidder for its business. Mr. Toll, through entity Philly Papers, is offering to pay more than $41,000,000, after payment of approximately $6,000,000 in administrative and priority claims. Philadelphia Newspapers is opposing 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 easily top the offer by Toll. 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. 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. PHOENIX FOOTWEAR: Sees $310,000 Net Profit for October 3 Quarter ---------------------------------------------------------------- Phoenix Footwear Group, Inc., last week reported its preliminary results of operations for the third quarter of fiscal 2009 -- ended October 3, 2009: -- Net profit of $310,000, or $0.04 per share, compared to a net loss of $2.1 million for the third quarter of fiscal 2008. -- A loss from continuing operations during the third quarter of $1.0 million, or $0.12 per share. Included in this loss is $303,000 in amortized financing exit fees, $180,000 of payroll related expenses for terminated employees, and $115,000 of financial consulting and other fees. This loss compares to a loss from continuing operations of $1.3 million for the third quarter of fiscal 2008. -- Net sales from continuing operations during the third quarter of $5.5 million, down 32% compared to net sales from continuing operations of $8.0 million during the third quarter of fiscal 2008. -- Funded bank debt balance of $2.6 million at the close of the third quarter, which is a reduction of $5.4 million from the close of the second fiscal quarter of 2009. Commenting on the quarter, Rusty Hall, CEO, said, "We are pleased to report a net profit for the quarter and to have begun rebuilding our capital base and balance sheet. During the quarter we closed the divestiture of our belt accessories business that was operated by our wholly-owned subsidiary, Chambers Belt Company, reduced bank debt by 68%, improved our gross margin by 22 percentage points from the second quarter of fiscal 2009, and further reduced SG&A to $2.3 million for the quarter after eliminating certain nonrecurring items. While our net sales for the quarter continued to be impacted by the difficult retail environment, we believe we have made considerable progress on the sales front. Our order backlog for future shipments is 65% above orders at the same time last year and our products are performing well at retail. Given the foundation our team has rebuilt, and based on this backlog, we expect to begin generating profitable organic growth beginning with the upcoming quarter." On July 9, 2009, the Company closed the Chambers' asset sale transaction with Tandy Brands Accessories, Inc. The transaction was completed pursuant to an Amended and Restated Asset Purchase Agreement dated July 7, 2009. As part of the purchase price, at closing, Tandy paid $2.6 million for inventory and $500,000 for equipment. In addition to the closing payments, during the 12 months following closing, Tandy is obligated to pay Chambers an earn-out based on a percentage of Tandy's revenues generated from the sale of products formerly sold by the Chambers business. This earn-out is not capped and provides for $2,000,000 in minimum aggregate payments. These payments are to be paid on a monthly basis, except for an initial $430,000 advance payment that was made to Chambers at closing. As of October 3, 2009, the Company had $13.2 million in total assets against $9.56 million in total liabilities. On October 9, 2009, the Company received a notice from the NYSE Amex LLC, indicating that as of its quarter ended July 4, 2009, the Company failed to meet the continued listing standards of the NYSE Amex. Specifically, the letter stated that the Company is not in compliance with Section 1003(a)(ii) of the NYSE Amex Company Guide, with stockholders' equity of less than $4,000,000 and losses from continuing operations or net losses in three of its four most recent fiscal years. The letter also stated that the Company must submit a plan to the NYSE Amex by November 9, 2009 addressing how it intends to regain compliance with this continued listing standards by April 11, 2011. The plan must be approved by the NYSE Amex in order for the Company to maintain its listing. The Company intends to submit a plan shortly to the NYSE Amex that responds to this notification. The policy of the NYSE Amex is to make a determination within 45 days of a company's submission of a plan for compliance as to whether the company has made reasonable demonstration in the plan of an ability to regain compliance with the continued listing standards within the requisite time frame. The NYSE Amex may either accept the plan, at which time the Company will be subject to ongoing monitoring for compliance with the plan, or not accept the plan and initiate delisting proceedings. There can be no assurance that the NYSE Amex will accept any plan that the Company submits or that, if it does accept any such plan, the NYSE Amex will not subsequently initiate delisting proceedings as a result of the NYSE Amex's compliance monitoring with respect to that plan or otherwise. About Phoenix Footwear Group Phoenix Footwear Group, Inc. (NYSE Amex: PXG) headquartered in Carlsbad, California, designs, develops and markets men's and women's footwear and accessories. Phoenix Footwear's brands include Trotters(R), SoftWalk(R) and H.S. Trask(R). The brands are primarily sold through department stores, specialty retailers, mass merchants and catalogs. As of July 4, 2009, the Company had $20.4 million in total assets and $17.1 million in total liabilities. PHOENIX FOOTWEAR: Wells Fargo Loan Amended, Forbearance Extended ---------------------------------------------------------------- Effective October 15, 2009, Phoenix Footwear Group, Inc., and its subsidiaries together with Wells Fargo Bank, National Association, entered into a Third Amendment to Forbearance Agreement and Fourth Amendment to Credit and Security Agreement. The Fourth Amendment amends and modifies certain terms of the Credit and Security Agreement dated June 10, 2008, as amended. Under the terms of the Fourth Amendment, these changes were made to the Credit Agreement and Forbearance Agreement: -- The borrowing base has been changed by decreasing the inventory sublimit to $2.3 million; -- The percentage of Eligible Inventory, currently at 46%, shall be reduced by 1% each Business Day beginning on October 26, 2009, through and including the Forbearance Termination Date; -- Upon receipt of the October earn-out payment due from Tandy Brands, Accessories, Inc., in connection with the sales of the Company's wholly-owned subsidiary, Chambers Belt Company, such payment shall be applied in this order: * First, to the outstanding amounts of the $170,000 Forbearance Fee due under the First Amendment; * Second, to the Deferred Accommodation Fee due under the Third Amendment; and * Third, to the repayment of the Revolving Note, provided that such repayment shall not result in a permanent reduction of the maximum availability. -- Subsequent earn-out payments by Tandy Brands, Accessories, Inc. to Chambers shall be applied to the repayment of the Revolving Note and may not be reborrowed unless consented to by Wells Fargo; and -- The maturity date for the Revolving Note and the expiration of the forbearance period has been extended to October 23, 2009, with various automatic extensions that defer the maturity to November 30, 2009, provided the Company adheres to certain conditions. Under the Fourth Amendment, Wells Fargo agreed, during a forbearance period, to refrain from exercising any rights and remedies which it is or may become entitled to as a result of the existing past financial covenant defaults. Also, the Fourth Amendment provides for Wells Fargo to continue making advances under the line of credit, subject to the conditions of the Credit Agreement, excluding, however, the Specified Events of Default (which includes the defaults that have been disclosed to Wells Fargo to date). The forbearance period began on July 9, 2009, and, provided the Company meets certain conditions, ends on October 23, 2009, with various automatic extensions that the maturity date to November 30, 2009, subject to earlier termination at the election of Wells Fargo in the event of an occurrence of any event of default under the Credit Agreement other than the Specified Events of Default, and subject to automatic termination in the event of the occurrence of certain insolvency proceedings involving Phoenix Footwear or its subsidiaries. The Fourth Amendment also provides that the continuing forbearance by Wells Fargo is conditioned upon Phoenix Footwear's continuing engagement of a financial turnaround consulting firm (which has occurred) to provide specified financial consulting services and the repayment in full of all indebtedness owed to Wells Fargo on or before the maturity date of the Revolving Note. The Fourth Amendment requires Phoenix Footwear to pay a $25,000 accommodation fee on December 1, 2009 unless Phoenix Footwear repays the indebtedness in full on or before November 30, 2009. As of October 14, 2009, the Company had $2.8 million outstanding under the Credit Agreement with remaining availability of $221,000. The Company is engaged in discussions with several different financing sources to provide the Company with proceeds to repay in full its revolving line of credit debt on or before November 30, 2009. There is no assurance, however, that the Company will be able to obtain such a facility on acceptable terms and covenants or when and if the Company will be able to repay its current facility in full. If the Company is unable to complete a financing transaction prior to November 30, 2009, the Company plans to seek a fourth extension of the forbearance period so that it may complete such a transaction. There is no assurance that it will be granted or the terms and conditions thereof. If such a request is not granted, Wells Fargo may accelerate the Company's indebtedness and/or foreclose on its assets. About Phoenix Footwear Group Phoenix Footwear Group, Inc. (NYSE Amex: PXG) headquartered in Carlsbad, California, designs, develops and markets men's and women's footwear and accessories. Phoenix Footwear's brands include Trotters(R), SoftWalk(R) and H.S. Trask(R). The brands are primarily sold through department stores, specialty retailers, mass merchants and catalogs. As of July 4, 2009, the Company had $20.4 million in total assets and $17.1 million in total liabilities. PIKE NURSERIES: Court OKs $3MM Settlement with Roark Capital ------------------------------------------------------------ Peralte C. Paul at The Atlanta Journal-Constitution reports that the Honorable Mary Grace Diehl of the U.S. Bankruptcy Court for the Northern District of Georgia has approved the $3 million settlement that Pike Nursery Holding LLC agreed to with Roark Capital Group, the private equity firm that once owned it, ending the almost two-year-old case but doesn't affect the Pike Nurseries chain, whose 16 metro Atlanta stores are owned by Armstrong Garden Centers. The court-appointed trustee in the case, Marcus A. Watson, had reached a mediated settlement with Roark Capital, avoiding a potentially expensive and lengthy case to see whether Roark drained Pike Nurseries of capital after it took over the Company. Based in Norcross, Georgia, Pike Nursery Holdings LLC operates plant nurseries in 22 locations at Georgia, North Carolina, and Alabama. Due to drought and further water supply restrictions, the Debtor filed for Chapter 11 protection on Nov. 14, 2007 (Bankr. N.D. Ga. Case No. 07-79129). J. Robert Williamson, Esq., at Scroggins and Williamson, represents the Debtor in its restructuring efforts. The Debtor chose BMC Group as its claims, noticing, and balloting agent. Jeffrey N. Pomerantz, Esq. and Jeffrey W. Dulberg, Esq., at Pachulski Stang Ziehl & Jones LLP, represent the Official Committee of Unsecured Creditors. As reported in the Troubled Company Reporter on Jan. 30, 2008, the Debtor's summary of schedules show assets of $32,825,851 and debts of $31,562,277. PILGRIM'S PRIDE: FWISD Objects to Valorem Tax Terms of Plan ----------------------------------------------------------- The Fort Worth Independent School District informs the Court that it disagrees with the Debtors' Plan of Reorganization. The FWISD is a subdivision of the State of Texas and is authorized to levy and assess ad valorem taxes on the value of property located within its taxing jurisdiction as of January 1 of each tax year. Scot Pierce, Esq., at Bracket & Ellis, A Professional Corporation, in Fort Worth, Texas, informs the Court that Pilgrim's Pride Corporation was the legal owner of certain business personal property located in FWISD's taxing jurisdiction on January 1, 2008, and January 1, 2009. On the Debtors' Petition Date, the FWISD filed a proof of claim for 2008 ad valorem taxes assessed against the Property in the amount of $678,174. Those taxes became delinquent on February 1, 2009. The value underlying those taxes is currently being litigated at the Tarrant Appraisal District, according to Mr. Pierce. Since the Petition Date, a tax lien for 2009 taxes has been assessed against the Property under state law, Mr. Pierce relates. On January 1, 2010, a tax lien for 2010 ad valorem taxes will attach to the Property. The FWISD's primary objections to the Plan concerns FWISD's protection of its prepetition and postpetition liens. The FWISD objects to the Plan because: * it fails to specify that ad valorem taxes incurred post- petition are to be paid in the ordinary course of business without the need to file an administrative claim. Furthermore, Debtors' failure to pay postpetition taxes by February 1 should be considered a default under the Plan entitling the FWISD to pursue all state court remedies without the need for further intervention of the Court. * it defines a "Disputed Claim" as including any Claim "which has been or hereafter is listed by a Debtor on its Schedules as unliquidated, disputed or contingent and which has not been resolved by written agreement of the parties or a Final Order." A claim should only be classified as a "Disputed Claim" if the Debtors file an objection to the claim and explain the legal and factual basis for their dispute. * it provides that no distribution or payments will be made on any Disputed Claim until it becomes an Allowed Claim. In the event the Debtors object to the FWISD's claim, the Debtors should make payments on the undisputed portion of the claim pending the claim's allowance. * it specifies that interest will commence "upon the later of the (i) Effective Date and the date the Secured Tax Claim becomes an Allowed Secured Tax Claim . . ." The FWISD objects to the extent the Plan is intended to provide for postpetition interest to accrue from any date other than the Petition Date. * it seeks to deny ad valorem tax creditors statutory interest on their claims while any claim is classified as a "Disputed Claim." Sections 506 and 511 of the Bankruptcy Code provides that the rate and amount of interest on ad valorem tax claims will be determined under applicable non- bankruptcy law. The FWISD is entitled to payment of the full amount of its secured claim plus post-petition interest at the state statutory rate of 1% per month. * it purports to terminate the FWISD's liens and claims on property before they are paid in full. The school district's claims and liens should not be released until they are paid in full. * it purports to release the Debtor, Reorganized Debtor or any party or entity from liability for payment of any unpaid postpetition taxes. The values underlying these postpetition taxes are currently being litigated at the Tarrant Appraisal District. Nothing in the Plan should release any liability on these taxes until they are paid in full or otherwise resolved. The FWISD also objects to the extent the Plan attempts to release any person or entity from any liability for the FWISD's taxes who were not Debtors in this matter. JBS-Backed Chapter 11 Plan Pilgrim's Pride Corporation and six debtor-affiliates filed a joint plan of reorganization and explanatory disclosure statement with the U.S. Bankruptcy Court for the Northern District of Texas. Pilgrim's Pride and JBS S.A. have agreed to a transaction representing an enterprise value of approximately US$2.8 billion. The Plan will be financed in part by the sale of 64% of the stock to JBS for US$800 million, leaving the remaining 36% of the stock, presumptively worth US$450 million, for existing equity holders. All creditors will be paid fully either in cash or through issuance of new debt. Proceeds from the sale of the new common stock of the reorganized Pilgrim's Pride to JBS will be used to fund cash distributions to allowed claims under the plan. Under the terms of the plan, all creditors of the Debtors holding allowed claims will be paid in full. All existing Pilgrim's Pride common stock will be cancelled and existing stockholders will receive the same number of new common stock shares, representing 36% of the reorganized Pilgrim's Pride in aggregate. The plan also calls for an exit facility for senior secured financing in an aggregate principal amount of at least US$1.65 billion. The disclosure statement hearing is currently scheduled to take place on October 20, 2009, at 10:30 a.m. CT before the Bankruptcy Court. If the Bankruptcy Court determines that the proposed disclosure statement provides adequate information to vote on the plan, then the proposed disclosure statement and plan, along with the appropriate ballots, will be sent to shareholders to vote on the plan. Since the proposed plan of reorganization represents a "100% plan," with creditors being repaid in full, shareholders represent the only impaired class and will be the only group entitled to vote on the plan of reorganization. A copy of the Disclosure Statement is available for free at: http://bankrupt.com/misc/Pilgrims_Disc_Statement.pdf About Pilgrim's Pride Headquartered in Pittsburgh, Texas, Pilgrim's Pride Corporation (Pink Sheets: PGPDQ) -- http://www.pilgrimspride.com/-- employs roughly 41,000 people and operates chicken processing plants and prepared-foods facilities in 14 states, Puerto Rico and Mexico. The Company's primary distribution is through retailers and foodservice distributors. Pilgrim's Pride Corp. and six other affiliates filed Chapter 11 petitions on December 1, 2008 (Bankr. N.D. Tex. Lead Case No. 08-45664). The Debtors' operations in Mexico and certain operations in the United States were not included in the filing and continue to operate as usual outside of the Chapter 11 process. Pilgrim's Pride has engaged Stephen A. Youngman, Esq., Martin A. Sosland, Esq., and Gary T. Holzer, Esq., at Weil, Gotshal & Manges LLP, as bankruptcy counsel. Lazard Freres & Co., LLC, is the Company's investment bankers and William K. Snyder of CRG Partners Group LLC is chief restructuring officer. Kurtzman Carson Consulting LLC serves as claims and notice agent. Kelly Hart and Brown Rudnick represent the official equity committee. Attorneys at Andrews Kurth LLP represents the official committee of unsecured creditors. As of December 27, 2008, the Company had US$3,215,103,000 in total assets, US$612,682,000 in total current liabilities, US$225,991,000 in total long-term debt and other liabilities, and US$2,253,391,000 in liabilities subject to compromise. Bankruptcy Creditors' Service, Inc., publishes Pilgrim's Pride Bankruptcy News. The newsletter tracks the Chapter 11 proceeding of Pilgrim's Pride Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) PILGRIM'S PRIDE: Kornitzer No Longer Serving on Creditors Panel --------------------------------------------------------------- William T. Neary, United States Trustee for Region 7, informs the Court that Kornitzer Capital Management/Great Plains Trust Company/Buffalo Funds is no longer serving as member of the Official Committee of Unsecured Creditors in the Chapter 11 cases of Pilgrim's Pride Corporation and its debtor subsidiaries. The Creditors' Committee is now composed of: (1) Ala Trade Foods, LLC Attn: Davis Lee 725 Blount Avenue Guntersvile, AL 35976 Tel No: (256)571-9696 Fax No: (256)571-9977 E-mail: pyarcey@alatrade.com (2) The Bank of New York Mellon Trust Attn: J. Chris Matthews 601 Travis 16th Floor Houston, TX 77002 Tel No: (713)483-6267 Fax No: (713)483-6979 E-mail: j.chris.matthews@bnymellon.com (3) Calamos Advisors LLC Attn: John Krasucki 2020 Calamos Court Naperville, Il 60563 Tel No: (245)-7215 Fax No: (245)-7522 E-mail: jkrasucki@calamos.com (4) HSBC Bank USA, National Association Attn: Sandra E. Horwitz 10 East 40th Street, 14th Floor New York, NY 10016-0200 Tel No: (212)525-1358 Fax No: (212)525-1366 E-mail: Sandra.e.horwitz@us.hsbc.com (5) International Paper Company Attn: Ronald Borcky 4049 Willow Lake Blvd. Memphis, TN 38118 Tel No: (901)419-1295 Fax No: (901)419-1235 E-mail: Ronald.borky@ipaper.com (6) Newly Weds Foods, Inc. Attn: Brian Toth 4140 West Fullerton Avenue Chicago, IL 60639 Tel No: (773)292-7647 Fax No: (773)292-2423 E-mail: mlopez@newlywedsfoods.com (7) Oaktree Capital Management Attn: Frances Nelson 333 S. Grand Avenue 28th Floor Los Angeles, CA 90071 Tel No: (213)830-6467 Fax No: (213)830-8567 E-mail: fnelson@oaktreecapital.com (8) Pension Benefit Guarantee Corp. Attn: Marc Pfeuffer 1200 K Street NW Washington, DC 20009 Tel No: (202)326-4020 Fax No: (202)326_4112 E-mail: Pfeuffer.marc@pbgc.gov (9) United Food & Commercial Workers International Union Attn: Mark D. Lauritesen 1775 K Street, NW Washington, DC 20006-1598 Tel No: (202)223-3111 Fax no: (202)721-8009 E-mail: mlauritsen@utcw.org About Pilgrim's Pride Headquartered in Pittsburgh, Texas, Pilgrim's Pride Corporation (Pink Sheets: PGPDQ) -- http://www.pilgrimspride.com/-- employs roughly 41,000 people and operates chicken processing plants and prepared-foods facilities in 14 states, Puerto Rico and Mexico. The Company's primary distribution is through retailers and foodservice distributors. Pilgrim's Pride Corp. and six other affiliates filed Chapter 11 petitions on December 1, 2008 (Bankr. N.D. Tex. Lead Case No. 08-45664). The Debtors' operations in Mexico and certain operations in the United States were not included in the filing and continue to operate as usual outside of the Chapter 11 process. Pilgrim's Pride has engaged Stephen A. Youngman, Esq., Martin A. Sosland, Esq., and Gary T. Holzer, Esq., at Weil, Gotshal & Manges LLP, as bankruptcy counsel. Lazard Freres & Co., LLC, is the Company's investment bankers and William K. Snyder of CRG Partners Group LLC is chief restructuring officer. Kurtzman Carson Consulting LLC serves as claims and notice agent. Kelly Hart and Brown Rudnick represent the official equity committee. Attorneys at Andrews Kurth LLP represents the official committee of unsecured creditors. As of December 27, 2008, the Company had US$3,215,103,000 in total assets, US$612,682,000 in total current liabilities, US$225,991,000 in total long-term debt and other liabilities, and US$2,253,391,000 in liabilities subject to compromise. Bankruptcy Creditors' Service, Inc., publishes Pilgrim's Pride Bankruptcy News. The newsletter tracks the Chapter 11 proceeding of Pilgrim's Pride Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) PILGRIM'S PRIDE: Parties File Disclosure Statement Objections ------------------------------------------------------------- Various parties have filed objections to the disclosure statement explaining the proposed Chapter 11 plan of Pilgrim's Pride Corp. (a) Creditors Committee The Official Committee of Unsecured Creditors asks Judge D. Michael Lynn of the United States Bankruptcy Court for the Northern District of Texas, Fort Worth Division, not to approve the Disclosure Statement explaining the Debtors' Joint Plan of Reorganization. The Creditors' Committee asserts that the Disclosure Statement should not be approved at this time because the Plan does not -- as the Disclosure Statement contends -- render Class 6 and Class 7 claims "unimpaired." Rather, Jason S. Brookner, Esq., at Andrews Kurth LLP, in Dallas, Texas, argues that Class 6 and Class 7 are, in fact, impaired because the Plan does not provide for full payment of postpetition interest to the holders of Claims to those Classes. The Creditors' Committee further asserts that the Plan must be modified to include provisions allowing the Court to determine the amount of postpetition interest that would render the holders of Claims in Class 6 and Class 7 unimpaired. (b) Black Horse Capital Black Horse Capital Management LLC and its affiliate entities are holders of 8-3/8% Senior Subordinated Notes of Pilgrim's Pride Corporation. Black Horse requests the Court to deny approval of the Debtors' Disclosure Statement because of the Debtors' entry into the Stock Purchase Agreement with JBS Holdings, Inc., the proposed Mandatory Exchange Transaction, and the proposed Exit Facility. According to Catherine L. Steege, Esq., at Jenner & Block LLP, in Chicago, Illinois, the Debtors' Plan is in effect a disguised take-over, with the Plan Sponsor acquiring the Debtor in exchange for cash, assumption of debt, and stock. Although this transaction is being accomplished in two-steps, with the Mandatory Exchange Transaction occurring post-confirmation, the Plan Sponsor will end up owning all of the common stock of PPC without having its proposed transaction tested by the Section 363 sale process, without a fairness opinion rendered, without the Plan Sponsor paying a take-over premium, and with the Chief Executive Officer enjoying all of the payments due for a Plan that does not sell a majority of the Debtors' assets Black Horse objects to the Debtors' Disclosure Statement because it fails to provide "adequate information" that a reasonable shareholder would consider to be important in deciding how to vote on the Debtors' Plan, like (i) the proposed Transactions with the Plan Sponsor which amount to a take-over of the Debtor, (ii) the risks of the Mandatory Exchange Transaction to equity holders, (iii) the terms of the Chief Executive Officer's Employment Agreement which provides that he will receive certain cash and stock upon confirmation of a "Plan of Reorganization" but only if the Plan "does not provide for a sale of a majority of the Company's and its subsidiaries' assets," and (iv) additional details regarding the broad third- party releases provided for in the proposed Plan. (c) Growers More than 200 growers from Arkansas, Georgia, North Carolina and Alabama, represented by Teresa Wineland, Esq., at Williams and Anderson PLC, in Little Rock, Arkansas, assert that the Disclosure Statement should not be approved because it does not provide adequate information from which the Growers can determine whether sufficient funds will be available to pay all allowed claims as the Plan provides, including the Growers' claims, which the Growers estimate to be $127 million. The Debtors should be required to specify both the amount of claims filed by creditors and the amount of claims recognized by the Debtors, Ms. Wineland tells the Court. Without this information, it is impossible to adequately determine whether either fund is sufficient to pay the claims proposed to be paid from it, including the claims of Growers, Ms. Wineland argues. (c) Retirement Plan Members David Simmons, Carla Simmons, Patty L. Funkhouser and Dickie Funkhouser, individually and as representatives of a class of participants or beneficiaries of the Pilgrim's Pride Retirement Savings Plan -- the 401(k) Plan -- tell the Court that approximately 27,000 of the Debtors' current and former employees and their beneficiaries are holders of tens of millions of dollars in claims resulting from the failure of the Debtors to comply with the Employee Retirement Income Security Act of 1974, as amended, through (i) illegal amendments to the 401(k) Plan Document to lower the Debtors' employer contributions, and (ii) the offering of imprudent investment fund in the 401(k) Plan. According to Daniel D. Doyle, Esq., at Spencer Fane Britt & Browne LLP in St. Louis, Missouri, the Debtors' Disclosure Statement, being virtually silent on the treatment of ERISA Claims, which are indemnified by the Debtors pursuant to the 401(k) Plan, cannot be approved because it describes a plan of reorganization that is so fatally flawed that confirmation is impossible. In a separate filing, Kenneth Patterson and Denise M. Smalls, Plaintiffs in the consolidated ERISA class action filed with the United States District Court for the Eastern District of Texas, on behalf of all participants in two retirement plans sponsored by Pilgrim's Pride whose accounts were invested in Pilgrim's Pride stock, the Pilgrim's Pride Retirement Savings Plan and the To-Ricos, Inc. Employees Savings and Retirement Plan, object to the Debtors' proposed Plan to the extent that the Plan could be read to release any of the claims that have been asserted in the ERISA Action, including the claims against the non-Debtor defendants in that action. The ERISA Action does not name the Debtors as defendants but does name certain Pilgrim's Pride officers, directors and employees as defendants because they serve as fiduciaries of the retirement plans at the issue of the ERISA Action. (c) BNY & Halcyon In separate filings, the Bank of New York Mellon, Indenture Trustee for the 8-3/8% Senior Subordinated Notes Due May 1, 2017 and the 9-1/4% Senior Subordinated Notes Due November 15, 2013, and Halcyon Distressed Master Fund L.P. and Halcyon Master Fund L.P. submitted similar contentions for their belief that the Debtors' Disclosure Statement lacks sufficient information specifically on these issues, hence it should be denied: * The Plan, which seeks to distribute approximately $450 million in interests in the reorganized Debtors to prepetition interest holders without satisfying in full the Debtors' contractual obligations to pay overdue interest to the holders of allowed Class 6(a), 6(b) and 6(c) Claims, does not meet the "fair and equitable" requirements of the Bankruptcy Code. * The Plan fails to provide sufficient disclosure with respect to the rights of holders of Class 6(a) and 6(b) Claims to enforce prepetition subordination agreements. * The Disclosure Statement does not advise parties-in-interest that the Plan may not be confirmable as a matter of law. * The Disclosure Statement and the Plan improperly classifies Class 6(a), 6(b) and 6(c) Claims as unimpaired, and not entitled to vote. This issue, if not resolved prior to the Plan solicitation, may require the Debtors to re-solicit the Plan, resulting in a waste of valuable judicial time and resources estate assets. (d) U.S. Debt Recovery The United States Debt Recovery III LP, as successor in interest to Gabriel Acuna, a creditor and a party-in-interest in the Debtors' Chapter 11 cases, is not in favor of the Debtors' Disclosure Statement and asks the Court to deny its approval, contending that the Disclosure Statement improperly classified USDR's Debt Claim as unimpaired. William A. (Trey) Wood, III, Esq., at Bracewell & Guillani LLP, in Houston, Texas, relates that prior to the Petition Date, the United States District Court for the Eastern District of Texas entered a $385,251 final judgment in favor of Mr. Acuna against Pilgrim's Pride Corporation, plus a post-judgment interest entitlement of five percent from August 20, 2008. On February 24, 2009, Mr. Acuna filed a proof of claim against the Debtor in the amount of $385,251. On August 6, 2009, USDR purchased Mr. Acuna's Claim. On September 17, 2009, the Debtor filed its disclosure statement which provides that general unsecured claims against Pilgrim's Pride Corporation are "unimpaired by the Plan". The Disclosure Statement also provides that allowed general unsecured claims will receive "post-petition interest at the federal judgment rate as of the date of entry of the Confirmation Order...." Pursuant to Section 1124 of the Bankruptcy Code, "a class of claims or interests is impaired under a plan unless, with respect to each claim or interest of that class, the plan leaves unaltered the legal, equitable, and contractual rights to which the claim or interest entitles the holder of the claim or interest," Mr. Wood contends. USDR's Claim is impaired because the Debtor is proposing to alter the legal or equitable rights to which the Claim entitles USDR, he asserts. Pursuant to the Disclosure Statement, USDR would be receiving less than 5% interest on its Claim because the current federal judgment rate is less than 1%. Notwithstanding the Debtors' proposal to substantially lower the 5% interest rate to which USDR is legally entitled, the Debtors have classified USDR's Claim as unimpaired by the Plan. In view of these, the Debtors' Disclosure Statement should not be approved. USDR's Claim should either receive 5% interest or be classified as impaired, thus giving USDR the right to vote on the Plan, Mr. Wood maintains. (e) HSBC Bank USA HSBC Bank USA, National Association, as successor trustee for the Debtors 7-5/8 Senior Notes due 2015 in the aggregate amount of $400,000,000 complains that the Debtors' Disclosure Statement (i) misrepresents the amounts which the holders of the Senior Notes are entitled to recover, which include interest at the default rates specified in the Senior Notes on all unpaid principal and interest; and (ii)incorrectly states that the holders of the Senior Notes are "unimpaired" and not entitled to vote on the Plan, when in fact, they are impaired and entitled to vote under Section 1126 of the Bankruptcy Code. Sarah Link Schultz, Esq., at Akin Gump Strauss Hauer & Feld LLP, in Dallas, Texas, asserts that the Debtors Disclosure Statement misstates the payments to which the holders of the Senior Notes will be entitled, misstates that they are entitled to interest only at the non-default rate, and improperly states that the holders of the Senior Notes are unimpaired and not entitled to vote on the Plan. Additionally, the Disclosure Statement and the Plan should expressly state, that the Plan does not affect the subordination provisions of the indentures governing the notes junior to the Senior Notes. In light of these objections, HSBC proposes to the Court that the Disclosure Statement should be amended and the Plan should provide that the (i) Senior Noteholders are entitled to interest on the outstanding principal amount of the Senior Notes from the Petition Date to the Date of the payment at the contract rate of 7-5/8% plus 2% per annum, properly compounded; (ii) the Senior Noteholders are entitled to interest on the unpaid installments of interest that were due on November 3, 2008, and May 1, 2009, and the dates the installments become due to the date of payment at the contract rate of 7-5/8% plus 2% per annum, properly compounded, Ms. Schultz states. (e) The Brodeur Claimants The more than 400 grower-claimants of the Debtors represented by Mark C. Brodeur, Esq., at Brodeur Law Firm in Dallas, Texas, and headed by Sheila and James Adams assert that the Debtors' Disclosure Statement in its current form should be denied, as it is "inaccurate and misleading." Further, the Claimants request the Court to require the Debtors to revise their Disclosure Statement in accordance with the Claimants' objections, a full- text copy of which is available for free at: http://bankrupt.com/misc/PPC_brodeurclaimants_dsobj.pdf JBS-Backed Chapter 11 Plan Pilgrim's Pride Corporation and six debtor-affiliates filed a joint plan of reorganization and explanatory disclosure statement with the U.S. Bankruptcy Court for the Northern District of Texas. Pilgrim's Pride and JBS SA have agreed to a transaction representing an enterprise value of approximately US$2.8 billion. The Plan will be financed in part by the sale of 64% of the stock to JBS for US$800 million, leaving the remaining 36% of the stock, presumptively worth US$450 million, for existing equity holders. All creditors will be paid fully either in cash or through issuance of new debt. Proceeds from the sale of the new common stock of the reorganized Pilgrim's Pride to JBS will be used to fund cash distributions to allowed claims under the plan. Under the terms of the plan, all creditors of the Debtors holding allowed claims will be paid in full. All existing Pilgrim's Pride common stock will be cancelled and existing stockholders will receive the same number of new common stock shares, representing 36% of the reorganized Pilgrim's Pride in aggregate. The plan also calls for an exit facility for senior secured financing in an aggregate principal amount of at least US$1.65 billion. The disclosure statement hearing is currently scheduled to take place on October 20, 2009, at 10:30 a.m. CT before the Bankruptcy Court. If the Bankruptcy Court determines that the proposed disclosure statement provides adequate information to vote on the plan, then the proposed disclosure statement and plan, along with the appropriate ballots, will be sent to shareholders to vote on the plan. Since the proposed plan of reorganization represents a "100% plan," with creditors being repaid in full, shareholders represent the only impaired class and will be the only group entitled to vote on the plan of reorganization. A copy of the Disclosure Statement is available for free at: http://bankrupt.com/misc/Pilgrims_Disc_Statement.pdf About Pilgrim's Pride Headquartered in Pittsburgh, Texas, Pilgrim's Pride Corporation (Pink Sheets: PGPDQ) -- http://www.pilgrimspride.com/-- employs roughly 41,000 people and operates chicken processing plants and prepared-foods facilities in 14 states, Puerto Rico and Mexico. The Company's primary distribution is through retailers and foodservice distributors. Pilgrim's Pride Corp. and six other affiliates filed Chapter 11 petitions on December 1, 2008 (Bankr. N.D. Tex. Lead Case No. 08-45664). The Debtors' operations in Mexico and certain operations in the United States were not included in the filing and continue to operate as usual outside of the Chapter 11 process. Pilgrim's Pride has engaged Stephen A. Youngman, Esq., Martin A. Sosland, Esq., and Gary T. Holzer, Esq., at Weil, Gotshal & Manges LLP, as bankruptcy counsel. Lazard Freres & Co., LLC, is the Company's investment bankers and William K. Snyder of CRG Partners Group LLC is chief restructuring officer. Kurtzman Carson Consulting LLC serves as claims and notice agent. Kelly Hart and Brown Rudnick represent the official equity committee. Attorneys at Andrews Kurth LLP represents the official committee of unsecured creditors. As of December 27, 2008, the Company had US$3,215,103,000 in total assets, US$612,682,000 in total current liabilities, US$225,991,000 in total long-term debt and other liabilities, and US$2,253,391,000 in liabilities subject to compromise. Bankruptcy Creditors' Service, Inc., publishes Pilgrim's Pride Bankruptcy News. The newsletter tracks the Chapter 11 proceeding of Pilgrim's Pride Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) PREBUL AUTO: Civil Disputes Won't Be Transferred to State Court --------------------------------------------------------------- Monica Mercer at Chattanooga Times Free Press reports that the U.S. Bankruptcy Court has denied former Chattanooga car dealership owner Jospeh Prebul's request to bring a case that involves a dispute with his brother-in-law Danny Bensusan back to state court. Chattanooga Times relates that the soured relationship between Messrs. Prebul and Bensusan has led to the Prebul dealerships buckling under bankruptcy as well as criminal charges against Mr. Prebul in the U.S. District Court. According to Chattanooga Times, Mr. Prebul is accused of bilking Mr. Bensusan out of at least $6.8 million by solicited his money under false pretenses. The case is set to go to trial on November 16, says the report. Prebul Automotive Group is based in Chattanooga. It is owned by car dealer Joe Prebul. As reported by the Troubled Company Reporter on March 19, 2009, Prebul Auto Group filed for Chapter 7 bankruptcy protection. PRIMARY ENERGY: S&P Assigns 'BB+' Rating on $105 Mil. Senior Loan ----------------------------------------------------------------- Standard & Poor's Ratings Services said that it assigned a preliminary 'BB+' rating to Primary Energy Operations LLC's $105 million senior secured term loan of a five-year maturity. The company will use the proposed debt issuance to refinance an existing term loan of $131 million (unrated) that comes due February 2010. The proceeds will also fund a six-month debt service reserve and cover transaction expenses with the sale. The transaction takes place following the successful completion of a debt-for-equity swap replacing $80.5 million of 11.75% subordinated notes at public Canadian Primary Energy Recycling Corp. with common equity, as well as an equity rights offering of $50 million. Concurrently with the refinancing, the debt in the structure will include the $105 million at Primary Energy. S&P will finalize the rating following the financial close of the transaction and a successful review of the executed transaction documents. The recovery rating on the term loan is '4', indicating expectations of modest recovery (30%-50%) in a payment default scenario. The stable outlook reflects Standard & Poor's view that the portfolio's capital structure is sufficient to bear modest risks of the relevant steel facilities, without significantly deviating from S&P's de-levering expectations via the 100% cash flow sweep. If these facilities become uneconomic or the parent companies' credit further deteriorates, S&P would likely consider a ratings downgrade. Similarly, any operating or earnings scenario that results in less than $25 million-$35 million per year of amortization would increase refinancing risk in S&P's view, and warrant downgrade consideration. If the first-lien repayment occurs faster than S&P expected ($40 million-$50 million per year) for any reason, S&P would consider an upgrade. PROLIANCE INT'L: Wants Sole Rights for Plan Filing Until January ---------------------------------------------------------------- Proliance International Inc. and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Delaware to extend their exclusive periods to: * file a Chapter 11 plan until Jan. 31, 2010; and * solicit acceptances of that plan until March 31, 2010. According to the motion, the extension of time will provide the Debtors and their professionals with the time needed to continue working with their constituents and complete the tasks necessary to develop, file and seek confirmation of a Chapter 11 plan. The Debtors remind the Court that their current exclusive plan filing deadline is Oct. 30, 2009, three days before their administrative bar date. A hearing is set for Oct. 27, 2009, at 2:00 p.m., to consider the Debtors' request for extension. Objections, if any, are due Oct. 20, 2009. Based in New Haven, Connecticut, Proliance International, Inc. -- http://www.pliii.com/-- aka Godan makes automobile parts. The Company and its affiliates filed for Chapter 11 on July 2, 2009 (Bankr. D. Del. Lead Case No. 09-12278). Christopher M. Samis, Esq., and Daniel J. DeFranceschi, Esq., at Richards, Layton & Finger PA, represent the Debtors in their restructuring efforts. The Debtors' financial condition as of June 22, 2009, showed total assets of $160.3 million and total debts of $133.5 million. The sale of Proliance's North American assets to Centrum Equities XV, LLC, was consummated under the provisions of Section 363 of the Bankruptcy Code on August 14, 2009. READER'S DIGEST: Proposes Bertelsmann Outsourcing Pacts ------------------------------------------------------- The Reader's Digest Association Inc. and its units ask the Court to approve and seek authority to enter into certain product and merchandise outsourcing agreements with certain subsidiaries of Bertelsmann AG. Consistent with their practice and as part of the initiatives associated with the Debtors' long-term strategic business plan, the Debtors began negotiating the terms of the Outsourcing Agreements with Bertelsmann prior to the Petition Date, James H.M. Sprayregen P.C., Esq., at Kirkland & Ellis LLP, in New York, relates. Bertelsmann, according to Mr. Sprayregen, is a leading business outsourcing services provider. The Outsourcing Agreements covers the procurement and production of (i) book product and media product, and (ii) certain merchandise and premiums, with the exception of food, food supplements and vitamins. The salient terms of the Book and Media Outsourcing Agreement are: (a) The term of the Book and Media Outsourcing Agreement will be five years; (b) An affiliate of Avarto, Printmanagement GMBH, will provide procurement and production services for the Debtors' book products and media products. (c) The Book and Media Outsourcing Agreement includes these pricing schedule and terms: * Years 1 to 3: Flat prices based on Reader's Digest's 2008 price grids, except for paper and polycarbonate rate fluctuation adjustments, every six months; * Years 4 to 5: Price grids adjusted to reflect consumer price index fluctuations with a cap on products with the same specifications; * Payment Terms: Net 30 days; * For unique conventional book products and unique children's products, specific pricing markups apply; and * Reasonable currency fluctuation protections built into the agreement; (d) The Book and Media Outsourcing Agreement contemplates that Printmanagement GMBH will provide exclusive procurement and production services for the Debtors' book products and music and video products. In addition, price adjustment triggers are set if the Debtors' volume increases or decreases significantly; and (e) The Debtors and Printmanagement GMBH, from the third anniversary of the effective date, have a mutual right to terminate for convenience upon providing 90 days notice, subject to a $3.5 million termination fee. The salient terms of the Merchandise and Premiums Outsourcing Agreement are: (a) The term of the Merchandise and Premiums Outsourcing Agreement will be four years with up to three one-year extensions if the parties agree on a year-by-year basis; (b) An affiliate of Bertelsmann, Direct Sourcing Germany GMBH, will provide procurement and production services for certain of the Debtors' merchandise and premiums. Local country procurement for Brazil, Russia and Asia Pacific are excluded from this agreement; (c) The Merchandise and Premiums Outsourcing Agreement includes these pricing schedule and terms: * Pricing Structure Asia. Cost plus an average 19% markup; and * Pricing Structure Local. Cost plus a commission of 50% savings of the product price, maximum 5%; (d) Payment Terms. Net 30 days FOB as soon as Reader's Digest's receivables are insurable. Until insurable, 50% of fees will be invoiced 30 days before ship date; (e) The Merchandise and Premiums Outsourcing Agreement contemplates that Direct Sourcing Germany GMBH will provide exclusive procurement and production services for certain of the Debtors' merchandise and premiums. In addition, price adjustment triggers are set if the Debtors' volume increases or decreases significantly; and (f) The Debtors and Direct Sourcing Germany GMBH have a mutual right to terminate for convenience upon providing 90 days notice. As part of a termination fee, Reader's Digest would need to cover the set up fee plus all severance costs for Direct Sourcing Germany GMBH's employees that are dedicated to the Reader's Digest account at a minimum of 50% of their time. As a result of entering into the Agreements, the Debtors expect to generate significant cost savings, which are part of their targeted initiatives for achieving results under their revised strategic business plan, Mr. Sprayregen says. Specifically, the Debtors estimate entry into the Agreements will result in annual average savings of approximately $5 million, net of transition costs, with the possibility for incremental savings through gainshare opportunities. Reduced expenses include eliminate of staff costs for approximately 50 employees, who will transfer to Bertelsmann under the Agreements, Mr. Sprayregen discloses. He asserts that entry into the Agreements will also provide the Debtors with a global strategic procurement and production platform that will improve the quality and efficiency of the Debtors' business operations. He adds that the Agreements will provide the Debtors with price protection by combining the Debtors' production volumes with Bertelsmann's production volumes. The Debtors also sought and obtained an expedited hearing on the request. Accordingly, the Court will commence a hearing on October 26, 2009, to consider the request. The deadline for filing objections is also extended through the hearing date. About The Reader's Digest Association RDA is a global multi-brand media and marketing company that educates, entertains and connects audiences around the world. The company builds multi-platform communities based on branded content. With offices in 44 countries, it markets books, magazines, and music, video and educational products reaching a customer base of 130 million in 78 countries. It publishes 94 magazines, including 50 editions of Reader's Digest, the world's largest-circulation magazine, operates 65 branded Web sites generating 22 million unique visitors per month, and sells 40 million books, music and video products across the world each year. Its global headquarters are in Pleasantville, N.Y. Reader's Digest said that as of June 30, 2009, it had total assets of $2.2 billion against total debts of $3.4 billion. Reader's Digest, together with its 47 affiliates, filed for Chapter 11 on August 24 (Bankr. S.D.N.Y. Case No. 09-23529). Kirkland & Ellis LLP has been engaged as general restructuring counsel. Mallet-Prevost, Colt & Mosle LLP has been tapped as conflicts counsel. Ernst & Young LLP is auditor. Miller Buckfire & Co, LLC, is financial advisor. AlixPartners, LLC, is restructuring consultant. Kurtzman Carson Consultants is notice and claims agent. The Official Committee of Unsecured Creditors is tapping BDO Seidman, LLP, as financial advisor, Trenwith Securities, LLP, as investment banker and Otterbourg, Steindler, Houston & Rosen, P.C., as counsel. Bankruptcy Creditors' Service, Inc., publishes Reader's Digest Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Reader's Digest and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000) READER'S DIGEST: Proposes to Reject 2 Executory Contracts --------------------------------------------------------- The Reader's Digest Association Inc. and its units are party to numerous contracts entered into in the ordinary course of their business operations before the Petition Date. In connection with their ongoing restructuring efforts, and in anticipation of the commencement of their Chapter 11 cases, the Debtors began reviewing and analyzing all of their contractual obligations to identify executory contracts and unexpired leases that are burdensome to their bankruptcy estates and may be rejected pursuant to Section 365 of the Bankruptcy Code. After carefully evaluating the terms of their executory contracts and reviewing other factors relevant to each parties' relationship with the Debtors, the Debtors determined that rejecting these two executory contracts is in the best interests of their estates: (1) the Recovery Services Agreement, dated April 2, 1996, as amended between SunGuard Availability Services LP and Debtor CompassLearning, Inc.; and (2) Master Subscription Agreement, dated May 29, 2007, between ChannelAdvisor Corp. and Debtor Direct Holdings Americas, Inc. The agreement includes Module Subscription Order: SearchAdvisor, dated May 29, 2007, and Module Subscription Order: ShoppingAdvisor, dated June 20, 2008. James H.M. Sprayregen P.C., Esq., at Kirkland & Ellis LLP, in New York, relates that under the SunGuard Services Agreement, SunGuard agreed to provide the Debtors with emergency, on-call backup computing systems available if an unplanned or unforeseen event rendered certain of the Debtors' computing systems unavailable, while the ChannelAdvisor Agreement is for a web-based application service called "SearchAdvisor." The Debtors no longer need the services under the Executory Contracts. They have determined that rejecting the SunGuard Services Agreement will result in savings of approximately $222,000 in administrative expenses over the remaining term of the agreement, while rejecting ChannelAdvisor Agreement will result in savings of $15,750. Accordingly, the Debtors seek the Court's authority, pursuant to Section 365(a) of the Bankruptcy Code, to reject the Executory Contracts. A hearing will be held on October 26, 2009, to consider the request. Objections are due October 21. About The Reader's Digest Association RDA is a global multi-brand media and marketing company that educates, entertains and connects audiences around the world. The company builds multi-platform communities based on branded content. With offices in 44 countries, it markets books, magazines, and music, video and educational products reaching a customer base of 130 million in 78 countries. It publishes 94 magazines, including 50 editions of Reader's Digest, the world's largest-circulation magazine, operates 65 branded Web sites generating 22 million unique visitors per month, and sells 40 million books, music and video products across the world each year. Its global headquarters are in Pleasantville, N.Y. Reader's Digest said that as of June 30, 2009, it had total assets of $2.2 billion against total debts of $3.4 billion. Reader's Digest, together with its 47 affiliates, filed for Chapter 11 on August 24 (Bankr. S.D.N.Y. Case No. 09-23529). Kirkland & Ellis LLP has been engaged as general restructuring counsel. Mallet-Prevost, Colt & Mosle LLP has been tapped as conflicts counsel. Ernst & Young LLP is auditor. Miller Buckfire & Co, LLC, is financial advisor. AlixPartners, LLC, is restructuring consultant. Kurtzman Carson Consultants is notice and claims agent. The Official Committee of Unsecured Creditors is tapping BDO Seidman, LLP, as financial advisor, Trenwith Securities, LLP, as investment banker and Otterbourg, Steindler, Houston & Rosen, P.C., as counsel. Bankruptcy Creditors' Service, Inc., publishes Reader's Digest Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Reader's Digest and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000) READER'S DIGEST: To Sell Assets Under $500,000 in Ordinary Course ----------------------------------------------------------------- The Reader's Digest Association Inc. and its units maintain an array of assets, including a significant amount of personal and intangible property and other property interests like intellectual property. Before the commencement of their Chapter 11 cases, the Debtors routinely and in the ordinary course of business sold or, where necessary, otherwise disposed of non-core assets that were unnecessary to, or could not be used profitably in, their operations, or from which they could realize an immediate return. The Debtors believe that the prudent course, after identifying that an asset is either obsolete, worn-out, or no longer material to the Debtors' business, or could generate the greatest return through a sale, generally is to market the asset for sale. By doing so, the Debtors recognize several benefits, including streamlining their operations by eliminating the cost of maintaining property not essential to their business, making room for the purchase of other assets, and improving liquidity by realizing sale proceeds. Accordingly, during the course of the Chapter 11 cases, the Debtors anticipate that they will continue to sell non-core assets where appropriate. In some cases, asset sales of this type would constitute transactions outside the Debtors' ordinary course of business that typically would require individual Court approval pursuant to Section 363(b)(1) of the Bankruptcy Code, relates James H.M. Sprayregen P.C., Esq., at Kirkland & Ellis LLP, in New York. To streamline the sale process and avoid unnecessarily burdening the Court and the parties-in-interest with numerous motions that will seek similar relief on similar grounds, the Debtors seek approval of a streamlined procedure to effectuate, from time to time, sales, or transfers of surplus, of certain enumerated categories of assets. Mr. Sprayregen notes that all other sale transactions outside the ordinary course of the Debtors' businesses, including non-core asset sales for consideration in excess of $500,000, would remain subject to Court approval on an individual basis pursuant to Section 363(b)(1), and in all cases subject to the Debtors' debtor-in-possession financing. By this motion, the Debtors ask the Court to approve proposed de minimis asset sale procedures to allow them to take advantage of sale opportunities, streamline their operations and efficiently divest themselves of certain non-core assets of relatively small value by using a modified process to allow expeditious and cost- effective review by interested parties in lieu of individual Court approval of certain sales. Absent expedited approval of those sales, the Debtors may lose the opportunity to close on particular deals, Mr. Sprayregen tells the Court. De Minimis Asset Sale Procedures The De Minimis Asset Sale Procedures would be applicable to and cover only non-core asset sales for which the total consideration is $500,000 or less, as measured by the amount of cash and other consideration to be received by the Debtors on account of the assets to be sold, including any assumption of liabilities or payment by the buyer of aggregate cure costs in connection with the assumption and assignment of any related executory contracts and unexpired leases. Under the De Minimis Asset Sale Procedures, the Debtors will be permitted to sell assets that are encumbered by liens, encumbrances or other interests only if the holders of those liens and interests consent to the sale, either expressly or by implied consent under the Debtors' DIP Financing credit agreement, after notice and an opportunity for hearing. Similarly, the Debtors would be permitted to sell assets co-owned by a Debtor and a third party only upon the express or implied consent of the co-owner. Additionally, in certain circumstances where maintaining the asset is more expensive than not doing so and it appears after reasonable investigation that it is not possible to sell the asset for more than the likely expenses of the sale, the Debtors believe that the prudent course would be to abandon or donate the asset. The Debtors propose that the proposed abandonment and donations also be covered by the De Minimis Asset Sale Procedures. After a Debtor enters into a contract or contracts contemplating a Covered Sale for which total consideration is equal to or less than $500,000, the Debtors will serve a notice of the Proposed Sale to the Debtors' notice parties, which include the Office of the U.S. Trustee and the DIP Lenders. Each Sale Notice includes information with respect to the Proposed Sale, like the description of the assets to be sold and the identity of the non- debtor party or parties to the Proposed Sale. The Debtors propose that Interested Parties have through 5:00 p.m. prevailing Eastern Time on the 10th calendar day after the date of service of the Sale Notice to object to the Proposed Sale. If no objections are properly asserted before the expiration of the Notice Period, the applicable Debtor or Debtors would be authorized, without further notice and Court approval to consummate the Proposed Sale. The Debtors also propose that, for each Covered Sale consummated pursuant to the proposed procedures, buyers will take title to the assets free and clear of liens, claims, encumbrances and other interests. All the Liens, will, at the Debtors' discretion and consistent with the terms of their DIP Financing, be satisfied out of the proceeds of the sale or attach to the proceeds of the sale to the same priority, validity and extent as the Liens attached to the assets prior to the sale. The Debtors will also be permitted to compensate any broker they engaged in connection with any Covered Sale. No broker will be required to file a retention application under Section 327 of the Bankruptcy Code. About The Reader's Digest Association RDA is a global multi-brand media and marketing company that educates, entertains and connects audiences around the world. The company builds multi-platform communities based on branded content. With offices in 44 countries, it markets books, magazines, and music, video and educational products reaching a customer base of 130 million in 78 countries. It publishes 94 magazines, including 50 editions of Reader's Digest, the world's largest-circulation magazine, operates 65 branded Web sites generating 22 million unique visitors per month, and sells 40 million books, music and video products across the world each year. Its global headquarters are in Pleasantville, N.Y. Reader's Digest said that as of June 30, 2009, it had total assets of $2.2 billion against total debts of $3.4 billion. Reader's Digest, together with its 47 affiliates, filed for Chapter 11 on August 24 (Bankr. S.D.N.Y. Case No. 09-23529). Kirkland & Ellis LLP has been engaged as general restructuring counsel. Mallet-Prevost, Colt & Mosle LLP has been tapped as conflicts counsel. Ernst & Young LLP is auditor. Miller Buckfire & Co, LLC, is financial advisor. AlixPartners, LLC, is restructuring consultant. Kurtzman Carson Consultants is notice and claims agent. The Official Committee of Unsecured Creditors is tapping BDO Seidman, LLP, as financial advisor, Trenwith Securities, LLP, as investment banker and Otterbourg, Steindler, Houston & Rosen, P.C., as counsel. Bankruptcy Creditors' Service, Inc., publishes Reader's Digest Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Reader's Digest and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000) REFCO INC: RCM Trustee Gets Nod to Abandon Chase Securities ----------------------------------------------------------- Refco Capital Markets, Ltd., a debtor-affiliate in these Chapter 11 cases, holds assets consisting principally of securities held in various custody accounts. Pursuant to the Court-approved Securities Sale Orders, Marc S. Kirschner, as RCM Plan Administrator, was authorized and directed to liquidate the RCM assets. Mr. Kirschner has determined that certain unsold securities are of inconsequential value and of no benefit to RCM or its creditors and should therefore be abandoned. Judge Robert D. Drain of the U.S. Bankruptcy Court for the Southern District of New York has authorized Mr. Kirschner to abandon its Unsold Securities held at a custody account with Chase London effective as of October 13, 2009. The Court specifically authorized Chase to transfer or dispose of all of these Unsold Securities in a manner consistent with Chase's policies: Security Name Type Number ------------- ---- ---------- North Borneo Corp MYR 1 Equity Equity 1,000 Prolexus Berhard MYR 1 Equity 2,500 Repco Holdings Berhard MYR 1 Equity 1,858,000 Middle Egypt Flour Mills Equity 100 Alpargatas SAIC Bond 221 Media Plus Public Co. Equity 800,000 Media Plus Public Co. Equity 500,000 Thai Press & Print Ltd Equity 7,000,000 As previously reported, pursuant to the Court-approved Securities Sale Orders, Marc S. Kirschner, as RCM Plan Administrator, was authorized and directed to liquidate the RCM assets. Mr. Kirschner has determined that the Unsold Securities are of inconsequential value and of no benefit to RCM or its creditors and should therefore be abandoned. The Court previously permitted the transfer of all Unsold Securities held in a separate custody account at Merrill Lynch. The Court held that neither RCM and the RCM estate nor Chase and its affiliates will have any liability for fees, costs or other amounts owing with respect to any Custody Accounts or the Unsold Securities, in each case accruing from and after, or accrued but unpaid, as of October 13, 2009. Pursuant to Sections 105 and 554(a) of the Bankruptcy Code, cash deposits, if any, held in any Custody Account at Chase will be returned to the RCM estate on or before November 2, 2009, Judge Drain ruled. About Refco Inc. Headquartered in New York, Refco Inc. -- http://www.refco.com/-- is a diversified financial services organization with operations in 14 countries and an extensive global institutional and retail client base. Refco's worldwide subsidiaries are members of principal U.S. and international exchanges, and are among the most active members of futures exchanges in Chicago, New York, London and Singapore. In addition to its futures brokerage activities, Refco is a major broker of cash market products, including foreign exchange, foreign exchange options, government securities, domestic and international equities, emerging market debt, and OTC financial and commodity products. Refco is one of the largest global clearing firms for derivatives. The Company has operations in Bermuda. The Company and 23 of its affiliates filed for Chapter 11 protection on October 17, 2005 (Bankr. S.D.N.Y. Case No. 05- 60006). J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represented the Debtors in their restructuring efforts. Milbank, Tweed, Hadley & McCloy LLP, represented the Official Committee of Unsecured Creditors. Refco reported US$16.5 billion in assets and US$16.8 billion in debts to the Bankruptcy Court on the first day of its Chapter 11 cases. The Court confirmed the Modified Joint Chapter 11 Plan of Refco Inc. and certain of its Direct and Indirect Subsidiaries, including Refco Capital Markets, Ltd., and Refco F/X Associates, LLC, on December 15, 2006. That Plan became effective on Dec. 26, 2006. Pursuant to the plan, RJM, LLC, was named plan administrator to reorganized Refco, Inc. and its affiliates, and Marc S. Kirschner as plan administrator to Refco Capital Markets, Ltd. Bankruptcy Creditors' Service, Inc., publishes Refco Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by Refco Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) REFCO INC: Refco Inc Post-Confirmation 3rd Quarter Report --------------------------------------------------------- Refco, Inc., and its affiliates, including Refco Capital Markets, Ltd., delivered to the U.S. Bankruptcy Court for the Southern District of New York a copy of their post-confirmation quarterly report for the period from July 1 to September 30, 2009. According to Valerie E. DePiro, chief financial officer of Refco Inc. and Refco Capital Markets, Ltd., a cash balance of $76,737,000 at the beginning of June 2009 increased to $77,514,000 at the end of the reporting period. The Reorganized Debtors received $380,000 in total cash and disbursed $8,698,000 for the third quarter of 2009. Unaudited Schedule of Cash Receipts and Disbursements (in thousands) Beginning Disbuse- Ending Debtor Balance Receipts Company ments Balance ----- ------- -------- ------- ----- ------- Refco Capital Markets $24,303 $127 - ($7,227) $17,203 Refco Capital LLC 45,577 251 - (677) 45,151 Refco F/X Assoc. 6,718 2 - (12) 6,708 Refco Group Ltd. - - - - - Refco Regulated - - - - - Refco Inc. 916 - - (782) 134 Westminster-Refco - - - - - ------- -------- ------- - ------- ------- Totals $77,514 $380 $0 ($8,698) $69,196 The Reorganized Debtors served as paying agent for certain non- Debtors and Refco LLC. The $127 million in receipts for RCM includes proceeds miscellaneous asset recoveries and interest income. The $251,000 in receipts for Refco Capital LLC consists of recoveries of miscellaneous assets, including tax refunds, and interest income. The $2,000 in receipts for Refco F/X Associates, LLC represents interest income, according to Ms. DePiro. Ms. DePiro disclosed that during the third quarter, the Contributing Debtors did not make an interim distribution of the RCM Cash Distribution. The September 30, 2009 cash balance also included the 502(h) Special Reserve of $3.0 million and the Disputed Claim Reserve of approximately $6.9 million. Schedule of Cash Distributions to Creditors (In Thousands) Quarter Ended Emergence Sept. 30, 2009 to Date -------------- --------- Administrative and Operating Expenses $791 $95,081 TREATMENT OF CONTRIBUTING DEBTORS' CREDITORS AND INTEREST HOLDERS Priority Tax Claims - 1,613 Class 1 - Non Tax Priority Claims - - Class 2 - Other Secured Claims - - Class 3 - Secured Lender Claims - 703,967 Class 4 - Senior Subordinated Note Claims - 335,985 Class 5(a) - Contributing Debtors General Unsecured Claims 722 142,377 Class 5(b) - Related Claims - - Class 6 - RCM Intercompany Claims - - Class 7 - Subordinated Claims - - Class 8 - Old Equity Interests - - TREATMENT OF FXA CREDITORS Priority Tax Claims - 90 Class 1 - FXA Non-Tax Priority Claims - - Class 2 - FXA Other Secured Claims - - Class 3 - FXA Secured Lender Claims - - Class 4 - FXA Sr. Subordinated Note Claims - - Class 5(a) - FXA General Unsecured Claims - 19,453 Class 5(b) - Related Claims - - Class 6 - FXA Convenience Claims - 4,827 Class 7 - FXA Subordinated Claims - - TREATMENT OF RCM CREDITORS Priority Tax Claims - - Class 1 - RCM Non-Tax Priority Claims - - Class 2 - RCM Other Secured Claims - - Class 3 - RCM FX/Unsecured Claims 5,310 427,186 Class 4 - RCM Securities Customer Claims 1,571 2,630,133 Class 5 - RCM Leuthold Metals Claims - 19,364 Class 6 - Related Claims - - Class 7 - RCM Subordinated Claims - - From July 1 to September 30, 2009, the Reorganized Debtors made no payments relating to federal and local taxes. Tax claims and notices were received by the Reorganized Debtors from the IRS and State taxing authorities in the aggregate amount of approximately $20 million. All of the original 47 claims filed have been expunged or resolved. Allowed claims total approximately $1.6 million, according to Ms. DePiro. All insurance policies are fully paid for the current period, including amounts owed for workers' compensation and disability insurance, Ms. DePiro added. A full-text copy of the Reorganized Debtors' Post-Confirmation Quarterly Report for the Third Quarter 2009 is available at no charge at http://bankrupt.com/misc/Refco3rdQ2009PostCon.pdf About Refco Inc. Headquartered in New York, Refco Inc. -- http://www.refco.com/-- is a diversified financial services organization with operations in 14 countries and an extensive global institutional and retail client base. Refco's worldwide subsidiaries are members of principal U.S. and international exchanges, and are among the most active members of futures exchanges in Chicago, New York, London and Singapore. In addition to its futures brokerage activities, Refco is a major broker of cash market products, including foreign exchange, foreign exchange options, government securities, domestic and international equities, emerging market debt, and OTC financial and commodity products. Refco is one of the largest global clearing firms for derivatives. The Company has operations in Bermuda. The Company and 23 of its affiliates filed for Chapter 11 protection on October 17, 2005 (Bankr. S.D.N.Y. Case No. 05- 60006). J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represented the Debtors in their restructuring efforts. Milbank, Tweed, Hadley & McCloy LLP, represented the Official Committee of Unsecured Creditors. Refco reported US$16.5 billion in assets and US$16.8 billion in debts to the Bankruptcy Court on the first day of its Chapter 11 cases. The Court confirmed the Modified Joint Chapter 11 Plan of Refco Inc. and certain of its Direct and Indirect Subsidiaries, including Refco Capital Markets, Ltd., and Refco F/X Associates, LLC, on December 15, 2006. That Plan became effective on Dec. 26, 2006. Pursuant to the plan, RJM, LLC, was named plan administrator to reorganized Refco, Inc. and its affiliates, and Marc S. Kirschner as plan administrator to Refco Capital Markets, Ltd. Bankruptcy Creditors' Service, Inc., publishes Refco Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by Refco Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) REFCO INC: Refco LLC 7 Trustee Says Fee Application Premature ------------------------------------------------------------- Pursuant to Section 704(a)(1) and 105(a) of the Bankruptcy Code and Rules 1001 and 3009 of the Federal Rules of Bankruptcy Procedure, the plan administrators of Reorganized Refco Inc. and certain of its direct and indirect subsidiaries and Reorganized Refco Capital Markets, Ltd., ask the Court to compel Albert Togut, in his capacity as the Chapter 7 trustee of Refco LLC, to file a fee application. On behalf of the Plan Administrators, Sabin Willett, Esq., at Bingham McCutchen LLP, in New York, relates that Refco, LLC's four-year-old Chapter 11 case was "straightforward," with the estate being composed mainly of cash proceeds of a sale agreed when the Chapter 7 Trustee was appointed. The Chapter 7 Trustee's main task to distribute the funds to the applicable creditors. The Chapter 7 Trustee has not provided the Plan Administrators with an updated reserve analysis, Ms. Willett tells the Court. Based on current run-rates, the Plan Administrators would expect that Reserve to be significantly lower. Hence, Ms. Willett maintains, the Chapter 7 Trustee's holding of more than $49 million in cash, of which $20 million has been reserved for the Trustee's fee is "excessive." Chapter 7 Trustee Responds Refuting the request of the plan administrators of Reorganized Refco Inc., and certain of its direct and indirect subsidiaries and Reorganized Refco Capital Markets, Ltd., Albert Togut, in his capacity as the Chapter 7 trustee of Refco LLC, maintains that compelling him to submit a fee application "is premature at best, and it is an attempt to exert influence over [his] administration of the [Refco LLC] estate." It is appropriate for a Chapter 7 trustee to seek compensation at the conclusion of a case when the totality of his administration is known, because while interim applications are permitted, they are not required, Scott E. Ratner, Esq., at Togut, Segal & Segal LLP, in New York, maintains, on behalf of the Chapter 7 Trustee, citing In re Child World, Inc., 185 B.R. 14, 17-18 (Bankr. S.D.N.Y. 1995). Moreover, Section 704(a)(9) of the Bankruptcy Code does not require the Chapter 7 Trustee to seek a commission before he files his final report and account on the Chapter 7 case, Mr. Ratner emphasizes. He maintains that no compulsion is needed, because the Chapter 7 Trustee will file his application for compensation in the ordinary course of winding up the case. Mr. Ratner elaborates that the Chapter 7 Trustee has a first priority administration claim that is statutorily senior to the remaining subordinated junior claim held by the Plan Administrators, but it is the Plan Administrators who complain that they have not been paid enough. The Chapter 7 Trustee reminds the Court that after his first distribution of $475 million in June 2007, he made three additional distributions to the Plan Administrators: (a) $78,435,000 on the senior subordinated intercompany claim was distributed on August 9, 2007. (b) Another $73,422,000 on the senior and junior subordinated intercompany claims was distributed on December 26, 2007. (c) $29 million on the junior subordinated claim was distributed on April 3, 2009. "The Chapter 7 Trustee's distributions on the two subordinated intercompany claims alone have totaled $655,857,000," Mr. Ratner tells the Court. "Thus, the Administrators have had 100% of their senior subordinated claim paid, another $91 million paid on the more junior intercompany claims, in addition to more than $120 million paid on account of the customer credit line loan claim." Mr. Ratner points out that despite the Chapter 7 Trustee's best efforts to engage the Administrators in negotiations to fix the amount of his commissions, the Administrators refused to negotiate. Moreover, he notes, the Administrators have not given any indication that they would prefer to make an agreement with the Trustee. Mr. Ratner argues that the Administrators statement that the Chapter 7 Trustee's main task was only "to distribute the funds," presents a one-sided account of the Chapter 7 case that belittles and ignores the Trustee's efforts on Refco LLC's behalf. "Is the complexity of the case or the extent of the Trustee's services relevant to a motion that seeks to compel submission of the Trustee's application for a commission? Surely not," Mr. Ratner says. He contends that the Administrators' Motion for a fee request from the Chapter 7 Trustee seemed to be filed with a different goal altogether. It appears to have been filed to gain a tactical advantage, he says. In a separate filing, Richard K. Millin, Esq., at Togut Segal, declared to the Court that he reviewed the information relating to the Chapter 7 Trustee's response. Against this backdrop, Mr. Togut asks Judge Drain to deny the Administrators' request. About Refco Inc. Headquartered in New York, Refco Inc. -- http://www.refco.com/-- is a diversified financial services organization with operations in 14 countries and an extensive global institutional and retail client base. Refco's worldwide subsidiaries are members of principal U.S. and international exchanges, and are among the most active members of futures exchanges in Chicago, New York, London and Singapore. In addition to its futures brokerage activities, Refco is a major broker of cash market products, including foreign exchange, foreign exchange options, government securities, domestic and international equities, emerging market debt, and OTC financial and commodity products. Refco is one of the largest global clearing firms for derivatives. The Company has operations in Bermuda. The Company and 23 of its affiliates filed for Chapter 11 protection on October 17, 2005 (Bankr. S.D.N.Y. Case No. 05- 60006). J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represented the Debtors in their restructuring efforts. Milbank, Tweed, Hadley & McCloy LLP, represented the Official Committee of Unsecured Creditors. Refco reported US$16.5 billion in assets and US$16.8 billion in debts to the Bankruptcy Court on the first day of its Chapter 11 cases. The Court confirmed the Modified Joint Chapter 11 Plan of Refco Inc. and certain of its Direct and Indirect Subsidiaries, including Refco Capital Markets, Ltd., and Refco F/X Associates, LLC, on December 15, 2006. That Plan became effective on Dec. 26, 2006. Pursuant to the plan, RJM, LLC, was named plan administrator to reorganized Refco, Inc. and its affiliates, and Marc S. Kirschner as plan administrator to Refco Capital Markets, Ltd. Bankruptcy Creditors' Service, Inc., publishes Refco Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by Refco Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) REGAL ENTERTAINMENT: Fitch Affirms Issuer Default Rating at 'B+' ---------------------------------------------------------------- Fitch Ratings has affirmed this rating on Regal Entertainment Group and Regal Cinemas Corporation: RGC -- Issuer Default Rating 'B+'; -- Senior unsecured convertible notes 'CCC/RR6'. Regal Cinemas -- IDR 'B+'; -- Senior secured facility 'BB+/RR1'; -- Senior unsecured notes 'B+/RR4'; -- Senior subordinated notes 'B-/RR6'; The Rating Outlook is Stable. The ratings continue to reflect RGC's size and position as the largest domestic movie exhibitor, with 6,778 screens in 549 theaters. RGC's portfolio has higher-than average screens per location (approximately 12) and Fitch expects the company to continue to improve its relatively modern theater circuit in a disciplined manner. Also, acquisition risk within the exhibitor industry has slightly diminished given National Amusements, Inc. recent announcement to preserve their core U.S. assets. The ratings also reflect solid geographic diversity and sound operating performance. The rating and Stable Outlook are supported by Fitch's expectation that the 2010 film slate will continue to support growth in box office revenues in the low single digits, with the premium ticket charge on 3D and IMAX films fueling most of the growth. Fitch has expected movie theaters to continue to demonstrate their hit-driven characteristics (i.e. dependence on a strong supply of films from the studios), and as such the solid film slate to date has driven industry attendance up approximately 4%. While Fitch believes attendance and box office revenue is relatively uncorrelated with the macro-economy, operating performance is susceptible to meaningful volatility and weakness. Fitch remains concerned with exhibitors' limited control over their core revenue stream, relatively inflexible cost structures and high debt levels. Intermediate-term risks include increased competition from at-home entertainment media, collapsing film distribution windows, increasing indirect competition from other distribution channels, high operating leverage (which could make theatre operations free cash flow negative during periods of reduced attendance) and RGC's history of aggressive common and special dividend payouts (Fitch notes the company did cut its common dividend by 40% earlier in 2009). Fitch notes that concession revenues have remained stable despite the weak economic conditions. While Fitch does not anticipate a significant decline in concession per patron, Fitch remains cautious that high margin concessions (85% gross margin; 27% of RGC's total revenues), may be vulnerable to reduced per-guest concession spending due to cyclical factors or a re-acceleration of commodity prices. With the strong 2009 film slate and the reduction in dividend and capital expenditure, Fitch expects FCF to be in the range of $125 million to $150 million for the year, compared to negative FCF of $45 million in 2008. RGC has no pension obligations. As of June 30, 2009, liquidity is made up of $268 million in cash and $92.3 million in credit facility availability (reduced by $2.7 million in letters of credit), under its $95 million credit facility, which matures in October 2011. The company has no significant maturities until the $200 million of convertible notes at RGC comes due in 2011. Later maturities include $69 million in senior subordinated notes at Regal Cinemas due in 2012, and term loan debt of $1.2 billion due in 2013 (remaining amounts of the term loan facility after quarterly amortization). Fitch does not expect FCF to be sufficient to cover the remaining balance of the term loan in 2013 and believes the company will look to external sources to refinance the maturity. This refinancing risk is incorporated into the rating. Total debt as of June 30, 2009, was approximately $2 billion and lease adjusted leverage, based on Fitch's calculations (lease- equivalent debt was calculated using the net present value of RGC's remaining operating lease commitments), was 4.8 times (x) (unadjusted leverage was 3.6x). Fitch expects that continued revenue growth will lead to higher EBITDA and lower leverage. Fitch expects leverage to remain above 3x and does not expect significant debt reduction in the near term. RGC's Recovery Ratings reflect Fitch's expectation that the enterprise value of the company, and hence, recovery rates for its creditors, will be maximized in a restructuring scenario (going- concern), rather than a liquidation. Fitch estimates an adjusted, distressed enterprise valuation of $1.7 billion using a 5x multiple and including an estimate for RGC's 25% stake in National CineMedia, Inc of approximately $150 million. The 'RR1' Recovery Rating for the company's credit facilities reflects Fitch's belief that 91%-100% expected recovery is reasonable. While Fitch does not assign Recovery Ratings for the company's operating lease obligations, it is assumed that the company rejects only 30% of its remaining $3.9 billion in operating lease commitments due to their significance to the operations in a going-concern scenario and is liable for 15% of those rejected values (at a net present value). The 'RR4' Recovery Ratings for Regal Cinemas' senior unsecured notes (equal in ranking to the rejected operating leases) reflect an expectation of 31%-50% recovery. The 'B-/RR6' rating for Regal Cinemas' senior subordinated notes reflects the bonds structural seniority over RGC's convertible notes ('CCC/RR6') and Fitch's expectation for zero recovery. REPUBLIC STORAGE: Court Confirms Plan of Liquidation ---------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Ohio has confirmed the plan of liquidation filed by The Belden Locker Company, f/k/a Republic Storage Systems Company, Inc. dated June 19, 2009. The Court also approved the appointment of Thomas G. Moore of Thomas G. Moore, LPA, Ltd., in his individual capacity, as Plan Administrator. Summary of Plan Terms The Plan contemplates the liquidation and distribution of all remaining assets of the Debtor's estate. The Plan incorporates settlements with Pension Benefit Guarantee Corporation and Ohio Bureau of Workers Compensation, which allow a distribution to unsecured creditors of roughly 3.5%. Equity interests in Class 6 will not receive a distribution under the Plan and are thus deemed to have rejected the Plan. The claim of Pension Benefit Guaranty Corporation in Class 3, the claim of the Ohio Bureau of Workers' Compensation in Class 4, and general unsecured claims under Class 5 are impaired, and entitled to vote on the Plan. Secured claims in Class 1 and priority unsecured tax claims in Class 2 are unimpaired under the Plan, and are deemed to have accepted the Plan. The Debtor's assets consist solely of the remaining cash realized in the amount of $1,078,228 by the Debtor from the sale of its assets to Buckeye RSS, LLC, which closed shortly after the order of the Court on April 28, 2008, as amended on May 11, 2006. It is the Debtor's belief that all secured claims have been satisfied or assigned and assumed by Buckeye RSS, LLC. A full-text copy of the disclosure statement for the plan of liquidation of The Belden Locker Company, formerly Republic Storage Systems Company, Inc., is available for free at: http://bankrupt.com/misc/belden.ds.pdf Based in Canton, Ohio, Republic Storage Systems Company Inc. nka The Belden Locker Company -- http://www.republicstorage.com/-- manufactured several lines of shelving and storage products including lockers, industrial storage products, custom designed mezzanine systems and engineered storage systems. The Company filed for Chapter 11 protection on March 14, 2006 (Bankr. N.D. Ohio Case No. 06-60316). James Michael Lawniczak, Esq., Karen A. Visocan, Esq., Lisa M. Yerrace, Esq., Nathan A. Wheatley, Esq., and Laura McBride, Esq, at Calfee, Halter & Griswold LLP, represent the Debtor in its restructuring efforts. Dov Frankel, Esq., Harry W. Greenfield, Esq., at Buckley King, LPA; and Wanda Borges, Esq., at Borges Donovan Attorneys at Law, LLC, represent the official committee of unsecured creditors. When the Debtor filed for protection from its creditors, it listed between $10 million and $50 million in assets and debts. S&K FAMOUS: Unsecured Creditors to Recover 6% Under Plan -------------------------------------------------------- S&K Famous Brands Inc. and the Official Committee of Unsecured Creditors delivered a disclosure statement explaining their Chapter 11 plan of liquidation for the Debtor in the U.S. Bankruptcy Court for the Eastern District of Virginia. Under the plan, holders of secured, perfected consignment and other priority claims are expected to recover 100% of their claims. Holders of general unsecured claims, totaling $34.9 million, and holders of convenience claims will recover 6% and 10%, respectively. The Debtors and the Committee seek to obtain confirmation of their proposed plan on Dec. 1, 2009. A hearing is set for Oct. 27, 2009, at 2:00 p.m., at U.S. Courthouse at 701 East Broad St., Room 5000 in Richmond, Virginia. A full-text copy of the disclosure statement is available for free at http://ResearchArchives.com/t/s?4717 A full-text copy of the plan of liquidation is available for free at http://ResearchArchives.com/t/s?4718 Headquartered in Glen Allen, Virginia, S & K Famous Brands, Inc. - - http://www.skmenswear.com/-- had 214 retail stores selling men's swimwear. The Company shut 78 stores before it filed for bankruptcy, and later shut 30 more stores. The Debtor filed for Chapter 11 protection on February 9, 2009 (Bank. E.D. Va. Case No. 09-30805). Lynn L. Tavenner, Esq., Paula S. Beran, Esq., at Tavenner & Beran, PLC and McGuireWoods LLP represent the Debtor in its restructuring efforts. Its financial advisor is Alvarez & Marsal North America LLC. The Debtor's DIP Lender is Wells Fargo Retail Finance LLC as administrative and collateral agent. The Debtor listed total assets of $41,440,100 and total debts of $35,499,00. SCO GROUP: Announces Strategic Plan and Management Change --------------------------------------------------------- The SCO Group, Inc. announced a restructuring plan following an analysis of the company's operations and cost structure undertaken by Chapter 11 Trustee, Edward Cahn and his advisors. The company expects to finalize details of the restructuring and to reach cash flow breakeven for core operations within the next month. The savings are a combination of non-workforce related changes and a modest reduction in SCO's workforce. As part of the restructuring, the company has eliminated the Chief Executive Officer and President positions and consequently terminated Darl McBride. The current management team comprised of Chief Operating Officer, Jeff Hunsaker, Chief Financial Officer, Ken Nielsen and General Counsel, Ryan Tibbitts, will continue to work closely with the Chapter 11 Trustee and his advisors to implement the restructuring plan, move the intellectual property litigation forward with Boies, Schiller & Flexner, LLP and emerge from Chapter 11 bankruptcy. The company is also looking to raise additional funding and sell non-core assets to bolster working capital. These actions will allow the Trustee to preserve cash and the value of the business while enabling the Company to proceed with asset sales, pursue litigation against, among others, IBM and Novell, and to continue supporting SCO's loyal UNIX customer base. "These actions, while difficult, are essential to SCO becoming a more agile and efficient company, not just for this year, but for years to come," said Mr. Hunsaker. "This restructuring plan reinforces SCO's ability to continue to sell and support its products while servicing the needs of our customers and partners on a worldwide basis through the stabilization of our financial situation." About SCO Group The SCO Group (SCOXQ.PK) -- http://www.sco.com/-- is a leading provider of UNIX software technology. Headquartered in Lindon, Utah, SCO has a worldwide network of resellers and developers. SCO Global Services provides reliable localized support and services to partners and customers. The Company and its affiliate, SCO Operations Inc., filed for Chapter 11 protection on September 14, 2007 (Bankr. D. Del. Lead Case No. 07-11337). Paul Steven Singerman, Esq., and Arthur Spector, Esq., at Berger Singerman P.A., represent the Debtors in their restructuring efforts. James O'Neill, Esq., and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP, are the Debtors' Delaware and conflicts counsel. Epiq Bankruptcy Solutions LLC, acts as the Debtors' claims and noticing agent. The United States Trustee failed to form an Official Committee of Unsecured Creditors in the Debtors' cases due to insufficient response from creditors. As of January 31, 2009, the Company had $8.78 million in total assets and $13.2 million in total liabilities, resulting in $4.51 million in stockholders' deficit. SEITEL INC: Appoints Marcia H. Kendrick as CFO and Executive VP --------------------------------------------------------------- Seitel Inc. appointed Marcia H. Kendrick, CPA, as executive vice president, chief financial officer and secretary of Seitel, Inc., effective as of Oct. 16, 2009. She will continue to serve as treasurer of the Company. Ms. Kendrick has served as the Company's chief accounting officer and assistant secretary since August 1993. Seitel Inc. provides seismic data to the oil and gas industry in North America. Seitel's data products and services are critical for the exploration for, and development and management of, oil and gas reserves by oil and gas companies. Seitel has ownership in an extensive library of proprietary onshore and offshore seismic data that it has accumulated since 1982 and that it licenses to a wide range of oil and gas companies. Seitel believes that its library of onshore seismic data is one of the largest available for licensing in the United States and Canada. Seitel's seismic data library includes both onshore and offshore 3D and 2D data. Seitel has ownership in over 41,000 square miles of 3D and roughly 1.1 million linear miles of 2D seismic data concentrated in the major active North American oil and gas producing regions. Seitel serves a market which includes over 1,600 companies in the oil and gas industry. * * * In July 2009, Moody's Investors Service downgraded Seitel's Corporate Family Rating to Caa3 from B3, its Probability of Default Rating to Caa3 from B3, its senior unsecured notes rating to Caa3 (LGD 4, 54%) from B3 (LGD 4, 56%), and its Speculative Liquidity Rating to SGL-4 from SGL-3. The rating outlook is negative. The downgrade reflects the increased pressure on Seitel's liquidity and earnings. SEMGROUP LP: Chaparral Energy Wants Prompt Decision on Contract --------------------------------------------------------------- Chaparral Energy, L.L.C., asks the Court to direct Debtor SemCap, L.L.C., to immediately decide whether to assume or reject the joint operating agreement, dated October 12, 2000, under which Chaparral, SemCap and several other parties are joint owners of certain oil and gas leaseholds, lands and wells located in Texas and Oklahoma. Chaparral insists that SemCap needs to immediately decide whether to assume or reject the JOA because since the Petition Date, SemCap has failed to make payments due under the JOA. Chaparral and the other working interest owners are prejudiced by the failure of SemCap to timely make its elections and pay its share of costs of the operations of the Properties because, with it being in bankruptcy, SemCap essentially gets a free look to see how operations will turn out before it has to make a decision and put forth its funds for the operations, Margaret M. Manning, Esq., at Whiteford Taylor Preston, in Wilmington, Delaware, argues for Chaparral. About SemGroup L.P. SemGroup, L.P. -- http://www.semgrouplp.com/-- is a midstream service company that provides diversified services for end users and consumers of crude oil, natural gas, natural gas liquids and refined products. Services include purchasing, selling, processing, transporting, terminalling and storing energy. SemGroup serves customers in the United States, Canada, Mexico and Wales. SemGroup L.P. and its debtor-affiliates filed for Chapter 11 protection on July 22, 2008 (Bankr. D. Del. Lead Case No. 08-11525). John H. Knight, Esq., L. Katherine Good, Esq. and Mark D. Collins, Esq., at Richards Layton & Finger; Harvey R. Miller, Esq., Michael P. Kessler, Esq., and Sherri L. Toub, Esq., at Weil, Gotshal & Manges LLP; and Martin A. Sosland, Esq., and Sylvia A. Mayer, Esq., at Weil Gotshal & Manges LLP, represent the Debtors in their restructuring efforts. Kurtzman Carson Consultants L.L.C. is the Debtors' claims agent. The Debtors' financial advisors are The Blackstone Group L.P. and A.P. Services LLC. Margot B. Schonholtz, Esq., and Scott D. Talmadge, Esq., at Kaye Scholer LLP; and Laurie Selber Silverstein, Esq., at Potter Anderson & Corroon LLP, represent the Debtors' prepetition lenders. SemGroup L.P.'s affiliates, SemCAMS ULC and SemCanada Crude Company, sought protection under the Companies' Creditors Arrangement Act (Canada) on July 22, 2008. Ernst & Young, Inc., is the appointed monitor of SemCanada Crude Company and its affiliates' reorganization proceedings before the Canadian Companies' Creditors Arrangement Act. The CCAA stay expires on November 21, 2008. SemGroup L.P.'s consolidated, unaudited financial conditions as of June 30, 2007, showed $5,429,038,000 in total assets and $5,033,214,000 in total debts. In their petition, they showed more than $1,000,000,000 in estimated total assets and more than $1,000,000,000 in total debts. Bankruptcy Creditors' Service, Inc., publishes SemGroup Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by SemGroup L.P. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-700) SEMGROUP LP: Koch Entities Want Prompt Decision on Contract ----------------------------------------------------------- Koch Materials, LLC, KMC Enterprises, LLC, and Koch Materials Mexico, B.V., asks the Court to compel the Debtors to make a decision whether to assume or reject a purchase and sale agreement they entered into in 2005. Under the PSA, the Koch Entities sold their asphalt business to the Debtors. The Debtors, in response, argue that the PSA was not an executory contract, thus the motion to compel should be denied. The Debtors further assert that any obligations outstanding under the PSA are immaterial. Moreover, the Debtors tell the Court that they are no longer operating the asphalt business and thus any indemnification obligations under the PSA for future acts would relate to properties that the Debtors did not utilize in any way. For the reasons stated, the Debtors ask the Court to deny the Koch Entities' request. About SemGroup L.P. SemGroup, L.P. -- http://www.semgrouplp.com/-- is a midstream service company that provides diversified services for end users and consumers of crude oil, natural gas, natural gas liquids and refined products. Services include purchasing, selling, processing, transporting, terminalling and storing energy. SemGroup serves customers in the United States, Canada, Mexico and Wales. SemGroup L.P. and its debtor-affiliates filed for Chapter 11 protection on July 22, 2008 (Bankr. D. Del. Lead Case No. 08-11525). John H. Knight, Esq., L. Katherine Good, Esq. and Mark D. Collins, Esq., at Richards Layton & Finger; Harvey R. Miller, Esq., Michael P. Kessler, Esq., and Sherri L. Toub, Esq., at Weil, Gotshal & Manges LLP; and Martin A. Sosland, Esq., and Sylvia A. Mayer, Esq., at Weil Gotshal & Manges LLP, represent the Debtors in their restructuring efforts. Kurtzman Carson Consultants L.L.C. is the Debtors' claims agent. The Debtors' financial advisors are The Blackstone Group L.P. and A.P. Services LLC. Margot B. Schonholtz, Esq., and Scott D. Talmadge, Esq., at Kaye Scholer LLP; and Laurie Selber Silverstein, Esq., at Potter Anderson & Corroon LLP, represent the Debtors' prepetition lenders. SemGroup L.P.'s affiliates, SemCAMS ULC and SemCanada Crude Company, sought protection under the Companies' Creditors Arrangement Act (Canada) on July 22, 2008. Ernst & Young, Inc., is the appointed monitor of SemCanada Crude Company and its affiliates' reorganization proceedings before the Canadian Companies' Creditors Arrangement Act. The CCAA stay expires on November 21, 2008. SemGroup L.P.'s consolidated, unaudited financial conditions as of June 30, 2007, showed $5,429,038,000 in total assets and $5,033,214,000 in total debts. In their petition, they showed more than $1,000,000,000 in estimated total assets and more than $1,000,000,000 in total debts. Bankruptcy Creditors' Service, Inc., publishes SemGroup Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by SemGroup L.P. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-700) SEMGROUP LP: Producers Committee Taps McKool Smith as Co-Counsel ---------------------------------------------------------------- Pursuant to Sections 328 and 1103(a) of the Bankruptcy Code and Rules 2014 and 5002 of the Federal Rules of Bankruptcy Procedure, the Official Producers' Committee in SemGroup LP.'s cases seeks the Court's authority to retain McKool Smith, P.C., as its co- counsel, nunc pro tunc to October 1, 2009. Hugh Ray and Peter Goodman recently left Andrews Kurth LLP and joined the law firm McKool Smith. The OPC wishes to have the continuation of its primary counsel, Messrs. Ray and Goodman, at a critical juncture in the Debtors' Chapter 11 cases, Michael G. Daniel of Samson Resources Company, the OPC chair, relates. The Debtors' Chapter 11 cases are poised for confirmation pursuant to the terms of an agreed-upon settlement by and amount the Debtors, the OPC, certain producer creditors of the estate, and the Debtors' prepetition secured lenders, which settlement has been embodied in the Debtors' Fourth Amended Plan of Reorganization dated September 25, 2009, according to Mr. Daniel. Messrs. Ray and Goodman negotiated the settlement on behalf of the OPC and are critical to its implementation, Mr. Daniel tells the Court. In light of the extensive legal services that may be necessary in these bankruptcy cases, the OPC believes that the employment of McKool Smith is appropriate and in the best interests of the creditor body that OPC represents, he adds. While Andrews Kurth and its attorneys, who have been involved in these Chapter 11 cases, will continue to assist the OPC, Messrs. Ray and Goodman will continue to play the same role they have during the course of the Debtors' bankruptcy cases, according to Mr. Daniel. McKool Smith attorneys may assist the OPC on discrete matters, but they will not duplicate the work done by Andrews Kurth, he assures the Court. McKool Smith will be paid on an hourly basis, plus reimbursement of actual, necessary expenses and other charges incurred by the firm. The firm's current hourly rates are: Principal $450 - $900 Hugh Ray, principal $700 Peter Goodman, principal $700 Paul Moak, principal $605 Attorneys, Counsel $225 - $575 Legal assistants $85 - $180 Hugh M. Ray, Esq., a member of McKool Smith, in Houston, Texas, discloses in his declaration that the firm formerly represented Mia Oven, individually, with respect to the Bankruptcy Examiner's investigation. Ms. Oven was an employee of SemGroup and traded mostly for SemMaterials. The representation of Ms. Oven ended several months ago. Mr. Ray adds that the firm currently represents or formerly represented affiliates of potential parties-in-interest in matters unrelated to the Debtors or their bankruptcy cases, including: * Adverse to Wachovia Bank in matter on behalf of Toll Brothers Inc.; * Adverse to JPMorgan Chase Bank on behalf of Affiliated Computer Systems; * Adverse to Bank of America on behalf of Realtime Data, LLC; and * Adverse to Goldman Sachs on behalf of Realtime Data, LLC. Except for the former representation of Ms. Oven, McKool Smith does not and will not represent any entity or any of their affiliates or subsidiaries in matters related to the Debtors or their Chapter 11 cases, Mr. Ray assures the Court. McKool Smith does not represent any other entity having an adverse interest in the Debtors' Chapter 11 cases, and does not hold or represent any interest adverse to the estate. McKool Smith is a disinterested person as the term is defined in Section 11(14) of the Bankruptcy Code, Mr. Ray asserts. About SemGroup L.P. SemGroup, L.P. -- http://www.semgrouplp.com/-- is a midstream service company that provides diversified services for end users and consumers of crude oil, natural gas, natural gas liquids and refined products. Services include purchasing, selling, processing, transporting, terminalling and storing energy. SemGroup serves customers in the United States, Canada, Mexico and Wales. SemGroup L.P. and its debtor-affiliates filed for Chapter 11 protection on July 22, 2008 (Bankr. D. Del. Lead Case No. 08-11525). John H. Knight, Esq., L. Katherine Good, Esq. and Mark D. Collins, Esq., at Richards Layton & Finger; Harvey R. Miller, Esq., Michael P. Kessler, Esq., and Sherri L. Toub, Esq., at Weil, Gotshal & Manges LLP; and Martin A. Sosland, Esq., and Sylvia A. Mayer, Esq., at Weil Gotshal & Manges LLP, represent the Debtors in their restructuring efforts. Kurtzman Carson Consultants L.L.C. is the Debtors' claims agent. The Debtors' financial advisors are The Blackstone Group L.P. and A.P. Services LLC. Margot B. Schonholtz, Esq., and Scott D. Talmadge, Esq., at Kaye Scholer LLP; and Laurie Selber Silverstein, Esq., at Potter Anderson & Corroon LLP, represent the Debtors' prepetition lenders. SemGroup L.P.'s affiliates, SemCAMS ULC and SemCanada Crude Company, sought protection under the Companies' Creditors Arrangement Act (Canada) on July 22, 2008. Ernst & Young, Inc., is the appointed monitor of SemCanada Crude Company and its affiliates' reorganization proceedings before the Canadian Companies' Creditors Arrangement Act. The CCAA stay expires on November 21, 2008. SemGroup L.P.'s consolidated, unaudited financial conditions as of June 30, 2007, showed $5,429,038,000 in total assets and $5,033,214,000 in total debts. In their petition, they showed more than $1,000,000,000 in estimated total assets and more than $1,000,000,000 in total debts. Bankruptcy Creditors' Service, Inc., publishes SemGroup Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by SemGroup L.P. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-700) SEMGROUP LP: Wins Nod to Amend Agreements With McCoy Petroleum -------------------------------------------------------------- SemGroup LP and its units obtained the Court's approval to amend certain prepetition agreements they entered into with McCoy Petroleum Corporation. McCoy Petroleum and Debtor SemGas Gathering, L.L.C., entered into a purchase and sale agreement, whereby McCoy Petroleum assigned its rights under a purchase and sale agreement among McCoy Petroleum, Henry Holding, LP, and BCCK Engineering, to purchase all of the membership interests in Debtor SemKan L.L.C., provided that SemGas agreed to grant McCoy Petroleum and Discovery Capital, L.L.C., an option to purchase 49% of the interests in SemKan. In connection with the PSA, SemGas acquired all of the membership interests in SemKan and granted McCoy Petroleum and Discovery the option to purchase 49% of the membership interests in SemKan pursuant to an option agreement. SemKan and McCoy Petroleum also entered into a dedication agreement, whereby McCoy Petroleum agreed to dedicate all of the natural gas produced from certain wells to SemKan's operating plant and pipeline system. SemKan and McCoy Petroleum are parties to a gas purchase and conditioning agreement, whereby SemKan will purchase all of the natural gas produced from McCoy Petroleum's wells. SemGas Gathering and McCoy Petroleum also entered into a gas purchase agreement, whereby SemGas Gathering will purchase all of the natural gas from McCoy Petroleum's wells. Since SemKan's operating plant and pipeline system is idle and production from McCoy Petroleum's wells is dedicated to only SemKan's operating plant and pipeline system. Against this backdrop, the parties determined to amend the Agreements. Under an amended Option Agreement, McCoy Petroleum will be granted an option to purchase 49% of the total outstanding membership interests in SemGas Gathering. The term of the Option Agreement is extended to four years to secure the amendments to the Gas Purchase Agreements and the Dedication Agreement. Pursuant to an amended Dedication Agreement, the term of the Dedication Agreement is eight years and McCoy Petroleum no longer has the ability to terminate the Amended Gas Purchase Agreement upon 30 days notice. McCoy Petroleum agreed to dedicate all of the natural gas produced from certain wells to both SemKan's operating plant and pipeline system and SemGas Gathering's operating plant and pipeline system. McCoy Petroleum also agreed to dedicate additional wells under the Amended Dedication Agreement. The Amended Dedication Agreement will terminate if the Court does not approve the Amended Option Agreement. Moreover, under the Amended Gas Purchase and Conditioning agreement, the term of the agreement is extended to eight years and McCoy Petroleum no longer has the ability to terminate the Amended Gas Purchase Agreement upon 30 days notice. The Amended Gas Purchase Agreement will terminate if the Court does not approve the Amended Option Agreement. Mark D. Collins, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, points out that the amendments provide SemGas Gathering and SemKan the ability to continue to earn revenue in connection with natural gas produced by McCoy's wells for eight more years without the risk of McCoy terminating the Amended Gas Purchase Agreement. About SemGroup L.P. SemGroup, L.P. -- http://www.semgrouplp.com/-- is a midstream service company that provides diversified services for end users and consumers of crude oil, natural gas, natural gas liquids and refined products. Services include purchasing, selling, processing, transporting, terminalling and storing energy. SemGroup serves customers in the United States, Canada, Mexico and Wales. SemGroup L.P. and its debtor-affiliates filed for Chapter 11 protection on July 22, 2008 (Bankr. D. Del. Lead Case No. 08-11525). John H. Knight, Esq., L. Katherine Good, Esq. and Mark D. Collins, Esq., at Richards Layton & Finger; Harvey R. Miller, Esq., Michael P. Kessler, Esq., and Sherri L. Toub, Esq., at Weil, Gotshal & Manges LLP; and Martin A. Sosland, Esq., and Sylvia A. Mayer, Esq., at Weil Gotshal & Manges LLP, represent the Debtors in their restructuring efforts. Kurtzman Carson Consultants L.L.C. is the Debtors' claims agent. The Debtors' financial advisors are The Blackstone Group L.P. and A.P. Services LLC. Margot B. Schonholtz, Esq., and Scott D. Talmadge, Esq., at Kaye Scholer LLP; and Laurie Selber Silverstein, Esq., at Potter Anderson & Corroon LLP, represent the Debtors' prepetition lenders. SemGroup L.P.'s affiliates, SemCAMS ULC and SemCanada Crude Company, sought protection under the Companies' Creditors Arrangement Act (Canada) on July 22, 2008. Ernst & Young, Inc., is the appointed monitor of SemCanada Crude Company and its affiliates' reorganization proceedings before the Canadian Companies' Creditors Arrangement Act. The CCAA stay expires on November 21, 2008. SemGroup L.P.'s consolidated, unaudited financial conditions as of June 30, 2007, showed $5,429,038,000 in total assets and $5,033,214,000 in total debts. In their petition, they showed more than $1,000,000,000 in estimated total assets and more than $1,000,000,000 in total debts. Bankruptcy Creditors' Service, Inc., publishes SemGroup Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by SemGroup L.P. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-700) SERVICE CORPORATION: Keystone Deal Won't Affect Moody's Ba3 Rating ------------------------------------------------------------------ Moody's Investors Service stated that Service Corporation International's announcement that it entered into an agreement to acquire Keystone North America Inc. will have no immediate impact on SCI's Ba3 Corporate Family Rating and stable outlook. The last rating action on SCI was on November 25, 2008, at which time Moody's affirmed the Ba3 Corporate Family Rating and lowered the speculative grade liquidity rating to SGL-2 from SGL-1. SCI is North America's largest provider of death-care products and services with revenues of about $2.1 billion in the twelve-month period ended June 30, 2009. SOVRAN SELF: Fitch Upgrades Issuer Default Rating From 'BB+' ------------------------------------------------------------ Fitch Ratings has upgraded these ratings for Sovran Self Storage, Inc., and Sovran Acquisition Limited Partnership: Sovran Self Storage, Inc. -- Issuer Default Rating to 'BBB-' from 'BB+'; -- $125 million senior unsecured revolving credit facility to 'BBB-' from 'BB+'; -- $250 million senior unsecured term loan to 'BBB-' from 'BB+'; -- $250 million senior unsecured term notes to 'BBB-' from 'BB+'. Sovran Acquisition Limited Partnership (as co-borrower) -- IDR to 'BBB-' from 'BB+'; -- $125 million senior unsecured revolving credit facility to 'BBB-' from 'BB+'; -- $250 million senior unsecured term loan to 'BBB-' from 'BB+'; -- $250 million senior unsecured term notes to 'BBB-' from 'BB+'. The ratings have been removed from Rating Watch Negative. The Rating Outlook is Stable. The upgrades center on recent steps the company has taken to reduce leverage to provide it sufficient cushion relative to covenants contained in certain of its unsecured debt agreements. The removal of the Negative Watch reflects the material improvement in Sovran's leverage ratios following the curing of the company's unsecured note covenant violation and the company's demonstrated access to the equity capital markets. On May 8, 2009, Fitch downgraded Sovran's credit ratings by one notch and placed the IDR on Negative Watch due to Fitch's view that the company's total leverage covenant violation limited the company's liquidity and financial flexibility. In May 2009, the company obtained a waiver of the covenant violation as of March 31, 2009, but Fitch remained concerned that the company would continue to have limited capacity to draw its unsecured revolving credit facility in the absence of a deleveraging transaction that would provide sufficient cushion relative to the company's covenant limitations. Sovran has taken several deleveraging steps to mitigate potential future covenant violations, including an Oct. 5, 2009 follow-on common stock offering of $114 million, a 30% common stock dividend reduction, and the issuance of 1.3 million shares via a DRIP and Share Purchase Plan. The company also intends to preserve capital by scaling back its expansions and enhancement program. Pro forma for the equity offering and DRIP Share Purchase Plan share issuance, Fitch estimates Sovran's net debt to recurring operating EBITDA ratio to be 4.5 times (x) as of June 30, 2009, compared with 5.9x as of March 31, 2009. Fitch projects that 2010 and 2011 leverage may increase above 5.0x given ongoing challenging operating conditions, but that these leverage levels would remain supportive of a 'BBB-' IDR. In addition, Fitch estimates that the company's total liabilities to gross asset value based on the methodology employed in Sovran's unsecured debt agreements to be 45%, which is materially below the covenant limit of 55% and which has improved from 55.4% as of March 31, 2009. With respect to operating performance, pro forma for the deleveraging transactions noted above, Sovran's fixed charge coverage (defined as recurring operating EBITDA less capital expenditures and straight-line rents, divided by interest expense and capitalized interest) was 2.4x for the 12 months ended June 30, 2009, up from 2008. Fitch projects that the company's fixed charge coverage ratio would be approximately 2.4x for both 2010 and 2011, given a 5% decline in EBITDA for 2010 and stabilization in 2011. Fitch considers these fixed charge coverage ratios to be consistent with a 'BBB-' IDR given the specialized nature of self-storage properties, Sovran's portfolio size and moderate geographical concentration. While Sovran has experienced declining fundamentals with same store declines since the third quarter of 2008, the company's credit metrics will remain consistent with a 'BBB-' IDR. Sovran's Same Store NOI declined 3% for the six months ending June 30, 2009, versus the same period of 2008 and weighted average occupancy has also declined to 81% for the same store portfolio at June 30, 2009, from 82.3% as of June 30, 2008. Additionally, while the company operates in 24 states, more than 40% of the company's NOI is represented by Florida and Texas. The Stable Outlook is driven by the company's liquidity coverage ratio which, pro forma for the deleveraging transactions noted above and defined as sources of liquidity (cash, availability under the company's revolving credit facility, expected retained cash flows from operating activities) divided by uses of liquidity (debt maturities and expected capitalized leasing commissions and building improvements) is 2.0x from June 30, 2009 to Dec. 31, 2011. The Stable Outlook also reflects Fitch's view that significant declines in operating performance over the next 12 to 24 months are not likely due to the quality of the portfolio and indications that fundamentals are beginning to stabilize. While same store NOI has declined since the third quarter of 2008, Fitch believes Sovran's fixed charge coverage and leverage metrics will remain at investment-grade levels over the next 12 to 24 months, as the company's deleveraging activities have provided additional cushion to unsecured term note holders. Fitch believes further covenant breaches are unlikely and that the company's liquidity and financial flexibility has improved. These factors may have a positive impact on the company's ratings: -- Maintaining fixed charge coverage above 2.5x (for the 12 months ended June 30, 2009, pro forma for deleveraging transactions note above, fixed charge coverage was 2.4x); -- Net debt to recurring operating EBITDA remaining below 5.0x (for the 12 months ended June 30, 2009, pro forma for deleveraging transactions note above, leverage was 4.5x, though Fitch anticipates leverage to be above 5.0x going forward given the operating environment); -- Unencumbered asset coverage of unsecured debt remaining above 2.0x (as of June 30, 2009, pro forma for deleveraging transactions note above, unencumbered asset coverage was 3.1x as measured by applying a 8.5% capitalization rate to unencumbered NOI.) Going forward, these factors may have a negative impact on the company's ratings: -- If fixed charge coverage declines below 2.0x; -- If net debt to recurring operating EBITDA increases above 6.0x; -- A liquidity shortfall; -- If Fitch expects the company to breach any financial covenant contained in its unsecured debt agreements. SEVEN FALLS: Foreclosure Sale Proceeds After 3 Postonements ----------------------------------------------------------- John Boyle at Citizen-Times.com reports that after three postponements, the foreclosure sale of two parts of the upscale Seven Falls Golf & River Club -- the Golf Center property, at 62 acres, and phase II of the project, about 65 acres -- went through on Thursday. Citizen-Times relates that Bob York at Raintree Realty, the third- party charged with executing the sale, said that the National Bank of South Carolina put in bids on the two parcels Citing Mr. York, Citizen-Times relates that the National Bank's phase II property bid on Thursday was $11.2 million, while the golf center property brought $4.1 million. According to foreclosure documents, Seven Falls and Zeus Investments owe the National Bank a combined $15.7 million on two loans. Seven Falls and Zeus owner Keith Vinson, Citizen-Times states, said that he's working with a private trust in Georgia to secure enough funding to finish the project. It is expected to fall into place before October 26, but if it doesn't come through, he'll pursue "all legal means available", the report says. according to Citizen-Times, bidders have until October 26 to present a bid, which must be at least 5% greater than Thursday's bids, but if no upset bid is filed, the National Bank's attorney will prepare a deed and transfer the property to the bank. Citizen-Times notes that while Chapter 11 bankruptcy protection is an option open to developers, Mr. Vinson says that it's "a strong word," adding that "there are some protective reliefs out there that would stay this process. There isn't anything we won't exercise to protect our property owners, our employees and our contractors. Whatever negative connotation may come with this decision I have to make, I'll live with that." Located in the Blue Ridge Mountains near Hendersonville and Asheville, Seven Falls is a private golf and river club in Western North Carolina. SKYWI: Files for Chapter 7 Bankruptcy Protection ------------------------------------------------ SkyWi has filed for Chapter 7 bankruptcy protection in Fort Worth, Texas. Carolea Hassard at Azle-news.com reports that SkyWi's office at 8401 Jacksboro Highway in Lakeside, has been closed, with a torn sheet of paper taped to the door reading, "Attention: To Whom It May Concern: All questions need to be addressed to Bankruptcy Trustee John Dee Spicer, 817-428-9355." According to Azle-news.com, client Evie Hooper said that she found out from other customers that some have received no notice that SkyWi is bankrupt, while others received notice that they will get another Internet service. In 2007, SkyWi was five months behind its payments to the city of Springtown on a lease for antenna space on the city's water tower. It paid the city after the gate to its tower was locked. In 2008, SkyWi fell behind again, so the city locked the gate again and got the payment. Azle-news.com relates that SkyWi finance director Kim Mathis said that the Company is paid up now, though the gate has been locked again so they will have to ask for the key if they want their antenna. Azle-news.com states that Pelican Bay claimed that SkyWi owes it money for antenna space. Qwest Communications, says the report, also claimed that SkyWi owed it $1.7 million for using its towers, but SkyWi disputed the claim and sued Qwest in December 2008, seeking $75,000. SkyWi offers broadband Internet service to homes and businesses in Eagle Mountain, Lake Worth, Lakeside, Saginaw, and Azle, in Texas. SONIC MEDICAL: Files Chapter 11 on Long Island ---------------------------------------------- Sonic Medical Resources Inc. filed for bankruptcy reorganization (Bankr. E.D.N.Y. 09-77781) along with affiliates to stop secured lender CIT Healthcare LLC from seeking appointment of a receiver for the Company. Sonic said in a court filing that consolidated assets are $19.6 million against debt totaling $21.1 million. The secured lender is owed $7 million. Revenue for a year ended in August was $17.7 million. Sonic Medical Resources operates eight diagnostic-imaging centers. At one time, the Hauppauge, New York-based company had 40 imaging centers. SOUTH MARSH: Files Chapter 11 in Pensacola, Florida --------------------------------------------------- South Marsh LLC filed for Chapter 11 relief on Oct. 15 in Pensacola, Florida (Bankr. N.D. Fla. Case No. 09-32148). Located in Fort Walton Beach, Florida, South Marsh LLC is the owner of 725 developed and undeveloped lots in Jackson County, Mississippi. According to Bloomberg News' Bill Rochelle, South Marsh said in a court filing that the lots are worth $35.8 million. Among secured creditors owed $14.9 million, Regions Bank is on the hook for $10.6 million. SPANSION INC: Auditor OKs $360,874 for McKenzie for March-May ------------------------------------------------------------- Pursuant to Sections 330 and 331 of the Bankruptcy Code, Spansion Inc.'s professionals seek payment of their fees and reimbursement of their expenses: A. Debtors' Professionals Professional Period Fees Expenses ------------ ------ ---- -------- Warren H. Smith & 09/01/09- Associates P.C. 09/30/09 $24,129 $523 Warren H. Smith & 06/01/09- Associates P.C. 08/31/09 47,768 281 Ernst & Young LLP 06/01/09- 08/31/09 473,100 694 Ernst & Young serves as the Debtors' independent auditors. Warren Smith is the fee auditor. In a separate filing, the Debtors certified to the Court that no objections were filed as to these fee applications: Professional 80% Fees 100% Expenses ------------ -------- ------------- Warren H. Smith & Associates, P.C. $24,670 $226 Young Conaway Stargatt & Taylor, LLP 5,268 334 B. Professionals of the Official Committee on Unsecured Creditors The Committee's professionals seek payment of fees and reimbursement of expenses pursuant to Sections 330 and 331 of the Bankruptcy Code. Professional Period Fees Expenses ------------ ------ ---- -------- Paul, Hastings, Janofsky 03/12/09- & Walker LLP 04/30/09 $797,966 $23,799 Paul, Hastings, Janofsky 05/01/09- & Walker LLP 05/31/09 361,818 13,063 Paul, Hastings, Janofsky 06/01/09- & Walker LLP 06/30/09 156,497 12,787 Young Conaway Stargatt & 06/01/09- Taylor, LLP 08/31/09 20,612 5,831 Paul Hastings serves as the Committee's counsel. Young Conaway acts as the Committee's counsel. The Committee certified to the Court that no objections were filed as to the FTI Consulting, Inc.'s interim fee application for the period from July 1 through July 31, 2009. Accordingly, the Debtors are authorized to pay FTI Consulting its fees for $120,000 and reimbursement of expenses for $1,092. Fee Auditor's Report Warren H. Smith & Associates, P.C., acting in its capacity as fee auditor, submitted with the Court its final report regarding the interim fee applications of the Debtors' professionals: Recommended Recommended Professional Period Fees Expenses ------------ --------- ----------- ----------- Baker & McKenzie LLP 03/01/09- 05/31/09 $360,874 $764 King & Spalding LLP 03/01/09- 05/31/09 23,958 0 Wilson Sonsini 03/01/09- Goodrich & Rosati, P.C. 05/31/09 125,914 591 Young Conaway Stargatt 03/01/09- & Taylor, LLP 05/31/09 67,848 8,100 Baker & McKenzie's fees represent a reduction by $43,888 and its recommended expenses reflect a reduction by $5,561. About Spansion Inc. Spansion Inc. (NASDAQ: SPSN) -- http://www.spansion.com/-- is a Flash memory solutions provider, dedicated to enabling, storing and protecting digital content in wireless, automotive, networking and consumer electronics applications. Spansion, previously a joint venture of AMD and Fujitsu, is the largest company in the world dedicated exclusively to designing, developing, manufacturing, marketing, selling and licensing Flash memory solutions. Spansion Inc., Spansion LLC, Spansion Technology LLC, Spansion International, Inc., and Cerium Laboratories LLC filed voluntary petitions for Chapter 11 on March 1, 2009 (Bankr. D. Del. Lead Case No. 09-10690). On February 9, 2009, Spansion's Japanese subsidiary, Spansion Japan Ltd., voluntarily entered into a proceeding under the Corporate Reorganization Law (Kaisha Kosei Ho) of Japan to obtain protection from its creditors as part of the company's restructuring efforts. None of Spansion's subsidiaries in countries other than the United States and Japan are included in the U.S. or Japan filings. Michael S. Lurey, Esq., Gregory O. Lunt, Esq., and Kimberly A. Posin, Esq., at Latham & Watkins LLP, have been tapped as bankruptcy counsel. Michael R. Lastowski, Esq., at Duane Morris LLP, is the Delaware counsel. Epiq Bankruptcy Solutions LLC, is the claims agent. The United States Trustee has appointed an official committee of unsecured creditors in the case. As of September 30, 2008, Spansion disclosed total assets of US$3,840,000,000, and total debts of US$2,398,000,000. Spansion Japan Ltd. filed a Chapter 15 petition on April 30, 2009 (Bankr. D. Del. Case No. 09-11480). The Chapter 15 Petitioner's counsel is Gregory Alan Taylor, Esq., at Ashby & Geddes. It said that Spansion Japan had US$10 million to US$50 million in assets and US$50 million to US$100 million in debts. Bankruptcy Creditors' Service, Inc., publishes Spansion Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Spansion Inc. and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000) SPANSION INC: Gilles Delfassy to Step Down as Director ------------------------------------------------------ Gilles Delfassy notified Spansion Inc. on October 14, 2009, of his resignation as a member of the Company's Board of Directors, effective immediately. Mr. Delfassy did not resign because of a disagreement with the Company on any matter relating to the Company's operations, policies or practices. Spansion Inc. (NASDAQ: SPSN) -- http://www.spansion.com/-- is a Flash memory solutions provider, dedicated to enabling, storing and protecting digital content in wireless, automotive, networking and consumer electronics applications. Spansion, previously a joint venture of AMD and Fujitsu, is the largest company in the world dedicated exclusively to designing, developing, manufacturing, marketing, selling and licensing Flash memory solutions. Spansion Inc., Spansion LLC, Spansion Technology LLC, Spansion International, Inc., and Cerium Laboratories LLC filed voluntary petitions for Chapter 11 on March 1, 2009 (Bankr. D. Del. Lead Case No. 09-10690). On February 9, 2009, Spansion's Japanese subsidiary, Spansion Japan Ltd., voluntarily entered into a proceeding under the Corporate Reorganization Law (Kaisha Kosei Ho) of Japan to obtain protection from its creditors as part of the company's restructuring efforts. None of Spansion's subsidiaries in countries other than the United States and Japan are included in the U.S. or Japan filings. Michael S. Lurey, Esq., Gregory O. Lunt, Esq., and Kimberly A. Posin, Esq., at Latham & Watkins LLP, have been tapped as bankruptcy counsel. Michael R. Lastowski, Esq., at Duane Morris LLP, is the Delaware counsel. Epiq Bankruptcy Solutions LLC, is the claims agent. The United States Trustee has appointed an official committee of unsecured creditors in the case. As of September 30, 2008, Spansion disclosed total assets of US$3,840,000,000, and total debts of US$2,398,000,000. Spansion Japan Ltd. filed a Chapter 15 petition on April 30, 2009 (Bankr. D. Del. Case No. 09-11480). The Chapter 15 Petitioner's counsel is Gregory Alan Taylor, Esq., at Ashby & Geddes. It said that Spansion Japan had US$10 million to US$50 million in assets and US$50 million to US$100 million in debts. Bankruptcy Creditors' Service, Inc., publishes Spansion Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Spansion Inc. and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000) SPORTSCLICK INC: Deal to Buy Green Swan Terminated -------------------------------------------------- Green Swan Capital Corp. discloses the termination of the proposed transaction with SportsClick Inc. Green Swan advanced a refundable deposit in the principal amount of $25,000, and a loan in the principal amount of $225,000 to SportsClick pursuant to an agreement in principle by which SportsClick would purchase all of the issued and outstanding shares of Green Swan. Green Swan subsequently registered a General Security Agreement in the Provinces of Alberta and Nova Scotia. The entire Loan amount is secured under the respective security agreements. On June 26, 2009, the Bank of Montreal, a secured creditor of SportsClick, issued a Notice of Intent under the Bankruptcy Insolvency Act to reclaim its loan from SportsClick. On July 17, 2009, Ernst & Young Inc. became the receiver in respect of the property of SportsClick. Green Swan's interests, as a secured party, are inferior to those of the Bank of Montreal. Green Swan confirms it continues to investigate its options for obtaining the return of the loan to SportsClick, however, the receivership process introduces a significant operating risk and management continues to believe the return of the loan is unlikely. Green Swan is a capital pool company which was listed on the TSXV on October 7, 2008, following the completion of its initial public offering of $400,000, including $104,000 raised from founders, Benoit Robitaille (Chief Executive Officer and Director), Chris Skaarup (Director), Morgan Cowl (Director), Dan Hilton (Chief Financial Officer and Director), Sean Caulfeild (Corporate Secretary and Director) and Stephan May (Director). Copies of Green Swan's documents may be obtained electronically from the SEDAR system at http://www.sedar.com. Green Swan is listed on the TSX Venture Exchange under the symbol "GSW.P". STALLION OILFIELD: Gets Support for Plan, Files for Chapter 11 -------------------------------------------------------------- Stallion Oilfield Services Ltd. has received the requisite support of its lenders and equity holders for the balance sheet restructuring agreement and that it has filed voluntary petitions for chapter 11 relief to move forward to implement its prearranged plan and obtain the necessary court approvals. On October 7, 2009, Stallion had reached an agreement in principle with a working group of secured lenders, a sub-committee of debtholders, and its key equity holders to implement a restructuring that would eliminate approximately $515 million of the Company's unsecured debt as well as $26 million of accrued interest. As of October 19, 2009, the Company has more than $80 million of cash on hand to support both the restructuring and operations. Stallion Oilfield indicated that it does not anticipate any changes to the overall business or its ability to meet customer needs as a result of this action. Craig M. Johnson, Stallion's President and Chief Executive Officer, said, "Stallion is committed to ensuring a seamless restructuring process for all parties involved, and will emerge as a leaner, stronger company poised to capitalize on expected recoveries in the oil and natural gas industry." The restructuring agreement includes a lock-up agreement with holders of more than 90% in principal amount of its secured obligations and more than 74% in principal amount of its unsecured bridge lenders and more than 88% in principal amount of its unsecured noteholders as well as more than 68% of equity holders supporting the restructuring. The terms of the restructuring agreement provide that: (a) the company's secured lenders would receive approximately $25 million in principal payments permanently reducing the company's obligations outstanding under the company's secured credit agreement, (b) approximately $259 million in obligations outstanding under the company's unsecured bridge loan agreement and approximately $284 million in obligations outstanding on account of the 9.75% unsecured notes due February 1, 2015, would be converted on a pro rata basis for 98% of the common equity in the reorganized Stallion, and (c) the company's existing equity holders would receive 2% of the common equity and warrants to purchase 1% of the common equity in reorganized Stallion. The full implementation of the agreement is dependent upon a number of factors, including the filing of a plan of reorganization, the approval of a disclosure statement and confirmation and consummation of the plan of reorganization in accordance with the provisions of the Bankruptcy Code. The company's filing includes key initiatives to ensure there is little or no impact on Stallion's operations and its employees, customers, vendors and suppliers. For example, Stallion is seeking court authority to continue payment of employee wages and benefits and vendors for goods and services delivered both before and after the filing in the normal course. The following affiliates of Stallion were included in the Company's chapter 11 filings: -- Stallion Oilfield Services Ltd.; -- Central Industries, Inc.; -- Salty's Disposal Wells, LP; -- Salty's Manufacturing, Ltd.; -- Stallion Acquisition, LLC; -- Stallion Heavy Haulers, LP -- Stallion Interests, LLC; -- Stallion Offshore Quarters, Inc.; -- Stallion Oilfield Construction, LLC; -- Stallion Oilfield Finance Corp.; -- Stallion Oilfield Holdings GP, LLC; -- Stallion Oilfield Holdings, Ltd.; -- Stallion Oilfield Services, Inc.; -- Stallion Production Services, LP; -- Stallion Production, LLC; -- Stallion Rockies Ltd.; -- Stallion Solids Control, Inc.; and -- Stallion Stables, LLC. A copy of the Restructuring Term Sheet is available for free at: http://bankrupt.com/misc/Stallion_Plan_TermSheet.pdf A copy of the Plan is available for free at: http://bankrupt.com/misc/Stallion_Chapter11_Plan.pdf A copy of the explanatory disclosure statement is available for free at: http://bankrupt.com/misc/Stallion_DiscStatement.pdf About Stallion Oilfield Stallion Oilfield Services Ltd. -- http://www.stallionoilfield.com/-- provides wellsite support services and production & logistics services to the oil and natural gas industry with 1,700 employees in 65 locations. Stallion's range of critical wellsite services include onshore and offshore workforce accommodations and remote camp complexes, surface rental equipment, solids control, communication services, wellsite construction, rig relocation, heavy equipment hauling, fluids handling and logistics. Stallion's Everything but the Rig SM product offerings are designed to improve living and working conditions, safety and our customers' productivity at the wellsite. Stallion is headquartered in Houston, Texas and delivers products and services in South Texas, Gulf Coast, Ark-La- Tex, Ft. Worth Basin, Permian Basin, Mid Continent, Alaska's Prudhoe Bay, the Marcellus Shale and Rocky Mountain regions as well as to the global offshore industry. Stallion Oilfield Services Ltd. and its affiliates filed for Chapter 11 on Sept. 19 (Bankr. D. Del. Case No.: 09-13562). Judge Linnehan Shannon handles the case. Kirkland & Ellis LLP is serving as Stallion's chapter 11 counsel and Miller Buckfire & Co., LLC, and AP Services, LLC are serving as its financial advisors. Richards, Layton & Finger P.A. will serve as Delaware counsel. Epiq Bankruptcy Solutions, LLC, serves as claims and notice agent. The petition says that Stallion Oilfied's assets and debts are between $500 million and $1 billion. STALLION OILFIELD: Case Summary & 30 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Stallion Oilfield Services Ltd. 950 Corbindale Road, Suite 300 Houston, Texas 77024 Bankruptcy Case No.: 09-13562 Debtor-affiliates filing subject to Chapter 11 petitions: Entity Case No. ------ -------- Stallion Oilfield Services, Inc. 09-13561 Salty's Manufacturing, Ltd. 09-13563 Salty's Disposal Wells, LP 09-13564 Stallion Production, LLC 09-13565 Stallion Production Services, LP 09-13566 Stallion Rockies Ltd. 09-13567 Stallion Heavy Haulers, LP 09-13568 Stallion Solids Control, Inc. 09-13569 Stallion Oilfield Finance Corp. 09-13570 Stallion Acquisition, LLC 09-13571 Stallion Stables, LLC 09-13572 Central Industries, Inc. 09-13573 Stallion Oilfield Construction, LLC 09-13574 Stallion Offshore Quarters, Inc. 09-13575 Stallion Oilfield Holdings, Ltd. 09-13576 Stallion Interests, LLC 09-13577 Stallion Oilfield Holdings GP, LLC 09-13578 Type of Business: The Debtors provide wellsite support services and production & logistics services to the oilfield with over 1,700 employees in 65 locations. The Debtors deliver products and services in the South Texas, Gulf Coast, Ark-La- Tex, Ft. Worth Basin, Permian Basin, Mid- Continent, Alaska's Prudhoe Bay, Rocky Mountain and Applachinian Basin regions as well as to the global offshore industry. http://www.stallionoilfield.com/ Chapter 11 Petition Date: October 19, 2009 Court: District of Delaware Judge: Brendan Linehan Shannon Debtor's Counsel: Jonathan S. Henes, Esq. Chad J. Husnick, Esq. Kirkland & Ellis LLP Citigroup Center 601 Lexington Avenue New York, NY 10022 Tel: (212) 446-4800 Fax: (212) 446-4900 http://www.kirkland.com Co-Counsel: Daniel J. DeFranceschi, Esq. Lee E. Kaufman, Esq. Richards, Layton & Finger, P.A. One Rodney Square 920 North King Street Wilmington, DE 19801 Tel:(302) 651-7700 Fax:(302) 498-7816 http://www.rlf.com Restructuring Advisor: John R. Castellano Managing Director AP Services, LLC 300 N. LaSalle, Suite 1900 Chicago, IL 60654 Tel: (312) 346-2500 Fax: (312) 346-3585 http://www.alixpartners.com Claims Agent: Epiq Bankruptcy Solutions, LLC 757 Third Avenue, 3rd Floor New York, NY 10017 http://bsillc.com/ Estimated Assets: $500 million to $1 billion Estimated Debts: $500 million to $1 billion The Debtor's Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ The Bank of New York Trust Bond Debt $283,863,071 Company, N.A. Corporate Trust Division 601 Travis Street, 18th Floor Houston, Texas 77002 Tel: (713) 483-6649 Fax: (713) 483-7803 Attn: Kashif Asghar Wilmington Trust Company Bond Debt $259,291,652 50 South Sixth St., Ste. 1290 Minneapol is, Minnesota 55402 Tel: (612) 217-5630 Fax: (612) 217-5651 Attn: Jeffery Rose Ice Services Trade Debt $384,863 2606 C Street, Suite 6A Anchorage, Alaska 99503 Tel: (907) 301-6247 Fax: (907) 644-8202 Attn: Chris Riley JPS Equipment, LLC Trade Debt $345,955 Peak Oilfield Service Company Trade Debt $338,857 Johnnie R Gresham Operations Trade Debt $209,780 Inc. North Slope Borough Utility $190,126 Total Safety Trade Debt $181,783 Quality Mat Company Trade Debt $133,349 Big River Lumber Company, LLC Trade Debt $126,039 H&E Equipment Services, LLC Trade Debt $115,356 Trail Blazer Hot Shot, Inc. Lease $111,221 Bowie Dozer Service, Inc. Contract $110,583 OK Fuel Stop Trade Debt $100,648 Continental Wire Cloth Trade Debt $100,391 Acadiana Harwood, LLC Trade Debt $100,332 ESP Petrochemicals, Inc. Trade Debt $99,281 Abbeville Electric Supply Inc. Trade Debt $89,545 Genie Industries Trade Debt $87,440 Earls Electric Trade Debt $82,452 H20, Inc. Trade Debt $82,052 Texas Environmental Plastics Trade Debt $81,034 Trade Petroleum Products, Inc. Trade Debt $75,768 Eagle Construction Trade Debt $73,380 ITI Trailers and Truck Bodies Trade Debt $72,800 Inc. West Dakota Oil Company Trade Debt $66,289 McCody Concrete Products Trade Debt $65,471 NC Machinery Co./NC Power Trade Debt $65,396 System LaCassine Oilfield Services Trade Debt $64,836 Herbert Shell & Limestone Trade Debt $64,572 The petition was signed by John R. Castellano, chief restructuring officer. STATION CASINOS: Gets Final Nod for $150 Mil. of DIP Financing -------------------------------------------------------------- Judge Gregg W. Zive of the United States Bankruptcy Court for the District of Nevada, authorized, on a final basis, Station Casinos, Inc., to obtain the Postpetition Financing from Vista Holdings, LLC, and intercompany loans from Past Enterprises, Inc., on an unsecured basis, and in respect thereof to enter into and deliver to Vista the DIP Credit Agreement. Amounts outstanding under the Postpetition Financing provided by Vista will not exceed an aggregate principal amount of $150,000,000 at any time following the entry of the Final Cash Collateral Order. Vista, and in respect of its loans to SCI, Past Enterprises, are granted an administrative expense claim pursuant to Sections 364(b), 503(b)(1) and 507(a)(2) of the Bankruptcy Code to the extent of SCI's obligations from time to time outstanding under the DIP Credit Agreement and with respect to Past Enterprises, to the extent of the principal amount of intercompany loans made by Past Enterprises to SCI. The Debtors will not borrow from Vista, and will not use the proceeds of any borrowings, to finance any uses of cash that are inconsistent with the Final Order or the Budget attached to the Cash Collateral. The Debtors will not permit Vista to make any loans, investments or any other cash disbursements except to the extent permitted by the Final Order and the Budget. Any transfers from Past Enterprises to SCI will be evidenced by promissory notes on an unsecured, subordinated basis and will constitute approved postpetition financing on an administrative basis pursuant to Section 364(b). SCI will borrow from Vista $11,500,000 and will use the $11,500,000 exclusively to (i) repay Past Enterprises for any postpetition lending to SCI for the purpose of funding any Budgeted use of cash other than in respect of Excluded Line Items, and (ii) the remaining balance of the $11,500,000 borrowing will be used by SCI to fund expenditures permitted under the Budget that do not constitute Excluded Line Items. A full-text copy of the Final DIP Order is available for free at http://bankrupt.com/misc/SC_FinalCashCollOrd.pdf Court Issues Final Cash Collateral Order Judge Zive ruled, on a final basis, that Debtor Station Casinos, Inc. and its debtor affiliates may use, from time to time, their cash, including any Cash Collateral, maintained in a deposit account held by Past Enterprises, Inc., and proceeds of loans from Vista Holdings, LLC, made under the Postpetition Financing during the period commencing from the Petition Date through and including, but not beyond, the date of termination of the use of Cash Collateral. Upon the occurrence of an Event of Default, the Prepetition Agent and the Prepetition Secured Parties may, in their absolute and sole discretion, exercise all rights and remedies and take any actions under the Final Order, including the termination of the Debtors' right to use Cash Collateral, without further modification of the automatic stay pursuant to Section 362 of the Bankruptcy Code or further order of or application to the Court. An occurrence of any of these circumstances, among others, will constitute an event of default: (a) An order entered by the Court dismissing any of the Chapter 11 Cases, converting any of the Debtors' Chapter 11 Cases to ones under chapter 7 of the Bankruptcy Code, appointing a chapter 11 trustee in any of the Chapter 11 Cases, or any Debtor will file a motion seeking the dismissal of its Chapter 11 Case under Section 1112 of the Bankruptcy Code or an order entered by the Court appointing an examiner with expanded powers; (b) An order of the Court (x) granting any lien on or security interest (i) on property of the Debtors that is not permitted under the terms of the Prepetition Loan Documents and the Final Order, (ii) in any property of the estate of a Debtor in favor of any party other than the Prepetition Agent, the holder of any Permitted Lien or FCP Propco, LLC, as to perfected prepetition liens held by FCP PropCo, LLC, or (y) granting a Section 364 superpriority administrative claim against the Debtors to any party in interest other than the Prepetition Agent or the Prepetition Secured Parties, the holder of any Permitted Lien or FCP Propco, LLC in each case without the express written consent of the Prepetition Agent; (c) The cash expenditures of the Debtors, the Guarantors, the Drop Down Borrowers or Vista exceed those permitted by the Budget or the Final Order without prior written consent of the Prepetition Agent and the prepetition Required Lenders, or there will at any time be no approved Budget in full force and effect; (d) 11:59 p.m. (New York City time) on March 31, 2010, unless the Plan Effective Time under the the Forbearance Agreement has occurred at or prior to that date; and (e) the earlier of (a) ten (10) days following the Plan Effective Time and (b) April 10, 2010, unless a plan of reorganization which provides for an Acceptable Plan Treatment will have been consummated in accordance with the terms and conditions of that plan. Any objection which has not been withdrawn or resolved is, to the extent not resolved, overruled. A full-text copy of the Final Cash Collateral Order is available for free at http://bankrupt.com/misc/SC_FinalCashCollOrd.pdf About Station Casinos Station Casinos, Inc., is a gaming and entertainment company that currently owns and operates nine major hotel/casino properties (one of which is 50% owned) and eight smaller casino properties (three of which are 50% owned), in the Las Vegas metropolitan area, as well as manages a casino for a Native American tribe. Station Casinos Inc., together with its affiliates, filed for Chapter 11 on July 28, 2009 (Bankr. D. Nev. Case No. 09-52477). Station Casinos has hired Milbank, Tweed, Hadley & McCloy LLP as legal counsel in the Chapter 11 case; Brownstein Hyatt Farber Schreck, LLP, as regulatory counsel; and Lewis and Roca LLP as local counsel. The Debtor is also hiring Lazard Freres & Co. LLC as investment banker and financial advisor. Kurtzman Carson Consultants LLC is the claims and noticing agent. In its bankruptcy petition, Station Casinos said that it had assets of $5,725,001,325 against debts of $6,482,637,653 as of June 30, 2009. About 4,378,929,997 of its liabilities constitute unsecured or subordinated debt securities. Bankruptcy Creditors' Service, Inc., publishes Station Casinos Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Station Casinos Inc. and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) STATION CASINOS: Sec. 341 Meeting Adjourned to November 9 --------------------------------------------------------- The United States Trustee for Region 17 has informed the United States Bankruptcy Court for the District of Nevada that the meeting of the creditors of Stations Casinos, Inc., and its debtor affiliates has been continued from October 5, 2009, to November 9, 2009, at 2:00 p.m. at Room 2110, at C. Clifton Young Federal Building and U.S. Courthouse 300 Booth Street, in Reno, Nevada. Attendance by the Debtors' creditors at the meeting is welcome, but not required. The Sec. 341(a) meeting offers the creditors a one-time opportunity to examine the Debtors' representative under oath about the Debtors' financial affairs and operations that would be of interest to the general body of creditors. The meeting may be continued or adjourned from time to time by notice at the meeting, without further written notice to the creditors. About Station Casinos Station Casinos, Inc., is a gaming and entertainment company that currently owns and operates nine major hotel/casino properties (one of which is 50% owned) and eight smaller casino properties (three of which are 50% owned), in the Las Vegas metropolitan area, as well as manages a casino for a Native American tribe. Station Casinos Inc., together with its affiliates, filed for Chapter 11 on July 28, 2009 (Bankr. D. Nev. Case No. 09-52477). Station Casinos has hired Milbank, Tweed, Hadley & McCloy LLP as legal counsel in the Chapter 11 case; Brownstein Hyatt Farber Schreck, LLP, as regulatory counsel; and Lewis and Roca LLP as local counsel. The Debtor is also hiring Lazard Freres & Co. LLC as investment banker and financial advisor. Kurtzman Carson Consultants LLC is the claims and noticing agent. In its bankruptcy petition, Station Casinos said that it had assets of $5,725,001,325 against debts of $6,482,637,653 as of June 30, 2009. About 4,378,929,997 of its liabilities constitute unsecured or subordinated debt securities. Bankruptcy Creditors' Service, Inc., publishes Station Casinos Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Station Casinos Inc. and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) STATION CASINOS: U.S. Trustee Opposes Employee Pay Beyond Cap ------------------------------------------------------------- The Bankruptcy Court previously authorized, on an interim basis, Station Casinos Inc. and its units to pay their employees prepetition wages in the ordinary course of business without interruption, subject to the restrictions contained in Section 507(a) of the Bankruptcy Code, which grants a fourth priority general unsecured claim to claims on employees for wages earned within 180 days prior to the Petition Date in an amount not to exceed $10,950, and Section 1129(a)(9)(B), which makes payment of the claims in full a condition to confirmation of a Chapter 11 plan. In a supplemental memorandum filed with the Court, the Debtors reported that they complied with the $10,950 cap inherent in the Interim Wage Order and made wage and salary payments to its employees on July 31 and August 14, 2009, in the amount of $1,860,000 on account of prepetition wages. The Debtors withheld payment of $224,298 from 17 employees, which aggregate amount represents wages and salary due to the employees on account of prepetition wages in excess of $10,950 per employee. The Debtors submitted to the Court a chart showing that for each of the 17 employees (a) the amount they were paid on July 31, 2009, in each case $10,950 or less; (b) the amount they were owed but not paid on July 31, 2009, and (c) the amount they were owed and not paid on August 14, 2009, because that August 14 payroll included two days of prepetition wages and salary. A full-text copy of the Employee Wages Chart is available for free at http://bankrupt.com/misc/SC_17EmpWages.pdf Accordingly, the Debtors seek the Court's permission to pay a $224,298 withheld prepetition wages and salary of 16 of the 17 effected employees, in the aggregate amount of $136,347. The Debtors says they are not seeking relief at this time with respect to the prepetition salary of one employee who is owed $87,951 on account of prepetition salary. U.S. Trustee Objects Sara L. Kistler, the Acting United States Trustee for Region 17, objects to the Debtors' Motion to pay prepetition wages and salary of 16 employees because: (a) there is no basis in law for approval of the Motion; and (b) the Debtors have not, and cannot, made the evidentiary showing necessary to meet either the "critical vendor" standard or the "necessity" doctrine. The U.S. Trustee says that there is no evidentiary support is given for the assertion that "most of these employees could readily find employment elsewhere in the industry." Moreover, the U.S. Trustee asserts the Debtors have not met their burden to show that payment of these prepetition claims, and not all others, should be paid prior to plan confirmation. Accordingly, the US Trustee asks the Court to deny approval of the Motion. About Station Casinos Station Casinos, Inc., is a gaming and entertainment company that currently owns and operates nine major hotel/casino properties (one of which is 50% owned) and eight smaller casino properties (three of which are 50% owned), in the Las Vegas metropolitan area, as well as manages a casino for a Native American tribe. Station Casinos Inc., together with its affiliates, filed for Chapter 11 on July 28, 2009 (Bankr. D. Nev. Case No. 09-52477). Station Casinos has hired Milbank, Tweed, Hadley & McCloy LLP as legal counsel in the Chapter 11 case; Brownstein Hyatt Farber Schreck, LLP, as regulatory counsel; and Lewis and Roca LLP as local counsel. The Debtor is also hiring Lazard Freres & Co. LLC as investment banker and financial advisor. Kurtzman Carson Consultants LLC is the claims and noticing agent. In its bankruptcy petition, Station Casinos said that it had assets of $5,725,001,325 against debts of $6,482,637,653 as of June 30, 2009. About 4,378,929,997 of its liabilities constitute unsecured or subordinated debt securities. Bankruptcy Creditors' Service, Inc., publishes Station Casinos Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Station Casinos Inc. and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) STERLING MINING: Supplemental Financing OK'd; Objections Overruled ------------------------------------------------------------------ The Hon. Terry L. Myers of the U.S. Bankruptcy Court for the District of Idaho has overruled the objection of creditor Sunshine Precious Metals, Inc., and stockholder American Reclamation, Inc., to Sterling Mining Company's supplemental motion to approve postpetition financing. The Court ordered that the supplemental postpetition borrowing is approved under the terms set forth in the supplemental post petition secured financing agreement. The financing will be secured by a junior lien on all assets of the debtor-in-possession not previously encumbered by other liens. To the extent security may not be sufficient to reimburse Minco Silver Corporation, Minco will be entitled to an allowance of an administrative expense claim. Based in Coeur d'Alene, Idaho, Sterling Mining Company (OTCBB:SRLM and FSE:SMX) -- http://www.SterlingMining.com/-- is a mineral resource development and exploration company. The company has a long term lease on the Sunshine Mine in North Idaho's Coeur d'Alene Mining District. The Sunshine Mine is comprised of 5,930 patented and unpatented acres, and historically produced over 360 million ounces of silver from 1884 until its closure in early 2001. Sterling Mining leased the Sunshine Mine in June 2003, along with a mill, extensive mining infrastructure and equipment, a large land package, and a database encompassing a long history of exploration, development and production. As of September 30, 2008, Sterling Mining had $31.9 million in total assets, and $13.2 million in total current liabilities and $1.6 million in total long-term liabilities. In its schedules, the Debtor listed total assets of $11,706,761 and total debts of $14,159,010. Sterling Mining filed for bankruptcy protection on March 3, 2009 (Bankr. D. Idaho Case No. 09-20178). Bruce A. Anderson, Esq., at Elsaesser Jarzabek Anderson Marks Elliott & McHugh, Chartered represents the Debtor as counsel. S-TRAN HOLDINGS: Wants Continues Access to ACFS Cash Collateral --------------------------------------------------------------- S-Tran Holdings, Inc., and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Delaware for authorization to access cash collateral; and grant adequate protection to American Capital Financial Services, Inc. The Debtors' authorization to use the cash collateral of ACFS, as agent for American Capital Strategies, Ltd., and ACS Funding Trust I expired on Sept. 30, 2009. ACFS, the Debtors' prepetition junior secured lender, agreed to the Debtors' use of cash collateral through Oct. 31, 2009. ACFS also has agreed to further extensions through Nov. 30, 2009, and through Dec. 31, 2009, without further order of the Court, if ACFS and the Debtors further agree to further extensions. As reported in the Troubled Company Reporter on Jan. 29, 2009, ACFS asserts a lien on and security in substantially all of the assets of the Debtors, to secure indebtedness in the approximate principal amount of $7.5 million. The Debtors propose to grant to ACFS, as adequate protection for any diminution in value resulting from the Debtors' use of cash collateral, replacement liens in the collateral. The Debtors also propose to grant ACFS valid and perfected additional liens, having a second or more junior lien on the collateral, subject to the Care-Out and to any other prior permitted liens. Objections to the cash collateral motion, if any, are due on Oct. 20, 2009, at 4:00 p.m. ET. The hearing date is yet to be scheduled, if necessary. About S-Tran Holdings Headquartered in Cookeville, Tennessee, S-Tran Holdings, Inc., provides common carrier services and specialized in less-than- truckload shipments and also supplies overnight and second day service to shippers in 11 states in the Southeast and Midwestern United States. The company and its debtor-affiliates filed for Chapter 11 relief on May 13, 2005 (Bankr. D. Del. Case No. 05-11391). Bruce Grohsgal, Esq., Laura Davis Jones, Esq., Michael Seidl, Esq., and Sandra G.M. Selzer, Esq., at Pachulski Stang Ziehl Young & Jones LLP represent the Debtors as counsel. Christopher A. Ward, Esq., at Polsinelli Shalton Flanigan Suelthaus, Mary E. Augustine, Esq., at Ciardi, Ciardi & Astin, P.C., and Steven M. Yoder, Esq., at Potter Anderson & Corroon LLP, represent the Official Committee of Unsecured Creditors as counsel. When the Debtors filed for protection from their creditors, they listed total assets of $22,508,000 and total debts of $30,891,000. SUN-TIMES MEDIA: Jim Tyree Discloses New Owners, Management Team ---------------------------------------------------------------- Sun-Times Media Holdings LLC Lead Investor Jim Tyree issued the following statement: "With the U.S. Bankruptcy Court approval of the sale of Sun-Times Media Group Inc. assets to Sun-Times Media Holdings LLC and closing scheduled for later this month, we are very pleased with the progress that's been made to save these legendary Chicago institutions and more than 1,800 jobs." "We are excited to have the opportunity to create a successful business for all our constituencies: our employees, readers, advertisers, investors and the community. Our goal is to build a high-quality, high-integrity business with the best local coverage of news, sports and entertainment. We are committed to investing the necessary capital to transform the company to accomplish that goal. The organization has great potential, talented people and solid content, and we believe there's still a need for strong regional coverage across the Chicago region, from the Wisconsin border into Northwest Indiana. Producing great content will not only meet our readers' needs, but it will continue to serve our advertisers and community as well. We need to come together to be more efficient and effective at delivering news, as well as be innovative to compete in this dynamically changing industry." "We are confident that, going forward, we can stand shoulder-to- shoulder with our employees and work together to build a world- class media business. We thank the management team, the union leadership and members as well as all employees for their commitment and sacrifice to make this deal happen. To create a successful, profitable organization, we need that cooperative spirit to continue, and I believe it will." "We are very proud of the people who early in this process invested the resources to make this happen. All members of the Sun-Times Media Holdings investor group, listed below, are local investors with ties to Chicago and a strong interest in seeing this institution prosper." -- Jim Tyree, Chairman and CEO of Mesirow Financial -- Managing Member, Sun-Times Media Holdings, LLC -- Andrew Agostini, Principal and Owner, J.L. Woode Ltd. -- Kevin Flynn, Chairman and Chief Executive Officer, Emerald Ventures,Inc. -- Ed Heil, Investor and Entrepreneur -- Michael Mackey, Senior Managing Director, Insurance Services, Mesirow Financial -- William Parrillo and Robert Parrillo, Private Investors -- Richard Price, President and Chief Operating Officer, Mesirow Financial -- Ed Ross, Principal and Owner, J.L. Woode Ltd. -- W. Rockwell "Rocky" Wirtz, President, Wirtz Corporation -- Bruce Young, Vice Chairman, Mesirow Financial "As head of the investor group, I will provide strategic and capital planning, set the tone for the organization and provide support to each of the company's constituencies. My full-time efforts will remain focused on my role as chairman and chief executive officer of Mesirow Financial. The officers at Sun-Times Media will be responsible for leading and managing the company. The senior management team, listed below, has demonstrated a firm commitment to the business throughout this process and the investor group looks forward to working with them." -- Jeremy L. Halbreich, Chief Executive Officer and Vice Chairman -- Rick Surkamer, President and Chief Operating Officer -- Jim McDonough, Senior Vice President, Chief Administrative Officer and General Counsel -- Barbara Swanson, Senior Vice President of Advertising and Marketing Media -- John Barron, Publisher of the Chicago Sun-Times and Pioneer Press -- Fred Lebolt, President and Publisher of Southtown Star, Fox Valley Publications and New Media Integration -- Lisa Tatina, Publisher of the Post-Tribune -- David Martin, Senior Vice President, Business Development -- Kevin King, Vice President, Operations -- Ted Rilea, Vice President, Human Resources -- Jeff Kane, Vice President, Technology -- Courtney Price, Vice President, Circulation Sales and Service "That team will continue to be responsible for the day-to-day operations of the Chicago Sun-Times and the Sun-Times News Group's 58 other local publications and Web sites." About Sun-Times Media Sun-Times Media Group, Inc. (Pink Sheets: SUTMQ) -- http://www.thesuntimesgroup.com/-- (Pink Sheets: SUTM) owns media properties including the Chicago Sun-Times and Suntimes.com and 58 suburban newspaper titles and corresponding Web sites. 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. Sun-Times Media's investment banker is Rothschild Inc. and its estructuring advisor is Huron Consulting Group. 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. TAVERN ON THE GREEN: Can Remain Open in Christmas Through New Yr. ----------------------------------------------------------------- Glenn Collins at The New York Times reports that a federal judge said that Tavern on the Green will be able to remain open during the Christmas season and accept restaurant and party reservations through New Year's Eve. According to The NY Times, Tavern had threatened to lay off its more than 400 workers in December unless its landlord, the parks department, allowed it to remain past the expiration of its operating license at midnight on December 31. The NY Times states that the operators, the LeRoy family, said that they needed additional time to auction and remove fixtures, artwork and furnishings that are worth more than $8 million. Tavern on the Green LP is the operator of the 75-year-old restaurant in New York's Central Park. The Company filed for Chapter 11 on September 9, 2009 (Bankr. S.D.N.Y. Case No. 09- 15450). It listed assets and debts of as much as $50 million each. TLC VISION: Responds to FDA Warning Letters to LASIK Facilities --------------------------------------------------------------- TLCVision Corporation responded to a Food and Drug Administration announcement regarding warning letters issued to LASIK facilities. James B. Tiffany, President and Chief Operating Officer of TLCVision, commented, "Over the course of the last 4 months, six TLCVision refractive surgery centers were inspected by the FDA. This was a limited, directed inspection and assessment of the firm's compliance with statutory reporting requirements. We continue to seek clarification from the FDA on the recently issued warning letters. However, the FDA investigators, issued no objectionable or adverse findings at the centers in which we received their establishment inspection reports. One center was noted to need additional written procedures as outlined in a letter received from the FDA on August 20, 2009. On September 4, 2009, we responded to the FDA that we have already begun the process to enhance our existing reporting procedures in that center. Neither the inspection nor the observations from the inspection related to device safety or efficacy of the LASIK procedure. TLCVision's ongoing commitment to clinical services, quality assurance and patient outcomes remain unparalleled as the industry leader." The FDA on October 15 announced the launch of a collaborative study with the National Eye Institute and the U.S. Department of Defense to examine the potential impact on quality of life from Laser-Assisted In Situ Keratomileusis (LASIK), a surgical procedure that uses an eximer laser to permanently change the shape of the cornea. The goal of the LASIK Quality of Life Collaboration Project is to determine the percentage of patients with significant quality of life problems after LASIK surgery and identify predictors of these problems. Funded by the government agencies, the project is composed of three phases. The objective of Phase 1, which began in July 2009, is to design and implement a Web-based questionnaire to assess patient-reported outcomes and evaluate quality of life issues post-LASIK, some of which may relate to the safety of the lasers used in the LASIK procedure. Phase 2 will evaluate the quality of life and satisfaction following LASIK as reported by patients in a select, active duty population treated at the Navy Refractive Surgery Center. Phase 3 will be a national, multi-center clinical trial and will study the impact of the procedure on quality of life following LASIK in the general population. Patient enrollment in Phases 2 and 3 have yet to begin but plans are underway. Phase 3 is expected to end in 2012. The results of the project will help identify factors that can affect quality of life following LASIK and potentially reduce the risk of adverse effects that can impact the surgical outcome. If any of these factors are related to the safety or effectiveness of the lasers used in LASIK surgery, the FDA will evaluate whether any action is necessary. The project is part of the FDA's ongoing effort to better monitor and improve the safety and effectiveness of the lasers used in LASIK surgery. "This study will enhance our understanding of the risks of LASIK and could lead to a reduction in patients who experience adverse effects from the procedure," said Dr. Jeffrey Shuren, acting director of the FDA's Center for Devices and Radiological Health. The FDA also said it issued warning letters to 17 LASIK ambulatory surgical centers after inspections revealed inadequate adverse event reporting systems at all the centers. The inspections did not identify problems with the use of the LASIK devices at these facilities. Under legislation passed in 1990, user facilities, which include nursing homes, outpatient clinics and ambulatory surgical centers, must report device-related deaths to the FDA and to the device manufacturer. They also must report device-related serious injuries to the manufacturer or to the FDA if the manufacturer is not known. Requirements include having a written protocol for adverse event reporting. The FDA inspected ambulatory surgical facilities that perform LASIK over the past several months and additional inspections are pending. The FDA regulates ophthalmic lasers used in LASIK, including monitoring their continued safety and effectiveness by analyzing reports on their post-market use. "Many people in the U.S. undergo LASIK procedures," said Dr. Shuren. "Ambulatory surgical centers that perform LASIK must maintain a robust reporting system as required by law. Reporting adverse events to the FDA is critical to better understand the safety and effectiveness of ophthalmic lasers used in LASIK procedures and to enable the FDA to take appropriate actions where the lasers do not meet safety and effectiveness requirements." As reported by the Troubled Company Reporter, TLC Vision, effective as of October 1, 2009, secured from its lenders an extension to October 13, 2009, of the previously announced limited waiver with respect to its credit facility. The credit facility, dated June 21, 2007, amended as of February 28, 2008, March 31, 2009, June 5, 2009, June 30, 2009, and September 8, 2009, provides for an $85 million term loan and a $25 million revolving credit line. As of September 30, 2009, the amount outstanding under the credit facility was approximately US$101.1 million. The extension agreement and forbearance agreement is contained in the Limited Waiver, dated as of September 30, 2009, which, among other things, provides a limited waiver through October 13, 2009, of specified defaults and extends to October 14, 2009, the time for payment of certain principal, interest and other payments previously due, provided, however, that in the event that the Limited Waiver is executed by less than 100% of the lenders, the Limited Waiver provides that lenders will, until October 13, 2009, forbear from exercising their rights arising out of the non- payment of certain principal, interest and other payments previously due. The Limited Waiver provides that lenders holding a majority amount of the secured credit facility may, in their sole discretion, extend the waiver period to October 30, 2009. The Limited Waiver also provides for the Company to negotiate in good faith and use its best efforts to agree by October 26, 2009, to (i) documentation for additional debt financing acceptable to lenders representing a majority of the outstanding debt under the credit agreement, and (ii) documentation for an overall debt and/or equity restructuring acceptable to the credit agreement lenders under applicable law. About TLCVision Based in St. Louis, Missouri, TLC Vision Corporation (NASDAQ: TLCV) (TSX: TLC) -- http://www.tlcvision.com/-- is North America's premier eye care services company, providing eye doctors with the tools and technologies needed to deliver high-quality patient care. Through its centers' management, technology access service models, extensive optometric relationships, direct to consumer advertising and managed care contracting strength, TLCVision maintains leading positions in Refractive, Cataract and Eye Care markets. TOUSA INC: Creditors Restart Suit against Technical Olympic ----------------------------------------------------------- The official committee of unsecured creditors in Tousa Inc.'s cases, fresh off a fraudulent transfer victory over secured lenders, is restarting a separate lawsuit against the directors of Tousa's subsidiaries and Technical Olympic SA, the controlling shareholder when the faulty transactions took place. The lawsuit against the directors and Technical Olympic had been put on ice until 30 days after completion of the trial against the parent's secured lenders. The separate suit against Technical Olympic and the directors contends the defendants breached their fiduciary duties by requiring the subsidiaries to take on $500 million in debt that wasn't their liability. Citicorp, et al., Suit As reported by the TCR on Oct. 15, 2009, Judge John K. Olson of the U.S. Bankruptcy Court for the Southern District of Florida has held that the loans Citicorp North America, as administrative agent, and certain prepetition lenders extended to TOUSA Inc. and its affiliates barely six months before the Petition Date were fraudulent transfers. TOUSA, Inc. caused certain of its subsidiaries to borrow in July 2007 from certain lenders (i) a $200 million first lien term loan with Citicorp, as administrative agent under the parties' credit agreement, and (ii) a $300 million second lien term loan with Citicorp as administrative agent, as subsequently replaced by Wells Fargo Bank. To secure the Loans, the lenders were granted liens on substantially all of TOUSA's assets. The proceeds of the Loans were used to settle a litigation initiated by Senior Transeastern Lenders against TOUSA and its subsidiary, TOUSA Homes LP, that arose from the default on debt incurred to finance the Transeastern Joint Venture, a business venture that TOUSA undertook in 2005. Certain of TOUSA's affiliates, otherwise referred to as the "Conveying Subsidiaries," which were not defendants in the Transeastern litigation and were not liable to the entities that financed the Transeastern Joint Venture, nonetheless incurred liabilities and granted liens to secure the resolution of TOUSA Inc.'s liabilities as their parent company. In the Adversary Complaint the Committee initiated in July 2008 against Citicorp, Wells Fargo and the Senior Transeastern Lenders, the Committee sought (1) to avoid and recover $500 million in liens granted pursuant to the July 2007 Loan Transaction; (2) to recover $420 million paid in cash to prior lenders to other Debtors whose loans were paid out as part of the same loan transaction in which the challenged liens were granted; and (3) to avoid as preferential the grant of a security interest in a $207 million tax refund which was perfected less than 90 days before the Debtors' petitions were filed. Judge Olson conducted a trial on the Committee Action in July and August 2009. He issued his final findings and judgment on October 13, 2009. Under his final findings, Judge Olson acknowledged that in the July 2007 Loan Transaction, each Conveying Subsidiary incurred obligations to repay the First and Second Lien Term Loans and granted liens on their property to the First and Second Lien Lenders to secure those obligations under Section 548 of the Bankruptcy Code. If those obligations are apportioned among the TOUSA entities, $403 million in new obligations may be attributed to the Conveying Subsidiaries, Judge Olson noted. "The Conveying Subsidiaries received, at most, minimal value in the July 2007 Transaction," he said. Moreover, Judge Olson held that each of the Conveying Subsidiaries was insolvent before the July 2007 Transaction and each was rendered more deeply insolvent by the Transaction. He averred that the Committee has proven insolvency under the balance sheet test through: (i) the testimony of the Committee's real estate expert, Charles Hewlett, and the Committee's accounting expert, Kevin Clancy, that show that each Conveying Subsidiary's debts exceeded the fair value of its assets on July 31, 2007, before and after the July 31 Transaction; and (ii) the analysis of the Committee's expert on business valuation, William Derrough, which demonstrated that TOUSA was insolvent on a consolidated basis and that each of the Conveying Subsidiaries was insolvent as well. Judge Olson held that the defense of Citicorp and the other lenders that the "savings clauses" of the term loans reduce the obligations incurred and liens granted by the Conveying Subsidiaries to the extent necessary to prevent their insolvency is unpersuasive. He explained that "savings clauses" purport to amend liabilities and liens to make them "enforceable to the maximum extent" permitted by law. However, since the Conveying Subsidiaries were insolvent even before the July 2007 Transaction and received no value from that transaction, the liabilities and liens cannot be enforced at all, Judge Olson said. "Any liability imposed on a Conveying Subsidiary, and any lien securing that liability, would be avoidable under Section 548, and in this context, the savings clauses have no effect at all," he opined. Judge Olson further held that the Committee has proven that none of the Conveying Subsidiaries received reasonably equivalent value, whether directly or indirectly, in exchange for the obligations and transfers. The Court found that the First and Second Lien Lenders did not act in good faith and were grossly negligent. Evidence shows that the First and Second Lien Lenders and Citicorp had far more than sufficient notice of TOUSA's insolvency, based on objective, publicly available information, Judge Olson said. E-mails and testimony of key Citicorp personnel involved in the transaction also made clear that Citicorp had knowledge indicating that TOUSA was likely insolvent and the Conveying Subsidiaries would not receive reasonably equivalent value in the July 2007 Transaction. Despite this knowledge, Citicorp did not undertake any investigation at the solvency of any Conveying Subsidiary or the value that any Conveying Subsidiary would receive in the transaction, the Court noted. "Citicorp's investigation of the solvency of TOUSA on a consolidated basis was woefully lacking," Judge Olson commented. He added that evidence demonstrates that the First and Second Lien Lenders did not "take for value" and did not "give value to the debtor." In this light, the Court opined that the First and Second Lien Lenders are not entitled to preserve liens and obligations under Section 548(c). Judge Olson also opined that AlixPartners LLP's opinion regarding TOUSA's solvency was founded in methodologies that were seriously flawed and was contingent on a $2 million fee if AlixPartners opined that TOUSA was solvent. "Because AlixPartners relied upon TOUSA's unsupportable financial projections, AlixPartners' opinion that TOUSA was solvent as of July 31, 2007 is not credible." The Court further held that TOUSA's CEO Mr. Mon had a strong personal incentive to ensure that the July 2007 Transaction was consummated. TOUSA's Form 8-k filed on July 24, 2007, revealed that half of Mr. Mon's target incentive bonus of $4.5 million was contingent on the successful completion of the July 2007 Transaction. The Senior Transeastern Lenders are entities for whose benefits the July 2007 transfer was made. The 2007 Loans and the liens securing those Loans were undertaken to resolve the claims of the Transeastern Lenders against TOUSA, Inc. and TOUSA Homes LP under the Transeastern Settlement. All parties to the July 2007 Transaction understood that the Senior Transeastern Lenders would immediately receive more than $421 million of the loan proceeds. Against this backdrop, Judge Olson held, the Committee has established that it may recover from the Senior Transeastern Lenders the value of the liens granted to the First and Second Lien Lenders at the time of the transfer on July 31, 2007. The Senior Transeastern Lenders, the Court ruled, are not entitled to recoupment to reduce the recovery to which the Conveying Subsidiaries are entitled because those entities had and have no obligations or duties to the Senior Transeastern Lenders. Under the circumstances, Judge Olson opined that the payment to the Senior Transeastern Lenders was a fraudulent transfer under Section 548(a). "There can be no serious doubt that if the Conveying Subsidiaries had retained the borrowed funds, rather than transferring those funds to the Senior Transeastern Lenders, those funds would have been included within the Debtors' estates when the petition was filed, thus ensuring that those funds, along with other property of the Debtors, would be available to creditors," he elaborated. Thus, since the payment of the Senior Transeastern Lenders was a transfer avoidable pursuant to Section 548, Section 550(a)(1) permits the Conveying Subsidiaries to recover payments made to the Senior Transeastern Lenders, the Court held. As part of the July 2007 Transaction, the Debtors granted liens on "general intangibles" to the First and Second Lien Lenders. Similar liens were granted to the Revolver Lenders to secure loans under the Second Amended Revolver Agreement executed on July 31, 2007. The date on which the Debtors "acquired rights in" the federal income tax refund was January 1, 2008, immediately after completion of the 2007 tax year. Thus, Judge Olson noted, the transfer occurred within the 90-day preference period under Section 547(b)(4)(A), at a time when the Debtors were presumed to have been insolvent. He added that the transfer was made to or for the benefit of the First and Second Lien Lenders and the Revolver Lenders under Section 547(b)(1) on account of the First and Second Lien Term Loans and the Revolver Loans. Based on the Liquidation Analysis appended to the Debtors' November 12, 2008 Disclosure Statement, the net proceeds of a high recovery were estimated to be $348,967,000; net proceeds of a midpoint recovery were estimated to be $258,143,000; net proceeds of a low recovery were estimated to be $167,320,000. If the First Lien creditors had not obtained liens on the tax refund, they would have nearly $326 million in secured claims, but the Debtors' estates would have only $141 million to which their liens could attach -- assuming the highest of the three estimates of net recovery offered in the Liquidation Analysis, the Court pointed out. "This analysis makes clear that the liens on the tax refund, if not avoided, would enable the First Lien creditors to recover more than they would receive if (a) the case is a case under Chapter 7 of the Bankruptcy Code; (b) the transfer had not been made; and (c) creditor received payment of debt to the extent provided by the provisions of the Bankruptcy Code," Judge Olson said. "Thus, the Committee has satisfied the requirements for avoiding the liens on the tax refund pursuant to Section 547(b)," he averred. Thus, pursuant to Sections 544 and 548 and under applicable New York and Florida fraudulent transfer law, Judge Olson declared that these obligations are avoided and related claims are disallowed: -- All obligations of the Conveying Subsidiaries to the First and Second Lien Lenders arising from the July 2007 Transaction; -- All claims of the First and Second Lien Lenders asserted or assertable against the Conveying Subsidiaries; and -- All liens granted by the Conveying Subsidiaries to secure those obligations and claims. Pursuant to Section 550 and under applicable New York and Florida fraudulent transfer law, Judge Olson ordered: (1) the First and Second Lien Lenders to disgorge to the Conveying Subsidiaries' estates any and all principal, interest, costs, expenses and other fees paid to the First and Second Lien Lenders' asserted claims or obligations against the Conveying Subsidiaries' estates. All Disgorged Payments are to be wired into a Disgorgement Account on or before October 23, 2009; and (2) the Senior Transeastern Lenders to disgorge to the Conveying Subsidiaries' estates $403 million in principal amount, plus prejudgment interest, with those amounts to be wired into the Disgorgement Account on or before October 23, 2009. The Senior Transeastern Lenders are also directed to disgorge prejudgment interest on the Senior Transeastern Disgorged Funds at the rate of the 9% per year, simple interest, for the period between July 31, 2007 and October 13, 2009. The Senior Transeastern Disgorged Funds will be distributed first to the Conveying Subsidiaries on account of (i) transaction costs incurred in connection with the consummation of the July 2007 Transaction; (ii) the costs incurred by the Debtors and the Committee in connection with prosecuting the Committee Action, including fees and expenses paid to attorneys, advisors, and experts; and (iii) the diminution in the value of the liens between July 31, 2007 and the date of the judgment in the Committee Action, with any remaining funds to be distributed to the First and Second Lien Lenders. To permit estimation of the diminution in value of the liens between July 31, 2007 and October 13, 2009, Judge Olson directs the Debtors to produce on or before November 5, 2009, an accounting of the value of the remaining assets of the Conveying Subsidiaries that were subject to the avoided liens. The Senior Transeastern Lenders may file a proof of claim against TOUSA Inc. and TOUSA Homes L.P., provided that the proof of claim must be filed by November 13, 2009. If timely filed, the claim will be allowed or disallowed in connection with the Debtors' ongoing Chapter 11 cases. Pursuant to Section 547(b), Judge Olson ruled that all liens granted by the Conveying Subsidiaries, TOUSA Inc. and TOUSA Homes LP on the federal tax refund of $207.3 million are avoided. All funds paid to the First Lien Lenders from the tax refund will be disgorged to the Debtors, together with interest at the rate of 9% per year, simple interest, for the period between the date of payment and October 13, 2009. Judge Olson will conduct a status conference in the Committee Action on October 26, 2009. A full-text copy of Judge Olson's 182-page Findings of Fact and Conclusions of Law dated October 13, 2009, is available for free at http://bankrupt.com/misc/TOUSA_JudgeOlsonOct13Findings.pdf About Tousa Inc. Headquartered in Hollywood, Florida, TOUSA Inc. (Pink Sheets: TOUS) -- http://www.tousa.com/-- fka Technical Olympic U.S.A. Inc., dba Technical U.S.A., Inc., Engle Homes, Newmark Homes L.P., TOUSA Homes Inc. and Newmark Homes Corp. is a leading homebuilder in the United States, operating in various metropolitan markets in 10 states located in four major geographic regions: Florida, the Mid-Atlantic, Texas, and the West. The Debtor and its debtor-affiliates filed for separate Chapter 11 protection on January 29, 2008 (Bankr. S.D. Fla. Case No. 08- 10928). The Debtors have selected M. Natasha Labovitz, Esq., Brian S. Lennon, Esq., Richard M. Cieri, Esq., and Paul M. Basta, Esq., at Kirkland & Ellis LLP; and Paul Steven Singerman, Esq., at Berger Singerman, to represent them in their restructuring efforts. Lazard Freres & Co. LLC is the Debtors' investment banker. Ernst & Young LLP is the Debtors' independent auditor and tax services provider. Kurtzman Carson Consultants LLC acts as the Debtors' Notice, Claims & Balloting Agent. TOUSA's direct subsidiary, Beacon Hill at Mountain's Edge LLC dba Eagle Homes, filed for Chapter 11 Protection on July 30, 2008 (Bankr. S.D. Fla. Case No. 08-20746). It listed assets between $1 million and $10 million, and debts between $1 million and $10 million. The Official Committee of Unsecured Creditors hired Patricia A. Redmond, Esq., and the law firm Stearns Weaver Weissler Alhadeff & Sitterson, P.A., as its local counsel. TOUSA Inc.'s balance sheet at June 30, 2008, showed total assets of $1,734,422,756 and total liabilities of $2,300,053,979. Bankruptcy Creditors' Service, Inc., publishes TOUSA Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by TOUSA Inc. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TRICO MARINE: S&P Assigns Corporate Credit Rating at 'CCC' ---------------------------------------------------------- Standard & Poor's Ratings Services said that it assigned its 'CCC' corporate credit rating to oilfield services provider Trico Marine Services Inc. and its indirect foreign subsidiary Trico Supply AS. At the same time, Standard & Poor's placed these ratings on CreditWatch with developing implications. In addition, Standard & Poor's assigned Trico Shipping AS's proposed $400 million senior secured notes offering a proposed 'B-' issue-level rating and a '2' recovery rating, indicating expectations of meaningful (50%-70%) recovery in the event of default. Trico Marine plans to use the proceeds from the transaction to repay the debt of Trico Supply and its various subsidiaries. Standard & Poor's also assigned its 'CCC-' issue-level rating and '5' recovery rating to Trico Marine's existing $202.8 million 8.125% senior convertible notes and a 'CC' issue-level rating and '6' recovery rating to its existing $150 million 3% senior convertible debentures. In addition, Standard & Poor's placed its ratings on these convertible notes on CreditWatch with developing implications. "The ratings on Woodlands, Texas-based Trico Marine and its Norway-based subsidiary Trico Supply reflect the companies' position as oilfield services providers in a cyclical and highly competitive industry, S&P's expectations of generally weak industry conditions, the companies' very high debt leverage measures, and looming liquidity concerns," said Standard & Poor's credit analyst Paul Harvey. Given the interrelated nature of the relationship between Trico Marine and Trico Supply and the lack of ringfencing, S&P links the two corporate credit ratings together and assign Trico Supply the same corporate credit rating as Trico Marine. When ratings are on CreditWatch with developing implications, it means S&P could raise, lower, or affirm. If the company successfully completes its proposed $400 million senior notes offering and related transactions, S&P will raise the corporate credit ratings of Trico Marine and Trico Supply to 'CCC+' and the ratings of the $202.8 million and $150 million convertible bonds to 'CCC' and to 'CCC-', respectively. In the event the transaction is unsuccessful, S&P will lower the corporate credit ratings to 'CCC-', assign a negative outlook, and downgrade the convertibles to 'CC' and 'C', respectively. TRINITY CHRISTIAN SCHOOL: Files in Chapter 11 in West Virginia -------------------------------------------------------------- Trinity Christian School filed a Chapter 11 petition on Oct. 15 in Clarksburg, West Virginia (Bankr. N.D. W. Va. Case No. 09-02324). The Company listed assets of $3.5 million against debt totaling $26.5 million. The secured creditor is Fifth Third Bank, owed $8.8 million on the guarantee of a school bond. Trinity Christian School is located in Morgantown, West Virginia. The school has 330 students from kindergarten through 12th grade on a 37-acre campus, the Web site says. TRIPLE CROWN: Cancels Unsold Shares Issuable Under Incentive Plans ------------------------------------------------------------------ Triple Crown Media, Inc., has filed with the Securities and Exchange Commission Post-Effective Amendment No. 1 to the Registration Statement on Form S-8 (No. 333-131075) -- which became effective on January 17, 2006, pertaining to the registration of 1,000,000 shares of the Company's common stock issuable under the Triple Crown Media, Inc. 2005 Long-Term Incentive Plan, the Bull Run Corporation Amended and Restated 1994 Long Term Incentive Plan, and the Bull Run Corporation Non- Employees Directors' 1994 Stock Option Plan -- to terminate the effectiveness of the Registration Statement and to deregister all unsold shares of common stock of the Company, the sale of which was registered under the Registration Statement, as of October 16, 2009. About Triple Crown Triple Crown Media, Inc., derives revenue from its Newspaper Publishing operations. The Company's Newspaper Publishing operations derive revenue primarily from three sources: retail advertising, circulation and classified advertising. TCM's Newspaper Publishing operations' advertising revenues are primarily generated from local advertising. TCM sold its GrayLink Wireless segment on June 22, 2007. The Company sold its Host Collegiate Marketing segment and Host Association Management Services segment on November 15, 2007. TCM's sole remaining operating segment consists of its Newspaper Publishing business. This consists of the ownership and operation of six daily newspapers and one weekly newspaper with a total daily circulation as of June 30, 2008, of approximately 95,200 and a total Sunday circulation as of June 30, 2008, of approximately 131,850. Its newspapers are characterized by their focus on the coverage of local news and local sports. Triple Crown Media Inc., together with affiliates, filed for Chapter 11 on Sept. 14 (Bankr. D. Del. Case No. 09-13181). Attorneys at Morris, Nichols, Arsht & Tunnel, represent the Debtors in their restructuring effort. Triple Crown had assets of $36,431,000 against debts of $88,296,000 as of March 31, 2009. TROPICANA ENT: Adamar of NJ Proposes Claims Objection Protocol -------------------------------------------------------------- Adamar of New Jersey, Inc., doing business as Tropicana Casino and Resort, and its affiliate, Manchester Mall, Inc., ask the Court to establish uniform procedures for objecting to claims. As previously reported, on June 12, 2009, the Court entered a Sale Order, (i) approving a credit bid asset purchase agreement involving the New Jersey Debtors' assets, (ii) approving the sale of substantially all the New Jersey Debtors' assets, free and clear of all liens, claims, encumbrances and interests, and (iii) authorizing the assumption and assignment of executory contracts, unexpired leases and collective bargaining agreements related to the Asset Sale. In connection with the APA, the New Jersey Debtors' prepetition lenders have agreed to the Debtors' payment of certain enumerated claims. To foster the estimation of the dollar amount of the claims they are authorized to pay in connection with the closing of the sale, the New Jersey Debtors commenced a review of all non-general unsecured claims filed as of the Bar Date. In this light, the New Jersey Debtors believe that objections to certain improper claims will have to be made, according to Ilana Volkov, Esq., at Cole, Schotz, Meisel, Forman & Leonard, P.A., in Hackensack, New Jersey. Proposed Procedures The New Jersey Debtors propose these procedures to govern the process of objecting to disputed claims: (a) The New Jersey Debtors will periodically file omnibus objections and will supplement each Omnibus Objection with particularized notices of objection to the specific persons identified on each relevant proof of claim. For claims that have been transferred, a Notice will be provided only to the person or persons listed as being the owner of the clam on the New Jersey Debtors' claims register as of the date the objection is filed. (b) The Notices will include a copy of the relevant Omnibus Objection and will identify, among other things, (1) the particular claim or claims that are subject of the Omnibus Objection, (2) the basis for the objection, (3) the proposed treatment of the claim, and (4) notify the claimant of the steps that must be taken to contest the objection. The Notice will otherwise comply with the Bankruptcy Rules. (c) The deadline for filing any response to an Omnibus Objection and serving it on the New Jersey Debtors' counsel will be seven days before the return date of the applicable hearing. (d) As soon as practicable after the Response Deadline, the New Jersey Debtors will submit to the Court a letter enclosing a proposed order sustaining the objections to each claim for which a written response was not timely filed and served. An order may be entered by the Court without further hearing or notice. (e) Each contested claim to which a response to the Omnibus Objection was properly filed and served will constitute a separate contested matter. The New Jersey Debtors will be required to file and serve any reply at least two calendar days before the return of the applicable hearing. (f) The filing of a response or reply with respect to a claim will not delay the entry of an order sustaining objections to claims for which written responses were not timely filed and served. Ms. Volkov asserts that the New Jersey Debtors' use of Omnibus Objections to consolidate multiple objections to groups of claims into single pleadings will save the New Jersey Debtors' estates substantial administrative expenses, and will increase the efficiency within which the claims process would be administered. About Tropicana Entertainment Based in Crestview Hills, Kentucky, Tropicana Entertainment LLC -- http://www.tropicanacasinos.com/-- is an indirect subsidiary of Tropicana Casinos and Resorts. The Company is one of the largest privately-held gaming entertainment providers in the United States. Tropicana Entertainment owns eleven casino properties in eight distinct gaming markets with premier properties in Las Vegas, Nevada, and Atlantic City, New Jersey. Tropicana Entertainment LLC and its debtor-affiliates filed for Chapter 11 protection on May 5, 2008 (Bankr. D. Del. Case No. 08-10856). Kirkland & Ellis LLP and Mark D. Collins, Esq., at Richards Layton & Finger, represent the Debtors in their restructuring efforts. Their financial advisor is Lazard Ltd. Their notice, claims, and balloting agent is Kurtzman Carson Consultants LLC. Epiq Bankruptcy Solutions LLC is the Debtors' Web site administration agent. AlixPartners LLP is the Debtors' restructuring advisor. Stroock & Stroock & Lavan LLP and Morris Nichols Arsht & Tunnell LLP represent the Official Committee of Unsecured Creditors in this case. Capstone Advisory Group LLC is financial advisor to the Creditors' Committee. The OpCo Debtors, a group of Tropicana entities owning casinos and resorts in Atlantic City, New Jersey and Evansville, Indiana have emerged from bankruptcy pursuant to a reorganization plan. A group of Tropicana entities, known as the LandCo Debtors, which own Tropicana casino property in Las Vegas, have emerged from Chapter 11 via a separate Chapter 11 plan. On April 29, 2009, Adamar of New Jersey, Inc., doing business as Tropicana Casino and Resort, and its affiliate, Manchester Mall, Inc., filed for Chapter 11 (Bankr. D. N.J. Lead Case No. 09- 20711). Judge Judith H. Wizmur presides over the cases. Adamar and Manchester Mall or the New Jersey Debtors are both affiliates of Tropicana Entertainment LLC. Manchester Mall is a wholly owned subsidiary of Adamar that owns and operates certain real property utilized in the New Jersey Debtors' business operations. The New Jersey Debtors own and operate one of the largest, and one of the most established, destination casino resorts in Atlantic City, New Jersey, known as Tropicana Casino and Resort - Atlantic City, which ranks third in gaming positions among Atlantic City's 11 casino properties. The New Jersey Debtors initiated the Chapter 11 cases to effectuate a sale of substantially all their assets in accordance with a mandate issued by the New Jersey Casino Control Commission pursuant to the New Jersey Casino Control Act. Ilana Volkov, Esq., and Michael D. Sirota, Esq., at Cole, Schotz, Meisel, Forman & Leonard, in Hackensack, New Jersey, represent the New Jersey Debtors. Kurtzman Carson Consultants LLC acts as their claims and notice agent. Adamar disclosed $500 million to $1 billion both in total assets and debts in its petition. Manchester Mall disclosed $1 million to $10 million in total assets, and less than $50,000 in total debts in its petition. Bankruptcy Creditors' Service, Inc., publishes Tropicana Bankruptcy News. The newsletter tracks the chapter 11 restructuring proceedings commenced by Tropicana Entertainment LLC and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TROPICANA ENT: NJ Debtors Propose Revised Deal to Sell Assets ------------------------------------------------------------- Pursuant to Sections 105, 363 and 365 of the Bankruptcy Code, and Rules 2002, 6004, 6006, 7062, 9007 and 9014 of the Federal Rules of Bankruptcy Procedure, Adamar of New Jersey, Inc., doing business as Tropicana Casino and Resort, and its affiliate, Manchester Mall, Inc., ask the Court to approve an amended and restated version of the Agreement on the sale of substantially all of their assets, free and clear of all liens, claims, encumbrances, and interests. The New Jersey Debtors also seek the Court's authority to assume and assign certain executory contracts and unexpired leases related to the Asset Sale. As previously disclosed the New Jersey Debtors, Justice Gary S. Stein, the TE Debtors -- Aztar Corporation and Tropicana Entertainment, LLC -- Ramada New Jersey Holdings Corporation, Atlantic-Deauville, Inc., Adamar Garage Corporation, Ramada New Jersey, Inc., and Credit Suisse as the OpCo Agent entered into an Asset Purchase Agreement on April 29, 2009. The Court has approved the Original Agreement and the Original Sale Motion. However, shortly after the Original Agreement was approved, the steering committee of the OpCo Lenders requested that the Sellers -- Tropicana Entertainment, Ramada Holdings, Atlantic-Deauville, Adamar Garage, Ramada New Jersey, the New Jersey Debtors, and Justice Stein -- amend and restate the Original Agreement to enable the OpCo Lenders to effectuate a "G Reorganization" pursuant to Section 368(a)(1)(G) of the Internal Revenue Code, Michael D. Sirota, Esq., at Cole, Schotz, Meisel, Forman & Leonard, P.A., in Hackensack, New Jersey, relates. The OpCo Lenders are comprised of Carl Icahn and other investors. They already have control of the group of Tropicana entities owning casinos and resorts in Atlantic City, New Jersey and Evansville, Indiana. The primary benefit of a "G Reorganization" is that a business can be acquired with a historic tax basis rather than a tax basis determined by reference to the amount of a credit bid. A "G Reorganization" by definition is a transfer by a corporation of all or part of its assets to another corporation in a Title 11 or similar case; but only if, in pursuance of the reorganizational plan, stock or securities of the corporation to which the assets are transferred are distributed in a transaction which qualifies under Section 354, 355 or 356 of the Internal Revenue Code, Mr. Sirota explains. Amended Agreement Following extensive negotiations, the parties have agreed on the terms of an Amended and Restated Purchase Agreement. The OpCo Agent also advised the New Jersey Debtors that, upon the direction of "Required Lenders" and on behalf of the Secured Parties, it will designate Reorganized Tropicana; "Newco," an unspecified direct wholly owned subsidiary of Reorganized Tropicana; and "Newco Sub," an unspecified direct wholly owned subsidiary of Newco -- Specified Parties -- as the "Buyer" under the Original Agreement, according to Mr. Sirota. Rather than executing a joinder to the Original Agreement, the Specified Parties will be signing the Amended Agreement, he notes. Mr. Sirota informs the Court that the material modifications to the Original Agreement are: (a) The New Jersey Debtors will sell all their rights, title and interest in and to the Company Assets to Reorganized Tropicana which, in turn, will direct the New Jersey Debtors to transfer, assign, convey and deliver the Company Assets to Newco. As set forth in the Original Agreement and the Amended Agreement, the Non-Conservatorship Sellers will sell, transfer, assign, convey and deliver the remaining Acquired Assets to Newco Sub. The transfers of the Acquired Assets will be free and clear of Encumbrances, except for certain Permitted Encumbrances. (b) In exchange for the sale, transfer, assignment, conveyance and delivery of the Acquired Assets to the applicable Specified Party, each Seller will receive a specified number of shares of Reorganized Tropicana Stock. In turn, each Seller will sell, transfer and deliver the Reorganized Tropicana Stock to be received by the Seller to the Secured Parties, free and clear of all Encumbrances and adverse claims, in exchange for which the OpCo Agent, on behalf of the Secured Parties and at the direction of the Required Lenders, will surrender $200,000,000 of the principal amount of the obligations secured by the Original Collateral Agreement. (c) The Sellers are not obligated to pay Cure Amounts relating to Intercompany Obligations. A blacklined copy of the Amended Agreement is available for free at http://bankrupt.com/misc/TropiA_AmendedAPA100709.pdf About Tropicana Entertainment Based in Crestview Hills, Kentucky, Tropicana Entertainment LLC -- http://www.tropicanacasinos.com/-- is an indirect subsidiary of Tropicana Casinos and Resorts. The Company is one of the largest privately-held gaming entertainment providers in the United States. Tropicana Entertainment owns eleven casino properties in eight distinct gaming markets with premier properties in Las Vegas, Nevada, and Atlantic City, New Jersey. Tropicana Entertainment LLC and its debtor-affiliates filed for Chapter 11 protection on May 5, 2008 (Bankr. D. Del. Case No. 08-10856). Kirkland & Ellis LLP and Mark D. Collins, Esq., at Richards Layton & Finger, represent the Debtors in their restructuring efforts. Their financial advisor is Lazard Ltd. Their notice, claims, and balloting agent is Kurtzman Carson Consultants LLC. Epiq Bankruptcy Solutions LLC is the Debtors' Web site administration agent. AlixPartners LLP is the Debtors' restructuring advisor. Stroock & Stroock & Lavan LLP and Morris Nichols Arsht & Tunnell LLP represent the Official Committee of Unsecured Creditors in this case. Capstone Advisory Group LLC is financial advisor to the Creditors' Committee. The OpCo Debtors, a group of Tropicana entities owning casinos and resorts in Atlantic City, New Jersey and Evansville, Indiana have emerged from bankruptcy pursuant to a reorganization plan. A group of Tropicana entities, known as the LandCo Debtors, which own Tropicana casino property in Las Vegas, have emerged from Chapter 11 via a separate Chapter 11 plan. On April 29, 2009, Adamar of New Jersey, Inc., doing business as Tropicana Casino and Resort, and its affiliate, Manchester Mall, Inc., filed for Chapter 11 (Bankr. D. N.J. Lead Case No. 09- 20711). Judge Judith H. Wizmur presides over the cases. Adamar and Manchester Mall or the New Jersey Debtors are both affiliates of Tropicana Entertainment LLC. Manchester Mall is a wholly owned subsidiary of Adamar that owns and operates certain real property utilized in the New Jersey Debtors' business operations. The New Jersey Debtors own and operate one of the largest, and one of the most established, destination casino resorts in Atlantic City, New Jersey, known as Tropicana Casino and Resort - Atlantic City, which ranks third in gaming positions among Atlantic City's 11 casino properties. The New Jersey Debtors initiated the Chapter 11 cases to effectuate a sale of substantially all their assets in accordance with a mandate issued by the New Jersey Casino Control Commission pursuant to the New Jersey Casino Control Act. Ilana Volkov, Esq., and Michael D. Sirota, Esq., at Cole, Schotz, Meisel, Forman & Leonard, in Hackensack, New Jersey, represent the New Jersey Debtors. Kurtzman Carson Consultants LLC acts as their claims and notice agent. Adamar disclosed $500 million to $1 billion both in total assets and debts in its petition. Manchester Mall disclosed $1 million to $10 million in total assets, and less than $50,000 in total debts in its petition. Bankruptcy Creditors' Service, Inc., publishes Tropicana Bankruptcy News. The newsletter tracks the chapter 11 restructuring proceedings commenced by Tropicana Entertainment LLC and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TROPICANA ENT: NJ Debtors Propose Lift Stay for Insurance Payment ----------------------------------------------------------------- Adamar of New Jersey, Inc., doing business as Tropicana Casino and Resort, and its affiliate, Manchester Mall, Inc., ask the Court to lift the automatic stay, to the extent applicable, to permit Lexington Insurance Company to discharge its obligations under a directors and officers insurance policy to retired New Jersey Supreme Court Justice Gary S. Stein, conservator of Adamar of New Jersey, Inc., with respect to an action commenced by William and Caroline Edwards against Adamar, Justice Stein, Tama Hughes, Mark Giannantonio, the New Jersey Casino Control Commission, and Linda Kassekert in the Superior Court of New Jersey, Law Division - Atlantic County, captioned "Edwards v. Adamar, et al.," Docket No. ATL-L-001474/09. The Edwards State Court Action alleges a total of 24 counts against the parties based on charges, including contract, implied contract, negligence, tort, breach of fiduciary duty, and violations of New Jersey law regarding the requirement that an independent audit committee oversee casino operations. The Edwardses seek compensatory and punitive damages, injunctive relief, and costs and attorneys' fees under the State Court Action. The Court, on July 23, 2009, entered an order preliminary enjoining the Edwardses from proceeding in the State Court Action until the earlier of the closing of the New Jersey Debtors' Section 363 sale of assets or October 31, 2009. Effective as of December 12, 2007, Adamar purchase a D&O Policy under which Justice Stein is an "Insured Person." Lexington has advised Justice Stein that the claim he made under the D&O Policy with respect to the Edwards State Court Action is covered under that Policy. However, Lexington has requested that the New Jersey Debtors obtain a Court order confirming that its advancement and payment of defense costs as well as any damages, settlements, or judgments entered in the Edwards State Court Action does not violate the automatic stay, to the extent applicable, Ilana Volkov, Esq., at Cole, Schotz, Meisel, Forman & Leonard, P.A., in Hackensack, New Jersey, relates. Ms. Volkov adds that since the D&O Policy only provides coverage to Justice Stein, proceeds of the Policy are not property of the estate under Section 541 of the Bankruptcy Code because the New Jersey Debtors have no interest in them. To the extent the Preliminary Injunction is not extended beyond October 31, 2009, thereby requiring Justice Stein and the other parties to respond to the State Court Action, Justice Stein will proceed with his rights under the D&O Policy, including with respect to the payment of Defense Costs, Ms. Volkov says. About Tropicana Entertainment Based in Crestview Hills, Kentucky, Tropicana Entertainment LLC -- http://www.tropicanacasinos.com/-- is an indirect subsidiary of Tropicana Casinos and Resorts. The Company is one of the largest privately-held gaming entertainment providers in the United States. Tropicana Entertainment owns eleven casino properties in eight distinct gaming markets with premier properties in Las Vegas, Nevada, and Atlantic City, New Jersey. Tropicana Entertainment LLC and its debtor-affiliates filed for Chapter 11 protection on May 5, 2008 (Bankr. D. Del. Case No. 08-10856). Kirkland & Ellis LLP and Mark D. Collins, Esq., at Richards Layton & Finger, represent the Debtors in their restructuring efforts. Their financial advisor is Lazard Ltd. Their notice, claims, and balloting agent is Kurtzman Carson Consultants LLC. Epiq Bankruptcy Solutions LLC is the Debtors' Web site administration agent. AlixPartners LLP is the Debtors' restructuring advisor. Stroock & Stroock & Lavan LLP and Morris Nichols Arsht & Tunnell LLP represent the Official Committee of Unsecured Creditors in this case. Capstone Advisory Group LLC is financial advisor to the Creditors' Committee. The OpCo Debtors, a group of Tropicana entities owning casinos and resorts in Atlantic City, New Jersey and Evansville, Indiana have emerged from bankruptcy pursuant to a reorganization plan. A group of Tropicana entities, known as the LandCo Debtors, which own Tropicana casino property in Las Vegas, have emerged from Chapter 11 via a separate Chapter 11 plan. On April 29, 2009, Adamar of New Jersey, Inc., doing business as Tropicana Casino and Resort, and its affiliate, Manchester Mall, Inc., filed for Chapter 11 (Bankr. D. N.J. Lead Case No. 09- 20711). Judge Judith H. Wizmur presides over the cases. Adamar and Manchester Mall or the New Jersey Debtors are both affiliates of Tropicana Entertainment LLC. Manchester Mall is a wholly owned subsidiary of Adamar that owns and operates certain real property utilized in the New Jersey Debtors' business operations. The New Jersey Debtors own and operate one of the largest, and one of the most established, destination casino resorts in Atlantic City, New Jersey, known as Tropicana Casino and Resort - Atlantic City, which ranks third in gaming positions among Atlantic City's 11 casino properties. The New Jersey Debtors initiated the Chapter 11 cases to effectuate a sale of substantially all their assets in accordance with a mandate issued by the New Jersey Casino Control Commission pursuant to the New Jersey Casino Control Act. Ilana Volkov, Esq., and Michael D. Sirota, Esq., at Cole, Schotz, Meisel, Forman & Leonard, in Hackensack, New Jersey, represent the New Jersey Debtors. Kurtzman Carson Consultants LLC acts as their claims and notice agent. Adamar disclosed $500 million to $1 billion both in total assets and debts in its petition. Manchester Mall disclosed $1 million to $10 million in total assets, and less than $50,000 in total debts in its petition. Bankruptcy Creditors' Service, Inc., publishes Tropicana Bankruptcy News. The newsletter tracks the chapter 11 restructuring proceedings commenced by Tropicana Entertainment LLC and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) UAL CORP: May Be Fined $3.8 Mil. for Maintenance Violations ----------------------------------------------------------- The Federal Aviation Administration disclosed in a statement dated October 14, 2009, that it is proposing a $3.8 million civil penalty against United Air Lines, Inc. for allegedly operating one of its Boeing 737 aircraft on more than 200 flights after the carrier had violated its own maintenance procedures on one of the plane's engines. On April 28, 2008, a United 737 returned to Denver after shutting down an engine due to low oil pressure indications. During teardown of the engine a week later, United mechanics found that two shop towels, instead of required protective caps, had been used to cover openings in the oil sump area when maintenance was done in December 2007. As a result of United's failure to follow its maintenance procedures, between February 10 and April 28, 2008 it flew the aircraft on more than 200 revenue flights when it was not in an airworthy condition. United's maintenance procedures specifically require use of protective caps or covers on all components that could be adversely affected by entry of foreign materials. United has 30 days from the receipt of the civil penalty letter to respond to the FAA. About UAL Corp. Based in Chicago, Illinois, UAL Corporation (NASDAQ: UAUA) -- http://www.united.com/-- is the holding company for United Airlines, Inc. United Airlines is the world's second largest air carrier. The airline flies to Brazil, Korea and Germany. The Company filed for Chapter 11 protection on December 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191). James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and Steven R. Kotarba, Esq., at Kirkland & Ellis, represented the Debtors in their restructuring efforts. Fruman Jacobson, Esq., at Sonnenschein Nath & Rosenthal LLP represented the Official Committee of Unsecured Creditors before the Committee was dissolved when the Debtors emerged from bankruptcy. Judge Eugene R. Wedoff confirmed the Debtors' Second Amended Plan on January 20, 2006. The company emerged from bankruptcy protection on February 1, 2006. (United Airlines Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) * * * UAL and United both carry a 'CCC' issuer default rating from Fitch Ratings. UAL carries a 'B-'' on 'watch negative', corporate credit rating from Standard & Poor's Ratings Services UAL CORP: Settles With Los Angeles on Revenue Bonds --------------------------------------------------- United Air Lines, Inc., asks the Court to approve a settlement agreement it entered into with the city of Los Angeles, acting by and through the Board of Airport Commissioners of its Department of Airports, and UMB Bank, N.A., as successor trustee for a $25,000,000 in remaining principal outstanding Adjustable-Rate Facilities Lease Refunding Revenue Bonds, issue of 1984 and $34,390,000 in remaining principal outstanding 6.785% Facilities Lease Refunding Revenue Bonds, issue of 1992. The Regional Airports Improvement Corporation and Crocker National Bank as precedessor trustee to UMB Bank entered into indentures regarding the Bonds in 1982, 1984 and 1992. United had obligations to repay the Bonds to UMB Bank, which represents holders of the LAX Bonds. United and RAIC also entered into a partial assignment and a facilities sublease involving portions of a Lease between the City and United covering termination facilities at Terminals 7 and 8 at Los Angeles International Airport. UMB Bank was given a security interest in the portion of the Terminal Lease covered by the Partial Assignment and Facilities Sublease. In November 2002, United and U.S. Bank, N.A., as indenture trustee and predecessor to UMB Bank, entered into a Prepaid Capital Lease Rental Credit Escrow Agreement, wherein a trust fund was created for the benefit of the Holders of the Bonds. The City paid $19,852,109 into the Escrow Fund. As of October 1, 2009, the total amount of cash in the Escrow Fund was $22,227,464. UMB Bank has asserted various claims against United individually and on behalf of the holders of the LAX Bond. RAIC has asserted various claims against United, including its rights to receive Additional Rent, and has assigned its claims to UMB Bank. United has asserted various claims against UMB Bank. The City filed an adversary action No. 06-A-698 after it was denied leave to intervene in the preference action in adversary case no. 05-A- 1884 to preserve its rights vis-a-vis the Escrow Fund if United succeeded in avoiding or undoing the escrow. In May 2009, the United States Court of Appeals for the Seventh Circuit held that UMB Bank's claim for the $59,390,000 principal sum of the LAX Bonds was fully secured. The central remaining disputes concerning the LAX Bond Claims are UMB Bank's claims for postpetition and post-Effective Date interest on its allowed secured claim, pending before the United States Bankruptcy Court for the Northern District of Illinois on remand from the Seventh Circuit's reversal of the Bankruptcy Court's decision with respect to the valuation of UMB Bank's security interest in a portion of the Terminal Lease. Thus, to resolve those disputes, United, the City, and UMB Bank engaged in arm's-length negotiations and entered into the Settlement Agreement. The salient terms of the Settlement Agreement are: * United and the City have agreed to provide to UMB Bank, in full and final satisfaction of United's obligations to UMB Bank on account of the LAX Bond Claims, and in exchange for a full and complete release of all of United's obligations to UMB Bank, the RAIC, the City and any holders of LAX Bonds under the Debtors' Second Amended Joint Plan of Reorganization or related to the LAX Bonds or LAX Bond Claims, this consideration: -- United will make a cash payment equal to the liquidation price obtained from the liquidation of 579,348 common shares of UAL Corp. 's stock reserved for UMB Bank's unsecured claims for the benefit of the holders of LAX Bonds; -- when the order approving the Settlement Order becomes final, United and the City will be deemed to have released all of their claims against or related to the Escrow Fund and the Escrow Agreement, and the amounts in the Escrow Fund will be released to UMB Bank for application to the payment of principal, interest and UMB Bank's expenses related to the Bonds in accordance with the Indentures; and -- after entry of the Settlement Agreement Order, and final approval of the Board of Airport Commissioners and the Los Angeles City Council of an Amended and Restated Terminal Lease between the City and United, the City will make a cash payment of (x) $75,000,000, minus (y) the United Payment, and minus (z) the Escrow Payment, up to a maximum City Payment of $52,732,724, and the City Payment will not be less than an amount sufficient to ensure that UMB Bank has received a total of $75,000,000. * As additional consideration for the City Payment, United has agreed to enter into the Amended and Restated Terminal Lease, which will alter United's and the City's rights and obligations with respect to United's use of certain portions of Los Angeles International Airport. Micah E. Marcus, Esq., at Kirkland & Ellis LLP, in Chicago, Illinois, asserts that by entering into the Settlement Agreement, United will be relieved of a prospective obligation to the Holders of the Bonds exceeding $94,000,000, including claims for principal debt, fees and expenses, postpetition and post- effective date interest, and other issues. While United disputes UMB Bank's entitlement to all of its asserted claims, United's probability of success in unnecessary and protracted litigation is uncertain, he points out. Litigation over those issues would only be counterproductive, he adds. In light of the potential costs and expenses of the litigation, as well as the claims alleged by UMB Bank, the Settlement Agreement is reasonable, he maintains. The Court will consider the Settlement Agreement Motion on November 10, 2009. Objections are due November 3. About UAL Corp. Based in Chicago, Illinois, UAL Corporation (NASDAQ: UAUA) -- http://www.united.com/-- is the holding company for United Airlines, Inc. United Airlines is the world's second largest air carrier. The airline flies to Brazil, Korea and Germany. The Company filed for Chapter 11 protection on December 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191). James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and Steven R. Kotarba, Esq., at Kirkland & Ellis, represented the Debtors in their restructuring efforts. Fruman Jacobson, Esq., at Sonnenschein Nath & Rosenthal LLP represented the Official Committee of Unsecured Creditors before the Committee was dissolved when the Debtors emerged from bankruptcy. Judge Eugene R. Wedoff confirmed the Debtors' Second Amended Plan on January 20, 2006. The company emerged from bankruptcy protection on February 1, 2006. (United Airlines Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) * * * UAL and United both carry a 'CCC' issuer default rating from Fitch Ratings. UAL carries a 'B-'' on 'watch negative', corporate credit rating from Standard & Poor's Ratings Services UAL CORP: Will Release Third Quarter 2009 Results Today ------------------------------------------------------- UAL Corporation (Nasdaq: UAUA), the holding company whose primary subsidiary is United Airlines, announced that the company will release its third quarter 2009 financial results on Oct. 20, 2009, and hold its financial conference call that day at 2:00 p.m. EDT. A live, listen-only webcast will be available on the Investor Relations section of united.com (http://www.united.com/ir). The webcast will be archived on the website until the release of the company's fourth quarter 2009 financial results. About UAL Corp. Based in Chicago, Illinois, UAL Corporation (NASDAQ: UAUA) -- http://www.united.com/-- is the holding company for United Airlines, Inc. United Airlines is the world's second largest air carrier. The airline flies to Brazil, Korea and Germany. The Company filed for Chapter 11 protection on December 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191). James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and Steven R. Kotarba, Esq., at Kirkland & Ellis, represented the Debtors in their restructuring efforts. Fruman Jacobson, Esq., at Sonnenschein Nath & Rosenthal LLP represented the Official Committee of Unsecured Creditors before the Committee was dissolved when the Debtors emerged from bankruptcy. Judge Eugene R. Wedoff confirmed the Debtors' Second Amended Plan on January 20, 2006. The company emerged from bankruptcy protection on February 1, 2006. (United Airlines Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) * * * UAL and United both carry a 'CCC' issuer default rating from Fitch Ratings. UAL carries a 'B-'' on 'watch negative', corporate credit rating from Standard & Poor's Ratings Services VELOCITY EXPRESS: Wants to Hire PWC as Financial Advisor -------------------------------------------------------- Velocity Express Corporation and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Delaware for permission to employ PricewaterhouseCooper LLP as their financial advisor: The firm has agreed to provide: a) advice and assistance with management's development of revised cash flow projections and business restructuring plans, including related financial forecasts and perform sensitivity analyses on the Debtors forecasts and assumptions; b) advice and analyses relating to any proposed asset sales and other proposed transactions; c) advice and assistance to management in its negotiations with lenders regarding DIP and exit financing facilities; d) investigate and report of the facts regarding Velocity pre- petition acts, conducts, assets and liabilities, including preference and fraudulent conveyance analysis; and e) advice and assistance on improvements to Velocity project management of the "working group" professionals that are assisting Velocity in the reorganization process or that are working for other stakeholders to improve coordination of their effort and individual work product to be consistent with the Velocity overall restructuring goals. The firm's standard hourly rates are: Partners/Managing Directors $650-$780 Director/Manager $450-$550 Senior Associate/Associate $250-$350 Paraprofessional Staff $200 The Debtors assure the Court that the firm is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. 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. VIRGIN MEDIA: Seeks Amendments to Senior Facilities Agreement ------------------------------------------------------------- Virgin Media Inc. on October 16 said that it is seeking the consent of its senior lenders to make certain amendments to its senior facilities agreement, under which the principal amount of outstanding debt is GBP3.1 billion. These amendments will provide Virgin Media with additional financial flexibility and further strengthen its capital structure. The proposed amendments will support the refinancing of the existing senior bank debt over time by facilitating the reduction of the principal outstanding amount of senior bank debt to be refinanced. The principal aim of the proposed amendments to Virgin Media's senior facilities agreement is to permit the issuance of senior secured bonds which rank on a pari passu basis with the existing senior bank facilities, in order to refinance part of the existing senior bank facilities and diversify the sources of funding available to Virgin Media. Virgin Media's top ten relationship banks have unanimously confirmed their support for the proposed amendments. Neil Berkett, Chief Executive Officer of Virgin Media, said, "The proactive management of our capital structure has been reflected by the continued market confidence in our business. The amendments to our senior facilities will further enhance our financial flexibility and allow management to focus on enhancing our operations while continuing to grow the business and generate sustained cash flow." The proposed amendments require the consent of two-thirds of all lenders under the senior facilities agreement. The deadline for lenders to respond to the amendment request is October 30, 2009. Virgin Media propose to pay a consent fee of 25 bps to each lender that provides its consent to the proposed amendments. About Virgin Media Headquartered in London, England, Virgin Media Inc. -- http://www.virginmedia.com/-- is a United Kingdom-based entertainment and communications business. Virgin Media is a residential broadband and mobile virtual network operator, and a provider in the United Kingdom of pay television and fixed-line telephone services. Virgin Media manages its business through three segments: Cable, Mobile and Content. The Cable segment includes the distribution of television programming over the Company's cable network, and the provision of broadband and fixed- line telephone services to consumers, businesses and public sector organizations. The Mobile segment includes the provision of mobile telephone services under the name Virgin Mobile to consumers over cellular networks owned by third parties. The Company's Content segment includes the operations of its United Kingdom television channels, such as Virgin1, Living and Bravo's portfolio of retail television channels. In April 2009, Virgin Media Inc. announced that AURELIUS AG has acquired sit-up Ltd. VITESSE SEMICONDUCTOR: Lender Talks Go On; Forbearance Extended --------------------------------------------------------------- Vitesse Semiconductor Corporation has extended the date of the forbearance agreements with the holders of more than 98.8% of its 1.5% Convertible Subordinated Debentures due 2024 and with the holder of Vitesse's $30.0 million senior secured loan. The forbearance agreements extend the time for Vitesse to negotiate a restructuring of its indebtedness. Under the terms of the forbearance agreements, the holders of more than 98.8% of the 2024 Debentures and the lenders for the senior secured loan have agreed to forbear from pursuing any remedies with respect to the collection of the 2024 Debentures or the senior secured loan until 12:00 pm (EDT) on October 16, 2009. Vitesse and the holders of the 2024 Debentures and the lenders of the senior secured loan are actively negotiating the terms of a potential restructuring arrangement of the 2024 Debentures and the senior secured loan with the objective of reaching agreement by the end of the forbearance period. Vitesse has agreed to pay the forbearing holders of the 2024 Debentures interest at the annual rate of 15.0% for the period from October 1, 2009, to the end of the forbearance period, subject to the right to have the forbearance interest waived under certain conditions. Any restructuring arrangement of Vitesse's 2024 Debentures and senior secured loan is subject to negotiation and execution of definitive agreements. Until the definitive agreements are negotiated in their entirety and executed, there can be no assurance that any debt restructuring will be completed by the end of the forbearance period or at all. In the event that Vitesse is not able to successfully negotiate and complete a debt restructuring, Vitesse intends to explore all other restructuring and reorganization alternatives. The Forbearing Debenture Holders include Whitebox Advisors, LLC, AQR Absolute Return Master Account, L.P., CNH Master Account, L.P., Aristeia International Limited, Aristeia Partners, L.P., Linden Capital L.P., Empyrean Capital Fund, LP, Empyrean Capital Overseas Fund, LTD, and ABN AMRO Bank N.V. Pursuant to the Forbearance Extension Agreements, the Forbearing Debenture Holders agreed to refrain from enforcing their rights and remedies under the debentures and the Indenture governing these convertible debentures, dated as of September 22, 2004, between Vitesse and U.S. Bank National Association for the duration of the extended forbearance period, which runs from October 9, 2009, through 12:00 noon (EDT) on October 16, 2009. Pursuant to the Indenture, the Company has issued 2024 Notes in principal amount of $96,700,000. The extended forbearance period will end earlier if the Company fails to comply with its covenants in the forbearance agreements or if the Company commences voluntary bankruptcy, insolvency, reorganization or other similar proceedings or any similar non- voluntary case or proceeding regarding the Company is commenced. Second Forbearance Agreement Effective October 9, the Company entered into a second forbearance agreement with Whitebox VSC, Ltd., as agent under the Loan Agreement among the Company, the agent and the lenders from time to time parties thereto dated as of August 23, 2007. Pursuant to the Second Forbearance Agreement, the lenders of the senior secured loan pursuant to the Loan Agreement agree to refrain from enforcing their rights and remedies under the Loan Agreement for the duration of a second forbearance period, which runs from October 9, 2009, through 12:00 noon (EST) on October 16, 2009. The forbearance period will end earlier if the extended forbearance period applicable to the Forbearing Debenture Holders ends or if the Company fails to comply with its covenants in the forbearance agreement or if the Company commences voluntary bankruptcy, insolvency, reorganization or other similar proceedings or any similar non-voluntary case or proceeding regarding the Company is commenced. About Vitesse Semiconductor Vitesse Semiconductor Corporation (Pink Sheets: VTSS) -- http://www.vitesse.com/-- designs, develops and markets a diverse portfolio of high-performance, cost-competitive semiconductor solutions for Carrier and Enterprise networks worldwide. Engineering excellence and dedicated customer service distinguish Vitesse as an industry leader in Gigabit Ethernet, Ethernet-over- SONET, Optical Transport, and other applications. Additional company and product information is available at Vitesse is a registered trademark in the United States and/or other jurisdictions of Vitesse Semiconductor Corporation. All other trademarks or registered trademarks mentioned herein are the property of their respective holders. Vitesse had total assets of $107,636,000 against total debts of $160,101,000 as of June 30, 2009. VITESSE SEMICONDUCTOR: Reinstates Execs' Annual Base Salaries ------------------------------------------------------------- Vitesse Semiconductor Corporation recalls that in February 2009, Christopher Gardner, the Company's Chief Executive Officer, agreed to a temporary 20% reduction in his base salary. The Company also entered into agreements with Richard Yonker, the Company's Chief Financial Officer, Martin Nuss, the Company Chief Technical Officer, and Michael Green, the Company's Vice President, General Counsel and Secretary, for temporary 10% reductions in their base salaries. These temporary salary reductions were agreed to as part of the Company's expense reduction initiative and were contemporaneous with a temporary reduction of salaries for all employees through the end of fiscal year 2009, ended September 30, 2009. Vitesse Semiconductor says on October 1, 2009, the salaries of the Company's employees other than Messrs. Gardner, Yonker, Nuss and Green were reinstated to the same levels as in effect prior to the reduction. On October 12, 2009, the Compensation Committee of the Company's Board of Directors reinstated the annual base salaries of Messrs. Gardner, Yonker, Nuss and Green to the same level as in effect prior to the reduction. The reinstatement will be effective on a retroactive basis to October 1, 2009. Following the reinstatement, the annual base salary for each of the executive officers will be: Reinstated Annual Name and Position Base Salary ----------------- ----------------- Christopher Gardner, $350,000 Chief Executive Officer Richard Yonker, $275,000 Chief Financial Officer Martin Nuss, $220,000 Chief Technical Officer Michael Green, Vice President, $220,000 General Counsel and Secretary About Vitesse Semiconductor Vitesse Semiconductor Corporation (Pink Sheets: VTSS) -- http://www.vitesse.com/-- designs, develops and markets a diverse portfolio of high-performance, cost-competitive semiconductor solutions for Carrier and Enterprise networks worldwide. Engineering excellence and dedicated customer service distinguish Vitesse as an industry leader in Gigabit Ethernet, Ethernet-over- SONET, Optical Transport, and other applications. Vitesse had total assets of $107,636,000 against total debts of $160,101,000 as of June 30, 2009. WATERFORD GAMING: $200 Mil. Note Issues Won't Move Moody's Rating ----------------------------------------------------------------- Moody's Investors Service said Waterford Gaming, LLC.'s and Waterford Gaming Finance Corp.'s (co-issuer) ratings and negative outlook are not affected by Mohegan Tribal Gaming Authority's announcement that it plans to issue $200 million of second lien notes due 2017. However, upon closing of this transaction and the completion of the amendment to the leverage covenants in MTGA's bank loan agreement, Waterford's ratings outlook could return to stable. Moody's last rating action for Waterford occurred on May 1, 2009, when its corporate family rating and probability of default rating were downgraded to Caa2 and Caa1, respectively. Waterford is a special purpose company formed solely for the purpose of holding a 50% partnership interest, as a general partner, in TCA, a Connecticut general partnership and the manager (until January 1, 2000) and developer of the Mohegan Sun casino located in Uncasville, CT. The Mohegan Sun casino is owned and operated by MTGA. WCI COMMUNITIES: Court OKs Sale of Singer Island Resort to Urgo --------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware authorized WCI Communities, Inc., and its debtor-affiliates to sell its Resort at Singer Island in Palm Beach County, Florida, to Urgo Hotels pursuant to Section 363 of the Bankruptcy Code. Urgo agreed to purchase (i) a mixed-used building which included a hotel, a hotel condominium, a residential condominium, a spa and a restaurant, and certain personal property; and (ii) the units, free and clear of liens, claims and encumbrances and interests. Pursuant to the terms of the purchase agreement, Urgo will purchase the property in its "as is" condition for $7.1 million. The closing will take place on the later of (i) Oct. 30, 2009, or (ii) the first business day that is 11 days after 9a) receipt of the Bankruptcy Court Approval for the transactions and (b) approval of the agreements by the seller's board of directors, commencing at 12:00 p.m. at the offices of the seller in Bonita Springs or the offices of Escrow agent in Miami, Florida or via overnight delivery. About WCI Communities Headquartered in Bonita Springs, Florida, WCI Communities, Inc. (Pink Sheets: WCIMQ) -- http://www.wcicommunities.com/-- is a fully integrated homebuilding and real estate services company with more than 50 years' experience in the design, construction and operation of leisure-oriented, amenity rich master-planned communities. It has operations in Florida, New York, New Jersey, Connecticut, Virginia and Maryland. The Company directly employs approximately 1,170 people, as well as approximately 1,800 sales representatives as independent contractors. The Company and 126 of its affiliates filed for Chapter 11 protection on August 4, 2008 (Bankr. D. Del. Lead Case No. 08-11643 through 08-11770). On July 1, 2009, debtor-affiliates WCI 2009 Corporation, WCI 2009 Management, LLC and WCI 2009 Asset Holding, LLC filed separate Chapter 11 petitions (Case Nos. from 09-12269 to 09-12271). Thomas E. Lauria, Esq., Frank L. Eaton, Esq., and Linda M. Leali, Esq., at White & Case LLP, in Miami, Florida, represent the Debtors as counsel. Eric Michael Sutty, Esq., and Jeffrey M. Schlerf, Esq., at Fox Rothschild LLP, represent the Debtors as Delaware counsel. Lazard Freres & Co. LLC is the Debtors' financial advisor. Epiq Bankruptcy Solutions LLC is the claims and notice agent for the Debtors. The U.S. Trustee for Region 3 appointed five creditors to serve on an official committee of unsecured creditors. Daniel H. Golden, Esq., Lisa Beckerman, Esq., and Philip C. Dublin, Esq., at Akin Gump Strauss Hauer & Feld LLP; and Laura Davis Jones, Esq., Michael R. Seidl, Esq., and Timothy P. Cairns, Esq., at Pachulski Stang Ziehl & Jones LLP, represent the committee in these cases. When the Debtors filed for protection from their creditors, they listed total assets of $2,178,179,000 and total debts of $1,915,034,000. WL Homes: Hit with WARN Class Action by Ex-Worker ------------------------------------------------- Law360 reports that a former employee of a subsidiary of WL Homes LLC has filed a putative class action alleging that about 100 employees were fired without the 60-day notification required by federal and state law. WL Homes and five of its affiliates filed for Chapter 11 protection on February 19, 2009 (Bankr. D. Del. Lead Case No. 09- 10571). Laura Davis Jones, Esq., and Timothy P. Cairns, Esq., at Pachulski Stang Ziehl & Jones LLP, represent the Debtors' in their restructuring efforts. Ashby & Geddes represents the Official Committee of Unsecured Creditors. In its bankruptcy petition, WL Homes listed assets of more than $1 billion, and debts between $500 million and $1 billion. As reported in the TCR on June 10, 2009, the Bankruptcy Court converted WL Homes LLC and its debtor affiliates' Chapter 11 cases to cases under Chapter 7 liquidation, at the request of the official committee of unsecured creditors. WOLVERINE TUBE: Alpine Offers to Sell Stake to Plainfield, Alkest ----------------------------------------------------------------- The Alpine Group, Inc., discloses that on October 14, 2009, it irrevocably offered to sell to Plainfield and Alkest up to 927,000 shares of Wolverine Tube, Inc. Common Stock at an offer price of $0.05 per share, all cash. Alpine beneficially owns 64,024,329 shares or roughly 62.7% of Wolverine Tube Common Stock. Pursuant to a Stockholders Agreement, the offerees may accept such offer within five days, failing which Alpine will be free for a period of 30 days thereafter to sell the offered Common Stock at a price and upon other terms and conditions no more favorable than those offered to Plainfield and Alkest. To the extent that Plainfield and Alkest decline to accept the offer, Alpine intends to sell or otherwise dispose of the Common Stock in connection with its 2009 tax planning. Alpine also reports that on October 18, 2009 and August 16, 2009, Alpine Stock Options equal to roughly 108,063 and 108,060 shares of Common Stock, respectively, vested and became exercisable by Alpine. Pursuant to a voting agreement among the Company and the Purchasers entered into at the Closing and amended at the time of the Series B Closing and pursuant to the terms of the Series A Preferred Stock, for so long as any of the Company's 10-1/2% Senior Notes due 2009 are outstanding, neither Alpine or Plainfield (together with any other person with whom that Purchaser would be considered a "person" -- as that term is used in Sections 13(d) and 14(d) of the Exchange Act -- with respect to the Series A Preferred Stock, the Series B Preferred Stock or the Common Stock, which may include Alkest) were permitted to vote Common Stock (however acquired), Series A Preferred Stock and Series B Preferred Stock in excess of 49% of the total voting power of all voting securities of the Company. However, as of the consummation of the exchange offer, the 49% limitation in the Voting Agreement is no longer applicable. Accordingly, given Plainfield's holdings of 38,000 shares of Series A Preferred Stock and 1,548,589 shares of Common Stock and Alkest's holdings of 2,000 shares of Series A Preferred Stock, the aggregate voting power of all shares of Series A Preferred Stock, Series B Preferred Stock, Common Stock and Alpine Stock Options currently beneficially owned by Alpine, Plainfield and Alkest is 64,024,329. Wolverine Tube, Inc., is a global manufacturer and distributor of copper and copper alloy tube, fabricated products, and metal joining products. As of July 5, 2009, the Company had $201,105,000 in total assets and $241,483,000 in total liabilities. Wolverine Tube said in its quarterly report for the period ended July 5, 2009, the uncertainty about the Company's ability to achieve its projected results, the absence of such credit or capital commitments and the uncertainty about the future price of copper, which has a substantial impact on working capital, raises substantial doubt about the Company's ability to continue as a going concern. The Company expects to continue to actively manage and optimize its cash balances and liquidity, working capital, operating expenses and product profitability, although there can be no assurances the Company will be able to do so. WORKSTREAM INC: Expects to Close Noteholder Deal by November 30 --------------------------------------------------------------- Workstream Inc. reports the Company and the holders of $20.7 million of the Company's senior secured notes payable are negotiating the final terms of refinancing documents and expect to close the transaction during the Company's second fiscal quarter ending November 30, 2009. In August 2009, the Company signed a term sheet with the Holders. The term sheet provides that the Holders would exchange the Notes and the accrued interest thereon into $9.5 million of new senior secured notes with the balance as convertible notes. The proposed new notes would accrue interest at a rate of 9.5% per annum and have a maturity date of July 31, 2012. Workstream says there can be no assurance that the Company will be successful in its negotiations with the existing Holders and other parties or that the terms of any such refinancing or conversions will not result in the issuance, or potential issuance, of a significant amount of equity securities that will cause substantial dilution to the Company's stockholders. If the Company is not successful in refinancing the Notes or in otherwise entering into a financing, sale, or business transaction that infuses sufficient cash resources into the Company in the near future, any collection actions by the Holders could have a material adverse affect on the liquidity and financial condition of the Company and its ability to secure additional financing and continue as a going concern. Workstream last week announced financial results for the first quarter ended August 31, 2009. First Quarter Highlights include: -- Positive EBITDA of $50,000 -- Release of the latest version of TalentCenter's Pay-for- Performance software at HR Tech, integrating non-cash Rewards and Recognition -- Release of new Workstream Recruitment module including 10,000 skill and behavior-based competencies -- Winning place on Annual Software 500 -- 6FigureJobs named a Top 100 board "The first quarter of F2010 was a productive one for Workstream. In addition to attaining an EBITDA positive quarter, we released two significant enhancements to our software. We believe that we now have the only enterprise-level platform in which multi- national employers can award cash and non-cash compensation in an integrated solution, to reward and retain top performers. Workstream anticipates that employers, having reduced workforces, wages and bonuses, will have an increasing need to manage variable pay in the future to retain their most productive employees," said Chief Executive Officer, Steve Purello. Mr. Purello added, "In addition, we released a module of our Workstream recruitment software, which includes over 10,000 skill- and behavior-based competencies that employers can use to build proper job descriptions, and gauge worker's performance in the future." Workstream delivered these results for the quarter ended August 31, 2009: -- Revenues were $4.2 million compared to $5.6 million during the same period last year. -- EBITDA was $49,549, compared to nearly ($1.5) million during the same period last year. -- Net loss for the period in accordance with accounting principles generally accepted in the United States, or GAAP, was ($359,882) compared to ($2,051,582) during the same period last year. Loss per common share for the quarter was ($0.01) with approximately 57 million weighted-average shares outstanding compared to a loss of ($0.04) with approximately 52 million weighted-average shares outstanding during the same period last year. At August 31, 2009, Workstream had $22.1 million in total assets against $29.1 million in total liabilities, resulting in $7.0 million in stockholders' deficit. Due to significant reductions in operating expenses in the fourth quarter of fiscal 2008 and throughout fiscal 2009, management believes the current liquidity will be sufficient to meet its anticipated working capital and capital expenditure requirements upon the refinancing of the Notes. The current operating loss is the result of current economic conditions and is a reflection of the overall health of the economy as a whole. As it relates to the Career Networks segment of the business, management believes that the career transition services will gain strength with new programs implemented at the end of the first quarter of fiscal 2010. Based on an analysis of current contracts, forecasted new business, current backlog and current expense level, management believes the Company will meet its cash flow needs for fiscal 2010 assuming the successful refinancing of the Notes. If these measures fall short, management will consider additional cost savings measures, including cutting back product development initiatives, further reducing general and administrative expenses and reducing sales and marketing expenditures. The Company recognizes that there are no assurances that the Company will be successful in meeting its cash flow requirements, however, management is confident that, if necessary, there are other alternatives available to fund operations and meet cash requirements during fiscal 2010. A full-text copy of the Company's quarterly report is available at no charge at http://ResearchArchives.com/t/s?470a About Workstream Inc. Workstream Inc. is a provider of software and services for Human Capital Management. Workstream has two distinct reporting units: Enterprise Workforce Services and Career Networks. The Enterprise Workforce Services segment offers a suite of HCM software solutions, which includes performance management, compensation management, development, recruitment, benefits administration and enrollment, succession planning, and employee awards and discounts programs. The Career Networks segment offers recruitment research, resume management and career transition services. In addition, Career Networks provides services through a Web site where job-seeking senior executives can search job databases and post their resumes, and companies and recruiters can post position openings and search for qualified senior executive candidates. Workstream conducts its business primarily in the United States of America and Canada. WORKSTREAM INC: Posts 359,882 Loss in Fiscal Qtr. Ended Aug. 31 --------------------------------------------------------------- Workstream Inc. reported financial results for the first quarter ended August 31, 2009. First Quarter Highlights Include: * Positive EBITDA of $50,000 * Release of the latest version of TalentCenter's Pay-for- Performance software at HR Tech, integrating non-cash Rewards and Recognition * Release of new Workstream Recruitment module including 10,000 skill and behavior-based competencies * Winning place on Annual Software 500 * 6FigureJobs named a Top 100 board "The first quarter of F2010 was a productive one for Workstream. In addition to attaining an EBITDA positive quarter, we released two significant enhancements to our software. We believe that we now have the only enterprise-level platform in which multi- national employers can award cash and non-cash compensation in an integrated solution, to reward and retain top performers. Workstream anticipates that employers, having reduced workforces, wages and bonuses, will have an increasing need to manage variable pay in the future to retain their most productive employees," said Chief Executive Officer, Steve Purello. Mr. Purello added, "In addition, we released a module of our Workstream recruitment software, which includes over 10,000 skill- and behavior-based competencies that employers can use to build proper job descriptions today, and gauge worker's performance in the future." Workstream delivered the following results for the quarter ended August 31, 2009: Revenues were $4.2 million compared to $5.6 million during the same period last year. EBITDA was $49,549, compared to nearly $(1.5) million during the same period last year. Net loss for the period in accordance with accounting principles generally accepted in the United States, or GAAP, was $(359,882) compared to $(2,051,582) during the same period last year. Loss per common share for the quarter was $(.01) with approximately 57 million weighted-average shares outstanding compared to a loss of $(0.04) with approximately 52 million weighted-average shares outstanding during the same period last year. As reported by the Troubled Company Reporter on Sept. 17, 2009, Cross, Fernandez & Riley, LLP, in Orlando, Florida, raised substantial doubt on the ability of Workstream Inc. to continue as a going concern. In its audit report dated September 14, 2009, on the Company's Annual Report on Form 10-K for the fiscal year ended May 31, 2009, said the Company is in default of its notes payable, has suffered recurring losses from operations and, at May 31, 2009, has deficiencies in working capital and equity that raise substantial doubt as to its ability to continue as a going concern. Workstream said its ability to continue as a going concern depends, primarily, upon its ability to successfully refinance approximately $20.2 million of its senior secured notes payable, including accrued interest thereon that went into default on May 22, 2009, due to the Company's suspension of trading on the NASDAQ Stock Market as a result of its stockholders deficit. Workstream's ability to continue as a going concern is also dependent upon its ability to generate positive cash flows from operations. About Workstream Inc. Workstream Inc. is a provider of software and services for Human Capital Management. Workstream has two distinct reporting units: Enterprise Workforce Services and Career Networks. The Enterprise Workforce Services segment offers a suite of HCM software solutions, which includes performance management, compensation management, development, recruitment, benefits administration and enrollment, succession planning, and employee awards and discounts programs. The Career Networks segment offers recruitment research, resume management and career transition services. In addition, Career Networks provides services through a Web site where job-seeking senior executives can search job databases and post their resumes, and companies and recruiters can post position openings and search for qualified senior executive candidates. Workstream conducts its business primarily in the United States of America and Canada. W.R. GRACE: R. Finke Proffers Statements on PD Claim Treatment -------------------------------------------------------------- Richard C. Finke, assistant general counsel for Litigation for W.R. Grace & Co., proffered statements on his oversight and management responsibilities with respect to Asbestos Property Damage Claims against Grace, in relation to the treatment of the Claims under the First Amended Joint Plan of Reorganization. Mr. Finke declares that if the Plan is confirmed and becomes effective: * the Asbestos PO Trust will assume liability with respect to all present and future U.S. ZAI Property Damage Claims and Demands -- or property damage claims relating to the removal of Zonolite Attic Insulation from claimants' homes -- pursuant to the Asbestos PD Trust Agreement; * the Asbestos PD Trust will resolve all present and future US ZAI PO Claims and Demands pursuant to the ZAI Trust Distribution Procedures, which (i) "provide fair, equitable and substantially similar treatment for all US ZAI PD Claims that may presently exist or may arise in the future in compliance with Section 24(g) of the Bankruptcy Code," and (i) set forth procedures for liquidating and paying present and future US ZAI PD Claims; and * all present and future Asbestos PD Claims and Demands will be allowed or disallowed subject to the Class 7 A Case Management Order. If the Plan is not confirmed and the Asbestos PD Trust is not established with the ZAI TDP governing US ZAI PD claims, US ZAI PO Claims that were filed by the ZAI Claims Bar Date established by the Court on October 31, 2008, would be subject (i) to allowance or disallowance in the Bankruptcy Court, and (ii) to arguments from Grace and the claimants. However, future US ZAI PD Claims or Demands, to the extent they are found not to be subject to the US ZAI PD Bar Date, would not be subject to Bankruptcy Court jurisdiction and instead would be resolved in the tort system, Mr. Finke clarified. If the Plan is not confirmed and the Asbestos PD Trust is not established with the Class 7A CMO -- which governs the resolution of Asbestos PO Claims timely filed by the Asbestos PD Claims Bar Date and Asbestos PD Claims first asserted subsequent to the Effective Date of the Plan -- those Future Asbestos PD Claims would not be subject to uniform procedures designed to determine whether they have been discharged by the Plan and the Asbestos PD Claims Bar Date. Similarly, litigation concerning Future Asbestos PD Claims would not necessarily be asserted in a Federal District Court and accordingly be subject to the Federal Rules of Civil Procedure and Evidence, Mr. Finke explained. Upon the confirmation and effective date of the Plan, the Debtors, the Reorganized Debtors and the other Plan Proponents will not make any payment for services or costs and expenses in or in connection with the Chapter 11 cases, or in connection with the Plan unless otherwise approved by the Court or permitted by the Bankruptcy Code, Mr. Finke contended. About W.R. Grace Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA) -- http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally. The Company and its debtor-affiliates filed for Chapter 11 protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139). David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP, represent the Debtors in their restructuring efforts. The Debtors hired Blackstone Group, L.P., for financial advice. PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Capstone Corporate Recovery LLC for financial advice. David T. Austern, the legal representative of future asbestos personal injury claimants, is represented by Orrick Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official Committee of Asbestos Personal Injury Claimants. The Asbestos Committee of Property Damage Claimants tapped Scott Baena, Esq., and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod, LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel, LLP, represents the Official Committee of Equity Security Holders. W.R. Grace and its debtor affiliates, with the support of the Official Committee of Asbestos Personal Injury Claimants, the Asbestos PI Future Claimants' Representative and the Official Committee of Equity Security Holders, have submitted a proposed Chapter 11 plan of reorganization. The Chapter 11 plan is built around an April 2008 settlement for all present and future asbestos personal injury claims, and a subsequent settlement for asbestos property damage claims. The Plan confirmation hearing is scheduled to continue on October 13 and 14. Bankruptcy Creditors' Service, Inc., publishes W.R. Grace Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) W.R. GRACE: No Objections to Sale of 5% ART to Chevron ------------------------------------------------------ W.R. Grace & Co., Inc., certified to the Court that they received no objections to their intent to sell 5% of the limited liability company interests of Advanced Refining Technologies LLC to Chevron U.S.A., Inc., for a sale price of $4 million. ART is a limited liability company that develops, markets and sells hydro-processing catalysts, which are used to upgrade heavy oils into lighter, more useful products. Grace is the primary manufacturer of ART's products. In 2008, ART's revenues were approximately $355 million, according to Theodore L. Freedman, Esq., at Kirkland & Ellis LLP, in New York. Grace owns 55% of the Company's Interests, while Chevron owns 45%. ART's business and affairs, which have been operating since March 2001 in the ordinary course of business, are governed by the Limited Liability Company Agreement dated March 1, 2001, between Grace and Chevron. Under the LLC Agreement, Grace and Chevron jointly manage ART, with all actions by the ART Executive Committee requiring the approval of both Grace and Buyer. The LLC Agreement also provides Grace cannot sell the Sale Asset without Chevron's consent, and Chevron is not willing to consent to a sale to a third party, Mr. Freedman relates. In connection with the Sale, the parties also agreed to the amend the terms of the LLC Agreement, to (i) reflect the Sale related to the modification of the LLC Interests and contains certain additional amendments related to the operation of ART, and (ii) reduce Grace's commitment to $20.25 million, or 50% of the aggregate commitments of Grace and Chevron Capital to ART. According to Mr. Freedman, ART's revenues and results of operations are included in the consolidated revenues and results of operations of W. R. Grace & Co., which also reports Chevron's interest in ART as a non-controlling interest in consolidated results. When ART began business prior to the Petition date, the ART structure reflected Grace's judgment that consolidating ART's sales into the Grace Parent Group's financial reporting would be advantageous for the business and was also appropriate for accounting purposes. ART subsequently grew from an $80 million to a $350 million business with greater financing requirements. After substantial analysis, Mr. Freedman says, Grace determined because of the differences in scale resulting from ART's substantial growth, ART should be restructured and the consolidation is no longer advantageous because: * Under the arrangement, Grace disproportionately funds ART by Funding maintenance capital and providing the majority of the revolving credit commitments to ART. * As long as ART remains consolidated with the Grace Parent group, any borrowing by ART under the Chevron-ART Credit Agreement may trigger a cap on interest tax deductions by a non-Debtor Grace subsidiary that could eliminate a substantial portion of the deductions and resulting tax savings. The deductions carry over into subsequent years, but remain subject to the deduction cap in those years. * ART's sales are volatile because they generally involve large purchases by petroleum refiners as the result of competitive bidding arrangements, at intervals that generally are both several years in length and difficult to predict. About W.R. Grace Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA) -- http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally. The Company and its debtor-affiliates filed for Chapter 11 protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139). David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP, represent the Debtors in their restructuring efforts. The Debtors hired Blackstone Group, L.P., for financial advice. PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Capstone Corporate Recovery LLC for financial advice. David T. Austern, the legal representative of future asbestos personal injury claimants, is represented by Orrick Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official Committee of Asbestos Personal Injury Claimants. The Asbestos Committee of Property Damage Claimants tapped Scott Baena, Esq., and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod, LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel, LLP, represents the Official Committee of Equity Security Holders. W.R. Grace and its debtor affiliates, with the support of the Official Committee of Asbestos Personal Injury Claimants, the Asbestos PI Future Claimants' Representative and the Official Committee of Equity Security Holders, have submitted a proposed Chapter 11 plan of reorganization. The Chapter 11 plan is built around an April 2008 settlement for all present and future asbestos personal injury claims, and a subsequent settlement for asbestos property damage claims. The Plan confirmation hearing is scheduled to continue on October 13 and 14. Bankruptcy Creditors' Service, Inc., publishes W.R. Grace Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) W.R. GRACE: Submits Second Set of Plan Modifications ---------------------------------------------------- For purposes of the phase two of the confirmation hearings for their plan of reorganization, W.R. Grace & Co., Inc., and its units, together with the plan co-proponents the Official Committee of Equity Security Holders, the Official Committee of Asbestos Personal Injury Claimants and the Future Asbestos PI Claims Representative submitted to the U.S. Bankruptcy Court for the District of Delaware a second set of modifications to the Second Amended Joint Plan of Reorganization. The Second Set of Plan Modifications, dated October 12, 2009, is technical in nature or is intended to address objections or clarifications requested by various parties-in-interest in relation to the confirmation of the Plan, according to David M. Bernick, Esq., at Kirkland & Ellis LLP, in New York. Specifically, the Plan embodies these Plan modifications: (1) Following negotiations between the Plan Proponents and BNSF Railway Company during the Phase II Confirmation Hearing, the parties agreed to modify the definition of "BNSF" to include "The Burlington Northern and Santa Fe Railway Company and any successor." The Asbestos Personal Injury Channeling Injunction will not enjoin BNSF from asserting any claim under Section 105(5) of the Bankruptcy Code for insurance coverage as an insured or an additional insured against a Settled Asbestos Insurance Company under an insurance policy that is not identified as subject of an Asbestos Insurance Settlement Agreement or is not subject to protection under the terms of the Debtors' Settlement Agreement with the Royal Parties dated June 17, 2009. In all events, however, BNSF will be enjoined from asserting any claim against any entity or policy entitled to protection under the terms of a Settlement Agreement pursuant to Rule 9019 of the Federal Rules of Bankruptcy Procedure involving Arrowood Indemnity Company, formerly known as Royal Indemnity Company. (2) At the request of the Official Committee of Unsecured Creditors, the Plan is modified to reflect that the "contractual, equitable, and legal rights of Holders of Claims in Class 9 are unaffected by the Joint Plan." However, the Plan Proponents clarify that those Rights are unaffected except as to any preemptory effect of bankruptcy law. Notwithstanding this language, it is the Plan Proponents' understanding that the Creditors' Committee is not satisfied with this language. (3) The definition of "Settled Asbestos Insurance Company" in the Plan is modified to (i) permit additional time to conclude Asbestos Insurance Settlement Agreements with Asbestos Insurance Entities; and (ii) clarify that the Court approval is required for insurance settlements entered into after the Petition Date. At the request of Alexander M. Sanders, the legal representative for the Future Asbestos-related Property Damage Claimants or Holders of Demands, modifications to Sections 1.4(d), 2.1 (c)(viii) and 2.1 (g) of the Asbestos Property Damage Trust Agreement were also made "to better account for any possible payment defaults and how to then provide more clarity as to the mechanisms that would be in place to value and pay traditional PD present and future claims in a substantially similar manner." Mr. Bernick clarified that the Second Set of Plan Modifications do not alter in any respect the treatment accorded to claims or equity interests of any party that has not consented to or requested the Modifications. Accordingly, the Plan Proponents maintain that no additional solicitation is required as a result of the Modifications. A full-text copy of the Second Set of Modifications to the Plan is available at no charge at: http://bankrupt.com/misc/WRGrace_2ndPlanModifications.pdf About W.R. Grace Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA) -- http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally. The Company and its debtor-affiliates filed for Chapter 11 protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139). David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP, represent the Debtors in their restructuring efforts. The Debtors hired Blackstone Group, L.P., for financial advice. PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Capstone Corporate Recovery LLC for financial advice. David T. Austern, the legal representative of future asbestos personal injury claimants, is represented by Orrick Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official Committee of Asbestos Personal Injury Claimants. The Asbestos Committee of Property Damage Claimants tapped Scott Baena, Esq., and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod, LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel, LLP, represents the Official Committee of Equity Security Holders. W.R. Grace and its debtor affiliates, with the support of the Official Committee of Asbestos Personal Injury Claimants, the Asbestos PI Future Claimants' Representative and the Official Committee of Equity Security Holders, have submitted a proposed Chapter 11 plan of reorganization. The Chapter 11 plan is built around an April 2008 settlement for all present and future asbestos personal injury claims, and a subsequent settlement for asbestos property damage claims. The Plan confirmation hearing is scheduled to continue on October 13 and 14. Bankruptcy Creditors' Service, Inc., publishes W.R. Grace Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) X-RITE INC: Appoints Rajesh Shah as Chief Financial Officer ----------------------------------------------------------- Rajesh K. Shah joined X-Rite Incorporated as Executive Vice President, Chief Financial Officer and Secretary effective October 19, 2009. In that position, he will oversee the Company's financial functions including accounting, financial planning and analysis, tax, treasury, compliance and investor relations. Mr. Shah will also be a member of the senior executive leadership team. Mr. Shah replaced Bradley J. Freiburger who served as the Company's Interim Chief Financial Officer through September 4, 2009. X-Rite Mr. Shah is a seasoned senior financial executive including a broad-based capital markets background with significant financial and operations expertise. He has experience with both public and private organizations, working closely with corporate boards, private equity investors and existing leadership teams to build high performance cultures focused on key strategic priorities. Prior to joining X-Rite, Mr. Shah, 58, served from 2007 to 2009 as Executive Vice President and Chief Financial Officer of Cadence Innovation LLC, a global manufacturer of automotive interior systems. Prior to that, he held the position of Executive Vice President and Chief Financial Officer of Remy International, Inc., a manufacturer of automotive and commercial products from 2002 to 2006. Mr. Shah earned a Bachelor of Commerce degree from Bombay University and a Masters of Business Administration from Bowling Green University in Bowling Green, Ohio. Mr. Shah will be paid an annual base salary of $300,000; however, as a result of the Company's voluntary 5% salary reduction program announced in May 2009, his starting salary will be paid at an annual rate of $285,000. Mr. Shah will also be eligible to participate in X-Rite's Management Incentive Plans. Under the Company's Short Term Incentive Plan, Mr. Shah will be eligible to earn up to 48% of his annual salary before giving affect to the voluntary salary reduction for achieving target performance under the plan. For 2010, X-Rite will guarantee at least 50% of the amount Mr. Shah is targeted to receive under X-Rite's Short Term Incentive Plan so long as Mr. Shah remains employed by the Company at the time that such payment is due. Upon joining the Company, Mr. Shah will receive a one-time grant of 200,000 stock options and 200,000 performance-based restricted shares under the Company's 2008 Omnibus Long Term Incentive Plan. Mr. Shah's one-time stock options will have an exercise price equal to the closing per share price of our common stock on October 19, 2009. Additionally, Mr. Shah will be entitled to a one-time payment of $15,000 payable within two weeks of his start date. Mr. Shah is also eligible to participate in X-Rite's Long Term Incentive Plan for Senior Executives, which is comprised of grants of 50% stock options and 50% performance-based restricted stock. The Company does not anticipate making annual long term incentive grants until 2012. Mr. Shah will also be entitled to severance and change of control benefits. Under X-Rite's severance plan for senior executives, Mr. Shah will be entitled to 12 months of severance benefits upon the termination of his employment unless his employment is terminated for cause or he voluntarily terminates his employment. In the event that Mr. Shah is terminated in connection with a change of control of the Company, he will be entitled to 24 months of severance benefits under the Company's Change-of-Control Severance Plan for Senior Executives. "Raj has a passion for simplifying complex businesses and successfully managing growth -- critical elements to our long term global business strategy," commented Thomas J. Vacchiano Jr., our Chief Executive Officer. Mr. Vacchiano also remarked that "Raj's financial acumen and operational experience will be invaluable as we continue to navigate through uncertain economic times. We are pleased to have such an outstanding and accomplished executive joining our leadership team." "X-Rite is an amazing company with vast potential, and I am honored to be assuming CFO responsibilities," commented Rajesh K. Shah. "I look forward to working with all members of the X-Rite organization as we focus on driving results and creating value for our shareholders." As of July 4, 2009, the Company had $494.5 million in total assets and $40.9 million in total current liabilities and $256.4 million in total long-term liabilities. On April 3, 2008, the Company said it was not in compliance with certain covenants under its secured credit facilities. As a result of the defaults, borrowings on the Company's revolving line of credit were frozen and default interest was charged on the first lien loan. On August 20, 2008 the Company entered into forbearance and amendment agreements with the first and second lien lender groups, that provided for forbearance on the defaults through the closing of the Company's recapitalization at which time the lenders agreed to amend the credit facilities to provide new financial covenants and interest rates, with the amendments effective on the date of closing of the Corporate Recapitalization Plan. As of July 4, 2009, the Company was in compliance with the financial covenants contained in its first and second lien credit agreements, as amended. About X-Rite Based in Grand Rapids, Michigan, X-Rite Incorporated (NASDAQ:XRIT) -- http://www.xrite.com/-- is the global leader in color science and technology. The Company, which now includes color industry leader Pantone, Inc., develops, manufactures, markets and supports innovative color solutions through measurement systems, software, color standards and services. X-Rite's expertise in inspiring, selecting, measuring, formulating, communicating and matching color helps users get color right the first time and every time, which translates to better quality and reduced costs. X-Rite serves a range of industries, including printing, packaging, photography, graphic design, video, automotive, paints, plastics, textiles, dental and medical. * Court Says Champerty Can't Curb Debt Buyers' Rights ----------------------------------------------------- According to Law360, reassuring the secondary loan market, the New York Court of Appeals has issued a ruling clarifying the limits of the state's arcane champerty law, ruling that the age-old law with roots in medieval Europe was not designed to curb the ability of buyers of distressed debt to enforce their rights through litigation and collect on a legitimate claim. * Consumer Confidence Falls, Lower Than All Predictions ------------------------------------------------------- According to Bill Rochelle at Bloomberg News, The Reuters/ University of Michigan preliminary index of consumer confidence came in at 69.4, down from 73.5 in September. The actual number was lower than the estimate by all 64 economists surveyed by Bloomberg. * Default Rates Raise Questions on Gov't. Role in Mortgage Lending ------------------------------------------------------------------ Recent reports that the Federal Housing Administration (FHA) will suffer default rates of more than 20 percent on the 2007 and 2008 loans it guaranteed has raised questions once again about the government's role in the financial crisis and its efforts to achieve social purposes by distorting the financial system, ABI says, citing an October 16 commentary from the Wall Street Journal. * Florida Bankruptcy Filings Up 48% in First Nine Months -------------------------------------------------------- Jim Wyss at Miami Herald reports that from January through September 2009, about 70,799 bankruptcy filings were made in Florida, a 48% increase from the same time frame in 2008, due to dropping home prices and lost jobs. Miami Herald notes that most of the bankruptcy filings are personal, not commercial. According to Miami Herald, bankruptcy-data and management firm AACER said that there were 68,186 noncommercial bankruptcies during the first nine months of the year compared to 2,613 commercial bankruptcies. Most of those are Chapter 7 bankruptcies, Miami Herald states. * Home Foreclosures, Consumer Prices Rise; Rents Decline -------------------------------------------------------- Almost 938,000 U.S. homes went into default or were repossessed in the third quarter, Bloomberg News' Bill Rochelle said, citing a report from RealtyTrac Inc. One in every 136 U.S. households went into foreclosure. Currently, 7 million homes are in foreclosure or headed in that direction, compared with 1.27 million in 2005, according to the Lusk Center for Real Estate at the University of Southern California in Los Angeles. * Mitsubishi to Offer $700-Mil. DIP Loans to U.S. Firms ------------------------------------------------------- Nikkei reports that Mitsubishi Corp. will provide debtor-in- possession financing in the U.S., with plans to extend $500 million-$700 million through a local asset management firm. According to Nikkei, Mitsubishi recently launched a DIP financing section within Aladdin Capital Management LLC, in which it acquired a stake of 20% in 2008. Nikkei relates that the department has hired personnel from players like Goldman Sachs Group Inc. and CIT Group Inc., the biggest provider of DIP financing in the U.S., and is currently selecting borrowers. * Credit Solutions Settles NY Client's $10K Debt for $4K -------------------------------------------------------- With two of her four children attending school and running a small business with her husband, Frances E. of Orange County, NY said the timing couldn't have been worse when she was diagnosed with breast cancer. Ms. Frances spent the majority of 2007 in and out of hospitals, undergoing six surgeries in five months, plus chemotherapy and radiation. Ms. Frances couldn't work, and the strain of keeping up with bills during her medical emergency convinced her to contact Credit Solutions. But within four months of enrolling with the debt settlement industry leader, Ms. Frances was debt-free. Credit Solutions settled her $10,609.27 of debt at 37%, for $3,925. Ms. Frances total savings: $6,684.27. Had Ms. Frances tried to settle her accounts on her own, Ms. Frances said, "I would not have had that cooperation from creditors." With Credit Solutions, "You're actually getting rid of the debt completely," Ms. Frances said. "If you're serious about doing it, they make it very easy for you to do." Unlike consumer credit counseling services, which receive "kick- back" payments from creditors to offset the costs of administering their programs, debt settlement is the only debt-relief option that reduces consumers' debt principal. Given today's economy, people desperately need programs that reduce the principal of their debt to stave off bankruptcy. Once you're debt-free, Ms. Frances said, "You can sleep nights. Your conscience is clear. You don't have a burden of having to hand out dollars. The [collections] calls stop, and you feel free and un-burdened. There's an overwhelming sense of relief." The U.S. settlement industry leader, Credit Solutions uses its experience, leverage and volume on consumers' behalf, negotiating directly with creditors to facilitate repayment of consumer debts at a reduced percentage of the total amount owed. The program typically takes 12 to 36 months. Upon completion, all of the consumer client's debts included in the program are "settled," or resolved with zero balances. Since its 2003 founding, Credit Solutions has settled over $1 billion in unsecured client debt and currently manages over $2.25 billion of consumer debt for nearly 100,000 U.S. clients. * Judge Prudence Carter Beatty to Retire at Year's End ------------------------------------------------------ U.S. Bankruptcy Judge Prudence Carter Beatty in Manhattan will retire at year's end, Bloomberg News reported, citing Circuit Executive Karen G. Milton. The U.S. Court of Appeals in New York began interviewing candidates a year ago to fill the post being vacated by the retirement of Bankruptcy Judge Adlai Hardin. The appeals court has made its preliminary selection to fill last year's vacancy, and a background check by the Federal Bureau of Investigation is yet to begin, Ms. Milton said in an interview. Ms. Milton said the FBI check should be completed and the appointment announced by the end of the year. Applications to fill Judge Beatty's post are due by Oct. 23. * Large Companies With Insolvent Balance Sheets ----------------------------------------------- Total Share- Total holders' Assets Equity Company Ticker ($MM) ($MM) ------- ------ ------- --------- ABSOLUTE SOFTWRE ABT CN 117 1 ACCO BRANDS CORP ABD US 1,100 (107) AFC ENTERPRISES AFCE US 142 (26) AMER AXLE & MFG AXL US 1,920 (736) AMR CORP AMR US 24,138 (3,000) ARBITRON INC ARB US 220 0 ARVINMERITOR INC ARM US 2,627 (846) AUTOZONE INC AZO US 5,318 (433) BAXTER INTL INC BAX US 15,742 0 BIOSPECIFICS TEC BSTC US 12 6 BIOTIME INC BTIM US 5 0 BLOUNT INTL BLT US 474 (36) BOARDWALK REAL E BEI-U CN 2,377 (22) BOARDWALK REAL E BOWFF US 2,377 (22) BP PRUD BAY-RTU BPT US 9 8 BURCON NUTRASCIE BU CN 4 3 CABLEVISION SYS CVC US 9,307 (5,284) CARDTRONICS INC CATM US 468 (10) CELLDEX THERAPEU CLDX US 54 4 CENTENNIAL COMM CYCL US 1,480 (925) CENVEO INC CVO US 1,459 (231) CHENIERE ENERGY CQP US 1,920 (436) CHOICE HOTELS CHH US 357 (141) CINCINNATI BELL CBB US 2,009 (623) CLOROX CO CLX US 4,576 (175) COMMERCIAL VEHIC CVGI US 269 5 DELCATH SYSTEMS DCTH US 9 2 DEXCOM DXCM US 65 1 DISH NETWORK-A DISH US 7,265 (1,519) DOMINO'S PIZZA DPZ US 443 (1,350) DUN & BRADSTREET DNB US 1,623 (719) DYAX CORP DYAX US 68 (37) EASTMAN KODAK EK US 7,105 (109) EINSTEIN NOAH RE BAGL US 150 (4) ELECTRO-OPTICAL MELA US 8 7 ENERGY COMPOSITE ENCC US 0 0 EPICEPT CORP EPCT SS 16 (3) EXELIXIS INC EXEL US 333 (123) EXTENDICARE REAL EXE-U CN 1,719 (47) FORD MOTOR CO F US 204,327 (9,418) FORD MOTOR CO F BB 204,327 (9,418) GLG PARTNERS INC GLG US 494 (271) GLG PARTNERS-UTS GLG/U US 494 (271) GOLD RESOURCE CO GORO US 7 6 HEALTHSOUTH CORP HLS US 1,888 (662) HOVNANIAN ENT-A HOV US 2,285 (73) HUMAN GENOME SCI HGSI US 670 (55) IMAX CORP IMX CN 270 (18) IMAX CORP IMAX US 270 (18) IMMUNOMEDICS INC IMMU US 53 1 IMS HEALTH INC RX US 2,030 (22) INCYTE CORP INCY US 159 (291) INSULET CORP PODD US 99 (3) INTERMUNE INC ITMN US 165 (80) IPCS INC IPCS US 553 (34) JAZZ PHARMACEUTI JAZZ US 108 (88) JUST ENERGY INCO JE-U CN 457 (652) KNOLOGY INC KNOL US 639 (44) LIN TV CORP-CL A TVL US 781 (187) LINEAR TECH CORP LLTC US 1,466 (163) LODGENET INTERAC LNET US 594 (64) LOGMEIN INC LOGM US 47 7 MANNKIND CORP MNKD US 267 (19) MAP PHARMACEUTIC MAPP US 65 1 MAXLIFE FUND COR MXFD US 0 0 MEAD JOHNSON-A MJN US 1,926 (808) MEDIACOM COMM-A MCCC US 3,707 (426) MONEYGRAM INTERN MGI US 6,221 (23) MOODY'S CORP MCO US 1,873 (749) NATIONAL CINEMED NCMI US 603 (499) NAVISTAR INTL NAV US 9,383 (1,294) NPS PHARM INC NPSP US 144 (219) NYMOX PHARMACEUT NYMX US 1 (1) OCH-ZIFF CAPIT-A OZM US 1,854 (157) OMNOVA SOLUTIONS OMN US 326 0 ONCOGENEX PHARMA OGXI US 7 3 ONCOLYTICS BIO ONC CN 12 9 ONCOLYTICS BIO ONCY US 12 9 OSIRIS THERAPEUT OSIR US 129 2 OTELCO INC-IDS OTT-U CN 349 9 OTELCO INC-IDS OTT US 349 9 OVERSTOCK.COM OSTK US 129 (3) PALM INC PALM US 793 (454) PDL BIOPHARMA IN PDLI US 217 (306) PEREGRINE PHARMA PPHMD US 26 5 PERMIAN BASIN PBT US 10 0 PETROALGAE INC PALG US 7 (32) POTLATCH CORP PCH US 916 0 QWEST COMMUNICAT Q US 20,226 (1,051) REGAL ENTERTAI-A RGC US 2,647 (228) RENAISSANCE LEA RLRN US 83 2 REVLON INC-A REV US 797 (1,074) SALLY BEAUTY HOL SBH US 1,464 (645) SANDRIDGE ENERGY SD US 2,364 (91) SAUDI AMERICAN H SAHN US 0 (2) SEALY CORP ZZ US 1,031 (115) SELECT COMFORT C SCSS US 86 (46) SEMGROUP ENERGY SGLP US 314 (131) SHARPS COMPLIANC SMED US 15 9 SIGA TECH INC SIGA US 8 (13) SINCLAIR BROAD-A SBGI US 1,606 (148) SONIC CORP SONC US 828 (22) SPECIALTY PRODUC SPIE US 53 9 STANDARD PARKING STAN US 230 4 STEREOTAXIS INC STXS US 43 (10) SUCCESSFACTORS I SFSF US 165 (5) SUN COMMUNITIES SUI US 1,192 (81) SYNERGY PHARMACE SGYP US 4 1 TALBOTS INC TLB US 855 (206) TALECRIS BIOTHER TLCR US 1,336 (37) TAUBMAN CENTERS TCO US 2,858 (289) TENNECO INC TEN US 2,767 (263) THERAVANCE THRX US 206 (159) UAL CORP UAUA US 18,805 (2,628) UNITED RENTALS URI US 3,918 (46) US AIRWAYS GROUP LCC US 7,857 (336) VECTOR GROUP LTD VGR US 757 2 VENOCO INC VQ US 725 (165) VIRGIN MOBILE-A VM US 320 (256) WARNER MUSIC GRO WMG US 3,988 (142) WEIGHT WATCHERS WTW US 1,085 (791) WORLD COLOR PRES WC CN 2,641 (1,735) WORLD COLOR PRES WC/U CN 2,641 (1,735) WR GRACE & CO GRA US 3,815 (351) YRC WORLDWIDE IN YRCW US 3,418 (72) ********* 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 **