/raid1/www/Hosts/bankrupt/TCR_Public/091027.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 27, 2009, Vol. 13, No. 297
Headlines
ADELPHIA COMMS: Rigases Win Appeal on Conspiracy Charge
ADVANCED CELL: Files Prospectus for Resale of 192,148,119 Shares
ADVANCED MICRO: Board Appoints Craig Conway to Committees
ADVANTA CAPITAL: Fitch Changes Trust Preferred Rating to 'C/RR6'
AMERALIA INC: Posts $5.7MM Net Loss for Fiscal Year Ended June 30
AMERICAN FAMILY: Fails to Turn Over Customer List to Court
AMERICAN INT'L: Pays Out Retention Bonuses, Retirement Benefit
AMERICAN INT'L: Receives TARP Memo on Payment to Top 25 Employees
AMORE BEAUTY: Files for Chapter 11 Bankruptcy Protection
ANEKONA LLC: Court Approves Dismissal of Reorganization Case
ASARCO LLC: Has Deal With Safeco on Claims
BANK OF AMERICA: Merrill Lynch's Castillo Quits
BANKUNITED FINANCIAL: Fitch Withdraws 'D' Issuer Default Rating
BARRIERS INC: Case Summary & 20 Largest Unsecured Creditors
BERNARD MADOFF: Jeffry Picower Dies; Picard Continues Lawsuit
BGM PASADENA LLC: Case Summary & 7 Largest Unsecured Creditors
BRISAR HOLDINGS LLC: Case Summary & 4 Largest Unsecured Creditors
BRISAR INDUSTRIES: Case Summary & 20 Largest Unsec. Creditors
BULLDOG TIRE RECYCLING INC: Voluntary Chapter 11 Case Summary
BURLINGTON COAT: Has 2% Increase in Sept. Comparative Store Sales
CABI DOWNTOWN: No Official Depositors' Committee
CAPITAL AUTOMOTIVE: S&P Affirms Corporate Credit Ratings at 'B'
CAPMARK FINANCIAL: Case Summary & 30 Largest Unsecured Creditors
CARE FOUNDATION: Burt Shearer Sues NHI Board Members for Fraud
CAROLINA FIRST: Moody's Cuts Bank Financial Strength Rating to 'E'
CATALYST PAPER: S&P Retains Negative CreditWatch on 'CCC+' Rating
CATHOLIC CHURCH: Davenport Trustee to Name 23 Settling Abusers
CATHOLIC CHURCH: Oregon Priests Say Unsealing Docs. to Do Harm
CATHOLIC CHURCH: Ruling Favors Continental in Fairbanks Dispute
CELL THERAPEUTICS: Reports Outcome of Annual Shareholders Meeting
CHENG KWONG SEA FOOD: Voluntary Chapter 11 Case Summary
CHRISTOPHER EVANS: Case Summary & 10 Largest Unsecured Creditors
CHRYSLER LLC: Khourys Should Bring Case in State Court, Says Judge
CHRYSLER LLC: Mraz Family Seeks Modification of Safeco Stipulation
CHRYSLER LLC: Objects to Dealers' Requests for Admin. Claims
CIT GROUP: Extends Exchange Offer to November 5
CIT GROUP: Restructuring Plan to Make Icahn Largest Shareholder
CIT GROUP: Susan Lyne to Resign From Board Effective October 31
CIT GROUP: To Pledge Leases & Receivables Under Expansion Facility
CLEM CARINALLI: U.S. Trustee Names 9 to Creditors Committee
COACHMEN INDUSTRIES: Says Q3 Revenues Lower Than Anticipated
COLORADO PUBLIC: Moody's Affirms 'Ba1' Rating on $4.8 Mil. Bonds
COMMONWEALTH BIOTECHNOLOGIES: Must Comply with NASDAQ Listing Rule
CONGOLEUM CORP: Files Amended Plan with District Court
CRABTREE & EVELYN: Files Reorganization Plan, Closes 30 Stores
CREEKSHIRE DEVELOPMENT: Case Summary & 16 Largest Unsec. Creditors
DAYTON SUPERIOR: Exits Chapter 11, Has $110MM Exit Loan
DAVIS PETROLEUM: Davis Heiress Can't Sue Over Bankruptcy Sale
DBSI INC: An 'Elaborate Shell Game,' Says Examiner Report
DELTA AIR LINES: Deadline to Object to Claims Extended to April 19
DELTA AIR LINES: Reports $161 Mil. Net Loss for Sept. Quarter
DELTA AIR LINES: Stipulation Resolving MMA & MDE Claims
DELVCO PHARMA: Case Summary & 20 Largest Unsecured Creditors
DENNIS SPIELBAUER: Can Sell California Property for $586,000
DM 668 LLC: Voluntary Chapter 11 Case Summary
DOLE FOOD: S&P Puts 'B-' Corp. Rating on CreditWatch Positive
DOLLARAMA GROUP: S&P Raises Corporate Credit Rating to 'BB-'
DRYSHIPS INC: Posts US$35.6MM Net Profit for Q3 2009
EDSCHA NORTH AMERICA: Wants to Use Cash for 30-Day Period
ELECTRICAL COMPONENTS: S&P Cuts Corporate Credit Rating to 'CCC-'
ELECTRONIC SENSOR: Lehman Brothers Bankhaus Discloses 6.1% Stake
EMCOR GROUP: Moody's Affirms Corporate Family Rating at 'Ba1'
ENERGY FUTURE: Amends Exchange Offer, Consent Solicitation Terms
ENTEROMEDICS INC: Receives NASDAQ Listing Deficiency Notice
ENVIRONMENTAL TECTONICS: Earns $1,249,000 in Fiscal Second Quarter
EQUIPMENT ACQUISITION RESOURCES: Voluntary Chapter 11 Case Summary
ERICKSON RETIREMENT: Proposes DLA Piper as Counsel
ERICKSON RETIREMENT: Hickory Chase-Related Action Unclear
ERICKSON RETIREMENT: Proposes to Pay Prepetition Employees
EXTENDED STAY: Cerberus Objects to Probe on Lichtenstein
EXTENDED STAY: Examiner Proposes A&M as Financial Advisor
EXTENDED STAY: Examiner Proposes Stutman as Counsel
FAIRPOINT COMMS: Files for Chapter 11 to Slash Debt by $1.7-Bil.
FAIRPOINT COMMUNICATIONS: Case Summary & 50 Unsecured Creditors
FANNIE MAE: Inks MOU with Treasury, FHFA and Freddie Mac
FONTAINEBLEAU LV: Contractors Want to Deem Claim Timely Filed
FONTAINEBLEAU LV: Sued by Lien Claimants to Affirm Liens
FORD MOTOR: Discusses Tax Benefit Preservation Plan
FORD MOTOR: May Report Break-Even Results for NA Operations
FREDDIE MAC: Files September 2009 Monthly Volume Summary
FREDDIE MAC: Inks MOU with Treasury, FHFA and Fannie Mae
FREDDIE MAC: Sees Increase in Mortgage Delinquencies
FUTURE GRAPHICS: Case Summary & 16 Largest Unsecured Creditors
GALLEON MANAGEMENT: To Liquidate Funds Following Charges
GARY CALKINS: Voluntary Chapter 11 Case Summary
GENERAL GROWTH: Property Tied to Howard Hughes Drops in Value
GENERAL MOTORS: AlixPartners Bills $23 Million for 3 Months' Work
GENTEK HOLDINGS: Moody's Downgrades Ratings on Senior Loan to 'B1'
GENTEK INC: S&P Downgrades Corporate Credit Rating to 'B'
GORDON PROPERTIES: Taps Odin Feldman as Counsel
GRACE INDUSTRIES: Project Cost Cap Agreement Not Enforceable
HARVEST OPERATIONS: Moody's Reviews 'B3' Corporate Family Rating
HAYES LEMMERZ: Sells Non-Operating Plant; Plan Hearing Oct. 29
HSF HOLDING: Plan Mostly Pays Professionals
IMPLANT SCIENCES: UHY LLP Raises Going Concern Doubt
INNOVATIVE CARD: Board Names Zelayeta as Independent Director
INNOVATIVE COS: Gets Interim OK to Use Citibank Cash Collateral
INNOVATIVE COS: Proofs of Claim Due December 1
INTERTAPE POLYMER: KSA Demands Management to Overhaul Strategy
ION MEDIA: Files Schedules of Assets and Liabilities
IPCS INC: Greywolf Discloses Ownership of 8.2% of Common Stock
JASON FREMOUW: Case Summary & 10 Largest Unsecured Creditors
JEFFERIES GROUP: Fitch Rates Subordinated Debt at 'BB+'
JOHN PANAGAKO: Voluntary Chapter 11 Case Summary
JSA ARCHITECTS: Files for Chapter 11 Bankruptcy Protection
JTI-MACDONALD: Canada Provinces Accused of Misusing Bankruptcy
KENNETH JAMES DRAPER: Case Summary & 19 Largest Unsec. Creditors
KRAIG SCOTT SULLIVAN: Case Summary & 20 Largest Unsec. Creditors
LAGUNA NURSERY INC: Case Summary & 2 Largest Unsecured Creditors
LANDAMERICA FINANCIAL: Tries to Cast Off Insurance Action
LDG SARASOTA: Voluntary Chapter 11 Case Summary
LDG SOUTH: Voluntary Chapter 11 Case Summary
LDG SOUTH II LLC: Voluntary Chapter 11 Case Summary
LEADIS TECHNOLOGY: Stockholders Approve Dissolution Plan
LEAR CORP: ASM Capital Buys $58,000 in Claims
LEAR CORP: Stipulation Allowing Set-Off With Magna Seating
LEAR CORP: Terms of Winston Retention Modified
LEHMAN BROTHERS: Metavante Loses Bid to Stay $6M Lehman Ruling
LEHMAN BROTHERS: Hedge Fund Clients to Get $3.3 Billion Payout
LEHMAN BOTHERS: To Return to U.S. Mortgage Market Through Unit
LINENS 'N THINGS: Noteholders Can't Block Gardere Fees
LYONDELL CHEMICAL: Creditors Want Broad Mandate for Examiner
MANSTONE COUNTERTOPS: Case Summary & 7 Largest Unsecured Creditors
MASONITE INT'L: Stipulation Resolving Penske Truck Leasing Claim
METCALF PAVING CO: Voluntary Chapter 11 Case Summary
MILLER BROTHERS: May Lay Off 225 Employees in Kentucky
MOBILE BAY: To File Reorg. Plan This Week; SaltAire to be Revived
MSGI SECURITY: Lenders Agree to Forbearance Until December 15
MURRAY ENERGY: Moody's Affirms 'Caa1' Corporate Family Rating
MUZAK HOLDINGS: Unit Files Amended Schedules of Assets & Debts
MXENERGY HOLDINGS: Discusses Impact of Debt & Equity Restructuring
NAILITE INT'L: Court Sets October 30 Disclosure Statement Hearing
NAVISTAR INT'L: Board OKs Extra Healthcare Coverage for Caton
NAVISTAR INT'L: Raises 2014 Convertible Notes Offering to $550MM
NCI BUILDING: Moody's Confirms Corporate Family Rating at 'B3'
NEWFIELD EXPLORATION: S&P Raises Subordinated Debt Rating to 'BB+'
NORTEL NETWORKS: Has Deal to Sell Packet Core Network for $10MM
NTK HOLDINGS: Prepack Plan Confirmation Hearing Set for Dec. 4
NTK HOLDINGS: S&P Downgrades Corporate Credit Rating to 'D'
NUTRACEA INC: Completes Filing of Restated Financial Statements
PATRICK INDUSTRIES: Special Shareholders' Meeting on Nov. 19
PATRICK INDUSTRIES: Tontine to Assign Stake to New Entity
PETTERS COMPANY: Tom Petters' Fraud Trial Set For This Week
PETROQUEST ENERGY: S&P Gives Stable Outlook; Affirms 'B-' Rating
PHIBRO ANIMAL: $37.5 Mil. Deal Won't Affect Moody's 'B2' Rating
PILGRIM'S PRIDE: Equity Panel Addresses Objections to HLH Hiring
PILGRIM'S PRIDE: Gets Nod to Assume GECC Leases & Schedules
PILGRIM'S PRIDE: Proposes Guantao as Special Counsel
PRIME WEST DEVELOPMENT: Case Summary & 6 Largest Unsec. Creditors
PPA HOLDINGS: Talking on Consensual Plan, Wants Jan. 22 Extension
PREVENTION I: Files for Chapter 11 Bankruptcy Protection
PROTOSTAR LTD: Committee Says $193 Million in Liens Invalid
QUESTEX MEDIA: Can Hire Young Conaway as Co-Counsel
QUESTEX MEDIA: Court Approves Kirkland & Ellis as Attorney
RAHAXI INC: Registers 50 Mil. Shares Issuable Under 2007 Plan
RICK ROSE: James, Robin Gillette Bids $710,000 for Mansion
RITZ CAMERA: Files Liquidating Chapter 11 Plan
RODNEY EISENBARGER: Case Summary & 17 Largest Unsecured Creditors
SCHWELMER BEER: Files for Chapter 11 Bankruptcy Protection
SCO GROUP: Trustee to Pursue Novell and IBM in Litigation
SEAGATE TECHNOLOGY: Fitch Affirms Issuer Default Rating at 'BB'
SEMGROUP LP: Wins Confirmation of Plan of Reorganization
SEMGROUP LP: Int'l Bank Opposes Fortis Bank Settlement
SEMGROUP LP: Proposes Settlement With BNP Paribas
SEMGROUP LP: SemFuel to Sell Greenbay Assets to U.S. Oil
SINCLAIR BROADCAST: Amendment to Tender Offer Statement Filed
SMART ONLINE: Raises $250,000 by Issuing Convertible Sub Note
SMART ONLINE: Atlas Discloses 39% Stake; Buys Shares from Nouri
SPANSION INC: Japan Creditors Object to Foundry Pact Rejection
SPANSION INC: Proposes Rejections of Contract With Ariba Inc.
SPANSION INC: Samsung Says German Action Should Proceed
SPANSION INC: Wants Order Rejecting Apple Deal Enforced
SPRINT NEXTEL: Virgin Stockholders' Meeting on Nov. 24 to OK Deal
STRAIT GATE: Files for Chapter 11 Bankruptcy Protection
TAYLOR BEAN: Selling Owned Properties for $133 Million
TOWN CENTER: Case Summary & 5 Largest Unsecured Creditors
TRIBUNE CO: Improperly Paying Fees to Lenders, Bondholders Say
TRUMP ENTERTAINMENT: Ordered to Disclose Casino Investments
TUBLEWEED INC: Court to Consider Cash Collateral Access Today
TUBLEWEED INC: Excl. Plan Filing Period Extended Until November 15
UNIVERSAL CITY: Launches Tender Offer for 11 3/4% Senior Notes
UNIVERSAL CITY: Moody's Reviews 'B2' Corporate Family Rating
UTGR INC: Settles With Greyhound Owners
VALENCE TECHNOLOGY: Terminates VP Alastair Johnston's Employment
VERENIUM CORP: Rho Stake Falls Below 5% After Reverse Stock Split
VIRGIN MOBILE: Stockholders' Meeting on Nov. 24 to OK Sprint Deal
VYTERIS INC: Lehman Brothers Bankhaus Discloses 9.1% Stake
WESTMORELAND COAL: Tontine to Assign Stake to New Entity
WILLIAM ALVEAR: Case Summary & 20 Largest Unsecured Creditors
XIOM CORP: Registers 600,000 Shares Issuable Under 2009 Stock Plan
* Fed's Tarullo Says Overhaul Must Address 'Too Big to Fail'
* Big 3 Automakers Reduce Lobbying Expenses
* Large Companies With Insolvent Balance Sheets
*********
ADELPHIA COMMS: Rigases Win Appeal on Conspiracy Charge
-------------------------------------------------------
David Voreacos at Bloomberg News reports that Adelphia
Communications Corp. founder John Rigas and his son Timothy won an
appeals court ruling that may lead to the dismissal of conspiracy
charges in a second criminal case against them.
John Rigas, 84, is serving 12 years and, Timothy Rigas, 53, 17
years for looting Adelphia. After their convictions by a federal
jury in New York in 2004, U.S. prosecutors in Pennsylvania charged
the Rigases in a new case, alleging they conspired to dodge taxes
on $1.9 billion they stole.
According to the report, the Rigases asked an appeals court in
Philadelphia to throw out the conspiracy charge, saying it
amounted to prosecution for the same crime twice, which the
Constitution bars. Two of three judges on an appeals panel agreed
that the same illegal agreement between the men was at the root of
both cases.
"The charges in both indictments relate to a common goal of
enriching the Rigases through Adelphia," the majority said in a
U.S. Third Circuit Court of Appeals opinion. "Both indictments
have a common goal, and individual overt acts in both indictments
were interdependent. Accordingly, the Rigases have established a
strong inference that there was a single agreement."
The court ordered U.S. District Judge John E. Jones III to hold a
hearing where the government must prove the Rigases entered into
two separate illegal agreements. The judge must look at the
"totality of the circumstances" to decide if one or two agreements
existed, the appeals judges said.
"The Rigases are very pleased with this result," said their
attorney, Lawrence McMichael. "We're gratified that the
Third Circuit agreed with the Rigases' legal position on the
federal conspiracy statute."
About Adelphia Communications
Based in Coudersport, Pennsylvania, Adelphia Communications
Corporation (OTC: ADELQ) -- http://www.adelphia.com/-- was a
cable television company. Adelphia served customers in 30 states
and Puerto Rico, and offers analog and digital video services,
Internet access and other advanced services over its broadband
networks. The company and its more than 200 affiliates filed for
Chapter 11 protection in the Southern District of New York on June
25, 2002. Those cases are jointly administered under case number
02-41729. Willkie Farr & Gallagher represented the Debtors in
their restructuring effort. PricewaterhouseCoopers served as the
Debtors' financial advisor. Kasowitz, Benson, Torres & Friedman,
LLP, and Klee, Tuchin, Bogdanoff & Stern LLP represented the
Official Committee of Unsecured Creditors.
Adelphia Cablevision Associates of Radnor, L.P., and 20 of its
affiliates, collectively known as Rigas Managed Entities, are
entities that were previously held or controlled by members of the
Rigas family. In March 2006, the rights and titles to these
entities were transferred to certain subsidiaries of Adelphia
Cablevision LLC. The RME Debtors filed for Chapter 11 protection
on March 31, 2006 (Bankr. S.D.N.Y. Case Nos. 06-10622 through
06-10642). Their cases were jointly administered under Adelphia
Communications and its debtor-affiliates' Chapter 11 cases.
The Bankruptcy Court confirmed the Debtors' Joint Chapter 11 Plan
of Reorganization on Jan. 5, 2007. That plan became effective on
Feb. 13, 2007.
ADVANCED CELL: Files Prospectus for Resale of 192,148,119 Shares
----------------------------------------------------------------
Advanced Cell Technology, Inc., filed with the Securities and
Exchange Commission a prospectus dated October 23, 2009, relating
to the public offering of up to 192,148,119 shares of the
Company's common stock, par value $.001 per share, by selling
stockholders. The shares are issuable to the selling stockholders
upon exercise of warrants which were issued to the selling
stockholders in private placements in September 2005, August 2006,
August 2007, and March 2008, and were amended and restated on July
29, 2009. The Amended and Restated Warrants have an exercise
price of $0.10 and a termination date of June 30, 2014.
The selling stockholders may sell Common Stock from time to time
in the principal market on which the stock is traded at the
prevailing market price or in negotiated transactions.
The Company will not receive any of the proceeds from the sale of
Common Stock by the selling stockholders. It will, however, pay
the expenses of registering these shares.
The common stock is quoted on the Over-the-Counter Bulletin Board
and trades under the symbol "ACTC". The last reported sale price
of the common stock on the Over-the-Counter Bulletin Board on
October 7, 2009, was approximately $0.12 per share.
A full-text copy of the prospectus is available at no charge at
http://ResearchArchives.com/t/s?4777
About Advanced Cell
Based in Worcester, Massachusetts, Advanced Cell Technology Inc.
(OTC BB: ACTC) -- http://www.advancedcell.com/-- is a
biotechnology company focused on developing and commercializing
human embryonic and adult stem cell technology in the emerging
fields of regenerative medicine. Principal activities to date
have included obtaining financing, securing operating facilities,
and conducting research and development. The Company has no
therapeutic products currently available for sale and does not
expect to have any therapeutic products commercially available for
sale for a period of years, if at all.
At June 30, 2009, the Company had $6,431,749 in total assets,
including $918,575 in total current assets, against $78,661,772 in
total liabilities, including $72,472,134 in total current
liabilities, and $1,579,994 in Series A-1 redeemable convertible
preferred stock, $0.001 par value. At June 30, 2009, the Company
had accumulated deficit of $138,254,284 and stockholders' deficit
of $73,810,017.
Advanced Cell warned in an August 2009 regulatory filing it may
not be able to continue as a going concern and fund cash
requirements for operations through the next 12 months with
current cash reserves. The Company has losses from operations,
negative cash flows from operations, a substantial stockholders'
deficit and current liabilities exceed current assets.
ADVANCED MICRO: Board Appoints Craig Conway to Committees
---------------------------------------------------------
Advanced Micro Devices, Inc., reports that its Board of Directors
appointed Craig A. Conway to the Board's Compensation Committee
and Nominating and Corporate Governance Committee, effective
October 20, 2009.
Mr. Conway had been elected to the Company's Board effective
September 27, 2009.
Mr. Conway receives similar benefits the Company provides to non-
employee independent directors for his Board and Committee
service.
About Advanced Micro Devices
Headquartered in Sunnyvale, California, Advanced Micro Devices
Inc. (NYSE: AMD) -- http://www.amd.com/-- provides innovative
processing solutions in the computing, graphics and consumer
electronics markets.
As reported by the Troubled Company Reporter on October 7, 2009,
Standard & Poor's Ratings Services revised its outlook on Advanced
Micro Devices to positive from negative. S&P also affirmed the
company's 'CCC+' corporate credit rating and all issue-level
ratings. The rating reflects AMD's inconsistent and weak
operating profitability, its challenged market position in
microprocessers and uncertainties with respect to ongoing disputes
with Intel Corp. (A+/Stable/A-1+). Sufficient liquidity and its
recent joint venture with Advanced Technology Investment Corp.-
that alleviates heavy capital spending requirements-partly offset
those concerns.
The TCR said May 26, 2009, Fitch revised the senior unsecured debt
rating on Advanced Micro Devices to 'CC/RR6' from 'CCC/RR6'.
Fitch affirmed AMD's Issuer Default Rating at 'B-'. The Rating
Outlook is Negative.
ADVANTA CAPITAL: Fitch Changes Trust Preferred Rating to 'C/RR6'
----------------------------------------------------------------
Fitch Ratings has revised the trust preferred rating of Advanta
Capital Trust I to 'C/RR6' from 'C/RR5' to reflect the reduced
recovery prospects for holders that did not participate in the
company's tender for the securities. All other ratings have been
affirmed.
Concurrently, Fitch has withdrawn the Issuer Default Ratings and
outstanding debt ratings for Advanta Corp. and its subsidiaries.
Fitch has taken these rating actions.
Advanta Capital Trust I
-- Trust preferred revised to 'C/RR6' from 'C/RR5'.
Advanta Corp.
-- Long-term Issuer Default Rating remains at 'RD';
-- Senior debt affirmed at 'C/RR5'.
Advanta Bank Corp.
-- Long-term IDR affirmed at 'CC';
-- Short-term IDR affirmed at 'C';
-- Long-term deposits affirmed at 'B-/RR2'.
All of the ratings have been withdrawn.
Fitch will no longer provide ratings or analytical coverage on
Advanta or its subsidiaries.
AMERALIA INC: Posts $5.7MM Net Loss for Fiscal Year Ended June 30
-----------------------------------------------------------------
AmerAlia Inc. narrowed its net loss to $5,788,307 on revenues of
$6,526,895 for the year ended June 30, 2009, from a net loss of
$46,352,377 on revenues of $17,947,800 in fiscal 2008.
As of June 30, 2009, AmerAlia had $10,151,858 in total assets
against $1,447,654 in total liabilities, resulting in $8,704,204
in stockholders' equity. As of June 30, 2008, AmerAlia had
$37,723,128 in total assets against $89,405,645 in total
liabilities, resulting in $67,059,502 in stockholders' deficit.
AmerAlia says its AmerAlia's ability to continue as a going
concern is dependent upon its ability to obtain additional
financing or capital to meet its ongoing obligations. AmerAlia's
ability to obtain further financing through the offer and sale of
AmerAlia's securities is subject to market conditions and other
factors beyond AmerAlia's control. There is no assurance AmerAlia
will be able to obtain financing on favorable terms or at all. If
cash is insufficient to fund its business operations, they could
be adversely affected. Insufficient funds may require delay,
scaling back or eliminating expenses or employees.
On October 31, 2008 AmerAlia completed a restructuring agreement
wherein AmerAlia and Natural Soda Holdings, Inc., issued new
equity in exchange for cash, settlement of various debt
obligations and to enable NSHI to acquire the 46.5% of Natural
Soda, Inc., previously owned by Sentient USA Resources Fund.
NSHI first acquired its interest in a lease known as the Rock
School lease in 1989. NSI acquired its operating assets and
sodium leases in 2003, an acquisition financed by loans from a
trust and a fund managed by Sentient Asset Management, an
international private equity group specializing in the development
of natural resources.
Prior to closing of the Restructuring Agreement, the Sentient
Entities transferred their various interests to Sentient USA.
As of October 31, 2008, AmerAlia owns 18% of the equity of NSHI
which owns 100% of the equity of NSI. As a result of the
restructuring, AmerAlia no longer has a controlling interest in
NSHI or its direct subsidiary, NSI. Nevertheless, AmerAlia's
participation in the management and development of NSHI and NSI
remains its principal business activity.
NSI uses solution mining to recover sodium bicarbonate for sale to
the animal feed, human food, pharmaceutical, personal products and
industrial uses including for flue gas desulfurization.
AmerAlia is attempting to acquire some or all of the outstanding
shares of NSHI it does not own from Sentient so that it can secure
majority ownership. If AmerAlia cannot achieve this objective it
will likely have to register as an investment company or seek
alternative means of complying with the Investment Company Act.
AmerAlia is discussing this issue with Sentient and the Securities
and Exchange Commission.
Pursuant to the Restructuring Agreement, as amended:
-- Sentient exchanged all its NSHI debentures and all accrued
interest, its one share of NSHI common stock and its 53.5%
of the common stock of NSI for 82% of the issued common
stock of NSHI;
-- AmerAlia exchanged its NSHI debentures and all accrued
interest thereon and its NSHI preferred stock for 12.9% of
the issued common stock of NSHI, giving AmerAlia an
aggregate ownership position in NSHI of 18%;
-- Intercompany loans between AmerAlia and NSHI were
extinguished;
-- Sentient's indemnification rights relating to the
extinguishment of a $9.9 million bank loan were
terminated; and
-- Sentient received an aggregate of 40,024,675 shares of
AmerAlia common stock.
Sentient no longer holds any debt in either AmerAlia or NSHI. All
debentures issued by NSHI have been cancelled. NSI is now a
wholly owned subsidiary of NSHI.
AmerAlia extinguished other obligations in exchange for the issue
of shares of the common stock. Sentient now owns 72.4% of
AmerAlia's common stock. When combined with its limited
additional purchase rights, Sentient's beneficial ownership is
74.5%.
A full-text copy of AmerAlia's annual report is available at no
charge at http://ResearchArchives.com/t/s?4779
About AmerAlia Inc.
AmerAlia, Inc., is in the business of selling a range of natural
products initially derived from the recovery of its natural sodium
resources, the utilization of its water rights and of seeking
title to oil shale resources intermingled with its sodium
resource. These resources are located in the Piceance Creek Basin
in North West Colorado.
AmerAlia, Inc.'s March 31, 2009, balance sheet showed total assets
of $10,805,813 and total liabilities of $1,922,230 resulting in
stockholders' equity of $8,883,583. At March 31, 2009, the
Company had $111,001,161 in accumulated deficit.
AMERICAN FAMILY: Fails to Turn Over Customer List to Court
----------------------------------------------------------
James Nash at The Columbus Dispatch reports that American Family
Prepaid Legal Corp. and affiliate Heritage Marketing and Insurance
Services have defied an order by an Ohio Supreme Court to submit
its customer list, saying that it no longer has the information.
The Dispatch relates that the Columbus Bar Association had asked
for the names and contact information of people who allegedly were
swindled by American Family and Heritage Marketing. According to
The Dispatch, American Family said that Puritan Financial Group
acquired its customer list in a bankruptcy sale. Heritage
Marketing, The Dispatch states, said that its clients were
absorbed by Quest Financial. Quest is still related to Heritage
Marketing and should have to turn over its customer list, the
report says, citing Columbus Bar Association lawyer Joyce Edelman.
American Family Prepaid Legal Corp. and affiliate Heritage
Marketing and Insurance Services sold prepaid legal services and
annuities to thousands of Ohioans. American Family declared
bankruptcy in 2007, and its assets were sold to Puritan Financial
Services Inc. in 2008.
AMERICAN INT'L: Pays Out Retention Bonuses, Retirement Benefit
--------------------------------------------------------------
Lavonne Kuykendall at The Wall Street Journal reports that
American International Group Inc. paid out retention bonuses and a
retirement benefit that had been held up by the review, a day
after U.S. pay czar Kenneth R. Feinberg finalized his review of
the Company's compensation plans.
On October 22, 2009, the Office of the Special Master for TARP
Executive Compensation issued a Determination Memorandum to AIG
with respect to the Company's compensation of its top 25 most
highly compensated employees. The Determination Memorandum sets
significant new restrictions on compensation of the Covered
Employees.
AIG voluntarily delayed a number of previously committed payments
throughout 2009, including delaying the payment of previously
granted retention awards to executive officers pending the release
of the Determination Memorandum. These awards were initially
payable 60% on December 31, 2008, and later extended to April
2009, and 40% payable December 31, 2009, and later extended to
April 2010. These awards and their status were discussed in AIG's
Proxy Statement in respect of its 2009 Annual Meeting of
Shareholders. There are four Covered Employees who were granted
these retention awards, including David L. Herzog, Executive Vice
President and Chief Financial Officer, and Kristian P. Moor,
Executive Vice President - Property Casualty Group.
In light of public concerns regarding levels of executive
compensation and as discussed with the Office of the Special
Master, the Compensation and Management Resources Committee of
AIG's Board of Directors determined to make payment of these
previously granted and earned executive retention awards
contingent upon meeting performance goals related to AIG's
restructuring and to divide the April 2009 amount into three equal
installments to be paid (subject to performance) in June,
September and December, 2009. The Committee previously determined
that AIG had achieved sufficient performance under its
restructuring plan to permit the payment of the first two
installments, and in the Determination Memorandum, the Office of
the Special Master concluded that further "restructuring of these
'retention' contracts would not be consistent with the Public
Interest Standard."
On October 23, 2009, the Committee authorized payment of the Past
Due Installments of the executive retention award, resulting in
authorized payments of $1,000,000 and $1,600,000 to Messrs. Herzog
and Moor, respectively. The authorized Past Due Installments for
the Covered Executives aggregated $4,000,000 and for all AIG
executive officers were $12,100,000.
Mr. Edmund S.W. Tse, former Senior Vice Chairman - Life Insurance,
who retired at the 2009 Annual Meeting of Shareholders, is also a
Covered Employee. AIG has authorized the payment of contractual
obligations due on Mr. Tse's retirement that were delayed and
previously disclosed in the 2009 Proxy Statement. Mr. Tse will
not be entitled to any additional payments as a result of his
service during 2009 as an AIG employee. As described in the 2009
Proxy Statement, Mr. Tse is also party to a Service Agreement with
American International Assurance Company, Limited, an insurance
subsidiary of AIG based in Hong Kong. Citing a person familiar
with the matter, The Journal says that AIG also paid about
$14.4 million to the retirement account of Edmund S. W. Tse, the
former senior vice chairman of life insurance who retired at AIG's
2009 annual meeting.
According to The Journal, some $8.1 million was paid to a number
of other employees, all as retention payments that were due to be
paid beginning earlier in 2009 but were delayed due to AIG's
status as one of the seven companies that received large amounts
of money from the Troubled Asset Relief Program.
About AIG Inc.
Based in New York, American International Group, Inc., is the
leading international insurance organization with operation in
more than 130 countries and jurisdictions. AIG companies serve
commercial, institutional and individual customers through the
most extensive worldwide property-casualty and life insurance
networks of any insurer. In addition, AIG companies are leading
providers of retirement services, financial services and asset
management around the world. AIG's common stock is listed on the
New York Stock Exchange, as well as the stock exchanges in Ireland
and Tokyo.
In September 2008, AIG experienced a liquidity crunch when its
credit ratings were downgraded below "AA" levels by Standard &
Poor's, Moody's Investors Service and Fitch Ratings. On
September 16, 2008, the Federal Reserve Bank created an
$85 billion credit facility to enable AIG to meet increased
collateral obligations consequent to the ratings downgrade, in
exchange for the issuance of a stock warrant to the Fed for 79.9%
of the equity of AIG. The credit facility was eventually
increased to as much as $182.5 billion.
AIG has sold a number of its subsidiaries and other assets to pay
down loans received from the U.S. government, and continues to
seek buyers of its assets.
AMERICAN INT'L: Receives TARP Memo on Payment to Top 25 Employees
-----------------------------------------------------------------
The Office of the Special Master for TARP Executive Compensation
on October 22, 2009, issued a Determination Memorandum to American
International Group, Inc., with respect to AIG's compensation of
its top 25 most highly compensated employees. The Determination
Memorandum sets significant new restrictions on compensation of
the Covered Employees.
The Special Master has determined that 2009 compensation for AIG's
senior executive officers and most highly compensated employees
generally must comport with these important standards:
-- Base salary paid in cash should not exceed $500,000 per
year, except in appropriate cases for good cause shown.
Such good cause will not exist in any case in which the
employee is to be paid a substantial cash amount pursuant
to a previously existing agreement between AIG and the
employee. Overall, cash compensation must be significantly
reduced from cash amounts paid in 2008. In AIG's case,
cash compensation for these employees will decrease 91%
from 2008 levels.
-- Rather than cash, the majority of each individual's base
salary will be paid in the form of stock units reflecting
the value of a "basket" of four AIG insurance subsidiaries
that the Company, the Federal Reserve Bank of New York,
and the Department of the Treasury have identified as
critical to the future of the company. The units will
immediately vest, in accordance with the Interim Final
Rule, but will only be redeemable in three equal, annual
installments beginning on the second anniversary of the
date they are earned, with each installment redeemable one
year early if AIG repays its TARP obligations. This
structure encourages employees to remain employed by AIG
and to maximize the value of the businesses most important
to its long-term stability while avoiding incentives for
unnecessary risk-taking. Other terms and conditions of
these stock units, including any alterations to the
structure of the "basket" to maintain appropriate
incentives for employees, will be determined by the AIG,
subject to the Special Master's approval.
-- Total compensation for each individual must be appropriate
when compared with total compensation provided to persons
in similar positions or roles at similar entities.
Overall, total compensation must be significantly reduced
from the amounts paid in 2008. In AIG's case, total
compensation for these employees will decrease 58% from
2008 levels.
-- If -- and only if -- the employee achieves objective
performance metrics developed and reviewed in consultation
with the Office of the Special Master, the employee may be
eligible for long-term incentive awards. These awards,
however, must be payable in the form of restricted stock
that will be forfeited unless the employee stays with AIG
for at least three years following grant, and may only be
redeemed in 25% installments for each 25% of AIG's TARP
obligations that are repaid. Such long-term incentive
awards may not exceed one third of total annual
compensation.
-- Employees of AIG Financial Products will receive only cash
base salaries through the balance of 2009. Employees who
pledged to return amounts paid pursuant to previously
existing retention awards must immediately repay the
pledged amount.
-- Any and all incentive compensation will be subject to
recovery or "clawback" if the payments are based on
materially inaccurate financial statements, any other
materially inaccurate performance metrics, or if the
employee is terminated due to misconduct that occurred
during the period in which the incentive was earned.
-- Any and all "other" compensation and perquisites will not
exceed $25,000 for each employee (absent exceptional
circumstances for good cause shown to the satisfaction of
the Special Master).
-- No severance benefit to which an employee becomes entitled
in the future may take into account a cash salary
increase, or any payment of stock salary, that the Special
Master has approved for 2009.
-- No additional amounts in 2009 may be accrued under
supplemental executive retirement plans or credited by the
company to other "non-qualified deferred compensation"
plans after the date of the Determination Memorandum.
A full-text copy of the memorandum is available at no charge at:
http://ResearchArchives.com/t/s?4768
AIG voluntarily delayed a number of previously committed payments
throughout 2009, including delaying the payment of previously
granted retention awards to executive officers pending the release
of the Determination Memorandum. The awards were initially
payable 60% on December 31, 2008, and later extended to April
2009, and 40% payable December 31, 2009, and later extended to
April 2010. The awards and their status were discussed in AIG's
Proxy Statement in respect of its 2009 Annual Meeting of
Shareholders. There are four Covered Employees who were granted
these retention awards, including David L. Herzog, Executive Vice
President and Chief Financial Officer, and Kristian P. Moor,
Executive Vice President - Property Casualty Group.
In light of public concerns regarding levels of executive
compensation and as discussed with the Office of the Special
Master, the Compensation and Management Resources Committee of
AIG's Board of Directors determined to make payment of the
previously granted and earned executive retention awards
contingent upon meeting performance goals related to AIG's
restructuring and to divide the April 2009 amount into three equal
installments to be paid (subject to performance) in June,
September and December 2009. The Committee previously determined
that AIG had achieved sufficient performance under its
restructuring plan to permit the payment of the first two
installments -- Past Due Installments -- and in the Determination
Memorandum, the Office of the Special Master concluded that
further "restructuring of these 'retention' contracts would not be
consistent with the Public Interest Standard." This conclusion
was with respect to three Covered Employees.
On October 23, 2009, the Committee authorized payment of the Past
Due Installments of the executive retention award, resulting in
authorized payments of $1,000,000 and $1,600,000 to Messrs. Herzog
and Moor, respectively. The authorized Past Due Installments for
the Covered Executives aggregated $4,000,000 and for all AIG
executive officers were $12,100,000.
Edmund S.W. Tse, former Senior Vice Chairman - Life Insurance, who
retired at the 2009 Annual Meeting of Shareholders, is also a
Covered Employee. AIG has authorized the payment of contractual
obligations due on Mr. Tse's retirement that were delayed and
previously disclosed in the 2009 Proxy Statement. Mr. Tse will
not be entitled to any additional payments as a result of his
service during 2009 as an AIG employee. As described in the 2009
Proxy Statement, Mr. Tse is also party to a Service Agreement with
American International Assurance Company, Limited, an insurance
subsidiary of AIG based in Hong Kong.
The significant restrictions and limitations on compensation
imposed by the Determination Memorandum may adversely affect AIG's
ability to retain and motivate its highest performing employees.
An inability of AIG to retain and motivate its highest performing
employees may impact its ability to stabilize its businesses,
execute on its asset disposition plan and prepare and make
required filings with the Securities and Exchange Commission and
other federal, state and foreign regulators.
About AIG Inc.
Based in New York, American International Group, Inc., is the
leading international insurance organization with operation in
more than 130 countries and jurisdictions. AIG companies serve
commercial, institutional and individual customers through the
most extensive worldwide property-casualty and life insurance
networks of any insurer. In addition, AIG companies are leading
providers of retirement services, financial services and asset
management around the world. AIG's common stock is listed on the
New York Stock Exchange, as well as the stock exchanges in Ireland
and Tokyo.
In September 2008, AIG experienced a liquidity crunch when its
credit ratings were downgraded below "AA" levels by Standard &
Poor's, Moody's Investors Service and Fitch Ratings. On
September 16, 2008, the Federal Reserve Bank created an
$85 billion credit facility to enable AIG to meet increased
collateral obligations consequent to the ratings downgrade, in
exchange for the issuance of a stock warrant to the Fed for 79.9%
of the equity of AIG. The credit facility was eventually
increased to as much as $182.5 billion.
AIG has sold a number of its subsidiaries and other assets to pay
down loans received from the U.S. government, and continues to
seek buyers of its assets.
AMORE BEAUTY: Files for Chapter 11 Bankruptcy Protection
--------------------------------------------------------
Amore Beauty & Spa Inc. filed for Chapter 11 bankruptcy protection
in a bankruptcy court in New York on October 13, listing $100,001
to $500,000 in liabilities and $50,001 to $100,000 in assets.
Amore Beauty's unsecured creditors include Hyung Joo Nam, which is
owed $238,997.45, and BNB Bank, owed about $135,079.35.
Amore Beauty & Spa Inc., dba A Relax Me Beauty and Spa, is based
in Manhattan.
ANEKONA LLC: Court Approves Dismissal of Reorganization Case
------------------------------------------------------------
The Hon. Robert J. Faris of the U.S. Bankruptcy Court for the
District of Hawaii approved the dismissal of Anekona LLC's
Chapter 11 case.
Terri H. Didion, Acting U.S. Trustee for Region 15, asked the
Court for the dismissal, relating that: (i) the Debtor's sole
asset, Coconut Grove Marketplace, is fully encumbered by two bank
loans and it will be unlikely that unsecured creditors receive a
distribution in this case; and (ii) the Debtor's lacked compliance
with its basic obligations in the case.
Kamuela, Hawaii-based Anekona, LLC, is a real estate developer.
The Company filed for Chapter 11 relief on June 26, 2009 (D.
Hawaii Case No. 09-01439). William H. Gilardy, Jr., Esq.,
represents the Debtor. In its petition, the Debtor listed between
$10 million and $50 million each in assets and debts.
ASARCO LLC: Has Deal With Safeco on Claims
------------------------------------------
ASARCO LLC asks the Court to approve its stipulation regarding
the treatment of Claim Nos. 10429, 10430, 11170, and 11208 filed
by Safeco Insurance Company of America, General Insurance Company
of America, and First National Insurance Company of America.
On July 27, 2006, Safeco filed against ASARCO a "Proof of Claim
No. 10429", as supplemented by "Proof of Claim No. 11208",
asserting a contingent, unsecured, non-priority claim for
$19,349,829, which represents the penal sum of all bonds ever
issued on behalf of ASARC, and its predecessor, Asarco
Incorporated. Safeco also filed against ASARCO Master Inc.
"Proof of Claim No. 10430", as supplemented by a "Proof of Claim
No. 11170", asserting a contingent, unsecured, non-priority claim
for $8,470,495, which represents the penal sum of all bonds ever
issued on behalf of Midland Coal Company, Inc., a division of
Asarco Inc.; American Limestone Company; and various other
entities and individuals.
The Debtors subsequently sought the disallowance of certain
surety bond and insurance provider claims, including Safeco's
Claims. The Court established September 19, 2008, as the bar
date for filing administrative expense claims against the
Debtors. By that time, Safeco has not filed any claim asserting
an administrative expense or other priority claim against the
Debtors.
The state of Montana, Department of Labor and Industry,
Employment Relations Division, filed a proof of claim against
ASARCO asserting, among other things, an administrative expense
claim for the amount of benefits paid by the Montana DLI to
former ASARCO workers in the State for workers' compensation and
occupational disease claims paid after the Petition Date. ASARCO
disputes the classification of that portion of the Montana DLI
claim as an administrative expense.
After good-faith discussions, the parties stipulate and agree
that:
(a) Claim Nos. 10429 and 10430 are deemed withdrawn;
(b) Claim No. 11208 is deemed partially allowed. Safeco will
receive a general, unsecured, non-priority claim for
$537,917. The remaining amounts asserted in Claim No.
11208 are deemed disallowed, without prejudice to Safeco
seeking reconsideration and amendment of Claim No. 11208
under the Bankruptcy Code and the Federal Rules of
Bankruptcy Procedure, based on:
* additional payments by Safeco relating to bonds Safeco
issued on behalf of ASARCO and the Debtors; and
* Safeco's rights to subrogation, if any, under common
law, the Bankruptcy Code, and the Bankruptcy Rules, and
subject to the Debtors' right to oppose any
reconsideration or amendment;
(c) Claim No. 11170 is deemed disallowed in its entirety,
without prejudice to Safeco seeking reconsideration and
amendment; and
(d) Nothing in the stipulation will affect Safeco's equitable
rights of subrogation, if any, or Safeco's assignment of
and being equitably subrogated to the Montana DLI Claim to
the extent of Safeco's payment to Montana DLI, and nothing
contained in the stipulation will be construed to prevent
the Debtors from contending that Safeco's purported rights
of subrogation are less expansive than Safeco contends.
About Asarco LLC
Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/--
is an integrated copper mining, smelting and refining company.
Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent.
ASARCO LLC filed for Chapter 11 protection on August 9, 2005
(Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack
L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts
L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq.,
and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth,
P.C., represent the Debtor in its restructuring efforts. Paul M.
Singer, Esq., James C. McCarroll, Esq., and Derek J. Baker, Esq.,
at Reed Smith LLP give legal advice to the Official Committee of
Unsecured Creditors and David J. Beckman at FTI Consulting, Inc.,
gives financial advisory services to the Committee.
When ASARCO LLC filed for protection from its creditors, it listed
US$600 million in total assets and US$1 billion in total debts.
ASARCO LLC has five affiliates that filed for Chapter 11
protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos.
05-20521 through 05-20525). They are Lac d'Amiante Du Quebec
Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company,
Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Sander L.
Esserman, Esq., at Stutzman, Bromberg, Esserman & Plifka, APC, in
Dallas, Texas, represents the Official Committee of Unsecured
Creditors for the Asbestos Debtors. Former judge Robert C. Pate
has been appointed as the future claims representative. Details
about their asbestos-driven Chapter 11 filings have appeared in
the Troubled Company Reporter since April 18, 2005.
Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle,
Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05-
21346) also filed for Chapter 11 protection, and ASARCO has asked
that the three subsidiary cases be jointly administered with its
Chapter 11 case. On October 24, 2005, Encycle/Texas' case was
converted to a Chapter 7 liquidation proceeding. The Court
appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7
Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at
Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee.
ASARCO's affiliates, AR Sacaton LLC, Southern Peru Holdings LLC,
and ASARCO Exploration Company Inc., filed for Chapter 11
protection on December 12, 2006. (Bankr. S.D. Tex. Case No.
06-20774 to 06-20776).
Six of ASARCO's affiliates, Wyoming Mining & Milling Co., Alta
Mining & Development Co., Tulipan Co., Inc., Blackhawk Mining &
Development Co., Ltd., Peru Mining Exploration & Development Co.,
and Green Hill Cleveland Mining Co. filed for Chapter 11
protection on April 21, 2008. (Bank. S.D. Tex. Case No. 08-20197
to 08-20202).
Bankruptcy Creditors' Service, Inc., publishes ASARCO Bankruptcy
News. The newsletter tracks the Chapter 11 proceeding undertaken
by ASARCO LLC and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
BANK OF AMERICA: Merrill Lynch's Castillo Quits
-----------------------------------------------
Ambereen Choudhury and Jacqueline Simmons at Bloomberg News report
that Bank of America-Merrill Lynch's European head of wealth
management, Eva Castillo, will leave the firm at the end of the
year.
Ms. Castillo, 46, is leaving after 12 years at Merrill Lynch to
pursue "other career and personal opportunities," according to
a memo from Sallie Krawcheck, president of global wealth and
investment management. The bank is seeking a replacement.
Her departure follows that of Daniel Sontag, who ran Merrill
Lynch's wealth management unit until he was replaced by Ms.
Krawcheck in August. Robert McCann, who quit as Merrill Lynch's
brokerage head in January, has separately been in talks with UBS
AG to become head of its wealth management unit in the Americas,
people familiar with the matter said in August.
Ms. Castillo worked for Goldman Sachs Group Inc. before moving
to Merrill Lynch. She joined the firm as head of equity markets
for Spain and Portugal, and has had jobs including running
global markets and investment banking in Iberia.
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.
BofA sought government backing 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 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.
BANKUNITED FINANCIAL: Fitch Withdraws 'D' Issuer Default Rating
---------------------------------------------------------------
Fitch Ratings has withdrawn the Issuer Default Rating and
outstanding debt ratings for BankUnited Financial Corporation and
its subsidiaries:
BankUnited Financial Corporation
-- Long-term IDR at 'D';
-- Short-term IDR at 'C';
-- Senior debt at 'C/RR6';
-- Individual at 'F';
-- Support rating remains at '5';
-- Support floor remains at 'NF'.
BankUnited Statutory Trust VIII, IX, XI, XII
-- Preferred stock at 'C/RR6'.
BankUnited
-- Long-term deposits at 'B-'; removed from Rating Watch
Positive and withdrawn;
-- Short-term deposits 'B'; removed from Rating Watch Positive
and withdrawn.
Fitch will no longer provide ratings or analytical coverage on
BKUNA or its subsidiaries.
BARRIERS INC: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Barriers Inc.
4800 E Douglas Ave
Wichita, KS 67208-4018
Bankruptcy Case No.: 09-13503
Chapter 11 Petition Date: October 23, 2009
Court: United States Bankruptcy Court
District of Kansas (Wichita)
Judge: Chief Judge Robert E. Nugent
Debtor's Counsel: Edward J. Nazar, Esq.
245 North Waco, Suite 402
Wichita, KS 67202
Tel: (316) 262-8361
Fax: (316) 263-0610
Email: ebn1@redmondnazar.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $500,001 to $1,000,000
According to the schedules, the Company has assets of $2,815,582,
and total debts of $932,788.
A full-text copy of the Debtor's petition, including a list of its
20 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/ksb09-13503.pdf
The petition was signed by Mary Ellen Barrier, president of the
Company.
BERNARD MADOFF: Jeffry Picower Dies; Picard Continues Lawsuit
-------------------------------------------------------------
Investor and philanthropist Jeffry Picower died on Sunday in Palm
Beach, Florida.
Irving H. Picard, the trustee liquidating Bernard L. Madoff
Investment Securities LLC, has sued Mr. Picower and his foundation
$7 billion, to recover fictitious profits that the latter has
withdrawn from Madoff. Mr. Picower denied that he knowingly
profited from the Ponzi scheme.
According to The Wall Street Journal, the police said that they
responded to a 9-1-1 call just after noon Sunday from
Mr. Picower's wife who said that she had found her husband at the
bottom of their swimming pool. Mr. Picower was brought to the
hospital, where he was pronounced dead. The Picower family's
spokesperson, Marcia Horowitz, said that Mr. Picower had been
suffering from Parkinson's disease and "a number of heart-related
medical issues" for which he met regularly with cardiologists, The
Journal states. The police department said that it is conducting
an investigation, the report says.
"We will pursue the litigation with the same vigor irrespective of
Mr. Picower's passing," The Journal quoted David Sheehan, Irving
Picard's lawyer, as saying. There had been talks with
Mr. Picower's lawyers but it was unclear whether a settlement
would have been reached, the report states, citing Mr. Sheehan.
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.).
BGM PASADENA LLC: Case Summary & 7 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: BGM Pasadena LLC
210 S Orange Blvd
Pasadena, CA 91105
Case No.: 09-39135
Chapter 11 Petition Date: October 22, 2009
Court: United States Bankruptcy Court
Central District of California (Los Angeles)
Judge: Vincent P. Zurzolo
Debtor's Counsel: John Schock, Esq.
21050 Orange Grove Suite 200
Pasadena, CA 91105
Tel: (626) 298 6446
Estimated Assets: $10,000,001 to $50,000,000
Estimated Debts: $1,000,001 to $10,000,000
Debtor's List of 7 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
City Wide Maintenance Trade Debt $12,800
DB Pasadena Holdco, LLC Trade Debt $10,993
EDAW Inc. Trade Debt $3,958
Farmers Insurance Exchange Insurance $4,373
The Gas Company Trade Debt $456
J & J Plumbing Service Trade Debt $78,592
Kelly Sutherlin McLeod Trade Debt $2,867
Architecture
BRISAR HOLDINGS LLC: Case Summary & 4 Largest Unsecured Creditors
-----------------------------------------------------------------
Debtor: BRISAR HOLDINGS, L.L.C.
150 East 7th Street
Paterson, NJ 07524
Bankruptcy Case No.: 09-38362
Chapter 11 Petition Date: October 23, 2009
Court: United States Bankruptcy Court
District of New Jersey (Newark)
Debtor's Counsel: Jeffrey A. Cooper, Esq.
Carella, Bryne, Bain, Gilfillan, Cecchi
5 Becker Farm Road
Roseland, NJ 07068-1735
Tel: (973) 994-1700
Email: JCooper@carellabyrne.com
Marc D. Miceli, Esq.
Carella, Byrne, et al.
5 Becker Farm Rd.
Roseland, NJ 07066
Tel: (973) 994-1700
Email: mmiceli@carellabyrne.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
A full-text copy of the Debtor's petition, including a list of its
4 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/njb09-38362.pdf
The petition was signed by Mark J. Cohen, president of the
Company.
BRISAR INDUSTRIES: Case Summary & 20 Largest Unsec. Creditors
-------------------------------------------------------------
Debtor: Brisar Industries, Inc.
150 East 7th Street
Paterson, NJ 07524
Bankruptcy Case No.: 09-38357
Chapter 11 Petition Date: October 23, 2009
Court: United States Bankruptcy Court
District of New Jersey (Newark)
Debtor's Counsel: Jeffrey A. Cooper, Esq.
Carella, Bryne, Bain, Gilfillan, Cecchi
5 Becker Farm Road
Roseland, NJ 07068-1735
Tel: (973) 994-1700
Email: JCooper@carellabyrne.com
Marc D. Miceli, Esq.
Carella, Byrne, et al.
5 Becker Farm Rd.
Roseland, NJ 07066
Tel: (973) 994-1700
Email: mmiceli@carellabyrne.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
A full-text copy of the Debtor's petition, including a list of its
20 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/njb09-38357.pdf
The petition was signed by Mark J. Cohen, president of the
Company.
BULLDOG TIRE RECYCLING INC: Voluntary Chapter 11 Case Summary
-------------------------------------------------------------
Debtor: Bulldog Tire Recycling, Inc.
1400 S. Travis
Cleveland, TX 77327
Bankruptcy Case No.: 09-37990
Chapter 11 Petition Date: October 23, 2009
Court: United States Bankruptcy Court
Southern District of Texas (Houston)
Judge: Letitia Z. Paul
Debtor's Counsel: Richard L. Fuqua II, Esq.
Fuqua & Keim
2777 Allen Parkway, Suite 480
Houston, TX 77019
Tel: (713) 960-0277
Email: fuqua@fuquakeim.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
The Debtor did not file a list of its 20 largest unsecured
creditors when it filed its petition.
The petition was signed by Robert Harrison, president of the
Company.
BURLINGTON COAT: Has 2% Increase in Sept. Comparative Store Sales
-----------------------------------------------------------------
Burlington Coat Factory Investments Holdings, Inc., held a
conference call on October 23, 2009, at 10:00 a.m., Eastern Time,
to discuss its first quarter fiscal 2010 operating results.
Thomas A. Kingsbury, the Company's president and chief executive
officer, said, "The first quarter of Fiscal 2010 was impacted in
some degree by the shift in Labor Day, and given that September is
the start of a very important quarter, I am pleased to report that
in September we experienced a 2.0% increase in comparative store
sales."
Todd Weyhrich, the Company's executive vice president and chief
financial officer, said "As of [October 23] we have no borrowings
outstanding on our ABL Line of Credit and have $549 million of
unused availability. This compares with $295 million of
availability at this time last year."
As reported by the Troubled Company Reporter on October 19, 2009,
Burlington Coat and its operating subsidiaries announced its
results for the first quarter ended August 29, 2009. The Company
posted a net loss of $23.4 million for the three months ended
August 29, 2009, from a net loss of $32.4 million for the same
period ended August 30, 2008.
Net sales were $704.7 million for the three months ended
August 29, 2009, compared with $707.0 million for the three months
ended August 30, 2008, a 0.3% decrease. Comparative store sales
decreased 6.9%.
Adjusted EBITDA was $22.0 million for the three months ended
August 29, 2009, compared with $16.5 million for the three months
ended August 30, 2008. The increase in the Company's Adjusted
EBITDA of $5.5 million is primarily the result of continued cost
reductions from initiatives implemented during the third and
fourth quarters of Fiscal 2009.
At August 29, 2009, the Company had $2.59 billion in total assets
against total current liabilities of $710.6 million, long-term
debt of $1.30 billion, other liabilities of $149.0 million,
deferred tax liability of $319.8 million; resulting in
stockholders' equity of $111.6 million.
Mr. Kingsbury said, "We are pleased to be able to report a 33%
increase in Adjusted EBITDA. The ongoing success of our expense
reduction and inventory management initiatives continue to provide
us with the liquidity to take advantage of the many opportunistic
buys available in the marketplace as well as the ability to invest
in our very important store experience initiative."
A full-text copy of the Company's quarterly report on Form 10-Q is
available at no charge at http://ResearchArchives.com/t/s?470d
About Burlington Coat Factory
Burlington Coat Factory -- http://www.burlingtoncoatfactory.com/
-- is a nationally recognized retailer of branded apparel, shoes
and accessories for men, women and children. The Company
currently serves its customers through its 442 stores in 44 states
and Puerto Rico. As of October 16, 2009, the Company operates 442
stores under the names "Burlington Coat Factory Warehouse" (424
stores), "MJM Designer Shoes" (15 stores), "Cohoes Fashions" (two
stores), and "Super Baby Depot" (one store) in 44 states and
Puerto Rico.
As reported by the Troubled Company Reporter on June 29, 2009,
Fitch Ratings affirmed its Issuer Default Rating at 'B-';
US$800 million asset-based revolver rating at 'B+/RR1';
US$900 million term loan rating at 'B/RR3', on Burlington Coat
Factory Warehouse Corp. Fitch revised these ratings to reflect
the new issue rating definitions as of March 2009 --
US$305 million senior unsecured notes revised to 'CC/RR6' from
'CCC/RR6'; US$99 million senior discount notes revised to 'C/RR6'
from 'CCC-/RR6'.
CABI DOWNTOWN: No Official Depositors' Committee
------------------------------------------------
The Bankruptcy Court has denied a request for an official
committee in Cabi Downtown, LLC's case to represent buyers with
purchase deposits held in escrow. A statutory committee is
entitled to retain counsel and financial advisors.
Prior to the entry of the order, 67 individuals who signed
contracts to buy units and made deposits into escrow before the
bankruptcy filing have filed a suit against Cabi Downtown for a
return of their deposits. The buyers, who all refused to complete
the purchases, contend that Cabi was in default, entitling them to
the return of their deposits. Even if they should have completed
the purchases, the lawsuit seeks a declaration that the purchasers
are entitled to a return of some of the deposits under the
contracts and Florida law.
Aventura, Florida-based Cabi Downtown, LLC, operates a real estate
business and owns the 49-story Everglades on the Bay condominium
in Miami. The condominium project has 849 units in two towers,
with 60,000 square feet of retail space. The Company is owed by
GICSA, which says it is the largest and most profitable real
estate developer in Mexico.
The Company filed for Chapter 11 on Aug. 18, 2009 (Bankr. S.D.
Fla. Case No. 09-27168). Mindy A. Mora, Esq., represents the
Debtor in its restructuring efforts. In its petition, the Debtor
listed assets and debts both ranging from US$100,000,001 to
US$500,000,000.
CAPITAL AUTOMOTIVE: S&P Affirms Corporate Credit Ratings at 'B'
---------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B' corporate
credit ratings on Capital Automotive LLC and Capital Automotive
L.P. following the company's recent loan amendment and extension.
S&P also affirmed its 'B' rating on CARS' senior secured debt and
assigned a 'B' rating to Capital Automotive L.P.'s new term loan.
S&P maintain its '3' recovery rating on this debt, indicating
S&P's expectation of a meaningful recovery (50%-70%) in the event
of a payment default. The outlook on CARS is negative. Based on
many factors, S&P considers CARS' loan amendment and extension to
be opportunistic rather than distressed, but most importantly
because the consenting lenders are expected to receive no less
value than the promise of the original securities.
"The affirmations reflect the benefits of the loan amendment and
extension, which helps alleviate S&P's previous concerns regarding
CARS' refinancing and covenant pressures," said credit analyst
Elizabeth Campbell. "Prior to the loan extension, the revolver
was scheduled to mature in December 2009, and the large term loan
was scheduled to mature in December 2010."
By implementing the loan amendment and extension, CARS has pushed
out most of its near-term debt. However, the company does still
face $167 million of debt maturities in December 2010, which the
company plans to fund with asset sales proceeds, debt borrowings,
and retained cash flow from operations. Despite modest
deleveraging following the amendment, CARS' leverage remains high
and S&P expects debt service coverage to remain slim. S&P also
remain concerned about the pressure that CARS' auto dealer tenant
base faces due to a significant drop in auto sales and the
negative pressure this will likely place on the valuation of auto
dealerships.
S&P's maintenance of a negative outlook continues to reflect CARS'
longer-term recapitalization need and S&P's expectation that the
company's counterparty risk will remain high as its tenants'
underlying businesses remain challenged. CARS' financial profile
will remain weak with high leverage, constrained liquidity, and
slim debt service coverage. S&P will lower the ratings on CARS if
key tenants come under pressure and jeopardize CARS' rental
income; if leverage rises; or if debt service coverage falls below
1.2x. Although unlikely in the near-term, S&P would revise the
outlook to stable upon sustained improvement in CARS' financial
profile and the health of its tenants.
CAPMARK FINANCIAL: Case Summary & 30 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: Capmark Financial Group Inc.
aka GMAC Commercial Holding Corp.
116 Welsh Road
Horsham, PA 19044
Bankruptcy Case No.: 09-13684
Debtor-affiliates filing subject to Chapter 11 petitions:
Entity Case No.
------ --------
Summit Crest Ventures, LLC 09-13683
Paramount Managing Member LLC 09-13685
Paramount Managing Member II, LLC 09-13686
Capmark Capital Inc. 09-13687
Paramount Managing Member III, LLC 09-13688
Capmark Finance Inc. 09-13689
Paramount Managing Member IV, LLC 09-13690
Capmark Affordable Properties Inc. 09-13691
Commercial Equity Investments, Inc. 09-13692
Paramount Managing Member V, LLC 09-13693
Paramount Managing Member XXIII, LLC 09-13694
Paramount Managing Member VI, LLC 09-13695
Mortgage Investments, LLC 09-13696
Paramount Managing Member VII, LLC 09-13697
Paramount Managing Member XXIV, LLC 09-13698
Net Lease Acquisition LLC 09-13699
Paramount Managing Member VIII, LLC 09-13700
SJM Cap, LLC 09-13701
Paramount Managing Member IX, LLC 09-13702
Paramount Managing Member 30, LLC 09-13703
Capmark Affordable Equity Holdings Inc. 09-13704
Paramount Managing Member XI, LLC 09-13705
Paramount Managing Member 31, LLC 09-13706
Capmark REO Holding LLC 09-13707
Paramount Managing Member XII, LLC 09-13708
Paramount Managing Member 33, LLC 09-13709
Paramount Managing Member AMBAC II, LLC 09-13710
Paramount Managing Member XVIII, LLC 09-13711
Broadway Street California, L.P. 09-13712
Paramount Managing Member AMBAC III, LLC 09-13713
Broadway Street 2001, L.P. 09-13714
Paramount Managing Member XIV, LLC 09-13715
Paramount Managing Member AMBAC IV, LLC 09-13716
Paramount Managing Member XV, LLC 09-13717
Broadway Street XV, L.P. 09-13718
Paramount Managing Member AMBAC V, LLC 09-13719
Paramount Managing Member XVI, LLC 09-13720
Broadway Street XVI, L.P. 09-13721
Broadway Street XVIII, L.P. 09-13722
Paramount Northeastern Managing Member, LLC 09-13723
Broadway Street Georgia I, LLC 09-13724
Capmark Managing Member 4.5 LLC 09-13725
Capmark Affordable Equity Inc. 09-13726
Type of Business: The Debtors are commercial real estate financial
and other services.
Chapter 11 Petition Date: October 25, 2009
Court: District of Delaware
Debtors' Counsel: Martin J. Bienstock, Esq.
Michael P. Kessler, Esq.
Judy G.Z. Liu, Esq.
Dewey & LeBoeuf LLP
1301 Avenue of the Americas
New York, New York 10019
Tel: (212) 259-8000
Fax: (212) 259-6333
http://www.dl.com
Debtors'
Co-Counsel: Mark D. Collins, Esq.
Paul N. Heath, Esq.
Jason M. Madron, Esq.
Richards Layton & Finger P.A.
One Rodney Square
920 Market Street
Wilmington, DE 19801
Tel: (302) 651-7700
Fax: (302) 651-7701
http://www.rlf.com
Debtors'
Special
Insurance
Counsel: Reed Smith LLP
599 Lexington Avenue, 22nd Floor
New York, NY 10022
Tel: (212) 521 5400
Fax: (212) 521 5450
http://www.reedsmith.com/
Debtors'
Strategic
Advisor: Beekman Advisors Inc.
8000 Westpark Drive, Suite 250
McLean, Virginia 22102
Tel: (703) 752-8320
Fax: (703) 940-8003
http://beekmanadvisors.com/
Debtors'
Financial
Advisor: Lazard Freres & Co. LLC
30 Rockefeller Plaza
New York, NY 10020
Tel: (212) 632-6000
http://www.lazard.com/
Debtors'
Crisis Manager: Loughlin Meghji + Company
220 West 42nd Street, 9th Floor
New York, NY 10036
Tel: (212) 340-8420
Fax: (212) 725-9322
http://www.lmco-ny.com/
Debtors'
Accounting
Advisor: KPMG LLP
345 Park Avenue
New York, NY 10154
Tel: (212) 758-9700
http://www.kpmg.com/
Debtors'
Claims Agent: Epiq Bankruptcy Solutions, LLC
757 Third Avenue, 3rd Floor
New York, NY 10017
The Debtors' financial condition as of June 30, 2009:
Total Assets: $20,100,000,000
Total Debts: $21,000,000,000
The Debtors' Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Citibank, N.A., as Bank loan $4,623,967,719
administrative agent under
the $5,500,000,000 Credit
Agreement, dated as of
March 23, 2006.
2 Penns Way, Suite 200
New Castle, DE 19720
Tel: (212) 816-8102
Fax: (646) 291-3357
Deutsche Bank Trust Bond debt $1,200,000,000
Company Americas, as
trustee for the 5.875%
Senior Notes.
60 Wall Street, 27th Floor
MS:NYC60-2710
New York, NY 10005
Tel: (908) 608-3191
Fax: (732) 578-4635
Deutsche Bank Trust Bond debt $637,500,000
Company Americas, as
Trustee for the Floating
Senior Notes due 2010.
60 Wall Street, 27th Floor
MS:NYC60-2710
New York, NY 10005
Tel: (908) 608-3191
Fax: (732) 578-4635
Wilmington Trust FSB, as Bond debt $500,000,000
successor trustee for the
6.300% Senior Notes due
2017.
166 Mercer St., Suite 2-R
New York, NY 10012-3249
Tel: (212) 941-4415
Fax: (212)343-1079
Capmark Trust Bond debt $259,784,695
Law Debenture Trust
Company ofNew York, as 767
Trustee under the Floating
Rate Junior Subordinated
Indenture.
767 Third Ave., 31st Floor
New York, NY 10017
Fax: (212) 750-1361
Citicorp North America Bank loan $234,203,621
Inc., as administrative
agent for the Bridge Loan
Agreement, dated as of
March 23, 2006.
2 Penns Way, Suite 200
New Castle, DE 19720
Tel: (212) 816-8102
Fax: (646) 291-3357
GMAC LLC Guaranty $13,200,317
200 Renaissance Center
Detroit, MI 200
Detroit, MI 48265-2000
Citibank, N.A. Reimbursement $5,600,000
2 Penns Way, Suite 200 obligation under
Clients Group letter of credit
New Castle, DE 19720
Tel: (212) 816-8102
Fax: (646) 291-3357
Fannie Mae Guaranty $11,480,000
3900 Wisconsin Ave., NW
Washington, D.C. 20016-2892
Tel: (301) 204-8178
JP Morgan Chase Bank Guaranty $5,043,276
National Assn
Mail Code ILI-0502
21 Clark St., 12th Floor
Chicago,IL 60670
Freddie Mac Guaranty $3,500,000
8200 Jones Branch Dr.
McLean, VA 22102
8200 Jones Branch Dr.
Tel: (703) 903-2000
Fax: (703) 714-3273
Natixis Financial Products Guaranty $3,037,145
Inc.
45, rue Saint Dominique 75007
Paris, France
Prairie Enterprises Ltd. Lease $2,292,000
PO Box 496
3825 Columbus Rd SW
Bldg. F
Granville, OH 43023
Tel: (740) 587-4150
Lehman Brothers Special Derivative $738,000
Financing Inc. and Lehman termination
Brothers Holdings Inc.
1271 Sixth Ave., 40th Floor
New York, NY 10019 10019
Tel: (646) 333-9526
411 Borel, LLC Lease $261,180
1590 Drew Ave. termination
Suite 200
Davis, CA 95616
CLPF-Plaza Del Mar III, LP Lease $246,300
110 West A Street L.P. termination
Suite 900
San Diego, CA 92101
Wachovia Bank NA Reimbursement $200,000
301 South Tryon St. obligation under
Charlotte, NC 28288-0200 letter of credit
Tel: (212) 214-5411
Fax: (212) 214-8955
Affiliated Computer Trade debt $156,000
Systems
510 West Parkland Dr.
Sandy, UT 84070
Crown Advisors Inc. Trade debt $129,000
30 Isabella St., Suite 203
Pittsburgh, PA 15212
Tel: (412) 566-1100
Techicon Software Trade debt $121,000
Solutions Inc.
Unit 1205, Bldg. 12
720 Johnsville Blvd.
Warminster, PA 18974
Tel: (267) 614-2871
Fax: (215) 997-0780
PS WebWorks, Inc. Trade debt $100,000
477 Riverwood Ln.
Phoenixville, PA 19460
Walton Houston Galleria Lease $108,000
Office LP termination
2700 Post Oak Blvd., Suite 200
Houston, TX 77056
McCracken Financial Trade debt $95,000
Solutions
8 Suburban Park Dr.
Billerica, MA 01821-3903
OpSource Inc. Trade debt $67,800
5201 Great America Pkwy.
Suite 120
Santa Clara, CA 95054
GRE 800 Brickell LP Lease $62,900
300 SE 2nd St. termination
Fort Lauderdale, FL 33301
The Fentress Group LLC Trade debt $55,150
8001 Ravines Edge Ct., Suite 112
Columbus, OH 43235
Tel: (614) 825-0011
Fax: (614) 825-0014
Data Select Systems, Inc. Trade debt $40,000
2829 Townsgate Rd., Suite 300
Westlake Village, CA 91361
Evolution Staffing Trade debt $30,000
111 S. Independence Mall
Suite 835
Philadelphia, PA 19106
JVR Consulting Inc. Trade debt $30,000
49 Cranberry Lane
Delran, NJ 08075
BTZ Technologies Trade debt $20,000
119 S. Franklin St.
Lambertville, NJ 08530
The petition was signed by Jane N. Levine, president and chief
executive officer.
CARE FOUNDATION: Burt Shearer Sues NHI Board Members for Fraud
--------------------------------------------------------------
E. Thomas Wood at NashvillePost.com reports that securities class-
action lawyers in Nashville and Pennsylvania, on behalf of Burt
Shearer and a corporation that has allegedly been harmed, have
filed a shareholder derivative lawsuit in Nashville's U.S.
District Court against four National Health Investors Inc. board
members, claiming that they were complicit in the alleged fraud
that led to Care Foundation of America's lawsuit against the
company earlier this year.
According to NashvillePost.com, the lawyers claimed that NHI,
publicly traded real estate investment trust focused on the
nursing home industry, concocted a scheme to cheat Care Foundation
out of $25 million. NashvillePost.com says that Paul Kent
Bramlett and three lawyers at Barroway Topaz Kessler Meltzer &
Check LLP filed the lawsuit against these defendants:
-- NHI chairperson and CEO Andrew Adams,
-- Pinnacle Financial Partners chairperson Rob McCabe,
-- real estate developer Robert Webb, and
-- real estate developer Ted Welch
The complainants, NashvillePost.com relates, repeats many of these
claims previously made by Care Foundation and the AG:
-- NHI effectively controlled the foundation's board of
directors from 1999, when it was created to purchase six
Florida homes with financing from NHI, until last year,
when an entirely new board took over after the AG began
scrutinizing Care Foundation's ties to NHI;
-- NHI manipulated Care Foundation into paying more than the
homes were worth and financing them on terms that were
unfairly onerous;
-- NHI falsely reported the terms of the purchase to the
Securities and Exchange Commission; and
-- NHI's dealings with the foundation violated federal tax
laws.
Care Foundation is seeking compensatory and punitive damages of
more than $25 million and that case set for trial in December,
NashvillePost.com reports.
Based in Nashville, Tennessee, Care Foundation of America, Inc.,
is a nonprofit corporation. Care Foundation and its affiliates
each own certain real estate, improvements, and fixtures in the
Tampa Bay, Florida that each one in turn leases to Health Services
Management, Inc., and its wholly owned subsidiaries for use as a
skilled nurning facility.
The facilities are known as Ayers Health & Rehabilitation Center,
Brooksville Healthcare Center, Bear Creek Nursing Center, Heather
Hill Healthcare Center, Royal Oak Nursing Center, and as Cypress
Cove Care Center. The Company and five affiliates filed separate
petitions for Chapter 11 relief on December 31, 2008 (Bankr. M.D.
Tenn. Lead Case No. 08-12367).
David E. Lemke, Esq., at Waller Landsden Dortch & Davis,
represents the Debtors as counsel. When the Debtors filed for
protection from their creditors, they listed total assets of
between $50,000,000 and $100,000,000, and total debts of between
$1,000,00 and $10,000,000.
CAROLINA FIRST: Moody's Cuts Bank Financial Strength Rating to 'E'
------------------------------------------------------------------
Moody's Investors Service downgraded the ratings of Carolina First
Bank (bank financial strength to E from D, long-term deposits to
Caa1 from Ba2). Following the downgrade, the rating outlook is
negative. Carolina First Bank is the lead bank of The South
Financial Group, Inc., an unrated bank holding company.
Moody's rating action follows the company's third quarter results
in which it announced a $340 million loss to common shareholders,
driven by a loan loss provision of $224 million and a $200 million
valuation allowance against its deferred tax asset. Moody's said
the downgrade reflects its opinion that South Financial's credit
costs are likely to remain high, and, coupled with the inability
to recognize the tax benefit of losses going forward, the bank's
capital position may rapidly deteriorate. The rating also
reflects Moody's view that while there is some risk of loss to
uninsured depositors, given depositor preference, there is greater
risk to unsecured creditors.
The rating agency said the negative outlook reflects its view
that, given South Financial's credit concentrations and the
uncertain economic environment, expected losses for uninsured
depositors and other creditors could increase.
South Financial's CRE accounts for approximately 5.9 times TCE,
with construction lending comprising almost one-half of total CRE.
Despite its efforts to reduce problem assets through loan sales,
which reduced nonperforming assets (including restructured and
90+) by almost $20 million from June 30th, South Financial's NPAs
as a percentage of loans plus OREO rose to 6.1% at September 30,
2009, the problem assets largely reflecting deterioration in the
residential construction book, as well as increasing weakness in
the C&I and income-producing CRE sectors. Continuing
deterioration in South Financial's loan portfolio drove the firm's
seventh straight quarter of losses.
Moody's last rating action was on May 14, 2009, when Carolina
First's bank financial strength rating was downgraded to D from
C-, and long term deposits to Ba2 from Baa1.
Downgrades:
Issuer: Carolina First Bank
-- Bank Financial Strength Rating, Downgraded to E from D
-- Issuer Rating, Downgraded to Ca from Ba3
-- OSO Senior Unsecured OSO Rating, Downgraded to Ca from Ba3
-- Senior Unsecured Deposit Note/Takedown, Downgraded to Caa1
from Ba2
-- Senior Unsecured Deposit Rating, Downgraded to Caa1 from Ba2
CATALYST PAPER: S&P Retains Negative CreditWatch on 'CCC+' Rating
-----------------------------------------------------------------
Standard & Poor's Rating Services said it kept its ratings,
including its 'CCC+' long-term corporate credit rating, on
Vancouver-based Catalyst Paper Corp. on CreditWatch with negative
implications, where they were placed June 26, 2009.
"Catalyst Paper continues to look at refinancing alternatives for
its 2011 and 2014 unsecured notes, which could lead to a
distressed exchange offer," said Standard & Poor's credit analyst
Jatinder Mall. "The company's financial performance remains weak
given market conditions for its products and S&P expects it to
continue to generate weak cash flows in the near term," Mr. Mall
added.
Standard & Poor's will likely resolve the CreditWatch on Catalyst
Paper once S&P has a clear understanding of what the final impact
of a refinancing would be on the company's existing unsecured
notes.
CATHOLIC CHURCH: Davenport Trustee to Name 23 Settling Abusers
--------------------------------------------------------------
Robert L. Berger, the Diocese of Davenport's settlement trustee,
asked the U.S. Bankruptcy Court for the Southern District of Iowa
to set a hearing to allow inquiry of the Reorganized Debtor, and
in particular, Bishop Martin Amos, with respect to the Reorganized
Debtor's Report on Non-Monetary Undertakings filed on June 5,
2009.
Mr. Berger contends that the Diocese and the Catholic Entities
failed to file the Report as required by the Debtor's confirmed
Plan of Reorganization, and to comply with certain of the
Diocese's obligations under Article 24 of the Plan. He explains
that, for instance, (i) the Bishop failed to publicly support the
complete elimination of all criminal statutes of limitations for
child sexual abuse, and (ii) the Diocese failed to disclose priest
affidavits and make those affidavits meaningful, among other
failures.
Because the Official Committee of Unsecured Creditors was
dissolved on the Plan's Effective Date and because Mr. Berger's
counsel, Pachulski Stang Ziehl & Jones LLP, was employed, among
other things, to communicate with the Diocese and Tort Claimants
regarding compliance with Article 24, Mr. Berger asks the Court
for a hearing for parties-in-interest to examine Bishop Amos
regarding the Report and the Diocese's Article 24 obligations.
Mr. Berger submits that Bishop Amos should be present at the
hearing to be questioned because the Bishop committed to address
parishioner questions and comments as part of the Plan process.
Mr. Berger proposes to serve notice of the hearing on all of
claimants, who filed claims in the bankruptcy case, so that they
will have an opportunity to be heard at the hearing.
Court Ruling
Pursuant to the record of the October 7, 2009 hearing on the
Diocese of Davenport's settlement trustee's request to set a
hearing to allow inquiry of the Reorganized Debtor, and in
particular, Bishop Martin Amos, with respect to the Reorganized
Debtor's Report on Non-Monetary Undertakings filed on June 5,
2009, the U.S. Bankruptcy Court for the Southern District of Iowa
ruled that:
(1) by October 28, 2009, either the parties will file a
consensus report fine-tuning the Non-Monetary
Undertakings, or Robert L. Berger, with input from certain
creditors' attorney, will file a list of proposals
regarding the performance and effectiveness of the
undertakings. If a list of proposals is filed, the
Diocese will file a response to the proposals by
November 12, 2009;
(2) no later than October 28, 2009, Mr. Berger will provide
the Debtor with a list of the previously unreleased names
of the 23 accused abusers for whose acts claims were paid.
No later than five business days following receipt of the
list, the Debtor will post the list on its Web site; and
(3) the Diocese will provide a certain Mr. Alex with competent
professional counseling.
Prior to Judge Jackwig's order, the Creditors' Attorney sought and
obtained the Court's permission to participate in the October 7
hearing.
The Diocese has also submitted a response to Mr. Berger's request
prior to the entry of the order. The Diocese asserted, among
other things, that it is in full compliance with the Non-Monetary
Undertakings, as contemplated in the Debtor's confirmed plan of
reorganization. The Diocese had also asked parties to submit
their concerns before the hearing, so it can prepare meaningful
responses to those concerns.
About Diocese of Davenport
The Diocese of Davenport in Iowa filed for chapter 11 protection
(Bankr. S.D. Ia. Case No. 06-02229) on Oct. 10, 2006. Richard A.
Davidson, Esq., at Lane & Waterman LLP, represents the Davenport
Diocese in its restructuring efforts. Hamid R. Rafatjoo, Esq.,
and Gillian M. Brown, Esq., at Pachulski Stang Zhiel Young Jones &
Weintraub LLP represent the Official Committee of Unsecured
Creditors. In its schedules of assets and liabilities, the
Davenport Diocese reported $4,492,809 in assets and $1,650,439 in
liabilities. The Court approved on April 3, 2008, the Diocese of
Davenport's second amended disclosure statement explaining its
joint plan of reorganization. The Committee is a proponent to the
plan, which was confirmed on April 30, 2008. (Catholic Church
Bankruptcy News; Bankruptcy Creditors' Service Inc.;
http://bankrupt.com/newsstand/or 215/945-7000).
CATHOLIC CHURCH: Oregon Priests Say Unsealing Docs. to Do Harm
--------------------------------------------------------------
Father M and Father D notify the U.S. Bankruptcy Court for the
District of Oregon that they will take an appeal from Judge
Elizabeth L. Perris' judgment and order lifting protective order,
lifting the seal on filed documents, and authorizing the release
of deposition transcripts and exhibits entered in the Archdiocese
of Portland in Oregon's bankruptcy case on July 13, 2009.
Appellants File Opening Brief
Father M and Father D relate that at the beginning of the
bankruptcy proceeding, the Various Tort Claimants and the
Archdiocese of Portland in Oregon struck a deal to allow discovery
to go forward. Unknown to the Appellants at the time, Appellants'
records were part of that deal, and some of the records were
attached to a motion that the Court never ruled on, contends
Michael B. Merchant, Esq., at Black Helterline LLP, in Portland,
Oregon.
The Various Tort Claimants and the Archdiocese struck another deal
allowing the settlement of claims and the approval of the Debtor's
Plan of Reorganization, Mr. Merchant says. He notes that the
Appellants' records became part of that deal, too, and even though
no claims were asserted against them, the Appellants had to oppose
the release of their employment records.
The U.S. Bankruptcy Court for the District of Oregon erred by
imposing on Appellants the burden of establishing why their
records should remain confidential, Mr. Merchant contends. Even
if that was not error, he asserts, the Appellants sustained their
burden.
"The risk of harm to Appellants is real and demonstrated and
outweighs the Various Tort Claimants' generalized reasons
supporting release," Mr. Merchant argues. "Persons like
Appellants are in a different position than those against whom
relief was sought. That is true notwithstanding the nature of the
information in the records," he explains.
The Court created a content-based rule to justify the release of
the records, which was in error and should be reversed, Mr.
Merchant argues. He points out that the disclosure of private
records of non-parties should not be the subject of negotiation
between the parties.
The Appellants also file with the Court excepts of record in
connection with their appeal. Among the documents included are
the protective order dated January 14, 2005, pursuant to which
their confidential documents were sealed, and the motion and
responses to the request to unseal Docket Nos. 4765 and 4766.
About Archdiocese of Portland
The Archdiocese of Portland in Oregon filed for Chapter 11
protection (Bankr. Ore. Case No. 04-37154) on July 6, 2004.
Thomas W. Stilley, Esq., and William N. Stiles, Esq., at Sussman
Shank LLP, represent the Portland Archdiocese in its restructuring
efforts. Albert N. Kennedy, Esq., at Tonkon Torp, LLP, represents
the Official Tort Claimants Committee in Portland, and scores of
abuse victims are represented by other lawyers. David A. Foraker
serves as the Future Claimants Representative appointed in the
Archdiocese of Portland's Chapter 11 case. In its Schedules of
Assets and Liabilities filed with the Court on July 30, 2004, the
Portland Archdiocese reports $19,251,558 in assets and
$373,015,566 in liabilities.
The Court approved the Debtor's disclosure statement explaining
its Second Amended Joint Plan of Reorganization on February 27,
2007.
(Catholic Church Bankruptcy News; Bankruptcy Creditors' Service,
Inc., http://bankrupt.com/newsstand/or 215/945-7000).
CATHOLIC CHURCH: Ruling Favors Continental in Fairbanks Dispute
---------------------------------------------------------------
Judge Donald MacDonald of the U.S. Bankruptcy Court for the
District of Alaska entered an interlocutory order (i) granting
Continental Insurance Company's motion for summary judgment, and
(ii) denying Catholic Bishop of Northern Alaska's motion for
summary judgment. Continental is also awarded costs and
attorney's fees in accordance with Rule 82 of the Alaska Rules of
Civil Procedure.
The major issue presented in both motions is whether the existence
of missing liability insurance policies has been established by
secondary evidence. CBNA moved for summary judgment to establish
the existence of lost or missing liability insurance policies it
contends were issued by Continental for periods in the 1970s.
Continental's cross-motion for summary judgment seeks a
declaration that it has no duty to defend or indemnify CBNA
because the existence and terms of the lost or missing policies
cannot be established by sufficient, admissible secondary
evidence.
Continental has filed Claim No. 25, a general unsecured claim for
$723,599, in CBNA's bankruptcy case. CBNA has objected to the
allowance of the prepetition claim.
In his memorandum accompanying the Interlocutory Order, Judge
MacDonald concluded that CBNA has not produced sufficient evidence
of the existence, terms and conditions of liability coverage to
carry its burden of persuasion. He noted that the testimony and
documentary evidence provided by CBNA fails to establish directly
or create a reasonable inference that Continental ever issued
liability insurance, which would cover the abuse claims asserted
against CBNA's employees in the 1970s.
Judge MacDonald directed Continental to file a request for an
award of attorney's fees after the amount of its prepetition claim
has been liquidated by the court. The Court noted that the
request must delineate what portion of Continental's fees were
incurred prepetition, and which portion was incurred postpetition.
If Continental claims an administrative priority as to any portion
of its fees, it must state the legal basis for that claim, Judge
MacDonald clarified.
"This is an interlocutory order. No final judgment will be
entered until the plaintiff's prepetition claim has been
liquidated and its attorney's fees determined," Judge MacDonald
reminded the parties.
Parties Submits Supplemental Briefs
Prior to the entry of the Interlocutory Order, Continental sought
and obtained leave of Court to file, and subsequently filed a
supplemental brief supporting its motion for summary judgment. In
the supplemental brief, Continental provided the Court with
supplemental authority from the California Superior Court, Plant
Insulation Co. v. Fireman's Fund Ins. Co. et al., Case No. CGC 06-
4486118 (San Francisco Sup. Ct., January 9, 2009), regarding
missing policy issues.
In response to the supplemental brief, CBNA argued that the Plant
facts are unique to that case, and that the California trial court
faced myriad issues and credibility determinations associated with
multiple witnesses and a record quite different from CBNA and
Continental's case. CBNA also pointed out that certain problems
in the Plant's case, including the fact that the reputed
policyholder, Plant, sought to establish an "occurrence based"
policy despite a written certificate of coverage describing
coverage as "accident based."
At Judge MacDonald's request, CBNA filed with the Court (i) the
balance of George Bowder's deposition, beginning at deposition
page 41, and (ii) pages 54 to 57 of Juanita Brown's deposition.
Parties File Witnesses and Exhibit List
In connection with the adversary proceeding's trial set last
October 16, 2009, Continental filed with the Court Exhibits 3
through 186 shown as group exhibits on an exhibit list consisting
of various documents showing payment by Continental of defense
costs in the underlying sexual abuse cases against CBNA. Each
Group Exhibit consists generally of the invoice sent by the
defense counsel and internal Continental documents showing the
invoice was processed and approved for payment.
A full-text copy of the Exhibit List can be obtained for free at:
http://bankrupt.com/misc/Church_CIC_ExhibitList_092509.pdf
Continental also filed witnesses disclosures pursuant to Rule
26(a)(3) of the Federal Rules of Civil Procedure, and Rule 7026 of
the Federal Rules of Bankruptcy Procedure. The witnesses named
were Tracy L. Smith and Robert Groseclose, Esq., at Cook,
Schuhmann & Groseclose, in Fairbanks, Alaska.
In another filing, CBNA revealed that it also expected to call on
Mr. Groseclose as witness. CBNA also filed its trial exhibits
containing letters and e-mails it received from Mr. Groseclose and
other lawyers. CBNA objected to the Court admitting into evidence
certain entries on Continental's Exhibit List, and thus, making
the documents part of public record. CBNA asserted that certain
information on those entries are protected from disclosure to the
public under work-product doctrine.
Continental also objected to all of CBNA's exhibits because they
are not relevant to issues before the Court and should be excluded
under Rules 402 and 403 of the Federal Rules of Evidence.
Continental noted that CBNA has waived any objection to the amount
of Continental's claim.
* * *
According to the proceeding memorandum of the hearing held
October 16, 2009, parties to the adversary proceeding have reached
a settlement, and intend to a request under Rule 9019 of the
Federal Rules of Bankruptcy Procedure with the next 10 days for
the approval of the settlement.
About Diocese of Fairbanks
The Roman Catholic Diocese of Fairbanks in Alaska, aka Catholic
Bishop of Northern Alaska, aka Catholic Diocese of Fairbanks, aka
The Diocese of Fairbanks, aka CBNA -- http://www.cbna.info/--
filed for chapter 11 bankruptcy on March 1, 2008 (Bankr. D. Alaska
Case No. 08-00110). Susan G. Boswell, Esq., at Quarles & Brady
LLP represents the Debtor in its restructuring efforts. Michael
R. Mills, Esq., of Dorsey & Whitney LLP serves as the Debtor's
local counsel and Cook, Schuhmann & Groseclose Inc. as its special
counsel. Judge Donald MacDonald, IV, of the United States
Bankruptcy Court for the District of Alaska presides over
Fairbanks' Chapter 11 case. The Debtor's schedules show total
assets of $13,316,864 and total liabilities of $1,838,719.
The church's plans to file its bankruptcy plan and disclosure
statement on July 15, 2008. Its exclusive plan filing period
expires on January 15, 2009. (Catholic Church Bankruptcy News;
Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).
CELL THERAPEUTICS: Reports Outcome of Annual Shareholders Meeting
-----------------------------------------------------------------
Cell Therapeutics, Inc., discloses the results from its Annual
Meeting of Shareholders held on October 20, 2009. At the meeting,
shareholders:
-- elected Mr. Richard L. Love, Dr. Mary O. Mundinger, and
Dr. Jack W. Singer to serve on the Company's Board of
Directors until the 2012 Annual Meeting;
-- approved the proposals to increase the number of shares
available for issuance under its 2007 Equity Incentive
Plan, increase the number of shares available for issuance
under its 2007 Employee Purchase Plan and issue shares of
common stock in lieu of future milestone payments related
to the Company's drug candidate brostallicin; and
-- ratified the selection of Stonefield Josephson, Inc. as
the Company's independent auditors for the year ending
December 31, 2009.
The Board of Directors of Cell Therapeutics previously approved,
subject to stockholder approval, an amendment to the Cell
Therapeutics, Inc. 2007 Equity Incentive Plan that would increase
the number of shares of the Company's common stock that may be
delivered pursuant to awards granted under the 2007 Plan by an
additional 45,000,000 shares.
The Board also previously approved, subject to stockholder
approval, an amendment to the Cell Therapeutics, Inc. 2007
Employee Stock Purchase Plan to increase the number of shares
authorized for issuance under the Purchase Plan by 500,000 shares
(so that the maximum aggregate number of shares that may be issued
under the Purchase Plan would increase to 1,525,000 shares).
Headquartered in Seattle, Washington, Cell Therapeutics, Inc.,
(Nasdaq and MTA: CTIC) -- http://www.CellTherapeutics.com/-- is a
biopharmaceutical company committed to developing an integrated
portfolio of oncology products aimed at making cancer more
treatable.
Going Concern Doubt
Stonefield Josephson Inc. in Los Angeles, California, expressed
substantial doubt about Cell Therapeutics' ability to continue as
a going concern after auditing company's financial statements for
the years ended December 31, 2008, and 2007. The auditing firm
reported that the Company has substantial monetary liabilities in
excess of monetary assets as of December 31, 2007, including
roughly $19.8 million of convertible subordinated notes and
senior subordinated notes which mature in June 2008. It also
noted that the Company has sustained loss from operations over the
audit periods, incurred an accumulated deficit, and has
substantial monetary liabilities in excess of monetary assets as
of December 31, 2008.
As of June 30, 2009, the Company had $43.2 million in total
assets; and $98.7 million in total liabilities; resulting in
$57.6 million in shareholders' deficit. The Company had
$1.35 billion in accumulated deficit as of June 30, 2009.
CHENG KWONG SEA FOOD: Voluntary Chapter 11 Case Summary
-------------------------------------------------------
Debtor: Cheng Kwong Sea Food Market, Inc.
c/o Kenmore Management
654 Beacon Street, 4th Floor
Boston, Ma 02215
Bankruptcy Case No.: 09-20089
Chapter 11 Petition Date: October 22, 2009
Court: United States Bankruptcy Court
District of Massachusetts (Boston)
Judge: William C. Hillman
Debtor's Counsel: Frank D. Kirby, Esq.
Law Offices of Frank D. Kirby
5 Pleasant Street, 5th floor
Worcester, MA 01609
Tel: (617) 388-9278
Fax: (617) 798-0027
Email: frank@fkirbyesq.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $10,000,001 to $50,000,000
The Debtor did not file a list of its 20 largest unsecured
creditors when it filed its petition.
The petition was signed by Michael Sheehan, president of the
Company.
CHRISTOPHER EVANS: Case Summary & 10 Largest Unsecured Creditors
----------------------------------------------------------------
Joint Debtors: Christopher M Evans
526 N. Lombard, Apt. 2
Oak Park, IL 60302
June R Licata-Evans
842 N. Oak Park Ave.
Oak Park, IL 60302
Bankruptcy Case No.: 09-40000
Chapter 11 Petition Date: October 23, 2009
Court: United States Bankruptcy Court
Northern District of Illinois (Chicago)
Debtors' Counsel: Forrest L. Ingram, Esq.
Forrest L. Ingram, P.C.
79 W Monroe Street, Suite 900
Chicago, IL 60603
Tel: (312) 759-2838
Fax: (312) 759-0298
Email: fingram@fingramlaw.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
A full-text copy of the Debtors' petition, including a list of
their 10 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/ilnb09-40000.pdf
The petition was signed by the Joint Debtors.
CHRYSLER LLC: Khourys Should Bring Case in State Court, Says Judge
------------------------------------------------------------------
Fawzi Khoury and two other principals of a Lebanese company asked
the U.S. Bankruptcy Court for the Southern District of New York to
order the removal of Chrysler International Corp.'s liens on their
real properties in the United States. The two principals are Elie
Khoury and Halim Khoury. Both are principals of Faouzi Khouri and
Sons sarl, a Lebanon-based company which previously served as
Chrysler's exclusive distributor in Lebanon. The Khourys posted
the properties as collateral for any balance owed to Chrysler.
The Khourys proposed the removal of Chrysler's liens in light of
the settlement they reached in a Lebanese court canceling their
debts to the company.
Pursuant to Sections 1334 and 157(b)(2) of the Judicial and
Judiciary Procedures Code, Bankruptcy Judge Arthur Gonzalez said
that the Court has no jurisdiction to grant the relief sought
because the matter does not concern the "administration of the
estate."
The fact that the CIC Claim Sale did not consummate until after
the Khourys have filed their request is not determinative because
even assuming that the Liens were property of the Debtors'
bankruptcy estates at the close of the Fiat Transaction, they are
now property of New Chrysler as a result of the CIC Claim Sale and
the Debtors' estates no longer have any right, title or interest
in either the Subject Liens or the CIC Claim, Judge Gonzalez
opined.
In addition, Judge Gonzalez said, the settlement agreement
resolving the debt and dispute between CIC and Faouzi Khoury and
Sons sarl was entered into between New Chrysler and FKS alone, and
approved by a Lebanese Bankruptcy Court. Consequently, the Court
maintained, the validity of the Liens in light of the Settlement
Agreement is a two-party dispute between New Chrysler and FKS that
should be adjudicated before a state court.
Judge Schmidt also noted that the Debtors are not essential
parties to the dispute; the outcome of the dispute has no impact
on the Debtors and the Debtors' estate; and the resolution of the
dispute does not require the interpretation of any orders or
decrees issued by the Court.
Therefore, Judge Gonzalez denied the request without prejudice.
About Chrysler LLC
Chrysler Group LLC, formed in 2009 from a global strategic
alliance with Fiat Group, produces Chrysler, Jeep(R), Dodge,
Mopar(R) and Global Electric Motors (GEM) brand vehicles and
products. With the resources, technology and worldwide
distribution network required to compete on a global scale, the
alliance builds on Chrysler's culture of innovation -- first
established by Walter P. Chrysler in 1925 -- and Fiat's
complementary technology -- from a company whose heritage dates
back to 1899.
Headquartered in Auburn Hills, Michigan, Chrysler Group LLC's
product lineup features some of the world's most recognizable
vehicles, including the Chrysler 300, Jeep Wrangler and Dodge Ram.
Fiat will contribute world-class technology, platforms and
powertrains for small- and medium-sized cars, allowing Chrysler
Group to offer an expanded product line including environmentally
friendly vehicles.
Chrysler LLC and 24 affiliates on April 30 sought Chapter 11
protection from creditors (Bankr. S.D.N.Y (Mega-case), Lead Case
No. 09-50002). Chrysler hired Jones Day, as lead counsel; Togut
Segal & Segal LLP, as conflicts counsel; Capstone Advisory Group
LLC, and Greenhill & Co. LLC, for financial advisory services; and
Epiq Bankruptcy Solutions LLC, as its claims agent. Chrysler has
changed its corporate name to Old CarCo following its sale to a
Fiat-owned company. As of December 31, 2008, Chrysler had
$39,336,000,000 in assets and $55,233,000,000 in debts. Chrysler
had $1.9 billion in cash at that time.
In connection with the bankruptcy filing, Chrysler reached an
agreement with Fiat SpA, the U.S. and Canadian governments and
other key constituents regarding a transaction under Section 363
of the Bankruptcy Code that would effect an alliance between
Chrysler and Italian automobile manufacturer Fiat. Under the
terms approved by the Bankruptcy Court, the company formerly known
as Chrysler LLC on June 10, 2009, formally sold substantially all
of its assets, without certain debts and liabilities, to a new
company that will operate as Chrysler Group LLC. Fiat has a 20
percent equity interest in Chrysler Group.
Bankruptcy Creditors' Service, Inc., publishes Chrysler Bankruptcy
News. The newsletter tracks the Chapter 11 proceedings of
Chrysler LLC and its debtor-affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
CHRYSLER LLC: Mraz Family Seeks Modification of Safeco Stipulation
------------------------------------------------------------------
The Bankruptcy Court previously approved a payment of $24,000,0000
by Safeco Insurance Company of America to the Mraz family, which
arises out of a wrongful death action against DaimlerChrysler, in
which a jury awarded the Mraz family approximately $5.2 million in
compensatory damages and $50 million in punitive damages to the
family of the decedent Richard Mraz. Safeco bonded the judgment on
appeal.
The amounts from the settlement with Safeco and the Debtors are
going to be shared by all of the plaintiffs, including Adriana
Mraz, the wife of the decedent Mr. Mraz; Addison Mraz, the Mraz's
six year old daughter; and Joe and Roy Lopez, both of whom are the
sons of Adriana Mraz and the stepsons of Richard Mraz.
Edward J. Peterson III, Esq., at Stichter Riedel Blain & Prosser
P.A. points out that the result of the settlement is that
substantial sums of money will be going to young persons, all of
whom will benefit substantially from the use of settlement
structures.
Addison Mraz is six years old while Joe and Roy Lopez are 20 and
18 years old.
Mr. Peterson relates that these kinds of settlement structures are
very common in personal injury settlements and are overseen by
insurance companies that will provide annuities for many years to
the plaintiff recipients, and allow the plaintiffs to benefit from
the expertise of these life companies. He notes that plaintiffs
intend to rely on A+ rated life companies who will guarantee
sizeable annuities to these plaintiffs.
In the case of Addison Mraz, the contemplated income stream will
last more than 40 years, Mr. Peterson says. To take advantage of
a settlement structure, it is necessary that the settlement funds
come directly from the defendant or insurance company "payor" to
the insurance companies overseeing the structure.
The stipulation and agreed order resolving the Mraz's request to
lift the automatic stay provides a $24,000,000 payment to the
trust account of counsel for plaintiffs, Mr. Peterson notes.
By this motion, the Mrazes seek to modify the Stipulation and
Agreed Order to allow their counsel to return the amounts that
will be going to settlement structures to Safeco, so that Safeco
in turn can make payments directly to the companies overseeing the
structures.
Amending the Stipulation and Order in this way will allow the
Mrazes to take advantage of settlement structures, which in turn
will make it much more likely that use of the settlement proceeds
will go to their best use for years to come and not be
unnecessarily squandered, Mr. Peterson submits.
The requested amendment to the Stipulation and Order will have no
financial impact on the Debtors because the purpose of the
proposed amendment is only to allow the Mrazes to be able to take
advantage of settlement structures in connection with their
settlement proceeds, and requires that Safeco also cooperate in
completing the paperwork necessary to create the Settlement
Structures, including providing its consent to the requested
qualified assignments, Mr. Peterson contends. He adds that any
costs associated with the wire transfers will be borne by the
Mrazes.
In separate filings, the Plaintiffs sought and obtained a Court
order shortening the notice period and hearing schedule with
respect their Request.
Safeco Objects
Safeco objects to the Mraz's Request to the extent it places
additional obligations on Safeco despite the previous release and
discharge of Safeco from all claims, demands or liabilities.
John H. Drucker, Esq., at Cole Schotz Meisel Foreman & Leonard
P.A., in New York pointed out that the Mraz's Request requiring
Safeco to "cooperate" in completing paperwork and provide its
consent to qualified assignments is vague and would seemingly
place an indefinite and ongoing obligation on Safeco despite the
fact that Safeco has already paid a substantial amount of money in
accordance with the Court's prior order and in exchange for a full
release.
In light of the negotiated and court-approved Stipulation between
the Parties, Safeco should not now be exposed to potential
liability should the "paperwork" and "qualified assignments" be
completed improperly, Mr. Drucker contends.
If the Court were to consider the Mraz's Request, Safeco submits
that an order should clarify any obligations now placed on Safeco
and an order affirming that Safeco's sole obligation is payment of
the funds.
Debtors File Limited Objection
Corinne Ball, Esq., at Jones Day, in New York, tells the Court
that the Debtors did not object to the Mraz's Request because they
thought that (a) the Mraz's Request represented a consensual
resolution by the Plaintiffs and Safeco of their issues and (b) a
resolution would impose no additional costs on the Debtors.
However, Ms. Ball contends that Safeco's Objection is manifest
evidence that despite the Debtors' understanding, no consensual
resolution has been reached, and additional costs likely will be
imposed on the Debtors.
The Debtors anticipate that Safeco may seek to recover costs
arising from the Safeco Objection and any related costs from the
collateral currently held by Safeco to secure certain obligations
of the Debtors.
In the absence of an agreement between the Mrazes and Safeco, the
Debtors submit that the Mraz's requested relief is inappropriate.
Ms. Ball argues that the Parties have already negotiated a
settlement which has been approved by the Court and pursuant to
which Safeco has already performed its payment obligations and
released the Debtors from all claims.
The Mrazes provide no compelling reason why the status quo is
disturbed in any way, she says.
To the extent that the relief asked in the Mraz's Request may
serve to undermine the release and discharge granted to the
Debtors or impose additional costs directly or indirectly on the
Debtors, the Debtors ask the Court to deny the Mraz's Request.
About Chrysler LLC
Chrysler Group LLC, formed in 2009 from a global strategic
alliance with Fiat Group, produces Chrysler, Jeep(R), Dodge,
Mopar(R) and Global Electric Motors (GEM) brand vehicles and
products. With the resources, technology and worldwide
distribution network required to compete on a global scale, the
alliance builds on Chrysler's culture of innovation -- first
established by Walter P. Chrysler in 1925 -- and Fiat's
complementary technology -- from a company whose heritage dates
back to 1899.
Headquartered in Auburn Hills, Michigan, Chrysler Group LLC's
product lineup features some of the world's most recognizable
vehicles, including the Chrysler 300, Jeep Wrangler and Dodge Ram.
Fiat will contribute world-class technology, platforms and
powertrains for small- and medium-sized cars, allowing Chrysler
Group to offer an expanded product line including environmentally
friendly vehicles.
Chrysler LLC and 24 affiliates on April 30 sought Chapter 11
protection from creditors (Bankr. S.D.N.Y (Mega-case), Lead Case
No. 09-50002). Chrysler hired Jones Day, as lead counsel; Togut
Segal & Segal LLP, as conflicts counsel; Capstone Advisory Group
LLC, and Greenhill & Co. LLC, for financial advisory services; and
Epiq Bankruptcy Solutions LLC, as its claims agent. Chrysler has
changed its corporate name to Old CarCo following its sale to a
Fiat-owned company. As of December 31, 2008, Chrysler had
$39,336,000,000 in assets and $55,233,000,000 in debts. Chrysler
had $1.9 billion in cash at that time.
In connection with the bankruptcy filing, Chrysler reached an
agreement with Fiat SpA, the U.S. and Canadian governments and
other key constituents regarding a transaction under Section 363
of the Bankruptcy Code that would effect an alliance between
Chrysler and Italian automobile manufacturer Fiat. Under the
terms approved by the Bankruptcy Court, the company formerly known
as Chrysler LLC on June 10, 2009, formally sold substantially all
of its assets, without certain debts and liabilities, to a new
company that will operate as Chrysler Group LLC. Fiat has a 20
percent equity interest in Chrysler Group.
Bankruptcy Creditors' Service, Inc., publishes Chrysler Bankruptcy
News. The newsletter tracks the Chapter 11 proceedings of
Chrysler LLC and its debtor-affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
CHRYSLER LLC: Objects to Dealers' Requests for Admin. Claims
------------------------------------------------------------
Old CarCo LLC and its units filed separate objections to the
requests of Lawrence Marshall Chrysler LLC and Southworth Dodge,
Inc., for administrative priority under Sections 503(b)(1) and
507(a)(2) of the Bankruptcy Code for their prepetition buyback
claims. The Debtors also file a separate response to Southworth's
request alleging that in any event, Southworth is not entitled to
administrative priority status for a general unsecured claim.
Marshall has asserted a claim for $2,598,791, while Southworth
asked for "approximately $95,000," for vehicles, parts, tools,
equipment and signs that the Debtors will have to buyback when the
Dealers' agreements were terminated.
Corinne Ball, Esq., at Jones Day, in New York, argues that under
no interpretation of the facts and law are the Prepetition Buyback
Claims entitled to administrative priority because the Claims do
not arise from any postpetition agreement or transaction between
the Dealers and the Debtors. Rather, all facts relevant to the
Prepetition Buyback Claims occurred prepetition, she notes.
Ms. Ball also contends that the Dealers have provided no benefit
to the Debtors' bankruptcy estates in consideration for
administrative priority, nor would paying the Prepetition Buyback
Claims on a priority basis be of any benefit to the estates as the
Debtors focus on winding down their affairs. Rather, she insists,
the Prepetition Buyback Claims represent only a potential burden
on the Debtors and the limited resources of their estates.
Thus, the Debtors tell Judge Gonzalez that the Prepetition Buyback
Claims fail to qualify as an administrative expense, and the Court
should deny the requests for their payment.
In another objection, the Debtors ask the Court to deny the
request of their former landlord, Gregory L. Smith, for
administrative priority of his claim. Mr. Smith is the co-trustee
of the Gregory L. Smith GST Nonexempt Trust under the Smith Family
Irrevocable Trust and the Gary P. Smith GST Nonexempt Trust under
the Smith Family Irrevocable Trust.
Ms. Ball argues that the Holdover Claim did not arise from any
postpetition agreement or transaction with the Debtors' bankruptcy
estates, and that the landlord provided no benefit to the estates.
Lawrence Marshall Chrysler LLC and Gregory L. Smith subsequently
withdrew, without prejudice, their requests for allowance of
administrative expenses.
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)
CIT GROUP: Extends Exchange Offer to November 5
-----------------------------------------------
CIT Group Inc. has modified its amended Offering Memorandum dated
October 16, 2009 through a supplement dated October 23, 2009. The
supplement reflects changes that are expected to build additional
bondholder support.
The supplement to the Amended Offering Memorandum, Disclosure
Statement and Solicitation of Acceptances of a Prepackaged Plan of
Reorganization includes, among others:
A. Specific Changes to the Terms of the Delaware Funding Offers
and Plan of Reorganization
* Extension of the expiration date of the offers and the
solicitation of acceptances of the Plan of Reorganization
only with respect to offers made by CIT Group Funding
Company of Delaware LLC from October 29, to November 5.
The Early Tender Date for these notes is October 29, 2009,
* Increased the interest rate payable on the Series B Notes
from 9.0% per annum to 10.25% per annum.
B. Updates to the Terms of CIT Group Inc. Offers and Plan of
Reorganization
* All New Notes issued pursuant to the Offers or in
connection with the Plan of Reorganization will be
denominated in U.S. dollars,
* The New Notes are expected to be rated by one or more
nationally recognized statistical rating organizations,
* Increased the percentage of New Common Interests
distributable pro rata to holders of Junior Subordinated
Note Claims to 1.5% in the event Class 12 and Class 13
accept the Plan of Reorganization,
* Certain Old Notes issued by CIT Group Inc. contain a
survivor's option. If an option has been exercised, but has
not yet been paid, it will be treated as follows:
-- If tendered and the Offers are consummated, they will
be exchanged for the consideration to which they are
entitled under the terms of the Offers,
-- If not tendered and the Offers are consummated, they
will be redeemed pursuant to the terms of the
survivor's option, or
-- If the Plan of Reorganization is consummated, then
they will be exchanged pursuant to the terms of the
Plan of Reorganization.
* Updated the liquidation analysis in which CIT calculates the
probable distribution to holders of CIT securities in the
event of liquidation.
On October 1, 2009, as subsequently amended on October 16, and
October 23, CIT commenced a series of offers to exchange certain
outstanding series of notes and concurrently began a solicitation
for votes for a voluntary prepackaged plan of reorganization.
Successful completion of either the exchange offers or plan of
reorganization will generate significant capital and provide
multi-year liquidity through the material reduction of CIT's
outstanding debt.
CIT's exchange offers expire at 11:59 pm, New York City time, on
Thursday, October 29, 2009, with the exception of the additional
notes maturing after 2018 for which there is an early acceptance
date of October 29, 2009 and expiration date of November 13, 2009.
The Delaware Funding exchange offers expire at 11:59 p.m. New York
City time on Thursday, November 5, 2009 and have an Early Tender
Date of October 29, 2009. In the CIT Group Inc. exchange offers,
tendered securities may be validly withdrawn at any time prior to
the applicable expiration date, except to the extent that the
tender of securities on or prior to the early acceptance date has
been accepted. In the Delaware Funding Exchange Offers tendered
securities may be validly withdrawn at any time prior to the early
tender date.
A copy of the amended Offering Memorandum, which includes the
proposed Plan of reorganization is available at:
http://researcharchives.com/t/s?477c
The Information Agent for the Offer is D.F. King & Co. Financial
Balloting Group, LLC is serving as Exchange Agent for the Exchange
Offers and Voting Agent for the Plan of Reorganization. Retail
holders of notes with questions regarding the voting and exchange
process should contact the information agent at (800) 758-5880 or
+1 (212) 269-5550. Banks and brokers with questions regarding the
voting and exchange process should contact the exchange and voting
agent at +1 (646) 282-1888. BofA Merrill Lynch and Citigroup
Global Markets are acting as financial advisors to the Company for
purposes of this transaction.
Evercore Partners, Morgan Stanley and FTI Consulting are the
Company's financial advisors and Skadden, Arps, Slate, Meagher &
Flom LLP is legal counsel in connection with the restructuring
plan. Sullivan & Cromwell is legal advisor to CIT's Board of
Directors.
CIT Restructuring
CIT Group, on July 29, 2009, entered into a credit agreement, with
Barclays Bank PLC, as administrative agent, and the lenders party
thereto, for loans of up to $3 billion.
CIT Group was required to adopt a restructuring plan acceptable by
lenders starting October 1, 2009. Under the plan, CIT Group Inc.
and CIT Group Funding Company of Delaware LLC (Delaware Funding)
launched exchange offers for certain unsecured notes. The Offers
will expire at 11:59 p.m., (prevailing Eastern Time), 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. The Company is
concurrently soliciting bondholders and other holders of CIT debt
to approve a prepackaged plan of reorganization.
CIT 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.
Treatment Under
-----------------------------------------------
Security Exchange Offer Bankruptcy Plan
-------- ------------------- ---------------------
Senior Debt 90 cents of New Notes, 70 cents of New Notes,
Maturing 2009 plus New Preferred Stock plus New Common
Interests
Senior Debt 85 cents of New Notes, 70 cents of New Notes,
Maturing 2010 plus New Preferred Stock plus New Common
Interests
Includes 5.38%
Notes due
June 15, 2017,
which notes
have a put
right on
June 15, 2010
Senior Debt 80 cents of New Notes, 70 cents of New Notes,
Maturing plus New Preferred Stock plus New Common
Interests
2011 - 2012
Senior Debt 70 cents of New Notes, 70 cents of New Notes,
Maturing plus New Preferred Stock plus New Common
Interests
2013 or Later
Structurally 100 cents of New Notes 100 cents of New Notes
Senior Debt
Includes
Delaware
Funding notes
and does not
include
certain other
structurally
senior debt
such as CIT
Group (Australia)
Limited notes
Subordinated New Preferred Stock New Common Interests
Debt plus, Contingent Value
Rights
Jr Subordinated New Preferred Stock New Common Interests
Debt plus, Contingent Value
Rights
Preferred Stock, Not Solicited Contingent Value Rights
Series A, B,
C and D
Common Stock Not Solicited No Recovery
CIT is proposing to lenders of other debt an out-of-court
restructuring on economically equivalent terms with the New Notes.
Other debt includes Bank Credit Lines of $3.1 billion and Other
Private Debt of $1.2 billion.
Carl Icahn sent a letter to CIT Group's board of directors on
October 19, complaining that CIT is "shamelessly offering" large
unsecured bondholders the opportunity to purchase $6 billion in
secured loans in the company at well below fair market value -- at
the expense of thousands of smaller bondholders who will not be
given the same opportunity.
As an alternative, Mr. 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.
About CIT Group
CIT Group Inc. (NYSE: CIT) -- http://www.cit.com/-- is a bank
holding company with more than $60 billion in finance and leasing
assets that provides financial products and advisory services to
small and middle market businesses. Operating in more than 50
countries across 30 industries, CIT provides an unparalleled
combination of relationship, intellectual and financial capital to
its customers worldwide. CIT maintains leadership positions in
small business and middle market lending, retail finance,
aerospace, equipment and rail leasing, and vendor finance.
Founded in 1908 and headquartered in New York City, CIT is a
member of the Fortune 500.
As of June 30, 2009, CIT Group had total assets of $71,019,200,000
against total debts of $64,901,200,000.
CIT GROUP: Restructuring Plan to Make Icahn Largest Shareholder
---------------------------------------------------------------
Carl Icahn would emerge as the largest shareholder in a
reorganized CIT Group Inc. if the Company's proposed restructuring
plan goes through, Mike Spector and Kate Haywood at The Wall
Street Journal report, citing people familiar with the matter.
According to The Journal, it is unclear how much debt Mr. Icahn
owns or when he bought it, but he claims that he is CIT's largest
bondholder. The Journal relates Mr. Icahn said he had resigned
from Yahoo Inc.'s board, saying he was focused on "a number of
other companies."
CIT, The Journal states, said that it has added $4.5 billion to a
$3 billion emergency loan put in place by a group of its largest
bondholders in July.
CIT Restructuring
CIT Group, on July 29, 2009, entered into a credit agreement, with
Barclays Bank PLC, as administrative agent, and the lenders party
thereto, for loans of up to $3 billion.
CIT Group was required to adopt a restructuring plan acceptable by
lenders starting October 1, 2009. Under the plan, CIT Group Inc.
and CIT Group Funding Company of Delaware LLC (Delaware Funding)
launched exchange offers for certain unsecured notes. Under the
offers, 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. The Company is
concurrently soliciting bondholders and other holders of CIT debt
to approve a 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.
Carl Icahn sent a letter to CIT Group's board of directors on
October 19, complaining that CIT is "shamelessly offering" large
unsecured bondholders the opportunity to purchase $6 billion in
secured loans in the company at well below fair market value -- at
the expense of thousands of smaller bondholders who will not be
given the same opportunity.
As an alternative, Mr. 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.
About CIT Group
CIT Group Inc. (NYSE: CIT) -- http://www.cit.com/-- is a bank
holding company with more than $60 billion in finance and leasing
assets that provides financial products and advisory services to
small and middle market businesses. Operating in more than 50
countries across 30 industries, CIT provides an unparalleled
combination of relationship, intellectual and financial capital to
its customers worldwide. CIT maintains leadership positions in
small business and middle market lending, retail finance,
aerospace, equipment and rail leasing, and vendor finance.
Founded in 1908 and headquartered in New York City, CIT is a
member of the Fortune 500.
As of June 30, 2009, CIT Group had total assets of $71,019,200,000
against total debts of $64,901,200,000.
CIT GROUP: Susan Lyne to Resign From Board Effective October 31
---------------------------------------------------------------
CIT Group Inc. reports that on October 22, 2009, Susan M. Lyne
notified the Company that she was resigning as a member of the
Board of Directors, effective October 31. Ms. Lyne, Chief
Executive Officer of Gilt Groupe Inc. and a member of the
Company's Compensation Committee, advised the Company that her
decision was based on the increased time demands on directors of
the Company over the prior year and time constraints related to
her other professional commitments and responsibilities.
CIT Restructuring
CIT Group, on July 29, 2009, entered into a credit agreement, with
Barclays Bank PLC, as administrative agent, and the lenders party
thereto, for loans of up to $3 billion. CIT Group was required to
adopt a restructuring plan acceptable by lenders starting
October 1, 2009. Under the plan, CIT Group Inc. and CIT Group
Funding Company of Delaware LLC (Delaware Funding) launched
exchange offers for certain unsecured notes. 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. The Company is
concurrently soliciting bondholders and other holders of CIT debt
to approve a prepackaged plan of reorganization.
CIT Group Inc. on October 16 amended its restructuring plan to
further build bondholder support.
About CIT Group
CIT Group Inc. (NYSE: CIT) -- http://www.cit.com/-- is a bank
holding company with more than $60 billion in finance and leasing
assets that provides financial products and advisory services to
small and middle market businesses. Operating in more than 50
countries across 30 industries, CIT provides an unparalleled
combination of relationship, intellectual and financial capital to
its customers worldwide. CIT maintains leadership positions in
small business and middle market lending, retail finance,
aerospace, equipment and rail leasing, and vendor finance.
Founded in 1908 and headquartered in New York City, CIT is a
member of the Fortune 500.
As of June 30, 2009, CIT Group had total assets of $71,019,200,000
against total debts of $64,901,200,000.
CIT GROUP: To Pledge Leases & Receivables Under Expansion Facility
------------------------------------------------------------------
CIT Group Inc. reports that the collateral currently pledged to
its $3 billion Senior Secured debt facility consists of assets and
international equity. The assets consist primarily of operating
leases of $3.928 billion and receivables of $13.032 billion.
Equity values of $10.8 billion are based upon capital account
balances according to the Company's general ledger and are
reflected at the appropriate pledged percentages.
CIT says the collateral that is proposed to be pledged for the
expansion facility consists primarily of operating leases of
$3.586 billion and receivables of $8.069 billion. All values were
calculated as of August 31, 2009 on an entity-by-entity basis with
adjustments made, as necessary, to isolate only pledged assets and
equity.
A description of CIT's collateral is available at no charge at:
http://ResearchArchives.com/t/s?4769
CIT anticipates the potential need to refinance certain existing
secured credit facilities as part of its pending restructuring
plan. To meet those needs, the Company has been in discussions
concerning an expansion of the current $3 billion secured credit
facility by an incremental $4.5 billion.
The proposed terms of the New Credit Facility are described in
more detail on a term sheet, a copy of which is available at no
charge at http://ResearchArchives.com/t/s?476a
Bank of America, N.A., will serve as Administrative and Collateral
Agent under the Expansion Term Facility.
The commitments for term loans under the Expansion Term Facility
will be made available to the Borrowers in a principal amount of
$4.5 billion. The Borrowers may, at their option, request
additional commitments for Expansion Term Loans in a principal
amount of up to $2.0 billion.
Expansion Loan Funding by October 28
The Expansion Term Commitments will be provided to the Borrowers
pursuant to the Amended Credit Facility by the October 28, 2009
Signing Date. The Expansion Term Loans are anticipated to be
funded pursuant to the Amended Credit Facility in not more than
two drawings, upon the request of the Borrowers, in an aggregate
amount up to $4.5 billion. All drawings of Expansion Term Loans
will be made on or prior to November 30, 2009. In the event CIT
files for Chapter 11, no amounts may be borrowed by, or released
from the collateral account directly to, a Debtor, other than
pursuant to an intercompany loan in accordance with the terms of a
cash management order in form and substance reasonably
satisfactory to the Lenders Steering Committee.
The Maturity of the Expansion Term Loans is January 2012, with the
ability to extend all or a portion of the then outstanding
Expansion Term Loans for one additional year at the option of the
Borrowers, provided no Default has occurred and is continuing and
subject to the payment of an extension fee in an amount equal to
2.0% of the Expansion Term Loans so extended.
The proceeds of the Expansion Term Facility will be used:
(i) to refinance existing indebtedness and other obligations
(including in each case the payment of accrued but unpaid
interest in addition to the related fees, expenses,
termination payments, make-whole premiums, swap breakage
costs and other similar expenses) of CIT and its
subsidiaries and certain other indebtedness and
obligations reasonably consented to by the Lenders
Steering Committee, subject to, where applicable,
receiving perfected liens on the additional collateral,
(ii) for additional conduit financings reasonably consented to
by the Lenders Steering Committee,
(iii) for trade receivables financings in an amount equal to
$1.0 billion less the amount of term loan proceeds
applied to a refinancing of the existing trade
receivables conduit financing,
(iv) by C.I.T. Leasing Corporation to make an unsecured
intercompany loan in an amount of approximately
$540 million to CIT Financial Ltd., to be used by CFL to
facilitate an amendment to that certain ISDA Master
Agreement, Schedule to the ISDA Master Agreement, Credit
Support Annex and Confirmation, each dated June 6, 2008,
between CIT Financial Ltd. and Goldman Sachs
International and the related guarantees by CIT Group
Inc. and CIT Financial (Barbados) Srl, in each case as
amended -- TRS Facility -- to pay a make-whole premium
and provide cash collateral in respect thereof,
(v) by Borrowers other than CIT Group Inc. in an amount of up
to $500 million (plus a cushion of 5% for U.S. dollar-
denominated letters of credit and 20% for non-U.S.
denominated letters of credit), to cash collateralize
letters of credit under that certain 5-year letter of
credit issuance and reimbursement agreement, dated as of
May 23, 2005, among CIT, JPMorgan Chase Bank, N.A., as
administrative agent and issuing bank, and the other
banks and financial institutions from time to time party
thereto -- JPM Facility -- and letters of credit
(including replacements of letters of credit issued under
the JPM Facility) issued under a new facility for the
issuance of letters of credit for the benefit of CIT and
its subsidiaries, and
(v) by Borrowers other than CIT Group Inc. in an amount of up
to $500 million for general corporate purposes, including
without limitation the use of up to $150 million of such
amount to provide financing for obligors under a joint
venture relationship with Avaya Inc., and including fees
and expenses related to the transactions contemplated.
Prior to being used for a Permitted Purpose the proceeds of the
Expansion Term Facility will be deposited in one or more cash
collateral account to secure the Amended Credit Facility.
The New Credit facility will be secured by substantially the same
assets as the existing $3 billion secured credit facility plus any
additional collateral which becomes available as a result of the
Company's repayment of the re-financed indebtedness.
The Company also continues to explore alternative financing
arrangements proposed by other parties. There can be no assurance
that the New Credit Facility will be obtained on the terms set
forth in the term sheet or at all.
Trade Receivables Conduit Facility
CIT currently finances a portion of its trade receivables pursuant
to a $1.3 billion conduit facility which expires on December 18,
2009. Approximately $600 million is currently owed under the
Facility. The terms of the Facility require the Company to submit
reports to the Facility lenders on a regular basis. CIT has
learned of certain miscalculations in the reports that generally
related to the calculation of specific lending limitations such as
concentration limits. While at all times the borrowings were
over-collateralized and the dollar amount of the receivables in
the collateral pool were unaffected, the result of these errors
was an over-advance which constituted a termination event under
the terms of the Facility.
Following discovery of the calculation errors the resulting over-
borrowings were promptly repaid and the Facility was brought into
full compliance. CIT is currently in discussions with the
Facility lenders regarding an amendment and waiver with respect to
the termination events. The Facility lenders have requested
economic compensation for a waiver that the Company believes is
unwarranted given the overcollateralization of the Facility and
other sources of liquidity available to the Company. Accordingly,
if an amendment and waiver cannot be obtained on reasonable
economic terms, the Company would let the Facility terminate and
finance its trade receivables from existing liquidity and once
completed, the new credit facility previously disclosed. The
operations and funding of our clients has been unaffected.
CIT Restructuring
CIT Group, on July 29, 2009, entered into a credit agreement, with
Barclays Bank PLC, as administrative agent, and the lenders party
thereto, for loans of up to $3 billion.
CIT Group was required to adopt a restructuring plan acceptable by
lenders starting October 1, 2009. Under the plan, CIT Group Inc.
and CIT Group Funding Company of Delaware LLC (Delaware Funding)
launched exchange offers for certain unsecured notes. The Offers
will expire at 11:59 p.m., (prevailing Eastern Time), 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. The Company is
concurrently soliciting bondholders and other holders of CIT debt
to approve a prepackaged plan of reorganization.
CIT 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.
Treatment Under
-----------------------------------------------
Security Exchange Offer Bankruptcy Plan
-------- ------------------- ---------------------
Senior Debt 90 cents of New Notes, 70 cents of New Notes,
Maturing 2009 plus New Preferred Stock plus New Common
Interests
Senior Debt 85 cents of New Notes, 70 cents of New Notes,
Maturing 2010 plus New Preferred Stock plus New Common
Interests
Includes 5.38%
Notes due
June 15, 2017,
which notes
have a put
right on
June 15, 2010
Senior Debt 80 cents of New Notes, 70 cents of New Notes,
Maturing plus New Preferred Stock plus New Common
Interests
2011 - 2012
Senior Debt 70 cents of New Notes, 70 cents of New Notes,
Maturing plus New Preferred Stock plus New Common
Interests
2013 or Later
Structurally 100 cents of New Notes 100 cents of New Notes
Senior Debt
Includes
Delaware
Funding notes
and does not
include
certain other
structurally
senior debt
such as CIT
Group (Australia)
Limited notes
Subordinated New Preferred Stock New Common Interests
Debt plus, Contingent Value
Rights
Jr Subordinated New Preferred Stock New Common Interests
Debt plus, Contingent Value
Rights
Preferred Stock, Not Solicited Contingent Value Rights
Series A, B,
C and D
Common Stock Not Solicited No Recovery
CIT is proposing to lenders of other debt an out-of-court
restructuring on economically equivalent terms with the New Notes.
Other debt includes Bank Credit Lines of $3.1 billion and Other
Private Debt of $1.2 billion.
A full-text copy of CIT management's slide presentation regarding
its restructuring plan is available at no charge at
http://ResearchArchives.com/t/s?476b
Carl Icahn sent a letter to CIT Group's board of directors on
October 19, complaining that CIT is "shamelessly offering" large
unsecured bondholders the opportunity to purchase $6 billion in
secured loans in the company at well below fair market value -- at
the expense of thousands of smaller bondholders who will not be
given the same opportunity.
As an alternative, Mr. 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.
About CIT Group
CIT Group Inc. (NYSE: CIT) -- http://www.cit.com/-- is a bank
holding company with more than $60 billion in finance and leasing
assets that provides financial products and advisory services to
small and middle market businesses. Operating in more than 50
countries across 30 industries, CIT provides an unparalleled
combination of relationship, intellectual and financial capital to
its customers worldwide. CIT maintains leadership positions in
small business and middle market lending, retail finance,
aerospace, equipment and rail leasing, and vendor finance.
Founded in 1908 and headquartered in New York City, CIT is a
member of the Fortune 500.
As of June 30, 2009, CIT Group had total assets of $71,019,200,000
against total debts of $64,901,200,000.
CLEM CARINALLI: U.S. Trustee Names 9 to Creditors Committee
-----------------------------------------------------------
Nathan Halverson at The Press Democrat reports that eight
investors and one bank have been appointed to lead a committee
that will represent the interests of unsecured creditors in Clem
Carinalli Chapter 11 bankruptcy case. According to The Press
Democrat, the members include:
-- Five Star Bank, a Redding bank that is owed $2.2 million
in unsecured debt;
-- retired Santa Rosa attorney Robert Sinai and his wife,
Rachel Sinai;
-- Sebastopol investor Jon Ledyard;
-- retired developer Charles Cooper and his wife, Norma
Cooper;
-- former Sonoma County supervisor George DeLong;
-- Stephen Opperman, vice president of Opperman & Son trucks;
and
-- Citrus Heights resident Robert O'Brien.
The U.S. Bankruptcy Judge Alan Jaroslovsky converted the Chapter 7
liquidation case of Clem Carinalli and his wife, Ann Marie, into
Chapter 11 reorganization, at the behest of the Debtors. As
reported by the TCR on September 17, 2009, a group of investors
claiming that they are owed almost $1 million by Mr. Carinalli
filed a petition to force him into Chapter 7 bankruptcy in the
U.S. Bankruptcy Court in Santa Rosa. Mr. Carinalli owes creditors
some $150 million. Exchange Bank President William Schrader said
that the involuntary bankruptcy could delay loan payments to the
bank and other institutions. Mr. Carinalli said that he was
hoping to avert bankruptcy and instead negotiate privately with
investors, as that would increase the odds of paying creditors
back. Mr. Carinalli hired debt restructuring consultant Steve
Huntley to negotiate with creditors.
COACHMEN INDUSTRIES: Says Q3 Revenues Lower Than Anticipated
------------------------------------------------------------
Elkhart, Indiana-based Coachmen Industries, Inc., on Friday issued
a cautionary statement regarding its third quarter results.
During the 3rd quarter, single family home sales remained
depressed at very low levels. The Company saw virtually none of
the widely predicted rebound in the housing markets. Potential
buyers remained unable to obtain financing. In addition, several
major projects the Company anticipated were postponed by the
developers or deferred. On the Specialty Vehicle side, General
Motors interrupted the supply of chassis used on the ARBOC
Mobility Bus in August and subsequently curtailed 2010 model
diesel chassis for the U.S. market. As a result of these
challenges, the Company's revenues were lower than anticipated.
Although the Company has taken additional action to further reduce
its costs of operations, the Company will again post a loss for
the third quarter.
Further, while the Company was unable to close upon any additional
source of capital during the quarter, it is still actively
pursuing opportunities for convertible debt with third parties
from whom it received proposed term sheets during the quarter.
The Company will provide additional details when it makes its full
earnings release later this month.
As reported by the Troubled Company Reporter on August 6, 2009,
Coachmen Industries posted a wider net loss of $3.24 million for
the three months ended June 30, 2009, compared with $2.96 million
for the same period a year ago. Coachmen posted a net income of
$5.06 million for the six months ended June 30, 2009, compared
with a net loss of $1.63 million for the same period a year ago.
At June 30, 2009, the Company had $97.7 million in total assets
and $39.6 million in total liabilities.
About Coachmen Industries
Coachmen Industries, Inc., (OTC: COHM.PK) is one of America's
premier systems-built construction companies under the ALL
AMERICAN BUILDING SYSTEMS(R), ALL AMERICAN HOMES(R) and MOD-U-
KRAF(R) brands, as well as a manufacturer of specialty vehicles.
* * *
In March 2009, Coachmen's independent public accounting firm,
Ernst & Young LLP, said that despite the Company's sale of the
assets related to its RV Segment, its recurring net losses and
lack of current liquidity raise substantial doubt about its
ability to continue as a going concern.
Coachmen said its ability to continue as a going concern is highly
dependent on its ability to obtain financing or other sources of
capital.
COLORADO PUBLIC: Moody's Affirms 'Ba1' Rating on $4.8 Mil. Bonds
----------------------------------------------------------------
Moody's Investors Service has affirmed the Ba1 rating on Colorado
Public Radio's $4.8 million of Series 2002 Bonds issued through
the Colorado Educational and Cultural Facilities Authority. The
outlook remains negative. The negative outlook reflects the
continued thin level of resources to cushion a potentially
volatile revenue base during a challenged economic environment
coupled with CPR's inability to-date to sell its Denver AM station
and use sale proceeds to defease the Series 2002 bonds.
Legal Security: Payments under the Loan Agreement are a general
obligation of Colorado Public Radio; debt service reserve fund;
security interest in Pledged Revenues (all of CPR's revenue) and a
security interest in any proceeds from the transfer of CPR's FCC
Licenses (as defined in the Loan Agreement).
Debt-Related Derivatives: None
Challenges
* Limited reserves to hedge unexpected revenue shortfalls or
spikes in operating expenses. CPR continues to maintain a thin
balance of operating cash providing little cushion to absorb
changes in a potentially volatile revenue base derived largely
from corporate and individual support. In an effort to ensure
sufficient cash balances in the summer and early fall months
(when cash is typically at its low point) management maintains
a $250,000 line of credit of which $100,000 is currently drawn.
Outside operating funds, CPR maintains a modest reserve of
unrestricted, liquid short-term investments of approximately
$0.5 million supporting over $13.1 million of outstanding debt
and a $10 million (FY 2009) dollar operating budget. At the
same time, Moody's notes the presence of a fully cash funded
debt service reserve fund for the benefit of bondholders.
* Management reports expectations for the reduction of revenues
during the 2010 fiscal year due to the economic downturn.
Management is budgeting for moderate declines in membership
revenues and underwriting support for the current fiscal year
with total revenues expected to decline approximately 9%.
Management reports that they have made appropriate cuts to the
expense base and expects at least balanced operations for the
year.
Strengths
* Strong market niche as the almost exclusive provider of high-
quality non-commercial classical news and information
programming in the state of Colorado.
* Notable increase in demand in FY 2009 due to strategic move to
FM broadcasting. Overall audience estimates in FY 2009 grew to
and all time high of approximately 366,400 from 328,240 in FY
2008 (not including internet listening). While programming is
now being broadcast on both AM and FM radio, management
anticipates no significant drop in audience when the AM station
is sold or utilized for alternate purposes.
* Trend of break even operations. CPR produced an average
operating margin of 0% for the last three years (as calculated
by Moody's) providing an adequate 1.3 times average debt service
coverage ratio. While preliminary FY 2009 unaudited financials
indicate a 19% increase in subscription/individual support as a
result of increased demand, Moody's notes the commensurate
growth of the expense base resulting in limited growth of
reserves. Management reports expectations for modest declines
in membership revenue and underwriting support for FY 2010 due
to the current economic climate.
Recent Developments:
In July 2008, Colorado Public Radio entered into a Local
Management Agreement with an LLC whose sole member is Public Radio
Capital in order to lease the station 88.1 FM in Denver in an
effort to grow CPR's listening audience. CPR intended to sell its
Denver 1340 AM Station ($3.6 million market valuation provided by
Public Radio Capital as of July 2008); however, CPR has not been
able to secure a purchaser of the AM station to-date and is
currently evaluating alternate uses for the station. Since the
Series 2002 bonds benefit from a security interest in any proceeds
from the transfer of any of CPR's FCC licenses, any sale proceeds
would be used to defease all or a portion of the Series 2002
bonds.
Per the LMA, which has been recorded as a capital lease on the
balance sheet, CPR is obligated to pay approximately $450,000
annual lease payments for the first two years of the lease and
roughly $730,000 annually for years 3 through 5. All lease
payments are subordinate to debt service payments on the Series
2002 bonds. Per the LMA, CPR must meet certain financial
covenants including the funding of a $1.01 million Reserve
Account, related to the debt issued on behalf of the LLC to
purchase the FM station. As of 6/30/09, CPR had a combined
$1.6 million of reserves for debt service, related to the Series
2002 bonds and the new capital lease.
Outlook
The negative outlook reflects Moody's concern regarding the thin
level of reserves to support a potentially volatile revenue base
that is highly dependent on corporate and individual giving.
Moody's also notes concern regarding medium-term growth in debt
service payments coupled with the inability to sell the AM station
which continues to burden the balance sheet.
What could change the rating - UP
Significant growth of unrestricted cash and investments to provide
stronger a cushion of support for debt and operations;
strengthened operating performance
What could change the rating - DOWN
Decline in member contributions, underwriting revenue, or
reserves; additional borrowing; inability to find buyer for AM
station at a reasonable price
Key Indicators (FY 2008 financial data):
* Numbers included in parentheses represent preliminary 2009
financials
* Listeners: 366,400
* Total Direct Debt: ($13.1 million)
* Expendable Financial Resources: $2.4 million ($2.4 million)
* Expendable Resources to Direct Debt: 0.48 times (0.18 times)
* Expendable Resources to Operations: 0.26 times (0.24 times)
* Reliance on membership fees: 48.5%
* Reliance on corporate underwriting: 32.1%
Rated Debt:
* Series 2002; Ba1
The rating on the Series 2002 Bonds was assigned by evaluating
factors believed to be relevant to the credit profile of Colorado
Public Radio such as i) the nature of the dedicated revenue stream
pledged to the bonds, 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 business risk and
competitive position of the issuer versus others within its
industry or sector, v) the budgeting flexibility of the issuer,
vi) the issuer's management and governance structure.
The last rating action was on Dec. 19, 2008, when Colorado Public
Radio's rating was downgraded and the negative outlook assigned.
COMMONWEALTH BIOTECHNOLOGIES: Must Comply with NASDAQ Listing Rule
------------------------------------------------------------------
On July 24, 2009, The NASDAQ Stock Market notified Commonwealth
Biotechnologies, Inc., that CBI was to be delisted from the NASDAQ
Capital Market as a result of a failure to comply with NASDAQ
Listing Rule 5550(b) due to a failure to maintain minimum
stockholders' equity of $2.5 million and a failure to file a Form
8-K affirming compliance with Rule 5550(b). Subsequently, CBI
requested and was granted a hearing to present its plan for
regaining compliance under the Rule. That hearing was convened on
September 3, 2009. On October 20, 2009, CBI was notified that the
Hearing Panel has granted the request of CBI to remain listed on
The NASDAQ Stock Market through January 20, 2010, subject to the
condition that, on or before January 20, 2010, CBI evidence
shareholders' equity of at least $2.5 million or demonstrate
compliance with one of the alternative listing criteria of NASDAQ
Listing Rule 5550(b).
As reported by the Troubled Company Reporter on Aug. 28, 2009,
CBI said that there is substantial doubt about its ability
to continue as a going concern. The Company added that its cash
position will again remain uncertain in 2009. The Company said
that the lack of adequate cash resulting from the inability to
generate cash flow from operations or to raise capital from
external sources would force it to substantially curtail or cease
operations and would, therefore, have a material adverse effect on
its business.
Based in Richmond, Virginias, Commonwealth Biotechnologies, Inc.
-- http://www.cbi-biotech.com/-- is a contract research
organization that offers a range of services for the discovery and
development of therapeutics, vaccines and diagnostics by working
as a partner with its customers in the global life sciences
industries. Applying skills from its extensive experience serving
life sciences companies worldwide, CBI offers insight, innovation
and project management capabilities to customers, whether
pharmaceutical giants or emerging biotechnology companies.
CONGOLEUM CORP: Files Amended Plan with District Court
------------------------------------------------------
Congoleum Corp. filed with the U.S. District Court for the
District of New Jersey a Second Amended Joint Plan of
Reorganization and an explanatory disclosure statement on October
22.
Congoleum filed the Second Amended Plan, at the behest of the
District Court. After reversing an order by the bankruptcy court
that denied confirmation of Congoleum's plan and dismissing the
chapter 11 case, the District Court directed the Debtors to file a
new plan of reorganization that would provide for court review of
the payments made to claimants' counsel and requested briefing on
additional confirmation issues.
A hearing to consider the adequacy of the disclosure statement
Case to determine the adequacy of the Disclosure Statement has
been scheduled for November 19, 2009 at 9:30 a.m. before the
Honorable Joel A. Pisano. Objections are due November 5.
In general, the Second Amended Plan provides, among other things,
for the issuance of injunctions under section 524(g) of the
Bankruptcy Code that result in the channeling of all asbestos
related liabilities of the Company into a Plan Trust. The Second
Amended Plan also provides for the issuance of 50.1% of the shares
of newly created Congoleum common stock to the trust, and 49.9% of
the shares of newly created Congoleum common stock to the holders
of allowed senior note claims.
The Plan is being co-proposed by the official asbestos claimants'
committee and the official committee of bondholders formed in the
Chapter 11 cases.
A copy of the Second Amended Plan is available for free at:
http://bankrupt.com/misc/Congoleum_Plan_Oct09.pdf
A copy of the Disclosure Statement is available for free at:
http://bankrupt.com/misc/Congoleum_DiscStatement_Oct09.pdf
The District Court on August 17, 2009, entered a ruling reversing
a ruling by the Bankruptcy Court that Congoleum's plan was
unconfirmable. Congoleum appealed the Bankruptcy Court's denial
of the Plan and the dismissal of the Chapter 11 case. Following
its decision in favor of Congoleum, the District Court assumed
jurisdiction over the proceedings from the Bankruptcy Court.
As reported by the TCR on Sept. 29, 2009, a consortium of
insurers, including TIG Insurance Co., U.S. Fire Insurance Co. and
Old Republic Insurance Co., have appealed the District Court's
ruling resurrecting Congoleum's Chapter 11 case. On October 2,
2009, the District Court entered an order refusing to certify the
August 17 Order for interlocutory appeal.
On September 14, 2009 and September 24, 2009, the insurers filed
notices of appeal of the August 17 Order to the Third Circuit
Court of Appeals. On October 9, the Plan Proponents filed a motion
to dismiss the appeal for lack of jurisdiction, which is currently
pending before the Third Circuit.
The District Court has scheduled the Confirmation Hearing to
commence on March 29, 2009.
About Congoleum Corp
Based in Mercerville, New Jersey, Congoleum Corporation (OTC:
CGMC) -- http://www.congoleum.com/-- manufactures and sells
resilient sheet and tile floor covering products with a wide
variety of product features, designs and colors.
The Company filed for Chapter 11 protection on December 31, 2003
(Bankr. D. N.J. Case No. 03-51524) as a means to resolve claims
asserted against it related to the use of asbestos in its products
decades ago. Richard L. Epling, Esq., Robin L. Spear, Esq., and
Kerry A. Brennan, Esq., at Pillsbury Winthrop Shaw Pittman LLP,
and Paul S. Hollander, Esq., and James L. DeLuca, Esq., at Okin,
Hollander & DeLuca, LLP, represent the Debtors.
The Asbestos Claimants' Committee is represented by Peter Van N.
Lockwood, Esq., and Ronald Reinsel, Esq., at Caplin & Drysdale,
Chtd. The Bondholders' Committee is represented by Michael S.
Stamer, Esq., and James R. Savin, Esq., at Akin Gump Strauss Hauer
& Feld LLP. Nancy Isaacson, Esq., at Goldstein Isaacson, PC,
represents the Official Committee of Unsecured Creditors.
R. Scott Williams, Esq., at Haskell Slaughter Young & Rediker,
LLC, the Court-appointed Futures Claimants Representative, is
represented by Roger Frankel, Esq., Richard Wyron, Esq., and
Jonathan P. Guy, Esq., at Orrick Herrington & Sutcliffe LLP, and
Stephen B. Ravin, Esq., at Forman Holt Eliades & Ravin LLC.
American Biltrite, Inc. (AMEX: ABL), which owns 55% of Congoleum,
is represented by Matthew Ward, Esq., Mark S. Chehi, Esq.,
Christopher S. Chow, Esq., and Matthew P. Ward, Esq., at Skadden
Arps Slate Meagher & Flom.
Various entities have filed bankruptcy plans for the Debtors. In
February 2008, the legal representative for future asbestos-
related claimants; the asbestos claimants' committee; the official
Committee of holders of the Company's 8-5/8 % Senior Notes due
August 1, 2008; and Congoleum jointly filed a joint plan of
reorganization. Various objections to the Joint Plan were filed.
In June 2008, the Bankruptcy Court issued a ruling that the Joint
Plan was not legally confirmable.
In August 2008, the Bondholders' Committee, the ACC, the FCR,
representatives of holders of prepetition settlements and
Congoleum entered into a term sheet describing the proposed
material terms of a new plan of reorganization and a settlement of
avoidance litigation with respect to prepetition claim settlement.
Certain insurers and a large bondholder filed objections to the
Litigation Settlement or reserved their rights to object to
confirmation of the Amended Joint Plan. The Bankruptcy Court
approved the Litigation Settlement in October 2008. The Amended
Joint Plan was filed in November 2008.
In January 2009, certain insurers filed a motion for summary
judgment seeking denial of confirmation of the Amended Joint Plan.
On February 26, 2009, the Bankruptcy Court rendered an opinion
denying confirmation of the Amended Joint Plan. Moreover, the
Bankruptcy Court dismissed Congoleum's bankruptcy case.
On February 27, 2009, Congoleum and the Bondholders' Committee
appealed the Order of Dismissal and the ruling denying plan
confirmation to the U.S. District Court for the District of New
Jersey. The District Court overturned the dismissal order.
CRABTREE & EVELYN: Files Reorganization Plan, Closes 30 Stores
--------------------------------------------------------------
Crabtree & Evelyn, Ltd, has filed a reorganization plan in the
U.S. Bankruptcy Court for the Southern District of New York, court
documents say. Reuters reports that Crabtree said that it was
negotiating with its parent for exit financing sufficient to pay
debtor-in-possession loan that funded its bankruptcy and to
provide working capital once the Company exits Chapter 11.
Reuters relates that a hearing is set for January 14, 2010 for the
approval of the plan. Secured creditors, according to Reuters,
will get full recovery, while unsecured creditors will get up to
45% of their claims. Crabtree has closed 30 of its 126 stores as
part of its reorganization.
Woodstock, Connecticut-based Crabtree & Evelyn, Ltd. --
http://www.crabtree-evelyn.com/-- has evolved from a small,
family-run business, to a company with worldwide manufacturing and
distribution capabilities, worldwide distribution channels and 126
retail locations in the United States, making it well-known and
respected for its English-style elegance. Through a multi-channel
sales strategy, including sales through retail, wholesale, export,
affiliate and internet channels, it manufactures and distributes
its products worldwide.
The Company is a direct, wholly owned subsidiary of Crabtree &
Evelyn Holdings Limited. Crabtree & Evelyn Holdings is a direct,
wholly-owned subsidiary of CE Holdings Ltd., a British Virgin
Islands based investment holding company. CE Holdings is a direct,
wholly-owned subsidiary of KLKOI. KLKOI is a direct, wholly owned
subsidiary of Kuala Lumpur Kepong Berhad, a Malaysian corporation
("KLK"). KLK is a Malaysian public limited liability company, the
stock of which is publicly traded on the Kuala Lumpur stock
exchange.
The Company filed for Chapter 11 on July 1, 2009 (Bankr. S.D.N.Y.
Case No. 09-14267). Lawrence C. Gottlieb, Esq., at Cooley Godward
Kronish LLP, represents the Debtor in its restructuring efforts.
The Debtor has hired employ Clear Thinking Group LLC as financial
advisor; KPMG Corporate Finance LLC as real estate consultant;
Epiq Bankruptcy Solutions LLC as claims agent. The Debtor has
assets and debts both ranging from $10 million to $50 million.
CREEKSHIRE DEVELOPMENT: Case Summary & 16 Largest Unsec. Creditors
------------------------------------------------------------------
Debtor: Creekshire Development, LLC
1234 Mann Drive, Suite 100
Matthews, NC 28105
Bankruptcy Case No.: 09-32951
Chapter 11 Petition Date: October 23, 2009
Court: United States Bankruptcy Court
Western District of North Carolina (Charlotte)
Judge: George R. Hodges
Debtor's Counsel: James H. Henderson, Esq.
JAMES H. HENDERSON, P.C.
1201 Harding Place
Charlotte, NC 28204-2248
Tel: (704) 333-3444
Fax: (704) 333-5003
Email: henderson@title11.com
Estimated Assets: $0 to $50,000
Estimated Debts: $1,000,001 to $10,000,000
A full-text copy of the Debtor's petition, including a list of its
16 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/ncwb09-32951.pdf
The petition was signed by Terry Predzimirski.
DAYTON SUPERIOR: Exits Chapter 11, Has $110MM Exit Loan
-------------------------------------------------------
Dayton Superior Corporation has emerged from Chapter 11 bankruptcy
protection effective October 26, pursuant to a Plan of
Reorganization approved by the U.S. Bankruptcy Court for the
District of Delaware in Wilmington on October 14, 2009. In
conjunction with the Plan, Dayton Superior closed its $110 million
exit financing facility and new $100 million term loan.
"All of us at Dayton Superior are very pleased to be out of
Chapter 11," said Eric R. Zimmerman, Dayton Superior's President
and Chief Executive Officer. "We set four goals when we began
this process: significantly reduce our debt, maintain business as
usual through the reorganization, create the most value for
creditors, and emerge in an expedited manner with a sustainable
capital structure. We believe we have accomplished all of these."
"On behalf of the Board of Directors and Management, I would like
to extend my gratitude to our employees for their hard work and
dedication and to our customers, distributors, suppliers, and
advisors for their support during the reorganization," said
Zimmerman. "We would also like to thank our bank consortium --
Bank of America, UBS and Key Bank as well as our existing term
lenders, Silverpoint and Davidson Kempner, for their confidence in
us as demonstrated by our exit financing facilities. We would
especially like to thank our financial sponsors, Oaktree Capital
Management, L.P. and Solus Alternative Asset Management LP, for
their substantial investment in Dayton Superior. It represents a
strong statement of confidence in the future of the Company."
Under the Plan as implemented, with the proceeds of the sponsor
supported Rights Offering, $161 million of prepetition Senior
Subordinated Notes were converted into new stock of the
reorganized Company and $70 million debt obligations were paid
down, resulting in a total reduction of over two-thirds of the
Company's prepetition debt. Oaktree, the largest prepetition note
holder, owns a substantial majority of the stock of the new
Company, which is privately held. All old Dayton Superior common
shares are cancelled and receive no recovery.
"Through this financial reorganization, we have substantially
reduced the debt burden that severely restricted the Company for
nearly a decade," said Zimmerman. "Our exit facility will provide
more than adequate liquidity to meet all of our working capital
and capital investment needs. Our conservative capital structure
provides the capacity to endure an extended period of economic
weakness and still take advantage of investment opportunities that
come our way.
"In addition to restructuring our debt, we also took advantage of
the reorganization process by rationalizing our physical
infrastructure and consolidating regional operations. As a result,
we are a stronger, better integrated operation, with a more
efficient distribution and rental operations footprint," said Mr.
Zimmerman.
"With this reorganization finally behind us, Dayton Superior is
poised to capitalize on its position as the leading company in its
industry, and we are pleased to have Dayton Superior as one of our
portfolio companies," said Jordon Kruse, Managing Director,
Oaktree Capital Management. "Oaktree and its affiliates have
extensive experience and a proven track record of success with
companies like Dayton Superior. We are committed investors and
look forward to working with management in improving and expanding
Dayton Superior's industry-leading role."
The Chapter 11 Plan
Dayton Superior said October 14 that the Bankruptcy Court has
confirmed the Company's Plan of Reorganization. The Plan was
accepted by an overwhelming majority of Dayton Superior's
creditors.
Under the Plan as confirmed by the court, Dayton Superior will
eliminate $230 million in debt, or approximately 65% of its total
debt at filing, and annual interest payments will be reduced by
approximately $24 million. All existing common shares in the
Company are being cancelled and will receive no recovery. The
Company will emerge with a new $110 million, four-year revolving
credit facility and a $100 million term loan.
Under the confirmed Plan, $170 million prepetition senior
subordinated notes will be converted into new stock of the
reorganized Company. Qualified note holders have purchased
additional shares of stock through a $100 million rights offering
which was backstopped by Oaktree, the largest prepetition note
holder. When the Plan becomes effective, Oaktree will own a
substantial majority of the stock of the reorganized Company,
which will be privately held and operated by the current
management team.
About Dayton Superior
Headquartered in Dayton, Ohio, Dayton Superior Corporation (Pink
Sheets: DSUPQ) -- http://www.daytonsuperior.com/-- makes and
distributes construction products. Aztec Concrete Accessories
Inc., Dayton Superior Specialty Chemical Corporation, Dur-O-Wa
Inc., Southern Construction Products Inc., Symons Corporation and
Trevecca Holdings Inc. were merged with the Company December 31,
2004.
The Company filed for Chapter 11 protection on April 19, 2009
(Bankr. D. Del. Case No. 09-11351). Keith A. Simon, Esq., Jude M.
Gorman, Esq., and Joseph S. Fabiani, Esq., at Latham & Watkins LLP
serve as the Debtors' bankruptcy counsel. Russell C. Silberglied,
Esq., John H. Knight, Esq., Paul N. Heath, Esq., and Lee E.
Kaufman, Esq., at Richards, Layton & Finger, P.A., serve as
Delaware counsel. Dayton Superior had $288,709,000 in assets and
$405,867,000 in debts as of February 27, 2009.
DAVIS PETROLEUM: Davis Heiress Can't Sue Over Bankruptcy Sale
-------------------------------------------------------------
Thom Weidlich at Bloomberg News reports that Nancy Davis, daughter
of late billionaire Marvin Davis, lost a bid to file a court
complaint alleging that her brother Gregg cheated his siblings and
mother out of millions of dollars by low-balling the value of
Davis Petroleum Corp. in a forced bankruptcy sale.
U.S. Bankruptcy Judge Richard Schmidt ruled that Nancy Davis's
complaint is barred by the confirmed bankruptcy plan for Davis
Petroleum. "This court, after an exhaustive review of the record,
previously held that there was no fraud in the procurement of the
confirmation order," Judge Schmidt wrote. "Plaintiff's current
iteration of the same cause of action is equally meritless and
should not be allowed."
As reported in the Troubled Company Reporter on March 14, 2006, a
private equity group led by Evercore Capital Partners LP, which
also includes the company's senior management, Red Mountain
Capital Partners, and Sankaty Advisors, an affiliate of Bain
Capital, purchased all the equity of Davis Petroleum, Davis
Offshore LP, and Davis Pipeline LP from the former owners for
approximately $150 million.
Nancy Davis, 52, accused Gregg Davis, 46, of conspiring with
Evercore, Bain and a former Goldman Sachs Group Inc. partner
Willem Mesdag to buy Davis Petroleum for only $150 million when it
was worth as much as $1 billion. They denied her accusations,
according to Bloomberg News.
Nancy Davis is seeking at least $50 million in damages for her
trust, saying she was cheated out of at least that much, according
to the unfiled complaint.
Except for Nancy Davis's trust, "all parties, including Davis
family counsel, and Barbara Davis, mother of Nancy Sue Davis,
urged the court to confirm the plan in order to salvage some value
for the family," Judge Schmidt wrote in his opinion.
U.S. bankruptcy law precludes "all actions seeking to collaterally
attack the confirmation order on grounds other than fraud in its
procurement," Schmidt wrote.
About Davis Petroleum Corp.
Headquartered in Houston, Texas, Davis Petroleum Corp. --
http://www.davispetroleumcorp.com/-- was an oil and gas
exploration and production company operating in the onshore and
intermediate-deep water Gulf of Mexico, Texas, Louisiana, Oklahoma
and the Rocky Mountain region. The Company filed for chapter 11
protection on March 7, 2006 (Bankr. S.D. Tex. Case No. 06-20152).
Rhett G. Campbell, Esq., Diana Merrill Woodman, Esq., and Matthew
Ray Reed, Esq., at Thompson & Knight LLP, and Nathaniel Peter
Holzer, Esq., at Jordan Hyden Womble Culbreth & Holzer PC,
represent the Debtors. When the Debtors filed for protection from
their creditors, they listed $50 to $100 million in estimated
assets and $50 to $100 million in estimated debts.
In March 2006, the Court confirmed a reorganization plan for Davis
Petroleum. The plan was based on a sale of the Company for $150
million to a private equity group led by Evercore Capital
Partners LP, which also includes the company's senior management,
Red Mountain Capital Partners, and Sankaty Advisors, an affiliate
of Bain Capital, purchased all the equity of Davis Petroleum,
Davis Offshore LP, and Davis Pipeline LP.
DBSI INC: An 'Elaborate Shell Game,' Says Examiner Report
---------------------------------------------------------
According to Bill Rochelle at Bloomberg News, Joshua Hochberg, the
examiner for DBSI Inc., filed his final report calling the seller
and servicer of fractional interests in commercial real estate an
"elaborate shell game" that "consistently operated at a loss."
Mr. Hochberg, former head of the Justice Department's fraud unit,
described a company operating like a Ponzi scheme with money from
investors that was used "to fund current operating expenses of a
failing enterprise."
Mr. Hochberg said in his in interim report in August that the
Debtors had common ownership of, exercise control over, and
engaged in complex financial transactions with non-debtor related
companies. Mr. Hochberg's preliminary conclusions also said that
"highly questionable" internal valuations and appraisals were used
to support loans from the bond and note programs sponsored by
DBSI. The examiner's interim report prompted the bankruptcy judge
to appoint a Chapter 11 trustee effective in September.
In the new report, he described how a plethora of related
companies were used to "obfuscate the true source and use of funds
that were transferred between entities." To keep the scheme
afloat, money was commingled and "disbursed for the most pressing
obligations as they came due," the final report says.
Mr. Hochberg determined that the DBSI companies "were in
continuous need of new investor funds to fund pre-existing
obligations at least as early as 2005." Financial problems were
traceable to high interest costs and "excessive insider
distributions."
The accounting records, according to the examiner, were
"unreliable, unorganized, inconsistent, and often unintelligible."
Mr. Hochberg previously served as examiner for Refco Inc., the
liquidated futures broker. The examiner tapped Don B.
Southerland, Jr., CPA, a former FBI special agent, to serve as his
principal investigator, and Hays Financial Consulting, LLC as his
financial advisors. Mr. Hochberg also hired the law firm of
McKenna Long & Aldridge LLP as his counsel in the Chapter 11 cases
and Cole, Schotz, Meisel, Forman & Leonard, P.A. as Delaware
counsel.
About DBSI Inc.
Headquartered in Meridian, Idaho, DBSI Inc. and its affiliates
were engaged in numerous commercial real estate and non-real
estate projects and businesses.
On November 10, 2008, and other subsequent dates, DBSI and 180 of
its affiliates filed for Chapter 11 protection (Bankr. D. Del.
Lead Case No. 08-12687). Lawyers at Young Conaway Stargatt &
Taylor LLP represent the Debtors as counsel. The Official
Committee of Unsecured Creditors tapped Greenberg Traurig, LLP, as
its bankruptcy counsel. Kurtzman Carson Consultants LLC is the
Debtors' notice claims and balloting agent. When the Debtors
filed for protection from their creditors, they listed assets and
debts between $100 million and $500 million.
Joshua Hochberg, a former head of the Justice Department fraud
unit, has been named examiner to investigate allegations of fraud
by the Debtors and their management. The state of Idaho had
accused DBSI of engaging in a Ponzi scheme and defrauding
thousands of investors out of millions of dollars through the sale
of unregistered securities.
DELTA AIR LINES: Deadline to Object to Claims Extended to April 19
------------------------------------------------------------------
Judge Cecilia G. Morris of the United States Bankruptcy Court for
the Southern District of New York extended to April 19, 2010, the
period within which Delta Air Lines, Inc., and its debtor-
affiliates may file objections to proofs of claims filed in their
Chapter 11 cases.
The Debtors have said that the Extended Claims Objection Deadline
will allow them to properly analyze remaining claims.
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.
DELTA AIR LINES: Reports $161 Mil. Net Loss for Sept. Quarter
-------------------------------------------------------------
Delta Air Lines reported on October 22, 2009, financial results
for the September 2009 quarter. Key points include:
* Delta's net income for the September 2009 quarter was
$51 million, or $0.06 per share, excluding $212 million in
special items. This result is $115 million better than
prior year on a combined basis.
* Delta's reported net loss for the September 2009 quarter was
$161 million, or $0.19 per share.
* Delta raised $600 million in incremental liquidity, addressed
40% of 2010 debt maturities and ended the September 2009
quarter with $5.8 billion in unrestricted liquidity.
* Delta has achieved $500 million in merger benefits in the
first three quarters of 2009, reaching its 2009 target ahead
of plan.
* Delta's 2010 system capacity is expected to decline
approximately 3% compared to 2009.
"Our ability to earn a profit for the quarter shows we are making
sound decisions for our business in this difficult economic
environment. While we now see encouraging revenue and booking
trends, we remain cautious in these early stages of an uncertain
recovery," said Richard Anderson, Delta's chief executive
officer. "My thanks go out to the Delta people who delivered
great customer service, ran a solid operation, and moved forward
with our merger integration, all against the backdrop of a very
challenging economy."
Revenue Environment
Delta's operating revenue on a GAAP(3) basis grew 32% to
$7.6 billion in the September 2009 quarter compared to the prior
year period as a result of its merger with Northwest Airlines. On
a combined basis, total operating revenue declined $2.0 billion,
or 21%, and total unit revenue (RASM) declined 17%.
(in millions) 3Q09 3Q08 Incr 3Q09 3Q08 Incr
GAAP GAAP (Decr) GAAP Combined (Decr)
------ ------ ----- ---- -------- ------
Passenger $6,524 $4,978 31% $6,524 $8,329 (22)%
Cargo 177 162 9% 177 364 (51)%
Other, net 873 579 51% 873 839 4%
------ ------ ----- ------ -------- ------
Total Operating
Revenue $7,574 $5,719 32% $7,574 $9,532 (21)%
====== ====== ===== ====== ======== ======
On a combined basis:
* Total operating revenue declined 21% versus prior year due
to the global economic recession.
* Passenger revenue decreased 22%, or $1.8 billion, compared
to the prior year period due to the global economic
recession and a 4% capacity reduction. Passenger unit
revenue (PRASM) declined 18%, driven by a 19% decline in
yield.
* Cargo revenue declined 51%, or $187 million, reflecting
lower volume and yields. Freighter capacity was 38% lower
year over year as a result of the actions Delta is taking to
discontinue freighter flying by the end of 2009.
* Other, net revenue grew 4%, or $34 million, primarily due to
increased baggage fee revenue.
Comparisons of revenue-related statistics:
Increase (Decrease)
3Q09 (GAAP) versus 3Q08 (Combined)
----------------------------------
3Q09 ($M) Change Unit
GAAP YOY Revenue Yield Capacity
--------- --------------------------- --------
Passenger Revenue
Domestic $2,901 (19.7)% (16.8)% (17.2)% (3.5)%
Atlantic 1,353 (30.1)% (22.7)% (25.8)% (9.6)%
Latin America 294 (22.2)% (18.2)% (20.3)% (4.9)%
Pacific 574 (27.8)% (25.8)% (23.9)% (2.7)%
------
Total mainline 5,122 (23.8)% (19.5)% (20.6)% (5.3)%
Regional 1,402 (12.8)% (14.0)% (15.6)% 1.5%
------
Consolidated $6,524 (21.7)% (18.1)% (19.1)% (4.4)%
"The global recession drove a significant revenue decline for the
quarter, but we see improving trends in load factors, yield and
business traffic," said Edward Bastian, Delta's president. "We
will continue to exercise capacity restraint, coupled with strong
cost control to effectively manage this."
Cost Discipline
In the September 2009 quarter, Delta's operating expense on a
GAAP basis increased $1.8 billion year over year due to the
impact of the company's merger with Northwest Airlines, partially
offset by lower fuel price. On a combined basis, excluding
special items, operating expense decreased $2.1 billion due to
lower fuel expense, productivity improvements and merger
benefits.
In millions, except where noted:
3Q09 3Q08 Incr 3Q09 3Q08 Incr
GAAP GAAP (Decr) GAAP Combined (Decr)
---- ---- ------ ---- -------- ----
Operating
expense $7,370 $5,588 32% $7,370 $9,619 (23)%
Operating
expense
ex-
special
items $7,241 $5,564 30% $7,241 $9,316 (22)%
Consoli-
dated
CASM 11.56 13.47 (14)% 11.56 14.30 (19)%
cents cents cents cents
Consoli-
dated
CASM
ex-fuel
expense
and
special
items 7.82 7.66 2% 7.82 7.63 2%
cents cents cents cents
Mainline
CASM 10.54 11.82 (11)% 10.54 13.13 (20)%
cents cents cents cents
Mainline
CASM
ex-fuel
expense
and
special
items 6.94 6.58 5% 6.94 6.81 2%
cents cents cents cents
Non-operating
expense $383 $181 112% $383 $277 38%
On a combined basis:
* Both consolidated and mainline unit cost (CASM),
excluding fuel expense and special items, increased 2% year
over year in the September 2009 quarter due to higher
pension expense.
* Non-operating expenses excluding special items increased $23
million in the September 2009 quarter primarily due to non-
cash debt discount amortization.
"Despite our significant capacity reductions, Delta successfully
mitigated unit cost pressures through improved productivity,
strong cost discipline and accelerating our merger synergies,"
said Hank Halter, chief financial officer. "While we have
additional cost pressures in the fourth quarter from new capacity
reductions, we expect to offset most, if not all, of this
impact."
Liquidity Position
As of Sept. 30, 2009, Delta had $5.8 billion in unrestricted
liquidity, including $5.5 billion in cash, cash equivalents and
short-term investments and $300 million available in an undrawn
revolving credit facility.
During the September 2009 quarter, Delta completed $2.1 billion
in new financing transactions, addressing 40% of 2010 debt
maturities and generating $600 million in incremental liquidity.
The new financing consisted of $1.35 billion of secured notes, a
$500 million revolving credit facility and a $250 million term
loan facility, all of which were secured by the airline's Pacific
routes and related assets.
During the quarter, the company made $1.2 billion of debt and
capital lease payments which includes $900 million for the
Northwest bank credit facility. In addition, the company amended
Northwest's revolving credit facility to reduce the total
borrowing capacity from $500 million to $300 million.
Capital expenditures during the quarter were approximately
$150 million, which includes $75 million for investments in
aircraft, parts and modifications.
Merger with Northwest
Through the first three quarters of 2009, Delta has achieved
$500 million in synergy benefits from its merger with Northwest
Airlines, reaching its 2009 target ahead of plan. The company
now expects to generate $700 million in total merger synergies in
2009. Synergies achieved to date include improved revenue from
increased market share and Delta's affinity card agreement. In
addition, cost reductions have been achieved from streamlined
overhead, facilities and technology, elimination of dedicated
freighter flying and supply chain savings.
The company is on track in its integration efforts and expects to
obtain a Single Operating Certificate by the end of 2009. Recent
achievements include:
* Creating the world's largest airline loyalty program by
combining the Northwest WorldPerks program and Delta
SkyMiles;
* Relocating the Northwest System Operations Center from
Minneapolis to Delta's Operations Control Center in Atlanta;
* Transitioning reservations agents in five pre-merger
Northwest call centers to the Delta Reservations system;
* Continuing pilot and flight attendant training to prepare
for single carrier operations;
* Renegotiating more than 600 corporate contracts to date,
generating incremental business traffic;
* Re-branding more than 240 airports to provide consistent
Delta branding at more than 98% of airports served
worldwide; and
* Painting more than 230 pre-merger Northwest aircraft in the
Delta livery.
Fuel Price and Related Hedges
Delta hedged 53% of its fuel consumption for the September 2009
quarter, which resulted in $226 million in realized fuel hedge
losses and premiums for the period. As a result, Delta's average
fuel price for the September 2009 quarter was $2.13 per gallon,
which includes $0.11 per gallon associated with fuel hedge
losses.
The table represents the fuel hedges Delta had in place as of
October 16, 2009:
4Q09 1Q10 2Q10 3Q10
-----------------------------------
Call options 22% 24% 11% 3%
Collars - 3% - -
Swaps 17% 1% - -
-----------------------------------
Total 39% 28% 11% 3%
-----------------------------------
Avg. crude call strike $82 $67 $68 $91
Avg crude collar cap - 68 - -
Avg crude collar floor - 60 - -
Avg. crude swap $63 $69 - -
September 2009 Quarter Highlights
During the September 2009 quarter, Delta continued to position
itself as the world's No. 1 airline, with an ongoing commitment
to employees, customers and communities. Highlights include:
* Paying more than $50 million year-to-date in employee Shared
Rewards for achieving operational performance goals;
* Reaching a definitive agreement with US Airways to exchange
slots and airport facilities at New York's LaGuardia and
Washington's Reagan National airports, subject to regulatory
approval, which will enable Delta to serve an additional
two million customers at LaGuardia annually without added
congestion;
* Partnering with the City of Atlanta to reach an agreement to
extend Delta's lease at Hartsfield-Jackson Atlanta
International Airport through 2017 to maintain the airport's
position as the leading airport in the world;
* Enhancing BusinessElite service from New York by adding
full-flat beds to all flights between New York-JFK and
London-Heathrow and new BusinessElite service flights
connecting New York-JFK to Los Angeles and San Francisco;
* Announcing the 2010 SkyMiles Medallion program offering
frequent flyers new, industry-leading benefits including a
Diamond level status and rollover Medallion Qualification
Miles; and
* Launching the first joint Delta and Northwest Habitat for
Humanity build in the U.S. with projects in Atlanta,
Cincinnati, Detroit, Memphis, Minneapolis/St. Paul and New
York and partnering -- for the fifth consecutive year, with
the Breast Cancer Research Foundation to add to the nearly
$1.5 million previously raised through on-board pink product
sales and donations.
Special Items
Delta recorded special charges totaling $212 million in the
September 2009 quarter, including:
* $83 million to write-off unamortized non-cash debt discount
associated with the refinancing of certain Northwest debt;
* $78 million in merger-related items; and
* $51 million in charges for employee severance programs.
Delta recorded special charges totaling $24 million in the
September 2008 quarter, including:
* A $14 million charge for early termination fees under
contract carrier arrangements;
* $7 million in merger-related expenses; and
* A $3 million net charge primarily for facilities
restructuring and severance.
December 2009 Quarter Guidance
Delta presented its projections for the December 2009 quarter.
This guidance is presented on a combined basis:
4Q 2009 Forecast 2009 Forecast
---------------- -------------
Fuel price, including taxes and
hedges $2.14 $2.14
Operating margin Breakeven Breakeven
Capital expenditures $250 million $1.4 billion
Total liquidity as of
Dec. 31, 2009 $5.0 billion
4Q 2009 Forecast
(compared to 4Q
2008) 2009 vs. 2008
---------------- -------------
Consolidated unit costs,
Excluding fuel expense Up 3 - 4% Up 2 - 3%
Mainline unit costs,
excluding fuel expense Up 3 - 4% Up 2 - 3%
System capacity Down 9 - 11% Down 7 - 9%
Domestic Down 5 - 7% Down 7 - 9%
International Down 14 - 16% Down 7 - 9%
Mainline capacity Down 9 - 11% Down 7 - 9%
Domestic Down 6 - 8% Down 7 - 9%
International Down 14 - 16% Down 6 - 8%
DELTA AIR LINES, INC.
Unaudited Consolidated Statements of Operations
Three Months Ended Sept. 30, 2009
Operating Revenue:
Passenger
Mainline $5,122,000,000
Regional Carriers 1,402,000,000
----------------
Total Passenger Revenue 6,524,000,000
Cargo 177,000,000
Other, net 873,000,000
----------------
Total Operating Revenue 7,574,000,000
Operating expenses:
Aircraft fuel and related taxes 1,973,000,000
Salaries and related costs 1,894,000,000
Contract carrier arrangements 1,009,000,000
Contracted services 415,000,000
Depreciation and amortization 385,000,000
Aircraft maintenance 334,000,000
Passenger commissions 384,000,000
Landing fees and other rents 340,000,000
Passenger service 181,000,000
Aircraft rent 123,000,000
Restructuring and merger-related items 129,000,000
Other 203,000,000
----------------
Total operating expenses 7,370,000,000
----------------
Operating income (loss) 204,000,000
Other income (loss):
Interest expense (319,000,000)
Interest income 4,000,000
Loss on extinguishment of debt (83,000,000)
Miscellaneous, net 15,000,000
----------------
Total other expense, net (383,000,000)
----------------
Loss before income taxes (179,000,000)
Income Tax (Provision) Benefit 18,000,000
----------------
Net Loss ($161,000,000)
================
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.
DELTA AIR LINES: Stipulation Resolving MMA & MDE Claims
-------------------------------------------------------
The Maryland Aviation Administration filed an unsecured non-
priority Claim No. 4650 against Delta for $23,343,868 for damages
resulting from the alleged release of allegedly hazardous
materials at the Baltimore/Washington International Airport
airport fuel farm formerly leased to Delta.
The Maryland Department of the Environment filed Claim No. 4651
against Delta asserting the same amount and priority, and on the
same basis, as the MAA claim. In October 2007, MDE transferred
the MDE Claim to MAA. Accordingly, MAA now holds both the MDE
Claim and the MAA Claim.
To resolve the Claims, Delta and MAA agreed that:
(1) in full and final satisfaction of the Claims, (i) the MAA
Claim will be deemed reduced to, and allowed as, a non-
priority general unsecured claim against Delta for
$3,250,000, (ii) the MDE Claim will be deemed
satisfied and expunged, and (iii) the Reorganized Debtors'
claims agent will be authorized and directed, without the
need for any further Court order, to amend the claims
register to reflect the effect of the Stipulation.
(2) MAA may seek satisfaction of the Claims only as set forth
in the Plan, and that in no event will the Reorganized
Debtors be liable to MAA with respect to the Claims or the
obligations giving rise to the Claims.
(3) MAA fully discharges the Reorganized Debtors from the
Claims.
The Stipulation will not be deemed an admission of liability on
the part of the Reorganized Debtors with respect to the Claims.
The parties ask Judge Morris to approve their stipulation.
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.
DELVCO PHARMA: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Delvco Pharma Packaging Services, Inc.
150 East 7th Street
Paterson, NJ 07524
Bankruptcy Case No.: 09-38360
Chapter 11 Petition Date: October 23, 2009
Court: United States Bankruptcy Court
District of New Jersey (Newark)
Debtor's Counsel: Jeffrey A. Cooper, Esq.
Carella, Bryne, Bain, Gilfillan, Cecchi
5 Becker Farm Road
Roseland, NJ 07068-1735
Tel: (973) 994-1700
Email: JCooper@carellabyrne.com
Marc D. Miceli, Esq.
Carella, Byrne, et al.
5 Becker Farm Rd.
Roseland, NJ 07066
Tel: (973) 994-1700
Email: mmiceli@carellabyrne.com
Estimated Assets: $500,001 to $1,000,000
Estimated Debts: $1,000,001 to $10,000,000
A full-text copy of the Debtor's petition, including a list of its
20 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/njb09-38360.pdf
The petition was signed by Mark J. Cohen, president of the
Company.
DENNIS SPIELBAUER: Can Sell California Property for $586,000
------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of California
authorized Dennis S. Spielbauer to sell his real property in 476
South 5th Street, San Jose, California, to Shan Chung and Wen-Li
Chung for $586,000 pursuant to Section 363 of the Bankruptcy Code,
free and clear of all liens.
The Court also authorized the Debtor to pay the liens of the
County of Santa Clara and the City of San Jose; a 5% sales
commission to Intero Real Estate Services, Inc; closing costs;
Franchise Tax Board withholding as necessary; the first deed of
trust holder, Bank of the West as Trustee for the Donald A. Glazer
IRA and then, as funds allow, to payment of the second deed of
trust holders, FaramarzYazdani and Afsaneh Yazdani, Trustees of
the FaramarzYazdani and Afsaneh Yazdani Family Trust, dated
April 23, 1996, and then to the bankruptcy estate.
The net proceeds from the sale will be held in escrow with liens
to attach to the proceeds in the same manner and priority as they
were attached to the property. The funds will be distributed when
the sales of Garrison Circle, 842 East St. John and 47th Ave. have
closed according to the order of the Court or the agreement of the
parties as approved by the Court.
In a separate motion, the Debtor asked the Court for permission to
sell its real property located at 499 South 5th Street, San Jose,
California. The Debtor related that Wan Pin Yu and Pei Chiang
offered to buy the estates interest.
The net proceeds from the sale, after payment of the property
taxes to the County of Santa Clara, liens to the City of San Jose,
5% commission to Intero Real Estate Services, closing costs, FTB
withholding and payment of U.S. Bank, will be paid out of escrow
to the lienholders in the order of their priority until all funds
have been disbursed. The Debtor proposed that the title will be
passed to the buyers free and clear of all liens.
Both properties were marketed by Intero Real Estate Services.
About Dennis S. Spielbauer
Headquartered in San Jose, California, Dennis S. Spielbauer dba
Royal Pacific Properties, Golden Gate Financial Management filed
for Chapter 11 protection on March 10, 2009 (Bankr. N.D. Calif.
Case No. 09-51654). David A. Boone, Esq., at the Law Offices of
David A. Boone, represents the Debtor. When the Debtor
filed for protection from its creditors, he listed between
$10 million and $50 million each in assets of and debts.
DM 668 LLC: Voluntary Chapter 11 Case Summary
---------------------------------------------
Debtor: DM 668, LLC
100 South Pointe Drive, #3804
Miami Beach, Fl 33139
Bankruptcy Case No.: 09-33059
Chapter 11 Petition Date: October 23, 2009
Court: United States Bankruptcy Court
Southern District of Florida (Miami)
Judge: A. Jay Cristol
Debtor's Counsel: James B. Miller, Esq.
19 W Flagler St #416
Miami, FL 33130
Tel: (305) 374-0200
Fax: (305) 374-0250
Email: bkcmiami@gmail.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
The Debtor did not file a list of its 20 largest unsecured
creditors when it filed its petition.
The petition was signed by David Marvisi, president/chairman of
the Company.
DOLE FOOD: S&P Puts 'B-' Corp. Rating on CreditWatch Positive
-------------------------------------------------------------
Standard & Poor's Ratings Services said that it placed its ratings
on produce and packaged food producer Dole Food Co. Inc.,
including its 'B-' corporate credit rating, on CreditWatch with
positive implications.
"The CreditWatch placement follows Dole's announcement that it
priced its IPO, previously announced on Aug. 14, 2009, which S&P
now expect will close on Oct. 28, 2009," said Standard & Poor's
credit analyst Alison Sullivan. "Upon successful completion of
the IPO, S&P expects net proceeds will be used repay debt and
improve credit measures and the company's liquidity position."
Dole plans to use proceeds of about $446 million from the IPO to
repay debt. Following the debt repayment, S&P estimate pro forma
credit measures could improve to about 4.8x total debt to EBITDA
and about 13% funds from operations to total debt for the 12
months ended June 20, 2009, compared with 5.7x total debt to
EBITDA and 11% FFO to total debt before the transaction.
Dole previously indicated that planned debt repayment would
include its $200 million to repay all of the 8.875% senior notes
due March 2011, and a portion of its $350 million 13.875% notes
due March 2014. In addition, Dole plans to use $85 million to
repay a portion of an affiliate's $115 million loan due March
2010. This affiliate loan (related to a hotel and wellness
center) was not historically included on Dole's balance sheet, yet
is currently held by Dole's parent, DHM Holding Co. Inc.
Immediately prior to the consummation of the IPO, DHM Holdings
(including its interest in the hotel and wellness center and its
$115 million loan) will merge into Dole. Dole will then transfer
the ownership interest and $30 million of the loan to affiliates
of David Murdock (Dole's current shareholder).
Following the completion of the IPO, Standard & Poor's will review
Dole's new capital structure, its financial policy as a public
company, as well as review the company's operating and financial
plans, before resolving the CreditWatch listing. S&P will also
review S&P's recovery ratings as part of this resolution process.
DOLLARAMA GROUP: S&P Raises Corporate Credit Rating to 'BB-'
------------------------------------------------------------
Standard & Poor's Ratings Services said it raised its long-term
corporate credit rating on Dollarama Group L.P. to 'BB-' from
'B+'. The outlook is stable.
At the same time, S&P affirmed the 'BB-' issue-level rating on the
company's term loan A, term loan B, and revolving credit facility,
and revised the recovery rating on this debt to '3' from '2'. A
'3' recovery rating indicates S&P's expectation of meaningful
(50%-70%) recovery in the event of a payment default.
In addition, S&P raised the issue-level rating on Dollarama's
senior subordinated debt to 'B' from 'B-'. The recovery rating is
unchanged at '6', indicating S&P's expectation of negligible (0%-
10%) recovery in the event of default. Finally, S&P raised the
rating on Dollarama Group Holdings Corp.'s senior deferred
interest notes to 'B' from 'B-'. The '6' recovery rating on the
debt is unchanged.
"We raised the corporate credit rating on Dollarama following the
company's completion of an IPO, the proceeds from which it used to
significantly reduce its debt," said Standard & Poor's credit
analyst Donald Marleau.
The ratings on Dollarama reflect Standard & Poor's view of the
company's significant financial risk profile, characterized by
high, but improving, debt leverage and strong liquidity. These
rating factors are partially mitigated, in S&P's opinion, by
Dollarama's leading market share in the Canadian dollar store
segment, attractive real estate locations, and solid prospects for
revenue and earnings growth. Although S&P believes the company's
medium-term financial policy remains unclear, the paydown of debt
with its recent C$300 million IPO significantly improves its
leverage and eliminates any near-term concerns S&P had regarding
tight covenants under its banking facilities.
Dollarama is Canada's largest chain of dollar stores, with more
than 585 stores in all 10 Canadian provinces, all of which are
corporate-operated and leased under the Dollarama banner. The
stores stock both consumable and semi-durable goods, with a
variety of seasonal and impulse items, sold in individual or
multiple units at select fixed price points between $1.00 and
$2.00. In 2004, Bain Capital purchased an 80% equity interest in
Dollarama from the Rossy family for C$1 billion. The equity is
held at Dollarama Capital Corp., while the debt was issued at
Dollarama Group L.P. and Dollarama Group Holdings L.P. All assets
reside at the wholly owned operating subsidiaries of Dollarama
Group L.P.
The stable outlook reflects Dollarama's lower debt levels and
prospects for enhanced profitability and leverage. Standard &
Poor's believes the expansion of Dollarama's merchandising
offering to C$2.00 priced goods and improved overall merchandising
capabilities should improve operating earnings in the next year.
S&P believes that stronger profitability should help Dollarama
achieve fully adjusted debt leverage of about 4x in the next year,
which is consistent with the 'BB-' rating. On the other hand, the
ratings or outlook could be under pressure if operating weakness
or increased debt lead to lease-adjusted leverage weakening to
more than 4.5x.
DRYSHIPS INC: Posts US$35.6MM Net Profit for Q3 2009
----------------------------------------------------
DryShips Inc. announced its unaudited financial and operating
results for the third quarter and nine month period ended
September 30, 2009.
Third Quarter 2009 Financial Highlights:
-- For the third quarter of 2009, the Company reported a net
profit of US$35.6 million or US$0.12 basic and diluted
profit per share. Included in the third quarter 2009
results is a loss of US$39.3 million or US$0.15 per share
associated with the valuation of the Company's interest
rate swaps. Excluding this item, net income would amount
to US$74.9 million or US$0.27 per share.
-- Basic earnings per share for the third quarter of 2009
include a non-cash accrual for the cumulative dividends on
the Series A Convertible Preferred Stock, amounting to
US$4.0 million, which reduces the income available to
common shareholders (basic earnings per share is
calculated as net income less accrued dividends on
preferred stock divided by weighted average number of
common shares outstanding).
George Economou, Chairman and Chief Executive Officer of the
Company commented: "We are pleased to report another quarter of
profitable operating results for DryShips as both our drilling and
drybulk units continued to perform at high utilization rates. We
are particularly pleased with the high utilization rates achieved
by the Eirik Raude, which is drilling off Ghana at the Jubilee
field for Tullow Oil. The Leiv Eiriksson is expected to complete
its assignment with Shell in the North Sea during October and
commence mobilization for drilling operations in the Black Sea
under a 3-year contract for Petrobras. Most economic indicators
for the world economy seem to indicate the end of the recession
and we are also seeing the signs of recovery from countries
besides China and India. The stimulus plan implemented by the
Chinese government earlier in the year has by no means played
itself out, as the majority of this money went to infrastructure
development which is medium to long term projects. While drybulk
shipping demand is projected to remain strong for the coming
years, the large orderbook remains a cause for concern, especially
for 2010. Actual deliveries in the first nine months of 2009 were
much smaller than were anticipated at the beginning of the year
and offer some hope that cancellations and delays will alleviate
the projected oversupply.
"Our drybulk fleet is now virtually fully fixed for the remainder
of 2009 and 2010 and 77% fixed for 2011 at healthy levels and we
are prepared to leverage the volatility in freight rates in the
future through further vessel acquisitions. DryShips now has
US$1.44 billion in fixed EBITDA from its dry bulk and drilling
units over the next 2.25 years and we are well positioned to take
advantage of acquisition opportunities as they arise."
As of September 30, 2009, the Company had US$5,404,843,000 in
total assets against US$1,900,444 in total current liabilities and
US$836,760,000 in total non-current liabilities, resulting in
US$2,667,639,000 in stockholders' equity.
The Company's management team will host a conference call, on
October 27, 2009 at 8:30 AM Eastern Daylight Time to discuss the
Company's financial results.
A full-text copy of the Company's earnings release is available at
no charge at http://ResearchArchives.com/t/s?477d
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 US$116 million and US$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
US$187.5 million of outstanding debt, where constructive
discussions
with the banks continue for waivers and we expect to have those
concluded shortly."
DryShips Inc. (NASDAQ: DRYS) 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 39
drybulk carriers comprising seven Capesize, 30 Panamax and two
Supramax, with a combined deadweight tonnage of over 3.4 million
tons, 2 ultra deep water semisubmersible drilling rigs and 4 ultra
deep water newbuilding drillships.
EDSCHA NORTH AMERICA: Wants to Use Cash for 30-Day Period
---------------------------------------------------------
According to Bill Rochelle at Bloomberg News, Edscha North America
Inc. reported to the Bankruptcy Court that the lenders failed to
make filings necessary to have a security interest in bank
accounts holding $160,000. The Company, the report relates, is
seeking authority to use $22,700 to pay expenses for the month
ended Nov. 18, even though operations are terminated. The Company
is liable on a $628 million guarantee of the Germany-based
parent's bank debt.
Germany-based Edscha AG manufactures door hinges, convertible
roofs and driver controls for major carmakers. It was previously
owned by buyout firm Carlyle Group.
Edscha AG, the German auto parts company and parent of Edscha
North America, filed for insolvency for its European operations on
Feb. 2, 2009. At the time, it cited "massive declining trends" in
the auto industry and difficulty in obtaining financing.
The debts incurred by the company's leveraged buyout through
Carlyle in late 2002 "was not responsible" for the insolvency
filing, but the massive slump in car sales. The insolvency of
Edscha followed a 50% drop in some of the company's businesses
during the fourth quarter of 2008.
Edscha North America Inc., has filed for Chapter 11 reorganization
(Bankr. N.D. Ill. Case No. 09-39055), eight months after its
German parent filed for insolvency. The Company listed assets of
$6.44 million and liabilities of $672.4 million in its voluntary
Chapter 11 petition.
ELECTRICAL COMPONENTS: S&P Cuts Corporate Credit Rating to 'CCC-'
-----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on St.
Louis, Missouri-based Electrical Components International Inc.,
including the corporate credit rating, to 'CCC-' from 'CCC+'.
The downgrade reflects continued liquidity constraints. "The
company has minimal cash, which may be insufficient to meet
obligations over the next several quarters," said Standard &
Poor's credit analyst Sarah Wyeth. "In addition, the company
remains in violation of its leverage covenant," she continued.
If ECI cannot improve its liquidity position, S&P could lower the
rating. If the company misses an interest or principal payment,
S&P would lower the rating to 'D'. If the company initiates an
exchange offer, which S&P could view as distressed and tantamount
to default, S&P could lower the corporate credit rating to 'SD'.
ELECTRONIC SENSOR: Lehman Brothers Bankhaus Discloses 6.1% Stake
----------------------------------------------------------------
Lehman Brothers Bankhaus AG (i. Ins.) discloses it may be deemed
to beneficially own 9,571,945 shares or roughly 6.1% of the common
stock of Electronic Sensor Technology, Inc.
As of December 31, 2008, Lehman Brothers Bankhaus had shared
voting and investment power over the securities. At some time
prior to September 16, 2008, Lehman Brothers Bankhaus purchased
the Securities pursuant to a master repurchase agreement. Under
this agreement, Lehman Brothers Bankhaus had shared voting and
investment power over the Securities with other parties to the
agreement.
Lehman Brothers Bankhaus commenced insolvency proceedings in
Germany on November 13, 2008. As of October 22, 2009, Lehman
Brothers Bankhaus has not been able to locate any confirmation for
its purchase of the Securities. As a result, Lehman Brothers
Bankhaus has not been able to rule out the possibility that it had
shared voting or investment power over the Securities prior to
2008. Prior to the commencement of insolvency proceedings, Lehman
Brothers Bankhaus may also have shared voting and investment power
with Lehman Brothers Holdings, Inc., of which Lehman Brothers
Bankhaus is a wholly owned subsidiary.
About Lehman Brothers Bankhaus
Lehman Brothers Bankhaus AG filed for Chapter 15 bankruptcy
protection in New York on April 29, 2009 (Bankr. S.D.N.Y. Case No.
09-12704). The petition for Chapter 15 bankruptcy listed more
than US$1 billion each in debts and assets. The report discloses
as of April 1, 457 creditors had filed claims against the German
unit, of which 22 were based in the U.S.
The German affiliate, established in 1987, has branch offices in
South Korea, London and Milan, the report states. The offices in
London and Milan are being wound down as part of the German court
proceedings and the Korean office is subject to a moratorium on
business activities by local banking authorities.
In the Chapter 15 petition, Dr. Michael C. Frege served as
insolvency administrator and foreign representative. Judge James
M. Peck presides over the case. David Farrington Yates, Esq., at
Sonnenschein, Nath & Rosenthal LLP in New York, serves as Chapter
15 Petitioner's Counsel.
About Electronic Sensor Technology
Electronic Sensor Technology Inc. develops and manufactures
electronic devices used for vapor analysis. It markets its
products through distribution channels in more than 20 countries.
As of June 30, 2009, Electronic Sensor Technology had $1,700,751
in total assets and $3,460,983 in total liabilities, resulting in
$1,760,232 stockholders' deficit.
EMCOR GROUP: Moody's Affirms Corporate Family Rating at 'Ba1'
-------------------------------------------------------------
Moody's Investors Service affirmed EMCOR Group, Inc.'s corporate
family rating at Ba1 and senior secured revolving credit
facility's rating at Ba1. The rating outlook was changed to
stable from positive.
The outlook revision reflects that EMCOR is unlikely to be
upgraded in the next 12 to 18 months given the projected
deterioration in the company's end markets, as a large portion of
EMCOR's sales are exposed to the weakening non-residential
construction market. At the same time, the stable outlook
reflects that the company is currently well positioned in its
rating category.
EMCOR's ratings take into consideration the company's conservative
balance sheet, competitive market position, geographic
diversification, and strong credit metrics. As an example, the
company generates healthy free cash flow relative to its debt
balance. For the trailing twelve month period ended June 30, 2009
the company's unadjusted free cash flow to debt was 166%. In
addition, unadjusted EBITDA to interest expense for the same time
period was 42 times.
At the same time, the ratings consider the company's sizable
multiemployer pension plan exposure, large bonding position with
relatively small revolver back-up, and low operating margins. The
company contributed $221 million to its multiemployer pension plan
in 2008. Total imputed debt from the multiemployer pension plan
amounted to $1.15 billion in 2008 (please refer to the special
comment titled "Growing Multiemployer Pension Shortfall is an
Increasing Credit Concern" published in September 2009, on
Moodys.com). As a result, fully adjusted debt to EBITDA increases
to 4 times from an unadjusted 0.5 times for the TTM period ended
June 30, 2009. Also, EMCOR's fully adjusted free cash flow to
debt and EBITDA to interest expense decrease to 17.1% and 8 times,
respectively, for the same time period. (EMCOR's financial
statements are also revised to incorporate Moody's standard
analytical adjustments in addition to the multiemployer pension
plan).
In addition, as of June 30, 2009, EMCOR had approximately
$1.3 billion of surety bonds outstanding to support its projects.
The amount of the company's outstanding surety bonds is a concern
given the small relative size of the company's revolving credit
facility of $375 million. Were the company to lose access to its
bonding, the company's credit quality and financial position could
change significantly over a short period of time as bonding allows
the company to qualify for larger projects that it otherwise could
not bid on. Additionally, the company's operating margins, albeit
nicely improved over the last several years, are low relative to
those of corporate America. Further, Moody's projects the
operating margins to deteriorate in the coming year due to
weakening business conditions.
These ratings/assessments were affected
-- $375 million Senior Secured Revolving Credit Facility, due
2010, affirmed Ba1 (LGD4, 53% vs. LGD3, 46% previously);
-- Corporate family rating, affirmed at Ba1;
-- Probability of Default rating, affirmed at Ba1;
-- Rating outlook changed to stable from positive.
Moody's last rating action for EMCOR Group, Inc., occurred on
February 14, 2008, at which time Moody's assigned a Ba1 rating to
the company's $375 million revolving credit facility due
October 17, 2010.
EMCOR Group, Inc., headquartered in Norwalk, Connecticut, is a
global leader in mechanical and electrical construction, energy
infrastructure, and facilities services. Revenues and net income
for the trailing twelve month period ended June 30, 2009 totaled
approximately $6.2 billion and $191 million, respectively.
ENERGY FUTURE: Amends Exchange Offer, Consent Solicitation Terms
----------------------------------------------------------------
Energy Future Holdings Corp., its direct, wholly owned subsidiary,
Energy Future Intermediate Holding Company LLC, and EFIH's direct,
wholly owned subsidiary, EFIH Finance Inc., on October 23
announced that they are amending certain of the terms of (i) their
previously announced exchange offers to exchange outstanding debt
securities listed in the table below for New Senior Secured Notes
to be issued by EFH Corp. and the EFIH Offerors, and (ii) EFH
Corp.'s previously announced solicitations of consents from
holders of Consent Notes to certain proposed amendments summarized
below, all of which Exchange Offers and Consent Solicitations are
being conducted upon the terms and subject to the conditions set
forth in the prospectus relating to the Exchange Offers and the
Consent Solicitations and the related Consent and Letter of
Transmittal.
The amendments to the Exchange Offers and the Consent
Solicitations announced October 23 include (i) reducing the
Maximum Exchange Amount for the Exchange Offers from $4.0 billion
to $3.0 billion and specifying that any consideration paid in the
Exchange Offers will be payable 45% in New EFH Senior Secured
Notes and 55% in New EFIH Senior Secured Notes, in each case as
described below, (ii) extending the expiration date for the
Exchange Offers to midnight, New York City time, on November 10,
2009, (iii) extending the consent date for the Consent
Solicitations to midnight, New York City time, on November 10,
2009, and (iv) eliminating the Early Tender Date for the Exchange
Offers, such that all Holders whose Old Notes are validly tendered
and not validly withdrawn at the amended Expiration Date and are
accepted by the Offerors will receive the applicable Total
Consideration for such Old Notes.
Except as described herein, the terms of the Exchange Offers and
the Consent Solicitations remain unchanged and Old Notes
previously tendered will remain subject to the Exchange Offers and
the Consent Solicitations unless such Old Notes are withdrawn, and
the related Consents revoked, in accordance with the terms of the
Exchange Offers and Consent Solicitations. Subject to applicable
law, the Offerors reserve the right, but are not obligated, to
commence additional exchange offers to exchange additional debt of
EFH Corp. and its subsidiaries that is not listed in the table
below for New Senior Secured Notes.
As amended, upon the terms and subject to the conditions of the
Exchange Offers, the Offerors will issue and exchange in the
Exchange Offers up to $1.35 billion aggregate principal amount of
9.75% Senior Secured Notes due 2019 of EFH Corp. and up to $1.65
billion aggregate principal amount of 9.75% Senior Secured Notes
due 2019 of the EFIH Offerors. The amended maximum principal
amount of New Senior Secured Notes issuable in the Exchange Offers
is referred to herein as the "Maximum Exchange Amount."
Upon the terms and subject to the conditions of the Exchange
Offers, including the acceptance priority levels described herein,
the Maximum Exchange Amount and the Priority Level 2 Cap and the
possible prorations resulting therefrom, in exchange for each
$1,000 principal amount of Old Notes validly tendered, the
participating holders of Old Notes will be eligible to receive the
applicable total consideration provided in the table below. As
amended, the applicable Total Consideration will be payable 45% in
New EFH Senior Secured Notes and 55% in New EFIH Senior Secured
Notes.
CUSIP/ISIN Outstanding Issuer Title of Acceptance Total
Principal Old Priority Consideration
Amount Notes Level if Tendered
(in millions) at or Prior
to the
Expiration
873168 AL2 / $1,000 EFH Corp. 5.55% 1 $710.00
US873168 AL29 Series P
Notes due 2014
873168 AN8 / $750 EFH Corp. 6.50% 1 $475.00
US873168 AN84 Series Q
873168 AM0 / Senior Notes
US873168 AM02 due 2024
873168 AQ1 / $750 EFH Corp. 6.55% Series R 1 $465.00
US873168 AQ16 Senior Notes
due 2034
292680 AD7 / $2,650 EFH Corp. 11.250%/12.000% 1 $660.00
US292680 AD70 Senior Toggle Notes
due 2017
292680 AC9 / $2,000 EFH Corp. 10.875% 1 $745.00
US292680 AC97 Senior Notes
292680 AA3 / due 2017
US292680 AA32
882330 AF0 / $3,000 Texas Competitive 10.25% 2 $720.00
US882330 AF05 Electric Holdings Senior Notes
U88235 AC7 / Company LLC due 2015
USU88235 AC76 ("TCEH")
TCEH Finance, Inc.
882330 AG8 / $2,000 TCEH 10.25% 2 $720.00
US882330AG87 TCEH Finance, Inc. Senior Notes
US882330AG87 due 2015, Series B
882330 AC7 /
US882330 AC73
The Offerors will not accept any tender of Old Notes that would
result in the issuance of less than $2,000 principal amount of New
EFH Senior Secured Notes or New EFIH Senior Secured Notes to a
participating holder. Furthermore, the aggregate principal amount
of New EFH Senior Secured Notes or New EFIH Senior Secured Notes
issued to each participating holder for all Old Notes validly
tendered will be rounded down, if necessary, to $2,000 or the
nearest whole multiple of $1,000 in excess thereof. The rounded
amount will be the principal amount of New Senior Secured Notes a
participating holder will receive, and no additional cash will be
paid in lieu of any principal amount of New Senior Secured Notes
not received as a result of such rounding down.
The summary below describes certain of the principal terms of the
Exchange Offers and the Consent Solicitations, each as amended by
the Offerors. Certain of the terms and conditions described below
are subject to important limitations and exceptions. For a more
complete understanding of the terms and conditions of the Exchange
Offers and the Consent Solicitations, you should read the amended
preliminary Prospectus and the amended Consent and Letter of
Transmittal that the Offerors filed with the Securities and
Exchange Commission October 23.
1. Terms of the Consent Solicitations
a. The Consent Notes
EFH Corp. is soliciting Consents with respect to:
-- the Indenture, dated as of November 1, 2004, by and between
EFH Corp. and The Bank of New York Mellon, as trustee,
pursuant to which the 5.55% Series P Senior Notes due 2014
were issued;
-- the Indenture, dated as of November 1, 2004, by and between
EFH Corp. and BONYM, as trustee, pursuant to which the 6.50%
Series Q Senior Notes due 2024 were issued;
-- the Indenture, dated as of November 1, 2004, by and between
EFH Corp. and BONYM, as trustee, pursuant to which the 6.55%
Series R Senior Notes due 2034 were issued; and
-- the Indenture, dated as of October 31, 2007, by and among EFH
Corp., the guarantors named therein and The Bank of New York
Mellon Trust Company, N.A., as trustee, pursuant to which the
10.875% Senior Notes due 2017 and the 11.250%/12.000% Senior
Toggle Notes due 2017 were issued, as amended and
supplemented by the first and second supplemental indentures
thereto.
The Legacy Notes and the 2017 Notes are collectively referred to
as the "Consent Notes," and the Legacy Notes Indentures and the
2017 Notes Indenture are collectively referred to as the "Consent
Notes Indentures."
Consent Notes validly tendered pursuant to the Exchange Offers
(and not validly withdrawn) at or prior to the Consent Date will
be deemed to include Consents to the Proposed Amendments. Holders
may not validly tender Consent Notes in the Exchange Offers at or
prior to the Consent Date without delivering the related Consents
in the Consent Solicitations. Likewise, holders of Consent Notes
may not deliver Consents in the Consent Solicitations without
validly tendering their Consent Notes in the Exchange Offers at or
prior to the Consent Date and may only validly revoke Consents by
validly withdrawing the previously tendered related Consent Notes
at or prior to the Consent Date or by revoking their Consents
after the Consent Date and prior to the execution of the
supplemental indentures as to which such Consents relate.
b. Proposed Amendments; Waiver
The Proposed Amendments would eliminate substantially all of the
restrictive covenants and references thereto contained in the
Consent Notes Indentures and the Consent Notes, eliminate certain
events of default, modify covenants regarding mergers and
consolidations, and modify or eliminate certain other provisions,
including the limitation on the incurrence of secured indebtedness
in the Legacy Notes Indentures and the limitation on the
incurrence of indebtedness and liens in the 2017 Notes Indenture,
such that an unlimited amount of secured debt could be issued by
EFH Corp. under the terms of the Consent Notes Indentures, and
certain provisions relating to defeasance contained in the 2017
Notes Indenture and the 2017 Notes which would otherwise prevent a
defeasance without, among other things, delivery of an opinion of
counsel confirming such defeasance does not constitute a taxable
event. In addition to the foregoing, execution and delivery of
the Consent and Letter of Transmittal will constitute an express
waiver by a consenting holder of the Consent Notes with respect to
all claims against the Offerors and certain affiliates of the
Offerors of any breach, default or event of default that may have
arisen under the Consent Notes Indentures.
c. Requisite Consents
In order to be adopted with respect to a particular issue of
Consent Notes, the applicable Proposed Amendments must be
consented to by the holders of at least a majority of the
outstanding aggregate principal amount of such issue of Consent
Notes, each voting as a separate class. However, the holders of
both series of the 2017 Notes will vote together as a single
class, and, as a result, the Proposed Amendments to the 2017 Notes
Indenture must be consented to by the holders of at least a
majority of the outstanding aggregate principal amount of both
series of the 2017 Notes, voting together as a single class. EFH
Corp. will pay cash consideration for Consents as described below.
d. Consent Date
To deliver Consents pursuant to the Consent Solicitations, holders
must validly tender (and not validly withdraw) their Consent
Notes, and thereby deliver Consents related to such Consent Notes,
at or prior to the Consent Date. If the requisite Consents with
respect to an issue of the Consent Notes are received and a
supplemental indenture for such Consent Notes is executed, EFH
Corp. will pay to each holder that validly delivers and does not
validly revoke Consents in respect of such Consent Notes, in
addition to any applicable Total Consideration payable to such
holder pursuant to the Exchange Offers, a cash consent payment of
$2.50 per $1,000 principal amount of such Consent Notes. Consent
payments are not subject to proration. EFH Corp.'s obligation to
make consent payments is not conditioned upon consummation of the
Exchange Offers. However, the Proposed Amendments in any executed
supplemental indenture relating to the Consent Notes that were the
subject of a terminated exchange offer will not become operative
with respect to such issue of Consent Notes.
2. Terms of the Exchange Offers
a. Maximum Exchange Amount and Priority Level 2 Cap
The maximum aggregate principal amount of New Senior Secured Notes
issuable in the Exchange Offers will not exceed $3.0 billion. In
addition, the aggregate principal amount of New Senior Secured
Notes issuable in the Exchange Offers for the Priority 2 Notes
will not exceed $1.5 billion. Subject to applicable law, the
Offerors reserve the right, but are not obligated, to increase or
decrease the Maximum Exchange Amount, the Priority Level 2 Cap
and/or the Acceptance Priority Levels. If a change is made to the
amount of securities offered to be exchanged pursuant to any
Exchange Offer, including any change to the Maximum Exchange
Amount, the Priority Level 2 Cap and/or the Acceptance Priority
Levels, as applicable, such Exchange Offer will remain open for at
least ten business days following the announcement of such change.
b. Acceptance Priority
Upon the terms and subject to the conditions of the Exchange
Offers described in the Prospectus, including the Maximum Exchange
Amount and the Priority Level 2 Cap, Old Notes validly tendered at
or prior to the Expiration Date will be accepted by the Offerors
pursuant to the following Acceptance Priority Levels:
-- First, all validly tendered Old Notes designated in the
table above as having an Acceptance Priority Level of 1 will
be accepted unless doing so would cause the Maximum Exchange
Amount to be exceeded, in which case such Priority 1 Notes
will be accepted on a pro rata basis up to the greatest
aggregate principal amount practicable that does not cause
the Maximum Exchange Amount to be exceeded, and no Priority
2 Notes will be accepted for exchange; and
-- Second, if the aggregate principal amount of Old Notes
validly tendered by holders of Priority 1 Notes would not
cause the Maximum Exchange Amount to be exceeded, all
validly tendered Old Notes designated in the table above as
having an Acceptance Priority Level of 2 will be accepted
unless doing so, when taking into account the accepted
Priority 1 Notes, would cause the Maximum Exchange Amount or
the Priority Level 2 Cap to be exceeded, in which case such
Priority 2 Notes will be accepted on a pro rata basis up to
the greatest aggregate principal amount practicable that,
together with the Priority 1 Notes accepted for exchange,
does not cause the Maximum Exchange Amount or the Priority
Level 2 Cap to be exceeded.
The Offerors reserve the right to change the Acceptance Priority
Levels in the event that the requisite Consents are not received
or for other reasons, subject to applicable law. If a change is
made to the amount of securities offered to be exchanged pursuant
to any Exchange Offer, including any change to the Maximum
Exchange Amount, the Priority Level 2 Cap and/or the Acceptance
Priority Levels, as applicable, such Exchange Offer will remain
open for at least ten business days following the announcement of
such change.
c. Expiration Date; Total Consideration; Accrued Interest
Each of the Exchange Offers will expire at the Expiration Date.
Upon the terms and subject to the conditions of the Exchange
Offers described in the Prospectus, including the Acceptance
Priority Levels, the Maximum Exchange Amount and the Priority
Level 2 Cap and the possible prorations resulting therefrom,
participating holders who validly tender and do not validly
withdraw their Old Notes at or prior to the Expiration Date, and
whose Old Notes are accepted by the Offerors in the Exchange
Offers, will receive the applicable Total Consideration set forth
in the table above under the heading "Total Consideration if
Tendered at or Prior to the Expiration Date" in respect of each
$1,000 principal amount of Old Notes tendered. In addition,
holders who exchange in the Exchange Offers Old Notes in that pay
cash interest will also receive, with respect to any such Old
Cash-Pay Notes accepted for exchange, an amount equal to accrued
and unpaid interest, if any, in cash, from the last applicable
interest payment date to, but not including, the settlement date.
Holders who exchange in the Exchange Offers EFH Corp.'s
11.250%/12.000% Senior Toggle Notes due 2017 will also receive in
the Exchange Offers, with respect to any such Old Toggle Notes
accepted for exchange, in lieu of accrued and unpaid payment-in-
kind interest with respect to such Old Toggle Notes, if any, from
the last applicable interest payment date to, but not including,
the settlement date, additional New Senior Secured Notes paid in
accordance with the applicable Total Consideration listed in the
table above.
3. Important Information Regarding the New Senior Secured Notes
a. Accrued Interest
The New Senior Secured Notes will accrue interest from and
including the settlement date for the Exchange Offers.
b. Guarantees and Security
The New EFH Senior Secured Notes will be guaranteed by Energy
Future Competitive Holdings Company (a subsidiary of EFH Corp. and
the parent of TCEH) on a senior unsecured basis and EFIH (the
parent of Oncor Electric Delivery Holdings Company LLC ("Oncor
Holdings")) on a senior secured basis. EFIH's guarantee of the New
EFH Senior Secured Notes will be secured by EFIH's pledge of all
of the membership interests in Oncor Holdings and the other
investments it owns in Oncor Holdings and its subsidiaries on a
senior basis. The New EFIH Senior Secured Notes will not be
guaranteed. However, the New EFIH Senior Secured Notes will be
secured by the Collateral on a senior basis.
4. Conditions to the Exchange Offers
The Exchange Offers are not conditioned on any minimum principal
amount of Old Notes being tendered or the issuance of a minimum
principal amount of New Senior Secured Notes offered in the
Exchange Offers. However, the Exchange Offers are subject to
certain other conditions, including the conditions that the
Registration Statement, of which the Prospectus forms a part, has
been declared effective by the SEC and that each series of the New
Senior Secured Notes to be issued in the Exchange Offers are
approved for listing on the New York Stock Exchange, subject to
notice of issuance, each as more fully described in the
Prospectus.
Subject to applicable law, EFH Corp. and the EFIH Offerors have
the right to amend any of the Exchange Offers and the Consent
Solicitations at any time and for any reason, and may terminate or
withdraw any of the Exchange Offers and the Consent Solicitations
if any of the conditions to the Exchange Offers are not satisfied
or waived.
5. Additional Information
The Offerors filed a registration statement on Form S-4 relating
to the Exchange Offers and the Consent Solicitations with the SEC
on October 5, 2009. The Registration Statement has not yet become
effective and the New Senior Secured Notes may not be issued, nor
may the Exchange Offers be completed, until such time as the
Registration Statement has been declared effective by the SEC and
is not subject to a stop order or any proceedings for that
purpose.
As of 5:00 p.m., New York City time, on October 22, 2009,
approximately $351 million principal amount of Old Notes had been
validly tendered for exchange in the Exchange Offers and not
withdrawn.
Copies of the amended preliminary Prospectus relating to the
Exchange Offers and the Consent Solicitations and the amended
Consent and Letter of Transmittal will be made available to all
holders of Old Notes free of charge and may be obtained from
Global Bondholder Services Corporation, the Information Agent for
the Exchange Offers, at (866) 387-1500 (U.S. toll free) or (212)
430-3774. Citigroup Global Markets Inc. and Goldman, Sachs & Co.
are acting as the lead dealer managers in connection with the
Exchange Offers and the lead solicitation agents in connection
with the Consent Solicitations, and Banc of America Securities
LLC, Credit Suisse Securities (USA) LLC, J.P. Morgan Securities
Inc., KKR Capital Markets LLC and Morgan Stanley & Co.
Incorporated are also acting as dealer managers and solicitation
agents, in each case, as described in the Prospectus. For
additional information, contact Citigroup Global Markets Inc. at
(800) 558-3745 (U.S. toll free) or (212) 723-6106 (collect) or
Goldman, Sachs & Co. at (800) 828-3182 (U.S. toll free) or (212)
357-4692 (collect). The Prospectus and the Consent and Letter of
Transmittal are also available free of charge at the SEC's website
at www.sec.gov
About Energy Future
Energy Future Holdings Corp. is a diversified energy holding
company with a portfolio of competitive and regulated energy
businesses in Texas. Oncor, an 80%-owned entity within the EFH
group, is the largest regulated transmission and distribution
utility in Texas. The company delivers electricity to
approximately three million delivery points in and around Dallas-
Fort Worth.
* * *
In October 2009, Moody's Investors Service downgraded the
probability of default rating for Energy Future to 'Ca' from
'Caa1' and affirmed the 'Caa1' corporate family rating following a
recent debt exchange which Moody's believes was a distressed
exchange. Fitch Ratings has affirmed an issuer default rating of
'B', with negative outlook, for Energy Future
ENTEROMEDICS INC: Receives NASDAQ Listing Deficiency Notice
-----------------------------------------------------------
EnteroMedics Inc. reported financial results for the three and
nine months ended September 30, 2009.
For the three months ended September 30, 2009, the Company
reported a net loss of $12.0 million, or $0.40 per share,
including non-cash expense of $3.8 million related to the
revaluation of warrant liability, research and development
expenses of $4.6 million, and general and administrative expenses
of $2.7 million. For the nine months ended September 30, 2009,
the Company reported a net loss of $29.0 million, or $1.06 per
share. Operating expenses were primarily associated with the cost
of supporting the Company's clinical trials and the development of
VBLOC(R) vagal blocking therapy delivered through the Company's
Maestro(R) System. On September 30, 2009, the Company's cash,
cash equivalents and short-term investments totaled $27.1 million,
which does not reflect the proceeds of its October 2, 2009
agreement with an institutional investor to raise $4.9 million in
a registered direct offering of its common stock.
"We expect to complete our evaluation of the one year data from
the EMPOWER trial during the fourth quarter. This process will
help us determine the Company's plans for VBLOC Therapy," said
President and CEO Mark B. Knudson, Ph.D. "We remain fully
committed to the support of the patients and health care
professionals involved in our ongoing clinical studies."
"Our cash position gives us operating flexibility well into 2010,"
stated Gregory S. Lea, Senior Vice President and Chief Financial
Officer of EnteroMedics. "We are focused on effectively managing
our expenses while we finalize our next steps with the Maestro
System."
NASDAQ Notice of Deficiency
EnteroMedics also announced October 23 that on October 19, 2009 it
received a Nasdaq Staff Deficiency Letter indicating that, for ten
consecutive business days, the Company's common stock did not
maintain the minimum Market Value of Listed Securities (MVLS) of
$50,000,000 as required by Listing Rule 5450(b)(2)(A). The
Company has been provided 90 calendar days, or until January 19,
2010, to regain listing compliance, which can be achieved if the
Company's MVLS closes at $50,000,000 or more for a minimum of ten
consecutive business days during this time. The Company will
continue to be listed on the NASDAQ Global Market during this
period.
In the event the Company does not regain compliance prior to
expiration of the 90 days, it will receive written notification
that its securities are subject to delisting. The Company may, at
that time, appeal the Staff's determination to a Hearings Panel.
Such an appeal, if granted, would stay delisting until a Panel
ruling. Alternatively, the Company may choose to apply for
transfer to the Nasdaq Capital Market, provided it satisfies the
requirements for continued listing on that market. There can be
no assurance that the Company will be able to reestablish or
maintain compliance with listing criteria on either Nasdaq market
or that an appeal, if taken, would be successful.
About EnteroMedics Inc.
EnteroMedics -- http://www.enteromedics.com/-- is a development
stage medical device company focused on the design and development
of devices that use neuroblocking technology to treat obesity and
other gastrointestinal disorders. EnteroMedics' proprietary
neuroblocking technology, VBLOC(R) vagal blocking therapy, is
designed to intermittently block the vagus nerves using high-
frequency, low-energy, electrical impulses. EnteroMedics is
currently recruiting patients outside of the United States for a
feasibility study examining VBLOC Therapy's effects on blood
glucose levels in diabetic patients.
ENVIRONMENTAL TECTONICS: Earns $1,249,000 in Fiscal Second Quarter
------------------------------------------------------------------
Environmental Tectonics Corporation reported net income of
$1,249,000 during the second quarter ended August 28, 2009,
compared to a net loss of $1,593,000 for the second quarter of
fiscal 2009. The Company attributed the improvement in net income
to a significant increase in gross profit on an increase in sales
and favorable product mix coupled with lower research and
development and interest expenses. Acting as partial offsets were
higher selling, general and administrative expenses and a loss on
extinguishment of debt relating to a non-cash charge associated
with a refinancing transaction which occurred in July 2009.
Sales for the second quarter of fiscal 2010 were $9,860,000 as
compared to $8,724,000 for the second quarter of fiscal 2009, an
increase of $1,136,000 or 13.0%. Significant increases
were realized in the U.S. Government and International areas which
were partially offset by a decline in domestic sales.
Domestic sales in the second quarter of fiscal 2010 were
$2,877,000 as compared to $4,322,000 in the second quarter of
fiscal 2009, a decrease of $1,445,000 or 33.4%, reflecting
significant decreases in all product lines except sterilizers and
entertainment. Domestic sales represented 29.2% of the Company's
total sales in the second quarter of fiscal 2010, as compared to
49.5% for the second quarter of fiscal 2009.
U.S. Government sales in the second quarter of fiscal 2010 were
$1,676,000 as compared to $386,000 in the second quarter of fiscal
2009, an increase of $1,290,000, or 334.2%, and represented 17.0%
of total sales in the second quarter of fiscal 2010 versus 4.4%
for the second quarter of fiscal 2009. Significant increases were
evidenced in aircrew training systems sales primarily due to a
large U.S. Navy disorientation device contract and environmental
sales on a chamber contract with the U.S. Army.
International sales, which includes sales in the Company's Polish
subsidiary, for the second quarter of fiscal 2010 were $5,307,000
as compared to $4,016,000 in the second quarter of fiscal 2009, an
increase of $1,291,000 or 32.1%, and represented 53.8% of total
sales, as compared to 46.1% in the second quarter of fiscal 2009.
The favorable international performance reflected higher
simulation sales (up $1,437,000), and higher aircrew training
systems sales (up $323,000, 15.4%), both primarily for contracts
in the Middle East.
Gross profit for the second quarter of fiscal 2010 was $4,956,000
as compared to $2,042,000 in the second quarter of fiscal 2009, an
increase of $2,914,000 or 142.7%. Gross profit as a percentage of
sales was 50.3% for the second quarter of fiscal 2010, compared to
23.4% for the prior period.
Selling and administrative expenses for the second quarter of
fiscal 2010 were $2,838,000 as compared to $2,755,000 in the
second quarter of fiscal 2009, an increase of $83,000 or 3.0%.
The increase reflected increased commissions on the higher sales
level and the mix of contracts.
Research and development expenses were $227,000 for the second
quarter of fiscal 2010 as compared to $404,000 for the second
quarter of fiscal 2009. The reduction reflected a difference in
government grants in the Company's Turkish subsidiary between the
two periods.
Interest expense for the second quarter of fiscal 2010 was
$350,000 as compared to $434,000 for the second quarter of fiscal
2009, representing a decrease of $84,000 or 19.4%. The decrease
reflected the impact of the exchange of subordinated debt for
preferred stock under the Lenfest Financing Transaction.
Other income/expense, net, was a net expense of $66,000 for the
second quarter of fiscal 2010 versus a net expense of $50,000 for
the second quarter of fiscal 2009.
The Company recorded a loss on extinguishment of debt of $224,000
related to the Lenfest Financing Transaction.
Due to the utilization of net operating loss carry forwards
available (which were approximately $39.8 million as of
February 27, 2009) the Company has not recorded a current income
tax provision.
First Half of Fiscal 2010
The Company had a net income of $2,019,000 during the first half
of fiscal 2010 compared to a net loss of $3,082,000 for the first
half of fiscal 2009, representing an improvement of $5,101,000, or
165.5% in net income.
Sales for the first half of fiscal 2010 were $19,441,000 as
compared to $18,699,000 for the first half of fiscal 2009, an
increase of $742,000 or 4.0%. Significant increases were realized
in the U.S. Government and International areas which were
partially offset by a decline in domestic sales.
William F. Mitchell, ETC's president and chairman, stated, "This
financial report reflects the significant impact of the
refinancing with H.F. 'Gerry' Lenfest which was approved at our
stockholders meeting on July 2, 2009. This transaction
transformed ETC into a Company with positive equity, increased our
bank facility by $5 million, and provided access through Gerry for
an additional $7.5 million to finance some of our existing and
potential large U.S. Government contracts. Gerry has been a long
time supporter, investor and valued member of our Board of
Directors and we all here at ETC wholeheartedly thank him for his
support.
"The operating results for the quarter and this fiscal
year-to-date are very encouraging. Both our sales performance and
gross margins are up from the prior period. This is remarkable
given the general state of the global and domestic economies and
the budget constraints of most of the world's defense agencies.
"In my opinion, our performance reflects our almost obsessive
focus on technology, quality and customer service. I feel there
will always be a receptive market for 'best of the breed' products
and applications."
Balance Sheets
At August 28, 2009, the Company's consolidated sheets showed
$36,633,000 in total assets, $22,531,000 in total liabilities, and
$14,102,000 in total shareholders' equity.
A full-text copy of the Company's consolidated financial
statements for the three and six months ended August 28, 2009, is
available for free at http://researcharchives.com/t/s?4763
Liquidity and Capital Resources
The Company has historically financed operations through a
combination of cash generated from operations, equity offerings,
subordinated borrowings and bank debt.
On April 24, 2009, the Company entered into the Lenfest Financing
Transaction with Lenfest that provided for the following: (i) a
$7,500,000 credit facility provided by Lenfest to ETC; (ii)
exchange of the Subordinated Note held by Lenfest, together with
all accrued interest and warrants issuable under the Subordinated
Note, and all Series B and Series C Preferred Stock held by
Lenfest, together with all accrued dividends thereon, for a new
class of preferred stock, Series E Preferred Stock, of the
Company; and (iii) the guarantee by Lenfest of all of ETC's
obligations to PNC Bank, National Association in connection with
an increase of the Company's existing $15,000,000 revolving line
of credit with PNC Bank to $20,000,000, and in connection with
this guarantee, the pledge by Lenfest to PNC Bank of $10,000,000
in marketable securities. The Company says that this additional
capital will enable the Company to continue to bid on, and
potentially win, a number of significant U.S. and foreign
government during fiscal 2010 as well as to continue to operate
its business.
On July 2, 2009, the Company held its 2009 annual meeting of
shareholders, at which time the Company obtained shareholder
approval for the Lenfest Financing Transaction.
During the twenty-six weeks ended August 28, 2009, operating
activities generated $537,000 of cash versus $291,000 for the
corresponding prior period. This improvement primarily reflected
an approximate $5.1 million improvement in net income and
increased customer receivable collections as compared to the
corresponding prior period. Partial offsets were an almost equal
usage of cash totaling approximately $5.2 million in the two
balance sheet accounts associated with percentage of completion
accounting for the Company's long term contracts, namely the asset
account of costs and estimated earnings (resulting from revenue
recognition without associated billing) and the liability account
of billings in excess of costs (resulting from billing in advance
of revenue recognition), and customer deposits.
The Company's investing activities required $874,000 during the
twenty-six weeks ended August 28, 2009, down from $1,191,000 for
the prior period.
The Company's financing activities generated $684,000 during the
twenty-six weeks ended August 28, 2009, primarily reflecting
borrowing under the Company's line of credit.
The Company believes that existing cash balances at August 28,
2009, cash generated from operating activities, and funding under
the Lenfest Financing Transaction will be adequate to meet the
Company's future obligations through at least August 28, 2010.
Southampton, Pennsylvania-based Environmental Tectonics
Corporation (OTC BB: ETCC) -- http://www.etcusa.com/-- designs,
manufactures and sells Training Services (TSG) which includes (1)
software driven products and services used to create and monitor
the physiological effects of flight; (2) high performance jet
tactical flight simulation, and; (3) driving and disaster
simulation systems, and Control Systems (CSG) which includes: (1)
steam and gas sterilization; (2) testing and simulation devices
for the automotive industry, and; (3) hyperbaric and hypobaric
chambers. Product categories included in TSG are Aircrew Training
Systems (ATS) and flight simulators, disaster management systems
and entertainment applications. CSG includes sterilizers,
environmental control devices and hyperbaric chambers along with
parts and service support.
The Company's consolidated balance sheets at May 29, 2009, showed
total assets of $35,538,000 and total liabilities of $37,486,000,
resulting in a stockholders' deficit of $11,292,000.
This concludes the Troubled Company Reporter's coverage of
Environmental Tectonics Corporation until facts and circumstances,
if any, emerge that demonstrate financial or operational strain or
difficulty at a level sufficient to warrant renewed
coverage.
EQUIPMENT ACQUISITION RESOURCES: Voluntary Chapter 11 Case Summary
------------------------------------------------------------------
Debtor: Equipment Acquisition Resources, Inc.
555 South Vermont
Palatine, IL 60067
Case No.: 09-39937
Chapter 11 Petition Date: October 23, 2009
Court: United States Bankruptcy Court
Northern District of Illinois (Chicago)
Judge: John H. Squires
Debtor's Counsel: Barry A. Chatz, Esq.
Arnstein & Lehr LLP
120 South Riverside Plaza, Suite 1200
Chicago, IL 60606
Tel: (312) 876-7100
Email: bachatz@arnstein.com
Estimated Assets: $10,000,001 to $50,000,000
Estimated Debts: $100,000,001 to $500,000,000
The Debtor did not file a list of its 20 largest unsecured
creditors when it filed its petition.
ERICKSON RETIREMENT: Proposes DLA Piper as Counsel
--------------------------------------------------
Erickson Retirement Communities LLC and its affiliates seek the
Court's authority to employ DLA Piper LLP as their counsel, nunc
pro tunc to the Petition Date.
As the Debtors' counsel, DLA Piper will:
(a) advise the Debtors with respect to their rights, powers
and duties as debtors and debtors-in-possession in the
continued management and operation of their businesses and
assets;
(b) attend meetings and negotiating with representatives of
creditors and other parties-in-interest, and advise and
consult on the conduct of cases, including all of the
legal and administrative requirements of operating in
Chapter 11;
(c) take all necessary action to protect and preserve the
Debtors' estates, including prosecution of actions on the
Debtors' behalf, the defense of any actions commenced
against the Debtors' estates, negotiations concerning
litigation in which the Debtors may be involved and
objections to claims filed against the Debtors' estates;
(d) prepare, on behalf of the Debtors, motions, applications,
answers, orders, reports, and papers necessary to the
administration of the Debtors' estates;
(e) prepare and negotiate on the Debtors' behalf plan of
reorganization, disclosure statement, and all related
agreements or documents and take any necessary action on
behalf of the Debtors to obtain confirmation of that plan;
(f) advise the Debtors in connection with the sale of their
assets and take all steps necessary to maximize the
value of the Debtors' assets for the benefit of creditors;
(g) perform other necessary legal services and provide other
necessary legal advice to the Debtors in connection with
these Chapter 11 cases; and
(h) appear before the Court, any appellate courts, and the
United States Trustee for Region 6, and protect the
interests of the Debtors' estates before those courts and
the United States Trustee.
The Debtors will pay DLA Piper's professionals according to their
customary hourly rates:
Professional Rate per Hour
------------ -------------
Thomas Califano $835
Jeremy Johnson $695
Kristin Rosella $475
Camisha Simmons $475
Jason Karaffa $475
William Currie $370
William Coleman $290
The Debtors will also reimburse DLA Piper for reasonable expenses
incurred. DLA Piper will apply for fees payment and expenses
reimbursement pursuant to Sections 330 and 331 of the Bankruptcy
Code and the local rules of the Court.
The Debtors disclose that DLA Piper was retained on March 9, 2009,
to advise them with respect to their refinancing and restructuring
options, including the preparation of the filing of these Chapter
11 cases. In connection with that engagement, the Debtors paid
DLA Piper $4,239,758 for prepetition services. DLA Piper has also
kept an estimated $529,905 to be held as a retainer for
professional fees and expenses expected to be incurred by the firm
in its representation of the Debtors.
Thomas R. Califano, Esq., a partner at DLA Piper, relates that his
firm represented or may represent these parties in matters
unrelated to the Debtors' Chapter 11 cases, a schedule of which is
available for free at:
http://bankrupt.com/misc/Erickson_DLAClientsList.pdf
Despite that disclosure, Mr. Califano maintains that DLA Piper
does not hold or represent any interest materially adverse
to the Debtors' estates. He assures the Court that DLA Piper is a
"disinterested person" as the term is defined under Section
101(14) of the Bankruptcy Code.
About Erickson Retirement
The Baltimore, Maryland-based Erickson Retirement Communities LLC
owns 20 continuing care retirement communities in 11 states.
Among Erickson's 20 communities, eight are completed, 11 are open
although in construction, and one is in development. They have
23,000 residents in total.
Erickson, along with affiliates, filed for Chapter 11 on Oct. 19,
2009 (Bankr. N.D. Tex. Case No. 09-37010). DLA Piper LLP (US)
serves as counsel to the Debtors. BMC Group Inc. serves as claims
and notice agent. Houlihan, Lokey, Howard & Zoukin, Inc., is also
serving as investment and financial consultant. Alvarez & Marsal
is serving as restructuring adviser.
As of September 30, 2009, on a book value basis, ERC had
approximately $2.7 billion in assets, including $2.2 billion of
property and equipment, and $3.0 billion in liabilities.
Liabilities include $195.8 million on the revolving credit,
$347.5 million on construction credit, $64 million in accounts
payable, $47.8 million in subordinate debt, and $475 million in
purchase option deposits.
Bankruptcy Creditors' Service, Inc., publishes Erickson Retirement
Bankruptcy News. The newsletter tracks the Chapter 11 proceedings
of Erickson Retirement Communities LLC and its units.
(http://bankrupt.com/newsstand/or 215/945-7000)
ERICKSON RETIREMENT: Hickory Chase-Related Action Unclear
---------------------------------------------------------
Erickson Retirement Communities LLC previously halted the
construction and development of the 83-acre Hickory Chase
retirement community in Hilliard, Ohio, earlier this year. ERC,
as developer of the Hickory Chase project, told Hilliard officials
in June 2009 that it was closing its sales office for the project.
The Hickory Chase project was indefinitely put on hold.
A group of six banks led by KeyBank commenced a foreclosure action
on July 2, 2009, to take control of the Hickory Chase project from
ERC, Business First of Columbus related. The Bank Plaintiffs
alleged that ERC defaulted on a $90 million construction loan and
thus, wanted to get hold of the Project for transfer to another
developer.
ERC has filed for bankruptcy protection on October 19, 2009.
Business of First Columbus noted that the status of the KeyBank-
led Foreclosure Action is not clear in light of ERC's Chapter 11
filing.
About Erickson Retirement
The Baltimore, Maryland-based Erickson Retirement Communities LLC
owns 20 continuing care retirement communities in 11 states.
Among Erickson's 20 communities, eight are completed, 11 are open
although in construction, and one is in development. They have
23,000 residents in total.
Erickson, along with affiliates, filed for Chapter 11 on Oct. 19,
2009 (Bankr. N.D. Tex. Case No. 09-37010). DLA Piper LLP (US)
serves as counsel to the Debtors. BMC Group Inc. serves as claims
and notice agent. Houlihan, Lokey, Howard & Zoukin, Inc., is also
serving as investment and financial consultant. Alvarez & Marsal
is serving as restructuring adviser.
As of September 30, 2009, on a book value basis, ERC had
approximately $2.7 billion in assets, including $2.2 billion of
property and equipment, and $3.0 billion in liabilities.
Liabilities include $195.8 million on the revolving credit,
$347.5 million on construction credit, $64 million in accounts
payable, $47.8 million in subordinate debt, and $475 million in
purchase option deposits.
Bankruptcy Creditors' Service, Inc., publishes Erickson Retirement
Bankruptcy News. The newsletter tracks the Chapter 11 proceedings
of Erickson Retirement Communities LLC and its units.
(http://bankrupt.com/newsstand/or 215/945-7000)
ERICKSON RETIREMENT: Proposes to Pay Prepetition Employees
----------------------------------------------------------
Erickson Retirement Communities LLC and its units ask the Court
for authority to pay certain prepetition claims, honor obligations
and continue programs in the ordinary course of business related
to employee and independent contractor compensation, payroll
administration, wage deductions, government withholdings and
payroll taxes, reimbursable expenses, and employee benefit
programs.
The Debtors have over 794 employees in the aggregate -- 65 full-
time hourly paid employees, 6 temporary employees, and 723 full-
time salaried employees. None of the Employees are subject to a
collective bargaining agreement.
Vincent P. Slusher, Esq., at DLA Piper LLP, in Dallas, Texas,
assert that the Employees are vital to the Debtors' ability to
accomplish their strategic goals and objectives and carry out
their daily business operations. The skills and specialized
knowledge of the Employees, he adds, are also essential to the
Debtors' ability to successfully reorganize.
In this light, the Debtors seek to honor their prepetition
obligations to the Employees as payment of those obligations is
essential to the morale of the Employees and the Debtors' future
business needs.
The Debtors estimate that in the aggregate, about $2.3 million in
unpaid salary, wages and other compensation is owing to the
Employees as of the next pay date of October 23, 2009.
The Employee Prepetition Obligations include:
* Payroll Obligations. About $2,290,000 in wages and other
compensation are owed as of the next pay date, Oct. 23,
2009. The Debtors believe that 6 Employees will be owed
more than the $10,950 priority limit on account of
prepetition salaries under Section 507(a)(4) of the
Bankruptcy Code. The Debtors seek that those Employees be
paid in full.
* Reimbursable Business Expenses. These include expenses for
business travel. As of the Petition Date, the Debtors
estimate owing $6,000 with respect to these types of
business expenses.
* Employee Benefits. These include health insurance; life,
AD&D, long term disability insurance; and a 401K Plan. The
Debtors pay approximately $45,000 per month on the life
insurance premiums and approximately $772,000 per month on
medical insurance premiums. They also believe that their
pending 401K contributions for the payroll period ending
October 16, 2009 total $400,000.
* Workers' Compensation. The Debtors maintain premium-based
workers' compensation insurance plan, with combined premiums
of about $49,000 monthly.
* Payroll Taxes. The Debtors seek to pay and remit to
applicable Taxing Authorities up to $1.7 million in payroll
taxes attributable to the Period before the Petition Date.
* Paid Vacation. The Debtors estimate that accrued,
outstanding amount of unused time under the "Personal Time
Off" Policy, if it were payable in cash, is about
$3.4 million as of the Petition Date.
* Administrative Service Providers. The average monthly cost
of the Debtors with respect to third party providers that
administer employee benefit plans and payroll services is
approximately $208,000.
* Miscellaneous Employee-Related Obligations. The Debtors
also seek authority to pay de minimis prepetition
obligations up to an aggregate of $25,000 on five business
days' prior written notice to counsel to any statutory
creditors' committee appointed in the Debtors' cases,
counsel to their prepetition secured lenders and the Office
of the U.S. Trustee setting forth the nature and amount of
the additional obligation sought to be paid.
* * *
Judge Jernigan grants the Debtors' request. The Debtors are thus
permitted to pay their Prepetition Obligations.
Banks and financial institutions at which the Debtors maintain
accounts relating to payroll are also directed by the Court to
honor all checks, drafts or payment request without regard to the
date of issue of those checks, drafts or payment requests.
About Erickson Retirement
The Baltimore, Maryland-based Erickson Retirement Communities LLC
owns 20 continuing care retirement communities in 11 states.
Among Erickson's 20 communities, eight are completed, 11 are open
although in construction, and one is in development. They have
23,000 residents in total.
Erickson, along with affiliates, filed for Chapter 11 on Oct. 19,
2009 (Bankr. N.D. Tex. Case No. 09-37010). DLA Piper LLP (US)
serves as counsel to the Debtors. BMC Group Inc. serves as claims
and notice agent. Houlihan, Lokey, Howard & Zoukin, Inc., is also
serving as investment and financial consultant. Alvarez & Marsal
is serving as restructuring adviser.
As of September 30, 2009, on a book value basis, ERC had
approximately $2.7 billion in assets, including $2.2 billion of
property and equipment, and $3.0 billion in liabilities.
Liabilities include $195.8 million on the revolving credit,
$347.5 million on construction credit, $64 million in accounts
payable, $47.8 million in subordinate debt, and $475 million in
purchase option deposits.
Bankruptcy Creditors' Service, Inc., publishes Erickson Retirement
Bankruptcy News. The newsletter tracks the Chapter 11 proceedings
of Erickson Retirement Communities LLC and its debtor-affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
EXTENDED STAY: Cerberus Objects to Probe on Lichtenstein
--------------------------------------------------------
In a joint objection filed in Court, Cerberus Capital Management
L.P. and Centerbridge Partners L.P. ask Judge Peck to deny
approval of the investigation proposed by the Official Committee
of Unsecured Creditors.
To recall, the Creditors Committee proposed to investigate
Lightstone Group LLC Chairman David Lichtenstein and several
others, including the advisers of the two companies, in
connection with their agreements regarding the restructuring of
Extended Stay Inc. and its debtor affiliates. The Committee
wants to investigate in particular the alleged promises of
Cerberus and Centerbridge to indemnify Mr. Lichtenstein against
$100 million in liabilities and provide another $5 million to
fight claims that might be asserted by junior lenders.
Mr. Lichtenstein was accused of being induced by lenders to put
the Debtors in bankruptcy to push junior loan holders out of the
money in return for the indemnification and the $5 million claims
defense budget.
Howard Godnick, Esq., at Schulte Roth & Zabel LLP, in New York,
argues that the Committee's application failed to set forth any
justification or good cause in support of the investigation.
"[The application] is silent as to the scope of documents
requested and why examinations and production of documents at
this time are important to the reorganization of the Debtors or
for any other purpose," he points out.
Mr. Godnick says the Committee's request is also premature since
the Debtors have not yet proposed a Chapter 11 plan.
"The Committee seeks discovery of the prepetition communications
between the objecting parties and the Debtors concerning the
restructuring term sheet that accompanied the Debtors' first day
filings," Mr. Godnick he says, pointing out that investigation
into plan matters is not ripe and will result in a waste of the
Debtors' assets.
About Extended Stay
Extended Stay is the largest owner and operator of mid-price
extended stay hotels in the United States, holding one of the most
geographically diverse portfolios in the lodging sector with
properties located across 44 states (including 11 hotels located
in New York) and two provinces in Canada. As a result of
acquisitions and mergers, Extended Stay's portfolio has expanded
to encompass over 680 properties, consisting of hotels directly
owned or leased by Extended Stay or one of its affiliates.
Extended Stay currently operates five hotel brands: (i) Crossland
Economy Studios, (ii) Extended Stay America, (iii) Extended Stay
Deluxe, (iv) Homestead Studio Suites, and (v) StudioPLUS Deluxe
Studios.
For the year ending December 31, 2008, Extended Stay's audited
financial statements show consolidated assets (including nondebtor
affiliates) totaling approximately $7.1 billion and consolidated
liabilities totaling approximately $7.6 billion. Consolidated
revenues for the 12 months ending December 31, 2008 were
approximately $1 billion.
Extended Stay Inc. and its affiliates filed for Chapter 11 on
June 15, 2009 (Bankr. S.D.N.Y. Case No. 09-13764). Judge James M.
Peck handles the case. Marcia L. Goldstein, Esq., at Weil Gotshal
& Manges LLP, in New York, represents the Debtors. Lazard Freres
& Co. LLC is the Debtors' financial advisors. Kurtzman Carson
Consultants LLC is the claims agent.
Bankruptcy Creditors' Service, Inc., publishes Extended Stay
Bankruptcy News. The newsletter provides gavel-to-gavel coverage
of the Chapter 11 proceedings undertaken by Extended Stay Inc. and
its various affiliates. (http://bankrupt.com/newsstand/or
215/945-7000).
EXTENDED STAY: Examiner Proposes A&M as Financial Advisor
---------------------------------------------------------
Ralph Mabey, the Court-appointed examiner in the Debtors' Chapter
11 cases, intends to employ Alvarez & Marsal Dispute Analysis &
Forensic Services LLC as his financial adviser.
In court papers, Mr. Mabey seeks the Court's permission to hire
A&M in connection with his investigation into the transactions
that allegedly resulted in the Debtors' bankruptcy filing.
Mr. Mabey asserts that the matters into which he has been charged
to investigate require the engagement of a firm with broad
experience in the analysis of complex financial transactions.
He believes that A&M is exceptionally well qualified for the
tasks on hand because of the firm's experience in providing that
type of investigatory and analytical services.
As financial adviser, A&M will be tasked to:
(1) assist the examiner and his counsel in an investigation
into the financial circumstances of the Debtors and
other parties for the period preceding to the bankruptcy;
(2) assist the examiner and his counsel in an investigation of
the structure, negotiation and closing of the acquisition
of the Debtors from Blackstone Group;
(3) provide forensic technology services as required to
support the investigation; and
(4) assist the examiner by providing other services as may be
agreed to by A&M and the examiner and if appropriate,
approved by the Bankruptcy Court.
Laureen Ryan, managing director of A&M, will be responsible for
the overall engagement of the firm, according to Mr. Mabey.
A&M's professionals will be paid for their services on an hourly
basis at these rates:
Professional Hourly Rate
------------ -----------
Managing Directors $575 - $850
Senior Directors/Directors $375 - $575
Managers/Associates $300 - $375
Analysts $225 - $300
The firm will also be reimbursed of its necessary expenses
incurred in connection with its employment.
Ms. Ryan assures the Court that A&M does not have interests
adverse to the interest of the Debtors' estates or of any class
of creditors and equity security holders. She maintains that his
firm is a disinterested person as the term is defined under
Section 101(14) of the Bankruptcy Code.
About Extended Stay
Extended Stay is the largest owner and operator of mid-price
extended stay hotels in the United States, holding one of the most
geographically diverse portfolios in the lodging sector with
properties located across 44 states (including 11 hotels located
in New York) and two provinces in Canada. As a result of
acquisitions and mergers, Extended Stay's portfolio has expanded
to encompass over 680 properties, consisting of hotels directly
owned or leased by Extended Stay or one of its affiliates.
Extended Stay currently operates five hotel brands: (i) Crossland
Economy Studios, (ii) Extended Stay America, (iii) Extended Stay
Deluxe, (iv) Homestead Studio Suites, and (v) StudioPLUS Deluxe
Studios.
For the year ending December 31, 2008, Extended Stay's audited
financial statements show consolidated assets (including nondebtor
affiliates) totaling approximately $7.1 billion and consolidated
liabilities totaling approximately $7.6 billion. Consolidated
revenues for the 12 months ending December 31, 2008 were
approximately $1 billion.
Extended Stay Inc. and its affiliates filed for Chapter 11 on
June 15, 2009 (Bankr. S.D.N.Y. Case No. 09-13764). Judge James M.
Peck handles the case. Marcia L. Goldstein, Esq., at Weil Gotshal
& Manges LLP, in New York, represents the Debtors. Lazard Freres
& Co. LLC is the Debtors' financial advisors. Kurtzman Carson
Consultants LLC is the claims agent.
Bankruptcy Creditors' Service, Inc., publishes Extended Stay
Bankruptcy News. The newsletter provides gavel-to-gavel coverage
of the Chapter 11 proceedings undertaken by Extended Stay Inc. and
its various affiliates. (http://bankrupt.com/newsstand/or
215/945-7000).
EXTENDED STAY: Examiner Proposes Stutman as Counsel
---------------------------------------------------
Ralph Mabey, the Court-appointed examiner in the Debtors' Chapter
11 cases, seeks permission from the U.S. Bankruptcy Court for the
Southern District of New York to employ Stutman Treister & Glatt
Professional Corporation as his counsel.
Mr. Mabey seeks to tap Stutman Treister to assist him in his
investigation of the transactions that allegedly resulted in the
Debtors' bankruptcy filing. As counsel, Stutman will be tasked
to:
(1) assist in the investigation and the discharge of the
examiner's duties and responsibilities, including the
pursuit of discovery as the examiner deems prudent within
the scope of the investigation;
(2) prepare legal papers at the direction and with the
participation of the examiner;
(3) represent the examiner at all hearings and other
proceedings before the Bankruptcy Court, any appellate
courts, and the United States Trustee, and advocate and
protect the interests of the examiner before those courts;
(4) analyze and advise the examiner regarding any legal issues
that arise in connection with the investigation;
(5) perform all other necessary legal services on behalf of
the examiner in connection with the Debtors' cases; and
(6) assist the examiner in undertaking additional tasks that
the Bankruptcy Court may direct.
In return for Stutman's services, the Debtors agree to pay $250
to $895 per hour to the firm's attorneys, $240 per hour to
paralegals, and $220 to $240 per hour to law clerks. The Stutman
professionals who will be providing services to the examiner and
their hourly rates are:
Professional Hourly Rate
------------ -----------
Robert Greenfield $895
Stephan Ray $775
George Webster II $775
Eric Goldberg $675
Margreta Morgulas $495
H. Alexander Fisch $440
Avi Muhtar $250
Stutman will also be reimbursed of its reasonable and necessary
expenses it incurred or will incur in connection with its
employment.
In a declaration to the Court, H. Alexander Fisch, Esq., a
shareholder of Stutman, reiterates that Mr. Mabey's prior
statement that the Firm does not hold or represent interest
adverse to Debtors' estates, and is a "disinterested person"
under Section 101(14) of the Bankruptcy Code.
About Extended Stay
Extended Stay is the largest owner and operator of mid-price
extended stay hotels in the United States, holding one of the most
geographically diverse portfolios in the lodging sector with
properties located across 44 states (including 11 hotels located
in New York) and two provinces in Canada. As a result of
acquisitions and mergers, Extended Stay's portfolio has expanded
to encompass over 680 properties, consisting of hotels directly
owned or leased by Extended Stay or one of its affiliates.
Extended Stay currently operates five hotel brands: (i) Crossland
Economy Studios, (ii) Extended Stay America, (iii) Extended Stay
Deluxe, (iv) Homestead Studio Suites, and (v) StudioPLUS Deluxe
Studios.
For the year ending December 31, 2008, Extended Stay's audited
financial statements show consolidated assets (including nondebtor
affiliates) totaling approximately $7.1 billion and consolidated
liabilities totaling approximately $7.6 billion. Consolidated
revenues for the 12 months ending December 31, 2008 were
approximately $1 billion.
Extended Stay Inc. and its affiliates filed for Chapter 11 on
June 15, 2009 (Bankr. S.D.N.Y. Case No. 09-13764). Judge James M.
Peck handles the case. Marcia L. Goldstein, Esq., at Weil Gotshal
& Manges LLP, in New York, represents the Debtors. Lazard Freres
& Co. LLC is the Debtors' financial advisors. Kurtzman Carson
Consultants LLC is the claims agent.
Bankruptcy Creditors' Service, Inc., publishes Extended Stay
Bankruptcy News. The newsletter provides gavel-to-gavel coverage
of the Chapter 11 proceedings undertaken by Extended Stay Inc. and
its various affiliates. (http://bankrupt.com/newsstand/or
215/945-7000).
FAIRPOINT COMMS: Files for Chapter 11 to Slash Debt by $1.7-Bil.
----------------------------------------------------------------
FairPoint Communications, Inc. announced October 26 it has reached
agreement on a comprehensive financial restructuring plan with
lenders holding more than 50% of the outstanding debt under its
secured credit facility. The Restructuring Plan is expected to
reduce the Company's debt by $1.7 billion thereby providing a
long-term solution for the Company's balance sheet.
To facilitate the implementation of the Restructuring Plan, the
Company also announced that it and all of its subsidiaries have
filed voluntary petitions for reorganization under Chapter 11 of
the U.S. Bankruptcy Code in the United States Bankruptcy Court for
the Southern District of New York. The Restructuring Plan must be
approved by the Court and the Company intends to promptly file a
plan of reorganization reflecting the Restructuring Plan with the
Court. The Company and its subsidiaries expect to continue to
operate their business in the ordinary course throughout the
Chapter 11 process under the jurisdiction of the Court while it
seeks confirmation of the Restructuring Plan.
"The day-to-day operations of our business will not be impacted by
[the bankruptcy filing]," said David Hauser, Chairman and CEO of
FairPoint. "We want to assure our customers, employees and
vendors that we remain committed to continuing to provide
reliable, uninterrupted service to all of our customers. [The
filing] represent[s] a critical and positive step in our efforts
to reduce our indebtedness, strengthen our financial condition and
position FairPoint to compete more effectively in a dynamic
marketplace," concluded Hauser.
In connection with the Restructuring Plan, the Company has
received commitments from certain of the Supporting Lenders for a
$75 million debtor-in-possession revolving credit facility to
ensure sufficient liquidity during the Chapter 11 process. The
Company currently has approximately $46 million of cash on hand
and expects to continue to generate positive operating cash flow.
In total, including the DIP Facility, the Company will have
available liquidity of approximately $121 million. In addition,
under the terms of the Restructuring Plan, the Company does not
expect to pay interest or principal on its prepetition debt while
in Chapter 11.
Upon emergence from Chapter 11, subject to certain conditions, the
DIP Facility will convert into a $75.0 million five-year revolving
credit facility. Pursuant to the Restructuring Plan, the Company's
total debt would be reduced to approximately $1.0 billion from its
current level of nearly $2.7 billion which includes accrued
interest and amounts owed under its interest rate swap agreements.
In addition, annual interest costs would be reduced from more than
$200 million to approximately $65 million. In accordance with the
Restructuring Plan, approximately $1.1 billion of debt under the
credit facility would be converted into equity, transferring 98%,
and in certain circumstances, 100% of the equity ownership of the
Company to the secured lenders under the credit facility, subject
to future dilution for issuances under an equity incentive plan
and for warrants issued under the Restructuring Plan.
The Restructuring Plan also provides for a new $1.0 billion
secured term loan. This new term loan will (i) bear interest at
LIBOR plus 4.5%, with a 2.0% LIBOR floor, (ii) have a five-year
term and (iii) require mandatory amortization of $10.0 million in
each of the first two years and $50.0 million in the third year
following emergence from Chapter 11, with increasing annual
amortization amounts thereafter through maturity.
Other terms of the Restructuring Plan are still being negotiated,
but the Restructuring Plan provides that all of the Company's
outstanding senior notes due 2018, aggregating approximately $570
million (including accrued interest), as well as other unsecured
creditors will be converted into equity ownership of the Company
equal to approximately 2% and will be issued warrants to purchase
up to 5% of the ownership interest in the Company assuming such
class accepts the Restructuring Plan.
"We are extremely pleased with the terms of the agreement reached
with our secured lenders," stated Alfred Giammarino, Executive
Vice President and CFO of FairPoint. "This plan will provide
FairPoint with significantly greater financial flexibility through
the reduction of nearly $170 million in minimum annual debt
service requirements. This enhanced flexibility will enable us to
continue to invest in new technologies and provide advanced
services to customers throughout our service territories,"
concluded Mr. Giammarino.
The Company also filed certain first day motions with the Court to
enable it to continue to conduct business without interruption.
These include motions providing for employees to continue to
receive compensation and benefits as usual and to maintain
customer programs. During the reorganization process, suppliers
and contractors should expect to be paid for post-petition
purchases of goods and services in the ordinary course of
business.
In addition, the Company requested the Court to impose certain
restrictions on trading in its common stock in order to preserve
valuable tax assets. Such trading restrictions, if imposed, would
apply immediately to investors beneficially owning at least 4
million shares, or 4.4 percent, of the outstanding common stock of
the Company. For these purposes, beneficial ownership of stock
will be measured in accordance with special U.S. tax rules that,
among other things, apply constructive ownership concepts and take
into account indirect holdings.
Fairpoint disclosed the estimated cash receipts and disbursements,
net cash gain or loss, and obligations and receivables expected to
accrue that remain unpaid, other than professional fees within the
next 30 days:
Estimated Cash Receipts $94,474,157
Estimated Cash Disbursements $67,051,321
-----------
Estimated Net Cash Gain Or Loss $27,422,836
Estimated Obligations Expected
To Accrue But Remain Unpaid
(Other Than Professional Fees) $11,037,973
Estimated Receivables Expected
To Accrue But Remain Unpaid
(Projected Revenue For
November 2009) $95,201,908
About FairPoint Communications
FairPoint Communications, Inc. (NYSE: FRP) --
http://www.fairpoint.com/-- is an industry leading provider of
communications services to communities across the country.
FairPoint owns and operates local exchange companies in 18 states
offering advanced communications with a personal touch, including
local and long distance voice, data, Internet, television and
broadband services. FairPoint is traded on the New York Stock
Exchange under the symbols FRP and FRP.BC.
Fairpoint and its affiliates filed for Chapter 11 on October 26,
2009 (Bankr. D. Del. Case No. 09-16335).
Rothschild Inc. is acting as financial advisor for the Company;
AlixPartners, LLP as the restructuring advisor; and Paul,
Hastings, Janofsky & Walker LLP is the Company's counsel. BMC
Group is claims and notice agent.
As of June 30, 2009, Fairpoint reported $3.24 billion in total
assets, $321.41 million in total current liabilities,
$2.91 billion in total long-term liabilities, and $1.23 million in
total stockholders' equity.
FAIRPOINT COMMUNICATIONS: Case Summary & 50 Unsecured Creditors
---------------------------------------------------------------
Debtor: FairPoint Communications, Inc.
521 East Morehead Street, Suite 500
Charlotte, NC 28202
Bankruptcy Case No.: 09-16335
Debtor-affiliates filing subject to Chapter 11 petitions:
Entity Case No.
------ --------
BE Mobile Communications, Inc. 09-16336
Bentlyville Communications Corporation 09-16337
Berkshire Cable Corp. 09-16338
Berkshire Cellular, Inc. 09-16339
Berkshire Net, Inc. 09-16340
Berkshire New York Access, Inc. 09-16334
Berkshire Telephone Corporation 09-16341
Big Sandy Telecom, Inc. 09-16342
Bluestem Telephone Company 09-16343
C & E Communications, LTD. 09-16333
C-R Communications, Inc. 09-16387
C-R Long Distance, Inc. 09-16386
C-R Telephone Company 09-16384
Chautauqua & Erie Communications, Inc. 09-16424
Chautauqua and Erie Telephone Corporation 09-16375
China Telephone Company 09-16376
Chouteau Telephone Company 09-16374
Columbine Telecom Company 09-16344
Comerco, Inc. 09-16345
Commtel Communications Inc. 09-16346
Community Service Telephone Co. 09-16347
El Paso Long Distance Company 09-16348
Ellensburg Telephone Company 09-16382
Elltel Long Distance Corp. 09-16381
Enhanced Communications Of Northern New 09-16349
England Inc.
ExOp of Missouri, Inc. 09-16350
FairPoint Broadband, Inc. 09-16351
FairPoint Carrier Services, Inc.. 09-16352
FairPoint Communications Missouri, Inc. 09-16353
FairPoint Communications Solutions Corp. - New York 09-16354
FairPoint Communications Solutions Corp. - Virginia 09-16355
FairPoint Logistics, Inc. 09-16356
FairPoint Vermont, Inc. 09-16357
Fremont Broadband, LLC 09-16358
Fremont Telcom Co. 09-16359
Fretel Communications, LLC 09-16380
Germantown Long Distance Company 09-16379
GIT-CELL, Inc. 09-16378
GITCO Sales, Inc. 09-16377
GTC Communications, Inc. 09-16360
GTC Finance Corporation 09-16367
GTC, Inc. 09-16368
Maine Telephone Company 09-16388
Marianna And Scenery Hill Telephone Company 09-16391
Marianna Tel, Inc. 09-16392
MJD Services Corp. 09-16366
MJD Ventures, Inc. 09-16402
Northern New England Telephone Operations LLC 09-16365
Northland Telephone Company of Maine, Inc. 09-16404
Odin Telephone Exchange, Inc. 09-16364
Orwell Communications, Inc. 09-16411
Peoples Mutual Long Distance Company 09-16369
Peoples Mutual Services Company 09-16370
Peoples Mutual Telephone Company 09-16371
Quality One Technologies, Inc. 09-16406
Ravenswood Communications, Inc. 09-16372
Sidney Telephone Company 09-16399
ST Computer Resources, Inc. 09-16398
ST Enterprises, LTD. 09-16397
ST Long Distance, Inc. 09-16395
ST. Joe Communications, Inc. 09-16423
Standish Telephone Company 09-16394
Sunflower Telephone Company, Inc. 09-16389
Taconic Technology Corp. 09-16407
Taconic Telcom Corp. 09-16408
Taconic Telephone Corp. 09-16409
Telephone Operating Company of Vermont LLC 09-16410
Telephone Service Company 09-16401
The Columbus Grove Telephone Company 09-16412
The El Paso Telephone Company 09-16363
The Germantown Independent Telephone Company 09-16413
The Orwell Telephone Company 09-16405
UI Communications, Inc. 09-16414
UI Long Distance, Inc. 09-16415
UI Telecom, Inc. 09-16416
Unite Communications Systems, Inc. 09-16362
Utilities, Inc. 09-16400
Yates City Telephone Company 09-16373
YCOM Networks, Inc. 09-16361
Type of Business: The Debtors own and operate 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.
See http://www.fairpoint.com/
Chapter 11 Petition Date: October 26, 2009
Court: Southern District of New York
Debtor's Counsel: Luc A. Despins, Esq.
James T. Grogan, Esq.
Paul Hastings Janofsky & Walker LLP
Park Avenue Tower
75 E. 55th Street, First Floor
New York, NY 10022
Tel: (212) 318-6000
Fax: (212) 319-4090
Financial
Advisor: Christopher Lawrence, Co-Head of Investment
Banking
Neil Augustine, Managing Director
William R. Shaw, Managing Director
Francois Teissonniere, Managing Director
Rothschild Inc.
1251 Avenue of the Americas
New York, NY 10020
Tel: (212) 403-3500
Restructuring
Advisor: AlixPartners LLP
40 West 57th Street
New York, NY 10019
Tel: (212) 490-2500
Fax: (212) 490-1344
http://www.alixpartners.com/
Claims Agent: BMC Group Inc.
875 Third Avenue, 5th Floor
New York, NY 10022
Tel: (212) 310-5900
Fax: (212) 644-4552
The Debtors' financial condition as of June 30, 2009:
Total Assets: $3,235,604,000
Total Debts: $3,234,472,000
The Debtors' Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
U.S. Bank National Association Senior Notes $574,636,995
as indenture trustee
Attn: Rick Rokosch
60 Livingston Avenue
EP-MN-WS3C
St. Paul, MN 55107-2292
Capgemini Trade Debt $19,795,980
6400 Shafer Court
Rosemont, IL 60018
Tel: (847) 384-6100
Fax: (847) 384-0500
National Exchange Carriers Trade Debt $5,765,088
Association
Attn: Carol A. Brennan
6400 S. Fiddlers Green Circle
#1300
Greenwood Village, CO 80111
Tel: (303) 893-4402
Verizon Business Network Trade Debt $2,035,398
Services, inc.
P.O. Box 981820
El Paso, TX 79998
Tel: (800) 555-8879
Fax: (309) 820-7044
Occam Networks Inc. Trade Debt $1,932,956
Attn: Jeff Beer
2805 Montclare Ct
Aurora, IL 60504
Tel: (805) 692-2989
Fax: (805) 692-2999
Byers Engineering Co. Trade Debt $1,721,037
6285 Barfield Rd.
Atlanta, GA 0328-4303
Tel: (404) 843-1000
Fax: (404) 843-2000
Power & Telephone Supply Co Trade Debt $1,403,020
Attn: Dale Stevenson
2673 Yale Avenue
Memphis, TN 38112
Tel: (901) 866-3097
Fax: (336) 249-7475
Communications Data Group Inc. Trade debt $858,420
Attn: Mike Runyon
102 S. Duncan Rd.
Champaign, IL 61822
Tel: (217) 355-7106
Fax: (217) 351-6994
Zampell Building Services Trade Debt $798,671
Attn: James Zampell
3 Stanley Tucker Drive
Newburyport, MA 01950
Tel: (978) 499-5137
Fax: (978) 499-7137
Volt Delta Resources LLC Trade Debt $791,104
Attn: Tim Moore
560 Lexington Ave, 14th floor
New York, NY 10022
Tel: (212) 785-8864
Telenetwork Partners Ltd. Trade Debt $785,765
350 Barnes St, Suite 105
San Marcos, TX 78666
Tel: (800) 580-3355
Glacial Energy Of New England Trade Debt $736,368
Attn: Graig Joyce
24 Route 6A, Suites 1 And 2
Sandwich, MA 02563
Tel: (781) 325-2858
Fax: (508) 437-0291
Alcatel - Lucent Usa Inc Trade Debt $608,843
Attn: Gary Milewski
600-700 Mountain Avenue
Murray Hill, NJ 07974
Tel: (978) 346-9339
Crc Communications Of Maine Trade Debt $582,192
Inc.
56 Campus Drive
New Gloucester, ME 04260
Tel: (207) 688-8811
Hewlettpackard Co Trade Debt $526,832
3000 Hanover Street
Palo Alto, CA 94304
Tel: (650) 857-1501
Fax: (650) 857-5518
On Target Utility Services Trade Debt $522,577
Attn: Mike Fallona, General
Manager - Owner
617 Water Street
Gardiner, ME 04345
Tel: (207) 588-4516
Verizon Wireless Messaging Trade Debt $498,981
Services, LLC
New Hampshire Electric Coop Trade Debt $417,714
Northern New England Telephone Trade Debt $351,266
Operations Llc
Wisor Telecom Trade Debt $349,625
Maine Printing Co Trade Debt $321,813
Verisign Inc Trade Debt $294,000
Shields Environmental Inc Trade Debt $291,889
Vital Economy Inc Trade Debt $251,218
Nco Financial Systems Inc Trade Debt $225,886
Kansys Inc Trade Debt $219,999
Logica North America Inc Trade Debt $192,000
Nortel Networks Inc Trade Debt $176,666
Nyseg Trade Debt $174,396
Professional teleconcepts Inc. Trade Debt $167,261
Fisc Solutions Trade Debt $152,242
Metlife Trade Debt $148,333
Medco Health Solutions Trade Debt $147,206
Fujitsu Network Communications Trade Debt $142,473
Anthem Blue Cross Blue Shield Trade Debt $136,430
Ron Comeau & Sons Inc Trade Debt $131,131
Diversified Investment Advisor Trade Debt $124,014
Radialpoint Trade Debt $119,190
Zachau Construction Inc Trade Debt $117,027
ISPN Trade Debt $110,423
American Cable Assemblies Inc Trade Debt $104,071
Nokia Siemens Networks Usa LLC Trade Debt $104,048
United Healthcare Insurance Co Trade Debt $102,409
Butler America LLC Trade Debt $102,220
Genesys Telecommunications Trade Debt $100,035
Laboratories Inc
Unisys Corp. Trade Debt $95,091
Neonova Network Services Inc Trade Debt $93,709
Pair Gain Communications Inc Trade Debt $87,951
Martin Dawes Analytics Trade Debt $85,719
John Staurulakis Incorporated Trade Debt $81,327
The petition was signed by Alfred C. Giammarino, chief financial
officer.
FANNIE MAE: Inks MOU with Treasury, FHFA and Freddie Mac
--------------------------------------------------------
Fannie Mae (formally known as the Federal National Mortgage
Association) and Freddie Mac (formally known as the Federal Home
Loan Mortgage Corporation) entered into a Memorandum of
Understanding with the U.S. Department of the Treasury, and the
Federal Housing Finance Agency.
The MOU sets forth the terms under which Treasury and, as directed
by FHFA, Fannie Mae and Freddie Mac, intend to provide assistance,
through three separate programs, to state and local housing
finance agencies so that the HFAs can continue to meet their
mission of providing affordable financing for both single-family
and multifamily housing. The parties' obligations with respect to
transactions under the three assistance programs contemplated by
the MOU, which will be capped, will become binding when the
parties execute definitive transaction documentation.
The MOU includes provisions for assistance to HFAs through three
programs:
1. Temporary Credit and Liquidity Facilities Program.
On a 50-50 pro rata basis, Fannie Mae and Freddie Mac will provide
three-year standby credit and liquidity support for outstanding
variable rate demand obligations issued by HFAs. This support
will be through Temporary Credit and Liquidity Facilities which
provide credit enhancement to the holders of such VRDOs and the
obligation to provide funds to purchase any VRDOs that are put by
their holders and are not remarketed. Treasury will purchase 100%
of the participation interests in all of the TCLFs provided by
Fannie Mae and Freddie Mac. The TCLFs, each of which must expire
on or before December 31, 2012, will replace existing liquidity
facilities from other providers. To be eligible for participation
under this program, single-family VRDOs must have a credit rating
of "BBB" or better and multifamily VRDOs must have a credit rating
of "A" or better.
2. New Issue Bond Program
On a 50-50 pro rata basis, Fannie Mae and Freddie Mac will issue
partially guaranteed pass-through securities backed by new single-
family and certain new multifamily housing bonds issued by HFAs.
To be eligible for participation under this program, bonds must
generally be tax-exempt and must meet certain other criteria,
including having a long-term credit rating of "Baa3"/"BBB-" or
better. Treasury will purchase 100% of the pass-through
securities issued by Fannie Mae and Freddie Mac and remit the
purchase price to the HFAs.
The Treasury Department's purchases of GSE securities and
participation interests in TCLFs under these two programs
generally must occur by December 31, 2009. Under certain
circumstances, settlements of transactions pursuant to
documentation executed on or before December 31, 2009, may occur
up to January 29, 2010.
Fannie Mae and Freddie Mac will administer the foregoing two
programs on a coordinated basis. Treasury will bear the initial
losses of principal under these two programs up to 35% of total
principal on a program-wide basis, and thereafter Fannie Mae and
Freddie Mac each will bear the losses of principal that are
attributable to the securities that it issues and its portion of
the TCLFs. Treasury will bear all losses of unpaid interest.
Under both programs, Fannie Mae and Freddie Mac will be paid fees
at the time bonds are securitized, as well as annual fees. The
size of the New Bond Issue Program and the Temporary Credit and
Liquidity Facility Program will be capped and will be determined
after all requests to participate are received from HFAs. The
amount requested for the Temporary Credit and Liquidity Facility
Program may not exceed the amount of outstanding bonds supported
by facilities to be replaced under that program.
New Issue Bond Program volume will be made available to the HFAs
requesting participation by generally using the allocation formula
established by the Housing and Economic Recovery Act of 2008 for
2008 as a base line. Where the 2008 HERA amounts were not
allocated among state and local HFAs within a state, Treasury will
determine a final allocation. Temporary Credit and Liquidity
Facility Program volume will be made available to the HFAs as
Treasury determines. If demand for a program is smaller than
these guidelines determined, the program size will be set at a
lower amount.
Additional details about the New Issue Bond Program and the
Temporary Credit and Liquidity Facility Program will be contained
in term sheets expected to be posted by Treasury to a Treasury Web
site prior to the time that definitive documents are executed.
3. Multifamily Credit Enhancement Program
Using their existing housing bond credit enhancement products,
Fannie Mae and Freddie Mac will each provide credit enhancement on
a direct pay basis for individual multifamily project mortgages
backing new housing bonds issued by HFAs, which Treasury will
purchase from the HFAs. To be eligible for purchase under this
program, bonds must generally be tax-exempt and must meet certain
other criteria. Treasury will not be responsible for a share of
any losses incurred by Fannie Mae or Freddie Mac in this program.
The program will not be administered on a coordinated basis, and
the fees payable to Fannie Mae or Freddie Mac for each transaction
will be individually negotiated. Treasury's purchases under this
program generally must occur by December 31, 2009.
As conservator, FHFA has succeeded to all rights, titles, powers
and privileges of Fannie Mae, and of any stockholder, officer or
director of Fannie Mae with respect to the company and its assets.
As a result, FHFA, in its role as our conservator, has overall
management authority over Fannie Mae's business. FHFA has
generally delegated to the company the authority to conduct its
day-to-day operations. FHFA is also Fannie Mae's regulator with
respect to safety, soundness and mission.
Fannie Mae, through FHFA acting on Fannie Mae's behalf as
conservator, previously entered into a senior preferred stock
purchase agreement under which Treasury has committed to provide
Fannie Mae with up to $200 billion in funding under specified
conditions. In exchange for Treasury's funding commitment, Fannie
Mae issued to Treasury, as an initial commitment fee:
(1) one million shares of senior preferred stock, and
(2) a warrant to purchase shares of Fannie Mae common stock
equal to 79.9% of the total number of shares of Fannie
Mae common stock outstanding on a fully diluted basis on
the date of exercise.
Because it holds this warrant, Treasury is deemed to be the
beneficial owner of 79.9% of the outstanding shares of our common
stock.
Fannie Mae has received $44.9 billion in funding under the senior
preferred stock purchase agreement, and the senior preferred stock
has an aggregate liquidation preference of $45.9 billion. Fannie
Mae has also entered into a lending agreement with Treasury
pursuant to which Treasury established a new secured credit
facility that is available to Fannie Mae until December 31, 2009,
as a liquidity backstop. In addition, Fannie Mae currently serves
as program administrator for Treasury's Home Affordable
Modification Program.
FHFA is also the conservator of Freddie Mac and, as the
conservator of Freddie Mac, has succeeded to all rights, titles,
powers and privileges of Freddie Mac, and of any stockholder,
officer or director of Freddie Mac with respect to the company and
its assets. As a result, FHFA, in its role as Freddie Mac's
conservator, has overall management authority over Freddie Mac's
business. FHFA has generally delegated to Freddie Mac the
authority to conduct its day-to-day operations. FHFA is also
Freddie Mac's regulator with respect to its safety, soundness and
mission. Fannie Mae holds Freddie Mac mortgage-related securities
in Fannie Mae's mortgage portfolio and Freddie Mac may be an
investor in variable interest entities that Fannie Mae has
consolidated, and Fannie Mae may be an investor in variable
interest entities that Freddie Mac has consolidated.
About Freddie Mac
The Federal Home Loan Mortgage Corporation (FHLMC) NYSE: FRE --
http://www.freddiemac.com/-- commonly known as Freddie Mac, is a
stockholder-owned government-sponsored enterprise authorized to
make loans and loan guarantees. Freddie Mac was created in 1970
to provide a continuous and low cost source of credit to finance
America's housing.
Freddie Mac conducts its business primarily by buying mortgages
from lenders, packaging the mortgages into securities and selling
the securities -- guaranteed by Freddie Mac -- to investors.
Mortgage lenders use the proceeds from selling loans to Freddie
Mac to fund new mortgages, constantly replenishing the pool of
funds available for lending to homebuyers and apartment owners.
As of June 30, 2009, Freddie Mac had $892,290,000,000 in total
assets and $884,058,000,000 in total liabilities.
About Fannie Mae
Fannie Mae is the U.S. largest mortgage buyer, according to The
New York Times.
As of June 30, 2009, Fannie Mae had $911,382,000,000 in total
assets and $921,984,000,000 in total liabilities, resulting in
Fannie Mae stockholders' deficit of $10,710,000,000.
Conservatorship
As reported by the Troubled Company Reporter, the U.S. government
took direct responsibility for Fannie Mae and Freddie Mac, placing
the government-sponsored enterprises under conservatorship on
September 7, 2008. James B. Lockhart, director of Federal Housing
Finance Agency, said that Fannie Mae and Freddie Mac share the
critical mission of providing stability and liquidity to the
housing market. Between them, the Enterprises have $5.4 trillion
of guaranteed mortgage-backed securities (MBS) and debt
outstanding, which is equal to the publicly held debt of the
United States. Among the key components of the conservatorship,
the FHFA, as conservator, assumed the power of the Board and
management.
FONTAINEBLEAU LV: Contractors Want to Deem Claim Timely Filed
-------------------------------------------------------------
Contractor Claimants Desert Fire Protection, a Nevada Limited
Partnership, Bombard Mechanical, LLC, Bombard Electric, LLC,
Warner Enterprises, Inc., doing business as Sun Valley Electric
Supply Co., Absocold Corporation doing business as Econ
Appliance, Austin General Contracting, and Powell Cabinet and
Fixture Co., Safe Electronics, Inc., SAMFET, and Union Erectors,
LLC, seek entry of a Court order deeming their proofs of claim
timely filed, or, in the alternative, to allow their late-filed
proofs of claim.
In an affidavit filed with the Court, Natalie Socorro, a legal
assistant at Ehrenstein Charbonneau Calderin, relates that on
October 12, 2009, Daniel L. Gold, Esq., at Ehrenstein Charbonneau
Calderin, in Miami Florida, and staff at ECC compiled the proofs
of claim and exhibits for each of the Contractor Claimants to be
delivered to KCC via FedEx overnight delivery and filed in the
bankruptcy case by the Bar Date.
Ms. Socorro says she made online arrangements through her FedEx
account for the pickup and delivery of the package containing the
Contractor Claimants' proofs of claim. Ms. Socorro also paid the
appropriate charge for overnight delivery from Miami, Florida to
El Segundo, California for the package.
On the afternoon of October 12, 2009, and before FedEx's ordinary
package pickup time, Ms. Socorro caused the package with the
Contractor Claimants' proofs of claim to be delivered to the
FedEx pick-up box in the lobby of the building at 800 Brickell
Avenue, Miami, Florida.
On the afternoon of October 13, 2009, Ms. Socorro called Darlene
Calderon at Kurtzman Carson Consultants LLC to confirm that the
proofs of claim had been received. Ms. Calderon informed Ms.
Socorro that the package containing the proofs of claim had not
been received. Ms. Socorro immediately checked the FedEx Web
site using the tracking number contained on the Receipt to
ascertain the whereabouts of the package and whether it had been
delivered. The FedEx Web site showed only that the package
delivery had been "initiated," but was neither in transit nor
delivered. Ms. Socorro then called FedEx customer service to
inquire into the status of the package. FedEx told Ms. Socorro
that FedEx would begin to investigate what happened to the
package, but as of October 14, 2009, the package's location is
still unknown.
The Contractor Claimants say that the Court should hold that
their proofs of claim were timely filed because they took proper
and customary steps to get the proofs of claim in transit to KCC
in time to be received before the expiration of the Bar Date.
The Contractor Claimants signed their proofs of claim, compiled
the exhibits that evidence the amounts of their lien claims, and
counsel sent them to KCC using FedEx, a reputable, overnight air
delivery service that is well-known to businesses throughout the
world to provide guaranteed, overnight delivery of just the sort
of package containing the proofs of claim. The problem is that
the package never reached its destination, and its current status
is unknown. The Receipt and Shipping Label demonstrate, however,
that ECC timely prepared the package to be shipped by FedEx in
sufficient time to reach KCC before the expiration of the Bar
Date.
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)
FONTAINEBLEAU LV: Sued by Lien Claimants to Affirm Liens
--------------------------------------------------------
Zetian Systems, Inc., Z-Glass, Inc., Graybar Electric Company,
Inc., Tracy & Ryder Landscape, Inc., Water FX, LLC, Quality
Cabinet and Fixture Company, Derr & Gruenewald Construction Co.,
Sierra Glass & Mirror, Inc., Morris Shea Bridge Company, Inc.,
Crescent Electric Supply Company, Integrated Mechanical Group,
LLC, Hilti, Inc., and Cashman Equipment Company, who collectively
comprise the Lien Claimants, delivered to the Court on October
15, 2009, a complaint against:
(a) Fontainebleau Las Vegas LLC, and its affiliated debtors as
owner and developer,
(b) Bank of America N.A as Administrative Agent, Issuing
Lender, and Swing Line Lender,
(c) Term Lenders,
See: http://bankrupt.com/misc/FB_TermLenders1014.pdf
(d) Revolving Lenders,
* Bank of America, N.A.,
* Merrill Lynch Capital Corporation,
* JPMorgan Chase Bank, N.A.,
* Barclays Bank PLC,
* Deutsche Bank Trust Company Americas,
* The Royal Bank of Scotland PLC,
* Sumitomo Mitsui Banking Corporation,
* Bank of Scotland,
* HSN Nordbank AG,
* MB Financial Bank, N.A., and
* Camulos Master Fund, L.P.
(e) Second Mortgage Lenders,
See: http://bankrupt.com/misc/FB_2ndMortgageLenders.pdf
(f) John Does 1-50 representing any unknown successor lender
under either a Term Loan, Delayed Draw Loan or Swing Line
Loan.
The adversary proceeding was brought by the Lien Claimants to
determine the validity, priority and extent of their mechanic's
lien claims and for a finding that the Term Lenders, Swing Line
Lenders, Revolving Lenders and 2nd Mortgage Lenders' liens are
inferior to that of the Lien Claimants.
Jennifer R. Lloyd-Robinson, Esq., at Pezzillo Robinson, in Las
Vegas, Nevada, relates that the Debtors are the owner of the
Fontainebleau Las Vegas, a "Tier A" a casino hotel, retail, and
condominium development on the Las Vegas strip, which, as of the
Petition Date, is approximately 70% complete.
The Lien Claimants believe that the Lenders recorded deeds of
trust against the Project on June 6, 2007. By way of information
provided by Turnberry West Construction, Inc., the general
contractor on the Project, prior to the recording of the deeds of
trust against the Project on June 6, the Lenders were aware that
construction had commenced as that term is used in Section
108.22112 Nevada Revised Statutes, and from that date forward,
construction on the Project was open, "notorious," and obvious.
The Lien Claimants relate that they provided work, materials and
equipment that was incorporated into and for the improvement of
the Project, have not been paid as required for the work
performed and the materials and equipment supplied, and have
properly perfected and provided notice of their mechanic's liens.
The lien claims of the Lien Claimants are:
Contractor Claimants Lien Claim Amt.
-------------------- ---------------
Water FX, LLC $13,127,356
$462,920
Z-Glass, Inc. $9,599,066
Zetian Systems, Inc. $7,390,004
Derr and Greunewald Construction Co. $4,805,505
$258,460
$38,853
Quality Cabinet and Fixture Company $4,223,957
Tracy & Ryder Landscape, Inc. $1,591,307
Graybar Electric Company, Inc. $1,157,668
$207,157
$42,866
Sierra Glass & Mirror, Inc. $358,459
Morris Shea Bridge Company, Inc. $370,185
Integrated Mechanical Group, LLC $144,696
Crescent Electric Supply Company $52,532
$47,785
Cashman Equipment Company $84,056
Hilti, Inc. $24,052
Ms. Lloyd-Robinson asserts that the Lien Claimants are "lien
claimants" as defined in Section 108.2214, as they provided
"work, material or equipment with a value of $500 or more" which
was "used in or for the construction, alteration or repair" of
the Project.
The Lien Claimants have a lien upon the Project as set forth in
Section 108.222, which provides that a lien claimant has a lien
upon the property, any improvements for which the work, materials
and equipment were furnished or to be furnished, and any
construction disbursement account established pursuant to Section
108.2403.
Ms. Lloyd-Robinson notes that the Lien Claimants are licensed
contractors in the state of Nevada or do not need to hold a
license for the work performed, or equipment and materials
supplied. Moreover, the Lien Claimants were hired by TWC by a
subcontractor of TWC and performed work, supplied equipment, or
supplied materials at the insistence of TWC, for the improvement
of the Project.
The Lien Claimants say that work commenced on the Project in
November 2006. However, the Lenders did not record deeds of
trust or other interests, liens or encumbrances against the
Project until June 6, 2007. Therefore, the Lien Claimants' liens
against the Project are superior to those of the Lenders
pursuant to Section 108.225.
Accordingly, the Lien Claimants ask the Court to enter judgment
in their favor and against the Defendants:
(a) declaring that the Lien Claimants hold valid, perfected,
first priority liens against the Project and that the
liens are superior to the liens of the Lenders and any
interest the Debtor may have; and
(b) determining the amounts claimed in the liens as due and
owing to the Lien Claimants.
About Fontainebleau Las Vegas
Fontainebleau Las Vegas Holdings, LLC --
http://www.fontainebleau.com/-- is constructing a luxury resort,
Fontainebleu Las Vegas, on the northern end of the Las Vegas
Strip.
Fontainebleau Las Vegas Holdings, LLC, Fontainebleau Las Vegas,
LLC, Fontainebleau Las Vegas Capital Corp. filed for Chapter 11
protection on June 9, 2009 (Bankr. S.D. Fla. Lead Case No.
09-21481). Judge A. Jay Cristol presides over the Debtors' cases.
Scott L Baena, Esq., at Bilzin Sumberg Baena Price & Axelrod LLP,
represents the Debtors in their restructuring efforts. The
Debtors' Financial Advisor are Moelis & Company LLC and Citadel
Derivatives Group LLC. The Debtors' Special Litigation Counsel is
David M. Friedman, Esq., at Kasowitz, Benson, Torres & Friedman
LLP and the Debtors' Special Counsel is Jack J. Kessler, Esq., and
Alan Rubin, Esq., at Buchanan Ingersoll & Rooney PC. The Debtors'
Claims Agent is Kurtzman Carson Consulting LLC. Attorneys at
Genovese Joblove & Battista, P.A., and Fox Rothschild, LLP,
represent the Official Committee of Unsecured Creditors.
As of June 9, 2009, Fontainebleau Las Vegas LLC listed more than
$1 billion in debt and a similar amount in assets, while each of
Fontainebleau Las Vegas Capital Corp. and Fontainebleau Las Vegas
Holdings, LLC, listed less than $50,000 in assets and more than
$1 billion in debts.
Bankruptcy Creditors' Service, Inc., publishes Fontainebleau
Bankruptcy News. The newsletter tracks the Chapter 11 proceedings
of Fontainebleau Las Vegas Holdings, LLC, and its debtor-
affiliates. (http://bankrupt.com/newsstand/or 215/945-7000)
FORD MOTOR: Discusses Tax Benefit Preservation Plan
---------------------------------------------------
Ford Motor Company on Friday discussed its Tax Benefit
Preservation Plan.
Ford on September 11, 2009, entered into the Tax Benefit
Preservation Plan between the Company and Computershare Trust
Company, N.A., as rights agent, and the Board of Directors of the
Company declared a dividend of one preferred share purchase right
for each outstanding share of common stock, par value $0.01 per
share, of the Company and each outstanding share of Class B stock,
par value $0.01 per share, of the Company under the terms of the
Plan.
Ford said the dividend is payable September 25, 2009 to the
stockholders of record as of the close of business September 25.
Each Right entitles the registered holder to purchase from the
Company one one-thousandth of a share of Series A Junior
Participating Preferred Stock, par value $1.00 per share, of the
Company at a price of $35.00 per one one-thousandth of a share of
Preferred Stock, subject to adjustment.
Until the earlier to occur of (i) the close of business on the
tenth business day following the public announcement that a person
or group has become an "Acquiring Person" by acquiring beneficial
ownership of 4.99% or more of the outstanding shares of Common
Stock (or the Board becoming aware of an Acquiring Person, as
defined in the Plan) or (ii) the close of business on the tenth
business day (or, except in certain circumstances, such later date
as may be specified by the Board) following the commencement of,
or announcement of an intention to make, a tender offer or
exchange offer the consummation of which would result in the
beneficial ownership by a person or group (with certain
exceptions) of 4.99% or more of the outstanding shares of Common
Stock (the earlier of such dates being called the "Distribution
Date"), the Rights will be evidenced, with respect to Common Stock
and Class B Stock certificates outstanding as of the Record Date
(or any book-entry shares in respect thereof), by such Common
Stock or Class B Stock certificate (or registration in book-entry
form) together with the summary of rights describing the Plan and
mailed to stockholders of record on the Record Date, and the
Rights will be transferable only in connection with the transfer
of Common Stock or Class B Stock. Any person or group that
beneficially owns 4.99% or more of the outstanding shares of
Common Stock on September 11, 2009 will not be deemed an Acquiring
Person unless and until such person or group acquires beneficial
ownership of additional shares of Common Stock representing 0.5%
or more of the shares of Common Stock then outstanding. Under the
Plan, the Board may, in its sole discretion, exempt any person or
group from being deemed an Acquiring Person for purposes of the
Plan if the Board determines that such person's or group's
ownership of Common Stock will not jeopardize or endanger the
availability of the Company, or otherwise limit in any way the use
of, the Company's net operating losses, tax credits and other tax
assets.
The Plan provides that, until the Distribution Date (or earlier
expiration or redemption of the Rights), the Rights will be
attached to and will be transferred with and only with the Common
Stock and Class B Stock. Until the Distribution Date (or the
earlier expiration or redemption of the Rights), new shares of
Common Stock and Class B Stock issued after the Record Date upon
transfer or new issuances of Common Stock and Class B Stock will
contain a notation incorporating the Plan by reference (with
respect to shares represented by certificates) or notice thereof
will be provided in accordance with applicable law (with respect
to uncertificated shares). Until the Distribution Date (or
earlier expiration of the Rights), the surrender for transfer of
any certificates representing shares of Common Stock and Class B
Stock outstanding as of the Record Date, even without such
notation or a copy of the Summary of Rights, or the transfer by
book-entry of any uncertificated shares of Common Stock and Class
B Stock, will also constitute the transfer of the Rights
associated with such shares. As soon as practicable following the
Distribution Date, separate certificates evidencing the Rights
will be mailed to holders of record of the Common Stock and Class
B Stock as of the close of business on the Distribution Date and
such separate Right Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date. The
Rights will expire upon the earliest of the close of business on
September 11, 2012 (unless that date is advanced or extended by
the Board), the time at which the Rights are redeemed or exchanged
under the Plan, the final adjournment of the Company's 2010 annual
meeting of stockholders if stockholder approval of the Plan has
not been received prior to that time, the repeal of Section 382 of
the Internal Revenue Code of 1986, as amended, or any successor
statute if the Board determines that the Plan is no longer
necessary for the preservation of the Company's Tax Attributes, or
the beginning of a taxable year of the Company to which the Board
determines that no Tax Attributes may be carried forward.
The Purchase Price payable, and the number of shares of Preferred
Stock or other securities or property issuable, upon exercise of
the Rights is subject to adjustment from time to time to prevent
dilution (i) in the event of a stock dividend on, or a
subdivision, combination or reclassification of, the Preferred
Stock, (ii) upon the grant to holders of the Preferred Stock of
certain rights or warrants to subscribe for or purchase Preferred
Stock at a price, or securities convertible into Preferred Stock
with a conversion price, less than the then-current market price
of the Preferred Stock or (iii) upon the distribution to holders
of the Preferred Stock of evidences of indebtedness or assets
(excluding regular periodic cash dividends or dividends payable in
Preferred Stock) or of subscription rights or warrants (other than
those referred to above).
The number of outstanding Rights is subject to adjustment in the
event of a stock dividend on the Common Stock and Class B Stock
payable in shares of Common Stock or Class B Stock or
subdivisions, consolidations or combinations of the Common Stock
occurring, in any such case, prior to the Distribution Date.
Shares of Preferred Stock purchasable upon exercise of the Rights
will not be redeemable. Each share of Preferred Stock will be
entitled, when, as and if declared, to a minimum preferential
quarterly dividend payment of the greater of (a) $10.00 per share,
and (b) an amount equal to 1,000 times the dividend declared per
share of Common Stock. In the event of liquidation, dissolution
or winding up of the Company, the holders of the Preferred Stock
will be entitled to a minimum preferential payment of the greater
of (a) $1.00 per share (plus any accrued but unpaid dividends),
and (b) an amount equal to 1,000 times the payment made per share
of Common Stock. Each share of Preferred Stock will have 1,000
votes, voting together with the Common Stock and Class B Stock.
Finally, in the event of any merger, consolidation or other
transaction in which outstanding shares of Common Stock are
converted or exchanged, each share of Preferred Stock will be
entitled to receive 1,000 times the amount received per share of
Common Stock. These rights are protected by customary anti-
dilution provisions.
Because of the nature of the Preferred Stock's dividend,
liquidation and voting rights, the value of the one one-thousandth
interest in a share of Preferred Stock purchasable upon exercise
of each Right should approximate the value of one share of Common
Stock.
In the event that any person or group becomes an Acquiring Person,
each holder of a Right, other than Rights beneficially owned by
the Acquiring Person (which will thereupon become null and void),
will thereafter have the right to receive upon exercise of a Right
(including payment of the Purchase Price) that number of shares of
Common Stock having a market value of two times the Purchase
Price.
At any time after any person or group becomes an Acquiring Person
but prior to the acquisition by such Acquiring Person of
beneficial ownership of 50% or more of the voting power of the
shares of Common Stock and Class B Stock then outstanding, the
Board may exchange the Rights (other than Rights owned by such
Acquiring Person, which will have become null and void), in whole
or in part, for shares of Common Stock or Preferred Stock (or a
series of the Company's preferred stock having equivalent rights,
preferences and privileges), at an exchange ratio of one share of
Common Stock, or a fractional share of Preferred Stock (or other
stock) equivalent in value thereto, per Right (subject to
adjustment for stock splits, stock dividends and similar
transactions).
With certain exceptions, no adjustment in the Purchase Price will
be required until cumulative adjustments require an adjustment of
at least 1% in such Purchase Price. No fractional shares of
Preferred Stock or Common Stock will be issued (other than
fractions of Preferred Stock which are integral multiples of one
one-thousandth of a share of Preferred Stock, which may, at the
election of the Company, be evidenced by depositary receipts), and
in lieu thereof an adjustment in cash will be made based on the
current market price of the Preferred Stock or the Common Stock.
At any time prior to the time an Acquiring Person becomes such,
the Board may redeem the Rights in whole, but not in part, at a
price of $0.001 per Right payable, at the option of the Company,
in cash, shares of Common Stock or such other form of
consideration as the Board shall determine. The redemption of the
Rights may be made effective at such time, on such basis and with
such conditions as the Board in its sole discretion may establish.
Immediately upon any redemption of the Rights, the right to
exercise the Rights will terminate and the only right of the
holders of Rights will be to receive the Redemption Price.
For so long as the Rights are then redeemable, the Company may,
except with respect to the Redemption Price, amend the Plan in any
manner. After the Rights are no longer redeemable, the Company
may, except with respect to the Redemption Price, amend the Plan
in any manner that does not adversely affect the interests of
holders of the Rights (other than the Acquiring Person).
Until a Right is exercised or exchanged, the holder thereof, as
such, will have no rights as a stockholder of the Company,
including, without limitation, the right to vote or to receive
dividends.
About Ford Motor
Headquartered in Dearborn, Michigan, Ford Motor Co. (NYSE: F) --
http://www.ford.com/-- manufactures or distributes automobiles in
200 markets across six continents. With about 260,000 employees
and about 100 plants worldwide, the company's core and affiliated
automotive brands include Ford, Jaguar, Land Rover, Lincoln,
Mercury, Volvo, Aston Martin, and Mazda. The company provides
financial services through Ford Motor Credit Company.
The Company has operations in Japan in the Asia Pacific region. In
Europe, the Company maintains a presence in Sweden, and the United
Kingdom. The Company also distributes its brands in various
Latin-American regions, including Argentina and Brazil.
* * *
As reported by the Troubled Company Reporter on April 15, 2009,
Standard & Poor's Ratings Services said it raised its ratings on
Ford Motor Co. and related entities, including the corporate
credit rating, to 'CCC+' from 'SD-'. The ratings on Ford Motor
Credit Co. are unchanged, at 'CCC+', and the ratings on FCE Bank
PLC, Ford Credit's European bank, are also unchanged, at 'B-',
maintaining the one-notch rating differential between FCE and its
parent Ford Credit. S&P said that the outlook on all entities is
negative.
Moody's Investors Service in December 2008 lowered the Corporate
Family Rating and Probability of Default Rating of Ford Motor
Company to Caa3 from Caa1 and lowered the company's Speculative
Grade Liquidity rating to SGL-4 from SGL-3. The outlook is
negative. The downgrade reflects the increased risk that Ford
will have to undertake some form of balance sheet restructuring in
order to achieve the same UAW concessions that General Motors and
Chrysler are likely to achieve as a result of the recently-
approved government bailout loans. Such a balance sheet
restructuring would likely entail a loss for bond holders and
would be viewed by Moody's as a distressed exchange and
consequently treated as a default for analytic purposes.
FORD MOTOR: May Report Break-Even Results for NA Operations
-----------------------------------------------------------
Some analysts think that Ford Motor Co. could report break-even
results for its core North American operations or even an overall
profit when it releases third-quarter earnings on November 2,
Matthew Dolan at The Wall Street Journal reports. According to
The Journal, For'd relative success is mainly due to its ability
to minimize its year-over-year sales drops, while taking advantage
of its competitors' weakness and grabbing market share. CNW
Marketing Research says that Ford gained more than five percentage
points of U.S. retail market share in the third quarter compared
with the same period of 2008. The Journal notes that Ford
continues to benefit from stronger prices for its new and used
cars that should boost results at Ford Motor Credit, which could
help the Company reverse large losses accounted for last year at
the unit based on anticipated declines in the value of its leased
vehicles.
Headquartered in Dearborn, Michigan, Ford Motor Co. (NYSE: F) --
http://www.ford.com/-- manufactures or distributes automobiles in
200 markets across six continents. With about 260,000 employees
and about 100 plants worldwide, the company's core and affiliated
automotive brands include Ford, Jaguar, Land Rover, Lincoln,
Mercury, Volvo, Aston Martin, and Mazda. The Company provides
financial services through Ford Motor Credit Company. The Company
has operations in Japan in the Asia Pacific region. In Europe,
the Company maintains a presence in Sweden, and the United
Kingdom. The Company also distributes its brands in various
Latin-American regions, including Argentina and Brazil.
As reported in the Troubled Company Reporter on Sept. 7, 2009,
Moody's upgraded the Corporate Family Rating of Ford Motor Company
to Caa1 from Caa3, and also raised the company's Speculative Grade
Liquidity rating to SGL-3 from SGL-4. The rating outlook was
changed to Stable from Negative. Ford's Probability of Default
Rating remains at Caa3. In a related action, Moody's placed the
Caa1 senior unsecured rating of Ford Motor Credit Company LLC on
review for possible upgrade.
FREDDIE MAC: Files September 2009 Monthly Volume Summary
--------------------------------------------------------
Freddie Mac (formally known as the Federal Home Loan Mortgage
Corporation) on October 23, 2009, issued its September 2009
Monthly Volume Summary.
A full-text copy of the Monthly Volume Summary is available at no
charge at http://ResearchArchives.com/t/s?476c
About Freddie Mac
The Federal Home Loan Mortgage Corporation (FHLMC) NYSE: FRE --
http://www.freddiemac.com/-- commonly known as Freddie Mac, is a
stockholder-owned government-sponsored enterprise authorized to
make loans and loan guarantees. Freddie Mac was created in 1970
to provide a continuous and low cost source of credit to finance
America's housing.
Freddie Mac conducts its business primarily by buying mortgages
from lenders, packaging the mortgages into securities and selling
the securities -- guaranteed by Freddie Mac -- to investors.
Mortgage lenders use the proceeds from selling loans to Freddie
Mac to fund new mortgages, constantly replenishing the pool of
funds available for lending to homebuyers and apartment owners.
As of June 30, 2009, Freddie Mac had $892,290,000,000 in total
assets and $884,058,000,000 in total liabilities.
Conservatorship
As reported by the Troubled Company Reporter, the U.S. government
took direct responsibility for Fannie Mae and Freddie Mac, placing
the government-sponsored enterprises under conservatorship on
September 7, 2008. James B. Lockhart, director of Federal Housing
Finance Agency, said that Fannie Mae and Freddie Mac share the
critical mission of providing stability and liquidity to the
housing market. Between them, the Enterprises have $5.4 trillion
of guaranteed mortgage-backed securities (MBS) and debt
outstanding, which is equal to the publicly held debt of the
United States. Among the key components of the conservatorship,
the FHFA, as conservator, assumed the power of the Board and
management.
FREDDIE MAC: Inks MOU with Treasury, FHFA and Fannie Mae
--------------------------------------------------------
Fannie Mae (formally known as the Federal National Mortgage
Association) and Freddie Mac (formally known as the Federal Home
Loan Mortgage Corporation) entered into a Memorandum of
Understanding with the U.S. Department of the Treasury, and the
Federal Housing Finance Agency.
The MOU sets forth the terms under which Treasury and, as directed
by FHFA, Fannie Mae and Freddie Mac, intend to provide assistance,
through three separate programs, to state and local housing
finance agencies so that the HFAs can continue to meet their
mission of providing affordable financing for both single-family
and multifamily housing. The parties' obligations with respect to
transactions under the three assistance programs contemplated by
the MOU, which will be capped, will become binding when the
parties execute definitive transaction documentation.
The MOU includes provisions for assistance to HFAs through three
programs:
1. Temporary Credit and Liquidity Facilities Program.
On a 50-50 pro rata basis, Fannie Mae and Freddie Mac will provide
three-year standby credit and liquidity support for outstanding
variable rate demand obligations issued by HFAs. This support
will be through Temporary Credit and Liquidity Facilities which
provide credit enhancement to the holders of such VRDOs and the
obligation to provide funds to purchase any VRDOs that are put by
their holders and are not remarketed. Treasury will purchase 100%
of the participation interests in all of the TCLFs provided by
Fannie Mae and Freddie Mac. The TCLFs, each of which must expire
on or before December 31, 2012, will replace existing liquidity
facilities from other providers. To be eligible for participation
under this program, single-family VRDOs must have a credit rating
of "BBB" or better and multifamily VRDOs must have a credit rating
of "A" or better.
2. New Issue Bond Program
On a 50-50 pro rata basis, Fannie Mae and Freddie Mac will issue
partially guaranteed pass-through securities backed by new single-
family and certain new multifamily housing bonds issued by HFAs.
To be eligible for participation under this program, bonds must
generally be tax-exempt and must meet certain other criteria,
including having a long-term credit rating of "Baa3"/"BBB-" or
better. Treasury will purchase 100% of the pass-through
securities issued by Fannie Mae and Freddie Mac and remit the
purchase price to the HFAs.
The Treasury Department's purchases of GSE securities and
participation interests in TCLFs under these two programs
generally must occur by December 31, 2009. Under certain
circumstances, settlements of transactions pursuant to
documentation executed on or before December 31, 2009, may occur
up to January 29, 2010.
Fannie Mae and Freddie Mac will administer the foregoing two
programs on a coordinated basis. Treasury will bear the initial
losses of principal under these two programs up to 35% of total
principal on a program-wide basis, and thereafter Fannie Mae and
Freddie Mac each will bear the losses of principal that are
attributable to the securities that it issues and its portion of
the TCLFs. Treasury will bear all losses of unpaid interest.
Under both programs, Fannie Mae and Freddie Mac will be paid fees
at the time bonds are securitized, as well as annual fees. The
size of the New Bond Issue Program and the Temporary Credit and
Liquidity Facility Program will be capped and will be determined
after all requests to participate are received from HFAs. The
amount requested for the Temporary Credit and Liquidity Facility
Program may not exceed the amount of outstanding bonds supported
by facilities to be replaced under that program.
New Issue Bond Program volume will be made available to the HFAs
requesting participation by generally using the allocation formula
established by the Housing and Economic Recovery Act of 2008 for
2008 as a base line. Where the 2008 HERA amounts were not
allocated among state and local HFAs within a state, Treasury will
determine a final allocation. Temporary Credit and Liquidity
Facility Program volume will be made available to the HFAs as
Treasury determines. If demand for a program is smaller than
these guidelines determined, the program size will be set at a
lower amount.
Additional details about the New Issue Bond Program and the
Temporary Credit and Liquidity Facility Program will be contained
in term sheets expected to be posted by Treasury to a Treasury Web
site prior to the time that definitive documents are executed.
3. Multifamily Credit Enhancement Program
Using their existing housing bond credit enhancement products,
Fannie Mae and Freddie Mac will each provide credit enhancement on
a direct pay basis for individual multifamily project mortgages
backing new housing bonds issued by HFAs, which Treasury will
purchase from the HFAs. To be eligible for purchase under this
program, bonds must generally be tax-exempt and must meet certain
other criteria. Treasury will not be responsible for a share of
any losses incurred by Fannie Mae or Freddie Mac in this program.
The program will not be administered on a coordinated basis, and
the fees payable to Fannie Mae or Freddie Mac for each transaction
will be individually negotiated. Treasury's purchases under this
program generally must occur by December 31, 2009.
As conservator, FHFA has succeeded to all rights, titles, powers
and privileges of Fannie Mae, and of any stockholder, officer or
director of Fannie Mae with respect to the company and its assets.
As a result, FHFA, in its role as our conservator, has overall
management authority over Fannie Mae's business. FHFA has
generally delegated to the company the authority to conduct its
day-to-day operations. FHFA is also Fannie Mae's regulator with
respect to safety, soundness and mission.
Fannie Mae, through FHFA acting on Fannie Mae's behalf as
conservator, previously entered into a senior preferred stock
purchase agreement under which Treasury has committed to provide
Fannie Mae with up to $200 billion in funding under specified
conditions. In exchange for Treasury's funding commitment, Fannie
Mae issued to Treasury, as an initial commitment fee:
(1) one million shares of senior preferred stock, and
(2) a warrant to purchase shares of Fannie Mae common stock
equal to 79.9% of the total number of shares of Fannie
Mae common stock outstanding on a fully diluted basis on
the date of exercise.
Because it holds this warrant, Treasury is deemed to be the
beneficial owner of 79.9% of the outstanding shares of our common
stock.
Fannie Mae has received $44.9 billion in funding under the senior
preferred stock purchase agreement, and the senior preferred stock
has an aggregate liquidation preference of $45.9 billion. Fannie
Mae has also entered into a lending agreement with Treasury
pursuant to which Treasury established a new secured credit
facility that is available to Fannie Mae until December 31, 2009,
as a liquidity backstop. In addition, Fannie Mae currently serves
as program administrator for Treasury's Home Affordable
Modification Program.
FHFA is also the conservator of Freddie Mac and, as the
conservator of Freddie Mac, has succeeded to all rights, titles,
powers and privileges of Freddie Mac, and of any stockholder,
officer or director of Freddie Mac with respect to the company and
its assets. As a result, FHFA, in its role as Freddie Mac's
conservator, has overall management authority over Freddie Mac's
business. FHFA has generally delegated to Freddie Mac the
authority to conduct its day-to-day operations. FHFA is also
Freddie Mac's regulator with respect to its safety, soundness and
mission. Fannie Mae holds Freddie Mac mortgage-related securities
in Fannie Mae's mortgage portfolio and Freddie Mac may be an
investor in variable interest entities that Fannie Mae has
consolidated, and Fannie Mae may be an investor in variable
interest entities that Freddie Mac has consolidated.
About Freddie Mac
The Federal Home Loan Mortgage Corporation (FHLMC) NYSE: FRE --
http://www.freddiemac.com/-- commonly known as Freddie Mac, is a
stockholder-owned government-sponsored enterprise authorized to
make loans and loan guarantees. Freddie Mac was created in 1970
to provide a continuous and low cost source of credit to finance
America's housing.
Freddie Mac conducts its business primarily by buying mortgages
from lenders, packaging the mortgages into securities and selling
the securities -- guaranteed by Freddie Mac -- to investors.
Mortgage lenders use the proceeds from selling loans to Freddie
Mac to fund new mortgages, constantly replenishing the pool of
funds available for lending to homebuyers and apartment owners.
As of June 30, 2009, Freddie Mac had $892,290,000,000 in total
assets and $884,058,000,000 in total liabilities.
About Fannie Mae
Fannie Mae is the U.S. largest mortgage buyer, according to The
New York Times.
As of June 30, 2009, Fannie Mae had $911,382,000,000 in total
assets and $921,984,000,000 in total liabilities, resulting in
Fannie Mae stockholders' deficit of $10,710,000,000.
Conservatorship
As reported by the Troubled Company Reporter, the U.S. government
took direct responsibility for Fannie Mae and Freddie Mac, placing
the government-sponsored enterprises under conservatorship on
September 7, 2008. James B. Lockhart, director of Federal Housing
Finance Agency, said that Fannie Mae and Freddie Mac share the
critical mission of providing stability and liquidity to the
housing market. Between them, the Enterprises have $5.4 trillion
of guaranteed mortgage-backed securities (MBS) and debt
outstanding, which is equal to the publicly held debt of the
United States. Among the key components of the conservatorship,
the FHFA, as conservator, assumed the power of the Board and
management.
FREDDIE MAC: Sees Increase in Mortgage Delinquencies
----------------------------------------------------
ABI reports that Freddie Mac said that delinquencies in its
mortgage portfolio continued to rise last month, putting further
pressure on the mortgage financier.
The Federal Home Loan Mortgage Corporation (FHLMC) NYSE: FRE --
http://www.freddiemac.com/-- commonly known as Freddie Mac, is a
stockholder-owned government-sponsored enterprise authorized to
make loans and loan guarantees. Freddie Mac was created in 1970
to provide a continuous and low cost source of credit to finance
America's housing.
Freddie Mac conducts its business primarily by buying mortgages
from lenders, packaging the mortgages into securities and selling
the securities -- guaranteed by Freddie Mac -- to investors.
Mortgage lenders use the proceeds from selling loans to Freddie
Mac to fund new mortgages, constantly replenishing the pool of
funds available for lending to homebuyers and apartment owners.
Conservatorship
As reported by the Troubled Company Reporter, the U.S. government
took direct responsibility for Fannie Mae and Freddie Mac, placing
the government sponsored enterprises under conservatorship on
September 7, 2008. James B. Lockhart, director of Federal Housing
Finance Agency, said that Fannie Mae and Freddie Mac share the
critical mission of providing stability and liquidity to the
housing market. Between them, the Enterprises have $5.4 trillion
of guaranteed mortgage-backed securities (MBS) and debt
outstanding, which is equal to the publicly held debt of the
United States. Among the key components of the conservatorship,
the FHFA, as conservator, assumed the power of the Board and
management.
FUTURE GRAPHICS: Case Summary & 16 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: Future Graphics, Inc.
113 Legacy Crest Court
Zebulon, NC 27597
Bankruptcy Case No.: 09-09272
Chapter 11 Petition Date: October 23, 2009
Court: United States Bankruptcy Court
Eastern District of North Carolina (Wilson)
Judge: J. Rich Leonard
Debtor's Counsel: J.M. Cook, Esq.
Attorney at Law
PO Box 2241
Raleigh, NC 27602
Tel: (919) 424-6342
Email: JM_Cook@jmcookesq.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
A full-text copy of the Debtor's petition, including a list of its
16 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/nceb09-09272.pdf
The petition was signed by Phillip Killette, president of the
Company.
GALLEON MANAGEMENT: To Liquidate Funds Following Charges
--------------------------------------------------------
Galleon Group said it will wind down its funds, less than a week
after hedge-fund management firm and its founder were charged by
the Securities and Exchange Commission of insider trading. Raj
Rajaratnam, founder of Galleon Group, sent a letter to investors
saying he will now "explore various alternatives for our business"
Galleon Group has been approached by unidentified parties
interested in buying the company and an undetermined amount of its
assets, Bloomberg News reported, citing a person familiar with the
firm.
The Securities and Exchange Commission on October 16 announced it
charged billionaire Raj Rajaratnam and his New York-based hedge
fund advisory firm Galleon Management L.P. with engaging in a
massive insider trading scheme that generated more than
$25 million in illicit gains. The SEC also charged six others
involved in the scheme, including senior executives at major
companies IBM, Intel and McKinsey & Company.
"I want to reassure investors of the liquidity of our funds and
assure Galleon employees that we are seeking the best way to keep
together what I believe is the best long/short equity team in the
business," Mr. Rajaratnam, 52, said in the letter to investors.
"I want to reiterate that I am innocent of all the charges."
Following the filing of the insider-trading charges and the arrest
of Mr. Rajaratnam, institutional investors have moved swiftly to
redeem their investments from the investment management firm.
In excess $1.3 billion (GBP795 million) of the $3.7 billion that
Galleon had under management before founder Raj Rajaratnam's
arrest has been redeemed, according to an October 20 report by the
U.K. Telegraph. According to the report, the speed of the exit
came in part because of the specific rules attached to Galleon's
$350 million technology fund, which allows clients to withdraw
money on a monthly basis, rather than every quarter as is industry
standard.
"The redemptions coming in were likely so large, and no one wants
to be the last out the door," said Brad Balter, head of Boston-
based Balter Capital Management LLC, which allocates investments
to hedge funds and is not a Galleon investor. "As an investor,
you don't want that in your portfolio, even if the charges haven't
been proven."
Claude-Olivier Rochat, spokesman of Notz, Stucki & Cie., a Geneva-
based money manager, said, "The funds are there, it's not a
Madoff-type problem." Notz Stucki said it has a "minimal"
investment of about $6 million in Galleon's Buccaneer's fund and
it sees "no reason" to withdraw the money. The fund isn't managed
by anyone connected with the insider-trading investigation.
SEC Charges
The SEC's complaint, filed in federal court in Manhattan, alleges
that Mr. Rajaratnam tapped into his network of friends and close
business associates to obtain insider tips and confidential
information about corporate earnings or takeover activity at
several companies, including Google, Hilton and Sun Microsystems.
He then used the non-public information to illegally trade on
behalf of Galleon.
"This complaint describes a web of fraud that has been unraveled,"
said SEC Chairman Mary L. Schapiro.
"What we have uncovered in the trading activities of Raj
Rajaratnam is that the secret of his success is not genius trading
strategies. He is not the astute study of company fundamentals or
marketplace trends that he is widely thought to be. Raj
Rajaratnam is not a master of the universe, but rather a master of
the rolodex," said Robert Khuzami, Director of the SEC's Division
of Enforcement. "He cultivated a network of high-ranking
corporate executives and insiders, and then tapped into this ring
to obtain confidential details about quarterly earnings and
takeover activity."
In addition to Rajaratnam and Galleon, the SEC's complaint
charges:
* Danielle Chiesi of New York, N.Y. - a portfolio manager at
New Castle Funds.
* Rajiv Goel of Los Altos, Calif. - a managing director at
Intel Capital, an Intel subsidiary.
* Anil Kumar of Saratoga, Calif. - a director at McKinsey &
Company.
* Mark Kurland of Mount Kisco, N.Y. - a Senior Managing
Director and General Partner at New Castle.
* Robert Moffat of Ridgefield, Conn. - a senior vice president
at IBM.
* New Castle Funds LLC - a New York-based hedge fund
According to the SEC's complaint, Rajaratnam and Galleon traded on
inside information about the following events or transactions:
* An unnamed source, identified in the SEC's complaint as
Tipper A, obtained inside information about earnings
announcements at Polycom and Google, as well as a takeover
announcement of Hilton. Tipper A then allegedly provided
this information to Rajaratnam, who used it to trade on
behalf of Galleon.
* Goel provided inside information to Rajaratnam about certain
Intel quarterly earnings and a pending joint venture
concerning Clearwire Corp., in which Intel had invested.
Rajaratnam then used this information to trade on behalf of
Galleon. As payback for Goel's tips, Rajaratnam, or someone
acting on his behalf, executed trades in Goel's personal
brokerage account based on inside information concerning
Hilton and PeopleSupport, which resulted in nearly $250,000
in illicit profits for Goel.
* Kumar obtained inside information about pending transactions
involving AMD and two Abu Dhabi-based sovereign entities,
which he shared with Rajaratnam. Rajaratnam then traded on
the basis of this information on behalf of Galleon.
* Chiesi obtained inside information from an executive at
Akamai Technologies and traded on the information on behalf
of a New Castle fund, netting a profit of approximately
$2.4 million. Chiesi also passed on the inside information
to Rajaratnam, who then traded on behalf of Galleon.
The SEC also alleges that Moffat provided inside information to
Chiesi about Sun Microsystems. Moffat obtained the information
when IBM was contemplating acquiring Sun. Chiesi then allegedly
traded on the basis of this information on behalf of New Castle,
making approximately $1 million in profits.
The SEC's complaint charges each of the defendants with violations
of Section 10(b) of the Securities Exchange Act of 1934 and Rule
10b-5 thereunder, and, except for Kumar and Moffat, violations of
Section 17(a) of the Securities Act of 1933 and. The complaint
seeks a final judgment permanently enjoining the defendants from
future violations of the above provisions of the federal
securities laws, ordering them to disgorge their ill-gotten gains
plus prejudgment interest, and ordering them to pay financial
penalties. The complaint also seeks to permanently prohibit Goel
and Moffat from acting as an officer or director of any registered
public company.
The SEC's investigation is continuing.
About Galleon Management
Galleon Group, which managed $7 billion at its peak last year,
operates five hedge funds. Raj Rajaratnam, founder of Galleon
Group, 52, was ranked No. 559 by Forbes magazine this year among
the world's wealthiest billionaires, with a $1.3 billion net
worth.
GARY CALKINS: Voluntary Chapter 11 Case Summary
-----------------------------------------------
Debtor: Gary Calkins
6263 E Trail Dr
Anaheim, CA 92807
Bankruptcy Case No.: 09-21487
Chapter 11 Petition Date: October 22, 2009
Court: United States Bankruptcy Court
Central District of California (Santa Ana)
Judge: Theodor Albert
Debtor's Counsel: Allan D. Epstein, Esq.
Law Office of Allan Dean Epstein
333 City Blvd West Suite 1815
Orange, CA 92868
Tel: (714) 938-0477
Fax: (714) 978-8033
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
The Debtor did not file a list of its 20 largest unsecured
creditors when it filed its petition.
The petition was signed by Mr. Calkins.
GENERAL GROWTH: Property Tied to Howard Hughes Drops in Value
-------------------------------------------------------------
The value of 7,000 acres of Nevada property from Howard Hughes'
estate, once placed at as much as $2 billion, has fallen with the
decline in the property market, The Wall Street Journal said. The
property is controlled by bankrupt developer General Growth
Properties Inc., making heirs to the Hughes estate wait for
bankruptcy claims to be resolved, according to the report.
Based in Chicago, Illinois, General Growth Properties, Inc. --
http://www.ggp.com/-- is the second-largest U.S. mall owner,
having ownership interest in, or management responsibility for,
more than 200 regional shopping malls in 44 states, as well as
ownership in master planned community developments and commercial
office buildings. The Company's portfolio totals roughly ]
200 million square feet of retail space and includes more than
24,000 retail stores nationwide. General Growth is a self-
administered and self-managed real estate investment trust. The
Company's common stock is trading in the pink sheets under the
symbol GGWPQ.
General Growth Properties Inc. and its affiliates filed for
Chapter 11 on April 16, 2009 (Bankr. S.D.N.Y., Case No.
09-11977). Marcia L. Goldstein, Esq., Gary T. Holtzer, Esq.,
Adam P. Strochak, Esq., and Stephen A. Youngman, Esq., at Weil,
Gotshal & Manges LLP, have been tapped as bankruptcy counsel.
Kirkland & Ellis LLP is co-counsel. Kurtzman Carson Consultants
LLC has been engaged as claims agent. The Company also hired
AlixPartners LLP as financial advisor and Miller Buckfire Co. LLC,
as investment bankers. The Debtors disclosed
$29,557,330,000 in assets and $27,293,734,000 in debts as of
December 31, 2008.
Bankruptcy Creditors' Service, Inc., publishes General Growth
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by General Growth Properties Inc. and its various
affiliates. (http://bankrupt.com/newsstand/or 215/945-7000)
GENERAL MOTORS: AlixPartners Bills $23 Million for 3 Months' Work
-----------------------------------------------------------------
According to Bill Rochelle at Bloomberg News, AlixPartners LLP is
looking to be paid $23 million for its work in the first three
months of the Chapter 11 case by General Motors Corp., now
formally named Motors Liquidation Co. Albert Koch from
AlixPartners serves as Old GM's president and chief executive
officer.
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).
GENTEK HOLDINGS: Moody's Downgrades Ratings on Senior Loan to 'B1'
------------------------------------------------------------------
Moody's Investors Service lowered the proposed ratings on GenTek
Holdings LLC's senior secured credit facilities to B1 in response
to the $25 million increase in the term loan due October 2014 to
$325 million, with a corresponding reduction in cash equity.
Moody's also affirmed the B1 Corporate Family Rating of ASP GT
Acquisition Corporation. The proposed rating outlook is stable.
On October 14, 2009, Moody's assigned proposed ratings that
reflected less debt and greater cash equity. Under the revised
capital structure debt, when adjusted for Moody's standard
adjustments (including estimated unfunded pensions of $66 million
and capitalized rents of $22 million), is now about $415 million,
assuming no borrowings under GTH's revolver. At this level of
debt proforma leverage for 2009 would be about 3.6 times in a year
with peak EBITDA generation. Currently ASP is benefiting from a
decrease in raw material costs while a portion of revenues are
contractually set at prices negotiated when raw material prices
were high. As these contracts are renegotiated EBITDA will likely
drop to more normalized levels and absent debt reduction leverage
in 2010 would likely increase to 3.7 times.
Ratings Affirmed:
ASP GT Acquisition Corp
* Corporate Family Rating -- B1
* Probability of Default Rating -- B1
Ratings Lowered:
GenTek Holding LLC
* $30 million Sr Sec Revolver due 2013 -- B1 from Ba3 (LGD3, 42%)
* $325 million Sr Sec Term Loan B due 2014 -- B1 from Ba3 (LGD3,
42%)
ASP's B1 CFR also takes into consideration the sponsor's publicly
stated focus on debt reduction, a business strategy less focused
on driving market share growth and more on improving free cash
flow with proceeds to be used for de-levering. However this
"focus" on de-levering is being tested by this increase in
proposed debt and reduction in cash equity prior to closing.
Future increases in leverage would likely place negative pressure
on the ratings and outlook.
The rating outlook for ASP remains stable. Factors that could
have negative rating implications include a failure to maintain
historical margins as raw material prices decrease, deterioration
in conditions in key end-markets and investments of up to
$25 million, if permitted, outside of the GTH corporate structure.
Factors that could have positive rating implications include a
substantial improvement in financial performance and meaningful
debt reductions.
The lowered B1 rating on the senior secured revolver and term loan
B reflects a decision to override Moody's LGD methodology template
driven by the extremely high level of secured debt in GTH's
liability structure relative to the very limited levels of
unsecured obligations. Currently even very limited changes in the
template's assumptions would result in the assignment of a B1
rating. Notwithstanding the adjustment, the credit facilities
ratings also reflect their seniority in the company's debt
structure, relative proximity to the chemical operating assets,
being issued at the GTH level, and benefits of the collateral
package. The facility will be secured by a first priority lien on
the capital stock as well as all domestic assets of the company
and its subsidiaries, and will be guaranteed on a senior secured
basis by all current and future domestic subsidiaries. ASP is
also expected to guarantee the credit facilities.
Moody's last rating action concerning ASP was on October 14, 2009,
when Moody's assigned proposed ratings to the initial debt
structure of the LBO. The ratings of GenTek, Inc., the company
being acquired, will remain on review until the proposed
acquisition is closed, at that time their ratings, including the
SGL-3 and LGD point estimates will be withdrawn.
Moody's last rating action concerning GenTek Inc. was on
October 14, 2009. At the time the company's ratings and outlook
were affirmed.
GENTEK INC: S&P Downgrades Corporate Credit Rating to 'B'
---------------------------------------------------------
Standard & Poor's Ratings Services said that it lowered its
corporate credit rating on GenTek Inc. to 'B' from 'B+' following
the review of the company's plan to increase debt by an
incremental $25 million from the initial plan and reduce the
common equity contribution by American Securities by a similar
amount. The outlook is stable.
Standard & Poor's also said that it lowered its issue-level rating
on GenTek Inc's $355 million senior secured credit facility to
'B+' from 'BB-'. The recovery rating remains '2'.
"These rating actions follow the announcement of American
Securities Capital Partners LLC's revised plan, whereby it will
increase debt by an additional $25 million while reducing the
common equity contribution by about $26.8 million," explained
Standard & Poor's credit analyst Henry Fukuchi. "This will
increase leverage and reduce the cash-flow protection relative to
the plan initially proposed. S&P view this incremental change as
an indication of a more aggressive financial policy, particularly
in light of the company's highly leveraged financial profile."
American Securities signed a definitive agreement to acquire the
stock of GenTek for $38.00/share for a total equity value of
$410.5 million, a 41% premium to its previous closing price of
$27.00/share. The total transaction consideration (including fees
and expenses) is approximately $666.7 million, which is 5.5x pro
forma EBITDA for the 12-month period ended June 30, 2009, of
$121.8 million (pro forma to include only Gentek's Specialty
Chemicals segment excluding the electronics business, which S&P
expects it will sell as part of this transaction).
The acquisition will be financed with $330.0 million of debt,
$181.7 million of equity contributed by American Securities
Partners (plus cash on the company's balance sheet), and
$50 million to be contributed by American Securities in the form
of payment-in-kind notes issued by the parent of Gentek Inc.
As part of the LBO financing deal, GenTek's auto-valve
manufacturing unit will be spun-off and operated separately by
American Securities, and the electronics chemicals business will
be sold concurrently with the closing. The auto-valve
manufacturing business will be separated outside of the borrower
group and will have an independent management team and board of
directors. In addition, the specialty chemicals business will
have no cross-default provisions to debt outside of the borrower
group and no upstream guarantees, and it will be structurally
separated through the formation of a separate chemical holding
company. S&P expects that the potential future sale by American
Securities of the auto-value manufacturing business in a separate
transaction would have no credit implications for Gentek Inc.
The ratings on Parsippany, N.J.-based GenTek Inc. reflect the
company's highly leveraged financial profile and weak business
profile, which stems from its narrow focus and reliance on mature,
low-growth niche chemicals markets. Partly mitigating these
weaknesses are GenTek's market position as an established provider
in the relatively stable and highly profitable water treatment
chemicals segment and the geographic and supply-chain advantages
inherent in this core businesses.
The outlook is stable. S&P expects that the company will be
profitable enough to support growth in its key segments while
maintaining satisfactory credit measures for the rating. Upside
rating potential is limited, especially given financial policy
concerns related to private equity ownership and the narrow focus
of the business. The current rating reflects GenTek's highly
leveraged financial profile, S&P's expectation of decent operating
results, and a ratio of funds from operations to total adjusted
debt of more than 10% through a business cycle. S&P expects this
level of performance should continue to provide ample cash flow to
meet internal needs and scheduled amortization in the next few
years.
S&P could lower the ratings if the company adopted more aggressive
than expected financial policies, operating performance
deteriorates, or unfavorable trends diminish profit potential in
the key water treatment and sulfuric acid segments. Operational
challenges could occur if the company experiences unexpected
volume declines owing to increased competition, unfavorable raw
material sourcing arrangements, or changes in the fundamentals of
how municipalities treat water and refineries source sulfuric
acid.
Based on the downside scenario analysis, S&P could lower the
ratings if operating margins weaken to less than 20% on a
consistent basis or if revenue declines by 10% or more from pro
forma levels. In such a downside scenario, S&P would expect that
the company's credit metrics will weaken--including the FFO to
total adjusted debt ratio declining below 10%. S&P could also
lower the ratings if unexpected cash outlays or business
challenges reduce the company's liquidity position or if future
covenant compliance requirements tighten resulting in cushion
levels less than 10%.
GORDON PROPERTIES: Taps Odin Feldman as Counsel
-----------------------------------------------
Gordon Properties LLC asks the U.S. Bankruptcy Court for the
Eastern District of Virginia for permission to employ Odin,
Feldman & Pittleman PC as its counsel.
The firm has agreed to:
a) advise the consult with the Debtor concerning questions
arising in the conduct of the administration of the estate
and its rights and remedies regard to the estate's assets
and the claims of secured, preferred and unsecured creditors
and other parties in interest;
b) appear for, prosecute, defend and represent the Debtor's
interest in suits in or related to this case;
c) assist in the preparation of pleadings, motions, notices and
orders as are required for the orderly administration of
this estate; and to consult with and advise in connection
with the operation of or the termination of the operation of
the Debtor's business;
d) negotiate with creditors and parties-in-interest in the
case;
e) prepare, file and obtain confirmation of a plan of
reorganization; and
f) assist in other matters as the Debtor may require.
The firm's members and associates charge between $125 and $450 per
hour and its paraprofessionals bill between $100 and $175 per hour
for this engagement.
The Debtor assures the Court that the firm is a "disinterested
person" as defined in Section 101(14) of the Bankruptcy Code.
Based in Alexandria, Virginaa, Gordon Properties LLC filed for
Chapter 11 protection on October 2, 2009 (Bankr. E.D. Va. Case No.
09-18086). In its petition, the Debtor listed assets between
$10 million and $50 million, and debts between $1 million and
$10 million.
GRACE INDUSTRIES: Project Cost Cap Agreement Not Enforceable
------------------------------------------------------------
WestLaw reports that the New York State Department of
Transportation did not furnish any consideration in exchange for
the Chapter 11 debtor-contractor's promise to cap its claims for
the additional costs incurred during a road reconstruction project
due to a differing site condition. Therefore, an agreement
requiring the debtor-contractor to cap its claims was not an
enforceable contract under New York law. In re GII Industries,
Inc., --- B.R. ----, 2009 WL 3030737, 52 Bankr. Ct. Dec. 38
(Bankr. E.D.N.Y.) (Craig, J.).
This decision partially resolves disputes between the debtor and
the DOT arising under a 1998 contract for reconstruction of a
portion of the West Side Highway in Manhattan.
Headquartered in Whitestone, N.Y., Grace Industries Inc. nka GII
Industries, Inc., -- http://www.graceindustriesinc.com/--
specializes in asphalt manufacturing & paving, concrete paving;
airport, highway & bridge construction; electrical, interior and
exterior engineering and design; demolition, foundations, piling,
real estate, and roads, sewer and water main construction. The
Company and its debtor-affiliate Grace Asphalt, Inc., filed for
chapter 11 protection on Dec. 6, 2004 (Bankr. E.D.N.Y. Case
Nos. 04-27013 and 04-27015). Matthew G. Roseman, Esq., at
Cullen and Dykman Bleakley Platt LLP, represents the Debtors in
their restructuring. Gordon Z. Novod, Esq., and P. Bradley
O'Neill, Esq., at Kramer Levin Naftalis & Frankel LLP, represent
the Official Committee of Unsecured Creditors. When the
Debtors filed for protection from their creditors, they reported
$46 million in total assets and $30 million in total debts.
Grace appears to have emerged from chapter 11 in 2006 under the
terms of a confirmed chapter 11 plan.
HARVEST OPERATIONS: Moody's Reviews 'B3' Corporate Family Rating
----------------------------------------------------------------
Moody's Investors Service placed Harvest Operations Corp.'s
ratings under review for possible upgrade following an
announcement on October 22, 2009, that the company has entered
into an agreement to be acquired by Korea National Oil Company (A2
senior unsecured). Ratings placed under review are Harvest's B3
Corporate Family Rating, B3 Probability of Default Rating and Caa1
senior unsecured rating.
Under the agreement, KNOC -- 100% owned by the Korean government -
will purchase all of Harvest's issued and outstanding trust units
for approximately C$1.8 billion and assume C$2.3 billion of
Harvest's outstanding debt. KNOC is obligated to make an offer to
purchase Harvest's outstanding 7.875% U.S. notes and convertible
debentures for a cash consideration equal to 101% of face value
within 30 days following consummation of the transaction. In the
event some of Harvest's notes and debentures are not tendered,
KNOC will assume these obligations and the ratings on these debt
instruments would likely be raised.
Moody's believes that there is a high likelihood that this
transaction will close in which case Harvest's ratings will be
upgraded. If the transaction does not materialize, Moody's -- in
the absence of a competing bid - will likely put Harvest's ratings
back on review for possible downgrade which was initiated
following poor operating performance and deterioration in
liquidity.
The acquisition has been approved by Harvest's Board of Directors
but will need approval from KNOC's Board, Harvest's unit holders,
and from the courts and regulators. The transaction is expected
to close in December 2009.
On Review for Possible Upgrade:
Issuer: Harvest Operations Corp.
-- Probability of Default Rating, Placed on Review for Possible
Upgrade, currently B3
-- Corporate Family Rating, Placed on Review for Possible
Upgrade, currently B3
-- Senior Unsecured Regular Bond/Debenture, Placed on Review for
Possible Upgrade, currently Caa1, LGD4, 65%
The last rating action was on October 10, 2009 when Harvest's
ratings were placed on review for possible downgrade.
Harvest Operations Corp. is a wholly-owned operating subsidiary of
Harvest Energy Trust, an integrated, publicly traded oil and
natural gas unit trust based in Calgary, Alberta, with
conventional producing oil and gas reserves in Western Canada, a
refinery in Come-By-Chance, Newfoundland, and a small number of
retail gasoline stations.
HAYES LEMMERZ: Sells Non-Operating Plant; Plan Hearing Oct. 29
--------------------------------------------------------------
According to Bill Rochelle at Bloomberg News, the Bankruptcy Court
has authorized Hayes Lemmerz International Inc. to sell a non-
operating plant in Huntington, Indiana for $515,000. The plant,
which was used in making aluminum wheels was closed in 2006. The
plant was listed for sale at $1.7 million. The annual cost of
maintaining the plant was $400,000.
A hearing to approve the sale of a plant in Nuevo Laredo, Mexico,
is scheduled for October 29.
The confirmation hearing for approval of the reorganization plan
was also rescheduled for Oct. 29. The unsecured creditors
committee of Hayes Lemmerz supports the Plan.
As reported by the TCR on Sept. 4, 2009, Hayes Lemmerz has reached
an agreement among its DIP lenders, prepetition secured lenders
and the Official Committee of Unsecured Creditors on the terms of
a plan of reorganization. Under the Revised Plan, certain of the
Debtors' prepetition secured lenders, which funded the operations
of the Debtors through a $200 million of debtor-in-possession
financing, will receive majority ownership of the reorganized
Company upon emergence from Chapter 11. Unsecured noteholders are
expected to recover 5% of their allowed claims.
A copy of the Revised Disclosure Statement is available for free
at http://bankrupt.com/misc/Hayes_Revised_DS_Blacklined.pdf
Originally founded in 1908, Hayes Lemmerz International, Inc.
(NasdaqGM: HAYZ) is a worldwide producer of aluminum and steel
wheels for passenger cars and light trucks and of steel wheels for
commercial trucks and trailers. The Company is also a supplier of
automotive powertrain components. The Company has global
operations with 23 facilities, including business, sales offices
and manufacturing facilities, located in 12 countries around the
world. The Company sells products to every major North American,
Asian and European manufacturer of passenger cars and light trucks
and to commercial highway vehicle customers throughout the world.
The Company and certain affiliates filed for bankruptcy on
May 11, 2009 (Bankr. D. Del. Case No. 09-11655) after reaching
agreements with lenders holding a majority of the Company's
secured debt. The Company's principal bankruptcy attorneys are
Skadden, Arps, Slate, Meagher & Flom, LLP. Lazard Freres & Co.,
LLC, serves as the Company's financial advisors. AlixPartners,
LLP, serves as the Company's restructuring advisors. The Garden
City Group, Inc., serves as the Debtors' claims and notice agent.
As of January 31, 2009, the Debtors had total assets of
$1,336,600,000 and total debts of $1,405,200,000.
This is the Company's second trip to the bankruptcy court, dubbed
a Chapter 22, which was precipitated by an unprecedented slowdown
in industry demand and a tightening of credit markets.
HSF HOLDING: Plan Mostly Pays Professionals
-------------------------------------------
According to Bill Rochelle at Bloomberg News, Hawaii Superferry
Inc. confirmed a liquidating Chapter 11 plan on Oct. 21 where
$1,400 is left over after professionals are paid $658,000.
Unsecured creditors are paid $2,100 against Hawaii Superferry.
Creditors of the holding company, HSF Holding Inc., will never
receive any distribution.
Hawaii Superferry previously obtained approval from Judge Peter
Walsh to surrender its ships to lenders owed $158.8 million for
their construction. The Plan provides that all remaining assets
will be liquidated and distributed to creditors in accordance with
the relative priorities set forth in the Bankruptcy Code.
Guggenheim Corporate Funding LLC, a secured creditor of the
holding company with a $51.7 million claim, recovered about $7.5
million that was held in escrow. Guggenheim won't recover
anything on account of the deficiency since the Superferry stock
against which it asserts a lien is being cancelled and has no
value.
Holders of general unsecured claims against HSF Holding
will receive a pro rata share of the net proceeds of any causes of
action held and realized by HSF Holding.
Holders of general unsecured claims against Hawaii Superferry will
receive a pro rata share of available cash after full satisfaction
of, or the establishment of an appropriate reserve for, allowed
administrative expense and secured claims.
A copy of the explanatory disclosure statement with respect to HSF
Holding, Inc. and Hawaii Superferry, Inc.'s Joint Plan of
Liquidation is available for free at:
http://bankrupt.com/misc/HSF.ds.pdf
Wilmington, Delaware-based HSF Holding Inc. operates as the parent
company of Hawaii Superferry, Inc., a Hawaiian inter-island ferry
service expected to commence operations in early 2007. The
Company is planning to use the latest generation of large, high-
speed roll-on/roll-off catamaran ferries. The ferries will be
used to transport travellers from island to island as well as
transport agricultural and bulk goods.
The Company and its affiliate filed for Chapter 11 on May 30,
2009 (Bankr. D. Del. Case Nos. 09-11901 and 09-11902). David B.
Stratton, Esq., and Evelyn J. Meltzer, Esq., at Pepper Hamilton
LLP represent the Debtors in their restructuring efforts. Craig
A. Wolfe, Esq., at Kelley Drye & Warren LLP, is the Committee's
proposed lead counsel. Adam Hiller, Esq., Brian Arban, Esq., and
Michelle Berkeley-Ayres, Esq., at Atlantic Law, is the Committee's
proposed local counsel. When the Debtors sought protection from
their creditors, they listed between $100 million and $500 million
each in assets and debts.
IMPLANT SCIENCES: UHY LLP Raises Going Concern Doubt
----------------------------------------------------
UHY LLP, in Boston, Massachusetts, expressed substantial doubt
about Implant Sciences Corporation's ability to continue as a
going concernt after auditing the Company's consolidated financial
statements as of and for the years ended June 30, 2009, and 2008.
The auditing firm said that the Company has had recurring net
losses and continues to experience negative cash flows from
operations.
The Company reported a net loss of $12,751,000 on revenues of
$8,737,000 for the year ended June 30, 2009, compared with a net
loss of $10,735,000 on revenues of 5,152,000 for the year ended
June 30, 2008. Results for the year ended June 30, 2009, a
$5,700,000 charge resulting from the settlement of the litigation
with Evans Analytical Group.
In settling this litigation the Company agreed to release
approximately $700,000 that had been held in escrow since the time
of the closing of the Accurel (Accurel Systems International
Corporation) sale and agreed to issue 1,000,000 shares of Series E
Convertible Preferred Stock having an aggregate liquidation
preference of $5,000,000.
At June 30, 2009, the Company's consolidated balance sheets showed
$6,664,000 in total assets, $11,582,000 in total liabilities, and
$5,000,000 in Series E convertible preferred stock, resulting in a
$9,918,000 stockholders' deficit.
The Company's consolidated balance sheets at June 30, 2009, also
showed strained liquidity with $2,418,000 in total current assets
available to pay $11,412,000 in total current liabilities.
A full-text copy of the Company's annual report is available for
free at http://researcharchives.com/t/s?4766
As of June 30, 2009, the Company had a cash overdraft of
approximately $6,000, a decrease of $418,000 when compared with
cash and cash equivalents balance of $412,000 as of June 30, 2008.
The Company must repay in full the balance on the senior secured
promissory note issued to DMRJ Group LLC on December 10, 2008, by
December 10, 2009. The balance due on that Note as of June 30,
2009, was $4,049,000 and the liquidation value was $4,600,000. In
addition, the Company must repay by December 10, 2009, the
outstanding balances due to DMRJ under a second secured promissory
note and a revolving credit facility established after June 30,
2009. As of September 28, 2009, the outstanding balances under
that note and under the revolving credit facility were $1,000,000
and $1,833,000, respectively.
About Implant Sciences
Wakefield, Massachusetts-based Implant Sciences Corporation (OBB:
IMSC.OB) -- http://www.implantsciences.com/-- develops,
manufactures and sells sensors and systems for the security,
safety and defense (SS&D) industries.
INNOVATIVE CARD: Board Names Zelayeta as Independent Director
-------------------------------------------------------------
The Board of Directors of Innovative Card Technologies, Inc., on
October 13, 2009, appointed Joe Zelayeta to serve as an
independent director. For his service on the Company's Board of
Directors, Mr. Zelayeta will be entitled to compensation pursuant
to the Company's non-executive board compensation policy.
Joe Zelayeta has over 40 years of experience in the managing and
commercializing of new technologies. Since 2006, Mr. Zelayeta has
been advising companies with regard to merger and acquisition
activities as well as technology development. From 1981 to 2006,
he was employed by LSI Logic Corporation as part of the executive
management team. Mr. Zelayeta was a member of the Board of
Directors of the Semiconductor Research Corporation representing
LSI Logic as well as a member of the Technology Strategy Committee
of the Semiconductor Industry Association (SIA). Mr. Zelayeta has
a BS in Chemistry from the University of Nevada.
As reported by the Troubled Company Reporter on October 8, 2009,
Innovative Card Technologies, Inc., completed a three-part
financial restructuring. These developments provide the company
with $1.2 million in working capital, absolve the company of
approximately $9 million in debt, and advantageously restructure
$4.5 million in existing debt. Innovative Card Technologies plans
to use the working capital to commercialize newly developed,
patent-pending card technologies, and to enhance and expand sales
of the market-leading InCard DisplayCard(TM).
The company raised $1.2 million in working capital from the sale
of additional Amortizing Convertible Debentures. As part of this
transaction, the Company issued 2,254,642 warrants to the
investors; the newly issued debentures and warrants have a
conversion and exercise price of $0.25 respectively. Los Angeles-
based T.R. Winston & Company acted as placement agent.
The company also announced that it has successfully met and
completed all of the conditions outlined in the "Assignment of
Debenture and Common Stock Warrant Agreement," as stipulated in a
July 11, 2009 agreement between Innovative Card Technologies and
EMC Corporation/RSA Security Inc. The completion of this
agreement retires approximately $7.6 million dollars in debt and
cancels 1.01 million common stock purchase warrants previously
issued to EMC Corporation/RSA Security Inc.
In the final piece of the restructuring, the company entered into
a series of transactions with the holders of the remaining
Amortizing Convertible Debentures and certain other creditors.
The amended terms of debenture include waiving existing defaults,
late fees, interest hikes and liquidated damages. The aggregate
debt reduction resulting from the renegotiation was $1.4 million
at the end of the third quarter. The aggregate principal amount
of debentures after the exchange is approximately $4.7 million,
with 855,533 warrant shares subject to the amendment.
Approximately $1.4 million of these debentures have a conversion
price of $1.00 and approximately $3.3 million of these debentures
have a conversion price of $0.25. The warrants have an exercise
price of $0.25.
"I am pleased to announce a significant financial restructuring
that funds the company's future endeavors, absolves us of
significant debt, and reverses toxic terms of default and expense
that were assessed in our first quarter," said Richard Nathan,
President and CEO of InCard Technologies. "This has been a
comprehensive team effort by our management team, the Board of
Directors, and our investment banker." Mr. Nathan continued,
"These improvements to our balance sheet enable us to focus on
expanding our markets and introducing new products based on
patents filed this quarter and in our second quarter this year."
The InCard DisplayCard(TM) is used by banks, traders, and online
vendors to authenticate customer identity during online
transactions. It is also used by various enterprise organizations
worldwide to authenticate employee access to electronic
information systems.
About Innovative Card Technologies
Innovative Card Technologies, Inc. -- http://www.incard.com/--
develops and markets secure powered cards for payment,
identification, physical and logical access applications.
This concludes the Troubled Company Reporter's coverage of
Innovative Card Technologies until facts and circumstances, if
any, emerge that demonstrate financial or operational strain or
difficulty at a level sufficient to warrant renewed coverage.
INNOVATIVE COS: Gets Interim OK to Use Citibank Cash Collateral
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of New York, in
a fifth interim order, authorized Innovative Companies LLC and its
debtor-affiliates to continue using cash collateral of Citibank,
N.A. until the first week of November,
A further hearing on the Debtors' cash collateral will be held on
Nov. 5, 2009, at 11:00 a.m. at the U.S. Bankruptcy Court, 290
Federal Plaza, Central Islip, New York City. Objections, if any
are due 4:00 p.m. on Nov. 1, 2009.
As reported in the Troubled Company Reporter on June 23, 2009,
Citibank asserts a claim against the Debtors of $22,110,000
secured by the Debtors' assets, including cash collateral that is
estimated by the Debtors to be worth $14,000,000.
TCR reported that as adequate protection against any diminution in
value of the Collateral, including cash collateral, Citibank is
granted a security interest and replacement lien in all of the
assets and property acquired by the Debtors after the petition
date and the proceeds thereof, including, without limitation, the
bank accounts maintained by the Debtors at any non-Citibank
financial institution, subject to a Carve-Out for fees payable to
the U.S. Trustee and any fees payable to the Clerk of the
Bankruptcy Court, and reasonable fees and expenses of any
Chapter 7 trustee appointed in a subsequent conversion of all of
the cases, up to a maximum of $7,500.
According to TCR, as additional adequate protection, Citibank is
granted an allowed administrative claim under sections 503(b)(1),
507(a), and 507(b) of the Bankruptcy Code for any diminution in
the value of the Citibank Collateral.
About The Innovative Companies
Headquartered in Hauppauge, New York, The Innovative Companies LLC
and its affiliates filed for Chapter 11 protection on April 17,
2009 (Bankr. E.D.N.Y. Lead Case No. 09-72669). Leslie A. Berkoff,
Esq., at Moritt Hock Hamroff Horowitz LLP, represents the Debtors
in their restructuring efforts. David M. Banker, Esq., at
Lowenstein Sandler PC, represents the official committee of
unsecured creditors as counsel. In its petition, the Company
listed between $10 million and $50 million each in assets and
debts.
INNOVATIVE COS: Proofs of Claim Due December 1
----------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of New York has
set Dec. 1, 2009, at 5:00 p.m. (EST) as the deadline for all
persons and entities to file a proof of claim against Innovative
Companies LLC and its debtor-affiliates.
For more information on filing of proofs of claim, contact the
counsel for the Debtors:
Moritt Hock Hamroff Horowitz LLP
Attn: Leslie A. Berkoff, Esq.
400 Garden City Plaza, Suite 202
Garden City, NY 11530
Tel: (516) 873-2000
Fax: (516) 873-2010
Headquartered in Hauppauge, New York, The Innovative Companies LLC
and its affiliates filed for Chapter 11 protection on April 17,
2009 (Bankr. E.D.N.Y. Lead Case No. 09-72669). Leslie A. Berkoff,
Esq., at Moritt Hock Hamroff Horowitz LLP, represents the Debtors
in their restructuring efforts. David M. Banker, Esq., at
Lowenstein Sandler PC, represents the official committee of
unsecured creditors as counsel. In its petition, the Company
listed between $10 million and $50 million each in assets and
debts.
INTERTAPE POLYMER: KSA Demands Management to Overhaul Strategy
--------------------------------------------------------------
KSA Capital Management, LLC and Daniel Khoshaba, the managing
member of KSA Capital, disclose that they beneficially own
3,676,590 shares or roughly 6.24% of the common stock of Intertape
Polymer Group Inc. as of October 23, 2009.
KSA and Mr. Khoshaba acquired their Shares of Intertape for
investment. KSA and Mr. Khoshaba evaluate their investment in the
Shares on a continual basis.
KSA and Mr. Khoshaba relate they expect to be in contact with the
members of Intertape's management, the members of Intertape's
Board of Directors, other significant shareholders and others
regarding the near and long term management and operation of
Intertape. The purpose of such discussions will be to communicate
with Intertape's management regarding the investment objectives of
KSA and Mr. Khoshaba and to share with Intertape's management such
ideas as KSA and Mr. Khoshaba may have regarding the maximization
of stockholder value.
KSA and Mr. Khoshaba disclose that on December 30, 2008, they
mailed a letter to Intertape expressing their concern with
Intertape's current strategy and management and setting forth
immediate actions that KSA and Mr. Khoshaba believe should be
taken by Intertape to maximize shareholder value. KSA and Mr.
Khoshaba believe the current strategy employed by Intertape is
deeply flawed and suggest that Intertape take these immediate
actions:
(i) commence the process of putting Intertape up for sale or
replace the Board of Directors and Executive Director and
restructure corporate governance; and
(ii) restructure management's economic incentives, including
compensation agreements established between Intertape and
entities in which certain ITP directors have significant
economic interests, so that they are more aligned with
the interests of all Intertape's shareholders.
KSA and Mr. Khoshaba intend to review their investment in
Intertape on a continuing basis. Depending on various factors
including, without limitation, Intertape's financial position,
conditions in the industry sector in which the Company operates
and general economic and industry conditions, KSA and Mr. Khoshaba
may in the future take such actions with respect to their
investment in Intertape as they deem appropriate including,
without limitation, making proposals to Intertape concerning
changes to the capitalization, ownership structure or operations
of Intertape, or selling some or all of Intertape's assets.
KSA and Mr. Khoshaba reserve the right to effect transactions that
would change the number of shares they may be deemed to
beneficially own. KSA and Mr. Khoshaba further reserve the right
to act in concert with any other shareholders of Intertape, or
other persons, for a common purpose should it determine best to do
so.
About Intertape Polymer Group
Intertape Polymer Group Inc. (TSX:ITP) (NYSE:ITP) develops and
manufactures specialized polyolefin plastic and paper based
packaging products and complementary packaging systems for
industrial and retail use. Headquartered in Montreal, Quebec and
Sarasota/Bradenton, Florida, the Company employs approximately
2,100 employees with operations in 17 locations, including 13
manufacturing facilities in North America and one in Europe.
At June 30, 2009, the Company had $557.8 million in total assets
and $325.0 million in total liabilities.
* * *
As reported by the Troubled Company Reporter on April 6, 2009,
Standard & Poor's Ratings Services lowered its ratings, including
its corporate credit rating, to 'CCC+' from 'B' on Intertape
Polymer Group Inc. and related entities. At the same time, S&P
removed the ratings from CreditWatch with negative implications,
where S&P placed them on March 23, 2009. The outlook is negative.
As of December 31, 2008, the company had about $270 million in
adjusted debt (adjusted for capitalized operating leases and tax-
adjusted unfunded employee benefit obligations).
ION MEDIA: Files Schedules of Assets and Liabilities
----------------------------------------------------
ION Media Network Inc. and it debtor-affiliates delivered to the
U.S. Bankruptcy Court for the Southern District of New York their
schedules of assets and liabilities, disclosing:
Name of Schedule Assets Liabilities
---------------- ----------- -----------
A. Real Property $21,454,454
B. Personal Property $124,039,283
C. Property Claimed as
Exempt
D. Creditors Holding
Secured Claims $1,294,789,078
E. Creditors Holding
Unsecured Priority
Claims $1,380,225
F. Creditors Holding
Unsecured Non-priority
Claims $753,272,468
----------- -------------
TOTAL $145,493,738 $2,049,441,771
A full-text copy of the schedules of assets and liabilities is
available for free at http://ResearchArchives.com/t/s?476d
ION Media Networks, Inc. -- http://www.ionmedia.com/-- owns and
operates the nation's largest broadcast television station group
and ION Television, which reaches over 96 million U.S. television
households via its nationwide broadcast television, cable and
satellite distribution systems, and features popular TV series and
movies from the award-winning libraries of RHI Entertainment, CBS
Television, NBC Universal, Sony Pictures Television, Twentieth
Television and Warner Bros., among others. Using its digital
multicasting capability, the Company has launched several digital
TV brands, including qubo, a channel for children focusing on
literacy and values, and ION Life, a channel dedicated to active
living and personal growth. It also has launched Open Mobile
Ventures Corporation, a business unit focused on the research and
development of portable, mobile and out-of-home transmission
technology using over-the-air digital television spectrum.
The Company and its affiliates filed for Chapter 11 bankruptcy
protection on May 19, 2009 (Bankr. S.D.N.Y. Case No. 09-13125).
Jonathan S. Henes, Esq., at Kirkland & Ellis LLP, is the Debtors'
general bankruptcy counsel. Moelis & Company LLC is the Debtors'
financial advisor. Ernst & Young LLP is the Debtors' tax advisor,
and Kurtzman Carson Consultants LLP is the Debtors' notice, claims
and balloting agent. The Debtors listed $1,855,000,000 in assets
and $1,936,000,000 in debts as of April 30, 2009. The U.S.
Trustee has appointed four members to the official committee of
unsecured creditors.
IPCS INC: Greywolf Discloses Ownership of 8.2% of Common Stock
--------------------------------------------------------------
In a regulatory filing with the Securities and Exchange
Commission, Greyolf Advisors LLC and its affiliates disclosed that
they may be deemed to beneficially own shares of iPCS, Inc.'s
common stock:
Shares
Beneficially
Company Owned Percentage
------- ------------ ----------
Greywolf Capital Partners II LP and
Greywolf Advisors LLC 469,659 2.9%
Greywolf Capital Overseas Master Fund 880,065 5.4%
GCP II SPV and GCOF SPV I 0 0%
Greywolf Capital Management LP,
Greywolf GP LLC, and Jonathan Savitz 1,349,724 8.2%
As of July 27, 2009, there were 16,774,509 shares of common stock,
$0.01 par value per share, outstanding.
A full-text copy of iPCS Inc.'s Schedule 13D is available for free
at http://ResearchArchives.com/t/s?4760
Schaumburg, Illinois-based iPCS, Inc. (NASDAQ:IPCS) is a holding
company that operates as a PCS Affiliate of Sprint through three
wholly owned subsidiaries, iPCS Wireless, Inc., Horizon Personal
Communications, Inc. and Bright Personal Communications Services,
LLC, each having its own affiliation agreements with Sprint PCS.
Pursuant to these affiliation agreements with Sprint PCS, the
Company offers wireless personal communications services services
using Sprint's spectrum under the Sprint brand name on a wireless
network built and operated to Sprint's specifications at iPCS's
own expense. iPCS owns and is responsible for operating, managing
and maintaining its wireless network and has the exclusive right
to provide digital PCS services under the Sprint brand name in its
territory.
iPCS has assets totaling $553,866,000 against debts aggregating
$588,308,000 as of June 30, 2009.
In October 2009, Standard & Poor's Ratings Services placed iPCS
Inc., including its 'B' corporate credit rating, on CreditWatch
with positive implications following an agreement to be merged
with Sprint Nextel (BB/Negative/--). Moody's Investors Service
affirmed iPCS, Inc.'s B3 corporate family and probability of
default ratings, B1 rating of the Company's 1st lien notes and the
Caa1 rating of 2nd lien notes.
JASON FREMOUW: Case Summary & 10 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Jason T. Fremouw
7724 W Villa Rita Drive
Glendale, AZ 85308
Bankruptcy Case No.: 09-27016
Chapter 11 Petition Date: October 23, 2009
Court: United States Bankruptcy Court
District of Arizona (Phoenix)
Debtor's Counsel: Nasser U. Abujbarah, Esq.
The Law Offices Of Nasser U. Abujbarah
10654 N. 32nd St
Phoenix, AZ 85028
Tel: (602) 493-2586
Fax: (602) 923-3458
Email: NUALegal@yahoo.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
According to the schedules, the Company has assets of $1,093,795,
and total debts of $2,229,094.
A full-text copy of the Debtor's petition, including a list of its
10 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/azb09-27016.pdf
The petition was signed by David R. Robinson, member of the
Company.
JEFFERIES GROUP: Fitch Rates Subordinated Debt at 'BB+'
-------------------------------------------------------
Fitch rates Jefferies Group, Inc.'s convertible senior notes due
Nov. 1, 2029 'BBB'. These fixed-rate obligations are unsecured
obligations, ranking equally with other unsecured senior
indebtedness. Proceeds of the new issues will be used for general
corporate purposes. Fitch recently affirmed Jefferies' ratings on
June 17, 2009. For additional information, refer to Fitch's most
recent credit analysis dated Sept. 17, 2009, on Fitch's Web site
at 'www.fitchratings.com'.
Jefferies Group, Inc.
-- Long-term Issuer Default Rating 'BBB';
-- Short-term IDR 'F2';
-- Senior debt 'BBB'';
-- Short-term debt 'F2';
-- Subordinated debt 'BB+'.
The Rating Outlook is Negative.
Jefferies, a Delaware-incorporated holding company, is a well-
established full service investment bank and institutional
securities firm serving middle-market clients and investors. Its
primary broker/dealer operating subsidiary, Jefferies & Company,
Inc., holds the vast majority of the firm's consolidated assets
and is regulated by the SEC. On March 31, 2009, Jefferies had
U.S. GAAP total assets of $21.3 billion, shareholders' equity
(excluding non-controlling interests) of $2.1 billion and net
income of $38.4 million.
JOHN PANAGAKO: Voluntary Chapter 11 Case Summary
------------------------------------------------
Joint Debtors: John P. Panagako
Janice A. Panagako
7 Lehigh Road
Wellesley, MA 02482
Bankruptcy Case No.: 09-20072
Chapter 11 Petition Date: October 22, 2009
Court: United States Bankruptcy Court
District of Massachusetts (Boston)
Judge: Frank J. Bailey
Debtors' Counsel: Nina M. Parker, Esq.
Parker & Associates
10 Converse Place
Winchester, MA 01890
Tel: (781) 729-0005
Fax: (781) 729-0187
Email: nparker@ninaparker.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
The Debtors did not file a list of their 20 largest unsecured
creditors when they filed their petition.
The petition was signed by the Joint Debtors.
JSA ARCHITECTS: Files for Chapter 11 Bankruptcy Protection
----------------------------------------------------------
JSA Architects has filed for Chapter 11 bankruptcy protection,
listing $1 million to $10 million in liabilities. According to
Tim Schooley at Pittsburgh Business Times, JSA Architects vice
president and principal Tom Mrozenski believes that the Company
will exit Chapter 11 within six months, given its 75-year history.
The report quoted Mr. Mrozenski as saying, "We had to do it in
order to reorganize, given that we had a couple of large clients
that canceled on us. We've streamlined all our operations, and
we've had some layoffs and so forth with everything slowing down."
JSA Architects is an architecture firm based in Moon Township.
JTI-MACDONALD: Canada Provinces Accused of Misusing Bankruptcy
--------------------------------------------------------------
Joe Schneider at Bloomberg News reports that Japan Tobacco Inc. is
claiming that Canadian provinces, seeking more than C$80 billion
($76 billion) from tobacco companies for treatment of smoking-
related illnesses, are attempting to improperly use the bankruptcy
process of JTI's JTI-MacDonald unit to force a settlement with
JTCI.
"The strategy is to force JTI into an expedited settlement," David
Scott, a lawyer for JTI told Superior Court Justice Peter Cumming
in Toronto October 20. "It's a lever to force JTI to settle these
health-care claims."
British Columbia, Ontario and New Brunswick have asked Mr. Justice
Cumming to put a time limit on new lawsuits seeking to recoup
health-care costs from JTI-MacDonald and allow their claims to be
included in the company's restructuring process. The request put
the provinces at odds with the federal government, which sided
with the tobacco company and urged the judge to either dismiss it
or put it on hold indefinitely.
JTI has assets of C$1.81 billion and liabilities of C$1.8 billion,
according to its filings, said Laura Donaldson, an attorney for
British Columbia. All the liabilities are owed to companies
related to Japan Tobacco, having been imposed on JTI during a 1999
restructuring in a bid to make the Canadian unit judgment-proof,
Donaldson said.
"There's no improper motive whatsoever" behind the province's
request for a time limit on the lawsuits and inclusion as
creditors in the JTI bankruptcy, Ms. Donaldson said. "It's
improper for the company to try and exclude those claims."
Such an order, if granted, would be unconstitutional because a
judge overseeing a bankruptcy can't prohibit governments from
passing laws that can be used to pursue such lawsuits, Ronald
Slaght, a lawyer for the federal government, told Judge Cumming.
"It's an attempt to twist the CCAA," Slaght said, giving the
provinces "a leg up" on all other plaintiffs.
$200 Billion in Claims Against Tobacco Companies
According to Bloomberg, Tobacco companies that operate in
Canada may face at least C$200 billion ($192 billion) in claims
from governments seeking compensation for treatment of smoking-
related illnesses and lost taxes from smuggling, an Ontario
judge said. "On these two tracks, we have to be talking a couple
hundred billion," Superior Court Judge Peter Cumming said at a
hearing in Toronto October 21.
Ontario, Canada's most populous province, has sued tobacco
manufacturers and is seeking C$50 billion to cover the costs of
treating smokers in the government-funded health-care system for
cancer and other tobacco-related illnesses. British Columbia was
the first province to sue and is seeking unspecified damages as
is New Brunswick. Quebec has said it plans to sue and will
likely seek about C$30 billion, said Laura Donaldson, an
attorney for British Columbia.
The tobacco companies may also face further claims from provinces
alleging they lost taxes because the companies exported Canadian
cigarettes to the U.S. in the 1990s, knowing they would be
smuggled back into Canada for resale on the black market.
Provinces also claim smuggling led to an increase in smoking among
youth, adding to the health-care costs.
About JTI-Macdonald
JTI-Macdonald Corp., part of the JT Group of Companies, was
founded in 1858. The company has its chief place of business in
Toronto, manufacturing operations in Montreal and over 500 full-
time employees across Canada.
In August 2004, JTI-Macdonald Corp. filed for protection under the
Companies' Creditors Arrangement Act. The CCAA filing was made
after it received a notice of assessment from the Quebec Ministry
of Revenue demanding payment of approximately CAD1.36 billion in
duties, penalties and interest in relation to being accused of
conducting contraband activities from 1990 to 1998, when the
company was called RJR-Macdonald, before it was purchased by JT in
1999. JTI was accused of selling cigarettes to U.S. suppliers
from 1991 to 1996, knowing the tobacco was going to be smuggled
back into Canada to avoid high taxes that were aimed at reducing
smoking. The Quebec Ministry of Revenue threatened a confiscation
of JTI-MC's assets absent the payment of the full amount two weeks
following the notice, thus necessitating the CCAA filing.
Japan Tobacco Inc. is a Japan-based company primarily engaged in
the tobacco industry. JTI is the world's third largest tobacco
company. The company manufactures internationally recognized
cigarette brands including Winston, Camel, Mild Seven and Benson &
Hedges. Since its privatization in 1985, JT has actively
diversifed its operations into pharmaceuticals and foods. The
Company's net sales were JPY6.832 trillion in the fiscal year
ended March 31, 2009.
KENNETH JAMES DRAPER: Case Summary & 19 Largest Unsec. Creditors
----------------------------------------------------------------
Debtor: Kenneth James Draper
2961 Selma Street
Jacksonville, FL 32205
Bankruptcy Case No.: 09-08928
Chapter 11 Petition Date: October 22, 2009
Court: United States Bankruptcy Court
Middle District of Florida (Jacksonville)
Debtor's Counsel: Jason A. Burgess, Esq.
Crumley, Wolfe & Burgess, P.A.
1176 Edgewood Ave South, Suite 7
Jacksonville, FL 32205
Tel: (904) 374-0111
Fax: (904) 374-0113
Email: jason@cwbfl.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
According to the schedules, the Company has assets of $1,106,940,
and total debts of $1,218,442.
A full-text copy of Mr. Draper's petition, including a list of his
19 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/flmb09-08928.pdf
The petition was signed by Mr. Draper.
KRAIG SCOTT SULLIVAN: Case Summary & 20 Largest Unsec. Creditors
----------------------------------------------------------------
Joint Debtors: Kraig Scott Sullivan
98 Peacock Station Road
Fredericksburg, VA 22406-5138
Donna Lynn Sullivan
3115 Linden Avenue
Fredericksburg, VA 22401-0000
Bankruptcy Case No.: 09-18772
Chapter 11 Petition Date: October 23, 2009
Court: United States Bankruptcy Court
Eastern District of Virginia (Alexandria)
Judge: Robert G. Mayer
Debtors' Counsel: Robert Easterling, Esq.
2217 Princess Anne St., Suite 100-2
Frederickburg, VA 22401
Tel: (540) 373-5030
Email: eastlaw@easterlinglaw.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
A full-text copy of the Debtors' petition, including a list of
their 20 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/vaeb09-18772.pdf
The petition was signed by the Joint Debtors.
LAGUNA NURSERY INC: Case Summary & 2 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: Laguna Nursery, Inc.
1278 Glenneyre #48
Laguna Beach, CA 92651
Bankruptcy Case No.: 09-21553
Chapter 11 Petition Date: October 23, 2009
Court: United States Bankruptcy Court
Central District of California (Santa Ana)
Judge: Erithe A. Smith
Debtor's Counsel: Dennis Connelly, Esq.
1912 N Broadway #108
Santa Ana, CA 92706
Tel: (714) 973-4503
Email: socalesq44@yahoo.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
According to the schedules, the Company has assets of $1,822,000,
and total debts of $1,156,942.
A full-text copy of the Debtor's petition, including a list of its
2 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/cacb09-21553.pdf
The petition was signed by Steve Kawaratani, president/owner of
the Company.
LANDAMERICA FINANCIAL: Tries to Cast Off Insurance Action
---------------------------------------------------------
Law360 reports that LandAmerica Financial Group Inc. has tried to
pull the plug on the Texas Department of Insurance's lawsuit
alleging the liquidating company's kickbacks for middlemen
inflated title insurance rates in the state.
LandAmerica Financial Group, Inc., provides real estate
transaction services with offices nationwide and a vast network of
active agents. LandAmerica and its affiliates operate through
approximately 700 offices and a network of more than 10,000 active
agents throughout the world, including Mexico, Canada, the
Caribbean, Latin America, Europe, and Asia.
LandAmerica Financial Group and its affiliate LandAmerica 1031
Exchange Services, Inc. filed for Chapter 11 protection Nov. 26,
2008 (Bankr. E.D. Va. Lead Case No. 08-35994). Attorneys at
Willkie Farr & Gallagher LLP and McGuireWoods LLP serve as co-
counsel. Zolfo Cooper is the restructuring advisor. Epiq
Bankruptcy Solutions serves as claims and notice agent.
Attorneys at Akin Gump Strauss Hauer & Feld LLP and Tavenner &
Beran, PLC, serve as counsel to the Creditors Committee of 1031
Exchange. Bingham McCutchen LLP and LeClair Ryan serve as counsel
to the Creditors Committee of LFG.
In its bankruptcy petition, LFG listed total assets of
$3,325,100,000, and total debts of $2,839,800,000 as of Sept. 30,
2008.
On March 6, 2009, affiliate LandAmerica Assessment Corporation,
aka National Assessment Corporation, filed its own petition for
Chapter 11 relief. Affiliate LandAmerica Title Company filed for
for Chapter 11 relief on March 27, 2009. LandAmerica Credit
Services, Inc., filed for Chapter 11 in July 2009.
Bankruptcy Creditors' Service, Inc., publishes LandAmerica
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by LandAmerica Financial and its affiliate LandAmerica
1031 Exchange Services, Inc. (http://bankrupt.com/newsstand/or
215/945-7000)
LDG SARASOTA: Voluntary Chapter 11 Case Summary
-----------------------------------------------
Debtor: LDG Sarasota CI, LLC
5692 Strand Court
Naples, FL 34110
Bankruptcy Case No.: 09-24041
Chapter 11 Petition Date: October 22, 2009
Court: United States Bankruptcy Court
Middle District of Florida (Ft. Myers)
Debtor's Counsel: Stephen R. Leslie, Esq.
Stichter, Riedel, Blain & Prosser
110 East Madison Street, Suite 200
Tampa, FL 33602-4700
Tel: (813) 229-0144
Email: sleslie.ecf@srbp.com
Estimated Assets: $0 to $50,000
Estimated Debts: $1,000,001 to $10,000,000
The Debtor did not file a list of its 20 largest unsecured
creditors when it filed its petition.
The petition was signed by Jeffrey Benham.
LDG SOUTH: Voluntary Chapter 11 Case Summary
--------------------------------------------
Debtor: LDG South, LLC
5692 Strand Court
Naples, FL 34110
Case No.: 09-24038
Chapter 11 Petition Date: October 22, 2009
Court: United States Bankruptcy Court
Middle District of Florida (Ft. Myers)
Debtor's Counsel: Stephen R. Leslie, Esq.
Stichter, Riedel, Blain & Prosser
110 East Madison Street, Suite 200
Tampa, FL 33602-4700
Tel: (813) 229-0144
Email: sleslie.ecf@srbp.com
Estimated Assets: $10,000,001 to $50,000,000
Estimated Debts: $10,000,001 to $50,000,000
The Debtor did not file a list of its 20 largest unsecured
creditors when it filed its petition.
LDG SOUTH II LLC: Voluntary Chapter 11 Case Summary
---------------------------------------------------
Debtor: LDG South II, LLC
5692 Strand Court
Naples, FL 34110
Bankruptcy Case No.: 09-24040
Chapter 11 Petition Date: October 22, 2009
Court: United States Bankruptcy Court
Middle District of Florida (Ft. Myers)
Debtor's Counsel: Stephen R. Leslie, Esq.
Stichter, Riedel, Blain & Prosser
110 East Madison Street, Suite 200
Tampa, FL 33602-4700
Tel: (813) 229-0144
Email: sleslie.ecf@srbp.com
Estimated Assets: $0 to $50,000
Estimated Debts: $1,000,001 to $10,000,000
The Debtor did not file a list of its 20 largest unsecured
creditors when it filed its petition.
The petition was signed by Jeffrey Benham.
LEADIS TECHNOLOGY: Stockholders Approve Dissolution Plan
--------------------------------------------------------
Leadis Technology, Inc., said that that the Company's stockholders
approved the Plan of Dissolution of the Company at a special
meeting of the Company's stockholders held October 23, 2009. In
addition, in accordance with the Plan, the Company intends to file
a Certificate of Dissolution with the Secretary of State of the
State of Delaware and close its stock transfer books, each
effective as of the close of business on October 27, 2009. At
that time, the Company's common stock, and stock certificates
evidencing shares of common stock, will no longer be assignable or
transferable on the Company's books. If the Certificate of
Dissolution is filed and becomes effective on October 27, 2009, as
currently anticipated, then only those stockholders of record as
of the close of business on October 27, 2009, will be entitled to
receive liquidating distributions of available assets.
The Company further announced that it has submitted notice of its
intent to voluntarily delist its common stock from The NASDAQ
Global Market. The notice to NASDAQ submitted by the Company
requested that trading in the Company's common stock be suspended
by NASDAQ effective as of the open of business on October 28,
2009, with the official delisting of the Company's common stock to
be effective ten days thereafter, on November 6, 2009 . In
connection with the notice, the Company intends to file with the
Securities and Exchange Commission a notification of removal from
listing on SEC Form 25 on October 28, 2009.
Leadis Technology, Inc. -- http://www.leadis.com/-- designs,
develops and markets analog and mixed-signal semiconductor
products that enable and enhance the features and capabilities
of portable and other consumer electronic products. The
company's product offerings include light-emitting diode (LED),
drivers, power management, touch technology and consumer audio
analog integrated circuits (ICs).
LEAR CORP: ASM Capital Buys $58,000 in Claims
---------------------------------------------
In separate filings on October 16, 2009, creditors of the Debtors
notified the Court that they intend to transfer each of their
claims filed against the Debtors to:
Claim
Transferor Transferor Amount
---------- ---------- ------
Taylor Metal Products Company ASM Capital, L.P. $37,823
Taylor Metal Products Company ASM Capital, L.P. 20,984
About Lear Corp
Lear Corporation -- http://www.lear.com/-- is one of the world's
leading suppliers of automotive seating systems, electrical
distribution systems and electronic products. The Company's
products are designed, engineered and manufactured by a diverse
team of 80,000 employees at 210 facilities in 36 countries.
Lear's headquarters are in Southfield, Michigan, and Lear is
traded on the New York Stock Exchange under the symbol [LEA].
Outside the United States, Lear has subsidiaries in Germany,
Luxembourg, Sweden, Singapore, China, India and Mexico, among
others.
Lear Corporation and its affiliates filed for Chapter 11 on
July 7, 2009 (Bankr. S.D.N.Y. Case No. 09-14326). Affiliates part
of the Chapter 11 filing include Lear South Africa Limited, Lear
Corporation (Germany) Ltd., Lear Corporation Canada Ltd., Lear
Mexican Holdings Corporation, and Lear South American Holdings
Corporation.
Attorneys at Kirkland & Ellis LLP, serve as the Debtors'
bankruptcy counsel. McCarthy Tetrault LLP has been engaged as
CCAA counsel. Bodman LLP has been hired as special Michigan
counsel. Winston & Strawn LLP and Brooks Kushman P.C. have also
been tapped as special counsel. Alvarez & Marsal North America,
LLC, is the Debtors' restructuring advisors. Ernst & Young LLP is
the Debtors' auditors and tax advisors. Kurtzman Carson
Consultants LLC is the Debtors' claims and notice agent. Simpson
Thacher & Bartlett LLP represents JP Morgan, as admin. agent for
senior secured lenders and DIP lenders.
As of May 30, 2009, Lear has assets of $1,270,800,000 against
debts of $4,536,000,000.
Bankruptcy Creditors' Service, Inc., publishes Lear Bankruptcy
News. The newsletter tracks the Chapter 11 proceedings undertaken
by Lear Corp. (http://bankrupt.com/newsstand/or 215/945-7000)
LEAR CORP: Stipulation Allowing Set-Off With Magna Seating
----------------------------------------------------------
Lear Corp. and Autotek Mexico, S.A. de CV; Eagle Bend Mfg.,
Inc.; Dortec, a division of Magna Closures Inc.; Mississauga
Seating Systems, a division of Magna Seating, Inc.; Excelsior
Spring Seating Systems, a division of Magna Seating of America,
Inc.; Seating Systems of Laredo, a division of Magna Seating of
America, Inc.; Nacote Industries,Inc.; Magna Sealing and Glass
Systems, a division of Magna Mirrors of America, Inc.; and
Polycon, a division of Magna Exteriors and Interiors Corp., are
parties to numerous executory contracts ad purchase orders
pursuant to which the Debtors provide component parts to Magna,
and Magna provides component parts to the Debtors.
The parties' positions on the amounts owing for deliveries as of
the Petition Date from Lear Corporation to Magna and from Magna
to Lear Corporation for their mutual shipments of component parts
can be summarized as:
Lear Magna
Magna Subsidiary Prepetition Debt Prepetition Debt
---------------- ---------------- ----------------
Autotek $433,934(Magna)
448,807(Lear)
Eagle Bend 38,200(Magna)
38,214(Lear)
Dortek 109,183(Magna) $58,694(Magna)
102,789(Lear) 65,798(Lear)
Mississauga 129,763(Magna)
138,991(Lear)
Excelsior 666,432(Magna)
666,472(Lear)
Laredo 34,448(Magna)
38,214(Lear)
Nascote 693,475(Magna)
0(Lear)
Mirrors 199,977
Polycon 0(Magna)
1,804(Lear)
Totals: 615,766(Magna) 1,748,342(Magna)
589,811(Lear) 1,703,043(Lear)
Magna has filed prepetition claims against the Debtors, including
non-priority prepetition claims and claims under Section
503(b)(9) of the Bankruptcy Code, relating to the Lear
Prepetition Debt and, in the future, Magna may file additional
claims to:
(i) identify and file prepetition claims against the Debtors
for damages relating to the Agreements; or
(ii) hold a claim pursuant to Section 502(g) of the Bankruptcy
Code in the event that the Debtors reject one or more of
the Agreements with Magna under Section 365(a) of the
Bankruptcy Code.
Magna has asserted that any payments it makes to the Debtors in
respect of the Magna Prepetition Debt may cause it to lose or
otherwise impair the set-off and recoupment rights it may have
relating to the Magna Prepetition Claims. Based on this concern,
Magna has withheld payment of the Magna Prepetition Debt to the
Debtors.
In addition, the Debtors and Magna have engaged in discussions
regarding the payment terms for Magna's postpetition obligations
to the Debtors.
To resolve the payment of the Magna Prepetition Debt, the Debtors
and Magna have agreed to enter into a stipulation.
Pursuant to the parties' stipulation, Magna agrees to pay to the
Debtors the agreed-upon net difference between the Magna
Prepetition Debt and the Lear Prepetition Debt, which amount is
calculated to be $439,101, within four days after the Effective
Date. Magna and Lear agree to promptly reconcile and pay or
offset the remaining difference between their figures for the
Magna Prepetition Debt and the Lear Prepetition Debt.
The Stipulation further provides that Magna is granted relief
from the automatic stay provisions under Section 362 of the
Bankruptcy Code in order to effectuate set-offs of the Lear
Prepetition Debt against the Magna Prepetition Debt.
Upon Magna's payment of the Net Amount, Debtors, on behalf of
themselves, their bankruptcy estates, and their successors and
assigns waive, release and forever discharge Magna from the Magna
Prepetition Debt.
Upon Magna's payment of the Net Amount and any additional amounts
owed upon completion of the reconciliation, Magna, its affiliates
and their successors and assigns waive, release and forever
discharge the Debtors from the Lear Prepetition Debt.
In exchange for Magna's payment of the Net Amount and any
additional amounts owed upon completion of the reconciliation,
the Debtors, on behalf of themselves, their bankruptcy estates,
and their successors and assigns, waive, release and forever
discharge Magna, and each of its parents, affiliates,
subsidiaries, successors and assigns, from any and all claims
relating in any way to any amounts paid to or transfers made to
any of the Magna Entities prior to the Petition Date.
About Lear Corp
Lear Corporation -- http://www.lear.com/-- is one of the world's
leading suppliers of automotive seating systems, electrical
distribution systems and electronic products. The Company's
products are designed, engineered and manufactured by a diverse
team of 80,000 employees at 210 facilities in 36 countries.
Lear's headquarters are in Southfield, Michigan, and Lear is
traded on the New York Stock Exchange under the symbol [LEA].
Outside the United States, Lear has subsidiaries in Germany,
Luxembourg, Sweden, Singapore, China, India and Mexico, among
others.
Lear Corporation and its affiliates filed for Chapter 11 on
July 7, 2009 (Bankr. S.D.N.Y. Case No. 09-14326). Affiliates part
of the Chapter 11 filing include Lear South Africa Limited, Lear
Corporation (Germany) Ltd., Lear Corporation Canada Ltd., Lear
Mexican Holdings Corporation, and Lear South American Holdings
Corporation.
Attorneys at Kirkland & Ellis LLP, serve as the Debtors'
bankruptcy counsel. McCarthy Tetrault LLP has been engaged as
CCAA counsel. Bodman LLP has been hired as special Michigan
counsel. Winston & Strawn LLP and Brooks Kushman P.C. have also
been tapped as special counsel. Alvarez & Marsal North America,
LLC, is the Debtors' restructuring advisors. Ernst & Young LLP is
the Debtors' auditors and tax advisors. Kurtzman Carson
Consultants LLC is the Debtors' claims and notice agent. Simpson
Thacher & Bartlett LLP represents JP Morgan, as admin. agent for
senior secured lenders and DIP lenders.
As of May 30, 2009, Lear has assets of $1,270,800,000 against
debts of $4,536,000,000.
Bankruptcy Creditors' Service, Inc., publishes Lear Bankruptcy
News. The newsletter tracks the Chapter 11 proceedings undertaken
by Lear Corp. (http://bankrupt.com/newsstand/or 215/945-7000)
LEAR CORP: Terms of Winston Retention Modified
----------------------------------------------
Bankruptcy Judge Allan Gropper has authorized Lear Corp. to modify
the terms of retention of Winston & Strawn LLP.
On the Petition Date, the Debtors filed with the Court their
application, pursuant to Section 327(e) and 329 of the Bankruptcy
Code, authorizing the employment and retention of Winston &
Strawn LLP as their special corporate and finance counsel.
The Debtors relate that Winston & Strawn has represented them for
more than 15 years. Since January 2007, the Debtors have been
compensating Winston & Strawn in accordance with the Services
Agreement which, among other things, provides that the Debtors
will pay Winston & Strawn a fixed fee for certain services. In
addition, prior to the Petition Date, Winston & Strawn gave the
Debtors an hourly rate discount and a 5% discount on total fees
incurred for services billed on an hourly basis.
At the behest of the Debtors, the Court has aprpoved the
modification of the terms of Winston & Strawn's retention to
incorporate these terms:
* for Winston & Strawn's services relating to Fixed Fee
Matters, the Debtors will pay Winston & Strawn the fixed fee
for each matter type as set forth in the Services Agreement,
payable in arrears on a quarterly basis;
* expenses relating to Fixed Fee Matters will be reimbursed on
a quarterly basis;
* with respect to Hourly Fee Matters, Winston & Strawn
will bill the Debtors based on the discounted hourly rates
applicable to specific Winston & Strawn attorneys which
rates are set forth in the Lear Billing Guidelines; and
* with respect to Hourly Fee Matters, Winston & Strawn will
voluntarily reduce its total fees billed by 5%.
The fixed fee matters and the fees charged for all services
rendered in connection with these matters are:
(a) Corporate Governance and SEC Reporting. Winston & Strawn
will continue to provide, at a fixed fee in the amount of
$400,000 per annum (subject to a 5% discount), a group of
attorneys to review and make recommendations with respect
to Lear's U.S. organizational documents and corporate
governance policies, ensure compliance with SEC and NYSE
corporate governance standards, assist in the preparation
and review of all SEC and NYSE filings, attend and assist
in the preparation for Board of Director, Shareholder and
Disclosure Committee meetings, review earnings releases,
scripts and investor presentations, advise management and
the Board of Directors on responses to ordinary course
shareholder proposals and requests, assist in any ordinary
course SEC reviews or information/document requests,
perform ordinary course internal investigations when
requested by Lear and perform any other ordinary course
service necessary to provide appropriate counseling to
Lear with respect to corporate governance and SEC
reporting.
(b) Financing and Corporate Transactions (Advisory). Winston
& Strawn will continue to provide, at a fixed fee in the
amount of $240,000 per annum (subject to a 5% discount), a
group of attorneys to advise Lear on its tax, financing
and corporate transaction needs including:
(i) ongoing day-to-day administrative matters and
interpretation issues under Lear's credit facilities,
any factoring facilities, indentures, and off-
balance-sheet financing facilities those as notices
and interpretive questions as to the
permissibility of various proposed actions or
transactions that arise in the ordinary course of
Lear's business;
(ii) providing structuring advice on corporate
transactions like acquisitions and divestitures or
joint ventures to comply with Lear's credit
facilities, any factoring facilities, indentures, and
off-balance-sheet financing facilities;
(iii) providing structuring advice on potential capital
markets transactions and options for Lear in
addressing upcoming debit maturities;
(iv) preparing and reviewing confidentiality agreements
for potential acquisitions, divestitures and joint
ventures;
(v) preparing and reviewing indications of interest and
letters of intent for potential acquisitions,
divestitures and joint ventures;
(vi) reviewing investment banking engagement letters and
similar arrangements;
(vii) interpretation issues pertaining to Lear's completed
acquisitions, divestitures and joint ventures,
including potential indemnity claims and working
capital issues; and
(viii) performing research regarding publicly available
precedent acquisition documents and securities
offering documents.
(c) Executive Compensation and Employee Benefits. Winston &
Strawn will continue to provide, at a fixed fee in the
amount of $600,000 per annum (subject to a 5% discount), a
group of attorneys to provide advice regarding Lear's
employee benefits and executive compensation needs
including:
(i) drafting of, and advice related to, Long-Term Stock
Incentive Plan and forms of award agreements and
deferral elections;
(ii) drafting and filing of registration statements and
prospectuses for Long-Term Stock Incentive Plan and
401(k) plans;
(iii) reviewing of Form 11-K filings for 401(k) plans;
(iv) drafting and reviewing of and advice related to,
executive employment agreements and severance
arrangements;
(v) drafting and advice related to the Annual Incentive
Compensation Plan, including annual setting of
targets and payout of bonuses;
(vi) providing general advice with respect to Sections
162(m) and 409A of the Internal Revenue Code for all
of the above-referenced plans and arrangements;
(vii) review of compliance with NYSE and ISS policies and
requirements for all of the above-referenced plans
and arrangements;
(viii) preparing the Annual Proxy Statement and review of,
and providing advice related to, executive
compensation disclosure under proxy rules and other
federal securities regulations;
(ix) preparing Compensation Committee resolutions,
presentations and supporting materials;
(x) conducting fiduciary training for, and providing
general advice related to, the Employee Benefits
Committee;
(xi) preparing updates and making presentations on SEC,
IRS and DOL legal developments;
(xii) preparing for and attending semi-annual meetings
with Buck Consultants;
(xiii) reviewing of equity award policy and procedures;
(xiv) providing advice regarding the Outside Directors
Compensation Plan; and deferral elections; and
(xv) providing advice on 401(k) Plans, ESSP, Pension
Plans and Health and Welfare Plans.
The Debtors pay Winston & Strawn an annual fixed fee in
connection with each Fixed Fee Matter. The annual fixed fees are
payable in equal quarterly installments. The Debtors request
that they be permitted to pay Winston & Strawn the annual fixed
fees for the Fixed Fee Matters in four equal installments, each
quarterly installment payable upon the Court's approval of
Winston & Strawn's quarterly fee application. In addition, the
Debtors request that the Court allow Winston & Strawn to maintain
approximate time records in connection with the Fixed Fee Matters
and to include the time records in Winston & Strawn's quarterly
fee applications.
For hourly fee matters, the Debtors request modification of
Winston & Strawn's retention so that the Debtors may compensate
Winston & Strawn at the discounted hourly rates. The hourly fee
matters include, without limitation, these matters:
(a) Chamberlain Group. Winston & Strawn represents the
Debtors in connection with certain patent litigation.
(b) Capital Structure Advice. Winston & Strawn represents the
Debtors in connection with certain corporate and finance
matters that arise in connection with the Debtors' Chapter
11 reorganization.
(c) Derivative Litigation. Winston & Strawn represents the
Debtors in connection with certain shareholder litigation.
(d) Tax Matters. Winston & Strawn advises the Debtors
regarding applicable tax laws and regulations.
(e) IAC Equity Investment. Winston & Strawn advises the
Debtors regarding matters pertaining to the Debtors'
investment in International Automotive Components.
(f) Corporate Transaction Review. Winston & Strawn advises
the Debtors' regarding their consideration of possible
acquisitions and joint ventures.
A full-text copy of Winston's Services Agreement is available for
free at:
http://bankrupt.com/misc/Lear_WinstonServicesAgreement.pdf
About Lear Corp
Lear Corporation -- http://www.lear.com/-- is one of the world's
leading suppliers of automotive seating systems, electrical
distribution systems and electronic products. The Company's
products are designed, engineered and manufactured by a diverse
team of 80,000 employees at 210 facilities in 36 countries.
Lear's headquarters are in Southfield, Michigan, and Lear is
traded on the New York Stock Exchange under the symbol [LEA].
Outside the United States, Lear has subsidiaries in Germany,
Luxembourg, Sweden, Singapore, China, India and Mexico, among
others.
Lear Corporation and its affiliates filed for Chapter 11 on
July 7, 2009 (Bankr. S.D.N.Y. Case No. 09-14326). Affiliates part
of the Chapter 11 filing include Lear South Africa Limited, Lear
Corporation (Germany) Ltd., Lear Corporation Canada Ltd., Lear
Mexican Holdings Corporation, and Lear South American Holdings
Corporation.
Attorneys at Kirkland & Ellis LLP, serve as the Debtors'
bankruptcy counsel. McCarthy Tetrault LLP has been engaged as
CCAA counsel. Bodman LLP has been hired as special Michigan
counsel. Winston & Strawn LLP and Brooks Kushman P.C. have also
been tapped as special counsel. Alvarez & Marsal North America,
LLC, is the Debtors' restructuring advisors. Ernst & Young LLP is
the Debtors' auditors and tax advisors. Kurtzman Carson
Consultants LLC is the Debtors' claims and notice agent. Simpson
Thacher & Bartlett LLP represents JP Morgan, as admin. agent for
senior secured lenders and DIP lenders.
As of May 30, 2009, Lear has assets of $1,270,800,000 against
debts of $4,536,000,000.
Bankruptcy Creditors' Service, Inc., publishes Lear Bankruptcy
News. The newsletter tracks the Chapter 11 proceedings undertaken
by Lear Corp. (http://bankrupt.com/newsstand/or 215/945-7000)
LEHMAN BROTHERS: Metavante Loses Bid to Stay $6M Lehman Ruling
--------------------------------------------------------------
Law360 reports that a bankruptcy judge on Friday rejected efforts
by Metavante Corp. to change or stay enforcement of a September
ruling that the company owed Lehman Brothers Special Financing
Inc. more than $6.6 million in payments stemming from a
prepetition swap agreement between the two companies.
As reported by the TCR on Oct. 16, 2009, Metavante asked the U.S.
Bankruptcy Court for the Southern District of New York to issue a
ruling "staying the effect" of a prior order compelling Metavante
to observe the terms of their interest rate swap agreement until
LBSF assumes or rejects the agreement. The Debtors filed the
motion after Metavante allegedly refused to make payments as
required under the deal.
Metavante sought a stay of the order after it received a letter
from LBSF on October 5, 2009, demanding immediate payment of
$11,085,554, plus default interest in the sum of $662,915.
Aside from a stay, Metavante asked the Court to amend the prior
order that directed it to honor its agreement with LBSF.
Metavante wanted a clarification of what are the Debtors' future
obligations to the company and the precise amount that Metavante
owes as default interest.
Metavante's attorney, Bruce Arnold, Esq., at Whyte Hirschboeck
Dudek S.C., in Milwaukee, Wisconsin, says the court order does
not specify the assurances the Debtors are required to provide to
Metavante as protection in case interest rates change in favor of
the company.
"Metavante has absolutely no assurance that the Debtors will not
simply delay the decision to assume or reject until the moment
that interest rates become unfavorable to them," Mr. Arnold says.
According to Mr. Arnold, the only way for the Court to protect
Metavante's interests is to order that the payments due be held
in an interest-bearing escrow account, which the company and the
Debtors can use to net out any payments due after the Debtors
have made their decision.
The Debtors countered that there is no law that requires LBSF to
provide "adequate assurance of future performance" on a contract
that has not been assumed.
"By demanding that LBSF provide adequate assurance of future
performance of its executory contractual commitments as a
precondition to Metavante's performance, Metavante essentially
seeks to enforce the terms of the agreement against LBSF," LBSF
counsel Richard Slack, Esq., at Weil Gotshal & Manges LLP, in New
York, argued. "Not only is that contrary to the Court's decision
but it also would effectively strip LBSF of its right to assume
or reject the agreement," he says.
LBSF also opposed the proposed stay. "Metavante must demonstrate
a cognizable harm that it would suffer if its motion for a stay is
denied. Metavante's bald assertions that the payment of money
will cause it irreparable harm do not suffice, Mr. Slack said.
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: Hedge Fund Clients to Get $3.3 Billion Payout
--------------------------------------------------------------
Mr. Justice Briggs at the Royal Courts of Justice in London has
entered a ruling that could result to a $3.3 billion payout to
hedge funds that were clients of Lehman Brothers' London brokerage
unit Lehman Brothers International Europe Inc.
At least $1.8 billion was received by LBIE from client holdings
since going into administration. The ultimate amount will as much
as $3.3 billion "and rising on a daily basis," Christopher
Braithwaite of Simmons & Simmons LLP in London, said in a
statement.
PricewaterhouseCoopers, the administrators of Lehman's European
units, sought guidance with respect to the treatment of certain
money received by LBIE after the time it entered administration.
The Joint Administrators sought directions from the Court as a
result of the uncertainty surrounding the competing interests of
trust property claimants and the general estate.
RAB Market Cycles (Master) Fund Limited as prime brokerage client
respondent, said that the funds collected by PwC is client money.
Simmons & Simmons, on behalf of RAB Market, argued that post-
administration cash derived from securities held by LBIE as
custodian was held on trust and as client money under the FSA's
client money rules for the benefit of the relevant prime brokerage
clients.
Hong Leong Bank Berhad, as representative respondent for the
general estate creditors, argued on the other hand that under the
prime brokerage agreement with LBIE, the securities and the post-
administration cash derived from them were not held on trust but
should form part of LBIE's general estate available to all LBIE's
general creditors.
Mr. Justice Briggs entered a ruling in favor of the prime
brokerage client respondent, holding that Post-Administration
Money which is the subject of the Application is held on trust by
LBIE for the relevant client and should not be treated as LBIE
money forming part of the general estate. HLBB, the
representative respondent for the general estate, has not sought
permission to appeal.
Christopher Braithwaite, Esq., at Simmons & Simmons, said in a
statement, "The application raised a number of novel and
interesting issues including the application of contract, trust
and insolvency laws to modern-day trading arrangements and
contracts. The sums involved were substantial (currently $3.3bn
and rising on a daily basis) and the outcome will affect many
funds who used LBIE as a prime broker. We were delighted to
represent one of the two respondents to the application and obtain
a favourable result for prime brokerage clients."
Mr. Braithwaite added, "The decision represents a major step
forward in the administration of LBIE and for those of LBIE's
prime brokerage clients who have been seeking the return of
securities and cash trapped in LBIE since its administration on 15
September 2008."
The Simmons & Simmons team was led by financial markets litigation
partners Christopher Braithwaite and Robert Turner, assisted by
lead associates Jonathan Joseph and Gerard Heyes. Financial
services partners Darren Fox and Allan Yip provided regulatory
advice. Restructuring and insolvency partner, Peter Manning also
advised. Counsel for the respondent fund were Jules Sher QC of
Wilberforce Chambers and Sharif Shivji of 4 Stone Buildings.
Bankhaus Money
PwC provided an update as to the status of client monies deposited
with Lehman Brothers Bankhaus AG prior to the date of
Administration.
About US$1 billion of client monies were deposited for LBIE with
Bankhaus which was approximately 50% of the total pre-
administration client money held by LBIE. Bankhaus is an
affiliate of LBIE and had been used to deposit client monies over
the preceding year.
On November 12, 2008, BaFin announced that insolvency proceedings
had been commenced in relation to Bankhaus. A claim on behalf of
LBIE clients was filed with the Bankhaus Administrator on
February 3, 2009 to recover this deposit.
The first Bankhaus creditors' meeting was held on 17 March 2009.
One of the Joint Administrators was in attendance to represent
LBIE, however, LBIE was unsuccessful in securing a position on
Bankhaus' creditors' committee. A decision on the status and
ranking of LBIE's US$1 billion Client Money claim was expected on
7 July 2009. However, the Bankhaus Administrator put forward a
proposal to delay its decision on adjudicating LBIE's claim to
allow Bankhaus to further consider the underlying facts relating
to the US$1 billion of client monies. The Administrators agreed
to defer the claim adjudication until 20 October 2009.
In the intervening period, the Joint Administrators continued to
meet with the Bankhaus Administrator to agree facts and
contractual agreements between LBIE and Bankhaus including:
* Chronological analysis of the movement in the account into
which the US$1 billion was deposited; and
* Posting of the US$1 billion of client monies in Bankhaus'
general ledger.
In addition, the Joint Administrators have presented the facts
supporting LBIE's Client Money claim to the FSA, the Bank of
England and HM Treasury to ensure that the Client Money claim
receives the appropriate attention.
At the second Bankhaus' creditors' committee meeting on October
20, 2009, the Bankhaus Administrator stated that the claim on
behalf of LBIE clients for recovery of the client monies was
rejected.
The Joint Administrators do not agree with the decision of the
Bankhaus Administrator. The Joint Administrators will now look to
challenge this in the German Courts. The ultimate determination of
this challenge may take some time.
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 BOTHERS: To Return to U.S. Mortgage Market Through Unit
--------------------------------------------------------------
Lehman Brothers Holdings Inc. is set to return to funding home
loans through its Aurora Loan Services unit, Bloomberg News
reported, citing people familiar with the matter said. Aurora,
which helped make Lehman the top underwriter of mortgage bonds
during the housing boom, has started hiring staff for the effort,
said the people who declined to be identified because the plan
isn't public.
According to Bloomberg, the expansion comes even as New York-based
Lehman is shrinking through asset sales, 13 months after filing
for the biggest bankruptcy in history and selling its North
American investment-banking unit to Barclays Plc. While Aurora
will be forced to focus on the government-backed mortgages now
accounting for 90% of new home loans, rather than the riskier debt
it specialized in as recently as two years ago, reduced
competition has made that market more profitable.
"For the ones that are left, there's opportunity," Steve Jacobson,
chief executive officer of Madison, Wisconsin-based Fairway
Independent Mortgage Corp., said in an interview. His originations
soared 67 percent from a year earlier to $2.6 billion in the first
nine months of 2009.
Less competition has boosted per-loan profits, to $1,088 in the
first quarter from $657 in 2004, according to Mortgage Bankers
Association studies. The difference between rates on typical 30-
year mortgages and 10-year Treasuries has widened to
1.8 percentage point, compared with an average of 1.27 percentage
point in the five years through 2007, according to data compiled
by Bloomberg and Bankrate.com.
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)
LINENS 'N THINGS: Noteholders Can't Block Gardere Fees
------------------------------------------------------
Law360 reports that wading into a rankling dispute over Linens 'N
Things' wind-down budget, a bankruptcy court has rejected the
noteholder committee's attempt to block payment of Gardere Wynne
Sewell LLP's fees, reprimanding the committee for evasive
discovery tactics.
Headquartered in Clifton, New Jersey, Linens 'n Things, Inc. --
http://www.lnt.com/-- was the second largest specialty retailer
of home textiles, housewares and home accessories in North
America. As of Sept. 30, 2008, Linens 'n Things operated 411
stores in 47 states and seven provinces across the United States
and Canada. Linens 'n Things was acquired by private
equity firm Apollo Management in 2006.
On May 2, 2008, these Linens entities filed Chapter 11 petition
(Bankr. D. Del.): Linens Holding Co. (08-10832), Linens 'n Things,
Inc. (08-10833), Linens 'n Things Center, Inc. (08-10834),
Bloomington, MN., L.T., Inc. (08-10835), Vendor Finance, LLC (08-
10836), LNT, Inc. (08-10837), LNT Services, Inc. (08-10838), LNT
Leasing II, LLC (08-10839), LNT West, Inc. (08-10840), LNT
Virginia LLC (08-10841), LNT Merchandising company LLC (08-10842),
LNT Leasing III, LLC (08-10843), and Citadel LNT, LLC (08-10844).
Judge Christopher S. Sontchi presides over the case.
Mark D. Collins, Esq., John H. Knight, Esq., and Jason M. Madron,
Esq., at Richards, Layton & Finger, P.A., are Linens 'n Things'
bankruptcy counsel. The Debtors' special corporate counsel are
Holland N. O'Neil, Esq., Ronald M. Gaswirth, Esq., Stephen A.
McCaretin, Esq., Randall G. Ray, Esq., and Michael S. Haynes,
Esq., at Morgan, Lewis & Bockius, LLP. The Debtors'
restructuring management services provider is Conway Del Genio
Gries & Co., LLC. The Debtors' CRO and Interim CEO is Michael F.
Gries, co-founder of Conways Del Genio Gries & Co., LLC. The
Debtors' claims agent is Kurtzman Carson Consultants, LLC. The
Debtors' consultants are Asset Disposition Advisors, LLC, and
Protivit, Inc. The Debtors' investment bankers are Financo, Inc.,
and Genuity Capital Markets.
LYONDELL CHEMICAL: Creditors Want Broad Mandate for Examiner
------------------------------------------------------------
According to Law360, creditors of Lyondell Chemical Co. have asked
a judge to give an examiner in the chemical company's bankruptcy a
broad mandate to fight what they say are Lyondell's attempts to
"whitewash" numerous conflicts in the case.
The Official Committee of Unsecured Creditors in Lyondell Chemical
Company's cases has asked the Bankruptcy Court to order the
appointment of an examiner to investigate whether Len Blavatnik
and lenders from the chemical maker's 2007 buyout are unfairly
influencing its bankruptcy.
The Creditors Committee asserts that Lyondell needs an independent
examiner because Blavatnik, chairman of Access Industries Holding
LLC, still controls the Company. The examiner, according to the
panel, should probe why the Company wouldn't refinance its
$8 billion bankruptcy loan, and how Mr. Blavatnik and lenders who
worked with him in 2005 will also fund a rights offering that
includes a "forced settlement" of the creditors' lawsuit against
them.
The U.S. trustee is supporting the Creditors Committee's call to
appoint an examiner in the Chapter 11 cases.
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)
MANSTONE COUNTERTOPS: Case Summary & 7 Largest Unsecured Creditors
------------------------------------------------------------------
Debtor: Manstone Countertops LLC
2927 N Norfolk Street
Mesa, AZ 85215
Bankruptcy Case No.: 09-26913
Chapter 11 Petition Date: October 22, 2009
Court: United States Bankruptcy Court
District of Arizona (Phoenix)
Judge: Sarah Sharer Curley
Debtor's Counsel: Robert M. Cook, Esq.
Law Offices Of Robert M. Cook PLLC
219 W Second St
Yuma, AZ 85364
Tel: (928) 782-7771
Fax: (928) 782-7778
Email: robertmcook@yahoo.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
A full-text copy of the Debtor's petition, including a list of its
7 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/azb09-26913.pdf
The petition was signed by David R. Robinson, member of the
Company.
MASONITE INT'L: Stipulation Resolving Penske Truck Leasing Claim
----------------------------------------------------------------
Tyranashay McNeil filed a Second Amended Complaint in her
capacity as the Administrator of the Estate of Wilbert McNeil,
Jr., deceased, alleging, among other things, that Penske Truck
Leasing Co., L.P.'s negligence proximately caused Wilbert
McNeil's death on March 13, 2006. The Civil Action is currently
pending in the Circuit Court of the City of Newport News,
Virginia, Docket No. CL06-01 1187-PT.
Penske filed a Third-Party Complaint in the Civil Action alleging
negligence by and seeking contribution and indemnification from
Masonite Corporation.
Masonite, Penske, and Tyranashay McNeil reached a settlement
agreement whereby Masonite's insurance carrier would pay $75,000
on Masonite's behalf in full settlement of any claims against
Masonite arising from or related to the Civil Action.
The damages claimed by the Penske against Masonite in the Civil
Action and the amounts to be paid under the Settlement Agreement
may be within the scope of the coverage of one of Masonite'
policies issued by certain of Masonite's insurance carriers.
Masonite does not admit any liability or the validity of any
damages with respect to the Claims, however Masonite has
authorized and instructed its insurance carriers to consummate
the Settlement Agreement and pay $75,000 to Penske on Masonite's
behalf.
Because of the Settlement Agreement, Penske is willing to waive
its right to collect on any Claims against the Reorganized
Debtors and agrees to seek recovery to satisfy the Claims solely
from any insurance coverage that may be available under a Policy.
Accordingly, Masonite and Penske entered into a stipulation which
was later approved by the Court, wherein:
(a) Masonite agrees to a limited waiver of the Discharge
Injunction solely to permit consummation of the Settlement
Agreement; provided, however, that nothing in the
Settlement Agreement may be enforced against the
Reorganized Masonite Debtors;
(b) In the event that the Settlement Agreement is not
consummated, Masonite agrees to a limited waiver of the
Discharge Injunction solely to permit Penske to pursue the
Claims and litigate the Civil Action including the entry
of judgment; provided, however, that no judgment or
settlement based on the Claims or arising from the Civil
Action may be enforced against the Reorganized Debtors;
provided, however, nothing in the Stipulation bars
enforcement of any claim or judgment against the Debtors'
insurers;
(c) The Claimant agrees to collect all money or other forms of
remuneration or relief to which Penske may be entitled in
connection with the Settlement Agreement solely from the
applicable insurance carriers under a Policy, and Masonite
agrees to cooperate with the Claimant in consummating the
Settlement Agreement and collecting the $75,000 from its
insurance carriers pursuant to the Settlement Agreement;
(d) Penske agrees that nothing in the Stipulation will be
construed to change, limit, or otherwise modify any of
the provisions of any Policy, including deductibles,
self-insured retentions, retention obligations or
limitations, definitions, exclusions, conditions, and
uninsured claims, nor will the Stipulation be construed
to be grounds for Masonite's insurance carriers to refuse
to consummate the Settlement Agreement and pay the
$75,000; and
(e) Penske forever releases and discharges its right to
collect from the Reorganized Debtors claims, causes of
action, setoffs, and liabilities for any obligations
relating in any way to the Claims, the Civil Action, or
the Settlement Agreement.
About Masonite International
Based in Ontario, Canada, Masonite International Corporation --
http://www.masonite.com/-- (TSE:MHM) is a vertically integrated
producer, manufacturing key components of doors, including
composite molded and veneer door facings, glass door lites and cut
stock. The Company provides these products to its customers in
more than 70 countries around the world. The Company is a wholly
owned subsidiary of Masonite International Inc. It offers a range
of interior and exterior doors. Masonite Canada operates Masonite
International's Canadian subsidiaries, well as certain other non-
United States subsidiaries.
Masonite International, Inc., and six affiliates filed petitions
on March 16, 2009, before the Ontario Superior Court of Justice
(Commercial List) under the Companies' Creditors Arrangement Act.
The Honorable Justice Campbell presides over the CCAA proceedings.
Derrick Tay and Orestes Pasparakis at Ernst & Young, Inc. serve as
monitor. Jay A. Carfagnini, Esq., and Brian F. Emprey, Esq., at
Goodmans LLP in Toronto, serve as the Applicants' counsel.
Masonite Corporation, based in Tampa, Florida, and several U.S.
affiliates filed for Chapter 11 bankruptcy protection on the same
day (Bankr. D. Del. Case No. 09-10844). Judge Peter J. Walsh
handles the cases. Richard M. Cieri, Esq., Jonathan S. Henes,
Esq., and Christopher J. Marcus, Esq., at Kirkland & Ellis LLP;
and Daniel J. DeFranceschi, Esq., Jason M. Madron, Esq., and
Katisha D. Fortune, Esq., at Richards, Layton & Finger, P.A.,
serve as bankruptcy counsel. The Debtors' Investment Banker and
Financial Advisor is Perella Wenberg Partners LLP; the Debtors'
Restructuring Advisors is Alvarez & Marsal North American LLC; and
the Debtors' Claims Agent is Kurtzman Carson Consultants LLC.
As of January 31, 2009, the Debtors had total assets of
$1,527,495,443 and total debts of $2,641,590,842.
The Debtors filed with the Bankruptcy Court a pre-negotiated
reorganization plan together with their petitions. The Plan
provides that Masonite's existing senior secured obligations will
be converted on a pro rata basis subject to the election of each
existing holder of Senior Secured Obligations into: (i) a new
first-priority senior secured term loan; (ii) a new second-
priority senior secured PIK loan; and (iii) 97.5% of the common
equity of the reorganized Masonite. Holders of Masonite's
existing senior subordinated notes will be allocated 2.5% of the
common equity in the reorganized Masonite plus warrants for 17.5%
of the common stock of the reorganized Company, subject to
dilution under certain conditions. Holders of Class 5 General
Unsecured Claims under the Plan will be unimpaired and is expected
to recover 100% under the Plan.
At the end of May 2009, the U.S. Court and the Ontario Court
entered orders approving Masonite's restructuring plan. The
Reorganized Debtors' Plan of Reorganization was declared effective
on June 9, 2009. All requests for payment of an administrative
claim were due July 24, 2009, which is the date that is 45 days
after the Effective Date.
Bankruptcy Creditors' Service, Inc., publishes Masonite Bankruptcy
News. The newsletter tracks the CCAA proceedings in Canada and
parallel chapter 11 proceedings in Delaware undertaken by company
and its various affiliates. (http://bankrupt.com/newsstand/or
215/945-7000)
METCALF PAVING CO: Voluntary Chapter 11 Case Summary
----------------------------------------------------
Debtor: The Metcalf Paving Co. Inc.
dba Metcalf Paving Co., Inc.
dba The Metcalf Paving Company, Inc.
dba Metcalf Paving Company Inc.
65 Lancaster Drive
Beacon Falls, Ct 06403
Bankruptcy Case No.: 09-32996
Chapter 11 Petition Date: October 23, 2009
Court: United States Bankruptcy Court
District of Connecticut (New Haven)
Judge: Lorraine Murphy Weil
Debtor's Counsel: Ira B. Charmoy, Esq.
Zeldes Needle & Cooper
1000 Lafayette Blvd
P.O. Box 1740
Bridgeport, CT 06601
Tel: (203) 333-9441
Fax: (203) 333-1489
Email: icharmoy@znclaw.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
The Debtor did not file a list of its 20 largest unsecured
creditors when it filed its petition.
The petition was signed by Jonathan S. Metcalf, president of the
Company.
MILLER BROTHERS: May Lay Off 225 Employees in Kentucky
------------------------------------------------------
Scott Sloan at The Herald-Leader reports that Miller Brothers Coal
LLC has warned its 225 workers that they might lose their jobs,
"in anticipation of an expected sale of the company assets near
the end of this year as part of its reorganization under Chapter
11 of the bankruptcy code".
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.
MOBILE BAY: To File Reorg. Plan This Week; SaltAire to be Revived
-----------------------------------------------------------------
Kathy Jumper at Press-Register reports that Mobile Bay Investments
LLC would be filing its reorganization plan this week, while
builders and realtors plan to bring a crowd to Mobile Bay
Investments LLC's town of SaltAire, which was shut down last year,
through haunted hayrides set for October 23-25 and a Fall Festival
on October 25. According to Press-Register, about $12 million to
$15 million has been invested in the project. Court documents say
that at least $2.6 million in liens filed against the project by
more than 20 lien holders. Press-Register states that Bay
Mortgage Investors LLC, the first mortgage holder with almost
$9 million loaned to the project, was set to foreclose on the
property when Mobile Bay filed for bankruptcy protection. Press-
Register relates that Regions Bank, which has a $6.5 million
second mortgage, has several times scheduled and then canceled
foreclosure sales on its share of the land.
Based in Mobile, Alabama, Mobile Bay Investments L.L.C. filed for
Chapter 11 protection on July 22, 2009 (Bankr. S.D.N.Y. Case No.
09-13322). When the Debtor sought protection from its creditors,
it both listed assets and debts between $10 million and
$50 million.
MSGI SECURITY: Lenders Agree to Forbearance Until December 15
-------------------------------------------------------------
MSGI Security Solutions, Inc., on October 22, 2009, entered into a
Forbearance Agreement with certain lenders.
The lenders currently hold securities purchase agreements dated
December 13, 2006, May 21, 2007, January 10, 2008 and August 22,
2008, pursuant to which the company issued to each purchaser 8%
senior secured convertible notes and 6% senior secured convertible
notes.
Under the terms of the Forbearance Agreement, the lenders have
agreed to forbear from exercising any rights and remedies, which
they may hold with respect to any instance or event of default,
which may have occurred under the terms of the various debt
instruments. The term of this Forbearance Agreement extends until
December 15, 2009.
As reported by the Troubled Company Reporter on October 19, Amper,
Politziner & Mattia, LLP, in Edison, New Jersey, expressed
substantial doubt about MSGI's ability to continue as a going
concern after auditing the Company's consolidated financial
statements for the years ended June 30, 2009, and 2008. The
auditing firm reported that the Company has suffered recurring
losses from operations, and negative cash flows from operations,
and has a substantial amount of notes payable due on demand or
within the next 12 months and has very limited capital resources.
MSGI reported a net loss of $7,975,006 on total revenue of
$282,000 for the year ended June 30, 2009, compared to a net loss
of $20,178,354 on total revenue of $4,044,560 for the year ended
June 30, 2008.
At June 30, 2009, the Company's consolidated balance sheet showed
$2,046,211 in total assets and $15,099,057 in total liabilities,
resulting in a $13,052,846 stockholders' deficit.
The Company's consolidated balance sheet at June 30, 2009, also
showed strained liquidity with $689 in total current assets
available to pay $15,099,057 in total current liabilities.
Full-text copies of the Company's consolidated financial
statements for the year ended June 30, 2009, are available for
free at http://researcharchives.com/t/s?4703
MSGI Security Solutions, Inc. (Other OTC: MSGI) --
http://www.msgisecurity.com/-- is a provider of proprietary
solutions to commercial and governmental organizations. The
Company is developing a global combination of innovative emerging
businesses that leverage information and technology. The Company
is headquartered in New York City where it serves the needs of
counter-terrorism, public safety, and law enforcement and is
developing new technologies in nanotechnology and alternative
energy as a result of its recently formed relationship with The
National Aeronautics and Space Administration (NASA).
MURRAY ENERGY: Moody's Affirms 'Caa1' Corporate Family Rating
-------------------------------------------------------------
In response to a revised transaction, Moody's Investors Service
affirmed the Caa1 corporate family rating and probability of
default rating on Murray Energy Corporation while also affirming
the Caa1 rating on $500 million of senior secured second lien
notes, recently upsized from the originally proposed $440 million
transaction. Simultaneously, Moody's withdrew its B1 rating on
the proposed $25 million revolving credit facility because that
transaction was cancelled. There is no change in the expected use
of proceeds with proceeds from the notes issuance and cash on hand
expected 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.
For further information on the ratings on Murray, please refer to
Moodys.com.
Under the revised capital structure, Murray will have no committed
revolving credit facility and no material financial maintenance
covenants. However, the notes maintain a $25 million senior
secured carve-out feature which could provide for a future credit
facility.
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,
annual production of approximately 25 million tons, and, in
Moody's opinion, the weak external liquidity given the absence of
a committed revolving credit facility. 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 affected include:
-- Corporate Family Rating Affirmed at Caa1
-- Probability of Default Rating Affirmed at Caa1
-- $25 million first lien senior secured credit facility due
2012 rating of B1 (LGD 1; 4%) withdrawn
-- 10.25% $500 million second lien senior secured note due 2015
rating of Caa1 affirmed (point estimate changed to LGD 3; 44%
from LGD 3; 46%)
-- Outlook remains stable
The last rating action was on October 16, 2009, when the ratings
of Murray Energy Corporation were assigned, including the Caa1
corporate family rating.
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 assigned and unassigned
reserves.
MUZAK HOLDINGS: Unit Files Amended Schedules of Assets & Debts
--------------------------------------------------------------
Muzak LLC, a debtor-affiliate of Muzak Holdings LLC, filed with
the U.S. Bankruptcy Court for the District of Delaware its amended
schedules of assets and liabilities disclosing:
Name of Schedule Assets Liabilities
---------------- ----------- -----------
A. Real Property $254,409
B. Personal Property $19,270,080
C. Property Claimed as
Exempt
D. Creditors Holding
Secured Claims $101,325,000
E. Creditors Holding
Unsecured Priority
Claims $0
F. Creditors Holding
Unsecured Non-priority
Claims $352,943,695
----------- -----------
TOTAL $119,524,489 $454,268,695
Headquartered in Fort Mill, South Carolina, Muzak Holdings LLC --
http://www.muzak.com/-- creates a variety of music programming
from a catalog of over 2.6 million songs and produces targeted
custom in-store and on-hold messaging. Through its national
service and support network, Muzak designs and installs
professional sound systems, digital signage, drive-thru systems,
commercial television and more. The Company and 14 affiliates
filed for Chapter 11 protection on February 10, 2009 (Bankr. D.
Del. Lead Case No. 09-10422). Moelis & Company is serving as
financial advisor to the Company. Kirkland & Ellis LLP is the
Debtors' counsel. Klehr Harrison Harvey Branzburg & Ellers has
been tapped as local counsel. Epiq Bankruptcy Solutions LLC
serves as claims and notice agent. Muzak's petition listed assets
of $324 million against debt of $465 million, including
$101 million owed on a senior secured credit facility,
$220 million in senior notes and $115 million in subordinated
notes.
MXENERGY HOLDINGS: Discusses Impact of Debt & Equity Restructuring
------------------------------------------------------------------
MXenergy Holdings, Inc., on October 21, 2009, held a conference
call to discuss the financial results of the Company for its
fiscal year ended June 30.
Robi Artman-Hodge, MXenergy Holdings'EVP; Jeffrey Mayer, MXenergy
Holdings' President and CEO; and Chaitu Parikh, MXenergy Holdings'
CFO, participated in the call.
Mr. Parikh said the Company's debt and equity restructuring --
which was consummated on September 22 -- allowed the Company to
significantly reduce debt obligations and is expected to reduce
future debt service costs. In addition, certain constraints
placed on the Company by amendments to its former credit facility
have now been lifted including limitations related to its ability
to draw cash from the credit facility for operations, the maximum
amount of natural gas that the Company's allowed to retain in
inventory, the maximum amount available to the Company under the
credit facility to meet collateral requirements or other credit
needs, the amounts it can spend on marketing activities and the
types of products it can offer to customers.
MXenergy's former revolving credit and hedge facilities were due
to mature July 31.
According to Mr. Mayer, tightening credit markets, volatile energy
prices and the Company's debt structure did not permit an easy
renewing of the facility with the then current bank group.
"Instead we were left with the alternatives of selling the
company, replacing the financing facility or bringing in new
equity," Mr. Mayer said.
Mr. Mayer said as a condition of the new financing the Company
restructured its debt through a successful tender offer which
involved the following:
-- The Company's debt obligations were reduced from over
$190 million to approximately $74 million;
-- Over 95% of the old unsecured notes were replaced by new
notes with a maturity date of 2014;
-- The Company created three new classes of common stock and
issued stock to these three classes: First, the holder of
the new notes. Second, to the provider of the new
financing facility RBS Sempra and third, to the old
shareholders including preferred stockholders who
converted their preferred stock to common stock; and
-- The Company restructured its board, which now has nine
members, five of whom were nominated by the new
noteholders, one of whom was nominated by RBS Sempra and
the balance of whom represent the former common
stockholders.
The new financing facility includes a supply and hedged facility
with RBS Sempra. The Commodities Supply Facility is an exclusive
supply and hedging arrangement for both natural gas and
electricity as compared with the former facilities that included
only natural gas.
"We're very pleased with our new Commodity Supply Facility
partners and the entire organization is focused on implementing
our fiscal year 2010 business plan," Mr. Parikh said.
A full-text copy of the transcript of the Earnings Call is
available at no charge at http://ResearchArchives.com/t/s?477a
The Transcript has been selectively edited to facilitate the
understanding of the information communicated during the
conference call.
About MXenergy
MXenergy Holdings, Inc. -- http://www.mxenergy.com/-- is one of
the fastest growing retail natural gas and electricity suppliers
in North America, serving roughly 500,000 customers in 39
utility territories in the United States and Canada. The Company
was founded in 1999 to provide natural gas and electricity to
consumers in deregulated energy markets. MXenergy is a member of
the Chicago Climate Exchange and an Energy Star Partner.
The Company has indicated in a regulatory filing with the
Securities and Exchange Commission that if its restructuring
efforts are not successful, it intends to explore all other
alternatives, but would likely be required to commence a
bankruptcy proceeding.
NAILITE INT'L: Court Sets October 30 Disclosure Statement Hearing
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware will hear
on October 30, 2009, the motion of Nailite International Inc. for
the approval of the disclosure statement with respect to its
liquidating Chapter 11 plan. Objections, if any, to the approval
of the disclosure statement must be received no later than
October 23, 2009.
The Debtor has proposed a December 4, 2009 plan voting deadline.
The Bankruptcy Court has tentatively established December 21,
2009, for the confirmation hearing.
As reported on September 22, 2009, Nailite International filed a
proposed disclosure statement explaining the liquidating Chapter
11 plan projected to provide a 0.022% return to unsecured
creditors with $11.5 million in claims. Holders of equity
interest will receive nothing.
The U.S. Bankruptcy Court for the District of Delaware approved in
April the sale of substantially all of the assets of Nailite
International to Premier Exteriors, LLC. Premier is a secured
creditor of the Debtor, having purchased the Debtor's first lien
debt in January 2009, and under which Premier holds a claim of at
least $18 million. A portion of the purchase price paid by
Premier was a credit bid of $8 million. Premier also agreed to
provide as much as $400,000 to pay costs of the Chapter 11 case,
plus $250,000 earmarked for distribution to unsecured creditors.
Copies of the Plan and Disclosure Statement are available for free
at:
http://bankrupt.com/misc/Nailite_DiscStatement.pdf
http://bankrupt.com/misc/Nailite_LiquidatingPlan.pdf
About Nailite International
Headquartered in Miami, Florida, Nailite International Inc. --
http://www.nailiteinternational.com/ -- produces injection
polypropylene based cedar and masonry replica siding. The Debtor
supplies residential construction and remodeling markets through
various building materials and siding distributors. Nailite is
wholly-owned by Granham Partners, a private equity investor from
Wayne, Pennsylvania.
Nailite International filed for Chapter 11 on February 13, 2009
(Bankr. D. Del. Case No. 09-10526). Gabriel R. MacConaill, Esq.,
and Steven M. Yoder, Esq., at Potter Anderson & Corroon LLP, have
been tapped as counsel. AlixPartners LLP is also on-board as
restructuring adviser. The Garden City Group Inc. serves as
claims and notice agent. Attorneys at Lowenstein Sandler PC and
Elliot Greenleaf serve as counsel to the Creditors Committee. In
its bankruptcy petition, the Company estimated assets and debts of
between $50 million and $100 million each.
NAVISTAR INT'L: Board OKs Extra Healthcare Coverage for Caton
-------------------------------------------------------------
Navistar International Corporation on October 16, 2009, stated
that it was considering extending additional healthcare coverage
to William A. Caton, the Executive Vice President and Chief Risk
Officer of the Company, in connection with his October 31
retirement from the Company. On October 19, the Compensation
Committee of the Board of Directors of the Company approved the
extension of additional healthcare coverage to Mr. Caton and his
spouse (beyond the 36 months of coverage currently provided to him
under his Executive Severance Agreement) at 100% of the cost of
coverage rate in effect at the time, until such time as he and his
spouse are eligible for Medicare benefits and in the event that
Mr. Caton is not able to purchase comparable healthcare coverage
on his own at such time.
On October 19, 2009 the Compensation Committee of the Board of
Directors of the Company approved (1) effective November 1, the
elimination of tax gross-ups on all perquisites or other similar
payments to Section 16 Officers of the Company, including all
Named Executive Officers and (2) effective January 1, 2010, the
elimination of the excise tax gross-up upon a change in control of
the Company under the Company's Executive Severance Agreements.
About Navistar
Navistar International Corporation (NYSE: NAV) --
http://www.Navistar.com/-- is a holding company whose
subsidiaries and affiliates subsidiaries produce International(R)
brand commercial and military trucks, MaxxForce(R) brand diesel
engines, IC Bus(TM) brand school and commercial buses, Monaco RV
brands of recreational vehicles, and Workhorse(R) brand chassis
for motor homes and step vans. It also is a private-label
designer and manufacturer of diesel engines for the pickup truck,
van and SUV markets. The company also provides truck and diesel
engine parts and service. Another affiliate offers financing
services.
At July 31, 2009, the Company had $9.38 billion in total assets
and $10.66 billion in total liabilities, resulting in
$1.35 billion in stockholders' deficit. Navistar reported
$9.65 billion in total assets and $11.09 billion in total
liabilities as of April 30, 2009, resulting in $1.44 billion in
stockholders' deficit.
* * *
Navistar continues to carry Standard & Poor's Ratings Services'
'BB-' corporate credit ratings and 'BB-' issue-level rating.
Navistar caries Moody's Investors Service's 'B1' Corporate Family
Rating, 'B1' Probability of Default; and SGL-2 Speculative Grade
Liquidity rating.
NAVISTAR INT'L: Raises 2014 Convertible Notes Offering to $550MM
----------------------------------------------------------------
Navistar International Corporation on Thursday announced that it
has priced a public offering of $1 billion aggregate principal
amount of its senior notes due 2021. Navistar announced also the
pricing of its public offering of $550 million of its senior
subordinated convertible notes due 2014. The convertible notes
offering size was increased to $550 million in gross proceeds
based on market demand.
The net proceeds will be used to repay in full amounts outstanding
under its $1.1 billion term loan and $400 million synthetic
revolver senior unsecured credit facilities, which expire in
January 2012, as well as other general corporate purposes. In
connection with the convertible notes offering, Navistar has
granted the underwriters an over-allotment option, exercisable
within 13 days, to purchase up to an additional $75 million of
convertible notes.
"The deal has allowed us to improve our capital structure by
extending maturities of our debt," said A.J. Cederoth, Navistar's
executive vice president and chief financial officer.
The senior notes will pay interest semiannually at a rate of 8.25%
per annum. The convertible notes will pay interest semiannually
at a rate of 3.00% per annum and will be convertible, under
certain circumstances, into cash, shares of Navistar common stock,
or a combination of cash and shares of Navistar common stock, at
Navistar's election, at an initial conversion rate of 19.8910
shares of Navistar common stock per $1,000 principal amount of
senior subordinated convertible notes, which is equivalent to an
initial conversion price of approximately $50.27 per share of
common stock, subject to adjustment in certain circumstances.
Also in connection with the convertible notes offering, Navistar
entered into convertible note hedge transactions with separate
affiliates of certain of the underwriters (the hedge
counterparties) and also entered into warrant transactions with
the hedge counterparties.
The senior notes offering and the convertible notes offering are
being conducted as separate public offerings, although the senior
notes offering is conditioned upon the completion of the
convertible notes offering such that Navistar has sufficient net
proceeds to repay all amounts outstanding under its existing
credit facilities. The completion of the convertible notes
offering is not conditioned upon the completion of the senior
notes offering. The closing of each offering is expected to occur
on Oct. 28, 2009. Each closing is subject to customary closing
conditions.
The senior notes offering is being led by Credit Suisse, and the
convertible notes offering is being led by J.P. Morgan. The notes
are being offered and sold under Navistar's shelf registration
statement filed with the Securities and Exchange Commission on
Oct. 20, 2009, which was effective upon filing, and pursuant to
two prospectus supplements and an accompanying base prospectus
filed with the Securities and Exchange Commission in Navistar's
shelf registration statement.
A copy of the prospectus can be obtained for the senior notes by
contacting Credit Suisse at Attention: Prospectus Department, One
Madison Avenue, New York, NY 10171 (1-800-221-1037) and for the
convertible notes by contacting J.P.Morgan at Attention:
Prospectus Department, 4 Chase Metrotech Center, CS Level,
Brooklyn, NY 11245 (1-718-242-8002). Credit Suisse, BofA Merrill
Lynch, J.P. Morgan, Citi, Deutsche Bank Securities and Goldman,
Sachs & Co. are acting as joint book-runners in the senior notes
offering. J.P. Morgan, Credit Suisse, BofA Merrill Lynch, Citi,
Deutsche Bank Securities and Goldman, Sachs & Co. are acting as
joint book-runners in the convertible notes offering.
A full-text copy of the free writing prospectus related to
Navistar's proposed $1,000,000,000 aggregate principal amount of
8.25% Senior Notes due 2021 is available at no charge at:
http://ResearchArchives.com/t/s?476e
A full-text copy of the free writing prospectus related to
Navistar's proposed Offering of $550,000,000 principal amount of
3.00% Senior Subordinated Convertible Notes due 2014 is available
at no charge at http://ResearchArchives.com/t/s?476f
About Navistar
Navistar International Corporation (NYSE: NAV) --
http://www.Navistar.com/-- is a holding company whose
subsidiaries and affiliates subsidiaries produce International(R)
brand commercial and military trucks, MaxxForce(R) brand diesel
engines, IC Bus(TM) brand school and commercial buses, Monaco RV
brands of recreational vehicles, and Workhorse(R) brand chassis
for motor homes and step vans. It also is a private-label
designer and manufacturer of diesel engines for the pickup truck,
van and SUV markets. The company also provides truck and diesel
engine parts and service. Another affiliate offers financing
services.
At July 31, 2009, the Company had $9.38 billion in total assets
and $10.66 billion in total liabilities, resulting in
$1.35 billion in stockholders' deficit. Navistar reported
$9.65 billion in total assets and $11.09 billion in total
liabilities as of April 30, 2009, resulting in $1.44 billion in
stockholders' deficit.
* * *
Navistar continues to carry Standard & Poor's Ratings Services'
'BB-' corporate credit ratings and 'BB-' issue-level rating.
Navistar caries Moody's Investors Service's 'B1' Corporate Family
Rating, 'B1' Probability of Default; and SGL-2 Speculative Grade
Liquidity rating.
NCI BUILDING: Moody's Confirms Corporate Family Rating at 'B3'
--------------------------------------------------------------
Moody's Investors Service confirmed the B3 corporate family rating
of NCI Building Systems, Inc., and raised its probability of
default rating to B3/LD from Ca, following completion of the
company's balance sheet restructuring. At the same time, Moody's
withdrew the Caa1 rating on NCI's $293 million term loan, and
assigned a Caa1 rating to the company's revised $150 million term
loan. The limited default designation will be removed from NCI's
PDR after approximately three business days. These rating actions
conclude the review period that commenced on August 10, 2009. The
ratings outlook is stable.
On October 20, 2009, NCI announced that it had completed its
recapitalization, whereby the company: 1) issued $250 million of
convertible preferred stock, resulting in a 68.5% as-converted
ownership stake by Clayton, Dubilier, & Rice; 2) paid down
$143 million of its $293 million term loan, and rolled over the
remaining $150 million into a revised 4 & half-year term loan;
3) exchanged cash and common equity for its $180 million
convertible subordinated notes; and 4) entered into a new 4 &
half-year secured ABL revolving credit facility. As a result of
these transactions, NCI has eliminated approximately $323 million
of balance sheet debt, pushed out its nearest-date maturity to
2014, and addressed its near-term liquidity concerns.
At the same time, NCI's ratings are pressured by the weakness in
non-residential construction that is expected to persist
throughout 2010, the expectation that its credit metrics will
remain weak for at least the next year, and the expectation that
its heavy exposure to volatile raw material costs (principally
steel) will slow down margin growth. The company's ratings
continue to be supported by its leading industry position in
various niches of the engineered building systems and metal
components markets, its geographic and product diversity, and the
balanced mix of new construction, repair, retrofit, and other end
market uses.
The stable outlook reflects the expectation that the company will
continue to maintain capital structure discipline in the face of
challenging market conditions and declining revenues.
These ratings were affected:
-- Corporate family rating, confirmed at B3;
-- Probability of default rating, raised to B3/LD from Ca;
-- $293 million senior secured first lien term loan rating,
withdrawn;
-- $150 million senior secured first lien term loan rating, Caa1
(LGD5, 73%) assigned.
Per Moody's loss-given-default framework, NCI's $125 million ABL
revolver is ranked higher in the capital structure than is the
company's $150 million term loan, due to difference in priority of
claims. The ABL revolver carries a first priority claim on
receivables, inventory, and intangibles, and a second priority
claim on all other assets, while the term loan carries a second
priority claim on receivables, inventory, and intangibles, and a
first priority claim on all other assets. As a result of this
distinction, the term loan is rated one notch below the CFR, at
Caa1.
Moody's most recent rating action for NCI was on August 27, 2009,
at which time the company's probability of default rating was
lowered to Ca from B3 and its term loan rating was lowered to Caa1
from B2.
NCI Building Systems, Inc., is one of North America's largest
integrated manufacturers of metal products for the nonresidential
building industry. In the trailing twelve months ended August 2,
2009, the company generated revenues and adjusted EBITDA of
approximately $1.23 billion and $92 million, respectively.
NEWFIELD EXPLORATION: S&P Raises Subordinated Debt Rating to 'BB+'
------------------------------------------------------------------
Standard & Poor's Ratings Services raised the issue-level rating
on Newfield Exploration Co.'s (BB+/Stable/--) subordinated debt to
'BB+' (the same as the corporate credit rating on the company)
from 'BB-'. At the same time, S&P revised the recovery rating on
this debt to '3', indicating the expectation for meaningful (50%
to 70%) recovery in the event of a payment default, from '6'.
"This change in S&P's recovery analysis is primarily the result of
an updated valuation of the company's reserve base," said Standard
& Poor's credit analyst Amy Eddy.
S&P's issue-level rating on Newfield's senior unsecured notes
remains 'BB+' (the same as the corporate credit rating), with a
'3' recovery rating. Although numerically S&P's analysis
indicates full recovery on the senior unsecured notes following a
payment default, S&P has capped the recovery rating at '3' for
corporate entities with ratings of 'BB-' or higher because these
companies' recovery prospects are at greater risk of being
impaired by the issuance of additional priority or pari passu debt
prior to default.
S&P's corporate credit rating on Houston-based Newfield is 'BB+'
and the outlook is stable. The rating reflects the company's
participation in the highly cyclical and capital-intensive
exploration and production segment of the oil and natural gas
industry and S&P's expectations that near-term natural gas prices
are likely to remain weak. The rating also reflects the company's
competitive cost structure and good internal growth prospects.
Ratings List
Newfield Exploration Co.
Corporate Credit Rating BB+/Stable/--
Ratings Raised
Newfield Exploration Co.
To From
-- ----
Subordinated Debt BB+ BB-
Recovery Rating 3 6
NORTEL NETWORKS: Has Deal to Sell Packet Core Network for $10MM
---------------------------------------------------------------
Nortel Networks Corporation on October 26 announced that its
principal operating subsidiary, Nortel Networks Limited, and one
of its other subsidiaries, Nortel Networks Inc., have entered into
an agreement with Hitachi, Ltd. for the sale of certain assets
associated with the development of next generation packet core
network components (excluding legacy packet core components for
Nortel's GSM and UMTS businesses) for a purchase price of US$10
million. Under the agreement, the assets include software to
support the transfer of data over existing wireless networks and
the next generation of wireless communications technology,
including relevant non-patent intellectual property, equipment and
other related tangible assets, as well as a non-exclusive license
of certain relevant patents and other intellectual property.
Consummation of the transaction is subject to approval by the
United States Bankruptcy Court for the District of Delaware and
the Ontario Superior Court of Justice as well as the satisfaction
of regulatory and other customary conditions. The sale is expected
to close in 2009.
As previously announced, Nortel does not expect that the Company's
common shareholders or the NNL preferred shareholders will receive
any value from the creditor protection proceedings and expects
that the proceedings will result in the cancellation of these
equity interests.
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)
NTK HOLDINGS: Prepack Plan Confirmation Hearing Set for Dec. 4
--------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware at the
October 23 hearing said he will hold a combined hearing on
December 4, 2009, to consider (i) approval of the disclosure
statement explaining the prepackaged Chapter 11 plan and (ii)
confirmation of the Chapter 11 plan.
Companies in Chapter 11 usually seek approval of the disclosure
statement before soliciting votes on the plan, then seek
confirmation of the plan following the solicitation of votes.
However, NTK Holdings solicited votes on the plan pre-bankrutpcy.
At the Oct. 23 hearing, the judge also granted interim use of
cash.
Nortek completed its previously announced solicitation of votes
from creditors for the Prepackaged Plans on October 16, 2009. As
a result of the Solicitation, 100% of the votes cast by holders of
Nortek's 10% Senior Secured Notes due 2013, 100% of the votes cast
by holders of Nortek's 8-1/2% Senior Subordinated Notes due 2014,
and 100% of the votes cast by holders of Nortek's 9-7/8% Series A
and Series B Senior Subordinated Notes due 2011, each voted to
accept the Prepackaged Plans. Holders of indebtedness under NTK
Holdings' Senior Unsecured Credit Facility, however, did not
accept the Prepackaged Plans. Nevertheless, NTK Holdings intends
to seek confirmation of the Prepackaged Plans through the cram-
down process.
Nortek expects that the chapter 11 process will take approximately
two to three months to complete, but can give no assurance that
this time frame will be met. Nortek also stated that no
management changes are anticipated and it has no plans to sell any
of its subsidiaries.
On its effective date, following its confirmation by the
Bankruptcy Court, the Prepackaged Plans provide for these
distributions:
* Holders of 10% Notes will receive new Nortek 11% senior
secured notes and 5% of the equity in the reorganized Nortek;
holders of 8-1/2% Notes and 9-7/8% Notes will receive 93% of
the equity in the reorganized Nortek, and
* Holders of 10 3/4% Notes and indebtedness under the NTK
Credit Facility will receive 2% of the equity, and warrants
to purchase additional equity, of the reorganized Nortek.
* All other creditors are unimpaired and, if not previously
paid, will be paid in full in the ordinary course of business
under the Prepackaged Plans.
Nortek and NTK Holdings expect that the consummation of the
Prepackaged Plans will result in an approximate $1.3 billion
reduction of their outstanding indebtedness.
About NTK Holdings
NTK Holdings Inc., the parent company of Nortek Holdings and
Nortek Inc., is a diversified global manufacturer of branded
residential and commercial ventilation, HVAC and home technology
convenience and security products. NTK Holdings and Nortek offer
a broad array of products including range hoods, bath fans, indoor
air quality systems, medicine cabinets and central vacuums,
heating and air conditioning systems, and home technology
offerings, including audio, video, access control, security and
other products.
As reported by the TCR on Sept. 4, 2009, NTK Holdings, Inc., and
Nortek, Inc., entered into a restructuring and lockup agreement
with bondholders to effectuate a comprehensive restructuring of
the Company's debt under Chapter 11. When concluded, the
Agreement will eliminate approximately $1.3 billion in total
indebtednes by, among other things, exchanging debt to bondholders
for equity in the Company.
NTK Holdings Inc., together with affiliates, including Nortek
International, Inc. and Nortek Holdings, Inc., filed for Chapter
11 with a prepackaged plan accepted by all impaired creditors on
October 21, 2009 (Bankr. D. Del. Case No. 09-13611). The Company
has tapped Blackstone Group and Weil, Gotshal & Manges to aid in
its restructuring effort. Mark D. Collins, Esq., at Richards
Layton & Finger P.A., serves as local counsel. Epiq Bankruptcy
Solutions is claims and notice agent. An Ad Hoc Committee of
Nortek noteholders is being represented by Andrew N. Rosenberg,
Esq., and Brian N. Hermann, Esq., at Paul, Weiss, Rifkind, Wharton
& Garrison LLP; and William Derrough, Esq., and Adam Keil, Esq.,
at Moelis & Company.
NTK Holdings and its units have assets of $1,655,200,000, against
debts of $2,778,100,000 as of July 4, 2009.
NTK HOLDINGS: S&P Downgrades Corporate Credit Rating to 'D'
-----------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on NTK Holdings Inc., the parent company of Nortek Inc., to
'D' from 'CC'. Also, S&P lowered the issue-level rating on NTK
Holdings' 10.75% senior discount notes due 2014 to 'D' from 'C'
and Nortek's $750 million 10% senior secured notes due 2013 to 'D'
from 'CC'.
"These rating actions follow Nortek's announcement that it, along
with its domestic subsidiaries, filed voluntary petitions for
reorganization under Chapter 11 of the U.S. Bankruptcy Code," said
Standard & Poor's credit analyst Tobias Crabtree. Previously, S&P
lowered Nortek Inc. to 'D' following the building material
company's announcement that it had foregone making an interest
payment on its 8.5% senior subordinated notes due 2014.
Nortek announced it has received votes accepting their prepackaged
plans of reorganization from all voting classes of Nortek's
creditors and one voting class of NTK Holdings' creditors. Under
the terms of the agreement, Nortek's and NTK Holdings' noteholders
will exchange their debt for the combination of equity and new
notes.
In addition, Nortek announced it has in excess of $125 million of
balance sheet cash and has secured a commitment for a $250 million
asset-based revolving credit facility which will be available upon
consummation of its prepackaged plan of reorganization. As a
result, Nortek does not foresee any need for debtor-in-possession
financing.
The company expects to reduce debt by approximately $1.3 billion.
Standard & Poor's will review the outstanding recovery ratings for
Nortek and NTK Holdings pending further information regarding the
bankruptcy filing, which S&P expects to complete within the next
several days.
NUTRACEA INC: Completes Filing of Restated Financial Statements
---------------------------------------------------------------
NutraCea on October 23 said that it has completed the restatements
of its financial statements and filed with the U.S. Securities and
Exchange Commission its Annual Reports on Form 10K for fiscal
years 2006, 2007 and for the first three quarters of 2008. All
financial information presented in this press release is on a
restated basis.
The audited financial statements, based on the findings of
internal investigations initiated by the Audit Committee of the
Company's Board of Directors during December 2008, in consultation
with independent investigators retained by the Audit Committee,
have been restated to correct errors and irregularities in the
Audit Committee-led investigation and other accounting errors and
irregularities identified by the Company in the course of the
restatement period.
Jim Lintzenich, interim chief executive officer, stated, "We are
pleased to have completed our review and the filing of our
restated financials. During our investigation we identified
material weaknesses in the Company's internal controls over
financial reporting 2008. We have taken, and intend to continue
to take appropriate actions to remediate these weaknesses."
As a result of these previously announced restatements full year
revenue originally reported as $22.2 million for 2007 was restated
to revenue of $12.7 million for 2007 and revenue of $18.1 million
for full year 2006 was restated to revenue of $16.5 million. The
Company originally reported a net loss of $(11.9) million for its
full year ended December 31, 2007; the restated net loss for that
period was $(18.0) million. A net loss of $(1.6) million was
originally reported for full year 2006, following the restatement
the Company reported a net income of $302,000 for the 12 months
ended December 31, 2006.
Net revenues for the full year ended December 31, 2008, were
$35.2 million compared to net revenues of $12.7 million for full
year 2007. The Company reported a net loss of $(64.5) million or
$0.40 per share, compared to a net loss of $(18.0) million, or
$(0.14) per share for the twelve months ended December 31, 2007.
The net loss for full year 2008 was primarily due to continued low
gross margins as a result of excess capacity, a non-cash
impairment charge adjustment to goodwill of approximately
$32.3 million, and increased administrative costs as a result of
the investigations and litigation.
NutraCea expects to file its Form 10-Q for the quarter ended
March 31, 2009, in November 2009, and thereafter will file Forms
10-Q for the quarters ended June 30, 2009, and September 30, 2009.
Following the reporting of its first three quarters, the Company
will host a conference call to discuss year to date results and
provide an update on its business. The conference call date will
be announced separately.
The Company has set December 4, 2009, as the date for its Annual
Shareholders Meeting.
The Board of Directors on October 23 appointed W. John Short to
the position of Chief Executive Officer of the Company, replacing
Interim CEO James C. Lintzenich, and to fill a vacancy on the
Board of Directors. David Bensol, chairman of the board stated,
"We are very pleased to have John assume this responsibility in
leading the Company and thank Jim for his service during these
past nine months."
The Board of Directors also announced that Wesley Clark, a
director since June 2007 has resigned from the Board. David
Bensol commented, "On behalf of the Board I want to extend our
thanks to Wes for his contributions over the past two years."
On October 21 NutraCea received a letter from Wells Fargo Bank,
N.A. stating that based on certain "Events of Default" the Bank
has accelerated the entire principal balance due under NutraCea's
loan agreements with Wells Fargo. Wells Fargo may exercise its
right to set off against NutraCea's demand deposit account it has
with Wells Fargo in order to partially satisfy the amounts due
under the Agreement. NutraCea is continuing to work with Wells
Fargo in order to resolve these issues.
Going Concern Doubt
Perry-Smith LLP expressed substantial doubt about NutraCea's
ability to continue as a going concern after auditing the
Company's consolidated financial statements as of and for the
years ended December 31, 2008 and 2007. The auditing firm said
that the Company has suffered recurring losses and negative cash
flows from operations resulting in an accumulated deficit of
$133,136,000.
About NutraCea
NutraCea Inc. (OTC: NTRZ) -- http://www.NutraCea.com/-- is a
world leader in production and utilization of stabilized rice
bran. NutraCea holds many patents for stabilized rice bran
production technology and proprietary neutraceutical formulas
ranging from arthritis, chronic bowel conditions, and effective
diabetes control to cardiovascular disease treatment protocols.
NutraCea's proprietary technology enables the creation of food and
nutrition products to be unlocked from rice bran, normally a waste
by-product of standard rice processing. Committed to helping the
underfed, they're heavily involved in providing product and
technology for developing countries through NutraCea's RiceAde
feeding program.
PATRICK INDUSTRIES: Special Shareholders' Meeting on Nov. 19
------------------------------------------------------------
A Special Meeting of Shareholders of Patrick Industries, Inc.,
will be held at the Company's corporate offices, 107 West Franklin
Street, Elkhart, Indiana, on November 19, 2009 at 10:00 a.m.,
Eastern time, for these purposes:
1. To approve the Patrick Industries, Inc. 2009 Omnibus
Incentive Plan; and
2. To consider and transact such other business as may
properly come before the meeting or any adjournment or
postponement thereof.
The Board has fixed the close of business on September 23, 2009,
as the record date for the determination of the holders of shares
of the Company's outstanding common stock entitled to notice of
and to vote at the Special Meeting of Shareholders. Each
shareholder is entitled to one vote per share on all matters to be
voted on at the meeting.
A full-text copy of the proxy statement is available at no charge
at http://ResearchArchives.com/t/s?4773
At March 1, 2009, Patrick was in violation of the Consolidated
EBITDA financial covenant under the terms of its credit agreement.
On April 14, the Company entered into a Third Amendment to the
Company's Credit Agreement dated May 18, 2007, which, among other
things, provide that:
(a) The lenders waived any actual or potential Event of
Default resulting from the Company's failure to comply
with the one-month and two-month Consolidated EBITDA
covenants for the fiscal months ended March 1, 2009, and
March 29, 2009.
(b) The financial covenants were modified to establish new
one-month and two-month minimum Consolidated EBITDA
requirements that became effective beginning with the
fiscal months ended June 28, 2009, and July 26, 2009,
respectively. Until that date, there is no applicable
minimum Consolidated EBITDA requirement.
At June 28, 2009, the Company had $96,702,000 in total assets and
$80,792,000 in total liabilities. The Company swung to a $666,000
net loss for the second quarter ended June 28, 2009, from net
income of $1,858,000 for the second quarter ended June 29, 2008.
The Company posted wider net loss of $4,812,000 for the six months
ended June 28, 2009, from a net loss of $12,000 for the six months
ended June 29, 2008.
About Patrick Industries
Patrick Industries, Inc. -- http://www.patrickind.com/-- is a
major manufacturer of component products and distributor of
building products serving the manufactured housing, recreational
vehicle, kitchen cabinet, home and office furniture, fixture and
commercial furnishings, marine, and other industrial markets and
operates coast-to-coast through locations in 13 states. Patrick's
major manufactured products include decorative vinyl and paper
panels, wrapped moldings, cabinet doors and components, slotwall
and slotwall components, and countertops. The Company also
distributes drywall and drywall finishing products, interior
passage doors, flooring and roofing products, vinyl and cement
siding, ceramic tile, and other miscellaneous products.
PATRICK INDUSTRIES: Tontine to Assign Stake to New Entity
---------------------------------------------------------
Tontine Capital Partners, L.P.; Tontine Capital Management,
L.L.C.; Tontine Partners, L.P.; Tontine Management, L.L.C.;
Tontine Overseas Associates, L.L.C.; Jeffrey L. Gendell disclose
beneficial ownership of 5,174,963 shares or roughly 56.5% of
Patrick Industries, Inc.'s common stock.
The Tontine entities expect that they may hold or dispose of their
securities of the Company as a part of their ongoing investment
strategy. Recently, certain of the Tontine entities determined to
form TCP Overseas Master Fund II, L.P., during the fourth quarter
of 2009. It is anticipated that TCP 2 will become the beneficial
owner of an as-yet-undetermined portion of the securities of the
Company currently held by the Tontine entities. To the extent
that TCP 2 acquires beneficial ownership of any such securities,
TCP 2 may hold or dispose of such securities or may purchase
additional securities of the Company, at any time and from time to
time in the open market or otherwise.
Except as set forth, the Tontine entities relate they do not have
any current intention, plan or proposal with respect to: (a) the
acquisition by any person of additional securities of the Company,
or the disposition of securities of the Company; (b) an
extraordinary corporate transaction, such as a merger,
reorganization or liquidation, involving the Company or any of its
subsidiaries; (c) a sale or transfer of a material amount of
assets of the Company or any of its subsidiaries; (d) any change
in the present Board of Directors or management of the Company,
including any plans or proposals to change the number or term of
directors or to fill any existing vacancies on the Board; (e) any
material change in the present capitalization or dividend policy
of the Company; (f) any other material change in the Company's
business or corporate structure; (g) changes in the Company's
charter, bylaws or instruments corresponding thereto or other
actions which may impede the acquisition of control of the Company
by any person; (h) causing a class of securities of the Company to
be delisted from a national securities exchange, if any, or cease
to be authorized to be quoted in an inter-dealer quotation system
of a registered national securities association; (i) a class of
equity securities of the Company becoming eligible for termination
of registration pursuant to Section 12(g)(4) of the Securities
Act, or (j) any action similar to any of those enumerated.
On April 10, 2007, TCP, TMF and the Company entered into a
Securities Purchase Agreement which, among other things, provided
for the purchase by TCP and TMF of shares of Common Stock and
Senior Subordinated Promissory Notes of the Company.
On March 10, 2008, the Company, TCP and TMF entered into a
Securities Purchase Agreement, pursuant to which, on March 12,
2008, TCP and TMF purchased shares of Common Stock from the
Company. Pursuant to the March 2008 Securities Purchase
Agreement, the parties affirmed certain rights granted to TCP and
TMF under the Initial Securities Purchase Agreement related to the
right of TCP and TMF to appoint members of the Company's Board of
Directors and the Company's obligations to limit the size of its
Board of Directors.
At March 1, 2009, Patrick was in violation of the Consolidated
EBITDA financial covenant under the terms of its credit agreement.
On April 14, the Company entered into a Third Amendment to the
Company's Credit Agreement dated May 18, 2007, which, among other
things, provide that:
(a) The lenders waived any actual or potential Event of
Default resulting from the Company's failure to comply
with the one-month and two-month Consolidated EBITDA
covenants for the fiscal months ended March 1, 2009, and
March 29, 2009.
(b) The financial covenants were modified to establish new
one-month and two-month minimum Consolidated EBITDA
requirements that became effective beginning with the
fiscal months ended June 28, 2009, and July 26, 2009,
respectively. Until that date, there is no applicable
minimum Consolidated EBITDA requirement.
At June 28, 2009, the Company had $96,702,000 in total assets and
$80,792,000 in total liabilities. The Company swung to a $666,000
net loss for the second quarter ended June 28, 2009, from net
income of $1,858,000 for the second quarter ended June 29, 2008.
The Company posted wider net loss of $4,812,000 for the six months
ended June 28, 2009, from a net loss of $12,000 for the six months
ended June 29, 2008.
About Patrick Industries
Patrick Industries, Inc. -- http://www.patrickind.com/-- is a
major manufacturer of component products and distributor of
building products serving the manufactured housing, recreational
vehicle, kitchen cabinet, home and office furniture, fixture and
commercial furnishings, marine, and other industrial markets and
operates coast-to-coast through locations in 13 states. Patrick's
major manufactured products include decorative vinyl and paper
panels, wrapped moldings, cabinet doors and components, slotwall
and slotwall components, and countertops. The Company also
distributes drywall and drywall finishing products, interior
passage doors, flooring and roofing products, vinyl and cement
siding, ceramic tile, and other miscellaneous products.
PETTERS COMPANY: Tom Petters' Fraud Trial Set For This Week
-----------------------------------------------------------
Susan Carey at The Wall Street Journal reports that Tom Petters
will go on trial this week in federal court in St. Paul.
Mr. Petters was arrested in October 2008 and indicted in December
2008 on 20 criminal counts for allegedly orchestrating a
$3.5 billion fraud. The Journal says that Mr. Petters could face
life in prison.
The Journal relates that federal prosecutors have lined up
testimony from as many as three co-workers and four business
partners of Mr. Petters who pleaded guilty to aiding the plot,
have, but Mr. Petters' lawyers are focusing on disclosures about
one of his colleagues, Larry Reynolds, who according to court
documents has another name, a decades-long criminal background,
did time in prison twice, was a government informant and joined
the federal witness-security program. Mr. Reynolds pleaded guilty
to conspiracy to commit money laundering. Citing prosecutors, The
Journal states that Mr. Reynolds allegedly began working with Mr.
Petters in 2001. Mr. Petters' lawyers said in court documents
that the U.S. government helped "supervise the fraud they have now
indicted," referring to Mr. Reynolds' status in the witness-
security program at the same time he allegedly contributed to the
Petters conspiracy.
According to The Journal, Mr. Petters' lead defense attorney Jon
Hopeman said that the defense team has moved to have the case
dismissed due to the government's "failure to tell us who Reynolds
was."
The government, says The Journal, has sought to exclude Mr.
Reynolds's history from being introduced as evidence at the trial.
The Journal relates that jury selection is set for Wednesday. The
trial would last four to six weeks, The Journal notes.
Based in Minnetonka, Minn., Petters Group Worldwide LLC is named
for founder and chairman Tom Petters. The group is a collection
of some 20 companies, most of which make and market consumer
products. It also works with existing brands through licensing
agreements to further extend those brands into new product lines
and markets. Holdings include Fingerhut (consumer products via
its catalog and Web site), SoniqCast (maker of portable, WiFi MP3
devices), leading instant film and camera company Polaroid
(purchased for $426 million in 2005), Sun Country Airlines
(acquired in 2006), and Enable Holdings (online marketplace and
auction for consumers and manufacturers' overstock inventory).
Petters formed the company in 1988.
Petters Company, Inc., is the financing and capital-raising unit
of Petters Group Worldwide, LLC. Petters Company, Inc., Petters
Group Worldwide, LLC, and eight other affiliates filed separate
petitions for Chapter 11 relief on October 11, 2008 (Bankr. D.
Minn. Lead Case No. 08-45257). James A. Lodoen, Esq., at
Lindquist & Vennum P.L.L.P., represents the Debtors as counsel.
In its petition, Petters Company, Inc., listed debts of between
$500 million and $1 billion, while its parent, Petters Group
Worldwide, LLC, listed debts of not more than $50,000.
As reported in the Troubled Company Reporter on October 7, 2008,
Petters Aviation, LLC, and affiliates MN Airlines, LLC, doing
business as Sun Country Airlines, Inc., and MN Airline Holdings,
Inc., filed separate petitions for Chapter 11 bankruptcy
protection with the U.S. Bankruptcy Court for the District of
Minnesota on October 6, 2008 (Case Nos. 08-45136, 08-35197 and 08-
35198). Petters Aviation, LLC is a wholly owned unit of Thomas
Petters Inc. and owner of MN Airline Holdings, Inc., Sun Country's
parent company.
PETROQUEST ENERGY: S&P Gives Stable Outlook; Affirms 'B-' Rating
----------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on oil and
gas exploration and production company PetroQuest Energy Inc. to
stable from negative and affirmed its 'B-' corporate credit
rating. At the same time, S&P raised the issue-level rating on
PetroQuest's $150 million 10.375% senior notes due 2012 to 'B'
(one notch higher than the corporate credit rating) from 'B-' and
revised S&P's recovery rating to '2', indicating expectations of
substantial recovery (70% to 90%) in the event of a default, from
'3'.
"The outlook revision reflects S&P's increased confidence that
PetroQuest will maintain sufficient liquidity to fund fixed costs
and capital spending through 2010," said Standard & Poor's credit
analyst Paul B. Harvey.
The rating on PetroQuest reflects the company's limited reserves;
short reserve life; exposure to the capital-intensive, higher-risk
Gulf of Mexico region and a high cost structure. Other factors
include a good reserve replacement history, growing onshore
production and reserves, and solid financial measures for the
rating. Proved reserves as of Dec. 31, 2008, were 185 billion
cubic feet equivalent (bcfe), of which 90% were natural gas and
73% were developed.
The stable outlook reflects S&P's expectation that PetroQuest will
maintain solid financial measures and sufficient liquidity to fund
fixed costs and capital spending over the next 12 to 18 months,
during a period of uncertain natural gas prices. S&P could lower
ratings if PetroQuest pursues a more aggressive capital spending
program such that liquidity falls below $25 million with no near-
term solution. Positive rating actions require continued
improvement in liquidity, likely in conjunction with a sustained
improvement in natural gas prices and/or advantageous hedging.
PHIBRO ANIMAL: $37.5 Mil. Deal Won't Affect Moody's 'B2' Rating
---------------------------------------------------------------
Moody's Investors Service said that the ratings and outlook of
Phibro Animal Health Corporation, including the B2 corporate
family rating and stable outlook, will not be immediately impacted
by the company's recent announcement of the sale of its wood
preservatives business for $37.5 million in cash, plus certain
payments of working capital.
The last rating action on Phibro Animal Health Corporation was
when the senior unsecured note rating was raised to B2 from B3 and
the B2 probability of default rating was assigned on September 21,
2006.
Phibro'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 Phibro's core industry and Phibro's ratings are
believed to be comparable to those of other issuers of similar
credit risk.
Phibro Animal Health Corporation is a diversified manufacturer and
marketer of animal health and nutritional products, and specialty
chemicals. For the twelve months ended June 30, 2009, Phibro had
total net sales of approximately $550 million.
PILGRIM'S PRIDE: Equity Panel Addresses Objections to HLH Hiring
----------------------------------------------------------------
The Official Committee of Equity Security Holders in Pilgrim's
Pride Corp.'s cases sought the Court's authority to retain
Houlihan Lokey Howard & Zukin Capital, Inc., as financial advisor,
nunc pro tunc June 22, 2009.
The Equity Committee proposed to have Houlihan paid on these
terms:
-- $150,000 per month in cash from the Effective Date through
termination of the Engagement Agreement. The firm Monthly
Fees will be paid on the first date permitted by the Court,
and then on each monthly anniversary of the Effective Date;
plus
-- a cash fee of $1,750,000, earned and payable on the earlier
to occur of (a) the date of receipt of initial
distributions by the Equity Holders, and (b) the effective
date of a "transaction."
"Transaction" will mean the first to occur of (a) the
confirmation of a Chapter 11 plan; (b) any merger, consolidation,
reorganization, recapitalization, business combination, or other
similar transaction; (c) the acquisition by a purchaser in a
single transaction or a series of transactions of all or
substantially all of the Debtors' assets or all or substantially
all of the outstanding or newly-issued shares of any Debtor's
capital stock; and (d) the closing of any other sale, transfer or
assumption of all or substantially all of the assets,
liabilities, or stock of the Debtors.
Various parties, including Pilgrim's Pride, the Official Committee
of Unsecured Creditors and the U.S. Trustee have conveyed
objections to the terms of the retentin.
The Official Committee of Equity Security Holders and Houlihan
Lokey Howard & Zukin Capital, Inc., in response to the objections
to the firm's retention application, tells the Court that at the
hearing scheduled for October 27, 2009, they intend to present
evidence to support the retention application, including evidence
that the compensation and employment terms and conditions to
which Houlihan Lokey and the Equity Committee have agreed are
market-based.
Edward S. Weisfelner, Esq., at Brown Rudnick LLP, in New York,
says the Equity Committee and Houlihan Lokey have heeded the
Court's suggestion to attempt to reach consensual resolutions
with the objecting parties. To that end, Houlihan Lokey sought
the objecting parties' agreement to the entry of an order similar
to the orders the Court entered approving the Debtors' retention
of Lazard Freres & Co. LLC, and the Official Committee of
Unsecured Creditors' Moelis & Company LLC.
The Creditors' Committee and the U.S. Trustee declined to accept
the proposed order because it was not identical to the Lazard and
Moelis Orders. Thereafter, Houlihan Lokey agreed to modify the
proposed order again in an attempt to accommodate the Objecting
Parties, this time making the proposed order virtually identical
to the Moelis order. The only difference is the inclusion of
clarifying language stating that the Court can assess the
reasonableness of the Deferred Fee sought by Houlihan Lokey by
comparing it "to the range of fees paid to investment bankers in
comparable transactions both in and outside of court in this and
other Districts."
Houlihan Lokey believes the further revised proposed order
should: (i) satisfy the Court's previously-expressed concerns
regarding review of Houlihan Lokey's proposed fees; and (ii)
adequately address any remaining, legitimate objections pressed
by the Objecting Parties.
Mr. Weisfelner says that as of October 23, 2009, the Objecting
Parties have not yet agreed to withdraw their objections.
For the reasons stated, the Equity Committee and Houlihan Lokey
ask the Court to approve the retention application.
In a separate filing, the Equity Committee submitted with the
Court a witness and exhibit list in support of the retention
application.
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: Gets Nod to Assume GECC Leases & Schedules
-----------------------------------------------------------
Judge Michael Lynn granted the motion and authorized Pilgrim's
Pride Corp. and its units to assume all of the General Electric
Capital Corporation Leases and Schedules, as amended, effective
upon the execution of the Amendment Agreement by the Debtors and
GECC.
Further, Judge Lynn ruled that the provisions of this Order will
control notwithstanding any contrary conflicting provisions in
any confirmed plan of reorganization or order confirming that
plan in the Debtors' Chapter 11 cases. Furthermore, Judge Lynn
directed that the Debtors should not reject the GECC Leases and
Schedules through any proposed plan of reorganization, motion or
otherwise.
According to David W. Parham, Esq., at Baker & McKenzie LLP, in
Dallas, Texas, the GECC Leases and Schedules are vital to the
Debtors' business. The equipment consists of, in part, food
processing and material handling equipment and various tractors
and trailers. The GECC Leases and Schedules are the product of a
longstanding relationship between Pilgrim's Pride Corporation and
a suitable alternative is not available, Mr. Parham notes. PPC
has more than $1.14 million missed payments due to GECC under the
Leases and Schedules.
According to Mr. Parham, the Debtors and GECC have entered into a
proposal letter, to amend the GECC Leases and Schedules and for
PPC to assume the GECC Leases and Schedules, as amended, which
proposal letter provides in part:
* The GECC Leases and Schedules will be assumed, as amended;
* The unpaid Prepetition Payments and unpaid Initial 60 Days
Missed Payments under a respective lease and schedule shall
be paid by extending the existing term of the applicable
lease and schedule by approximately two to three months and
allowing the unpaid payments to be made during that extended
term;
* GECC will maintain its current return on each GECC Leases and
Schedules resulting in a slight increase to monthly rental
payments;
* Unpaid property tax reimbursements, $93,760.6 0, will be
reimbursed to GECC upon the latter of (i) Court approval; and
(ii) execution of a final agreement by the Parties;
* The GECC Leases and Schedules will contain cross-default and
cross collateral provisions with each other;
* The GECC Leases and Schedules will contain cross-default with
the leases and schedules between GELCO (GE Fleet) and other
PPC related entities and cross collateralization to the
extent, if ever, there are secured financings now or in the
future between GELCO and other PPC related entities;
* The agreement is subject to the execution by GECC and PPC of
a mutually acceptable agreement(s); and
* The Debtors will release GECC from all claims and causes of
action related to the GECC Leases and Schedules and lease
transactions, and all claims and causes of action arising
under the Bankruptcy Code.
Considering these provisions, the Debtors and GECC have agreed
that of the outstanding cure amount, $93,760 for property tax,
will be paid upon the latter of (i) Court approval; or (ii)
execution of a final agreement by the Parties. The remaining
$1,143,772 will be deferred to the end of the lease term by
extending the terms accordingly.
Due to the Amendments and specifically the placement of amounts
owed prepetition and postpetition to the end of the GECC Leases
and Schedules, the Debtors are prepared to give adequate assurance
that payments on the GECC Leases and Schedules will be timely.
The Debtors and GECC have engaged in fair, arms-length
negotiations which have resulted in these extensions that the
Debtors will be able to pay and which GECC is willing to accept,
Mr. Parham assures the Court.
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: Proposes Guantao as Special Counsel
----------------------------------------------------
Pilgrim's Pride Corp. and its units seek the Court's authority to
employ the Guantao Law Firm as special counsel nunc pro tunc to
September 29, 2009, to represent the Debtors in the Anti-Dumping
and Countervailing Investigations.
Guantao is headquartered in Beijing. It is one of the very few
Chinese law firms with substantial experience in representing
both domestic and foreign clients in anti-dumping,
countervailing, antitrust and government investigations,
compliance program and counseling projects. Guantao's lawyers
have worked extensively with Chinese anti-dumping authorities,
including the Ministry of Commerce of the Peoples' Republic of
China (MOFCOM), the National Development and Reform Commission
and the State Administration for Industry and Commerce. This
experience enables Guantao lawyers to serve the clients with the
most updated advice on the prevailing policies and to develop
solutions for matters like the Anti-Dumping and Countervailing
Duty Investigations.
The professional legal services that Guantao will render to the
Debtors with respect to the Anti-Dumping and Countervailing Duty
Investigations will include:
(a) Submitting registration documents to MOFCOM on behalf of
the Debtors;
(b) Assisting the Debtors to fill in the MOFCOM questionnaires
and submit the responses to MOFCOM;
(c) Assisting the Debtors to provide responses to MOFCOM
supplementary questions;
(d) Participating in the hearings, if any, held by MOFCOM on
behalf of the Debtors;
(e) Assisting the Debtors in the on-site verifications held by
MOFCOM to the Debtors;
(f) Communicating with MOFCOM on behalf of the Debtors during
the investigation process as requested by the Debtors; and
(g) Performing other work as requested by the Debtors in
connection with the Anti-Dumping and Counterveiling Duty
Investigations.
For its services, the Debtors propose to pay Guantao on an hourly
basis, plus reimbursement of actual, necessary expenses that
Guantao incurred in representing the Debtors. Guantao's current
hourly rates are:
Professional Hourly Rate
------------ -----------
Partners RMB 2500
Associates RMB 1800
Translation Services RMB 500 per page
Guantao assisted Pilgrim's Pride Corporation as soon as the Anti-
Dumping and Countervailing Duty Investigations were initiated.
However, the preparation of the employment application has been
slightly delayed due to a mandatory Chinese Holiday that
commenced on October 1 and ended on October 8, 2009.
Shaosong Sun, Esq., a partner of the Guantao Law Firm, in
Beijing, China, assures the Court that Guantao is a
"disinterested person" as defined by the Bankruptcy Code and does
not hold an interest adverse to the Debtors' estates.
The Court will convene a hearing to consider the employment
application on November 17, 2009, at 10:30 a.m. Central Standard
Time. Objections will be due by November 10.
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)
PRIME WEST DEVELOPMENT: Case Summary & 6 Largest Unsec. Creditors
-----------------------------------------------------------------
Debtor: Prime West Development, LLC
2550 Apache Plume Court
Palmdale, CA 93550
Bankruptcy Case No.: 09-24048
Chapter 11 Petition Date: October 23, 2009
Court: United States Bankruptcy Court
Central District of California (San Fernando Valley)
Judge: Maureen Tighe
Debtor's Counsel: M Jonathan Hayes, Esq.
Law Office of M Jonathan Hayes
9700 Reseda Bl., Ste201
Northridge, CA 91324
Tel: (818) 882-5600
Fax: (818) 882-5610
Email: jhayes@polarisnet.net
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
A full-text copy of the Debtor's petition, including a list of its
6 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/cacb09-24048.pdf
The petition was signed by Fei-Fei McAlinden.
PPA HOLDINGS: Talking on Consensual Plan, Wants Jan. 22 Extension
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the Central District of California
is set to consider PPA Holdings LLC and its debtor-affiliates'
motion to extend the exclusive periods to file a plan of
reorganization and solicit acceptances of the plan on Nov. 5,
2009, at 10:30 a.m. at Courtroom 5A, 411 W Fourth St., Santa Ana,
California.
The Debtors proposed that their exclusive periods to file a plan
and solicit acceptances be extended until Jan. 22, 2010, and
March 23, 2010, respectively.
The Debtors relate that they need additional time to continue
their efforts to develop, propose and confirm a viable plan. The
Debtors are having ongoing discussions with the Official Committee
of Unsecured Creditors and other creditor constituencies, in the
hope that a consensual plan might be developed.
Irvine, California-based PPA Holdings LLC is in the real property
investment business.
The Company and its affiliates filed for Chapter 11 on June 26,
2009 (Bankr. C.D. Calif. Lead Case No. 09-16353). Nanette D.
Sanders, Esq., and Todd C. Ringstad, Esq., at Ringstand & Sanders
LLP, represent the Debtors in their restructuring efforts.
Richard W. Esterkin, Esq., at Morgan Lewis & Bockius LLP,
represents the official committee of unsecured creditors as
counsel. The Debtors listed $10 million to $50 million in assets
and $50 million to $100 million in debts.
PREVENTION I: Files for Chapter 11 Bankruptcy Protection
--------------------------------------------------------
Prevention I Inc. has filed for Chapter 11 bankruptcy protection
in a bankruptcy court in New York on October 15, listing $100,001
to $500,000 in debts against $500,001 to $1 million in assets.
Prevention I's unsecured creditors include the state Department of
Taxation and Finance and the Internal Revenue Service, which has
undisclosed claims.
Prevention I Inc. is based in Brooklyn, New York.
PROTOSTAR LTD: Committee Says $193 Million in Liens Invalid
-----------------------------------------------------------
The official committee of unsecured creditors formed in ProtoStar
Ltd.'s cases filed a lawsuit to invalidate secured lenders' liens
on a $10 million working capital loan and on $183 million in 12.5%
and 18% secured notes.
In the adversary proceeding, the Creditors Committee wants to
compel The Bank of New York Mellon, as indenture trustee on
account of notes, and Wells Fargo Bank, N.A., as administrative
agent, to "establish the extent, validity and priority of their
alleged liens and claims." According to the Creditors Committee,
its investigation has determined that the lenders have failed to
establish that the prepetition liens and claims securing the notes
and the credit facilities were properly perfected.
According to Bill Rochelle at Bloomberg News, given the invalidity
of the security interest, the Creditors Committee filed a
companion motion asking the bankruptcy court to rule that the
secured creditors aren't entitled to submit a credit bid. A
hearing is scheduled on October 29 as to whether the lenders are
allowed to use their claims -- instead of cash -- for bidding.
An auction for two satellites is scheduled for October 29.
Initial bids were due October 23. The Debtor will seek the
Court's approval of the results of the auction on November 4.
The assets include the two satellites and ground equipment,
software and contracts needed to operate them.
About ProtoStar Ltd.
Hamilton, HM EX, Bermuda-based ProtoStar Ltd. is a satellite
operator formed in 2005 to acquire, modify, launch and operate
high-power geostationary communication satellites for direct-to-
home satellite television and broadband internet access across the
Asia-Pacific region.
The Company and its affiliates filed for Chapter 11 on July 29,
2009 (Bankr. D. Del. Lead Case No. 09-12659.) The Debtor selected
Pachulski Stang Ziehl & Jones LLP as Delaware counsel; Law Firm of
Appleby as their Bermuda counsel; UBS Securities LLC as financial
advisor & investment banker and Kurtzman Carson Consultants LLC as
claims and noticing agent. In their petition, the Debtors listed
between US$100 million and US$500 million each in assets and
debts. As of December 31, 2008, ProtoStar's consolidated
financial statements, which include non-debtor affiliates, showed
total assets of US$463,000,000 against debts of US$528,000,000.
The Bankruptcy Court has set October 14, 2010, as the general
claims bar date. Proofs of claim by governmental units are due
January 25, 2010.
Meanwhile the Bankruptcy Court entered an order authorizing the
debtors to hire UBS Securities LLC as investment banker and
financial advisor.
QUESTEX MEDIA: Can Hire Young Conaway as Co-Counsel
---------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware authorized
Questex Media Group Inc. and its debtor-affiliates to employ Young
Conaway Stargatt & Taylor LLP as their co-counsel
According to the Troubled Company Reporter on Oct. 15, 2009, the
firm has agreed to, among other things:
a) provide legal advice with respect to the Debtors' powers and
duties as debtors in possession in the continued operation
of their business and management of their properties;
b) pursue confirmation of a plan of reorganization and
approval of the corresponding solicitation procedures and
disclosure statement;
c) prepare on behalf of the Debtors necessary applications,
motions, answers, orders, reports and other legal papers;
d) appear in Court and otherwise protecting the interests of
the Debtors before the Court; and
e) perform all other legal services for the Debtors which may
be necessary and proper in these proceedings.
The firm's standard hourly rates are:
Michael R. Nestor, Esq. $560
Donald J. Bowman, Jr., Esq. $325
Robert F. Poppiti, Jr., Esq. $260
Michael A. Cianci, Esq. $240
Melissa Bertsch $155
The Debtors assured the Court that the firm is a "disinterested
person" within the meaning of Section 101(14) of the Bankruptcy
Code.
Questex Media Group, Inc. -- http://www.questex.com/-- provides
media and telecommunication services. The Debtors' media
properties include 23 trade publications and 150 digital
publications. The Company was formed in 2005 by Audax Group Inc,
a private equity firm based in Boston, which bought business units
from Advanstar Holdings Inc for $185 million.
Questex Media and its affiliates filed for Chapter 11 on Oct. 5
(Bankr. D. Del. Lead Case No. 09-13423). James Stempel, Esq., and
Erik Chalut, Esq., at Kirkland & Ellis LLP, and Michael Nestor,
Esq., at Young Conaway Stargatt & Taylor, LLP, represent the
Debtors in their restructuring efforts. The Company says it has
assets of $299 million against debts of $321 million.
QUESTEX MEDIA: Court Approves Kirkland & Ellis as Attorney
----------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware authorized
Questex Media Group Inc. and its debtor-affiliates to employ
Kirkland & Ellis LLP as their attorney.
According to the Troubled Company Reporter on Oct. 15, 2009, the
firm has agreed to, among other things:
a) advise the Debtors with respect to their rights, powers and
duties as debtors in possession in the continued management
and operation of their business and properties;
b) attend meetings and negotiate with representatives of the
creditors and other parties in interest;
c) take all necessary action to protect and preserve the
Debtors' estates, including prosecute actions on the
Debtors' behalf, defend any action commenced against the
Debtors, and represent the Debtors' interests in
negotiations concerning all litigation in which the Debtors
are involved, including objections to claims filed against
the Debtors' estates;
d) prepare all pleadings, including motions, applications,
answers, orders, reports, and papers necessary or otherwise
beneficial to the administration of the Debtors' estates;
and
e) represent the Debtors in connection with obtaining
postpetition financing;
The firm's standard hourly rates are:
Partners $560-$965
Associates $320-$535
Paraprofessionals $125-$270
The Debtors assured the Court that the firm is a "disinterested
person" within the meaning of Section 101(14) of the Bankruptcy
Code.
Questex Media Group, Inc. -- http://www.questex.com/-- provides
media and telecommunication services. The Debtors' media
properties include 23 trade publications and 150 digital
publications. The Company was formed in 2005 by Audax Group Inc,
a private equity firm based in Boston, which bought business units
from Advanstar Holdings Inc for $185 million.
Questex Media and its affiliates filed for Chapter 11 on Oct. 5
(Bankr. D. Del. Lead Case No. 09-13423). James Stempel, Esq., and
Erik Chalut, Esq., at Kirkland & Ellis LLP, and Michael Nestor,
Esq., at Young Conaway Stargatt & Taylor, LLP, represent the
Debtors in their restructuring efforts. The Company says it has
assets of $299 million against debts of $321 million.
RAHAXI INC: Registers 50 Mil. Shares Issuable Under 2007 Plan
-------------------------------------------------------------
Rahaxi, Inc., formerly known as FreeStar Technology Corporation,
filed with the Securities and Exchange Commission a Registration
Statement to register 50,000,000 shares of Common Stock to be
issued pursuant to the Company's 2007 Stock Incentive Plan. The
Company says the Proposed Maximum Aggregate Offering Price is
$1,500,000.
The Registration Statement also includes an indeterminate number
of additional shares which may be offered and issued to prevent
dilution from stock splits, stock dividends or similar
transactions as provided in the Company's 2007 Stock Incentive
Plan.
A full-text copy of the Company's registration statement is
available at no charge at http://ResearchArchives.com/t/s?4776
The Company warned in a filing with the U.S. Securities and
Exchange Commission in August its anticipated revenues from
operations will be insufficient to satisfy its ongoing capital
requirements for the next 12 months. Rahaxi's fiscal year ends
June 30. The Company has not yet filed its annual report for the
fiscal year ended June 30, 2009.
If its financial resources are insufficient, the Company will
require additional financing to execute its operating plan and
continue as a going concern. The Company cannot predict whether
the additional financing will be in the form of equity or debt, or
be in another form. The Company may not be able to obtain the
necessary additional capital on a timely basis, on acceptable
terms, or at all. In any of these events, the Company may be
unable to implement its current plans for expansion, repay its
debt obligations as they become due, or respond to competitive
pressures, any of which circumstances would have a material
adverse effect on its business, prospects, financial condition and
results of operations.
Management believes that with this financing, the Company will be
able to generate additional revenues that will allow the Company
to continue as a going concern. This will be accomplished by
hiring additional personnel and focusing sales and marketing
efforts on the distribution of product through key marketing
channels currently being developed by the Company. The Company
may also pursue the acquisition of certain strategic industry
partners where appropriate, and may also seek to raise funds
through debt and other financings.
In August, Rahaxi reported to the U.S. Securities and Exchange
Commission a net loss of $3,675,124 and $12,226,686 for the three
and nine months ended March 31, 2009, and $23,150,901 for the year
ended June 30, 2008, and had an accumulated deficit of
$109,796,498 as of March 31, 2009.
As of March 31, 2009, the Company had $3,014,871 in total assets
against $5,165,092 in total liabilities, all current, and $539,013
in non-controlling interest; resulting in $2,689,234 in
stockholders' deficit.
About Rahaxi
Rahaxi, Inc., formerly FreeStar Technology Corporation, provides
payment services and processing. Its principal offices are in
Dublin, Ireland; the Company also has offices in Helsinki,
Finland; Stockholm, Sweden; Geneva, Switzerland; and Santo
Domingo, the Dominican Republic. On November 21, 2008, it filed a
Certificate of Amendment to its Articles of Incorporation with the
Nevada Secretary of State changing its name to "Rahaxi, Inc." and
implementing a one-for-three reverse stock split of its common
stock.
RICK ROSE: James, Robin Gillette Bids $710,000 for Mansion
----------------------------------------------------------
David Adam at Quincy Herald-Whig reports that James and Robin
Gillette have offered $710,000 to acquire Rick Rose's Rockcliffe
Mansion -- the third offer on the home in the past three months --
and have made a $35,000 down payment. According to Herald-Whig,
the Gillettes have 30 days to inspect the home at 1000 Bird.
Herald-Whig relate that the bankruptcy court would consider
whether to approve a bid on the home at a hearing set for
November 2. Bankruptcy trustee John S. Hodge at Weiner Weiss and
Madison is overseeing the Rockcliffe mansion. Herald-Whig says
that the other bidders are:
-- Ken and Lisa Marks, who have been living in the home since
early September, made a $10,000 deposit on the mansion
when they filed a letter of intent to buy it July 2009,
but they missed an October 1 deadline to come up with
$700,000 in financing to buy the home; and
-- Stephen and Susan Hritz bid $705,000 for the home earlier
this month, but withdrew the bid days later.
Rick Rose owns the Rockcliffe Mansion is on the National Register
of Historic Places. Originally known as the Cruikshank Mansion,
it was built by the J.J. Cruikshank family between 1898 and 1900
for a then-staggering $250,000.
Judge Stephen V. Callaway of the U.S. Bankruptcy Court for Western
Louisiana in Shreveport converted Rick Rose's Chapter 13 case,
which commenced April 30, to Chapter 7 liquidation.
RITZ CAMERA: Files Liquidating Chapter 11 Plan
----------------------------------------------
RCC Liquidating Corp, formerly Ritz Camera Centers, Inc. before it
sold its key assets, has filed a proposed Chapter 11 liquidating
plan and an explanatory disclosure statement.
According to the Disclosure Statement, unsecured creditors are
expected to recover 3% to 15% of their claims. Higher ranked
creditors will recover 100 cents on the dollar. Holders of equity
interests won't receive any distributions.
A copy of the Plan is available free of charge at:
http://bankrupt.com/misc/RitzCamera_Chapter11Plan.pdf
A copy of the Disclosure Statement is available free of charge at:
http://bankrupt.com/misc/RitzCamera_DiscStatement.pdf
Ritz's exclusive period to propose a Chapter 11 plan expired
October 26. It has the exclusive right to solicit acceptances for
the Chapter 11 plan until Dec. 24, 2009.
Sale of All Assets
Ritz has sold most of its assets. RCI Acquisitions, formed by a
group that included the Company's chief executive, paid $16.25
million cash and plus an $8 million secured note in July to buy at
least 163 of the remaining 375 stores. Ritz also generated $40
million from selling all 129 Boater's World Marine Centers. The
Bankruptcy Court in October authorized Ritz to sell for $1.5
million a $4 million account receivable to one of the owners of
the company that owned the debt.
Under the Plan, a liquidating trustee will dispose of all
remaining assets. Holders of allowed claims will receive
distributions from the proceeds of the asset sales.
About Ritz Camera
Headquartered in Beltsville, Maryland, Ritz Camera Centers, Inc. -
- http://www.ritzcamera.com/-- sells digital cameras and
accessories, and electronic products. The Company filed for
Chapter 11 protection on February 22, 2009 (Bankr. D. Del. Case
No. 09-10617). Irving E. Walker, Esq., Gary H. Leibowitz, Esq.,
at Cole, Schotz, Meisel, Forman & Leonard, P.A., in Baltimore, are
bankruptcy counsel to the Debtor. Norman L. Pernick, Esq., and
Karen M. Mckinley, Esq., at Cole, Schotz, Meisel, Forman &
Leonard, P.A., in Wilmington, Delaware, serve as local counsel.
Thomas & Libowitz, P.A., is Debtor's special corporate counsel and
conflicts counsel. Marc S. Seinsweig, at FTI Consulting, Inc,
acts as the Debtor's chief restructuring officer. Kurtzman Carson
Consultants LLC is the claims and noticing agent. Attorneys at
Cooley Godward Kronish LLP represent the official committee of
unsecured creditors as lead counsel. The Committee selected
Bifferato LLC as Delaware counsel. In its schedules, the Debtor
listed total assets of $277 million and total debts of
$172.1 million.
RODNEY EISENBARGER: Case Summary & 17 Largest Unsecured Creditors
-----------------------------------------------------------------
Joint Debtors: Rodney J. Eisenbarger
Kelly J. Eisenbarger
227 Glenview Dr.
Lawrence, KS 66049
Bankruptcy Case No.: 09-41783
Chapter 11 Petition Date: October 23, 2009
Court: United States Bankruptcy Court
District of Kansas (Topeka)
Judge: Janice Miller Karlin
Debtors' Counsel: Charles T. Engel, Esq.
Engel & Geier, P.A.
800 SW Jackson, Suite 1000
Topeka, KS 66612
Tel: (785) 233-6700
Fax: (785) 233-6701
Email: chuck@engellawpa.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
A full-text copy of the Debtors' petition, including a list of
their 17 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/ksb09-41783.pdf
The petition was signed by the Joint Debtors.
SCHWELMER BEER: Files for Chapter 11 Bankruptcy Protection
----------------------------------------------------------
Schwelmer Beer Imports North America has filed for Chapter 7
bankruptcy protection in a bankruptcy court in New York on
October 16. Schwelmer Beer listed $50,001 to $100,000 in assets
against $500,001 to $1 million in debts owed to creditors
including Brauerei Schwelm, which holds an unsecured claim of
$296,883.66 against the Company.
Schwelmer Beer Imports North America is based in Brooklyn.
SCO GROUP: Trustee to Pursue Novell and IBM in Litigation
---------------------------------------------------------
According to Bill Rochelle at Bloomberg News, Edward N. Cahn,
Esq., the Chapter 11 trustee for SCO Group Inc. told the
Bankruptcy Court at an Oct. 23 hearing that lawsuits against
Novell Inc. and IBM should be pursued aggressively.
The bankruptcy judge in August called for a Chapter 11 trustee,
about one month before the U.S. Court of Appeals in Denver ruled
in the Company's favor after six years of litigation with Waltham,
Massachusetts-based Novell. The judge ordered for a trustee
instead of a conversion of the case to Chapter 7, as requested by
Novell, IBM and the Office of the United States Trustee.
The Chapter 11 trustee in October announced that he will submit a
plan of reorganization for SCO group. The plan relies on savings
from non-workforce related changes and a modest reduction in SCO's
workforce. As part of the restructuring, the trustee has
eliminated the Chief Executive Officer and President positions and
consequently terminated Darl McBride. The company is also looking
to raise additional funding and sell non-core assets to bolster
working capital.
The Chapter 11 Trustee, Mr. Cahn, is a former chief U.S. district
judge for the Eastern District of Pennsylvania. He has extensive
experience in the area of complex litigation, including
intellectual property. Mr. Cahn received an honorary doctorate
from Lehigh University in 2002. He was a Tresolini Lecturer in
Law at Lehigh University. Mr. Cahn holds degrees from Yale Law
School and Lehigh University, where he graduated magna cum laude.
Novell Litigation
As reported by the TCR on August 26, 2009, on August 24, 2009, the
United States Court of Appeals for the Tenth Circuit issued its
published opinion in the case of The SCO Group, Inc. v. Novell,
Inc. (No. 08-4217). According to SCO Group, in the opinion, the
Tenth Circuit Court reversed in material respects the summary
judgment of August 10, 2007, rendered by the United States
District Court of Utah, and the Final Judgment entered on November
20, 2008. In its opinion, the Tenth Circuit Court reversed the
summary judgment that Novell did not transfer certain UNIX
copyrights to the Santa Cruz Operations as part of an Asset
Purchase Agreement executed in 1995, as amended, and it also
reversed the summary judgment that Novell had the right, under
that Asset Purchase Agreement, to waive on behalf of SCO, or to
direct SCO to waive, certain claims it had asserted against
International Business Machines.
The Tenth Circuit Court affirmed the District Court's judgement
with regards to the royalties due Novell under the 2003 Sun-SCO
Agreement of $2,547,817 plus interest. The Court remanded the
case back to the District Court for trial. The Tenth Circuit
Court's conclusion is: "For the foregoing reasons, we AFFIRM the
district court's judgment with regards to the royalties due Novell
under the 2003 Sun-SCO Agreement, but REVERSE the district court's
entry of summary judgment on (1) the ownership of the UNIX and
UnixWare copyrights; (2) SCO's claim seeking specific performance;
(3) the scope of Novell's rights under Section 4.16 of the APA;
(4) the application of the covenant of good faith and fair dealing
to Novell's rights under Section 4.16 of the APA. On these issues,
we REMAND for trial."
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.
SEAGATE TECHNOLOGY: Fitch Affirms Issuer Default Rating at 'BB'
---------------------------------------------------------------
Fitch Ratings has revised Seagate Technology's and subsidiaries
Rating Outlook to Stable from Negative and affirmed the 'BB'
Issuer Default Ratings ratings.
Approximately $2.4 billion of total debt is affected by Fitch's
action, including the company's $350 million secured revolving
credit facility.
The revision in the Outlook to Stable from Negative reflects:
-- Seagate's improved operational performance and industry
pricing conditions: Significant profit margin expansion in
the fiscal first quarter ended Oct. 2, 2009 despite a 27%
unit decline in high margin mission-critical enterprise
drives in the first nine months of calendar 2009 compared
with the year-ago period. Gross margin increased to 24.5%
for the quarter, representing a sequential and year-over-year
increase of 600 and 700 basis points, respectively. The
margin expansion is attributable to Seagate's transition to
more cost-effective high capacity drives for the desktop
(500-gigabyte per disk) and notebook (250-GB) markets
and relatively stable pricing environment as industry-wide
capacity reductions in the past 12-18 months and better than
expected unit demand restored industry supply and demand;
-- Material improvement in credit protection measures due to
strengthened profitability with operating profit more than
doubling in the quarter ended Oct. 2, 2009 compared with the
year-ago quarter and significant debt reduction of
approximately $700 million in fiscal 2010. As a result,
Fitch estimates leverage declined to 2.4 times from 5.5x in
the June quarter. Fitch believes leverage could decline to
1x-1.5x by the end of fiscal 2010 (June 30).
-- Strengthening liquidity profile due to limited debt
maturities remaining in fiscal 2010, consisting of
approximately $100 million of convertible senior notes due
April 2010, full availability of the company's $350 million
credit facility that was previously fully drawn in fiscal
2009 to bolster its cash position prior to the implementation
of cost reduction initiatives. Lastly, the company maintains
a significant cash position of $1.6 billion, excluding
$166 million of restricted cash, as of Oct. 2, 2009 despite
meaningful debt reduction.
The ratings are supported by these factors:
-- Broad product portfolio and leading market share in the
overall hard disk drive industry;
-- The company's scale and vertically integrated model, which
reduces per unit manufacturing costs;
-- Continued growth of digital rich media by consumers and
enterprise storage requirements bode favorable for longer-
term HDD unit demand.
Fitch's rating concerns consist of:
-- Seagate's ability to sustain a time to market advantage
critical to achieving market share gains and maintaining
overall profitability, given formidable competition from
Western Digital Corporation and Hitachi Global Storage
Technologies in certain markets, most notably notebooks.
-- Consistent declines in average selling prices for HDDs due to
intense competition and low switching costs;
-- Long-term threat of technology substitution from NAND flash-
based solid state drives. Seagate shipped its initial SSD
product for the industry standard server market in September;
-- Long-term risk of unfavorable U.S. tax legislation that could
materially increase tax liabilities for Seagate and other
companies with significant domestic operations that are
incorporated in offshore countries with low or no corporate
income tax, such as Bermuda or the Cayman Islands, resulting
in lower free cash flow.
Total liquidity as of Oct. 2, 2009, was nearly $2 billion,
consisting of $1.6 billion of cash, the vast majority of which
is readily accessible without adverse tax considerations, and
$350 million of availability under an undrawn senior secured
credit facility due in September 2011. The facility is secured by
a first priority lien on all of Seagate's tangible and intangible
assets, including intellectual property, contracts and certain
real-estate, stock of the borrower's (Seagate and Seagate HDD)
direct and indirect U.S. subsidiaries and at least 66% of the
stock of foreign subsidiaries. Under the terms of the amended and
restated credit agreement dated April 3, 2009, financial covenants
consist of minimum fixed charge coverage of 1.5x and maximum net
leverage ratio of 1.8x for the second quarter of fiscal 2010 (Jan.
1) and 1.5x thereafter. In addition, the facility requires
minimum liquidity of $600 million through Jan. 1, 2010, including
any cash received from drawing upon the credit facility.
Subsequent to Jan. 1, 2010, the minimum liquidity amount declines
to $500 million, excluding any cash received from drawing upon the
credit facility. Furthermore, liquidity is supported by a
material rebound in free cash flow, which increased to
$189 million in the quarter ended Oct. 2, 2009, compared with
usage of $35 million in the year-ago quarter. Fitch expects free
cash flow in fiscal year 2010 to be approximately $600 million -
$800 million compared with $58 million in fiscal 2009.
Pro forma for the total debt reduction in fiscal 2010, Fitch
estimates total debt is nearly $2.1 billon, consisting of:
-- $560 million of 6.375% senior notes due October 2011 (Seagate
HDD);
-- $430 million of 10.00% senior secured second-priority notes
due April 2014; (STI)
-- $600 million of 6.8% senior notes due October 2016 (Seagate
HDD);
-- $326 million of 2.375% convertible senior notes due 2012
(Maxtor);
-- $103 million of 6.8% convertible senior notes due 2010
(Maxtor); and
-- $40 million of 5.75% subordinated debentures due 2012
(Maxtor).
These ratings of Seagate Technology (Seagate, parent co.) and
subsidiaries (wholly owned and debt unconditionally guaranteed by
Seagate) are affirmed:
Seagate
-- Issuer Default Rating at 'BB';
-- Secured credit facility at 'BBB-'.
Seagate Technology HDD Holdings
-- IDR at 'BB';
-- Senior unsecured debt at 'BB';
-- Secured credit facility at 'BBB-'.
Seagate Technology International
-- Issuer Default Rating at 'BB';
-- Senior secured second-priority notes at 'BB+'.
On June 1, 2009, Maxtor and Seagate Technology (US) Holdings,
Inc., both indirect wholly owned subsidiaries of Seagate, merged
and, pursuant to second supplemental indentures, STUS succeeded
to, and assumed all of the senior note and subordinate debenture
obligations of Maxtor. Seagate fully and unconditionally
guaranteed the obligations assumed by STUS. Subsequently, Fitch
has established ratings for STUS:
-- IDR at 'BB';
-- Senior unsecured debt affirmed at 'BB';
-- Subordinated debentures upgraded to 'BB' from 'B+' as Seagate
guarantees all STUS debt on an equal basis. Therefore, the
debentures are no longer subordinated as of June 1, 2009.
The Rating Outlook is Stable.
SEMGROUP LP: Wins Confirmation of Plan of Reorganization
--------------------------------------------------------
SemGroup, LP, has won confirmation of its Fourth Amended Plan of
Reorganization, reaching the last major milestone in its court
restructuring and allowing the company to emerge from Chapter 11
in November.
"Thanks to the hard work and commitment of all of our employees
and advisors over the past 15 months, SemGroup won confirmation of
a Plan of Reorganization that maximizes value for all of our
creditors and puts the company on a very strong financial
footing," said Terry Ronan, the company's president and chief
executive officer, in an October 26 statement.
Norm Szydlowski, who will succeed Mr. Ronan as chief executive
upon the company's exit from Chapter 11 protection, added: "We
will emerge from Chapter 11 as a stronger entity, better
positioned to serve our customers with crude oil, natural gas,
natural gas liquids, refined products and asphalt."
As part of the Plan, the company has obtained a commitment for a
$500 million exit financing facility from a syndicate of lenders,
including BNP Paribas, Bank of America, and Calyon. The financing
will be available upon the effective date of the Plan.
The Plan of Reorganization is supported by the Company's three
major creditor groups: the Official Committee of Unsecured
Creditors, The Official Producers Committee, and the Secured
Lenders.
SemGroup filed a fourth amended plan of reorganization to reflect
a recent settlement with the Official Producers Committee.
A full-text copy of the September 25 Plan is available for free
at http://bankrupt.com/misc/semgroup_Sept25Plan.pdf
A full-text copy of the September 25 Disclosure Statement is
available for free at:
http://bankrupt.com/misc/semgroup_Sept25DS.pdf
About SemGroup
Based in Tulsa, Okla., SemGroup, L.P., is a midstream service
company providing the energy industry the means to move products
from the wellhead to the wholesale marketplace. SemGroup provides
diversified services for end-users and consumers of crude oil,
natural gas, natural gas liquids, refined products and asphalt.
Services include purchasing, selling, processing, transporting,
terminalling and storing energy.
SEMGROUP LP: Int'l Bank Opposes Fortis Bank Settlement
------------------------------------------------------
SemGroup L.P. and its debtor affiliates seek the Court's
authority to enter into a settlement agreement with Fortis
Capital Corp. and Fortis Bank SA/NV.
Fortis Capital was a lender under an October 18, 2005 Credit
Agreement with the Debtors, and Bank of America, N.A., as
administrative agent. In September 2007, SemCanada Energy
Company and Fortis Capital entered into an ISDA 2002 Master
Agreement, which governed certain commodity swap and option
transactions between SemCanada Energy and Fortis Capital. In
June 2008, Fortis Bank and SemCrude, L.P., executed an ISDA 2002
Master Agreement governing an interest rate swap transactions of
SemCrude and Fortis Bank.
As of August 15, 2008, SemCanada Energy owed Fortis Capital
$225,426,990 with respect to transactions under the SemCanada
Energy ISDA. Pursuant to its obligations under the SemCrude
ISDA, Fortis Bank owes SemCrude $1,178,000. In March 2009,
Fortis Capital filed 24 Lender Swap Obligations Proofs of Claim
for over $225 million in the Debtors' estates.
The Debtors engaged in extensive negotiations with Fortis Capital
and Fortis Bank regarding resolution of, among others, the legal
and factual merits of the LSO Proofs of Claim. The key terms of
the Settlement are:
(a) the Debtors agree to allow $181,178,000 of Fortis
Capital's proofs of claim as an Allowed Secured Working
Capital Lender Claim under the Fourth Amended Joint Plan
of Reorganization;
(b) the Debtors agree to allow $44,234,887 of Fortis Capital's
proof of claim as an Allowed Lender Deficiency Claim under
the Plan;
(c) Fortis Bank will pay SemCrude $1,178,000; and
(d) the parties will grant each other full and final releases
arising out of the LSO Proofs of Claim.
International Bank Objects
International Bank of Commerce and National City Bank complain
that the Debtors' proposed settlement with Fortis Capital Corp.
and Fortis Bank SA/NV impermissibly includes the final allowance
and classification of certain claims of Fortis Capital that are
subject of an unresolved and pending claim objection filed by
International Bank. With respect to the allowance of Fortis
Capital's swap claim, International Bank asserts that the Debtors
are not the only party-in-interest with standing to object to the
claim. As to the Settlement's intent to have a portion of Fortis
Capital's Swap Claim classified as an Allowed Secured Working
Capital Lender Claim, International Bank notes that this issue is
included in the adversary proceeding commenced by International
Bank against Bank of America, N.A., as administrative agent for a
consortium of lenders, and lenders under the October 18, 2005
Credit Agreement.
Thus, International Bank asks the Court to deny the settlement
agreement between the Debtors and Fortis Capital.
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: Proposes Settlement With BNP Paribas
-------------------------------------------------
SemGroup LP and its units ask the Court to approve a settlement
agreement they entered into with BNP Paribas resolving the
treatment of 24 proofs of claims arising out of BNPP's assertion
that certain amounts are entitled to be treated as Lender Swap
Obligations.
BNPP is a lender under a credit agreement, dated October 18,
2005, entered into among several Debtors and Bank of America,
N.A., as administrative agent. The Credit Agreement contemplates
that certain Lenders, as counterparties, may enter into Swap
Contracts with the Debtors and those Swap Contracts may become
Lender Swap Obligations under certain circumstances.
Prepetition, SemCanada Energy Company, a non-debtor affiliate,
and BNPP entered into an international swap dealers association
master agreement governing certain foreign exchange and currency
option transactions. BNPP also entered into an ISDA with Debtor
SemCrude, L.P.
In July 2008, BNPP notified SemCanada Energy and SemCrude that
BNPP is terminating all outstanding transactions under the
SemCanada Energy ISDA and SemCrude ISDA. BNPP said SemCanada
Energy owes it US$7,900,732, while SemCrude owes it
US$10,952,524.
In February 2009, BNPP filed a total of 24 claims against
separate Debtor entities with each claim seeking the total amount
due under both the SemCrude ISDA and the SemEnergy Canada ISDA.
BNPP also filed proofs of claim in the insolvency proceedings of
the Debtors' Canadian affiliates.
After several months of review and extensive negotiations, the
Debtors and BNPP agreed to these key terms:
(a) the Debtors will allow US$822 of the Canadian FX
Termination Amount as a Secured Working Capital Lender
Claim under the Plan of Reorganization;
(b) the Debtors will allow US$2,504,937 of the U.S. FX
Termination Amount as a Secured Working Capital Lender
Claim under the Plan;
(c) the Debtors will allow US$9,857,272 of the Commodity
Termination Amount as a Secured Working Capital Lender
Claim under the Plan;
(d) the Debtors will allow US$1,095,252 of the Commodity
Termination Amount as a Lender Deficiency Claim under the
Plan; and
(e) the Debtors and BNPP will fully and finally release each
other from all actions arising out of the LSO Proofs of
Claims.
Approval of the Settlement, according to the Debtors, will also
obviate the need for a costly and time-consuming claims objection
and litigation process and will allow the Debtors to channel the
efforts and resources that would have devoted to the BNPP Claims
to the plan confirmation process.
The Debtors assures the Court that the Settlement is fair,
reasonable, and in the best interest of the Debtors' estates.
International Bank Objects
International Bank of Commerce and National City Bank complain
that the proposed Settlement Agreement between the Debtors and
BNP Paribas impermissibly includes the final allowance and
classification of certain claims of BNP Paribas, which claims are
subject to an unresolved and pending claim objection filed by
International Bank.
With respect to the allowance of BNP Paribas Swap Claims,
International Bank argues that the Debtors are not the only
party-in-interest with standing to object to the claim and thus,
filed this objection to assure that there is no inappropriate
impairment of its asserted rights against BNP Paribas.
As to the Settlement Agreement's intent to have a portion of BNP
Paribas Swap Claims classified as Allowed Secured Working Capital
Lender Lenders, International Bank says that the issue is
included in the adversary proceeding initiated by International
Bank against Bank of America, N.A., as administrative agent, and
lenders under an October 18, 2005 Credit Agreement.
Thus, International Bank asks the Court to deny approval of the
Settlement 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)
SEMGROUP LP: SemFuel to Sell Greenbay Assets to U.S. Oil
--------------------------------------------------------
In August 2009, the Bankruptcy Court conducted a hearing and
approved the sale of majority of the assets of Debtor SemFuel,
L.P., to Noble America Corp. The transaction was consummated on
September 30, 2009.
Subsequently, SemFuel engaged in discussions with U.S. Oil Co.,
Inc., regarding the sale of SemFuel's remaining retail operations
in Green Bay, Wisconsin. The Greenbay retail business consists
of procurement, wholesale/retail sales, and distribution of
gasoline and diesel predominantly in Wisconsin and surrounding
states. SemFuel and U.S. Oil negotiated an asset purchase and
sale agreement in good faith and at arm's-length.
By this motion, the Debtors ask the Court to authorize SemFuel to
enter into the Sale Agreement to transfer the Greenbay Assets
free and clear of liens, claims, interests and encumbrances to
U.S. Oil.
The Agreement provides for the sale of the Greenbay Assets to
U.S. Oil subject to higher or better offers. The principal terms
of the Agreement are:
Consideration: $650,000,000, plus or minus
an amount equal to the
estimated working capital,
plus the assumption of the
Assumed Liabilities
Agreements with Management: No agreements with management
have been entered into in
connection with the sale.
Releases: No releases have been entered
into in connection with the
Sale.
Private Sale/No Competitive
Bidding: The Debtors have extensively
marketed the Greenbay Assets
over the past several months,
and do not believe that
further marketing of the
assets or conducting an
auction will result in a
higher purchase price.
SemFuel proposes to undertake
the Sale without holding an
auction; provided that to the
extent a higher or better
offer is received by SemFuel
prior to the Offer Deadline,
SemFuel will hold an auction.
Closing and Other Deadlines: If the closing has not
occurred on or before
November 24, 2009, the
Agreement may be terminated
by either SemFuel or U.S.
Oil.
Good Faith Deposit: No good faith deposit was
required in connection with
the sale.
Pursuant to the Sale, the Debtors will assume executory contracts
related to the operation of the Greenbay assets and assign them
to U.S. Oil, who has expressed a willingness to assume SemFuel's
rights and obligations under the Assumed Contracts. The Debtors
seek the Court's authority to pay all cure amounts due and owing
under the Assumed Contracts. Objections to the Cure Amounts must
be filed on or before October 29, 2009.
Parties wishing to submit a higher or better offer for the
Greenbay Assets must submit those offers in writing so as to be
received by the counsel to the Debtors prior to October 29, 2009.
If the Debtors receive any timely higher or better offers, an
auction will be conducted at the offices of Weil, Gotshal &
Manges LLP on November 3, 2009.
The Debtors assure the Court that U.S. Oil is not an "insider" of
the Debtors within the meaning of Section 101(31) of the
Bankruptcy Code.
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)
SINCLAIR BROADCAST: Amendment to Tender Offer Statement Filed
-------------------------------------------------------------
Sinclair Broadcast Group, Inc., filed with the Securities and
Exchange Commission Amendment No. 3 to amend and supplement the
Tender Offer Statement on Schedule TO, as previously amended by
Amendment No. 1 and Amendment No. 2 thereto, relating to the
offers by subsidiary Sinclair Television Group, Inc., to purchase
for cash any and all of the $294.3 million aggregate principal
amount outstanding of Sinclair Broadcast Group's 3.0% Convertible
Senior Notes due 2027 at a price of $980 per $1,000 in principal
amount, and the $143.5 million aggregate principal amount
outstanding of Sinclair Broadcast Group's 4.875% Convertible
Senior Notes due 2018 at a price of $980 per $1,000 in principal
amount.
In the Schedule TO-I/A, Sinclair provided summary financial
information derived from its consolidated financial statements for
the year ended December 31, 2008, as filed with Sinclair's Annual
Report on Form 10-K on March 4, 2009, and the quarter ended
June 30, 2009, as filed with Sinclair's Quarterly Report on Form
10-Q on August 7, 2009.
Sinclair posted a net loss of $84,561,000 on total revenues of
$313,010,000 for the six months ended June 30, 2009. It posted a
net loss of $241,491,000 on total revenues of $754,474,000 for the
year ended December 31, 2008.
At June 30, 2009, Sinclair had total assets of $1,606,141,000
against total liabilities of $1,754,797,000. At December 31,
2008, Sinclair had $1,816,677,000 in total assets against total
liabilities of $1,884,078,000.
A full-text copy of the Offer to Purchase dated October 8, 2009,
and in the related Letter of Transmittal is available at no charge
at http://ResearchArchives.com/t/s?4770
A full-text copy of the Schedule TO-I/A is available at no charge
at http://ResearchArchives.com/t/s?4771
About Sinclair Broadcast Group
Based in Baltimore, Maryland, Sinclair Broadcast Group, Inc.
(Nasdaq: SBGI) -- http://www.sbgi.net/-- one of the largest and
most diversified television broadcasting companies, currently owns
and operates, programs or provides sales services to 58 television
stations in 35 markets. The Company's television group reaches
roughly 22% of U.S. television households and includes FOX,
ABC, CBS, NBC, MNT, and CW affiliates.
Sinclair carries Moody's Investors Service's Caa2 Corporate Family
Rating and Caa3 Probability of Default Rating; and Standard &
Poor's Ratings Services' 'B-' corporate credit rating.
SMART ONLINE: Raises $250,000 by Issuing Convertible Sub Note
-------------------------------------------------------------
Smart Online, Inc., reports that on each of October 5 and 9, 2009,
it sold an additional convertible secured subordinated note due
November 14, 2010 in the principal amount of $250,000 to current
noteholders upon substantially the same terms and conditions as
the previously issued notes sold on November 14, 2007, August 12,
2008, November 21, 2008, January 6, 2009, February 24, 2009, April
3, 2009, June 2, 2009, July 16, 2009, August 26, 2009 and
September 8, 2009.
The Company is obligated to pay interest on each of the New Notes
at an annualized rate of 8% payable in quarterly installments
commencing January 5, 2010 and January 9, 2010, as applicable.
The Company is not permitted to prepay the New Notes without
approval of the holders of at least a majority of the aggregate
principal amount of the Notes then outstanding.
The Company plans to use the proceeds to meet ongoing working
capital and capital spending requirements.
As reported by the Troubled Company Reporter on October 5, 2009,
Dennis Michael Nouri, a former officer of Smart Online, and
Reza Eric Nouri, a former employee of the Company, who -- on
July 2, 2009, were convicted of nine counts of criminal activity
in a federal criminal action brought against them in the United
States District Court for the Southern District of New York and
are presently awaiting sentence -- in September 2009 filed a
Motion for Rule to Show Cause and the Appointment of a Receiver in
the Court of Chancery of the State of Delaware against the
Company.
The Motion, among other things, seeks the appointment of a
receiver for the Company under Section 322 of the Delaware General
Corporation Law on account of the Company's failure to pay the
monetary judgment in the amount of $826,798 entered against it by
order of the Court of Chancery on August 6, 2009, for the
advancement of legal expenses incurred by the Nouris in their
defense of the foregoing criminal proceedings.
The Company intends to vigorously contest the Motion.
Going Concern Doubt
At June 30, 2009, the Company had $1,940,518 in total assets
against $10,901,973 in total liabilities. The Company had
$76,006,765 in accumulated deficit and $8,961,455 in stockholders'
deficit at June 30, 2009. The Company's June 30 balance sheet
also showed strained liquidity with $290,931 in total current
assets against $3,539,372 in total current liabilities.
Sherb & Co., LLP, the Company's independent registered public
accountants for fiscal 2008, has issued an explanatory paragraph
in their report included in the Company's Annual Report on Form
10-K for the year ended December 31, 2008, in which they express
substantial doubt as to the Company's ability to continue as a
going concern, given the Company's recurring losses from
operations and deficiencies in working capital and equity. The
Company has said the adverse opinion could materially limit its
ability to raise additional funds by issuing new debt or equity
securities or otherwise.
About Smart Online
Smart Online, Inc. -- http://www.smartonline.com/-- develops and
markets software products and services -- One Biz(TM) -- targeted
to small businesses that are delivered via a Software-as-a-Service
model. The Company sells its SaaS products and services primarily
through private-label marketing partners. In addition, the
Company provides sophisticated and complex Web site consulting and
development services, primarily in the e-commerce retail and
direct-selling organization industries.
SMART ONLINE: Atlas Discloses 39% Stake; Buys Shares from Nouri
---------------------------------------------------------------
Atlas Capital, SA, discloses being the beneficial owner of
7,204,297 shares or roughly 39% of Smart Online, Inc.'s common
stock.
Atlas Capital relates that as of September 9, 2009, it has
acquired, in the aggregate, the 7,204,297 shares either from the
Company or from other shareholders. Atlas Capital has paid an
aggregate of $19,565,579.12 for these shares from corporate funds,
including 56,206 shares acquired from Dennis Michael Nouri -- the
former President and Chief Executive Officer of the Company --
pursuant to a note cancellation agreement. In exchange for the
shares acquired from Mr. Nouri, Atlas Capital cancelled a note
under which Mr. Nouri owed Atlas Capital principal and interest
totaling $85,117.
Atlas Capital acquired the shares of Common Stock for investment
purposes. Subject to, among other things, Smart Online's business
prospects, prevailing prices, and market conditions, Atlas Capital
may purchase additional shares of Common Stock or other securities
of Smart Online from time to time in the open market, in privately
negotiated transactions, or otherwise. In addition, one of Atlas
Capital's investment goals is diversification, which may require
Atlas Capital to sell shares of Common Stock. Accordingly, Atlas
Capital may, from time to time, make decisions to sell shares of
Common Stock based upon then-prevailing market conditions.
On November 14, 2007, in an initial closing, Smart Online sold
convertible secured subordinated notes due November 14, 2010, in
the aggregate principal amount of $3.3 million to noteholders,
including Atlas Capital. In addition, the Noteholders committed
to purchase Notes of up to an aggregate principal amount of $5.2
million, on a pro rata basis, upon approval and call by Smart
Online's Board of Directors in future closings.
On August 12, 2008, Smart Online exercised its option to sell
Notes in the aggregate principal amount of $1.5 million with
substantially the same terms and conditions as the Notes sold on
November 14, 2007. In connection with the sale of the additional
Notes, the Noteholders holding a majority of the aggregate
principal amount of the Notes outstanding agreed to increase the
aggregate principal amount of Notes that they committed to
purchase from $8.5 million to $15.3 million. On November 21,
2008, Smart Online sold Notes in the aggregate principal amount of
$500,000 to two new investors, and on January 6, 2009, Smart
Online sold a Note in the principal amount of $500,000 to Atlas
Capital, all on substantially the same terms and conditions as the
previously issued Notes.
On February 24, 2009, Smart Online sold a Note in the principal
amount of $500,000 to Atlas Capital on substantially the same
terms and conditions as the previously issued Notes. On the same
date, the Noteholders holding a majority of the aggregate
principal amount of the Notes outstanding agreed that Smart Online
may sell additional convertible secured subordinated notes in an
aggregate principal amount of up to $6 million to new investors or
existing Noteholders at any time on or before December 31, 2009
with a maturity date of November 14, 2010 or later. In addition,
the definition of "Maturity Date" for each of the Notes was
changed from November 14, 2010 to the date upon which the Note is
due and payable, which is the earlier of (1) November 14, 2010,
(2) a change of control, or (3) if an event of default occurs, the
date upon which Noteholders accelerate the indebtedness evidenced
by the Notes.
On each of April 3, 2009 and June 2, 2009, Smart Online sold a
Note in the principal amount of $500,000 to Atlas Capital on
substantially the same terms and conditions as the previously
issued Notes. On each of July 16, 2009, August 26, 2009,
September 8, 2009, and October 5, 2009, Smart Online sold a Note
in the principal amount of $250,000 to Atlas Capital on
substantially the same terms and conditions as the previously
issued Notes.
Smart Online is obligated to pay interest on the Notes at an
annualized rate of 8% payable in quarterly installments commencing
three months after the purchase date of the Notes. Smart Online
does not have the ability to prepay the Notes without the approval
of Noteholders holding at least a majority of the principal amount
of the Notes then outstanding.
On the earlier of November 14, 2010 or a merger or acquisition or
other transaction pursuant to which Smart Online's existing
stockholders hold less than 50% of the surviving entity, or the
sale of all or substantially all of Smart Online's assets, or
similar transaction, or event of default, each Noteholder in its
sole discretion shall have the option to:
-- convert the principal then outstanding on its Notes into
shares of Common Stock, or
-- receive immediate repayment in cash of the Notes,
including any accrued and unpaid interest.
Payment of the Notes will be automatically accelerated if Smart
Online enters voluntary or involuntary bankruptcy or insolvency
proceedings.
Receivership
As reported by the Troubled Company Reporter on October 5, 2009,
Dennis Michael Nouri, a former officer of Smart Online, and
Reza Eric Nouri, a former employee of the Company, who -- on
July 2, 2009, were convicted of nine counts of criminal activity
in a federal criminal action brought against them in the United
States District Court for the Southern District of New York and
are presently awaiting sentence -- in September 2009 filed a
Motion for Rule to Show Cause and the Appointment of a Receiver in
the Court of Chancery of the State of Delaware against the
Company.
The Motion, among other things, seeks the appointment of a
receiver for the Company under Section 322 of the Delaware General
Corporation Law on account of the Company's failure to pay the
monetary judgment in the amount of $826,798 entered against it by
order of the Court of Chancery on August 6, 2009, for the
advancement of legal expenses incurred by the Nouris in their
defense of the foregoing criminal proceedings.
The Company intends to vigorously contest the Motion.
Going Concern Doubt
At June 30, 2009, the Company had $1,940,518 in total assets
against $10,901,973 in total liabilities. The Company had
$76,006,765 in accumulated deficit and $8,961,455 in stockholders'
deficit at June 30, 2009. The Company's June 30 balance sheet
also showed strained liquidity with $290,931 in total current
assets against $3,539,372 in total current liabilities.
Sherb & Co., LLP, the Company's independent registered public
accountants for fiscal 2008, has issued an explanatory paragraph
in their report included in the Company's Annual Report on Form
10-K for the year ended December 31, 2008, in which they express
substantial doubt as to the Company's ability to continue as a
going concern, given the Company's recurring losses from
operations and deficiencies in working capital and equity. The
Company has said the adverse opinion could materially limit its
ability to raise additional funds by issuing new debt or equity
securities or otherwise.
About Smart Online
Smart Online, Inc. -- http://www.smartonline.com/-- develops and
markets software products and services -- One Biz(TM) -- targeted
to small businesses that are delivered via a Software-as-a-Service
model. The Company sells its SaaS products and services primarily
through private-label marketing partners. In addition, the
Company provides sophisticated and complex Web site consulting and
development services, primarily in the e-commerce retail and
direct-selling organization industries.
SPANSION INC: Japan Creditors Object to Foundry Pact Rejection
--------------------------------------------------------------
Spansion Inc., and its debtor affiliates are seeking the Court's
authority to reject a Second Amended and Restated Foundry
Agreement, dated as of March 2007, with Spansion Japan Limited.
Spansion LLC and Spansion Japan are parties to the Foundry
Agreement pursuant to which Spansion Japan manufactures
integrated flash memory circuits for the Debtors. The pricing
under the Foundry Agreement was based on a "cost plus" formula
that resulted in a price per unit well in excess of the
prevailing prices in the market. Historically, Spansion Japan,
which is 100% owned by Spansion LLC, was centrally managed with
Spansion LLC and its affiliates.
On February 10, 2009, Spansion Japan filed a proceeding under the
Corporate Reorganization Law of Japan to obtain protection from
Spansion Japan's creditors. The Spansion Japan Proceeding was
formally commenced on March 3, 2009, when the Tokyo District
Court entered the commencement order and appointed the incumbent
represented director of Spansion Japan as trustee. As a result
of the Spansion Japan Proceeding, Spansion Japan is no longer
centrally managed with the Debtors' global operations. In
addition, due to Spansion Japan's insolvency, any above-market
amounts that would be paid by Spansion LLC to Spansion Japan
under the Foundry Agreement would effectively become trapped in
Spansion Japan's bankruptcy estate and would not inure, whether
directly or indirectly, to the Debtors' benefit as had been the
case prior to the Spansion Japan Proceeding.
Sommer L. Ross, Esq., at Duane Morris, LLP, in Wilmington,
Delaware, relates that since the commencement of the Spansion
Japan Proceeding, the Debtors have engaged in numerous
discussions with Spansion Japan and those administering its
bankruptcy estate concerning the terms under which Spansion LLC
would be willing to continue its commercial relationships with
Spansion Japan. In these discussions, Ms. Ross notes, the
Debtors have consistently stressed that they could not and would
not continue that relationship on the original terms of the
Foundry Agreement due to, among other things, the above-market
pricing. Thus, the Debtors have insisted that the Foundry
Agreement be amended to make it commercially justifiable for
Spansion LLC as a condition to maintaining their commercial
arrangements with Spansion Japan.
On May 20, 2009, Spansion LLC and Spansion Japan negotiated the
terms of an amendment to the Foundry Agreement, which terms
included:
(a) a modification of the pricing terms of the Foundry
Agreement, retroactive to March 3, 2009, so that they more
closely conform to market prices;
(b) the establishment of production levels that are more in
line with the Debtors' global needs; and
(c) shortened payment terms for Spansion LLC.
Ms. Ross tells the Court that after the parties had agreed upon
the terms of the Amendment, Spansion Japan netted the amounts it
owed Spansion LLC for the month of March under the FASL Japan
Distribution Agreement against the amounts Spansion LLC owed to
Spansion Japan for the month of March under the Foundry Agreement
based on the pricing terms agreed to in the Amendment, and
remitted the difference to Spansion LLC as to the March
Settlement Payment. This same process was subsequently followed
to settle payments due between the parties for activity in the
month of April, Ms. Ross adds.
However, Ms. Ross notes, after the Settlement Payment for April
2009 activity, which was made during the week of June 29, 2009,
Spansion Japan has taken a number of steps that indicate that it
might not honor the terms of the Amendment, but instead might
seek to enforce the pre-Amendment terms of the Foundry Agreement.
For example, no Settlement Payment has been made for activity in
May or thereafter. Ms. Ross relates that Spansion Japan
continues to delay making that payment, while balking at
executing the Amendment, making statements questioning the
validity of the Amendment and threatening to enforce the pre-
Amendment pricing terms of the Foundry Agreement. According to
Ms. Ross, the difference between the pricing terms originally set
forth in the Foundry Agreement and those in the Amendment would
equate to tens of millions of dollars in additional postpetition
costs for Spansion LLC.
In light of the ongoing assertions by Spansion Japan and GE
Financial Services Corporation that the pricing under the Foundry
Agreement is still binding on the Debtors, the Debtors have
determined to reject the Foundry Agreement.
GE & Spansion Japan Object
GE Financial Services Corporation, as administrative agent,
security agent, and secured lender, for itself and on behalf of
members of an official committee of secured creditors of Spansion
Japan Limited, asks the Court to deny the Rejection Motion
because damages flowing from rejection of the Foundry Agreement
are likely to be enormous. Spansion LLC is required under the
plain terms of the Foundry Agreement to purchase no less than 95%
of the total capacity of SJL for each quarter for an indefinite
time. Should LLC fail to make these purchases, it is required to
use reasonable efforts to find an alternative purchaser and to
make up the payment shortfall.
GE asserts that although the costs of rejection are concrete and
significant, any corresponding benefits of rejection at this time
are speculative at best. Moreover, GE notes, the reported
assumption of the Foundry Agreement by the SJL Trustee in the SJL
Reorganization Proceeding prior to the entry of an order
approving LLC's rejection of that same agreement gives rise to
issues of comity. According to GE, the rejection is also
premature because issues involving the Debtors' rights to certain
intellectual property remain unresolved.
The receivables generated by the Foundry Agreement are the
collateral of SJL Secured Lenders, and the proposed rejection
would give rise not only to potentially enormous rejection
damages but also to huge administrative claims, likely negating
any benefit that may possibly be achieved by the rejection.
For its part, Spansion Japan Limited tells the Court that it is
no coincidence that it has yet to assert in excess of
$340 million in administrative claims against the Debtors.
According to Spansion Japan, the limited information it has been
able to learn during this time seriously calls into question
whether the Debtors would realize any value from rejection,
especially when one considers the substantial impact rejection
will have on the Debtors' estates and their reorganization effort,
including:
* Rejection damage claims against the Debtors' estates
resulting to the loss of more than $1 billion of the value
that Spansion Japan would have realized from the parties'
performance of the Foundry Agreement over the next 20 years;
and
* Spansion Japan would be under no further obligation to ship
wafers to the Debtors and, as a result, understand that the
Debtors' operations will suffer a revenue shortfall of
approximately $43 million during the fourth quarter 2009.
Spansion Japan asserts that a final evidentiary hearing on the
Motion should be scheduled for a later date, which will provide
it with the opportunity to seek limited expedited discovery from
the Debtors and prepare an evidentiary presentation that will
permit the Court to make the necessary factual findings for
adjudication of the Motion.
However, Spansion Japan maintains, if the Court determines to
authorize rejection now, it requests that any rejection be
conditioned on:
(a) an effective date of rejection of October 27, 2009, given
that the Debtors continued to request product from
Spansion Japan and Spansion Japan delivered to the Debtors
based on those requests after October 9, 2009;
(b) a time period of at least 60 days from the date of that
rejection order for Spansion Japan to file its rejection
damage claim against the Debtors given the complexities of
that claim and the fact that the Debtors will suffer
little, if any, harm from allowing Spansion Japan at least
60 days in which to file that claim; and
(c) Spansion Japan's retention of its intellectual property
rights under the Foundry Agreement and related documents,
pursuant to Section 365(n) of the Bankruptcy Code.
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: Proposes Rejections of Contract With Ariba Inc.
-------------------------------------------------------------
On March 21, 1997, Spansion entered into a Software License and
Services Agreement with No. 97-A00012749 with Ariba, Inc., a
provider of software applications used to assist management with
a variety of business functions. The Ariba Contract provides
Spansion with a license to use Ariba's travel and expense
software, which is used by employees to submit travel requests
for approval by management, and to submit travel reports for
reimbursement of travel-related expenses.
The Debtors relate that pursuant to the terms of the Ariba
Contract, Spansion incurs an annual renewal fee of $100,000.
The Debtors tell the Court that because they have substantially
reduced their business operations and have developed less-costly
alternatives to the software provided by the Ariba Contract, they
are no longer in need of the software and services associated
with that agreement.
Thus, the Debtors seek the Court's authority to reject their
contract with Ariba, Inc.
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: Samsung Says German Action Should Proceed
-------------------------------------------------------
Samsung Electronics Co., Ltd., previously commenced a patent
infringement suit against Debtor Spansion International Inc., and
Dr. Reinhard Weigl, in Dusseldorf Regional Court, in Germany,
seeking (i) an injunction against Spansion International from
manufacturing and selling certain products that allegedly
infringe Samsung's patent, in Germany, (ii) compensatory damages
for the postpetition infringement, and (iii) the recall and
destruction of all those products.
The U.S. International Trade Commission said August 28 that it has
voted to institute an investigation of certain flash memory and
products containing same. The products at issue in this
investigation are flash memory chips and products such as GPS
devices, routers, and network storage products that contain flash
memory chips.
Pursuant to an October 1, 2009 Order, Bankruptcy Judge Kevin Carey
concluded that Samsung violated the automatic stay of Section 362
of the Bankruptcy Code by filing the ITC Action to enforce
postpetition patent infringement claims against the Chapter 11
Debtors and the Foreign Debtor. Judge Carey held that the
Samsung Action does not fall within the police and regulatory
powers exception to the automatic stay.
The Debtors have now sought to enforce automatic stay against
Samsung with respect to the prosecution of the German Complaint.
The Debtors aver that they did not begin any infringing conduct
on March 2, 2009. The Debtors maintain that they did not
introduce any new or modified products on that day or engage in
any new or different business activities from those activities
that they had engaged in prior to the Petition Date. According
to the Debtors, their conduct that is the alleged basis for the
German Complaint predated March 2, 2009, by months.
Samsung asserts that the German Action has significantly
different facts and circumstances than were present in the
International Trade Commission Action. Samsung avers that the
German Action should be allowed to proceed, unencumbered by the
automatic stay and without the imposition of any other equitable
injunction because:
(a) The German Action involves a dispute over the German
designation of a European patent under German law, which
under settled Federal Circuit law, must be litigated in
German courts;
(b) The patent subject to the German Action is not and has
never been included in the Delaware Action or the ITC
Action;
(c) Unlike the ITC Action, where patent infringement claims
where brought prior to the Petition Date, the claims in
the German Action were not brought until after the
Petition Date.
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: Wants Order Rejecting Apple Deal Enforced
-------------------------------------------------------
Spansion Inc., and its debtor affiliates ask Judge Kevin J. Carey
of the U.S. Bankruptcy Court for the District of Delaware to
enforce his order, dated September 1, 2009, which authorizes
rejection and termination of an agreement contract with Apple,
Inc.
On February 10, 2009, Spansion and Apple entered into a letter
agreement pursuant to which Spansion agreed to dismiss a
complaint in the International Trade Commission against Apple.
In exchange, Apple agreed that Spansion will remain its primary
supplier on current platforms where Spansion is qualified for the
life-time of the product and will also be considered for future
plaftforms.
Subsequently, the Debtors sought and obtained the Court's
approval to reject the Agreement asserting that its business
relationship with Apple is not sufficiently profitable to justify
dismissal of the ITC Action.
The Debtors tell the Court that despite the clear language of the
Rejection Order, Apple has taken the position that the Agreement
is not terminated. Apple contends that the Agreement is a
covenant not to sue, which Apple argues is tantamount to a
license. Apple further contends that, as a "license" of
intellectual property from a debtor-in-possession, it may elect
not to treat this "license" as terminated and may, instead, elect
to retain its rights under the license.
The Debtors aver that Apple has gone so far as to file a Notice
of Election under Section 365 of the Bankruptcy Code, and seek to
amend its answer of the International Trade Commission Action to
allege a defense of an express license. According to the
Debtors, the filing of the "election" as well as the Motion to
Amend are violations of the Court's Oder because the Order
expressly provides that the Agreement is terminated.
Accordingly, the Debtors ask the Court to strike Apple's
"election" under Section 365 of the Bankruptcy Code.
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)
SPRINT NEXTEL: Virgin Stockholders' Meeting on Nov. 24 to OK Deal
-----------------------------------------------------------------
A Special Meeting of Stockholders of Virgin Mobile USA, Inc., will
be held on November 24, 2009 at 9:00 a.m., local time, at the
Courtyard by Marriott Basking Ridge, 595 Martinsville Road, in
Basking Ridge, New Jersey, for these purpose:
1. To consider and vote on a proposal to adopt the Agreement
and Plan of Merger, dated as of July 27, 2009, among
Sprint Nextel Corporation, Sprint Mozart, Inc., a wholly
owned subsidiary of Sprint Nextel, and Virgin Mobile USA,
and
2. To approve the adjournment of the meeting, if necessary or
appropriate, to solicit additional proxies if there is an
insufficient number of votes at the meeting to approve the
proposal.
The Virgin Mobile USA board of directors has chosen the close of
business on October 22, 2009 as the "record date" that will
determine the stockholders who are entitled to receive notice of,
and to vote at, the meeting or at any adjournment or postponement
of the meeting.
A copy of the proxy statement/prospectus dated October 23, 2009,
is available at no charge at http://ResearchArchives.com/t/s?4772
About Virgin Mobile USA
Virgin Mobile USA, Inc. (NYSE:VM) is a mobile virtual network
operator, commonly referred to as an MVNO, offering prepaid, or
pay-as-you-go, and, following the acquisition of Helio LLC in
August 2008, postpaid wireless communications services, including
voice, data, and entertainment content, without owning a wireless
network. The Company uses the "Virgin Mobile" name and logo under
license from Virgin Enterprises Ltd. The Company offers its
services over the nationwide Sprint PCS network under the terms of
the PCS Services Agreement between the Company and Sprint Nextel
Corporation.
On July 28, 2009, Sprint Nextel and the Company announced that
their boards of directors have approved a definitive agreement for
Sprint Nextel to acquire the Company in an all equity deal. Each
of the Company's stockholders, except for the Virgin Group and SK
Telecom, will receive the equivalent of $5.50 in Sprint Nextel
common shares for each share of the Company's Class A common
stock, but in no event will the exchange ratio be less than 1.0630
or greater than 1.3668. The Virgin Group and SK Telecom will
receive 93.09% and 89.84%, respectively, of that received by the
Company's other stockholders. The transaction is subject to the
approval of the Company's stockholders as well as customary
conditions and regulatory approvals. Sprint Nextel and the
Company expect the transaction to close in the fourth quarter of
2009 or early 2010.
At June 30, 2009, the Company had $320.68 million in total assets
and $577.35 million in total liabilities. At June 30, 2009, the
Company had $267.16 million in stockholders' deficit attributable
to Virgin Mobile USA Inc., $10.49 million in non-controlling
interest, and $256.66 million in total deficit.
About Sprint Nextel Corporation
Overland Park, Kansas-based Sprint Nextel Corporation is a
communications company offering a comprehensive range of wireless
and wireline communications products and services that are
designed to meet the needs of individual consumers, businesses and
government subscribers. Sprint Nextel is the third largest
wireless communications company in the United States based on the
number of wireless subscribers. Sprint Nextel is also one of the
largest providers of wireline long distance services and one of
the largest carriers of Internet traffic in the nation.
Sprint Nextel carries Moody's Investors Service's Ba1 corporate
family rating. Standard & Poor's Ratings Services said its rating
on Sprint Nextel (BB/Negative/--) is not affected by the company's
definitive agreement to acquire iPCS Inc.
STRAIT GATE: Files for Chapter 11 Bankruptcy Protection
-------------------------------------------------------
Strait Gate Church Inc. has filed for Chapter 11 bankruptcy
protection in a bankruptcy court in New York on October 16,
listing $1,000,001 to $10 million in liabilities and $1,000,001 to
$10 million in assets. Strait Gate's unsecured creditors include
J.P. Morgan Chase, which is owed about $75,421.40; and Victor
Body-Lawson Associates, owed about $68,500.
Strait Gate Church Inc. is based in Mamaroneck in New York.
TAYLOR BEAN: Selling Owned Properties for $133 Million
------------------------------------------------------
According to Bill Rochelle at Bloomberg News, Taylor Bean &
Whitaker Mortgage Corp. is proposing to hold an auction testing
whether a bid of $133.2 million by Selene Residential Mortgage
Opportunity Fund LP is the best offer for the Company's portfolio
of repossessed real estate.
The Bankruptcy Court will hold a Nov. 5 hearing to set up sale
procedures. Taylor Bean is proposing to hold an auction on
Dec. 11, followed by a hearing on Dec. 15 for approval of the
sale.
At the November 5 hearing, the Court will also consider giving
approval for $25 million in financing to come from an affiliate of
the buyer of the real estate.
Taylor Bean was the 12th largest U.S. mortgage lender and servicer
of loans before it filed for bankruptcy protection on Aug. 24,
2009. It filed for Chapter 11 after being suspended from doing
business with U.S. agencies and Freddie Mac, the government-
supported mortgage company. Taylor has blamed probes into one of
its banks for the suspensions.
Taylor Bean filed for Chapter 11 on August 24 (Bankr. M.D. Fla.
Case No. 09-07047). Edward J. Peterson, III, Esq., at Stichter,
Riedel, Blain & Prosser, PA, in Tampa, Florida, represents the
Debtor. Troutman Sanders LLP is special counsel. BMC Group Inc.
serves as claims agent. Taylor Bean has more than $1 billion of
both assets and liabilities, and between 1,000 and 5,000
creditors, according to the bankruptcy petition.
TOWN CENTER: Case Summary & 5 Largest Unsecured Creditors
---------------------------------------------------------
Debtor: Town Center, LP
1 Fox Chase Dr
Watchung, NJ 07069
Bankruptcy Case No.: 09-18041
Chapter 11 Petition Date: October 22, 2009
Court: United States Bankruptcy Court
Eastern District of Pennsylvania (Philadelphia)
Judge: Eric L. Frank
Debtor's Counsel: John R.K. Solt, Esq.
1425 Hamilton Street
Allentown, PA 18102
Tel: (610) 433-6771
Email: jrksolt@verizon.net
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
A full-text copy of the Debtor's petition, including a list of its
5 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/paeb09-18041.pdf
The petition was signed by James Harrison.
TRIBUNE CO: Improperly Paying Fees to Lenders, Bondholders Say
--------------------------------------------------------------
Law Debenture Trust Co. says Tribune Co., is improperly paying
fees to the secured lenders, Bill Rochelle at Bloomberg News
reported. Law Debenture, the indenture trustee for the 6.61
percent debentures of 2027 and the 7.25 percent debentures of
2096, alleges that Tribune is using non-bankrupt subsidiaries to
pay fees incurred by secured lenders in using four law firms and
two financial advisers. The payments are improper, the indenture
trustee says, because the lenders will turn out to be unsecured
lenders of the subsidiaries and under-secured lenders to the
parent.
According to the report, Law Debenture says the fees were
disclosed to no one aside from the Official Committee of Unsecured
Creditors. Some of the lenders are represented on the Committee.
The Law Debenture, as successor indenture trustee for 18% of the
senior notes issued by Tribune, previously asked the Bankruptcy
Court for authority to conduct discovery under F.R.B.P. Rule 2004
relating Tribune's $13.8 billion leveraged buyout led by Sam Zell
in December 2007. The bondholder trustee wants to examine
potential causes of action by the estate, noting that the
transaction -- where Tribune incurred $11.2 billion in secured
debt -- did not benefit Tribune, which filed for bankruptcy just a
year after the LBO. Law Debenture later withdrew the motion after
the Creditors Committee agreed to give it documents in accordance
with its probe of the transaction. If the transfer to the lenders
is ruled as a fraudulent transfer, the lenders' claims could be
subordinated as unsecured claims.
According to Bill Rochelle, Law Debenture says in court papers
that Tribune paid the fees under threat that the lenders would
take enforcement action against non-bankrupt subsidiaries.
Enforcement action could have been headed off, the bondholders
say, by having the bankruptcy court spread the so-called automatic
stay to cover the subsidiaries. Alternatively, the subsidiaries
could have been put into Chapter 11.
The indenture trustee wants the lenders to make an accounting and
repay the fees they received. The motion is scheduled for hearing
Nov. 18 in bankruptcy court.
About Tribune Co.
Headquartered in Chicago, Illinois, Tribune Co. --
http://www.tribune.com/-- is a media company, operating
businesses in publishing, interactive and broadcasting, including
ten daily newspapers and commuter tabloids, 23 television
stations, WGN America, WGN-AM and the Chicago Cubs baseball team.
The Company and 110 of its affiliates filed for Chapter 11
protection on December 8, 2008 (Bankr. D. Del. Lead Case No. 08-
13141). The Debtors proposed Sidley Austion LLP as their counsel;
Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel;
Lazard Ltd. and Alvarez & Marsal North Americal LLC as financial
advisors; and Epiq Bankruptcy Solutions LLC as claims agent.
Attorneys at Landis Rath & Cobb LLP, and Chadbourne & Parke LLP,
represent the Official Committee of Unsecured Creditors. As
of December 8, 2008, the Debtors have $7,604,195,000 in total
assets and $12,972,541,148 in total debts.
Chicago National League Ball Club LLC, filed for Chapter 11 on
Oct. 13, as part of a plan by Tribune Co. to sell the Chicago Cubs
baseball team for more than $700 million to the family of TD
Ameritrade Holding Corp.'s founder, Joe Ricketts.
Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy
News. The newsletter tracks the Chapter 11 proceeding undertaken
by Tribune Company and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
TRUMP ENTERTAINMENT: Ordered to Disclose Casino Investments
-----------------------------------------------------------
Law360 reports that a federal bankruptcy court has ordered Donald
Trump and lender Beal Bank to disclose specific details about the
stake they hold in Trump Entertainment Resorts Inc., in an
increasingly contentious battle over the casino company's
restructuring.
As reported by the TCR on October 9, 2009, creditors of Trump
Entertainment are choosing between two competing plans. Judge
Judith Wizmur gave the Donald Trump-backed Debtors and their
noteholders permission to solicit acceptances for their competing
plans, after their plan outlines were approved.
The two parties have upped their restructuring proposals for Trump
Entertainment, with Donald Trump and a bank offering to pitch in
an additional $13.9 million for creditors and the noteholders
offering $50 million more in fresh capital.
Trump Entertainment Resorts Inc. initially filed a Chapter 11 plan
built around the proposed sale of the company to shareholder
Donald Trump. Under the original plan, Donald J. Trump and BNAC,
Inc., an affiliate of Beal Bank Nevada, will invest $100 million
cash in the newly private company and become its owners. The
original plan provides for a 94% recovery for Beal Bank, the
secured creditor, and a wipe out for lower ranked creditors.
The Ad Hoc Committee of Holders of the 8.5% Senior Secured Notes
Due 2015 filed a competing plan, which originally offered a
capital contribution of $175 million in new equity capital in the
form of a rights offering backstopped by certain holders of the
Senior Secured Notes. That plan would allow second lien
noteholders and general unsecured claimants to receive their pro
rata share of (a) 5% of the common stock of the reorganized
Debtors, and (b) subscription rights to acquire 95% of the New
Common Stock.
The second lien noteholders are offering $225 million through a
rights offering while selling one of the three casinos for $75
million to Coastal Marina LLC, a company controlled by Richard T.
Fields. The second lien noteholders' plan would pay the first-
lien debt in full by giving them new debt plus proceeds from the
Marina sale and cash from the rights offering. The second lien
noteholders and allowed general unsecured creditors would receive
95% of the new stock. The participants in the $225 million rights
offering will receive 75% of the new stock while the noteholders
who will backstop the offering will receive 25% of the new stock
as backstop fee.
About Trump Entertainment
Based in Atlantic City, New Jersey, Trump Entertainment Resorts
Inc. (NASDAQ: TRMP) -- http://www.trumpcasinos.com/-- owns and
operates three casino hotel properties in Atlantic City, New
Jersey, which include Trump Taj Mahal Casino Resort, Trump Plaza
Hotel and Casino, and Trump Marina Hotel Casino. The Company
conducts gaming activities and provides customers with casino
resort and entertainment.
Donald Trump is a shareholder of the Company and, as its non-
executive Chairman, is not involved in the daily operations of the
Company. The Company is separate and distinct from Mr. Trump's
privately held real estate and other holdings.
Trump Entertainment Resorts, TCI 2 Holdings, LLC, and other
affiliates filed for Chapter 11 on February 17, 2009 (Bankr. D.
N.J., Lead Case No. 09-13654). The Company has tapped Charles A.
Stanziale, Jr., Esq., at McCarter & English, LLP, as lead counsel,
and Weil Gotshal & Manges as co-counsel. Ernst & Young LLP is the
Company's auditor and accountant and Lazard Freres & Co. LLC is
the financial advisor. Garden City Group is the claims agent.
The Company disclosed assets of $2,055,555,000 and debts of
$1,737,726,000 as of December 31, 2008.
Trump Hotels & Casino Resorts, Inc., filed for Chapter 11
protection on Nov. 21, 2004 (Bankr. D. N.J. Case No. 04-46898
through 04-46925). Trump Hotels' obtained the Court's
confirmation of its Chapter 11 plan on April 5, 2005, and in May
2005, it exited from bankruptcy under the name Trump Entertainment
Resorts Inc.
TUBLEWEED INC: Court to Consider Cash Collateral Access Today
-------------------------------------------------------------
The Hon. Thomas H. Fulton of the U.S. Bankruptcy Court for the
Western District of Kentucky is set to consider Tubleweed, Inc.,
and Custom Food's continued access to the cash collateral of GE
Capital Franchise Finance Corporation and FifthThird Bank on
Oct. 27, 2009, at 1:30 p.m. (Eastern Time.) The hearing will be
held at Courtroom No. 2, 5th Fl. (7th St. Elevators), 601 West
Broadway, Louisville, Kentucky.
As reported in the Troubled Company Reporter on July 2, 2009,
the Debtor will make interest payments in the sum of $12,000 per
month to Fifth Third, as adequate protection. Lease payments to
Fifth Third will not be made until further of the Court. The
adequate protection payment will be funded by cash collateral held
in the Debtor's primary account with Fifth Third.
As adequate protection, the secured lenders will be granted
superpriority postpetition liens on all of the Debtor's assets
acquired post-petition and proceeds thereof in the same scope and
priority as their respective liens and setoff rights existed
prepetition.
Headquartered in Louisville, Kentucky, Tumbleweed, Inc. --
http://www.tumbleweedrestaurant.com/-- together with Custom Food
Solutions LLC operate a chain of restaurants.
Tubleweed and Custom Food filed separate petitions for Chapter
11 relief on March 27, 2009 (Bankr. W.D. Ky. Case No. 09-31525 and
09-31526). Ruby D. Fenton-Iler, Esq., at Borowitz & Goldsmith,
PLC, David M. Cantor, Esq., at Seiller Waterman LLC, and Gary L.
Jones, Esq., at Jones Law Offices, represent Tumbleweed, Inc., as
counsel. The Debtor listed between $10 million and $50 million
each in assets and debts.
TUBLEWEED INC: Excl. Plan Filing Period Extended Until November 15
------------------------------------------------------------------
The Hon. Thomas H. Fulton of the U.S. Bankruptcy Court for the
Western District of Kentucky extended Tubleweed, Inc., and Custom
Food's exclusive periods to file a plan of reorganization until
Nov. 15, 2009, and solicit acceptances of the plan until Jan. 31,
2010.
Headquartered in Louisville, Kentucky, Tumbleweed, Inc. --
http://www.tumbleweedrestaurant.com/-- together with Custom Food
Solutions LLC operate a chain of restaurants.
Tubleweed and Custom Food filed separate petitions for Chapter
11 relief on March 27, 2009 (Bankr. W.D. Ky. Case No. 09-31525 and
09-31526). Ruby D. Fenton-Iler, Esq., at Borowitz & Goldsmith,
PLC, David M. Cantor, Esq., at Seiller Waterman LLC, and Gary L.
Jones, Esq., at Jones Law Offices, represent Tumbleweed, Inc., as
counsel. The Debtor listed between $10 million and $50 million
each in assets and debts.
UNIVERSAL CITY: Launches Tender Offer for 11 3/4% Senior Notes
--------------------------------------------------------------
Universal City Development Partners, Ltd., and UCDP Finance, Inc.,
have launched a cash tender offer and consent solicitation with
respect to their outstanding $500 million in aggregate principal
amount of 11.75% Senior Notes due 2010.
Terms of the Tender Offer and Consent Solicitation
The tender offer and consent solicitation are being made on the
terms and subject to the conditions set forth in an Offer to
Purchase and Consent Solicitation Statement dated October 23,
2009, and the related Consent and Letter of Transmittal. The
total consideration for the Notes tendered and accepted for
purchase pursuant to the tender offer will be $1,005 for each
$1,000 principal amount of Notes tendered, as specified in the
Tender Offer Documents. The Issuers will pay accrued and unpaid
interest up to, but not including, the applicable payment date.
Each holder who validly tenders its Notes and delivers consents to
the Proposed Amendments prior to 5:00 p.m., New York City time, on
November 5, 2009, shall be entitled to a consent payment, which is
included in the Total Consideration, of $5.00 for each $1,000
principal amount of Notes tendered by such holder if such Notes
are accepted for purchase pursuant to the tender offer.
The tender offer will expire at 5:00 p.m., New York City time, on
November 20, 2009, unless extended or earlier terminated.
Payments of the tender consideration for the Notes validly
tendered and not withdrawn on or prior to the expiration date and
accepted for purchase will be made pursuant to the Tender Offer
Documents.
In connection with the tender offer, the Issuers are soliciting
the consents of the holders of the Notes to proposed amendments to
the indenture governing the Notes. The primary purpose of the
consent solicitation and Proposed Amendments is to eliminate
substantially all of the material restrictive covenants and
certain events of default and related provisions in the indenture
governing the Notes. In order for the Proposed Amendments to be
effective, holders of a majority in aggregate principal amount of
the Notes must consent to the Proposed Amendments. Holders of the
Notes may not tender their Notes without delivering the related
consents.
The consummation of the tender offer is conditioned upon, among
other things, (i) the Issuers having available proceeds from new
debt financing and from cash on hand sufficient to pay the
aggregate Total Consideration; (ii) the tender of Notes
representing a majority of the principal amount of Notes
outstanding on or prior to the Consent Date; (iii) the execution
of a supplemental indenture implementing the Proposed Amendments;
and (iv) the tender of floating rate senior notes and 8 3/8%
senior notes issued by Universal City Florida Holding Co. I,
Universal City Florida Holding Co. II, UCFH I Finance, Inc., and
UCFH II Finance, Inc. representing a majority of the principal
amount of such Holdco Notes outstanding on the Consent Date. If
any of the conditions are not satisfied, the Issuers may terminate
the tender offer and return tendered Notes, may waive unsatisfied
conditions and accept for payment and purchase all validly
tendered Notes that are not validly withdrawn prior to expiration,
may extend the tender offer or may amend the tender offer. Full
details of the terms and conditions of the tender offer are
included in the Tender Offer Documents.
J.P. Morgan Securities Inc., Banc of America Securities LLC,
Barclays Capital Inc., Deutsche Bank Securities Inc., Goldman,
Sachs & Co. and Morgan Stanley & Co., Incorporated will act as
Dealer Managers and Solicitation Agents for the tender offer and
consent solicitation. Questions regarding the tender offer or
consent solicitation may be directed to J.P. Morgan Securities
Inc. at 212-270-1477 (collect).
D.F. King & Co., Inc., will act as the Information Agent for the
tender offer and consent solicitation. Requests for documents
related to the tender offer and consent solicitation may be
directed to 212-269-5550 (for brokers and banks) or 800-549-6697
(for all others).
Universal City Development Partners Ltd. owns and operates
Universal's Islands of Adventure and Universal Studios Florida
theme parks, the Universal's CityWalk Orlando entertainment
complex, sound stages and movie and production facilities in
Orlando, Fla.
* * *
Moody's Investors Service placed Universal City Florida Holding
Co. II's B2 Corporate Family Rating and Caa1 Probability of
Default Rating on review for possible upgrade. The review follows
Universal City Development Partners, Ltd's amendments to the terms
of its consulting agreement with Steven Spielberg and partnership
agreement with NBC Universal, and its announced plan to refinance
Universal Orlando's 2010 debt maturities with new bonds and a
renewal and increase in the credit facility. Moody's also
assigned provisional ratings to UCDP's proposed new debt as
detailed below.
UNIVERSAL CITY: Moody's Reviews 'B2' Corporate Family Rating
------------------------------------------------------------
Moody's Investors Service placed Universal City Florida Holding
Co. II's B2 Corporate Family Rating and Caa1 Probability of
Default Rating on review for possible upgrade. The review follows
Universal City Development Partners, Ltd's ("Universal Orlando"
together with its parent UCFH) amendments to the terms of its
consulting agreement with Steven Spielberg and partnership
agreement with NBC Universal, and its announced plan to refinance
Universal Orlando's 2010 debt maturities with new bonds and a
renewal and increase in the credit facility. Moody's also
assigned provisional ratings to UCDP's proposed new debt as
detailed below.
The review reflects Moody's increased level of confidence that the
extension of the consultant's right to put the license fees back
to the company in exchange for a lump sum payment to no earlier
than 2017 from 2010, coupled with improved credit market
conditions, will allow Universal Orlando to access markets on
sufficiently economic terms to address its near-term liquidity
needs and retire upcoming maturing debt at par. Moody's also does
not anticipate that Universal Orlando's cash operating and
interest costs will change materially as a result of the
modifications to the consulting and partnership agreements and the
proposed refinancing, whereas the current B2 CFR factors in the
potential for a more adverse increase in such cash costs. The
existing instrument ratings are not covered by the review. These
ratings, along with the CFR and PDR, would remain unchanged or
potentially be lowered further if the proposed refinancing does
not occur and the company is unable to address its refinancing
needs in a timely manner. Moody's will withdraw the ratings on
the existing instruments if they are repaid in conjunction with
the refinancing.
Moody's has taken these rating actions:
On Review for Possible Upgrade:
Issuer: Universal City Florida Holding Co. II
-- Corporate Family Rating, Placed on Review for Possible
Upgrade, currently B2
-- Probability of Default Rating, Placed on Review for Possible
Upgrade, currently Caa1
Assignments:
Issuer: Universal City Development Partners, Ltd.
-- $75 Million Senior Secured Revolver, Assigned (P)Ba2, LGD2 -
23%
-- $900 Million Senior Secured Term Loan, Assigned (P)Ba2, LGD2-
23%
-- $400 Million Senior Unsecured Notes due 2015, Assigned (P)B3,
LGD5 - 81%
-- $225 Million Senior Subordinated Notes due 2016, Assigned
(P)B3, LGD6 - 94%
Outlook Actions:
Issuer: Universal City Florida Holding Co. II
-- Outlook, Changed To Rating Under Review From Negative
The newly assigned ratings are based on Moody's expectation that
Universal Orlando's CFR and PDR will be upgraded to B1 if the
refinancing closes in accordance with the proposed terms. The
prospective B1 CFR is based on the assumption that Universal
Orlando's existing notes and credit facility will be repaid at par
with the proceeds from the new debt offerings and existing cash,
and that Universal Orlando will maintain sufficient cash in escrow
to fund the retirement of any un-redeemed notes. Moody's believes
these actions would improve Universal Orlando's liquidity position
and significantly reduce its near-term default risk, which in turn
would drive the indicated prospective improvement in its PDR and
CFR. The CFR and PDR would likely remain unchanged (or possibly
lower) if any of the aforementioned conditions are not expected to
be met.
In addition, Moody's expects to reassign Universal Orlando's CFR
and PDR to UCDP from UCFH upon closing of the refinancing as there
would no longer be any rated debt at UCFH.
The B1 CFR would reflect Universal Orlando's strong consumer draw
created by the company's movie- and entertainment-themed rides and
attractions, tempered by concentration risk associated with the
single-site theme parks and reliance on cyclical discretionary
consumer spending. Moody's expects debt-to-EBITDA to be at or
slightly above 6x (incorporating Moody's adjustments and an
estimate of the Spielberg put obligation in debt) in 2009 and
2010, which would weakly position the company within the B1 CFR
category. Moody's anticipates that Universal Orlando will
maintain sufficient cushion under the financial maintenance
covenants in its credit facility to weather the current economic
downturn, and this is a key factor supporting the B1 CFR. Moody's
believes earnings will improve once the Wizarding World of Harry
Potter opens in 2010 and the economy stabilizes over the next
several years. Moody's expects earnings improvement along with
modest debt reduction to prevent debt-to-EBITDA from being
sustained over 6.0x.
The (P)Ba2 rating on the proposed senior secured credit facility
reflects the benefits of the collateral package, which consists of
a first lien on substantially all of the tangible and intangible
assets of UCDP and its subsidiaries. The lien position in favor
of the consulting agreement was also clarified as part of the
agreement amendment. UCDP's obligations under the amended
consulting agreement will be secured by a second lien on the
tangible personal and real property securing the proposed credit
facility, but will exclude other types of collateral securing the
proposed credit facility such as intellectual property.
The (P)B3 ratings on the proposed $400 million senior unsecured
notes due 2015 and $225 million senior subordinated notes due 2016
reflect the effective subordination to the senior secured credit
facility and to UCDP's obligations under the consulting agreement
with regard to the respective collateral packages. The 2016 notes
are also contractually subordinated to the credit facility and
2015 notes. The contractual subordination to the 2015 notes
drives the differential in the loss given default assessments on
the 2015 notes (LGD5 -- 81%) and the 2016 notes (LGD6 -- 94%).
The 2015 and 2016 notes will be joint and several obligations of
co-borrower UCDP Finance, Inc. The provisional ratings are subject
to Moody's review of the final terms of the proposed debt
instruments.
Moody's last rating action on Universal Orlando occurred on
April 1, 2009 when it downgraded the company's PDR to Caa1 from
B3.
Universal Orlando'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 Universal Orlando's core industry and Universal
Orlando's ratings are believed to be comparable to those of other
issuers of similar credit risk.
UCDP, headquartered in Orlando Florida, operates the Universal
Studios Florida, Universal Islands of Adventure theme parks and
Universal CityWalk Orlando, a dining, retail and entertainment
complex. The company is a 50-50 joint venture of Blackstone
Capital Partners and a wholly-owned subsidiary of Vivendi
Universal Entertainment LLP (a subsidiary of NBC Universal).
Annual revenue is approximately $816 million for the 12 months
ended September 2009.
UTGR INC: Settles With Greyhound Owners
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According to Bill Rochelle at Bloomberg News, UTGR Inc. reached a
settlement of what it calls 'the most significant operational
restructuring to be achieved.' The so-called racino was losing
$9 million a year under an agreement with the Rhode Island
Greyhound Owners Association Inc. The settlement, to be
considered at a Nov. 17 hearing before the bankruptcy court in
Providence, Rhode Island, calls for paying $2 million up front.
In return, the dog owners' association will allow termination of
the agreement.
Another $3 million will be paid in installments over one year
following confirmation of a Chapter 11 plan. The greyhound
owners' association claimed damages would be $99 million.
UTGR Inc. is the operator of the Twin River racetrack-casino in
Lincoln, Rhode Island. UTGR filed for Chapter 11 on June 23
(Bankr. D. Rhode Island Case No. 09-12418). The Debtors selected
Jager Smith P.C. as counsel, and Winograd, Shine & Zacks P.C. as
their co-counsel. It also hired Zolfo Cooper LLC as bankruptcy
consultants and special financial advisors. Donlin Recano serves
as claims and notice agent. In its bankruptcy petition, the
Company estimated assets of less than $500 million and debt
exceeding $500 million.
VALENCE TECHNOLOGY: Terminates VP Alastair Johnston's Employment
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Valence Technology, Inc., reports that the employment of Alastair
Johnston, the Company's Vice President, Worldwide Sales &
Marketing, terminated effective October 21, 2009. In connection
with Mr. Johnston's departure, the Company and Mr. Johnston
entered into a settlement and release agreement.
About Valence Technology Inc.
Valence Technology Inc. (NASDAQ:VLNC) -- http://www.valence.com/
-- develops and markets the industry's commercially available,
safe, large-format family of lithium phosphate rechargeable
batteries. Valence holds a worldwide portfolio of issued and
pending patents relating to its lithium phosphate rechargeable
batteries. The company has facilities in Austin, Texas; Las
Vegas, Nevada; Mallusk, Northern Ireland and Suzhou, China.
Going Concern Doubt
On June 5, 2009, PMB Helin Donovan, LLP, in Austin, Texas,
expressed substantial doubt about Valence Technology's ability to
continue as a going concern after it audited the company's
financial statements for the fiscal years ended March 31, 2009,
2008 and 2007. The firm pointed to the company's recurring losses
from operations, negative cash flows from operations, and net
stockholders' capital deficiency.
VERENIUM CORP: Rho Stake Falls Below 5% After Reverse Stock Split
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New York-based Rho Capital Partners, Inc.; its controlling
shareholders, Joshua Ruch, Habib Kairouz and Mark Leschly; and its
various affiliated investment vehicles report that as the result
of ongoing issuances of Common Stock by Verenium Corporation and a
reverse 1:12 split of its Common Stock effected on September 9,
2009, the Rho entities have ceased as of October 16 to own more
than 5% of the 11,715,228 Shares of Verenium Common Stock issued
and outstanding on such date, based on Share information provided
by the Company.
Rho may be deemed for purposes of Rule 13d-3 under the Securities
Exchange Act of 1934, as amended, to be the beneficial owner of
the 196,835 Shares of Verenium Common Stock held of record by two
investment vehicles, constituting 1.7% of the 11,715,228 Shares of
Verenium Common Stock outstanding as of October 16.
Messrs. Ruch, Kairouz and Leschly may be deemed to share
investment and voting control over 358,306 shares of Verenium
Common Stock held by various investment vehicles. Messrs. Ruch,
Kairouz and Leschly accordingly may be deemed beneficially to own
in the aggregate 3.6%, 3.1% and 3.2%, respectively, of the
11,715,228 issued and outstanding shares of Verenium Common Stock
outstanding as of October 16, 2009. Other than the shares of
Verenium Common Stock in which they have a pecuniary interest,
each of Messrs. Ruch, Kairouz and Leschly disclaims beneficial
ownership of the Shares.
Bankruptcy Warning
The Company has indicated that based on its operating plan its
existing working capital may not be sufficient to meet cash
requirements to fund planned operating expenses, capital
expenditures, required and potential payments under its 2007 Notes
and 2008 Notes, and working capital requirements beyond 2009
without additional sources of cash or the deferral, reduction or
elimination of significant planned expenditures. The Company said
these factors raise substantial doubt about the Company's ability
to continue as a going concern.
As of June 30, 2009, the Company had total assets of
$157.3 million; and total liabilities of $168.4 million, resulting
in stockholders' deficit of $11.13 million. The Company has a
working capital deficit of $16.8 million and an accumulated
deficit of $630.2 million as of June 30, 2009.
The Company has said if it cannot obtain sufficient additional
financing in the short-term, it may be forced to restructure or
significantly curtail its operations, file for bankruptcy or cease
operations.
As reported by the Troubled Company Reporter on October 12, 2009,
Verenium priced an underwritten public offering of 2,250,000
shares of its common stock and warrants to purchase an additional
900,000 shares of common stock at a price to the public of $6.00
per unit. Each unit consists of one share of common stock and a
warrant to purchase 0.40 of a share of common stock. The shares
of common stock and warrants are immediately separable and will be
issued separately. The warrants have a five-year term and an
exercise price of $7.59.
Net proceeds after estimated underwriting discounts and
commissions and estimated expenses, will be roughly $12.3 million,
providing the Company with several additional months of operating
capital into 2010. The offering was to close October 9, 2009,
subject to the satisfaction of customary closing conditions.
The TCR said September 11, 2009, that Verenium's 1-for-12 reverse
split of its common stock became effective September 9, 2009. The
1-for-12 reverse stock split reduced the number of shares of the
Company's common stock outstanding from roughly 111.3 million to
roughly 9.3 million shares.
About Verenium
Based in Cambridge, Massachusetts, Verenium Corporation (Nasdaq:
VRNMD) -- http://www.verenium.com/-- is a leader in the
development and commercialization of cellulosic ethanol, an
environmentally-friendly and renewable transportation fuel, as
well as high-performance specialty enzymes for applications within
the biofuels, industrial, and animal health markets. The Company
possesses integrated, end-to-end capabilities and cutting-edge
technology in pre-treatment, novel enzyme development,
fermentation and project development for next-generation biofuels.
Through Vercipia, the Company is moving rapidly to commercialize
cellulosic technology for the production of ethanol from a wide
array of non-food feedstocks, including dedicated energy crops,
agricultural waste, and wood products. In addition to the vast
potential for biofuels, a multitude of large-scale industrial
opportunities exist for the Company for products derived from the
production of low-cost, biomass-derived sugars.
Verenium's Specialty Enzyme business harnesses the power of
enzymes to create a broad range of specialty products to meet
high-value commercial needs. Verenium's world class R&D
organization is renowned for its capabilities in the rapid
screening, identification, and expression of enzymes-proteins that
act as the catalysts of biochemical reactions.
VIRGIN MOBILE: Stockholders' Meeting on Nov. 24 to OK Sprint Deal
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A Special Meeting of Stockholders of Virgin Mobile USA, Inc., will
be held on November 24, 2009 at 9:00 a.m., local time, at the
Courtyard by Marriott Basking Ridge, 595 Martinsville Road, in
Basking Ridge, New Jersey, for these purpose:
1. To consider and vote on a proposal to adopt the Agreement
and Plan of Merger, dated as of July 27, 2009, among
Sprint Nextel Corporation, Sprint Mozart, Inc., a wholly
owned subsidiary of Sprint Nextel, and Virgin Mobile USA,
and
2. To approve the adjournment of the meeting, if necessary or
appropriate, to solicit additional proxies if there is an
insufficient number of votes at the meeting to approve the
proposal.
The Virgin Mobile USA board of directors has chosen the close of
business on October 22, 2009 as the "record date" that will
determine the stockholders who are entitled to receive notice of,
and to vote at, the meeting or at any adjournment or postponement
of the meeting.
A copy of the proxy statement/prospectus dated October 23, 2009,
is available at no charge at http://ResearchArchives.com/t/s?4772
About Virgin Mobile USA
Virgin Mobile USA, Inc. (NYSE:VM) is a mobile virtual network
operator, commonly referred to as an MVNO, offering prepaid, or
pay-as-you-go, and, following the acquisition of Helio LLC in
August 2008, postpaid wireless communications services, including
voice, data, and entertainment content, without owning a wireless
network. The Company uses the "Virgin Mobile" name and logo under
license from Virgin Enterprises Ltd. The Company offers its
services over the nationwide Sprint PCS network under the terms of
the PCS Services Agreement between the Company and Sprint Nextel
Corporation.
On July 28, 2009, Sprint Nextel and the Company announced that
their boards of directors have approved a definitive agreement for
Sprint Nextel to acquire the Company in an all equity deal. Each
of the Company's stockholders, except for the Virgin Group and SK
Telecom, will receive the equivalent of $5.50 in Sprint Nextel
common shares for each share of the Company's Class A common
stock, but in no event will the exchange ratio be less than 1.0630
or greater than 1.3668. The Virgin Group and SK Telecom will
receive 93.09% and 89.84%, respectively, of that received by the
Company's other stockholders. The transaction is subject to the
approval of the Company's stockholders as well as customary
conditions and regulatory approvals. Sprint Nextel and the
Company expect the transaction to close in the fourth quarter of
2009 or early 2010.
At June 30, 2009, the Company had $320.68 million in total assets
and $577.35 million in total liabilities. At June 30, 2009, the
Company had $267.16 million in stockholders' deficit attributable
to Virgin Mobile USA Inc., $10.49 million in non-controlling
interest, and $256.66 million in total deficit.
VYTERIS INC: Lehman Brothers Bankhaus Discloses 9.1% Stake
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Lehman Brothers Bankhaus AG (i. Ins.) discloses it may be deemed
to beneficially own 662,002 shares or roughly 9.1% of the common
stock of Vyteris, Inc.
As of December 31, 2008, Lehman Brothers Bankhaus had shared
voting and investment power over the securities. At some time
prior to September 16, 2008, Lehman Brothers Bankhaus purchased
the Securities pursuant to a master repurchase agreement. Under
this agreement, Lehman Brothers Bankhaus had shared voting and
investment power over the Securities with other parties to the
agreement.
Lehman Brothers Bankhaus commenced insolvency proceedings in
Germany on November 13, 2008. As of October 22, 2009, Lehman
Brothers Bankhaus has not been able to locate any confirmation for
its purchase of the Securities. As a result, Lehman Brothers
Bankhaus has not been able to rule out the possibility that it had
shared voting or investment power over the Securities prior to
2008. Prior to the commencement of insolvency proceedings, Lehman
Brothers Bankhaus may also have shared voting and investment power
with Lehman Brothers Holdings, Inc., of which Lehman Brothers
Bankhaus is a wholly owned subsidiary.
About Lehman Brothers Bankhaus
Lehman Brothers Bankhaus AG filed for Chapter 15 bankruptcy
protection in New York on April 29, 2009 (Bankr. S.D.N.Y. Case No.
09-12704). The petition for Chapter 15 bankruptcy listed more
than US$1 billion each in debts and assets. The report discloses
as of April 1, 457 creditors had filed claims against the German
unit, of which 22 were based in the U.S.
The German affiliate, established in 1987, has branch offices in
South Korea, London and Milan, the report states. The offices in
London and Milan are being wound down as part of the German court
proceedings and the Korean office is subject to a moratorium on
business activities by local banking authorities.
In the Chapter 15 petition, Dr. Michael C. Frege served as
insolvency administrator and foreign representative. Judge James
M. Peck presides over the case. David Farrington Yates, Esq., at
Sonnenschein, Nath & Rosenthal LLP in New York, serves as Chapter
15 Petitioner's Counsel.
About Vyteris
Vyteris, Inc., holds approximately 50 U.S. patents relating to the
delivery of drugs across the skin using a mild electric current
and operates in one business segment. The Company is pursuing
peptide and small molecule opportunities through, among other
things, drug development partnerships.
As of June 30, 2009, the Company had $1,051,443 in total assets
and $35,151,494 in total liabilities, resulting in $34,100,051 in
stockholders' deficit.
The Company said the report of the independent registered public
accounting firm relating to the audit of the Company's
consolidated financial statements for the year ended December 31,
2008, contains an explanatory paragraph expressing uncertainty
regarding the Company's ability to continue as a going concern
because of its operating losses and its continuing need for
additional capital. The Company said failure to obtain financing
will require management to substantially curtail, if not cease,
operations, which will result in a material adverse effect on the
financial position and results of operations of the Company.
WESTMORELAND COAL: Tontine to Assign Stake to New Entity
--------------------------------------------------------
Tontine Capital Partners, L.P.; Tontine Capital Management,
L.L.C.; Tontine Partners, L.P.; Tontine Management, L.L.C.;
Tontine Overseas Associates, L.L.C.; Jeffrey L. Gendell disclose
beneficial ownership of 3,201,635 shares or roughly 27.0% of
Westmoreland Coal Company common stock.
The Tontine entities expect that they may hold or dispose of their
securities of the Company as a part of their ongoing investment
strategy. Recently, certain of the Tontine entities determined to
form TCP Overseas Master Fund II, L.P., during the fourth quarter
of 2009. It is anticipated that TCP 2 will become the beneficial
owner of an as-yet-undetermined portion of the securities of the
Company currently held by the Tontine entities. To the extent
that TCP 2 acquires beneficial ownership of any such securities,
TCP 2 may hold or dispose of such securities or may purchase
additional securities of the Company, at any time and from time to
time in the open market or otherwise.
Except as set forth, the Tontine entities relate they do not have
any current intention, plan or proposal with respect to: (a) the
acquisition by any person of additional securities of the Company,
or the disposition of securities of the Company; (b) an
extraordinary corporate transaction, such as a merger,
reorganization or liquidation, involving the Company or any of its
subsidiaries; (c) a sale or transfer of a material amount of
assets of the Company or any of its subsidiaries; (d) any change
in the present Board of Directors or management of the Company,
including any plans or proposals to change the number or term of
directors or to fill any existing vacancies on the Board; (e) any
material change in the present capitalization or dividend policy
of the Company; (f) any other material change in the Company's
business or corporate structure; (g) changes in the Company's
charter, bylaws or instruments corresponding thereto or other
actions which may impede the acquisition of control of the Company
by any person; (h) causing a class of securities of the Company to
be delisted from a national securities exchange, if any, or cease
to be authorized to be quoted in an inter-dealer quotation system
of a registered national securities association; (i) a class of
equity securities of the Company becoming eligible for termination
of registration pursuant to Section 12(g)(4) of the Securities
Act, or (j) any action similar to any of those enumerated.
On March 4, 2008, TP and TCP purchased senior secured convertible
promissory notes of the Company in the original principal amount
of $15,000,000 pursuant to a Senior Secured Convertible Note
Purchase Agreement dated as of March 4, 2008, by and among the
Company, TCP and TP as purchasers, and Tontine Capital Associates,
L.P. as collateral agent. Each Note is convertible, in whole or
in part, at any time, at the option of the holder up to the
outstanding principal amount of the Note held by such Purchaser at
the time of such conversion into a number of fully paid and
nonassessable shares of Common Stock equal to the quotient
obtained by dividing (A) the principal amount of the Notes to be
converted (including all accrued and unpaid interest) by (B) the
Conversion Price (the Conversion Price will initially be $10.00
per share of Common Stock and will be subject to further
adjustments from time to time). If the calculation results in the
aggregate number of shares of Common Stock to be issued in
connection with all such conversions to exceed 19.9% of the number
of shares of Common Stock outstanding immediately prior to the
execution of the Note Purchase Agreement, the principal amount of
the Notes resulting in such excess amounts will not be converted
into Common Stock and will instead be paid in cash by the Company
to such Purchaser at the time of such conversion.
The Company is required to pay interest on the Notes, which the
Company may pay, at its option, (i) in cash or (ii) in kind as of
the relevant interest payment date (the last day of each March,
June, September and December, commencing on March 31, 2008) by
increasing the principal amount of each Note in an aggregate
amount equal to the interest due on such interest payment date;
provided, however, that the Company may not pay interest on the
Notes in kind as of the relevant interest payment date by
increasing the principal amount of each Note if this would cause
the aggregate principal amount of the Notes to exceed $18,779,460.
For the interest payment periods ended March 31, 2008, June 30,
2008, December 31, 2008, March 31, 2009, and June 30, 2009, the
Company elected to pay interest on the Notes in kind, increasing
the aggregate principal amount to $16,506,924.
For so long as the Tontine entities own at least 10% of the
outstanding shares of Common Stock (including the shares issuable
upon conversion of the Notes on an as-converted basis), the
Tontine entities shall have the right to designate two members of
the Board who shall be reasonably acceptable to the Board and to
appoint an observer to attend meetings of the Board. Tontine has
not designated any individuals to serve on the Board or act as a
Board observer.
Pursuant to the Note Purchase Agreement, the Company was required
to amend the Amended and Restated Rights Agreement, dated as of
February 7, 2003, between Company and EquiServe Trust Company,
N.A., as amended, to permit TCP and its affiliates to purchase,
without triggering the rights under the Rights Plan, up to 34.5%
of the sum of (x) the number of shares of Common Stock issued and
outstanding at the time of such calculation, (y) the number of
shares of Common Stock purchased by the Company from stockholders
after March 4, 2008 and (z) the number of shares of Common Stock
issuable upon conversion of the Notes which have not been
converted at the time of such calculation.
Pursuant to a Registration Rights Agreement, dated as of March 4,
2008, by and among TCP, TP, TOA, TCM, Mr. Gendell and the Company,
on April 14, 2009, the Company filed a registration statement on
Form S-1 registering, among other things, the resale of 3,428,889
shares of Common Stock held by the Tontine entities. The
Registration Statement was declared effective on May 22, 2009.
The Company has agreed to maintain the effectiveness of the
Registration Statement until the Tontine entities no longer hold
any Registrable Securities. In addition, the Tontine entities
have certain demand and piggyback registration rights.
WML Waiver
As reported by the Troubled Company Reporter, effective October 7,
2009, Westmoreland Mining LLC, a subsidiary of Westmoreland Coal
Company, entered into a Waiver and Consent with the institutional
investors who own notes pursuant to WML's $125.0 million 8.02%
Senior Guaranteed Secured Note Purchase Agreement. In addition,
effective the same date, WML entered into a Waiver and Consent
with PNC Bank, National Association, who is a party to the
Revolving Credit Agreement dated June 26, 2008.
The Company had advised the Noteholders and PNC, in its capacity
as agent, that, as a result of the unexpected outage and
subsequent shutdown of the Colstrip Unit 4 power plant and for
other reasons set forth in the Waiver and Amendment Request, dated
August 25, 2009 -- delivered to the Noteholders and to the Agent
-- the Company has failed to comply, as of the end of its fiscal
quarter ended June 30, 2009, and will fail to comply as of the end
of each of its three fiscal quarters ending September 30, 2009,
December 31, 2009, and March 31, 2010, respectively, with Section
8.2.18 of the Credit Agreement, pursuant to which the Company
covenants that it will not permit the ratio of Consolidated Net
Indebtedness of the Company and its Subsidiaries to Consolidated
EBITDA, calculated as of the end of each such Affected Quarter, to
exceed 3.00 to 1.00.
The Leverage Ratio Waivers waive, subject to certain conditions,
any potential defaults or actual events of default consisting of
or resulting from WML's failure (or, as the case may be,
anticipated failure) to comply with the leverage ratio covenant
contained in the Note Purchase Agreement and the Revolving Credit
Agreement.
The Leverage Ratio Waivers waive existing and future leverage
ratio covenant defaults through and including the first quarter of
2010 assuming WML meets certain conditions, including meeting the
adjusted leverage ratio covenants for each quarter and having the
Colstrip Unit 4 power plant come back on-line by November 30,
2009. Upon the execution of the Leverage Ratio Waivers, WML is
again able to access funds under the $25.0 million revolving line
of credit.
About Westmoreland Coal
Westmoreland Coal Company (NYSE Amex:WLB) --
http://www.westmoreland.com/-- is the oldest independent coal
company in the United States. The Company's coal operations
include coal mining in the Powder River Basin in Montana and
lignite mining operations in Montana, North Dakota and Texas. Its
power operations include ownership of the two-unit ROVA coal-fired
power plant in North Carolina.
As of June 30, 2009, the Company had $793.36 billion in total
assets and $1.018 billion in total liabilities, resulting in
$221.74 million in Westmoreland Coal Company shareholders'
deficit.
Going Concern Opinion
The Company has suffered recurring losses from operations, has a
working capital deficit and a net capital deficiency that raise
substantial doubt about the ability of the Company to continue as
a going concern.
WILLIAM ALVEAR: Case Summary & 20 Largest Unsecured Creditors
-------------------------------------------------------------
Joint Debtors: William Alvear, Esq.
Elizabeth Alvear
8120 Moonstone Circle
Las Vegas, NV 89128
Bankruptcy Case No.: 09-30022
Chapter 11 Petition Date: October 23, 2009
Court: United States Bankruptcy Court
District of Nevada (Las Vegas)
Judge: Mike K. Nakagawa
Debtors' Counsel: Charles T. Wright, Esq.
Piet & Wright
3130 S. Rainbow Blvd., Suite 304
Las Vegas, NV 89146
Tell: (702) 566-1212
Fax: (702) 566-4833
Email: todd.wright@pietwright.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
According to the schedules, the Company has assets of $1,358,900,
and total debts of $2,114,287.
A full-text copy of the Debtors' petition, including a list of
their 20 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/nvb09-30022.pdf
The petition was signed by the Joint Debtors.
XIOM CORP: Registers 600,000 Shares Issuable Under 2009 Stock Plan
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XIOM Corp. filed with the Securities and Exchange Commission a
Registration Statement filed in accordance with the requirements
of Form S-8 to register 600,000 shares of the Company's Common
Stock issuable under the 2009 Employee and Consultant Stock Plan.
A full-text copy of the registration statement is available at no
charge at http://ResearchArchives.com/t/s?4774
A full-text copy of the 2009 Employee and Consultant Stock Plan is
available at no charge at http://ResearchArchives.com/t/s?4775
XIOM previously registered 2,375,000 shares of its common stock,
$0.0001 par value per share, available for grant of awards under
the Company's 2008 Employee and Consultant Stock Plan. The
registration of the shares of Common Stock was filed on a Form S-8
registration Statement filed with the Securities and Exchange
Commission on November 10, 2008 (File Number: 333-155253), in
accordance with the Securities Act of 1933, as amended.
On June 1, 2009, the Company filed Post-effective Amendment No. 1
to the initial Registration Statement on Form S-8 to register an
additional 1,000,000 shares of Common Stock available for grant
pursuant to the Plan Amendment.
All shares of Common Stock covered by the Company's Amended 2008
Employee and Consultant Stock Plan have been issued and the
Company is terminating the Registration Statement on Form S-8, as
amended.
Xiom Corp.'s balance sheet at June 30, 2009, showed total assets
of $1,961,561 and total liabilities of $2,874,092, resulting in a
stockholders' deficit of $912,531.
The Company said that there is substantial doubt about its ability
to continue as a going concern. The Company stated that it has a
stockholders' deficit as of June 30, 2009, and incurred a net loss
for the three and nine months then ended. However, the Company
has seen steady sales orders for the patented industrial thermal
spray technology and related powder formulas. Furthermore, the
Company plans to continue raising capital through a series of
private placement transactions during the next 12 months. It also
plans to continue to expand sales by significantly increasing
domestic marketing efforts, including pursuing major contracts
through its network of strategic alliance relationships. As a
result of these factors, management believes it will have
sufficient resources to meet the Company's cash flow requirements
for at least twelve months.
Headquartered in West Babylon, New York, Xiom Corp. (OTC BB: XMCP)
-- http://xiom-corp.com/-- manufactures industrial based thermal
spray coating systems in the United States. It offers XIOM 1000
Thermal Spray system, which is used to apply plastic powder
coatings on steel, aluminum, and non-ferrous substrates, as well
as on wood, plastic, masonry, and fiberglass. The company also
offers plastic powders designed specifically for thermal spraying.
XIOM Corp. sells its spray systems directly to commercial
customers and coating contractors. The company has introduced a
new high production rate spray gun, the XIOM 5000, which sprays up
to five times as fast as the current Xiom 1000 gun and has many
benefits over the present technology.
* Fed's Tarullo Says Overhaul Must Address 'Too Big to Fail'
------------------------------------------------------------
According to reporting by Michael McKee and Timothy R. Homan at
Bloomberg, Federal Reserve Governor Daniel Tarullo said
legislation to overhaul financial regulation must address the
problem of large firms whose failure could pose a threat to the
rest of the system. "The reform process cannot be judged a
success unless it substantially reduces systemic risk generally
and, in particular, the too-big-to-fail problem," Tarullo said in
a speech in Washington.
Congress is considering an overhaul of regulation and oversight of
financial firms after risky investments triggered $1.1 trillion in
credit losses and writedowns in the U.S. and prompted bailouts of
companies including American International Group Inc. and
Citigroup Inc.
* Big 3 Automakers Reduce Lobbying Expenses
-------------------------------------------
According to Jonathan D. Salant at Bloomberg News, General Motors
Co. reported spending $1.36 million trying to influence Congress
and federal agencies in July, August and September, according to
the filings with the U.S. Senate. Its predecessor in Chapter 11,
General Motors Corp., spent $2.8 million from January to March and
$2.76 million between April and June. The $6.92 million in
lobbying expenses by GM during the first nine months of this year
is down from $9.78 million it spent during the comparable period
last year. The Company's political action committee hasn't made
any contributions in 2009 after donating $485,508 during the 2008
elections, Federal Election Commission records show.
Chrysler Group LLC reported spending $2.6 million on lobbying
during the first nine months of 2009, down from $4.7 million
during the same period a year ago. Chrysler is now run by Turin,
Italy based Fiat SpA.
Ford Motor Co., the only one of the Big 3 U.S. carmakers to avoid
bankruptcy, spent $5.3 million on lobbying, compared with $5.8
million from January to September in 2008.
* Large Companies With Insolvent Balance Sheets
-----------------------------------------------
Total
Share-
Total holders'
Assets Equity
Company Ticker ($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
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then-ending.
For copies of court documents filed in the District of Delaware,
please contact Vito at Parcels, Inc., at 302-658-9911. For
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*********
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,
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