/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/091102.mbx T R O U B L E D C O M P A N Y R E P O R T E R Monday, November 2, 2009, Vol. 13, No. 303 Headlines ALASKA AIR: S&P Affirms Corporate Credit Rating at 'B' AMERICAN HOME: CFO Loses SEC Discovery Feud AMERICAN HOMEPATIENT: Forbearance Pact Extended to December 1 AMERIGAS PARTNERS: Fitch Affirms Issuer Default Rating at 'BB+' APPALACHIAN COAL: Massey Energy Buys More Coal Reserves ARAMARK CORP: Bank Debt Trades at 8.28% Off in Secondary Market ATP OIL & GAS: Bank Debt Trades at 3% Off in Secondary Market AUTOBACS STRAUSS: Hopes to Present Reorg. Plan in Next Six Weeks BANK USA, NA: Closed by Receivers; U.S. Bank Assumes All Deposits BAYOU GROUP: Judge Gives Nod to Disclosure Statement BERRY PLASTICS: To Issue $620MM New Notes to Fund Pliant Deal BROOK MAYS: Atypical Payment Points to Avoidable Preference CALIFORNIA COASTAL: Case Summary & 25 Largest Unsecured Creditors CALIFORNIA NATIONAL BANK: Closed; U.S. Bank Assumes All Deposits CANWEST GLOBAL: Gets Canada Court OK to Save National Post CAPMARK FINANCIAL: Chapter 11 Filing Won't Affect Fitch's Ratings CAPMARK FINANCIAL: Court Enters Injunction on Utility Providers CAPMARK FINANCIAL: Gets Nod to Run Business in Ordinary Course CAPMARK FINANCIAL: Proposes to Pay Sales & Use Taxes CAPMARK FINANCIAL: Proposes to Reject 5 Office Facility Leases CARITAS HEALTHCARE: 2nd Bidding Round Possible for 2 Assets CATHOLIC CHURCH: Survivors Want Lift Stay for Depositions CATHOLIC CHURCH: Survivors Want to Designate Del. Bishop as Debtor CATHOLIC CHURCH: Wilmington Gets Interim Nod to Pay Employees CENTAUR PA LAND: Voluntary Chapter 11 Case Summary CHANA TAUB: N.Y. Rent Stabilization Spat Sent to State Court CHARTER COMMS: Bank Debt Trades at 9.3% Off in Secondary Market CHINA MEDIAEXPRESS: Receives Delisting Notice from NYSE Amex CHRISTO BARDIS: Higgins Ranch Project Auctioned Off CIB MARINE: Wins Confirmation of Reorganization Plan CIT GROUP: Files for Chapter 11 with Prepackaged Plan CIT GROUP: Icahn Switches Vote, Now Backs Prepack Chapter 11 CIT GROUP: Case Summary & 75 Largest Unsecured Creditors CITIZENS NATIONAL BANK: Closed; U.S. Bank Assumes All Deposits CITY OF PRICHARD: Robert Hedge to Seek Explanations on Fin'l State CITY OF PRICHARD: Voluntary Chapter 9 Case Summary COMDISCO HOLDINGS: Litigation Against Former Officers Dimissed COMMSCOPE INC: Bank Debt Trades at 3.55% Off in Secondary Market COMMUNICATION INTELLIGENCE: Posts $2,575,000 Loss in Third Quarter COMMUNITY BANK OF LEMONT: Closed; U.S. Bank Assumes All Deposits COMPETITIVE TECHNOLOGIES: MHM Mahoney Raises Going Concern Doubt CONMED CORPORATION: Moody's Affirms 'Ba3' Corporate Family Rating CONSTELLATION BRANDS: Debt Trades at 4% Off in Secondary Market CONSULIER ENGINEERING: To Voluntary Delist Shares from Nasdaq COTT CORP: Moody's Assigns 'Caa1' Rating on $200 Mil. Notes COTT CORP: S&P Raises Corporate Credit Rating to 'B' COYOTES HOCKEY: Toronto Argonaut Owners May Bid for Hockey Team DANA HOLDING: Bank Debt Trades at 12.07% Off in Secondary Market DELPHI CORP: Worker Protests Pension Loss Before Senate DELUXE ENTERTAINMENT: S&P Affirms 'B-' Corporate Credit Rating DEX MEDIA EAST: Bank Debt Trades at 22% Off in Secondary Market DEX MEDIA WEST: Bank Debt Trades at 12.35% Off in Secondary Market DOLE FOOD: Moody's Gives Positive Outlook on 'B2' Corp. Rating DOLLAR GENERAL: Bank Debt Trades at 4.15% Off in Secondary Market ENGEX INC: NYSE Amex Accepts Listing Compliance Plan EUROFRESH INC: Court Okays Reorganization Plan EVERETT CROSSING: Landlord Doesn't Get Relief from Stay FAIRPOINT COMMS: Bankruptcy Court Enforces Automatic Stay FAIRPOINT COMMS: Gets Interim Nod to Honor Customer Programs FAIRPOINT COMMS: Proposes to Pay Prepetition Shipping Charges FBOP CORPORATION: Nine Banking Units Closed by Receivers FERRO CORP: S&P Puts 'CCC+' Rating on CreditWatch Positive FREEDOM COMMUNICATIONS: JPMorgan Blasts Stay Request FRIAR TUCK: Resort's Auction Moved to Nov. 19 FRONTIER COMMS: California OKs Buyout of Verizon Wireline Ops. FRONTIER COMMS: South Carolina OKs Acquisition of Verizon Wireline FRONTIER COMMS: Nevada OKs Frontier's Buyout of Verizon Wireline GENERAL MOTORS: Fisker Automotive in Talks to Buy Wilmington Plant GENERAL MOTORS: GM to Address Magna's Bid on November 3 Meeting GENERAL MOTORS: Nixes Daewoo Rights Offering GENERAL MOTORS: SAAB Deal Nears Completion as Konigsegg Gets Loans GENERAL MOTORS: SAIC Motor May Acquire Stake in GM's India Unit GOODYEAR TIRE: Third Quarter Results Supports S&P's 'BB-' Rating GRAPHIC PACKAGING: Debt Trades at 5.04% Off in Secondary Market GUARANTY FINANCIAL: Carl Icahn Lets Go of Over 7 Million Shares HCA INC: Bank Debt Trades at 7% Off in Secondary Market HOLLEY PERFORMANCE: Files Schedules of Assets and Liabilities IDEARC INC: Seeks to Ink Standby Equity Purchase Deal with Paulson INSIGNIA SOLUTIONS: Earns $12,461 in Third Quarter INTELSAT JACKSON: Bank Debt Trades at 11% Off in Secondary Market INTERMET CORP: Will Shut Down Archer Creek Foundry in Campbell ION MEDIA: Plan Supplement Fleshes Out Post-Ch. 11 Details JOLT CO: May Close; Chapter 11 Case Dismissed KANSAS CITY SOUTHERN: Moody's Affirms Corp. Family Rating at B1 KINGWOOD LLC: Case Summary & 20 Largest Unsecured Creditors LAND O'LAKES: S&P Affirms Corporate Credit Rating at 'BB+' LEHMAN BROTHERS: Asks to Restructure Real Estate Loan Terms MADISONVILLE STATE BANK: Closed; U.S. Bank Assumes All Deposits MAMMOTH SAN JUAN: Taps Corcovelos Law as Gen. Bankruptcy Counsel MAX & ERMA'S: Closes Short Pump Location at John Rolfe METCALF PAVING: Files for Chapter 11 Bankruptcy Protection METROPCS WIRELESS: Bank Debt Trades at 6% Off in Secondary Market NEIMAN MARCUS: Bank Debt Trades at 14.57% Off in Secondary Market MIDWAY GAMES: Wants Excl. Plan Filing Extended until December 29 MONTGOMERY REALTY: Meeting of Creditors Continued on November 3 MORTGAGE GUARANTY: Fitch Cuts Insurer Strength Rating to 'BB-' NETFLIX INC: Moody's Assigns Corporate Family Rating at 'Ba2' NEW MEXICO HOSPITAL: Fitch Lifts Rating on $7.15 Mil. Bonds to BB- NORTH HOUSTON BANK: Closed; U.S. Bank Assumes All Deposits NOVELIS INC: Bank Debt Trades at 10.26% Off in Secondary Market PACIFIC ENERGY: Wants Ch. 11 Plan Filing Extended Until March 4 PACIFIC NATIONAL BANK: Closed; U.S. Bank Assumes All Deposits PARK NATIONAL BANK: Closed; U.S. Bank Assumes All Deposits PARLUX FRAGRANCES: Signs Feb. 15 Extension with Regions Bank PETCO ANIMAL: Bank Debt Trades at 4.4% Off in Secondary Market PHILADELPHIA NEWSPAPERS: Revenue Drops Expected in 2009-2011 PLIANT CORP: Berry Plastics Issues $620MM New Notes to Fund Deal POLYMER VISION: ODM Wistron To Buy Assets for EUR12MM PROTOSTAR LTD: Intelsat $210MM Wins ProtoStar 1 Satellite PROVIDENCE SERVICE: S&P Gives Positive Outlook, Holds 'B-' Rating PTC ALLIANCE: Section 341(a) Meeting Slated for November 20 QIMONDA NA: Limits Plan Filing Extension to January 18 RANCHER ENERGY CORP: Voluntary Chapter 11 Case Summary READER'S DIGEST: 19 Affiliates' Schedules and Statements READER'S DIGEST: Committee Access to Info Clarified READER'S DIGEST: Names New Heads for Europe, Asia & Canada REALOGY CORP: Bank Debt Trades at 16.18% Off in Secondary Market RELIANCE INTERMEDIATE: S&P Affirms 'BB-' Rating on $350 Mil. Notes REPROS THERAPEUTICS: Discloses Settlement with Major Creditors REVERE INDUSTRIES: Moody's Downgrades Corp. Family Rating to 'C' R.H. DONNELLEY: Shuman Law Files Class Action Lawsuit R.H. DONNELLEY: Glancy Binkow & Goldberg Seeks to Recover Losses RITE AID: Bank Debt Trades at 13.5% Off in Secondary Market SAN DIEGO NAT'L: Closed; U.S. Bank Assumes All Deposits SCIENTIFIC GAMES: Moody's Gives Neg. Outlook, Affirms 'Ba2' Rating SCIENTIFIC GAMES: S&P Affirms Corporate Credit Rating at 'BB' SECONDSTORY REPERTORY: Must Raise $80,000 or Go Bankrupt SELECT MEDICAL: Bank Debt Trades at 4% Off in Secondary Market SEMGROUP LP: Gets Nod of Settlement With BNP Paribas SEMGROUP LP: Gets Nod of Settlement With Fortis Bank SEMGROUP LP: Seeks Approval of Settlement with Gulfmark SENTINEL MANAGEMENT: Receiver Can Assert Customer Claims in Bankr. SIERRA KINGS DISTRICT: Files for Bankruptcy Protection SIMMONS CO: FTC Grants Early Termination of HSR Waiting Period SOURCE MEDIA: Moody's Downgrades Corporate Family Rating to 'B2' SPANSION INC: Begins Omnibus Claims Objections SPANSION INC: Creditors Panel Gets Nod to Hire Landis as Counsel SPANSION INC: Drawbridge Buys $2.27 Million Claim From Fulcrum SPECTRUM BRANDS: Amends Employment Pact With K. Hussey SPECTRUM BRANDS: Offers 3.33MM New Shares to Employees SPECTRUM BRANDS: Professionals Final Fee Applications STAMFORD CENTER: Exits Bankruptcy Protection STUDENT FINANCE: Pepper Hamilton Can't Collect From Insurers TELECONNECT INC: Posts $504,418 Net Loss in Third Quarter TERRA-GEN FINANCE: Moody's Assigns 'B1' Rating on $240 Mil. Notes TRIBUNE CO: Bank Debt Trades at 53.17% Off in Secondary Market TRUE TEMPER: U.S. Trustee Balks at Schedules Filing Deadline UNITED AIR LINES: Bank Debt Trades at 22% Off in Secondary Market US STEEL: Third Quarter Losses Won't Affect Moody's 'Ba2' Rating VALLEY VIEW DOWNS: Case Summary & Unsecured Creditor VELOCITY EXPRESS: Reschedules Section 341(a) Meeting to 9:00 a.m. VITESSE SEMICONDUCTOR: Appoints Two Board Members WEST CORP: Bank Debts Trade at 8.20% and 6.05% Off WINDSTREAM CORP: Bank Debt Trades at 3% Off in Secondary Market WOODSIDE GROUP: Homebuilder Violated Credit Pact, Says JPMorgan YANKEE CANDLE: Bank Debt Trades at 7% Off in Secondary Market YOUNG BROADCASTING: Must Disclose Pension Liabilities, PBGC Says * 2009's Bank Closings Rise to 115 as 9 FBOC Units Shuttered * Additional Gaming Bankruptcies Imminent, Says Grant Thornton * Geithner Faces Down 'Too Big To Fail' Bill Critics * Law Offices of Louis J Esbin Launches www.esbinlaw.com * Legal Helpers/Macey & Aleman to Launch New San Bernardino Office * Lewis Freeman Probed for Allegedly Stealing From Bankr. Cos. * Matrix Capital To Partner with Hunter Hotels * Rhode Island Bankr. Court to Follow NY's Loss Mitigation Program * BOND PRICING -- For the Week From October 26 to 30, 2009 ********* ALASKA AIR: S&P Affirms Corporate Credit Rating at 'B' ------------------------------------------------------ Standard & Poor's Ratings Services affirmed its 'B' corporate credit ratings on Alaska Air Group Inc. and its Alaska Airlines Inc. subsidiary, and revised the outlook to positive from stable. The outlook revision reflects the improved operating performance and good liquidity, which could lead to an upgrade over the next year. "Alaska Air Group has generated improved earnings this year, with net income of $97.5 million for the nine months ended Sept. 30, 2009, compared with a loss of $60.7 million in the similar period last year," said Standard & Poor's credit analyst Philip Baggaley. "This is one of the best performances among U.S. airlines, most of which are unprofitable in 2009," he continued. Although S&P anticipate that the company's performance will be somewhat weaker in the seasonally weak fourth quarter, it should still generate a healthy full-year profit. Alaska Air Group's liquidity is satisfactory, with unrestricted cash of $1.2 billion as of Sept. 30, 2009, equal to 36% of trailing 12-month revenues (the best among large U.S. airlines). The ratings on Alaska Air Group, and its major operating subsidiary, Alaska Airlines, reflect a midsize route network serving competitive markets, and the inherent risk of the airline industry. S&P's strong position in its major markets and relatively good liquidity for its size somewhat offset these risks. Alaska Air Group is the holding company for Alaska Airlines, and Horizon Air Industries Inc., a regional airline. S&P could raise its ratings over the next year if Alaska Air Group's earnings and operating cash flow remain healthy, generating funds flow to total debt above 15% and maintaining liquidity (unrestricted cash and short-term investments, plus availability under committed credit facilities) above $800 million. Given the company's current financial prospects, S&P does not anticipate a downgrade, but S&P could revise its outlook back to stable if weaker revenues or higher fuel prices cause the company's funds flow to total debt to fall into the mid- single-digits range or if liquidity falls below $800 million. AMERICAN HOME: CFO Loses SEC Discovery Feud ------------------------------------------- Law360 reports that Stephen Hozie, the former chief financial officer of American Home Mortgage Investment Corp., has failed to win access to federal regulators' discovery documents as he fights accounting fraud allegations his one-time colleagues have chosen to settle. Based in Melville, New York, American Home Mortgage Investment Corp. (NYSE: AHM) -- http://www.americanhm.com/-- is a mortgage real estate investment trust engaged in the business of investing in mortgage-backed securities and mortgage loans resulting from the securitization of residential mortgage loans originated and serviced by its subsidiaries. American Home Mortgage and seven affiliates filed for Chapter 11 protection on August 6, 2007 (Bankr. D. Del. Case Nos. 07-11047 through 07-11054). James L. Patton, Jr., Esq., Joel A. Waite, Esq., and Pauline K. Morgan, Esq. at Young, Conaway, Stargatt & Taylor LLP represent the Debtors. Epiq Bankruptcy Solutions LLC acts as the Debtors' claims and noticing agent. The Official Committee of Unsecured Creditors selected Hahn & Hessen LLP as its counsel. As of March 31, 2007, American Home Mortgage's balance sheet showed total assets of $20,553,935,000, total liabilities of $19,330,191,000. American Home filed a de-consolidated plan of liquidation on August 15, 2008. The former home mortgage lender's liquidating Chapter 11 plan was confirmed in February 2009 AMERICAN HOMEPATIENT: Forbearance Pact Extended to December 1 ------------------------------------------------------------- American HomePatient, Inc., on October 30 announced that it has entered into a fourth forbearance agreement with NexBank, SSB, the agent for its senior debt, and the holders in interest of a majority of the senior debt. Approximately $226 million was due to be repaid in full on the maturity date of August 1, 2009 pursuant to the terms of the Company's secured promissory note to the Agent. The parties to the forbearance agreement have agreed to not exercise, prior to December 1, 2009, any of their rights or remedies for the Company's failure to repay the debt in full on the maturity date. The Company, the Agent, and the Forbearance Holders continue to work toward a resolution of the debt maturity issue. However, there can be no assurance a resolution will be reached with favorable terms to the Company and its stockholders or at all. American HomePatient, Inc. is one of the nation's largest home health care providers with operations in 33 states. Its product and service offerings include respiratory services, infusion therapy, parenteral and enteral nutrition, and medical equipment for patients in their home. American HomePatient, Inc.'s common stock is currently traded in the over-the-counter market or, on application by broker-dealers, in the NASD's Electronic Bulletin Board under the symbol AHOM or AHOM.OB. The Company has total assets of $240,989,000 against total liabilities of $274,254,000 as of June 30, 2009. AMERIGAS PARTNERS: Fitch Affirms Issuer Default Rating at 'BB+' --------------------------------------------------------------- Fitch Ratings has affirmed the Issuer Default Rating and outstanding debt ratings for AmeriGas Partners, L.P.'s. The Rating Outlook is Stable. About $783 million of outstanding long- term debt is affected. Fitch affirms APU: -- IDR at 'BB+'; -- Senior unsecured at 'BB+'; Amerigas Propane, Inc. an indirect subsidiary of UGI Corp. owns an effective 44% interest in APU as the general partner and a limited partner. APU is a master limited partnership for AmeriGas Propane, L.P., an operating limited partnership. The APU debt is co-issued with its special purpose financing subsidiaries AP Eagle Finance Corp. and AmeriGas Finance Corp. APU's ratings reflect the underlying strength of AGP's retail propane distribution network, broad geographic reach, adequate credit metrics, and proven ability to manage unit margins under various operating conditions. Additionally, the company's growing ACE propane cylinder exchange business provides modest positive cash flow during the summer months when AGP's traditional space heating related propane distribution business is relatively slow. APU's rating also considers the structural subordination of its debt obligations to approximately $80 million of first mortgage notes that remain at AGP. APU's financial performance remains sensitive to weather conditions and general customer conservation, and the company must continue to manage volatile supply costs and price-induced customer conservation. The recessionary economy and volatile price of propane, which is correlated to the price of oil, has been exacerbating volume sales declines throughout the sector. Fitch expects relatively high commodity price levels to persist. These factors have the potential to lead to further customer conservation, increased bad debt expense, and could test APU's ability to sustain its current robust gross profit margins. Fitch notes sales volumes have declined for APU as the national economic picture has worsened, with volumes sold down 4.1% year over year for the nine month period ended June 30, 2009. APU is seeing volume declines in all of their customer segments, except Amerigas Cylinder Exchange which has seen volume sales growth. Management reports that volume declines are being driven by the most economically sensitive customer segments, which should see a rebound as the economy starts to improve. Volume declines have been particularly pronounced in APU's forklift segment, consistent with reduced shipping volumes and inventory turns at big box retailers. Strategic account volumes are down; however, strategic customer accounts by number are actually up 4% which could lead to the return of or higher volumes more quickly in an economic turnaround scenario. Even as volumes have declined, APU has managed to effectively pass through propane supply costs to customers and fairly consistently maintained and even grown gross margins during periods of volatile weather conditions and commodity prices over the past several years. Gross margins have benefitted from the rapid decline in wholesale commodity prices, which declined faster than retail prices expanding gross margins from 32% for fiscal year 2008 to roughly 42% year to date for the first nine months of 2009. Operating margin increased 4% to 14.4% versus 10.3% for the nine months ended June 30, 2009, on a year over year basis. As a result APU has maintained fairly solid credit metrics. For the 12 months ended June 30, 2009, consolidated operating EBITDA- to-interest expense and total debt-to-operating EBITDA equaled 4.8 times (x) and 2.5x, respectively. For fiscal 2009, Fitch expects consolidated EBITDA to interest and debt to EBITDA equaled 4.6x and 2.3x, respectively. Additionally, Fitch expects cash distributions to APU, generally defined as EBITDA generated by AGP minus AGP interest expense and maintenance capital expenditures, to cover interest on APU's stand-alone obligations by 4.8x for fiscal 2009. Furthermore, APU's liquidity position is expected to be more than adequate for seasonal borrowings as Fitch heads into the winter heating season. As of June 30, 2009, APU's available borrowing capacity under its credit agreements was $238 million. APPALACHIAN COAL: Massey Energy Buys More Coal Reserves ------------------------------------------------------- The Associated Press reports that Massey Energy Co. said that it has won another 15 million tons of northern West Virginia coal reserves from Appalachian Fuels, LLC. According to The AP, Massey Energy spokesperson Jeff Gillenwater said that the company is buying the Barbour County reserves, but is still awaiting court approval. Massey Energy bought in September about 23 million tons of reserves and other assets in Fayette County from Appalachian Fuels for $5.1 million. Lexington, Kentucky-based Appalachian Coal Holdings, Inc., filed for Chapter 11 bankruptcy protection on July 9, 2009 (Bankr. E.D. Ky. Case No. 09-10405). The Company's affiliates -- Appalachian Fuels, LLC; Appalachian Environmental, LLC; Appalachian Premium Fuels, LLC; Kanawha Development Corporation; and Southern Eagle Energy, LLC -- also filed for Chapter 11 bankruptcy. W. Thomas Bunch Sr., Esq., who has an office in Lexington, Kentucky, assists Appalachian Coal in its restructuring efforts. Appalachian Coal listed $61,088,422 in liabilities. ARAMARK CORP: Bank Debt Trades at 8.28% Off in Secondary Market --------------------------------------------------------------- Participations in a syndicated loan under which Aramark Corp. is a borrower traded in the secondary market at 91.72 cents-on-the- dollar during the week ended Oct. 30, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents a drop of 0.54 percentage points from the previous week, The Journal relates. The loan matures on Jan. 26, 2014. The Company pays 188 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's Ba3 rating and Standard & Poor's BB rating. The debt is one of the biggest gainers and losers among widely quoted syndicated loans in secondary trading in the week ended Oct. 30, among the 161 loans with five or more bids. ARAMARK Corporation -- http://www.aramark.com/-- is the world's #3 contract foodservice provider (behind Compass Group and Sodexo) and the #2 uniform supplier (behind Cintas) in the US. It offers corporate dining services and operates concessions at many sports arenas and other entertainment venues, while its ARAMARK Refreshment Services unit is a leading provider of vending and beverage services. The Company also provides facilities management services. Through ARAMARK Uniform and Career Apparel, the company supplies uniforms for healthcare, public safety, and technology workers. Founded in 1959, ARAMARK is owned by an investment group led by chairman and CEO Joseph Neubauer. Aramark Corp. carries a 'B1' long term corporate family rating from Moody's, a 'B+' long term issuer credit ratings from Standard & Poor's, and a 'B' long term issuer default rating from Fitch. ATP OIL & GAS: Bank Debt Trades at 3% Off in Secondary Market ---------------------------------------------------------- Participations in a syndicated loan under which ATP Oil & Gas Corp. is a borrower traded in the secondary market at 97.04 cents- on-the-dollar during the week ended Friday, Oct. 30, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 2.74 percentage points from the previous week, The Journal relates. The loan matures on Dec. 30, 2013. The Company pays 475 basis points above LIBOR to borrow under the facility. The debt is one of the biggest gainers and losers among widely quoted syndicated loans in secondary trading in the week ended Oct. 30, among the 161 loans with five or more bids. The bank debt is not rated by Moody's and Standard & Poor's. ATP Oil & Gas Corp. -- http://www.atpog.com/-- is an international offshore oil and gas development and production company with operations in the Gulf of Mexico and the North Sea. The company trades publicly as "ATPG" on the NASDAQ Global Select Market. AUTOBACS STRAUSS: Hopes to Present Reorg. Plan in Next Six Weeks ---------------------------------------------------------------- Autobacs Strauss Inc. President and COO Joseph Catalano said that the Company is hoping to have a reorganization plan "within the next six weeks or so that is acceptable, but then it will take another 60 to 90 days after that to actually emerge," Vera Linsalata at TireBusiness.com reports. Glenn Langberg, according to TireBusiness.com, bought back Autobacs Strauss Inc. from Autobacs Seven for $7,500. The report says that Mr. Langberg is now Autobacs Strauss' CEO. According to the report, Autobacs Strauss President and COO Joseph Catalano said that Autobacs Seven divested its ownership stake in the Company in June and shut its operations in California. Mr. Langberg sold Autobacs Strauss to Autobacs Seven for $55 million in 2007. Headquartered in South River, New Jersey, Autobacs Strauss Inc. -- http://www.straussauto.com/-- sells after-market automotive parts and accessories, and operate automotive service centers located in New York, New Jersey, Philadelphia, Bethlehem and Pennsylvania. The Company operates 86 retail store locations and has about 1,450 employees. The Company filed for Chapter 11 protection on February 4, 2009 (Bankr. D. Del. Case No. 09-10358). Edward J. Kosmowski, Esq., at Young Conaway Stargatt & Taylor, LLP, represents the Debtor in its restructuring efforts. As of January 3, 2009, the Debtor had total assets of $75,000,000 and total debts of $72,000,000. The Chapter 11 case is Strauss's third. The preceding Chapter 11 case ended with confirmation of a Chapter 11 plan in April 2007. The Company was then named R&S Parts & Service Inc. BANK USA, NA: Closed by Receivers; U.S. Bank Assumes All Deposits ----------------------------------------------------------------- The Federal Deposit Insurance Corporation entered into a purchase and assumption agreement with U.S. Bank, NA, of Minneapolis, Minnesota, a wholly-owned subsidiary of U.S. Bancorp, to assume all of the deposits and essentially all of the assets of nine failed banks. The nine banks were closed October 30 by federal and state bank regulators, which appointed the FDIC as receiver. The nine banks involved in the transaction are: Bank USA, National Association, Phoenix, Arizona; California National Bank, Los Angeles, California; San Diego National Bank, San Diego, California; Pacific National Bank, San Francisco, California; Park National Bank, Chicago, Illinois; Community Bank of Lemont, Lemont, Illinois; North Houston Bank, Houston, Texas; Madisonville State Bank, Madisonville, Texas; and Citizens National Bank, Teague, Texas. As of September 30, 2009, the banks had combined assets of $19.4 billion and deposits of $15.4 billion. The nine banks had 153 offices, which will reopen as branches of U.S. Bank beginning tomorrow during their normal business hours. Depositors of the nine banks will automatically become depositors of U.S. Bank. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship to retain their deposit insurance coverage. Customers should continue to use their existing branches until U.S. Bank can fully integrate the deposit records of the nine failed banks. The FDIC and U.S. Bank entered into a loss-share transaction on approximately $14.4 billion of the combined purchased assets of $18.2 billion. U.S. Bank will share in the losses on the asset pools covered under the loss-share agreement. The loss-sharing arrangement is projected to maximize returns on the assets covered by keeping them in the private sector. The agreement also is expected to minimize disruptions for loan customers. For more information on loss share, please visit: http://www.fdic.gov/bank/individual/failed/lossshare/index.html Customers who have questions about the transaction can contact the FDIC as follows: Failed Bank (a) Bank USA, National Association 1-800-913-3062 http://www.fdic.gov/bank/individual/failed/bankusa-az.html (b) California National Bank 1-800-913-5861 http://www.fdic.gov/bank/individual/failed/calnational.html (c) San Diego National Bank 1-800-517-1839 http://www.fdic.gov/bank/individual/failed/sandiegonational.html (d) Pacific National Bank 1-800-508-8289 http://www.fdic.gov/bank/individual/failed/pacificnational-ca.html (e) Park National Bank 1-800-450-5668 http://www.fdic.gov/bank/individual/failed/park-il.html (f) Community Bank of Lemont 1-800-528-6357 http://www.fdic.gov/bank/individual/failed/community-lemont.html (g) North Houston Bank 1-800-501-1872 http://www.fdic.gov/bank/individual/failed/northhouston-tx.html (h) Madisonville State Bank 1-800-913-3053 http://www.fdic.gov/bank/individual/failed/madisonville-tx.html (i) Citizens National Bank 1-800-517-1843 http://www.fdic.gov/bank/individual/failed/citizens-teague.html The nine banks were subsidiaries of FBOP Corporation, Oak Park, Illinois. FBOP Corporation was not closed and was not subject to the October 30 actions. FBOP is run by Michael Kelly, who from his base in the Chicago suburbs snapped up banks in San Diego, Los Angeles, Houston, and San Francisco. He started in 1990 with First Bank of Oak Park, which had $125 million in assets. The FDIC's Board of Directors issued notices of assessment of cross guaranty liability against Park National Bank and Citizens National Bank. Under statutory authority, the FDIC may assess affiliated banks for losses incurred by the Deposit Insurance Fund (DIF) from the failure of other banks, such as those owned by FBOP Corporation. Congress granted the FDIC authority in 1989 to reduce the cost to the DIF for the resolution of affiliated institutions owned by the same company. The two banks were unable to pay the amounts assessed and were closed by their chartering authorities. The FDIC estimates that the cost of the nine banks to the DIF will be a combined $2.5 billion. U.S. Bank's acquisition of all the deposits was the "least costly" resolution for the FDIC's DIF compared to alternatives. The failure of the nine banks brings the nation's total number this year to 115. By number, banks in Georgia account for one-fifth of all U.S. banks closing this year, with 20 failures, followed by Illinois with 19, California with 13, and Florida with nine. BAYOU GROUP: Judge Gives Nod to Disclosure Statement ---------------------------------------------------- Law360 reports that the Bankruptcy Court preliminarily approved a disclosure statement in Bayou Group LLC's Chapter 11 case, going over the 85-page document with a fine-tooth comb and putting off challenges to a contemplated dual trusteeship and to attorneys' fees requests until a confirmation hearing. Based in Chicago, Illinois, Bayou Group LLC operated and managed hedge funds. The Company and its affiliates were sent to Chapter 11 on May 30, 2006 (Bankr. S.D.N.Y. Lead Case No. 06-22306) to pursue recoveries for the benefit of defrauded investors. Elise Scherr Frejka, Esq., at Dechert LLP, represents the Debtors in their restructuring efforts. Joseph A. Gershman, Esq., and Robert M. Novick, Esq., at Kasowitz, Benson, Torres & Friedman, LLP, represent the Official Committee of Unsecured Creditors. Kasowitz, Benson, Torres & Friedman LLP is counsel to the Unofficial Committee of the Bayou Onshore Funds. Sonnenschein Nath & Rosenthal LLP represents certain investors. When the Debtors filed for protection from their creditors, they reported estimated assets and debts of more than $100 million. Bayou has filed lawsuits against former investors who allegedly received fictitious profits and an inequitably large return of their principal investments. Jeff J. Marwil, Esq., at Jenner & Block, was appointed on April 28, 2006, as the federal equity receiver. As reported in the Troubled Company Reporter on April 16, 2008, Bayou Group and its debtor-affiliates delivered 47 adversary complaints to the Honorable Adlai S. Hardin Jr. of the U.S. Bankruptcy Court for the Southern District of New York, seeking to recover certain fraudulent transfers made by investors against the Debtors. The Bayou entities include Bayou Management LLC, Bayou Advisors LLC, Bayou Equities LLC, Bayou Fund LLC, Bayou Superfund, Bayou No Leverage Fund LLC, Bayou Affiliates Fund LLC, and Bayou Accredited Fund LLC. The Debtors said the adversary proceedings arose from a massive fraudulent investment scheme committed by the Bayou entities, which controlled private pooled investment hedge funds. BERRY PLASTICS: To Issue $620MM New Notes to Fund Pliant Deal ------------------------------------------------------------- Berry Plastics Corporation on October 27, 2009, commenced, via two of its newly formed, wholly owned subsidiaries, an offering of: -- $325 million in aggregate principal amount of First Priority Senior Secured Notes due 2015; and -- $295 million in aggregate principal amount of 8-7/8% Second Priority Senior Secured Notes due 2014. On October 29, 2009, Berry Plastics announced the pricing of the private placement by its two newly formed, wholly owned subsidiaries. The Issuers will issue: -- $370 million of first priority senior secured notes due 2015; and -- $250 million of second priority senior secured notes due 2014. The principal amounts represent an increase of $45 million with respect to the First Priority Notes and a decrease of $45 million with respect to Second Priority Notes from previously announced principal amounts. The closing of the private placement offering is expected to occur on November 12, 2009. The First Priority Notes will bear interest at a rate of 8-1/4 % payable semiannually, in cash in arrears, on May 15 and November 15 of each year, commencing May 15, 2010, and will mature on November 15, 2015. The Second Priority Notes will bear interest at a rate of 8-7/8% payable semiannually, in cash in arrears, on March 15 and September 15 of each year, commencing March 15, 2010 and will mature on September 15, 2014. The proceeds from the offering before fees and expenses will be $365.7 million for the First Priority Notes and $230.6 million for the Second Priority Notes. From and after the release of proceeds from the collateral account, the First Priority Notes and Second Priority Notes will be guaranteed on a senior secured first-priority and second- priority basis, respectively, by each of Berry's existing and future direct or indirect domestic subsidiaries that is a restricted subsidiary, subject to certain exceptions and will include all of Berry's subsidiaries that guarantee Berry's obligations under its term loan facility. The Notes and the guarantees will be senior secured obligations and will rank senior in right of payment to all of Berry's, and, in the case of the guarantees, to all of the guarantors', existing and future subordinated debt. The First Priority Notes and Second Priority Notes will and the guarantees thereof will be secured on a first-priority and second- priority basis, respectively, by a lien on the assets that secure Berry's obligations under its senior secured credit facilities, subject to certain exceptions. The proceeds from the offering are intended to be used to acquire directly or indirectly all of the equity of Pliant Corporation (which will become a restricted subsidiary of Berry), to repay certain of Pliant's then-outstanding indebtedness, to pay certain fees and expenses related to such transactions and the offering and, to the extent not used for such purposes, for general corporate purposes. All proceeds of this offering will be deposited, together with any additional amounts necessary to redeem the notes, into a segregated collateral account until the obligations of the Issuers under the notes are assumed by Berry and certain other conditions are satisfied, including that the Acquisition will occur substantially simultaneously with the release of the proceeds from the collateral account. Amounts held in the collateral account will be pledged for the benefit of the holders of the notes. The notes are being offered only to qualified institutional buyers in reliance on Rule 144A under the Securities Act, and outside the United States, only to non-U.S. investors pursuant to Regulation S. The notes will not be initially registered under the Securities Act or any state securities laws and may not be offered or sold in the United States absent an effective registration statement or an applicable exemption from registration requirements or a transaction not subject to the registration requirements of the Securities Act or any state securities laws. About Pliant Corp Headquartered in Schaumburg, Illinois, Pliant Corporation produces polymer-based films and flexible packaging products for food, beverage, personal care, medical, agricultural and industrial applications. The Company has operations in Australia, New Zealand, Germany, and Mexico. Pliant and 10 of its affiliates filed for Chapter 11 protection on January 3, 2006 (Bankr. D. Del. Lead Case No. 06-10001). James F. Conlan, Esq., at Sidley Austin LLP, and Edmon L. Morton, Esq., and Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor, represented the Debtors in their restructuring efforts. The Debtors tapped McMillan Binch Mendelsohn LLP, as Canadian counsel. As of September 30, 2005, the Company had $604.3 million in total assets and $1.19 billion in total debts. The Debtors emerged from Chapter 11 on July 19, 2006. Pliant Corp. and its affiliates again filed for Chapter 11 after reaching terms of a pre-packaged restructuring plan. The voluntary petitions were filed February 11, 2009 (Bank. D. Del. Case Nos. 09-10443 through 09-10451). The Hon. Mary F. Walrath presides over the cases. Jessica C.K. Boelter, Esq., at Sidley Austin LLP, in Chicago, Illinois, and Edmon L. Morton, Esq., at Robert S. Brady, Esq., at Young Conaway Stargatt & Taylor, LLP, in Wilmington, Delaware, provide bankruptcy counsel to the Debtors. Epiq Bankruptcy Solutions LLC acts as claims and noticing agent. The U.S. Trustee for Region 3 appointed five creditors to serve on an official committee of unsecured creditors. The Creditors Committee selected Lowenstein Sandler PC as its counsel. As of September 30, 2008, the Debtors had $688.6 million in total assets and $1.03 billion in total debts. About Berry Plastics Berry Plastics Corporation manufactures and markets plastic packaging products, plastic film products, specialty adhesives and coated products. At June 27, 2009 the Company had 64 production and manufacturing facilities, with 58 located in the United States. Berry is a wholly-owned subsidiary of Berry Plastics Group, Inc. Berry Group is primarily owned by affiliates of Apollo Management, L.P. and Graham Partners. Berry, through its wholly owned subsidiaries operates in four primary segments: Rigid Open Top, Rigid Closed Top, Flexible Films, and Tapes/Coatings. The Company's customers are located principally throughout the United States, without significant concentration in any one region or with any one customer. As of June 27, 2009, the Company had $4.37 billion in total assets against $4.06 billion in total liabilities. The Company posted a net loss of $35.5 million for the 39-weeks ended June 27, 2009. The Company posted a net income of $1.3 million for the 13-weeks ended June 27, 2009. * * * As reported by the Troubled Company Reporter on June 10, 2009, Standard & Poor's Ratings Services raised its corporate credit rating on Berry Plastics Group to 'B-' from 'SD' and the senior unsecured debt rating to 'CCC' from 'D'. The recovery ratings on Group's senior unsecured debt remain unchanged at '6', indicating S&P's expectation for negligible recovery (0% to 10%) in a payment default. S&P affirmed all its ratings on Group's wholly owned operating subsidiary Berry Plastics Corp. The outlook is stable. S&P had lowered the ratings on Group on May 22, 2009, following the announcement that BP Parallel LLC, a subsidiary of Group, agreed to pay about $147 million to purchase assignments of $472.9 million principal amount of Group's senior unsecured term loan. As of May 8, 2009, the company had closed on $105.9 million of these assignments, and management expects to close on the remainder in the fiscal third quarter ending approximately June 30, 2009. The principal amount of the term loan, which is currently pay-in-kind, was $580 million as of March 28, 2009. S&P viewed the transaction as a distressed exchange because debtholders received significantly less than the accreted principal amount of the loan. BROOK MAYS: Atypical Payment Points to Avoidable Preference ----------------------------------------------------------- WestLaw reports that a payment made by a debtor to its service provider during the 90-day preference period did not qualify for the ordinary-course-of-business defense to a preferential transfer claim. The payment was made somewhat later than the norm between the parties, and was sent by overnight, rather than regular, mail, which was an atypical mode of delivery only used once before outside the preference period. In re Brook Mays Music Co., --- B.R. ----, 2009 WL 3334393 (Bankr. N.D. Tex.) (Jernigan, J.). Brook Mays Music Company, a full-line musical instrument retailer based in Dallas, Tex., filed for Chapter 11 protection (Bankr. N.D. Tex. Case No. 06-32816) on July 11, 2006. The case was converted to a Chapter 7 bankruptcy proceeding on March 29, 2007, after a court-approved Section 363 sale of substantially all of the Debtor's assets. Robert Yaquinto was thereafter appointed as the Chapter 7 Trustee and is winding up the Debtor's estate. CALIFORNIA COASTAL: Case Summary & 25 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: California Coastal Communities, Inc. 6 Executive Circle, Suite 250 Irvine, CA 92614 Case No.: 09-21712 Chapter 11 Petition Date: October 27, 2009 Court: United States Bankruptcy Court Central District of California (Santa Ana) Judge: Theodor Albert Debtor's Counsel: Joshua M. Mester, Esq. 865 S Figueroa St., Ste. 2900 Los Angeles, CA 90017 Tel: (213) 694-1200 Fax: (213) 694-1234 Email: mesterj@hbdlawyers.com Estimated Assets: $100,000,001 to $500,000,000 Estimated Debts: $100,000,001 to $500,000,000 The petition was signed by Raymond J. Pacini, the company's CEO. Debtor's List of 25 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Insurance Company Performance Bonds $22,562,149 of the West 11455 El Camino Real San Diego, CA 92130 County of Orange Performance Bonds $9,699,959 PO Box 4048 Santa Ana, CA 92702 City of Huntington Beach Performance Bonds $4,597,496 2000 Main Street Huntington Beach, CA 92648 Comerica Letters of Credit $3,093,925 2321 Rosecrans Avenue 5th Floor El Segundo, CA 90245 Pension Benefit Guaranty Underfunded Pension $3,000,000 Corporation Plan Dept. 77430 PO Box 77000 Detroit, MI 48277 County of Riverside, TLMA Performance Bonds $2,877,890 4080 Lemon Street Second Floor Riverside, CA 92502 City of Lancaster Performance Bonds $2,483,701 44933 North Fern Avenue Lancaster, CA 93534 City of Beaumont Performance Bonds $1,312,000 550 East 6th Street Beaumont, CA 92223 Robert Day Retiree Benefits $800,580 c/o Oakmont Corporation PO Box 71289 Los Angeles, CA 90071 State Lands Commission Contract $700,000 of CA 100 Howe Avenue Suite 100-South Sacramento, CA 95825 Philip Beekman Retiree Benefits $432,000 c/o Owl Hollow Enterprises, Inc. 6693 E. Pleasant Indianapolis, IN 46219 John Van Eck Retiree Benefits $399,375 575 Park Avenue, Apt. 301 New York, NY 10065 Gerald Lewis Retiree Benefits $256,800 PO Box 325 Pauma Valley, CA 92061 Wheelabrator Technologies Indemnification $250,000 Inc./Resco Holdings, Inc. 1001 Fannin Street Suite 4000 Houston, TX 70002 South Coast Cabinet Trade $188,328 Pacific Masonry Trade $180,000 City of Ontario Performance Bonds $146,334 Residential Design Trade $136,446 Services Vintage Design Services Trade $129,667 Brightwater Maintenance Trade $124,254 Corp. c/o Keystone Pacific Property Management Bertram Firestone Retiree Benefits $119,138 Newstead Farm James Pattison Retiree Benefits $110,138 BAS Appliance Gallery Trade $83,133 LLC Bova Contracting Trade $75,000 Corporation Gateway Plastering Trade $67,396 CALIFORNIA NATIONAL BANK: Closed; U.S. Bank Assumes All Deposits ---------------------------------------------------------------- The Federal Deposit Insurance Corporation entered into a purchase and assumption agreement with U.S. Bank, NA, of Minneapolis, Minnesota, a wholly-owned subsidiary of U.S. Bancorp, to assume all of the deposits and essentially all of the assets of nine failed banks. The nine banks were closed October 30 by federal and state bank regulators, which appointed the FDIC as receiver. The nine banks involved in the transaction are: Bank USA, National Association, Phoenix, Arizona; California National Bank, Los Angeles, California; San Diego National Bank, San Diego, California; Pacific National Bank, San Francisco, California; Park National Bank, Chicago, Illinois; Community Bank of Lemont, Lemont, Illinois; North Houston Bank, Houston, Texas; Madisonville State Bank, Madisonville, Texas; and Citizens National Bank, Teague, Texas. As of September 30, 2009, the banks had combined assets of $19.4 billion and deposits of $15.4 billion. The nine banks had 153 offices, which will reopen as branches of U.S. Bank beginning tomorrow during their normal business hours. Depositors of the nine banks will automatically become depositors of U.S. Bank. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship to retain their deposit insurance coverage. Customers should continue to use their existing branches until U.S. Bank can fully integrate the deposit records of the nine failed banks. The FDIC and U.S. Bank entered into a loss-share transaction on approximately $14.4 billion of the combined purchased assets of $18.2 billion. U.S. Bank will share in the losses on the asset pools covered under the loss-share agreement. The loss-sharing arrangement is projected to maximize returns on the assets covered by keeping them in the private sector. The agreement also is expected to minimize disruptions for loan customers. For more information on loss share, please visit: http://www.fdic.gov/bank/individual/failed/lossshare/index.html Customers who have questions about the transaction can contact the FDIC as follows: Failed Bank (a) Bank USA, National Association 1-800-913-3062 http://www.fdic.gov/bank/individual/failed/bankusa-az.html (b) California National Bank 1-800-913-5861 http://www.fdic.gov/bank/individual/failed/calnational.html (c) San Diego National Bank 1-800-517-1839 http://www.fdic.gov/bank/individual/failed/sandiegonational.html (d) Pacific National Bank 1-800-508-8289 http://www.fdic.gov/bank/individual/failed/pacificnational-ca.html (e) Park National Bank 1-800-450-5668 http://www.fdic.gov/bank/individual/failed/park-il.html (f) Community Bank of Lemont 1-800-528-6357 http://www.fdic.gov/bank/individual/failed/community-lemont.html (g) North Houston Bank 1-800-501-1872 http://www.fdic.gov/bank/individual/failed/northhouston-tx.html (h) Madisonville State Bank 1-800-913-3053 http://www.fdic.gov/bank/individual/failed/madisonville-tx.html (i) Citizens National Bank 1-800-517-1843 http://www.fdic.gov/bank/individual/failed/citizens-teague.html The nine banks were subsidiaries of FBOP Corporation, Oak Park, Illinois. FBOP Corporation was not closed and was not subject to the October 30 actions. FBOP is run by Michael Kelly, who from his base in the Chicago suburbs snapped up banks in San Diego, Los Angeles, Houston, and San Francisco. He started in 1990 with First Bank of Oak Park, which had $125 million in assets. The FDIC's Board of Directors issued notices of assessment of cross guaranty liability against Park National Bank and Citizens National Bank. Under statutory authority, the FDIC may assess affiliated banks for losses incurred by the Deposit Insurance Fund (DIF) from the failure of other banks, such as those owned by FBOP Corporation. Congress granted the FDIC authority in 1989 to reduce the cost to the DIF for the resolution of affiliated institutions owned by the same company. The two banks were unable to pay the amounts assessed and were closed by their chartering authorities. The FDIC estimates that the cost of the nine banks to the DIF will be a combined $2.5 billion. U.S. Bank's acquisition of all the deposits was the "least costly" resolution for the FDIC's DIF compared to alternatives. The failure of the nine banks brings the nation's total number this year to 115. By number, banks in Georgia account for one-fifth of all U.S. banks closing this year, with 20 failures, followed by Illinois with 19, California with 13, and Florida with nine. CANWEST GLOBAL: Gets Canada Court OK to Save National Post ---------------------------------------------------------- Canwest Global Communications Corp. said it has received approval and a vesting order from the Ontario Superior Court of Justice in respect of the transition of the business of the National Post to Canwest Publishing Inc. through a newly incorporated, wholly-owned subsidiary of CPI, and the re-alignment of certain shared services between its subsidiaries Canwest Media Inc. and Canwest Limited Partnership. The transition of the business of the National Post and the re- alignment of shared services have also been approved by the lenders under Canwest LP's senior secured credit facilities, CIT Business Credit Canada Inc. as lender to CMI, and the ad hoc committee of holders of 8% senior subordinated notes of CMI. The transition of the business of the National Post and the re- alignment of shared services are expected to close on October 31, 2009. This transition and re-alignment are part of Canwest's structured and orderly recapitalization process designed to properly align the provision and cost allocation of certain shared services between CMI and Canwest LP. Shared service agreements that govern content sharing between CMI and Canwest LP and allow for consolidated and co-ordinated advertising sales will continue under the re-alignment until at least August 31, 2010. To date, the attractiveness of a co- ordinated advertising sales effort has been widely endorsed by the marketplace. CMI and Canwest LP will be able to negotiate continuing arrangements to be put in place beyond their scheduled expiry date. The Ontario Superior Court of Justice also granted the request by Canwest for an extension of the stay period granted under the Companies' Creditors Arrangement Act to January 22, 2010. In its Initial Order on October 6, 2009, the Court provided a 30 day stay period. Canwest also said that Canwest LP and the lenders under its senior secured credit facilities continue discussions regarding the framework for a potential restructuring transaction. As previously announced on September 10, 2009, Canwest LP and its senior lenders had entered into a forbearance agreement under which the senior lenders had agreed not to enforce their rights under the senior secured credit facilities arising from Canwest LP's previously announced defaults prior to October 31, 2009. Canwest LP and its senior lenders have agreed to extend this forbearance date to November 9, 2009. About Canwest Global Canwest Global Communications Corp. (TSX: CGS and CGS.A) -- http://www.canwest.com/-- an international media company, is Canada's largest media company. In addition to owning the Global Television Network, Canwest is Canada's largest publisher of English language daily newspapers and owns, operates and holds substantial interests in conventional television, out-of-home advertising, specialty cable channels, web sites and radio stations and networks in Canada, New Zealand, Australia, Turkey, Indonesia, Singapore, the United Kingdom and the United States. On October 6, 2009, Canwest Global, Canwest Media Inc., Canwest Television Limited Partnership (including Global Television, MovieTime, DejaView and Fox Sports World), The National Post Company and certain subsidiaries voluntarily entered into, and successfully obtained an Order from the Ontario Superior Court of Justice (Commercial Division) commencing proceedings under the Companies' Creditors Arrangement Act. The CMI Entities' commencement of these proceedings was undertaken in furtherance of a proposed recapitalization transaction that is supported by over 70% of holders of the 8% senior subordinated notes issued by CMI. On the same day, FTI Consulting Canada Inc., the Court-appointed Monitor in the CCAA proceedings, sought protection in the United States Bankruptcy Court under Chapter 15 of the United States Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No. 09-15994) for certain of the entities involved in Canwest's television business that filed for protection under the CCAA, including Canwest, Canwest Media Inc. and Canwest Global Broadcasting Inc./Radiodiffusion Canwest Global Inc. Judge Stuart M. Bernstein presides over the Chapter 15 cases. Evan D. Flaschen, Esq., at Bracewell & Giuliani LLP, in Hartford, Connecticut, serves as Chapter 15 Petitioner's counsel. The Chapter 15 Debtors disclosed estimated assets of $500 million to $1 billion and estimated debts of $50 million to $100 million. In a regulatory filing with the U.S. Securities and Exchange Commission, Canwest Media disclosed C$4,847,020,000 in total assets and C$5,826,522,000 in total liabilities at May 31, 2009. Bankruptcy Creditors' Service, Inc., publishes Canwest Bankruptcy News. The newsletter tracks the CCAA proceedings and Chapter 15 proceedings undertaken by Canwest Global Communications Corp. and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000). CAPMARK FINANCIAL: Chapter 11 Filing Won't Affect Fitch's Ratings ----------------------------------------------------------------- The Chapter 11 bankruptcy of Capmark Financial Group Inc., along with the potential subsequent sale and servicing transfer, will not adversely impact ratings on franchise loan asset-backed securities serviced by Capmark, according to Fitch Ratings: Capmark Finance Inc. is currently the servicer on several Fitch- rated franchise loan asset-backed securities and is expected to be sold to Berkadia Commercial Mortgage LLC. On Oct. 26, Fitch Ratings downgraded Capmark's Issuer Default Rating to 'D' from 'C' in response to the company's filing of a voluntary petition seeking relief under Chapter 11 of the U.S. Bankruptcy Code. Capmark-serviced franchise loan ABS rated by Fitch are: -- Atherton Franchise Loan Funding, series 1997-A; -- Atherton Franchise Loan Funding, series 1998-A; -- Atherton Franchise Loan Funding, series 1999-A; -- EMAC Owner Trust, series 1998-1; -- EMAC Owner Trust, series 1999-1; -- EMAC Owner Trust, series 2000-1; -- FMAC Loan Receivables Trust, series 1996-B.; -- FMAC Loan Receivables Trust, series 1997-A; -- FMAC Loan Receivables Trust, series 1997-B; -- FMAC Loan Receivables Trust, series 1997-C; -- FMAC Loan Receivables Trust, series 1998-A; -- FMAC Loan Receivables Trust, series 1998-B; -- FMAC Loan Receivables Trust, series 1998-C; -- FMAC Loan Receivables Trust, series 1998-D. On Sept. 2, 2009, Capmark entered into a put option agreement to sell its servicing and origination operations to Berkadia, a partnership between Berkshire Hathaway Inc. (long-term IDR rated 'AA+' with a Negative Outlook by Fitch) and Leucadia National Corporation (long-term IDR rated 'BB+' with a Negative Outlook). Currently, Capmark Financial Group is rated 'D' by Fitch. The acquisition will bring financial stability to the servicing platform. In addition, Berkadia will be capitalized with in excess of $1 billion in available cash by Berkshire Hathaway. Berkadia has indicated to Fitch that it expects to retain substantially all of Capmark's servicing management and staff. CAPMARK FINANCIAL: Court Enters Injunction on Utility Providers --------------------------------------------------------------- Capmark Financial Group Inc. and its units sought and obtained an interim Court order, prohibiting utility companies from discontinuing, altering, or refusing service to, or discriminating against, the Debtors on account of unpaid charges for prepetition services or the Debtors' bankruptcy filing. The Debtors relate that in connection with the operation of their business, they obtain natural gas, electricity, water, sewerage, Internet, and other services. The names of the Utility Companies, along with their affiliates, that provide Utility Services to the Debtors as of the Petition Date are available for free at http://bankrupt.com/misc/Capmark_UtilityCompanies.pdf The Debtors tell the Court that they pay approximately $317,542 per month on account of Utility Services. Pursuant to Section 366(c)(2) of the Bankruptcy Code, a utility may alter, refuse, or discontinue a chapter 11 debtor's utility service if the utility does not receive from the debtor, within 30 days of the Petition Date, "adequate assurance of payment" for postpetition services. Section 366(c)(1) of the Bankruptcy Code provides that "assurance of payment" of postpetition charges may consist of: (i) a cash deposit; (ii) a letter of credit; (iii) a certificate of deposit; (iv) a surety bond; (v) a prepayment of utility consumption; or (vi) another form of security mutually agreed on between the utility and the debtor or the trustee. "Given the nature of the Debtors' business operations and that the Debtors operate many domestic offices, uninterrupted Utility Services are essential to the Debtors' ongoing business operations," says Jason M. Madron, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware. "In addition, in light of the nature of the services provided by the Utility Companies, the Debtors cannot easily, if at all, find replacement services," he adds. Mr. Madron asserts that should any Utility Company refuse or discontinue service, even for a brief period, the Debtors' business operations would be severely disrupted, if not shut down altogether. In light of this, the Debtors propose to provide adequate assurance of payment to each requesting Utility Company in a form of a cash deposit to any requesting Utility Company no later than five business days after the receipt of that request. Each deposit will be equal to two weeks of Utility Service, based on the historical average usage by the Debtors for that Utility Service during the previous 12 months, provided: (i) that request is made, in accordance with proposed adequate assurance Procedures; (ii) the requesting Utility Company does not already hold a deposit equal to or greater than two weeks of Utility Service; and (iii) the requesting Utility Company is not currently paid in advance for its Utility Service. As a condition to requesting and accepting an Adequate Assurance Deposit, the requesting Utility Company will be deemed to have stipulated that the Adequate Assurance Deposit constitutes adequate assurance of payment to that Utility Company within the meaning of Section 366 of the Bankruptcy Code. The Debtors aver that the Adequate Assurance Deposit, in conjunction with the Debtors' ability to pay for postpetition Utility Services, constitutes adequate assurance to the Utility Companies pursuant to Section 366 of the Bankruptcy Code. Accordingly, any Utility Company that fails to file an objection to the Motion will be deemed to have been provided with adequate assurance of payment as required by Section 366 and will be prohibited from discontinuing, altering, or refusing to provide Utility Services, including as a result of unpaid charges for prepetition Utility Services. Proposed Adequate Assurance Procedures The Debtors propose procedures that will enable the Debtors and the Utility Companies to consensually resolve adequate assurance issues. If the Debtors and the Utility Company cannot consensually resolve those issues, the Court should determine first whether an additional adequate assurance of payment is necessary, says Mr. Madron. The Salient terms of the proposed adequate assurance procedures are: (a) The Debtors will send a copy of the Motion to each Utility Company. (b) The Debtors will pay each requesting Utility Company an Adequate Assurance Deposit within five business days from the receipt of the request. (c) A Utility Company desiring additional assurances of payment in the form of deposits, security or otherwise must serve a request upon Service Parties. (d) The Additional Assurance Request must be made no later than five business days prior to the Final Hearing date. (e) Any Additional Assurance Request must: (i) be in writing; (ii) set forth the location for which utility services are provided; (iii) include a summary of the Debtors' payment history relevant to the affected accounts, including any security deposits; and (iv) set forth why the Utility Company believes the Proposed Adequate Assurance is not sufficient adequate assurance of payment. (f) Upon the Service Parties' receipt of any Additional Assurance Request, the Debtors will have the greater of 14 days from the receipt of that Additional Assurance Request or 30 days from the Petition Date to negotiate with the Utility Company to endeavor to resolve the Utility Company's Additional Assurance Request. (g) The Debtors may resolve any Additional Assurance Request by mutual agreement with the Utility Company, without further order of the Court, and may, in connection with any agreement, provide a Utility Company with additional adequate assurance of future payment including cash deposits, prepayments or other forms of security, without further order of the Court, if the Debtors believe that additional assurance is reasonable. (h) If the Debtors determine that the Additional Assurance Request is not reasonable and are not able to reach an alternative resolution with the Utility Company during the Resolution Period, the Debtors will request a hearing before the Court to determine the adequacy of assurances of payment with respect to a particular Utility Company. (i) Pending resolution of any Determination Hearing, that Utility Company will be restrained from discontinuing, altering, or refusing service to, or discriminating against, the Debtors on account of unpaid charges for prepetition services or the Debtors' bankruptcy filing. To the extent the Debtors identify additional Utility Companies, the Debtors will promptly file amendments to the Utility Service List, Mr. Madron says. The final hearing to consider the Debtors' request is scheduled for November 24, 2009. About Capmark Financial Based in Horsham, Pennsylvania, Capmark Financial Group Inc. -- http://www.capmark.com/-- is a diversified company that provides a broad range of financial services to investors in commercial real estate-related assets. Capmark has three core businesses: lending and mortgage banking, investments and funds management, and servicing. Capmark operates in North America, Europe and Asia. Capmark has 1,000 employees located in 37 offices worldwide. On October 25, 2009, Capmark Financial Group Inc. and certain of its subsidiaries filed voluntary petitions for relief under Chapter 11 (Bankr. D. Del. Case No. 09-13684) Capmark's financial advisors are Lazard Fr� res & Co. LLC and Loughlin Meghji + Company. Capmark's bankruptcy counsel is Dewey & LeBoeuf LLP. Richards, Layton & Finger, P.A. serves as local counsel. Beekman Advisors, Inc., is serving as strategic advisor. KPMG LLP is tax and accounting advisor. Epiq Bankruptcy Solutions, LLC is the claims and notice agent. Capmark has total assets of US$20 billion against total debts of US$21 billion as of June 30, 2009. Bankruptcy Creditors' Service, Inc., publishes Capmark Financial Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Capmark Financial Group Inc. and its units. (http://bankrupt.com/newsstand/or 215/945-7000) CAPMARK FINANCIAL: Gets Nod to Run Business in Ordinary Course -------------------------------------------------------------- On an interim basis, the Bankruptcy Court authorized Capmark Financial Group Inc. and its units to continue operating their business in the ordinary course. Capmark Financial sought the Court's entry of an order: (a) authorizing them to continue operation of their business in the ordinary course; (b) authorizing payment of prepetition obligations attendant to the Business, including certain Customer Deposit Programs, Escrow Account Fees, and Servicing Interest Payments; and (c) authorizing and directing banks and financial institutions to honor and process postpetition checks and transfers related to the prepetition obligations. The Debtors' Business includes all of their activities primarily related to their role as a master, primary, and special servicer of pools of commercial real estate loans securitized by the Debtors or third parties. The Debtors also act as a primary servicer of commercial real estate loans that they originate as a proprietary or correspondent lender, and commercial real estate loans that third parties originate but outsource for servicing. When acting as servicer for loans that they have originated or acquired, either as sole or correspondent lender, the Debtors are managing their own assets and, in some cases, assets that may be co-owned by other lenders. Given the commencement of their Chapter 11 cases, the Debtors believe it is very important to provide prompt assurance to borrowers, investors, Federal Housing Administration, the U.S. Department of Housing and Urban Development, government sponsored enterprises, co-lenders and other parties of their continued ability to maintain normal Business activities in the same manner performed prepetition, says Mark D. Collins, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware. Preservation of the value of the Debtors' estates depends upon, among other things, uninterrupted operation of all aspects the Business, including loan servicing, loan and collateral management, and loan origination, Mr. Collins explains. He adds that the importance of maintaining normal operations is particularly heightened by the pendency of the ongoing sale process attendant to a portion of the Business. The Debtors believe the continued operation of their Business, including, but not limited to, the ongoing (i) receipt and acceptance of borrower remittances, (ii) remittance of escrowed payments or Customer Deposits to the appropriate third party or loan applicant, (iii) payment of Escrow Account Fees and Servicing Interest Payments, and (iv) resolution of delinquent loans and management of collateral securing the loans, is ordinary course and thus, none of these continuing activities requires Court approval. In an abundance of caution, however, the Debtors seek the entry of an order confirming that they may continue operation of all aspects of the Business in the ordinary course, which they believe will (a) calm any concerns that borrowers may have regarding the status of their mortgage obligations, (b) assure current and future loan applicants that their mortgage loan and mortgage insurance applications will be properly processed and deposits will be properly administered and refunded when appropriate, (c) assure investors that their investments -- including collateral securing the investments -- will be properly managed and resolved, as appropriate, in the same manner in which the business was conducted prepetition, and (d) assure the Banks that manage the escrow accounts that the Escrow Account Fees will be timely paid. Prior to the entry of the Court's order, General Electric Capital Corporation said that without listing of accounts, it is not possible to determine whether accounts maintained in GE Capital's name and for GE Capital's benefit are subject to the Motion. GE Capital believes the account maintained for the benefit of itself should receive the same treatment as the Servicing Escrow Accounts. GE maintained that it filed its objection out of abundance of caution, to clarify its treatment under the Motion and to ensure that the Debtors do not intend to treat the funds in those accounts as cash collateral. The final hearing to consider the Debtors' request is scheduled for November 24, 2009. The Debtors tell the Court that after the entry of the interim Normal Business Order, they were contacted by counsel to Fannie Mae in connection with Fannie Mae's desire to continue purchasing Capmark-originated loans. The Debtors desire to continue selling Fannie Mae-qualified loans and qualified loans to other government sponsored enterprises and to continue funding mortgage loans through the pre-sale of Ginnie Mae mortgaged-backed securities issued by the Debtors or their nondebtor affiliates, all in the same manner as these activities were conducted prior to the Petition Date. The Debtors believe that those activities are in the ordinary course of their business operations and covered by the Normal Business Order. Accordingly, the Debtors seek the Court's entry of a supplemental interim order that will include these provisions: (i) that the Debtors are authorized to continue operation of their loan origination, securitization, correspondent lending, and sale business, in all respects, including but not limited to, the making of any covenant, representation, warranty or guarantee in respect of those loans; and (ii) that the GSE purchaser of Debtor-originated loans will be granted an administrative expense claim in respect of any loan transferred to the GSEs post-Commencement Date in connection with any claims arising under, or in connection with, those Loans. In a separate filing, the Debtors asked the Court to schedule a hearing on their Supplemental Motion to November 4, 2009 at 3:00 p.m. About Capmark Financial Based in Horsham, Pennsylvania, Capmark Financial Group Inc. -- http://www.capmark.com/-- is a diversified company that provides a broad range of financial services to investors in commercial real estate-related assets. Capmark has three core businesses: lending and mortgage banking, investments and funds management, and servicing. Capmark operates in North America, Europe and Asia. Capmark has 1,000 employees located in 37 offices worldwide. On October 25, 2009, Capmark Financial Group Inc. and certain of its subsidiaries filed voluntary petitions for relief under Chapter 11 (Bankr. D. Del. Case No. 09-13684) Capmark's financial advisors are Lazard Fr� res & Co. LLC and Loughlin Meghji + Company. Capmark's bankruptcy counsel is Dewey & LeBoeuf LLP. Richards, Layton & Finger, P.A. serves as local counsel. Beekman Advisors, Inc., is serving as strategic advisor. KPMG LLP is tax and accounting advisor. Epiq Bankruptcy Solutions, LLC is the claims and notice agent. Capmark has total assets of US$20 billion against total debts of US$21 billion as of June 30, 2009. Bankruptcy Creditors' Service, Inc., publishes Capmark Financial Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Capmark Financial Group Inc. and its units. (http://bankrupt.com/newsstand/or 215/945-7000) CAPMARK FINANCIAL: Proposes to Pay Sales & Use Taxes ---------------------------------------------------- Capmark Financial Group Inc. and its units seek the Court's authority to pay certain prepetition property, sales, and use tax obligations and certain other governmental assessments of franchise fees and business license fees to various federal, state and local authorities, including those obligations subsequently determined upon audit to be owed for periods prior to the Petition Date for $200,000. (A) Real and Personal Property Taxes The Debtors tell the Court that they pay real personal property taxes in certain states in respect of real and personal property they own in those jurisdictions. The Property Taxes are typically paid on a bi-annual basis, in the case of personal property, or annual basis, in the case of real property. According to the Debtors, while the amount they pay in respect of the Property Taxes fluctuates yearly, in 2008, they have paid approximately $77,000 in Property Taxes. The Debtors estimate that they owe approximately $63,000 in respect of Property Taxes incurred prior to the Petition Date. (B) Sales Taxes In the ordinary course of business, the Debtors are or may be required to collect sales taxes in connection with certain of their business operations. Typically, Sales Taxes accrue as tangible goods and services are invoiced to customers and are calculated based on a statutory percentage of the sale price invoiced to the customer. The Debtors then remit the Sales Taxes to the relevant Taxing Authorities according to the requirements of that Taxing Authority, either on the basis of the Sales Tax actually invoiced to customers during a specified period or on the basis of estimated sales tax collections for the coming period. As of the Petition Date, the Debtors estimate they owe approximately $440,000 for Sales Taxes. The Debtors also incur and collect use taxes when property or services are purchased from vendors that have no nexus to the resident states of the Debtors. The Debtors note that they may be assessed for Use Taxes that arose before the Petition Date, which they estimate to be approximately $670,000 as of the Petition Date. (C) Other Governmental Assessments The Debtors are also required to pay franchise taxes in certain states. The Franchise Taxes are typically paid annually to the applicable Taxing Authorities. The Debtors estimate that each year they pay approximately $950,000 in respect of Franchise Taxes. Furthermore, many local governments require the Debtors to obtain a business license. The requirements for a company to obtain a business license and the manner in which the Business License Fees are computed vary according to the tax law of applicable jurisdictions. The Debtors estimate that each year they pay approximately $25,500 in Business License Fees. The Debtors assert that nonpayment of these obligations may cause the Taxing Authorities to take precipitous action, including, but not limited to, filing of liens, preventing them from conducting business in the applicable jurisdictions, and seeking to lift the automatic stay, all of which would disrupt the Debtors' day-to- day operations. The Debtors further aver that failure to pay those taxes could also trigger unwarranted governmental action in the form of increased audits, which would also be disruptive of the Debtors' operations and detrimental to all parties-in- interest. A list of the Debtors' taxing authorities is available for free at http://bankrupt.com/misc/Capmark_TaxingAuthorities.pdf GE Objects General Electric Capital Corporation tells the Court that it does not object to the relief sought by the Debtors, except to the extent that the Debtors seek to use funds from the accounts established pursuant to the Debtors' agreements with GE to satisfy their tax obligations. According to GE, the Debtors have not specifically identified the bank accounts from which they intend to pay these obligations. While GE Capital does not believe the accounts established pursuant to the GE Agreements are within the scope of the Motion, GE Capital has filed its objection out of abundance of caution, in case the accounts were improperly established or maintained, or in case the Debtors intend to treat the funds in those accounts as cash collateral for purposes of meeting their tax obligations. * * * The Court authorized the Debtors, on an interim basis, to pay prepetition taxes in an amount not to exceed $200,000. A final hearing to consider the request is scheduled for November 24, 2009, at 9:00 a.m. About Capmark Financial Based in Horsham, Pennsylvania, Capmark Financial Group Inc. -- http://www.capmark.com/-- is a diversified company that provides a broad range of financial services to investors in commercial real estate-related assets. Capmark has three core businesses: lending and mortgage banking, investments and funds management, and servicing. Capmark operates in North America, Europe and Asia. Capmark has 1,000 employees located in 37 offices worldwide. On October 25, 2009, Capmark Financial Group Inc. and certain of its subsidiaries filed voluntary petitions for relief under Chapter 11 (Bankr. D. Del. Case No. 09-13684) Capmark's financial advisors are Lazard Fr� res & Co. LLC and Loughlin Meghji + Company. Capmark's bankruptcy counsel is Dewey & LeBoeuf LLP. Richards, Layton & Finger, P.A. serves as local counsel. Beekman Advisors, Inc., is serving as strategic advisor. KPMG LLP is tax and accounting advisor. Epiq Bankruptcy Solutions, LLC is the claims and notice agent. Capmark has total assets of US$20 billion against total debts of US$21 billion as of June 30, 2009. Bankruptcy Creditors' Service, Inc., publishes Capmark Financial Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Capmark Financial Group Inc. and its units. (http://bankrupt.com/newsstand/or 215/945-7000) CAPMARK FINANCIAL: Proposes to Reject 5 Office Facility Leases -------------------------------------------------------------- Capmark Financial Group Inc. and its units seek the Court's authority to reject five unexpired nonresidential real property office facility leases. The Debtors tell the Court that the properties relating to the Leases are currently vacant and the Debtors do not intend to use the Vacant Properties during the Chapter 11 cases. The Vacant Properties are comprised of: (i) 95,290-square feet of corporate office space located at 4009 Columbus Road SW, Paramount Building, in Granville, Ohio; (ii) 8,401-square feet of corporate office space located at 411 Borel Avenue, Suite 320, in San Mateo, California; (iii) 1,845-square feet of office space located at 800 Brickell Avenue, Suite 1105, in Miami, Florida; (iv) 5,103-square feet of office space located at 12544 High Bluff Drive, in San Diego, California; and (v) 4,356-square feet of office space located at 2700 Post Oak Boulevard, Suite 1450, in Houston, Texas. The Debtors assert that by rejecting the Leases, they will save approximately $2,800,000 annually or over $238,000 per month. CARITAS HEALTHCARE: 2nd Bidding Round Possible for 2 Assets ----------------------------------------------------------- Brooklyn Bankruptcy Court Judge Carla E. Craig isn't completely happy with the winning bidder for Caritas Healthcare's two hospital sites, St. John's Hospital's two-acre campus in Elmhurst and Mary Immaculate Hospital's four-acre campus in Jamaica, and could instead reopen the bidding process for the properties, Anna Gustafson at YourNabe.com reports, citing Queens Borough President Helen Marshall's spokesperson, Dan Andrews. According to YourNabe.com, Mr. Andrews said that Judge Craig was scheduled to approve or deny the properties' $26.625 million sale to a group led by Johsua Guttman on October 22, but instead ordered a delay on the decision. YourNabe.com relates that Ms. Marshall's office is worried about Guttman Realty's history. Guttman Realty owner Joshua Guttmanand his son, Jack, were charged with 434 counts of failure to maintain privately owned waterfront property after a 10-alarm fire broke out in 2006 at one of Guttman's Brooklyn properties, the Greenpoint Terminal Market. Leszek Kuczera of Brooklyn was charged in 2006 with setting the fire. About Caritas Health Care Inc. Caritas Health Care Inc. is the owner of Mary Immaculate Hospital and St. John's Queens Hospital. Caritas, created by Wyckoff Heights Medical Center, purchased the two hospitals in a bankruptcy sale in early 2007 from St. Vincent Catholic Medical Centers of New York. St. John's has 227 generate acute-care beds while Mary Immaculate has 189. Caritas Health Care and eight of its affiliates filed for Chapter 11 on February 6, 2009 (Bankr. E.D. N.Y., Lead Case No. 09-40901). Adam T. Berkowitz, Esq., at Proskauer Rose LLP, has been tapped as counsel. JL Consulting LLC is the Debtors' restructuring advisors. Caritas in its bankruptcy petition estimated assets of $50 million to $100 million, and debts of $100 million to $500 million. CATHOLIC CHURCH: Survivors Want Lift Stay for Depositions --------------------------------------------------------- The Unofficial Committee of Abuse Survivors of the Catholic Diocese of Wilmington, Inc.'s bankruptcy case asks the U.S. Bankruptcy Court for the District of Delaware to modify the automatic stay with respect to the litigation pending in the Superior Court of the state of Delaware involving the Diocese, solely to allow the parties to take de bene esse depositions to perpetuate the testimony of infirm or dying parties and witnesses as ordered by the Delaware Superior Court in its alternative dispute resolution order, entered October 7, 2009. Thomas S. Neuberger, Esq., at The Neuberger Firm, P.A., in Wilmington, Delaware, relates that what constitutes "cause" for relief from the automatic stay is not defined in the Bankruptcy Code. Consequently, he notes, a bankruptcy court must decide what constitutes "cause" on a case-by-case basis. He notes that in In re Rexene Products Company, 141 B.R. 574, 576 (Bank. D. Del. 1992), the court held that these tests should be used to decide whether relief from the automatic stay should be granted for cause to permit the continuation of a proceeding: (a) Whether any great prejudice to either the bankruptcy estate or the debtor will result from continuation of the civil suit; (b) Whether the hardship to the [non-bankrupt party] by maintenance of the stay considerably outweighs the hardship of the debtor; and (c) Whether the creditor has a probability of prevailing on the merits. The Rexene Products tests are satisfied because the Diocese will not experience any great prejudice if the request is granted, Mr. Neuberger contends. He notes that there are only a small number of persons for whom de bene esse depositions are needed, and hence, the Diocesan personnel and resources would not be overly taxed or distracted by its counsel's participation in depositions. If the bankruptcy case follows in the mold of previous Diocesan bankruptcy cases, the Diocese will seek to maintain in effect for as long as possible the stay on all proceedings in the Clergy Sexual Abuse Cases commenced against it, while it negotiates with its insurance carriers and attempts to stave off determinations concerning what church property constitutes property of its bankruptcy estate, Mr. Neuberger alleges. In the meantime, plaintiffs and witnesses will die, he says. Past experience in diocesan bankruptcies indicates that granting relief from the automatic stay provides an essential impetus toward reorganization, as insurers have little incentive to negotiate meaningfully with the dioceses or claimants so long as the stay remains in effect, Mr. Neuberger tells the Court. He asserts that the depositions pursuant to the Mediation Order can also provide guidance on liability and damage issues that can facilitate settlement in other cases. He insists that whatever minor prejudice the Diocese incurs by participating in a limited number of depositions is more than counter-balanced by these positive effects on the case. Diocese Responds The Diocese says that it is not opposed to de bene esse depositions in the Clergy Sexual Abuse Cases being taken. However, contrary to the Survivors Committee's request that the Court grant blanket relief from the stay to permit de bene esse depositions without any limitations in place, it is essential that a process be put in place, which will aid the parties in determining whether there truly is a need for a de bene esse deposition, James L. Patton, Jr., Esq., at Young Conaway Stargatt & Taylor, LLP, tells Judge Sontchi. To the extent de bene esse depositions are permitted, Mr. Patton contends that the Diocese will be required to expend its own limited resources preparing for and participating in the depositions while simultaneously funding its bankruptcy proceeding. At this very early stage of the Chapter 11 case, he argues that it is crucial that the Diocese be able to focus on developing and implementing its restructuring plan. Thus, Mr. Patton argues, the plaintiffs' counsel should not be permitted to decide unilaterally that a particular plaintiff or witness is infirm or dying, and that therefore, a de bene esse deposition is needed. He insists that permitting de bene esse depositions without some sort of proof by the person seeking the deposition that the proposed deponent's testimony must be preserved immediately, will be burdensome on the Diocese and will disrupt the administration and expeditious reorganization of the assets of the bankruptcy estate to the detriment of all creditors, he says. About Diocese of Wilmington The Diocese of Wilmington covers Delaware and the Eastern Shore of Maryland and serves about 230,000 Catholics. The Delaware diocese is the seventh Roman Catholic diocese to file for Chapter 11 protection to deal with lawsuits for sexual abuse. Previous filings were by the dioceses in Spokane, Washington; Portland, Oregon; Tucson, Arizona; Davenport, Iowa, Fairbanks, Alaska; and San Diego, California. The bankruptcy filing automatically stayed eight consecutive abuse trials scheduled in Delaware scheduled to begin October 19. There are 131 cases filed against the Diocese, with 30 scheduled for trial. The Diocese filed for Chapter 11 on Oct. 18, 2009 (Bankr. D. Del. Case No. 09-13560). Attorneys at Young Conaway Stargatt & Taylor, LLP, serve as counsel to the Diocese. The Ramaekers Group, LLC, is the financial advisor. The petition says assets range $50,000,001 to $100,000,000 while debts are between $100,000,001 to $500,000,000. (Catholic Church Bankruptcy News; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). CATHOLIC CHURCH: Survivors Want to Designate Del. Bishop as Debtor ------------------------------------------------------------------ The Unofficial Committee of Abuse Survivors for the Catholic Diocese of Wilmington, Inc., asks the U.S. Bankruptcy Court for the District of Delaware, pursuant to Rule 9001(5) of the Federal Rules of Bankruptcy Procedure, to designate Bishop W. Francis Malooly as the "Debtor" for purposes of (i) examination under Section 343 of the Bankruptcy Code, and (ii) filing the Diocese's schedules of assets and liabilities and statement of financial affairs under Section 521 of the Bankruptcy Code. Bishop Malooly is the bishop of the Diocese of Wilmington and the sole member of Catholic Diocese of Wilmington, Inc. As the bishop, Bishop Malooly is the highest ranking ecclesiastical clergy in CDOW, and signed the Debtor's petition. However, in the Diocese's corporate resolution authorizing the commencement of the bankruptcy case, the Diocese designated Fr. J. Thomas Cini as its representative for the purposes of signing all other pleadings, including the Schedules and SOFA, relates Thomas S. Neuberger, Esq., at The Neuberger Firm, P.A., in Wilmington, Delaware. Creditors are not limited to examining only one witness at the first meeting of creditors under Section 341 of the Bankruptcy Code, Mr. Neuberger asserts. He notes that Rule 9001(5) specifically anticipates that more than one corporate officer may be necessary for a meaningful examination. Thus, he points out, both Bishop Malooly and Fr. Cini can execute the Schedules and SOFA, and appear at the first meeting of creditors. Mr. Neuberger contends that Bishop Malooly should sign the Schedules and SOFA and appear to testify at the Section 341 meeting because: -- he personally consulted with advisors prior to authorizing the filing of the Chapter 11 case and the propriety of the commencement of the case is at issue; -- he signed the petition for relief under the Bankruptcy Code, and is the sole member of the Debtor; -- he is the Diocese's senior ecclesiastical and secular officer; -- under Canon Law, he is the supreme administrator of all personal and real property of the Diocese, he is on the board of directors of the parishes and directly or indirectly manages all Catholic entities in the Diocese; -- he appoints the priests that are the pastors in the parishes, and the chair of the Diocese Finance Committee; -- he has knowledge of the Diocese's financial condition as evidenced by his public statement explaining why the Diocese filed for bankruptcy; and -- his designate, Fr. Cini, has testified that Bishop Malooly is the ultimate decision maker in the Diocese. The Diocese's apparent refusal to produce Bishop Malooly at the first meeting of creditors would be a violation of its fiduciary duty to creditors, Mr. Neuberger tells the Court. He adds that if Bishop Malooly personally refuses to appear, he too would be violating his fiduciary duty to creditors as President of the Diocese. "Bishop Malooly's attendance also is important given the unique claims in this case," Mr. Neuberger tells the Court. "Accountability is an important part of the healing process for survivors of clergy sexual abuse," he adds, citing that in other Diocesan bankruptcy cases, the bishops voluntarily appeared at Section 341 examinations and signed the Schedules and SOFA. The Court will commence a hearing on November 2, 2009, to consider the request. Diocese Objects The Survivors Committee's request that the Court designate Bishop Malooly as the Debtor's corporate representative is premature, unwarranted and unsupported by the facts of the bankruptcy case, and thus, should be denied, James L. Patton, Jr., Esq., at Young Conaway Stargatt & Taylor, LLP, in Wilmington, Delaware, tells Judge Sontchi. Mr. Patton avers that the Diocese has not completed its schedules and statement, nor has the meeting of creditors under Section 341 of the Bankruptcy Code been scheduled. As a result, he says, the Diocese has not yet determined who will execute the schedules and statement or testify at the Section 341 Meeting, but expects it will likely be Bishop Malooly, Monsignor Cini, the Diocese's secretary and vicar general of administration, or Joseph Corsini, the Diocese's chief financial officer. The Diocese will evaluate who is the appropriate signatory or witness taking into account, inter alia, who is best positioned to answer questions about the schedules and statement and other issues that will be at the forefront of the Chapter 11 case, Mr. Patton relates. He asserts that it is inappropriate for the Survivors Committee to ask the Court to substitute its business judgment for that of the Diocese as to who is the appropriate signatory and witness for purposes of the Section 341 Meeting. The logic underlying the Survivors Committee's request is counterintuitive, flawed, and undermines the purpose of the statutory meeting of creditors, Mr. Patton contends. Indeed, he argues, Bishop Malooly has been in his position a little more than a year, whereas Monsignor Cini has served as Vicar General of Administration for the Diocese since 1996, and Mr. Corsini has been employed as the Diocese's CFO for approximately 10 years. The Diocese's deliberate approach to determining the proper signatory and witness is far from "picking and choosing" a representative of the estate at random or for the purpose of evading creditors, Mr. Patton asserts. He insists, among other things, that the Diocese has done nothing to indicate that it will not present the individual most knowledgeable about the Diocese's financial affairs and operations, and thus, the Survivors Committee can point to no legitimate reason why the Diocese should lose the right to designate its representative. Accordingly, the Survivors Committee's effort to substitute its business judgment for that of the Debtor is premature at best, and should be denied because the Committee has not provided any legal or factual basis to require, by order of the Court, that Bishop Malooly execute the schedules and statement and appear at the Section 341 Meeting. About Diocese of Wilmington The Diocese of Wilmington covers Delaware and the Eastern Shore of Maryland and serves about 230,000 Catholics. The Delaware diocese is the seventh Roman Catholic diocese to file for Chapter 11 protection to deal with lawsuits for sexual abuse. Previous filings were by the dioceses in Spokane, Washington; Portland, Oregon; Tucson, Arizona; Davenport, Iowa, Fairbanks, Alaska; and San Diego, California. The bankruptcy filing automatically stayed eight consecutive abuse trials scheduled in Delaware scheduled to begin October 19. There are 131 cases filed against the Diocese, with 30 scheduled for trial. The Diocese filed for Chapter 11 on Oct. 18, 2009 (Bankr. D. Del. Case No. 09-13560). Attorneys at Young Conaway Stargatt & Taylor, LLP, serve as counsel to the Diocese. The Ramaekers Group, LLC, is the financial advisor. The petition says assets range $50,000,001 to $100,000,000 while debts are between $100,000,001 to $500,000,000. (Catholic Church Bankruptcy News; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). CATHOLIC CHURCH: Wilmington Gets Interim Nod to Pay Employees ------------------------------------------------------------- The Catholic Diocese of Wilmington, Inc., seeks authority from the U.S. Bankruptcy Court for the District of Delaware, in accordance with its stated policies, and in its sole discretion, to: (a) pay all prepetition employee wages, salaries and other accrued compensation; (b) reimburse all prepetition employee business expenses; (c) make all contributions to prepetition benefit programs and continue the programs in the ordinary course of business; (d) honor workers' compensation obligations; (e) make all payments for which prepetition payroll deductions were made; (f) pay all processing costs and administrative expenses relating to the payments and contributions; and (g) make all payments to third parties incident to the payments and contributions. The Diocese also asks Judge Sontchi to authorize and direct applicable banks and other financial institutions to receive, process and honor all checks and electronic payment requests relating to the Employee Obligations. In addition to providing resources, spiritual leadership, direction and support to parishes on spiritual matters, the Diocese provides financial and certain "back-office" support for parish corporations and non-debtor Catholic entities operating within the Diocese's territorial jurisdiction, discloses James L. Patton, Jr., Esq., at Young Conaway Stargatt & Taylor, LLP, in Wilmington, Delaware. He adds that the Diocese also holds and manages certain funds, including funds held in trust, received via grant, gift, devise, or bequest to be used for Catholic religious, educational or other charitable purposes. In addition to its own employees, the Diocese provides payroll processing services, through Automatic Data Processing, to the Non-Debtor Catholic Entities other than cemeteries. For a given pay period, the Diocese calculates amounts owing to the employees of the Non-Debtor Catholic Entities, which forward the appropriate amount to a payroll account maintained by the Diocese. By centralizing the payroll processing services and maintaining a single relationship with ADP, the Diocese is able to provide administrative cost savings to the Non-Debtor Catholic Entities with only a minimal marginal cost increase to the Diocese. The Diocese currently employs 68 employees, seven of whom are part-time, hourly employees, 57 are salaried full-time employees and four are salaried part-time employees. In addition, there are 44 employees of Non-Debtor Catholic Entities, whose operations are funded by the Diocese. The Employees perform a variety of critical functions for the Diocese, including numerous ministries and other operations, providing ecclesiastical, managerial, financial, clerical, religious, and pastoral services to individuals and families living within the Diocese's territorial jurisdiction. In an interim order, the Bankruptcy Court authorized, but not directed, the Catholic Diocese of Wilmington, Inc., in its sole discretion, to continue to honor and pay in the ordinary course, and to pay any and all prepetition amounts relating to the: (a) Unpaid Compensation in an amount not to exceed $216,000; (b) Reimbursable Expenses in an amount not to exceed $10,000; (c) Deductions. To the extent that any Deductions that accrued prior to September 30, 2009, remain unpaid as of the Petition Date, the Diocese is authorized to remit any of those Deductions to the applicable third party, in an amount not to exceed $11,000. The Diocese is authorized to remit any deductions that accrued between September 30 and the Petition Date to the applicable third party in an amount not to exceed $7,000; (d) Withheld Amounts; (e) Payroll Taxes. The Diocese is authorized to continue to honor and process the prepetition obligations with respect to the Payroll Taxes in an amount not to exceed $55,000 without further Court order and to forward the Withheld Amounts to the appropriate taxing authorities, in the ordinary course of business, as routinely done prior to the Petition Date; (f) the Workers' Compensation Program in an amount not to exceed $30,000 without further Court order; and (g) Employee Benefits, in an amount not to exceed $566,500 in the aggregate, including Group Health Insurance Plan, Leave Pay, and Group Long-Term Disability Insurance that have been earned, accrued or vested in amounts not to exceed the $10,950 statutory cap set forth in Sections 507(a)(4) and 507(a)(5) of the Bankruptcy Code, as applicable. The Unofficial Committee of Abuse Survivors had previously asked the Court to deny or limit the relief sought in the request. The Survivors Committee asserted, among other things, that the request potentially has enormous consequences to the legal issue of whether parishes, religious orders and other parties related to the Diocese are part of the Debtor and whether their real and personal property is property of the estate. Hence, the Survivors Committee said that the Court should not make any findings of fact or conclusions of law regarding the relationships between the Diocese, the Parishes and the Non-Debtor Catholic Entities. The Court will consider the entry of a final order on the request on November 12, 2009. Any objection to that order must be filed by November 4. About Diocese of Wilmington The Diocese of Wilmington covers Delaware and the Eastern Shore of Maryland and serves about 230,000 Catholics. The Delaware diocese is the seventh Roman Catholic diocese to file for Chapter 11 protection to deal with lawsuits for sexual abuse. Previous filings were by the dioceses in Spokane, Washington; Portland, Oregon; Tucson, Arizona; Davenport, Iowa, Fairbanks, Alaska; and San Diego, California. The bankruptcy filing automatically stayed eight consecutive abuse trials scheduled in Delaware scheduled to begin October 19. There are 131 cases filed against the Diocese, with 30 scheduled for trial. The Diocese filed for Chapter 11 on Oct. 18, 2009 (Bankr. D. Del. Case No. 09-13560). Attorneys at Young Conaway Stargatt & Taylor, LLP, serve as counsel to the Diocese. The Ramaekers Group, LLC, is the financial advisor. The petition says assets range $50,000,001 to $100,000,000 while debts are between $100,000,001 to $500,000,000. (Catholic Church Bankruptcy News; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). CENTAUR PA LAND: Voluntary Chapter 11 Case Summary -------------------------------------------------- Debtor: Centaur PA Land, LP 10 W. Market Street, Suite 200 Indianapolis, IN 46204 Case No.: 09-13760 Chapter 11 Petition Date: October 28, 2009 Court: United States Bankruptcy Court District of Delaware (Delaware) Judge: Kevin J. Carey Debtor's Counsel: Jeffrey M. Schlerf, Esq. Fox Rothschild LLP Ctizens Bank Center, Suite 1300 919 North Market Street P.O. Box 2323 Wilmington, DE 19899-2323 Tel: (302) 654-7444 Fax: (302) 656-8920 Email: jschlerf@foxrothschild.com Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $10,000,001 to $50,000,000 The Company says it does not have unsecured creditors who are non insiders when they filed their petition. CHANA TAUB: N.Y. Rent Stabilization Spat Sent to State Court ------------------------------------------------------------ WestLaw reports that a bankruptcy court would exercise its discretion to permissively abstain from hearing an adversary proceeding that a Chapter 11 debtor-landlord had brought to compel tenants in a rent stabilized apartment complex either to turn over past due rent which they allegedly owed or to quit the premises, in which the tenants had counterclaimed for the debtor's alleged violation of New York Rent Stabilization Law in purportedly charging excessive rent and for the debtor's alleged failure to properly maintain apartments and to correct allegedly hazardous conditions. The debtor asserted that the proceeding involved rents that were the life blood of any reorganization effort and was one over which the court could exercise "core" jurisdiction. However, the proceeding involved complex issues of a predominantly state law nature, for which a specialized tribunal had been established which offered parties a summary process to promptly address the issues presented, and that had the ability to coordinate with New York City agencies to obtain necessary information, including an inspection of the premises. In re Taub, --- B.R. ----, 2009 WL 3055233, 52 Bankr. Ct. Dec. 48 (Bankr. E.D.N.Y.) (Stong, J.). Chapter 11 debtor in possession and landlord Chana Taub is suing (Bankr. E.D.N.Y. Adv. Pro. No. 09-1277) three gentlemen who are tenants in an apartment building located at 1259 52nd Street in Brooklyn. She alleges that the Defendants have not paid the rent and seeks an accounting, the payment of the unpaid rent, and if the rent is not paid, an order of eviction. The Defendants deny that they are liable for any back rent, and assert counterclaims for relief including compensatory and punitive damages. Judge Stong will let the state court sort out the dispute. Chana Taub filed a Chapter 11 petition (Bankr. E.D.N.Y. Case No. 08-44210) on July 1, 2008, and is represented by Dennis W. Houdek, Esq., in Manhattan. CHARTER COMMS: Bank Debt Trades at 9.3% Off in Secondary Market --------------------------------------------------------------- Participations in a syndicated loan under which Charter Communications, Inc., is a borrower traded in the secondary market at 90.70 cents-on-the-dollar during the week ended Oct. 30, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents a drop of 0.65 percentage points from the previous week, The Journal relates. The loan matures on March 6, 2014. The Company pays 262.5 basis points above LIBOR to borrow under the facility. Moody's has withdrawn its rating, while Standard & Poor's has assigned a default rating, on the bank debt. The debt is one of the biggest gainers and losers among widely quoted syndicated loans in secondary trading in the week ended Oct. 30, among the 161 loans with five or more bids. Based in St. Louis, Missouri, Charter Communications, Inc. (Pink OTC: CHTRQ) -- http://www.charter.com/-- is a broadband communications company and the fourth-largest cable operator in the United States. Charter provides a full range of advanced broadband services, including advanced Charter Digital Cable(R) video entertainment programming, Charter High-Speed(R) Internet access, and Charter Telephone(R). Charter Business(TM) similarly provides scalable, tailored, and cost-effective broadband communications solutions to business organizations, such as business-to-business Internet access, data networking, video and music entertainment services, and business telephone. Charter's advertising sales and production services are sold under the Charter Media(R) brand. Charter Communications and more than a hundred affiliates filed voluntary Chapter 11 petitions on March 27, 2009 (Bankr. S.D.N.Y. Case No. 09-11435). As of March 31, 2009, the Debtors had total assets of $13,650,000,000, and total liabilities of $24,501,000,000. Pacific Microwave filed for bankruptcy April 20, 2009, disclosing assets of not more than $50,000 and debts of more than $1 billion. Charter filed its Chapter 11 petitions to implement a financial restructuring, which, upon approval, would reduce the Company's debt by approximately $8 billion. The Hon. James M. Peck presides over the cases. Richard M. Cieri, Esq., Paul M. Basta, Esq., and Stephen E. Hessler, Esq., at Kirkland & Ellis LLP, in New York, serve as counsel to the Debtors, excluding Charter Investment Inc. Albert Togut, Esq., at Togut, Segal & Segal LLP in New York, serves as Charter Investment, Inc.'s bankruptcy counsel. Curtis, Mallet-Prevost, Colt & Mosel LLP, in New York, is the Debtors' conflicts counsel. Ernst & Young LLP is the Debtors' tax advisors. KPMG LLP is the Debtors' independent auditors. The Debtors' valuation consultants are Duff & Phelps LLC; the Debtors' financial advisors are Lazard Freres & Co. LLC; and the Debtors' restructuring consultants are AlixPartners LLC. The Debtors' regulatory counsel is Davis Wright Tremaine LLP, and Friend Hudak & Harris LLP. The Debtors' claims agent is Kurtzman Carson Consultants LLC. Bankruptcy Creditors' Service, Inc., publishes Charter Communications Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by Charter Communications and more than 100 of its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CHINA MEDIAEXPRESS: Receives Delisting Notice from NYSE Amex ------------------------------------------------------------ China MediaExpress Holdings, Inc. on October 29 diclosed that on October 23, 2009 it received a letter from NYSE Amex LLC indicating that as it had undergone through a reverse merger for purposes of Section 341 of the AMEX Company Guide (which required the satisfaction of AMEX's initial listing standards at the time of closing), the post-reverse merger entity failed to satisfy one or more of such criteria, and its securities are therefore subject to being delisted from AMEX. Specifically, Section 102 (a) of the Company Guide requires a minimum public distribution of 500,000 shares of common stock together with a minimum of 800 public shareholders or a minimum public distribution of 1,000,000 shares of common stock together with a minimum of 400 public shareholders. The Company's common stock is now subject to immediate delisting proceedings, unless it requests a hearing before a NYSE Amex panel not later than October 30, 2009. The Company is planning to appeal this determination and request such a hearing before a committee of AMEX. There can be no assurance CME's request for continued listing will be granted. About CME CME, through contractual arrangements with Fujian Fenzhong, an entity majority owned by CME'S former majority shareholder, operates the largest television advertising network on inter-city express buses in China. While CME has no direct equity ownership in Fujian Fenzhong, through the contractual agreements CME receives the economic benefits of Fujian Fenzhong's operations. Fujian Fenzhong generates revenue by selling advertisements on its network of television displays installed on over 18,000 express buses originating in thirteen of China's most prosperous regions, including the five municipalities of Beijing, Shanghai, Guangzhou, Tianjin and Chongqing and eight economically prosperous provinces, namely Guangdong, Jiangsu, Fujian, Sichuan, Hebei, Anhui, Hubei and Shandong which generate nearly half of China's GDP. CHRISTO BARDIS: Higgins Ranch Project Auctioned Off --------------------------------------------------- Layla Bohm at Lodi News-Sentinel reports that Christo Bardis and John D. Reynen's Higgins Ranch project has been put up for auction, with a minimum price of $750,000, an amount lower than the $3.2 million that the developers had sought when they placed it on the market and lower than the reserve in a spring auction, which had set the minimum bid at less than $1.2 million. Higgins Ranch, says News-Sentinel, is being leased to a dairy farmer and is making $841 a month. News-Sentinel relates that buyers have until November 18 to submit sealed bids. Real estate broker Christo Bardis filed a voluntary petition under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Eastern District of California, Sacramento, on Oct. 15, 2008 (Case No. 08-34878). Mr. Bardis is co-founder of homebuilder Reynen & Bardis Communities. David M. Meegan, Esq., at Meegan, Hanschu & Kassenbrock, represents Mr. Bardis as counsel. Partner John D. Reynen filed for bankruptcy on April 23, 2008, in Sacramento (Case No. 08-25145) to avert Bank of the West's foreclosure of his personal property securing a $26 million loan. Messrs. Reynen and Bardis guaranteed at least $740 million used by their company that was obtained from several creditors but failed to repay the loan, according to the Troubled Company Reporter on April 25, 2008. Mr. Bardis owes as much as $582,593,701 in loans to his unsecured creditors including, among others, Wells Fargo Bank owed $81,082,143; Indymac Bank owed $70,233,564; Comerica owed $52,235,143. Mr. Reynen disclosed in its filing assets between $50 million and $100 million, and debts between $500 million and $100 million. He owes $286,616,222 to his unsecured creditors including Lennar Rennaissance Inc. asserting $47,000,000 in trade debt; Wells Fargo asserting $29,387,928 in bank loan; and Indymac Bank asserting $26,833,087 in bank loan. Howard S. Nevins, Esq., at Hefner, Stark & Marols, LLP, in Sacramento, California, represents Mr. Reynen. Both cases are assigned to the Hon. Christopher M. Klein. CIB MARINE: Wins Confirmation of Reorganization Plan ---------------------------------------------------- CIB Marine Bancshares, Inc. disclosed that the federal bankruptcy court has confirmed the company's pre-packaged plan of reorganization under Chapter 11 of the United States Bankruptcy Code. Holding company officials said the court's approval of the plan -- which involves exchanging shares of its preferred stock for the debentures issued by the holding company in conjunction with its trust preferred securities offerings -- paves the way for CIB Marine Bancshares to emerge from Chapter 11 in a stronger position. "The court's confirmation of our plan of reorganization is very good news for the holding company and its shareholders," said John Hickey, Jr., chairman and CEO of CIB Marine Bancshares, Inc., which filed the pre-packaged plan in Federal Bankruptcy Court in Milwaukee in September. "The plan the court confirmed is what we proposed and what was approved by a vote of our trust preferred securities holders. The court's approval will allow our holding company to move forward with an orderly and efficient reorganization process." CIB Marine Bancshares, Inc. is the holding company for the bank that operates as Central Illinois Bank in mid-state Illinois and as Marine Bank in the Milwaukee area, Indianapolis and Scottsdale. The bank and its branches are not affected by the holding company's reorganization efforts, Mr. Hickey said. "Our bank remains fully committed to meeting the ongoing needs of our valued customers, and the restructuring of the holding company will have no direct impact on the operations of the bank," Mr. Hickey said, adding that the bank is regulated separately from the holding company by both federal and state regulators. "The bank remains adequately capitalized, and its accounts are insured up to applicable limits by the FDIC." Earlier this summer, the company proposed a plan to reduce expenses, lessen debt and strengthen the company by effectively converting debt issued in conjunction with its trust preferred securities offerings into equity in the form of its non-cumulative perpetual preferred stock. Mr. Hickey said work would begin immediately on implementation of the plan. "We are pleased that the judge saw the benefits of our proposed plan of reorganization," he said, "and we look forward to putting the plan into action and to emerging from this process as a stronger, more successful holding company." CIB Marine Bancshares, Inc. -- http://www.cibmarine.com -- is a one-bank holding company with 17 banking offices in central Illinois, Wisconsin, Indiana and Arizona. CIT GROUP: Files for Chapter 11 with Prepackaged Plan ----------------------------------------------------- CIT Group Inc. on November 1 announced that, with the overwhelming support of its debtholders, the Board of Directors voted to proceed with the prepackaged plan of reorganization for CIT Group Inc. and a subsidiary that will restructure the Company's debt and streamline its capital structure. Importantly, none of CIT's operating subsidiaries, including CIT Bank, a Utah state bank, will be included in the filings. As a result, all operating entities are expected to continue normal operations during the pendency of the cases. All classes voted to accept the prepackaged plan and all were substantially in excess of the required thresholds for a successful vote. Approximately 85% of the Company's eligible debt participated in the solicitation, and nearly 90% of those participating supported the prepackaged plan of reorganization. Similarly, approximately 90% of the number of debtholders voting, both large and small, cast affirmative votes for the prepackaged plan. The conditions for consummating the exchange offers were not met. Accordingly, CIT's Board of Directors approved the Company to proceed with the voluntary filings for CIT Group Inc. and CIT Group Funding Company of Delaware LLC with the U.S. Bankruptcy Court for the Southern District of New York. Due to the overwhelming and broad support from its debtholders, the Company is asking the Court for a quick confirmation of the approved prepackaged plan. Under the plan, CIT expects to reduce total debt by approximately $10 billion, significantly reduce its liquidity needs over the next three years, enhance its capital ratios and accelerate its return to profitability. "The decision to proceed with our plan of reorganization will allow CIT to continue to provide funding to our small business and middle market customers, two sectors that remain vitally important to the U.S. economy," said Jeffrey M. Peek, Chairman and CEO. "We are enormously appreciative of the extraordinary support we have received from our many constituencies. This market-based solution allows CIT to enter into the reorganization process well-prepared and positioned for a swift emergence. I want to thank our customers for their support and express my gratitude to our employees whose dedication and hard work are crucial to the future of CIT. We also acknowledge our constructive working relationship with our regulators and look forward to their continued guidance as we move through this process." For more than 100 years, CIT has provided much needed capital to small business and middle market customers. These two sectors play a vital role in the U.S. economy and in overall employment and job creation, representing more than 90 million employees. CIT is the leading provider of financing to the retail sector and to women-, minority- and veteran-owned small businesses. Over one million customers depend on CIT to provide the financing needed to run their businesses. In addition to being one of the largest independent leasing companies in the U.S., CIT maintains the following leadership positions among others: * #1 factoring company in the U.S.; * 3rd largest railcar lessor in the U.S.; and * 3rd largest aircraft lessor in the world. CIT has expanded its $3 billion senior secured credit facility by an additional $4.5 billion on October 28, 2009. These funds, supplemented by cash generated from operations, will allow us to meet clients' needs and to satisfy customary obligations associated with the daily operation of its businesses during the confirmation process. CIT has also secured an incremental $1 billion committed line of credit to provide supplemental liquidity as it pursues that plan. In conjunction with the bankruptcy, CIT has filed a number of first day motions that will allow it to continue to operate in the ordinary course during the confirmation process. These motions include requests to continue the payment of wages, salaries and other employee benefits. Additionally, the Company filed a motion seeking the necessary relief from the Court to pay its vendors and certain other creditors in full. Under the proposed prepackaged plan of reorganization, all existing common and preferred stock will be cancelled upon emergence. The original CIT Group Inc. offers launched on October 1, 2009 have expired. Securities tendered in these offers will be released into their original CUSIP numbers as soon as practicable. Securities tendered in connection with offers that have not yet expired, certain long-term notes maturing after 2018 and the Delaware Funding offers, are being retained in the CUSIP numbers for those offers; however, these securities can be withdrawn from the offers and returned to the original CUSIP number for trading. Any withdrawn securities can be re-tendered until the expiration date. Goldman and Icahn Deals CIT Group was promptly expected to file for a prepackaged bankruptcy after striking deals with billionaire Carl Icahn and Goldman Sachs Group Inc. The deals with Mr. Icahn and Goldman were disclosed October 30, the day after a deadline passed for CIT to solicit votes in support of either a $30 billion out- of-court debt exchange or a prepackaged bankruptcy. CIT is seeking to reduce debt by at least $5.7 billion after being locked out of credit markets it relies on for funding and posting nine quarters of losses totaling more than $5 billion. "CIT has gotten its ducks in a row for filing," Adam Steer, an analyst with CreditSights Inc. in New York, said in a telephone interview with Bloomberg. "They can hopefully get out of the bankruptcy court faster, which may be better for debt recoveries." Under the prepackaged plan, CIT bondholders will get 70 cents on the dollar in the form of new notes and equity in the reorganized company. If CIT is forced into a "free-fall" bankruptcy, unsecured claims may fetch as little as 6 cents on the dollar, according to Jeffrey Peek, the Company's chief executive officer. -- Icahn Deal CIT Group on October 30 said it has entered into an agreement with Carl Icahn to support its restructuring plan and secured an incremental US$1 billion committed line of credit from Icahn Capital LP to provide supplemental liquidity for CIT as it pursues that plan. This new line of credit may be drawn by the Company on or prior to December 31, 2009, subject to definitive documentation and other customary conditions, and may be drawn as debtor-in-possession financing in the event of bankruptcy. Together with CIT's US$4.5 billion expansion facility, announced on October 28, 2009, and other available sources of liquidity, the line of credit will further enhance CIT's liquidity during the execution of its restructuring plan and ensure its ability to serve its existing small business and middle market customers. Mr. Icahn, who says he's CIT largest bondholder with $2 billion of its debt, initially opposed CIT's plan, contending the investments were worth more in a traditional bankruptcy. CIT's agreement to "give control to the noteholders" and an accelerated process for appointing directors "significantly improve corporate governance and cash flow protections, and are positive for the company and all noteholders," Icahn said in a statement Oct. 30, explaining why he changed his vote in favor "Icahn had two goals in mind: Influence over the board and participation in the expansion loan facility," said Kevin Starke, an analyst at CRT Capital Group LLC in Stamford, Connecticut, said in a telephone interview with Bloomberg. "He's won on both counts." According to Bloomberg, Icahn Associates Corp. is the largest shareholder of American Railcar Industries Inc., which depended on CIT for 31 percent of its business as of June 30, according to data compiled by Bloomberg. Icahn is chairman of the St. Charles, Missouri-based railcar maker. -- Goldman Deal CIT Group said in an October 30 regulatory filing that CIT Financial Ltd., a wholly owned subsidiary, has reached an agreement to amend its $3 billion securities-based financing facility with Goldman Sachs International. Pursuant to the amendment, the commitment amount of the GSI Facility has been reduced to $2.125 billion, effectively eliminating the currently unused portion of the facility, and CFL has agreed to post additional collateral to secure amounts due to GSI under the GSI Facility. In connection with the reduction of the commitment amount of the GSI Facility, CFL made a payment of approximately $285 million representing the proportional termination fee payment to GSI as required for any such reduction under the original terms of the GSI Facility. CFL has initially posted additional collateral in the amount of $250 million, which amount will fluctuate over time pursuant to the terms of the amendment. In consideration of these amendments to the GSI Facility, and subject to certain additional terms, GSI has agreed to forbear from exercising its right to terminate the GSI Facility to the extent that such right arises from a bankruptcy of CIT, which guarantees the obligations of CFL under the GSI Facility. The forbearance agreement is subject to specified limitations as to the nature and duration of the bankruptcy proceedings affecting CIT and continued compliance by CFL with the other terms of the GSI Facility, and during any bankruptcy proceedings additional financing may not be obtained under the GSI Facility. No amendment fee was paid to GSI under the terms of the amendment. All other material terms of the GSI Facility remain unchanged, including the facility fee in the amount of 285 basis points. 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. 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. Houlihan Lokey Howard & Zukin Capital, Inc. serves as financial advisor, and Paul, Weiss, Rifkind, Wharton & Garrison LLP serves as legal counsel to the Lender Steering Committee. Kurtzman Carson Consultants serves as claims and notice agent. CIT GROUP: Icahn Switches Vote, Now Backs Prepack Chapter 11 ------------------------------------------------------------ Carl C. Icahn announced October 30 that he is changing his vote in favor of CIT's proposed pre-packaged plan of reorganization due to material enhancements which have been made. In addition, he stated that he has agreed to provide a stand-by commitment for up to $1 billion in senior secured financing to the company. However, Icahn stated that the upfront cost to the company for the $1 billion of financing could be as much as 40% lower than the company paid to certain large noteholders for an equivalent $1 billion of financing in a loan entered into by the company and these large noteholders on October 28th. Mr. Icahn also announced that for the bondholders that voted against the pre-packaged plan at his request, he will modify the terms of his tender offer so that now, whether or not the Exchange Offer/Prepackaged Plan fails, they will still be protected at $600 per note for 30 days. He plans to commence his 30 day tender offer promptly. In making the announcement, Mr. Icahn stated: "We are pleased that CIT has made a number of changes as a result of our labors. Most importantly, CIT has now agreed to give control to the noteholders. The changes include the accelerated process for appointing new directors. CIT has also agreed to important enhancements to the second lien covenants. These changes significantly improve corporate governance and cash flow protections, and are positive for the company and all noteholders. Since CIT first launched its plan we have been very vocal, both publicly and privately, about the plan's deficiencies and our proposed solutions. The company has since made a number of modifications to the plan, which we believe protect noteholders and will likely provide a greater recovery on their investment. As a result, we have agreed to change our vote in favor of the pre- packaged plan. We are grateful to the company and its advisors for working constructively to improve the plan." "In addition, we are happy to assist the company through our $1.0 billion loan commitment. The commitment will provide additional liquidity at a significant cost saving to the company." "Finally, in order to protect noteholders who own the notes for which we will tender, we will not walk away from our tender offer even if the prepackaged plan is passed. We have heard from hundreds of small holders and we believe that they played an important role in helping us to effect change. We want to make sure that they feel like they were not disadvantaged by our now supporting the plan. Therefore, even if the plan is passed, we will commence our tender to allow the holders of those notes subject to our tender offer to tender them to us at a price of $600 per $1,000 face value." 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, by, among others things, shortening maturities by six months for all new notes and junior credit facilities. Carl Icahn sent a letter to CIT Group's board 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. CIT Group modified its amended Offering Memorandum dated as of October 16, 2009 through a supplement dated October 23, 2009. The supplement reflects changes that are expected to build additional bondholder support. The supplement is available at http://researcharchives.com/t/s?477c On October 27, Mr. Icahn sent a letter saying its affiliates have committed to provide a new $4.5 billion term loan to CIT as an alternative to the loan currently being arranged by Bank of America, N.A., which would be on superior terms and would save $100 million in fees. Mr. Icahn separately announced that he is providing downside protection for smaller CIT Group noteholders if they are willing to support him in his opposition to the company's pre-packaged bankruptcy plan. The protection will take the form of a 30 day tender offer at 60% of par value. CIT Group on October 28 announced that it has expanded its current $3 billion senior secured credit facility by an additional $4.5 billion arranged by Bank of America. It said it rejected Mr. Icahn's offer after the latter failed to provide evidence of his ability to fund the commitment. 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. 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 GROUP: Case Summary & 75 Largest Unsecured Creditors -------------------------------------------------------- Debtor: CIT GROUP 505 Fifth Avenue New York, New York 10017 Bankruptcy Case No.: 09-16565 Debtor-affiliate filing separate Chapter 11 petition: Entity Case No. ------ -------- CIT Group Funding Company of Delaware LLC 09-16566 Chapter 11 Petition Date: November 1, 2009 Court: United States Bankruptcy Court District of Delaware (Wilmington) About the Business: CIT Group Inc. (NYSE: CIT) 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. See http://www.cit.com/ Debtors' Counsel: J. Gregory Milmoe Gregg M. Galardi J. Gregory St. Clair Skadden, Arps, Slate, Meagher & Flom LLP Four Times Square New York, NY 10036 T: (212) 735-3000 F: (212) 735-2000 http://www.skadden.com/ Debtors' Investment Banker: Evercore Group L.L.C. Debtors' Financial Advisor: FTI Consulting Inc. Debtors' Claims agent: Kurtzman Carson Consultants LLC 2335 Alaska Avenue El Segundo, CA 90245 Total Assets as of June 30, 2009: $71,019,200,000 Total Debts as of June 30, 2009: $64,901,200,000 A full-text copy of the Debtor's petition, including a list of its 75 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/delb09-16565.pdf Debtor's List of 75 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Edward J. Bagley Expansion Term $7,500,000,000 Bank of America, Facility as administrative & Collateral agent Attn: Richard Piland TX-1-492-14-11 901 Main Street Dallas, TX 75202-3714 Tel. (214) 209-0987 Bank of New York, Retail Bonds $3,154,378,531 as trustee 101 Barclay Street FL8W New York, NY 10286 Tel: (212) 495-1784 Canadian Sr. Unsecured Guarantee $2,144,000,000 Notes Larry O'Brien Vice President The Bank of New York Mellon 101 Barclay Street, 8W New York, New York 10286 Tel: (212) 815-5995 Citibank NA, as Bank Debt $2,100,933,533 Administrative agent 0.94% Due 2010 AnneMarie Pavco 2 Penns Way Suite 200 Newcastle, De 19720 Tel: (302) 323-3900 Goldman Sachs Swap Guarantee $1,934,565,000 Agreement Attn: Credit Derivatives Middle Office 85 Broad Street New York, NY 10004 Tel: (212) 357-0167 The Bank of New York, Bond 7.63% due $1,318,245,100 as trustee 2012 101 Barclay Street FL8W New York, NY 10286 Tel: (212) 495-1784 The Bank of New York, Bond 12.00% due $1,199,946,308 as trustee 2018 101 Barclay Street FL8W New York, NY 10286 Tel: (212) 495-1784 The Bank of New York, Bond 4.25% due $1,108,787,348 as trustee 2011 101 Barclay Street FL8W New York, NY 10286 Tel: (212) 495-1784 ABN Amro Bank Guarantee $1,063,000,000 250 Bishopsgate London, England EC2M 4AA Tel: (44) 207-678-8000 The Bank of New York, Bond 0.76% $1,000,571,245 as trustee Due 2012 101 Barclay Street FL8W New York, NY 10286 Tel: (212) 495-1784 Citibank NA Bank Debt $1,000,406,379 Annemarie Pavco 0.64% Due 2011 2 Penns Way Suite 200 Newcastle, DE 19720 Tel: (302) 323-3900 The Bank of New York, Bond 5.5% Due 2014 $827,716,230 As Trustee The Bank of New York, Bond 6.1% Due 2067 $778,899,131 As Trustee The Bank of New York, Bond 4.75% Due 2010 $763,458,333 As Trustee The Bank of New York, Bond 4.25% Due 2010 $757,968,750 As Trustee The Bank of New York, Bond 5.60% Due 2011 $750,466,667 As Trustee The Bank of New York, Bond 1.61% Due 2011 $737,337,807 As Trustee The Bank of New York, Bond 1.65% Due 2013 $736,835,548 As Trustee The Bank of New York, Bond 4.65% Due 2016 $701,318,362 As Trustee The Bank of New York, Bond 5.00% Due 2014 $697,968,594 As Trustee The Bank of New York, Bond 3.80% Due 2012 $686,456,753 As Trustee The Bank of New York, Bond 5.00% Due 2015 $679,530,263 As Trustee The Bank of New York, Bond 5.00% Due 2014 $679,026,281 As Trustee The Bank of New York, Bond 1.35% Due 2011 $669,540,307 As Trustee The Bank of New York, Bond 1.17% Due 2012 $655,261,289 As Trustee The Bank of New York, Bond 5.13% Due 2014 $640,992,932 As Trustee The Bank of New York, Bond 5.50% Due 2016 $631,825,555 As Trustee The Bank of New York, Bond 4.25% Due 2015 $623,192,878 As Trustee The Bank of New York, Bond 1.35% Due 2011 $669,540,307 As Trustee The Bank of New York, Bond 5.40% Due 2016 $612,420,551 As Trustee The Bank of New York, Bond 5.80% Due 2011 $558,240,833 As Trustee The Bank of New York, Bond 5.65% Due 2017 $554,796,498 As Trustee The Bank of New York, Bond 5.20% Due 2010 $512,855,556 As Trustee The Bank of New York, Bond 4.13% Due 2009 $510,197,917 As Trustee The Bank of New York, Bond 5.15% Due 2017 $510,018,361 As Trustee The Bank of New York, Bond 5.38% Due 2010 $502,558,669 As Trustee The Bank of New York, Bond 5.40% Due 2013 $487,432,480 As Trustee The Bank of New York, Bond 5.40% Due 2012 $485,611,953 As Trustee The Bank of New York, Bond 1.31% Due 2010 $474,905,979 As Trustee The Bank of New York, Bond 5.85% Due 2016 $394,459,709 As Trustee Computershare Trust Co. Bond 4.72% Due 2011 $373,709,471 of Canada, as Trustee The Bank of New York, Bond 5.80% Due 2036 $317,542,406 As Trustee The Bank of New York, Bond 6.00% Due 2036 $310,566,105 As Trustee The Bank of New York, Bond 6.88% Due 2009 $310,312,500 As Trustee Citibank China Facility Guarantee $295,016,602 Due 2010 The Bank of New York, Bond 1.01% Due 2012 $290,928,481 As Trustee The Bank of New York, Bond 1.32% Due 2011 $280,245,695 As Trustee Australian Sr. Unsecured Guarantee $272,161,338 Notes The Bank of New York Bond 7.75% Due 2012 $261,266,984 As Trustee Mizuho Corporate Bank, NY, Bond 0.90% Due 2010 $223,164,091 As Trustee The Bank of New York Bond 2.83% Due 2036 $222,686,764 As Trustee The Bank of New York Bond 7.75% Due 2015 $203,028,312 As Trustee The Bank of New York Bond 0.77% Due 2010 $150,073,024 As Trustee The Bank of New York Bond 1.55% Due 2011 $115,119,454 As Trustee The Bank of New York Bond 0.85% Due 2009 $113,066,780 As Trustee Mizuho Corporate Bank, Bond 1.42% Due 2011 $100,043,399 Ltd., as Trustee Paying Agency Mandate Bond 0.49% Due 2010 $97,541,455 The Bank of New York, as Bond 1.48% Due 2011 $65,731,240 Trustee The Bank of New York, as Bond 0.57% Due 2017 $50,008,014 Trustee Paying Agency Mandate Bond 2.75% Due 2010 $49,631,218 The Bank of New York, as Bond 0.92% Due 2016 $34,463,483 Trustee JPMorgan Chase Bank, N.A Derivative Mark to $7,574,178 Market Balance as of 10/22/09 The Bank of New York Guarantee $5,000,000 The Bank of New York Guarantee $5,000,000 Mellon Banco De Credito Facility Guarantee $2,504,092 Jeffrey D. Simon Unpaid Severance $7,764,750 Bancolumbia Facility Guarantee $1,268,379 Sun Life Guarantee $1,233,757 Mindtree Consulting Ltd. Vendor $1,100,000 Lawrence A. Marsiello Unpaid Severance $976,560 Mercer Human Resource Vendor $600,000 Consulting Inc. Markit WSO Corporation Vendor $600,000 Timothy Bennet Unpaid Severance $443,750 Buck Consultants Vendor $400,000 Adecci USA Inc. Vendor $400,000 Prudential Insurance of Vendor $265,000 America --------------- TOTAL $45,311,594,912 List of Holders of Stock in Excess of 5% as of Feb. 15, 2009: Entity Stake ------ ----- FMR LLC 9.90% Brandes Investment Partners LP 9.70% Franklin Mutual Advisors LLC 5.70% The petition was signed by Robert J. Ingato, executive vice president and general counsel. CITIZENS NATIONAL BANK: Closed; U.S. Bank Assumes All Deposits -------------------------------------------------------------- The Federal Deposit Insurance Corporation entered into a purchase and assumption agreement with U.S. Bank, NA, of Minneapolis, Minnesota, a wholly-owned subsidiary of U.S. Bancorp, to assume all of the deposits and essentially all of the assets of nine failed banks. The nine banks were closed October 30 by federal and state bank regulators, which appointed the FDIC as receiver. The nine banks involved in the transaction are: Bank USA, National Association, Phoenix, Arizona; California National Bank, Los Angeles, California; San Diego National Bank, San Diego, California; Pacific National Bank, San Francisco, California; Park National Bank, Chicago, Illinois; Community Bank of Lemont, Lemont, Illinois; North Houston Bank, Houston, Texas; Madisonville State Bank, Madisonville, Texas; and Citizens National Bank, Teague, Texas. As of September 30, 2009, the banks had combined assets of $19.4 billion and deposits of $15.4 billion. The nine banks had 153 offices, which will reopen as branches of U.S. Bank beginning tomorrow during their normal business hours. Depositors of the nine banks will automatically become depositors of U.S. Bank. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship to retain their deposit insurance coverage. Customers should continue to use their existing branches until U.S. Bank can fully integrate the deposit records of the nine failed banks. The FDIC and U.S. Bank entered into a loss-share transaction on approximately $14.4 billion of the combined purchased assets of $18.2 billion. U.S. Bank will share in the losses on the asset pools covered under the loss-share agreement. The loss-sharing arrangement is projected to maximize returns on the assets covered by keeping them in the private sector. The agreement also is expected to minimize disruptions for loan customers. For more information on loss share, please visit: http://www.fdic.gov/bank/individual/failed/lossshare/index.html Customers who have questions about the transaction can contact the FDIC as follows: Failed Bank (a) Bank USA, National Association 1-800-913-3062 http://www.fdic.gov/bank/individual/failed/bankusa-az.html (b) California National Bank 1-800-913-5861 http://www.fdic.gov/bank/individual/failed/calnational.html (c) San Diego National Bank 1-800-517-1839 http://www.fdic.gov/bank/individual/failed/sandiegonational.html (d) Pacific National Bank 1-800-508-8289 http://www.fdic.gov/bank/individual/failed/pacificnational-ca.html (e) Park National Bank 1-800-450-5668 http://www.fdic.gov/bank/individual/failed/park-il.html (f) Community Bank of Lemont 1-800-528-6357 http://www.fdic.gov/bank/individual/failed/community-lemont.html (g) North Houston Bank 1-800-501-1872 http://www.fdic.gov/bank/individual/failed/northhouston-tx.html (h) Madisonville State Bank 1-800-913-3053 http://www.fdic.gov/bank/individual/failed/madisonville-tx.html (i) Citizens National Bank 1-800-517-1843 http://www.fdic.gov/bank/individual/failed/citizens-teague.html The nine banks were subsidiaries of FBOP Corporation, Oak Park, Illinois. FBOP Corporation was not closed and was not subject to the October 30 actions. FBOP is run by Michael Kelly, who from his base in the Chicago suburbs snapped up banks in San Diego, Los Angeles, Houston, and San Francisco. He started in 1990 with First Bank of Oak Park, which had $125 million in assets. The FDIC's Board of Directors issued notices of assessment of cross guaranty liability against Park National Bank and Citizens National Bank. Under statutory authority, the FDIC may assess affiliated banks for losses incurred by the Deposit Insurance Fund (DIF) from the failure of other banks, such as those owned by FBOP Corporation. Congress granted the FDIC authority in 1989 to reduce the cost to the DIF for the resolution of affiliated institutions owned by the same company. The two banks were unable to pay the amounts assessed and were closed by their chartering authorities. The FDIC estimates that the cost of the nine banks to the DIF will be a combined $2.5 billion. U.S. Bank's acquisition of all the deposits was the "least costly" resolution for the FDIC's DIF compared to alternatives. The failure of the nine banks brings the nation's total number this year to 115. By number, banks in Georgia account for one-fifth of all U.S. banks closing this year, with 20 failures, followed by Illinois with 19, California with 13, and Florida with nine. CITY OF PRICHARD: Robert Hedge to Seek Explanations on Fin'l State ------------------------------------------------------------------ Steve Alexander at WKRG reports that Robert Hedge, the attorney for a group of retired Prichard city workers, said that he will be filing a court motion to get some answers about the city's financial situation. According to WKRG, Mr. Hedge believes that Prichard city officials may have money to pay retired workers who didn't get their pension checks this month, as a copy of the city budget shows a budget reserve of almost $700,000. The city of Prichard, Alabama, a suburb of Mobile, filed for municipal reorganization for a second time in eight years. The Chapter 9 petition filed Oct. 27 in Mobile says that assets and debt both exceed $10 million. CITY OF PRICHARD: Voluntary Chapter 9 Case Summary -------------------------------------------------- Debtor: City of Prichard, Alabama c/o R. Scott Williams Haskell Slaughter Young & Rediker, LLC 2001 Park Place North 1400 Park Place Tower Birmingham,, AL 35203 Tel: (205) 251-1000 Bankruptcy Case No.: 09-15000 Chapter 11 Petition Date: October 27, 2009 Court: Southern District of Alabama (Mobile) Debtor's Counsel: R. Scott Williams, Esq. Haskell Slauther Young & Rediker LLC 2001 Parkplace North 1400 Parkplace Tower Birmingham, AL 35203 Tel: (205) 251-1000 Email: rsw@hsy.com Estimated Assets: $10 million and $50 million Estimated Debts: $10 million and $50 million The Debtor has yet to file a list of 20 largest unsecured creditors. The petition was signed by Mayor Ron Davis. COMDISCO HOLDINGS: Litigation Against Former Officers Dimissed -------------------------------------------------------------- Comdisco Holding Company, Inc. disclosed that the pending litigation against certain of the former directors and officers of Comdisco, Inc., Collins et. al. v. Pontikes et. al., Case no. 2006 L 1006 in the Circuit Court of Cook County, Illinois, was voluntarily dismissed with prejudice by the judge on October 28, 2009 pursuant to a Stipulation and Agreed Order of Voluntary Dismissal With Prejudice. The litigation was reported in Comdisco's Form 10-Q and Form 10-K filings as the "SIP Joinder Action". The nominal settlement amount was paid by the former Comdisco, Inc.'s directors and officers insurance policy coverage. Comdisco emerged from Chapter 11 bankruptcy proceedings on August 12, 2002. The purpose of reorganized Comdisco is to sell, collect or otherwise reduce to money in an orderly manner the remaining assets of the corporation. Pursuant to Comdisco's plan of reorganization and restrictions contained in its certificate of incorporation, Comdisco is specifically prohibited from engaging in any business activities inconsistent with its limited business purpose. Accordingly, within the next few years, it is anticipated that Comdisco will have reduced all of its assets to cash and made distributions of all available cash to holders of its common stock and contingent distribution rights in the manner and priorities set forth in the Plan. At that point, the company will cease operations. The company filed on August 12, 2004 a Certificate of Dissolution with the Secretary of State of the State of Delaware to formally extinguish Comdisco Holding Company, Inc.'s corporate existence with the State of Delaware except for the purpose of completing the wind-down contemplated by the Plan. COMMSCOPE INC: Bank Debt Trades at 3.55% Off in Secondary Market ---------------------------------------------------------------- Participations in a syndicated loan under which CommScope, Inc., is a borrower traded in the secondary market at 96.45 cents-on- the-dollar during the week ended Oct. 30, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents a drop of 0.95 percentage points from the previous week, The Journal relates. The loan matures on Nov. 6, 2014. The Company pays 250 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's Ba2 rating and Standard & Poor's BB rating. The debt is one of the biggest gainers and losers among widely quoted syndicated loans in secondary trading in the week ended Oct. 30, among the 161 loans with five or more bids. As reported by the Troubled Company Reporter on June 19, 2009, Moody's changed CommScope, Inc.'s outlook to stable from negative following completion of the company's recent capital market transactions. Moody's concurrently affirmed the Ba3 corporate family and probability of default ratings and revised the senior secured debt ratings to Ba2 from Ba3 as a result of the material change in capital structure. The change includes issuance of new common equity and new convertible notes (unrated), induced conversion of existing convertible notes, loosening of financial covenants and the pay down of about $400 million of senior secured debt. Post this activity, CommScope's leverage (Moody's adjusted and pro forma as of the quarter ended March 31, 2009) is approximately 3.1x, though likely to rise in subsequent quarters. CommScope continues to face a challenging macroeconomic environment and revenue and EBITDA are expected to remain below prior year levels through 2009. However, the capital structure improvements, alleviation of near term covenant tightness and the company's ongoing cost reductions remove some of the primary pressures that led to the negative outlook. On May 22, 2009, the TCR stated that Standard & Poor's affirmed its ratings on CommScope, Inc., including the 'BB- 'corporate credit rating. S&P removed the ratings from CreditWatch, where they had been placed with negative implications on March 5, 2009. Debt outstanding at March 31, 2009, totaled about $1.8 billion. The outlook is stable. At the same time, S&P raised its issue-level ratings on CommScope's $2.5 billion senior secured credit facility and revised the recovery rating to '2' from '3'. The '2' recovery rating indicates expectations for substantial (70%-90%) recovery in the event of a payment default. The revised recovery rating reflects the prepayment of approximately more than $800 million of first-lien term loan debt over the past year, which reduces total outstanding debt in S&P's projected year of default. S&P also assigned a 'B' rating and a '6' recovery rating to $200 million of senior subordinated convertible notes due 2015. The '6' recovery rating indicates S&P's expectation for negligible (0%-10%) recovery in the event of a payment default. Proceeds from the notes, along with approximately $200 million of additional proceeds from a proposed equity offering, will be used to repay $400 million of senior secured term loan borrowings. "The affirmation reflects our expectation that CommScope's recent amendment of its senior secured credit facility's financial maintenance covenants," said Standard & Poor's credit analyst Susan Madison, "coupled with debt paydown, provides sufficient covenant headroom to withstand a challenging operating environment over the next year." CommScope, Inc., headquartered in Hickory, North Carolina, is a leading global provider of wired and wireless connectivity solutions targeted towards cable and telecom service providers as well as the enterprise market. COMMUNICATION INTELLIGENCE: Posts $2,575,000 Loss in Third Quarter ------------------------------------------------------------------ Communication Intelligence Corporation reported a net loss of $2,575,000 on total revenues of $877,000 for the three months ended September 30, 2009, compared with a net loss of $776,000 on total revenues of $721,000 in the same period in the prior year. The operating loss for the three months ended September 30, 2009, before interest expense and amortization of the loan discount and deferred financing cost, was $365,000 compared to $487,000 in the prior year, a decrease of 25%. Non-operating expense for the three months ended September 30, 2009, was $2,210,000 an increase of $1,921,000 compared to $289,000 for the corresponding prior year period. This increase is primarily attributable to non-cash loan amortization and deferred financing cost associated with the warrants issued in May 2009, and a $1,529,000 loss related to the derivative liability due to an increase in the market price of the Company's common shares from June 30, 2009, through September 30, 2009. For the nine months ended September 30, 2009, the Company had a net loss of $6,678,000 on total revenues of $1,527,000, compared with a net loss of $3,090,000 on total revenues of $1,558,000 in the corresponding period last year. At September 30, 2009, the Company's consolidated balance sheet showed $6,109,000 in total assets and $10,280,000 in total liabilities, resulting in a $4,171,000 stockholders' deficit. The Company's consolidated balance sheets at September 30, 2009, also showed strained liquidity with $1,367,000 in total current assets available to pay $1,454,000 in total current liabilities. A full-text copy of the Company's consolidated financial statements for the three and nine months ended September 30, 2009, is available for free at http://researcharchives.com/t/s?47df Going Concern Doubt On March 10, 2009, GHP Horwath, P.C., in Denver, Colorado, expressed substantial doubt about Communication Intelligence Corporation'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. GHP Horwath pointed to the Company's significant recurring operating losses and accumulated deficit. At September 30, 2009, the Company's accumulated deficit was approximately $99,090,000. At September 30, 2009, the Company had a working capital deficit of $87,000, including cash and cash equivalents of $631,000. About Communication Intelligence Based in Redwood Shores, Calif., Communication Intelligence Corporation (OTC BB: CICI) -- http://www.cic.com/-- develops and markets electronic signature solutions for business process automation and biometric signature verification. COMMUNITY BANK OF LEMONT: Closed; U.S. Bank Assumes All Deposits ---------------------------------------------------------------- The Federal Deposit Insurance Corporation entered into a purchase and assumption agreement with U.S. Bank, NA, of Minneapolis, Minnesota, a wholly-owned subsidiary of U.S. Bancorp, to assume all of the deposits and essentially all of the assets of nine failed banks. The nine banks were closed October 30 by federal and state bank regulators, which appointed the FDIC as receiver. The nine banks involved in the transaction are: Bank USA, National Association, Phoenix, Arizona; California National Bank, Los Angeles, California; San Diego National Bank, San Diego, California; Pacific National Bank, San Francisco, California; Park National Bank, Chicago, Illinois; Community Bank of Lemont, Lemont, Illinois; North Houston Bank, Houston, Texas; Madisonville State Bank, Madisonville, Texas; and Citizens National Bank, Teague, Texas. As of September 30, 2009, the banks had combined assets of $19.4 billion and deposits of $15.4 billion. The nine banks had 153 offices, which will reopen as branches of U.S. Bank beginning tomorrow during their normal business hours. Depositors of the nine banks will automatically become depositors of U.S. Bank. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship to retain their deposit insurance coverage. Customers should continue to use their existing branches until U.S. Bank can fully integrate the deposit records of the nine failed banks. The FDIC and U.S. Bank entered into a loss-share transaction on approximately $14.4 billion of the combined purchased assets of $18.2 billion. U.S. Bank will share in the losses on the asset pools covered under the loss-share agreement. The loss-sharing arrangement is projected to maximize returns on the assets covered by keeping them in the private sector. The agreement also is expected to minimize disruptions for loan customers. For more information on loss share, please visit: http://www.fdic.gov/bank/individual/failed/lossshare/index.html Customers who have questions about the transaction can contact the FDIC as follows: Failed Bank (a) Bank USA, National Association 1-800-913-3062 http://www.fdic.gov/bank/individual/failed/bankusa-az.html (b) California National Bank 1-800-913-5861 http://www.fdic.gov/bank/individual/failed/calnational.html (c) San Diego National Bank 1-800-517-1839 http://www.fdic.gov/bank/individual/failed/sandiegonational.html (d) Pacific National Bank 1-800-508-8289 http://www.fdic.gov/bank/individual/failed/pacificnational-ca.html (e) Park National Bank 1-800-450-5668 http://www.fdic.gov/bank/individual/failed/park-il.html (f) Community Bank of Lemont 1-800-528-6357 http://www.fdic.gov/bank/individual/failed/community-lemont.html (g) North Houston Bank 1-800-501-1872 http://www.fdic.gov/bank/individual/failed/northhouston-tx.html (h) Madisonville State Bank 1-800-913-3053 http://www.fdic.gov/bank/individual/failed/madisonville-tx.html (i) Citizens National Bank 1-800-517-1843 http://www.fdic.gov/bank/individual/failed/citizens-teague.html The nine banks were subsidiaries of FBOP Corporation, Oak Park, Illinois. FBOP Corporation was not closed and was not subject to the October 30 actions. FBOP is run by Michael Kelly, who from his base in the Chicago suburbs snapped up banks in San Diego, Los Angeles, Houston, and San Francisco. He started in 1990 with First Bank of Oak Park, which had $125 million in assets. The FDIC's Board of Directors issued notices of assessment of cross guaranty liability against Park National Bank and Citizens National Bank. Under statutory authority, the FDIC may assess affiliated banks for losses incurred by the Deposit Insurance Fund (DIF) from the failure of other banks, such as those owned by FBOP Corporation. Congress granted the FDIC authority in 1989 to reduce the cost to the DIF for the resolution of affiliated institutions owned by the same company. The two banks were unable to pay the amounts assessed and were closed by their chartering authorities. The FDIC estimates that the cost of the nine banks to the DIF will be a combined $2.5 billion. U.S. Bank's acquisition of all the deposits was the "least costly" resolution for the FDIC's DIF compared to alternatives. The failure of the nine banks brings the nation's total number this year to 115. By number, banks in Georgia account for one-fifth of all U.S. banks closing this year, with 20 failures, followed by Illinois with 19, California with 13, and Florida with nine. COMPETITIVE TECHNOLOGIES: MHM Mahoney Raises Going Concern Doubt ---------------------------------------------------------------- MHM Mahoney Cohen CPAs, in New York, N.Y., expressed substantial doubt about Competitive Technologies, Inc.'s ability to continue as a going concern after auditing the Company's consolidated financial statements as of and for the year July 31, 2009. The auditors pointed to the Company's operating losses since fiscal year 2006. At current reduced spending levels, the Company says it may not have sufficient cash flow to fund operating expenses beyond the second quarter of fiscal 2010. The Company reported a net loss of $3,479,824 on revenues of $348,240 for the year ended July 31, 2009, compared with a net loss of $5,966,454 on revenues of $1,193,353 for the previous fiscal year. Included in revenues for 2009 is other income of $71,000 which was primarily the proceeds on the sale of the Company's flip chip patent. Retained royalties for 2009 were $261,000, which was $712,000, or 73% lower than the $973,000 reported in 2008. The main patent for the Company's homocysteine assay expired in July 2007. Revenue in 2008 was primarily from unreported back royalties. The Company says it will not receive significant revenue from this technology in the future. Personnel and other direct expenses relating to revenues decreased a net $1,178,000 or 37% in 2009, compared to 2008. General and administrative expenses decreased a net $1,364,000 or 38% in 2009, compared to 2008. 2009 results include a $400,000 insurance recovery in settlement of the Company's action against Federal Insurance to cover legal fees and loss associated with the case involving Ben Marcovitch and other co-defendents. At July 31, 2009, the Company's consolidated balance sheets showed $1,401,491 in total assets, $1,116,323 in total liabilities, and $285,168 in total shareholders' interest. A full-text copy of the Company's consolidated financial statements for the year ended July 31, 2009, is available for free at http://researcharchives.com/t/s?47d4 At July 31, 2009, the Company had no outstanding debt, and no credit facility. Based in Fairfield, Connecticut, Competitive Technologies Inc. (AMEX: CTT) -- http://www.competitivetech.net/-- provides distribution, patent and technology transfer, sales and licensing services focused on the needs of its customers and matching those requirements with commercially viable product or technology solutions. The Company earns revenue in two ways, from licensing clients' and the Company's own technologies to the Company's customer licensees, and in a business model that allows the Company to share in the profits of distribution of finished products. CONMED CORPORATION: Moody's Affirms 'Ba3' Corporate Family Rating ----------------------------------------------------------------- Moody's Investors Service affirmed the ratings of CONMED Corporation, including the Ba3 Corporate Family Rating and Ba3 Probability of Default Rating. The outlook remains stable. CONMED's financial performance over the past twelve months has been negatively impacted by the weak economy, on-going restructuring costs and foreign currency fluctuations. As a result, several key credit metrics, including adjusted free cash flow to debt, are currently weak for the Ba rating category. However, the company's stable outlook is supported by Moody's expectation that financial performance will improve appreciably over the next 12-18 months. Specifically, the stable outlook incorporates the expectation that cash flow generation will improve in the near-term, with trailing twelve month adjusted free cash flow to debt improving to at least 10% by early 2010. The Ba3 Corporate Family Rating is supported by the diversity of CONMED's product offering and the recurring nature of a large portion of total revenues. Further, despite the recent decline in earnings, the company's financial leverage and interest coverage remain appropriate for the rating category and the liquidity profile is good. Constraining the rating is CONMED's small absolute size and the competitive nature of its markets, in which it competes against significantly larger companies. Ratings Affirmed/LGD Assessments Revised: * $100 million Senior Secured Revolver, due 2011, to Ba1, LGD2, 27%, from Ba1, LGD2, 26% * $135 million (face value) Senior Secured Term Loan B, due 2013, to Ba1, LGD2, 27%, from Ba1, LGD2, 26% * $150 million (face value) senior subordinated convertible notes, due 2024, B1, LGD5, 81% * Corporate Family Rating, at Ba3 * Probability of Default Rating, Ba3 The outlook is stable. The last rating action was on November 28, 2007, when the outlook was changed to stable from negative. CONMED, headquartered in Utica, New York is a medical products manufacturer with a focus on surgical devices and equipment for minimally invasive procedures and monitoring. The company conducts business through five operating units, Linvatec (includes Arthroscopy and Powered surgical instruments), Electrosurgery, Endosurgery, Endoscopic technologies and Patient Care. Revenues for the twelve months ended September 30, 2009, approximated $683 million. CONSTELLATION BRANDS: Debt Trades at 4% Off in Secondary Market --------------------------------------------------------------- Participations in a syndicated loan under which Constellation Brands, Inc., is a borrower traded in the secondary market at 95.97 cents-on-the-dollar during the week ended Oct. 30, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents a drop of 0.98 percentage points from the previous week, The Journal relates. The loan matures on May 11, 2013. The Company pays 150 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's Ba3 rating and Standard & Poor's BB rating. The debt is one of the biggest gainers and losers among widely quoted syndicated loans in secondary trading in the week ended Oct. 30, among the 161 loans with five or more bids. Headquartered in Fairport, New York, Constellation Brands, Inc. (NYSE:STZ) -- http://www.cbrands.com/-- has more than 250 brands in its portfolio, sales in approximately 150 countries and operates approximately 60 wineries, distilleries and distribution facilities. The company has market presence in the U.K., Australia, Canada, New Zealand, and Mexico. Barton Brands Ltd. is the spirits division of Constellation Brands, Inc., is a producer, importer and exporter of a wide range of spirits products, including brands such as Black Velvet Canadian Whisky, Ridgemont Reserve 1792 bourbon, and Effen vodka. As reported by the TCR on May 8, 2009, Fitch Ratings has affirmed its 'BB-' issuer rating on Constellation Brands and revised the Rating Outlook to Stable from Negative. CONSULIER ENGINEERING: To Voluntary Delist Shares from Nasdaq ------------------------------------------------------------- Consulier Engineering, Inc. on October 29 disclosed that it has given formal notice to the Nasdaq Stock Market of the Company's intention to voluntarily delist its common stock from the Nasdaq Capital Market. The Company also announced that it plans to deregister its common stock under Section 12(b) of the Securities Exchange Act of 1934, as amended. The Company currently anticipates that it will file with the Securities and Exchange Commission and Nasdaq a Form 25 relating to the deregistration of its common stock on or about October 28, 2009, with the delisting of its common stock taking effect no earlier than ten (10) days thereafter. As a result, the Company expects that the last day of trading of its common stock on the Nasdaq Capital Market will be on or about November 6, 2009. The decision to delist has been reached as part of the Company's ongoing strategy of maximizing shareholder value as the direct accounting costs of maintaining a Nasdaq listing now outweigh the benefits. The Company has therefore concluded that a listing on Nasdaq does not justify the expense and administrative burden associated with maintaining such listing. In connection with its Nasdaq delisting, the Company will file a Form 15 with the SEC pursuant to which it will terminate the registration of its common stock and redeemable common stock purchase warrants under Section 12(g) of the Exchange Act. The Company expects that after the filing of Form 15 its common stock will continue to be traded on the pink sheets. The Company's warrants are not traded. About Consulier Engineering, Inc. Consulier Engineering, Inc. and its subsidiaries - http://www.consulier.com/-- are engaged in medical software activities, investment activities, and the distribution of Captain Cra-Z Soap(TM). COTT CORP: Moody's Assigns 'Caa1' Rating on $200 Mil. Notes ----------------------------------------------------------- Moody's Investors Service assigned a Caa1 rating to Cott Corporation's subsidiary, Cott Beverages, Inc.'s proposed $200 million senior unsecured notes due 2017. Concurrently, the company's existing ratings and stable outlook were affirmed. The net proceeds from new notes will be used to redeem Cott's existing 8% senior subordinated notes due 2011. The affirmation of Cott's ratings reflects its significant market position as world's largest retailer brand soft drink provider, strong cash flow generation, and improved debt maturity profile. At the same time, the ratings are constrained by the uncertainty on its future revenue growth due to potential volume loss from Wal-Mart and the weakening of CSD market in North America. In Moody's opinion, the proposed notes offering improves Cott's liquidity profile by 1) elimination of refinancing risk associated with the 8% senior subordinated notes, and 2) extension of the expiration of Cott's ABL facility. The ABL facility is a five- year revolving facility that expires on March 2013 but is subject to refinancing of the existing senior subordinated notes. The revolving facility will mature early unless the company can retire or refinance subordinated notes six months prior to their maturity (June 15, 2011). The stable outlook reflects Cott's acceptable level of financial flexibility in the event of unfavorable economics and/or operating pressures, and tolerance for modest adverse fluctuations in credit metrics before triggering a negative rating action. Specifically, modest weakening of operating performance and credit metrics would likely be acceptable at current rating levels. However, any erosion in margins and overall profitability either due to significant loss of volume that could not be replaced quickly and/or inability to manage commodity price volatility and deterioration in liquidity could warrant a negative rating action. Moody's will withdraw ratings on the existing 8% senior subordinated notes due 2011 after the close of transaction, assuming that substantially all of the notes are redeemed. The ratings are subject to Moody's review of final documentation and the conclusion of transaction. This rating was assigned: Cott Beverages, Inc. * Proposed $200 million senior unsecured notes due 2017 at Caa1 (LGD 5, 76%) These ratings were affirmed: Cott Corporation * Corporate Family rating at B3 * Probability of Default rating at B3 * Speculative Grade Liquidity at SGL-3 Cott Beverages, Inc. * Existing 8% senior subordinated notes, due 2011, at Caa1 (LGD 5; 76%) * Rating Outlook: stable The last rating action occurred on September 3, 2009 when Cott's Corporate Family Rating and Probability of Default rating were upgraded to B3 from Caa1. Headquartered in Toronto, Ontario and Tampa, Florida, Cott Corporation is one of the world's largest retailer-brand soft drink suppliers with a leading position in take-home carbonated soft drink markets in the US, Canada, and the UK. Sales for the trailing twelve month period were approximately $1.6 billion. COTT CORP: S&P Raises Corporate Credit Rating to 'B' ---------------------------------------------------- Standard & Poor's Ratings Services said it raised its ratings on Mississauga, Ontario-based Cott Corp., including its long-term corporate credit rating to 'B' from 'B-'. The outlook is stable. At the same time, Standard & Poor's assigned its 'B' issue-level rating (the same as the corporate credit rating on Cott) to the company's wholly owned U.S. subsidiary Cott Beverages Inc.'s proposed US$200 million senior unsecured notes due 2017. S&P also assigned a '4' recovery rating to the notes, indicating S&P's expectation of an average (30%-50%) recovery in the event of a payment default. Cott will use the proceeds to repay the remaining balance outstanding on its US$275 million senior subordinated notes due 2011. "The upgrade reflects what S&P view as the continued improvement in Cott's financial risk profile stemming from increased profitability and financial flexibility due to management's focus on streamlining the business and cutting costs," said Standard & Poor's credit analyst Donald Marleau. Despite a 3.7% revenue decline in the third quarter ended Sept. 26, 2009, compared with the same period in 2008, Cott's operating profit (before depreciation and amortization, and nonrecurring items) increased 70.5% in this quarter. Furthermore, the company's availability under its asset-based lending facility has increased materially from earlier in the year, eliminating any financial covenant concerns at this time. The ratings on Cott reflect what Standard & Poor's considers the company's vulnerable business risk profile stemming from a narrow product portfolio, customer concentration, and small size in a sector dominated by companies with substantially greater financial resources and market presence. Furthermore, Cott's improved financial performance might not be sustainable as it depends on the competitive actions of larger players, among other things. In addition, a significant reduction in business with its key customer Wal-Mart Stores Inc. (AA/Stable/A-1+) could result in a material weakening of credit protection measures. S&P believes these factors are partially offset by Cott's improved operating performance and financial flexibility, as well as its market position as the leading private label manufacturer and marketer of take-home carbonated soft drinks in the U.S., the U.K., and Canada. The stable outlook reflects Standard & Poor's expectation that Cott will sustain the improvement in its operating performance, credit ratios, and financial flexibility in the medium term. S&P could consider raising the ratings if Cott is able to demonstrate continued strengthening of its operating performance despite the potential for increased competitive activity or a decline in its business with Wal-Mart. Alternatively, S&P could consider lowering the ratings if the company's operating performance falls below S&P's expectations or if Cott's financial flexibility weakens. COYOTES HOCKEY: Toronto Argonaut Owners May Bid for Hockey Team --------------------------------------------------------------- Paul Waldie and Stephen Brunt at The Globe and Mail reports that Toronto Argonaut co-owners Howard Sokolowski and David Cynamon are considering bidding for Phoenix Coyotes and will be meeting officials from the City of Glendale this week. According to The Globe and Mail, people familiar with the matter said that Messrs. Sokolowski and Cynamon had been linked to Ice Edge Holdings until their involvement with the company ended several weeks ago and are now exploring their own options for Phoenix Coyotes. Messrs. Sokilowski and Cynamon have assembled about a dozen financial backers, the report states, citing the sources. As reported by the TCR on Oct. 29, Jerry Moyes, the owner of the Phoenix Coyotes of the National Hockey League, reached an agreement to sell the team to the NHL. The parties reached a deal at a status hearing on the case on October 26. Former coach Wayne Gretzky, who has a US$22.5 million claim in the case, has not agreed to the deal. Under the agreement, secured creditor SOF Investment will be paid for its $80 million that and the NHL would get the $37 million it is owed for funding the team since last fall. Between $9 million and $11 million would be available to be divided between Messrs. Moyes and Gretzky. The agreement and sale are scheduled for hearing November 2. Dewey Ranch Hockey LLC, Arena Management Group, LLC, Coyotes Holdings, LLC, and Coyotes Hockey, LLC -- owners and affiliates of the Phoenix Coyotes National Hockey League team -- filed for Chapter 11 protection (Bankr. D. Ariz. Case No. 09-09488) on May 5, 2009. The Debtors are represented by Thomas J. Salerno, Esq., at Squire, Sanders & Dempsey, LLP, in Phoenix, and estimate their assets and liabilities are between $100 million and $500 million. DANA HOLDING: Bank Debt Trades at 12.07% Off in Secondary Market ---------------------------------------------------------- Participations in a syndicated loan under which Dana Holding Corporation is a borrower traded in the secondary market at 87.93 cents-on-the-dollar during the week ended Oct. 30, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents a drop of 1.57 percentage points from the previous week, The Journal relates. The loan matures on Jan. 31, 2015. The Company pays 375 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's Caa1 rating and Standard & Poor's B rating. The debt is one of the biggest gainers and losers among widely quoted syndicated loans in secondary trading in the week ended Oct. 30, among the 161 loans with five or more bids. Based in Toledo, Ohio, Dana Holding Corporation -- http://www.dana.com/-- designs and manufactures products for every major vehicle producer in the world, and supplies drivetrain, chassis, structural, and engine technologies to those companies. Dana employs 46,000 people in 28 countries. Dana is focused on being an essential partner to automotive, commercial, and off-highway vehicle customers, which collectively produce more than 60 million vehicles annually. Dana has facilities in China in the Asia-Pacific, Argentina in the Latin-American regions and Italy in Europe. Dana Corp., together with affiliates, affiliates filed for Chapter 11 protection on March 3, 2006 (Bankr. S.D.N.Y. Case No. 06- 10354). Attorneys at Jones Day represented the Debtors. It emerged from bankruptcy Jan. 31, 2008, and the reorganized entity was named Dana Holding Corporation. As reported in the Troubled Company Reporter on June 9, 2009, Moody's Investors Service lowered the Corporate Family Rating of Dana Holding Corporation to 'Caa2', raised the Probability of Default Rating to 'Caa1', and adjusted the ratings of certain debt instruments. According to Moody's, the positioning of Dana's PDR at 'Caa1' reflects ongoing pressures the company faces from the continued erosion in the global automotive and commercial vehicle markets. DELPHI CORP: Worker Protests Pension Loss Before Senate ------------------------------------------------------- Law360 reports that a former salaried employee at Delphi Corp. told a U.S. Senate panel Thursday that the slashing of thousands of retirees' pensions through the company's bankruptcy process was at best unfair and at worst a violation of federal law. Based in Troy, Michigan, Delphi Corporation (PINKSHEETS: DPHIQ) -- http://www.delphi.com/-- was a global supplier of mobile electronics and transportation systems, including powertrain, safety, steering, thermal, and controls & security systems, electrical/electronic architecture, and in-car entertainment technologies. Delphi had approximately 146,600 employees and operates 150 wholly owned manufacturing sites in 34 countries with sales of $18.1 billion in 2008. The Company filed for Chapter 11 protection on October 8, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP, represent the Official Committee of Unsecured Creditors. As of June 30, 2008, the Debtors' balance sheet showed US$9,162,000,000 in total assets and US$23,742,000,000 in total debts. The Court confirmed Delphi's plan on January 25, 2008. The Plan was not consummated after a group led by Appaloosa Management, L.P., backed out from their proposal to provide US$2,550,000,000 in equity financing to Delphi. At the end of July 2009, Delphi obtained confirmation of a revised plan, build upon a sale of the assets to a entity formed by some of the lenders who provided $4 billion of debtor-in-possession financing, and General Motors Company. On October 6, 2009, Delphi Corp.'s Chapter 11 plan of reorganization became effective. A Master Disposition Agreement executed among Delphi Corporation, Motors Liquidation Company, General Motors Company, GM Components Holdings LLC, and DIP Holdco 3, LLC, divides Delphi's business among three separate parties -- DPH Holdings LLC, GM Components, and DIP Holdco 3. Bankruptcy Creditors' Service, Inc., publishes Delphi Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Delphi Corp. and its debtor-affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000) DELUXE ENTERTAINMENT: S&P Affirms 'B-' Corporate Credit Rating -------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its ratings on Hollywood, California-based Deluxe Entertainment Services Group Inc. The 'B-' corporate credit rating on the company, as well as all issue-level ratings on the company's debt, were removed from CreditWatch, where they were placed with positive implications Oct. 1, 2009. The rating outlook is stable. "The 'B-' rating reflects Deluxe's still-narrow headroom despite any potential amendment, considering progressively tightening financial covenants and the risk of widespread adoption by motion picture exhibitors of digital projection technology, particularly in North America," said Standard & Poor's credit analyst Tulip Lim. Other factors affecting the rating include Deluxe's dependence on a steady film release schedule by several large movie studios and an aggressive financial policy, which the company's debt-financed dividend in 2007 demonstrates. At June 30, 2009, the company's lease-adjusted leverage and unadjusted coverage was 4.6x and 2.9x, respectively. Leverage will not change materially with the amendment, but S&P estimates that pro forma unadjusted coverage was roughly 2.4x. At June 30, 2009, the company's conversion of EBITDA to discretionary cash flow was greater than 40%, and S&P expects that discretionary cash flow will be sufficient to cover high mandatory amortization for the year. DEX MEDIA EAST: Bank Debt Trades at 22% Off in Secondary Market --------------------------------------------------------------- Participations in a syndicated loan under which Dex Media East, LLC, is a borrower traded in the secondary market at 78.38 cents- on-the-dollar during the week ended Friday, Oct. 30, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 0.75 percentage points from the previous week, The Journal relates. The loan matures on Nov. 8, 2009. The Company pays 200 basis points above LIBOR to borrow under the facility. Moody's has withdrawn its rating on the bank debt while Standard & Poor's has assigned a default rating on the bank debt. The debt is one of the biggest gainers and losers among widely quoted syndicated loans in secondary trading in the week ended Oct. 30, among the 161 loans with five or more bids. Based in Cary, North Carolina, R.H. Donnelley Corp., fka The Dun & Bradstreet Corp. (NYSE: RHD) -- http://www.rhdonnelley.com/-- publishes and distributes print and online directories in the U.S. It offers print directory advertising products, such as yellow pages and white pages directories. R.H. Donnelley Inc., Dex Media, Inc. and Local Launch, Inc. are the company's only direct wholly owned subsidiaries. Dex Media East, LLC, is a publisher of the official yellow pages and white pages directories for Qwest Communications International Inc. (Qwest) in the states, where Qwest is the primary incumbent local exchange carrier, such as Colorado, Iowa, Minnesota, Nebraska, New Mexico, North Dakota and South Dakota. R.H. Donnelley Corp. and 19 of its affiliates, including Dex Media East LLC, Dex Media West LLC and Dex Media Inc., filed for Chapter 11 protection on May 28, 2009 (Bank. D. Del. Case No. 09-11833 through 09-11852), after missing a $55 million interest payment on its senior unsecured notes due April 15. James F. Conlan, Esq., Larry J. Nyhan, Esq., Jeffrey C. Steen, Esq., Jeffrey E. Bjork, Esq., and Peter K. Booth, Esq., at Sidley Austin LLP, in Chicago, Illinois represent the Debtors in their restructuring efforts. Edmon L. Morton, Esq., and Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor LLP, in Wilmington, Delaware, serve as the Debtors' local counsel. The Debtors' financial advisor is Deloitte Financial Advisory Services LLP while its investment banker is Lazard Freres & Co. LLC. The Garden City Group, Inc., is claims and noticing agent. As of March 31, 2009, the Company had $929,829,000 in total assets and $1,023,526,000 in total liabilities, resulting in $93,697,000 in total shareholders' deficit. Bankruptcy Creditors' Service, Inc., publishes R.H. Donnelley Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of R.H. Donnelley Corp. and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) DEX MEDIA WEST: Bank Debt Trades at 12.35% Off in Secondary Market ------------------------------------------------------------------ Participations in a syndicated loan under which Dex Media West is a borrower traded in the secondary market at 87.65 cents-on-the- dollar during the week ended Oct. 30, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 1.32 percentage points from the previous week, The Journal relates. The loan matures on Oct. 22, 2014. The Company pays 400 basis points above LIBOR to borrow under the facility. Moody's has withdrawn its rating on the bank debt while Standard & Poor's has assigned a default rating on the bank debt. The debt is one of the biggest gainers and losers among widely quoted syndicated loans in secondary trading in the week ended Oct. 30, among the 161 loans with five or more bids. Dex Media West LLC is a subsidiary of Dex Media West, Inc., and an indirect wholly owned subsidiary of Dex Media, Inc. Dex Media is a direct wholly owned subsidiary of R.H. Donnelley Corporation. Dex Media West is the exclusive publisher of the official yellow pages and white pages directories for Qwest Corporation, the local exchange carrier of Qwest Communications International Inc., in Arizona, Idaho, Montana, Oregon, Utah, Washington, and Wyoming. R.H. Donnelley Corp. and 19 of its affiliates, including Dex Media East LLC, Dex Media West LLC and Dex Media Inc., filed for Chapter 11 protection on May 28, 2009 (Bank. D. Del. Case No. 09-11833 through 09-11852), after missing a $55 million interest payment on its senior unsecured notes due April 15. James F. Conlan, Esq., Larry J. Nyhan, Esq., Jeffrey C. Steen, Esq., Jeffrey E. Bjork, Esq., and Peter K. Booth, Esq., at Sidley Austin LLP, in Chicago, Illinois represent the Debtors in their restructuring efforts. Edmon L. Morton, Esq., and Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor LLP, in Wilmington, Delaware, serve as the Debtors' local counsel. The Debtors' financial advisor is Deloitte Financial Advisory Services LLP while its investment banker is Lazard Freres & Co. LLC. The Garden City Group, Inc., is claims and noticing agent. As of March 31, 2009, the Company had $929,829,000 in total assets and $1,023,526,000 in total liabilities, resulting in $93,697,000 in total shareholders' deficit. Bankruptcy Creditors' Service, Inc., publishes R.H. Donnelley Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of R.H. Donnelley Corp. and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) DOLE FOOD: Moody's Gives Positive Outlook on 'B2' Corp. Rating -------------------------------------------------------------- Moody's changed the rating outlook on Dole Food's long-term ratings (CFR at B2) to positive from stable and upgraded the probability of default rating to B2 from B3. The company's other ratings were affirmed. Moody's said that the change in outlook and upgrade to the probability of default rating was prompted by i) the company's initial public offering which closed on October 28th and generated proceeds of approximately $446 million which are intended to repay debt; ii) the simplified ownership structure as a result of the internal restructuring transactions that took place concurrently with the IPO; iii) the extinguishment of the remaining balance on the DHM Holding's Hotel and Wellness Center debt due March 2010 and elimination of cross-default provision that existed between Dole's senior secured credit facilities and indebtedness of DHM Holdings; iv) an improving trend in Dole's operating results and cash flows v) a more manageable debt maturity schedule following the September refinancing of the bulk of the 2010 notes as well as the debt pay down from the IPO; and vi) a continued focus on monetizing non-core assets to further reduce leverage. The positive outlook reflects an improvement in credit protection measures and debt maturity schedule following debt pay down from the IPO proceeds, asset sales and cash flow from operations and Moody's expectation that Dole's operating performance will be sustained at current or stronger levels despite volatility inherent in agricultural product industry. It also assumes that Dole will continue to conservatively manage its balance sheet and liquidity, and will be able to further reduce leverage. Rating upgraded: * Probability of default rating to B2 from B3 Ratings affirmed: Dole Food Company, Inc.: * Corporate family rating at B2 * Senior secured term loan B at Ba2 (LGD2,22%) * Senior secured prefunded letter of credit facility, also available to Solvest, to Ba2 (LGD2,22%) * $349.9 million senior secured 3rd lien notes due 2014 at B2 (LGD4,57%) * $315 million senior secured 3rd lien Notes due 2016 at B2 (LGD4, 57%) * Senior unsecured notes at Caa1 (LGD5, 86%) Solvest Ltd. * Senior secured term loan C at Ba2 (LGD2,22%) Moody's most recent rating action for Dole on September 18, 2009, assigned a B2 rating to the proposed new 3rd lien notes due 2016, affirmed the B2 rating on the company's existing 3rd lien Notes. DOLLAR GENERAL: Bank Debt Trades at 4.15% Off in Secondary Market ----------------------------------------------------------------- Participations in a syndicated loan under which Dollar General Corp. is a borrower traded in the secondary market at 95.85 cents- on-the-dollar during the week ended Oct. 30, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents a drop of 0.59 percentage points from the previous week, The Journal relates. The loan matures on July 4, 2014. The Company pays 275 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's Ba3 rating and Standard & Poor's BB- rating. The debt is one of the biggest gainers and losers among widely quoted syndicated loans in secondary trading in the week ended Oct. 30, among the 161 loans with five or more bids. Dollar General Corp. -- http://www.dollargeneral.com/-- is a discount retailer of general merchandise at everyday low prices. Through its stores, the Company offers a focused assortment of basic consumable merchandise, including health and beauty aids, packaged food and refrigerated products, home cleaning supplies, housewares, stationery, seasonal goods, basic clothing and domestics. Dollar General stores serve primarily low-, middle-and fixed-income families. ENGEX INC: NYSE Amex Accepts Listing Compliance Plan ---------------------------------------------------- Engex, Inc. announced on August 7, 2009 that it had received notice from the NYSE Amex Staff indicating that the Company was below certain of the Exchange's continued listing standards. Specifically, the Company was not in compliance with Section 1003(a)(ii) of the Company Guide with stockholders' equity (as in net assets) of less than $4,000,000 and net losses in three of its four most recent fiscal years, Section 1003(a)(iii) of the Company Guide with stockholders' equity (as in net assets) of less than $6,000,000 and net losses in its five most recent fiscal years and Section 1003(b)(v)(A) of the Company Guide in that its total market value of publicly held shares and net assets are each less than $5,000,000 for more than 60 consecutive days. The Company was afforded the opportunity to submit a plan of compliance to the Exchange. On September 14, October 2, and October 9, 2009, the Company presented its plan to the Exchange. On October 23, 2009, the Exchange notified the Company that it accepted the Company's plan to regain compliance with Section 1003(b)(v)(A) of the Company Guide by February 8, 2010 and Sections 1003(a)(ii) and 1003 (a)(iii) of the Company Guide by February 7, 2011. The Company will be subject to periodic review by Exchange Staff during the periods covered by the plan. Failure to make progress consistent with the plan or to regain compliance with the continued listing standards by the end of the periods covering the plan could result in the Company being delisted from the NYSE AMEX LLC. Engex, Inc. is a closed end mutual fund registered under the Investment Company Act of 1940, as a nondiversified, closed-end investment company. EUROFRESH INC: Court Okays Reorganization Plan ---------------------------------------------- U.S. Bankruptcy Court Judge Charles G. Case II has confirmed Eurofresh Inc.'s reorganization plan. The court in Phoenix originally confirmed the document on Oct. 16, 2009. The confirmation indicates Eurofresh and its subsidiary, Eurofresh Produce Ltd., will exit Chapter 11 bankruptcy protection by the end of November. As part of its recapitalization process, the Company had entered into a settlement with the majority of its existing debt holders to convert more than $200 million of debt into equity. The agreement states that Eurofresh will receive $35 million in new capital to repay debt and ensure financial stability to continue investing in strategic capital expenditures. In addition, Eurofresh reached a consensual resolution with its secured lenders and the U.S. Department of Labor, which settled all claims against the company. Dwight Ferguson, chief executive officer of Eurofresh, said the capital investment is a vote of confidence in their employees and mission to grow high-end, pesticide-free produce for customers. "Our senior management is pleased that the end of our reorganization is now in clear sight," Mr. Ferguson said. "We expect to complete our refinancing and be out of bankruptcy very soon." According to Mr. Ferguson, the reorganization has helped the company dramatically improve its capital structure. Financially stronger, Eurofresh can continue supporting and investing its long-term business objectives in Arizona. "I'm proud that we retained virtually all of our employees and maintained all key vendor and customer contracts throughout this process, thereby strengthening the company's relationships with our partners," Mr. Ferguson said. "Our ability to complete the restructuring this quickly and stay on plan with our customer service, sales and production operations is good news for all stakeholders." Eurofresh's growing and packaging operations in Willcox and Snowflake, Arizona, continued normal operations during the reorganization. The Company's customers, including restaurateurs, grocers and the public, saw no change in the quality of the Company's produce and services, Mr. Ferguson said. David Wichner at Arizona Daily Star reports that Eurofresh CEO Dwight Ferguson, Daily Star relates, said that he will stay on as CEO and he expects no major management changes, though a new board of directors will take over when the reorganized company emerges on November 18. Headquartered in Snowflake, Arizona, Eurofresh, Inc. -- http://www.eurofresh.com/-- produces and sells tomatoes. The Company and Eurofresh Produce Ltd., its affiliate, filed for Chapter 11 on April 21, 2009 (Bankr. D. Ariz. Lead Case No. 09-07970). Craig D. Hansen, Esq., at Squire, Sanders & Dempsey L.L.P. represents the Debtors in their restructuring effort. Ilene J. Lashinsky, U.S. Trustee for Region 14, appointed five creditors to serve on the official committee of unsecured creditors in the Debtors' Chapter 11 cases. the Committee retained Stutman, Treister & Glatt P.C. as counsel, and Lewis & Roca L.L.P. as co-counsel. The Eurofresh Inc., in its bankruptcy petition, said it has assets worth $50 million to $100 million and debts of $100 million to $500 million. EVERETT CROSSING: Landlord Doesn't Get Relief from Stay ------------------------------------------------------- WestLaw reports that under Massachusetts law, a landlord's prepetition attempted termination of the Chapter 11 debtor's commercial lease was premature, and thus ineffective. Consequently, the landlord failed to establish cause for relief from the automatic stay to permit it to exercise its rights under the lease, including to proceed to state court to evict the debtor for the non-payment of rent and other defaults. The landlord's notices of default specifically stated that the debtor had five days to pay the rent for the defaults based upon the nonpayment of rent, and those notices of default which were sent to the appropriate address, under the terms of the lease, were effectively delivered less than five days before the notice of termination was delivered. That other notices of default were sent earlier than those delivered to the appropriate address, via e-mail and hand-delivery to the leased premises, was irrelevant. In re Everest Crossing, LLC, --- B.R. ----, 2009 WL 3018688, 52 Bankr. Ct. Dec. 34 (Bankr. D. Mass.) (Bailey, J.). Everest Crossing, LLC, operates a restaurant known as OM Restaurant in the Harvard Square section of Cambridge, Mass. The restaurant occupies leased space in the Crimson Galleria under a 2005 lease agreement. Everest sought Chapter 11 protection (Bankr. D. Mass. Case No. 09-16664) on July 15, 2009, is represented by Herbert Weinberg, Esq., at Rosenberg & Weinberg in North Andover, Mass., and estimated its assets at $500,001 to $1,000,000 and debts at $1,000,001 to $10,000,000 at the time of the filing. FAIRPOINT COMMS: Bankruptcy Court Enforces Automatic Stay --------------------------------------------------------- As a result of the commencement of Fairpoint Communications Inc.'s Chapter 11 cases and by operation of law pursuant to Section 362 of the Bankruptcy Code, the automatic stay enjoins all entities from, among other things: (i) commencing or continuing any judicial, administrative or other action or proceeding against the Debtors that was or could have been initiated before the Petition Date; (ii) recovering a claim against the Debtors that arose before the Petition Date; (iii) enforcing a judgment against the Debtors or any of their estate property that was obtained before the Petition Date; or (d) taking any action to collect, assess, or recover a claim against the Debtors that arose before the Petition Date, Luc A. Despins, Esq., at Paul, Hastings, Janofsky & Walker LLP, in New York, relates. Similarly, Section 365 of the Bankruptcy Code prohibits any party to an executory contract or unexpired lease with the Debtors from, among other things, modifying or terminating a contract or lease, or any right or obligation under a contract or lease, at any time after the Petition Date solely because of a provision in that contract or lease that is conditioned on (i) the insolvency or financial condition of the Debtors at any time before the closing of the Debtors' Chapter 11 cases, (ii) the commencement of the Debtors' Chapter 11 cases, or (iii) the appointment of a trustee in the Debtors' Chapter 11 cases, Mr. Despins maintains. Accordingly, any action by a third party to modify or terminate an executory contract or unexpired lease or enforce their terms against the Debtors is prohibited absent Court approval. Thus, a third party must continue to perform under an executory contract or unexpired lease until it is assumed or rejected. Furthermore, Section 525 of the Bankruptcy Code provides that "a governmental unit may not deny, revoke, suspend, or refuse to renew a license, permit, charter, franchise, or other similar grant to [or] discriminate with respect to that grant against . . . a debtor," Mr. Despins asserts. In this regard, in order to obtain some "breathing space" that is essential to their ability to successfully resolve their liabilities and to be relieved of the financial pressures that drove them into bankruptcy, the Debtors sought and obtained an order from the Court: (a) to enforce the stay imposed under Section 362; (b) to enforce the anti-termination and anti-modification provisions of Section 365(e)(1); and (c) to affirm the protections against discriminatory treatment contained in Section 525. Governmental Entities Before the Court entered its ruling, three governmental entities with authority to regulate the Debtors in relation to communications services provided to business and residential ratepayers in the states of Maine, New Hampshire and Vermont, asked the Court to deny the Debtors' Motion to Enforce Stay. The Maine Public Utilities Commission, and New Hampshire and Vermont States contended that the Motion to Enforce is not appropriate and not authorized pursuant to Section 105 of the Bankruptcy Code, as it seeks injunctive relief that exceeds the scope of the provisions of Sections 362, 365(e)(1), and 525 of the Bankruptcy Code. The Governmental Entities asked the Court that to the extent it grants any of the relief sought in the Motion, to explicitly state in the Order that the Court is neither expanding the scope of the relief provided under Sections 362, 365 or 525 nor pre-judging any substantive or jurisdictional issues relating to the Governmental entities' regulatory authority over the Debtors. Accordingly, the Court makes clear that nothing in the Order limit or restrict the regulatory authority of any state agency, commission or other governmental unit under applicable non- bankruptcy law. 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. Bankruptcy Creditors' Service, Inc., publishes Fairpoint Communications Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Fairpoint Communications Inc. and its debtor- affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) FAIRPOINT COMMS: Gets Interim Nod to Honor Customer Programs ------------------------------------------------------------ Bankruptcy Judge Burton Lifland authorizes Fairpoint Communications Inc. and its units, on an interim basis, to perform their obligations with respect to their customer programs in the ordinary course of business. The Debtors recognize that the continued success of their business requires high levels of customer satisfaction. Thus, they developed and implemented initiatives and incentives that are tailored to attract new customers, retain and maintain the loyalty and goodwill of existing customers, and continue their positive customer relationships and reputation for reliability. These initiatives are in the form of Customer Programs, which can be categorized as promotional offers; billing discounts, adjustments and credits; and deposit refunds. Promotional offers are advertised through direct mail campaigns, telemarketing, online, retail sales and other forms of media like television, radio and newspapers. The nature and extent of these Offers vary from month to month and market to market. The Debtors also have community support programs to further promote their business in local communities. Billing discounts and adjustments are also undertaken by the Debtors to satisfy customer concerns, to offer a discount on an existing product, or to offer a different product or service. Deposit refunds are also undertaken on certain products of the Debtors. Luc a. Despins, Esq., at Paul, Hastings, Janofsky & Walker LLP, in New York, relates that most, if not all, of the Customer Programs are standard practice in the telecommunications industry. He adds that the Customer Programs will inure to the benefit of all of creditors and other parties-in-interest. In contrast, he notes, if the Debtors do not honor their Customer Programs in the ordinary course of business, they will become significantly less competitive in an already competitive and difficult economic environment. The Court, however, clarifies that the Debtors may issue Billing Credits only to the extent they relate to invoices issued by the Debtors on or after February 1, 2009. All of the Debtors' applicable banks are directed to honor all checks and electronic payment requests to the extent the Debtors have sufficient funds standing to their credit with those banks. 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. Bankruptcy Creditors' Service, Inc., publishes Fairpoint Communications Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Fairpoint Communications Inc. and its debtor- affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) FAIRPOINT COMMS: Proposes to Pay Prepetition Shipping Charges ------------------------------------------------------------- Luc A. Despins, Esq., at Paul, Hastings, Janofsky & Walker LLP, in New York, tells the Court that prior to the Petition Date, as an integral part of their businesses, the Debtors used and made payments to commercial common carriers, movers, shippers, freight forwarders, delivery services, distributors, logistics management companies, and other similar third-party transportation service providers to ship, store, and otherwise facilitate the movement of goods, and deliver Goods through established distribution networks, as well as a network of third-party warehouses to store the Goods in transit. At any given time, there are many shipments en route to and from the Debtors' various facilities. Thus, certain Shippers and Warehousemen currently are in possession of Goods are vital to the Debtors' operations. The Debtors estimate that as of the Petition Date, approximately $225,000 in Shipping and Warehousing Charges remain outstanding. The Debtors are also involved in a number of projects, in the ordinary course, relating to the development and maintenance of their infrastructure and facilities. Certain persons involved in the project have performed repair, construction, installation, or similar services for the Debtors. They are referred to as the mechanics. The Debtors estimate that the aggregate amount owed to the Mechanics as of the Petition Date is approximately $368,000. In light of the commencement of these Chapter 11 cases, certain Shippers and Warehousemen who hold Goods for delivery to or from the Debtors may refuse to release the Goods pending receipt of payment for their prepetition services. The Debtors aver that because they are, in many cases, dependent on third-party Shippers and Warehousemen, it is essential that the commencement of their Chapter 11 cases not give any third-party Shippers and Warehousemen any reason or excuse to cease performing timely services or to retain products, equipment, or Goods. Against this backdrop, the Debtors sought and obtained the Court's authority to pay Shippers and Warehousemen, shipping and delivery charges necessary to obtain the release of goods in transit, and to satisfy the liens with respect to those charges; and to pay Mechanics and discharge liens, if any, that the Mechanics may have on the Debtors' property. These charges are due no later than November 16, 2009 The Debtors intend to obtain written verification before issuing payment to a Shipper or Warehouseman for prepetition Shipping and Warehouse Charges, that the Shipper or Warehouseman will (i) continue to provide services to the Debtors during the pendency of these Chapter 11 cases on the most favorable terms that existed prior to the Petition Date, and (ii) not cancel on less than 90 days' notice any contract or agreement pursuant to which it provides services to the Debtors. The Debtors may make payments not to exceed $500,000 on account of the Shipping and Warehousing Charges, the Court clarifies. The Debtors asserts that if any Shipper or Warehouseman should accept payment on account of a prepetition obligation of the Debtors premised on its compliance with the written verification, and thereafter fails to comply with those conditions, any payments to that Shipper or Warehouseman for those prepetition obligations will be deemed an avoidable postpetition transfer under section 549 of the Bankruptcy Code and thus, will be recoverable in cash, upon written request without further Court order. 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. Bankruptcy Creditors' Service, Inc., publishes Fairpoint Communications Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Fairpoint Communications Inc. and its debtor- affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) FBOP CORPORATION: Nine Banking Units Closed by Receivers -------------------------------------------------------- The Federal Deposit Insurance Corporation entered into a purchase and assumption agreement with U.S. Bank, NA, of Minneapolis, Minnesota, a wholly-owned subsidiary of U.S. Bancorp, to assume all of the deposits and essentially all of the assets of nine failed banks. The nine banks were closed October 30 by federal and state bank regulators, which appointed the FDIC as receiver. The nine banks involved in the transaction are: Bank USA, National Association, Phoenix, Arizona; California National Bank, Los Angeles, California; San Diego National Bank, San Diego, California; Pacific National Bank, San Francisco, California; Park National Bank, Chicago, Illinois; Community Bank of Lemont, Lemont, Illinois; North Houston Bank, Houston, Texas; Madisonville State Bank, Madisonville, Texas; and Citizens National Bank, Teague, Texas. As of September 30, 2009, the banks had combined assets of $19.4 billion and deposits of $15.4 billion. The nine banks had 153 offices, which will reopen as branches of U.S. Bank beginning tomorrow during their normal business hours. Depositors of the nine banks will automatically become depositors of U.S. Bank. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship to retain their deposit insurance coverage. Customers should continue to use their existing branches until U.S. Bank can fully integrate the deposit records of the nine failed banks. The FDIC and U.S. Bank entered into a loss-share transaction on approximately $14.4 billion of the combined purchased assets of $18.2 billion. U.S. Bank will share in the losses on the asset pools covered under the loss-share agreement. The loss-sharing arrangement is projected to maximize returns on the assets covered by keeping them in the private sector. The agreement also is expected to minimize disruptions for loan customers. For more information on loss share, please visit: http://www.fdic.gov/bank/individual/failed/lossshare/index.html Customers who have questions about the transaction can contact the FDIC as follows: Failed Bank (a) Bank USA, National Association 1-800-913-3062 http://www.fdic.gov/bank/individual/failed/bankusa-az.html (b) California National Bank 1-800-913-5861 http://www.fdic.gov/bank/individual/failed/calnational.html (c) San Diego National Bank 1-800-517-1839 http://www.fdic.gov/bank/individual/failed/sandiegonational.html (d) Pacific National Bank 1-800-508-8289 http://www.fdic.gov/bank/individual/failed/pacificnational-ca.html (e) Park National Bank 1-800-450-5668 http://www.fdic.gov/bank/individual/failed/park-il.html (f) Community Bank of Lemont 1-800-528-6357 http://www.fdic.gov/bank/individual/failed/community-lemont.html (g) North Houston Bank 1-800-501-1872 http://www.fdic.gov/bank/individual/failed/northhouston-tx.html (h) Madisonville State Bank 1-800-913-3053 http://www.fdic.gov/bank/individual/failed/madisonville-tx.html (i) Citizens National Bank 1-800-517-1843 http://www.fdic.gov/bank/individual/failed/citizens-teague.html The nine banks were subsidiaries of FBOP Corporation, Oak Park, Illinois. FBOP Corporation was not closed and was not subject to the October 30 actions. FBOP is run by Michael Kelly, who from his base in the Chicago suburbs snapped up banks in San Diego, Los Angeles, Houston, and San Francisco. He started in 1990 with First Bank of Oak Park, which had $125 million in assets. The FDIC's Board of Directors issued notices of assessment of cross guaranty liability against Park National Bank and Citizens National Bank. Under statutory authority, the FDIC may assess affiliated banks for losses incurred by the Deposit Insurance Fund (DIF) from the failure of other banks, such as those owned by FBOP Corporation. Congress granted the FDIC authority in 1989 to reduce the cost to the DIF for the resolution of affiliated institutions owned by the same company. The two banks were unable to pay the amounts assessed and were closed by their chartering authorities. The FDIC estimates that the cost of the nine banks to the DIF will be a combined $2.5 billion. U.S. Bank's acquisition of all the deposits was the "least costly" resolution for the FDIC's DIF compared to alternatives. The failure of the nine banks brings the nation's total number this year to 115. By number, banks in Georgia account for one-fifth of all U.S. banks closing this year, with 20 failures, followed by Illinois with 19, California with 13, and Florida with nine. FERRO CORP: S&P Puts 'CCC+' Rating on CreditWatch Positive ---------------------------------------------------------- Standard & Poor's Ratings Services said it has placed all of its ratings on Cleveland, Ohio-based Ferro Corp., including its 'CCC+' corporate credit rating, on CreditWatch with positive implications. The CreditWatch listing follows the company's announcement that it plans to issue 29.5 million shares through an underwritten common stock offering. Ferro intends to use up to $50 million of the net proceeds from the equity offering to pay the costs associated with its restructuring programs and selective growth initiatives. The company will use the remaining net proceeds to pay down outstanding term loans and to pay fees and expenses in connection with the amendment. In addition, Ferro reported sequentially improved earnings in the third quarter of 2009, to $53 million (excluding one-time charges), which should improve liquidity and provide additional headroom with respect to covenant compliance in the next several quarters. "We believe the improving operating performance, coupled with a successful equity offering, could bolster the company's financial risk profile relative to S&P's expectations at the current rating," said Standard & Poor's credit analyst Liley Mehta. Still, the company is highly leveraged; total debt to EBITDA was 7.6x as of Sept. 30, 2009, and funds from operations to total adjusted debt was below 10%. The company has taken several actions to improve its cost structure: restructuring in Europe; closing excess manufacturing capacity; cutting selling, general, and administrative expenses; and reducing production staff. These restructuring actions are projected to result in annual cost savings of $45 million to $60 million by early 2010. In October 2009, the company announced additional restructuring actions, including headcount reductions and plant closures, and it said it will use a portion of the equity offering proceeds to implement further cost-reduction projects. Ferro's largest revenue generator is the inorganic specialties group, where its strategy is to maintain good market positions in its various product categories while reducing costs. Key products in this group include glazes and decorations for tile; automotive enamels; architectural glass coatings; pigments, enamels, and colors for glass bottles and dinnerware; and porcelain enamel for appliances and cookware. Another key business is electronic materials, where demand for metal pastes and powders used in solar cells and plasma displays propels volume growth. However, the discretionary nature of many of these products renders their demand highly sensitive to cyclical downturns. S&P expects to resolve the CreditWatch listing within the next month or so, following completion of the proposed equity offering and upon further assessment of the company's future operating strategy and financial policies. S&P will also assess the extent to which the company can improve earnings and free cash generation to reduce debt leverage meaningfully in the next one to two years. Preserving adequate liquidity and maintaining sufficient cushion with respect to covenant compliance in 2010 and beyond are other key factors in the CreditWatch resolution. If the company successfully completes the equity offering and uses proceeds for debt reduction as proposed, S&P could raise the corporate credit rating by at least one notch. FREEDOM COMMUNICATIONS: JPMorgan Blasts Stay Request ---------------------------------------------------- Law360 reports that JPMorgan Chase NA has lashed out against an appeal by a group of paper carriers who settled a class action against the newspaper publisher in 2008 of a bankruptcy court's decision to allow Freedom Communications Holdings Inc. to use prepetition lenders' cash collateral in the company's Chapter 11 case. Freedom Communications, headquartered in Irvine, Calif., is a national privately owned information and entertainment company of print publications, broadcast television stations and interactive businesses. The company's print portfolio includes approximately 90 daily and weekly publications, including approximately 30 daily newspapers, plus ancillary magazines and other specialty publications. The broadcast company's stations -- five CBS, two ABC network affiliates and one CW affiliate -- reach more than 3 million households across the country. The Company's news, information and entertainment Web sites complement its print and broadcast properties. Freedom Communications filed for Chapter 11 on Sept. 1, 2009 (Bankr. D. Del. Case No. 09-13046). Attorneys at Young Conaway Stargatt & Taylor, and Latham & Watkins LLP serve as Chapter 11 counsel. Houlihan, Lokey, Howard & Zukin, Inc., serves as financial advisor while AlixPartners LLC is restructuring consultant. Logan & Co. serves as claims and notice agent. Freedom Communications had $757,000,000 in assets against debts of $1,077,000,000 as of July 31, 2009. FRIAR TUCK: Resort's Auction Moved to Nov. 19 --------------------------------------------- Robin K. Cooper at The Business Review (Albany) reports that Auction America Realty said that the auction of Friar Tuck Inn of the Catskills, Inc.'s Friar Tuck Resort, Spa & Convention Center has been rescheduled for November 19. The resort's auction, says The Business Review, had been initially scheduled for October 27. From $10 million, the minimum bid is now listed at $6.98 million, The Business Review relates. According to The Business Review, Steve Kutner at Auction America said that he has been instructed by the bankruptcy court that the property and all amenities will be sold to the highest bidder, regardless of the amount. Catskill, New York-based Friar Tuck Inn of the Catskills, Inc., filed for Chapter 11 bankruptcy protection on May 31, 2009 (Bankr. N.D. N.Y. Case No. 09-11996). Its affiliate, Friar Tuck Resorts, Inc., also filed for bankruptcy. Sean C. Serpe, Esq., at Pelton Serpe LLP assists Friar Tuck in its restructuring efforts. The Company listed up to $50,000 in assets and $1,000,001 to $10,000,000 in liabilities. FRONTIER COMMS: California OKs Buyout of Verizon Wireline Ops. -------------------------------------------------------------- Frontier Communications Corporation disclosed the pending acquisition of Verizon Communications' local wireline operations has received approval from the California Public Utilities Commission. The transaction, announced May 13, 2009, includes Verizon's local exchange businesses in 14 states, including parts of California, and certain customer relationships for long distance services, broadband Internet access and broadband video. This week, on October 27, 2009, Frontier's stockholders voted overwhelmingly to approve the merger agreement and related proposals. Frontier has also received approvals from the Public Utilities Commission of Nevada, the Public Service Commission of South Carolina and 10 of the 41 FiOS video franchise communities the company will serve in Washington state and Oregon. On September 1, 2009, the transaction received early termination of the waiting period required under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. In addition to the remaining local franchise approvals and the approvals of six other states, the Federal Communications Commission (FCC) must approve certain license transfers as well. The FCC review is in process. "We are very pleased with obtaining these key approvals," said Maggie Wilderotter, Chairman and CEO of Frontier Communications. "Upon receipt of the remaining approvals necessary for closing the transaction, Frontier will be ready to deliver terrific products and services to our new customers. The new Frontier will have a strong balance sheet enabling us to upgrade broadband in many of these communities and to deliver an excellent customer experience. Financially, the transaction will result in lower leverage, operating flexibility, and greater cash flow generation, all of which should enable Frontier to achieve an investment grade credit rating," she added. After the transaction, Frontier will have approximately 7 million access lines in 27 states, 8.6 million voice and broadband connections, and approximately 16,000 employees, based on data as of December 31, 2008. The transaction is still expected to close during the second quarter of 2010. About Frontier Communications Frontier Communications Corporation, headquartered in Stamford, Connecticut, is the fifth largest wireline telecommunications company in the U.S., serving more than 7 million access lines in primarily rural areas and small- and medium-sized cities. * * * Fitch Ratings has maintained Frontier's Issuer Default Rating at 'BB', on Positive Watch. Standard & Poor's Ratings Services also retained Frontier's corporate credit rating at 'BB/Stable/--' despite the upsizing of the Company's 8.125% senior notes due 2018 from $450 million to $600 million at the end of September 2009. FRONTIER COMMS: South Carolina OKs Acquisition of Verizon Wireline ------------------------------------------------------------------ Frontier Communications Corporation disclosed that its pending acquisition of Verizon Communications' local wireline operations has received approval from the Public Service Commission of South Carolina. The transaction, announced May 13, 2009, includes Verizon's local exchange businesses in 14 states, including parts of California, and certain customer relationships for long distance services, broadband Internet access and broadband video. This week, on October 27, 2009, Frontier's stockholders voted overwhelmingly to approve the merger agreement and related proposals. Frontier has also received approvals from the California Public Utilities Commission, the Public Utilities Commission of Nevada, and 10 of the 41 FiOS video franchise communities the company will serve in Washington state and Oregon. On September 1, 2009, the transaction received early termination of the waiting period required under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. In addition to the remaining local franchise approvals and the approvals of six other states, the Federal Communications Commission must approve certain license transfers as well. The FCC review is in process. "We are very pleased with obtaining these key approvals," said Maggie Wilderotter, Chairman and CEO of Frontier Communications. "Upon receipt of the remaining approvals necessary for closing the transaction, Frontier will be ready to deliver terrific products and services to our new customers. The new Frontier will have a strong balance sheet enabling us to upgrade broadband in many of these communities and to deliver an excellent customer experience. Financially, the transaction will result in lower leverage, operating flexibility, and greater cash flow generation, all of which should enable Frontier to achieve an investment grade credit rating," she added. After the transaction, Frontier will have approximately 7 million access lines in 27 states, 8.6 million voice and broadband connections, and approximately 16,000 employees, based on data as of December 31, 2008. The transaction is still expected to close during the second quarter of 2010. About Frontier Communications Frontier Communications Corporation, headquartered in Stamford, Connecticut, is the fifth largest wireline telecommunications company in the U.S., serving more than 7 million access lines in primarily rural areas and small- and medium-sized cities. * * * Fitch Ratings has maintained Frontier's Issuer Default Rating at 'BB', on Positive Watch. Standard & Poor's Ratings Services also retained Frontier's corporate credit rating at 'BB/Stable/--' despite the upsizing of the Company's 8.125% senior notes due 2018 from $450 million to $600 million at the end of September 2009. FRONTIER COMMS: Nevada OKs Frontier's Buyout of Verizon Wireline ---------------------------------------------------------------- Frontier Communications Corporation's pending acquisition of Verizon Communications' local wireline operations has received approval from the Public Utilities Commission of Nevada. The transaction, announced May 13, 2009, includes Verizon's local exchange businesses in 14 states, including parts of California, and certain customer relationships for long distance services, broadband Internet access and broadband video. This week, on October 27, 2009, Frontier's stockholders voted overwhelmingly to approve the merger agreement and related proposals. Frontier has also received approvals from the California Public Utilities Commission, the Public Service Commission of South Carolina, and 10 of the 41 FiOS video franchise communities the company will serve in Washington state and Oregon. On September 1, 2009, the transaction received early termination of the waiting period required under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. In addition to the remaining local franchise approvals and the approvals of six other states, the Federal Communications Commission must approve certain license transfers as well. The FCC review is in process. "We are very pleased with obtaining these key approvals," said Maggie Wilderotter, Chairman and CEO of Frontier Communications. "Upon receipt of the remaining approvals necessary for closing the transaction, Frontier will be ready to deliver terrific products and services to our new customers. The new Frontier will have a strong balance sheet enabling us to upgrade broadband in many of these communities and to deliver an excellent customer experience. Financially, the transaction will result in lower leverage, operating flexibility, and greater cash flow generation, all of which should enable Frontier to achieve an investment grade credit rating," she added. After the transaction, Frontier will have approximately 7 million access lines in 27 states, 8.6 million voice and broadband connections, and approximately 16,000 employees, based on data as of December 31, 2008. The transaction is still expected to close during the second quarter of 2010. About Frontier Communications Frontier Communications Corporation, headquartered in Stamford, Connecticut, is the fifth largest wireline telecommunications company in the U.S., serving more than 7 million access lines in primarily rural areas and small- and medium-sized cities. * * * Fitch Ratings has maintained Frontier's Issuer Default Rating at 'BB', on Positive Watch. Standard & Poor's Ratings Services also retained Frontier's corporate credit rating at 'BB/Stable/--' despite the upsizing of the Company's 8.125% senior notes due 2018 from $450 million to $600 million at the end of September 2009. GENERAL MOTORS: Fisker Automotive in Talks to Buy Wilmington Plant ------------------------------------------------------------------ Fisker Automotive Inc. is in advanced talks to buy an old General Motors Co. plant in Wilmington, Delaware to build a plug-in electric hybrid vehicle that would hit the U.S. market in 2012, Josh Mitchell of the Wall Street Journal reported on October 26, 2009. Russell Datz, a spokesman for Fisker, said talks were continuing and that the company planned to make an announcement on October 27, the report said. Fisker Chief Executive Henrik Fisker, according to the Journal, said earlier that the company had identified a U.S. site to build a $48,000 hybrid vehicle marketed toward families. The plant would likely employ at least 1,500 workers and produce up to 100,000 cars annually, he said. The plant under discussion is GM's 3.2 million-square-foot Boxwood Road assembly plant, idled since July. The plant, built in 1947, once assembled the Saturn Sky and Pontiac Solstice. About General Motors Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- as founded in 1908. GM employs about 266,000 people around the world and manufactures cars and trucks in 35 countries. In 2007, nearly 9.37 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. GM Europe is based in Zurich, Switzerland, while General Motors Latin America, Africa and Middle East is headquartered in Miramar, Florida. As reported by the Troubled Company Reporter, GM reported net loss of US$6.0 billion, including special items, in the first quarter of 2009. This compares with a reported net loss of US$3.3 billion in the year-ago quarter. As of March 31, 2009, GM had US$82.2 billion in total assets and US$172.8 billion in total liabilities, resulting in US$90.5 billion in stockholders' deficit. General Motors Corporation and three of its affiliates filed for Chapter 11 protection on June 1, 2009 (Bankr. S.D.N.Y. Lead Case No. 09-50026). General Motors changed its name to Motors Liquidation Co. following the sale of its key assets to a company 60.8% owned by the U.S. Government. The Honorable Robert E. Gerber presides over the Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors in their restructuring efforts. Al Koch at AP Services, LLC, an affiliate of AlixPartners, LLP, serves as the Chief Executive Officer for Motors Liquidation Company. GM is also represented by Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as counsel. Cravath, Swaine, & Moore LLP is providing legal advice to the GM Board of Directors. GM's financial advisors are Morgan Stanley, Evercore Partners and the Blackstone Group LLP. Bankruptcy Creditors' Service, Inc., publishes General Motors Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Motors Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). GENERAL MOTORS: GM to Address Magna's Bid on November 3 Meeting --------------------------------------------------------------- General Motors will continue discussions on how to resolve remaining open points of the bid submitted by Magna International Inc. and Savings Bank of the Russian Federation for GM's Adam Opel GmbH unit during the automaker's November 3, 2009 board meeting, the Wall Street Journal reported on October 24, 2009, citing a blog written by GM's lead negotiator, John Smith. During the same meeting, General Motors will also discuss a letter from German Economy Minister Karl-Theodor zu Guttenberg who prodded GM to address issues raised by the European Commission over the planned sale of Opel, the Journal further reported. In an interview with the Journal on October 13, 2009, GM Chief Executive Officer Frederick Henderson noted that it was "quite possible" for GM to finalize the Opel Sale within the week. Mr. Henderson reiterated to the Financial Times in an October 20 interview that he is still "reasonably confident" on the deal being sealed this week. The Sale, which was reached on September 10, 2009, provides for Magna/Sberbank's purchase of 55% stake in New Opel. GM will hold a 35% stake, while employees will take 10%. Anti-trust regulators at the European Commission have confirmed that there were no plans to thwart Magna's acquisition of GM's European arm. This eased concerns that were raised by EU Competition Commissioner Neelie Kroes that Germany's financial aid to Opel -- which employs around 50,000 people, half of them in Germany -- may break the rules, Reuters reported. About General Motors Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- as founded in 1908. GM employs about 266,000 people around the world and manufactures cars and trucks in 35 countries. In 2007, nearly 9.37 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. GM Europe is based in Zurich, Switzerland, while General Motors Latin America, Africa and Middle East is headquartered in Miramar, Florida. As reported by the Troubled Company Reporter, GM reported net loss of US$6.0 billion, including special items, in the first quarter of 2009. This compares with a reported net loss of US$3.3 billion in the year-ago quarter. As of March 31, 2009, GM had US$82.2 billion in total assets and US$172.8 billion in total liabilities, resulting in US$90.5 billion in stockholders' deficit. General Motors Corporation and three of its affiliates filed for Chapter 11 protection on June 1, 2009 (Bankr. S.D.N.Y. Lead Case No. 09-50026). General Motors changed its name to Motors Liquidation Co. following the sale of its key assets to a company 60.8% owned by the U.S. Government. The Honorable Robert E. Gerber presides over the Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors in their restructuring efforts. Al Koch at AP Services, LLC, an affiliate of AlixPartners, LLP, serves as the Chief Executive Officer for Motors Liquidation Company. GM is also represented by Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as counsel. Cravath, Swaine, & Moore LLP is providing legal advice to the GM Board of Directors. GM's financial advisors are Morgan Stanley, Evercore Partners and the Blackstone Group LLP. Bankruptcy Creditors' Service, Inc., publishes General Motors Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Motors Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). GENERAL MOTORS: Nixes Daewoo Rights Offering -------------------------------------------- Shareholders of South Korea's GM Daewoo Automotive Technology, including General Motors Co. and the state-owned Korea Development Bank, had not taken part in Daewoo's $424 million rights offer, Reuters reported October 21, 2009. GM, according to the report, did not take up Daewoo's rights offer as the U.S. automaker is barred by the U.S. government to take money out of the United States. A second subscription open to GM's overseas units will take place until October 23 and, according to a KDB spokesman, GM's overseas units are expected to take up the offer, as GM's CEO Fritz Henderson said his company will participate in the offering with money from non-U.S. operations. KDB was also offered 491.2 billion won ($423.5 million) by an October 21 deadline, but it declined to subscribe to the offer. Reuters quoted KDB as saying that it has "refused to take part in the offering unless its demands, including participation in Daewoo's management, are met." KDB, GM Daewoo's major creditor, has previously expressed concern over Daewoo's survival. KDB chief Min Euoo-Sung has stated that Daewoo's long term survival is imperiled after posting a net loss of 875 billion won ($750 million) in 2008. The loss, brought about by falling demand amid the global economic dilemma, contributed mainly to Daewoo's use up of its $2 billion credit line. Daewoo is now seeking a one trillion won loan to keep it beyond the red, the Associated Press said. KDB has a 28% stake in GM Daewoo while GM holds 51%. Daewoo aims to raise 491 billion won in rights offering, however, KDB urged GM to increase the size of the offering, advising GM to raise money for its subsidiary and to tender part of its stake in Daewoo as guaranty and permit Daewoo to develop its own cars. About General Motors Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- as founded in 1908. GM employs about 266,000 people around the world and manufactures cars and trucks in 35 countries. In 2007, nearly 9.37 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. GM Europe is based in Zurich, Switzerland, while General Motors Latin America, Africa and Middle East is headquartered in Miramar, Florida. As reported by the Troubled Company Reporter, GM reported net loss of US$6.0 billion, including special items, in the first quarter of 2009. This compares with a reported net loss of US$3.3 billion in the year-ago quarter. As of March 31, 2009, GM had US$82.2 billion in total assets and US$172.8 billion in total liabilities, resulting in US$90.5 billion in stockholders' deficit. General Motors Corporation and three of its affiliates filed for Chapter 11 protection on June 1, 2009 (Bankr. S.D.N.Y. Lead Case No. 09-50026). General Motors changed its name to Motors Liquidation Co. following the sale of its key assets to a company 60.8% owned by the U.S. Government. The Honorable Robert E. Gerber presides over the Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors in their restructuring efforts. Al Koch at AP Services, LLC, an affiliate of AlixPartners, LLP, serves as the Chief Executive Officer for Motors Liquidation Company. GM is also represented by Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as counsel. Cravath, Swaine, & Moore LLP is providing legal advice to the GM Board of Directors. GM's financial advisors are Morgan Stanley, Evercore Partners and the Blackstone Group LLP. Bankruptcy Creditors' Service, Inc., publishes General Motors Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Motors Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). GENERAL MOTORS: SAAB Deal Nears Completion as Konigsegg Gets Loans ------------------------------------------------------------------ Koenigsegg Group AB got approval from the European Investment Bank of a EUR400 million-loan from the European Investment Bank integral to its acquisition of General Motors Company's Saab Automobile unit, Ian Edmondson of Dow Jones Newswires said on October 21, 2009. In line with this development, Saab spokesperson Gunilla Gustavs confirmed to Dow Jones Newswires that Sweden's National Debt Office has tentatively sought the European Union to back the loan guarantees. Similarly, the loans are subject to approval of the European Commission's approval of the Swedish loan guarantees, Dow Jones Newswires related. The Saab deal is targeted to close by the end of 2009, Dow Jones Newswires said. About General Motors Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- as founded in 1908. GM employs about 266,000 people around the world and manufactures cars and trucks in 35 countries. In 2007, nearly 9.37 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. GM Europe is based in Zurich, Switzerland, while General Motors Latin America, Africa and Middle East is headquartered in Miramar, Florida. As reported by the Troubled Company Reporter, GM reported net loss of US$6.0 billion, including special items, in the first quarter of 2009. This compares with a reported net loss of US$3.3 billion in the year-ago quarter. As of March 31, 2009, GM had US$82.2 billion in total assets and US$172.8 billion in total liabilities, resulting in US$90.5 billion in stockholders' deficit. General Motors Corporation and three of its affiliates filed for Chapter 11 protection on June 1, 2009 (Bankr. S.D.N.Y. Lead Case No. 09-50026). General Motors changed its name to Motors Liquidation Co. following the sale of its key assets to a company 60.8% owned by the U.S. Government. The Honorable Robert E. Gerber presides over the Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors in their restructuring efforts. Al Koch at AP Services, LLC, an affiliate of AlixPartners, LLP, serves as the Chief Executive Officer for Motors Liquidation Company. GM is also represented by Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as counsel. Cravath, Swaine, & Moore LLP is providing legal advice to the GM Board of Directors. GM's financial advisors are Morgan Stanley, Evercore Partners and the Blackstone Group LLP. Bankruptcy Creditors' Service, Inc., publishes General Motors Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Motors Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). GENERAL MOTORS: SAIC Motor May Acquire Stake in GM's India Unit --------------------------------------------------------------- SAIC Motor Corp. will buy a stake in General Motors Company's India unit, Bloomberg News reported on October 16, 2009, citing a person familiar with the matter. The stake sale is part of a deal between SAIC and GM, which are planning to introduce minivans and small cars in India to meet the growing demand for small trucks, Bloomberg said. Zhu Xiangjun, spokesperson for SAIC told Bloomberg that the deal between GM and SAIC has not been completed. SAIC and GM are owners of SAIC-GM-Wuling Automobile Co., a three- shareholder joint venture with Liuzhou Wuling Motors Co. Limited. About General Motors Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- as founded in 1908. GM employs about 266,000 people around the world and manufactures cars and trucks in 35 countries. In 2007, nearly 9.37 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. GM Europe is based in Zurich, Switzerland, while General Motors Latin America, Africa and Middle East is headquartered in Miramar, Florida. As reported by the Troubled Company Reporter, GM reported net loss of US$6.0 billion, including special items, in the first quarter of 2009. This compares with a reported net loss of US$3.3 billion in the year-ago quarter. As of March 31, 2009, GM had US$82.2 billion in total assets and US$172.8 billion in total liabilities, resulting in US$90.5 billion in stockholders' deficit. General Motors Corporation and three of its affiliates filed for Chapter 11 protection on June 1, 2009 (Bankr. S.D.N.Y. Lead Case No. 09-50026). General Motors changed its name to Motors Liquidation Co. following the sale of its key assets to a company 60.8% owned by the U.S. Government. The Honorable Robert E. Gerber presides over the Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors in their restructuring efforts. Al Koch at AP Services, LLC, an affiliate of AlixPartners, LLP, serves as the Chief Executive Officer for Motors Liquidation Company. GM is also represented by Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as counsel. Cravath, Swaine, & Moore LLP is providing legal advice to the GM Board of Directors. GM's financial advisors are Morgan Stanley, Evercore Partners and the Blackstone Group LLP. Bankruptcy Creditors' Service, Inc., publishes General Motors Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Motors Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). GOODYEAR TIRE: Third Quarter Results Supports S&P's 'BB-' Rating ---------------------------------------------------------------- Standard & Poor's Ratings Services said that credit measures for The Goodyear Tire & Rubber Co. (BB-/Negative/--) are on track to meet S&P's expectations for the current rating, based on third- quarter results. For example, S&P estimates that free operating cash flow totaled about $292 million in the third quarter, helped by a $366 million decrease in inventories, and that free operating cash flow was a negative $73 million for the first nine months. S&P expects free operating cash flow to be negative in 2009, but S&P does not expect cash use to exceed $350 million this year. S&P believes that level of cash use will be manageable, given Goodyear's liquidity. At the end of September, cash and cash equivalents stood at $2.6 billion, and unused revolving credit availability was $1.8 billion. Net sales in the third quarter fell 15% year over year, reflecting the ongoing effect of the worldwide economic downturn. A decline in other tire-related business, lower tire demand -- mainly in North America, Europe, the Middle East, and Africa -- and foreign currency translation contributed to decreased sales. Total segment operating income was $275 million in the third quarter compared with $266 million in the third quarter a year ago and $24 million in the second quarter of 2009. On a sequential basis, however, sales and segment operating income rose in all regions of the world, suggesting that tire demand is stabilizing. Nevertheless, S&P remain concerned about the ongoing weakness in the consumer and commercial markets in Europe and North America. The company expects fourth-quarter segment operating income in North America to fall by $75 million, to $125 million sequentially. S&P believes that if tire demand falls, there is the possibility of increased price competition by major tire makers. GRAPHIC PACKAGING: Debt Trades at 5.04% Off in Secondary Market --------------------------------------------------------------- Participations in a syndicated loan under which Graphic Packaging International is a borrower traded in the secondary market at 94.96 cents-on-the-dollar during the week ended Oct. 30, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents a drop of 0.80 percentage points from the previous week, The Journal relates. The loan matures on May 16, 2014. The Company pays 200 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's Ba3 rating and Standard & Poor's BB rating. The debt is one of the biggest gainers and losers among widely quoted syndicated loans in secondary trading in the week ended Oct. 30, among the 161 loans with five or more bids. Headquartered in Marietta, Georgia, Graphic Packaging Corporation (NYSE:GPK) -- http://www.graphicpackaging.com/-- provides paperboard packaging solutions for a variety of products to multinational and other consumer products companies. The company provides its customers paperboard, cartons and packaging machines, either as an integrated solution or separately. Its packaging products are made from a variety of grades of paperboard. GPC manufactures its packaging products from coated unbleached kraft paperboard and coated recycled paperboard that it produces at its mills, and a portion from paperboard purchased from external sources. The company operates in four geographic areas: the United States, Central and South America (Brazil), Europe and Asia-Pacific. GPC conducts its business in two segments, paperboard packaging and containerboard/other. As reported by the Troubled Company Reporter-Latin America on March 14, 2008, Graphic Packaging Holding Company completed its combination of Graphic Packaging Corporation and Altivity Packaging LLC. The combination of Graphic Packaging and Altivity created a company with pro-forma 2007 revenues of over US$4.4 billion and pro-forma 2007 adjusted EBITDA of approximately US$553 million. Headquartered in Carol Stream, Illinois, Altivity Packaging -- http://www.altivity.com-- produces various products such as folding cartons, bag and plastic packaging, and decorative laminations. Altivity Packaging also provides gift boxes for department stores and other retail venues, as well contract packaging services and inks and coatings. The company, which operates about 60 manufacturing plants across the US, serves the food, medical, and electronic industries, among others. In 2006 Altivity Packaging was established after TPG Capital's purchase of Smurfit-Stone Container's consumer packaging unit. As reported by the Troubled Company Reporter on March 24, 2008, Moody's Investors Service affirmed Graphic Packaging International Inc.'s B1 corporate family rating, B3 subordinated notes, and SGL- 3 speculative grade liquidity rating (indicating adequate liquidity) following the announcement of the completed combination of its operations with Altivity Packaging, LLC. Moody's also assigned a Ba3 rating to the company's new $1.2 billion term loan C due 2014. The existing ratings have been downgraded on both the secured bank facilities, to Ba3 from Ba2, and the senior unsecured notes, to B3 from B2, due to the revised capital structure. The additional amounts of senior secured debt move the ratings of this debt toward the B1 corporate family rating while the senior unsecured notes are lowered by one notch. The outlook remains negative. Proceeds from the transaction will be used to pay off Altivity's existing debt, thus Altivity's ratings have been withdrawn. GUARANTY FINANCIAL: Carl Icahn Lets Go of Over 7 Million Shares --------------------------------------------------------------- Zachery Kouwe at The New York Times' Dealbook reports that Carl C. Icahn has disposed of more than seven million shares of Guaranty Financial Group. Mr. Icahn and his affiliates said in a filing with the U.S. Securities and Exchange Commission that they had sold their entire stake in Guaranty Financial in a private transaction for a "nominal" amount. Guaranty Financial Group Inc. -- http://www.guarantygroup.com/-- is based in Dallas, Texas. Guaranty Financial is a unitary savings and loan holding company. The Company's primary operating entities are Guaranty Bank and Guaranty Insurance Services, Inc. Guaranty Financial filed for bankruptcy after the Guaranty bank was seized by regulators and sent to receivership under the Federal Deposit Insurance Corporation. Before the bank was taken over, the balance sheet of the holding company had $15.4 billion in assets as of Sept. 30, 2008. Guaranty Financial together with affiliates filed for Chapter 11 on Aug. 27, 2009 (Bankr. N.D. Tex. Case No. 09-35582). Attorneys at Haynes & Boone, LLP, represent the Debtors. According to the schedules attached to its petition, the Company has assets of at least $24,295,000, and total debts of $323,413,428, including $305 million in trust preferred security. HCA INC: Bank Debt Trades at 7% Off in Secondary Market ------------------------------------------------------- Participations in a syndicated loan under which HCA, Inc., is a borrower traded in the secondary market at 93.17 cents-on-the- dollar during the week ended Oct. 30, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents a drop of 0.87 percentage points from the previous week, The Journal relates. The loan matures on Nov. 6, 2013. The Company pays 225 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's Ba3 rating and Standard & Poor's BB rating. The debt is one of the biggest gainers and losers among widely quoted syndicated loans in secondary trading in the week ended Oct. 30, among the 161 loans with five or more bids. Headquartered in Nashville, Tennessee, HCA, Inc. -- http://www.hcahealthcare.com/-- is the nation's leading provider of healthcare services. As of June 30, 2008, HCA operated 169 hospitals and 107 freestanding surgery centers, including eight hospitals and eight freestanding surgery centers operated through equity method joint ventures. As reported by the TCR on Aug. 4, 2009, Moody's Investors Service assigned a 'Ba3' (LGD3, 32%) rating to HCA, Inc.'s proposed offering of $750 million of first lien senior secured notes. Moody's also affirmed the existing ratings of HCA, including the 'B2' Corporate Family and Probability of Default Ratings. The outlook for the ratings is stable. HOLLEY PERFORMANCE: Files Schedules of Assets and Liabilities ------------------------------------------------------------- Holley Performance Products Inc. delivered to the U.S. Bankruptcy Court for the District of Delaware their schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $3,700,000 B. Personal Property $42,726,943 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $78,660,082 E. Creditors Holding Unsecured Priority Claims $8,294,406 F. Creditors Holding Unsecured Non-priority Claims ----------- ------------- TOTAL $46,426,943 $86,954,488 The Debtor's affiliates also filed with the Court separate schedules of assets and liabilities. A full-text copy of the Debtor's schedules is available for free at http://ResearchArchives.com/t/s?47d9 Holley Performance and its affiliates are leading suppliers of performance automotive products. The Company designs, manufactures, and markets a diversified line of performance automotive products, including carburetors, fuel pumps, fuel injection systems, nitrous oxide injection systems, superchargers, exhaust headers, mufflers, and automotive performance plumbing products, The Company designs its performance automotive products to enhance street, off-road, recreational, and competitive vehicle performance through increased horsepower, torque, and drivability, In addition to the automotive performance line, Holley Performance remanufactures carburetors and manufactures performance products for thc powersport, marine, and motorcycle markets, Holley Performance also formerly supplied selected products to certain industrial (non-automotive) original equipment manufacturers. Holley Performance and its affiliates filed for Chapter 11 on September 28, 2009 (Bankr. D. Del. Case No. 09-13333). Pepper Hamilton LLP represents the Debtors in their restructuring effort. Ropes & Gray LLP is corporate counsel. Epiq Bankruptcy Solutions LLC serves as claims and notice agent. The Debtors' cases have been assigned to Judge Peter J. Walsh. The petition says assets and debts are between $100 million and $500 million. Holley Performance returned to bankruptcy 19 months after winning court approval of its last reorganization plan IDEARC INC: Seeks to Ink Standby Equity Purchase Deal with Paulson ------------------------------------------------------------------ Idearc Inc. filed a motion with the United States Bankruptcy Court for the Northern District of Texas in its pending Chapter 11 proceedings requesting authority to enter into a standby equity purchase arrangement with certain funds and accounts managed by Paulson & Co. Inc. Under Paulson's proposed standby purchase arrangement, each holder of Class 3 and Class 4 claims under Idearc's proposed plan of reorganization will have the right to elect, in its sole discretion, to receive cash in lieu of shares of new Idearc common stock upon the effectiveness of the plan of reorganization. The cash to fund the elections by claim holders will be provided by Paulson's purchase from reorganized Idearc of the number of shares of new common stock that otherwise would have been distributed to electing claim holders. The amount of cash to be received would be an amount per share implied by a US$200 million valuation for all of the equity of reorganized Idearc. Under the proposed standby purchase agreement, the amount of new common stock that Paulson can acquire is limited so that Paulson will not beneficially own more than 45% of the outstanding new Idearc common stock as of the effective date of the reorganization. As part of the proposed standby equity purchase arrangement, Paulson and Idearc would agree on corporate governance measures described in detail in the motion filed with the Bankruptcy Court, including Paulson being granted the right to nominate one director to serve on the Board of Directors of Idearc, and Paulson's beneficial ownership of common stock being limited to 45% of the issued and outstanding stock of Idearc. The ability of Idearc to enter into the standby equity purchase arrangement is subject to approval of the Bankruptcy Court. The Bankruptcy Court is scheduled to consider the Paulson proposal on November 18, 2009. The obligations of Paulson and Idearc would be subject to additional conditions set forth in a proposed form of standby purchase agreement that Idearc filed with its motion for Bankruptcy Court approval. A confirmation hearing on Idearc's proposed plan of reorganization is scheduled for December 9, 2009, and Idearc anticipates that the reorganized company will be able to emerge from its Chapter 11 proceedings in the near term. The Bankruptcy Court has approved a disclosure statement in the Chapter 11 bankruptcy proceeding of Idearc and its domestic subsidiaries. The court approved disclosure statement is the exclusive means by which Idearc may solicit the plan of reorganization. Headquartered in DFW Airport, Texas, Idearc, Inc. (NYSE: IAR) -- http://www.idearc.com/-- formerly known as Directories Disposition Corporation, provides yellow and white page directories and related advertising products in the United States and the District of Columbia. Products include print yellow pages, print white pages, Superpages.com, Switchboard.com and LocalSearch.com, the company's online local search resources, and Superpages Mobile, their information directory for wireless subscribers. Idearc is the exclusive official publisher of Verizon print directories in the markets in which Verizon is currently the incumbent local exchange carrier. Idearc uses the Verizon brand on their print directories in their incumbent markets, well as in their expansion markets. Idearc and its affiliates filed for Chapter 11 protection on March 31, 2009 (Bankr. N.D. Tex. Lead Case No. 09-31828). Toby L. Gerber, Esq., at Fulbright & Jaworski, LLP, represents the Debtors in their restructuring efforts. The Debtors have tapped Moelis & Company as their investment banker; Kurtzman Carson Consultants LLC as their laims agent. William T. Neary, the United States Trustee for Region 6, appointed six creditors to serve on an official committee of unsecured creditors of Idearc, Inc., and its debtor-affiliates. The Committee selected Mark Milbank, Tweed, Hadley & McCloy LLP, as counsel, and Haynes and Boone, LLP, co- counsel. The Debtors' financial condition as of Dec. 31, 2008, showed total assets of $1,815,000,000 and total debts of $9,515,000,000. INSIGNIA SOLUTIONS: Earns $12,461 in Third Quarter -------------------------------------------------- Insignia Solutions plc reported net income of $12,461 on net revenues of $3,551,417 for the three months ended September 30, 2009, compared with a net loss of $253,807 on net revenues of $3,623,771 in the same period of 2008. Net revenues decreased during the three months ended September 30, 2009, as compared to the three months ended September 30, 2008, due to a decrease in average order size attributed to continuing overall economic difficulties. The reversal to net income during the three months ended September 30, 2009, from a net loss during the same period last year was attributed by the Company to improved operating efficiencies, improved margins and fewer merger related costs. For the nine months ended September 30, 2009, the Company reported a net loss of $139,233 on net revenues of $9,266,244, compared with net income of $115,050 on net revenues of $8,858,418 in the same period last year. Results for 2008 included a one-time gain of $1,113,849 related to the Company's debt conversion in June 2008. At September 30, 2009, the Company's consolidated balance sheets showed $1,954,020 in total assets, $1,609,501 in total liabilities, and $344,519 in total shareholders' equity. A full-text copy of the Company's consolidated financial statements for the three and nine months ended September 30, 2009, is available for free at http://researcharchives.com/t/s?47dd Going Concern Doubt On March 30, 2009, Malone & Bailey, PC, in Houston, Texas, expressed substantial doubt about Insignia Solutions plc'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 Company has a recent history of operating losses and operating cash outflows. These factors raise substantial doubt about the Company's ability to continue as a going concern. About Insignia Solutions plc Headquartered in Scottsdale, Ariz., Insignia Solutions plc dba DollarDays International, Inc. is an internet wholesaler. The Company develops software programs that allow the Company to provide general merchandise for resale to businesses through its Web site at http://www.DollarDays.com/ INTELSAT JACKSON: Bank Debt Trades at 11% Off in Secondary Market ----------------------------------------------------------------- Participations in a syndicated loan under which Intelsat Jackson Holdings Ltd. is a borrower traded in the secondary market at 89.25 cents-on-the-dollar during the week ended Oct. 30, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents a drop of 0.83 percentage points from the previous week, The Journal relates. The loan matures on Feb. 5, 2014. The Company pays 300 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's B3 rating and Standard & Poor's BB- rating. The debt is one of the biggest gainers and losers among widely quoted syndicated loans in secondary trading in the week ended Oct. 30, among the 161 loans with five or more bids. Intelsat Jackson Holdings is an indirect subsidiary of Intelsat Ltd. Headquartered in Penbroke, Bermuda, Intelsat is the largest fixed satellite service operator in the world and is privately held by financial investors. As reported by the Troubled Company Reporter on Oct. 16, 2009, Standard & Poor's assigned its 'B+' issue-level and '2' recovery ratings to Intelsat Jackson Holdings Ltd.'s proposed $500 million senior notes due 2019. The '2' recovery rating indicates expectations for substantial (70%-90%) recovery in the event of a payment default. The proposed notes are also guaranteed by Intelsat Subsidiary Holding Co. Ltd. Issue proceeds will be used to purchase and retire about $400 million of the 11.5%/12.5% senior paid-in-kind election notes due 2017 that reside at Intelsat Bermuda Ltd. ($2.4 billion outstanding as of June 30, 2009) and for general corporate purposes. Ratings are based on preliminary documentation and are subject to review of final documents. In addition, S&P lowered the issue-level ratings on Intelsat Sub Holdco's unsecured debt to 'B+' from 'BB-'. This rating action also applies to the debt at Intelsat Jackson Holdings that is guaranteed by Sub Holdco. The downgrade of about $3.7 billion in debt is due to the increased debt that is guaranteed by Intelsat Sub Holdco. S&P revised the recovery rating on these notes to '2' from '1'. Also, S&P affirmed the 'B' corporate credit rating on parent Intelsat Ltd. The outlook is stable. The TCR reported on Oct. 16, 2009, that Moody's assigned a B3 rating to Intelsat Jackson Holdings, Ltd.'s new $500 million 10- year note issue. The new notes are guaranteed by Intelsat Jackson's indirect, wholly owned subsidiary, Intelsat Subsidiary Holding Company, Ltd. and, as they rank equally with existing B3- rated senior notes issued by Intelsat SubHoldCo (and with senior notes at Intelsat SubHoldCo's sister company, Intelsat Corporation), they are rated at the same B3 level. INTERMET CORP: Will Shut Down Archer Creek Foundry in Campbell -------------------------------------------------------------- Bryan Gentry at Lynchburg News Advance reports that Intermet Corp. will close its Archer Creek Foundry in Campbell County, after plans to sell the facility in September failed. According to News Advance, the foundry has informed the county and state that it will lay off about 192 people on December 26, which is expected to be permanent. Based in Fort Worth, Texas, Intermet Corp. designs and manufactures machine precision iron and aluminum castings for the automotive and industrial markets. The Company and its debtor- affiliates filed for Chapter 11 protection on August 12, 2008 (D. Del. Case Nos. 08-11859 to 08-11866 and 08-11868 to 08-11878). Dennis F. Dunne, Esq., Matthew S. Barr, Esq., and Michael E. Comerford, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as the Debtors' counsel. James E. O'Neill, Esq., Laura Davis Jones, Esq., and Timothy P. Cairns, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, serve as the Debtors' co-counsel. Kurtzman Carson Consultants LLC serves as the Debtors' claims, notice and balloting agent. An official committee of unsecured creditors has been formed in this case. In its petition, Intermet Corp. listed assets of $50 million to $100 million and debts of $100 million to $500 million. This is the Debtors' second bankruptcy filing. Intermet Corp., along with its debtor-affiliates, filed for Chapter 11 protection on September 29, 2004 (Bankr. E.D. Mich. Case Nos. 04-67597 through 04-67614). Salvatore A. Barbatano, Esq., at Foley & Lardner LLP, represented the Debtors. In their previous bankruptcy filing, the Debtors listed $735,821,000 in total assets and $592,816,000 in total debts. Intermet Corporation emerged from its first bankruptcy filing in November 2005. ION MEDIA: Plan Supplement Fleshes Out Post-Ch. 11 Details ---------------------------------------------------------- According to Law360, Ion Media Networks Inc. has filed a supplement that fleshes out many of the details of its prepackaged Chapter 11 restructuring plan. 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. JOLT CO: May Close; Chapter 11 Case Dismissed --------------------------------------------- Matthew Daneman at Democrat and Chronicle reports that Jolt Co. Inc. sought for the dismissal of its Chapter 11 reorganization case, of which Bankruptcy Judge John C. Ninfo has agreed to. Jolt will likely close, after a contentious attempt at reorganizing fell apart earlier this week, Matthew Daneman at Democrat and Chronicle relates, citing the Company's lawyer, William I. Kohn, at Benesch, Friedlander, Coplan & Aronoff. "I don't see anybody buying the entire package," Democrat and Chronicle quoted Mr. Kohn as saying. Jolt CEO Robert Clamp said in court documents that the Company's woes revolved around a drop in the energy drink market and a fight with Rexam Beverage Can Co. of Chicago over an agreement to buy 90 million high-end resealable cans. Democrat and Chronicle relates that while Jolt was seeking approval to restructure and continue operations, Rexam Beverage and Jolt founder and former president Carl J. Rapp tried to block the move. Mr. Rapp claimed that Jolt had repositioned itself and its products to better compete but that investment firm Emigrant Capital Corp. racked up debt for Jolt and then maneuvered to take it over at a bargain price to the detriment of other creditors and shareholders, according to court documents. Mr. Rapp said in court documents that Emigrant Capital held "sham negotiations" with Rexam Beverage, which sought to convert Jolt's Chapter 11 reorganization case to Chapter 7 liquidation. Citing Mr. Kohn, Democrat and Chronicle relates that Jolt is likely to go into default, as it has only enough money to make payroll for a few more days. Jolt, doing business as Wet Planet Beverages, makes the caffeinated drink of the same name. The Company filed for Chapter 11 on Sept. 28 (Bankr. W.D. N.Y. Case No. 09-22531). The petition says Jolt had less than $10 million in both assets and debt. Rexam Beverage Can Co., of Chicago, was named as the largest unsecured creditors with a disputed claim of $2.1 million. KANSAS CITY SOUTHERN: Moody's Affirms Corp. Family Rating at B1 --------------------------------------------------------------- Moody's Investors Service has affirmed the ratings of Kansas City Southern, corporate family rating at B1, and Kansas City Southern de Mexico S.A. de C.V., corporate family rating at B2, and has changed the outlook for both companies to stable from negative. At the same time, Moody's affirmed the debt ratings of The Kansas City Southern Railway Company and Southern Capital Corporation and changed their outlooks to stable from negative. The ratings outlooks were stabilized in anticipation of moderate growth in demand from the deep cyclical trough experienced in 2009 by both KCSR, the U.S. railroad, and Mexican railroad KCSM. In Moody's view, this will result in moderately improved operating results that will allow both entities to restore financial metrics to levels commensurate with their respective ratings. While both the U.S. and Mexican railroads were beset by the extraordinarily weak volume levels that have impacted the entire North American railroad sector over the past year, it is becoming increasingly likely that freight volumes will stabilize over the next 12-15 months, with carloadings expected to grow slightly on a year-over- year basis starting in 2010 against much softer prior years comps. In addition, Moody's expects core pricing to grow at approximately 3-5% for KCSR and KCSM, as it likely will for the industry in general, through 2010, which supports adequate yield, return, and cash flow generation over the near term. As borne out by third quarter financial results, KCSR has been able to demonstrate flexibility in its cost structure in response to the weaker demand environment. Despite a 10% decrease in revenue year-over-year through September 2009, the company has been able to restore its operating ratio to under 80% over that period. In addition, the company has shown improvement in free cash flow generation that is expected to carry forward into 2010. This is important for KCSR in order to continue to improve the company's liquidity: KCSR carries only a modest cash balance, and has approximately $40 million outstanding on its $125 million credit facility as of October 28, 2009. Going forward, Moody's expects liquidity and profitability to improve with yield growth and volume stability, resulting in credit metrics appropriate for the B1 rating. Likewise, KCSM is showing signs of modest improvement in operating conditions, a trend that should continue into 2010, assuming a mild recovery in the U.S. and Mexican economies. Volume improvement is expected to recover a bit more sharply than at the U.S. railroad, but from a much lower level earlier in 2009. KCSM's operating results are also expected to improve modestly in 2010, although credit metrics are expected to lag those of KCSR for some time. Free cash flow, which had been considerably negative throughout the year as KCSM maintained required capital spending and provided about $100 million in dividends to the parent KCS (with $22 million subsequently returned to KCSM in the form of an inter-company loan), is expected to turn mildly positive over the near term. This will be a key factor for KCSM's ratings, as the maintenance of a substantial cash balance is important to offset the lack of access to a bank credit facility. KCSM cancelled its $81 million revolving credit facility on March 30, 2009. Nonetheless, the company operates a geographically attractive concession in northeast Mexico with good growth prospects, which will likely support the company's operating profile over the longer term. Neither KCSR nor KCSM guarantees the other's debt, nor are the obligations of KCSR and KCSM cross defaulted to each other. Therefore, Moody's provides separate corporate family ratings for both KCSM and KCS. The stable outlooks for both KCS and KCSM reflect Moody's expectations that the companies will see modest improvement in freight volumes over the next 12-18 months, mirroring expectations for a mild economic recovery in the U.S., which has a significant impact on both railroads. Under such a scenario, profitability at both entities will likely recover to levels that will result in credit metrics that are appropriate for their respective ratings. Ratings at KCS could face downward revision if operating conditions weaken to a point that KCSR's Debt/EBITDA exceeds 5.0 times, if EBIT/Interest approaches 1.5 times, or if deterioration in liquidity (either inadequate cash available to U.S. operations or insufficient availability under its revolving credit facility) becomes a constraint on the company's operating or investing activities. The upward ratings consideration at KCS would require Debt/EBITDA at KCSR of less than 3.5 times and EBIT/Interest in excess of 2.5 times over a prolonged period. Ratings could be lowered at KCSM if the company's free cash flow were to be substantially negative for a sustained period causing a substantial draw in the company's cash balances. KCSM's ratings could also be lowered if EBIT/Interest falls below 1.2 times or if Debt/EBITDA were to exceed 6 times. Ratings or their outlook could be positively impacted if Debt/EBITDA were to fall below 4.5 times and EBIT/Interest were to exceed 1.8 times, with operating ratios sustained below 80%. Because of KCSM's sizeable contribution to KCS's business (40% of the parent company's consolidated revenue), the ratings difference between KCSR and KCSM will not likely exceed the current one-notch differential. This suggests that KCSR's ratings could be negatively impacted by sustained deterioration in KCSM's operating performance, particularly if this would result in liquidity or re- financing difficulties at the Mexican operations that might require material support from the parent company. Outlook Actions: Issuer: Kansas City Southern -- Outlook, Changed To Stable From Negative Issuer: Kansas City Southern Railway Company (The) -- Outlook, Changed To Stable From Negative Issuer: Kansas City Southern de Mexico, S.A. de C.V. -- Outlook, Changed To Stable From Negative Issuer: Southern Capital Corporation -- Outlook, Changed To Stable From Negative The last rating action was on March 23, 2009 when ratings for KCSM were lowered, corporate family rating to B2, and the ratings outlook for both KCS and KCSM were changed to negative from stable. Kansas City Southern operates a Class I railway in the central U.S. and, through its wholly-owned subsidiary Kansas City Southern de Mexico, S.A. de C.V., owns the concession to operate Mexico's northeastern railroad. KINGWOOD LLC: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Kingwood, LLC PO Box 2230 Clayton, GA 30525 Case No.: 09-24559 Chapter 11 Petition Date: October 28, 2009 Court: United States Bankruptcy Court Northern District of Georgia (Gainesville) Judge: Robert Brizendine Debtor's Counsel: George M. Geeslin, Esq. Eight Piedmont Center, Suite 550 3525 Piedmont Road, N.E. Atlanta, GA 30305-1565 Tel: (404) 841-3464 Fax: (404) 816-1108 Email: geeslingm@aol.com Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $10,000,001 to $50,000,000 The petition was signed by David K. Williams, the company's vice presi. Debtor's List of 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Appalachian Surveying Trade Debt $13,774 Co., Inc. Berthe Jean Gunter Trade Debt $200,000 Community Capital Bank Trade Debt $85,417 Eagles Brooke Properties Trade Debt $20,000 GDI Environmental Services Trade Debt $12,800 Inc. Georgia Department of Labor $21,320 High Trust Bank Trade Debt $612,511 280 Country Club Dr., Ste 100 Stockbridge, GA 30281 John Robert Williams Trade Debt $369,873 1521 Berkeley Court Gainesville, GA 30501 Macon Bank Trade Debt $162,600 Marion Frank Menge, Jr. Trade Debt $350,000 Jewell Menge 13860 Allanton Road Panama City, FL 32404 Moore Bass Consulting, Inc. Trade Debt $19,738 Mountain Heritage Bank Trade Debt $229,798 Mountain Resort Builders Trade Debt $311,500 PO Box 308 Ellijay, GA 30540 Pronto Painting, Inc. Trade Debt $34,200 Rabun County Tax $76,520 United Community Bank Trade Debt $225,500 United Community Bank Trade Debt $3,040,337 635 Whitlock Ave. Marietta, GA 30064 United Community Bank Trade Debt $2,388,750 635 Whitlock Ave. Marietta, GA 30064 United Community Bank Trade Debt $1,936,875 635 Whitlock Ave. Marietta, GA 30064 US Small Business Trade Debt $19,924 LAND O'LAKES: S&P Affirms Corporate Credit Rating at 'BB+' ---------------------------------------------------------- Standard & Poor's Ratings Services said that it affirmed its 'BB+' corporate credit rating on Land O'Lakes Inc. The outlook is stable. At the same time, Standard & Poor's assigned issue-level and recovery ratings to Land O'Lakes Inc.'s $375 million revolving credit facility maturing in 2013 and three private placement note issues totaling $325 million ($155 million maturing in 2016, $85 million maturing in 2019, and $85 million maturing in 2021). The senior secured debt rating is 'BBB', two notches higher than the corporate credit rating. The recovery rating is '1', which indicates its expectation for very high (90%-100%) recovery of principal and pre-petition interest in the event of a payment default. The new revolving credit facility replaces the company's existing $400 million revolving credit facility and S&P withdrew the 'BBB' senior secured and '1' recovery ratings on this facility. S&P expects the $325 million of private placement notes will be funded on Dec. 15, 2009, and will repay the existing $149.7 million of 9% senior secured notes maturing in 2010 (issue is rated 'BBB' with a '1' recovery rating) and $174 million of 8.75% senior unsecured notes maturing in 2011 (issue is rated 'BB+' with a '3' recovery rating). S&P will withdraw the ratings on these notes when they are redeemed. Approximately $965 million of debt was outstanding as of June 30, 2009. "The rating on Land O'Lakes Inc. reflects the inherent cyclical nature and seasonality of many of the cooperative's agricultural- based businesses and low margins," said Standard & Poor's credit analyst Pat Jeffrey. The strength of many of the cooperative's brands, diverse product line, geographic coverage, its modest near-term debt maturities, and an experienced management team somewhat mitigate these factors. Land O'Lakes is a national, farmer-owned dairy and agricultural marketing and supply cooperative. The dairy segment produces and markets products under the strong Land O'Lakes and Alpine Lace brands, as well as under regional brands. Agricultural products consist of seed, animal feed, and an extensive line of agricultural supplies and services to farmers and local cooperatives. In addition, Land O'Lakes owns Purina Mills, which is part of Land O'Lakes Purina Feed LLC. This operation has the leading market position in the fragmented, but consolidating, U.S. animal feed industry, as well as a portfolio of national (Land O'Lakes and Purina Mills brands), regional, and local brands, and broad geographic coverage. The addition of the crop protection products wholesale business from the agronomy joint venture, Agriliance LLC, fits within the cooperative's strategic focus on value-added businesses and should allow Land O'Lakes to better leverage the expertise of the seed and crop protection businesses. However, this business is highly seasonal and results in significant swings in working capital and increases in short-term debt in the first and third quarters, which then declines in the second and fourth quarters. Land O'Lakes has faced a difficult operating environment since the fourth quarter in fiscal 2008 as commodity prices declined significantly and demand has weakened. These factors contributed to unrealized hedging losses of $52 million in the fourth quarter of fiscal 2008. However, Standard & Poor's believes that due to the cooperative's improved financial profile, it can withstand the seasonality and volatility in its agricultural-based operating segments. Although some of the issues Land O'Lakes faces are beyond its immediate control and reflect the vagaries of the agricultural sector, S&P expects that the cooperative will continue to rationalize its operations, reduce operating expenses to help mitigate margin pressure, and exit unprofitable business lines. The stable outlook reflects Standard & Poor's expectations that Land O'Lakes will maintain its market positions and continue to pursue its current growth strategy. S&P believes the company's planned debt issuance will enhance liquidity by extending near- term debt maturities. S&P expects the company will continue to strive for, on average, credit protection measures of total debt to EBITDA of less than 3x and FFO to total debt of greater than 25%, to offset the low margins of many of its businesses. S&P could revise the outlook to negative if agricultural-based operating conditions deteriorate, resulting in average total debt to EBITDA exceeding 3.5x, and average FFO to total debt approaches 20%. S&P could revise the outlook to positive if Land O'Lakes maintains a financial risk profile, including credit protection measures, that are much stronger than the rating category, as well as successfully weathers the inherent sector volatility. LEHMAN BROTHERS: Asks to Restructure Real Estate Loan Terms ----------------------------------------------------------- According to Law360, the collapse of the nation's housing market hasn't done much good for Lehman Brothers Holdings Inc., which is asking a federal bankruptcy court to sign off on a bid to restructure the loan terms on its faltering real estate portfolio. Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy September 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition listed $639 billion in assets and $613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for $2 dollars plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on September 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on September 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) MADISONVILLE STATE BANK: Closed; U.S. Bank Assumes All Deposits --------------------------------------------------------------- The Federal Deposit Insurance Corporation entered into a purchase and assumption agreement with U.S. Bank, NA, of Minneapolis, Minnesota, a wholly-owned subsidiary of U.S. Bancorp, to assume all of the deposits and essentially all of the assets of nine failed banks. The nine banks were closed October 30 by federal and state bank regulators, which appointed the FDIC as receiver. The nine banks involved in the transaction are: Bank USA, National Association, Phoenix, Arizona; California National Bank, Los Angeles, California; San Diego National Bank, San Diego, California; Pacific National Bank, San Francisco, California; Park National Bank, Chicago, Illinois; Community Bank of Lemont, Lemont, Illinois; North Houston Bank, Houston, Texas; Madisonville State Bank, Madisonville, Texas; and Citizens National Bank, Teague, Texas. As of September 30, 2009, the banks had combined assets of $19.4 billion and deposits of $15.4 billion. The nine banks had 153 offices, which will reopen as branches of U.S. Bank beginning tomorrow during their normal business hours. Depositors of the nine banks will automatically become depositors of U.S. Bank. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship to retain their deposit insurance coverage. Customers should continue to use their existing branches until U.S. Bank can fully integrate the deposit records of the nine failed banks. The FDIC and U.S. Bank entered into a loss-share transaction on approximately $14.4 billion of the combined purchased assets of $18.2 billion. U.S. Bank will share in the losses on the asset pools covered under the loss-share agreement. The loss-sharing arrangement is projected to maximize returns on the assets covered by keeping them in the private sector. The agreement also is expected to minimize disruptions for loan customers. For more information on loss share, please visit: http://www.fdic.gov/bank/individual/failed/lossshare/index.html Customers who have questions about the transaction can contact the FDIC as follows: Failed Bank (a) Bank USA, National Association 1-800-913-3062 http://www.fdic.gov/bank/individual/failed/bankusa-az.html (b) California National Bank 1-800-913-5861 http://www.fdic.gov/bank/individual/failed/calnational.html (c) San Diego National Bank 1-800-517-1839 http://www.fdic.gov/bank/individual/failed/sandiegonational.html (d) Pacific National Bank 1-800-508-8289 http://www.fdic.gov/bank/individual/failed/pacificnational-ca.html (e) Park National Bank 1-800-450-5668 http://www.fdic.gov/bank/individual/failed/park-il.html (f) Community Bank of Lemont 1-800-528-6357 http://www.fdic.gov/bank/individual/failed/community-lemont.html (g) North Houston Bank 1-800-501-1872 http://www.fdic.gov/bank/individual/failed/northhouston-tx.html (h) Madisonville State Bank 1-800-913-3053 http://www.fdic.gov/bank/individual/failed/madisonville-tx.html (i) Citizens National Bank 1-800-517-1843 http://www.fdic.gov/bank/individual/failed/citizens-teague.html The nine banks were subsidiaries of FBOP Corporation, Oak Park, Illinois. FBOP Corporation was not closed and was not subject to the October 30 actions. FBOP is run by Michael Kelly, who from his base in the Chicago suburbs snapped up banks in San Diego, Los Angeles, Houston, and San Francisco. He started in 1990 with First Bank of Oak Park, which had $125 million in assets. The FDIC's Board of Directors issued notices of assessment of cross guaranty liability against Park National Bank and Citizens National Bank. Under statutory authority, the FDIC may assess affiliated banks for losses incurred by the Deposit Insurance Fund (DIF) from the failure of other banks, such as those owned by FBOP Corporation. Congress granted the FDIC authority in 1989 to reduce the cost to the DIF for the resolution of affiliated institutions owned by the same company. The two banks were unable to pay the amounts assessed and were closed by their chartering authorities. The FDIC estimates that the cost of the nine banks to the DIF will be a combined $2.5 billion. U.S. Bank's acquisition of all the deposits was the "least costly" resolution for the FDIC's DIF compared to alternatives. The failure of the nine banks brings the nation's total number this year to 115. By number, banks in Georgia account for one-fifth of all U.S. banks closing this year, with 20 failures, followed by Illinois with 19, California with 13, and Florida with nine. MAMMOTH SAN JUAN: Taps Corcovelos Law as Gen. Bankruptcy Counsel ---------------------------------------------------------------- Mammoth San Juan Capistrano I, LLC, asks the U.S. Bankruptcy Court for the Central District of California for permission to employ the Corcovelos Law Group as general bankruptcy counsel. The firm will, among other things: -- advise the Debtor on the requirements of the Bankruptcy Code, the Federal Rules of Bankruptcy Procedure, the Local Bankruptcy Rules, and the requirements of the U.S. Trustee pertaining to the administration of the Debtor's estate; -- prepare motions, applications, answers, orders, memoranda, reports, and papers, etc., in connection with the administration of the estate; and -- protect and preserve the estate by prosecuting and defending actions commenced by or against the Debtor and analyzing, and preparing necessary objections to, proofs of claim filed against the estate. Thomas Corcovelos, Esq., a director of the firm, tells the Court that the firm received a $25,000 retainer against future fees and expenses. The source of the retainer payments was the Debtor. The hourly rates of the firm's personnel are: Mr. Corcovelos $400 Bahar Geslin $300 Paralegals $200 Mr. Corcovelos assures the Court that the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Mr. Corcovelos can be reached at: Corcovelos Law Group 1001 Sixth St., Suite 150 Manhattan Beach, CA 90266 About Mammoth San Juan Capistrano San Juan Capistrano, California-based Mammoth San Juan Capistrano I LLC operates a real estate business. The Company filed for Chapter 11 on July 8, 2009 (Bankr. C. D. Calif. Case No. 09-16836). Thomas Corcovelos, Esq., at Corcovelos Law Group represents the Debtor in its restructuring efforts. The Debtor listed between $10 million and $50 million each in assets and debts. MAX & ERMA'S: Closes Short Pump Location at John Rolfe ------------------------------------------------------ Max & Erma's Short Pump Location in the John Rolfe Commons shopping center is now closed, Trevor Dickerson at Downtown Short Pump reports, citing on of its readers, Aaron Lee. According to Downtown Short Pump, a sign on the center's door says that the location could possibly reopen once the John Rolfe Parkway road project is cut through. Downtown Short Pump relates that the delayed project has hurt businesses in the shopping center. Max & Erma's owns a chain of 106 restaurants around Pittsburgh. The restaurants are mainly in Pennsylvania, Ohio, and Michigan, with a few in Chicago, Washington, Atlanta, and Kentucky. About 79 are company-owned and operated, while 27 belong to franchisees. Max & Erma's is owned by G&R Acquisitions, North Side. The chain started operating in 1972, taking the Max & Erma's name from two owners of a bar. METCALF PAVING: Files for Chapter 11 Bankruptcy Protection ---------------------------------------------------------- The Metcalf Paving Co. Inc. has filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the District of Connecticut, listing $1 million to $10 million in assets against $1 million to $10 million in debts owed to 100 to 199 creditors. Court documents say that The Metcalf Paving owes: -- $1.4 million to Tilcon CT Inc., -- $216,901 to A.E.N. Asphalt Inc., -- $144,249.73 to H.I. Stone & Son Inc., and -- $17,521.34 in unpaid taxes. David Krechevsky at Republican-American relates that the Tax Collector's office said that with interest the amount is now $18,314.50. According to Republican-American, The Metcalf Paving owes: -- $5,476 in motor vehicle taxes for 2007 and 2008; -- $5,415 in property taxes and interest on the 2007 grand list that were due on January 9; and -- $7,424 in property taxes and interest on the 2008 grand list, which the Company didn't pay despite being granted an extension to August 1. Ira B. Charmoy, Esq., at Zeldes, Needle & Cooper, assists The Metcalf Paving in its restructuring efforts. The Metcalf Paving Co. Inc. is a paving and asphalt milling company based in the Pines Bridge Industrial Park. Metcalf Paving is a family-owned company that started in Southbury before moving to 65 Lancaster Drive in the industrial park. METROPCS WIRELESS: Bank Debt Trades at 6% Off in Secondary Market ----------------------------------------------------------------- Participations in a syndicated loan under which MetroPCS Communications, Inc., is a borrower traded in the secondary market at 94.03 cents-on-the-dollar during the week ended Oct. 30, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents a drop of 0.80 percentage points from the previous week, The Journal relates. The loan matures on Oct. 11, 2013. The Company pays 225 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's Ba3 rating and Standard & Poor's BB- rating. The debt is one of the biggest gainers and losers among widely quoted syndicated loans in secondary trading in the week ended Oct. 30, among the 161 loans with five or more bids. MetroPCS Communications, Inc., is a wireless communications provider that offers wireless broadband mobile services under the MetroPCS brand in selected metropolitan areas in the United States over its own licensed networks or networks of entities, in which the Company holds a substantial non-controlling ownership interest. The Company provides an array of wireless communications services to its subscribers on a no long-term contract, paid-in-advance, flat-rate, unlimited usage basis. As of Dec. 31, 2008, it had approximately 5.4 million subscribers in eight states. MetroPCs carries 'B' issuer credit ratings from Standard & Poor's. NEIMAN MARCUS: Bank Debt Trades at 14.57% Off in Secondary Market ----------------------------------------------------------------- Participations in a syndicated loan under which Neiman Marcus Group, Inc., is a borrower traded in the secondary market at 85.43 cents-on-the-dollar during the week ended Oct. 30, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents a drop of 0.88 percentage points from the previous week, The Journal relates. The loan matures on April 6, 2013. The Company pays 200 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's B3 rating and Standard & Poor's BB- rating. The debt is one of the biggest gainers and losers among widely quoted syndicated loans in secondary trading in the week ended Oct. 30, among the 161 loans with five or more bids. Neiman Marcus Group, Inc., headquartered in Dallas, Texas, operates 40 Neiman Marcus stores, 2 Bergdorf Goodman stores, 27 clearance centers, and a direct business. Total revenues are about $3.9 billion. The Company carries a 'Caa1' Corporate Family Rating and 'Caa1' Probability of Default Rating from Moody's Investors Service. MIDWAY GAMES: Wants Excl. Plan Filing Extended until December 29 ---------------------------------------------------------------- Midway Games Inc. and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Delaware to extend the exclusive period to file a Chapter 11 plan and to solicit acceptances of the plan until Dec. 29, 2009, and Feb. 28, 2009. This is the Debtors' forth motion to extend its exclusive periods. The Debtors relate that they are in discussion regarding matters in connection with the formulation of a Chapter 11 Plan. The Debtors add that they need to dealt with issues on the appropriate allocation of the sale proceeds and the level of funds expected to be available for distribution to unsecured creditors. Headquartered in Chicago, Illinois, Midway Games Inc. (OTC Pink Sheets: MWYGQ) -- http://www.midway.com/-- was a leading developer and publisher of interactive entertainment software for major videogame systems and personal computers. The Company and nine of its affiliates filed for Chapter 11 protection on February 12, 2009 (Bankr. D. Del. Lead Case No. 09-10465). Michael D. DeBaecke, Esq., Jason W. Staib, Esq, and Victoria A. Guilfoyle, Esq., at Blank Rome LLP, in Wilmington, Delaware; and Marc E. Richards, Esq., and Pamela E. Flaherty, Esq., at Blank Rome LLP, in New York, represent the Debtors in their restructuring efforts. Attorneys at Milbank, Tweed, Hadley & McCloy LLP and Richards, Layton & Finger, P.A. represent the official committee of unsecured creditors as counsel. Epiq Bankruptcy Solutions, LLC, is the Debtors' claims, noticing, and balloting agent. On July 10, 2009, Midway and certain of its U.S. subsidiaries completed the sale of substantially all of their assets to Warner Bros. Entertainment Inc. in a sale approved by the Court. The aggregate gross purchase price is roughly $49 million, including the assumption of certain liabilities. Midway is disposing of its remaining assets. At June 30, 2009, the Debtors had $1.39 billion in total assets and $1.59 billion in total liabilities. A full-text copy of the Debtors' monthly operating report for the month ended June 30, is available at http://researcharchives.com/t/s?41c1 MONTGOMERY REALTY: Meeting of Creditors Continued on November 3 --------------------------------------------------------------- The U.S. Trustee for Region 16 will continue the meeting of creditors in Montgomery Realty Group, Inc.'s Chapter 11 case on Nov. 3, 2009, at 4:00 p.m. at the San Francisco U.S. Trustee Office. As reported in the Troubled Company Reporter on July 23, 2009, the first meeting of creditors in Montgomery Realty Group, Inc.'s bankruptcy case was held on Aug. 11, 2009. Based in San Francisco, Montgomery Realty Group, Inc. filed for Chapter 11 relief on July 6, 2009 (Bankr. C.D. Calif. Case No. 09-31879. Montgomery leases and operates improved properties. Michael St. James, Esq., at St. James Law, represents the Debtor as counsel. When the Debtor filed for protection from its creditors, it listed total assets of between $10 million and $50 million each in assets and debts. MORTGAGE GUARANTY: Fitch Cuts Insurer Strength Rating to 'BB-' -------------------------------------------------------------- Fitch Ratings has downgraded Mortgage Guaranty Insurance Corp.'s Insurer Financial Strength rating to 'BB-' from 'BBB-'. Fitch has simultaneously downgraded MGIC Investment Corp.'s long-term issuer rating to 'B-' from 'B', and its senior notes to 'B-' from 'B'. All of the affected ratings have been removed from Rating Watch Negative. The IFS and long-term issuer ratings have been assigned Negative Rating Outlooks. The downgrades are driven primarily by Fitch's concern regarding capital adequacy, business continuity and holding company liquidity. MGIC's third quarter 2009 (3Q'09) results included a significant increase in the delinquency of full documentation prime mortgages which resulted in higher losses incurred at the operating company level. The ability of the operating company to continue to write new business remains uncertain, although recent developments indicate progress on that front. The holding company continues to face near to medium term liquidity demands with the maturity of its September 2011 senior notes and longer term liquidity demands with respect to its November 2015 senior notes. Capital adequacy is a particular area of concern with higher loss ratios negatively impacting earnings and capital. The 3Q'09 loss ratio rose to 331% from 222% in 2Q'09, partly driven by a premium adjustment for rescissions. After a period of flat to declining new default notices related to prime loans, new prime full documentation loan default notices increased in 3Q'09, mirroring the difficult macro economic and employment climate. This implies that losses (and resultant capital erosion) are unlikely to abate in the near term, as unemployment is anticipated by many analysts, including Fitch's economic team, to increase through mid 2010. Business continuity exhibits a more mixed outlook. MGIC's restructuring initiative still needs regulatory approval from state regulators and consent from one of the GSEs, with the consent of one GSE already received. Fitch believes these approvals and consents will likely be forthcoming. Fitch views the reduction in proposed downstreaming of capital to MGIC Indemnity Corp., from an initial $500 million (announced in July) to the $200 million, with no additional planned amounts, as less detrimental to existing policyholders, given the subordination of their claim on downstreamed capital for payment of losses. Earnings from new business are expected to be at high profit margins but due to lower volumes, not expected to generate a sufficient offset against rising reserve requirements. The Outlook will remain Negative until the rate of mortgage delinquencies mortgages exhibits sustained stabilization or decline, and an appropriate level of reserves can be determined. Losses will also be impacted by the ultimate level of rescissions and any benefit from the Home Affordability Modification Program (HAMP). Fitch notes that rescission activity is likely to be lower with respect to full documentation prime mortgage delinquencies, but that HAMP may provide some ultimate loss mitigation for this product. Holding company liquidity remains challenged due to ongoing losses and limited ability to upstream dividends. As of Oct. 14, 2009, MGIC IC had approximately $97 million in short-term investments, the majority of which was in cash. The remaining par of senior notes due September 2011 was approximately $86 million, with approximate interest cost on all of the remaining senior notes (both 2011 and 2015 maturities) of approximately $21 million per annum, or $41 million through September 2011, implying a cash shortfall at maturity of ($30) million before any dividends to the holding company. As part of MGIC's restructuring initiative, Fannie Mae has consented to a $100 million dividend from MGIC to MGIC IC to be used for debt servicing needs, which, if approved by MGIC's regulator, should help to alleviate near term liquidity constraints. Longer term, Fitch expects continued holding company liquidity pressure with respect to servicing the November 2015 senior notes. While any dividend places policyholders at a disadvantage relative to holding company bondholders, Fitch would view a holding company bankruptcy as a negative to policyholders, in that run off of the operating companies would be more likely to occur. The continued ability of MGIC and its wholly owned subsidiaries to write new business under tighter guidelines could be capital accretive and beneficial to policyholders in the longer term. Fitch has downgraded these ratings, removed them from Rating Watch Negative, and assigned a Negative Outlook: Mortgage Guaranty Insurance Corp. -- IFS to 'BB-' from 'BBB-', removed from Rating Watch Negative and assigned a Negative Outlook. MGIC Investment Corp. -- Long-term Issuer rating to 'B-' from 'B', removed from Rating Watch Negative and assigned a Negative Outlook. Fitch has downgraded these debt ratings and removed them from Rating Watch Negative: -- $200 million 5.625% senior notes due Sept. 15, 2011, to 'B-' from 'B', removed from Rating Watch Negative; -- $300 million 5.375% senior notes due Nov. 1, 2015, to 'B-' from 'B', removed from Rating Watch Negative. This rating remains unaffected: MGIC Investment Corp. -- $390 million 9% convertible junior subordinated debentures due 2063 'C'. NETFLIX INC: Moody's Assigns Corporate Family Rating at 'Ba2' ------------------------------------------------------------- In a press release dated October 28, 2009, Moody's incorrectly stated that pro forma leverage for the twelve months ended September 30, 2009, was 1.9x. Pro forma leverage for the twelve month period ended September 30, 2009, was 1.4x. The corrected text follows. Moody's Investors Service assigned a Ba2 Corporate Family Rating and Ba1 Probability-of-Default Rating to Netflix, Inc. Additionally, Moody's assigned a Ba2 rating to Netflix's proposed $200 million issuance of senior unsecured notes and an SGL-1 speculative grade liquidity rating. Proceeds from the new note issuance will be used to repurchase stock, repay outstanding borrowings under the company's $100 million revolving credit facility, fund fees and expenses and for general corporate purposes. The one notch differential between Nexflix's CFR and PDR reflects the company's all bond debt structure (assuming the termination of its revolving credit facility upon completion of the note issuance), and the higher associated loss given default expectation and lower probability of default relative to other Ba2-rated companies consistent with Moody's LGD Methodology. The rating outlook is stable. Netflix's Ba2 CFR reflects the company's position as the largest online movie rental subscription service in the U.S., low pro forma debt-to-EBITDA leverage of 1.4x for the trailing twelve months ended September 30, 2009 and Moody's expectation that leverage will be sustained at or below a relatively moderate 2.5x (including Moody's standard adjustments) level going forward. The rating also reflects the benefits the company garners from its significant level of cash and short-term investments (approximately $156 million as of September 30, 2009), its strong subscriber growth, positive yet modest free cash flow generation, meaningful scale and hybrid physical and digital service offering. Moody's also notably expects that the major motion picture studios will preserve the DVD business over the intermediate term, and that adoption and mass migration of consumers to new forms of distribution such as streaming will be beyond the next five years. However, the CFR also reflects the risks associated with the company's relatively young history, business concentration, low barriers to entry and the potential for disintermediation from alternative forms of content delivery as technology evolves over the longer-term. The rating is also impacted by the substantial level of competition in the distribution of content, the company's predisposition for share repurchases, relatively low EBITDA margins compared to traditional media, and significant subscriber churn. The company's SGL-1 speculative grade liquidity rating reflects Moody's expectation that a solid liquidity profile will be maintained over the next twelve months, and further assumes the termination of its $100 million revolving credit facility upon completion of the proposed note issuance. Ratings / assessments assigned: Netflix, Inc. * Corporate family rating -- Ba2 * Probability-of-default rating -- Ba1 * Senior unsecured notes -- Ba2 (LGD 5, 74%) * Speculative grade liquidity rating -- SGL-1 The rating outlook is stable. This is the first time Moody's has assigned ratings to Netflix. Netflix's ratings were assigned by evaluating factors that Moody's considers relevant to the credit profile of the issuer, such as the company's (i) business risk and competitive position compared with others within the industry; (iii) capital structure and financial risk; (iii) projected performance over the near to intermediate term; and (iv) management's track record and tolerance for risk. Moody's compared these attributes against other issuers both within and outside Netflix's core industry and believes Netflix's ratings are comparable to those of other issuers with similar credit risk. Netflix, Inc., with its headquarters in Los Gatos, California, is the largest online movie rental subscription service in the United States with annual revenues of approximately $1.6 billion. NEW MEXICO HOSPITAL: Fitch Lifts Rating on $7.15 Mil. Bonds to BB- ------------------------------------------------------------------ Fitch Ratings has upgraded the rating on approximately $7.15 million of New Mexico Hospital Equipment Loan Council hospital facility refunding and improvement revenue bonds (Rehoboth McKinley Christian Hospital Project), series 2007A, to 'BB-' from 'B'. The Rating Outlook is Stable. The upgrade is based on Rehoboth McKinley Christian Hospital's sustained improvement in operating performance which has led to a significantly improved liquidity position. Additional credit strengths include a dominant market share and Medicare designated sole community provider status, strong debt service coverage, and improved management practices over the last few years. RMCH was able to reduce its days in accounts receivable from 55 days in fiscal 2008 to 40.5 days in fiscal 2009 (ended Aug. 31), which largely led to the significant improvement in the unrestricted cash and investments figure of $8.7 million from $2.9 million a year earlier. This increase improves days cash on hand to 55 days, the cushion ratio to 4.7 times (x), and cash to debt to 122.1%, all of which compare well to the below investment grade medians of 60 days, 3.6x, and 40.2%. Additionally, RMCH posted its fourth consecutive year of positive operating results, with an operating profit of $1.49 million for unaudited fiscal 2009 (2.2% operating margin). Part of this improvement can be attributed to the sale of the dialysis unit which netted approximately $1.5 million in proceeds which are to be spent on capital plant enhancements. The dialysis unit accounted for approximately $7.5 million of net revenues but had consistently posted negative operating results and carried sizable expenses which dragged down overall profitability. Lending credit strength is RMCH's position as the dominant provider of inpatient acute health services, garnering a 73% share (most recent available figures). RMCH has no real competitive threat as the next closest non-Indian Health Services hospitals are located 55 miles and 63 miles away, both of which have fewer than 50 beds. Given their location, RMCH has earned the SCP designation which generated $7.7 million in extra income for fiscal 2009 (including supplemental SCP funds from the in-state matching program), up from $6.5 million in fiscal 2008. Further, maximum annual debt service coverage by EBITDA was 2.6x for unaudited 2009, on MADS of $1.86 million (including capital leases). The strong coverage is also reflective of the light debt burden as measured by debt to EBITDA of 1.5x (below IG median is 4x) and MADS as a percent of revenue of 1.9% (median of 3.1%). MADS declines to $1.28 million in fiscal 2010 and to just over $750,000 in fiscal 2011. Lastly, management has shown a commitment to operating sustainability, improving the revenue cycle process, and improving patient quality and satisfaction. Primary credit concerns for RMCH include its small revenue size and a high reliance on governmental payors (including supplemental funds); specifically the uncertainty surrounding the reserving policy related to its Medicaid claims. RMCH's small revenue size leaves it vulnerable to operating volatility as relatively small changes in utilization, revenues, or expenses can have a significant impact on profitability. Recent results suggest that current management practices have sufficiently matched expenses to revenues, which Fitch expects to continue over the near to medium term. RMCH has outstanding Medicaid cost reports dating back several years with a combined liability reserved at approximately $7.3 million. Although recent experience has shown favorable adjustments to RMCH once these cost reports are closed, the risk of unfavorable adjustments remains and presents downside risk if these liabilities were immediately due in full. Further, the reliance on supplemental funds from in-state matching programs exposes RMCH to additional reimbursement risk, although to date it has not been an issue. The Stable Outlook is based on Fitch's belief that RMCH will continue to produce positive operating results supported by the improved management practices. Fitch expects liquidity to be maintained over the near term as there are no major capital projects planned. Additionally, management noted it plans to use the dialysis proceeds over the next two years for regular upkeep and improvements of its equipment and plant. Fitch expects the audit to be released in early January 2010 and upon review, will update the market accordingly if necessary. Rehoboth McKinley Christian Hospital is a 69-bed acute care hospital located in Gallup, NM. It is approximately 138 miles east of Albuquerque, NM, and 180 miles west of Flagstaff, AZ. Total revenues for the unaudited year ending Aug. 31, 2009, were approximately $67.8 million. NORTH HOUSTON BANK: Closed; U.S. Bank Assumes All Deposits ---------------------------------------------------------- The Federal Deposit Insurance Corporation entered into a purchase and assumption agreement with U.S. Bank, NA, of Minneapolis, Minnesota, a wholly-owned subsidiary of U.S. Bancorp, to assume all of the deposits and essentially all of the assets of nine failed banks. The nine banks were closed October 30 by federal and state bank regulators, which appointed the FDIC as receiver. The nine banks involved in the transaction are: Bank USA, National Association, Phoenix, Arizona; California National Bank, Los Angeles, California; San Diego National Bank, San Diego, California; Pacific National Bank, San Francisco, California; Park National Bank, Chicago, Illinois; Community Bank of Lemont, Lemont, Illinois; North Houston Bank, Houston, Texas; Madisonville State Bank, Madisonville, Texas; and Citizens National Bank, Teague, Texas. As of September 30, 2009, the banks had combined assets of $19.4 billion and deposits of $15.4 billion. The nine banks had 153 offices, which will reopen as branches of U.S. Bank beginning tomorrow during their normal business hours. Depositors of the nine banks will automatically become depositors of U.S. Bank. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship to retain their deposit insurance coverage. Customers should continue to use their existing branches until U.S. Bank can fully integrate the deposit records of the nine failed banks. The FDIC and U.S. Bank entered into a loss-share transaction on approximately $14.4 billion of the combined purchased assets of $18.2 billion. U.S. Bank will share in the losses on the asset pools covered under the loss-share agreement. The loss-sharing arrangement is projected to maximize returns on the assets covered by keeping them in the private sector. The agreement also is expected to minimize disruptions for loan customers. For more information on loss share, please visit: http://www.fdic.gov/bank/individual/failed/lossshare/index.html Customers who have questions about the transaction can contact the FDIC as follows: Failed Bank (a) Bank USA, National Association 1-800-913-3062 http://www.fdic.gov/bank/individual/failed/bankusa-az.html (b) California National Bank 1-800-913-5861 http://www.fdic.gov/bank/individual/failed/calnational.html (c) San Diego National Bank 1-800-517-1839 http://www.fdic.gov/bank/individual/failed/sandiegonational.html (d) Pacific National Bank 1-800-508-8289 http://www.fdic.gov/bank/individual/failed/pacificnational-ca.html (e) Park National Bank 1-800-450-5668 http://www.fdic.gov/bank/individual/failed/park-il.html (f) Community Bank of Lemont 1-800-528-6357 http://www.fdic.gov/bank/individual/failed/community-lemont.html (g) North Houston Bank 1-800-501-1872 http://www.fdic.gov/bank/individual/failed/northhouston-tx.html (h) Madisonville State Bank 1-800-913-3053 http://www.fdic.gov/bank/individual/failed/madisonville-tx.html (i) Citizens National Bank 1-800-517-1843 http://www.fdic.gov/bank/individual/failed/citizens-teague.html The nine banks were subsidiaries of FBOP Corporation, Oak Park, Illinois. FBOP Corporation was not closed and was not subject to the October 30 actions. FBOP is run by Michael Kelly, who from his base in the Chicago suburbs snapped up banks in San Diego, Los Angeles, Houston, and San Francisco. He started in 1990 with First Bank of Oak Park, which had $125 million in assets. The FDIC's Board of Directors issued notices of assessment of cross guaranty liability against Park National Bank and Citizens National Bank. Under statutory authority, the FDIC may assess affiliated banks for losses incurred by the Deposit Insurance Fund (DIF) from the failure of other banks, such as those owned by FBOP Corporation. Congress granted the FDIC authority in 1989 to reduce the cost to the DIF for the resolution of affiliated institutions owned by the same company. The two banks were unable to pay the amounts assessed and were closed by their chartering authorities. The FDIC estimates that the cost of the nine banks to the DIF will be a combined $2.5 billion. U.S. Bank's acquisition of all the deposits was the "least costly" resolution for the FDIC's DIF compared to alternatives. The failure of the nine banks brings the nation's total number this year to 115. By number, banks in Georgia account for one-fifth of all U.S. banks closing this year, with 20 failures, followed by Illinois with 19, California with 13, and Florida with nine. NOVELIS INC: Bank Debt Trades at 10.26% Off in Secondary Market --------------------------------------------------------------- Participations in a syndicated loan under which Novelis, Inc., is a borrower traded in the secondary market at 89.74 cents-on-the- dollar during the week ended Oct. 30, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents a drop of 0.67 percentage points from the previous week, The Journal relates. The loan matures on July 6, 2014. The Company pays 200 basis points above LIBOR to borrow under the facility. The bank debt is not rated by Moody's while it carries Standard & Poor's BB- rating. The debt is one of the biggest gainers and losers among widely quoted syndicated loans in secondary trading in the week ended Oct. 30, among the 161 loans with five or more bids. As stated by the Troubled Company Reporter on Aug. 7, 2009, Standard & Poor's Ratings Services assigned its 'B-' debt rating to Novelis, Inc.'s proposed US$185 million senior unsecured notes due 2015. At the same time, S&P assigned a recovery rating of '6' to the notes, indicating S&P's expectation of negligible (0%-10%) recovery in a default scenario. The TCR also said that Moody's Investors Service affirmed Novelis, Inc's B2 corporate family rating, B2 probability of default rating, and the Ba3 rating on the senior secured revolver and term loan, as well as the Ba3 rating on Novelis Corporation's senior secured term loan. At the same time, Moody's downgraded the rating on the 7.25% senior notes to Caa1 from B3 and assigned a Caa1 rating to Novelis Inc's new note issue maturing Feb. 15, 2015. The rating outlook is negative. Moody's last rating action on Novelis was January 30, 2009 when the company's ratings were downgraded (corporate family rating to B2 from B1) Headquartered in Atlanta, Georgia, Novelis is the world's largest producer of aluminum rolled products. For the fiscal year ended March 31, 2009, the company had total shipments of approximately 2,943 kilotonnes and generated $10.2 billion in revenues. PACIFIC ENERGY: Wants Ch. 11 Plan Filing Extended Until March 4 --------------------------------------------------------------- Pacific Energy Resources Ltd. and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Delaware to extend the exclusive periods to file a Chapter 11 Plan and to solicit acceptances of the plan until March 4, 2010, and May 4, 2010. This is the second request of the Debtors for an extension of the exclusive periods. The Debtors relate that they needed more time to resolve various pending matters, continue to gather information and to negotiate a consensual liquidating plan with the creditors. Headquartered in Long Beach, California, Pacific Energy Resources Ltd. -- http://www.pacenergy.com/-- engages in the acquisition and development of oil and gas properties, primarily in the United States. The Company and seven of its affiliates filed for Chapter 11 protection on March 8, 2009 (Bankr. D. Del. Lead Case No. 09-10785). Attorneys at Pachulski Stang Ziehl & Jones LLP, represent the Debtors as counsel. The Debtors proposed Rutan & Tucker LLP as special corporation and litigation counsel; Schully, Roberts, Slattery & Marino, PLC, as special oil and gas and transactional counsel; Devlin Jensen as special Canadian counsel; Scott W. Winn, at Zolfo Cooper Management, LLC, as chief restructuring officer; Lazard Freres & Co. LLC as investment banker; and Albrecht & Associates, Inc., as agent for the Debtors in the sale of their oil and gas properties. Omni Management Group, LLC, is the claims, balloting, notice and administrative agent for the Debtors. When the Debtors filed for protection from their creditors, they listed between $100 million and $500 million each in assets and debts. PACIFIC NATIONAL BANK: Closed; U.S. Bank Assumes All Deposits ------------------------------------------------------------- The Federal Deposit Insurance Corporation entered into a purchase and assumption agreement with U.S. Bank, NA, of Minneapolis, Minnesota, a wholly-owned subsidiary of U.S. Bancorp, to assume all of the deposits and essentially all of the assets of nine failed banks. The nine banks were closed October 30 by federal and state bank regulators, which appointed the FDIC as receiver. The nine banks involved in the transaction are: Bank USA, National Association, Phoenix, Arizona; California National Bank, Los Angeles, California; San Diego National Bank, San Diego, California; Pacific National Bank, San Francisco, California; Park National Bank, Chicago, Illinois; Community Bank of Lemont, Lemont, Illinois; North Houston Bank, Houston, Texas; Madisonville State Bank, Madisonville, Texas; and Citizens National Bank, Teague, Texas. As of September 30, 2009, the banks had combined assets of $19.4 billion and deposits of $15.4 billion. The nine banks had 153 offices, which will reopen as branches of U.S. Bank beginning tomorrow during their normal business hours. Depositors of the nine banks will automatically become depositors of U.S. Bank. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship to retain their deposit insurance coverage. Customers should continue to use their existing branches until U.S. Bank can fully integrate the deposit records of the nine failed banks. The FDIC and U.S. Bank entered into a loss-share transaction on approximately $14.4 billion of the combined purchased assets of $18.2 billion. U.S. Bank will share in the losses on the asset pools covered under the loss-share agreement. The loss-sharing arrangement is projected to maximize returns on the assets covered by keeping them in the private sector. The agreement also is expected to minimize disruptions for loan customers. For more information on loss share, please visit: http://www.fdic.gov/bank/individual/failed/lossshare/index.html Customers who have questions about the transaction can contact the FDIC as follows: Failed Bank (a) Bank USA, National Association 1-800-913-3062 http://www.fdic.gov/bank/individual/failed/bankusa-az.html (b) California National Bank 1-800-913-5861 http://www.fdic.gov/bank/individual/failed/calnational.html (c) San Diego National Bank 1-800-517-1839 http://www.fdic.gov/bank/individual/failed/sandiegonational.html (d) Pacific National Bank 1-800-508-8289 http://www.fdic.gov/bank/individual/failed/pacificnational-ca.html (e) Park National Bank 1-800-450-5668 http://www.fdic.gov/bank/individual/failed/park-il.html (f) Community Bank of Lemont 1-800-528-6357 http://www.fdic.gov/bank/individual/failed/community-lemont.html (g) North Houston Bank 1-800-501-1872 http://www.fdic.gov/bank/individual/failed/northhouston-tx.html (h) Madisonville State Bank 1-800-913-3053 http://www.fdic.gov/bank/individual/failed/madisonville-tx.html (i) Citizens National Bank 1-800-517-1843 http://www.fdic.gov/bank/individual/failed/citizens-teague.html The nine banks were subsidiaries of FBOP Corporation, Oak Park, Illinois. FBOP Corporation was not closed and was not subject to the October 30 actions. FBOP is run by Michael Kelly, who from his base in the Chicago suburbs snapped up banks in San Diego, Los Angeles, Houston, and San Francisco. He started in 1990 with First Bank of Oak Park, which had $125 million in assets. The FDIC's Board of Directors issued notices of assessment of cross guaranty liability against Park National Bank and Citizens National Bank. Under statutory authority, the FDIC may assess affiliated banks for losses incurred by the Deposit Insurance Fund (DIF) from the failure of other banks, such as those owned by FBOP Corporation. Congress granted the FDIC authority in 1989 to reduce the cost to the DIF for the resolution of affiliated institutions owned by the same company. The two banks were unable to pay the amounts assessed and were closed by their chartering authorities. The FDIC estimates that the cost of the nine banks to the DIF will be a combined $2.5 billion. U.S. Bank's acquisition of all the deposits was the "least costly" resolution for the FDIC's DIF compared to alternatives. The failure of the nine banks brings the nation's total number this year to 115. By number, banks in Georgia account for one-fifth of all U.S. banks closing this year, with 20 failures, followed by Illinois with 19, California with 13, and Florida with nine. PARK NATIONAL BANK: Closed; U.S. Bank Assumes All Deposits ---------------------------------------------------------- The Federal Deposit Insurance Corporation entered into a purchase and assumption agreement with U.S. Bank, NA, of Minneapolis, Minnesota, a wholly-owned subsidiary of U.S. Bancorp, to assume all of the deposits and essentially all of the assets of nine failed banks. The nine banks were closed October 30 by federal and state bank regulators, which appointed the FDIC as receiver. The nine banks involved in the transaction are: Bank USA, National Association, Phoenix, Arizona; California National Bank, Los Angeles, California; San Diego National Bank, San Diego, California; Pacific National Bank, San Francisco, California; Park National Bank, Chicago, Illinois; Community Bank of Lemont, Lemont, Illinois; North Houston Bank, Houston, Texas; Madisonville State Bank, Madisonville, Texas; and Citizens National Bank, Teague, Texas. As of September 30, 2009, the banks had combined assets of $19.4 billion and deposits of $15.4 billion. The nine banks had 153 offices, which will reopen as branches of U.S. Bank beginning tomorrow during their normal business hours. Depositors of the nine banks will automatically become depositors of U.S. Bank. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship to retain their deposit insurance coverage. Customers should continue to use their existing branches until U.S. Bank can fully integrate the deposit records of the nine failed banks. The FDIC and U.S. Bank entered into a loss-share transaction on approximately $14.4 billion of the combined purchased assets of $18.2 billion. U.S. Bank will share in the losses on the asset pools covered under the loss-share agreement. The loss-sharing arrangement is projected to maximize returns on the assets covered by keeping them in the private sector. The agreement also is expected to minimize disruptions for loan customers. For more information on loss share, please visit: http://www.fdic.gov/bank/individual/failed/lossshare/index.html Customers who have questions about the transaction can contact the FDIC as follows: Failed Bank (a) Bank USA, National Association 1-800-913-3062 http://www.fdic.gov/bank/individual/failed/bankusa-az.html (b) California National Bank 1-800-913-5861 http://www.fdic.gov/bank/individual/failed/calnational.html (c) San Diego National Bank 1-800-517-1839 http://www.fdic.gov/bank/individual/failed/sandiegonational.html (d) Pacific National Bank 1-800-508-8289 http://www.fdic.gov/bank/individual/failed/pacificnational-ca.html (e) Park National Bank 1-800-450-5668 http://www.fdic.gov/bank/individual/failed/park-il.html (f) Community Bank of Lemont 1-800-528-6357 http://www.fdic.gov/bank/individual/failed/community-lemont.html (g) North Houston Bank 1-800-501-1872 http://www.fdic.gov/bank/individual/failed/northhouston-tx.html (h) Madisonville State Bank 1-800-913-3053 http://www.fdic.gov/bank/individual/failed/madisonville-tx.html (i) Citizens National Bank 1-800-517-1843 http://www.fdic.gov/bank/individual/failed/citizens-teague.html The nine banks were subsidiaries of FBOP Corporation, Oak Park, Illinois. FBOP Corporation was not closed and was not subject to the October 30 actions. FBOP is run by Michael Kelly, who from his base in the Chicago suburbs snapped up banks in San Diego, Los Angeles, Houston, and San Francisco. He started in 1990 with First Bank of Oak Park, which had $125 million in assets. The FDIC's Board of Directors issued notices of assessment of cross guaranty liability against Park National Bank and Citizens National Bank. Under statutory authority, the FDIC may assess affiliated banks for losses incurred by the Deposit Insurance Fund (DIF) from the failure of other banks, such as those owned by FBOP Corporation. Congress granted the FDIC authority in 1989 to reduce the cost to the DIF for the resolution of affiliated institutions owned by the same company. The two banks were unable to pay the amounts assessed and were closed by their chartering authorities. The FDIC estimates that the cost of the nine banks to the DIF will be a combined $2.5 billion. U.S. Bank's acquisition of all the deposits was the "least costly" resolution for the FDIC's DIF compared to alternatives. The failure of the nine banks brings the nation's total number this year to 115. By number, banks in Georgia account for one-fifth of all U.S. banks closing this year, with 20 failures, followed by Illinois with 19, California with 13, and Florida with nine. PARLUX FRAGRANCES: Signs Feb. 15 Extension with Regions Bank ------------------------------------------------------------ Parlux Fragrances, Inc. has signed a Second Amendment to Loan Agreement and Amendment to Forbearance Agreement with Regions Bank extending the forbearance period through February 15, 2010 and calling for Parlux to repay the remaining loan balance over the course of the extension period. The Second Amendment calls for the Company to continue to comply with certain covenants, as previously defined in the Forbearance Agreement with Regions Bank under the Loan and Security Agreement, dated as of July 22, 2008, as amended. The Company now is in full compliance with all covenants under the Loan and Security Agreement, as amended, and anticipates that it will be able to remain in compliance during the term of the extension. A copy of the Forbearance Agreement is available for free at: http://researcharchives.com/t/s?47f5 Mr. Neil J. Katz, Chairman and CEO, noted, "We are very pleased to have concluded this process in a manner that was amenable to both parties. Based upon our internal projections, we anticipate being able to comfortably pay down the remaining debt as now scheduled, while producing and shipping our holiday products during this important season. We plan to share further details regarding this transaction during our investor conference call scheduled for next week." Conference Call The Company will hold a conference call on Thursday, November 5, 2009, at 9:00 a.m. (EST) to discuss the Company's quarterly results and to provide additional outlook on the next quarter. To participate, please call Toll Free: 888-595-5338 or International: 201-526-1830. A digital replay of the conference call will be available from Thursday, November 5, 2009, after 3:00 p.m., until midnight November 11, 2009. To access the rebroadcast, Toll Free: 1-888-632-8973 or International: 201.499.0429. Replay Code: 61326424. The Company is now offering its shareholders access to its conference calls via audio webcast link directly on its website http://www.parlux.comand click on the red link, "Parlux Webcast Site". About Parlux Fragrances, Inc. Parlux Fragrances, Inc. (NASDAQ:PARL) is a manufacturer and international distributor of prestige products. It holds licenses for Paris Hilton, Jessica Simpson, GUESS?, Nicole Miller, Josie Natori, Queen Latifah, Marc Ecko, Rihanna, Kanye West, XOXO, Ocean Pacific (OP), Andy Roddick, babyGund, and Fred Hayman Beverly Hills designer fragrances, as well as Paris Hilton watches, cosmetics, sunglasses, handbags and other small leather accessories. PETCO ANIMAL: Bank Debt Trades at 4.4% Off in Secondary Market -------------------------------------------------------------- Participations in a syndicated loan under which PETCO Animal Supplies Stores, Inc., is a borrower traded in the secondary market at 95.60 cents-on-the-dollar during the week ended Oct. 30, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents a drop of 0.52 percentage points from the previous week, The Journal relates. The loan matures on Sept. 26, 2013. The Company pays 200 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's B1 rating and Standard & Poor's B+ rating. The debt is one of the biggest gainers and losers among widely quoted syndicated loans in secondary trading in the week ended Oct. 30, among the 161 loans with five or more bids. The Troubled Company Reporter said on June 29, 2009, that Moody's affirmed PETCO Animal Supplies Stores, Inc.'s Corporate Family Rating at B2; Probability of Default Rating at B2; $686 million senior secured term loan due 2013 at B1 (LGD 3, 33%), and changed the outlook to stable from negative. PETCO Animal Supplies Inc., headquartered in San Diego, California, is a specialty retailer of premium supplies, food and services for household pets. The company operates about 1,000 stores in all 50 U.S. states. Revenues were about $2.6 billion for the last twelve months ending May 2, 2009. PHILADELPHIA NEWSPAPERS: Revenue Drops Expected in 2009-2011 ------------------------------------------------------------ Philadelphia Newspapers LLC is expecting a 20.6% decline in revenue, including a 27.7% drop in ad revenue, this year, court documents say. Philadelphia Inquirer states that Philadelphia Newspapers expects advertising and overall revenue to continue to decline through 2011, although the drop will diminish each year. According to Christopher K. Hepp at Philadelphia Inquirer, The Philadelphia Newspapers reported that it expected $316 million in total revenue in 2009, down from $398 million in 2008. Revenue in 2007 totaled $443 million. Philadelphia Newspapers said in a statement that revenue would drop 7.4% in 2010 and 2.4% in 2011. Philadelphia Inquirer says that Philadelphia Newspapers expected $202 million in ad revenue in 2009, down from $279 million in 2008 and $335 million in 2007. Ad revenue, according to the report, is would decline 12.6% in 2010 and 5.8% in 2011. According to court documents, Philadelphia Newspapers would post positive end-of-year cash flow figures in all three years, mainly due to how it accounts for $27 million in bankruptcy expenses in 2009, and expected cuts in labor and benefits expenses. Philadelphia Inquirer states that Philadelphia Newspapers expects positive cash flow of $4.6 million in 2009, compared to its previous prediction of $12 million. The Company, says Philadelphia Inquirer, projected $12 million in positive cash flow in 2010 and $12.5 million in 2011. Some of savings would be achieved through contract negotiations with 14 unions, while other savings would come from cuts in wages and benefits for nonunion employees, Philadelphia Inquirer relates, citing Philadelphia Newspapers spokesperson Jay Devine. Philadelphia Newspapers -- http://www.philly.com/-- owns and operates numerous print and online publications in the Philadelphia market, including the Philadelphia Inquirer, the Philadelphia Daily News, several community newspapers, the region's number one local Web site, philly.com, and a number of related online products. The Company's flagship publications are the Inquirer, the third oldest newspaper in the country and the winner of numerous Pulitzer Prizes and other journalistic recognitions, and the Daily News. Philadelphia Newspapers and its debtor-affiliates filed for Chapter 11 bankruptcy protection on February 22, 2008 (Bankr. E.D. Pa. Case No. 09-11204). Proskauer Rose LLP is the Debtors' bankruptcy counsel, while Lawrence G. McMichael, Esq., at Dilworth Paxson LLP is the local counsel. The Debtors' financial advisor is Jefferies & Company Inc. The Garden City Group, Inc., serves as claims and notice agent. Philadelphia Newspapers listed assets and debts of $100 million to $500 million in its bankruptcy petition. PLIANT CORP: Berry Plastics Issues $620MM New Notes to Fund Deal ---------------------------------------------------------------- Berry Plastics Corporation on October 27, 2009, commenced, via two of its newly formed, wholly owned subsidiaries, an offering of: -- $325 million in aggregate principal amount of First Priority Senior Secured Notes due 2015; and -- $295 million in aggregate principal amount of 8-7/8% Second Priority Senior Secured Notes due 2014. On October 29, 2009, Berry Plastics announced the pricing of the private placement by its two newly formed, wholly owned subsidiaries. The Issuers will issue: -- $370 million of first priority senior secured notes due 2015; and -- $250 million of second priority senior secured notes due 2014. The principal amounts represent an increase of $45 million with respect to the First Priority Notes and a decrease of $45 million with respect to Second Priority Notes from previously announced principal amounts. The closing of the private placement offering is expected to occur on November 12, 2009. The First Priority Notes will bear interest at a rate of 8-1/4 % payable semiannually, in cash in arrears, on May 15 and November 15 of each year, commencing May 15, 2010 and will mature on November 15, 2015. The Second Priority Notes will bear interest at a rate of 8-7/8% payable semiannually, in cash in arrears, on March 15 and September 15 of each year, commencing March 15, 2010 and will mature on September 15, 2014. The proceeds from the offering before fees and expenses will be $365.7 million for the First Priority Notes and $230.6 million for the Second Priority Notes. From and after the release of proceeds from the collateral account, the First Priority Notes and Second Priority Notes will be guaranteed on a senior secured first-priority and second- priority basis, respectively, by each of Berry's existing and future direct or indirect domestic subsidiaries that is a restricted subsidiary, subject to certain exceptions and will include all of Berry's subsidiaries that guarantee Berry's obligations under its term loan facility. The Notes and the guarantees will be senior secured obligations and will rank senior in right of payment to all of Berry's, and, in the case of the guarantees, to all of the guarantors', existing and future subordinated debt. The First Priority Notes and Second Priority Notes will and the guarantees thereof will be secured on a first-priority and second- priority basis, respectively, by a lien on the assets that secure Berry's obligations under its senior secured credit facilities, subject to certain exceptions. The proceeds from the offering are intended to be used to acquire directly or indirectly all of the equity of Pliant Corporation (which will become a restricted subsidiary of Berry), to repay certain of Pliant's then-outstanding indebtedness, to pay certain fees and expenses related to such transactions and the offering and, to the extent not used for such purposes, for general corporate purposes. All proceeds of this offering will be deposited, together with any additional amounts necessary to redeem the notes, into a segregated collateral account until the obligations of the Issuers under the notes are assumed by Berry and certain other conditions are satisfied, including that the Acquisition will occur substantially simultaneously with the release of the proceeds from the collateral account. Amounts held in the collateral account will be pledged for the benefit of the holders of the notes. The notes are being offered only to qualified institutional buyers in reliance on Rule 144A under the Securities Act, and outside the United States, only to non-U.S. investors pursuant to Regulation S. The notes will not be initially registered under the Securities Act or any state securities laws and may not be offered or sold in the United States absent an effective registration statement or an applicable exemption from registration requirements or a transaction not subject to the registration requirements of the Securities Act or any state securities laws. About Pliant Corp Headquartered in Schaumburg, Illinois, Pliant Corporation produces polymer-based films and flexible packaging products for food, beverage, personal care, medical, agricultural and industrial applications. The Company has operations in Australia, New Zealand, Germany, and Mexico. Pliant and 10 of its affiliates filed for Chapter 11 protection on January 3, 2006 (Bankr. D. Del. Lead Case No. 06-10001). James F. Conlan, Esq., at Sidley Austin LLP, and Edmon L. Morton, Esq., and Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor, represented the Debtors in their restructuring efforts. The Debtors tapped McMillan Binch Mendelsohn LLP, as Canadian counsel. As of September 30, 2005, the Company had $604.3 million in total assets and $1.19 billion in total debts. The Debtors emerged from Chapter 11 on July 19, 2006. Pliant Corp. and its affiliates again filed for Chapter 11 after reaching terms of a pre-packaged restructuring plan. The voluntary petitions were filed February 11, 2009 (Bank. D. Del. Case Nos. 09-10443 through 09-10451). The Hon. Mary F. Walrath presides over the cases. Jessica C.K. Boelter, Esq., at Sidley Austin LLP, in Chicago, Illinois, and Edmon L. Morton, Esq., at Robert S. Brady, Esq., at Young Conaway Stargatt & Taylor, LLP, in Wilmington, Delaware, provide bankruptcy counsel to the Debtors. Epiq Bankruptcy Solutions LLC acts as claims and noticing agent. The U.S. Trustee for Region 3 appointed five creditors to serve on an official committee of unsecured creditors. The Creditors Committee selected Lowenstein Sandler PC as its counsel. As of September 30, 2008, the Debtors had $688.6 million in total assets and $1.03 billion in total debts. About Berry Plastics Berry Plastics Corporation manufactures and markets plastic packaging products, plastic film products, specialty adhesives and coated products. At June 27, 2009 the Company had 64 production and manufacturing facilities, with 58 located in the United States. Berry is a wholly-owned subsidiary of Berry Plastics Group, Inc. Berry Group is primarily owned by affiliates of Apollo Management, L.P. and Graham Partners. Berry, through its wholly owned subsidiaries operates in four primary segments: Rigid Open Top, Rigid Closed Top, Flexible Films, and Tapes/Coatings. The Company's customers are located principally throughout the United States, without significant concentration in any one region or with any one customer. As of June 27, 2009, the Company had $4.37 billion in total assets against $4.06 billion in total liabilities. The Company posted a net loss of $35.5 million for the 39-weeks ended June 27, 2009. The Company posted a net income of $1.3 million for the 13-weeks ended June 27, 2009. * * * As reported by the Troubled Company Reporter on June 10, 2009, Standard & Poor's Ratings Services raised its corporate credit rating on Berry Plastics Group to 'B-' from 'SD' and the senior unsecured debt rating to 'CCC' from 'D'. The recovery ratings on Group's senior unsecured debt remain unchanged at '6', indicating S&P's expectation for negligible recovery (0% to 10%) in a payment default. S&P affirmed all its ratings on Group's wholly owned operating subsidiary Berry Plastics Corp. The outlook is stable. S&P had lowered the ratings on Group on May 22, 2009, following the announcement that BP Parallel LLC, a subsidiary of Group, agreed to pay about $147 million to purchase assignments of $472.9 million principal amount of Group's senior unsecured term loan. As of May 8, 2009, the company had closed on $105.9 million of these assignments, and management expects to close on the remainder in the fiscal third quarter ending approximately June 30, 2009. The principal amount of the term loan, which is currently pay-in-kind, was $580 million as of March 28, 2009. S&P viewed the transaction as a distressed exchange because debtholders received significantly less than the accreted principal amount of the loan. POLYMER VISION: ODM Wistron To Buy Assets for EUR12MM ----------------------------------------------------- DigiTimes reports that ODM Wistron's board of directors has agreed to acquire Polymer Vision for EUR12 million, preventing the Company from closing completely after in went bankrupt earlier this year. Polymer Vision's Dutch parent closed down the Company in July for financial reasons. Amy-Mae Elliott at Pocket-lint relates that Polymer Vision said it will "continue to focus on research and development of rollable display with the goal of taking the technology to mass production", but it's unclear whether the Company's e-paper display Readius will survive. Polymer Vision is a Millbrook-based company that pioneered innovative screens that can roll-up like a paper. It is prominently known for its product Readius. It filed for Chapter 11 bankruptcy protection in July 2009 and shut down its offices at the Millbrook Technology Campus near Southampton. PROTOSTAR LTD: Intelsat $210MM Wins ProtoStar 1 Satellite --------------------------------------------------------- Intelsat, Ltd was selected as the successful bidder in the 29 October public auction for the ProtoStar 1 satellite with a $210 million, all cash offer. Upon conclusion of the transaction, the satellite will be re-named Intelsat 25 and will join Intelsat's global fleet, serving with the company's other assets in the Atlantic Ocean region. The satellite, built by Space Systems Loral, has 22 Ku-band and 38 C-band transponders. Upon its launch in July 2008, the satellite was expected to have a 16-year life span. "Intelsat continues to demonstrate its ability to execute transactions that enhance the value of its global network," said Phillip Spector, Intelsat Executive Vice President Business Development and General Counsel. "A healthy, in-orbit satellite is extremely valuable to us given our high fleet utilization. The additional inventory will support future revenue growth and provide resilience. Over the past several years we have enjoyed strong demand for our services in Africa, and this capacity will allow us to support the growth requirements of our customers, including wireless operators and broadband service providers. Because of our operating scale and collection of valuable orbital locations, we will be able to integrate and operate Intelsat 25 with minimal incremental cost, and rapidly build a backlog of revenue for the new satellite." The transaction is subject to certain regulatory and bankruptcy court approvals. Intelsat expects to close the transaction within the next 30 days. About Intelsat Intelsat is the leading provider of fixed satellite services worldwide. For 45 years, Intelsat has been delivering information and entertainment for many of the world's leading media and network companies, multinational corporations, Internet service providers and governmental agencies. Intelsat's satellite, teleport and fiber infrastructure is unmatched in the industry, setting the standard for transmissions of video, data and voice services. From the globalization of content and the proliferation of HD, to the expansion of cellular networks and broadband access, with Intelsat, advanced communications anywhere in the world are closer, by far. 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. PROVIDENCE SERVICE: S&P Gives Positive Outlook, Holds 'B-' Rating ----------------------------------------------------------------- Standard & Poor's Ratings Services said that it revised its outlook on Health services provider Providence Service Corp. to positive from negative. At the same time, Standard & Poor's affirmed its 'B-' corporate credit rating on Providence. "The outlook revision reflects prospects for sustained and improved operating performance, aided by a moderation of near-term business risk," said Standard & Poor's credit analyst David Peknay. "In addition, a reduction in debt leverage reduces S&P's concern regarding bank covenant compliance." Providence Service Corp.'s high dependence on Medicaid contracts with state and local agencies, and the pressures of the current recession, still underscore its vulnerable business risk profile. Moreover, the slim cushion against tightening bank covenants remains an important element in the company's aggressive financial risk profile. Despite Providence's position as a leading player in a niche industry that provides home and community-based social services, foster care, and management of other not-for-profit organizations, it is highly reliant on its contracts associated with government agencies for about 81% of its total contract base. This reliance has been a significant rating concern since many states are encountering budget constraints due to the weaker macroeconomic environment. The company has also struggled with its Logisticare business which it acquired in late-2007. The fixed revenue per patient capitated structure of Logisticare's contracts hurt its profitability as recessionary forces pushed utilization (more people using their service) to higher-than-expected levels. These pressures caused a significant decline in financial performance, particularly in the second half of 2008 when weaker profitability raised concerns about the company's ability to comply with its bank covenant compliance requirements. In 2009, there have been several developments that have changed the course of the company's businesses: * Many proposed state budget cuts that initially provided uncertainty have since been rejected. * Increased federal Medicaid spending under programs such as the State Children's Health Insurance Program Reauthorization Act that went into effect February 2009 among other programs is favorable to Providence in the near term. * A Federal court ruling in July 2009 rejected California's threat of a 10% reduction to Medicaid services. * An overall increase in volume of Medicaid patients because of increased poverty due to a spike in unemployment and foreclosures have also provided temporary benefits. * Logisticare's efforts to generate new contracts and retain existing contracts, along with improved utilization of cost management as compared with the prior year, has contributed to revenue growth and operating margins (the division constitutes more than 55% of Providence's total revenues). The positive outlook reflects S&P's belief that Providence's efforts to improve its financial risk profile are sustainable, and that the company has a better chance of meeting its bank covenant requirements. Still, despite the recent security against near- term third-party reimbursement risks, ongoing reimbursement risks remain and might limit further credit improvement. Many of the stabilizing forces are only temporary, leading to the potential for future rate reductions. In fact, North Carolina implemented a 3% rate haircut, and other state cuts are possible. There may not be as many cost-saving opportunities available for Providence to offset possible reimbursement cuts. In addition, new contracts may level off across all business segments and utilization at its Logisticare business may further burden this division's profitability. S&P could raise the rating if S&P believes that a stable reimbursement environment is likely to be sustained. This would contribute to prospects for an increase in covenant cushion and revenue and EBITDA growth that could limit leverage to less than 3.0x. S&P could revise the outlook or lower the rating if the company is hurt by significant reimbursement cuts or other unforeseen events that might again jeopardize its ability to meet bank covenant requirements. PTC ALLIANCE: Section 341(a) Meeting Slated for November 20 ----------------------------------------------------------- Roberta A. DeAngelis, the United States Trustee for Region 3, will convene a meeting of creditors of PTC Alliance Corp. and its debtor-affiliates on Nov. 20, 2009, at 10:00 a.m., at J. Caleb Boggs Federal Building, 5th Floor, Room 5209 in Wilmington, Delaware. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This meeting of creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible officer of the Debtors under oath about the Debtors' financial affairs and operations that would be of interest to the general body of creditors. Headquartered in Wexford, Pennsylvania, PTC Alliance Corp. makes welded and cold drawn mechanical steel tubing and tubular shapes, chrome-plated bar products and precision components. The Company and its affiliates filed for Chapter 11 protection on October 1, 2009 (Bankr. D. Del. Lead Case No. 09-13395). The Debtors selected Reed Smith LLP as their counsel. PTC Alliance listed, in its petition, assets between $50 million and $100 million, and debts between $100 million and $500 million. QIMONDA NA: Limits Plan Filing Extension to January 18 ------------------------------------------------------ The U.S. Bankruptcy Court for the Eastern District of Virginia extended the exclusive periods of Qimonda Richmond LLC and its debtor-affiliate Qimonda North America to file a Chapter 11 Plan, and to solicit acceptances of the plan until Jan. 18, 2010, and March 19, 2010. This is the second request of the Debtors for an extension of the exclusive periods. The Debtors have asked for a 134 days extension in their exclusive periods but agreed to limit the extensions to address the concerns of the Official Committee of Unsecured Creditors. Qimonda AG (NYSE: QI) -- http://www.qimonda.com/-- is a leading global memory supplier with a diversified DRAM product portfolio. The Company generated net sales of EUR1.79 billion in financial year 2008 and had -- prior to its announcement of a repositioning of its business -- approximately 12,200 employees worldwide, of which 1,400 were in Munich, 3,200 in Dresden and 2,800 in Richmond (Virginia, USA). The Company provides DRAM products with a focus on infrastructure and graphics applications, using its power saving technologies and designs. Qimonda is an active innovator and brings high performance, low power consumption and small chip sizes to the market based on its breakthrough Buried Wordline technology. Qimonda AG commenced insolvency proceedings with a local court in Munich, Germany, on January 23, 2009. On June 15, 2009, QAG filed a petition for relief under Chapter 15 of the Bankruptcy Code (Bankr. E.D. Virginia Case No. 09-14766). Qimonda North America Corp., an indirect and wholly owned subsidiary of QAG, is the North American sales and marketing subsidiary of QAG. QNA is also the parent company of Qimonda Richmond LLC. QNA and QR filed for Chapter 11 on February 20 (Bankr. D. Del. Lead Case No. 09-10589). Mark D. Collins, Esq., Michael J. Merchant, Esq., and Maris J. Finnegan, Esq., at Richards Layton & Finger PA, represents the Debtors as counsel. Roberta A. DeAngelis, the United States Trustee for Region 3, appointed seven creditors to serve on an official committee of unsecured creditors. Jones Day and Ashby & Geddes represent the Committee. In its bankruptcy petition, Qimonda Richmond, LLC, listed more than US$1 billion each in assets and debts. The information was based on Qimonda Richmond's financial records which are maintained on a consolidated basis with Qimonda North America Corp. RANCHER ENERGY CORP: Voluntary Chapter 11 Case Summary ------------------------------------------------------ Debtor: Rancher Energy Corp. aka Rancher Energy Oil & Gas Corp. fka Metalix, Inc. 999 18th Street, Suite 3400 Denver, CO 80202 Case No.: 09-32943 Chapter 11 Petition Date: October 28, 2009 Court: United States Bankruptcy Court District of Colorado (Denver) Judge: Michael E. Romero Debtor's Counsel: Herbert A. Delap, Esq. 1700 Broadway, Ste. 2100 Denver, CO 80290 Tel: (303) 861-8013 Email: cdelap@duffordbrown.com Randall J. Feuerstein, Esq. 1700 Broadway, Ste. 2100 Denver, CO 80290 Tel: (303) 861-8013 Fax: (303) 832-3804 Email: rfeuerstein@duffordbrown.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. READER'S DIGEST: 19 Affiliates' Schedules and Statements -------------------------------------------------------- Nineteen debtor-affiliates of The Reader's Digest Association, Inc., reported assets ranging from $0 to $33 million: Debtor Assets Liabilities ------ ------ ----------- Pegasus Sales, Inc. $33,629,081 $2,275,142,613 Direct Holdings Americas Inc. $35,744,509 $2,358,445,773 Reader's Digest Sales and $16,634,212 $2,293,424,453 Services, Inc. CompassLearning, Inc. $14,220,625 $2,325,598,528 Allrecipes.com, Inc. $10,141,334 $2,275,507,083 Direct Entertainment Media $7,295,253 $2,274,828,139 Group, Inc. Home Service Publications, Inc. $5,990,248 $2,275,457,913 Funk & Wagnalls Yearbook Corp. $5,839,726 $2,274,828,261 Direct Holdings U.S. Corp. $3,636,524 $2,278,688,532 Gareth Stevens, Inc. $1,536,425 $2,274,852,898 Direct Holdings Customer $1,826,077 $2,274,828,139 Service, Inc. Direct Holdings Libraries Inc. $756,055 $2,274,828,139 Pegasus Investment, Inc. $539,297 $2,274,828,139 Ardee Music Publishing, Inc. $321,096 $2,274,828,139 Alex Inc. $100 $2,274,828,139 Direct Holdings Education Inc. $100 $2,274,828,139 Pegasus Asia Investments Inc. $56 $2,274,828,139 Direct Holdings Custom $0 $2,274,828,252 Publishing Inc. Christmas Angel Productions Inc. $0 $2,274,828,139 A large portion of the Debtors' liabilities are owed to JPMorgan Chase Bank, N.A., for various loans. The Debtor-Affiliates separately filed with the Court their statements of financial affairs. The Debtor-Affiliates disclosed that they earned these amounts from employment or operation of business within two years prior to the commencement of the bankruptcy cases: YTD 2009 FY 2008 -------- ------- Direct Holdings $146,665,560 $170,612,828 Americas Inc. Reader's Digest 82,792,856 94,122,537 Sales and Services, Inc. Pegasus Sales, Inc. 58,043,824 23,310,091 CompassLearning Inc. 46,545,420 53,067,271 Home Service 25,715,113 28,754,753 Publications, Inc. Gareth Stevens, Inc. 7,168,173 9,376,470 Funk & Wagnalls 608,336 988,694 Yearbook Corp. These Debtor-Affiliates also earned income other than from employment or operation of business: YTD 2009 FY 2008 -------- ------- Direct Holdings ($672,853) ($77,941) Americas Inc. Direct Holdings 154,377 -- Customer Service, Inc. Pegasus Sales, Inc. 5,843 6,374 Home Service (2,002) 21,133 Publications, Inc. Reader's Digest (682) 11,429 Sales and Services, Inc. CompassLearning, Inc. 61 13 Within the 90 days immediately preceding the Petition Date, these Debtor-Affiliates paid creditors on account of debts, which are not primary consumer debts: Debtor Amount ------ ------ Direct Holdings Americas Inc. $31,675,712 CompassLearning, Inc. 2,295,777 Reader's Digest Sales and Services, Inc. 225,775 Susana D'Emic, Reader's Digest's vice president and corporate controller, discloses that receipts and disbursements are made through a centralized and consolidated cash management system that includes 106 accounts held in the name of specific Debtors. She notes that for these Debtor-Affiliates, all disbursement information is reported on the statements of financial affairs of the Debtor that holds the relevant bank account: -- Alex Inc.; -- Allrecipes.com, Inc.; -- Ardee Music Publishing, Inc.; -- Christmas Angel Productions, Inc.; -- Direct Entertainment Media Group, Inc.; -- Direct Holdings Customer Service, Inc.; -- Direct Holdings Custom Publishing Inc.; -- Direct Holdings Education Inc.; -- Direct Holdings Libraries Inc.; -- Direct Holdings U.S. Corp.; -- Funk & Wagnalls Yearbook Corp.; -- Gareth Stevens, Inc.; -- Home Service Publications, Inc.; -- Pegasus Asia Investments Inc.; -- Pegasus Investment, Inc.; and -- Pegasus Sales, Inc. Not every Debtor maintains a disbursement account, Ms. D'Emic tells the Court. So, she says, for those Debtors without a disbursement account, disbursements are made on their behalf by another Debtor via its disbursement account, and the transaction is recorded through the accounting system as an intercompany transaction. The Debtor-Affiliates also made payments within one year immediately preceding the commencement of their Chapter 11 cases to or for the benefit of creditors, who are or were insiders: For purposes of the Statements, the Debtors define insiders as (i) directors, (ii) members of the Executive Committee, where one exists, (iii) officers of each Debtor other than persons who hold solely a power of attorney or the title of assistant secretary, assistant treasurer or a similar title, and (iv) equity owners of 5% or more. To the extent that former officers do not qualify as insiders as defined, Ms. D'Emic reveals that benefits and payments to them are not included in the Schedules and Statements. The Debtors reserve all rights to dispute whether someone identified in response to Question 3(c) is in fact an "insider" as defined in Section 101(31) of the Bankruptcy Code. Further, Ms. D'Emic asserts that because the Debtors operate under a central and consolidated cash management system, payroll and employee disbursements are made by The Reader's Digest Association, Inc., on behalf of all of the Debtors. As a result, those disbursements are reflected on Reader's Digest's Statement. These Debtor-Affiliates are parties to certain suits and administrative proceedings within a year prior to the Petition Date: -- CompassLearning, Inc.; -- Direct Entertainment Media Group, Inc.; -- Direct Holdings Americas Inc.; -- Direct Holdings Libraries Inc.; -- Direct Holdings U.S. Corp.; -- Gareth Stevens, Inc.; and -- Reader's Digest Sales and Services, Inc. Although the Debtors have made reasonable efforts to ensure that the gifts include all gifts made, given the magnitude of the Debtors' operations, Ms. D'Emic says that certain gifts may have inadvertently been omitted from the Statements. She adds that in the ordinary course of business, the Debtors provide promotional items for customers and potential customers, and from time to time, the Debtors provide de minimis gifts to employees, which are not included in the Schedules. Ms. D'Emic reveals that all payments for bankruptcy-related counseling are listed in Reader's Digest's Statement, which payments represent payments made for itself and its subsidiaries. The Debtors routinely incur set-offs during the ordinary course of business, Ms. D'Emic relates. Set-offs in the ordinary course can result from various items, including intercompany transactions, counterparty settlements, pricing discrepancies, rebates, returns, warranties, and other transaction true-ups. These normal set-offs are consistent with the ordinary course of business in the Debtors' industries and can be particularly voluminous, making it unduly burdensome and costly for the Debtors to list all normal set-offs. Therefore, she says, normal set-offs are excluded from the Debtor-Affiliates' Statements. About The Reader's Digest Association RDA is a global multi-brand media and marketing company that educates, entertains and connects audiences around the world. The company builds multi-platform communities based on branded content. With offices in 44 countries, it markets books, magazines, and music, video and educational products reaching a customer base of 130 million in 78 countries. It publishes 94 magazines, including 50 editions of Reader's Digest, the world's largest-circulation magazine, operates 65 branded Web sites generating 22 million unique visitors per month, and sells 40 million books, music and video products across the world each year. Its global headquarters are in Pleasantville, N.Y. Reader's Digest said that as of June 30, 2009, it had total assets of $2.2 billion against total debts of $3.4 billion. Reader's Digest, together with its 47 affiliates, filed for Chapter 11 on August 24 (Bankr. S.D.N.Y. Case No. 09-23529). Kirkland & Ellis LLP has been engaged as general restructuring counsel. Mallet-Prevost, Colt & Mosle LLP has been tapped as conflicts counsel. Ernst & Young LLP is auditor. Miller Buckfire & Co, LLC, is financial advisor. AlixPartners, LLC, is restructuring consultant. Kurtzman Carson Consultants is notice and claims agent. The Official Committee of Unsecured Creditors is tapping BDO Seidman, LLP, as financial advisor, Trenwith Securities, LLP, as investment banker and Otterbourg, Steindler, Houston & Rosen, P.C., as counsel. Bankruptcy Creditors' Service, Inc., publishes Reader's Digest Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Reader's Digest and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000) READER'S DIGEST: Committee Access to Info Clarified --------------------------------------------------- The Official Committee of Unsecured Creditors of The Reader's Digest Association, Inc., notifies the Court and parties-in- interest that it will present to the Court on November 4, 2009, its stipulation with the Debtors, clarifying the Creditors Committee's requirement to provide access to information pursuant to Sections 105(a), 1102(b)(3)(A) and 1103(c) of the Bankruptcy Code. Objections to the stipulation are due November 2. The Stipulation provides that effective as of August 31, 2009, the Creditors' Committee, and its individual members and their representatives, regardless of when the members and their representative were appointed to the Committee, are not authorized or required to provide access to the Debtors' confidential information to any entity, absent the specific prior written consent of the Debtors or a specific Court order to the contrary. Privileged information will include any information subject to the attorney-client, work-product or some other state, federal, or other jurisdictional privilege law, whether the privilege is solely controlled by the Creditors Committee or is a joint privilege with the Debtors or some other party. Among other things, the Stipulation also provides that subject to the terms of any protective order, sealing order, or confidentiality agreement, any information received by the Creditors Committee from any entity in connection with an examination pursuant to Rule 2004 of the Federal Rules of Bankruptcy Procedure or in connection with discovery in any contested matter, adversary proceeding, or other litigation will not be governed by the terms of the Stipulation and its order but, rather, by any order governing that discovery. READER'S DIGEST: Names New Heads for Europe, Asia & Canada ---------------------------------------------------------- The Reader's Digest Association, Inc., named three of its most accomplished executives to lead its international divisions, which are responsible for the company's business in more than 70 countries. The new appointees are Dawn M. Zier, President, Europe; Andrea C. Martin, President, Asia Pacific; and Patricia Hespanha, President, Canada-Latin America. All three will serve on the company's Executive Committee and report to Mary G. Berner, RDA's President and Chief Executive Officer. "I am pleased to announce the appointment of these highly experienced and talented executives to lead our International divisions," Ms. Berner said. "With records of consistent accomplishment and innovation within RDA, they have the proven skills to help intensify our progress against the company's transformational goals, most notably leveraging the digital channel to drive revenues and profits." Zier, currently serving as President of Global Consumer Marketing and CEO, Direct Holdings, will succeed Michael Brennan as President, Europe, the company's largest international division. The appointment is effective November 2. Brennan is completing a two-year assignment in Europe and will be returning to the United States to assume a new role as Senior Vice President, Corporate Strategy, reporting to Berner. Zier has a strong track record of delivering results in general management and consumer marketing leadership roles, including significantly growing the digital channel to bring in new customers, supporting and driving growth of the U.S. affinity businesses, and increasing retail sales in a down market. Zier was the driving force behind the recent launch of Taste of Home Holiday, a new subscription-driven publication that quickly reached a circulation of 500,000 through non-traditional channels and also spearheaded the record-setting circulation launch strategy for Every Day with Rachael Ray. Other accomplishments include the successful phase-out of direct mail sweepstakes at U.S. Reader's Digest magazine as well as leading successful turnaround and integration efforts across several RDA businesses. In March 2007, Zier was appointed President, North American Consumer Marketing, responsible for marketing North American magazines and products, as well as managing market research, database and Customer Care. In 2008, she was promoted to President, Global Consumer Marketing, where she added international marketing to her responsibilities. In June 2009, she was also named President and CEO of Direct Holdings, which markets the Time Life business under license. Earlier, she served as President, Reader's Digest Canada and U.S. Books and Home Entertainment. Martin, currently President of Canada and Latin America (CALA), will become President of Asia Pacific, effective immediately. She succeeds Paul Heath, who will be leaving RDA after a brief transition. Martin has led businesses in Canada and Latin America to strong results during her 26-year career with RDA. As President of CALA since 2007, she oversaw the launch of Best Health, a multi-platform brand that serves a community of women 35-55 through a website, magazine and other elements, the launch of More of Our Canada (she earlier had launched Our Canada), and Reader's Digest magazine in Chile. Martin was promoted to Managing Director of Reader's Digest Canada in 2004 and produced strong business results, growing all product lines. During her tenure, she transformed the business from an off-line direct mail company to a multi-platform direct marketing company that has built on-line communities around various brands. She was named Vice President of Marketing in 2001 and played a central role in positioning Reader's Digest Canada as one of the country's largest and most successful publishers and direct marketers. Earlier, she was Marketing Director of Books & Home Entertainment, Marketing Manager of Home Entertainment, and Product Manager for Video. She joined the company in 1983. Hespanha for the past year has been Managing Director, Mexico. She will succeed Martin as President of CALA, effective immediately, and will retain her responsibilities as Managing Director, Mexico. Hespanha, who has been with the company for 13 years, has strengthened the Mexico business through growth initiatives, including the relaunch of Selecciones (the Spanish- language Reader's Digest), and by restructuring the business and bringing in new management. Previously, as Managing Director in Brazil, Hespanha led that company to significant growth, turning around the business by implementing a direct-debit system, introducing new product lines and revenue sources, instilling a culture of cost reduction, and maintaining a focus on Customer Care. Under her leadership, RD Brazil grew across all platforms - - magazines, books, music, video, advertising, marketing services, retail sales and Web -- and was a digital pioneer in RDA with early successful Web offerings. Previously, Hespanha served as Magazine Circulation Director for RD Europe and spent three years in London working with RDA's European businesses to improve circulation performance. During this time, she played a key role in testing a new, customer- supplied content model that led to the creation of Our Canada magazine in Canada and similar "Our Country" magazines. She joined the company in 1996. About The Reader's Digest Association RDA is a global multi-brand media and marketing company that educates, entertains and connects audiences around the world. The company builds multi-platform communities based on branded content. With offices in 44 countries, it markets books, magazines, and music, video and educational products reaching a customer base of 130 million in 78 countries. It publishes 94 magazines, including 50 editions of Reader's Digest, the world's largest-circulation magazine, operates 65 branded Web sites generating 22 million unique visitors per month, and sells 40 million books, music and video products across the world each year. Its global headquarters are in Pleasantville, N.Y. Reader's Digest said that as of June 30, 2009, it had total assets of $2.2 billion against total debts of $3.4 billion. Reader's Digest, together with its 47 affiliates, filed for Chapter 11 on August 24 (Bankr. S.D.N.Y. Case No. 09-23529). Kirkland & Ellis LLP has been engaged as general restructuring counsel. Mallet-Prevost, Colt & Mosle LLP has been tapped as conflicts counsel. Ernst & Young LLP is auditor. Miller Buckfire & Co, LLC, is financial advisor. AlixPartners, LLC, is restructuring consultant. Kurtzman Carson Consultants is notice and claims agent. The Official Committee of Unsecured Creditors is tapping BDO Seidman, LLP, as financial advisor, Trenwith Securities, LLP, as investment banker and Otterbourg, Steindler, Houston & Rosen, P.C., as counsel. Bankruptcy Creditors' Service, Inc., publishes Reader's Digest Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Reader's Digest and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000) REALOGY CORP: Bank Debt Trades at 16.18% Off in Secondary Market ---------------------------------------------------------------- Participations in a syndicated loan under which Realogy Corporation is a borrower traded in the secondary market at 83.82 cents-on-the-dollar during the week ended Oct. 30, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents a drop of 0.74 percentage points from the previous week, The Journal relates. The loan matures on Sept. 30, 2013. The Company pays 300 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's Caa1 rating and Standard & Poor's CCC- rating. The debt is one of the biggest gainers and losers among widely quoted syndicated loans in secondary trading in the week ended Oct. 30, among the 161 loans with five or more bids. Realogy Corporation is one of the largest real estate service companies in the United States with reported revenues of about $4.7 billion for the year ended Dec. 31, 2008. Realogy was incorporated in January 2006 to facilitate a plan by Cendant Corporation to separate Cendant into four independent companies - one for each of Cendant's real estate services, travel distribution services, hospitality services (including timeshare resorts), and vehicle rental businesses. The separation became effective July 2006. Headquartered in Parsippany, N.J., Realogy is owned by affiliates of Apollo Management, L.P., a leading private equity and capital markets investor. Realogy fully supports the principles of the Fair Housing Act. At March 31, 2009, Realogy had $8.62 billion in total assets, $9.62 billion in total liabilities, and $997 million in stockholders' deficit. RELIANCE INTERMEDIATE: S&P Affirms 'BB-' Rating on $350 Mil. Notes ------------------------------------------------------------------ Standard & Poor's Ratings Services said it affirmed its 'BB-' debt rating on Reliance Intermediate Holdings LP's 10-year US$350 million senior notes. The '4' recovery rating on the debt is unchanged, indicating S&P's expectation of an average (30%-50%) recovery in the event of a payment default. "The affirmation reflects S&P's view of the structurally subordinated nature of the notes and the company's sole reliance on cash distributions from subsidiary Reliance LP, partially offset by the predictable recurring revenue of Reliance LP's water heater business," said Standard & Poor's credit analyst Greg Pau. The debt rating reflects that the ultimate source of cash flow is derived from what S&P consider Reliance LP's investment-grade business risk profile, supported by predictable recurring revenue from the company's utility-like water heater business (which contributes to 80% of its EBITDA) and partially offset by the relatively more variable security monitoring business. RIHLP is a pure holding company whose only asset is its equity interests in Reliance L.P. As such, S&P believes it will rely solely on cash distributions from Reliance LP for servicing its obligations under the notes. Despite the predictability of Reliance LP's operating cash flow, S&P believes that cash distribution to RIHLP, limited to the residual cash flow available after Reliance LP has satisfied its own debt servicing requirements and financial obligations, could be more volatile. S&P considers Reliance LP effectively ring- fenced with structural features that protect Reliance LP's creditors and limit its ability to distribute cash to RIHLP, in accordance with Standard & Poor's criteria on ring-fencing a subsidiary. Reliance LP is a special purpose, bankruptcy-remote operating partnership formed to indirectly own the companies that operate a portfolio of home comfort businesses, with provision of an independent director and a nonconsolidation opinion. In addition, Reliance LP's debt agreement contains cash management features, performance tests, and a debt service reserve in place, which should ensure cash distribution to RIHLP. REPROS THERAPEUTICS: Discloses Settlement with Major Creditors -------------------------------------------------------------- Repros Therapeutics has entered into a settlement agreement with its major creditors for the large majority of the debt incurred associated with the recently suspended Proellex(R) clinical program. Previously the company announced in early August 2009 that it had voluntarily suspended dosing of all patients in its Proellex clinical trials. The FDA subsequently notified Repros that the Proellex program was placed on full clinical hold due to the observation of increased liver enzymes in a number of patients treated with Proellex. These elevated liver enzyme observations occurred during the time that the company was attempting to raise additional capital to fund its continued operations and the Proellex program in particular. The liver enzyme issue resulted in a failure of the fund raising activity and led to a situation where the Company had more debt than cash. If this situation were to remain unresolved, Repros would face bankruptcy. The creditor settlement allows for Repros to repay ten of its major creditors a total of nearly US$9 million of debt incurred during the execution of the Proellex clinical studies. The creditors include clinical research organizations, clinical investigator sites, clinical laboratories and a manufacturer of clinical supplies. Repros will repay the debt with a mixture of cash and unregistered stock. The unregistered stock is priced at US$1.10 which is the last transaction price of Repros stock at the close of regular trading on Thursday, October 29, 2009. The settlement calls for US$2,849,051 to be paid in cash and US$6,054,233 to be paid in unregistered stock. Repros will use its reasonable best efforts to register the stock in a timely fashion. The settlement also provides for the dismissal with prejudice of pending lawsuits brought against Repros by creditors participating in the agreement. In addition the company is concurrently attempting to resolve claims from approximately another 60 smaller creditors that are owed a total of about US$1.6 million. Joseph Podolski, Repros CEO, commented, "The last few months have clearly been difficult times, not only for the company and its shareholders, but also the company's creditors. The creditor settlement and the recently announced NIH amendment provide us with the opportunity to seek to obtain value from the Proellex program." He further noted, "The creditor settlement is an important first step in addressing our balance sheet issues and allows us to continue our Androxal(R) program for the immediate future while we pursue additional financing and strategic options. We have recently submitted a request for a Type C meeting with the FDA to discuss our latest findings for Androxal." Mr. Podolski continued: "We hope to determine with the FDA whether the previously reported preservation of fertility while being treated for secondary hypogonadism is a clinically relevant outcome which would allow for a clear clinical path for Androxal, an oral treatment that restores testicular function. There can be no assurances that the FDA will deem fertility preservation during treatment as clinically relevant and sufficient to support efficacy of the drug. Previously Repros showed Androxal to be non inferior to Androgel when comparing circulating testosterone levels. Androgel is a topical testosterone gel and the leading testosterone treatment with reported US sales of over US$400 million. Unlike Androgel or exogenous testosterone treatments in general, Androxal does not suppress the hypothalamic-pituitary- testes axis as evidenced by secretion of normal pituitary hormones as well as normalization of testicular production of testosterone and sperm when hypogonadal men are administered Androxal." About Repros Therapeutics Inc. Repros Therapeutics focuses on the development of oral small molecule drugs for major unmet medical needs that treat male and female reproductive disorders. REVERE INDUSTRIES: Moody's Downgrades Corp. Family Rating to 'C' ---------------------------------------------------------------- Moody's Investors Service has lowered the corporate family rating of Revere Industries, LLC, to C from Caa2 and the probability of default rating to D from Caa2 as a result of the company's failure to meet interest payment obligations on its first and second lien term loans earlier this year. Subsequent to these actions, Moody's will withdraw the ratings as a result of Revere's reorganization. In Moody's view, the issuer has been reorganized and the rated debt has been extinguished. Please refer to Moody's Withdrawal Policy on Moodys.com. During August of 2009, Revere entered into a series of agreements that resulted in the acquisition of the company by second lien lenders, the release from the original obligations related to second lien indebtedness, an amended and restated first lien credit agreement and a meaningful reduction in the amount of total debt outstanding. The obligations in Revere's new capital structure are not currently rated by Moody's. These rating actions were taken for Revere: * Corporate Family Rating, downgrade to C from Caa2; * PDR Rating, downgraded to D from Caa2; * First lien revolving credit facility due 2010, downgraded to Ca (LGD4, 50%) from Caa1 (LGD3, 35%); * First lien term loan due 2011, downgraded to Ca (LGD4, 50%) from Caa1 (LGD3, 35%); * Second lien term loan, downgraded to C (LGD6, 100%) from Caa3 (LGD 5, 83%); The rating outlook was changed to stable from negative. Moody's previous rating action of Revere was the October 1, 2007, downgrade of the corporate family rating to Caa2 from B3. Revere Industries, LLC, is a leading manufacturer of plastic and metal custom-engineered components for major industrial customers across a variety of industries. R.H. DONNELLEY: Shuman Law Files Class Action Lawsuit ----------------------------------------------------- The Shuman Law Firm disclosed that a class action has been commenced in the United States District Court for the District of Delaware on behalf of purchasers of R.H. Donnelley Corporation publicly traded securities during the period between July 26, 2007 and May 28, 2009, inclusive. Kip B. Shuman Rusty E. Glenn (866) 974-8626 kip@shumanlawfirm.com The complaint charges certain of RH Donnelley's officers and/or directors with violations of the Securities Exchange Act of 1934. RH Donnelley operates as a Yellow Pages and online local commercial search company. The complaint alleges that during the Class Period, defendants issued materially false and misleading statements regarding the company's business and financial results. Defendants caused the company to fail to properly account for its bad debt expense and timely write down its impaired goodwill. As a result of defendants' false and misleading statements, RH Donnelley's stock traded at artificially inflated prices during the Class Period, trading as high as US$66.67 in July 2007. However, beginning in February 2008, defendants began to acknowledge problems in the company's operations and with its financial results. On March 12, 2009, RH Donnelley announced that it had retained a financial advisor to assist in the evaluation of its capital structure, including various balance sheet restructuring alternatives. Then, on May 29, 2009, RH Donnelley filed for bankruptcy. The stock now trades at around six cents per share. According to the complaint, the true facts, which were known by the defendants but concealed from the investing public during the Class Period, were as follows: (a) the Company was not adequately reserving for its bad debts in violation of GAAP, causing its financial results to be materially misstated; (b) the downward pressure the Company was experiencing with its advertising revenue was not exclusively due to cyclical challenges, as represented, but was also due to a permanent shift in customers moving away from print yellow pages advertising; (c) the Company had far greater exposure to liquidity concerns and ratings downgrades than it had previously disclosed; and (d) given the turmoil in the economy and the trends related to a shift away from print advertising, the Company had no reasonable basis to make projections about its 2008 results. If you are a member of the proposed Class, you may request that the Court appoint you as lead plaintiff of the Class no later than December 22, 2009. A lead plaintiff is a class member that acts on behalf of other class members in directing the litigation. Although your ability to share in any recovery is not affected by the decision whether or not to seek appointment as a lead plaintiff, lead plaintiffs make important decisions which could affect the overall recovery for class members. The Shuman Law Firm represents investors throughout the nation, concentrating its practice in securities class actions and shareholder derivative actions. About R.H. Donnelley Based in Cary, North Carolina, R.H. Donnelley Corp., fka The Dun & Bradstreet Corp. (NYSE: RHD) -- http://www.rhdonnelley.com/-- publishes and distributes print and online directories in the U.S. It offers print directory advertising products, such as yellow pages and white pages directories. R.H. Donnelley Inc., Dex Media, Inc. and Local Launch, Inc. are the company's only direct wholly owned subsidiaries. Dex Media East, LLC, is a publisher of the official yellow pages and white pages directories for Qwest Communications International Inc. (Qwest) in the states, where Qwest is the primary incumbent local exchange carrier, such as Colorado, Iowa, Minnesota, Nebraska, New Mexico, North Dakota and South Dakota. R.H. Donnelley Corp. and 19 of its affiliates, including Dex Media East LLC, Dex Media West LLC and Dex Media Inc., filed for Chapter 11 protection on May 28, 2009 (Bank. D. Del. Case No. 09- 11833 through 09-11852), after missing a $55 million interest payment on its senior unsecured notes due April 15. James F. Conlan, Esq., Larry J. Nyhan, Esq., Jeffrey C. Steen, Esq., Jeffrey E. Bjork, Esq., and Peter K. Booth, Esq., at Sidley Austin LLP, in Chicago, Illinois represent the Debtors in their restructuring efforts. Edmon L. Morton, Esq., and Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor LLP, in Wilmington, Delaware, serve as the Debtors' local counsel. The Debtors' financial advisor is Deloitte Financial Advisory Services LLP while its investment banker is Lazard Freres & Co. LLC. The Garden City Group, Inc., is claims and noticing agent. As of March 31, 2009, the Company had $929,829,000 in total assets and $1,023,526,000 in total liabilities, resulting in $93,697,000 in total shareholders' deficit. Bankruptcy Creditors' Service, Inc., publishes R.H. Donnelley Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of R.H. Donnelley Corp. and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) R.H. DONNELLEY: Glancy Binkow & Goldberg Seeks to Recover Losses ---------------------------------------------------------------- Glancy Binkow & Goldberg LLP has filed a class action lawsuit in the United States District Court for the District of Delaware on behalf of a class consisting of all persons or entities who purchased or otherwise acquired the publicly traded securities of R.H. Donnelley Corporation between July 26, 2007 and May 28, 2009, inclusive. A copy of the Complaint is available from the court or from Glancy Binkow & Goldberg LLP. (310) 201-9150 (888) 773-9224 info@glancylaw.com The complaint charges certain of the company's executive officers and/or directors with violations of federal securities laws. RH Donnelley provides local search solutions and services in the United States. Among other things, the company publishes yellow pages directories that provide business listings, and white pages directories to residences and businesses across the United States. The complaint alleges that throughout the Class Period defendants knew or recklessly disregarded that their public statements concerning RH Donnelley's business and financial performance were materially false and misleading. Specifically, the defendants made false and/or misleading statements and/or failed to disclose that: (a) the Company, in violation of Generally Accepted Accounting Principles, was not adequately reserving for its bad debts; (b) as a result, its financial results were materially misstated; (c) downward pressure on the company's advertising revenue was not exclusively the result of cyclical challenges, but was also due to a permanent shift in customers moving away from print yellow pages advertising; (d) the company's liquidity concerns and exposure to ratings downgrades were much greater than it had previously disclosed; and (e) given the turmoil in the U.S. economy and the trends related to a shift away from print advertising, the Company had no reasonable basis to make projections about its 2008 results. The complaint further alleges that defendants repeatedly assured investors that RH Donnelley had enough liquidity to fund its operations through early 2010. As a result of defendants' false and misleading statements, RH Donnelley stock traded at artificially inflated prices during the Class Period. On March 12, 2009, the company announced that it had retained Lazard, a financial advisory and asset management firm, as a financial advisor to assist in the evaluation of RH Donnelley's capital structure, including various balance sheet restructuring alternatives. Then, on May 29, 2009, RH Donnelley filed for bankruptcy. Plaintiff seeks to recover damages on behalf of class members and is represented by Glancy Binkow & Goldberg LLP, a law firm with significant experience in prosecuting class actions, and substantial expertise in actions involving corporate fraud. Michael Goldberg, Esquire, Richard A. Maniskas, Esquire, Glancy Binkow & Goldberg LLP, 1801 Avenue of the Stars, Suite 311, Los Angeles, California 90067, (310) 201-9150 (888) 773-9224 info@glancylaw.com. About R.H. Donnelley Based in Cary, North Carolina, R.H. Donnelley Corp., fka The Dun & Bradstreet Corp. (NYSE: RHD) -- http://www.rhdonnelley.com/-- publishes and distributes print and online directories in the U.S. It offers print directory advertising products, such as yellow pages and white pages directories. R.H. Donnelley Inc., Dex Media, Inc. and Local Launch, Inc. are the company's only direct wholly owned subsidiaries. Dex Media East, LLC, is a publisher of the official yellow pages and white pages directories for Qwest Communications International Inc. (Qwest) in the states, where Qwest is the primary incumbent local exchange carrier, such as Colorado, Iowa, Minnesota, Nebraska, New Mexico, North Dakota and South Dakota. R.H. Donnelley Corp. and 19 of its affiliates, including Dex Media East LLC, Dex Media West LLC and Dex Media Inc., filed for Chapter 11 protection on May 28, 2009 (Bank. D. Del. Case No. 09- 11833 through 09-11852), after missing a $55 million interest payment on its senior unsecured notes due April 15. James F. Conlan, Esq., Larry J. Nyhan, Esq., Jeffrey C. Steen, Esq., Jeffrey E. Bjork, Esq., and Peter K. Booth, Esq., at Sidley Austin LLP, in Chicago, Illinois represent the Debtors in their restructuring efforts. Edmon L. Morton, Esq., and Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor LLP, in Wilmington, Delaware, serve as the Debtors' local counsel. The Debtors' financial advisor is Deloitte Financial Advisory Services LLP while its investment banker is Lazard Freres & Co. LLC. The Garden City Group, Inc., is claims and noticing agent. As of March 31, 2009, the Company had $929,829,000 in total assets and $1,023,526,000 in total liabilities, resulting in $93,697,000 in total shareholders' deficit. Bankruptcy Creditors' Service, Inc., publishes R.H. Donnelley Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of R.H. Donnelley Corp. and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) RITE AID: Bank Debt Trades at 13.5% Off in Secondary Market ----------------------------------------------------------- Participations in a syndicated loan under which Rite Aid Corporation is a borrower traded in the secondary market at 86.50 cents-on-the-dollar during the week ended Oct. 30, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents a drop of 0.88 percentage points from the previous week, The Journal relates. The loan matures on May 25, 2014. The Company pays 175 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's B3 rating and Standard & Poor's B+ rating. The debt is one of the biggest gainers and losers among widely quoted syndicated loans in secondary trading in the week ended Oct. 30, among the 161 loans with five or more bids. As reported by the Troubled Company Reporter on Oct. 21, 2009, Moody's assigned a Caa2 rating to Rite Aid Corporation's proposed $250 million senior secured second lien notes due 2019. All other ratings including the company's Caa2 Corporate Family Rating, Caa2 Probability of Default Rating, and SGL-3 Speculative Grade Liquidity rating were affirmed. The rating outlook remains stable. Standard & Poor's Ratings Services said that it assigned its 'B-' issue rating and '3' recovery to Rite Aid's proposed $250 million senior secured second lien note due 2019. The '3' recovery rating indicates S&P's expectation for meaningful (50%-70%) recovery in the event of a payment default. S&P also affirmed the issue rating on the company's tranche 4 term loan due 2015 based on the proposed $125 million add-on to this facility. The recovery rating on term loan tranche 4 remains at '1', indicating S&P's expectation for very high (90%-100%) recovery in the event of a payment default. Concurrently, S&P affirmed the 'B-' corporate credit rating, and the outlook is stable. Proceeds from the add- on to the tranche 4 term loan and second lien notes will be used to repay and cancel borrowings under the company's accounts receivable securitization facilities due Sept 2010. Headquartered in Camp Hill, Pennsylvania, Rite Aid Corporation (NYSE: RAD) -- http://www.riteaid.com/-- is the largest drugstore chain on the East Coast and the third largest drugstore chain in the U.S. The Company operates more than 4,900 stores in 31 states and the District of Columbia. SAN DIEGO NAT'L: Closed; U.S. Bank Assumes All Deposits ------------------------------------------------------- The Federal Deposit Insurance Corporation entered into a purchase and assumption agreement with U.S. Bank, NA, of Minneapolis, Minnesota, a wholly-owned subsidiary of U.S. Bancorp, to assume all of the deposits and essentially all of the assets of nine failed banks. The nine banks were closed October 30 by federal and state bank regulators, which appointed the FDIC as receiver. The nine banks involved in the transaction are: Bank USA, National Association, Phoenix, Arizona; California National Bank, Los Angeles, California; San Diego National Bank, San Diego, California; Pacific National Bank, San Francisco, California; Park National Bank, Chicago, Illinois; Community Bank of Lemont, Lemont, Illinois; North Houston Bank, Houston, Texas; Madisonville State Bank, Madisonville, Texas; and Citizens National Bank, Teague, Texas. As of September 30, 2009, the banks had combined assets of $19.4 billion and deposits of $15.4 billion. The nine banks had 153 offices, which will reopen as branches of U.S. Bank beginning tomorrow during their normal business hours. Depositors of the nine banks will automatically become depositors of U.S. Bank. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship to retain their deposit insurance coverage. Customers should continue to use their existing branches until U.S. Bank can fully integrate the deposit records of the nine failed banks. The FDIC and U.S. Bank entered into a loss-share transaction on approximately $14.4 billion of the combined purchased assets of $18.2 billion. U.S. Bank will share in the losses on the asset pools covered under the loss-share agreement. The loss-sharing arrangement is projected to maximize returns on the assets covered by keeping them in the private sector. The agreement also is expected to minimize disruptions for loan customers. For more information on loss share, please visit: http://www.fdic.gov/bank/individual/failed/lossshare/index.html Customers who have questions about the transaction can contact the FDIC as follows: Failed Bank (a) Bank USA, National Association 1-800-913-3062 http://www.fdic.gov/bank/individual/failed/bankusa-az.html (b) California National Bank 1-800-913-5861 http://www.fdic.gov/bank/individual/failed/calnational.html (c) San Diego National Bank 1-800-517-1839 http://www.fdic.gov/bank/individual/failed/sandiegonational.html (d) Pacific National Bank 1-800-508-8289 http://www.fdic.gov/bank/individual/failed/pacificnational-ca.html (e) Park National Bank 1-800-450-5668 http://www.fdic.gov/bank/individual/failed/park-il.html (f) Community Bank of Lemont 1-800-528-6357 http://www.fdic.gov/bank/individual/failed/community-lemont.html (g) North Houston Bank 1-800-501-1872 http://www.fdic.gov/bank/individual/failed/northhouston-tx.html (h) Madisonville State Bank 1-800-913-3053 http://www.fdic.gov/bank/individual/failed/madisonville-tx.html (i) Citizens National Bank 1-800-517-1843 http://www.fdic.gov/bank/individual/failed/citizens-teague.html The nine banks were subsidiaries of FBOP Corporation, Oak Park, Illinois. FBOP Corporation was not closed and was not subject to the October 30 actions. FBOP is run by Michael Kelly, who from his base in the Chicago suburbs snapped up banks in San Diego, Los Angeles, Houston, and San Francisco. He started in 1990 with First Bank of Oak Park, which had $125 million in assets. The FDIC's Board of Directors issued notices of assessment of cross guaranty liability against Park National Bank and Citizens National Bank. Under statutory authority, the FDIC may assess affiliated banks for losses incurred by the Deposit Insurance Fund (DIF) from the failure of other banks, such as those owned by FBOP Corporation. Congress granted the FDIC authority in 1989 to reduce the cost to the DIF for the resolution of affiliated institutions owned by the same company. The two banks were unable to pay the amounts assessed and were closed by their chartering authorities. The FDIC estimates that the cost of the nine banks to the DIF will be a combined $2.5 billion. U.S. Bank's acquisition of all the deposits was the "least costly" resolution for the FDIC's DIF compared to alternatives. The failure of the nine banks brings the nation's total number this year to 115. By number, banks in Georgia account for one-fifth of all U.S. banks closing this year, with 20 failures, followed by Illinois with 19, California with 13, and Florida with nine. SCIENTIFIC GAMES: Moody's Gives Neg. Outlook, Affirms 'Ba2' Rating ------------------------------------------------------------------ Moody's Investors Service revised Scientific Games Corporation's rating outlook to negative from stable following the company's announcement that Scientific Games International -- a wholly-owned subsidiary of SGC -- plans to issue $125 million of senior subordinated notes. The new notes will be an add-on to SGI's existing $225 million 9.25% senior subordinated notes due 2019. The new notes will be guaranteed by SGC and its wholly-owned domestic subsidiaries (other than SGI). Proceeds from the new note offering are expected to be used for a potential up-front payment towards the award of the new Italian instant ticket lottery concession, should the contract be awarded to the company's bidding group. SGC owns 20% of a consortium, Consorzio Lotterie Nazionali. CLN is currently the sole operator of the Italian Grata e Vinci instant lottery pursuant to a concession expiring in 2010 with the Italian government lottery organization -- Monopoli di Stato. The Monopoli di Stato recently issued a request for proposal and intends to formally award new multi-year concessions by mid-November 2009. The terms of the new concessions will require the winners to make a large up-front payment to the Monopoli di Stato. "Higher debt levels resulting from the new bond issuance coupled with lower than expected earnings so far in 2009 could make it difficult for SGC to improve credit metrics quickly enough to maintain its current rating," stated Peggy Holloway, Vice President and Senior Credit Officer at Moody's. Moody's expects pro forma for the new notes, net debt to EBITDA will increase above 4.0 times and EBIT to interest coverage will drop modestly below 2.0 times. The affirmation of SGC's Ba2 Corporate Family Rating incorporates an expectation that a focus on improving margins, a return to revenue growth, lower capital spending, and growing free cash flow will lead to some improvement in credit metrics over the next 12 to 18 months. The affirmation also reflects the company's leading position in the faster growing instant ticket segment of the lottery industry and good contract retention rates. Key concerns include increased price competition for new contracts and re-bids, earnings concentration, and credit metrics that are considered weak for the current rating. Ratings affirmed and LGD assessments revised: * SGC Corporate Family Rating at Ba2 * SGC Probability of Default Rating at Ba2 * SGC $200 million 6.25% senior subordinated notes due 2012 at Ba3 (LGD 5, 80% from LGD 5, 82%) * SGI $550 million term loan maturing 2013 at Baa3 (LGD 2, 19%from LGD 2, 23%) * SGI $250 million revolving credit facility expiring 2013 at Baa3 (LGD 2, 19% from LGD 2, 23%) * SGI $200 million 7.875% senior subordinated notes due 2016 at Ba3 (LGD 5, 80% from LGD 5, 82%) * SGI $350 million senior subordinated notes due 2019 at Ba3 (LGD 5, 80% from LGD 5, 82%) Moody's latest rating action was on May 18, 2009, when a Ba3 rating was assigned to SGI's proposed $200 million senior subordinated note offering. Scientific Games Corporation is a provider of services, systems, and products to lottery industry, the wide area gaming industry and the pari-mutuel wagering industry. The company operates in three business segments: Printed Products, Lottery Systems, and Diversified Gaming. The company generates about $1.0 billion of annual revenues. SCIENTIFIC GAMES: S&P Affirms Corporate Credit Rating at 'BB' ------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its ratings on Scientific Games Corp., including the 'BB' corporate credit rating. The rating outlook is stable. The affirmation follows the announcement of a proposed $125 million add-on to the 9.25% senior subordinated notes due 2019 (rated 'BB-' with a recovery rating of '5') of Scientific Games International, Inc., a wholly owned subsidiary of the company. The add-on would bring the total size of the issue to $350 million. Proceeds from the notes will be used for general corporate purposes, including the expected upfront payment obligation associated with the anticipated award of a new Italian instant ticket lottery concession. Scientific Games is a 20% equity owner of Consorzio Lotterie Nazionali, which currently holds the instant ticket concession in Italy. The members of CLN recently bid for a new nine-year concession, which will require an up-front payment of EUR800 million (assuming CLN is the only concessionaire). Scientific Games will be responsible for its share of the upfront payment (about EUR160 million partially due in 2009 with the remainder due in 2010 assuming its ownership interest remains the same). "The rating on New York City-based Scientific Games Corp. reflects the highly competitive market conditions in the lottery and pari- mutuel industries, the mature nature and capital intensity of the online lottery industry, and the company's active growth strategy," said Standard & Poor's credit analyst Melissa Long. Still, Scientific Games maintains a leadership position in the instant ticket lottery and pari-mutuel systems segments of the gaming industry, which fuels substantial recurring revenue and a stable cash flow base given long-term contracts. The company also has consistently demonstrated credit measures in line with the 'BB' rating. While the expected upfront payment related to the Italian contract is expected to result in debt leverage being a little weak for the rating over the near term, based on S&P's performance expectations, this measure will be in line with the rating over the next several quarters. The rating also reflects S&P's expectation that the company will have sufficient liquidity on hand to meet conditions outlined in its credit agreement regarding the put feature in its convertible debentures. Scientific Games is the leading integrated supplier of instant tickets, systems, and services to lotteries worldwide, and a leading supplier of server-based gaming machines and interactive sports betting terminals and systems, as well as wagering systems and services, to pari-mutuel operators. While the company remains a distant second in the online lottery segment behind industry leader Lottomatica SpA, the instant ticket portion of the lottery market has grown more rapidly in recent periods. In addition, the company is a licensed pari-mutuel gaming operator in Connecticut, Maine, and The Netherlands, and a major worldwide supplier of prepaid phone cards to cellular telephone companies. SECONDSTORY REPERTORY: Must Raise $80,000 or Go Bankrupt -------------------------------------------------------- Jeremy M. Barker at The SunBreak reports that SecondStory Repertory may go bankrupt due to the recession. SecondStory Repertory, according to The SunBreak, must raise about $80,000 by December 31, 2009, or enter bankruptcy protection and stop operations immediately. The SunBreak relates that SecondStory Repertory's budget shortfall has been increasing since 2006, despite valiant fundraising efforts, and ticket sales have been depressed by as much as 40% for its children's theatre presentations. SecondStory Rep -- http://www.secondstoryrep.org/index.html-- is a mid-size professional theatre company in Redmond. It produces and presents theatrical performances in its second-story home inside Redmond Town Center. SELECT MEDICAL: Bank Debt Trades at 4% Off in Secondary Market -------------------------------------------------------------- Participations in a syndicated loan under which Select Medical Corporation is a borrower traded in the secondary market at 96.00 cents-on-the-dollar during the week ended Oct. 30, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents a drop of 0.56 percentage points from the previous week, The Journal relates. The loan matures on Feb. 24, 2012. The Company pays 175 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's Ba2 rating and Standard & Poor's B+ rating. The debt is one of the biggest gainers and losers among widely quoted syndicated loans in secondary trading in the week ended Oct. 30, among the 161 loans with five or more bids. Headquartered in Mechanicsburg, Pennsylvania, Select Medical Corporation -- http://www.selectmedicalcorp.com/-- is an operator of specialty hospitals in the United States. Select operates 89 long-term acute care hospitals and four acute medical rehabilitation hospitals in 26 states. Select is also an operator of outpatient rehabilitation clinics in the United States, with approximately 1,106 locations in 37 states and the District of Columbia. Select also provides medical rehabilitation services on a contract basis at nursing homes, hospitals, assisted living and senior carecenters, schools and worksites. Moody's Investor Services placed Select Medical Corp.'s bank loan debt rating at 'Ba2' and senior unsubordinated debt rating at 'B3' in March 2007. The ratings still hold to date with a stable outlook. SEMGROUP LP: Gets Nod of Settlement With BNP Paribas ---------------------------------------------------- SemGroup LP and its units obtained approval of 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 assure the Court that the Settlement is fair, reasonable, and in the best interest of the Debtors' estates. 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. SemGroup, LP, has won confirmation from the U.S. Bankruptcy Court of its Fourth Amended Plan of Reorganization on October 28, 2008. 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: Gets Nod of Settlement With Fortis Bank ---------------------------------------------------- SemGroup L.P. and its debtor affiliates obtained approval from the Bankruptcy Court 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. National City Bank withdrew an objection to the settlement. 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. SemGroup, LP, has won confirmation from the U.S. Bankruptcy Court of its Fourth Amended Plan of Reorganization on October 28, 2008. 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: Seeks Approval of Settlement with Gulfmark ------------------------------------------------------- SemGroup LP and its units ask the Court to approve a settlement entered into by Debtors SemGroup, L.P., SemCrude, L.P., and Eaglwing, L.P., with Gulfmark Energy, Inc. SemCrude and Eaglwing were parties to several purchase and sale agreement with Gulfmark. The Agreements were for the purchase and sale of crude oil. Eaglwing contends Gulfmark owes it $169,622 as a postpetition obligation. Gulfmark asserts a total prepetition claim against Eaglwing for $139,688. Of this amount, Gulfmark contends $133,037 is entitled to postpetition priority treatment pursuant to Section 503(b)(9) of the Bankruptcy Code. The parties have agreed that a net amount of $36,000 is due and should be paid to Eaglwing. As part of the settlement, Gulfmark will waive all of its rights to collect its prepetition claim, including its entire Section 503(b)(9) claim. SemCrude contends $73,163 is due from Gulfmark for postpetition obligations. Gulfmark contends that it is due a credit of $48,074 against this obligation leaving a net amount owing of $25,089. The parties have agreed to compromise this claim for a net amount of $50,000 to be paid by Gulfmark to SemCrude. Gulfmark also has a prepetition unsecured non-priority claim of $277,704 against SemCrude. This claim will be waived as part of the settlement. The parties agree that the total amount owed by Gulfmark is $86,000 as part of the settlement. The parties further agree that this amount will be paid immediately and refunded in the event the settlement is not approved. 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. SemGroup, LP, has won confirmation from the U.S. Bankruptcy Court of its Fourth Amended Plan of Reorganization on October 28, 2008. 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) SENTINEL MANAGEMENT: Receiver Can Assert Customer Claims in Bankr. ------------------------------------------------------------------ WestLaw reports that pursuant to a district court's orders which appointed a receiver for an enterprise that included the business entities with which a holding company had a portfolio management agreement and provided that funds on deposit with the debtor- investment advisor were the funds of the enterprise's customers that were to be transferred to the receiver for the customers' benefit, to be distributed through the receivership estate, the receiver had standing to assert claims in the debtor's bankruptcy case on the behalf of the enterprise's customers. This included the claim of the holding company. In re Sentinel Management Group, Inc., --- B.R. ----, 2009 WL 3113254 (Bankr. N.D. Ill.) (Squires, J.). Based in Northbrook, Illinois, Sentinel Management Group Inc. -- http://www.sentinelmgi.com/-- was a full service firm offering a variety of security solutions. The Company filed a voluntary Chapter 11 petition on August 17, 2007 (Bankr. N.D. Ill. Case No. 07-14987). Ronald Barliant, Esq., Randall Klein, Esq., and Kathryn A. Pamenter, Esq., at Goldberg, Kohn, Bell & Black Rosenbloom & Moritz, Ltd., represent the Debtor as counsel. Quinn, Emanuel Urquhart Oliver & Hedges, LLP, represents the Official Committee of Unsecured Creditors as counsel. DLA Piper US LLP is the Committee's co-counsel. When the Debtor sought bankruptcy protection, it listed assets and debts of more than $100 million. On August 28, 2007, the Court approved Frederick Grede as the Debtor's Chapter 11 Trustee. Marc I. Fenton, Esq., at DLA Piper US LLP, and Vincent E. Lazar, Esq, at Jenner & Block LLP, represent the Chapter 11 Trustee as counsel. As reported in the Troubled Company Reporter on January 2, 2009, the Court confirmed a plan of liquidation for Sentinel on December 15, 2008, and Mr. Grede is managing the liquidation. A copy of the Plan is available for free at: http://bankrupt.com/misc/SentinelManagement_4thAmendedPlan.pdf SIERRA KINGS DISTRICT: Files for Bankruptcy Protection ------------------------------------------------------ Barbara Anderson at The Fresno Bee reports that The Sierra Kings District Hospital board of directors has decided to file for Chapter 9 bankruptcy protection in the U.S. Bankruptcy Court for the Eastern District of California. According to The Fresno Bee, The Sierra Kings District has a debt of more than $3 million in bills it owes to vendors, but Sandy Haskins, who took over operations of the hospital last month as acting chief when the board placed Pamela Ott on unpaid administrative leave pending the outcome of elder abuse charges against her in Kern County, said that the "cash resources are nowhere near that." Sierra Kings District Hospital -- http://www.skdh.org/-- provides health care in Reedley California. SIMMONS CO: FTC Grants Early Termination of HSR Waiting Period -------------------------------------------------------------- Simmons Bedding Company along with Ares Management LLC and Ontario Teachers' Pension Plan, disclosed that each has received notice from the Federal Trade Commission granting early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. The notice relates to the potential acquisition of Simmons and all of its subsidiaries, as well as its parent Bedding Holdco Incorporated, by certain affiliates of Ares and Teachers' Private Capital, the private investment department of Teachers', which was announced on September 25, 2009. With this notice from the FTC, all waiting periods under applicable antitrust and competition regulations in the U.S. and Canada have either terminated or expired and the parties have now satisfied one of the key conditions to consummating the Transaction. As previously announced on October 13, 2009, the Transaction remains subject to, among other things, the effectiveness of a plan of reorganization under chapter 11 of the U.S. Bankruptcy Code with respect to which Simmons Company and Simmons are currently soliciting acceptances from creditors. Votes from creditors must be received by Epiq Bankruptcy Solutions, LLC, Simmons' voting agent, before November 12, 2009. Throughout the restructuring process, Simmons expects to continue normal operations under its current ownership structure and does not anticipate any changes to its overall business or its ability to meet its customers' needs. About Simmons Company Simmons Company -- http://www.simmons.com/-- is one of the top three US mattress makers alongside rivals Sealy and Serta. Simmons Bedding Company is the indirect subsidiary of Simmons Company. Simmons Bedding manufactures and markets a broad range of products including Beautyrest(R), Beautyrest Black(R), Beautyrest Studio(TM), ComforPedic by Simmons(TM), ComforPedic Loft(TM), Natural Care(R), Beautyrest Beginnings(TM) and BeautySleep(R). Simmons Bedding operates 19 conventional bedding manufacturing facilities and two juvenile bedding manufacturing facilities across the United States, Canada and Puerto Rico. Simmons Bedding also serves as a key supplier of beds to many of the world's leading hotel groups and resort properties. Simmons Bedding is committed to developing superior mattresses and promoting a higher quality sleep for consumers around the world. As of June 27, 2009, Simmons Co. had $895.9 million in total assets and $1.26 billion in total liabilities, resulting in stockholder's deficit of $367.5 million. Weil, Gotshal & Manges LLP is acting as legal counsel and Miller Buckfire & Co., LLC is acting as financial advisor to Simmons. Sullivan & Cromwell LLP is acting as legal counsel and Goldman, Sachs & Co., is acting as financial advisor to Ares and Teachers'. SOURCE MEDIA: Moody's Downgrades Corporate Family Rating to 'B2' ---------------------------------------------------------------- Moody's Investors Service downgraded to B2 from B1 the Corporate Family Ratings and the ratings on the senior secured credit facilities of Source Media Inc. and Accuity Inc. Concurrently, the Probability of Default Ratings were lowered to B3 from B2. The ratings outlook remains negative. The downgrade to B2 reflects a shortfall in the combined companies' revenue and earnings as compared to previous expectations, resulting in financial leverage of 6.1 times at June 30, 2009. Notable revenue growth and margin expansion in Accuity's compliance and data products business has only partially offset demand weakness in Source Media's trade publications and conferences. On a combined basis, revenues declined 15% in the first half of 2009 compared to the prior year. However, adjusted EBITDA fell by just 10% and reflects a significant level of cost management undertaken by the management team. Source Media's flagship brands, American Banker and The Bond Buyer, continue their leadership in the banking and capital markets niche markets but, along with Source Media's other brands, have been significantly impacted by financial service companies' reduced spending on advertising and subscriptions during the recent economic downturn. While there are signs of revenue stabilization, the business-to-business sector is experiencing a secular decline in print advertising in the face of electronic substitution, which Moody's believes will prohibit a material rebound in revenues in the near-term. The negative outlook reflects Moody's view that Source Media and Accuity's liquidity profile has weakened due to an anticipated covenant default and the refinancing risk associated with the upcoming maturity of the companies' senior secured revolvers. The credit agreement contains scheduled covenant adjustments over the next several quarters that will likely lead to a covenant default in June 2010, if not before, significantly reducing effective availability on the revolver. At June 30, 2009, $20 million was outstanding and approximately $14 million available on the combined $35 million revolver commitment. Moody's expect the companies to be cash flow positive over the next four quarters and anticipate that cash will be used to reduce the outstanding revolver balance. However, projected cash flow combined with the June 2009 cash balance of approximately $6 million may not be sufficient to fully repay the revolvers before they mature on November 8, 2010. The ratings could be downgraded if management is unable to successfully resolve the covenant issue and near-term maturity in a timely manner so as to maintain an adequate level of external liquidity. Moody's downgraded these ratings of Source Media Inc.: * $30 million senior secured revolver due 2010, to B2 (LGD3, 34%) from B1 (LGD3, 34%) * $87 million senior secured term loan B due 2011, to B2 (LGD3, 34%) from B1 (LGD3, 34%) * Corporate Family Rating, to B2 from B1 * Probability of Default Rating, to B3 from B2 Moody's downgraded these ratings of Accuity Inc.: * $5 million senior secured revolver due 2010, to B2 (LGD3, 34%) from B1 (LGD3, 34%) * $61 million senior secured term loan B due 2011, to B2 (LGD3, 34%) from B1 (LGD3, 34%) * Corporate Family Rating, to B2 from B1 * Probability of Default Rating, to B3 from B2 The previous rating action for Source Media and Accuity occurred on August 19, 2008 when Moody's confirmed the ratings and changed the outlook to negative. Source Media and Accuity's ratings were assigned by evaluating factors Moody's believe are relevant to the credit profile of the issuers, such as i) the business risk and competitive position of the companies versus others within their industry, ii) the capital structure and financial risk of the companies, iii) the projected performance of the companies 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 Source Media and Accuity's core industries and Source Media and Accuity's ratings are believed to be comparable to those of other issuers of similar credit risk. Source Media and Accuity are headquartered in New York, New York and are leading providers of information, data, and tools for professionals in the financial services and related technologies markets. Investcorp owns 100% of both companies. Combined revenues for the twelve month period ended June 30, 2009, were $173 million. SPANSION INC: Begins Omnibus Claims Objections ---------------------------------------------- To address and reconcile claims filed against them, Spansion Inc. and its units have filed their first and second omnibus claims objections. In the first omnibus claims objection, the Debtors ask the Court to reduce, disallow, or expunge certain duplicative and superseded claims. The Debtors tell the Court that they have reviewed the Proofs of Claim and have determined the Duplicative Claims are duplicative of other Proofs of Claims, identified as Surviving Claims, filed against the same Debtor or another Debtor on account of the same alleged liability. The Debtors aver that they should not be required to pay twice on account of the same obligation and the claimants that asserted Duplicative Claims are not entitled to double recovery. A list of the Duplicative Claims is available for free at: http://bankrupt.com/misc/Spansion_DuplicativeClaims.pdf The Debtors have also determined Proofs of Claims that have been amended or superseded by later filed Proofs of Claims, and thus should be disallowed. A list of the Amended and Superseded Claims is available for free at: http://bankrupt.com/misc/Spansion_AmendedClaims.pdf In the second omnibus claims objection, the Debtors ask the Court to reclassify claims which are misclassified, either as a matter of law or otherwise. The Debtors tell the Court that the Claimants that filed the Misclassified Claims incorrectly assert that they are entitled to an administrative claim pursuant to Section 503(b), an unsecured priority claim pursuant to Section 507(a), or a secured claim when, in fact, the Debtors have determined that the Misclassified Claims should be designated otherwise. According to the Debtors, failure to reclassify the Misclassified Claims could result in the Claimant asserting that Misclassified Claim receiving an unwarranted recovery to the detriment of those creditors in the Chapter 11 cases holding valid claims against the Debtors. Accordingly, the Debtors object to the Misclassified Claims, a list of which is available for free at: http://bankrupt.com/misc/Spansion_MisclassifiedClaims.pdf Spansion Bankruptcy News provides definitive coverage of all omnibus objections, responses by claimants to those objections, and all orders entered by the Court and other updates to the Chapter 11 proceedings of Spansion 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: Creditors Panel Gets Nod to Hire Landis as Counsel ---------------------------------------------------------------- The Official Committee of Unsecured Creditors of Spansion Inc. obtained permission from the Bankruptcy Court to retain Landis Rath & Cobb LLP as its conflicts counsel, nunc pro tunc to September 30, 2009. As previously reported, Committee selected Paul, Hastings, Janofsky & Walker LLP as its bankruptcy counsel and Young Conaway Stargatt & Taylor, LLP, as its co-counsel. The Committee tells the Court that Paul Hastings and Young Conaway have identified certain potential conflicts of interest that prevent them from, among other things, being adverse to Samsung Co., Ltd. Prior to the Petition Date, the Debtors initiated two lawsuits against Samsung for patent infringement. One lawsuit demands damages and injunctive relief, and is pending before the U.S. District Court for the District of Delaware. The other lawsuit requests invocation of tariff protections, preventing Samsung's importation of patent infringing product into the United States, and is pending before the International Trade Commission. Thus, the Committee seeks to retain Landis Rath as counsel for conflict matters. The Committee says it has selected Landis Rath because of its expertise in the field of debtor and creditor law and business reorganizations under Chapter 11 of the Bankruptcy Code and experience handling matters in the District of Delaware. Landis Rath will render legal services to the Committee only in connection with the Conflict Matters. The Debtors will pay Landis Rath based on the firm's current hourly rates: Attorney Rate/Hour -------- -------- Daniel B. Rath $525 William E. Chipman, Jr. $500 Kerri M. Mumford $370 Mark D. Olivere $340 The Debtors will also reimburse Landis Rath for its out-of-pocket and reasonable expenses. William E. Chipman, Jr., Esq., at Landis Rath & Cobb LLP, in Wilmington, Delaware, assures the Court that his firm is a "disinterested person" as that term is defined in Section 101(14) 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: Drawbridge Buys $2.27 Million Claim From Fulcrum -------------------------------------------------------------- In separate Court filings for the period October 14, 2009, to October 20, 2009, two of Spansion Inc.'s creditors disclosed that they intend to transfer each of their claims against the Debtors to these parties: Transferor Transferee Amount ---------- ---------- ------ Fulcrum Credit Partners Drawbridge Special LLC Opportunities Fund Ltd. $2,272,796 Sonya Burson United States Debt Recovery LLC 2,106 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) SPECTRUM BRANDS: Amends Employment Pact With K. Hussey ------------------------------------------------------ In a Form 8-K filed with the United States Securities and Exchange Commission dated October 28, 2009, Spectrum Brands, Inc., disclosed that effective October 22, 2009, the company entered into an amended and restated employment agreement with Kent J. Hussey for his employment as the Company's Chief Executive Officer. The Employment Agreement provides: * An initial term through September 30, 2012, subject to renewal for successive one-year periods as mutually agreed between Mr. Hussey and the Company. Either party may terminate the employment at any time upon at least 60 days' notice. Upon voluntary resignation by Mr. Hussey or termination for "cause," the Company must pay to Mr. Hussey any unpaid base salary and accrued benefits through the date of Mr. Hussey's termination. * A base salary of $825,000 per annum. The Company's board of directors will review the base salary from time to time and may increase it in its discretion. Mr. Hussey is also entitled to an annual bonus, based on a target of 125% of base salary and based upon the Company's achieving certain annual performance goals established by the Company's board of directors from time to time. * Subject to approval of the Company's board of directors, Mr. Hussey is entitled to receive stock, stock-based awards or other consideration, with those awards containing certain vesting conditions based on the lapse of time and achievement of the Company's performance objectives established by the Company's board of directors from time to time. * Upon the Company's termination of Mr. Hussey's employment without cause or for death or disability, subject to Mr. Hussey's execution of a separation agreement and release of claims, the Company will pay as severance an amount in cash equal to two times the executive officer's base salary and annual target bonus. In addition, Mr. Hussey would be entitled to a pro-rated portion of the annual bonus which Mr. Hussey would have earned if his employment had not ceased as well as the continuation of certain benefits for a period of 24 months or, if greater, the remainder of the initial term of the Employment Agreement. * If Mr. Hussey resigns upon the occurrence of specified circumstances that would constitute a "constructive termination" or 60 days following a "change in control," his resignation will be treated as a termination by the Company without cause. * During the term of Mr. Hussey's employment and for period of two years thereafter, Mr. Hussey is subject to non-compete and non-solicit covenants. About Spectrum Brands Spectrum Brands is a global consumer products company and a leading supplier of batteries, shaving and grooming products, personal care products, specialty pet supplies, lawn & garden and home pest control products, personal insect repellents and portable lighting. Helping to meet the needs of consumers worldwide, included in its portfolio of widely trusted brands are Rayovac(R), Remington(R), Varta(R), Tetra(R), Marineland(R), Nature's Miracle(R), Dingo(R), 8-In-1(R), Spectracide(R), Cutter(R), Repel(R), and HotShot(R). Spectrum Brands' products are sold by the world's top 25 retailers and are available in more than one million stores in more than 120 countries around the world. Headquartered in Atlanta, Georgia, Spectrum Brands generates annual revenue from continuing operations in excess of $2 billion. Spectrum Brands, Inc., and 13 subsidiaries filed separate Chapter 11 petitions on February 3, 2009 (Bankr. W.D. Tex. Lead Case No. 09-50455). The Hon. Ronald B. King presides over the cases. D. J. Baker, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in New York; Harry A. Perrin, Esq., and D. Bobbitt Noel, Jr., Esq., at Vinson & Elkins LLP, in Houston, Texas; and William B. Kingman, Esq., in San Antonio, serve as the Debtors' counsel. Sutherland Asbill & Brennan LLP acts as special counsel; Perella Weinberg Partners LP, as financial advisor; Deloitte Tax LLP as tax consultant; and Logan & Company Inc. as claims and noticing agent. An official committee of equity security holders -- composed of Mittleman Brothers, LLC, Ralston H. Coffin, Cookie Jar LLC and the Peter and Karen Locke Living Trust -- was appointed by the U.S. Trustee in Spectrum's bankruptcy cases on March 11, 2009. The Equity Committee has tapped Alston & Bird LLP as its bankruptcy counsel. As of September 30, 2008, Spectrum Brands had $2,247,479,000 in total assets and $3,274,717,000 in total liabilities. On July 15, 2009, the U.S. Bankruptcy Court for the Western District of Texas entered a written order confirming the Company's joint plan of reorganization. On July 15, the official committee of equity security holders appointed in the Chapter 11 cases appealed the confirmation order. By order dated August 19, the Fifth Circuit Court of Appeals lifted this stay. On August 28, the Company emerged from bankruptcy. SPECTRUM BRANDS: Offers 3.33MM New Shares to Employees ------------------------------------------------------ In a post-Effective S-8 filing with the U.S. Securities and Exchange Commission on October 15, 2009, Anthony L. Genito, Spectrum Brands, Inc.'s chief financial officer, disclosed the company has registered an aggregate of 3,333,333 shares of Common Stock, par value $0.01 per share under the 2009 Incentive Plan at a proposed maximum offering price of $22.90 per share or for a maximum aggregate offering price of $76,333,325. This price is determined in accordance with Rules 457(c) and (h) under the Securities Act, based on the average of the high and low prices on the OTC Bulletin Board on October 13, 2009. Pursuant to the company's Plan of Reorganization, on the Effective Date, the Company's old common stock and other equity interests existing immediately prior to the Effective Date were cancelled and the 2009 Incentive Plan for all members of management employees, and directors of the reorganized Debtors and any of the Company's other subsidiaries as are designated by the Company's board of directors, with respect to the New Common Stock became effective. Effective as of the Effective Date, the Company's board of directors adopted a new management equity program under the 2009 Incentive Plan. Under the Management Equity Program, grants will be made over a three-year period in three tranches and will consist of a mix of stock options and restricted stock units. The Management Equity Program adopted by the Company's board of directors on the Effective Date, contemplates grants of up to 7.5% of the total number of shares of New Common Stock issued or reserved for issuance on the Effective Date, equating to 2,500,000 shares, out of the total of 3,333,333 shares available to be granted under the 2009 Incentive Plan. Restricted Stock Granted to Four Executives Spectrum Brands also disclosed in a regulatory filing that the Company made grants of restricted stock pursuant to restricted stock award agreements to certain Company employees, including each of: -- Kent J. Hussey, the Company's Chairman and Chief Executive Officer; -- David R. Lumley, the Company's Co-Chief Operating Officer and President, Global Batteries and Personal Care; -- Anthony L. Genito, the Company's Executive Vice President, Chief Financial Officer and Chief Accounting Officer; and -- John A. Heil, the Company's Co-Chief Operating Officer and President, Global Pet Supplies. Each of the award agreements incorporates the terms of the Company's 2009 Incentive Plan. Pursuant to the award agreements, the executives received: Executive No. of Shares --------- ------------- Kent Hussey 222,222 David Lumley 166,667 Anthony Genito 111,111 John Heil 111,111 The shares of restricted stock granted pursuant to the award agreements are subject to the employee remaining in employment of the Company, its subsidiaries or affiliates. Upon the terms and subject to the conditions in the respective award agreements, the restrictions on 75% of the shares issued pursuant to the agreements are scheduled to lapse on October 1, 2010, and the restrictions on the remaining 25% of the shares are scheduled to lapse on October 1, 2011. In addition, the award agreements each provides that the restrictions lapse upon the occurrence of a change in control of the Company, as defined in the Plan. In separate Form 4 filings, the four officers disclosed that on August 28, 2009, they disposed of shares of Spectrum Common Stock at $0 per share: Executive No. of Disposed Shares --------- ---------------------- Anthony L. Genito 130,359 David R. Lumley 262,169 John Heil 326,167 Kent J. Hussey 661,039 The shares of common stock were extinguished on August 28, 2009, by operation of the company's joint amended plan of reorganization. About Spectrum Brands Spectrum Brands is a global consumer products company and a leading supplier of batteries, shaving and grooming products, personal care products, specialty pet supplies, lawn & garden and home pest control products, personal insect repellents and portable lighting. Helping to meet the needs of consumers worldwide, included in its portfolio of widely trusted brands are Rayovac(R), Remington(R), Varta(R), Tetra(R), Marineland(R), Nature's Miracle(R), Dingo(R), 8-In-1(R), Spectracide(R), Cutter(R), Repel(R), and HotShot(R). Spectrum Brands' products are sold by the world's top 25 retailers and are available in more than one million stores in more than 120 countries around the world. Headquartered in Atlanta, Georgia, Spectrum Brands generates annual revenue from continuing operations in excess of $2 billion. Spectrum Brands, Inc., and 13 subsidiaries filed separate Chapter 11 petitions on February 3, 2009 (Bankr. W.D. Tex. Lead Case No. 09-50455). The Hon. Ronald B. King presides over the cases. D. J. Baker, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in New York; Harry A. Perrin, Esq., and D. Bobbitt Noel, Jr., Esq., at Vinson & Elkins LLP, in Houston, Texas; and William B. Kingman, Esq., in San Antonio, serve as the Debtors' counsel. Sutherland Asbill & Brennan LLP acts as special counsel; Perella Weinberg Partners LP, as financial advisor; Deloitte Tax LLP as tax consultant; and Logan & Company Inc. as claims and noticing agent. An official committee of equity security holders -- composed of Mittleman Brothers, LLC, Ralston H. Coffin, Cookie Jar LLC and the Peter and Karen Locke Living Trust -- was appointed by the U.S. Trustee in Spectrum's bankruptcy cases on March 11, 2009. The Equity Committee has tapped Alston & Bird LLP as its bankruptcy counsel. As of September 30, 2008, Spectrum Brands had $2,247,479,000 in total assets and $3,274,717,000 in total liabilities. On July 15, 2009, the U.S. Bankruptcy Court for the Western District of Texas entered a written order confirming the Company's joint plan of reorganization. On July 15, the official committee of equity security holders appointed in the Chapter 11 cases appealed the confirmation order. By order dated August 19, the Fifth Circuit Court of Appeals lifted this stay. On August 28, the Company emerged from bankruptcy. SPECTRUM BRANDS: Professionals Final Fee Applications ----------------------------------------------------- Seven bankruptcy professionals ask the Court to allow their final applications for payment of fees and reimbursements of actual, reasonable and necessary expenses for the period February 3 through August 28, 2009: Professional Fees Expenses Total ------------ ------------ -------- ------ Ernst & Young LLP $1,908,551 $99,230 $2,007,781 KMPG LLP $3,016,961 $45,745 $3,062,706 Law Offices of $199,697 $10,500 $210,197 William B. Kingman, P.C. Latham & Watkins LLP $640,459 $7,028 $647,487 Skadden, Arps, slate, $14,252,289 $421,094 $14,673,383 Meagher & Flom LLP Sutherland Asbill $131,972 $2,178 $134,150 & Brennan LLP Vinson & Elkins L.L.P. $3,091,017 $95,235 $3,186,252 Perella Weinberg $10,956,106 Partners LP Perella Weinberg also seeks approval of a $9,650,000 transaction fee. The Official Committee of Equity Security Holders seeks payment of a $209,449 administrative expense incurred by one of its member, Mittleman Brothers, LLP. The Equity Committee further seeks payment and reimbursement of the fees and expenses incurred by its professionals: Professional Fees Expenses Total ------------ ---- -------- ----- Allen & Co. $1,000,000 $131,793 $1,131,793 Alston Bird LLP - - $1,079,570 Jackson Walker L.L.P. $57,753 $18,247 $76,000 Alston Bird tells the Court that it wishes to include $55,690 for its fees and expenses incurred in representing the Debtors relating to the order confirming the Debtors' Plan of Reorganization, for the period August 29 to October 8, 2009. Alston's new final fee application now stands at $1,135,260. U.S. Trustee Objects to Allen & Co.'s Final Fee Application Charles F. Macvay, the United States Trustee for Region 7, asks the Court to deny Allen & Co.'s final fee application for the firm's failure to show what services it has rendered during the period from July 25 through August 25, 2009. Allen & Co. serves as financial advisor for the Official Committee of Equity Security Holders. The U.S. Trustee further objects to the $112,262 of attorneys' fees and expenses incurred by Allen. The U.S. Trustee points out that the fees and expenses appear to be related to Allen's engagement of its own counsel and the U.S. Trustee asserts the requested attorneys' fees and expenses do not appear to be necessary. The U.S. Trustee also objects to the remaining $19,530 of Allen's expenses complaining that Allen does not appear to have provided a detailed description of the expenses in its Final Fee Application. The U.S. Trustee, thus, asks that Allen provide a detailed description of its expenses, and, subject to a review of the expenses, the U.S. Trustee may withdraw its objection to the expenses. In a separate filing, the U.S. Trustee asks the Court to deny the $201,424 requested by the Equity Committee as reimbursement for expenses related to insurance premiums to secured professional liability protecting Allen & Company. The U.S. Trustee objects to this particular expense because the Equity Committee has the burden to establish that its expense were actual and necessary in the performance of its duties. The U.S. Trustee is concerned that the expenses for the insurance premiums for Allen & Company were not necessary in the performance of the Equity Committee's duties. About Spectrum Brands Spectrum Brands is a global consumer products company and a leading supplier of batteries, shaving and grooming products, personal care products, specialty pet supplies, lawn & garden and home pest control products, personal insect repellents and portable lighting. Helping to meet the needs of consumers worldwide, included in its portfolio of widely trusted brands are Rayovac(R), Remington(R), Varta(R), Tetra(R), Marineland(R), Nature's Miracle(R), Dingo(R), 8-In-1(R), Spectracide(R), Cutter(R), Repel(R), and HotShot(R). Spectrum Brands' products are sold by the world's top 25 retailers and are available in more than one million stores in more than 120 countries around the world. Headquartered in Atlanta, Georgia, Spectrum Brands generates annual revenue from continuing operations in excess of $2 billion. Spectrum Brands, Inc., and 13 subsidiaries filed separate Chapter 11 petitions on February 3, 2009 (Bankr. W.D. Tex. Lead Case No. 09-50455). The Hon. Ronald B. King presides over the cases. D. J. Baker, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in New York; Harry A. Perrin, Esq., and D. Bobbitt Noel, Jr., Esq., at Vinson & Elkins LLP, in Houston, Texas; and William B. Kingman, Esq., in San Antonio, serve as the Debtors' counsel. Sutherland Asbill & Brennan LLP acts as special counsel; Perella Weinberg Partners LP, as financial advisor; Deloitte Tax LLP as tax consultant; and Logan & Company Inc. as claims and noticing agent. An official committee of equity security holders -- composed of Mittleman Brothers, LLC, Ralston H. Coffin, Cookie Jar LLC and the Peter and Karen Locke Living Trust -- was appointed by the U.S. Trustee in Spectrum's bankruptcy cases on March 11, 2009. The Equity Committee has tapped Alston & Bird LLP as its bankruptcy counsel. As of September 30, 2008, Spectrum Brands had $2,247,479,000 in total assets and $3,274,717,000 in total liabilities. On July 15, 2009, the U.S. Bankruptcy Court for the Western District of Texas entered a written order confirming the Company's joint plan of reorganization. On July 15, the official committee of equity security holders appointed in the Chapter 11 cases appealed the confirmation order. By order dated August 19, the Fifth Circuit Court of Appeals lifted this stay. On August 28, the Company emerged from bankruptcy. STAMFORD CENTER: Exits Bankruptcy Protection -------------------------------------------- The Stamford Center for the Arts has closed on its new loan facility and has successfully emerged from bankruptcy protection. The new financing will fund payments due under its confirmed Chapter 11 plan, and enables the SCA to implement its new business plan and to continue serving the arts community for years to come. "The SCA is tremendously proud of its ability to successfully emerge from its bankruptcy case in close to one year, and to emerge as such a healthy and well positioned organization. As of the completion of the new financing agreement today, the SCA's approved bankruptcy plan will be effective, and the SCA can proceed in implementing its new business plan without any further bankruptcy court oversight or involvement," says Frank Baker, lead attorney supporting the Center and Vice Chairman of the Board of Directors. As a bellwether for the economic downturn, Performing Arts Centers across the United States have been closing for a variety of economic, demographic and funding factors. The SCA is rare among them in that it has been able to overcome the massive financial challenges it faced. The SCA has never closed its doors, and now has emerged with a strong business model for the future and growth of the Center as well as the downtown business community. "The SCA is essential to the economic vitality of downtown Stamford. Our repositioned and reinvented organization is once again poised to serve as a leading cultural arts center for Stamford, Fairfield County and beyond," says Michael Widland, Chairman of the Stamford Center for the Arts. Mr. Widland states, "The Stamford Center for the Arts is extremely grateful to the law offices of Finn Dixon & Herling LLP. They were instrumental in helping SCA get out of bankruptcy by not only donating their time but also facilitating the proceedings." Busy months are ahead for SCA as the Palace Theatre is set to showcase a wide variety of talented artists such as performances by The Derek Trucks Band, Warren Miller's Dynasty, The Nutcracker and many more shows and performances still to be announced. Headquartered in Stamford, Connecticut, Stamford Center for the Arts Inc. fkn Stamford Theatre Partnership -- http://www.stamfordcenterforthearts.org/-- was created by Champion International Corp., Pitney Bowes Inc. and F.D. Rich Company Inc. The Debtor filed for bankruptcy protection on Aug. 22, 2008 (Bankr. D.C. Case No.: 08-50773). Patrick J. McHugh, Esq., at Finn Dixon and Herling is the Debtor's counsel. When the Debtor filed for bankruptcy, it listed assets of $10,000,000 to $50,000,000 and debts of $1,000,000 to $10,000,000. STUDENT FINANCE: Pepper Hamilton Can't Collect From Insurers ------------------------------------------------------------ Chris Mondics at The Philadelphia Inquirer reports that New York state's highest court has ruled that Pepper Hamilton L.L.P., accused of negligence in its representation of Student Finance Corp., may not collect from two of its malpractice insurers, as the firm failed to disclose that it might be the target of a lawsuit. Pepper Hamilton had stopped representing Philadelphia Newspapers in 2002 based on concerns about its operations. According to Philadelphia Inquirer, Pepper Hamilton was sued by the bankruptcy trustee on grounds that the firm failed to ferret out information about SFC's fraudulent finances and that it furthered the deception. According to Philadelphia Inquirer, The New York State Court of Appeals ruled that Pepper Hamilton should have informed its insurance carriers, Executive Risk Indemnity Inc. and Twin City Fire Insurance Co., of the risk that it might be sued at the time it renewed its coverage. The report quoted the Court of Appeals as saying, "The law firm's knowledge of its client's fraudulent payments prior to its application for excess coverage coupled with the fact that a reasonable attorney would have concluded that the law firm defendants would likely be included in the litigation . . . create an obligation for the law firm to inform its insurers." Philadelphia Inquirer states that Pepper Hamilton's executive partner, Robert Heideck, denied the allegations. Based in New Castle, Delaware, Student Finance Corp., was in the business of originating and acquiring non-guaranteed student loans and tuition installment agreements primarily from truck and driving schools. On Nov. 4, 2002, the Court entered an Order for Relief under Chapter 11 of the Bankruptcy Code. On Sept. 29, 2003, the Court appointed Charles A. Stanziale, Jr., as the chapter 11 trustee. The case was converted to a Chapter 7 liquidation on Nov. 14, 2003 with Mr. Stanziale appointed as the chapter 7 trustee. Fox Rothschild LLP represents Mr. Stanziale. On June 5, 2005, four trucking schools filed an involuntary petition against the company (Bankr. D. Del. Case No. 02-11620). TELECONNECT INC: Posts $504,418 Net Loss in Third Quarter --------------------------------------------------------- Teleconnect, Inc. reported a net loss of $504,418 for the three months ended June 30, 2009, compared with a net loss of $722,708 in the same period of 2008. Sales for the three months ended June 30, 2009, increased 74.5% to $92,354 from $52,927 for the quarter ended June 30, 2008. Loss from continuing operations before income taxes and discontinued operations were $323,136 and $387,487 for the three months ended June 30, 2008, and 2007, respectively. Discontinued operations had a net loss of $181,282 for the three months ended June 30, 2009, as compared to a net loss of $335,221 during the comparable period in 2008. The Company expects to sell the discontinued operations during fiscal year 2010. For the nine months ended June 30, 2009, net loss was $1,166,711, compared with a net loss of $2,305,615 in the comparable period of 2008. Sales for the nine months ended June 30, 2009, increased 134.3% to $242,689 from $103,571 for the nine months ended June 30, 2008. At June 30, 2009, the Company's consolidated balance sheets showed $4,022,463 in total assets and $6,579,129 in total liabilities, resulting in a $2,556,666 stockholders' deficit. The Company's consolidated balance sheets at June 30, 2009, also showed strained liquidity with $2,797,221 in total current assets available to pay $6,437,789 in total current liabilities. A full-text copy of the Company's consolidated financial statements for the three and nine months ended June 30, 2009, is available for free at http://researcharchives.com/t/s?47d8 The Company reported a net loss of $3,510,739 on sales of $181,935 for the year ended September 30, 2008, compared with a net loss of $2,999,829 on sales of $28,485 for the year ended September 30, 2007. At September 30, 2008, the Company's consolidated balance sheet showed $4,205,858 in total assets and $8,014,982 in total liabilities, resulting in a $3,809,124 stockholders' deficit. The Company's consolidated balance sheets at September 30, 2008, also showed strained liquidity with $2,727,676 in total current assets available to pay $8,014,982 in total current liabilities. A full-text copy of the Company's consolidated financial statements for the year ended September 30, 2008, is available for free at http://researcharchives.com/t/s?47d6 Going Concern Doubt On Aug. 12, 2009, Coulter & Justus, P.C., in Knoxville, Tennessee, expressed substantial doubt about Teleconnect Inc.'s ability to continue as a going concern after auditing the Company's financial statements as of and for the years ended Sept. 30, 2008, and 2007. The auditor stated that the Company has suffered recurring losses from operations and has a net capital deficiency in addition to a working capital deficiency. About Teleconnect, Inc. Based in The Netherlands, Teleconnect, Inc. (OTC: TLCO) - http://www.teleconnect.es/-- was incorporated under the laws of the State of Florida on November 23, 1998. The Company engages in the sale of multimedia kiosks and the telecommunication industry in Spain. Currently, the Company derives its revenues from continuing operations primarily from the sale of multimedia kiosks and hardware components to retail chains. Revenues from discontinued operations are primarily from the sale of long- distance telecommunication services. TERRA-GEN FINANCE: Moody's Assigns 'B1' Rating on $240 Mil. Notes ----------------------------------------------------------------- Moody's Investors Service has assigned a revised B1 rating to Terra-Gen Finance Company, LLC's proposed $240 million of senior secured credit facilities. The facilities are made up of a $215 million senior secured term loan and a $25 million senior secured working capital facility, both due 2012. The rating outlook is stable. The B1 rating represents a revision downwards from a previously published Ba3 rating. On October 8, 2009, Moody's had assigned a Ba3 rating to the then $225 million of senior secured credit facilities made up of a $200 million term loan and a $25 million working capital facility. The lower rating is due primarily to the higher debt amount resulting in a projected higher refinancing amount of approximately $107 million vs. $90 million previously. While Terra-Gen continues to benefit from long-term contracts that could support a refinancing, the higher amount will need to be refinanced in the same refinancing window of only 2.5 years. It is Moody's view that the higher debt quantum reached a tipping point such that it was no longer consistent with a Ba3 rating. Terra-Gen is a special purpose entity formed by affiliates of ArcLight Capital Partners, which owns or leases a portfolio of 831 MWs of renewable generating capacity. The portfolio is made up of 387 MWs of geothermal, 80 MWs of solar and 364 MWs of wind generation located in the western US. Approximately 73% of the capacity is sold to Southern California Edison (SCE, sr. unsec. A3) under long term contracts maturing from 2013 to 2030 and revenue under these contracts represents about ninety percent of Terra-Gen's consolidated cash flows over the next five years. Terra-Gen's significant ownership interests include Coso Geothermal Power Holdings LLC (Ba1 sr. secured; negative outlook), which represents more than 50% of the Terra-Gen's consolidated cash flow over the medium term. The term loan will be used solely to refinance the existing bridge facility and to pay fees and expenses related to the transaction. The working capital facility will be used to provide working capital from time to time and for other general corporate purposes. It will primarily be used to support the issuance of letters of credit to replace existing letters of credit. The B1 rating is predicated upon final documentation in accordance with Moody's current understanding of the transaction and final debt sizing consistent with initially projected credit metrics. The last rating action on Terra-Gen occurred on October 8, 2009, when Moody's assigned a Ba3 senior secured rating. Terra-Gen Finance Company, LLC, is a wholly-owned subsidiary of Terra-Gen Power, LLC. Terra-Gen Power is a holding company that was formed to acquire and own an 831 MW portfolio of renewable generation assets primarily located in California. The majority of the portfolio's capacity is sold to SCE under long term contracts maturing from 2013 to 2030. Terra-Gen is privately owned by affiliates of ArcLight Capital Partners. TRIBUNE CO: Bank Debt Trades at 53.17% Off in Secondary Market -------------------------------------------------------------- Participations in a syndicated loan under which Tribune Co. is a borrower traded in the secondary market at 46.83 cents-on-the- dollar during the week ended Oct. 30, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents a drop of 2.87 percentage points from the previous week, The Journal relates. The loan matures May 17, 2014. Tribune pays 300 basis points above LIBOR to borrow under the facility. Moody's has withdrawn its rating on the bank debt, while it is not rated by Standard & Poor's. The debt is one of the biggest gainers and losers among widely quoted syndicated loans in secondary trading in the week ended Oct. 30, among the 161 loans with five or more bids. 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 Dec. 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. As of Dec. 8, 2008, the Debtors have $7,604,195,000 in total assets and $12,972,541,148 in total debts. 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) TRUE TEMPER: U.S. Trustee Balks at Schedules Filing Deadline ------------------------------------------------------------ Roberta A. DeAngelis, the United States Trustee for Region 3, protest request for extend the deadline to file schedules of assets and liabilities, and statement of financial affairs until Dec. 18, 2009, or waive the requirement to file statements and schedules, if the Chapter 11 plan of reorganization is confirmed, filed by True Temper Resort Inc. and its debtor-affiliates in the U.S. Bankruptcy Court for the District of Delaware. The U.S. Trustee relates that the Debtors' plan proposes the restructuring of senior debt into a combination of exit financing and equity in the reorganized Debtor. According to the U.S. Trustee, the effect of the request in view of the pertinent Plan provisions, is to deprive creditors of any due process with respect to the allowance and resolution of claims whether or not the plan is confirmed as proposed. The request has not been served upon all parties against whom it is intended to affect. The U.S. Trustee points out that, if the waiver is granted through Dec. 18, 2009, the Court and parties in interest will be deprived of information necessary to evaluate the case. If the Plan is confirmed and the request granted, the creditors will be deprived of due process with respect to the filing and allowance of claims and be left without a claims resolution procedure that affords them due process, the U.S. Trustee laments. About True Temper True Temper is the leading manufacturer of golf shafts in the world, and is consistently the number one shaft on all professional tours globally. The Company markets a complete line of shafts under the True Temper(R), Grafalloy(R) and Project X(R) shaft brands, and sells these brands in more than 30 countries throughout the world. True Temper is proudly represented by more than 800 individuals in ten facilities located in the United States, Europe, Japan, China and Australia. As of June 28, 2009, the Company had $180.4 million in total assets and $319.0 million in total liabilities, resulting in stockholders' deficit of $138.5 million. True Temper filed for Chapter 11 on Oct. 8, 2009 (Bankr. D. Del Case No. 09-13446). Marion M. Quirk, Esq., at Cole, Schotz, Meisel, Forman & Leonard, represents the Debtor in its restructuring effort. Logan & Company serves as claims and notice agent. Bankruptcy Judge Peter J. Walsh handles the case. UNITED AIR LINES: Bank Debt Trades at 22% Off in Secondary Market ----------------------------------------------------------------- Participations in a syndicated loan under which United Airlines, Inc., is a borrower traded in the secondary market at 78.07 cents- on-the-dollar during the week ended Oct. 30, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents a drop of 0.60 percentage points from the previous week, The Journal relates. The loan matures on Feb. 13, 2013. United Air pays 200 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's B3 rating and Standard & Poor's B+ rating. The debt is one of the biggest gainers and losers among widely quoted syndicated loans in secondary trading in the week ended Oct. 30, among the 161 loans with five or more bids. Based in Chicago, Illinois, UAL Corporation (NASDAQ: UAUA) -- http://www.united.com/-- is the holding company for United Airlines, Inc. United Airlines is the world's second largest air carrier. The airline flies to Brazil, Korea and Germany. The company filed for Chapter 11 protection on Dec. 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191). James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and Steven R. Kotarba, Esq., at Kirkland & Ellis, represented the Debtors in their restructuring efforts. Fruman Jacobson, Esq., at Sonnenschein Nath & Rosenthal LLP represented the Official Committee of Unsecured Creditors before the Committee was dissolved when the Debtors emerged from bankruptcy. Judge Eugene R. Wedoff confirmed the Debtors' Second Amended Plan on Jan. 20, 2006. The company emerged from bankruptcy protection on Feb. 1, 2006. (United Airlines Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) UAL Corp. carries a 'Caa1' probability of default rating from Moody's, 'B-' long term foreign issuer credit rating from Standard & Poor's, and 'CCC' long term issuer default rating from Fitch. US STEEL: Third Quarter Losses Won't Affect Moody's 'Ba2' Rating ---------------------------------------------------------------- Moody's commented that US Steel's continued operating and net loss experience in the third quarter has no immediate impact on the company's Ba2 corporate family rating. The rating outlook remains negative. Moody's last rating actions on US Steel were April 27, 2009, when Moody's downgraded the senior unsecured rating, assigned a Ba2 corporate family rating and assigned a Ba3 rating to the senior convertible note issue due 2014, and July 1, 2009, when Moody's assigned an SGL-1 speculative grade liquidity rating. VALLEY VIEW DOWNS: Case Summary & Unsecured Creditor ---------------------------------------------------- Debtor: Valley View Downs, LP 10 W. Market Street, Suite 200 Indianapolis, IN 46204 Case No.: 09-13761 Chapter 11 Petition Date: October 28, 2009 Court: United States Bankruptcy Court District of Delaware (Delaware) Judge: Kevin J. Carey Debtor's Counsel: Jeffrey M. Schlerf, Esq. Fox Rothschild LLP Ctizens Bank Center, Suite 1300 919 North Market Street P.O. Box 2323 Wilmington, DE 19899-2323 Tel: (302) 654-7444 Fax: (302) 656-8920 Email: jschlerf@foxrothschild.com Estimated Assets: $100,000,001 to $500,000,000 Estimated Debts: $100,000,001 to $500,000,000 The petition was signed by Kurt E. Wilson, the company's executive vice president and chief financial officer. Debtor's List of 1 Largest Unsecured Creditor: Entity Nature of Claim Claim Amount ------ --------------- ------------ Pennsylvania Real Estate Contract $29,976,894 Investment Trust 200 S. Broad St., 3rd Floor Philadelphia, PA 19102 VELOCITY EXPRESS: Reschedules Section 341(a) Meeting to 9:00 a.m. ----------------------------------------------------------------- Roberta A. DeAngelis, the U.S. Trustee for Region 3, has rescheduled the meeting of creditors of Velocity Express Corporation and its debtor-affiliates on Nov. 2, 2009, at 9:00 a.m. Prevailing Eastern Time. The meeting will be held at J. Caleb Boggs Federal Building, 5th Floor, Room 5209 in Wilmington, Delaware. As reported in the Troubled Company Reporter on Oct. 16, 2009, The meeting was scheduled at 10:00 a.m. on November 2. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This meeting of creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible officer of the Debtors under oath about the Debtors' financial affairs and operations that would be of interest to the general body of creditors. About Velocity Express Velocity Express -- http://www.velocityexpress.com/-- has one of the largest nationwide networks of regional, time definite, ground delivery service areas, providing a national footprint for customers desiring same day service throughout the United States. The Company's services are supported by a customer-focused technology infrastructure, providing customers with the reliability and information they need to manage their transportation and logistics systems, including a proprietary package tracking system that enables customers to view the status of any package via a flexible web reporting system. Velocity, together with 12 affiliates, filed for Chapter 11 on Sept. 24, 2009 (Bankr. D. Del. Case No. 09-13294). The Company listed assets of $94.1 million and debt of $120.6 million as of Sept. 1. ComVest Velocity Acquisition I, LLC, buyer of the Debtors' assets, is represented in the case by Kenneth G. Alberstadt, Esq., at Akerman Senterfitt LLP in New York. DIP Lender Burdale is represented in the case by Jonathan M. Cooper, Esq., Randall L. Klein, Esq., and Sarah J. Risken, Esq., at Goldberg Kohn Bell Black Rosenbloom & Moritz, LTD., in Chicago, Illinois. VITESSE SEMICONDUCTOR: Appoints Two Board Members ------------------------------------------------- Vitesse Semiconductor Corporation's Board of Directors has appointed two new Directors, James Hugar and Grant Lyon. These appointments are effective in connection with today's closing of the Company's debt restructuring transaction. These new Directors will fill vacancies created by the resignations of three Directors, Guy W. Adams, Robert A. Lundy, and Willow B. Shire. The resignations are also effective in connection with the closing of the company's debt restructuring transaction. "Jay and Grant bring the diverse skills and perspectives that our Board needs to guide Vitesse through its next steps forward," said Chris Gardner, chief executive officer of Vitesse and a member of its Board of Directors. "I personally and all of the employees of Vitesse extend our thanks and appreciation to Willow, Guy, and Bob for the diligence, expertise, and dedication they brought to the company, and for their contributions in setting the stage for the next phase of Vitesse's recovery." Professional Experience of New Directors Mr. Hugar has more than 35 years of experience in public accounting, including participation at hundreds of audit committees of board of directors and trustees for both publicly and privately held companies. Recently retired from Deloitte & Touche LLP, he was the partner-in-charge of the Southern California Investment Companies Industry and Broker/Dealer Practice. His clients included financial service companies, community banking, distribution, and companies within the aerospace and defense industries. Mr. Hugar is a Director nominee for the board of Imperial Capital Group, Inc. He has a bachelor's degree from Pennsylvania State University and an MSBA degree from the University of California at Los Angeles. He is a member of the American Institute of Certified Public Accountants and the California Society of Certified Public Accountants. Mr. Lyon has vast experience in corporate finance and strategic initiatives that include capital acquisition, business and securities valuation, acquisitions and mergers, and bankruptcy reorganizations. Mr. Lyon is the president of Odyssey Capital Group, LLC. He earlier served as interim CFO of Hypercom Corporation; managing director at Ernst & Young Corporate Finance, LLC; a managing member of Golf Equity, LLC; vice president, Capital Markets at Evans Withycombe Residential, Inc.; and began his career at Arthur Andersen LLP. Mr. Lyon is a Director of Fairfield Residential LLC and Chairman of the Board of Three Five Systems, Inc. He has also served as a director of Tickets.com, Norwood Promotional Products, Trussway LTD, and he performed the duties of trustee for five companies in the financial, real estate, recreational, and agriculture industries. Mr. Lyon graduated magna cum laude with a bachelor's degree and earned an MBA degree with high distinction from Brigham Young University. He is a certified public accountant and a published author and speaker. This transition is occurring in accordance with the terms of the debt restructuring agreement. Under those terms, the Company's Board will have six Directors. Vitesse is seeking another independent Director to fill the remaining vacancy. Based upon discussions with the holders of the debt that was restructured, Vitesse expects that these debt holders, who currently own approximately 43% of the Company's outstanding common stock, will request Vitesse to increase its Board size to seven directors and add another independent Director. Mr. Hugar and Mr. Lyon were proposed by the current stockholders and nominated by the Company's Nominating and Corporate Governance Committee. Their terms will expire at the time of the next election of directors by stockholders. About Vitesse Semiconductor Vitesse Semiconductor Corporation (Pink Sheets: VTSS) -- http://www.vitesse.com/-- designs, develops and markets a diverse portfolio of high-performance, cost-competitive semiconductor solutions for Carrier and Enterprise networks worldwide. Engineering excellence and dedicated customer service distinguish Vitesse as an industry leader in Gigabit Ethernet, Ethernet-over- SONET, Optical Transport, and other applications. Additional company and product information is available at Vitesse is a registered trademark in the United States and/or other jurisdictions of Vitesse Semiconductor Corporation. All other trademarks or registered trademarks mentioned herein are the property of their respective holders. Vitesse had total assets of $107,636,000 against total debts of $160,101,000 as of June 30, 2009. WEST CORP: Bank Debts Trade at 8.20% and 6.05% Off -------------------------------------------------- Participations in a syndicated loan under which West Corporation is a borrower traded in the secondary market at 91.80 cents-on- the-dollar during the week ended Oct. 30, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents a drop of 1.95 percentage points from the previous week, The Journal relates. The loan matures on May 11, 2013. The Company pays 237.5 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's B1 rating and Standard & Poor's BB- rating. The debt is one of the biggest gainers and losers among widely quoted syndicated loans in secondary trading in the week ended Oct. 30, among the 161 loans with five or more bids. Participations in another syndicated loan under which West Corporation is a borrower traded in the secondary market at 93.95 cents-on-the-dollar during the week ended Friday, Oct. 30, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents a drop of 1.45 percentage points from the previous week, The Journal relates. This bank loan matures on July 1, 2016. The Company pays 387 basis points above LIBOR to borrow under the facility. The debt carries Moody's B1 rating while it is not rated by Standard & Poor's. The debt is also one of the biggest gainers and losers among widely quoted syndicated loans in secondary trading in the week ended Oct. 30, among the 161 loans with five or more bids. The Troubled Company Reporter on Oct. 9, 2009, said that Moody's does not expect to take any immediate rating action following West Corporation's announcement that it has filed for an initial public offering of its common stock. West indicated in its Form S-1 filing that it intends to use part of the net proceeds from the offering to repay or repurchase indebtedness. The last rating action on West Corporation was on May 8, 2007, at which time Moody's lowered the senior secured credit facility rating to B1 from Ba3 while affirming all other credit and liquidity ratings. Based in Omaha, Nebraska, West Corporation is a leading provider of business process outsourcing services. West has a B2 Corporate Family Rating and a stable rating outlook. WINDSTREAM CORP: Bank Debt Trades at 3% Off in Secondary Market --------------------------------------------------------------- Participations in a syndicated loan under which Windstream Corp. is a borrower traded in the secondary market at 97.02 cents-on- the-dollar during the week ended Oct. 30, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents a drop of 0.54 percentage points from the previous week, The Journal relates. The loan matures on Dec. 17, 2015. The Company pays 275 basis points above LIBOR to borrow under the facility. The bank debt is not rated by Moody's and Standard & Poor's. The debt is one of the biggest gainers and losers among widely quoted syndicated loans in secondary trading in the week ended Oct. 30, among the 161 loans with five or more bids. As reported by the Troubled Company Resources on Oct. 1, 2009, Standard & Poor's said it assigned a 'BB' issue-level rating to Little Rock, Arkansas-based local telephone operator Windstream Corp.'s proposed $400 million of senior unsecured notes due 2017, to be issued under rule 144A with registration rights. Proceeds will be used to fund the acquisitions of two local telephone companies-D&E Communications, Inc. (BB-/Watch Pos/--) and Lexcom Inc. (not rated)-and for general corporate purposes. S&P expects these transactions to close in the fourth quarter of 2009. S&P also assigned a '5' recovery rating to the notes, which indicates expectations for modest (10%-30%) recovery in the event of payment default. Additionally, as part of the transaction, the company is negotiating to amend its credit facility, extending the maturities of the senior secured term loan A and revolver to 2013 from 2011 and the term loan B to 2015 from 2013. S&P does not expect the potential amendments to affect the issue-level or recovery ratings on the facility. Moody's Investors Service has assigned a Ba3 rating to Windstream Corporation's proposed $400 million senior unsecured notes offering. The company expects to use the net proceeds primarily to fund the cash portion of the purchase price of the pending acquisitions of D&E Communications and Lexcom, Inc. As part of the rating action, Moody's affirmed Windstream's Ba2 corporate family and probability-of-default ratings, and SGL-1 short-term liquidity rating. The outlook for all ratings is stable. Windstream is also seeking approval from its lenders to amend and extend its existing credit facilities. Moody's believes the proposed transactions will help maintain Windstream's very good liquidity by extending the maturities of its credit facilities. Moody's most recent rating action for Windstream was on May 11, 2009. At that time, Moody's affirmed Windstream's ratings following the announcement of the company's plans to acquire D&E Communications. Windstream, headquartered in Little Rock, AR, is an ILEC providing telecommunications services in 16 states and generated about $3.1 billion in annual revenues in the twelve months ended June 30, 2009. WOODSIDE GROUP: Homebuilder Violated Credit Pact, Says JPMorgan --------------------------------------------------------------- Law360 reports that an executive at JPMorgan Chase Bank has said in a sworn statement to a California bankruptcy court that Woodside Group LLC violated its credit agreement when it consummated a significant reorganization last year. Headquartered in North Salt Lake, Utah, Woodside Group LLC http://www.woodside-homes.com/-- is the parent company of multiple subsidiaries and through approximately 185 of those subsidiaries is primarily engaged in homebuilding operations in eight states. The operations of the Woodside Group are financed through Woodside Group's affiliate Pleasant Hill Investments, LC. Woodside Group, Pleasant Hill Investments and each of the 185 subsidiaries are the Debtors. Woodside Group also has subsidiaries and affiliates that are not debtors. On March 31, 2008, Woodside AMR 107, Inc., and Woodside Portofino, Inc., filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code. On August 20, 2008, an Ad Hoc Group of Noteholders commenced the filing of involuntary petitions against the Debtors (other than AMR 107 and Portofino). On August 20, 2008, JPMorgan Chase Bank, N.A., on behalf of the Bank Group, commenced the filing of certain Joinders in the Involuntary Petition. On September 16, 2008, the Debtors filed a "Consolidated Answer to Involuntary Petitions and Consent to Order for Relief" and the Court entered the "Order for Relief Under Chapter 11." The Debtors are jointly administered under Case No. 08-20682. The Bankruptcy Cases are currently pending before the Honorable Peter Carroll in the United States Bankruptcy Court for the Central District of California (Riverside). Harry D. Hochman, Esq., Jeremy V. Richards, Esq., Linda F. Cantor, Esq., and Maxim B. Litvak, Esq., at Pachulski Stang Ziehl & Jones LLP, in Los Angeles, represent the Debtors as counsel. During 2007, the Woodside entities generated revenues exceeding $1 billion on a consolidated basis. As of December 31, 2007, the Woodside Entities had consolidated assets and liabilities of approximately $1.5 billion and $1.1 billion, respectively. As of the September 16, 2008 petition date, the Debtors have approximately $70 million in cash. The Woodside Entities employ approximately 494 employees. In its schedules, Woodside Group, LLC, listed total assets of $1,000,285,578 and total liabilities of $691,352,742. The schedules are unaudited. YANKEE CANDLE: Bank Debt Trades at 7% Off in Secondary Market ------------------------------------------------------------- Participations in a syndicated loan under which The Yankee Candle Company, Inc., is a borrower traded in the secondary market at 93.07 cents-on-the-dollar during the week ended Oct. 30, 2009, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents a drop of 0.55 percentage points from the previous week, The Journal relates. The loan matures on Feb. 6, 2014. The Company pays 200 basis points above LIBOR to borrow under the facility. The bank debt carries Moody's Ba3 rating and Standard & Poor's BB- rating. The debt is one of the biggest gainers and losers among widely quoted syndicated loans in secondary trading in the week ended Oct. 30, among the 161 loans with five or more bids. Based in South Deerfield, Massachusetts, The Yankee Candle Company, Inc., designs, manufactures, and is a wholesaler and retailer of premium scented candles. Yankee has a 39-year history of offering distinctive products and marketing them as affordable luxuries and consumable gifts. The Company sells its products through a North American wholesale customer network of 19,689 store locations, a growing base of Company owned and operated retail stores (491 located in 43 states as of Jan. 3, 2009, including 28 Illuminations stores), direct mail catalogs, and its Internet Web sites: http://www.yankeecandle.com http://www.illuminations.com http://www.aromanaturals.com Outside of North America, the Company sells its products primarily through its subsidiary, Yankee Candle Company (Europe), Ltd., which has an international wholesale customer network of 2,994 store locations and distributors covering approximately 23 countries. Yankee Holding Corp. is a holding company formed in connection with the Company's Merger with an affiliate of Madison Dearborn Partners, LLC, on Feb. 6, 2007, and is now the parent company of The Yankee Candle Company, Inc. Yankee Holding Corp. and subsidiaries had $1.372 billion in total assets, and $1.375 billion in total liabilities, resulting in $2.82 million in stockholders' deficit as of Jan. 3, 2009. YOUNG BROADCASTING: Must Disclose Pension Liabilities, PBGC Says ---------------------------------------------------------------- Law360 reports that the Pension Benefit Guaranty Corp. has objected to Young Broadcasting Inc.'s Chapter 11 disclosure statement, claiming it doesn't tell creditors that Young may end up liable to the federal pension insurer for over $6.5 million if it terminates its employee pension plan. Young Broadcasting, Inc. -- http://www.youngbroadcasting.com/-- owns 10 television stations and the national television representation firm, Adam Young, Inc. Five stations are affiliated with the ABC Television Network (WKRN-TV -Nashville, TN, WTEN-TV - Albany, NY, WRIC-TV - Richmond, VA, WATE-TV - Knoxville, TN, and WBAY-TV - Green Bay, WI), three are affiliated with the CBS Television Network (WLNS-TV - Lansing, MI, KLFY-TV - Lafayette, LA and KELO-TV - Sioux Falls, SD), one is affiliated with the NBC Television Network (KWQC-TV - Davenport, IA) and one is affiliated with MyNetwork (KRON-TV - San Francisco, CA). In addition, KELO- TV- Sioux Falls, SD is also the MyNetwork affiliate in that market through the use of its digital channel capacity. The Company and its affiliates filed for Chapter 11 protection on February 13, 2009 (Bankr. S.D.N.Y. Lead Case No. 09-10645). Jo Christine Reed, Esq., at Sonnenschein Nath & Rosenthal LLP, represents the Debtors in their restructuring effort. The Debtors selected UBS Securities LLC as consultant; Ernst & Young LLP as accountant; Epiq Bankruptcy Solutions LLC as claims agent; and David Pauker chief restructuring officer Andrew N. Rosenberg, Esq., at Paul Weiss Rifkind Wharton & Harrison LLP, serves as counsel to the official unsecured creditors committee. * 2009's Bank Closings Rise to 115 as 9 FBOC Units Shuttered ------------------------------------------------------------ The Federal Deposit Insurance Corporation on October 30, entered into a purchase and assumption agreement with U.S. Bank, NA, of Minneapolis, Minnesota, a wholly-owned subsidiary of U.S. Bancorp, to assume all of the deposits and essentially all of the assets of nine failed banks. The nine banks involved in the transaction are: Bank USA, National Association, Phoenix, Arizona; California National Bank, Los Angeles, California; San Diego National Bank, San Diego, California; Pacific National Bank, San Francisco, California; Park National Bank, Chicago, Illinois; Community Bank of Lemont, Lemont, Illinois; North Houston Bank, Houston, Texas; Madisonville State Bank, Madisonville, Texas; and Citizens National Bank, Teague, Texas. As of September 30, 2009, the banks had combined assets of $19.4 billion and deposits of $15.4 billion. The nine banks were subsidiaries of FBOP Corporation, Oak Park, Illinois. FBOP Corporation was not closed and was not subject to the October 30 actions. The number of banks that have failed so far this year have reached 115. According to The Associated Press, the trouble in the banking system from bad loans and the recession goes even deeper. Dozens, perhaps hundreds, of other banks remain open even though they are as weak as many that have been shuttered. Regulators are seizing banks slowly and selectively - partly to avoid inciting panic and partly because buyers for bad banks are hard to find. The Federal Deposit Insurance Corporation has been appointed as receiver for the closed banks. To protect the depositors, the FDIC entered into a purchase and assumption agreement with various banks, to assume all of the deposits of the closed banks. Last weekend's closings are expected to cost the FDIC's insurance fund a total of $358.2 million. In accordance with Federal law, allowed claims against failed financial institutions will be paid, after administrative expenses, in this order of priority: 1. Depositors 2. General Unsecured Creditors 3. Subordinated Debt 4. Stockholders 416 Banks on Problem List The Federal Deposit Insurance Corporation said August 27 that the number of banks and savings institutions in its "Problem List" increased to 416 at the end of the second quarter compared with 305 at March 31. The 416 banks have combined assets of $299.8 billion. The FDIC said this is the largest number of "problem" institutions since June 30, 1994, and the largest amount of assets on the list since December 31, 1993. At the end of the 2008, there were 252 banks on the Problem List. "Problem" institutions are those institutions with financial, operational, or managerial weaknesses that threaten their continued financial viability. They are rated by the FDIC or Office of the Thrift Supervision as either a "4" or "5", based on a scale of 1 to 5 in ascending order of supervisory concern. The Problem List is not divulged to the public. No advance notice is given to the public when a financial institution is closed. The Deposit Insurance Fund (DIF) decreased by $2.6 billion -- 20.3% -- during the second quarter to $10.4 billion, based on unaudited figures. According to the FDIC, the reduction in the DIF was primarily due to an $11.6 billion increase in loss provisions for bank failures. Twenty-four insured institutions with combined assets of $26.4 billion failed during the second quarter of 2009, the largest number of quarterly failures since the fourth quarter of 1992, when 42 insured institutions failed. For 2009 through the end of the second quarter, 45 insured institutions with combined assets of $35.9 billion failed at an estimated current cost to the DIF of $10.5 billion. Problem Institutions Failed Institutions -------------------- ------------------- Year Number Assets (Mil) Number Assets (Mil) ---- ------ ------------ ------ ------------ Q2'09 416 $299,800 24 $26,400 Q1'09 305 $220,047 21 $9,498 2008 252 $159,405 25 $371,945 2007 76 $22,189 3 $2,615 2006 50 $8,265 0 $0 2005 52 $6,607 0 $0 2004 80 $28,250 4 $170 A copy of the FDIC's Quarterly Banking Profile for the second quarter of 2009 is available for free at: http://bankrupt.com/misc/FDIC_QBP_2Q_09.pdf 2009 Failed Banks List The FDIC was appointed as receiver for the closed banks. To protect the depositors, the FDIC entered into a purchase and assumption agreement with various banks that agreed to assume the deposits of most of the closed banks. The FDIC also entered into loss-share transactions on assets bought by the banks. Loss-Share Transaction Party FDIC Cost Assets of Bank That Assumed to Insurance Closed Bank Deposits & Bought Fund Closed Bank (millions) Certain Assets (millions) ----------- ---------- -------------- ----------- Bank USA, N.A. \ Calif. National | San Diego Nat'l | Pacific National | Park National | $19,400.0 U.S. Bank, NA $2,500 Comm. Bank Lemont | North Houston | Madisonville State | Citizens National / First DuPage Bank $279.0 First Midwest Bank $59.0 Partners Bank $65.5 Stonegate Bank $28.6 American United Bank $111.0 Ameris Bank $44.0 Bank of Elmwood $327.4 Tri City Nat'l $101.4 Flagship Nat'l Bank $190.0 First Federal $59.0 Riverview Community $108.0 Central Bank, Stillwater $20.0 Hillcrest Bank Florida $83.0 Stonegate Bank $45.0 San Joaquin Bank $775.0 Citizens Business $103.0 Warren Bank, Warren $538.0 Huntington Nat'l $275.0 Southern Colorado $31.9 Legacy Bank, Wiley $6.6 Jennings State Bank $56.3 Central Bank, Stillwater $11.7 Georgian Bank $2,000.0 First Citizens B&T $892.0 Irwin Union FSB $493.0 First Financial Bank } $850.0 Irwin Union B&T $2,700.0 First Financial Bank } Brickwell Community $72.0 CorTrust Bank $22.0 Corus Bank, NA $7,000.0 MB Fin'l $1,700.0 Venture Bank $970.0 First-Citizens $298.0 First State Bank $105.0 Sunwest Bank $47.0 Vantus Bank $458.0 Great Southern $168.0 First Bank, Kansas $16.0 Great American $6.0 Platinum Community $345.6 -- None -- $114.3 InBank $212.0 MB Financial $66.0 Mainstreet Bank $459.0 Central Bank $95.0 Affinity Bank $1,000.0 Pacific Western $254.0 Bradford Bank $452.0 M&T Buffalo $97.0 First Coweta Bank $167.0 United Bank $48.0 Guaranty Bank $13,000.0 BBVA Compass $3,000.0 CapitalSouth Bank $617.0 IBERIABANK $151.0 ebank, Atlanta, GA $143.0 Stearns Bank $163.0 Colonial Bank $25,000.0 BB&T $2,800.0 Union Bank, N.A. $124.0 MidFirst $61.0 Community Bank Nev $1,520.0 FDIC-Created $781.5 Community Bank Ariz $158.5 MidFirst Bank $25.5 Dwelling House $13.4 PNC Bank, N.A. $6.8 First State Bank $463.0 Stearns Bank, N.A. $116.0 Community National $97.0 Stearns Bank, N.A. $24.0 Community First $209.0 Home Federal $45.0 Integrity Bank $119.0 Stonegate Bank, $46.0 Mutual Bank $1,600.0 United Central $696.0 First BankAmericano $166.0 Crown Bank $15.0 First State, Altus $103.4 Herring Bank, Amarillo $25.2 Peoples Community $705.8 First Financial Bank $129.5 Waterford Village $61.4 Evans Bank, N.A. $5.6 SB - Gwinnett \ State Bank & Trust \ SB - North Fulton | State Bank & Trust | SB - Jones County | $2,800.0 State Bank & Trust | $807.0 SB - Houston County | State Bank & Trust | SB - North Metro | State Bank & Trust | SB - Bibb County / State Bank & Trust / Temecula Valley $1,500.0 First-Citizen $391.0 Vineyard Bank $1,900.0 Calif. Bank $579.0 BankFIrst, Sioux $275.0 Alerus Financial $91.0 First Piedmont $115.0 First American $29.0 Bank of Wyoming $70.0 Central Bank $27.0 John Warner Bank $70.0 State Bank $10.0 1st State Winchest. $36.0 First Nat'l $6.0 Rock River Bank $77.0 Harvard State $27.6 Elizabeth State $55.5 Galena State $11.2 1st Nat'l Danville $166.0 First Financial $24.0 Founders Bank $962.5 PrivateBank $188.5 Millennium State $118.0 State Bank of Tex $47.0 Mirae Bank $456.0 Wilshire State Bank $50.0 Metro Pacific Bank $80.0 Sunwest Bank, Tustin $29.0 Horizon Bank $87.6 Stearns Bank, N.A. $33.5 Neighborhood Comm $221.6 CharterBank, West Point $66.7 Community Bank $199.4 -- None -- $85.0 First National Bank $156.9 Bank of Kansas $32.2 Cooperative Bank $970.0 First Bank, Troy, N.C. $217.0 Southern Community $377.0 United Community $114.0 Bank of Lincolnwood $214.0 Republic Bank, Chicago $83.0 Citizens National $437.0 Morton Community $106.0 Strategic Capital $537.0 Midland States Bank $173.0 BankUnited FSB $12,800.0 WL Ross-Led Investors $4,900.0 Westsound Bank $334.6 Kitsap Bank $108.0 America West $299.4 Cache Valley Bank $119.4 Citizens Community $45.1 N.J. Community Bank $18.1 Silverton Bank $4,100.0 -- None -- $1,300.0 First Bank of Id $488.9 US Bank, Minneapolis $191.2 First Bank of BH $1,500.0 -- None -- $394.0 Heritage Bank $184.6 Level One Bank $71.3 American Southern $112.3 Bank of North Georgia $41.9 Great Basin Bank $270.9 Nevada State Bank $42.0 American Sterling $181.0 Metcalf Bank, Lee $42.0 New Frontier Bank $2,000.0 -- None -- $670.0 Cape Fear Bank $492.0 First Federal, $131.0 Omni National $956.0 -- None -- $290.0 TeamBank, N.A. $669.8 Great Southern Bank $98.0 Colorado National $123.5 Herring Bank, Amarillo $9.0 FirstCity Bank $297.0 -- None -- $100.0 Freedom Bank $173.0 Nat'l Georgia Bank $36.2 Security Savings $238.3 Bank of Nevada, L.V. $59.1 Heritage Community $232.9 MB Financial Bank, N.A. $41.6 Silver Falls $131.4 Citizens Bank $50.0 Pinnacle Bank $73.0 Washington Trust Bank $12.1 Corn Belt Bank $271.8 Carlinville Nat'l Bank $100.0 Riverside Bank $539.0 TIB Bank $201.5 Sherman County $129.8 Heritage Bank $28.0 County Bank $1,700.0 Westamerica Bank $135.0 Alliance Bank $1,140.0 California Bank & Trust $206.0 FirstBank Fin'l $337.0 Regions Bank $111.0 Ocala National $223.5 CenterState Bank $99.6 Suburban Federal $360.0 Bank of Essex $126.0 MagnetBank $292.2 -- None -- $119.4 1st Centennial $803.3 First California Bank $227.0 Bank of Clark $446.5 Umpqua Bank $120.0-145.0 Nat'l Commerce $430.9 Republic Bank of Chi. $97.1 In 2008, 25 banks with total assets of $372 billion failed. IndyMac Bank, FSB, was closed by the Office of Thrift Supervision on July 11, and the FDIC was named conservator. At the time it was closed, IndyMac's assets of $32 billion made it the second largest bank failure in FDIC history. A complete list of banks that failed since 2000 is available at: http://www.fdic.gov/bank/individual/failed/banklist.html * Additional Gaming Bankruptcies Imminent, Says Grant Thornton -------------------------------------------------------------- As gaming companies face declining revenues and margins, aggressive steps must be taken to restructure debt and reduce costs, according to distress experts at Grant Thornton LLP's Corporate Advisory and Restructuring Services practice. Bankruptcy is more likely for those with low interest coverage ratios, low levels of cash and limited unencumbered assets to address looming debt maturities. Net revenues at gaming companies during the last year declined because foot traffic has been weak and patrons have reallocated their entertainment dollars. The decline in leisure travel also has pressured hotel room rates, which had a negative impact on hotel operations. This, coupled with an overall decrease in consumer spending that's not expected to let up in the short term, is causing gaming companies of all sizes to struggle. Las Vegas, considered a destination market, is being hit harder than regional markets because people are staying closer to home. "Gaming companies that are currently constructing new facilities have an additional capex burden draining needed cash, whereas those with planned additions in the future face less immediate cash uses and lower financial risk," said Grant Thornton CARS Principal Jim Peko. Gaming restructurings are similar to other industries but have distinct complexities and unique aspects, such as 24/7 staffing requirements, loyalty programs and multiple product offerings including gaming, restaurant, entertainment, retail and hotel operations. To restructure, companies must navigate the industry's financial, operational and regulatory environments. Mr. Peko believes the gaming industry faces many challenges when it comes to turning around a company's financial performance--and changes must go deeper than cost reduction. Balance sheet issues must be addressed and loan covenants must be reset. The regulatory process can impact the sales process and potentially limit the universe of buyers as a result of strict licensing requirements. "Cash is king in all distressed situations," said Mr. Peko. "However, in a casino restructuring, not only must you focus on cash but you need to control cards and chips as well. Managing the 'three Cs', and having the appropriate level of surveillance, are critical to ongoing operations." Grant Thornton believes casinos best positioned to avoid bankruptcy are those with diversified locations, large cash positions, higher interest coverage ratios, an ability to refinance or meet debt maturities and an ability to maximize cash flow at lower revenue levels. About Grant Thornton Grant Thornton LLP's Corporate Advisory and Restructuring Services (CARS) Practice launched its U.S. practice in 2007 and has grown to include more than 100 professionals in 12 offices. The CARS team works with underperforming and transitional companies and their stakeholders. They quickly evaluate the financial and operational issues adversely affecting performance, assess the strategic alternatives and develop and execute comprehensive plans to address these challenges. Grant Thornton's advisory team delivers in-depth advice and balanced insight through a comprehensive, holistic approach. * Geithner Faces Down 'Too Big To Fail' Bill Critics ---------------------------------------------------- Law360 reports that U.S. Treasury Secretary Timothy Geithner on Thursday defended a proposal to create a new wind-down authority for "too big to fail" companies, which critics in the U.S. House of Representatives said could stretch federal authority too far while changing too little about future bailouts. * Law Offices of Louis J Esbin Launches www.esbinlaw.com -------------------------------------------------------- Attorney Louis J. Esbin in Santa Clarita, California, has launched the new www.esbinlaw.com Web site featuring three main areas of practice: Bankruptcy Law, Business Law, and Consumer Protection. The site includes legal articles written by Mr. Esbin. Other tools added to the site include debt reduction and other financial calculators; as well as, court information, a legal glossary, and maps to Bankruptcy Courts. * Legal Helpers/Macey & Aleman to Launch New San Bernardino Office ------------------------------------------------------------------ Legal Helpers/Macey & Aleman will open a new office in San Bernardino, California, on November 12, 2009, to better serve their clients in southern California. The satellite office of Legal Helpers will be open every Thursday, from 9:00 a.m. until 6:00 p.m., Pacific Time. Lawyers at Macey & Aleman/Legal Helpers -- http://www.legalhelpers.com-- helps clients with their financial and legal encumbrances regardless of location. * Lewis Freeman Probed for Allegedly Stealing From Bankr. Cos. -------------------------------------------------------------- Forensic accountant Lewis Freeman is being put under probe for allegedly stealing millions of dollars from bankrupt firms, UPI reports, citing people familiar with the matter. According to The Miami Herald, sources said that U.S. prosecutors are eyeing charges that Mr. Freeman took at least $3.6 million from the accounts of several failed businesses placed under the control of his dissolved firm, Lewis B. Freeman & Partners. Court documents say that Mr. Freeman had been trying to raise money from friends and relatives before being raided by the FBI in September, by placing the equity in his Coconut Grove, Florida house up as collateral. * Matrix Capital To Partner with Hunter Hotels ---------------------------------------------- HotelWorld Network reports that Matrix Capital Markets Group, Inc., said that it will partner with Hunter Hotels to provide advisory solutions to lodging companies with financially distressed hotel properties and will provide services like restructuring of debt, corporate recapitalization, and sale of some or all of the assets. HotelWorld notes that Matrix Capital and Hunter Hotels have successfully advised on the sale of hotels for over 30 years, as well as transactions involving financially distressed companies operating in or outside of bankruptcy. * Rhode Island Bankr. Court to Follow NY's Loss Mitigation Program ------------------------------------------------------------------ Darrell Delamaide at DSNEWS.com reports that the U.S. Bankruptcy Court for the District of Rhode Island said that it would adopt on November 1 New York's loss-mitigation program that applies when a debtor's principal residence is at risk of foreclosure. Citing Law firm Partridge Snow & Hahn said in an online note that the program is available to debtors who file cases under Chapter 7, 11, 12, or 13 of the Bankruptcy Code. According to DSNEWS.com, the program places specific burdens and time frames on creditors, with the court imposing sanctions if talks aren't done in good faith. DSNEWS.com says that the program may be requested at any time by any party during the pendency of the bankruptcy, although a debtor may specifically request loss mitigation in the Chapter 13 plan and must serve a Notice/Request for Loss Mitigation on the creditor within seven days of filing the Chapter 13 Plan, of which the creditor has 14 days to object. * BOND PRICING -- For the Week From October 26 to 30, 2009 ---------------------------------------------------------- Company Coupon Maturity Bid Price ------- ------ -------- --------- 155 E TROPICANA 8.75 4/1/2012 1.25 ABITIBI-CONS FIN 7.88 8/1/2009 9.00 ADVANTA CAP TR 8.99 12/17/2026 5.00 AMBAC INC 9.38 8/1/2011 48.50 AMBASSADORS INTL 3.75 4/15/2027 43.75 AMBASSADORS INTL 3.75 4/15/2027 46.25 AMER GENL FIN 3.88 11/15/2009 97.60 AMER GENL FIN 5.25 7/15/2010 80.00 AMER GENL FIN 5.65 7/15/2010 79.00 AMR CORP 10.40 3/10/2011 46.00 AMR CORP 10.45 11/15/2011 49.00 ANTHRACITE CAP 11.75 9/1/2027 40.75 ANTIGENICS 5.25 2/1/2025 39.04 APRIA HEALTHCARE 3.38 9/1/2033 58.00 ARCO CHEMICAL CO 10.25 11/1/2010 60.00 BAC-CALL11/09 6.00 5/15/2021 97.70 BAC-CALL11/09 6.00 11/15/2026 97.38 BANK NEW ENGLAND 8.75 4/1/1999 9.25 BANK NEW ENGLAND 9.88 9/15/1999 10.03 BANKUNITED FINL 3.13 3/1/2034 3.50 BELL MICROPRODUC 3.75 3/5/2024 40.00 BOWATER INC 6.50 6/15/2013 28.25 BOWATER INC 9.50 10/15/2012 28.00 BROOKSTONE CO 12.00 10/15/2012 58.00 CALLON PETROLEUM 9.75 12/8/2010 58.00 CAPMARK FINL GRP 5.88 5/10/2012 21.75 CAPMARK FINL GRP 6.30 5/10/2017 22.50 CCH I LLC 9.92 4/1/2014 0.78 CCH I LLC 10.00 5/15/2014 1.00 CCH I LLC 11.13 1/15/2014 1.25 CCH I LLC 12.13 1/15/2015 1.19 CCH I/CCH I CP 11.00 10/1/2015 18.00 CCH I/CCH I CP 11.00 10/1/2015 19.25 CHAMPION ENTERPR 2.75 11/1/2037 17.00 CHARTER COMM HLD 9.92 4/1/2011 1.00 CHARTER COMM HLD 10.75 10/1/2009 2.00 CHARTER COMM INC 6.50 10/1/2027 32.75 CIT GROUP INC 3.95 12/15/2009 64.00 CIT GROUP INC 4.05 2/15/2010 57.00 CIT GROUP INC 4.25 2/1/2010 61.22 CIT GROUP INC 4.25 9/15/2010 57.50 CIT GROUP INC 4.30 3/15/2010 56.26 CIT GROUP INC 4.30 6/15/2010 58.50 CIT GROUP INC 4.35 6/15/2010 57.50 CIT GROUP INC 4.45 5/15/2010 57.00 CIT GROUP INC 4.60 8/15/2010 58.55 CIT GROUP INC 4.75 12/15/2010 62.50 CIT GROUP INC 4.80 12/15/2009 64.00 CIT GROUP INC 4.85 12/15/2009 68.10 CIT GROUP INC 4.85 3/15/2010 61.00 CIT GROUP INC 4.90 12/15/2010 57.50 CIT GROUP INC 5.00 12/15/2010 57.00 CIT GROUP INC 5.00 3/15/2011 58.50 CIT GROUP INC 5.00 3/15/2011 58.60 CIT GROUP INC 5.05 2/15/2010 61.00 CIT GROUP INC 5.05 3/15/2010 57.00 CIT GROUP INC 5.05 11/15/2010 57.00 CIT GROUP INC 5.05 12/15/2010 57.00 CIT GROUP INC 5.05 3/15/2011 57.00 CIT GROUP INC 5.15 2/15/2010 59.81 CIT GROUP INC 5.15 3/15/2010 57.00 CIT GROUP INC 5.15 2/15/2011 58.00 CIT GROUP INC 5.15 2/15/2011 57.00 CIT GROUP INC 5.15 4/15/2011 61.00 CIT GROUP INC 5.20 11/3/2010 61.50 CIT GROUP INC 5.20 9/15/2011 58.55 CIT GROUP INC 5.25 5/15/2010 57.50 CIT GROUP INC 5.25 9/15/2010 59.25 CIT GROUP INC 5.25 11/15/2010 57.00 CIT GROUP INC 5.25 11/15/2010 59.10 CIT GROUP INC 5.25 11/15/2010 58.00 CIT GROUP INC 5.25 12/15/2010 57.00 CIT GROUP INC 5.30 6/15/2010 57.50 CIT GROUP INC 5.35 6/15/2011 57.76 CIT GROUP INC 5.40 5/15/2011 58.00 CIT GROUP INC 5.45 8/15/2010 55.00 CIT GROUP INC 5.50 8/15/2010 58.50 CIT GROUP INC 5.60 4/27/2011 62.50 CIT GROUP INC 6.25 12/15/2009 63.00 CIT GROUP INC 6.25 2/15/2010 58.00 CIT GROUP INC 6.50 12/15/2009 59.75 CIT GROUP INC 6.50 2/15/2010 62.00 CIT GROUP INC 6.50 3/15/2010 57.50 CIT GROUP INC 6.50 12/15/2010 55.44 CIT GROUP INC 6.50 1/15/2011 57.00 CIT GROUP INC 6.50 3/15/2011 57.00 CIT GROUP INC 6.60 2/15/2011 58.50 CIT GROUP INC 6.75 3/15/2011 56.50 CIT GROUP INC 12.00 12/18/2018 16.38 CITADEL BROADCAS 8.00 2/15/2011 17.50 CLEAR CHANNEL 4.40 5/15/2011 63.00 CLEAR CHANNEL 4.50 1/15/2010 97.00 CLEAR CHANNEL 6.25 3/15/2011 66.75 CONGOLEUM CORP 8.63 8/1/2008 20.50 COOPER-STANDARD 8.38 12/15/2014 16.25 COUNTRYWIDE FINL 5.25 11/16/2009 98.60 CREDENCE SYSTEM 3.50 5/15/2010 60.00 DECODE GENETICS 3.50 4/15/2011 14.00 DELPHI CORP 6.50 8/15/2013 0.50 DELPHI CORP 8.25 10/15/2033 0.06 DEX MEDIA INC 8.00 11/15/2013 16.00 DEX MEDIA INC 9.00 11/15/2013 18.50 DEX MEDIA INC 9.00 11/15/2013 15.00 DEX MEDIA WEST 9.88 8/15/2013 20.00 DOWNEY FINANCIAL 6.50 7/1/2014 16.00 EDDIE BAUER HLDG 5.25 4/1/2014 0.35 FAIRPOINT COMMUN 13.13 4/1/2018 16.00 FAIRPOINT COMMUN 13.13 4/2/2018 16.75 FEDDERS NORTH AM 9.88 3/1/2014 0.50 FINLAY FINE JWLY 8.38 6/1/2012 5.00 FLEETWOOD ENTERP 14.00 12/15/2011 31.25 FRANKLIN BANK 4.00 5/1/2027 1.25 GASCO ENERGY INC 5.50 10/5/2011 45.50 GENERAL MOTORS 7.13 7/15/2013 14.25 GENERAL MOTORS 7.40 9/1/2025 14.38 GENERAL MOTORS 7.70 4/15/2016 14.01 GENERAL MOTORS 8.10 6/15/2024 13.50 GENERAL MOTORS 8.25 7/15/2023 15.00 GENERAL MOTORS 8.38 7/15/2033 14.00 GENERAL MOTORS 8.80 3/1/2021 13.75 GENERAL MOTORS 9.40 7/15/2021 14.25 GENERAL MOTORS 9.45 11/1/2011 14.00 GMAC LLC 6.75 11/15/2009 96.50 GMAC LLC 6.80 11/15/2009 98.88 HAWAIIAN TELCOM 9.75 5/1/2013 2.25 HERBST GAMING 7.00 11/15/2014 5.50 HERBST GAMING 8.13 6/1/2012 5.50 IDEARC INC 8.00 11/15/2016 5.00 INDALEX HOLD 11.50 2/1/2014 1.06 INN OF THE MOUNT 12.00 11/15/2010 40.00 INTL LEASE FIN 4.50 11/15/2009 99.35 KAISER ALUM&CHEM 12.75 2/1/2003 4.00 KEYSTONE AUTO OP 9.75 11/1/2013 33.50 LANDAMERICA 3.13 11/15/2033 29.25 LAZYDAYS RV 11.75 5/15/2012 3.00 LEHMAN BROS HLDG 4.38 11/30/2010 14.00 LEHMAN BROS HLDG 4.50 7/26/2010 15.50 LEHMAN BROS HLDG 4.50 8/3/2011 11.58 LEHMAN BROS HLDG 4.70 3/6/2013 13.60 LEHMAN BROS HLDG 4.80 3/13/2014 15.25 LEHMAN BROS HLDG 4.80 6/24/2023 12.75 LEHMAN BROS HLDG 5.00 1/14/2011 14.26 LEHMAN BROS HLDG 5.00 1/22/2013 12.50 LEHMAN BROS HLDG 5.00 2/11/2013 13.00 LEHMAN BROS HLDG 5.00 3/27/2013 13.50 LEHMAN BROS HLDG 5.00 8/3/2014 13.50 LEHMAN BROS HLDG 5.00 8/5/2015 12.50 LEHMAN BROS HLDG 5.00 5/28/2023 11.65 LEHMAN BROS HLDG 5.00 5/30/2023 12.30 LEHMAN BROS HLDG 5.00 6/10/2023 12.51 LEHMAN BROS HLDG 5.00 6/17/2023 10.90 LEHMAN BROS HLDG 5.10 1/28/2013 12.75 LEHMAN BROS HLDG 5.10 2/15/2020 13.50 LEHMAN BROS HLDG 5.15 2/4/2015 13.25 LEHMAN BROS HLDG 5.20 5/13/2020 12.30 LEHMAN BROS HLDG 5.25 2/6/2012 14.00 LEHMAN BROS HLDG 5.25 2/11/2015 12.75 LEHMAN BROS HLDG 5.25 3/5/2018 10.90 LEHMAN BROS HLDG 5.25 3/8/2020 13.50 LEHMAN BROS HLDG 5.25 5/20/2023 11.30 LEHMAN BROS HLDG 5.35 2/25/2018 12.75 LEHMAN BROS HLDG 5.35 3/13/2020 11.00 LEHMAN BROS HLDG 5.35 6/14/2030 10.00 LEHMAN BROS HLDG 5.38 5/6/2023 12.35 LEHMAN BROS HLDG 5.40 3/6/2020 13.25 LEHMAN BROS HLDG 5.40 3/20/2020 13.25 LEHMAN BROS HLDG 5.40 3/30/2029 13.25 LEHMAN BROS HLDG 5.40 6/21/2030 12.30 LEHMAN BROS HLDG 5.45 3/15/2025 12.85 LEHMAN BROS HLDG 5.45 4/6/2029 12.30 LEHMAN BROS HLDG 5.45 2/22/2030 13.25 LEHMAN BROS HLDG 5.45 7/19/2030 12.75 LEHMAN BROS HLDG 5.45 9/20/2030 12.35 LEHMAN BROS HLDG 5.50 4/4/2016 14.00 LEHMAN BROS HLDG 5.50 2/4/2018 12.30 LEHMAN BROS HLDG 5.50 2/19/2018 11.50 LEHMAN BROS HLDG 5.50 11/4/2018 12.63 LEHMAN BROS HLDG 5.50 2/27/2020 11.38 LEHMAN BROS HLDG 5.50 8/19/2020 13.25 LEHMAN BROS HLDG 5.50 3/14/2023 12.30 LEHMAN BROS HLDG 5.50 4/8/2023 10.55 LEHMAN BROS HLDG 5.50 4/15/2023 12.75 LEHMAN BROS HLDG 5.50 4/23/2023 10.50 LEHMAN BROS HLDG 5.50 8/5/2023 12.35 LEHMAN BROS HLDG 5.50 10/7/2023 12.75 LEHMAN BROS HLDG 5.50 1/27/2029 13.25 LEHMAN BROS HLDG 5.50 2/3/2029 11.65 LEHMAN BROS HLDG 5.50 8/2/2030 12.18 LEHMAN BROS HLDG 5.55 2/11/2018 12.75 LEHMAN BROS HLDG 5.55 3/9/2029 12.75 LEHMAN BROS HLDG 5.55 1/25/2030 12.75 LEHMAN BROS HLDG 5.55 9/27/2030 12.75 LEHMAN BROS HLDG 5.55 12/31/2034 12.30 LEHMAN BROS HLDG 5.60 1/22/2018 13.50 LEHMAN BROS HLDG 5.60 9/23/2023 11.00 LEHMAN BROS HLDG 5.60 2/17/2029 12.75 LEHMAN BROS HLDG 5.60 2/24/2029 13.25 LEHMAN BROS HLDG 5.60 3/2/2029 12.75 LEHMAN BROS HLDG 5.60 2/25/2030 12.75 LEHMAN BROS HLDG 5.60 5/3/2030 12.75 LEHMAN BROS HLDG 5.63 1/24/2013 16.00 LEHMAN BROS HLDG 5.63 3/15/2030 13.25 LEHMAN BROS HLDG 5.65 9/14/2020 14.00 LEHMAN BROS HLDG 5.65 11/23/2029 12.75 LEHMAN BROS HLDG 5.65 8/16/2030 12.35 LEHMAN BROS HLDG 5.65 12/31/2034 12.75 LEHMAN BROS HLDG 5.70 1/28/2018 12.75 LEHMAN BROS HLDG 5.70 2/10/2029 12.75 LEHMAN BROS HLDG 5.70 4/13/2029 12.75 LEHMAN BROS HLDG 5.70 9/7/2029 12.75 LEHMAN BROS HLDG 5.70 12/14/2029 12.75 LEHMAN BROS HLDG 5.75 4/25/2011 13.88 LEHMAN BROS HLDG 5.75 7/18/2011 14.05 LEHMAN BROS HLDG 5.75 5/17/2013 14.00 LEHMAN BROS HLDG 5.75 3/27/2023 10.50 LEHMAN BROS HLDG 5.75 10/15/2023 12.75 LEHMAN BROS HLDG 5.75 10/21/2023 12.30 LEHMAN BROS HLDG 5.75 11/12/2023 12.75 LEHMAN BROS HLDG 5.75 11/25/2023 13.25 LEHMAN BROS HLDG 5.75 12/16/2028 12.00 LEHMAN BROS HLDG 5.75 12/23/2028 13.25 LEHMAN BROS HLDG 5.75 8/24/2029 12.35 LEHMAN BROS HLDG 5.75 9/14/2029 13.25 LEHMAN BROS HLDG 5.75 10/12/2029 10.55 LEHMAN BROS HLDG 5.75 3/29/2030 13.50 LEHMAN BROS HLDG 5.80 9/3/2020 13.25 LEHMAN BROS HLDG 5.80 10/25/2030 12.40 LEHMAN BROS HLDG 5.85 11/8/2030 13.00 LEHMAN BROS HLDG 5.88 11/15/2017 15.25 LEHMAN BROS HLDG 5.90 5/4/2029 12.75 LEHMAN BROS HLDG 5.90 2/7/2031 10.50 LEHMAN BROS HLDG 5.95 12/20/2030 13.25 LEHMAN BROS HLDG 6.00 4/1/2011 13.05 LEHMAN BROS HLDG 6.00 7/19/2012 15.00 LEHMAN BROS HLDG 6.00 12/18/2015 13.50 LEHMAN BROS HLDG 6.00 2/12/2018 13.50 LEHMAN BROS HLDG 6.00 1/22/2020 10.00 LEHMAN BROS HLDG 6.00 2/12/2020 13.63 LEHMAN BROS HLDG 6.00 1/29/2021 12.38 LEHMAN BROS HLDG 6.00 10/23/2028 12.30 LEHMAN BROS HLDG 6.00 11/18/2028 12.30 LEHMAN BROS HLDG 6.00 5/11/2029 10.00 LEHMAN BROS HLDG 6.00 7/20/2029 12.75 LEHMAN BROS HLDG 6.00 4/30/2034 12.30 LEHMAN BROS HLDG 6.00 7/30/2034 13.25 LEHMAN BROS HLDG 6.00 2/21/2036 12.75 LEHMAN BROS HLDG 6.00 2/24/2036 12.30 LEHMAN BROS HLDG 6.00 2/12/2037 12.85 LEHMAN BROS HLDG 6.05 6/29/2029 13.50 LEHMAN BROS HLDG 6.10 8/12/2023 12.75 LEHMAN BROS HLDG 6.15 4/11/2031 13.25 LEHMAN BROS HLDG 6.20 9/26/2014 15.25 LEHMAN BROS HLDG 6.20 6/15/2027 12.30 LEHMAN BROS HLDG 6.20 5/25/2029 12.35 LEHMAN BROS HLDG 6.25 2/5/2021 12.75 LEHMAN BROS HLDG 6.25 2/22/2023 11.30 LEHMAN BROS HLDG 6.40 10/11/2022 11.00 LEHMAN BROS HLDG 6.40 12/19/2036 15.25 LEHMAN BROS HLDG 6.50 2/28/2023 11.50 LEHMAN BROS HLDG 6.50 3/6/2023 11.00 LEHMAN BROS HLDG 6.50 9/20/2027 10.29 LEHMAN BROS HLDG 6.50 10/18/2027 11.00 LEHMAN BROS HLDG 6.50 10/25/2027 12.35 LEHMAN BROS HLDG 6.50 11/15/2032 13.25 LEHMAN BROS HLDG 6.50 1/17/2033 10.50 LEHMAN BROS HLDG 6.50 12/22/2036 13.50 LEHMAN BROS HLDG 6.50 2/13/2037 12.50 LEHMAN BROS HLDG 6.50 6/21/2037 12.30 LEHMAN BROS HLDG 6.50 7/13/2037 13.25 LEHMAN BROS HLDG 6.60 10/3/2022 12.94 LEHMAN BROS HLDG 6.63 1/18/2012 15.25 LEHMAN BROS HLDG 6.63 7/27/2027 13.25 LEHMAN BROS HLDG 6.75 7/1/2022 12.75 LEHMAN BROS HLDG 6.75 11/22/2027 11.50 LEHMAN BROS HLDG 6.75 3/11/2033 11.05 LEHMAN BROS HLDG 6.75 10/26/2037 12.50 LEHMAN BROS HLDG 6.80 9/7/2032 13.50 LEHMAN BROS HLDG 6.85 8/16/2032 11.00 LEHMAN BROS HLDG 6.85 8/23/2032 11.89 LEHMAN BROS HLDG 6.88 5/2/2018 16.13 LEHMAN BROS HLDG 6.90 9/1/2032 12.00 LEHMAN BROS HLDG 7.00 4/16/2019 12.75 LEHMAN BROS HLDG 7.00 5/12/2023 9.50 LEHMAN BROS HLDG 7.00 9/27/2027 15.50 LEHMAN BROS HLDG 7.00 10/4/2032 12.75 LEHMAN BROS HLDG 7.00 7/27/2037 13.00 LEHMAN BROS HLDG 7.00 9/28/2037 13.25 LEHMAN BROS HLDG 7.00 11/16/2037 9.90 LEHMAN BROS HLDG 7.00 12/28/2037 12.38 LEHMAN BROS HLDG 7.00 1/31/2038 13.25 LEHMAN BROS HLDG 7.00 2/1/2038 10.86 LEHMAN BROS HLDG 7.00 2/7/2038 13.25 LEHMAN BROS HLDG 7.00 2/8/2038 12.50 LEHMAN BROS HLDG 7.00 4/22/2038 13.25 LEHMAN BROS HLDG 7.05 2/27/2038 12.50 LEHMAN BROS HLDG 7.10 3/25/2038 13.75 LEHMAN BROS HLDG 7.20 8/15/2009 14.00 LEHMAN BROS HLDG 7.25 2/27/2038 10.75 LEHMAN BROS HLDG 7.25 4/29/2038 11.20 LEHMAN BROS HLDG 7.35 5/6/2038 10.48 LEHMAN BROS HLDG 7.73 10/15/2023 15.00 LEHMAN BROS HLDG 7.88 8/15/2010 14.30 LEHMAN BROS HLDG 8.00 3/5/2022 8.00 LEHMAN BROS HLDG 8.00 3/17/2023 13.88 LEHMAN BROS HLDG 8.05 1/15/2019 11.50 LEHMAN BROS HLDG 8.40 2/22/2023 14.00 LEHMAN BROS HLDG 8.50 8/1/2015 15.38 LEHMAN BROS HLDG 8.75 12/21/2021 12.50 LEHMAN BROS HLDG 8.75 2/6/2023 12.00 LEHMAN BROS HLDG 8.80 3/1/2015 15.38 LEHMAN BROS HLDG 8.92 2/16/2017 12.75 LEHMAN BROS HLDG 9.50 12/28/2022 12.98 LEHMAN BROS HLDG 9.50 1/30/2023 13.25 LEHMAN BROS HLDG 9.50 2/27/2023 12.75 LEHMAN BROS HLDG 10.00 3/13/2023 13.50 LEHMAN BROS HLDG 10.38 5/24/2024 11.00 LEHMAN BROS HLDG 11.00 10/25/2017 15.00 LEHMAN BROS HLDG 11.00 6/22/2022 13.25 LEHMAN BROS HLDG 18.00 7/14/2023 13.25 LTX-CREDENCE 3.50 5/15/2011 45.00 MAJESTIC STAR 9.50 10/15/2010 66.25 MAJESTIC STAR 9.75 1/15/2011 10.00 MERISANT CO 9.50 7/15/2013 3.60 MERRILL LYNCH 0.00 3/9/2011 95.04 MFCCN-CALL11/09 5.20 11/15/2029 89.63 MILLENNIUM AMER 7.63 11/15/2026 18.00 MORRIS PUBLISH 7.00 8/1/2013 28.00 NEWARK GROUP INC 9.75 3/15/2014 27.00 NEWPAGE CORP 12.00 5/1/2013 50.00 NORTH ATL TRADNG 9.25 3/1/2012 38.55 NTK HOLDINGS INC 10.75 3/1/2014 3.00 OSCIENT PHARM 12.50 1/15/2011 3.00 PALM HARBOR 3.25 5/15/2024 48.15 PANOLAM INDUSTRI 10.75 10/1/2013 31.50 PINNACLE AIRLINE 3.25 2/15/2025 98.00 RAFAELLA APPAREL 11.25 6/15/2011 34.00 RAIT FINANCIAL 6.88 4/15/2027 39.91 READER'S DIGEST 9.00 2/15/2017 1.50 RESIDENTIAL CAP 8.00 2/22/2011 62.00 RESIDENTIAL CAP 8.38 6/30/2010 76.00 RH DONNELLEY 6.88 1/15/2013 5.00 RH DONNELLEY 6.88 1/15/2013 4.25 RH DONNELLEY 6.88 1/15/2013 6.10 RH DONNELLEY 8.88 1/15/2016 6.13 RH DONNELLEY 8.88 10/15/2017 7.83 ROTECH HEALTHCA 9.50 4/1/2012 30.50 SIX FLAGS INC 9.63 6/1/2014 26.50 SIX FLAGS INC 9.75 4/15/2013 23.00 SPACEHAB INC 5.50 10/15/2010 45.25 STANLEY-MARTIN 9.75 8/15/2015 30.00 STATION CASINOS 6.00 4/1/2012 23.00 STATION CASINOS 6.50 2/1/2014 2.03 STATION CASINOS 6.63 3/15/2018 2.00 STATION CASINOS 6.88 3/1/2016 2.00 STATION CASINOS 7.75 8/15/2016 23.00 TEKNI-PLEX INC 12.75 6/15/2010 80.00 THORNBURG MTG 8.00 5/15/2013 4.00 TIMES MIRROR CO 6.61 9/15/2027 7.10 TIMES MIRROR CO 7.25 3/1/2013 9.80 TIMES MIRROR CO 7.25 11/15/2096 10.00 TIMES MIRROR CO 7.50 7/1/2023 10.00 TOUSA INC 7.50 3/15/2011 7.00 TOUSA INC 7.50 1/15/2015 4.85 TOUSA INC 9.00 7/1/2010 40.00 TOUSA INC 9.00 7/1/2010 41.00 TOUSA INC 10.38 7/1/2012 3.60 TRANSMERIDIAN EX 12.00 12/15/2010 20.50 TRIBUNE CO 4.88 8/15/2010 10.13 TRIBUNE CO 5.25 8/15/2015 9.75 TRIBUNE CO 5.67 12/8/2008 10.00 TRUMP ENTERTNMNT 8.50 6/1/2015 5.50 TXU CORP 4.80 11/15/2009 90.00 USFREIGHTWAYS 8.50 4/15/2010 62.00 VERASUN ENERGY 9.38 6/1/2017 14.42 VERENIUM CORP 5.50 4/1/2027 45.50 VION PHARM INC 7.75 2/15/2012 25.51 VISTEON CORP 7.00 3/10/2014 26.00 WASH MUT BANK FA 5.13 1/15/2015 0.13 WASH MUT BANK NV 5.50 1/15/2013 0.01 WASH MUT BANK NV 5.55 6/16/2010 34.50 WASH MUTUAL INC 4.20 1/15/2010 90.10 WASH MUTUAL INC 8.25 4/1/2010 71.00 WCI COMMUNITIES 7.88 10/1/2013 2.00 WCI COMMUNITIES 9.13 5/1/2012 7.90 WII COMPONENTS 10.00 2/15/2012 45.25 YELLOW CORP 5.00 8/8/2023 29.00 YELLOW CORP 5.00 8/8/2023 53.00 YOUNG BROADCSTNG 8.75 1/15/2014 0.50 ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers' public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com/ On Thursdays, the TCR delivers a list of recently filed Chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to nation's bankruptcy courts. The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. The Sunday TCR delivers securitization rating news from the week then-ending. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland, USA. Howard C. Tolentino, Joseph Medel C. Martirez, Denise Marie Varquez, Philline Reluya, Joy A. Agravante, Marites M. Claro, Rousel Elaine C. Tumanda, Ronald C. Sy, Joel Anthony G. Lopez, Cecil R. Villacampa, Sheryl Joy P. Olano, Carlo Fernandez, Christopher G. Patalinghug, and Peter A. Chapman, Editors. Copyright 2009. All rights reserved. ISSN: 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $775 for 6 months delivered via e- mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. *** End of Transmission **