/raid1/www/Hosts/bankrupt/TCR_Public/091103.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Tuesday, November 3, 2009, Vol. 13, No. 304
Headlines
1080 HARTFORD ROAD: Voluntary Chapter 11 Case Summary
26 MOORPARK LLC: Case Summary & Unsecured Creditor
67 FULTON REALTY: Voluntary Chapter 11 Case Summary
ACCURIDE CORP: S&P Withdraws 'D' Corporate Credit Ratings
ACTIVANT SOLUTIONS: S&P Downgrades Corporate Credit Rating to 'B-'
AERONUEVO LLC: Case Summary & 20 Largest Unsecured Creditors
AES IRONWOOD: Moody's Reviews 'B1' Rating for Possible Downgrade
AGG PROPERTIES LLC: Voluntary Chapter 11 Case Summary
AIRPARK HOLDINGS V: Voluntary Chapter 11 Case Summary
ALAN COLBY: Voluntary Chapter 11 Case Summary
ALDCO INVESTMENT #2: Voluntary Chapter 11 Case Summary
ALL LAND INVESTMENTS: Case Summary & 14 Largest Unsec. Creditors
ALTAH FACOCKTER SHTENER: Case Summary & 2 Largest Unsec. Creditors
AMERICAN AXLE: Inks Amendment to Rights Deal with Computershare
AMERICAN AXLE: Board Approves Amended Stockholder Rights Plan
AMERICAN AXLE: Posts $19.6 Million Net Income for Q3 2009
AMERIGROUP CORP: Lower Operating Results Won't Affect S&P's Rating
ARIZONA EQUIPMENT: Case Summary & 20 Largest Unsecured Creditors
ARKANSAS BEST: S&P Downgrades Corporate Credit Rating to 'BB+'
ART ADVANCED RESEARCH: Files for Bankruptcy in Canada
ASARCO LLC: AMC Reports Status on Registration of SCC Shares
ASARCO LLC: Asbestos Panel Gets Nod to Hire Jennings Strouss
ASARCO LLC: Prospect of Emerging as Grupo Unit Bites Profits
ASHLAND INC: S&P Puts 'BB-' Rating on CrewditWatch Positive
AVANTAIR INC: June 30 Balance Sheet Upside-Down by $36 Million
AVIS BUDGET: Completes Asset-Backed Conduit Financing Renewal
BALLY TECHNOLOGIES: S&P Raises Corporate Credit Rating to 'BB+'
BEARINGPOINT INC: Perot Systems Closes Purchase of Shanghai Unit
BENJAMIN CATLIN: Case Summary & 20 Largest Unsecured Creditors
BGM PASADENA: Section 341(a) Meeting Scheduled for Dec. 7
BRIDGEVIEW AEROSOL: Case Summary & 20 Largest Unsecured Creditors
BRIAN SCOTT HACKER: Case Summary & 11 Largest Unsecured Creditors
BURGER KING: Fitch Affirms Issuer Default Rating at 'BB'
CABRILLO COMMONS: Case Summary & 20 Largest Unsec. Creditors
CAL INVESTMENTS INC: Case Summary & 20 Largest Unsecured Creditors
CANARGO ENERGY: Has $1.2-Mil. of DIP Financing from Persistency
CANARGO ENERGY: Voluntary Chapter 11 Case Summary
CAPMARK FINANCIAL: Proposes Berkadia-Led Auction for Mortgage Biz
CAPMARK FINANCIAL: Proposes to Use Lenders' Cash Collateral
CAPMARK FINANCIAL: Proposes to Pay Sales and Use Taxes
CAPMARK FINANCIAL: Proposes to Reject 5 Office Facility Leases
CAPMARK FINANCIAL: Sec. 341 Meeting Set for December 3
CAPMARK FINANCIAL: Proposes Tap Ordinary Course Professionals
CATHOLIC CHURCH: Fairbanks Diocese Files 2nd Amended Plan
CATHOLIC CHURCH: Claimants Insists on Lift Stay for Alaska Trials
CATHOLIC CHURCH: Wilmington to Hire Ordinary Course Professionals
CDS DEVELOPMENT: Files for Ch 11 Bankr., Canceling Auction
CENTAUR PA: Units' Filings Part of Company-Wide Restructuring
CEQUEL COMMUNICATIONS: Note Upsizing Won't Move S&P's 'B+' Rating
CHEMTURA CORP: Equity Holders Form Alliance, Want Committee
CHEMTURA CORP: Plan Exclusivity Extended Until Feb. 11
CHEMTURA CORP: Posts $37 Mil. Operating Profit for Third Quarter
CHEMTURA CORP: Proposes to Terminate Post-Employment Benefits
CHRYSLER LLC: New Chrysler Offers Buyout to 23,000 Hourly Workers
CIT GROUP: Seeks December 15 Extension for Schedules Filing
CIT GROUP: Updated Chapter 11 Case Summary & Creditors' Lists
CIT GROUP: Bankruptcy May Erase Taxpayer, Shareholder Stakes
CITIGROUP INC: To Issue EUR1.5-Bil. of 7.375% Fixed Rate Notes
CLIFFSIDE AT DES MOINES: Case Summary & 2 Largest Unsec. Creditors
CONTINENTAL AIRLINES: To Issue $644,437,000 of 2009-2 EETCs
COREL CORP: S&P Downgrades Corporate Credit Ratings to 'B-'
COTT CORP: Posts $13.9 Million Net Income for Q3 2009
COTT CORP: Berry Plastics Issues $620MM New Notes to Fund Deal
CRYOPORT INC: To Restate Financial Report for June 2009 Quarter
CUNNINGHAM BROADCASTING: Amends Agreements With Sinclair
DAMON'S GRILL: Files for Chapter 11 Bankruptcy to Protect Interest
DECODE GENETICS: Promissory Note Maturity Date Moved to Monday
DELPHI CORP: Treasury Permits GM to Release $2.8BB From Funds
DELTA AIR: DP3's Motion to Form VEBA for Retirees' Health Coverage
DELTA AIR: Has $161 Mil. Q3 Loss on Weak Revenues
DELTA AIR: Objects to Ex-CFO Michelle Burns' Claims
DIAMOND CREEK: Emerges From Chapter 11 Bankruptcy Protection
DOLE FOOD: S&P Raises Corporate Credit Rating to 'B' From 'B-'
DOLLAR THRIFTY: To Close Common Stock Offering Today
DRILLING & BLASTING: Case Summary & 20 Largest Unsecured Creditors
EARNEST UPCHURCH: Voluntary Chapter 11 Case Summary
EDUCATION MANAGEMENT: S&P Raises Corporate Credit Rating to 'B+'
EDWARD JOHN NAWOROL: Case Summary & 3 Largest Unsecured Creditors
EGAIN COMMUNICATIONS: June 30 Balance Sheet Upside-Down by $4.1MM
EMMIS COMMUNICATIONS: Disputes ORTT Decision on Radio License
EMMIS COMMUNICATIONS: Meets Nasdaq's Minimum Bid Price Rule
EQUIPMENT ACQUISITION: Section 341(a) Meeting Scheduled for Dec. 1
ERNIE LEE JACOBSEN: Voluntary Chapter 11 Case Summary
ESTATE HOMES: Case Summary & 20 Largest Unsecured Creditors
EXPEDIA INC: Moody's Upgrades Corporate Credit Rating to 'Ba1'
FANNIE MAE: Goldman to Buy Tax Credits; Treasury Objects
FAIRPOINT COMMS: Proposal to Obtain $75-Mil. of DIP Financing
FAIRPOINT COMMS: Proposes to Pay Employee Obligations
FAIRPOINT COMMS: Schedules and Statements Due December 10
FEDERAL-MOGUL: Reports $10.4 Mil. Net Income for Third Quarter
FEDERAL-MOGUL: Retirees, USW Rally Against Suspension of Benefits
FIRSTFED FINANCIAL: Casso to Seek Funding, Resigns From Board
FLINTKOTE CO: Gets Sixth Extension to File Reorganization Plan
FORD MOTOR: Reports $997 Million 3rd Quarter 2009 Net Income
FORD MOTOR: CAW Members Approve New Deal; One Plant to Be Closed
FORD MOTOR: UAW Members Reject Concessions Agreement
FORD MOTOR: Raising $3.3-Bil. to Pay Down Credit Line
FREEDOM COMMUNICATIONS: Files Chapter 11 Reorganization Plan
GENERAL MARITIME: Moody's Assigns Corporate Family Rating at 'B1'
GENERAL MARITIME: S&P Affirms 'BB-' Corporate Credit Rating
GEORGIANA REMOLLO SANTOS: Voluntary Chapter 11 Case Summary
GRANADA LAKES: Case Summary & 20 Largest Unsecured Creditors
GREATER ATLANTIC: Closing of MidAtlantic Merger Moved to Nov. 15
HALEH MERRIKH: Case Summary & 15 Largest Unsecured Creditors
HARRAH'S ENTERTAINMENT: Net Loss Widens to $1.62-Bil. in Q3 2009
HARRAH'S ENTERTAINMENT: Purchases CMBS Loans at Steep Discount
HAWAII SUPERFERRY: Court OKs 2nd Amended Plan of Liquidation
HAYES LEMMERZ: Court OKs Sale of Units' Assets to Harvey Holdings
HEALTHSOUTH CORP: Amends Credit Agreement and Extends Term Loan
HEALTHSOUTH CORP: Launches New CFO Search After Workman Resigns
HIDDEN CREEK LDHA: Case Summary & 14 Largest Unsecured Creditors
HORIZON NATURAL: Massey Settles Lawsuit With Over 200 Miners
HOWELL EQUIPMENT: Voluntary Chapter 11 Case Summary
IA GLOBAL: June 30 Balance Sheet Upside-Down by $9.5 Million
IDEARC INC: Paulson Wants to Get Almost Half of Common Shares
IPCS INC: Silver Point Capital Ceases to be 5% Shareholder
IRENE ALVAREZ: Case Summary & 5 Largest Unsecured Creditors
JAMES GRIBBLE: Case Summary & 20 Largest Unsecured Creditors
JETBLUE AIRWAYS: Files Shelf Registration Statement
JIMMIE RAY PENNELL: Case Summary & 13 Largest Unsecured Creditors
J.K. BRUNNER: Voluntary Chapter 11 Case Summary
JOHN SHULER: Case Summary & 20 Largest Unsecured Creditors
JS ENTERPRISES: Case Summary & 6 Largest Unsecured Creditors
LDG SOUTH: Must File Missing Schedules by Nov. 6
LANDAMERICA FIN'L: Capital Title's 341 Meet Scheduled for Nov. 13
LANDAMERICA FIN'L: Files Plan Exhibit, Further Amends Plan
LANDAMERICA FIN'L: LES to Sell Tranche A Notes for $9.6MM
LEHMAN BROTHERS: LBI Trustee to Hold Status Conference Nov. 5
LEHMAN BROTHERS: Proposes to Allow Chubb to Pay Litigation Costs
LEHMAN BROTHERS: Proposes to Approve Deal With LB Re Financing
LEHMAN BROTHERS: Proposes to Transfer Assets Of 2 Trust Companies
LEHMAN BROTHERS: Wants to Set Process to Restructure Loan Terms
LEHMAN BROTHERS: Auction of 238-Piece Artwork to Net $750,000
LEVEL 3: Reports $170 Million Third Quarter 2009 Net Loss
LOURDES GAGAZA: Case Summary & 20 Largest Unsecured Creditors
MAGNA ENTERTAINMENT: Increases MID DIP Financing by $26 Million
MEDICAL FACILITIES MANAGEMENT: Voluntary Chapter 11 Case Summary
MENDOCINO REALTY: Case Summary & 19 Largest Unsecured Creditors
MISSOURI REALTY: Case Summary & 20 Largest Unsecured Creditors
MODINE MANUFACTURING: FY2010 Q2 Net Loss Widens to $20.96 Mil.
MONTEALLEGRE LLC: Case Summary & 15 Largest Unsecured Creditors
MORRIS PUBLISHING: To File Ch. 11 if Exchange Offer Rejected
MTF DEVELOPMENT INC: Voluntary Chapter 11 Case Summary
NCI BUILDING: Fischer Resigns as President of Robertson-Ceco Unit
NEXT INC: Earns $71,400 in Third Quarter Ended August 30
OTC INTERNATIONAL: Files Plan of Liquidation and Disc. Statement
OTTERTAIL AG: Files for Bankruptcy; Has Deal With Secured Lenders
PACIFIC NORTHERN: Case Summary & Unsecured Creditor
PALMDALE HILLS: Lehman Amends Chapter 11 Plan for SunCal Units
PARLUX FRAGRANCES: Signs Extension of Regions Bank Loan
PROGRESSIVE HEALTHCARE: Voluntary Chapter 11 Case Summary
PROVIDENT ROYALTIES: Chapter 11 Trustee Can Sell De Minimis Assets
QUINLAN PLAZA AND PROFESSIONAL: Voluntary Chapter 11 Case Summary
RAY LLOYD REALTY: Case Summary & 20 Largest Unsecured Creditors
READER'S DIGEST: Can Sell De Minimis Assets in Ordinary Course
READER'S DIGEST: Gets Nod to Sign Bertelsmann Outsourcing Pacts
READER'S DIGEST: Gets Nod to Scrap SunGuard & ChannelAdvisor Pacts
RECTICEL: Problems with JCI, Inteva Pacts Cue Units' Bankruptcy
RECTICEL INTERIORS: Voluntary Chapter 11 Case Summary
REVLON INC: Board Elects Richard Santagati as Director
REVLON INC: Posts $23.1 Million Net Income for Q3 2009
REVLON INC: Unit Seeks Amendments to Bank Credit Facilities
RITE AID: Closes Plan to Refinance Accounts Receivable Facilities
ROBERT EDWARD BROWN: Case Summary & 20 Largest Unsecured Creditors
SARATOGA MEDICAL CENTER: Voluntary Chapter 11 Case Summary
SAVANNAH GATEWAY WEST: Case Summary & 12 Largest Unsec. Creditors
SEASCAPE PROPERTY: Case Summary & Unsecured Creditor
SEMGROUP LP: Bankruptcy Court's Order Confirming Plan
SEMGROUP LP: Proposes Settlement with ConocoPhillips
SEMGROUP LP: Wants to Settle ABN Amro, et al.'s LSO Claims
SHIRLEY SINGLETON: Case Summary & 20 Largest Unsecured Creditors
SIERRA LIFE SCIENCES: Case Summary & 16 Largest Unsec. Creditors
SINCLAIR BROADCAST: Amends Agreements With Cunningham
SINCLAIR BROADCAST: Refinances Bank Debt; Closes Notes Offering
SKILLSOFT CORP: S&P Raises Rating on $225 Mil. Loan to 'BB+'
SONIC AUTOMOTIVE: Redeems 6% Senior Secured Convertible Notes
SONIC AUTOMOTIVE: To Get $3.3MM Aid From GM to Shutter Franchises
SOUTH TEXAS OIL: Files for Chapter 11 Bankruptcy in Texas
SPANSION INC: Gets Nod to Reject Pact with American Gas
SPANSION INC: Gets Nod to Reject Contract with Ariba Inc.
SPANSION INC: Gets Nod to Assume Contract with SAS
SPECTRUM BRANDS: Only Case of Spectrum Jung Labs Remains Open
SPECTRUM BRANDS: Files Omnibus Claims Objection
SPECTRUM BRANDS: Files Objections to Claims Under Litigation
SPRINT NEXTEL: Holds 9.4% of iPCS Common Shares
SPRINT NEXTEL: Reports $478 Mil. Third Quarter 2009 Net Loss
STANDARD MOTOR: In Talks to Sell European Business for GBP3.6MM
STANDARD MOTOR: To Raise Funds by Issuing 3MM Common Shares
STANDARD PACIFIC: Matlin's Schoels Joins Board of Directors
STANDARD PACIFIC: Posts $23.8 Million Net Loss for 3rd Qtr 2009
STATION CASINOS: Proposes to Extend Claims Bar Date Until Jan. 15
STATION CASINOS: Schedules of Assets & Liabilities
STATION CASINOS: Statement of Financial Affairs
STATION CASINOS: Wants Plan Exclusivity Until March 25
STERLING MINING: Alberta Star Deal Requires Plan by Dec. 15
STERLING WH COMPANY: Case Summary & 8 Largest Unsec. Creditors
TARRAGON CORP: 800 Madison Can Access BofA's Cash Collateral
THOMAS EGGETT: Case Summary & 20 Largest Unsecured Creditors
THORNBURG MORTGAGE: Joel Sher Appointed as Chapter 11 Trustee
TPF GENERATION: S&P Gives Negative Outlook, Affirms 'BB' Rating
TRENTON RIDGE: Case Summary & 20 Largest Unsecured Creditors
TRONOX INC: Antitrust Waiting Period Ends for Huntsman Purchase
UNISYS CORP: Reports $61.1 Million Third-Quarter 2009 Net Income
VALASSIS COMMUNICATIONS: S&P Raises Corp. Credit Rating to 'B+'
VELOCITY EXPRESS: Court OKs $14MM DIP Loan from Burdale Capital
WAIGHTSTILL MOUNTAIN: Case Summary & 3 Largest Unsecured Creditors
WILLIAM LYON: S&P Downgrades Rating on Senior Notes to 'D'
WINTHROP LOCKWOOD: Voluntary Chapter 11 Case Summary
WOODBINE FAMILY: Case Summary & 20 Largest Unsecured Creditors
W.R. GRACE: Settles Austin's $2.5MM Remediation Claim
YRC WORLDWIDE: Fitch Downgrades Issuer Default Rating to 'C'
YRC WORLDWIDE: Moody's Says USF Offer is a Distressed Exchange
YRC WORLDWIDE: Posts $158.7 Million Net Loss for Q3 2009
YRC WORLDWIDE: Renews ABS Facility & Amends JPMorgan Loan
YRC WORLDWIDE: To Launch Exchange Offer for Old Notes
* Leveraged Markets Maintain Upward Momentum in Q3, Says Fitch
* Stiglitz Says U.S. Is Paying for Failure to Take Over Banks
* Yesner & Boss Expands Services for Mortgage & Bankruptcy
* Large Companies With Insolvent Balance Sheets
*********
1080 HARTFORD ROAD: Voluntary Chapter 11 Case Summary
-----------------------------------------------------
Debtor: 1080 Hartford Road, LLC
dba Waterford Speedbowl
1080 Hartford Road
Waterford, CT 06385
Bankruptcy Case No.: 09-23172
Chapter 11 Petition Date: October 30, 2009
Court: United States Bankruptcy Court
District of Connecticut (Hartford)
Judge: Chief Judge Albert S. Dabrowski
Debtor's Counsel: Anthony S. Novak, Esq.
Lobo & Novak, LLP
280 Adams Street
Manchester, CT 06042-1975
Tel: (860) 645-0006
Fax: (860) 645-1110
Email: AnthonySNovak@aol.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
The Debtor did not file a list of its 20 largest unsecured
creditors when it filed its petition.
The petition was signed by Terry J. Eames, managing member of the
Company.
26 MOORPARK LLC: Case Summary & Unsecured Creditor
--------------------------------------------------
Debtor: 26 Moorpark LLC
5103 Garden Grove Avenue
Tarzana, CA 91356
Bankruptcy Case No.: 09-24410
Chapter 11 Petition Date: October 29, 2009
Court: United States Bankruptcy Court
Central District of California (San Fernando Valley)
Judge: Geraldine Mund
Debtor's Counsel: Alan F. Broidy, Esq.
1925 Century Park E 17th Fl
Los Angeles, CA 90067
Tel: (310) 286-6601
Fax: (310) 286-6610
Email: sherrie@alanbroidy.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
The Debtor identified Isaac Arianpour with a debt claim for
$25,000 as its largest unsecured creditor. A full-text copy of the
Debtor's petition, including a list of its largest unsecured
creditor, is available for free at:
http://bankrupt.com/misc/cacb09-24410.pdf
The petition was signed by Kourosh Vosoghi, managing member of the
Company.
67 FULTON REALTY: Voluntary Chapter 11 Case Summary
---------------------------------------------------
Debtor: 67 Fulton Realty LLC
55 Watermill Lane
Great Neck, NY 11022
Bankruptcy Case No.: 09-78273
Chapter 11 Petition Date: October 30, 2009
Court: United States Bankruptcy Court
Eastern District of New York (Central Islip)
Judge: Alan S. Trust
Debtor's Counsel: Heath S. Berger, Esq.
Steinberg Fineo Berger & Fischoff, PC
40 Crossways Park Drive
Woodbury, NY 11797
Tel: (516) 747-1136
Fax: (516) 747-0382
Email: hberger@sfbblaw.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $500,001 to $1,000,000
According to the schedules, the Company has assets of at least
$1,501,000, and total debts of $750,000.
The Debtor did not file a list of its 20 largest unsecured
creditors when it filed its petition.
The petition was signed by Brian Teppel, managing member of the
Company.
ACCURIDE CORP: S&P Withdraws 'D' Corporate Credit Ratings
---------------------------------------------------------
Standard & Poor's Ratings Services said it has withdrawn its
ratings on commercial vehicle parts supplier Accuride Corp.
The corporate credit rating and subordinated debt rating on
Evansville, Ind.-based Accuride were lowered to 'D' (default) on
Aug. 6, 2009, after the company missed making an interest payment
on its subordinated notes. The senior secured debt ratings were
lowered to 'D' on Oct. 8, 2009, after the company filed for
Chapter 11 bankruptcy protection.
ACTIVANT SOLUTIONS: S&P Downgrades Corporate Credit Rating to 'B-'
------------------------------------------------------------------
Standard & Poor's Ratings Services said it lowered its corporate
credit rating on Livermore, California-based Activant Solutions
Inc. to 'B-' from 'B'. The outlook is negative.
At the same time, S&P lowered both the issue-level rating on the
company's senior secured term loan one notch to 'B' from 'B+' and
the issue-level rating on its outstanding $114 million senior
subordinated notes to 'CCC' from 'CCC+' as a result of the
downgrade of the corporate credit rating. The '2' recovery rating
on the senior secured term loan and the '6' recovery rating on the
senior subordinated notes remain unchanged.
"The lowering of the corporate credit rating reflects the
potential for weak operating performance given soft demand in the
company's main verticals and corresponding covenant tightening,"
said Standard & Poor's credit analyst Jennifer Pepper. While the
company has been able to mitigate performance shortfalls through
expense management, it is facing upcoming step-downs in its
performance covenants, leading to diminished covenant headroom.
AERONUEVO LLC: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: AeroNuevo, LLC
c/o Steven B. Towbin, Shaw Gussis et al
321 N. Clark St., Suite 800
Chicago, IL 60654
Bankruptcy Case No.: 09-41029
Chapter 11 Petition Date: October 30, 2009
Court: United States Bankruptcy Court
Northern District of Illinois (Chicago)
Judge: Pamela S. Hollis
Debtor's Counsel: Steven B. Towbin, Esq.
Shaw Gussis et al
321 N Clark St, Suite 800
Chicago, IL 60610
Tel: (312) 276-1333
Fax: (312) 275-0569
Email: stowbin@shawgussis.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
A full-text copy of the Debtor's petition, including a list of its
20 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/ilnb09-41029.pdf
The petition was signed by John F. Romano, president of the
Company.
AES IRONWOOD: Moody's Reviews 'B1' Rating for Possible Downgrade
----------------------------------------------------------------
Moody's Investors Service has placed the B1 rating of AES Ironwood
under review for possible downgrade. The review will consider the
expected financial impact of a significant scheduled decline in
capacity payments from the project's offtaker next year. Moody's
notes that there will be no offsetting decline in the project's
debt service requirements and as a result, margins could narrow
considerably. The review will take the company's 2010 operating
and capital budget into consideration, including any specific and
quantifiable measures that management will be implementing to
mitigate the impact of the decline in capacity payments, as well
as any developments that are expected to occur and that will have
a similar affect.
Capacity payments are scheduled to drop in 2010 by 17%, or
approximately $10 million. Capacity payments vary annually
according to a schedule in the PPA, with a peak in 2009 They grow
back somewhat through 2013 but then decline by another 14%
(relative to 2010 levels) by 2021, the final year of the PPA.
Though debt service also fluctuates annually, the changes are
generally not as dramatic, nor are they correlated to changes in
the capacity payments and do not act as an effective offset. Debt
service declines by just $400,000 to $32 million in 2010 (though
it did drop by $2.6 million in 2009).
As a result, financial performance, which has varied considerably
from year to year due to operating difficulties and other factors,
is expected to deteriorate significantly. In the twelve months
through June 30, 2009, Moody's calculates that debt service
coverage was 1.25x before $6 million in subordinated payments to
management. Even after those payments, coverage remained adequate
at 1.1x. However, these figures will fall to approximately 1.0x
and 0.85x respectively based upon the decline in capacity payments
if nothing else changes. If the project has additional operating
difficulties, coverages could fall even further.
The last rating action on the project bonds occurred on August 3,
2006 when the rating was upgraded to B1.
AES Ironwood, LLC, is a 705 MW gas-fired combined-cycle generating
facility in South Lebanon Township, Pennsylvania. The project,
which is owned by AES Corp., sells all of its capacity to PPL
Energy Plus pursuant to a tolling agreement expiring in 2021. PPL
Energy Plus' obligations under the toll are guaranteed by its
parent, PPL Energy Supply, LLC (sr. unsec. Baa2 stable).
AGG PROPERTIES LLC: Voluntary Chapter 11 Case Summary
-----------------------------------------------------
Debtor: Agg Properties LLC
1651 Howell Highlands
Stone Mountain, GA 30087
Bankruptcy Case No.: 09-88610
Chapter 11 Petition Date: October 29, 2009
Court: United States Bankruptcy Court
Northern District of Georgia (Atlanta)
Judge: Margaret Murphy
Debtor's Counsel: Kenneth Mitchell, Esq.
Giddens, Davidson & Mitchell P.C.
Suite 300-B, 5000 Snapfinger Woods Drive
Decatur, GA 30034
Tel: (770) 987-7007
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $500,001 to $1,000,000
The Company says it does not have unsecured creditors who are non
insiders when they filed their petition.
The petition was signed by Surinder B. Aggarwal, managing member
of the Company.
AIRPARK HOLDINGS V: Voluntary Chapter 11 Case Summary
-----------------------------------------------------
Debtor: Airpark Holdings V LLC
PO Box 13311
Scottsdale, AZ 85267
Bankruptcy Case No.: 09-27431
Chapter 11 Petition Date: October 28, 2009
Court: United States Bankruptcy Court
District of Arizona (Phoenix)
Judge: Sarah Sharer Curley
Debtor's Counsel: Mark W. Roth, Esq.
Polsinelli Shughart P.C.
3636 N. Central Avenue, Suite 1200
Phoenix, AZ 85012
Tel: (602) 650-2012
Fax: (602) 926.8562
Email: mroth@polsinelli.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
The Debtor did not file a list of its 20 largest unsecured
creditors when it filed its petition.
The petition was signed by John Wright, managing member of the
Company.
ALAN COLBY: Voluntary Chapter 11 Case Summary
---------------------------------------------
Debtor: Alan E. Colby
aka Alan Colby
PO Box 304
Plaistow, NH 03865
Bankruptcy Case No.: 09-14226
Chapter 11 Petition Date: October 29, 2009
Court: United States Bankruptcy Court
District of New Hampshire Live Database (Manchester)
Judge: J. Michael Deasy
Debtor's Counsel: None. Debtor Filed Petition as Pro Se.
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
The Debtor did not file a list of its 20 largest unsecured
creditors when it filed its petition.
The petition was signed by Mr. Colby.
ALDCO INVESTMENT #2: Voluntary Chapter 11 Case Summary
------------------------------------------------------
Debtor: Aldco Investment #2 LLC
dba Concorde Senior Living
2932 N 14th Street
Phoenix, AZ 85014
Bankruptcy Case No.: 09-27459
Chapter 11 Petition Date: October 28, 2009
Court: United States Bankruptcy Court
District of Arizona (Phoenix)
Judge: Charles G. Case II
Debtor's Counsel: Dennis J. Wortman, Esq.
202 East Earll Drive, Suite 490
Phoenix, AZ 85012
Tel: (602) 257-0101
Fax: (602) 279-5650
Email: djwortman@azbar.org
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
The Debtor did not file a list of its 20 largest unsecured
creditors when it filed its petition.
The petition was signed by Scott A. Klaschka, managing member of
the Company.
ALL LAND INVESTMENTS: Case Summary & 14 Largest Unsec. Creditors
----------------------------------------------------------------
Debtor: All Land Investments, LLC
1082 Old Churchmans Road, Suite 201
Newark, DE 19713
Case No.: 09-13790
Type of Business: The Debtor operates a real estate business.
Chapter 11 Petition Date: October 29, 2009
Court: United States Bankruptcy Court
District of Delaware (Delaware)
Judge: Kevin J. Carey
Debtor's Counsel: Gary F. Seitz, Esq.
Rawle & Henderson LLP
300 Delaware Avenue
Suite 1015, P.O. Box 588
Wilmington, DE 19899-0588
Tel: (302) 778-1200
Fax: (302) 778-1400
Email: gseitz@rawle.com
Estimated Assets: $10,000,001 to $50,000,000
Estimated Debts: $10,000,001 to $50,000,000
According to the schedules, the Company has assets of at least
$20,160,303, and total debts of $22,796,539.
The petition was signed by Lawrence A. Zeccola Sr., the company's
managing member.
Debtor's List of 14 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Carroll, Henry E. and $12,500
Donna S.
Crouse Brothers $67,107
Excavating, Inc.
Davis, Bowen and $14,120
Friedel, Inc.
FLZ Development, LLC $189,200
Huntington Development, LLC Unknown
Kent County Department of $57,400
Public Works
Attn: Hans Medlarz
Parente Randolph, LLC $2,850
Schmidt, Mary Ann $13,473
Zeccola Builders, Inc. Unknown
Zeccola Builders, Inc. $25,039
Zeccola, Frank W. $4,172,934
307 Fieldstone Drive
Hockessin, DE 19707
Zeccola, Frank W. Unknown
Zeccola, Lawrence A., Sr. Unknown
Zeccola, Lawrence A., Sr. $4,116,051
211 Stonechase Drive
Hockessin, DE 19707
ALTAH FACOCKTER SHTENER: Case Summary & 2 Largest Unsec. Creditors
------------------------------------------------------------------
Debtor: Altah Facockter Shtener LLC
dba The Pleasant Town Company, LLC
462 N. Taylor, Suite 200
Saint Louis, MO 63108
Bankruptcy Case No.: 09-51023
Chapter 11 Petition Date: October 30, 2009
Court: United States Bankruptcy Court
Eastern District of Missouri (St. Louis)
Judge: Kathy A. Surratt-States
Debtor's Counsel: Peter D. Kerth, Esq.
Gallop, Johnson & Neuman, L.C.
101 S. Hanley, Suite 1600
St. Louis, MO 63105
Tel: (314) 615-6000
Email: pdkerth@gjn.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
According to the schedules, the Company has assets of at least
$1,022,527, and total debts of $1,888,000.
A full-text copy of the Debtor's petition, including a list of its
2 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/moeb09-51023.pdf
The petition was signed by Richard Kalina, member of the Company.
AMERICAN AXLE: Inks Amendment to Rights Deal with Computershare
---------------------------------------------------------------
American Axle & Manufacturing Holdings, Inc., on October 30, 2009,
entered into an Amended and Restated Rights Agreement with
Computershare Trust Company, N.A., as rights agent, to preserve
the long-term value and availability of the Company's net
operating loss carryforwards and related tax benefits.
The Rights Agreement, as amended, reduces the beneficial ownership
threshold at which a person or group becomes an "Acquiring Person"
under the Rights Agreement from 15% of the Company's then-
outstanding shares of common stock, par value $0.01 per share, to
4.99% of the Company's then-outstanding shares of Common Stock.
The Rights Agreement also, among other things, expands the scope
of the definition of "Acquiring Person" to include persons or
groups that would be considered "5-percent shareholders" under
Section 382 of the Internal Revenue Code of 1986, as amended, and
the related treasury regulations promulgated thereunder.
Additionally, the Rights Agreement exempts stockholders who
currently beneficially own 5% or more of the Company's outstanding
shares of Common Stock so long as their ownership continuously
equals or exceeds 5% and provided that they do not acquire an
additional 0.5% or more of the Company's outstanding shares of
Common Stock.
The Rights Agreement will automatically expire September 15, 2013.
In addition, beginning in 2011, the Company's board of directors
will review the Rights Agreement annually in the first fiscal
quarter to determine whether any of its provisions are, or the
Rights Agreement itself is, no longer in the best interests of the
Company, its stockholders and any other relevant constituencies.
On October 29, 2009, the Board of Directors adopted this amendment
to the By-laws of AAM:
"Section 11(A)(2). A stockholder proposing business or
nominating persons for election to the Board of Directors at
an annual meeting of stockholders must include the following
additional information in its advance notice to the Company:
(1) any warrants, options or other derivative instruments
relating to the Company's stock that are held by such
stockholder, (2) any agreements such stockholder has with
respect to the business proposal, (3) a statement that the
stockholder is the holder of record of stock of the Company
entitled to vote at the meeting and intends to appear in
person or by proxy at the meeting, and (4) whether such
stockholder is part of a group that intends to deliver a
proxy statement or solicit proxies."
About American Axle
Headquartered in Detroit, Michigan, American Axle & Manufacturing
Holdings Inc. (NYSE: AXL) -- http://www.aam.com/-- is a world
leader in the manufacture, engineering, design and validation of
driveline and drivetrain systems and related components and
modules, chassis systems and metal-formed products for trucks,
sport utility vehicles, passenger cars and crossover utility
vehicles. In addition to locations in the United States
(Michigan, New York, Ohio and Indiana), AAM also has offices or
facilities in Brazil, China, Germany, India, Japan, Luxembourg,
Mexico, Poland, South Korea, Thailand and the United Kingdom.
* * *
As reported by the Troubled Company Reporter on September 24,
2009, Moody's Investors Service raised Axle's Corporate Family
Rating to Caa3 from Ca, and raised the rating on Axle's secured
guaranteed term loan to B3 from Caa2. Moody's affirmed the
company's Probability of Default Rating at Caa3, and affirmed the
ratings on the unsecured guaranteed notes and the unsecured
convertible notes at Ca. The Speculative Grade Liquidity Rating
is SGL-4. The outlook is changed to stable from negative.
The TCR also said Standard & Poor's Ratings Services revised its
outlook on Axle to developing from negative and affirmed its
'CCC+' corporate credit rating and other ratings.
AMERICAN AXLE: Board Approves Amended Stockholder Rights Plan
-------------------------------------------------------------
American Axle & Manufacturing Holdings, Inc., reports its Board of
Directors has approved an amended and restated Rights Plan to
preserve the long-term value and availability of AAM's net
operating loss carryforwards and related tax benefits.
As of December 31, 2008, AAM had net operating loss carryforwards
and related tax benefits of roughly $280 million.
AAM's ability to use its NOLs could be substantially limited if
AAM experiences an "ownership change" as defined under Section 382
of the Internal Revenue Code and the Treasury Regulations
promulgated thereunder. An "ownership change" under Section 382
generally would occur if "5-percent stockholders" collectively
increase their aggregate percentage ownership of AAM by more than
50 percentage points over their respective lowest percentage of
stock owned by such stockholders over a rolling three-year period.
While the adoption of the Amended and Restated Rights Plan is
intended to reduce and minimize the risk of an "ownership change"
within the meaning of Section 382, it does not guarantee that such
an ownership change will not occur, and there can be no assurance
to that effect.
Modifications to the Rights Plan include, among other things, a
reduction of the beneficial ownership threshold from 15% to 4.99%
of AAM's common stock and an expansion of the scope of the
definition of "Acquiring Person" to include persons and certain
groups that would be considered "5-percent stockholders" under
Section 382. The Amended and Restated Rights Plan exempts
stockholders who currently beneficially own 5% or more of AAM's
stock for so long as their ownership exceeds 5%, provided they do
not acquire an additional 0.5% or more of AAM's common stock.
The Amended and Restated Rights Plan will automatically expire on
September 15, 2013.
In addition, beginning in 2011, AAM's Board of Directors will
review the Amended and Restated Rights Plan annually in the first
fiscal quarter to determine whether any of its provisions are, or
the Amended and Restated Rights Plan itself is, no longer in the
best interests of AAM, its stockholders and any other relevant
constituencies.
About American Axle
Headquartered in Detroit, Michigan, American Axle & Manufacturing
Holdings Inc. (NYSE: AXL) -- http://www.aam.com/-- is a world
leader in the manufacture, engineering, design and validation of
driveline and drivetrain systems and related components and
modules, chassis systems and metal-formed products for trucks,
sport utility vehicles, passenger cars and crossover utility
vehicles. In addition to locations in the United States
(Michigan, New York, Ohio and Indiana), AAM also has offices or
facilities in Brazil, China, Germany, India, Japan, Luxembourg,
Mexico, Poland, South Korea, Thailand and the United Kingdom.
* * *
As reported by the Troubled Company Reporter on September 24,
2009, Moody's Investors Service raised Axle's Corporate Family
Rating to Caa3 from Ca, and raised the rating on Axle's secured
guaranteed term loan to B3 from Caa2. Moody's affirmed the
company's Probability of Default Rating at Caa3, and affirmed the
ratings on the unsecured guaranteed notes and the unsecured
convertible notes at Ca. The Speculative Grade Liquidity Rating
is SGL-4. The outlook is changed to stable from negative.
The TCR also said Standard & Poor's Ratings Services revised its
outlook on Axle to developing from negative and affirmed its
'CCC+' corporate credit rating and other ratings.
AMERICAN AXLE: Posts $19.6 Million Net Income for Q3 2009
---------------------------------------------------------
American Axle & Manufacturing Holdings, Inc., reported net income
in the third quarter of 2009 of $19.6 million or $0.35 per share.
This compares to a net loss of $440.9 million or $8.54 per share
in the third quarter of 2008. AAM's third quarter of 2009 net
profit is the first profitable quarterly result AAM has reported
since the third quarter of 2007.
AAM's results in the third quarter of 2009 were adversely impacted
by the extended production shutdowns of with General Motors
Company and Chrysler Group LLC. AAM estimates the reduction in
sales and operating income resulting from these shutdowns to be
roughly $100.6 million and roughly $29.3 million -- or $0.52 per
share -- respectively.
In the third quarter of 2009, AAM recorded pension and
postretirement benefit curtailment gains of $42.3 million -- or
$0.76 per share. The gains were partially offset by special
charges and restructuring costs of $13.0 million -- or $0.23 per
share -- primarily relating to salaried attrition programs,
capacity rationalization activities and the successful closing of
a settlement and commercial agreement with GM and amendment of
AAM's Revolving Credit Facility and Term Loan agreements that
position AAM to complete its restructuring outside of a bankruptcy
process.
In the third quarter of 2008, AAM recorded $398.0 million -- or
$7.71 per share -- of special charges, asset impairments and non-
recurring operating costs, primarily related to hourly and
salaried attrition programs and benefit reductions (including
pension and other postretirement benefit curtailments and special
and contractual termination benefits), plant closures and other
capacity rationalization activities.
"We believe the third quarter of 2009 marks a positive turning
point for AAM," said AAM's Co-Founder, Chairman of the Board and
Chief Executive Officer, Richard E. Dauch. "By finalizing new
business agreements with General Motors Company and amending our
senior credit agreements, we have successfully resolved the short-
term liquidity concerns that were facing AAM. We have also
preserved the significant value inherent in AAM's unparalleled
manufacturing and engineering expertise; product, process and
systems technology; and expanding new business backlog for our
many key stakeholders. With these important objectives
successfully achieved and AAM's operational restructuring now
nearly complete, we can once again focus on delivering outstanding
value to our customers on a daily basis, profitably growing AAM's
global businesses and continuing to diversify AAM's customer base,
product portfolio and global manufacturing and sourcing
footprint."
Net sales in the third quarter of 2009 were $409.6 million as
compared to $528.1 million in the third quarter of 2008. On a
sequential basis, AAM's sales in the quarter were up 67% as
compared to $245.6 million in the second quarter of 2009.
Customer production volumes for the North American light truck and
SUV programs AAM currently supports for GM and Chrysler were down
roughly 18% in the third quarter of 2009 as compared to the third
quarter of 2008, substantially all of which is attributable to
lower customer production of mid-sized light truck programs. Non-
GM sales represented roughly 18.3% of total sales in the third
quarter of 2009. On a year-to-date basis, AAM's non-GM sales
represented roughly 21.6% of total sales.
AAM's content-per-vehicle is measured by the dollar value of its
product sales supporting GM's North American light truck and SUV
programs and Chrysler's Heavy Duty Dodge Ram pickup trucks. For
the third quarter of 2009, AAM's content-per-vehicle was $1,396,
roughly the same as the second quarter of 2009. AAM's content-
per-vehicle was $1,453 in the third quarter of 2008.
Net sales in the first three quarters of 2009 were $1.1 billion as
compared to $1.6 billion in the first three quarters of 2008.
AAM's net loss in the first three quarters of 2009 was
$301.7 million as compared to a net loss of $1.1 billion in the
first three quarters of 2008.
AAM's results in the first three quarters of 2009 were adversely
impacted by the extended production shutdowns of GM and Chrysler.
Sales to GM were approximately 78% of AAM's total net sales in the
first nine months of 2009 as compared to 73% for the first nine
months of 2008 and 74% for the full-year 2008. Sales to Chrysler
were approximately 7% of AAM's total net sales in the first nine
months of 2009 as compared to 11% for the first nine months of
2008 and 10% for the full-year 2008.
AAM estimates the reduction in sales and operating income
resulting from these shutdowns to be roughly $304.3 million and
roughly $95.0 million (or $1.83 per share), respectively.
AAM's SG&A spending in the third quarter of 2009 was $44.0 million
as compared to $43.0 million in the third quarter of 2008.
Included in AAM's SG&A spending in the third quarter of 2009 was
$6.3 million of special charges and restructuring costs. In the
third quarter of 2008, AAM recorded a $1.4 million special gain in
SG&A.
AAM's R&D spending in the third quarter of 2009 was roughly
$15.1 million as compared to $21.2 million in the third quarter of
2008. On a year-to-date basis, AAM's R&D spending for the first
three quarters of 2009 was roughly $50.7 million as compared to
$63.4 million in the first three quarters of 2008.
AAM defines free cash flow to be net cash provided by (or used in)
operating activities and proceeds from the issuance of warrants to
GM, less capital expenditures net of proceeds from the sales of
equipment and dividends paid.
Net cash used in operating activities in the first three quarters
of 2009 was $19.7 million as compared to $97.3 million used in
operating activities during the first three quarters of 2008. In
conjunction with the settlement and commercial agreement with GM,
AAM received a $110 million cash payment from GM in the quarter,
$79.7 million of which was recorded in operating activities and
$30.3 million of which was recognized as a financing activity. For
purposes of measuring free cash flow in 2009, AAM includes the
entire $110 million cash payment. Capital spending and deposits
for the acquisition of property and equipment, net of proceeds
from the sale of equipment in the first three quarters of 2009 was
$115.0 million as compared to $100.5 million in the first three
quarters of 2008. Reflecting the impact of this activity, AAM's
free cash flow was a use of $104.4 million in the first three
quarters of 2009. In the first three quarters of 2008, AAM's free
cash flow was a use of $215.1 million.
Included in the first three quarters of 2009 cash flow results,
AAM paid $119.7 million for special charges and restructuring
costs, which primarily related to hourly and salaried attrition
programs and related statutory benefits.
As of September 30, 2009, AAM had roughly $370 million of
liquidity, consisting of available cash, short-term investments
and committed borrowing capacity on AAM's U.S credit facilities,
including the GM Second Lien Term Credit Facility.
As of September 30, 2009, AAM had $1.95 billion in total assets
against $2.69 billion in total liabilities.
AAM's new and incremental new business backlog is roughly
$1 billion and launches in the years 2010 to 2014. AAM is
currently bidding on roughly $700 million of new business,
substantially all of which is non-GM business related quotes.
As of December 31, 2008, AAM had net operating loss carryforwards
and related tax benefits of roughly $280 million.
A full-text copy of AAM's quarterly report on Form 10-Q is
available at no charge at http://ResearchArchives.com/t/s?47ed
About American Axle
Headquartered in Detroit, Michigan, American Axle & Manufacturing
Holdings Inc. (NYSE: AXL) -- http://www.aam.com/-- is a world
leader in the manufacture, engineering, design and validation of
driveline and drivetrain systems and related components and
modules, chassis systems and metal-formed products for trucks,
sport utility vehicles, passenger cars and crossover utility
vehicles. In addition to locations in the United States
(Michigan, New York, Ohio and Indiana), AAM also has offices or
facilities in Brazil, China, Germany, India, Japan, Luxembourg,
Mexico, Poland, South Korea, Thailand and the United Kingdom.
* * *
As reported by the Troubled Company Reporter on September 24,
2009, Moody's Investors Service raised Axle's Corporate Family
Rating to Caa3 from Ca, and raised the rating on Axle's secured
guaranteed term loan to B3 from Caa2. Moody's affirmed the
company's Probability of Default Rating at Caa3, and affirmed the
ratings on the unsecured guaranteed notes and the unsecured
convertible notes at Ca. The Speculative Grade Liquidity Rating
is SGL-4. The outlook is changed to stable from negative.
The TCR also said Standard & Poor's Ratings Services revised its
outlook on Axle to developing from negative and affirmed its
'CCC+' corporate credit rating and other ratings.
AMERIGROUP CORP: Lower Operating Results Won't Affect S&P's Rating
------------------------------------------------------------------
Standard & Poor's Ratings Services said that Amerigroup Corp.'s
(BB/Stable/--) announcement of year-to-date operating results,
which are trending lower than S&P's expectations for full-year
2009 operating performance, does not result in any rating action.
Lower-than-expected operating results reflect elevated medical
costs associated with a more severe flu season due to the H1N1
virus. S&P also expects this unfavorable medical loss development
to affect fourth-quarter results but does not change S&P's view of
the company's prospective earnings profile. Overall, S&P still
view Amerigroup's operating performance as being adequate relative
to the rating. In addition, S&P's rating has incorporated the
emerging downward pressures on operating margins across the health
insurance industry in 2009. Any additional shortfall in earnings
(a pretax ROR of less than 2%) relative to S&P's revised
expectations could result in a downgrade or a negative outlook.
For 2009, S&P expects revenue and pretax income to be
$5.1 billion-$5.2 billion and $150 million-$190 million (3.0%-3.5%
ROR), respectively. Furthermore, cash flow is expected to be
strong relative to revenue and debt service requirements. Debt
leverage and EBITDA interest coverage are expected to be about 20%
and 14x-16x, respectively. Membership by year-end 2009 is now
expected to be 1.7 million-1.8 million. By year-end 2009,
statutory risk-adjusted capitalization should be very good (a
'BBB' level of capitalization) based on Standard & Poor's capital
model.
ARIZONA EQUIPMENT: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: Arizona Equipment Rental I, LLC
4221 S. Station Master Drive
Tucson, AZ 85714
Case No.: 09-27946
Chapter 11 Petition Date: October 30, 2009
Court: United States Bankruptcy Court
District of Arizona (Tucson)
Debtor's Counsel: John R. Clemency, Esq.
Gallagher & Kennedy PA
2575 East Camelback Road, Suite 1100
Phoenix, AZ 85016
Tel: (602) 530-8040
Email: john.clemency@gknet.com
Lindsi M. Weber, Esq.
Gallagher & Kennedy, Pa
2575 E. Camelback Rd.
Phoenix, AZ 85016
Tel: (602) 530-8202
Fax: (602) 530-8500
Email: lindsi.weber@gknet.com
Estimated Assets: $10,000,001 to $50,000,000
Estimated Debts: $10,000,001 to $50,000,000
The petition was signed by Jeffrey S. Bleecker, the company's
owner.
Debtor's List of 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
American Hose & Trade Debt $1,882
Rubber Co.
Arnold Machinery Trade Debt $1,644
Boulevard Service Trade Debt $3,577
Cintas Corp LOC 445 Trade Debt $835
Earth Mover Tire Trade Debt $867
Sales, Inc.
GCR Tire Centers Trade Debt $3,145
Genie/Terex Trade Debt $2,461
Interstate Battery-Tucson Trade Debt $681
Jenkins Athens Insurance Trade Debt $24,601
Kempton Cheverolet Buick Trade Debt $2,732
Luna Instrustries, Inc. Trade Debt $611
Machinery Trader Trade Debt $2,424
Macks Auto Supply Trade Debt $840
Merle's Automotive Supply Trade Debt $823
Nuttals Towing, LLC Trade Debt $1,260
RDO Equipment Company Trade Debt $1,000
Roadrunner Fabrication Trade Debt $6,620
Southwest Truck Service Trade Debt $880
Trader Media Trade Debt $1,045
Wacker Trade Debt $586
ARKANSAS BEST: S&P Downgrades Corporate Credit Rating to 'BB+'
--------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on Arkansas Best Corp. to 'BB+' from 'BBB+' due to
deteriorating operating performance and constrained liquidity.
The outlook is negative. At the same time, S&P assigned a '2'
recovery rating to the company's existing $325 million revolving
credit facility, which expires May 2012. The '2' rating indicates
substantial (70%-90%) recovery of principal in a payment default
scenario. In addition, S&P lowered the rating on this facility to
'BBB-' from 'BBB+'.
The downgrade follows Fort Smith, Ark.-based Arkansas Best's
announcement of a third-quarter operating loss of $12.2 million.
Weak earnings performance was due to declining tonnage, down 10%
for the quarter, and soft pricing (revenue per hundred weight down
14%), which has substantially reduced covenant headroom under the
company's $325 million credit facility. As a result of earnings
pressures over the past several quarters, Arkansas Best has very
limited room under its revolver covenants and will likely breach a
covenant during the fourth quarter. Arkansas Best would need to
experience a meaningful improvement in earnings during the fourth
quarter to be in compliance with its fixed-charge coverage
covenant and maintain access to the revolver.
Standard & Poor's expects ongoing pricing pressures and tonnage
declines to cause further losses and constrain liquidity in the
near term. "If the company breaches the fixed-charge coverage
covenant and loses access to its revolving credit facility, (which
it uses for letters of credit), resulting in unrestricted cash,
short-term investments, and borrowing availability falling below
$100 million, S&P could lower the ratings," said Standard & Poor's
credit analyst Anita Ogbara. "We could revise the outlook to
stable if pricing and tonnage improved for a sustained period and
Arkansas Best returned to profitability on a pretax basis," she
continued.
ART ADVANCED RESEARCH: Files for Bankruptcy in Canada
-----------------------------------------------------
ART Advanced Research Technologies Inc. (ART) (TSX:ARA), a
Canadian medical device company and a leader in optical molecular
imaging products for the healthcare and pharmaceutical industries,
announced November 2 it filed a notice of intention to make a
proposal to its creditors under the Bankruptcy and Insolvency Act
with KPMG Inc. in order to provide the company with the liquidity
it requires to pursue its solicitation process. ART was also
authorized pursuant to an order of the Quebec Superior Court to
enter into a loan agreement with Dorsky Worldwide Corp. for
interim financing in an amount of up to $1,200,000.
The announcement follows the hiring of KPMG LLP as financial
advisor to assist ART in examining its available strategic
options, previously announced on October 29, 2009, and KPMG LLP's
analysis as to the best way to proceed during the strategic review
process in view of ART's ongoing financial needs. The new
financing will support ART's business continuity by providing
additional short-term liquidity while KPMG LLP and ART pursue the
strategic review process and continue soliciting purchase offers
for the business and assets of ART.
About ART Advanced Research
ART Advanced Research Technologies Inc. is a leader in molecular
imaging products for the healthcare and pharmaceutical industries.
ART has developed products in medical imaging, medical
diagnostics, disease research, and drug discovery with the goal of
bringing new and better treatments to patients faster. ART's
shares are listed on the TSX under the ticker symbol ARA. For more
information on ART, visit its Web site at http://www.art.ca/
ASARCO LLC: AMC Reports Status on Registration of SCC Shares
------------------------------------------------------------
During a October 19, 2009 hearing, the U.S. District Court for
the Southern District of Texas asked for the status of Southern
Copper Corporation's consideration of Americas Mining
Corporation's request that SCC enter into a registration rights
agreement with respect to the SCC shares deposited in escrow to
stay execution of the District Court's SCC final judgment.
AMC informed the District Court that the SCC Board of Directors
was meeting on that same day to review the findings of SCC's
Audit Committee. The District Court thus ordered AMC to inform
all interested parties of the Board's decision on the issue.
Accordingly, AMC notified the District Court and parties-in-
interest that on October 19, 2009, the SCC Audit Committee
reported its previous findings and conclusion that it was not in
the best interest of SCC to enter into the registration rights
agreement requested by AMC to the full SCC Board during its
regularly scheduled board meeting.
As a result of those findings, AMC received a letter from the
Board's secretary, outlining the Board's adoption of the Audit
Committee's conclusion that it was not in the best interest of
SCC to enter into the registration rights agreement. Moreover,
the SCC Board determined that it would not send the request to
the Affiliate Transactions Committee for further consideration.
In light of the reasoning behind the Audit Committee's and the
Board's decision, Brian Antweil, Esq., at Haynes & Boone, LLP, in
Houston, Texas, reveals that AMC immediately requested expedited
reconsideration of its request that SCC enter into the
registration rights agreement. In request for reconsideration,
AMC has offered to pay all expenses associated with the
registration of the shares in question. In addition, AMC has
asked that the Audit Committee consider and agree to enter into
the same or similar agreement with respect to the approximately
$2.2 billion of SCC stock deposited in a separate escrow to
support AMC's plan of reorganization for the Debtors.
The SCC Judgement
On June 2, 2009, the U.S. District Court for the Southern District
of Texas entered a memorandum opinion and order granting in part,
and denying in part, Americas Mining Corporation's request for
stay of execution of judgment pending appeal. The judgment refers
to a determination of the District Court that the Parent's
transfer of certain ASARCO LLC interests in Southern Copper
Company was a fraudulent conveyance, and the District Court's
ruling for the return of the SCC shares, plus any related
dividends, back to ASARCO by the Parent.
The June 2 Order requires AMC to, inter alia, deposit into an
escrow account 260,093,694 shares of SCC stock, along with an
additional amount of SCC shares equal to two times the monetary
portion of the Judgment or $2,764,614,433, and to "immediately
take all necessary steps to achieve the registration of the SCC
Shares." The June 2 Order contemplates that the parties would
complete the requirements therein, including the escrow agreement
and share registration, by early July 2009.
AMC Seeks Modification of Bonding Requirement
Americas Mining Corporation asks the District Court to modify the
bonding requirement set forth in the District Court's June 2,
2009 memorandum opinion and order in light of the Bankruptcy
Court's recommendation to confirm the plan of reorganization
proposed by AMC and Asarco Incorporated. AMC asks the District
Court to extend the deadline for AMC to replace the security for
the monetary portion of the District Court's SCC Final Judgment
with a supersedeas bond from November 5, 2009, until 35 days
after the District Court enters an order on confirmation.
In light of the impending deadline, AMC urges the District Court
to consider and rule on the request for reconsideration on an
expedited basis, and preferably no later than November 2, 2009.
Mr. Antweil assures the District Court that counsel for ASARCO
LLC has confirmed that there is no opposition to the request.
As previously reported, the District Court entered the SCC
Judgment on April 15, 2009, awarding ASARCO LLC the return of
260,093,694 shares of SCC common stock and $1,382,307,216 in
money damages and pre-judgment interest. AMC filed its request
for stay of execution of judgment pending appeal, which the
District Court granted in relevant part in the June 2 Stay Order.
The Stay Order did not require AMC to post a supersedeas bond,
and instead allowed AMC to post a significant number of SCC
shares to secure both the monetary and non-monetary portions of
the SCC Final Judgment. The June 2 Stay Order currently requires
AMC to replace the SCC shares securing the monetary portion of
the SCC Judgment on November 5, 2009, with an approximately $1.4
billion supersedeas bond, but expressly envisions an extension of
that date if a plan is unable to be confirmed by November 5 or
"for other good cause."
Due to the adequacy of the current security arrangements,
unanticipated delays in the Debtors' bankruptcy cases, and the
possibility of confirmation of the Parent's Plan, the
substitution of a supersedeas bond at this time is unnecessary
and would be a waste of resources, Mr. Antweil emphasizes, on
behalf of AMC. He asserts that the SCC shares securing the
monetary portion of the SCC Final Judgment will remain in escrow.
Good cause, thus, exists to modify the June 2 Stay Order and
extend the November 5 deadline until 35 days after the District
Court enters a confirmation order, AMC contends.
FCR & Asbestos Committee Support Request
The Official Committee of Asbestos Claimants and Future Claims
Representative Robert C. Pate filed a joint statement in support
of AMC's request to modify bonding requirement.
Sander L. Esserman, Esq., at Stutzman, Bromberg, Esserman &
Plifka, in Dallas, Texas, relates that combined, the Asbestos
Committee and the FCR represent one of the largest creditor
groups in the ASARCO's bankruptcy case, and all parties,
including ASARCO and the Parent, have agreed to an aggregate
allowed asbestos claim in the amount of $1 billion. He asserts
that the Asbestos Committee and the FCR have an obligation to the
asbestos constituents and future demand holders to ensure that
the SCC Final Judgment, which constitutes a valuable asset of the
ASARCO estate, is adequately secured and protected.
Mr. Esserman tells Judge Hanen that the Asbestos Committee and
the FCR have reviewed the request and after careful
consideration, they support it. Accordingly, the Asbestos
Committee and the FCR also ask the District Court to grant the
request.
The Asbestos Committee and the FCR, however, note that they
remain neutral and express no preference between confirmation of
either of the Debtors' Plan or the Parent's Plan.
* * *
The District Court grants AMC's request to modify bonding
requirement, and rules that the deadline established until the
June 2 Stay Order is extended until further Court order.
In the event the District Court enters an order confirming a plan
of reorganization for the Debtors, Judge Hanen notes that he will
issue a new deadline for replacing the monetary portion of the
SCC Final Judgment with a supersedeas bond, but the new deadline
will be no earlier than 60 days after the date the District Court
enters the confirmation order.
About Asarco LLC
Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/--
is an integrated copper mining, smelting and refining company.
Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent.
ASARCO LLC filed for Chapter 11 protection on August 9, 2005
(Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack
L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts
L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq.,
and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth,
P.C., represent the Debtor in its restructuring efforts. Paul M.
Singer, Esq., James C. McCarroll, Esq., and Derek J. Baker, Esq.,
at Reed Smith LLP give legal advice to the Official Committee of
Unsecured Creditors and David J. Beckman at FTI Consulting, Inc.,
gives financial advisory services to the Committee.
When ASARCO LLC filed for protection from its creditors, it listed
US$600 million in total assets and US$1 billion in total debts.
ASARCO LLC has five affiliates that filed for Chapter 11
protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos.
05-20521 through 05-20525). They are Lac d'Amiante Du Quebec
Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company,
Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Sander L.
Esserman, Esq., at Stutzman, Bromberg, Esserman & Plifka, APC, in
Dallas, Texas, represents the Official Committee of Unsecured
Creditors for the Asbestos Debtors. Former judge Robert C. Pate
has been appointed as the future claims representative. Details
about their asbestos-driven Chapter 11 filings have appeared in
the Troubled Company Reporter since April 18, 2005.
Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle,
Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05-
21346) also filed for Chapter 11 protection, and ASARCO has asked
that the three subsidiary cases be jointly administered with its
Chapter 11 case. On October 24, 2005, Encycle/Texas' case was
converted to a Chapter 7 liquidation proceeding. The Court
appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7
Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at
Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee.
ASARCO's affiliates, AR Sacaton LLC, Southern Peru Holdings LLC,
and ASARCO Exploration Company Inc., filed for Chapter 11
protection on December 12, 2006. (Bankr. S.D. Tex. Case No.
06-20774 to 06-20776).
Six of ASARCO's affiliates, Wyoming Mining & Milling Co., Alta
Mining & Development Co., Tulipan Co., Inc., Blackhawk Mining &
Development Co., Ltd., Peru Mining Exploration & Development Co.,
and Green Hill Cleveland Mining Co. filed for Chapter 11
protection on April 21, 2008. (Bank. S.D. Tex. Case No. 08-20197
to 08-20202).
Bankruptcy Creditors' Service, Inc., publishes ASARCO Bankruptcy
News. The newsletter tracks the Chapter 11 proceeding undertaken
by ASARCO LLC and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
ASARCO LLC: Asbestos Panel Gets Nod to Hire Jennings Strouss
------------------------------------------------------------
The Official Committee of Asbestos Claimants of ASARCO LLC
obtained permission from the Bankruptcy Court to retain Jennings,
Strouss & Salmon, P.L.C., as its special counsel, nunc pro tunc to
October 5, 2009.
Robert Phillips, co-chairman of the Asbestos Committee, tells the
Court that Jennings Strouss will assist the Asbestos Committee in
due diligence, regulatory compliance related matters, and in
perfecting security interests under, and as related to, Arizona
law in connection with assets and interests that will be
transferred and granted to the ASARCO Asbestos Personal Injury
Settlement Trust upon the effective date of a plan of
reorganization for the Debtors.
Jennings Strouss will be paid for its services on its normal
hourly rates:
Professional Position Rate
------------ -------- ----
Bruce May Equity Member $450
David Elston Member $325
Kerry Hodges Associate $250
Sue Sassatelli Paralegal $175
Jennings Strouss will also be reimbursed of necessary expenses
incurred in connection with its retention.
To the extent any fees and expenses are not reimbursed by the
Debtors' bankruptcy estates, Jennings Strouss reserves all of its
rights to seek reimbursement from the Asbestos Committee members.
Bruce B. May, Esq., an equity member of Jennings Strouss, informs
the Court that the firm has no connection with the Debtors, other
creditors, or any other party-in-interest. He adds that Jennings
Strouss has been involved in certain unrelated bankruptcy cases,
in which one or more of the law firms involved in the Debtors'
bankruptcy cases may have been involved. He assures Judge
Schmidt, however, that neither he nor the firm has any adverse
interests to the Debtors or their creditors and bankruptcy
estates.
About Asarco LLC
Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/--
is an integrated copper mining, smelting and refining company.
Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent.
ASARCO LLC filed for Chapter 11 protection on August 9, 2005
(Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack
L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts
L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq.,
and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth,
P.C., represent the Debtor in its restructuring efforts. Paul M.
Singer, Esq., James C. McCarroll, Esq., and Derek J. Baker, Esq.,
at Reed Smith LLP give legal advice to the Official Committee of
Unsecured Creditors and David J. Beckman at FTI Consulting, Inc.,
gives financial advisory services to the Committee.
When ASARCO LLC filed for protection from its creditors, it listed
US$600 million in total assets and US$1 billion in total debts.
ASARCO LLC has five affiliates that filed for Chapter 11
protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos.
05-20521 through 05-20525). They are Lac d'Amiante Du Quebec
Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company,
Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Sander L.
Esserman, Esq., at Stutzman, Bromberg, Esserman & Plifka, APC, in
Dallas, Texas, represents the Official Committee of Unsecured
Creditors for the Asbestos Debtors. Former judge Robert C. Pate
has been appointed as the future claims representative. Details
about their asbestos-driven Chapter 11 filings have appeared in
the Troubled Company Reporter since April 18, 2005.
Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle,
Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05-
21346) also filed for Chapter 11 protection, and ASARCO has asked
that the three subsidiary cases be jointly administered with its
Chapter 11 case. On October 24, 2005, Encycle/Texas' case was
converted to a Chapter 7 liquidation proceeding. The Court
appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7
Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at
Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee.
ASARCO's affiliates, AR Sacaton LLC, Southern Peru Holdings LLC,
and ASARCO Exploration Company Inc., filed for Chapter 11
protection on December 12, 2006. (Bankr. S.D. Tex. Case No.
06-20774 to 06-20776).
Six of ASARCO's affiliates, Wyoming Mining & Milling Co., Alta
Mining & Development Co., Tulipan Co., Inc., Blackhawk Mining &
Development Co., Ltd., Peru Mining Exploration & Development Co.,
and Green Hill Cleveland Mining Co. filed for Chapter 11
protection on April 21, 2008. (Bank. S.D. Tex. Case No. 08-20197
to 08-20202).
Bankruptcy Creditors' Service, Inc., publishes ASARCO Bankruptcy
News. The newsletter tracks the Chapter 11 proceeding undertaken
by ASARCO LLC and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
ASARCO LLC: Prospect of Emerging as Grupo Unit Bites Profits
------------------------------------------------------------
The prospect of ASARCO LLC and its debtor affiliates emerging
with Grupo Mexico SAB de C.V. has taken a large chunk out of
ASARCO's expected profits, the Arizona Daily Star reports citing
the Company's September 2009 monthly operating report recently
filed with the U.S. Bankruptcy Court for the Southern District of
Texas.
To recall, Bankruptcy Court Judge Richard S. Schmidt twice issued
a report and recommendation for the U.S. District Court for the
Southern District of Texas to confirm the Plan of Reorganization
proposed by Grupo Mexico's subsidiaries, Asarco Incorporated and
Americas Mining Corporation. District Court Judge Andrew S.
Hanen, however, gave ASARCO LLC and its Plan Sponsor, Sterlite
(USA), Inc., a chance to defend their Plan. The Debtor Company
and its Parent are currently battling for the control of ASARCO
LLC before the District Court. The Competing Plans before the
District Court for the ASARCO LLC estate provide for payment in
full of all creditors.
ASARCO LLC notes that it has restated its financial results since
the Petition Date to reflect settlements and postpetition
interest, based on the Competing Plans, to pay in cash and in
full, all claims including postpetition interest, pre-payment
penalties, administrative and attorney's fees.
As of September 30, 2009, the settlement and postpetition
interest is pegged at $172,463,000.
Due to the reinstatement, the net income of ASARCO LLC and its
affiliates to date since the Petition Date decreased to
$623,393,000 from $1,110,715,000 as posted in August 2009.
The Arizona Daily Star further notes that according to Doug
McAllister, the September results accounted for ASARCO's likely
emergence from bankruptcy under Grupo Mexico, whose Plan provides
for payments of debts in full plus interest to certain creditors,
including bondholders. Mr. McAllister is ASARCO's general
counsel, vice president and secretary.
ASARCO posted revenues of $96,358,000 for the month of September,
with a gross profit of $37,739,000. In August, ASARCO posted
$99,522,000 in revenues and $42,578,000 in gross profit.
ASARCO LLC, et al.
Balance Sheet
As of September 30, 2009
ASSETS
Current Assets:
Cash $1,283,734,000
Restricted Cash 27,865,000
Accounts receivable, net 136,800,000
Inventory 304,634,000
Prepaid expenses 6,130,000
Other current assets 14,136,000
---------------
Total Current Assets 1,773,299,000
Net property, plant and equipment 525,655,000
Other Assets:
Investments in subs & other investments 103,833,000
Advances to affiliates 408,000
Prepaid pension & retirement plan -
Other 37,041,000
---------------
Total assets $2,440,235,000
===============
LIABILITIES
Postpetition liabilities:
Accounts payable - trade $68,350,000
Accrued settlements & postp. interest 172,463,000
Accrued liabilities 2,437,213,000
---------------
Total postpetition liabilities 2,678,025,000
Prepetition liabilities:
Not subject to compromise - credit 3,005,000
Not subject to compromise - other 123,380,000
Advances from affiliates 36,559,000
Long-term bonds 447,751,000
Subject to compromise 1,724,472,000
---------------
Total prepetition liabilities 2,335,166,000
---------------
Total liabilities 5,013,192,000
MEMBER'S EQUITY (DEFICIT):
Common stock 508,324,000
Additional paid-in capital 104,578,000
Other comprehensive loss (383,094,000)
Retained earnings: filing date (3,426,157,000)
---------------
Total prepetition member's equity (3,196,350,000)
Retained earnings: post-filing date 623,392,000
---------------
Total member's equity (net worth) (2,572,958,000)
Total liabilities and member's equity $2,440,235,000
===============
ASARCO LLC, et al.
Consolidated Statement of Operations
Month Ended September 30, 2009
Sales $96,358,000
Cost of products and services 58,619,000
---------------
Gross profit (loss) 37,739,000
Operating expenses:
Selling and general & admin. expenses 2,473,000
Depreciation & amortization 3,644,000
Accretion expense 98,000
---------------
Operating income (loss) 31,524,000
Interest expense 12,921,000
Interest income (425,000)
Reorganization expenses 6,847,000
Other miscellaneous (income) expense (5,359,000)
---------------
Income (loss) before taxes 17,541,000
Income taxes 6,885,000
---------------
Net income (loss) $10,655,000
===============
ASARCO LLC, et al.
Consolidated Cash Receipts & Disbursements
Month Ended September 30, 2009
Receipts $116,244,000
Disbursements:
Inventory material 18,336,000
Operating disbursements 73,365,000
Capital expenditures 3,613,000
---------------
Total operating disbursements 95,314,000
Operating cash flow 20,930,000
Reorganization disbursements 9,530,000
---------------
Net cash flow 11,400,000
Net (borrowings) payments to secured Lenders -
---------------
Net change in cash 11,400,000
Beginning cash balance 1,300,199,000
---------------
Ending cash balances $1,311,599,000
===============
About Asarco LLC
Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/--
is an integrated copper mining, smelting and refining company.
Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent.
ASARCO LLC filed for Chapter 11 protection on August 9, 2005
(Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack
L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts
L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq.,
and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth,
P.C., represent the Debtor in its restructuring efforts. Paul M.
Singer, Esq., James C. McCarroll, Esq., and Derek J. Baker, Esq.,
at Reed Smith LLP give legal advice to the Official Committee of
Unsecured Creditors and David J. Beckman at FTI Consulting, Inc.,
gives financial advisory services to the Committee.
When ASARCO LLC filed for protection from its creditors, it listed
US$600 million in total assets and US$1 billion in total debts.
ASARCO LLC has five affiliates that filed for Chapter 11
protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos.
05-20521 through 05-20525). They are Lac d'Amiante Du Quebec
Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company,
Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Sander L.
Esserman, Esq., at Stutzman, Bromberg, Esserman & Plifka, APC, in
Dallas, Texas, represents the Official Committee of Unsecured
Creditors for the Asbestos Debtors. Former judge Robert C. Pate
has been appointed as the future claims representative. Details
about their asbestos-driven Chapter 11 filings have appeared in
the Troubled Company Reporter since April 18, 2005.
Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle,
Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05-
21346) also filed for Chapter 11 protection, and ASARCO has asked
that the three subsidiary cases be jointly administered with its
Chapter 11 case. On October 24, 2005, Encycle/Texas' case was
converted to a Chapter 7 liquidation proceeding. The Court
appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7
Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at
Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee.
ASARCO's affiliates, AR Sacaton LLC, Southern Peru Holdings LLC,
and ASARCO Exploration Company Inc., filed for Chapter 11
protection on December 12, 2006. (Bankr. S.D. Tex. Case No.
06-20774 to 06-20776).
Six of ASARCO's affiliates, Wyoming Mining & Milling Co., Alta
Mining & Development Co., Tulipan Co., Inc., Blackhawk Mining &
Development Co., Ltd., Peru Mining Exploration & Development Co.,
and Green Hill Cleveland Mining Co. filed for Chapter 11
protection on April 21, 2008. (Bank. S.D. Tex. Case No. 08-20197
to 08-20202).
Bankruptcy Creditors' Service, Inc., publishes ASARCO Bankruptcy
News. The newsletter tracks the Chapter 11 proceeding undertaken
by ASARCO LLC and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
ASHLAND INC: S&P Puts 'BB-' Rating on CrewditWatch Positive
-----------------------------------------------------------
Standard & Poor's Ratings Services said that it placed all of its
ratings on Covington, Kentucky-based Ashland Inc., including its
'BB-' corporate credit rating, on CreditWatch with positive
implications.
"Despite difficult economic conditions, Ashland's EBITDA and funds
from operations have been slightly higher than S&P expected at the
time of the Hercules Inc. acquisition," noted Standard & Poor's
credit analyst Cynthia Werneth. "Significant cost reductions and
synergies from the Hercules acquisition have helped results." In
addition, a substantial working-capital reduction, together with
unanticipated divesture proceeds and lower capital spending and
dividends, have permitted the company to reduce its debt far
faster than S&P had expected. As a result, S&P believes it is
likely that the company will be able to maintain stronger credit
measures.
S&P expects to resolve the CreditWatch status of the ratings
within about the next month upon further assessment of Ashland's
earnings and cash-flow prospects, business strategy, and financial
policies. Given that the company has reached management's
targeted debt level, S&P's review will focus on analyzing the
extent to which cost improvements will likely be sustainable,
assessing economic recovery prospects and competitive factors in
each of Ashland's businesses, and estimating how the company will
perform under more normal operating conditions. S&P will also
assess potential uses of cash and the likelihood of meaningful
portfolio changes.
S&P could raise the ratings by one notch in the near term if S&P
believes operating trends and financial policies will support and
sustain Ashland's improved financial profile, and FFO to adjusted
total debt will remain in the 20%-25% range.
AVANTAIR INC: June 30 Balance Sheet Upside-Down by $36 Million
--------------------------------------------------------------
Avantair, Inc.'s consolidated balance sheets at June 30, 2009,
showed $164.0 million in total assets, $185.5 million in total
liabilities, and $14.5 million in Series A convertible preferred
stock, resulting in a $36.0 million stockholders' deficit.
The Company's consolidated balance sheet at June 30, 2009, also
showed strained liquidity with $48.1 million in total current
assets available to pay $97.3 million in total current
liabilities.
The Company reported a net loss of $4.5 million for the year ended
June 30, 2009, compared with a net loss of $18.9 million for the
year ended June 30, 2008.
Revenues for the fiscal year ended June 30, 2009, were
$136.8 million, an increase of 18.3% from $115.6 million for the
fiscal year ended June 30, 2008. This increase was the result of
a 19.4% increase in the revenue generated from the sale of
fractional aircraft shares, an increase of 21.4% in maintenance
and management fees, an increase of 29.7% in charter card and Axis
Club Membership revenue, and a decrease of 27.6% in other
revenues.
Income from operations was $38,215 for the fiscal year ended
June 30, 2009, compared to a loss from operations of $16.6 million
for the fiscal year ended June 30, 2008.
Net loss decreased to $4.5 million for the fiscal year ended
June 30, 2009, compared to $18.9 million for the fiscal year ended
June 30, 2008, due to the decrease in loss from operations
partially offset by the increase in total other expenses.
Liquidity and Capital Resources
Avantair has incurred losses since inception. The Company has an
accumulated deficit of approximately $81.4 million and a working
capital deficiency of $49.2 million as of June 30, 2009, and an
accumulated deficit of $77.0 million and a working capital
deficiency of $30.2 million as of June 30, 2008.
Cash generated from operations has not been sufficient to provide
for all the working capital needed to meet Avantair's present
requirements. As of June 30, 2009, cash and cash equivalents
amounted to approximately $3.8 million, compared with
$19.1 million at June 30, 2008. The decrease in cash and cash
equivalents occurred primarily as a result of $2.4 million in
payments for deposits on future aircraft deliveries, $1.4 million
expended to acquire four fractional shares on a floor planned
aircraft upon expiration of the floor plan on June 30, 2009, and
$29.2 million repayment of debt, in addition to expenditures for
the cost of operations, including amounts accrued at June 30,
2008, insurance and capital and leasehold improvements.
In response to the general economic downturn and the resulting
growth of charter card sales over fractional share sales industry-
wide, in January 2009, Avantair initiated the Axis Club Membership
program. The Axis Club Membership program offers customers access
to blocks of flight time at a discount from standard charter card
rates for a set, three year membership fee.
Avantair's Axis Club Membership program may require the Company to
acquire aircraft to satisfy the increased flight hour demands on
its core aircraft fleet if its core utility is strained. However,
there can be no assurance that membership program sales will be
sufficient to compensate for a decrease in fractional share sales,
or that financing of additional aircraft acquired to service this
program will be available.
Net cash used in operating activities was $5.8 million for the
year ended June 30, 2009, compared to cash used in operating
acitivities of $15.5 million for the same period last year.
Net cash provided by investing activities was $951,567 for
the year ended June 30, 2009, compared to cash used in investing
activities of $2.7 million for the same period last year.
Net cash used in financing activities was $10.5 million for the
year ended June 30, 2009, compared to cash provided by financing
acitivities of $24.8 million for the same period last year.
Based in Clearwater, Florida, Avantair Inc. (OTC BB: AAIR) --
http://www.avantair.com/-- is engaged in the sale of fractional
ownership interests and charter card usage of professionally
piloted aircraft for personal and business use and the management
of its aircraft fleet. As of June 30, 2009, Avantair operated 52
aircraft within its fleet, which is comprised of 46 aircraft for
fractional ownership, five company-owned core aircraft and 1
leased and company-managed aircraft.
AVIS BUDGET: Completes Asset-Backed Conduit Financing Renewal
-------------------------------------------------------------
Avis Budget Group, Inc., has completed the annual renewal of the
asset-backed bank conduit facilities which provide a portion of
the financing for its car rental fleet in the United States. At
the Company's request, the two existing facilities, which had
provided for $1.35 billion and $1.1 billion of financing,
respectively, were combined into a single $1.95 billion facility.
The conduit financing has been extended through October 28, 2010,
and now bears interest of LIBOR plus 2.25%, representing a
reduction of 100 basis points versus the prior rate.
"We are pleased to have renewed this conduit financing ahead of
schedule, at a reduced borrowing spread, and with all lenders
affirmatively continuing to participate," said David B. Wyshner,
Avis Budget Group Executive Vice President and Chief Financial
Officer. "With this renewal and our other recent financing
activities, we have not only refinanced all of our near-term
domestic debt maturities but have sufficient capacity to fund our
domestic fleet requirements for the next year."
A full-text copy of the Amended and Restated Series 2008-1
Supplement, dated as of October 29, 2009, is available at no
charge at http://ResearchArchives.com/t/s?47f6
About Avis Budget Group
Avis Budget Group (NYSE: CAR) -- http://www.avisbudgetgroup.com/
-- provides vehicle rental services, with operations in more than
70 countries. Through its Avis and Budget brands, the Company is
a general-use vehicle rental company in each of North America,
Australia, New Zealand and certain other regions based on
published airport statistics. Avis Budget Group is headquartered
in Parsippany, N.J. and has roughly 24,000 employees.
* * *
As reported by the Troubled Company Reporter on April 30, 2009,
Standard & Poor's Ratings Services assigned a '6' recovery rating
to Avis Budget Car Rental LLC's (CCC+/Developing/--) unsecured
notes, indicating expectations of negligible (0%-10%) recovery of
principal in the event of a payment default. Avis Budget Car
Rental LLC is a subsidiary of Avis Budget Group Inc.
(CCC+/Developing/--).
BALLY TECHNOLOGIES: S&P Raises Corporate Credit Rating to 'BB+'
---------------------------------------------------------------
Standard & Poor's Ratings Services raised its corporate and issue-
level ratings on Las Vegas-based Bally Technologies Inc. by one
notch. S&P raised the corporate credit rating to 'BB+' from 'BB'.
The rating outlook is stable.
"The ratings upgrade reflects the company's improvement in cash
flow generation and its ability to sustain recent improvements in
operating performance despite a very challenging operating
environment, particularly with respect to the replacement cycle
for gaming machines," said Standard & Poor's credit analyst
Melissa Long.
Bally's financial profile also improved as the company used cash
flow to repay borrowings on its revolver and capital lease
obligations and financed its share repurchases with excess cash
flow. S&P expects that this improvement will be sustainable. S&P
estimates that Bally's leverage at Sept. 30, 2009, was
approximately 0.7x -- an improvement of about 0.5x from June 30,
2008 (the end of its fiscal 2008). Notwithstanding a significant
decline in gaming equipment sales revenue over the last several
quarters, S&P believes Bally will continue to generate a
relatively flat level of EBITDA. S&P also expects that the
replacement cycle has reached its trough in 2009 and that the
company will benefit from a more favorable replacement cycle in
calendar 2010. Furthermore, the company resolved all issues
relating to its internal control deficiency, a factor that S&P
previously indicated as necessary prior to considering an upgrade.
The 'BB+' rating on Bally reflects the company's exposure to
product sales volatility, the importance of sustained research and
development spending to maintain the quality of its products, the
risk of product obsolescence, the existence of a much larger and
well-established competitor (International Game Technology), and
the continued economic weakness affecting the U.S. gaming
industry. The company's No. 2 position in the North American
gaming equipment market, its expanding base of gaming devices and
systems, strong credit measures for the rating (which S&P expects
provide ample cushion within the rating under S&P's downside
scenario), and S&P's expectation for modest improvement in the
replacement cycle in 2010 temper these factors.
Bally designs, manufactures, distributes, operates, and sells
gaming products and related equipment under its Bally Gaming
Equipment and Systems segment. It also owns and operates a
dockside casino in Vicksburg, Miss. Bally's Gaming Equipment and
Systems segment, which consists of gaming equipment sales, system
sales, and gaming operations segments, contributes more than 90%
to the company's revenues and consolidated EBITDA base.
BEARINGPOINT INC: Perot Systems Closes Purchase of Shanghai Unit
----------------------------------------------------------------
Perot Systems Corporation has closed its acquisition of
BearingPoint Management Consulting (Shanghai) Ltd. ("BearingPoint
China Consulting"), a leading management and technology consulting
company in China.
The action follows recent approvals of the transaction by Shanghai
Municipal Commission of Commerce and the U.S. Bankruptcy Court.
The combination expands the reach and capabilities of Perot
Systems in China.
"The BearingPoint China Consulting team brings deep industry and
consulting expertise in China's energy, automotive, insurance, and
financial services industries. This addition significantly
enhances our existing consultancy operations and will support our
growing capabilities worldwide," said Peter Altabef, president and
chief executive officer of Perot Systems.
"As a part of Perot Systems, we will benefit from its deep
industry expertise, mature global delivery model and strong
financial position. This enables us to continue to provide world-
class services to our clients with broader capabilities and
resources," said Ron Machan, chairman and chief executive officer
of BearingPoint China Consulting.
Steve Curts, president of Perot Systems Commercial Solutions,
said, "The combined company will continue to work across a broad
range of vendors and alliance partners to deliver efficient and
effective solutions that address individual client needs."
About Perot Systems
Perot Systems is a worldwide provider of information technology
services and business solutions. Through its flexible and
collaborative approach, Perot Systems integrates expertise from
across the company to deliver custom solutions that enable clients
to accelerate growth, streamline operations and create new levels
of customer value. Headquartered in Plano, Texas, Perot Systems
reported 2008 revenue of $2.8 billion. The company has more than
23,000 associates located in the Americas, Europe, Middle East and
Asia Pacific.
About BearingPoint
BearingPoint, Inc. -- http://www.BearingPoint.com/-- was one of
the world's largest providers of management and technology
consulting services to Global 2000 companies and government
organizations in more than 60 countries worldwide. Based in
McLean, Va., BearingPoint -- a former consulting arm of KPMG LLP -
- has approximately 15,000 employees focusing on the Public
Services, Commercial Services and Financial Services industries.
The Company's service offerings are designed to help clients
generate revenue, increase cost-effectiveness, manage regulatory
compliance, integrate information and transition to "next-
generation" technology.
BearingPoint, Inc., fka KPMG Consulting, Inc., together with its
units, filed for Chapter 11 protection on February 18, 2009
(Bankr. S.D.N.Y., Case No. 09-10691). The Debtors' legal advisor
is Weil, Gotshal & Manges, LLP, their restructuring advisor is
AlixPartners LLP, and their financial advisor and investment
banker is Greenhill & Co., LLC. Jeffrey S. Sabin, Esq., at Bingham
McCutchen LLP represents the Creditors' Committee. Garden City
Group serves as claims and notice agent.
BearingPoint disclosed total assets of $1,762,689,000, and debts
of $2,231,839,000 as of September 30, 2008.
BENJAMIN CATLIN: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------------
Joint Debtors: Benjamin S. Catlin, IV
Gail Catlin
1753 Haggin Grove Way
Carmichael, CA 95608
Bankruptcy Case No.: 09-43616
Chapter 11 Petition Date: October 30, 2009
Court: United States Bankruptcy Court
Eastern District of California (Sacramento)
Judge: Christopher M. Klein
Debtors' Counsel: Steven H. Felderstein, Esq.
400 Capitol Mall #1450
Sacramento, CA 95814-4434
Tel: (916) 329-7400
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $50,000,001 to $100,000,000
A full-text copy of the Debtors' petition, including a list of
their 20 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/caeb09-43616.pdf
The petition was signed by the Joint Debtors.
BGM PASADENA: Section 341(a) Meeting Scheduled for Dec. 7
---------------------------------------------------------
The U.S. Trustee for Region 16 will convene a meeting of BGM
Pasadena LLC's creditors on December 7, 2009, at 1:00 p.m., at the
725 S Figueroa Street, Room 2610, Los Angeles, CA 90017.
This is the first meeting of creditors required under Section
341(a) of the U.S. Bankruptcy Code in all bankruptcy cases.
All creditors are invited, but not required, to attend. This
Meeting of Creditors offers the one opportunity in a bankruptcy
proceeding for creditors to question a responsible office of the
Debtor under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.
Pasadena, California-based GM Pasadena LLC filed for Chapter 11
bankruptcy protection on October 22, 2009 (Bankr. C.D. Calif. Case
No. 09-39135). John Schock, Esq., who has an office in Pasadena,
California, assists the Company in its restructuring efforts. The
Company listed $10,000,001 to $50,000,000 in assets and $1,000,001
to $10,000,000 in liabilities.
BRIDGEVIEW AEROSOL: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------------
Debtor: Bridgeview Aerosol, LLC
c/o Steven B. Towbin, Shaw Gussis, et al
321 N. Clark St, Suite 800
Chicago, IL 60654
Case No.: 09-41021
Chapter 11 Petition Date: October 30, 2009
Court: United States Bankruptcy Court
Northern District of Illinois (Chicago)
Judge: Pamela S. Hollis
Debtor's Counsel: Steven B. Towbin, Esq.
Shaw Gussis et al
321 N Clark St, Suite 800
Chicago, IL 60610
Tel: (312) 276-1333
Fax: (312) 275-0569
Email: stowbin@shawgussis.com
Estimated Assets: $10,000,001 to $50,000,000
Estimated Debts: $10,000,001 to $50,000,000
The petition was signed by Dennis Nolan, the company's president.
Debtor's List of 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Ball Corporation $2,303,072
Attn: Casey Dodson
1717 Gifford Road
Elgin, IL 60120
Black Flag/The Homax $1,236,895
Group, Inc.
Attn: Brian Halverson,
Controller
200 Westerly Rd
Bellingham, WA 98226
Crown Cork & Seal Company $367,178
Attn: Brad Dahlgren
One Crown Way
Philadelphia, PA 19154
Diversified CPC International $311,570
Attn: Paul Caponigri
24338 W Durkee Rd, Santa Fe
Ind Dis
Channahon, IL 60410-0490
EMCO Chemical Distributors $261,528
Attn: Marty Locke
2100 Commonwealth Ave,
PO Box 1030
N. Chicago, IL 60064
Reed Smith Sachnoff & Weaver $207,510
Attn: James T. Hultquist
Interstate Chemical Company $193,447
Attn: Mike Quinn
Laser Tool, Inc. $188,476
Attn: Chris Minnis
Stone Container Corporation $170,727
Attn: Dave Zahller
Ashland Distribution Company $166,507
Attn: John Kwasneski
Hydrite Chemical Company $156,590
Attn: Tom Fredrich
Bond, Schoeneck, & King, PLLC $149,483
Attn: Richard Hole
CL&D Graphics $147,215
Attn: Ned Price
Packaging Design $122,318
Attn: Randy Haberman
Berry Plastics Corporation $117,058
Attn: Joe Franckowiak
Summit PKG. Systems Inc. $115,443
Attn: Denis Couture
Batavia Container, Inc. $155,173
Attn: Clay Shaw
Precision Valve Corporation $97,017
Attn: Dave Hansen
DS Containers $93,860
Attn: Emil Obradovich
Seaquist Dispensing $86,210
Attn: Craig Rand
BRIAN SCOTT HACKER: Case Summary & 11 Largest Unsecured Creditors
-----------------------------------------------------------------
Joint Debtors: Brian Scott Hacker
Angela Gonzales Hacker
1027 Somerset Downs
Hendersonville, TN 37075
Bankruptcy Case No.: 09-12549
Chapter 11 Petition Date: October 30, 2009
Court: United States Bankruptcy Court
Middle District of Tennessee (Nashville)
Judge: Keith M. Lundin
Debtors' Counsel: Steven L. Lefkovitz, Esq.
Law Offices Lefkovitz & Lefkovitz
618 Church St Suite 410
Nashville, TN 37219
Tel: (615) 256-8300
Fax: (615) 255-4516
Email: slefkovitz@lefkovitz.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
According to the schedules, the Company has assets of at least
$1,106,000, and total debts of $1,388,429.
A full-text copy of the Debtors' petition, including a list of
their 11 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/tnmb09-12549.pdf
The petition was signed by the Joint Debtors.
BURGER KING: Fitch Affirms Issuer Default Rating at 'BB'
--------------------------------------------------------
Fitch Ratings has affirmed Burger King Corporation's ratings:
-- Long-term Issuer Default Rating at 'BB';
-- Secured bank credit facility at 'BB+'.
The Rating Outlook has been revised to Stable from Positive. At
Sept. 30, 2009, Burger King had approximately $890 million of
debt, most of which is secured.
Burger King's ratings reflect its positive free cash flow
generation, competitive position in the quick service restaurant
sector and improving system-wide operating infrastructure. The
company is making noticeable progress with guest satisfaction and
is implementing longer competitive hours of operation. The on-
going rollout of its flexible batch broiler will foster the
continued launch of additional products in order to help drive
traffic. Burger King is also reinvesting in company-operated
restaurants by remodeling units. The company has generated annual
average FCF (defined as cash flow from operations less capital
expenditures and dividends) of approximately $50 million since its
reimaging program began in 2008.
The Outlook revision to Stable is due to the fact that operating
trends have been weaker than Fitch had anticipated. Burger King's
same-store sales growth decelerated and margins contracted more
than expected throughout fiscal 2009. SSS performance also lagged
national peers in the first quarter of fiscal 2010 ended Sept. 30,
2009. During this period, world-wide SSS declined 2.9%, compared
to a 3.6% increase during the first quarter ended Sept. 30, 2008.
Fitch believes Burger King will continue to benefit from its
barbell menu strategy of indulgent and value offerings; such as
its premium Steakhouse burgers and its $1 1/4 Pound Double
Cheeseburger. However, SSS comparisons could remain negative in
the near term, given higher rates of unemployment among the
company's core customer demographics.
Fitch anticipates that weak top line growth will result in modest
additional deterioration in leverage ratios over the near term.
Fitch does not expect a slight weakening in Burger King's credit
statistics to have further negative rating implications, given
that there is room in the current ratings.
For the latest 12 month period ended Sept. 30, 2009, Burger King's
adjusted leverage (defined as total debt plus eight times gross
rent expense divided by operating earnings before interest, taxes,
depreciation, amortization, and gross rent expense or EBITDAR) was
approximately 3.7 times (x), versus 3.6x for the fiscal year ended
June 30, 2009. During fiscal 2010, Burger King plans to repay
$62.5 million of scheduled debt amortization and expects flat
year-over-year U.S. commodity costs.
At Sept. 30, 2009, Burger King had $237.1 million of liquidity
which included $132.5 million of cash and $104.6 million available
on its $150 million secured revolver due June 30, 2011. The
company generated $8.3 million of FCF; down modestly from the
$11 million generated during last year's fiscal first quarter.
Fitch anticipates that Burger King can generate at least
$50 million of FCF in fiscal 2010. Fiscal 2010 and 2011 debt
obligations are limited to scheduled amortizations on the
remaining $134.4 million balance on its Term A bank loan due in
fiscal 2011. The remaining $666 million balance on its Term B
loan is due in fiscal 2012.
Burger King's bank facility subjects the company to various
financial covenants; including a maximum leverage ratio of 3.0x
and maximum yearly capital expenditures of $200 million or
$250 million if rent-adjusted leverage is less than 3.0x. Maximum
leverage is defined as debt, net of unrestricted cash in excess of
$50 million, to EBITDA. At Sept. 30, 2009, Burger King had
substantial room under this covenant. Maximum leverage as defined
by the bank agreement was 1.8x. Burger King expects to spend
$175 million - $200 million on capital expenditures in fiscal
2010, after spending $204 million in fiscal 2009.
CABRILLO COMMONS: Case Summary & 20 Largest Unsec. Creditors
------------------------------------------------------------
Debtor: Cabrillo Commons, Inc.
15700 Winchester Blvd
Los Gatos, CA 95030
Bankruptcy Case No.: 09-59251
Chapter 11 Petition Date: October 28, 2009
Court: United States Bankruptcy Court
Northern District of California (San Jose)
Judge: Arthur S. Weissbrodt
Debtor's Counsel: Paul E. Manasian, Esq.
Law Offices of Manasian and Rougeau
400 Montgomery St. #1000
San Francisco, CA 94104
Tel: (415) 291-8425
Email: manasian@mrlawsf.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $10,000,001 to $50,000,000
A full-text copy of the Debtor's petition, including a list of its
20 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/canb09-59251.pdf
The petition was signed by Anthony B. Bowman, president of the
Company.
CAL INVESTMENTS INC: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------------
Debtor: Cal Investments, Inc.
4601 West Walnut
Soquel, CA 95073
Case No.: 09-59405
Chapter 11 Petition Date: October 30, 2009
Court: United States Bankruptcy Court
Northern District of California (San Jose)
Debtor's Counsel: Scott J. Sagaria, Esq.
Patrick Calhoun, Esq.
Law Offices of Scott J. Sagaria
333 W San Carlos St. #1625
San Jose, CA 95110
Tel: (408) 279-2288
Email: sjsagaria@sagarialaw.com
Estimated Assets: $10,000,001 to $50,000,000
Estimated Debts: $10,000,001 to $50,000,000
According to the schedules, the Company has assets of at least
$13,957,842, and total debts of $22,913,609.
The petition was signed by Victoria Campbell, the company's
president.
Debtor's List of 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Carington Mortgage 2449 Frieda Court, $320,000
Services San Pablo, CA ($170,000
1610 East St. 94806 secured)
Andrew Place
Santa Ana, CA 92705
Chase Bank/WAMU 900 Pedro Ave., $240,000
Ben Lomand, CA ($950,000
95005 secured)
($1,700,000
senior lien)
Chase Bank/WAMU 127 Campbell St., $142,000
Santa Cruz, CA ($475,000
95060 secured)
($473,000
senior lien)
Chase Bank/WAMU 26 Rudder Court, $334,000
Discovery Bay, CA ($195,000
94505 secured)
Chase Bank/WAMU 145 15th St., $1,452,000
PO Box 78065 Pacific Grove, CA ($800,000
Phoenix, AZ 85062-8065 93950 secured)
Chase Bank/WAMU 1007 41 St., Unit $840,000
PO Box 78065 442, Emryville, CA ($225,000
Phoenix, AZ 85062-8065 94608 secured)
Chase Bank/WAMU 1007 41 St., Unit $554,000
PO Box 78065 532, Emeryville, CA ($175,000
Phoenix, AZ 85062-8065 secured)
Chase Bank/WAMU 457 Old Natividad, $675,000
PO Box 78065 Salinas, CA 93906 ($350,000
Phoenix, AZ 85062-8065 secured)
Chase Bank/WAMU 1007 41 St., Unit $490,000
PO Box 78065 324, Emeryville, CA ($175,000
Phoenix, AZ 85062-8965 94608 secured)
Chevy Chase Bank 423 Carpenteria $669,000
6151 Chevy Chase Dr. Road, Aromas, CA ($450,000
Laurel, MD 20707-2918 95004 secured)
Chevy Chase Bank 900 Pedro Ave., $1,700,000
6151 Chevy Chase Dr. Ben Lomand, CA ($950,000
Laurel, MD 20707-2918 95005 secured)
CitiMortgage 100 Waugh $193,000
Avenue, Santa ($500,000
Cruz, CA 95065 secured)
($517,000
senior lien)
National City Mortgage 202 San Benancio $246,420
Road, Salinas, CA ($850,000
93908 secured)
($1,131,081
senior lien)
PLM Lender Services, Inc. 10 Del Torino, Lake $363,000
Et Al Elsinore, CA 92532 ($220,000
46 North 2nd Street secured)
Campbell, CA 95008-2026
PLM Lender Services, Inc. 35661 Abelia $135,000
Et Al Street, Murrieta, ($340,000
46 North 2nd Street CA 95262 secured)
Campbell, CA 95008-2026 (446,000
senior lien)
Ty Ebright Defined Ben. Unsecured Loan- $136,381
Pension plan Advance
4601 West Walnut
Soquel, CA 95073
Wachovia 215 Ginger Way, $679,000
4101 Wiseman Blvd. Morgan Hill, CA ($550,000
San Antonio, TX 78265 95037 secured)
Wachovia 202 San Benancio $1,131,081
4101 Wiseman Blvd. Road, Salinas, CA ($850,000
San Antonio, TX 78265 93908 secured)
Wachovia 122 14th St., $1,243,125
4101 Wiseman Blvd. Pacific Grove, CA ($800,000
San Antonio, TX 78265 93950 secured)
Wells Fargo Bank-First 4601 Mt. Blvd., $411,000
MACX7802-02K Oakland, CA 94619 ($250,000
3476 Stateview Blvd. secured)
Westville, SC 29175
CANARGO ENERGY: Has $1.2-Mil. of DIP Financing from Persistency
---------------------------------------------------------------
CanArgo Energy Corporation filed a voluntary petition seeking
relief under the provisions of Chapter 11 of the Bankruptcy Code
with the United States Bankruptcy Court for the for the Southern
District of New York.
The company said that it entered into a Plan Support and Lock-up
Agreement dated as of Aug. 6, 2009, by and among the company and
the holders of the Company's Senior Subordinated Convertible
Guaranteed Notes due Sept. 1, 2009, Persistency, a Cayman Islands
corporation as the holder of the company's 12% Subordinated
Convertible Guaranteed Notes due June 28, 2010, and the other
creditors party thereto pursuant to which the parties thereto
agree to support a plan of reorganization of the Company as a
debtor in possession pursuant to Chapter 11 of the United States
Bankruptcy Code
On Oct. 22, 2009, the company and Persistency entered into a
Commitment Letter Agreement pursuant to which Persistency agreed,
subject to the terms and conditions set forth in the Commitment
Letter Agreement, to lend the Company up to $1.2 million post-
petition pursuant to the terms of a Debtor in Possession Financing
Agreement fully secured by all of the assets of the Company and
guarantees of the Company's principal subsidiaries.
About CanArgo Energy
Based in Guernsey, British Isles, CanArgo Energy Corporation
(OSLO: CNR) (PINK SHEETS: CANR) -- http://www.canargo.com-- is an
independent oil and gas exploration and production company with
its oil and gas operations currently located in Georgia.
CanArgo Energy Corp. filed a Chapter 11 petition October 28 in New
York (Bankr. S.D.N.Y. Case No. 09-16453). The petition listed
assets of $2.6 million against debt totaling $19.8 million. In
addition to the $12.3 million in subordinated convertible notes,
CanArgo owes $5.3 million to senior secured lenders.
CANARGO ENERGY: Voluntary Chapter 11 Case Summary
-------------------------------------------------
Debtor: CanArgo Energy Corporation
c/o Satterlee Stephens Burke & Burke LLP
230 Park Ave., Suite 1130
New York, NY 10169
Bankruptcy Case No.: 09-16453
Chapter 11 Petition Date: October 28, 2009
Court: United States Bankruptcy Court
Southern District of New York (Manhattan)
Judge: Arthur J. Gonzalez
Debtor's Counsel: Timothy T. Brock, Esq.
Satterlee Stephens Burke & Burke LLP
230 Park Avenue
New York, NY 10169
Tel: (212) 818-9200
Fax: (212) 818-9606
Email: tbrock@ssbb.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $10,000,001 to $50,000,000
The Debtor did not file a list of its 20 largest unsecured
creditors when it filed its petition.
The petition was signed by Vincent McDonnell, chair, president and
chief executive officer of the Company.
CAPMARK FINANCIAL: Proposes Berkadia-Led Auction for Mortgage Biz
-----------------------------------------------------------------
Capmark Financial Group Inc. and its units seek the Court's entry
of an order:
(a) scheduling a hearing to consider approval of a proposed
sale by Capmark Financial Group Inc. and its wholly-owned
subsidiaries, Capmark Finance Inc., and Capmark Capital
Inc., as Sellers, of their commercial mortgage servicing
and mortgage banking business assets, to (i) Berkadia
Commercial Mortgage LLC, f/k/a Berkadia III, LLC under an
Asset Put Agreement dated September 2, 2009, or (ii)
another Successful Offeror;
(b) establishing the objection deadline in connection with the
proposed Sale;
(c) approving the form of, and notice procedures relating to,
the (i) Sale Hearing Notice, and (ii) Notice of Assumption
and Assignment;
(d) scheduling an auction to the extent the Sellers receive
additional higher or better offers for the MSB Business
postpetition; and
(e) approving the Sellers' prepetition and postpetition
marketing efforts and bidding process.
Prior to the Petition Date, relates Mark D. Collins, Esq., at
Richards, Layton & Finger, P.A., in Wilmington, Delaware,
the Sellers marketed the MSB Business and invited potential
bidders to submit bids pursuant to bidding procedures included in
a Bidding Process Letter.
If the Court requires Court-approved bidding procedures, Mr.
Collins says, the Debtors will withdraw their request for the
Sale Hearing Order, and, in the alternative, request approval of
a Bidding Procedures Order. The Bidding Procedures Order
contains the requested relief of the Sale Hearing Order, but
additionally contains the provision of Court-approved bidding
procedures, he explains.
At the conclusion of the Sale Hearing, Mr. Collins continues, the
Debtors seek entry of an order: (i) if no higher or better offers
have been received, approving the Sellers' exercise of the Put
Option pursuant to the APA, and without the necessity of
conducting an Auction free and clear of any and all liens,
encumbrances, claims, and interests pursuant to Section 363(f) of
the Bankruptcy Code, the APA, or a Modified APA; or (ii) if a
higher or better offer is received, and therefore, an Auction is
held, authorizing the Sale of the MSB Business to Berkadia, or a
Successful Offeror, free and clear of any and all Liens.
The proposed Sale Order contemplates the Sale of the MSB Business
to Berkadia pursuant to the APA. If a higher or better offer
than the APA is received, however, the Sellers will submit a
revised Sale Order reflecting the proposed sale to the Successful
Offeror.
MSB Business
The Sellers' MSB Business is comprised of the Sellers' loan
servicing and loan origination activities primarily related to
their role as a master and special servicer, and subservicer, of
pools of commercial real estate loans originated and securitized
by the Debtors or third parties. The MSB Business is a
profitable part of the Debtors' business operations. However,
declines in loan values, among other things, have resulted in
downgrades by the various rating agencies of CFGI and,
correspondingly, of the Sellers' servicer ratings. These
developments have raised general market concerns about the
Debtors' financial condition and general ability to operate the
MSB Business, and have increased the risk that counterparties may
seek to lift the automatic stay to terminate servicing agreements
with the Sellers without any consideration paid to them. For
this reason, the Debtors have determined it is necessary to sell
the MSB Business to Berkadia through an orderly and expeditious
Sale to preserve value in the MSB Business, to avoid impairment
of the business, and to provide comfort to the servicing
agreements counterparties that the servicers on which they rely
will continue to operate under the servicing agreements.
The Debtors have extensively marketed the MSB Business, says Mr.
Collins. The culmination of the Debtors' efforts to realize
value for their stakeholders is the proposed Sale. To realize
maximum value for the MSB Business, it is necessary that the
Sellers obtain approval of and consummate the Sale early in the
Chapter cases, Mr. Collins asserts. Without a quick sale, the
Sellers have a grave concern that value will deteriorate
materially as a result of a loss of cooperation and confidence of
the servicing agreements counterparties, including the government
sponsored enterprises, securitization trusts, and private label
counterparties. In addition, there are substantial price
adjustments for each day the Sale is not closed past October 1,
2009. Accordingly, the Sellers believe it is in the best
interest of their estates and creditors to authorize a sale to
Berkadia as soon as possible without the necessity of a further
competitive process.
The Debtors received nine preliminary indications of interest for
the MSB Business, with three of these expressing interest in
acquisition of the MSB Business in its entirety. Two of the
three parties withdrew from the process in the week prior to
August 18, 2009, and the Debtors received only one firm offer for
the MSB Business by the final bid deadline. That offer, by
Berkadia, was negotiated at length and ultimately memorialized in
the APA.
The APA
The Sellers entered into the APA with Berkadia on September 2,
2009. Berkadia is a newly formed entity owned by Berkshire
Hathaway Inc. and Leucadia National Corporation. Mr. Collins
notes that the Debtors have no prior affiliation with either
Berkshire Hathaway Inc. or Leucadia National Corporation.
The salient provisions of the APA are:
(a) The APA provides for a put option, by which the Sellers
have the right to sell the MSB Business to Berkadia. The
MSB Business comprises all assets primarily used in, or
primarily related to, the Sellers' mortgage servicing and
lending and mortgage banking business lines that are
owned, managed, and conducted by the Sellers in the United
States and India.
(b) The Sellers paid Berkadia $40 million in cash for the Put
Option, which can be exercised by the Sellers before or
after the Petition Date. If the Put Option is timely
exercised, the Sellers are committed to sell, and Berkadia
is committed to purchase, the MSB Business. If the Put
Option is not timely exercised, the APA terminates without
the obligations of the Sellers to sell and Berkadia to
purchase, and Berkadia retains the $40 million Put Option
Fee. If the Put Option is exercised and the transaction
does not close due to an inability to obtain certain
required third party consents, Berkadia is committed to
refund $20 million to the Sellers. The Put Option expires
if not exercised by the Sellers prior to 60 days from
execution of the APA or 60 days after Petition Date,
if the Sellers file Chapter 11 petitions prior to
the expiration of the first 60-day period. Accordingly,
the Put Option must be exercised by December 24, 2009, or
it will terminate without exercise.
(c) The aggregate purchase price for the business is in excess
of $1.093 billion. If the Sale of the MSB Business is
approved by the Court, the purchase price will be $490
million, subject to certain closing adjustments. There
are substantial price adjustments for each day the Sale is
not closed past September.
(d) The APA includes a three-year mutual covenant by each of
the Sellers and Berkadia to not solicit each other's
employees and a three-year covenant by the Sellers and
their affiliates -- with the exception of Capmark Bank --
not to compete with the MSB Business, subject to certain
exceptions. The exceptions include allowing the Sellers
to "special service" loans on a contract basis.
(e) Upon the closing of the Sale, Beekman Advisors, Inc.,
will receive a completion fee, which is to be calculated
as 0.5% of the purchase price and estimated to be
approximately $2.0 to $2.5 million, pursuant to the terms
of the retention of Beekman Advisors by the Sellers. Upon
the closing of the Sale, Lazard Freres & Co. LLC, will
receive a completion fee of approximately $3.5 million,
pursuant to the terms of the retention of Lazard Freres &
Co. LLC by the Sellers.
(f) The closing of the transaction contemplated by the APA is
subject to the satisfaction of certain closing conditions
intended to protect the interests of the Sellers and
Berkadia.
A full-text copy of the APA is available for free at:
http://bankrupt.com/misc/Capmark_APA.pdf
The APA will terminate by its terms if the Put Option is not
exercised by December 24, 2009, or the closing is not consummated
by December 31,2009, although closing may be extended (i) by
either party for up to 15 days to obtain Fannie Mae, Freddie Mac,
Ginnie Mae and HUD/FHA licenses or consents, or (ii) by Berkadia
for up to 30 days to obtain required state licenses to operate
the MSB Business.
Mr. Collins notes that since the execution of the APA on
September 2, 2009, another party has provided a preliminary, non-
binding, written indication of interest in the whole MSB Business
at an unspecified purchase price "in excess of the $490 million"
purchase price contemplated by the APA with Berkadia. In light
of this indication and other potential interest in the MSB
Business, a bidding process letter was circulated to the parties
expressing a continued interest in purchasing the MSB Business on
October 11, 2009, to establish another formal bid deadline and
process in the hope of obtaining an offer superior to the APA.
Pursuant to the Bidding Process Letter, interested parties have
been requested to submit a qualifying offer for the MSB Business
no later than today, October 30, 2009.
In the event, however, the Debtors' marketing efforts through the
Bidding Process Letter result in the Debtors receiving an offer
superior to the APA, the Debtors will hold an Auction, and in
this case, propose to conduct the Auction in accordance these
procedures:
* The Debtors will conduct an Auction with respect to the MSB
Business at the offices of Dewey & LeBoeuf LLP, at 1301
Avenue of the Americas, in New York, New York, on a date
time, yet to the set, or in other location as designated by
the Debtors in a notice to all qualified offerors.
* Qualified Offerors, including Berkadia, may then submit
successive bids in increments of at least $5,000,000 higher
than the previous bid;
* If an Auction is conducted, the Qualified Offeror with the
next highest or otherwise best Qualifying Offer, as
determined by the Debtors in the exercise of their business
judgment at the Auction will be required to serve as a back-
up bidder and keep the bid open and irrevocable until 24
hours after the closing of the sale transaction with the
Successful Bidder.
Following the Sale Hearing, if the Successful Bidder fails to
consummate an approved sale because of a breach or failure to
perform on its part, the Back-Up Bidder will be deemed to be the
new Successful Bidder, and the Debtors will be authorized, but
not required, to consummate the sale with the Back-Up Bidder
without further Court order.
In the event a superior offer to the APA is not received by the
deadline established by the Bidding Process Letter, the Debtors
and their Advisors believe the Sale to Berkadia pursuant to the
APA represents the best and only transaction available under the
circumstances, as the Sale simultaneously maximizes the value of
the MSB Business for the Debtors' estates and provides the
maximum recovery to all stakeholders. In addition, the Debtors
have met with Fannie Mae, Ginnie Mae, Freddie Mac, Standard &
Poor's and Fitch Ratings to discuss the Sale and have received
positive feedback, Mr. Collins relates.
Assumption and Assignment of Contracts and Leases
To facilitate the Sale and the assumption and assignment of the
contracts and leases provided for under the APA, the Debtors will
serve a notice of intent to assume and assign the Assumed
Contracts and Leases that are part of the Sale on all nondebtor
parties to the Assumed Contracts and Leases, Mr. Collins notes.
The Debtors' request is supported by declarations filed by
Thomas L. Fairfield, executive vice president, general counsel
and secretary of CFGI, and Michael Wilkerson, managing director
of Lazard Freres & Co. LLC.
Objections
A. Fannie Mae
Fannie Mae is objecting and reserving its rights with respect to
the request sought by the Debtors in three limited respects:
(1) to preserve its position that its discretionary approval
is required with respect to any potential acquirer of
Capmark's rights and obligations under a Delegated
Underwriting and Services Program.
(2) to preserve its position that the rights and obligations
are part of a single integrated business relationship and
therefore, must be assumed in their entirety; and
(3) to request that any potential bidder who wishes to
Undertake due diligence on the DUS Program sign the same
Confidentiality agreement that Berkadia signed.
Laurie Selber Silverstein, Esq., at Potter Anderson & Corroon
LLP, in Wilmington, Delaware, relates that the DUS Program is an
integrated business relationship, implemented through contracts
that are legally and economically integrated. Fannie Mae
reserves its rights to object to any proposed transaction which
contemplates anything short of full assumption and assignment of
the entire program.
According to Ms. Silverstein, the DUS Program entails, among
other things: (i) shared credit risk, (ii) personal services that
require a high level of expertise, (iii) substantial obligations
requiring substantial working capital and a high level of
commitment to the mortgage business. Accordingly, Fannie Mae
reserves its rights to object to any prospective buyer wishing to
assume the DUS Program.
Berkadia also signed a confidentiality agreement as a condition
to accessing confidential information of Fannie Mae's. Fannie
Mae requests that any sale process contemplating due diligence by
bidders require the bidders to sign the same form of agreement as
a condition to performing due diligence on the DUS Program.
B. FHLMC
Federal Home Loan Mortgage Corporation is also objecting and
reserving its rights with respect to the Sale Motion to preserve
its position that its approval is required with respect to any
potential acquirer of Capmark's rights and obligations under the
Freddie Mac Multifamily Program Plus Seller/Servicer Program, the
Multifamily Guide and any other applicable Purchase Documents or
vendor agreements, and that all those rights and obligations
constitute a single integrated business relationship that may be
only transferred and assumed in their entirety to an eligible
seller/servicer in a transaction approved by Freddie Mac.
The Court will convene a hearing on the Debtors' request on
November 4, 2009.
* * *
Judge Christopher Sontchi rejected plans by Capmark Financial
Group Inc. for a Saturday bid deadline for the MSB Business,
according to Reuters.
The Judge said the company must wait until after creditors have
formed a committee, planned for Monday, before asking for a bid
deadline, says the report. Judge Sontchi added that the proposed
sale motion would be heard next week, giving time for creditors
to organize and review the procedures but also pushing back the
company's original timeline for a Saturday deadline for bids.
The U.S. Bankruptcy Court for the District of Delaware will hold a
hearing on November 4, 2009, at 3:00 p.m., Eastern Standard Time,
on proposed sale of the commercial mortgage servicing and mortgage
banking business of Capmark Financial Group Inc., its subsidiaries
and its affiliates.
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 Use Lenders' Cash Collateral
-----------------------------------------------------------
Prior to the Petition Date, the certain parties made certain loans
and other extensions of credit to Capmark Financial Group Inc. and
its units. The parties to a term facility include: (i) Capmark
Financial Group Inc., as borrower; (ii) certain direct and
indirect subsidiaries of CFGI, as guarantors; (iii) Citicorp North
America, Inc., as Administrative Agent; (iv) the Prepetition
Secured Lenders; (v) Citibank N.A., as Collateral Agent; (vi)
JPMorgan Chase Bank, N.A., as syndication agent; and (vii)
Citigroup Global Markets Inc., and JPMorgan Securities, Inc., as
Joint Lead Arrangers and Joint Bookrunners.
As of the Petition Date, the Debtors estimate that they remain
obligated to the Prepetition Secured Lenders under the Term
Facility for $1.5 billion, plus certain accrued and unpaid
interest, costs and expenses.
Pursuant to Section 1 of a Security Agreement dated as of May 29,
2009, the Debtors granted to the Collateral Agent for the ratable
benefit of the Prepetition Secured Parties a security interest in
and first priority lien upon the Debtors' property as set forth
in Section 1 of the Security Agreement, including but not limited
to, certain Initial Pledged Debt and Mortgage Loan Assets, and
the Cash Collateral. More specifically, the Initial Pledged Debt
and Mortgage Loan Assets are assets owned by Capmark Financial
Inc., which upstreams cash payments received in connection with
that Collateral to CFGI, which, in turn, contemporaneously places
those funds in the Cash Collateral Account and Sub-Accounts.
The Cash Collateral
Pursuant to the Security Agreement, CFGI opened Account Nos.:
(a) 796676 -- the Cash Collateral Account;
(b) 796677 -- the Interest Cash Collateral Sub-Account;
(c) 796678 -- the Reserve Cash Collateral Sub-Account; and
(d) 796679 -- the Non-Reserve Cash Collateral Sub-Account.
All accounts are joint deposit/securities accounts with Citibank,
N.A., in the name of the Collateral Agent, under its sole control
and dominion.
Permitted Uses of Cash Collateral
Under the Prepetition Loan Documents
A. Interest Cash Collateral Sub-Account
Pursuant to the Prepetition Loan Documents, upon proper notice
from the Debtors, the Collateral Agent will, on the scheduled
interest payment date, transfer funds from the Interest Cash
Collateral Sub-Account: (a) first, to the Administrative Agent,
to pay outstanding interest in respect of the advances from each
lender under the Term Facility to the Debtors due on or prior to
that date, and (b) second, to CFGI in amounts as requested in the
notice; provided that, before and after any transfer pursuant to
clause (b):
* the balance of the Interest Cash Collateral Sub-Account is
not less than the amount of accrued and unpaid interest in
respect of Advances,
* certain Events of Default have not occurred and are not
continuing,
* the Collateral Agent will not have exercised remedies
against the Cash Collateral following an Event of Default as
defined in the Security Agreement, and
* the Administrative Agent will not have accelerated Advances
following an Event of Default as defined in the Security
Agreement.
(B) Reserve Cash Collateral Sub-Account
The main account in which restricted cash is held under the
Prepetition Loan Documents is the Reserve Cash Collateral Sub-
Account. The first $150 million of proceeds from the Collateral,
excluding interest payments received on pledged loans, is
deposited into this account.
Pursuant to the Prepetition Loan Documents, upon proper notice
from the Debtors, the Collateral Agent will transfer to the
Debtors funds from the Reserve Cash Collateral Sub-Account in the
amount requested, provided that, the transfer:
* will not cause certain Events of Default to occur and be
continuing;
* the Administrative Agent will not have accelerated Advances
following an Event of Default as defined in the Security
Agreement;
* the Collateral Agent will not have exercised remedies
against the Cash Collateral Account following an Event of
Default; and
* except to the extent the funds are used to prepay Advances,
no funds from the Reserve Cash Collateral Sub-Account may be
transferred from the Reserve Cash Collateral Sub-Account for
purposes other than to finance or reimburse financing
unfunded commitments, protective participation purchases,
protective advances in respect of REO Property and similar
funding obligations, in each case solely in respect of the
Collateral.
C. Non-Reserve Cash Collateral Sub-Account
Pursuant to the Prepetition Loan Documents, on each date that the
reconciliation statement for the Cash Collateral Account is
delivered, any and all amounts credited to the Non-Reserve Cash
Collateral Sub-Account will be applied to the prepayment of
Advances and any other obligations due and outstanding under the
Security Agreement and other related transaction documents.
By this motion, the Debtors seek the Court's authority to
continue using the Cash Collateral in the Reserve Cash
Collateral Sub-Account on an interim basis and in accordance with
the terms of a proposed Interim Order, but not to prepay any
Advances under the Term Facility nor to use either cash in the
Interest Cash Collateral Sub-Account to pay postpetition
interest, or cash in the Non-Reserve Cash Collateral Sub-Account.
As of the Petition Date, the Debtors estimate the total amount of
cash in the Reserve Cash Collateral Sub-Account is approximately
$150 million.
Mark D. Collins, Esq., at Richards, Layton & Finger, P.A., in
Wilmington, Delaware, notes that The Debtors have sought the
consent of the Prepetition Secured Parties for the use of the
Cash Collateral. The Debtors believe that the Prepetition
Secured Parties have consented to the use of the Cash Collateral
solely and exclusively upon the terms of the proposed Interim
Order during a specified period and in an amount not to exceed $6
million.
To obtain the Prepetition Secured Parties' consent, the Debtors
have agreed to provide the Prepetition Secured Parties with
adequate protection. Specifically, the Prepetition Secured
Parties will receive additional and replacements liens and
security interests on all Cash Collateral, Contingent
Administrative Expense Claims, and all Allowed Administrative
Expense Claims. In addition, CFI will grant CFGI a Contingent
Administrative Expense Claim, provided that if any Lien granted
by CFI in favor of the Prepetition Secured Parties over the
Collateral preserved or enhanced by a Permitted Use of Cash
Collateral is avoided pursuant to Sections 544, 545, 547, 548 or
549 of the Bankruptcy Code or any other statute, or diminishes in
value for any reason, or it is determined that the claim that can
be asserted by the Prepetition Secured Lenders over any of the
Prepetition Collateral is less than the amount of the Prepetition
Secured Credit Obligations, CFGI's Contingent Administrative
Expense Claim in the amount of the Cash Collateral used to
preserve or enhance the Collateral subject to the avoided Lien
will become an Allowed Administrative Expense Claim.
If any Lien granted by CFGI in favor of the Prepetition Secured
Parties over the Cash Collateral used to preserve or enhance the
Collateral through the Permitted Uses is avoided, CFGI's Allowed
Administrative Expense Claim or Contingent Administrative Expense
Claim will become a Disallowed Administrative Expense Claim or a
Disallowed Contingent Administrative Expense Claim, as
applicable.
According to Mr. Collins, the Debtors' Proposed Interim Order
also:
-- provides no crosscollateralization protection to the
Prepetition Secured Parties.
-- contains no acknowledgments by the Debtors as to the
validity, enforceability, priority and amount of any
prepetition lien under the Prepetition Loan Documents.
-- provides no waiver of Bankruptcy Code Section 506( c).
-- grants no Lien on any of the Debtors' claims and causes of
action that may arise under Sections 544, 545, 547, 548 or
549 of the Bankruptcy Code.
-- deems no prepetition secured debt to be postpetition debt
nor seeks to use any postpetition loan.
-- provides no disparate treatment for the professionals
retained by the Committee from those retained by the
Debtors with respect to any fee carve-out.
-- primes no secured lien.
* * *
Judge Christopher S. Sontchi of the U.S. Bankruptcy Court for the
District of Delaware authorized Capmark Financial Group Inc., and
its debtor affiliates to use, in the interim, Cash Collateral in
the Reserve Cash Collateral Sub-Account of up to $6,000,000, from
the Petition Date through the date that is the earliest to occur
of 30 days after the Petition Date or the occurrence of an Event
of Default.
The Debtors' use of Cash Collateral is solely and exclusively for
the purposes and in the amounts set forth on a specific list a
copy of which is available for free at:
http://bankrupt.com/misc/Capmark_Budget.pdf
The Prepetition Administrative Agent's and the Prepetition
Secured Lenders' consent to the Permitted Uses is without
prejudice to any argument that additional Available Cash should
not be used by the Debtors in any manner.
The Prepetition Administrative Agent, for the benefit of
itself and the Prepetition Secured Lenders, is entitled to
receive adequate protection to the extent of any diminution in
value of its interests in the Cash Collateral resulting from the
use of the collateral, the consumption, or shrinkage of the Cash
Collateral. As adequate protection for any Diminution in Value,
the Prepetition Administrative Agent, for the benefit of itself
and the Prepetition Secured Lenders, will receive the Adequate
Protection Liens.
The Final Hearing to consider entry of the Final Cash Collateral
Order is scheduled for November 24, 2009 at 9:00 a.m. (Eastern
Standard Time).
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 and 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.
CAPMARK FINANCIAL: Sec. 341 Meeting Set for December 3
------------------------------------------------------
Roberta A. DeAngelis, the acting U.S. Trustee for Region 3, asks
the Clerk of the Court to schedule a meeting of the creditors of
Capmark Financial Group Inc., and its debtor affiliates on
December 3, 2009, at 10:00 a.m. The meeting will be held at the
office of the U.S. Trustee located at Room 5209, J. Caleb Boggs
Federal Building, 5th Floor, 844 King Street, Suite 2207, in
Wilmington, Delaware.
This is the first meeting of creditors required under Section
341(a) of the Bankruptcy Code in the Debtors' bankruptcy cases.
Attendance by the Debtors' creditors at the meeting is welcome,
but not required. The Sec. 341(a) meeting offers the creditors a
one-time opportunity to examine the Debtors' representative under
oath about the Debtors' financial affairs and operations that
would be of interest to the general body of creditors.
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 Tap Ordinary Course Professionals
-------------------------------------------------------------
Capmark Financial Group Inc. and its units seek the Court's
authority to retain professionals utilized in the ordinary course
of business without the submission of separate employment
applications or retention orders, nunc pro tunc to the Petition
Date. The Debtors assert that it is essential that the employment
of OCPs be continued to avoid disruption of their normal business
operations.
The Debtors propose that within 30 days after the later of (i)
the entry of an order granting its request, and (ii) the date on
which the OCP commences postpetition services, each OCP will
provide to the Debtors' attorneys: (a) an affidavit certifying
that the OCP does not represent or hold any interest adverse to
the Debtors or their estates with respect to the matters for
which that OCP is to be employed, and (b) a completed retention
questionnaire.
The Debtors will then file the OCP Affidavit and Retention
Questionnaire with the Court and serve upon:
(i) the Office of the U.S. Trustee for the District of
Delaware;
(ii) counsel to the agents for the Debtors' prepetition secured
lenders; and
(iii) counsel to the statutory committee of unsecured creditors.
Any objecting party will have 15 days after the service to notify
the Debtors, the Reviewing Parties, and the relevant OCP, in
writing, of any objection to the retention based on the OCP
Affidavit or Retention Questionnaire.
If no objection is filed, the retention, employment, and
compensation of that OCP will be deemed approved, without further
Court order. If an objection is filed on or before the Objection
Deadline and that objection cannot be resolved within 20 days of
the filing date of the Objection, the Objection will be set for a
hearing before the Court.
The Debtors propose that they be permitted to pay each OCP,
without prior application to the Court by that OCP, 100% of the
professional fees and disbursements incurred, upon submission to,
and approval by, the Debtors of an appropriate invoice setting
forth, in reasonable detail, the nature of services rendered and
disbursements actually incurred. However, if any amount owed for
an OCP's fees and disbursements exceeds a total of $50,000 per
month on a "rolling basis," then the payments to that OCP for the
excess amounts will be withheld pending Court approval.
The Debtors further propose that, beginning January 31, 2010, and
on the last day of the subsequent month after the end of each
quarter, they will file with the Court and serve on the Reviewing
Parties a statement with respect to each OCP paid during the
immediately preceding three-month period. Each OCP's statement
will include these information:
(i) the name of the OCP;
(ii) the aggregate amounts paid as compensation for services
rendered and reimbursement of expenses incurred by that
OCP during the reported quarter; and
(iii) a general description of the services rendered by that
OCP.
A list of the Debtors' OCP is available for free at:
http://bankrupt.com/misc/Capmark_OCPs.pdf
The Debtors reserve their right to supplement the list of OCPs
from time to time.
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)
CATHOLIC CHURCH: Fairbanks Diocese Files 2nd Amended Plan
---------------------------------------------------------
The Catholic Bishop of Northern Alaska delivered to the U.S.
Bankruptcy Court for the District of Alaska its Second Amended
Plan of Reorganization on October 26, 2009. Bishop Donald Kettler
signed the Amended Plan.
To recall, Judge Donald MacDonald IV, on September 11, 2009,
denied approval of the Diocese's first amended and restated
disclosure statement explaining its Plan of Reorganization dated
May 14, 2009, holding that the First Amended Disclosure Statement
did not contain adequate information.
Judge MacDonald noted, however, that CBNA will be given an
opportunity to amend its Disclosure Statement and Plan, consistent
with the Court's memorandum and with the Court's decisions in the
lost policies case and with regard to the Creditors Committee's
request to pursue avoidance actions on behalf of the bankruptcy
estate. Judge MacDonald required 11 amendments to the First
Amended Disclosure Statement, some which are from CBNA's insurers
and the Creditors Committee, including a liquidation analysis, and
a recitation of CBNA's reasons for not including the Endowments in
the Plan.
In a statement released October 27, the Diocese of Fairbanks said
that it filed the Amended Plan in an attempt to resolve the claims
of victims of sexual abuse. The Amended Plan reflects a new
funding structure that would provide victims and creditors around
$11 million.
The new revision was prompted by the Judge McDonald's ruling that
there was insufficient evidence to force a key insurance company
to participate in the Plan. Before the ruling, Continental
Insurance Company was potentially liable to pay millions of
dollars to claimants, the statement said.
The Amended Plan also reflects the financial downturns felt across
the nation. CBNA had originally contemplated obtaining financing
to fund the previous plan; however, in the wake of market losses,
the lack of investment earnings effectively undermined CBNA's
abilities to repay loans.
"The current financial landscape led CBNA to consider new ways to
compensate claimants," Bishop Donald Kettler said. "We keep
foremost in our thoughts the desire to bring resolution and
healing to victims. We also seek to sustain vital ministries that
bring comfort to villages and communities all across our diocese.
I believe this revised plan allows us to do both of those things."
Under the terms of the newly Amended Plan, CBNA would sell
essential ministry property to the Endowment in exchange for more
than $7.5 million dollars in cash. The Endowment consists of
restricted funds received from donors and earnings, and is not
part of the reorganization. The exchange of property for cash
would be dependent on Court approval of the Plan.
CBNA also said that the recent Plan would see an additional half
million dollars provided by parishes. By contributing, the
parishes would receive protections under the Plan. In addition,
the sale of other diocesan properties, including Pilgrim Hot
Springs, and possible settlements with some of CBNA's insurers are
projected to contribute in excess of $2 million to pay claims.
Settling claimants will see initial distributions within 30 days
of the Amended Plan's effective date.
The Diocese hopes to see the newly Amended Plan confirmed early in
2010.
Classes of Claims
In accordance with Section 1122(a) of the Bankruptcy Code, Claims
against the Diocese are classified in 14 Classes:
(1) Class 1 ? Priority Employee Unsecured Claims;
(2) Class 2 ? Prepetition Date Secured Tax Claims;
(3) Class 3 ? Other Secured Claims;
(4) Class 4 ? Great Falls Secured Claim;
(5) Class 5 ? Annuity Secured Claims;
(6) Class 6 ? General Unsecured Convenience Claims;
(7) Class 7 ? Jesuit Unsecured Claims;
(8) Class 8 ? General Unsecured Claims;
(9) Class 9 ? Other Tort and Employee Claims;
(10) Class 10 ? Tort Claims and Future Tort Claims;
(11) Class 11 ? Insurance and Benefit Claims;
(12) Class 12 ? Continental Claims;
(13) Class 13 ? Pilgrim Springs Claims; and
(14) Class 14 ? Penalty Claims.
The Amended Plan provides that in full satisfaction of the Class
12 Continental Claims, the Reorganized Debtor will pay holders of
the Continental Claims, $75,000 Cash, and no interest, in four
equal annual installments of $18,750 with the first installment
due and payable on the Effective Date, with the rest of the
payment to be made 12 months after the last payment. No interest
will be paid to the Continental Claims.
Any and all other amounts owed to Continental on the Continental
Claims in addition to the $75,000 paid pursuant to the Plan will
be discharged pursuant to Sections 1141 and 524 of the Bankruptcy
Code, and the Reorganized Debtor will not be required to pay any
of those amounts. The Class 12 Continental Claims are impaired
under the Amended Plan.
Asset Sales
CBNA will sell these real properties to the Endowment in exchange
for $7,625,000 in Cash and marketable securities:
Property Amount
-------- ------
Catholic schools $3,500,000
Chancery 1,100,000
Kobuk Center 1,100,000
Adoption Building 600,000
KNOM Buildings 430,000
Fairbanks Counseling &
Hanger 300,000
Warehouse 225,000
Betty St Convent 195,000
Kateri Tekakwitha Center 175,000
---------
Total $7,625,000
Bishop Kettler asserted that the sale to the Endowment will be
pursuant to the Amended Plan, and will not be a sale under Section
363 of the Bankruptcy Code. He noted that certain CBNA Real
Property was excluded because it has been marketed during the
pendency of the reorganization case but no acceptable offers have
been obtained.
The sale to the Endowment will close on or before the Effective
Date, with the sale proceeds to be used to fund CBNA's funding
obligations on the Effective Date.
The auction for the Pilgrim Springs property will occur at a
hearing conducted in connection with the Confirmation Hearing.
The sale of the Pilgrim Springs Property to the bidder with the
highest and best bid must close prior to the Effective Date. The
proceeds of the Pilgrim Springs Auction will be used to fund
CBNA's funding obligations on the Effective Date.
On or before the Effective Date, CBNA will sell the Chapel at
Harding Lake to the Harding Lake community for $15,000.
Funding After the Effective Date
The funds necessary to ensure continuing performance under the
Amended Plan after the Effective Date will be, or may be, obtained
from:
(a) any and all remaining Assets retained by the Reorganized
Debtor after the Effective Date;
(b) the proceeds from the Special Appeal;
(c) Cash generated from the post-Effective Date operations of
the Reorganized Debtor; and
(d) any reserves established by the Debtor or the Reorganized
Debtor, provided that no part of the Fund to be
established by CBNA may be used to pay Creditors other
than Tort Claimants and Future Tort Claimants under the
Plan, and only those Assets to be paid or contributed to
the Fund to be established by CBNA, pursuant to the Plan,
will be used to pay the Allowed Claims of Tort Claimants
and Future Tort Claimants.
Conditions to Occurrence of Effective Date
Under the Amended Plan, each of these are conditions to the Plan
Effective Date, which conditions must be satisfied or waived by
the Diocese in its sole discretion:
(a) The Confirmation Order has been entered by the Bankruptcy
Court, which will be in full force and effect and not
subject to any stay or injunction;
(b) All conditions to the effectiveness of the Confirmation
Order have been met;
(c) The Confirmation Order is in form and substance
satisfactory to CBNA in its sole discretion;
(d) The sale of Assets to the Endowment has closed;
(e) The sale of the Pilgrim Springs Property to the bidder
with the highest and best bid at the Pilgrim Springs
Auction has closed; and
(f) All actions, documents, and agreements necessary to
implement the Plan will have been effected or executed,
including, but not limited to, the Plan Documents.
Settlement with Parishes and CTNA
To facilitate implementation of the Amended Plan, CBNA is entering
into a settlement agreement with its Parish Churches and the
Catholic Trust of Northern Alaska. Under the Parish Settlement
Agreement, the Parishes will contribute $500,000 Cash from their
unrestricted deposits with the CTNA to the Fund to settle the
various disputes as to Parish Church Real Property and the
avoidance actions claim against the CTNA.
Under the Settlement, the Parish Churches will become
Participating Third Parties and Settling Parties pursuant to the
Plan.
A full-text copy of the Second Amended Plan is available for free
at http://bankrupt.com/misc/Fairbanks_Amended_Plan_102609.pdf
Copies of the list of the CBNA Real Property and the Parish
Settlement Agreement are also available for free at:
http://bankrupt.com/misc/Fairbanks_Plan_ExhA_102609.pdf
http://bankrupt.com/misc/Fairbanks_Plan_ExhB_102609.pdf
About Diocese of Fairbanks
The Roman Catholic Diocese of Fairbanks in Alaska, aka Catholic
Bishop of Northern Alaska, aka Catholic Diocese of Fairbanks, aka
The Diocese of Fairbanks, aka CBNA -- http://www.cbna.info/--
filed for chapter 11 bankruptcy on March 1, 2008 (Bankr. D. Alaska
Case No. 08-00110). Susan G. Boswell, Esq., at Quarles & Brady
LLP represents the Debtor in its restructuring efforts. Michael
R. Mills, Esq., of Dorsey & Whitney LLP serves as the Debtor's
local counsel and Cook, Schuhmann & Groseclose Inc. as its special
counsel. Judge Donald MacDonald, IV, of the United States
Bankruptcy Court for the District of Alaska presides over
Fairbanks' Chapter 11 case. The Debtor's schedules show total
assets of $13,316,864 and total liabilities of $1,838,719.
(Catholic Church Bankruptcy News; Bankruptcy Creditors' Service,
Inc., http://bankrupt.com/newsstand/or 215/945-7000).
CATHOLIC CHURCH: Claimants Insists on Lift Stay for Alaska Trials
-----------------------------------------------------------------
Eight creditors, who filed claims of sexual abuse in the
bankruptcy case of the Catholic Bishop of Northern Alaska, ask the
U.S. Bankruptcy Court for the District of Alaska for relief from
automatic stay pursuant to Section 362(d) of the Bankruptcy Code
to allow their pending actions in the Superior Court for the State
of Alaska to proceed to trial and judgment.
On behalf of the CBNA, Kasey C. Nye, Esq., at Quarles & Brady LLP,
in Tucson, Arizona, reminds Judge MacDonald that tort claimants'
sexual abuse claims are at the heart of the Diocese's
reorganization case. She notes that CBNA filed for bankruptcy in
order to pay just compensation to victims of sexual abuse, and to
provide that compensation through a plan of reorganization that
will also restructure CBNA's financial affairs to preserve and
develop its ministries and missions.
The request should be denied because it seeks, in essence, to
ignore the Chapter 11 process and pointlessly seeks to liquidate
the Creditors' claims in a costly jury trial, Mr. Nye argues. He
contends that the request fails to disclose that none of CBNA's
insurers are providing a defense, even under a reservation of
rights, for the Creditors' claims. As a result, he asserts, the
bankruptcy estate, which the request candidly admits is extremely
limited, will bear the expense of the unnecessary litigation
alone.
Contrary to the allegations in the request, granting stay relief
and permitting jury trials will hurt rather than help CBNA's
ability to marshal insurance assets to benefit Tort Claimants
under a "Great Divide Agreement" that assigns CBNA's claims
against breaching insurers, Mr. Nye asserts, among other things.
The eight creditors who filed claims for sexual abuse and who are
plaintiffs in pending actions in the Superior Court for the State
of Alaska submitted a reply to the Catholic Bishop of Northern
Alaska's objection to their request to lift the automatic stay.
John C. Manly, Esq., at Manly, McGuire & Stewart, in Newport
Beach, California, contends that immediate prosecution of the
State Court Actions will facilitate confirmation of a consensual
plan by establishing values with the Diocese and its insurers,
Catholic Mutual Group, Travelers Casualty and Surety Company and
Alaska National for the more than 290 childhood sexual assault and
rape claims asserted in the bankruptcy case.
The Diocese's contemplated second amended plan of reorganization
and its motion for summary judgment in its adversary proceeding
against insurers, wherein the Diocese seeks a determination that
"Post-Abuse Impacts" are covered by Catholic Mutual Group's
umbrella policies, are components of a strategy to shift the
payment of abuse claims from the Diocese's non-insurance assets to
its insurers, Mr. Manly alleges.
"[Creditors] agree that the Debtor's insurers should honor their
obligations to indemnify the Debtor to the full extent of their
insurance contracts just as [Creditors] expect the Diocese to use
its non-insurance assets in satisfaction of the sex abuse claims,"
Mr. Manly says. "However, the Debtor's proposed 'Great Divide
Agreement' lacks an essential element of any agreement, i.e. the
consent of the abuse survivors," he points out, among other
things.
Travelers Breaks its Silence
Travelers Casualty and Surety Company, formerly known as Aetna
Casualty and Surety Company, a defendant in the Diocese's
insurance coverage adversary proceeding, tells the U.S. Bankruptcy
Court for the District of Alaska that while it does not support
the request for relief from stay, it disagrees with many of the
arguments and assertions made by the Diocese in the Objection.
"Travelers submits this response only to prevent Travelers'
silence from being misunderstood as agreement with any of CBNA's
contentions," Michael P. Pompeo, Esq., at Drinker Biddle & Reath
LLP, in Florham Park, New Jersey, tells Judge MacDonald. He
contends that CBNA does not and cannot explain how, in the context
of the bankruptcy case, it could possibly enter into "Great
Divide" agreements with claimants.
Regardless, the premise of CBNA's contemplated new plan -- the
argument that Travelers breached duties to CBNA -- is simply
wrong, Mr. Pompeo argues. More importantly, he points out, the
issue of whether Travelers owes any duties to CBNA is an issue
that will be determined in the Coverage Case and is not the
subject of the request. He adds that the insurance coverage
issues raised by that request should be argued and resolved in the
Coverage Case -- not in addressing the request or plan
confirmation.
Notwithstanding CBNA's unsupportable insurance coverage arguments,
Travelers concurs with the Objection's ultimate conclusion that
lifting the automatic stay is unnecessary and a waste of judicial
resources, Mr. Pompeo tells the Court. He asserts that each claim
is fact sensitive and the resolution of one claim, or eight, will
not be determinative of the merits of any other claim nor will it
likely lead to the ultimate resolution of the bankruptcy case. At
most, he insists, lifting the automatic stay will liquidate eight
claims, and hence, the requested relief should be denied.
* * *
According to the minutes of the hearing held October 28, 2009,
Judge MacDonald heard arguments of the parties regarding the
request, and that the matter is taken under advisement. Judge
MacDonald also noted that the Court will enter a written decision.
About Diocese of Fairbanks
The Roman Catholic Diocese of Fairbanks in Alaska, aka Catholic
Bishop of Northern Alaska, aka Catholic Diocese of Fairbanks, aka
The Diocese of Fairbanks, aka CBNA -- http://www.cbna.info/--
filed for chapter 11 bankruptcy on March 1, 2008 (Bankr. D. Alaska
Case No. 08-00110). Susan G. Boswell, Esq., at Quarles & Brady
LLP represents the Debtor in its restructuring efforts. Michael
R. Mills, Esq., of Dorsey & Whitney LLP serves as the Debtor's
local counsel and Cook, Schuhmann & Groseclose Inc. as its special
counsel. Judge Donald MacDonald, IV, of the United States
Bankruptcy Court for the District of Alaska presides over
Fairbanks' Chapter 11 case. The Debtor's schedules show total
assets of $13,316,864 and total liabilities of $1,838,719.
(Catholic Church Bankruptcy News; Bankruptcy Creditors' Service,
Inc., http://bankrupt.com/newsstand/or 215/945-7000).
CATHOLIC CHURCH: Wilmington to Hire Ordinary Course Professionals
-----------------------------------------------------------------
The Catholic Diocese of Wilmington, Inc., seeks authority from the
U.S. Bankruptcy Court for the District of Delaware to (i) employ
professionals utilized in the ordinary course of business, without
the submission of separate retention applications and the issuance
of separate orders approving the retention of each individual
professional, and (ii) pay each OCP, 100% of postpetition fees and
disbursements, subject to an individual OCP monthly fee cap of
$35,000, and an aggregate monthly cap on the payment of total fees
for all OCPs of $60,000.
James L. Patton, Jr., Esq., at Young Conaway Stargatt & Taylor,
LLP, in Wilmington, Delaware, assures the Court that payment of
any OCP's fees that exceed the Monthly OCP Cap will be subject to
prior Court approval in accordance with Sections 330 and 331 of
the Bankruptcy Code, the Federal Rules of Bankruptcy Procedure,
the Local Bankruptcy Rules of Bankruptcy Practice and Procedure
for the District of Delaware, the Fee Guidelines promulgated by
the Executive Office of the United States Trustee and any Court
order governing the payment of compensation and reimbursement of
expenses in the Chapter 11 case.
The Diocese anticipates that it may need the services of
additional OCPs and, therefore, reserve the right to retain
additional OCPs as the need arises. In the event the Diocese
determines it is advisable to retain additional OCPs, it proposes
to file a supplemental list of OCPs with the Court and to serve it
certain notice parties. The Diocese further proposes that if no
objection to a supplemental list of OCPs is filed within 15 days
of the date of service, the same will be deemed an OCP within the
purview of the order granting the request without the necessity of
a hearing or further notice.
Mr. Patton assures the Court that none of the OCPs represent or
hold any interest materially adverse to the Diocese or to its
bankruptcy estate with respect to the matters for which the OCP is
to be employed. To further ensure that each OCP is disinterested,
the Diocese proposes that each OCP be required to file with the
Court an affidavit of disinterestedness, and to serve copies on
the Notice Parties, prior to the submission to the Diocese of
invoices accompanying a request for compensation.
The Diocese submits that retention of the OCPs is essential and
should be authorized to avoid any disruption in the Diocese's day-
to-day business operations. Mr. Patton asserts that the Diocese
further requires general tax, accounting, and auditing related
services in the ordinary course of its business.
Based on the number and the relatively limited scope of services
to be provided by the OCPs, requiring the Diocese to seek
individual authorization to employ each OCP would place an undue
administrative burden on the Diocese and increase substantially
the expenses of the bankruptcy estate, Mr. Patton contends. He
adds that because the amount of fees and disbursements owed to any
individual professional in respect of postpetition services is
expected to be relatively modest, the requested relief will allow
the Diocese to avoid additional fees that would be incurred by the
OCPs in connection with preparing and prosecuting numerous monthly
and interim fee applications, 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.
CDS DEVELOPMENT: Files for Ch 11 Bankr., Canceling Auction
----------------------------------------------------------
CDS Development LLC has filed for Chapter 11 bankruptcy protection
in the U.S. Bankruptcy Court for the District of Massachusetts,
listing $1,000,001 to $10,000,000 in assets against $500,001 to
$1,000,000 in liabilities. Trevor Jones at Berkshire Eagle Online
reports that CDS Development's bankruptcy filing has canceled a
public auction of three parcels by the Pittsfield Cooperative Bank
last Tuesday. According to Berkshire Eagle, CDS Development's
debt stands at $640,000 between a mortgage and funds owed to
family members. Berkshire Eagle relates that the lots are valued
at $1.3 million.
CDS Development LLC is located in Great Barrington, Massachusetts.
CENTAUR PA: Units' Filings Part of Company-Wide Restructuring
-------------------------------------------------------------
Two of Centaur LLC's affiliated entities associated with its
racing, gaming and entertainment development project in
Pennsylvania elected to file voluntary bankruptcy petitions under
Chapter 11 of the U.S. Bankruptcy Code yesterday to preserve the
status of the Valley View Downs & Casino project. These actions
are first steps toward a more comprehensive, company-wide
restructuring process.
Centaur continues to work with its lenders to develop a consensual
agreement to address its capital structure at the corporate level,
reduce its debt load and strengthen its future financial position.
Emphasizing that casino, racing and hotel operations at its
existing facilities would continue to serve its customers in a
first-class "business as usual" manner, Centaur did not make
interest payments to senior lenders on Oct. 27.
The company will continue to operate Hoosier Park Racing & Casino
in Anderson, Ind., and Fortune Valley Hotel & Casino in Central
City, Colo., without disruption while also pursuing the launch of
Valley View Downs & Casino in western Pennsylvania.
"Speaking on behalf of Centaur's existing properties, our
commitment to our customers and employees is as strong as ever.
We take great pride in providing our guests superior products and
exemplary service. We also place high value in our employee's
contributions and role in this effort. Our ongoing dedication to
providing an outstanding entertainment experience remains firmly
in place," said Jim Brown, General Manager of Gaming, Hoosier Park
Racing & Casino.
"Our business operations at the property level are healthy and
generate positive cash flow from operations. We remain committed
to putting our capital structure on solid ground. Restructuring
our corporate debt will place us in a position for long-term
success and benefit our customers, employees, horsemen groups,
host communities and other stakeholders. We are confident our
steps will ultimately strengthen the company," said Centaur
Chairman Rod Ratcliff.
Numerous companies have filed for reorganization in Chapter 11,
including K-Mart, Macy's, Texaco, and Bloomingdale's. These
companies used the Chapter 11 process to strengthen their
businesses and are performing well.
"This step in Pennsylvania demonstrates how serious we are in
clearing the way to get the Valley View Downs project built and
operating. It allows the application process to continue and
reflects our deep commitment to the project. The reason for this
filing is to preserve the status of the Pennsylvania project,
advance the restructuring process, and safeguard our gaming
application.
"In [Thurs]day's challenging economic climate, there has been
widespread restructuring of debt in our industry. We anticipate
that this proactive step on our part to restructure our debt will
expedite progress in Pennsylvania," said Kurt Wilson, Centaur's
Chief Financial Officer.
Indiana-based Centaur LLC -- http://www.centaurgaming.net/-- is a
privately held, business focused on bringing the entertainment and
economic development benefits of gaming and horse racing to key
communities across North America. The company now owns and
manages Hoosier Park Racing & Casino in Anderson, Indiana, and
Fortune Valley Hotel & Casino in Central City, Colorado, and has
engaged an investment bank to develop strategies to launch Valley
View Downs & Casino in western Pennsylvania.
Centaur PA Land, LP, its affiliate Valley View Downs LP filed Chapter
11 petitions
filed for Chapter 11 on Oct. 28, 2009 (Bankr. D. Del. Case No. 09-
13760). Indiana-based Centaur and Valley View listed assets of $148
million and debt
totaling $297 million. Judge Kevin J. Carey handles the case. Jeffrey M.
Schlerf, Esq., at Fox Rothschild LLP, serves as counsel.
CEQUEL COMMUNICATIONS: Note Upsizing Won't Move S&P's 'B+' Rating
-----------------------------------------------------------------
Standard & Poor's Ratings Services said that St. Louis-based cable
operator Cequel Communications Holdings I LLC's (B+/Stable/--)
recent $200 million upsizing of its unsecured notes issue to
$600 million has no effect on the company's ratings, outlook, or
issue ratings ('BB-' rated senior secured first-lien debt with a
'2' recovery and 'B-' rated second-lien debt with a '6' recovery
for debt at intermediate holding company Cequel Communications
LLC; and 'B-' rated senior unsecured debt with '6' recovery for
debt at Cequel). The '2' recovery indicates expectations for
substantial (70%-90%) recovery in the event of a payment default,
while the '6' recovery rating indicates expectations for
negligible (0%-10%) recovery in the event of a payment default.
Proceeds from the upsized issue will repay $50 million of
additional first-lien bank debt and $150 million of additional
second-lien bank debt. Therefore, S&P does not expect this to
affect consolidated leverage, which is currently 6.1x on a
rolling-12-month basis through June 2009. The improvement in
recovery for the first-lien debtholders is modest and not
sufficient to improve recovery prospects from the current '2'
recovery rating. The other debt issues, which have a '6' recovery
rating, are likewise unchanged.
CHEMTURA CORP: Equity Holders Form Alliance, Want Committee
-----------------------------------------------------------
Jon Eric Jacks, an equity holder of 800,000 shares of Chemtura
Corp. common stock, notifies the Court of the formation of the
"Chemtura Stock Alliance."
In his notice, Mr. Jacks relates that the Alliance was formed
"due to recent misleading information released by [the Debtors']
counsel, Kirkland & Ellis, and the overall lack of representation
of equity holders' interests; even though Chemtura's market cap
has increased dramatically since the Chapter 11 filing, book
value has stabilized, overall business has returned to
profitability, the global economy continues to rebound, as well
as other pertinent reasons."
The Alliance, however, is not an official committee and is not
represented by a counsel. Mr. Jacks reveals that the Alliance
represents total equity in excess of "32,638,349 million shares,"
which is effectively more than 13% of the outstanding shares, and
making the Alliance the largest shareholder group seeking the
appointment of an Official Equity Committee.
A list of the members of the Alliance is available for free at:
http://bankrupt.com/misc/ChemAlliance.pdf
In the same filing, Mr. Jacks points out the reasons of "a
compelling need for the appointment of an official equity
committee." Specifically, he states that Chemtura is unlike
other companies that have filed for Chapter 11 protection because
it is in a minority of companies that is a viable and valuable
entity.
"Not only are the debtors viable, they list a conservative book
value for tax purposes that is non-reflective of true market
value," Mr. Jacks tells the Court. He points out that:
-- the Debtors have accumulated depreciation subject to
recapitalization in excess of $1 billion dollars;
-- millions of dollars of Net Operating Loss tax benefits as a
going concern; and
-- the Debtors are a global entity enjoying favorable exchange
rates coupled with a rebounding global economy.
Mr. Jacks supports his statement by pointing out that shares of
Chemtura's common stock traded as low as 12 cents prepetition.
However, since the Petition Date, shares of the Debtors' common
stock have steadily gained up to a recent postpetition high of
$1.20, showing a recovery of 1000% up from prepetition lows, even
while in bankruptcy, effectively representing a market cap of
$291,600,000 of equity value based upon 243,000,000 outstanding
shares.
With regard to the Debtors' bonds, Mr. Jacks relates that a
telling indication that the true value of Chemtura is in excess
of what is shown on the books at $334,000,000 is the fact that
the Debtors' bonds have made an "amazing recovery since petition
filing."
The Debtors' June 2016 bonds, with a face value of $100, have
recently traded as high as $111.50 representing the markets are
paying a premium of 11.5% for the bond, Mr. Jack says. "This is
certainly interesting, given the fact that this bond had a
postpetition low of approximately $15 dollars."
Equally impressive is the July 2009 bonds (GLKGA), which also
have a face value of $100 and have recently traded at a 9.5%
premium at $109.50, off of their postpetition lows of
approximately $10, Mr. Jacks adds.
Moreover, Mr. Jacks argues that the burden of properly
representing the interests of equity holders cannot be relied on
the Debtors' management or the Debtor's board of directors
because even if certain directors or managers hold substantial
equity positions, a conflict exists to proper equity
representation as they are subject to conflicting fiduciary
duties of all stakeholders. He adds that there is also a
reasonable expectation that the Debtors will favor the interests
of significant creditor claims, as their relations are important
to the Debtors for future business interactions.
Also, Mr. Jacks elaborates, the Official Committee of Unsecured
Creditors cannot be relied upon for equity representation as it
owes its fiduciary duties to unsecured creditors and as such,
will most likely be working against the interests of equity
holders, the result most likely being a windfall of profit in the
form of an equity swap, which will be diverted away from current
equity holders.
For these reasons, Mr. Jacks asserts that only an official equity
committee would give proper representation to the interests of
equity holders as an equity committee's fiduciary duties will not
be divided between stakeholders, but will only seek what is just
and proper value given to equity interests.
Furthermore, Mr. Jacks tells the Court, proper representation of
equity holders could benefit the Debtors in a way that could
actually outweigh the cost of the committee -- much in the same
way that a fee committee could keep in check costs previously
charged to the estate like training summer associates.
Letters Supporting Equity Committee Formation
As previously reported, certain equity holders asked the Court
regarding the formation of an official committee to represent
their interests in the Debtors.
From the period from October 14 to 29, 2009, more than 40 equity
holders sent similar requests to the Court. They are:
-- Paul Sullivan,
-- Burt Jacobson,
-- Cale Jean,
-- Douglas Brown,
-- Gary S. McSherry,
-- Yong S. Kim,
-- R. Bruce Huntly,
-- Henry C. Fields,
-- Michael Bowen,
-- Lawrence Greco,
-- Ron Tucker,
-- Anne Hillman,
-- Elizabeth Romero,
-- John A. Ferrante,
-- Chet L. Hockett, Jr.,
-- Venu Ganga,
-- Richard Lord,
-- Madhavi L. Yeluri,
-- Peter A. Pizzi,
-- William A. Flynn,
-- Thomas Henderson,
-- Charles Henderson,
-- Warner Henderson,
-- Ariana Spillane,
-- Everett and Carol Biegalski,
-- Jody M. Zarka,
-- Angela Havrilla,
-- Kwok S. Wong,
-- Raymond J. Hahn,
-- Greg Robinson,
-- Sean E. Flynn,
-- Alec K. Epting,
-- John Holden,
-- Yuanyuan Dong,
-- Alex Wettreich,
-- Tom and Katie Gerhard,
-- Daniel J. McDonough,
-- Malcolm Brenner,
-- James Wenner,
-- Charles M. Baylis,
-- Pete Esmet,
-- Holmes Tan,
-- Richard and Doris Julian,
-- William G. Neal,
-- Scott P. Storck,
-- William Liang, and
-- Michael Flynn.
About Chemtura Corp.
Based in Middlebury, Connecticut, Chemtura Corporation (CEM) --
http://www.chemtura.com/-- with 2008 sales of $3.5 billion, is a
global manufacturer and marketer of specialty chemicals, crop
protection products, and pool, spa and home care products.
Chemtura Corporation and 26 of its U.S. affiliates filed voluntary
petitions for relief under Chapter 11 on March 18, 2009 (Bankr.
S.D.N.Y. Case No. 09-11233). M. Natasha Labovitz, Esq., at
Kirkland & Ellis LLP, in New York, serves as bankruptcy counsel.
Wolfblock LLP serves as the Debtors' special counsel. The
Debtors' auditors and accountant are KPMG LLP; their investment
bankers are Lazard Freres & Co.; their strategic communications
advisors are Joele Frank, Wilkinson Brimmer Katcher; their
business advisors are Alvarez & Marsal LLC and Ray Dombrowski
serves as their chief restructuring officer; and their claims and
noticing agent is Kurtzman Carson Consultants LLC.
As of December 31, 2008, the Debtors had total assets of
$3.06 billion and total debts of $1.02 billion.
Bankruptcy Creditors' Service, Inc., publishes Chemtura
Bankruptcy News. The newsletter tracks the Chapter 11
proceedings undertaken by Chemtura Corp. and its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
CHEMTURA CORP: Plan Exclusivity Extended Until Feb. 11
------------------------------------------------------
Chemtura Corporation and its debtor affiliates sought and
obtained a further extension of their Exclusive Plan Filing
Period through and including February 11, 2010, and their
Exclusive Solicitation Period through and including April 12,
2010.
The Court previously set the deadline of the exclusive period for
the Debtors to file a Chapter 11 plan through November 13, 2009,
and their exclusive period to solicit acceptances of that plan
through January 12, 2010.
Richard M. Cieri, Esq., at Kirkland & Ellis LLP, in New York,
contended that the size and complexity of the Debtors' cases
alone warranted extension of the Exclusive Periods. He noted
that the Debtors' Chapter 11 cases involve 27 debtors with assets
and operations located in 12 states around the United States and
the Debtors have more than $1 billion in prepetition funded debt
on a consolidated basis.
Mr. Cieri noted that during the eight-month period since the
Petition Date, the Debtors made significant progress. The
Debtors, however, do not believe that they will be able to take
full advantage of all they have accomplished without a further
extension of the Exclusive Filing Periods.
"Among other things, the Debtors' ability to propose a
confirmable plan depends on an assessment of, and the
implementation of strategies for addressing, significant
contingent and unliquidated claims that are likely to be filed by
the Bar Date, as well as and resolving certain disputes among and
between the Debtors? various creditor and equity constituencies,"
Mr. Cieri said.
In particular, Mr. Cieri pointed out the Debtors are aware that a
very substantial environmental and tort claims may be asserted on
or before the October 30, 2009 Claims Bar Date. He said a review
and analysis of the numerous claims expected to be asserted
cannot be accomplished in a time frame that would allow for the
filing and ultimate confirmation of a carefully developed plan of
reorganization within the previous Exclusive Periods.
Mr. Cieri contended that the Debtors cannot complete the
development of a plan of reorganization until the passage of the
Bar Date and the analysis of asserted claims. An extension of
the Exclusive Periods, he added, will enable the Debtors to
better address uncertainties and the related complexities in
developing a Chapter 11 plan.
About Chemtura Corp.
Based in Middlebury, Connecticut, Chemtura Corporation (CEM) --
http://www.chemtura.com/-- with 2008 sales of $3.5 billion, is a
global manufacturer and marketer of specialty chemicals, crop
protection products, and pool, spa and home care products.
Chemtura Corporation and 26 of its U.S. affiliates filed voluntary
petitions for relief under Chapter 11 on March 18, 2009 (Bankr.
S.D.N.Y. Case No. 09-11233). M. Natasha Labovitz, Esq., at
Kirkland & Ellis LLP, in New York, serves as bankruptcy counsel.
Wolfblock LLP serves as the Debtors' special counsel. The
Debtors' auditors and accountant are KPMG LLP; their investment
bankers are Lazard Freres & Co.; their strategic communications
advisors are Joele Frank, Wilkinson Brimmer Katcher; their
business advisors are Alvarez & Marsal LLC and Ray Dombrowski
serves as their chief restructuring officer; and their claims and
noticing agent is Kurtzman Carson Consultants LLC.
As of December 31, 2008, the Debtors had total assets of
$3.06 billion and total debts of $1.02 billion.
Bankruptcy Creditors' Service, Inc., publishes Chemtura
Bankruptcy News. The newsletter tracks the Chapter 11
proceedings undertaken by Chemtura Corp. and its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
CHEMTURA CORP: Posts $37 Mil. Operating Profit for Third Quarter
----------------------------------------------------------------
Chemtura Corporation, debtor-in-possession, (Pink Sheets: CEMJQ)
has filed its Quarterly Report on Form 10-Q for the third quarter.
For the third quarter of 2009, the Company recorded net earnings
on a GAAP basis of $8 million, or $0.03 per share and net earnings
on a managed basis of $17 million, or $0.07 per share.
Third Quarter 2009 Financial Results
The discussion below includes financial information on both a GAAP
and managed basis. The Company presents managed basis financial
information as management uses this information internally to
evaluate and direct the performance of the Company's operations
and believes that the managed basis financial information provides
useful information to investors.
The following is a summary of third quarter results on a
GAAP basis:
----------------------------------------------------------
(In millions, except per share data) Third Quarter
----------------------------------------------------------
2009 2008 % Change
-------- ------- ----------
Net sales $681 $924 (26%)
Operating profit $34 $44 (23%)
Earnings from continuing $12 $11 9%
operations
Loss on sale of discontinued ($4) $- NM*
operations
Net earnings attributable to $8 $11 (27%)
Chemtura
Earnings from continuing $0.05 $0.05 -
operations ? per share
Loss on sale of discontinued ($0.02) $- NM*
operations ? per share
Net earnings attributable to $0.03 $0.05 (40%)
Chemtura ? per share
* NM = Not Meaningful
The following is a summary of third quarter financial results
on a managed basis:
-----------------------------------------------------------
(In millions, except per share data) Third Quarter
-----------------------------------------------------------
2009 2008 % Change
-------- ------- ----------
Net sales $681 $924 (26%)
Operating profit $37 $57 (35%)
Net earnings attributable to $17 $26 (35%)
Chemtura
Net earnings attributable to $0.07 $0.11 (36%)
Chemtura ? per share
U.S Chapter 11 Proceedings
* On August 21, 2009, the United States Bankruptcy Court for
the Southern District of New York established October 30,
2009 as the general deadline for the filing of proofs of
claim against the Debtor's estate for certain pre-petition
claims. Following the Bar Date, the Debtors will evaluate
the claims filed by creditors for known liabilities as
well as claims with respect to contingent and unliquidated
liabilities to establish the population of all creditors?
claims to be addressed by any plan of reorganization filed
in the Debtors' Chapter 11 cases.
* The Company filed a motion with the Court to request an
extension of exclusivity and on July 28, 2009, the Court
approved an extension of the exclusive right of the
Debtors to file a plan of reorganization that expires on
November 13, 2009. As is customary, on October 14, 2009,
the Debtors filed a second motion to further extend the
exclusive filing period to February 11, 2010. The motion
to extend the exclusive filing period to February 11, 2010
was granted by the Court on October 27, 2009.
* The Company's intent remains to emerge from Chapter 11 as
soon as practicable, ideally within one year of its
filing. The receipt of creditors' claims as of the Bar
Date and their subsequent evaluation are critical steps
towards the development and filing of a plan of
reorganization. The plan of reorganization will then
provide the framework for the Company's stakeholders to
agree upon the terms under which it will emerge from
Chapter 11 subject to confirmation by the Court.
Third Quarter 2009 Business Segment Highlights
* Consumer Performance Products revenues declined 5% or
$6 million compared with the third quarter of 2008 due to
reduced sales volume primarily driven by cooler and wetter
weather than normal in the northeastern and mid-western
regions of the United States, some weakness in demand
attributed to economic conditions in both the United
States and Europe, and the deemphasizing of its
participation in the distribution channel which commenced
at the end of the second quarter of 2008. The volume
impact was partially offset by the benefit of price
increases. Operating profit on a managed basis increased
$3 million primarily due to the benefit of price
increases, partially offset by the impact from the
reduction in sales volume. On a GAAP basis, operating
profit increased $1 million.
* Industrial Performance Products revenues declined 30% or
$118 million driven primarily by reduced sales volume and
selling prices. All product lines saw reduced sales volume
year-over-year due to the recession. However, demand
showed some modest improvement compared to the first half
of 2009. Operating profit of $30 million on a managed
basis remained unchanged as lower raw material and energy
costs offset most of the margin loss on reduced volume and
selling prices. On a GAAP basis, operating profit
decreased $1 million.
* Crop Protection Engineered Products revenues declined 14%
or $14 million primarily due to lower sales volume.
Demand has been affected by lower agricultural commodity
prices and the impact of the reduced availability of
credit to growers. The reduction in sales in the second
and third quarters of 2009 has reduced the segment's plant
operating rates compared to 2008, resulting in higher
manufacturing costs. Operating profit decreased
$13 million primarily due to the impact of lower sales
volume and the resulting impact of unfavorable manufacturing
costs.
* Industrial Engineered Products revenues declined 34% or
$105 million primarily due to reduced sales volume.
Products sold to electronic, building and construction,
and consumer durable polymer applications showed the most
dramatic year-over-year reductions due to the impact of
the global recession. However, electronics demand has
shown progressive improvement since the spring and demand
from other industrial sectors has shown more modest
improvement in the third quarter of 2009 compared with the
first half of 2009. Operating profit decreased $5 million
from the third quarter of 2008 primarily due to lower
volume, partially offset by lower raw material and energy
costs.
* Corporate expense for the third quarter of 2009 was
$27 million compared with $24 million in the same quarter
last year. Corporate expense included amortization expense
related to intangibles of $11 million and $10 million for
the third quarters of 2009 and 2008, respectively. The
increase in corporate expense of $3 million was primarily
related to changes in estimates for environmental reserve
requirements.
Third Quarter Results - GAAP
* Revenue for the third quarter of 2009 was $681 million
compared with third quarter 2008 revenue of $924 million.
The decrease in revenue was attributable to reduced sales
volumes of $214 million primarily due to the impact of the
global recession, a reduction in selling prices of
$21 million and unfavorable foreign currency translation of
$8 million.
* Gross profit for the third quarter of 2009 was
$168 million, a decrease of $25 million compared with the
same quarter last year. Gross profit as a percentage of
sales increased to 25% in the quarter from 21% in the same
quarter last year. The decrease of $25 million in gross
profit was primarily due to a $53 million impact from
reduced volume and unfavorable product mix, $21 million
from reduced selling prices, $8 million from unfavorable
manufacturing costs (primarily due to lower plant
utilization) and $2 million from unfavorable foreign
currency impacts. These impacts were partially offset by
a $52 million decrease in raw material and energy costs
and a $7 million reduction in distribution costs.
* The operating profit for the third quarter of 2009 was
$34 million compared with an operating profit of $44 million
for the third quarter of 2008. The decrease in the
operating profit is primarily due to a $25 million
decrease in gross profit which was partially offset by a
$9 million decrease in depreciation and amortization
(primarily due to lower accelerated depreciation of
property, plant and equipment), a $3 million decrease in
selling, general and administrative and research and
development costs ("SGA&R") and a $3 million reduction in
other costs.
* Interest expense of $18 million in the third quarter of
2009 was $2 million lower than the same period in 2008.
Lower interest expense from unrecorded contractual
interest expense on unsecured debt as a result of the
Chapter 11 filing was partially offset by an increase due
to borrowings under the DIP Credit Facility.
* Other income, net was $7 million in the third quarter of
2009 compared with $4 million for the same quarter in
2008. The increase primarily reflects lower fees
associated with the termination of the Company's accounts
receivable financing facilities.
* Reorganization items, net of $20 million in the third
quarter of 2009 represent items realized or incurred by
the Company related to its reorganization under Chapter
11. Reorganization items, net includes professional fees
directly associated with the reorganization and the
impacts of reorganization initiatives for which Court
approval has been obtained or requested.
* Earnings from continuing operations for the third quarter
of 2009 was $12 million, or $0.05 per share, compared with
$11 million, or $0.05 per share, for the third quarter of
2008. The increase primarily reflects a $26 million
decrease in income tax expense; a $3 million increase in
other income, net; and a $2 million decrease in interest
expense; partially offset by $20 million in reorganization
items, net; and the $10 million decrease in operating
profit discussed above.
* The loss on sale of discontinued operations in the third
quarter of 2009 was $4 million, or $0.02 per share, which
represents an adjustment for a loss contingency related to
the sale of the OrganoSilicones business in July 2003.
* Net earnings attributable to Chemtura for the third
quarter of 2009 was $8 million, or $0.03 per share,
compared with net earnings of $11 million, or $0.05 per
share, for the third quarter of 2008.
Third Quarter Results - Managed Basis
* On a managed basis, third quarter 2009 gross profit was
$169 million, or 25% of net sales, as compared with third
quarter 2008 gross profit of $192 million, or 21% of net
sales. Decreases in raw material and energy costs were
the primary drivers of the increase in margin percentage.
* On a managed basis, third quarter 2009 operating profit
was $37 million as compared with third quarter 2008
operating profit of $57 million. The decrease in
operating profit primarily reflects the decrease in gross
profit due to lower sales volumes, partially offset by
lower depreciation and amortization expense, and SGA&R.
* The loss before income taxes on a managed basis in the
third quarter of 2009 and the earnings before income taxes
on a managed basis in the same period of 2008 exclude pre-
tax GAAP charges of $23 million and $13 million,
respectively. These charges are primarily related to
costs associated with the Chapter 11 reorganization;
accelerated depreciation of property, plant and equipment;
antitrust costs; loss on sale of businesses; impairment of
long-lived assets; pension curtailment and settlement
adjustments associated with international plans;
accelerated recognition of asset retirement obligations;
loss on disposal of assets; and the recovery of insurance
proceeds related to a facility fire.
* Chemtura's managed basis tax rate of 35% represents a
standard tax rate for the Company's core operations to
simplify comparison of underlying operating performance
during the course of the Chapter 11 proceedings. The
Company has chosen to apply this rate to pre-tax income on
a managed basis.
Cash Flows - GAAP
* Net cash provided by operating activities in the quarter
ended September 30, 2009, was $81 million as compared with
net cash provided by operating activities of $68 million
in the quarter ended September 30, 2008. Cash provided by
operations benefited from continuing efforts to reduce
working capital levels.
* The Company's remaining accounts receivable financing
facility was terminated in June 2009. The balance of
accounts receivable sold under the Company's accounts
receivable financing facilities was $103 million as of
December 31, 2008, and $313 million as of September 30,
2008.
* The reduction in proceeds from the sale of accounts
receivable was $36 million in the third quarter of 2008.
Excluding the effect of accounts receivable financing
facilities, net cash provided by operating activities for
the third quarter of 2009 was $81 million as compared with
$104 million in the third quarter of 2008. Payments for
professional fees associated with the reorganization
impacted cash provided by operating activities in the
third quarter of 2009.
* As of September 30, 2009, the Company's accounts
receivable balances before the sale of accounts receivable
were $471 million as compared with (before the sale of
accounts receivable) $539 as of June 30, 2009, and
$495 million as of December 31, 2008. The decrease was due
to the seasonal decrease in demand towards the end of the
quarter primarily in the Consumer Performance Products
segment.
* As of September 30, 2009, the Company's inventory balance
was $531 million as compared with $514 as of June 30, 2009,
and $611 million at December 31, 2008. The increase
versus June 30, 2009 was primarily due to foreign currency
translation partially offset by initiatives to reduce
inventory levels.
* Capital expenditures for the quarter ended September 30,
2009 were $7 million compared with $35 million in the same
period of 2008. The Company currently anticipates capital
spending of up to $60 million in 2009.
* With a continued focus on cash generation and decline in
seasonal working capital, the Company generated
$74 million in cash provided by operating activities net of
cash used in investing activities in the third quarter of
2009 compared with $22 million in the third quarter of
2008.
* The Company's total debt of $1,413 million as of
September 30, 2009, increased slightly as compared with
$1,402 as of June 30, 2009. As of September 30, 2009,
$1,159 million of total debt is classified as liabilities
subject to compromise. Cash and cash equivalents were
$228 million as of September 30, 2009, compared with $144 as
of June 30, 2009.
Chemtura Corporation, with 2008 sales of $3.5 billion, is a
global manufacturer and marketer of specialty chemicals, crop
protection and pool, spa and home care products. Additional
information concerning Chemtura is available at:
http://www.chemtura.com/
A full-text copy of Chemtura Corporation's Second Quarter 2009
Financial Results filed on Form 10-Q is available for free at:
http://tinyurl.com/yhyfr52
Chemtura Corporation and Subsidiaries
Unaudited Consolidated Balance Sheets
As of September 30, 2009
ASSETS
Current assets
Cash and cash equivalents $228,000,000
Accounts receivable 471,000,000
Inventories 531,000,000
Other current assets 224,000,000
--------------
Total current assets 1,454,000,000
Non-current assets
Property, plant & equipment 758,000,000
Goodwill 235,000,000
Intangible assets, net 485,000,000
Other assets 192,000,000
--------------
Total assets $3,124,000,000
==============
LIABILITIES & STOCKHOLDERS' EQUITY
Current liabilities
Short-term borrowings $252,000,000
Current portion of long-term debt 0
Accounts payable 128,000,000
Accrued expenses 241,000,000
Income taxes payable 26,000,000
--------------
Total current liabilities 647,000,000
Non-current liabilities
Long-term debt 2,000,000
Pension and post-retirement health care 172,000,000
Other liabilities 165,000,000
--------------
Total liabilities not subject to compromise 986,000,000
Liabilities subject to compromise 1,793,000,000
Stockholders' equity
Common stock 3,000,000
Additional paid-in capital 3,038,000,000
Accumulated deficit (2,393,000,000)
Accumulated other comprehensive loss (149,000,000)
Treasury stock (167,000,000)
--------------
Total Chemtura Corp. stockholders' equity 332,000,000
Non-controlling interest 13,000,000
Total stockholders' equity 345,000,000
--------------
Total liabilities and stockholders' equity $3,124,000,000
==============
Chemtura Corporation and Subsidiaries
Unaudited Consolidated Statements of Operations
For the quarter ended September 30, 2009
Net sales $681,000,000
Cost of goods sold 513,000,000
Selling, general and administrative 80,000,000
Depreciation and amortization 45,000,000
Research and development 9,000,000
Facility closures & severance 0
Antitrust costs 0
Loss on sale of business 0
Impairment of long-lived assets 0
Equity income 0
--------------
Operating income(loss) 34,000,000
Interest expense (18,000,000)
Other (expense)income, net 7,000,000
Reorganization items, net (20,000,000)
--------------
Income(Loss) before income taxes 3,000,000
Income tax benefit (expense) 9,000,000
--------------
Income from continuing operations 12,000,000
Loss on sale of discontinued operations (4,000,000
--------------
Net income(loss) 8,000,000
Less: Net income attributable to
non-controlling interest 0
--------------
Net income (loss) attributable to $8,000,000
Chemtura Corporation ==============
Chemtura Corporation and Subsidiaries
Unaudited Consolidated Statements of Cash Flows
For the six months ended September 30, 2009
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss ($204,000,000)
Adjustments to reconcile loss to cash
Loss on sale of business 0
Loss on sale of discontinued operations 4,000,000
Impairment of long-lived assets 97,000,000
Depreciation and amortization 132,000,000
Stock-based compensation expense 2,000,000
Reorganization items, net 24,000,000
Equity income 0
Changes in assets and liabilities, net (29,000,000)
--------------
Cash (used in)provided by operating activities 26,000,000
CASH FLOWS FROM INVESTING ACTIVITIES
Net proceeds from divestments $3,000,000
Payments for acquisitions, net (5,000,000)
Capital expenditures (23,000,000)
--------------
Net cash used in investing activities (25,000,000)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from DIP credit facility, net 250,000,000
(Payments on) proceeds from credit facility (44,000,000)
Proceeds from long-term borrowings 0
Payments on long-term borrowings (18,000,000)
(Payments on) proceeds from short-term borrowings (2,000,000)
Dividends paid 0
Payments for debt issuance costs (30,000,000)
Proceeds from exercise of stock options 0
--------------
Net cash provided by financing activities $156,000,000
CASH AND CASH EQUIVALENTS
Effect of exchange rates $3,000,000
--------------
Change in cash and cash equivalents 160,000,000
Cash and cash equivalents, beginning of period 68,000,000
--------------
Cash and cash equivalents, end of period $228,000,000
==============
About Chemtura Corp.
Based in Middlebury, Connecticut, Chemtura Corporation (CEM) --
http://www.chemtura.com/-- with 2008 sales of $3.5 billion, is a
global manufacturer and marketer of specialty chemicals, crop
protection products, and pool, spa and home care products.
Chemtura Corporation and 26 of its U.S. affiliates filed voluntary
petitions for relief under Chapter 11 on March 18, 2009 (Bankr.
S.D.N.Y. Case No. 09-11233). M. Natasha Labovitz, Esq., at
Kirkland & Ellis LLP, in New York, serves as bankruptcy counsel.
Wolfblock LLP serves as the Debtors' special counsel. The
Debtors' auditors and accountant are KPMG LLP; their investment
bankers are Lazard Freres & Co.; their strategic communications
advisors are Joele Frank, Wilkinson Brimmer Katcher; their
business advisors are Alvarez & Marsal LLC and Ray Dombrowski
serves as their chief restructuring officer; and their claims and
noticing agent is Kurtzman Carson Consultants LLC.
As of December 31, 2008, the Debtors had total assets of
$3.06 billion and total debts of $1.02 billion.
Bankruptcy Creditors' Service, Inc., publishes Chemtura
Bankruptcy News. The newsletter tracks the Chapter 11
proceedings undertaken by Chemtura Corp. and its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
CHEMTURA CORP: Proposes to Terminate Post-Employment Benefits
-------------------------------------------------------------
Chemtura Corp. and its units ask the Court for authority to modify
or terminate benefits provided under certain non-vested other
post-employment benefit or OPEB plans and programs.
Richard M. Cieri, Esq., at Kirkland & Ellis LLP, in New York,
relates that Debtors Chemtura Corp. and Great Lakes Chemical
Corporation or the "Sponsoring Debtors" face significant
liability for retiree health care obligations, including expense,
insurance premium reimbursement, partial reimbursement or subsidy
arrangements, and life insurance benefits. He notes that most of
the Sponsoring Debtors' OPEB obligations are legacy liabilities
because the obligations are owed under benefit plans or programs
that were originally established by their predecessor companies
and for the most part, relate to plants and facilities that are
no longer in operation.
As of October 29, 2009, the Sponsoring Debtors estimate that the
present value of the total accumulated postretirement benefit
obligations associated with the OPEB Plans is approximately
$86.6 million, and the aggregate cash cost to provide benefits
under the OPEB Plans will be approximately $45.6 million over the
next five years.
The Sponsoring Debtors provide OPEB to approximately 1,911
individuals under the OPEB Plans, and approximately 284 current
and former employees could become eligible for OPEB upon
attaining the applicable age and meeting the service eligibility
conditions under the plans.
A chart summarizing the OPEB Plans under which the Sponsoring
Debtors currently provide OPEB is available for free at:
http://bankrupt.com/misc/ChemOPEB.pdf
Providing OPEB is a significant financial obligation that strains
the Debtors' business operations and profitability, Mr. Cieri
points out. He tells the Court that after full and careful
deliberation, the Sponsoring Debtors have made the business
judgment that they must modify and in some cases, terminate the
OPEB Plans in order to minimize their current and future costs
associated with providing OPEB.
Mr. Cieri says that the Debtors' proposed actions are permitted
without the need for court authorization under both applicable
non-bankruptcy law and the Bankruptcy Code. However, the Debtors
have made their request out of a desire for caution, clarity and
transparency in the reorganization process. He clarifies that
the Debtors do not seek authority to modify, amend or terminate
the health and life insurance benefits provided before retirement
to employees currently employed by the Debtors, nor do the
Debtors seek to modify or terminate any vested OPEB benefits by
invoking Section 1114 of the Bankruptcy Code.
About Chemtura Corp.
Based in Middlebury, Connecticut, Chemtura Corporation (CEM) --
http://www.chemtura.com/-- with 2008 sales of $3.5 billion, is a
global manufacturer and marketer of specialty chemicals, crop
protection products, and pool, spa and home care products.
Chemtura Corporation and 26 of its U.S. affiliates filed voluntary
petitions for relief under Chapter 11 on March 18, 2009 (Bankr.
S.D.N.Y. Case No. 09-11233). M. Natasha Labovitz, Esq., at
Kirkland & Ellis LLP, in New York, serves as bankruptcy counsel.
Wolfblock LLP serves as the Debtors' special counsel. The
Debtors' auditors and accountant are KPMG LLP; their investment
bankers are Lazard Freres & Co.; their strategic communications
advisors are Joele Frank, Wilkinson Brimmer Katcher; their
business advisors are Alvarez & Marsal LLC and Ray Dombrowski
serves as their chief restructuring officer; and their claims and
noticing agent is Kurtzman Carson Consultants LLC.
As of December 31, 2008, the Debtors had total assets of
$3.06 billion and total debts of $1.02 billion.
Bankruptcy Creditors' Service, Inc., publishes Chemtura
Bankruptcy News. The newsletter tracks the Chapter 11
proceedings undertaken by Chemtura Corp. and its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
CHRYSLER LLC: New Chrysler Offers Buyout to 23,000 Hourly Workers
-----------------------------------------------------------------
Dow Jones Newswires' Jeff Bennett reports that Chrysler Group LLC
confirmed Saturday roughly 23,000 hourly workers will receive
buyout offers as Chrysler continues trimming jobs amid planned
plant closures and falling product demand.
Citing a statement by Chrysler, Mr. Bennett says employees have
until November 13 to accept the offer.
"Special programs are also being offered at factories that are
being closed as part of the bankruptcy process. The dates for
those programs vary," Mr. Bennett says.
Separation dates are at the discretion of the company, Mr. Bennett
adds.
About Chrysler LLC
Chrysler Group LLC, formed in 2009 from a global strategic
alliance with Fiat Group, produces Chrysler, Jeep(R), Dodge,
Mopar(R) and Global Electric Motors (GEM) brand vehicles and
products. With the resources, technology and worldwide
distribution network required to compete on a global scale, the
alliance builds on Chrysler's culture of innovation -- first
established by Walter P. Chrysler in 1925 -- and Fiat's
complementary technology -- from a company whose heritage dates
back to 1899.
Headquartered in Auburn Hills, Michigan, Chrysler Group LLC's
product lineup features some of the world's most recognizable
vehicles, including the Chrysler 300, Jeep Wrangler and Dodge Ram.
Fiat will contribute world-class technology, platforms and
powertrains for small- and medium-sized cars, allowing Chrysler
Group to offer an expanded product line including environmentally
friendly vehicles.
Chrysler LLC and 24 affiliates on April 30 sought Chapter 11
protection from creditors (Bankr. S.D.N.Y (Mega-case), Lead Case
No. 09-50002). Chrysler hired Jones Day, as lead counsel; Togut
Segal & Segal LLP, as conflicts counsel; Capstone Advisory Group
LLC, and Greenhill & Co. LLC, for financial advisory services; and
Epiq Bankruptcy Solutions LLC, as its claims agent. Chrysler has
changed its corporate name to Old CarCo following its sale to a
Fiat-owned company. As of December 31, 2008, Chrysler had
$39,336,000,000 in assets and $55,233,000,000 in debts. Chrysler
had $1.9 billion in cash at that time.
In connection with the bankruptcy filing, Chrysler reached an
agreement with Fiat SpA, the U.S. and Canadian governments and
other key constituents regarding a transaction under Section 363
of the Bankruptcy Code that would effect an alliance between
Chrysler and Italian automobile manufacturer Fiat. Under the
terms approved by the Bankruptcy Court, the company formerly known
as Chrysler LLC on June 10, 2009, formally sold substantially all
of its assets, without certain debts and liabilities, to a new
company that will operate as Chrysler Group LLC. Fiat has a 20
percent equity interest in Chrysler Group.
Bankruptcy Creditors' Service, Inc., publishes Chrysler Bankruptcy
News. The newsletter tracks the Chapter 11 proceedings of
Chrysler LLC and its debtor-affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
CIT GROUP: Seeks December 15 Extension for Schedules Filing
-----------------------------------------------------------
Section 521 of the Bankruptcy Code and Rule 1007(c) of the Federal
Rules of Bankruptcy Procedure requires the Debtors to file their
(i) schedules of assets and liabilities, (ii) schedules of
executory contracts and unexpired leases, and (iii) statements of
financial affairs within 15 days after the Petition Date.
Pursuant to Bankruptcy Rule 1007(a)(3), the Debtors are required
to file a list of all equity security holders within 15 days after
the Petition Date. Pursuant to Bankruptcy Rule 2002(d), unless
otherwise ordered by the Court, the Debtors are also required to
give notice of the commencement of their Chapter 11 cases to all
equity security holders.
By this motion, the Debtors ask the Court to:
(i) extend the 15-day period to file the Schedules through
December 15, 2009;
(ii) permanently waive the requirement to file the Schedules
upon confirmation of the contemporaneously filed
prepackaged Plan of Reorganization within the Proposed
Extension Period; and
(iii) waive the requirements to (y) file an Equity List, and (z)
provide the Equity Holders with the Notice of Commencement.
Gregg M. Galardi, Esq., at Skadden, Arps, Slate, Meagher & Flom
LLP, in New York, relates that due to the complexity and diversity
of their operations, the Debtors will be unable to complete their
Schedules and Statements by the current deadline imposed by
Bankruptcy Rule 1007. Moreover, the Extended Schedules Filing
Deadline is necessary because of:
-- the substantial burdens imposed on the Debtors' management
as of Petition Date;
-- the limited number of employees available to collect the
information; and
-- the competing demands upon those employees who must devote
their time to the Debtors' restructuring process.
Mr. Galardi explains that a debtor is required to file the
Schedules and Statements in order to permit parties-in-interest to
understand and assess its assets and liabilities and negotiate and
confirm a plan of reorganization. However, this primary
justification for requiring the filing of Schedules and Statements
does not exist in CIT Group's cases because the Debtors have
already negotiated a Plan of Reorganization and solicited votes
from voting parties, he points out.
In addition, requiring the Debtors to file the Schedules and
Statements would be duplicative and unnecessarily burdensome to
the Debtors' estates because the information that would be
contained in the Schedules and Statements is already available in
the Disclosure Statement accompanying the Plan, according to Mr.
Galardi.
CIT Group Inc. is a public company and, as of February 17, 2009,
had over 388 million outstanding shares of common stock, held by
approximately 75,000 holders of record and approximately
28.3 million outstanding shares of four classes of preferred
stock. Furthermore, the holders of the Common Stock change on a
daily basis through active trading on the New York Stock Exchange.
The preferred stock is also publicly traded. In this light, the
Debtors submit that preparing the Equity List and sending the
Notice of Commencement to all parties on the Equity List will be
burdensome, time consuming, expensive and serve little or no
beneficial purpose.
The Debtors will provide the parties on the Equity List with
notice of the bar date for filing proofs of claims and an
opportunity to assert their interests, in the event that they are
required to file proofs of interest. In this light, the Debtors
submit that the waiving the filing of an Equity List will not
prejudice the Equity Holders in the Debtors' cases.
A notice substantially similar to the Notice of Commencement will
be published in the global edition of the Wall Street Journal and
other publications. Moreover, Equity Holders will know of the
case through the financial press due to the high profile nature
and the businesses of the Debtors, Mr. Galardi maintains.
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.
CIT Group Inc. and affiliate CIT Group Funding Company of Delaware
LLC announced a Chapter 11 filing on November 1, 2009 (Bankr. D.
Del. Case No. 09-16565). 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 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. None of CIT's operating
subsidiaries, including CIT Bank, a Utah state bank, were ncluded
in the filings.
As of June 30, 2009, CIT Group had total assets of $71,019,200,000
against total debts of $64,901,200,000.
Bankruptcy Creditors' Service, Inc., publishes CIT Group
Bankruptcy News. The newsletter tracks the Chapter 11 proceedings
of CIT Group Inc. (http://bankrupt.com/newsstand/or 215/945-7000)
CIT GROUP: Updated Chapter 11 Case Summary & Creditors' Lists
-------------------------------------------------------------
Lead Debtor: CIT Group, Inc.
505 Fifth Avenue
New York, NY 10017
Tel: (212) 771-0505
http://www.cit.com/
Bankruptcy Case No.: 09-16565
Debtor-affiliate filing separate Chapter 11 petition:
Entity Case No.
------ --------
CIT Group Funding Company of Delaware LLC 09-16566
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/
Chapter 11
Petition Date: November 1, 2009
Bankruptcy Court: U.S. Bankruptcy Court for the
Southern District of New York
Debtors' Counsel: J. Gregory Milmoe, Esq.
Gregg M. Galardi, Esq.
J. Gregory St. Clair, Esq.
Skadden, Arps, Slate, Meagher & Flom LLP
Four Times Square
New York, NY 10036
Tel: (212) 735-3000
Fax: (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
Tel: (866) 967-1786
U.S. Trustee: Paul Schwartzberg
Office of the United States Trustee
33 Whitehall Street, 21st Floor
New York, NY 1004-2111
Tel: 212-510-0500
Fax: 212-668-2255
http://www.usdoj.gov/ust/r02/
Total Assets as of June 30, 2009: $71,019,200,000
Total Debts as of June 30, 2009: $64,901,200,000
A. List of CIT Group's 75 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Edward J. Bagley Expansion Term $7,500,000,000
Bank of America N.A. Facility
as administrative and
collateral agent
1455 Market Street
5th Floor CA5-701-05-19
San Francisco, CA 94103
Attn: Charles Graber
Tel: 415-436-3495
The Bank of New York Retail Bonds $3,154,378,531
as Trustee
101 Barclay St., FL 8W
New York, NY 10286
Tel: 212-495-1764
Canada Sr. Unsecured Notes Guarantee $2,144,000,000
as paying agent/trustee
Attn: Larry O'Brien
Vice President
The Bank of New York Mellon
101 Barclay Street, 8W
New York, NY 10286
Tel: 212-815-5995
Citibank, NA Bank Debt $2,100,933,533
as administrative agent 0.94% due 2010
Attn: AnneMarie Pavco
2 Penns Way STE 200
Newcastle, DE 19720
Tel: 303-233-3900
Goldman Sachs Guarantee $1,934,565,000
Swap Agreement
Goldman Sachs International
Attn: Credit Derivatives
Middle Office, 85 Broad St.
New York, NY 10004
Tel: 212-357-0167
The Bank of New York Bond 7.63% $1,318,245,100
as trustee due 2012
101 Barclay St., FL 8W
New York, NY 10286
Tel: 212-495-1784
The Bank of New York Bond 12.00% $1,199,946,308
as trustee due 2018
101 Barclay St., FL 8W
New York, NY 10286
Tel: 212-495-1784
The Bank of New York Bond 4.25% $1,108,787,348
as trustee due 2011
101 Barclay St., FL 8W
New York, NY 10286
Tel: 212-495-1784
ABN AMRO Bank (ECA) 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 2010
101 Barclay St., FL 8W
New York, NY 10286
Tel: 212-495-1784
Citibank, NA Bank Debt $1,000,406,379
as administrative agent 0.64% due 2011
Attn: AnneMarie Pavco
2 Penns Way STE 200
Newcastle, DE 19720
Tel: 303-233-3900
The Bank of New York Bond 5.50% $827,716,320
as trustee due 2014
101 Barclay St., FL 8W
New York, NY 10286
Tel: 212-495-1784
The Bank of New York Bond 6.10% $778,899,131
as trustee due 2067
101 Barclay St., FL 8W
New York, NY 10286
Tel: 212-495-1784
The Bank of New York Bond 4.25% $763,458,333
as trustee due 2010
101 Barclay St., FL 8W
New York, NY 10286
Tel: 212-495-1784
The Bank of New York Bond 4.25% $757,968,750
as trustee due 2010
101 Barclay St., FL 8W
New York, NY 10286
Tel: 212-495-1784
The Bank of New York Bond 5.60% $750,466,667
as trustee due 2011
101 Barclay St., FL 8W
New York, NY 10286
Tel: 212-495-1784
The Bank of New York Bond 1.61% $737,337,807
as trustee due 2011
101 Barclay St., FL 8W
New York, NY 10286
Tel: 212-495-1784
The Bank of New York Bond 1.65% $736,835,548
as trustee due 2013
101 Barclay St., FL 8W
New York, NY 10286
Tel: 212-495-1784
The Bank of New York Bond 4.65% $701,318,362
as trustee due 2016
101 Barclay St., FL 8W
New York, NY 10286
Tel: 212-495-1784
The Bank of New York Bond 5.00% $697,968,594
as trustee due 2014
101 Barclay St., FL 8W
New York, NY 10286
Tel: 212-495-1784
The Bank of New York Bond 3.80% $686,456,753
as trustee due 2012
101 Barclay St., FL 8W
New York, NY 10286
Tel: 212-495-1784
The Bank of New York Bond 5.00% $679,530,263
as trustee due 2015
101 Barclay St., FL 8W
New York, NY 10286
Tel: 212-495-1784
The Bank of New York Bond 5.00% $679,026,281
as trustee due 2014
101 Barclay St., FL 8W
New York, NY 10286
Tel: 212-495-1784
The Bank of New York Bond 1.35% $669,540,307
as trustee due 2011
101 Barclay St., FL 8W
New York, NY 10286
Tel: 212-495-1784
The Bank of New York Bond 1.17% $655,261,289
as trustee due 2012
101 Barclay St., FL 8W
New York, NY 10286
Tel: 212-495-1784
The Bank of New York Bond 5.13% $640,992,932
as trustee due 2014
101 Barclay St., FL 8W
New York, NY 10286
Tel: 212-495-1784
The Bank of New York Bond 5.50% $631,825,555
as trustee due 2016
101 Barclay St., FL 8W
New York, NY 10286
Tel: 212-495-1784
The Bank of New York Bond 4.25% $623,192,878
as trustee due 2015
101 Barclay St., FL 8W
New York, NY 10286
Tel: 212-495-1784
The Bank of New York Bond 5.40% $612,420,551
as trustee due 2016
101 Barclay St., FL 8W
New York, NY 10286
Tel: 212-495-1784
The Bank of New York Bond 5.80% $558,240,883
as trustee due 2011
101 Barclay St., FL 8W
New York, NY 10286
Tel: 212-495-1784
The Bank of New York Bond 5.65% $554,796,498
as trustee due 2017
The Bank of New York Bond 5.20% $512,855,556
as trustee due 2010
The Bank of New York Bond 4.13% $510,197,917
as trustee due 2009
The Bank of New York Bond 5.15% $510,018,361
as trustee due 2017
The Bank of New York Bond 5.38% $502,558,669
as trustee due 2010
The Bank of New York Bond 5.40% $487,432,480
as trustee due 2013
The Bank of New York Bond 5.40% $486,611,953
as trustee due 2012
The Bank of New York Bond 1.31% $474,905,979
as trustee due 2010
The Bank of New York Bond 5.85% $394,459,709
as trustee due 2016
Computershare Trust Bond 4.72% $373,709,471
Co. of Canada due 2011
100 University Ave., 11th Fl.
Toronto, ON M5J 2Y1
Tel: (416)263-9200
The Bank of New York Bond 5.80% $317,542,406
as trustee due 2036
The Bank of New York Bond 6.00% $310,566,105
as trustee due 2036
The Bank of New York Bond 6.88% $310,312,500
as trustee due 2009
Citibank China Facility Guarantee $295,016,602
due 2010
Citibank (China) Co., Ltd.
Shanghai Branch
34F Citigroup Tower
Attn: Alpha Wang
No. 33 Hua Yuan Qiao Road
Lu Jia Zui Finance and Trade Zone
Shanghai 200120, China
Tel: (8621)28966000
The Bank of New York Bond 1.01% $290,928,481
as trustee due 2012
The Bank of New York Bond 1.32% $280,245,695
as trustee due 2011
Australian Sr. Guarantee $272,161,338
Unsecured Notes
20 Bridge Street
Sydney NSW 2000
Australia
The Bank of New York Bond 7.75% $261,266,984
as trustee due 2012
Mizuho Corporate Bank, Bond 0.90% $223,164,091
NY as trustee due 2010
1251 Avenue of the Americas
New York, NY 10020
Tel: (212) 282-3000
The Bank of New York Bond 2.83% $222,686,764
as trustee due 2036
The Bank of New York Bond 7.75% $203,028,312
as trustee due 2015
The Bank of New York Bond 0.77% $150,073,024
as trustee due 2010
The Bank of New York Bond 1.55% $115,119,454
as trustee due 2011
The Bank of New York Bond 0.85% $113,066,780
as trustee due 2009
Mizuho Corporate Bank, Ltd. Bond 1.42% $100,043,399
as trustee due 2011
Paying Agency Mandate Bond 0.49% $97,541,455
Paying Agent: Louis-Philippe due 2010
Marineau, LL.B. Professional
Corporate Trust
Computershare
1500 University St., Suite 700
Montreal, Quebec H3A 3S8
Tel: (514) 982-7888
The Bank of New York Bond 1.48% $65,731,240
as trustee due 2011
The Bank of New York Bond 0.57% $50,008,014
as trustee due 2017
Paying Agency Mandate Bond 2.75% $49,631,218
due 2010
The Bank of New York Bond 0.92% $34,463,483
as trustee due 2016
JPMorgan Chase Bank Derivative $7,574,178
National Association Mark-to-Market
270 Park Avenue, 41st Floor Balance as of
New York, NY 10017-2070 10/22/09
Tel: (212) 270-6000
Attn: Legal Department-
Derivatives Practice Group
The Bank of New York Guarantee $5,000,000
as trustee
The Bank of New York Mellon Guarantee $5,000,000
as trustee
Global Corporate Trust
ABS Client Services
101 Barclay St., 4W
New York, NY 10286
Tel: (212) 815-5539
Banco de Credito Facility Guarantee $2,504,092
Carrera 7 No. 27-18
Bogota, Colombia
Fax: (571)640-1032
Jeffrey D. Simon Unpaid Severance $1,794,750
190 Knightsbridge Road
Washington, NJ 07069
Bancolumbia Facility Guarantee $1,268,379
Calle 50 No. 51 66
Piso 7
Medellin, Colombia
Tel: (574) 510-8866
Sun Life as trustee Guarantee $1,233,757
Paying Agent: Donna Kutchcoski
Sun Life Financial
227 King Street
South Waterloo
Ontario N2J 4C5
Tel: (519) 888-2703
Mindtree Consulting Limited Vendor $1,100,000
15 Independence Blvd., #410
Warren, NJ 07059
Tel: (908) 604-8080
Lawrence A. Marsiello Unpaid severance $976,560
76 Shore Road
Cold Spring
Harbor, NY 11724
Mercer Human Resource Vendor $600,000
Consulting, Inc.
44 Whippany Road
Morristown, NJ 07962
Tel: (973) 401-5050
Market WSO Corporation Vendor $600,000
13455 Noel Rd., Suite 1100
LB # 22
Dallas, TX 75240
Tel: (972) 560-4420
Timothy Bennet Unpaid severance $443,750
132 Old Kings HWY
Wilton, CT 06897
Buck Consultants, LLC Vendor $400,000
One North Dearborn
Suite 1400
Chicago, IL 60602-4336
Tel: (312) 846-3000
Adecco USA Inc. Vendor $400,000
175 Broad Hollow Rd.
Melville, NY 11747
Tel: (631) 844-7800
Prudential Insurance Vendor $265,000
of America
One Corporate Drive
Shelton, CT 06484
Tel: (888) 778-2888
B. List of Delaware Funding's 4 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Bank of America N.A. Guarantee $7,500,000,000
Administrative and
Collateral Agent
(Expansion Term Facility)
901 Main Street
Dallas, TX 75202-3714
Attn: Richard Piland
Tel: 214-209-0987
The Bank of New York Bond $1,015,500,001
(Trustee) 0.938% Due 2010
101 Barclay St., FL 8W
New York, NY 10286
Tel: 212-495-1784
The Bank of New York Bond $671,651,840
(Trustee) 7.625%, due 2012
The Bank of New York Bond $500,560,245
(Trustee) 12%, due 2018
B. List of Debtors' Equity Security Holders
Eric Mandelbaum, senior vice president and deputy general counsel
of CIT Group, Inc., discloses that three companies beneficially
own in excess of 5% of any class of CIT voting stock as of
December 31, 2008. The Companies' ownerships are based upon
reports they filed on Schedule 13G with the U.S. Securities and
Exchange Commission on or before February 15, 2009, Mr. Mandelbaum
says.
Beneficial Amount & Nature Percentage of
Owner of Ownership Common Stock
---------- --------------- -------------
FMR LLC 37,631,875 9.90%
82 Devonshire Street
Boston, MA 02109
Brandes Investment Partners, LP 28,465,717 9.70%
11988 EI Camino Real
Suite 500
San Diego, CA 92130
Franklin Mutual Advisors LLC 21,504,101 5.70%
101 John F. Kennedy
Parkway
Short Hills, NJ 07078-2789
FMR reports sole voting power over 967,721 shares and sole
dispositive power over 37,361,875 shares, which the Company
reported on February 17, 2009. FMR's beneficial ownership
includes 5,758,011 common shares relating to its right to convert
its 1,456,765 shares of CIT Group Inc. 8.75% Non-Cumulative
Perpetual Convertible Preferred Stock, Series C to common shares
at an exchange ratio of 3.9526 shares of common for each share of
Convertible Preferred Stock.
Brandes reports shared voting power over 24,925,110 shares and
shared dispositive power over 28,465,717 shares. Franklin Mutual,
on the other hand, reports sole voting power over 21,504,101
shares and sole dispositive power over 21,504,101 shares,
according to Mr. Mandelbaum.
The petition was signed by Robert J. Ingato, executive vice
president and general counsel of CIT Group, Inc.
Bankruptcy Creditors' Service, Inc., publishes CIT Group
Bankruptcy News. The newsletter tracks the Chapter 11 proceedings
of CIT Group Inc. (http://bankrupt.com/newsstand/or 215/945-7000)
CIT GROUP: Bankruptcy May Erase Taxpayer, Shareholder Stakes
------------------------------------------------------------
According to Bloomberg News, the U.S. Treasury Department said the
government probably won't recover much, if any, of the $2.3
billion in taxpayer money that went to CIT.
The lender, which funds about 1 million businesses such as Dunkin'
Brands Inc. and Eddie Bauer Holdings Inc., plans to exit court
protection next month after bondholders voted in favor of a
"prepackaged" plan.
"Short term, it's going to cause some difficulties for startups
and smaller borrowers,'' said Jean Everett, a partner at Hiscock &
Barclay LLP focusing on financial institutions and lending. "CIT
lent across so many sectors, it's sort of difficult to predict how
it'll affect each sector."
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.
CIT Group Inc. and affiliate CIT Group Funding Company of Delaware
LLC announced a Chapter 11 filing on November 1, 2009 (Bankr. D.
Del. Case No. 09-16565). 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 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. None of CIT's operating
subsidiaries, including CIT Bank, a Utah state bank, were ncluded
in the filings.
As of June 30, 2009, CIT Group had total assets of $71,019,200,000
against total debts of $64,901,200,000.
Bankruptcy Creditors' Service, Inc., publishes CIT Group
Bankruptcy News. The newsletter tracks the Chapter 11 proceedings
of CIT Group Inc. (http://bankrupt.com/newsstand/or 215/945-7000)
CITIGROUP INC: To Issue EUR1.5-Bil. of 7.375% Fixed Rate Notes
--------------------------------------------------------------
Citigroup Inc. intends to issue EUR1,500,000,000 of 7.375% Fixed
Rate Senior Notes due June 2014 under the Programme for the
issuance of Euro Medium-Term Notes, Series B. The debt is not
guaranteed under the Federal Deposit Insurance Corporation's
Temporary Liquidity Guarantee Program.
Terms of the Euro Note are available at no charge at:
http://ResearchArchives.com/t/s?4805
Citigroup also filed documents with the Securities and Exchange
Commission regarding Citigroup Funding Inc.'s offering of:
-- 580,000 Buffer Notes Based Upon the Dow Jones Industrial
AverageSM Due November 4, 2011, at $10.00 per Note
See Offering Summary at:
http://ResearchArchives.com/t/s?47f7
See Pricing Supplement at:
http://ResearchArchives.com/t/s?47f8
-- 3,081,000 Equity LinKed Securities at 10% Per Annum Based
Upon the Common Stock of Schlumberger Limited Due
November 24, 2010, at $10.00 per ELKS
See Pricing Supplement at:
http://ResearchArchives.com/t/s?47f9
-- 4,436,000 Equity LinKed Securities at 9% Per Annum
Based Upon the Common Stock of Wells Fargo & Company
Due November 24, 2010, at $10.00 per ELKS
See Pricing Supplement at:
http://ResearchArchives.com/t/s?47fa
-- 500,000 Equity LinKed Securities, at 12.50% Per Annum,
Based Upon the Common Stock of American Express Company
Due May 3, 2010, at $10.00 per ELKS
See Offering Summary at:
http://ResearchArchives.com/t/s?47fb
See Pricing Supplement at:
http://ResearchArchives.com/t/s?4804
-- 1,502,000 2% Minimum Coupon Principal Protected Notes
Based Upon the Russell 2000(R) Index, Due November 3, 2014
$10 per Note
See Offering Summary at:
http://ResearchArchives.com/t/s?47fd
See Pricing Supplement at:
http://ResearchArchives.com/t/s?47fc
-- Upturn Notes Based Upon the Market VectorsTM Gold Miners
ETF Due 2011, at $10.00 per Note
See Offering Summary at:
http://ResearchArchives.com/t/s?47fe
-- 1,057,500 Principal Protected Notes Based Upon a Basket of
Currencies Due November 8, 2012
See Issuer Free Writing Prospectus at:
http://ResearchArchives.com/t/s?4800
See Pricing Supplement at:
http://ResearchArchives.com/t/s?47ff
-- 10,000 Callable Leveraged CMS Spread Principal Protected
Notes Due October 29, 2024, at $1,000 per Note
See Final Pricing Supplement at:
http://ResearchArchives.com/t/s?4801
-- Notes Based Upon a Basket of Currencies Due 2011, at
$10,000 per Note
See Offering Summary at:
http://ResearchArchives.com/t/s?4802
See Pricing Supplement at:
http://ResearchArchives.com/t/s?4803
About Citigroup
Based in New York, Citigroup Inc. (NYSE: C) --
http://www.citigroup.com/-- is organized into four major segments
-- Consumer Banking, Global Cards, Institutional Clients Group,
and Global Wealth Management. At June 30, 2009, Citigroup had
total assets of $1.84 trillion and total liabilities of
$1.69 trillion.
As reported in the Troubled Company Reporter on November 25, 2008,
the U.S. government entered into an agreement with Citigroup to
provide a package of guarantees, liquidity access, and capital.
The U.S. Treasury and the Federal Deposit Insurance Corporation
agreed to provide protection against the possibility of unusually
large losses on an asset pool of roughly $306 billion of loans and
securities backed by residential and commercial real estate and
other such assets, which will remain on Citigroup's balance sheet.
As a fee for this arrangement, Citigroup issued preferred shares
to the Treasury and FDIC. The Federal Reserve agreed to backstop
residual risk in the asset pool through a non-recourse loan.
Citigroup, the third-biggest U.S. bank, received $52 billion in
bailout aid. Other bailed-out banks, including Bank of America
Corp., Wells Fargo & Co., have pledged to repay TARP money.
JPMorgan Chase & Co., Goldman Sachs Group Inc. and Morgan Stanley,
repaid TARP funds in June.
Citigroup is one of the banks that, according to results of the
government's stress test, need more capital.
CLIFFSIDE AT DES MOINES: Case Summary & 2 Largest Unsec. Creditors
------------------------------------------------------------------
Debtor: Cliffside at Des Moines, LLC
121 Lakeside Avenue, Suite 100B
Seattle, WA 98122
Bankruptcy Case No.: 09-39052
Chapter 11 Petition Date: October 30, 2009
Court: United States Bankruptcy Court
District of Oregon
Debtor's Counsel: William M. Parker, Esq.
6950 SW Hampton #330
Tigard, OR 97223
Tel: (503) 858-8980
Email: bill-parker@msn.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $100,001 to $500,000
According to the schedules, the Company has assets of at least
$1,068,000, and total debts of $238,917.
A full-text copy of the Debtor's petition, including a list of its
2 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/orb09-39052.pdf
The petition was signed by Bradley R. Marshall, manager of the
Company.
CONTINENTAL AIRLINES: To Issue $644,437,000 of 2009-2 EETCs
-----------------------------------------------------------
Continental Airlines Inc. filed documents with the Securities and
Exchange Commission in connection with its plan to offer
$644,437,000 of 2009-2 Pass Through Trusts Pass Through
Certificates, Series 2009-2, in two classes: Class A and B.
Final
Pass Expected
Through Principal Interest Distribution Price to
Certificates Amount Rate Date Public(1)
------------ --------- -------- ------------ --------
Class A $527,625,000 7.250% Nov. 10, 2019 100%
Class B $116,812,000 9.250% May 10, 2017 100%
Continental initially planned to issue $579,273,000 of EETCs.
A separate trust will be established for each class of
certificates. The proceeds from the sale of certificates will
initially be held in escrow, and interest on the escrowed funds
will be payable semiannually on May 10 and November 10, commencing
May 10, 2010. The trusts will use the escrowed funds to acquire
equipment notes. The equipment notes will be issued by
Continental Airlines and will be secured by eight Boeing aircraft
currently owned by Continental and nine new Boeing aircraft
scheduled for delivery from January to June 2010. Payments on the
equipment notes held in each trust will be passed through to the
holders of certificates of such trust.
Interest on the equipment notes will be payable semiannually on
each May 10 and November 10 after issuance. Principal payments on
the equipment notes are scheduled on May 10 and November 10 in
certain years, beginning on November 10, 2010.
The Class A certificates will rank senior to the Class B
certificates.
Natixis S.A., acting through its New York Branch, will provide a
liquidity facility for the Class A and B certificates, in each
case in an amount sufficient to make three semiannual interest
payments.
The Joint Structuring Agents and Joint Bookrunners are Morgan
Stanley, Goldman, Sachs & Co., and Credit Suisse.
The underwriters will purchase all of the certificates if any are
purchased. The aggregate proceeds from the sale of the
certificates will be $644,437,000. Continental will pay the
underwriters a commission of $9,666,555. Delivery of the
certificates in book-entry form only will be made on or about
November 10, 2009.
The certificates will not be listed on any national securities
exchange.
A copy of the updated prospectus supplement dated October 29 is
available at no charge at http://ResearchArchives.com/t/s?480d
A copy of the free writing prospectus is available at no charge
at http://ResearchArchives.com/t/s?480e
About Continental Airlines
Continental Airlines Inc. (NYSE: CAL) --
http://www.continental.com/-- is the world's fifth largest
airline. Continental, together with Continental Express and
Continental Connection, has more than 2,500 daily departures
throughout the Americas, Europe and Asia, serving 133 domestic and
134 international destinations. With more than 41,000 employees,
Continental has hubs serving New York, Houston, Cleveland and
Guam, and together with its regional partners, carries
approximately 63 million passengers per year.
Continental ended the third quarter of 2009 with $2.54 billion in
unrestricted cash, cash equivalents and short-term investments.
At September 30, 2009, Continental had $12.5 billion in total
assets against total current liabilities of $4.26 billion, long-
term debt and capital leases of $5.29 billion, deferred income
taxes of $180 million, accrued pension liability of $1.36 billion,
accrued retiree medical benefits of $241 million, and other
liabilities of $806 million; against stockholders' equity of
$446 million.
* * *
As reported by the Troubled Company Reporter on September 4, 2009,
Standard & Poor's Ratings Services lowered its issue-level ratings
on all senior unsecured debt of Continental to 'CCC+' from 'B-'
and revised the recovery ratings on certain unsecured debt issues,
excluding industrial revenue bonds, to '6' from '5'. At the same
time, S&P affirmed its 'B' corporate credit rating and secured
debt ratings on Continental.
The ratings on Continental's unsecured debt are based principally
on declining aircraft values caused by the global aviation
downturn. This could result in reduced asset protection for
unsecured creditors if Continental were to file for bankruptcy.
Continental continues to carry Moody's Investors Service's B2
corporate family and Fitch Ratings' 'B-' Issuer Default Rating and
'CC/RR6' from 'CCC/RR6' senior unsecured rating.
COREL CORP: S&P Downgrades Corporate Credit Ratings to 'B-'
-----------------------------------------------------------
Standard & Poor's Ratings Services said it lowered its long-term
corporate credit ratings on Ottawa-based packaged software
provider Corel Corp. to 'B-' from 'B'. S&P also lowered the
issue-level rating on the company's senior secured credit facility
by one notch to 'B-' from 'B'. The '3' recovery rating on the
debt is unchanged.
At the same time, S&P placed the ratings on CreditWatch with
negative implications.
"We lowered the ratings on Corel and put them on CreditWatch
because of two credit concerns," said Standard & Poor's credit
analyst Madhav Hari. "First, S&P is concerned about Corel's near-
term liquidity and financial flexibility given that it might not
comply with its debt leverage covenant governing its credit
facilities for the quarter ended Nov. 30, 2009," Mr. Hari added.
Specifically, given weak market conditions and likely incremental
costs related to the company's privatization bid (discussed
below), Standard & Poor's projects fiscal 2009 fourth-quarter
EBITDA ending Nov. 30 to be weaker, and absent a further reduction
of debt (likely from existing cash), Corel would be in violation
of its debt leverage covenant of 2.75x. Notwithstanding a
possible cure for a potential covenant violation in the next few
quarters (by debt reduction or an equity cure), Standard & Poor's
remains concerned about Corel's liquidity in the medium term given
ongoing operational weakness, the reduced level of available cash,
and step-downs of financial covenants governing its secured bank
debt.
"The second concern relates to the uncertainty about the company's
ultimate ownership, capitalization, and strategy given the
unsolicited bid by Cayman Islands-based Corel Holdings L.P. on
Oct. 28, 2009, to acquire all of Corel's common shares outstanding
that it doesn't already own," Mr. Hari continued.
The holding company will acquire the remaining shares (or about
32% of Corel) for a price of US$3.50 per share or approximately
US$31 million. The bid creates additional near-term uncertainty
regarding the company's governance and strategy, and could be a
source of distraction for Corel's management as well as increased
expenses relating to the privatization. In addition, the
CreditWatch listing reflects S&P's lack of sufficient information
about Corel Holdings L.P. including its existing assets,
operations, and capital structure. Standard & Poor's notes that
should CHLP succeed in its efforts to privatize Corel, CHLP's
financial policy and capital structure would become germane to the
ratings of 100%-owned subsidiary Corel.
CHLP is controlled by an affiliate of San Francisco-based private
equity investment company Vector Capital Corp. CHLP has indicated
that its offer is conditional upon, among other things, a number
of Corel's common shares representing at least a majority of the
aggregate number of the common shares outstanding (excluding the
common shares beneficially owned by CHLP and its affiliates) being
validly tendered and not withdrawn on, or before, the expiration
of the offer. In response to the bid, Corel has announced that
the directors who were mandated by its board of directors to act
as the board with respect to all matters related to a possible
transaction with Vector Capital will, in consultation with their
financial and legal advisors, review and evaluate the tender
offer. A response from the Corel board is expected within 10
business days. Vector's tender offer is set to expire Nov. 25,
2009.
Standard & Poor's will likely resolve the CreditWatch listing once
S&P has had an opportunity to fully evaluate the measures Corel's
management has taken to improve its financial flexibility, and to
evaluate the outcome of the privatization transaction, including a
review of the new owners' strategy.
COTT CORP: Posts $13.9 Million Net Income for Q3 2009
-----------------------------------------------------
Cott Corporation said revenue was $404.9 million for the third
quarter ended September 26, 2009, as compared to $420.5 million
for the same period in 2008, a decrease of 3.7%. Excluding the
impact of foreign exchange, revenue increased 1.1%. Operating
income increased to $26.9 million, as compared to an operating
loss of $90.5 million. Net income was $13.9 million, or $0.18 per
share, as compared to a net loss of $87.6 million, or $1.25 per
share.
"Cott's performance in the third quarter highlights the benefit of
our continued focus on costs, operating efficiencies, margins and
cash generation, while, at the same time, continuing to provide
superior quality and service to our retail customers and their
consumers. This is our third consecutive quarter of year-over-
year profit growth," commented Cott's Chief Executive Officer,
Jerry Fowden. "As the largest private label soft drink producer,
we have a strong platform on which to capitalize on the consumer
shift toward value and to be the preferred provider for all of our
retailer partners," added Mr. Fowden.
"During the quarter, strong revenue growth in our U.K. operation
was offset by the impact of foreign exchange and a more
competitive environment in North America. Despite increased
promotional activity by the national brands, our gross margin
approached the upper end of our expectation. Our continued
emphasis on improving customer relationships, reducing operating
costs, and optimizing capital expenditures has resulted in
increased cash generation, a stronger balance sheet and
significantly improved liquidity," commented Cott's Chief
Financial Officer, Neal Cravens.
"Having achieved three consecutive quarters of improved
performance and a stronger balance sheet we can now turn more of
our attention to new business development. We've had some recent
successes with new and existing customers. We expect to see the
volume impact of these successes starting in 2010," continued
Fowden.
Third Quarter 2009 Segment Highlights:
-- North America beverage case volume declined 4.1% to
140.8 million cases. Revenue decreased 3.3%, or 2.4%
excluding the impact of foreign exchange. North America
operating profit increased to $16.1 million from an
operating loss of $27.6 million on continued operating
cost reductions and SG&A savings, including the ongoing
benefits of the Company's plan to refocus on private
label.
-- U.K. beverage case volume increased 9.0% to 48.3 million
cases, reversing a trend of year-over-year declines in the
first half of 2009. Revenue was essentially flat during
the quarter but increased 15.3% excluding the impact of
foreign exchange. The significant growth in revenue in the
U.K. in local currency was attributable to a combination
of volume growth, improved product mix and pricing.
-- Mexico beverage case volume declined 18.3% to 5.8 million
cases as a result of ongoing difficult economic conditions
in that market and the implementation of specific
initiatives to tighten our credit policy and stabilize the
business. While challenging conditions remain in the
Mexican market, signs of improvement are emerging,
including progress on reducing costs, improving financial
controls, and winning new business that should benefit
2010 volumes.
-- Royal Crown International concentrate volumes increased
1.1% to 54.7 million cases, primarily due to the timing of
customer order patterns. Revenue increased 9.4% to
$5.8 million, primarily due to improved product mix and
pricing.
As of September 26, 2009, Cott had $878.2 million in total assets
against $496.4 million in total liabilities.
As of June 27, 2009, Cott had $927.6 million in total assets and
$609.5 million in total liabilities.
A full-text copy of Cott's earnings release is available at no
charge at http://ResearchArchives.com/t/s?47f1
A full-text copy of Cott's quarterly report on Form 10-Q is
available at no charge at http://ResearchArchives.com/t/s?47f2
About Cott Corporation
Cott Corporation (NYSE:COT; TSX:BCB) is one of the world's largest
non-alcoholic beverage companies and the world's largest retailer
brand soft drink company. With roughly 2,800 employees, the
Company operates bottling facilities in the United States, Canada,
the United Kingdom and Mexico. Cott markets non-alcoholic beverage
concentrates in over 50 countries around the world.
On July 28, 2009, Standard & Poor's Ratings Services raised the
Company's debt rating on its 8% senior subordinated notes to CCC
from CCC-. Cott's corporate family rating was upgraded to B- from
CCC+. On September 3, 2009, Moody's upgraded Cott's corporate
family rating to B3 from Caa1 and the rating on the Notes to Caa1
from Caa2. The speculative grade liquidity rating was affirmed at
SGL-3.
COTT CORP: Berry Plastics Issues $620MM New Notes to Fund Deal
--------------------------------------------------------------
Cott Corporation said revenue was $404.9 million for the third
quarter ended September 26, 2009, as compared to $420.5 million
for the same period in 2008, a decrease of 3.7%. Excluding the
impact of foreign exchange, revenue increased 1.1%. Operating
income increased to $26.9 million, as compared to an operating
loss of $90.5 million. Net income was $13.9 million, or $0.18 per
share, as compared to a net loss of $87.6 million, or $1.25 per
share.
"Cott's performance in the third quarter highlights the benefit of
our continued focus on costs, operating efficiencies, margins and
cash generation, while, at the same time, continuing to provide
superior quality and service to our retail customers and their
consumers. This is our third consecutive quarter of year-over-
year profit growth," commented Cott's Chief Executive Officer,
Jerry Fowden. "As the largest private label soft drink producer,
we have a strong platform on which to capitalize on the consumer
shift toward value and to be the preferred provider for all of our
retailer partners," added Mr. Fowden.
"During the quarter, strong revenue growth in our U.K. operation
was offset by the impact of foreign exchange and a more
competitive environment in North America. Despite increased
promotional activity by the national brands, our gross margin
approached the upper end of our expectation. Our continued
emphasis on improving customer relationships, reducing operating
costs, and optimizing capital expenditures has resulted in
increased cash generation, a stronger balance sheet and
significantly improved liquidity," commented Cott's Chief
Financial Officer, Neal Cravens.
"Having achieved three consecutive quarters of improved
performance and a stronger balance sheet we can now turn more of
our attention to new business development. We've had some recent
successes with new and existing customers. We expect to see the
volume impact of these successes starting in 2010," continued
Fowden.
THIRD QUARTER 2009 PERFORMANCE SUMMARY
Revenue declined 3.7% (excluding the impact of foreign exchange,
revenue increased 1.1%).
Gross margin increased 450 basis points to 15.8% of sales, as
compared to 11.3%. Higher average selling prices per beverage
case compared to last year and substantially lower operating costs
contributed to the higher gross margin percentage in the third
quarter.
Selling, general and administrative ("SG&A") expenses declined to
9.2% of sales from 10.1%. SG&A expenses included $2.8 million of
severance costs incurred in the third quarter of 2009.
Operating income was $26.9 million, as compared to an operating
loss of $90.5 million. The results for the third quarter of 2008
included $95.7 million of restructuring charges and asset
impairments.
Cott's income tax expense was $0.9 million, as compared to an
income tax benefit of $12.2 million.
THIRD QUARTER 2009 SEGMENT HIGHLIGHTS
North America beverage case volume declined 4.1% to 140.8 million
cases. Revenue decreased 3.3%, or 2.4% excluding the impact of
foreign exchange. North America operating profit increased to
$16.1 million from an operating loss of $27.6 million on continued
operating cost reductions and SG&A savings, including the ongoing
benefits of the Company's plan to refocus on private label.
U.K. beverage case volume increased 9.0% to 48.3 million cases,
reversing a trend of year-over-year declines in the first half of
2009. Revenue was essentially flat during the quarter but
increased 15.3% excluding the impact of foreign exchange. The
significant growth in revenue in the U.K. in local currency was
attributable to a combination of volume growth, improved product
mix and pricing.
Mexico beverage case volume declined 18.3% to 5.8 million cases as
a result of ongoing difficult economic conditions in that market
and the implementation of specific initiatives to tighten our
credit policy and stabilize the business. While challenging
conditions remain in the Mexican market, signs of improvement are
emerging, including progress on reducing costs, improving
financial controls, and winning new business that should benefit
2010 volumes.
Royal Crown International concentrate volumes increased 1.1% to
54.7 million cases, primarily due to the timing of customer order
patterns. Revenue increased 9.4% to $5.8 million, primarily due
to improved product mix and pricing.
Third Quarter Results Conference Call
Cott Corporation was scheduled to host a conference call on
October 29, 2009, at 9:00 a.m. EDT, to discuss third quarter
results, which can be accessed as follows:
North America: (877) 407-8214
International: (201) 689-8031
A live audio webcast will be available through the Company's
website at http://www.cott.com. The earnings conference call will
be recorded and archived for playback on the investor relations
section of the website for a period of two weeks following the
event.
About Cott Corp.
Cott Corporation (NYSE:COT; TSX:BCB) is one of the world's largest
non-alcoholic beverage companies and the world's largest retailer
brand soft drink provider. In addition to carbonated soft drinks,
Cott's product lines include clear, still and sparkling flavored
waters, juice-based products, bottled water, energy drinks and
ready-to-drink teas. Cott operates in five operating segments --
North America, United Kingdom, Mexico, Royal Crown International
and All Other, which includes its Asia reporting unit and
international corporate expenses. Cott closed its active Asian
operations at the end of fiscal year 2008.
As of June 27, 2009, Cott had $927.6 million in total assets and
$609.5 million in total liabilities.
* * *
As reported by the Troubled Company Reporter on September 7, 2009,
Moody's Investors Service upgraded Cott's Corporate Family Rating
and Probability of Default rating to B3 from Caa1, and the rating
on the $275 million senior sub notes due 2011 to Caa1 from Caa2.
The speculative grade liquidity rating was affirmed at SGL-3. The
rating outlook is stable.
CRYOPORT INC: To Restate Financial Report for June 2009 Quarter
---------------------------------------------------------------
The audit committee of the Board of Directors of CryoPort, Inc.,
upon the recommendation of management and after discussion with
the Company's independent registered public accounting firm, KMJ
Corbin and Company, concluded on October 26, 2009, that the
Company's interim consolidated financial statements contained in
its Quarterly Report on Form 10-Q for the period ended June 30,
2009, previously filed with the Securities and Exchange
Commission, will need to be restated and should no longer be
relied upon, and directed management to file an amended Quarterly
Report on Form 10-Q/A as soon as practicable containing restated
interim consolidated financial statements for the period ended
June 30, 2009.
The restatement relates to an error in the recording of a journal
entry during the quarter ended June 30, 2009, to reflect principal
conversions of portions of the Company's outstanding convertible
debentures that were originally issued in October 2007. The net
effect of the restatement will be an approximate $713,000 increase
in the Company's previously reported interest expense for the
quarter ended June 30, 2009 and a corresponding decrease to the
debt discount for such convertible debentures.
The Company will be filing the amended Quarterly Report on Form
10-Q/A for the quarter ended June 30, 2009, on Monday, November 2,
2009, which amended Quarterly Report contains more detailed
financial information regarding the effects of the restatement and
management's revised evaluations of the Company's disclosure
controls and procedures.
About Cryoport Inc.
Cryoport Inc. provides an innovative cold chain frozen shipping
system dedicated to providing superior, affordable cryogenic
shipping solutions that ensure the safety, status and temperature,
of high value, temperature sensitive materials. Cryoport has
developed a line of cost effective reusable cryogenic transport
containers capable of transporting biological, environmental and
other temperature sensitive materials at temperatures below zero
degrees centigrade. These dry vapor shippers are the first
significant alternative to using dry ice and achieve 10+ day
holding times compared to 1-2 day holding times with dry ice.
The Company has incurred recurring losses and negative cash flows
from operations since inception and has a working capital deficit
of $3,693,015 and a cash and cash equivalents balance of $249,758
at March 31, 2009. Management has estimated that cash on hand,
including cash borrowed under convertible debentures issued in the
first quarter of fiscal 2010, will be sufficient to allow the
Company to continue its operations only into the third quarter of
fiscal 2010. In its June 30, 2009 report, KMJ Corbin & Company
LLP, the Company's outside auditors, said these matters raise
substantial doubt about the Company's ability to continue as a
going concern.
As of March 31, 2009, the Company had $1,572,556 in total assets
against $6,348,460 in total liabilities, resulting in $4,775,904
in stockholders' deficit.
On September 17, 2009, CryoPort entered into an Amendment to
Debentures and Warrants, Agreement and Waiver with Enable Growth
Partners LP, Enable Opportunity Partners LP, Pierce Diversified
Strategy Master Fund LLC, Ena, and BridgePointe Master Find Ltd.,
who are the Holders the Company outstanding Original Issue
Discount 8% Senior Secured Convertible Debentures dated
September 27, 2007, and Original Issue Discount 8% Secured
Convertible Debentures dated May 30, 2008, as such Debentures and
Warrants have been amended to date. The effective date of the
Amendment is September 1, 2009.
The purpose of the Amendment was to restructure the Company's
obligations under the outstanding Debentures to reduce the amount
of the required monthly principal payment and temporarily defer
the commencement of monthly principal payments -- which was
scheduled to commence September 1, 2009 -- and ceases the
continuing interest payments for a period time.
CUNNINGHAM BROADCASTING: Amends Agreements With Sinclair
--------------------------------------------------------
Sinclair Broadcast Group, Inc., on October 8, 2009, entered into a
non-binding memorandum of understanding, as amended, with
Cunningham Broadcasting Corporation, the Company's local marketing
agreement partner in six markets.
In accordance with the terms of the MOU, agreements to amend or
restate the agreements between Cunningham and the Company were
entered into on October 28, 2009:
(i) the LMAs;
(ii) option agreements to acquire Cunningham stock; and
(iii) certain acquisition or merger agreements relating to
television stations owned by Cunningham.
The amendments or restatements were made pursuant to the
agreements:
(i) the Master Agreement between the Company (and its
subsidiaries) and Cunningham (and its subsidiaries),
which, among other things, amended the LMAs;
(ii) those certain Amended and Restated Voting and Non-Voting
Capital Stock Option Agreements between the Company and
several trusts that own capital stock of Cunningham; and
(iii) those certain Amended and Restated Asset Purchase
Agreements pertaining to the Cunningham Stations.
All of the Cunningham Agreements will be non-binding until the
close of business on the date the Company successfully consummates
the tender offers for the Convertible Notes. If the tender offers
are not successfully consummated, the Cunningham Agreements shall
never take effect and each agreement intended to be amended or
restated by such applicable Cunningham Agreement will remain in
full force and effect.
The Cunningham Agreements have these material terms:
-- Cunningham has the right to terminate the APAs upon a
"change of control" of the Company, which will occur if
David, Frederick, Duncan and Robert Smith no longer own or
control at least 51% of the voting power of the Company;
-- If Cunningham files for bankruptcy protection under
Chapter 11 of the United States Bankruptcy Code, it will
not seek to reject the LMAs or the APAs in a bankruptcy
proceeding until such time as Cunningham and the Company
have had a reasonable time to negotiate, in good faith,
mutually agreeable amendments to such LMAs and APAs;
-- The LMAs, the Option Agreements, and the APAs will
terminate on July 1, 2016, provided that the Company will
have three options to extend the term, each option for an
additional five-year term;
-- In consideration of the new terms of the LMAs and other
agreements and the extension options, beginning on
January 1, 2010, and ending on July 1, 2012, the Company
will be obligated to pay Cunningham the sum of
approximately $29.1 million in 10 quarterly installments
of $2.75 million and one quarterly payment of
approximately $1.6 million, which amounts will be used to
pay off Cunningham's bank credit facility and which
amounts will be credited toward the purchase price for
each Cunningham Station, in accordance with a specified
allocation, that is acquired by the Company pursuant to
any of the Option Agreements or APAs or Cunningham's put
option applicable to such Cunningham Station -- Purchase
Price Credit Payments. An additional $3.9 million,
approximately, will be paid in two installments on July 1,
2012, and October 1, 2012, as an additional LMA fee, in
addition to the LMA Fee. Notwithstanding, if Cunningham
seeks to terminate the LMAs or the other agreements,
including in connection with a change in control, then the
Company will have the right to assign the LMAs or the
other agreements being terminated to a third party or
parties. The aggregate purchase price of the television
stations, $78.5 million as of September 30, 2009, will be
decreased by each Purchase Price Credit Payment as it is
paid, but, subject to below, will be increased by 6%
annually;
-- Beginning on October 1, 2012, and continuing thereafter
during the terms of the LMAs (or any extensions thereto),
the Company will be obligated to pay Cunningham an annual
LMA fee for the television stations equal to the greater
of (i) 3% of each station's annual net broadcast revenue
and (ii) $5.0 million (reduced proportionally if one or
more stations are purchased by the Company). The LMA Fee
will be subject to cost-of-living increases every five
years during the LMA term or any extension thereof. The
LMA Fee will be allocated as follows: (i) a portion equal
to 6% of the aggregate purchase price of the television
stations will be allocated to the payment of interest on
the remaining portion of the aggregate purchase price; and
(ii) the remainder as a fee to Cunningham for services
provided under the LMAs. After the $33 million payable to
Cunningham is paid in full, and as long as the LMA Fee is
paid each year, the aggregate purchase price will no
longer increase because the 6% interest due on the
aggregate purchase price will be paid in full each year as
indicated;
-- Cunningham has a put option, under which Cunningham may
require the Company to purchase the television stations on
July 1, 2016, which is the termination date of the initial
term of the LMAs or at the expiration of any renewal term.
The Company may assign its obligation to purchase the
television stations to a third party in the event that it
cannot acquire the television stations as a result of
Federal Communications Commission rules or for any other
reason. If Cunningham exercises its put option, the
purchase price for the Cunningham Station(s) acquired will
be the lesser of (i) the portion of the aggregate purchase
price in effect at such time allocable to such Cunningham
Station(s) and (ii) the appraised fair market value of
such Cunningham Station(s);
-- The prices under the Option Agreements to purchase
Cunningham stock have been adjusted to make them
consistent with the purchase prices and terms contained in
the APAs. In addition, in lieu of acquiring the assets of
any of the Cunningham Stations under the acquisition
agreements, the Company has an option to acquire for cash
all of the issued and outstanding stock of each subsidiary
of Cunningham, on terms and conditions substantially
similar in all material respects to the Option Agreements.
In the event the Company determines to acquire any of the
Cunningham Stations under any of the APAs, Cunningham may
cause the Company to acquire the stock of the Cunningham
subsidiary or subsidiaries that hold the Cunningham
Station rather than the assets of the Cunningham Station
pursuant to the APA. In addition, the APAs are subject to
a financing condition;
-- Cunningham will be obligated to pay liquidated damages to
the Company if Cunningham terminates any of the Option
Agreements and APAs for any reason other than a
termination resulting from the exercise of Cunningham's
put option or the Company's material breach, act or
omission. The liquidated damages will be in an amount
equal to the sum of all Purchase Price Credit Payments
made by the Company to Cunningham that have decreased the
aggregate purchase price of the Cunningham Stations plus
the additional LMA fee payments;
-- During the period that the Convertible Notes (or any notes
issued to refinance the Convertible Notes) are
outstanding, the Company will have consent rights (which
consent may not be unreasonably withheld or delayed) over
Cunningham's future borrowings, with the exception of (i)
borrowings for the acquisition by Cunningham of certain
television stations for which the Company has freely
assignable purchase option agreements that it cannot
currently exercise; and (ii) any amounts totaling less
than $10.0 million in the aggregate; and
-- Cunningham will purchase, upon the Company's request, the
Company's options to purchase five television stations
currently operated by the Company under LMAs with other
LMA partners, for a purchase price of $100 per station.
Once such options are purchased, Cunningham will be
obligated to immediately exercise the rights to acquire
such television stations, to the extent financing is
available on reasonable terms and conditions and subject
to FCC approval. Immediately following Cunningham's
acquisition of these stations, Cunningham will enter into
amended LMAs with the Company for each such television
station, whereby the Company will pay the operating cost
of each such station, plus an amount equal to the interest
paid by Cunningham to its lender(s) on borrowed funds for
Cunningham's acquisition of the stations, plus $400,000
per year per station. The Company will have the option to
acquire each of the television stations for an amount
equal to the amount paid by Cunningham for such station.
As reported by the Troubled Company Reporter on October 12, 2009,
Sinclair noted Cunningham is currently facing significant
financial and economic challenges. On June 5, 2009, the
administrative agent under Cunningham's bank credit facility
declared an event of default under the facility for failure to
timely deliver certain annual financial statements as required.
As of such date, a rate of interest of LIBOR plus 5%, which rate
includes a 2% default rate of interest, has been instituted on all
outstanding borrowings under the Cunningham bank credit facility.
On June 30, 2009, the default was waived and the termination date
of the Cunningham bank credit facility was extended to July 31,
2009, subject to certain conditions, including maintaining the
default interest rate.
On July 31, 2009, the Cunningham bank credit facility was further
extended to October 30, 2009. The extension requires that
Cunningham make $200,000 principal payments on its term loan
facility as of the first day of each of August, September and
October with the balance due on October 30, 2009. To delay or
avoid any potential bankruptcy of Cunningham, the lenders under
Cunningham's existing credit facility have indicated their
willingness to replace such credit facility with a new credit
facility, which is conditioned upon Cunningham's demonstration
that it can repay the outstanding principal balance due under the
facility within three years. As a result, Cunningham asked
Sinclair to restructure certain of its arrangements with Sinclair,
including the LMAs, which negotiations led to the execution of the
MOU.
About Sinclair Broadcast Group
Based in Baltimore, Maryland, Sinclair Broadcast Group, Inc.
(Nasdaq: SBGI) -- http://www.sbgi.net/-- one of the largest and
most diversified television broadcasting companies, currently owns
and operates, programs or provides sales services to 58 television
stations in 35 markets. The Company's television group reaches
approximately 22% of U.S. television households and includes FOX,
ABC, CBS, NBC, MNT and CW affiliates.
As of June 30, 2009, the Company had $1.60 billion in total assets
and $1.75 billion in total liabilities.
Sinclair carries Moody's Investors Service's Caa2 Corporate Family
Rating and Caa3 Probability of Default Rating; and Standard &
Poor's Ratings Services' 'B-' corporate credit rating.
About Cunningham Broadcasting
Cunningham Broadcasting Corporation is the owner-operator and FCC
licensee of WNUV-TV, Baltimore, Maryland; WRGT-TV, Dayton, Ohio;
WVAH-TV, Charleston, West Virginia; WTAT-TV, Charleston, South
Carolina; WMYA-TV (formerly WBSC-TV), Anderson, South Carolina;
and WTTE-TV.
DAMON'S GRILL: Files for Chapter 11 Bankruptcy to Protect Interest
------------------------------------------------------------------
Bret Thorn of Nation's Restaurant News reports that Damon's Grill
sought protection from its creditors under Chapter 11 in Western
Pennsylvania bankruptcy court to protect its stock from taken over
by creditor National City, a unit of PNC Financial Services Group
Inc.
Mr. Thorn, citing papers filed with the Court, said the Company
listed both assets and debts between $1 million and $10 million.
The Ccompany owes $800,000 to Southeast Capital of Charlotte,
N.C.; $535,578, Sysco Baltimore; $529,414, North Star Foodservice
of Twinsburg, Ohio; $153,000, Ping Wang Chiang of Cleveland; and
$144,795.000, Bahkta, the landlord of a corporate unit in
Lexington Park, Maryland, he adds.
The Company' sister brand, Max & Erma's, also filed for
bankruptcy.
Mr. Thorn relates that the financial transactions of the company
and Max & Erma's are intertwined, as the company's equity has been
used as collateral for a loan to Max & Erma's, which was in
default last year of $23 million. Max & Erma's was unable to pay
its defaulted loan due to last year's financial market meltdown
that dried up financing for the potential buyers for its corporate
restaurants.
Damon's Grill -- http://www.damons.com/-- operates restaurants in
Columbus, Ohio.
DECODE GENETICS: Promissory Note Maturity Date Moved to Monday
--------------------------------------------------------------
deCODE genetics, Inc., reports that effective October 26, 2009,
the secured promissory note dated September 11, 2009, among deCODE
genetics, MediChem Life Sciences, Inc., deCODE Biostructures, Inc.
and Saga Investments LLC, was further amended to increase the
principal amount thereof to $3,940,000.
deCODE genetics reports that effective October 21, the secured
promissory note was further amended to increase the principal
amount thereof to $3,820,000 and to provide that the maturity date
thereunder is November 2, 2009.
deCODE genetics did not make the scheduled October 15 interest
payment on its outstanding 3.5% Convertible Notes due 2011. In a
regulatory filing on Wednesday, the Company said failure to pay
the interest within 30 days after October 15 would be an event of
default under the terms of the indentures securing the notes.
In its quarterly report filed in August 2009, deCODE genetics said
$246,100,000 in total payments are due under its 3.5% Senior
convertible notes, including interest. deCODE genetics said
$8,050,000 in payments under the notes are due in less than a
year.
Going Concern Doubt
deCODE genetics' balance sheet at June 30, 2009, showed total
assets of $69.85 million and total liabilities of $313.92 million,
resulting in a stockholders' deficit of $244.07 million. As of
June 30, 2009, the Company had cash and cash equivalents of
$3.80 million, compared to $3.70 million at Dec. 31, 2008. In
early 2009 deCODE sold its ARS for $11.3 million in cash, and in
April it signed licensing agreements with Celera Corporation under
which it received an upfront payment and will receive royalties on
sales of Celera testing products and services incorporating deCODE
genetic risk markers. deCODE states it has sufficient resources
to fund operations only into the latter half of the third quarter.
The Company is simultaneously pursuing several options to ensure
sufficient funding to take it to the execution of strategic
options that can support the near- and longer-term viability of
our core business. Regardless, deCODE's planned operations
require immediate additional liquidity substantially in excess of
the amounts, raising substantial doubt about deCODE's ability to
continue as a going concern.
In deCODE's ongoing strategic review, deCODE was evaluating and
pursuing various alternatives aimed at focusing its business and
underpinning ongoing product development and commercialization in
its core business, including the sale of some or all of deCODE's
US medicinal chemistry and structural biology units.
About deCODE Genetics
deCODE genetics Inc. (Nasdaq: DCGN) -- http://www.decode.com/--
operates as a biopharmaceutical company that applies discoveries
in human genetics to develop drugs and diagnostics for common
diseases. The Company serves pharmaceutical companies,
biotechnology firms, pharmacogenomics companies, government
institutions, universities, and other research institutions
primarily in the United States, Europe, and internationally. The
Company was founded in 1996 and is headquartered in Reykjavik,
Iceland.
DELPHI CORP: Treasury Permits GM to Release $2.8BB From Funds
-------------------------------------------------------------
General Motors Company reports in a regulatory filing with the
Securities and Exchange Commission that in October 2009, the
United States Department of the Treasury granted a request for the
release of funds from escrowed proceeds of GM's credit agreement
with Treasury.
GM says roughly $1.7 billion was utilized to acquire a membership
interest in the new Delphi entity and roughly $1.1 billion was
expended in the acquisition of Delphi's global steering business,
certain domestic facilities and other related payments.
On July 10, 2009, GM entered into a credit agreement with
Treasury. Also on July 10, General Motors of Canada Limited, a
wholly owned subsidiary of GM, entered into the amended and
restated Canadian Loan Agreement with Export Development Canada, a
corporation wholly owned by the Government of Canada.
Proceeds of the UST Credit Agreement of $16.4 billion were
deposited in escrow and will be distributed to GM at its request
if these conditions are met: (1) the representations and
warranties GM made in the loan documents are true and correct in
all material respects on the date of the request; (2) GM is not in
default on the date of the request taking into consideration the
amount of the withdrawal request; and (3) the Treasury, in its
sole discretion, approves the amount and intended use of the
requested disbursement.
On July 7, 2009, C$1.0 billion was deposited into an escrow
account pursuant to an agreement between GM, EDC and an escrow
agent. In accordance with the terms of such agreement, the C$1.0
billion was released to GM on September 2, 2009.
On July 10, 2009, GM subscribed for additional common shares in
GMCL and paid the subscription price in cash. As required under
the Canadian Loan Agreement, C$3.0 billion of the subscription
price was deposited into an escrow account to fund certain of
GMCL's pension plans pending the completion of certain
preconditions. The preconditions were met, and on September 2,
2009, the release of C$3.0 billion from the escrow account was
approved by the Ontario and Federal governments.
On September 2, 2009, GMCL also contributed C$1.0 billion to its
pension plans from its unrestricted cash.
GM also reports that on October 27, 2009, it completed its
participation in an equity rights offering in GM Daewoo Auto &
Technology Co., a majority-owned and consolidated subsidiary, for
KRW491 billion (approximately $417 million). As a result of the
participation in the equity rights offering, GM's ownership
interest in GM Daewoo increased from 50.9% to 70.1%. Funds from
GM's unrestricted cash were utilized for this acquisition. GM
Daewoo plans to use the proceeds for general corporate purposes,
including funding the repayment of maturing debt.
GM has not finalized the accounting treatment for the
participation in GM Daewoo's equity rights offering.
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).
About Delphi Corp
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)
DELTA AIR: DP3's Motion to Form VEBA for Retirees' Health Coverage
------------------------------------------------------------------
The Delta Pilot Pension Preservation Organization, Inc. asks
Judge Cecilia G. Morris of the U.S. Bankruptcy Court for the
Southern District of New York to authorize formation of a
voluntary employee benefit association to offer health,
prescription drug, dental and vision care benefits to Delta pilot
retirees, their spouses and dependents that are eligible for the
80% federal subsidy in the form of the Health Coverage Tax
Credit.
DP3 is an organization representing thousands of retired Delta
pilots, organized to preserve and protect their pension and other
retiree benefits. Section 1114 Committees otherwise representing
the interests of pilot and non-pilot retirees on retiree benefit
issues in the Debtors' cases have dissolved under the terms of
Delta's Plan of Reorganization.
DP3's request will allow Delta Retirees and their dependants --
who have already lost much of their pensions -- to save,
collectively, millions of dollars through federal tax subsidies
for their critical health care benefits, and will also save Delta
considerable costs for many years into the future, Kelly A.
Woodruff, Esq., at Farella Braun Martel LLP, in San Francisco,
California, explains, on behalf of DP3.
Ms. Woodruff relates that the Health Coverage Tax Credit,
codified in Section 35(e)(1nternal Revenue Code, provides a
health care subsidy for those aged 55 or older who have had their
pension plans turned over to the Pension Benefit Guaranty
Corporation, the federal government agency that administers the
defined benefit pension plan termination insurance program
established by Title IV of the Employee Retirement Income
Security Act.
The tax credit now pays 80% of the cost of the Retirees' health
insurance and prescription drug premiums until they turn 65 and
become eligible for Medicare, Ms. Woodruff adds.
The HCTC, Ms. Woodruff says, is an unusual federal tax credit,
because instead of being paid to the taxpayer only at the end of
the year, the eligible Retiree can participate in the IRS HCTC
advanced payment program -- a monthly reimbursement program that
pays a subsidy each month for the healthcare benefits of eligible
retirees enrolled in qualified health insurance." Eligible
retirees are those aged at least 55 but not yet 65 receiving
payments from the PBGC.
"Qualified health insurance" under the statute includes, (i)
COBRA continuation coverage; (ii) coverage under state plans that
have been qualified in many states (but which are not available
in all states and which in many states provide only catastrophic
coverage of last resort with low benefits and high deductibles,;
and (iii) coverage under a benefit provided by a non-profit
voluntary employee benefit association that is either set up by a
Section 1114 retiree committee in a Chapter 11 case.
In connection with the VEBA Category, DP3 is seeking authority
for the formation of a VEBA that could offer a benefit eligible
for the 80% HCTC subsidy. Previously, during Delta's bankruptcy
case, Delta terminated the pilots' defined benefit pension plan
and turned that plan over to the PBGC. Delta did not terminate
the non-pilots' defined benefit pension plan, but many non-pilot
Delta retirees may still be eligible for the HCTC because their
pensions at a prior airline industry employer have been turned
over to the PBGC, Ms. Woodruff relates.
There are thousands of retired Delta pilots who are under 65
eligible for the HCTC, because of past financial incentives to
take early retirement and former regulations under the Federal
Aviation Authority, which until recently, prohibited pilots over
aged 60 in the cockpit, and effectively forced retirement at age
60.
The pilots who are at least 55 but not yet eligible for Medicare
are expensive to insure. Hence, an established VEBA will be able
to work with national vendors to get competitive quotes on a
program designed with the needs of the retirees in mind, Ms.
Woodruff tells Judge Morris.
The proposed formation of VEBA, according to Ms. Woodruff, would
be a separate tax-exempt corporation qualified under the IRS,
with directors initially appointed by DP3, for the purpose of
rolling out an HCTC-qualified benefit for eligible retirees,
their spouses, and dependents.
Currently, under the term sheet agreement between the pilot
Section 1114 Committee and Delta approved in the Bankruptcy Case,
Delta generally pays 0% of the health care premium costs for
pilots under age 60 who retired before June 1, 2006, and pays
only 50% of the health care premium costs for pilots aged 60
through 64 who retired before June 1, 2006, Ms. Woodruff notes.
To make the program most effective, DP3 asks the Court to
authorize cooperation between Delta and DP3, including:
(1) providing historical loss information in connection with
the Pilot Retirees' current benefit plans;
(2) providing contact information for the pilot retirees,
solely for purposes of contacting them about the benefit
programs, under a confidentiality agreement that prohibits
the Pilot VEBA from using or sharing that information for
other purposes;
(3) designating of the over-65 benefit rolled out through the
VEBA as a "Delta affiliated program" for Pilot and Non
Pilot retirees 65 and older;
(4) agreeing that roll-out of the new Pilot VEBA Program will
be treated as a "life event" under Delta's current medical
plans; and
(5) agreeing that Pilot Retirees will continue to have the
ability to opt in and out of their medical plans during
the annual enrollment period each year.
About Delta Air Lines
With its acquisition of Northwest Airlines, Atlanta, Georgia-based
Delta Air Lines (NYSE: DAL) -- http://www.delta.com/or
http://www.nwa.com/-- became the world's largest airline
following merger with Northwest Airlines in 2008. From its hubs
in Atlanta, Cincinnati, Detroit, Memphis, Minneapolis-St. Paul,
New York-JFK, Salt Lake City and Tokyo-Narita, Delta, its
Northwest subsidiary and Delta Connection carriers offer service
to more than 376 destinations worldwide in 66 countries and serves
more than 170 million passengers each year. The merger closed on
October 29, 2008.
Northwest and 12 affiliates filed for Chapter 11 protection on
September 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930).
On May 21, 2007, the Court confirmed the Northwest Debtors'
amended plan. That amended plan took effect May 31, 2007.
Delta and 18 affiliates filed for Chapter 11 protection on
September 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923).
Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represented
the Delta Debtors in their restructuring efforts. On April 25,
2007, the Court confirmed the Delta Debtors' plan. That plan
became effective on April 30, 2007.
(Bankruptcy Creditors Service Inc. publishes Delta Air Lines
Bankruptcy News, http://bankrupt.com/newsstand/or 215/945-7000).
* * *
Delta Air Lines has $44,480,000,000 in assets against total debts
of $43,500,000,000 in debts as of June 30, 2009.
Delta Air Lines and Northwest Airlines carry a 'B/Negative/--'
corporate ratings from Standard & Poor's. They also continue to
carry 'B2' corporate family ratings from Moody's.
DELTA AIR: Has $161 Mil. Q3 Loss on Weak Revenues
-------------------------------------------------
In a Form 10Q filed with the U.S. Securities and Exchange
Commission, Delta Air Lines Inc. disclosed that for the
September 2009 quarter, the Company reported a net loss of
$161 million, which reflect significant weakness in the airline
revenue environment due to the global recession.
"Our loss for the quarter also includes an $83 million non-cash
loss on the extinguishment of debt, a $78 million charge for
merger-related items and a $51 million charge for employee
workforce reduction programs," according to Hank Halter, senior
vice president and chief financial officer at Delta.
Delta's total operating revenue declined $2.0 billion, or 21%, in
the September 2009 quarter on a 4% decrease in system capacity,
compared with the September 2008 quarter on a combined basis.
Passenger revenue accounted for $1.8 billion of the decrease.
Passenger revenue per available seat mile declined 18%, as a
result of a 19% decrease in passenger mile yield.
The decrease in passenger mile yield reflects (i) significantly
reduced demand, particularly in international markets, (ii) a
reduction in business demand, (iii) competitive pricing
pressures, and (iv) lower fuel surcharges due to the year-over-
year decline on fuel prices, Mr. Halter disclosed.
In addition, Mr. Halter said, volatile fuel prices continue to
represent a significant risk to Delta's business and the airline
industry as a whole.
"We continue to focus on disciplined spending, productivity
initiatives and accelerating Merger synergies. Our consolidated
operating cost per available seat mile . . . and fuel expense
increased 2% in the September 2009 quarter, compared to the
September 2008 quarter on a combined basis, on 4% lower capacity.
The increase primarily reflects an increase in pension expense
from a decrease in value in pension trust assets due to declines
in the financial markets," Mr. Halter told the SEC.
Senior Secured Exit Financing and Credit Facilities
In connection with Delta's emergence from bankruptcy in
April 2007, the Company entered into a senior secured exit
financing facility to borrow up to $2.5 billion. The Senior
Secured Exit Financing Facilities consist of a (i) $1.0 billion
first-lien revolving credit facility, (ii) a $600 million first-
lien synthetic revolving facility, and (iii) a $900 million
second-lien term loan facility.
During 2008, Delta borrowed the entire amount of the Exit
Revolving Facility. Borrowings under the First-Lien Facilities
are due in April 2012 and borrowings under the Second-Lien
Facility are due in April 2014. As of September 30, 2009, the
Senior Secured Exit Financing Facilities had an interest rate
ranging from 2.2% to 3.5% per annum.
Delta's obligations under the Senior Secured Exit Financing
Facilities are guaranteed by substantially all of its domestic
subsidiaries, including Northwest Airlines Corporation and
certain of its subsidiaries. The Senior Secured Exit Financing
Facilities and the related guarantees are secured by liens on
substantially all of our and the Guarantors' present and future
assets. The First-Lien Facilities are secured by a first
priority security interest in the Collateral. The Second-Lien
Facility is secured by a second priority security interest in the
Collateral.
According to Mr. Halter, in September 2009, Delta entered into a
first-lien revolving credit facility in the aggregate principal
amount of $500 million and a first-lien term loan facility in the
aggregate principal amount of $250 million and collectively with
the Revolving Facility, the "Senior Secured Credit Facilities."
The Senior Secured Credit Facilities are guaranteed by the
Guarantors and are secured by a first lien on the Company's
Pacific route authorities and certain related assets. Lenders
under the Senior Secured Credit Facilities and holders of the
Senior Secured Notes will have equal rights to payment and
collateral.
Borrowings under the Term Facility will be repaid in an amount
equal to 1% of the original principal amount of the term loans
annually, with the balance of the term loans due and payable in
September 2013. Borrowings under the Term Facility bear interest
at a variable rate equal to LIBOR or another index rate, in each
case plus a specified margin. As of September 30, 2009, the Term
Facility had an interest rate of 8.8% per annum.
In September 2009, Delta borrowed the entire amount of the
Revolving Facility, which matures in March 2013. Borrowings
under the Revolving Facility can be prepaid without penalty and
amounts prepaid can be re-borrowed. Borrowings under the
Revolving Facility bear interest at a variable rate equal to
LIBOR or another index rate, in each case plus a specified
margin. As of September 30, 2009, the Revolving Facility had an
interest rate of 9.4% per annum.
Senior Secured and Senior Second Lien Notes
In September 2009, Delta also issued $750 million of Senior
Secured Notes, which mature in September 2014 and have a fixed
interest rate of 9.5% per annum. The Company may redeem some or
all of the Senior Secured Notes at any time on or after Sept. 15,
2011, at specified redemption prices. Delta may also redeem the
Senior Second Lien Notes at any time on or after March 15, 2012.
If Delta sells certain of its assets or if it experiences
specific kinds of changes in control, the Company must offer to
repurchase the Senior Secured Notes and the Senior Second Lien
Notes.
Unregistered Sales of Equity Securities
and Use of Proceeds
In connection with the merger of Delta and Northwest Airlines
Corporation, Delta entered into agreements with the Air Line
Pilots Association, International and the Delta and Northwest
units of ALPA covering Delta and Northwest pilots to issue a
total of 49,619,919 shares of Delta common stock, 48,582,302 of
which Delta issued directly to the pilots in March 2009.
Pursuant to the Agreements, the remaining 1,037,617 shares that
Delta agreed to issue to or for the benefit of the pilots were
reserved to make distributions in respect of any data error
corrections and to pay fees and expenses incurred by ALPA related
to the allocation and distribution process, with the remaining
shares to be distributed to eligible pilots, Mr. Halter
explained.
To facilitate ALPA's payment of the outstanding expenses of the
financial advisors for the Delta and Northwest units of ALPA in
connection with these merger-related agreements, in September
2009 Delta issued, at ALPA's request, in connection with these
agreements, a total of 620,247 shares of Delta common stock to
the financial advisors. This issuance resulted in the
simultaneous reduction of the authorized shares in the Pilot
Share Reserve by 620,247 shares. The remaining shares in the
Pilot Share Reserve were distributed to the pilots.
"We issued the shares to the financial advisors in reliance upon
Section 4(2) of the Securities Act of 1933, as amended, because
these shares were issued in a private transaction," Mr. Halter
stated.
In addition, Delta withheld these shares of Delta common stock to
satisfy tax withholding obligations during the September 2009
quarter from certain distributions:
Average Total Shares Purchased
Price Paid As Part of Publicly
Period Total Shares Per Share Announced Programs
----------- ------------ ----------- ---------------
July 1-31, 2009 40,172 $5.86 40,172
August 1-31, 2009 44,717 $6.89 44,717
September 1-30, 2009 11,532 $7.30 11,532
------------ ---------------
Total 96,421 96,421
============ ===============
The maximum number of shares that may be purchased under certain
programs were withheld from employees to satisfy certain tax
withholding obligations due in connection with grants of stock
under Delta's 2007 Performance Compensation Plan and in
connection with Chapter 11 claims.
The 2007 Performance Compensation Plan and Delta's Plan of
Reorganization both provide for the withholding of shares to
satisfy tax obligations, and neither specify a maximum number of
shares that can be withheld, Mr. Halter explained.
Submission of Stockholder Proposals
To be considered for inclusion in the Delta proxy statement for
the 2010 annual meeting, Mr. Halter directed stockholder
proposals to be submitted in writing no later than 5:00 p.m.,
local time, on December 30, 2009, at:
Corporate Secretary
Delta Air Lines, Inc.
Dept. 981
P.O. Box 20574
Atlanta, Georgia 30320
The December 30, 2009 deadline supersedes the November 9, 2009
deadline contained in Delta's Proxy Statement for the 2009 Annual
Meeting, Mr. Halter clarified.
Updates on Legal Proceedings
In May, June and July, 2009, a number of purported class action
antitrust lawsuits were filed in the U.S. District Courts for the
Northern District of Georgia, the U.S. District Court for the
Middle District of Florida, and the District of Nevada against
Delta and AirTran Airways, alleging Delta and AirTran's
engagement in "collusive behavior" in violation of Section 1 of
the Sherman Act in November 2008.
The allegations are based on certain public statements made in
October 2008, by (i) AirTran concerning fees for the first
checked bag, (ii) Delta's imposition of a fee for the first
checked bag on November 4, 2008, and (iii) AirTran's imposition
of a similar fee on November 12, 2008. The Plaintiffs seek to
assert claims on behalf of an alleged class consisting of
passengers who paid the first bag fee after December 5, 2008, and
seek injunctive relief and unspecified treble damages.
All cases have been consolidated for pre-trial proceedings in the
Northern District of Georgia by the Multi-District Litigation
Panel, according to Mr. Halter.
In this regard, Delta insists that the allegations and related
claims "are without merit and are vigorously defending these
lawsuits."
In addition, Delta and Kenton County Airport Board and UMB Bank,
N.A., as trustee for certain Series 1992 Bonds entered into a
stipulation approved by the U.S. Bankruptcy Court for the
Southern District of New York, to restructure certain Delta's
lease and other obligations at the Cincinnati-Northern Kentucky
International Airport.
The Series 1992 Bonds include (i) the $419 million Kenton County
Airport Board Special Facilities Revenue Bonds, 1992 Series A,
$397 million of which were then outstanding; and (ii) the
$19 million Kenton County Airport Board Special Facilities Revenue
Bonds, 1992 Series B, $16 million of which were then outstanding,
Mr. Halter explained.
A small group of 1992 Bondholders challenged the settlement in
the U.S. District Court for the Southern District of New York,
which subsequently affirmed the Bankruptcy Court's approval of
the Settlement. The Objecting Bondholders appealed to the U.S.
Court of Appeals for the Second Circuit, which in February 2009
upheld the District Court's decision, and subsequently denied the
Objecting Bondholders' petition for a rehearing en banc. The
Objecting Bondholders have filed a petition for a writ of
certiorari with the U.S. Supreme Court.
Mr. Halter narrated that Delta is also a party to a litigation
involving its Family-Care Savings Plan, filed as an amended class
action complaint in the U.S. District Court for the Northern
District of Georgia against Delta. The Amended Complaint alleges
that Delta and its officers were fiduciaries of the Savings Plan
and breached their fiduciary duties under ERISA to the plaintiff
class by (i) allowing class members to direct their contributions
under the Savings Plan to a fund invested in Delta common stock,
and (ii) continuing to hold Delta's contributions to the Savings
Plan in the Company's common and preferred stock. The Amended
Complaint seeks damages unspecified in amount, but equal to the
total loss of value in the participants' accounts from September
2000 through September 2004 from the investment in Delta stock.
In July 2009, two parallel putative class actions were filed
against a number of Canadian, Asian, European, and U.S. carriers,
including Delta, in the Ontario Superior Court of Justice. Both
allege that the defendants colluded to fix the price of passenger
surcharges, in Canada-Asia and Canada-Europe markets. There are
no allegations in the Complaints -- which seeks $100 million in
damages -- regarding any specific act by Delta in relation to the
conspiracy.
"We believe the allegations against Delta [in the Litigations]
are without merit and intend to vigorously defend these cases,"
Mr. Halter affirmed.
A full-text copy of Delta's Second Quarter Financial Results is
available for free at http://ResearchArchives.com/t/s?47d5
DELTA AIR LINES, INC.
Unaudited Consolidated Balance Sheet
As of September 30, 2009
ASSETS
Current Assets:
Cash and cash equivalents $5,396,000,000
Short-term investments 92,000,000
Restricted cash and cash equivalents 478,000,000
Accounts receivable, net 1,469,000,000
Hedge margin receivable -
Expendable parts & supplies inventories, net 356,000,000
Deferred income taxes, net 291,000,000
Prepaid expenses and other 780,000,000
----------------
Total Current Assets 8,862,000,000
Property and Equipment, Net 20,658,000,000
Other Assets
Goodwill 9,778,000,000
Identifiable intangibles, net 4,864,000,000
Other noncurrent assets 691,000,000
----------------
Total Other Assets 15,333,000,000
----------------
Total Assets $44,853,000,000
================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current maturities of long-term debt $1,029,000,000
Air traffic liability 3,363,000,000
Accounts payable 1,483,000,000
Frequent flyer deferred revenue 1,535,000,000
Accrued salaries and related benefits 1,027,000,000
Hedge Derivatives liability 160,000,000
Taxes payable 540,000,000
Other accrued liabilities 457,000,000
----------------
Total Current Liabilities 9,594,000,000
Noncurrent Liabilities:
Long-term debt and capital leases 16,655,000,000
Pension, postretirement & related benefits 11,217,000,000
Frequent flyer deferred revenue 3,365,000,000
Deferred income taxes, net 1,861,000,000
Other noncurrent liabilities 1,261,000,000
----------------
Total noncurrent liabilities 34,359,000,000
Commitments and Contingencies
Stockholders' Equity:
Common stock:
Common stock at $0.00001 par value,
1,500,000,000 shares authorized,
789,122,254 shares issued Sept. 30, 2009 -
Additional paid-in capital 13,791,000,000
Accumulated deficit (9,820,000,000)
Accumulated other comprehensive loss (2,907,000,000)
Treasury stock, at cost, 9,600,453 shares
at Sept. 30, 2009 (164,000,000)
----------------
Total Stockholders' Equity 900,000,000
================
Total Liabilities and Stockholders' Equity $44,853,000,000
================
DELTA AIR LINES, INC.
Unaudited Consolidated Statements of Cash Flow
Nine Months Ended September 30, 2009
Net Cash Provided by Operating Actitivies $1,452,000,000
Cash Flows from Investing Activities:
Property and equipment additions:
Flight equipment (547,000,000)
Ground property and equipment (185,000,000)
Decrease in restricted cash & cash equivalents (124,000,000)
Redemption of short-term investments 121,000,000
Redesignation of cash equivalents -
Proceeds from sales of flight equipment 86,000,000
Other, net -
-----------------
Net Cash used in Investing Activities (649,000,000)
Cash Flows from Financing Activities:
Payments on long-term debt (2,056,000,000)
Proceeds from long-term obligations 2,472,000,000
Other, net (78,000,000)
-----------------
Net Cash Provided by Financing Activities 338,000,000
Net Increase (Decrease) in Cash & Equivalents 1,141,000,000
Cash & cash equivalents at
beginning of period 4,255,000,000
-----------------
Cash & cash equivalents at end of period $5,396,000,000
=================
About Delta Air Lines
With its acquisition of Northwest Airlines, Atlanta, Georgia-based
Delta Air Lines (NYSE: DAL) -- http://www.delta.com/or
http://www.nwa.com/-- became the world's largest airline
following merger with Northwest Airlines in 2008. From its hubs
in Atlanta, Cincinnati, Detroit, Memphis, Minneapolis-St. Paul,
New York-JFK, Salt Lake City and Tokyo-Narita, Delta, its
Northwest subsidiary and Delta Connection carriers offer service
to more than 376 destinations worldwide in 66 countries and serves
more than 170 million passengers each year. The merger closed on
October 29, 2008.
Northwest and 12 affiliates filed for Chapter 11 protection on
September 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930).
On May 21, 2007, the Court confirmed the Northwest Debtors'
amended plan. That amended plan took effect May 31, 2007.
Delta and 18 affiliates filed for Chapter 11 protection on
September 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923).
Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represented
the Delta Debtors in their restructuring efforts. On April 25,
2007, the Court confirmed the Delta Debtors' plan. That plan
became effective on April 30, 2007.
(Bankruptcy Creditors Service Inc. publishes Delta Air Lines
Bankruptcy News, http://bankrupt.com/newsstand/or 215/945-7000).
* * *
Delta Air Lines has $44,480,000,000 in assets against total debts
of $43,500,000,000 in debts as of June 30, 2009.
Delta Air Lines and Northwest Airlines carry a 'B/Negative/--'
corporate ratings from Standard & Poor's. They also continue to
carry 'B2' corporate family ratings from Moody's.
DELTA AIR: Objects to Ex-CFO Michelle Burns' Claims
---------------------------------------------------
M. Michele Burns served as Delta's chief financial officer from
August 16, 2000, to May 1, 2004. Prior to the termination of her
services at Delta, Ms. Burns negotiated with the Company the
terms of a continuing consulting arrangement, which was
memorialized by a letter agreement between the parties in May
2004.
Pursuant to the Consulting Agreement, Delta contracted to
continue to employ Ms. Burns as a consultant from May 1, 2004,
through May 1, 2009. Ms. Burns agreed to provide the services
to Delta's CFO with respect to any matter within her general area
of expertise as developed during her employment with Delta that
may from time to time arise during the consulting period, Timothy
E. Graulich, Esq., at Davis Polk & Wardwell, in New York related.
In exchange for the consulting services, Mr. Graulich continued,
Delta agreed to provide unlimited "positive space travel" to Ms.
Burns, through which she and her family could travel first class
on Delta or any Delta subsidiary or connection carrier free-of-
charge, anywhere in the world.
Notably, Lifetime Travel Benefits were available only to retired
Delta executives with 10 or more years of service. Because she
was neither retired nor did she have 10 years of service with
Delta, Ms. Burns would not have received the Lifetime Travel
Benefits were it not for the Consulting Agreement. As a result,
Delta sought to reject the Consulting Agreement in 2005,
according to Mr. Graulich.
Ms. Burns objected to the Rejection request, and insisted that
she had fully executed the Consulting Agreement. In 2006, Ms.
Burns filed Claim Nos. 6906, 6907, 6908, 6909, 6910, 6912, 6913,
6914, 6915, 6916, 6917, 6918, 6919, 6920, 6921, 6922, 6923, 6924
and 6925. The Claims each seek Lifetime Travel Benefits provided
for in the Agreement that was executed contemporaneously with Ms.
Burns' departure as Delta CFO.
Mr. Graulich explained that the Lifetime Travel Benefit component
of the Claims must be expunged pursuant to Section 502(b)(4) of
the Bankruptcy Code because Ms. Burns was an insider of Delta and
she did not perform any services under the Consulting Agreement
whatsoever. In addition, even were the Claims not subject to
expungement, they must be reduced pursuant to Section 502(b)(7)
of the Bankruptcy Code to the value of travel benefits for one
year.
Mr. Graulich further pointed out that the Claims also seek
indemnification and reimbursement for liabilities in connection
with a civil proceeding pending in the United States District
Court for the Northern District of Georgia, styled Dennis Smith,
Individually and on behalf of all others similarly situated v.
Delta Air Lines, Inc. et al. The ERISA litigation, however, "has
already been dismissed against Burns and each other non-Debtor
defendant," Mr. Graulich told Judge Morris.
To the extent any of the Claims are allowable, they must be
capped, pursuant to Section 502(b)(7) of the Bankruptcy Code at
the value of one year because the Consulting Agreement is a
terminated employment contract, Mr. Graulich insisted.
About Delta Air Lines
With its acquisition of Northwest Airlines, Atlanta, Georgia-based
Delta Air Lines (NYSE: DAL) -- http://www.delta.com/or
http://www.nwa.com/-- became the world's largest airline
following merger with Northwest Airlines in 2008. From its hubs
in Atlanta, Cincinnati, Detroit, Memphis, Minneapolis-St. Paul,
New York-JFK, Salt Lake City and Tokyo-Narita, Delta, its
Northwest subsidiary and Delta Connection carriers offer service
to more than 376 destinations worldwide in 66 countries and serves
more than 170 million passengers each year. The merger closed on
October 29, 2008.
Northwest and 12 affiliates filed for Chapter 11 protection on
September 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930).
On May 21, 2007, the Court confirmed the Northwest Debtors'
amended plan. That amended plan took effect May 31, 2007.
Delta and 18 affiliates filed for Chapter 11 protection on
September 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923).
Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represented
the Delta Debtors in their restructuring efforts. On April 25,
2007, the Court confirmed the Delta Debtors' plan. That plan
became effective on April 30, 2007.
(Bankruptcy Creditors Service Inc. publishes Delta Air Lines
Bankruptcy News, http://bankrupt.com/newsstand/or 215/945-7000).
* * *
Delta Air Lines has $44,480,000,000 in assets against total debts
of $43,500,000,000 in debts as of June 30, 2009.
Delta Air Lines and Northwest Airlines carry a 'B/Negative/--'
corporate ratings from Standard & Poor's. They also continue to
carry 'B2' corporate family ratings from Moody's.
DIAMOND CREEK: Emerges From Chapter 11 Bankruptcy Protection
------------------------------------------------------------
Michael Shaw, staff writer of Sacramento Business Journal, reports
that Diamond Creek Partners Ltd. has emerged from Chapter 11
bankruptcy with a deal allowing its Roseville development to move
forward just as homebuilders are again showing an interest in
land.
During its 16-month bankruptcy, Stephen Des Jardins, Mr. Shaw
relates, invested $7 million in infrastructure to ready its
remaining 131 single-family home lots for marketing as it
negotiated a plan with creditors.
According to the Troubled Company Reporter on May 26, 2008, the
bankruptcy filing was intended to stop its main secured lender,
Umpqua, from foreclosing on its 31-acre village project in
Roseville, California. Umpqua wanted to recover $26.9 million it
loaned to the Debtor. That loan already became due.
About Diamond Creek
Based in Roseville, California, Diamond Creek Partners Ltd.,
owned by Stephen Des Jardins, develops real estate property. The
company filed for Chapter 11 protection on May 25, 2008 (Bankr.
E.D. Calif. Case No. 08-25342). George C. Hollister, Esq.,
represents the Debtor in its restructuring efforts. In its
petition, the Debtor listed assets of between $50 million and
$100 million, and debts of between $1 million and $10 million.
DOLE FOOD: S&P Raises Corporate Credit Rating to 'B' From 'B-'
--------------------------------------------------------------
Standard & Poor's Ratings Services said that it raised its
corporate credit rating on produce and packaged food producer,
Dole Food Co. Inc. to 'B' from 'B-', and removed all ratings on
the company from CreditWatch with positive implications. The
outlook is stable. S&P had placed the ratings on CreditWatch on
Oct. 23, 2009, following Dole's announcement that it priced its
IPO.
Standard & Poor's also raised all issue-level ratings on Dole by
one notch, except for the rating on Dole's junior-lien senior
secured notes, which was raised by two notches to 'B+', one notch
higher than the corporate credit rating, from 'B-', due to an
improvement in the recovery rating for these notes. The recovery
ratings on these secured notes were revised to '2', indicating
S&P's expectation for substantial (70%-90%) recovery in the event
of a payment default, from '3'.
At the same time, S&P withdrew its ratings on Dole's $363 million
7.25% senior notes due 2010 following completion of the previously
disclosed redemption in September 2009. S&P also withdrew its
ratings on Dole Holding Co. and DHM Holdings, since those entities
have been eliminated.
Pro forma for recent debt repayment, total debt at Dole was about
$1.8 billion as of June 20, 2009.
"The upgrade reflects Dole's debt repayment and improved credit
measures and liquidity position following the close of its IPO,"
said Standard & Poor's credit analyst Alison Sullivan. Dole used
net proceeds of about $415 million from the IPO to repay debt,
including $54 million outstanding under its revolver, $130 million
to repay a portion of its $200 million 8.875% senior notes due
March 2011, $122 million (plus a $17 million prepayment penalty)
to redeem a portion of the $350 million 13.875% notes due March
2014, and $85 million to repay a portion of an affiliate's
$115 million loan (related to a hotel and wellness center) due
March 2010. Following the debt repayment, S&P estimate pro forma
total debt to EBITDA was about 5x for the 12 months ended June 20,
2009, compared with 5.7x total debt to EBITDA before the
transaction. Following successful completion of the IPO, S&P
believes Dole's liquidity profile has also improved. Dole next
maturity is for $70 million of notes due March 2011, and other
near-term maturities at affiliates were resolved.
"The ratings on Dole reflect its highly leveraged financial
profile and participation in the competitive, commodity-oriented,
and volatile fresh produce industry, which is subject to
seasonality, as well as political and economic risks," added Ms.
Sullivan.
Dole is one of the world's largest producers of bananas and
pineapples, and also a major marketer of packaged fruit products,
value-added packaged salads, and vegetables. The company has
leading market positions in several markets, including the No. 1
market share positions in bananas in North America and Japan, and
packaged fruit products in the U.S., and No. 2 market share in
packaged salad. Dole grows produce on company-owned or leased
land, and also sources it globally through arrangements with
independent growers. Despite Dole's defendable position, S&P
believes operating performance is susceptible to uncontrollable
factors such as global supply, world trade policies, political
risk, currency swings, weather, and disease.
Dole has reduced leverage and has a solid liquidity profile. S&P
expects credit measures to stay close to current levels, on
average, to maintain the stable outlook. S&P could lower the
rating if performance declines and/or covenant cushion
significantly weakens. An upgrade is unlikely in the near term,
but could occur if the company sustains its improved performance,
maintains a prudent financial policy, and sustains a rolling four-
quarter average leverage ratio of less than 5x. This could occur
in a scenario of 100 basis points EBITDA margin expansion, coupled
with flat revenue growth and pro forma debt levels, relative to
the 12 months ended June 20, 2009.
DOLLAR THRIFTY: To Close Common Stock Offering Today
----------------------------------------------------
Dollar Thrifty Automotive Group, Inc., has priced a public
offering of 5,750,000 shares of its common stock at a price to the
public of $19.25 per share. The underwriters will have a 30-day
option to purchase up to an additional 862,500 shares of common
stock from the Company. The offering is expected to close on
November 3, 2009, subject to customary closing conditions.
The Company intends to use the net proceeds from the offering,
which are expected to be approximately $105 million (without
giving effect to any exercise of the underwriters' option to
purchase additional shares), for general corporate purposes.
Goldman, Sachs & Co. and J.P. Morgan Securities Inc. are serving
as joint book-running managers for the offering.
The underwriters are:
Underwriters Number of Shares
------------ ----------------
Goldman, Sachs & Co. 2,300,005
J.P. Morgan Securities Inc. 2,300,005
Deutsche Bank Securities Inc. 383,330
Merrill Lynch, Pierce, Fenner & Smith 383,330
Scotia Capital (USA) Inc. 383,330
----------------
Total 5,750,000
A full-text copy of the Prospectus Supplement to Prospectus
dated October 26, 2009, is available at no charge at
http://ResearchArchives.com/t/s?4815
About Dollar Thrifty Automotive Group
Dollar Thrifty Automotive Group, Inc. -- http://www.dtag.com/,
http://www.dollar.com/and http://www.thrifty.com/-- is
headquartered in Tulsa, Oklahoma. The Company's brands, Dollar
Rent A Car and Thrifty Car Rental, serve value-conscious travelers
in over 70 countries. Dollar and Thrifty have over 600 corporate
and franchised locations in the United States and Canada,
operating in virtually all of the top U.S. and Canadian airport
markets. The Company's approximately 6,400 employees are located
mainly in North America, but global service capabilities exist
through an expanding international franchise network.
As of June 30, 2009, the Company had $2.58 billion in total assets
and $2.35 billion in total liabilities.
* * *
As reported in the Troubled Company Reporter on Oct. 26, 2009,
Standard & Poor's Ratings Services placed its long-term ratings,
including the 'CCC' corporate credit rating, on Tulsa, Oklahoma-
based Dollar Thrifty Automotive Group Inc. on CreditWatch with
positive implications.
DRILLING & BLASTING: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------------
Debtor: Drilling & Blasting Systems, Inc.
1695 Old Covington Road
Conyers, GA 30013
Bankruptcy Case No.: 09-88556
Chapter 11 Petition Date: October 28, 2009
Court: United States Bankruptcy Court
Northern District of Georgia (Atlanta)
Debtor's Counsel: Barbara Ellis-Monro, Esq.
Ellenberg, Ogier, Rothschild & Rosenfeld
170 Mitchell Street, SW
Atlanta, GA 30303
Tel: (404) 525-4000
Fax: (404) 526-8855
Email: bem@eorrlaw.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
A full-text copy of the Debtor's petition, including a list of its
20 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/ganb09-88556.pdf
The petition was signed by D. Brent Taylor, president of the
Company.
EARNEST UPCHURCH: Voluntary Chapter 11 Case Summary
---------------------------------------------------
Joint Debtors: Earnest L. Upchurch
Gena Upchurch
PO Box 1706
Quinlan, TX 75474
Bankruptcy Case No.: 09-37260
Chapter 11 Petition Date: October 29, 2009
Court: United States Bankruptcy Court
Northern District of Texas (Dallas)
Judge: Harlin DeWayne Hale
Debtors' Counsel: Joyce W. Lindauer, Esq.
Joyce W. Lindauer, Attorney at Law
8140 Walnut Hill Lane, Suite 301
Dallas, TX 75231
Tel: (972) 503-4033
Fax: (972) 503-4034
Email: courts@joycelindauer.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $500,001 to $1,000,000
The Debtors did not file a list of their 20 largest unsecured
creditors when they filed their petition.
The petition was signed by the Joint Debtors.
EDUCATION MANAGEMENT: S&P Raises Corporate Credit Rating to 'B+'
----------------------------------------------------------------
Standard & Poor's Ratings Services raised its corporate credit
rating on Pittsburgh, Pennsylvania-based Education Management LLC
to 'B+' from 'B'. S&P also raised its issue-level ratings on the
company's debt by one notch in conjunction with the corporate
credit rating upgrade. At the same time, S&P removed these
ratings from CreditWatch, where they were placed with positive
implications Sept. 23, 2009. The rating outlook is positive.
S&P's recovery ratings on the company's debt issues remain
unchanged.
"The ratings upgrade reflects Education Management's reduced debt
leverage following the repayment of about $316 million of its
senior subordinated notes with proceeds from its recent IPO," said
Standard & Poor's credit analyst Deborah Kinzer.
Pro forma for the debt repayment, the company's lease-adjusted
leverage as of June 30, 2009, improved to 4.6x, from 5.2x. The
positive rating outlook reflects S&P's expectation that Education
Management could reduce its leverage further over the coming year
through continued EBITDA growth.
The 'B+' rating reflects the company's still relatively high debt
leverage despite the repayment of most of its 10.25% senior
subordinated notes, limited discretionary cash flow, and
dependence on federal student loan programs. Its good business
position and geographic diversity in the highly fragmented and
competitive post-secondary education market are modest positives
that do not offset these risks.
Education Management operates 92 campuses in 28 states and one
Canadian province, offering programs in career-oriented
disciplines. About two-thirds of students are enrolled in
bachelor's, master's, and doctorate programs, with the remaining
one-third in associate's degree and certificate programs. The
company's cost structure is somewhat flexible because instructors
are not tenured and only about one-fourth are employed full time.
Enrollment has grown rapidly over the past several years,
reflecting positive demographic trends and student and employer
demand for career-oriented degrees. Annual double-digit gains in
same-school enrollment and tuition increases of about 5% have
resulted in EBITDA growth. Enrollment in online education
programs has also grown briskly, so that about 23% of total
enrolled students are now taking fully online programs. The
online education market is still developing and is subject to
intense competition and technological change.
EDWARD JOHN NAWOROL: Case Summary & 3 Largest Unsecured Creditors
-----------------------------------------------------------------
Debtor: Edward John Naworol
1610 Rolling Road
Bel Air, MD 21014
Bankruptcy Case No.: 09-31049
Chapter 11 Petition Date: October 30, 2009
Court: United States Bankruptcy Court
District of Maryland (Baltimore)
Judge: Nancy V. Alquist
Debtor's Counsel: Ronald J. Drescher, Esq.
Drescher & Associates
4 Reservoir Circle, Suite 107
Baltimore, MD 21208
Tel: (410)484-9000
Email: ecf@drescherlaw.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
A full-text copy of Mr. Naworol's petition, including a list of
his 3 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/mdb09-31049.pdf
The petition was signed by Mr. Naworol.
EGAIN COMMUNICATIONS: June 30 Balance Sheet Upside-Down by $4.1MM
-----------------------------------------------------------------
eGain Communications Corporation's consolidated balance sheets at
June 30, 2009, showed $18.6 million in total assets and
$22.7 million in total liabilities, resulting in a $4.1 million
total shareholders' deficit.
The Company's consolidated balance sheet at June 30, 2009, also
showed strained liquidity with $12.4 million in total current
assets available to pay $14.2 million in total current
liabilities.
The Company reported net income of $2.2 million for the year ended
June 30, 2009, compared with a net loss of $4.1 million for the
year ended June 30, 2008.
Total revenue, which consists of license revenue and support and
services revenue, was $33.2 million and $30.1 million in fiscal
years 2009 and 2008, respectively. License revenue was
$8.6 million and $6.6 million in fiscal years 2009 and 2008,
respectively. The increase was primarily due to the increase in
the average size of license transactions that included six
transactions totaling approximately $5.7 million.
Support and services revenue was $24.6 million and $23.5 million
in fiscal years 2009 and 2008, respectively. Hosting revenue
increased $733,000 in fiscal year 2009 from fiscal 2008 primarily
due to the increased size of new hosing contracts with larger
enterprises that included five new hosting contracts totaling over
$2.7 million that are recognized ratably over the contractual
term.
Maintenance and support revenue decreased $681,000 compared to
fiscal year 2008. Without the $1.1 million negative impact of the
U.S. dollar strengthening compared to the European currencies,
maintenance and support revenue would have increased by
approximately 5%, or $420,000, in fiscal year 2009. The increase
in fiscal year 2009 excluding the impact of currency fluctuations,
was primarily due to the increase in license sales.
Professional services revenue increased $1.0 million in fiscal
year 2009 compared to fiscal year 2008. The increase for the
twelve months ended June 30, 2009, was primarily due to an
increase in revenue from the OEM agreement the Company entered
into with Cisco Systems.
Income from operations was $3.3 million in fiscal year 2009
compared to the loss from operations of $2.6 million in fiscal
year 2008.
The change of operating income in fiscal year 2009 primarily
included an increase in revenue of $3.1 million and a decrease in
total costs and operating expenses of $2.8 million.
A full-text copy of the Company's conolidated financial statements
for the year ended June 30, 2009, is available for free at:
http://researcharchives.com/t/s?4818
Liquidity and Capital Resources
Net cash from operating activities was $3.7 million in fiscal year
2009 compared to $2.8 million net cash used in operating
activities in fiscal year 2008. As of June 30, 2009, cash and
cash equivalents were $7.5 million compared to $3.8 million on
June 30, 2008.
Based upon the Company's fiscal year 2010 plan, eGain believes
that existing capital resources will enable it to maintain current
and planned operations for at least the next 12 months.
Net cash used in investing activities was $266,000 in fiscal
year 2009 compared to $530,000 in fiscal year 2008.
Net cash used in financing activities was $99,000 in fiscal year
2009 compared to net cash provided by financing activities of
$838,000 in fiscal year 2008.
Based in Mountain View, Calif., eGain Communications Corporation
provides multichannel customer service and knowledge management
software for in-house or on-demand deployment, used by global
enterprises and fast-growing businesses. The Company was
incorporated in Delaware in September 1997.
EMMIS COMMUNICATIONS: Disputes ORTT Decision on Radio License
-------------------------------------------------------------
Emmis Communications Corporation reports that the Hungarian
National Radio and Television Board on October 28, 2009, announced
it was awarding to another bidder the national radio license
currently held by Emmis' majority-owned subsidiary, Slager Radio
Co. Pltd.
"We believe the award of the license to the other bidder violates,
among other things, the ORTT's own national radio license tender
rules, the Hungarian Media Law and European Commission Treaty to
which Hungary became a party in 2004, and are vigorously exploring
avenues for having the award set aside, including but not limited
to litigation in Hungary and in the European Union," J. Scott
Enright, Emmis' Executive Vice President, General Counsel and
Secretary, said. "If the award remains in effect, Slager would be
required to cease to broadcast effective November 19, 2009."
Emmis disclosed operating results for Slager for the three years
ended February 28, 2009, as well as the six-month periods ended
August 31, 2008 and 2009. A full-text copy of the Disclosure
filed with the Securities and Exchange Commission on Form 8-K is
available at no charge at http://ResearchArchives.com/t/s?47ee
About Emmis Communications
Headquartered in Indianapolis, Indiana, Emmis Communications
Corporation owns and operates radio stations and magazine
publications in the U.S. and in Europe.
At August 31, 2009, Emmis had $511,546,000 in total assets against
$500,910,000 in total liabilities and $140,459,000 in Series A
cumulative convertible preferred stock, resulting in stockholders'
deficit of $179,962,000. At August 31, 2009, Emmis had
$50,139,000 in non-controlling interests and total deficit of
$129,823,000.
* * *
As reported by the Troubled Company Reporter on June 22, 2009,
Moody's Investors Service changed Emmis Communications' senior
secured term loan rating to Caa2 from Ca following the completion
of a series of Dutch auction transactions pursuant to a March 3,
2009 credit facility amendment. The revised rating reflects the
Company's capital structure, pro-forma for an roughly
$78 million reduction of term loan debt which has resulted from
these transactions. In addition, Moody's removed the "/LD"
designation previously appended to the Probability of Default
rating on April 27, 2009.
In April, Moody's cut its corporate family rating on the Company
to 'Caa2'.
In May, S&P raised its corporate credit rating on the Company to
'CCC+'. In June, S&P withdrew the 'CCC+' Corp. Credit Rating at
the Company's request.
EMMIS COMMUNICATIONS: Meets Nasdaq's Minimum Bid Price Rule
-----------------------------------------------------------
The Nasdaq Stock Market on October 28, 2009, informed Emmis
Communications Corporation that the closing bid price of the
Company's Class A Common Stock -- listed on the Nasdaq Global
Select Market under the symbol "EMMS" -- has been above $1.00 per
share for at least ten consecutive trading days and that the
Company is now in compliance with Listing Rule 5450 (a)(1).
About Emmis Communications
Headquartered in Indianapolis, Indiana, Emmis Communications
Corporation owns and operates radio stations and magazine
publications in the U.S. and in Europe.
At August 31, 2009, Emmis had $511,546,000 in total assets against
$500,910,000 in total liabilities and $140,459,000 in Series A
cumulative convertible preferred stock, resulting in stockholders'
deficit of $179,962,000. At August 31, 2009, Emmis had
$50,139,000 in non-controlling interests and total deficit of
$129,823,000.
* * *
As reported by the Troubled Company Reporter on June 22, 2009,
Moody's Investors Service changed Emmis Communications' senior
secured term loan rating to Caa2 from Ca following the completion
of a series of Dutch auction transactions pursuant to a March 3,
2009 credit facility amendment. The revised rating reflects the
Company's capital structure, pro-forma for an roughly
$78 million reduction of term loan debt which has resulted from
these transactions. In addition, Moody's removed the "/LD"
designation previously appended to the Probability of Default
rating on April 27, 2009.
In April, Moody's cut its corporate family rating on the Company
to 'Caa2'.
In May, S&P raised its corporate credit rating on the Company to
'CCC+'. In June, S&P withdrew the 'CCC+' Corp. Credit Rating at
the Company's request.
EQUIPMENT ACQUISITION: Section 341(a) Meeting Scheduled for Dec. 1
------------------------------------------------------------------
The U.S. Trustee for Region 11 will convene a meeting of Equipment
Acquisition Resources, Inc.'s creditors on December 1, 2009, at
1:30 p.m., at 219 South Dearborn, Office of the U.S. Trustee, 8th
Floor, Room 804, Chicago, IL 60604.
This is the first meeting of creditors required under Section
341(a) of the U.S. Bankruptcy Code in all bankruptcy cases.
All creditors are invited, but not required, to attend. This
Meeting of Creditors offers the one opportunity in a bankruptcy
proceeding for creditors to question a responsible office of the
Debtor under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.
Pasadena, California-based BGM Pasadena LLC filed for Chapter 11
bankruptcy protection on October 22, 2009 (Case C.D. Calif. No.
09-39135). John Schock, Esq., who has an office in Pasadena,
California. The Company listed $10,000,001 to $50,000,000 in
assets and $1,000,001 to $10,000,000 in liabilities.
ERNIE LEE JACOBSEN: Voluntary Chapter 11 Case Summary
-----------------------------------------------------
Joint Debtors: Ernie Lee Jacobsen
aka Earnest Lee Jacobsen
dba Sonic of Starkville #2
dba Sonic of Tupelo #2, LLC
dba Sonic of Fulton, LLC
dba Sonic of Columbus, LLC
dba Sonic Drive In of Starkville
dba Sonic of Tupelo #1 LLC
dba Sonic of Aberdeen, LLC
dba Sonic of West Point, LLC
dba Sonic of Russellville
Donna Jean Jacobsen
60 Amanda Drive
Columbus, MS 39702
Case No.: 09-15667
Chapter 11 Petition Date: October 29, 2009
Court: United States Bankruptcy Court
Northern District of Mississippi (Aberdeen)
Debtors' Counsel: Craig M. Geno, Esq.
Harris Jernigan & Geno, PLLC
P.O. Box 3380
Ridgeland, MS 39158-3380
Tel: (601) 427-0048
Email: cmgeno@harrisgeno.com
Estimated Assets: $10,000,001 to $50,000,000
Estimated Debts: $10,000,001 to $50,000,000
The Debtors did not file a list of their 20 largest unsecured
creditors when they filed their petition.
ESTATE HOMES: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Estate Homes, Inc.
13221 SW 216th Terrace
Miami, FL 33170
Bankruptcy Case No.: 09-34085
Chapter 11 Petition Date: October 31, 2009
Court: United States Bankruptcy Court
Southern District of Florida (Miami)
Judge: Laurel M. Isicoff
Debtor's Counsel: Geoffrey S. Aaronson, Esq.
100 SE 2nd St 27th Floor
Miami, FL 33131
Tel: (786) 594-3000
Fax: (305) 675-3880
Email: gaaronson@aaronsonpa.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
A full-text copy of the Debtor's petition, including a list of its
20 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/flsb09-34085.pdf
The petition was signed by Peter Duarte, president of the Company.
EXPEDIA INC: Moody's Upgrades Corporate Credit Rating to 'Ba1'
--------------------------------------------------------------
Moody's Investors Service upgraded Expedia, Inc.'s corporate
family rating, probability-of-default rating, and senior unsecured
notes ratings to Ba1 from Ba2. The rating outlook is stable.
The upgrade is based on Expedia's solid operating performance
amidst the global recession and management's commitment to more
conservative financial policies. The company's ability to
maintain strong credit metrics, including robust cash flow,
through economic cycles reinforces the strength of the company's
globally recognized brands and the viability of its distribution
network, which continues to benefit from online penetration of
travel expenditures.
Management has publicly committed to financial policies
commensurate with an investment grade rated company, specifically
targeting leverage to be between 2 to 3 times (gross debt to
EBITDA), which approximates 2.3 to 3.3 times on a Moody's adjusted
basis (including operating lease adjustments). This disciplined
approach represents a significant change from prior behavior when
the company announced intentions to buyback a sizable portion of
its common stock during the summer of 2007 (original intention of
42% of total outstanding shares, ultimately downsized to 9%).
While the company has tempered share repurchase activity since
then and vowed to maintain more conservative policies, it still
remains to be seen whether the current discipline represents a
long-term financial philosophy, especially as access to capital
markets improve with a recovering economy.
Expedia's Ba1 rating is supported by the company's leading
position in the consumer online travel agency market and strong
credit profile, which includes low leverage, high profitability,
and strong cash flow generation. The rating is constrained by
reduced travel demand during the current economic recession,
historically aggressive financial policies with regard to share
repurchases, exposure to ongoing competition from supplier-owned
and other third party online travel sites, and the concentrated
voting control of Barry Diller and Liberty Media.
The stable outlook reflects Moody's expectation that the company's
performance will improve with a strengthening economy, the secular
shift to online travel spending, and international penetration.
In addition, Moody's expect that management will adhere to
conservative financial policies as the financial markets recover.
Moody's anticipate that modest acquisition and share buyback
activity will be funded through the company's free cash flow
generation and that balance sheet liquidity will remain robust
through 2010. In addition, Moody's expect leverage (debt to
EBITDA on a Moody's adjusted basis) to remain consistent with
management targets.
Ratings upgraded:
* Corporate family rating to Ba1 from Ba2;
* Probability-of-default rating to Ba1 from Ba2;
* $500 million senior unsecured notes, due August 2018 to Ba1 (LGD
4, 56%) from Ba2 (LGD 4, 56%)
* $500 million senior unsecured notes due 2016 to Ba1 (LGD 4, 56%)
from Ba2 (LGD 4, 56 %)
Rating affirmed:
* Speculative Grade Liquidity Rating of SGL-1
The last rating action was on June 12, 2008, when Moody's affirmed
Expedia, Inc.'s Ba2 CFR and assigned a Ba2 rating to the company's
$500 million senior notes due 2016. The rating outlook for
Expedia was revised to stable from negative.
Headquartered in Bellevue, Washington, Expedia, Inc., with
revenues of $2.9 billion for the twelve months ended September 30,
2009, is a leading online travel company.
FANNIE MAE: Goldman to Buy Tax Credits; Treasury Objects
--------------------------------------------------------
The Wall Street Journal's Damian Paletta reports that Goldman
Sachs Group Inc. is in talks to buy millions of dollars of tax
credits from Fannie Mae, but the potential deal is running into
opposition from the U.S. Treasury, which could block the deal.
Mr. Paletta says a sale would bring some needed financial respite
to Fannie Mae. Mr. Paletta, however, notes the administration is
leery about approving a deal that would help Goldman reduce its
tax bill, given the animus held by many lawmakers toward big Wall
Street firms in general and Goldman in particular.
About Fannie Mae
Fannie Mae is the U.S. largest mortgage buyer, according to The
New York Times.
As of June 30, 2009, Fannie Mae had $911,382,000,000 in total
assets and $921,984,000,000 in total liabilities, resulting in
Fannie Mae stockholders' deficit of $10,710,000,000.
Conservatorship
As reported by the Troubled Company Reporter, the U.S. government
took direct responsibility for Fannie Mae and Freddie Mac, placing
the government-sponsored enterprises under conservatorship on
September 7, 2008. James B. Lockhart, director of Federal Housing
Finance Agency, said that Fannie Mae and Freddie Mac share the
critical mission of providing stability and liquidity to the
housing market. Between them, the Enterprises have $5.4 trillion
of guaranteed mortgage-backed securities (MBS) and debt
outstanding, which is equal to the publicly held debt of the
United States. Among the key components of the conservatorship,
the FHFA, as conservator, assumed the power of the Board and
management.
FAIRPOINT COMMS: Proposal to Obtain $75-Mil. of DIP Financing
-------------------------------------------------------------
FairPoint Communications Inc. and its debtor affiliates seek
permission from the U.S. Bankruptcy Court for the Southern
District of New York to access up to $75 million in postpetition
financing from Bank of America, N.A., as administrative agent,
and certain lenders.
Luc A. Despins, Esq., at Paul, Hastings, Janofsky & Walker LLP,
in New York, relates that financial performance problems have
made it difficult for the Debtors to service approximately $2.7
billion in funded prepetition debt obligations under their March
2008 Prepetition Credit Agreement with BofA and certain
prepetition lenders. Thus, to ensure that their obligations are
met and to demonstrate adequate liquidity to their vendors and
customers, the Debtors sought sources of new capital.
About 17 potential lenders were contacted by the Debtors. After
engaging in extensive, arm's-length negotiations, the Debtors,
with the help of Rothschild Inc., determined that BofA's
postpetition financing proposal has superior terms compared to
other proposals.
Some of the DIP Lenders are also the Debtors' Prepetition
Lenders. BofA and certain lenders, as the DIP Lenders, are
willing to extend postpetition financing on certain terms and
thus, prime their own prepetition interest without requiring
liens on regulated assets. The other salient terms of the DIP
Facility are:
1. Borrowing Limits. Bank of America, N.A., as administrative
agent and certain lenders agree to make revolving loans
available to FairPoint Communications, Inc., and FairPoint
Logistics, Inc., in an aggregate amount not to exceed
$75,000,000, with a letter of credit subfacility in an
aggregate amount of $30,000,000.
2. Availability. Availability under the DIP Revolving
Facility will (a) prior to the entry of a final DIP order
be in an amount not to exceed $20,000,000; and (b) upon
entry of the Final Order, be in an amount not to exceed the
Maximum Amount.
3. Use of Proceeds. Loan proceeds under the Revolver Facility
may be used by the Debtors for (i) general working capital
purposes; (ii) paying amounts owed to DIP Lenders from time
to time; (iii) paying reasonable professional fees and
expenses payable to the Prepetition Agent under the
Prepetition Credit Agreement; (iv) issuing letters of
credit in the ordinary course of business; (v) paying cure
amounts; and (vi) paying fees and expenses of bankruptcy
professionals, subject to Carve Out. The Loan Proceeds are
not to be used to challenge or contest any of the liens or
claims of the Prepetition Lenders and DIP Lenders.
4. Budget. The Debtors will provide the DIP Lenders with a
budget that detail their receipts and disbursements on a
weekly basis for the 13-week period after the Petition
Date. The Debtors will update the Budget on a monthly
basis. A copy of the budget the Debtors prepared for the
13-week period ended January 22, 2010, is available at:
http://bankrupt.com/misc/FAIRPOINT_DIPbudget.pdf
5. Interest Rate. At the Debtors' option, at either (i) the
Eurodollar Rate plus 4.50% or (ii) the Base Rate plus
3.50%. For the purposes of the DIP Agreement, the term
"Base Rate" means the greatest of (a) the rate of interest
announced by BofA from time to time as its prime rate, (b)
the Federal Funds Rate for such day, plus 0.50%, or (c) the
Eurodollar Rate plus 1.00%.
Upon the occurrence and during the continuance of an Event
of Default, at the election of the DIP Agent or non-
defaulting DIP Lenders holding more than a majority of the
commitments, all obligations under the DIP Revolving
Facility will bear interest at a rate of 2.00% above the
otherwise applicable rate.
6. Maturity. Borrowings and other extensions of credit under
the DIP Revolving Facility will mature on the earliest to
occur of (i) the effective date of the confirmed Plan; (ii)
nine months after the Petition Date -- which date may, at
the request of the Debtors, be extended by three months; or
(iii) the date on which obligations under the DIP Revolving
Facility are accelerated following the occurrence of an
Event of Default.
Upon the satisfaction of customary conditions precedent
reasonably satisfactory to the Debtors and the DIP Lenders,
all borrowings and other extensions of credit under the DIP
Revolving Facility will roll into a revolving credit exit
facility on terms reasonably satisfactory to the Debtors
and the DIP Lenders.
7. Events of Defaults. Events of default, among others,
include provisions relating to: (i) the appointment of a
trustee or examiner with expanded powers, or dismissal or
conversion of any of the Cases; (ii) the Debtors' failure
to file the Plan as and when required under the terms of
the DIP Agreement; and (iii) failure to obtain entry of a
confirmation order from the Bankruptcy Court with respect
to that plan by July 31, 2010.
8. Liens. The DIP Lenders will receive as security for the
DIP Facility: (i) a perfected first-priority lien on all
encumbered assets of the Debtors as of the Petition Date,
other than Federal Communication Commission licenses and
those assets of the Debtors in which granting a lien would
violate applicable law; (ii) a perfected junior lien on all
encumbered assets or property of the Debtors as of the
Petition Date; and (iii) first-priority senior priming
perfected liens on all assets that constitute collateral
under the Prepetition Credit Agreement.
9. Carve Out. Carve Out refers to (i) all fees required to be
paid to the Clerk of the Bankruptcy Court and to the Office
of the U.S. Trustee under Section 1930 of Title 28 of the
Bankruptcy Code; (ii) fees and disbursements incurred by a
Chapter 7 trustee not to exceed $75,000, and (iii) after
the occurrence and during the continuance of an Event of
Default under the DIP Documents, the payment of allowed
professional fees and disbursements incurred by the Debtors
or a court-appointed statutory committee in an aggregate
amount not in excess of $7,500,000.
10. Fees. The Debtors will pay these fees:
* An unused line fee in the amount of 0.50% per annum,
payable monthly in arrears based on the average
daily unused portion of the DIP Revolving Facility;
* Customary letter of credit fees, including a fee on each
letter of credit payable monthly in arrears at a per
annum rate of 4.50%, which fee will be adjusted upwards
by 200 basis points during any period that an Event of
Default has occurred and is continuing;
* An Upfront Fee to the DIP Agent for the account of each
DIP Lender in an amount equal to 2.0% of the Maximum
Amount; and
* Fees to Banc of America Securities LLC and BofA pursuant
to that certain engagement letter between and among
FairPoint, Banc of America LLC and BofA, dated October
2009.
11. Negative Covenants.
The Debtors are not permitted to incur Consolidated
Capital Expenditures for each period to exceed these
amounts:
Period Max. Cons. Cap. Expenditure
------ ---------------------------
11/01/09-11/30/09 $16,191,000
11/01/09-12/31/09 $24,403,000
11/01/09-01/31/10 $45,609,000
11/01/09-02/28/10 $70,163,000
11/01/09-03/31/10 $90,459,000
11/01/09-04/30/10 $111,399,000
11/01/09-05/31/10 $136,644,000
11/01/09-06/30/10 $159,992,000
11/01/09-07/31/10 $186,104,000
11/01/09-08/31/10 $215,671,000
11/01/09-09/30/10 $244,190,000
11/01/09-10/31/10 $274,586,000
The Debtors are not to permit Consolidated EBITDAR
for each period to be less than these amounts:
Period Max. Cons. Cap. Expenditure
------ ---------------------------
11/01/09-11/30/09 $29,250,000
11/01/09-12/31/09 $48,500,000
11/01/09-01/31/10 $66,352,000
11/01/09-02/28/10 $83,794,000
11/01/09-03/31/10 $101,236,000
11/01/09-04/30/10 $118,677,000
11/01/09-05/31/10 $136,119,000
11/01/09-06/30/10 $153,561,000
11/01/09-07/31/10 $169,336,000
11/01/09-08/31/10 $185,111,000
11/01/09-09/30/10 $200,886,000
11/01/09-10/31/10 $216,661,000
The DIP Lenders are represented by Kaye Scholer LLP.
Full-text copies of the DIP Credit Agreement and the DIP Term
Sheet between FairPoint and the DIP Lenders are available for
free at:
http://bankrupt.com/misc/FAIRPOINT_DIPCreditAgrmnt.pdf
http://bankrupt.com/misc/FAIRPOINT_DIPtermsheet.pdf
The Debtors also seek to provide adequate protection to their
Prepetition Lenders of those Lenders' interests in collateral to
the extent there is a diminution in the value of the collateral
from and after the Petition Date. The Debtors propose this form
of adequate protection:
(i) A valid, perfected, replacement security interest in and
lien on the collateral upon which there exists liens
granted pursuant to the Prepetition Credit Agreement or
the Existing Primed Liens;
(ii) A valid, perfected security interest in and lien on all of
the DIP Collateral, subject and subordinate only to (x)
the Carve-Out and (y) the liens securing the DIP Revolving
Facility, which Adequate Protection Liens will rank in the
same relative priority and right as do the respective
Existing Primed Liens as of the Petition Date;
(iii) A superpriority administrative expense claim as provided
for under Section 507(b) of the Bankruptcy Code, subject
and subordinate only to the Carve-Out and the
Superpriority Claims held by the DIP Lenders under the DIP
Revolving Facility.
(iv) Current cash payments of all fees and all reasonable
professional fees and expenses, in each case, payable to
the BofA, as administrative agent, under the Prepetition
Credit Agreement, promptly upon receipt of invoices; and
(v) Copies of all financial statements furnished to the DIP
Agent, the DIP Lenders and the Financial Advisor.
"The implementation of the DIP Agreement will promote a
successful reorganization," Mr. Despins asserts. The credit
provided under the DIP Revolving Facility will help enable the
Debtors to demonstrate to the public their ability to provide
uninterrupted service to their customers, pay their employees,
and operate their business in the ordinary course and in an
orderly and reasonable manner to preserve and enhance the value
of their estates for the benefit of all parties in interest, he
avers.
In a declaration to the Court, Neil A. Augustine, managing
director of the Debtors' investment banker, Rothschild, points
out that significantly, the proposed DIP financing does not
include:
-- a cross collateralization provision that converts
prepetition debt to administrative expense status;
-- a provision requiring the Debtors to pay accrued or current
interest payments due under the Prepetition Credit
Agreement as part of adequate protection provisions;
-- provisions that give the Prepetition Lenders control over
key issues in these cases, like the filing of a plan of
reorganization satisfactory to the Prepetition Lenders;
-- a provision limiting the Debtors' use of borrowings under
the DIP Financing to items contained in a strict budget.
Mr. Augustine avers that the proposed DIP Financing is at
competitive terms and conditions. "The proposed DIP Financing
represents the most favorable financing for FairPoint because it
provides the most favorable economic terms as compared to any
other lending proposal reviewed by Rothschild and does not
require the imposition of non-consensual priming liens," he says.
Interim Approval
Judge Jernigan grants the Debtors' request and allows the Debtors
to borrow up to $20 million from the DIP Lenders on an interim
basis. The $20 million may be used for letters of credit,
pending entry of a final order on the DIP Financing Motion.
The proposed DIP Liens are approved, on an interim basis. The
Adequate Protection Liens for the Prepetition Lenders are also
approved, on an interim basis.
The Court will convene a final hearing on the DIP financing
request November 18, 2009, at 10:00 a.m. prevailing Eastern Time.
Objection are due no later than November 11.
A full-text copy of the 38-page Interim DIP Order is available
for free at http://bankrupt.com/misc/FairPt_InterimDIPOrd.pdf
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 Employee Obligations
-----------------------------------------------------
Fairpoint Communications Inc. and its units employ about 4,140
individuals and approximately 20 contract employees and
independent contractors as of the Petition Date. They aver that
their ability to operate their businesses depends on the continued
loyalty and morale of their workforce. In this light, the Debtors
sought and obtained the Court's permission, on an interim basis,
to pay prepetition claims, honor obligations, and continue
programs relating to wage obligations and independent contractor
compensation, expense reimbursements, and employee benefits in the
ordinary course of business.
The Debtors estimate that as of the Petition Date, they owe
approximately $15.3 million on account of prepetition Employee
Obligations. Judge Lifland prohibits the Debtors from making any
payment on account of any Employee Obligation that total more
than $10,950.
Luc A. Despins, Esq., at Paul, Hasting, Janofsky & Walker LLP, in
New York, summarizes the Debtors' Employee Obligations:
1. Wages and Commissions. The Debtors' average monthly
compensation for Employees, including wages, salaries,
commissions and bonuses is approximately $24 million.
About 2,970 Employees are paid one week in arrears, while
1,170 Employees are paid on a current basis. FairPoint
Logistics, Inc. and FairPoint Communications process and
administer the payroll for all of the Debtors' Employees.
The Debtors also utilize a commission program for about 200
employees in their sales and client relations department.
Sales commissions are earned when sales and call-center
Employees sell communication services to new and existing
customers. A total of about $450,000 monthly is paid under
the Commission Program.
Under the Rewards Program, some of the Debtors' employees
are eligible for discretionary performance rewards based on
sales achievement. The Reward Program costs the Debtors
$2.6 million annually.
2. Bonus Programs. Pursuant to the Collective Bargaining
Agreements, certain employees of the Debtors are entitled to
a Guaranteed Minimum Bonus of $700 per eligible employee,
adjusted for overtime and other benchmarks. About 200
technicians are also eligible for Referral Bonuses.
3. Independent Contractor Compensation. The Debtors work with
20 Independent Contractors and pay about $115,000 in
contractor compensation per month.
4. Payroll Taxes and Deductions. The Debtors withhold federal,
state, and local income taxes as required by applicable law,
to pay all employment, unemployment, social security, and
similar taxes whether withheld from wages or paid directly
by the Debtors to governmental authorities, as well as make
other payroll deductions, including retirement and other
employee benefit plan contributions, union dues,
garnishments, and voluntary deductions. The Debtors' bi-
weekly liability for Payroll Taxes as of the Petition Date
is about $4 million.
5. Other Compensation. The other forms of compensation the
Debtors provide to their Employees are vacation pay, sick
leave and personal time-off pay and severance.
Expense Reimbursement refers to the various expenses of the
Debtors' Employees in the discharge of their duties for items
like travel, lodging and meal expenses. The Debtors reimburse
these costs in full after submission of appropriate
documentation. The Debtors incur about $380,000 per month in
Expense Reimbursements.
The Debtors also provide their Employees with a standard range of
welfare, retirement, insurance and other fringe benefits. Those
benefit plans and policies are categorized into:
* Health and welfare plans that offer medical insurance,
dental insurance, vision care, life insurance, disability
insurance, business travel accident insurance, and flexible
spending accounts;
* Six Section 401(k) defined contribution plans;
* Two defined pension benefit plans;
* A non-qualified deferred compensation plan; and
* The Concession Service Plans, Tuition Reimbursement
Programs, Work and Family Program, Commuter Spending Account
Program, and Employee Assistance Referral Program.
The Debtors believe that substantially all, if not all, of the
Employee Obligations relating to the period prior to the Petition
Date constitute priority claims under Sections 507(a)(4) and (5)
of the Bankruptcy Code.
The Court further clarifies that the Debtors may only pay
Prepetition Employee Obligations that become due and payable
between the Petition Date and the entry of a final order
approving the Employee Obligations Motion.
All applicable banks are directed to honor all checks and fund
transfer instructions relating the Debtors' accounts and any
other transfers related to Employee Obligations and Independent
Contractor Compensation.
Judge Lifland will convene a final hearing on November 18, 2009,
at 10:00 a.m. on the Debtors' request.
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: Schedules and Statements Due December 10
---------------------------------------------------------
Bankruptcy Judge Burton Lifland extends the time by which
Fairpoint Communications Inc. and its units file their schedules
of assets and liabilities and statements of financial affairs
through December 10, 2009. The Debtors originally sought an
extension of until December 25, 2009.
The Court further rules that the requirement for the Debtors:
-- to file the list of Equity Security Holders waived; and
-- to provide the Notice of Commencement to all Equity
Security Holders is waived, provided that the Debtors will
serve a Notice of Commencement on holders of more than
1,000,000 shares of FairPoint Communication's common stock.
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)
FEDERAL-MOGUL: Reports $10.4 Mil. Net Income for Third Quarter
--------------------------------------------------------------
Federal-Mogul Corporation (Nasdaq: FDML) said it reported strong
gross margin and net income with greatly improved cash flow on
increased sales versus the first and second quarters of 2009, as
the company's restructuring and cost reduction initiatives
enhanced its quarterly performance. The company continues to
benefit from strong customer, market and product diversification
and gained market share in several product segments during the
quarter.
Financial Summary
(in millions)
2009 2008
-------------------- --------------------
Q1 Q2 YTD Q1 Q2 YTD
---- ---- ---- ---- ---- ----
Net Sales $1,380 $1,304 $1,238 $3,922 $1,692 $5,546
Gross Margin 212 198 158 567 279 941
pct. of sales 15.4% 15.2% 12.8% 14.5% 16.5% 17.0%
SG&A (173) (170) (184) (527) (192) (613)
pct. of sales 12.5% 13.0% 14.9% 13.4% 11.3% 11.1%
Net Income (loss) 10 3 (101) (88) 4 62
Attributable to
Federal-Mogul
Operational EBITDA 134 129 70 333 179 644
pct. of sales 9.7% 9.9% 5.7% 8.5% 10.6% 11.6%
Cash Flow(2) $112 $6 $(196) $(78) $28 ($65)
"These results demonstrate our ongoing ability to perform
profitably even at these market and production levels. We had
strong gross margin and net income with significantly improved
cash flow versus the prior quarters of 2009. Federal-Mogul's
variable cost company strategy has positioned us to take advantage
of eventual volume improvements in the automotive, commercial
vehicle and other market segments," said Jose Maria Alapont,
Federal-Mogul President and CEO.
"The results of the third quarter show continuous improvement
versus prior quarters and we believe we can further improve the
performance of the company. We continue to implement cost
reductions necessary to attain earnings performance consistent
with our fundamental objective of achieving sustainable global
profitable growth by providing customers with high quality
products, leading technology and innovation, at a competitive
cost," said Mr. Alapont.
Federal-Mogul reported $1.4 billion in sales during Q3 2009,
increases of $76 million and $142 million over Q2 2009 and Q1
2009, respectively. With Q1 2009 as the baseline, Federal-Mogul
has continued to improve operating results throughout the year and
has raised gross margin by 2.6 percentage points. Sales, general
and administrative (SG&A) expenses as a percent of sales improved
steadily to 12.5 percent in Q3 2009 from 14.9 percent in Q1 2009.
As a result of the company's global restructuring plan, Federal-
Mogul has reduced its headcount by about 11,000 employees, or 22
percent, ending the quarter with global employment of less than
39,000.
Net income in Q3 2009 was $10 million versus a net loss of
$(101) million during Q1 2009. Operational EBITDA(1) for Q3 2009
was $134 million or 9.7 percent of sales, an increase of
$64 million or four percentage points over Q1 2009, when the
company reported operational EBITDA of $70 million or 5.7 percent.
Federal-Mogul has improved cash inflows throughout the year,
generating significant cash flow(2) of $112 million in Q3 2009, a
$308 million improvement versus a cash outflow of $(196) million
recorded in Q1 2009. This strong improvement was due to higher
profitability combined with disciplined working capital
management, including inventory reductions and improved accounts
receivable performance across the company's diverse OE and
aftermarket customer base. The company improved its strong cash
position to about $800 million and when combined with an undrawn
revolver of over $500 million, Federal-Mogul had $1.3 billion of
liquidity at the end of Q3 2009.
On a year-over-year basis, Federal-Mogul reported Q3 2009 sales of
$1.4 billion versus $1.7 billion in Q3 2008, or a decline of about
15 percent on a constant dollar basis, which compares favorably to
the overall downturn in the markets served by Federal-Mogul.
Gross margin was $212 million or 15.4 percent of sales in Q3 2009
versus $279 million or 16.5 percent in the same period of 2008.
The company's ability to maintain margins comparable to Q3 2008 in
a declining market environment reflects the success of Federal-
Mogul's variable cost company strategy. SG&A expenses in Q3 2009
were $19 million lower than the same
period in 2008.
Net income was $10 million in Q3 2009 versus $4 million in Q3
2008. Federal-Mogul's operational EBITDA(1) for Q3 2009 was
$134 million or 9.7 percent of sales, compared to $179 million,
reported during the third quarter a year ago. The company
reported positive cash flow(2) of $112 million for Q3 2009, a
significant increase versus $28 million during Q3 2008.
Federal-Mogul during the third quarter continued to expand its
customer, market and product diversity, especially in China, India
and Brazil, where the company's leading and globally recognized
technology helps regional customers respond to the fast-paced
demand to bring to market globally competitive vehicles.
Federal-Mogul also began high-volume production of its industry-
leading DuraBowl(R) piston. This technology utilizes an
innovative re-melting process to harden the piston rim, which is a
key enabler for engine downsizing and turboboosting, allowing
vehicle makers to improve fuel economy and reduce emissions.
"We continue to focus on strengthening our product portfolio to
grow our revenue stream with new technologies, innovations and
strong brands that bring value to our customers, especially given
the increasingly challenging regulatory requirements for fuel
economy, alternative fuels, reduced emissions and improved
safety," said Mr. Alapont.
"Federal-Mogul's results during the third quarter demonstrate that
our sustainable global profitable growth strategy has enabled the
company to successfully operate in today's environment while also
preparing Federal-Mogul to capitalize on new growth opportunities
as the overall economy and global automotive markets strengthen,"
Mr. Alapont concluded.
A full-text-copy of Federal-Mogul Corp.'s Third Quarter 2009
Results filed on Form 10-Q is available at no charge at:
http://researcharchives.com/t/s?47de
Reorganized Federal-Mogul Corp.
Balance Sheet
(In millions)
Sep. 30 Dec. 31
2009 2008
------- -------
Assets
Current assets:
Cash and equivalents $784.3 $888.2
Accounts receivable, net 1,083.3 938.7
Inventories, net 841.3 893.7
Prepaid expenses and other current assets 238.9 267.4
-------- --------
Total current assets 2,947.8 2,988.0
Property, plant and equipment, net 1,890.7 1,910.6
Goodwill and other indefinite-lived
intangible assets 1,398.6 1,430.4
Definite-lived intangible assets, net 527.3 563.9
Other noncurrent assets 326.0 342.7
-------- --------
Total Assets $7,090.4 $7,235.6
======== ========
Liabilities and Shareholders' Equity
Current liabilities:
Short-term debt, including current
portion of long-term debt $102.3 $101.7
Accounts payable 503.1 622.5
Accrued liabilities 464.0 483.1
Current portion of post-employment
benefit liability 61.7 61.0
Other current liabilities 165.3 173.8
-------- --------
Total current liabilities 1,296.4 1,442.1
Long-term debt 2,759.9 2,768.0
Post-employment benefits 1,279.9 1,240.1
Long-term portion of deferred income taxes 537.3 553.4
Other accrued liabilities 179.8 235.9
Shareholders' equity:
Preferred stock -- --
Common stock 1.0 1.0
Additional paid-in capital 2,122.7 2,122.7
Accumulated deficit (555.5) (467.9)
Accumulated other comprehensive loss (577.1) (688.0)
Treasury stock, at cost (16.7) (16.7)
-------- --------
Total shareholders' equity 974.4 951.1
-------- --------
Noncontrolling interests 62.7 45.0
-------- --------
Total shareholders' equity 1,037.1 996.1
-------- --------
Total liabilities & shareholders' equity $7,090.4 $7,235.6
======== ========
Reorganized Federal-Mogul Corp.
Statement of Operations
(In millions)
Three Months Ended
Sep. 30
------------------
2009 2008
------ ------
Net sales $1,380.0 $1,692.0
Cost of products sold (1,168.4) (1,413.1)
-------- --------
Gross margin 211.6 278.9
Selling, general and admin. expenses (172.5) (191.7)
Interest expense, net (32.5) (46.6)
Amortization expense (12.2) (21.4)
Chapter 11 & U.K. administration expenses (0.4) (2.3)
Equity earnings of unconsolidated affiliates 5.4 4.2
Restructuring, net 1.4 (11.3)
Other income, net 8.7 15.7
-------- --------
Income (loss) before income taxes 9.5 25.5
Income tax benefit (expense) 5.8 (18.3)
-------- --------
Net income (loss) $15.3 $7.2
Less net income attributable to
non-controlling interests (4.9) (3.6)
-------- --------
Net income (loss) attributable to
Federal-Mogul $10.4 $3.6
======== ========
Reorganized Federal-Mogul Corp.
Statement of Cash Flows
(In millions)
Nine Months Ended
Sep. 30
------------------
2009 2008
Cash Provided From (Used By) ------ ------
operating activities:
Net (loss) income ($78.7) $66.9
Adjustments to reconcile
net (loss) income to net cash:
Depreciation and amortization 240.5 265.8
Cash received from 524(g) Trust -- 225.0
Change in post-employment benefits 46.2 8.5
Changes in deferred taxes (22.3) 1.7
Gain on sale of debt investment (7.9) --
Changes in operating assets and liabilities:
Accounts receivable (117.8) (107.9)
Inventories 77.2 21.9
Accounts payable (106.3) (75.9)
Other assets and liabilities 17.3 (30.7)
-------- --------
Net cash provided from operating activities 48.2 375.3
Cash provided from (used by)
investing activities:
Expenditures for property, plant & equipment (145.7) (240.2)
Net settlement from sale of debt investment 7.9 --
Net proceeds from the sale of
property, plant and equipment 0.9 10.9
Payments to acquire business -- (4.7)
-------- --------
Net cash used by investing activities (136.9) (234.0)
Cash provided from (used by)
financing activities:
Proceeds from borrowings on exit facilities -- 2,082.0
Repayment of Tranche A, Revolver & PIK Notes -- (1,790.8)
Principal payments on exit facilities (22.2) (22.2)
Decrease in other long-term debt (2.7) (9.2)
Decrease in short-term debt (2.1) (0.2)
Purchase of treasury stock -- (16.7)
Net payments from factoring arrangements (5.9) (15.5)
Debt amendment/issuance fees (1.0) (0.6)
-------- --------
Net cash (used by) provided from
financing activities (33.9) 226.8
Effect of foreign currency exchange rate
fluctuations on cash 18.7 (12.0)
-------- --------
(Decrease) increase in cash & equivalents (103.9) 356.1
Cash and equivalents at beginning of period 888.2 425.4
-------- --------
Cash and equivalents at end of period $784.3 $781.5
======== ========
About Federal-Mogul
Federal-Mogul Corporation is a leading global supplier of
powertrain and safety technologies, serving the world's foremost
original equipment manufacturers of automotive, light commercial,
heavy-duty, agricultural, marine, rail, off-road and industrial
vehicles, as well as the worldwide aftermarket. The company's
leading technology and innovation, lean manufacturing expertise,
as well as marketing and distribution deliver world-class
products, brands and services with quality excellence at a
competitive cost. Federal-Mogul is focused on its sustainable
global profitable growth strategy, creating value and satisfaction
for its customers, shareholders and employees. Federal-Mogul was
founded in Detroit in 1899. The company is headquartered in
Southfield, Michigan, and employs nearly 39,000 people in 36
countries. Visit the company's Web site at:
http://www.federalmogul.com/
The Company filed for Chapter 11 protection on October 1, 2001
(Bankr. Del. Case No. 01-10582). Lawrence J. Nyhan Esq., James F.
Conlan, Esq., and Kevin T. Lantry, Esq., at Sidley Austin Brown &
Wood, and Laura Davis Jones, Esq., at Pachulski, Stang, Ziehl &
Jones, P.C., represent the Debtors in their restructuring efforts.
When the Debtors filed for protection from their creditors, they
listed $10.15 billion in assets and $8.86 billion in liabilities.
Federal-Mogul Corp.'s U.K. affiliate, Turner & Newall, is based at
Dudley Hill, Bradford. Peter D. Wolfson, Esq., at Sonnenschein
Nath & Rosenthal; and Charlene D. Davis, Esq., Ashley B. Stitzer,
Esq., and Eric M. Sutty, Esq., at The Bayard Firm represent the
Official Committee of Unsecured Creditors.
On March 7, 2003, the Debtors filed their Joint Chapter 11 Plan.
They submitted a Disclosure Statement explaining that plan on
April 21, 2003. They submitted several amendments and on June 6,
2004, the Bankruptcy Court approved the Third Amended Disclosure
Statement for their Third Amended Plan. On July 28, 2004, the
District Court approved the Disclosure Statement. The estimation
hearing began on June 14, 2005. The Debtors submitted a Fourth
Amended Plan and Disclosure Statement on November 21, 2006, and
the Bankruptcy Court approved that Disclosure Statement on
February 6, 2007. The Fourth Amended Plan was confirmed by the
Bankruptcy Court on November 8, 2007, and affirmed by the District
Court on November 14. Federal-Mogul emerged from Chapter 11 on
December 27, 2007.
(Federal-Mogul Bankruptcy News; Bankruptcy Creditors' Service
Inc., http://bankrupt.com/newsstand/or 215/945-7000)
* * *
As reported by the TCR on June 5, 2009, Standard & Poor's Ratings
Services said it has lowered its corporate credit rating on
Federal-Mogul Corp. to 'B+' from 'BB-'. S&P also lowered the
ratings on the company's senior secured debt; the recovery ratings
are unchanged. The outlook is negative. "The ratings reflect
Federal-Mogul's weak business risk profile as
a major participant in the highly competitive global auto
industry, and its aggressive financial risk profile," S&P said.
FEDERAL-MOGUL: Retirees, USW Rally Against Suspension of Benefits
-----------------------------------------------------------------
Retirees and members of the United Steel Workers and the
Steelworkers Organizing of Active Retirees gathered in front of
Federal-Mogul Corporation on October 28, 2009, to try to protect
benefits for retirees, which the company seeks to discontinue.
Charlie Averill, SOAR's secretary and treasurer, was upset with
the concessions the company has been seeking from USW for a new
four-year contract, Denise Massie of McClatchy-Tribune Information
Services, said.
The current contract expired October 31, 2009.
Federal-Mogul seeks to discontinue health-care coverage for
employees when they retire and for those who are currently in
retirement, information that has been distributed at the rally
discloses.
"They want to take away health care benefits for all employees,
even the ones working now," McClatchy-Tribune quoted Mr. Averill
as saying.
Ted Sautter, a member of USW, said the company now wants to take
away everyone's health care. He showed up to help support those at
the rally and the retired workers.
"What happens at this company affects other companies here," Ted
Sautter, a member of the Steelworkers has said. "If they do this
here, they will move on to the next company and try it there," he
added.
Members of SOAR and USW came to the rally to support their
"brothers and sisters," Ms. Massie said.
About Federal-Mogul
Federal-Mogul Corporation is a leading global supplier of
powertrain and safety technologies, serving the world's foremost
original equipment manufacturers of automotive, light commercial,
heavy-duty, agricultural, marine, rail, off-road and industrial
vehicles, as well as the worldwide aftermarket. The company's
leading technology and innovation, lean manufacturing expertise,
as well as marketing and distribution deliver world-class
products, brands and services with quality excellence at a
competitive cost. Federal-Mogul is focused on its sustainable
global profitable growth strategy, creating value and satisfaction
for its customers, shareholders and employees. Federal-Mogul was
founded in Detroit in 1899. The company is headquartered in
Southfield, Michigan, and employs nearly 39,000 people in 36
countries. Visit the company's Web site at:
http://www.federalmogul.com/
The Company filed for Chapter 11 protection on October 1, 2001
(Bankr. Del. Case No. 01-10582). Lawrence J. Nyhan Esq., James F.
Conlan, Esq., and Kevin T. Lantry, Esq., at Sidley Austin Brown &
Wood, and Laura Davis Jones, Esq., at Pachulski, Stang, Ziehl &
Jones, P.C., represent the Debtors in their restructuring efforts.
When the Debtors filed for protection from their creditors, they
listed $10.15 billion in assets and $8.86 billion in liabilities.
Federal-Mogul Corp.'s U.K. affiliate, Turner & Newall, is based at
Dudley Hill, Bradford. Peter D. Wolfson, Esq., at Sonnenschein
Nath & Rosenthal; and Charlene D. Davis, Esq., Ashley B. Stitzer,
Esq., and Eric M. Sutty, Esq., at The Bayard Firm represent the
Official Committee of Unsecured Creditors.
On March 7, 2003, the Debtors filed their Joint Chapter 11 Plan.
They submitted a Disclosure Statement explaining that plan on
April 21, 2003. They submitted several amendments and on June 6,
2004, the Bankruptcy Court approved the Third Amended Disclosure
Statement for their Third Amended Plan. On July 28, 2004, the
District Court approved the Disclosure Statement. The estimation
hearing began on June 14, 2005. The Debtors submitted a Fourth
Amended Plan and Disclosure Statement on November 21, 2006, and
the Bankruptcy Court approved that Disclosure Statement on
February 6, 2007. The Fourth Amended Plan was confirmed by the
Bankruptcy Court on November 8, 2007, and affirmed by the District
Court on November 14. Federal-Mogul emerged from Chapter 11 on
December 27, 2007.
(Federal-Mogul Bankruptcy News; Bankruptcy Creditors' Service
Inc., http://bankrupt.com/newsstand/or 215/945-7000)
* * *
As reported by the TCR on June 5, 2009, Standard & Poor's Ratings
Services said it has lowered its corporate credit rating on
Federal-Mogul Corp. to 'B+' from 'BB-'. S&P also lowered the
ratings on the company's senior secured debt; the recovery ratings
are unchanged. The outlook is negative. "The ratings reflect
Federal-Mogul's weak business risk profile as
a major participant in the highly competitive global auto
industry, and its aggressive financial risk profile," S&P said.
FIRSTFED FINANCIAL: Casso to Seek Funding, Resigns From Board
-------------------------------------------------------------
Jesse Casso, Jr., on October 29, 2009, resigned as a member of the
Board of Directors of FirstFed Financial Corp. and its wholly
owned banking subsidiary, First Federal Bank of California, FSB.
Mr. Casso's resignation did not result from any disagreement with
the Company concerning any matter relating to the Company's
operations, policies or practices. Mr. Casso has indicated to the
Board of Directors of the Company and the Bank that he plans to
assist the Company by attempting to raise a fund that would
recapitalize the Bank, and voluntarily resigned to avoid the
appearance of any conflict of interest potentially raised by such
pursuit in conjunction with continued membership on the Board.
Going Concern
As reported by the Troubled Company Reporter on August 21, 2009,
FirstFed's second quarter report on Form 10-Q includes a note on
its ability to continue as a "going concern".
The Company and its banking unit First Federal Bank of California
are operating under Amended Orders to Cease and Desist issued on
May 28, 2009, by the Office of Thrift Supervision. As required by
the Amendments, the Company and the Bank have submitted a detailed
capital plan to the OTS addressing how the Bank will meet and
maintain a tier 1 core capital ratio of 7% and a minimum total
risk-based capital ratio of 14% by September 30, 2009.
The Bank's risk-based capital ratio was 9.63% at June 30, 2009,
and its core and tangible capital ratios were 4.79%. These
capital ratios are below the levels required by the Bank's federal
regulators to be considered "well capitalized".
"The ability of the Company and the Bank to continue to meet all
of the requirements of the Amendments and the Orders will be
affected by market conditions in the economy and other
uncertainties. Declining real estate values and rising
unemployment in the state of California could have a significant
impact on future losses incurred on loans. In addition, there can
be no assurance in the current economic environment that the
Company will be able to raise capital to regain "well capitalized"
status or to meet future regulatory requirements. Due to these
conditions and events, substantial doubt exists in the Company's
ability to continue as a going concern," the Company stated.
FirstFed posted a comprehensive loss $48.74 million or $3.37 per
diluted share of common stock for the second quarter of 2009
compared with a comprehensive loss of $36.56 million or $2.60 per
diluted share of common stock for the second quarter of 2008.
About FirstFed Financial
Based in Los Angeles, California, FirstFed Financial Corp.
(OTC-FFED.PK) -- http://www.firstfedca.com/-- is a savings and
loan holding company. The Company owns and operates First Federal
Bank of California, a federally chartered savings association. At
June 30, 2009, the Company had $6.36 billion in total assets and
$6.20 billion in total liabilities.
FLINTKOTE CO: Gets Sixth Extension to File Reorganization Plan
--------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware has
extended The Flintkote Company and Flintkote Mines Limited's
exclusive period to file a Chapter 11 plan of reorganization
until Dec. 31, 2009, and the corresponding period to solicit
acceptances of that plan until Feb. 28, 2010.
This is the sixth extension in the Debtors' exclusive periods.
The Debtors related that the Modified Amended Plan represents
extensive negotiations between the Plan Proponents and their
cooperative efforts to formulate a consensual plan of
reorganization that successfully rehabilitates the Debtors and
maximizes the pool of assets available to creditors. The Debtors
are still in the process of securing the acceptance of Class 7
Claimants of the Modified Amended Plan that will help to confirm
the Modified Amended Plan.
Headquartered in San Francisco, California, The Flintkote Company
is engaged in the business of manufacturing, processing and
distributing building materials. Flintkote Mines Limited is a
subsidiary of Flintkote Company and is engaged in the mining of
base-precious metals. The Flintkote Company filed for Chapter 11
protection on April 30, 2004 (Bankr. D. Del. Case No. 04-11300).
Flintkote Mines Limited filed for Chapter 11 relief of August 25,
2004 (Bankr. D. Del. Case No. 04-12440). James E. O'Neill, Esq.,
Kathleen P. Makowswki, Esq., Laura Davis Jones, Esq., Sandra G.M,
Selzer, Esq., and Scotta Edelen McFarland, Esq., at Pachulski
Stang Ziehl & Jones LLP, represent the Debtors in their
restructuring efforts. Kathleen Campbell Davis, Esq., and Mark T.
Hurford, Esq., at Campbell & Levine, LLC, represent the official
committee of unsecured creditors as counsel.
When Flintkote Company filed for protection from its creditors, it
listed more than $100 million each in assets and debts. When
Flintkote Mines Limited filed for protection from its creditors,
it listed assets of $1 million to $50 million, and debts of more
than $100 million.
FORD MOTOR: Reports $997 Million 3rd Quarter 2009 Net Income
------------------------------------------------------------
Ford Motor Company on Tuesday reported net income of $997 million,
or 29 cents per share, in the third quarter as strong new
products, structural cost reductions and improved results at Ford
Credit lifted the company's results despite continued weak global
economic conditions. This is a $1.2 billion improvement compared
with the same period last year.
Excluding special items, Ford posted pre-tax operating profits
totaling $1.1 billion, an improvement of $3.9 billion from a year
ago. This marks the company's first operating profit since the
first quarter of 2008. On an after-tax basis, excluding special
items, Ford posted an operating profit of $873 million in the
third quarter, or 26 cents per share, compared with a loss of
$3 billion, or $1.32 per share, a year ago.
For the third quarter, Ford North America reported a pre-tax
operating profit of $357 million, compared with a loss of $2.6
billion a year ago. The improvement was primarily explained by
favorable net pricing, lower material costs, structural cost
reductions, favorable series mix and improved market share, offset
partially by unfavorable exchange and lower U.S. industry volume.
Third quarter revenue was $13.7 billion, up from $10.8 billion a
year ago.
This is Ford North America's first quarterly profit since the
first quarter of 2005.
Ford South America, Ford Europe and Ford Asia Pacific Africa also
posted pre-tax operating profits in the third quarter.
"Our third quarter results clearly show that Ford is making
tremendous progress despite the prolonged slump in the global
economy," said Ford President and CEO Alan Mulally. "Our solid
product lineup is leading the way in all markets. While we still
face a challenging road ahead, our One Ford transformation plan is
working and our underlying business continues to grow stronger."
Ford's third quarter revenue was $30.9 billion, down $800 million
from the same period a year ago. Automotive revenue is up
$100 million from a year ago. This improvement was offset by a
decrease in Ford Credit's revenue reflecting a decline in
receivables.
Ford reduced its Automotive structural costs by $1 billion in the
quarter, largely driven by lower manufacturing and engineering
costs, which included benefits from improved productivity,
personnel reduction actions primarily in North America and Europe,
and progress on implementing its common global platforms and
product development processes. Through the first nine months,
Ford has achieved $4.6 billion in Automotive structural cost
reductions, exceeding its full-year 2009 target of $4 billion.
Ford finished the third quarter with $23.8 billion in Automotive
gross cash, compared with $21 billion at the end of the second
quarter of 2009. Automotive operating-related cash flow was
$1.3 billion positive during the third quarter of 2009, an
improvement of $2.3 billion from the second quarter 2009.
Automotive operating-related cash flow was $3.4 billion negative
during the first nine months.
"The Ford team delivered another solid quarter of results with
strong contributions from all our business regions," said Lewis
Booth, Ford executive vice president and chief financial officer.
"Positive cash flow, a stronger balance sheet and a third quarter
operating profit are evidence that Ford is meeting the global
economic challenges."
THIRD QUARTER HIGHLIGHTS
-- Ford again increased year-over-year market share in North
America, South America, and Europe and continued to
achieve improvements in transaction prices and margins.
Ford maintained market share in the Asia Pacific Africa
region and Volvo gained market share. Other sales
highlights:
* In the U.S., third quarter market share increased
2.2 percentage points compared to last year as the Ford,
Lincoln and Mercury brands all posted sales gains
* Ford Europe's market share was 9.2 percent for the
quarter, up 0.6 points from last year and the highest
third-quarter level in 10 years. Market share was 10.1
percent in September, the highest monthly share in eight
years
* Record growth in China continued as Ford third quarter
sales jumped 63 percent
* At the end of the third quarter, worldwide sales of the
new Ford Fiesta reached 470,000 units since its launch
last fall. The No. 2 best-selling car in Europe posted
its highest September sales since 1994. In September,
Fiesta also had its best sales month ever in China.
Fiesta arrives in the U.S. market in 2010
* Began selling the new Ford Taurus and Transit Connect in
North America. Taurus sales in September were up 60
percent from a year ago
* The Ford Focus and Ford Escape were among the top new
vehicles purchased in the U.S. government's "Cash for
Clunkers" program
* Ford's U.S. hybrid sales have risen 73 percent this year
compared to a 14 percent decline in U.S. hybrid industry
sales. More than 60 percent of Ford Fusion hybrid sales
have come from non-Ford owners
-- Began production of the Ford Transit Connect small
commercial van at the new manufacturing plant in Craiova,
Romania
-- Announced investment of $500 million at Ford India's
Chennai assembly plant to build the new Ford Figo, a small
car targeted at the heart of the Indian market, debuting
in 2010
-- Announced a new $490 million assembly plant in Chongqing,
China, which will be completed by 2012, and will produce
the Ford Focus for the Chinese market
-- Ford, Lincoln and Mercury brand vehicles in the U.S. had
the fewest number of "things gone wrong" among all
automakers, according to the third quarter GQRS study of
new vehicle quality
-- Received $886 million in loans from the U.S. Department of
Energy for development of more fuel-efficient vehicles.
Ford has been approved for up to $5.9 billion in loans in
support of projected expenditures through mid-2012
-- Raised $565 million in new equity as Ford completed its
previously-announced plan to issue up to $1 billion of
equity
-- Ford Credit completed $10 billion in funding in the third
quarter, including $2.8 billion unsecured, and now has
essentially completed its full-year funding plan
-- The Ford Taurus and Lincoln MKT both earned a "Top Safety
Pick" from the Insurance Institute for Highway Safety.
Ford Motor Company continues to have more IIHS "Top Safety
Pick" ratings than any other automaker
-- Unveiled the all-new Ford C-MAX at the Frankfurt Motor
Show. The C-MAX and the Grand C-MAX will debut in Europe
in 2010, and the Grand C-MAX debuts in the U.S. in 2011.
The new global C-car platform will underpin up to 10
models and more than 2 million units annually by 2012
-- Announced that Ford's 1.6-liter and 2.0-liter four-
cylinder EcoBoost engines will make their debut in 2010
across Europe, North America, and Australia
-- Unveiled the new Ford Figo to compete in India's small car
segment beginning in 2010
-- Launched the new Ford Fiesta in Taiwan and continued the
successful rollout of the Ford Focus and Ford Everest SUV
in additional Asian markets
-- Revealed the new 2011 Ford F-Series Super Duty and two new
powertrains developed by Ford - a 6.7-liter V8 diesel
engine and a 6.2-liter V8 gasoline engine
-- Began selling the 2010 Ford F-150 SVT Raptor, an off-road
performance truck, which captured the "2009 Pickup Truck
of Texas" award from the Texas Auto Writers. The Ford
F-150 won the overall "Truck of Texas" award, the seventh
straight year a Ford truck has earned the honor
AUTOMOTIVE SECTOR
For the third quarter of 2009, Ford's Automotive sector reported a
pre-tax operating profit of $446 million, compared with a pre-tax
loss of $2.9 billion a year ago. The improvement primarily
reflects favorable net pricing, structural cost reductions, lower
material costs and improved market share, offset partially by
unfavorable exchange and lower industry volumes.
Worldwide Automotive revenue in the third quarter was
$27.9 billion, up $100 million from a year ago. The increase is
more than explained by favorable net pricing and higher volumes,
primarily in North America, offset partially by unfavorable
exchange. Total vehicle wholesales in the third quarter were
1,232,000, compared with 1,175,000 units a year ago.
Automotive structural cost reductions in the third quarter totaled
$1 billion, including $500 million in North America. Manufacturing
and engineering costs were $500 million lower, largely reflecting
the continued benefits of improved productivity, personnel
reduction actions primarily in North America and Europe, and
progress on the implementation of Ford's common global platforms
and product development processes. Pension and retiree health
care costs were lower, reflecting the effect of the UAW Retiree
Health Care VEBA agreement. Overall, Ford reduced Automotive
structural costs by $4.6 billion during the first nine months.
Net pricing was $1.9 billion favorable, primarily explained by
higher U.S. net pricing, reflecting the success of new products, a
continued disciplined approach on incentives and selective top-
line pricing.
(A) North America: For the third quarter, Ford North America
reported a pre-tax operating profit of $357 million,
compared with a loss of $2.6 billion a year ago. The
improvement was primarily explained by favorable net
pricing, lower material costs, structural cost
reductions, favorable series mix and improved market
share, offset partially by unfavorable exchange and lower
U.S. industry volume. Third quarter revenue was
$13.7 billion, up from $10.8 billion a year ago.
(B) South America: For the third quarter, Ford South America
reported a pre-tax operating profit of $247 million,
compared with a profit of $480 million a year ago. The
decrease is more than explained by unfavorable exchange,
primarily in Brazil and Argentina. Third quarter revenue
was $2.1 billion, down from $2.7 billion a year ago.
(C) Europe: For the third quarter, Ford Europe reported a
pre-tax operating profit of $193 million, compared with a
profit of $69 million a year ago. The improvement was
more than explained by structural cost reductions, lower
material costs and favorable net pricing, offset
partially by unfavorable volume and mix and exchange.
Third quarter revenue was $7.6 billion, down from
$9.7 billion a year ago.
(D) Asia Pacific Africa: For the third quarter, Ford Asia
Pacific Africa reported a pre-tax operating profit of
$27 million, compared with a profit of $4 million a year
ago. The increase primarily reflects favorable net
pricing, China joint venture profits, and cost
reductions, offset partially by unfavorable exchange.
Third quarter revenue was $1.5 billion, down from
$1.7 billion a year ago.
(E) Volvo: For the third quarter, Volvo reported a pre-tax
operating loss of $135 million, compared with a loss of
$458 million a year ago. The improvement is more than
explained by continued progress on cost reductions,
favorable exchange, and higher volume and mix. Third
quarter revenue was $3 billion, up from $2.9 billion a
year ago. Also, as announced last week, Ford confirmed
Geely as the preferred bidder in the ongoing discussions
concerning the possible sale of Volvo Cars.
(F) Other Automotive: Other Automotive, which consists
primarily of interest and financing-related costs, was a
third quarter pre-tax loss of $243 million.
FINANCIAL SERVICES SECTOR
For the third quarter, the Financial Services sector reported a
pre-tax operating profit of $661 million, compared with a profit
of $159 million a year ago.
(A) Ford Motor Credit Company: For the third quarter, Ford
Credit reported a pre-tax operating profit of
$677 million, compared with a pre-tax profit of
$161 million a year ago. The increase primarily
reflected lower residual losses due to higher auction
values, and lower provisions for credit losses, offset
partially by lower volume.
(B) Other Financial Services: For the third quarter, Other
Financial Services reported a pre-tax operating loss of
$16 million in the third quarter, compared with a loss of
$2 million a year ago.
OUTLOOK
Despite the severe global downturn, Ford said it continues to make
progress on all four pillars of its plan:
-- Aggressively restructure to operate profitably at the
current demand and changing model mix
-- Accelerate the development of new products that customers
want and value
-- Finance the plan and improve the balance sheet
-- Work together effectively as one team, leveraging Ford's
global assets
Ford said it remains on track to achieve or exceed all of its 2009
financial targets and almost all of its operational metrics. Ford
will also continue to pursue actions to improve its balance sheet.
Ford expects full-year 2009 U.S. industry sales will be about
10.6 million units, consistent with the guidance previously
communicated by the company. In Europe, Ford now expects that
full-year industry sales will be about 15.7 million units, which
is higher than its previous guidance.
Ford expects fourth quarter 2009 production to be up compared with
year-ago levels and third quarter 2009 production. This increase
is to return to planned dealer stock levels and match production
with market demand for Ford products.
Ford now expects full-year Automotive structural cost reductions
of about $5 billion, exceeding its full-year 2009 target. These
costs were reduced by $4.6 billion through the first nine months.
Going forward, Ford expects structural costs to be relatively
stable as the company has largely completed its significant
restructuring actions over the past four years.
The company said it expects full-year U.S. and Europe market share
to remain at about the same levels achieved during the first nine
months.
Ford expects Automotive operating-related cash flow to be positive
in the fourth quarter, based on the company's present planning
assumptions.
Ford now expects capital spending of about $5 billion, or slightly
less. Capital expenditures through the first nine months were
$3.4 billion; higher projected fourth quarter spending reflects
the timing of Ford's product launches as the company maintains its
product plans.
Ford Credit expects to be profitable in the fourth quarter and for
the full-year 2009. Next year, Ford Credit expects reduced
profits based on lower average receivables and the non-recurrence
of favorable 2009 factors.
Based on its recent performance and present planning assumptions,
Ford is changing its full-year 2011 guidance for total company and
North American Automotive operations from being "breakeven or
better" to "solidly profitable" on a pre-tax basis excluding
special items, with positive Automotive operating-related cash
flow.
While the company has confidence that the global economy will be
improving by 2011, the near-term growth outlook remains rather
uncertain. Looking at 2010, there is a high likelihood of a
substantial decrease in European industry volume as scrappage
programs expire. This decrease could more than offset U.S. sales
volumes, which may improve somewhat from this past quarter's
levels.
Ford expects to know more about the state of the global economic
recovery and its impact on 2010 auto industry volumes in the
coming months. Early next year, Ford will provide guidance on its
2010 planning assumptions and operational metrics when the company
releases its full-year 2009 results.
"The third quarter is one the entire Ford extended team can be
proud of because it proves that our product-led transformation is
working," Mr. Mulally said. "Leading indicators are now showing
signs of recovery in all of our major markets, however, consumer
confidence and labor market conditions remain a concern.
"Despite the continued economic headwinds, we remain confident
that we have the right plan and are taking the right actions to
transform Ford into a lean company that delivers profitable growth
for all our stakeholders," Mr. Mulally added.
A full-text copy of Ford's earnings release, including Ford's 2009
planning assumptions regarding the industry and operating metrics,
is available at no charge at http://ResearchArchives.com/t/s?480a
About Ford Motor
Headquartered in Dearborn, Michigan, Ford Motor Co. (NYSE: F) --
http://www.ford.com/-- manufactures or distributes automobiles in
200 markets across six continents. With about 260,000 employees
and about 100 plants worldwide, the company's core and affiliated
automotive brands include Ford, Jaguar, Land Rover, Lincoln,
Mercury, Volvo, Aston Martin, and Mazda. The company provides
financial services through Ford Motor Credit Company.
The Company has operations in Japan in the Asia Pacific region. In
Europe, the Company maintains a presence in Sweden, and the United
Kingdom. The Company also distributes its brands in various
Latin-American regions, including Argentina and Brazil.
* * *
As reported by the Troubled Company Reporter on April 15, 2009,
Standard & Poor's Ratings Services said it raised its ratings on
Ford Motor Co. and related entities, including the corporate
credit rating, to 'CCC+' from 'SD-'. The ratings on Ford Motor
Credit Co. are unchanged, at 'CCC+', and the ratings on FCE Bank
PLC, Ford Credit's European bank, are also unchanged, at 'B-',
maintaining the one-notch rating differential between FCE and its
parent Ford Credit. S&P said that the outlook on all entities is
negative.
Moody's Investors Service in December 2008 lowered the Corporate
Family Rating and Probability of Default Rating of Ford Motor
Company to Caa3 from Caa1 and lowered the company's Speculative
Grade Liquidity rating to SGL-4 from SGL-3. The outlook is
negative. The downgrade reflects the increased risk that Ford
will have to undertake some form of balance sheet restructuring in
order to achieve the same UAW concessions that General Motors and
Chrysler are likely to achieve as a result of the recently-
approved government bailout loans. Such a balance sheet
restructuring would likely entail a loss for bond holders and
would be viewed by Moody's as a distressed exchange and
consequently treated as a default for analytic purposes.
FORD MOTOR: CAW Members Approve New Deal; One Plant to Be Closed
----------------------------------------------------------------
Thousands of CAW members working at Ford facilities in Oakville,
Windsor, St. Thomas and Bramalea have voted in favor of a new
agreement, ratifying the deal by 83% during a series of meetings
held over the past two days. The deal was reached on October 30
between the two sides.
"No one should mistake workers' approval as satisfaction with the
new agreement," said CAW President Ken Lewenza. "Members had
faith in the union to negotiate the best agreement possible and
protect their interests over the long term, but the problems faced
by industry cannot be resolved at the bargaining table."
We need government and policy makers to wake up to the fact that
the country's industrial base is rapidly eroding and with it, the
entire middle class."
The deal is the second cost-cutting agreement reached between the
CAW and Ford in 18 months and includes cuts to benefits, a
reduction in vacation, break times and co-pays on health care, all
of which were pattern items from the agreements with Chrysler and
General Motors.
During the negotiations, Ford also announced it would be closing
the St. Thomas assembly plant in 2011, eliminating 1,400 jobs in
the already hard-hit community. Workers at the plant manufacture
the Ford Crown Victoria, Mercury Grand Marquis and Lincoln Town
Car.
"This has been an extremely stressful and difficult year for Ford
workers, just as it has been for hundreds of thousands of workers
right across the country," said Mike Vince, chairperson of the
CAW-Ford Master Bargaining Committee and president of CAW Local
200. "Our members have been dealing with terrible insecurity as a
result of financial crisis and recession and this new agreement
will give a greater deal of job security right until 2012."
The new agreement expires on September 17, 2012 and covers
approximately 7,000 Ford workers.
The results by location are:
CAW Local 1520, St. Thomas
Production: 80% in favor
Skilled Trades: 81% in favor
Combined total: 80% in favor
CAW Local 200, Windsor
Production: 81% in favor
Skilled Trades: 75% in favor
Combined total: 80% in favor
CAW Local 707, Oakville
Production: 90% in favor
Skilled Trades: 91% in favor
Combined total: 90% in favor
CAW Local 584, Bramalea
Total: 85% in favor
CAW Local 240
Office: 100% in favor
CAW Local 1324
Office: 83% in favor
Combined Totals:
Total Production: 84% in favor
Total Skilled Trades: 81% in favor
Total Office: 94% in favor
Overall total: 83% in favor
Headquartered in Dearborn, Michigan, Ford Motor Co. (NYSE: F) --
http://www.ford.com/-- manufactures or distributes automobiles in
200 markets across six continents. With about 260,000 employees
and about 100 plants worldwide, the company's core and affiliated
automotive brands include Ford, Jaguar, Land Rover, Lincoln,
Mercury, Volvo, Aston Martin, and Mazda. The company provides
financial services through Ford Motor Credit Company.
The Company has operations in Japan in the Asia Pacific region. In
Europe, the Company maintains a presence in Sweden, and the United
Kingdom. The Company also distributes its brands in various
Latin-American regions, including Argentina and Brazil.
* * *
Ford Motor carries a 'B3' long term corporate family rating and
'B3' probability of default rating, with stable outlook, from
Moody's. It carries 'CCC+' issuer credit ratings from Standard &
Poor's. it has a 'CCC' long term issuer default rating, with
positive outlook, from Fitch.
FORD MOTOR: UAW Members Reject Concessions Agreement
----------------------------------------------------
Dow Jones Newswires' Jeff Bennett reports that rank-and-file union
members rejected a concessions agreement with Ford Motor Co.
"Although some locals are still voting through Sunday, the United
Auto Workers national leadership has accepted the defeat, said
three union sources who asked not to be identified since they
don't officially speak for the UAW," Mr. Bennett says.
The report says workers disliked Ford's demand for a wage freeze
on entry level workers and the inability for the UAW to strike
over the life of the contract. They question the need for more
concessions as the auto maker's financial picture improves.
The leadership is now reviewing other options, these people said.
According to Mr. Bennett, UAW President Ron Gettelfinger told Dow
Jones Newswires on Friday he will not continue bargaining or
conduct a re-vote. Ford will now have to wait for any formal
changes until 2011 when the current contract expires, the report
says.
According to Mr. Bennett, the decision exposes Ford to higher
costs compared with competitors Chrysler Group LLC and General
Motors Co.
Dearborn workers voted 93% against the contract while 84% voted
down the changes in Kentucky, according to Dow Jones.
Headquartered in Dearborn, Michigan, Ford Motor Co. (NYSE: F) --
http://www.ford.com/-- manufactures or distributes automobiles in
200 markets across six continents. With about 260,000 employees
and about 100 plants worldwide, the company's core and affiliated
automotive brands include Ford, Jaguar, Land Rover, Lincoln,
Mercury, Volvo, Aston Martin, and Mazda. The company provides
financial services through Ford Motor Credit Company.
The Company has operations in Japan in the Asia Pacific region. In
Europe, the Company maintains a presence in Sweden, and the United
Kingdom. The Company also distributes its brands in various
Latin-American regions, including Argentina and Brazil.
* * *
Ford Motor carries a 'B3' long term corporate family rating and
'B3' probability of default rating, with stable outlook, from
Moody's. It carries 'CCC+' issuer credit ratings from Standard &
Poor's. it has a 'CCC' long term issuer default rating, with
positive outlook, from Fitch.
FORD MOTOR: Raising $3.3-Bil. to Pay Down Credit Line
-----------------------------------------------------
According to Bloomberg News, Ford Motor said it is raising as much
as $3.3 billion, while paying down and pushing back the maturity
of a $10.7 billion line of credit to strengthen its balance sheet.
Ford said it is seeking to pay down 25 percent of the revolver and
move back by two years, to 2013, the maturity of the remaining $8
billion liability. Ford also said it is offering as much as $2.3
billion in senior notes that can be converted to common stock or
cash in 2016. Ford also in December will offer as much as $1
billion in common shares through broker-dealers.
"We expect the moves will enhance Ford's automotive liquidity and
over time reduce the company's debt burden, providing an
additional cushion given the still uncertain state of the
economy," Ford Chief Executive Officer Alan Mulally said in a
statement.
Third Quarter Results
Ford Motor Company said November 2 that it reported net income of
$997 million, or 29 cents per share, an improvement of $1.2
billion from the third quarter of 2008. Pre-tax operating profit
totaled $1.1 billion, an improvement of $3.9 billion from a year
ago. It is Ford's first pre-tax operating profit since the first
quarter of 2008.
Ford North America posted a pre-tax operating profit of $357
million, its first profitable quarter since the first quarter of
2005.
Ford reduced Automotive structural costs by $1 billion, bringing
the total reduction to $4.6 billion through the first nine months
of 2009, and exceeding the full-year target of $4 billion
A strong product lineup drove market share gains in North America,
South America and Europe as well as continued improvements in
transaction prices and margins.
It ended the quarter with $23.8 billion of Automotive gross cash,
up $2.8 billion from the end of second quarter 2009++
It also achieved positive Automotive operating-related cash flow
of $1.3 billion for the third quarter, a $2.3 billion improvement
over the second quarter
Ford Credit reported a pre-tax operating profit of $677 million, a
$516 million improvement from a year ago.
Ford now expects to be solidly profitable in 2011, excluding
special items, with positive operating-related cash flow
"Our third quarter results clearly show that Ford is making
tremendous progress despite the prolonged slump in the global
economy," said Ford President and CEO Alan Mulally. "Our solid
product lineup is leading the way in all markets. While we still
face a challenging road ahead, our One Ford transformation plan is
working and our underlying business continues to grow stronger."
Ford's third quarter revenue was $30.9 billion, down $800 million
from the same period a year ago. Automotive revenue is up $100
million from a year ago. This improvement was offset by a decrease
in Ford Credit's revenue reflecting a decline in receivables.
Ford reduced its Automotive structural costs by $1 billion in the
quarter, largely driven by lower manufacturing and engineering
costs, which included benefits from improved productivity,
personnel reduction actions primarily in North America and Europe,
and progress on implementing its common global platforms and
product development processes. Through the first nine months,
Ford has achieved $4.6 billion in Automotive structural cost
reductions, exceeding its full-year 2009 target of $4 billion.
Ford finished the third quarter with $23.8 billion in Automotive
gross cash, compared with $21 billion at the end of the second
quarter of 2009. Automotive operating-related cash flow was $1.3
billion positive during the third quarter of 2009, an improvement
of $2.3 billion from the second quarter 2009. Automotive
operating-related cash flow was $3.4 billion negative during the
first nine months.
"The Ford team delivered another solid quarter of results with
strong contributions from all our business regions," said Lewis
Booth, Ford executive vice president and chief financial officer.
"Positive cash flow, a stronger balance sheet and a third quarter
operating profit are evidence that Ford is meeting the global
economic challenges."
A full-text copy of the November 2 news release is available for
free at http://researcharchives.com/t/s?4819
Ford Credit Risk Falls to Seven-Week Low
Shannon D. Harrington at Bloomberg reported November 2 that the
cost to protect against a default by Ford Motor dropped to the
lowest in seven weeks as the only major U.S. automaker to avoid
bankruptcy posted its first operating profit since early 2008.
According to the Nov. 2 report, citing broker Phoenix Partners
Group, credit-default swaps on Ford fell 2 percentage points to
11% upfront. That means it would cost $1.1 million initially and
$500,000 annually to protect $10 million of Ford debt for five
years. The cost typically declines as investor confidence in the
company's creditworthiness improves. The swaps are trading at the
lowest level since Sept. 16, according to CMA
DataVision.
Bloomberg relates that Ford's third-quarter pretax profit of $1.1
billion on an adjusted basis, or 26 cents a share, beat the 20
cents-a-share adjusted loss expected by an average of 11 analysts
surveyed by Bloomberg.
Fitch Ratings raised its outlook on the automaker to "positive"
from "stable" and affirmed its CCC issuer-default rating, citing
"better-than-expected progress on Ford's cost- reduction program,
production and inventory discipline."
About Ford Motor
Headquartered in Dearborn, Michigan, Ford Motor Co. (NYSE: F) --
http://www.ford.com/-- manufactures or distributes automobiles in
200 markets across six continents. With about 260,000 employees
and about 100 plants worldwide, the company's core and affiliated
automotive brands include Ford, Jaguar, Land Rover, Lincoln,
Mercury, Volvo, Aston Martin, and Mazda. The company provides
financial services through Ford Motor Credit Company.
The Company has operations in Japan in the Asia Pacific region. In
Europe, the Company maintains a presence in Sweden, and the United
Kingdom. The Company also distributes its brands in various
Latin-American regions, including Argentina and Brazil.
* * *
Ford Motor carries a 'B3' long term corporate family rating and
'B3' probability of default rating, with stable outlook, from
Moody's. It carries 'CCC+' issuer credit ratings from Standard &
Poor's. it has a 'CCC' long term issuer default rating, with
positive outlook, from Fitch.
FREEDOM COMMUNICATIONS: Files Chapter 11 Reorganization Plan
------------------------------------------------------------
Freedom Communications has filed its proposed Plan of
Reorganization and related Disclosure Statement with the U.S.
Bankruptcy Court for the District of Delaware in Wilmington.
"The filing of the Plan of Reorganization and Disclosure Statement
represents an important milestone in our Chapter 11 case. We are
especially pleased that we were able to reach this key step in our
restructuring process in just two months," Freedom Chief Executive
Officer, Burl Osborne said. "It brings us closer to successfully
completing our debt restructuring and positioning the Company for
future opportunities and challenges that lie ahead in the rapidly
changing media industry."
As previously announced, on September 1, 2009, Freedom and its
subsidiaries filed voluntary petitions for reorganization under
Chapter 11 of the United States Bankruptcy Code to implement a
restructuring agreement reached with a steering committee of
Freedom's lenders.
The Company will seek Court approval of the Disclosure Statement
and related voting solicitation procedures. Court approval, if
granted, will permit the Company to solicit acceptances for the
proposed Plan and seek confirmation of the proposed Plan by the
Bankruptcy Court.
This release is not intended to be, and should not be in any way
construed as, a solicitation of votes on any plan.
The Chapter 11 petitions were filed in the U.S. Bankruptcy Court
for the District of Delaware, in Wilmington. T he case number is
09-13046. The Company has also established a restructuring
information line at 800-299-1960. Additional information
regarding the filings, including the Company's plan of
reorganization and disclosure statement can also be found at:
http://www.loganandco.com
The Chapter 11 Plan
Pre-bankruptcy, Freedom Communications reached agreement with its
lenders on a restructuring of the Company's debt under Chapter 11.
Pursuant to the plan support agreement, lenders owed $771 million
will receive $325 million in two secured term loans plus 100% of
the stock, subject to dilution. Unsecured creditors would split
$5 million in cash if they don't object to the plan, and nothing
if they object. Suppliers who continue to provide goods and
services will receive full payment for their prepetition claims.
Existing stockholders would get 2% of the new stock, along with
warrants for 10%, if they don't object to the plan. The Plan
Support Agreement will be terminated by the lenders if the Debtors
do not obtain confirmation of the Plan within five months.
Deadline to consummate the Plan is 11 months after the Petition
Date.
About Freedom Communications
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.
GENERAL MARITIME: Moody's Assigns Corporate Family Rating at 'B1'
-----------------------------------------------------------------
Moody's Investors Service assigned ratings to General Maritime
Corporation; corporate family and probability of default, each of
B1 and Speculative Grade Liquidity Rating of SGL-3. Moody's also
assigned a rating of B3 to the planned issuance of $300 million of
Senior Unsecured Notes due 2017. The outlook is stable.
GenMar is the holding company parent of General Maritime
Subsidiary Corporation and Arlington Tankers Ltd., the
intermediate holding companies of GenMar's vessel-owning
subsidiaries. The proceeds of the Notes will be used to retire
first lien senior secured revolving debt including the
$230 million Arlington Tanker facility due January 2011. GenMar
and its lenders have agreed to modify the terms of the
$850 million credit facility due October 2012. The committed
amount of this facility will reduce to $750 million, the financial
covenants will be made less restrictive and the restrictions on
subsidiaries guaranteeing other debt will be lifted. The
effectiveness of the amendment is conditioned on the completion of
the Notes offering. Each of the intermediate holding companies
and all operating subsidiaries will guarantee the Notes.
The B1 corporate family rating considers GenMar's demonstrated
success in managing its tanker operations and vessel purchase and
sale activities over the course of the shipping cycle. Sharp
swings in freight rates can cause the credit metrics of GenMar to
range between those of the low Ba and low single-B rating
categories. The B1 rating reflects Moody's belief that GenMar's
stable base of mostly major oil company customers will provide a
base level of funds from operations that adequately cushions its
debt service obligations through the current trough of the tanker
cycle, which could run for the duration of 2010. "The current
charter book and very low planned capital expenditures should
allow the company to achieve positive free cash flow generation in
2010, notwithstanding anticipated still weak freight rates
relative to long-run historical levels," said Moody's Analyst
Jonathan Root.
The SGL-3 rating indicates that Moody's expects GenMar to maintain
adequate liquidity. Moody's expects about $50 million of
availability under the revolving credit. GenMar's chartering
strategy will allow it to achieve higher operating cash flows well
into 2010 than it would achieve had it been operating its fleet
mostly in the spot market. However, operating cash flows are
likely to face pressure in the near term as charters expire in a
period of weak freight rates, which will weigh on operating cash
flow generation. Moody's believes freight rates will remain under
pressure because of increasing vessel capacity that outpaces
demand growth, some of which will be met from liquidations of
existing crude and petroleum inventories. The pace and scope of
fleet expansion will dictate the future path of free cash flow
generation. GenMar has demonstrated its savviness as an asset
player and Moody's believes that the company will seek to
capitalize on the current market fundamentals by increasing the
size of its fleet through vessel acquisitions. This should lead
to higher debt than GenMar models in its financing business case
projections; although credit metrics should benefit by 2011 as
earnings improve with strengthening freight rates.
The B1 Corporate Family Rating looks through the current tanker
rate trough. The stable outlook anticipates that GenMar will
maintain its position as a leading tanker owner and operator and
that credit metrics will begin to strengthen by 2011, with
improving sector fundamentals. The outlook also considers
expected stability of a base level of operating cash flow because
of the tenured, mostly large oil-company customer base. The
outlook could be changed to positive if GenMar is able to
meaningfully reduce debt to assure Debt to EBITDA remains below
4.0 times through troughs of the cycle or sustains Retained Cash
Flow to Net Debt above 15 percent. The outlook could be changed
to negative or the ratings directly downgraded if Retained Cash
Flow to Net Debt is sustained below 10%, if Funds from Operations
+ Interest to Interest is sustained below 2.5 times or if Debt to
EBITDA remains above 5.2 times. A meaningfully-sized increase
above the current dividend payout that is debt-funded could also
exert downwards pressure on the ratings as could an acquisition
valued in excess of $250 million that is primarily funded with
debt.
Moody's last rated GenMar through January 5, 2006, when it
withdrew its ratings upon the payoff by GenMar of its then
outstanding unsecured notes. Moody's maintained a B1 corporate
family rating at the time of withdrawal.
Issuer: General Maritime Corporation
Assignments:
-- Probability of Default Rating, Assigned B1
-- Senior Unsecured Regular Bond/Debenture, Assigned B3, LGD5,
88%
-- Speculative Grade Liquidity Rating, Assigned SGL-3
Reinstatements:
-- Corporate Family Rating, Reinstated to B1
Outlook Actions:
-- Outlook, Changed To Stable From Rating Withdrawn
General Maritime Corporation, a Marshall Islands corporation with
headquarters in New York, New York, is a leading owner and
operator of crude and petroleum carriers.
GENERAL MARITIME: S&P Affirms 'BB-' Corporate Credit Rating
-----------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'BB-' long-term
corporate rating on General Maritime Corp. The outlook remains
negative.
At the same time, S&P assigned a 'B' rating to the company's
proposed $300 million senior unsecured notes, two notches below
the corporate credit rating, and a '6' recovery rating, indicating
S&P's expectation that lenders will receive negligible (0%-10%)
recovery in a payment default scenario. As of June 30, 2009,
General Maritime had about $952 million of lease-adjusted debt.
The ratings on New York City-based General Maritime reflect the
company's aggressively leveraged financial profile, limited
financial flexibility, and participation in the capital-intensive,
highly fragmented, volatile, and competitive shipping industry.
Positive credit factors include the company's established market
position in the ocean transportation of crude oil and strong
customer base with long-standing relationships with oil majors.
The negative outlook reflects S&P's view that the company's cash
generation and financial profile could further deteriorate if
tanker rates do not recover as S&P expects over the next year.
The negative outlook also reflects S&P's concerns regarding the
potential for narrower cushion under the company's financial
covenant requirements, despite recent amendments.
"We could lower S&P's ratings if a downturn in earnings, due to
weaker-than-expected tanker rates, causes funds flow to debt to
consistently fall to around 10%," said Standard & Poor's credit
analyst Funmi Afonja. S&P could also lower the ratings if
operating results or debt incurrence further erodes the limited
cushion under its financial covenants. S&P could revise the
outlook to stable if earnings and credit metrics strengthen as a
result of reduced debt or more favorable than expected tanker
rates.
"Because credit ratios are stretched for the rating, S&P does not
anticipate an upgrade over the next year," she continued.
GEORGIANA REMOLLO SANTOS: Voluntary Chapter 11 Case Summary
-----------------------------------------------------------
Joint Debtors: Georgiana Remollo Santos
Rizalde NMN Santos
4558 Silva Ave
San Jose, CA 95118
Bankruptcy Case No.: 09-59410
Chapter 11 Petition Date: October 30, 2009
Court: United States Bankruptcy Court
Northern District of California (San Jose)
Judge: Roger L. Efremsky
Debtors' Counsel: Robert C. Borris Jr., Esq.
Law Offices of Robert C. Borris Jr.
21550 Foothill Blvd. 2nd Fl.
Hayward, CA 94541
Tel: (510) 581-7111
Email: RBorrisjr@aol.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
According to the schedules, the Company has assets of $1,165,000,
and total debts of $1,686,228.
The Debtors did not file a list of their 20 largest unsecured
creditors when they filed their petition.
The petition was signed by the Joint Debtors.
GRANADA LAKES: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Granada Lakes LLC
3827 SW Hall Blvd
Beaverton, OR 97005
Bankruptcy Case No.: 09-39098
Chapter 11 Petition Date: October 30, 2009
Court: United States Bankruptcy Court
District of Oregon
Judge: Trish M. Brown
Debtor's Counsel: Ava L. Schoen, Esq.
888 SW 5th Ave #1600
Portland, OR 97204
Tel: (503) 802-2143
Email: ava.schoen@tonkon.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
A full-text copy of the Debtor's petition, including a list of its
20 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/orb09-39098.pdf
The petition was signed by David Butler, managing member of the
Company.
GREATER ATLANTIC: Closing of MidAtlantic Merger Moved to Nov. 15
----------------------------------------------------------------
Greater Atlantic Financial Corp., MidAtlantic Bancorp, Inc., and
GAF Merger Corp., a Virginia corporation formed to facilitate the
merger, on October 30, 2009, entered into the Second Amendment to
their Agreement and Plan of Merger to extend to November 15, 2009,
the date on which the Agreement and Plan of Merger may be
terminated if the merger is not consummated.
On October 26, 2009, Greater Atlantic, MidAtlantic and GAF Merger
extended the expiration date for the offer to purchase for cash
not less than 505,040 and up to 649,151 Greater Atlantic Capital
Trust I 6.50% Cumulative Convertible Trust Preferred Securities,
to 5:00 p.m., Eastern Time, on November 6, 2009.
As of October 26, holders of Securities had tendered an aggregate
of 551,691 Securities, which exceeds the 505,040 minimum
Securities required to be tendered. The tender offer remains
subject to a number of additional conditions, including that
MidAtlantic provide the necessary funding to finance the payment
for the Securities and that all required regulatory and security
holder approvals be received. Greater Atlantic will provide
further public notice of the satisfaction of these conditions when
available.
Holders of the Securities who participate in the tender offer will
receive $1.05 in cash for each Security validly tendered. Holders
who have previously tendered their Securities continue to have the
right to revoke such tenders at any time prior to the new
expiration date by complying with the revocation procedures set
forth in the Offer to Purchase relating to the tender offer.
Requests for copies of the Offer to Purchase and related documents
may be directed to Laurel Hill Advisory Group, LLC, the
information agent for the tender offer, at (917) 338-3181.
As reported by the Troubled Company Reporter, Greater Atlantic on
October 5, 2009, commenced a consent solicitation to obtain the
consent of holders of 6.50% Cumulative Convertible Trust Preferred
Securities of Greater Atlantic Capital Trust I to a supplemental
indenture to the Indenture, dated as of March 20, 2002, by and
between Greater Atlantic and Wilmington Trust Company, as
Indenture Trustee, governing the junior subordinated debentures
related to the Securities.
The terms of the supplemental indenture would permit Greater
Atlantic to purchase the Securities in the tender offer despite
the fact that Greater Atlantic exercised its right under the
Indenture to defer interest payments on the debentures.
Greater Atlantic is offering to pay $1.05 per share for the 6.50%
Cumulative Convertible TruPS. The Company has said about 960,738
shares of 6.50% Cumulative Convertible TruPS are outstanding.
On June 15, 2009, Greater Atlantic entered into a definitive
Agreement and Plan of Merger with MidAtlantic Bancorp, Inc., and
GAF Merger Corp. Pursuant to the Agreement and Plan of Merger,
MidAtlantic will acquire GAFC.
As a result of certain provisions of the federal securities laws,
MidAtlantic and Acquisition Sub are deemed to be co-bidders in the
tender offer.
A full-text copy of the First Amendment of Agreement and Plan of
Merger, dated as of September 29, 2009, is available at no charge
at http://ResearchArchives.com/t/s?467d
About Greater Atlantic
Greater Atlantic Financial Corp. is a bank holding company whose
principal activity is the ownership and management of Greater
Atlantic Bank. The bank originates commercial, mortgage and
consumer loans and receives deposits from customers located
primarily in Virginia, Washington, D.C. and Maryland. The bank
operates under a federal bank charter and provides full banking
services.
As of June 30, 2009, the Company had $204,596,000 in total assets
and $216,209,000 in total liabilities, resulting in $11,613,000 in
stockholders' deficit.
Going Concern Doubt
The Troubled Company Reporter reported on January 21, 2009, that
BDO Seidman, LLP, in Richmond, Virginia, in a letter dated
January 12, 2009, to the Board of Directors and Stockholders of
Greater Atlantic Financial Corp. expressed substantial doubt about
the company's ability to continue as a going concern. The firm
audited the consolidated statements of financial condition of
Greater Atlantic Financial Corp. and its subsidiaries as of
September 30, 2008, and 2007 and the related consolidated
statements of operations, stockholders' equity (deficit),
comprehensive income (loss) and cash flows for each of the two
years in the period ended September 30, 2008.
HALEH MERRIKH: Case Summary & 15 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Haleh Merrikh
1932 Kirby Road
McLean, VA 22101
Bankruptcy Case No.: 09-18890
Chapter 11 Petition Date: October 28, 2009
Court: United States Bankruptcy Court
Eastern District of Virginia (Alexandria)
Judge: Stephen S. Mitchell
Debtor's Counsel: Richard J. Stahl, Esq.
Stahl Zelloe, P.C.
11350 Random Hills, Road, Suite 700
Fairfax, VA 22030
Tel: (703) 691-4940
Fax: (703) 691-4942
Email: r.stahl@stahlzelloe.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
According to the schedules, the Company has assets of at least
$3,214,510, and total debts of $4,135,850.
A full-text copy of the Debtor's petition, including a list of its
15 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/vaeb09-18890.pdf
The petition was signed by Haleh Merrikh.
HARRAH'S ENTERTAINMENT: Net Loss Widens to $1.62-Bil. in Q3 2009
----------------------------------------------------------------
Harrah's Entertainment, Inc., reported wider net loss of
$1.62 billion for the three months ended September 30, 2009, from
a net loss of $122.5 million for the same period in 2008.
The company said its 2009 third-quarter results declined due
primarily to the impact of the recession on customers'
discretionary spending. Revenues fell to $2.28 billion from
$2.65 billion in the 2008 third quarter. The loss from operations
was $1.05 billion, compared with income from operations of
$349.6 million in the 2008 third quarter. Included in the third
quarter 2009 loss from operations was a charge of $1.33 billion
for impairments of goodwill and non-amortizing intangible assets.
Excluding the impairment charges, income from operations would
have been $278.4 million, compared with income from operations of
$349.6 million in the 2008 third quarter. The loss from
continuing operations, net of tax, for the 2009 third quarter was
$1.62 billion, compared with a loss of $123.2 million in the year-
ago quarter.
Revenues for the first nine months of 2009 declined 13.3% to
$6.81 billion from $7.85 billion in the first nine months of 2008.
The loss from operations was $758.5 million in the 2009 first nine
months, compared with income from operations of $1.07 billion in
the prior-year period. Income from continuing operations, net of
tax, for the first nine months of 2009 was $548.4 million,
compared with a net loss of $495.8 million in the first nine
months of 2008. Income from continuing operations, net of tax,
for the nine months ended September 30, 2009, includes i) an
impairment charge for goodwill and non-amortizing intangible
assets totaling $1.63 billion ($1.56 billion net of taxes); and
ii) a pre-tax gain of $4.28 billion ($2.59 billion net of taxes)
related to the early extinguishment of debt, primarily in the 2009
second quarter.
During the 2009 third quarter, Harrah's wholly owned subsidiary
Harrah's Operating Company, Inc., issued $720 million aggregate
principal amount of senior-secured notes due 2017, with net
proceeds used to repay a portion of Harrah's existing term-loan
and revolving-credit indebtedness under HOC's senior-secured
credit facilities.
During the 2009 third quarter, HOC also announced both a cash
tender offer for up to $160 million of its outstanding senior
notes maturing in 2010 and 2011 and the placement of a new
$1.0 billion term loan tranche for its credit facilities. The
tender offer expired on October 21, 2009, and approximately
$45 million of notes were tendered. The term loan was drawn on
October 15, 2009, with the proceeds used to repay most of Harrah's
revolving-credit indebtedness under HOC's senior-secured credit
facilities and to provide additional liquidity.
During the third quarter 2009, Harrah's recorded a total charge of
$1.33 billion for the impairment of goodwill and other intangible
assets, the majority of which related to properties in the Las
Vegas, Atlantic City, and Illinois/Indiana regions. Total
impairment charges for goodwill and other intangible assets were
$1.63 billion for the nine months ended September 30, 2009.
Interest expense decreased in the 2009 third-quarter and year-to-
date periods compared with 2008 due to lower debt levels resulting
from HOC debt exchanges completed in December 2008 and April 2009
and repurchases of debt in open-market transactions.
As a result of exchange offers and open-market purchases during
the second quarter, pre-tax gains of $4.3 billion on early
extinguishment of debt were recognized and are included in the
year-to-date results.
For the 2009 third quarter, the Company recorded a tax provision
of $128.9 million on a pre-tax loss from continuing operations of
$1.492 billion, compared to a tax benefit of $46.0 million on a
pre-tax loss from continuing operations of $169.2 million in the
comparable period of 2008. For the nine months ended
September 30, 2009, the Company recognized a tax provision of
$1.591 billion on pre-tax income from continuing operations of
$2.139 billion, which equates to an effective tax rate of 74.4%.
The primary difference between the Company's year-to date recorded
provision and the provision that would have resulted from applying
the U.S. statutory tax rate of 35% to the Company's pre-tax income
from continuing operations is primarily attributable to non-
deductible impairments of goodwill and adjustments to uncertain
tax positions.
"During the third quarter, we continued our focus on aligning
expenses with revenues and addressing our capital structure to
cope with the protracted economic slump," said Gary Loveman,
Harrah's chairman, president and chief executive officer.
"We conducted another round of financing activities to shore up
our balance sheet and enhance our financial flexibility, which has
enabled us to take advantage of some exciting growth
opportunities," Mr. Loveman said. "We increased our ownership of
Harrah's Chester to approximately 95 percent and announced an
agreement to purchase the Thistledown racetrack in Cleveland.
"In addition, we agreed to a seven-year contract extension with
ESPN to televise the World Series of Poker," Mr. Loveman said.
"We're looking forward to ESPN's telecast of the November 9, 2009
WSOP Main Event finale, when nine players will split more than
$27 million in prize money, including a first-place prize of $8.5
million.
"The third quarter was challenging from an operations standpoint,
as lower spending by consumers affected by the global recession
continued to impact revenues," Mr. Loveman said.
"After 38 years of great accomplishment, Eastern Division
President Carlos Tolosa will retire from Harrah's Entertainment at
the end of the year, concluding one of the longest and most
distinguished careers in the history of our company," Mr. Loveman
said. "Carlos' retirement will complete an 11-year professional
collaboration with me during which he earned my admiration,
gratitude and unyielding respect for him as a friend and
colleague. On behalf of all of the Harrah's employees, I thank
him sincerely and wish him well."
A full-text copy of Harrah's earnings release is available at no
charge at http://ResearchArchives.com/t/s?47ef
About Harrah's Entertainment
Las Vegas, Nevada-based Harrah's Entertainment, Inc. --
http://www.harrahs.com/-- operates nearly 40 casinos across the
United States, primarily under the Harrah's(R), Caesars(R) and
Horseshoe(R) brand names; Harrah's also owns the London Clubs
International family of casinos and the World Series of Poker(R).
Private equity firms Apollo Global Management and TPG Capital LP
acquired Harrah's in January for $31 billion.
As of June 30, 2009, the Company had $30.7 billion in total assets
and total current liabilities of $1.71 billion, long-term debt of
$19.3 billion, deferred credits and other of $718.2 million,
deferred income taxes of $5.74 billion, and preferred stock of
$2.46 billion.
* * *
As reported by the Troubled Company Reporter on September 25,
2009, Moody's Investors Service assigned a Caa1 rating to the
$1.0 billion senior secured term loan to be issued by Harrah's
Operating Company. Moody's also affirmed Harrah's Entertainment's
Caa3 Corporate Family rating, Caa3 Probability of default rating
and all of the long-term debt ratings of HET and HOC, Inc.
The TCR said June 15, 2009, that Standard & Poor's Ratings
Services raised its corporate credit ratings on Harrah's
Entertainment and Harrah's Operating to 'CCC+' from 'CCC'.
HARRAH'S ENTERTAINMENT: Purchases CMBS Loans at Steep Discount
--------------------------------------------------------------
Harrah's Entertainment, Inc., reports that on October 22, 2009, it
entered into purchase and sale agreements with certain lenders to
acquire mezzanine loans under its commercial mortgaged-back
securities financing. The Company will purchase CMBS Loans using
up to an aggregate amount of $250 million of cash, at a purchase
price of between 25 and 30 cents per $1.00 principal amount of
CMBS Loans, depending on certain circumstances. Any CMBS Loan
purchased by the Company in such purchases will be cancelled.
About Harrah's Entertainment
Las Vegas, Nevada-based Harrah's Entertainment, Inc. --
http://www.harrahs.com/-- operates nearly 40 casinos across the
United States, primarily under the Harrah's(R), Caesars(R) and
Horseshoe(R) brand names; Harrah's also owns the London Clubs
International family of casinos and the World Series of Poker(R).
Private equity firms Apollo Global Management and TPG Capital LP
acquired Harrah's in January for $31 billion.
As of June 30, 2009, the Company had $30.7 billion in total assets
and total current liabilities of $1.71 billion, long-term debt of
$19.3 billion, deferred credits and other of $718.2 million,
deferred income taxes of $5.74 billion, and preferred stock of
$2.46 billion.
* * *
As reported by the Troubled Company Reporter on September 25,
2009, Moody's Investors Service assigned a Caa1 rating to the
$1.0 billion senior secured term loan to be issued by Harrah's
Operating Company. Moody's also affirmed Harrah's Entertainment's
Caa3 Corporate Family rating, Caa3 Probability of default rating
and all of the long-term debt ratings of HET and HOC, Inc.
The TCR said June 15, 2009, that Standard & Poor's Ratings
Services raised its corporate credit ratings on Harrah's
Entertainment and Harrah's Operating to 'CCC+' from 'CCC'.
HAWAII SUPERFERRY: Court OKs 2nd Amended Plan of Liquidation
------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware has
approved HSF Holding, Inc., and Hawaii Superferry, Inc.'s second
amended Joint Plan of Liquidation.
The Debtors' Plan provides for the liquidation and conversion of
all of the Debtors' remaining assets to cash and the distribution
of the net proceeds therefrom to creditors holding Allowed Claims,
in accordance with the relative priorities set forth in the
Bankruptcy Code. The Plan contemplates the appointment of a Plan
Administrator, inter alia, to implement the terms of the Plan and
make distributions in accordance therewith.
The Plan will be funded by (i) available cash on the effective
date and (ii) funds available after the effective date from, among
other things, the liquidation of the Debtors' remaining assets,
the prosecution and resolution of causes of action, and any
release of cash from the Disputed Hawaii Superferry General
Unsecured Claims Reserve after the effective date.
A copy of the Second Amended Plan is available for free at:
http://researcharchives.com/t/s?4814
Wilmington, Delaware-based HSF Holding Inc. operates as the parent
company of Hawaii Superferry, Inc., a Hawaiian inter-island ferry
service expected to commence operations in early 2007. The
Company is planning to use the latest generation of large, high-
speed roll-on/roll-off catamaran ferries. The ferries will be
used to transport travellers from island to island as well as
transport agricultural and bulk goods.
The Company and its affiliate filed for Chapter 11 on May 30,
2009 (Bankr. D. Del. Case Nos. 09-11901 and 09-11902). David B.
Stratton, Esq., and Evelyn J. Meltzer, Esq., at Pepper Hamilton
LLP represent the Debtors in their restructuring efforts. Craig
A. Wolfe, Esq., at Kelley Drye & Warren LLP, is the Committee's
proposed lead counsel. Adam Hiller, Esq., Brian Arban, Esq., and
Michelle Berkeley-Ayres, Esq., at Atlantic Law, is the Committee's
proposed local counsel. When the Debtors sought protection from
their creditors, they listed between $100 million and $500 million
each in assets and debts.
HAYES LEMMERZ: Court OKs Sale of Units' Assets to Harvey Holdings
-----------------------------------------------------------------
The Hon. Mary F. Walrath of the U.S. Bankruptcy Court for the
District of Delaware authorized Hayes Lemmerz International, Inc.,
and its affiliates' to sell substantially all the tangible and
intangible assets of Hayes Lemmerz International - Laredo, Inc.,
and certain assets of HLI Operating Company, Inc. and Hayes
Lemmerz International Technical Center, Inc., to Harvey Holdings,
LLC, the stalking horse bidder.
The sale, pursuant to Section 363 of the Bankruptcy Code, will be
free and clear of all liens, interests and encumbrances.
As reported in the Troubled Company Reporter on Sept. 24, 2009,
Hayes Lemmerz International - Laredo, Inc., including the equity
interests in its non-debtor subsidiary, Industrias Fronterizas
HLI, S.A. de C.V., own and operate the powertrains manufacturing
business in Mexico. The principal assets of HLI Laredo include
facilities, personal property, contracts, and the equity interests
of Industrias. Industrias is the Mexican company which holds the
"maquiladoras", manufacturing facilities operating in Mexico under
special customs treatment.
TCR reported that the Debtors decided to divest themselves of the
Powertrain Business as part of their restructuring efforts to
focus on their core wheel business.
The Court also ordered that the assumption and assignment of the
Debtors' contracts with Robert Bosch LLC will remain subject to
either (I) an agreement with Bosch, the purchaser and the Debtors
that resolves the adequate assurance objection raised by Bosch;
or (ii) a determination by the Court overruling the Bosch
objection. The hearing on the Bosch objection will be continued
to Nov. 19, 2009, at 9:30 a.m. (prevailing Eastern Time.)
About Hayes Lemmerz International
Originally founded in 1908, Hayes Lemmerz International, Inc.
(NasdaqGM: HAYZ) is a worldwide producer of aluminum and steel
wheels for passenger cars and light trucks and of steel wheels for
commercial trucks and trailers. The Company is also a supplier of
automotive powertrain components. The Company has global
operations with 23 facilities, including business, sales offices
and manufacturing facilities, located in 12 countries around the
world. The Company sells products to every major North American,
Asian and European manufacturer of passenger cars and light trucks
and to commercial highway vehicle customers throughout the world.
The Company and certain affiliates filed for bankruptcy on
May 11, 2009 (Bankr. D. Del. Case No. 09-11655) after reaching
agreements with lenders holding a majority of the Company's
secured debt. The Company's principal bankruptcy attorneys are
Skadden, Arps, Slate, Meagher & Flom, LLP. Lazard Freres & Co.,
LLC, serves as the Company's financial advisors. AlixPartners,
LLP, serves as the Company's restructuring advisors. The Garden
City Group, Inc., serves as the Debtors' claims and notice agent.
As of January 31, 2009, the Debtors had total assets of
$1,336,600,000 and total debts of $1,405,200,000.
This is the Company's second trip to the bankruptcy court, dubbed
a Chapter 22, which was precipitated by an unprecedented slowdown
in industry demand and a tightening of credit markets.
HEALTHSOUTH CORP: Amends Credit Agreement and Extends Term Loan
---------------------------------------------------------------
HealthSouth Corporation reports that on October 23, 2009, it
entered into a second amendment in connection with the Credit
Agreement, dated March 10, 2006, as amended as of March 1, 2007,
by and among the Company, as borrower, JPMorgan Chase Bank, N.A.,
as Administrative Agent and Collateral Agent and the other parties
thereto.
A segment of the lenders under the term loan that has a current
outstanding balance of approximately $750 million will extend the
maturity for $300 million of that loan from March 2013 to
September 2015, contingent on certain conditions. The portion of
the term loan maturing in 2013 will remain at the current interest
rate of Libor plus 2.25 percent, while the portion with extended
maturity will bear the interest rate of Libor plus 3.75 percent.
The credit agreement has been amended to allow, among other
things, the Company to issue senior secured and unsecured notes in
the bond market and increase the amounts the Company is able to
spend on acquisitions and selected debt repurchases.
"The amendment and extension were very well received by our
lenders," said John Workman, Executive Vice President and Chief
Financial Officer of HealthSouth. "As a result, the $300 million
extension was significantly oversubscribed."
"The debt profile of the Company was greatly improved by the
modification, giving the Company greater financial flexibility to
manage its overall capital structure and liquidity, and greater
ability to increase shareholder value," said Ed Fay, Senior Vice
President - Finance and Treasurer of HealthSouth.
Certain terms of the Credit Agreement were amended and the Credit
Agreement was restated in its entirety.
A summary of the material provisions of the Amendment is set
forth:
1) Converts $300 million of outstanding Term Loans into a new
class of term loans, which (a) bear interest at, at the
option of the Company, ABR plus 2.75% per annum or
Adjusted LIBOR plus 3.75% per annum, (b) amortize at 1.00%
per year, payable quarterly, and (c) mature on March 15,
2014, subject to an automatic extension to September 10,
2015 if the existing senior notes of the Company due in
2014 have been repaid or refinanced prior to March 15,
2014;
2) Permits future extensions of all or a portion of the Term
Loans, Revolving Loans and Synthetic LC Commitments,
subject to certain restrictions;
3) Permits issuance of senior notes, both secured, on a pari
passu basis with indebtedness incurred under the Credit
Agreement, by liens on the Collateral and unsecured; and
4) Other changes, including increases to certain baskets
under the restrictive covenants in the Credit Agreement,
that are more consistent with the Company's financial
position.
Some of the lenders under the Credit Agreement and certain of
their affiliates have engaged and in the future may engage in
investment banking transactions, including securities offerings,
and in general financing and commercial banking transactions with,
and the provision of services to, the Company and its affiliates
in the ordinary course of business and otherwise for which they
have received, and will in the future receive, customary fees.
A full-text copy of the AMENDED AND RESTATED CREDIT AGREEMENT
dated as of March 10, 2006, as amended and restated as of October
23, 2009, among HEALTHSOUTH CORPORATION; The Lenders Parties;
JPMORGAN CHASE BANK, N.A., as Administrative Agent and Collateral
Agent; CITICORP NORTH AMERICA, INC. and MERRILL LYNCH, PIERCE,
FENNER & SMITH INCORPORATED, as Co-Syndication Agents; and
DEUTSCHE BANK SECURITIES INC., GOLDMAN SACHS CREDIT PARTNERS L.P.,
And WACHOVIA BANK, NATIONAL ASSOCIATION, as Co-Documentation
Agents; and J.P. MORGAN SECURITIES INC., CITIGROUP GLOBAL MARKETS
INC., MERRILL LYNCH & CO., and MERRILL LYNCH, PIERCE, FENNER &
SMITH INCORPORATED, as Co-Lead Arrangers and Joint Bookrunners, is
available at no charge at http://ResearchArchives.com/t/s?480f
About HealthSouth Corp.
Based in Birmingham, Alabama, HealthSouth Corporation --
http://www.healthsouth.com/-- is the nation's largest provider of
inpatient rehabilitative healthcare services. Operating in 26
states across the country and in Puerto Rico, HealthSouth serves
patients through its network of inpatient rehabilitation
hospitals, long-term acute care hospitals, outpatient
rehabilitation satellites, and home health agencies.
HealthSouth had $1.88 billion in total assets; and $2.55 billion
in total liabilities, and $387.4 million in convertible perpetual
preferred stock; resulting in $1.05 billion in stockholders'
deficit at June 30, 2009. The Company's balance sheet at June 30
also showed strained liquidity, with $628.2 million in total
current assets, including $49.8 million in cash and cash
equivalents, on $706.1 million in total current liabilities.
Healthsouth carries a 'B2' long term corporate family rating from
Moody's and a 'B' long term foreign issuer credit rating from
Standard & Poor's.
HEALTHSOUTH CORP: Launches New CFO Search After Workman Resigns
---------------------------------------------------------------
HealthSouth Corporation reports that on October 21, 2009, John L.
Workman, its Executive Vice President and Chief Financial Officer,
notified the Company that he intends to resign from his positions
with HealthSouth and its subsidiaries and affiliates. His
resignation is effective November 17, 2009. Mr. Workman's
resignation was not related to the Company's financial or
operating results or to any disagreements or concerns regarding
the Company's financial or reporting practices.
The Company will begin a national search for a new Chief Financial
Officer and will be considering internal and external candidates.
On October 22, 2009, the Board of Directors of the Company
appointed Andy Price to serve as interim Chief Accounting Officer.
Mr. Price has served since 2004 as Senior Vice President -
Accounting, for the Company. From 1996 to 2004, Mr. Price served
as Senior Vice President and Corporate Controller of Centennial
HealthCare Corporation, an Atlanta-based operator of skilled
nursing centers and home health agencies. From 1989 to 1996, Mr.
Price was an Audit Manager with the public accounting firm of BDO
Seidman. Mr. Price graduated from Florida State University with a
bachelor's degree in Accounting and is a Certified Public
Accountant.
Except as to benefits the continuation of which are required by
law, Mr. Workman will not be eligible to participate in or receive
any benefits available to Company employees following the
effective date of his resignation. Additionally, pursuant to the
terms of the applicable benefit plans and award agreements, any
unvested stock options and restricted shares held by Mr. Workman
as of November 17, 2009 will be forfeited and canceled, as
applicable, and he will have 90 days from that date to exercise
any vested stock options.
"John has been a valuable member of our management team as well as
a great colleague and friend. He made many important
contributions to the turnaround and repositioning of HealthSouth,"
said Jay Grinney, President and Chief Executive Officer. "All of
us at HealthSouth wish John and his wife, Beth, the very best in
their new endeavors."
"While we launch a search for a new Chief Financial Officer, we
will continue to benefit from the strong team that John has
developed, especially from the leadership of Ed Fay, Senior Vice
President - Finance and Treasurer and Andy Price, Senior Vice
President - Accounting; Andy will serve as the Company's Chief
Accounting Officer. Andy and Ed bring considerable experience to
their respective positions and will ensure a seamless transition
as we search for John's replacement," added Mr. Grinney.
About HealthSouth Corp.
Based in Birmingham, Alabama, HealthSouth Corporation --
http://www.healthsouth.com/-- is the nation's largest provider of
inpatient rehabilitative healthcare services. Operating in 26
states across the country and in Puerto Rico, HealthSouth serves
patients through its network of inpatient rehabilitation
hospitals, long-term acute care hospitals, outpatient
rehabilitation satellites, and home health agencies.
HealthSouth had $1.88 billion in total assets; and $2.55 billion
in total liabilities, and $387.4 million in convertible perpetual
preferred stock; resulting in $1.05 billion in stockholders'
deficit at June 30, 2009. The Company's balance sheet at June 30
also showed strained liquidity, with $628.2 million in total
current assets, including $49.8 million in cash and cash
equivalents, on $706.1 million in total current liabilities.
Healthsouth carries a 'B2' long term corporate family rating from
Moody's and a 'B' long term foreign issuer credit rating from
Standard & Poor's.
HIDDEN CREEK LDHA: Case Summary & 14 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: Hidden Creek LDHA
1066 30th Street, NW
Washington, DC 20007
Bankruptcy Case No.: 09-00966
Chapter 11 Petition Date: October 30, 2009
Court: United States Bankruptcy Court
United States Bankruptcy Court for the District of Columbia
(Washington, D.C.)
Judge: Bankruptcy Judge S. Martin Teel, Jr.
Debtor's Counsel: Janet M. Nesse, Esq.
Stinson, Morrison & Hecker LLP
1150 18th St., NW, Suite 800
Washington, DC 20036
Tel: (202) 785-9100
Email: jnesse@stinson.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
A full-text copy of the Debtor's petition, including a list of its
14 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/dcb09-00966.pdf
The petition was signed by John Freeman.
HORIZON NATURAL: Massey Settles Lawsuit With Over 200 Miners
------------------------------------------------------------
The Associated Press reports that more than 200 miners who weren't
rehired after Massey Energy Co. bought Horizon Natural Resources
Company's mine have settled an age discrimination lawsuit against
it for $8.75 million. According to The AP, the settlement covers
229 miners, including 82 union miners the company has since been
ordered to rehire, and has been approved by Fayette County Circuit
Judge Paul Blake Jr. The AP says that about 82 will each receive
$38,000, while the remaining miners will get $19,000.
Massey Energy Company, headquartered in Richmond, Virginia, is the
fourth largest coal company in the United States based on produced
coal revenue.
Headquartered in Ashland, Kentucky, Horizon Natural Resources
(f/k/a AEI Resources Holding, is one of the United States' largest
producers of steam (bituminous) coal. The Company filed for
chapter 11 protection on February 28, 2002 (Bankr. E.D. Ky. Case
No. 02-14261). Ronald E Gold, Esq. represent the Debtors in their
restructuring efforts. When the Company filed for protection from
their creditors, they listed at least $100 million in total assets
and $100 million in total debts.
HOWELL EQUIPMENT: Voluntary Chapter 11 Case Summary
---------------------------------------------------
Debtor: Howell Equipment, Inc.
7109 Hwy 1 Bypass
Natchitoches, LA 71457
Bankruptcy Case No.: 09-81467
Chapter 11 Petition Date: October 28, 2009
Court: United States Bankruptcy Court
Western District of Louisiana (Alexandria)
Debtor's Counsel: Bradley L. Drell, Esq.
POB 6118
Alexandria, LA 71307-6118
Tel: (318) 445-6471
Email: bdrell@goldweems.com
Estimated Assets: $500,001 to $1,000,000
Estimated Debts: $1,000,001 to $10,000,000
According to the schedules, the Company has assets of at least
$540,667, and total debts of $1,253,058.
The Debtor did not file a list of its 20 largest unsecured
creditors when it filed its petition.
The petition was signed by Larry Howell, president of the Company.
IA GLOBAL: June 30 Balance Sheet Upside-Down by $9.5 Million
------------------------------------------------------------
IA Global, Inc.'s consolidated balance sheets at June 30, 2009,
showed $26.6 million in total assets and $36.1 million in total
liabilities, resulting in a $9.5 million stockholders' deficit.
The Company's consolidated balance sheets at June 30, 2009, also
showed strained liquidity with $16.6 million in total current
assets available to pay $35.0 million in total current
liabilities.
The Company reported a net loss of $3.6 million on revenue of
$13.4 million for the three months ended June 30, 2009, compared
with net income of $730,844 on revenue of $19.7 million in the
same period last year.
The Company attributed the decrease in revenue to the reduction in
American Insurance Group (AIG) revenues, termination of the
Company's NTT contracts and a softening of revenues from
telecommunication contracts during the three months ended June 30,
2009.
The Company had an operating loss of $3.3 million for the three
months ended June 30, 2009, compared with operating income of
$1.8 million during the same period last year.
A full-text copy of the Company's consolidated financial
statements for the three months ended June 30, 2009, is available
for free at http://researcharchives.com/t/s?4812
Liquidity and Capital Resources
The Company had cash of approximately $1.7 million and total
indebtedness of $15.8 million as of June 30, 2009.
Net cash used in operating activities for the three months ended
June 30, 2009, was $2.4 million. This amount was primarily
related to the net loss of $3.5 million, an increase in accounts
receivable of $2.6 million, an increase in notes receivable of
$1.0 million and a decrease in deferred revenue of $1.2 million,
offset by depreciation and amortization and other non-cash
expenses of $186,894, and an increase in accrued liabilities and
payroll taxes of $5.2 million.
Net cash provided by financing activities for the three months
ended June 30, 2009, was $513,044.
During the three months ended June 30, 2009, Global Hotline
entered into loans of approximately $2.3 million and repaid loans
of $2.1 million. Proceeds from sale of preferred shares were
$317,000 while proceeds from sale of common stock were $40,050.
Going Concern Doubt
The Company has incurred operating losses for the three months
ended June 30, 2009, and 2008, the year ended March 31, 2009, the
transition period for the three months ended March 31, 2008, and
for the years ended December 31, 2007, and 2006, and has an
accumulated deficit of $63.2 million and $59.6 million and a
working capital deficit of approximately $18.4 million and
$14.5 million as of June 30, 2009, and March 31, 2009.
In addition, in connection with loans payable that the Company's
fully owned subsidiary, Global Hotline, Inc., entered into, the
equity shares of this subsidiary currently held by the lender of
these loans as collateral is being challenged by the Company. If
these shares should not be successfully recovered, the Company's
claim of ownership in this subsidiary may be limited.
These issues raise substantial doubt about the Company's ability
to continue as a going concern.
About IA Global
Based in San Francisco, IA Global, Inc. (AMEX: IAO) --
http://www.iaglobalinc.com/-- is a business process outsourcing
("BPO") and financial services company targeting the B2B and B2C
markets in the Asia region. The Company was incorporated in
Delaware on November 12, 1998. The Company's operating units are
located primarily in Japan, China, Philippines and Australia.
In Japan, IA Global is 100% owner of Global Hotline, Inc., a BPO
company, operating several call centers providing primarily
outbound telemarketing services for telecommunications and
insurance products. In the Philippines, IA Global is the 100%
owner of Global Hotline Philippines Inc., a BPO company providing
inbound and outbound telemarketing services, and collocation
facilities to a variety of industries. In the Asia region, the
Company has equity investments of 20.25% in Slate Consulting Co
Ltd (Slate), 36% in Australian Secured Financial Limited and 16%
in Taicom Securities Co. Ltd.
IDEARC INC: Paulson Wants to Get Almost Half of Common Shares
-------------------------------------------------------------
Reuters reports that Paulson & Co is seeking to acquire almost
half of Idearc Inc.'s common shares when it emerges from
bankruptcy by offering creditors cash for the shares they are to
get under the proposed reorganization plan. Idearc said in a
statement that Paulson won't beneficially own more than 45
percent" of the new company's common stock. Reuters relates that
Paulson would have the right to name one director to Idear's board
under the proposal. Reuters states that a hearing on the deal is
set for November 18, while a separate hearing on the Company's
plan of reorganization is set for December 9.
Idearc filed a motion with the U.S. 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.
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 $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 percent 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 percent
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.
About Idearc
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.
IPCS INC: Silver Point Capital Ceases to be 5% Shareholder
----------------------------------------------------------
In a regulatory filing with the Securities and Exchange
Commission, Silver Point Capital, L.P., Edward A. Mul‚ and Robert
J. O'Shea discloses that as October 29, 2009, each of them has
ceased to be the beneficial owner of more than five percent of the
common stock of iPCS, Inc.
Silver Point Capital, L.P., a Delaware limited partnership, is the
investment manager of Silver Point Capital Fund, L.P. (the "Fund")
and Silver Point Capital Offshore Fund, Ltd. (the "Offshore
Fund"). Silver Point Capital Management, LLC is the general
partner of Silver Point Capital, L.P. Each of Mr. Mul‚ and
Mr. O'Shea is a member of Silver Point Capital Management, LLC and
has voting and investment power with respect to the common stock
held by the Fund and the Offshore Fund.
A full-text copy of iPCS Inc.'s Schedule 13G/A is available for
free at http://researcharchives.com/t/s?47ec
Schaumburg, Illinois-based iPCS, Inc. (NASDAQ:IPCS) is a holding
company that operates as a PCS Affiliate of Sprint through three
wholly owned subsidiaries, iPCS Wireless, Inc., Horizon Personal
Communications, Inc. and Bright Personal Communications Services,
LLC, each having its own affiliation agreements with Sprint PCS.
Pursuant to these affiliation agreements with Sprint PCS, the
Company offers wireless personal communications services services
using Sprint's spectrum under the Sprint brand name on a wireless
network built and operated to Sprint's specifications at iPCS's
own expense. iPCS owns and is responsible for operating, managing
and maintaining its wireless network and has the exclusive right
to provide digital PCS services under the Sprint brand name in its
territory.
iPCS has assets totaling $553,866,000 against debts aggregating
$588,308,000 as of June 30, 2009.
In October 2009, Standard & Poor's Ratings Services placed iPCS
Inc., including its 'B' corporate credit rating, on CreditWatch
with positive implications following an agreement to be merged
with Sprint Nextel (BB/Negative/--). Moody's Investors Service
affirmed iPCS, Inc.'s B3 corporate family and probability of
default ratings, B1 rating of the Company's 1st lien notes and the
Caa1 rating of 2nd lien notes.
IRENE ALVAREZ: Case Summary & 5 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Irene Alvarez
18550 Hatteras Street, #15
Tarzana, CA 91356
Bankruptcy Case No.: 09-24306
Chapter 11 Petition Date: October 28, 2009
Court: United States Bankruptcy Court
Central District of California (San Fernando Valley)
Judge: Maureen Tighe
Debtor's Counsel: M Jonathan Hayes, Esq.
Law Office of M Jonathan Hayes
9700 Reseda Bl Ste201
Northridge, CA 91324
Tel: (818) 882-5600
Fax: (818) 882-5610
Email: jhayes@polarisnet.net
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
A full-text copy of Ms. Alvarez's petition, including a list of
her 5 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/cacb09-24306.pdf
The petition was signed by Ms. Alvarez.
JAMES GRIBBLE: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------
Joint Debtors: James Wallace Gribble, Jr.
Nancy Leeds Gribble
425 Manns Harbor Drive
Apollo Beach, FL 33572
Bankruptcy Case No.: 09-24879
Chapter 11 Petition Date: October 30, 2009
Court: United States Bankruptcy Court
Middle District of Florida (Tampa)
Judge: K. Rodney May
Debtors' Counsel: Buddy D. Ford, Esq.
115 N. MacDill Avenue
Tampa, FL 33609-1521
Tel: (813) 877-4669
Fax: (813) 877-5543
Email: Buddy@tampaesq.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
According to the schedules, the Company has assets of at least
$1,313,867, and total debts of $1,950,185.
A full-text copy of the Debtors' petition, including a list of
their 20 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/flmb09-24879.pdf
The petition was signed by the Joint Debtors.
JETBLUE AIRWAYS: Files Shelf Registration Statement
---------------------------------------------------
JetBlue Airways Corporation filed a shelf registration statement
with the Securities and Exchange Commission on October 29, 2009.
The registration statement consists of two separate prospectuses:
-- the first prospectus relates to the offer and sale from
time to time by JetBlue, or one or more selling security
holders, of common stock, preferred stock, debt
securities, depositary shares, warrants, stock purchase
contracts, stock purchase units and subscription rights,
and
-- the second prospectus relates to the offer and sale from
time to time by JetBlue of pass through certificates.
JetBlue intends to use the net proceeds from the sale of the
securities for general corporate purposes, including among other
possible uses, the acquisition of aircraft and construction of
facilities on or near airports, the repayment or repurchase of
short-term or long-term debt or lease obligations and other
capital expenditures. JetBlue may also use the proceeds for
temporary investments until JetBlue needs them for general
corporate purposes. JetBlue will not receive any of the proceeds
from the sale of securities by any selling security holders.
JetBlue's capital structure consists of 500,000,000 authorized
shares of common stock, par value $.01 per share, and 25,000,000
shares of preferred stock, par value $.01 per share. As of
September 30, 2009, 290,305,387 shares of JetBlue common stock
were outstanding, no shares of preferred stock were outstanding,
and 175,220,682 shares of JetBlue common stock were reserved for
issuance under its convertible debt obligations and benefits
plans.
A full-text copy of the registration statement is available at no
charge at http://ResearchArchives.com/t/s?4811
About JetBlue Airways
Based in Forest Hills, New York, JetBlue Airways Corporation
(NASDAQ: JBLU) -- http://www.jetblue.com/-- is a passenger
airline company, currently serving 58 cities with 550 daily
flights. JetBlue operates primarily on point-to-point routes with
its fleet of 107 Airbus A320 aircraft and 35 EMBRAER 190 aircraft.
For the year ended December 31, 2008, JetBlue was the 7th largest
passenger carrier in the United States based on revenue passenger
miles as reported by those airlines.
* * *
As reported in the Troubled Company Reporter on October 28, 2009,
Moody's Investors Service affirmed the Caa2 corporate family and
probability of default ratings of JetBlue Airways Corp., the Ca
senior unsecured rating on the 3.75% Senior Convertible Notes due
2035 and its ratings on the company's three outstanding series of
Enhanced Equipment Trust Certificates. Moody's also assigned an
SGL-3 Speculative Grade Liquidity rating to JetBlue and changed
the ratings outlook to stable from negative.
JIMMIE RAY PENNELL: Case Summary & 13 Largest Unsecured Creditors
-----------------------------------------------------------------
Debtor: Jimmie Ray Pennell
PO Box 510
Garner, NC 27529
Bankruptcy Case No.: 09-09460
Chapter 11 Petition Date: October 29, 2009
Court: United States Bankruptcy Court
Eastern District of North Carolina (Wilson)
Judge: J. Rich Leonard
Debtor's Counsel: Danny Bradford, Esq.
Paul D. Bradford, PLLC
dba Bradford Law Offices
6512 Six Forks Road, Suite 304
Raleigh, NC 27615
Tel: (919) 758-8879
Fax: (919) 803-0683
Email: dbradford@bradford-law.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
According to the schedules, the Company has assets of at least
$1,768,515, and total debts of $1,928,833.
A full-text copy of Mr. Pennell's petition, including a list of
his 13 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/nceb09-09460.pdf
The petition was signed by Mr. Pennell.
J.K. BRUNNER: Voluntary Chapter 11 Case Summary
-----------------------------------------------
Debtor: J.K. Brunner, Inc.
11308 Renner Road
Woodsboro, MD 21798
Bankruptcy Case No.: 09-30968
Chapter 11 Petition Date: October 30, 2009
Court: United States Bankruptcy Court
District of Maryland (Greenbelt)
Debtor's Counsel: Richard H. Gins, Esq.
The Law Office of Richard H. Gins, LLC
3 Bethesda Metro Center, Suite 530
Bethesda, MD 20814
Tel: (301) 718-1078
Fax: (301) 718-8359
Email: richard@ginslaw.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $500,001 to $1,000,000
The Debtor did not file a list of its 20 largest unsecured
creditors when it filed its petition.
The petition was signed by J. Keith Brunner, president of the
Company.
JOHN SHULER: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------
Debtor: John F. Shuler
1136 New Berlin Road
Jacksonville, FL 32218
Bankruptcy Case No.: 09-09241
Chapter 11 Petition Date: October 30, 2009
Court: United States Bankruptcy Court
Middle District of Florida (Jacksonville)
Debtor's Counsel: Jeffrey M. Hanly, Esq.
Florida Debt & Mortgage Relief
4741 Atlantic Blvd Suite E-4
Jacksonville, FL 32207
Tel: (904) 398-1777
Fax: (904) 398-7922
Email: jhanly@fdmrgroup.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
According to the schedules, the Company has assets of at least
$1,564,172, and total debts of $4,012,338.
A full-text copy of Mr. Shuler's petition, including a list of his
20 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/flmb09-09241.pdf
The petition was signed by Mr. Shuler.
JS ENTERPRISES: Case Summary & 6 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: JS Enterprises, LLC
1038 61st St
Tuscaloosa, AL 35405
Bankruptcy Case No.: 09-72913
Chapter 11 Petition Date: November 1, 2009
Court: United States Bankruptcy Court
Northern District Of Alabama (Tuscaloosa)
Debtor's Counsel: Melinda Murphy Dionne, Esq.
Dionne & Dionne
9217 Old Greensboro Rd
Tuscaloosa, AL 35405
Tel: (205) 349-5911
Fax: (205) 449-7159
Email: dionnemelcourt@gmail.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
A full-text copy of the Debtor's petition, including a list of its
6 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/alnb09-72913.pdf
The petition was signed by Jeff Sealey.
LDG SOUTH: Must File Missing Schedules by Nov. 6
------------------------------------------------
LDG South, LLC, has until November 6, 2009, to file its summary of
schedules, schedules or statement of financial affairs. Failure
to file the missing schedules with proper declaration within 15
days from the filing of its bankruptcy petition will result in
dismissal of the bankruptcy case.
The Debtor also hasn't filed a statement of compensation as
required by Section 329 of the U.S. Bankruptcy Code. The Debtor's
counsel must file a statement of compensation or face sanctions or
the issuance of a show cause order.
Naples, Florida-based LDG South, LLC, filed for Chapter 11
bankruptcy protection on October 22, 2009 (Bankr. M.D. Fla. Case
No. 09-24038). Stephen R. Leslie, Esq., at Stichter, Riedel,
Blain & Prosser assists the Company in its restructuring efforts.
The Company listed $10,000,001 to $50,000,000 in assets and
$10,000,001 to $50,000,000 in liabilities.
LANDAMERICA FIN'L: Capital Title's 341 Meet Scheduled for Nov. 13
-----------------------------------------------------------------
The United States Trustee for Region 4 will convene a meeting of
the creditors of Debtor Capital Title Group, Inc., at 10:00 a.m.
Eastern Time, on November 13, 2009 at the Office of the United
States Trustee, at 701 E. Broad Street, Suite 4300, in Richmond,
Virginia.
This is the first meeting of creditors of CTG required under
Section 341(a) of the Bankruptcy Code in the Debtor's bankruptcy
case.
Attendance by CTG's creditors at the meeting is welcome, but not
required. The Section 341(a) meeting offers the creditors a one-
time opportunity to examine the Debtor's representative under
oath about the Debtor's financial affairs and operations that
will be of interest to the general body of creditors.
The meeting may be continued or adjourned from time to time by
notice at the meeting, without further written notice to the
creditors.
About LandAmerica Financial Group
LandAmerica Financial Group, Inc., provides real estate
transaction services with offices nationwide and a vast network of
active agents. LandAmerica and its affiliates operate through
approximately 700 offices and a network of more than 10,000 active
agents throughout the world, including Mexico, Canada, the
Caribbean, Latin America, Europe, and Asia.
LandAmerica Financial Group and its affiliate LandAmerica 1031
Exchange Services, Inc. filed for Chapter 11 protection Nov. 26,
2008 (Bankr. E.D. Va. Lead Case No. 08-35994). Attorneys at
Willkie Farr & Gallagher LLP and McGuireWoods LLP serve as co-
counsel. Zolfo Cooper is the restructuring advisor. Epiq
Bankruptcy Solutions serves as claims and notice agent.
Attorneys at Akin Gump Strauss Hauer & Feld LLP and Tavenner &
Beran, PLC, serve as counsel to the Creditors Committee of 1031
Exchange. Bingham McCutchen LLP and LeClair Ryan serve as counsel
to the Creditors Committee of LFG.
In its bankruptcy petition, LFG listed total assets of
$3,325,100,000, and total debts of $2,839,800,000 as of Sept. 30,
2008.
On March 6, 2009, affiliate LandAmerica Assessment Corporation,
aka National Assessment Corporation, filed its own petition for
Chapter 11 relief. Affiliate LandAmerica Title Company filed for
for Chapter 11 relief on March 27, 2009. LandAmerica Credit
Services, Inc., filed for Chapter 11 in July 2009.
Bankruptcy Creditors' Service, Inc., publishes LandAmerica
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by LandAmerica Financial and its affiliate LandAmerica
1031 Exchange Services, Inc. (http://bankrupt.com/newsstand/or
215/945-7000)
LANDAMERICA FIN'L: Files Plan Exhibit, Further Amends Plan
----------------------------------------------------------
LandAmerica Financial Group, Inc., and its debtor affiliates
submitted to the U.S. Bankruptcy Court for the Eastern District
of Virginia on October 20, 2009, an exhibit to their Amended
Joint Chapter 11 Plan. The Plan Exhibit contains a list of the
prepetition intercompany claims, which will be treated as Allowed
General Unsecured Claims against the applicable Debtor, except
for Intercompany Claims between LES and LFG, which will be
treated as described under the Plan. A full-text copy of the
Plan Exhibit is available for free at:
http://bankrupt.com/misc/LandAm_PlanEx_Sched22.pdf
Accordingly, on October 24, 2009, the Debtors delivered to the
Court a further Amended Joint Chapter 11 Plan. The Amended Plan
provides that all prepetition Intercompany Claims, as identified
and in the amounts shown on Intercompany Claims Schedule, will be
treated as Allowed General secured Claims against the applicable
Debtor, except for (a) Intercompany Claims between LES and LFG,
which will be treated as described under the Amended Plan, and
(b) Intercompany Claims for which Capital Title Group, Inc.,
Nations Holding Group, or LandAmerica Title Company is either a
borrower or a lender, which Intercompany Claims will not be
entitled to any Plan Distributions unless and until the Claims
become Allowed Claims either pursuant to an order of the Court or
a settlement under the Amended Plan.
The Amended Plan further provides that each of the Debtors is
prohibited from asserting, and agrees to release, any Claim
against the other, including a Claim arising under Chapter 5 of
the Bankruptcy Code; provided, however, that nothing in the
Amended Plan will release any Claims held by or against Capital
Title Group, Inc., Nations Holding Group, or LandAmerica Title
Company.
A blacklined copy of the October 24 Amended Plan is available for
free at http://bankrupt.com/misc/LandAm_AmendedPlan1024.pdf
About LandAmerica Financial Group
LandAmerica Financial Group, Inc., provides real estate
transaction services with offices nationwide and a vast network of
active agents. LandAmerica and its affiliates operate through
approximately 700 offices and a network of more than 10,000 active
agents throughout the world, including Mexico, Canada, the
Caribbean, Latin America, Europe, and Asia.
LandAmerica Financial Group and its affiliate LandAmerica 1031
Exchange Services, Inc. filed for Chapter 11 protection Nov. 26,
2008 (Bankr. E.D. Va. Lead Case No. 08-35994). Attorneys at
Willkie Farr & Gallagher LLP and McGuireWoods LLP serve as co-
counsel. Zolfo Cooper is the restructuring advisor. Epiq
Bankruptcy Solutions serves as claims and notice agent.
Attorneys at Akin Gump Strauss Hauer & Feld LLP and Tavenner &
Beran, PLC, serve as counsel to the Creditors Committee of 1031
Exchange. Bingham McCutchen LLP and LeClair Ryan serve as counsel
to the Creditors Committee of LFG.
In its bankruptcy petition, LFG listed total assets of
$3,325,100,000, and total debts of $2,839,800,000 as of Sept. 30,
2008.
On March 6, 2009, affiliate LandAmerica Assessment Corporation,
aka National Assessment Corporation, filed its own petition for
Chapter 11 relief. Affiliate LandAmerica Title Company filed for
for Chapter 11 relief on March 27, 2009. LandAmerica Credit
Services, Inc., filed for Chapter 11 in July 2009.
Bankruptcy Creditors' Service, Inc., publishes LandAmerica
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by LandAmerica Financial and its affiliate LandAmerica
1031 Exchange Services, Inc. (http://bankrupt.com/newsstand/or
215/945-7000)
LANDAMERICA FIN'L: LES to Sell Tranche A Notes for $9.6MM
---------------------------------------------------------
Debtor LandAmerica 1031 Exchange Services, Inc., asks the United
States Bankruptcy for the Eastern District of Virginia to
approve:
(i) the sale of certain Tranche A Notes back to the Issuer,
subject to higher and better offers, a related break-up
fee and expense reimbursement; and
(ii) the marketing and sale process for certain auction rate
securities held by LES.
Prior to the Petition Date, LES invested a portion of its funds
in investment grade securities that were rated A or stronger at
the time of the investment, including certain auction rate
securities, which were backed by government-guaranteed student
loans.
LES currently holds 20 tranches of subordinate student loan
auction rate securities with a total face value of
$201.7 million. Two tranches of the Auction Rate Securities held
by LES are Student Loan Asset-Backed Notes -- the Tranche A Notes
-- issued by the Issuer. In addition to the Tranche A Notes, LES'
portfolio of Auction Rate Securities includes 18 additional
tranches of Auction Rate Securities. In an effort to maximize
the value of its assets, LES has decided to market and sell the
Auction Rate Securities.
As widely publicized, the market for the Auction Rate Securities
froze in early 2008. As a result, LES has been unable to
liquidate its Auction Rate Securities at a price near their par
value. Thus, with the aggregate amount of the cash and par value
of the ARS held by LES exceeding the value of all funds received
from LES' customers, LES' inability to sell or borrow against
those ARS ultimately precipitated its decision to cease
additional customer transactions, terminate operations and file
its Chapter 11 case, John H. Maddock III, Esq., at McGuireWoods
LLP, in Richmond Virginia, relates.
Due to the specialized nature of and the limited buyer base that
exists for Auction Rate Securities, LES has determined that it
will be in the best interests of its estate, creditors and other
parties-in-interest to facilitate the marketing and sale of the
Auction Rate Securities through a broker that specializes in
these type of transactions.
In December 2008, Moody's Investor Services placed the Tranche A
Notes on "watch for downgrade." A significant downgrade of the
Tranche A Notes will cause the Issuer to default on its
obligations to make interest payments on the Tranche A Notes and
set off a series of events that will likely result in the
ultimate liquidation of the Issuer, Mr. Maddock points out.
Upon liquidation of the Issuer, holders of the Issuer's senior
notes will retain substantially all of the liquidation proceeds,
leaving little, if any, recovery for holders of subordinated
Tranche A Notes like LES. Moody's has recently informed the
issuer of the Tranche A Notes that the Tranche A Notes will be
downgraded if substantial changes are not made to improve the
economics of the Issuer. To avoid a downgrade of the Tranche A
Notes, the Issuer has offered to repurchase the Tranche A Notes
from LES pursuant to the terms of that certain purchase agreement
dated October 16, 2009.
The Purchase Agreement includes these salient provisions:
(a) Purchase of Tranche A Notes. On the closing date, LES
will sell to the Issuer of the Tranche A Notes and any
rights and benefits incident to the ownership, other than
LES' right to commence litigation against certain third
parties, including parties that marketed and sold the
Tranche A Notes to LES;
(b) Purchase Price. The Purchase Price of the Tranche A Notes
will total $9,640,000 in cash plus accrued interest as of
the date of the Purchase Agreement, representing
approximately 48.2% of the $20,000,000 par value of the
Tranche A Notes;
(c) Higher and Otherwise Better Offers. The Tranche A Notes
Sale is subject to the receipt of higher or otherwise
better offers through the ARS Sale Procedures; and
(d) Break-up Fee & Expense Reimbursement: In the event LES
consummates an agreement with respect to an alternative
transaction, LES will pay the Buyer (i) a break-up fee in
the amount equal to 3% of the Purchase Price, and (ii) the
Buyer's reasonable out-of-pocket fees and expenses
incurred in connection with the transactions contemplated
by the Purchase Agreement not to exceed $100,000, pursuant
to the terms of the Purchase Agreement. The Break-up Fee
and Expense Reimbursement will be paid no later than two
business days after the date that LES consummates an
alternative transaction.
SecondMarket Brokerage Services
SecondMarket, Inc., a licensed broker-dealer, provides a trading
platform that brings together buyers and sellers in a market for
illiquid assets, including auction rate securities. Because
SecondMarket has significant knowledge of the market for auction
rate securities, LES has determined that SecondMarket is well-
positioned to market and sell the Auction Rate Securities.
Therefore, the Debtor seeks to retain the services of
SecondMarket pursuant to the terms of a brokerage services
agreement between the Debtor and SecondMarket.
It is contemplated that LES will list each of the Auction Rate
Securities, including, for the avoidance of doubt, the Tranche A
Notes and the Additional Notes, for sale through SecondMarket's
platform at par value. Potential buyers will have an opportunity
to view the necessary documentation for each of the Auction Rate
Securities in order to complete their own due diligence and to
submit bid proposals on the listed Auction Rate Securities
investments.
LES will have absolute discretion to accept, reject or counter
any bid proposal. Upon LES being authorized to accept the bid
pursuant to the ARS Sale Procedures and LES' acceptance of the
bid, SecondMarket and LES will enter into a purchase agreement,
for the sale of the Auction Rate Securities.
SecondMarket will earn a commission equal to 2% of the proceeds
of each sale of the Auction Rate Securities and will be paid upon
the transfer of the Auction Rate Securities to the third-party
buyer in exchange for the purchase price.
ARS Sale Procedures
Pursuant to Bankruptcy Rules 2002(a) and (c), the Debtor is
required to notify its creditors of the process to market and
sell the Auction Rate Securities. In order to comply with this
requirement and to allow maximum flexibility to market and sell
the Auction Rate Securities in a manner that the Debtor believes
will provide the maximum value to the Debtor's estate, the Debtor
proposes these uniform procedures for the marketing and sale of
the Auction Rate Securities.
Once SecondMarket has obtained a bid from a potential purchaser
for one or more of the Auction Rate Securities, the Debtor will
determine whether to accept the bid and sell the subject Auction
Rate Securities. The Debtor seeks the authority to complete the
ARS sales without further Court approval, but subject to these
procedures:
(a) Sales may only be completed upon five days' written notice
to (a) the U.S. Trustee; (b) counsel for the Creditors'
Committees; and (c) all parties that previously expressed
an interest in purchasing the Auction Rate Securities and
their counsel, if known to the Debtor.
(b) Any notice must include: (i) the purchase price being paid
for the Auction Rate Securities; (ii) the par value of the
Auction Rate Securities; (iii) any salient terms required
by the potential purchaser outside of those included in
the SecondMarket APA; and (iv) the commission that will be
earned by SecondMarket upon consummation of the proposed
sale.
(c) If a written objection to any sale is received by the
Debtor within the Notice Period, then, absent a consensual
resolution with the objecting party, Court approval of the
sale will be required.
The Debtor proposes to apply the ARS Sale Procedures to the
Tranche A Notes as well. To the extent the Debtor determines,
after the Tranche A Notes have been marketed by SecondMarket,
that the Purchase Agreement represents the best bid for the
Tranche A Notes, the Debtor will submit a notice to the Notice
Parties of the proposed sale of the Tranche A Notes to Issuer
pursuant to the Purchase Agreement.
A redacted copy of the Tranche A Notes Purchase Agreement and a
list of the Auction Rate Securities are available for free at:
http://bankrupt.com/misc/LES_RedactedPA.pdf
http://bankrupt.com/misc/LES_ARSList.pdf
In a separate filing, the Debtor seeks the Court's permission to
file complete and unredacted versions of the ARS List and the
Purchase Agreement to the Sale Motion under seal. Due to the
confidential commercial nature of the Sale Related Documents, the
Debtor maintains that good cause exists for its sealing request.
Mr. Maddock says that the Debtor to file the Sale Related
Documents under seal to keep the information confidential will
facilitate the sale of the Tranche A Notes. No alternative
method will adequately protect the confidential information
contained in the Sale Related Documents, he insists.
The Debtor intend to deliver unredacted copies of the Sale
Related Documents to (a) chambers for in camera review by the
Court, (b) the Office of the United States Trustee for the
Eastern District of Virginia, and (c) the Creditors' Committees.
Millard, et al., Object
Millard Refrigerated Services, Inc., LUBExpress Land Company,
Inc., LUBExpress Operating Company, and Lisa L. Dobson, Michael
W. Dobson, Barbara W. Dobson and Ralph Dobson say that they have
conferred with the attorneys for LES, and for the Official
Committee of Unsecured Creditors for LandAmerica 1031 Exchange
Services, Inc., in hopes of resolving their objections to the
Sale Motion outside the purview of the Court. Millard, et al.,
thus filed a general objection and reserved their right to be
heard by the Court on the Sale Motions.
* * *
Judge Heunnekens grants the Debtor's request. Pursuant to
Sections 105 and 363, the Debtor is authorized and empowered to
sell the Auction Rate Securities, including the Tranche A Notes,
free and clear of all liens, claims and interests. The Purchase
Agreement for the sale of the Tranche A Notes is approved in all
respects.
All objections to the Sale Motion not otherwise settled or
withdrawn are overruled.
The Court also permits the Debtor to enter into a brokerage
services agreement with SecondMarket. SecondMarket will be paid
compensated in accordance with applicable provisions of the
SecondMarket Brokerage Agreement, provided SecondMarket will not
be entitled to any commission with respect of the Tranche A
Notes.
Sales of the Auction Rate Securities, excluding the Tranche A
Notes, may only be completed upon five days' written notice to
(a) the U.S. Trustee; (b) counsel for the Creditors' Committees;
and (c) all parties that previously expressed an interest in
purchasing the Auction Rate Securities, excluding the Issuer, and
their counsel, if known to the Debtor.
If a written objection to any sale is received by the Debtor
within the notice period, then absent a consensual resolution
with the objecting party, Court approval of the sale will be
required.
The Court also authorizes the Debtor to file the Sale Related
Documents under seal and provide copies of the Sale Related
Documents to Chambers for in camera review, to the Office of the
United States Trustee for the Eastern District of Virginia and
the Creditors' Committees.
About LandAmerica Financial Group
LandAmerica Financial Group, Inc., provides real estate
transaction services with offices nationwide and a vast network of
active agents. LandAmerica and its affiliates operate through
approximately 700 offices and a network of more than 10,000 active
agents throughout the world, including Mexico, Canada, the
Caribbean, Latin America, Europe, and Asia.
LandAmerica Financial Group and its affiliate LandAmerica 1031
Exchange Services, Inc. filed for Chapter 11 protection Nov. 26,
2008 (Bankr. E.D. Va. Lead Case No. 08-35994). Attorneys at
Willkie Farr & Gallagher LLP and McGuireWoods LLP serve as co-
counsel. Zolfo Cooper is the restructuring advisor. Epiq
Bankruptcy Solutions serves as claims and notice agent.
Attorneys at Akin Gump Strauss Hauer & Feld LLP and Tavenner &
Beran, PLC, serve as counsel to the Creditors Committee of 1031
Exchange. Bingham McCutchen LLP and LeClair Ryan serve as counsel
to the Creditors Committee of LFG.
In its bankruptcy petition, LFG listed total assets of
$3,325,100,000, and total debts of $2,839,800,000 as of Sept. 30,
2008.
On March 6, 2009, affiliate LandAmerica Assessment Corporation,
aka National Assessment Corporation, filed its own petition for
Chapter 11 relief. Affiliate LandAmerica Title Company filed for
for Chapter 11 relief on March 27, 2009. LandAmerica Credit
Services, Inc., filed for Chapter 11 in July 2009.
Bankruptcy Creditors' Service, Inc., publishes LandAmerica
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by LandAmerica Financial and its affiliate LandAmerica
1031 Exchange Services, Inc. (http://bankrupt.com/newsstand/or
215/945-7000)
LEHMAN BROTHERS: LBI Trustee to Hold Status Conference Nov. 5
-------------------------------------------------------------
James Giddens, trustee for Lehman Brothers Inc., notified
creditors and other concerned parties that a status conference
regarding the claims process in LBI's liquidation proceeding will
be held on November 5, 2009, at 2:00 p.m. (prevailing Eastern
Time) before the U.S. Bankruptcy Court, at Alexander Hamilton
Customs House, Courtroom 601, One Bowling Green, in New York.
Meanwhile, James Giddens, trustee for Lehman Brothers Inc.,
recently sent separate notices and letters to more than 100
creditors including Mountain Special Situations Funds LLC, FFI
Fund Ltd., Louisiana Sheriff's Pension & Relief Fund., informing
them about his proposed treatment of their claims against LBI.
Mr. Giddens denied the claims on grounds that the creditors
lack evidence indicating they had relationship with LBI; the cash
and securities claimed are not customer property pursuant to
SIPA; the creditors' accounts with LBI do not contain cash or
securities, among other reasons.
Mountain Special, et al., filed in the U.S. Bankruptcy Court for
the Southern District of New York Court their objections to the
treatment of their proofs of claim proposed by the trustee.
Several other creditors also expressed disapproval over the
denial of their proofs of claim. These creditors, however, are
not yet filing formal objections to the treatment of their
claims.
About Lehman Brothers
Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the
fourth largest investment bank in the United States. For more
than 150 years, Lehman Brothers has been a leader in the global
financial markets by serving the financial needs of corporations,
governmental units, institutional clients and individuals
worldwide.
Lehman Brothers filed for Chapter 11 bankruptcy September 15, 2008
(Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition
listed $639 billion in assets and $613 billion in debts,
effectively making the firm's bankruptcy filing the largest in
U.S. history. Several other affiliates followed thereafter.
The Debtors' bankruptcy cases are handled by Judge James M. Peck.
Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife,
Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil,
Gotshal & Manges, LLP, in New York, represent Lehman. Epiq
Bankruptcy Solutions serves as claims and noticing agent.
On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the
U.S. District Court for the Southern District of New York, entered
an order commencing liquidation of Lehman Brothers, Inc., pursuant
to the provisions of the Securities Investor Protection Act (Case
No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as
trustee for the SIPA liquidation of the business of LBI
The Bankruptcy Court has approved Barclays Bank Plc's purchase of
Lehman Brothers' North American investment banking and capital
markets operations and supporting infrastructure for
US$1.75 billion. Nomura Holdings Inc., the largest brokerage
house in Japan, purchased LBHI's operations in Europe for US$2
plus the retention of most of employees. Nomura also
bought Lehman's operations in the Asia Pacific for US$225 million.
International Operations Collapse
Lehman Brothers International (Europe), the principal UK trading
company in the Lehman group, was placed into administration,
together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE
Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and
Mike Jervis, partners at PricewaterhouseCoopers LLP, have been
appointed as joint administrators to Lehman Brothers International
(Europe) on September 15, 2008. The joint administrators have
been appointed to wind down the business.
Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc.
filed for bankruptcy in the Tokyo District Court on September 16.
Lehman Brothers Japan Inc. reported about JPY3.4 trillion
(US$33 billion) in liabilities in its petition.
Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by Lehman Brothers Holdings, Inc., and other insolvency
and bankruptcy proceedings undertaken by its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
LEHMAN BROTHERS: Proposes to Allow Chubb to Pay Litigation Costs
----------------------------------------------------------------
Lehman Brothers Holdings Inc. and its affiliated debtors ask the
U.S. Bankruptcy Court for the Southern District of New York to
lift the automatic stay to allow Federal Insurance Company
(Chubb) to pay litigation costs that are covered under the
company's insurance policy.
Chubb covers loss including defense costs and expenses for claims
made against the Debtors' directors, officers or employees during
the period May 16, 2007 to May 16, 2008. The company's insurance
policy provides up to $15 million in coverage.
The Debtors' personnel are currently facing various legal cases,
which include securities actions filed in both federal and state
courts for wrongful acts allegedly committed by the personnel in
connection with the securities issued by LBHI. The Debtors'
personnel are also facing investigations commenced by the U.S.
Department of Justice, the Securities and Exchange Commission,
and the New Jersey Bureau of Securities to find out what caused
the demise of the Debtors.
Richard Krasnow, Esq., at Weil Gotshal & Manges LLP, in New York,
says the payment would ensure the personnel's continued access to
funding of additional defense cost in case the $20 million
provided under the insurance policy issued by their primary
insurer is exhausted.
XL Specialty Insurance Company, the Debtors' primary insurer,
issued directors and officers liability insurance policy that
provides up to $20 million in coverage. The Debtors, however,
anticipate that the $20 million of primary coverage would be
exhausted by December 2009 or in early 2010 given the current
state of the legal proceedings.
"Confirming [Chubb's]) ability to pay such defense costs and fees
is in the best interests of the Debtors' estates and creditors
because, inter alia, it will avoid the possible collateral
estoppel effect on the Debtors that could result if the
individuals' inability to defend themselves were to give rise to
judgments and findings that impacted direct claims against the
Debtors," Mr. Krasnow says.
The hearing to consider approval of the Debtors' request is
scheduled for November 18, 2009. Creditors and other concerned
parties have until November 13, 2009, to file their objections.
About Lehman Brothers
Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the
fourth largest investment bank in the United States. For more
than 150 years, Lehman Brothers has been a leader in the global
financial markets by serving the financial needs of corporations,
governmental units, institutional clients and individuals
worldwide.
Lehman Brothers filed for Chapter 11 bankruptcy September 15, 2008
(Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition
listed $639 billion in assets and $613 billion in debts,
effectively making the firm's bankruptcy filing the largest in
U.S. history. Several other affiliates followed thereafter.
The Debtors' bankruptcy cases are handled by Judge James M. Peck.
Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife,
Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil,
Gotshal & Manges, LLP, in New York, represent Lehman. Epiq
Bankruptcy Solutions serves as claims and noticing agent.
On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the
U.S. District Court for the Southern District of New York, entered
an order commencing liquidation of Lehman Brothers, Inc., pursuant
to the provisions of the Securities Investor Protection Act (Case
No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as
trustee for the SIPA liquidation of the business of LBI
The Bankruptcy Court has approved Barclays Bank Plc's purchase of
Lehman Brothers' North American investment banking and capital
markets operations and supporting infrastructure for
US$1.75 billion. Nomura Holdings Inc., the largest brokerage
house in Japan, purchased LBHI's operations in Europe for US$2
plus the retention of most of employees. Nomura also
bought Lehman's operations in the Asia Pacific for US$225 million.
International Operations Collapse
Lehman Brothers International (Europe), the principal UK trading
company in the Lehman group, was placed into administration,
together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE
Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and
Mike Jervis, partners at PricewaterhouseCoopers LLP, have been
appointed as joint administrators to Lehman Brothers International
(Europe) on September 15, 2008. The joint administrators have
been appointed to wind down the business.
Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc.
filed for bankruptcy in the Tokyo District Court on September 16.
Lehman Brothers Japan Inc. reported about JPY3.4 trillion
(US$33 billion) in liabilities in its petition.
Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by Lehman Brothers Holdings, Inc., and other insolvency
and bankruptcy proceedings undertaken by its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
LEHMAN BROTHERS: Proposes to Approve Deal With LB Re Financing
--------------------------------------------------------------
Lehman Brothers Holdings Inc. and its affiliated debtors plan to
ink a series of agreements with the administrators of LB RE
Financing No. 3 Ltd. to maximize recovery from the U.K. company.
In court papers, the Debtors seek approval of Judge James Peck of
the U.S. Bankruptcy Court for the Southern District of New York
to enter into agreements with LB RE to maximize potential
recoveries from the company under a EURO 722,181,000 Class B Note
due 2054.
The note was issued by Excalibur Funding No. 1 PLC, a special
purpose vehicle issuer LBHI created early last year to issue real
estate backed commercial debt.
Jacqueline Marcus, Esq., at Weil Gotshal & Manges LLP, in New
York, says the proposed transaction would ensure LBHI to
"maintain certain amounts of commercial advisory control" over
the note, which is LB RE's only asset. This would enable LBHI to
manage the note to improve recovery from LB RE and the amount
available for distribution to LB RE's creditors including LBHI,
she says.
Based on LB RE's statement of affairs, which sets out the assets
and liabilities of the company as of October 30, 2008, LBHI
expects to receive distributions of about 98% of the amounts
available for distribution by LB RE. This represents total
claims of approximately $1.26 billion against LB RE, which is
currently in administration proceedings in England and Wales.
The proposed transaction would grant LBHI control over most of
the decisions concerning the note that would put LBHI in a
position to maximize recoveries. It would also secure LBHI's
right to recover from LB RE amounts advanced to it with respect
to the note in priority to any other claims of creditors, and
give LBHI the right to acquire the note or LB RE's shares.
The proposed transaction is comprised of:
(i) an advisory agreement, under which LBHI will act as the
exclusive commercial advisor to LB RE in relation to its
rights and obligations as registered holder of the note;
(ii) a power of attorney which LB RE has granted to LBHI so
that LBHI can exercise its rights under the Advisory
Agreement;
(iii) a facilities agreement requiring LBHI to provide LB RE
with an initial loan in the amount of the euro equivalent
of GBP1,600,000 to fund certain costs in connection with
the administration of LB RE, and further loans to the
company;
(iv) a letter of indemnity requiring LBHI to indemnify LB RE
and the administrators against certain losses; and
(v) a deed granting LBHI an option to acquire LB RE and the
loans provided to it by LBHI under the Facilities
Agreement as well as an option to acquire the note.
Copies of the documents executed in connection with the proposed
transaction are available for free at:
http://bankrupt.com/misc/LehmanAdvisoryAgreement.pdf
http://bankrupt.com/misc/LehmanPowerofAtty.pdf
http://bankrupt.com/misc/LehmanFacilitiesAgreement.pdf
http://bankrupt.com/misc/LehmanIndemnityLetter.pdf
http://bankrupt.com/misc/LehmanOptionDeed.pdf
The hearing to consider approval of the Debtors' request is
scheduled for November 18, 2009. Creditors and other concerned
parties have until November 13, 2009, to file their objections.
About Lehman Brothers
Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the
fourth largest investment bank in the United States. For more
than 150 years, Lehman Brothers has been a leader in the global
financial markets by serving the financial needs of corporations,
governmental units, institutional clients and individuals
worldwide.
Lehman Brothers filed for Chapter 11 bankruptcy September 15, 2008
(Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition
listed $639 billion in assets and $613 billion in debts,
effectively making the firm's bankruptcy filing the largest in
U.S. history. Several other affiliates followed thereafter.
The Debtors' bankruptcy cases are handled by Judge James M. Peck.
Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife,
Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil,
Gotshal & Manges, LLP, in New York, represent Lehman. Epiq
Bankruptcy Solutions serves as claims and noticing agent.
On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the
U.S. District Court for the Southern District of New York, entered
an order commencing liquidation of Lehman Brothers, Inc., pursuant
to the provisions of the Securities Investor Protection Act (Case
No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as
trustee for the SIPA liquidation of the business of LBI
The Bankruptcy Court has approved Barclays Bank Plc's purchase of
Lehman Brothers' North American investment banking and capital
markets operations and supporting infrastructure for
US$1.75 billion. Nomura Holdings Inc., the largest brokerage
house in Japan, purchased LBHI's operations in Europe for US$2
plus the retention of most of employees. Nomura also
bought Lehman's operations in the Asia Pacific for US$225 million.
International Operations Collapse
Lehman Brothers International (Europe), the principal UK trading
company in the Lehman group, was placed into administration,
together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE
Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and
Mike Jervis, partners at PricewaterhouseCoopers LLP, have been
appointed as joint administrators to Lehman Brothers International
(Europe) on September 15, 2008. The joint administrators have
been appointed to wind down the business.
Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc.
filed for bankruptcy in the Tokyo District Court on September 16.
Lehman Brothers Japan Inc. reported about JPY3.4 trillion
(US$33 billion) in liabilities in its petition.
Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by Lehman Brothers Holdings, Inc., and other insolvency
and bankruptcy proceedings undertaken by its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
LEHMAN BROTHERS: Proposes to Transfer Assets Of 2 Trust Companies
-----------------------------------------------------------------
Lehman Brothers Holdings Inc. and its affiliated debtors seek
approval of the U.S. Bankruptcy Court for the Southern District
of New York to execute an agreement that would authorize the
transfer of assets of LBHI's trust companies.
The agreement known as the Assignment and Assumption Agreement
authorizes Lehman Brothers Trust Company of Delaware and Lehman
Brothers Trust Company N.A. to transfer some of their assets and
obligations to the new trust companies formed by Neuberger Berman
Group LLC.
"The transactions contemplated in the agreement are beneficial to
the Debtors because the profitability of the [Lehman trust
companies] going forward is likely to be immaterial to the
estate," says the Debtors' attorney, Alfredo Perez, Esq., at Weil
Gotshal & Manges LLP, in Houston, Texas. He adds that the deal
would also allow the Lehman trust companies to transfer and be
relieved of some of their liabilities and to retain more assets
than they would in a wind-down or liquidation.
The Lehman trust companies were originally formed by Neuberger
Berman Inc. and were bought by LBHI as part of its acquisition of
Neuberger Berman Inc. in 2003. LBHI did not include the Lehman
trust companies when it sold its investment management unit to
Neuberger Berman Group early this year.
Under the deal, Neuberger Berman Group requires LBHI to guarantee
the Lehman trust companies' obligations and indemnify Neuberger
Berman Group against certain liabilities. Neuberger Berman Group
also requires LBHI to seek a court order providing that any
amounts due from LBHI under the Assignment and Assumption
Agreement are entitled to administrative priority over all other
claims.
According to Mr. Perez, LBHI would benefit from the deal since
regulatory restrictions on the Lehman trust companies' capital
would be lifted upon consummation of the deal.
Mr. Perez points out that the trust companies would be able to
dividend retained net assets to their parent company, Lehman
Brothers Bancorp Inc., another subsidiary of LBHI. Bancorp, in
turn, would be able to use the additional capital to satisfy its
current and future obligations including those related to its two
wholly-owned subsidiaries, Woodlands Commercial Bank and Aurora
Bank FSB, he says.
"To the extent Bancorp has additional assets at its disposal, it
will require less inter-company funding from LBHI," Mr. Perez
points out.
Neuberger Berman Group's ownership of the Lehman trust companies
would also be beneficial to LBHI and its units since they
collectively own 49% of the common equity and 93% of the
preferred equity in Neuberger Berman Group as a result of the
sale of the investment management division, according to Mr.
Perez.
"Neuberger Berman Group's ultimate ownership of the trust
companies is expected to enable Neuberger Berman Group to
generate increased revenues and profits," Mr. Perez says.
A full-text copy of the Assignment and Assumption Agreement is
available for free at:
http://bankrupt.com/misc/LehmanDealTrustCompanies.pdf
The Court will hold a hearing on November 18, 2009, to consider
approval of the Debtors' request. Creditors and other concerned
parties have until November 13, 2009, to file their objections.
About Lehman Brothers
Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the
fourth largest investment bank in the United States. For more
than 150 years, Lehman Brothers has been a leader in the global
financial markets by serving the financial needs of corporations,
governmental units, institutional clients and individuals
worldwide.
Lehman Brothers filed for Chapter 11 bankruptcy September 15, 2008
(Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition
listed $639 billion in assets and $613 billion in debts,
effectively making the firm's bankruptcy filing the largest in
U.S. history. Several other affiliates followed thereafter.
The Debtors' bankruptcy cases are handled by Judge James M. Peck.
Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife,
Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil,
Gotshal & Manges, LLP, in New York, represent Lehman. Epiq
Bankruptcy Solutions serves as claims and noticing agent.
On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the
U.S. District Court for the Southern District of New York, entered
an order commencing liquidation of Lehman Brothers, Inc., pursuant
to the provisions of the Securities Investor Protection Act (Case
No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as
trustee for the SIPA liquidation of the business of LBI
The Bankruptcy Court has approved Barclays Bank Plc's purchase of
Lehman Brothers' North American investment banking and capital
markets operations and supporting infrastructure for
US$1.75 billion. Nomura Holdings Inc., the largest brokerage
house in Japan, purchased LBHI's operations in Europe for US$2
plus the retention of most of employees. Nomura also
bought Lehman's operations in the Asia Pacific for US$225 million.
International Operations Collapse
Lehman Brothers International (Europe), the principal UK trading
company in the Lehman group, was placed into administration,
together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE
Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and
Mike Jervis, partners at PricewaterhouseCoopers LLP, have been
appointed as joint administrators to Lehman Brothers International
(Europe) on September 15, 2008. The joint administrators have
been appointed to wind down the business.
Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc.
filed for bankruptcy in the Tokyo District Court on September 16.
Lehman Brothers Japan Inc. reported about JPY3.4 trillion
(US$33 billion) in liabilities in its petition.
Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by Lehman Brothers Holdings, Inc., and other insolvency
and bankruptcy proceedings undertaken by its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
LEHMAN BROTHERS: Wants to Set Process to Restructure Loan Terms
---------------------------------------------------------------
Lehman Brothers Holdings Inc. and its affiliated debtors seek
approval of the U.S. Bankruptcy Court for the Southern District
of New York to implement a process governing their real estate
loan transactions.
These transactions include (i) restructuring the terms of, (ii)
making new or additional debt and equity investments in, and
(iii) entering into settlements and compromises in connection
with existing commercial mortgage loans and other loans either
owned by the Debtors or in which the Debtors have debt, equity
investment or other interest, in each case directly or indirectly
in or secured by real property or interests.
The Debtors propose these procedures:
(1) The Debtors may enter into and consummate a Restructuring
or Settlement that involves a Real Estate Investment
having an aggregate Mark-to-Market Carrying Value of up to
and including $10 million without further order of the
Court or notice to or approval of any party.
(2) The Debtors may enter into and consummate Real Estate Loan
Transactions that involve a Real Estate Investment
having an aggregate Mark-to-Market Carrying Value of
greater than $10 million but less than or equal to
$25 million, or the Debtors making a New Investment in an
amount up to $5 million without further order of the Court
or approval of or notice to any other party; provided the
Debtors serve notice to the Official Committee of
Unsecured Creditors of those Real Estate Loan Transactions
as soon as practicable but in no event later than promptly
following the closing of the transactions.
(3) If a Real Estate Loan Transaction involves
(i) a Real Estate Investment having an aggregate Mark-to-
Market Carrying Value greater than $25 million but
less than or equal to $100 million;
(ii) the Debtors making a New Investment in an amount
greater than $5 million but less than or equal to
$25 million;
(iii) a Restructuring of the Debtors' debt or equity
position in a Real Estate Investment or a Settlement
resulting in a reduction in the aggregate value of the
Real Estate Investment to a value that is less than
50% of the aggregate Mark-to-Market Carrying Value of
the Real Estate Investment; and
(iv) any party to the Real Estate Loan Transaction being
either a person employed by the Debtors at any time on
or after September 15, 2007, or an entity unaffiliated
with the Debtors for which a person employed by the
Debtors at any time on or after September 15, 2007, is
materially involved in the negotiations of the Real
Estate Loan Transaction,
the Debtors will provide to the Creditors' Committee a
summary of the proposed Real Estate Loan Transaction
identifying the terms of the proposed Real Estate Loan
Transaction. The Creditors' Committee will be required to
submit any objections to a Real Estate Loan Transaction
identified in a Real Estate Loan Transaction Summary so as
to be received by the Debtors on or before 10 days after
service of the summary; provided that if the Creditors
Committee requests additional information regarding a
transaction, its objection period will be suspended until
the requested information is provided.
If the Debtors and the Creditors' Committee are unable to
consensually resolve the objection, the Debtors may file a
motion seeking approval of the Real Estate Loan
Transaction. If the Creditors' Committee does not timely
object to a Real Estate Loan Transaction, or the Debtors
and the Creditors' Committee resolve a timely objection,
the Debtors may proceed with the transaction without
further order of the Court or notice to or approval of any
party.
(4) The Debtors will be required to file a motion with the
Court seeking approval of any Real Estate Loan Transaction
that involves (i) a Real Estate Investment having an
aggregate Mark-to-Market Carrying Value greater than
$100 million, and (ii) the Debtors making a New Investment
in an amount greater than $25 million.
(5) The Debtors may enter into and consummate any Real Estate
Loan Transaction that involves a Real Estate Investment
having an aggregate Mark-to-Market Carrying Value of
greater than $25 million without further order of the
Court or notice to or approval of any party, if the
transaction involves only (i) a non-material amendment to
or modification of a Real Estate Investment, as determined
by the Debtors after consultation with the Creditors
Committee, and (ii) the Debtors making a New Investment in
an amount not greater than $5 million; provided the
Debtors will serve notice to the Creditors Committee of
that transaction as soon as practicable but in no event
later than promptly following the closing of the
transaction.
(6) Real Estate Investments managed by the Debtors that are
cross-collateralized or cross-defaulted with each other
will be aggregated for purposes of applying the thresholds
to Real Estate Loan Transactions.
(7) The Debtors ability to carry out the actions pursuant to
the procedures will not override any notice, consent or
other rights that any third parties may have pursuant to
agreements with the Debtors.
As part of the proposed procedures, the Debtors will file in
Court, beginning not later than 105 days after entry of an order
approving the procedures, a quarterly report of all Real Estate
Loan Transactions entered into by the Debtors during the prior
three months.
The Court will hold a hearing on November 18, 2009, to consider
approval of the proposed procedures. Creditors and other
concerned parties have until November 13, 2009, to file their
objections.
About Lehman Brothers
Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the
fourth largest investment bank in the United States. For more
than 150 years, Lehman Brothers has been a leader in the global
financial markets by serving the financial needs of corporations,
governmental units, institutional clients and individuals
worldwide.
Lehman Brothers filed for Chapter 11 bankruptcy September 15, 2008
(Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition
listed $639 billion in assets and $613 billion in debts,
effectively making the firm's bankruptcy filing the largest in
U.S. history. Several other affiliates followed thereafter.
The Debtors' bankruptcy cases are handled by Judge James M. Peck.
Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife,
Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil,
Gotshal & Manges, LLP, in New York, represent Lehman. Epiq
Bankruptcy Solutions serves as claims and noticing agent.
On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the
U.S. District Court for the Southern District of New York, entered
an order commencing liquidation of Lehman Brothers, Inc., pursuant
to the provisions of the Securities Investor Protection Act (Case
No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as
trustee for the SIPA liquidation of the business of LBI
The Bankruptcy Court has approved Barclays Bank Plc's purchase of
Lehman Brothers' North American investment banking and capital
markets operations and supporting infrastructure for
US$1.75 billion. Nomura Holdings Inc., the largest brokerage
house in Japan, purchased LBHI's operations in Europe for US$2
plus the retention of most of employees. Nomura also
bought Lehman's operations in the Asia Pacific for US$225 million.
International Operations Collapse
Lehman Brothers International (Europe), the principal UK trading
company in the Lehman group, was placed into administration,
together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE
Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and
Mike Jervis, partners at PricewaterhouseCoopers LLP, have been
appointed as joint administrators to Lehman Brothers International
(Europe) on September 15, 2008. The joint administrators have
been appointed to wind down the business.
Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc.
filed for bankruptcy in the Tokyo District Court on September 16.
Lehman Brothers Japan Inc. reported about JPY3.4 trillion
(US$33 billion) in liabilities in its petition.
Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by Lehman Brothers Holdings, Inc., and other insolvency
and bankruptcy proceedings undertaken by its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
LEHMAN BROTHERS: Auction of 238-Piece Artwork to Net $750,000
-------------------------------------------------------------
The Wall Street Journal's Kelly Crow reports interest remains high
for artwork owned by Lehman Brothers. According to Ms. Crow, 238
modern and contemporary artworks were offered for sale last week
at Freeman's auction house to repay Lehman creditors. Ms. Crow
relates that at least 2,000 collectors and souvenir seekers had
signed up to bid on the bank's art, some participating over the
telephone or online. According to Ms. Kelly, majority of the
artworks sold for more than the expected price.
"Five hours into the sale, no works had gone unsold," according to
Ms. Crow.
The auction, Ms. Crow says, is expected to bring in around
$750,000.
Ms. Crow adds that Freeman's is set to auction off the next set of
Lehman's 650-piece total collection on December 6.
About Lehman Brothers
Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the
fourth largest investment bank in the United States. For more
than 150 years, Lehman Brothers has been a leader in the global
financial markets by serving the financial needs of corporations,
governmental units, institutional clients and individuals
worldwide.
Lehman Brothers filed for Chapter 11 bankruptcy September 15, 2008
(Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition
listed $639 billion in assets and $613 billion in debts,
effectively making the firm's bankruptcy filing the largest in
U.S. history. Several other affiliates followed thereafter.
The Debtors' bankruptcy cases are handled by Judge James M. Peck.
Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife,
Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil,
Gotshal & Manges, LLP, in New York, represent Lehman. Epiq
Bankruptcy Solutions serves as claims and noticing agent.
On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the
U.S. District Court for the Southern District of New York, entered
an order commencing liquidation of Lehman Brothers, Inc., pursuant
to the provisions of the Securities Investor Protection Act (Case
No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as
trustee for the SIPA liquidation of the business of LBI
The Bankruptcy Court has approved Barclays Bank Plc's purchase of
Lehman Brothers' North American investment banking and capital
markets operations and supporting infrastructure for
US$1.75 billion. Nomura Holdings Inc., the largest brokerage
house in Japan, purchased LBHI's operations in Europe for US$2
plus the retention of most of employees. Nomura also
bought Lehman's operations in the Asia Pacific for US$225 million.
International Operations Collapse
Lehman Brothers International (Europe), the principal UK trading
company in the Lehman group, was placed into administration,
together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE
Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and
Mike Jervis, partners at PricewaterhouseCoopers LLP, have been
appointed as joint administrators to Lehman Brothers International
(Europe) on September 15, 2008. The joint administrators have
been appointed to wind down the business.
Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc.
filed for bankruptcy in the Tokyo District Court on September 16.
Lehman Brothers Japan Inc. reported about JPY3.4 trillion
(US$33 billion) in liabilities in its petition.
Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by Lehman Brothers Holdings, Inc., and other insolvency
and bankruptcy proceedings undertaken by its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
LEVEL 3: Reports $170 Million Third Quarter 2009 Net Loss
---------------------------------------------------------
Level 3 Communications, Inc., reported consolidated revenue of
$916 million for the third quarter 2009, compared to consolidated
revenue of $1.07 billion for the third quarter 2008 and $942
million for the second quarter 2009.
The net loss for the third quarter 2009 was $170 million, or
($0.10) per share, compared to a net loss of $129 million, or
($0.08) per share, for the third quarter 2008. The net loss for
the second quarter 2009 was $134 million, or ($0.08) per share.
Consolidated Adjusted EBITDA was $213 million in the third quarter
2009, compared to $255 million in the third quarter 2008.
Consolidated Adjusted EBITDA was $229 million in the second
quarter 2009.
"While we remain cautious, we saw positive signs in the business
this quarter, as evidenced by the improvement this quarter in the
rate of decline in Core Network Services revenue," said James
Crowe, CEO of Level 3. "Our ongoing discipline in managing the
business continues to provide benefit, and enabled us to generate
positive Free Cash Flow during the quarter."
Consolidated Cash Flow and Liquidity
During the third quarter 2009, Unlevered Cash Flow improved to
$152 million, compared to $124 million for the third quarter 2008
and $146 million in the second quarter 2009.
Consolidated Free Cash Flow improved to $9 million for the third
quarter 2009, compared to negative $4 million for the third
quarter 2008. Consolidated Free Cash Flow was $20 million for the
second quarter 2009.
During the third quarter 2009, the company repaid at maturity the
remaining $55 million aggregate principal amount of its 6%
Convertible Subordinated Notes due 2009 and repurchased
approximately $39 million of debt due in 2010 and 2011.
The company received net proceeds of $274 million in October 2009
from the issuance of $275 million aggregate principal amount of
its 7% Convertible Senior Notes due 2015, Series B.
Excluding capital leases and commercial mortgages, at the end of
the third quarter 2009, the company had no remaining principal
amount of debt due in 2009, $157 million in 2010, $433 million in
2011 and $301 million in 2012.
As of September 30, 2009, the company had cash and cash
equivalents of approximately $532 million, or $806 million pro
forma for the $275 million 7% Convertible Senior Notes Due 2015.
Outlook
"During the quarter, the rate of decline in Core Network Services
revenues improved, as we expected," said Sunit Patel, executive
vice president and CFO of Level 3. "We also saw improvements in
churn and sales in several segments across the business. We are
reiterating guidance for the full year 2009."
"Specifically, we expect Consolidated Adjusted EBITDA of $900
million to $950 million for the full year 2009. We expect to be
approximately Free Cash Flow neutral for 2009 in the aggregate.
In addition, we continue to expect improvement in the sequential
performance of Core Network Services revenue. Consolidated
Adjusted EBITDA is expected to increase in the fourth quarter
compared to our results this quarter."
Summary
"Our strong focus on managing costs, combined with our targeted
investments in areas of growth, including local market
penetration, wireless tower connections, content delivery and
rural broadband, provide the foundation for stronger performance
when we emerge from the challenging economic environment," said
Mr. Crowe. "Given the consistency of our margin profile, our
positive operating leverage will be evident when we return to a
period of revenue growth."
As of September 30, 2009, Level 3 had total assets of $8.968
billion against total Liabilities of $8.297 billion.
A full-text copy of the Company's earnings release is available at
no charge at http://ResearchArchives.com/t/s?4816
About Level 3
Broomfield, Colorado, Level 3 Communications, Inc. (NASDAQ: LVLT)
-- http://www.Level3.com/-- provides fiber-based communications
services. Level 3 offers a portfolio of metro and long-haul
services, including transport, data, Internet, content delivery
and voice.
* * *
LVLT, along with its wholly owned subsidiary Level 3 Financing,
Inc., has a 'B-' Issuer Default Rating and a Positive Rating
Outlook.
LOURDES GAGAZA: Case Summary & 20 Largest Unsecured Creditors
-------------------------------------------------------------
Joint Debtors: Lourdes L. Gagaza
Fabian L. Gagaza
165 Serravista Avenue
Daly City, CA 94015
Bankruptcy Case No.: 09-33350
Chapter 11 Petition Date: October 29, 2009
Court: United States Bankruptcy Court
Northern District of California (San Francisco)
Debtors' Counsel: David Butler Jr., Esq.
Law Offices of David Butler Jr.
305 San Bruno Ave. W
San Bruno, CA 94066-3526
Tel: (650) 873-3750
Email: davebutler@sanbrunocable.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
According to the schedules, the Company has assets of at least
$2,254,452, and total debts of $2,460,586.
A full-text copy of the Debtors' petition, including a list of
their 20 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/canb09-33350.pdf
The petition was signed by the Joint Debtors.
MAGNA ENTERTAINMENT: Increases MID DIP Financing by $26 Million
---------------------------------------------------------------
The Hon. Mary F. Walrath of the U.S. Bankruptcy Court for the
District of Delaware authorized, on an interim basis, Magna
Entertainment Corp. and its debtor-affiliates to enter into a
second amended debtor-in-possession credit agreement, which
provides for:
-- the ability of the Debtors to borrow up to an additional
$26 million, resulting to the principal amount to
$64.4 million, to fund the working capital requirements; and
-- an extension of the maturity date of the financing.
The Debtors originally obtained with MID Islandi sf, acting
through its Zug, Switzerland Branch, a $38.4 million secured
postpetition financing.
The DIP lender expressed willingness to provide the additional DIP
financing to the Debtors.
The Debtors relate that the additional DIP financing will permit
them to continue to market and if appropriate, sell their assets
for the benefit of all stakeholders in the Debtors' Chapter 11
cases.
All liens and priority granted to the DIP lender is deemed
perfected.
The obligations under the amended DIP documents will be treated as
superpriority claims.
The Debtors' access to the DIP financing will terminate on the
occurrence of a termination event.
About Magna Entertainment
Based in Aurora, Ontario, Magna Entertainment Corp. is North
America's largest owner and operator of horse racetracks based on
revenue. The Company develops, owns and operates horse racetracks
and related pari-mutuel wagering operations, including off-track
betting facilities. MEC also develops, owns and operates casinos
in conjunction with its racetracks where permitted by law.
MEC owns and operates AmTote International, Inc., a provider of
totalisator services to the pari-mutuel industry, XpressBet(R), a
national Internet and telephone account wagering system, as well
as MagnaBet(TM) internationally. Pursuant to joint ventures, MEC
has a 50% interest in HorseRacing TV(R), a 24-hour horse racing
television network, and TrackNet Media Group LLC, a content
management company formed for distribution of the full breadth of
MEC's horse racing content.
Following its failure to meet obligations to lenders led by PNC
Bank, National Association, and Wells Fargo Bank, National
Association, and controlling shareholder MI Developments Inc.'s
decision not to provide further financial backing, Magna
Entertainment Corp. and 24 affiliates filed for Chapter 11 on
March 5, 2009 (Bankr. D. Del. Lead Case No. 09-10720).
Marcia L. Goldstein, Esq., and Brian S. Rosen, Esq., at Weil,
Gotshal & Manges LLP, have been engaged as bankruptcy counsel.
Mark D. Collins, Esq., L. Katherine Good, Esq., and Maris J.
Finnegan, Esq., at Richards, Layton & Finger, P.A., are the
Debtors' local counsel. Miller Buckfire & Co. LLC is the Debtors'
investment banker and financial advisor. Kurtzman Carson
Consultants LLC is the claims and noticing agent for the Debtors.
Magna Entertainment Corp. had total assets of US$1.054 billion and
total liabilities of US$947.3 million based on unaudited
consolidated financial statements as of December 31, 2008.
MEDICAL FACILITIES MANAGEMENT: Voluntary Chapter 11 Case Summary
----------------------------------------------------------------
Debtor: Medical Facilities Management G.P.,
a California general partnership
P.O. Box 1966
Highland Park, IN 46322
Bankruptcy Case No.: 09-24676
Chapter 11 Petition Date: October 29, 2009
Court: United States Bankruptcy Court
Northern District of Indiana (Hammond Division)
Judge: J. Philip Klingeberger
Debtor's Counsel: Jeffrey C. Dan, Esq.
Crane, Heyman, Simon, Welch & Clar
135 South LaSalle Street, Suite 3705
Chicago, IL 60603-4297
Tel: (312) 641-6777
Email: jdan@craneheyman.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $500,001 to $1,000,000
The Debtor did not file a list of its 20 largest unsecured
creditors when it filed its petition.
The petition was signed by Paul Kevin Barkal M.D.
MENDOCINO REALTY: Case Summary & 19 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: Mendocino Realty, INC.
622 West Linger Lane
Phoenix, AZ 85021
Bankruptcy Case No.: 09-27737
Chapter 11 Petition Date: October 29, 2009
Court: United States Bankruptcy Court
District of Arizona (Phoenix)
Judge: Randolph J. Haines
Debtor's Counsel: Mark J. Giunta, Esq.
Law Office Of Mark J. Giunta
1413 N 3rd St
Phoenix, AZ 85004-1612
Tel: (602) 307-0837
Fax: (602) 307-0838
Email: mark.giunta@azbar.org
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
According to the schedules, the Company has assets of at least
$1,321,695, and total debts of $1,925,626.
A full-text copy of the Debtor's petition, including a list of its
19 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/azb09-27737.pdf
The petition was signed by Donald Park.
MISSOURI REALTY: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: MISSOURI REALTY, LLC
622 W. Linger Ln.
Phoenix, AZ 85021
Bankruptcy Case No.: 09-27743
Chapter 11 Petition Date: October 29, 2009
Court: United States Bankruptcy Court
District of Arizona (Phoenix)
Judge: George B. Nielsen Jr.
Debtor's Counsel: Mark J. Giunta, Esq.
Law Office Of Mark J. Giunta
1413 N 3rd St
Phoenix, AZ 85004-1612
Tel: (602) 307-0837
Fax: (602) 307-0838
Email: mark.giunta@azbar.org
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
According to the schedules, the Company has assets of at least
$2,099,166, and total debts of $3,725,176.
A full-text copy of the Debtor's petition, including a list of its
20 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/azb09-27743.pdf
The petition was signed by Donald Park.
MODINE MANUFACTURING: FY2010 Q2 Net Loss Widens to $20.96 Mil.
--------------------------------------------------------------
Modine Manufacturing Company narrowed its net loss to $6.457
million for the second quarter of fiscal 2010 -- ended September
30, 2009 -- from a net loss of $13.226 million for the same period
a year ago. However, the Company's net loss for the first half of
fiscal 2010 widened to $20.960 million from a net loss of $5.439
million for the same period a year ago.
Modine had net sales of $282.298 million for the second quarter of
fiscal 2010 compared to $390.488 million for the same period a
year ago. Modine had net sales of $535.930 million for the first
half of fiscal 2010 compared to $828.359 million for the same
period a year ago.
As of September 30, 2009, Modine had total assets of $938.142
million, including cash and cash equivalents of $54.649 million
against $574.881 million in total liabilities.
"We are pleased with Modine's performance during the second
quarter of fiscal 2010, especially given the current economic
environment," said Thomas A. Burke, Modine President and Chief
Executive Officer. "On a sequential basis, sales rose 11 percent
and we saw significant improvements in gross margin and adjusted
EBITDA since the first quarter. Although sales were down 28
percent year over year, we delivered a 150 basis point improvement
in gross margin, reduced SG&A costs by more than $20 million and
generated the strongest adjusted EBITDA in five quarters. During
the quarter, we completed a public offering of our common stock
and used the proceeds to significantly reduce net debt. As we
move into the second half of fiscal 2010, we are encouraged by the
sales trends in our business and the early signs of stabilization
and selective, modest improvements within our end markets. Yet we
are mindful of continued recessionary pressures, along with the
impact that restructuring, new program launch activities and
recent increases in material costs may have on our future
financial results. As we execute our Four-Point Plan, we are
positioning Modine for profitable growth as market volumes
recover."
Second Quarter Overview
-- Sales volumes declined 28 percent from a year ago as a
result of the economic downturn, yet improved sequentially
across all segments, up 11 percent compared to the first
quarter of fiscal 2010;
-- Gross margin of 15.0 percent rose 150 basis points from
the second quarter of fiscal 2009 and 90 basis points from
the first quarter of fiscal 2010, primarily attributable
to a significant reduction in direct and indirect costs in
the company's manufacturing facilities;
-- Selling, general & administrative expenses decreased
$20.5 million, or 36 percent, from the second quarter of
fiscal 2009, as the company's refocused product portfolio
has enabled it to significantly lower SG&A expenses;
-- Adjusted EBITDA of $22.7 million during the second quarter
of fiscal 2010 and $39.6 million year-to-date exceeded the
company's expectations and was in compliance with its
minimum adjusted EBITDA loan covenants;
-- The company's recently completed public offering of common
stock generated proceeds of approximately $93 million that
were used primarily to reduce the company's indebtedness
and, thereby, provide additional financial flexibility and
liquidity;
-- The company recorded an impairment charge of $2.8 million
for its Harrodsburg, Kentucky, facility based on the
company's intention to close this facility. The company
announced the intended closure of this facility last week
in an effort to create greater scale efficiencies as part
of its Four-Point Plan; and
-- Effective in the second quarter of fiscal 2010, the
company's Fuel Cell business, which previously was
reported as a separate segment, is now reported as a
product line within the company's Original Equipment --
North America segment for all periods presented.
Cash and Liquidity
"The additional capital raised in our recently completed secondary
stock offering, combined with our strong performance during the
quarter, enabled Modine to generate positive free cash flow and
substantially reduce our debt balance," said Bradley C.
Richardson, Executive Vice President -- Corporate Strategy and
Chief Financial Officer. "With our improved liquidity and Four-
Point Plan framework, we are well positioned to maintain a more
conservative balance sheet, while having the flexibility to invest
a portion of the proceeds generated from the stock offering to:
-- Protect our vehicular business and accelerate our
restructuring;
-- Grow our Commercial HVAC business; and
-- Fund working capital needs."
Free cash flow was $11.9 million during the second quarter of
fiscal 2010, compared with a free cash outflow of $7.0 million in
the comparable period of fiscal 2009. The improvement in income
from operations resulting from our cost reduction efforts, as well
as reduced capital spending, contributed to the year over year
improvement in free cash flow. The company's net debt at
September 30, 2009 was $124.7 million, compared to $205.7 million
at March 31, 2009. As of September 30, 2009, the company had cash
on hand of approximately $55 million and additional available
borrowing capacity of approximately $129 million. The company
believes it has sufficient liquidity to manage its business and
expects to be in compliance with its financial covenants through
the remainder of fiscal 2010 and through the term of the credit
agreement.
Outlook
While Modine is anticipating modest sales volume improvement in
certain key markets and improved commercial vehicle build rates in
North America, the sluggish economy continues to have an adverse
effect on the company. The company's expectations for the
remainder of fiscal 2010 include:
-- Revenues slightly higher than the second quarter 2010 run
rate based on program launches and modest end-market
improvements;
-- Increased manufacturing costs based on higher material
costs and the impact of expected production inefficiencies
driven by new program launches and plant closure
activities, all of which will put pressure on the
company's gross margin;
-- SG&A costs relatively consistent at a quarterly run rate
of approximately $40 million;
-- Planned capital spending of approximately $30 million; and
-- Positive free cash flow and a decrease in net debt
balances over the remainder of the fiscal year, further
improving the company's liquidity.
"As we move forward in fiscal 2010, we are driving the
fundamentals of our Four-Point Plan, which include portfolio
rationalization, manufacturing realignment, SG&A cost reduction
and capital allocation discipline," concluded Mr. Burke. "This
combination of strategies has served us well during the economic
downturn and is having a positive effect on our financial results
as we manage the business through the economic trough. We are
realizing the benefits of the aggressive actions we have taken to
improve profitability and lower our cost structure and break-even
levels. Although the general business climate remains
challenging, we are building long term business momentum through a
more focused product portfolio, better utilization of our asset
base and significant cost reductions. Perhaps most encouraging,
the fundamental growth drivers of our business -- emissions
reduction, energy efficiency, and infrastructure development --
remain intact and are resulting in improved customer relationships
and new, incremental program wins globally."
Modine on September 15, 2009, entered into (1) a second amendment
to its Credit Agreement with JPMorgan Chase Bank, N.A., as Swing
Line Lender, as LC Issuer and lender and as Agent, and Bank of
America, N.A., M&I Marshall & Ilsley Bank, Wells Fargo Bank, N.A.,
Dresdner Bank AG (Commerzbank AG), U.S. Bank, National Association
and Comerica Bank; (2) Waiver and Third Amendment to Note Purchase
Agreement (2006) amending the Note Purchase Agreement dated as of
December 7, 2006, as amended, pursuant to which the Company issued
$50,000,000 of 5.68% Senior Notes, Series A due December 7, 2017
and $25,000,000 of 5.68% Senior Notes, Series B due December 7,
2017; and (3) Waiver and Third Amendment to Note Purchase
Agreement (2005) amending the Note Purchase Agreement dated as of
September 29, 2005, as amended, pursuant to which the Company
issued $75,000,000 of 4.91% Senior Notes due September 29, 2015.
The Company entered into the September 15 Amendments to waive
certain events of default existing under the Credit Agreement, the
2006 Note Purchase Agreement and the 2005 Note Purchase Agreement
and amend other provisions of the Credit Agreement, the 2006 Note
Purchase Agreement and the 2005 Note Purchase Agreement.
On September 18, the Company entered into amendments to certain
provisions of the Credit Agreement, the 2006 Note Purchase
Agreement and the 2005 Note Purchase Agreement in anticipation of
the Company's public offering of common stock, $0.625 par value
per share. Pursuant to the terms of the September 18 Amendments:
-- Certain financial covenants were modified so the amount of
cash restructuring charges that may be added back to
Consolidated Net Income for covenant purposes will be
increased by $20,000,000, permitted capital expenditures
will be increased by $5,000,000 for the current fiscal
year, and any amount of unused capital expenditure for the
current fiscal year (not to exceed $5,000,000) may be
carried over to the next fiscal year, and the amount of
off balance sheet liabilities for sale leasebacks after
February 17, 2009, and the interest component of such sale
leasebacks that are excluded from total debt and interest
expense for covenant purposes is increased from
$20,000,000 to $30,000,000;
-- The funds in the cash collateral account described in the
provisions of the September 15 Amendments will be
released; and
-- The terms of the documents, other than certain conforming
definitions, become effective automatically on the date of
the closing of the Offering, subject to certain
conditions.
About Modine
Modine Manufacturing Company -- http://www.modine.com/-- with
fiscal 2009 revenues of $1.4 billion, specializes in thermal
management systems and components, bringing heating and cooling
technology and solutions to diversified global markets. Modine
products are used in light, medium and heavy-duty vehicles,
heating, ventilation and air conditioning equipment, off-highway
and industrial equipment, refrigeration systems, and fuel cells.
The Company employs roughly 7,000 people at 32 facilities
worldwide in 15 countries.
MONTEALLEGRE LLC: Case Summary & 15 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: Monteallegre, LLC
13221 SW 216 Terrace
Miami, FL 33170
Bankruptcy Case No.: 09-34086
Chapter 11 Petition Date: October 31, 2009
Court: United States Bankruptcy Court
Southern District of Florida (Miami)
Judge: A. Jay Cristol
Debtor's Counsel: Geoffrey S. Aaronson, Esq.
100 SE 2nd St 27th Floor
Miami, FL 33131
Tel: (786) 594-3000
Fax: (305) 675-3880
Email: gaaronson@aaronsonpa.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
A full-text copy of the Debtor's petition, including a list of its
15 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/flsb09-34086.pdf
The petition was signed by Peter Duarte, manager/member of the
Company.
MORRIS PUBLISHING: To File Ch. 11 if Exchange Offer Rejected
------------------------------------------------------------
Morris Publishing Group, LLC has agreed to the terms of a
definitive restructuring support agreement with the holders of
over 70% of the outstanding $278.5 million aggregate principal
amount of Morris Publishing's 7% Senior Subordinated Notes Due
2013. Under the agreement, Morris Publishing will launch an
exchange offer to all holders of Existing Notes to surrender their
Existing Notes, including accrued interest, in exchange for $100
million of new second lien secured notes due in 2014. The New
Notes will bear interest of at least 10%, but could bear interest
up to 15%, some of which may be paid-in-kind (PIK), until Morris
Publishing repays its remaining senior debt.
If the exchange offer is not accepted by holders of at least 99%
of the aggregate principal amount of Existing Notes, then Morris
Publishing has agreed to file a pre-packaged bankruptcy plan for
the exchange of New Notes for the Existing Notes. Simultaneously
with the exchange offer, Morris Publishing will solicit consents
from the holders of Existing Notes for the pre-packaged bankruptcy
plan.
Holders of over 70% of the outstanding principal amount of
Existing Notes have agreed to support the exchange offer and the
pre-packaged bankruptcy plan. Upon the exchange, $110 million of
Morris Publishing's existing $136.5 million in senior debt will be
satisfied or contributed to capital by affiliates of Morris
Publishing.
On October 27 2009, Morris Publishing and Morris Publishing
Finance Co., as issuers, and all other subsidiaries of Morris
Publishing, as subsidiary guarantors, and the holders, or
investment advisors or managers, of over 75% of the outstanding
$278.5 million aggregate principal amount of Morris Publishing's
7% Senior Subordinated Notes Due 2013, entered into Amendment No.
16 to the Forbearance Agreement dated as of February 26, 2009 with
respect to the indenture to the Notes. Amendment No. 16 extends
the deadline to execute a Plan Support Agreement with the ad hoc
committee of holders of the Notes until 5:00 p.m. EDT on October
30, 2009 and extends the deadline to commence the exchange offer
solicitation process until 5:00 p.m. EDT on November 6, 2009.
Morris Publishing previously announced that it entered into a
binding restructuring term sheet on September 23, 2009 with an ad
hoc committee of holders of over 75% of the Notes, subject to the
final negotiation and execution of the definitive legal
documentation and other closing conditions for the transactions
contemplated thereby, including the execution of a "Plan Support
Agreement" on reasonable and customary terms.
Under Amendment No. 16, the Forbearance Period generally means the
period ending at 5:00 p.m. EDT on December 11, 2009, but could be
terminated earlier for various reasons set forth in the
Forbearance Agreement including if the lenders under the Amended
and Restated Credit Agreement, dated as of October 15, 2009,
accelerate the maturity of the obligations under the Amended
Credit Agreement, upon the occurrence of any other default under
the Indenture, or if Morris Publishing files for bankruptcy
protection or breaches its covenants under the Forbearance
Agreement. However, the Forbearance Period would terminate
earlier if Morris Publishing has not entered into a Plan Support
Agreement by the Support Agreement Deadline, or Morris Publishing
has not launched the exchange offer solicitation process by the
Solicitation Process Deadline.
About Morris Publishing
Morris Publishing Group, LLC -- http://www.morrisrestructures.com/
-- is a privately held media company based in Augusta, Ga. Morris
Publishing currently owns and operates 13 daily newspapers as well
as nondaily newspapers, city magazines and free community
publications in the Southeast, Midwest, Southwest and Alaska.
MTF DEVELOPMENT INC: Voluntary Chapter 11 Case Summary
------------------------------------------------------
Debtor: MTF Development, Inc.
206 W. Hamilton Street
Ridgeland, MS 39157
Bankruptcy Case No.: 09-03806
Chapter 11 Petition Date: October 29, 2009
Court: United States Bankruptcy Court
Southern District of Mississippi
(Jackson Divisional Office)
Judge: Edward Ellington
Debtor's Counsel: John D. Moore, Esq.
301 Highland Park Cove, Suite B (39157)
P.O. Box 3344
Ridgeland, MS 39158-3344
Tel: (601) 853-9131
Fax: (601) 853-9139
Email: john@johndmoorepa.com.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
The Debtor did not file a list of its 20 largest unsecured
creditors when it filed its petition.
The petition was signed by J. Frank Pucylowski, president of the
Company.
NCI BUILDING: Fischer Resigns as President of Robertson-Ceco Unit
-----------------------------------------------------------------
Effective October 26, 2009, Keith E. Fischer resigned his position
as President of the Robertson-Ceco Division of NCI Building
Systems, Inc.
NCI Building Systems, Inc. (NYSE: NCS) is one of North America's
largest integrated manufacturers of metal products for the
nonresidential building industry. NCI is comprised of a family of
companies operating manufacturing facilities across the United
States and Mexico, with additional sales and distribution offices
throughout the United States and Canada.
NCI is proposing a financial restructuring to address an
immediate need for liquidity in light of a potentially imminent
default under, and acceleration of, its existing credit facility,
which may occur as early as November 6, 2009 (which may, in turn,
also lead to a default under, and acceleration of, its other
indebtedness, including the $180.0 million in principal amount of
2.125% Convertible Senior Subordinated Notes due 2024, and the
high likelihood that it will be required to repurchase the
convertible notes on November 15, 2009, the first scheduled
mandatory repurchase date under the convertible notes indenture
A copy of NCI's Preliminary Prospectus/Disclosure Statement is
available at no charge at http://ResearchArchives.com/t/s?4626
As of August 2, 2009, the Company had $627.63 million in total
assets; and $624.23 million in total current liabilities and
$21.62 million in total long-term liabilities.
NEXT INC: Earns $71,400 in Third Quarter Ended August 30
--------------------------------------------------------
Next, Inc. reported net income of $71,473 for the three months
ended August 30, 2009, compared with net income of $212,406 for
the three months ended August 29, 2008.
Net sales decreased $2,198,607, or 30.0%, to $5,125,079 for the
three months ended August 30, 2009, from $7,323,686 for the three
months ended August 29, 2008. Sales to the Company's top three
customers decreased 17.0% for the three months ended August 30,
2009, compared to the same quarter last year.
For the nine months ended August 30, 2009, the Company reported a
net loss of $948,234, compared with a net loss of $682,805 in the
same period last year.
Net sales for the nine months ended August 30, 2009, decreased by
10.4% to $10,738,983, from $11,981,853 for the nine months ended
August 29, 2008. The Company said that the retail industry, in
general, is experiencing little to no growth across the country
and worldwide. Same store sales comparisons were also down
industry-wide.
Loss before income taxes for the nine months ended August 30,
2009, decreased 14.8% to $948,234, as compared to $1,112,848 from
the nine months ended August 29, 2008. The nine month period
ended August 29, 2008, also had an income tax benefit of $430,043,
absent in fiscal 2009.
At August 30, 2009, the Company's consolidated balance sheets
showed $11,288,591 in total assets, $10,210,597 in total
liabilities, and $1,077,994 in total shareholders' equity.
The Company's consolidated balance sheets at August 30, 2009, also
showed strained liquidity with $8,736,218 in total current assets
available to pay $10,210,597 in total current liabilities.
A full-text copy of the Company's consolidated financial
statements for the three and nine months ended August 30, 2009, is
available for free at http://researcharchives.com/t/s?4813
Liquidity and Capital Resources
Cash provided by operations for the nine months ended August 30,
2009, was $3,424,803, as compared to $165,666 of cash provided by
operations for the nine months ended August 29, 2008.
Cash used in investing activities produced a net outflow of
$12,534 for the nine months ended August 30, 2009, as compared to
an outflow of $49,467 for the nine months ended August 29, 2008.
These cash outflows resulted from purchases of equipment and
intangible assets in both periods.
Financing activities used cash of $3,413,697 and $238,380 for the
nine months ended August 30, 2009, and August 29, 2008,
respectively. Repayments of long term debt and formula driven pay
downs on the revolving credit facility were the sources of these
outflows.
Going Concern Doubt
Joseph Decosimo and Company PLLC, in Chattanooga, Tennessee,
expressed substantial doubt about Next, Inc.'s ability to continue
as a going concern after auditing the Company's consolidated
financial statements as of and for the years ended November 28,
2008, and November 30, 2007. The auditing firm said that the
Company has suffered recurring losses from operations and has been
unable to refinance its line of credit which expires on April 30,
2009.
In its regulatory report for the three months ended August 30,
2009, the Company disclosed that on April 30, 2009, and again on
June 30, 2009, the Company and National City Bank entered into
amendments to the forbearance agreement, which extended the
maturity date to June 30, 2009, and September 30, 2009,
respectively. On September 30, 2009, the Company and National
City Bank entered into an extension agreement which further
extended the maturity date to October 30, 2009.
The Company said that the purpose of the extension agreement was
to permit progression of current discussions between the Company
and National City Bank toward a possible alternative structuring
of the credit facility. As part of these discussions, the Company
has agreed to retain independent consultants to help it evaluate
alternative strategic options.
About Next, Inc.
Based in Chattanooga, Tennessee, Next, Inc. (OTC: NXTI) designs,
develops, embellishes, markets, and distributes licensed and
branded imprinted sportswear primarily through key licensing
agreements as well as the Company's own proprietary brands. The
Company has approximately 200 licenses and agreements to
distribute its Cadre Athletic(TM), Varsity Classic(TM) , and
Campus Traditions USA(TM) lines for most major colleges and
universities in the United States.
OTC INTERNATIONAL: Files Plan of Liquidation and Disc. Statement
----------------------------------------------------------------
OTC International, Ltd., now known IBP CORP., filed with the U.S.
Bankruptcy Court for the Southern District of New York a Plan of
Liquidation and an accompanying Disclosure Statement.
According to the Disclosure Statement, the Plan provides for the
distribution to the holders of administrative expense claims,
priority tax claims and priority non-tax claims of 100% of the
allowed amount of the claims, the return of collateral securing
other secured claims and the pro rata distribution to holders of
general unsecured claims of substantially all of the debtor's
remaining assets from the plan fund. Holders of equity interests
won't receive any distributions and are deemed to reject the Plan.
The Disclosure Statement did not provide the estimated recovery by
unsecured creditors and priority claimants but said distributions
will be made available to them as a product of "negotiations with
lenders."
Within 60 days after its completion of the acts required by the
Plan, or soon thereafter as is practical, the Plan Administrator
will file a certificate of dissolution for the Debtor or
certificate of merger for the Debtor, together with all other
necessary corporate documentation, to effect its dissolution or
merger under the applicable laws of the state in which the Debtor
is incorporated.
The Debtor relates that at this time, the Debtor does not believe
that there is a viable alternative for completing its Chapter 11
Case other than through confirmation of the Plan. If the Plan is
not confirmed, the Debtor believes that this Chapter 11 Case will
be converted to a case under Chapter 7 of the Bankruptcy Code.
On the Effective Date, the Plan Administrator, on behalf of the
Debtor, will establish the Plan Operations Fund with means a
segregated fund containing (a) the Unsecured Carve Out; (b) all
proceeds of any Causes of Action; and (c) any other funds which
become available to the Estate. After the resolution and payment
of all Administrative Expense Claims, the Plan Fund shall be
utilized by the Plan Administrator to pay all costs of executing
the Plan and winding up the affairs of the Debtor, including, but
not limited to, (i) costs of pursuing any Causes of Action, (ii)
costs of retaining professionals, employees, and consultants,
(iii) the fees and expenses of the Plan Administrator, and (iv)
amounts necessary to fund the Disputed Administrative/Priority
Claims Reserve, the Disputed General Unsecured Claims Reserve and
to pay a proportionate share of taxes which the Plan Administrator
estimates will be attributable to earnings of the Disputed
Administrative/Priority Claims Reserve and the Disputed General
Unsecured Claims Reserve.
A full-text copy of the OTC International's Disclosure Statement
is available for free at:
http://bankrupt.com/misc/IBPCORP_DSPlanofLiquidation.pdf
A full-text copy of the OTC International's Plan of Liquidation is
available for free at:
http://bankrupt.com/misc/IBPCORP_PlanofLiquidation.pdf
Long Island City, New York, OTC International, Ltd. --
http://www.otcinternational.com/-- manufactures jewelry and
precious metal, specializing in diamonds, gold, silver, gemstones,
cameos, and watches. The company filed for Chapter 11 protection
on April 3, 2008 (Bankr. S.D.N.Y. Case No. 08-11181).
Ian R. Winters, Esq., and Patrick J. Orr, Esq., at Klestadt &
Winters LLP, represent the Debtor in its restructuring efforts.
The Debtor selected The Garden City Group Inc. as claims and
noticing agent. The U.S. Trustee for Region 2 appointed creditors
to serve on an Official Committee of Unsecured Creditors.
Silverman Perlstein & Acampora LLP represents the Committee as
its counsel in this case. Howard Fielstein, CPA, a member of
Margolin Winer & Evens LLP, will serve as Chapter 11 examiner of
the Debtor's case.
The Debtor's summary of schedules listed total assets of
$16,362,907 and total debts of $74,024,680. All assets are listed
at net book value excluding metal inventory on consignment of
$29,261,970.
OTTERTAIL AG: Files for Bankruptcy; Has Deal With Secured Lenders
-----------------------------------------------------------------
Jeffrey Hage of The Daily Journal Online reports that Minnesota-
based ethanol producer Otter Tail Ag Enterprises sought protection
from its creditors under Chapter 11 after the company arrived to a
deal with its senior lenders including AgStar Financial and
Midwest Minnesota Community Development Corp.
The Company's board and management, Mr. Hage states, will work
with the lenders to come up with new deals and raise as much as
$12 million in new equity.
AgStar represent 10 other banks while Midwest Minnesota provided
$20 million of new markets tax credits to the company to fund the
construction of a $126 million facility, Mr. Hage notes.
The company expects to file a plan of reorganization with the
Court by Nov. 30, 2009, Mr Hage adds.
According to source, the rising price of corn, the falling price
of gasoline and the national economic crisis created a very
difficult situation for many ethanol producers across the country,
especially the newer plants that were built in the last few years.
The company stated in its latest quarterly report with the
Securities and Exchange Commission that it has $103.4 million in
assets and $88.9 million in liabilities.
Based in Fergus Falls, Minnesota, Ottertail Ag Enterprises LLC --
http://www.ottertailethanol.com/-- produces ethanol.
PACIFIC NORTHERN: Case Summary & Unsecured Creditor
---------------------------------------------------
Debtor: Pacific Northern Corporation
2934 Hilltop Mall Rd. #119
Richmond, CA 94806
Bankruptcy Case No.: 09-70292
Chapter 11 Petition Date: October 30, 2009
Court: United States Bankruptcy Court
Northern District of California (Oakland)
Judge: Edward D. Jellen
Debtor's Counsel: Melvin S. Hodges, Esq.
Law Offices of Melvin S. Hodges
610 16th St. #223
Oakland, CA 94612
Tel: (510) 839-7711
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
The Debtor identified John Lee Peeler with a trade debt claim for
$100,000 as its largest unsecured creditor. A full-text copy of
the Debtor's petition, including a list of its largest unsecured
creditor, is available for free at:
http://bankrupt.com/misc/canb09-70292.pdf
The petition was signed by Bruce C. Williams, vice president of
the Company.
PALMDALE HILLS: Lehman Amends Chapter 11 Plan for SunCal Units
--------------------------------------------------------------
Lehman Commercial Paper Inc. filed its proposed amended Chapter 11
plan and disclosure statement for the subsidiaries of SCC
Acquisitions Inc., which has chapter 11 proceedings before the
U.S. Bankruptcy Court for the Central District of California.
LCPI has amended its plan to restructure SunCal Cos. properties,
after winning permission from the Bankruptcy Court in Manhattan,
which is presiding over the chapter 11 cases of LCPI and other
Lehman Brothers units, to pay $15 million in potential settlements
as part of the proposed reorganization of the $2 billion projects
Lehman bankrolled.
Prepetition, LBHI and its affiliates committed to fund continuing
costs necessary to preserve the value of 18 SCC Projects. The
loans totaled $2.3 billion. The amounts loaned and to be advanced
by Lehman are all secured by, among other things, first priority
trust deeds on the Projects' real property.
LCPI claims that its Plan is superior to the Plan proposed by
Bruce Elieff, sole owner and manager of an entity that is the
indirect parent of the Debtors.
LCPI and other lenders have agreed that on the Plan's Effective
Date they will deposit $10 million through new cash transfers to
the independent trustee to be appointed by the Court to oversee
the liquidation of the Debtors' estates to serve as a reserve for
a guaranteed minimum recovery for creditors who have no security
interest in any of the assets of the Debtors and whose claims have
no priority over General Unsecured Claims.
Second, the Lehman Lenders also are offering certain creditors
(i.e., ES Claimants) that it believes may hold allowed claims that
arguably would benefit from any judgment with respect to the
pending action seeking equitable subordination, the choice of
accepting their pro rata share of a $15 million aggregate
settlement offer projected to yield at least 6.6% on their claims,
payable as soon after the Effective Date as their allowed claims
are determined by the liquidating trustee to be allowed.
Third, the Lehman Plan provides a more appropriate auction process
for the remaining real estate projects that leaves bidders free to
agree to assume or not to assume the bond obligations.
Significantly, this process does afford the Lehman Creditors the
right to credit bid at the auction sales, and they are committing
to bid their aggregate appraised values of $435.7 million for
certain Projects, but this process also requires that the Lehman
Creditors or their nominees to whom the projects are conveyed
grant deeds of trust on every project as to which a Lehman
creditor is the successful bidder.
Full-text copies of the documents are available without charge at:
http://bankrupt.com/misc/LehmanAmendedPlanSCC.pdf
http://bankrupt.com/misc/LehmanAmendedDS_SCC.pdf
About Palmdale Hills
SunCal Companies is a California developer. Palmdale Hills
Property LLC and other units were formed to develop various
residential real estate projects located throughout the western
United States.
Lehman Brothers Holdings Inc. and an affiliate committed to SunCal
on a $2.3 billion funding for the development of various
residential real estate projects. The amounts were secured by,
among other things, first priority trust deeds on the projects,
which include oceanlots in San Clemente, in California. LBHI
stopped funding after it filed for bankruptcy in September 15,
2008.
Palmdale together with affiliates, which include SunCal Bickford,
and LBL-SunCal Northlake LLC, filed for Chapter 11 protection
before the U.S. Bankruptcy Court for the Central District of
California on Nov. 6, 2008 (Case No. 08-17206).
In its petition, Palmdale estimated assets and debts of between
$100,000,001 to $500,000,000. Paul J. Couchot, Esq., at Winthrop
Couchot PC, represents the Debtors in their restructuring effort.
About Lehman Brothers
Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the
fourth largest investment bank in the United States. For more
than 150 years, Lehman Brothers has been a leader in the global
financial markets by serving the financial needs of corporations,
governmental units, institutional clients and individuals
worldwide.
Lehman Brothers filed for Chapter 11 bankruptcy September 15, 2008
(Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition
listed $639 billion in assets and $613 billion in debts,
effectively making the firm's bankruptcy filing the largest in
U.S. history. Several other affiliates followed thereafter.
The Debtors' bankruptcy cases are handled by Judge James M. Peck.
Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife,
Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil,
Gotshal & Manges, LLP, in New York, represent Lehman. Epiq
Bankruptcy Solutions serves as claims and noticing agent.
On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the
U.S. District Court for the Southern District of New York, entered
an order commencing liquidation of Lehman Brothers, Inc., pursuant
to the provisions of the Securities Investor Protection Act (Case
No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as
trustee for the SIPA liquidation of the business of LBI
The Bankruptcy Court has approved Barclays Bank Plc's purchase of
Lehman Brothers' North American investment banking and capital
markets operations and supporting infrastructure for
US$1.75 billion. Nomura Holdings Inc., the largest brokerage
house in Japan, purchased LBHI's operations in Europe for $2
dollars plus the retention of most of employees. Nomura also
bought Lehman's operations in the Asia Pacific for US$225 million.
International Operations Collapse
Lehman Brothers International (Europe), the principal UK trading
company in the Lehman group, was placed into administration,
together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE
Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and
Mike Jervis, partners at PricewaterhouseCoopers LLP, have been
appointed as joint administrators to Lehman Brothers International
(Europe) on September 15, 2008. The joint administrators have
been appointed to wind down the business.
Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc.
filed for bankruptcy in the Tokyo District Court on September 16.
Lehman Brothers Japan Inc. reported about JPY3.4 trillion
(US$33 billion) in liabilities in its petition.
Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by Lehman Brothers Holdings, Inc., and its various
affiliates. (http://bankrupt.com/newsstand/or 215/945-7000)
PARLUX FRAGRANCES: Signs Extension of Regions Bank Loan
-------------------------------------------------------
Fort Lauderdale, Florida-based Parlux Fragrances, Inc., on Friday
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.
Pursuant to the Second Amendment, "Revolving Loan Commitment" will
mean $4,680,612; provided, however, the commitment will be
reduced, automatically and without notice to any Person:
(a) on November 30, 2009, to $3,680,612,
(b) on December 31, 2009, to $2,080,612,
(c) on February 1, 2010, to $1,080,612, and
(d) on February 15, 2010, to $0.
Borrower will pay to Bank the outstanding principal balance of the
Revolving Loans in accordance with this table:
Payment Date Payment Amount
------------ --------------
November 30, 2009 $1,000,000
December 31, 2009 $1,600,000
February 1, 2010 $1,000,000
February 15, 2010 Remaining outstanding
principal balance of
the Revolving Loans
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.
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."
The Company will hold a conference call on 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".
A full-text copy of the SECOND AMENDMENT TO LOAN AGREEMENT AND
AMENDMENT TO FORBEARANCE AGREEMENT is available at no charge at:
http://ResearchArchives.com/t/s?47f5
About Parlux Fragrances
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.
PROGRESSIVE HEALTHCARE: Voluntary Chapter 11 Case Summary
---------------------------------------------------------
Debtor: Progressive Healthcare, LLC
fdba Progressive Healthcare, Inc.
1824 1st Drive
Charleston, SC 29407
Bankruptcy Case No.: 09-24669
Estimated Assets: $0 to $50,000
Estimated Debts: $10,000,001 to $50,000,000
Debtor-affiliates filing Chapter 11 petitions:
(a) Progressive Hospital of Mahoning Valley, LLC
Case No.: 09-24672
Estimated Assets: $0 to $50,000
Estimated Debts: $10,000,001 to $50,000,000
(b) Progressive Hospital of Merrillville, LLC
Case No.: 09-24666
Estimated Assets: $0 to $50,000
Estimated Debts: $10,000,001 to $50,000,000
(c) Progressive Hospital of Fort Wayne, LLC
Case No.: 09-24671
Estimated Assets: $0 to $50,000
Estimated Debts: $10,000,001 to $50,000,000
Chapter 11 Petition Date: October 28, 2009
Court: United States Bankruptcy Court
Northern District of Indiana (Hammond Division)
Judge: J. Philip Klingeberger
Debtor's Counsel: Gordon E. Gouveia, Esq.
433 W. 84th Drive
Merrillville, IN 46410
Tel: (219) 736-6020
Fax: (219) 736-2545
Email: GEG_law@Ameritech.net
The Debtor did not file a list of its 20 largest unsecured
creditors when it filed its petition.
The petition was signed by Herbert W. Iwer III, president of the
Company.
PROVIDENT ROYALTIES: Chapter 11 Trustee Can Sell De Minimis Assets
------------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Texas
authorized Dennis L. Roossien, Jr., the duly appointed Chapter 11
trustee for Provident Royalties, LLC, and its affiliated debtors
to sell de minimis assets.
The sale of de minimis assets including, but not limited to,
certain office equipment and a truck will be sold free and clear
of all liens pursuant to Section 363(f) of the Bankruptcy Code.
Based in Dallas, Texas, Provident Royalties LLC owns working
interests in oil and gas properties primarily in Oklahoma.
Provident and its affiliates filed for Chapter 11 on June 22, 2009
(Bankr. N.D. Tex. Case No. 09-33886). Judge Harlin DeWayne Hale
presides over the case. Epiq Bankruptcy Solutions, LLC is
the claims and noticing agent. The United States Trustee for
the Northern District of Texas appointed nine members to the
Official Committee of Unsecured Creditors.
On July 2, 2009, the Securities and Exchange Commission filed,
under seal, a complaint in District Court for the Northern
District of Texas against the Debtors and certain of their
principals and managing partners on allegations that they sold
stock and limited partnership interest to over 7,700 investors as
part of a $485 million Ponzi scheme.
On July 2, 2009, the District Court for the Northern District of
Texas appointed Dennis L. Roossien, Jr., at Munsch Hardt Kopf &
Harr P.C. in Dallas, Texas, as receiver for the Debtors. On
July 20, 2009, the Bankruptcy Court appointed the receiver as the
Debtors' Chapter 11 trustee. Mr. Roossien, Jr., has taken
possession and control of the Debtors' property and business.
Mr. Roossien, Jr., has selected Patton Boggs, LLP, as his special
counsel. Patton Boggs, LLP, was Debtors' counsel before the
appointment of Mr. Roossien, Jr., as Chapter 11 trustee. Mr.
Roossien, Jr., has selected Munsch Hardt Koph & Harr, P.C., as
counsel. Gardere, Wynne, Sewell, LLP, is the proposed counsel to
the official committee of unsecured creditors.
The Company, in its petition, listed between $100 million and
$500 million each in assets and debts.
QUINLAN PLAZA AND PROFESSIONAL: Voluntary Chapter 11 Case Summary
-----------------------------------------------------------------
Debtor: Quinlan Plaza and Professional Center, LLC
PO Box 1706
Quinlan, TX 75474
Bankruptcy Case No.: 09-37259
Chapter 11 Petition Date: October 29, 2009
Court: United States Bankruptcy Court
Northern District of Texas (Dallas)
Judge: Stacey G. Jernigan
Debtor's Counsel: Joyce W. Lindauer, Esq.
Joyce W. Lindauer, Attorney at Law
8140 Walnut Hill Lane, Suite 301
Dallas, TX 75231
Tel: (972) 503-4033
Fax: (972) 503-4034
Email: courts@joycelindauer.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
The Debtor did not file a list of its 20 largest unsecured
creditors when it filed its petition.
The petition was signed by Earnest Upchurch, president of the
Company.
RAY LLOYD REALTY: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: Ray Lloyd Realty and Construction Co.
171 Longleaf Dr.
Leesburg, GA 31763
Bankruptcy Case No.: 09-12068
Chapter 11 Petition Date: October 30, 2009
Court: United States Bankruptcy Court
Middle District of Georgia (Albany)
Debtor's Counsel: Charles F. Farrell Jr., Esq.
Kelley, Lovett & Blakey, P.C.
2912-B North Oak Street (31602)
P.O. Box 1164
Valdosta, GA 31603
Tel: (229) 242-8838
Fax: (229) 242-1151
Email: SGaskins@kelleylovett.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
According to the schedules, the Company has assets of at least
$6,472,202, and total debts of $6,098,522.
A full-text copy of the Debtor's petition, including a list of its
20 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/gamb09-12068.pdf
The petition was signed by Ray Lloyd, president of the Company.
READER'S DIGEST: Can Sell De Minimis Assets in Ordinary Course
--------------------------------------------------------------
The Reader's Digest Association Inc. and its units obtained
approval from the Bankruptcy Court to sell de minimis assets in
the ordinary course.
The Debtors say the process will allow them to take advantage of
sale opportunities, streamline their operations and efficiently
divest themselves of certain non-core assets of relatively small
value by using a modified process to allow expeditious and cost-
effective review by interested parties in lieu of individual Court
approval of certain sales.
The Debtors maintain an array of assets, including a significant
amount of personal and intangible property and other property
interests like intellectual property. Before the commencement of
their Chapter 11 cases, the Debtors routinely and in the ordinary
course of business sold or, where necessary, otherwise disposed of
non-core assets that were unnecessary to, or could not be used
profitably in, their operations, or from which they could realize
an immediate return.
The Debtors believe that the prudent course, after identifying
that an asset is either obsolete, worn-out, or no longer material
to the Debtors' business, or could generate the greatest return
through a sale, generally is to market the asset for sale. By
doing so, the Debtors recognize several benefits, including
streamlining their operations by eliminating the cost of
maintaining property not essential to their business, making room
for the purchase of other assets, and improving liquidity by
realizing sale proceeds.
Accordingly, during the course of the Chapter 11 cases, the
Debtors anticipate that they will continue to sell non-core assets
where appropriate. In some cases, asset sales of this type would
constitute transactions outside the Debtors' ordinary course of
business that typically would require individual Court approval
pursuant to Section 363(b)(1) of the Bankruptcy Code, relates
James H.M. Sprayregen P.C., Esq., at Kirkland & Ellis LLP, in New
York.
To streamline the sale process and avoid unnecessarily burdening
the Court and the parties-in-interest with numerous motions that
will seek similar relief on similar grounds, the Debtors seek
approval of a streamlined procedure to effectuate, from time to
time, sales, or transfers of surplus, of certain enumerated
categories of assets. Mr. Sprayregen notes that all other sale
transactions outside the ordinary course of the Debtors'
businesses, including non-core asset sales for consideration in
excess of $500,000, would remain subject to Court approval on an
individual basis pursuant to Section 363(b)(1), and in all cases
subject to the Debtors' debtor-in-possession financing.
De Minimis Asset Sale Procedures
The De Minimis Asset Sale Procedures would be applicable to and
cover only non-core asset sales for which the total consideration
is $500,000 or less, as measured by the amount of cash and other
consideration to be received by the Debtors on account of the
assets to be sold, including any assumption of liabilities or
payment by the buyer of aggregate cure costs in connection with
the assumption and assignment of any related executory contracts
and unexpired leases.
Under the De Minimis Asset Sale Procedures, the Debtors will be
permitted to sell assets that are encumbered by liens,
encumbrances or other interests only if the holders of those liens
and interests consent to the sale, either expressly or by implied
consent under the Debtors' DIP Financing credit agreement, after
notice and an opportunity for hearing. Similarly, the Debtors
would be permitted to sell assets co-owned by a Debtor and a third
party only upon the express or implied consent of the co-owner.
Additionally, in certain circumstances where maintaining the asset
is more expensive than not doing so and it appears after
reasonable investigation that it is not possible to sell the asset
for more than the likely expenses of the sale, the Debtors believe
that the prudent course would be to abandon or donate the asset.
The Debtors propose that the proposed abandonment and donations
also be covered by the De Minimis Asset Sale Procedures.
After a Debtor enters into a contract or contracts contemplating a
Covered Sale for which total consideration is equal to or less
than $500,000, the Debtors will serve a notice of the Proposed
Sale to the Debtors' notice parties, which include the Office of
the U.S. Trustee and the DIP Lenders. Each Sale Notice includes
information with respect to the Proposed Sale, like the
description of the assets to be sold and the identity of the non-
debtor party or parties to the Proposed Sale.
The Debtors propose that Interested Parties have through 5:00 p.m.
prevailing Eastern Time on the 10th calendar day after the date of
service of the Sale Notice to object to the Proposed Sale.
If no objections are properly asserted before the expiration of
the Notice Period, the applicable Debtor or Debtors would be
authorized, without further notice and Court approval to
consummate the Proposed Sale.
The Debtors also propose that, for each Covered Sale consummated
pursuant to the proposed procedures, buyers will take title to the
assets free and clear of liens, claims, encumbrances and other
interests. All the Liens, will, at the Debtors' discretion and
consistent with the terms of their DIP Financing, be satisfied out
of the proceeds of the sale or attach to the proceeds of the sale
to the same priority, validity and extent as the Liens attached to
the assets prior to the sale.
The Debtors will also be permitted to compensate any broker they
engaged in connection with any Covered Sale. No broker will be
required to file a retention application under Section 327 of the
Bankruptcy Code.
Bankruptcy Judge Robert Drain, in his order approving the De
Minimis Asset Sale Procedures, noted that the the Procedures will
apply only to asset sale transactions outside the ordinary course
of business involving, in each case, the transfer of assets (i)
for which the total consideration is $500,000 or less, and (ii)
the disposition of the assets will not have a material adverse
effect on the Debtor's core business, provided that a Covered Sale
will not include a sale transaction to an "insider" of the Debtors
under Section 101(31) of the Bankruptcy Code.
About The Reader's Digest Association
RDA is a global multi-brand media and marketing company that
educates, entertains and connects audiences around the world. The
company builds multi-platform communities based on branded
content. With offices in 44 countries, it markets books,
magazines, and music, video and educational products reaching a
customer base of 130 million in 78 countries. It publishes 94
magazines, including 50 editions of Reader's Digest, the world's
largest-circulation magazine, operates 65 branded Web sites
generating 22 million unique visitors per month, and sells
40 million books, music and video products across the world each
year. Its global headquarters are in Pleasantville, N.Y.
Reader's Digest said that as of June 30, 2009, it had total assets
of $2.2 billion against total debts of $3.4 billion.
Reader's Digest, together with its 47 affiliates, filed for
Chapter 11 on August 24 (Bankr. S.D.N.Y. Case No. 09-23529).
Kirkland & Ellis LLP has been engaged as general restructuring
counsel. Mallet-Prevost, Colt & Mosle LLP has been tapped as
conflicts counsel. Ernst & Young LLP is auditor. Miller Buckfire
& Co, LLC, is financial advisor. AlixPartners, LLC, is
restructuring consultant. Kurtzman Carson Consultants is notice
and claims agent.
The Official Committee of Unsecured Creditors is tapping BDO
Seidman, LLP, as financial advisor, Trenwith Securities, LLP, as
investment banker and Otterbourg, Steindler, Houston & Rosen,
P.C., as counsel.
Bankruptcy Creditors' Service, Inc., publishes Reader's Digest
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by Reader's Digest and its affiliates
(http://bankrupt.com/newsstand/or 215/945-7000)
READER'S DIGEST: Gets Nod to Sign Bertelsmann Outsourcing Pacts
---------------------------------------------------------------
Bankruptcy Judge Robert Drain authorized The Reader's Digest
Association Inc., and its units to enter into, and approved
the, product and merchandise outsourcing agreements with certain
subsidiaries of Bertelsmann AG.
Consistent with their practice and as part of the initiatives
associated with the Debtors' long-term strategic business plan,
the Debtors began negotiating the terms of the Outsourcing
Agreements with Bertelsmann prior to the Petition Date, James H.M.
Sprayregen P.C., Esq., at Kirkland & Ellis LLP, in New York,
relates. Bertelsmann, according to Mr. Sprayregen, is a leading
business outsourcing services provider.
The Outsourcing Agreements covers the procurement and production
of (i) book product and media product, and (ii) certain
merchandise and premiums, with the exception of food, food
supplements and vitamins.
The salient terms of the Book and Media Outsourcing Agreement are:
(a) The term of the Book and Media Outsourcing Agreement will
be five years;
(b) An affiliate of Avarto, Printmanagement GMBH, will provide
procurement and production services for the Debtors' book
products and media products.
(c) The Book and Media Outsourcing Agreement includes these
pricing schedule and terms:
* Years 1 to 3: Flat prices based on Reader's Digest's
2008 price grids, except for paper and polycarbonate
rate fluctuation adjustments, every six months;
* Years 4 to 5: Price grids adjusted to reflect consumer
price index fluctuations with a cap on products with the
same specifications;
* Payment Terms: Net 30 days;
* For unique conventional book products and unique
children's products, specific pricing markups apply; and
* Reasonable currency fluctuation protections built into
the agreement;
(d) The Book and Media Outsourcing Agreement contemplates that
Printmanagement GMBH will provide exclusive procurement
and production services for the Debtors' book products and
music and video products. In addition, price adjustment
triggers are set if the Debtors' volume increases or
decreases significantly; and
(e) The Debtors and Printmanagement GMBH, from the third
anniversary of the effective date, have a mutual right to
terminate for convenience upon providing 90 days notice,
subject to a $3.5 million termination fee.
The salient terms of the Merchandise and Premiums Outsourcing
Agreement are:
(a) The term of the Merchandise and Premiums Outsourcing
Agreement will be four years with up to three one-year
extensions if the parties agree on a year-by-year basis;
(b) An affiliate of Bertelsmann, Direct Sourcing Germany GMBH,
will provide procurement and production services for
certain of the Debtors' merchandise and premiums. Local
country procurement for Brazil, Russia and Asia Pacific
are excluded from this agreement;
(c) The Merchandise and Premiums Outsourcing Agreement
includes these pricing schedule and terms:
* Pricing Structure Asia. Cost plus an average 19%
markup; and
* Pricing Structure Local. Cost plus a commission of 50%
savings of the product price, maximum 5%;
(d) Payment Terms. Net 30 days FOB as soon as Reader's
Digest's receivables are insurable. Until insurable, 50%
of fees will be invoiced 30 days before ship date;
(e) The Merchandise and Premiums Outsourcing Agreement
contemplates that Direct Sourcing Germany GMBH will
provide exclusive procurement and production services for
certain of the Debtors' merchandise and premiums. In
addition, price adjustment triggers are set if the
Debtors' volume increases or decreases significantly; and
(f) The Debtors and Direct Sourcing Germany GMBH have a mutual
right to terminate for convenience upon providing 90 days
notice. As part of a termination fee, Reader's Digest
would need to cover the set up fee plus all severance
costs for Direct Sourcing Germany GMBH's employees that
are dedicated to the Reader's Digest account at a minimum
of 50% of their time.
As a result of entering into the Agreements, the Debtors expect to
generate significant cost savings, which are part of their
targeted initiatives for achieving results under their revised
strategic business plan, Mr. Sprayregen says. Specifically, the
Debtors estimate entry into the Agreements will result in annual
average savings of approximately $5 million, net of transition
costs, with the possibility for incremental savings through
gainshare opportunities.
Reduced expenses include eliminate of staff costs for
approximately 50 employees, who will transfer to Bertelsmann under
the Agreements, Mr. Sprayregen discloses. He asserts that entry
into the Agreements will also provide the Debtors with a global
strategic procurement and production platform that will improve
the quality and efficiency of the Debtors' business operations.
He adds that the Agreements will provide the Debtors with price
protection by combining the Debtors' production volumes with
Bertelsmann's production volumes.
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: Gets Nod to Scrap SunGuard & ChannelAdvisor Pacts
------------------------------------------------------------------
Bankruptcy Judge Robert Drain granted a request by The Reader's
Digest Association Inc., and its units to reject two executory
contracts.
The Debtors are party to numerous contracts entered into in the
ordinary course of their business operations before the Petition
Date. In connection with their ongoing restructuring efforts, and
in anticipation of the commencement of their Chapter 11 cases, the
Debtors began reviewing and analyzing all of their contractual
obligations to identify executory contracts and unexpired leases
that are burdensome to their bankruptcy estates and may be
rejected pursuant to Section 365 of the Bankruptcy Code.
After carefully evaluating the terms of their executory contracts
and reviewing other factors relevant to each parties' relationship
with the Debtors, the Debtors determined that rejecting these two
executory contracts is in the best interests of their estates:
(1) the Recovery Services Agreement, dated April 2, 1996, as
amended between SunGuard Availability Services LP and
Debtor CompassLearning, Inc.; and
(2) Master Subscription Agreement, dated May 29, 2007, between
ChannelAdvisor Corp. and Debtor Direct Holdings Americas,
Inc. The agreement includes Module Subscription Order:
SearchAdvisor, dated May 29, 2007, and Module Subscription
Order: ShoppingAdvisor, dated June 20, 2008.
James H.M. Sprayregen P.C., Esq., at Kirkland & Ellis LLP, in New
York, relates that under the SunGuard Services Agreement, SunGuard
agreed to provide the Debtors with emergency, on-call backup
computing systems available if an unplanned or unforeseen event
rendered certain of the Debtors' computing systems unavailable,
while the ChannelAdvisor Agreement is for a web-based application
service called "SearchAdvisor."
The Debtors no longer need the services under the Executory
Contracts. They have determined that rejecting the SunGuard
Services Agreement will result in savings of approximately
$222,000 in administrative expenses over the remaining term of the
agreement, while rejecting ChannelAdvisor Agreement will result in
savings of $15,750.
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)
RECTICEL: Problems with JCI, Inteva Pacts Cue Units' Bankruptcy
---------------------------------------------------------------
Recticel Interiors North America LLC and Recticel Urepp North
America Inc., two automotive subsidiaries of Recticel active in
the United States, made a voluntary filing under Chapter 11 to
obtain judicial protection from their creditors in the U.S.
Bankruptcy Court for the Eastern District of Michigan.
Ryan Beene of Crain's Detroit Business reports that Recticel's
units were unable to renegotiate supply contracts with Johnson
Controls Inc. and Troy-based Inteva Products LLC.
Recticel stated, as a result of the present crisis on the
automotive market in the United States and the structural loss-
making situation of the interior solutions activities in this
region, RINA and RUNA needed to protect their interests as far as
possible in relation to their creditors via this judicial
procedure.
RINA and RUNA, Recticel related, now have three months in which to
reposition a number of contracts.
About RINA and RUNA
RINA makes and sell interior trim for cars in the United States
and RUNA operates in the manufacture of Colo-fast light-stable
polyurethane compounds, which are used by RINA. RINA and RUNA
have 250 employees.
About Recticel
Recticel (NYSE Euronext: REC) --- http://www.recticel.com/--
makes and sells foam filling for automobiles.
RECTICEL INTERIORS: Voluntary Chapter 11 Case Summary
-----------------------------------------------------
Debtor: Recticel Interiors North America, LLC
5600 Bow Pointe Drive
Clarkston, MI 48346
Case No.: 09-73419
Debtor-affiliate filing separate Chapter 11 petition:
Debtor Case No.
------ --------
Recticel North America, Inc. 09-73411
Chapter 11 Petition Date: October 29, 2009
Court: United States Bankruptcy Court
Eastern District of Michigan (Detroit)
Judge: Walter Shapero.Detroit
Debtor's Counsel: Robert S. Hertzberg, Esq.
100 Renaissance Center
36th Floor
Detroit, MI 48243
Tel: (313) 259-7110
Email: hertzbergr@pepperlaw.com
Estimated Assets: $10,000,001 to $50,000,000
Estimated Debts: $100,000,001 to $500,000,000
The Debtor did not file a list of its 20 largest unsecured
creditors when it filed its petition.
REVLON INC: Board Elects Richard Santagati as Director
------------------------------------------------------
Revlon, Inc., said on October 30, 2009, its Board of Directors has
elected Richard J. Santagati as a Director of Revlon, Inc.
effective October 28. With the election of Mr. Santagati, Revlon,
Inc.'s Board of Directors is now comprised of 12 members, eight of
whom constitute independent Directors under NYSE standards.
Mr. Santagati, 66, served as the President of Merrimack College
from 1994 to 2008. Prior to his tenure at Merrimack College, Mr.
Santagati served as President and Chief Executive Officer of Artel
Communications Corporation, a high-tech company, from 1991 to
1994, as a Partner of Lighthouse Capital, Inc., a private
investment management firm, from 1990 to 1991, and as Chief
Executive Officer of Gaston & Snow, formerly a nationally-
recognized, Boston-based law firm, from 1986 to 1990. From 1965
to 1986, Mr. Santagati served in various senior management roles
of increasing responsibility with various telecommunications
providers, including serving as President and Chief Executive
Officer of NYNEX Business Information Systems from 1982 to 1986.
Mr. Santagati formerly served as a Director on the Boards of the
following companies which were required to file reports under the
Securities Exchange Act of 1934: CTC Communications Group, Inc.,
from 1991 to 2004, and Celerity Solutions, from 1997 to 2005. Mr.
Santagati is also involved with a number of civic organizations
and institutions.
Mr. Santagati is not a party to any of the arrangements that would
require disclosure under Item 5.02 of Current Report on Form 8-K,
nor any of the transactions listed in Item 404(a) of Regulation
S-K, the Company said.
About Revlon
Headquartered in New York City, Revlon, Inc. (NYSE: REV) --
http://www.revloninc.com/-- is a worldwide cosmetics, hair color,
beauty tools, fragrances, skincare, anti-perspirants/deodorants
and personal care products company. The Company's brands, which
are sold worldwide, include Revlon(R), Almay(R), Mitchum(R),
Charlie(R), Gatineau(R), and Ultima II(R).
At September 30, 2009, Revlon had $802.0 million in total assets
against total current liabilities of $315.2 million, long-term
debt of $1.147 billion, long-term debt - affiliates of
$107.0 million, long-term pension and other post-retirement plan
liabilities of $209.3 million, other long-term liabilities of
$66.1 million, resulting in $1.04 billion in stockholders'
deficiency. At September 30, 2009, the Company had a liquidity
position of $173.2 million, consisting of cash and cash
equivalents (net of any outstanding checks) of $59.7 million, as
well as $113.5 million in available borrowings under the 2006
Revolving Credit Facility.
REVLON INC: Posts $23.1 Million Net Income for Q3 2009
------------------------------------------------------
Revlon, Inc., reported that net sales in the third quarter ended
September 30, 2009, were $326.2 million, compared to
$334.4 million in the third quarter of 2008, a decrease of 2.5%.
Excluding unfavorable foreign currency fluctuations of
$5.8 million, net sales decreased by 0.7%, driven primarily by
lower net sales of Revlon color cosmetics, partially offset by
higher net sales of Revlon ColorSilk hair color.
In the United States, net sales in the third quarter of 2009 were
$183.7 million, a decrease of $5.7 million, or 3.0%, compared to
$189.4 million in the same period last year, driven primarily by
lower net sales of Revlon color cosmetics and Revlon Beauty Tools,
partially offset by higher net sales of Revlon ColorSilk hair
color.
In the Company's international operations, net sales in the third
quarter of 2009 were $142.5 million, a decrease of $2.5 million or
1.7%, compared to $145.0 million in the same period last year.
Excluding unfavorable foreign currency fluctuations of
$5.8 million, net sales increased 2.3%, driven by higher net sales
in the Latin America and Asia-Pacific regions, partially offset by
lower net sales in the Europe region.
Operating income in the third quarter of 2009 was $50.3 million,
compared to $19.8 million in the same period last year. Adjusted
EBITDA in the third quarter of 2009 was $66.5 million compared to
$42.6 million in the same period last year. Operating income and
Adjusted EBITDA in the third quarter of 2009 benefited from lower
selling, general and administrative expenses primarily due to
lower advertising expenses as a result of lower advertising rates
while increasing the level of media support, and the realization
of restructuring savings from the organizational restructuring
announced in May 2009. Third quarter 2009 operating income and
Adjusted EBITDA included pension expense of $6.7 million, compared
to $1.9 million in the third quarter of 2008.
Income from continuing operations in the third quarter of 2009 was
$23.1 million, or $0.45 per diluted share compared to a loss from
continuing operations of $15.2 million, or $0.30 per diluted
share, in the same period last year. The improvement in income
from continuing operations was driven primarily by improved
operating income of $30.5 million. Income from continuing
operations in the third quarter of 2009 also benefited from lower
interest expense of $6.1 million.
Net income in the third quarter of 2009 was $23.1 million, or
$0.45 per diluted share, compared to $29.2 million, or $0.57 per
diluted share, in the same period last year. Third quarter 2008
net income included income from discontinued operations of
$44.4 million, or $0.87 per diluted share, of which $45.2 million
related to the gain on sale of discontinued operations.
Operating income, Adjusted EBITDA, income from continuing
operations and net income in third quarter of 2009 included
$2.6 million, or $0.05 per diluted share, of charges related to
the previously-announced May 2009 restructuring.
Free cash flow in the third quarter of 2009 was $54.1 million
compared to free cash flow of $16.9 million in the same period
last year, primarily driven by improved income from continuing
operations and continued improvement in working capital
efficiency.
Nine Months Results
Revlon said net sales in the first nine months of 2009 decreased
6.1% to $951.3 million, compared to net sales of $1,012.6 million
in the first nine months of 2008. Excluding unfavorable foreign
currency fluctuations of $42.8 million, net sales decreased by
1.8%.
In the United States, net sales in the first nine months of 2009
decreased 3.8% to $560.9 million, compared to net sales of
$583.0 million in the first nine months of 2008; while in the
Company's international operations, net sales in the first nine
months of 2009 decreased 9.1% to $390.4 million, compared to net
sales of $429.6 million in the first nine months of 2008.
Excluding the unfavorable impact of foreign currency fluctuations
of $42.8 million, net sales in international operations in the
first nine months of 2009 increased 0.8% compared to the same
period last year.
Operating income was $108.5 million in the first nine months of
2009, which included $21.4 million of restructuring charges and
other, compared to $111.0 million in the first nine months of
2008. Adjusted EBITDA was $158.6 million in the first nine months
of 2009, which included $21.4 million of restructuring charges and
other, compared to $181.4 million in the same period last year.
Income from continuing operations in the first nine months of 2009
was $35.7 million, or $0.69 per diluted share, which included
$21.4 million, or $0.42 per diluted share, of restructuring
charges and other, compared to $1.9 million, or $0.04 per diluted
share, in the same period last year.
Net income in the first nine months of 2009 was $36.0 million, or
$0.70 per fully diluted share, which included $21.4 million, or
$0.42 per diluted share, of restructuring charges, compared to
$46.6 million or $0.91 per share in the first nine months of 2008.
Net income in the first nine months of 2008 included income from
discontinued operations of $44.7 million, or $0.87 per diluted
share.
Operating income, income from continuing operations and net income
in the first nine months of 2009 included a total charge of
$20.8 million related to the previously-announced May 2009
restructuring, of which $18.2 million was recorded in the second
quarter of 2009 and the balance of $2.6 million was recorded in
the third quarter of 2009.
Free cash flow in the first nine months of 2009 was $68.6 million
compared to $38.9 million in the same period last year.
Operating income, Adjusted EBITDA, net income and free cash flow
in the first nine months of 2008 included a net gain of
$4.8 million, $5.2 million, $4.0 million and $3.5 million,
respectively, related to the sale of a facility in Mexico.
Operating income, Adjusted EBITDA, net income and free cash flow
in the first nine months of 2008 also included a net gain of
$5.9 million related to the sale of a non-core trademark.
At September 30, 2009, Revlon had $802.0 million in total assets
against total current liabilities of $315.2 million, long-term
debt of $1.147 billion, long-term debt - affiliates of
$107.0 million, long-term pension and other post-retirement plan
liabilities of $209.3 million, other long-term liabilities of
$66.1 million, resulting in $1.04 billion in stockholders'
deficiency. At September 30, 2009, the Company had a liquidity
position of $173.2 million, consisting of cash and cash
equivalents (net of any outstanding checks) of $59.7 million, as
well as $113.5 million in available borrowings under the 2006
Revolving Credit Facility.
Revlon President and Chief Executive Officer, Alan T. Ennis, said,
"We continued to execute our business strategy and delivered
improved profitability and cash flow in the third quarter of 2009.
The organizational restructuring that we fully implemented earlier
this year is delivering cost savings in line with our expectations
and is enabling us to continue to strengthen our brands and become
a stronger, more financially sound company. Additionally, we took
steps to improve our capital structure by completing the Exchange
Offer, which resulted in the extension of the maturity of our
Senior Subordinated Term Loan for a multi-year period."
Mr. Ennis concluded, "The rate of growth in the U.S. mass market
color cosmetics category, according to ACNielsen, slowed
sequentially in the third quarter of 2009. However, we remain
focused on the key drivers of our business, including delivering
innovative, high-quality, consumer preferred products."
On October 8, 2009, as reported by the Troubled Company Reporter,
Revlon consummated its exchange offer in which it issued 9,336,905
shares of Revlon Series A Preferred Stock with an aggregate
liquidation preference of $48.6 million, to holders of Class A
Common Stock who exchanged an equal number of shares of Revlon
Class A common stock. Each share of Series A Preferred Stock
issued is entitled to receive a 12.75% annual dividend, payable
quarterly in cash and is mandatorily redeemable for cash on
October 8, 2013.
In connection with completing the Exchange Offer, MacAndrews &
Forbes Holdings Inc. contributed to Revlon $48.6 million in
principal amount of the Senior Subordinated Term Loan between
Revlon's wholly owned operating subsidiary, Revlon Consumer
Products Corporation, and MacAndrews & Forbes (representing $5.21
of the principal amount of such loan for each of the 9,336,905
shares of Revlon Class A common stock exchanged in the Exchange
Offer). For each share of Revlon Class A common stock exchanged
in the Exchange Offer, Revlon issued to MacAndrews & Forbes one
share of Class A common stock, or 9,336,905 shares of Class A
common stock in the aggregate. As a result of the Exchange Offer,
the following amendments to the terms of the $107 million Senior
Subordinated Term Loan became effective:
* Extending the maturity date of the $58.4 million balance of
the Senior Subordinated Term Loan that remains owed by RCPC
to MacAndrews & Forbes from August 1, 2010 to October 8,
2014, and changing the interest rate from 11% to 12%
annually; and
* Extending the maturity date of the $48.6 million of the
Contributed Loan that remains owed by RCPC to Revlon from
August 1, 2010 to October 8, 2013, and changing the
interest rate from 11% to 12.75% annually.
Revlon said it continues to execute its established business
strategy: (i) building and leveraging its strong brands; (ii)
improving the execution of its strategies and plans, and providing
for continued improvement in its organizational capability through
enabling and developing its employees; (iii) continuing to
strengthen its international business; (iv) improving its
operating profit margins and cash flow; and (v) improving its
capital structure.
A full-text copy of Revlon's earnings release is available at no
charge at http://ResearchArchives.com/t/s?47f0
About Revlon
Headquartered in New York City, Revlon, Inc. (NYSE: REV) --
http://www.revloninc.com/-- is a worldwide cosmetics, hair color,
beauty tools, fragrances, skincare, anti-perspirants/deodorants
and personal care products company. The Company's brands, which
are sold worldwide, include Revlon(R), Almay(R), Mitchum(R),
Charlie(R), Gatineau(R), and Ultima II(R).
REVLON INC: Unit Seeks Amendments to Bank Credit Facilities
-----------------------------------------------------------
Revlon, Inc.'s wholly-owned operating subsidiary, Revlon Consumer
Products Corporation, is seeking amendments to its bank term loan
credit agreement and bank revolver credit agreement that would
permit RCPC to conduct certain refinancing transactions on a
variety of terms and conditions, including terms that would permit
RCPC to seek to refinance its 9.5% Senior Notes due April 2011 on
a secured basis.
The proposed amendments to RCPC's Bank Credit Agreements are
expected to be consummated in November 2009, subject to market and
other customary conditions, including the receipt of consents from
the appropriate lenders. There can be no assurances that any of
these transactions will be consummated.
About Revlon
Headquartered in New York City, Revlon, Inc. (NYSE: REV) --
http://www.revloninc.com/-- is a worldwide cosmetics, hair color,
beauty tools, fragrances, skincare, anti-perspirants/deodorants
and personal care products company. The Company's brands, which
are sold worldwide, include Revlon(R), Almay(R), Mitchum(R),
Charlie(R), Gatineau(R), and Ultima II(R).
At September 30, 2009, Revlon had $802.0 million in total assets
against total current liabilities of $315.2 million, long-term
debt of $1.147 billion, long-term debt - affiliates of
$107.0 million, long-term pension and other post-retirement plan
liabilities of $209.3 million, other long-term liabilities of
$66.1 million, resulting in $1.04 billion in stockholders'
deficiency. At September 30, 2009, the Company had a liquidity
position of $173.2 million, consisting of cash and cash
equivalents (net of any outstanding checks) of $59.7 million, as
well as $113.5 million in available borrowings under the 2006
Revolving Credit Facility.
RITE AID: Closes Plan to Refinance Accounts Receivable Facilities
-----------------------------------------------------------------
Rite Aid Corporation on October 26 announced the successful
completion of its comprehensive plan to refinance its existing
first lien accounts receivable securitization facility and second
lien accounts receivable securitization facility due September
2010.
As of October 23, 2009, there was $475 million outstanding under
the securitization facilities. The refinancing consists of an
offering of $270 million aggregate principal amount of 10.250%
senior secured notes due 2019 (with a yield to maturity of
10.375%, based on an offering price of 99.242% per note),
commitments to increase the maximum borrowing capacity under Rite
Aid's existing senior secured revolving credit facility from
$1.0 billion to $1.175 billion, and an increase in borrowings
under Rite Aid's existing $525 million senior secured term loan
due June 2015 by $125 million to $650 million.
As a result of the refinancing, Rite Aid has refinanced all of its
September 2010 debt maturities.
Completion of Notes Offering
In a Form 8-K filed with the Securities and Exchange Commission,
Rite Aid on October 26 completed its offering of $270 million
aggregate principal amount of its 10.250% senior secured notes due
October 2019 to qualified institutional buyers pursuant to Rule
144A, and outside of the United States pursuant to Regulation S,
under the Securities Act of 1933, as amended.
The notes are unsecured, unsubordinated obligations of Rite Aid
Corporation and are guaranteed by substantially all of Rite Aid's
subsidiaries. The guarantees are secured on a second lien basis.
The notes and the related subsidiary guarantees were offered in
the United States to qualified institutional buyers pursuant to
Rule 144A under the Securities Act of 1933, as amended, and
outside the United States pursuant to Regulation S under the
Securities Act. The notes and the related subsidiary guarantees
have not been registered under the Securities Act and may not be
offered or sold in the United States without registration or an
applicable exemption from the registration requirements.
The Notes are guaranteed by the same subsidiaries that guarantee
Rite Aid's obligations under its senior secured credit facility,
including the Amended Revolver and the Incremental Tranche 4 Term
Loan, and Rite Aid's outstanding 9.750% senior secured notes due
2016, 10.375% senior secured notes due 2016, 7.5% senior secured
notes due 2017, 8.625% senior notes due 2015, 9.375% senior notes
due 2015 and 9.5% senior notes due 2017. The guarantees of the
Notes are secured on a second priority basis, pari passu with the
secured guarantees of Rite Aid's 10.375% senior secured notes due
2016 and 7.5% senior secured notes due 2017.
Incremental Facility Amendments
On the Closing Date, Rite Aid also entered into certain
incremental facility amendments to its senior secured credit
facility which (i) increased the maximum commitments under the
Company's existing senior secured revolving credit facility from
$1.0 billion to $1.175 billion and (ii) increased the Company's
borrowings by $125.0 million under its existing Tranche 4 Term
Loan due 2015.
Rite Aid used the net proceeds of the Offering and borrowings
under the Incremental Tranche 4 Term Loan and the Amended Revolver
to repay all amounts outstanding under Rite Aid's accounts
receivable securitization facilities, and for related fees and
expenses, including the prepayment fees associated with the
repayment of the amounts outstanding under Rite Aid's second lien
securitization facility. Upon prepayment of the securitization
facilities, both securitization facilities were terminated.
Borrowings under the Amended Revolver will continue to bear
interest, at Rite Aid's option, at (i) an adjusted LIBOR rate with
a floor of 3.00% per annum, plus the Revolver Margin or (ii) the
greater of (a) Citibank's base rate with a 4.00% per annum base
rate floor and (b) the federal funds rate plus 0.50%, in each case
plus the Revolver Margin. The "Revolver Margin" is 4.50% for
LIBOR borrowings and 3.50% for base rate borrowings, and after
November 28, 2009, can fluctuate depending on the amount of
revolver availability, as specified in Rite Aid's senior secured
credit facility. Rite Aid is required to pay fees on the daily
unused amount of the Amended Revolver in an amount per annum equal
to 1.00% until November 28, 2009 and thereafter in an amount per
annum equal to 1.00% or 0.75% depending on the amount of revolver
availability. Amounts drawn under the Amended Revolver become due
and payable on September 30, 2012.
At Rite Aid's option, the Tranche 4 Term Loan (including the
Incremental Tranche 4 Term Loan) bears interest at a rate per
annum equal to either (a) an adjusted LIBOR rate (with a LIBOR
floor of 3.00% per annum) plus 6.50% or (b) the greater of (x)
Citibank's base rate (with a base rate floor of 4.00% per annum)
and (y) the federal funds rate plus 0.50%, in each case plus
5.50%. The Tranche 4 Term Loan (including the Incremental Tranche
4 Term Loan) is guaranteed by the Subsidiary Guarantors. Rite Aid
must make mandatory prepayments of the Tranche 4 Term Loan
(including the Incremental Tranche 4 Term Loan, on a pro rata
basis with any other term loan under its senior secured credit
facility and other senior obligations that require the sharing of
such prepayments, including Rite Aid's 9.750% senior secured notes
due 2016) with the proceeds of asset dispositions and casualty
events (subject to certain limitations). Rite Aid is also
required to make mandatory prepayments of the Tranche 4 Term Loan
(including the Incremental Tranche 4 Term Loan, on a pro rata
basis with any other term loans under its senior secured credit
facility) with a portion of any excess cash flow generated by Rite
Aid and with the proceeds of certain issuances of equity and debt
(subject to certain exceptions).
If at any time the total credit exposure outstanding under Rite
Aid's senior secured credit facility (including the Incremental
Facilities), and together with the principal amount of Rite Aid's
9.750% senior secured notes due 2016, and the principal amount of
any other senior obligations exceeds the borrowing base, Rite Aid
will be required to make certain other mandatory prepayments to
eliminate such shortfall.
All prepayments of the Tranche 4 Term Loan (including the
Incremental Tranche 4 Term Loan) occurring on or prior to the
third anniversary of the initial borrowing of the Tranche 4 Term
Loans are subject to a prepayment premium in an amount equal to
(i) 5.0% of the principal amount prepaid if such prepayment occurs
on or prior to the first anniversary of such borrowing, (ii) 3.0%
of the principal amount prepaid if such prepayment occurs on or
prior to the second anniversary of such borrowing and (iii) 1.0%
of the principal amount prepaid if such prepayment occurs on or
prior to the third anniversary of such borrowing.
Registration Rights Agreement
On October 26, 2009, the Company entered into a registration
rights agreement relating to the Notes, among the Company, the
Subsidiary Guarantors and Citigroup Global Markets Inc., Wells
Fargo Securities, LLC, Banc of America Securities LLC and Goldman,
Sachs & Co., as the initial purchasers of the Notes. The
Registration Rights Agreement requires Rite Aid and the Subsidiary
Guarantors, at their cost, to among other things: (i) file a
registration statement with respect to the Notes within 150 days
after the Closing Date to be used in connection with the exchange
of the Notes and related guarantees for publicly registered notes
and related guarantees with substantially identical terms in all
material respects (except for the transfer restrictions relating
to the Notes); (ii) use their commercially reasonable efforts to
cause the applicable registration statement to become effective
under the Securities Act within 210 days after the Closing Date;
and (iii) use their commercially reasonable efforts to effect an
exchange offer of the Notes and the related guarantees for
registered notes and related guarantees within 270 days after the
Closing Date. In addition, under certain circumstances, Rite Aid
and the Subsidiary Guarantors may be required to file a shelf
registration statement to cover resales of the Notes.
Indenture
The Notes were issued pursuant to an indenture, dated as of
October 26, 2009, among the Company, The Bank of New York Mellon
Trust Company, N.A., as trustee, and the Subsidiary Guarantors.
At any time and from time to time, prior to October 15, 2012, Rite
Aid may redeem up to a maximum of 35% of the original aggregate
principal amount of the Notes with the net proceeds of one or more
equity offerings, at a redemption price equal to 110.250% of the
principal amount thereof, plus accrued and unpaid interest
thereon, if any, to, but not including, the redemption date
(subject to the right of holders of record on the relevant record
date to receive interest due on the relevant interest payment
date); provided that: (i) at least 65% of the original aggregate
principal amount of the Notes remains outstanding; and (ii) the
redemption occurs within 75 days of the completion of such equity
offering upon not less than 30 nor more than 60 days' prior
notice. Prior to October 15, 2014, Rite Aid may redeem some or
all of the Notes by paying a "make-whole" premium based on U.S.
Treasury Rates. On or after October 15, 2014, and on or after
October 15 of the relevant year listed below, Rite Aid may redeem
some or all of the Notes at the prices listed below, plus accrued
and unpaid interest, if any, to, but not including, the redemption
date (subject to the right of holders of record on the relevant
record date to receive interest due on the relevant interest
payment date): 2014 at a redemption price of 105.125%; 2015 at a
redemption price of 103.417%; 2016 at a redemption price of
101.708% and thereafter at a redemption price of 100%.
A full-text copy of the Incremental Facility Amendment No. 1,
dated as of October 26, 2009, among Rite Aid Corporation, the
lenders party thereto, Citicorp North America, Inc., as
administrative agent and collateral agent and the other agents
party thereto, is available at no charge at
http://ResearchArchives.com/t/s?47e9
A full-text copy of the Incremental Facility Amendment No. 2,
dated as of October 19, 2009 and effective as of October 26, 2009,
among Rite Aid Corporation, the lenders party thereto, Citicorp
North America, Inc., as administrative agent and collateral agent
and the other agents party thereto, is available at no charge at
http://ResearchArchives.com/t/s?47ea
About Rite Aid Corporation
Rite Aid Corporation (NYSE: RAD) -- http://www.riteaid.com/-- is
one of the nation's leading drugstore chains. On September 26,
2009, the company operated 4,809 stores compared to 4,922 stores
in the like period a year ago. Rite Aid had fiscal 2009 annual
sales of more than $26.3 billion.
At August 29, 2009, the Company had $8,052,678,000 in total assets
against $9,453,207,000 in total liabilities, resulting in
$1,400,529,000 in stockholders' deficit.
* * *
Rite Aid carries a 'Caa2' probability of default and corporate
family ratings from Moody's, 'B-' issuer default rating from
Fitch, and 'B-' corporate credit and issuer credit ratings from
Standard & Poor's.
ROBERT EDWARD BROWN: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------------
Joint Debtors: Robert Edward Brown
Lydia Romano Brown
3230 Brantley Oaks Drive
Fort Myers, FL 33905
Bankruptcy Case No.: 09-30761
Chapter 11 Petition Date: October 28, 2009
Court: United States Bankruptcy Court
District of Maryland (Baltimore)
Judge: Nancy V. Alquist
Debtors' Counsel: Richard M. McGill, Esq.
Law Offices of Richard M. McGill
PO Box 358
5303 West Court Drive
Upper Marlboro, MD 20773
Tel: (301) 627-5222
Email: mcgillrm@aol.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
According to the schedules, the Company has assets of at least
$2,045,049, and total debts of $2,375,942.
A full-text copy of the Debtors' petition, including a list of
their 20 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/mdb09-30761.pdf
The petition was signed by the Joint Debtors.
SARATOGA MEDICAL CENTER: Voluntary Chapter 11 Case Summary
----------------------------------------------------------
Debtor: Saratoga Medical Center, Ltd.
6230 Denain
Corpus Christi, TX 78413
Bankruptcy Case No.: 09-20769
Chapter 11 Petition Date: November 1, 2009
Court: United States Bankruptcy Court
Southern District of Texas (Corpus Christi)
Judge: Richard S. Schmidt
Debtor's Counsel: Robert D. Repasky, Esq.
Attorney at Law
PO Box 158
Fulton, TX 78358-0158
Tel: (361) 288-4724
Fax: (361) 527-0886
Email: repaskylaw@repasky.net
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
According to the schedules, the Company has assets of at least
$4,987,284, and total debts of $3,333,932.
The Debtor did not file a list of its 20 largest unsecured
creditors when it filed its petition.
The petition was signed by Jairo Puentes, general partner of the
Company.
SAVANNAH GATEWAY WEST: Case Summary & 12 Largest Unsec. Creditors
-----------------------------------------------------------------
Debtor: Savannah Gateway West, LLC
dba Savannah West
200 S Orange Ave, Suite 2025
Orlando, FL 32801
Case No.: 09-16576
Type of Business: The Debtor operates a real estate business.
Chapter 11 Petition Date: October 30, 2009
Court: United States Bankruptcy Court
Middle District of Florida (Orlando)
Judge: Arthur B. Briskman
Debtor's Counsel: R Scott Shuker, Esq.
Latham Shuker Eden & Beaudine LLP
Post Office Box 3353
Orlando, FL 32802
Tel: (407) 481-5800
Fax: (407) 481-5801
Email: bankruptcynotice@lseblaw.com
Estimated Assets: $10,000,001 to $50,000,000
Estimated Debts: $10,000,001 to $50,000,000
The petition was signed by Carl Christian Thier.
Debtor's List of 12 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Chatham County Tax $65,255
CSC Trade Debt $269
Fishkind & Assoc. Marketing analysis $2,800
Florida Dept of Revenue Unknown
Attn: Executive Director
5050 W Tennessee St.
Tallahassee, FL 32399-0140
Hussey Gay Bell & Legal Services $2,998
DeYoung
Internal Revenue Service Unknown
Centralized Insolvency Ops
PO Box 21126
Philadelphia, PA 19114
KPMG Accounting Unknown
PO Box 120001
Dept. 0572
Dallas, TX 75312-0572
Liberty Wentworth, LLC Commission Dispute Unknown
c/o J. Brennan, Esq.
GrayRobinson
PO Box 3068
Orlando, FL 32802-3068
Lowndes Drosdick et al Legal Services $223,028
Thomas & Hutton Engineering Services $2,042
Engineering
Weiner Shearouse Weitz Legal Services $1,838
Westfield Insurance Insurance $356
SEASCAPE PROPERTY: Case Summary & Unsecured Creditor
----------------------------------------------------
Debtor: Seascape Property Ltd
26478 Ynez Road
Temecula, CA 92591
Bankruptcy Case No.: 09-35924
Chapter 11 Petition Date: October 29, 2009
Court: United States Bankruptcy Court
Central District of California (Riverside)
Judge: Thomas B. Donovan
Debtor's Counsel: Thomas C. Nelson, Esq.
550 W C St., Suite 1850
San Diego, CA 92101
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
The Debtor identified Celli Geyer with a trade debt claim for an
unknown amount as its largest unsecured creditor. A full-text copy
of the Debtor's petition, including a list of its largest
unsecured creditor, is available for free at:
http://bankrupt.com/misc/cacb09-35924.pdf
The petition was signed by Kevin Tucker, president of the Company.
SEMGROUP LP: Bankruptcy Court's Order Confirming Plan
-----------------------------------------------------
Judge Brendan Linehan Shannon of the U.S. Bankruptcy Court for
the District of Delaware issued an order on October 28, 2009,
confirming the Fourth Amended Joint Plan of Reorganization filed
by SemGroup L.P. and its debtor affiliates.
SemGroup obtained court approval of the Fourth Amended Plan after
a 10-hour hearing held October 26, 2009. An amended plan and
proposed order was filed on October 27 to incorporate Judge
Shannon's ruling and changes made during the October 26 hearing.
One hundred thirty-four classes were entitled to vote on the Plan
and 124 Classes cast their votes. As gathered from the report,
119 Classes out of 124 Classes were in favor of the Plan, while
five classes were against the Plan.
The Court held that the Plan satisfies Section 1129 of the
Bankruptcy Code:
(a) The Fourth Amended Plan complies with the applicable
provisions of the Bankruptcy Code, thereby satisfying
Section 1129(a)(1). In addition to Administrative Expense
Claims, Postpetition Financing Claims, Professional
Compensation and Reimbursement Claims, Senior Notes
Indenture Trustee Fees, US Term Lender Group Fees, and
Priority Tax claims, which need not be classified,
Article IV of the Fourth Amended Plan designates 265
Classes of Claims and Equity Interests against the
appropriate Debtor. The Claims and Equity Interests
included in each Class are substantially similar to other
Claims and Equity Interests, as the case may be, in each
Class. Valid business, legal, and factual reasons exist
for separately classifying the various claims and Equity
Interests under the Fourth Amended plan, and those Classes
do not unfairly discriminate between holders of Claims and
Equity Interests. The Fourth Amended Plan, therefore,
satisfies Sections 1122 and 1123(a)(1) of the Bankruptcy
Code.
(b) Each Debtor complied with Section 1129(a)(2).
Specifically:
-- Each Debtor is a proper debtor under Section 109 of
the Bankruptcy Code;
-- Each Debtor has complied with all applicable
provisions of the Bankruptcy Code, except as
otherwise provided or permitted by orders of the
Court; and
-- Each Debtor has complied with the applicable
provisions of the Bankruptcy Code, the Bankruptcy
Rules, the Local Rules for the United States
Bankruptcy Court for the District of Delaware and
the Disclosure statement orders in transmitting the
Solicitation Materials and in tabulating the votes
with respect to the Fourth Amended Plan, thereby
complying with Section 1125 with respect to the
Fourth Amended Disclosure Statement and the Fourth
Amended Plan.
(c) The Plan is proposed in Good Faith, thus, satisfying
Section 1129(a)(3). The Fourth Amended plan is based on
extensive, arm's-length negotiations between and among the
Debtors, the Official Committee of Unsecured Creditors,
the Official Producers' Committee, Bank of America, N.A.,
as the Prepetition Administrative Agent, and other
parties-in-interest, and represents the culmination of
months of intensive negotiations and discussions among all
parties. The Fourth Amended Plan is supported by the
Creditors' Committee, the Producers' Committee, and
certain other major creditors (including the prepetition
Lenders, holders of the Senior Notes Claims, and holders
of the Secured First purchaser producer claims) and was
overwhelmingly accepted by creditors as set forth in the
Voting Certification. The Fourth Amended Plan
restructures the debt obligations of the Debtors and
provides the means through which the SemGroup enterprise
can continue to operate as a viable entity. Therefore,
the Fourth Amended Plan was proposed with the legitimate
and honest purpose of maximizing the value of the Debtors'
estates and to effectuate a successful reorganization for
the Debtor entities. Further, the release, exculpation,
and injunction provisions embodied in the Fourth Amended
Plan are fair and equitable, and a component of the
consensual agreement reached among the Debtors and the
various creditor constituencies and are consistent with
Sections 1123 and ll29 of the Bankruptcy Code.
(d) All payments made or to be made by any of the Debtors for
services or for costs and expenses in connection with the
Chapter 11 cases, or in connection with the Fourth Amended
Plan and incident to the Chapter 11 cases, have been
approved by, or are subject to the approval of, the Court
as reasonable, thereby satisfying Section 1129(a)(4).
(e) The Debtors have complied with Section 1129(a)(5) of the
Bankruptcy Code. The identities of those persons who will
serve on the Effective Date of the Fourth Amended Plan as
directors of New Holdco have been disclosed in the Fourth
Amended Disclosure Statement. The identity of the
officers of New Holdco who will serve on the Effective
Date were disclosed in the Plan Supplement and at the
Confirmation Hearing, to the extent known at that time.
The identity and compensation of any insiders to be
retained or employed by the Reorganized Debtors or New
Holdco were disclosed in the plan Supplement. Following
the Effective Date, the Board of New Holdco will determine
what changes, if any, will be made to the composition of
the officers of New Holdco and their compensation. The
members of the Board will serve in accordance with the New
Holdco organizational documents as these may be amended
from time to time. The appointment, or continuation in
office, of those individuals is consistent with the
interests of creditors and with public policy.
The Debtors disclosed on October 23, 2009, the identity
and compensation of the Reorganized Debtors' executive
officers. The executive officers and their current
positions and salaries are:
Name Title Compensation
---- ----- ------------
Pete Schwiering Pres., SemCrude, L.P. $250,000
Kevin Clement Pres., SemStream, L.P. $250,000
Alisa Perkins Treas., SemGroup, L.P. $225,000
Tim O'Sullivan Pres. & COO, SemGas, L.P. $225,000
David Wunch Exec. VP, SemStream $220,000
(f) No rates are being changed that require approval of a
governmental regulatory commission, and accordingly,
Section 1129(a)(6) is inapplicable to the Fourth Amended
Plan.
(g) The "best interests" test is applicable only to those (i)
holders of Claims that voted to reject the Fourth Amended
Plan in Class 20g, Class 211, Class 217, Class 2l9, and
Class 222 and (ii) holders of Equity Interests in Class
279, which were deemed to have rejected the Fourth Amended
Plan. As demonstrated by the affidavit supporting the
Plan submitted by Terrence Ronan, chief executive officer
of the Debtors, and the liquidation analysis contained in
the Fourth Amended Disclosure Statement, which employed
commonly accepted methodologies and reasonable
assumptions, each holder of an impaired Claim against or
Equity Interest in the Debtors either has accepted the
Fourth Amended Plan or will receive or retain under the
Fourth Amended Plan, on account of that Claim or Equity
Interest, property of a value, as of the Effective Date,
that is not less than the amount that that holder would
receive or retain if the applicable Debtor were liquidated
under Chapter 7 of the Bankruptcy Code on that date.
Accordingly, the Fourth Amended Plan satisfies Section
ll29(a)(7).
(h) Classes 1 through 52, Classes 123 through 148, and Classes
253 through 278 are Classes of unimpaired Claims, each of
which is conclusively presumed to have accepted the Fourth
Amended Plan in accordance with Section ll26(f). Classes
53 through 55, Classes 70 through 122, Classes 149 through
201, Class 203, Classes 206 through 207, Class 209, Class
212, Class 214, Class 218, Class 221, and Classes 223
through 224, which are the impaired Classes of Claims
against the Debtors entitled to vote on the Fourth Amended
Plan, have voted to accept the Fourth Amended Plan, in
accordance with Section 1126(b) and (c). Class 208, Class
211, Class 217, Class 279, and Class 222 have voted to
reject the Fourth Amended Plan, and Class 279 are impaired
by the Fourth Amended Plan and not entitled to receive or
retain any property under the Fourth Amended plan, and
therefore, is deemed to have rejected the Fourth Amended
Plan pursuant to Section 1126(9). Although Section
1129(a)(8) is not satisfied with respect to the rejection
of Class 208, Class 2ll, Class 2l7, Class 219, and Class
222, and the deemed rejection of Class 279, the Fourth
Amended Plan may nevertheless be confirmed because the
Fourth Amended Plan satisfies Section 1129(b) with respect
to the Rejecting Classes.
(i) The treatment of Administrative Expense Claims and
Priority Tax Claims pursuant to Article II of the Fourth
Amended Plan satisfies the requirements of Sections
1129(a)(9)(A) and (C). The treatment of Priority Non-Tax
Claims pursuant to Section 5.1 of the Fourth Amended Plan
satisfies the requirements of Sections 1129(a)(9)(B). The
treatment of Secured Tax Claims pursuant to Section 5.2 of
the Fourth Amended Plan satisfies the requirements of
Section 1129(a)(9)(D).
(j) Classes 53 through 55, Classes 70 through 122, Classes 149
through 201, Class 203, Classes 206 through 207, Class
209, Class 212, Class 214, Class 218, Class 221, and
Classes 223 through 224, each of which is impaired under
the Fourth Amended Plan and entitled to vote, voted to
accept the Fourth Amended Plan by the requisite
majorities, determined without including any acceptance of
the Fourth Amended Plan by any insider, thereby satisfying
the requirements of Section 1129(a)(10).
(k) The information in the Fourth Amended Disclosure Statement
and the evidence proffered or adduced at the Confirmation
Hearing and in the Ronan Affidavit: (i) is persuasive and
credible; (ii) has not been controverted by other
evidence; and (iii) establishes that the Fourth Amended
Plan is feasible, there is a reasonable likelihood that
New Holdco and the Reorganized Debtors will meet their
financial obligations under the Fourth Amended Plan in the
ordinary course of business, and confirmation of the
Fourth Amended plan is not likely to be followed by the
liquidation or need for further financial reorganization
of New Holdco or the Reorganized Debtors, thereby
satisfying the requirements of Section 1129(a)(11).
(l) As required, pursuant to Section 23.4 of the Fourth
Amended Plan, all fees payable under Section 1930 of Title
28 of the United States Code have been or will be paid on
the Effective Date, and will continue to be paid
thereafter as required, thereby satisfying the
requirements of Section ll29(a)(12).
(m) In the ordinary course of their businesses, the Debtors
did not have obligations with respect to retiree benefits.
Accordingly, Section 1129(a)(13) is inapplicable in the
Chapter 11 Cases.
(n) In the ordinary course of their businesses, the Debtors
did not have obligations with respect to domestic support.
Accordingly, Section ll29(a)(14) is inapplicable in the
Chapter 1l Cases.
(o) None of the Debtors is an "individual," and accordingly,
Section 1129(a)(15) is inapplicable to the Fourth Amended
Plan.
(p) The Debtors are each a moneyed, business, or commercial
corporation, and thus, Section 1129(a)(16) is inapplicable
in the Chapter 11 cases.
As part of the Plan, the Debtors have obtained a commitment for a
$500 million exit financing facility from a syndicate of lenders,
including BNP Paribas, Bank of America, N.A., and Calyon London
Branch. The exit facility will be available on the effective
date of the Plan.
In consideration for the classification, distribution and other
benefits provided under the Fourth Amended Plan, (l) upon the
Effective Date, the provisions of the Fourth Amended Plan,
including without limitation the Producers' Settlement, the other
Twenty-Day Claims Settlement, and the Creditors' Settlement; (2)
the settlements approved pursuant to the Confirmation Order,
including, without limitation, the J. Aron & Company Stipulation
of Settlement, the BP Oil Supply Company Stipulation of
Settlement, and the Conoco Phillips Company stipulation of
settlement; and (3) all other orders entered by the Bankruptcy
Court pursuant to Rule 9019 of the Federal Rules of Bankruptcy
Procedure, including, without limitation, the settlements with
holders of Lender Swap Obligations, will constitute a good faith
compromise and settlement of all Claims or controversies resolved
pursuant to the Fourth Amended Plan.
Pursuant to the valuation analyses set forth in the Fourth
Amended Disclosure Statement, the Court held that the enterprise
value of the Debtors is insufficient to support a distribution to
holders of SemGroup Equity Interests under absolute priority
principles.
The Record Date with respect to the purpose of determining the
holders of Allowed Claims entitled to receive distributions
pursuant to the Fourth Amended plan in Classes 1 through 148 and
Classes 175 through 226 will be October 30, 2009.
Plan Objections Overruled
If Not Resolved or Withdrawn
All parties have had a full and fair opportunity to litigate all
issues raised by the Objections, or which might have been raised,
and the Objections have been fully and fairly litigated. All
objections, responses, statements, and comments in opposition to
the Fourth Amended Plan, and all reservations of rights with
respect to the Plan, other than those withdrawn with prejudice in
their entirety prior to the Confirmation Hearing or otherwise
resolved on the record of the Confirmation Hearing, are overruled
for the reasons stated on the record, Judge Shannon held.
More than 30 parties-in-interest, prior to the entry of the
Confirmation Order, filed objections and asked the Court to deny
confirmation of the Plan:
* Thomas L. Kivisto
* Westback Purchasing Co., LLC
* Manchester Securities Corp.
* Benson Mineral Group, Inc., and Mint Limited Partnership
* Liberty Mutual Insurance Company
* State of Louisiana Department of Revenue
* St. Mary Land & Exploration Company
* Prima Exploration, Inc.
* Crude Marketing and Transportation, Inc.
* Liquidity Solutions, Inc.
* Valero Marketing and Supply Company
* Enerfin Resources I Limited Partnership
* River View Pipelines, L.L.C.
* Cimmarron Gathering, L.P.
* TEPPCO Crude Oil, LLC
* DBGG, L.L.C.
* Sandbridge Energy Inc.
* Koch Materials, LLC
* Luke Oil Company
* Chevron Products Company
* Sunoco Partners Marketing & Terminals, L.P.
* Husky Marketing and Supply Company
* Harvest Fund Advisors LLC
* Plains Marketing, L.P.
* Eagle Mountain-Saginaw ISD and other Texas ISDs
* Kaw Pipe Line Corp.
* Jayhawk Pipeline, L.L.C.
* Ward Williston Company
* XTO Energy Inc.
* New York Mercantile Exchange, Inc.
* Lion Oil Company, Inc.
* Harbinger Capital Partners Master Fund I, Ltd.
* Charter Oak Production Company, LLC, et al.
* Special Energy Corporation
* Tower Royalty Company LLC
Mr. Kivisto complained that the Plan contains provisions that
strip him and others, of certain claims and rights to defend any
litigation, including the adversary action commenced by the
Creditors' Committee against him and Westback Purchasing Co. LLC.
He added that the Plan contains third-party releases that are
unnecessary and impermissible.
Manchester Securities, as the largest creditor of Debtor SemGroup
Holdings, L.P., complained that the Plan will have a dramatic
effect by wiping out SemGroup Holdings' $50 million claims
against SemCrude Pipeline, L.L.C. Manchester Securities sought
the Court's authority to file under seal exhibits accompanying
its objection to the Plan.
The other Objecting Parties complained, among others, that (i)
the Plan mistreated their Claims, (ii) the cure amount the
Debtors propose to pay for the executory contracts to be assumed
under the Plan is miscalculated and should be increased, and
(iii) the releases granted to J. Aron, BP Oil, and ConocoPhillips
results in a disparate treatment of creditors in the same class
violating Section 1123(a)(4).
Prior to the entry of the Confirmation Order, the Debtors
addressed the objections and asked the Court to overrule the
Objections. The Debtors also maintained that the Plan satisfied
the confirmation requirements of Section 1129 and should be
confirmed.
Mr. Ronan filed a declaration in support of the Plan and in
response to Manchester Securities' Confirmation Objection. Mr.
Ronan explained that the transfer of the $50 million to SemCrude
Pipeline to effectuate a transaction with Barclays PLC was never
intended to create a payable by SemCrude Pipeline or a receivable
for SemGroup Holdings because it merely constituted a return of
money from SemGroup L.P. to SemGroup Pipeline.
Lisa Donahue, chief restructuring officer of SemGroup, in a
separate Plan support declaration, added that the $50 million
intercompany receivables and payables reflected on the Debtors'
December 2, 2008 schedules of assets and liabilities have been
erroneously created by the Debtors' accounting software. The
Debtors amended their Schedules on August 11, 2009, to accurately
reflect the $50 million transaction by eliminating all
intercompany payables and receivables related to the Barclays
transaction. She said that she previously explained the 2008
Schedules error to Manchester Securities representatives, who
implied that they were satisfied with the explanation.
Alisa Perkins, treasurer of SemCrude, L.P., confirmed that upon
review of the intercompany payable and receivable journal entries
that the Oracle system self-generated, she found out that the
entries do not reflect the true nature of the movement of the $50
million in cash from SemCrude Pipeline to SemGroup to Barclays
and back. She explained that the movement of the $50 million
only affected cash management but did not create any intercompany
receivables or payables as reflected on the Debtors' Amended
Schedules.
Martin A. Sosland, Esq., at Weil, Gotshal & Manges LLP, in
Dallas, Texas, on behalf of the Debtors, asserted that the Plan
meets Section 1123(a). He explained that the Debtors'
settlements with J. Aron, BP Oil, and Conoco are settlements with
net amounts to the Debtors, not with net creditors, just as the
Debtors' previous collection of funds from Sunoco Partners and
others were from account debtors.
Mr. Sosland reminded the Court that the Plan is the culmination
of over a year of extensive analysis and negotiations among the
Debtors, the Lender Steering Committee, BofA, the Creditors'
Committee, the OPC and other parties-in-interest. He noted that
the Plan incorporates settlements that were negotiated to develop
a viable and confirmable plan of reorganization that would be
supported by the major creditor constituencies:
* Producers' Settlement that resolves the parties' outstanding
disputes regarding the Producers' Twenty-Day Claims;
* Other Twenty-Day Claims Settlement that provides Other
Twenty-Day Claims with the opportunity to elect to
participate and resolve their Claims; and
* Creditors' Settlement that resolves numerous intercreditor
Disputes.
Mr. Sosland said 12 Confirmation Objections are moot because the
concepts objected to were deleted, replaced, or addressed by the
revisions and settlements embodied in the Plan. A list of the
Objecting Parties whose Objections have been mooted is available
for free at http://bankrupt.com/misc/SemGroup_MootedPlanObjs.pdf
Mr. Sosland added that 27 objections have been consensually
resolved or withdrawn. A list of the Withdrawn Objections is
available for free at:
http://bankrupt.com/misc/SemGroup_ResolvedPlanObjs.pdf
These additional parties withdrew their Plan objections:
* Eagle Mountain-Saginaw, et al.,
* Enbridge Gathering (North Texas) L.P.
* Tidal Energy Marketing (U.S.) L.L.C.
* St. Mary Land
* DBGG
* State of Louisiana Department of Revenue
* Charter Oak Production Company, LLC, et al.
* Jayhawk Pipeline, L.L.C.
* Kaw Pipe Line Corp.
* Benson Mineral Group, Inc.
* Plains Marketing, L.P.
* National City Bank
The Plan Objection of Lucky Ace Petroleum LLC is resolved as
stated on the record.
The Official Producers' Committee, in response to the Plan
Objections filed by Twenty-Day Claimants, explained that the
concept of unfair discrimination is not applicable in the context
of the Debtors' bankruptcy cases because (i) administrative
claims are not being crammed-down under the Plan and (ii) as
required by the Bankruptcy Code, they are not classified at all.
The OPC added that the allowance of the First Purchaser Producer
Twenty-Day claims under the Plan is the result of the Producers'
Settlement. Samson Resources Company, Samson Lone Star, LLC, and
Samson Contour Energy E&P, LLC, joined in the OPC's omnibus
response.
A full-text copy of the Plan Confirmation Order, signed by Judge
Shannon on October 28, 2009, is available for free at:
http://bankrupt.com/misc/semgroupplanord.pdf
Plan Amendments and Schedules
During and prior to the October 26, 2009, Plan Confirmation
Hearing, the Debtors conducted settlements and negotiations of
objections to the confirmation of their Plan.
On October 24, the Debtors submitted with the Court a modified
Fourth Amended Plan. After the Confirmation Hearing held Oct.
26, the Debtors submitted a further modified Plan and a proposed
confirmation order on October 27 to conform to the Court's ruling
during the Confirmation Hearing. The Debtors also submitted more
Plan-related schedules.
(A) October 27 Plan
Under the October 27 Plan, the Debtors maintain that their total
available distributable value as of the Effective Date to be
$2.446 billion, consisting of:
* $1.111 billion in Cash,
* $300 million in Second Lien Term Loan Interests, and
* $1.035 billion in New Common Stock and Warrants.
The $1.111 billion in Cash consists of (i) $653 million of Cash
generated during the Debtors' Chapter 11 cases from the
operations of the Debtors' business, which includes $122.1
million in Restricted Cash, (ii) $164 million of Cash of the
Canadian subsidiaries of SemGroup to be distributed pursuant to
the Canadian Plans or a bankruptcy, receivership or other
proceeding of SemCanada Energy, Company, A.E. Sharp Ltd., and CEG
Energy Options, Inc., (iii) $157 million in Cash from sales of
assets by the SemGroup Companies, and (iv) $80 million of Cash
expected to be received from the Canadian subsidiaries of
SemGroup for crude settlements occurring after the Effective
Date. In addition, the Debtors and Prepetition Lenders will
contribute certain Causes of Action to the Litigation Trust. The
Debtors will distribute interests in the Litigation Trust to the
holders of certain Allowed Claims. The Debtors have not placed a
value on the Litigation Trust.
A full-text copy of the October 27 Amended Plan is available for
free at http://bankrupt.com/misc/SemGroup_Oct27AmPlan.pdf
(B) Proposed Confirmation Order
The proposed Confirmation Order, submitted October 27,
incorporated the resolved Plan objections.
Crown Energy Company and Citation Oil and Gas Corp. did not agree
with the proposed confirmation order prepared by the Debtors.
Crown Energy and Citation Oil sought clarification on whether
they would be permitted to pursue their Twenty-Day Claims
notwithstanding the fact that their claims were not listed in the
First Purchaser Producer Twenty-Day Claims Schedule or Secured
First Purchaser Producer Claims Schedule under the Plan.
Mr. Sosland pointed out that the objections of Crown Energy and
Citation Oil have been overruled because their claims were
scheduled under the operator of their wells. Thus, no additional
language is necessary to resolve these objections, he added.
Mr. Sosland also said that the objection of Lucky Ace Petroleum
to the Plan was resolved on the record by agreeing that Lucky Ace
would have the opportunity to assert that it should be included
on Schedule 1 to the Plan.
Harvest Fund Advisors LLC also did not agree with the proposed
Confirmation Order and suggested that the Plan should provide
that "Released Actions" does not include In re SemGroup Energy
Partners, L.P., Securities Litigation, Case No. 08-MD-1989-GFK-
FHM, and that neither the Plan nor the Confirmation Order
releases or enjoins claims against non-debtor defendants in the
Securities Litigation.
Harvest Fund's objection, the Debtors said, was overruled by the
Court for reasons stated during the Confirmation Hearing.
A full-text copy of the proposed Confirmation Order is available
for free at: http://bankrupt.com/misc/SemGroup_PropConfOrd.pdf
A blacklined version of the proposed Confirmation Order is
available for free at:
http://bankrupt.com/misc/SemGroup_PropConfOrd_blacklined.pdf
(C) October 24 Plan
The October 24 Amended Plan contained these modifications:
(A) On the effective date of the Amended Plan, Cash totaling
$172.5 million less the aggregate amount of First Purchaser
Twenty Day Claims under the Amended Plan will be
distributed to the Producer Representative who will be
responsible for making distributions to Producers in
accordance with the Amended Plan. Each holder of a First
Purchaser Producer Twenty-Day Claim will be deemed as of
the Effective Date to have an Allowed First Purchaser
Twenty-Day Claim equal to:
-- the amount listed in schedule 1 of the Amended Plan;
plus
-- any additional amount, if any, agreed to by the
Official Producers' Committee or the Producer
Representative or Allowed by final order; less
-- the amount of First Purchaser Producer Twenty-Day
Claims for that holder included in the cure schedule
under the Amended Plan.
(B) Each holder of an Allowed Priority Tax Claim will receive:
(i) cash in an amount equal to the Allowed Priority Tax
Claim on the Effective Date;
(ii) in accordance with Section 1129(a)(9)(C) of the
Bankruptcy Code, equal semi-annual Cash payments in an
aggregate amount equal to the Allowed Priority Tax
Claim, together with interest at a rate determined
under applicable non-bankruptcy law pursuant to
Section 511 of the Bankruptcy Code, over a period
ending not later than five years after the Petition
Date; or
(iii) upon other terms determined by the Bankruptcy Court.
(C) Among others, actions in connection with the sale or
disposal of the remaining assets of SemMaterials, L.P., or
SemFuel, L.P. and wind-down of their business will be
deemed authorized under the Amended Plan.
(D) Any Prepetition Lender will have the authority to file, not
later than 60 days following the confirmation date of the
Amended Plan, a cause of action against a Prepetition
Lender with a claim under a Swap Contract or a holder of a
Swap Claim solely to determine whether or not the Swap
Contract Claim qualifies as a Lender Swap Obligation under
the Prepetition Credit Agreement, provided that the Swap
Contract Claim:
(x) has not been allowed in whole or in part as a Lender
Swap Obligation on or before the Effective Date, or
(y) is not subject to an objection filed by the Debtors on
or before the Effective Date.
(E) With respect to all holders of Claims against the Debtors
in Classes 1 through 148 and Classes 175 through 226, the
record date will be October 30, 2009, to determine the
holders of Allowed Claims entitled to receive distributions
pursuant to the Amended Plan. The claim registry will be
closed on the Record Date. More importantly, the Debtors
and the Reorganized Debtors will have no obligation to
recognize any transfer of any Claim after 5:00 p.m.,
Eastern Time on the Record Date.
A blacklined version of the October 24 Amended Plan is available
for free at:
http://bankrupt.com/misc/SemGroup_Oct24AmPlan_blacklined.pdf
(D) Plan Schedules
The Debtors submitted to the Court on October 23, 2009, revised
schedules to the Amended Plan:
* listing 645 First Purchaser Producer Twenty-Day Claims
aggregating $135,562,122, a full-text copy of which is
available for free at:
http://bankrupt.com/misc/SemGroup_RevSched1.pdf
* listing 1,530 Secured First Purchaser Producer Claims
totaling $324,593,863, a full-text copy of which is
available for free at:
http://bankrupt.com/misc/SemGroup_RevSched2.pdf
* listing 235 Other Twenty-Day Claims amounting to
$100,647,442, a full-text copy of which is available for
free at: http://bankrupt.com/misc/SemGroup_RevSched3.pdf
The Debtors presented to the Court, on October 25, 2009, an
exhibit containing a revised list of 708 First Purchaser Producer
Twenty-Day Claims totaling $141,721,082. The Revised List is
available for free at:
http://bankrupt.com/misc/SemGroup_Oct25Sched1.pdf
The Debtors also filed an exhibit containing a revised list of
1,530 Secured First Purchaser Producer Claims amounting to
$340,232,680. The Revised List is available for free at:
http://bankrupt.com/misc/SemGroup_Oct25Sched2.pdf
The Debtors also filed with the Court a revised schedule
containing executory contracts to be assumed by the Debtors under
the Amended Plan. The Revised Schedule is available for free at:
http://bankrupt.com/misc/SemGroup_Oct23ContractsList.pdf
White Cliffs Term Loan
The Debtors disclosed on October 26, 2009, that General Electric
Capital Corporation, as lender and administrative agent, will
provide a $125,000,000 term loan to Debtor SemCrude Pipeline LLC
as owner of 99.17% of White Cliffs Pipeline, L.L.C., which owns
and operates a 524-mile crude oil pipeline and related
facilities. The White Cliffs Term Loan will be used to repay all
principal amounts and accrued non-default interest outstanding
under a Credit Agreement dated June 17, 2008, between SemCrude
and GECC. The Term Loan will be made in a single draw on the
effective date of the Amended Plan.
A term sheet of the White Cliffs Term Loan is available for free
at: http://bankrupt.com/misc/SemGroup_WhiteCliffsTermLoan.pdf
About SemGroup L.P.
SemGroup, L.P. -- http://www.semgrouplp.com/-- is a midstream
service company that provides diversified services for end users
and consumers of crude oil, natural gas, natural gas liquids and
refined products. Services include purchasing, selling,
processing, transporting, terminalling and storing energy.
SemGroup serves customers in the United States, Canada, Mexico and
Wales.
SemGroup L.P. and its debtor-affiliates filed for Chapter 11
protection on July 22, 2008 (Bankr. D. Del. Lead Case No.
08-11525). John H. Knight, Esq., L. Katherine Good, Esq. and Mark
D. Collins, Esq., at Richards Layton & Finger; Harvey R. Miller,
Esq., Michael P. Kessler, Esq., and Sherri L. Toub, Esq., at Weil,
Gotshal & Manges LLP; and Martin A. Sosland, Esq., and Sylvia A.
Mayer, Esq., at Weil Gotshal & Manges LLP, represent the Debtors
in their restructuring efforts. Kurtzman Carson Consultants
L.L.C. is the Debtors' claims agent. The Debtors' financial
advisors are The Blackstone Group L.P. and A.P. Services LLC.
Margot B. Schonholtz, Esq., and Scott D. Talmadge, Esq., at Kaye
Scholer LLP; and Laurie Selber Silverstein, Esq., at Potter
Anderson & Corroon LLP, represent the Debtors' prepetition
lenders.
SemGroup L.P.'s affiliates, SemCAMS ULC and SemCanada Crude
Company, sought protection under the Companies' Creditors
Arrangement Act (Canada) on July 22, 2008. Ernst & Young, Inc.,
is the appointed monitor of SemCanada Crude Company and its
affiliates' reorganization proceedings before the Canadian
Companies' Creditors Arrangement Act. The CCAA stay expires on
November 21, 2008.
SemGroup L.P.'s consolidated, unaudited financial conditions as of
June 30, 2007, showed $5,429,038,000 in total assets and
$5,033,214,000 in total debts.
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: Proposes Settlement with ConocoPhillips
----------------------------------------------------
SemGroup LP and its units ask the Court to approve a settlement
agreement they entered into with ConocoPhillips Company.
Debtor SemCrude L.P. and Conoco were parties to a prepetition Net
Settlement Agreement and General Provisions Domestic Crude Oil
Agreements pursuant to which Conoco and SemCrude bought and sold
crude oil between them. On July 31, 2008, Conoco and SemCrude
mutually agreed to terminate the Agreements on a going-forward
basis.
In an effort to avoid the costs and time associated with
expensive, burdensome, and protracted litigation of the issues
and disputes outstanding between the Debtors and Conoco, they
engaged in extensive, arm's-length and good faith negotiations
and ultimately reached a settlement.
The principal terms of the settlement are:
(a) Upon the occurrence of the Settlement Effective Date, the
Debtors will have full use of the Tendered Funds as if
those funds had been turned over to the Debtors on the
Settlement Effective Date.
(b) The Debtors, the Reorganized Debtors, the Litigation Trust
to be created under the Debtors' Plan of Reorganization,
the Prepetition Administrative Agent and the Prepetition
Administrative Lender will be deemed to have released
Conoco from all causes of action and claims in connection
with any commodity trade or transaction between Conoco and
the Debtors.
(c) Upon the occurrence of the Settlement Effective Date,
Conoco will retain a General Unsecured Claim against
SemCrude for any breach of warranty, indemnity and
attorneys' fees. The Debtors will not have to reserve
more than an amount equal to the distributions made on
account of a $5 million Preserved Claim.
(d) The Debtors and the Reorganized Debtors will cooperate in
any discovery, including by preserving relevant documents
and making relevant witnesses available on reasonable
notice, in respect of Conoco's tender adversary, third
party producer litigation and any other litigation by oil
and gas producers against Conoco relating to oil and gas
Conoco purchased from the Debtors.
(e) In exchange for the consideration provided for in the
Settlement, Conoco will be deemed to have released, and
will be permanently enjoined from any prosecution of, all
causes of action in connection with the Prepetition Credit
Agreement.
(f) If the Settlement Effective Date occurs and Conoco elects
to proceed with the Conoco Contribution, Conoco will pay
to the Producer Representative cash in an aggregate amount
of $1 million for distribution solely to the Producers
named as defendants in the Tender Adversary or in any
similar adversary proceeding filed by J. Aron & Company or
BP Oil Supply Company that do not choose to opt out of the
proposed settlement between Conoco and the Producer
Defendants.
The Settlement is subject to confirmation of the Plan
incorporating the terms of the Settlement.
The Official Committee of Unsecured Creditors and Bank of
America, N.A., as administrative agent for the Debtors'
prepetition lenders, consent 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: Wants to Settle ABN Amro, et al.'s LSO Claims
----------------------------------------------------------
SemGroup LP and its units seek the Court's authority to approve
separate settlements they entered into with eight financial
institutions and banks resolving the treatment of the Banks'
proofs of claims arising out of their assertion that certain
amounts are entitled to be treated as Lender Swap Obligations.
The settling banks are:
* ABN AMRO Bank, N.V.,
* Merrill Lynch Capital Corp. and Merrill Lynch Commodities,
Inc.,
* Union Bank of California, N.A.,
* The Bank of Nova Scotia
* U.S. Bank National Association
* Sovereign Bank
* Citibank, N.A.
* Bank of Oklahoma, N.A.
* Calyon New York Branch
The Banks are lenders under the Credit Agreement, dated October
18, 2005, between Debtor SemCrude L.P., and SemCams Midstream
Company, as borrowers, SemGroup L.P. and SemOperating G.P.,
L.L.C., as guarantors, and Bank of America, N.A., as
administrative agent for the lenders. Prepetition, the Banks and
SemCrude entered into an interest rate swap transaction. In
February 2009, the Banks filed separate LSO Proofs of Claim
against several Debtors.
The settlements provide these terms:
(a) The Debtors agree to allow $1,182,000 of ABN's proofs of
claim as an Allowed Secured Working Capital Lender Claim
under the Plan. The Debtors also agree to allow $131,334
of ABN's proofs of claim as an Allowed Lender Deficiency
Claim under the Plan.
(b) The Debtors agree to allow $43,000,000 of the MLCI Swap
Amount as an Allowed Secured Working Capital Lender Claim
under the Plan of Reorganization. Merrill will pay
Debtor SemCrude L.P. $1,217,677. Merrill will not be
entitled to any Lender Deficiency Claim under the Plan.
Merrill also waives any right to payment under the Plan
with respect to the physical crude oil trades between MLCI
and Debtor SemStream L.P.
(c) $18,000,000 of UBOC's proof of claim will be allowed as a
Lender Swap Obligation, with payment as a Secured Working
Capital Lender Claim, under the Plan of Reorganization,
and $2,109,250 of UBOC's proof of claim will be allowed as
a Lender Deficiency Claim under the Plan. The Debtors and
UBOC will each be responsible for their own attorneys'
fees, expenses and court costs associated with the entry
into the settlement.
(d) The Debtors agree to allow $1,300,000 of Scotia's proofs
of claim as an Allowed Secured Working Capital Lender
Claim under the Plan and agree to allow $155,000 of
Scotia's proofs of claim as an Allowed Lender Deficiency
Claim.
(e) The Debtors agree to allow $2,443,412 of U.S. Bank's
proofs of claim as an Allowed Secured Working Capital
Lender Claim under the Plan and agree to allow $271,490 as
a Lender Deficiency Claim.
(f) The Debtors agree to allow $28,000 of Sovereign Bank's
proofs of claim as an Allowed Secured Working Capital
Lender Claim under the Plan and agree to allow $7,430 as a
Lender Deficiency Claim.
(g) The Debtors agree to allow $9,609,502 of Citibank's proofs
of claim as an Allowed Secured Working Capital Lender
Claim under the Plan and agree to allow $1,037,722 as a
Lender Deficiency Claim.
(h) The Debtors agree to allow $76,723,033 of BOK's proofs of
claim as an Allowed Secured Working Capital Lender Claim
under the Plan and agree to allow $8,524,781 as a Lender
Deficiency Claim. BOK will pay the Debtors $10,000,000
and will commit $25,000,000 in exit financing to the
Debtors.
(i) The Debtors agree to allow $51,240,624 of Calyon's LSO
Proofs of Claim as an Allowed Secured Working Capital
Lender Claim under the Plan and $4,154,645 of Calyon's LSO
Proofs of Claim as an Allowed Lender Deficiency Claim.
The Debtors and the Banks grant mutual releases of all claims and
causes of action arising out of, based on, or related to the
SemCrude ISDA, the SemCrude Swap Contracts, and the LSO Proofs of
Claim.
The Settlements, according to the Debtors, obviates the need for
a costly time-consuming claims objection and litigation process
and will allow the Debtors to channel the efforts and resources
that would have been devoted to the plan confirmation process.
Objections
Thomas Kivisto objects to the settlements to the extent that the
settlements contain various provisions that, if approved, release
certain claims, rights or defenses that he may hold against the
Debtors, the Reorganized Debtors, the Litigation Trust, the
settling Lenders, or the settling commodity partners. Alex
Stallings joins in Mr. Kivisto's objection.
International Bank of Commerce, in a separate filing, objects to
the Calyon Settlement because the relief requested by the Debtors
impermissibly includes the final allowance and classification of
certain claims of Calyon that are also subject of an unresolved
adversary proceeding filed by IBC.
* * *
The Court has approved the settlements with UBOC, the Merrill
Lynch Entities, and Calyon. The Court held that any objections
to the motions seeking approval of the settlements are overruled.
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)
SHIRLEY SINGLETON: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: Shirley Singleton
1371 Plantation Road
Madison, GA 30650
Bankruptcy Case No.: 09-31796
Chapter 11 Petition Date: October 30, 2009
Court: United States Bankruptcy Court
Middle District of Georgia (Athens)
Debtor's Counsel: Wesley J. Boyer, Esq.
Katz, Flatau, Popson and Boyer, LLP
355 Cotton Avenue
Macon, GA 31201
Tel: (478) 742-6481
Email: wjboyer_2000@yahoo.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
A full-text copy of Ms. Singleton's petition, including a list of
her 20 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/gamb09-31796.pdf
The petition was signed by Ms. Singleton.
SIERRA LIFE SCIENCES: Case Summary & 16 Largest Unsec. Creditors
----------------------------------------------------------------
Debtor: Sierra Life Sciences, Inc.
742 Spice Island Drive
Sparks, NV 89431
Bankruptcy Case No.: 09-53833
Chapter 11 Petition Date: October 28, 2009
Court: United States Bankruptcy Court
District of Nevada (Reno)
Judge: Gregg W. Zive
Debtor's Counsel: Stephen R. Harris, Esq.
Belding, Harris & Petroni, Ltd
417 W Plumb LN
Reno, NV 89509
Tel: (775) 786-7600
Fax: (775) 786-7764
Email: steve@renolaw.biz
Estimated Assets: $100,001 to $500,000
Estimated Debts: $1,000,001 to $10,000,000
A full-text copy of the Debtor's petition, including a list of its
16 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/nvb09-53833.pdf
The petition was signed by Kathleen Hurley, president of the
Company.
SINCLAIR BROADCAST: Amends Agreements With Cunningham
-----------------------------------------------------
Sinclair Broadcast Group, Inc., on October 8, 2009, entered into a
non-binding memorandum of understanding, as amended, with
Cunningham Broadcasting Corporation, the Company's local marketing
agreement partner in six markets.
In accordance with the terms of the MOU, agreements to amend or
restate the agreements between Cunningham and the Company were
entered into on October 28, 2009:
(i) the LMAs;
(ii) option agreements to acquire Cunningham stock; and
(iii) certain acquisition or merger agreements relating to
television stations owned by Cunningham.
The amendments or restatements were made pursuant to the
agreements:
(i) the Master Agreement between the Company (and its
subsidiaries) and Cunningham (and its subsidiaries),
which, among other things, amended the LMAs;
(ii) those certain Amended and Restated Voting and Non-Voting
Capital Stock Option Agreements between the Company and
several trusts that own capital stock of Cunningham; and
(iii) those certain Amended and Restated Asset Purchase
Agreements pertaining to the Cunningham Stations.
All of the Cunningham Agreements will be non-binding until the
close of business on the date the Company successfully consummates
the tender offers for the Convertible Notes. If the tender offers
are not successfully consummated, the Cunningham Agreements shall
never take effect and each agreement intended to be amended or
restated by such applicable Cunningham Agreement will remain in
full force and effect.
The Cunningham Agreements have these material terms:
-- Cunningham has the right to terminate the APAs upon a
"change of control" of the Company, which will occur if
David, Frederick, Duncan and Robert Smith no longer own or
control at least 51% of the voting power of the Company;
-- If Cunningham files for bankruptcy protection under
Chapter 11 of the United States Bankruptcy Code, it will
not seek to reject the LMAs or the APAs in a bankruptcy
proceeding until such time as Cunningham and the Company
have had a reasonable time to negotiate, in good faith,
mutually agreeable amendments to such LMAs and APAs;
-- The LMAs, the Option Agreements, and the APAs will
terminate on July 1, 2016, provided that the Company will
have three options to extend the term, each option for an
additional five-year term;
-- In consideration of the new terms of the LMAs and other
agreements and the extension options, beginning on
January 1, 2010, and ending on July 1, 2012, the Company
will be obligated to pay Cunningham the sum of
approximately $29.1 million in 10 quarterly installments
of $2.75 million and one quarterly payment of
approximately $1.6 million, which amounts will be used to
pay off Cunningham's bank credit facility and which
amounts will be credited toward the purchase price for
each Cunningham Station, in accordance with a specified
allocation, that is acquired by the Company pursuant to
any of the Option Agreements or APAs or Cunningham's put
option applicable to such Cunningham Station -- Purchase
Price Credit Payments. An additional $3.9 million,
approximately, will be paid in two installments on July 1,
2012, and October 1, 2012 as an additional LMA fee, in
addition to the LMA Fee. Notwithstanding, if Cunningham
seeks to terminate the LMAs or the other agreements,
including in connection with a change in control, then the
Company will have the right to assign the LMAs or the
other agreements being terminated to a third party or
parties. The aggregate purchase price of the television
stations, $78.5 million as of September 30, 2009, will be
decreased by each Purchase Price Credit Payment as it is
paid, but, subject to below, will be increased by 6%
annually;
-- Beginning on October 1, 2012, and continuing thereafter
during the terms of the LMAs (or any extensions thereto),
the Company will be obligated to pay Cunningham an annual
LMA fee for the television stations equal to the greater
of (i) 3% of each station's annual net broadcast revenue
and (ii) $5.0 million (reduced proportionally if one or
more stations are purchased by the Company). The LMA Fee
will be subject to cost-of-living increases every five
years during the LMA term or any extension thereof. The
LMA Fee will be allocated as follows: (i) a portion equal
to 6% of the aggregate purchase price of the television
stations will be allocated to the payment of interest on
the remaining portion of the aggregate purchase price; and
(ii) the remainder as a fee to Cunningham for services
provided under the LMAs. After the $33 million payable to
Cunningham is paid in full, and as long as the LMA Fee is
paid each year, the aggregate purchase price will no
longer increase because the 6% interest due on the
aggregate purchase price will be paid in full each year as
indicated;
-- Cunningham has a put option, under which Cunningham may
require the Company to purchase the television stations on
July 1, 2016, which is the termination date of the initial
term of the LMAs or at the expiration of any renewal term.
The Company may assign its obligation to purchase the
television stations to a third party in the event that it
cannot acquire the television stations as a result of
Federal Communications Commission rules or for any other
reason. If Cunningham exercises its put option, the
purchase price for the Cunningham Station(s) acquired will
be the lesser of (i) the portion of the aggregate purchase
price in effect at such time allocable to such Cunningham
Station(s) and (ii) the appraised fair market value of
such Cunningham Station(s);
-- The prices under the Option Agreements to purchase
Cunningham stock have been adjusted to make them
consistent with the purchase prices and terms contained in
the APAs. In addition, in lieu of acquiring the assets of
any of the Cunningham Stations under the acquisition
agreements, the Company has an option to acquire for cash
all of the issued and outstanding stock of each subsidiary
of Cunningham, on terms and conditions substantially
similar in all material respects to the Option Agreements.
In the event the Company determines to acquire any of the
Cunningham Stations under any of the APAs, Cunningham may
cause the Company to acquire the stock of the Cunningham
subsidiary or subsidiaries that hold the Cunningham
Station rather than the assets of the Cunningham Station
pursuant to the APA. In addition, the APAs are subject to
a financing condition;
-- Cunningham will be obligated to pay liquidated damages to
the Company if Cunningham terminates any of the Option
Agreements and APAs for any reason other than a
termination resulting from the exercise of Cunningham's
put option or the Company's material breach, act or
omission. The liquidated damages will be in an amount
equal to the sum of all Purchase Price Credit Payments
made by the Company to Cunningham that have decreased the
aggregate purchase price of the Cunningham Stations plus
the additional LMA fee payments;
-- During the period that the Convertible Notes (or any notes
issued to refinance the Convertible Notes) are
outstanding, the Company will have consent rights (which
consent may not be unreasonably withheld or delayed) over
Cunningham's future borrowings, with the exception of (i)
borrowings for the acquisition by Cunningham of certain
television stations for which the Company has freely
assignable purchase option agreements that it cannot
currently exercise; and (ii) any amounts totaling less
than $10.0 million in the aggregate; and
-- Cunningham will purchase, upon the Company's request, the
Company's options to purchase five television stations
currently operated by the Company under LMAs with other
LMA partners, for a purchase price of $100 per station.
Once such options are purchased, Cunningham will be
obligated to immediately exercise the rights to acquire
such television stations, to the extent financing is
available on reasonable terms and conditions and subject
to FCC approval. Immediately following Cunningham's
acquisition of these stations, Cunningham will enter into
amended LMAs with the Company for each such television
station, whereby the Company will pay the operating cost
of each such station, plus an amount equal to the interest
paid by Cunningham to its lender(s) on borrowed funds for
Cunningham's acquisition of the stations, plus $400,000
per year per station. The Company will have the option to
acquire each of the television stations for an amount
equal to the amount paid by Cunningham for such station.
As reported by the Troubled Company Reporter on October 12, 2009,
Sinclair noted Cunningham is currently facing significant
financial and economic challenges. On June 5, 2009, the
administrative agent under Cunningham's bank credit facility
declared an event of default under the facility for failure to
timely deliver certain annual financial statements as required.
As of such date, a rate of interest of LIBOR plus 5%, which rate
includes a 2% default rate of interest, has been instituted on all
outstanding borrowings under the Cunningham bank credit facility.
On June 30, 2009, the default was waived and the termination date
of the Cunningham bank credit facility was extended to July 31,
2009, subject to certain conditions, including maintaining the
default interest rate.
On July 31, 2009, the Cunningham bank credit facility was further
extended to October 30, 2009. The extension requires that
Cunningham make $200,000 principal payments on its term loan
facility as of the first day of each of August, September and
October with the balance due on October 30, 2009. To delay or
avoid any potential bankruptcy of Cunningham, the lenders under
Cunningham's existing credit facility have indicated their
willingness to replace such credit facility with a new credit
facility, which is conditioned upon Cunningham's demonstration
that it can repay the outstanding principal balance due under the
facility within three years. As a result, Cunningham asked
Sinclair to restructure certain of its arrangements with Sinclair,
including the LMAs, which negotiations led to the execution of the
MOU.
About Cunningham Broadcasting
Cunningham Broadcasting Corporation is the owner-operator and FCC
licensee of WNUV-TV, Baltimore, Maryland; WRGT-TV, Dayton, Ohio;
WVAH-TV, Charleston, West Virginia; WTAT-TV, Charleston, South
Carolina; WMYA-TV (formerly WBSC-TV), Anderson, South Carolina;
and WTTE-TV.
About Sinclair Broadcast Group
Based in Baltimore, Maryland, Sinclair Broadcast Group, Inc.
(Nasdaq: SBGI) -- http://www.sbgi.net/-- one of the largest and
most diversified television broadcasting companies, currently owns
and operates, programs or provides sales services to 58 television
stations in 35 markets. The Company's television group reaches
approximately 22% of U.S. television households and includes FOX,
ABC, CBS, NBC, MNT and CW affiliates.
As of June 30, 2009, the Company had $1.60 billion in total assets
and $1.75 billion in total liabilities.
Sinclair carries Moody's Investors Service's Caa2 Corporate Family
Rating and Caa3 Probability of Default Rating; and Standard &
Poor's Ratings Services' 'B-' corporate credit rating.
SINCLAIR BROADCAST: Refinances Bank Debt; Closes Notes Offering
---------------------------------------------------------------
Sinclair Broadcast Group, Inc.'s wholly owned subsidiary, Sinclair
Television Group, Inc., has refinanced a portion of the borrowings
under its existing senior secured bank credit facility pursuant to
an amendment and restatement of the facility. Sinclair also
closed on the private placement of $500 million aggregate
principal amount of its 9.25% senior secured second lien notes due
2017.
Specifically, STG on October 29, 2009, entered into a fourth
amended and restated credit agreement with JPMorgan Chase Bank,
N.A., as administrative agent, the guarantors party thereto and
the lenders party thereto. The Credit Agreement amends and
restates STG's third amended and restated credit agreement by and
among STG, the Administrative Agent and several lenders.
STG issued the $500 million aggregate principal amount of 9.25%
Senior Secured Second Lien Notes due 2017, which mature on
November 1, 2017, pursuant to an indenture, dated as of October
29, 2009, by and among STG, the guarantors and U.S. Bank National
Association, as trustee and collateral agent.
Under the amendment and restatement of the Bank Credit Agreement,
Sinclair raised a $330 million tranche B term loan, priced at
LIBOR plus 4.50% and maturing October 29, 2015. The loan was used
to repay Sinclair's existing $78.8 million tranche A and
$216.6 million tranche A-1 term loans, which were to mature in
December 2011 and December 2012, respectively, and to reduce
amounts outstanding under the revolving credit facility of the
Bank Credit Agreement.
Sinclair also amended and restated its existing $175 million
revolving credit facility under the Bank Credit Agreement. Under
the amended and restated terms, approximately $60.5 million in
existing commitments will remain in place under the existing
revolving credit facility pricing, which as of June 30, 2009 was
priced at LIBOR plus 0.75%, and the facility will mature June
2011. In addition, approximately $75.4 million in commitments
were extended until December 31, 2013 at a price of LIBOR plus
4.00% with a 2.0% LIBOR floor.
The amendment and restatement of the Bank Credit Agreement was
necessary to allow for Sinclair's issuance of the Notes and was a
condition to the consummation of Sinclair's tender offers for the
Company's 3% Senior Convertible Notes due 2027 and 4.875% Senior
Convertible Notes due 2018 pursuant to the Offer to Purchase,
dated October 8, 2009. The tender offers expire at 12:00
midnight, New York City time on Thursday, November 5, 2009 unless
extended or earlier terminated by Sinclair.
The Notes were priced at 97.264% of their principal amount and
will bear interest at a rate of 9.25% per annum payable semi-
annually on May 1 and November 1, commencing on May 1, 2010.
Sinclair intends to use the net proceeds from the offering to fund
the tender offers for the Company's Convertible Notes, to reduce
amounts outstanding under the revolving credit facility of the
Bank Credit Agreement, to pay fees and expenses related to the
tender offers, the amendment and restatement of the Bank Credit
Agreement and the transactions contemplated by the Memorandum of
Understanding with Cunningham Broadcasting Corporation.
Approximately $435.5 million of the net proceeds will be held in a
cash collateral account and will be released only to fund the
purchase of the Convertible Notes pursuant to the tender offers
or, for any 3% Notes or 4.875% Notes remaining after the
consummation of such tender offers, upon exercise of the put
rights by the holders of such notes in May 2010 and January 2011,
respectively. Any unused funds held in the cash collateral
account will be released to Sinclair to be used for general
corporate purposes.
The Notes have not been registered under the Securities Act of
1933, as amended, or any state securities laws and may not be
offered or sold in the United States absent registration or an
applicable exemption from registration requirements.
A full-text copy of Sinclair's Form 8-K discussing is available at
no charge at http://ResearchArchives.com/t/s?47eb
About Sinclair Broadcast Group
Based in Baltimore, Maryland, Sinclair Broadcast Group, Inc.
(Nasdaq: SBGI) -- http://www.sbgi.net/-- one of the largest and
most diversified television broadcasting companies, currently owns
and operates, programs or provides sales services to 58 television
stations in 35 markets. The Company's television group reaches
roughly 22% of U.S. television households and includes FOX,
ABC, CBS, NBC, MNT, and CW affiliates.
As of June 30, 2009, the Company had $1.60 billion in total assets
and $1.75 billion in total liabilities.
Sinclair carries Moody's Investors Service's Caa2 Corporate Family
Rating and Caa3 Probability of Default Rating; and Standard &
Poor's Ratings Services' 'B-' corporate credit rating.
SKILLSOFT CORP: S&P Raises Rating on $225 Mil. Loan to 'BB+'
------------------------------------------------------------
Standard & Poor's Rating Services said it raised the issue-level
rating on Skillsoft Corp.'s $225 million senior secured credit
facility to 'BB+' (two notches higher than the 'BB-' corporate
credit rating on parent company Skillsoft PLC [BB-/Stable/--])
from 'BB'. At the same time, S&P revised the recovery rating on
the facility to '1' from '2'. The '1' recovery rating indicates
S&P's expectation of very high (90% to 100%) recovery in the event
of a payment default. The corporate credit rating on Skillsoft
PLC remains unchanged.
"The change to the issue-level and recovery ratings is primarily
the result of material prepayments of principal on the term loan
through the third quarter of this year," said Standard & Poor's
credit analyst Joseph Spence, "and as ancillary support and
consideration, the company's relatively steady operations during
the severe recession." The company prepaid about $75 million of
their term loan in 2008, and has repaid around an additional
$30 million year to date. As of July 31, 2009, the company had
only about $95 million of its original $200 million term loan
outstanding.
Ratings List
Skillsoft PLC
Corporate Credit Rating BB-/Stable/--
Rating Raised; Recovery Rating Revised
Skillsoft Corp.
To From
-- ----
Senior Secured BB+ BB
Recovery Rating 1 2
SONIC AUTOMOTIVE: Redeems 6% Senior Secured Convertible Notes
-------------------------------------------------------------
Sonic Automotive, Inc., reported that it has successfully
completed a redemption of all of its outstanding 6.0% Senior
Secured Convertible Notes which were due in 2012 using proceeds
from its recently completed public offerings of shares of Class A
common stock and 5.0% Convertible Senior Notes.
Scott Smith, Sonic's President, stated, "This latest step in the
restructuring of our balance sheet removes an extremely dilutive
security from our capital structure. We are very pleased that,
even in the midst of a severe economic downturn, the strength and
flexibility of our business model has allowed us to successfully
address our near-term debt obligations. Through a combination of
internally generated cash and proceeds from our recent offerings,
we have reduced our outstanding debt by over $150 million since
the end of 2008. We appreciate the support and confidence
demonstrated by our bondholders and shareholders as we completed
these recent transactions. With our next significant bond
maturity not occurring until late 2013, we believe we have a clear
road ahead of us for the successful refinancing of our syndicated
credit facility, which we expect to have complete by the end of
this calendar year. In the meantime, our operations team is
clearly focused on continuing the rollout of our operational
playbooks to set the stage for even greater successes in 2010."
About Sonic Automotive
Headquartered in Charlotte, North Carolina, Sonic Automotive, Inc.
(NYSE: SAH) -- http://www.sonicautomotive.com/-- is the nation's
third-largest automotive retailer, operating 153 franchises. As
of June 30, 2009, it operated 154 dealership franchises,
representing 31 different brands of cars and light trucks, at 131
locations and 30 collision repair centers in 15 states. Its
dealerships provide comprehensive services including sales of both
new and used cars and light trucks, sales of replacement parts,
performance of vehicle maintenance, manufacturer warranty repairs,
paint and collision repair services, and arrangement of extended
service contracts, financing, insurance and other aftermarket
products for customers.
* * *
As reported by the Troubled Company Reporter on September 22,
2009, Moody's Investors Service affirmed the Caa1 Corporate Family
and Probability of Default ratings of Sonic Automotive and changed
the outlook to positive from negative.
The TCR said September 18, 2009, that Standard & Poor's Ratings
Services placed its 'CCC+' corporate credit rating and related
issue ratings on Sonic Automotive on CreditWatch with positive
implications. At the same time, S&P assigned its 'CCC-' issue
rating and a '6' recovery rating to the company's proposed
$125 million convertible notes due 2029.
SONIC AUTOMOTIVE: To Get $3.3MM Aid From GM to Shutter Franchises
-----------------------------------------------------------------
Sonic Automotive, Inc., disclosed in a regulatory filing with the
Securities and Exchange Commission that six of its General Motors
dealerships, representing 12 franchises -- including three Hummer
franchises at multi-franchise dealerships, two Saab franchises at
multi-franchise dealerships and one additional General Motors
franchise at a multi-franchise dealership -- received letters
stating that the franchise agreements between General Motors and
Sonic will not be continued by GM on a long-term basis.
Sonic said General Motors has offered assistance with winding down
the operations of the franchises in exchange for Sonic's execution
of termination agreements. Sonic said it has executed all of the
termination agreements.
According to Sonic, assistance to be received from General Motors
totals $3.3 million, of which $700,000 was received as of
September 30, 2009. The remaining assistance has not been
recorded as a receivable from General Motors as of September 30,
2009, as certain conditions required for the payments to occur had
not yet been satisfied.
The termination agreements provide for these terms:
-- The termination of the franchise agreement no earlier than
January 1, 2010 and no later than October 31, 2010;
-- The assignment and assumption of the franchise agreement
by the new General Motors Company;
-- The payment of financial assistance to the franchisee in
installments in connection with the orderly winding down
of the franchise operations;
-- The waiver of any other termination assistance of any kind
that may have been required under the franchise agreement;
-- The release of claims against Motors Liquidation Company
or the new General Motors Company and their related
parties;
-- The continuation of franchise operations pursuant to the
franchise agreement, as supplemented by the termination
agreement, through the effective date of termination of
the franchise agreement, except that we shall not be
entitled to order any new vehicles from Motors Liquidation
Company or the new General Motors Company; and
-- A restriction on Sonic's ability to transfer the franchise
agreement to another party.
As of September 30, 2009, Sonic operated 153 dealership
franchises, representing 31 different brands of cars and light
trucks, at 130 locations and 30 collision repair centers in 15
states.
For the remaining General Motors franchises, Sonic executed
"continuation agreements" which require, among other things, that
existing franchise agreements will expire no later than
October 31, 2010. In consideration of the execution of the
"continuation agreements" General Motors recommended to the
bankruptcy court the continuation or assumption of Sonic's
existing franchise agreements, as amended by the "continuation
agreements". All of Sonic's franchises that executed
"continuation agreements" were assumed by the post-bankruptcy new
General Motors Company. Sonic expects its franchises which
executed "continuation agreements" to be renewed after October 31,
2010 by the new General Motors Company.
With the exception of: (1) product liability indemnifications; (2)
amounts owed to Sonic through incentive programs; (3) amounts
currently owed to Sonic's franchises under their open accounts
with General Motors; and (4) warranty claims occurring within 90
days prior to June 1, 2009, all amounts owed to Sonic from General
Motors were extinguished as a result of the execution of the
termination and continuation agreements. A motion was made by
General Motors to the bankruptcy court and the motion was granted
by the bankruptcy court allowing General Motors to pay the claims
noted. As a result, Sonic has received payments related to all
pre-bankruptcy claims.
On June 2, 2009, General Motors announced that Chinese equipment
manufacturer Sichuan Tengzhong Heavy Industrial Machinery Co. will
buy its Hummer brand. On October 9, 2009, the two parties signed
a definitive purchase agreement. As of September 30, 2009, Sonic
operated three Hummer franchises at three dealership locations.
It is uncertain whether STHIMC will continue supporting the Hummer
brand or whether STHIMC's ownership of the Hummer brand will have
a positive or negative impact on our Hummer franchises'
operations.
On June 5, 2009, General Motors announced that Penske Automotive
Group would buy its Saturn brand. However, on September 30, 2009,
General Motors announced PAG will not purchase the Saturn brand
and they plan to discontinue the Saturn brand. As of
September 30, 2009, Sonic operated one Saturn franchise at one
dealership location.
As Sonic's operations at the affected franchises that will not be
renewed or will be discontinued wind down, Sonic said it may be
required to accelerate depreciation expenses and record impairment
charges related to, but not limited to, lease obligations, fixed
assets, franchise assets, accounts receivable and inventory.
Sonic also disclosed that in conjunction with Chrysler LLC's
reorganization efforts in the second quarter of 2009, three
franchise agreements associated with one of Sonic's dealership
locations were terminated. The result of these franchise
terminations was not material to Sonic's results of operations,
balance sheet or cash flows for the third quarter ended
September 30, 2009. As of September 30, 2009, Sonic owned six
Chrysler franchises at two dealership locations.
Sonic reported net income of $15,594,000 on total revenues
$1,520,762,000 for the third quarters ended September 30, 2009,
from a net loss of $26,966,000 on total revenues of $1,615,750,000
for the same period a year ago. Sonic reported net income of
$17,298,000 on total revenues of $4,180,234,000 for the nine
months ended September 30, 2009, from a net loss of $5,124,000 on
total revenues of $5,117,453,000 for the same period a year ago.
As of September 30, 2009, Sonic had $2,004,768,000 in total assets
against total current liabilities of $988,309,000, long-term debt
of $556,243,000, and other long-term liabilities of $109,562,000,
resulting in stockholders' equity of $350,654,000.
A full-text copy of Sonic's quarterly report on Form 10-Q is
available at no charge at http://ResearchArchives.com/t/s?4807
About Sonic Automotive
Headquartered in Charlotte, North Carolina, Sonic Automotive, Inc.
(NYSE: SAH) -- http://www.sonicautomotive.com/-- is the nation's
third-largest automotive retailer, operating 153 franchises. As
of June 30, 2009, it operated 154 dealership franchises,
representing 31 different brands of cars and light trucks, at 131
locations and 30 collision repair centers in 15 states. Its
dealerships provide comprehensive services including sales of both
new and used cars and light trucks, sales of replacement parts,
performance of vehicle maintenance, manufacturer warranty repairs,
paint and collision repair services, and arrangement of extended
service contracts, financing, insurance and other aftermarket
products for customers.
* * *
As reported by the Troubled Company Reporter on September 22,
2009, Moody's Investors Service affirmed the Caa1 Corporate Family
and Probability of Default ratings of Sonic Automotive and changed
the outlook to positive from negative.
The TCR said September 18, 2009, that Standard & Poor's Ratings
Services placed its 'CCC+' corporate credit rating and related
issue ratings on Sonic Automotive on CreditWatch with positive
implications. At the same time, S&P assigned its 'CCC-' issue
rating and a '6' recovery rating to the company's proposed
$125 million convertible notes due 2029.
SOUTH TEXAS OIL: Files for Chapter 11 Bankruptcy in Texas
---------------------------------------------------------
South Texas Oil Company and its wholly-owned subsidiaries filed
voluntary petitions for relief under Chapter 11 in the United
States Bankruptcy Court for the Western District of Texas. The
individual case numbers are as follows: STO Properties LLC Case
No. 0-54228; STO Operating Company Case No. 0-54229; STO Drilling
Company Case No. 0-54230; Southern Texas Oil Company Case No.
0-54231; and South Texas Oil Company Case No. 0-54233
The company has filed an emergency motion for interim orders
authorizing:
i) the use of cash collateral under terms agreed with the
pre-petition senior secured lenders;
ii) to grant security interests and superpriority claims and
adequate protection; and
iii) to schedule a final hearing on the motion.
In addition, the company anticipates filing a motion with the
Bankruptcy Court for an interim order seeking approval of
anticipated debtor-in-possession financing pursuant to a summary
of terms and conditions with a potential DIP lender. The DIP Term
Sheet contemplates that lender will provide to the Company debtor-
in-possession financing composed of a term loan facility in an
aggregate principal amount of up to $1,500,000.
The Company stated that the anticipated commitment of the DIP
lender to provide a DIP loan under the DIP Facility is subject to
a number of conditions, including entry by the Bankruptcy Court of
an interim order, including a priming lien position on all assets
over other lien claimants, and completion of loan documentation
satisfactory in form and substance to the DIP lenders. There can
be no assurance that the Company will be able to obtain financing
on the terms proposed in the DIP Term Sheet or at all.
On Sept. 11, 2009, certain creditors of STO Operating Company
filed an involuntary petition under Chapter 7 in the United States
Bankruptcy Court for the Western District of Texas. On Oct. 20,
2009, STO filed its response to the involuntary petition and moved
for a transfer of venue from the United States Bankruptcy Court,
Western District of Texas to the United States Bankruptcy Court,
Western District of Texas where the Company and its subsidiaries
are located.
About South Texas Oil Company
San Antonio, Texas-based South Texas Oil Company is an independent
energy company engaged in the acquisition, production, exploration
and development of crude oil and natural gas. Its core operating
areas include Texas, Louisiana and the Gulf Coast.
SPANSION INC: Gets Nod to Reject Pact with American Gas
-------------------------------------------------------
Spansion Inc. and its affiliates obtained the Court's authority to
reject a Natural Gas Sales Agreement with American Gas Management,
Inc.
Spansion and American Gas are parties to a Natural Gas Contract
dated September 30, 2008. Pursuant to that Contract, American
Gas is the sole supplier to Spansion of its natural gas
requirements at its Sunnyvale, California location. Spansion
pays American Gas a fixed price of $10.74 per one million British
thermal units of natural gas, for up to 6400 MMBtu's per month.
Michael R. Lastowski, Esq., at Duane Morris, LLP, in Wilmington,
Delaware, relates that the global economic recession has
significantly reduced demand for natural gas, driving prices
steadily downward for at least the last year. As a result, Mr.
Lastowski notes, the fixed price Spansion pays to American Gas is
dramatically above the current market rate for natural gas.
According to Mr. Lastowski, Spansion has reached out to several
natural gas suppliers for more competitive bids and has received
a bid for a rate of $4.60 per MMBtu, less than half of the rate
of the Natural Gas Contract.
Thus, the Debtors have determined to reject the Contract, nunc
pro tunc to September 29, 2009.
Prior to the entry of the Court's order, the Debtors certified to
the Court that no objection was filed as to their request to
reject an executory contract with American Gas.
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: Gets Nod to Reject Contract with Ariba Inc.
---------------------------------------------------------
Spansion Inc. obtained the Court's authority to reject their
contract with Ariba, Inc.
On March 21, 1997, Spansion entered into a Software License and
Services Agreement with No. 97-A00012749 with Ariba, Inc., a
provider of software applications used to assist management with
a variety of business functions. The Ariba Contract provides
Spansion with a license to use Ariba's travel and expense
software, which is used by employees to submit travel requests
for approval by management, and to submit travel reports for
reimbursement of travel-related expenses.
The Debtors relate that pursuant to the terms of the Ariba
Contract, Spansion incurs an annual renewal fee of $100,000.
The Debtors tell the Court that because they have substantially
reduced their business operations and have developed less-costly
alternatives to the software provided by the Ariba Contract, they
are no longer in need of the software and services associated
with that agreement.
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: Gets Nod to Assume Contract with SAS
--------------------------------------------------
SAS Institute Inc. and Spansion entered into a Master Lease
Agreement on July 6, 2006, for the use of SAS's software
applications routinely employed in the operation of Spansion's
business. The Licensing Agreement is comprised of:
(a) an initial Master License Agreement No. 53243 signed by
Spansion on July 6, 2006, and signed by SAS on July 20,
2006;
(b) Supplement Number 1 signed by Spansion on July 30, 2006,
and signed by SAS on July 20, 2006;
(c) Amendment No. 1 to Supplement Number 1 signed by Spansion
on September 12, 2006, and signed by SAS on September 28,
2006;
(d) Supplement Number 2 signed by Spansion on July 17, 2006,
and signed by SAS on August 16, 2006; and
(e) Supplement Number 3 signed by Spansion on January 22,
2007, and signed by SAS on January 24, 2007.
The SAS Software is used in the Debtors' manufacturing facility
in Austin, Texas or the "FAB." The SAS Software is a programming
language that allows the Debtors to create software tools to
assist in the manufacturing process. The Software Tools enable
the Debtors to gather data from all across FAB as the product is
created. With a new software provider, the Debtors would have to
incorporate the new software language throughout the FAB, and
perhaps more importantly, rewrite over 15 years of Software Tools
specific to the Debtors' manufacturing process. The Debtors
estimate that this would take at least two man years of labor as
well as large financial investment significantly more than the
cure amount of $10,426 and the annual licensing fee associated
with this software.
According to the Debtors, while all postpetition obligations due
to SAS are current, by assuming the Licensing Agreements, they
will be required to pay a cure amount of $10,426.
Pursuant to Section 365 of the Bankruptcy Code, the Debtors sought
and obtained the Court's authority to assume the Licensing
Agreements.
Debtors Alert Court of Mistake
Subsequently, Sommer L. Ross, LLP, Esq., at Duane Morris, LLP, in
Wilmington, Delaware, tells the Court that on October 25, 2009,
the Debtors learned that the Motion had mistakenly not been
served on the Notice Parties. According to Ms. Ross, although
SAS has informed the Debtors that it does not oppose the Motion,
the Debtors seek to allow any interested parties who were not
served with a copy of the Motion an opportunity to object to the
Motion.
Accordingly, the Debtors ask the Court to enter a proposed
amended order. The Amended Order will suspend implementation of
the Order and will continue the hearing on the Motion to November
24, 2009, at 10:00 a.m. Provided that there are no objection to
the Motion filed within 20 days of service of the relevant
documents by the Debtors on the Notice Parties, the initial Order
will remain in effect and become final. If objections are
raised, the Motion will be considered by the Court at the
November 24, 2009 omnibus hearing.
The Court amended its order on October 27, 2009, to reflect the
relief requested by the Debtors.
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: Only Case of Spectrum Jung Labs Remains Open
-------------------------------------------------------------
Judge Ronald B. King of the United States Bankruptcy Court for
the Western District of Texas, San Antonio Division, approved the
Debtors' motion to close the cases of 13 associate Debtors of
Spectrum Jungle Labs Corporation effective as of September 30,
2009.
The closed bankruptcy cases are:
Debtor Case No.
------ --------
Spectrum Brands, Inc. 09-50456
ROVCAL, Inc. 09-50454
ROV Holding, Inc. 09-50457
Tetra Holding(US), Inc. 09-50459
United Industries Corporation 09-50461
Schultz Company 09-50463
Spectrum Neptune US Holdco Corporation 09-50464
United Pet Group, Inc. 09-50466
DB Online, LLC 09-50467
Aquaria, Inc. 09-50468
Perfecto Manufacturing, Inc. 09-50469
Aquarium systems, Inc. 09-50470
Southern California Foam, Inc. 09-50471
The case of Spectrum Jungle Labs Corporation, Case No. 09-50455,
remains open, and the Court retains the right under Section
350(b) of the Bankruptcy Code to reopen the closed cases if
circumstances require.
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: Files Omnibus Claims Objection
-----------------------------------------------
After a review of the proofs of claim asserted by their creditors
in the Chapter 11 cases, Spectrum Brands Inc. and its reorganized
debtor affiliates ask the Court to disallow:
(a) 20 Claims that duplicate part or all of a related Remaining
Claim;
(b) 25 Claims that are amended or superseded by later filed
claims; and
(c) 13 Disputed Claims with respect to which the books and
Records reflect no amount due because the amounts (1) were
paid pursuant to an order of the Court, (ii) were incurred
postpetition and were paid in the ordinary course of
business pursuant to the Bankruptcy Code, or (c) are sought
on account of equity interest in the Debtors, rather than
against the Debtors.
The Reorganized Debtors also ask the Court to for authority to
reduce the amounts of 8 Overstated Claims.
A list of the claims subject to the Debtors' 1st Omnibus
Objection is available for free at:
http://bankrupt.com/misc/Spectrum_1stOmniclaimsobj.pdf
The Court will convene a hearing to consider this matter on
November 18, 2009 at 9:30 a.m. Central Time.
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: Files Objections to Claims Under Litigation
------------------------------------------------------------
Spectrum Brands Inc. and its reorganized debtor affiliates object
to, and ask the U.S. Bankruptcy Court for the Western District of
Texas, San Antonio Division, to disallow, the claims filed by six
creditors contending that those claims are already the subject of
separate lawsuits in separate state courts. Further, the
Reorganized Debtors inform the Bankruptcy Court that the
Reorganized Debtors and each individual claimant have recently
agreed on the terms of settlement of the matter, subject to
approval by the State Court where each case is litigated.
The Claims are:
Nature Claim Handling
Claimant of Claim Amount State Court
-------- -------- ------ -----------
Melissa Bowman Wrongful Unknown Superior Court
Death Los Angeles,
California
Michael Breda Asbestos $50,000 Superior Court
related San Francisco,
personal California
injuries
Monica Brown Discrimi- Unknown U.S. District
nation Court for the
Northern District
of Georgia,
Atlanta Division
Norman Dornblaser Asbestos $50,000 Superior Court
related San Francisco,
personal California
injuries
Farmers Insurance Product $197,111 Superior Court
Company of Arizona liability Maricopa,
claim Arizona
Elena Aminov, Personal $4,500,000 Supreme Court
et al. injuries of Kings County,
claims New York
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.
SPRINT NEXTEL: Holds 9.4% of iPCS Common Shares
-----------------------------------------------
Sprint Nextel Corporation disclosed holding beneficial ownership
of 1,558,136 shares or roughly 9.4% of the common stock of iPCS,
Inc., as of October 28, 2009.
Pursuant to an Agreement and Plan of Merger, dated October 18,
2009, by and among Sprint Nextel, Ireland Acquisition Corporation,
and a wholly owned subsidiary of Sprint Nextel, as offeror; and
iPCS, Offeror commenced an offer on October 28 purchase all of the
issued and outstanding Shares of iPCS for $24.00 per Share, net to
the seller in cash, less any required withholding taxes and
without interest, upon the terms and conditions set forth in the
Offer to Purchase, dated October 28, 2009. The purpose of the
Offer is to acquire control of, and the entire equity interest in,
iPCS. The Merger Agreement also provides that, following
completion of the Offer, upon the terms and subject to the
conditions of the Merger Agreement and in accordance with the
Delaware General Corporation Law, Offeror will be merged with and
into iPCS. Each Share then outstanding will be converted into the
right to receive the Offer Price. Following the Merger, iPCS will
continue as the surviving corporation and become a wholly owned
subsidiary of Sprint Nextel, and the separate corporate existence
of Offeror will cease.
The Offer is conditioned upon, among other things, there being
validly tendered and not withdrawn prior to the expiration of the
Offer a number of Shares that represents at least a majority of
the then outstanding Shares on a fully diluted basis. The Offer
is also subject to the expiration or termination of all applicable
waiting periods under the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended, receipt of required approvals from the
Federal Communications Commission (or, under certain
circumstances, waiver of the requirement of such approvals) and
other required regulatory approvals and the satisfaction or waiver
of certain other terms and conditions.
If pursuant to the Offer, Offeror acquires at least 90% of the
Shares then outstanding, in accordance with the Merger Agreement
and the DGCL, Offeror will be able to effect the Merger without a
vote of iPCS' stockholders. In addition, if Offeror does not own
at least 90% of the Shares after its acceptance of and deposit of
payment for Shares pursuant to the Offer, its has the option --
Top-Up Option -- subject to certain limitations, to the time of
exercise and issuance of the Shares one Share more than 90% of the
total outstanding Shares on a fully diluted basis. If, however,
the Minimum Condition is met but Sprint Nextel and Offeror do not
acquire 90% of the Shares then outstanding as a result of the
Offer (including the Top-Up Option) or otherwise, the vote of
iPCS' stockholders will be required under the DGCL to effect the
Merger.
The Merger Agreement further provides that, if requested by Sprint
Nextel or Offeror and if the Minimum Condition is satisfied,
promptly following the purchase of such Shares by Offeror pursuant
to the Offer, and from time to time thereafter, iPCS will take all
actions necessary, including increasing the size of the Board of
Directors of iPCS or causing the resignation of members who were
directors prior to the commencement of the Offer, to cause such
number of persons designated by Offeror to become directors of
iPCS so that the percentage representation of Offeror's designees
on the Board of Directors of iPCS is equivalent to Offeror's
percentage ownership of Shares issued and outstanding, on a fully
diluted basis, as of such time. In addition, Sprint Nextel,
Offeror and iPCS have agreed to use their reasonable best efforts
to ensure that at least two of the members of the Board of
Directors of iPCS will be continuing directors or persons
designated by the continuing directors.
In connection with the Merger Agreement and for the purpose of
facilitating the transactions contemplated thereby, Sprint Nextel
entered into a Stockholders Agreement, dated as of October 18,
2009, with the following stockholders: Apollo Investment Fund IV,
L.P., Apollo Overseas Partners IV, L.P., Timothy M. Yager,
Stebbins B. Chandor, Jr., Timothy G. Biltz and Mikal J. Thomsen.
Pursuant to the Stockholders Agreement, the Tendering Stockholders
agreed to tender an aggregate of 1,508,229 Shares owned by the
Tendering Stockholders in the Offer and, if necessary, to vote the
Committed Shares (except for those Shares tendered pursuant to the
Offer or any subsequent offering period) in favor of the Merger.
In addition, certain Tendering Stockholders holding an aggregate
of 49,907 restricted Shares have agreed to tender the Restricted
Shares, to the extent the restrictions lapse, in any subsequent
offering period made available under the Offer.
As of October 13, 2009, (i) the Committed Shares represented
approximately 9.1% of the Shares issued and outstanding and
approximately 8.2% of the Shares issued and outstanding on a fully
diluted basis and (ii) the Committed Shares together with the
Restricted Shares represented approximately 9.4% of the Shares
issued and outstanding and approximately 8.5% of the Shares issued
and outstanding on a fully diluted basis.
Sprint Nextel anticipates that, if the Merger is completed in
accordance with the Merger Agreement, (i) iPCS will become a
wholly owned subsidiary of Sprint Nextel, (ii) Sprint Nextel will
seek to cause the Shares to be removed from listing on the NASDAQ
Global Select Market and (iii) the Shares will become eligible for
termination of registration pursuant to Section 12(g)(4) of the
Securities Exchange Act of 1934, as amended. Sprint Nextel
intends to seek to cause iPCS to terminate the registration of the
Shares under the Exchange Act as soon after consummation of the
Offer as the requirements for termination of registration are met.
A full-text copy of Sprint Nextel's disclosure on Schedule 13D is
available at no charge at http://ResearchArchives.com/t/s?47e0
A full-text copy of the Tender Offer Statement is available at no
charge at http://ResearchArchives.com/t/s?47e7
A full-text copy of the Offer to Purchase is available at no
charge at http://ResearchArchives.com/t/s?47e8
About Sprint Nextel Corporation
Overland Park, Kansas-based Sprint Nextel Corporation is a
communications company offering a comprehensive range of wireless
and wireline communications products and services that are
designed to meet the needs of individual consumers, businesses and
government subscribers. Sprint Nextel is the third largest
wireless communications company in the United States based on the
number of wireless subscribers. Sprint Nextel is also one of the
largest providers of wireline long distance services and one of
the largest carriers of Internet traffic in the nation.
Sprint Nextel carries Moody's Investors Service's Ba1 corporate
family rating. Standard & Poor's Ratings Services said its rating
on Sprint Nextel (BB/Negative/--) is not affected by the company's
definitive agreement to acquire iPCS Inc.
SPRINT NEXTEL: Reports $478 Mil. Third Quarter 2009 Net Loss
------------------------------------------------------------
Sprint Nextel Corp. reported third quarter 2009 financial results
that included consolidated net operating revenues of $8.0 billion,
a net loss of $478 million and a diluted loss per share of 17
cents. The company generated Free Cash Flow of $664 million in
the quarter and $2.1 billion year-to-date in 2009.
Year-to-date ended September 30, 2009, Sprint Nextel posted a net
loss of $1.456 billion compared to $1.175 billion for the same
period in 2008.
As of September 30, 2009, the company had $5.9 billion in cash,
cash equivalents and short-term investments and $1.6 billion in
borrowing capacity available under its revolving bank credit
facility, for total liquidity of $7.5 billion.
As of September 30, 2009, the company had $55.648 billion in total
assets against $37.414 billion in total liabilities.
Sprint lost a total of 135,000 net retail subscribers in the
quarter. The company's year-over-year post-paid gross addition
improvement was the best in Sprint Nextel history, and the
sequential improvement was the best in more than five years. Net
post-paid subscriber losses have improved by approximately 20
percent in each of the second and third quarters of 2009.
"Sprint achieved its best net retail subscriber results in more
than two years and improvement in both post-paid and prepaid gross
subscriber additions in the third quarter," said Dan Hesse, Sprint
Nextel CEO. "Sprint is beginning to attract more customers with
the industry's best device line-up and the clarity and simplicity
of our offers, seven sequential quarters of improvement in
customer care satisfaction, a network declared to be most reliable
by PC World magazine, and recognition from Newsweek magazine which
ranked Sprint 15th of 500 companies on its 2009 Green Ratings list
-- the only telecom company in the Top 100.
"The company again generated strong cash flow, and while Operating
Income Before Depreciation and Amortization* (OIBDA) was impacted
by costs associated with growth in customer additions, previous
quarters' subscriber losses and certain seasonal costs in the
quarter, Sprint continues to manage costs rigorously. We expect to
see sequential quarterly improvement in both post-paid and total
net subscriber losses in the fourth quarter of 2009," Mr. Hesse
said.
Sprint Nextel continues to expect that both post-paid and total
subscriber full-year losses should improve in 2009 as compared to
2008. The company also expects both post-paid and total
subscriber net losses to improve sequentially from 3Q to 4Q of
2009. In addition, Sprint Nextel expects that full-year capital
expenditures in 2009 will be less than $1.7 billion. The company
expects to continue to generate positive Free Cash Flow during the
fourth quarter of 2009.
A full-text copy of the company's quarterly report is available at
no charge at http://ResearchArchives.com/t/s?47e6
About Sprint Nextel Corporation
Overland Park, Kansas-based Sprint Nextel Corporation is a
communications company offering a comprehensive range of wireless
and wireline communications products and services that are
designed to meet the needs of individual consumers, businesses and
government subscribers. Sprint Nextel is the third largest
wireless communications company in the United States based on the
number of wireless subscribers. Sprint Nextel is also one of the
largest providers of wireline long distance services and one of
the largest carriers of Internet traffic in the nation.
Sprint Nextel carries Moody's Investors Service's Ba1 corporate
family rating. Standard & Poor's Ratings Services said its rating
on Sprint Nextel (BB/Negative/--) is not affected by the company's
definitive agreement to acquire iPCS Inc.
STANDARD MOTOR: In Talks to Sell European Business for GBP3.6MM
---------------------------------------------------------------
Standard Motor Products, Inc., is engaged in exploratory
discussions with the managers of its European business regarding
their interest in acquiring the business via a management buy-out.
Proposed terms of a transaction would include the sale of Standard
Motor Products' European distribution business for GBP1.8 million
($2.9 million) in cash and a promissory note and approximately
GBP1.8 million ($2.9 million) in assumed debt.
In connection with the proposed sale, Standard Motor Products
would retain its manufacturing operation in Poland, certain land
available for sale in the United Kingdom and a small investment in
a joint venture.
If Standard Motor Products consummates the proposed transaction
under the above terms, its estimated non-cash charges for the
transaction would range from GBP4.0 million ($6.4 million) to
GBP4.5 million ($7.2 million). Any such transaction would require
approval of Standard Motor Products' Board of Directors, which has
not yet been obtained. There can be no assurance that Standard
Motor Products will complete a transaction under the proposed
terms, or at all. (U.S. dollar equivalents are calculated at an
assumed foreign currency exchange rate of GBP 1.60.)
About Standard Motor
Standard Motor Products, Inc. (NYSE: SMP), headquartered in Long
Island City, New York, is a manufacturer and distributor of
replacement parts for the automotive aftermarket industry. The
company is organized into two principal divisions: (i) Engine
Management (ignition and emission parts; ignition wires; battery
cables; and fuel system parts) and (ii) Temperature Control (air
conditioning compressors; other air conditioning parts; and heater
parts). Standard Motor's annualized revenues currently
approximate $775 million.
* * *
As reported by the Troubled Company Reporter on July 17, 2009,
Moody's Investors Service withdrew all ratings of Standard Motor
Products' after the only rated debt having been redeemed upon
maturity. Ratings withdrawn include the Corporate Family Rating
at Caa1, and $32 million convertible subordinated debentures due
July 2009 at Caa2. The last rating action occurred on June 30,
2009, when its CFR was upgraded to Caa1 from Caa2.
On June 23, the TCR said Standard & Poor's Ratings Services
withdrew its 'CC' corporate credit rating and other debt ratings
on Standard Motor Products at the company's request. There is a
small amount of rated debt remaining after the recently completed
exchange offer.
STANDARD MOTOR: To Raise Funds by Issuing 3MM Common Shares
-----------------------------------------------------------
Standard Motor Products Inc. on October 30, 2009, announced the
pricing of an underwritten public offering of 3,000,000 shares of
its common stock, at an offering price of $8.50 per share. In
connection with this offering, the Company has granted the
underwriters a 30-day option to purchase up to 450,000 additional
shares. Goldman, Sachs & Co. is serving as the sole book-runner,
with BB&T Capital Markets as a co-manager for the offering.
The underwriters expect to deliver the shares against payment in
New York on November 4, 2009.
Standard Motor Products initially planned to offer 4,000,000
shares.
The common stock is listed on the New York Stock Exchange under
the symbol "SMP". The last reported sale price of the common
stock on October 26, 2009, was $11.93 per share.
The Company intends to use the net proceeds from the sale of its
common stock in the offering to repay a portion of its outstanding
indebtedness under its revolving credit facility. The Company
then intends to borrow funds from time to time under its revolving
credit facility for general corporate purposes. The Company's
revolving credit facility has an interest rate based on an index
rate plus a margin between 2.25% and 2.75% on index rate loans and
based on LIBOR plus a margin between 3.75% and 4.25% on LIBOR
loans. As of September 30, 2009, the Company had approximately
$90 million outstanding under the revolving credit facility, which
expires in March 2013.
A full-text copy of the Prospectus Supplement is available at no
charge at http://ResearchArchives.com/t/s?4809
About Standard Motor
Standard Motor Products, Inc. (NYSE: SMP), headquartered in Long
Island City, New York, is a manufacturer and distributor of
replacement parts for the automotive aftermarket industry. The
company is organized into two principal divisions: (i) Engine
Management (ignition and emission parts; ignition wires; battery
cables; and fuel system parts) and (ii) Temperature Control (air
conditioning compressors; other air conditioning parts; and heater
parts). Standard Motor's annualized revenues currently
approximate $775 million.
* * *
As reported by the Troubled Company Reporter on July 17, 2009,
Moody's Investors Service withdrew all ratings of Standard Motor
Products' after the only rated debt having been redeemed upon
maturity. Ratings withdrawn include the Corporate Family Rating
at Caa1, and $32 million convertible subordinated debentures due
July 2009 at Caa2. The last rating action occurred on June 30,
2009, when its CFR was upgraded to Caa1 from Caa2.
On June 23, the TCR said Standard & Poor's Ratings Services
withdrew its 'CC' corporate credit rating and other debt ratings
on Standard Motor Products at the company's request. There is a
small amount of rated debt remaining after the recently completed
exchange offer.
STANDARD PACIFIC: Matlin's Schoels Joins Board of Directors
-----------------------------------------------------------
Standard Pacific Corp. reports that on October 26, 2009, the Board
of Directors of the Company elected Peter Schoels, the managing
partner of MatlinPatterson Global Advisers LLC, as a member of the
Company's Board of Directors. Mr. Schoels was not appointed to
serve as a member of any committee of the Board.
Mr. Schoels was nominated for appointment to the Board by MP CA
Homes, LLC, an affiliate of MatlinPatterson Global Advisers LLC,
in accordance with Section 2.2 of the Stockholders Agreement,
dated as of June 27, 2008, between the Company and
MatlinPatterson. Pursuant to the terms of the Stockholders
Agreement, for so long as MatlinPatterson owns at least 10% of the
total voting power of the Company, it is entitled to designate
such number of directors to serve on the Board as is proportionate
to the total voting power of voting stock beneficially owned by
Investor and its affiliates, provided that the number of directors
appointed by MatlinPatterson may never exceed one person less than
a majority of the directors then serving on the Board.
To the extent that MatlinPatterson and its affiliates decrease
their holdings of voting stock of the Company, the Company has the
right to request the resignation of directors designated by
MatlinPatterson to maintain Investor's proportionate share. The
election and appointment of each MatlinPatterson designated
director is subject to all legal requirements and the Company's
reasonable governance standards regarding service as a director of
the Company and to the reasonable approval of the Nominating and
Corporate Governance Committee of the Board.
According to Mr. Schoels's Form 3 filing, Mr. Schoels has an
indirect pecuniary interest in certain funds that hold 100% of the
membership interests in MatlinPatterson. His exact pecuniary
interest is not readily determinable because it is subject to
several variables, including without limitation, the internal
rates of return of the Funds overall and with respect to their
indirect investment in the Company.
The Company also reports that on October 26, 2009, the Board of
Directors amended and restated the Company's bylaws to expand the
Company's authorized number of directors from 7 to 8.
About Standard Pacific
Based in Irvine, California, Standard Pacific Corp. (NYSE: SPF) --
http://www.standardpacifichomes.com/-- one of the nation's
largest homebuilders, has built more than 108,000 homes during its
43-year history. The Company constructs homes within a wide range
of price and size targeting a broad range of homebuyers. Standard
Pacific operates in many of the largest housing markets in the
country with operations in major metropolitan areas in California,
Florida, Arizona, the Carolinas, Texas, Colorado and Nevada. The
Company provides mortgage financing and title services to its
homebuyers through its subsidiaries and joint ventures, Standard
Pacific Mortgage, Inc. and SPH Title.
* * *
According to the Troubled Company Reporter on April 1, 2009,
Standard & Poor's Ratings Services lowered its issue-level rating
on Standard Pacific Corp.'s senior unsecured notes to 'CCC-' from
'CCC' and removed the rating from CreditWatch, where it was placed
with negative implications on March 4, 2009. At the same time,
S&P lowered its recovery rating on the debt to '5' from '4',
indicating that senior noteholders can expect modest (10%-30%)
recovery in the event of a payment default.
STANDARD PACIFIC: Posts $23.8 Million Net Loss for 3rd Qtr 2009
---------------------------------------------------------------
Standard Pacific Corp. said homebuilding revenues for its third
quarter ended September 30, 2009, were $327.4 million (including
$57.5 million in land sale revenues), down 18% from $400.3 million
last year. The Company generated a net loss of $23.8 million, or
$0.10 per diluted share, versus a net loss of $369.9 million, or
$2.54 per diluted share, for the year earlier period.
The Company said the 2009 third quarter results included asset
impairment charges of $7.8 million, which related primarily to the
sale of a podium building and land, versus $368.4 million in
impairments in the prior year period. The 2009 third quarter
results also included $10.1 million in debt and other
restructuring charges and a $9.3 million charge related to the
deferred tax asset generated during the quarter.
Excluding asset impairment and restructuring charges, the Company
generated a 2009 third quarter net loss of approximately
$3.6 million*, or $0.01 per diluted share.*
During the quarter, the Company generated $112.6 million of cash
flows from operations, driven primarily from a $104.0 million
decrease in inventories (including $56.2 million related to the
sale of a podium building and land). The Company ended the
quarter with $806.8 million of homebuilding cash (including
$283.3 million of restricted cash, $257.6 million of which was
held in escrow related to the issuance of $280 million of 10_%
senior notes due 2016).
As of September 30, 2009, the Company had $2.068 billion in total
assets against $1.717 billion in total liabilities.
On October 9, 2009, the Company completed a refinancing
transaction pursuant to which it utilized the $257.6 million of
net proceeds from the issuance of the 10_% senior notes due 2016
and cash on hand to repurchase approximately $133.4 million,
$122.0 million and $3.4 million of senior notes due 2010, 2011 and
2013, respectively. The Company also exchanged $32.8 million of
its 2012 senior subordinated convertible notes during the quarter
for approximately 7.6 million shares of common stock at an
effective price of $4.30 per share. Finally, the Company repaid
the remaining $37.1 million balance on its Term Loan A credit
facility, the $22.9 million balance on its revolving credit
facility, $51.3 million of other indebtedness and assumed
$52.1 million of joint venture recourse debt during the quarter.
In connection with these financing transactions, the Company
recorded an $8.8 million non-cash loss on the early extinguishment
of debt.
As a result of these transactions, the Company reduced the amount
of senior notes, revolving credit facility and Term Loan A
indebtedness that was scheduled to mature before 2013 from
$528 million to $180 million ($15 million in 2010, $49 million in
2011 and $116 million in 2012). Since just prior to the closing
of the MatlinPatterson transaction in June 2008, the Company has
reduced the principal amount of its total homebuilding and joint
venture recourse debt by over $725 million from $2.0 billion to
$1.27 billion and has reduced the amount of homebuilding and joint
venture recourse debt maturing prior to 2013 from $1.33 billion to
$322 million (including $180 million of senior notes, $97 million
of project specific debt and $45 million of joint venture recourse
debt related to three joint ventures).
Ken Campbell, the Company's President and CEO stated, "With over
$500 million of cash in the bank, anticipated near-term positive
cash flows from operations and the significant reduction in the
amount of our debt that is scheduled to mature in the next three
years, we believe we have ample liquidity to acquire land assets
to support our growth when the upturn in the housing market
occurs."
Mr. Campbell continued, "Holding our gross margins at 18% and our
SG&A rate at 15% during the quarter is not great performance, but
gives a good indication of the margins built into our inventory
and positions us reasonably well for significant improvements in
profitability with only small improvements in the housing market."
A full-text copy of Standard Pacific's earnings release is
available at no charge at http://ResearchArchives.com/t/s?47e5
About Standard Pacific
Based in Irvine, California, Standard Pacific Corp. (NYSE: SPF) --
http://www.standardpacifichomes.com/-- one of the nation's
largest homebuilders, has built more than 108,000 homes during its
43-year history. The Company constructs homes within a wide range
of price and size targeting a broad range of homebuyers. Standard
Pacific operates in many of the largest housing markets in the
country with operations in major metropolitan areas in California,
Florida, Arizona, the Carolinas, Texas, Colorado and Nevada. The
Company provides mortgage financing and title services to its
homebuyers through its subsidiaries and joint ventures, Standard
Pacific Mortgage, Inc. and SPH Title.
* * *
Standard Pacific Corp. carries 'Caa1' long term corporate family
and probability of default ratings from Moody's. It has a 'CCC+'
issuer credit ratings from Standard & Poor's. It carries a 'CCC'
long term issuer default rating from Fitch.
STATION CASINOS: Proposes to Extend Claims Bar Date Until Jan. 15
-----------------------------------------------------------------
Upon notice of the first meeting of creditors pursuant to Section
341 of the Bankruptcy Code, the U.S. Trustee gave notice that (i)
the meeting of creditors was scheduled for August 31, 2009; and
(ii) the deadline for all creditors, except a governmental unit,
to file a proof of claim is 90 days after the date first set for
the meeting of creditors, and for governmental units the deadline
is 180 days after the date of the order for relief.
The Sec. 341 Notice also contained a section describing how to
file a proof of claim and how to access the Debtors' schedules,
and the possible impact of failing to file a proof of claim.
Based on the Sec. 341 Notice, the bar date for filing proofs of
claim by non-governmental creditors is November 30, 2009.
The Official Committee of Unsecured Creditors has requested that
the Debtors seek an extension of the bar date. In light of the
recent filing of the Debtors' schedules of assets and
liabilities, the Debtors have agreed to seek that relief. Rule
3003(c)(3) of the Federal Rules of Bankruptcy Procedure and Rule
3003 of the Local Rules of the United States Bankruptcy Court for
the District of Nevada authorize the Court to grant extensions of
bar dates for cause shown.
Accordingly, the Debtors ask the Court to extend the current
November 30, 2009, deadline for filing proofs of claim to
January 15, 2010. Moreover, in light of the recent filing of the
Debtors' schedules, the Debtors believe that cause exists to
grant non-governmental creditors until January 15, 2010 to file
proofs of claim.
About Station Casinos
Station Casinos, Inc., is a gaming and entertainment company that
currently owns and operates nine major hotel/casino properties
(one of which is 50% owned) and eight smaller casino properties
(three of which are 50% owned), in the Las Vegas metropolitan
area, as well as manages a casino for a Native American tribe.
Station Casinos Inc., together with its affiliates, filed for
Chapter 11 on July 28, 2009 (Bankr. D. Nev. Case No. 09-52477).
Station Casinos has hired Milbank, Tweed, Hadley & McCloy LLP as
legal counsel in the Chapter 11 case; Brownstein Hyatt Farber
Schreck, LLP, as regulatory counsel; and Lewis and Roca LLP as
local counsel. The Debtor is also hiring Lazard Freres & Co. LLC
as investment banker and financial advisor. Kurtzman Carson
Consultants LLC is the claims and noticing agent.
In its bankruptcy petition, Station Casinos said that it had
assets of $5,725,001,325 against debts of $6,482,637,653 as of
June 30, 2009. About 4,378,929,997 of its liabilities constitute
unsecured or subordinated debt securities.
Bankruptcy Creditors' Service, Inc., publishes Station Casinos
Bankruptcy News. The newsletter tracks the Chapter 11 proceedings
of Station Casinos Inc. and its debtor-affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
STATION CASINOS: Schedules of Assets & Liabilities
--------------------------------------------------
A. Real Property None
B. Personal Property
B.1 Cash on hand
Petty Cash 3,300
B.2 Bank Accounts
Bank of America - 7092 (528,292)
Bank of America - 7115 3,967,391
Bank of America Securities LLC - 2592 0
Bank of America - 7107 (1,099,697)
Bank of America - 7180 (163,581)
Bank of America - 5125 (180,818)
Deutsche Bank S38905 10,184,203
B.3 Security Deposits
W/C Bond 217,500
3236 Meade Avenue - lease deposit 6,075
IGT Advantage Bonus Licenses 5,555,499
3/5 Working Capital Fund 13,540
Security Deposit-Badura Lease 25,612
Security Deposit-10801 W. Charleston 70,207
Reserve account for Team Member Relocation 63,000
7/09 Applied portion of Deposit to July Invoice 328,400
3/27 Reserve Payment - Merchant Deposit 1,250,000
2/26 Wire-Customer # 1028326 - Various Premises 13,305
2/27 Wire - Media Deposit 500,000
3/2 Agreement Letter 250,000
7/09 Deposit on CC Accounts 601,342
Legal Services-Bankruptcy 48,542
Deposit - Legal Services 34,661
4/9 Deposit per Agreement 10,000
Refundable Advance Deposit 130,000
Keno deposit - refundable per contract 15,000
Others 3
B.4 Household Goods
Beer Dispenser W/ Tubing, Fittings 18
China & Flatware 27
Dishes For Airplane 3,526
Mahagany Book Case 27
Lavazza Espresso Point W/steamer 354
Refrigerator-model 63210 5,782
Wine Cooler-model 424g/02 1,620
Dishwasher-modelg2430sci 1,091
Microwave-model Kb-6015ks 530
Dishwasher-model G2430scu 1,091
Refrigerator-model Zics360nrgrh 4,077
Others 2
B. 5 Collections - Books, Pictures, etc. 1,216,696
See: http://ResearchArchives.com/t/s?47c6
B. Firearms, Sports and Other Hobby Equipments
Camera Case/audio Vest Set/multipurpose Bag 18
Proxima Dp5900 Projector W/lamp 9
Sony Camera DSCWI 123
Add and replace camera-CCTV System 1,225
1 Kodak Dc50 Camera 200 Zoom Lens 0
Perfection V750-M Pro FB-Photo Scanner 282
Cisco Unified Video Adv w/ VT Camera II 2,639
Video Project - Install E-mail, Modems, Video 27
Complete Set Up Camera & Video Equipment 901
Others 3
B.9 Interests in Insurance Policies None
B.12 Interests in IRA, ERISA or other Pension Plans None
B.13 Business Interests and stocks
Aliante Holding LLC 154,981,322
Aliante Station LLC 287,426,042
Auburn Development LLC 27,367,624
Boulder Station Inc 3,145,745
Centerline Holdings LLC 39,449,457
Charleston Station LLC 95,371,279
CV Holdco, LLC 341,598,501
Durango Station Inc 97,796,505
FCP PropCo, LLC 530,011,295
Fiesta Station Inc 93,490,103
Gold Rush Station LLC 5,411,148
Green Valley Station Inc 39,572,270
GV Ranch Station, Inc 106,538,357
Inspirada Station, LLC 71,464,001
Lake Mead Station Inc 223,107,988
Magic Star Station LLC 4,689,868
MPM Enterprises 102,453,000
Northern NV Acquisitions, LLC 43,983,991
Palace Station Hotel & Casino, Inc (109,705,294)
Palms Station LLC 28,717,402
Past Enterprises Inc 1,000
Rancho Road LLC 70,281,139
Rancho Station LLC 19,480,867
Reno Land Holdings, LLC 70,370,737
River Central, LLC 3,492,866
Santa Fe Station Inc 839,826,162
SC Butte Development LLC 11,953,484
SC Butte Management LLC 16,594,500
SC Madera Development LLC 15,946,240
SC Michigan LLC 1,264,001
SC Rancho Development LLC 208,353
SC Sonoma Development LLC 155,169,036
SC Sonoma Management LLC 137,085,000
Sonoma Land Acquisition Co, LLC 10,546,797
Station California LLC (33,948,030)
Station Holdings Inc 86,202,327
STN Aviation, Inc. 5,150,604
Sunset GV LLC 4,736,500
Sunset Station Inc (15,043,837)
Texas Station LLC 279,220,731
Town Center Station LLC 16,224
Tropicana Acquisitions LLC 376,197
Tropicana Station Inc 1,088,476
Tropicana Station, LLC 11,665,370
Vista Holdings LLC 408,679,284
LML Station LLC 3,607,634
Others 12
B.14 Interests in partnerships None
B.16 Accounts Receivable None
B.18 Other Liquidated Debts None
B.20 Contingent and noncontingent interest None
B.21 Other Contingent & Unliquidated Claims None
B.22 Patents
DEQ Shuffer Machine License 1,000,000
My Station Wed Domain Rights 41,800
B.23 General Intangibles
See: http://ResearchArchives.com/t/s?47c7 1,567,688
B.24 Customer lists None
B.25 Vehicles
Party Bus-2006 Ford Van E350 4,695
Party Bus-2006 Ford Van E350 16,937
2007 GMC Truck Envoy 2WD 18,163
2004 Escalade ESV 7,386
2005 Chevrolet Suburban 2,090
2005 Chevrolet Suburban 9,505
2005 Chevrolet Suburban 2,067
2005 Chevrolet Suburban 9,403
Reconditioned 4-passenger Club Car 27
Retrofit Bus With Chairlift 180
2000 Chevrolet C-650 Box Truck - 20ft 1,127
2002 F-350 Ford Van 1,743
2003 Isuzu NPR HD Truck 2,675
Party Bus 14,287
Party Bus 51,259
Others 6
B.27 Aircraft and accessories
Spacing of communications radios 171
Radio Frequency Upgrades 234
Magnastar system 1,452
Upgrade FMS Computer - Avionics Upgrade 1,310
Windsheild for A/C-Left Pilot Side 1,113
Main Landing Gear Parts 1,667
Main Landing Gear Parts 3,075
GIV Plane Remodel Costs 172,137
GIV Plane Remodel Costs 405,569
Entertainment Equipment for Plane 984
MP3 Player System Installation 3,251
MP3 Player System Installation 6,884
24 month inspection 16,666
Repair costs related to 36 month inspection 1,076
Repair costs related to 36 month inspection 11,850
Installation of Ice Machine 952
Installation of Ice Machine 2,326
Flight ID & enhanced surveillance 8,777
Flight ID & enhanced surveillance 32,580
24 Month Inspection 20,088
24 Month Inspection - window 5,306
Others 1,406
B.28 Office equipment, furnishings and supplies 13,315,070
See: http://ResearchArchives.com/t/s?47c8
B.29 Machinery
Install ADT Alarm System 2,156
Install Ceiling 1,170
Expand Walls in Plaza Office Space 3,389
EGPWS Install/Remodel change 1,555
EGPWS Install/Remodel change 13,928
Building D Conduit & CAT5 Installation 9,120
Remodel Corporate HR Office 4,313
Install Conduit/120V Outlet in Wire Closet 6,532
Pallet rack uprights 1,432
Pallet rack uprights 4,329
Office Construction-Additional Space 13,111
Install Conduit 7,305
Install 2" Conduit 3,184
Provide & install voice & data cabling 2,997
Office Remodel 4,745
Renovating new offices for Const. Dept. 12,112
TMC Forklift 3,945
Challenger Cutter 1,226
Provide & Install 2" Conduit 3,996
Install Conduit/Cat5E Cable/Cat 3 Cable 3,371
Installation of new phones 1,313
Locks changed and security key pad 2,372
Install 120V & 220V outlets 1,436
Cold Room Water Pipe Retrofit 12,184
Floor Cleaning Machine 2,395
Floor Cleaning Machine 5,468
ADT-Keypad entry 2,967
Saflok System for Temp Corp Offices 8,270
Scissor Lift 3,109
Scissor Lift 8,485
Tennant 3260 vacuum 1,067
Tennant 3260 vacuum 1,067
Walk behind floor scrubber 4,112
Walk behind floor scrubber 4,112
Kitchen Remodel 11,732
Genie Scissorlift 12,779
Probe Anti Ice 4,320
Install Card Readers at main Hangar door 17,360
General Cabling Materials 255,944
Call Center Leasehold Improvements 293,354
Galaxy 600 Series 8-Door Controller 11,964
APC Netbotz 420 Wall Appliance 1,287
Installation of electric lines 6,385
Locks - purchase w/ installation 1,623
Coleman Slot Lift 1,532
Coleman Slot Lift 5,303
Electrical Work/Wiring 6,114
Remote Site Carrier at New Location 8,874
Electrical Wiring Upgrades 2,272
Conduit & Data Drops 1,803
Install C-5 Cable 5,129
Install C-5 Cable 3,269
QA Test Lab expansion 5,288
Cabling-12 voice/12 data 1,249
Regent Aircraft Jacks 2,673
Air Conditioner for Cold Storage Room 2,202
Install new Locks & glass for new entry in HR 1,726
Alarm System 1,152
Alarm System 1,152
A/C Units Installation 1,382
A/C Units Installation 4,190
QA Improvements 1,574
QA Improvements 4,806
Others 44,563
B.30 Inventory
Food & Beverage 13,719
B.35 Other Personal Property
Building Construction 1,546,047
Building Construction 4,374,772
Building construction-bonus 2,082
Building Costs 3,188
Building costs - refund/adj (5,144)
Corporate Office Bldg Const 60,738,623
Corporate Office Bldg Const 1,039,759
Corporate Office Bldg Const 8,533
Corporate Office Bldg Const 5,414
Corporate Office Bldg Const 8,485
Corp Office Bldg Const - Electrical Systems 7,320
Land Leases 3,141,364
Construction in process 24,746,949
Deposit Escrow in WWW Land 5,000,000
Prepaid Insurance P&C 236,299
Prepaid Insurance D&O 1,637,530
Prepaid Rent 131,544
Prepaid Advertising 585,632
Prepaid Group Insurance 13,714
Prepaid Purchases 6,364
Prepaid Maintenance Contracts 299,609
Prepaid Contracts 60,416
Prepaid Postage 249,854
Prepaid Other 900,749
Debt Financing Cost-Corporate Building 1,128,617
Bank Facility Costs-$500M 12,671,274
Debt Issuance-2ND Lien 455,816
Debt Offering Costs-8th 922,425
Debt Offering Costs-700 901,484
Debt Offering Costs-$48M I/C 78,336
Debt Offering Costs-450 454,748
Debt Offering Costs-300 726,224
S-T Deferred Tax Assets - FIN 48 133,406
L-T Deferred Tax Assets 229,851,088
L-T Deferred Tax Assets - FAS 158 (165,749)
Debt Offering Costs 943,523
L-T Deferred Tax Assets - FIN 48 2,479,390
Debt Offering-Exchange Offer 26,643,175
Management Deferred Compensation-DW 18,852,852
CC Membership 100,000
Investment in DEQ 400,920
DEQ Royalty 817,992
Project Costs - Graton Cap Int 12,623,122
Project Costs - Michigan 9,460,641
Project Costs - Chico Cap Int 1,001,486
Project Costs - Cypress JT VE 255,160
Others 5,073
TOTAL SCHEDULED ASSETS $4,756,541,619
========================================================
C. Property Claimed as Exempt None
D. Secured Claim
Deutsche Bank 876,968,813
CIT Technology Financing Services, Inc. Unknown
US Bancorp Unknown
Xerox Corporation Unknown
FCP Propco, LLC Unknown
Inland Hobbs Material Handling, Inc. Unknown
Konami Gaming, Inc. Unknown
Teradata Operations, Inc. Unknown
E. Unsecured Priority Claims
Anthony M Willis 11,250
Arthur N Manteris 72,916
C Ethan Cartwright 10,416
Charlotte Harris 23,331
Daniel J Roy Jr 109,375
Danny Brennan 12,673
Donald Chandler 206,280
Douglas J Sorvik 23,728
Frederick V Baltz 30,665
Glen T Bashore Jr 156,250
Jason Martin Mann 20,000
Jean L. Weber 33,333
Jeffrey Janakus 10,412
Jessica Suzanne 10,000
Jocelyn Herbst 10,000
John M Pasqualotto 21,317
Jose Passalacqua 13,822
Kevind Scroggins 13,679
Raymond R Frankulin 93,644
Richard St Jean 277,777
Richard J Van Rhyn 34,189
Scott Kreeger 194,444
Shawn Cardinal 10,500
Steven Bastille 14,583
Steven Sterrett 25,487
Teri L Tratos 25,545
Thomas Friel 72,917
Valerie A Murzl 226,562
Weldon Russell 33,333
William David Young 113,694
Myrl Jensen 9,397
Matthew J Sacca 8,333
Joseph Hernandez 8,055
Johnny Leigh Quinn 9,712
Jeffry A Martin 8,750
Brian Skagen 8,095
David J Gildersleeve 7,870
Eduardo Hernandez 7,840
Scott A Ringler 6,666
John Sauer 6,666
James Hicks 5,555
Ronan O'Gorman 5,901
Others 143,334
F. Unsecured Non-priority Claims
Vista Holdings, LLC 126,208,659
Aliante Station LLC 246,753,195
Bank of America 80,679
Boulder Station Inc 424,836,180
Cede and Company 6 7/8% Bond 743,713,544
Cede and Company 6 1/2% Bond 479,006,250
Cede and Company 6% Bond 472,275,000
Cede and Company 7 3/4% Bond 429,536,110
Cede and Company 6 5/8% Bond 317,280,208
Charleston Pavillion, LLC 888,572
Charleston Station LLC 392,007,090
CV Propco, LLC 26,643,899
Dechert LLP 67,600
Deq Systems Corp. 775,267
Ernst & Young 650,000
Green Valley Station Inc 32,402,736
Greens Cafe LLC 677,396
GV Ranch Station, Inc 45,655,934
Jones Day 70,000
JP Morgan Chase Bank N.A. 7,758,417
Katten Muchin Rosenman LLP 50,000
Kirkland & Ellis LLP 100,611
Kurtzman Carson Consultants LLP 50,000
Lake Mead Station Inc 28,946,285
Milbank, Tweed Et Al 230,000
O'Melveny & Myers LLP 200,000
Opera Solutions 200,000
Palace Station Hotel & Casino, Inc 148,792,266
Patton Boggs, LLP 100,000
Santa Fe Station Inc 418,865,401
Sc Rancho Development LLC 3,339,843
Sunset GV LLC 667,142
Sunset Station Inc 344,819,056
Town Center Amusements Inc, LLC 2,345,812
Tropicana Station Inc 10,063,738
Wachtell, Lipton, Rosen & Katz 51,415
Standard & Poor's 25,556
Sitrick And Company 30,717
Merrill Communications LLC 22,775
Harrah's Entertainment, Inc. 25,000
Others 9,331,906
*** TOTAL SCHEDULED LIABILITIES $5,594,661,369
========================================================
*** Station Casinos, Inc., listed $5,596,454,186 in total
liabilities.
Thomas M. Friel, Station Casinos' Chief Accounting Officer,
explains that while the Debtors' management has made every effort
to ensure that the Schedules of Assets and Liabilities and
Statement of Financial Affairs are accurate and complete based on
information that was available at the time of preparation,
inadvertent errors or omissions may have occurred. The Schedules
and Statements remain subject to further review and verification
by the Debtors. Subsequent information may result in material
changes in financial and other data contained in the Schedules
and Statements.
While the Debtors filed their respective bankruptcy petitions on
July 28, 2009, they did not complete a separate, corresponding
"closing" of their books and ledgers, Mr. Friel says. Except as
noted in the Schedules and Statements, all asset data is reported
as of the close of business on July 31, 2009, and all liability
data is reported as of the close of business July 28, 2009. The
Debtors believe that any financial differences arising during the
3-day period are minor and immaterial to the overall outcome of
the bankruptcy cases.
About Station Casinos
Station Casinos, Inc., is a gaming and entertainment company that
currently owns and operates nine major hotel/casino properties
(one of which is 50% owned) and eight smaller casino properties
(three of which are 50% owned), in the Las Vegas metropolitan
area, as well as manages a casino for a Native American tribe.
Station Casinos Inc., together with its affiliates, filed for
Chapter 11 on July 28, 2009 (Bankr. D. Nev. Case No. 09-52477).
Station Casinos has hired Milbank, Tweed, Hadley & McCloy LLP as
legal counsel in the Chapter 11 case; Brownstein Hyatt Farber
Schreck, LLP, as regulatory counsel; and Lewis and Roca LLP as
local counsel. The Debtor is also hiring Lazard Freres & Co. LLC
as investment banker and financial advisor. Kurtzman Carson
Consultants LLC is the claims and noticing agent.
In its bankruptcy petition, Station Casinos said that it had
assets of $5,725,001,325 against debts of $6,482,637,653 as of
June 30, 2009. About 4,378,929,997 of its liabilities constitute
unsecured or subordinated debt securities.
Bankruptcy Creditors' Service, Inc., publishes Station Casinos
Bankruptcy News. The newsletter tracks the Chapter 11 proceedings
of Station Casinos Inc. and its debtor-affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
STATION CASINOS: Statement of Financial Affairs
-----------------------------------------------
Thomas M. Friel, executive vice-president and chief accounting
officer of Station Casinos, Inc., says the company incurred
losses of $2,301,613,489 from the operation of its business
during the two years before the Petition Date:
Period Amount
------ -----------
January 2009 to July 2009 ($148,535,236)
Fiscal Year 2008 ($1,620,949,849)
Fiscal Year 2007 ($532,128,404)
SCI also disclosed that it did not earn from sources other than
the operation of its business during the two years before the
Petition Date.
SCI made payments or transfers of not less than $5,475 per
transfer totaling $167,633,494, within 90 days immediately
preceding the Petition Date. A list of the payments made is
available for free at http://bankrupt.com/misc/SCI_SOFAs_3B.pdf
SCI is a party to several lawsuits and administrative proceedings
within one year immediately preceding the Petition Date:
Suit Caption Nature Status
------------ ------ ------
0523-08-0330L Age and race Closed
Castro, Gloria vs. discrimination
Station Casinos, Inc.
0905-01-784L Sex discrimination Open
Gallo, Iris vs.
Station Casinos, Inc.
0831-07-0570L Age discrimination Closed
Flanzbaum, Benson vs.
Station Casinos, Inc
487-2008-00223 Unlawful refusal Open
Batalla, Juano vs. to hire
Station Casinos, Inc.
2:08-CV-00141-LRH-LRL Failure to pay Closed
Lukevich, Josh Scott, wages
Cathy St. Cyr, Julie
vs. Station Casinos, Inc.
A563895 Breach of Closed
Bachot, Terri vs. contract
Station Casinos, Inc.
A586246 Breach of Open
Walters Metal contract
Fabrication, Inc. dba
Dittmeier Steel Services
vs. Station Casinos, Inc.
2:08-cv-1181 Disability Open
Joseph, Michelle Discrimination
American Patriots
Advocating for Disabled
Rights vs. Station
Casinos, Inc.
2:08-cv-1189 Disability Open
Joseph, Michelle Discrimination
American Patriots
Advocating for Disabled
Rights vs. Station
Casinos, Inc.
A581232 Contract dispute Open
Clearwater Mechanical,
Inc. vs. Station
Casinos, Inc.
A-09-595614-C Failure to pay Open
Lukevich, Josh Scott, wages
Cathy St. Cyr, Julie
vs. Station Casinos, Inc.
SCV 25078 False imprisonment Open
Taylor, Lucy vs.
Station Casinos, Inc.
SCV 25237 Wrongful discharge Open
Maneri, Chai vs.
Station Casinos, Inc.
04AS04657 Sexual harassment, Closed
Medina, Corinn Wrongful termination
Dalton, Cheryl
Walden, Cynthia
Robillard, Kathy
Dillyhon, Aramissa
Webb, Elizabeth
Lyons, Sundi vs.
Station Casinos, Inc.
LC082055 False imprisonment Open
Alexander, Robert vs.
Station Casinos, Inc.
2:07-cv-1267 Disability Open
Access 4 All, Inc., discrimination
Peter Spalluto vs.
Station Casinos, Inc.
2:09-CV-0293 KJD-GWF Bondholder Closed
Murchison, Blake S. Litigation
vs. Station Casinos, Inc.
SCI gave approximately $683,000 as gifts and charitable
contributions to individuals and organizations within one year
immediately preceding the Petition Date. A list of the gifts
given is available for free at:
http://bankrupt.com/misc/SCI_SOFAs_Gifts.pdf
SCI lost $1,500,000 from employee fraud one year immediately
preceding the Petition Date.
SCI made payments of $30,397,154 to attorneys, for consultation
concerning debt consolidation, relief under the bankruptcy law or
preparation of a petition in bankruptcy within one year
immediately preceding the commencement of the Case. A list of
the payments made is available for free at:
http://bankrupt.com/misc/SCI_SOFAs_Fee.pdf
SCI made withdrawals or distributions credited or given to an
insider, totaling $2,719,806, during one year immediately
preceding the commencement of the Case. The withdrawals or
distributions are compensation in any form, bonuses, loans, stock
redemptions, options exercised and any other perquisite. A list
of the withdrawals is available for free at:
http://bankrupt.com/misc/SCI_SOFAS_Withdrawals.pdf
SCI has been responsible for contributing pension funds at any
time within six years immediately preceding the Petition Date:
* Station Casinos Inc Amended and Restated Deferred
Compensation Plan (as effective on December 31, 2008)
* Station Casinos Inc Amended and Restated Deferred
Compensation Plan (as effective on December 31, 2001)
* Station Casinos Inc & Affiliates 401(k) Plan
* Supplemental Executive Retirement Plan
* Supplemental Management Retirement Plan
Debtor FCP VoteCo, LLC, owns 100% of Station Casinos, Inc.'s
voting stocks.
About Station Casinos
Station Casinos, Inc., is a gaming and entertainment company that
currently owns and operates nine major hotel/casino properties
(one of which is 50% owned) and eight smaller casino properties
(three of which are 50% owned), in the Las Vegas metropolitan
area, as well as manages a casino for a Native American tribe.
Station Casinos Inc., together with its affiliates, filed for
Chapter 11 on July 28, 2009 (Bankr. D. Nev. Case No. 09-52477).
Station Casinos has hired Milbank, Tweed, Hadley & McCloy LLP as
legal counsel in the Chapter 11 case; Brownstein Hyatt Farber
Schreck, LLP, as regulatory counsel; and Lewis and Roca LLP as
local counsel. The Debtor is also hiring Lazard Freres & Co. LLC
as investment banker and financial advisor. Kurtzman Carson
Consultants LLC is the claims and noticing agent.
In its bankruptcy petition, Station Casinos said that it had
assets of $5,725,001,325 against debts of $6,482,637,653 as of
June 30, 2009. About 4,378,929,997 of its liabilities constitute
unsecured or subordinated debt securities.
Bankruptcy Creditors' Service, Inc., publishes Station Casinos
Bankruptcy News. The newsletter tracks the Chapter 11 proceedings
of Station Casinos Inc. and its debtor-affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
STATION CASINOS: Wants Plan Exclusivity Until March 25
------------------------------------------------------
Section 1121(b) of the Bankruptcy Code establishes an initial
period of 120 days after the commencement of a chapter 11 case
during which only a debtor may file a plan of reorganization. If
the debtor files a plan within the 120-day period, Section
1121(c)(3) extends the exclusivity period to 180 days after the
commencement of a chapter 11 case to permit the debtor to garner
support for that plan. Section 1121(d) permits a court to extend
a debtor's exclusive periods upon a demonstration of cause
subject to certain limitations.
By this motion, Station Casinos, Inc., and its debtor affiliates
ask Judge Gregg W. Zive of the United States Bankruptcy Court for
the District of Nevada to extend:
(i) their exclusive period to file a plan or plans of
reorganization through and including March 25, 2010; and
(ii) their exclusive period to solicit acceptances of that plan
through and including May 24, 2010.
Paul S. Aronzon, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in
Los Angeles, California, tells the Court that the Debtors are not
seeking extensions to delay the reorganization or pressure the
creditors to accede to a plan they find unacceptable. To the
contrary, Debtors seek the extensions to provide them with time
to reach a consensus on a confirmable plan of reorganization and
the creation of viable, sustainable reorganized debtors. The
Debtors' earnestness in this regard cannot be challenged, Mr.
Aronzon avers. Thus, at this early stage of the Chapter 11
Cases, an extension of the Exclusivity Periods will not harm or
prejudice any party in interest, Mr. Aronzon adds.
The Debtors' Chapter 11 Cases are extremely large and complex,
perhaps among the largest Chapter 11 cases ever filed in the
District of Nevada.
Viewed in relation to the size of the Chapter 11 Cases and the
complexities and challenges facing the Debtors, Mr. Aronzon says
the 120-day extensions requested are brief and designed solely to
provide the Debtors with a full and fair opportunity to formulate
and propose a viable plan of reorganization and then to solicit
acceptances thereto. He asserts that allowing Debtors to remain
in control of the plan process will enable the Debtors to fulfill
the primary objectives of Chapter 11: the formulation,
confirmation and consummation of a plan of reorganization.
According to Mr. Aronzon, the additional time requested by the
Debtors is necessary to allow the Debtors to act as an "honest
broker" among the various creditor groups. The added breathing
room, with exclusivity intact, is necessary to harmonize the
diverse and competing interests that exist among the creditor
constituencies in a reasoned and balanced manner.
In a declaration filed with the Court, Richard J. Haskins,
executive vice president, general counsel, and secretary of
Station Casinos, Inc., relates that since the Petition Date, the
Debtors have continued to operate all of their businesses and
pursue attractive development opportunities. In addition, the
Debtors have addressed the numerous administrative matters that
are attendant with their transition into operating as Chapter 11
debtors. These matters include:
* The Debtors' successful negotiation of complex consensual
cash management, cash collateral and debtor in possession
financing arrangements for the SCI Credit Facilities and
separately for the PropCo mortgage loan which in both cases
received the support of the Official Committee of Unsecured
Creditors after consultation and vigorous negotiation over a
60-day period.
* Negotiation of arrangement to assure the Debtors' directors
that they would have the benefit of prepetition
indemnification and expense reimbursement arrangements, as
well as access to independent counsel and financial
advisors, to assist them in the conduct of their duties to
the Debtors. As a result of consultation and vigorous
negotiation, these arrangements were also approved by the
Court with the consent of the Committee.
* Preparation of the 15-day information package and delivery
of same to the United States Trustee.
* Preparing and filing retention applications for
professionals and advisors.
* Arranging for immediate payment of prepetition employee wage
claims.
* Preparing for the first meeting of creditors pursuant to
Section 341(a) of the Bankruptcy Code.
* Preparing the Schedules and Statement of Affairs for each
Debtor.
* Negotiating consensual extensions of the time to assume or
reject nonresidential real property leases with the Debtors
various landlords and tenants.
* Continuous formal and informal contacts with all of the
major creditor constituencies with respect to plan
formulation.
The Court will consider the Exclusivity Motion on November 20,
2009, at 10:00 a.m. Objections are due on November 13, 2009.
About Station Casinos
Station Casinos, Inc., is a gaming and entertainment company that
currently owns and operates nine major hotel/casino properties
(one of which is 50% owned) and eight smaller casino properties
(three of which are 50% owned), in the Las Vegas metropolitan
area, as well as manages a casino for a Native American tribe.
Station Casinos Inc., together with its affiliates, filed for
Chapter 11 on July 28, 2009 (Bankr. D. Nev. Case No. 09-52477).
Station Casinos has hired Milbank, Tweed, Hadley & McCloy LLP as
legal counsel in the Chapter 11 case; Brownstein Hyatt Farber
Schreck, LLP, as regulatory counsel; and Lewis and Roca LLP as
local counsel. The Debtor is also hiring Lazard Freres & Co. LLC
as investment banker and financial advisor. Kurtzman Carson
Consultants LLC is the claims and noticing agent.
In its bankruptcy petition, Station Casinos said that it had
assets of $5,725,001,325 against debts of $6,482,637,653 as of
June 30, 2009. About 4,378,929,997 of its liabilities constitute
unsecured or subordinated debt securities.
Bankruptcy Creditors' Service, Inc., publishes Station Casinos
Bankruptcy News. The newsletter tracks the Chapter 11 proceedings
of Station Casinos Inc. and its debtor-affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
STERLING MINING: Alberta Star Deal Requires Plan by Dec. 15
-----------------------------------------------------------
Alberta Star previously filed a "Notice of Appearance and Request
for Special Notice" with the United States Bankruptcy Court for
the District of Idaho, U.S.A. regarding Sterling. Since the
filing of the Notice, Alberta has monitored the bankruptcy
proceedings of Sterling Mining Comopany and pursued various
financing options with Sterling, which has resulted in the
Agreement which would allow Alberta to gain control of Sterling
and its assets. The Agreement contains a number of conditions
precedent to the obligations of the parties. Unless all of such
conditions are satisfied or waived by the party for whose benefit
such conditions exist, to the extent that they may be capable of
waiver, the proposed transaction will not proceed. The proposed
transaction has not been approved by the TSX Venture Exchange and
remains subject to Exchange approval.
The Agreement provides that Sterling must make an application for
reorganization to the Court on or before December 15, 2009 and
receive an Order confirming the Plan on or before February 28,
2010, staying all claims and actions against Sterling and its
assets and whereby the Company will acquire not less than 90% of
the issued and outstanding common shares of Sterling, on a fully
diluted basis, in exchange for $10.5 million. In addition, the
Company has agreed to make available up to $1,250,000 ($250,000
per month) in interim term debtor-in-possession financing to
Sterling, which amount will bear interest at a rate of 10% per
annum, bringing the total value of the agreement to
$11.75 million. The Agreement prohibits Sterling from soliciting
or initiating any discussion regarding any other business
combination or sale of material assets, contains provisions for
the Company to match competing, unsolicited proposals and provides
for a $250,000 termination fee payable to the Company in certain
circumstances.
It is Alberta's objective, subject to Court and Exchange approval,
to acquire at least 90% of the outstanding Sterling shares, and
for Sterling to exit the Chapter 11 process with the following
assets in place: its interest in the Sunshine Mine, facilities,
and lease, and exploration interest in the Sterling exploration
projects in Idaho. In addition, the Company upon meeting of the
above referenced conditions, including the confirmation of a
Chapter 11 Plan, will reconstitute the Sterling Board of Directors
and make additions to senior management of Sterling.
Alberta believes that the proposed acquisition of Sterling
represents a significant opportunity for the Company to become a
near-term, mid-tier silver producer.
Alberta says it maintains a strong balance sheet and has no long
term debt. The Company continues to maintain seasoned and
qualified management and seeks to fulfill its stated mandate of
acquiring world class advanced stage exploration and production
projects.
The Sunshine Mine
The Sunshine Mine located near Coeur d'Alene, Idaho, U.S.A. has
been one of the world's largest producers of silver, having
recorded production of over 360,000,000 ounces of silver since
1904. A 2007 Canadian "National Instrument 43-101 - Standards of
Disclosure for Mineral Projects" report by Behre Dolbear & Company
estimated remaining resources as follows: Measured and Indicated
resources of 31.51 million ounces of silver in 1.43 million tons
at 21.8 ounces of silver per ton; Inferred resources of
231.5 million ounces of silver in 2.28 million tons at 101.6
ounces of silver per ton. The Behre Dolbear & Co. National
Instrument 43-101 report is considered historic in nature and is
used to illustrate the ongoing resource potential of the Sunshine
Mine. The Report can be found on file under Sterling's profile
with the U.S. Securities and Exchange Commission and available in
Canada at http://www.sedar.com.
About Alberta Star
Alberta Star is a Canadian mineral exploration company that
identifies, acquires and finances advanced stage mineral
exploration projects in North America. The Company is committed
to creating long term shareholder value through the discovery of
base and precious metals.
Allan Feldman
Investor Relations specialist
(604) 948-9663,
Morgan Brewster,
Corporate Development,
(778) 989-2739,
mbrewster@alberta-star.com
Andrew Mugridge
Progressive Investor Relations
(604) 689-2881.
About Sterling Mining
Based in Coeur d'Alene, Idaho, Sterling Mining Company (OTCBB:SRLM
and FSE:SMX) -- http://www.SterlingMining.com/-- is a mineral
resource development and exploration company. The company has a
long term lease on the Sunshine Mine in North Idaho's Coeur
d'Alene Mining District. The Sunshine Mine is comprised of 5,930
patented and unpatented acres, and historically produced over
360 million ounces of silver from 1884 until its closure in early
2001. Sterling Mining leased the Sunshine Mine in June 2003,
along with a mill, extensive mining infrastructure and equipment,
a large land package, and a database encompassing a long history
of exploration, development and production.
As of September 30, 2008, Sterling Mining had $31.9 million in
total assets, and $13.2 million in total current liabilities and
$1.6 million in total long-term liabilities. In its schedules,
the Debtor listed total assets of $11,706,761 and total debts of
$14,159,010.
Sterling Mining filed for bankruptcy protection on March 3, 2009
(Bankr. D. Idaho Case No. 09-20178). Bruce A. Anderson, Esq., at
Elsaesser Jarzabek Anderson Marks Elliott & McHugh, Chartered
represents the Debtor as counsel.
STERLING WH COMPANY: Case Summary & 8 Largest Unsec. Creditors
--------------------------------------------------------------
Debtor: Sterling WH Company, LLC
pka Federal Bakers Investment, LLC
45201 Global Plaza
Sterling, VA 20166
Bankruptcy Case No.: 09-18914
Chapter 11 Petition Date: October 29, 2009
Court: United States Bankruptcy Court
Eastern District of Virginia (Alexandria)
Judge: Robert G. Mayer
Debtor's Counsel: Christopher L. Rogan, Esq.
RoganLawFirm, PLLC
30-D Catoctin Circle, S.E.
Leesburg, VA 20175
Tel: (703) 771-9191
Fax: (703) 771-9797
Email: crogan@roganfirm.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
According to the schedules, the Company has assets of at least
$5,274,843, and total debts of $9,337,062.
A full-text copy of the Debtor's petition, including a list of its
8 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/vaeb09-18914.pdf
The petition was signed by Mansour Yazdani, managing
member/president of the Company.
TARRAGON CORP: 800 Madison Can Access BofA's Cash Collateral
------------------------------------------------------------
The U.S. Bankruptcy Court for the District of New Jersey
authorized on a final basis, 800 Madison Street Urban Renewal,
LLC, a debtor-affiliate of Tarragon Corporation, to:
-- use cash securing repayment of loan with Bank of America,
N.A.; and
-- grant adequate protection to BofA.
BofA holds validly perfected and enforceable liens as acknowledged
in the settlement agreement dated Aug. 20, 2009.
800 Madison asserts it does not have sufficient unencumbered cash
or other assets with which to continue to manage its properties in
Chapter 11 without the use of BofA's cash collateral.
As adequate protection, the lender is granted: (i) a replacement
perfected security interest in the postpetition collateral and
proceeds thereof, including funds in the new bank account, as the
lender held in the prepetition collateral; and (ii) an allowed
superpriority administrative claim and all rights and benefits.
In the event that Bermuda Island defaults under or violates this
order, the lender may request a hearing within 10 days.
About Tarragon Corporation
Based in New York City, Tarragon Corporation (NasdaqGS:TARR) --
http://www.tarragoncorp.com/-- is a leading developer of
multifamily housing for rent and for sale. Tarragon's operations
are concentrated in the Northeast, Florida, Texas, and Tennessee.
Tarragon and its affiliates filed for Chapter 11 protection on
January 12, 2009 (Bankr. D. N.J. Case No. 09-10555). The Hon.
Donald H. Steckroth presides over the case.
Michael D. Sirota, Esq., Warren A. Usatine, Esq., and Felice R.
Yudkin, Esq., at Cole Schotz Meisel Forman & Leonard, P.A.
THOMAS EGGETT: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Thomas J. Eggett
451 Berwick Circle
Aurora, OH 44202
Bankruptcy Case No.: 09-55033
Chapter 11 Petition Date: November 1, 2009
Court: United States Bankruptcy Court
Northern District of Ohio (Akron)
Judge: Marilyn Shea-Stonum
Debtor's Counsel: Steven S. Davis, Esq.
1370 Ontario, Standard Bldg, Suite #450
Cleveland, OH 44113-1744
Tel: (216) 781-7272
Fax: (216) 781-3312
Email: sdavis@epitrustee.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
According to the schedules, the Company has assets of at least
$2,732,100, and total debts of $1,906,612.
A full-text copy of Mr. Eggett's petition, including a list of his
20 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/ohnb09-55033.pdf
The petition was signed by Mr. Eggett.
THORNBURG MORTGAGE: Joel Sher Appointed as Chapter 11 Trustee
-------------------------------------------------------------
TMST, Inc., formerly known as Thornburg Mortgage, Inc., reports
that on October 28, 2009, the United States Bankruptcy Court for
the District of Maryland entered an order approving the
appointment of Joel I. Sher as the Chapter 11 Trustee for the
Company, TMST Acquisition Subsidiary, Inc., TMST Home Loans, Inc.
and TMST Hedging Strategies, Inc.
As reported by the Troubled Company Reporter on Friday, the Court
on October 23 ordered that a Chapter 11 Trustee be appointed for
the Company, TMST Acquisition Subsidiary and TMST Home Loans. On
October 26, the Court ordered that a Chapter 11 Trustee be
appointed for TMST Hedging Strategies.
In open court, on October 21, 2009, the U.S. Trustee withdrew its
motion that a Chapter 11 Trustee be appointed for ADFITECH, Inc.,
a subsidiary of the Company.
Anne-Drue M. Anderson, David A. Ater, Francis I. Mullin, III,
Eliot R. Cutler and Thomas F. Cooley submitted their resignations
as directors of TMST dated October 23, 2009, October 23, 2009,
October 24, 2009, October 25, 2009, and October 26, 2009,
respectively. Ms. Anderson also submitted her resignation as the
President of the Company. On October 26, Ms. Anderson submitted
her resignation as a director of ADFITECH. The resignations were
to be effective upon the appointment of a Chapter 11 Trustee for
the Company.
About Thornburg Mortgage
Based in Santa Fe, New Mexico, Thornburg Mortgage Inc. (NYSE: TMA)
-- http://www.thornburgmortgage.com/-- was a single-family
residential mortgage lender focused principally on prime and
super-prime borrowers seeking jumbo and super-jumbo adjustable
rate mortgages. It originated, acquired, and retained investments
in adjustable and variable rate mortgage assets. Its ARM assets
comprised of purchased ARM assets and ARM loans, including
traditional ARM assets and hybrid ARM assets.
Thornburg Mortgage, Inc., and its four affiliates filed for
Chapter 11 on May 1 (Bankr. D. Md. Lead Case No. 09-17787). Judge
Duncan W. Keir is handling the case.
David E. Rice, Esq., at Venable LLP, in Baltimore, Maryland, has
been tapped as counsel. Orrick, Herrington & Sutcliffe LLP is
employed as special counsel. Jim Murray, and David Hilty, at
Houlihan Lokey Howard & Zukin Capital, Inc., have been tapped as
investment banker and financial advisor. Protiviti Inc. has also
been engaged for financial advisory services. KPMG LLP is the tax
consultant. Epiq Systems, Inc., is claims and noticing agent. In
its bankruptcy petition, Thornburg listed total assets of
$24,400,000,000 and total debts of $24,700,000,000, as of
January 31, 2009.
TPF GENERATION: S&P Gives Negative Outlook, Affirms 'BB' Rating
---------------------------------------------------------------
Standard & Poor's Ratings Services revised the outlook on TPF
Generation Holdings Inc.'s $850 million first-lien term loan and
related senior secured facilities and $495 million second-lien
term loan to negative from stable. At the same time, S&P affirmed
the 'BB' rating on first-lien debt and the 'B+' rating on the
second-lien debt. The recovery ratings on both tranches remain at
'1' and '4', indicating expectations of very high recovery (90%-
100%) and average recovery (30%-50%), respectively, in the event
of a payment default.
The outlook revision stems mainly from increased concerns that a
potential reduction in cash flows following the Dec. 31, 2013
maturity of the first-lien facilities may result if prices in the
PJM Interconnection's capacity markets remain soft for the
delivery years that occur after 2013. A lesser, though existing,
concern is the observed decline in spark spreads for the merchant
peakers of TPF Generation's portfolio; rolling annual average
energy margins have declined in the last six months due to mild
weather and declining natural gas prices.
TRENTON RIDGE: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Trenton Ridge Investors, LLC
c/o Spectrum Capital
454 East Main Street, Suite 215
Columbus, OH 43215
Bankruptcy Case No.: 09-62570
Chapter 11 Petition Date: October 28, 2009
Court: United States Bankruptcy Court
Southern District of Ohio (Columbus)
Judge: John E. Hoffman Jr.
Debtor's Counsel: Thomas R. Allen, Esq.
Allen Kuehnle Stovall & Neuman LLP
17 South High Street, Suite 1220
Columbus, OH 43215
Tel: (614) 221-8500
Fax: (614) 221-5988
Email: allen@aksnlaw.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
A full-text copy of the Debtor's petition, including a list of its
20 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/ohsb09-62570.pdf
The petition was signed by John R. Davis, co-manager of the
Company.
TRONOX INC: Antitrust Waiting Period Ends for Huntsman Purchase
---------------------------------------------------------------
Huntsman Corporation disclosed that the waiting period under the
Hart-Scott-Rodino Antitrust Improvements Act has expired, which is
a requirement to close on the asset and equity purchase agreement
pursuant to which its wholly-owned subsidiary, Huntsman Pigments
LLC, has agreed to acquire certain assets of Tronox and its
subsidiaries under Section 363 of Chapter 11 of the U.S.
Bankruptcy Code for $415 million, including working capital.
Peter Huntsman, President and CEO of Huntsman Corporation, stated:
"We are pleased with the favorable outcome of FTC's review and
that our agreement with Tronox can move quickly to closing upon
successful conclusion of the auction process, which we believe
will be received favorably by the customers, vendors, employees
and other stakeholders of the combined business."
Huntsman and Tronox continue to work towards completion of
comparable approval processes in other jurisdictions.
Tronox and certain of the company's subsidiaries filed voluntary
petitions for reorganization under Chapter 11 of the U.S.
Bankruptcy Code on January 12, 2009. Huntsman subsequently signed
an asset and equity purchase agreement with Tronox to become a
"stalking horse" bidder for certain of the company's assets. A
stalking horse bid is a binding proposal for a bankrupt company's
assets from an interested buyer chosen by the bankrupt company,
subject to a higher offer through an auction process approved by
the bankruptcy court. If Huntsman is ultimately approved by the
bankruptcy court as the buyer and the sale is approved, Huntsman's
completion of the proposed acquisition of the assets of Tronox as
agreed remains subject to customary antitrust and other regulatory
approvals.
About Huntsman
Huntsman -- http://www.huntsman.com/-- is a global manufacturer
and marketer of differentiated chemicals. Its operating companies
manufacture products for a variety of global industries, including
chemicals, plastics, automotive, aviation, textiles, footwear,
paints and coatings, construction, technology, agriculture, health
care, detergent, personal care, furniture, appliances and
packaging. Originally known for pioneering innovations in
packaging and, later, for rapid and integrated growth in
petrochemicals, Huntsman today has more than 12,000 employees and
operates from multiple locations worldwide. The Company had 2008
revenues exceeding US$10 billion.
About Tronox Inc.
Tronox Inc., aka New-Co Chemical, Inc., and 14 other affiliates
filed for Chapter 11 protection on January 13, 2009 (Bankr.
S.D.N.Y. Case No. 09-10156). The case is before Hon. Allan L.
Gropper. Richard M. Cieri, Esq., Jonathan S. Henes, Esq., and
Colin M. Adams, Esq., at Kirkland & Ellis LLP in New York,
represent the Debtors. The Debtors also tapped Togut, Segal &
Segal LLP as conflicts counsel; Rothschild Inc. as investment
bankers; Alvarez & Marsal North America LLC, as restructuring
consultants; and Kurtzman Carson Consultants serves as notice and
claims agent.
An official committee of unsecured creditors and an official
committee of equity security holders have been appointed in the
cases. The Creditors Committee has retained Paul, Weiss, Rifkind,
Wharton & Garrison LLP as counsel.
Until September 30, 2008, Tronox Inc. was publicly traded on the
New York Stock Exchange under the symbols TRX and TRX.B. Since
then, Tronox Inc. has traded on the Over the Counter Bulletin
Board under the symbols TROX.A.PK and TROX.B.PK. As of
December 31, 2008, Tronox Inc. had 19,107,367 outstanding shares
of class A common stock and 22,889,431 outstanding shares of class
B common stock.
Bankruptcy Creditors' Service, Inc., publishes Tronox Bankruptcy
News. The newsletter tracks the Chapter 11 proceeding undertaken
by Tronox Inc. and its 14 affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
UNISYS CORP: Reports $61.1 Million Third-Quarter 2009 Net Income
----------------------------------------------------------------
Unisys Corporation reported third-quarter 2009 net income of $61.1
million, or $1.48 per diluted share, compared with a net loss of
$34.7 million, or a loss of $.96 per diluted share, in the third
quarter of 2008. The earnings per share amounts reflect the
company's reverse stock split. The company's revenue declined 12%
to $1.16 billion compared with revenue of $1.31 billion in the
year-ago quarter. Foreign exchange rates had an roughly 5
percentage-point negative impact on revenue in the quarter. On a
constant currency basis, revenue declined 7 percent.
"We continue to make progress in our turnaround program," said
Unisys Chairman and CEO Ed Coleman. "For the second consecutive
quarter, the company was solidly profitable at the bottom line.
Driven by a more cost-efficient services business and a strong
profit performance in our technology business, we tripled our
operating income over the year-ago quarter and achieved an
operating profit margin of 10.2 percent in the quarter. We also
met a key goal of generating free cash flow in the quarter, and we
are now free cash flow positive for the first nine months of 2009.
"I'm pleased by the improvement we're seeing, particularly given
the difficult economic environment in which we've been operating
this year," Mr. Coleman said. "While we have a great deal of work
to do, these are positive signs that our turnaround is working."
Mr. Coleman also cited progress in strengthening the company's
balance sheet. During the quarter Unisys successfully completed
private offers to exchange unsecured senior notes for secured
senior notes, cash and Unisys common stock. As a result of the
exchange, the company reduced its long-term debt and cut its 2010
debt maturities to $66 million.
Cash Flow and Balance Sheet Highlights
Unisys generated $94 million of cash from operations in the
quarter compared with $114 million in the year-ago quarter, which
benefited from a significant sequential improvement in days of
sales outstanding (DSO). The company has continued to maintain
the improved levels of DSO. Capital expenditures in the third
quarter of 2009 declined to $48 million compared to $78 million in
the year-ago quarter as the company continued to tightly focus its
investments. After capital expenditures, the company generated
$46 million of free cash flow in the quarter. At September 30,
2009, Unisys reported $474 million of cash on hand.
At September 30, 2009, the Company had total assets of $2.741
billion against total current liabilities of $1.305 billion, long-
term debt of $845.0 million, long-term postretirement liabilities
of $1.410 billion, and other long-term liabilities of $325.4
million, resulting in stockholders' deficit of $1.145 billion.
On July 31, 2009, the company completed its private debt exchange
offers for the exchange of an aggregate $760.4 million of
unsecured senior notes for an aggregate $631.6 million of secured
senior notes along with $30 million of cash and 5.2 million shares
of Unisys common stock (adjusted for the reverse stock split).
The exchange offers reduced the company's overall long-term debt
at September 30, 2009 to $911 million and increased shares
outstanding to 42.3 million shares (adjusted for the reverse stock
split).
On October 14, Unisys filed prospectus supplement no. 1, which
supplements the prospectus filed by the Company on September 14,
2009, relating to the resale from time to time by selling
stockholders of the shares of common stock that the Company issued
on July 31, 2009 in private offers to exchange certain of the
Company's existing senior notes for a combination of new secured
notes, shares of common stock and cash. The information in the
prospectus supplement no. 1 does not give effect to the one-for-
ten reverse stock split of the Company's common stock.
A full-text copy of the prospectus supplement is available at no
charge at http://ResearchArchives.com/t/s?481a
Subsequent to September 30, the Unisys Board of Directors approved
a reverse stock split of the company's common stock at a ratio of
one for ten.
The reverse stock split, which was authorized by the company's
shareholders at the company's annual meeting in May, became
effective after the close of the market on October 23. Unisys
shares began trading on a post-split basis on October 26. The
reverse stock split automatically combines every 10 shares of
Unisys common stock into one share of common stock. As of October
23, there were roughly 423 million shares of Unisys common stock
outstanding. After giving effect to the reverse stock split,
there are roughly 42.3 million shares outstanding. No fractional
shares will be issued in connection with the reverse stock split.
Instead, the company's transfer agent will aggregate all of the
fractional shares that otherwise would have been issued as a
result of the reverse stock split and sell those shares.
Stockholders who would otherwise hold a fractional share of the
company's common stock will receive a cash payment in lieu of such
fractional share equal to their pro rata share of the proceeds
received by the transfer agent.
Also on October 23, Unisys filed a Certificate of Amendment to the
Company's Restated Certificate of Incorporation with the Secretary
of State of Delaware to effect the Reverse Stock Split.
A full-text copy of Unisys' quarterly report on Form 10-Q is
available at no charge at http://ResearchArchives.com/t/s?481b
About Unisys
Based in Blue Bell, Pennsylvania, Unisys Corporation (NYSE: UIS)
-- http://www.unisys.com/-- provides a portfolio of IT services,
software, and technology that solves critical problems for
clients. With more than 26,000 employees, Unisys serves
commercial organizations and government agencies throughout the
world.
VALASSIS COMMUNICATIONS: S&P Raises Corp. Credit Rating to 'B+'
---------------------------------------------------------------
Standard & Poor's Ratings Services raised its corporate credit
rating on Livonia, Michigan-based Valassis Communications Inc. to
'B+' from 'B'. The rating outlook is stable.
S&P also raised all issue-level ratings on the company's debt by
one notch in conjunction with the corporate credit rating upgrade.
S&P's recovery ratings on the debt issues remain unchanged.
The ratings upgrade reflects S&P's expectation that credit
measures for Valassis will remain in line with the 'B+' rating
over the intermediate term.
"At September 2009, S&P's measure of leverage, adjusted for
operating leases and noncash stock compensation, was 4.7x, down
from 6.2x at December 2008," noted Standard & Poor's credit
analyst Liz Fairbanks. "Adjusted EBITDA coverage of interest was
about 2.6x."
The decline in leverage is due to an 18% increase in reported
EBITDA for the nine months ended September 2009 and a $150 million
reduction in balance sheet debt. S&P expects leverage to further
improve to about 4.3x by December due to additional debt repayment
and continued EBITDA growth in the fourth quarter. Profitability
in the company's shared mail division has exhibited a high degree
of volatility throughout the current recession. While S&P
believes a large swing in shared mail profitability could recur,
S&P's rating incorporates S&P's expectation that leverage will
remain below 5x, which is its threshold for Valassis at the 'B+'
rating.
Throughout the current recession, Valassis' business segments have
demonstrated significant volatility. The company experienced a
precipitous drop in EBITDA of 51% in the third quarter of 2008,
resulting primarily from a 33% decline in shared mail EBITDA.
Following the drop in EBITDA, management announced several cost-
cutting measures, including a $15 million reduction in headcount;
a $10 million reduction in other selling, general, and
administrative (SG&A) expenses; and $26 million savings related to
production costs (primarily paper costs). In addition, the
company expected to yield about $6.5 million in cost savings from
shutting down underperforming business segments, including its
operations in France, which were sold in the third quarter of 2008
for about $3.6 million. In addition, management announced on its
July 30 earnings call that it expects to save an additional
$20 million to $25 million through cost-cutting measures in 2009.
While revenue in the first nine months of 2009 performed close to
S&P's previous expectations, the company more than offset the 6.6%
total revenue decline through the aforementioned cost-cutting
measures, resulting in EBITDA growth of 18% over the previous
year. Yesterday, management raised its full-year EBITDA guidance
upward for the second time this year, to a range of $255 million
to $265 million from a previous level of $215 million. Given the
company's continued focus on cost management, S&P expects EBITDA
to be flat or even grow in the first half of 2010, even if revenue
declines in the low-single-digit area. While S&P's current full-
year expectation is for 2010 EBITDA to remain flat, the 'B+'
corporate credit rating incorporates a degree of profit
volatility.
VELOCITY EXPRESS: Court OKs $14MM DIP Loan from Burdale Capital
---------------------------------------------------------------
The Hon. Mary F. Walrath of the U.S. Bankruptcy Court for the
District of Delaware authorized Velocity Express Inc. and its
debtor-affiliates to:
-- obtain $14 million postpetition financing from Burdale
Capital Finance, Inc., as administrative agent and lender;
-- use cash collateral; and
-- grant adequate protection to the prepetition lender,
Wilmington Trust Company, in its capacity as trustee for the
holders of the notes issued under the indenture, and ComVest
Investment Partners III, LLP, as guarantor.
As of the petition date, the Debtors are liable for:
-- payment of the prepetition debt amounting to $8,008,205,
exclusive of accrued and accruing allowable amounts; and
-- payment of subordinated note indebtedness amounting to
$102,000,000, exclusive of accrued and accruing allowable
amounts.
As reported in the Troubled Company Reporter on Oct. 6, 2009,
The Debtors will use the loan to fund their business during
their Chapter 11 cases pending the sale of substantially all of
their assets.
The facility will incur interest at a per annum rate equal to the
"base rate" plus 6% per annum. The base rate will be subject to a
floor of 4% per annum.
The Debtors agreed to pay $175,000 in closing fee to the lender.
The DIP facility is subject to a $25,000 carve-out to pay fees
incurred by professionals employed by the Debtors.
The prepetition agent, lender, subordinated note trustee, and
subordinated noteholders have consented to the use of cash
collateral.
The Debtors are also authorized to use cash collateral of the
prepetition lender and noteholders.
The lender will be granted superpriority administrative expense
status with priority over all costs and expenses of administration
of the cases.
The postpetition debt will mature and be due and payable in full
by the Debtors on the Termination Date.
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.
WAIGHTSTILL MOUNTAIN: Case Summary & 3 Largest Unsecured Creditors
------------------------------------------------------------------
Debtor: Waightstill Mountain, LLC
39 Orange Street
Asheville, NC 28801
Case No.: 09-11197
Chapter 11 Petition Date: October 29, 2009
Court: United States Bankruptcy Court
Western District of North Carolina (Asheville)
Judge: George R. Hodges
Debtor's Counsel: Gene B. Johnson, Esq.
Johnson Law Firm, P.A.
PO Box 1288
Arden, NC 28704
Tel: (828) 650-0859
Fax: (828) 650-0913
Email: gbj@johnsonlawnc.com
Estimated Assets: $10,000,001 to $50,000,000
Estimated Debts: $1,000,001 to $10,000,000
According to the schedules, the Company has assets of at least
$11,001,599, and total debts of $8,989,685.
The petition was signed by Keith A. Vinson.
Debtor's List of 3 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Clark & Co. $1,409
Landmark Landscapes $32,950
Tennoca Construction $235,325
Company
PO Box 2379
Candler, NC 28715
WILLIAM LYON: S&P Downgrades Rating on Senior Notes to 'D'
----------------------------------------------------------
Standard & Poor's Ratings Services lowered its issue rating on
William Lyon Homes' senior unsecured notes to 'D' from 'CC'. S&P
also revised its recovery rating to '6', which indicates its
expectation for negligible (0%-10%) recovery, from '5', which
indicated S&P's expectation for a modest (10%-30%) recovery. At
the same time, S&P placed its 'CCC-' corporate credit rating on
this privately held homebuilder on CreditWatch with positive
implications.
"S&P lowered its rating on William Lyon's senior unsecured notes
after the Newport Beach, Calif.-based homebuilder repurchased
certain of its notes at a large discount to their face value,
which S&P viewed as tantamount to default under its criteria for
exchange offers and similar restructurings," said credit analyst
James Fielding. "S&P revised its recovery rating because the
company obtained a new secured loan commitment that could diminish
the recovery prospects for unsecured creditors. However, the new
loan bolsters liquidity, in S&P's view, and it appears that
several of the company's key housing markets are firming."
S&P will resolve its CreditWatch placement after the company
releases its third-quarter earnings and after we've had the
opportunity to discuss near-term capital plans with this privately
held company's management team. S&P would raise its corporate
credit rating one notch, to 'CCC', if the company appears likely
to maintain capacity to repay its near-term obligations and
indicates that operating pressures continued to ease in the third
quarter. However, S&P will maintain its 'D' ratings on the notes
until S&P is reasonably comfortable that additional discounted
repurchases are unlikely.
WINTHROP LOCKWOOD: Voluntary Chapter 11 Case Summary
----------------------------------------------------
Debtor: Winthrop C. Lockwood
mem Breckenridge Professional Bldg, LLC
ods Lockwood Associates, Inc.
dba Trustee of Winthrop C. Lockwood, Jr.,
1972 Revocable Trust
mem Wood and Company, LLC
ods Mt. Helen Corporation
130 Ski Hill Road, #200
PO Box 2177
Breckenridge, CO 80424
Bankruptcy Case No.: 09-33026
Chapter 11 Petition Date: October 29, 2009
Court: United States Bankruptcy Court
District of Colorado (Denver)
Judge: Sidney B. Brooks
Debtor's Counsel: F. Kelly Smith, Esq.
216 16th St., Suite 1210
Denver, CO 80202
Tel: (303) 592-1650
Fax: (303) 592-1701
Email: fkellysmith@tde.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
The Debtor did not file a list of its 20 largest unsecured
creditors when it filed its petition.
The petition was signed by Mr. Lockwood.
WOODBINE FAMILY: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: Woodbine Family Worship Center and Christian School, Inc.
12914 Canova Drive
Manassas, VA 20112
Bankruptcy Case No.: 09-18883
Chapter 11 Petition Date: October 28, 2009
Court: United States Bankruptcy Court
Eastern District of Virginia (Alexandria)
Judge: Robert G. Mayer
Debtor's Counsel: Thomas O. Murphy, Esq.
8709 Plantation Lane
Manasas, VA 20110-4506
Tel: (703) 361-6116
Fax: (703) 368-1483
Email: t.murphy@verizon.net
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
A full-text copy of the Debtor's petition, including a list of its
20 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/vaeb09-18883.pdf
The petition was signed by Gene Wells, president of the Company.
W.R. GRACE: Settles Austin's $2.5MM Remediation Claim
-----------------------------------------------------
W.R. Grace & Co., Inc., and its units ask the Court to approve a
stipulation they entered into with Austin Quality Foods, Inc., to
resolve Austin's Claim No. 13652, which relates to the Debtors'
obligations arising from environmental contamination at a property
in Cary, North Carolina. The Site was subject to remediation,
pursuant to a Letter of Understanding and Agreement between the
Debtors and Austin in June 1999.
Specifically, Claim No. 13652 is an unsecured, non-priority claim
arising from environmental response costs with respect to Austin's
remediation of the Site. Austin asserts a contingent,
unliquidated amount.
According to Laura Davis Jones, Esq., at Pachulski Stang Ziehl &
Jones LLP, in Wilmington, Delaware, Austin initially proposed a
settlement of $9.63 million to be allocated equally between the
Debtors and Austin. However, the Debtors disputed the assumptions
and methodology employed by Austin in calculating the Settlement
Proposal.
Subsequent to negotiations, the Debtors and Austin reached a
Stipulation in July 2009, which provides that:
(1) Claim No. 13652 will be allowed as an unsecured,
prepetition, non-priority claim for $2,558,000, and all
remaining amounts outlined in or relating to the Claim
will be disallowed and expunged.
(2) Claim no. 13652 will be paid in the same manner as all
other similarly situated general unsecured claims pursuant
to the Debtors' First Amended Plan of Reorganization,
except with respect to the payment of interest.
(3) Austin will not be entitled to pre- or postpetition
interest on Claim No. 13652 with respect to any period
prior to the effective date of the Plan.
According to Ms. Jones, the Debtors' environmental experts believe
that the Settlement amount of $2,558,000 is fair and reasonable.
Accordingly, the Stipulation is within range of litigation
possibilities.
Approval of the Stipulation benefits the public because it will
support the remediation of the Site and provide additional funding
for Austin to complete the Remediation, Ms. Jones emphasizes.
About W.R. Grace
Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA)
-- http://www.grace.com/-- supplies catalysts and silica
products, especially construction chemicals and building
materials, and container products globally.
The Company and its debtor-affiliates filed for Chapter 11
protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139).
David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura
Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP,
represent the Debtors in their restructuring efforts. The Debtors
hired Blackstone Group, L.P., for financial advice.
PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock &
Stroock & Lavan, LLP, and Duane Morris, LLP, represent the
Official Committee of Unsecured Creditors. The Creditors
Committee tapped Capstone Corporate Recovery LLC for financial
advice. David T. Austern, the legal representative of future
asbestos personal injury claimants, is represented by Orrick
Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA.
Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla
R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official
Committee of Asbestos Personal Injury Claimants. The Asbestos
Committee of Property Damage Claimants tapped Scott Baena, Esq.,
and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod,
LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin
Naftalis & Frankel, LLP, represents the Official Committee of
Equity Security Holders.
W.R. Grace and its debtor affiliates, with the support of the
Official Committee of Asbestos Personal Injury Claimants, the
Asbestos PI Future Claimants' Representative and the Official
Committee of Equity Security Holders, have submitted a proposed
Chapter 11 plan of reorganization. The Chapter 11 plan is built
around an April 2008 settlement for all present and future
asbestos personal injury claims, and a subsequent settlement for
asbestos property damage claims. The Plan confirmation hearing is
scheduled to continue on October 13 and 14.
Bankruptcy Creditors' Service, Inc., publishes W.R. Grace
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their
affiliates. (http://bankrupt.com/newsstand/or 215/945-7000)
YRC WORLDWIDE: Fitch Downgrades Issuer Default Rating to 'C'
------------------------------------------------------------
Fitch Ratings has taken these actions on the ratings of YRC
Worldwide Inc. and its YRC Regional Transportation, Inc.
subsidiary:
YRC Worldwide Inc.
-- Issuer Default Rating downgraded to 'C' from 'CC';
-- Secured credit facilities downgraded to 'CCC/RR2' from 'B-
/RR2';
-- Senior unsecured affirmed at 'C/RR6'.
YRC Regional Transportation, Inc. (formerly known as USF
Corporation)
-- IDR downgraded to 'C' from 'CC';
-- Senior secured notes affirmed at 'C/RR6'.
Fitch's ratings apply to approximately $537 million in notes, a
$111.5 million secured term loan and a $950 million secured
revolving credit facility.
The downgrade of YRCW's IDR to 'C' from 'CC' follows the
announcement that the company intends to make an offer to holders
of YRC Regional Transportation's notes (known as the USF notes),
as well as holders of YRCW's contingent convertible senior notes,
to exchange the notes for shares of YRCW common stock.
The company's announcement of the proposed debt exchange was made
in conjunction with an announcement that the company has entered
into amendments to its secured credit facility and its asset
backed securitization facility. The credit facility and ABS
facility amendments are contingent upon the company exchanging at
least 95% of each of the USF notes and the contingent convertible
senior notes into shares of YRCW stock on or before Dec. 16, 2009.
The amendments have modified a number of the terms in both
agreements. The most critical changes, however, include a
deferral of most of the credit facility's interest and fee
payments through Dec. 31, 2010 (or through Dec. 31, 2011, with
agreement from two-thirds of the lenders in the agreement), as
well as a modification of certain covenants. The covenant
modifications include the suspension of the minimum EBITDA
covenants until June 30, 2010 (and a modification of the minimum
required EBITDA levels thereafter), as well as the deletion of the
leverage and coverage ratio covenants that would have been
effective in the first quarter of 2011. In addition, the credit
facility amendment moves the date that company's $950 million
revolving credit agreement is permanently reduced by the revolver
reserve amount, which stood at $106 million on Sept. 30, 2009, to
Jan. 1, 2012. However, if the debt exchange is not successful,
the date that the revolver availability would be reduced by the
revolver reserve amount is Dec. 16, 2009.
The ABS facility amendments moved the expiration date of the
agreement to Oct. 26, 2010, from Feb. 11, 2010, and reduced the
commitment limit of the facility to $400 million from $500 million
(as well as reducing the letter of credit sublimit to $84 million
from $105 million). In addition, the $10 million fee that was due
to the ABS facility lenders has been moved to Oct. 26, 2010, and,
similar to the credit facility amendment, most other interest and
fee payments have been deferred, as well.
Because the amendments are effective only upon completion of the
debt for equity exchange, and due to the high probability that
YRCW's liquidity position could not support paying its near-term
obligations on the USF notes (which mature in April 2010) and the
5% contingent convertible senior notes (which can be put back to
the company in August 2010), Fitch views the planned notes
exchange as a CDE. (Fitch notes that the credit agreement allows
the lenders to terminate the credit facility if more than
$50 million of USF notes remain outstanding on March 1, 2010, or
if more than $50 million remains outstanding on the 5% contingent
convertible senior notes on June 25, 2010.) The exchange of debt
for equity is tantamount to a material reduction in terms for the
note holders, while Fitch views the very real threat of a
liquidity crunch and bankruptcy absent the exchange as putting
pressure on note holders to participate in the transaction.
Should the exchange offer be completed as contemplated, Fitch will
downgrade the IDRs of YRCW and YRC Regional Transportation to 'RD'
from 'C'. Following the downgrade, Fitch will review the
company's credit profile and its modified capital structure and
assign a new IDR accordingly. If all of the USF notes are
exchanged, Fitch likely will withdraw its IDR on YRC Regional
Transportation as there will no longer be rated debt at the
subsidiary.
If the debt for equity exchange is unsuccessful, Fitch views the
probability of a default or bankruptcy as very high. In such a
situation, the IDRs of YRCW and YRC Regional Transportation likely
will remain at 'C' until a default occurs or until the company's
financial prospects improve sufficiently to warrant an upgrade.
YRC WORLDWIDE: Moody's Says USF Offer is a Distressed Exchange
--------------------------------------------------------------
Moody's Investors Service said that YRC Worldwide, Inc.'s plan to
commence an exchange offer for its USF notes and its contingent
convertible notes, as announced, is likely to be viewed as a
Distressed Exchange. This is because the consideration YRC is
likely to offer in exchange will be well below the face value of
the Notes.
YRC's ratings were assigned by evaluating factors Moody's believe
are relevant to the credit profile of the issuer, such as i) the
business risk and competitive position of the company versus
others within its industry, ii) the capital structure and
financial risk of the company, iii) Moody's projections of the
company's performance 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 YRC's core industry and YRC's ratings are believed to be
comparable to those of other issuers of similar credit risk.
The last rating action was on December 24, 2008, when Moody's
lowered YRC's corporate family rating to Caa3.
YRC Worldwide Inc. is a less-than-truckload trucking company
headquartered in Overland Park, Kansas.
YRC WORLDWIDE: Posts $158.7 Million Net Loss for Q3 2009
--------------------------------------------------------
YRC Worldwide Inc. reported a net loss of $158.7 million for the
three months ended September 30, 2009, from a net loss of
$720.8 million for the same period a year ago. The Company posted
a net loss of 741.5 million for the nine months ended
September 30, 2009, from a net loss of $731.4 million for the same
period a year ago.
The Company recorded operating revenue of $1.306 billion for the
three months ended September 30, 2009, from $2.380 billion for the
same period a year ago. It booked operating revenue of
$4.137 billion for the nine months ended September 30, 2009, from
$7.011 billion for the same period a year ago.
For the quarter, the company announced a loss per share of $2.67
that included a net gain on property disposals of $0.18 per share,
severance charges of $0.08 per share due to further headcount
reductions and lease termination charges of $0.11 per share
related to further optimizing the networks. By comparison, the
company reported a loss per share in the third quarter of 2008 of
$12.58 that included impairment charges on goodwill and intangible
assets of $13.20 per share, a curtailment gain of $0.84 per share,
and a net gain on property disposals of $0.21 per share.
As of September 30, 2009, the Company had $3.281 billion in total
assets against total current liabilities of $1.687 billion, long-
term debt, less current portion of $892.0 million, deferred income
taxes, net of $131.4 million, pension and post retirement of
$384.9 million, and claims and other liabilities of
$410.2 million, resulting in shareholders' deficit of
$225.5 million.
"We gained significant momentum in the third quarter as we
executed on our comprehensive plan to improve operating
efficiencies, restore financial strength and position our company
for future success," stated Bill Zollars, Chairman and CEO of YRC
Worldwide. "We achieved significant sequential improvement from
the first half of the year. In fact, YRC Regional Transportation
and YRC Logistics were profitable for the quarter, and our
operating cash flow trends improved sequentially during the
quarter despite the continued economic downturn."
YRC Worldwide also reported aggregated cash and available unused
capacity under the credit facilities of $171 million at
September 30, 2009, including $163 million of cash and cash
equivalents. In addition, the revolver reserve under the
company's credit agreement was $102 million at September 30, 2009.
The company expects to commence an exchange offer for its
outstanding USF 8-1/2% notes and its contingent convertible notes.
The successful completion of this exchange would allow the company
to access this revolver reserve under its recently amended credit
agreement, therefore providing a significant source of new
liquidity.
The company also completed $21 million of sale and financing
leaseback transactions and sold $68 million of excess property
during the third quarter, including $10 million in pension
deferral debt pay downs from these proceeds.
The Company expects to obtain $200 million in annual run rate
savings from cost reductions, primarily SG&A, by January 1, 2011.
The Company expects to receive approximately $125 million of net
cash proceeds during 2009 from the sale of excess facilities.
On October 29, 2009, the Board of Directors of the Company (i)
adjusted Timothy A. Wicks' title from Executive Vice President and
Chief Operating Officer of the Company to President and Chief
Operating Officer of the Company and (ii) adjusted William D.
Zollars' title from Chairman of the Board, President and Chief
Executive of the Company to Chairman of the Board and Chief
Executive Officer of the Company.
Key Segment Information
Third quarter 2009 compared to the third quarter 2008:
-- YRC National Transportation total shipments per day down
39.9% and total revenue per hundredweight, including fuel
surcharge, down 11.5%.
-- YRC Regional Transportation total shipments per day down
22.7% and total revenue per hundredweight, including fuel
surcharge, down 12.2%.
"Our third quarter sequential shipment trends have dramatically
stabilized as compared to the trends from the first half of the
year, while we continue to maintain pricing discipline in an
increasingly competitive marketplace," said Tim Wicks, President
and Chief Operating Officer of YRC Worldwide.
A full-text copy of YRC's earnings release is available at no
charge at http://ResearchArchives.com/t/s?47f3
A full-text copy of YRC's segment statistics is available at no
charge at http://ResearchArchives.com/t/s?47f4
Update on Proposed Note Exchange Offer Discussions
The company is currently in discussions with a committee of its
noteholders regarding the terms of a proposed exchange offer for
its outstanding USF 8-1/2% notes and its contingent convertible
notes. The successful completion of this exchange would allow the
company to access the $106 million revolver reserve under its
recently amended credit agreement, therefore providing a
significant source of new liquidity.
"We have been in active dialogue with our noteholders and feel
good about the progress being made. The exchange will be a key
milestone in our comprehensive plan which is expected to improve
our capital structure, reduce our debt and increase our cash
flow," stated Mr. Zollars.
About YRC Worldwide
Headquartered in Overland Park, Kansas, YRC Worldwide Inc. --
http://www.yrcw.com/-- a Fortune 500 company and one of the
largest transportation service providers in the world, is the
holding company for a portfolio of successful brands including
YRC, YRC Reimer, YRC Glen Moore, YRC Logistics, New Penn, Holland
and Reddaway. YRC Worldwide has the largest, most comprehensive
network in North America with local, regional, national and
international capabilities. Through its team of experienced
service professionals, YRC Worldwide offers industry-leading
expertise in heavyweight shipments and flexible supply chain
solutions, ensuring customers can ship industrial, commercial and
retail goods with confidence.
As reported by the Troubled Company Reporter on August 18, 2009,
Standard & Poor's Ratings Services affirmed its 'CCC' long-term
corporate credit rating on YRC Worldwide. S&P removed the ratings
from CreditWatch, where S&P had placed them with negative
implications on April 24, 2009.
YRC WORLDWIDE: Renews ABS Facility & Amends JPMorgan Loan
---------------------------------------------------------
YRC Worldwide Inc. renewed its asset-backed securitization
facility early with a total capacity of $400 million through
October 26, 2010, which was previously set to expire on
February 11, 2010. The due date of the $10 million ABS commitment
fee previously payable on October 30, 2009, has also been extended
to October 2010.
In addition, the company has also amended its credit agreement.
The parties to the Third Amended and Restated Receivables Purchase
Agreement, dated as of April 18, 2008 -- ABS Facility -- are YRC
Worldwide as Performance Guarantor; Yellow Roadway Receivables
Funding Corporation, as Seller; Falcon Asset Securitization
Company LLC, Three Pillars Funding LLC and Amsterdam Funding
Corporation, as Conduits; the financial institutions party
thereto, as Committed Purchasers; Wachovia Bank, National
Association, as Wachovia Agent and LC Issuer, SunTrust Robinson
Humphrey, Inc., as Three Pillars Agent; The Royal Bank of Scotland
plc (successor to ABN AMRO Bank N.V.), as Amsterdam Agent; and
JPMorgan Chase Bank, N.A., as Falcon Agent -- which, together with
the Wachovia Agent, the Three Pillars Agent and the Amsterdam
Agent, are referred to as the "Co-Agents"; and JPMorgan Chase
Bank, National Association, as administrative agent.
The parties to the Credit Agreement, dated as of August 17, 2007,
are YRC Worldwide, certain of its subsidiaries, JPMorgan Chase
Bank, National Association, as administrative agent, and other
lenders.
The renewed ABS and amended credit agreement provide for a
deferral of nearly all of the lender interest and fees effective
upon the closing of the note exchange. In the third quarter of
2009, the ABS and credit agreement interest and fees subject to
the deferral provisions approximated $25 million.
The amended credit facilities include the elimination of the
minimum earnings before interest, taxes, depreciation and
amortization covenants for the fourth quarter of 2009 and the
first quarter of 2010, and reset the remaining minimum EBITDA and
minimum liquidity covenants. The revolver capacity under the
credit agreement remains at $950 million, including the existing
revolver reserve amount, which was $106 million as of the date of
the amendment. Upon completion of the note exchange, the existing
revolver reserve will extend through January 1, 2012.
"We continue to receive solid support from our lenders as we
implement our recovery plan to manage through this severe economic
downturn," stated Sheila Taylor, Executive Vice President and CFO
of YRC Worldwide. "With 100% of the credit facility and ABS
lenders approving the amendments, they have once again
demonstrated the belief they have in the value of this company and
its potential, as the benefits of our strategic plans become more
apparent in our results."
Financial Covenants
The Credit Agreement Amendment amends the minimum consolidated
EBITDA covenant by:
-- including an addback to consolidated EBITDA of the Company
and its subsidiaries (i) of up to $3 million for certain
restructuring charges for the fiscal quarter ending
June 30, 2010, (ii) of up to $6 million for certain
restructuring charges for the two fiscal quarter period
ending September 30, 2010, (iii) of up to $9 million for
certain restructuring charges for the three fiscal quarter
period ending December 31, 2010, (iv) of up to $9 million
for certain restructuring charges for the four fiscal
quarter period ending March 31, 2011, (v) of up to
$6 million for certain restructuring charges for the four
fiscal quarter period ending June 30, 2011 and (vi) of up
to $3 million for certain restructuring charges for the
four fiscal quarter period ending September 30, 2011; and
-- resetting the minimum consolidated EBITDA covenant, to
provide that for any period set forth below consolidated
EBITDA must be greater than or equal to the amount set
forth opposite such period:
Minimum
Consolidated
Period EBITDA
------ ------------
For the fiscal quarter ending on June 30, 2010 $65,000,000
For the two consecutive fiscal quarters ending
September 30, 2010 $135,000,000
For the three consecutive fiscal quarters
ending December 31, 2010 $200,000,000
For the four consecutive fiscal quarters
ending March 31, 2011 $270,000,000
For the four consecutive fiscal quarters
ending June 30, 2011 $270,000,000
For the four consecutive fiscal quarters
ending September 30, 2011 $280,000,000
For the four consecutive fiscal quarters
ending December 31, 2011 $270,000,000
For the four consecutive fiscal quarters
ending March 31, 2012 $300,000,000
For the four consecutive fiscal quarters
ending June 30, 2012 $330,000,000
The Credit Agreement Amendment amends the maximum Capital
Expenditure covenant to provide that Capital Expenditures of the
Company and its subsidiaries during any period set forth will not
exceed an amount set forth opposite such period:
Maximum
Capital
Period Expenditures
------ ------------
For the fourth fiscal quarter in 2009 $30,000,000
For the four consecutive fiscal quarters
ending December 31, 2009 $60,000,000
For any single fiscal quarter in 2010 $57,500,000
For the four consecutive fiscal quarters
ending December 31, 2010 $115,000,000
For any single fiscal quarter in 2011 $72,500,000
For the four consecutive fiscal quarters
ending December 31, 2011 $145,000,000
For any single fiscal quarter in 2012 $50,000,000
The Credit Agreement Amendment replaces the minimum liquidity
covenant with a minimum Available Cash covenant. This covenant
provides that from and after the earlier of (i) the date the
Recapitalization Transaction is completed and (ii) December 16,
2009, the Company will maintain Available Cash equal to or greater
than $75 million. Available Cash is tested on each business day
based on the daily average as of the end of business for the
immediately preceding three business days.
"Available Cash" means, as of any date of determination, the sum
of (i) unrestricted cash in respect of which the Administrative
Agent shall have a first priority (subject solely to permitted
encumbrances in favor of depositary banks) perfected security
interest and any amounts maintained by the Company and its
domestic subsidiaries in a deposit account for the sole purpose of
funding payroll obligations, all as of such date, plus (ii) the
amount of the available revolving commitments (other than
revolving commitments that comprise the revolver reserve amount),
plus (iii) the amount available for drawing under the ABS Facility
as of such date.
The Credit Agreement Amendment deletes the Total Leverage Ratio
and the Interest Coverage Ratio.
Asset Sales
The Credit Agreement Amendment limits net cash proceeds from asset
sales in fiscal year 2009 to $400 million and limits net cash
proceeds from asset sales in fiscal year 2010 to $200 million,
which limits do not include net cash proceeds received from
certain asset sales, including (i) the sale of real estate that
constitutes first lien collateral of the Funds pursuant to the
Contribution Deferral Agreement and (ii) the sale and lease back
transaction completed with NATMI Truck Terminals, LLC in the first
half of 2009.
The Company may only consummate additional sale and leaseback
transactions if (i) a majority of the Lenders approve the
transactions or (ii) such transactions were approved by the
Lenders in connection with the Credit Agreement Amendment. The
Company expects to close approximately $50 million of approved
sale leaseback transactions in the fourth quarter of 2009. The
closing of these sale leaseback transactions are subject to the
satisfaction of normal and customary due diligence and related
conditions, including the right of each buyer to terminate its
obligation in its sole discretion during the inspection period.
Amendment Fee
The Credit Agreement Amendment requires the Company to pay an
amendment fee equal to 3.00% of each approving Lender's revolving
commitment and outstanding term loans, which is fully earned but
not due and payable until the earlier of December 31, 2011 or the
occurrence of a Deferral Termination Event. The Credit Agreement
Amendment was approved by 100% of the Lenders.
Event of Default
The Credit Agreement Amendment adds a new event of default under
the Credit Agreement if cash payments are made to the holders of
the Company's contingent convertible senior notes in an aggregate
amount in excess of $1 million in connection with any conversion
of the contingent convertible senior notes into equity or cash.
ABS Facility Amendment
The expiration of the ABS Facility was extended from February 11,
2010 to October 26, 2010; provided, that if the Company does not
complete a recapitalization transaction by December 16, 2009, the
ABS Facility will expire on February 11, 2010. The ABS Amendment
reduces the aggregate commitments under the ABS Facility from
$500 million to $400 million and reduces the letter of credit
facility sublimit from $105 million to $84 million.
Fee Deferral
In connection with the ABS Amendment, the Co-Agents deferred
certain fees due under the ABS Facility. The $10.0 million fee
that was due on October 30, 2010 has been deferred until the
earliest to occur of (i) October 26, 2010, (ii) the Amortization
Date (as defined in the ABS Facility), or (iii) the occurrence of
a Deferral Termination Event. Upon completion of the
Recapitalization Transaction on or prior to December 16, 2009, the
portion of current letter of credit fees, program fees and
administration fees in excess of the fees in place prior to
February 12, 2009 will be deferred until the Deferred Fee Payment
Date. Upon effectiveness of the deferral, the Company expects
these deferred fees to be approximately $5 million per quarter.
All deferred fees will accrue and be payable on the Deferred Fee
Payment Date; provided, that, if the advance rate on the ABS
Facility exceeds 50% on any business day, all or a portion of
deferred fees will be immediately payable in an amount sufficient
to reduce the effective advance rate to 50%. Upon the occurrence
of a Deferral Suspension Event, YRRFC will no longer be permitted
to defer fees under the ABS Facility; however, previously deferred
fees will not become due and payable solely as a result of the
occurrence of a Deferral Suspension Event.
Financial Covenants
The ABS Amendment implements the minimum consolidated EBITDA,
maximum capital expenditure and minimum Available Cash financial
covenants that are consistent with the Credit Agreement.
About YRC Worldwide
Headquartered in Overland Park, Kansas, YRC Worldwide Inc. --
http://www.yrcw.com/-- a Fortune 500 company and one of the
largest transportation service providers in the world, is the
holding company for a portfolio of successful brands including
YRC, YRC Reimer, YRC Glen Moore, YRC Logistics, New Penn, Holland
and Reddaway. YRC Worldwide has the largest, most comprehensive
network in North America with local, regional, national and
international capabilities. Through its team of experienced
service professionals, YRC Worldwide offers industry-leading
expertise in heavyweight shipments and flexible supply chain
solutions, ensuring customers can ship industrial, commercial and
retail goods with confidence.
As reported by the Troubled Company Reporter on August 18, 2009,
Standard & Poor's Ratings Services affirmed its 'CCC' long-term
corporate credit rating on YRC Worldwide. S&P removed the ratings
from CreditWatch, where S&P had placed them with negative
implications on April 24, 2009.
YRC WORLDWIDE: To Launch Exchange Offer for Old Notes
-----------------------------------------------------
YRC Worldwide Inc. intends to launch an exchange offer this week
based upon terms discussed with representatives of a committee of
the holders of its contingent convertible notes and a committee of
the holders of its USF 8-1/2% notes.
The successful completion of this exchange would allow the company
open access to the existing $106 million revolver reserve and to
begin deferring payment of lender interest and fees of
approximately $25 million per quarter under its recently amended
credit agreement and asset-backed securitization facility. The
company currently has access to $50 million of the revolver
reserve for certain operational purposes and the remaining reserve
with a two-thirds approval from its lenders.
The Notes are:
-- 5.0% Net Share Settled Contingent Convertible Senior
Notes due 2023 -- 5% Net Share Settled Notes -- and
3.375% Net Share Settled Contingent Convertible Senior
Notes due 2023 -- 3.375% Net Share Settled Notes --
Coco Notes;
-- 8-1/2% Guaranteed Notes due April 15, 2010 -- 8-1/2%
Notes -- and 5.0% Contingent Convertible Senior Notes due
2023 and the 3.375% Contingent Convertible Senior Notes
due 2023 -- Old 5% Notes and Old 3.375% Notes --
collectively, the Old Coco Notes.
Shares allocated pro
rata based on the sum of
Title of Notes (i) the below percentage
and Old CoCo weighting of principal
Notes to be amount claims and (ii)
Tendered Issuer 100% of accrued interest
-------------- ------ ------------------------
Old 3.375% Notes YRC Worldwide 97%
3.375% Net Share YRC Worldwide 97%
Settled Notes
Old 5% Notes YRC Worldwide 100%
5% Net Share YRC Worldwide 100%
Settled Notes
8-1/2% Notes YRC Regional 103%
Transportation
"We are pleased with the progress we've made with this group of
key stakeholders in such a short amount of time. This group
understands our comprehensive plan and the long-term value of this
company," stated Bill Zollars, Chairman and CEO of YRC Worldwide.
"The completion of the note exchange is an important milestone in
our plan, which is expected to improve our cash flow and capital
structure," Mr. Zollars continued.
In the aggregate and with full participation, noteholders would
exchange approximately $536.8 million in face value of Notes plus
accrued and unpaid interest for shares of common stock and new
Class A Convertible Preferred Stock, which together on an as-if
converted basis would represent 95% of the company's common stock,
with a provision for options to be granted to the company's union
employees pursuant to the company's recently ratified Amended and
Restated Memorandum of Understanding on the Job Security Plan.
The committee representing the contingent convertible notes has
been advised on financial matters by Evercore Partners and on
legal matters by Andrews Kurth LLP, and the committee representing
the USF 8-1/2 Notes has been advised on financial matters by
Broadpoint.Gleacher and on legal matters by Bracewell & Giuliani
LLP.
A full-text copy of the Exchange Offer Term Sheet is available at
no charge at http://ResearchArchives.com/t/s?480b
About YRC Worldwide
Headquartered in Overland Park, Kansas, YRC Worldwide Inc. --
http://www.yrcw.com/-- a Fortune 500 company and one of the
largest transportation service providers in the world, is the
holding company for a portfolio of successful brands including
YRC, YRC Reimer, YRC Glen Moore, YRC Logistics, New Penn, Holland
and Reddaway. YRC Worldwide has the largest, most comprehensive
network in North America with local, regional, national and
international capabilities. Through its team of experienced
service professionals, YRC Worldwide offers industry-leading
expertise in heavyweight shipments and flexible supply chain
solutions, ensuring customers can ship industrial, commercial and
retail goods with confidence.
As of September 30, 2009, the Company had $3.281 billion in total
assets against total current liabilities of $1.687 billion, long-
term debt, less current portion of $892.0 million, deferred income
taxes, net of $131.4 million, pension and post retirement of
$384.9 million, and claims and other liabilities of $410.2
million, resulting in shareholders' deficit of $225.5 million.
As reported by the Troubled Company Reporter on August 18, 2009,
Standard & Poor's Ratings Services affirmed its 'CCC' long-term
corporate credit rating on YRC Worldwide. S&P removed the ratings
from CreditWatch, where S&P had placed them with negative
implications on April 24, 2009.
* Leveraged Markets Maintain Upward Momentum in Q3, Says Fitch
--------------------------------------------------------------
The U.S. leveraged finance markets continued its streak of
increased levels of issuance and solid performance during the
third quarter of 2009 (3Q'09), according to Fitch Ratings.
Following record-breaking performance in 2Q'09, yield spreads
continued to narrow, generating positive returns to investors for
the third quarter in a row.
'Generally improving economic data and better-than-expected
corporate earnings are encouraging investors to move back into
riskier asset classes,' said Eric Tutterow, Managing Director,
Fitch Ratings U.S. Leveraged Finance.
New high yield bond issuance totaled $38.9 billion during
3Q'09, down 25.1% compared to $51.9 billion issued during
2Q'09, but still up significantly compared to the previous
seven quarters. Approximately 37.4% of new high yield issuance
was in the form of secured notes.
Issuance in the U.S. leveraged loan market also declined during
3Q'09 compared to 2Q'09 with total syndicated loan issuance of
$95.1 billion, down 40.4% from $159.5 billion in 2Q'09.
Leveraged loan issuance totaled $47.4 billion in 3Q'09, down
32.5% from $70.3 billion in 2Q'09.
Of particular note is the ongoing increase in debtor-in-possession
(DIP) loan issuance, which reached $14 billion during the first
three quarters of 2009. DIP volume in 2009 has already exceeded
the total DIP volume recorded during each of the last eight years.
Fitch further notes that the overall pace of speculative-grade
downgrades declined again in 3Q'09. Pressure on credit quality
overall has eased in recent months, driven in part by lender
willingness to amend and extend loans rather than force them
into a default, and increased credit availability in the public
markets.
The full 'U.S. Leveraged Finance Quarterly Review' is available
on the Fitch Ratings web site 'www.fitchratings.com.' Full
comparative data on high yield bond and loan data is available,
as well as comparative performance trends.
* Stiglitz Says U.S. Is Paying for Failure to Take Over Banks
-------------------------------------------------------------
According to Bloomberg News, Nobel Prize-winning economist Joseph
Stiglitz said the world's biggest economy is suffering because of
the U.S. government's failure to nationalize banks during the
financial crisis.
"If we had done the right thing, we would be able to have more
influence over the banks," Stiglitz told reporters at an economic
conference in Shanghai Oct 31, according to the report. "They
would be lending and the economy would be stronger." Mr. Stiglitz
has stuck with his view even after the U.S. economy returned to
growth in the third quarter and as banks' share prices climbed
this year.
According to Bloomberg, U.S. Treasury Secretary Timothy Geithner,
appearing recently in NBC's "Meet the Press" program, said the
U.S.'s economic recovery hinges in part on banks taking more risk
and restoring the flow of credit to businesses.
* Yesner & Boss Expands Services for Mortgage & Bankruptcy
----------------------------------------------------------
Yesner & Boss, a leading Central Florida law firm in the areas of
mortgage assistance, bankruptcy and asset protection, has added
two attorneys to expand services to clients caught up in the
nation's complex mortgage markets. This will be especially
important as the economic tidal wave that swamped residential real
estate sweeps toward the commercial market.
Commercial property values have fallen 35% since October 2007,
according to Moody's Investors Service, making it difficult for
owners to refinance almost $165-billion of mortgages for
everything from small stores to skyscrapers. If those properties
can't be sold, foreclosures could become the crisis for the
commercial real estate market it continues to be for residential
real estate.
The addition by Yesner & Boss of associates Vincent C. LoBue and
Paul M. Silvestri significantly increases the capabilities of the
firm (http://www.YesnerBoss.com).
"Bringing on additional attorneys allows us to expand our client
base, take on more complex cases and add even more value to all
our clients," said Shawn Yesner, a partner in Yesner & Boss.
The rate of foreclosures in Florida remains staggering. Between
August and September, Florida recorded nearly 344,000 new
foreclosures of all kinds, according to RealtyTrak, a real estate
monitoring firm.
"With foreclosures remaining high and bankruptcies nearly back to
the epidemic scale of 2005, creditors are becoming increasingly
aggressive in collecting debts," Mr. Yesner said. "In many cases,
this activity goes beyond what the law allows. It's not just
homeowners. Commercial landlords are experiencing high vacancy
rates, which could lead to increased commercial foreclosures. Our
addition of two skilled attorneys will allow us to respond to
those needs."
Mr. LoBue received a law degree from Stetson University College of
Law and is a member of the Florida and New Jersey Bar
Associations. Mr. LoBue's practice includes foreclosure defense,
consumer protection litigation and asset protection.
Mr. Silvestri, also a Stetson graduate, is a member of the Florida
Bar Association. Mr. Silvestri's practice includes foreclosure
defense and consumer protection cases.
* Large Companies With Insolvent Balance Sheets
-----------------------------------------------
Total
Share-
Total holders'
Assets Equity
Company Ticker ($MM) ($MM)
------- ------ ------- ---------
ABSOLUTE SOFTWRE ABT CN 117 1
ACCO BRANDS CORP ABD US 1,100 (107)
AFC ENTERPRISES AFCE US 142 (26)
AMER AXLE & MFG AXL US 1,920 (736)
AMR CORP AMR US 24,138 (3,000)
ARBITRON INC ARB US 220 0
ARVINMERITOR INC ARM US 2,627 (846)
AUTOZONE INC AZO US 5,318 (433)
BAXTER INTL INC BAX US 15,742 0
BIOSPECIFICS TEC BSTC US 12 6
BIOTIME INC BTIM US 5 0
BLOUNT INTL BLT US 474 (36)
BOARDWALK REAL E BEI-U CN 2,377 (22)
BOARDWALK REAL E BOWFF US 2,377 (22)
BP PRUD BAY-RTU BPT US 9 8
BURCON NUTRASCIE BU CN 4 3
CABLEVISION SYS CVC US 9,307 (5,284)
CARDTRONICS INC CATM US 468 (10)
CELLDEX THERAPEU CLDX US 54 4
CENTENNIAL COMM CYCL US 1,480 (925)
CENVEO INC CVO US 1,459 (231)
CHENIERE ENERGY CQP US 1,920 (436)
CHOICE HOTELS CHH US 357 (141)
CINCINNATI BELL CBB US 2,009 (623)
CLOROX CO CLX US 4,576 (175)
COMMERCIAL VEHIC CVGI US 269 5
DELCATH SYSTEMS DCTH US 9 2
DEXCOM DXCM US 65 1
DISH NETWORK-A DISH US 7,265 (1,519)
DOMINO'S PIZZA DPZ US 443 (1,350)
DUN & BRADSTREET DNB US 1,623 (719)
DYAX CORP DYAX US 68 (37)
EASTMAN KODAK EK US 7,105 (109)
EINSTEIN NOAH RE BAGL US 150 (4)
ELECTRO-OPTICAL MELA US 8 7
ENERGY COMPOSITE ENCC US 0 0
EPICEPT CORP EPCT SS 16 (3)
EXELIXIS INC EXEL US 333 (123)
EXTENDICARE REAL EXE-U CN 1,719 (47)
FORD MOTOR CO F US 204,327 (9,418)
FORD MOTOR CO F BB 204,327 (9,418)
GLG PARTNERS INC GLG US 494 (271)
GLG PARTNERS-UTS GLG/U US 494 (271)
GOLD RESOURCE CO GORO US 7 6
HEALTHSOUTH CORP HLS US 1,888 (662)
HOVNANIAN ENT-A HOV US 2,285 (73)
HUMAN GENOME SCI HGSI US 670 (55)
IMAX CORP IMX CN 270 (18)
IMAX CORP IMAX US 270 (18)
IMMUNOMEDICS INC IMMU US 53 1
IMS HEALTH INC RX US 2,030 (22)
INCYTE CORP INCY US 159 (291)
INSULET CORP PODD US 99 (3)
INTERMUNE INC ITMN US 165 (80)
IPCS INC IPCS US 553 (34)
JAZZ PHARMACEUTI JAZZ US 108 (88)
JUST ENERGY INCO JE-U CN 457 (652)
KNOLOGY INC KNOL US 639 (44)
LIN TV CORP-CL A TVL US 781 (187)
LINEAR TECH CORP LLTC US 1,466 (163)
LODGENET INTERAC LNET US 594 (64)
LOGMEIN INC LOGM US 47 7
MANNKIND CORP MNKD US 267 (19)
MAP PHARMACEUTIC MAPP US 65 1
MAXLIFE FUND COR MXFD US 0 0
MEAD JOHNSON-A MJN US 1,926 (808)
MEDIACOM COMM-A MCCC US 3,707 (426)
MONEYGRAM INTERN MGI US 6,221 (23)
MOODY'S CORP MCO US 1,873 (749)
NATIONAL CINEMED NCMI US 603 (499)
NAVISTAR INTL NAV US 9,383 (1,294)
NPS PHARM INC NPSP US 144 (219)
NYMOX PHARMACEUT NYMX US 1 (1)
OCH-ZIFF CAPIT-A OZM US 1,854 (157)
OMNOVA SOLUTIONS OMN US 326 0
ONCOGENEX PHARMA OGXI US 7 3
ONCOLYTICS BIO ONC CN 12 9
ONCOLYTICS BIO ONCY US 12 9
OSIRIS THERAPEUT OSIR US 129 2
OTELCO INC-IDS OTT-U CN 349 9
OTELCO INC-IDS OTT US 349 9
OVERSTOCK.COM OSTK US 129 (3)
PALM INC PALM US 793 (454)
PDL BIOPHARMA IN PDLI US 217 (306)
PEREGRINE PHARMA PPHMD US 26 5
PERMIAN BASIN PBT US 10 0
PETROALGAE INC PALG US 7 (32)
POTLATCH CORP PCH US 916 0
QWEST COMMUNICAT Q US 20,226 (1,051)
REGAL ENTERTAI-A RGC US 2,647 (228)
RENAISSANCE LEA RLRN US 83 2
REVLON INC-A REV US 797 (1,074)
SALLY BEAUTY HOL SBH US 1,464 (645)
SANDRIDGE ENERGY SD US 2,364 (91)
SAUDI AMERICAN H SAHN US 0 (2)
SEALY CORP ZZ US 1,031 (115)
SELECT COMFORT C SCSS US 86 (46)
SEMGROUP ENERGY SGLP US 314 (131)
SHARPS COMPLIANC SMED US 15 9
SIGA TECH INC SIGA US 8 (13)
SINCLAIR BROAD-A SBGI US 1,606 (148)
SONIC CORP SONC US 828 (22)
SPECIALTY PRODUC SPIE US 53 9
STANDARD PARKING STAN US 230 4
STEREOTAXIS INC STXS US 43 (10)
SUCCESSFACTORS I SFSF US 165 (5)
SUN COMMUNITIES SUI US 1,192 (81)
SYNERGY PHARMACE SGYP US 4 1
TALBOTS INC TLB US 855 (206)
TALECRIS BIOTHER TLCR US 1,336 (37)
TAUBMAN CENTERS TCO US 2,858 (289)
TENNECO INC TEN US 2,767 (263)
THERAVANCE THRX US 206 (159)
UAL CORP UAUA US 18,805 (2,628)
UNITED RENTALS URI US 3,918 (46)
US AIRWAYS GROUP LCC US 7,857 (336)
VECTOR GROUP LTD VGR US 757 2
VENOCO INC VQ US 725 (165)
VIRGIN MOBILE-A VM US 320 (256)
WARNER MUSIC GRO WMG US 3,988 (142)
WEIGHT WATCHERS WTW US 1,085 (791)
WORLD COLOR PRES WC CN 2,641 (1,735)
WORLD COLOR PRES WC/U CN 2,641 (1,735)
WR GRACE & CO GRA US 3,815 (351)
YRC WORLDWIDE IN YRCW US 3,418 (72)
*********
Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par. Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable. Those sources may not,
however, be complete or accurate. The Monday Bond Pricing table
is compiled on the Friday prior to publication. Prices reported
are not intended to reflect actual trades. Prices for actual
trades are probably different. Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind. It is likely that some entity
affiliated with a TCR editor holds some position in the issuers'
public debt and equity securities about which we report.
Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
share in public markets. At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets. A company may establish reserves on its balance sheet for
liabilities that may never materialize. The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.
A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the TCR. Submissions about insolvency-
related conferences are encouraged. Send announcements to
conferences@bankrupt.com/
On Thursdays, the TCR delivers a list of recently filed
Chapter 11 cases involving less than $1,000,000 in assets and
liabilities delivered to nation's bankruptcy courts. The list
includes links to freely downloadable images of these small-dollar
petitions in Acrobat PDF format.
Each Friday's edition of the TCR includes a review about a book of
interest to troubled company professionals. All titles are
available at your local bookstore or through Amazon.com. Go to
http://www.bankrupt.com/books/to order any title today.
Monthly Operating Reports are summarized in every Saturday edition
of the TCR.
The Sunday TCR delivers securitization rating news from the week
then-ending.
For copies of court documents filed in the District of Delaware,
please contact Vito at Parcels, Inc., at 302-658-9911. For
bankruptcy documents filed in cases pending outside the District
of Delaware, contact Ken Troubh at Nationwide Research &
Consulting at 207/791-2852.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter is a daily newsletter co-published
by Bankruptcy Creditors' Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland,
USA. Howard C. Tolentino, Joseph Medel C. Martirez, Denise Marie
Varquez, Philline Reluya, 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-
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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 ***