/raid1/www/Hosts/bankrupt/TCR_Public/091111.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Wednesday, November 11, 2009, Vol. 13, No. 312
Headlines
ABITIBIBOWATER INC: To Sell Recycling Biz. to Waste Management
ADOBE SYSTEMS: Unveils New Round of Cuts, To Slash 9% of Jobs
ADVANTA CORP: Case Summary & 30 Largest Unsecured Creditors
AIRTRAN HOLDINGS: Outlook Remains Positive, Management Says
ALL LAND INVESTMENTS: RBS Citizens Objects to Maschmeyer Hiring
ALLIED CAPITAL: Posts $140 Million Net Loss in Q3 2009
ALLIS-CHALMERS: Posts $10.3 Million Net Loss in Q3 2009
AMARAVATHI LTD: Postpetition Rents Are Property of the Estate
AMBAC FINANCIAL: Liquidity Crisis Looms; Issues Bankruptcy Warning
AMERICAN AXLE: Files Amendment to Shelf Registration Statement
AMERIGROW RECYCLING: Filed Chapter 11 to Avert Foreclosure
AMERIGROW RECYCLING: Gets 30-Day Extension for Schedules Filing
AMERIGROW RECYCLING: List of 20 Largest Unsecured Creditors
AMERIGROW RECYCLING: Taps Genovese Joblove as Gen. Bankr. Counsel
AMR CORP: Files Redacted Copies of Boeing Purchase Agreements
APPLETON PAPERS: Posts $31.4 Million Net Income for Q3 2009
ARMSTRONG WORLD: Liberty Mutual to Pay $300 Mil. to Asbestos Trust
ASARCO LLC: Steelworkers Win Pension Benefits for 19 EX-Workers
AURORA OIL: Ch. 11 Plan Confirmation Hearing Set for December 10
AURORA OIL: Plan Filing Exclusivity Extended Until Dec. 9
AVIS BUDGET: Adopt Majority Voting Standard in Director Elections
BARZEL INDUSTRIES: S&P Withdraws 'D' Corporate Credit Rating
BAYARD WILLIAM: Taps Robert A. Angueira as Bankruptcy Counsel
BAYVIEW HOLDINGS: Wants Durrettebradshaw as Bankruptcy Counsel
BEAR STEARNS: Jury Acquits Cioffi & Tannin of Fraud Charges
BIGLER LP: Receives Interim Nod to Use Cash Collateral
BOMBARDIER RECREATIONAL: S&P Raises Rating on Senior Loan to CCC-
BROADSTRIPE LLC: Has Plan Exclusivity Until Jan. 27
BUILDERS FIRSTSOURCE: Registers 58MM Shares for Rights Issue
BUILDERS FIRSTSOURCE: Settles Suit Regarding Recapitalization
CAMP COOLEY: Case Summary & 20 Largest Unsecured Creditors
CANWEST GLOBAL: Canada Case Recognized by U.S. as Main Proceeding
CANWEST GLOBAL: CMI Entities Seek Jan. 22 CCAA Stay Extension
CANWEST GLOBAL: CMI Entities Propose Transition Agreement
CANWEST GLOBAL: CMI Wants Retirees Representatives
CANWEST GLOBAL: Canwest LP Talks With Lenders Continue
CENTAUR PA: Gets Interim Nod for Renewal of $50-Mil. L/C
CENTENNIAL COMMUNICATIONS: Merger with AT&T Becomes Effective
CENTENNIAL COMMUNICATIONS: S&P Withdraws 'B' Corp. Credit Rating
CHRYSLER LLC: Crain Appeals Bankr. Judge Order on Dealer Stays
CHRYSLER LLC: Gets Nod to Expand Scope for Cahill Work
CHRYSLER LLC: Proposes to Hire AAAI as Appraiser
CHRYSLER LLC: Proposes to Sell Newark Plant for $24 Mil.
CIENA CORP: Gets Clearance for Purchase of NNI Ethernet Assets
CINCINNATI BELL: Sept. 30 Balance Sheet Upside Down by $614-Mil.
CIT GROUP: Gets December 15 Extension for Schedules & Statements
CIT GROUP: Gets Interim Nod to Pay Prepetition Sales & Use Taxes
CIT GROUP: Gets Interim Nod to Pay Vendors in Ordinary Course
CIT GROUP: Gets Nod for FBG as Voting Agent
CITIGROUP INC: To Sell Shares in Primerica Unit in $100MM IPO
CLIFFORD ROBINSON: Sec. 341 Meeting Set for December 8
CLOUD PEAK: Moody's Assigns 'B1' Rating on $600 Mil. Senior Notes
CNA FINANCIAL: Moody's Assigns Ratings on $350 Mil. Senior Notes
COHARIE HOG FARM: To Sell Animals Under Chapter 11
COLONIAL BANCGROUP: Wants to Sell Vehicles to Cancel Insurance
COMMERCIAL CAPITAL: CCI Funding Can Use WestLB AG Cash Collateral
COMMERCIAL CAPITAL: Court OKs Ch. 11 Trustee in CCI Funding's Case
COPIA: Wins Confirmation of Liquidating Chapter 11 Plan
CRUSADER ENERGY: Gunn Oil to Buy Back Acreage
DIP LLC: Case Summary & 3 Largest Unsecured Creditors
DONALD LANCE KUHNS: Case Summary & 17 Largest Unsecured Creditors
DREIER LLP: Lawyer Accomplice Pleads Guilty to Conspiracy
EDGE PETROLEUM: Has $8.4 Mil. Net Loss for September Quarter
EQUAN REALTY: Chapter 11 Trustee Auctioning 2207 Seventh Ave.
ERICKSON RETIREMENT: Gets Nod to Hire BMC Group as Claims Agent
ERICKSON RETIREMENT: Wants to Amend Charleston Subordination Pact
ERICKSON RETIREMENT: Court Sets Feb. 28 as Claims Bar Date
FAIRCHILD CORP: Gains Approval of Plan Disclosure Statement
FAIRPOINT COMMS: Proposes Admin/Reclamation Claims Protocol
FAIRPOINT COMMS: Proposes AlixPartners as Advisors
FAIRPOINT COMMS: Proposes Ernst & Young as Tax Advisors
FAIRPOINT COMMS: Proposes Rothschild as Financial Advisor
FNDS3000 CORP: Sherington Agrees to Forbear Until Jan. 31
FORD MOTOR: Geely Has Turnaround Plan for Volvo Unit
FORD MOTOR: Nets $2.875 Billion in 4.25% Senior Notes Offering
FORD MOTOR: Registers $40,000,000 in Benefit Plan Obligations
FORD MOTOR: Fitch Assigns 'CC/RR6' Rating on $2.875 Bil. Notes
FOURTH QUARTER PROPERTIES: Sec. 341 Meeting Set for December 10
FOURTH QUARTER PROPERTIES: Wants Dec. 17 Deadline for Schedules
FX REAL ESTATE: LV Units Have Deal for Prepack Ch. 11 Plan
GALAXY GAMING: September 30 Balance Sheet Upside-Down by $772,700
GENERAL MOTORS: Old GM to Continue Sales Process for France Plant
GENERAL MOTORS: Payment of Federal Loan in Doubt, WSJ Says
GENERAL MOTORS: Nick Reilly to Lead Opel/Vauxhall Europe
GENERAL MOTORS: China Sales Surpass 1.5 Million Units for 2009
GENMAR HOLDINGS: Irwin Jacobs No Longer Chairman & CEO
GENMAR HOLDINGS: Has Plan Exclusivity Until Jan. 31
GEORGIA GULF: Earns $230 Million in Third Quarter
GLASSLINE PARTNERSHIP: Sec. 341 Meeting Set for December 7
GLASSLINE PARTNERSHIP: Wants Matthew Hoffman as Bankr. Counsel
GREDE FOUNDRIES: To Operate Under New Ownership by End of 2009
GPX INT'L: Seeking Approval of Executive Bonuses
GREEKTOWN HOLDINGS: Gets Nod to Hire Fine Point as Consultant
GREEKTOWN HOLDINGS: Hires Deloitte FAS as Accountant
GREEKTOWN HOLDINGS: Panel Gets Debtor OK, Court Nod on Edelman
GREYSTONE PHARMACEUTICALS: Sec. 341 Meeting Set for December 11
GTC BIOTHERAPEUTICS: Discloses Retention Plan Awards to Execs
GTC BIOTHERAPEUTICS: Reports $5.1 Million Net Loss for Q3 2009
HAWAIIAN TELCOM: J. Trost Acts as Mediator for Creditors Dispute
HAWAIIAN TELCOM: Proposes to Assume Xerox Corp Agreement
HAWAIIAN TELCOM: Seek Cash Collateral Access Thru December
HEARTHSTONE RANCH II: Files Bare-Bones Chapter 11 Petition
HIGH ROCK HOLDING: Case Summary & 5 Largest Unsecured Creditors
HORIZON FINANCIAL: Receives NASDAQ Non-Compliance Notice
IDEARC INC: Reports Net Income of $101 Million in Third Quarter
INTERSTATE HOTELS: Posts $10.3 Million Net Loss in Q3 2009
JCB INC: Voluntary Chapter 11 Case Summary
JEFFERSON COUNTY: To Use JPMorgan Settlement for Reserve
KANE AND HORAH LAND: Case Summary & 2 Largest Unsecured Creditors
KENTUCKY PROCESSING: U.S. Trustee Can Charge Quarterly Fee
LEAR CORP: Final Fee Applications Due December 24
LEAR CORP: Reports $24.6-Mil. Net Income for Third Quarter
LEAR CORP: Registers New Common Stock with SEC
LEHMAN BROTHERS: Fannie Expects to Recover Part of $15.8BB Claim
LEWIS EQUIPMENT: Principal Wants Creditor Suits Halted
LYONDELL CHEMICAL: Lenders and Creditors Headed to Mediation
MAUI LAND: Posts $25.5 Million Net Loss in Q3 2009
MCKELVEY TRUCKING: Case Summary & 20 Largest Unsec. Creditors
MCKELVEY TRUCK LEASING: Case Summary & 20 Largest Unsec. Creditors
MEGA BRANDS: Rosens Discloses Settlement With Firm
MITHILESH KUMAR: Case Summary & 14 Largest Unsecured Creditors
NATIONAL SYSTEMS: Case Summary & 20 Largest Unsecured Creditors
NORTEL NETWORKS: Amends Schedules & Statements
NORTEL NETWORKS: Gets Nod to Pay Benefits to Foreign Workers
NORTEL NETWORKS: Proposes to Assign 60 Pacts to Ericsson
NORTEL NETWORKS: Proposes to Hire Global IP as Consultant
NORTEL NETWORKS: Ciena Ha Clearance to Buy Ethernet Assets
NTK HOLDINGS: MCC/NLC, PLM Want to Pursue Product Liability Suits
NTK HOLDINGS: Seeks January 7 Extension for Schedules Filing
OTTER TAIL AG: Has Agreement to Use Cash Collateral
ORLEANS HOMEBUILDERS: Gets Relief From Lenders Until Nov. 30
PACIFIC ETHANOL: Records Lower Net Loss of $11.9-Mil. in Q3
PARLUX FRAGRANCES: Earns $3 Million in Quarter Ended September 30
PARMALAT SPA: Earns EUR104-Mil. in Third Quarter
P.H. INVESTOR: Chapter 11 Bankruptcy Filing Causes Conflicts
PHOENIX COMPANIES: Fitch Cuts Insurer Strength Rating to 'BB+'
PIONEER NATURAL: Fitch Assigns 'BB+' Rating on Note Offering
PIONEER NATURAL: Moody's Assigns 'Ba1' Rating on $300 Mil. Notes
PIONEER NATURAL: S&P Assigns 'BB+' Rating on $300 Mil. Notes
PRESSTEK INC: Freimuth and Cook Join Board; Steenburgh Resigns
PRESSTEK INC: Posts $5.9 Million Net Loss for Oct. 3 Quarter
PROTOSTAR LTD: Court Approves Sale of PS I Assets to Intelsat
PTC ALLIANCE: To Auction All Assets on December 16
PURPLE COMMUNICATIONS: Gets Lenders Forbearance Until Nov. 20
RADICAL BUNNY: Partially Settles With SEC Over Fraud
READER'S DIGEST: 28 Units' Schedules of Assets & Liabilities
READER'S DIGEST: Ends Publishing Project With Rick Warren
READER'S DIGEST: Verizon Wants Contract Plan Disclosed
REAL MEX: Registers $13 Mil. of 14% Senior Secured Notes
REGENT COMMUNICATIONS: Reports $400,000 Net Loss for Q3 2009
REGIONS FINANCIAL: Fitch Downgrades Individual Rating to 'C'
REPROS THERAPEUTICS: To Appeal NASDAQ Delisting Notice
REVLON CONSUMER: Moody's Assigns 'B3' Rating on $330 Mil. Notes
REVLON CONSUMER: S&P Rates $330 Mil. Senior Notes at 'B-'
RONSON CORP: Wells Fargo Extends Forbearance to Dec. 31
RURAL/METRO LLC: S&P Assigns 'BB' Ratings on Senior Facilities
SAMSONITE STORES: Gets Final OK to Use Sr. Lenders Cash Collateral
SHERWOOD/CLAY-AUSTIN: List of 20 Largest Unsecured Creditors
SHERWOOD/CLAY-AUSTIN: Sec. 341 Meeting Set for December 4
SHERWOOD/CLAY-AUSTIN: Taps Heller Draper as Bankruptcy Counsel
SHERWOOD/CLAY-AUSTIN: Wants Additional 30 Days to File Schedules
SIX FLAGS: 31 Creditors Sell Claims Totaling $297,600
SIX FLAGS: Court OKs Hilco as Panel's Real Estate Consultant
SIX FLAGS: Court Sets January 2 Claims Bar Date
SW ACQUISITION: Moody's Assigns 'Ba3' Corporate Family Rating
SYAD KAZEM: Case Summary & 3 Largest Unsecured Creditors
SYROCO INC: Binswanger Sells Building for $2,600,000
TALBOTS INC: Seeks to Refinance Debt, Hire Perella as Adviser
TEMECULA VALLEY: Files Chapter 7 Protection
TISHMAN SPEYER: Nears Restructuring, Sale of Stuyvesant Town
TOWER HOMES: Douglas Companies Sells Distressed Las Vegas Condo
TOYS 'R' US: Fitch Assigns Issuer Default Rating at 'B-'
TOYS 'R' US: Moody's Affirms Corporate Family Rating at 'B2'
TOYS 'R' US: S&P Assigns 'B+' Rating on $650 Mil. Senior Notes
TRIBUNE CO: California Court to Rule on Rights in Dick Tracey
TRIUMPH HEALTHCARE: Moody's Anticipates Repayment on Rated Debt
TRW AUTOMOTIVE: S&P Raises Corporate Family Rating to 'B3'
TXCO RESOURCES: Inks $223 Million Sale Deal With Newfield
UAL CORP: Lovejoy Ceases to Serve as SVP, Gen. Counsel & Secretary
UCBH HOLDINGS: Fitch Downgrades Issuer Default Rating to 'C'
UNITED COMMERCIAL: Moody's Withdraws Caa1 Long-Term Deposit Rating
UNITED RENTALS: Moody's Downgrades Corporate Family Rating to 'B3'
UNITED RENTALS: S&P Assigns 'B' Rating on $400 Mil. Senior Notes
UNUM GROUP: Reports Net Income of $221 Million in Q3 2009
URBI DESARROLLOS: Moody's Reviews 'Ba3' Senior Unsec. Debt Rating
VIKING DRILLING: Plan Confirmation Hearing Set for Dec. 8
VISTEON CORP: Donofrio Moves to Shaw Group
VISTEON CORP: Drops Suit vs. Jabil Circuit
VISTEON CORP: PEWA Wants Prompt Decision on Supply Pacts
WABASH NATIONAL: Posts $66.4 Million Net Loss in Q3 2009
WOODSIDE GROUP: Files Modified 2nd Amended Plan of Reorganization
WP HICKMAN: Disclosure Statement Hearing Slated for December 3
YOUNG BROADCASTING: Creditors Committee Files Amended Ch. 11 Plan
YRC WORLDWIDE: Commences Debt for Equity Exchange Offer
YRC WORLDWIDE: To Enter Ch. 11 If Debt Exchange Fails
* Post-Bankruptcy Attorneys' Fee Claims Are Allowed
* Unemployment at 10.2%; 17.5% with Discouraged Workers
* FDIC's 20% Shorter 'Merit' Reviews Preceded Failures
* Fried Frank Expands International Finance Practice
* Matthew Feldman Returns to Willkie Farr & Gallagher
* President Obama Nominates Gotbaum as PBGC Director
* Upcoming Meetings, Conferences and Seminars
*********
ABITIBIBOWATER INC: To Sell Recycling Biz. to Waste Management
--------------------------------------------------------------
According to Bill Rochelle at Bloomberg, AbitibiBowater Inc. has a
contract to sell its recycling business for $12.5 million to an
affiliate of Waste Management Inc. The deal, however, is subject
to higher and better offers at auction. The bankruptcy judge will
be asked at a hearing Nov. 24 to require other bids initially by
Dec. 8, followed by a Dec. 14 auction and a Dec. 16 sale-approval
hearing.
About AbitibiBowater Inc.
Headquartered in Montreal, Canada, AbitibiBowater Inc. --
http://www.abitibibowater.com/-- produces a wide range of
newsprint, commercial printing papers, market pulp and wood
products. It is the eighth largest publicly traded pulp and paper
manufacturer in the world. AbitibiBowater owns or operates 23
pulp and paper facilities and 29 wood products facilities located
in the United States, Canada, the United Kingdom and South Korea.
Marketing its products in more than 90 countries, the Company is
also among the world's largest recyclers of old newspapers and
magazines, and has third-party certified 100% of its managed
woodlands to sustainable forest management standards.
AbitibiBowater's shares trade over-the-counter on the Pink Sheets
and on the OTC Bulletin Board under the stock symbol ABWTQ.
The Company and several of its affiliates filed for protection
under Chapter 11 of the U.S. Bankruptcy Code on April 16, 2009
(Bankr. D. Del. Lead Case No. 09-11296). Judge Kevin J. Carey
presides over the case. The Company and its Canadian affiliates
commenced parallel restructuring proceedings under the Companies'
Creditors Arrangement Act before the Quebec Superior Court
Commercial Division the next day. Alex F. Morrison at Ernst &
Young, Inc., was appointed CCAA monitor.
Paul, Weiss, Rifkind, Wharton & Garrison LLP, serves as the
Debtors' U.S. bankruptcy counsel. Stikeman Elliot LLP, acts as
the Debtors' CCAA counsel. Young, Conaway, Stargatt & Taylor, in
Wilmington, Delaware, serves as the Debtors' co-counsel, while
Troutman Sanders LLP in New York, serves as the Debtors' conflicts
counsel in the Chapter 11 proceedings. The Debtors' financial
advisors are Advisory Services LP, and their noticing and claims
agent is Epiq Bankruptcy Solutions LLC. The CCAA Monitor's
counsel is Thornton, Grout & Finnigan LLP, in Toronto, Ontario.
Abitibi-Consolidated Inc. and various Canadian subsidiaries filed
for protection under Chapter 15 of the U.S. Bankruptcy Code on
April 17, 2009 (Bankr. D. Del. 09-11348). Judge Carey also
handles the Chapter 15 case. Pauline K. Morgan, Esq., and Sean T.
Greecher, Esq., at Young, Conaway, Stargatt & Taylor, in
Wilmington, represent the Chapter 15 Debtors.
As of Sept. 30, 2008, the Company had $9,937,000,000 in total
assets and $8,783,000,000 in total debts.
Bankruptcy Creditors' Service, Inc., publishes AbitibiBowater
Bankruptcy News. The newsletter provides gavel-to-gavel coverage
of the Chapter 11 proceedings and parallel proceedings under the
Companies' Creditors Arrangement Act in Canada undertaken by
Abitibibowater Inc. and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000).
ADOBE SYSTEMS: Unveils New Round of Cuts, To Slash 9% of Jobs
-------------------------------------------------------------
Adobe Systems Incorporated on November 10, 2009, announced a
workforce reduction to appropriately align its costs in connection
with its 2010 operating plan. As a result, Adobe expects to
eliminate roughly 680 full-time positions worldwide. Adobe
expects to record in the aggregate roughly $65.0 million to $71.0
million in pre-tax restructuring charges associated with this
Restructuring Plan.
Dow Jones Newswires' Scott Morrison said the 680 full-time
positions represent about 9% of Adobe's total work force. Mr.
Morrison said the move marks the second wave of job cuts at Adobe
since last December, when it would eliminate 600 positions, or 8%
of its work force at the time.
Included in these charges are (i) roughly $17.0 million to $19.0
million primarily related to the consolidation of leased
facilities and (ii) roughly $48.0 million to $52.0 million related
to employee severance arrangements. Adobe expects to record
roughly $18.0 million to $20.0 million of these charges in the
fourth fiscal quarter ended November 27, 2009. Adobe expects to
complete the majority of the activities related to the
Restructuring Plan by the end of fiscal 2010. Substantially all
of these charges will result in cash expenditures.
The Restructuring Plan relates only to those employees and
facilities that were associated with Adobe prior to the
acquisition of Omniture, Inc. on October 23, 2009. Adobe expects
to incur additional restructuring expenses relating to Omniture's
operations. These costs will be included in the assumed
liabilities of Omniture as of October 23, 2009 and will be
recorded as part of the total acquisition purchase price of
Omniture.
In the fourth quarter of fiscal 2008, the Company initiated a
restructuring program, consisting of reductions in workforce of
approximately 560 full-time positions globally and the
consolidation of facilities, to reduce operating costs and focus
its resources on key strategic priorities. In connection with
this restructuring program, Adobe recorded restructuring charges
in the fourth quarter of fiscal 2008 totaling $29.2 million
related to termination benefits for the elimination of
approximately 460 of the 560 full-time positions globally.
In the first quarter of fiscal 2009, Adobe continued to implement
restructuring activities under this program. Adobe vacated
approximately 89,000 square feet of research and development and
sales facilities in the U.S., the United Kingdom and Canada.
Founded in 1982, Adobe Systems Incorporated is one of the largest
and most diversified software companies in the world. Based in
San Jose, California, Adobe offers a line of creative, business
and mobile software and services used by creative professionals,
designers, knowledge workers, consumers, original equipment
manufacturers partners, developers and enterprises for creating,
managing, delivering and engaging with compelling content and
experiences across multiple operating systems, devices and media.
Adobe distributes its products through a network of distributors
and dealers, value-added resellers, systems integrators,
independent software vendors and and OEMs, direct to end users and
through its Web site at http://www.adobe.com/ Adobe also licenses
its technology to hardware manufacturers, software developers and
service providers, and offers integrated software solutions to
businesses of all sizes. Adobe has operations in the Americas,
Europe, the Middle East and Africa and Asia. Its software runs on
personal computers with Microsoft Windows, Apple OS, Linux, UNIX
and various non-PC platforms, depending on the product.
ADVANTA CORP: Case Summary & 30 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Advanta Corp.
aka Teacher Service Organization, Inc.
aka TSO Financial Corp.
Welsh & McKean Roads
P.O. Box 844
Spring House, PA 19477
Bankruptcy Case No.: 09-13931
Debtor-affiliate filing separate Chapter 11 petition:
Entity Case No.
------ --------
Advanta Business Services Holding Corp. 09-13935
Advanta Business Services Corp. 09-13933
Advanta Shared Services Corp. 09-13934
Advanta Service Corp. 09-13932
Advanta Advertising Inc. 09-13943
Advantennis Corp. 09-13941
Advanta Investment Corp. 09-13942
Advanta Mortgage Holding Company 09-13938
Advanta Auto Finance Corporation 09-13939
Advanta Mortgage Corp. USA 09-13937
Advanta Finance Corp. 09-13944
Great Expectations International Inc. 09-13945
Great Expectations Franchise Corp. 09-13936
Great Expectations Management Corp. 09-13940
Chapter 11 Petition Date: November 8, 2009
Court: United States Bankruptcy Court
District of Delaware (Delaware)
About the Business: Spring House, Pennsylvania-based Advanta Corp.
(NASDAQ: ADVNB; ADVNA) --
http://www.advanta.com/-- manages one of the
nation's largest credit card portfolios
(through Advanta Bank Corp.) in the small
business market. Founded in 1951, Advanta has
long been an innovator in developing and
introducing many of the marketing techniques
that are common in the financial services
industry. As of June 30, 2009, the Company had
$3,128,981,000 in assets against total
liabilities of $3,031,763,000.
Debtors' Counsel: Weil, Gotshal & Manges LLP
Marcia L. Goldstein, Esq.
Robert J. Lemons, Esq.
767 Fifth Avenue
New York, New York 10153
Tel: (212) 310-8000
Fax: (212) 310-8001
- and -
Richards, Layton & Finger, P.A.
One Rodney Square
920 North King Street
Wilmington, Delaware 19801
Mark D. Collins, Esq.
Chun I. Jang, Esq.
Tel: (302) 651-7700
Fax: (302) 651-7701
Debtors'
Financial Advisor Alvarez & Marsal
600 Lexington Avenue
New York, NY 10022
Joseph A. Bondi
Andrew R. Sagat
Tel: 212-759-4433
Debtors'
Financial Advisor: KPMG LLP
Debtors'
Claims Agent: The Garden City Group, Inc.
Total Assets as of September 30, 2009: $363,000,000
Total Debts as of September 30, 2009: $331,000,000
A full-text copy of the Debtor's petition, including a list of its
30 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/deb09-13931.pdf
Debtor's List of 30 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Bank of New York Unsecured debt $138,100,000
Mellon
Bank of New York Unsecured debt $96,400,000
Mellon
SHI International Corp. Trade debt $293,740
Ortho McNeil Trade debt $212,500
Pharmaceutical
Attn: Cherilyn O'Neil
Fred W. Fairclough Trade Debt $171,400
Net Jets Aviation, Inc. Trade Debt $153,000
David Weinstock Trade Debt $136,000
Phillip A. Turberg Trade Debt $99,000
Allied Barton Security Trade Debt $65,000
Services
William C. Dunkelberg Trade Debt $60,000
William Bracken Trade Debt $60,000
Francis Noonan Trade Debt $58,000
DVL Incorporated Trade Debt $53,000
Brandywine Operating Trade Debt $44,000
Partnership LP
Carol Conover Trade Debt $39,700
Yolanda Ward Trade Debt $39,700
Schwab Trade Debt $37,500
David Kneller Trade Debt $33,600
Interstate Building Trade Debt $28,600
Maintenance Corp.
PECO Trade Debt $27,000
Bank of America Trade Debt $22,000
O.C. Tanner Trade Debt $21,100
Laura Bridgeford Trade Debt $19,700
Fed Ex Trade Debt $18,000
Aramark Trade Debt $15,000
Denise Jones Trade Debt $11,500
Oracle Trade Debt $11,400
Eurest Trade Debt $11,000
Karen Braun Trade Debt $10,200
Career Concepts Trade Debt $10,000
The petition was signed by William A. Rosoff, president, director
and vice chairman of the board.
AIRTRAN HOLDINGS: Outlook Remains Positive, Management Says
-----------------------------------------------------------
AirTran Holdings, Inc.'s management on November 5, 2009, conducted
a presentation at the Imperial Capital 2009 Global Opportunities
Conference.
Management said AirTran is better prepared for economic
uncertainty and that its cost advantage remains strong.
Management said the outlook for AirTran remains positive:
-- Track record of profitability was restored in 2009
* Record net income in 2009
* Consumers are increasingly value-oriented
* Softening consumer demand has been offset by lower fuel,
capacity reductions, and strong growth in ancillary
revenues
-- Significant non-fuel cost advantage versus competitors will
remain intact
-- Balance sheet has been strengthened
* $172.5 million capital raise and extension of $175 million
credit facility
A full-text copy of the Presentation provided at the Imperial
Capital 2009 Global Opportunities Conference, is available at no
charge at http://ResearchArchives.com/t/s?48fe
During the three months ended September 30, 2009, AirTran reported
net income of $10.4 million. Due to the substantial reduction in
the average cost of jet fuel per gallon and the actions the
Company has undertaken, its operating results for the quarter were
substantially improved compared to the third quarter of 2008.
During the three months ended September 30, 2008, AirTran reported
a net loss of $94.6 million.
For the nine months ended September 30, 2009, AirTran reported net
income of $117.6 million compared to a net loss of $144.7 million
for the nine months ended September 30, 2008.
As of September 30, 2009, AirTran had $2.157 billion in total
assets against total current liabilities of $774.9 million, long-
term capital lease obligations of $15.08 million, long-term debt
of $818.2 million, other liabilities of $113.8 million, deferred
income taxes of $7.992 million, and derivative financial
instruments of $12.054 million. As of September 30, 2009, AirTran
also had accumulated deficit of $100.48 million and total
stockholders' equity of $414.81 million.
AirTran's balance sheet showed strained liquidity with $634.08
million in total current assets against $774.90 million in total
current liabilities. As of September 30, 2009, AirTran had
aggregate unrestricted cash, cash equivalents, and short-term
investments of $408.2 million, and AirTran also had $55.2 million
of restricted cash.
A full-text copy of AirTran's quarterly report is available at no
charge at http://ResearchArchives.com/t/s?47d2
About AirTran Holdings
Headquartered in Orlando Florida, AirTran Holdings Inc. (NYSE:
AAI) -- http://www.airtran.com/-- a Fortune 1000 company, is the
parent company of AirTran Airways, which has been ranked the
number one low-cost carrier in the Airline Quality Rating study
for the past two years. AirTran is the only major airline with
Wi-Fi on every flight and offers coast-to-coast service on North
America's newest all-Boeing fleet. Its low-cost, high-quality
product also includes assigned seating, Business Class and
complimentary XM Satellite Radio on every flight.
* * *
As reported by the Troubled Company Reporter on October 7, 2009,
Moody's Investors Service affirmed the Caa2 corporate family and
probability of default ratings of AirTran Holdings Corp., Inc.,
the Ca rating on AirTran's $96 million senior unsecured
convertible notes due in 2023 and also the SGL-4 Speculative Grade
Liquidity Rating. Moody's also changed the ratings outlook to
stable from negative.
The TCR said on July 10, 2009, Standard & Poor's Ratings Services
affirmed the airline's corporate credit rating at CCC+/Stable/--.
ALL LAND INVESTMENTS: RBS Citizens Objects to Maschmeyer Hiring
---------------------------------------------------------------
RBS Citizens, N.A., has objected to All Land Investments, LLC's
hiring of Maschmeyer Karalis P.C. as lead bankruptcy counsel.
RBS Citizens has a first priority mortgage lien on virtually all
of the Debtor's assets. According to RBS Citizens, the Debtor's
primary assets consist of the remaining phases and lots at the Old
Country Farms residential development. RBS Citizens' claims
against the Debtor has continued to accrue interest and attorneys
fees since June 19, 2009.
RBS Citizens claims that the Debtor's bankruptcy filing was done
in bad faith and therefore the creditor reserves its right to file
a motion to dismiss the case.
Newark, Delaware-based All Land Investments, LLC, operates a real
estate business. The Company filed for Chapter 11 bankruptcy
protection on October 29, 2009 (Bankr. D. Del. Case No. 09-13790).
The Company listed $10,000,001 to $50,000,000 in assets and
$10,000,001 to $50,000,000 in liabilities.
ALLIED CAPITAL: Posts $140 Million Net Loss in Q3 2009
------------------------------------------------------
Allied Capital Corporation disclosed Thursday financial results
for the 2009 third quarter.
Net loss for the quarter ended Sept. 30, 2009, was $140.7 million
or $0.79 per share, which included loss on extinguishment of debt
of $117.5 million or $0.66 per share, as compared to net loss of
$318.3 million or $1.78 per share for the quarter ended September
30, 2008.
For the quarter ended Sept. 30, 2009, net investment income was
$9.6 million or $0.05 per share compared to net investment income
of $45.6 million or $0.26 per share for the quarter ended
September 30, 2008.
For the quarter ended September 30, 2009, the Company had net
realized losses of $5.1 million or $0.03 per share, compared to
net realized gains of $62.0 million or $0.35 per share for the
quarter ended September 30, 2008.
For the quarter ended September 30, 2009, the sum of net
investment income and net realized losses was income of
$4.5 million or $0.02 per share. For the quarter ended
September 30, 2008, the sum of net investment income and net
realized gains was income of $107.6 million or $0.60 per share.
For the quarter ended September 30, 2009, net change in unrealized
appreciation or depreciation was a decrease of $27.7 million or
$0.15 per share. Net unrealized depreciation for the quarter was
increased by additional net depreciation due to changes in
portfolio value of $36.4 million or $0.20 per share and the
reversal of previously recorded unrealized appreciation associated
with realized gains and dividend income of $9.3 million or $0.05
per share. Net unrealized depreciation for the quarter was
reduced by $18.0 million or $0.10 per share due to the reversal of
previously recorded unrealized depreciation associated with
realized losses.
For the quarter ended September 30, 2008, net change in unrealized
appreciation or depreciation was a decrease of $425.9 million or
$2.38 per share. The net unrealized depreciation for the third
quarter of 2008 resulted from net declines in investment values of
$378.7 million or $2.12 per share and the reversal of net
unrealized appreciation associated with net realized gains of
$47.2 million or $0.26 per share.
Liquidity and Operations
During the third quarter of 2009, the company completed a
comprehensive restructuring of its private notes and its bank
facility. In connection with the restructuring, the company's
existing private notes were exchanged for three new series of
notes. The Series A Notes, which have a principal amount of
$253.8 million, mature on June 15, 2010; the Series B Notes, which
have a principal amount of $253.8 million, mature on June 15,
2011; and the Series C Notes, which have a principal amount of
$333.5 million, mature primarily on March 31, 2012, with the
remainder maturing on April 1, 2012. The company's revolving line
of credit was restructured into a term facility maturing on
November 13, 2010, and the $46 million of letters of credit
outstanding at the time of restructure remained with the facility.
As of September 30, 2009, all of the letters of credit have
expired or terminated. The company also granted the private
noteholders and lenders under the bank facility a pari-passu
blanket lien on a substantial portion of its assets, including a
substantial portion of the assets of the company's consolidated
subsidiaries. The company incurred various closing fees and other
costs to complete the restructuring. A portion of the closing
costs incurred were recorded as a loss on the extinguishment of
debt in the company's results of operations in the third quarter
of 2009. The remainder were deferred and are being amortized over
the respective remaining terms of the notes and the bank facility.
The loss on extinguishment of debt recorded during the third
quarter of 2009 was $117.5 million.
The company has focused its efforts on selling assets in its
portfolio in order to generate capital to improve its liquidity
and de-lever its balance sheet. During the three and nine months
ended September 30, 2009, the company sold or had repayments on
portfolio investments that generated cash proceeds of
$63.5 million and $650.8 million, respectively. At September 30,
2009, the company had cash and money market and other securities
totaling $152.8 million as compared to $50.7 million at
December 31, 2008. During the third quarter of 2009, the company
repaid $174 million of its outstanding debt in connection with the
restructuring discussed above.
From September 30, 2009, through November 2, 2009, the company has
collected additional cash proceeds totaling approximately
$195 million, including cash proceeds of $165 million from sale of
the company's interest in the Senior Secured Loan Fund LLC
(formerly Unitranche Fund LLC). The company has also paid down an
additional $94 million of private debt since September 30, 2009,
and has cash and money market and other securities of $273 million
as of November 2, 2009.
At September 30, 2009, the company had borrowings on its bank term
debt of $50.0 million, outstanding private notes of $841.0 million
and outstanding public debt of $745.5 million. During the nine
months ended September 30, 2009, the company repurchased publicly
issued notes in the market with a total par value of
$134.5 million for a total cost of $50.3 million. The company did
not repurchase any publicly issued notes during the three months
ended September 30, 2009. The company recognized a gain on
repurchase of debt of $83.5 million for the nine months ended
September 30, 2009.
Portfolio and Investment Activity
The company has reduced new investment activity as part of its
efforts to conserve capital and reduce outstanding debt.
Investments funded for the quarter ended September 30, 2009,
totaled $19.4 million, primarily related to pre-existing
investment commitments. In addition, the company funded
$46.0 million related to letters of credit issued in connection
with term securitizations completed by Ciena Capital, LLC. During
the quarter, principal collections related to investment
repayments or sales totaled $63.5 million.
At September 30, 2009, the total portfolio at value was
$2.511 billion, including interest-bearing investments of
$2.1 billion with a weighted average yield of 11.9%.
Portfolio Quality
Loans and debt securities over 90 days delinquent at September 30,
2009, were $129.1 million or 5.1% of the portfolio at value. At
December 31, 2008, loans and debt securities over 90 days
delinquent were $108.0 million or 3.1% of the portfolio at value.
Excluding the company's senior loan to Ciena Capital LLC, loans
and debt securities over 90 days delinquent were $26.9 million or
1.1% of the portfolio at value at September 30, 2009, as compared
to $3.1 million or 0.1% of the portfolio at value at December 31,
2008.
Loans and debt securities not accruing interest at September 30,
2009, were $315.0 million or 12.5% of the portfolio at value, as
compared to $335.6 million or 9.6% of the portfolio at value at
December 31, 2008. Excluding the company's senior loan to Ciena
Capital LLC, loans on non-accrual were $212.7 million or 8.5% of
the portfolio at value at September 30, 2009, as compared to
$230.7 million or 6.6% of the portfolio at value at December 31,
2008.
Loans and debt securities on non-accrual and over 90 days
delinquent totaled $129.1 million at September 30, 2009 and
$108.0 million at December 31, 2008.
Merger Agreement
On October 26, 2009, the company entered into an Agreement and
Plan of Merger with Ares Capital Corporation. The merger
agreement provides that Allied Capital will merge into Ares
Capital with Ares Capital being the surviving company. Upon
consummation of the merger, each share of the company's common
stock will be converted into and become exchangeable for 0.325
common shares of Ares Capital Corporation. Consummation of the
merger, which is currently anticipated to occur by the end of the
first quarter of 2010, is subject to certain conditions,
including, among others, Allied Capital stockholder approval, Ares
Capital stockholder approval, required regulatory approvals,
receipt of certain Ares Capital and Allied Capital lender consents
and other customary closing conditions.
Balance Sheets
At September 30, 2009, the Company's consolidated balance sheets
showed $2.840 billion in total assets, $1.639 billion in total
liabilities, and $1.201 bilion in total shareholders' equity.
A full-text copy of the Company's consolidated financial
statements for the three months ended September 30, 2009, is
available for free at http://researcharchives.com/t/s?48f6
Going Concern Doubt
In its audit report on the Company's financial statements for the
fiscal year ended December 31, 2008, KPMG LLP, the Company's
independent registered public accounting firm, expressed
substantial doubt about the Company's ability to continue as a
going concern. Prior to the Company's debt restructure, certain
events of default occurred under the Company's bank credit
facility and the Company's private notes. These events of default
provided the respective lenders the right to declare immediately
due and payable unpaid amounts approximating $1.1 billion at
June 30, 2009.
With the completion of the comprehensive restructuring of the
Company's private notes and bank facility during the third quarter
of 2009, the factors that gave rise to the uncertainty about the
Company's ability to continue as a going concern have been
remediated.
About Allied Capital
Allied Capital (NYSE: ALD) - http://www.alliedcapital.com/-- is a
business development company that is regulated under the
Investment Company Act of 1940. Allied Capital has a portfolio of
investments in the debt and equity capital of middle market
businesses nationwide. Founded in 1958 and operating as a public
company since 1960, Allied Capital has been investing in the U.S.
entrepreneurial economy for 50 years. Allied Capital has a
diverse portfolio of investments in 88 companies across a variety
of industries.
* * *
This concludes the Troubled Company Reporter's coverage of Allied
Capital until facts and circumstances, if any, emerge that
demonstrate financial or operational strain or difficulty at a
level sufficient to warrant renewed coverage.
ALLIS-CHALMERS: Posts $10.3 Million Net Loss in Q3 2009
-------------------------------------------------------
Allis-Chalmers Energy Inc. disclosed last week results for the
third quarter ended September 30, 2009.
The Company reported a net loss attributed to common stockholders
for the third quarter of 2009 of $10.3 million, or $0.14 per
diluted share, after preferred stock dividend, compared to net
income of $12.3 million, or $0.35 per diluted share in the third
quarter of 2008. Revenues for the third quarter of 2009 decreased
32.7% to $120.0 million compared to $178.3 million for the third
quarter of 2008.
Results for the third quarter of 2009 include $1.1 million of
severance payments and a $500,000 addition to the allowance for
bad debts.
Allis-Chalmers reported a net loss attributed to common
stockholders for the first nine months of 2009 of $13.0 million,
or $0.27 per diluted share, after preferred stock dividend,
compared to net income of $30.9 million, or $0.87 per diluted
share for the first nine months of 2008. Revenues for the first
nine months of 2009 decreased 23.6% to $377.6 million compared to
$494.6 million for the first nine months of 2008.
Results for the first nine months of 2009 include a pre-tax gain
of $26.4 million on debt extinguishment associated with the
repurchase of $74.8 million of senior notes in June 2009 and non-
routine and restructuring charges totaling $12.5 million. These
charges include a $4.1 million addition to the allowance for bad
debts, $3.2 million in restructuring charges consisting of
severance payments and the closing of certain yard locations, a
$3.2 million non-cash loss on an asset disposition and inventory
writedowns and $2.0 million of customer credits.
The Company said that the decrease in revenues and net income in
the third quarter and the first nine months of 2009, as compared
to the third quarter and the first nine months of 2008, was due
primarily to the drop in the U.S. rig count, equipment utilization
and pricing.
Adjusted EBITDA was $20.6 million for the third quarter of 2009,
compared to $48.3 million for the third quarter of 2008. For the
first nine months of 2009 Adjusted EBITDA was $67.8 million
compared to $136.9 million for the first nine months of 2008.
Adjusted EBITDA does not include the $26.4 million pre-tax gain on
debt extinguishment in the second quarter of 2009 and certain non-
routine and restructuring charges.
Weighted average shares of common stock outstanding on a diluted
basis increased to 70.9 million for the third quarter of 2009
compared to 35.6 million for the third quarter of 2008. For the
nine month period ended September 30, 2009, weighted average
shares of common stock outstanding on a diluted basis were
47.8 million compared to 35.5 million for the first nine months of
2008.
Micki Hidayatallah, Allis-Chalmers' chairman and chief executive
officer stated, "Our revenues and operating results improved
modestly in the third quarter compared to the second quarter of
2009. Total revenues increased in the quarter by $7.5 million, or
6.7%, compared to the second quarter of 2009. Revenues for our
Oilfield Services segment also increased sequentially by
$2.4 million, or 8.2%, compared to the second quarter of this
year. While the domestic pricing environment remains very
competitive, we have seen a slight increase in utilization in our
Oilfield Services segment and are realizing the benefits from our
cost reduction measures. With the stabilization of the U.S. rig
count and the financial markets we have begun to see the benefits
of our strategy to: (1) redeploy assets and resources to the areas
with the highest utilization rates and greatest growth potential
such as the Haynesville, Marcellus and Eagle Ford shales; (2)
increase market share and diversify our customer base through our
new account management system and our emphasis on high technology
products and services; and (3) reduce our workforce and close or
scale back certain satellite locations. As opportunities arise,
we are also redeploying idle Rental and Oilfield Services assets
to Brazil, Columbia, Mexico and the Middle East."
Mr. Hidayatallah continued, "Our Drilling and Completion segment
with operations in Argentina, Brazil and Bolivia has shown an
improvement in day rates and revenues. Revenues for this segment
increased in the quarter by $8.5 million, or 12.5%, compared to
the second quarter of 2009. While we were successful during the
quarter in increasing prices, it has been difficult to recoup
rapidly increasing wages and other costs in their entirety in
Argentina. In October, we relocated two drilling rigs from
Argentina to Brazil where our operations have performed above
expectations. In December, we expect to mobilize a 3000hp
drilling rig from Argentina to begin a contract in Bolivia. In an
effort to reduce our costs and redeploy equipment elsewhere from
Argentina we have reduced our workforce by approximately 100
people and incurred severance costs of $1.4 million over the past
nine months."
At September 30, 2009, the Company's consolidated balance sheets
showed $1.076 billion in total assets, $582 million in total
liabilities, and $494 million in total shareholders' equity.
A full-text copy of the Company's consolidated financial
statements for the three months ended September 30, 2009, is
available for free at http://researcharchives.com/t/s?48f7
Liquidity
As of September 30, 2009, the Company had $85.7 million available
for borrowing under its amended and restated revolving credit
facility. Cash and cash equivalents were $41.6 million at
September 30, 2009, compared to $6.9 million at December 31, 2008.
During the nine months ended September 30, 2009, operating
activities provided $37.5 million in cash. Net loss for the nine
months ended September 30, 2009, was $12.3 million. Non-cash
expenses totaled $34.4 million during the first nine months of
2009.
During the nine months ended September 30, 2009, changes in
operating assets and liabilities provided $15.4 million in cash,
principally due to a decrease in accounts receivable of
$59.5 million, a decrease in prepaid expenses and other current
assets of $3.3 million and a decrease in inventory of
]$3.9 million, offset in part by a decrease in accounts payable of
$29.0 million, a decrease in accrued interest of $12.5 million and
a decrease in accrued expenses of $11.6 million.
During the nine months ended September 30, 2008, operating
activities provided $74.3 million in cash. Net income for the
nine months ended September 30, 2008, was $30.9 million. Non-cash
expenses totaled $60.8 million during the first nine months of
2008.
During the nine months ended September 30, 2008, changes in
operating assets and liabilities used $17.4 million in cash,
principally due to an increase of $30.6 million in accounts
receivable, a decrease in accrued interest of $10.8 million, an
increase of $7.0 million in inventories, an increase of
$2.3 million in other assets, offset in part by an increase of
$16.6 million in accounts payable, an increase of $4.8 million in
accrued salaries, benefits and payroll taxes and an increase of
$12.1 million in accrued expenses.
During the nine months ended September 30, 2009, the Company used
$49.4 million in investing activities, consisting of $67.3 million
for capital expenditures, $1.1 million of additional investments,
offset by a decrease of $7.1 million in other assets, $8.0 million
of proceeds from equipment sales and $3.9 million in insurance
proceeds for a drilling rig destroyed by a blow-out.
During the nine months ended September 30, 2008, the Company used
$163.8 million in investing activities, consisting of
$117.8 million for capital expenditures, a $40.0 million
convertible subordinated secured note from BCH, $9.2 million for
deposits on equipment purchases for the Drilling and Completion
segment, $5.8 million for purchases of investment opportunities,
offset by $9.0 million of proceeds from asset sales.
During the nine months ended September 30, 2009, financing
activities provided $46.7 million in cash. The Company raised
$120.3 million net of expenses from the issuance of common and
preferred stock, and borrowed $25.0 million under a loan facility
to acquire two drilling rigs, offset in part by repayments of
$61.5 million of long-term debt and a net repayment on the
revolving credit facility of $36.5 million. The Company also
incurred $644,000 in debt issuance costs consisting of $513,000 on
the revolving credit facility, primarily to modify the loan
covenants, and $131,000 on the rig financing agreement.
During the nine months ended September 30, 2008, financing
activities provided $52.6 million in cash. The Company received
$38.5 million from net borrowings under the revolving line of
credit and an additional $20.0 million in proceeds from long-term
debt and repaid $6.5 million in borrowings under long-term debt
facilities. The Company also received $633,000 in proceeds from
the exercise of options and warrants.
At September 30, 2009, the Company had $495.4 million in
outstanding indebtedness, of which $478.7 million was long-term
debt and $16.7 million is due within one year.
About Allis-Chalmers Energy
Houston, Texas-based Allis-Chalmers Energy Inc. (NYSE: ALY) --
http://www.alchenergy.com/-- is a multi-faceted oilfield services
company. Allis-Chalmers provides services and equipment to oil
and natural gas exploration and production companies, domestically
primarily in Texas, Louisiana, New Mexico, Oklahoma, Arkansas,
offshore in the Gulf of Mexico, and internationally, primarily in
Argentina, Brazil and Mexico. Allis-Chalmers provides directional
drilling services, casing and tubing services, underbalanced
drilling, production and workover services with coiled tubing
units, rental of drill pipe and blow-out prevention equipment, and
international drilling and workover services.
* * *
As reported by the Troubled Company Reporter on July 15, 2009,
Standard & Poor's Ratings Services raised its corporate credit
rating on Allis-Chalmers Energy to 'B-' from 'SD' (selective
default). The outlook is negative. At the same time, S&P raised
the issue-level rating on Allis-Chalmers' unsecured notes to 'B-'
(the same as the corporate credit rating) from 'D'. S&P revised
the recovery rating on this debt to '4' from '3' indicating
expectations of average (30%-50%) recovery of principal in the
event of a payment default.
The TCR said July 9, 2009, Moody's Investors Service affirmed
Allis-Chalmers' B3 Corporate Family Rating, changed its
Probability of Default Rating to B3 from B3/LD, and upgraded its
$225 million 9% senior notes due 2014 to Caa1 (LGD 4, 62%) from
Caa3 (LGD 3, 35%) and its $205 million 8.5% senior notes due 2017
to Caa1 (LGD 4, 62%) from Ca (LGD 4, 40%). The rating outlook is
stable.
AMARAVATHI LTD: Postpetition Rents Are Property of the Estate
-------------------------------------------------------------
WestLaw reports that postpetition rents generated by apartment
properties that were property of the Chapter 11 debtors'
bankruptcy estate were themselves property of the bankruptcy
estate, a Texas bankruptcy court held as a matter of apparent
first impression, noting that neither the Fifth Circuit Court of
Appeals nor the United States Supreme Court had directly addressed
the issue. The bankruptcy court ruled that the unambiguous
language of the Bankruptcy Code dictated its ruling, which did not
lead to absurd results. Rather, the Code provision including
rents from estate property within the bankruptcy estate was part
of a "carefully crafted statutory framework" that allowed an
estate to maintain its assets, thereby enhancing the likelihood of
a successful reorganization of the debtor, while providing
adequate protection to a lender with a security interest in the
postpetition rents. In re Amaravathi Ltd. Partnership, --- B.R. -
---, 2009 WL 2432315 (Bankr. S.D. Tex.).
Headquartered in Houston, Texas, Amaravathi Limited Partnership
dba Monterone Round Rock, Mansions at Steiner Ranch, Monterone
Canyone Creek, Mansions on the Green II, Monterone Steiner Ranch,
Mansions at Canyon Creek and Mansions on the Green I, owns and
operates four apartment complexes in Round Rock and Austin, Texas.
As reported in the Troubled Company Reporter on Oct. 2, 2009, the
debtor is attempting to sell three of the four Class-A complexes.
The Company and Amaravathi Keerthi, LLC, its affiliate, filed for
Chapter 11 protection (Bankr. S.D. Tex. Case No. 09-32754) on
April 23, 2009. Kyung Shik Lee, Esq., at Diamond McCarthy Taylor
and Finley represents the Debtors in their restructuring efforts.
The Debtors estimated their assets and debts at $100 million to
$500 million in their chapter 11 petition.
AMBAC FINANCIAL: Liquidity Crisis Looms; Issues Bankruptcy Warning
------------------------------------------------------------------
Ambac Financial Group, Inc., warned in a regulatory filing with
the Securities and Exchange Commission that while management
believes the Company will have sufficient liquidity to satisfy its
needs through the second quarter of 2011, no guarantee can be
given that it will be able to pay all of its operating expenses
and debt service obligations thereafter, including maturing
principal in the amount of $143,000,000 in August 2011. In
addition, Ambac said it is possible its liquidity may run out
prior to the second quarter of 2011. Ambac said it is developing
strategies to address its liquidity needs; such strategies may
include a negotiated restructuring of its debt through a
prepackaged bankruptcy proceeding.
"No assurances can be given that Ambac will be successful in
executing any or all of its strategies. If Ambac is unable to
execute these strategies, it will consider seeking bankruptcy
protection without agreement concerning a plan of reorganization
with major creditor groups," Ambac said.
Ambac last week reported net income of $2,188,243,000 for the
three months ended September 30, 2009, from a net loss of
$2,431,377,000 for the same period a year ago. Ambac posted a net
loss of $572,740,000 for the nine months ended September 30, 2009,
from a net loss of $3,268,509,000 for the same period a year ago.
Total revenues were $2,689,511,000 for the three months ended
September 30, 2009, from $2,320,433,000 for the same period a year
ago. Total revenues were $3,344,600,000 for the nine months ended
September 30, 2009, from $2,551,250,000 for the same period a year
ago.
At September 30, 2009, Ambac had $18,099,056,000 in total assets
against $20,273,597,000 in total liabilities. At September 30,
2009, Ambac had retained deficit of $4,448,113,000 and
stockholders' deficit of $2,174,541,000.
Based on the holdings of cash, short term investments and bonds of
$164,700,000 as of September 30, 2009, management believes that
Ambac will have sufficient liquidity to satisfy its needs through
the second quarter of 2011, but no guarantee can be given that its
unit Ambac Assurance Corporation will be able to dividend amounts
sufficient to pay all of Ambac's operating expenses and debt
service obligations in the long-term, or that Ambac will be able
to access alternative sources of capital. Ambac Assurance is
unable to pay dividends in 2009 and will likely be unable to pay
dividends in 2010, absent special approval from the Office of the
Commissioner of Insurance of the State of Wisconsin, thus
constraining Ambac's principal source of liquidity. Further,
other contingencies (e.g., an unfavorable outcome of the
outstanding class action lawsuits against Ambac), could cause
additional liquidity strain.
Ambac Assurance has not written a meaningful volume of financial
guarantee business since November 2007. As such, Ambac is
actively mitigating losses in Ambac Assurance's insured portfolio
and increasing the yield on its investment portfolio to maximize
the residual value of Ambac Assurance. Further, the Company's
existing investment agreement and derivative product portfolios
are in active runoff, which may result in transaction
terminations, settlements, restructuring, assignments of and
scheduled amortization of contracts. In the course of managing
the inherent risks of these portfolios during runoff, Ambac's
Financial Services segment may enter into new financial instrument
transactions for hedging purposes to the extent it is able to do
so.
Ambac's principal business strategy going forward is to (i) grow
our business by developing new business initiatives which
capitalize on its expertise and relationships in the capital
markets and (ii) increase the residual value of its financial
guarantee business by mitigating losses on poorly performing
transactions. Ambac had intended to reactivate Everspan Financial
Guarantee Corp. for purposes of writing financial guarantee
insurance in the U.S. public finance market; however, market
conditions, among other things, hampered the Company's efforts to
raise third party capital. Since Ambac has been unable to raise
capital for Everspan, it has postponed indefinitely its efforts to
launch Everspan. Contributing factors to this decision are that
management believes that Everspan will require substantially more
capital, including third-party capital, and at least a AA S&P and
A2 Moody's rating to compete in the U.S. public finance market.
Further, the Company has not received permission from OCI to
capitalize Everspan at a level enabling it to compete in that
market, and it is unlikely that OCI will grant such permission
without substantial improvement in Ambac Assurance's financial
position by significant further progress in reducing problem
exposures.
A full-text copy of Ambac's quarterly report on Form 10-Q is
available at no charge at http://ResearchArchives.com/t/s?4918
A full-text copy of Ambac's earnings release is available at no
charge at http://ResearchArchives.com/t/s?4917
Ambac Financial Group, Inc., through its subsidiaries, provided
financial guarantees and financial services to entities in both
the public and private sectors around the world. The long-term
senior unsecured debt of Ambac is rated CC with a negative outlook
by Standard & Poor's Ratings Service, a Standard & Poor's
Financial Services LLC business, and Ca, with a negative outlook,
by Moody's Investors Services, Inc. Ambac's principal financial
guarantee operating subsidiary, Ambac Assurance Corporation, a
guarantor of public finance and structured finance obligations,
has a CC financial strength rating with a developing outlook by
S&P, and a Caa2 financial strength rating with a developing
outlook from Moody's. These ratings reflect multiple downgrades in
Ambac Assurance's financial strength ratings from June 2008
through August 2009.
AMERICAN AXLE: Files Amendment to Shelf Registration Statement
--------------------------------------------------------------
American Axle & Manufacturing, Inc., and American Axle &
Manufacturing Holdings, Inc., filed Amendment No. 1 to Form S-3
Registration Statement with the Securities and Exchange Commission
to register:
-- up to $500,000,000 in debt securities, warrants to
purchase debt securities, guarantees, common stock, $0.01
par value per share, and preferred stock in a Primary
Offering; and
-- $11,298,692 in Warrants to purchase common stock, $0.01
par value per share, and underlying shares of common stock
issuable upon exercise of warrants in a Secondary Offering
American Axle will provide the specific terms of the securities in
supplements or term sheets to the prospectus and whether an offer
will be made by American Axle, a selling security holder or both.
American Axle will not use the prospectus to confirm sales of any
securities unless it is attached to a prospectus supplement or a
term sheet.
A full-text copy of the prospectus is available at no charge at
http://ResearchArchives.com/t/s?48ff
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.
AMERIGROW RECYCLING: Filed Chapter 11 to Avert Foreclosure
----------------------------------------------------------
According to Bloomberg's Bill Rochelle, Amerigrow Recycling-Delray
LP filed for Chapter 11 in West Palm Beach, Florida, to fend off a
foreclosure of a $6 million loan on real property. Total secured
debt is $10.9 million, according to a court filing. Amerigrow
said the property was appraised for $10.2 million in 2006. It
blamed the filing on the decline in residential and commercial
construction.
Amerigrow Recycling-Delray LP is the operator of an organic
recycling facility on Delray Beach, Florida. The Company recycles
landscape debris from golf courses, commercial properties, and
residential developments. It also sells soil and mulch. Income in
2008 was $11.1 million. So far this year, revenue was $8.4
million.
Amerigrow Recycling filed for Chapter 11 on Nov. 2, 2009 (Bankr.
S.D. Fla. Case No. 09-34122). Heather L. Harmon, Esq., represents
the Debtor in its Chapter 11 effort. The petition says assets and
debts are between $10,000,001 and $50,000,000.
AMERIGROW RECYCLING: Gets 30-Day Extension for Schedules Filing
---------------------------------------------------------------
Amerigrow Recycling - Delray, Limited Partnership and its general
partner Amerigrow Recycling Corp., sought and secured from the
Hon. Erik P. Kimball of the U.S. Bankruptcy Court for the Southern
District of Florida an extension of the deadline for the filing of
statement of financial affairs and schedules of assets and
liabilities until December 17, 2009.
The Debtors said that it appears unlikely that they will be able
to complete their statements and schedules properly and accurately
by the ordinary 15-day deadline.
Delray Beach, Florida-based Amerigrow Recycling-Delray, Limited
Partnership -- dba Amerigriow Recycling, Amerigrow Soils,
Amerigrow Golf, Amerigrow Trucking, Mulching Solutions -- was
founded in 1995, and operates as a full-service organic-recycling
facility, accepting organic landscape debris at its convenient
drive-thru Delray Beach store and dumping facility. The Company
has the largest fleet of high-capacity grapple trucks in South
Florida, and offers year-round landscape debris pick-up and
disposal services for landscaping companies, golf courses and
residential communities. The Company is also a premier
manufacturer of various mulch and soil varieties. The Company's
mulch and soil sales are conducted at its retail location in
Delray Beach, and the Company also offers mulch delivery and blow-
on installation services.
The Company filed for Chapter 11 bankruptcy protection on
November 2, 2009 (Bankr. S.D. Fla. Case No. 09-34122). Heather L.
Harmon, Esq., who has an office in Miami, Florida, 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.
AMERIGROW RECYCLING: List of 20 Largest Unsecured Creditors
-----------------------------------------------------------
Amerigrow Recycling-Delray, Limited Partnership filed with the
U.S. Bankruptcy Court for the Southern District of Florida a list
of its 20 largest unsecured creditors.
A full-text copy of the Debtor's list of creditors is available
for free at http://bankrupt.com/misc/flasb09-34122.pdf
Delray Beach, Florida-based Amerigrow Recycling-Delray, Limited
Partnership -- dba Amerigriow Recycling, Amerigrow Soils,
Amerigrow Golf, Amerigrow Trucking, Mulching Solutions -- was
founded in 1995, and operates as a full-service organic-recycling
facility, accepting organic landscape debris at its convenient
drive-thru Delray Beach store and dumping facility. The Company
has the largest fleet of high-capacity grapple trucks in South
Florida, and offers year-round landscape debris pick-up and
disposal services for landscaping companies, golf courses and
residential communities. The Company is also a premier
manufacturer of various mulch and soil varieties. The Company's
mulch and soil sales are conducted at its retail location in
Delray Beach, and the Company also offers mulch delivery and blow-
on installation services.
The Company filed for Chapter 11 bankruptcy protection on
November 2, 2009 (Bankr. S.D. Fla. Case No. 09-34122). Heather L.
Harmon, Esq., who has an office in Miami, Florida, 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.
AMERIGROW RECYCLING: Taps Genovese Joblove as Gen. Bankr. Counsel
-----------------------------------------------------------------
Amerigrow Recycling-Delray, Limited Partnership and Amerigrow
Recycling Corp., its general partner, have sought the permission
of the U.S. Bankruptcy court for the Southern District of Florida
to hire Paul J. Battista and Genovese Joblove & Battista, P.A., as
general bankruptcy counsel, nunc pro tunc to November 2, 2009.
GJB will, among other things:
(a) attend meetings and negotiate with creditors and other
parties-in-interest and advise and consult on the conduct
of the case, including all of the legal and
administrative requirements of operating in Chapter 11;
(b) advise the Debtors in connection with any contemplated
sales of assets or business combinations, including the
negotiation of sales promotion, liquidation, stock
purchase, merger or joint venture agreements, formulate
and implement bidding procedures, evaluate competing
offers, draft appropriate corporate documents with
respect to the proposed sales, and counsel the Debtors in
connection with the closing of such sales;
(c) advise the Debtors in connection with post-petition
financing and cash collateral arrangements, provide
advice and counsel with respect to prepetition
financing arrangements, and provide advice to the Debtors
in connection with the emergence financing and capital
structure, and negotiate and draft documents;
(d) advise the Debtors on matters relating to the evaluation
of the assumption, rejection or assignment of unexpired
leases and executory contracts;
(e) prepare on behalf of the Debtors all motions,
applications, answers, orders, reports and papers
necessary to the administration of the estates; and
(f) negotiate and prepare on the Debtors' behalf a plan of
reorganization, disclosure statement and all related
agreements and/or documents, and take any necessary
action.
Paul J. Battista, an attorney and shareholder of GJB, says that
the firm will be paid based on the hourly rates of its
professionals:
Professional Rate
------------ ----
Paul J. Battista $525
Heather L. Harmon $330
Michael L. Schuster $225
Legal Assistants $75-$160
Mr. Battista assures the Court that GJB doesn't have interests
adverse to the interest of the Debtors' estates or of any class of
creditors and equity security holders. Mr. Battista maintains
that GJB is a "disinterested person" as the term is defined under
Section 101(14) of the Bankruptcy Code.
Delray Beach, Florida-based Amerigrow Recycling-Delray, Limited
Partnership -- dba Amerigriow Recycling, Amerigrow Soils,
Amerigrow Golf, Amerigrow Trucking, Mulching Solutions -- was
founded in 1995, and operates as a full-service organic-recycling
facility, accepting organic landscape debris at its convenient
drive-thru Delray Beach store and dumping facility. The Company
has the largest fleet of high-capacity grapple trucks in South
Florida, and offers year-round landscape debris pick-up and
disposal services for landscaping companies, golf courses and
residential communities. The Company is also a premier
manufacturer of various mulch and soil varieties. The Company's
mulch and soil sales are conducted at its retail location in
Delray Beach, and the Company also offers mulch delivery and blow-
on installation services.
The Company filed for Chapter 11 bankruptcy protection on
November 2, 2009 (Bankr. S.D. Fla. Case No. 09-34122). The
Company listed $10,000,001 to $50,000,000 in assets and
$10,000,001 to $50,000,000 in liabilities.
AMR CORP: Files Redacted Copies of Boeing Purchase Agreements
-------------------------------------------------------------
AMR Corp. filed Form 10-Q/A (Amendment No. 1) to its Quarterly
Report on Form 10-Q for the fiscal quarter ended June 30, 2009,
initially filed with the Securities and Exchange Commission on
July 15, 2009, in response to communications received from the SEC
in connection with a confidential treatment request with respect
to Exhibit 10.5, Purchase Agreement No. 1977 Supplement No. 32
dated as of June 9, 2009. AMR filed with the SEC redacted copies
of its purchase agreements with The Boeing Company.
In June 2009, AMR's American Airlines entered into an amendment to
a purchase agreement with Boeing. Pursuant to the amendment,
American exercised rights to purchase an additional eight 737-800
aircraft and the delivery of certain aircraft were rescheduled.
As a result, as of September 30, 2009, American had 12 737-800
purchase commitments for the remainder of 2009 and 45 737-800
purchase commitments for 2010. American's 737-800 purchase
commitments remain at eight in 2011. In addition to these
aircraft, American has firm commitments for 11 737-800 aircraft
and seven Boeing 777 aircraft scheduled to be delivered in
2013-2016.
American has selected GE Aviation as the exclusive provider of
engines for its expected order of Boeing 787-9 aircraft. American
previously announced plans (subject to certain reconfirmation
rights) to acquire 42 Boeing 787-9 aircraft, with the right to
acquire an additional 58 Boeing 787-9 aircraft.
As of September 30, 2009, payments for the purchase commitments
will approximate:
$315 million for the remainder of 2009,
$1.3 billion in 2010,
$350 million in 2011,
$217 million in 2012,
$478 million in 2013, and
$552 million for 2014 and beyond.
The amounts are net of purchase deposits currently held by the
manufacturer.
Through September 30, 2009, AMR secured approximately $5.3 billion
of financing ($1.9 billion relates to future financing of aircraft
deliveries) through the advance purchase of AAdvantage Miles in
the AAdvantage frequent flier program by Citibank (South Dakota),
N.A. (Citibank), issuance of pass through trust certificates,
issuance of common stock and senior convertible notes in public
offerings, issuance of senior secured notes, loans on certain
aircraft, and the sale leaseback financing of certain aircraft.
About AMR Corp.
Headquartered in Forth Worth, Texas, AMR Corporation (NYSE:
AMR) operates with its principal subsidiary, American Airlines
Inc. -- http://www.aa.com/-- a worldwide scheduled passenger
airline. At the end of 2006, American provided scheduled jet
service to about 150 destinations throughout North America, the
Caribbean, Latin America, including Brazil, Europe and Asia.
American is also a scheduled airfreight carrier, providing
freight and mail services to shippers throughout its system.
Its wholly owned subsidiary, AMR Eagle Holding Corp., owns two
regional airlines, American Eagle Airlines Inc. and Executive
Airlines Inc., and does business as "American Eagle." American
Beacon Advisors Inc., a wholly owned subsidiary of AMR, is
responsible for the investment and oversight of assets of AMR's
U.S. employee benefit plans, as well as AMR's short-term
investments.
At September 30, 2009, AMR had $25.7 billion in total assets
against total current liabilities of $7.90 billion, long-term
debt, less current maturities of $9.87 billion, obligations under
capital leases, less current obligations of $589 million, pension
and postretirement benefits of $7.00 billion, other liabilities,
deferred gains and deferred credits of $3.24 billion; resulting in
stockholders' deficit of $2.85 billion.
* * *
AMR carries a 'CCC' issuer default rating from Fitch Ratings. It
has 'Caa1' corporate family and probability of default ratings
from Moody's. It has 'B-' corporate credit rating, on watch
negative, from Standard & Poor's.
APPLETON PAPERS: Posts $31.4 Million Net Income for Q3 2009
-----------------------------------------------------------
Appleton Papers Inc. reported net sales of $222.3 million for the
third quarter ended October 4, 2009, compared to net sales of
$255.7 million for third quarter 2008. Third quarter 2009 net
sales decreased 13.1 percent compared to third quarter 2008. The
decrease was largely due to volume shortfalls, price pressure and
unfavorable product mix.
Appleton recorded operating income of $7.9 million for third
quarter 2009 compared to an operating loss of $13.3 million in
third quarter 2008. Despite lower shipment volumes, unfavorable
pricing and $4.2 million of costs incurred as a result of a debt-
for-debt exchange, operating income in the current period was
positively impacted by manufacturing cost reductions, decreased
distribution costs and a $5.0 million alternative fuels tax credit
recorded as a reduction to cost of sales. Third quarter 2008
included a $17.7 million goodwill impairment charge recorded in
the Performance Packaging segment and $5.2 million of start-up
costs associated with the Ohio paper mill expansion.
Appleton reported net income from continuing operations of
$31.4 million for third quarter 2009 compared to net loss from
continuing operations of $25.8 million for the same quarter of
2008. On September 30, 2009, Appleton completed a voluntary debt-
for-debt exchange which resulted in net debt extinguishment income
of $37.4 million.
Appleton's net sales for the first nine months of 2009 were
$648.3 million. This was a decrease of 12.7 percent when compared
to same period 2008 net sales of $742.4 million. Appleton
reported income from continuing operations of $39.9 million for
the nine months ended October 4, 2009, which included the
$37.4 million net gain on debt extinguishment and $13.0 million of
alternative fuels tax credit, compared to a loss of $4.2 million
for the same period last year. During the first nine months of
2008, Appleton recorded a $22.3 million net litigation settlement
gain; the result of prevailing in a lawsuit to recover previously
incurred costs from an insurance carrier, which was partially
offset by the $17.7 million goodwill impairment charge.
"We delivered a solid performance for the third consecutive
quarter. We reduced spending and inventories, generated strong
cash flow of $32 million, improved our balance sheet through
$60 million of debt reduction and recorded $31 million of net
income," said Mark Richards, Appleton's chairman, president and
chief executive officer.
"Our strategy throughout this recession is to stay intensely
focused on the fundamentals of our business and the needs of our
customers. These results are a testament to the resolve of our
employees to execute and deliver improved performance despite the
extraordinary economic challenges," Mr. Richards stated.
Balance Sheet
On September 30, 2009, Appleton completed a voluntary debt-for-
debt exchange of significant portions of its 8.125% senior notes
payable due June 2011 and 9.75% senior subordinated notes payable
due June 2014. Weak economic conditions and frozen credit markets
caused many corporate bonds, including those issued by Appleton,
to trade well below face value. Appleton took advantage of the
opportunity to significantly reduce its total indebtedness, plus
extend maturities and simplify its debt structure, by exchanging
existing debt at less than face value. This transaction exchanged
$92.0 million of senior notes for $92.0 million of newly issued
11.25% second lien notes payable due December 2015 and
$110.3 million of senior subordinated notes for $66.2 million of
newly issued 11.25% second lien notes.
At the same time, Appleton and its lenders under the senior
secured credit facilities entered into agreements to amend certain
provisions of the credit facilities. In addition, $3.0 million of
fees were recorded, $3.7 million of previously capitalized debt
issuance costs were written off and a net gain from debt
extinguishment of $37.4 million was recorded during third quarter
2009. As a result of these transactions and steady repayment of
the revolving credit facility, total debt at October 4, 2009, of
$564.9 million, was $60.0 million less than at the end of second
quarter 2009.
As of October 4, 2009, Appleton had $830.1 million in total assets
against total current liabilities of $151.1 million, long-term
debt of $558.9 million, postretirement benefits other than pension
of $45.7 million, accrued pension of $102.7 million, environmental
liability of $38.1 million, other long-term liabilities of
$9.8 million, redeemable common stock of $133.6 million,
accumulated deficit of $114.1 million, and accumulated other
comprehensive loss of $95.9 million.
During third quarter 2009, Appleton generated cash from operations
of $31.5 million. This compares to $12.3 million of cash generated
by operations during second quarter 2009 and $8.3 million of cash
used by operations during third quarter 2008. Continued diligent
management of working capital contributed $28.9 million to this
quarter's cash from operations. During the third quarter 2009,
Appleton contributed $10 million to its pension fund. As of
October 4, 2009, Appleton was in compliance with its various debt
covenants.
Outlook
Mr. Richards said the Company currently expects to see a period of
economic equilibrium where business conditions neither deteriorate
nor improve significantly. Nonetheless, the Company expects its
fourth quarter 2009 results will show significant improvement over
the same period in 2008. Mr. Richards noted several reasons for
that optimism. Appleton felt the greatest impact of the recession
in the fourth quarter of 2008. Since then both the economy and the
Company have shown improvements. Also, Appleton will continue to
benefit from its already completed cost reductions, the strength
of its market positions and ongoing growth of its international
sales efforts.
"The past 12 months have made us more agile and flexible," said
Mr. Richards. Mr. Richards added that he expects a general
economic recovery will be gradual and that the Company is
committed to executing successfully throughout that period.
"Based on what we have accomplished so far this year, we remain
cautiously optimistic about the prospects for continued business
improvement in the fourth quarter and beyond," said Mr. Richards.
"We will build on our many strengths and the confidence our
customers have in our ability to serve them."
A full-text copy of the Company's quarterly report on Form 10-Q is
available at no charge at http://ResearchArchives.com/t/s?4900
A full-text copy of the Company's earnings release is available at
no charge at http://ResearchArchives.com/t/s?4901
Distressed Exchange
As reported by the TCR on August 20, 2009, Standard & Poor's
Ratings Services lowered its corporate credit rating on Appleton
Papers to 'CC' from 'B'. At the same time, S&P lowered the issue-
level ratings on the company's senior notes and subordinated notes
to 'C' from 'CCC+'. The outlook is negative. S&P also placed
'B+' issue-level rating on the Company's secured bank credit
facilities on CreditWatch with negative implications. The
recovery rating remains '2', indicating S&P's expectation of
substantial (70% to 90%) recovery in the event of payment default.
The rating actions follow Appleton's announcement that it is
offering to exchange $200 million of proposed new second-lien
secured notes for the outstanding senior unsecured and
subordinated notes in its capital structure. In the case of the
subordinated notes, the exchange for the new notes would represent
a substantial discount to the par amount. For the senior
unsecured notes, the exchange for the new notes would be at par,
while the maturity would be extended beyond the original maturity
of the existing notes. "As a result, S&P view the exchanges as
being tantamount to default given Appleton's stressed and highly
leveraged financial risk profile and S&P's concerns around
Appleton's ability to service its current capital structure over
the intermediate term due to the challenging operating
environment," said Standard & Poor's credit analyst Andy Sookram.
The TCR also said Moody's Investors Service assigned a B3 rating
to Appleton Papers' proposed new secured notes due 2015 and
downgraded the company's existing senior subordinated notes to Ca
from Caa1. At the same time, Moody's downgraded the company's
probability of default rating to Caa3 from B2. Moody's also
affirmed the company's B2 corporate family rating and speculative
grade liquidity rating of SGL-4. The outlook remains negative.
Because the exchange offer for the senior subordinated debt is
being done at 60% of par, and nonconsenting holders of the
existing senior unsecured and senior subordinated notes will lose
certain rights and be effectively subordinated to the new notes,
Moody's views the exchange offer to be a distressed exchange,
which is an event of default under Moody's definition of default.
About Appleton Papers
Appleton Papers Inc., headquartered in Appleton, Wisconsin,
develops and manufactures specialty coated paper products,
including carbonless paper, thermal paper, and other specialty
papers. It also develops and manufactures flexible packaging
products.
ARMSTRONG WORLD: Liberty Mutual to Pay $300 Mil. to Asbestos Trust
------------------------------------------------------------------
Reorganized Armstrong World Industries, Inc., and the Armstrong
World Industries, Inc., Asbestos Personal Injury Settlement Trust
ask the Honorable Judith K. Fitzgerald in the U.S. Bankruptcy
Court for the District of Delaware and the Honorable Eduardo C.
Robreno in the U.S. District Court for the Eastern District of
Pennsylvania to approve a settlement agreement with Liberty Mutual
Insurance Company under which the insurer agrees to pay the
Asbestos Trust $300 million upon approval of the settlement
agreement plus an additional $115 million seven years from now if
the amount of Asbestos Claims resolved by the Trust totals at
least $3.4 billion.
This settlement resolves all coverage disputes asserted in
Armstrong v. Liberty Mutual, Case No. 02-cv-04360 (E.D. Pa.);
Armstrong v. Liberty Mutual, Case No. 04-cv-00499 (E.D. Pa.); and
Biondi fka Baar, et al. v. Liberty Mutual, Case No. 08 L 006532
(Ill. Cir. Ct., Cook Cty.).
In exchange for these cash payments, Liberty Mutual will receive
all of the protections of the Asbestos PI Permanent Channeling
Injunction as a PI Protected Party under Armstrong's confirmed
Chapter 11 plan and 11 U.S.C. Sec. 524(g).
The Trust is represented by:
Kevin E. Irwin, Esq.
Sue A. Erhart, Esq.
Jennifer J. Morales, Esq.
KEATING MUETHING & KLEKAMP PLL
One East Fourth Street, Suite 1400
Cincinnati, OH 45202
Liberty Mutual is represented by:
A. Hugh Scott, Esq.
Choate, Hall & Stewart LLP
Two International Plaza
Boston, MA 02110
ASARCO LLC: Steelworkers Win Pension Benefits for 19 EX-Workers
---------------------------------------------------------------
Nineteen members of the United Steelworkers union who were
employed at the Asarco smelter in El Paso will receive full
pension benefits as a result of an arbitrator's decision issued
late last week.
"Each of these former employees worked at the El Paso smelter for
over 20 years," said Bob LaVenture, USW District 12 Director.
"They should have received these benefits eight years ago. It is
unfortunate that it took so long, but we are glad that they will
finally receive the pensions they were due."
Asarco suspended operations at its copper smelter in El Paso,
Texas in February 1999, laying off 350 employees. Approximately
100 employees retired in the two years following the curtailment,
and the USW bargained early retirement benefits for other long-
term employees affected by the layoff in June 2001. However,
after the agreement was reached, the company and USW disagreed on
whether eligibility for the early retirement benefits was to be
measured as of the last day worked or the date of the June 30,
2001 labor agreement. The dispute was tied up for years in
litigation, until last week when an arbitrator ruled that the
nineteen workers are entitled to monthly pension benefits,
retroactive to June 30, 2001.
"Because of the passage of time, many of these former employees
may have forgotten about this dispute," Mr. LaVenture said. "I am
proud that the USW never gave up and continued to fight for their
benefits. This is what unions are all about."
Each of the eligible former retirees will receive a pension of
approximately $800 per month, monthly supplement of $300 until age
62 and retiree health care benefits.
On February 3, 2009, Asarco LLC announced that it would not reopen
the El Paso smelter, ending several years of controversy over the
restart of the facility and renewal of its air permits. Asarco
filed for chapter 11 bankruptcy protection on August 9, 2005.
Former Asarco employees with questions about their pension
benefits should contact the Company at (520) 798-7500 for more
information or to update the pension plan administrator on changes
in address or apply for benefits.
The USW represents hourly employees at the Asarco facilities in
Amarillo, Texas; Hayden, Arizona (Hayden smelter and Ray copper
mine); Sahuarita, Arizona (Mission mine); and Marana, Arizona
(Silver Bell mine).
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)
AURORA OIL: Ch. 11 Plan Confirmation Hearing Set for December 10
----------------------------------------------------------------
The Hon. Scott W. Dales of the U.S. Bankruptcy Court for the
Western District of Michigan approved the Disclosure Statement
explaining the adequacy of the Chapter 11 plan of Aurora Oil & Gas
Corporation and Hudson Pipeline & Processing Co., LLC.
A confirmation hearing of the Plan will be held on
Dec. 10, 2009, in Room No. 210, U.S. Bankruptcy Court, One
Division Avenue, N., Grand Rapids, Michigan at 10:00 a.m.
(Prevailing Eastern Time.) Objections, if any, are due on
Dec. 7, 2009, at 5:00 p.m. (Prevailing Eastern Time.)
As reported in the Troubled Company Reporter on Oct. 12, 2009,
holders of administrative claims and DIP facility claims will be
paid in full, in cash. Under the Plan, outstanding letters of
credit issued under the debtor-in-possession financing facility
may be converted to LoCs issued under the exit facility.
According to the Disclosure Statement, first lien lenders owed in
excess of $73.8 million will recover 63% of their claims through
the issuance of new secured notes and 32 million shares of the
preferred stock of reorganized Aurora. Holders of second lien
loan claims in excess of $56 million will receive 56 million
shares of class A common stock of reorganized Aurora, for a
0.000002% recovery.
Holders of general unsecured claims against Aurora will receive
their pro rata share of $150,000 cash allocated to them, for a 6%
to 9% recovery. Holders of allowed general unsecured claims
against HPPC will split $50,000 in cash, for a recovery of 72% to
100%. Holders of existing common stock won't receive anything.
The Court also set Dec. 7, 2009, at 5:00 p.m. (Prevailing Eastern
Time) as the voting deadline. All ballots must be delivered to:
if by mail:
Donlin, Recano & Company, Inc.
Re: Aurora Oil & Gas Corporation
Attn: Voting Department
P.O. Box 2034
Murray Hill Station
New York, NY 10156
if by hand delivery or overnight courier:
Donlin, Recano & Company, Inc.
Re: Aurora Oil & Gas Corporation
Attn: Voting Department
419 Park Avenue South
New York, NY 10016
A copy of the Plan filed on October 7, 2009, is available for free
at http://bankrupt.com/misc/AuroraOil_DiscStatement.pdf
A copy of the Disclosure Statement is available for free at:
http://bankrupt.com/misc/AuroraOil_Plan.pdf
Based in Traverse City, Michigan, Aurora Oil & Gas Corporation
(Pink Sheets: AOGS) is an independent energy company focused on
unconventional natural gas exploration, acquisition, development
and production, with its primary operations in the Antrim Shale of
Michigan, the New Albany Shale of Indiana and Kentucky.
The Company and one affiliate filed for Chapter 11 protection on
July 12, 2009 (Bankr. W.D. Mich. Case Nos. 09-08254 and 09-08255).
Judge Scott W. Dales presides over the case. Stephen B. Grow,
Esq., at Warner Norcross & Judd, LLP, in Grand Rapids, Michigan;
and Joel H. Levitin, Esq., and Richard A. Stieglitz, Jr., at
Cahill Gordon & Reindel LLP, in New York, serve as the Debtors'
counsel. Aurora listed between $100 million and $500 million each
in assets and debts.
AURORA OIL: Plan Filing Exclusivity Extended Until Dec. 9
---------------------------------------------------------
The Hon. Scott W. Dales of the U.S. Bankruptcy Court for the
Western District of Michigan extended Aurora Oil & Gas Corporation
and Hudson Pipeline & Processing Co., LLC's exclusive periods to
file a plan of reorganization and to solicit acceptances of that
plan until Dec. 9, 2009, and Feb. 8, 2010, respectively.
Based in Traverse City, Michigan, Aurora Oil & Gas Corporation
(Pink Sheets: AOGS) is an independent energy company focused on
unconventional natural gas exploration, acquisition, development
and production, with its primary operations in the Antrim Shale of
Michigan, the New Albany Shale of Indiana and Kentucky.
The Company and one affiliate filed for Chapter 11 protection on
July 12, 2009 (Bankr. W.D. Mich. Case Nos. 09-08254 and 09-08255).
Judge Scott W. Dales presides over the case. Stephen B. Grow,
Esq., at Warner Norcross & Judd, LLP, in Grand Rapids, Michigan;
and Joel H. Levitin, Esq., and Richard A. Stieglitz, Jr., at
Cahill Gordon & Reindel LLP, in New York, serve as the Debtors'
counsel. Aurora listed between $100 million and $500 million each
in assets and debts.
AVIS BUDGET: Adopt Majority Voting Standard in Director Elections
-----------------------------------------------------------------
Avis Budget Group, Inc., reports that on November 5, 2009,
following approval by its Board of Directors, the Company amended
and restated in their entirety the Company's Amended and Restated
By-Laws principally to adopt a majority voting standard in
uncontested director elections. The Amended By-Laws also reflect
certain related changes, clarifications and corrections and became
effective immediately upon adoption by the Board.
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.
At September 30, 2009, the Company had $9.96 billion in total
assets against total current liabilities of $858 million, total
liabilities exclusive of liabilities under vehicle programs of
$3.85 billion, and liabilities under vehicle programs of
$5.88 billion, resulting in stockholders' equity of $229 million.
* * *
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/--).
BARZEL INDUSTRIES: S&P Withdraws 'D' Corporate Credit Rating
------------------------------------------------------------
Standard & Poor's Ratings Services said it withdrew its 'D' long-
term corporate credit rating on steel service center Barzel
Industries Inc. following the company's plan to sell all of its
assets as part of its restructuring process.
At the same time, S&P also withdrew its 'D' issue-level rating and
'5' recovery rating on the company's first-lien senior secured
debt.
BAYARD WILLIAM: Taps Robert A. Angueira as Bankruptcy Counsel
-------------------------------------------------------------
Bayard William Spector has asked for permission from the U.S.
Bankruptcy Court for the Southern District of Florida to employ
Robert A. Angueira, Esq., at Robert A. Angueira, P.A., as
bankruptcy counsel, nunc pro tunc to November 2, 2009.
Mr. Angueira will, among other things:
(a) advise the Debtor on his powers and duties as a debtor-
in-possession, the continued management of his business,
and his responsibilities in complying with the U.S.
Trustee's Operating Guidelines and Reporting
Requirements, and with the rules of the Court;
(b) prepare motions, pleadings, orders, applications,
adversary proceedings, and other legal documents needed
in the administration of the case;
(c) represent the Debtor in negotiation with his creditors in
the preparation of a plan; and
(d) assist the Debtor in the preparation of the Monthly
Operating Reports.
Mr. Angueira, the sole shareholder of Robert A. Angueira, P.A.,
said that he will be paid at $350 per hour and that his staff
members may work based on these hourly rates:
Professional Rate
------------ ----
Shirley Palumbo, Esq. $160
Susan Perez, Paralegal $130
Mr. Angueira assures the Court that he doesn't have interests
adverse to the interest of the Debtors' estates or of any class of
creditors and equity security holders. Mr. Angueira maintains
that he is a "disinterested person" as the term is defined under
Section 101(14) of the Bankruptcy Code.
Miami, Florida-based Bayard William Spector -- aka Bayard W.
Spector, Bayard William Bector, Bayard W. Bector, W Bayard
Spector, and Spector Bayard -- filed for Chapter 11 bankruptcy
protection on November 2, 2009 (Bankr. S.D. Fla. Case No. 09-
34183). The Debtor listed $50,000,001 to $100,000,000 in assets
and $10,000,001 to $50,000,000 in liabilities.
BAYVIEW HOLDINGS: Wants Durrettebradshaw as Bankruptcy Counsel
--------------------------------------------------------------
Bayview Holdings, LLC, has sought the approval of the U.S.
Bankruptcy Court for the Western District of Virginia to hire
DurretteBradshaw, PLC, a Professional Limited Liability Company as
bankruptcy counsel.
DurretteBradshaw will render general legal services to the Debtor
as needed throughout the course of this Chapter 11 case, including
bankruptcy and restructuring, corporate, employee benefits,
employment, finance, litigation, and tax assistance and advice.
DurretteBradshaw will be paid based on the hourly rates of its
professionals:
Professional Rate
------------ ----
Bruce E. Arkema, Partner $300
Kevin J. Funk, Associate $200
Beth McMillen, Legal Assistant $75
The Debtor assures the Court that DurretteBradshaw doesn't have
interests adverse to the interest of the Debtors' estates or of
any class of creditors and equity security holders. The Debtor
maintains that DurretteBradshaw is a "disinterested person" as the
term is defined under Section 101(14) of the Bankruptcy Code.
Moneta, Virginia-based Bayview Holdings, LLC, filed for Chapter 11
bankruptcy protection on November 2, 2009 (Bankr. W.D. Va. Case
No. 09-72799). The Company listed $10,000,001 to $50,000,000 in
assets and $10,000,001 to $50,000,000 in liabilities.
BEAR STEARNS: Jury Acquits Cioffi & Tannin of Fraud Charges
-----------------------------------------------------------
Jurors acquit Ralph Cioffi and Matthew Tannin, former managers of
two hedge funds owned by Bear Stearns & Cos., from all counts in
the securities fraud case filed by the U.S. federal government.
Jurors found that there was no evidence beyond a reasonable doubt
that Messrs. Cioffi and Tannin had criminal intent and conspired
to mislead their investors.
There "was nothing that was clear and convincing," The Wall Street
Journal quoted a juror, Tabasam Bhatti, as saying. The
prosecution didn't provide "enough information," he said.
The criminal case, which was filed in June 2008, is pending in the
U.S. District Court for the Eastern District of New York. The
criminal case is the first major criminal case filed by the U.S.
Government stemming from the financial crisis.
The two Bear Stearns funds -- Bear Stearns High-Grade Structured
Credit Strategies Enhanced Leverage Master Fund, Ltd., and Bear
Stearns High-Grade Structured Credit Enhanced Leverage Master
Fund, Ltd. -- invested heavily in collateralized debt obligations
backed by U.S. subprime mortgage market, collapsed in the summer
of 2007, causing investors losses of about $1,800,000,000. The
collapse triggered the mortgage crisis and the financial meltdown.
Messrs. Cioffi and Tannin were charged of conspiracy to defraud
investors, manipulative and deceptive devices, and fraud by wire.
Mr. Cioffi is also charged with insider trading.
The Government said that during the first five months of 2007, Mr.
Cioffi and Mr. Tannin deceived investors by "fraudulently
concealing from them the full extent of the Funds' deepening
troubles." Investigations conducted by the U.S. Attorney's office
since October 2007 revealed that, during an April 2007 investor
conference call, the Fund Managers told investors that the Funds
"were doing good," while privately worrying of the Funds' future.
E-mails, dated between February and May 2007, between Messrs.
Cioffi and Tannin acknowledged the Funds' declining financial
prospects, according to the investigation.
Defense lawyers, however, during the trial, argued that the
prosecutors were taking the e-mails out of context. What the
April 2007 email also showed, when read in its entirety, is that
Mr. Tannin also said the men could choose to make aggressive bets
rather than close the funds, defense lawyers argued. Defense
lawyers also pointed out during the trial that, according to Bear
Stearns private placement memos, the fund managers had no duty to
disclose what they were doing with their money.
The indictment also alleged the Fund Managers brought in new money
and persuaded existing investors and counterparties not to
withdraw their money by consistently misrepresenting the level of
redemption from the Funds, the current state of the Funds, and the
composition of the Funds' portfolio. Although the Fund Managers
continually used their own money to sell the Funds, the
investigation found that Mr. Cioffi, at the end of March 2007,
urgently and secretly redeemed $2,000,000 of his personal money
from the Enhanced Fund.
Mr. Cioffi served as former senior portfolio manager and founder
of the Funds. Mr. Tannin served as former portfolio manager of
the Funds.
The verdict, also clearing Mr. Cioffi of insider trading and both
men of conspiracy charges, came after about six hours of
deliberation, the Journal said. Trial in the criminal case
started October 13, 2009.
Messrs. Cioffi and Tannin faced a maximum of 20 years in prison
for each of the five fraud counts and five years on a conspiracy
charge, if they had been convicted.
Judge Frederick Block of the Eastern New York District Court, who
is presiding over the case, on November 4, 2009, dismissed one of
the wire fraud charges against Mr. Tannin at request of the
prosecutors on the ground that the specific count purportedly
occurred in Manhattan, part of the Southern New York District
Court jurisdiction.
Chilling Effect on Government's "Witch Hunt"
The acquittals may make it difficult for the U.S. Department of
Justice to file additional prosecutions for fraud related to the
subprime market and the financial institutions that were based on
it, Bloomberg News said.
The Justice Department, along with several other offices, is
investigating Wall Street for possible criminal wrongdoing
stemming from the credit crisis, including at Lehman Brothers
Holdings Inc. and American International Group Inc., Fannie Mae,
Freddie Mac, Credit Suisse, Countrywide Financial Corp., UBS AG,
and Washington Mutual, Inc.
Messrs. Cioffi and Tannin were the first and so far only Wall
Street executives to face criminal securities-fraud charges
stemming from the crisis, underscoring the difficulty of assigning
criminal liability for Wall Street's mistakes, the report added.
The difficulty in building those cases, say legal experts, is that
the financial crisis was marked by the unprecedented market
turmoil and as a result, while certain statements by executives
ultimately proved incorrect, they can make a case that they
believed what they were saying, the Journal related.
The Journal added that some lawyers who observed the case have
said that the funds' investors could sue the men if they felt
misled, but that the criminal case was a stretch.
The case against Messrs. Cioffi and Tannin "was pushing the
envelope," the Journal quoted Andrew Frisch, a former federal
prosecutor in Brooklyn, echoing comments made publicly by numerous
lawyers since the case was filed last year. The defendants "were
not trying to swindle widows out of their future; they were
mismanaging the crisis," Mr. Frisch, a defense attorney who wasn't
involved in the case, told the Journal.
Messrs. Cioffi and Tannin still face a civil-fraud lawsuit, which
was brought alongside the criminal charges last year, by the U.S.
Securities in Exchange Commission.
Mr. Tannin is represented by Susan Brune, Susan E. Brune, Esq., at
Brune & Richard LLP, in New York. Brendan V. Sullivan, Jr., Esq.,
at Williams & Connolly LLP, in Washington, D.C., represents Mr.
Cioffi. U.S. Attorney Benton J. Campbell, Esq., leads the
prosecution team.
About Bear Stearns
New York City-based The Bear Stearns Companies Inc. (NYSE: BSC)
-- http://www.bearstearns.com/-- was a leading financial services
firm serving governments, corporations, institutions and
individuals worldwide. The investment bank collapsed in 2008 and
was sold in a distressed sale to JPMorgan Chase in a transaction
backed by the U.S. government.
Grand Cayman, Cayman Islands-based Bear Stearns High-Grade
Structured Credit Strategies Enhanced Leverage Master Fund Ltd.
and Bear Stearns High-Grade Structured Credit Strategies Master
Fund Ltd. were open-ended investment companies, which sought high
income and capital appreciation relative to the London Interbank
Offered Rate, and designed for long-term investors. On July 30,
2007, the Funds filed winding up petitions under the Companies Law
of the Cayman Islands. Simon Lovell Clayton Whicker and Kristen
Beighton at KPMG were appointed joint provisional liquidators.
BIGLER LP: Receives Interim Nod to Use Cash Collateral
------------------------------------------------------
Bigler LP received interim approval to use cash representing
collateral for secured creditors' claims, Bill Rochelle at
Bloomberg reported. The final cash-collateral hearing is set for
Nov. 18.
Houston-based Bigler LP is a diversified petrochemical producer.
Bigler has production and storage facilities on 271 acres on the
Houston Ship Channel.
Bigler filed for Chapter 11 reorganization on Oct. 30 in Houston
(Bankr S.D. Tex. Case No. 09-38188). The petition listed assets
of $233 million against debt totaling $151 million. Liabilities
include $67 million owed to secured lender Amegy Bank NA, which
has a lien on all assets.
BOMBARDIER RECREATIONAL: S&P Raises Rating on Senior Loan to CCC-
-----------------------------------------------------------------
Standard & Poor's Ratings Services said it raised its issue-level
rating on recreational products manufacturer Bombardier
Recreational Products Inc.'s US$790 million senior secured term
loan to 'CCC-' (one notch below the corporate credit rating) from
'D'. S&P also revised the recovery rating on the term loan to '5'
from '4'. The '5' recovery rating indicates an expectation of a
modest (10%-30%) recovery in the event of a payment default,
compared with a '4' recovery rating, indicating an expectation of
an average (30%-50%) recovery for lenders in the event of a
payment default. The change in the recovery rating reflects the
reduction in Standard & Poor's estimated enterprise value for BRP
in the simulated default scenario.
At the same time, S&P affirmed the 'CCC' long-term corporate
credit rating on BRP and the 'B-'issue-level rating on the
company's C$250 million senior secured revolving credit facility.
The recovery rating on the credit facility is unchanged at '1',
indicating an expectation of very high (90%-100%) recovery in a
default scenario. (For the complete corporate credit rating
rationale on BRP, see the research report to be published on
RatingsDirect immediately following this media release.)
"We raised the rating on the term loan following the company's
early termination of its program to buy back up to US$250 million
in debt below par, which was originally to be in place until
April 30, 2010," said Standard & Poor's credit analyst Lori
Harris.
Standard & Poor's had viewed the program as a distressed exchange
offer, which resulted in it lowering the rating on the term loan
to 'D' in July 2009 following the settlement of the company's
below-par debt tender offer. The company has indicated that the
buyback program will resume on July 1, 2010, at which time
Standard & Poor's will reassess its rating on the affected debt.
"The ratings on BRP reflect what S&P considers the company's weak
financial performance, including significant declines in revenue
and EBITDA, negative free cash flow, limited financial
flexibility, and the need for an equity cure to comply with the
financial covenants earlier this year," Ms. Harris added. In
addition, competition remains intense within the industry.
BRP manufactures motorized recreational products including:
snowmobiles under the Ski-Doo and Lynx brand names, watercraft and
sport boats under the Sea-Doo name, power sport engines under the
Rotax name, all-terrain vehicles and roadsters under the Can-Am
name, and outboard engines under the Evinrude and Johnson names.
BRP's revenues are geographically diversified, with key markets in
the U.S., Canada, and Europe.
The negative outlook reflects Standard & Poor's view of BRP's
challenges, including limited financial flexibility and the
expectation of continued declining revenue and EBITDA, resulting
from the material drop in consumer demand for recreational
vehicles. S&P could consider lowering its ratings on BRP if the
company suffers a worse-than-expected decline in EBITDA this
fiscal year, which could pose a renewed possibility of a covenant
breach. On the other hand, S&P could revise the outlook to stable
if there is a material improvement in operating performance and
the maintenance of sufficient covenant headroom.
BROADSTRIPE LLC: Has Plan Exclusivity Until Jan. 27
---------------------------------------------------
Broadstripe LLC obtained from the Bankruptcy Court an extension of
its exclusive period to file a Chapter 11 plan until January 27,
Bill Rochelle at Bloomberg News reported. This is the third
extension granted by the Bankruptcy Court.
Broadstripe already filed a reorganization plan to carry out an
agreement reached before the Chapter 11 filing with holders of the
first- and second-lien debt. But like in the previous extension
requests, Broadstripe noted that the official committee of
unsecured creditors has filed a lawsuit seeking to invalidate the
lenders' liens. Until the suit is resolved, the Committee won't
support a plan that recognizes the validity of the lenders'
claims.
About Broadstripe LLC
Headquartered in Chesterfield, Missouri, Broadstripe LLC --
http://www.broadstripe.com/-- provides videos and telephone
services to consumers and business in Maryland, Michigan,
Washington and Oregon. The Company and five of its affiliates
filed for Chapter 11 protection on January 2, 2009 (Bankr. D. Del.
Lead Case No. 09-10006). Attorneys at Ashby & Geddes, and Gardere
Wynne Sewell LLP represent the Debtors in their restructuring
efforts. The Debtors tapped FTI Consulting Inc. as their
restructuring consultant, and Epiq Bankruptcy Consultants LLC as
their claims agent. In its petition, Broadstripe listed assets
and debts between $100 million and $500 million.
BUILDERS FIRSTSOURCE: Registers 58MM Shares for Rights Issue
------------------------------------------------------------
Builders FirstSource, Inc., filed a registration statement with
the Securities and Exchange Commission to register up to
58,571,428 shares of the Company's common stock issuable upon
exercise of rights to subscribe for the shares at $3.50 per share.
Pursuant to the registration statement, the Company is
distributing at no charge to holders of its common stock
transferable subscription rights to purchase shares of the common
stock. The Company said holders will receive [___] subscription
rights for every share of common stock owned at the close of
business on [_____], 2009, subject to adjustments to eliminate
fractional rights. The Company is distributing subscription
rights exercisable for up to an aggregate of 58,571,428 shares of
its common stock.
Each whole subscription right will entitle the holder of the
Company's common stock to purchase one share of the common stock
at a subscription price of $3.50 per share. Subscribers (other
than JLL Partners Fund V, L.P. and Warburg Pincus Private Equity
IX, L.P.) who exercise their rights in full may also over-
subscribe for additional shares, subject to certain limitations,
to the extent additional shares are available. The subscription
rights will expire if they are not exercised by 5:00 p.m., Eastern
Time, on [_____], 2009, unless extended.
In connection with the rights offering, certain holders of the
Company's outstanding Second Priority Senior Secured Floating Rate
Notes due 2012 have agreed to exchange, at par, in transactions
exempt from registration under the Securities Act of 1933, as
amended, their outstanding 2012 notes for (i) up to $145.0 million
aggregate principal amount of newly-issued Second Priority Senior
Secured Floating Rate Notes due 2016, (ii) up to $130.0 million in
cash from the proceeds of the rights offering, or (iii) a
combination of cash and 2016 notes, and, (iv) to the extent the
rights offering is not fully subscribed, shares of the common
stock.
Upon completion of the recapitalization transactions, the Company
will receive $75.0 million for general corporate purposes and to
pay the expenses of the recapitalization transactions, with any
remaining proceeds of the rights offering being used to repurchase
a portion of the outstanding 2012 notes in the debt exchange. The
Company will reduce outstanding indebtedness by $130.0 million
through the debt exchange.
The Company has entered into an investment agreement with JLL
Partners Fund V, L.P. and Warburg Pincus Private Equity IX, L.P.,
who collectively beneficially own roughly 50% of the Company's
common stock before giving effect to the recapitalization
transactions, under which JLL and Warburg Pincus have severally
agreed to purchase from the Company, at the subscription price,
unsubscribed shares of the common stock such that gross proceeds
of the rights offering will be no less than $75.0 million.
In addition, each of JLL and Warburg Pincus has agreed (i) to
exchange up to $48.909 million aggregate principal amount of 2012
notes indirectly held by it in the debt exchange and (ii) to the
extent gross proceeds of the rights offering are less than
$205.0 million, to exchange such 2012 notes for shares of the
common stock at an exchange price equal to the rights offering
subscription price, subject to proration from the participation of
other holders of 2012 notes who submit for exchange their 2012
notes for shares of the common stock not subscribed for through
the exercise of rights in the rights offering.
A full-text copy of the registration statement is available at no
charge at http://ResearchArchives.com/t/s?48f3
About Builders FirstSource
Headquartered in Dallas, Texas, Builders FirstSource Inc. --
http://www.bldr.com/-- is a supplier and manufacturer of
structural and related building products for residential new
construction. The company operates in 9 states, principally in
the southern and eastern United States, and has 55 distribution
centers and 51 manufacturing facilities, many of which are located
on the same premises as its distribution facilities.
The Company has total assets of $457,192,000 against total
liabilities of $405,038,000 as of June 30, 2009.
Builders FirstSource has corporate credit ratings of 'Caa1'
from Moody's Investors Service and 'CCC+' from Standard & Poor's.
BUILDERS FIRSTSOURCE: Settles Suit Regarding Recapitalization
-------------------------------------------------------------
Builders FirstSource, Inc., entered into a definitive stipulation
to settle the consolidated class and derivative action that was
filed in connection with its recapitalization. The settlement is
subject to the approval of the Delaware Court of Chancery.
Between April 15, 2009 and May 15, 2009, an affiliate of JLL
Partners Fund V, L.P., purchased roughly $98 million in aggregate
principal amount of second priority senior secured floating rate
notes due 2012 of Builders FirstSource through open market
purchases. On August 31, 2009, Warburg Pincus Private Equity IX,
L.P., acquired 50% of the membership interests in JWP LLC, a
Delaware limited liability company through which JLL Fund V then
held the Notes.
On August 31, 2009, Builders received a proposal from JLL Fund V -
- JLL Fund V, together with Building Products, LLC, JLL Partners,
Inc., JWP LLC, JLL Associates V, L.P., JLL Associates G.P. V,
L.L.C., Paul S. Levy, Ramsey A. Frank, and Brett N. Milgrim, the
"JLL Defendants" -- and Warburg Pincus --Warburg Pincus, together
with Warburg Pincus LLC, Warburg Pincus IX LLC, Warburg Pincus
Partners LLC, Kevin J. Kruse, Michael Graff, and David A. Barr,
the "Warburg Defendants" -- pursuant to which Builders would be
recapitalized.
The Proposed Recapitalization contemplated that, among other
things, the Notes held by JWP LLC would be exchanged for the
Company's Common Stock at a conversion price of $2.00 per share,
all other holders of Notes would be offered the opportunity to
exchange their Notes for Common Stock, new notes or any
combination thereof, the Company would issue to all stockholders
rights to purchase up to an aggregate of $75 million of the
Company's Common Stock at a subscription price of $2.00 per share,
and JLL Fund V and Warburg Pincus would agree to purchase all
shares of Common Stock not subscribed for in the rights offering
and receive a fee for such commitment of $4.5 million payable in
Common Stock, valued at $2.00 per share.
On August 31, 2009, the Company's Common Stock closed at a price
of $7.69 and on September 1, 2009, it closed at a price of $4.98.
The board of directors of Builders formed a special committee of
its independent directors consisting of Robert C. Griffin,
Cleveland A. Christophe, and Craig A. Steinke -- Special Committee
Defendants -- to evaluate the Proposed Recapitalization and any
alternative transaction. The Special Committee engaged
independent legal counsel and financial advisors to evaluate the
Proposed Recapitalization and engaged in discussions with
representatives of JLL Fund V and Warburg Pincus and the holders
of outstanding Notes regarding the Proposed Recapitalization.
On September 4, 2009, GRANT & EISENHOFER P.A., Lead Counsel for
plaintiffs in the Action contacted counsel for JLL Fund V and
Warburg Pincus and raised objections to the Proposed
Recapitalization, and counsel for JLL Fund V and Warburg Pincus
suggested that Lead Counsel raise their objections with counsel
for the Special Committee. Thereafter, Plaintiffs' Lead Counsel
in the Action contacted the Special Committee and discussed with
the Special Committee's legal and financial advisors the economic
terms of the Proposed Recapitalization and objections thereto, as
well as alternative terms for a recapitalization of the Company
that Co-Lead Plaintiffs would consider fair.
Between September 10 and 15, 2009, four putative shareholder class
or derivative actions were filed in the Court against some or all
of the Company, the Special Committee Defendants, the JLL
Defendants, the Warburg Defendants, and the Company's Chief
Executive Officer, Floyd F. Sherman alleging that various
defendants breached their fiduciary duties or aided and abetted
alleged breaches of fiduciary duty in connection with the Notes
Purchase and the Proposed Recapitalization. The plaintiffs
generally sought declaratory relief that the defendants had
breached their fiduciary duties, injunctive relief to prevent such
breaches, damages, or fees and expenses.
On September 18, 2009, the Court consolidated four actions, Pinto
v. Levy, et al., Builders FirstSource, C.A. No. 4884-VCS, Astrino
v. Levy, et al., Builders FirstSource, C.A. No. 4887-VCS, Coppney
v. Builders FirstSource, Inc., et al., C.A. No. 4897-VCS, and
Ravenswood Investment Co., L.P. v Building Products, LLC, et al.,
C.A. No. 4900-VCS, under the caption In re: Builders FirstSource,
Inc. S'holders and Deriv. Litig., C.A. No. 4900-VCS, and appointed
the following as co-lead plaintiffs: Ravenswood Investment
Company, L.L.P., Ravenswood Investments III, L.P., and Robotti &
Company Advisors. The complaint in C.A. No. 4900-VCS was
designated as the operative complaint.
In September 2009, Co-Lead Plaintiffs served discovery requests
including document requests, interrogatories and requests to
admit.
On September 30, 2009, a complaint captioned Rodriguez and
Dougherty v. Sherman, et al., C.A. No. 4932-VCS, was filed which
alleged substantially similar claims to that of the Action.
On October 13, 2009, the Company received a revised proposal from
JLL Fund V and Warburg Pincus in the form of a draft non-binding
term sheet, pursuant to which Builders would be recapitalized.
The Recapitalization provides, among other things: (1) the ability
of all stockholders to participate in the rights offering on a pro
rata basis; (2) the ability of all holders of Notes who are
accredited investors to participate in a debt exchange on a pro
rata basis; and (3) a price for both the rights offering and the
exchange offering of $3.50 per share;
Throughout the week from October 13 through 20, 2009, Co-Lead
Plaintiffs together with other institutional investors who own
large quantities of Builders' Common Stock held discussions with
representatives of the Special Committee, JLL Fund V and Warburg
Pincus and reviewed confidential information of the Company.
On October 19, 2009, Plaintiffs' Lead Counsel, Co-Lead Plaintiffs
and another substantial holder of Builders common stock held
further discussions with the Special Committee, its advisors and
advisors to JLL Fund V and Warburg Pincus regarding the
Recapitalization.
A final term sheet was negotiated pursuant to which Builders would
be recapitalized.
On October 23, 2009, following extensive arm's-length settlement
negotiations, Plaintiffs' Lead Counsel and counsel for the
Company, the Special Committee Defendants, the JLL Defendants, the
Warburg Defendants, and Sherman entered into a Memorandum of
Understanding setting forth an agreement-in-principle to resolve
the Action on the terms and conditions set forth therein.
In connection with the Recapitalization, on October 23, 2009, the
Company entered into an Investment Agreement with JLL Fund V and
Warburg Pincus, pursuant to which, JLL Fund V and Warburg Pincus
have severally agreed to, among other things: (i) purchase from
the Company at the subscription price of $3.50 per share
unsubscribed shares of Common Stock such that gross proceeds of
the rights offering that the Company expects to conduct in
connection with the Recapitalization will be no less than
$75.0 million; and (ii) exchange up to $48.909 million aggregate
principal amount of Notes held indirectly by each of them in a
debt exchange and, to the extent gross proceeds of the Rights
Offering are less than $205.0 million, to exchange such Notes for
shares of Common Stock at an exchange price equal to the Rights
Offering subscription price, subject to proration from the
participation of other holders of Notes who submit their Notes for
exchange into Common Stock not subscribed for through the exercise
of rights in the Rights Offering.
In connection with the Recapitalization, on October 23, 2009, the
Company also entered into a Support Agreement with certain holders
of the outstanding Notes, pursuant to which each such holder has
agreed to, among other things, submit for exchange all Notes held
by it in a debt exchange for the outstanding Notes that the
Company expects to conduct in connection with the Recapitalization
and deliver consents with respect to all Notes held by such holder
to certain proposed amendments to the indenture governing the
Notes.
On October 23, 2009, the Company announced the Recapitalization;
that same day, counsel in the Action informed the Court that the
parties to the Action had entered into the MOU.
On October 30, 2009, upon stipulation among all parties to the
Action and the Rodriguez Action, the Court issued an Order
consolidating the Rodriguez Action into the Action, continuing the
Action under the caption In re: Builders FirstSource, Inc.
S'holders and Deriv. Litig., C.A. No. 4900-VCS and continuing the
same Lead Plaintiff and Lead Counsel structure.
Subject to confirmatory discovery, Plaintiffs in the Action and
their counsel believe (i) the claims Plaintiffs have asserted have
legal merit, and (ii) the Settlement is fair, reasonable,
adequate, and in the best interest of Plaintiffs, the Company and
the class.
The willingness of the JLL Defendants and the Warburg Defendants
to proceed with the Recapitalization on the terms proposed in the
Term Sheet is conditioned upon the Settlement.
Defendants in the Action, including the Company, the Special
Committee Defendants, the JLL Defendants, the Warburg Defendants,
and Sherman, have denied, and continue to deny, that they have
committed or aided and abetted in the commission of any violation
of law or engaged in any of the wrongful acts alleged in the
Action, and expressly maintain that they complied with their
fiduciary and other legal duties, and entered into the Stipulation
solely because the Settlement will eliminate the burden and
expense of further litigation.
The Stipulation provides that the Action shall be dismissed on the
merits with prejudice as to all Defendants and against all members
of the Class, and all Released Claims will be completely, fully,
finally, and forever compromised, settled, released, discharged,
extinguished, and dismissed with prejudice and without costs, as
to all Released Persons.
The Stipulation also provides that Co-Lead Plaintiffs and Lead
Counsel intend to petition the Court for an award of $2,400,000
for attorneys' fees plus actual out-of-pocket expenses (including
costs and disbursements, but excluding any expert witness fees) in
connection with the Action not to exceed $100,000. Defendants
agree not to oppose any such petition and acknowledge that Lead
Counsel have a claim for attorneys' fees and reimbursement of
expenses in the Action based upon the benefits that the litigation
of the Action and the Settlement have provided and will provide to
the Class. No other application for attorneys' fees or expenses
shall be filed. Counsel for Plaintiffs waive any right to seek
any award of attorneys' fees or expenses except as provided in
this paragraph. The Company or its successor entity, on behalf of
and for the benefit of itself and the other Defendants in the
Action, agrees to pay any final award of fees and expenses by the
Court. Defendants shall not be responsible for, and shall have no
liability with respect to, any allocation of any award of
attorneys' fees and expenses among counsel for Plaintiffs.
MORRIS, NICHOLS, ARSHT & TUNNELL LLP serves as counsel to Builders
Firstsource, Inc.
SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP, serves as counsel to
Building Products, LLC; JLL Partners, Inc.; JWP LLC; JLL Partners
Fund V, L.P.; JLL Associates V, L.P.; JLL Associates G.P. V;
L.L.C.; Paul S. Levy; Ramsey A. Frank; and Brett N. Milgrim.
RICHARDS, LAYTON & FINGER, P.A., serves as counsel to Warburg
Pincus LLC; Warburg Pincus Private Equity IX, L.P.; Warburg Pincus
IX, LLC; Warburg Pincus Partners LLC; Kevin J. Kruse; Michael
Graff; and David Barr.
A full-text copy of the Stipulation and Agreement of Compromise,
Settlement, and Release in In Re: Builders FirstSource, Inc.
Shareholders and Derivative Litigation dated November 5, 2009, is
available at no charge at http://ResearchArchives.com/t/s?48f0
A full-text copy of the Notice of Pendency of Class and Derivative
Action, Proposed Class Action Determination, Proposed Settlement
of Class and Derivative Action, Settlement Hearing, and Right to
Appear in In Re: Builders FirstSource, Inc. Shareholders and
Derivative Litigation, is available at no charge at:
http://ResearchArchives.com/t/s?48f1
About Builders FirstSource
Headquartered in Dallas, Texas, Builders FirstSource Inc. --
http://www.bldr.com/-- is a supplier and manufacturer of
structural and related building products for residential new
construction. The company operates in 9 states, principally in
the southern and eastern United States, and has 55 distribution
centers and 51 manufacturing facilities, many of which are located
on the same premises as its distribution facilities.
The Company has total assets of $457,192,000 against total
liabilities of $405,038,000 as of June 30, 2009.
Builders FirstSource has corporate credit ratings of 'Caa1'
from Moody's Investors Service and 'CCC+' from Standard & Poor's.
CAMP COOLEY: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------
Debtor: Camp Cooley Ltd.
4297 Camp Cooley Road
Franklin, TX 77856
Case No.: 09-61311
Type of Business: The Debtor operates an agricultural and farming
business.
Chapter 11 Petition Date: November 8, 2009
Court: United States Bankruptcy Court
Western District of Texas (Waco)
Judge: Chief Bkptcy Judge Ronald B. King
Debtor's Counsel: R. Glen Ayers Jr., Esq.
Langley and Banack, Inc
745 E Mulberry, 9th Floor
San Antonio, TX 78212
Tel: (210) 736-6600
Fax: (210) 735-6889
Email: gayers@langleybanack.com
Estimated Assets: $50,000,001 to $100,000,000
Estimated Debts: $10,000,001 to $50,000,000
The petition was signed by Klaus Birkel.
Debtor's List of 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Internal Revenue Service Taxes $415,489
Center
Ogden, UT 84201
M&M Farm Supply $56,717
Jackson Walker, LLP $52,603
Embryo Armor Technologies, $44,259
LLC
M&M Delivery, Inc. $41,658
Siegert Water Wells, Inc. $38,756
Union Insurance Company $37,327
Citi Cards $35,812
Bioniche Animal Health $34,480
USA, Inc.
Producers Cooperative Assoc. $23,105
Blue Cross and Blue Shield $23,047
of Texas
Veritas Advisory Group, Inc. $20,658
San Angelo Feedyard $17,808
Tx. Veterinary Medical $15,825
Diagnostic Lab.
Tx. Veterinary Medical Diagn.
The Hartford $14,397
Jonathan Watson $14,000
Watson Cattle Co.
Angus Journal $13,535
Josh Reynolds $13,101
Rrr Ranch
The Cattleman $11,905
Farm Plan $10,553
CANWEST GLOBAL: Canada Case Recognized by U.S. as Main Proceeding
-----------------------------------------------------------------
Judge Stuart M. Bernstein of the United States Bankruptcy Court
for the District of New York issued an order on November 3, 2009,
recognizing the Canadian Proceedings of Canwest Global
Communications Corp. and its debtor affiliates as foreign main
proceedings under Section 1517(b)(1) of the Bankruptcy Code.
The U.S. Court held that all provisions of Section 1520 of the
Bankruptcy Code apply in the Chapter 15 cases, including the stay
under Section 362 and the provisions of Section 363 throughout
the duration of the Chapter 15 cases or until otherwise ordered
by the U.S. Court.
For so long as the Initial CCAA Order is in effect in the
Canadian Proceedings or otherwise ordered by the U.S. Court, the
individuals, firms, corporations and other entities -- the
Contract Counterparties -- and all those acting for or on their
behalf, are enjoined in the United States and its territories
from, discontinuing, altering, failing to honor, interfering
with, repudiating, ceasing to perform, or terminating any right,
renewal right, contract agreement, license or permit with Canwest
Television Limited Partnership for the supply of goods or
services, including all programming supply, computer software,
communication and other data services to Television Partnership,
on the basis of, or as a result of, the filing of the Chapter 15
cases, the Canadian Proceedings or any amounts outstanding as of
the filing of the Chapter 15 cases to the same extent as set
forth in the Initial CCAA Order; provided, in each case, that the
contractual prices or charges for all the goods or services
received after the date of the Initial CCAA Order are paid by the
Debtors or Television Partnership in accordance with normal
payment practices of the Debtors or Television Partnership or
other practices as may be agreed upon by the supplier or service
provider, the Debtors, Television Partnership and FTI Consulting
Canada Inc., the court-appointed monitor and authorized
representative, or as may be ordered by the Court.
FTI Consulting Canada Inc., the Court-appointed monitor under the
proceeding under Companies' Creditors Arrangement Act, is
entitled to all of the relief provided under Section 1520 of the
Bankruptcy Code, without limitation.
A list of the Debtors' Contract Counterparties is available for
free at:
http://bankrupt.com/misc/CanWest_ContractCounterparties.pdf
Prior to the entry of the Order, the Monitor, John E. McGuire,
chief financial officer of Canwest Global Communications Corp.
and Canwest Media Inc., and Ashley John Taylor, Esq., at Stikeman
Elliot LLP, in Toronto, Canada, filed memorandums of law and
declarations in support of the request for Recognition.
About Canwest Global
Canwest Global Communications Corp. (TSX: CGS and CGS.A) --
http://www.canwest.com/-- an international media company, is
Canada's largest media company. In addition to owning the Global
Television Network, Canwest is Canada's largest publisher of
English language daily newspapers and owns, operates and holds
substantial interests in conventional television, out-of-home
advertising, specialty cable channels, web sites and radio
stations and networks in Canada, New Zealand, Australia, Turkey,
Indonesia, Singapore, the United Kingdom and the United States.
On October 6, 2009, Canwest Global, Canwest Media Inc., Canwest
Television Limited Partnership (including Global Television,
MovieTime, DejaView and Fox Sports World), The National Post
Company and certain subsidiaries voluntarily entered into, and
successfully obtained an Order from the Ontario Superior Court of
Justice (Commercial Division) commencing proceedings under the
Companies' Creditors Arrangement Act. The CMI Entities'
commencement of these proceedings was undertaken in furtherance of
a proposed recapitalization transaction that is supported by over
70% of holders of the 8% senior subordinated notes issued by CMI.
On the same day, FTI Consulting Canada Inc., the Court-appointed
Monitor in the CCAA proceedings, sought protection in the United
States Bankruptcy Court under Chapter 15 of the United States
Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No. 09-15994) for
certain of the entities involved in Canwest's television business
that filed for protection under the CCAA, including Canwest,
Canwest Media Inc. and Canwest Global Broadcasting
Inc./Radiodiffusion Canwest Global Inc.
Judge Stuart M. Bernstein presides over the Chapter 15 cases.
Evan D. Flaschen, Esq., at Bracewell & Giuliani LLP, in Hartford,
Connecticut, serves as Chapter 15 Petitioner's counsel. The
Chapter 15 Debtors disclosed estimated assets of $500 million to
$1 billion and estimated debts of $50 million to $100 million.
In a regulatory filing with the U.S. Securities and Exchange
Commission, Canwest Media disclosed C$4,847,020,000 in total
assets and C$5,826,522,000 in total liabilities at May 31, 2009.
Bankruptcy Creditors' Service, Inc., publishes Canwest Bankruptcy
News. The newsletter tracks the CCAA proceedings and Chapter 15
proceedings undertaken by Canwest Global Communications Corp. and
its affiliates (http://bankrupt.com/newsstand/or 215/945-7000).
CANWEST GLOBAL: CMI Entities Seek Jan. 22 CCAA Stay Extension
-------------------------------------------------------------
Canwest Global Communications Corp. and the other applicants and
partnerships -- the CMI Entities -- sought and obtained from the
Ontario Superior Court of Justice, an order extending the stay
provided under the Companies' Creditors Arrangement Act up to and
until January 22, 2010.
As set out in the Initial Order Affidavit, the Recapitalization
Term Sheet includes certain key dates with respect to: key
elements of the CMI Recapitalization Transaction, including (i)
creditor approval of the plan of arrangement or compromise must
occur no later than January 30, 2010, and (ii) the Plan
implementation date must occur no later than April 15, 2010.
The Stay Period granted under the Initial Order expired on
November 5, 2009. The Claims Bar Date and other key dates set
out in the Claims Procedure Order arise after the Nov. 5 expiry
of the Stay Period. Similarly, key dates with respect to the
Plan and the CMI Recapitalization Transaction arise after the
current expiry of the Stay Period.
John E. McGuire, chief financial officer of Canwest Global
Communications Corp. and its principal operating subsidiary
Canwest Media Inc., relates that the extension is necessary in
order to allow for the CMI Entities to continue to work towards
the implementation of the CMI Recapitalization Transaction
through the development of the Plan, to deal with creditor claims
as required by the Claims Procedure Order, and to deal with other
matters inherent in the proposed restructuring with the objective
of obtaining the best possible result for a restructuring for the
benefit of all stakeholders.
About Canwest Global
Canwest Global Communications Corp. (TSX: CGS and CGS.A) --
http://www.canwest.com/-- an international media company, is
Canada's largest media company. In addition to owning the Global
Television Network, Canwest is Canada's largest publisher of
English language daily newspapers and owns, operates and holds
substantial interests in conventional television, out-of-home
advertising, specialty cable channels, web sites and radio
stations and networks in Canada, New Zealand, Australia, Turkey,
Indonesia, Singapore, the United Kingdom and the United States.
On October 6, 2009, Canwest Global, Canwest Media Inc., Canwest
Television Limited Partnership (including Global Television,
MovieTime, DejaView and Fox Sports World), The National Post
Company and certain subsidiaries voluntarily entered into, and
successfully obtained an Order from the Ontario Superior Court of
Justice (Commercial Division) commencing proceedings under the
Companies' Creditors Arrangement Act. The CMI Entities'
commencement of these proceedings was undertaken in furtherance of
a proposed recapitalization transaction that is supported by over
70% of holders of the 8% senior subordinated notes issued by CMI.
On the same day, FTI Consulting Canada Inc., the Court-appointed
Monitor in the CCAA proceedings, sought protection in the United
States Bankruptcy Court under Chapter 15 of the United States
Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No. 09-15994) for
certain of the entities involved in Canwest's television business
that filed for protection under the CCAA, including Canwest,
Canwest Media Inc. and Canwest Global Broadcasting
Inc./Radiodiffusion Canwest Global Inc.
Judge Stuart M. Bernstein presides over the Chapter 15 cases.
Evan D. Flaschen, Esq., at Bracewell & Giuliani LLP, in Hartford,
Connecticut, serves as Chapter 15 Petitioner's counsel. The
Chapter 15 Debtors disclosed estimated assets of $500 million to
$1 billion and estimated debts of $50 million to $100 million.
In a regulatory filing with the U.S. Securities and Exchange
Commission, Canwest Media disclosed C$4,847,020,000 in total
assets and C$5,826,522,000 in total liabilities at May 31, 2009.
Bankruptcy Creditors' Service, Inc., publishes Canwest Bankruptcy
News. The newsletter tracks the CCAA proceedings and Chapter 15
proceedings undertaken by Canwest Global Communications Corp. and
its affiliates (http://bankrupt.com/newsstand/or 215/945-7000).
CANWEST GLOBAL: CMI Entities Propose Transition Agreement
---------------------------------------------------------
Canwest Global Communications Corp. and the other applicants and
partnerships -- the CMI Entities -- sought and obtained from the
Honorable Madam Justice Sarah E. Pepall of the Ontario Superior
Court of Justice an order:
(a) approving a Transition and Reorganization Agreement by
and among Canwest Global Communications Corp., Canwest
Limited Partnership/Canwest Societe en Commandite, Canwest
Media Inc., Canwest Publishing Inc./Publications Canwest
Inc., Canwest Television Limited Partnership and the
National Post Company/La Publication National Post, dated
as of October 26, 2009; and
(b) vesting in the "Transferee" the National Post Company's
and Canwest Global's right, title and interest in and to
the Transferred Assets.
FTI Consulting Canada Inc., the Court-appointed monitor under the
Companies' Creditors Arrangement Act, relates that the Transition
and Reorganization Agreement is part of an internal corporate
reorganization and is not "outside the ordinary course of
business".
The Monitor says that the Transition and Reorganization Agreement
provides a framework for the CMI Entities and Canwest Limited
Partnership, Canwest Publishing Inc./Publications Canwest Inc.,
Canwest Books Inc. -- the LP Entities -- to properly restructure
their inter-entity arrangements for the benefit of their
stakeholders. The CMI/LP Reorganization Agreement provides for:
(a) a reorganization, orderly transition and subsequent
termination of certain shared services arrangements
between the CMI Entities and the LP Entities pursuant to
the terms of the Agreement on Shared Services and
Employees dated October 26, 2009; and
(b) a transition of substantially all of the assets of The
National Post Company/La Publication National Post and
certain intellectual property of Canwest Global and
certain liabilities of the National Post Company to the LP
Entities pursuant to the terms of the National Post
Transition Agreement dated October 26, 2009.
Divisions of Canwest Global
Canwest Global's business operations consist of two major
divisions: (a) television business, and (b) newspaper publishing
and digital media business. The Canwest TV Group is comprised of
the CMI Entities and the CW Media Segment. The Canwest
Publishing Group consists of the Canwest Limited Partnership,
Canwest Publishing Inc./Publications Canwest Inc., Canwest Books
Inc. and the National Post Company.
The LP Entities are currently in default under their various
credit facilities, note indenture or guarantee obligations, and,
in particular, under a credit agreement dated as of July 10,
2007, as amended, between the predecessor of the Canwest Limited
Partnership and The Bank of Nova Scotia, as Administrative Agent
for a syndicate of lenders.
Following intensive and extended negotiations, the LP Entities
and the Administrative Agent agreed on the terms of a forbearance
agreement, as amended, pursuant to which the Administrative Agent
agreed to forbear from taking steps to proceed with enforcement
of their security in order to allow the Canwest Limited
Partnership and the LP Secured Lenders an opportunity to
negotiate a prepackaged restructuring or reorganization of the
affairs of the LP Entities.
Under the Forbearance Agreement, the LP Entities are prohibited
from entering into the transactions contemplated under the NP
Transition Agreement and the Shared Services Transition Agreement
without the consent of the Administrative Agent. The Forbearance
Agreement expires on the LP Entities' failure to comply with
their obligations under the Forbearance Agreement.
Shared services
Pursuant to a number of inter-company service agreements, the CMI
Entities and the LP Entities share certain business services.
For example, Canwest Media Inc. and Canwest Limited Partnership
provide each other with certain administrative and advisory
services and engage in certain cross-promotional activities and
inter-company services which are integral to the overall Canwest
enterprise.
A list of the Shared Services agreements affected by the CMI/LP
Reorganization Agreement is available for free at:
http://bankrupt.com/misc/CanWest_SSAsummary.pdf
Canwest Global, which is one of the CMI Entities, also grants to
CMI and the Canwest Limited Partnership a non-exclusive, royalty-
free, non-transferable license to use some or all of the Canwest
trademarks in Canada and to sublicense the use of the Canwest
trademarks to its subsidiaries.
FTI says it reviewed the Shared Services Agreements which, by
their terms, generally provide that the service provider is
entitled to reimbursement for all costs and expenses incurred in
the provision of the services.
The National Post Company
The National Post Company is a general partnership with units
held by CMI and National Post Holdings Ltd., a wholly owned
subsidiary of CMI. It carries on business publishing the
National Post national newspaper and operating related online
publications.
Prior to 2005, the newspaper assets of the LP Entities and the
National Post assets were owned by a single Canwest Global
entity. In 2005, the predecessor of the Canwest Limited
Partnership was formed to acquire Canwest Global's newspaper
publishing and digital media entities and to operate the
businesses, as well as certain shared services operations as part
of a planned income trust spin-off of Canwest Global's newspaper
publishing and digital media assets. Based on its poor financial
performance at that time, the National Post was not included in
the newly formed income trust and was instead separated into a
standalone general partnership.
The National Post Company and National Post Holdings Ltd. are the
only entities in the Canwest Publishing Group that are guarantors
of certain secured and unsecured indebtedness of CMI and were,
for that reason, included in the CCAA proceedings. With the
exception of the commonality of creditors, the National Post
Company and the CMI Entities do not have any common services,
licenses, or material synergies.
The management and operations of the LP Entities and the National
Post Company, although separate legal entities, are intertwined,
FTI relates. FTI avers that as a result of the National Post
Company's dependence on the intercompany services provided by the
LP Entities, it would be unable to operate independently from the
LP Entities.
Due to the integrated operations of the National Post Company and
the LP Entities, the National Post Company absorbs significant
fixed costs which would otherwise be carried by the LP Entities.
In the fiscal year ending August 31, 2009, the costs totaled
approximately C$23 million.
FTI relates that despite the National Post Company's inability to
generate profits as a standalone publication, closure of the
National Post Company would negatively impact the financial
performance of the LP Entities, as they would continue to bear
costs currently being allocated to the National Post Company.
The closure of the National Post would increase the LP Entities'
cost burden by approximately C$14 million in fiscal year ending
August 31, 2010, FTI adds.
The National Post Company has been unprofitable since its
inception, recording annual losses as high as approximately C$60
million in 2001, FTI says. The National Post Company's losses
for the past seven years have been fully funded by CMI. As a
result, the National Post Company is currently indebted to CMI
for C$139.1 million.
The Ad Hoc Committee has advised that they are no longer prepared
to support funding of the losses of the National Post Company by
CMI after October 30, 2009.
The LP Entities, in recognition of the financial and strategic
benefits that would be afforded to them by transition of the
business of the National Post Company to them, agreed to fund 50%
of the losses suffered by the National Post Company in October
2009, but only if the CMI/LP Reorganization Agreement is approved
by the Canadian Court and the transition of the assets and
liabilities contemplated by the NP Transition Agreement.
Intercompany Reorganization
Both the LP Entities and the CMI Entities experienced
deterioration in their financial performances in 2008-2009 and
have commenced reorganizations of their corporate and debt
structures. The LP Entities and the CMI Entities determined that
an orderly transition from their current intertwined corporate
structures to two standalone enterprises will likely be necessary
to facilitate and effect their restructurings.
The CMI Entities and the LP Entities determined that an orderly
disentanglement, transition and subsequent termination of the
Shared Services would be mutually beneficial and should be
effected. As the businesses of the National Post Company and the
LP Entities are integrated and interdependent, the CMI Entities
and the LP Entities have also recognized that the business of the
National Post Company ought to be integrated into the corporate
structure of the LP Entities.
Following lengthy and intensive negotiations between the CMI
Entities, the LP Entities, their chief restructuring and
financial advisors, the Ad Hoc Committee and the Administrative
Agent, the LP Entities and certain of the CMI Entities have
entered into the CMI/LP Reorganization Agreement which provides
for the framework to properly restructure their inter-entity
arrangements by effecting a comprehensive reorganization of the
Shared Services and a transition of substantially all of the
assets of the National Post Company to the LP Entities.
A full-text copy of the CMI/LP Reorganization Agreement, with the
Shared Services Transition Agreement and the NP Transition
Agreement attached to it, is available for free at
http://bankrupt.com/misc/CanWest_TRA.pdf
The consummation of the transactions contemplated under each of
the Shared Services Transition Agreement and the NP Transition
Agreement is a condition to the consummation of the transaction
contemplated under the other agreement. Each of the
Administrative Agent and the Ad Hoc Committee has been clear that
it will only support the CMI/LP Reorganization Agreement as a
whole and would not support a consummation of either of the
Shared Services Transition Agreement or the NP Transition
Agreement without the concurrent consummation of the other
agreement.
The Shared Services Transition Agreement
The Shared Services Transition Agreement provides for the orderly
transition and subsequent termination of the Shared Services
Agreements. The terms of the Shared Services Transition
Agreement, include:
(a) a transition of employees between the CMI Entities and LP
Entities and adjustment of amounts currently payable for
the Shared Services in accordance with Section 2.5 of the
Shared Services Transition Agreement from the date of
closing of the Shared Services Transition Agreement until
the Shared Services Agreements are terminated; and
(b) all Shared Services Agreements will be terminated by
certain dates ranging from February 28, 2010, to
February 28, 2011.
A summary of the amendments to the Shared Services Agreements is
available for free at:
http://bankrupt.com/misc/CanWest_SSAamendments.pdf
The Shared Services Transition Agreement also sets out procedures
for offering employment to the various employees of the LP
Entities and the CMI Entities and modifies their obligations
under certain pension plans maintained for the benefit of their
employees.
The NP Transition Agreement
The NP Transition Agreement provides for the transition of the
business of the National Post Company as a going concern.
Pursuant to the NP Transition Agreement, a new wholly-owned
subsidiary "the LP Nominee" of Canwest Publishing
Inc./Publications Canwest Inc., will acquire substantially all of
the assets of the National Post Company and certain intellectual
property of Canwest Global in consideration for the Transfer
Price/Transition Cost which includes: (a) the assumption of
certain liabilities up to a maximum amount of $6.3 million; and
(b) payment of the cash component of the Transfer
Price/Transition Cost.
These are the salient terms of the NP Transition Agreement:
(a) the LP Nominee has agreed to take title to the Assets,
which constitute substantially all of the assets of the
National Post Company, on an "as is, where is" basis;
(b) the LP Nominee will assume certain liabilities of the
National Post Company, including certain trade payables
and accrued expenses;
(c) these liabilities, among others, are not being assumed by
the LP Nominee and will remain as claims in the estate of
the National Post Company:
(i) breach of contract or license claims, product
liability claims and all other litigation claims;
(ii) all employment obligations relating to those
employees who do not accept the LP Nominee's offer
of employment;
(iii) liabilities of the National Post Company to the
other CMI Entities, except for any amounts owing in
connection with the Shared Services; and
(iv) certain pre-filing payables of the National Post
Company.
(d) under the NP Transition Agreement, the LP Nominee must pay
a portion of the Transfer Price/Transition Cost to the
National Post Company in cash. The cash component is
equal to (i) the sum of C$2 million and 50% of the
National Post Company's negative net cash flow during the
month of October 2009, to a maximum of C$1 million, less
(ii) a reduction equal to the amount, if any, by which the
Assumed Liabilities Estimate exceeds C$6.3 million; and
(e) the NP Transition Agreement is conditional on obtaining
the consent of the Administrative Agent on behalf of the
Majority LP Secured Lenders.
A full-text copy of the Order approving the Transition and
Reorganization Agreement is available for free at:
http://bankrupt.com/misc/CanWest_TRAord.pdf
About Canwest Global
Canwest Global Communications Corp. (TSX: CGS and CGS.A) --
http://www.canwest.com/-- an international media company, is
Canada's largest media company. In addition to owning the Global
Television Network, Canwest is Canada's largest publisher of
English language daily newspapers and owns, operates and holds
substantial interests in conventional television, out-of-home
advertising, specialty cable channels, web sites and radio
stations and networks in Canada, New Zealand, Australia, Turkey,
Indonesia, Singapore, the United Kingdom and the United States.
On October 6, 2009, Canwest Global, Canwest Media Inc., Canwest
Television Limited Partnership (including Global Television,
MovieTime, DejaView and Fox Sports World), The National Post
Company and certain subsidiaries voluntarily entered into, and
successfully obtained an Order from the Ontario Superior Court of
Justice (Commercial Division) commencing proceedings under the
Companies' Creditors Arrangement Act. The CMI Entities'
commencement of these proceedings was undertaken in furtherance of
a proposed recapitalization transaction that is supported by over
70% of holders of the 8% senior subordinated notes issued by CMI.
On the same day, FTI Consulting Canada Inc., the Court-appointed
Monitor in the CCAA proceedings, sought protection in the United
States Bankruptcy Court under Chapter 15 of the United States
Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No. 09-15994) for
certain of the entities involved in Canwest's television business
that filed for protection under the CCAA, including Canwest,
Canwest Media Inc. and Canwest Global Broadcasting
Inc./Radiodiffusion Canwest Global Inc.
Judge Stuart M. Bernstein presides over the Chapter 15 cases.
Evan D. Flaschen, Esq., at Bracewell & Giuliani LLP, in Hartford,
Connecticut, serves as Chapter 15 Petitioner's counsel. The
Chapter 15 Debtors disclosed estimated assets of $500 million to
$1 billion and estimated debts of $50 million to $100 million.
In a regulatory filing with the U.S. Securities and Exchange
Commission, Canwest Media disclosed C$4,847,020,000 in total
assets and C$5,826,522,000 in total liabilities at May 31, 2009.
Bankruptcy Creditors' Service, Inc., publishes Canwest Bankruptcy
News. The newsletter tracks the CCAA proceedings and Chapter 15
proceedings undertaken by Canwest Global Communications Corp. and
its affiliates (http://bankrupt.com/newsstand/or 215/945-7000).
CANWEST GLOBAL: CMI Wants Retirees Representatives
--------------------------------------------------
As of October 6, 2009, Canwest Global Communications Corp. and
the other applicants and partnerships -- the CMI Entities --
employed approximately 1,700 active employees. The aggregate
number of retirees and surviving spouses in receipt of a pension
from a pension plan sponsored by the CMI Entities was at least
280. In addition, the CMI Entities had approximately 180 former
employees who were receiving non-pension benefits from the CMI
Entities, of which approximately 100 were represented by a union
when they were employed by the CMI Entities, and approximately 80
who were not represented by a union when they were employed by
the CMI Entities.
Approximately 80 former non-unionized employees were entitled to
receive post-employment and post-retirement benefits, most
notably health, dental and term life insurance benefits, says
John E. McGuire, chief financial officer of Canwest Global
Communications Corp. and Canwest Media Inc. The CMI Entities
have recently advised these former non-unionized employees that
the CMI Entities will cease making all post-employment and post-
retirement benefits payments in relation to claims incurred after
November 13, 2009.
Moreover, in conjunction with the sale of CHCH-TV to Channel Zero
Inc., the CMI Entities terminated the Global Communications
Limited Retirement Plan for CH Employees effective August 31,
2009. The CH Employees Plan was a defined benefit pension plan
registered under the Pension Benefits Standards Act. As of
August 31, 2009, there were approximately 120 former employees
who were in receipt of a pension or entitled to a deferred vested
pension under the CH Employees Plan.
For these reason, the CMI Entities sought and obtained from the
Ontario Superior Court of Justice an order appointing:
(a) representatives of their employees and other related
parties with potential claims in respect of various
pension and non-pension benefits, and
(b) counsel to represent all Retirees in the CCAA proceedings
for any issues affecting the Retirees.
David Cremasco, Rose Stricker and Lawrence Schnurr were appointed
as representatives, whether or not the applicable former
employees were represented by a union when they were so employed:
(a) all former employees of the CMI Entities, or the surviving
spouses of former employees if applicable, who are in
receipt of a pension from a registered or unregistered
pension plan sponsored by a CMI Entity,
(b) all former employees of the CMI Entities, or the surviving
spouses of former employees if applicable, who are
entitled to receive a deferred vested pension from a
registered or unregistered pension plan sponsored by a CMI
Entity, and
(c) all former employees of the CMI Entities, or the surviving
spouses of former employees if applicable, who were,
immediately before October 6, 2009, entitled to receive
non-pension benefits from a CMI Entity.
However, this excludes the Retirees of the Communications, Energy
and Paperworkers Union of Canada, in the CCAA proceedings,
including for the purpose of settling or compromising claims by
the Retirees in the CCAA proceedings. CEP Retirees are former
employees of the CMI Entities who were represented by the
Communications, Energy and Paper-workers Union of Canada when
they were so employed and who are not entitled to benefits under
the CH Employees Plan or the surviving spouses of those former
employees, if applicable, subject to any further or other Order
of the Court. For greater certainty, other than the CEP
Retirees who are participants in the CH Employees Plan, the CEP
Retirees will not be represented by the Representatives or
Representative Counsel in the CCAA proceedings, subject to any
further or other Order of the Court.
The Canadian Court has also appointed Cavalluzzo Hayes Shilton
McIntyre & Cornish LLP as counsel to represent the Retirees in
the CCAA proceedings. In July 2009, Cavalluzzo LLP was retained
to act for certain Retirees who are participants of the CH
Employees Plan following the announcement by the CMI Entities
that the CH Employees Plan would be terminated effective
August 31, 2009.
The Representatives are members of the CHCH 11 Retirees
Association, a group of retired former employees and deferred
vested former employees from CHCH TV in Hamilton, Ontario.
Mr. McGuire says that with the exception of the CH Retirees who
have retained Cavalluzzo LLP, most of the Retirees are not
represented by counsel in the CCAA proceedings. All Retirees who
were not represented by a union when they were employed by the
CMI Entities, or, for surviving spouses, the applicable former
employee was not a member of a union when he or she was employed
by the CMI Entities, are creditors of the CMI Entities and
therefore have a claim against the CMI Entities and will
participate in the Claims Procedure.
FTI Consulting Canada Inc., the Court-appointed monitor under the
Companies' Creditors Arrangement Act, informed the Court that the
Retirees are a particularly vulnerable group. Without assistance
in information gathering for the court proceedings and the claims
process, the Retirees are at risk of being unable to understand
and protect their interests in the restructuring. The
appointment of the Representatives and representative counsel,
along with expert actuarial and benefit advisors, will give the
Retirees access to necessary resources they would be unable to
obtain on an individual basis.
Mr. McGuire said that it is the view of the CMI Entities that the
Court should be accurately informed and made aware of all
relevant facts in order to be able to take into consideration the
position of the Retirees in respect of issues brought before the
Court which are or may be relevant to the Retirees.
The Canadian Court further ruled that that any individual Retiree
who does not wish to be represented by Representative Counsel and
the Representatives must notify the Monitor. The Retiree will
not be represented by the Representative Counsel and the
Representatives and will be represented themselves as an
independent individual party to the extent they wish to appear in
the CCAA proceedings.
About Canwest Global
Canwest Global Communications Corp. (TSX: CGS and CGS.A) --
http://www.canwest.com/-- an international media company, is
Canada's largest media company. In addition to owning the Global
Television Network, Canwest is Canada's largest publisher of
English language daily newspapers and owns, operates and holds
substantial interests in conventional television, out-of-home
advertising, specialty cable channels, web sites and radio
stations and networks in Canada, New Zealand, Australia, Turkey,
Indonesia, Singapore, the United Kingdom and the United States.
On October 6, 2009, Canwest Global, Canwest Media Inc., Canwest
Television Limited Partnership (including Global Television,
MovieTime, DejaView and Fox Sports World), The National Post
Company and certain subsidiaries voluntarily entered into, and
successfully obtained an Order from the Ontario Superior Court of
Justice (Commercial Division) commencing proceedings under the
Companies' Creditors Arrangement Act. The CMI Entities'
commencement of these proceedings was undertaken in furtherance of
a proposed recapitalization transaction that is supported by over
70% of holders of the 8% senior subordinated notes issued by CMI.
On the same day, FTI Consulting Canada Inc., the Court-appointed
Monitor in the CCAA proceedings, sought protection in the United
States Bankruptcy Court under Chapter 15 of the United States
Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No. 09-15994) for
certain of the entities involved in Canwest's television business
that filed for protection under the CCAA, including Canwest,
Canwest Media Inc. and Canwest Global Broadcasting
Inc./Radiodiffusion Canwest Global Inc.
Judge Stuart M. Bernstein presides over the Chapter 15 cases.
Evan D. Flaschen, Esq., at Bracewell & Giuliani LLP, in Hartford,
Connecticut, serves as Chapter 15 Petitioner's counsel. The
Chapter 15 Debtors disclosed estimated assets of $500 million to
$1 billion and estimated debts of $50 million to $100 million.
In a regulatory filing with the U.S. Securities and Exchange
Commission, Canwest Media disclosed C$4,847,020,000 in total
assets and C$5,826,522,000 in total liabilities at May 31, 2009.
Bankruptcy Creditors' Service, Inc., publishes Canwest Bankruptcy
News. The newsletter tracks the CCAA proceedings and Chapter 15
proceedings undertaken by Canwest Global Communications Corp. and
its affiliates (http://bankrupt.com/newsstand/or 215/945-7000).
CANWEST GLOBAL: Canwest LP Talks With Lenders Continue
------------------------------------------------------
Canwest Global Communications Corp. announced November 10 that its
subsidiary, Canwest Limited Partnership, and its lenders under its
senior secured credit facilities, continue discussions regarding
the framework for a potential financial restructuring.
As announced on Sept. 10, 2009, Canwest LP and its senior lenders
had entered into a forbearance agreement under which, the senior
lenders had agreed not to enforce their rights under the senior
secured credit facilities arising from Canwest LP's previously
announced defaults prior to October 31, 2009.
On October 30, Canwest LP and its senior lenders agreed to extend
this forbearance date to November 9. Canwest LP and its senior
lenders are in discussions regarding a further extension of the
forbearance period.
Canwest LP owns and operates 12 daily newspapers, 23 community
newspapers, more than 80 online operations as well as other
publications and national services and owns the National Post.
About Canwest Global
Canwest Global Communications Corp. (TSX: CGS and CGS.A) --
http://www.canwest.com/-- an international media company, is
Canada's largest media company. In addition to owning the Global
Television Network, Canwest is Canada's largest publisher of
English language daily newspapers and owns, operates and holds
substantial interests in conventional television, out-of-home
advertising, specialty cable channels, web sites and radio
stations and networks in Canada, New Zealand, Australia, Turkey,
Indonesia, Singapore, the United Kingdom and the United States.
On October 6, 2009, Canwest Global, Canwest Media Inc., Canwest
Television Limited Partnership (including Global Television,
MovieTime, DejaView and Fox Sports World), The National Post
Company and certain subsidiaries voluntarily entered into, and
successfully obtained an Order from the Ontario Superior Court of
Justice (Commercial Division) commencing proceedings under the
Companies' Creditors Arrangement Act. The CMI Entities'
commencement of these proceedings was undertaken in furtherance of
a proposed recapitalization transaction that is supported by over
70% of holders of the 8% senior subordinated notes issued by CMI.
On the same day, FTI Consulting Canada Inc., the Court-appointed
Monitor in the CCAA proceedings, sought protection in the United
States Bankruptcy Court under Chapter 15 of the United States
Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No. 09-15994) for
certain of the entities involved in Canwest's television business
that filed for protection under the CCAA, including Canwest,
Canwest Media Inc. and Canwest Global Broadcasting
Inc./Radiodiffusion Canwest Global Inc.
Judge Stuart M. Bernstein presides over the Chapter 15 cases.
Evan D. Flaschen, Esq., at Bracewell & Giuliani LLP, in Hartford,
Connecticut, serves as Chapter 15 Petitioner's counsel. The
Chapter 15 Debtors disclosed estimated assets of $500 million to
$1 billion and estimated debts of $50 million to $100 million.
In a regulatory filing with the U.S. Securities and Exchange
Commission, Canwest Media disclosed C$4,847,020,000 in total
assets and C$5,826,522,000 in total liabilities at May 31, 2009.
Bankruptcy Creditors' Service, Inc., publishes Canwest Bankruptcy
News. The newsletter tracks the CCAA proceedings and Chapter 15
proceedings undertaken by Canwest Global Communications Corp. and
its affiliates (http://bankrupt.com/newsstand/or 215/945-7000).
CENTAUR PA: Gets Interim Nod for Renewal of $50-Mil. L/C
--------------------------------------------------------
According to Bloomberg News, Centaur PA Land LP and affiliate
Valley View Downs LP accomplished one of the principal objects of
their Oct. 28 Chapter 11 filing when the bankruptcy court gave
interim approval to extend the maturity of a $50 million letter of
credit deposited with Pennsylvania gaming regulators in
satisfaction of a requirement for proceeding with the application
for a state gaming license. The letter of credit is
collateralized with $50 million cash. A final hearing will be
held Nov. 23.
Centaur LLC said its two affiliates filed voluntary bankruptcy
petitions under Chapter 11 to preserve the status of the Valley
View Downs & Casino project. Centaur said it 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.
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.
CENTENNIAL COMMUNICATIONS: Merger with AT&T Becomes Effective
-------------------------------------------------------------
AT&T Inc. discloses that on November 6, 2009, its Merger with
Centennial Communications Corp. became effective -- with
Centennial becoming a wholly owned subsidiary of AT&T. Each share
of Centennial Common Stock was converted into the right to receive
$8.50 in cash per share, without interest for a total
consideration of roughly $945 million funded from AT&T Inc.'s
general operating cash. As a result of the Merger, AT&T Inc.
beneficially owns (and has sole voting and dispositive power over)
all of the Centennial Common Stock.
GAMCO Investors, Inc., Gabelli Funds, LLC, Teton Advisors, Inc.
and their affiliated funds report that as a result of the
acquisition of Centennial by AT&T, they no longer have beneficial
ownership of any of Centennial's shares.
Prudential Financial, Inc., reports it also has ceased to be
deemed the beneficial owner of more than 5% of the outstanding
common stock of Centennial.
Centennial has filed a Form 25 with the Securities and Exchange
Commission to remove its common stock from listing with the NASDAQ
Stock Market LLC.
About Centennial Communications
Based in Wall, New Jersey, Centennial Communications
(NASDAQ: CYCL) -- http://www.centennialwireless.com/and
http://www.centennialpr.com/-- is a regional wireless and
broadband telecommunications service provider serving roughly
1.1 million wireless customers and roughly 789,100 access line
equivalents in markets covering more than 13 million Net Pops in
the United States and Puerto Rico. In the United States, the
Company is a regional wireless service provider in small cities
and rural areas in two geographic clusters covering parts of six
states in the Midwest and Southeast. The Company owns and
operates wireless networks in Puerto Rico and the U.S. Virgin
Islands, and in Puerto Rico, it is also a facilities-based, fully
integrated communications service provider offering broadband
communications services to business and residential customers.
Welsh, Carson, Anderson & Stowe is a significant shareholder of
Centennial.
At August 31, 2009, the Company had $1.48 billion in total
assets against total current liabilities of $460.54 million,
long-term debt of $1.75 billion, deferred income taxes of
$165.06 million, and other liabilities of $30.65 million,
resulting in stockholders' deficit of $925.89 million. At
August 31, 2009, the Company had total liquidity of
$395.1 million, consisting of cash and cash equivalents
totaling $247.6 million and roughly $147.5 million available
under its revolving credit facility.
* * *
Standard & Poor's Ratings Services said affected ratings,
including the 'B' corporate credit rating on Centennial
Communications remain on CreditWatch with positive implications,
where they were placed on Nov. 10, 2008, pending the company's
acquisition by AT&T Inc. (A/Negative/A-1).
This concludes the Troubled Company Reporter's coverage of
Centennial until facts and circumstances, if any, emerge that
demonstrate financial or operational strain or difficulty at a
level sufficient to warrant renewed coverage.
CENTENNIAL COMMUNICATIONS: S&P Withdraws 'B' Corp. Credit Rating
----------------------------------------------------------------
Standard & Poor's Ratings Services withdrew the corporate credit
rating and senior secured issue-level ratings on Wall, New Jersey-
based Centennial Communications Corp. and its related entities.
This action follows the completion of the company's acquisition by
AT&T Inc. (A/Negative/A-1) on Nov. 6. The ratings had been on
CreditWatch with positive implications since Nov. 10, 2008.
In addition, S&P raised its issue-level rating on Centennial's
unsecured debt to 'A', the same level as the AT&T debt. AT&T has
called for the redemption of all of Centennial's unsecured debt.
If this redemption is successfully completed, S&P will withdraw
the ratings on Centennial's unsecured debt issues.
Ratings List
Withdrawn
Centennial Communications Corp.
To From
-- ----
Corporate Credit Rating NR B/Watch Pos/--
Centennial Cellular Operating Co. LLC
To From
-- ----
Senior Secured NR BB-
Recovery Rating NR 1
Upgraded
Centennial Communications Corp.
To From
-- ----
Senior Unsecured* A B/Watch Pos
Recovery Rating NR 3
Senior Unsecured A CCC+/Watch Pos
Recovery Rating NR 6
* Guaranteed by Centennial Puerto Rico Operations Corp.
NR -- Not rated.
CHRYSLER LLC: Crain Appeals Bankr. Judge Order on Dealer Stays
--------------------------------------------------------------
Crain CDJ, LLC, notifies the Court and parties-in-interest that it
will take an appeal, pursuant to Section 158(a) of the Judicial
and Judiciary Procedures Code, from Bankruptcy Judge Arthur
Gonzalez's opinion and order denying certain dealers' request for
an order certifying immediate appeal to the United States Court of
Appeals for the Second Circuit entered on October 16, 2009.
Crain CDJ tells the Court that it elects, pursuant to Section
158(a), to have its appeal heard by the United States District
Court for the Southern District of New York. The election, Crain
CDJ notes, is without prejudice to its or any other party's right
to seek certification of the appeal directly to the United States
Court of Appeals for the Second Circuit pursuant to Section
158(d).
Crain CDJ wants the District Court to determine whether Judge
Gonzalez, in the Certification Order:
(a) further impermissibly expanded the order approving the
sale of substantially all of the Debtors' assets, the
order rejecting the Dealers' dealership agreements, or the
order enforcing automatic stay against the Dealers;
(b) erred in holding that the Enforcement Order was a
straight-forward application of the Sale Order and
Rejection Order, and that Travelers Indemnity Co. v. Baily
applies;
(c) erred in holding that the terms of the Sale Order and the
Rejection Order were unambiguous;
(d) erred in holding that Crain CDJ's statements to the
Arkansas Motor Vehicle Commission were a collateral attack
on the Sale Order and the Rejection Order; and
(e) erred in holding that Crain CDJ's statements to the
Arkansas Motor Vehicle Commission are transferee liability
claims.
Boucher, Et Al., Appeal
Leyni Disla, Deputy Clerk of the United States District Court for
the Southern District of New York, notifies parties to the
separate appeal filed by Boucher Imports, Inc., et al., that the
proceeding is reassigned to the calendar of District Judge Colleen
McMahon.
In a separate filing, Boucher, et al., asked the Court for a
briefing schedule.
"Please note that the first entry on the Court's docket indicates
a November 9, 2009, due date for the Appellants' brief," Paul R.
Norman, Esq., at Boardman, Suhr, Curry & Field LLP, in Madison,
Wisconsin, told Judge McMahon. "Please confirm whether this is
the correct due date for the Appellants' brief and, if not, please
provide us with a briefing schedule. If possible, the Appellants
prefer a due date for their brief of November 9 or later," he
added.
Appeals to Be Consolidated
Matthew D. Wells, Esq., at Davidson Law Firm, Ltd., asks the Court
to consolidate the appeals filed by Boucher, et al., and Crain
CDJ, which take an appeal from the same ruling isssued by Judge
Gonzalez enforcing automatic stay on certain of the Debtors'
dealers.
Mr. Wells informs the Court that parties to both appeals have
agreed on the consolidation to avoid duplication of work and for
judicial economy.
About Chrysler LLC
Chrysler Group LLC, formed in 2009 from a global strategic
alliance with Fiat Group, produces Chrysler, Jeep(R), Dodge,
Mopar(R) and Global Electric Motors (GEM) brand vehicles and
products. With the resources, technology and worldwide
distribution network required to compete on a global scale, the
alliance builds on Chrysler's culture of innovation -- first
established by Walter P. Chrysler in 1925 -- and Fiat's
complementary technology -- from a company whose heritage dates
back to 1899.
Headquartered in Auburn Hills, Michigan, Chrysler Group LLC's
product lineup features some of the world's most recognizable
vehicles, including the Chrysler 300, Jeep Wrangler and Dodge Ram.
Fiat will contribute world-class technology, platforms and
powertrains for small- and medium-sized cars, allowing Chrysler
Group to offer an expanded product line including environmentally
friendly vehicles.
Chrysler LLC and 24 affiliates on April 30 sought Chapter 11
protection from creditors (Bankr. S.D.N.Y (Mega-case), Lead Case
No. 09-50002). Chrysler hired Jones Day, as lead counsel; Togut
Segal & Segal LLP, as conflicts counsel; Capstone Advisory Group
LLC, and Greenhill & Co. LLC, for financial advisory services; and
Epiq Bankruptcy Solutions LLC, as its claims agent. Chrysler has
changed its corporate name to Old CarCo following its sale to a
Fiat-owned company. As of December 31, 2008, Chrysler had
$39,336,000,000 in assets and $55,233,000,000 in debts. Chrysler
had $1.9 billion in cash at that time.
In connection with the bankruptcy filing, Chrysler reached an
agreement with Fiat SpA, the U.S. and Canadian governments and
other key constituents regarding a transaction under Section 363
of the Bankruptcy Code that would effect an alliance between
Chrysler and Italian automobile manufacturer Fiat. Under the
terms approved by the Bankruptcy Court, the company formerly known
as Chrysler LLC on June 10, 2009, formally sold substantially all
of its assets, without certain debts and liabilities, to a new
company that will operate as Chrysler Group LLC. Fiat has a 20
percent equity interest in Chrysler Group.
Bankruptcy Creditors' Service, Inc., publishes Chrysler Bankruptcy
News. The newsletter tracks the Chapter 11 proceedings of
Chrysler LLC and its debtor-affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
CHRYSLER LLC: Gets Nod to Expand Scope for Cahill Work
------------------------------------------------------
Old CarCo LLC and its affiliates obtained approval from the
Bankruptcy Court an application to extend the scope of Cahill
Gordon & Reindel LLP's employment as the special counsel of three
independent members of Chrysler LLC's board of managers. The
Debtors expect to include Cahill's representation in discrete
matters in the Chapter 11 cases in Cahill's services.
Joel H. Levitin, Esq., a member of Cahill, relates that since the
time of Cahill's retention, all but one of the members of the
Board have resigned, leaving James N. Chapman, one of the
Independent Managers, as the sole manager, and the Debtors have
only one remaining employee, Ronald E. Kolka, the chief executive
officer.
Jones Day, which has been serving as general bankruptcy counsel to
the Debtors, recently asked that the Debtors consent to Jones
Day's engagement by New Chrysler with respect to executive
compensation and employee benefits matters, financing matters,
dealer matters, and board of director matters that are not adverse
to the Debtors.
However, according to Mr. Levitin, Messrs. Chapman and Kolka
informed Jones Day that they consent on behalf of the Debtors to
Jones Day's representation of New Chrysler in matters unrelated to
the Debtors, provided that the Debtors are permitted to rely on
Cahill to represent the Debtors as their board and management may
deem appropriate, including with respect to matters in which New
Chrysler may have an interest.
The board and management believe that it is necessary for them to
be able to rely on Cahill to represent the Debtors in certain
discrete circumstances, Mr. Levitin tells the Court.
About Chrysler LLC
Chrysler Group LLC, formed in 2009 from a global strategic
alliance with Fiat Group, produces Chrysler, Jeep(R), Dodge,
Mopar(R) and Global Electric Motors (GEM) brand vehicles and
products. With the resources, technology and worldwide
distribution network required to compete on a global scale, the
alliance builds on Chrysler's culture of innovation -- first
established by Walter P. Chrysler in 1925 -- and Fiat's
complementary technology -- from a company whose heritage dates
back to 1899.
Headquartered in Auburn Hills, Michigan, Chrysler Group LLC's
product lineup features some of the world's most recognizable
vehicles, including the Chrysler 300, Jeep Wrangler and Dodge Ram.
Fiat will contribute world-class technology, platforms and
powertrains for small- and medium-sized cars, allowing Chrysler
Group to offer an expanded product line including environmentally
friendly vehicles.
Chrysler LLC and 24 affiliates on April 30 sought Chapter 11
protection from creditors (Bankr. S.D.N.Y (Mega-case), Lead Case
No. 09-50002). Chrysler hired Jones Day, as lead counsel; Togut
Segal & Segal LLP, as conflicts counsel; Capstone Advisory Group
LLC, and Greenhill & Co. LLC, for financial advisory services; and
Epiq Bankruptcy Solutions LLC, as its claims agent. Chrysler has
changed its corporate name to Old CarCo following its sale to a
Fiat-owned company. As of December 31, 2008, Chrysler had
$39,336,000,000 in assets and $55,233,000,000 in debts. Chrysler
had $1.9 billion in cash at that time.
In connection with the bankruptcy filing, Chrysler reached an
agreement with Fiat SpA, the U.S. and Canadian governments and
other key constituents regarding a transaction under Section 363
of the Bankruptcy Code that would effect an alliance between
Chrysler and Italian automobile manufacturer Fiat. Under the
terms approved by the Bankruptcy Court, the company formerly known
as Chrysler LLC on June 10, 2009, formally sold substantially all
of its assets, without certain debts and liabilities, to a new
company that will operate as Chrysler Group LLC. Fiat has a 20
percent equity interest in Chrysler Group.
Bankruptcy Creditors' Service, Inc., publishes Chrysler Bankruptcy
News. The newsletter tracks the Chapter 11 proceedings of
Chrysler LLC and its debtor-affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
CHRYSLER LLC: Proposes to Hire AAAI as Appraiser
------------------------------------------------
Chrysler LLC, now known as Old CarCo LLC, and its debtor
affiliates seek the Court's authority to employ American Appraisal
Associates, Inc., as their appraiser, nunc pro tunc to October 13,
2009.
Ronald E. Kolka, the Debtors' chief executive officer, relates
that the Debtors seek to employ American Appraisal as their
appraiser in connection with the evaluation of ad valorem tax
assessments, as of December 31, 2008, of real property consisting
of two vacant land parcels located in the Oakland Technology Park
Central in the City of Auburn Hills, Oakland County, Michigan.
American Appraisal is a leading, global, independent professional
valuation firm. American Appraisal and its subsidiaries provide a
wide range of professional valuation, appraisal and consulting
services to corporate, governmental and institutional clients on a
worldwide basis. American Appraisal currently has approximately
850 employees worldwide and offices in 28 countries. American
Appraisal is a wholly owned subsidiary of AAManagement Group,
Inc., that is owned by shareholders worldwide who are managers and
employees of American Appraisal.
As the Debtors' appraiser, American Appraisal will provide
appraisal and valuation services including, but not limited to:
(a) estimating the value required by law or regulation within
the relevant jurisdiction of Oakland County, Michigan, of
the identified interest in the Identified Assets, as if
offered for sale in the open market considering the
highest and best use of the property, using the true cash
value standard, considering the income capitalization,
sales comparison and cost approaches to valuation and
evaluating the usefulness of each approach based on the
type of property, the applicability of the approach to
that property, and the nature of the data available to
American Appraisal; and
(b) preparing a draft report and related narrative discussion
of the supporting analyses and assumptions, along with
appropriate exhibits.
Mr. Kolka submits that the Debtors lack the in-house resources to
undertake these Services, and the Debtors' other retained
professionals generally are not able, and have not been retained,
to provide the Services.
The Debtors will pay American Appraisal's fees based on this
compensation structure:
(a) American Appraisal will charge the Debtors a flat fee of
$15,000, plus actual expenses, which will be invoiced
through the delivery of the Report:
* $4,500 upon authorization of the engagement; and
* progress billing as time is charged and expenses are
incurred;
(b) upon supplemental written agreement of the parties,
American Appraisal will charge additional fees for
consultation, court preparation and court testimony at
hourly rates of $300 to $550 based on the title of the
staff involved; and
(c) American Appraisal will also charge additional fees to
increase the scope of its engagement or for its
involvement in subsequent reviews beyond the customary
work effort.
The Debtors will reimburse American Appraisal for reasonable, out-
of-pocket expenses. The Debtors tell the Court that they have a
right to terminate American Appraisal's engagement at any time,
and upon termination, the Debtors are obligated to pay only for
the actual fees and expenses incurred by American Appraisal.
As part of the overall compensation payable to American Appraisal,
the Debtors have agreed to indemnify American Appraisal for all
reasonable attorneys' fees that American Appraisal incurs as a
result of becoming part of, or named in, an administrative or
legal dispute in connection with the engagement, but only to the
extent claims do not arise from American Appraisal's negligence,
misconduct, bad faith or breach of fiduciary duty.
Christopher Rexroat, Esq., the associate general counsel of
American Appraisal, assures the Court that American Appraisal is a
"disinterested person" as the term is defined in Section 101(14)
of the Bankruptcy Code.
About Chrysler LLC
Chrysler Group LLC, formed in 2009 from a global strategic
alliance with Fiat Group, produces Chrysler, Jeep(R), Dodge,
Mopar(R) and Global Electric Motors (GEM) brand vehicles and
products. With the resources, technology and worldwide
distribution network required to compete on a global scale, the
alliance builds on Chrysler's culture of innovation -- first
established by Walter P. Chrysler in 1925 -- and Fiat's
complementary technology -- from a company whose heritage dates
back to 1899.
Headquartered in Auburn Hills, Michigan, Chrysler Group LLC's
product lineup features some of the world's most recognizable
vehicles, including the Chrysler 300, Jeep Wrangler and Dodge Ram.
Fiat will contribute world-class technology, platforms and
powertrains for small- and medium-sized cars, allowing Chrysler
Group to offer an expanded product line including environmentally
friendly vehicles.
Chrysler LLC and 24 affiliates on April 30 sought Chapter 11
protection from creditors (Bankr. S.D.N.Y (Mega-case), Lead Case
No. 09-50002). Chrysler hired Jones Day, as lead counsel; Togut
Segal & Segal LLP, as conflicts counsel; Capstone Advisory Group
LLC, and Greenhill & Co. LLC, for financial advisory services; and
Epiq Bankruptcy Solutions LLC, as its claims agent. Chrysler has
changed its corporate name to Old CarCo following its sale to a
Fiat-owned company. As of December 31, 2008, Chrysler had
$39,336,000,000 in assets and $55,233,000,000 in debts. Chrysler
had $1.9 billion in cash at that time.
In connection with the bankruptcy filing, Chrysler reached an
agreement with Fiat SpA, the U.S. and Canadian governments and
other key constituents regarding a transaction under Section 363
of the Bankruptcy Code that would effect an alliance between
Chrysler and Italian automobile manufacturer Fiat. Under the
terms approved by the Bankruptcy Court, the company formerly known
as Chrysler LLC on June 10, 2009, formally sold substantially all
of its assets, without certain debts and liabilities, to a new
company that will operate as Chrysler Group LLC. Fiat has a 20
percent equity interest in Chrysler Group.
Bankruptcy Creditors' Service, Inc., publishes Chrysler Bankruptcy
News. The newsletter tracks the Chapter 11 proceedings of
Chrysler LLC and its debtor-affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
CHRYSLER LLC: Proposes to Sell Newark Plant for $24 Mil.
--------------------------------------------------------
Chrysler LLC, now known as Old CarCo LLC, and its units seek the
Court's authority to sell their Newark, Delaware assembly plant
for $24,250,000 to the University of Delaware or an acquisition
vehicle created by the University of Delaware, pursuant to a
purchase agreement and Sections 105 and 363 of the Bankruptcy
Code, free and clear of all liens, claims, interests and
encumbrances.
The Property consists of two parcels of land located in New Castle
County, Delaware, and includes a manufacturing facility and a
parts distribution facility. In conjunction with their
restructuring of operations prior to the Petition Date, the
Debtors shut down production at the Property at the end of 2008,
relates Corinne Ball, Esq., at Jones Day, in New York.
The Property was pledged as collateral to secure the Debtors'
obligations under the Amended and Restated First Lien Credit
Agreement, dated as of August 3, 2007, among Carco Intermediate
Holdco II LLC, Old Carco, the lenders' party, and JP Morgan Chase
N.A., as administrative agent. The carrying costs associated with
the Property are substantial and are estimated on an annual basis
to be in excess of $5,000,000. These costs currently are being
borne by New Chrysler under the Transition Services Agreement
between New Chrysler and Old Carco entered into in connection with
the Fiat Transaction, but New Chrysler's obligation to pay these
expenses expired on October 31, 2009.
Ms. Ball contends that the Proposed Buyer's offer represents the
highest and best offer for the Property. She also reveals that
pursuant to the Purchase Agreement, the Buyer is assuming
responsibility for the remediation of certain environmental issues
on the Property, which otherwise could impose obligations on the
Debtors. At its sole cost and expense, the Buyer will conduct a
remediation of the Property according to a remediation plan
approved by the Delaware Department of Natural Resources and
Environmental Controls.
The timely consummation of the transactions under the Purchase
Agreement will allow the Debtors to avoid incurring the
substantial carrying costs associated with the Property, while
bringing in significant cash that can be used to reduce the claims
of the First Lien Lenders under the First Lien Credit Agreement,
Ms. Ball contends, among other things.
The Purchase Agreement provides for the exclusion to the sale of
certain personal property owned by New Chrysler that is to be
removed prior to the closing of the sale. The Buyer is also
required to make a deposit of $2,000,000.
Prior to the Closing, the decommissioning work specified on the
Purchase Agreement will be completed, Ms. Ball tells Judge
Gonzalez. To secure the performance of the work, the parties will
enter into an escrow agreement for the escrowing of $500,000 for a
75-day period to reimburse the Proposed Buyer for any
decommissioning work, which is not completed.
The Buyer will take title to the real property on an "as is,"
"where is" basis and subject to any currently existing
environmental liabilities on the Property. The parties will split
any title-agency fees and transfer costs, and the Buyer will pay
all expenses associated with a title policy and with recording of
a deed for the Property.
The Court will commence a hearing on November 12, 2009, to
consider the request. Objections are due November 5.
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)
CIENA CORP: Gets Clearance for Purchase of NNI Ethernet Assets
--------------------------------------------------------------
Ciena(R) Corporation has received regulatory clearances regarding
its proposed acquisition of substantially all of Nortel's optical
networking and carrier Ethernet assets. In the United States,
Ciena was granted early termination of the antitrust waiting
period under the Hart-Scott-Rodino Act. In addition, Ciena also
has received from the Canadian Competition Bureau a no action
letter, terminating the applicable waiting period for the proposed
transaction under the Competition Act.
As a result of Nortel's restructuring process, the proposed
transaction remains subject to a competitive bidding process.
The proposed transaction also requires the approval of the United
States Bankruptcy Court for the District of Delaware and the
Ontario Superior Court of Justice and is subject to additional
regional regulatory clearances as well as to customary closing
conditions.
About Nortel Networks
Nortel Networks (OTCBB:NRTLQ) -- http://www.nortel.com/--
delivers communications capabilities that make the promise of
Business Made Simple a reality for our customers. The Company's
next-generation technologies, for both service provider and
enterprise networks, support multimedia and business-critical
applications. Nortel's technologies are designed to help
eliminate the barriers to efficiency, speed and performance by
simplifying networks and connecting people to the information they
need, when they need it.
Nortel Networks Corp., Nortel Networks Inc., and other affiliated
corporations in Canada sought insolvency protection under the
Companies' Creditors Arrangement Act in the Ontario Superior Court
of Justice (Commercial List). Ernst & Young has been appointed to
serve as monitor and foreign representative of the Canadian Nortel
Group. The Monitor also sought recognition of the CCAA
Proceedings in the Bankruptcy Court under Chapter 15 of the
Bankruptcy Code.
Nortel Networks Inc. and 14 affiliates filed separate Chapter 11
petitions on January 14, 2009 (Bankr. D. Del. Case No. 09-10138).
Judge Kevin Gross presides over the case. James L. Bromley, Esq.,
at Cleary Gottlieb Steen & Hamilton, LLP, in New York, serves as
general bankruptcy counsel; Derek C. Abbott, Esq., at Morris
Nichols Arsht & Tunnell LLP, in Wilmington, serves as Delaware
counsel. The Chapter 11 Debtors' other professionals are Lazard
Freres & Co. LLC as financial advisors; and Epiq Bankruptcy
Solutions LLC as claims and notice agent.
The Chapter 15 case is Bankr. D. Del. Case No. 09-10164. Mary
Caloway, Esq., and Peter James Duhig, Esq., at Buchanan Ingersoll
& Rooney PC, in Wilmington, Delaware, serves as Chapter 15
petitioner's counsel.
Certain of Nortel's European subsidiaries have also made
consequential filings for creditor protection. The Nortel
Companies related in a press release that Nortel Networks UK
Limited and certain subsidiaries of the Nortel group incorporated
in the EMEA region have each obtained an administration order
from the English High Court of Justice under the Insolvency Act
1986. The applications were made by the EMEA Subsidiaries under
the provisions of the European Union's Council Regulation (EC)
No. 1346/2000 on Insolvency Proceedings and on the basis that
each EMEA Subsidiary's centre of main interests is in England.
Under the terms of the orders, representatives of Ernst & Young
LLP have been appointed as administrators of each of the EMEA
Companies and will continue to manage the EMEA Companies and
operate their businesses under the jurisdiction of the English
Court and in accordance with the applicable provisions of the
Insolvency Act.
Several entities, particularly, Nortel Government Solutions
Incorporated have material operations and are not part of the
bankruptcy proceedings.
As of September 30, 2008, Nortel Networks Corp. reported
consolidated assets of $11.6 billion and consolidated liabilities
of $11.8 billion. The Nortel Companies' U.S. businesses are
primarily conducted through Nortel Networks Inc., which is the
parent of majority of the U.S. Nortel Companies. As of
September 30, 2008, NNI had assets of about $9 billion and
liabilities of $3.2 billion, which do not include NNI's guarantee
of some or all of the Nortel Companies' about $4.2 billion of
unsecured public debt.
Bankruptcy Creditors' Service, Inc., publishes Nortel Networks
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
and ancillary foreign proceedings undertaken by Nortel Networks
Corp. and its various affiliates. (http://bankrupt.com/newsstand/
or 215/945-7000)
About Ciena Corp.
Ciena Corp. specializes in practical network transition. We offer
leading network infrastructure solutions, intelligent software and
a comprehensive services practice to help our customers use their
networks to fundamentally change the way they compete. With a
global presence, Ciena leverages its heritage of practical
innovation to deliver maximum performance and economic value in
communications networks worldwide.
* * *
As reported in the Troubled company Reporter on October 9, 2009,
Standard & Poor's Ratings Services said it placed its 'B+'
corporate credit and senior unsecured ratings on Linthicum,
Maryland-based Ciena Corp. on CreditWatch with negative
implications.
CINCINNATI BELL: Sept. 30 Balance Sheet Upside Down by $614-Mil.
----------------------------------------------------------------
Cincinnati Bell Inc. on Friday filed its quarterly report on Form
10-Q with the Securities and Exchange Commission. The Company
posted net income of $27.7 million for the three months ended
September 30, 2009, from net income of $26.6 million for the same
period a year ago. The Company posted net income of $82.8 million
for the nine months ended September 30, 2009, from net income of
$65.1 million for the same period a year ago.
As of September 30, 2009, the Company had $2.01 billion in total
assets against $2.62 billion in total liabilities, resulting in
$614.0 million in stockholders' deficit.
As of September 30, 2009, the Company held $37.5 million in cash
and cash equivalents. The Company's primary sources of cash for
the remainder of the year will be cash generated by operations and
borrowings from the Corporate credit facility under which the
Company had $98.2 million of availability at September 30, 2009.
In June 2009, the Company amended its Corporate credit facility,
which would have expired in February 2010. The amended Corporate
credit facility has a $210 million revolving line of credit and
expires in August 2012. The Company's cash flows from operating
activities totaled $403.9 million for the year 2008.
Uses of cash for the remainder of the year will include repayments
and repurchases of debt and related interest, repurchases of
common shares, dividends on preferred stock, capital expenditures,
and working capital. In February 2008, the Company's Board of
Directors authorized the repurchase of the Company's outstanding
common stock in an amount up to $150 million during the next two
years. Through September 30, 2009, the Company has repurchased
$136.2 million of common stock, which leaves $13.8 million
available to repurchase common stock under the stock buyback
program.
The Company believes the cash generated by its operations and
borrowings from its Corporate credit facility and Receivables
Facility will be sufficient to fund its primary uses of cash.
The Corporate credit facility financial covenants require that the
Company maintain certain leverage ratios, interest coverage, and
fixed charge ratios. The facility also contains certain covenants
which, among other things, limit the Company's ability to incur
additional debt or liens, pay dividends, repurchase Company common
stock, sell, transfer, lease, or dispose of assets, and make
investments or merge with another company. If the Company were to
violate any of its covenants and were unable to obtain a waiver,
it would be considered a default. If the Company were in default
under its credit facility, no additional borrowings under the
credit facility would be available until the default was waived or
cured. The Company believes it is in compliance and will remain
in compliance with its Corporate credit facility covenants.
Various issuances of the Company's public debt, which include the
7-1/4% Senior Notes due 2013, 8-3/8% Subordinated Notes, and the
7% Senior Notes, contain covenants that, among other things, limit
the Company's ability to incur additional debt or liens, pay
dividends or make other restricted payments, sell, transfer,
lease, or dispose of assets and make investments or merge with
another company. Restricted payments include common stock
dividends, repurchase of common stock, and certain other public
debt repayments. The Company believes it has sufficient ability
under its public debt indentures to make its intended restricted
payments in 2009. The Company believes it is in compliance and
will remain in compliance with its public debt indentures.
A full-text copy of the Company's quarterly report on Form 10-Q is
available at no charge at http://ResearchArchives.com/t/s?4902
About Cincinnati Bell
Headquartered in Cincinnati, Ohio, Cincinnati Bell Inc. (NYSE:
CBB) -- http://www.cincinnatibell.com/-- provides integrated
communications solutions-including local, long distance, data,
Internet, and wireless services. In addition, the Company
provides office communications systems as well as complex
information technology solutions including data center and managed
services. Cincinnati Bell conducts its operations through three
business segments: Wireline, Wireless, and Technology Solutions.
* * *
As reported by the Troubled Company Reporter on October 2, 2009,
Fitch Ratings has assigned a 'BB-/RR3' rating to Cincinnati Bell's
proposed offering of $500 million of senior unsecured notes due
2017. The company's Issuer Default Rating is 'B+'. The Rating
Outlook is Stable.
Standard & Poor's Ratings Services assigned a 'B+' issue-level and
a '3' recovery rating to Cincinnati Bell's $500 million senior
notes due 2017. The '3' recovery rating indicates expectations
for meaningful (50%-70%) recovery in the event of a payment
default. In addition, S&P affirmed all ratings on CBI, including
the 'B+' corporate credit rating. The outlook is stable.
Moody's Investors Service assigned a Ba3 rating to Cincinnati
Bell's $500 million senior unsecured notes offering. Moody's
notes that the company has been addressing its debt maturities
over the past two years, and in the future is likely to take out
more debt coming due over the intermediate term.
CIT GROUP: Gets December 15 Extension for Schedules & Statements
----------------------------------------------------------------
At the behest of CIT Group Inc. and CIT Funding Company of
Delaware LLC, Bankruptcy Judge Allan S. Gropper extended the
period within which the Debtors may file their (i) schedules of
assets and liabilities, (ii) schedules of executory contracts and
unexpired leases, and (iii) statements of financial affairs
through December 15, 2009.
The Court permanently waived the requirement for the Debtors to
file the Schedules upon confirmation of the contemporaneously
filed prepackaged Plan of Reorganization within the Extended
Schedules Filing Period.
The Court also waived the requirement under Bankruptcy Rule
1007(a)(3), which required the Debtors to list of all equity
security holders within 15 days after the Petition Date.
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: Gets Interim Nod to Pay Prepetition Sales & Use Taxes
----------------------------------------------------------------
On an interim basis, Bankruptcy Judge Allan Gropper authorizes,
but not directs, CIT Group Inc. and CIT Funding Company of
Delaware LLC, to pay all taxes to the government taxing
authorities in the ordinary course of their businesses up to the
amount of $50,000.
The Debtors have specified that in the aggregate, they expect
approximately $275,000 in prepetition Taxes to become due and
payable following the Petition Date -- of which approximately
$50,000 in Taxes will become due and payable within the first 25-
days of their Chapter 11 cases.
The Debtors' banks are authorized to receive, process, honor, and
pay all Tax Payments drawn or issued on the Debtors' bank accounts
prior to the Petition Date with respect to the Taxes, provided
that sufficient funds are on deposit in the applicable accounts to
cover the payments, the Court ruled.
The Court will consider final approval of the request at a hearing
scheduled for November 23, 2009. Objections to the request, if
any, must be filed by November 19.
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: Gets Interim Nod to Pay Vendors in Ordinary Course
-------------------------------------------------------------
CIT Group Inc. and CIT Funding Company of Delaware LLC, contend
that a fundamental aspect of their efforts to minimize disruption
during their Chapter 11 cases is their ability to maintain the
many relationships with parties who supply them with goods and
services to the Debtors, which are critical to the continued
operation of the Debtors' businesses during and after their
bankruptcy cases.
By this motion, the Debtors have sought the Court's authority, but
not direction, to pay, as they come due in the ordinary course of
business, the unimpaired prepetition ordinary course claims of
providers and vendors of goods and services who agree to continue
to provide their goods and services on the customary credit terms
that existed within 120 days prior to the Petition Date, or on
other terms and conditions as are acceptable to the Debtors.
The Bankruptcy Court has entered an order authorizing but not
directs the Debtors, on an interim basis, to pay, in the ordinary
course of business, their Ordinary Course Claims up to the
aggregate amount of $5.7 million, as they become due and Payable.
Ordinary Course Claims may include, but are not limited to, claims
of the Debtors' (i) providers of supplies, equipment and services
necessary to the Debtors' business operations, (ii) advertisers,
(iii) rent and utility service providers, (iv) external data and
technology support service providers, (v) consultants, legal
advisors, except for those professionals subject to filing fee
applications, and auditors that are not addressed in other first
day motions, and (vi) other general operational expenses.
Unless the Debtors' Prepackaged Plan of Reorganization has been
confirmed on or before 45 days of the Petition Date, the Debtors
will provide a written report listing the total amount of the
payments in the 45 days after the bankruptcy cases to any
statutory committee appointed in these cases and the United States
Trustee.
The Court authorized and directed all banks and other financial
institutions to receive, process, honor, and pay any and all
checks, drafts, wires or automated clearing house transfers,
whether issued or presented prior to or after the Petition Date.
A final hearing to consider the Debtors' request is scheduled for
November 23, 2009. Objections, if any, must be filed by
November 19.
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: Gets Nod for FBG as Voting Agent
-------------------------------------------
CIT Group, Inc., and CIT Group Funding Company of Delaware LLC
obtained the Court's authority to employ Financial Balloting Group
as their voting agent in connection with the solicitation and
tabulation of votes with respect to the Prepackaged Plan of
Reorganization, and special noticing agent for publicly held
securities.
According to Eric Mandelbaum, senior vice president and deputy
general counsel at CIT Group, Inc., the Debtors have numerous
public securities holders to whom certain notices may be sent if
further solicitation of votes for the Plan is required. The
successful dissemination of the solicitation materials requires
close coordination to ensure that they are properly forwarded.
Similarly, the collection of votes from the Holders of Securities
necessitates close cooperation.
Mr. Mandelbaum maintains that FBG is well-qualified to act as the
Voting Agent and Special Noticing Agent, as the firm specializes
in bankruptcy transactions involving public securities, including
notes, particularly in the context of soliciting and tabulating
votes on a plan of reorganization.
As Voting and Special Noticing Agent, FBG will:
(a) provide advice to the Debtors and their counsel regarding
all aspects of the Plan vote, including timing issues,
voting and tabulation procedures and documents needed for
the vote;
(b) prepare a certificate of service for filing with the
Court;
(c) handle requests for documents from parties in interest,
Including brokerage firm and bank back-offices and
institutional holders;
(d) respond to telephone inquiries from nominees regarding the
voting procedures, but restrict its answers to the
information contained in the Plan documents and seek
assistance from the Debtors or their counsel on any
questions that fall outside of the voting documents;
(e) receive and examine all ballots and master ballots cast by
holders of bonds, and date-stamp the originals of all
Ballots upon receipt; and
(f) tabulate all Ballots received prior to the voting
deadlines in accordance with established procedures, and
prepare a vote certification for filing with the Court.
The Debtors will pay FBG's professionals based on these hourly
consulting fee rates:
Professional Hourly Rate
------------ -----------
Executive Director $410
Vice President $360
Senior Case Manager $300
Case Manager $240
Case Analyst $190
Programmer II $195
Programmer I $165
Clerical $65
The Debtors will also reimburse FBG for its necessary out-of-
pocket expenses.
Jane Sullivan, Executive Director of FBG, assures Judge Gropper
that FBG is a "disinterested person" as that term is defined in
Section 101(14) of the Bankruptcy Code, as modified by Section
1107(b).
FBG will conduct an ongoing review of its files to ensure that no
conflict or other disqualifying circumstances exist or arise in
relation to their engagement with the Debtors. If any new facts
are discovered, FBG will supplement its disclosure to the Court,
Ms. Sullivan says.
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 Sell Shares in Primerica Unit in $100MM IPO
-------------------------------------------------------------
Citi's subsidiary, Primerica, Inc., has filed a registration
statement with the U.S. Securities and Exchange Commission for an
initial public offering, which it expects to raise as much as
$100 million.
Primerica, a distributor of financial products to middle income
households in North America, has approximately 100,000 licensed
sales representatives who assist clients in meeting their needs
for term life insurance, which Primerica underwrites, as well as
mutual funds, variable annuities, loans and other financial
products.
Through reinsurance arrangements with Primerica, covering term
life insurance policies in place as of December 31, 2009, Citi
will continue to receive a significant stream of income from the
Primerica business. Primerica will continue to administer the
policies under this arrangement, and the policies will continue to
retain the underlying reserve and capital strength that Primerica
and Citi currently provide.
After completion of this offering, Citi intends to divest its
remaining interest in Primerica as soon as is practicable, subject
to market and other conditions. All of the shares to be sold in
the offering will be sold by Citi, and Citi will receive all of
the proceeds from this initial public offering.
Citigroup Global Markets Inc. will act as sole book-running
manager for the proposed offering.
A copy of the prospectus relating to these securities is available
at http://researcharchives.com/t/s?4903
According to Bloomberg News, Citi Chief Executive Officer Vikram
Pandit said in January he would sell, wind down or restructure at
least eight businesses. Citigroup, 34% owned by the U.S.
government, has been selling units including retail brokerage
Nikko Cordial Securities Inc. as Pandit focuses on retail banking,
corporate lending, trading, merger advice, underwriting and
payment processing.
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 $45 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 selling assets to repay
the bailout funds.
Citigroup is one of the banks that, according to results of the
government's stress test, need more capital.
CLIFFORD ROBINSON: Sec. 341 Meeting Set for December 8
------------------------------------------------------
The U.S. Trustee for Region 18 will convene a meeting of Clifford
Ralph Robinson and Heather Lynn Robinson's creditors on
December 8, 2009, at 10:30 a.m. at UST3, US Trustee's Office,
Portland, Room 213.
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.
Franklin Lakes, New Jersey-based Clifford Ralph Robinson and
Heather Lynn Robinson, fka Lufkins, filed for Chapter 11
bankruptcy protection on November 2, 2009 (Bankr. D. Ore. Case No.
09-39160). William M. Parker, Esq., who has an office in Tigard,
Oregon, 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.
CLOUD PEAK: Moody's Assigns 'B1' Rating on $600 Mil. Senior Notes
-----------------------------------------------------------------
Moody's Investors Service assigned a B1 rating to Cloud Peak
Energy Resources LLC's proposed $600 million senior unsecured
notes and a Baa3 rating to its $400 million senior secured
revolving credit facility. Moody's also assigned a Ba3 Corporate
Family Rating and Ba3 Probability of Default rating to Cloud Peak
Energy LLC, and an SGL-2 Speculative Grade Liquidity rating,
reflecting good liquidity. The rating outlook is stable. This is
the first time that Moody's has rated the debt of Cloud Peak.
Cloud Peak's Ba3 CFR is supported by its significant production
platform in the Powder River basin, efficient surface mining
operations, solid customer base and contract position, consistent
operating history as a subsidiary of Rio Tinto and experienced
management team, and low employee healthcare liabilities and
associated costs. The rating is constrained by the concentration
of all of Cloud Peak's assets in one coal basin and the resultant
subjectivity to price, transportation and weather related risks,
the short reserve life of approximately 11 years, and high capex
driven by the need to acquire new reserves through the lease-by-
application process, which is expected to result in negative free
cash flow over the next 2-3 years.
The rating also considers the company's material weaknesses over
internal controls in financial reporting as a stand-alone company
and the need to significantly staff-up and establish accounting,
financial control, and SOX functions in a short time period, and
transition to operation as a stand-alone company, with the need to
establish collateral requirements for bonding and the requirement
to negotiate direct supply contracts with possibly higher costs.
Cloud Peak's ratings also reflect the geologic, operating,
permitting and regulatory risks inherent to coal mining generally,
although these risks are not as acute for open pit PRB mines as
they are for Eastern underground mines.
The stable outlook reflects Cloud Peak's large production base,
consistent production track record and the company's high
contracted sales positions for 2010 and 2011.
Assignments:
Issuer: Cloud Peak Energy Resources LLC
-- Probability of Default Rating, Assigned Ba3
-- Speculative Grade Liquidity Rating, Assigned SGL-2
-- Corporate Family Rating, Assigned Ba3
-- Senior Secured Bank Credit Facility, Assigned Baa3 (LGD1,
09%)
-- Senior Unsecured Regular Bond/Debenture, Assigned B1 (LGD4,
63%)
Based in Gillette, Wyoming, Cloud Peak Energy LLC is a producer of
low-sulfur steam coal in the Powder River Basin that produced
approximately 97 million tons of coal and generated $1.24 billion
in revenues in 2008.
CNA FINANCIAL: Moody's Assigns Ratings on $350 Mil. Senior Notes
----------------------------------------------------------------
Moody's Investors Service has assigned provisional ratings to the
shelf registration of CNA Financial Corp. (provisional senior
unsecured debt at (P)Baa3), and has assigned a Baa3 rating to
$350 million of senior notes to be issued under the shelf. The
notes mature in 2019, are redeemable at the option of the issuer,
and rank pari passu with other senior unsecured obligations of CNA
Financial Corp. Proceeds from the offering will be used to redeem
$250 million of the company's $1.25 billion of 2008 senior
preferred stock held by Loews Corporation, at par, and for general
corporate purposes. The outlook for CNA Financial's debt ratings
is stable, as is the outlook for the A3 insurance financial
strength ratings on Continental Casualty Company and members of
its property/casualty insurance inter-company pool.
According to Moody's, the ratings on CNA Financial Corp. and its
subsidiaries reflect the group's leadership position in many major
commercial and specialty property/casualty insurance lines in the
U.S., its adequate capitalization, its improved operational
controls and profitable specialty lines segment, and the
historically supportive parentage of Loews. These strengths
remain tempered by earnings and risk-adjusted capitalization
levels that -- albeit improved in recent years -- have generally
remained weaker than those of higher-rated peers, and by general
industry risks arising from the group's exposures to asbestos and
environmental liabilities, natural and manmade catastrophes,
potential claim reserve volatility and reinsurance counterparty
credit risks. Alan Murray, senior credit officer at Moody's
added: "We view management's ongoing efforts to reduce the risk
profile of the group's investment portfolio and to strengthen the
profitability and operational focus of CNA's standard commercial
lines segment positively. However, improvement in that segment's
persistent high underwriting combined ratio will likely remain a
challenge over the intermediate term, given intensely competitive
industry-wide pricing conditions in this relatively commodity-like
business segment."
According to Moody's, factors that could lead to a future rating
upgrade include these: 1) sustained improvement in core operating
earnings, particularly in the standard commercial lines segment;
2) adjusted financial leverage below 25% on a sustained basis;
3) risk-adjusted capitalization on par with more highly-rated
industry peers; and 4) an upgrade of Loews Corporation (senior
debt at A3).
Factors that could lead to a downgrade include these: 1) a decline
in shareholders' equity of 15% or more, absent further capital
support from Loews Corporation or other outside investors; 2)
sustained adjusted financial leverage in excess of 30%; 3) a
downgrade of Loews Corporation or an indication of diminished
support of CNA by Loews; 4) earnings coverage of interest on debt
and preferred dividends below 2x; or 5) annual adverse reserve
development in excess of 5% of total reserves.
Moody's noted that the difference between the A3 insurance
financial strength ratings of Continental Casualty Company and
members of its inter-company pool, and CNA Financial Corporation's
Baa3 senior debt rating is 3 notches, which is standard notching
for US-based insurance groups.
These provisional ratings have been assigned to CNA Financial
Corp.'s multiple issuer/multiple seniority shelf registration,
with a stable outlook:
* CNA Financial Corporation: senior unsecured debt at (P)Baa3;
subordinated debt at (P)Ba1; preferred stock at (P)Ba2;
* CNA Financial Capital I, II and III: trust preferred securities
at (P)Ba1, guaranteed on a subordinated basis by CNA Financial
Corporation.
Additionally, and in connection with the assignment of provisional
ratings to CNA Financial's current shelf registration, Moody's has
withdrawn its provisional ratings on the company's prior expired
shelf registration.
CNA Financial Corporation is engaged through its subsidiaries in
commercial and specialty property and casualty insurance. For the
first nine months of 2009, CNA Financial Corporation reported net
written premiums for property/casualty insurance operations of
$4.7 billion and net income of $173 million. As of September 30,
2009, shareholders' equity was $10.8 billion.
The most recent rating action on CNA Financial Corp. was on
November 3, 2009, when Moody's affirmed its long-term ratings on
CNA Financial Corporation and its subsidiaries and revised the
outlook to stable, from negative, primarily reflecting the
recovery of the group's equity capitalization that has resulted
from tightened credit spreads and repositioning of the company's
investment portfolio, as well as improvement in the holding
company's internal liquidity position.
Moody's insurance financial strength ratings are opinions of the
ability of insurance companies to pay punctually senior
policyholder claims and obligations.
COHARIE HOG FARM: To Sell Animals Under Chapter 11
--------------------------------------------------
Coharie Hog Farm Inc. is in Chapter 11, intending to sell its
30,000 sows and 280,000 weaned pigs during the next six months.
The sale of the animals is expected to generate $24 million.
According to Bloomberg's Bill Rochelle, Coharie said in a court
filing that the loss of $20 on every hog sent to market in 2008
rose to $29 a hog this year. Last year, losses were attributable
to the high cost of feed. This year, consumers' fear of
contracting swine flu led to decreased consumption of pork.
Bloomberg relates that Cape Fear Farm Credit ACA, the primary
secured lender owed more than $36 million, won't provide financing
to continue operations. The lender is offering a new $1.5 million
credit to support selling the animals during the next 26 weeks.
Branch Banking & Trust Co. is owed another $6.6 million on another
secured claim.
Clinton, North Carolina based Coharie Hog Farm, Inc., says it has
been one of the largest swine producers in the U.S., supplying
more than 500,000 hogs a year to a plant operated by Smithfield
Foods Inc. It produced more than 140 million pounds of pork
annually. The closely held operation has six storage facilities
with 3.9 million bushels of capacity. The business used more than
100 contract farmers to raise hogs for market.
Coharie Hog Farm filed for Chapter 11 on Nov. 6, 2009 (Bankr. E.D.
N.C. Case No. 09-09737). Terri L. Gardner, Esq., at Nelson Mullins
Riley & Scarborough, LLP, represents the Debtor in its Chapter 11
effort. The petition says assets and debts range from $10,000,001
to $50,000,000.
COLONIAL BANCGROUP: Wants to Sell Vehicles to Cancel Insurance
--------------------------------------------------------------
The Colonial BancGroup, Inc., asks the U.S. Bankruptcy Court for
the Middle District of Alabama for permission to sell certain
motor vehicles free and clear of all liens, claims and
encumbrances.
The Debtor proposes to sell these vehicles pursuant to Section 363
of the Bankruptcy Code.
Vehicle Type Serial Number
2004 Chevrolet TrailBlazer 1GNDS13S142179696
2005 Chevrolet Astro (van) 1GCDM19X05B100218
2004 Chevrolet Astro (van) 1GCDM19XX4B10784
2000 GMC Safari (van) 1GTDM19WXYB518698
2001 Ford Econoline (van) 1FTRE14241HB73078
2006 Toyota Corolla (sedan) 1NXBR32EX6Z602233
The Debtor relates that it does not need any of the vehicles in
the winding up of its affairs in this Chapter 11 case. Selling
the vehicles will also allow the Debtor to cancel insurance
coverage with respect to them.
Headquartered in Montgomery, Alabama, The Colonial BancGroup, Inc.
(NYSE: CNB) provides diversified financial services, including
retail and commercial banking, wealth management services,
mortgage banking and insurance products. The BancGroup derives
substantially all of its income from Colonial Bank, N.A, its
banking subsidiary. Colonial bank -- http://www.colonialbank.com/
-- operates 354 branches in Florida, Alabama, Georgia, Nevada and
Texas with over $26 billion in assets.
On August 14, 2009, Colonial BancGroup's banking unit Colonial
Bank, Montgomery, AL, was closed by the Alabama State Banking
Department and the Federal Deposit Insurance Corporation was named
receiver. The FDIC sold most of the assets to Branch Banking and
Trust, Winston-Salem, North Carolina. BB&T acquired $22 billion
in assets and assumed $20 billion in deposits of the Bank.
Colonial BancGroup filed for Chapter 11 bankruptcy protection on
August 25, 2009 (Bankr. M.D. Ala. Case No. 09-32303). W. Clark
Watson, Esq., at Balch & Bingham LLP and Rufus T. Dorsey IV,
Esq., at Parker Hudson Rainer & Dobbs LLP assist the Company in
its restructuring efforts. The Company listed $45,000,000 in
assets and $380,000,000 in debts in its bankruptcy filing.
COMMERCIAL CAPITAL: CCI Funding Can Use WestLB AG Cash Collateral
-----------------------------------------------------------------
The Hon. Michael E. Romero of the U.S. Bankruptcy Court for the
District of Colorado authorized CCI Funding I, LLC, a debtor-
affiliate of Commercial Capital, Inc., to use cash collateral of
WestLB AG, New York Branch and grant adequate protection to
WestLB.
As reported in the Troubled Company Reporter on July 29, 2009, the
mortgage loans held by CCIF are collateral for CCIF's obligations
to WestLB under a Credit and Security Agreement dated as of
January 5, 2007.
The TCR reported that the cash collateral amounting to $1,463,352
are held in the Reserve Account and Collection Account maintained
at Wells Fargo Bank, National Association, as custodian on behalf
of WestLB.
As adequate protection, CCIF will grant WestLB a replacement lien
on CCIF's assets. CCIF and WestLB have also agreed that if they
entor into a debtor-in-possession financing facility with WestLB
as DIP lender, then the amounts of cash collateral advanced
hereunder will be treated as postpetition loans under the DIP loan
facility.
CCIF will use the cash to pay (a) servicing fees and expenses, (b)
legal fees and expenses in connection with foreclosures and other
remedial actions, and (c) certain other expenses related to
preserving the value of the mortgage loans.
About Commercial Capital, Inc.
Greenwood Village, Colorado-based Commercial Capital, Inc. --
http://www.commercialcapitalinc.com/-- and its affiliate, CCI
Funding I, LLC, are commercial real estate lenders and investment
partners engaging in short-term commercial mortgage. Commercial
Capital and CCI Funding filed separate petitions for Chapter 11 on
April 22, 2009, and April 24, 2009, respectively (Bankr. D. Colo.
Lead Case No. 09-17238). Robert Padjen, Esq., at Laufer and
Padjen LLC, assists Commercial Capital in its restructuring
efforts. In its bankruptcy petition, Commercial Capital listed
between $100 million and $500 million in assets, and between
$50 million and $100 million in debts. CCI Funding listed between
$100 million and $500 million each in assets and debts.
COMMERCIAL CAPITAL: Court OKs Ch. 11 Trustee in CCI Funding's Case
------------------------------------------------------------------
The Hon. Michael E. Romero of the U.S. Bankruptcy Court for the
District of Colorado directed the U.S. Trustee for Region 19 to
appoint a Chapter 11 trustee in the Chapter 11 case of CCI Funding
I, LLC, a debtor-affiliate of Commercial Capital, Inc.,
On Oct. 23, 2009, the U.S. Trustee filed an application with the
Court to appoint Simon Rodriguez as Chapter 11 trustee for CCI.
WestLB AG, New York Branch, asked the Court for an appointment of
a Chapter 11 trustee for CCI Funding I, LLC relating that a
separate and independent trustee must be appointed to manage the
affairs and business of CCIF because CCIF has separate creditors
and separate potential assets and liabilities.
Greenwood Village, Colorado-based Commercial Capital, Inc. --
http://www.commercialcapitalinc.com/-- and its affiliate, CCI
Funding I, LLC, are commercial real estate lenders and investment
partners engaging in short-term commercial mortgage. Commercial
Capital and CCI Funding filed separate petitions for Chapter 11 on
April 22, 2009, and April 24, 2009, respectively (Bankr. D. Colo.
Lead Case No. 09-17238). Robert Padjen, Esq., at Laufer and
Padjen LLC, assists Commercial Capital in its restructuring
efforts. In its bankruptcy petition, Commercial Capital listed
between $100 million and $500 million in assets, and between
$50 million and $100 million in debts. CCI Funding listed between
$100 million and $500 million each in assets and debts.
COPIA: Wins Confirmation of Liquidating Chapter 11 Plan
-------------------------------------------------------
Bloomberg's Bill Rochelle reported that Copia won confirmation of
a liquidating Chapter 11 plan that was jointly sponsored by ACA
Financial Guaranty Corp., the guarantor of $78 million in secured
bonds. The plan is projected to pay a 13.4 percent dividend to
general unsecured creditors, including $1.4 million in claims of
trade suppliers. General unsecured creditors would receive
nothing were it not for concessions made by ACA, the disclosure
statement said.
According to the report, ACA is making a $622,000 cash
contribution and waiving administrative claims that otherwise
would preclude any recovery by unsecured creditors. ACA is also
waiving a deficiency claim. The plan gives ACA the ability to
sell the facility for the benefit of itself and bondholders. The
papers don't say how much the ACA and the bondholders would
recover since the facility is yet to be sold.
About Copia
Copia is a culinary museum and cultural center in Napa,
California. It includes a grand building on the Napa River,
organic gardens, outdoor kitchens, wine tasting rooms, exhibition
galleries and a restaurant called Julia's Kitchen.
Copia filed for Chapter 11 bankruptcy protection in the U.S.
Bankruptcy Court for the Northern District of California on
December 1, 2008 (Bankr. N.D. Calif. Case No. 08-12576).
CRUSADER ENERGY: Gunn Oil to Buy Back Acreage
---------------------------------------------
Crusader Energy Group Inc. is expected to sell 75% working
interest in leases for almost 131,000 net acres of properties to a
group that includes Gunn Oil Co. The Company did not receive
competing bids for the assets. The buyers are re-acquiring
properties they sold to Crusader in July 2008. The Gunn group is
paying $400,000 cash while forgiving a $9.7 million obligation.
SandRidge Sale and Chapter 11 Plan
The Bankruptcy Court has authorized Crusader Energy Group to sell
substantially all assets at an auction where SandRidge Energy,
Inc., would be the lead bidder. All bids for the Debtors' assets
were due Nov. 6, 2009. In addition, bid must provide for an
aggregate consideration valued as determined in the sole and
absolute discretion of the Debtors, of at least $500,000 greater
than the sum of (i) $7 million; (ii) the cash consideration under
the stock purchase agreement; and (iii) $186 million. The Debtors
will conduct an auction on Nov. 13, 2009, at 9:30 a.m.
Under a proposed plan of reorganization filed with the Bankruptcy
Court, all of the currently outstanding equity interests in
Crusader would be cancelled upon consummation of the SandRidge
transaction and Crusader and its wholly-owned subsidiaries would
become indirect, wholly-owned subsidiaries of SandRidge.
According to the Troubled Company Reporter on Sept. 30, 2009,
SandRidge Energy has agreed purchase all of the shares of common
stock of reorganized Debtors, pursuant to the stock purchase
agreement, for:
-- $55 million in cash, subject to certain adjustments,
including reduction by approximately $90,000 per day from
and after Sept. 1, 2009, up to but excluding the Closing
Date;
-- 13,015,797 shares of SandRidge common stock, par value
$0.001 per share, subject to certain adjustments; and
-- warrants to purchase an aggregate of 2.0 million shares of
SandRidge Common Stock at an exercise price of $15.00 per
share during an exercise period ending five years after the
closing date of the transactions contemplated under the
Purchase Agreement.
The Cash Consideration will be paid to the liquidating trust
created under the plan of reorganization filed by the Crusader
Entities in the Bankruptcy Court on Sept. 22, 2009. Recipients of
the Stock Consideration and warrants will not be permitted to
dispose of such Stock Consideration or warrants for 180 days after
the Closing Date.
Deutsche Bank Securities advised SandRidge on the transaction.
Jefferies & Company, Inc., advised Crusader.
About Crusader Energy
Based in Oklahoma City, Oklahoma, Crusader Energy Group Inc. (Pink
Sheets: CKGRQ) -- http://www.ir.crusaderenergy.com/-- explores,
develops and acquires oil and gas properties, primarily in the
Anadarko Basin, Williston Basin, Permian Basin, and Fort Worth
Basin in the United States. It has working interests in more than
1,000 wells.
Crusader Energy and its affiliates filed for Chapter 11
protection on March 30, 2009 (Bankr. N.D. Tex. Lead Case No.
09-31797). The Debtors' financial condition as of
September 30, 2008, showed total assets of $749,978,331 and
total debts of $325,839,980.
Beth Lloyd, Esq., Richard H. London, Esq., and William Louis
Wallander, Esq., at Vinson & Elkins, L.L.P., represent the
Debtors as counsel. Jefferies & Company, Inc. acts as financial
adviser to Crusader in its Chapter 11 reorganization. BMC Group
Inc. is claims and notice agent. Holland N. Oneil, Esq., Michael
S. Haynes, Esq., and Richard McCoy Roberson, Esq., at Gardere,
Wynne & Sewell, represent the official committee of unsecured
creditors as counsel.
DIP LLC: Case Summary & 3 Largest Unsecured Creditors
-----------------------------------------------------
Debtor: DIP, LLC
645 Sierra Rose Drive
Suite 101
Reno, NV 89511
Bankruptcy Case No.: 09-53995
Chapter 11 Petition Date: November 9, 2009
Court: United States Bankruptcy Court
District of Nevada (Reno)
Debtor's Counsel: Jeffrey L. Hartman, Esq.
Hartman & Hartman
510 West Plumb Lane, Ste B
Reno, NV 89509
Tel: (775) 324-2800
Fax: (775) 324-1818
Email: notices@bankruptcyreno.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 $3,420,001,
and total debts of $1,592,113.
A full-text copy of the Debtor's petition, including a list of its
3 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/nvb09-53995.pdf
The petition was signed by James PFrommer, manager of the Company.
DONALD LANCE KUHNS: Case Summary & 17 Largest Unsecured Creditors
-----------------------------------------------------------------
Joint Debtors: Donald Lance Kuhns
Laura Kurtz Kuhns
14 Briarwood Terrace
Fairmont, WV 26554
Bankruptcy Case No.: 09-09802
Chapter 11 Petition Date: November 9, 2009
Court: United States Bankruptcy Court
Eastern District of North Carolina (Wilson)
Debtor's Counsel: George M. Oliver, Esq.
Oliver & Friesen, PLLC
PO Box 1548
New Bern, NC 28563
Tel: (252) 633-1930
Fax: (252) 633-1950
Email: efile@oliverandfriesen.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
A full-text copy of the Debtors' petition, including a list of
their 17 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/nceb09-09802.pdf
The petition was signed by the Joint Debtors.
DREIER LLP: Lawyer Accomplice Pleads Guilty to Conspiracy
---------------------------------------------------------
Dow Jones Newswires' Chad Bray reports that Robert L. Miller, 52,
pleaded guilty Monday to conspiracy with Marc Dreier to commit
securities fraud and wire fraud, as well as securities fraud. Mr.
Miller is a New Jersey money manager who worked as a lawyer at the
Securities and Exchange Commission in the 1980s. The report says
he admitted at a hearing before U.S. Magistrate Judge Ronald L.
Ellis in Manhattan to helping Mr. Dreier carry out a scheme to
attempt to sell $44.7 million in fake promissory notes.
While Mr. Dreier and another accomplice, Kosta Kovachev, have
pleaded guilty to charges related to conspiracy to defraud
investors, Mr. Miller's role wasn't made public until Monday,
according to the report.
The report says Mr. Miller admitted that he was paid $100,000 by
Mr. Dreier, the onetime managing partner of Dreier LLP, in
November 2008 to impersonate a representative at a Canadian
pension plan, according to court documents submitted as part of
his guilty plea. Mr. Dreier coached him the day before the call
and supplied Mr. Miller with a cellphone with a Canadian area code
and phone number, prosecutors said, according to the report.
A few days after he pretended to work for the Canadian pension
plan, Mr. Miller also falsely represented himself to work for an
Icelandic hedge fund, the report adds.
According to the report, Mr. Miller, who is cooperating with
prosecutors, faces as much as 20 years in prison on the fraud.
Sentencing is set for Feb. 5.
Marc Dreier founded New York-based law firm Dreier LLP --
http://www.dreierllp.com/-- in 1996.
On December 8, 2008, the U.S. Securities and Exchange Commission
filed a suit, alleging that Mr. Dreier made fraudulent offers and
sales of securities in several cities, selling fake promissory
notes to hedge and other private investment funds. The SEC
asserted that Mr. Dreier also distributed phony financial
statements and audit opinions, and recruited accomplices in
connection with that scheme. Mr. Dreier has been charged by the
U.S. government for conspiracy, securities fraud and wire fraud
before the U.S. District Court for the Southern District of New
York (Manhattan) (Case No. 09-cr-00085-JSR).
Dreier LLP filed for Chapter 11 on December 16, 2008 (Bankr. S.D.
N.Y., Case No. 08-15051). Judge Robert E. Gerber handles the
case. Stephen J. Shimshak, Esq., at Paul, Weiss, Rifkind, Wharton
& Garrison LLP, has been retained as counsel. The Debtor listed
assets between $100 million and $500 million, and debts between
$10 million and $50 million in its filing.
Wachovia Bank National Association, Sheila M. Gowan as trustee for
Chapter 11 estate of Dreier LLP, and Steven J. Reisman as post-
confirmation representative of the bankruptcy estate of
360networks (USA) Inc. signed a petition that sent Mr. Dreier to
bankruptcy under Chapter 7 on January 26, 2009 (Bankr. S.D. N.Y.,
Case No. 09-10371).
EDGE PETROLEUM: Has $8.4 Mil. Net Loss for September Quarter
------------------------------------------------------------
Edge Petroleum Inc. reports a $8,406,000 net loss on $11,136,000
of revenue for the three months ended Sept. 30, 2009, compared
with a $40,010,000 net loss on $106,541 of revenue during the same
period a year ago.
The Company listed $247,569,000 in total assets and $244,238,000
in total liabilities, resulting to a stockholders' equity of
$3,331,000.
The Company said it had cash and cash equivalents at Sept. 30,
2009, of $13.4 million consisting primarily of short-term money
market investments, as compared to $8.5 million at December 31,
2008. Its working capital deficit was $206.4 million at Sept. 30,
2009, as compared to a working capital deficit of $203.3 million
at Dec. 31, 2008.
A full-text copy of the company's quarterly results is available
for free at http://researcharchives.com/t/s?4908
Edge Petroleum Corporation (Nasdaq:EPEX) (Nasdaq:EPEXP) is a
Houston-based independent energy company that focuses its
exploration, production and marketing activities in selected
onshore basins of the United States.
At June 30, 2009, the Company's balance sheet showed total assets
of $264,030,000, total liabilities of $252,492,000 and
stockholders' equity of $11,538,000.
The Company has retained Akin Gump Strauss Hauer and Feld as legal
counsel, and Parkman Whaling LLC as financial advisor. Kurtzman
Carson Consultants LLC serves as claims and notice agent.
EQUAN REALTY: Chapter 11 Trustee Auctioning 2207 Seventh Ave.
-------------------------------------------------------------
The Chapter 11 Trustee will conduct a public auction of the real
property located at 2207 Seventh Avenue in Manhattan at 10:00 a.m.
on Nov. 20, 2009. To participate in the auction, bidders must
present all cash offers of no less than $4,234,720.52 plus enough
additional cash to pay allowed administrative expenses and
priority claims. THe Trustee will ask the Honorable Robert D.
Drain to approve the sale to the highest and best bidder at a Sale
Hearing at 10:00 a.m. on Nov. 23, 2009.
Based in New York City, Equan Realty Corp. filed for Chapter 11
relief on Oct. 14, 2008 (Bankr. S.D.N.Y. Case No. 08-14017). When
the Debtor filed for protection from its creditors, it listed
total assets of $10,755,997, and total debts of $5,884,523. Fred
Stevens, Esq., at Fox Rothschild LLP, represents the Debtor as
counsel. Gregory Messer serves as the Chapter 11 trustee, and Mr.
Messer has selected Gary F. Herbst, Esq., at LaMonica Herbst &
Maniscalco as his counsel.
ERICKSON RETIREMENT: Gets Nod to Hire BMC Group as Claims Agent
---------------------------------------------------------------
Erickson Retirement Communities LLC and its debtor-affiliates
obtained the U.S. Bankruptcy Court for the Northern District of
Texas' permission to employ BMC Group Inc. as their noticing,
claims and balloting agent.
The firm has agreed to, among other things, assist the Debtors
with the compilation, administration, evaluation and production of
documents and information necessary to support a restructuring
effort.
Papers filed with the Court did not disclose the firm's standard
hourly rates.
The Debtors assure the Court that the firm is a "disinterested
person" as defined in Section 101(14) of the Bankruptcy Code.
About Erickson Retirement
The Baltimore, Maryland-based Erickson Retirement Communities LLC
owns 20 continuing care retirement communities in 11 states.
Among Erickson's 20 communities, eight are completed, 11 are open
although in construction, and one is in development. They have
23,000 residents in total.
Erickson, along with affiliates, filed for Chapter 11 on Oct. 19,
2009 (Bankr. N.D. Tex. Case No. 09-37010). DLA Piper LLP (US)
serves as counsel to the Debtors. BMC Group Inc. serves as claims
and notice agent. Houlihan, Lokey, Howard & Zoukin, Inc., is also
serving as investment and financial consultant. Alvarez & Marsal
is serving as restructuring adviser.
As of September 30, 2009, on a book value basis, ERC had
approximately $2.7 billion in assets, including $2.2 billion of
property and equipment, and $3.0 billion in liabilities.
Liabilities include $195.8 million on the revolving credit,
$347.5 million on construction credit, $64 million in accounts
payable, $47.8 million in subordinate debt, and $475 million in
purchase option deposits.
Bankruptcy Creditors' Service, Inc., publishes Erickson Retirement
Bankruptcy News. The newsletter tracks the Chapter 11 proceedings
of Erickson Retirement Communities LLC and its debtor-affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
ERICKSON RETIREMENT: Wants to Amend Charleston Subordination Pact
-----------------------------------------------------------------
In May 2003, Debtor Erickson Retirement Communities, LLC, entered
into a Second Amended and Restated Management and Marketing
Agreement with Charlestown Community, Inc., a non-debtor and not-
for-profit entity. Under the Management Agreement, ERC agreed to
provide management and operating services for a senior living
center in Baltimore, Maryland. As a precondition for modifying
its credit agreement with Charlestown, Bank of America, N.A., one
of Charlestown's lenders, required collateral assignment of the
Management Agreement by Charlestown to BofA.
Subsequently, ERC, Charlestown and BofA entered into a
Subordination Agreement on March 1, 2006. As a precondition for
modifying its credit agreement with Charlestown, BofA also
required an amendment to the Subordination Agreement.
By this motion, the Debtors seek the Court's authority to execute
the Collateral Assignment of Management Documents and the First
Amendment to Subordination Agreement.
Charlestown notes that it is seeking refinancing of its debt to
BofA, but BofA requires it and ERC to execute the Agreements as a
precondition to that refinancing. Vincent P. Slusher, Esq., at
DLA Piper LLP, in Dallas, Texas, notes that if Charlestown is not
able to refinance, the continued ability of its retirement
community and its ability to continue paying fees to ERC under
the Management Agreement may be put at risk. Charlestown's
continued payments to ERC under the Management Agreement are a
steady source of income, he points out. Thus, the continuation
of this income stream and the continued ability of Charlestown's
retirement community will be necessary for the Debtors'
successful reorganization, he maintains.
About Erickson Retirement
The Baltimore, Maryland-based Erickson Retirement Communities LLC
owns 20 continuing care retirement communities in 11 states.
Among Erickson's 20 communities, eight are completed, 11 are open
although in construction, and one is in development. They have
23,000 residents in total.
Erickson, along with affiliates, filed for Chapter 11 on Oct. 19,
2009 (Bankr. N.D. Tex. Case No. 09-37010). DLA Piper LLP (US)
serves as counsel to the Debtors. BMC Group Inc. serves as claims
and notice agent. Houlihan, Lokey, Howard & Zoukin, Inc., is also
serving as investment and financial consultant. Alvarez & Marsal
is serving as restructuring adviser.
As of September 30, 2009, on a book value basis, ERC had
approximately $2.7 billion in assets, including $2.2 billion of
property and equipment, and $3.0 billion in liabilities.
Liabilities include $195.8 million on the revolving credit,
$347.5 million on construction credit, $64 million in accounts
payable, $47.8 million in subordinate debt, and $475 million in
purchase option deposits.
Bankruptcy Creditors' Service, Inc., publishes Erickson Retirement
Bankruptcy News. The newsletter tracks the Chapter 11 proceedings
of Erickson Retirement Communities LLC and its debtor-affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
ERICKSON RETIREMENT: Court Sets Feb. 28 as Claims Bar Date
----------------------------------------------------------
All creditors, except governmental units, of Erickson Retirement
Communities, LLC, and its debtor-affiliates have until Feb. 28,
2010, to file a proof of claim in the Debtors' Chapter 11 cases.
Deadline for filing proofs of claim by governmental entities has
yet to be set.
About Erickson Retirement
The Baltimore, Maryland-based Erickson Retirement Communities LLC
owns 20 continuing care retirement communities in 11 states.
Among Erickson's 20 communities, eight are completed, 11 are open
although in construction, and one is in development. They have
23,000 residents in total.
Erickson, along with affiliates, filed for Chapter 11 on Oct. 19,
2009 (Bankr. N.D. Tex. Case No. 09-37010). DLA Piper LLP (US)
serves as counsel to the Debtors. BMC Group Inc. serves as claims
and notice agent. Houlihan, Lokey, Howard & Zoukin, Inc., is also
serving as investment and financial consultant. Alvarez & Marsal
is serving as restructuring adviser.
As of September 30, 2009, on a book value basis, ERC had
approximately $2.7 billion in assets, including $2.2 billion of
property and equipment, and $3.0 billion in liabilities.
Liabilities include $195.8 million on the revolving credit,
$347.5 million on construction credit, $64 million in accounts
payable, $47.8 million in subordinate debt, and $475 million in
purchase option deposits.
Bankruptcy Creditors' Service, Inc., publishes Erickson Retirement
Bankruptcy News. The newsletter tracks the Chapter 11 proceedings
of Erickson Retirement Communities LLC and its debtor-affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
FAIRCHILD CORP: Gains Approval of Plan Disclosure Statement
-----------------------------------------------------------
Fairchild Corp. has received approval of a disclosure statement
explaining its liquidating Chapter 11 plan, Bloomberg News
reported.
The disclosure statement says unsecured creditors stand to recover
from 2% to 25.2% on their claims that should end up between
$241 million and $665 million. Cash eventually available for
distribution to unsecured creditors is expected to range between
$13 million and $60 million.
Following the Plan's Effective Date, a Liquidating Trust will
manage the affairs of the Debtors and will focus its attention on
the orderly liquidation of the Estates' remaining assets and the
wind-down of the Debtors' businesses.
The hearing to consider confirmation of the plan is scheduled for
Dec. 17.
About Fairchild Corporation
Based in McLean, Virginia, The Fairchild Corporation
(OTC: FCHD.PK) -- http://www.fairchild.com/-- operated in two
distinct divisions, Fairchild Sports and Banner Aerospace Holding
Company I, Inc. In addition to these two operating divisions,
Fairchild owned several parcels of real estate in Farmingdale, New
York, which it had been in the process of selling or developing.
Currently, the Debtors' operations are mainly centered on
Fairchild Sports, which is a division of the Debtors that
concentrate primarily on protective apparel, helmets and technical
accessories for motorcyclists. Additionally, Fairchild continues
to own several substantial parcels of real estate in Farmingdale,
New York, and a number of unrelated investments.
Fairchild and 60 of its affiliates filed for Chapter 11 protection
on March 18, 2009 (Bankr. D. Del Lead Case No. 09-10899). Steven
J. Reisman, Esq., Timothy A. Barnes, Esq., and Veronique A.
Hodeau, Esq., at Curtis, Mallet-Prevost, Cold & Mosle LLP, are
bankruptcy counsel to the Debtors. Jason M. Madron, Esq., Michael
J. Merchant, Esq., and Mark D. Collins, Esq., at Richards, Layton
& Finger, P.A., serve as the Debtors' co-counsel. On April 6,
2009, Roberta A. DeAngelis, the Acting U.S. Trustee for Region 3,
appointed three creditors to serve on the official committee of
unsecured creditors of the Debtors.
FAIRPOINT COMMS: Proposes Admin/Reclamation Claims Protocol
-----------------------------------------------------------
In the ordinary course of business, Fairpoint Communications Inc.
and its units purchase on credit a variety of cables, wires,
components, materials, parts, machinery, equipment and other
property for use in their operations. As of the Petition Date,
the Debtors are in possession of certain Goods that had been
delivered to them by various vendors or other parties, but for
which they have not been invoiced or made payment to the Vendors.
As a result of the commencement of their Chapter 11 cases, the
Debtors will likely receive claims arising under Sections
503(b)(9) and 546(c) of the Bankruptcy Code from Vendors with
respect to those Goods.
Section 503(b)(9) provides for the allowance, as an
administrative expense, of the value of any goods sold to the
Debtors in the ordinary course of business and received by the
Debtors within 20 days before the Petition Date.
Section 546(c) governs reclamation rights under the commencement
of a bankruptcy case. It provides that the rights and powers of
a trustee are subject to the right of a Vendor of goods that sold
goods to the debtor, in the ordinary course of the Vendor's
business, to reclaim those goods if the debtor received those
goods while insolvent, within 45 days before the date of the
commencement of a bankruptcy case.
Accordingly, at the Debtors' behest, the Court approved uniform
procedures for the resolution and satisfaction of Section
503(b)(9) Claims and Section 546(c) Claims.
In order to avoid the distraction, delay, and expense that may
ensue in the Vendors' assertion of Section 503(b)(9) claims, the
Vendors must undertake these procedures to properly assert
administrative expense claims:
(a) Any Vendor asserting a 503(b)(9) Claim must prepare a
proof of claim that sets forth (i) the value of the goods
the claimant contends the Debtors received within 20 days
before the Petition Date; (ii) documentation, including
invoices, receipts, bills of lading and the like,
identifying the particular goods for which the claim is
being asserted; and (iii) documentation regarding which
the debtor entity the goods were shipped to, including the
address of delivery, the date the goods were received by
that debtor-entity, and the alleged value of those goods.
(b) All Section 503(b)(9) Claims must be filed with the
Debtors' claims agent, BMC Group Inc.:
-- by U.S. Mail to:
BMC Group Inc.
Chanhassen, MN 55317-3020
Attn: FairPoint Claims Processing, PO Box 3020
-- or by messenger or overnight delivery to:
BMC Group Inc.
18750 Lake Drive East, Chanhassen, MN 55317
The proofs of claim must also be served on the Debtors and
the Debtors' counsel:
FairPoint Communications,
521 East Morehead Street, Suite 500, Charlotte, NC, 28202
Attn: Susan Sowell, Esq.; and
Paul, Hastings Janofsky & Walker LLP
Attorneys for the Debtors
75 E 55th Street, New York
Attn: James T. Grogan III, Esq., and
Sung Ho (Danny) Choi, Esq.
The proofs of Claim must be received, in each case, no
later than January 24, 2010.
(c) The Debtors will have until March 25, 2010, to file with
the Court and serve any objections to timely filed
503(b)(9) Claims.
(d) Vendors will have until April 14, 2010, to file with the
Court and serve any replies to objections.
(e) All timely filed 503(b)(9) Claims will be deemed allowed
unless objected to by the Debtors on or before the
503(b)(9) Objection Deadline.
(f) The Debtors are authorized, but not required, to
negotiate, in their sole discretion, with any Vendor and
to seek an agreement resolving any objection to the
Vendor's 503(b)(9) Claim. The approval of that agreement
will be subject to notice and a hearing.
(g) To the extent a 503(b)(9) Claim is allowed, that 503(b)(9)
Claim will be satisfied pursuant to the plan of
reorganization as will be confirmed by the Court, or as
otherwise ordered by the Court after notice and an
opportunity for a hearing.
For processing and reconciling Reclamation Claims, creditors are
also required to comply with these procedures:
(a) Any Vendor asserting a Reclamation Claim must satisfy all
procedural and timing requirements entitling it to have a
right to reclamation under Section 546(c).
(b) Any Vendor asserting a Reclamation Claim must submit a
written demand asserting that Reclamation Claim, which
must include (i) a description of the Goods subject to the
Reclamation Demand; (ii) the name of the debtor-entity to
whom the Goods were delivered and the address of delivery;
(iii) copies of any purchase orders and invoices relating
to the Goods; and (iv) any evidence regarding the date(s)
the Goods were shipped to and received by the Debtors.
The Reclamation claims must be delivered to these parties
so as to be received, in each case, in accordance with the
deadlines set forth in the Bankruptcy Code:
* FairPoint Communications, Inc.,
521 East Morehead Street, Suite 500
Charlotte, NC, 28202, Attn: Susan Sowell, Esq.
* Paul, Hastings, Janofsky & Walker LLP
Attorneys for the Debtors
75 E. 55th Street, New York, NY 10022
Attn: James T. Grogan III, Esq. and
Sung Ho (Danny) Choi, Esq.
(c) Upon receipt of a Reclamation Demand, the Debtors will
serve on the Vendor, at the address indicated in the
Reclamation Demand, a copy of the order granting the
Reclamation Claim Procedures Motion.
(d) No later than February 22, 2010, the Debtors will file
with the Court a notice listing the Reclamation Claims
and the amount, if any, of each Reclamation Claim that
they determine to be valid. The Debtors will serve
the Reclamation Notice on (i) the Office of the U.S.
Trustee for the Southern District of New York; (ii) the
attorneys for any statutory committee of unsecured
creditors appointed in these Chapter 11 cases; and (iii)
each Vendor listed in the Reclamation Notice, at the
address indicated in the respective Vendor's Reclamation
Demand.
(e) If the Debtors fail to file the Reclamation Notice by the
Reclamation Notice Deadline, any holder of a Reclamation
Claim that submitted a Reclamation Demand may bring a
motion on its own behalf to seek relief with respect to
its Reclamation Claim.
(f) Any party that wishes to object to the Reclamation Notice
must file and serve an objection on the Reclamation
Notice Parties and attorneys for the Debtors, Paul,
Hastings, Janofsky & Walker LLP, at 75 E. 55th Street, in
New York, NY 10022, Attn: James T. Grogan III, Esq., and
Sung Ho (Danny) Choi, Esq., so as to be received in each
case no later than the 20th day after the date on which
the Reclamation Notice is filed.
Any Reclamation Notice Objection must include (i) a copy
of the Reclamation Demand, with evidence of the date
mailed to the Debtors, and (ii) a statement describing
with specificity the objections to the Reclamation Notice
and any legal basis for those objections.
(g) Any Reclamation Claim listed in the Reclamation Notice for
which no Reclamation Notice Objection was filed and served
by the Reclamation Objection Deadline will be deemed
allowed by the Court in the amount identified by the
Debtors in the Reclamation Notice, provided that all
issues relating to the treatment of any allowed
Reclamation Claim will be preserved.
(h) The Debtors are authorized, but not required, to
negotiate, in their sole discretion, with any Vendor and
to seek an agreement resolving the Vendor's Reclamation
Claim or Reclamation Notice Objection. If the Debtors and
a Vendor agree on the validity, amount, or treatment of
the Vendor's Reclamation Claim, the Debtors will prepare
and file with the Court a notice of settlement and serve
the Reclamation Settlement Notice on the Reclamation
Notice Parties. Each Notice Party will have 10 days from
the date of service of a Reclamation Settlement Notice to
file with the Court and serve on the other Reclamation
Notice Parties and attorneys for the Debtors an objection.
(i) If no Reclamation Settlement Objection with respect to a
Reclamation Claim that is the subject of a Reclamation
Settlement Notice is timely filed and served, that
Reclamation Claim will be treated in accordance with the
Reclamation Settlement Notice without further Court order.
(j) If a Reclamation Settlement Objection with respect to a
Reclamation Claim that is the subject of a Reclamation
Settlement Notice is timely filed and served, the parties
may negotiate a consensual resolution of that objection to
be incorporated in a stipulation filed with the Court.
Upon filing of a Reclamation Settlement Stipulation, the
applicable Reclamation Claim will be allowed and treated
in accordance with the terms of the Reclamation Settlement
Stipulation without further Court order.
(k) If no consensual resolution of a Reclamation Settlement
Objection with respect to a Reclamation Claim that is the
subject of a Reclamation Settlement Notice is reached
within 30 days after the date the Reclamation Settlement
Objection was filed and served, the Debtors may file a
motion with the Court requesting a hearing to fix the
allowed amount of the Reclamation Claim, unless the
Debtors and the party filing the Reclamation Settlement
Objection agree in writing to extend that 30 day period;
and
(l) If any Reclamation Claim is still subject to a pending
Reclamation Notice Objection 90 days after the Reclamation
Objection Deadline and no Reclamation Settlement Notice
has been filed, the Debtors may file a motion with the
Court to fix the allowed amounts of those Reclamation
Claims and schedule a hearing to consider the motion.
The Debtors believe that their ability to resolve Reclamation
Claims in accordance with the Reclamation Procedures will assist
in the consensual resolution of claims and ultimately, the
maximization of value for their estates, their creditors and all
parties-in-interest.
Judge Lifland acknowledged that the Reclamation Procedures are
the sole and exclusive method for resolving unpaid Reclamation
Claims asserted against the Debtors.
All Vendors are prohibited, the Court clarified, from seeking any
other means for the resolution or treatment of their Reclamation
Claims, including (i) commencing adversary proceedings and
contested matters in connection with any Reclamation Claims, (ii)
seeking to obtain possession of any Goods, and (iii) interfering
with the delivery of any Goods to the Debtors.
The Court further ruled that any adversary proceeding or
contested matter related to Reclamation Claims, whether currently
pending or initiated in the future, except those proceedings
initiated by the Debtors in accordance with the Reclamation
Procedures, are stayed and the claims asserted will be resolved
exclusively pursuant to the Reclamation Procedures.
To the extent a Reclamation Claim has been paid by the Debtors
pursuant to another order entered by the Court, including any
orders authorizing the Debtors to pay prepetition claims of
certain essential suppliers and vendors, the Reclamation
Procedures will not apply to a Vendor and any Reclamation Claim
filed by that Vendor with the Court will be deemed withdrawn
without the need for any further Court order, Judge Lifland made
clear.
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 AlixPartners as Advisors
--------------------------------------------------
Fairpoint Communications Inc. and its units seek the Court's
authority to employ AlixPartners, LLP, as their restructuring
advisors in connection with their Chapter 11 cases, nunc pro tunc
to October 26, 2009.
The Debtors and AlixPartners entered into an letter agreement
dated September 1, 2009, with respect to the services to be
rendered by the firm.
FairPoint Communications Executive Vice President Shirly J. Linn
tells the Court that the Debtors believe that AlixPartners has a
wealth of experience in providing restructuring advisory
services, and enjoys an excellent reputation for services it has
rendered in large and complex Chapter 11 cases on behalf of both
debtors and creditors throughout the United States.
Furthermore, as a result of the prepetition work performed on
behalf of the Debtors, AlixPartners has acquired significant
knowledge about the Debtors and their businesses and is now
intimately familiar with the Debtors' financial affairs, debt
structure, operations, and related matters. Similarly, in
providing prepetition services to the Debtors, AlixPartners'
professionals have worked closely with the Debtors' management
and their other advisors. Accordingly, AlixPartners has
developed relevant experience and expertise regarding the Debtors
that will assist the firm in providing effective and efficient
services in these Chapter 11 cases, Ms. Linn avers.
As restructuring advisors to the Debtors, AlixPartners is
expected to render these services:
* Provide assistance to the Debtors' management in connection
with the Debtors' development of their rolling 13-week cash
receipts and disbursements forecasting tool designed to
provide on-time information related to the Debtors'
liquidity;
* Assist in managing the "working group" professionals who are
assisting the Debtors in the reorganization process or who
are working for the Debtors various stakeholders to improve
coordination of their efforts and individual work product so
as to be consistent with the Debtors' overall restructuring
goals;
* Assist the Debtors in other business and financial aspects
of their Chapter 11 proceedings;
* Assist the Debtors with the preparation and filing of their
bankruptcy schedules and statements of financial affairs;
* Assist with the overall claims and contracts resolution
process and providing both the Debtors and their counsel
access to the claims and contracts data;
* Provide various bankruptcy consulting services throughout
the Debtors' Chapter 11 cases, as necessary;
* Work at the direction of the Debtors and their counsel to
assist with planning and directing Chapter 11-related
communications to employees, vendors, customers, regulators
and other parties-in-interest;
* Provide testimony, if and as necessary; and
* Assist with other matters as may be requested that fall
within AlixPartners' expertise and that are mutually
agreeable.
The parties' Engagement Letter also contains standard
indemnification language with respect to AlixPartners' services,
including an agreement by the Debtors to indemnify AlixPartners,
from and against all claims, and actual damages arising out of or
in connection with the engagement of AlixPartners that is the
subject of the Engagement Letter. Accordingly, the Debtors ask
the Court to approve the indemnification provisions as set forth
in the Engagement Letter.
The Debtors intend to pay for AlixPartners' professional services
on an hourly basis and reimburse the firm of its actual,
necessary out-or-pocket expenses incurred or to be incurred
while representing the Debtors.
AlixPartners' hourly rates are:
Professional Hourly Rate
------------ -----------
Managing Directors $595 to $995
Directors $485 to $685
Vice Presidents $395 to $505
Associates $260 to $365
Analysts $195 to $260
Paraprofessionals $120 to $200
Meade Monger, a managing director at AlixPartners, assures the
Court that AlixPartners neither holds nor represents an interest
materially adverse to the Debtors, their estates, creditors or
equity security holders.
Mr. Monger informs the Court that AlixPatners received $989,687
for professional services performed and expenses incurred
immediately before the Petition Date. AlixPartners also received
an advance $100,000 retainer on September 4, 2009, for
professional services, he adds.
The Court will convene a hearing to consider this motion on
November 18, 2009, at 10:00 a.m. Objections will be due by
November 11.
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 Ernst & Young as Tax Advisors
-------------------------------------------------------
Fairpoint Communications Inc. and its units seek the Court's
authority to employ Ernst & Young LLP as auditors and providers of
tax advisory services in their Chapter 11 cases nunc pro tunc to
the Petition Date.
Alfred C. Giammarino, chief financial officer for FairPoint
Communications, Inc., tells the Court that Ernst & Young is
highly qualified to provide tax and audit services for the
Debtors, having provided tax and audit services to numerous
debtors in Chapter 11 cases.
The Debtors believe that E&Y's engagement is crucial to their
restructuring efforts. The Debtors are relate that they are
required by many of their lenders to provide audited financial
statements, and it is not feasible for them to provide those
statements without the services of an independent auditor. E&Y,
the Debtors aver, is particularly well-suited to render tax and
audit services as the firm has been providing them with those
services before the Petition Date. As a result of that
representation, E&Y is familiar with the Debtors' complex
corporate structure, as well as the Debtors' operations.
As auditors and tax advisors, E&Y is expected to render these
professional services to the Debtors:
(a) perform certain tax services as set forth in specific
Statements of Work executed pursuant to the Master Tax
Services Agreement. A full-text copy of the MTSA is
available for free at:
http://bankrupt.com/misc/FairPt_E&Y_MTSA.pdf
(b) work with the Debtors' appropriate personnel or outside
legal counsel in developing an understanding of the tax
issues and alternatives associated with the Debtors'
Chapter 11 filing, restructuring, or other plan, taking
into account the Debtors' specific facts and
circumstances, for U.S. Federal and State and Local
Income and Indirect Tax purposes.
(c) assist and advise the Debtors in developing an
understanding of the tax implications of its bankruptcy
restructuring alternatives and post-bankruptcy operations;
(d) assist and advise the Debtors in developing an
understanding of the tax forecasting implications of
restructuring alternatives;
(e) assist and advise the Debtors in calculating cancellation
of indebtedness income for tax purposes;
(f) provide tax advisory services regarding availability,
limitations on the use and preservation of tax attributes,
stock and asset basis as a result of the application of
the federal and state cancellation of indebtedness
provisions;
(g) provide assistance with tax issues arising in the ordinary
course of business while in bankruptcy, as ongoing
assistance with IRS or state and local tax examinations,
and, as needed, research, discussions and analysis of
federal and state and local tax issues arising during the
bankruptcy period;
(h) provide tax advisory services regarding the validity of
tax claims in order to determine if the tax amount claimed
correctly reflects true tax liability pursuant to
applicable tax law;
(i) perform analyses of legal and other professional fees
incurred during the bankruptcy period for purposes of
determining future deductibility of these costs for U.S.
Federal and state and local tax purposes;
(j) assist with the preparation of documentation, as
appropriate or necessary, of tax analysis,
recommendations, and correspondence for any proposed
restructuring alternative, bankruptcy tax issues or other
tax matters;
(k) perform advisory services regarding tax analysis and
research related to acquisitions, divestitures, and tax-
efficient domestic restructurings;
(l) provide testimony, as necessary, as fact witness regarding
E&Y's work done on the Debtors' tax attributes and overall
tax posture and the impact of Bankruptcy on these
attributes and the Debtors' overall tax position;
provided, that E&Y will not act as an expert witness for
the Debtors under this retention;
(k) perform other related tax advisory services as requested
by FairPoint and agreed upon by E&Y;
(m) provide to the Debtors routine tax advice and assistance
concerning issues as requested when those projects are not
covered by a separate Statement of Work and do not involve
any significant tax planning or projects;
(n) audit and report on the consolidated financial statements
of the Debtors for the year ended December 31, 2009;
(o) audit and report on the effectiveness of the Debtors'
internal control over financial reporting as of Dec. 31,
2009; and
(p) review the Debtors' unaudited interim financial
information before the Debtors' filing of their Form 10-Q.
The Debtors propose to pay E&Y for the firm's services on an
hourly basis, plus reimbursement of necessary, actual out-of
pocket expenses incurred by the firm's professionals in
representing the Debtors. E&Y's hourly rates are:
I. For services under Tax Statement of Works:
Professional Hourly Rate
------------ -----------
Partners, Principals and Directors $765
Senior Managers $615
Managers $545
Seniors $375
Staff $190
II. For services under Audit Engagement Letter:
Professional Hourly Rate
------------ -----------
National Partner $700 to $986
Partners, Principals and Directors $620 to $726
Senior Managers $520 to $613
Managers $410 to $557
Seniors $270 to $406
Staff $165 to $251
Bryan Yokley, a partner of E&Y, assures the Court that E&Y
is a "disinterested person," as defined under Section 101(14) of
the Bankruptcy Code and as required by Section 327(a) of the
Bankruptcy Code in that E&Y has no connection with the Debtors,
its creditors and the United States Trustee.
The Court will convene an interim hearing to consider the
Debtors' application on November 18, 2009, at 10:00 a.m. The
final hearing is scheduled for December 10, 2009, at 10:00 a.m.
Objections will be due no later than December 3.
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 Rothschild as Financial Advisor
---------------------------------------------------------
Fairpoint Communications Inc. and its units seek the Court's
authority to employ Rothschild Inc. as their financial advisor and
investment banker in accordance with terms and conditions set
forth in an engagement letter and joinder letter, dated May 12,
2009, by and between the parties.
According to Shirley J. Linn, FairPoint Communications, Inc.'s
executive vice president, Rothschild is highly qualified to
advise on strategic alternatives and its professionals have
extensive experience in deals involving complex financial and
operating restructurings.
In light of the size and complexity of the Debtors' Chapter 11
cases, the resources, capabilities and experience of Rothschild
in advising the Debtors is crucial to the success of these
Chapter 11 cases, Ms. Linn states. Rothschild, she relates, will
concentrate its efforts on serving as the Debtors' financial
advisor and investment banker in and, more specifically, in
formulating strategic alternatives and assisting the Debtors in
their efforts with regard to a restructuring, financing, or sale.
Prior to the Petition Date, the Debtors engaged Rothschild to
provide general investment banking and financial advice in
connection with their efforts to pursue an out-of-court
restructuring of all or a significant portion of their
outstanding indebtedness, and to prepare for the commencement of
these Chapter 11 cases after their out-of-court restructuring
efforts failed.
In rendering prepetition services to the Debtors, the firm has
become well acquainted with the Debtors' business operations,
capital structure, key stakeholders, financing documents and
other material information. Accordingly, Rothschild has
developed significant expertise regarding the Debtors that will
assist it in rendering strategic advice and facilitating the
Debtors' efforts to maximize value in their Chapter 11 cases, Ms.
Linn avers.
As the Debtors' financial advisors, Rothschild is contemplated to
render these services:
(a) identify, propose and initiate potential Recapitalization
Transactions, as defined in the Engagement Letter;
(b) review and analyze the Debtors' financial condition and
the operating and financial strategies of the Debtors;
(c) review and analyze the business plans and financial
projections prepared by the Debtors, including testing
assumptions and comparing those assumptions to historical
FairPoint and industry trends;
(d) evaluate the Debtors' debt capacity in light of their
projected cash flows and assist in the determination of
an appropriate capital structure for the Debtors;
(e) analyze the Debtors' financial liquidity and evaluate and
propose alternatives, if any, to improve that liquidity;
(f) prepare financial models which demonstrate the financial
impact of any proposed Recapitalization Transaction on
the Debtors' existing shareholders and the long term cash
flow impact of any proposed Recapitalization Transaction
on the Debtors;
(g) review and analyze the terms and conditions of the
Debtors' existing credit documents and tax sharing
agreements in connection with evaluating any proposed
Recapitalization Transaction or alternative transaction;
(h) assist the Debtors and their other professionals in
reviewing the terms of any proposed Recapitalization
Transaction or other transaction, in responding and, if
directed, in evaluating alternative proposals for a
Recapitalization Transaction;
(i) determine a range of values for the Debtors and any
securities that the Debtors offer or proposes to offer in
connection with a Recapitalization Transaction;
(j) advise the Debtors on the risks and benefits of
considering a Recapitalization Transaction with respect
to the Debtors' intermediate and long-term business
prospects and strategic alternatives to maximize the
business enterprise value of the Debtors;
(k) review, analyze and provide recommendations regarding any
proposal the Debtors receive from third parties in
connection with a Recapitalization Transaction or other
transaction, including any proposals for debtor-in-
possession financing, as appropriate;
(l) advise, assist or participate in negotiations with the
parties-in-interest, including any current or prospective
creditors of, holders of equity in, public utility
commissions, and claimants against the Debtors and their
respective representatives in connection with a
Recapitalization Transaction, in each case, at the
direction of the Debtors;
(m) assist with the preparation and review of presentations,
documents and other materials for the Debtors' board of
directors, creditor groups and other interested parties;
(n) advise the Debtors with respect to, and attend, meetings
of the Debtors' board of directors, creditor groups,
official constituencies and other interested parties, as
necessary;
(o) participate in hearings before the Court and provide
relevant testimony with respect to various matters
described in the Engagement Letter and issues arising in
connection with any proposed plan of reorganization; and
(p) render other financial advisory and investment banking
services as may be agreed upon by Rothschild and
the Debtors.
In consideration of the services to provided by Rothschild, the
Debtors propose to pay Rothschild in cash under this compensation
structure:
* A monthly fee of $200,000;
* A Recapitalization fee equal to $8 million;
* A fee with respect to any new capital raise equal to:
(i) 1% of the face amount of any senior secured debt
raised;
(ii) 2% of the face amount of any junior secured debt
raised;
(iii) 3% of the face amount of any senior or subordinated
unsecured debt raised; and
(iv) 5% of any equity or convertible capital raised;
* To the extent the Debtors ask Rothschild to perform
additional services not contemplated by the Engagement
Letter, the fees for those services will be mutually agreed
upon by Rothschild and the Debtors, in writing, in advance;
* A credit against the Recapitalization Fee calculated as:
(i) 50% of the Monthly Fees paid in excess of $600,000,
but less than or equal to $1.2 million, plus 100% of
Monthly Fees paid in excess of $1.2 million, but less
than or equal to $2.4 million, plus 50% of Monthly
Fees paid in excess of $2.4 million; and
(ii) 50% of any New Capital Fee paid;
provided that the total credit does not exceed the
Recapitalization Fee.
In addition to the fees, the Debtors agree to reimburse
Rothschild for all out-of-pocket expenses reasonably incurred by
the firm in connection with the matters contemplated by the
Engagement Letter, including reasonable fees, disbursements, and
charges of Rothschild's counsel.
As part of Rothschild's overall compensation under the terms of
the Engagement Letter, the Debtors also agree to indemnify and
hold the firm harmless against liabilities in connection with its
retention by the Debtors, except for any liability for losses, or
damages incurred by the Debtors that are determined by a court to
have primarily resulted from the gross negligence, willful
misconduct, or fraud of Rothschild.
Neil A. Augustine, Rothschild's managing director, discloses that
during the 90 days before the Petition Date, his firm received
$1,150,239 for professional services performed and expenses
incurred, including $50,000 in estimated expenses incurred but
not yet invoiced. To the extent the estimated expenses exceed
actual expenses incurred, the excess will be applied to
subsequent invoices.
Furthermore, Mr. Augustine assures the Court that Rothschild is a
"disinterested person" as that term is defined under Section
101(14) of the Bankruptcy Code and as modified by Section 1107(b)
of the Bankruptcy Code.
The Court will convene a hearing to consider this motion on
November 18, 2009, at 10:00 a.m. Objections will be due by
November 11.
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)
FNDS3000 CORP: Sherington Agrees to Forbear Until Jan. 31
---------------------------------------------------------
On November 2, 2009, to obtain funding for the development of the
business, FNDS3000 Corp. entered into a Securities Purchase
Agreement with Sherington Holdings, LLC pursuant to which
Sherington agreed to purchase (i) 10,000,000 shares of Common
Stock at a purchase price of $0.15 per share and (ii) a common
stock purchase warrant to purchase 10,000,000 shares of common
stock at an exercise price of $0.175 per share.
On July 1, 2009, the Company entered into the First Amendment to
the Amended and Restated Note Purchase Agreement with Sherington,
which amended the Amended and Restated Note Purchase Agreement
entered by and between the Company and Sherington on December 1,
2008. The First Amended Agreement provided for a decrease in the
minimum number of card sales required to be sold in South Africa
from 150,000 prior to July 31, 2009 to 100,000 on or prior to
September 30, 2009. In connection with the Agreement, on July 1,
2009, the Company issued a Second Amended and Restated Secured
Convertible Promissory Note in the principal amount of $1,000,000.
As the Company has not achieved the Target resulting in a default
under the July 2009 Note, the Company and Sherington entered into
the Forbearance and Note Modification Agreement dated November 2,
2009, pursuant to which Sherington has agreed to temporarily
forbear from exercising its rights and remedies with respect to
the default until January 31, 2010. If the Company satisfied the
Target prior to January 31, 2010, then the default will be waived.
Further, pursuant to the Forbearance Agreement, the July 2009 Note
was amended to extend the maturity date to the earliest of the
close of business on February 28, 2010 or upon or after the
occurrence of an event of default (as defined in the July 2009
Note) and the conversion price was reduced to $0.15 per share.
Further, the July 2009 Note may not be redeemed or prepaid prior
to February 28, 2010 without the prior written consent of
Sherington.
FNDS3000 Corp, formerly FundsTech Corp, is a financial transaction
processing company. The Company is in development-stage. The
services it provides includes prepaid debit cards to third parties
in cooperation with financial institutions throughout the world,
predominantly through its Europe, Middle East, and Africa (EMEA)
Operating Unit, and merchant processing solutions, predominantly
through its Americas Operating Unit. The Company's primary
products are the FNDS3000 automated teller machine (ATM) and
Prepaid Debit Cards, and the FNDS3000 Stored Value MasterCard
cards, which are re-loadable financial products primarily for the
unbanked or under banked market.
FORD MOTOR: Geely Has Turnaround Plan for Volvo Unit
----------------------------------------------------
The Wall Street Journal's Norihiko Shirouzu reports that China's
Zhejiang Geely Holding Group Co., has developed a turnaround plan
in which Ford Motor Co.'s money-losing Volvo unit would sell
nearly one million vehicles a year.
The plan centers on China but also sets ambitious goals for
Volvo's traditional markets of Europe and North America, the
report says. Geely believes Volvo could sell two-thirds of the
cars from its planned new China plant domestically and would seek
to export the rest to other Asia-Pacific countries, the report
continues.
Geely was chosen last month as lead bidder for Volvo. According
to the report, a person close to Geely confirmed that Geely, one
of China's biggest privately owned auto makers, is financing a
roughly $2 billon bid for Volvo with a combination of cash, bank
loans and funds from a small number of investors. The person said
those investors include a government-owned fund based in Tianjin,
China, and a relatively well-known foreign investor. The person
didn't give details.
The Journal says Geely, under its plans for Volvo, would build a
new Volvo plant in China capable of producing 300,000 vehicles a
year as it looks to draw on China's market potential and
inexpensive labor to raise sales and cut costs. But for now it is
ceding more sophisticated engineering to Volvo's Swedish
operations, an aspect of the plan that could help allay fears of
lost jobs in Sweden.
Geely believes Volvo has the potential to sell 200,000 cars a year
in China, up from 12,600 vehicles last year, according to the
Journal. It forecasts selling nearly one million cars a year
globally within four or five years, compared with recent annual
sales of around 400,000 vehicles. Geely wants to use Volvo's
manufacturing capacity fully in Europe to sell 600,000 vehicles in
Europe and North America, the report says.
About Ford Motor
Headquartered in Dearborn, Michigan, Ford Motor Co. (NYSE: F) --
http://www.ford.com/-- manufactures or distributes automobiles
across six continents. With about 200,000 employees and about 90
plants worldwide, the company's automotive brands include Ford,
Lincoln, Mercury and Volvo. The company provides financial
services through Ford Motor Credit Company.
* * *
As reported by the Troubled Company Reporter on November 4, 2009,
Moody's Investors Service upgraded the senior unsecured rating of
Ford Motor Credit Company LLC to B3 from Caa1. This follows
Moody's upgrade of Ford Motor Company's corporate family rating to
B3 from Caa1, with a stable outlook. Ford Credit's long-term
ratings remain on review for further possible upgrade.
As reported by the TCR 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.
FORD MOTOR: Nets $2.875 Billion in 4.25% Senior Notes Offering
--------------------------------------------------------------
Ford Motor Company announced on November 3, 2009, that it had
agreed to sell $2,500,000,000 in aggregate principal amount of its
4.25% Senior Convertible Notes due November 15, 2016 in a public
offering. On November 3, Ford also granted to the underwriters
for the Offering a 30-day option to purchase up to an additional
$375,000,000 in aggregate principal amount of the Notes to cover
over-allotments.
On November 6, 2009, the underwriters exercised their option in
full to purchase an additional $375,000,000 in principal amount of
the Notes.
On November 9, 2009, Ford settled the Offering comprising a total
of $2,875,000,000 principal amount of the Notes. Net proceeds to
Ford from the Offering totaled $2,810,312,500 and are expected to
be used for general corporate purposes.
The Notes will pay interest semiannually at a rate of 4.25% per
annum. The Notes will be convertible, under certain
circumstances, into shares of Ford Common Stock, based on a
conversion rate (subject to adjustment) of 107.5269 shares per
$1,000 principal amount of Notes (which is equal to a conversion
price of approximately $9.30 per share, representing a 25%
conversion premium based on the closing price of $7.44 per share
on November 3, 2009).
About Ford Motor
Headquartered in Dearborn, Michigan, Ford Motor Co. (NYSE: F) --
http://www.ford.com/-- manufactures or distributes automobiles
across six continents. With about 200,000 employees and about 90
plants worldwide, the company's automotive brands include Ford,
Lincoln, Mercury and Volvo. The company provides financial
services through Ford Motor Credit Company.
* * *
As reported by the Troubled Company Reporter on November 4, 2009,
Moody's Investors Service upgraded the senior unsecured rating of
Ford Motor Credit Company LLC to B3 from Caa1. This follows
Moody's upgrade of Ford Motor Company's corporate family rating to
B3 from Caa1, with a stable outlook. Ford Credit's long-term
ratings remain on review for further possible upgrade.
As reported by the TCR 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.
FORD MOTOR: Registers $40,000,000 in Benefit Plan Obligations
-------------------------------------------------------------
Ford Motor Company filed with the Securities and Exchange
Commission registration statements to register:
-- $15,000,000 in Benefit Equalization Plan Obligations. The
The Benefit Equalization Plan Obligations are unsecured
obligations of Ford to pay compensation in the future in
accordance with the terms of the savings plan portion of
the Ford Motor Company Benefit Equalization Plan.
See http://ResearchArchives.com/t/s?4914
-- $25,000,000 in Deferred Compensation Obligations. The
Deferred Compensation Obligations are unsecured
obligations of Ford to pay deferred compensation in the
future in accordance with the terms of the Ford Motor
Company Deferred Compensation Plan.
See http://ResearchArchives.com/t/s?4915
About Ford Motor
Headquartered in Dearborn, Michigan, Ford Motor Co. (NYSE: F) --
http://www.ford.com/-- manufactures or distributes automobiles
across six continents. With about 200,000 employees and about 90
plants worldwide, the company's automotive brands include Ford,
Lincoln, Mercury and Volvo. The company provides financial
services through Ford Motor Credit Company.
* * *
As reported by the Troubled Company Reporter on November 4, 2009,
Moody's Investors Service upgraded the senior unsecured rating of
Ford Motor Credit Company LLC to B3 from Caa1. This follows
Moody's upgrade of Ford Motor Company's corporate family rating to
B3 from Caa1, with a stable outlook. Ford Credit's long-term
ratings remain on review for further possible upgrade.
As reported by the TCR 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.
FORD MOTOR: Fitch Assigns 'CC/RR6' Rating on $2.875 Bil. Notes
--------------------------------------------------------------
Fitch Ratings assigns a 'CC/RR6' rating to Ford Motor Company's
issuance of $2.875 billion seven-year senior unsecured convertible
notes. The Rating Outlook is Positive. Proceeds will be used for
general corporate purposes.
As stated in the Nov. 2, 2009 press release, the Positive Outlook
reflects the better than expected progress on Ford's cost
reduction program, production and inventory discipline that has
resulted in solid pricing performance and continued market share
gains. Although Fitch expects a weak rebound in industry sales in
2010, in part recognizing the hangover from the Cash-for-Clunkers
program, Fitch expects that cash drains will be materially reduced
and comfortably within Ford's liquidity position.
Fitch expects that industry sales will show only modest
improvement in 2010, based on macroeconomic factors including
increased unemployment, reduced wealth, consumer spending
pressures and a higher savings rate. Other factors muting a
rebound in industry sales include more limited financing capacity,
potential increases in gas prices and evolving consumer thinking
that may stretch average vehicle age. Nevertheless, the
combination of Ford's cost reduction efforts and price performance
has led to sharply reduced cash drains in a trough environment.
Fitch expects that even if U.S. industry sales were to remain flat
at roughly 10.5 million vehicles in 2010, Ford's cash drain would
be less than $5 billion. As U.S. industry sales climb above an
11.5 SAAR rate, Ford should be able to achieve positive free cash
flow. Although cost reductions should continue to be realized
through fourth quarter-2010, the step change in fixed cost
reductions have largely been completed, and margin expansion going
forward will need to be derived primarily from capacity
utilization and scale efficiencies associated with increases in
industry volumes. The recent contract talks demonstrate, however,
that full labor-cost parity may still be a challenge.
A Fitch upgrade of Ford would be driven by a combination of these
(unchanged from Fitch's Aug. 29 press release):
-- Industry sales rebound to an annual 12 million sales level
more quickly than currently forecast;
-- Ford's products continue to hold or gain share;
-- Inventory management at Ford and the industry allows Ford to
hold or improve product prices;
-- A clear path to positive free cash flow is projected;
-- Liabilities continue to be managed or addressed, including
the maturity of the company's bank agreement;
-- Independent access to capital by Ford Credit improves.
An Outlook revision back to Stable or a ratings downgrade could
result from some combination of these factors:
-- U.S. industry sales revert to new lows versus 2009 levels in
the event of a double-dip recession;
-- A market disruption in oil prices which sends gas prices
sharply higher and drives consumers away from vehicle
purchases;
-- A breakdown in the supply chain resulting from further
supplier bankruptcies and lack of access to capital, or from
dislocations caused by the dissolution of a major competitor;
-- Inability of Ford Credit to obtain financing on competitive
terms.
Ford is currently riding a wave of consumer goodwill resulting
from its ability to avoid a direct government rescue and from
favorable quality reports. Product winnowing and capacity
reductions at GM and Chrysler indicate that several points of U.S.
market share may be up for grabs over the next several years, with
Ford in a good position to capture a portion of it. Ford's
competitive product lineup across market segments, a good recent
history of product introductions, and a rapid cadence of new
products and refreshenings indicate that recent share gains could
persist.
Ford's liquidity position remains adequate to finance dramatically
reduced negative cash flows, even if they persist through 2010.
Even in the weak industry recovery forecast by Fitch, Ford should
be able to sustain liquidity at more than twice the minimum
required level. Scheduled proceeds from the Department of Energy
loans ($5.9 billion in total), contributions from Ford Credit, and
working capital inflows from increased production should offset
near-term operating losses persisting from weak market conditions.
Ford has been able to manage its liability structure through the
2009 debt exchange and regular equity issuance.
Fitch expects that Ford will continue to tap the equity markets as
conditions permit, and that Ford will issue equity to the maximum
extent permitted (50%) to finance its upcoming obligations under
the VEBA agreement. Fitch notes that minimal or no contributions
to the company's underfunded U.S. pension obligations could create
more onerous contributions at a later date given recent asset
performance, but the contribution of equity for these obligations
would limit the potential claim on cash over the next five years.
Proceeds from Volvo are expected to be limited, and may be largely
offset by retained liabilities.
Ford's cash at the end of 3Q was $23.8 billion, providing and
adequate cushion in the event of persistent weakness in U.S.
industry sales. The balance sheet remains burdened by debt,
unfunded pensions and obligations under Ford's VEBA agreement,
with only marginal improvement potential over the near term,
outside of material equity issuance. Of primary concern is the
December 2011 maturity of the bank agreement. Fitch expects that
given Ford's operating performance and the improvement in the
capital markets, Ford is in a position to address the maturity of
the facility.
Fitch continues to recognize the strong linkage between the
ratings of Ford Credit and Ford. In addition to the rating
drivers cited for its automotive parent, continued improvement in
operating performance and the ability to finance its business
independent of government programs would support an upgrade for
Ford Credit.
Fitch's Ford and Ford Credit ratings are:
Ford Motor Co.
-- Long-term Issuer Default Rating 'CCC';
-- Senior secured credit facility 'B/RR1';
-- Senior secured term loan 'B/RR1';
-- Senior unsecured 'CC/RR6'.
Ford Motor Co. Capital Trust II
-- Trust preferred stock 'C/RR6'.
Ford Holdings, Inc.
-- Long-term IDR 'CCC';
-- Senior unsecured 'CC/RR6'.
Ford Motor Co. of Australia
-- Long-term IDR 'CCC';
-- Senior unsecured 'CC/RR6'.
Ford Motor Credit Company LLC
-- Long-term IDR 'CCC';
-- Senior unsecured 'B/RR2';
-- Short-term IDR 'C';
-- Commercial paper 'C';
-- Short-term deposits 'C'.
FCE Bank Plc
-- Long-term IDR 'CCC';
-- Senior unsecured 'B/RR2';
-- Short-term IDR 'C';
-- Commercial paper 'C';
-- Short-term deposits 'C'.
Ford Capital B.V.
-- Long-term IDR 'CCC';
-- Senior unsecured 'B/RR2'.
Ford Credit Canada Ltd.
-- Long-term IDR 'CCC';
-- Senior unsecured 'B/RR2';
-- Short-term IDR 'C';
-- Commercial paper 'B'.
Ford Credit Australia Ltd.
-- Long-term IDR 'CCC';
-- Short-term IDR 'C';
-- Commercial paper 'B'.
Ford Credit de Mexico, S.A. de C.V.
-- Long-term IDR 'CCC'.
Ford Credit Co S.A. de CV
-- Long-term IDR 'CCC';
-- Senior unsecured 'B/RR2'.
Ford Motor Credit Co. of New Zealand
-- Long-term IDR 'CCC';
-- Senior unsecured 'B/RR2';
-- Short-term IDR 'C';
-- Commercial paper 'C'.
Ford Motor Credit Co. of Puerto Rico, Inc.
-- Short-term IDR 'C'.
FOURTH QUARTER PROPERTIES: Sec. 341 Meeting Set for December 10
---------------------------------------------------------------
The U.S. Trustee for Region 21 will convene a meeting of creditors
for Fourth Quarter Properties XLVII, LLC and Fourth Quarter
Properties 118, LLC on December 10, 2009, at 11:00 a.m. at Hearing
Room 363, Atlanta.
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.
Newnan, Georgia-based Fourth Quarter Properties 118, LLC, dba The
Rim, operates a real estate business. The Company filed for
Chapter 11 bankruptcy protection on November 2, 2009 (Bankr. N.D.
Ga. Case No. 09-13960). James P. Smith, Esq., at Stone & Baxter,
LLP, assists the Company in its restructuring efforts. The
Company listed $50,000,001 to $100,000,000 in assets and
$100,000,001 to $500,000,000 in liabilities.
Fourth Quarter Properties XLVII, LLC, which also operates a real
estate business, filed for Chapter 11 bankruptcy protection on
November 2, 2009 (Bankr. N.D. Ga. Case No 09-13959). The Company
listed $10,000,001 to $50,000,000 in assets and $50,000,001 to
$100,000,000 in liabilities.
FOURTH QUARTER PROPERTIES: Wants Dec. 17 Deadline for Schedules
---------------------------------------------------------------
Fourth Quarter Properties 118, LLC, and its debtor-affiliates --
Fourth Quarter Properties 140, LLC; Fourth Quarter Properties 161,
LP; and Fourth Quarter Properties 162, LP -- have asked the U.S.
Bankruptcy Court for the Northern District of Georgia to extend
the deadline for the filing of their schedules, statements, lists
and initial reports to the U.S. Trustee in each of their
respective cases until December 17, 2009.
Fourth Quarter Properties XLVII, LLC, has also asked the U.S.
Bankruptcy Court for the Northern District of Georgia to move the
filing deadline of its schedules, statement of financial affairs,
lists and initial reports to the U.S. Trustee to December 17,
2009.
The current deadline for the schedules is November 17, 2009. The
Debtors say that they are still accumulating data and reviewing
their records to prepare the statement of financial affairs,
schedules, lists and initial reports to the U.S. Trustee, and that
each of the Debtors will need at least additional 30 days to
properly determine the amounts owed to their respective creditors
and to properly identify and catalogue their assets and accounts
receivable.
Newnan, Georgia-based Fourth Quarter Properties 118, LLC, dba The
Rim, operates a real estate business. The Company filed for
Chapter 11 bankruptcy protection on November 2, 2009 (Bankr. N.D.
Ga. Case No. 09-13960). James P. Smith, Esq., at Stone & Baxter,
LLP, assists the Company in its restructuring efforts. The
Company listed $50,000,001 to $100,000,000 in assets and
$100,000,001 to $500,000,000 in liabilities.
Fourth Quarter Properties XLVII, LLC, which also operates a real
estate business, filed for Chapter 11 bankruptcy protection on
November 2, 2009 (Bankr. N.D. Ga. Case No 09-13959). The Company
listed $10,000,001 to $50,000,000 in assets and $50,000,001 to
$100,000,000 in liabilities.
FX REAL ESTATE: LV Units Have Deal for Prepack Ch. 11 Plan
----------------------------------------------------------
FX Real Estate and Entertainment Inc. said in a regulatory filing
that on October 30, 2009, its Las Vegas subsidiaries entered into
a Lock Up and Plan Support Agreement with the first lien lenders
under the Las Vegas subsidiaries' $475 million mortgage loans, and
two corporate affiliates (LIRA Property Owner, LLC and its parent
LIRA LLC) of Robert F.X. Sillerman, Paul C. Kanavos and Brett
Torino, who are directors, executive officers and/or greater than
10% stockholders of the Company.
The Las Vegas subsidiaries are currently in default under the $475
million mortgage loans secured by their Las Vegas property, which
is substantially the Company's entire business.
On October 15, 2009, the first lien lenders agreed to adjourn the
latest scheduled trustee's sale of the Las Vegas property from
October 21, 2009 to November 18, 2009. The trustee's sale of the
Las Vegas property was initially scheduled for September 9, 2009,
but, as has been previously disclosed, was adjourned by the first
lien lenders on September 2, 2009 to October 21, 2009. The first
lien lenders agreed to these adjournments to facilitate continued
discussions regarding the mortgage loan default.
As a result of these discussions, the parties entered into the
Lock Up Agreement for the purpose of pursuing an orderly
liquidation of the Las Vegas subsidiaries for the benefit of their
creditors. The Lock Up Agreement contemplates implementation of
these transactions:
* The Las Vegas subsidiaries will be merged into one surviving
entity (the "Debtor");
* The Debtor will commence a voluntary prepackaged chapter 11
bankruptcy proceeding on or about November 16, 2009 with the
United States Bankruptcy Court for the District of Nevada for
the purpose of disposing of the Las Vegas property for the
benefit of the Las Vegas subsidiaries' creditors either
pursuant to an auction sale for at least $256 million or, if
the auction sale is not completed, pursuant to a prearranged
sale to the Newco Entities under the terms of the prepackaged
chapter 11 bankruptcy proceeding's plan of liquidation;
* Under the prearranged sale to one of the Newco Entities (LIRA
Property Owner, LLC) as contemplated by the plan of
liquidation, such entity will acquire the Las Vegas property
for approximately $260 million (plus certain expenses,
interest accruals and other items to the extent not paid
during the prepackaged chapter 11 proceeding from the cash
flows generated by the Las Vegas property's real estate
activities); and
* The first lien lenders will finance the prearranged sale to
LIRA Property Owner LLC by entering into a new secured loan
with it as the borrower under the following terms and
conditions:
(i) it will post a $2.2 million deposit before
commencement of the prepackaged chapter 11 bankruptcy
proceeding,
(ii) it will fund up to $650,000 of expenses during the
prepackaged chapter 11 bankruptcy proceeding,
(iii) at closing, it will pay approximately $15 million in
cash, while the balance of the purchase
price will be payable pursuant to the terms of the new
secured loan, and it will prefund a minimum of
$3.350 million of reserves,
(iv) during the prepackaged chapter 11 bankruptcy
proceeding, it will have to fund or assume other
expenses as set forth in the Lock-Up Agreement,
(v) the Newco Entities Equity Sponsors will have to provide
a "bad boy" guarantee of $60 million (decreasing over
time to $20 million) in the event of a voluntary or
collusive bankruptcy filing and/or misappropriation of
funds, and
(vi) in the event there is a fault-based termination of the
Lock Up Agreement, it will forfeit its $2.2 million
deposit to the first lien lenders and be obligated to
pay the first lien lenders an additional $650,000 as
liquidated damages.
The Lock Up Agreement is terminable by the first lien lenders, so
long as they are not in breach of the Agreement, under certain
conditions, including, without limitation, (i) if the prepackaged
bankruptcy proceeding has not been initiated by November 16, 2009
(the "Petition Date"), (ii) if the interim cash collateral order
for the case has not been entered within 10 business days of the
Petition Date or the final cash collateral order for the case has
not become a final order within 55 days of the Petition Date,
(iii) if the Newco Entities Equity Sponsors do not each execute
and deliver by November 11, 2009 a firm commitment to fund the
$2.2 million deposit by November 11, 2009 and, at closing, to fund
approximately $16.8 million (net of up to $650,000 for previously
advanced expenses in the case) to LIRA LLC and cause LIRA LLC to
fund LIRA Property Owner, LLC to satisfy its obligations under the
plan funding agreement for implementation of the plan and to
consummate the transactions contemplated thereby and in the Lock
Up Agreement, (iv) if the Newco Entities Equity Sponsors do not
fund the $2.2 million deposit by November 11, 2009, (v) if the
plan funding agreement for implementation of the plan of
liquidation has not been executed and delivered by November 11,
2009, (vi) if it is reasonably certain that neither the auction
sale of the Las Vegas property nor the plan of liquidation's
effective date is capable of occurring prior to May 18, 2010 or
(vii) if the Company or any of the Las Vegas subsidiaries or any
of the Newco Entities Equity Sponsors (including entities
controlled by any of them) (x) objects to, challenges or otherwise
commences or participates in any proceeding opposing the
transactions contemplated by the Lock Up Agreement, or takes any
action that is inconsistent with, or that would delay or obstruct,
consummation of the transactions or transaction documents
contemplated by the Lock Up Agreement, (y) directly or indirectly
seeks, solicits, supports or formulates or prosecutes any plan,
sale, proposal or offer of dissolution, winding up, liquidation,
reorganization, merger or restructuring of the Las Vegas
subsidiaries that could be reasonably expected to prevent, delay
or impede consummation of the transactions or transaction
documents contemplated by the Lock Up Agreement or (z) directs or
supports in any way any person to take (or who may take) any
action that is inconsistent with its obligations under the Lock Up
Agreement, or that could impede or delay implementation or
consummation of the transactions contemplated by the Lock Up
Agreement.
The Lock Up Agreement is terminable by the Debtor, so long as
neither the Debtor nor the Newco Entities are in breach of the
Agreement, if any of the first lien lenders breach any of their
obligations under the Lock Up Agreement after giving effect to any
applicable notice and cure period.
The Lock Up Agreement is terminable by either the Debtor or the
Newco Entities if the final order has not been entered confirming
the plan of liquidation and allowing the effective date for the
plan of liquidation to occur on or before May 18, 2010.
If the Las Vegas property is sold under the Lock Up Agreement
pursuant to the auction sale, it is highly unlikely that the
Company will receive any benefit from such auction sale. If the
auction sale is not completed and the Las Vegas property is sold
under the Lock Up Agreement pursuant to the prearranged sale to
the Newco Entities, the Company will not receive any benefit from
any such prearranged sale. If the Lock Up Agreement is terminated
without consummation of any such sale of the Las Vegas property,
it is difficult to predict what the consequences will be to the
Company and the surviving Las Vegas subsidiary and its creditors.
As has been previously disclosed, the Las Vegas property has been
under the exclusive possession and control of a court-appointed
receiver, at the request of the first lien lenders, since June 23,
2009. Upon commencing the prepackaged chapter 11 bankruptcy
proceeding, the court-appointed receiver shall be discharged and
the receivership of the Las Vegas property shall terminate. During
the prepackaged chapter 11 bankruptcy proceeding, subject to the
Bankruptcy Court entering the interim and final cash collateral
orders contemplated by the Lock Up Agreement, most of the Debtor's
expenses will be funded from cash flows generated by the Las Vegas
property's real estate activities.
Because the Lock Up Agreement and the transactions contemplated
thereby involve the Newco Entities Equity Sponsors, who are
directors, executive officers and/or greater than 10% stockholders
of the Company, a majority of the Company's disinterested
directors authorized the Las Vegas subsidiaries to enter into the
Lock Up Agreement and consummate the transactions contemplated
thereby.
A copy of the Plan Support Agreement is available for free at:
http://researcharchives.com/t/s?4906
About FX Real Estate
Based in New York, FX Real Estate and Entertainment Inc.'s
business consists of the ownership and operation of the Las Vegas
property, which is made up of six contiguous parcels aggregating
17.72 acres of land located on the southeast corner of Las Vegas
Boulevard and Harmon Avenue in Las Vegas, Nevada. The Las Vegas
property is currently occupied by a motel and several commercial
and retail tenants with a mix of short and long-term leases. The
Las Vegas property's six parcels generated total rental and other
revenue of $19,500,000 for the fiscal year ended Dec. 31, 2008.
The Company said that there is substantial doubt about its ability
to continue as a going concern. The Company noted that its Las
Vegas subsidiaries are in default under the $475,000,000 mortgage
loan secured by the Las Vegas property.
FX Real Estate and Entertainment Inc.'s balance sheet at June 30,
2009, showed total assets of $144,343,000 and total liabilities of
$474,975,000, resulting in a stockholders' deficit of
$330,632,000.
GALAXY GAMING: September 30 Balance Sheet Upside-Down by $772,700
-----------------------------------------------------------------
Galaxy Gaming, Inc.'s consolidated balance sheets at September 30,
2009, showed $1,588,214 in total assets and $2,360,988 in total
liabilities, resulting in a $772,774 shareholders' deficit.
The Company reported current assets of $857,107 and current
liabilities of $1,182,822 at September 30, 2009, resulting in a
$325,715 working capital deficit.
The Company reported a net loss of $31,734 on gross revenues of
$782,493 for the three months ended September 30, 2009, compared
with a net loss of $113,603 on gross revenues of $533,375 in the
same period in 2008.
During the three months ended September 30, 2008, the Company
recorded a net loss from discontinued operations in the amount of
$30,930.
Earnings before interest, taxes, depreciation and amortization
(EBITDA) was $15,327 for the three months ended September 30,
2009, compared to a loss of $50,406 for the three months ended
September 30, 2008.
A full-text copy of the Company's consolidated financial
statements for the three months ended September 30, 2009, is
available for free at http://researcharchives.com/t/s?4907
Going Concern Doubt
The Company has incurred net losses from operations for each of
the last two fiscal years, have negative working capital, and
require additional capital in order to expand its operations and
become profitable. The Company says its ability to raise
additional capital through the future issuances of common stock
and other means is unknown. The obtainment of additional
financing, the successful development of the Company's
contemplated plan of operations, and its transition, ultimately,
to the consistent attainment of profitable operations are
necessary for the Company to continue operations.
For these reasons, the Company's auditors stated in their report
for the year ended December 31, 2008, that they have substantial
doubt the Company will be able to continue as a going concern.
About Galaxy Gaming
Galaxy Gaming, Inc., is engaged in the business of developing,
manufacturing and marketing proprietary table games and electronic
enhancements and bonus systems for table games for use in casinos
throughout North America and on cruise ships worldwide. The
Company manufactures its products at its headquarters and
manufacturing facility in Las Vegas, Nevada. The Company
outsources the manufacturing of certain of its sub-assemblies in
the United States and internationally.
GENERAL MOTORS: Old GM to Continue Sales Process for France Plant
-----------------------------------------------------------------
Motors Liquidation Co., formerly known as General Motors Corp.,
announced it intends to continue with the sale process of its
powertrain manufacturing and engineering facility in Strasbourg,
France, which operates as a subsidiary of MLC. It was also
announced that Bank of America Merrill Lynch has been retained as
financial advisor for the sale.
The potential sale of the Strasbourg facility was originally
announced by General Motors Corp. in September 2008, with the
stated intention of generating liquidity for the company and
allowing the Strasbourg facility to pursue additional growth
opportunities under new ownership.
MLC, which said its efforts to sell the facility are pursuant to
its ongoing Chapter 11 bankruptcy in the U.S., also said it
intends to focus on potential buyers that would continue the
manufacturing, engineering and die-casting operations with the
facility's existing customer base, suppliers and workforce.
Established in 1967, the Strasbourg facility develops and
manufactures advanced-technology automatic transmissions for
passenger vehicles made by General Motors Co. and BMW AG. The
facility also operates a state-of-the-art engineering center and a
world-class aluminium die-cast foundry.
About General Motors
Headquartered in Detroit, Michigan, General Motors Corp.
(NYSE: GM) -- http://www.gm.com/-- as founded in 1908. GM
employs about 266,000 people around the world and manufactures
cars and trucks in 35 countries. In 2007, nearly 9.37 million GM
cars and trucks were sold globally under the following brands:
Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel,
Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar
subsidiary is the industry leader in vehicle safety, security and
information services.
GM Europe is based in Zurich, Switzerland, while General Motors
Latin America, Africa and Middle East is headquartered in Miramar,
Florida.
As reported by the Troubled Company Reporter, GM reported net loss
of US$6.0 billion, including special items, in the first quarter
of 2009. This compares with a reported net loss of US$3.3 billion
in the year-ago quarter. As of March 31, 2009, GM had
US$82.2 billion in total assets and US$172.8 billion in total
liabilities, resulting in US$90.5 billion in stockholders'
deficit.
General Motors Corporation and three of its affiliates filed for
Chapter 11 protection on June 1, 2009 (Bankr. S.D.N.Y. Lead Case
No. 09-50026). General Motors changed its name to Motors
Liquidation Co. following the sale of its key assets to a company
60.8% owned by the U.S. Government.
The Honorable Robert E. Gerber presides over the Chapter 11 cases.
Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Joseph H.
Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors
in their restructuring efforts. Al Koch at AP Services, LLC, an
affiliate of AlixPartners, LLP, serves as the Chief Executive
Officer for Motors Liquidation Company. GM is also represented by
Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as
counsel. Cravath, Swaine, & Moore LLP is providing legal advice
to the GM Board of Directors. GM's financial advisors are Morgan
Stanley, Evercore Partners and the Blackstone Group LLP.
Bankruptcy Creditors' Service, Inc., publishes General Motors
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by General Motors Corp. and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000).
GENERAL MOTORS: Payment of Federal Loan in Doubt, WSJ Says
----------------------------------------------------------
The Wall Street Journal reports that doubts have recently surfaced
about General Motor Company's ability to pay back its loan with
the U.S. government, given the fact so much of the U.S. Treasury's
investment is tied up in equity. Late October, according to Mr.
Stoll, the Government Accountability Office said that full
repayment is unlikely since GM's market cap would have to
skyrocket to $67 billion -- far exceeding the old GM's all-time
high of less than $60 billion set in 2000 -- for the government's
stake to be worth as much as its loans to the car maker.
The Journal notes that only $6.7 billion of the government's $50
billion in aid sits on GM's balance sheet because most of the
money was converted to stock that the U.S. Treasury holds. The
Obama administration, the Journal says, has repeatedly said it
will sell that equity as soon as practical to try to recoup the
money it pumped into the company over the past 12 months.
In an interview with The Wall Street Journal, Chairman Edward E.
Whitacre Jr. said the timing of GM's return to the public stock
markets is uncertain and suggested it may not take place in the
second half of next year as originally planned.
"I think it's even too early to speculate" on an IPO, Mr. Whitacre
told the Journal. Instead of taking GM public, Mr. Whitacre said,
"I'm feeling internally and the board is feeling internally the
need to start paying back the debt to show the taxpayer that we're
making progress . . . we are definitely feeling the pressure."
Mr. Whitacre said GM could start repaying the loan in 2010 "if not
sooner," but the company needs to "be showing a lot of positive
financial progress" to begin the process. "I think the board
thinks we're making progress and your thoughts turn to 'Well,
let's start paying back some of this debt.' "
About General Motors
Headquartered in Detroit, Michigan, General Motors Corp.
(NYSE: GM) -- http://www.gm.com/-- as founded in 1908. GM
employs about 266,000 people around the world and manufactures
cars and trucks in 35 countries. In 2007, nearly 9.37 million GM
cars and trucks were sold globally under the following brands:
Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel,
Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar
subsidiary is the industry leader in vehicle safety, security and
information services.
GM Europe is based in Zurich, Switzerland, while General Motors
Latin America, Africa and Middle East is headquartered in Miramar,
Florida.
As reported by the Troubled Company Reporter, GM reported net loss
of US$6.0 billion, including special items, in the first quarter
of 2009. This compares with a reported net loss of US$3.3 billion
in the year-ago quarter. As of March 31, 2009, GM had
US$82.2 billion in total assets and US$172.8 billion in total
liabilities, resulting in US$90.5 billion in stockholders'
deficit.
General Motors Corporation and three of its affiliates filed for
Chapter 11 protection on June 1, 2009 (Bankr. S.D.N.Y. Lead Case
No. 09-50026). General Motors changed its name to Motors
Liquidation Co. following the sale of its key assets to a company
60.8% owned by the U.S. Government.
The Honorable Robert E. Gerber presides over the Chapter 11 cases.
Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Joseph H.
Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors
in their restructuring efforts. Al Koch at AP Services, LLC, an
affiliate of AlixPartners, LLP, serves as the Chief Executive
Officer for Motors Liquidation Company. GM is also represented by
Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as
counsel. Cravath, Swaine, & Moore LLP is providing legal advice
to the GM Board of Directors. GM's financial advisors are Morgan
Stanley, Evercore Partners and the Blackstone Group LLP.
Bankruptcy Creditors' Service, Inc., publishes General Motors
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by General Motors Corp. and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000).
GENERAL MOTORS: Nick Reilly to Lead Opel/Vauxhall Europe
--------------------------------------------------------
David N. (Nick) Reilly, General Motors executive vice president
and president, GM International Operations, will immediately
assume responsibility for the operations of Opel/Vauxhall Europe
while an external search for a new CEO commences.
Mr. Reilly, with extensive prior experience in Europe with the
Opel and Vauxhall brands, will support the European leadership
team in running the business and will oversee the creation of a
strategy to position Opel/Vauxhall for long-term success. Mr.
Reilly maintains overall direction of GM's International
Operations based in Shanghai, China, but day-to-day operations of
the various international subsidiaries in his organization will be
handled by the respective country managing directors while he
serves in Europe.
"As we announced last [week], Opel/Vauxhall will remain a fully
integrated member of the New GM family, a decision that is in the
best interests of Opel/Vauxhall, its customers, employees, other
stakeholders and GM," said Fritz Henderson, GM president and CEO.
"With his deep experience with the Opel and Vauxhall brands, Nick
is well suited to lead this transition and to work toward the
earliest possible normalization of the business."
The Wall Street Journal reports GM CEO Fritz Henderson on Monday
met with leaders of its Opel unit to discuss the European auto
maker's future. Mr. Henderson wanted to get a firsthand look at
the situation at Adam Opel GmbH's headquarters in Ruesselsheim,
just west of Frankfurt, said Opel spokesman Ulrich Weber,
According to the report. Mr. Weber gave no details except to say
that Mr. Henderson was to stay through Tuesday and meet with the
company's employee council, the report says. Mr. Henderson was
accompanied by Mr. Reilly, director of GM's international
operations, the report adds.
Hans Demant, GM Europe vice president Engineering, managing
director Adam Opel GmbH, retains his role leading the Opel
Management Board and will work with Reilly in the transition.
Mr. Reilly was appointed GM executive vice president and president
of GM International Operations, effective July 10, 2009. Based in
Shanghai, China, he is also chairman of both the GM Daewoo Auto
and Technology Company (GMDAT) and Shanghai GM (SGM).
Mr. Reilly had served as GM group vice president and president of
GM Asia Pacific since July 1, 2006.
Mr. Reilly began his GM career in 1975 with the former Detroit
Diesel Allison Division in the United Kingdom. From 1978 to 1984,
he held various assignments with General Motors in Belgium, the
United States, and Mexico.
Returning to England, he moved to Vauxhall Motors as general
operations manager, aftersales. He later held the post of
Vauxhall supply manager and was appointed a director of the
company in 1986.
In 1987, Mr. Reilly was named vice president of operations and a
member of the board of directors of GM's IBC vehicle joint venture
with Isuzu in Luton, England. In 1990, he was appointed director
of manufacturing at Vauxhall's Ellesmere Port plant. Four years
later, he became vice president of quality and reliability for
General Motors Europe in Zurich, Switzerland, and a member of the
GM Europe Strategy Board.
He returned to the U.K. in 1996 as chairman and managing director
of Vauxhall and, in 1997, was named a GM vice president. In 2001,
Reilly returned to Zurich, Switzerland, as vice president of
sales, marketing, and aftersales for GM Europe, from where he
transferred to Korea to lead GM's transition team in the formation
of GM Daewoo, beginning in January 2002. He assumed the duties of
president and chief executive officer of GMDAT upon the company's
founding in October 2002.
A native of the United Kingdom, Mr. Reilly is a graduate of
Cambridge University. In 2000, he was appointed as a Commander of
the British Empire (CBE) in recognition of his contribution to the
U.K. automotive industry. He has advised the U.K. government in
the fields of vocational training and integrated transport. He
received the Global CEO Grand Prize 2006 from the Korean Academy
of International Business.
Mr. Reilly serves as deputy chairman of the Seoul International
Business Advisory Council (SIBAC), is past chairman of the U.S.
National Center for Asia-Pacific Economic Cooperation (NCAPEC),
and is a member of the U.S. APEC Business Advisory Council (ABAC).
About General Motors
Headquartered in Detroit, Michigan, General Motors Corp.
(NYSE: GM) -- http://www.gm.com/-- as founded in 1908. GM
employs about 266,000 people around the world and manufactures
cars and trucks in 35 countries. In 2007, nearly 9.37 million GM
cars and trucks were sold globally under the following brands:
Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel,
Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar
subsidiary is the industry leader in vehicle safety, security and
information services.
GM Europe is based in Zurich, Switzerland, while General Motors
Latin America, Africa and Middle East is headquartered in Miramar,
Florida.
As reported by the Troubled Company Reporter, GM reported net loss
of US$6.0 billion, including special items, in the first quarter
of 2009. This compares with a reported net loss of US$3.3 billion
in the year-ago quarter. As of March 31, 2009, GM had
US$82.2 billion in total assets and US$172.8 billion in total
liabilities, resulting in US$90.5 billion in stockholders'
deficit.
General Motors Corporation and three of its affiliates filed for
Chapter 11 protection on June 1, 2009 (Bankr. S.D.N.Y. Lead Case
No. 09-50026). General Motors changed its name to Motors
Liquidation Co. following the sale of its key assets to a company
60.8% owned by the U.S. Government.
The Honorable Robert E. Gerber presides over the Chapter 11 cases.
Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Joseph H.
Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors
in their restructuring efforts. Al Koch at AP Services, LLC, an
affiliate of AlixPartners, LLP, serves as the Chief Executive
Officer for Motors Liquidation Company. GM is also represented by
Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as
counsel. Cravath, Swaine, & Moore LLP is providing legal advice
to the GM Board of Directors. GM's financial advisors are Morgan
Stanley, Evercore Partners and the Blackstone Group LLP.
Bankruptcy Creditors' Service, Inc., publishes General Motors
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by General Motors Corp. and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000).
GENERAL MOTORS: China Sales Surpass 1.5 Million Units for 2009
--------------------------------------------------------------
General Motors Company and its joint ventures in China surpassed
1.5 million units in sales for 2009. With a strong October, the
GM China family continued its string of record monthly sales that
began at the start of the year.
"This has been a year of records for GM in China," said Kevin
Wale, President and Managing Director of the GM China Group. "It
is GM's priority to put the customer at the center of everything
we do. This is reflected in our vehicle design, engineering and
production."
Mr. Wale added, "With our new engine and transmission
technologies, we are able to present winning products that offer
good fuel efficiency to satisfy local market needs. Many of our
new products offer best-in-class fuel economy, including the new
Buick LaCROSSE with an S6 transmission and the Buick New Regal
2.0L."
For the first 10 months of 2009, GM's domestic sales in China
totaled 1,459,460 units. This was a rise of 59.8% from the first
10 months of 2008 and a new record for the period. Despite the
National Day holiday at the beginning of the month, the automaker
and its joint ventures ended October with 166,911 vehicles sold.
This was more than double the number sold in October 2008.
Shanghai GM sales in the first 10 months rose 46.5% from the same
period last year to 548,707 units. The passenger car joint
venture sold 68,505 vehicles domestically in October, which
represented an increase of 109.7% from the same month last year.
Shanghai GM finished the month number one in sales among domestic
passenger car manufacturers. Sales of both the Buick New Regal and
new Buick LaCROSSE topped 6,000 units in October, while the Buick
Excelle surpassed sales of 1 million units since its introduction
in 2003. GM's other mainstream brand in China also continued to
perform strongly, with both the Chevrolet Cruze and Chevrolet Lova
topping 10,000 units in sales in October for the second month in a
row.
In the first 10 months, SAIC-GM-Wuling, GM's mini-commercial
vehicle joint venture, registered domestic sales of 891,285 units,
representing an increase of 65.9% on an annual basis. It sold
89,416 vehicles in China last month, a rise of 78.5% from October
2008. Domestic sales of China's best-selling vehicle, the Wuling
Sunshine minivan, surpassed 500,000 units for the year, while
sales of the Wuling Rong Guang minivan topped 20,000 units in
October for the fourth consecutive month.
FAW-GM Light Duty Commercial Vehicle Co. Ltd. sold 8,687 vehicles
in October, taking the new joint venture's sales to 17,467 units
since its establishment in August.
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).
GENMAR HOLDINGS: Irwin Jacobs No Longer Chairman & CEO
------------------------------------------------------
Genmar Holding Chief Restructuring Officer disclosed that Irwin L.
Jacobs is no longer Chief Executive Officer of Genmar. In
addition, Mr. Jacobs has resigned as the Chairman of the Board and
as a director of Genmar. Mr. Jacobs began acquiring boat
businesses that led to the formation of Genmar over 30 years ago.
He has given a great deal to the Genmar organization and the
boating industry.
"Given the circumstances surrounding Genmar as it moves forward in
the sale of the Company's businesses and non-core assets in the
bankruptcy process and in light of Mr. Jacobs' public comments
regarding his desire to participate as the 'highest bidder' in the
auction process, this decision was made in the best interest of
all constituents. The separation will allow for Mr. Jacobs to
pursue objectives he may have relative to Genmar's asset sale
process in an effective and independent manner and eliminates
potential conflicts of interest," said Mark W. Sheffert, Chairman
and CEO of Manchester Companies, Inc. and Genmar's Chief
Restructuring Officer.
"Genmar intends to continue the auction process that is normal for
these types of bankruptcy cases and that is being overseen by the
bankruptcy court," Mr. Sheffert said.
Genmar's auction process is being conducted by Houlihan, Lokey,
Howard & Zukin Capital, Inc., Genmar's investment bankers.
Parties interested in participating in the auction process should
contact Houlihan, Lokey, Howard & Zukin, Capital, Inc. to request
information on the process. On Wednesday November 4, 2009, the
Bankruptcy Court approved the grant by Genmar of certain
exclusivity and expense reimbursement rights to an unnamed bidder
not affiliated with Mr. Jacobs or Genmar.
About Genmar Holdings
Pulaski, Wisconsin-based Carver Italia, LLC, and its affiliates,
including Genmar Holdings, Inc. -- http://www.genmar.com/--
is the world's second-largest manufacturer of fiberglass
powerboats. It generated $460 million in annual revenue making
boats using brand names including Carver, Four Winns, Glastron,
Larson, and Wellcraft.
Genmar and an affiliate filed for Chapter 11 bankruptcy protection
on June 1, 2009 (Bankr. D. Minn. Case No. 09-33773, and 09-43537).
James L. Baillie, Esq., and Ryan Murphy, Esq., at Fredrikson &
Byron, PA, assist the Debtors in their restructuring efforts.
Carver Italia listed $10 million to $50 million in assets and
$100 million to $500 million in debts.
Manchester Companies, Inc. was named Chief Restructuring Officer
of Genmar and approved by the Bankruptcy Court in June and has
been managing the company's restructuring process since then.
GENMAR HOLDINGS: Has Plan Exclusivity Until Jan. 31
---------------------------------------------------
Genmar Holdings Inc. reached an agreement with the Official
Committee of Unsecured Creditors on an extension until Jan. 31 of
the exclusive right to propose a plan, Bill Rochelle at Bloomberg
reported.
At a Nov. 16 hearing, Genmar will ask for authorization to sell a
former plant in Culver, Oregon, for $31,800.
Pulaski, Wisconsin-based Carver Italia, LLC, and its affiliates,
including Genmar Holdings, Inc. -- http://www.genmar.com/--
is the world's second-largest manufacturer of fiberglass
powerboats. It generated $460 million in annual revenue making
boats using brand names including Carver, Four Winns, Glastron,
Larson, and Wellcraft.
Genmar and an affiliate filed for Chapter 11 bankruptcy protection
on June 1, 2009 (Bankr. D. Minn. Case No. 09-33773, and 09-43537).
James L. Baillie, Esq., and Ryan Murphy, Esq., at Fredrikson &
Byron, PA, assist the Debtors in their restructuring efforts.
Carver Italia listed $10 million to $50 million in assets and
$100 million to $500 million in debts.
GEORGIA GULF: Earns $230 Million in Third Quarter
-------------------------------------------------
Georgia Gulf Corporation disclosed Wednesday financial results for
its third quarter ended September 30, 2009.
Georgia Gulf reported net sales of $556.3 million for the third
quarter of 2009 compared to net sales of $818.6 million for the
third quarter of 2008. The Company attributed the decrease in
sales to lower prices resulting from lower feedstock and energy
costs partially offset by higher volumes compared to the third
quarter of 2008, which was impacted by two gulf coast hurricanes.
Georgia Gulf reported net income of $230.2 million for the third
quarter of 2009, compared to a net loss of $17.4 million during
the same quarter in the previous year. In the third quarter of
2009, Georgia Gulf successfully exchanged $736 million of its
outstanding notes for 1.3 million shares of its common stock and
30.2 million shares of its convertible preferred stock. The debt
exchange resulted in a $400.8 million pre-tax gain.
The Company reported operating income of $38.6 million for the
third quarter of 2009, compared to operating income of
$14.2 million for the third quarter of 2008. The third quarter of
2009 includes a pre-tax net benefit of $1.8 million primarily
resulting from credit adjustments to true up restructuring costs
booked in prior quarters. The third quarter of 2008 includes a
pre-tax asset impairment and restructuring charge of $3.7 million.
Excluding these items, operating income for the third quarter of
2009 was $36.8 million compared to operating income of
$17.9 million in the third quarter of 2008.
"Our results for the quarter reflect our successful efforts to
match our cost structure to the market," commented Paul Carrico,
Georgia Gulf's president and chief executive officer. "We
generated stronger operating income compared to both the same
quarter last year and the second quarter of 2009 despite a
dramatic decline in caustic soda prices and continued softness in
building and construction markets. Completing the debt-for-equity
exchange reduced our debt by more than 50 percent and reduced our
annual cash interest costs by nearly $70 million, and our long-
term bank amendment provides adjusted covenants until the end of
2011."
Liquidity
The Company said that as of September 30, 2009, it had
$168.4 million of liquidity, consisting of $28.3 million of cash
on hand as well as $140.1 million of borrowing capacity available
under its revolving credit facility.
Balance Sheets
As of September 30, 2009, the Company's consolidated balance
sheets showed $1.561 billion in total assets, $1.041 billion in
total liabilities, and $520 million in total shareholders' equity.
A full-text copy of the Company's consolidated financial
statements for the three months ended September 30, 2009, is
available for free at http://researcharchives.com/t/s?48ef
About Georgia Gulf
Georgia Gulf Corporation (NYSE: GGC) is an integrated North
American manufacturer of two chemical lines, chlorovinyls and
aromatics, and manufactures vinyl-based building and home
improvement products. The Company's vinyl-based building and home
improvement products, marketed under Royal Group brands, include
window and door profiles, mouldings, siding, pipe and pipe
fittings, and deck, fence and rail products.
* * *
On March 31, 2009, the Company commenced private exchange offers
for its outstanding 7.125 percent senior notes due 2013,
9.5 percent senior notes due 2014, and 10.75 percent senior
subordinated notes due 2016.
As of the year ended December 31, 2008, there was uncertainty
about the Company's ability to continue as a going concern. This
arose because in connection with the above described private
exchange offers, the Company withheld about $38.0 million in
aggregate interest on the 2013 notes, the 2014 notes and the 2016
notes, which constituted defaults under the related indentures.
On August 10, 2009, the Company disclosed in a regulatory filing
that with the completion of its debt for equity exchange offers
and a long-term amendment to its senior secured facility the
factors that gave rise to the uncertainty about the Company's
ability to continue as a going concern have been remediated.
This concludes the Troubled Company Reporter's coverage of Georgia
Gulf Corporation until facts and circumstances, if any, emerge
that demonstrate financial or operational strain or difficulty at
a level sufficient to warrant renewed coverage.
GLASSLINE PARTNERSHIP: Sec. 341 Meeting Set for December 7
----------------------------------------------------------
The U.S. Trustee for Region 7 will convene a meeting of Glassline
Partnership Ltd's creditors on December 7, 2009, at 11:00 a.m. at
Houston, 515 Rusk Suite 3401.
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.
Houston, Texas-based Glassline Partnership Ltd. filed for Chapter
11 bankruptcy protection on November 2, 2009 (Bankr. S.D. Tex.
Case No. 09-38397). Matthew Hoffman, Esq., at Law Offices of
Matthew Hoffman, p.c., 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.
GLASSLINE PARTNERSHIP: Wants Matthew Hoffman as Bankr. Counsel
--------------------------------------------------------------
Glassline Partnership Ltd. has sought the permission of the U.S.
Bankruptcy Court for the Southern District of Texas to employ
Mathew Hoffman at the Law Offices of Matthew Hoffman, p.c., as
bankruptcy counsel.
LOMH will, among other things:
(a) conduct appropriate examinations of witnesses, claimants,
and other parties in interest;
(b) prepare appropriate pleadings and other legal instruments
required to be filed in the case;
(c) represent the Debtor in all proceedings before the Court
and in any other judicial or administrative proceedings
in which the rights of the Debtor or the estate may be
affected;
(d) represent and advise the Debtor in the liquidation of its
assets through the bankruptcy court; and
(e) advise the Debtor with the formulation, solicitation,
confirmation and consummation of any plan(s) of
reorganization which the Debtor may propose.
Mr. Hoffman, a principal at LOMH, says that the firm will be paid
based on the hourly rates of its professionals:
Professional Rate
------------ ----
Matthew Hoffman $240
James C. Lee, Associate $115
Paralegals $60
Clerks $40
Mr. Hoffman assures the Court that he doesn't have interests
adverse to the interest of the Debtors' estates or of any class of
creditors and equity security holders. According to the Debtor,
the LOMH is a "disinterested person" as the term is defined under
Section 101(14) of the Bankruptcy Code.
Mr. Hoffman says that Craftsman is its non-debtor, affiliated
company and has asked the Court to rule whether LOMH is able to
proceed as counsel for the Debtor. The Debtor and its sister
company, Glass Wholesalers Ltd. dba Craftsman Fabricated Glass
Ltd. are creditors of each other. The Debtor owes $400,000 to
Craftsman for glass fabrication on a building and improved real
property owned by the Debtor, while Craftsman owes money to the
Debtor pursuant to a real estate lease of the building and
improved real estate. LOMH has represented Craftsman in its
workout efforts since June 2009, but the law firm is now being
tapped to represent the Debtor.
Mr. Hoffman says that the Law Office of David M. Smith, who has
been representing the Debtor pre-petition, is ready, willing, and
able to substitute the Debtor's counsel should that be necessary
or appropriate.
Houston, Texas-based Glassline Partnership Ltd filed for Chapter
11 bankruptcy protection on November 2, 2009 (Bankr. S.D. Tex.
Case No. 09-38397). Matthew Hoffman, Esq., at Law Offices of
Matthew Hoffman, p.c., 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.
GREDE FOUNDRIES: To Operate Under New Ownership by End of 2009
--------------------------------------------------------------
Grede Foundries chairman Richard Koenings said that the company
will be under new ownership by the end of the calendar year if
everything goes according to paln, Ken Leiviska at Reedsburg Time
Press.
The company, Mr. Leiviska says, has requested the federal
bankruptcy court to approve a timeline for auction of the company
by the middle of November, which includes the auction's end by
early December and a closed deal by Dec. 31, 2009.
Based in Reedsburg, Wisconsin, Grede Foundries, Inc. --
http://www.grede.com/-- produces ductile iron, grey iron and
specialty metal parts. The Company serves the automotive, heavy
truck, off-highway, diesel engine and industrial markets and is
one of the largest cast-iron foundry companies in the United
States.
The Company filed for Chapter 11 on June 30, 2009 (Bankr. W.D.
Wisc. Case No. 09-14337). Daryl L. Diesing, Esq., Jerard J.
Jensen, Esq., and Daniel J. McGarry, Esq., at Whyte Hirschboeck
Dudek S.C., represent the Debtor in its restructuring efforts.
The Debtor selected Conway Del Genio Gries & Co. as restructuring
advisor; Leverson & Metz S.C. as special counsel; and Kurtzman
Carson Consultants LLC as claims agent. The Debtor listed total
assets of $143,983,000 and total debts of $148,243,000.
GPX INT'L: Seeking Approval of Executive Bonuses
------------------------------------------------
GPX International Tire Corp. is awaiting a ruling from the
Bankruptcy Court on its proposed executive bonuses. According to
Bill Rochelle at Bloomberg, if the Bankruptcy Court goes along and
overrules objections from the U.S. Trustee, the chief executive
would qualify for a $1.25 million bonus while the chairman of the
board would be in line for $750,000. The chief financial officer
is proposed to receive $162,500. The executives would waive
deferred bonuses they weren't paid before the Chapter 11 filing on
Oct. 26 in Boston. Thirty-eight midlevel managers are to share a
bonus pool of as much as $400,000.
About GPX International
GPX International Tire Corporation is one of the largest
independent global providers of specialty "off-the-road" tires for
the agricultural, construction, materials handling and
transportation industries. GPX is a worldwide company,
headquartered in Malden, Massachusetts, with operations in North
America, China, Canada, and Germany. A third generation family-
owned business, GPX and its predecessor companies have been in
business since 1922.
GPX International filed for Chapter 11 on Oct. 26, 2009 (Bankr. D.
Mass. Case No.: 09-20170). GPX is represented in U.S. Bankruptcy
Court by attorneys Harry Murphy of Hanify & King, P.C. and Peggy
Farrell of Hinckley Allen & Snyder LLP as corporate counsel. TM
Capital Corp. serves as investment banker to GPX in connection
with these transactions and Argus Management Corporation serves as
restructuring advisor to GPX. The petition says assets and debts
range from $100 million to $500 million.
GREEKTOWN HOLDINGS: Gets Nod to Hire Fine Point as Consultant
-------------------------------------------------------------
Greektown Holdings LLC and its units obtained the Court's
authority to expand the scope of services of Fine Point Group,
their gaming consultant, to include all actions required to be
taken in connection with their bankruptcy cases, including without
limitation:
-- actions in furtherance of the efforts of the Debtors and
third party proponents to present, prosecute and confirm
plans of reorganization;
-- the participation in discovery by deposition or production
of documents of the Consultant and its personnel, the
Debtors and others, whether by subpoena, other process or
otherwise;
-- efforts, if any, in connection with the development of
financial statements, projections and valuations in
connection with the confirmation process; and
-- the provision of testimony in these bankruptcy proceedings.
The Debtors will reimburse FPG for necessary expenses incurred
and FPG will be indemnified for any expense incurred in
connection with the contemplated services. Moreover, any amount
reimbursed to FPG or expended to indemnify FPG will be treated as
"restructuring expenses" for the purposes of FPG's right to
receive a success fee.
About Greektown Casino
Based in Detroit, Michigan, Greektown Holdings, LLC, and its
affiliates -- http://www.greektowncasino.com/-- operates
world-class casino gaming facilities located in Detroit's
historic Greektown district featuring more than 75,000 square
feet of casino gaming space with more than 2,400 slot machines,
over 70 tables games, a 12,500-square foot salon dedicated to
high limit gaming and the largest live poker room in the
metropolitan Detroit gaming market. Greektown Casino employs
approximately 1,971 employees, and estimates that it attracts
over 15,800 patrons each day, many of whom make regular visits to
its casino complex and related properties. In 2007, Greektown
Casino achieved a 25.6% market share of the metropolitan Detroit
gaming market. Greektown Casino has also been rated as the "Best
Casino in Michigan" and "Best Casino in Detroit" numerous times
in annual readers' polls in Detroit's two largest newspapers.
The Company and seven of its affiliates filed for Chapter 11
protection on May 29, 2008 (Bankr. E.D. Mich. Lead Case No.
08-53104). Daniel J. Weiner, Esq., Michael E. Baum, Esq., and
Ryan D. Heilman, Esq., at Schafer and Weiner PLLC, represent the
Debtors in their restructuring efforts. Judy B. Calton, Esq., at
Honigman Miller Schwartz and Cohn LLP, represents the Debtors as
their special counsel. The Debtors chose Conway MacKenzie &
Dunleavy as their financial advisor, and Kurtzman Carson
Consultants LLC as claims, noticing, and balloting agent. Clark
Hill PLC serves as counsel to the Official Committee of Unsecured
Creditors.
Greektown Holdings listed assets and debts of $100 million to
$500 million in its bankruptcy petition.
Bankruptcy Creditors' Service, Inc., publishes Greektown Casino
Bankruptcy News. The newsletter tracks the Chapter 11
proceedings undertaken by Greektown Casino and its various
affiliates. (http://bankrupt.com/newsstand/or 215/945-7000)
GREEKTOWN HOLDINGS: Hires Deloitte FAS as Accountant
----------------------------------------------------
Greektown Holdings LLC and its units sought and obtained the
Court's authority to employ Deloitte Financial Services Advisory
LLP as valuation services provider for fresh start accounting nunc
pro tunc to October 12, 2009.
As previously reported, the Debtors filed a joint Chapter 11 Plan
of Reorganization with Merrill Lynch Capital Corporation which
contemplates the formation of a publicly held limited liability
company to hold the interests in the reorganized Debtors.
According to Daniel J. Weiner, Esq., at Schafer and Weiner PLLC,
in Bloomfield Hills, Michigan, to attain public company status,
the reorganized Debtors must satisfy certain federal reporting
requirements, including the disclosure of their assets and
liabilities. He adds that the reorganized Debtors are also
required to record the effects of the Joint Plan and revalue
their assets and liabilities as of the date of their
confirmation at fair value for reporting purposes in conformance
with the Statement of Financial Accounting Standards No. 141(R)
known as "Fresh Start Accounting."
The Debtors chose to retain Deloitte FAS because of the firm's
strong national reputation, the in-depth knowledge of its
professionals, and the extensive experience of its professionals
in providing reorganization and restructuring services to debtors
and creditors in sophisticated and complex restructuring and
distressed situations in numerous industries, Mr. Weiner says.
As accountants to the Debtors, Deloitte FAS will perform these
services:
-- assist the Debtors with their identification of tangible
and intangible assets as well as liabilities to be
revaluated their fair value for fresh start accounting
purposes;
-- analyze fair value estimates or other valuations performed
by others, if any, and assist the Debtors in identifying
additional efforts required to address open items;
-- assist the Debtors with their estimate of the fair value
of specific assets and liabilities as specified by
management of the Debtors, including performing valuations
of certain assets and liabilities or the identification of
new intangibles;
-- advise the Debtors as they assign assets, including,
without limitation, goodwill, and liabilities to reporting
units;
-- advise the Debtors as they prepare accounting information
and disclosures in support of public and/or private
financial filings like l0-K's and l0-Q's or lender
statements;
-- assist the Debtors with other valuation matters as they
deem necessary for financial reporting disclosures;
-- advise the Debtors as they evaluate existing internal
controls or develops new controls for fresh start
accounting implementation; and
-- assist the Debtors with their responses to questions or
other requests from their external auditors regarding
bankruptcy accounting and reporting matters.
The Debtors will pay for Deloitte FAS' service at these hourly
rates:
Partner/Principal/Director $560
Senior Manager $460
Manager $380
Senior Associate $280
Associate $230
The Debtors will also reimburse Deloitte FAS for all reasonable
expenses incurred in connection with performing the contemplated
services.
Jill Voigt, a principal of Deloitte FAS, assures the Court that
her firm is a "disinterested person" as the term is defined under
Section 101(14) of the Bankruptcy Code.
The Office of the United States Trustee also gave its consent to
the Application.
About Greektown Casino
Based in Detroit, Michigan, Greektown Holdings, LLC, and its
affiliates -- http://www.greektowncasino.com/-- operates
world-class casino gaming facilities located in Detroit's
historic Greektown district featuring more than 75,000 square
feet of casino gaming space with more than 2,400 slot machines,
over 70 tables games, a 12,500-square foot salon dedicated to
high limit gaming and the largest live poker room in the
metropolitan Detroit gaming market. Greektown Casino employs
approximately 1,971 employees, and estimates that it attracts
over 15,800 patrons each day, many of whom make regular visits to
its casino complex and related properties. In 2007, Greektown
Casino achieved a 25.6% market share of the metropolitan Detroit
gaming market. Greektown Casino has also been rated as the "Best
Casino in Michigan" and "Best Casino in Detroit" numerous times
in annual readers' polls in Detroit's two largest newspapers.
The Company and seven of its affiliates filed for Chapter 11
protection on May 29, 2008 (Bankr. E.D. Mich. Lead Case No.
08-53104). Daniel J. Weiner, Esq., Michael E. Baum, Esq., and
Ryan D. Heilman, Esq., at Schafer and Weiner PLLC, represent the
Debtors in their restructuring efforts. Judy B. Calton, Esq., at
Honigman Miller Schwartz and Cohn LLP, represents the Debtors as
their special counsel. The Debtors chose Conway MacKenzie &
Dunleavy as their financial advisor, and Kurtzman Carson
Consultants LLC as claims, noticing, and balloting agent. Clark
Hill PLC serves as counsel to the Official Committee of Unsecured
Creditors.
Greektown Holdings listed assets and debts of $100 million to
$500 million in its bankruptcy petition.
Bankruptcy Creditors' Service, Inc., publishes Greektown Casino
Bankruptcy News. The newsletter tracks the Chapter 11
proceedings undertaken by Greektown Casino and its various
affiliates. (http://bankrupt.com/newsstand/or 215/945-7000)
GREEKTOWN HOLDINGS: Panel Gets Debtor OK, Court Nod on Edelman
--------------------------------------------------------------
Greektown Holdings LLC previously objected to the Official
Committee of Unsecured Creditors' application to retain Charles
S. Edelman LLC as valuation consultant and expert witness.
Subsequently, the Debtors and the Committee entered into a
stipulation pursuant to which they agreed that the Edelman
Application will be approved and the Committee will file a
supplement to the Application if it decides to continue retaining
Edelman beyond the three months asked by the Committee for
Edelman's services.
Pursuant to the Stipulation, the Court approved the Committee's A
Application for the Edelman employment.
The Committee tells the Court that it needs the assistance of
Edelman LLC to:
-- evaluate the Debtors' enterprise value and appropriate
capital structure;
-- assess valuation issues and options concerning the Debtors'
Plan and Luna Greektown LLC's Alternative Plan;
-- provide testimony in court and in depositions, if
necessary; and
-- provide any other service the Committee and Edelman LLC
mutually deem to be necessary and appropriate.
The Committee proposes that Edelman LLC be paid for the
additional service $150,000 per month for a minimum of three
months. The firm will also be reimbursed for its actual and
necessary out-of-pocket business expenses related to the
engagement.
About Greektown Casino
Based in Detroit, Michigan, Greektown Holdings, LLC, and its
affiliates -- http://www.greektowncasino.com/-- operates
world-class casino gaming facilities located in Detroit's
historic Greektown district featuring more than 75,000 square
feet of casino gaming space with more than 2,400 slot machines,
over 70 tables games, a 12,500-square foot salon dedicated to
high limit gaming and the largest live poker room in the
metropolitan Detroit gaming market. Greektown Casino employs
approximately 1,971 employees, and estimates that it attracts
over 15,800 patrons each day, many of whom make regular visits to
its casino complex and related properties. In 2007, Greektown
Casino achieved a 25.6% market share of the metropolitan Detroit
gaming market. Greektown Casino has also been rated as the "Best
Casino in Michigan" and "Best Casino in Detroit" numerous times
in annual readers' polls in Detroit's two largest newspapers.
The Company and seven of its affiliates filed for Chapter 11
protection on May 29, 2008 (Bankr. E.D. Mich. Lead Case No.
08-53104). Daniel J. Weiner, Esq., Michael E. Baum, Esq., and
Ryan D. Heilman, Esq., at Schafer and Weiner PLLC, represent the
Debtors in their restructuring efforts. Judy B. Calton, Esq., at
Honigman Miller Schwartz and Cohn LLP, represents the Debtors as
their special counsel. The Debtors chose Conway MacKenzie &
Dunleavy as their financial advisor, and Kurtzman Carson
Consultants LLC as claims, noticing, and balloting agent. Clark
Hill PLC serves as counsel to the Official Committee of Unsecured
Creditors.
Greektown Holdings listed assets and debts of $100 million to
$500 million in its bankruptcy petition.
Bankruptcy Creditors' Service, Inc., publishes Greektown Casino
Bankruptcy News. The newsletter tracks the Chapter 11
proceedings undertaken by Greektown Casino and its various
affiliates. (http://bankrupt.com/newsstand/or 215/945-7000)
GREYSTONE PHARMACEUTICALS: Sec. 341 Meeting Set for December 11
---------------------------------------------------------------
The U.S. Trustee for Region 8 will convene a meeting of Greystone
Pharmaceuticals, Inc.'s creditors on December 7, 2009, at 2:30
p.m. at Room 175, Memphis, Tennessee.
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.
Fort Myers, Florida-based Greystone Pharmaceuticals, Inc. -- aka
Greystone Medical, Inc., and Greystone Medical Group, Inc. --
operates a pharmaceutical company. The Company filed for Chapter
11 bankruptcy protection on November 2, 2009 (Bankr. W.D. Tenn.
Case No. 09-32236). John L. Ryder, Esq., who has an office in
Memphis, Tennessee, assists the Company in its restructuring
efforts. The Company listed in its bankruptcy petition
$10,000,001 to $50,000,000 in assets and $10,000,001 to
$50,000,000 in liabilities. According to the schedules, the
Company has assets of $25,467,546, and scheduled debts of
$22,601,150.
GTC BIOTHERAPEUTICS: Discloses Retention Plan Awards to Execs
-------------------------------------------------------------
GTC Biotherapeutics, Inc., filed with the Securities and Exchange
Commission a Schedule of Retention Plan Awards to Named Executive
Officers.
According to John B. Green, the Company's Senior Vice President,
Treasurer and Chief Financial Officer, the purpose of the GTC
Biotherapeutics, Inc. 2008 Retention Incentive Plan was to
encourage the continued employment of several key personnel,
including executive officers, through the grant of equity awards
and other payments conditioned on continued employment with GTC.
"As originally adopted in June 2008, the Retention Plan included
awards of restricted stock units, which have now fully vested as
of June 2009, and awards payable in cash or stock as of March 31,
2010. After reviewing the Retention Plan and the risks to our
business with its original terms in light of our recent
restructuring and our current stock price, the Compensation
Committee of our Board of Directors determined that the plan was
no longer providing the retention incentives originally
contemplated and that it needed to be modified to minimize the
risk of losing valuable employees," Mr. Green said.
"In exercising its discretion in administering the Retention Plan,
the Compensation Committee determined that the awards scheduled to
be paid to employees on March 31, 2010 should be paid in cash at
revised amounts designed, in combination with the stock component
previously received by plan participants, to provide a meaningful
level of retention incentive. Eligible participants besides our
executive officers continue to include Vice Presidents, Senior
Directors, Directors and Associate Directors. As provided in the
original Retention Plan, if we terminate a participant's
employment without cause prior to March 31, 2010, the participant
will be entitled to receive his or her retention payment within 30
days following the date of termination of employment."
These cash payments will be made to GTC's named executive officers
under the GTC Biotherapeutics 2008 Retention Incentive Plan after
March 31, 2010, or upon earlier termination of their employment by
GTC:
Retention Payment
to be made after
Named Executive Officer March 31, 2010
----------------------- -----------------
Geoffrey F. Cox 94,000
John B. Green 44,000
Harry M. Meade 44,000
Richard Scotland 44,000
Daniel S. Woloshen 44,000
Headquartered in Framingham, Massachusetts, GTC Biotherapeutics,
Inc. (NASDAQ: GTCB) -- http://www.gtc-bio.com/-- develops,
supplies, and commercializes therapeutic proteins produced through
transgenic animal technology. The Company is also developing a
portfolio of recombinant human plasma proteins with known
therapeutic properties. The company also has a monoclonal
antibody portfolio focused on follow-on biologics, including a
CD20 monoclonal antibody. The intellectual property of the
company includes a patent in the United States through 2021 for
the production of any therapeutic protein in the milk of any
transgenic mammal. Its transgenic production platform is
particularly well suited to enabling cost effective development of
proteins that are difficult to express in traditional recombinant
production systems as well as proteins that are required in large
volumes.
GTC BIOTHERAPEUTICS: Reports $5.1 Million Net Loss for Q3 2009
--------------------------------------------------------------
GTC Biotherapeutics, Inc.'s total net loss for the third quarter
ended September 27, 2009, was $5.1 million, or $0.48 per share,
compared with $6.1 million, or $0.59 per share, in the third
quarter of 2008. The total net loss for the first nine months of
2009 was $26.2 million, or $2.51 per share, compared to
$16.5 million, or $1.71 per share, for the first nine months of
2008.
Revenues were approximately $700,000 for the current quarter,
compared to approximately $2.9 million in the third quarter 2008.
Third quarter revenues in 2009 were primarily from the sale of
ATryn(R) product to Lundbeck Inc. The revenues in the third
quarter 2008 were primarily from GTC's program with PharmAthene
for services provided for their Protexia(R) product and from the
completion of GTC's production program for Merrimack
Pharmaceuticals for their MM-093 product.
Revenues for the first nine months of 2009 totaled $1.6 million
compared to $15.6 million in the first nine months of 2008. The
revenues in the first nine months of 2009 were primarily due to
the sale of ATryn(R) product to Lundbeck Inc. and services
provided to PharmAthene for their Protexia(R) product. Revenues
for the first nine months of 2008 were primarily due to the sale
of ATryn(R) product to LEO as well as revenue derived from the
Merrimack and PharmAthene programs.
As of September 27, 2009, the Company had $23.4 million in total
assets against $63.1 million in total liabilities, and
($10.4) million in total redeemable convertible preferred stock,
resulting in $29.2 million in stockholders' deficit.
LFB Transaction
On November 2, 2009, the Company entered into a Stock Purchase
Agreement with LFB Biotechnologies S.A.S., its principal
stockholder, under which the Company agreed to issue to LFB
$3.625 million in shares of the Company's common stock at a sales
price of $1.07, which is equal to the closing price of the common
stock on the Nasdaq Capital Market on Friday, October 30, 2009.
The closing is subject to customary closing conditions, including
the accuracy of the representations and warranties of the parties,
and is expected to occur on November 5, 2009.
On October 31, 2009, LFB notified the Company that it was
exercising its option to purchase the $12.75 million of additional
shares of Series E convertible preferred stock under the terms
described in the financing agreements approved by the Company's
shareholders in July 2009. This transaction will provide the
Company with approximately $6.38 million of new cash proceeds. In
addition, LFB converted its existing shares of Series E
convertible preferred stock it previously purchased in July into a
total of approximately 10.6 million shares of common stock.
Upon completion of the conversion of the convertible preferred
stock and the exercise of its option to purchase additional shares
of Series E Preferred Stock, and upon completion of sale of the
additional shares of the Company's common stock, LFB will own:
16,000,835 shares of the Company's common stock and 115 shares of
the Company's Series D preferred stock, each share of which is
convertible into 100 shares of the Company's common stock, 6,000
shares of the Company's Series E-1 10% convertible preferred
stock, convertible into 2,281,368 shares of the Company's common
stock, and 6,750 shares of the Company's Series E-2 10%
convertible preferred stock, convertible into 3,017,703 shares of
the Company's common stock. Assuming exercise of a warrant for
2,319,354 shares and conversion of a convertible note convertible
into 4,838,710 shares of common stock, LFB will then beneficially
own, on an as-converted basis, 28,469,471 shares, or approximately
77.1%, of the Company's common stock.
"The financing completed earlier [last] week with LFB
Biotechnologies is an important step in strengthening GTC's
financial position and in working towards the objective of meeting
NASDAQ's compliance requirements. It is also an important
demonstration of LFB's commitment to GTC's technology and
products," stated Geoffrey F. Cox, Ph.D., GTC's Chairman and Chief
Executive Officer. "Moving forward, we are focusing on our key
programs, ATryn(R) and Factor VIIa. We will progress our other
portfolio programs as we have partnering revenues to support them.
We are also taking the opportunity to prudently and appropriately
restructure our organization to meet the requirements of these key
programs and maximize the impact of our cash resources including a
reduction in our work force from 154 to 109 people. These changes
are expected to provide savings of $5-6 million on an annualized
basis."
Going Concern
GTC noted it has incurred losses from operations and negative
operating cash flow since inception and has an accumulated deficit
of roughly $328 million at September 27, 2009. "Our recurring
losses from operations and limited funds raise substantial doubt
about our ability to continue as a going concern," GTC said.
"Our primary sources of additional capital raised have been equity
financings and debt financings. Management expects that future
sources of funding will include sales of equity or debt securities
and new or expanded partnering arrangements. Our failure to raise
capital as and when needed has had a negative impact on our
financial condition and our ability to pursue our business
strategies. If no funds are available we would have to sell or
liquidate the business. If adequate funds do not become available
we may be required to take further steps to delay, reduce the
scope of or eliminate our research and development programs,
reduce our planned commercialization efforts, or obtain funds
through arrangements with collaborators or others that may require
us to relinquish rights to certain product candidates that we
might otherwise seek to develop or commercialize independently.
Additionally, any future equity funding will dilute ownership of
our current equity investors," GTC said.
"Based on our cash balance as of September 27, 2009, as well as
the $10 million in cash we received from the closing of the LFB
financing transactions in November 2009 and potential cash
receipts from existing programs, we anticipate that we have the
ability to continue our operations into the middle of the first
quarter of 2010, including normal recurring debt service payments.
We are currently engaged in discussions for potential new
partnering transactions and plan to bring further financial
resources into GTC in the future through some combination of
partnering transactions and other debt or equity financing
arrangements. However, there can be no assurance that we will be
able to enter into anticipated partnering-arrangements, or raise
additional capital, on terms that are acceptable to us, or at
all."
A full-text copy of the Company's quarterly report on Form 10-Q is
available at no charge at http://ResearchArchives.com/t/s?48f4
A full-text copy of the Company's earnings release is available at
no charge at http://ResearchArchives.com/t/s?48f5
About GTC Biotherapeutics
Headquartered in Framingham, Massachusetts, GTC Biotherapeutics,
Inc. (NASDAQ: GTCB) -- http://www.gtc-bio.com/-- develops,
supplies, and commercializes therapeutic proteins produced through
transgenic animal technology. The Company is also developing a
portfolio of recombinant human plasma proteins with known
therapeutic properties. The company also has a monoclonal
antibody portfolio focused on follow-on biologics, including a
CD20 monoclonal antibody. The intellectual property of the
company includes a patent in the United States through 2021 for
the production of any therapeutic protein in the milk of any
transgenic mammal. Its transgenic production platform is
particularly well suited to enabling cost effective development of
proteins that are difficult to express in traditional recombinant
production systems as well as proteins that are required in large
volumes.
HAWAIIAN TELCOM: J. Trost Acts as Mediator for Creditors Dispute
----------------------------------------------------------------
Counsel to the Official Committee of Unsecured Creditors,
Christopher J. Muzzi, Esq., at Moseley Biehl Tsugawa Lau & Muzzi,
LLC, in Honolulu, Hawaii, noted that the hearing to consider
confirmation of Hawaiian TelCom Communications Inc.'s Amended
Joint Plan of Reorganization has been set to begin on November 9,
2009. At this time, it is anticipated that the confirmation
hearing will be contested, he said. Moreover, there is a pending
adversary proceeding between Lehman Commercial Paper, Inc., as
agent for the Prepetition Lenders, and the Creditors Committee,
wherein the Committee asserts that there remain certain unresolved
claims.
As of October 13, 2009, the Debtors, Lehman and the Committee
have been unable to resolve their disputes, according to Mr.
Muzzi.
Thus, at the Court's suggestion, Lehman Commercial and the
Committee have agreed that the assistance of a third-party may
assist them in attempting to resolve their disputes. They
conceded that it is in the best interest of the Debtors' estates
and their creditors to mediate these disputes to reach an
agreement resulting in a consensual plan of reorganization, so as
to avoid the costs and uncertainties associated with a contested
confirmation hearing, including the attorneys' fees and costs
that may be incurred.
Accordingly, Lehman Commercial and the Committee stipulated for
the appointment of J. Ronald Trost, Esq., at partner at Vinson &
Elkins LLP, as mediator effective October 5, 2009. Judge King
subsequently approved the parties' stipulation.
The Mediator will be paid by the Debtors at the rate of $995 per
hour. The Debtors will also pay for the Mediator's expenses,
which may include fees for counsel assistance. The fees and
expenses of the Mediator will be subject to review by the Court.
Mr. Trost has informed the Court that he has no conflicts of
interest and has agreed to mediate in the matter among the
Debtors, Lehman Commercial and the Committee.
Subsequently, Mr. Trost filed a report on October 30, 2009,
informing the Court that the mediation has been concluded and the
parties did not fully resolve their differences. The Adversary
Proceeding or dispute regarding the Plan is thus returned to the
Court for further disposition.
About Hawaiian Telcom
Based in Honolulu, Hawaii, Hawaiian Telcom Communications, Inc.
-- http://www.hawaiiantel.com/-- operates a telecommunications
company, which offers an array of telecommunications products and
services including local and long distance service, high-speed
Internet, wireless services, and print directory and Internet
directory services.
The Company and seven of its affiliates filed for Chapter 11
protection on December 1, 2008 (Bankr. D. Del. Lead Case No.
08-13086). As reported by the TCR on December 30, 2008, Judge
Peter Walsh of the U.S. Bankruptcy Court for the District of
Delaware approved the transfer of the Chapter 11 cases to the U.S.
Bankruptcy Court for the District of Hawaii before Judge Lloyd
King (Bankr. D. Hawaii Lead Case No. 08-02005).
Richard M. Cieri, Esq., Paul M. Basta, Esq., and Christopher J.
Marcus, Esq., at Kirkland & Ellis LLP, represent the Debtors in
their restructuring efforts. The Debtors proposed Lazard Freres &
Co. LLC as investment banker; Zolfo Cooper Management LLC as
business advisor; Deloitte & Touche LLP as independent auditors;
and Kurztman Carson Consultants LLC as notice and claims agent.
An official committee of unsecured creditors has been appointed
and is represented by Christopher J. Muzzi, Esq., at Moseley Biehl
Tsugawa Lau & Muzzi LLC, in Honolulu, Hawaii.
When the Debtors filed for protection from their creditors, they
listed total assets of $1,352,000,000 and total debts of
$1,269,000,000 as of September 30, 2008.
Bankruptcy Creditors' Service, Inc., publishes Hawaiian Telcom
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by Hawaiian Telcom Communications, Inc., and seven of
its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000)
HAWAIIAN TELCOM: Proposes to Assume Xerox Corp Agreement
--------------------------------------------------------
In January 2006, Hawaiian Telcom Communications Inc. and Xerox
Corporation entered into Managed Services Agreement No. 7025179,
together with certain Managed Services Orders, Statements of Work,
and Services and Solutions Summaries pertaining to the MSA. The
Original Xerox Agreement pertains to the provision of document
management services by Xerox to Debtor Hawaiian Telcom, Inc.
By this motion, the Debtors seek the Court's authority to assume
and amend the Original Xerox Agreement.
Upon assumption of the Original Xerox Agreement, the Debtors and
Xerox propose to amend the Agreement effective October 1, 2009.
The Amended Xerox Agreement will consist of the MSA together
with:
-- Managed Services Order No. 7025179-001,
-- Services and Solutions Summary under Managed Services Order
No. 7025179-001, and
-- Statement of Work Addendum 7025179.
Moreover, to accommodate certain changes in the Debtors'
operations, the Amended Xerox Agreement provides for certain
reductions in the services and equipment to be made available by
Xerox.
Under the Original Xerox Agreement, the Debtors owe Xerox
$57,879. Pursuant to the Amended Xerox Agreement, Xerox has
agreed to waive payment of the $57,879 Cure Amount and any other
prepetition claims it may have against the Debtors' estates;
provided that the Debtors will pay any taxes that are to be paid
either by the Debtors and Xerox under the Original Xerox
Agreement.
In a supporting declaration, Robert F. Reich, senior vice
president, chief financial officer, and treasurer of the Debtors,
assert that the equipment and services to be provided under the
Amended Xerox Agreement are essential for the Debtors'
operations. The Debtors add that the Amended Xerox Agreement
contains terms more favorable to them.
About Hawaiian Telcom
Based in Honolulu, Hawaii, Hawaiian Telcom Communications, Inc.
-- http://www.hawaiiantel.com/-- operates a telecommunications
company, which offers an array of telecommunications products and
services including local and long distance service, high-speed
Internet, wireless services, and print directory and Internet
directory services.
The Company and seven of its affiliates filed for Chapter 11
protection on December 1, 2008 (Bankr. D. Del. Lead Case No.
08-13086). As reported by the TCR on December 30, 2008, Judge
Peter Walsh of the U.S. Bankruptcy Court for the District of
Delaware approved the transfer of the Chapter 11 cases to the U.S.
Bankruptcy Court for the District of Hawaii before Judge Lloyd
King (Bankr. D. Hawaii Lead Case No. 08-02005).
Richard M. Cieri, Esq., Paul M. Basta, Esq., and Christopher J.
Marcus, Esq., at Kirkland & Ellis LLP, represent the Debtors in
their restructuring efforts. The Debtors proposed Lazard Freres &
Co. LLC as investment banker; Zolfo Cooper Management LLC as
business advisor; Deloitte & Touche LLP as independent auditors;
and Kurztman Carson Consultants LLC as notice and claims agent.
An official committee of unsecured creditors has been appointed
and is represented by Christopher J. Muzzi, Esq., at Moseley Biehl
Tsugawa Lau & Muzzi LLC, in Honolulu, Hawaii.
When the Debtors filed for protection from their creditors, they
listed total assets of $1,352,000,000 and total debts of
$1,269,000,000 as of September 30, 2008.
Bankruptcy Creditors' Service, Inc., publishes Hawaiian Telcom
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by Hawaiian Telcom Communications, Inc., and seven of
its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000)
HAWAIIAN TELCOM: Seek Cash Collateral Access Thru December
----------------------------------------------------------
Hawaiian Telcom Communications Inc. and its units ask the Court
for permission to continue to use the cash collateral of their
Prepetition Lenders, on a consensual basis, through and including
December 31, 2009.
Pursuant to the Fourth Cash Collateral Extension Order, the
Debtors are authorized to access to the Cash Collateral through
October 31, 2009.
The Debtors inform the Court that they continue to provide these
forms of adequate protection to the Prepetition Lenders:
* adequate protection payments of an amount equal to interest
at the non-default rate on $300 million of outstanding
prepetition secured obligations owing to the Prepetition
Parties;
* payment of the Prepetition Lenders' fees and expenses,
including professionals' fees and expenses;
* replacement liens on the Prepetition Lenders' prepetition
collateral;
* a superpriority administrative expense claim under Section
507(b) of the Bankruptcy Code with respect to all of the
adequate protection obligations;
* weekly updates of cash receipts and disbursements;
* updated weekly 13-week cash flows; and
* numerous termination events.
Theodore D.C. Young, Esq., at Cades Schutte LLP, in Honolulu,
Hawaii, insisted that the current form of adequate protection
continues to be appropriate given the circumstances in the
Debtors' Chapter 11 cases.
Mr. Young assures the Court that the Debtors continue to meet
their liquidity needs and will continue to meet those needs for
the duration of their Chapter 11 cases and upon emergence
notwithstanding the continued payments to the Prepetition Lenders
under the current adequate protection package.
Committee Objects
Christopher J. Muzzi, Esq., at Moseley Biehl Tsugawa Lau & Muzzi,
LLLC, in Honolulu, Hawaii, relates that Committee professionals
sought payment of the holdback amount in their second interim fee
applications covering the period from April to June 2009. The
fees consist of amounts incurred by the Committee's defense of an
adversary proceeding commenced by Lehman Commercial Paper, Inc.,
as administrative agent for the Prepetition Lenders, seeking a
finding as to the extent and priority of their liens. Lehman
Commercial objected to the Fee Applications arguing that payment
of the Litigation Holdback would be inconsistent with the Court's
Final Cash Collateral Order entered January 16, 2009. The Cash
Collateral Order provides for the existence of a $200,000 cap on
the amount of cash collateral that can be used to pay the allowed
fees and expenses of Committee professionals incurred directly in
connection with investigating the Prepetition Lenders' liens and
claims, Mr. Muzzi reminds the Court. The Cash Collateral Order,
he adds, provides that no cash collateral may be used by the
Committee to object or raise any defense to the validity of the
Prepetition Lenders' liens and claims. It is inequitable,
however, to enforce these limitations in light of the fact that
it was Lehman Commercial that initiated the Adversary Proceeding
against the Committee, Mr. Muzzi argues.
Moreover, the Debtors' Amended Joint Plan of Reorganization
estimates the value of the unencumbered assets at $33.1 million
and estimates that all administrative and priority claims will be
no more than $20 million, Mr. Muzzi points out. Thus, even at
the Debtors' low valuation of the unencumbered assets, those
assets are more than sufficient to pay the fees and expenses
incurred by the Committee's professionals related to the
Adversary Proceeding, he asserts. "There is no question that the
Committee's professionals will be entitled to payment of these
fees, only a question of whether the Committee's professionals
should be forced to wait until the effective date of the Plan."
Thus, the Committee asks the Court to rule that any extension of
the Debtors' right to the continued use of Cash Collateral be
conditioned on the clarification that fees and expenses of the
Committee's professionals related to the Adversary Proceeding
will be paid by the Debtors and charged against the unencumbered
assets.
Pursuant to minutes of a hearing held on October 29, 2009,
counsel to the parties are attempting to arrive at a resolution
of another agreement to extend the Debtors' Cash Collateral use
through January 15, 2010. Judge King will convene a hearing to
consider the Cash Collateral Motion on January 14, 2010. The
Debtors' counsel, Christopher J. Marcus, Esq., at Kirkland &
Ellis LLP, in New York, has yet to submit a proposed order with
respect to the Cash Collateral Motion.
About Hawaiian Telcom
Based in Honolulu, Hawaii, Hawaiian Telcom Communications, Inc.
-- http://www.hawaiiantel.com/-- operates a telecommunications
company, which offers an array of telecommunications products and
services including local and long distance service, high-speed
Internet, wireless services, and print directory and Internet
directory services.
The Company and seven of its affiliates filed for Chapter 11
protection on December 1, 2008 (Bankr. D. Del. Lead Case No.
08-13086). As reported by the TCR on December 30, 2008, Judge
Peter Walsh of the U.S. Bankruptcy Court for the District of
Delaware approved the transfer of the Chapter 11 cases to the U.S.
Bankruptcy Court for the District of Hawaii before Judge Lloyd
King (Bankr. D. Hawaii Lead Case No. 08-02005).
Richard M. Cieri, Esq., Paul M. Basta, Esq., and Christopher J.
Marcus, Esq., at Kirkland & Ellis LLP, represent the Debtors in
their restructuring efforts. The Debtors proposed Lazard Freres &
Co. LLC as investment banker; Zolfo Cooper Management LLC as
business advisor; Deloitte & Touche LLP as independent auditors;
and Kurztman Carson Consultants LLC as notice and claims agent.
An official committee of unsecured creditors has been appointed
and is represented by Christopher J. Muzzi, Esq., at Moseley Biehl
Tsugawa Lau & Muzzi LLC, in Honolulu, Hawaii.
When the Debtors filed for protection from their creditors, they
listed total assets of $1,352,000,000 and total debts of
$1,269,000,000 as of September 30, 2008.
Bankruptcy Creditors' Service, Inc., publishes Hawaiian Telcom
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by Hawaiian Telcom Communications, Inc., and seven of
its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000)
HEARTHSTONE RANCH II: Files Bare-Bones Chapter 11 Petition
----------------------------------------------------------
Hearthstone Ranch II LLC, owner of a development in Stanislaus
County, California, filed a bare-bones Chapter 11 petition. The
property is claimed to be worth $10.5 million. Creditors are owed
$11.6 million, including $3.4 million to secured creditors.
The Company filed for Chapter 11 on November 43 n Modesto (Bankr.
E.D. Calif. Case No. 09-93573). Hilton A. Ryder, Esq., in Fresno,
Calif., represents the Debtor in its restructuring effort.
HIGH ROCK HOLDING: Case Summary & 5 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: High Rock Holding, LLC
2205 Arrowhead Drive
Carson City, NV 89706
Case No.: 09-53989
Chapter 11 Petition Date: November 8, 2009
Court: United States Bankruptcy Court
District of Nevada (Reno)
Judge: Gregg W. Zive
Debtor's Counsel: Kenneth D. Sisco, Esq.
Sisco& Naramore
2180 Reservoir Drive
NA, CA
Tel: (714) 265 7766
Fax: (714) 265 7518
Email: skend1@earthlink.net
Estimated Assets: $10,000,001 to $50,000,000
Estimated Debts: $10,000,001 to $50,000,000
The petition was signed by Rolland P. Weddell, the company's
manager.
Debtor's List of 5 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Blackstone Realty Pending Fraud/Breach Unknown
Investors, LLC of Contract Lawsuit
134 Lakes Blvd
Dayton, NV 89403
Randy Soule Loan $1,500,000
16640 Wedge Parkway
Reno, NV 89511
Rolland P. Weddell Unsecured Note- $15,000,000
2205 Arrowhead Drive Originally Held
Carson City, NV 89706 By Bank of America
Rolland P. Weddell Promissory Note- $4,250,000
2205 Arrowhead Drive Related to Assumption
Carson City, NV 89706 of Debt Owed
To Blackstone
TEC Engineering Engineering Services $500
c/o Paul A. Matteoni, Esq.
HORIZON FINANCIAL: Receives NASDAQ Non-Compliance Notice
--------------------------------------------------------
Horizon Financial Corp. on November 9 reported it has been
contacted by the Nasdaq Stock Market regarding its listing status
under Marketplace Rule 5450(a)(1) because its securities have not
maintained a minimum bid price of $1.00 per share for 30
consecutive business days.
On November 6, 2009, the Company received a notice from the Nasdaq
Stock Market stating that the Company's common stock is subject to
delisting from The Nasdaq Global Select Market. Under Rule
5810(c)(3)(A), the Company has a grace period of 180 days in which
to regain compliance. If at any time from the date of this
notification until May 5, 2010 the bid price of the Company's
shares closes at $1.00 per share or more for a minimum of 10
consecutive business days, NASDAQ will provide the Company written
confirmation of compliance. If the Company does not regain
compliance by May 5, 2010, NASDAQ will provide written
notification to the Company that the Company's common stock will
be delisted. At that time, the Company may appeal NASDAQ's
delisting determination to a Nasdaq Listing Qualifications Panel.
Alternately, the Company could apply to transfer its common stock
to The Nasdaq Capital Market prior to that date if it satisfies
all of the requirements, other than the minimum bid price
requirement, for initial listing on The Nasdaq Capital Market set
forth in Marketplace Rule 5505. If the Company were to elect to
apply for such transfer and if it satisfies the applicable
requirements and its application is approved, the Company would
have an additional 180 days to regain compliance with the minimum
bid price rule while listed on The Nasdaq Capital Market.
Horizon Financial Corp. is a $1.30 billion, bank holding company
headquartered in Bellingham, Washington. Its primary subsidiary,
Horizon Bank, maintains a regional banking presence that has been
serving customers for 87 years, and operates 18 full-service
offices, four commercial loan centers and four real estate loan
centers throughout Whatcom, Skagit, Snohomish and Pierce Counties
in Washington.
IDEARC INC: Reports Net Income of $101 Million in Third Quarter
---------------------------------------------------------------
Idearc, Inc., reported net income of $101 million for the three
months ended September 30, 2009, compared with net income of
$73 million in the same period of 2008.
Operating revenue of $611 million for the three months ended
September 30, 2009, decreased $124 million, or 16.9%, compared to
$735 million for the three months ended September 30, 2008.
Revenue from print products decreased $116 million as a result of
reduced advertiser renewals, partially offset by the addition of
new advertisers and revenue from new product offerings. Internet
revenu8e decrease $7 million primarily driven by declines in fixed
advertising and weaker economi conditions.
Operating income of $186 million during the three months ended
September 30, 2009, decreased $93 million, or 33.3%, compared to
$279 million for the three months ended September 30, 2008.
Interest expense, net of interest income, of ($3) million for the
three months ended September 30, 2009, decreased $165 million
compared to $162 million for the three months ended September 30,
2008. Since the bankruptcy filing date, interest associated with
the Company's debt and interest rate swap agreements is not being
accrued.
For the nine months ended September 30, 2009, the Company reported
$-0- net income, compared with net income of $260 million in the
same period last year.
Operating revenue of $1.936 billion for the nine months ended
September 30, 2009, decreased $328 million, or 14.5%, compared to
$2.264 billion for the nine months ended September 30, 2008.
Balance Sheets
At September 30, 2009, the Company's consolidated balance sheets
showed $1.927 million in total assets and $10.325 billion in total
liabilities, resulting in a $8.398 billion total shareholders'
deficit.
A full-text copy of the Company's consolidated financial
statements for the three months ended September 30, 2009, is
available for free at http://researcharchives.com/t/s?48f8
Liquidity and Capital Resources
Net cash from operations of $436 million for the nine months ended
September 30, 2009, increased $59 million compared to the nine
months ended September 30, 2008. This increase was the result of
reduced interest payments on debt associated with the bankruptcy
filings, partially offset by increased income tax payments and
lower collections associated with declines in revenue.
In April 2009, the Company made a pre-petition obligation adequacy
protection payment to the agent of secured lenders under the
Company's senior secured credit facilities of $250 million, of
which $62 million represented interest payments and is reflected
in operating activities. The remaining $188 million represented
secured debt principal payments and is reflected in financing
activities.
Net cash used in financing activities of $188 million for the nine
months ended September 30, 2009, increased $102 million compared
to $86 million for the nine months ended September 30, 2008. This
increase is primarily due to the portion of the pre-petition
obligation adequacy protection payment which represented debt
principal of $188 million compared to prior year transactions for
debt principal payments of $36 million and dividend payments of
$50 million.
Update on Chapter 11 Bankruptcy
As reported by the TCR on September 11, 2009, the U.S. Bankruptcy
Court for the Northern District of Texas, Dallas Division, has
approved the disclosure statement filed in connection with
Idearc's proposed first amended joint plan of reorganization and
has authorized Idearc to begin the process for soliciting approval
from eligible creditors for the Plan. With these developments,
Idearc is positioned to emerge from Chapter 11 protection before
year end.
The Bankruptcy Court has set the voting deadline for 6:00 p.m.
(CST) on November 13, 2009. The hearing at which the Bankruptcy
Court will consider confirmation of the Plan is scheduled to
commence on December 9, 2009.
Idearc expects to emerge from its reorganization process with an
appropriate capital structure to support its future strategic
business plans and objectives. Under the proposed Plan, the
Company's total debt will be reduced from approximately $9 billion
to approximately $2.75 billion of secured bank debt, with the
remainder of the Company's current bank debt and bonds converted
to new equity. Upon emergence from Chapter 11, the Company will
have a cash balance of approximately $150 million.
Upon confirmation of the Plan, current holders of Idearc's common
stock will not receive any distributions following emergence and
their equity interests will be cancelled and have no value once
the Plan becomes effective.
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.
INTERSTATE HOTELS: Posts $10.3 Million Net Loss in Q3 2009
----------------------------------------------------------
Interstate Hotels & Resorts reported last week operating results
for the third quarter ended September 30, 2009.
Highlights for the third quarter and through November 4, 2009,
include:
-- Extended senior secured credit facility to March 2012;
-- Common stock resumed trading on the NYSE effective July 29,
2009;
-- Added 10 properties to third-party management portfolio,
including first hotel in India, the new-build Four Points by
Sheraton in Jaipur;
-- Secured mortgage financing for Westin Atlanta Airport;
-- Signed purchase and sale agreement to sell wholly owned
Hilton Garden Inn Baton Rouge; IHR to retain management of
hotel with new ownership.
"The hotel business climate continued to be among the most
challenging the industry has ever experienced," said Thomas F.
Hewitt, chairman and chief executive officer. "Shrinking
corporate travel budgets continue to impact hotel performance,
despite some offset from price-motivated leisure travel this
summer."
"Throughout this downturn, we have continued to focus on growth in
third party management contracts, cost containment, preservation
of capital and maintaining liquidity. We have made significant
progress with our capital structure by extending the maturity of
our debt and taking the necessary steps to meet our first
amortization payment hurdle ahead of schedule."
The Company reported a net loss of $10.3 million on total revenue
of $162.9 million for the three months ended September 30, 2009,
compared with a net loss of $1.4 millionon total revenue of
$192.2 million in the the same period last year.
Lodging revenue decreased 14.3% to $19.2 million during the three
months ended September 30, 2009. The decrease of $3.2 million
compared with the same period in 2008 was primarily due to the
significant decrease in revenue per available room of 14.7% for
the Company's wholly-owned portfolio.
Management fee revenue dereased $2.2 million, or 21.1%, to
$8.2 million during the three months ended September 30, 2009,
when compared to the same period in 2008.
Other revenue from managed properties, which represents the
payroll and related costs, and certain other costs of the hotel's
operations that are contractually reimbursed to the Company by the
hotels owners, decreased $23.3 million, or 15.0%, to
$132.1 million during the three months ended September 30, 2009.
Balance Sheet
At September 30, 2009, the Company's consolidated balance sheets
showed $456.2 million in total assets, $311.8 million in total
liabilities, and $144.4 million in shareholders' equity.
The Company reported current assets of $64.0 million and current
liabilities of $85.4 million at September 30, 2009, resulting in a
$21.4 million working capital deficit.
A full-text copy of the Company's consolidated financial
statements for the three months ended September 30, 2009, is
available for free at http://researcharchives.com/t/s?4905
On September 30, 2009, Interstate had:
-- Total unrestricted cash of $20.9 million.
-- Total debt of $244.4 million, consisting of $161.9 million of
senior debt and $82.5 million of non-recourse mortgage debt.
Early in the quarter, the company extended the maturity of its
senior credit facility to March 2012 by converting the facility's
then outstanding balance of $161.2 million to a new term loan.
The agreement also provides the company with an $8 million
revolving line of credit. With that extension, the company is
required to make a $20 million amortization payment by March 2010
and another $20 million amortization payment by March 2011.
"As of today, we have made $25 million of our required $40 million
amortization payments on our senior secured credit facility," said
Bruce Riggins, chief financial officer. "On October 28, we
successfully completed mortgage financing for our Westin Atlanta
Airport hotel with a five-year, $22 million mortgage from PB
Capital Corporation, carrying an interest rate of LIBOR plus 500
basis points and a LIBOR floor of 200 basis points, with interest
only payable for the first two years. We used the net proceeds to
pay down our senior credit facility, which satisfies the initial
amortization requirement well ahead of schedule.
"We also executed a purchase and sale agreement for the sale of
our wholly owned Hilton Garden Inn Baton Rouge to a fund managed
by Fairwood Capital LLC and expect the transaction to close in
November. We will continue to manage the hotel and proceeds from
the sale will be used to pay down the senior credit facility. By
the close of the fourth quarter, we expect to have paid down
approximately $35 million of the $40 million required by March
2011."
Going Concern Doubt
The Company states that the report from its independent registered
public accounting firm, KPMG LLP, included in the Company's Form
10-K for the year ended December 31, 2008, included an explanatory
paragraph expressing substantial doubt about the Company's
ability to continue as a going concern due to potential credit
facility covenant violations.
In July 2009, the Company successfully amended the terms of the
its Credit Facility which, among other things, eliminated the NYSE
listing requirement, eliminated the total leverage ratio debt
covenant and extended the maturity of its debt from March 2010 to
March 2012.
About Interstate Hotels & Resorts
Based in Arlington, Virginia, Interstate Hotels & Resorts
(NYSE: IHR) -- http://www.ihrco.com/-- has ownership interests in
56 hotels and resorts, including seven wholly owned assets.
Including those properties, the company and its affiliates manage
a total of 228 hospitality properties with more than 46,000 rooms
in 37 states, the District of Columbia, Russia, India, Mexico,
Belgium, Canada and Ireland. Interstate Hotels & Resorts also has
contracts to manage 13 to be built hospitality properties with
approximately 3,000 rooms.
* * *
As reported by the Troubled Company Reporter on March 18, 2009,
Moody's Investors Service downgraded the ratings of Interstate
Hotels & Resorts (corporate family rating to Caa1 from B2) and
Interstate Operating Company, L.P. (senior secured debt to Caa1
from B2). The ratings were placed on review for possible
downgrade.
JCB INC: Voluntary Chapter 11 Case Summary
------------------------------------------
Debtor: JCB, Inc.
dba Superior Maintenance Co.
707 Westchester Avenue, Suite 409
White Plains, NY 10604
Bankruptcy Case No.: 09-24104
Chapter 11 Petition Date: November 9, 2009
Court: United States Bankruptcy Court
Southern District of New York (White Plains)
Debtor's Counsel: Arlene Gordon-Oliver, Esq.
Rattet, Pasternak & Gordon-Oliver, LLP
550 Mamaroneck Avenue, Suite 510
Harrison, NY 10528
Tel: (914) 381-7400
Fax: (914) 381-7406
Email: ago@rattetlaw.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 Richard Bross, president of the
Company.
JEFFERSON COUNTY: To Use JPMorgan Settlement for Reserve
--------------------------------------------------------
Jefferson County, Alabama, plans to use the $50 million it
receives from JPMorgan Chase & Co. as part of a settlement of a
federal probe into derivative sales, to bolster budget reserves
and reinstate a 40-hour work week for employees, Kathleen Edwards
at Bloomberg News reported.
According to the report, Jefferson County will put $22 million
into a reserve fund and another $15 million into an escrow account
for a potential refund of revenue collected from a disputed
occupational tax, said commission president Bettye Fine Collins.
Another $2.5 million per month will be used to boost employees'
salaries so that working weeks can be extended from 32 hours
beginning Nov.21. The balance will remain in the general fund,
she said.
As reported by the TCR on Nov. 6, 2009, the Securities and
Exchange Commission announced that J.P. Morgan Securities Inc. and
two of its former managing directors have settled charges an
unlawful payment scheme that enabled them to win business
involving municipal bond offerings and swap agreement transactions
with Jefferson County. J.P. Morgan has agreed to pay a penalty of
$25 million to the SEC, make a payment of $50 million to Jefferson
County, and forfeit more than $647 million in claimed termination
fees.
The SEC alleges that J.P. Morgan Securities and former managing
directors Charles LeCroy and Douglas MacFaddin made more than
$8 million in undisclosed payments to close friends of certain
Jefferson County commissioners. The friends owned or worked at
local broker-dealer firms that performed no known services on the
transactions. In connection with the payments, the county
commissioners voted to select J.P. Morgan Securities as managing
underwriter of the bond offerings and its affiliated bank as swap
provider for the transactions.
About Jefferson County
Jefferson County has its seat in Birmingham, Alabama. It has a
population of 660,000. It ended its 2006 fiscal year with a
$42.6 million general fund balance, according to Standard &
Poor's. The Birmingham firm of Bradley Arant Rose & White,
represents Jefferson County. Porter, White & Co. in Birmingham is
the county's financial adviser. A bankruptcy by Jefferson County
stands to be the largest municipal bankruptcy in U.S. history. It
could beat the record of $1.7 billion, set by Orange County,
California in 1994.
As reported by the TCR on July 24, 2009, Moody's Investors Service
has affirmed the Caa3 rating and negative outlook on Jefferson
County's (Alabama) outstanding $3.2 billion sewer revenue bonds.
Moody's underlying Caa3 rating reflects the likelihood of eventual
repayment by the county of principal, irrespective of outside
enhancement through bond insurance. It does not reflect the
claims paying ability of Syncora, which is rated Ca and failed to
fulfill its obligation to make a July 1 Bank Bond principal
payment.
KANE AND HORAH LAND: Case Summary & 2 Largest Unsecured Creditors
-----------------------------------------------------------------
Debtor: Kane and Horah Land Company, LLC
dba Pleasant Town Company, LLC
462 N. Taylor
Saint Louis, MO 63108
Bankruptcy Case No.: 09-51376
Chapter 11 Petition Date: November 9, 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
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/moeb09-51376.pdf
The petition was signed by Richard Kalina.
KENTUCKY PROCESSING: U.S. Trustee Can Charge Quarterly Fee
----------------------------------------------------------
Bill Rochelle at Bloomberg News reports that Judge Joseph M. Hood
of the U.S. District Court for the Eastern District of Kentucky
ruled that quarterly fees are payable to the U.S. Trustee even if
the bankrupt estate made no disbursements in the quarter. Judge
Hood concluded that the governing statute was plain on its face.
Hood quoted the law as saying the "fee shall be paid" in every
quarter "in which disbursements total less than $15,000."
A bankruptcy judge had ruled that the federal statute obligating a
Chapter 11 debtor whose case has not been closed, converted or
dismissed to pay, as a quarterly fee to the United States Trustee
(UST), the sum of $325 for "each quarter in which disbursements
total less than $15,000" did not obligate the debtor to pay any
fee for quarters in which there were no disbursements. Regardless
of whether the plural term "disbursements" was interpreted to
include the singular, the statute authorized imposition of fee
only for quarters in which there were either plural
"disbursements" or at least one singular "disbursement," not in
which the disbursements were zero, which was neither singular nor
plural, and any "total[ing]" of which would be an exercise in
futility. In re Kentucky Processing Co., --- B.R. ----, 2009 WL
1883969 (Bankr. E.D. Ky.).
Kentucky Processing Company sought Chapter 11 protection (Bankr.
E.D. Ky. Case No. 98-52437) on September 25, 1998. Unsuccessful
in its efforts to formulate a plan of reorganization, the debtor
filed a liquidating chapter 11 plan that provided for the sale of
its assets by auction. That plan was confirmed by the bankruptcy
court on May 31, 2001.
LEAR CORP: Final Fee Applications Due December 24
-------------------------------------------------
Lear Corp. and its units notified all entities, including
individuals, partnerships, corporations, estates, trusts and
governmental units, as defined in Section 101(15) of the
Bankruptcy Code, requesting payment of cure amounts in connection
with contracts assumed as part of the reorganization, to file a
request for payment of cure amounts.
Requests for payment of Cure, together with accompanying
documentation, must be filed with the Bankruptcy Court and the
original delivered by first-class mail, overnight delivery or
hand delivery so as to be received no later than the Cure Bar
Date, to this address:
Lear Claims Processing Center
c/o Kurtzman Carson Consultants LLC
2335 Alaska Avenue, El Segundo
California 90245
The Debtors note that all requests for payment of Cure that are
not timely filed may be disallowed automatically and forever
barred from assertion and will not be enforceable against the
Debtors, their Estates, the Reorganized Debtors, and their
properties and interests, without the need for any objection by
the Debtors or further notice to or action, order, or approval of
the Bankruptcy Court. Any Claim for Cure will be deemed fully
satisfied, released, and discharged, notwithstanding anything
included in the Schedules or in any Proof of Claim to the
contrary. However, nothing will prevent the applicable Debtors,
their Estates, the Reorganized Debtors, and their properties and
interests from paying any Cure despite the failure of the
relevant counterparty to file that request for payment of that
Cure. The Debtors also may settle any Cure without further
notice to or action, order, or approval of the Bankruptcy Court.
In addition, on or before December 24, 2009:
(a) any retained professional or other entity asserting a
Professional Compensation and Reimbursement Claim for
services rendered before the Confirmation Date, or any
member of the official committee of the unsecured
creditors with respect to its reimbursable expenses, must
file an application for final allowance of those claims or
expense reimbursement; and
(b) any entity that requests compensation or expense
reimbursement for making a substantial contribution in the
Chapter 11 cases pursuant to Sections 503(b)(3), (4) and
(5) of the Bankruptcy Code must file an application for
that requested compensation.
Each Final Fee Application and application regarding substantial
contribution, together with proof of service, must be filed with
the Bankruptcy Court and served on the Debtors and other entities
who are designated by the Bankruptcy Rules or other order of the
Bankruptcy Court.
About Lear Corp.
Lear Corporation -- http://www.lear.com/-- is one of the world's
leading suppliers of automotive seating systems, electrical
distribution systems and electronic products. The Company's
products are designed, engineered and manufactured by a diverse
team of 80,000 employees at 210 facilities in 36 countries.
Lear's headquarters are in Southfield, Michigan, and Lear is
traded on the New York Stock Exchange under the symbol [LEA].
Outside the United States, Lear has subsidiaries in Germany,
Luxembourg, Sweden, Singapore, China, India and Mexico, among
others.
Lear Corporation and its affiliates filed for Chapter 11 on
July 7, 2009 (Bankr. S.D.N.Y. Case No. 09-14326). Attorneys at
Kirkland & Ellis LLP, served as the Debtors' bankruptcy counsel.
McCarthy Tetrault LLP was engaged as CCAA counsel. Bodman LLP has
been hired as special Michigan counsel. Winston & Strawn LLP and
Brooks Kushman P.C. have also been tapped as special counsel.
Alvarez & Marsal North America, LLC, is the Debtors' restructuring
advisors. Ernst & Young LLP is the Debtors' auditors and tax
advisors. Kurtzman Carson Consultants LLC served as the Debtors'
claims and notice agent.
Bankruptcy Creditors' Service, Inc., publishes Lear Bankruptcy
News. The newsletter tracks the Chapter 11 proceedings undertaken
by Lear Corp. (http://bankrupt.com/newsstand/or 215/945-7000)
Lear Corporation announced November 9 that it has successfully
emerged from its court-supervised financial reorganization with a
strong and flexible balance sheet, positive operating results in
the Third Quarter, a growing sales backlog and a robust
competitive profile.
LEAR CORP: Reports $24.6-Mil. Net Income for Third Quarter
----------------------------------------------------------
On November 9, 2009, Lear Corporation and its subsidiaries filed
with the U.S. Securities and Exchange Commission their financial
results for the quarter ended October 3, 2009. A full-text copy
of Lear's 3rd Quarter Financial Results is available for free at:
http://ResearchArchives.com/t/s?48ec
Lear Corporation and Subsidiaries
Condensed Consolidated Balance Sheet
As of October 3, 2009
ASSETS
Current Assets:
Cash and cash equivalents $1,771,300,000
Accounts receivable 1,647,800,000
Inventories 452,300,000
Other 299,600,000
--------------
Total current assets 4,171,000,000
Long-term Assets:
Property, plant and equipment, net 1,075,200,000
Goodwill, net 1,511,600,000
Other 472,500,000
--------------
Total long-term assets 3,059,300,000
--------------
TOTAL ASSETS $7,230,300,000
==============
LIABILITIES AND EQUITY(DEFICIT)
Current Liabilities:
Short-term borrowings $31,200,000
Debtor-in-possession loan 500,000,000
Prepetition primary credit facility 0
Accounts payable and drafts 1,636,200,000
Accrued liabilities 857,600,000
Current portion of long-term debt 4,200,000
--------------
Total current liabilities 3,029,200,000
Long-Term Liabilities:
Long-term debt 8,200,000
Other 641,000,000
--------------
Total long-term liabilities 649,200,000
--------------
Liabilities Subject to Compromise 3,611,200,000
EQUITY (DEFICIT):
Common stock 800,000
Additional paid-in capital 1,372,400,000
Common stock held in treasury (170,100,000)
Retained deficit (1,232,000,000)
Accumulated other comprehensive loss (77,500,000)
--------------
Lear Corporation stockholders' equity(deficit) (106,400,000)
Noncontrolling interests 47,100,000
--------------
Equity (deficit) (59,300,000)
--------------
TOTAL LIABILITIES AND EQUITY(DEFICIT) $7,230,300,000
==============
Lear Corporation and Subsidiaries
Condensed Consolidated Statement of Operations
Three Months Ended October 3, 2009
Net Sales $2,547,900,000
Cost of sales 2,314,300,000
Selling, general and administrative expenses 98,200,000
Interest expense 21,500,000
Other (income) expense, net 25,900,000
--------------
Consolidated income(loss) before provision
for income taxes 49,400,000
Provision for income taxes 19,100,000
--------------
Consolidated net income (loss) 30,300,000
Less: Net income attributable to non-
controlling interests 5,700,000
--------------
Net income (loss) attributable to Lear $24,600,000
==============
Lear Corporation and Subsidiaries
Condensed Consolidated Statement of Cash Flows
Nine Months Ended October 3, 2009
Cash Flows from Operating Activities:
Consolidated net income (loss) ($400,900,000)
Adjustments to reconcile consolidated income
(loss) to net cash provided by (used in)
operating activities:
Depreciation and amortization 199,300,000
Reorganization items, net 38,600,000
Net change in recoverable customer
engineering and tooling (3,400,000)
Net change in working capital items 56,100,000
Net change in sold accounts receivable (138,500,000)
Other, net 6,200,000
--------------
Net cash provided by (used in) operating
activities (242,600,000)
--------------
Cash Flows from Investing Activities:
Additions to property, plant and equipment (62,700,000)
Other, net 22,600,000
--------------
Net cash used in investing activities (40,100,000)
--------------
Cash Flows from Financing Activities:
Debtor-in-possession term loan borrowings 500,000,000
Primary credit facility repayments, net 0
Senior note repayments 0
Other long-term debt repayments, net (200,000)
Short-term debt repayments, net (10,500,000)
Payment of financing fees (57,900,000)
Repurchase of common stock 0
Dividends paid to noncontrolling interests (15,400,000)
Increase(decrease) in drafts 200,000
--------------
Net cash provided by financing activities 416,200,000
--------------
Effect of foreign currency translation 45,700,000
Net Change in Cash and Cash Equivalents 179,200,000
Cash and Cash Equiv. as of Beginning Period 1,592,100,000
--------------
Cash and Cash Equivalents as of End of Period $1,771,300,000
==============
About Lear Corp.
Lear Corporation -- http://www.lear.com/-- is one of the world's
leading suppliers of automotive seating systems, electrical
distribution systems and electronic products. The Company's
products are designed, engineered and manufactured by a diverse
team of 80,000 employees at 210 facilities in 36 countries.
Lear's headquarters are in Southfield, Michigan, and Lear is
traded on the New York Stock Exchange under the symbol [LEA].
Outside the United States, Lear has subsidiaries in Germany,
Luxembourg, Sweden, Singapore, China, India and Mexico, among
others.
Lear Corporation and its affiliates filed for Chapter 11 on
July 7, 2009 (Bankr. S.D.N.Y. Case No. 09-14326). Attorneys at
Kirkland & Ellis LLP, served as the Debtors' bankruptcy counsel.
McCarthy Tetrault LLP was engaged as CCAA counsel. Bodman LLP has
been hired as special Michigan counsel. Winston & Strawn LLP and
Brooks Kushman P.C. have also been tapped as special counsel.
Alvarez & Marsal North America, LLC, is the Debtors' restructuring
advisors. Ernst & Young LLP is the Debtors' auditors and tax
advisors. Kurtzman Carson Consultants LLC served as the Debtors'
claims and notice agent.
Bankruptcy Creditors' Service, Inc., publishes Lear Bankruptcy
News. The newsletter tracks the Chapter 11 proceedings undertaken
by Lear Corp. (http://bankrupt.com/newsstand/or 215/945-7000)
Lear Corporation announced November 9 that it has successfully
emerged from its court-supervised financial reorganization with a
strong and flexible balance sheet, positive operating results in
the Third Quarter, a growing sales backlog and a robust
competitive profile.
LEAR CORP: Registers New Common Stock with SEC
----------------------------------------------
Lear Corporation registered with the U.S. Securities and Exchange
Commission under Section 12(b) of the Securities Exchange Act of
1934, as amended, shares of common stock, par value $0.01 per
share, upon the effective date of their First Amended Joint Plan
of Reorganization.
Lear's common stock outstanding immediately prior to the
Effective Date has been cancelled pursuant to the terms of the
Plan. Lear will file an Amended and Restated Certificate of
Incorporation with the Secretary of State of the State of
Delaware. Pursuant to the Certificate, Lear is authorized to
issue 300,000,000 shares of Common Stock and 100,000,000 shares
of Preferred Stock, par value $0.01 per share. The Certificate
also provides that Lear will not issue any class of non-voting
equity securities unless, and solely to the extent, permitted by
Section 1123(a)(6) of the Bankruptcy Code. However, under the
Certificate, the restriction:
(i) will have no further force and effect beyond that
required under Section 1123(a)(6),
(ii) will have force and effect, if any, only for so long as
Section 1123(a)(6) is in effect and applicable to Lear,
and
(iii) may be amended or eliminated in accordance with
applicable law.
On the Effective Date and pursuant to the terms of the Plan, Lear
will issue (i) 34,117,369 shares of Common Stock, (ii) Warrants
to purchase up to an aggregate of 8,157,250 shares of Common
Stock, and (iii) 10,896,250 shares of Series A Convertible
Participating Preferred Stock, par value $0.01 per share. In
addition, Lear will adopt a management equity incentive plan
pursuant to which Lear may issue to participants in that plan up
to 10% of the shares of Common Stock outstanding as of the
Effective Date, on a fully-diluted basis, giving effect to the
conversion of all Warrants and Series A Preferred Stock (assuming
the issuance on the Effective Date of Series A Preferred Stock
with an aggregate value of $500 million).
Termination of Old Stock, Notes
The First Amended Joint Plan of Reorganization of Lear
Corporation and certain of its United States and Canadian
subsidiaries, as confirmed by an order of the United States
Bankruptcy Court for the Southern District of New York entered on
November 5, 2009, became effective on November 9. Pursuant to
the Plan, on the Effective Date all of the outstanding 8.50%
Senior Notes due 2013, 8.75% Senior Notes due 2016, 5.75% Senior
Notes due 2014, and Zero-Coupon Convertible Senior Notes due
2022, were canceled.
On the Effective Date, Lear issued new common stock, par value
$0.01 per share, and warrants to purchase the New Common Stock in
accordance with the Plan. Lear Corporation, but no Subsidiary
Guarantors, will have a remaining duty to file reports under
Section 13(a) or 15(d) with respect to the New Common Stock and
the Warrants.
Moreover, on the Effective Date:
(i) all equity securities of Lear issued and outstanding
immediately prior to the Effective Date were cancelled,
including:
(a) the common stock, par value $0.01 per share;
(b) the Series A Junior Participating Preferred Stock, par
value $0.01 per share; and
(c) the preferred share purchase rights; and
(ii) common stock, par value $0.01 per share, of Lear and
warrants to purchase the New Common Stock were issued for
distribution in accordance with the Plan.
Accordingly, Lear has filed registration statements on Form 8-A
to register the New Common Stock under Section 12(b) of the
Securities Exchange Act of 1934 and the Warrants under Section
12(g) of the Exchange Act.
About Lear Corp.
Lear Corporation -- http://www.lear.com/-- is one of the world's
leading suppliers of automotive seating systems, electrical
distribution systems and electronic products. The Company's
products are designed, engineered and manufactured by a diverse
team of 80,000 employees at 210 facilities in 36 countries.
Lear's headquarters are in Southfield, Michigan, and Lear is
traded on the New York Stock Exchange under the symbol [LEA].
Outside the United States, Lear has subsidiaries in Germany,
Luxembourg, Sweden, Singapore, China, India and Mexico, among
others.
Lear Corporation and its affiliates filed for Chapter 11 on
July 7, 2009 (Bankr. S.D.N.Y. Case No. 09-14326). Attorneys at
Kirkland & Ellis LLP, served as the Debtors' bankruptcy counsel.
McCarthy Tetrault LLP was engaged as CCAA counsel. Bodman LLP has
been hired as special Michigan counsel. Winston & Strawn LLP and
Brooks Kushman P.C. have also been tapped as special counsel.
Alvarez & Marsal North America, LLC, is the Debtors' restructuring
advisors. Ernst & Young LLP is the Debtors' auditors and tax
advisors. Kurtzman Carson Consultants LLC served as the Debtors'
claims and notice agent.
Bankruptcy Creditors' Service, Inc., publishes Lear Bankruptcy
News. The newsletter tracks the Chapter 11 proceedings undertaken
by Lear Corp. (http://bankrupt.com/newsstand/or 215/945-7000)
Lear Corporation announced November 9 that it has successfully
emerged from its court-supervised financial reorganization with a
strong and flexible balance sheet, positive operating results in
the Third Quarter, a growing sales backlog and a robust
competitive profile.
LEHMAN BROTHERS: Fannie Expects to Recover Part of $15.8BB Claim
----------------------------------------------------------------
Fannie Mae said in a regulatory filing with the Securities and
Exchange Commission that on September 22, 2009, it filed a proof
of claim as a creditor in the bankruptcy case of Lehman Brothers
Holdings, Inc. The claim of $8.9 billion included losses Fannie
Mae incurred in connection with the termination of its outstanding
derivatives contracts with a subsidiary of Lehman Brothers,
federal securities law claims related to Lehman Brothers private
label securities and notes held in Fannie Mae's cash and other
investments portfolio, losses arising under certain REMIC and
grantor trust transactions, and mortgage loan repurchase
obligations. A contingent claim of $6.9 billion was also
included, primarily relating to a large multifamily transaction.
"However, based on Lehman Brothers' financial condition, we
believe we will only receive a portion of these claims," Fannie
Mae said.
Meanwhile, in October, creditors sold $896 million in claims
against Lehman Brothers, according to data compiled from court
records by SecondMarket Inc., Bloomberg reported. Hedge funds,
proprietary trading desks, and broker dealers were buyers of 93%
of all claim trades reported in October. Almost 80% of all trades
of claims against bankrupt companies reported in October involved
claims exceeding $20 million, SecondMarket said. New York-based
SecondMarket describes itself as the largest secondary market for
illiquid assets.
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)
LEWIS EQUIPMENT: Principal Wants Creditor Suits Halted
------------------------------------------------------
According to Bill Rochelle at Bloomberg News, Lewis Equipment Co.
is asking the Bankruptcy Court to stay lawsuits against principal
Kyle Lewis. The Chapter 11 filing has stayed lawsuits against the
Company but not its officers.
The report relates that Kyle Lewis guaranteed company debt owing
to more than a dozen secured lenders. The Company wants the suits
halted for at least six months, so Lewis can devote his full
attention to running and reorganizing the business. Kyle Lewis,
according to court papers, received "millions of dollars in
prepetition transfers" from the company. If the guarantee suits
aren't halted, the Company will be forced to sue its own chief
executive. The Company wants Kyle Lewis's personal assets
preserved so a recovery from him can go first to the Company for
the benefit of all creditors.
An examiner was appointed to investigate whether the Dallas-based
company improperly dealt with secured lenders' collateral. The
lenders requesting the examiner were Fifth Third Bank and Wachovia
Financial Services Inc.
Grand Prairie, Texas-based Lewis Equipment Company, Inc., operates
a construction business. The Company and its affiliates filed for
Chapter 11 on Sept. 18, 2009 (Bankr. N.D. Tex. Case No. 09-45785
to 09-45814). Davor Rukavina, Esq., at Munsch, Hardt, Kopf & Harr
represents the Debtors in their restructuring efforts. In their
petition, the Debtors listed assets and debts both ranging from
$100,000,001 to $500,000,000.
LYONDELL CHEMICAL: Lenders and Creditors Headed to Mediation
------------------------------------------------------------
According to Bill Rochelle at Bloomberg News, Lyondell Chemical
Co. has a mediator who will attempt to bring settlement in a
lawsuit by the Official Committee of Unsecured Creditors against
the secured lenders that financed the 2007 leveraged buyout.
Unless mediator Myron Trepper can produce a compromise that opens
the door to a consensual Chapter 11 plan, the first phase of a
three-part trial on the committee's suit is scheduled to begin
Dec. 1.
The bankruptcy judge will only be told whether Mr. Trepper could
reach a settlement. In the absence of agreement, there will be no
finger-pointing and no disclosure of any offers made during
mediation.
Mr. Trepper, a New York bankruptcy lawyer, is to be given the
parties' experts' reports. Each party is to give Trepper a
double-space mediation statement not exceeding 15 pages,
exhibits included. Lyondell pays Trepper's costs.
The Creditors Committee has commenced a lawsuit against Citibank
N.A., Deutsche Bank, and other banks that funded the 2007
acquisition of Lyondell Chemical Company by Basell AF S.C.A.
Having accumulated heavy debt because of the merger,
LyondellBasell was in a full-blown liquidity crisis and was
running out of money to fund its operations only three months
following the merger. The Creditors Committee asserted claims of,
among other things, fraudulent transfer, breach of fiduciary duty,
avoidance of unperfected senior liens.
About Lyondell Chemical
LyondellBasell Industries is one of the world's largest polymers,
petrochemicals and fuels companies. It is the global leader in
polyolefins technology, production and marketing; a pioneer in
propylene oxide and derivatives; and a significant producer of
fuels and refined products, including biofuels. Through research
and development, LyondellBasell develops innovative materials and
technologies that deliver exceptional customer value and products
that improve quality of life for people around the world.
Headquartered in The Netherlands, LyondellBasell --
http://www.lyondellbasell.com/-- is privately owned by Access
Industries.
Basell AF and Lyondell Chemical Company merged operations in 2007
to form LyondellBasell Industries, the world's third largest
independent chemical company. LyondellBasell became saddled with
debt as part of the US$12.7 billion merger. On January 6, 2009,
LyondellBasell Industries' U.S. operations and one of its European
holding companies -- Basell Germany Holdings GmbH -- filed
voluntary petitions to reorganize under Chapter 11 of the U.S.
Bankruptcy Code to facilitate a restructuring of the company's
debts. The case is In re Lyondell Chemical Company, et al.,
Bankr. S.D.N.Y. Lead Case No. 09-10023). Seventy-nine Lyondell
entities, including Equistar Chemicals, LP, Lyondell Chemical
Company, Millennium Chemicals Inc., and Wyatt Industries, Inc.
filed for Chapter 11. In May 2009, one of the cases was dismissed
-- Case No. 09-10068 -- because it is duplicative of Case No. 09-
10040 relating to Debtor Glidden Latin America Holdings.
The Hon. Robert E. Gerber presides over the case. Deryck A.
Palmer, Esq., at Cadwalader, Wickersham & Taft LLP, in New York,
serves as the Debtors' bankruptcy counsel. Evercore Partners
serves as financial advisors, and Alix Partners and its subsidiary
AP Services LLC, serves as restructuring advisors. AlixPartners'
Kevin M. McShea acts as the Debtors' Chief Restructuring Officer.
Clifford Chance LLP serves as restructuring advisors to the
European entities. Lyondell Chemical estimated that consolidated
assets total US$27.12 billion and debts total US$19.34 billion as
of the bankruptcy filing date.
Lyondell has obtained approximately US$8 billion in DIP financing
to fund continuing operations. The DIP financing includes two
credit agreements: a US$6.5 billion term loan, which comprises a
US$3.25 billion in new loans and a US$3.25 billion roll-up of
existing loans; and a US$1.57 billion asset-backed lending
facility.
Luxembourg-based LyondellBasell Industries AF S.C.A. and another
affiliate were voluntarily added to Lyondell Chemical's
reorganization filing under Chapter 11 on April 24, 2009, in order
to seek protection against claims by certain financial and U.S.
trade creditors. On May 8, 2009, LyondellBasell Industries added
13 non-operating entities to Lyondell Chemical Company's
reorganization filing under Chapter 11 of the U.S. Bankruptcy
Code. All of the entities are U.S. companies and were added to
the original Chapter 11 filing for administrative purposes. The
filings will have no impact on current business or operations as
none of the entities manufactures or sells products.
Bankruptcy Creditors' Service, Inc., publishes Lyondell Bankruptcy
News. The newsletter tracks the Chapter 11 proceeding undertaken
by Lyondell Chemical Company and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
MAUI LAND: Posts $25.5 Million Net Loss in Q3 2009
--------------------------------------------------
Maui Land & Pineapple Company, Inc., reported recently its results
of operations for the quarter ended September 30, 2009.
The Company reported a net loss of $25.5 million or $3.17 per
share for the third quarter of 2009 compared to a net loss of
$8.7 million or $1.09 per share for the third quarter of 2008.
The loss for the third quarter of 2009 includes $22.8 million
equity in losses from the Company's investment in Kapalua Bay
Holdings, LLC, compared to $5.1 million income attributable to
this investment for the third quarter of 2008. Consolidated
revenues were $26.7 million for the third quarter of 2009,
compared to $19.1 million for the third quarter of 2008. Revenues
for the third quarter of 2009 include the sale of two properties
that resulted in revenues of $11.7 million.
For the first nine months of 2009, the Company reported a net loss
of $92.9 million or $11.57 per share compared to a net loss of
$8.8 million or $1.11 per share for the first nine months of 2008.
Consolidated revenues for the first nine months of 2009 were
$55.5 million, compared to $62.0 million for the first nine months
of 2008. The Company's $50 million cash sale of the Plantation
Golf Course in March 2009 was accounted for as a financing
transaction, and accordingly, no gain was recognized in the 2009
nine month results.
The Community Development segment reported an operating loss of
$16.9 million for the third quarter of 2009, compared to operating
income of $2.5 million for the third quarter of 2008. Revenues
from this operating segment were $13.8 million for the third
quarter of 2009, compared to $2.2 million for the third quarter of
2008. For the first nine months of 2009, the Community
Development segment reported an operating loss of $61.2 million,
compared to operating income of $21.5 million for the first nine
months of 2008. Revenues from this segment were $17.6 million for
the first nine months of 2009 compared to $10.5 million for the
first nine months of 2008. The operating loss reported by the
Community Development segment for the third quarter and first nine
months of 2009 includes losses of $22.8 million and $47.2 million,
respectively, attributable to the Company's investment in Kapalua
Bay Holdings, LLC, compared to income from this equity investment
of $5.1 million and $26.5 million, respectively, for the third
quarter and first nine months of 2008. In September 2009, Kapalua
Bay Holdings, LLC recorded an impairment in the value of its real
estate inventories totaling $208.8 million. The third quarter and
first nine months of 2009 also include the sale of two properties
that resulted in revenues of $11.7 million and pretax profit of
approximately $6.8 million. The first nine months of 2008 include
land sales that resulted in revenues of $4.4 million and pre-tax
profit of approximately $4.1 million.
The Resort segment reported an operating loss of $2.7 million for
the third quarter of 2009, compared to an operating loss of
$5.7 million for the third quarter of 2008. Resort segment
revenues decreased by 16% to $7.6 million for the third quarter of
2009 compared to $9.1 million for the third quarter of 2008,
reflecting lower revenues from the primary Resort operations,
golf, retail and villas. For the first nine months of 2009, the
Resort produced an operating loss of $11.4 million compared to an
operating loss of $13.1 million for the first nine months of 2008.
Resort revenues for the first nine months of 2009 were 21% lower
than the same period a year ago. Cost cutting measures helped to
reduce the Resort segment operating loss in 2009 as compared to
2008.
The Agriculture segment produced an operating loss of $4.1 million
for the third quarter of 2009 compared to an operating loss of
$9.5 million for the third quarter of 2008. Revenues from the
Agriculture segment decreased by 32% from $7.2 million in the
third quarter of 2008 to $4.9 million in the third quarter of 2009
due to lower average prices and lower case sales volume. For the
first nine months of 2009, the Agriculture segment reported an
operating loss of $12.6 million, compared to an operating loss of
$19.3 million for the first nine months of 2008. Revenues for the
first nine months of 2009 were $14.4 million, compared to
$21.0 million for the same period in 2008.
Balance Sheet
At September 30, 2009, the Company's consolidated balance sheets
showed $149.5 million in total assets and $189.3 million in total
liabilities, resulting in a $60.1 million shareholders' deficit.
A full-text copy of the Company's consolidated financial
statements for the three months ended September 30, 2009, is
available for free at http://researcharchives.com/t/s?4911
Liquidity/Going Concern Doubt
For the nine months ended September 30, 2009, the Company incurred
a net loss of $92.9 million and had negative cash flows from
operations of $19.6 million. At September 30, 2009, the Company
had amounts outstanding under borrowing agreements of
approximately $92.8 million; and approximately $15.6 million
available under existing lines of credit and $855,000 in cash and
cash equivalents; and a deficiency in stockholders' equity of
$60.1 million.
The Company has an obligation to purchase the spa, beach club
improvements and the sundry store from Kapalua Bay Holdings, LLC
(Bay Holdings) at actual construction costs of approximately
$35 million. The Company is negotiating with the other members of
Bay Holdings to restructure the purchase and sale of the assets
and avoid immediate cash requirements. The Company does not
currently have the cash resources to complete the sale. The
Company is also subject to other commitments and contingencies
that could negatively impact its future cash flows. These
circumstances raise substantial doubt about the Company's ability
to continue as a going concern.
About Maui Land
Maui Land & Pineapple Company, Inc. (NYSE: MLP) consists of a
landholding and operating parent company and its principal
subsidiaries, including Maui Pineapple Company, Ltd., and Kapalua
Land Company, Ltd. The Company operates in three segments:
Agriculture, Resort and Community Development.
MCKELVEY TRUCKING: Case Summary & 20 Largest Unsec. Creditors
-------------------------------------------------------------
Debtor: McKelvey Trucking Co.
P.O. Box 23155
Phoenix, AZ 85063
Bankruptcy Case No.: 09-28745
Chapter 11 Petition Date: November 9, 2009
Court: United States Bankruptcy Court
District of Arizona (Phoenix)
Judge: Sarah Sharer Curley
Debtor's Counsel: Harold Campbell, Esq.
Campbell & Coombs, P.C.
1811 S. Alma School Road, Suite 225
Mesa, AZ 85210
Tel: (480) 839-4828
Fax: (480) 897-1461
Email: heciii@haroldcampbell.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 $4,177,944,
and total debts of $5,739,070.
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/azb09-28745.pdf
The petition was signed by Dale Finck, president of the Company.
MCKELVEY TRUCK LEASING: Case Summary & 20 Largest Unsec. Creditors
------------------------------------------------------------------
Debtor: McKelvey Truck Leasing Company
P.O. Box 23155
Phoenix, AZ 85063
Bankruptcy Case No.: 09-28751
Chapter 11 Petition Date: November 9, 2009
Court: United States Bankruptcy Court
District of Arizona (Phoenix)
Judge: Randolph J. Haines
Debtor's Counsel: Harold Campbell, Esq.
Campbell & Coombs, P.C.
1811 S. Alma School Road, Suite 225
Mesa, AZ 85210
Tel: (480) 839-4828
Fax: (480) 897-1461
Email: heciii@haroldcampbell.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 $1,194,000,
and total debts of $3,216,320.
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/azb09-28751.pdf
The petition was signed by Dale Finck, president of the Company.
MEGA BRANDS: Rosens Discloses Settlement With Firm
--------------------------------------------------
Lawrence and Jeffrey Rosen, former owners of RoseArt Industries,
announced today the settlement of their litigation against Mega
Brands in connection with their sale of RoseArt to MB over four
years ago. The settlement allows the Rosens to recover
approximately $20 million in taxes which they prepaid in
expectation of MB's ability to satisfy its $50 million earnout
payment obligation which had been achieved by the Rosens as
stipulated in MB's Q4 2005 report.
The Rosens said that faced with the worsening of Mega Brands'
already bleak financial condition, Moody's downgrade of the
company to a junk rating and the increasing prospects of Mega
Brands filing for bankruptcy, they agreed to drop their earnout
claim. The collection of such a large judgment against MB would
be impossible and would not justify incurring further legal costs
in the litigation, they said. In return MB's $200 million
counterclaim against the Rosens will be dismissed and the Rosens
will withdraw their opposition to MB's claims to sums held in
escrow, a significant portion of which involved post-sale taxes.
Lawrence Rosen said, "This settlement allows me to put all my
focus and resources on competing with Mega Blocks in the
marketplace rather than in the court room."
Rosen said his new company Cra-Z-Art, a division of LaRose LLC
headquartered in Randolph, New Jersey, is the fastest growing art
and craft manufacturer in the USA. Sales in the first year will
exceed $50 million, he said. Product lines include art materials,
activity and craft kits, cork and wipe off boards, writing
instruments, games and puzzles.
"Our Cra-Z-Art staff, which includes 45 former Rose Art personnel,
is thrilled to be back doing what we do best in creating new
exciting innovative products," Mr. Rosen said.
MITHILESH KUMAR: Case Summary & 14 Largest Unsecured Creditors
--------------------------------------------------------------
Joint Debtors: Mithilesh Kumar
Pallavi Kumar
6039 S Olathe St
Centennial, CO 80016-1071
Bankruptcy Case No.: 09-33859
Chapter 11 Petition Date: November 9, 2009
Court: United States Bankruptcy Court
District of Colorado (Denver)
Judge: Howard R. Tallman
Debtor's Counsel: Harvey Sender, Esq.
1660 Lincoln St., Ste. 2200
Denver, CO 80264
Tel: (303) 296-1999
Fax: (303) 296-7600
Email: Sendertrustee@sendwass.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 $1,932,250,
and total debts of $3,867,257.
A full-text copy of the Debtors' petition, including a list of
their 14 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/cob09-33859.pdf
The petition was signed by the Joint Debtors.
NATIONAL SYSTEMS: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: National Systems Resources, Inc.
dba National Data Conversion Institute
41 Madison Avenue
New York, NY 10010
Bankruptcy Case No.: 09-16662
Chapter 11 Petition Date: November 6, 2009
Court: United States Bankruptcy Court
Southern District of New York (Manhattan)
Judge: Stuart M. Bernstein
Debtor's Counsel: Eric J. Snyder, Esq.
Siller Wilk
675 Third Avenue, 9th Floor
New York, NY 10017
Tel: (212) 421-2233
Fax: (212) 752-6380
Email: esnyder@sillerwilk.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 $1,542,740,
and total debts of $3,150,287.
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/nysb09-16662.pdf
The petition was signed by Michael Daniec, president of the
Company.
NORTEL NETWORKS: Amends Schedules & Statements
----------------------------------------------
Nortel Networks Inc. submitted to the U.S. Bankruptcy Court for
the District of Delaware a copy of the amendments to its
schedules of assets and liabilities and statements of financial
affairs.
Under the Amended Schedules, NNI took out the names of these
companies from the list of public utilities and other companies
where it had posted security deposits:
Value of
Companies NNI's Interest
--------- --------------
WP Carey & Company $2,643,750
485 Lexington Owner LLC $1,648,625
Prudential Insurance Company of America $195,926
Tower 333 LLC $75,000
NNI also submitted an amended schedule of its executory contracts
and unexpired leases, a copy of which is available for free at:
http://bankrupt.com/misc/Nortel_amendedschedGNNI.pdf
NNI informed the Court that the claims of these creditors have
been affected by the amendments to its schedules and that they
are required to file their proofs of claim no later than Dec. 15,
2009:
(1) Allegis Group, Inc.
(2) AltiGen Communications Inc.
(3) ATI Research Silicon Valley Inc.
(4) Advanced Micro Devices Inc.
(5) Brocade Communications Systems, Inc.
(6) CELLCO Partnership
(7) Emerson
(8) Fiber Technologies Networks, LLC
(9) Fidelity Real Estate Company, LLC Vice President-Leasing
(10) Hewlett Packard Company
(11) LanceSoft
(13) Namco Bandai Games America Inc. Chief Financial Officer
(14) Pediatrix Medical Group, Inc., Facilities Department
(15) Raytheon Company, Real Estate Department
(16) Time Warner Telecom of North Carolina, LP
(17) Volt Delta Resources, LLC, Legal Department
In its amended statement of financial affairs, NNI disclosed that
these personnel kept or supervised the keeping of its books of
accounts and records within two years prior to the bankruptcy
filing:
Personnel Dates Services Rendered
--------- -----------------------
Peter William Currie 01/2007 - 04/2007
David William Drinkwater 05/2007 - 10/2007
Paviler Singh Binning 11/2007 - Current
Paul Wesley Karr 01/2007 - Current
Kimberly Poe 01/2007 - 08/2007
Mark John Hamilton 09/2007 - 08/2008
Kimberly Susan Lechner 05/2008 - 11/2008
William Roy Ellis 09/2008 - Current
Lorrie David Mathers 11/2008 - Current
Fourteen debtor-affiliates of NNI also filed their amended
schedules and statements of financial affairs in Court. The
debtor-affiliates are:
(1) Nortel Networks Capital Corporation
See http://bankrupt.com/misc/Nortel_AmSOFA_NNCC.pdf
(2) Nortel Altsystems Inc.
See http://bankrupt.com/misc/Nortel_AmSOFANAltsystems.pdf
(3) Alteon WebSystems International, Inc.
See http://bankrupt.com/misc/Nortel_AmSOFA_Alteon.pdf
(4) Xros Inc.
See http://bankrupt.com/misc/Nortel_AmSAL_Xros.pdf
See http://bankrupt.com/misc/Nortel_AmSOFA_Xros.pdf
(5) Sonoma Systems
See http://bankrupt.com/misc/Nortel_AmSAL_Sonoma.pdf
See http://bankrupt.com/misc/Nortel_AmSOFA_Sonoma.pdf
(6) Qtera Corporation
See http://bankrupt.com/misc/Nortel_AmSAL_Qtera.pdf
See http://bankrupt.com/misc/Nortel_AmSOFA_Qtera.pdf
(7) Coretek, Inc.
See http://bankrupt.com/misc/Nortel_AmSAL_Coretek.pdf
See http://bankrupt.com/misc/Nortel_AmSOFA_Coretek.pdf
(8) Nortel Networks Applications Management Solutions Inc.
See http://bankrupt.com/misc/Nortel_AmSAL_NNAMS.pdf
See http://bankrupt.com/misc/Nortel_AmSOFA_NNAMS.pdf
(9) Nortel Networks Optical Components Inc.
See http://bankrupt.com/misc/Nortel_AmSAL_NNOC.pdf
See http://bankrupt.com/misc/Nortel_AmSOFA_NNOC.pdf
(10) Nortel Networks HPOCS Inc.
See http://bankrupt.com/misc/Nortel_AmSOFA_NNHPOCS.pdf
(11) Architel Systems (U.S.) Corporation
See http://bankrupt.com/misc/Nortel_AmSOFA_Architel.pdf
(12) Nortel Networks International Inc.
See http://bankrupt.com/misc/Nortel_AmSOFA_NNII.pdf
(13) Northern Telecom International Inc.
See http://bankrupt.com/misc/Nortel_AmSOFA_NTelecom.pdf
(14) Nortel Networks Cable Solutions Inc.
See http://bankrupt.com/misc/Nortel_AmSOFA_NNCable.pdf
About Nortel Networks
Nortel Networks (OTCBB:NRTLQ) -- http://www.nortel.com/--
delivers communications capabilities that make the promise of
Business Made Simple a reality for our customers. The Company's
next-generation technologies, for both service provider and
enterprise networks, support multimedia and business-critical
applications. Nortel's technologies are designed to help
eliminate the barriers to efficiency, speed and performance by
simplifying networks and connecting people to the information they
need, when they need it.
Nortel Networks Corp., Nortel Networks Inc., and other affiliated
corporations in Canada sought insolvency protection under the
Companies' Creditors Arrangement Act in the Ontario Superior Court
of Justice (Commercial List). Ernst & Young has been appointed to
serve as monitor and foreign representative of the Canadian Nortel
Group. The Monitor also sought recognition of the CCAA
Proceedings in the Bankruptcy Court under Chapter 15 of the
Bankruptcy Code.
Nortel Networks Inc. and 14 affiliates filed separate Chapter 11
petitions on January 14, 2009 (Bankr. D. Del. Case No. 09-10138).
Judge Kevin Gross presides over the case. James L. Bromley, Esq.,
at Cleary Gottlieb Steen & Hamilton, LLP, in New York, serves as
general bankruptcy counsel; Derek C. Abbott, Esq., at Morris
Nichols Arsht & Tunnell LLP, in Wilmington, serves as Delaware
counsel. The Chapter 11 Debtors' other professionals are Lazard
Freres & Co. LLC as financial advisors; and Epiq Bankruptcy
Solutions LLC as claims and notice agent.
The Chapter 15 case is Bankr. D. Del. Case No. 09-10164. Mary
Caloway, Esq., and Peter James Duhig, Esq., at Buchanan Ingersoll
& Rooney PC, in Wilmington, Delaware, serves as Chapter 15
petitioner's counsel.
Certain of Nortel's European subsidiaries have also made
consequential filings for creditor protection. The Nortel
Companies related in a press release that Nortel Networks UK
Limited and certain subsidiaries of the Nortel group incorporated
in the EMEA region have each obtained an administration order
from the English High Court of Justice under the Insolvency Act
1986. The applications were made by the EMEA Subsidiaries under
the provisions of the European Union's Council Regulation (EC)
No. 1346/2000 on Insolvency Proceedings and on the basis that
each EMEA Subsidiary's centre of main interests is in England.
Under the terms of the orders, representatives of Ernst & Young
LLP have been appointed as administrators of each of the EMEA
Companies and will continue to manage the EMEA Companies and
operate their businesses under the jurisdiction of the English
Court and in accordance with the applicable provisions of the
Insolvency Act.
Several entities, particularly, Nortel Government Solutions
Incorporated have material operations and are not part of the
bankruptcy proceedings.
As of September 30, 2008, Nortel Networks Corp. reported
consolidated assets of $11.6 billion and consolidated liabilities
of $11.8 billion. The Nortel Companies' U.S. businesses are
primarily conducted through Nortel Networks Inc., which is the
parent of majority of the U.S. Nortel Companies. As of
September 30, 2008, NNI had assets of about $9 billion and
liabilities of $3.2 billion, which do not include NNI's guarantee
of some or all of the Nortel Companies' about $4.2 billion of
unsecured public debt.
Bankruptcy Creditors' Service, Inc., publishes Nortel Networks
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
and ancillary foreign proceedings undertaken by Nortel Networks
Corp. and its various affiliates. (http://bankrupt.com/newsstand/
or 215/945-7000)
NORTEL NETWORKS: Gets Nod to Pay Benefits to Foreign Workers
------------------------------------------------------------
Nortel Networks Inc. and its affiliated debtors obtained
permission from the U.S. Bankruptcy Court for the District of
Delaware to pay their employees in Egypt and Tunisia who will be
terminated as part of their restructuring process. The employees
to be terminated are connected with the Debtors' Enterprise
Solutions business.
The Debtors plan to terminate a number of employees in their
offices in Cairo and Tunis by the end of the month and another
batch of employees in the next few months. The Debtors currently
employ seven workers for their Enterprise Solutions business in
the Dubai office, and three workers in the Tunis office.
Employees who won't be laid off will be offered a new job in
Avaya Inc., the company that acquired the Enterprise Solutions
business.
The Debtors estimate that they would have to pay as much as
$829,501 to the Cairo and Tunis employees scheduled for
termination.
As previously reported, the Debtors sought and obtained the
Court's permission to pay their employees in the United Arab
Emirates and Saudi Arabia who are to be terminated in relation to
the Enterprise Solutions business. The Debtors estimated paying
out approximately $1.4 million for the UAE employees to be
terminated.
About Nortel Networks
Nortel Networks (OTCBB:NRTLQ) -- http://www.nortel.com/--
delivers communications capabilities that make the promise of
Business Made Simple a reality for our customers. The Company's
next-generation technologies, for both service provider and
enterprise networks, support multimedia and business-critical
applications. Nortel's technologies are designed to help
eliminate the barriers to efficiency, speed and performance by
simplifying networks and connecting people to the information they
need, when they need it.
Nortel Networks Corp., Nortel Networks Inc., and other affiliated
corporations in Canada sought insolvency protection under the
Companies' Creditors Arrangement Act in the Ontario Superior Court
of Justice (Commercial List). Ernst & Young has been appointed to
serve as monitor and foreign representative of the Canadian Nortel
Group. The Monitor also sought recognition of the CCAA
Proceedings in the Bankruptcy Court under Chapter 15 of the
Bankruptcy Code.
Nortel Networks Inc. and 14 affiliates filed separate Chapter 11
petitions on January 14, 2009 (Bankr. D. Del. Case No. 09-10138).
Judge Kevin Gross presides over the case. James L. Bromley, Esq.,
at Cleary Gottlieb Steen & Hamilton, LLP, in New York, serves as
general bankruptcy counsel; Derek C. Abbott, Esq., at Morris
Nichols Arsht & Tunnell LLP, in Wilmington, serves as Delaware
counsel. The Chapter 11 Debtors' other professionals are Lazard
Freres & Co. LLC as financial advisors; and Epiq Bankruptcy
Solutions LLC as claims and notice agent.
The Chapter 15 case is Bankr. D. Del. Case No. 09-10164. Mary
Caloway, Esq., and Peter James Duhig, Esq., at Buchanan Ingersoll
& Rooney PC, in Wilmington, Delaware, serves as Chapter 15
petitioner's counsel.
Certain of Nortel's European subsidiaries have also made
consequential filings for creditor protection. The Nortel
Companies related in a press release that Nortel Networks UK
Limited and certain subsidiaries of the Nortel group incorporated
in the EMEA region have each obtained an administration order
from the English High Court of Justice under the Insolvency Act
1986. The applications were made by the EMEA Subsidiaries under
the provisions of the European Union's Council Regulation (EC)
No. 1346/2000 on Insolvency Proceedings and on the basis that
each EMEA Subsidiary's centre of main interests is in England.
Under the terms of the orders, representatives of Ernst & Young
LLP have been appointed as administrators of each of the EMEA
Companies and will continue to manage the EMEA Companies and
operate their businesses under the jurisdiction of the English
Court and in accordance with the applicable provisions of the
Insolvency Act.
Several entities, particularly, Nortel Government Solutions
Incorporated have material operations and are not part of the
bankruptcy proceedings.
As of September 30, 2008, Nortel Networks Corp. reported
consolidated assets of $11.6 billion and consolidated liabilities
of $11.8 billion. The Nortel Companies' U.S. businesses are
primarily conducted through Nortel Networks Inc., which is the
parent of majority of the U.S. Nortel Companies. As of
September 30, 2008, NNI had assets of about $9 billion and
liabilities of $3.2 billion, which do not include NNI's guarantee
of some or all of the Nortel Companies' about $4.2 billion of
unsecured public debt.
Bankruptcy Creditors' Service, Inc., publishes Nortel Networks
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
and ancillary foreign proceedings undertaken by Nortel Networks
Corp. and its various affiliates. (http://bankrupt.com/newsstand/
or 215/945-7000)
NORTEL NETWORKS: Proposes to Assign 60 Pacts to Ericsson
--------------------------------------------------------
Nortel Networks Inc. and its affiliated debtors seek court
approval to assume and assign certain executory contracts in
connection with the sale of their core wireless assets to
Telefonaktiebolaget LM Ericsson.
The Contracts consist of about 60 customer contracts related to
the Wireless Assets, including non-disclosure and service
agreements. Customer contracts were excluded from the list of
contracts, which the Debtors have designated earlier for
assumption and assignment to Ericsson.
Ericsson was the winning bidder at the July 2009 auction for
Nortel's Code Division Multiple Access (CDMA) business and Long
Term Evolution (LTE) access assets. It offered to acquire the
CDMA and LTE Assets for US$1.13 billion, outbidding Nokia Siemens
Networks' $1.032 billion offer.
In connection with the proposed assumption and assignment of the
customer contracts, the Debtors also seek court approval to file
some documents under seal including a list of those contracts and
parties which they executed the contracts with, and to pay the
cure amounts to settle any existing default under the contracts.
The hearing to consider approval of the Debtors' request is
scheduled for November 19, 2009. Creditors and other concerned
parties have until November 12, 2009, to file their objections.
About Nortel Networks
Nortel Networks (OTCBB:NRTLQ) -- http://www.nortel.com/--
delivers communications capabilities that make the promise of
Business Made Simple a reality for our customers. The Company's
next-generation technologies, for both service provider and
enterprise networks, support multimedia and business-critical
applications. Nortel's technologies are designed to help
eliminate the barriers to efficiency, speed and performance by
simplifying networks and connecting people to the information they
need, when they need it.
Nortel Networks Corp., Nortel Networks Inc., and other affiliated
corporations in Canada sought insolvency protection under the
Companies' Creditors Arrangement Act in the Ontario Superior Court
of Justice (Commercial List). Ernst & Young has been appointed to
serve as monitor and foreign representative of the Canadian Nortel
Group. The Monitor also sought recognition of the CCAA
Proceedings in the Bankruptcy Court under Chapter 15 of the
Bankruptcy Code.
Nortel Networks Inc. and 14 affiliates filed separate Chapter 11
petitions on January 14, 2009 (Bankr. D. Del. Case No. 09-10138).
Judge Kevin Gross presides over the case. James L. Bromley, Esq.,
at Cleary Gottlieb Steen & Hamilton, LLP, in New York, serves as
general bankruptcy counsel; Derek C. Abbott, Esq., at Morris
Nichols Arsht & Tunnell LLP, in Wilmington, serves as Delaware
counsel. The Chapter 11 Debtors' other professionals are Lazard
Freres & Co. LLC as financial advisors; and Epiq Bankruptcy
Solutions LLC as claims and notice agent.
The Chapter 15 case is Bankr. D. Del. Case No. 09-10164. Mary
Caloway, Esq., and Peter James Duhig, Esq., at Buchanan Ingersoll
& Rooney PC, in Wilmington, Delaware, serves as Chapter 15
petitioner's counsel.
Certain of Nortel's European subsidiaries have also made
consequential filings for creditor protection. The Nortel
Companies related in a press release that Nortel Networks UK
Limited and certain subsidiaries of the Nortel group incorporated
in the EMEA region have each obtained an administration order
from the English High Court of Justice under the Insolvency Act
1986. The applications were made by the EMEA Subsidiaries under
the provisions of the European Union's Council Regulation (EC)
No. 1346/2000 on Insolvency Proceedings and on the basis that
each EMEA Subsidiary's centre of main interests is in England.
Under the terms of the orders, representatives of Ernst & Young
LLP have been appointed as administrators of each of the EMEA
Companies and will continue to manage the EMEA Companies and
operate their businesses under the jurisdiction of the English
Court and in accordance with the applicable provisions of the
Insolvency Act.
Several entities, particularly, Nortel Government Solutions
Incorporated have material operations and are not part of the
bankruptcy proceedings.
As of September 30, 2008, Nortel Networks Corp. reported
consolidated assets of $11.6 billion and consolidated liabilities
of $11.8 billion. The Nortel Companies' U.S. businesses are
primarily conducted through Nortel Networks Inc., which is the
parent of majority of the U.S. Nortel Companies. As of
September 30, 2008, NNI had assets of about $9 billion and
liabilities of $3.2 billion, which do not include NNI's guarantee
of some or all of the Nortel Companies' about $4.2 billion of
unsecured public debt.
Bankruptcy Creditors' Service, Inc., publishes Nortel Networks
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
and ancillary foreign proceedings undertaken by Nortel Networks
Corp. and its various affiliates. (http://bankrupt.com/newsstand/
or 215/945-7000)
NORTEL NETWORKS: Proposes to Hire Global IP as Consultant
---------------------------------------------------------
Nortel Networks Inc. and its affiliated debtors seek the Court's
authority to employ Global IP Law Group LLC as consultant to
evaluate the marketability of their intellectual property
portfolio.
The Intellectual Property Portfolio includes about 3,500 "patent
families" that are not predominant to any of Nortel's businesses
that have been or may be sold in connection with their various
creditor protection proceedings. The licenses to the patents are
either held or owned by NNI, Nortel Networks Ltd., Nortel
Networks UK Ltd. and NN Ireland.
"The Debtors believe they require the services of a capable and
experienced intellectual property consulting firm because, among
other reasons, the valuation and monetization of the
[intellectual property portfolio] cannot be effectuated without
such services," says the Debtors' attorney, Ann Cordo, Esq., at
Morris Nichols Arsht & Tunnell LLP, in Wilmington, Delaware.
As consultant, Global IP will be tasked to provide the Debtors
with a summary analysis of the Intellectual Property Portfolio,
including narrative description and overview of key markets. The
firm will also be tasked to provide the Debtors with electronic
databases of claims in the portfolio; incidental identification
of possible claim improvements; an overview of the key segments
of the portfolio which include an indication of the relative
patent strength and other services.
In return for Global IP's services, NNL will pay the firm
$350,000 in three equal installments. NNI will also pay a share
of the fees subject to agreement by the Nortel units.
NNL also agreed to reimburse Global IP of its costs and expenses,
which are estimated at $35,000. All other expenses of the firm
in excess of $35,000 will be pre-approved by Nortel in writing
before being incurred.
Steven Steger, a managing partner at Global IP, assures the Court
that his firm does not hold or represent interest adverse to the
Debtors or their estates, and is a "disinterested person" under
Section 101(14) of the Bankruptcy Code.
About Nortel Networks
Nortel Networks (OTCBB:NRTLQ) -- http://www.nortel.com/--
delivers communications capabilities that make the promise of
Business Made Simple a reality for our customers. The Company's
next-generation technologies, for both service provider and
enterprise networks, support multimedia and business-critical
applications. Nortel's technologies are designed to help
eliminate the barriers to efficiency, speed and performance by
simplifying networks and connecting people to the information they
need, when they need it.
Nortel Networks Corp., Nortel Networks Inc., and other affiliated
corporations in Canada sought insolvency protection under the
Companies' Creditors Arrangement Act in the Ontario Superior Court
of Justice (Commercial List). Ernst & Young has been appointed to
serve as monitor and foreign representative of the Canadian Nortel
Group. The Monitor also sought recognition of the CCAA
Proceedings in the Bankruptcy Court under Chapter 15 of the
Bankruptcy Code.
Nortel Networks Inc. and 14 affiliates filed separate Chapter 11
petitions on January 14, 2009 (Bankr. D. Del. Case No. 09-10138).
Judge Kevin Gross presides over the case. James L. Bromley, Esq.,
at Cleary Gottlieb Steen & Hamilton, LLP, in New York, serves as
general bankruptcy counsel; Derek C. Abbott, Esq., at Morris
Nichols Arsht & Tunnell LLP, in Wilmington, serves as Delaware
counsel. The Chapter 11 Debtors' other professionals are Lazard
Freres & Co. LLC as financial advisors; and Epiq Bankruptcy
Solutions LLC as claims and notice agent.
The Chapter 15 case is Bankr. D. Del. Case No. 09-10164. Mary
Caloway, Esq., and Peter James Duhig, Esq., at Buchanan Ingersoll
& Rooney PC, in Wilmington, Delaware, serves as Chapter 15
petitioner's counsel.
Certain of Nortel's European subsidiaries have also made
consequential filings for creditor protection. The Nortel
Companies related in a press release that Nortel Networks UK
Limited and certain subsidiaries of the Nortel group incorporated
in the EMEA region have each obtained an administration order
from the English High Court of Justice under the Insolvency Act
1986. The applications were made by the EMEA Subsidiaries under
the provisions of the European Union's Council Regulation (EC)
No. 1346/2000 on Insolvency Proceedings and on the basis that
each EMEA Subsidiary's centre of main interests is in England.
Under the terms of the orders, representatives of Ernst & Young
LLP have been appointed as administrators of each of the EMEA
Companies and will continue to manage the EMEA Companies and
operate their businesses under the jurisdiction of the English
Court and in accordance with the applicable provisions of the
Insolvency Act.
Several entities, particularly, Nortel Government Solutions
Incorporated have material operations and are not part of the
bankruptcy proceedings.
As of September 30, 2008, Nortel Networks Corp. reported
consolidated assets of $11.6 billion and consolidated liabilities
of $11.8 billion. The Nortel Companies' U.S. businesses are
primarily conducted through Nortel Networks Inc., which is the
parent of majority of the U.S. Nortel Companies. As of
September 30, 2008, NNI had assets of about $9 billion and
liabilities of $3.2 billion, which do not include NNI's guarantee
of some or all of the Nortel Companies' about $4.2 billion of
unsecured public debt.
Bankruptcy Creditors' Service, Inc., publishes Nortel Networks
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
and ancillary foreign proceedings undertaken by Nortel Networks
Corp. and its various affiliates. (http://bankrupt.com/newsstand/
or 215/945-7000)
NORTEL NETWORKS: Ciena Ha Clearance to Buy Ethernet Assets
----------------------------------------------------------
Ciena(R) Corporation has received regulatory clearances regarding
its proposed acquisition of substantially all of Nortel's optical
networking and carrier Ethernet assets. In the United States,
Ciena was granted early termination of the antitrust waiting
period under the Hart-Scott-Rodino Act. In addition, Ciena also
has received from the Canadian Competition Bureau a no action
letter, terminating the applicable waiting period for the proposed
transaction under the Competition Act.
As a result of Nortel's restructuring process, the proposed
transaction remains subject to a competitive bidding process.
The proposed transaction also requires the approval of the United
States Bankruptcy Court for the District of Delaware and the
Ontario Superior Court of Justice and is subject to additional
regional regulatory clearances as well as to customary closing
conditions.
About Nortel Networks
Nortel Networks (OTCBB:NRTLQ) -- http://www.nortel.com/--
delivers communications capabilities that make the promise of
Business Made Simple a reality for our customers. The Company's
next-generation technologies, for both service provider and
enterprise networks, support multimedia and business-critical
applications. Nortel's technologies are designed to help
eliminate the barriers to efficiency, speed and performance by
simplifying networks and connecting people to the information they
need, when they need it.
Nortel Networks Corp., Nortel Networks Inc., and other affiliated
corporations in Canada sought insolvency protection under the
Companies' Creditors Arrangement Act in the Ontario Superior Court
of Justice (Commercial List). Ernst & Young has been appointed to
serve as monitor and foreign representative of the Canadian Nortel
Group. The Monitor also sought recognition of the CCAA
Proceedings in the Bankruptcy Court under Chapter 15 of the
Bankruptcy Code.
Nortel Networks Inc. and 14 affiliates filed separate Chapter 11
petitions on January 14, 2009 (Bankr. D. Del. Case No. 09-10138).
Judge Kevin Gross presides over the case. James L. Bromley, Esq.,
at Cleary Gottlieb Steen & Hamilton, LLP, in New York, serves as
general bankruptcy counsel; Derek C. Abbott, Esq., at Morris
Nichols Arsht & Tunnell LLP, in Wilmington, serves as Delaware
counsel. The Chapter 11 Debtors' other professionals are Lazard
Freres & Co. LLC as financial advisors; and Epiq Bankruptcy
Solutions LLC as claims and notice agent.
The Chapter 15 case is Bankr. D. Del. Case No. 09-10164. Mary
Caloway, Esq., and Peter James Duhig, Esq., at Buchanan Ingersoll
& Rooney PC, in Wilmington, Delaware, serves as Chapter 15
petitioner's counsel.
Certain of Nortel's European subsidiaries have also made
consequential filings for creditor protection. The Nortel
Companies related in a press release that Nortel Networks UK
Limited and certain subsidiaries of the Nortel group incorporated
in the EMEA region have each obtained an administration order
from the English High Court of Justice under the Insolvency Act
1986. The applications were made by the EMEA Subsidiaries under
the provisions of the European Union's Council Regulation (EC)
No. 1346/2000 on Insolvency Proceedings and on the basis that
each EMEA Subsidiary's centre of main interests is in England.
Under the terms of the orders, representatives of Ernst & Young
LLP have been appointed as administrators of each of the EMEA
Companies and will continue to manage the EMEA Companies and
operate their businesses under the jurisdiction of the English
Court and in accordance with the applicable provisions of the
Insolvency Act.
Several entities, particularly, Nortel Government Solutions
Incorporated have material operations and are not part of the
bankruptcy proceedings.
As of September 30, 2008, Nortel Networks Corp. reported
consolidated assets of $11.6 billion and consolidated liabilities
of $11.8 billion. The Nortel Companies' U.S. businesses are
primarily conducted through Nortel Networks Inc., which is the
parent of majority of the U.S. Nortel Companies. As of
September 30, 2008, NNI had assets of about $9 billion and
liabilities of $3.2 billion, which do not include NNI's guarantee
of some or all of the Nortel Companies' about $4.2 billion of
unsecured public debt.
Bankruptcy Creditors' Service, Inc., publishes Nortel Networks
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
and ancillary foreign proceedings undertaken by Nortel Networks
Corp. and its various affiliates. (http://bankrupt.com/newsstand/
or 215/945-7000)
About Ciena Corp.
Ciena Corp. specializes in practical network transition. We offer
leading network infrastructure solutions, intelligent software and
a comprehensive services practice to help our customers use their
networks to fundamentally change the way they compete. With a
global presence, Ciena leverages its heritage of practical
innovation to deliver maximum performance and economic value in
communications networks worldwide.
* * *
As reported in the Troubled company Reporter on October 9, 2009,
Standard & Poor's Ratings Services said it placed its 'B+'
corporate credit and senior unsecured ratings on Linthicum,
Maryland-based Ciena Corp. on CreditWatch with negative
implications.
NTK HOLDINGS: MCC/NLC, PLM Want to Pursue Product Liability Suits
-----------------------------------------------------------------
Maryland Casualty Company and New London Mutual Insurance Company
and Pennsylvania Lumbermens Mutual Insurance Company, in separate
filings, ask the U.S. Bankruptcy Court for the District of
Delaware to modify the stay imposed by Section 362(d)(1) of the
Bankruptcy Code to allow them to continue their product liability
actions against Debtor Broan-NuTone LLC pending in different
federal courts.
Broan-NuTone designed, manufactured, produced, distributed,
assembled, supplied, sold and placed in the stream of commerce an
exhaust fan, Model # 696N.
The fan was installed at the commercial Premises located at 304
Federal Road, in Brookfield, Connecticut, owned by Brookfield
Office Park. MMC issued an insurance policy under which
Brookfield Office Park Association, Inc., Alpha Professional Tax
Service, LLC, and Image First Media, Inc. were deemed insureds in
all respects pertinent to the insurance policy. NLC issued an
insurance policy under which James J. Quish, Sr. Insurance
Agency, Faness, LLC & Howard Sherman ATIMA, and Redd Oak
Properties, were deemed insureds in all respects pertinent the
insurance policy.
Duckert Enterprises LLP owned a commercial premise at W9888 West
Bauer Road, in Black River Falls, Wisconsin. The fan was located
in the men's bathroom on the Premises. Duckert leased the
Premises to Pacific Coast Forest Products LLC doing business as
Levis Creek Forest Products. Pacific Coast utilized the Premises
for its pallet lumber operation. PLM issued an insurance policy
to Duckert and Pacific Coast, which policy insured the Duckert
Premises and the Pacific Coast pallet lumber operation. Pursuant
to the terms of the PLM policy, and the applicable law, PLM would
become subrogated to its insureds' rights and claims, to the
extent of the payments made, in the event the company paid a loss
caused by the actions of a third party.
A fire at both Premises allegedly caused by a defect in the fan
resulted in substantial covered property damage losses to the
insureds under the PLM policy and the insureds of MCC and NLC.
MCC/NLC filed a Products Liability Action against Broan-NuTone in
the Superior Court of Connecticut pursuant their subrogation
rights under the respective insurance policies. The Products
Liability Action was subsequently removed to the U.S. District
Court for the District of Connecticut.
PLM also filed a Products Liability Action against Broan-NuTone
in the in the U.S. District Court for the Western District of
Wisconsin also asserting its subrogation rights under the PLM
policy.
MMC/NLC and PLM believe that insurance coverage above an alleged
Self Insured Retentions is available to NTK Holdings, Inc., which
covers the claims asserted in the Products Liability Actions.
As of October 30, 2009, it is believed that NTK has not received
a denial of coverage or reservation of rights letter from any
insurer or indemnitor as to the Products Liability Actions.
MCC/NLC and PLM are willing to limit their recoveries in the
Products Liability Actions to available insurance coverage, if
any.
Moreover, MCC/NLC and PLM will not seek to recover the SIR in the
Products Liability Actions. Rather, in the event of the
occurrence of the Joint Prepackaged Plan of Reorganization,
MCC/NLC and PLM reserve all rights regarding Debtors' SIR.
Counsel for MCC/NLC, James S. Yoder, Esq., at White and Williams
LLP, in Wilmington, Delaware, asserts that NTK will not be
prejudiced should the stay be lifted since MCC/NLC are not
seeking estate assets in the Products Liability Action. Mr. Yobe
adds that absent stay relief, MCC/NLC will be deprived of any
recovery out of otherwise available insurance coverage.
About NTK Holdings
NTK Holdings Inc., the parent company of Nortek Holdings and
Nortek Inc., is a diversified global manufacturer of branded
residential and commercial ventilation, HVAC and home technology
convenience and security products. NTK Holdings and Nortek offer
a broad array of products including range hoods, bath fans, indoor
air quality systems, medicine cabinets and central vacuums,
heating and air conditioning systems, and home technology
offerings, including audio, video, access control, security and
other products.
As reported by the TCR on Sept. 4, 2009, NTK Holdings, Inc., and
Nortek, Inc., entered into a restructuring and lockup agreement
with bondholders to effectuate a comprehensive restructuring of
the Company's debt under Chapter 11. When concluded, the
Agreement will eliminate approximately $1.3 billion in total
indebtednes by, among other things, exchanging debt to bondholders
for equity in the Company.
NTK Holdings Inc., together with affiliates, including Nortek
International, Inc. and Nortek Holdings, Inc., filed for Chapter
11 with a prepackaged plan accepted by all impaired creditors on
October 21, 2009 (Bankr. D. Del. Case No. 09-13611). The Company
has tapped Blackstone Group and Weil, Gotshal & Manges to aid in
its restructuring effort. Mark D. Collins, Esq., at Richards
Layton & Finger P.A., serves as local counsel. Epiq Bankruptcy
Solutions is claims and notice agent. An Ad Hoc Committee of
Nortek noteholders is being represented by Andrew N. Rosenberg,
Esq., and Brian N. Hermann, Esq., at Paul, Weiss, Rifkind, Wharton
& Garrison LLP; and William Derrough, Esq., and Adam Keil, Esq.,
at Moelis & Company.
NTK Holdings and its units have assets of $1,655,200,000, against
debts of $2,778,100,000 as of July 4, 2009.
Bankruptcy Creditors' Service, Inc., publishes NTK Holdings
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by Nortek Holdings Inc., Nortek Internationa Inc., and
their affiliates (http://bankrupt.com/newsstand/or 215/945-7000).
NTK HOLDINGS: Seeks January 7 Extension for Schedules Filing
------------------------------------------------------------
Section 521 of the Bankruptcy Code and Rule 1007(c) of the
Federal Rules of Bankruptcy Procedure require NTK Holdings Inc.
and its units 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.
Rule 1007-1 (b) of the Local Rules of the United States
Bankruptcy Court for the District of Delaware provides, however,
that if the total number of creditors in a debtor's case exceeds
200, the debtor must file its Schedules and Statements within 30
days of the Petition Date. In the instant case, the Debtors'
total number of creditors well exceeds 200 and, therefore, the
Debtors must file their Schedules and Statements within 30 days
of the Petition Date.
By this motion, the Debtors ask the Court to:
(a) extend the deadline to file the Schedules and Statements
through January 7, 2010; and
(b) waive the requirement to file the Schedules and Statements
upon entry of an order confirming the Prepackaged Joint Plan
of Reorganization, so long as the Debtors do not seek to
establish a claims bar date.
Gary T. Holtzer, Esq., at Weil, Gotshal & Manges LLP, in New
York, says that to prepare the Schedules and Statements, the
Debtors would have to compile information from books, records,
and documents relating to the claims of approximately 3,700
creditors, as well as the Debtors' many assets and contracts.
This information is voluminous and assembling the necessary
information would require a significant expenditure of time and
effort on the part of the Debtors and their employees in the near
term, when these resources would be best put toward effectuating
the Debtors' reorganization efforts, he tells the Court.
The Debtors believe that the purposes of filing the Schedules and
Statements have generally been fulfilled by other means and that
the completion of the Schedules and Statements is extraneous and
not justified given the costs to the Debtors' estates -- in terms
of the expenditure of both financial and human resources.
Consequently, the requirement represents an unnecessary burden on
the estates.
Moreover, Mr. Holtzer points out that the Prepackaged Plan
provides for the payment in full of all Allowed Nortek General
Unsecured Claims, Nortek Other Secured Claims, Nortek Priority
Non-Tax Claims, Priority Tax Claims and Administrative Claims,
which together comprise most, if not all, of the non-debt claims
in these cases. Accordingly, the numerous creditors with these
types of claims do not need the schedules to determine how their
claim is being treated, and will not be prejudiced by any
extension in the deadline to file the Schedules and Statements,
Mr. Holtzer asserts.
Similarly, the Debtors assert that upon confirmation of the
Prepackaged Plan, the Schedules and Statements will provide no
benefit to creditors that could justify incurring the costs of
creating them and, accordingly, the requirement of filing the
Schedules and Statements should be waived at that time.
About NTK Holdings
NTK Holdings Inc., the parent company of Nortek Holdings and
Nortek Inc., is a diversified global manufacturer of branded
residential and commercial ventilation, HVAC and home technology
convenience and security products. NTK Holdings and Nortek offer
a broad array of products including range hoods, bath fans, indoor
air quality systems, medicine cabinets and central vacuums,
heating and air conditioning systems, and home technology
offerings, including audio, video, access control, security and
other products.
As reported by the TCR on Sept. 4, 2009, NTK Holdings, Inc., and
Nortek, Inc., entered into a restructuring and lockup agreement
with bondholders to effectuate a comprehensive restructuring of
the Company's debt under Chapter 11. When concluded, the
Agreement will eliminate approximately $1.3 billion in total
indebtednes by, among other things, exchanging debt to bondholders
for equity in the Company.
NTK Holdings Inc., together with affiliates, including Nortek
International, Inc. and Nortek Holdings, Inc., filed for Chapter
11 with a prepackaged plan accepted by all impaired creditors on
October 21, 2009 (Bankr. D. Del. Case No. 09-13611). The Company
has tapped Blackstone Group and Weil, Gotshal & Manges to aid in
its restructuring effort. Mark D. Collins, Esq., at Richards
Layton & Finger P.A., serves as local counsel. Epiq Bankruptcy
Solutions is claims and notice agent. An Ad Hoc Committee of
Nortek noteholders is being represented by Andrew N. Rosenberg,
Esq., and Brian N. Hermann, Esq., at Paul, Weiss, Rifkind, Wharton
& Garrison LLP; and William Derrough, Esq., and Adam Keil, Esq.,
at Moelis & Company.
NTK Holdings and its units have assets of $1,655,200,000, against
debts of $2,778,100,000 as of July 4, 2009.
Bankruptcy Creditors' Service, Inc., publishes NTK Holdings
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by Nortek Holdings Inc., Nortek Internationa Inc., and
their affiliates (http://bankrupt.com/newsstand/or 215/945-7000).
OTTER TAIL AG: Has Agreement to Use Cash Collateral
---------------------------------------------------
Otter Tail AG Enterprises LLC has an agreement to use cash
collateral. According to Bill Rochelle at Bloomberg, an agreement
to use cash requires raising $10 million in new investments by the
end of February. Absent new capital, Otter Tail is obligated to
sell the operation.
Otter Tail AG Enterprises, LLC, a Minnesota limited liability
company, was organized with the intention of developing, owning
and operating a 55 million gallon per year capacity dry-mill
ethanol plant near Fergus Falls, Minnesota. The company was in
the development stage until March 2008, when the company commenced
operations.
The Company filed for Chapter 11 relief on Oct. 30 (Bankr. D.
Minn. Case No. 09-61250). The petition listed assets of $66.4
million against $86 million in debt, nearly all secured. The
largest secured creditor is AgStar Financial Services, owed $40.9
million.
ORLEANS HOMEBUILDERS: Gets Relief From Lenders Until Nov. 30
------------------------------------------------------------
Orleans Homebuilders, Inc. (Amex: OHB) received another waiver on
November 4, 2009, but effective as of October 30, 2009, from the
lenders under the Company's $375 million Credit Facility. The
Limited Waiver and Amendment Extension Letter effectively extends
for approximately one month the borrowing base relief, minimum
liquidity covenant deferral, existing loan fee payment deferral
(which has been earned by the Lenders, but the failure to pay the
fee currently is being waived until the end of the amendment
extension period) and other accommodations provided by the terms
of the Third Amendment executed on September 30, 2009. In
addition, the Limited Waiver and Amendment Extension Letter waives
a number of specific events of default and anticipated events of
default under the Credit Agreement.
The Limited Waiver and Amendment Extension Letter generally
provides borrowing base, covenant and waiver of default relief
until November 30, 2009, provided that the waiver period and the
extension of the accommodations provided by the Third Amendment
will end on the date that one or more events described in the
Limited Waiver and Amendment Extension Letter occurs. These
events include, but are not limited to, (i) the failure of the
Company and Wachovia Bank, National Association, as agent under
the Credit Facility (the "Agent"), to reach a mutual agreement in
principle on a term sheet containing the significant terms and
conditions for amending and restating the Credit Facility, subject
to the completion of due diligence, on or prior to November 12,
2009, (or such later date agreed to by the Agent); (ii) the
exercise or commencement of any enforcement action against the
Company as a result of its failure to make the scheduled $639,000
quarterly interest payment due on September 30, 2009, related to
the 8.52% junior subordinated note underlying the $30 million
issue of trust preferred securities, or the scheduled $235,000
quarterly payment due on October 30, 2009, on the 1.0% junior
subordinated notes; (iii) the failure to provide sufficient detail
of the intended use of any advance under the Credit Facility, or
if such use is not deemed satisfactory by the Agent, but such
payment is made over the Agent's objection; and (iv) the
occurrence of any other event of default under the Credit
Facility.
At the end of the Amendment Extension Period, the Limited Waiver
and Amendment Extension will terminate and the events of default
and anticipated events of default waived by the Limited Waiver
will, effective as of the end of the Amendment Extension Period,
immediately constitute events of default under the Credit
Facility. As long as no event of default has occurred under the
Credit Facility other than the events of default and anticipated
events of default waived by the Limited Waiver and on or prior to
November 30, 2009, if the Lenders and the Company have reached a
mutual agreement in principle on a term sheet containing the
significant terms and conditions for amending and restating the
Credit Facility, the Amendment Extension Period may be extended by
the Agent through December 20, 2009, the maturity date of the
Credit Facility. The Company continues to work actively with its
lenders to obtain an amendment to its existing $375 million Credit
Facility and extension of the December 20, 2009 maturity date of
the facility. The Company can offer no assurance as to the terms
of any extension or modifications or that it will be able to
obtain such a Credit Facility maturity extension or other
modifications at all or on acceptable terms, or obtain alternative
financing in the event it does not obtain such a Credit Facility
maturity extension and other necessary modifications.
Trust Preferred Dividend Disruption
In light of these ongoing negotiations and uncertainty, the
Company has not made the $639,000 quarterly payment due on
September 30, 2009, with respect to the $30 million issue of 8.52%
trust preferred securities, which constitutes an event of default
under those trust preferred securities and which entitles the
holders of such securities to accelerate payment and to exercise
other remedies. The Company did not make the $235,000 quarterly
payment due on October 30, 2009, with respect to the new junior
subordinated notes ("the New Junior Subordinated Notes") exchanged
by the Company on August 3, 2009, for the Company's $75 million
issue of trust preferred securities. If the $235,000 quarterly
payment is not made within the 30-day cure period under the
applicable indenture, an event of default will occur under the New
Junior Subordinated Notes, which would entitle the holders of such
securities to accelerate payment after December 1, 2009, and to
exercise other remedies. The Company cannot predict what action,
if any, the holders of these securities may take. The Company
also cannot predict when, and if, the Company will actually make
these quarterly payments.
Amex Listing in Jeopardy
On November 2, 2009, the Company received a written notice from
the NYSE Amex LLC stating that the Company is not in compliance
with the Exchange's continuing listing criteria set forth in
Sections 134 and 1101 of the NYSE Amex LLC Company Guide because
it failed to timely file its Annual Report on Form 10-K for the
fiscal year ended June 30, 2009, and such failure constitutes a
material violation of its listing agreement with the Exchange
authorizing the Exchange to suspend and, unless prompt corrective
action is taken, remove the Company's common stock from the
Exchange pursuant to Section 1003(d) of the Company Guide. The
Company intends to comply with requirements set forth in the
written notice by submitting a plan of compliance to the Exchange
by November 16, 2009, advising the Exchange of the actions the
Company intends to take to bring the Company into compliance with
the applicable provisions of the Company Guide by February 2,
2010.
As previously reported, the Company could not timely file its Form
10-K without unreasonable effort or expense. The Company is
working as expeditiously as possible to finalize its accounting
and related disclosure for the period covered by its Form 10-K and
currently expects to file the Form 10-K during the month of
December 2009.
The Company currently anticipates that the one-month liquidity
enhancement provided by the Amendment Extension Letter should meet
the Company's liquidity needs only up to approximately
November 30, 2009. The Company anticipates that without either a
Credit Facility maturity extension and other modifications, or an
additional amendment to the Credit Facility to increase borrowing
base availability on or before November 30, 2009: (i) the net
borrowing base availability at that time will be significantly
less than the borrowings under the revolving Credit Facility at
that time; (ii) the Company will be unable to pay an existing loan
fee earned by the lenders without an additional amendment to defer
the timing of the payment of such loan fee; (iii) the Company will
likely violate the minimum liquidity covenant at some time in or
before early December 2009; (iv) the Company will violate certain
other covenants under the Credit Facility at that time (or shortly
thereafter); and (v) the Company will likely not have sufficient
liquidity to continue its normal operations at that time (or
shortly thereafter). In addition, the Company may need additional
amendments to its Credit Facility for a variety of reasons on or
prior to November 30, 2009. For additional discussion of the
Company's liquidity, including a discussion of the scheduled
December 20, 2009 maturity date of the Company's Credit Facility,
please refer to the Liquidity and Capital Resources section of the
Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 2009, filed with the Securities and Exchange Commission
on May 15, 2009, as well as the Current Reports on Form 8-K and
press releases filed with the Securities and Exchange Commission
on August 14, 2009 and October 6, 2009, and the Company's Form
12b-25 filed with the Securities and Exchange Commission on
September 29, 2009.
About Orleans Homebuilders, Inc.
Orleans Homebuilders, Inc. -- http://www.orleanshomes.com/--
develops, builds and markets high-quality single-family homes,
townhouses and condominiums. The Company serves a broad customer
base including first-time, move-up, luxury, empty nester and
active adult homebuyers. The Company currently operates in the
following eleven distinct markets: Southeastern Pennsylvania;
Central and Southern New Jersey; Orange County, New York;
Charlotte, Raleigh and Greensboro, North Carolina; Richmond and
Tidewater, Virginia; Chicago, Illinois; and Orlando, Florida. The
Company's Charlotte, North Carolina operations also include
adjacent counties in South Carolina.
PACIFIC ETHANOL: Records Lower Net Loss of $11.9-Mil. in Q3
-----------------------------------------------------------
Pacific Ethanol Inc. filed its quarterly results with the
Securities and Exchange Commission, citing an $11,857,000 net loss
on $71,889,000 of net sale for the three months ended Sept. 30,
2009, compared with $70,690,000 net loss on $183,980,000 net sales
a year ago.
The Company has assets of $548,063,000 against total debts of
$362,630,000 as of Sept. 30, 2009. It has $11,336,000 in cash and
cash equivalents as of Sept. 30.
A full-text copy of the Company's quarterly results is available
for free at http://researcharchives.com/t/s?4909
About Pacific Ethanol, Inc.
Pacific Ethanol is the largest West Coast-based marketer and
producer of ethanol. Pacific Ethanol has ethanol plants in Madera
and Stockton, California; Boardman, Oregon; and Burley, Idaho.
Pacific Ethanol also owns a 42% interest in Front Range Energy,
LLC which owns an ethanol plant in Windsor, Colorado. Pacific
Ethanol has achieved its goal of 220 million gallons per year of
ethanol production capacity in 2008. In addition, Pacific Ethanol
is working to identify and develop other renewable fuel
technologies, such as cellulose-based ethanol production and
bio-diesel.
Five indirect wholly owned subsidiaries of Pacific Ethanol, Inc.
-- Pacific Ethanol Holding Co. LLC, Pacific Ethanol Madera LLC,
Pacific Ethanol Columbia, LLC, Pacific Ethanol Stockton, LLC and
Pacific Ethanol Magic Valley, LLC -- commenced a case by filing a
voluntary petition for relief under Chapter 11 of the Bankruptcy
Code before the United States Bankruptcy Court for the District of
Delaware on May 17, 2009.
Pacific Ethanol Holding Co. LLC and four affiliates filed for
Chapter 11 on May 17, 2009 (Bankr. D. Del. Case No. 09-11713).
Judge Kevin Gross handles the case. Attorneys at Cooley Godward
Kronish LLP represent the Debtors as counsel. Attorneys at Potter
Anderson & Corroon LLP are co-counsel. Epiq Bankruptcy Solutions
LLC is the claims agent. Pacific Ethanol Holding disclosed
$50 million to $100 million in assets and $100 million to
$500 million in debts in its petition.
Pacific Ethanol Inc. and its marketing subsidiaries, Kinergy
Marketing LLC, and Pacific Ag. Products, LLC, have not filed for
Chapter 11 bankruptcy protection. The Company is expected to
continue to manage the Plant Subsidiaries under an Asset
Management Agreement and Kinergy and PAP are expected to continue
to market and sell the Plant Subsidiaries' ethanol and feed
production under existing Marketing Agreements.
PARLUX FRAGRANCES: Earns $3 Million in Quarter Ended September 30
-----------------------------------------------------------------
Parlux Fragrances, Inc. disclosed last week results of its second
quarter ended September 30, 2009. Net sales reached
$56.5 million, an 8% increase over the prior year quarter of
$52.4 million. For the six-month period ended September 30, 2009,
net sales reached $80.1 million, a 6% increase over the prior year
period of $75.7 million.
Net profit for the quarter ended September 30, 2009, was
$3.0 million or $0.14 per share, compared to the prior year
comparable period net profit of $3.6 million or $0.17 per share.
For the six-month period ended September 30, 2009, net profit
reached $502,000, or $0.02 per share, compared to a net loss of
$1.2 million or $(0.06) per share in the prior year.
Mr. Neil J. Katz, chairman and chief executive officer, said, "We
have strategically continued to invest in building the Parlux
portfolio of brands, led by the recent launches of Queen Latifah,
Josie Natori, and Marc Ecko, all of which are exceeding retailers
planned sales in their respective distribution channels." Mr.
Katz continued, "As you are aware, we are transitioning out of our
GUESS? business on an orderly basis as of December 31, 2009, and
we fully expect that the new brands in fiscal year 2011 will
exceed our past GUESS? business."
Mr. Katz said, "I am extremely pleased that we have been able to
effectively launch three new brands, as well as a new Paris Hilton
and a new Jessica Simpson brand, while prudently maintaining
spending investment at prior year levels. This has allowed us to
absorb our first quarter loss, and to achieve profitability for
the six-month period ended September 30, 2009.
Mr. Katz concluded, "I believe that this performance, combined
with an anticipated improved holiday season, will help lead to a
positive conclusion on a new financing arrangement. In the
meantime, we are projecting to be cash-flow positive through the
balance of the year ending March 31, 2010, and remain prudently
optimistic regarding profitable results for fiscal 2010."
As of September 30, 2009, the Company's consolidated balance
sheets showed $148.4 million in total assets, $36.0 million in
total liabilities, and $112.4 million in total shareholders'
equity.
A full-text copy of the Company's consolidated financial
statements for the three months ended September 30, 2009, is
available for free at http://researcharchives.com/t/s?48fa
Liquidity and Capital Resources
Working capital was $102.9 million at September 30, 2009, as
compared to $102.5 million at March 31, 2009, primarily due to an
increase in accounts receivables from an increase in net sales for
the six-months ended September 30, 2009, partially offset by the
borrowings under the Company's line of credit.
Cash and cash equivalents decreased by $418,000 during the six-
months ended September 30, 2009, and increased by $2.8 million
during the six-months ended September 30, 2008.
During the six-months ended September 30, 2009, net cash used in
operating activities was $4.9 million, as compared to net cash
provided by operating activities of $3.4 million during the same
prior year period.
During the six-months ended September 30, 2009, net cash used in
investing activities was $1.7 million, as compared to net cash
used in investing activities of $136,000 during the same prior
year period.
During the six-months ended September 30, 2009, net cash provided
by financing activities was $6.2 million, as compared to net cash
used in financing activities of $475,000 during the same prior
year period.
The Company believes that funds from operations will be sufficient
to meet its current operating and seasonal needs through March 31,
2010.
Extension of Forbearance Period
As reported in the Troubled Company Reporter on November 3, 2009,
the Company 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 the
Company 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.
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) -- http://www.parlux.com/--
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.
PARMALAT SPA: Earns EUR104-Mil. in Third Quarter
------------------------------------------------
Armorel Kenna at Bloomberg News reports Parmalat SpA reported
third-quarter earnings before interest, taxes, depreciation and
amortization of EUR104 million.
Bloomberg relates the company said profitability rose almost 25%
in the first nine months on price increases and savings Parmalat
made on raw milk purchases.
According to Bloomberg, revenue for the first nine months rose
1.7% to EUR2.87 billion, while net income dropped 62% in the first
nine months after a decrease in proceeds from settlements related
to the company's 2003 bankruptcy.
About Parmalat S.p.A.
Headquartered in Milan, Italy, Parmalat S.p.A. --
http://www.parmalat.net/-- sells nameplate milk products
that can be stored at room temperature for months. It also has
about 40 brand product lines, which include yogurt, cheese,
butter, cakes and cookies, breads, pizza, snack foods and
vegetable sauces, soups and juices.
The Company's U.S. operations filed for Chapter 11 protection on
February 24, 2004 (Bankr. S.D.N.Y. Case No. 04-11139). Gary
Holtzer, Esq., and Marcia L. Goldstein, Esq., at Weil Gotshal &
Manges LLP, represent the Debtors. When the U.S. Debtors filed
for bankruptcy protection, they reported more than US$200 million
in assets and debts. The U.S. Debtors emerged from bankruptcy on
April 13, 2005.
Parmalat S.p.A. and its Italian affiliates filed separate
petitions for Extraordinary Administration before the Italian
Ministry of Productive Activities and the Civil and Criminal
District Court of the City of Parma, Italy on December 24, 2003.
Dr. Enrico Bondi was appointed Extraordinary Commissioner in
each of the cases. The Parma Court has declared the units
insolvent.
On June 22, 2004, Dr. Bondi filed a Sec. 304 Petition, Case No.
04-14268, in the United States Bankruptcy Court for the Southern
District of New York.
Parmalat has three financing arms: Dairy Holdings Ltd., Parmalat
Capital Finance Ltd., and Food Holdings Ltd. Dairy Holdings and
Food Holdings are Cayman Island special-purpose vehicles
established by Parmalat S.p.A. The Finance Companies are under
separate winding up petitions before the Grand Court of the Cayman
Islands. Gordon I. MacRae and James Cleaver of Kroll (Cayman)
Ltd. serve as Joint Provisional Liquidators in the cases. On
January 20, 2004, the Liquidators filed Sec. 304 petition, Case
No. 04-10362, in the United States Bankruptcy Court for the
Southern District of New York. In May 2006, the Cayman Island
Court appointed Messrs. MacRae and Cleaver as Joint Official
Liquidators. Gregory M. Petrick, Esq., at Cadwalader, Wickersham
& Taft LLP, and Richard I. Janvey, Esq., at Janvey, Gordon,
Herlands Randolph, represent the Finance Companies in the Sec. 304
case.
The Honorable Robert D. Drain presided over the Parmalat Debtors'
U.S. cases. On June 21, 2007, the U.S. Court granted Parmalat
permanent injunction.
P.H. INVESTOR: Chapter 11 Bankruptcy Filing Causes Conflicts
------------------------------------------------------------
Ben Sutherly, staff writer of Dayton Daily News, reports that P.H.
Investor LLC made a voluntary filing under Chapter 11 in the U.S.
Bankruptcy Court.
According to its 2008 Form 1065 U.S. Return of Partnership Income,
the company listed $762,466 in assets and $40,737, and a lost of
$40,737, Mr. Sutherly says.
Mr. Sutherly relates that K. Dean Wertz the company's president
and sole shareholder, cited disagreements within the company's
ownership for the need to reorganize its finances but declined to
elaborate. Mr. Wertz added that receivership has been pending
since October 28.
P.H. Investors LLC operates 10,000-square-foot shopping center on
Pendleton Circle in Middletown.
PHOENIX COMPANIES: Fitch Cuts Insurer Strength Rating to 'BB+'
--------------------------------------------------------------
Fitch Ratings has downgraded the Insurer Financial Strength
ratings assigned to the life insurance subsidiaries of The Phoenix
Companies, Inc., to 'BB+' from 'BBB'. The Rating Outlook remains
Negative.
Fitch's rating action reflects: 1) its ongoing concerns with
respect to PNX's strategic direction and the impact on its credit
profile longer term; 2) its view that PNX has limited flexibility
to improve capital excluding any regulatory relief; 3) the
maintenance of the company's current policyholder dividend scale
into 2010, which Fitch considers an important lever for the
preservation of capital and has been lowered by many of PNX's
peers; and 4) negative credit migration in the company's
structured portfolio, which could put further pressure on capital.
In Fitch's view, and consistent with its rating definitions, the
combination of these concerns has elevated vulnerability for PNX
to cease or interrupt policyholder payments, particularly as the
result of adverse economic or market changes over time. However,
business or financial alternatives may be available to allow for
policyholder and contract obligations to be met in a timely
manner.
The Negative Outlook is primarily based on concern over PNX's weak
operating earnings profile, very limited financial flexibility,
and an expectation of further deterioration in the company's
capital position over the near-term driven by credit losses.
In Fitch's view, the uncertainty of PNX's strategic direction
could have a negative long-term impact on its credit profile.
Fitch believes the potential income generated by PNX's new
distribution company, Saybrus Partners, will not offset the
decline in earnings from insurance operations. Fitch expects
long-term insurance earnings to diminish more rapidly than
original expectations primarily as a result of elevated life and
annuity surrenders coupled with the very low sales volume.
Although Fitch recognizes that the latter will result in less
capital strain in the near term, the negative longer-term
implications for earnings growth and statutory capital
regeneration is of more concern.
Fitch also believes PNX's capital flexibility is limited and that
it will be difficult for the company to meet its stated RBC target
of 300% by year-end 2009, excluding regulatory relief. PNX has
estimated its RBC to be 243% at the end of the third quarter of
2009 (3Q'09), excluding regulatory relief. Self generation of
capital through statutory earnings may be difficult with an
estimated net loss of $35 million through 3Q'09. Fitch estimated
PNX's total adjusted capital to be $778 million at the end of
3Q'09, relatively consistent with second quarter results and down
23% from year-end 2008 ($1,013 million). Approximately 22% of
PNX's estimated TAC at Sept. 30, 2009 is made up of surplus notes.
Fitch considers the policyholder dividend one of PNX's most
powerful capital management tools. Most companies with
significant participating policies lowered their 2010 dividend
scale to reflect the difficult economic environment, particularly
high credit losses. In September 2009, PNX announced that it
would maintain the current policyholder dividend scale effective
Jan. 1, 2010, for its participating policies. The amount expected
to be paid in 2010 is $300 million.
Ratings migration was meaningful in 3Q'09 with below investment
grade bonds moving to 11.4% of total fixed income securities up
from 10.5% at 2Q'09 and 8.2% at year-end 2008. Negative rating
migration coupled with declining statutory capital has caused the
BIG-to-TAC ratio to increase from 79% at year-end 2008 to 155%
estimated at Sept. 30, 2009. Additionally, the composition of BIG
portfolio has also migrated to lower rating levels. Based on the
amount and quality of the BIG exposure, Fitch believes PNX is more
vulnerable to potential credit losses than considered in the
previous rating.
Fitch has downgraded these ratings:
Phoenix Life Insurance Company
AGL Life Assurance Company
PHL Variable Insurance Company
Phoenix Life and Annuity Company
-- IFS to 'BB+' from 'BBB'.
The Outlook remains Negative.
PIONEER NATURAL: Fitch Assigns 'BB+' Rating on Note Offering
------------------------------------------------------------
Fitch Ratings has assigned a 'BB+' rating to Pioneer Natural
Resources' senior unsecured note offering. Fitch also maintains
these debt ratings on Pioneer:
-- Issuer Default Rating at 'BB+';
-- Senior unsecured notes at 'BB+';
-- Credit facility at 'BB+'.
The Rating Outlook is Stable.
The note offering is not expected to increase debt levels at the
company as proceeds are expected to be used to repay outstanding
revolver borrowings. At Sept. 30, 2009, Pioneer had approximately
$730 million of outstanding borrowings under the company's
$1.5 billion senior unsecured credit facility. While the current
transaction will increase liquidity at Pioneer, it will also limit
the amount of future debt reductions available to Pioneer
management. However, given the expected proceeds from the note
offering in the range of $300-$500 million, Fitch anticipates that
the company will still be able to modestly reduce debt levels as
proceeds from free cash flow are used to reduce the remaining
revolver borrowings and as the company's volumetric production
payment obligations continue to amortize (as Fitch includes these
in the total debt levels).
The senior notes are expected to rank pari passu with the existing
senior unsecured notes for the company and mature on Jan. 15,
2020. Covenant restrictions include limitations on liens and
limitations on sale and leaseback transactions. There are no
financial covenants in the supplemental indenture. Noteholders
will benefit from change of control protections in the form of a
put at 101% of par value should a change of control be accompanied
by a rating decline. Additional protection stems from a possible
Pioneer USA (the company's principal U.S. subsidiary) guarantee if
the company's senior unsecured credit facility obtains a guarantee
by Pioneer USA.
Pioneer's ratings continue to be supported by the company's long-
lived onshore reserve base; positive production outlook stemming
from the 2009 VPP expirations and increased 2010 capital spending
levels; and the continued expectation of positive free cash flows.
Offsetting factors include the high levels of debt relative to
production levels; weak five-year average organic reserve
replacement rates; and the company's significant exposure to
natural gas prices.
Credit metrics continued to weaken as of Sept. 30, 2009 reflecting
lower commodity prices and the resulting lower levels of EBITDAX.
Increased hedging activity and the potential for additional debt
reductions stemming from FCF and VPP amortizations are expected to
stabilize credit metrics over the next twelve months. For the
latest 12 months period ending Sept. 30, 2009, Pioneer's EBITDAX
(earnings before interest, taxes, depreciation, amortization and
exploration expense) was $1.03 billion which resulted in interest
coverage of 5.8 times (x) and leverage, as measured by debt-to-
EBITDAX, of 3.0x. At year-end 2008, debt/boe of proven reserves
was $3.43/boe ($.57/mcfe) and debt/boe of proven developed
reserves was $5.94/boe ($.99/mcfe).
Fitch continues to expect Pioneer to generate positive free cash
flows in 2009 and 2010 stemming from the significantly reduced
capital expenditures (relative to 2008 levels). Improved
operating cash flows are being further supported by falling
volumetric production payment obligations beginning in January
2010 and by increased hedging activity. As a result, Pioneer is
anticipated to continue to direct cash flows to reduce remaining
borrowings under the company's credit facility following the
current note offering. Pioneer is expected to increase capital
expenditure levels in 2010 as it looks to stem declining
production levels and begin growing production and reserves
associated with the company's oil and liquids rich assets. Rising
debt levels (given the current asset base and production profile)
or significant share repurchases would be a catalyst for negative
rating action.
Pioneer maintains liquidity from cash and equivalents
($55.6 million at Sept. 30, 2009); its $1.5 billion credit
facility ($724 million of availability at Sept. 30, 2009); and
operating cash flows of $625.5 million during the LTM period
ending Sept. 30, 2009. Current maturities are minimal, with the
only maturity facing the company coming in 2012 with the maturing
of $6.1 million of the 5.875% senior notes and the expiration of
the company's credit facility (a $1.5 billion facility with
$776 million of outstanding borrowings and LCs). In addition,
since Fitch includes 100% of VPP balances in the debt
calculations, debt levels will fall associated with VPP
amortizations going forward. This includes approximately
$111 million in 2009, $90 million in 2010 and $45 million in 2011.
Total VPP obligations at Sept. 30, 2009, were $214.2 million.
Additional liquidity is available to the company as a result of
the IPO of Pioneer Southwest. The presence of the MLP benefits
the parent company because of its ability to 'drop down' or sell
assets to the MLP and the existence of a $300 million revolving
credit facility at the MLP to finance these purchases. Note that
the MLP currently has $135 million of outstanding borrowings on
the facility and has access to approximately $275 million in
borrowing capacity on the revolver due to covenant restrictions
(an additional borrowing capacity of $140 million). Additionally,
Pioneer has the ability to sell additional units in the MLP to the
public to raise additional capital without diluting Pioneer
shareholders. Liquidity remains adequate at Pioneer, and the
company remains in compliance with all debt covenants.
Pioneer is a large independent oil & gas exploration and
production company with operations in the U.S. (Permian Basin,
Mid-Continent, Rockies, Gulf Coast & Alaska) and Africa (Tunisa
and South Africa). At year-end 2008, the company had
approximately 960 MMBOE of proven reserves. Pioneer is
headquartered in Irving, TX.
PIONEER NATURAL: Moody's Assigns 'Ba1' Rating on $300 Mil. Notes
----------------------------------------------------------------
Moody's Investors Service assigned a Ba1 (LGD 4, 53%) rating to
Pioneer Natural Resource Company's proposed $300 million senior
unsecured notes due 2020. Moody's also affirmed its Ba1 Corporate
Family Rating, Ba1 Probability of Default Rating, and its existing
senior unsecured note rating of Ba1 (LGD 4, 53%) changed from (LGD
4, 56%). The outlook remains negative. The ratings are subject
to review of final documents and terms and conditions of the
proposed senior unsecured notes.
The proceeds from the pending $300 million senior unsecured notes
offering will be used to repay a like amount of outstandings under
Pioneer's senior unsecured revolver due 2012.
Pioneer's negative outlook reflects the company's continued high
leverage, particularly as measured by debt/average daily
production, which is among the highest in the Ba peer group, and
the weak capital productivity as indicated by relatively high F&D
cost compared to its peers. Concurrently, over the past four
years the company has repurchased approximately 40.5 million
shares, or approximately 28% of shares outstanding, to increase
shareholder returns at the detriment of debt reduction.
Pioneer's Ba1 rating is supported by its large scale and
underlying long-lived asset base. Additionally Pioneer has a
meaningful exposure to crude oil production, which Moody's
consider to have a stronger near-term fundamental pricing outlook
compared to the weaker fundamentals of the North American natural
gas market. For Pioneer's outlook to change to stable a
meaningful demonstration of capital productivity improvement as
measured by declining F&D and production costs is needed.
Furthermore leverage would have to be expected to reduce to levels
comparable with similarly rated peers specifically debt/average
daily production would have to be expected to trend closer to the
$20,000/boe per day range than the current high of close to
$30,000/boe per day. Pioneer's rating could be downgraded if a
persistent emphasis of stock buyback activities continue, a new
aggressive governance style emphasizing shareholder returns is
initiated, or Pioneer continues to outspend cashflow.
The last rating action was on January 28, 2008, at which time
Moody's confirmed Pioneer's ratings and assigned a negative
outlook.
Pioneer Natural Resources headquartered in Irving, Texas, operates
primarily in North America with over 96% of its proved reserves
and just under 90% of its production concentrated in the United
States. Core production holdings are: the Spraberry trend oil
field (West Texas), the Raton Basin coal bed methane natural gas
field (Southern Colorado), the Hugoton and West Panhandle natural
gas and liquid fields (Kansas and the Texas Panhandle,
respectively) and the Edwards Trend natural gas holdings (South
Texas).
PIONEER NATURAL: S&P Assigns 'BB+' Rating on $300 Mil. Notes
------------------------------------------------------------
Standard & Poor's Ratings Services assigned an issue-level and a
recovery rating to Pioneer Natural Resources Co.'s proposed
$300 million senior unsecured notes due 2020. The issue-level
rating is 'BB+' (the same as the corporate credit rating). At the
same time S&P assigned a recovery rating of '3', indicating S&P's
expectation of meaningful (50%-70%) recovery in the event of a
payment default.
The Irving, Texas-based oil and gas exploration and production
company intends to use proceeds to pay down debt outstanding under
its revolving credit facility. Pro forma for the notes issuance
S&P expects Pioneer to have slightly more than $1 billion
available under its $1.5 billion unsecured revolving credit
facility due 2012.
S&P's corporate credit rating on Pioneer is 'BB+' and the outlook
is negative.
Ratings List
Pioneer Natural Resources Co.
Corporate credit rating BB+/Negative/--
Ratings Assigned
Pioneer Natural Resources Co.
$300M senior unsecured notes BB+
Recovery rating 3
PRESSTEK INC: Freimuth and Cook Join Board; Steenburgh Resigns
--------------------------------------------------------------
Presstek, Inc., said Stanley E. Freimuth and Jeffrey A. Cook have
been elected to its Board of Directors. Mr. Freimuth is a senior
executive with broad operating experience in both consumer and
industrial markets and has extensive Board experience in both
corporate and not-for-profit entities. Mr. Cook has 30 years of
financial leadership experience working with multinational
corporations.
Mr. Freimuth spent nearly 25 years with Fujifilm USA Inc., where
he ran its Graphic Systems Division for 17 years. He then served
in the roles of Chief Operating Officer and Senior Executive Vice
President and Chief Administrative Officer, where he had
responsibility for all Fujifilm USA businesses and led the
company's successful strategy to transition from an analog to
digital business model. Mr. Freimuth has served on a number of
corporate Boards and is a current or former member of the Board of
Fujifilm USA, Enovation Graphic Systems Inc. and Tracer Imaging.
He also served as Chairman of the Board of NPES, the association
for suppliers to the printing and publishing industry and was
Chairman of the Board for the Graphic Arts Show Company. Mr.
Freimuth is also active in the not-for-profit area and serves on
the Boards of the Westchester County Association and Children's
Hospital Foundation at Westchester Medical Center. He is a member
of the Board of the Smithsonian National Zoological Park and the
Advisory Board of New York University's School of Continuing and
Professional Studies Master of Arts program in Graphic
Communications Management and Technology.
The Company said in a statement that Mr. Cook brings significant
financial leadership to Presstek, which he joined in February 2007
as Senior Vice President and Chief Financial Officer. He was
appointed Executive Vice President in February 2008. Previously,
Mr. Cook held financial leadership roles at various General
Electric businesses, Moore Inc., and Kodak Polychrome Graphics, a
joint venture between Kodak and Sun Chemical Corp. where he was
Senior Vice President and Chief Financial Officer.
"We are very pleased to welcome Stan and Jeff to our Board," said
Presstek President, Chief Executive Officer and Chairman of the
Board, Jeffrey Jacobson. "Stan brings a wealth of knowledge and
industry experience to Presstek's Board and will make a tremendous
contribution toward shaping Presstek's digital and international
growth strategy. Jeff is a seasoned financial executive who has
already significantly contributed to making Presstek a stronger
company financially. His strategic leadership and financial
expertise will be invaluable at the Board level."
"Presstek is an innovative company with a highly accomplished
management team," said Mr. Freimuth. "I am excited to join
Presstek's Board and look forward to actively contributing to
shaping the company's vision and helping drive future growth."
The Company also said Frank D. Steenburgh has resigned from the
Board so that he can devote more time to new business activities
that will prevent him from dedicating the time necessary to fully
perform his duties as a member of the Board.
"On behalf of the entire Board of Directors and management team, I
would like to thank Frank for his service to our Board," said Mr.
Jacobson. "Frank's leadership and experience in the graphic arts
industry have helped advance Presstek's digital growth business
and we will miss his vision and guidance. We wish him all the
best."
"As excited as I was to join the Presstek Board of Directors, I
now reluctantly step down as I will be focusing primarily on my
full-time responsibilities as the Chief Marketing Officer of
ColorCentric Corp. I am excited about Presstek's future and I
have told Jeff and his team that I am always available to them."
Forbearance
As reported by the Troubled Company Reporter on October 9, 2009,
Presstek, Inc., and certain of its affiliated U.S. companies on
October 1, entered into a Forbearance and Amendment Agreement with
its bank lending group consisting of RBS Citizens, National
Association, as Administrative Agent and Lender, Keybank National
Association and TD Bank, N.A. The Amendment amends an Amended and
Restated Credit Agreement, dated as of November 5, 2004, as
amended, among the Company and the Lenders. The expiration date
of the Credit Agreement has been extended from November 4, 2009,
to December 15, 2009. The Forbearance Termination Date will be
November 30, 2009, if the Company elects not to pay a fee of
$20,000 to the Lenders to extend the Forbearance Termination Date
from November 30, 2009, to December 15, 2009.
About Presstek
Greenwich, Connecticut-based Presstek, Inc. (NASDAQ: PRST) --
http://www.presstek.com/-- manufactures and markets high tech
digital imaging solutions to the graphic arts and laser imaging
markets. Presstek's patented DI(R), CTP and plate products
provide a streamlined workflow in a chemistry-free environment,
thereby reducing printing cycle time and lowering production
costs. Presstek solutions are designed to make it easier for
printers to cost effectively meet increasing customer demand for
high-quality, shorter print runs and faster turnaround while
providing improved profit margins. Presstek subsidiary, Lasertel,
Inc., manufactures semiconductor laser diodes for Presstek's and
external customers' applications.
PRESSTEK INC: Posts $5.9 Million Net Loss for Oct. 3 Quarter
------------------------------------------------------------
Presstek, Inc. reported total revenue of $33.0 million for the
third quarter ended October 3, 2009, compared with $48.5 million
in the third quarter of 2008, a decline of $15.5 million, or
approximately 32%. During the third quarter of 2009, the Company
incurred a loss from continuing operations of $6.6 million, or
$0.18 per share, including (on a pre-tax basis) a largely non-cash
inventory-related charge of $2.7 million and a restructuring
charge of $1.0 million related to the $10 million cost reduction
program announced in the second quarter of 2009. Excluding
pre-tax non-routine charges of $3.7 million in the third quarter
of 2009 and $400,000 in the third quarter of 2008, the loss from
continuing operations would have been $3.0 million, or $0.08 per
share, in the third quarter of 2009, compared with income from
continuing operations of $1.0 million, or $0.03 per share, in the
third quarter of 2008.
The Company reported a net loss of $5.9 million for the three
months ended October 3, 2009, from net income of $195,000 for the
quarter ended September 27, 2008. The Company posted a net loss
of $48.5 million for the nine months ended October 3, 2009, from
net income of $980,000 for the nine-month period ended September
27, 2008.
As of October 3, 2009, the Company had $113.0 million in total
assets against $55.6 million in total liabilities.
Results from continuing operations exclude the Company's Lasertel
subsidiary, which is currently being marketed for sale and is
recorded in discontinued operations. The Company expects to reach
an agreement for the sale of its Lasertel subsidiary in the fourth
quarter of 2009 with a closing anticipated in the first quarter of
2010. Lasertel's results improved during the third quarter of
2009 with income from operations, net of tax, of $700,000,
compared with a loss from operations, net of tax, of $400,000 in
the same period last year.
"Although revenues for the quarter continue to be impacted by the
global economic recession, sequential quarterly revenues have
stabilized and we anticipate that revenue will begin to grow,"
said Presstek Chairman, President and Chief Executive Officer,
Jeff Jacobson. "We have successfully reduced expenses and managed
cash, while staying focused on our strategic initiatives of
expanding our product portfolio and distribution channels. During
the third quarter, we debuted and sold our first 52DI with aqueous
coating capability to Quad/Graphics, the largest privately held
printer in the world, and have already accepted several additional
customer orders. We also introduced Aeon, our first long-run,
non-preheat thermal CTP plate, which will be available by the end
of this year. In addition, we have made tremendous progress
expanding our distribution channels to nearly 60 distributor
locations in our Europe, Africa, Middle East and Asia Pacific
regions."
"During the last two years, we have implemented business
improvement initiatives that have resulted in gross profit and
operating expense improvements of approximately $40 million," said
Presstek Executive Vice President and Chief Financial Officer,
Jeff Cook. "With the vast majority of the cost cutting
initiatives complete, we have a cost structure that is
appropriately aligned with our revenue base. I am optimistic that
our lean cost structure combined with the positive sales prospects
we are seeing will lead to positive EBITDA in the fourth quarter
of 2009."
Interest expense increased to $500,000 in the third quarter of
2009, compared with $100,000 in the third quarter of 2008. The
increase is due to higher interest rates and a $250,000 fee
associated with a modification of the Company's credit agreement.
The Company is in discussions concerning a new credit facility and
expects to have an arrangement in place on or prior to
December 15, 2009, sufficient to repay the Company's outstanding
indebtedness and provide for continuing operations.
The Company's third quarter 2009 debt net of cash totaled
$16.2 million, compared with $13.3 million in the third quarter of
2008. Debt net of cash is down 56% from its high of $37.0 million
in March 2007.
"With the anticipated continued impact of the economy on our
financial results, we had previously indicated that, excluding
non-routine charges in both quarters, our third quarter operating
loss would be in line with our second quarter loss of
$3.6 million. In addition, we would be incurring costs related to
Print 09, North America's largest printing trade show held during
the third quarter," added Mr. Jacobson. "I am encouraged that
with a third quarter operating loss of $2.4 million, absent non-
routine charges, the business performed better than expected.
With the talented and dedicated employees we have and the steps we
have taken to ensure that we are well positioned to thrive once
the economy turns around, I am confident of the Company's future
success."
A full-text copy of the Company's earnings release is available at
no charge at http://ResearchArchives.com/t/s?48fb
Forbearance
As reported by the Troubled Company Reporter on October 9, 2009,
Presstek, Inc. and certain of its affiliated U.S. companies on
October 1, entered into a Forbearance and Amendment Agreement with
its bank lending group consisting of RBS Citizens, National
Association, as Administrative Agent and Lender, Keybank National
Association and TD Bank, N.A. The Amendment amends an Amended and
Restated Credit Agreement, dated as of November 5, 2004, as
amended, among the Company and the Lenders. The expiration date
of the Credit Agreement has been extended from November 4, 2009,
to December 15, 2009. The Forbearance Termination Date will be
November 30, 2009, if the Company elects not to pay a fee of
$20,000 to the Lenders to extend the Forbearance Termination Date
from November 30, 2009, to December 15, 2009.
About Presstek
Greenwich, Connecticut-based Presstek, Inc. (NASDAQ: PRST) --
http://www.presstek.com/-- manufactures and markets high tech
digital imaging solutions to the graphic arts and laser imaging
markets. Presstek's patented DI(R), CTP and plate products
provide a streamlined workflow in a chemistry-free environment,
thereby reducing printing cycle time and lowering production
costs. Presstek solutions are designed to make it easier for
printers to cost effectively meet increasing customer demand for
high-quality, shorter print runs and faster turnaround while
providing improved profit margins. Presstek subsidiary, Lasertel,
Inc., manufactures semiconductor laser diodes for Presstek's and
external customers' applications.
PROTOSTAR LTD: Court Approves Sale of PS I Assets to Intelsat
-------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware authorized
ProtoStar Ltd. and its debtor-affiliates to sell substantially all
assets of ProtoStar I Ltd. and assume and assign certain executory
contracts and unexpired leases of PS I to Intelsat Subsidiary
Holding Company, Ltd.
As reported in the Troubled Company Reporter on Aug. 12, 2009, the
assets to be sold include all real and personal, tangible and
intangible property and assets of PS I, and all proceeds, rents or
profits thereof, and all trade names, trademarks, copyrights, and
other intellectual property and license rights owned by PS I.
Eutelsat America Corp. was the next highest bidder.
Chapter 11 Plan
ProtoStar Ltd. and its debtor-affiliates delivered to the U.S.
Bankruptcy Court for the District of Delaware a disclosure
statement with respect to their joint Chapter 11 plan of
reorganization, which is premised upon the receipt and
distribution of sales proceeds from the auctions of satellites.
All claimholders, other than holders of priority non-tax claims,
equity interest and intercompany claims, are allowed to vote for
the plan. The Debtors' plan did not indicate how much each of the
holders is expected to recover from its allowed claim.
A full-text copy of the Debtors' disclosure statement is available
for free at http://ResearchArchives.com/t/s?4635
A full-text copy of the Debtors' Chapter 11 plan is available for
free at http://researcharchives.com/t/s?4636
About Intelsat
Intelsat is the leading provider of fixed satellite services
worldwide. For 45 years, Intelsat has been delivering information
and entertainment for many of the world's leading media and
network companies, multinational corporations, Internet service
providers and governmental agencies. Intelsat's satellite,
teleport and fiber infrastructure is unmatched in the industry,
setting the standard for transmissions of video, data and voice
services. From the globalization of content and the proliferation
of HD, to the expansion of cellular networks and broadband access,
with Intelsat, advanced communications anywhere in the world are
closer, by far.
About ProtoStar Ltd.
Hamilton, HM EX, Bermuda-based ProtoStar Ltd. is a satellite
operator formed in 2005 to acquire, modify, launch and operate
high-power geostationary communication satellites for direct-to-
home satellite television and broadband internet access across the
Asia-Pacific region.
The Company and its affiliates filed for Chapter 11 on July 29,
2009 (Bankr. D. Del. Lead Case No. 09-12659). The Debtor selected
Pachulski Stang Ziehl & Jones LLP as Delaware counsel; Law Firm of
Appleby as their Bermuda counsel; UBS Securities LLC as financial
advisor & investment banker and Kurtzman Carson Consultants LLC as
claims and noticing agent. In their petition, the Debtors listed
between $100 million and $500 million each in assets and debts.
As of December 31, 2008, ProtoStar's consolidated financial
statements, which include non-debtor affiliates, showed total
assets of $463,000,000 against debts $528,000,000.
PTC ALLIANCE: To Auction All Assets on December 16
--------------------------------------------------
MetalBulletin reports that PTC Alliance Corp. will be auctioned on
Dec. 16, 2009, at the Offices of DLA Piper US LLP in New York.
The report notes that the procedures to govern the sale the
company have been approved by the Court.
Black Diamond Capital Management LLC of Greenwich, Connecticut,
was name stalking-horse bidder for the company's assets. Black
Diamond made a $112.5 million bid, the report says, citing papers
filed with the court.
Headquartered in Wexford, Pennsylvania, PTC Alliance Corp. makes
welded and cold drawn mechanical steel tubing and tubular shapes,
chrome-plated bar products and precision components. The Company
and its affiliates filed for Chapter 11 protection on October 1,
2009 (Bankr. D. Del. Lead Case No. 09-13395). The Debtors
selected Reed Smith LLP as their counsel. PTC Alliance listed,
in its petition, assets between $50 million and $100 million, and
debts between $100 million and $500 million.
PURPLE COMMUNICATIONS: Gets Lenders Forbearance Until Nov. 20
-------------------------------------------------------------
Purple Communications, Inc., is a party to a Credit Agreement,
dated as of January 10, 2008, with lenders, the letter of credit
issuers from time to time party thereto, Churchill Financial LLC,
as administrative agent, and Ableco Finance LLC.
On October 15, 2009, the Company entered into a Forbearance
Agreement and Fourth Amendment to the First Lien Credit Agreement,
pursuant to which, among other things, the First Lien
Administrative Agent, the Collateral Agent and the First Lien
Lenders agreed to forbear from exercising their rights and
remedies in respect of certain events of default under the First
Lien Credit Agreement until October 31, 2009. On October, 30,
2009, the Company entered into a First Amendment to Forbearance
Agreement and Fourth Amendment to the First Lien Credit Agreement,
pursuant to which among other things, the First Lien
Administrative Agent, the Collateral Agent and the First Lien
Lenders agreed to forbear from exercising their rights and
remedies in respect of certain events of default under the First
Lien Credit Agreement until November 4, 2009.
On November 4, 2009, the Company entered into a Second Amendment
to Forbearance Agreement and Fourth Amendment to the First Lien
Credit Agreement, pursuant to which among other things, the First
Lien Administrative Agent, the Collateral Agent and the First Lien
Lenders agreed to forbear from exercising their rights and
remedies in respect of certain events of default under the First
Lien Credit Agreement until November 20, 2009.
The Company is a party to that certain Second Lien Credit
Agreement, dated as of January 10, 2008, by and among the Company,
as borrower, the lenders from time to time party thereto, and
Clearlake Capital Group, L.P., as administrative agent.
On November 4, 2009, the Company entered into a Forbearance
Agreement and Fourth Amendment to the Second Lien Credit
Agreement, pursuant to which (1) the Second Lien Agent agreed to
allow the Company to pay in kind interest due and payable under
the Second Lien Credit Agreement from July 1, 2009 through June
30, 2010, (2) the Second Lien Lenders agreed to refund to the
Company cash interest actually paid by the Company to the Second
Lien Lenders in the amount of $735,000, and (3) the Second Lien
Agent and the Second Lien Lenders agreed to forbear from
exercising their rights and remedies in respect of certain events
of default under the Second Lien Credit Agreement until
November 20, 2009.
The Company has previously filed an Intercreditor Agreement, dated
as of January 10, 2008, by and among the First Lien Administrative
Agent, the Collateral Agent and the Second Lien Agent. On
November 4, 2009, the Company entered into the First Amendment to
Intercreditor Agreement, which incorporates revisions to the
Intercreditor Agreement necessary to implement changes in the
terms of the First Lien Credit Agreement and Second Lien Credit
Agreement resulting from the Forbearance Agreements discussed
above.
Delisting Notice
On November 4, 2009, the Company provided notice to The NASDAQ
Stock Market that the Company has determined to voluntarily delist
its common stock, par value $0.01 per share, from The NASDAQ
Capital Market.
Given the Company's pending regulatory matters, the Board of
Directors of the Company has determined that the compliance costs,
listing fees and expenses and regulatory and administrative
burdens of maintaining the listing with NASDAQ outweighed the
benefits.
The Company intends to file a notification of removal from listing
on Nasdaq on Form 25 with the Securities and Exchange Commission
on or about November 16, 2009. The withdrawal of the Company's
Common Stock from listing on NASDAQ will be effective 10 days
after the filing of the Form 25 with the SEC. The Company does not
currently intend to relist its securities on another exchange; it
is expected that the Company's securities will trade over-the-
counter on the Pink Sheets and/or the OTC Bulletin Board although
the Company can give no assurances in that regard.
Departure of Officer
Dominic Gomez's employment with the Company as President ended
with his last day being, Friday, November 6, 2009. Mr. Gomez's
separation from the Company is not as a result of any disagreement
with the Company on any matter relating to the Company's
operations, policies or practices. Until the Company appoints a
successor to Mr. Gomez's position, John Ferron will be responsible
for the duties of President.
About Purple Communications
Purple Communications, Inc., formerly GoAmerica, Inc. is a
communications service provider of video relay and text relay
services and professional interpreting, offering array of options
designed to meet the varied communication needs of its customers.
The Company's vision is to enable free-flowing communication
between people, inclusive of differences in abilities, languages,
or locations. On January 10, 2008, the Company acquired
Telecommunications Relay Services (TRS) division of MCI
Communications Services, Inc. (Verizon), a provider of relay
services transactions and Hands On Video Relay Services, Inc.
(HOVRS), a California-based provider of video relay and
interpreting services. On July 1, 2008 the Company acquired Sign
Language Associates, Inc. (SLA), a provider of community
interpreting services and Visual Language Interpreting, Inc.
(VLI), a Virginia-based provider of community interpreting
services.
Purple Communications has assets of $161,094,000 against debts of
$88,101,000 as of Sept. 30, 2009.
RADICAL BUNNY: Partially Settles With SEC Over Fraud
----------------------------------------------------
Radical Bunny LLC has reached a partial settlement with the U.S.
Securities and Exchange Commission, which could preserve some
money for the firm's 900-plus investors, who are trying to recover
their losses from the company's pending Chapter 11 bankruptcy
case, Andrew Johnson at the Arizona Republic.
Mr. Johnson relates that the SEC reached the agreement for a
permanent injunction with the company buy not its four managers.
The Trouble Company Report said on July 30, 2009, the defendants
are Radical Bunny members:
-- Tom Hirsch,
-- Harish P. Shah,
-- Berta Walder, and
-- Howard Walder.
A person familiar with the matter said the SEC also could pursue
monetary restitution from the firm, but that depends on what
happens in the company's bankruptcy, Mr. Johnson notes.
Based in Phoenix, Arizona, Radical Bunny LLC is a real-estate
financier. On the Web: http://radicalbunny.com/
As reported by the Troubled Company Reporter on October 13, 2008,
three investors -- Cathy Baker of Chandler; Laing Kandel of
Brooklyn, New York; and Steven Friedberg -- filed an involuntary
petition under Chapter 7 of the Bankruptcy Code against Radical
Bunny LLC in the United States Bankruptcy Court for the District
of Arizona.
READER'S DIGEST: 28 Units' Schedules of Assets & Liabilities
------------------------------------------------------------
Twenty-eight debtor-affiliates of The Reader's Digest Association,
Inc., reported assets ranging from $0 to $394.77 million:
Debtor Assets Liabilities
------ ------ -----------
Reiman Media Group, Inc. $394,770,938 $2,289,592,955
WRC Media, Inc. $188,219,935 $2,274,828,139
Reader's Digest Consumer $156,243,225 $2,274,913,607
Services, Inc.
RD Large Edition, Inc. $37,793,609 $2,274,894,264
World Almanac Education $27,506,044 $2,274,906,943
Group, Inc.
R. D. Manufacturing Corporation $20,840,094 $2,276,924,177
Weekly Reader Custom $16,734,783 $2,274,829,000
Publishing, Inc.
Reader's Digest Financial $13,734,910 $2,274,828,139
Services, Inc.
Reader's Digest Children's $10,354,479 $2,302,322,249
Publishing, Inc.
World Wide Country Tours, Inc. $7,221,964 $2,274,945,473
Taste of Home Media Group, Inc. $4,255,716 $2,274,828,139
Reiman Manufacturing, LLC $4,002,280 $2,276,839,870
RDA Holding Co. $2,958,790 $2,276,966,975
Weekly Reader Corporation $1,190,842 $2,603,552,952
RDA Sub Co. $561,134 $2,275,757,318
W.A. Publications, LLC $518,542 $2,274,828,139
Reader's Digest $321,386 $2,282,133,595
Latinoamerica, S.A.
RD Publications, Inc. $167,267 $2,374,732,273
Taste of Home Productions, Inc. $56,510 $2,275,527,617
RD Walking, Inc. $0 $2,283,575,069
Pleasantville Music Publishing Inc. $0 $2,274,834,069
Reader's Digest Young Families Inc. $0 $2,324,262,562
Retirement Living Publishing Co. Inc. $0 $2,305,484,711
Saguaro Road Records, Inc. $0 $2,274,828,139
Reader's Digest Sub Nine, Inc. $0 $2,275,071,549
Reader's Digest Entertainment, Inc. $0 $2,274,883,952
WAPLA, LLC $0 $2,274,828,139
Travel Publications, Inc. $0 $2,274,828,139
A large portion of the Debtors' liabilities are owed to JPMorgan
Chase Bank, N.A., for various loans.
Statements of Financial Affairs
The Debtor-Affiliates also filed with the Court their statements
of financial affairs.
The Debtor-Affiliates disclosed that they earned these amounts
from employment or operation of business within two years prior to
the commencement of the bankruptcy cases:
YTD 2009 FY 2008
-------- -------
Reiman Media Group, Inc. $235,884,939 $295,884,204
Reader's Digest Consumer $140,220,218 $146,631,999
Services, Inc.
RDA Sub Co. $57,856,120 $134,476,890
Weekly Reader Corporation $30,147,802 $32,645,481
Reader's Digest Children's $17,921,585 $29,124,317
Publishing, Inc.
RD Large Edition, Inc. $13,793,145 $15,132,198
Taste of Home Media $11,983,904 $8,300,514
Group, Inc.
World Wide Country $11,143,431 $15,408,051
Tours, Inc.
World Almanac Education $9,656,647 $15,626,682
Group, Inc.
Reader's Digest $8,491,786 $10,315,020
Latinoamerica, S.A.
Weekly Reader Custom $3,863,420 $5,630,070
Publishing, Inc.
Taste of Home $2,093,741 $1,596,433
Productions, Inc.
Reader's Digest Financial $1,102,496 $1,487,922
Services, Inc.
Reiman Manufacturing, LLC $9,939 $147,923
These Debtor-Affiliates also earned income other than from
employment or operation of business:
YTD 2009 FY 2008
-------- -------
RDA Sub Co. $1,743,431 ($1,118,368)
R. D. Manufacturing Corp. $286,433 ($154,266)
Reiman Media Group, Inc. ($200,307) ($9,407)
RD Large Edition, Inc ($35,217) ($17,949)
Reader's Digest Children's $4,617 ($15,028)
Publishing, Inc.
Weekly Reader Corporation $1,219 $2,906
Reader's Digest Consumer $665 ($48)
Services, Inc.
World Wide Country Tours, Inc. ($279) $6
W.A. Publications, LLC ($233) $49
Reader's Digest $222 ($20)
Latinoamerica, S.A.
Within the 90 days immediately preceding the Petition Date, these
Debtor-Affiliates paid creditors on account of debts, which are
not primary consumer debts:
Debtor Amount
------ ------
Reiman Media Group, Inc. $20,546,009
Reader's Digest Children's $3,113,045
Publishing, Inc.
World Wide Country Tours, Inc. $871,172
RDA Sub Co. $206,665
Susana D'Emic, Reader's Digest's vice president and corporate
controller, discloses that receipts and disbursements are made
through a centralized and consolidated cash management system that
includes 106 accounts held in the name of specific Debtors. She
notes that for these Debtor-Affiliates, all disbursement
information is reported on the statements of financial affairs of
the Debtor that holds the relevant bank account:
-- Pleasantville Music Publishing, Inc.;
-- RDA Holding Co.;
-- RD Large Edition, Inc;
-- R. D. Manufacturing Corporation;
-- RD Publications, Inc.;
-- RD Walking, Inc.;
-- Reader's Digest Consumer Services, Inc.;
-- Reader's Digest Entertainment, Inc.;
-- Reader's Digest Financial Services, Inc.;
-- Reader's Digest Latinoamerica, S.A.;
-- Reader's Digest Sub Nine, Inc.;
-- Reader's Digest Young Families, Inc.;
-- Reiman Manufacturing, LLC;
-- Retirement Living Publishing Company, Inc.;
-- Saguaro Road Records, Inc.;
-- Taste of Home Media Group, Inc.;
-- Taste of Home Productions, Inc.;
-- Travel Publications, Inc.;
-- WAPLA, LLC;
-- W.A. Publications, LLC;
-- Weekly Reader Corporation;
-- Weekly Reader Custom Publishing, Inc.;
-- World Almanac Education Group, Inc.; and
-- WRC Media, Inc.
Not every Debtor maintains a disbursement account, Ms. D'Emic
tells the Court. So, she says, for those Debtors without a
disbursement account, disbursements are made on their behalf by
another Debtor via its disbursement account, and the transaction
is recorded through the accounting system as an intercompany
transaction.
The Debtor-Affiliates also made payments within one year
immediately preceding the commencement of their Chapter 11 cases
to or for the benefit of creditors, who are or were insiders:
For purposes of the Statements, the Debtors define insiders as (i)
directors, (ii) members of the Executive Committee, where one
exists, (iii) officers of each Debtor other than persons who hold
solely a power of attorney or the title of assistant secretary,
assistant treasurer or a similar title, and (iv) equity owners of
5% or more.
To the extent that former officers do not qualify as insiders as
defined, Ms. D'Emic reveals that benefits and payments to them are
not included in the Schedules and Statements. The Debtors reserve
all rights to dispute whether someone identified in response to
Question 3(c) is in fact an "insider" as defined in Section
101(31) of the Bankruptcy Code.
Further, Ms. D'Emic asserts that because the Debtors operate under
a central and consolidated cash management system, payroll and
employee disbursements are made by The Reader's Digest
Association, Inc., on behalf of all of the Debtors. As a result,
those disbursements are reflected on Reader's Digest's Statement.
These Debtor-Affiliates are parties to certain suits and
administrative proceedings within a year prior to the Petition
Date:
-- RDA Sub Co.;
-- Reader's Digest Children's Publishing, Inc.;
-- Reader's Digest Young Families, Inc.; and
-- Reiman Media Group, Inc.
Although the Debtors have made reasonable efforts to ensure that
the gifts include all gifts made, given the magnitude of the
Debtors' operations, Ms. D'Emic says that certain gifts may have
inadvertently been omitted from the Statements. She adds that in
the ordinary course of business, the Debtors provide promotional
items for customers and potential customers, and from time to
time, the Debtors provide de minimis gifts to employees, which are
not included in the Schedules.
Ms. D'Emic reveals that all payments for bankruptcy-related
counseling are listed in Reader's Digest's Statement, which
payments represent payments made for itself and its subsidiaries.
Certain Debtors also disclose other property, other than property
transferred in the ordinary course of the business or financial
affairs of the Debtors, transferred either absolutely or as
security within two years immediately preceding the commencement
of their bankruptcy cases:
Debtor Amount
------ ------
RDA Sub Co. $18,135,972
World Almanac Education Group, Inc. $1,433,333
Reader's Digest Latinoamerica, S.A. $218,000
Weekly Reader Corporation $133,334
RDA Holding Co. --
The Debtors routinely incur set-offs during the ordinary course of
business, Ms. D'Emic relates. Set-offs in the ordinary course can
result from various items, including intercompany transactions,
counterparty settlements, pricing discrepancies, rebates, returns,
warranties, and other transaction true-ups. These normal set-offs
are consistent with the ordinary course of business in the
Debtors' industries and can be particularly voluminous, making it
unduly burdensome and costly for the Debtors to list all normal
set-offs. Therefore, she says, normal set-offs are excluded from
the Debtor-Affiliates' Statements.
About The Reader's Digest Association
RDA is a global multi-brand media and marketing company that
educates, entertains and connects audiences around the world. The
company builds multi-platform communities based on branded
content. With offices in 44 countries, it markets books,
magazines, and music, video and educational products reaching a
customer base of 130 million in 78 countries. It publishes 94
magazines, including 50 editions of Reader's Digest, the world's
largest-circulation magazine, operates 65 branded Web sites
generating 22 million unique visitors per month, and sells
40 million books, music and video products across the world each
year. Its global headquarters are in Pleasantville, N.Y.
Reader's Digest said that as of June 30, 2009, it had total assets
of $2.2 billion against total debts of $3.4 billion.
Reader's Digest, together with its 47 affiliates, filed for
Chapter 11 on August 24 (Bankr. S.D.N.Y. Case No. 09-23529).
Kirkland & Ellis LLP has been engaged as general restructuring
counsel. Mallet-Prevost, Colt & Mosle LLP has been tapped as
conflicts counsel. Ernst & Young LLP is auditor. Miller Buckfire
& Co, LLC, is financial advisor. AlixPartners, LLC, is
restructuring consultant. Kurtzman Carson Consultants is notice
and claims agent.
The Official Committee of Unsecured Creditors is tapping BDO
Seidman, LLP, as financial advisor, Trenwith Securities, LLP, as
investment banker and Otterbourg, Steindler, Houston & Rosen,
P.C., as counsel.
Bankruptcy Creditors' Service, Inc., publishes Reader's Digest
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by Reader's Digest and its affiliates
(http://bankrupt.com/newsstand/or 215/945-7000)
READER'S DIGEST: Ends Publishing Project With Rick Warren
---------------------------------------------------------
Reader's Digest Association, Inc., will terminate its joint
multimedia project with Rick Warren, pastor of Saddleback Church
in Southern California, the joint venture's management said in a
press release dated November 4, 2009.
The project, called the Purpose Driven Connection, will continue
in an expanded, fully Web-based digital format, which will launch
in January 2010. Reader's Digest will publish, for the last time
in mid-November 2009, a quarterly print magazine of the same name.
Mr. Warren, author of best-selling book, "The Purpose Driven
Life," told the Associated Press that subscriptions to the
magazine were lagging.
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: Verizon Wants Contract Plan Disclosed
------------------------------------------------------
Verizon Business Global LLC, doing business as Verizon Business
Services, files a limited objection against the approval of the
Debtors' Disclosure Statement accompanying its Plan of
Reorganization dated October 10, 2009.
Darrell W. Clark, Esq., at Stinson Morrison Hecker LLP, in
Washington, District of Columbia, notes that included in the
Debtors' request to approve their Disclosure Statement is a
proposal to give only to counterparties a contract notice of
assumption or rejection. Verizon Business and the Debtors are
partners to a contract styled "Amended and Restated MCI Special
Customer Arrangement between The Reader's Digest Association, Inc.
and MCI Communications Services, Inc. d/b/a Verizon Business
Services."
"Verizon Business does not oppose the relief requested, but
instead requests that [it] also receive notice of any assumption
or rejection of the Contract," Mr. Clarks tells Judge Gonzalez.
Verizon Business, however, subsequently withdrew its objection.
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)
REAL MEX: Registers $13 Mil. of 14% Senior Secured Notes
--------------------------------------------------------
Real Mex Restaurants, Inc., filed with the Securities and Exchange
Commission a prospectus relating to $13,000,000 aggregate
principal amount of 14% senior secured notes due January 1, 2013,
which were originally issued by the Company on July 7, 2009, in an
offering of $130,000,000 aggregate principal of 14% senior secured
notes due January 1, 2013, exempt from the registration
requirements of the Securities Act of 1933, as amended.
The old notes, excluding the notes offered pursuant to the
prospectus, are currently subject to an exchange offer, which
commenced on October 8, 2009, pursuant to which certain holders of
the old notes have the right to exchange the old notes for the
Company's registered 14% senior notes due January 1, 2013, with
substantially identical terms. The exchange offer terminates on
November 9, 2009, unless extended.
The Company said Farallon Partners, L.L.C., and Farallon Capital
Management, L.L.C, as selling securityholders, have exchanged
their old notes for new notes in a private exchange. The Company
said the selling securityholders may use the prospectus to resell
from time to time any or all of their private notes and related
guarantees.
The Company will not receive any proceeds from the resale by the
selling securityholders of the private notes and related
guarantees.
The Company pays interest on the notes on July 1 and January of
each year beginning on January 1, 2010. Interest accrues at a
rate of 14% per annum. The notes mature on January 1, 2013. On
or after July 1, 2011, the Company has the option to redeem all or
part of the notes at 100% of the notes' principal amount, plus
accrued and unpaid interest up to the date of redemption. Prior
to July 1, 2011, the Company may redeem up to 35% of the aggregate
principal amount of the notes with the net proceeds of certain
equity offerings at 114.0% of their aggregate principal amount,
plus accrued and unpaid interest thereon to the date of
redemption; provided that at least 65% of the aggregate principal
amount of the notes issued under the indenture governing the notes
remains outstanding after such redemption. Prior to July 1, 2011,
the Company may redeem some or all of the notes at a "make- whole"
premium. If the Company undergoes a change of control, the
Company will be required to make an offer to each holder to
repurchase all or a portion of their notes at 101% of their
principal amount, plus accrued and unpaid interest up to the date
of repurchase. The notes are fully, unconditionally and
irrevocably guaranteed jointly and severally on a senior secured
basis by the Company's parent, and each of the Company's existing
and future domestic restricted subsidiaries. The notes and the
guarantees are secured by a second priority lien on substantially
all of the Company's assets and the assets of the guarantors,
subject to certain exceptions, which will also secure the
Company's senior secured credit facility on a first priority
basis.
There is no existing public market for the notes offered. The
Company does not intend to list the notes on any securities
exchange or seek approval for quotation through any automated
trading system.
A full-text copy of the registration statement is available at no
charge at http://ResearchArchives.com/t/s?48fc
Real Mex Restaurants, Inc., owns and operates restaurants,
primarily under the names El Torito(R), Acapulco Mexican
Restaurant Y Cantina(R) and Chevys Fresh Mex(R). At December 28,
2008, the Company, primarily through its major subsidiaries (El
Torito Restaurants, Inc., Chevys Restaurants LLC and Acapulco
Restaurants, Inc.), owned and operated 190 restaurants, of which
157 were in California and the remainder in 12 other states. The
Company's other major subsidiary, Real Mex Foods, Inc., provides
internal production, purchasing and distribution services for the
restaurant operations and manufactures specialty products for
sales to outside customers.
At March 29, 2009, the company's balance sheet showed total assets
of $287.3 million, total liabilities of $272.9 million and
stockholders' equity of about $14.4 million.
The Company's Senior Secured Notes and senior unsecured credit
facility each mature in 2010 and the Company will require
additional financing to meet this obligation. The Company is
currently evaluating its options to raise the necessary funds. No
assurance can be given that the Company will be able to refinance
any of its indebtedness on commercially reasonable terms or at
all.
* * *
As reported by the Troubled Company Reporter on July 15, 2009,
Moody's Investors Service upgraded Real Mex Restaurant's
Speculative Grade Liquidity rating to SGL-3 from SGL-4,
recognizing its improved liquidity as a result of the recently
completed refinancing. Moody's also revised the rating on the
company's newly issued $130 million 14% 2nd lien senior secured
notes due 2012 to B3 from the initial provisional rating of (P)B3,
upon closing of the transaction. Proceeds from the issuance were
mainly used to refinance the 10% 2nd lien senior secured notes due
April 1, 2010. The Caa2 Corporate Family Rating remains
unchanged, while the rating outlook is revised to stable from
developing.
The TCR said July 8, 2009, Standard & Poor's Ratings Services
affirmed the ratings on Real Mex Restaurants, including its 'B-'
corporate credit rating. This action comes after the company
priced $130 million of the senior secured notes at a 17.98% yield
with a 14% coupon and 90% original issue discount.
REGENT COMMUNICATIONS: Reports $400,000 Net Loss for Q3 2009
------------------------------------------------------------
Regent Communications, Inc., reports that for the third quarter
ended September 30, 2009, net broadcast revenues decreased 13.9%
to $21.8 million from $25.3 million during the third quarter of
2008. For the same period, station operating expenses decreased
4.8% to $14.6 million in 2009 compared to $15.3 million in 2008.
The Company reported a net loss of $400,000 for the quarter, or
$0.01 per share, compared with a reported net loss of
$46.3 million, or $1.19 per share, in the same period last year.
Results for 2008 were significantly impacted by a pre-tax non-cash
impairment charge of $67.5 million related to the Company's review
of its indefinite-lived intangible assets and goodwill.
For the first nine months of 2009, net broadcast revenues
decreased 13.5% to $62.8 million compared to $72.6 million in
2008. For the same period, station operating expenses decreased
7.0% to $43.3 million in 2009 from $46.5 million in 2008.
The Company reported a net loss of $29.8 million for the first
nine months of 2009, or $0.73 per share, compared with a reported
net loss of $43.6 million, or $1.12 per share, in 2008. Results
for 2009 and 2008 include a pre-tax non-cash impairment charge of
$31.8 million and $67.5 million respectively, related to the
Company's review of its indefinite-lived intangible assets and
goodwill.
"During the third quarter we continued to execute our strategic
plan to expand our presence among advertisers and audiences across
our local market footprint, while aggressively controlling our
costs," said Bill Stakelin, President and CEO of Regent
Communications. "Our revenue results reflect the weak advertising
market nationwide, offset in part by our consistent ability to
outperform the overall radio industry and our portfolio of
stations."
As of September 30, 2009, outstanding credit facility debt was
approximately $187.7 million and cash was approximately
$6.0 million. Total capital expenditures in the third quarter
ended September 30, 2009 were approximately $0.1 million.
A full-text copy of the Company's earnings release is available at
no charge at http://ResearchArchives.com/t/s?48fd
About Regent Communications
Based in Cincinnati, Ohio, Regent Communications, Inc. (NASDAQ:
RGCI) is a radio broadcasting company focused on acquiring,
developing and operating radio stations in mid-sized markets.
Regent owns and operates 62 stations located in 13 markets.
At June 30, 2009, the Company had $178.2 million in total assets
against $207.2 million in total liabilities. The June 30 balance
sheet also showed strained liquidity: The Company had $23.3
million in total current assets against $196.5 million in total
current liabilities.
Going Concern Opinion; Lender Talks
In its Form 10-Q report for the second quarter ended June 30,
2009, Regent said at December 31, 2008, the likelihood that the
Company would not be able to meet certain financial ratios under
its credit agreement during the 2009 year and the possibility that
the Company's lenders could require that repayment of the
outstanding debt under the credit agreement be accelerated to
currently payable, created substantial doubt about the Company's
ability to continue as a going concern. Accordingly, the Report
of Independent Registered Public Accounting Firm issued by the
Company's auditors for the 2008 year contained an explanatory
paragraph regarding this uncertainty.
Under the terms of the credit agreement, any audit report
containing going concern language constitutes a default under the
agreement. As a result of this default, at December 31, 2008, all
debt outstanding under the credit agreement was recorded as
currently payable in the Company's consolidated financial
statements. In addition, a valuation allowance was established on
substantially all of the Company's deferred tax assets, as the
Company was unable to conclude, based upon the guidance contained
in Statement of Financial Accounting Standards No. 109,
"Accounting for Income Taxes," that it was more likely than not
that the assets would be realized, given the uncertainty in the
Company's ability to continue as a going concern.
Regent had said its management is currently in negotiations with
the parties to the credit agreement to waive or amend certain of
the financial ratios and other covenants to regain compliance. At
the request of its lenders, the Company has engaged the services
of an outside consultant to work towards that end and to advise
the lenders during negotiations with Regent. Unless and until the
Company is able to negotiate a waiver or amendment, the Company's
lenders could proceed against any such available collateral at any
time.
REGIONS FINANCIAL: Fitch Downgrades Individual Rating to 'C'
------------------------------------------------------------
Fitch Ratings has downgraded the long-term Issuer Default Rating
of Regions Financial and its subsidiary to 'BBB+' from 'A-'. The
Rating Outlook is Negative.
The downgrade of RF's ratings reflects the continued deterioration
in credit quality, and expectations of rising credit costs. While
Fitch expected the company to endure increased credit stress in
its homebuilder and Florida home equity portfolios, as well as in
its sizeable commercial real estate book, the recent level of
deterioration has exceeded Fitch's original projections.
Nonperforming asset additions were considerable at $1.8 billion
and $1.7 billion in second quarter-2009 (2Q'09) and 3Q'09,
respectively. Fitch remains concerned with RF's CRE exposure as
market fundamentals continue to weaken, and expects that RF will
report high level of provision expenses well into 2010. RF's
exposure to CRE loans, including construction loans, comprises 39%
of total loans, which represents a relatively larger exposure than
similarly rated peers. Elevated credit costs will likely remain a
considerable drag on earnings for the foreseeable future. Also
underlying the rating action, RF's pre-provision net revenues are
weaker on a relative basis to similarly rated peers.
Somewhat offsetting the weak asset quality profile, RF's recently
augmented capital base provides support for the ratings at their
new level. RF raised $2.5 billion in capital related to the
results of the Supervisory Capital Assessment Program. In
addition, both RF and Regions Bank continue to maintain a
significant amount of borrowing capacity, and a large level of
liquid assets. The current ratings of RF and its subsidiaries
also incorporate their solid market position in the southeastern
U.S. Fitch currently views RF's capital and liquidity resources as
sufficient to withstand anticipated stress within the context of
expectations for an investment grade company. However, until
trends in asset quality establish some evidence of bottoming,
further rating actions remain possible and the Rating Outlook
remains Negative.
RF is a $140 billion financial holding company headquartered in
Birmingham, Alabama. RF operates almost 2,000 branches in 16
states across the South, Midwest and Texas. RF provides
traditional commercial, retail and mortgage banking services, as
well as investment banking, asset management, trust, mutual funds,
and securities brokerage services through its wholly-owned
subsidiary, Morgan Keegan.
Fitch has downgraded these ratings with a Negative Rating Outlook:
Regions Financial Corporation
-- Long-term IDR to 'BBB+' from 'A-';
-- Senior debt to 'BBB+' from 'A-';
-- Individual to 'C' from 'B/C';
-- Short-term IDR to 'F2' from 'F1';
-- Subordinated debt to 'BBB' from 'BBB+';
-- Preferred stock to 'BBB-' from 'BBB'.
Regions Bank
-- Long-term IDR to 'BBB+' from 'A-';
-- Short-term IDR to 'F2' from 'F1';
-- Long-term deposits to 'A-' from 'A';
-- Individual to 'C' from 'B/C';
-- Senior debt to 'BBB+' from 'A-';
-- Subordinated debt to 'BBB' from 'BBB+'.
AmSouth Bank
-- Subordinated debt to 'BBB' from 'BBB+'.
Regions Financing Trust II, III
-- Preferred stock to 'BBB-' from 'BBB'.
Union Planters Corporation
-- Senior debt to 'BBB+' from 'A-';
-- Subordinated debt to 'BBB' from 'BBB+'.
AmSouth Bancorporation
-- Subordinated debt to 'BBB' from 'BBB+'.
Fitch has affirmed these ratings:
Regions Financial Corporation
-- Support at '5';
-- Support floor at 'No Floor'.
Regions Bank
-- Long-term debt guaranteed by TLGP at 'AAA';
-- Short-term debt guaranteed by TLGP at 'F1+';
-- Short-term deposits at 'F1';
-- Support at '4';
-- Support floor at 'B'.
REPROS THERAPEUTICS: To Appeal NASDAQ Delisting Notice
------------------------------------------------------
On November 6, 2009, Repros Therapeutics Inc. received
notification from NASDAQ that it has not regained compliance with
NASDAQ Listing Rules 5450(b)(2)(A) or 5450(b)(3)(A) and, unless
the Company appeals NASDAQ's decision, its securities will be
delisted from the NASDAQ Global Market. Repros intends to appeal
NASDAQ's determination to delist its securities or, alternatively,
to request to have its securities moved to the NASDAQ Capital
Market. There can be no assurance that either of these strategies
will be successful.
About Repros Therapeutics Inc.
Repros Therapeutics focuses on the development of oral small
molecule drugs for major unmet medical needs that treat male and
female reproductive disorders.
REVLON CONSUMER: Moody's Assigns 'B3' Rating on $330 Mil. Notes
---------------------------------------------------------------
Moody's Investors Service assigned a B3 rating to Revlon Consumer
Products Corporation's proposed $330 million offering of senior
secured notes due 2015. The company's B2 corporate family rating
and speculative grade liquidity rating of SGL-2 were affirmed.
The outlook is stable. Ratings of the proposed new issue of
senior secured notes are subject to Moody's review of final
documentation. Ratings of the existing senior notes will be
withdrawn if the tender offer is completed.
Revlon's B2 corporate family rating reflects the company's global
brand franchises, strong geographic and product diversification
for a number of well known brands in color cosmetics, haircare and
fragrances, and significantly improved and sustained profitability
(EBITDA margins of 14.2%) and cash flow metrics (FCF to Debt of
3.2%). Revlon's ratings, however are constrained by the highly
competitive nature of the cosmetics and personal care category
which requires significant investment in new product development,
promotional expenditures and capital spending, including purchase
of product display. While management's focus on debt reduction
has resulted in the successful completion of several important
capital structure improvements including the extension of several
key debt maturities over the last 18 months, adjusted leverage
remains relatively high.
Moody's expects that the company will use proceeds from the
proposed the senior secured notes offering, together with other
cash, to fund the repurchase of any and all of the company's
$340.5 million outstanding 9.5% senior notes due April 2011, as
well as to pay accrued interest, and related expenses. The
proposed new issue of senior secured notes are expected to be
guaranteed by Revlon Inc, and by the company's domestic
subsidiaries, which also currently guarantee its bank term loan
agreement and bank revolver agreement. The notes and the related
guarantees will be secured by liens on the same collateral that
secures the bank term loan agreement on a second priority basis
and liens on the same collateral that currently secures the bank
revolver agreement on a third-priority basis.
These ratings of Revlon were assigned:
-- $330 million senior secured notes due 2015 at B3 (LGD 5, 74%)
These ratings of Revlon were affirmed (LGD point estimates
revised):
-- Corporate family rating at B2;
-- Probability of default rating at B2;
-- $160 million senior secured asset based revolving credit
facility due 2012 at Ba3 (LGD 2, 28%)
-- $815 million senior secured term loan facility due 2012 at
Ba3 (LGD 2, 28%);
-- $341 million 9.5% senior notes due 2011 at Caa1 (LGD 5, 90%
revised); and
-- Speculative grade liquidity rating at SGL-2.
-- Outlook is stable
The last rating action regarding Revlon was on November 2, 2009,
when Moody's upgraded the company's corporate family rating to B2
from B3, its Speculative Grade Liquidity rating to SGL-2 from SGL-
3 and revised the outlook to stable.
Headquartered in New York, Revlon Consumer Products Corporation is
a worldwide cosmetics, skin care, fragrance, and beauty care
products company. The company is a wholly-owned subsidiary of
Revlon, Inc., which is majority-owned by MacAndrews & Forbes,
which is in turn wholly-owned by Ronald O. Perelman. Revlon's
net sales for the twelve-month period ended September 2009 were
approximately $1.3 billion.
M&F beneficially owns approximately 77.5% of Revlon's outstanding
Class A common stock, 100% of Revlon's Class B common stock and
78.9% of Revlon's combined outstanding shares of Class A and Class
B common stock, which together represent approximately 77.3% of
the combined voting power of Revlon's Class A and Class B common
stock and Series A preferred stock.
REVLON CONSUMER: S&P Rates $330 Mil. Senior Notes at 'B-'
---------------------------------------------------------
Standard and Poor's has assigned a 'B-' rating on Revlon Consumer
Products Corp.'s proposed $330 million senior secured notes.
RONSON CORP: Wells Fargo Extends Forbearance to Dec. 31
-------------------------------------------------------
Ronson Corporation (OTC: RONC.PK) announced November 10 that its
primary lender, Wells Fargo Bank, National Association, has
further extended its moratorium during which the bank will not
assert rights relating to existing events of default through
December 31, 2009, or such earlier date permitted under the
Company's agreement with the bank.
The amendment to the forbearance agreement also increases the
amount of advances which Wells Fargo will extend under the
Company's maximum revolving credit line from $3,000,000 to
$3,500,000 and increases the maximum overadvance facility from
$1,000,000 to $2,000,000.
A copy of the Eight Amendment to the Forbearance Agreement is
available for free at http://researcharchives.com/t/s?4910
About Ronson Corporation
The operations of Somerset, New Jersey-based Ronson Corporation
(Pink Sheets: RONC) -- http://www.ronsoncorp.com/-- include its
wholly-owned subsidiaries: 1) Ronson Consumer Products Corporation
in Woodbridge, New Jersey, 2) Ronson Corporation of Canada Ltd.,
and 3) Ronson Aviation, Inc.
The Company has said its losses and difficulty in generating
sufficient cash flow to meet its obligations and sustain its
operations, as well as existing events of default under its credit
facilities and mortgage loans, raise substantial doubt about its
ability to continue as a going concern.
In March 2009, the Company retained Joel Getzler of Getzler
Henrich as Chief Restructuring Officer, with responsibility for
operations, finance, accounting and related administrative issues,
subject to the authority and reporting to the Company's Board of
Directors. Getzler Henrich is a corporate turnaround and
restructuring firm which, in addition to its operational
restructuring focus, is experienced in restructuring,
lender/credit relationship management and financing.
As of June 30, 2009, the Company had $16,106,000 in total assets;
and total current liabilities of $12,451,000, long-term debt of
$13,000, other long-term liabilities of $1,937,000, other long-
term liabilities of discontinued operations of $3,553,000;
resulting in stockholders' deficiency of $1,848,000.
RURAL/METRO LLC: S&P Assigns 'BB' Ratings on Senior Facilities
--------------------------------------------------------------
On Nov. 9, 2009, Standard & Poor's Ratings Services assigned its
issue-level ratings and recovery ratings on Rural/Metro LLC's
proposed new issuance of senior secured credit facilities. The
credit facilities are comprised of a $40 million revolving credit
facility maturing in 2013, and a $180 million term loan maturing
in 2014.
The issue-level ratings on the bank facilities are 'BB', two
notches higher than the expected 'B+' corporate credit rating on
parent holding company Rural/Metro Corp. (Holdco) after the close
of the transaction, with a '1' recovery rating, indicating S&P's
expectation of very high (90%-100%) recovery in the event of
payment default. The proposed facilities will refinance
outstanding term debt, allow for a 100% tender of the existing
Opco 9.875% senior subordinated notes due 2015, extend maturities
and reduce complexity in the capital structure by effectively
removing the restrictive payments basket provision of the Holdco
notes which applied exclusively to the Opco senior subordinated
notes.
The low-speculative-grade corporate credit rating on Scottsdale,
Arizona-based medical transport services company Rural/Metro Corp.
reflects the company's exposure to the ongoing uncertainty of
government reimbursement rates and sustainability of price
increases to commercial payors, relatively thin operating margins,
and high levels of uncompensated care. In addition, the company
is expected to have an aggressive financial risk profile after the
close the proposed transaction.
Despite Rural/Metro's position as one of the largest commercial
providers of medical transport services, it operates in a highly
fragmented industry where it holds less than a 10% market share
and faces reimbursement risk. The company generally contracts
with government entities, hospitals, nursing homes, and other
health care facilities to provide emergency and non-emergency
medically necessary ambulance transportation. It also provides
fire protection services to residential and commercial property
owners (about 15% of revenue).
Rural/Metro's clients are diverse, its relationships are generally
longstanding, and it is unlikely that current municipal clients
would provide their own medical transportation services. Still,
potential changes in reimbursement pose a particular risk, given
the company's relatively narrow operating margins. Rural/Metro
receives about 56% and 33% of its revenues from Medicare and
Medicaid, and commercial insurance, respectively. The company's
exposure to potential federal Medicare rate reductions is a credit
concern; however Medicare recently extended the 2% urban/3% rural
add-on until Dec. 2011, which provides near term rate stability.
Also, Medicaid depends heavily on state budgets, and many states
are under increased pressure, which may lead to rate cuts.
Rural/Metro has offset past weakness in government reimbursement
with increased prices to its commercial customers, although the
company may not be able to obtain such price increases in the
future. Furthermore, uncompensated care as a percentage of
revenues rose significantly in 2007, causing operating shortfalls.
While management has taken steps to reduce uncompensated care and
improve cash collections, this remains a credit concern.
Ratings List
Rating Assigned
Rural/Metro Corp.
Senior secured facility BB
Recovery rating 1
SAMSONITE STORES: Gets Final OK to Use Sr. Lenders Cash Collateral
------------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware authorized,
on a final basis, Samsonite Company Stores LLC to:
-- use cash collateral of senior facility lenders; and
-- provide adequate protection to the senior facility lenders
for any diminution in value of their interests in the
prepetition collateral.
As reported in the Troubled Company Reporter on Sept. 22, 2009,
the Debtor was party to a senior facility agreement dated as of
Oct. 23, 2007, with Royal Bank of Scotland. The senior facility
provided for (i) a $745 million term loan; (ii) a $100 million
acquisition facility; (iii) a $125 million revolving credit
facility; (iv) a 10 million swingline facility; and (v) a
$275 million second lien facility.
The Debtor was also party to a security agreement dated as of
Oct. 23, 2007, with Cameron Acquisitions Corporation and RBS.
The Debtor required the use of cash collateral to finance its
operations.
The senior facility lenders have consented to the use of cash
collateral subject to the provision of adequate protection and
other terms.
As adequate protection, the Debtor will grant replacement liens
and allowed superpriority administrative expense claims to the
senior facility lenders.
The Debtor's use of cash collateral will terminate upon the
occurrence and during the continuation of an event of default.
About Samsonite Corp.
Samsonite Corp. is the worldwide leader in superior travel bags,
luggage and accessories, combining notable style with the latest
design technology and the utmost attention to quality and
durability. In 2006 and 2007, the Company had sales of
$1.1 billion and $1.2 billion, respectively.
Offering superior travel bags, luggage and accessories, under the
Samsonite, Samsonite Black Label, and American Tourister brands,
Samsonite Company Stores LLC operates full-price and outlet stores
in 38 states across the U.S. The Company is a wholly-owned
subsidiary of Samsonite Corporation.
As of July 31, 2009, Company Stores leased 173 retail stores in
the United States located in 38 states. It employs approximately
650 people and had sales of $112 million and $108.1 million in
2007 and 2008, respectively. As of July 31,2009, it had
$233 million in total assets and $1.5 billion in total
liabilities.
Samsonite Company Stores filed for Chapter 11 on September 2, 2009
(Bankr. D. Del. Case No. 09-13102). Attorneys at Young Conaway
Stargat & Taylor LLP and Paul, Wess, Rifkin, Wharton & Garrison
LLP serve as bankruptcy counsel to the Debtor. Hilco Merchant
Resources LLC is liquidation agent. Epiq Bankruptcy Solutions LLC
serves as claims and notice agent.
U.S. Bankruptcy Judge Peter Walsh has confirmed a reorganization
plan for Samsonite Co. Stores. All creditors and interest holders
are to recover 100% of their claims or interests.
SHERWOOD/CLAY-AUSTIN: List of 20 Largest Unsecured Creditors
------------------------------------------------------------
Sherwood/Clay-Austin Lights LLC filed with the Middle District of
Louisiana a list of its 20 largest unsecured creditors.
A full-text copy of the Debtor's list of creditors is available
for free at http://bankrupt.com/misc/lamb09-11725.pdf
Baton Rouge, Louisiana-based Sherwood/Clay-Austin Lights LLC filed
for Chapter 11 bankruptcy protection on November 2, 2009 (Bankr.
M.D. La. Case No. 09-11725). Douglas S. Draper, Esq., who has an
office in New Orleans, Louisiana, 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.
SHERWOOD/CLAY-AUSTIN: Sec. 341 Meeting Set for December 4
---------------------------------------------------------
The U.S. Trustee for Region 5 will convene a meeting of Clifford
Ralph Robinson and Sherwood/Clay-Austin Lights LLC's creditors on
December 4, 2009, at 1:00 p.m. at 707 Florida St., Room 324.
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.
Baton Rouge, Louisiana-based Sherwood/Clay-Austin Lights LLC filed
for Chapter 11 bankruptcy protection on November 2, 2009 (Bankr.
M.D. La. Case No. 09-11725). Douglas S. Draper, Esq., who has an
office in New Orleans, Louisiana, 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.
SHERWOOD/CLAY-AUSTIN: Taps Heller Draper as Bankruptcy Counsel
--------------------------------------------------------------
Sherwood/Clay-Austin Lights LLC has asked for permission from the
U.S. Bankruptcy Court for the Middle District of Louisiana to
employ Douglas S. Draper and the law firm of Heller, Draper,
Hayden, Patrick & Horn, L.L.C., as bankruptcy counsel nunc pro
tunc to November 2, 2009.
Heller Draper will, among other things:
a. prepare and pursue confirmation of a plan of
reorganization and approval of a disclosure statement;
b. prepare on behalf of the Debtor all necessary
applications, motions, answers, proposed orders, other
pleadings, notices, schedules and other documents, and
reviewing all financial and other reports to be filed;
c. appear in Court to protect the interests of the Debtor
before this Court;
d. represent the Debtor in connection with use of cash
collateral and/or obtaining postpetition financing;
e. advise the Debtor concerning and assisting in the
negotiation and documentation of financing agreements,
cash collateral orders and related transactions;
f. investigate the nature and validity of liens asserted
against the property of the Debtor, and advising the
Debtor concerning the enforceability of the liens; and
g. investigate and advise the Debtor concerning, and taking
action as may be necessary to collect, income and assets
in accordance with applicable law, and the recovery of
property for the benefit of the Debtor's estate;
Douglas S. Draper, a member of Heller Draper, said that the firm
will be paid based on the hourly rates of its professionals:
Professional Rate
------------ ----
Douglas S. Draper $400
Barry Miller $325
Constant G. Marquer, III $325
Leslie Collins $325
Associates $250
Paralegals $90
Mr. Draper assures the Court that Heller Draper doesn't have
interests adverse to the interest of the Debtors' estates or of
any class of creditors and equity security holders. Mr. Draper
maintains that Heller Draper is a "disinterested person" as the
term is defined under Section 101(14) of the Bankruptcy Code.
Baton Rouge, Louisiana-based Sherwood/Clay-Austin Lights LLC filed
for Chapter 11 bankruptcy protection on November 2, 2009 (Bankr.
M.D. La. Case No. 09-11725). Douglas S. Draper, Esq., who has an
office in New Orleans, Louisiana, 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.
SHERWOOD/CLAY-AUSTIN: Wants Additional 30 Days to File Schedules
----------------------------------------------------------------
Sherwood/Clay-Austin Lights LLC has asked the U.S. Bankruptcy
Court for the Middle District of Louisiana for an additional 30
days to extending the time in which the Debtor has to file
schedules of assets and liabilities, current income and
expenditures, executory contracts and unexpired leases and
statements of financial affairs by an additional 30 days.
The Debtor is currently required to file the schedules within 15
days from its November 2, 2009 bankruptcy filing. The Debtor says
it doesn't anticipate having the schedules ready for filing within
the 15-day period due to the limited staff available and the fact
that multiple entities are currently in pending bankruptcy
proceedings with ongoing reporting requirements, and having filed
plans and proceeding through the exit phases of the cases. The
Debtor anticipates that it will take no more than 45 days to
complete, review, and file the schedules to the Court.
The Debtor maintains that cause exists to grant its request, given
the amount of information that must be assembled and compiled, the
limited staff, which is presently stretched thin in meeting other
reporting deadlines, and proceeding through the final stages of
the bankruptcies, and the number of hours that must be devoted
to the task of completing the schedules. The Debtor assures that
no creditor, or other party in interest, will be prejudiced by the
requested extension of time for the filing of the Schedules.
Baton Rouge, Louisiana-based Sherwood/Clay-Austin Lights LLC filed
for Chapter 11 bankruptcy protection on November 2, 2009 (Bankr.
M.D. La. Case No. 09-11725). Douglas S. Draper, Esq., who has an
office in New Orleans, Louisiana, 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.
SIX FLAGS: 31 Creditors Sell Claims Totaling $297,600
-----------------------------------------------------
Thirty-one trade creditors, from October 20 to November 4,
2009, transferred claims totaling $297,610 to:
Transferee Amount
---------- ------
ASM Capital, LP $37,993
ASM Capital III, LP $119,684
Claims Recovery Group $22,021
Creditor Liquidity, LP $17,308
Fair Liquidity Partners, LLC $3,363
Greg Kusters Hardline $37,200
Liquidity Solutions, Inc. $27,009
Pioneer Funding Group LLC $18,411
U.S. Debt Recovery LLC $14,621
A list of the names of the transferors is available for free
at http://bankrupt.com/misc/SixF_ClaimsTrnsfrslst_Oct20_Nov04.pdf
About Six Flags
Headquartered in New York City, Six Flags, Inc., is the world's
largest regional theme park company with 20 parks across the
United States, Mexico and Canada.
Six Flags filed for Chapter 11 protection on June 13, 2009 (Bankr.
D. Del. Lead Case No. 09-12019). Paul E. Harner, Esq., Steven T.
Catlett, Esq., and Christian M. Auty, Esq., at Paul, Hastings,
Janofsky & Walker LLP in Chicago, Illinois, act as the Debtors'
lead counsel. Daniel J. DeFranceschi, Esq., and L. Katherine
Good, Esq., at Richards, Layton & Finger, P.A., in Wilmington,
Delaware, act as local counsel. Cadwalader Wickersham & Taft LLP,
serves as special counsel. Houlihan Lokey Howard & Zukin Capital
Inc., serves as financial advisors, while KPMG LLC acts as
accountants. Kurtzman Carson Consultants LLC serves as claims and
notice agent. As of March 31, 2009, Six Flags had $2,907,335,000
in total assets and $3,431,647,000 in total liabilities.
Bankruptcy Creditors' Service, Inc., publishes Six Flags
Bankruptcy News. The newsletter provides gavel-to-gavel coverage
of the Chapter 11 proceedings undertaken by Six Flags Inc. and its
various affiliates. (http://bankrupt.com/newsstand/or 215/945-
7000).
SIX FLAGS: Court OKs Hilco as Panel's Real Estate Consultant
------------------------------------------------------------
Judge Christopher S. Sontchi approved the application of the
Official Committee of Unsecured Creditors to retain Hilco Real
Estate Appraisal, LLC, as its real estate consultant in the
Debtors' Chapter 11 cases.
Further, Judge Sontchi gave authority to the United States
Trustee for the District of Delaware to review the compensation
paid to Hilco pursuant to the reasonableness standard set forth
in Section 330 of the Bankruptcy Code.
Hilco's fees and expenses will be paid by the Debtors in the
ordinary course without the need for the filing monthly or
quarterly fee applications. Hilco is directed to file with the
Court a final fee application that provides a summary of fees and
expenses paid, Judge Sontchi ruled.
Judge Sontchi set Hilco's maximum liability to the Client arising
out of this engagement to be limited to the amount of fees paid
by Hilco for these services, except to the extent the liability
is caused by gross negligence, intentional misconduct or
fraudulent behavior of Hilco or its personnel.
Furthermore, Judge Sontchi ordered that the Debtors will have no
obligation to indemnify Hilco or provide contribution or
reimbursement to Hilco (i) for any claim or expense that is
judicially determined to have arisen from Hilco's bad faith,
breach of fiduciary duty, gross negligence or willful misconduct,
(ii) for a contractual dispute in which the Debtors allege the
breach of Hilco's contractual obligations unless the Court
determines that indemnification, contribution or reimbursement
would be permissible, or (iii) for any claim or expense that is
settled prior to a judicial determination, but determined by the
Court, after notice and a hearing, to be a claim or expense for
which Hilco should not receive indemnity, contribution or
reimbursement under the terms of the Engagement Letter, or
Indemnification exhibit, as modified by this Order.
About Six Flags
Headquartered in New York City, Six Flags, Inc., is the world's
largest regional theme park company with 20 parks across the
United States, Mexico and Canada.
Six Flags filed for Chapter 11 protection on June 13, 2009 (Bankr.
D. Del. Lead Case No. 09-12019). Paul E. Harner, Esq., Steven T.
Catlett, Esq., and Christian M. Auty, Esq., at Paul, Hastings,
Janofsky & Walker LLP in Chicago, Illinois, act as the Debtors'
lead counsel. Daniel J. DeFranceschi, Esq., and L. Katherine
Good, Esq., at Richards, Layton & Finger, P.A., in Wilmington,
Delaware, act as local counsel. Cadwalader Wickersham & Taft LLP,
serves as special counsel. Houlihan Lokey Howard & Zukin Capital
Inc., serves as financial advisors, while KPMG LLC acts as
accountants. Kurtzman Carson Consultants LLC serves as claims and
notice agent. As of March 31, 2009, Six Flags had $2,907,335,000
in total assets and $3,431,647,000 in total liabilities.
Bankruptcy Creditors' Service, Inc., publishes Six Flags
Bankruptcy News. The newsletter provides gavel-to-gavel coverage
of the Chapter 11 proceedings undertaken by Six Flags Inc. and its
various affiliates. (http://bankrupt.com/newsstand/or 215/945-
7000).
SIX FLAGS: Court Sets January 2 Claims Bar Date
-----------------------------------------------
Bankruptcy Judge Christopher Sontchi sets January 2, 2010, as the
deadline for parties to file proofs of claim for any obligation of
the Debtors that arose before the Petition Date, including claims
pursuant to Section 503(b)(9) of the Bankruptcy Code. Judge
Sontchi also sets December 10, 2009, as the deadline for
governmental agencies to file proofs of claim.
The Bar Date by which a creditor will file a Proof of Claim
arising from the Debtors' rejection of any executory contract or
unexpired lease will be the later of (a) January 2, 2010, or (b)
the date provided in (i) the order authorizing the Debtors to
reject or (ii) the notice of rejection of the contract or lease
or, if no date is provided, then 30 days after the date the order
is entered or notice is provided, Judge Sontchi ruled.
Judge Sontchi emphasized that the terms of the Order will not
apply to the certified class identified by the State of New York
Supreme Court, County of Warren, in the action filed by Leonard
Baker, on behalf of himself and all other similarly situated
versus SFHWP Management, LLC, HWP Development, LLC, Six Flags,
Inc., d/b/a Six Flags Great Escape Lodge and Indoor Waterpark,
Six Flags Theme Parks, Inc., d/b/a Six Flags Great Escape Lodge
and Indoor Waterpark, and John Doe Inc. 1-10.
SW ACQUISITION: Moody's Assigns 'Ba3' Corporate Family Rating
-------------------------------------------------------------
Moody's Investors Service assigned SW Acquisition Co., Inc., the
parent of Busch Entertainment Corporation, a Ba3 Corporate Family
rating, a Ba3 Probability of Default rating, and a Ba2 rating to
SW Acquisition's $1.175 billion senior secured bank credit
facility. These first time ratings are assigned in connection
with The Blackstone Group's proposed $2.4 billion (including fees)
acquisition of BEC from Anheuser-Busch InBev. Proceeds from the
credit facility, a $400 million senior unsecured mezzanine
facility, and a $975 million equity contribution from Blackstone
will be used to fund the proposed acquisition and related fees.
The rating outlook is stable.
Assignments:
Issuer: SW Acquisition Co., Inc.
-- Corporate Family Rating, Assigned Ba3
-- Probability of Default Rating, Assigned Ba3
-- Senior Secured Bank Credit Facility, Assigned a Ba2, LGD3 -
36%
Outlook Actions:
Issuer: SW Acquisition Co., Inc.
-- Outlook, Assigned Stable
The Ba3 CFR reflects the strong brands and consumer appeal of
BEC's portfolio of 10 regional and destination amusement parks,
tempered by exposure to cyclical discretionary consumer spending,
the high debt-to-EBITDA leverage (4.5x LTM 9/30/09 pro forma for
the transaction and incorporating Moody's standard adjustments and
$16.5 million of early retirement expense in Q4-08) resulting from
the acquisition, exposure to floating interest rates, and event
risks related to cash distributions or leveraging actions by
equity sponsor Blackstone. The parks generate meaningful annual
attendance (estimated 23.6 million in 2009) and benefit from high
barriers to entry and distinct advantages due to the unmatched
animal encounters, mix of entertainment and rides, and broad
demographic appeal. Amusement parks are capital intensive but
Moody's anticipates BEC will continue its good track record of
reinvesting in the parks to compete with a wide range of
entertainment alternatives for consumers, maintain the attendance
base and generate free cash flow. BEC's cash flow is moderately
seasonal but its three largest parks are located in the temperate
central Florida and southern California regions and open year
round, which creates smaller seasonal fluctuations relative to
regional operators Cedar Fair and Six Flags. Attendance at the
parks is vulnerable to weather, changes in fuel prices, public
health issues and other disruptions that are outside of the
company's control.
The rating also factors in the company's good liquidity profile
supported by $60 million of projected 2010 free cash flow, a
$125 million revolver to cover seasonal operating needs, and ample
cushion under the financial maintenance covenants to manage
through the economic downturn.
The bank credit facility consists of a $1.05 billion term loan and
$125 million revolver and will be secured by substantially all the
assets of the borrower and current and future domestic
subsidiaries. Unhedged floating rate bank debt accounts for more
than 70% of the debt capital structure and this exposes the
company to rising interest rates to the extent Libor increases
above the 2.25% Libor floor in the credit facility (BEC is
currently evaluating hedging options). The senior unsecured
mezzanine facility is effectively subordinated to the secured
credit facility. The credit facility will be guaranteed by SW
Acquisition and substantially all the domestic operating
subsidiaries of the company. The term loan matures 6.5 years and
the mezzanine facility matures in seven years, which limits
interim debt repayment needs but creates potentially significant
refinancing risk.
The stable rating outlook reflects Moody's expectation that BEC
will continue to generate good cash flows, and that a modest
cyclical recovery in consumer spending and the mandated sweep of
50% of excess free cash flow to reduce debt will lower debt-to-
EBITDA leverage to a 4x range over the next two years.
Moody's subscribers can find further details on the company's
ratings in the credit opinion published on www.moodys.com.
SW Acquisition's ratings were assigned by evaluating factors
Moody's believe are relevant to the credit profile of the issuer,
such as i) the business risk and competitive position of the
company versus others within its industry, ii) the capital
structure and financial risk of the company, iii) the projected
performance of the company over the near to intermediate term, and
iv) management's track record and tolerance for risk. These
attributes were compared against other issuers both within and
outside of SW Acquisition's core industry and SW Acquisition's
ratings are believed to be comparable to those of other issuers of
similar credit risk.
BEC, headquartered in Orlando, Florida, owns and operates ten
amusement parks located in the U.S. Properties include SeaWorld
(Orlando, San Diego and San Antonio), Busch Gardens (Tampa and
Williamsburg) and Sesame Place (Langhorne, PA). In October 2009,
BEC's parent company Anheuser-Busch InBev reached an agreement to
sell the division to The Blackstone Group for a purchase price of
$2.3 billion. BEC's revenues approximate $1.3 billion.
SYAD KAZEM: Case Summary & 3 Largest Unsecured Creditors
--------------------------------------------------------
Joint Debtors: Syad H. Kazem
Zakia Kazem
7780 Lawndale Lane N.
Maple Grove, MN 55311
Bankruptcy Case No.: 09-47598
Chapter 11 Petition Date: November 9, 2009
Court: United States Bankruptcy Court
District of Minnesota (Minneapolis)
Judge: Robert J. Kressel
Debtor's Counsel: Lynn J.D. Wartchow, Esq.
Morris Law Group, P.A.
7241 Ohms Lane, Suite 275
Edina, MN 55439
Tel: (952) 832-2000 x116
Fax: (952) 832-0020
Email: lynn@morrislawmn.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
A full-text copy of the Debtors' petition, including a list of
their 3 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/mnb09-47598.pdf
The petition was signed by the Joint Debtors.
SYROCO INC: Binswanger Sells Building for $2,600,000
----------------------------------------------------
On behalf of Syroco, Inc., Binswanger is pleased disclosed the
sale of a 382,434 sq. ft. building on 59 acres. The property is
located at 1700 East Quarter Road in Siloam Springs, Arkansas.
Sale price is $2,600,000.
Binswanger was retained by the Owner, Syroco, Inc., who was in a
Chap. 7 bankruptcy, to dispose of the property, as well as two
others in New York State.
The buyer, Simmons Pet Food, Inc., is one of the largest canned
pet food private label and co-branded manufacturing businesses in
the United States. Simmons plans to utilize the facility for
warehousing pet food.
"We marketed the building very aggressively," stated Jim
Panczykowski, Vice President of Binswanger. "We were able to
generate substantial interest from local, regional, national and
international companies."
Headquartered in Philadelphia, Pa., Binswanger is an international
full-service real estate organization with offices worldwide
throughout the U.S.A., Canada, Mexico and South America, the U.K.
and Europe, the Middle East, and Asia.
TALBOTS INC: Seeks to Refinance Debt, Hire Perella as Adviser
-------------------------------------------------------------
Talbots Inc., which has posted losses for the past five quarters.,
hired an adviser to help it refinance about $225 million in debt,
Lauren Coleman-Lochner and Jonathan Keehner at Bloomberg News
reported, citing two people familiar with the situation. Talbots
hired Perella Weinberg Partners LP, according to the unidentified
people.
Chief Executive Officer Trudy Sullivan has made three rounds of
job cuts since 2008, with the company saying in June it would
eliminate 20 percent of its corporate positions.
The Company reported a net loss of $24.5 million for the thirteen
weeks ended August 1, 2009, compared with a net loss of
$25.0 million during the same period ended August 2, 2008. For
the twenty-six weeks ended August 1, 2009, the Company reported a
net loss of $48.0 million, compared with a net loss of $23.4
million in the same period ended August 2, 2009.
Net sales for the first half of 2009 were $610.8 million compared
to $810.0 million for the first half of 2008, a decrease of
$199.2 million, or 24.6%.
The substantial deterioration in the U.S. economy and decline in
consumer discretionary spending had a significant impact on the
Company's sales, operating profits and cash flows in 2008 and in
the first half of 2009. The Company expects that the current
conditions in the global economy will continue during 2009 and
possibly beyond.
About The Talbots Inc.
Based in Hingham, Mass., The Talbots, Inc. (NYSE:TLB) is a
specialty retailer and direct marketer of women's apparel, shoes,
and accessories. The Company operates stores in the United States
and Canada. In addition, its customers may shop online or via its
catalogs. The Company's products are sold through its 587 stores,
its circulation of approximately 55 million catalogs during the
fiscal year ended January 31, 2009, and online through its Web
site
The Talbots, Inc.'s consolidated balance sheets at August 1, 2009,
showed $855.9 million in total assets and $1.06 billion in total
assets, resulting in a $206.7 million total shareholders' deficit.
TEMECULA VALLEY: Files Chapter 7 Protection
-------------------------------------------
BankruptcyData reports that Temecula Valley Bancorp filed for
Chapter 7 protection (Bankr. C.D. Calif. Case No. 09-36828). The
Company is represented by Lawrence C. Meyerson.
Temecula Valley Bancorp Inc. served as the holding company for
Temecula Valley Bank.
On July 17, the California Department of Financial Institutions
closed Temecula Valley Bank and subsequently, the Federal Deposit
Insurance Corporation was appointed as receiver. Subsequent to
the Bank closure and receivership, the FDIC informed the Company
that First-Citizens Bank and Trust Company, Raleigh, North
Carolina, assumed all of the deposits of the Bank, excluding those
from brokers, and purchased essentially all of the Bank's assets
in a transaction facilitated by the FDIC.
As a result, the Company has ceased all business activity and
operations since the Bank has been the Company's only source of
revenue.
Temecula Valley had total assets of $1,495,000,000 against debts
of $1,484,911,000 as of March 31, 2009. However, some of these
assets belonged to the bank.
In a transaction with the FDIC, First-Citizens Bank and Trust
Company assumed all of the deposits and purchase essentially all
of the assets of Temecula Valley Bank. As of May 31, 2009,
Temecula Valley Bank had total assets of $1.5 billion and total
deposits of approximately $1.3 billion.
TISHMAN SPEYER: Nears Restructuring, Sale of Stuyvesant Town
------------------------------------------------------------
Tishman Speyer Properties LP and BlackRock Realty, the owners of
Manhattan's Stuyvesant Town-Peter Cooper Village, moved closer to
restructuring $3 billion in debt on the apartment complex as the
property verges on default, Fitch Ratings said, according to
reporting by Bloomberg News.
The companies turned the loan over to mortgage servicer CW
Capital on Nov. 6, Fitch said. Fitch said the property doesn't
produce enough income to pay the debt and a reserve fund probably
will be depleted by year-end.
A sale is more likely than a restructuring because the complex has
lost so much value, said Kevin O'Shea, managing partner and head
of the real estate practice at the law firm Allen & Overy.
"We requested that the joint venture's loan be moved to special
servicer in order to facilitate negotiations on a restructuring of
the debt load," said Bud Perrone, a Tishman Speyer spokesman. "The
loan is not in default."
According to Bloomberg, Tishman Speyer and BlackRock paid $5.4
billion for Stuyvesant Town in November 2006, near the top of the
market, in the biggest deal in New York residential real estate
history. They counted on increasing rents but were blocked by a
tenant lawsuit and rising costs. Since 2007, U.S. commercial
property values have fallen about 40 percent and apartment rents
declined nationwide. The drop in prices and the credit freeze have
made refinancing many loans impossible.
According to Bloomberg, real estate developer Richard LeFrak said
Tishman Speyer and BlackRock Realty need the cooperation of
tenants and politicians to restructure $3 billion of debt on the
complex. "It has to be some kind of grand negotiation or
compromise in which government and the tenants kind of agree on
a way forward," Mr. LeFrak said in an interview with Bloomberg.
Government-owned mortgage finance companies Fannie Mae and
Freddie Mac, which own the biggest portion of Stuyvesant Town-
Peter Cooper Village's debt, make them the obvious leaders in
renegotiating loan terms, Mr. LeFrak said.
About Tishman Speyer
Tishman Speyer Properties lays claim to two of the most famous
slices of the Big Apple -- New York City's Chrysler Building and
Rockefeller Center. The property company invests in, develops,
and/or operates commercial real estate. Other well known holdings
include Berlin's Q 205 project (the first post-reunification
development in the city's center) and Chicago's Franklin Center
(one of the city's largest office properties). The company owns
or has developed more than 115 million sq. ft. in Asia, Europe,
South America, and the US since it was founded in 1978. The
company also has projects in India, China, and Brazil, and owns
some 92,000 residential units around the world.
Stuyvesant Town-Peter Cooper Village comprises 56 multi-story
buildings, situated on 80 acres, and includes a total of 11,227
apartments. The loan sponsors, Tishman Speyer Properties, LP and
BlackRock Realty, acquired the property with the intent of
converting rent-stabilized units to market rents as tenants
vacated the property; however, the conversion of units has since
been determined to be illegal by the New York State Court of
Appeals. In addition to the $3 billion securitized balance,
there is an additional $1.5 billion of mezzanine debt held
outside the trust.
TOWER HOMES: Douglas Companies Sells Distressed Las Vegas Condo
---------------------------------------------------------------
The project that once boasted the largest crane -- 285 feet --
ever erected in southwest Las Vegas Valley has been sold through a
"stalking horse" bid process on behalf of the U.S. Trustee. The
announcement was made by Tigg Mitchell, Director of Brokerage
Services for Douglas Wilson Companies, one of the nation's most
experienced specialists in receivership services for distressed
commercial real estate.
"Our marketing efforts resulted in the largest multi-family land
transaction in Las Vegas this year," said Mr. Mitchell. " Our
company also re-created due diligence materials and entitlement
assessments."
The Spanish View Towers luxury high-rise project, originally
valued at $660 million, was thrown into bankruptcy in 2007 when
developer Tower Homes was served an involuntary petition filed by
several of the mechanics' lien creditors. Construction on the
14.3-acre project stopped in July 2006. One Cap Mortgage
Corporation, a private investment firm and wholly owned subsidiary
of OneCap Holding Corporation, held the trust deeds on the
property, valued at approximately $36 million, including interest
and fees.
Located near the Las Vegas Beltway and Buffalo Drive, the
partially completed Spanish View Towers site is fully excavated
with a partially constructed subterranean garage. Entitlements
include 390 units with wind turbine capacity in the top 26 feet of
three, 27-story towers and 29,000 square feet of ground floor
retail space.
About Douglas Wilson
Founded in 1989, San Diego-based Douglas Wilson Companies --
http://www.douglaswilson.com/-- is one of the largest firms of
its kind, providing a wide range of specialized business and real
estate services to law firms, state and federal courts,
corporations, partnerships, pension funds, REITS, financial
institutions and property owners nationwide.
Services include workout and problem resolution, crisis/force
majeure response, asset management, consulting, business planning,
receivership, development, entitlement, and construction
management. To date, the company has provided problem resolution
for more than 500 projects involving assets valued in excess of
$8 billion.
TOYS 'R' US: Fitch Assigns Issuer Default Rating at 'B-'
--------------------------------------------------------
Fitch Ratings has assigned an Issuer Default Rating of 'B-' to
Toys 'R' Us Property Co. II, LLC (previously known as Giraffe
Holdings, LLC) and rates Toys 'R' Us Property Co. II, LLC's new
$650 million senior secured notes 'B+/RR2'. The notes are secured
by first-priority liens on 129 properties held in a bankruptcy-
remote entity with a Master Lease covering all the properties,
which requires Toys Delaware to pay all costs and expenses related
to the ownership, operation, leasing and maintenance of the
properties. In addition, while the property company currently
does not have any subsidiaries, the notes will benefit from
guarantees by any future subsidiary of the property company.
Proceeds from the offering, an intercompany loan and a cash
contribution from Toys 'R' Us, Inc., as well as the release of
restricted cash and cash on hand will be used to repay the
existing $600 million Giraffe Holdings CMBS facility and
$200 million MPO Holdings CMBS facility.
Fitch has also affirmed these ratings:
Toys 'R' Us, Inc.
-- IDR 'B-'
-- Senior Unsecured Notes 'C/RR6'
Toys 'R' Us - Delaware, Inc.
-- IDR 'B-'
-- Secured Revolver 'B/RR3'
-- Secured Term Loan 'CC/RR6'
-- Unsecured Term Loan 'CC/RR6'
-- Senior Unsecured Notes 'CC/RR6'
Toys 'R' Us Property Co. I, LLC (previously known as TRU 2005 RE
Holding Co.)
-- IDR 'B-'
-- Senior Unsecured Notes 'B+/RR2'
Toys 'R' Us Europe, LLC (previously known as Toys 'R' Us (UK)
Ltd.)
-- IDR 'B-'
-- Secured Revolver 'B/RR3'
The Rating Outlook is Stable. TOY had $5.6 billion in debt
outstanding on Aug. 1, 2009.
The ratings reflect TOY's successful operating strategy which has
generated positive free cash flow and the company's adequate
liquidity. The ratings also reflect pressures on operating
results given the current challenging environment, TOY's highly
leveraged balance sheet and the intense competition in the toy
retailing sector.
TOY's juvenile strategy of having side-by-side Babies 'R' Us and
Toys 'R' Us stores, broad toy offering and exclusive and private
label products helped produce relatively steady operating results
in the last twelve months ended Aug. 1, 2009, compared to fiscal
2008 which ended Jan. 31, 2009. LTM revenues declined 3.3% and
LTM operating EBIT margin remained flat at 3.8% during the same
period despite the weak economy. In addition, TOY generated
positive free cash flow of $204 million for the LTM period as a
result of solid working capital management.
The company has adequate liquidity with $149 million of cash as of
Aug. 1, 2009, and capped availability of $988 million under its
domestic $2 billion senior secured revolving credit facility.
TOY's international subsidiaries recently entered into a three-
year GBP112 million senior secured asset-based revolving credit
facility which replaced the company's multi-currency credit
facility. With the successful offering of the current notes
issuance, TOY will have addressed its 2010 refinancing needs.
While TOY's credit metrics have been relatively stable in the past
18 months, its leverage ratio remains high with LTM adjusted
debt/EBITDAR of 6.9 times (x) and LTM EBITDAR coverage of interest
and rent of 1.5x. Fitch anticipates sales will continue to be
pressured in the near term given the current challenging operating
environment. However, the company's continued implementation of
its juvenile strategy and cost control efforts will help operating
margins to remain steady. This, combined with lower debt, should
lead to credit metrics improving slightly from the current levels.
Of concern is the strong competition in the toy retailing
business. TOY competes with a number of retailers, including
other toy retailers, discounters, and catalog and internet
businesses. Fitch expects price competition will continue to be
intense this holiday season as retailers seek to drive traffic
into the stores.
TOYS 'R' US: Moody's Affirms Corporate Family Rating at 'B2'
------------------------------------------------------------
Moody's Investors Service affirmed the B2 Corporate Family and
Probability of Default ratings of Toys "R" Us, Inc., and changed
the outlook to positive from stable. Moody's also assigned a Ba2
rating to the new $650 million senior secured notes for Toys "R"
Us Property Company II, LLC. Ratings on the new senior secured
notes for Toys "R" Us Property Company II, LLC, are subject to
Moody's review of final documentation.
The new $650 million senior secured notes (along with excess cash)
will be used to refinance and replace two CMBS facilities totaling
$800 million. The new notes are secured by mortgages on 116 owned
and 13 ground-leased properties, as well as the assignment of the
master lease between Propco II (as Lessor) and Toys "R" Us
Delaware (as Lessee).
The change in outlook to positive reflects Toys' solid operating
performance despite the difficult macroeconomic environment, with
credit metrics that continue to improve. Debt/EBITDA reduced to
5.9 times as of the LTM period ending May 2009. The refinancing
of the CMBS removes the lone remaining near-term refinancing
hurdle. "Toys continues to perform solidly despite the
challenging retail environment, and its operating discipline
remains a key factor," stated Moody's Senior Analyst Charlie
O'Shea. "We feel that its Holiday 2009 performance will be solid,
with its pop-up mall stores and FAO Schwarz in-store departments
likely to bear fruit as they represent a key point of
differentiation against the discounters."
New Rating assigned:
Toys "R" Us Property Company II, LLC
-- Senior secured notes at Ba2 (LGD 2, 13%).
Ratings affirmed and LGD point estimates adjusted include:
Toys "R" Us, Inc.
-- Corporate Family Rating at B2;
-- Probability of Default Rating at B2;
-- Senior unsecured notes rating at Caa1 (LGD 6, 93%) from Caa1
(LGD 6, 92%)
-- Speculative grade liquidity rating at SGL-3
Toys "R" Us Delaware. Inc.
-- Senior secured term loan due 2012 at B1 (LGD 3, 41%) from B1
(LGD 3, 37%)
-- 8.75% debentures due 2012 at B3 (LGD 5, 72%) from B3 (LGD 5,
70%)
Toys "R" Us Property Company I, LLC
-- Senior unsecured notes at B3 (LGD 5, 72%) from B3 (LGD 5,
70%).
Rating withdrawn:
-- TRU 2005 RE Holding Co I, LLC at B3
The Ba2 rating on the new Propco II loan reflects its secured
structure, with an advance rate against the mortgage collateral of
roughly 80%, and the assignment of the master lease with an
underlying rental stream which covers the notes' debt service by
1.65 times,
The affirmation of the SGL-3 speculative grade liquidity rating
does not consider the positive impact on Toys' liquidity of this
pending CMBS refinance. Upon successful closing of the new
$650 million Propco II notes, the SGL is likely to be upgraded to
SGL-2.
The last rating action for Toys "R" Us was the June 25, 2009
affirmation of the B2 Corporate Family and Probability of Default
Ratings, the affirmation of the SGL-3 speculative grade liquidity
rating, the upgrade of the Toys Delaware senior secured term loan
to B1, and the assignment of a B3 rating to the $950 million
senior unsecured notes of Toys "R" Us Property Company I, LLC.
Toys "R" Us, headquartered in Wayne, New Jersey, is the largest
specialty retailer of toys, with annual revenues of around
$13 billion. It operates stores both in the U.S. and
internationally, as well as the Babies "R" Us format.
TOYS 'R' US: S&P Assigns 'B+' Rating on $650 Mil. Senior Notes
--------------------------------------------------------------
Standard & Poor's Ratings Services said that it assigned its 'B+'
rating to Toys "R" Us Property Company II LLC's proposed
$650 million secured notes, one notch above the corporate credit
rating. The '2' recovery rating indicates S&P's expectation for
substantial (70%-90%) recovery in the event of a payment default.
The notes will be issued by Toys R Us Property Company II LLC
(formerly Giraffe Holdings LLC), a bankruptcy remote special
purpose entity, with ownership of 129 properties. These
properties are leased to Toys R Us - Delaware, Inc. (US Opco) via
a 20 year triple net master lease agreement.
"Proceeds of the proposed debt issue, along with proceeds from the
issuance of a $66 million intercompany note and cash on hand will
be used to repay about $800 million in collateralized mortgage-
backed securities debt due August 2010 currently under MPO
Holdings and Giraffe Holdings," said Standard & Poor's credit
analyst Ana Lai.
The ratings on Wayne, N.J.-based Toys "R" Us Inc. reflect
participation in the intensely competitive toy retailing sector,
especially from mass merchants and discounters such as Wal-Mart
Stores Inc. and Target Corp., extreme seasonality, dependence on
"hot" products and video games, and high debt leverage, with thin
cash-flow protection measures.
Despite sales pressure, Toys operating performance has remained
relatively stable because of management's strong execution,
merchandising initiatives, cost control, and the positive impact
from the store conversion program. These factors helped mitigate
the effects of negative sales and protect profitability. Sales
trends remain negative, with domestic comparable-store sales
declining 7% and international comparable-store sales declining
3.9% in the second quarter ended Aug. 2, 2009, reflecting weaker
consumer spending as well as a cyclical dip in the video game
business. Still, operating margin remained relatively flat, at
about 11% for the 12 months ended Aug. 2, 2009, as improvement in
the gross margin from a shift to higher-margin products largely
offset the impact of negative sales leverage on selling and
administrative expenses. While S&P expects weak economic
conditions should continue to hurt retail sales and competition to
remain intense in the second half of 2009, S&P expects Toys'
operating results to remain good, including the crucial holiday
season, because of management's success with its merchandising
strategy and cost-control initiatives, as well as the positive
impact from the store conversion program.
TRIBUNE CO: California Court to Rule on Rights in Dick Tracey
-------------------------------------------------------------
Judge Kevin Carey of the U.S. Bankruptcy Court for the District of
Delaware has allowed actor Warren Beatty to proceed with his
lawsuit in state court in California regarding his claims that he
owns television and movie rights to comic-strip character Dick
Tracy.
Tribune Co. has commenced its own adversary proceeding in the
Bankruptcy Court, seeking a summary judgment declaring Dick Tracy
as the company's property. Judge Carey did not dismiss the
adversary proceeding.
While Judge Carey allowed the California suit to move forward, he
will decide how a judgment can be implemented, however, Bill
Rochelle at Bloomberg reported.
About Tribune Co.
Headquartered in Chicago, Illinois, Tribune Co. --
http://www.tribune.com/-- is a media company, operating
businesses in publishing, interactive and broadcasting, including
ten daily newspapers and commuter tabloids, 23 television
stations, WGN America, WGN-AM and the Chicago Cubs baseball team.
The Company and 110 of its affiliates filed for Chapter 11
protection on Dec. 8, 2008 (Bankr. D. Del. Lead Case No. 08-
13141). The Debtors proposed Sidley Austion LLP as their counsel;
Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel;
Lazard Ltd. and Alvarez & Marsal North Americal LLC as financial
advisors; and Epiq Bankruptcy Solutions LLC as claims agent. As
of Dec. 8, 2008, the Debtors have $7,604,195,000 in total assets
and $12,972,541,148 in total debts.
Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy
News. The newsletter tracks the chapter 11 proceeding undertaken
by Tribune Company and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
TRIUMPH HEALTHCARE: Moody's Anticipates Repayment on Rated Debt
---------------------------------------------------------------
Moody's Investors Service said that it anticipates repayment in
full of Triumph Healthcare's rated debt, assuming the closing of
the pending acquisition by RehabCare Group (Ba3 CFR), announced on
November 3, 2009.
The last rating action was June 19, 2007, when Moody's affirmed
the ratings and stable outlook.
Triumph Healthcare, through its subsidiaries, operates long-term
acute care hospital facilities. The company was acquired by TA
Associates in 2004. The company's facilities include 11 "hospital
within a hospital" facilities and nine free-standing facilities.
Triumph generated revenues of approximately $428 million for the
twelve months ended June 30, 2009.
TRW AUTOMOTIVE: S&P Raises Corporate Family Rating to 'B3'
----------------------------------------------------------
Moody's Investors Service raised TRW Automotive, Inc.'s Corporate
Family and Probability of Default ratings to B3 from Caa1. In a
related action Moody's also raised the ratings of the senior
secured credit facilities to Ba3 from B1, and raised the ratings
for the guaranteed senior unsecured notes to Caa1 from Caa2. The
Speculative Grade Liquidity Rating is affirmed at SGL-3. The
rating outlook is stable.
The B3 Corporate Family Rating reflects TRW's improving operating
performance after restructuring initiatives and Moody's
expectation for improving global economic conditions and
automotive production levels into 2010. Improved operating
performance has resulted in the company's LTM Debt/EBITDA
(calculated using Moody's standard adjustments) improving to 6.2x
for the period ending October 2, 2009, from 8.3x for the period
ending July 3, 2009. The cost savings generated by restructuring
actions taken earlier in the year by TRW also are expected to
support operations as the company's various geographic end markets
exhibit differing degrees of recovery during 2010. In the North
American market, which accounts for about 30% of TRW's revenue, an
expected 15% increase in new auto sales off the extraordinarily
weak 2009 level should support improved auto parts demand.
However, in Europe which accounts for about 56% of TRW's revenue,
automotive unit sales are expected to decline by about 9%.
Content per vehicle will also be pressured as consumers' buying
preferences shift to smaller cars away from SUVs. Approximately
23% of TRW's 2008 revenues were from the North American operations
of the Detroit-3, exposing TRW to the potential for further market
share erosion, particularly at GM and Chrysler.
TRW's stable outlook continues to be supported by the benefits of
the aggressive restructuring actions taken by the company, which
have shown significant results over the recent quarters. However,
the ongoing cash burn and the expectation of further automotive
production declines in Europe will temper further increases in
operating performance over the intermediate-term. Other risks
include further restructuring actions and market share loses at
the Detroit-3, particularly at GM and Chrysler. TRW's competitive
position is expected to continue to benefit from its strong
position in safety products, and a sound level of geographic,
customer, and product diversification.
TRW's liquidity rating of SGL- 3 continues to reflect adequate
liquidity over the next twelve months. This view considers that
the impact of TRW's restructuring actions, which have contributed
to better than expected operating results recently, will continue
to support performance over the coming quarters. However, Moody's
believes that the working capital requirements to support sales
growth over the near term and increased pension contribution
requirements will pressure cash flow generation over the next
twelve months which limits a stronger liquidity profile. The
company maintained cash balances of $474 million as of October 2,
2009, and $1.3 billion of availability under its $1.4 billion of
revolving credit facilities after $57 million of letters of credit
and reductions of $48 million for Lehman Commercial Paper
commitments. The majority of the committed facility is expected
to remain available over the next twelve months providing ample
funding capacity for the company's needs. The company's recent
quarterly performance also will strengthen financial covenant
cushions over the near-term allowing TRW full access to the
revolver availability. Alternative liquidity arrangements will
continue to be limited by the current bank liens over
substantially all of the company's assets.
Ratings raised:
-- Corporate Family Rating, to B3 from Caa1;
-- Probability of Default Rating; to B3 from Caa1;
-- $1.4 billion combined senior secured domestic and global
revolving credit facilities, to Ba3 (LGD2, 13%) from B1
(LGD2, 15%);
-- $600 million senior secured term loan A, to Ba3 (LGD2, 13%)
from B1 (LGD2, 15%);
-- $500 million senior secured term loan B, to Ba3 (LGD2, 13%)
from B1 (LGD2, 15%);
-- $500 million senior unsecured notes due 2014, to Caa1 (LGD4,
69%) from Caa2 (LGD5, 71%);
-- Euro 275 million senior unsecured notes due 2014, to Caa1
(LGD4, 69%) from Caa2 (LGD5, 71%);
-- $600 million senior unsecured notes due 2017, to Caa1 (LGD4,
69%) from Caa2 (LGD5, 71%);
Rating affirmed:
-- Speculative Grade Liquidity Rating at SGL-3
The last rating action was on August 28, 2009, when the Corporate
Family Rating was raised to Caa1.
TRW Automotive, Inc., headquartered in Livonia, Michigan, is among
the world's largest and most diversified suppliers of automotive
systems, modules, and components to global vehicle manufacturers
and related aftermarket. The company has four operating segments:
Chassis Systems, Occupant Safety Systems, Automotive Components,
and Electronics. Its primary business lines encompass the design,
manufacture, and sale of active and passive safety related
products. Revenues in 2008 were approximately $15.0 billion.
TXCO RESOURCES: Inks $223 Million Sale Deal With Newfield
---------------------------------------------------------
TXCO Resources Inc. entered into a definitive Purchase and Sale
Agreement to sell a substantial portion of its assets to Newfield
Exploration Company for total consideration of $223 million in
cash, subject to customary purchase price adjustments for, among
other things, title and environmental defects in excess of
specified thresholds that TXCO is unable to cure prior to the
closing date.
The sale is expected to close before Feb. 28, 2010, but the
economic effective date of the sale will be Jan. 1, 2010.
Under the terms of the agreement, certain assets are excluded from
the assets being purchased by Newfield and will be retained by
TXCO, including, among others, TXCO's drilling rigs, offshore
properties, Oklahoma properties, non-operated properties within
the Williston Basin, non-operated properties in south Texas
outside of Maverick, LaSalle, Zavala and Dimmit Counties, and its
interests in the "Dexter Waterflood Unit", the "Forrest WM B1U"
and the "Vinton Dome."
The agreement contains customary representations, warranties,
covenants, and indemnities of TXCO and Newfield, and certain
termination rights for each of Newfield and TXCO, including, among
others, the right of either party to terminate the Agreement if
uncured title and environmental defects exceed 10% of the
unadjusted purchase price or if the Bankruptcy Court approves a
superior proposal or alternative plan of reorganization, and
Newfield's right to terminate:
-- after Nov. 18, 2009, if the Bankruptcy Court has not
approved an order approving the bid protection measures and
no-shop covenants contained in the Agreement;
-- on or after Jan. 14, 2010, if TXCO has not notified Newfield
that it does not intend to pursue a superior proposal or
alternative plan of reorganization;
-- if the Bankruptcy Court has not entered an order on or
before Jan. 31, 2010, authorizing the sale of the assets to
Newfield; and
-- if an order of the Bankruptcy Court authorizing the sale of
the assets to Newfield is not final by Feb. 15, 2010.
In addition, the agreement will be deemed terminated upon the
consummation of any superior proposal or alternative plan of
reorganization.
Furthermore, the agreement also provides that if a superior
proposal or alternative plan of reorganization is consummated,
TXCO may be required, under certain circumstances, to pay Newfield
a termination fee equal to 3% of the unadjusted purchase price
plus reimbursement of expenses not to exceed $500,000.
A full-text copy of the asset purchase agreement is available for
free at:
http://sec.gov/Archives/edgar/data/313395/000114420409057239/v1652
02_ex10-1.htm
TXCO Resources Inc. is an independent oil and gas enterprise with
interests in the Maverick Basin, the onshore Gulf Coast region and
the Marfa Basin of Texas, and the Midcontinent region of western
Oklahoma. TXCO's business strategy is to acquire undeveloped
mineral interests and internally developing a multi-year drilling
inventory through the use of advanced technologies, such as 3-D
seismic and horizontal drilling. It accounts for its oil and gas
operations under the successful efforts method of accounting and
trades its common stock on Nasdaq's Global Select Market under the
symbol "TXCO."
The Company and its affiliates filed for Chapter 11 protection on
May 17, 2009 (Bankr. W.D. Tex. Case No. 09-51807). The Debtors
hired Deborah D. Williamson, Esq., and Lindsey D. Graham, Esq., at
Cox Smith Matthews Incorporated, as general restructuring counsel;
Fulbright and Jaworski, L.L.P., as corporate counsel & conflicts
counsel; Albert S. Conly as chief restructuring officer and FTI
Consulting Inc. as financial advisor; Goldman, Sachs & Co. as
financial advisor for assets sale; Global Hunter Securities, LLC,
as financial advisors and investment bankers; and Administar
Services Group LLC as claims agent. Gardere Wynne Sewell LLP
represents the Committee.
As reported in Troubled Company Reporter on July 6, 2009, in their
schedules of assets and liabilities, the Debtors have $357,855,952
in total assets and $331,422,792 in total liabilities
UAL CORP: Lovejoy Ceases to Serve as SVP, Gen. Counsel & Secretary
------------------------------------------------------------------
UAL Corporation, the holding company whose primary subsidiary is
United Air Lines, Inc., reports that Paul R. Lovejoy ceased to
serve as Senior Vice President, General Counsel and Secretary of
the Company effective November 1, 2009.
Based in Chicago, Illinois, UAL Corporation (NASDAQ: UAUA) --
http://www.united.com/-- is the holding company for United
Airlines, Inc. United Airlines is the world's second largest air
carrier. The airline flies to Brazil, Korea and Germany.
The Company filed for Chapter 11 protection on December 9, 2002
(Bankr. N.D. Ill. Case No. 02-48191). James H.M. Sprayregen,
Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and Steven
R. Kotarba, Esq., at Kirkland & Ellis, represented the Debtors in
their restructuring efforts. Fruman Jacobson, Esq., at
Sonnenschein Nath & Rosenthal LLP represented the Official
Committee of Unsecured Creditors before the Committee was
dissolved when the Debtors emerged from bankruptcy. Judge Eugene
R. Wedoff confirmed the Debtors' Second Amended Plan on
January 20, 2006. The Company emerged from bankruptcy protection
on February 1, 2006. (United Airlines Bankruptcy News; Bankruptcy
Creditors' Service Inc., http://bankrupt.com/newsstand/or
215/945-7000)
* * *
UAL and United both carry a 'CCC' issuer default rating from Fitch
Ratings. UAL carries a 'B-'' on 'watch negative', corporate
credit rating from Standard & Poor's Ratings Services.
UCBH HOLDINGS: Fitch Downgrades Issuer Default Rating to 'C'
------------------------------------------------------------
Fitch Ratings has downgraded the long-term Issuer Default Rating
of UCBH Holdings, Inc., to 'C' from 'CC', indicating that default
is imminent or inevitable. Additionally, Fitch has withdrawn the
ratings of UCBH's bank subsidiary, United Commercial Bank.
Both actions follow the FDIC assisted acquisition of UCBH's
primary subsidiary UCB by Pasadena, California-based East West
Bank, a subsidiary of East West Bancorp (unrated by Fitch). EWB
acquired all the deposits and branches of UCB, including the Hong
Kong branch as well as UCB's Shanghai, China-based subsidiary.
All qualified financial contracts were also transferred to EWB.
Fitch has taken these actions on UCBH and its subsidiary:
UCBH Holdings, Inc.
-- Long-term IDR downgraded to 'C' from 'CC'.
United Commercial Bank
-- Long-term IDR 'CC' withdrawn ;
-- Long-term deposits 'CCC/RR3' withdrawn;
-- Short-term deposits 'C' withdrawn;
-- Short-term IDR 'C' withdrawn;
-- Individual downgraded to 'F' from 'E';
-- Support '5' withdrawn;
-- Support Floor 'NF' withdrawn.
These ratings are unaffected:
UCBH Holdings, Inc.
-- Short-term IDR'C';
-- Preferred Stock 'C/RR6';
-- Individual 'E';
-- Support'5';
-- Support Floor 'NF'.
UCBH Trust Co.
UCBH Capital Trust I
UCBH Capital Trust II
UCBH Capital Trust III
UCBH Capital Trust IV
UCBH Capital Trust V
UCBH Holdings Statutory Trust I
UCBH Holdings Statutory Trust II
-- Trust Preferred Securities 'C/RR6'.
UNITED COMMERCIAL: Moody's Withdraws Caa1 Long-Term Deposit Rating
------------------------------------------------------------------
Moody's Investors Service withdrew all ratings of United
Commercial Bank. UCB was the operating subsidiary of UCBH
Holdings, Inc., which is unrated. The withdrawal follows the
closing of UCB by the California Department of Financial
Institutions, and the appointment of the FDIC as receiver.
Moody's had UCB's long-term deposit rating of Caa1 on review for
possible downgrade. Moody's has withdrawn these ratings because
the issuer was placed in receivership and is no longer operating.
The FDIC entered into a purchase and assumption agreement with
East West Bank to purchase select assets and to assume the
deposits, excluding certain brokered deposits, of United
Commercial Bank. This agreement included all U.S. branches of
UCB, its Hong Kong branch, and its bank subsidiary headquartered
in Shanghai, China.
The last rating action by Moody's was on August 12, 2009, when the
agency downgraded UCB's Bank Financial Strength Rating to E from
E+, long-term deposits to Caa1 from B1, and long-term issuer
rating to C from B2.
United Commercial Bank headquartered in San Francisco, California,
reported total assets of $10.9 billion as of September 30, 2009.
Outlook Actions:
Issuer: United Commercial Bank
-- Outlook, Changed To Rating Withdrawn From Rating Under Review
Withdrawals:
Issuer: United Commercial Bank
-- Bank Financial Strength Rating, Withdrawn, previously rated E
-- Issuer Rating, Withdrawn, previously rated C
-- OSO Rating, Withdrawn, previously rated NP
-- Deposit Rating, Withdrawn, previously rated NP
-- OSO Senior Unsecured OSO Rating, Withdrawn, previously rated
C
-- Senior Unsecured Deposit Rating, Withdrawn, previously rated
Caa1
UNITED RENTALS: Moody's Downgrades Corporate Family Rating to 'B3'
------------------------------------------------------------------
Moody's Investors Service downgraded the ratings of United Rentals
(North America), Inc. -- Corporate Family and Probability of
Default Ratings to B3 from B2. The speculative grade liquidity
rating remains at SGL-3. The outlook is stable. In a related
action Moody's assigned a B3 rating to the proposed $400 million
guaranteed senior unsecured notes due 2019 being issued by United
Rentals (North America), Inc., and also a (P)B3 to the senior
unsecured portion of its shelf registration.
The rating downgrade was prompted by expectations for continued
weak financial performance and weak credit metrics including EBIT
coverage of interest -- currently below one times -- and
expectations for the equipment rental market to remain soft. The
rating considers the company's position as the world's largest
equipment rental company and its ability to sell used equipment to
support free cash flow. The company's geographic diversification
and broad array of equipment for rent have enabled it to partially
offset the significant construction downturn in the weakest
markets, particularly Florida, the mid-Western region, and
California. URI has improved its cost structure by reducing
headcount, closing stores, and streamlining purchasing operations
to address the decline in rental rates and utilization due to the
contraction in domestic non-residential construction, the main
driver of the company's business. The company is also shifting
towards longer term rentals, reducing capital expenditures, and
selling underutilized equipment in the secondary market to better
align the business with current operating conditions. Fleet
contraction during a downturn is an important avenue of financial
flexibility for equipment rental companies but profitability
remains elusive.
URI announced that it is offering approximately $400 million
aggregate principal amount of senior unsecured notes maturing in
2019. The use of proceeds are primarily to purchase or retire
outstanding senior secured and senior unsecured indebtedness. The
proposed debt issuance is part of an ongoing strategy to extend
the company's debt maturity profile and support liquidity.
Moody's believes that URI's free cash flow generation over the
near term and substantial revolving credit facility availability
are important offsets to the current weakened credit metrics. The
ratings consider the company's adequate liquidity as indicated by
its speculative grade liquidity rating of an SGL-3. The company's
liquidity benefits from excess collateral on its ABL.
The change in the company's ratings outlook to stable reflects
Moody's belief that while URI's financial performance will
continue to be hindered by its leveraged capital structure, low
interest coverage, and weak demand and pricing for rental
equipment for much of 2010, the company's forecasted performance
is not currently anticipated to result in a further ratings
downgrade.
These rating actions were taken:
United Rentals (North America), Inc.:
-- Multiple Seniority Shelf - unsecured portion- rated (p)B3,
LGD3, 47%;
-- Probability of Default Rating, Downgraded to B3 from B2;
-- Corporate Family Rating, Downgraded to B3 from B2;
-- Senior Subordinated Regular Bond/Debentures, Affirmed at
Caa1, LGD Downgraded to LGD5, 78% from LGD5, 77%;
-- Senior Secured Bank Credit Facility, Downgraded to Ba2, LGD2
, 17% from Ba1, LGD2, 15%;
-- Senior Unsecured Regular Bond/Debentures, Downgraded to B3,
LGD3, 47% from B2, LGD3, 45%;
-- Senior Subordinated Convertible, rated Caa1, LGD changed to
LGD5 78%, from LGD5, 77%.
United Rentals Trust I:
-- Preferred Stock downgraded to Caa2 from Caa1, LGD 6, 94%.
The last rating action was on June 2, 2009, at which time Moody's
affirmed URI's Corporate Family Rating at B2 and rated the
company's proposed $300 million senior unsecured notes due 2016.
United Rentals, Inc., headquartered in Greenwich, Connecticut, is
a holding company that conducts its operations through United
Rentals (North America), Inc., and its subsidiaries. URI is the
world's largest equipment rental company operating approximately
580 rental locations throughout the United States, Canada and
Mexico. The company maintains over 3,000 classes of rental
equipment having an original equipment cost of $3.8 billion.
Revenues for the LTM period through September 30, 2009, totaled
approximately $2.61 billion.
UNITED RENTALS: S&P Assigns 'B' Rating on $400 Mil. Senior Notes
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B' issue-level
rating to United Rentals (North America) Inc.'s (a subsidiary of
United Rentals Inc.) proposed new $400 million senior unsecured
notes due 2019, the same as the corporate credit rating on United
Rentals (North America) Inc. and URI. The recovery rating on this
debt is '4', indicating S&P's expectation of average (30%-50%)
recovery in a default scenario.
S&P expects the company to use the proceeds from the new notes to
retire outstanding senior unsecured indebtedness, pay down
outstanding borrowings under its asset-backed revolving credit
facility, and for general corporate purposes. The issue-level
ratings and recovery ratings for the company's existing debt
remain unchanged.
"The ratings on URI reflect S&P's assessment of its fair business
risk profile, based on the company's participation in the
cyclical, highly competitive, and fragmented equipment rental
sector, as well as its highly leveraged financial profile," said
Standard & Poor's credit analyst Helena Song.
"The company's position as the world's largest provider of
equipment rentals and good geographic, product, and customer
diversity somewhat moderate these risks," she continued. S&P
bases the current ratings and outlook on the assumption that key
end markets, specifically nonresidential construction markets,
will decline by about 20% in 2009 and 18% in 2010. Standard &
Poor's could lower the rating if nonresidential spending drops
more than S&P expected in 2009 or 2010, or if URI's free cash flow
generation fails to meet S&P's expectations in a declining market,
causing leverage to approach 7x. S&P is unlikely to upgrade the
rating at this point in the cycle.
Ratings List
United Rentals Inc.
United Rentals (North America) Inc.
Corp. credit rating B/Negative/--
New Ratings Assigned
Proposed new $400 million sr. unsecd notes due 2019 B
Recovery rating 4
UNUM GROUP: Reports Net Income of $221 Million in Q3 2009
---------------------------------------------------------
Unum Group reported its results for the third quarter ended
September 30, 2009.
Unum Group reported net income of $221.1 million for the third
quarter of 2009, compared to net income of $108.0 millionfor the
third quarter of 2008.
Included in the results for the third quarter of 2009 are net
realized after-tax investment gains of $9.5 million, compared to
net realized after-tax investment losses of $108.9 million in the
third quarter of 2008. Net realized after-tax investment gains
for the third quarter of 2009 include an after-tax gain of
$28.9 million resulting from changes in the fair value of an
embedded derivative in a modified coinsurance contract, compared
to an after-tax loss of $44.1 million in the third quarter of
2008. Also included in net realized after-tax investment gains
for the third quarter of 2009 is a net realized after-tax
investment loss of $19.4 million related to sales and write-downs
of investments, compared to a net after-tax investment loss of
$64.8 million in the third quarter of 2008.
Adjusting for these items, income on an after-tax basis was
$211.6 million in the third quarter of 2009, compared to
$216.9 million in the third quarter of 2008.
"I am pleased with our results for the third quarter, as well as
our continued strong position in our markets, in what remains a
challenging economic environment," said Thomas R. Watjen,
president and chief executive officer. "While we expect the
environment will remain challenging, we are well positioned to
profitably grow our business as general business conditions
improve and, in the meantime, continue to generate solid results
and maintain a strong balance sheet and capital position."
At September 30, 2009, the Company's consolidated balance sheets
showed total assets of $54.475 billion, total liabilities of
$46.232 billion, and shareholders' equity of $8.243 billion.
A full-text copy of the Company's consolidated financial
statements for the three months ended September 30, 2009, is
available for free at http://researcharchives.com/t/s?490a
Liquidity/Debt
The Company believes its cash resources are sufficient to meet its
liquidity requirements for the next 12 months and that its
current level of holding company liquidity can be utilized to
mitigate potential losses from defaults.
Net cash provided by operating activities was $853.6 million for
the nine months ended September 30, 2009, compared to
$1.021 billion for the comparable period of 2008.
At September 30, 2009, the Company had long-term debt, including
senior secured notes and junior subordinated debt securities,
totaling $2.580 billion. Leverage ratio, when calculated
excluding the non-recourse debt and associated capital of Tailwind
Holdings and Northwind Holdings, was 21.1% at September 30, 2009,
compared to 21.5% at December 31, 2008. Leverage ratio, when
calculated using consolidated debt to total consolidated capital,
was 25.6% at September 30, 2009, compared to 26.6% at December 31,
2008.
Going Concern Doubt
The Company says that while it recently obtained covenant relief
from its banks and has no major debt payments due until 2011, in
March 2009 its external auditors stated there was "substantial
doubt" about the company's ability to continue as a going concern
if the automotive industry's financial problems were not resolved
soon.
The majority of the company's revenues are generated by sales to a
single domestic automobile manufacturer. Due to the weak economy,
automobile production has decreased dramatically in recent
quarters, with the expectation of further production cuts in
future quarters.
About Unum Group
Headquartered in Chattanooga, Tennessee, Unum Group (NYSE: UNM) --
http://www.unum.com/-- and its insurance and non-insurance
subsidiaries, operate in the United States, the United Kingdom,
and, to a limited extent, in certain other countries around the
world. The principal operating subsidiaries in the United States
are Unum Life Insurance Company of America, Provident Life and
Accident Insurance Company, The Paul Revere Life Insurance
Company, and Colonial Life and Accident Insurance Company, and in
the United Kingdom, Unum Limited. The Company is one of the
leading providers of employee benefits products and services and
the largest provider of disability insurance products in the
United States and the United Kingdom. The Company has three major
business segments: Unum US, Unum UK and Colonial Life.
URBI DESARROLLOS: Moody's Reviews 'Ba3' Senior Unsec. Debt Rating
-----------------------------------------------------------------
Moody's has lowered Urbi Desarrollos Urbanos, S.A.B. de C.V.'s
national scale senior unsecured debt rating to Baa1.mx, from A3.mx
and the rating was placed under review for possible downgrade.
Urbi's Ba3 global scale senior unsecured debt rating (local and
foreign currency), Ba3 corporate family rating and short-term MX-2
national scale rating were also placed under review for possible
downgrade.
The ratings actions reflect Urbi's breach of a leverage covenant
in its $1.06 billion Mexican pesos (US$79.8 million) of local
bonds for the 3Q09. Urbi was required to keep its ratio of debt
to earnings before interest (excluding capitalized interest),
taxes, depreciation and amortization (including deferred financing
fees) or Adjusted EBITDA, below 2x. Changes in the accounting
policy under MFRS D-6 in the last two years combined with the
adverse operating environment derived from the current and
expected to be protracted financial crisis as well as the
significant global economic contraction has depleted liquidity and
lowered the availability of bridge financing, and has pressured
Urbi's earnings.
Urbi has 40 days to cure this breach, and thus the bondholders
have not declared a default. The company expects to either change
or waive debt covenants. During its review Moody's will closely
monitor the amendment process, which is expected to close no later
than 40 days. Failure to correct the covenant breach could result
in the acceleration of this indebtedness before its stated
maturity and create more negative pressure on the ratings.
Moody's will most likely affirm Urbi's ratings upon a successful
resolution of the covenant breach within the cure period.
Moody's notes Urbi has maintained a diverse, top-10 competitive
position, which has helped it to respond effectively to the
volatile Mexican property market. Furthermore, Urbi has produced
consistent, sound profitability and maintained solid liquidity
with a conservative capital structure. The company is publicly
held, with a solid corporate infrastructure, which enhances
transparency and governance. Urbi's large land bank, good cost
controls, and sophisticated construction and sales management
platforms support its solid operating margins.
These ratings were placed under review down for possible
downgrade:
* Urbi Desarrollos Urbanos, S.A.B. de C.V. -- Senior unsecured
debt rating at Ba3 (global local and foreign currency);
corporate family rating at Ba3; senior unsecured MTN program at
Ba3 (global local currency); commercial paper program at MX-2
(national scale)
These ratings were downgraded and placed under review down for
possible downgrade:
* Urbi Desarrollos Urbanos, S.A.B. de C.V. -- National scale
senior unsecured debt rating to Baa1.mx, from A3.mx
Moody's last rating action with respect to Urbi took place on
October 21, 2009, when Moody's affirmed Urbi's Ba3 global scale,
local and foreign currency, senior unsecured debt rating and A3.mx
national scale rating, as well as Urbi's short-term MX-2 national
scale rating (Not Prime, global scale). The company's Ba3
corporate family rating was also affirmed. The rating outlook
remained stable.
Urbi Desarrollos Urbanos is a publicly traded, fully integrated
homebuilder engaged in the development, construction, marketing
and sale of affordable housing in Mexico. The firm reported
assets of approximately $33 billion Mexican pesos and equity of
approximately $16.5 billion Mexican pesos at September 30, 2009.
VIKING DRILLING: Plan Confirmation Hearing Set for Dec. 8
---------------------------------------------------------
Viking Drilling ASA has a Dec. 8 confirmation hearing where it
will attempt to win approval of a liquidating Chapter 11 plan,
Bill Rochelle at Bloomberg reported.
Viking Drilling ASA and its units, including Offshore (USA) Inc.,
filed a proposed liquidating plan and explanatory disclosure
statement where its three semi-submersible offshore drilling rigs
will be transferred to a liquidating trust for sale after
confirmation, Bill Rochelle at Bloomberg News reported.
The Company has been unable to find buyers for the rigs since
filing under Chapter 11 in February 2008.
The proposed disclosure statement lists the liquidation value of
the three vessels at US$2 million to US$7 million. The appraiser,
RS Platou, said that two of the rigs may be worth nothing. A
separate appraisal said that miscellaneous equipment purchased for
US$19.1 million has an estimated liquidation value of US$9.2
million.
The Plan, according to Mr. Rochelle, calls for the liquidation
trust to sell the property and distribute the proceeds in
accordance with priorities under bankruptcy law. The disclosure
statement says that the recovery by first- and second-lien debt
holders will be less than 50 percent. Unsecured creditors won't
see more than 1 percent, according to the disclosure statement.
United States Debt Recovery LLC, a buyer of a US$2 million claim,
has filed a motion to convert the bankruptcy case to a liquidation
in Chapter 7. The conversion motion will be heard if the Chapter
11 Plan does not push through.
About Viking Drilling
Viking Drilling ASA -- http://www.vikingdrilling.com/-- provides
offshore drilling. Viking Offshore provides controlled services
for each of the rig-owning entities under a managed service
agreement. Viking Offshore currently has five employees at its
offices in Houston. The Viking Drilling Group, comprised of
Viking Drilling ASA and its subsidiaries, owns three out-of-
service bare deck semi-submersibles: SS Viking Producer, SS Viking
Century, and SS Viking Prospector.
Viking Producer, Inc. and Viking Century, Inc. are Liberian
corporations fully owned by Viking Drilling ASA. Viking
Prospector, Inc. is a Marshall Islands corporation and is also
fully owned by Viking Drilling ASA.
In February 2008, Oslo, Norway-based Viking Drilling ASA sent its
U.S. unit to Chapter 11 bankruptcy in the U.S., citing that the
reactivation project of three rigs of SS Viking Producer will
result in a major cost overrun. It explained that completing the
reactivation project would require significant additional
financing requirement.
Viking Offshore (USA) Inc., and its affiliates filed for Chapter
11 protection on February 29, 2008 (Bankr. S.D. Tex. Case No. 08-
3121). John P. Melko, Esq. at Gardere Wynne Sewell, LLP
represents the Debtors. When they filed for protection from their
creditors, the companies listed assets and debts both between
US$100 million to US$500 million.
Debt includes $86 million of bonds sold in September 2006 and a
$60 million second-lien loan from February 2007. Viking also
entered into another second-lien loan in December 2007 for
$125 million.
VISTEON CORP: Donofrio Moves to Shaw Group
------------------------------------------
Gregory A. Taylor, Esq., at Ashby & Geddes, P.A., in Wilmington,
Delaware, disclosed that John Donofrio, who until recently served
as senior vice president, general counsel and chief compliance
officer of Visteon Corporation, has been appointed as executive
vice president, general counsel and corporate secretary of The
Shaw Group Inc.
Mr. Taylor revealed that while Ashby & Geddes has not, and does
not, represent Mr. Donofrio in any respect, Ashby & Geddes has
and continues to represent The Shaw Group Inc.
Ashby & Geddes previously represented The Shaw Group in
connection with matters unrelated to the Debtors' Chapter 11
cases, Mr. Taylor assured the Court.
The Official Committee of Unsecured Creditors of Visteon Corp.
has obtained the Court's authority to retain Ashby & Geddes, P.A.,
as its Delaware counsel nunc pro tunc to June 10, 2009.
About Visteon Corp
Visteon continues to win new business despite the difficult
economic environment. During the first nine months of 2009,
Visteon won more than $400 million in incremental new business. On
a regional basis, Asia and North America each accounted for 41
percent of the total, with Europe accounting for the remaining 18
percent.
Headquartered in Van Buren Township, Michigan, Visteon Corporation
(NYSE: VC) -- http://www.visteon.com/-- is a global automotive
supplier that designs, engineers and manufactures innovative
climate, interior, electronic and lighting products for vehicle
manufacturers, and also provides a range of products and services
to aftermarket customers. The company has corporate offices in
Van Buren Township, Michigan (U.S.); Shanghai, China; and Kerpen,
Germany. It has facilities in 27 countries and employs roughly
35,500 people. The Company has assets of $4,561,000,000 and debts
of $5,311,000,000 as of March 31, 2009.
Visteon Corporation and 30 of its affiliates filed for Chapter 11
protection on May 28, 2009, (Bank. D. Del. Case No. 09-11786
through 09-11818). Judge Christopher S. Sontchi oversees the
Chapter 11 cases. James H.M. Sprayregen, Esq., Marc Kieselstein,
Esq., and James J. Mazza, Jr., Esq., at Kirkland & Ellis LLP, in
Chicago, Illinois, represent the Debtors in their restructuring
efforts. Laura Davis Jones, Esq., James E. O'Neill, Esq., Timothy
P. Cairns, Esq., and Mark M. Billion, Esq., at Pachulski Stang
Ziehl & Jones LLP, in Wilmington, Delaware, serve as the Debtors'
local counsel. The Debtors' investment banker and financial
advisor is Rothschild Inc. The Debtors' notice, claims, and
solicitation agent is Kurtzman Carson Consultants LLC. The
Debtors' restructuring advisor is Alvarez & Marsal North America,
LLC.
Bankruptcy Creditors' Service, Inc., publishes Visteon Bankruptcy
News. The newsletter tracks the Chapter 11 proceedings of Visteon
Corp. and its debtor-affiliates. (http://bankrupt.com/newsstand/
or 215/945-7000)
VISTEON CORP: Drops Suit vs. Jabil Circuit
------------------------------------------
In a certification of counsel, Visteon Corp.'s counsel, Laura
Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP, in
Wilmington, Delaware, tells the Court that prior to and after the
Petition Date, the Debtors and Jabil Circuit, Inc., engaged in
good faith negotiations with the goal of resolving any disputed
issued between the parties. Ms. Jones notes that the parties have
stipulated to the voluntary dismissal of the Adversary Complaint
initiated by the Debtors, without prejudice and with each side to
bear its own costs and expenses, including attorney fees. The
parties stipulate to the dismissal because the Adversary Complaint
has been settled.
Visteon Corporation commenced an adversary complaint against
Jabil Circuit, Inc., a provider of certain printed circuit board
assemblies used by Visteon to manufacture certain electronic
automotive assemblies, including radios, instrument clusters, and
climate control heads. Visteon sells the Automotive Assemblies
to original equipment manufacturers, including Ford Motor
Company, Nissan Motor Company, and Honda Motor Company.
Visteon sued Jabil after it was notified by Jabil that unless the
Debtor purchased excess inventory related to the Ford Program or
"P131", Jabil would not comply with the next scheduled transfer.
Visteon added that it has requested Jabil to turn over the P131
Tooling under the Transfer Plan, but Jabil contended that Visteon
is not entitled to pick up the items.
About Visteon Corp
Visteon continues to win new business despite the difficult
economic environment. During the first nine months of 2009,
Visteon won more than $400 million in incremental new business. On
a regional basis, Asia and North America each accounted for 41
percent of the total, with Europe accounting for the remaining 18
percent.
Headquartered in Van Buren Township, Michigan, Visteon Corporation
(NYSE: VC) -- http://www.visteon.com/-- is a global automotive
supplier that designs, engineers and manufactures innovative
climate, interior, electronic and lighting products for vehicle
manufacturers, and also provides a range of products and services
to aftermarket customers. The company has corporate offices in
Van Buren Township, Michigan (U.S.); Shanghai, China; and Kerpen,
Germany. It has facilities in 27 countries and employs roughly
35,500 people. The Company has assets of $4,561,000,000 and debts
of $5,311,000,000 as of March 31, 2009.
Visteon Corporation and 30 of its affiliates filed for Chapter 11
protection on May 28, 2009, (Bank. D. Del. Case No. 09-11786
through 09-11818). Judge Christopher S. Sontchi oversees the
Chapter 11 cases. James H.M. Sprayregen, Esq., Marc Kieselstein,
Esq., and James J. Mazza, Jr., Esq., at Kirkland & Ellis LLP, in
Chicago, Illinois, represent the Debtors in their restructuring
efforts. Laura Davis Jones, Esq., James E. O'Neill, Esq., Timothy
P. Cairns, Esq., and Mark M. Billion, Esq., at Pachulski Stang
Ziehl & Jones LLP, in Wilmington, Delaware, serve as the Debtors'
local counsel. The Debtors' investment banker and financial
advisor is Rothschild Inc. The Debtors' notice, claims, and
solicitation agent is Kurtzman Carson Consultants LLC. The
Debtors' restructuring advisor is Alvarez & Marsal North America,
LLC.
Bankruptcy Creditors' Service, Inc., publishes Visteon Bankruptcy
News. The newsletter tracks the Chapter 11 proceedings of Visteon
Corp. and its debtor-affiliates. (http://bankrupt.com/newsstand/
or 215/945-7000)
VISTEON CORP: PEWA Wants Prompt Decision on Supply Pacts
--------------------------------------------------------
Panasonic Electric Works Corporation of America and certain of
the Debtors are parties to a prepetition purchase order, numbered
P1000794, as well as certain scheduling orders and other
agreements pursuant to which PEWA supplies goods to the Debtors.
The Debtors incorporate PEWA's products into their own component
parts which the Debtors, in turn, supplies to vehicle
manufacturers like General Motors Corporation and Chrysler Group
LLC.
About one year before the Petition Date, PEWA became concerned
with the Debtors' deteriorating financial condition based on the
Debtors' balance sheet, public filings, press reports and other
industry recognized statistical models.
Nevertheless, PEWA continued to supply goods to the Debtors
resulting in the fact that as of the Petition Date, the Debtors
were and remain indebted to PEWA for $760,000 on account of
products supplied to the Debtors by PEWA pursuant to the
Prepetition Contract.
In light of the Debtors' substantial prepetition defaults, and in
order to provide some semblance of adequate assurance that PEWA
would be compensated for the continued shipment of essential
components to the Debtors postpetition, on or about July 21,
2009, the Debtors entered into an agreement with PEWA whereby the
Debtors agreed postpetition to temporary net 20-day payment terms
from the receipt of the goods by the Debtors.
By this motion, PEWA asks the Court to compel the Debtors to
immediately decide on whether assume or reject the Prepetition
Contract pursuant to Section 365 of the Bankruptcy Code.
About Visteon Corp
Visteon continues to win new business despite the difficult
economic environment. During the first nine months of 2009,
Visteon won more than $400 million in incremental new business. On
a regional basis, Asia and North America each accounted for 41
percent of the total, with Europe accounting for the remaining 18
percent.
Headquartered in Van Buren Township, Michigan, Visteon Corporation
(NYSE: VC) -- http://www.visteon.com/-- is a global automotive
supplier that designs, engineers and manufactures innovative
climate, interior, electronic and lighting products for vehicle
manufacturers, and also provides a range of products and services
to aftermarket customers. The company has corporate offices in
Van Buren Township, Michigan (U.S.); Shanghai, China; and Kerpen,
Germany. It has facilities in 27 countries and employs roughly
35,500 people. The Company has assets of $4,561,000,000 and debts
of $5,311,000,000 as of March 31, 2009.
Visteon Corporation and 30 of its affiliates filed for Chapter 11
protection on May 28, 2009, (Bank. D. Del. Case No. 09-11786
through 09-11818). Judge Christopher S. Sontchi oversees the
Chapter 11 cases. James H.M. Sprayregen, Esq., Marc Kieselstein,
Esq., and James J. Mazza, Jr., Esq., at Kirkland & Ellis LLP, in
Chicago, Illinois, represent the Debtors in their restructuring
efforts. Laura Davis Jones, Esq., James E. O'Neill, Esq., Timothy
P. Cairns, Esq., and Mark M. Billion, Esq., at Pachulski Stang
Ziehl & Jones LLP, in Wilmington, Delaware, serve as the Debtors'
local counsel. The Debtors' investment banker and financial
advisor is Rothschild Inc. The Debtors' notice, claims, and
solicitation agent is Kurtzman Carson Consultants LLC. The
Debtors' restructuring advisor is Alvarez & Marsal North America,
LLC.
Bankruptcy Creditors' Service, Inc., publishes Visteon Bankruptcy
News. The newsletter tracks the Chapter 11 proceedings of Visteon
Corp. and its debtor-affiliates. (http://bankrupt.com/newsstand/
or 215/945-7000)
WABASH NATIONAL: Posts $66.4 Million Net Loss in Q3 2009
--------------------------------------------------------
Wabash National Corporation disclosed last week its financial
results for the quarter ended September 30, 2009.
The Company reported a net loss of $66.4 million for the third
quarter of 2009 on net sales of $88 million. For the same quarter
last year, the Company reported a net loss of $4.3 million on net
sales of $243.0 million. Third quarter new trailer sales totaled
3,600 units, which represents a 63% decline from the prior year
period. For the nine months ended September 30, 2009, the net
loss totaled $112.6 million on sales of $252 million. For the
comparable period of 2008, the net loss totaled $13.9 million on
sales of $605 million.
The Company reported an operating loss of $10.2 million for the
third quarter of 2009, compared to an operating loss of
$4.5 million for the third quarter last year. For the nine months
ended September 30, the company reported an operating loss of
$54.2 million and $16.5 million for 2009 and 2008, respectively.
On a non-GAAP basis, Operating EBITDA (Earnings before interest,
taxes, preferred stock dividends, depreciation, amortization,
stock based compensation, and other non-operating income and
expense; as well as, any other non-cash special charges) was a
loss of $4.6 million for the third quarter of 2009, compared to
Operating EBIDA of $1.9 million for the third quarter of 2008.
Dick Giromini, president and chief executive officer, stated, "For
the third quarter, our operating loss has now shown improvement
for three straight quarters at $10.2 million and Operating EBITDA
improved by 57% versus the second quarter to a loss of
$4.6 million. In addition, net sales improved for the second
straight quarter. We are encouraged by these results despite the
challenging demand environment and remain committed to returning
the Company to profitability as quickly as possible. These
results, combined with enhanced liquidity which as of
September 30th was $36 million, give us confidence that we can
weather the current cycle and build upon a stronger, more
efficient foundation when market conditions improve."
Giromini continued, "Looking ahead, we see several encouraging
signs in the macroeconomic landscape. Total manufacturing
inventories appear to be bottoming and both tonnage and net
trailer orders are incrementally increasing. While the operating
environment will likely remain challenging for the near-term, we
believe the worst is now behind us."
Three and nine month results for 2009 include a non-cash charge of
$54.0 million related to an increase in the fair value of the
warrant issued to Trailer Investments as a part of the Securities
Purchase Agreement entered into on July 17, 2009. The increase in
the fair value of the warrant was driven by the increase in the
Company's stock price during the quarter.
Balance Sheets
At September 30, 2009, the Company's consolidated balance sheets
showed $240.5 million in total assets, $176.7 million in total
liabilities, $19.4 million in preferred stock, and $44.4 million
in shareholders' equity.
The Company reported current assets of $88.4 million and current
liabilities of $138.0 million at September 30, 2009, resulting in
a working capital deficit of $49.6 millon.
A full-text copy of the Company's consolidated financial
statements for the three and nine months ended September 30, 2009,
are available for free at http://researcharchives.com/t/s?4904
Liquidity
The Company believes that the liquidity provided by the
$35 million investment in the Company by Trailer Investments, LLC,
on August 3, 2009, and the amendment and restatement of the
Company's existing revolving credit facility effective on
August 3, 2009, will be adequate to fund expected operating
losses, working capital requirements and capital expenditures in
2009 and 2010, which is expected to be a period of economic
uncertainty; therefore, the outstanding balances on the Company's
Revolving Facility have been classified as long term.
Going Concern Doubt
In its April 9, 2009 audit report on the Company's consolidated
financial statements as of and for the years ended December 31,
2008, and 2007, ErnsT & Young LLP, in , the Company's independent
registered public accounting firm, in Indianapolis, Indiana,
expressed substantial doubt about the Company's ability to
continue as a going concern.
The auditors stated that the Company's industry continued to
experience a significant downturn which has had an adverse impact
on the Company's results of operations, financial position and
liquidity. The Company has incurred a loss from operations in
2008 and subsequent to December 31, 2008, the Company has
experienced events of default under its Second Amended and
Restated Loan and Security Agreement which gives the lenders the
right to declare all amounts outstanding immediately due and
payable, to restrict advances and to terminate the facility. These
factors raise substantial doubt about the Company's ability to
continue as a going concern.
Amended Facility/Waiver
On July 17, 2009, the Company entered into the Third Amended and
Restated Loan and Security Agreement with its lenders, effective
August 3, 2009, with a maturity date of August 3, 2012. The
Amended Facility has a capacity of $100 million, subject to a
borrowing base, a $12.5 million reserve and other discretionary
reserves. The lenders waived certain events of default that had
occurred under the previous credit facility and waived the right
to receive default interest during the time the events of default
had continued. The interest rate on borrowings under the Amended
Facility from the date of effectiveness through July 31, 2010, is
LIBOR plus 4.25% or the prime rate of Bank of America, N.A. (the
"Prime Rate") plus 2.75%. After July 31, 2010, the interest rate
is based upon average unused availability and will range between
LIBOR plus 3.75% to 4.25% and the Prime Rate plus 2.25% to 2.75%.
The Company is required to pay a monthly unused line fee equal to
0.375% times the average daily unused availability along with
other customary fees and expenses of the agent and the lenders.
About Wabash National
Headquartered in Lafayette, Indiana, Wabash National Corporation
(NYSE: WNC) -- http://www.wabashnational.com/-- is one of the
leading manufacturers of semi trailers in North America.
Established in 1985, the Company specializes in the design and
production of dry freight vans, refrigerated vans, flatbed
trailers, drop deck trailers, dump trailers, truck bodies and
intermodal equipment. Its products are sold under the
DuraPlate(R), ArcticLite(R), FreightPro(TM), Eagle(R), and
Benson(TM) brand names. The Company operates two wholly owned
subsidiaries: Transcraft Corporation, a manufacturer of flatbed,
drop deck and dump trailers as well as truck bodies; and Wabash
National Trailer Centers, trailer service centers and retail
distributors of new and used trailers and aftermarket parts
throughout the U.S.
WOODSIDE GROUP: Files Modified 2nd Amended Plan of Reorganization
-----------------------------------------------------------------
Woodside Group, LLC, et al., filed with the U.S. Bankruptcy Court
for the Central District of California on October 9, 2009, a
modified second amended joint plan of reorganization.
A full-text copy of the modified second amended joint plan of
reorganization is available for free at:
http://bankrupt.com/misc/woodside.modified2ndamendedplan.pdf
As reported in the Troubled Company Reporter on October 7, 2009,
several Woodside Group LLC creditors, including Wachovia Bank NA,
Wells Fargo NA and Zions First National Bank, objected to the
bankrupt real estate developer's latest reorganization plan, which
they claim doesn't adequately protect their rights.
Plan Overview
The Plan effectuates a reorganization of the Debtors (other than
Alameda Investments, LLC and Liberty Holdings Group, LLC) through
the issuance of debt and equity in Newco, and the preservation of
the Debtors' business operations and going concern value. Newco
will be a new limited liability company to be formed which
will own all of the ownership interests in Reorganized Woodside
and Reorganized Pleasant Hill Investments.
The Liquidating Debtors -- Alameda and Liberty -- will liquidate
all of their assets for the benefit of their respective creditors,
in accordance with the provisions of the Plan. Holders of
Interests will not receive or retain any property under the Plan,
and any potential estate claims against insiders will be preserved
and prosecuted and litigated. The Plan will be funded by way of
the Debtors' cash on hand, revenues from ordinary course
operations, proceeds of asset sales, and, if necessary, new
financing. There will no substantive consolidation of the
Debtor's estates under the Plan.
Pursuant to the Plan, holders of Allowed Reorganizing Debtor
Financial Lender Claims, Allowed Reorganizing Debtor Bond
Indemnity Claims (if the appropriate election is made by the
Debtors pursuant to the Plan), and Allowed Reorganizing Debtor
General Unsecured Claims will be allocated Restructured Debt and
Restructured Equity of Newco in proportion to each Allowed Claim
and the particular Debtors against which such Claim is allowed.
The Restructured Debt to be issued by Newco will be secured by
substantially all of the Reorganized Debtors' assets (other than
real property), and it will be guaranteed by the Reorganized
Debtors.
Holders of Allowed Alameda General Unsecured Claims, Allowed
Liberty General Unsecured Claims, Allowed Alameda Bond Indemnity
Claims, and Allowed Liberty Bond Indemnity Claims will receive
their respective pro rata share of any available assets of Alameda
and Liberty, respectively, after satisfaction of all senior
claims.
All existing Interests in Woodside and PHI will be extinguished
and the holders of such Interests will not receive or retain any
property on account of such Interests. Newco will be vested with
the Interests in Reorganized Woodside and Reorganized PHI, and
Rorganized Woodside will be vested directly or indirectly with the
Interests in the Reorganized Debtor Subsidiaries.
Finally, all other (senior) Allowed Claims, such as Administrative
Claims, Priority Tax Claims, Priority Non-Tax Claims and Secured
Claims, will be paid or otherwise satisfied pursuant to the terms
of the the Plan.
Treatment of Claims and Interests
The Plan provides these classification and treatment of Claims
against and Interests in the Debtors:
Estimated Amount
Class Type of Claim or Value of Claims Treatment
----- --------------------- ------------------ ---------
RD 1 Priority Non-Tax $1,000,000 Unimpaired
Claims
RD 2 Secured Claims $2,000,000 Unimpaired
RD 3 Essential Trade Claims $3,000,000 Unimpaired
RD 4 Financial Lender Claims $717,000,000 Impaired
RD 5 Bond Indemnity Claims $48,600,000 Impaired
RD 6 General Unsecured Claims $176,000,000 Impaired
RD 7 General Unsecured To be determined Impaired
Convenience laims
RD 8 De Minimis Convenience To be determined Impaired
Claims
RD 9 Pre-Relief Date Impaired,
Intercompany Claims consent to
the plan
RD 10 Interests N/A Impaired,
deemed to
reject
LD 1 Alameda Priority Less than $1,000,000 Unimpaired
Non-Tax Claims
LD 2 Liberty Priority Less than $1,000,000 Unimpaired
Non-Tax Claims
LD 3 Alabama Secured Less than $1,000,000 Unimpaired
Claims
LD 4 Liberty Secured Less than $1,000,000 Unimpaired
Claims
LD 5 Alameda Bond $48,600,000 Impaired
Indemnity Claims
LD 6 Alameda General $200,000,000 Impaired
Unsecured Claims
LD 7 Alameda Bond $48,600,000 Impaired
Indemnity Claims
LD 8 Liberty General $169,000,000 Impaired
Unsecured Claims
LD 9 Pre-Relief Date Impaired,
Intercompany Claims consent to
the Plan
LD 10 Interests N/A Impaired,
deemed to
reject
RD Class 1, RD Class 2, RD Class 3, LD Class 1, LD Class 2, LD
Class 3, and LD Class 4, being unimpaired, are deemed to have
accepted the Plan. RD Class 4, RD Class 5, RD Class 6, RD Class
7, RD Class 8, LD Class 5, and LD Class 6, LD Class 7, and LD
Class 8 are impaired under the Plan and entitled to accept or
reject the Plan. RD Class 10 and LD Class 10 are presumeed to
reject the Plan.
About Woodside Group
Headquartered in North Salt Lake, Utah, Woodside Group LLC
http://www.woodside-homes.com/-- is the parent company of
multiple subsidiaries and through approximately 185 of those
subsidiaries is primarily engaged in homebuilding operations in
eight states. The operations of the Woodside Group are financed
through Woodside Group's affiliate Pleasant Hill Investments, LC.
Woodside Group, Pleasant Hill Investments and each of the 185
subsidiaries are the Debtors. Woodside Group also has
subsidiaries and affiliates that are not debtors.
On March 31, 2008, Woodside AMR 107, Inc., and Woodside Portofino,
Inc., filed voluntary petitions for relief under Chapter 11 of the
United States Bankruptcy Code. On August 20, 2008, an Ad Hoc
Group of Noteholders commenced the filing of involuntary petitions
against the Debtors (other than AMR 107 and Portofino). On August
20, 2008, JPMorgan Chase Bank, N.A., on behalf of the Bank Group,
commenced the filing of certain Joinders in the Involuntary
Petition. On September 16, 2008, the Debtors filed a
"Consolidated Answer to Involuntary Petitions and Consent to Order
for Relief" and the Court entered the "Order for Relief Under
Chapter 11."
The Debtors are jointly administered under Case No. 08-20682.
The Bankruptcy Cases are currently pending before the Honorable
Peter Carroll in the United States Bankruptcy Court for the
Central District of California (Riverside).
Harry D. Hochman, Esq., Jeremy V. Richards, Esq., Linda F. Cantor,
Esq., and Maxim B. Litvak, Esq., at Pachulski Stang Ziehl & Jones
LLP, in Los Angeles, represent the Debtors as counsel.
During 2007, the Woodside entities generated revenues exceeding
$1 billion on a consolidated basis. As of December 31, 2007, the
Woodside Entities had consolidated assets and liabilities of
approximately $1.5 billion and $1.1 billion, respectively. As of
the September 16, 2008 petition date, the Debtors have
approximately $70 million in cash. The Woodside Entities employ
approximately 494 employees.
In its schedules, Woodside Group, LLC, listed total assets of
$1,000,285,578 and total liabilities of $691,352,742. The
schedules are unaudited.
WP HICKMAN: Disclosure Statement Hearing Slated for December 3
--------------------------------------------------------------
The Hon. M. Bruce McCullough of the U.S. Bankruptcy Court for the
Western District of Pennsylvania will consider the adequacy of the
information in the Disclosure Statement filed by W.P. Hickman
Systems, Inc., and its debtor-affiliates on Dec. 3, 2009, at
10:30 a.m. The hearing will be held at the Courtroom B, 54th
Floor, U.S. Steel Tower, 600 Grant Street, Pittsburgh,
Pennsylvania. Objections, if any, are due on Nov. 27, 2009.
The Debtors will begin soliciting votes on the Plan after approval
of the adequacy of the information in the Disclosure Statement.
According to the Disclosure Statement, the Plan divides the Claims
against the Debtors into 5 Classes and designates the equity
interests in the Debtors as a separate Class:
Class 1 - Secured Claims. Each holder of an allowed secured
claim, will receive, at the option of the Reorganized Debtors, and
in full satisfaction of the claim.
Class 2 - Priority Non-Tax Claims. Each holder of an allowed
priority non-tax claim, if any, will receive cash in an amount
equal to 100% of the unpaid amount of their respective allowed
priority non-tax claim.
Class 3 - FirstMerit Unsecured Claim. Specifically, pursuant to
the Bankruptcy Court's final order dated Feb. 27, 2009, FirstMerit
will have an allowed non-priority general unsecured claim in the
total amount of $2,105,604. FirstMerit will receive, prior to any
distribution to holders of General unsecured claims, priority tax
claims, and priority non-tax claims, but after payment in full of:
(i) all fees and expenses of litigation and otherwise monetizing
the proceeds; and (ii) all allowed administrative claims, the
first $300,000, plus the priority FirstMerit claim, from the
proceeds of any causes of action as the amount become available.
Class 4 - General Unsecured Claims. Each holder of an allowed
general unsecured claim will receive, in one or more distributions
as permitted under the Plan, the lesser of (i) cash in an amount
equal to 100% of the unpaid amount of their allowed general
unsecured claim, or (ii) their ratable proportion of the Debtor's
cash.
Class 5 - Warranty Claims. Holders of Warranty Claims will not
receive any distribution.
Class 6 - Equity Interests. All equity interests will be deemed
cancelled and extinguished. Holders of equity interests will not
receive any distribution.
Under the Plan, holders of Class 3 Claim and Class 4 Claims will
receive a distribution in an amount less than the amount they are
owed. Accordingly, holders of Claims in Class 3 and Class 4 are
impaired and are entitled to vote to accept or reject the Plan.
Class 1 and Class 2 are not impaired under the Plan and,
therefore, are not entitled to vote on it. Class 5 and Class 6
are impaired, but because those Classes will likely receive no
distribution under the Plan, holders of Warranty Claims and Equity
Interests are not entitled to vote on the Plan. Thus, the Debtors
will not solicit votes from members of Classes 1, 2, 5 and 6.
The Reorganized Debtors will use the Remaining Assets in order to
fund the Plan. The Reorganized Debtors will continue prosecuting
and commence any other causes of action and will liquidate any
remaining assets and use the proceeds of the litigation and sales
to fund the Plan. Liquidation and sales of remaining assets after
the Effective Date will not be subject to further Bankruptcy Court
Order, provided however, consistent with section 6.10 of the Plan,
settlement of any Causes of Action will be subject to approval of
the Bankruptcy Court if the amount claimed by the Reorganized
Debtors against a defendant is unliquidated or equals to or
exceeds $100,000. The Reorganized Debtors may settle any or all
causes of action as it deems appropriate, without the need to
obtain approval or any other or further relief from the Bankruptcy
Court, if the amount claimed by the Reorganized Debtors against a
defendant is less than $100,000. The payments to be made to
holders of allowed claims will be made by the disbursing agent in
accordance with the Plan.
A full-text copy of the Disclosure Statement is available for free
at http://bankrupt.com/misc/WPHICKMAN_DS.pdf
A full-text copy of the Joint Plan of Liquidation is available for
free at http://bankrupt.com/misc/WPHICKMAN_planofLiquidation.pdf
Headquartered in Solon, Ohio, W.P. Hickman Systems, Inc. --
http://www.wphickman.com/-- offers commercial roofing products.
The Debtors engage in providing services to the federal government
through its GSA certification and are involved in major buying
groups including Sodexho-USA, Horizon Resource Group and U.S
Community Services. The company and its affiliates filed for
Chapter 11 protection on Oct. 2, 2008 (Bankr. W.D. Pa. Lead Case
No. 08-26591). Paul J. Cordaro, Esq., and Aurelius P. Robleto,
Esq., at Campbell & Levine LLC represent the Debtors in their
restructuring efforts. James E. Van Horn, Esq., at McGuireWoods
LLP represent the Official Committee of Unsecured Creditors as
counsel. W.P. Hickman listed assets of between $10 million and
$50 million, and the same range of debts.
YOUNG BROADCASTING: Creditors Committee Files Amended Ch. 11 Plan
-----------------------------------------------------------------
Young Broadcasting Inc.'s unsecured creditors filed with the U.S.
Bankruptcy Court for the Southern District of New York a
Disclosure Statement Supplement regarding its Amended Joint Plan
of Reorganization.
According to the Disclosure Statement, the key elements of the
Creditors' Committee's Plan are:
-- Reinstatement of the Prepetition Lender Claims.
-- A commitment by certain parties to provide an investment of
$45.6 million of new equity capital in the form of new
preferred stock and new common stock.
-- Distribution of 10% of the New Common Stock to Noteholders.
-- The opportunity for noteholders to participate in a rights
offering to purchase their pro rata share of the new
preferred stock and new common stock, subject to a cap of
4.9% of the new common stock. The management may also
participate in the rights offering on a limited basis.
-- Distributions to holders of allowed general unsecured
claims, except noteholders, equal to the lesser of their pro
rata share of $1,000,000 or a one-time cash distribution
equal to 10% of the amount of their allowed claims.
-- Cancellation of existing equity interests.
-- Retention of key management and creation of a new management
and director equity incentive plan.
-- Distributions of Class B new common stock equal to 40% of
the voting stock but only 10% of the beneficial ownership to
Vincent Young.
According to the DS, the Reorganized Company will make
distributions and pay interest and amortization on the term loans
and transaction costs required under the Plan from (1) the equity
contribution, (2) the Reorganized Company's cash balances and
cash from operations; and (3) any other means of financing or
funding that the Debtors or the Reorganized Company determine is
necessary or appropriate to fund distributions required under the
Plan.
As reported in the Troubled Company Reporter on Oct. 14, 2009, the
unsecured creditors Plan of Reorganization will challenge the
Company's plan to sell its assets to its senior lenders for
$220 million.
As reported by the TCR on Sept. 29, 2009, Young Broadcasting Inc.
and its debtor-affiliates delivered to the U.S. Bankruptcy Court
for the District of Delaware a joint Chapter 11 plan of
reorganization, wherein the reorganized Debtors will issue the
reorganized Young common stock, and distribute and deliver it to
New Young Broadcasting Holding Co. Inc., a new corporation created
for the purpose of (i) owning 100% of the reorganized Young common
stock issued under the Plan and (ii) issuing the Holdco
securities, among other things. A full-text copy of the Debtors'
Joint Chapter 11 Plan is available for free at:
http://ResearchArchives.com/t/s?45aa
A full-text copy of the Official Committee of Unsecured Creditors'
Amended Joint Plan of Reorganization is available for free at:
http://researcharchives.com/t/s?490b
A full-text copy of the Disclosure Statement Supplement of the
Official Committee of Unsecured Creditors regarding its amended
Joint Plan of Reorganization is available for free at:
http://researcharchives.com/t/s?490c
Young Broadcasting, Inc. -- http://www.youngbroadcasting.com/--
owns 10 television stations and the national television
representation firm, Adam Young, Inc. Five stations are
affiliated with the ABC Television Network (WKRN-TV -Nashville,
TN, WTEN-TV - Albany, NY, WRIC-TV - Richmond, VA, WATE-TV -
Knoxville, TN, and WBAY-TV - Green Bay, WI), three are affiliated
with the CBS Television Network (WLNS-TV - Lansing, MI, KLFY-TV -
Lafayette, LA and KELO-TV - Sioux Falls, SD), one is affiliated
with the NBC Television Network (KWQC-TV - Davenport, IA) and one
is affiliated with MyNetwork (KRON-TV - San Francisco, CA). In
addition, KELO- TV- Sioux Falls, SD is also the MyNetwork
affiliate in that market through the use of its digital channel
capacity.
The Company and its affiliates filed for Chapter 11 protection on
February 13, 2009 (Bankr. S.D.N.Y. Lead Case No. 09-10645). Jo
Christine Reed, Esq., at Sonnenschein Nath & Rosenthal LLP,
represents the Debtors in their restructuring effort. The Debtors
selected UBS Securities LLC as consultant; Ernst & Young LLP as
accountant; Epiq Bankruptcy Solutions LLC as claims agent; and
David Pauker chief restructuring officer Andrew N. Rosenberg,
Esq., at Paul Weiss Rifkind Wharton & Harrison LLP, serves as
counsel to the official unsecured creditors committee.
YRC WORLDWIDE: Commences Debt for Equity Exchange Offer
-------------------------------------------------------
YRC Worldwide Inc. on November 9 commenced an exchange offer for
all of the following outstanding series of notes:
-- the company's 5.0% Net Share Settled Contingent Convertible
Senior Notes and 5.0% Contingent Convertible Senior Notes
due 2023,
-- the company's 3.375% Net Share Settled Contingent
Convertible Senior Notes and 3.375% Contingent Convertible
Senior Notes due 2023, and
-- the 8 1/2% Guaranteed Notes due April 15, 2010, of the
company's wholly owned subsidiary, YRC Regional
Transportation, Inc.
with an aggregate face value of approximately $536.8 million, plus
accrued and unpaid interest. The debt instruments will be
exchanged for shares of the company's common stock and new Class A
Convertible Preferred Stock in such amounts as are set forth in
the company's Registration Statement on Form S-4 filed November 9
with the Securities and Exchange Commission, which together on an
as-if converted basis would represent approximately 95% of the
company's issued and outstanding common stock. This exchange is
intended to improve the company's capital structure, decrease its
cash interest expense, and enhance its nearterm liquidity.
The company said that the exchange offer, which was commenced
following several months of ongoing, active dialogue with
representatives of the noteholders, will, if successful, place the
company on a more solid financial base and, in concert with other
steps taken over the recent past to improve its operations and
cost structure, will make it more competitive and position it to
take advantage of any upturn in the economy.
To validly tender their notes, the participating noteholders will
be required to become party to a mutual release with the company
and consent to an amendment of the terms of the notes that would
remove substantially all of the material covenants other than the
obligation to pay principal and interest on the notes and those
relating to the conversions rights of convertible notes, and
eliminate or modify the related events of default.
The exchange offer will expire at 11:59 p.m., New York City time,
on December 7, 2009, unless extended by the company. Rothschild,
Inc. and Moelis & Company LLC are acting as lead dealer managers
in connection with the exchange offer. Holders of the notes may
contact Rothschild at (800) 753-5151 (U.S. toll-free) or collect
at (212) 403-3716 and Moelis at (866) 270-6586 (U.S. toll-free) or
collect at (212) 883-3813 with any questions they may have
regarding the exchange offer.
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 Enter Ch. 11 If Debt Exchange Fails
-----------------------------------------------------
YRC Worldwide Inc. told investors that it would file for
bankruptcy if it cannot complete a $536 million debt exchange
offer that will enable it to tap into a $106 million revolver
credit reserve.
YRC announced that it is commencing an exchange offer for all of
the following outstanding series of notes:
* 5.0% Net Share Settled Contingent Convertible Senior Notes
and 5.0% Contingent Convertible Senior Notes due 2023,
* 3.375% Net Share Settled Contingent Convertible Senior Notes
and 3.375% Contingent Convertible Senior Notes due 2023, and
* the 8-1/2% Guaranteed Notes due April 15, 2010 of the
Company's wholly owned subsidiary, YRC Regional
Transportation, Inc.
with an aggregate face value of approximately $536.8 million,
plus accrued and unpaid interest.
The debt instruments will be exchanged for shares of the company's
common stock and new Class A Convertible Preferred Stock in such
amounts as are set forth in the company's Registration Statement
on Form S-4 filed with the Securities and Exchange Commission,
which together on an as-if converted basis would represent
approximately 95% of the company's issued and outstanding common
stock. This exchange is intended to improve the company's capital
structure, decrease its cash interest expense, and enhance its
near-term liquidity.
The company said that the exchange offer, which was commenced
following several months of ongoing, active dialogue with
representatives of the noteholders, will, if successful, place the
company on a more solid financial base and, in concert with other
steps taken over the recent past to improve its operations and
cost structure, will make it more competitive and position it to
take advantage of any upturn in the economy.
To validly tender their notes, the participating noteholders will
be required to become party to a mutual release with the company
and consent to an amendment of the terms of the notes that would
remove substantially all of the material covenants other than the
obligation to pay principal and interest on the notes and those
relating to the conversions rights of convertible notes, and
eliminate or modify the related events of default.
The exchange offer will expire at 11:59 p.m., New York City time,
on December 7, 2009, unless extended by the company. Rothschild,
Inc. and Moelis & Company LLC are acting as lead dealer managers
in connection with the exchange offer. Holders of the notes may
contact Rothschild at (800) 753-5151 (U.S. toll-free) or collect
at (212) 403-3716 and Moelis at (866) 270-6586 (U.S. toll-free) or
collect at (212) 883-3813 with any questions they may have
regarding the exchange offer.
"If we are unable to complete the Exchange Offer and address our
near term liquidity needs as a result of any such discussions, we
would then expect to seek relief under the U.S. Bankruptcy Code.
The Company expects that any such filing for relief would occur
after its orderly completion of planning and preparation for such
a filing," the Company said in its Form 10-Q for quarter ended
Sept. 30, 2009.
"To successfully complete a restructuring in a bankruptcy case, we
would require debtor-in-possession financing, the most likely
source of which would be our existing lenders. If we were unable
to obtain financing in a bankruptcy case or any such financing was
insufficient to fund operations pending the completion of a
restructuring, there would be substantial doubt that the Company
could complete a restructuring."
A copy of the presentation to investors is available for free at:
http://researcharchives.com/t/s?490d
A copy of the Company's financial statements as of Dec. 31, 2008
is available for free at:
http://researcharchives.com/t/s?490e
A copy of the Company's third quarter 2009 report on Form 10-Q
filed with the Securities and Exchange Commission is available for
free at:
http://researcharchives.com/t/s?490f
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 Nov. 4, 2009,
Standard & Poor's Ratings Services lowered its corporate credit
rating on YRC Worldwide Inc. to 'CC' from 'CCC'. At the same
time, S&P lowered the corporate credit ratings on selected
subsidiaries' senior unsecured debt issues to 'C' from 'CC'. The
recovery ratings on the senior unsecured debt remain at '6'. S&P
placed all the issue-level ratings on CreditWatch with negative
implications, pending completion of the proposed exchange offer.
implications on April 24, 2009.
* Post-Bankruptcy Attorneys' Fee Claims Are Allowed
---------------------------------------------------
According to Bill Rochelle at Bloomberg, the U.S. Court of Appeals
in Manhattan joined the appeals court from San Francisco in ruling
Nov. 5 that a creditor has a valid claim for post-bankruptcy
attorneys' fees if the underlying contract provides.
The 9th Circuit in San Francisco in June allowed an attorneys' fee
claim for post-bankruptcy expenses. The 6th U.S. Circuit Court of
Appeals in Cincinnati, in a 1985 opinion, also allows claims of
the type.
The new case from the 2nd Circuit is Ogle v. Fidelity & Deposit
Co. of Maryland, 09-0691, U.S. 2nd Circuit Court of Appeals
(Manhattan).
* Unemployment at 10.2%; 17.5% with Discouraged Workers
-------------------------------------------------------
The unemployment rate rose to 10.2 percent in the U.S. in
October, marking the first time joblessness exceeded 10% since
1983, Bill Rochelle at Bloomberg said. Including part-time
workers and the unemployed who would work although they can't land
jobs, the jobless rate reached a record 17.5%. Payrolls declined
by 190,000, more than the median 175,000 contraction expected by
economists surveyed by Bloomberg.
* FDIC's 20% Shorter 'Merit' Reviews Preceded Failures
------------------------------------------------------
James Sterngold at Bloomberg News reports that at least three U.S.
banks failed in the past year after the Federal Deposit Insurance
Corp. deemed them healthy enough to qualify for a program that
reduced the time examiners spent on reviews by at least 20%.
According to the report, the three banks -- FirstCity Bank in
Stockbridge, Georgia, Security Pacific Bank in Los Angeles and 1st
Centennial Bank in Redlands, California -- were among the banks
included in the agency's Merit program, designed to increase
efficiency by focusing examiners' attention on weaker firms. The
program, launched in 2002, was terminated in March 2008 after
examiners complained that the guidelines usurped their judgment.
"The program was misconceived from the beginning," said Colleen
Kelley, president of the National Treasury Employees Union, which
represents the examiners. "Employees believed the procedures were
directed more at reducing examination hours than at ensuring
proper supervision."
* Fried Frank Expands International Finance Practice
----------------------------------------------------
Fried Frank disclosed that Mark Wesseldine will join the Firm's
finance practice as a partner and will be based in London. Mr.
Wesseldine specializes in leveraged finance transactions with
broad experience in all financing disciplines. Mr. Wesseldine was
previously a partner at Allen & Overy.
Mr. Wesseldine has extensive experience in leveraged acquisitions
and other event driven financings. Mr. Wesseldine practice
includes advising lenders, investors and borrowers, including
major financial institutions, financial sponsors and corporate
entities, on a wide range of multi-jurisdictional leveraged
buyouts and other complex financing and restructuring
transactions.
"We are delighted to have someone of Mark's caliber join the Firm
as we continue to extend the depth of our global finance practice.
He has worked on some of the largest and most high profile
leveraged transactions in the European market," said Valerie Ford
Jacob, Fried Frank's Chairperson.
" Mr. Wesseldine brings his experience and expertise to a strong
team who have been working on some of the most innovative and
prominent transactions in the market, including advising on the
largest European high yield transaction this year and the first
'amend and extend' bank amendments in Europe," added Managing
Partner, Justin Spendlove.
Fried Frank's financing practice stands out because of its
presence at all levels of the capital structure, working on some
of the most sophisticated and complex deals on behalf of lead
managers, arrangers and private equity sponsors. Clients include
blue-chip corporations, financial institutions and private equity
funds on a wide array of transactions, including merger and
acquisition, mezzanine, and leveraged financing.
"As a result of the recent disruption to the financial markets, it
is increasingly important for law firms to understand the debt
market on both sides of the Atlantic and are able to apply this
knowledge to transactions. Mr. Wesseldine's appointment is a key
part of our commitment to building our international practice,"
said Fried Frank's Head of Finance, Bill Reindel.
About Fried, Frank, Harris, Shriver & Jacobson LLP
Fried, Frank, Harris, Shriver & Jacobson LLP --
http://www.friedfrank.com.-- is a leading international law firm
with more than 500 attorneys in offices in New York, Washington,
D.C., London, Paris, Frankfurt, Hong Kong and Shanghai. Fried
Frank lawyers regularly represent many of the world's leading
corporations and financial institutions. The Firm offers legal
counsel on antitrust and competition; bankruptcy and
restructuring; benefits and compensation; corporate matters,
including asset management, capital markets, corporate governance,
financings, mergers and acquisitions, and private acquisitions and
private equity; energy, alternative energy and climate change;
financial institutions; government investigations and regulatory
counseling including internal investigations and monitoring,
securities enforcement and regulation and white-collar criminal
defense; insurance; intellectual property and technology;
international trade; litigation including arbitration and
alternative dispute resolution, commercial litigation,
environmental litigation, government contracts, securities and
shareholder litigation; real estate; tax; and trusts and estates.
The Firm has an association with Huen Wong & Co. in Hong Kong.
* Matthew Feldman Returns to Willkie Farr & Gallagher
-----------------------------------------------------
Willkie Farr & Gallagher LLP disclosed that Matthew A. Feldman has
rejoined the firm after serving as the Chief Legal Advisor to the
Obama administration's Presidential Task Force on the Auto
Industry. Mr. Feldman was recruited to join the Auto Team at the
United States Treasury to help develop the overall strategy to
restructure and recapitalize General Motors Corporation and
Chrysler LLC, a strategy which resulted in the ground breaking
legal proceedings which implemented a comprehensive financial
solution for both companies. The Auto Team conducted complex
negotiations with all major constituents of both companies,
including Fiat SpA (which now runs Chrysler), the United Auto
Workers and major creditors of both auto makers under a compressed
timeline set by President Obama.
The cabinet-level Treasury Department task force was assembled
last winter to advise Treasury Secretary Timothy F. Geithner and
National Economic Council Director Lawrence H. Summers on
reorganization efforts by the automobile manufacturers and their
suppliers. In recognition of his efforts and sacrifices, Mr.
Feldman received the "Secretary's Honor Award," presented to him
by Secretary Geithner for his "distinguished service to the
American people as the Chief Legal Advisor to the Department of
Treasury Auto Team."
Willkie Chairman Jack H. Nusbaum said, "Matt was called upon to
play a vital role in helping to restructure the U.S. auto
industry, a critical component of our country's manufacturing
base. We are proud of his extraordinary accomplishments in
Washington and are delighted to welcome him back to the firm."
Mr. Feldman, one of the nation's top bankruptcy attorneys, has
rejoined Willkie as a partner and Co-Chair, with partner Marc
Abrams, of the firm's Business Reorganization and Restructuring
Department in the New York office. He will also resume his
membership on the firm's Executive Committee. Mr. Feldman's
extensive experience includes representing all parties in
bankruptcy proceedings including debtors, creditors, lenders and
acquirors of assets.
Willkie Farr & Gallagher LLP is an international law firm of
approximately 700 attorneys with offices in New York, Washington,
Paris, London, Milan, Rome, Frankfurt and Brussels. The firm is
headquartered in New York City at 787 Seventh Avenue. Tel:
212.728.8000.
* President Obama Nominates Gotbaum as PBGC Director
----------------------------------------------------
President Barrack Obama on November 9, 2009, announced his intent
to nominate Joshua Gotbaum, as Director of Pension Benefit
Guaranty Corporation.
Joshua Gotbaum, currently an Operating Partner at Blue Wolf
Capital, has for three decades helped manage and advise public,
private, and nonprofit institutions. From 2003 to 2005, he led
and managed the successful reorganization of Hawaiian Airlines as
its Chapter 11 Trustee.
In 2001, he was the first CEO of The September 11th Fund, a
charity with over $500 million in assets whose grants helped more
than 100,000 affected by the attacks. During the Clinton
Administration, Mr. Gotbaum was Executive Associate Director and
Controller in the Office of Management and Budget; Assistant
Secretary of Treasury for Economic Policy; and Assistant Secretary
of Defense. For more than a decade, Mr. Gotbaum was an investment
banker with Lazard Freres in New York and London. He advised
businesses, unions and governments on a diverse range of mergers,
acquisitions and restructurings, in steel, transportation, and
many other industries. During the Carter administration, he
served on the White House staff and in the Department of Energy.
Mr. Gotbaum holds a B.A. from Stanford, a J.D. from Harvard Law
School, and an M.P.P. from Harvard's Kennedy School of Government.
* Upcoming Meetings, Conferences and Seminars
---------------------------------------------
Dec. 3-5, 2009
AMERICAN BANKRUPTCY INSTITUTE
21st Annual Winter Leadership Conference
La Quinta Resort & Spa, La Quinta, California
Contact: 1-703-739-0800; http://www.abiworld.org/
January 27-29, 2010
TURNAROUND MANAGEMENT ASSOCIATION
Distressed Investing Conference, Bellagio, Las Vegas
Contact: http://www.turnaround.org/
Feb. 21-23, 2010
INSOL
International Annual Regional Conference
Madinat Jumeirah, Dubai, UAE
Contact: 44-0-20-7929-6679 or http://www.insol.org/
April 20-22, 2010
TURNAROUND MANAGEMENT ASSOCIATION
Sheraton New York Hotel and Towers, New York, NY
Contact: http://www.turnaround.org/
Apr. 29-May 2, 2010
AMERICAN BANKRUPTCY INSTITUTE
Annual Spring Meeting
Gaylord National Resort & Convention Center, Maryland
Contact: 1-703-739-0800; http://www.abiworld.org/
June 17-20, 2010
AMERICAN BANKRUPTCY INSTITUTE
Central States Bankruptcy Workshop
Grand Traverse Resort and Spa, Traverse City, Michigan
Contact: 1-703-739-0800; http://www.abiworld.org/
July 7-10, 2010
AMERICAN BANKRUPTCY INSTITUTE
Northeast Bankruptcy Conference
Ocean Edge Resort, Brewster, Massachusetts
Contact: 1-703-739-0800; http://www.abiworld.org/
July 14-17, 2010
AMERICAN BANKRUPTCY INSTITUTE
Southeast Bankruptcy Conference
The Ritz-Carlton Amelia Island, Amelia, Fla.
Contact: http://www.abiworld.org/
Aug. 5-7, 2010
AMERICAN BANKRUPTCY INSTITUTE
Mid-Atlantic Bankruptcy Workshop
Hyatt Regency Chesapeake Bay, Cambridge, Maryland
Contact: 1-703-739-0800; http://www.abiworld.org/
Oct. 6-8, 2010
TURNAROUND MANAGEMENT ASSOCIATION
TMA Annual Convention
JW Marriott Grande Lakes, Orlando, Florida
Contact: http://www.turnaround.org/
Dec. 2-4, 2010
AMERICAN BANKRUPTCY INSTITUTE
22nd Annual Winter Leadership Conference
Camelback Inn, Scottsdale, Arizona
Contact: 1-703-739-0800; http://www.abiworld.org/
Mar. 31-Apr. 3, 2011
AMERICAN BANKRUPTCY INSTITUTE
Annual Spring Meeting
Gaylord National Resort & Convention Center, Maryland
Contact: 1-703-739-0800; http://www.abiworld.org/
June 9-12, 2011
AMERICAN BANKRUPTCY INSTITUTE
Central States Bankruptcy Workshop
Grand Traverse Resort and Spa
Traverse City, Michigan
Contact: http://www.abiworld.org/
October 25-27, 2011
TURNAROUND MANAGEMENT ASSOCIATION
Hilton San Diego Bayfront, San Diego, CA
Contact: http://www.turnaround.org/
Dec. 1-3, 2011
AMERICAN BANKRUPTCY INSTITUTE
23rd Annual Winter Leadership Conference
La Quinta Resort & Spa, La Quinta, California
Contact: 1-703-739-0800; http://www.abiworld.org/
The Meetings, Conferences and Seminars column appears in the
Troubled Company Reporter each Wednesday. Submissions via
e-mail to conferences@bankrupt.com are encouraged.
Last Updated: October 26, 2009
*********
Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par. Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable. Those sources may not,
however, be complete or accurate. The Monday Bond Pricing table
is compiled on the Friday prior to publication. Prices reported
are not intended to reflect actual trades. Prices for actual
trades are probably different. Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind. It is likely that some entity
affiliated with a TCR editor holds some position in the issuers'
public debt and equity securities about which we report.
Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
share in public markets. At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets. A company may establish reserves on its balance sheet for
liabilities that may never materialize. The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.
A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the TCR. Submissions about insolvency-
related conferences are encouraged. Send announcements to
conferences@bankrupt.com/
On Thursdays, the TCR delivers a list of recently filed
Chapter 11 cases involving less than $1,000,000 in assets and
liabilities delivered to nation's bankruptcy courts. The list
includes links to freely downloadable images of these small-dollar
petitions in Acrobat PDF format.
Each Friday's edition of the TCR includes a review about a book of
interest to troubled company professionals. All titles are
available at your local bookstore or through Amazon.com. Go to
http://www.bankrupt.com/books/to order any title today.
Monthly Operating Reports are summarized in every Saturday edition
of the TCR.
The Sunday TCR delivers securitization rating news from the week
then-ending.
For copies of court documents filed in the District of Delaware,
please contact Vito at Parcels, Inc., at 302-658-9911. For
bankruptcy documents filed in cases pending outside the District
of Delaware, contact Ken Troubh at Nationwide Research &
Consulting at 207/791-2852.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter is a daily newsletter co-published
by Bankruptcy Creditors' Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland,
USA. Howard C. Tolentino, Joseph Medel C. Martirez, Denise Marie
Varquez, Philline Reluya, Ronald C. Sy, Joel Anthony G. Lopez,
Cecil R. Villacampa, Sheryl Joy P. Olano, Carlo Fernandez,
Christopher G. Patalinghug, and Peter A. Chapman, Editors.
Copyright 2009. All rights reserved. ISSN: 1520-9474.
This material is copyrighted and any commercial use, resale or
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re-mailing and photocopying) is strictly prohibited without prior
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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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are $25 each. For subscription information, contact Christopher
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*** End of Transmission **