/raid1/www/Hosts/bankrupt/TCR_Public/091124.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Tuesday, November 24, 2009, Vol. 13, No. 325
Headlines
ABITIBIBOWATER INC: Incurs $511 Million Net Loss for 3rd Quarter
ABITIBIBOWATER INC: Canadian Court OKs C$615MM Sale to Alcoa
ABITIBIBOWATER INC: Canadian Court OKs C$230MM ULC DIP Loan
ACXIOM CORP: S&P Affirms Corporate Credit Rating at 'BB'
AIRTRAN HOLDINGS: PAR Investment No Longer Holds Equity Stake
ALASKA COMMUNICATIONS: Moody's Affirms 'B1' Corp. Family Rating
ALERIS INT'L: Begins Filing of Omnibus Claims Objection
ALERIS INT'L: Gets Nod to Settle Environmental Regulatory Action
ALERIS INT'L: Proposes to Reject ISDA Pacts With Koch Supply
AMERICAN INT'L GROUP: Turns in Profit for Third Quarter
AMERICAN INT'L GROUP: Treasury Seeks Possible Candidates to Board
AMR CORP: Delta CEO Says Star Alliance Willing to Invest More
AMR CORP: JAL Alliance Won't Affect S&P's 'B-' Rating
ANDERSEN 2000: Court Confirms Second Amended Plan
ARVINMERITOR INC: Eyes Up to $750 Million Securities Offering
ATHILON CAPITAL: S&P Downgrades Rating on Senior Notes to 'BB-'
BALLAMOR GOLF: Files for Bankruptcy to Restructure Debts
BANK OF AMERICA: To Sell Commercial Mortgage Debt
BEAR STEARNS: Study Says CEO Cayne Got $388MM Before Collapse
BERNARD MADOFF: Baker & Hostetler Seeks $21MM for May-Sept. Work
BI-LO LLC: $350MM Lone Star Cash Infusion Underpins Exit Plan
BLOCKBUSTER INC: Receives Non-Compliance Notice From NYSE
BLUEHIPPO FUNDING: Files for Bankruptcy After Bank Froze Funds
BON-TON STORES: Fitch Affirms Issuer Default Rating at 'B-'
BOSSIER AUTO: Now in Chapter 11 Due to Chrysler Dispute
BUILDING MATERIALS: Plan Exclusivity Extended to January 12
CAPITAL CORP: Federal Report Blames CEO Hawker for Collapse
CATHOLIC CHURCH: Continuation of Accused Priests' Benefits Sought
CHAMPION ENTERPRISES: DIP Facility Requires Asset Sale by March 5
CHAMPION ENTERPRISES: Sec. 341 Meeting Set for December 23
CHAMPION ENTERPRISES: Taps Pachulski Stang as Bankr. Counsel
CHAMPION ENTERPRISES: Will Not Lay Off York Plant Workers
CHEMTURA CORP: Gets Nod to Reject Fin'l Service Pacts
CHEMTURA CORP: Insists on Right to Modify OPEB Plans
CHEMTURA CORP: Ryan Wants to Compel Assumption of Services Pact
CHENIERE ENERGY: Posts $42.5 Million Net Loss for Q3 2009
CIENA CORP: Wins Auction for Nortel's Ethernet Business
CIRCUIT CITY: CC-Investors Sue for Payment of Proceeds
CIRCUIT CITY: National Union, Monarch Buy Claims
CIT GROUP: Carl Icahn Offers to Underwrite $6 Bil. Loan
CIT GROUP: Court Enters TRO on Actions vs. Non-Debtor Unit
CIT GROUP: Posts Securities Trading Agreement With Claimholders
CIT GROUP: Bondholder Objects to Confirmation of Plan
CIT GROUP: Proposes Evercore as Financial Advisors
CIT GROUP: Proposes Sullivan as Special Counsel
CITIGROUP INC: Registers 5 Securities with NYSE Arca
CITIZENS REPUBLIC: DBRS Confirms Issuer Rating at B (High)
CLOROX COMPANY: Board Adopts Amended and Restated Bylaws
COMMERCIAL VEHICLE: May Offer $200 Million in Securities
COMPUTER SYSTEMS: Court Extends Schedules Filing Until Dec. 30
COMPUTER SYSTEMS: Sec. 341 Meeting Set for December 11
COMPUTER SYSTEMS: Taps Taft Stettinius as Bankruptcy Counsel
COMSTOCK HOMEBUILDING: NASDAQ OKs Transfer to Capital Market
COMSTOCK HOMEBUILDING: Parker Chandler Unit Files for Chapter 7
COMSTOCK HOMEBUILDING: Posts $28.1MM Net Loss for 9 Mos. to Sept.
CONEXANT SYSTEMS: To Retire $61.4MM Sr. Secured Debt in December
COREL CORPORATION: To Comply with SEC Rules for Domestic Issuers
CRABTREE & EVELYN: Exit Plan Set for Jan. 14 Confirmation
CYTORI THERAPEUTICS: Posts $6.8 Million Net Loss in Q3 2009
DE LA COSTA: Investor Deminicki Wants to Recover $3 Million
DELPHI CORP: MDL Settlement Gets District Court's Final Nod
DELPHI CORP: Michigan Fund Wants to File Late Claim
DELPHI CORP: Retirees Also Sue Auto Task Force Over Pensions
DELTA AIR LINES: City Council OKs Atlanta Airport Lease Extension
DELTA AIR LINES: DP3 Gets Nod to Form VEBA for Retirees' Coverage
DELTA AIR LINES: Machinists Union Puts Off Representation Election
DELTA AIR LINES: CEO Says Star Alliance Willing to Invest More
DIAMONDHEAD CASINO: Posts $292,000 Net Loss in Q3 2009
DOLLAR THRIFTY: Moody's Upgrades Corporate Family Rating to 'B3'
DONALD KELLAND: Sec. 341 Meeting Set for December 17
DRYSHIPS INC: Increases Convertible Notes Offering to $400-Mil.
EASTON-BELL SPORTS: S&P Junks Ratings on Senior Secured Notes
ECO2 PLASTICS: Posts $9,960,000 Net Loss in Q3 2009
EMPIRE RESORTS: Posts $1.6 Million Net Loss in Q3 2009
ENRON CORP: Alfa, ING Keep Money in Enron Securities Dispute
ERICKSON RETIREMENT: Panel Proposes Protiviti as Fin'l Advisors
ERICKSON RETIREMENT: Web Site Is Misleading, Mass. Agency Says
EUROFRESH INC: Joint Plan of Reorganization Declared Effective
EXTENDED STAY: Can Use Cash Collateral to Pay Incentives
EXTENDED STAY: Has BoA Deal on Cash Generated by ESA Units
EXTENDED STAY: Proposes Insurance Deal With Zurich
FINANCIAL RESOURCES: Sent to Chapter 11 by NH Attorney General
FLYING J: To Sell Insurance Services Biz to Buckner Co.
FLYING J INC: Plan Exclusivity Extended to February 28
FLOWSERVE CORPORATION: Fitch Affirms 'BB+' Issuer Default Rating
FONTAINEBLEAU LV: Committee Deadline to Challenge Liens on Dec. 15
FONTAINEBLEAU LV: Proposes Cash Collateral Use Until November 27
FONTAINEBLEAU: Icahn Replaces Penn as Stalking Horse Bidder
FOOTHILLS TEXAS: To Present Plan for Confirmation on Dec. 28
FORD MOTOR CREDIT: Reports $427 Million Net Income in Q3 2009
FREEDOM COMMUNICATIONS: CEO, CFO Say Bankruptcy Plan "Is Fair"
FREEDOM COMMUNICATIONS: Receives Bid for East Valley Tribune
FREMONT GENERAL: Parties-in-Interest Wants Examiner Appointed
GENMAR HOLDINGS: Wins Nod to Sell Minnesota Marina for $3-Mil.
HALO TECHNOLOGY: U.S. Trustee Withdraws Motion to Convert Case
HANESBRANDS INC: Moody's Assigns 'Ba1' Rating on $400 Mil. Loan
HERBST GAMING: Bondholders Challenge Plan, Commence Lawsuit
HERTZ CORPORATION: DBRS Confirms Issuer Rating at 'BB'
HOME BUILDERS: Financial Woes Prompt Chapter 11 Filing
HORIZON FINANCIAL: Posts $35.1-Mil. Net Loss in September Quarter
HORIZON FINANCIAL: Steven Hoekstra Resigns as EVP of Horizon Bank
INDYMAC BANCORP: Chapter 7 Trustee Sues Board and CEO
INFOLOGIX INC: Completes Debt Restructuring with Sr. Lender
INTEGRA TELECOM: Moody's Upgrades Corporate Family Rating to 'B2'
J J DETWEILER: December 1 Sale Auction to Hit Road Block
JOHNSONDIVERSEY INC: Fitch Affirms Issuer Default Rating at 'B-'
JONES SODA: Posts $1.5 Million Net Loss in Q3 2009
JULES R SCHUBOT: Can Liquidate Assets and Close Remaining Stores
KINGSWAY LINKED: DBRS Cuts LROC Preferred Units Rating to 'B'
KINGSWAY FINANCIAL: DBRS Downgrades Senior Debt Rating to 'B'
LAMBERT PROPERTIES: Court OKs Schedules Filing Until December 4
LEHMAN BROTHERS: Assigned $173 Mil. Corp. Loans for October
LEHMAN BROTHERS: Fee Committee Proposes to Tap Browngreer
LEHMAN BROTHERS: LB Rose Proposes to Reject Hansen, et al., Pacts
LEHMAN BROTHERS: Study Says CEO Fuld Got $541MM Before Collapse
LEHMAN BROTHERS: Wants to Compel ZAO to Return Receipts
LIBERTY MEDIA: Moody's Downgrades Corporate Family Rating to 'B1'
LOUISIANA HOSPITAL: To Auction Hospital Facility on December 9
MAGNA ENTERTAINMENT: 2 Developers Eyeing Pimlico, Laurel, Bowie
MAGNA ENTERTAINMENT: $600,000 Executive Bonus Program Approved
MAJESTIC STAR: Files for Bankruptcy in Delaware
METROMEDIA INT'L: Plan Exclusivity Extended Until Feb. 16
METROMEDIA INT'L: Unsec. Creditors to Recover 70% Under Plan
MIRABILIS VENTURES: Court Confirms Joint Amended Liquidating Plan
MOONLIGHT BASIN: Files Chapter 11 to Halt Lehman Foreclosure
MPC CORPORATION: Files Liquidating Chapter 11 Plan
MVP HEALTH CARE, INC.: A.M. Best Downgrades FSR to 'B'
NEUROGEN CORP: Posts $1.9 Million Net Loss in Q3 2009
NOBLE INTERNATIONAL: Files Amended Plan of Liquidation and DS
NORTEL NETWORKS: Ciena Wins Auction for Ethernet Business
NTK HOLDINGS: Weil Gotshal, Other Pros Get OK in Nortek Ch. 11
ONE COMMUNICATIONS: Forbearance Deal Cues Moody's Rating Reviews
OPUS WEST: Franklin Skierski Bills $93,000 for Jul.-Sep. Work
OPUS WEST: Gets Nod to Release $54MM Lakepointe Property Lien
PACIFIC CAPITAL: DBRS Rates Issuer And Senior Debt Rating at 'B'
PATRICK INDUSTRIES: Board Approves 2009 Omnibus Incentive Plan
PATRICK INDUSTRIES: Narrows Net Loss to $622,000 at Sept. 27 Qtr
PENN TRAFFIC: To Shut Down Local Stores by February 2010
PETTERS CO: Interlachen Lost $60 Million in Fraud
PHILADELPHIA NEWSPAPERS: Has Plan Exclusivity Until Jan. 31
PINNACLE FOODS: S&P Puts 'B-' Rating on CreditWatch Positive
PONIARD PHARMACEUTICALS: Posts $9.9 Million Net Loss in Q3 2009
QUEST RESOURCE: Cherokee Loan Maturity Extended to Nov. 20
QUEST RESOURCE: Stephen Taylor Discloses 4.2% Equity Stake
RASER TECHNOLOGIES: Posts $3.5 Million Net Loss in Q3 2009
READER'S DIGEST: Moving Headquarters to Manhattan
READER'S DIGEST: Disclosure Hearing Continues Today
ROTHSTEIN ROSENFELDT: Investor Sues on Trust Theory
ROTHSTEIN ROSENFELDT: Faces Lawsuit for Fraud Lodged by Investors
ROTHSTEIN ROSENFELDT: To Pay Health Insurance and Small Payroll
SALLY BEAUTY: Says Fiscal 2009 Net Earnings Grew 19.2% to $95.9MM
SIMMONS BEDDING: Taps Weil Gotshal as Bankruptcy Counsel
SIMMONS BEDDING: Wants Richards Layton as Co-Counsel
SIMMONS BEDDING: Wants to Extend Schedules Filing Until Feb. 14
SMURFIT-STONE: Appoints Exner as SVP of Containerboard Mill
ST MARY'S HOSPITAL: Reaches Tentative Deal With Unionized Workers
STATION CASINOS: Has Interim Deal on Lease Dispute
SYNTHEMED INC: Posts $1,037,000 Net Loss in Q3 2009
TARRAGON CORP: Aims to Emerge From Bankruptcy in January
THERMOENERGY CORP: Completes 2nd Phase of Recapitalization Plan
TOYS "R" US: Property Subsidiary Completes Refinancing
TRONOX INC: Discloses Projected Balance Sheet at End of Year
TRUMP ENTERTAINMENT: Shareholders Raise Eye Brow on Trump's Deal
TVI CORPORATION: Signature Proposes to Auction All Assets Nov. 30
UNIVERSITY SHOPPES: Filed Chapter 11 to Halt Foreclosure
VALENCE TECHNOLOGY: Posts $6.2 Million Net Loss in FY2010 Q2
VERSACOLD INTERNATIONAL: S&P Affirms 'B' Corporate Credit Rating
VISTEON CORP: Looks to Donate Connersville Property to City
VITACLINA CORPORATION: Seeks Protection Under Chapter 11
VONAGE HOLDINGS: Chairman Citron Sells Portion of Stake
WALDEN RESERVE: Amended Plan of Liquidation Wins Court Approval
WHITNEY DESIGN INC: Case Summary & 20 Largest Unsecured Creditors
WILLIAM LANSDALE: Case Summary & 20 Largest Unsecured Creditors
WILLIAMS COAL: Royalty Income Drops to $77,700 in 3rd Quarter
X-RITE INC: One Equity Partners Discloses 40.44% Equity Stake
X-RITE INC: Reports $9 Million Net Loss for Oct. 3 Quarter
YTB INTERNATIONAL: Reports Net Income of $362,000 in Q3 2009
* Wells Fargo Shut Out Of Visa, MasterCard Antitrust Deal
* Large Companies With Insolvent Balance Sheets
*********
ABITIBIBOWATER INC: Incurs $511 Million Net Loss for 3rd Quarter
----------------------------------------------------------------
AbitibiBowater Inc., filed with the U.S. Securities and Exchange
Commission on November 13, 2009, its financial results for the
third quarter ending September 30, 2009.
AbitibiBowater reported decreased sales of $639 million or 36.9%,
from $1.73 billion in the third quarter of 2008 to $1.09 billion
in the third quarter of 2009.
The Company reported decreased operating loss totaling
$126 million from $159 million in the third quarter of 2008 to
$33 million in the third quarter of 2009.
Manufacturing costs for the Company decreased $446 million in the
third quarter of 2009 as compared to the third quarter of 2008,
primarily due to lower volumes, favorable currency exchange,
alternative fuel mixture tax credits and lower costs for labor
and benefits, depreciation, wood and fiber, maintenance and other
favorable costs.
Distribution costs for the Company also decreased in the third
quarter of 2009 as compared to the third quarter of 2008, due to
significantly lower shipment volumes and lower distribution costs
per ton.
Moreover, selling and administrative costs decreased in the third
quarter of 2009 as compared to the third quarter of 2008 by
$29 million, primarily due to our cost reduction initiatives.
Also in the third quarter of 2009 and 2008, AbitibiBowater
recorded a net credit of $44 million and expenses of $138 million
respectively in closure costs, impairment and other related
charges, which are not associated with our work towards a
comprehensive restructuring plan. The Company also realized
$38 million in net gains on disposition of timberlands and other
assets in the third quarter of 2009, compared to net gains of
$5 million in the same period of 2008.
Net loss attributable to AbitibiBowater Inc. in the third quarter
of 2009 was $511 million, or $8.85 per common share, an increase
in net loss of $209 million, or $3.62 per common share, compared
to the third quarter of 2008. The increase in net loss
attributable to AbitibiBowater Inc. was a result of the increase
in reorganization items, net, other (expense) income, net and
income taxes, partially offset by the decrease in operating loss
and a significant decrease in interest expense resulting from the
Creditor Protection Proceedings.
AbitibiBowater previously informed the SEC that it would be
unable to file its Quarterly Report by the prescribed filing
deadline of November 9, 2009. According to Jacques P. Vachon,
senior vice president for Corporate Affairs and chief legal
officer at AbitibiBowater, the Company has committed a
substantial amount of its available resources to developing a
comprehensive restructuring plan in connection with Company's
creditor protection proceedings -- which has affected the timely
completion and filing of its Form 10-Q for
the three months ended September 30, 2009.
In the Company's Form 10-Q, William G. Harvey, executive vice
president and chief financial officer at AbitibiBowater, related
that in the third quarter of 2009, all of the Company's paper
product lines "experienced significant demand declines due to
trends in the newsprint industry and global economic conditions."
Mr. Harvey cited North American newsprint consumption that has
continued to decline due to a significant decline in circulation
and advertising. Similarly, demand for coated mechanical papers
continued to decline in the third quarter of 2009 primarily due
to sharp declines in advertising, he added.
Mr. Harvey also said that during the Reporting Period, the
specialty papers' industry experienced declines in North American
demand for standard uncoated mechanical papers, lightweight or
directory grades and super-calendered high gloss papers.
Meanwhile, he noted, global demand for market pulp increased
slightly during the third quarter of 2009, primarily due to
increased demand from China and Latin America.
AbitibiBowater's wood products segment continues to be negatively
impacted by lower demand due to a weak U.S. housing market, Mr.
Harvey added.
Employee-Related Disclosures
As of September 30, 2009, the Company employed approximately
13,000 people, of whom approximately 9,200 were represented by
bargaining units. The unionized employees are represented
predominantly by the Communications, Energy and Paperworkers
Union in Canada and predominantly by the United Steelworkers
Union in the U.S.
A significant number of the Company's collective bargaining
agreements with respect to its paper operations in Eastern Canada
expired at the end of April 2009, as have those for the Calhoun,
Tennessee facility and the Catawba, South Carolina facility. The
Communications, Energy and Paperworkers Union of Canada has
selected contract talks with AbitibiBowater to set the industry-
wide pattern for contracts that will replace current expired
agreements.
"The employees at the facility in Mokpo, South Korea have
complied with all conditions necessary to strike, but the
possibility of a strike or lockout of those employees is not
clear; we served the six-month notice necessary to terminate the
collective bargaining agreement related to the Mokpo facility on
June 19, 2009," according to Mr. Harvey.
The Company also announced in the third quarter of 2009 an
ongoing initiative to reduce its selling, general and
administrative costs by $100 million on an annualized basis, as
compared to 2008, through additional austerity measures,
including a corporate headcount reduction of approximately 25%,
Mr. Harvey disclosed.
In this regard, Mr. Harvey noted, AbitibiBowater expects to have
some further decline in employment as it develops and implements
its reorganization plan and respond to the need to further reduce
capacity in some product lines.
Legal Proceedings
The Company is involved in various legal proceedings relating to
contracts, commercial disputes, taxes, environmental issues,
employment and workers' compensation claims and other matters --
which status are periodically reviewed.
Mr. Harvey recalled that the Debtors sought the Bankruptcy
Court's permission to reject an amended and restated call
agreement with Augusta Newsprint Inc., an indirect subsidiary of
The Woodbridge Company Limited and AbitibiBowater's partner in
Augusta Newsprint Company. The Agreement granted Abitibi
Consolidated Sales Corporation, an indirect, wholly owned
subsidiary of AbitibiBowater Inc., the right to buy out Augusta
Newsprint Inc. at a pre-determined price before the end of the
current fiscal year.
"The Company's partner's parents could force the sale of Augusta
Newsprint and retain a pre-established amount of the proceeds,
which would have significantly exceeded the value of the
partner's interest in the partnership," Mr. Harvey averred.
Accordingly, the Bankruptcy Court heeded the Debtors' request in
October 2009 and counterparties to the Amended and Restated Call
agreement filed a Notice of Appeal with the U.S. Court on
November 3, 2009.
Separately, on April 26, 2006, AbitibiBowater received a notice
of violation from the U.S. Environmental Protection Agency
alleging four violations of the Clean Air Act at the Company's
Calhoun, Tennessee newsprint mill for which penalties in excess
of $100,000 could have been imposed. The Company entered into a
settlement with the U.S. Environmental Protection Agency and the
Department of Justice in the third quarter of 2009, for a civil
penalty of $30,000 and mutually agreeable permit limits, pending
approval of the Bankruptcy Court.
"We believe that these matters will not have a material adverse
effect on our results of operations during the Creditor
Protection Proceedings. The ultimate disposition of these
matters will not have a material adverse effect on our financial
condition, but it could have a material adverse effect on our
results of operations in any given quarter or year," Mr. Harvey
stated.
As of October 30, 2009, about 54,701,517 shares of AbitibiBowater
Inc. common stock are outstanding.
A full-text copy of AbitibiBowater's 2009 Third Quarter Results
on Form 10-Q is available for free with the SEC at:
http://ResearchArchives.com/t/s?49be
ABITIBIBOWATER, INC.
Unaudited Consolidated Balance Sheets
As of September 30, 2009
ASSETS
Current Assets:
Cash and cash equivalents $569,000,000
Accounts receivable, net 715,000,000
Inventories, net 598,000,000
Assets held for sale 526,000,000
Other current assets 117,000,000
----------------
Total Current Assets 2,525,000,000
Fixed assets, net 4,101,000,000
Goodwill 53,000,000
Amortization intangible assets, net 475,000,000
Other assets 449,000,000
----------------
Total Assets $7,603,000,000
================
LIABILITIES AND DEFICIT
Liabilities not subject to compromise:
Current Liabilities:
Accounts payable and accrued liabilities $460,000,000
Debtor-in-possession financing 261,000,000
Short-term bank debt 679,000,000
Current portion of long-term debt 651,000,000
Liabilities associated with assets
held for sale 66,000,000
----------------
Total Current Liabilities 2,117,000,000
Long-term debt, net of current portion 35,000,000
Pension & other postretirement projected
benefit obligations 73,000,000
Other long-term benefits 145,000,000
Deferred income taxes 219,000,000
----------------
Total Liabilities Not Subject to Compromise 2,589,000,000
Liabilities Subject to Compromise 6,550,000,000
----------------
Total Liabilities 9,139,000,000
Commitments and Contingencies
Deficit:
AbitibiBowater, Inc. shareholders' deficit:
Common stock, $1 par value, 54.7 shares
outstanding as of September 30, 2009 55,000,000
Exchangeable shares at no par value, 3.0 shares
outstanding as of September 30, 2009 173,000,000
Additional paid-in capital 2,522,000,000
Deficit (4,077,000,000)
Accumulated other comprehensive loss (348,000,000)
----------------
Total AbitibiBowater Inc.
shareholders' deficit (1,675,000,000)
Non-controlling interests 139,000,000
----------------
Total Deficit (1,536,000,000)
----------------
Total Liabilities and Deficit $7,603,000,000
================
ABITIBIBOWATER, INC.
Unaudited Consolidated Statements of Operations
Three Months Ended September 30, 2009
Sales $1,091,000,000
Cost and expenses:
Cost of sales 885,000,000
Depreciation, amortization and cost of timber 147,000,000
Distribution costs 120,000,000
Selling and admin. expenses 54,000,000
Closure costs, impairment & other charges (44,000,000)
Net gain on disposition of assets (38,000,000)
----------------
Operating loss (33,000,000)
Interest expense (126,000,000)
Other (expense) income, net (25,000,000)
-----------------
Loss before reorganization items
& income taxes (184,000,000)
Reorganization items, net (301,000,000)
----------------
Loss before income taxes (485,000,000)
Income tax benefit (provision) (34,000,000)
-----------------
Net loss including non-controlling interests (519,000,000)
Net loss (income) attributable
to non-controlling interests 8,000,000
-----------------
Net loss attributable to AbitibiBowater Inc. ($511,000,000)
================
ABITIBIBOWATER, INC.
Unaudited Consolidated Statements of Cash Flow
Nine Months Ended September 30, 2009
Cash Flows from Operating Activities:
Net loss including non-controlling interests ($1,242,000,000)
Adjustments to reconcile net (loss) to net cash
(used in) provided by operating activities:
Share-based compensation 4,000,000
Depreciation, amortization and cost of timber 461,000,000
Closure costs, impairment and other charges 226,000,000
Write-downs of mill stores inventory 17,000,000
Deferred income taxes 64,000,000
Net pension contributions (155,000,000)
Net gain on disposition of assets (91,000,000)
Gain on extinguishment of debt -
Amortization of debt discount (premium), net 51,000,000
Loss (gain) on translation of
foreign currency debt 45,000,000
Non-cash reorganization items, net 321,000,000
DIP financing costs 29,000,000
Changes in working capital:
Accounts receivable 102,000,000
Inventories 100,000,000
Other current assets (30,000,000)
Accounts payable & accrued liabilities 232,000,000
Other, net (63,000,000)
----------------
Net cash (used in) provided by
operating activities 71,000,000
Cash Flows from Investing Activities:
Cash invested in fixed assets (80,000,000)
Dispositions of assets 119,000,000
Decrease (Inc.) in L/C deposit requirements, net 75,000,000
Cash received in monetization of
derivative financial instruments 5,000,000
----------------
Net cash provided by (used in)
investing activities 119,000,000
Cash Flows from Financing Activities:
Cash dividends to non-controlling interests (7,000,000)
DIP financing 261,000,000
DIP financing costs (29,000,000)
Term loan financing -
Term loan repayments -
Short-term financing, net (24,000,000)
Issuance of long-term debt -
Payments of long-term debt (5,000,000)
Payments of financing & bank credit facility fees (9,000,000)
Payment of equity issuance fees
on Convertible Notes -
----------------
Net cash provided by (used in)
financing activities 187,000,000
----------------
Net decrease in cash & cash equivalents 377,000,000
----------------
Cash & cash equivalents:
Beginning of period 192,000,000
----------------
End of period $569,000,000
================
About AbitibiBowater Inc.
Headquartered in Montreal, Canada, AbitibiBowater Inc. --
http://www.abitibibowater.com/-- produces a wide range of
newsprint, commercial printing papers, market pulp and wood
products. It is the eighth largest publicly traded pulp and paper
manufacturer in the world. AbitibiBowater owns or operates 23
pulp and paper facilities and 29 wood products facilities located
in the United States, Canada, the United Kingdom and South Korea.
Marketing its products in more than 90 countries, the Company is
also among the world's largest recyclers of old newspapers and
magazines, and has third-party certified 100% of its managed
woodlands to sustainable forest management standards.
AbitibiBowater's shares trade over-the-counter on the Pink Sheets
and on the OTC Bulletin Board under the stock symbol ABWTQ.
The Company and several of its affiliates filed for protection
under Chapter 11 of the U.S. Bankruptcy Code on April 16, 2009
(Bankr. D. Del. Lead Case No. 09-11296). Judge Kevin J. Carey
presides over the case. The Company and its Canadian affiliates
commenced parallel restructuring proceedings under the Companies'
Creditors Arrangement Act before the Quebec Superior Court
Commercial Division the next day. Alex F. Morrison at Ernst &
Young, Inc., was appointed CCAA monitor.
Paul, Weiss, Rifkind, Wharton & Garrison LLP, serves as the
Debtors' U.S. bankruptcy counsel. Stikeman Elliot LLP, acts as
the Debtors' CCAA counsel. Young, Conaway, Stargatt & Taylor, in
Wilmington, Delaware, serves as the Debtors' co-counsel, while
Troutman Sanders LLP in New York, serves as the Debtors' conflicts
counsel in the Chapter 11 proceedings. The Debtors' financial
advisors are Advisory Services LP, and their noticing and claims
agent is Epiq Bankruptcy Solutions LLC. The CCAA Monitor's
counsel is Thornton, Grout & Finnigan LLP, in Toronto, Ontario.
Abitibi-Consolidated Inc. and various Canadian subsidiaries filed
for protection under Chapter 15 of the U.S. Bankruptcy Code on
April 17, 2009 (Bankr. D. Del. 09-11348). Judge Carey also
handles the Chapter 15 case. Pauline K. Morgan, Esq., and Sean T.
Greecher, Esq., at Young, Conaway, Stargatt & Taylor, in
Wilmington, represent the Chapter 15 Debtors.
As of Sept. 30, 2008, the Company had $9,937,000,000 in total
assets and $8,783,000,000 in total debts.
Bankruptcy Creditors' Service, Inc., publishes AbitibiBowater
Bankruptcy News. The newsletter provides gavel-to-gavel coverage
of the Chapter 11 proceedings and parallel proceedings under the
Companies' Creditors Arrangement Act in Canada undertaken by
Abitibibowater Inc. and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000).
ABITIBIBOWATER INC: Canadian Court OKs C$615MM Sale to Alcoa
------------------------------------------------------------
To recall, AbitibiBowater has struck a deal for the sale of its
335-megawatt Manicouagan power plant in Quebec to a joint venture
formed by Hydro-Quebec and Alcoa Inc. for C$615 million.
In a vesting order dated November 17, 2009, the Honorable Mr.
Justice Clement Gascon, J.S.C., of the Superior Court Commercial
Division for the District of Montreal in Quebec, Montreal,
Canada, authorized:
(a) Abitibi-Consolidated Company of Canada, as acquiree, and
Manicouagan Power Limited Partnership, as acquirer, to
enter into the Asset Transfer Agreement, with the consent
of Hydro-Quebec, Alcoa Canada Energy Company and the
Court-appointed monitor in the Companies' Creditors
Arrangement Act proceeding;
(b) ACCC and Abitibi-Consolidated Inc., as selling parties and
HQ Energie Inc., as purchaser, to enter into the
Acquisition Agreement; and
(c) ACCC, as transferor, and Alcoa as transferee, to enter
into the Share Purchase Agreement and the Unit Transfer
Agreement.
The Transaction Documents are hinged on the MPCo Transaction and
form part of the Implementation Agreement dated September 3,
2009, among ACI, ACCC, MPCo, Alcoa Canada and Alcoa Ltd.
ACCC holds 60% indirect interest in the 335-megawatt McCormick
Hydroelectric facility, which is owned and operated by
Manicouagan Power Company in Quebec, pursuant to a joint venture
formed by Hydro-Quebec and Alcoa Inc. A letter of intent was
executed with Hydro-Quebec on February 19, 2009, which provides
for the sale of the ACCC MPCo Interest for gross proceeds of
C$615 million.
Assessing the reasonableness of the Transaction Documents, Ernst
& Young, Inc., the Court-appointed monitor in the Canadian
proceedings of the CCAA Applicants, outlined the specific terms
of the Documents in its 21st Monitor's Report, a full-text copy
of which is available at no charge at:
http://bankrupt.com/misc/21stMonitorReport.pdf
E&Y Vice President Alex Morrison affirmed that the Transaction
Documents were negotiated in good faith and in accordance with
the expectations of the Document Parties.
Debtors Acknowledge Canadian Court Ruling
In a Form 8-K filing with the U.S. Securities and Exchange
Commission dated November 18, 2009, AbitibiBowater Inc.
acknowledged the Canadian Court's ruling. AbitibiBowater Senior
Vice President for Corporate Affairs and Chief Legal Officer
Jacques P. Vachon related that the Implementation Agreement
contemplates that (i) ACCC will acquire Alcoa's 40% interest in
MPCo, (ii) MPCo will be wound up into ACCC, and (iii) ACCC will
in turn transfer all the assets and liabilities of MPCo's
business to a newly formed limited partnership to be held by
Alcoa and HQ Energie Inc.
The Acquisition Agreement sets forth HQ Energie's obligation to
purchase a 59.9994% interest in the newly formed limited
partnership and a 60% interest in the general partner of that
limited partnership, which itself will hold a 0.001% interest in
the limited partnership. It also provides for the assignment of
certain ACCC power purchase contracts to HQ Energie for total
gross proceeds of C$615 million.
The Implementation Agreement provides that Alcoa Canada Ltd. will
become the holder of the remaining 39.9996% interest in the
partnership and a 40% interest in ULC as the general partner.
AbitibiBowater expects to set temporarily aside C$282 million or
US$254 million in the ULC subsidiary to secure certain
indemnities and undertakings provided to Alcoa in connection with
the transactions contemplated by the Implementation Agreement.
Upon the execution and delivery of the Asset Transfer Agreement
and upon all conditions to closing having been satisfied or
waived, all right, title and interest in and to the assets
described in the Asset Transfer Agreement will vest absolutely
and exclusively in and with Manicouagan Partnership, free and
clear of and from any and all claims and liabilities which
materially interfere with the operation, value or use of the
Transferred Assets, the Canadian Court ruled.
In compliance with pension legislation requirements in connection
with the transfer of assets and liabilities to a successor
pension plan with respect to employees and former employees of
MPCo, Mr. Justice Gascon also authorized ACCC to make, or arrange
to be made, a contribution to either or both of (i) the Regime de
retraite a prestations determinees des employes non syndiques
d'Abitibi-Consolidated Inc., and (ii) the Regime complementaire
de retraite des employes syndiques de la Compagnie Abitibi-
Consolidated du Canada -- Division Pates et Papier -- Secteur
Baie-Comeau.
A full-text copy of Mr. Justice Gascon's Vesting Order is
available at no charge at:
http://bankrupt.com/misc/CCAA_VestingORDMPCoSale.pdf
About AbitibiBowater Inc.
Headquartered in Montreal, Canada, AbitibiBowater Inc. --
http://www.abitibibowater.com/-- produces a wide range of
newsprint, commercial printing papers, market pulp and wood
products. It is the eighth largest publicly traded pulp and paper
manufacturer in the world. AbitibiBowater owns or operates 23
pulp and paper facilities and 29 wood products facilities located
in the United States, Canada, the United Kingdom and South Korea.
Marketing its products in more than 90 countries, the Company is
also among the world's largest recyclers of old newspapers and
magazines, and has third-party certified 100% of its managed
woodlands to sustainable forest management standards.
AbitibiBowater's shares trade over-the-counter on the Pink Sheets
and on the OTC Bulletin Board under the stock symbol ABWTQ.
The Company and several of its affiliates filed for protection
under Chapter 11 of the U.S. Bankruptcy Code on April 16, 2009
(Bankr. D. Del. Lead Case No. 09-11296). Judge Kevin J. Carey
presides over the case. The Company and its Canadian affiliates
commenced parallel restructuring proceedings under the Companies'
Creditors Arrangement Act before the Quebec Superior Court
Commercial Division the next day. Alex F. Morrison at Ernst &
Young, Inc., was appointed CCAA monitor.
Paul, Weiss, Rifkind, Wharton & Garrison LLP, serves as the
Debtors' U.S. bankruptcy counsel. Stikeman Elliot LLP, acts as
the Debtors' CCAA counsel. Young, Conaway, Stargatt & Taylor, in
Wilmington, Delaware, serves as the Debtors' co-counsel, while
Troutman Sanders LLP in New York, serves as the Debtors' conflicts
counsel in the Chapter 11 proceedings. The Debtors' financial
advisors are Advisory Services LP, and their noticing and claims
agent is Epiq Bankruptcy Solutions LLC. The CCAA Monitor's
counsel is Thornton, Grout & Finnigan LLP, in Toronto, Ontario.
Abitibi-Consolidated Inc. and various Canadian subsidiaries filed
for protection under Chapter 15 of the U.S. Bankruptcy Code on
April 17, 2009 (Bankr. D. Del. 09-11348). Judge Carey also
handles the Chapter 15 case. Pauline K. Morgan, Esq., and Sean T.
Greecher, Esq., at Young, Conaway, Stargatt & Taylor, in
Wilmington, represent the Chapter 15 Debtors.
As of Sept. 30, 2008, the Company had $9,937,000,000 in total
assets and $8,783,000,000 in total debts.
Bankruptcy Creditors' Service, Inc., publishes AbitibiBowater
Bankruptcy News. The newsletter provides gavel-to-gavel coverage
of the Chapter 11 proceedings and parallel proceedings under the
Companies' Creditors Arrangement Act in Canada undertaken by
Abitibibowater Inc. and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000).
ABITIBIBOWATER INC: Canadian Court OKs C$230MM ULC DIP Loan
-----------------------------------------------------------
Abitibi-Consolidated Inc. and certain of its Canadian-based
affiliates under their proceedings under Canada's Companies'
Creditors Arrangement Act obtained Mr. Justice Gascon's
permission on November 16, 2009, to borrow up to C$230 million
from 3239432 Nova Scotia Company, an unlimited liability company
or ULC, under a superpriority secured debtor-in-possession credit
facility.
Mr. Justice Gascon held that the CCAA Applicants "have presented
substantial reasons to support their need for liquidity" by way
of the ULC DIP Loan. "In requesting the approval of the ULC DIP
Facility, management is doing so with a broad measure of support
and the confidence of its major creditor constituencies," the
Canadian Court opined.
The ULC DIP Loan will be extended by ULC to ACI or Abitibi-
Consolidated Company of Canada using a portion of the proceeds of
the sale of Abitibi-Consolidated Corporation's 30% indirect
interest in a 335-megawatt McCormick Hydroelectric facility owned
and operated by Manicouagan Power Company in Quebec or the MPCo
Transaction. With the Canadian Court's consent, ACCC's interest
in the Power Plant will be sold to a joint venture formed by
Hydro-Quebec and Alcoa Inc.
The Credit Facility provided pursuant to the ULC DIP Agreement
will be subject to these draw conditions:
(1) A first draw of C$130 million will be advanced at closing,
(2) Subsequent draws for a maximum total amount of C$50
million in increments of up to C$25 million upon
a five-day advance notice; and
(3) The balance of C$50 million will be available upon further
order of the Canadian Court.
The CCAA Applicants may use proceeds of the ULC DIP Facility
substantially in compliance with their 13-week cash flow forecast
provided to the financial advisors.
In light of the approval of the DIP Facility, Mr. Justice Gascon
also allowed the CCAA Applicants to provide parties-in-interest
with (i) a Business Plan on November 27, 2009, and (ii) a
Restructuring and Recapitalization Term Sheet on December 15,
2009.
Acknowledging the Canadian Court's decision, AbitibiBowater
Senior Vice President for Corporate Affairs and Chief Legal
Officer Jacques P. Vachon noted in a regulatory filing with the
U.S. Securities and Exchange Commission dated November 18, 2009,
that the balance of the expected gross proceeds distributed under
the MPCo sale transaction,, which is at C$615 million or
US$553 million, would be allocated as:
(1) approximately C$61 million or US$55 million --
C$26 million or US$23.4 million of which would come from
proceeds of the ULC DIP Facility -- will be used to repay
all amounts outstanding under the Abitibi DIP Facility;
(2) C$200 million or US$180 million will be used as partial
repayment of ACCC's 13.75% Senior Secured Notes due 2011;
(3) approximately C$67 million or US$60 million will be used
to pay taxes incurred by Alcoa and its affiliates as a
result of the transaction, ACCC's estimated transaction
costs, pre-filing amounts owed to the distribution
division of Hydro-Quebec by ACCC and its affiliates,
including amounts owed by Bowater Canadian Forest Products
Inc., as well as pre-filing amounts owed to MPCo and Alcoa
for electricity purchased by ACCC from MPCo; and
(4) approximately C$31 million or US$28 million will be
subject to a two-year holdback by HQ Purchaser.
Distribution to Senior Secured Noteholders
In light of the approval of the ULC DIP Facility, the Canadian
Court authorized the distribution of C$200 million to the Secured
Noteholders and U.S. Bank, N.A., as Indenture Trustee for the
Senior Secured Notes. The Distribution is hinged on the
completion of the MPCo Transaction after certain holdbacks,
reserves and deductions from the C$615 million gross proceeds.
A full-text copy of Mr. Justice Gascon's ULC DIP Order is
available for free at http://bankrupt.com/misc/CCAA_ORDULCDIP.pdf
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).
ACXIOM CORP: S&P Affirms Corporate Credit Rating at 'BB'
--------------------------------------------------------
On Nov. 20, 2009, Standard & Poor's Ratings Services affirmed its
'BB' corporate credit rating on Little Rock, Arkansas-based Acxiom
Corp.
Acxiom executed an amendment to split its existing $200 million
revolving credit facility into an $80 million non-extended Tranche
1 that matures in 2011 and a $120 million Tranche 2 that will
mature in 2014. In addition, the company extended approximately
$372 million of its original $600 million term loan to mature in
2015. The remaining approximately $78 million Tranche 1 term loan
matures on the original term loan maturity date of Sept. 15, 2012.
S&P revised its recovery rating on Acxiom's $80 million Tranche 1
senior secured revolving credit facility and $78 million Tranche 1
to '1', indicating its expectation for very high (90% to 100%)
recovery for lenders in the event of a payment default, from '2'.
S&P also raised its issue-level rating on this debt to 'BBB-' (two
notches higher than the 'BB' corporate credit rating on the
company) from 'BB+', in accordance with S&P's notching criteria
for a '1' recovery rating. The recovery rating revision reflects
S&P's expectation that Acxiom will have less debt outstanding in
its projected year of default, which improves the recovery
prospects of the remaining debt.
In addition, S&P assigned its 'BBB-' issue-level rating and '1'
recovery rating to the company's $120 million Tranche 2 senior
secured revolving credit facility and $373 million senior secured
Tranche 2 term loan.
"The 'BB' rating reflects Acxiom's recent revenue weakness and
relatively narrow business profile," said Standard & Poor's credit
analyst Molly Toll-Reed. "The company's good niche market
position, adequate cash flow, and moderate leverage profile
partially offset these factors."
Acxiom's expertise in managing its comprehensive consumer
databases tempers the company's business risk. More than half of
its direct-marketing assignments are performed for long-term
clients, and outsourcing contracts generally cover multiple years,
offsetting a concentrated customer base and providing some revenue
predictability. However, the company is still a relatively small
participant in a fragmented and competitive industry. Standard &
Poor's believes channel partnerships and moderate acquisitions
could continue, primarily to expand the company's participation in
selected vertical markets, enhance its distribution capability,
and provide additional operational diversity.
Acxiom generates consistent annual free operating cash flow,
reflecting moderate working capital and capital expenditure
funding requirements. Over the past 18 months, the company has
used free cash flow generation to reduce debt and maintain a
leverage profile that is good for the rating level. Total debt to
adjusted EBITDA was about 2.2x in the September 2009 quarter.
However, the current rating reflects revenue weakness, declines in
EBITDA (on an absolute basis), and a historically aggressive
financial policy.
AIRTRAN HOLDINGS: PAR Investment No Longer Holds Equity Stake
-------------------------------------------------------------
PAR Investment Partners, L.P., PAR Group, L.P. and PAR Capital
Management, Inc., report that they no longer hold shares of
AirTran Holdings, Inc., common stock.
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.
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/--.
ALASKA COMMUNICATIONS: Moody's Affirms 'B1' Corp. Family Rating
---------------------------------------------------------------
Moody's Investors Service affirmed Alaska Communications Systems
Holdings, Inc.'s B1 corporate family rating, B1 probability of
default rating, and the Ba3 rating applicable to the company's
bank credit facility. Concurrently, Moody's also affirmed the
prevailing SGL-3 speculative grade liquidity rating (indicating
adequate liquidity). The rating outlook remains stable.
Upgrades:
Issuer: Alaska Communications Systems Holdings, Inc.
-- Senior Secured Bank Credit Facility, Upgraded to LGD3, 38%
from LGD3, 40%
ACSH's B1 corporate family rating reflects Moody's expectation
that heightened competitive challenges in the wireless segment and
a slow ramp-up in the enterprise segment, due in part to economic
weakness, will result in muted growth that will not be adequate to
offset secular pressures in the company's incumbent wireline
operations. This, coupled with continued allocation of operating
cash flow to shareholder returns via a significant dividend, is
expected to result in modestly negative to breakeven free cash
flow generation which will limit debt repayment capacity. As a
consequence, ACSH's significant absolute debt level and
accompanying leverage metrics are likely to remain largely
unchanged. The rating derives some support, however, from ACSH's
position as a significant communications provider with a "triple-
play" bundled product offering including voice, data and wireless
in the Alaskan market.
With cash on hand of $7 million as of 30 September 2009, full
access to an un-drawn $45 million committed revolving credit
facility maturing in 2011 and breakeven free cash flow generation,
and with no meaningful near term debt maturities (other than
minimal scheduled debt amortization), liquidity arrangements over
the rolling four-quarter speculative grade liquidity rating
horizon to December 31, 2010, are deemed to be adequate,
consistent with Moody's affirmation of the company's SGL-3 rating.
Moody's most recent rating action was taken on 10 November 2008,
at which time Moody's affirmed ACSH's B1 CFR and PDR along with
the stable outlook and SGL-3 liquidity rating (indicating adequate
liquidity).
ACSH is a leading integrated communications provider based in
Anchorage, Alaska. ACSH is the state's incumbent wireline
operator, owns an extensive IP backbone serving the enterprise
segment and also operates an extensive 3G wireless network in the
state of Alaska.
ALERIS INT'L: Begins Filing of Omnibus Claims Objection
-------------------------------------------------------
Aleris International Inc. and its units have begun filing their
omnibus claims objection.
In their first omnibus claims objection, the Debtors ask the Court
to expunge 85 duplicate proofs of claim, totaling $13,466,194,
filed against them. The Debtors tell the Court that the Duplicate
Claims were incorrectly filed against the same Debtor more than
once. The Debtors aver that they should not be required to pay
twice on the same obligation. A list of the Duplicate Claims is
available for free at:
http://bankrupt.com/misc/Aleris_1stOmnibusObj.pdf
In their second omnibus claims objection, the Debtors ask the
Court to expunge 95 claims that have been subsequently been
amended and therefore superseded by a subsequent proof of claim.
The Amended Claims identified by the Debtors assert $18,938,220 in
the aggregate. A list of Amended Claims is available for free at:
http://bankrupt.com/misc/Aleris_2ndOmnibusObj.pdf
In their third omnibus claims objection, the Debtors ask the Court
to expunge 100 duplicative claims, totaling $31,192,774. The
Debtors assert that they should not be required to pay twice on
the same obligation. A list of the Duplicative Claims is
available for free at:
http://bankrupt.com/misc/Aleris_3rdOmnibus.pdf
In their fourth omnibus claims objection, the Debtors ask the
Court to expunge 52 duplicative proofs of claims, totaling
$23,307,911. A list of the Duplicative Claims is available for
free at http://bankrupt.com/misc/Aleris_4thOmnibus.pdf
In their fifth omnibus claims objection, the Debtors ask the Court
to reclassify 100 claims that have been filed against the wrong
debtor entity. The Debtors object to the allowance of the
Misidentified Claims and seek that each of the claims be
categorized as a Claim against the correct Debtor. A list of the
Misidentified Claims is available for free at:
http://bankrupt.com/misc/Aleris_5thOmnibus.pdf
Aleris Bankruptcy News provides definitive coverage of all omnibus
claims objection, responses, and orders to those objections.
About Aleris International
Aleris International, Inc., produces and sells aluminum rolled and
extruded products. Aleris operates primarily through two
reportable business segments: (i) global rolled and extruded
products and (ii) global recycling. Headquartered in Beachwood,
Ohio, a suburb of Cleveland, the Company operates over 40
production facilities in North America, Europe, South America and
Asia, and employs approximately 8,400 employees. Aleris operates
27 production facilities in the United States with eight
production facilities that provided rolled and extruded aluminum
products and 19 recycling production plants.
Aleris International, Inc., aka IMCO Recycling Inc., and various
affiliates filed for bankruptcy on February 12, 2009 (Bankr. D.
Del. Case No. 09-10478). The Hon. Brendan Linehan Shannon
presides over the cases. Stephen Karotkin, Esq., and Debra A.
Dandeneau, Esq., at Weil, Gotshal & Manges LLP in New York, serve
as lead counsel for the Debtors. L. Katherine Good, Esq., and
Paul Noble Heath, Esq., at Richards, Layton & Finger, P.A. In
Wilmington, Delaware, serves as local counsel. Moelis & Company
LLC, acts as financial advisors; Alvarez & Marsal LLC as
restructuring advisors, and Kurtzman Carson Consultants LLC as
claims and noticing agent for the Debtors. As of December 31,
2008, the Debtors had total assets of $4,168,700,000; and total
debts of $3,978,699,000.
Bankruptcy Creditors' Service, Inc., publishes Aleris
International Bankruptcy News. The newsletter tracks the chapter
11 proceeding undertaken by Aleris International, Inc. and its
various affiliates. (http://bankrupt.com/newsstand/or 215/945-
7000)
ALERIS INT'L: Gets Nod to Settle Environmental Regulatory Action
----------------------------------------------------------------
Pursuant to Rule 9019 of the Federal Rules of Bankruptcy
Procedure, Debtor Defendants Aleris, Inc., IMCO Recycling of
Illinois, Inc., IMCO Recycling of Michigan LLC, Alumitech of West
Virginia, Inc., Rock Creek Aluminum, Commonwealth Aluminum of
Lewisport, LLC, IMOC Recycling of Idaho Inc., Alsco Metals
Corporation, Alchem Aluminum Inc., Alchem Shelbyville, Inc.,
Commonwealth Aluminum Concast, Inc., IMOC Recycling of Ohio, Inc.,
and Alumitech of Wabash, Inc., and non-debtor defendant, Imsamet
of Arizona, obtained the Bankruptcy Court's approval of a consent
decree they executed with these government parties and agencies:
(1) The United States of America, on behalf of the United
States Environmental Protection Agency;
(2) The States of Idaho, Illinois, Indiana, Michigan, Ohio,
Tennessee, and West Virgina;
(3) The Commonwealths of Kentucky and Virginia;
(4) The Oklahoma Department of Environmental Quality; and
(5) The Maricopa County (Arizona) Air Quality Department.
The Government Parties and Agencies commenced an Environmental
Regulatory Action against the Debtors on February 12, 2009.
Specifically, the Government Plaintiffs alleged that at 15
secondary aluminum production facilities owned and operated by
the Defendants, the Defendants failed to:
(a) design and install adequate systems to capture emissions
of pollutants;
(b) demonstrate compliance with applicable emissions standards
through adequate performance testing;
(c) correctly establish and monitor operating parameters; and
(d) comply with recordkeeping, reporting, and permitting
requirements.
The parties' current Consent Decree settles certain issues under
the Environmental Regulatory Action and claims asserted by the
Government Plaintiffs against the Debtor Defendants under (i) the
Clean Air Act; (ii) the National Emission Standards for Hazardous
Pollutants for Secondary Aluminum Production; and (iii) related
provisions of state and local law.
A full-text copy of the Consent Decree is available for free at:
http://bankrupt.com/misc/Aleris_ConsentDecree.pdf
After arm's-length negotiations over the course of several years,
the Defendants and the Plaintiffs have agreed to settle the
Environmental Regulatory Action and related claims as embodied in
the Consent Decree. The Consent Decree resolves the Defendants'
liabilities for:
* any violations of NESHAP and related provisions of state and
local law and permits arising from facts or events that
occurred prior to August 8, 2009;
* civil claims alleged in the Amended Complaint through
August 8, 2009; and
* civil claims alleged in notices of violation issued by the
United States, the Commonwealth of Kentucky, and the State
of Tennessee.
Under the terms of the Consent Decree, the alleged civil claims
against the Debtor Defendants would be liquidated, and the
Plaintiffs will have allowed, prepetition general unsecured
claims against the Debtors' estates in varying amounts, totaling
$4,600,000.
The Consent Decree not only fixes the liability with respect to
prepetition claims against the Debtor Defendants, but it also
establishes clear guidelines under which the Debtor Defendants
will operate their facilities in compliance with environmental
laws and regulations, L. Katherine Good, Esq., at Richards,
Layton & Finger, P.A., in Wilmington, Delaware, asserts.
Specifically, under the terms of the Consent Decree, the
Defendants will follow a schedule to bring their facilities into
compliance with NESHAP and related provisions of state and local
law. Among other things, the compliance schedule requires the
Defendants to:
(a) better enclose their affected sources and emission units
to improve the capture of emissions;
(b) retest affected sources and emission units using test
protocols;
(c) adopt model recordkeeping and reporting documents;
(d) install pollution control or monitoring equipment at
certain facilities; and
(e) apply for a required permit at one facility.
Ms. Good tells the Bankruptcy Court that after a 30-day public
comment period during which no comments on the proposed
settlement were received, on September 14, 2009, the United
States of America filed an unopposed motion for approval of the
Consent Decree in the United States District Court for the
Northern District of Ohio. The United States of America sought
approval on the basis that the proposed Consent Decree is fair,
adequate, reasonable, and consistent with applied law and the
public interest.
The District Court approved the Consent Decree on September 15,
2009, but in light of the Debtor Defendants' pending Chapter 11
cases, the Consent Decree is not entered as a final judgment.
Should the Bankruptcy Court approve the Debtors' Motion, the
Plaintiffs will file with the District Court a Notice of Approval
by the Bankruptcy Court and Motion to Enter Consent Decree,
requesting the District Court to enter the Consent Decree as a
final judgment.
About Aleris International
Aleris International, Inc., produces and sells aluminum rolled and
extruded products. Aleris operates primarily through two
reportable business segments: (i) global rolled and extruded
products and (ii) global recycling. Headquartered in Beachwood,
Ohio, a suburb of Cleveland, the Company operates over 40
production facilities in North America, Europe, South America and
Asia, and employs approximately 8,400 employees. Aleris operates
27 production facilities in the United States with eight
production facilities that provided rolled and extruded aluminum
products and 19 recycling production plants.
Aleris International, Inc., aka IMCO Recycling Inc., and various
affiliates filed for bankruptcy on February 12, 2009 (Bankr. D.
Del. Case No. 09-10478). The Hon. Brendan Linehan Shannon
presides over the cases. Stephen Karotkin, Esq., and Debra A.
Dandeneau, Esq., at Weil, Gotshal & Manges LLP in New York, serve
as lead counsel for the Debtors. L. Katherine Good, Esq., and
Paul Noble Heath, Esq., at Richards, Layton & Finger, P.A. In
Wilmington, Delaware, serves as local counsel. Moelis & Company
LLC, acts as financial advisors; Alvarez & Marsal LLC as
restructuring advisors, and Kurtzman Carson Consultants LLC as
claims and noticing agent for the Debtors. As of December 31,
2008, the Debtors had total assets of $4,168,700,000; and total
debts of $3,978,699,000.
Bankruptcy Creditors' Service, Inc., publishes Aleris
International Bankruptcy News. The newsletter tracks the chapter
11 proceeding undertaken by Aleris International, Inc. and its
various affiliates. (http://bankrupt.com/newsstand/or 215/945-
7000)
ALERIS INT'L: Proposes to Reject ISDA Pacts With Koch Supply
------------------------------------------------------------
Debtors Aleris International, Inc., and Commonwealth Industries,
Inc., seek the Court's authority to reject each of their
International Swap and Derivatives Association or ISDA Master
Agreement with Koch Supply & Trading, LP.
Before the Petition Date, Aleris and Commonwealth entered into
ISDA Agreements to effectuate certain derivative transactions in
accordance with the specific terms of schedules and confirmations
related to the transactions under the ISDA Agreements. The
schedules and confirmation related to the ISDA transactions are
referred to as the Aleris Ancillary Documents. The Debtors
relate that as of the Petition Date, no settlement date has
occurred for which any amounts were due to Koch Supply. There
were, however, future settlement dates for Confirmations for
which amounts were due to Koch Supply, they note.
Because the ISDA Master Agreements and the Ancillary ISDA
Documents were executory as of the Petition Date, the Debtors
seek to reject to the ISDA Master Agreements and the Ancillary
Documents in their entirety.
The Debtors seek to reject the ISDA Master Agreements and the
remaining Ancillary ISDA Documents because there are no
confirmations to be assumed and they may owe payments to Koch
Supply in connection with transactions with postpetition
settlement dates. Thus, they aver that the ISDA Agreement and
Ancillary Documents are no longer of any value to them.
Full-text copies of the ISDA Agreements and Ancillary ISDA
Documents for rejection are available for free at:
http://bankrupt.com/misc/Aleris_ISDAAgreements.pdf
As a result of the contract rejection, the Debtors relay that
Koch Supply has the right to file proofs of claim for any damages
arising under any of the Transactions that had a settlement date
postpetition, were terminated postpetition, or remain executory
as of October 29, 2009; provided that Koch Supply must file those
proofs of claim within 30 days of any Court order on the Debtors'
request.
In a separate filing, the Debtors certified to the Court that no
objections were filed as to their request. The Debtors
subsequently withdrew the Certification of No Objection without
prejudice.
About Aleris International
Aleris International, Inc., produces and sells aluminum rolled and
extruded products. Aleris operates primarily through two
reportable business segments: (i) global rolled and extruded
products and (ii) global recycling. Headquartered in Beachwood,
Ohio, a suburb of Cleveland, the Company operates over 40
production facilities in North America, Europe, South America and
Asia, and employs approximately 8,400 employees. Aleris operates
27 production facilities in the United States with eight
production facilities that provided rolled and extruded aluminum
products and 19 recycling production plants.
Aleris International, Inc., aka IMCO Recycling Inc., and various
affiliates filed for bankruptcy on February 12, 2009 (Bankr. D.
Del. Case No. 09-10478). The Hon. Brendan Linehan Shannon
presides over the cases. Stephen Karotkin, Esq., and Debra A.
Dandeneau, Esq., at Weil, Gotshal & Manges LLP in New York, serve
as lead counsel for the Debtors. L. Katherine Good, Esq., and
Paul Noble Heath, Esq., at Richards, Layton & Finger, P.A. In
Wilmington, Delaware, serves as local counsel. Moelis & Company
LLC, acts as financial advisors; Alvarez & Marsal LLC as
restructuring advisors, and Kurtzman Carson Consultants LLC as
claims and noticing agent for the Debtors. As of December 31,
2008, the Debtors had total assets of $4,168,700,000; and total
debts of $3,978,699,000.
Bankruptcy Creditors' Service, Inc., publishes Aleris
International Bankruptcy News. The newsletter tracks the chapter
11 proceeding undertaken by Aleris International, Inc. and its
various affiliates. (http://bankrupt.com/newsstand/or 215/945-
7000)
AMERICAN INT'L GROUP: Turns in Profit for Third Quarter
-------------------------------------------------------
American International Group, Inc., reported a net loss of
$15 million for the three months ended September 30, 2009,
compared with a net loss of $24.705 billion in the same period of
2008.
Including non-controlling interests, AIG reported net income of
$455 million, or $0.68 per diluted common share in the third
quarter of 2009, compared with a net loss of $24.5 billion or
$181.02 per diluted share in the third quarter of 2008. Third
quarter 2009 adjusted net income was $1.9 billion, compared with
an adjusted net loss of $9.2 billion in the third quarter of 2008.
Commenting on the third quarter results, AIG President and Chief
Executive Officer Robert H. Benmosche said, "Our results reflect
continued stabilization in performance and market trends. AIG
employees are working to preserve the strength of our insurance
businesses in a challenging market by working closely with our
distribution partners, with third quarter 2009 showing signs of
stabilization. Pricing in our commercial property casualty
business has been stable. Management continues to monitor rates
closely and maintain underwriting discipline, turning away some
renewal business due to aggressive pricing by existing and new
competitors. AIG also took several important steps in its
restructuring program. At AIGFP, virtually all key risk measures
are down significantly and the earnings again benefited from a
positive unrealized market valuation gain on the Super Senior
Credit Default Swap portfolio. Additionally, we announced the
sales of Nan Shan and a portion of AIG's investment advisory and
asset management business, as well as the combination of our
Domestic Life Insurance & Retirement Services businesses and
ongoing efforts to build their value as part of AIG.
"Improved market performance, together with application of the new
investment impairment accounting standard adopted in the second
quarter of 2009, drove a reduction in net realized capital losses
compared to third quarter 2008 and positive valuation changes for
our Maiden Lane Interests, as well as increases in partnership and
mutual fund income. These gains were offset by impairments in the
Asset Management segment, higher current accident year losses
related to credit crisis exposures and prior accident year losses
in General Insurance and lower income from Life Insurance &
Retirement Services investment-linked and annuity products
globally.
"We continue to focus on stabilizing and strengthening our
businesses, but expect continued volatility in reported results in
the coming quarters, due in part to charges related to ongoing
restructuring activities. When we close the special purpose
vehicles with respect to AIA and ALICO with the Federal Reserve
Bank of New York (FRBNY), we expect to recognize an approximate
$5 billion charge for accelerated amortization of the prepaid
commitment asset. These transactions are expected to close in the
fourth quarter."
Liquidity
At October 28, 2009, AIG had outstanding net borrowings under the
Federal Reserve Bank of New York (FRBNY) Facility of
$41.7 billion, with a remaining borrowing capacity of
$18.3 billion, and accrued compounding interest and fees of
$5.2 billion. Net borrowings increased $5.9 billion from
September 30, 2009, primarily due to AIG's secured loan of
$2 billion to International Lease Finance Corporation that
permitted ILFC to repay a maturing bank facility, and the
repayment of approximately $4.9 billion in commercial paper
maturities under the Commercial Paper Funding Facility (CPFF),
which had the effect of unencumbering certain assets securing such
commercial paper. The remaining amount outstanding under the CPFF
after the October 2009 repayments is approximately $5.8 billion,
which includes $2.0 billion for AIG Funding, Inc., $2.7 billion
for Curzon Funding LLC, and $1.1 billion for Nightingale Finance
LLC. In January 2010, AIG will assess whether to borrow
additional funds under the FRBNY Facility in order to repay the
remaining amounts outstanding under the CPFF, taking into account
availability of other sources of funding.
The net borrowing amounts shown at September 30, 2009, and October
28, 2009, were reduced by approximately $1.6 billion drawn under
the Department of the Treasury Commitment, but which had not yet
been utilized. In addition, the net borrowings as of these dates
were further reduced by $1.6 billion due to loans to AIG from AGF.
AIG expects that these loans will be repaid to support AGF's
liquidity as needed.
On April 17, 2009, AIG entered into a Securities Purchase
Agreement with the Department of the Treasury, pursuant to which
the Department of the Treasury will provide an amount up to
$29.835 billion in exchange for increases in the liquidation
preference of AIG's Series F Fixed Rate Non-Cumulative Perpetual
Preferred Stock, par value $5.00 per share, so long as (i) AIG is
not a debtor in a pending case under Title 11 of the United States
Code; and (ii) the AIG Credit Facility Trust, a trust established
for the sole benefit of the United States Treasury and the
Department of the Treasury, in the aggregate, "beneficially own"
more than 50% of the aggregate voting power of AIG's voting
securities. Upon drawings under this commitment, the liquidation
preference of the AIG Series F Preferred Stock increases
proportionately. As of September 30, 2009, $26.629 billion
remained available.
Balance Sheet
AIG's consolidated balance sheet at September 30, 2009, showed
$844.344 billion total assets, $766.649 billion in total
liabilities, $1.158 billion in redeemable noncontrolling interest
in partially owned consolidated subsidiaries, and $76.537 billion
in total equity.
A full-text copy of the Company's press release reporting its
results for the three month period ended September 30, 2009, is
available for free at http://researcharchives.com/t/s?48ea
A full-text copy of the Company's Form 10-Q is available for free
at http://researcharchives.com/t/s?4a07
About AIG
Based in New York, American International Group, Inc., is the
leading international insurance organization with operations in
more than 130 countries and jurisdictions. AIG companies serve
commercial, institutional and individual customers through the
most extensive worldwide property-casualty and life insurance
networks of any insurer. In addition, AIG companies are leading
providers of retirement services, financial services and asset
management around the world. AIG's common stock is listed on the
New York Stock Exchange, as well as the stock exchanges in Ireland
and Tokyo.
In September 2008, AIG experienced a liquidity crunch when its
credit ratings were downgraded below "AA" levels by Standard &
Poor's, Moody's Investors Service and Fitch Ratings. On
September 16, 2008, the Federal Reserve Bank created an
$85 billion credit facility to enable AIG to meet increased
collateral obligations consequent to the ratings downgrade, in
exchange for the issuance of a stock warrant to the Fed for 79.9%
of the equity of AIG. The credit facility was eventually
increased to as much as $182.5 billion.
AIG has sold a number of its subsidiaries and other assets to pay
down loans received from the U.S. government, and continues to
seek buyers of its assets.
AMERICAN INT'L GROUP: Treasury Seeks Possible Candidates to Board
-----------------------------------------------------------------
The Wall Street Journal's Serena Ng and Joann S. Lublin, citing
people familiar with the matter, report that the federal
government is seeking out possible candidates to add to American
International Group's board of directors. Sources told the
Journal the Treasury this past week hired an executive-search firm
to assist it.
The Journal's Ms. Ng and Ms. Lublin report the move came after AIG
in early November missed a fourth quarterly dividend payment on
about $44 billion in preferred shares it issued to the Treasury
under the Troubled Asset Relief Program. Because of the missed
payment, the Treasury gained the right to elect two or three
directors to AIG's board, but it hasn't decided when or if it will
appoint them.
The Journal, citing people familiar with the matter, also reports
Douglas Foshee -- one of the three trustees who oversees U.S.
taxpayers' nearly 80% stake in AIG -- said in a letter about a
month ago he wanted to withdraw as a trustee, but agreed to stay
after talking to several individuals, including William Dudley,
president of the Federal Reserve Bank of New York.
Mr. Foshee is president and chief executive of natural-gas
producer and pipeline operator El Paso Corp.
According to the Journal, a person familiar with the matter said
Mr. Foshee felt the job was taking up too much time. He and the
other trustees testified at one point in front of the House
Oversight and Government Reform Committee about their work on AIG.
The Journal notes that Mr. Foshee, along with Chester Feldberg and
Jill Considine, were appointed in January by the New York Fed as
independent trustees overseeing the government's ownership stake
in AIG. Their main role was to vote the shares the government
controls. Last summer, the trustees proposed and helped vote in
six directors to AIG's 11-member board.
About AIG
Based in New York, American International Group, Inc., is the
leading international insurance organization with operation in
more than 130 countries and jurisdictions. AIG companies serve
commercial, institutional and individual customers through the
most extensive worldwide property-casualty and life insurance
networks of any insurer. In addition, AIG companies are leading
providers of retirement services, financial services and asset
management around the world. AIG's common stock is listed on the
New York Stock Exchange, as well as the stock exchanges in Ireland
and Tokyo.
In September 2008, AIG experienced a liquidity crunch when its
credit ratings were downgraded below "AA" levels by Standard &
Poor's, Moody's Investors Service and Fitch Ratings. On
September 16, 2008, the Federal Reserve Bank created an
$85 billion credit facility to enable AIG to meet increased
collateral obligations consequent to the ratings downgrade, in
exchange for the issuance of a stock warrant to the Fed for 79.9%
of the equity of AIG. The credit facility was eventually
increased to as much as $182.5 billion.
AIG has sold a number of its subsidiaries and other assets to pay
down loans received from the U.S. government, and continues to
seek buyers of its assets.
AMR CORP: Delta CEO Says Star Alliance Willing to Invest More
-------------------------------------------------------------
Daily Bankruptcy Review says the chief executive of Delta Air
Lines Inc. indicated the SkyTeam alliance would be willing to
invest more than Delta's proposed $1.02 billion into Japan
Airlines Corp. as it tries to forge a trans-Pacific partnership.
As reported by the Troubled Company Reporter-Asia Pacific on
November 19, 2009, Dow Jones Newswires' Doug Cameron and Yoshio
Takahashi and The Wall Street Journal's Mariko Sanchanta reported
that Delta Air Lines Inc. and its airline partners said they could
provide a $1.02 billion funding package to Japan Airlines Corp.,
in an aggressive bid meant to show their financial muscle as they
try and wrest JAL away from its partnership with rival American
Airlines.
According to the report, the proposal by Delta and SkyTeam members
-- including Air France-KLM -- includes a $500 million injection
from the alliance. Delta would provide a $300 million revenue
guarantee, $200 million in asset-backed funding and cover
$20 million or more in costs for a switch.
"The move signals the first time that Delta and its SkyTeam
partners have quantified the amount they would be willing to
inject into JAL, which is weighed down by more than one trillion
yen ($11.19 billion) in debt and pension liabilities. It also
underlines Delta's determination to tie up with JAL in order to
tap into the Japanese carrier's lucrative Asian and trans-Pacific
routes," the report said.
According to the report, Delta President Edward Bastian said at a
briefing in Tokyo Wednesday that he believes that the bigger
economies of scale provided by SkyTeam would bring greater
benefits to the struggling Japanese carrier.
"It's clear that SkyTeam is by far the strongest partner for Japan
Airlines and the best ally to ensure JAL's growth and stability in
the decades to come," Mr. Bastian said. He estimated that JAL's
annual revenue would grow by $400 million if the Japanese carrier
joins SkyTeam, the report added.
As reported by the Troubled Company Reporter on November 6, 2009,
sources told the Wall Street Journal that American Airlines'
"Oneworld Total Value Proposition" presentation to government
officials and JAL senior management:
-- shows that an American-JAL alliance would significantly
boost JAL's revenue should the U.S. and Japan reach a new
open-skies deal;
-- underlines the fact that several oneworld members are keen
to expand their relationship with JAL, including British
Airways, which has expressed an interest in a joint
venture with JAL.
-- estimates a switch to the Delta alliance would cost JAL
more than $500 million in lost revenue in the first two
years from disentangling frequent-flier agreements and
lost traffic shared with other airlines.
The Journal said it is unclear what the actual financial impact of
a JAL switch to SkyTeam from oneworld would be, but the process
could be complex. "If JAL had been starting from zero, a SkyTeam
alliance would have made more sense," the Journal quoted Yoshihisa
Akai, the managing director of Japan Aviation Management Research,
a think tank, as saying. "But extricating itself from oneworld
will be a massive task."
American and Delta are offering to buy minority equity stakes in
JAL.
The Journal said Delta has hired investment bank Goldman Sachs
Group Inc. and public-relations firm Fleishman-Hillard to advise
it on a possible alliance with JAL. American has tapped Global
Advisory Japan, a unit of Rothschild, the Journal said.
About AMR Corp.
Headquartered in Forth Worth, Texas, AMR Corporation (NYSE:
AMR) operates with its principal subsidiary, American Airlines
Inc. -- http://www.aa.com/-- a worldwide scheduled passenger
airline. At the end of 2006, American provided scheduled jet
service to about 150 destinations throughout North America, the
Caribbean, Latin America, including Brazil, Europe and Asia.
American is also a scheduled airfreight carrier, providing
freight and mail services to shippers throughout its system.
Its wholly owned subsidiary, AMR Eagle Holding Corp., owns two
regional airlines, American Eagle Airlines Inc. and Executive
Airlines Inc., and does business as "American Eagle." American
Beacon Advisors Inc., a wholly owned subsidiary of AMR, is
responsible for the investment and oversight of assets of AMR's
U.S. employee benefit plans, as well as AMR's short-term
investments.
* * *
AMR 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.
About Delta Air Lines
With its acquisition of Northwest Airlines, Atlanta, Georgia-based
Delta Air Lines (NYSE: DAL) -- http://www.delta.com/or
http://www.nwa.com/-- became the world's largest airline
following merger with Northwest Airlines in 2008. From its hubs
in Atlanta, Cincinnati, Detroit, Memphis, Minneapolis-St. Paul,
New York-JFK, Salt Lake City and Tokyo-Narita, Delta, its
Northwest subsidiary and Delta Connection carriers offer service
to more than 376 destinations worldwide in 66 countries and serves
more than 170 million passengers each year. The merger closed on
October 29, 2008.
Northwest and 12 affiliates filed for Chapter 11 protection on
September 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930).
On May 21, 2007, the Court confirmed the Northwest Debtors'
amended plan. That amended plan took effect May 31, 2007.
Delta and 18 affiliates filed for Chapter 11 protection on
September 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923).
Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represented
the Delta Debtors in their restructuring efforts. On April 25,
2007, the Court confirmed the Delta Debtors' plan. That plan
became effective on April 30, 2007.
(Bankruptcy Creditors Service Inc. publishes Delta Air Lines
Bankruptcy News, http://bankrupt.com/newsstand/or 215/945-7000).
* * *
Delta Air Lines has $44,480,000,000 in assets against total debts
of $43,500,000,000 in debts as of June 30, 2009.
Delta Air Lines and Northwest Airlines carry a 'B/Negative/--'
corporate ratings from Standard & Poor's. They also continue to
carry 'B2' corporate family ratings from Moody's.
About JAL
Japan Airlines Corporation -- http://www.jal.co.jp/-- is a Japan-
based holding company that is active in five business segments
through its 225 subsidiaries and 82 associated companies. The Air
Transportation segment is engaged in the operation of passenger
and cargo planes. The Air Transportation-Related segment is
engaged in the transportation of passengers and cargoes, the
preparation of in-flight food catering, the maintenance of
aircraft and land equipment, as well as the fueling business. The
Travel Planning and Marketing segment is involved in the planning
and sale of travel packages. The Card and Leasing segment is
engaged in the provision of finance, cards and leasing services.
The Others segment is involved in businesses related to hotels,
resorts, logistics, wholesale, retail, real estate, printing,
construction, manpower dispatch, as well as information and
communication. The Company has numerous global operating
locations.
JAL International Co. Ltd. is a wholly owned operating subsidiary
of Japan Airlines Corporation.
* * *
As reported by the Troubled Company Reporter on November 3, 2009,
Moody's Investors Service has downgraded the long-term debt rating
and issuer rating of Japan Airlines International Co., Ltd. To
Caa1 from B1, and will continue to review both ratings for further
possible downgrade.
AMR CORP: JAL Alliance Won't Affect S&P's 'B-' Rating
-----------------------------------------------------
Standard & Poor's Ratings Services said that American Airlines
Inc.'s and parent AMR Corp.'s (both B-/Negative/--) attempt to
maintain a marketing alliance with Japan Airlines Corp. (CC/Watch
Neg/--) will not affect the ratings or outlook on the companies.
While American has made no details of its proposal public, other
than its partnership with private equity firm TPG, which has a
mostly successful track record of investing in airlines, S&P
expects that American will provide a financial incentive to keep
financially ailing JAL in the oneworld alliance.
Negotiations on a new U.S.-Japan "open skies" aviation treaty, in
which U.S. airlines could allow increased access to serve Japan
and routes beyond Japan, are currently ongoing. If and when the
treaty is concluded, it appears that American and competitor Delta
Air Lines Inc. (B/Negative/--), which have proposed to provide JAL
with $1 billion in various forms of assistance with its SkyTeam
alliance partners, would likely seek authority to operate with
antitrust immunity on trans-Pacific routes. This would allow
partner airlines to coordinate pricing and other activities on
specified routes, and would permit them to form a joint venture in
which partners would share revenues. Delta currently has such a
joint venture with Air France-KLM (not rated) on trans-Atlantic
routes. American has much at stake in maintaining an alliance
with JAL. By itself, it does not have a large presence in the
Pacific market. Therefore, if oneworld cannot keep JAL in the
alliance, it risks material loss of revenues in the Pacific.
Alternatively, if American invests significant capital in JAL to
keep it in oneworld, but does not obtain regulatory permission to
operate with antitrust immunity, its liquidity and financial
profile could suffer. The Japanese government-backed entity
Enterprise Turnaround Initiative Corp. is in the process of
restructuring JAL. The ultimate resolution of the investment in
JAL, and by which airline(s), if any, could take some time. Other
factors, such as progress on the U.S.-Japan aviation treaty, could
also affect the resolution.
ANDERSEN 2000: Court Confirms Second Amended Plan
-------------------------------------------------
W. H. Drake of the U.S. Bankruptcy Court for the Northern District
of Georgia confirmed Andersen 2000 Inc.'s second amended Plan of
Reorganization dated Sept. 14, 2009.
According to the explanatory disclosure statement, holders of
secured claims will receive 100 shares of new common stock in
exchange for $50,000 of their claims with their remaining claims
to be paid in cash, with interest, for a full recovery. Holders
of general unsecured claims aggregating $2,740,000 will receive
cash equal to 5% of their allowed claims. Holders of equity
interests won't receive any dividends.
A full-text copy of the Disclosure Statement is available for free
at http://bankrupt.com/misc/Andersen2000_DisclosureStatement.pdf
A full-text copy of the Second Amended Plan of Reorganization is
available for free at:
http://bankrupt.com/misc/Andersen2000_planofReorganization.pdf
Andersen 2000 Inc. -- http://www.crownandersen.com/-- designs,
manufactures and installs complete incineration, pollution control
and heat recovery systems for hazardous materials, infectious
materials, radioactive materials and municipal waste. It filed
for Chapter 11 on Dec. 20, 2004 (Bankr. N.D. Ga. Case No.: 04-
14155). Attorneys at Scroggins and Williamson serve as counsel to
the Debtor. The petition says assets and debts range from $1
million to $10 million.
ARVINMERITOR INC: Eyes Up to $750 Million Securities Offering
-------------------------------------------------------------
ArvinMeritor, Inc., filed with the Securities and Exchange
Commission a shelf registration statement on Form S-3 in
connection with its offering from time to time of up to
$750,000,000 in debt securities, shares of common stock, shares of
preferred stock, or warrants to purchase debt securities, common
stock or preferred stock. Any or all of the securities may be
offered and sold separately or together.
A full-text copy of the Company's prospectus is available at no
charge at http://ResearchArchives.com/t/s?4a09
On November 19, 2009, the Company filed its annual report on Form
10-K for the year ended September 30, 2009, with the SEC. The
Company said cash flow in fiscal year 2009 was negatively affected
by decreased earnings due to lower sales and will continue to be
negatively impacted due to continued lowered production and the
current volatility in the financial markets, which could affect
certain of the company's customers or vendors. The Company saw
its usage of the revolving credit facility throughout the first
six months of the fiscal year increase significantly to meet
working capital requirements, including reductions in accounts
receivable factoring programs. However, stronger cash flow,
improved regional cash efficiencies and the sale of certain light
vehicle businesses allowed the company to reduce usage of the
revolver, including letters of credit, by $300 million at fiscal
year end as compared to second quarter end.
At September 30, 2009, the company had $95 million in cash and
cash equivalents and an undrawn amount of $611 million under the
revolving credit facility. Availability under the revolving
credit facility is subject to a senior secured debt to EBITDA
ratio covenant, as defined in the agreement, which will likely
limit borrowings under the agreement as of each quarter end.
As long as the Company is in compliance with this covenant as of
the quarter end, it has full availability under the revolving
credit facility every other day during the quarter. The Company
was in compliance with this covenant as of September 30, 2009.
The Company's future liquidity is subject to a number of factors,
including access to adequate funding under its senior secured
credit facility, vehicle production schedules and customer demand
and access to other borrowing arrangements such as factoring or
securitization facilities. Even taking into account these and
other factors, and with the assumption that the current trends in
the commercial vehicle and automotive industries continue,
management expects to have sufficient liquidity to fund the
Company's operating requirements through the term of the existing
revolving credit facility in June 2011.
A full-text copy of the Company's annual report on Form 10-K is
available at no charge at http://ResearchArchives.com/t/s?4a0a
About ArvinMeritor Inc.
Based in Troy, Michigan, ArvinMeritor, Inc. (NYSE: ARM) --
http://www.arvinmeritor.com/-- is a premier global supplier of a
broad range of integrated systems, modules and components to the
motor vehicle industry. The company marks its centennial
anniversary in 2009, celebrating a long history of 'forward
thinking.' The company serves commercial truck, trailer and
specialty original equipment manufacturers and certain
aftermarkets, and light vehicle manufacturers.
As of September 30, 2009, ArvinMeritor had $2.508 billion in total
assets and shareowners' deficit of $1.277 billion. As of
September 30, 2009, short-term debt was $97 million; Accounts
payable was $674 million; Other current liabilities were
$411 million; Liabilities of discontinued operations were
$107 million; Long-term debt was $1.080 billion; Retirement
benefits were $1.077 billion; Other liabilities were $310 million,
and Minority interests were $29 million.
In August, Fitch Ratings said it is keeping ArvinMeritor's issuer
default rating at 'CCC' on Rating Watch Negative.
ATHILON CAPITAL: S&P Downgrades Rating on Senior Notes to 'BB-'
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered its issuer credit
rating on Athilon Capital Corp./Athilon Asset Acceptance Corp. to
'A-' from 'A' and its rating on the senior subordinated notes
issued by Athilon to 'BB-' from 'BB'. S&P's outlook on Athilon is
negative. Athilon is a credit derivative product company whose
limited purpose is to sell credit protection primarily on
corporate tranches and collateralized debt obligation of asset-
backed securities tranches in the form of credit default swaps.
The rating actions reflect S&P's view of the further credit
deterioration of the reference entities in Athilon's corporate
tranche CDS portfolio and the associated rising capital
requirements. Since S&P's July 23, 2009, rating actions on
Athilon, S&P has lowered its ratings on a number of reference
entities in Athilon's corporate CDS portfolio.
Based on the latest report that S&P received from Athilon, the
corporate tranche CDS portfolio's contribution to the required
capital alone would have to increase to $266 million from
$216 million (calculated as of July 2009) to maintain the 'A'
issuer credit rating. The required capital amount includes the
impact of potential counterparty termination payments. This
approach is consistent with S&P's criteria for rating CDPCs.
S&P will continue to monitor Athilon's exposure to the corporate
tranches and to one CDO of ABS transaction and take further rating
actions as appropriate.
BALLAMOR GOLF: Files for Bankruptcy to Restructure Debts
--------------------------------------------------------
Ballamor Golf Club filed for Chapter 11 restructuring, citing the
difficulty of attracting private club members in the current
economy, according to pressofAtlanticCity.com. The Company
targeted a Jan. 1, 2010 opening for the golf course.
BANK OF AMERICA: To Sell Commercial Mortgage Debt
-------------------------------------------------
ABI reports that Bank of America Corp. plans to sell $460 million
of securities backed by commercial real estate without relying on
a U.S. program to aid lending.
Based in Charlotte, North Carolina, Bank of America --
http://www.bankofamerica.com/-- is one of the world's largest
financial institutions, serving individual consumers, small and
middle market businesses and large corporations with a full range
of banking, investing, asset management and other financial and
risk-management products and services. The Company serves more
than 59 million consumer and small business relationships with
more than 6,100 retail banking offices, nearly 18,700 ATMs and
online banking with nearly 29 million active users. Following the
acquisition of Merrill Lynch on January 1, 2009, Bank of America
is among the world's leading wealth management companies and is a
global leader in corporate and investment banking and trading
across a broad range of asset classes serving corporations,
governments, institutions and individuals around the world. Bank
of America offers support to more than 4 million small business
owners. The Company serves clients in more than 150 countries.
Bank of America Corporation stock is a component of the Dow Jones
Industrial Average and is listed on the New York Stock Exchange.
BofA sought government backing in completing its acquisition of
Merrill Lynch. Merrill Lynch & Co. Inc. -- http://www.ml.com/--
is a wealth management, capital markets and advisory companies
with offices in 40 countries and territories.
* * *
BofA has received US$45 billion in government bailout money since
the economic collapse in 2008.
As reported by the Troubled Company Reporter on March 27, 2009,
Moody's Investors Service lowered the senior debt rating of Bank
of America Corporation to A2 from A1, the senior subordinated debt
rating to A3 from A2, and the junior subordinated debt rating to
Baa3 from A2. The preferred stock rating was downgraded to B3
from Baa1. The holding company's short-term rating was affirmed
at Prime-1.
Bank of America reported a third-quarter 2009 net loss of
$1.0 billion. After deducting preferred dividends of
$1.2 billion, including $893 million related to dividends paid to
the U.S. government, the diluted loss per share was $0.26.
BEAR STEARNS: Study Says CEO Cayne Got $388MM Before Collapse
-------------------------------------------------------------
The Wall Street Journal's Aaron Lucchetti reports that a study
slated for release Monday showed Bear Stearns Cos. and Lehman
Brothers Holdings Inc. executives got nearly $2.5 billion from
their firms between 2000 and 2008 even though the financial crisis
hammered the shares they held.
Mr. Lucchetti relates the study showed former Bear Chairman and
Chief Executive James Cayne walked away with $388 million for the
period covered by the analysis, while former Lehman Chairman and
CEO Richard Fuld Jr. got $541 million. Mr. Cayne's paper losses
on his Bear stock were more than $900 million, and Mr. Fuld was
hit with losses of about $930 million on his Lehman stake, Mr.
Lucchetti points out.
According to Mr. Lucchetti, the study's authors include Lucian
Bebchuk, executive director of Harvard Law School's corporate-
governance program and an adviser to Treasury Department official
Kenneth Feinberg. They used public filings from the companies.
"What happened at Bear and Lehman, the study concludes, shows that
toughened oversight of compensation proposed by the U.S. Federal
Reserve and other regulators around the world is needed to prevent
executives from taking excessive risks," Mr. Lucchetti says.
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.
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 US$639 billion in assets and US$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)
BERNARD MADOFF: Baker & Hostetler Seeks $21MM for May-Sept. Work
----------------------------------------------------------------
Judge Burton R. Lifland at the United States Bankruptcy Court for
the Southern District of New York will hold a hearing December 17,
2009, at 10:00 a.m., on applications for interim compensation for
services rendered and reimbursement of actual and necessary
expenses incurred by professionals involved in the Substantively
Consolidated SIPA Liquidation of Bernard L. Madoff Investment
Securities LLC (Adv. Pro. No. 08-01789 (BRL)) and the bankruptcy
case of Bernard L. Madoff.
Baker & Hostetler LLP, counsel to Irving H. Picard, Esq., the
trustee overseeing the liquidation of BLMIS, billed $21,279,101 in
fees and $280,681 in expenses for services from May 1, 2009
through September 30, 2009.
Mr. Picard billed $835,605 in fees and $921.25 in expenses for
services from May 1, 2009 through September 30, 2009.
Lee S. Richards, Esq., as Receiver, and Richards Kibbe & Orbe LLP,
Counsel to Receiver, seek payment of $300,000 in fees and $6,449
in expenses for services from December 11, 2008, through February
28, 2009.
AlixPartners LLP, as consultant to the Receiver, seeks payment of
$316,000 in fees and $15,000 in expenses for services from
December 11, 2008 through February 28, 2009.
As reported by the Troubled Company Reporter on August 7, 2009,
the Bankruptcy Court approved Baker & Hostetler's $14.7 million in
fees and $274,203 in expenses for work done from December 15,
2008, to April 30, 2009.
Daily Bankruptcy Review says Baker & Hostetler has billed the
Madoff estate about $36.9 million in total fees since December 15,
2008, while Mr. Picard has charged about $1.6 million. The fees,
however, are subject to a 20% holdback during the case.
DBR notes that on October 28, 2009, the Securities Investor
Protection Corp., which handles the liquidation of failed
brokerages, said it had committed to advance more than $534
million to Madoff investors. As of last month, Mr. Picard had
recovered about $1.4 billion for the investors, DBR says.
About Bernard L. Madoff
Bernard L. Madoff Investment Securities LLC and Bernard L.
Madoff orchestrated the largest Ponzi scheme in history, with
losses topping US$50 billion.
On December 15, 2008, the Honorable Louis A. Stanton of the
U.S. District Court for the Southern District of New York granted
the application of the Securities Investor Protection Corporation
for a decree adjudicating that the customers of BLMIS are in need
of the protection afforded by the Securities Investor Protection
Act of 1970. The District Court's Protective Order (i) appointed
Irving H. Picard, Esq., as trustee for the liquidation of BLMIS,
(ii) appointed Baker & Hostetler LLP as his counsel, and (iii)
removed the SIPA Liquidation proceeding to the Bankruptcy Court
(Bankr. S.D.N.Y. Adv. Pro. No. 08-01789) (Lifland, J.).
On April 13, 2009, former BLMIS clients filed an involuntary
Chapter 7 bankruptcy petition against Bernard Madoff (Bankr.
S.D.N.Y. 09-11893). The case is before Hon. Burton Lifland. The
petitioning creditors -- Blumenthal & Associates Florida General
Partnership, Martin Rappaport Charitable Remainder Unitrust,
Martin Rappaport, Marc Cherno, and Steven Morganstern -- assert
$64 million in claims against Mr. Madoff based on the balances
contained in the last statements they got from BLMIS.
On April 14, 2009, Grant Thornton UK LLP as receiver placed Madoff
Securities International Limited in London under bankruptcy
protection pursuant to Chapter 15 of the U.S. Bankruptcy Code
(Bankr. S.D. Fla. 09-16751).
The Chapter 15 case was later transferred to Manhattan. In June
2009, Judge Lifland approved the consolidation of the Madoff SIPA
proceedings and the bankruptcy case.
Judge Denny Chin of the U.S. District Court for the Southern
District of New York on June 29, 2009, sentenced Mr. Madoff to
150 years of life imprisonment for defrauding investors in
United States v. Madoff, No. 09-CR-213 (S.D.N.Y.).
BI-LO LLC: $350MM Lone Star Cash Infusion Underpins Exit Plan
-------------------------------------------------------------
BI-LO, LLC and certain affiliates on November 20, 2009, filed a
Plan Of Reorganization and Disclosure Statement with the United
States Bankruptcy Court for the District of South Carolina. The
Plan is sponsored by Lone Star Funds and includes a $350 million
cash infusion, funded by a $150 million new equity investment by
Lone Star and $200 million in committed term loan financing. In
addition, the Lone Star proposal will provide for a $150 million
ABL facility for BI-LO post-emergence to fund working capital and
other normal business needs.
The Company noted that the Official Unsecured Creditors Committee
has submitted a competing Plan of Reorganization and Disclosure
Statement with the Court. Both the Plan sponsored by Lone Star
and the Plan submitted by the Creditor's Committee contemplate
BI-LO continuing to operate as a going concern.
"Today marks a significant milestone and an important next step in
our restructuring efforts," said Michael Byars, President and
Chief Executive Officer of BI-LO. "The two plans submitted before
the Court create additional choice for BI-LO's creditors and
encourage competition that we expect will maximize the value of
the estate for the benefit of the Company and its stakeholders.
Further, the competing plans demonstrate the significant interest
in our Company and are a testament to our strong operational
performance over the past several months."
Mr. Byars added, "I'd like to thank all of our teammates for their
continued hard work, dedication and commitment to BI-LO. We look
forward to working with all of our Creditors and the Court to
reach an agreement that will enable us to emerge from this process
as expeditiously as possible. As we work toward a successful
restructuring, we will continue to provide our customers and
communities with the freshest products and the same top quality
brands they have come to expect."
About BI-LO
Headquartered in Mauldin, South Carolina, BI-LO LLC operates 214
supermarkets in South Carolina, North Carolina, Georgia and
Tennessee and employs approximately 15,500 people.
Dallas-based Lone Star Funds bought the business in 2005 from
Koninklijke Ahold NV, the Dutch supermarket operator. Lone Star
also owns Bruno's Supermarkets LLC, a chain of 66 stores
that filed under Chapter 11 in February in Birmingham, Alabama.
BI-LO and its affiliates filed for Chapter 11 bankruptcy
protection on March 23, 2009 (Bankr. D. S.C. Case No. 09-02140).
George B. Cauthen, Esq., Frank B. Knowlton, Esq., at Nelson
Mullins Riley & Scarborough, L.L.P; Josiah M. Daniel, III, Esq.,
Katherine D. Grissel, Esq., at Vinson & Elkins L.L.P. in Dallas;
and Dov Kleiner, Esq., Alexandra S. Kelly, Esq., at Vinson &
Elkins L.L.P., in New York, serve as counsel. Kurtzman Carson
Consultants LLC serves as notice and claims agent. BI-LO listed
between $100 million and $500 million each in assets and debts.
BLOCKBUSTER INC: Receives Non-Compliance Notice From NYSE
---------------------------------------------------------
Blockbuster Inc. has authorized a combination of its shares of
Class A Common Stock and Class B Common Stock into a single class
of shares of common stock. Blockbuster's dual class capital
structure was originally established in connection with
Blockbuster's prior ownership by Viacom. Blockbuster believes
that elimination of the dual class capital structure will improve
the liquidity of its common stock and end confusion regarding the
differences between the two classes of common stock. The
combination will be subject to obtaining the requisite stockholder
approvals at Blockbuster's annual stockholders meeting in 2010 and
will not take effect until such approvals are obtained.
Blockbuster's Board of Directors may explore additional
alternatives with respect to its capital structure if necessary to
cure the price condition deficiency.
In addition, on Nov. 17, 2009 the Company was notified by the New
York Stock Exchange that it is not currently in compliance with
the NYSE's continued listing standard that requires the average
closing price of the Company's common stock be no less than $1.00
per share over a consecutive 30 trading-day period.
Under NYSE rules, the Company has six months from the date of the
notice to bring its share price and average price back to or above
$1.00. During this time the Company's common stock will continue
to be listed and traded on the NYSE, subject to compliance with
other NYSE continued listing requirements. If the Company has not
cured the price condition deficiency by the end of the cure
period, its common stock would be subject to delisting by the
NYSE. In accordance with NYSE rules, Blockbuster will notify the
NYSE within 10 business days from the receipt of the notice of its
intent to cure the price condition deficiency.
About Blockbuster Inc.
Dallas-based Blockbuster Inc. (NYSE: BBI, BBI.B) is a global
provider of rental and retail movie and game entertainment. The
Company provides its customers with convenient access to media
entertainment anywhere and any way they want it -- whether in-
store, by-mail, through vending and kiosks or digital download.
With a highly recognized brand name and a library of over 125,000
movie and game titles, Blockbuster leverages its multi-channel
presence to further build upon its leadership position in the
media entertainment industry and to best serve the two million
daily global customers and over 50 million annual global
customers. The Company may be accessed worldwide at
http://www.blockbuster.com/
As reported by the Troubled Company Reporter, Sept. 18, 2009,
Standard & Poor's Ratings Services raised its corporate credit
rating on Blockbuster to 'B-' from 'CCC'. The outlook is stable.
The TCR on Oct. 6, 2009, said Moody's Investors Service upgraded
Blockbuster's long term ratings, including its probability of
default rating to 'Caa1' from 'Caa3' and its corporate family
rating to 'Caa1' from 'Caa2'. The rating outlook is stable.
BLUEHIPPO FUNDING: Files for Bankruptcy After Bank Froze Funds
--------------------------------------------------------------
Baltimore, Maryland-based BlueHippo Funding, LLC, a direct
response marketing company, has filed for Chapter 11 bankruptcy.
The move was precipitated by a surprise action from its payment
processor's bank, First Region's Bank, which without warning froze
funds that belonged to BlueHippo.
First Region's Bank explained in an e-mail that it was freezing
BlueHippo's accounts solely as a result of a recent press release
issued by the FTC -- a press release that, according to BlueHippo,
is replete with factual inaccuracies.
BlueHippo adamantly believes the bank's actions are unwarranted
and not permissible under law. BlueHippo explains the freezing of
the Company's accounts has effectively prevented it from being
able pay its creditors in the ordinary course and has forced
BlueHippo to seek bankruptcy protection.
BlueHippo has demanded immediate and complete restoration of its
accounts and intends to submit a plan to restructure the company
as quickly and efficiently as possible.
BON-TON STORES: Fitch Affirms Issuer Default Rating at 'B-'
-----------------------------------------------------------
Fitch Ratings has affirmed these ratings for Bon-Ton and revised
the Rating Outlook to Stable from Negative. The Outlook revision
reflects Bon-Ton's success in amending and extending its credit
facility, thus alleviating concerns around liquidity.
Fitch has affirmed these:
The Bon-Ton Stores, Inc.
-- Issuer Default Rating at 'B-'.
The Bon-Ton Department Stores, Inc.
-- IDR at 'B-';
-- Senior unsecured notes at 'CC/RR6'.
Bonstores Realty One and Two, LLC
-- IDR at 'B-'.
Fitch has also assigned a 'BB-/RR1' rating to Bon-Ton's proposed
$675 million 3.5 year senior secured asset-based credit facility
that will replace its existing $800 million facility scheduled to
mature in March 2011. Fitch has assigned a 'BB-/RR1' rating to
its new $75 million second lien term loan credit facility due to
mature on Nov. 18, 2013. Both these facilities are at the Bon-Ton
Department Stores, Inc. level. The Bonstores Realty One and Two
mortgage loan facility has been downgraded to 'B/RR3' from
'B+/RR2'.
Bon-Ton's ratings reflect continued pressure on comparable store
sales trends given the weakness in discretionary spending and the
resulting pressure on the company's operating and credit metrics.
Although same store sales trends and operating income year-to-date
are trending better than anticipated on improved gross margins and
cost control, the company remains highly leveraged. Given Fitch's
outlook for a tepid recovery in consumer spending, same store
sales for Bon-Ton (and for the overall department store space) are
expected to decline to the low single digits in 2010. As a
result, Fitch expects credit metrics in 2010 will be similar to
2009 levels.
A third quarter comparable store sales decline of 2.6% compared
favorably to the 9.2% decline for the first half of 2009. This is
mainly due to easier year-ago comparisons although trends have
also improved on a two-year combined basis, with a comparable
store sales decline of 10.9% in the third quarter versus 14.3% in
the first half of the year. This combined with significantly
reduced inventory levels has resulted in improved gross margin,
which is up 140 basis points year to date. Fitch expects fourth
quarter same store sales to be decline 3%-4%. With comparable
inventory down 9%, this bodes well for gross margins. As a
result, Fitch expects Bon-Ton's 2009 EBITDA to come in line with
management's expectation of $180-$200 million, versus $157 million
in 2008.
Free cash flow is expected to be in excess of $100 million,
including improvements in working capital and a cash tax benefit
of $32 million. This, combined with proceeds of $75 million from
the new term loan will result in lower borrowings of approximately
$140 million versus $320 million at the end of last year on the
credit facility. The company's leverage as measured by adjusted
debt/EBITDAR is expected to improve to 6.2 times in 2009 versus
7.6x for 2008, but still be above the 5.6x for 2007. For 2010,
leverage is expected to remain between 6.0-7.0x. This reflects
Fitch's expectation of same store sales in the negative low single
digit range and EBITDA of flat to down.
Key to ratings going forward will be Bon-Ton's ability to drive
top line growth and leverage fixed expenses to improve
profitability and free cash flow, allowing the company to delever
the balance sheet. While the company continues to look for other
expense reduction opportunities and could maintain capital
expenditures at current levels for the foreseeable future to
preserve liquidity, Fitch views the $35 million in annual capital
expenditures as insufficient for the company to remain competitive
longer term.
The issue ratings shown above are derived from the IDR and the
relevant Recovery Rating. The $675 million 3.5 year senior
secured credit facility due to close in early December is rated
'BB-/RR1', indicating outstanding (91%-100%) recovery prospects in
a distressed scenario. The facility is secured by a first lien on
substantially all of the assets of the borrowing entities and
guarantors, except for certain mortgaged real property supporting
the mortgage loan facilities. Covenants require a minimum excess
availability of $75 million and the new facility will retain
limitations on debt and dividends. The new $75 million term loan
facility has a second lien on the assets supporting the credit
facility and is also rated 'BB-/RR1'. The $246 million mortgage
loan facility due 2016 is rated 'B/RR3', indicating good (51%-70%)
recovery prospects in a distressed scenario. The facility is
secured by mortgages on 23 stores and one distribution center.
These properties are owned by bankruptcy-remote special purpose
entities. The $510 million senior unsecured notes are rated
'CC/RR6' and are considered to have poor (0%-10%) recovery
prospects in a distressed scenario.
BOSSIER AUTO: Now in Chapter 11 Due to Chrysler Dispute
-------------------------------------------------------
John Cuoco at News Channel 25 reports that Bossier County Auto
Dealership filed for bankruptcy in a legal battle with Chrysler.
Mr. Cuocu relates that the Company owed $4 million in unpaid loans
and about 99,000 in vehicle taxes to Chrysler, which compelled it
to put a hold on any tags and plates for automobiles sold.
Customers can no longer register their vehicles and are left to
renew temporary plates every 30 days as a result of the money
owed, he says.
Scott Bossier is the principal dealer of the company, Mr. Cuoco
adds.
Bossier County Auto Dealership is car dealer.
BUILDING MATERIALS: Plan Exclusivity Extended to January 12
-----------------------------------------------------------
Building Materials Holding Corp. secured a January 12 extension of
its exclusive period to propose a Chapter 11 plan, Bill Rochelle
at Bloomberg News reports.
The U.S. Bankruptcy Court for the District of Delaware has already
approved BMHC's Disclosure Statement and authorized the Company to
begin soliciting votes on the Plan of Reorganization from the
requisite creditor groups.
The Plan provides for BMHC's secured lenders to convert debt into
equity, becoming majority owners of the Company upon emergence.
Under the Plan, BMHC will reduce its outstanding indebtedness as
of the filing date by approximately $150 million to $135 million
upon emergence. The Company has obtained commitments for
$103.5 million of exit financing to support its ongoing operations
and future growth.
The deadline for ballots to be received by the voting agent is
November 25, 2009. A court hearing to confirm the Plan is
scheduled to be held on December 10, 2009. Provided that the Plan
is confirmed at that time, BMHC expects to complete its financial
restructuring and emerge from Chapter 11 by the end of 2009.
About Building Materials
Building Materials Holding Corporation -- http://www.bmhc.com/--
is one of the largest providers of building materials and
residential construction services in the United States. BMHC
serves the homebuilding industry through two recognized brands: as
BMC West, it distributes building materials and manufacture
building components for professional builders and contractors in
the western and southern states; as SelectBuild, it provides
construction services to high-volume production homebuilders in
key markets across the country.
BMHC and 11 affiliates filed for bankruptcy on June 16, 2009
(Bankr. D. Del. Lead Case No. 09-12074). Judge Kevin J. Carey
handles the case. Michael A. Rosenthal, Esq., and Matthew K.
Kelsey, Esq., at Gibson, Dunn & Crutcher LLP; and Sean M. Beach,
Esq., at Young Conaway Stargatt & Taylor, LLP, serve as bankruptcy
counsel. Paul Croci, at Peter J. Solomon Company, serves as
financial advisor. Joseph Spano at Alvarez & Marsal North
America, LLC, serves as restructuring advisor. The Debtors' tax
consultant is KPMG LLP; tax advisor is PricewaterhouseCoopers LLP;
and claims and notice agent is The Garden City Group, Inc.
As of March 31, 2009, the Debtors had total assets of $480,148,000
and total debts of $481,314,000.
CAPITAL CORP: Federal Report Blames CEO Hawker for Collapse
-----------------------------------------------------------
Scott Jason at The Modesto Bee says that a federal report blamed
senior County Bank's chief executive officer Thomas Hawker for
seeing too much blue sky while fiscal storm clouds gathered over
their customer base, but Mr. Hawker disagrees with the report.
Capital Corp. of the West is the parent company of the bank,
Mr. Jason notes.
Mr. Jason relates that the bank collapsed because of a steep
decline in the local real estate market, and the managers and
board of directors failed to fully address the impact bad loans
were having on its balance sheet.
Capital Corp of the West filed for bankruptcy on May 11, 2009
(Bankr. E.D. Calif. Case No. 09-14298). Judge W. Richard Lee
presides over the case. Paul J. Pascuzzi, Esq., at Felderstein
Fitzgerald Willoughby & Pascuzzi, serves as the Debtor's
bankruptcy counsel. Hagop T. Bedoyan, Esq., serves as counsel to
the official committee of unsecured creditors. As of June 30,
2009, Capital Corp of the West had $6,684,645 in total assets and
$57,734,000 in total liabilities. In its Chapter 11 petition, the
Company disclosed $6,789,058 in total assets and $68,096,190 in
total debts.
CATHOLIC CHURCH: Continuation of Accused Priests' Benefits Sought
-----------------------------------------------------------------
According to Bill Rochelle at Bloomberg News, the Catholic Diocese
of Wilmington Inc. is seeking permission from the Bankruptcy Court
to resume the pre-bankruptcy practice of providing housing,
pension payments and medical benefits for priests accused of being
child molesters. The Diocese says that until the priests are
formally defrocked by the Vatican, it has a duty under Canon Law
to provide care for retired priests. Even in the case of a child
abuser, the Diocese says that providing health care is a "work of
mercy." The motion says there is no "bad person exception to
Catholic charity." The Court will consider the request at a
hearing on December 4.
Bill Rochelle notes that the motion might raise issues under the
Establishment Clause of the U.S. Constitution regarding the
separation of church and state.
About the Diocese of Wilmington
The Diocese of Wilmington covers Delaware and the Eastern Shore of
Maryland and serves about 230,000 Catholics. The Delaware diocese
is the seventh Roman Catholic diocese to file for Chapter 11
protection to deal with lawsuits for sexual abuse. Previous
filings were by the dioceses in Spokane, Washington; Portland,
Oregon; Tucson, Arizona; Davenport, Iowa, Fairbanks, Alaska; and
San Diego, California.
The bankruptcy filing automatically stayed eight consecutive abuse
trials scheduled in Delaware scheduled to begin October 19. There
are 131 cases filed against the Diocese, with 30 scheduled for
trial.
The Diocese filed for Chapter 11 on Oct. 18, 2009 (Bankr. D. Del.
Case No. 09-13560). Attorneys at Young Conaway Stargatt & Taylor,
LLP, serve as counsel to the Diocese. The Ramaekers Group, LLC is
the financial advisor. The petition says assets range $50,000,001
to $100,000,000 while debts are between $100,000,001 to
$500,000,000.
CHAMPION ENTERPRISES: DIP Facility Requires Asset Sale by March 5
-----------------------------------------------------------------
Champion Home Builders Co., and Champion Enterprises, Inc.'s
Debtor-In-Possession Credit Agreement, dated as of November 15,
2009, with various financial institutions as lenders; Credit
Suisse AG, Cayman Islands Branch, as Administrative Agent and
Collateral Agent; and Credit Suisse Securities (USA) LLC as Lead
Arranger and Sole Book Runner, and Syndication Agent, requires the
Debtors to reach certain milestones in their bankruptcy cases.
Failure to achieve any of those milestones will result in an event
of default under the DIP Agreement.
Specifically, under the DIP Agreement, the Debtors are required
by:
December 22, 2009 File a motion to sell substantially
all of their assets,
January 14, 2010 Obtained an entry of an order of the
Bankruptcy Court approving bidding
procedures with respect to the sale,
February 13, 2010 Conduct an auction pursuant to the Bidding
Procedures Order
February 23, 2010 Obtain entry of an order approving a sale
of substantially all of the Debtors'
assets, and
March 5, 2010 Consummate the sale approved by the Sale
Order.
In addition, these general requirements will be applicable to all
Milestone Dates: (i) as of each Milestone Date, no Default has
occurred; and (ii) as of each Milestone Date, all of the
representations and warranties in the Loan Documents will be true
and accurate.
The Administrative Agent may waive in writing any or all of the
Milestone Requirements or Milestone Dates, except those that
expressly require the consent of the Required Lenders, in which
case the consent of the Required Lenders will also be required for
the waiver.
As reported in last week's Troubled Company Reporter, Champion
Enterprises and subsidiary Champion Home Builders Co. and certain
additional subsidiaries of the Company filed for bankruptcy on
November 15, 2009, before the United States Bankruptcy Court for
the District of Delaware.
Effective November 15, 2009, Champion Home Builders, Champion
Enterprises, and certain additional subsidiaries entered into an
Eighth Amendment, Consent and Direction to Amended and Restated
Credit Agreement with certain financial institutions and other
parties thereto as lenders and Credit Suisse, Cayman Islands
Branch, as Administrative Agent. The Eighth Amendment modifies
the Amended and Restated Credit Agreement, dated as of April 7,
2006, as amended, among the parties. The Eighth Amendment
provides, among other things, for extension of certain letters of
credit, consent to DIP financing, and certain procedures relating
to potential credit bid scenarios.
Other than the Credit Agreement, as amended, there are no material
relationships between Credit Suisse or the Lenders and the Company
or any of their respective affiliates, other than as follows: (i)
the Company and its affiliates may have customary banking
relationships with one or more of the Lenders and (ii) affiliates
of Credit Suisse have in the past provided investment banking and
investment banking-related services to the Company and certain of
its subsidiaries, and these entities may continue to do so in the
future.
Champion Home Builders as Borrower requested that the Lenders
provide a two-draw new money term loan facility in an aggregate
principal amount not to exceed $38,000,000 to fund the continued
operation of the Borrower's and the Guarantor's businesses under
Chapter 11. The Borrower has also requested that certain
financial institutions -- which may include one or more Lenders --
provide it with a synthetic letter of credit facility to provide
for the issuance of letters of credit in an aggregate stated
amount not to exceed $2,000,000 to fund the continued operation of
the Borrower's and the Guarantor's businesses and for the other
purposes, and in particular, to support the continued availability
of crucial financing to the Company's Canadian entities that serve
as guarantors.
As a condition to the agreement of the Lenders to provide the DIP
Term Loan Facility and the DIP Letter of Credit Facility, the
Borrower and the Lenders have agreed to roll up loans and letter
of credit exposure under the parties' Prepetition Credit Agreement
up to an aggregate principal and stated amount equal to
$40,000,000.
The DIP facility will mature on the earliest of (a) the 20th week
anniversary of the Closing Date of the DIP Facility or about
April 4, 2010, (b) the effective date of a reorganization plan,
(c) the date of consummation of any sale of all or a material
portion of the assets of the Obligors pursuant to section 363 of
the Bankruptcy Code, other than (i) asset sales approved by the
Required Lenders, and (ii) Permitted Asset Sales, (d) if the Final
Order has not been entered, the date that is 30 days after entry
of the Interim Order, (e) the date of termination of the
Commitments pursuant to Sections 2.5.2, 9.2 or 9.3, and (f) the
date on which the Obligations become due and payable pursuant to
Sections 9.2 or 9.3.
A full-text copy of the DIP Loan Agreement is available at no
charge at http://ResearchArchives.com/t/s?4a11
A full-text copy of the Eighth Agreement is available at no charge
at http://ResearchArchives.com/t/s?4a10
Event of Default
The Company meanwhile reports the bankruptcy filing constitutes an
event of default under its Indenture for Senior Debt Securities
dated as of November 2, 2007, as supplemented by a First
Supplemental Indenture dated as of November 2, 2007 with Wells
Fargo Bank, N.A., as trustee, pursuant to which the Company has
issued its outstanding 2.75% Convertible Senior Notes due 2037
with an aggregate principal amount outstanding of approximately
$180 million plus accrued interest. The occurrence of this event
of default under the indenture resulted in the acceleration of the
Convertible Notes. In addition, holders of other obligations of
the Company may claim default due to the bankruptcy filing.
Listing
On November 16, 2009, the New York Stock Exchange informed the
Company that it is no longer suitable for listing on the NYSE.
This decision was reached by the NYSE under NYSE Rule 802.01D in
view of the November 15, 2009 announcement by the Company of a
voluntary filing by the Company and its domestic subsidiaries for
relief under Chapter 11 of the U.S. Bankruptcy Code. All
securities of the Company listed on the NYSE, including its common
stock, will be delisted. The Company does not intend to review
this determination by the NYSE. In addition, trading in shares of
the Company's stock has been suspended on the Chicago Stock
Exchange.
About Champion Enterprises
Troy, Michigan-based Champion Enterprises, Inc. --
http://www.championhomes.com/-- operates 27 manufacturing
facilities in North America and the United Kingdom distributing
its products through independent retailers, builders and
developers. The Champion family of builders produces manufactured
and modular homes, as well as modular buildings for government and
commercial applications.
Champion Enterprises Inc. filed in Chapter 11 on Nov. 15 (Bankr.
D. Del. Case No. 09-14019).
Champion listed assets of $577 million against debt totaling
$521 million in its petition. Secured debt includes
$105.3 million on two term loans, a $26.6 million revolving
credit, a $43.1 million letter of credit facility and a
$42.1 million synthetic letter of credit facility. The company
also owes $180 million on unsecured convertible notes.
CHAMPION ENTERPRISES: Sec. 341 Meeting Set for December 23
----------------------------------------------------------
Roberta A. Deangelis, the acting U.S. Trustee for Region 3 will
convene a meeting of Champion Enterprises, Inc.'s creditors on
December 23, 2009, at 10:30 a.m. at J. Caleb Boggs Federal
Building, 2nd Floor, Room 2112, Wilmington, DE.
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.
Troy, Michigan-based Champion Enterprises, Inc., and its
subsidiaries are international manufacturers of factory-built
homes and steel-framed modular buildings, with operations in the
United States, Canada and the United Kingdom. Buildings
constructed by Champion and its subsidiaries consist of both
single and multi-module units designed for either commercial or
residential purposes. Champion products range from single-module
HUD-Code homes to sophisticated commercial structures such as
hotels.
The Company filed for Chapter 11 bankruptcy protection on
November 15, 2009 (Bankr. D. Delaware Case No. 09-14019). The
Company's affiliates also filed separate bankruptcy petitions.
James E. O'Neill, Esq., Laura Davis Jones, Esq., Mark M. Billion,
Esq., Timothy P. Cairns, Esq., at Pachulski Stang Ziehl & Jones
LLP assist Champion in its restructuring effort. The Company
listed $576,527,000 in assets and $521,337,000 in liabilities as
of October 3, 2009.
CHAMPION ENTERPRISES: Taps Pachulski Stang as Bankr. Counsel
------------------------------------------------------------
Champion Enterprises, Inc., et al., have sought permission from
the U.S. Bankruptcy Court for the District of Delaware to hire
Pachulski Stang Ziehl & Jones LLP as bankruptcy counsel, nunc pro
tunc to the Petition Date.
The firm will, among other things:
a. prepare on behalf of the Debtors necessary
applications, motions, answers, orders, reports, and
other legal papers;
b. appear in Court on behalf of the Debtors and in
order to protect the interests of the Debtors before
the Court;
c. prepare and pursue confirmation of a plan and
approval of a disclosure statement; and
d. perform other legal services for the Debtors that may
be necessary and proper in these proceedings.
Laura Davis Jones, Esq., a partner at Pachulski Stang, says that
the Firm will be paid based on the hourly rates of its
professionals:
Laura Davis Jones $825
David Bertenthal $695
Timothy P. Cairns $425
Mark M. Bilion $375
M. Lynzy Olberholzer $210
Ms. Jones assures the Court that the Firm doesn't have interests
adverse to the interest of the Debtors' estates or of any class of
creditors and equity security holders. Ms. Jones maintains that
the Firm is a "disinterested person" as the term is defined under
Section 101(14) of the Bankruptcy Code.
Troy, Michigan-based Champion Enterprises, Inc., and its
subsidiaries are international manufacturers of factory-built
homes and steel-framed modular buildings, with operations in the
United States, Canada and the United Kingdom. Buildings
constructed by Champion and its subsidiaries consist of both
single and multi-module units designed for either commercial or
residential purposes. Champion products range from single-module
HUD-Code homes to sophisticated commercial structures such as
hotels.
The Company filed for Chapter 11 bankruptcy protection on
November 15, 2009 (Bankr. D. Delaware Case No. 09-14019). The
Company's affiliates also filed separate bankruptcy petitions.
James E. O'Neill, Esq., Laura Davis Jones, Esq., Mark M. Billion,
Esq., Timothy P. Cairns, Esq., at Pachulski Stang Ziehl & Jones
LLP assist Champion in its restructuring effort. The Company
listed $576,527,000 in assets and $521,337,000 in liabilities as
of October 3, 2009.
CHAMPION ENTERPRISES: Will Not Lay Off York Plant Workers
---------------------------------------------------------
The Associated Press reports that Champion Enterprises said is not
planning any layoffs at its plant in York, Nebraska and will
continue operating regularly during its Chapter 11 bankruptcy
proceedings. The Company has 200 employees in its York plant, AP
notes.
Troy, Michigan-based Champion Enterprises, Inc., and its
subsidiaries are international manufacturers of factory-built
homes and steel-framed modular buildings, with operations in the
United States, Canada and the United Kingdom. Buildings
constructed by Champion and its subsidiaries consist of both
single and multi-module units designed for either commercial or
residential purposes. Champion products range from single-module
HUD-Code homes to sophisticated commercial structures such as
hotels.
The Company filed for Chapter 11 bankruptcy protection on
November 15, 2009 (Bankr. D. Delaware Case No. 09-14019). The
Company's affiliates also filed separate bankruptcy petitions.
James E. O'Neill, Esq., Laura Davis Jones, Esq., Mark M. Billion,
Esq., Timothy P. Cairns, Esq., at Pachulski Stang Ziehl & Jones
LLP assist Champion in its restructuring effort. The Company
listed $576,527,000 in assets and $521,337,000 in liabilities as
of October 3, 2009.
CHEMTURA CORP: Gets Nod to Reject Fin'l Service Pacts
-----------------------------------------------------
Chemtura Corp. and its units sought and obtained authority from
the Court to reject more than 25 executory contracts related to
certain financial services.
According to Gerard S. Catalanello, Esq., at Duane Morris LLP, in
New York, the Debtors have determined that leaving the Finance
Contracts in place would provide no benefit to them or their
estates.
The counterparties to the Financial Contracts are:
-- Bank of America, N.A.,
-- Calyon,
-- Citigroup,
-- Citibank N.A.,
-- Citigroup Global Markets, Inc.,
-- Duscharme McMillen & Associates, Inc.,
-- Eisner LLP,
-- Merrill Lynch & Co.,
-- Nationwide Consulting Company, Inc.,
-- Ryan, Inc., and
-- Wachovia Bank, N.A.
A complete list of the Financial Contracts is available for free
at http://bankrupt.com/misc/Chem1FS.pdf
About Chemtura Corp.
Based in Middlebury, Connecticut, Chemtura Corporation (CEM) --
http://www.chemtura.com/-- with 2008 sales of $3.5 billion, is a
global manufacturer and marketer of specialty chemicals, crop
protection products, and pool, spa and home care products.
Chemtura Corporation and 26 of its U.S. affiliates filed voluntary
petitions for relief under Chapter 11 on March 18, 2009 (Bankr.
S.D.N.Y. Case No. 09-11233). M. Natasha Labovitz, Esq., at
Kirkland & Ellis LLP, in New York, serves as bankruptcy counsel.
Wolfblock LLP serves as the Debtors' special counsel. The
Debtors' auditors and accountant are KPMG LLP; their investment
bankers are Lazard Freres & Co.; their strategic communications
advisors are Joele Frank, Wilkinson Brimmer Katcher; their
business advisors are Alvarez & Marsal LLC and Ray Dombrowski
serves as their chief restructuring officer; and their claims and
noticing agent is Kurtzman Carson Consultants LLC.
As of December 31, 2008, the Debtors had total assets of
$3.06 billion and total debts of $1.02 billion.
Bankruptcy Creditors' Service, Inc., publishes Chemtura
Bankruptcy News. The newsletter tracks the Chapter 11
proceedings undertaken by Chemtura Corp. and its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
CHEMTURA CORP: Insists on Right to Modify OPEB Plans
----------------------------------------------------
Chemtura Corp. and its units previously asked the Court for
authority to modify or terminate benefits provided under certain
non-vested other post-employment benefit or OPEB plans and
programs.
Subsequently, certain of the Debtors' former employees, in
separate filings, filed responses and objections to the Debtors'
request. The Employees are:
-- William H. Zitzer,
-- Peter Barna,
-- Charles J. Marsden,
-- Vincent A. Calarco,
-- Gerald H. Fickenscher,
-- Edward L. Hagen,
-- William Stephenson,
-- Karen Osar, and
-- John Prior.
Most of the Objectors cited Section 1114 of the Bankruptcy Code in
their responses, emphasizing that Section 1114 was specifically
enacted to protect Retiree Health and Life Insurance Benefits when
companies go into bankruptcy and prevents companies from using
bankruptcy courts as a way of "reneging" on retiree benefits.
Section 1114 provides that a "a debtor-in-possession is required
to continue to pay retiree benefits throughout reorganization
under a 'plan, fund or program' and at the levels maintained prior
to the filing of the bankruptcy case, until or unless a
modification is agreed to by the parties or ordered by the court."
The Objectors argue that the Debtors are attempting to circumvent
the prescriptions contained in Section 1114 and should not be
allowed to do so.
In addition, the Objectors contend that the Debtors' request is
procedurally deficient because it does not identify with clarity
the affected retirees.
The Chemical Workers Council of the United Food and Commercial
Workers Local 698C also filed a response to the Debtors' request.
Local 698C notes that it represents about 133 retirees and that
it did not receive any notice of the Debtors' request until
November 10, 2009.
On the Debtors' behalf, Richard M. Cieri, Esq., at Kirkland &
Ellis LLP, in New York, points out that the Debtors filed the
OPEB Termination Motion in an abundance of caution to confirm
their authority and to provide transparency with respect to their
decision to modify or terminate retiree medical and other health
benefits under Section 363 of the Bankruptcy Code, as a reasonable
exercise of their business judgment and in accordance with the
plain language of the documents that govern the non-vested OPEB
plans and programs.
Mr. Cieri specifically contends that the language governing the
Debtors' OPEB Plans is clear and unambiguous -- that the Debtors
retain the authority to modify the OPEB Plans in their sole
discretion.
Mr. Cieri discloses that the Debtors' OPEB Termination Motion
applies to eight OPEB Plans: the Uniroyal Non-Union, Uniroyal
Union, Richardson, Sistersville, Sherex, Witco, Executive, and
Nitro Plans. The Debtors have agreed to adjourn the consideration
of their Motion with respect to all or a portion of the Uniroyal
Union, Richardson, Nitro, Sistersville and Witco Plans.
With regard to the Objectors' use of Section 1114, Mr. Cieri
argues that the Section 1114 provision does not apply to the
Debtors because the Debtors have reserved the unilateral right to
amend or terminate the benefits.
"It is well-established in this circuit that, where benefits
under a plan providing for medical, surgical, or hospital care or
benefits in the event of sickness accident, disability, or death
are not vested, a debtor may modify or terminate such benefits
without complying with the requirements of Section 1114 of the
Bankruptcy Code," Mr. Cieri asserts. He adds that "employers are
free under [the Employee Retirement Income Security Act of 1974],
for any reason at any time, to adopt, modify, or terminate
welfare plans."
Barna Talks Back
Peter Barna, in reply to the Debtors, says that the Debtors are
ignoring the plain, unambiguous language of the OPEB Plans, which
provides for full medical and dental coverage without
reservation. He argues that the Debtors are attempting to
rewrite the agreements in order to avoid the protection of
Section 1114.
About Chemtura Corp.
Based in Middlebury, Connecticut, Chemtura Corporation (CEM) --
http://www.chemtura.com/-- with 2008 sales of $3.5 billion, is a
global manufacturer and marketer of specialty chemicals, crop
protection products, and pool, spa and home care products.
Chemtura Corporation and 26 of its U.S. affiliates filed voluntary
petitions for relief under Chapter 11 on March 18, 2009 (Bankr.
S.D.N.Y. Case No. 09-11233). M. Natasha Labovitz, Esq., at
Kirkland & Ellis LLP, in New York, serves as bankruptcy counsel.
Wolfblock LLP serves as the Debtors' special counsel. The
Debtors' auditors and accountant are KPMG LLP; their investment
bankers are Lazard Freres & Co.; their strategic communications
advisors are Joele Frank, Wilkinson Brimmer Katcher; their
business advisors are Alvarez & Marsal LLC and Ray Dombrowski
serves as their chief restructuring officer; and their claims and
noticing agent is Kurtzman Carson Consultants LLC.
As of December 31, 2008, the Debtors had total assets of
$3.06 billion and total debts of $1.02 billion.
Bankruptcy Creditors' Service, Inc., publishes Chemtura
Bankruptcy News. The newsletter tracks the Chapter 11
proceedings undertaken by Chemtura Corp. and its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
CHEMTURA CORP: Ryan Wants to Compel Assumption of Services Pact
---------------------------------------------------------------
Ryan, Inc., f/k/a Ryan & Company, Inc., asks the Court to compel
Chemtura Corp. to assume a certain agreement which Ryan entered
into with the Debtors.
The Debtors have paid significant taxes to numerous state and
local taxing authorities in connection with their operations. In
an effort to minimize one of the Debtors' sales and use tax
liability in the State of Arkansas, Debtor Great Lakes Chemical
Corporation and Ryan Inc. entered into a services agreement prior
to Chemtura Corp.'s acquisition of Great Lakes. Pursuant to the
terms of the Agreement, Ryan Inc. assist Great Lakes in reviewing
sales and use tax payment records to identify tax refund or tax
reduction opportunities for all periods open by law through
December 31, 2003, or other audit period.
Ryan is a tax services firm in North America, with a large
transaction tax practice in the United States and Canada.
William M. Hawkins, Esq., at Loeb & Loeb LLP, in New York,
relates that at the time Debtors filed for bankruptcy, Ryan Inc.
was working under the Services Agreement at the direction of
Chemtura staff and with corporate tax personnel. He notes that
Ryan Inc. has continued to work under the Agreement throughout
the pendency of the Debtors' Chapter 11 cases and the filing of
the Debtors' First Omnibus Contract Rejection Motion.
According to Mr. Hawkins, many projects on which Ryan Inc. is
working on are near completion and that Ryan Inc.'s services will
culminate in a tax refund, credit, or reduction of tax liability
to be awarded to Great Lakes. He notes that current estimates
for the amount of the tax refund, credit, or reduction of tax
liability to be applied against any taxes due from Great Lakes is
between $1.8 million and $2 million under the Services Agreement
and certain other agreements between Ryan Inc. and the Debtors.
Great Lakes has agreed to pay Ryan Inc. 33.3% of any tax refunds,
credits, or reductions that Great Lakes receives from taxing
authorities or vendors as compensation for the firm's services.
Mr. Hawkins tells the Court that the arrangement continued after
the Chemtura acquisition.
The Debtors subsequently filed their First Omnibus Contract
Rejection Motion, of which the Ryan Inc. Agreement was one of he
contracts the Debtors seek to reject.
Mr. Hawkins argues that the Debtors' decision to reject the Ryan
Inc. Agreement is not based on sound business judgment because
the Agreement represents a valuable asset to the Debtors'
bankruptcy estates. "Currently, it is estimated that one or more
of the estates will receive actual and in progress tax refunds,
credits, or reduction of tax liability totaling between $1.8 and
$2 million, and possibly more," Mr. Hawkins says. He adds that
"the Agreement will bring in more assets to the estate to assist
Debtors in a successful reorganization."
For these reasons, Ryan Inc. seeks the assumption of its Services
Agreement with the Debtors.
About Chemtura Corp.
Based in Middlebury, Connecticut, Chemtura Corporation (CEM) --
http://www.chemtura.com/-- with 2008 sales of $3.5 billion, is a
global manufacturer and marketer of specialty chemicals, crop
protection products, and pool, spa and home care products.
Chemtura Corporation and 26 of its U.S. affiliates filed voluntary
petitions for relief under Chapter 11 on March 18, 2009 (Bankr.
S.D.N.Y. Case No. 09-11233). M. Natasha Labovitz, Esq., at
Kirkland & Ellis LLP, in New York, serves as bankruptcy counsel.
Wolfblock LLP serves as the Debtors' special counsel. The
Debtors' auditors and accountant are KPMG LLP; their investment
bankers are Lazard Freres & Co.; their strategic communications
advisors are Joele Frank, Wilkinson Brimmer Katcher; their
business advisors are Alvarez & Marsal LLC and Ray Dombrowski
serves as their chief restructuring officer; and their claims and
noticing agent is Kurtzman Carson Consultants LLC.
As of December 31, 2008, the Debtors had total assets of
$3.06 billion and total debts of $1.02 billion.
Bankruptcy Creditors' Service, Inc., publishes Chemtura
Bankruptcy News. The newsletter tracks the Chapter 11
proceedings undertaken by Chemtura Corp. and its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
CHENIERE ENERGY: Posts $42.5 Million Net Loss for Q3 2009
---------------------------------------------------------
Houston, Texas-based Cheniere Energy, Inc. (NYSE Amex: LNG)
reported a net loss of $42.5 million, or $0.80 per share (basic
and diluted), for the third quarter 2009 compared with a net loss
of $71.6 million, or $1.51 per share (basic and diluted), during
the corresponding 2008 period.
For the nine months ended September 30, 2009, Cheniere reported a
net loss of $138.3 million, or $2.71 per share (basic and
diluted), compared with a net loss of $261.9 million, or $5.55 per
share (basic and diluted), during the corresponding 2008 period.
Included in the nine months ended September 30, 2009 is a gain on
the early extinguishment of debt of $45.4 million, or $0.89 per
share (basic and diluted).
Included in the nine months ended September 30, 2008 is a loss on
the early extinguishment of debt of $10.7 million, or $0.23 per
share (basic and diluted), and restructuring charges of $78.9
million, or $1.67 per share (basic and diluted). Results are
reported on a consolidated basis and include the Company's 90.6%
ownership interest in Cheniere Energy Partners, L.P.
From operations, Cheniere reported income of $18.3 million and a
loss of $18.8 million for the third quarter and nine months ended
September 30, 2009, respectively, compared to a loss of
$39.1 million and $181.0 million for the corresponding periods in
2008. For the third quarter and nine months ended September 30,
2009, total revenues increased $52.2 million and $89.0 million,
respectively. LNG receiving terminal revenues increased
$65.1 million and $103.3 million for the quarter and nine months
ended September 30, 2009, largely as a result of the commencement
of capacity payments under two third-party terminal use agreements
that became effective on April 1, 2009, and July 1, 2009. The
decrease in marketing and trading revenues for the quarter and
nine months ended September 30, 2009, of $12.3 million and
$13.1 million, respectively, was due to lower of cost or market
adjustments of $15.8 million and $17.0 million for LNG inventory
held at the Sabine Pass LNG receiving terminal. These losses were
partially offset by gains from physical natural gas sales,
derivative settlements and changes in the fair value of
derivatives that occurred during the third quarter and nine months
ended September 30, 2009.
LNG receiving terminal and pipeline operating expenses increased
$3.8 million and $21.5 million, respectively, for the quarter and
nine months ended September 30, 2009, and depreciation, depletion
and amortization expense increased $7.0 million and $26.3 million,
respectively, for the third quarter and nine months ended
September 30, 2009, due to the placement into service of the
Sabine Pass LNG receiving terminal and the Creole Trail pipeline
during the second half of 2008. General and administrative
expenses decreased $14.4 million and $31.2 million for the third
quarter and nine months ended September 30, 2009, primarily due to
the restructuring initiatives implemented during 2008. General
and administrative expenses included non-cash compensation
expenses of roughly $4.7 million and $13.5 million for the third
quarter and nine months ended September 30, 2009, and $9.8 million
and $23.8 million in the corresponding 2008 periods.
Interest expense increased $20.6 million in the third quarter 2009
compared to the third quarter 2008 and increased $86.5 million for
the nine months ended September 30, 2009, compared to the
corresponding 2008 period due to less interest subject to
capitalization related to construction and an increase in the
average debt balances outstanding for both periods.
Significant events during the nine months ended September 30, 2009
include:
-- the receipt of capacity reservation fee payments at Sabine
Pass LNG from Cheniere Marketing, LLC, its wholly owned
subsidiary, Total Gas & Power North America, Inc. (Total)
and Chevron U.S.A., Inc. (Chevron),
-- the substantial completion of construction and achievement
of full operability of the Sabine Pass LNG receiving
terminal,
-- a reduction of $120.4 million of convertible debt;
-- the receipt of limited partner distributions from Freeport
LNG Development; and
-- the purchase by Cheniere Marketing of LNG inventory held
at the Sabine Pass LNG receiving terminal for future sales
of natural gas.
As of September 30, 2009, the Sabine Pass LNG receiving terminal
received capacity reservation fee payments from all of its TUA
customers. The TUAs became effective in October 2008, April 2009
and July 2009 from Cheniere Marketing, Total and Chevron,
respectively.
Construction at the Sabine Pass LNG receiving terminal was
substantially complete as of the end of the third quarter 2009 and
the terminal is now fully operational with sendout capacity of 4.0
Bcf/d and storage capacity of 16.9 Bcfe. The Company's estimated
aggregate construction, commissioning and operating cost budget
through achievement of full operability is roughly $1.559 billion,
excluding financing costs. Costs are anticipated to be funded
with available cash held by Sabine Pass LNG, L.P.
As of September 30, 2009, Cheniere retired $120.4 million
aggregate principal amount of its 2.25% Convertible Senior
Unsecured Notes due 2012 in exchange for a combination of
$30.0 million cash and 4.0 million common shares through a series
of transactions.
During the second and third quarters of 2009, Cheniere Marketing
purchased, transported and successfully unloaded LNG at the Sabine
Pass receiving terminal and entered into derivative contracts to
hedge the cash flows from the future sales of this LNG inventory.
As of September 30, 2009, Cheniere Marketing had entered into a
total of roughly 7,412 BBtu of natural gas swaps through
January 31, 2011, for which it will receive fixed prices of $4.37
to $7.64 per MMBtu. Due to the nature of the hedging strategy,
earnings will be recognized in operating results as physical sales
occur, derivatives are settled or the fair value of the
derivatives change due to changes in natural gas prices. In the
interim, the LNG held in the storage tanks is recorded at the
lower of cost or market based on the NYMEX natural gas index price
for the last day of the period less basis differentials.
Liquidity and Capital Resources
At September 30, 2009, the Company had $2.78 billion in total
assets against total current liabilities of $116.2 million, long-
term debt, net of discount of $2.68 billion, long-term debt-
related parties, net of discount of $344.69 million, deferred
revenue of $34.5 million, and other non-current liabilities of
$16.9 million. At September 30, 2009, the Company had total
deficit of $407.6 million.
Unrestricted cash and cash equivalents held by Cheniere at
September 30, 2009, were $87.4 million. During the third quarter
of 2009, $34.9 million was distributed from Cheniere Partner's
distribution reserve account to Cheniere's unrestricted cash and
cash equivalents.
Restricted cash and cash equivalents at September 30, 2009, were
$266.2 million of which $259.0 million were held at Cheniere
Partners and $7.2 million were held at Cheniere. Restricted cash
held by Cheniere Partners included roughly $82.4 million in a
permanent debt service reserve and $54.9 million for four months
of interest as required by the Sabine Pass senior notes indenture,
and $121.7 million for construction, working capital and general
purposes at Sabine Pass.
Cheniere believes that it has sufficient cash and other working
capital to fund operations and other cash requirements until at
least the earliest date when principal payments may be required on
existing indebtedness, which is August 2011. The Company's
strategies to enhance near-term liquidity are focused on efforts
to exploit the TUA capacity we have reserved through Cheniere
Marketing at the Sabine Pass LNG receiving terminal. The
Company's strategies to improve its capital structure and address
maturities of its existing indebtedness may include entering into
long-term TUAs or LNG purchase and sales agreements that allow the
Company to refinance debt, issuing equity or other securities or
selling assets.
A full-text copy of the Company's Quarterly Report on Form 10-Q
for the period ended September 30, 2009, is available at no charge
at http://ResearchArchives.com/t/s?4a13
A full-text copy of the Company's earnings release is available at
no charge at http://ResearchArchives.com/t/s?4a14
A full-text copy of the Company's corporate presentation is
available at no charge at http://ResearchArchives.com/t/s?4a15
Cheniere Energy, Inc. -- http://www.cheniere.com/-- is developing
a network of three LNG receiving terminals and related natural gas
pipelines along the Gulf Coast of the United States. Cheniere is
pursuing related business opportunities both upstream and
downstream of the terminals. Cheniere is also the founder and
holds a 30% limited partner interest in a fourth LNG receiving
terminal.
CIENA CORP: Wins Auction for Nortel's Ethernet Business
-------------------------------------------------------
Ciena(R) Corporation has been selected as the successful bidder in
the auction of substantially all of the optical networking and
carrier Ethernet assets of Nortel's Metro Ethernet Networks (MEN)
business. Ciena has agreed to pay US $530 million in cash and
issue US $239 million in aggregate principal amount of 6% Senior
Convertible notes due 2017 for a total consideration of
US$769 million for the assets.
A motion to approve Ciena as the acquirer will be heard by
bankruptcy courts in the U.S. and Canada on December 2, 2009.
"These optical and carrier Ethernet assets bring exceptional
technologies, talent and scale that will accelerate Ciena's
current strategy to deliver innovative network solutions to
customers worldwide," said Gary Smith, Ciena's CEO and president.
"With this combination, we are bringing together complementary
technologies in switching and transport to create an innovative
powerhouse with the scale to challenge the industry status quo and
offer customers a practical path for transitioning to automated,
optical Ethernet-based networking. We will be intently focused on
integration as we work together to deliver the benefits of this
transaction to customers, employees and shareholders."
"Ciena provides a natural fit for Nortel's Optical and Carrier
Ethernet assets, providing an environment where our businesses'
expertise and technology can be grown and leveraged," said
Philippe Morin, president, Metro Ethernet Networks for Nortel.
"The combination of our two organizations creates an industry
powerhouse with a heritage of innovation and a shared commitment
to building and maintaining reliable networks. With today's
agreement, Nortel customers can be assured that they will be
working with a known, trusted and experienced partner who can
ensure continuity of supply and continue Nortel's heritage of
innovation."
The assets to be acquired generated approximately $1.36 billion in
revenue for Nortel in 2008 and $556 million (unaudited) in the
first six months of 2009. Ciena expects the transaction to be
significantly accretive to Ciena's results of operations in fiscal
2011. Ciena is also expected to make employment offers to at least
2,000 Nortel employees to become part of Ciena's global team of
network specialists.
The transaction is expected to close in the first calendar quarter
of 2010. Ciena has been granted early termination of the
antitrust waiting period under the Hart-Scott-Rodino Act and also
has received notification from the Canadian Competition Bureau
terminating the applicable waiting period for the proposed
transaction under the Competition Act. The transaction remains
subject to additional regional regulatory clearances and customary
closing conditions.
Details of the Convertible Notes to be Issued in the Acquisition
A portion of the aggregate consideration consists of 6% senior
convertible notes, to be issued to the sellers by Ciena with terms
substantially similar to Ciena's outstanding series of 2017 senior
convertible notes. The notes will be senior unsecured obligations
and will rank equally with all of Ciena's other existing and
future senior unsecured debt. The notes will bear interest at the
rate of 6.0% per annum, payable semi-annually, commencing six
months after the date of issuance, and will mature on June 15,
2017. The interest rate is subject to an upward adjustment up to
a maximum of 8% per annum, in the event that the volume weighted
average price of Ciena's common stock price over the measuring
period immediately preceding closing is below $13.17 per share.
The notes may be converted prior to maturity (unless earlier
redeemed) at the option of the holder into shares of Ciena common
stock at the initial conversion rate of 60.744 shares of Ciena
common stock per $1,000 in principal amount of Notes, which is
equal to an initial conversion price of approximately $16.4625 per
share, subject to customary adjustments. Prior to the notes
becoming freely transferable in the hands of the holders, which is
expected to occur approximately 60 days after the closing, Ciena
has the right to replace its obligation to issue the notes (or
redeem the notes if they have been issued) with cash in the
principal amount equal to the greater of 105% of the face amount
of the notes or 95% of the fair value of the notes (or, under
certain circumstances, at 100% of the face amount of the notes).
During that time period, Ciena must offer to use the net proceeds
of a capital raising transaction to redeem the notes at the above
price.
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.
CIRCUIT CITY: CC-Investors Sue for Payment of Proceeds
------------------------------------------------------
On November 18, 2009, CC-Investors 1995-6 filed a complaint
pursuant to Sections 105, 503(b) and 507(a)(2) of the Bankruptcy
Code, against Circuit City Stores, Inc. The Complaint seeks a
declaratory judgment that that CC-Investors is entitled to
payment of all of the insurance proceeds that are payable under a
series of insurance policies covering its property in Bethlehem,
Pennsylvania, as a result of a loss that occurred on October 28,
2008, at the property.
CC-Investors also asked the Court to direct the insurance trustee
designated under its lease with Circuit City to distribute all
insurance proceeds, that are now in the Trustee's possession or
which may come into its possession in the future, to CC-
Investors.
CC-Investors is the owner and landlord of the premises known as
4000 Townshipline Road, in Bethlehem, Pennsylvania, out of which
Premises the Debtor operated before and during its bankruptcy
filing, Jennifer M. McLemore, Esq., at Christian & Barton LLP, in
Richmond, Virginia, relates.
On September 20, 1995, Circuit City and CC-Investors entered into
a lease, wherein the Debtor leased the entire Premises on a "Net
Lease" basis for the term September 20, 1995, through and
including October 31, 2017.
Pursuant to the Lease, Circuit City was required to procure and
to maintain, at its sole cost and expense, replacement cost
insurance against loss or damage to the Premises under an "all
risk" policy naming CC-Investors as an insured party.
As of October 2008, the required insurance was in force and
effect through a series of "all risk" insurance policies issued
by Lexington Insurance Company, Axis Specialty Insurance Company,
the Underwriters at Lloyds, Liberty Mutual Insurance Company, and
Max Specialty Insurance Company. CC-Investors was named as an
Insured on the Insurance Policies covering the Premises,
according to Ms. McLemore.
On October 28, 2008, one or more sinkholes -- Loss Event -- were
discovered at the Premises. The Loss Event is a covered
occurrence under the Insurance Policies, Ms. McLemore says.
After the Loss Date, Circuit City retained certain parties --
Remediating Parties -- to begin to repair or restore the damage
sustained at the Premises as a result of the Loss Event.
The replacement costs associated with full repair or restoration
of the Premises are in the range of $3,000,000. Claims have been
submitted by both Circuit City and CC-Investors to the Insurers
seeking payment under the Insurance Policies.
Circuit City filed for bankruptcy on November 10, 2008. On March
21, 2009, the Debtor rejected the Lease under Section 365 of the
Bankruptcy Code, Ms. McLemore notes.
However, after the Loss Date, but before the Rejection Date,
Circuit City failed to pay in full the Remediating Parties, or
complete the repair and restoration of the Premises despite a
legal obligation to do so, Ms. McLemore tells the Court.
In order to protect the Premises, and despite no obligation to do
so, CC-Investors undertook to continue the repair and remediation
following Circuit City's failure. As a result, CC-Investors was
forced to pay the Remediating Parties amounts that were due to
them for work performed before the Rejection Date that Circuit
City did not pay, as well as for continued repair and restoration
work that the Debtor was legally responsible to have performed.
CC-Investors incurred actual costs totaling in excess of
$265,000, Ms. McLemore states.
Among other things, Circuit City is currently in default of
several provisions of the Lease, including failure to pay rent
and taxes, and by virtue of the fact that the Debtor rejected
and, therefore, breached, the Lease on the Rejection Date,
according to Ms. McLemore. She adds that CC-Investors timely
filed, and later amended, claims against the Debtor. For this,
CC-Investors asserts a general unsecured claim of $3,352,250, and
an administrative priority claim of $402,899. The Claim is
comprised of, inter alia, both pre- and postpetition arrearages
under the Lease and statutory Lease rejection damages.
Insurance Trust
Among other things, the Lease expressly provides for the
establishment of a third-party monitor in the event of a
significant loss and establishes specific conditions to ensure
that insurance proceeds payable as a result of a covered loss are
collected, held and paid out only for the benefit of CC-
Investors. The Lease further authorizes and directs the Insurers
who have issued coverage to make payment of all insurance
proceeds directly to the Insurance Trustee, who is appointed as
the Debtor's attorney-in-fact to endorse and deposit all
payments, Ms. McLemore relates.
Following the Loss Event, a Trustee was appointed with the
knowledge and acquiescence of Debtor, and an escrow account was
established pursuant to an agreement between the Bank of New York
Mellon and the Trustee for the purposes of depositing, accounting
for and distributing all insurance proceeds.
The Lease also authorizes the Trustee to make the insurance
proceeds realized from payment under any property casualty
insurance required under the Lease, less any actual and
reasonable expenses incurred in collecting the proceeds -- Net
Proceeds -- available to the Debtor only for the purposes of
restoring the Premises. However, the Debtor's right to
disbursement of the Net Proceeds is expressly subject to certain
provisions of the Lease.
Specifically, Section 15(a) of the Lease states that the Debtor
is entitled to disbursement of the Net Proceeds only if, at the
time of any disbursement, "no Event of Default shall exist and no
mechanic?s or materialman's liens shall have been filed and
remain undischarged and unbonded." In addition, the Trustee is
authorized to retain 10% from each disbursement until the
restoration of the Premises is fully completed and is available
for their intended use.
CC-Investors believes that the Insurers have acknowledged
coverage and are prepared to begin issuing some level of payment
of insurance proceeds to the Trustee.
Ms. McLemore notes that the Debtor claims that it is entitled to
disbursement of the insurance proceeds payable under the
Insurance Policies despite the fact that it was, at the time of
the Loss Event, and remains in default under the Lease.
CC-Investors, therefore, seeks declaratory judgment that Circuit
City is not entitled to disbursement of any insurance proceeds
payable under the Insurance Policies as a result of the Loss
Event.
About Circuit City
Headquartered in Richmond, Virginia, Circuit City Stores Inc.
(NYSE: CC) -- http://www.circuitcity.com/-- was a specialty
retailer of consumer electronics, home office products,
entertainment software and related services in the U.S. and
Canada.
Circuit City Stores together with 17 affiliates filed a voluntary
petition for reorganization relief under Chapter 11 of the
Bankruptcy Code on November 10 (Bankr. E.D. Va. Lead Case No. 08-
35653). InterTAN Canada, Ltd., which runs Circuit City's Canadian
operations, also sought protection under the Companies' Creditors
Arrangement Act in Canada.
Gregg M. Galardi, Esq., and Ian S. Fredericks, Esq., at Skadden,
Arps, Slate, Meagher & Flom, LLP, are the Debtors' general
restructuring counsel. Dion W. Hayes, Esq., and Douglas M. Foley,
Esq., at McGuireWoods LLP, are the Debtors' local counsel. The
Debtors also tapped Kirkland & Ellis LLP as special financing
counsel; Wilmer, Cutler, Pickering, Hale and Dorr, LLP, as special
securities counsel; and FTI Consulting, Inc., and Rotschild Inc.
as financial advisors. The Debtors' Canadian general
restructuring counsel is Osler, Hoskin & Harcourt LLP. Kurtzman
Carson Consultants LLC is the Debtors' claims and voting agent.
The Debtors disclosed total assets of $3,400,080,000 and debts of
$2,323,328,000 as of August 31, 2008.
Circuit City has opted to liquidate its 721 stores. It has
obtained the Bankruptcy Court's approval to pursue going-out-of-
business sales, and sell its store leases.
Bankruptcy Creditors' Service, Inc., publishes Circuit City
Bankruptcy News. The newsletter tracks the Chapter 11 proceedings
of Circuit City Stores Inc. and its debtor-affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000).
CIRCUIT CITY: National Union, Monarch Buy Claims
------------------------------------------------
The Bankruptcy Clerk recorded these additional claims that
changed hands in November 2009:
Claim Amount
Transferor Transferee Number Transferred
---------- ---------- ------ -----------
Buffalo Technology, The National Union 6766 $354,896
Inc. Fire Insurance
Company of
Pittsburgh, PA
Funai Service United States Debt 1028 1,100
Corporation Recovery LLC
Hain Capital Group, Monarch Master 1059 446,517
LLC Funding Ltd.
Hain Capital Group, Monarch Master 1382 1,261,318
LLC Funding Ltd.
Korea Export Hain Capital 14446 4,713,340
Insurance Holdings, LLC
Corporation
c/o Duane Morris
Mitsubishi Digital The Insurance 132 529,583
Electronics Company of the
America, Inc. State of
Pennsylvania
Onkyo USA Corp. The National Union 128 4,905,004
Fire Insurance
Company of
Pittsburgh, PA
Onkyo USA Corp. The National Union 2295 1,722,427
Fire Insurance
Company of
Pittsburgh, PA
THQ, Inc. Hain Capital 747 514,159
Holdings, LLC
VTECH The Insurance 1243 1,031,993
Communications, Company of the
Inc. State of
Pennsylvania
VTECH The Insurance 4110 975,901
Communications, Company of the
Inc. State of
Pennsylvania
Western Digital The Insurance 6529 1,339,779
Corporation Company of the
State of
Pennsylvania
About Circuit City
Headquartered in Richmond, Virginia, Circuit City Stores Inc.
(NYSE: CC) -- http://www.circuitcity.com/-- was a specialty
retailer of consumer electronics, home office products,
entertainment software and related services in the U.S. and
Canada.
Circuit City Stores together with 17 affiliates filed a voluntary
petition for reorganization relief under Chapter 11 of the
Bankruptcy Code on November 10 (Bankr. E.D. Va. Lead Case No. 08-
35653). InterTAN Canada, Ltd., which runs Circuit City's Canadian
operations, also sought protection under the Companies' Creditors
Arrangement Act in Canada.
Gregg M. Galardi, Esq., and Ian S. Fredericks, Esq., at Skadden,
Arps, Slate, Meagher & Flom, LLP, are the Debtors' general
restructuring counsel. Dion W. Hayes, Esq., and Douglas M. Foley,
Esq., at McGuireWoods LLP, are the Debtors' local counsel. The
Debtors also tapped Kirkland & Ellis LLP as special financing
counsel; Wilmer, Cutler, Pickering, Hale and Dorr, LLP, as special
securities counsel; and FTI Consulting, Inc., and Rotschild Inc.
as financial advisors. The Debtors' Canadian general
restructuring counsel is Osler, Hoskin & Harcourt LLP. Kurtzman
Carson Consultants LLC is the Debtors' claims and voting agent.
The Debtors disclosed total assets of $3,400,080,000 and debts of
$2,323,328,000 as of August 31, 2008.
Circuit City has opted to liquidate its 721 stores. It has
obtained the Bankruptcy Court's approval to pursue going-out-of-
business sales, and sell its store leases.
Bankruptcy Creditors' Service, Inc., publishes Circuit City
Bankruptcy News. The newsletter tracks the Chapter 11 proceedings
of Circuit City Stores Inc. and its debtor-affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000).
CIT GROUP: Carl Icahn Offers to Underwrite $6 Bil. Loan
-------------------------------------------------------
In a letter addressed to CIT Group's board of directors,
billionaire investor Carl Icahn complained that a proposed
solution hammered out by the Company and its largest creditors "is
too costly and detrimental to CIT's smaller bondholders,"
according to the Wall Street Journal.
Mr. Icahn offered to underwrite a $6 billion loan to the company
that, according to him, "would carry half the upfront expense of
similar new funding CIT has arranged for itself, the Journal
reported.
On October 31, 2009, CIT entered into an agreement with Mr. Icahn
to support its restructuring plan and secured an incremental
$1 billion committed line of credit from Icahn Capital LP to
provide supplemental liquidity for CIT as it pursues that plan.
The new line of credit may be drawn by the Company on or prior to
December 31, 2009, subject to definitive documentation and other
customary conditions, and may be drawn as debtor-in-possession
financing in the event of bankruptcy.
"Mr. Icahn has a reputation for opportunistically -- and publicly
-- zeroing in on companies in distress. In May 2008, for instance,
he launched a proxy fight to unseat Yahoo Inc.'s (YHOO) board
after that wobbly web portal rejected a takeover by Microsoft
(MSFT). Now that Mr. Icahn has thrown himself into CIT's
restructuring, there's no telling what's next for the cash-
strapped lender to small and midsized businesses," according to
the Journal.
The Journal noted that under its restructuring plan, CIT will:
* increase the amount of equity offered to holders of its
subordinated debt and include bonds that mature after 2018
that previously weren't part of the exchange offer or
reorganization plan that was announced on October 1, 2009;
* propose that maturities on new notes issued as part of the
exchange be shortened by six months and increase the
interest on new debt offered to holders of bonds sold by a
Canadian unit of CIT.
CIT is also looking for new leadership, as current CEO Jeffrey
Peek has said he will step down at the end of this year, the
report added.
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.
S.D.N.Y. 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 included
in the filings.
At September 30, 2009, CIT Group had $69,188,600,000 in total
assets against $64,067,700,000. 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: Court Enters TRO on Actions vs. Non-Debtor Unit
----------------------------------------------------------
Bankruptcy Judge Allan S. Gropper granted CIT Group Inc.'s request
for a preliminary injunction precluding lessors and indenture
trustees under "lease-in, lease-out" transactions of railcars from
exercising remedies against CIT's non-debtor subsidiary The CIT
Group/Equipment Finance, Inc., its property or other interests.
The Court enjoined the Defendants from exercising against CIT-EF's
property or other interests, any remedies based upon an event of
default triggered by the Insolvency Event until the earliest of:
(i) the Effective Date of the Debtors' Plan of Reorganization;
(ii) the occurrence of an Event of Default other than an Event
of Default caused by the Insolvency Event;
(iii) January 31, 2010, or another date as the Court may
determine upon a five-day notice and application of the
Debtors or any party-in-interest; and
(iv) the date upon which the preliminary injunction,
contemplated by the Court Order, terminates.
The Debtors concede, and the Court ruled that:
(a) the Insolvency Event constitutes an Event of Default under
each Headlease Transaction, which continues until the
Effective Date of the Debtors' Plan; and
(b) any transfer of the bills of sale in exchange for the
Required Payments have been made by the parties in good
faith and are based upon a contemporaneous exchange of
reasonably equivalent value.
If, in the case of each Headlease Transaction, the appropriate
Transaction Parties give written notice on or before November 30,
2009, of demand for payment of Stipulated Loss Value while an
Event of Default has occurred and is continuing under their
Headlease Transaction documents, CIT-EF will pay the Required
Payments to the Transaction Parties on or after November 30, 2009,
or within three days after the Payment Date, provided that, the
Required Payments are not delayed to the next calendar year.
For those Transaction Parties to Headlease Transactions in which
the Headlease Transaction documents identify a stated next payment
date on or after January 1, 2010, at the request of the
Transaction Parties, CIT-EF will accelerate the payment of the
Required Payments to an earlier date on or about December 15,
2009, but not later than December 31, 2009.
Disputes arising as to the calculation of the Required Payments
will be resolved either by the Debtors, CIT-EF and the Transaction
Parties, or by further order of the Court on an expedited basis.
The Court also directed CIT-EF not to resist, reject or delay in
responding to the Demand on the basis that (y) the Debtors' Plan
has been confirmed or become effective; or (z) CIT is no longer a
debtor under the United States Bankruptcy Code.
In connection with the satisfaction of the Required Payments, all
Transaction Parties will enter into appropriate termination
agreements with respect to the Headlease Transaction documents.
Simultaneously, the Transaction Parties will deliver appropriate
bills of sale for the applicable equipment on an "as is" and
"where is" basis, without recourse or warranty, and release all
liens and other encumbrances under the Headlease Transactions,
regardless of whether the Debtors' Plan has been confirmed or
become effective.
"The Defendants' time to move, answer or otherwise respond to the
complaint in this Adversary Proceeding is extended to and
including January 31, 2010," Judge Gropper ruled.
The Lessor Defendants are M&T Credit Services, LLC; Siemens
Financial Services, Inc.; Fifth Third Leasing Company; Wells Fargo
Bank Northwest, N.A.; Wells Fargo Bank, N.A.; INEOS Polymers,
Inc.; Wells Fargo Equipment Finance, Inc.; North America
RailLeasing #2 LLC; and BNY Midwest Trust Company. The Indenture
Trustee Defendants are Manufacturers and Traders Trust Company and
Wilmington Trust Company.
CIT voluntarily dismissed the Adversary Proceeding against INEOS
Polymers Inc., without prejudice, with each of the parties to bear
their own costs and expenses. The Dismissal is pursuant to Rule
41(a)(1) of the Federal Rules of Civil Procedure.
The Debtors also filed with the Court notices of summons of the
Adversary Complaint which were served on the Defendants on
November 9, 2009. The Summons provided the Defendants 35 days to
file an answer. A pretrial conference with respect to the
Complaint will be held on November 23, 2009, at 2:30 p.m., at the
U.S. Bankruptcy Court for the Southern District of New York,
Courtroom No. 617 at One Bowling Green in New York.
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.
S.D.N.Y. 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.
At September 30, 2009, CIT Group had $69,188,600,000 in total
assets against $64,067,700,000. 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: Posts Securities Trading Agreement With Claimholders
---------------------------------------------------------------
CIT Group Inc. and CIT Group Funding Company of Delaware
LLC filed on November 22, 2009, the Securities Trading Agreement
pursuant to the Court's interim order establishing procedures for
trading in equity securities and claims against the Debtors'
estates.
The Securities Trading Agreement outlines the covenants and
agreements relating to a claimholder's compliance with the Equity
and Claims Trading Procedures. The Debtors and the Claimholder
agree that the Agreement will be governed by, and construed in
accordance with the laws of the State of New York.
A full-text copy of the Securities Trading Agreement is available
for free at:
http://bankrupt.com/misc/CIT_SecuritiesTradingPact.pdf
The Court will convene a hearing on November 23, 2009, to consider
final approval of the Debtors' Securities Trading Motion.
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.
S.D.N.Y. 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.
At September 30, 2009, CIT Group had $69,188,600,000 in total
assets against $64,067,700,000. 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: Bondholder Objects to Confirmation of Plan
-----------------------------------------------------
Jeffrey Weinberg, a bondholder of CIT debt, asked Judge Bernstein
to deny confirmation of CIT Group Inc.'s Plan of Reorganization.
He specifically opposes the Plan provision, which says that "the
number of new bonds proposed to replace existing debt will be
determined by multiplying the number of current $1,000 bonds for
each CUSIP held by an individual by a post-bankruptcy settlement
percentage." Mr. Weinberg contended that all bondholders, large
and small, should be treated equally under the Plan.
In a separate letter filed with the Court, Chris Stovic sought the
dismissal of the Debtors' bankruptcy cases "due to controversy,
regarding the parties' rights and obligations under the Bankruptcy
Code and the Uniform Commercial Code."
"To induce the creditors to accept the petition for debt of
$64.9 billion of debt based on $71 billion dollars asset, based on
self enrichment, negligence, non-performance, contributory faults,
mismanagement with intent to impoverish the creditors," is not
acceptable, Mr. Stovic averred.
The creditors -- who are empowered under the Indentures and
Security Agreements -- have right to receive and enforce the
payment "efficient and expedition methods" of receiving their
funds, and should be paid as stated in the Notes, he said.
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.
S.D.N.Y. 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.
At September 30, 2009, CIT Group had $69,188,600,000 in total
assets against $64,067,700,000. 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: Proposes Evercore as Financial Advisors
--------------------------------------------------
CIT Group, Inc., and CIT Group Funding Company of Delaware LLC,
seek the Court's authority to employ Evercore Group L.L.C. as
investment banker and financial advisor, nunc pro tunc to the
Petition Date.
The Debtors have selected Evercore as their investment banker and
financial advisor because of its extensive general experience and
knowledge in the restructuring advisory field. Evercore and its
professionals have been retained as investment bankers and
financial advisors to debtors in a number of Chapter 11
transactions, Eric Mandelbaum, senior vice president and deputy
general counsel at CIT, relates.
Moreover, Evercore had commenced its engagement with the Debtors
to provide certain investment banking and financial advisory
services pursuant to an engagement letter agreement in April 2008.
Accordingly, Evercore has become familiar with the Debtors'
operations, Mr. Mandelbaum adds.
As investment banker and financial advisor, Evercore will:
(1) review and analyze the Debtors' businesses, operations,
capital structure and financial projections;
(2) advise and assist the Debtors regarding restructuring
alternatives, mechanics and strategy;
(3) advise and assist the Debtors in consummating
restructuring transactions, as the Debtors may determine;
and
(4) provide financial advice in developing and implementing a
Restructuring, including:
-- assisting the Debtors in developing a restructuring
plan or plan of reorganization, including a plan of
reorganization pursuant to the Bankruptcy Code;
-- advising the Debtors on tactics and strategies for
negotiating with various stakeholders regarding the
Plan;
-- providing testimony, as necessary, with respect to
matters on which Evercore has been engaged to advise
the Debtors in any proceedings under the Bankruptcy
Code that are pending before the Court; and
-- providing the Debtors with other financial restructuring
advice as Evercore and the Debtors may deem appropriate.
The Debtors will pay Evercore's professionals in accordance with
this Fee Structure, pursuant to the Engagement Letter between the
parties:
* A monthly Fee of $350,000 beginning in November 2009,
payable on the first day of each month until the earlier of
the consummation of the Restructuring transaction or the
termination of Evercore's engagement.
* Monthly Fees due and payable prior to February 28, 2010,
will be credited against the Restructuring Fee.
* A Restructuring Fee of $30 million, which will be paid under
these conditions:
-- the Restructuring Fee will be deemed earned in full on
the date definitive offering materials are first given if
a Restructuring is to be effected through out-of-court
exchange offers, of which $7.5 million will be paid and
the balance will be paid on the 120th date thereafter;
-- if the Debtors determine to effect the Restructuring
through a pre-packaged or pre-arranged Plan of
Reorganization, $7.5 million of the Restructuring Fee
will be accelerated and paid on the business day
immediately preceding the Petition Date and the balance
of the Restructuring Fee will be payable upon successful
consummation of the Restructuring;
-- in the event of a Sale of the Debtors and their
subsidiaries pursuant to Section 363 of the Bankruptcy
Code or pursuant to a Restructuring, $12.5 million of the
Restructuring Fee will be earned and payable immediately
prior to the commencement of Chapter 11 proceedings, with
$17.5 million payable upon consummation of the Sale;
-- in the event of any other restructuring transaction, the
Restructuring Fee will be payable upon successful
consummation of a restructuring; and
-- in the event that Evercore is paid a fee in connection
with a pre-packaged Plan or similar pre-arranged Plan or
Sale pursuant to Section 363 of the Bankruptcy Code, and
the Plan or Sale is not consummated, the Fee previously
paid to Evercore may be credited by the Debtors against
any subsequent Restructuring Fee that is payable or that
becomes payable by the Debtors to Evercore.
Pursuant to the Engagement Letter, the Debtors will indemnify and
hold Evercore harmless from and against any and all claims,
actions, investigations or liabilities incurred by any of them in
the performance of its duties, other than as a primary result of
the firm's gross negligence, bad faith or willful misconduct.
David Ying, a senior managing director of Evercore, contends that
his firm is a "disinterested person," as defined in Section
101(14) of the Bankruptcy Code and as modified by Section 1107(b).
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.
S.D.N.Y. 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.
At September 30, 2009, CIT Group had $69,188,600,000 in total
assets against $64,067,700,000. 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: Proposes Sullivan as Special Counsel
-----------------------------------------------
CIT Group, Inc., and CIT Group Funding Company of Delaware LLC,
seek Judge Bernstein's permission to employ Sullivan & Cromwell
LLP, as their special counsel, nunc pro tunc to the Petition Date.
Eric Mandelbaum, senior vice president and deputy general counsel
at CIT, relates that CIT Group, Inc., retained Sullivan & Cromwell
pursuant to an engagement letter dated August 12, 2009, as part of
the advisory team helping to implement the Debtors' various
restructuring initiatives, including the Debtors' Prepackaged Plan
of Reorganization. He added that Sullivan's specialized expertise
and familiarity in preserving the going concern value of the CIT's
business during the conduct of the Chapter 11 cases will be
critical in the Debtors' post-confirmation structure specified in
the Plan.
As special counsel, Sullivan will provide these services to the
Debtors:
(1) advice and assistance with respect to current and future
state and federal regulatory matters and related
correspondence, reporting, supervisory and compliance
procedures, including without limitation issues arising
under the Bank Holding Company Act of 1956, the Federal
Deposit Insurance Act, and the Federal Reserve Act, and
issues arising with respect to proposals to amend these
and other statutes relevant to CIT Group Inc. and its
direct and indirect operations;
(2) advice and assistance with respect to corporate governance
matters not directly related to the conduct of the Chapter
11 cases, including without limitation, advice to the
board of directors and executive officers as to their
duties under applicable non-bankruptcy law; advice and
assistance to the Nominating & Governance Committee of CIT
with respect to the nomination of directors and officers;
and review the constitutive documents of CIT to be
effective upon consummation of the Plan;
(3) advice and assistance with respect to compensation and
benefits matters not directly related to the conduct of
the Debtors' cases, including without limitation, the
structuring, implementation, and operation of incentive
and retention arrangements, and compliance with the
requirements and limitations imposed as result of CIT's
receipt of financial assistance under the Troubled Asset
Relief Program;
(4) securities law matters assistance, which are expected to
include ongoing reporting requirements and the preparation
for trading of the equity of the reorganized CIT on the
New York Stock Exchange; and
(5) advice and assistance with corporate finance and strategic
matters related to analysis of a potential "bank-centric"
funding model of CIT after the consummation of the Plan.
The Debtors will pay Sullivan in accordance with these hourly
rates:
Professional Hourly Rate
------------ -----------
Partners $850 to $950
H. Rodgin Cohen, partner $965
Special Counsel $740 to $905
Associates $305 to $725
Legal Assistants $165 to $290
Other timekeepers $50 to $290
The Debtors will also reimburse Sullivan for out-of-pocket
expenses.
Andrew G. Dietderich, Esq., a partner at Sullivan, assures Judge
Bernstein that his firm does not have any connection with the
Debtors, their creditors or stockholders, or any other party in
interest in the Debtors' cases.
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.
S.D.N.Y. 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.
At September 30, 2009, CIT Group had $69,188,600,000 in total
assets against $64,067,700,000. 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: Registers 5 Securities with NYSE Arca
----------------------------------------------------
Citigroup Inc. and Citigroup Funding Inc. filed with the
Securities and Exchange Commission several Form 8-A12Bs to
register these securities with the NYSE Arca pursuant to Section
12(b) of the Securities Exchange Act of 1934:
-- Index LeAding StockmarkEt Return Securities (Index
LASERSSM) Based Upon the S&P 500(R) Index Due 2012;
-- 2% Minimum Coupon Principal Protected Notes Based Upon the
Price of Gold Due 2014;
-- Upturn Notes Based Upon the iShares(R) MSCI Emerging
Markets Index Fund Due 2011;
-- Equity LinKed Securities (ELKS(R)) Based Upon the Common
Stock of Dow Chemical Company Due 2010;
-- Equity LinKed Securities (ELKS(R)) Based Upon the Common
Stock of Bank of America Corporation Due 2010
Based in New York, Citigroup Inc. (NYSE: C) --
http://www.citigroup.com/-- is organized into four major segments
-- Consumer Banking, Global Cards, Institutional Clients Group,
and Global Wealth Management. At June 30, 2009, Citigroup had
total assets of $1.84 trillion and total liabilities of
$1.69 trillion.
As reported in the Troubled Company Reporter on November 25, 2008,
the U.S. government entered into an agreement with Citigroup to
provide a package of guarantees, liquidity access, and capital.
The U.S. Treasury and the Federal Deposit Insurance Corporation
agreed to provide protection against the possibility of unusually
large losses on an asset pool of roughly $306 billion of loans and
securities backed by residential and commercial real estate and
other such assets, which will remain on Citigroup's balance sheet.
As a fee for this arrangement, Citigroup issued preferred shares
to the Treasury and FDIC. The Federal Reserve agreed to backstop
residual risk in the asset pool through a non-recourse loan.
Citigroup, the third-biggest U.S. bank, received $52 billion in
bailout aid. Other bailed-out banks, including Bank of America
Corp., Wells Fargo & Co., have pledged to repay TARP money.
JPMorgan Chase & Co., Goldman Sachs Group Inc. and Morgan Stanley,
repaid TARP funds in June.
Citigroup is one of the banks that, according to results of the
government's stress test, need more capital.
CITIZENS REPUBLIC: DBRS Confirms Issuer Rating at B (High)
----------------------------------------------------------
DBRS has confirmed the ratings of Citizens Republic Bancorp, Inc.
(Citizens or the Company), and its related entities, including its
Issuer & Senior Debt rating of B (high). At the same time, DBRS
confirmed Citizens' banking subsidiaries' Deposits & Senior Debt
rating at BB. All ratings were placed on Negative Trend.
Today's rating actions conclude a review with Negative
Implications initiated by DBRS in August 2009. The confirmation
reflects Citizens continuing struggle with steep asset quality
erosion, lack of profitability, and DBRS's expectation of
sustained elevated credit costs and expenses over the intermediate
term. Persistent steep credit deterioration within the Company's
commercial real estate (CRE) portfolio and more recently within
its commercial and industrial (C&I) and residential mortgage
portfolios, have placed considerable pressure on the Company's
credit fundamentals, and to some extent has reduced its financial
flexibility. Since Q2 2008, Citizens' has evidenced high credit
costs, which in combination with various non-recurring charges has
resulted in 6 consecutive quarterly losses. Nonetheless, the
addition of $198 million of common equity, generated from
Citizens' Q3 2009 exchange of subordinated notes and enhanced
trust preferred securities for common stock, bolstered its loss
absorption capacity.
Citizens' ratings also reflect its large CRE concentration (3.69
times TCE), highly stressed Midwestern footprint, adequate
liquidity, and well-established community banking and deposit
franchise. The Negative trend reflects DBRS's view that
significant amounts of loss content remains embedded within
Citizens' loan portfolio. DBRS comments that escalating asset
quality erosion and/or a material contraction in capital may
negatively pressure ratings.
The rating actions follow the Company's Q3 2009 results, which
reflect a lower sequential quarterly loss, driven largely by the
absence of its Q2 2009 $266 million goodwill impairment charge.
During Q3 2009, the company reported a $62 million loss to common
shareholders, up from a $353 million loss for the prior quarter.
On a core basis, which excludes non-recurrent gains/losses and
charges, Q3 2009 results reflected a 22% decrease in provisions
for loan loss reserves, a moderate increase in revenues, partially
offset by a slight increase in non-interest expense. Net-interest
income increased 7% and reflected a 24 basis points (bps) widening
of net interest margin (NIM) to 2.97%, partially offset by a $346
million decrease in average earning assets. Citizens' margin
expansion reflected wider loan spreads, and lower deposit costs,
spurred by a decrease in brokered deposit balances. Citizens'
core non-interest income, which excludes a Q3 2009 $16 million
debt extinguishment charge and losses on loans held for sale for
both quarters, was up considerably, due to higher deposit service
charges, trust fees, and brokerage and investment fees, partially
offset by lower mortgage and other loan income. Citizens' core
non-interest expense (excludes the goodwill impairment charge and
the Company's Q2 2009 $5.6 million FDIC special assessment fee)
increased slightly reflecting higher salaries and employee
benefits, and OREO expenses.
The Company's steep asset quality erosion reflects the severely
challenged Midwestern economy, especially within the state of
Michigan, where unemployment far exceeds the national average.
Citizens' high credit costs reflect its problematic CRE portfolio
and to a lesser extent C&I and residential mortgages. At
September 30, 2009, Citizen's non-performing assets (NPA)
represented a very high 7.34 % of loans versus 7.13% at June 30,
2009. Meanwhile net charge-offs (NCO) increased and represented
an elevated 3.41% of average loans, up from 2.30% for the prior
quarter. The bulk of the increase in NCOs reflected four large
CRE loans and four large C&I loans. Although they should not be
considered trends, DBRS noted two positive signs for the quarter.
Specifically, NPAs were relatively flat on an absolute basis and
the pace of increasing commercial watchlist loans slowed. The
allowance for loan loss reserves was relatively modest at 56% of
NPAs.
The Q3 2009 exchange of debt for common stock enhanced the
Company's capital position. The exchange increased the Company's
tangible common equity, Tier 1 and Total capital ratios to 6.75%,
12.83% and 14.23%, respectively, from 5.14%, 11.81% and 13.91%, at
June 30, 2009. Nonetheless, DBRS notes that Citizens' financial
flexibility remains somewhat stressed and its ability to raise
additional capital may be constrained. DBRS notes that Citizens'
capital position includes $300 million of TARP related preferred
stock.
The Company's liquidity position remains adequate. Citizens' core
deposits represent 96% of net loans (at June 30, 2009). Citizens'
securities portfolio, which represents 19% of total assets, and
access to the Federal Home Loan Bank and the Federal Reserve
Discount Window round out its liquidity profile.
CLOROX COMPANY: Board Adopts Amended and Restated Bylaws
--------------------------------------------------------
The Clorox Company reports that on November 17, 2009, its Board of
Directors adopted Amended and Restated Bylaws of the Company,
effective as of the same date. The changes to the Bylaws:
* Article I, Section 3 (Notice of Meetings): This section was
amended to reflect recent changes to the Delaware General
Corporations Law that allow the Board to fix one record date
for determining stockholders entitled to notice of a
stockholder meeting and a separate record date for
determining stockholders entitled to vote at the meeting.
* Article I, Section 5 (Organization): This section was
amended to update officers and designees who may call a
stockholder meeting to order and act as the Chairman.
* Article I, Section 9 (Stock List): This section was amended
to authorize certain officers to prepare the stock list for
stockholder meetings, to allow examination of the stock list
when meetings are held by means of remote communication and
to accommodate a record date closer to the meeting date.
* Article I, Section 10(a)(ii). (Notice of Stockholder
Business and Nominations): The advance notice provisions of
this section were amended to provide that if the date of the
annual meeting changes by more than 30 days from the
anniversary date of the previous years' meeting, the
stockholder notice is due not earlier than the close of
business on the 120th day prior to the annual meeting and
not later than the close of business on the later of the
90th day prior to the annual meeting or the 10th day
following the day on which the Company first publicly
discloses the date of the meeting. The Board did not amend
the advance notice deadlines if the annual meeting takes
place as scheduled. The amendments also clarify that the
advance notice provisions in the Bylaws do not apply to
stockholder nominations or proposals submitted for inclusion
in the Company proxy statement made in compliance with Rule
14a-8 under the Exchange Act.
* Article I, Section 10(b) (Notice of Stockholder Business and
Nominations): This section was amended to require that
notice by a stockholder for a nomination at a special
meeting be delivered to the Company not earlier than the
close of business on the 120th day prior to the special
meeting and not later than the close of business on the
later of the 90th day prior to the special meeting or the
10th day following the day on which the Company first
publicly discloses the date of the meeting.
* Article I, Section 10 (a)(ii)(4) (Notice of Stockholder
Business and Nominations): This section was amended to
update information required in a stockholder notice when the
stockholder intends to propose a nomination or other
business item at a stockholder meeting. Among other changes,
the amendments require a stockholder to provide information
about any agreement, arrangement or understanding that has
the effect or intent of mitigating loss, managing risk or
benefit from changes in the share price of any class or
series of shares in the Company, or maintaining, increasing
or decreasing voting power with respect to shares of the
Company, including any derivative or short positions, profit
interests, options, hedging transactions and borrowed or
loaned shares.
* Article IV, Section 5 (Chief Executive Officer): This
section was amended to eliminate a reference to the Chief
Executive Officer presiding at Board meetings in the
Chairman's absence.
* Article V, Section (Certificate of Stock) and Section 2
(Transfers of Stock): These sections were amended to reflect
that the Company may issue uncertificated shares.
* Article VI (Notices) and Article VI (Waivers): These
sections were amended to apply only to waivers given by and
notices given to stockholders and directors in order to
avoid confusion with third party arrangements.
* Article VII, Section 5 (Contracts, Etc. How Executed): This
section was amended to update processes relating to
contracts.
In addition, the Bylaws reflect certain immaterial language
changes, conforming changes and other technical edits and updates.
Based in Oakland, California, The Clorox Company (NYSE: CLX) --
Http://www.TheCloroxCompany.com/ -- manufactures and markets
consumer products with fiscal year 2009 revenues of $5.5 billion.
Clorox markets some of consumers' most trusted and recognized
brand names, including its namesake bleach and cleaning products,
Green Works(R) natural cleaners, Armor All(R) and STP(R) auto-care
products, Fresh Step(R) and Scoop Away(R) cat litter, Kingsford(R)
charcoal, Hidden Valley(R) and K C Masterpiece(R) dressings and
sauces, Brita(R) water-filtration systems, Glad(R) bags, wraps and
containers, and Burt's Bees(R) natural personal care products.
With approximately 8,300 employees worldwide, the company
manufactures products in more than two dozen countries and markets
them in more than 100 countries.
As of September 30, 2009, Clorox had $4.59 billion in total
assets, including $237 million in cash and cash equivalents,
against $4.64 billion in total liabilities, resulting in
stockholders' deficit of $47 million. The September 30 balance
sheet also showed strained liquidity: Clorox had $1.20 billion in
total current assets against $1.86 billion in total current
liabilities.
COMMERCIAL VEHICLE: May Offer $200 Million in Securities
--------------------------------------------------------
Commercial Vehicle Group, Inc., filed with the Securities and
Exchange Commission a shelf registration statement on Form S-3,
pursuant to which the Company may offer and sell, from time to
time, in one or more offerings, any combination of debt and equity
securities having a total initial offering price not exceeding
$200,000,000.
The Company also registered 75,076 shares of common stock and
745,000 shares of common stock underlying warrants to purchase
common stock that may be sold by selling stockholders from time to
time. The maximum aggregate offering for the common stock is
$406,162. The maximum aggregate offering for the common stock
underlying warrants to purchase common stock is $4,030,450. The
Company will not receive any proceeds from the sale of common
stock by the selling stockholders.
The prospectus describes some of the general terms that may apply
to these securities and the general manner in which they may be
offered. Each time the Company offers securities, it will provide
one or more supplements to the prospectus that contains specific
information about the offering and the terms of any securities
being sold.
The Company's common stock is traded on The NASDAQ Global Select
Market under the symbol "CVGI." On November 18, 2009, the last
reported sale price of the common stock on The NASDAQ Global
Select Market was $5.36 per share.
A full-text copy of the shelf registration statement is available
at no charge at http://ResearchArchives.com/t/s?4a16
3rd Quarter 2009
Commercial Vehicle Group reported revenues of $110.8 million for
the third quarter ended September 30, 2009, compared to revenues
of $192.9 million for the third quarter of 2008. Net loss was
($15.9) million for the quarter, or ($0.73) per diluted share,
compared to ($2.6) million, or ($0.12) per diluted share, in the
prior-year quarter. Fully diluted shares outstanding for the
quarter were 21.7 million compared to 21.5 million for the prior-
year period.
Revenues for the quarter compared to the prior-year period
decreased by roughly $82.1 million, or 42.5%, due primarily to
the global economic decline impacting the Company's North
American, European and Asian end markets. Operating income for
the quarter compared to the prior-year period decreased by roughly
$8.3 million, or 10.2% of the change in revenues for the same
period.
The third quarter results include roughly $1.2 million of non-cash
expense for the mark to market of the Company's forward foreign
exchange contracts and $3.4 million in one-time financing, legal
and other fees and expenses related to the Company's debt exchange
completed in August 2009.
The Company did not have any outstanding borrowings under its
asset-based revolver as of September 30, 2009.
At September 30, 2009, the Company had $275.3 million in total
assets against $281.4 million in total liabilities, resulting in
stockholders' deficit of $6.1 million.
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?4a18
A full-text copy of the Company's earnings release is available at
no charge at http://ResearchArchives.com/t/s?4a19
Restatement
On November 20, 2009, the Company filed amendments to its
quarterly report for the period ended March 31, 2009, and June 30,
2009, and its annual report for the period ended December 31,
2008.
The Company filed the 10-Q and the 10-K Amendments to correct (i)
an error in the presentation of its borrowings under its prior
revolving credit facility and (ii) an error in the presentation in
its consolidating guarantor and non-guarantor financial statements
in the Original Form 10-Qs and 10-K filed with the Securities and
Exchange Commission. The Company also filed the 10-K Amendment to
correct an error in the presentation of pre-tax income from
operations in an exhibit to the Original Form 10-K.
The Company said the borrowings under its prior revolving credit
facility should have been classified as a current liability as a
result of its use of the proceeds obtained from the new Loan and
Security Agreement entered into on January 7, 2009, which was
required to be classified as a current liability, to extinguish
the prior revolving credit facility. As a result, the
December 31, 2008 balance sheet presented in these condensed
consolidated financial statements has been corrected to properly
classify approximately $14.8 million borrowed under the prior
revolving credit facility as a current liability. This amount was
previously presented as a component of long-term debt, net of
current maturities. This error had no impact on its consolidated
statement of operations or statement of cash flows. After
considering both the quantitative effect of the correction and
qualitative considerations, the Company concluded that the error
was not material to its previously filed financial statements.
A full-text copy of the March 10-Q Amendment is available at no
charge at http://ResearchArchives.com/t/s?4a1a
A full-text copy of the June 10-Q Amendment is available at no
charge at http://ResearchArchives.com/t/s?4a1b
A full-text copy of the December 10-K Amendment is available at no
charge at http://ResearchArchives.com/t/s?4a1c
About Commercial Vehicle Group
New Albany, Ohio-based Commercial Vehicle Group, Inc., (Nasdaq:
CVGI) supplies fully integrated system solutions for the global
commercial vehicle market, including the heavy-duty truck market,
the construction and agricultural markets, and the specialty and
military transportation markets. The products include static and
suspension seat systems, electronic wire harness assemblies,
controls and switches, cab structures and components, interior
trim systems (including instrument panels, door panels,
headliners, cabinetry and floor systems), mirrors and wiper
systems specifically designed for applications in commercial
vehicles. The Company has facilities located in the United States
in Arizona, Indiana, Illinois, Iowa, North Carolina, Ohio, Oregon,
Tennessee, Virginia and Washington and outside of the United
States in Australia, Belgium, China, Czech Republic, Mexico,
Ukraine and the United Kingdom.
* * *
In September 2009, Standard & Poor's Ratings Services raised its
corporate credit rating on Commercial Vehicle Group to 'CCC+' from
'SD' (selective default). S&P also raised its rating on the
company's 8% senior unsecured notes to 'CCC' from 'D' (default).
The recovery rating on this debt is unchanged at '5', indicating
that lenders can expect modest (10% to 30%) recovery in the event
of a payment default.
In August 2009, Moody's changed Commercial Vehicle Group's
probability of default rating to Caa2/LD following the company's
exchange of roughly $52.2 million of 8.0% notes. Moody's
considers this transaction a distressed exchange due to the nature
of the capital restructuring as well as CVGI's weak credit
profile. The LD designation signifies a limited default. The PDR
will be changed to a Caa2 rating and the LD rating will be removed
after three days.
COMPUTER SYSTEMS: Court Extends Schedules Filing Until Dec. 30
--------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Ohio
extended, at the behest of Computer Systems Company, Inc., and R4,
LLC, the deadline for the filing of schedules of assets and
liabilities, schedule of executory contracts and unexpired leases,
and statement of financial affairs by 30 days until December 30,
2009.
The Debtors said that given the size and complexity of their
businesses and financial affairs, and the critical matters that
their management and professionals were required to address prior
to commencement of these Chapter 11 cases, and must address in the
early days of these cases, the Debtors weren't in a position to
complete the Schedules and Statements as of the Petition Date and
requires an additional 30 days after the Petition Date to complete
this task.
Strongsville, Ohio-based Computer Systems Co., also known as CSC
Group, is a provider of information management software for
health-care providers. The Company and its subsidiary, R4, LLC,
filed for Chapter 11 bankruptcy on November 13, 2009 (Bankr. N.D.
Ohio Case No. 09-20802). Computer Systems said that its assets
were $49.1 million and debt was $33.9 million at September 30,
2009.
COMPUTER SYSTEMS: Sec. 341 Meeting Set for December 11
------------------------------------------------------
The U.S. Trustee for Region 9 will convene a meeting of Computer
Systems Co. and R4, LLC's creditors on December 11, 2009, at 10:00
a.m. at 341 Meeting, H.M.M. US Courthouse, 201 Superior Ave, 6th
Floor, Cleveland, OH 44114.
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
Debtors under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.
Strongsville, Ohio-based Computer Systems Co., also known as CSC
Group, is a provider of information management software for
health-care providers. The Company and its subsidiary, R4, LLC,
filed for Chapter 11 bankruptcy on November 13, 2009 (Bankr. N.D.
Ohio Case No. 09-20802). Computer Systems said that its assets
were $49.1 million and debt was $33.9 million at September 30,
2009.
COMPUTER SYSTEMS: Taps Taft Stettinius as Bankruptcy Counsel
------------------------------------------------------------
Computer Systems Company, Inc., and R4, LLC, have sought
permission from the U.S. Bankruptcy Court for the Northern
District of Ohio to employ Taft Stettinius & Hollister LLP as
bankruptcy counsel, nunc pro tunc to the Petition Date.
Taft Stettinius will represent and assist the Debtors in their
restructuring efforts.
Bruce J.L. Lowe, a member at Taft Stettinius, says that the Firm
will be paid based on the hourly rates of its professionals:
Bruce J. L. Lowe, Member $390
William J. Stavole, Member $390
Kimberlie L. Huff, Member $255
Richard L. Ferrell, Associate $275
Julie A. Crocker, Associate $190
Mr. Lowe assures the Court that the Firm doesn't have interests
adverse to the interest of the Debtors' estates or of any class of
creditors and equity security holders. Mr. Lowe maintains that
the Firm is a "disinterested person" as the term is defined under
Section 101(14) of the Bankruptcy Code.
Strongsville, Ohio-based Computer Systems Co., also known as CSC
Group, is a provider of information management software for
health-care providers. The Company and its subsidiary, R4, LLC,
filed for Chapter 11 bankruptcy on November 13, 2009 (Bankr. N.D.
Ohio Case No. 09-20802). Computer Systems said that its assets
were $49.1 million and debt was $33.9 million at September 30,
2009.
COMSTOCK HOMEBUILDING: NASDAQ OKs Transfer to Capital Market
------------------------------------------------------------
Comstock Homebuilding Companies, Inc., on November 16, 2009,
received notice from The NASDAQ Stock Market LLC that the NASDAQ
Listing Qualifications Panel had granted the Company's request to
transfer the listing of its common stock from The NASDAQ Global
Market to The NASDAQ Capital Market, which took effect with the
open of business on Wednesday, November 18, 2009. The Company's
securities will continue to trade on The NASDAQ Stock Market under
the symbol "CHCI."
On August 24, 2009, the Company received notice that it no longer
satisfied the $10 million stockholders' equity requirement for
continued listing on The NASDAQ Global Market. At a hearing
before the Listing Qualifications Panel on September 23, 2009, the
Company requested the transfer of its listing to The NASDAQ
Capital Market pursuant to an exception. The NASDAQ Capital
Market stockholders' equity requirement is $2.5 million.
On November 13, 2009, the Company filed its Quarterly Report on
Form 10-Q for the period ended September 30, 2009 evidencing
stockholders' equity in excess of the minimum $2.5 million
threshold. Pursuant to the Panel's recent decision, the Company's
continued listing on the Capital Market is subject to, among other
things, the Company evidencing continued compliance with the
$2.5 million stockholders' equity requirement. The Company is
awaiting acknowledgement from NASDAQ that it has satisfied the
$2.5 million stockholders' equity requirement for continued
listing on The NASDAQ Capital Market.
On November 12, 2009, the Company received a notice from NASDAQ
Stock Market Listing Qualifications indicating that the Company's
closing bid-price was under $1.00 for the 30 trading days ended
November 11, 2009. As a result, NASDAQ issued a notice of default
related to this requirement and provided the Company until May 11,
2010, to regain compliance. To regain compliance the closing bid-
price must remain over $1.00 for a minimum of 10 consecutive
trading days prior to May 11, 2010.
About Comstock Homebuilding
Established in 1985, Comstock Homebuilding Companies, Inc.
(Nasdaq: CHCI) -- http://www.comstockhomebuilding.com/-- is a
publicly traded, diversified real estate development firm with a
focus on a variety of for-sale residential products. The company
currently actively markets its products under the Comstock Homes
brand in the Washington, D.C. and Raleigh, N.C. metropolitan
areas.
COMSTOCK HOMEBUILDING: Parker Chandler Unit Files for Chapter 7
---------------------------------------------------------------
Comstock Homebuilding Companies, Inc., reports that on
November 12, 2009, Buckhead Overlook, LLC, Post Preserve, LLC, and
Parker Chandler Homes, LLC, filed bankruptcy petitions in the
United States Bankruptcy Court for the Northern District of
Georgia. Parker Chandler Homes were all subsidiaries of Comstock
Homebuilding Companies, Inc., and Parker Chandler Homes, LLC, was
formerly known as Comstock Homes of Atlanta, LLC. The Chapter 7
Petitions were filed in furtherance of the Company's Strategic
Realignment Plan that includes the liquidation of Parker Chandler
Homes and the winding down of all operations in the Atlanta
market.
The primary goals of the Company's Strategic Realignment Plan are
the elimination of debt and settlement of obligations of the
Company to enable the Company to refocus its operations on its
core markets and to reposition the Company for improved operating
results in 2010 and beyond.
"We are committed to taking the steps necessary to return Comstock
Homebuilding to profitability and we look forward to the
opportunities that lay ahead," said Christopher Clemente,
Comstock's Chairman and Chief Executive Officer. "We are pleased
with the progress we have made in the past several months in terms
of executing our Strategic Realignment Plan and we are encouraged
by signs that market conditions are beginning to improve."
Comstock acquired Parker Chandler in January 2006 for an
undisclosed price. At the time of the acquisition, the Company
said the deal gives it additional geographic diversification and a
solid position in one of the strongest homebuilding markets in the
Southeast, adding roughly 1,600 lots (mostly single family
detached lots) to the Company's pipeline of land inventory.
About Comstock Homebuilding
Established in 1985, Comstock Homebuilding Companies, Inc.
(Nasdaq: CHCI) -- http://www.comstockhomebuilding.com/-- is a
publicly traded, diversified real estate development firm with a
focus on a variety of for-sale residential products. The company
currently actively markets its products under the Comstock Homes
brand in the Washington, D.C. and Raleigh, N.C. metropolitan
areas.
COMSTOCK HOMEBUILDING: Posts $28.1MM Net Loss for 9 Mos. to Sept.
-----------------------------------------------------------------
Comstock Homebuilding Companies, Inc., reported net income of
$2,279,000 for the three months ended September 30, 2009, from a
net loss of $2,206,000 for the same period a year ago. The
Company posted a net loss of $28,108,000 for the nine months ended
September 30, 2009, from a net loss of $12,284,000 for the same
period a year ago.
Total revenue for the three months ended September 30, 2009, was
$12,624,000 from $13,073,000 for the same period a year ago.
Total revenue for the nine months ended September 30, 2009, was
$21,111,000 from $41,452,000 for the same period a year ago.
At September 30, 2009, the Company had $94,526,000 in total assets
against $91,950,000 in total liabilities. At September 30, 2009,
the Company had $152,384,000 in accumulated deficit and
shareholders' equity of $2,576,000.
The Company delivered 40 units in the quarter at an average
revenue per unit of approximately $281,000 as compared to 44 units
at an average revenue per unit of $279,000 during the three months
ended September 30, 2008.
"We continue to be focused on taking the steps necessary to return
Comstock to profitability on a regular basis" Christopher
Clemente, Comstock's Chairman and Chief Executive Officer, said on
November 9. "While we still have work to do, the results in the
third quarter are the result of the effort we began some 2 years
ago to weather the economic storm affecting our industry and to
position our company to rebuild value for our shareholders. We
are cautiously optimistic that the cycle has bottomed and that
conditions will continue to show signs of improvement in the
coming quarters."
Bankruptcy Warning
In its Form 10-Q filing with the Securities and Exchange
Commission, Comstock said it requires capital to operate, to post
deposits on new deals, to purchase and develop land, to construct
homes, to fund related carrying costs and overhead and to fund
various advertising and marketing programs to generate sales. The
Company said its overall borrowing capacity is constrained by
various loan covenants. There is no assurance either that
Comstock will return to compliance in the future or that its
lenders will continue to refrain from exercising their rights
related to its covenant violations.
"In the event our banks discontinue funding, accelerate the
maturities of their facilities, refuse to waive future covenant
defaults or refuse to renew the facilities at maturity we could
experience an unrecoverable liquidity crisis in the future. We
can make no assurances that cash advances available under our
credit facilities, refinancing of existing underleveraged projects
or access to public debt and equity markets will provide us with
sufficient capital to meet our existing and expected operating
capital needs in 2009. If we fail to meet our cash flow
requirements we may be required to seek bankruptcy protection or
to liquidate," Comstock said.
At September 30, 2009, the Company and its subsidiaries had
$9.6 million of debt which had either already matured or have
payment obligations during the remainder of 2009. Net of the debt
related to the Wachovia and M&T Bank foreclosure agreements
executed in the third quarter of 2009, the Company is the
guarantor of $54.5 million of debt including that of subsidiaries.
"As a result, any significant failure to negotiate renewals and
extensions to its debt obligations would severely compromise the
Company's liquidity and would jeopardize the Company's ability to
satisfy its capital requirements. This inability to meet our
capital requirements could result in our need to seek bankruptcy
protections either for certain subsidiary entities or for Company
as a whole," Comstock said.
At September 30, 2009, Comstock had $900,000 in unrestricted cash
and $3.4 million in restricted cash. Included in its restricted
cash balance, to which the Company has no access, is a
$3.0 million deposit with an insurance provider as security for
future claims. "Our access to working capital is very limited and
our debt service obligations and operating costs for 2009 exceed
our current cash reserves. If we are unable to identify new
sources of liquidity and/or successfully modify our existing
facilities, we will likely deplete our cash reserves and be forced
to file for bankruptcy protection. There can be no assurances
that in that event we would be able to reorganize through
bankruptcy, and we might be forced into a trustee managed
liquidation of our assets," according to Comstock.
Comstock retained external consultants in the second quarter of
2008 to act as a financial advisor to the Company in exploring
debt restructuring and alternatives for raising additional capital
for the Company. In connection with the exploration of available
debt restructuring alternatives, the Company then elected to cease
making certain scheduled interest or principal curtailment
payments while it attempted to negotiate modifications or other
satisfactory resolutions with its lenders. During 2008 the
Company reported several loan covenant violations and notices of
default from several of its lenders. The violations and notices
led to foreclosures of certain assets and have resulted in certain
guarantee enforcement actions being initiated against the Company
where no foreclosures have taken place. Many of the Company's
loan facilities contain Material Adverse Effect clauses which, if
invoked, could create an event of default under those loans. In
the event certain of the Company's loans were deemed to be in
default as a result of a Material Adverse Effect, the Company's
ability to meet its cash flow and debt obligations would be
compromised. During the fourth quarter of 2008 the Company
discontinued its relationship with its external advisory
consultants. The Company continued to negotiate with its lenders
into 2009 and has continued to report debt restructurings as they
occur.
Strategic Realignment Plan
Due to the extended nature of the economic conditions affecting
the home building industry the Company, in early 2009, formulated
and began implementing its Strategic Realignment Plan, a strategy
for eliminating debt and settling obligations of the Company with
the goal of refocusing the Company's operations on key projects in
its core market of Washington, DC and Raleigh, NC while reaching
amicable agreements with all of the Company's major creditors
before year end 2009 to position the Company for improved
operating results in 2010 and beyond.
The Company has made significant progress in that regard. As of
September 30, 2009, the company had successfully negotiated
settlements with most of its secured lenders regarding a majority
of the loans guaranteed by the Company and had reduced the
outstanding balance of overall debt from $102.8 million at
December 31, 2008, to $83.4 million at September 30, 2009. In
most cases the Company was released from the obligations under
each subject loan in return for its agreement not to contest the
foreclosure of the real estate assets that it wished to dispose of
and that secured each subject loan. In certain cases the Company
provided the lender a non-interest bearing deficiency note in an
amount equal to a small fraction of the original debt with a term
of three years. Due to the time required to complete the
requisite foreclosures on certain real estate assets, the
foreclosure actions were not all complete at September 30, 2009
and will occur in future periods.
Fifth Third Bank Forbearance
On November 10, 2009, Comstock Homes of Raleigh, LLC, and Comstock
Homebuilding Cos. entered into a Forbearance and Conditional
Release Agreement with Fifth Third Bank, an Ohio banking
corporation, with respect to the $1.3 million outstanding
principal under the Borrower's secured Brookfield project loan.
Under the terms of the Agreement, the Lender has released the
Borrower from its obligations relating to the Loan contemporaneous
with the execution by the Borrower of statutory foreclosure
waivers allowing for the expeditious foreclosure of the single
family building lots secured by the Loan. If the Lender
successfully forecloses on the Collateral by February 28, 2010,
subject to extension, the Lender shall receive a non-interest
bearing unsecured deficiency note in the amount of $25,000 with a
three-year term from the Company. The Deficiency Note shall be
fully subordinate to the repayment of the secured lenders of the
Company's subsidiaries. Should the Lender fail to foreclose on
the Collateral on or before February 28, 2010, subject to
extension, the Company will not be required to deliver the
Deficiency Note but the release issued by the Lender will
nevertheless remain effective upon its eventual foreclosure of the
Collateral.
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?4a1e
A full-text copy of the Company's earnings release is available at
no charge at http://ResearchArchives.com/t/s?4a1f
About Comstock Homebuilding
Established in 1985, Comstock Homebuilding Companies, Inc.
(Nasdaq: CHCI) -- http://www.comstockhomebuilding.com/-- is a
publicly traded, diversified real estate development firm with a
focus on a variety of for-sale residential products. The company
currently actively markets its products under the Comstock Homes
brand in the Washington, D.C. and Raleigh, N.C. metropolitan
areas.
CONEXANT SYSTEMS: To Retire $61.4MM Sr. Secured Debt in December
----------------------------------------------------------------
Conexant Systems, Inc., will redeem the remaining $61.4 million of
outstanding floating rate senior secured notes due in November
2010 on December 18, 2009. The notes will be redeemed at a cash
redemption price equal to 101% of the principal amount of the
notes, plus accrued and unpaid interest to the redemption date.
The Company issued the redemption notice pursuant to Article 5 of
the indenture dated as of November 13, 2006, between Conexant
Systems, Inc., and The Bank Of New York Trust Company, N.A. (to
the interests of which as indenture trustee The Bank of New York
Mellon Trust Company, N. A., has succeeded) relating to the
Company's Floating Rate Senior Secured Notes due 2010.
The Notes are scheduled to mature on November 13, 2010; and, an
aggregate principal amount of $61,400,000 of the Notes are
outstanding. The redemption date is December 18, 2009.
The redemption notice was sent to holders of the senior secured
notes on November 18, 2009. The redemption and payment of the
notes will be made by The Bank of New York Trust Company, N.A.,
the trustee of the indenture governing the notes, in accordance
with terms specified in the redemption notice and the redemption
procedures of the trustee. The company plans to use cash on hand
to fund the redemption.
"The redemption of the final portion of our senior secured notes
represents the achievement of another milestone for our company,"
said Scott Mercer, Conexant's chairman and chief executive
officer. "Moving forward, we plan to continue working to
strengthen our capital structure and improve our financial
performance. With the recent completion of our business
restructuring strategy, which included divestitures and
significant operating-expense reductions, Conexant [] is a leaner,
more profitable company focused on delivering operational
excellence and innovative solutions for imaging, audio, embedded-
modem, and video applications. In each of these areas, we are
preparing to introduce new products intended to strengthen the
leadership positions our teams have built."
The Company also reports that between November 16 and November 19,
2009, it entered into exchange agreements with certain holders of
its outstanding 4% Convertible Subordinated Notes due 2026 to
issue an aggregate of 942,944 shares of the Company's common
stock, par value $0.01 per share, in exchange for $2,400,000
aggregate principal amount of the Notes. The Company is also
paying the Holders accrued and unpaid interest in cash on the
Notes exchanged.
The holders of the Notes may require the Company to repurchase,
for cash, all or part of their Notes on March 1, 2011, at a price
of 100% of the principal amount, plus any accrued and unpaid
interest. The Shares were issued in transactions that were not
registered under the Securities Act of 1933, as amended, in
reliance upon an exemption from registration provided under
Section 3(a)(9) of the Act. The Exchanges qualified for the
3(a)(9) exemption because the Shares and the Notes were both
issued by the Company, the Shares were issued exclusively in
exchanges with the Company's existing security holders and no
commission or other remuneration was paid or given directly or
indirectly for soliciting the Exchanges.
About Conexant
Newport Beach, California-based Conexant Systems, Inc. (NASDAQ:
CNXT) -- http://www.conexant.com/-- is a fabless semiconductor
company. Conexant's comprehensive portfolio of innovative
semiconductor solutions includes products for imaging, audio,
embedded-modem, and video applications. Outside the United
States, the Company has subsidiaries in Northern Ireland, China,
Barbados, Korea, Mauritius, Hong Kong, France, Germany, the United
Kingdom, Iceland, India, Israel, Japan, Netherlands, Singapore,
and Israel.
At July 3, 2009, the Company had $399.9 million in total
assets and $561.9 million in total liabilities, resulting in
$161.9 million in shareholders' deficit.
COREL CORPORATION: To Comply with SEC Rules for Domestic Issuers
----------------------------------------------------------------
Corel Corporation has determined that it no longer qualifies as a
foreign private issuer, and, accordingly, will begin complying
with all of the rules relating to domestic (U.S.) issuers on
December 1, 2009, the first day of its fiscal year, pursuant to
Rule 3b-5(e) of the Securities Exchange Act of 1934.
About Corel Corp.
Corel Corp. (NASDAQ:CREL) (TSX:CRE) -- http://www.corel.com/-- is
one of the world's top software companies with more than
100 million active users in over 75 countries. The Company
provides high quality, affordable and easy-to-use Graphics and
Productivity and Digital Media software. The Company's products
are sold through a scalable distribution platform comprised of
Original Equipment Manufacturers (OEMs), the Company's global e-
Stores, and the Company's international network of resellers and
retail vendors.
The Company's product portfolio includes CorelDRAW(R) Graphics
Suite, Corel(R) Paint Shop Pro(R) Photo, Corel(R) Painter(TM),
VideoStudio(R), WinDVD(R), Corel(R) WordPerfect(R) Office and
WinZip(R). The Company's global headquarters are in Ottawa,
Canada, with major offices in the United States, United Kingdom,
Germany, China, Taiwan, and Japan.
At August 31, 2009, the Company had $189.7 million in total assets
against $199.7 million in total liabilities, resulting in
$10.0 million in shareholders' deficit.
Corel's working capital deficiency at August 31, 2009, was
$10.5 million, an increase of $7.7 million from the November 30,
2008, working capital deficiency of $2.8 million.
* * *
As reported by the Troubled Company Reporter on November 3, 2009,
Standard & Poor's Ratings Services lowered its long-term corporate
credit ratings on Ottawa-based packaged software provider Corel
Corp. to 'B-' from 'B'. S&P also lowered the issue-level rating
on the company's senior secured credit facility by one notch to
'B-' from 'B'. The '3' recovery rating on the debt is unchanged.
CRABTREE & EVELYN: Exit Plan Set for Jan. 14 Confirmation
---------------------------------------------------------
Crabtree & Evelyn Ltd. obtained approval of its disclosure
statement explaining its proposed Chapter 11 reorganization plan,
Bill Rochelle at Bloomberg News reported.
Crabtree & Evelyn filed a Chapter plan that offers to pay secured
creditors in full and return up to 45 cents on the dollar to
unsecured creditors.
Crabtree said it is negotiating with its parent for exit
financing sufficient to pay the debtor-in-possession loan that
funded its bankruptcy and to provide working capital once the
Company exits Chapter 11.
Crabtree will present its plan for confirmation at a hearing
scheduled for January 14, 2010.
Crabtree has closed 30 of its 126 stores as part of its
reorganization.
About Crabtree & Evelyn
Woodstock, Connecticut-based Crabtree & Evelyn, Ltd. --
http://www.crabtree-evelyn.com/-- has evolved from a small,
family-run business, to a company with worldwide manufacturing and
distribution capabilities, worldwide distribution channels and 126
retail locations in the United States, making it well-known and
respected for its English-style elegance. Through a multi-channel
sales strategy, including sales through retail, wholesale, export,
affiliate and internet channels, it manufactures and distributes
its products worldwide.
The Company is a direct, wholly owned subsidiary of Crabtree &
Evelyn Holdings Limited. Crabtree & Evelyn Holdings is a direct,
wholly-owned subsidiary of CE Holdings Ltd., a British Virgin
Islands based investment holding company. CE Holdings is a direct,
wholly-owned subsidiary of KLKOI. KLKOI is a direct, wholly owned
subsidiary of Kuala Lumpur Kepong Berhad, a Malaysian corporation
("KLK"). KLK is a Malaysian public limited liability company, the
stock of which is publicly traded on the Kuala Lumpur stock
exchange.
The Company filed for Chapter 11 on July 1, 2009 (Bankr. S.D.N.Y.
Case No. 09-14267). Lawrence C. Gottlieb, Esq., at Cooley Godward
Kronish LLP, represents the Debtor in its restructuring efforts.
The Debtor has hired employ Clear Thinking Group LLC as financial
advisor; KPMG Corporate Finance LLC as real estate consultant;
Epiq Bankruptcy Solutions LLC as claims agent. The Debtor has
assets and debts both ranging from $10 million to $50 million.
CYTORI THERAPEUTICS: Posts $6.8 Million Net Loss in Q3 2009
-----------------------------------------------------------
Cytori Therapeutics, Inc., has reported its financial results for
the third quarter ended September 30, 2009.
Net loss was $6.8 million and $13.7 million for the three and nine
months ended September 30, 2009, respectively, compared to
$6.8 million and $23.5 million for the same periods in 2008. The
Company said the improvement in net loss for the first nine months
of 2009 compared to 2008 is attributable mostly to increased
development revenues and the reduction in research and development
and general and administrative expenses.
Product revenues were $1.4 million and $4.6 million for the three
and nine months ended September 30, 2009, respectively. This
compares to $2.3 million and $3.9 million for the same periods in
2008. Gross profit was $604,000 and $1.9 million for the three
and nine months ended September 30, 2009, respectively, compared
to $1.7 million and $2.5 million for the same periods in 2008.
The difference in gross profit between the third quarters of 2008
and 2009 is attributable mostly to the high margin sale of a Cell
Bank in Europe in the third quarter of 2008, with no comparable
sale in 2009.
Total operating expenses, less the change in fair value of
warrants and option liabilities, were $6.7 million and
$20.7 million for the three and nine months ended September 30,
2009, respectively, compared to $8.3 million and $26.6 million,
for the same periods in 2008.
Cytori ended the third quarter of 2009 with $13.1 million in cash
and cash equivalents plus $1.9 million in accounts receivable,
compared to $12.6 million in cash and cash equivalents and
$1.3 million in accounts receivable as of December 31, 2008.
Balance Sheet
At September 30, 2009, the Company's consolidated balance sheets
showed $25.0 million in total assets and $26.4 million in total
liabilities, resulting in a $1.4 million shareholders' deficit.
A full-text copy of the Company's Form 10-Q is available for free
at http://researcharchives.com/t/s?4a2b
Going Concern Doubt
The Company incurred losses for the three and nine months ended
September 30, 2009. The Company has an accumulated deficit of
$173.0 million as of September 30, 2009. Additionally, the
Company has used net cash of $17.7 million and $26.1 million to
fund its operating activities for the nine months ended
September 30, 2009 and 2008, respectively. To date these
operating losses have been funded primarily from outside sources
of invested capital.
The Company has had, and continue to have, an ongoing need to
raise additional cash from outside sources to fund its
operations. However, its ability to raise capital has been
adversely affected by current credit conditions and the downturn
in the financial markets and the global economy. Accordingly, the
Company believes the combination of these facts raises substantial
doubt as to its ability to continue as a going concern.
About Cytori Therapeutics
Cytori Therapeutics, Inc. (NASDAQ: CYTX) --
http://www.cytoritx.com/-- develops and globally commercializes
regenerative medicine technologies, which provide real-time,
point-of-care access to clinical grade regenerative cells. The
Company's main product is the Celution(R) System, the first and
only automated device that enables rapid extraction, concentration
and re-implantation of a patient's adipose regenerative cells in a
single surgical procedure.
DE LA COSTA: Investor Deminicki Wants to Recover $3 Million
-----------------------------------------------------------
Michael Demnicki, investor of De La Costa Restaurant, filed a
lawsuit in Cook County Circuit Court to recover about $3 million
from a former partner, saying that the company hid its ownership
structure as a means to get him to invest $200,000 in a project,
Lorene Yue at Chicago Business.
Mr. Demnicki alleged Jason Hyatt and for creating a false
structure to conceal investor Matt Stoen's involvement in the
company, Ms. Yue. Mark Wilcox, Jenifer Walsh, Liquor License
Solutions LLC, Wilcox & Christopoulos law firm, Anthony Frink and
Holland & Knight LLP law firm were included in the suit, she adds.
Ms. Yue notes that Mr. Hyatt recently pleaded guilty for fraud
charges.
De La Costa operates a restaurant. The Company filed for Chapter
11 bankruptcy protection in July 2008.
DELPHI CORP: MDL Settlement Gets District Court's Final Nod
-----------------------------------------------------------
Pursuant to Delphi Corp. and its units' Quarterly Operating Report
dated November 17, 2009, John C. Brooks, president of DPH
Holdings Corp., disclosed that the United States District Court
for the Eastern District of Michigan convened a further hearing
on November 16, 2009, by which it approved on a final basis, a
second modification to the settlement of certain plaintiffs in a
multidistrict litigation against Delphi Corporation, certain
Delphi affiliates, and certain current and former directors and
officers of Delphi under the federal securities law and the
Employee Retirement Income Security Act of 1974.
As a result of the Modified MDL Settlements, as of September 30,
2009, Delphi has a $351 million liability recorded for the matter
and expects to recover $130 million for the settlement amounts
provided to the plaintiffs from insurers, underwriters, and
third-party reimbursements, Mr. Brooks stated.
Mr. Brooks further disclosed that in connection with the Modified
First Amended Joint Plan of Reorganization, the United States
Bankruptcy Court for the Southern District of New York approved
on July 23, 2009, an agreement between the parties to the
Modified MDL Settlements to permit the Modified MDL Settlements
to be effective separately from the resolution of Delphi's
Chapter 11 cases and absent the payment of the $15 million amount
to be provided by a third party. In addition, the modifications
provided for no recovery under the resolution of Delphi's Chapter
11 cases, he said.
About Delphi Corp
Based in Troy, Michigan, Delphi Corporation (PINKSHEETS: DPHIQ)
-- http://www.delphi.com/-- was a global supplier of mobile
electronics and transportation systems, including powertrain,
safety, steering, thermal, and controls & security systems,
electrical/electronic architecture, and in-car entertainment
technologies. Delphi had approximately 146,600 employees and
operates 150 wholly owned manufacturing sites in 34 countries with
sales of $18.1 billion in 2008.
The Company filed for Chapter 11 protection on October 8, 2005
(Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr.,
Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden,
Arps, Slate, Meagher & Flom LLP, represent the Debtors in their
restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A.
Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP,
represent the Official Committee of Unsecured Creditors. As of
June 30, 2008, the Debtors' balance sheet showed US$9,162,000,000
in total assets and US$23,742,000,000 in total debts.
The Court confirmed Delphi's plan on January 25, 2008. The Plan
was not consummated after a group led by Appaloosa Management,
L.P., backed out from their proposal to provide US$2,550,000,000
in equity financing to Delphi. At the end of July 2009, Delphi
obtained confirmation of a revised plan, build upon a sale of the
assets to a entity formed by some of the lenders who provided
$4 billion of debtor-in-possession financing, and General Motors
Company.
On October 6, 2009, Delphi Corp.'s Chapter 11 plan of
reorganization became effective. A Master Disposition Agreement
executed among Delphi Corporation, Motors Liquidation Company,
General Motors Company, GM Components Holdings LLC, and DIP Holdco
3, LLC divides Delphi's business among three separate parties --
DPH Holdings LLC, GM Components, and DIP Holdco 3.
Delphi emerged from Chapter 11 as DPH Holdings. DPH Holdings will
remain responsible for the post-Effective Date administration and
eventual closing of the Chapter 11 cases as well as the
disposition of certain retained assets and payment of certain
retained liabilities as provided under the Modified Plan.
Bankruptcy Creditors' Service, Inc., publishes Delphi Bankruptcy
News. The newsletter tracks the Chapter 11 proceedings of Delphi
Corp. and its debtor-affiliates. (http://bankrupt.com/newsstand/
or 215/945-7000)
DELPHI CORP: Michigan Fund Wants to File Late Claim
---------------------------------------------------
Michigan's Self-Insurers' Security Fund notes that Delphi Corp.'s
Modified First Amended Joint Plan of Reorganization completely
changed the definition of Flow-Through Claims to the detriment of
the Debtors' employees and the SISF. Dennis J. Raterink, Esq.,
Attorney General, in Lansing, Michigan, points out that the
positive treatment of workers' compensation claims was removed
under the Modified Plan. Moreover, the Modified Plan created new
opportunities for holders of some "employee-related obligations"
the ability to file claims after the effective date of the
Modified Plan, but did not allow the same recourses to its
injured workers, he says.
The SISF filed two proofs of claim against the Debtors on
July 29, 2009:
(i) a priority tax claim based on excise taxes for unpaid
workers' compensation obligations for $25,460,432; and
(ii) a general unsecured claim for unpaid workers' compensation
obligations for $36,293,480.
During the course of the Debtors' Chapter 11 cases the Debtors
continued to pay their workers' compensation obligations,
regardless of the date when the claims arose. However, on
October 6, 2009, the Debtors ceased making any workers'
compensation payments, Mr. Raterink discloses.
By this motion, the SISF seeks the Court's permission to file
Claim Nos. 19501 and 19502 under Rule 9006(b) of the Federal
Rules of Bankruptcy Procedure.
Mr. Raterink argues that the SISF Claims are insignificant
relative to $3.4 billion to $3.62 billion of the total remaining
unsecured claims in the Reorganized Debtors' estates. He points
out that the Debtors were eminently aware of their workers'
compensation obligations at the time the Modified Plan was filed.
The is a delay between the proof of claim deadline and the SISF
filing, but the length of delay between the Debtors' announcement
that they were abandoning their Michigan workers' compensation
claims to the filing of the SISF claims is less than 60 days, Mr.
Raterink insists. More importantly, the SISF erroneously
believed that it did not possess a claim against the Debtors as
of the Bar Date, he contends. In fact, it was not until the
Modified Plan was filed that the SISF learned that Debtors would
walk away from their statutory obligations in Michigan, he
stresses.
Mr. Raterink assures the Court that the Debtors would not be
prejudiced by the SISF Claims. In contrast, without payment of
the SISF claims, the SISF may be forced into insolvency, he
maintains.
About Delphi Corp
Based in Troy, Michigan, Delphi Corporation (PINKSHEETS: DPHIQ)
-- http://www.delphi.com/-- was a global supplier of mobile
electronics and transportation systems, including powertrain,
safety, steering, thermal, and controls & security systems,
electrical/electronic architecture, and in-car entertainment
technologies. Delphi had approximately 146,600 employees and
operates 150 wholly owned manufacturing sites in 34 countries with
sales of $18.1 billion in 2008.
The Company filed for Chapter 11 protection on October 8, 2005
(Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr.,
Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden,
Arps, Slate, Meagher & Flom LLP, represent the Debtors in their
restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A.
Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP,
represent the Official Committee of Unsecured Creditors. As of
June 30, 2008, the Debtors' balance sheet showed US$9,162,000,000
in total assets and US$23,742,000,000 in total debts.
The Court confirmed Delphi's plan on January 25, 2008. The Plan
was not consummated after a group led by Appaloosa Management,
L.P., backed out from their proposal to provide US$2,550,000,000
in equity financing to Delphi. At the end of July 2009, Delphi
obtained confirmation of a revised plan, build upon a sale of the
assets to a entity formed by some of the lenders who provided
$4 billion of debtor-in-possession financing, and General Motors
Company.
On October 6, 2009, Delphi Corp.'s Chapter 11 plan of
reorganization became effective. A Master Disposition Agreement
executed among Delphi Corporation, Motors Liquidation Company,
General Motors Company, GM Components Holdings LLC, and DIP Holdco
3, LLC divides Delphi's business among three separate parties --
DPH Holdings LLC, GM Components, and DIP Holdco 3.
Delphi emerged from Chapter 11 as DPH Holdings. DPH Holdings will
remain responsible for the post-Effective Date administration and
eventual closing of the Chapter 11 cases as well as the
disposition of certain retained assets and payment of certain
retained liabilities as provided under the Modified Plan.
Bankruptcy Creditors' Service, Inc., publishes Delphi Bankruptcy
News. The newsletter tracks the Chapter 11 proceedings of Delphi
Corp. and its debtor-affiliates. (http://bankrupt.com/newsstand/
or 215/945-7000)
DELPHI CORP: Retirees Also Sue Auto Task Force Over Pensions
------------------------------------------------------------
To recall, Delphi Salaried Retirees Association initiated a civil
action seeking equitable relief against the Pension Benefit
Guaranty Corporation for actions the agency has taken in
terminating the Delphi Retirement Program for Salaried Employees
in the United States District Court for the Eastern District of
Michigan Southern Division.
Subsequently, the DSRA broadened its civil action to include U.S.
Department of the Treasury Auto Task Force's Secretary Timothy
Geithner, and senior advisers Steven Rattner and Ronald Bloom,
according to a November 18, 2009 report of The Indianapolis Star,
citing court papers filed in the Michigan District Court.
The DSRA alleged in the complaint that the Auto Task Force put
pressure on the PBGC to lift the liens it had placed on Delphi
Corporation's plants abroad to somehow speed up General Motors
Company's exit from Chapter 11, The Indianapolis Star reported.
The DSRA contended that by lifting PBGC's liens, Delphi would
quickly leave bankruptcy and would be in position to supply GM
with a sure flow of auto parts, according to the report. "It is
part of an orchestrated effort on the federal government's part
to restructure the auto industry as expediently and cheaply as
possible," the DSRA asserted under its complaint. The liens
could have been used by the PBGC to force Delphi to replenish its
pension funds, the DSRA further argued in its complaint, the
report pointed out.
About Delphi Corp
Based in Troy, Michigan, Delphi Corporation (PINKSHEETS: DPHIQ)
-- http://www.delphi.com/-- was a global supplier of mobile
electronics and transportation systems, including powertrain,
safety, steering, thermal, and controls & security systems,
electrical/electronic architecture, and in-car entertainment
technologies. Delphi had approximately 146,600 employees and
operates 150 wholly owned manufacturing sites in 34 countries with
sales of $18.1 billion in 2008.
The Company filed for Chapter 11 protection on October 8, 2005
(Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr.,
Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden,
Arps, Slate, Meagher & Flom LLP, represent the Debtors in their
restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A.
Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP,
represent the Official Committee of Unsecured Creditors. As of
June 30, 2008, the Debtors' balance sheet showed US$9,162,000,000
in total assets and US$23,742,000,000 in total debts.
The Court confirmed Delphi's plan on January 25, 2008. The Plan
was not consummated after a group led by Appaloosa Management,
L.P., backed out from their proposal to provide US$2,550,000,000
in equity financing to Delphi. At the end of July 2009, Delphi
obtained confirmation of a revised plan, build upon a sale of the
assets to a entity formed by some of the lenders who provided
$4 billion of debtor-in-possession financing, and General Motors
Company.
On October 6, 2009, Delphi Corp.'s Chapter 11 plan of
reorganization became effective. A Master Disposition Agreement
executed among Delphi Corporation, Motors Liquidation Company,
General Motors Company, GM Components Holdings LLC, and DIP Holdco
3, LLC divides Delphi's business among three separate parties --
DPH Holdings LLC, GM Components, and DIP Holdco 3.
Delphi emerged from Chapter 11 as DPH Holdings. DPH Holdings will
remain responsible for the post-Effective Date administration and
eventual closing of the Chapter 11 cases as well as the
disposition of certain retained assets and payment of certain
retained liabilities as provided under the Modified Plan.
Bankruptcy Creditors' Service, Inc., publishes Delphi Bankruptcy
News. The newsletter tracks the Chapter 11 proceedings of Delphi
Corp. and its debtor-affiliates. (http://bankrupt.com/newsstand/
or 215/945-7000)
DELTA AIR LINES: City Council OKs Atlanta Airport Lease Extension
-----------------------------------------------------------------
The Atlanta City Council approved on November 16, 2009, a
proposed new seven-year lease between Hartsfield-Jackson
International Airport and its biggest tenant, Delta Air Lines,
Inc., the Atlanta Journal-Constitution reported.
The new Lease replaces a 30-year agreement between Delta and
Atlanta Airport, which is set to expire in 2010.
Garnering unanimous approval at a 15-to-0 vote, the deal has been
presented to Mayor Shirley Franklin for signing, who called it a
"win-win for the city" that's "important to the economic
viability of the region," according the AJC.
Delta chief executive Richard Anderson noted that "the historic
relationship between the city of Atlanta and Delta that has
turned our hometown airport into an economic engine that pumps
$23.5 billion annually into our region and supports tens of
thousands of jobs," according to the report.
About Delta Air Lines
With its acquisition of Northwest Airlines, Atlanta, Georgia-based
Delta Air Lines (NYSE: DAL) -- http://www.delta.com/or
http://www.nwa.com/-- became the world's largest airline
following merger with Northwest Airlines in 2008. From its hubs
in Atlanta, Cincinnati, Detroit, Memphis, Minneapolis-St. Paul,
New York-JFK, Salt Lake City and Tokyo-Narita, Delta, its
Northwest subsidiary and Delta Connection carriers offer service
to more than 376 destinations worldwide in 66 countries and serves
more than 170 million passengers each year. The merger closed on
October 29, 2008.
Northwest and 12 affiliates filed for Chapter 11 protection on
September 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930).
On May 21, 2007, the Court confirmed the Northwest Debtors'
amended plan. That amended plan took effect May 31, 2007.
Delta and 18 affiliates filed for Chapter 11 protection on
September 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923).
Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represented
the Delta Debtors in their restructuring efforts. On April 25,
2007, the Court confirmed the Delta Debtors' plan. That plan
became effective on April 30, 2007.
(Bankruptcy Creditors Service Inc. publishes Delta Air Lines
Bankruptcy News, http://bankrupt.com/newsstand/or 215/945-7000).
* * *
Delta Air Lines has $44,853,000,000 in assets against total debts
of $43,953,000,000 in debts as of Sept. 30, 2009.
For the third quarter ended Sept. 30, 2009, Delta Air Lines
reported a net loss of $161 million, which reflect significant
weakness in the airline revenue environment due to the global
recession.
Delta Air Lines and Northwest Airlines carry a 'B/Negative/--'
corporate ratings from Standard & Poor's. They also continue to
carry 'B2' corporate family ratings from Moody's.
DELTA AIR LINES: DP3 Gets Nod to Form VEBA for Retirees' Coverage
-----------------------------------------------------------------
Judge Cecilia G. Morris of the U.S. Bankruptcy Court for the
Southern District of New York authorized the Delta Pilot Pension
Preservation Organization, Inc., to form of a voluntary employee
benefit association to offer health, prescription drug, dental
and vision care benefits to Delta pilot retirees, their spouses
and dependents that are eligible for the 80% federal subsidy in
the form of the Health Coverage Tax Credit.
Representing thousands of retired Delta pilots, DP3 had said that
the formation of a VEBA will allow Delta Retirees and their
dependents -- who have already lost much of their pensions -- to
save, collectively, millions of dollars through federal tax
subsidies for their critical health care benefits, while allowing
Delta to save considerable costs for many years into the future.
DP3 is an organization representing thousands of retired Delta
pilots, organized to preserve and protect their pension and other
retiree benefits. Section 1114 Committees otherwise representing
the interests of pilot and non-pilot retirees on retiree benefit
issues in the Debtors' cases have dissolved under the terms of
Delta's Plan of Reorganization.
To make the program most effective, DP3 sought the Court to
authorize cooperation between Delta and DP3, including:
(1) providing historical loss information in connection with
the Pilot Retirees' current benefit plans;
(2) providing contact information for the pilot retirees,
solely for purposes of contacting them about the benefit
programs, under a confidentiality agreement that prohibits
the Pilot VEBA from using or sharing that information for
other purposes;
(3) designating of the over-65 benefit rolled out through the
VEBA as a "Delta affiliated program" for Pilot and Non
Pilot retirees 65 and older;
(4) agreeing that roll-out of the new Pilot VEBA Program will
be treated as a "life event" under Delta's current medical
plans; and
(5) agreeing that Pilot Retirees will continue to have the
ability to opt in and out of their medical plans during
the annual enrollment period each year.
About Delta Air Lines
With its acquisition of Northwest Airlines, Atlanta, Georgia-based
Delta Air Lines (NYSE: DAL) -- http://www.delta.com/or
http://www.nwa.com/-- became the world's largest airline
following merger with Northwest Airlines in 2008. From its hubs
in Atlanta, Cincinnati, Detroit, Memphis, Minneapolis-St. Paul,
New York-JFK, Salt Lake City and Tokyo-Narita, Delta, its
Northwest subsidiary and Delta Connection carriers offer service
to more than 376 destinations worldwide in 66 countries and serves
more than 170 million passengers each year. The merger closed on
October 29, 2008.
Northwest and 12 affiliates filed for Chapter 11 protection on
September 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930).
On May 21, 2007, the Court confirmed the Northwest Debtors'
amended plan. That amended plan took effect May 31, 2007.
Delta and 18 affiliates filed for Chapter 11 protection on
September 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923).
Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represented
the Delta Debtors in their restructuring efforts. On April 25,
2007, the Court confirmed the Delta Debtors' plan. That plan
became effective on April 30, 2007.
(Bankruptcy Creditors Service Inc. publishes Delta Air Lines
Bankruptcy News, http://bankrupt.com/newsstand/or 215/945-7000).
* * *
Delta Air Lines has $44,853,000,000 in assets against total debts
of $43,953,000,000 in debts as of Sept. 30, 2009.
For the third quarter ended Sept. 30, 2009, Delta Air Lines
reported a net loss of $161 million, which reflect significant
weakness in the airline revenue environment due to the global
recession.
Delta Air Lines and Northwest Airlines carry a 'B/Negative/--'
corporate ratings from Standard & Poor's. They also continue to
carry 'B2' corporate family ratings from Moody's.
DELTA AIR LINES: Machinists Union Puts Off Representation Election
------------------------------------------------------------------
The International Association of Machinists and Aerospace Workers
withdrew its application to hold a representation election for
fleet service workers at Delta Air Lines, citing Delta's
insistence that representation for those workers be resolved at
the same time as it is for passenger service and office and
clerical employees, according to Reuters.
In August 2009, the Union sought declaration from the National
Mediation Board allowing Delta and Northwest Airlines Corporation
to operate as a single carrier -- which would have led to a union
representation election, according to Reuters.
In a statement, Delta called IAM's move "the continuation of a
pattern of stalling resolution" of union representation for its
employees, Reuters reported, noting that it was "suspicious
considering it is taking place days before the NMB publishes its
proposal to change the longstanding majority voting rules."
To recall, Delta has opposed certain modifications proposed by
the American Federation of Labor and Congress of Industrial
Organizations relating to union representation voting, which may
cause an essential change in Delta's election scenario.
The proposal, which AFL-CIO submitted to the National Mediation
Board on September 2, 2009, provides for the unionization of
workers with majority approval of those voting. Under NMB's
current rules, a majority of all workers in a class, not just
those voting, must approve.
Delta/Northwest FAs Seek "Quick Election"
Flight attendants at Delta Air Lines and Northwest Airlines,
working together on an Association of Flight Attendants-CWA (AFA-
CWA) organizing campaign, issued a letter last week to Delta CEO
Richard Anderson asking for an immediate union election for the
over 21,000 flight attendants. The Delta AFA-CWA Campaign
Coordinating Committee offered that if management recognized the
official results of a yes/no type ballot, then AFA-CWA would file
for an election
immediately.
"We are anxious to resolve the outstanding representation issue
and begin the process of merging our two flight attendant groups,"
the letter stated. "With an expedited election under fair and
democratic procedures, that goal would be achieved quickly."
Earlier this month, the National Mediation Board (NMB) proposed
new voting procedures that would permit a majority of workers who
actually vote in union elections to decide the election and stop
assigning "no" votes to workers who do not participate.
"Everyone is so excited to be part of this great airline. With a
voice at the table, we can work alongside management on
negotiating an industry leading contract," said Paul Tanner,
Delta flight attendant, AFA-CWA activist and member of the
Campaign Coordinating Committee.
"We hope that Delta management accepts our sincere offer so that
we can move forward without any further delay. Northwest and
Delta flight attendants are eager to work together and play a
crucial role in the world's largest airline," said Janette Rook,
AFA-CWA Northwest President.
For over 60 years, the Association of Flight Attendants has been
serving as the voice for flight attendants in the workplace, in
the aviation industry, in the media and on Capitol Hill. More
than 50,000 flight attendants at 20 airlines come together to form
AFA-CWA, the world's largest flight attendant union. AFA is
part of the 700,000-member strong Communications Workers of
America (CWA), AFL-CIO.
About Delta Air Lines
With its acquisition of Northwest Airlines, Atlanta, Georgia-based
Delta Air Lines (NYSE: DAL) -- http://www.delta.com/or
http://www.nwa.com/-- became the world's largest airline
following merger with Northwest Airlines in 2008. From its hubs
in Atlanta, Cincinnati, Detroit, Memphis, Minneapolis-St. Paul,
New York-JFK, Salt Lake City and Tokyo-Narita, Delta, its
Northwest subsidiary and Delta Connection carriers offer service
to more than 376 destinations worldwide in 66 countries and serves
more than 170 million passengers each year. The merger closed on
October 29, 2008.
Northwest and 12 affiliates filed for Chapter 11 protection on
September 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930).
On May 21, 2007, the Court confirmed the Northwest Debtors'
amended plan. That amended plan took effect May 31, 2007.
Delta and 18 affiliates filed for Chapter 11 protection on
September 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923).
Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represented
the Delta Debtors in their restructuring efforts. On April 25,
2007, the Court confirmed the Delta Debtors' plan. That plan
became effective on April 30, 2007.
(Bankruptcy Creditors Service Inc. publishes Delta Air Lines
Bankruptcy News, http://bankrupt.com/newsstand/or 215/945-7000).
* * *
Delta Air Lines has $44,853,000,000 in assets against total debts
of $43,953,000,000 in debts as of Sept. 30, 2009.
For the third quarter ended Sept. 30, 2009, Delta Air Lines
reported a net loss of $161 million, which reflect significant
weakness in the airline revenue environment due to the global
recession.
Delta Air Lines and Northwest Airlines carry a 'B/Negative/--'
corporate ratings from Standard & Poor's. They also continue to
carry 'B2' corporate family ratings from Moody's.
DELTA AIR LINES: CEO Says Star Alliance Willing to Invest More
--------------------------------------------------------------
Daily Bankruptcy Review says the chief executive of Delta Air
Lines Inc. indicated the SkyTeam alliance would be willing to
invest more than Delta's proposed $1.02 billion into Japan
Airlines Corp. as it tries to forge a trans-Pacific partnership.
As reported by the Troubled Company Reporter-Asia Pacific on
November 19, 2009, Dow Jones Newswires' Doug Cameron and Yoshio
Takahashi and The Wall Street Journal's Mariko Sanchanta reported
that Delta Air Lines Inc. and its airline partners said they could
provide a $1.02 billion funding package to Japan Airlines Corp.,
in an aggressive bid meant to show their financial muscle as they
try and wrest JAL away from its partnership with rival American
Airlines.
According to the report, the proposal by Delta and SkyTeam members
-- including Air France-KLM -- includes a $500 million injection
from the alliance. Delta would provide a $300 million revenue
guarantee, $200 million in asset-backed funding and cover
$20 million or more in costs for a switch.
"The move signals the first time that Delta and its SkyTeam
partners have quantified the amount they would be willing to
inject into JAL, which is weighed down by more than one trillion
yen ($11.19 billion) in debt and pension liabilities. It also
underlines Delta's determination to tie up with JAL in order to
tap into the Japanese carrier's lucrative Asian and trans-Pacific
routes," the report said.
According to the report, Delta President Edward Bastian said at a
briefing in Tokyo Wednesday that he believes that the bigger
economies of scale provided by SkyTeam would bring greater
benefits to the struggling Japanese carrier.
"It's clear that SkyTeam is by far the strongest partner for Japan
Airlines and the best ally to ensure JAL's growth and stability in
the decades to come," Mr. Bastian said. He estimated that JAL's
annual revenue would grow by $400 million if the Japanese carrier
joins SkyTeam, the report added.
As reported by the Troubled Company Reporter on November 6, 2009,
sources told the Wall Street Journal that American Airlines'
"Oneworld Total Value Proposition" presentation to government
officials and JAL senior management:
-- shows that an American-JAL alliance would significantly
boost JAL's revenue should the U.S. and Japan reach a new
open-skies deal;
-- underlines the fact that several oneworld members are keen
to expand their relationship with JAL, including British
Airways, which has expressed an interest in a joint
venture with JAL.
-- estimates a switch to the Delta alliance would cost JAL
more than $500 million in lost revenue in the first two
years from disentangling frequent-flier agreements and
lost traffic shared with other airlines.
The Journal said it is unclear what the actual financial impact of
a JAL switch to SkyTeam from oneworld would be, but the process
could be complex. "If JAL had been starting from zero, a SkyTeam
alliance would have made more sense," the Journal quoted Yoshihisa
Akai, the managing director of Japan Aviation Management Research,
a think tank, as saying. "But extricating itself from oneworld
will be a massive task."
American and Delta are offering to buy minority equity stakes in
JAL.
The Journal said Delta has hired investment bank Goldman Sachs
Group Inc. and public-relations firm Fleishman-Hillard to advise
it on a possible alliance with JAL. American has tapped Global
Advisory Japan, a unit of Rothschild, the Journal said.
About AMR Corp.
Headquartered in Forth Worth, Texas, AMR Corporation (NYSE:
AMR) operates with its principal subsidiary, American Airlines
Inc. -- http://www.aa.com/-- a worldwide scheduled passenger
airline. At the end of 2006, American provided scheduled jet
service to about 150 destinations throughout North America, the
Caribbean, Latin America, including Brazil, Europe and Asia.
American is also a scheduled airfreight carrier, providing
freight and mail services to shippers throughout its system.
Its wholly owned subsidiary, AMR Eagle Holding Corp., owns two
regional airlines, American Eagle Airlines Inc. and Executive
Airlines Inc., and does business as "American Eagle." American
Beacon Advisors Inc., a wholly owned subsidiary of AMR, is
responsible for the investment and oversight of assets of AMR's
U.S. employee benefit plans, as well as AMR's short-term
investments.
* * *
AMR 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.
About Delta Air Lines
With its acquisition of Northwest Airlines, Atlanta, Georgia-based
Delta Air Lines (NYSE: DAL) -- http://www.delta.com/or
http://www.nwa.com/-- became the world's largest airline
following merger with Northwest Airlines in 2008. From its hubs
in Atlanta, Cincinnati, Detroit, Memphis, Minneapolis-St. Paul,
New York-JFK, Salt Lake City and Tokyo-Narita, Delta, its
Northwest subsidiary and Delta Connection carriers offer service
to more than 376 destinations worldwide in 66 countries and serves
more than 170 million passengers each year. The merger closed on
October 29, 2008.
Northwest and 12 affiliates filed for Chapter 11 protection on
September 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930).
On May 21, 2007, the Court confirmed the Northwest Debtors'
amended plan. That amended plan took effect May 31, 2007.
Delta and 18 affiliates filed for Chapter 11 protection on
September 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923).
Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represented
the Delta Debtors in their restructuring efforts. On April 25,
2007, the Court confirmed the Delta Debtors' plan. That plan
became effective on April 30, 2007.
(Bankruptcy Creditors Service Inc. publishes Delta Air Lines
Bankruptcy News, http://bankrupt.com/newsstand/or 215/945-7000).
* * *
Delta Air Lines has $44,480,000,000 in assets against total debts
of $43,500,000,000 in debts as of June 30, 2009.
Delta Air Lines and Northwest Airlines carry a 'B/Negative/--'
corporate ratings from Standard & Poor's. They also continue to
carry 'B2' corporate family ratings from Moody's.
About JAL
Japan Airlines Corporation -- http://www.jal.co.jp/-- is a Japan-
based holding company that is active in five business segments
through its 225 subsidiaries and 82 associated companies. The Air
Transportation segment is engaged in the operation of passenger
and cargo planes. The Air Transportation-Related segment is
engaged in the transportation of passengers and cargoes, the
preparation of in-flight food catering, the maintenance of
aircraft and land equipment, as well as the fueling business. The
Travel Planning and Marketing segment is involved in the planning
and sale of travel packages. The Card and Leasing segment is
engaged in the provision of finance, cards and leasing services.
The Others segment is involved in businesses related to hotels,
resorts, logistics, wholesale, retail, real estate, printing,
construction, manpower dispatch, as well as information and
communication. The Company has numerous global operating
locations.
JAL International Co. Ltd. is a wholly owned operating subsidiary
of Japan Airlines Corporation.
* * *
As reported by the Troubled Company Reporter on November 3, 2009,
Moody's Investors Service has downgraded the long-term debt rating
and issuer rating of Japan Airlines International Co., Ltd. To
Caa1 from B1, and will continue to review both ratings for further
possible downgrade.
DIAMONDHEAD CASINO: Posts $292,000 Net Loss in Q3 2009
------------------------------------------------------
Diamondhead Casino Corporation reported a net loss of $292,469 for
the three months ended September 30, 2009, compared with a net
loss of $240,139 in the same period in 2008.
At September 30, 2009, the Company's consolidated balance sheets
showed $5,624,019 in total assets, $1,092,234 in total
liabilities, and $4,531,785 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?4a0b
Going Concern Doubt
The Company has incurred losses over the past several years, has
no operations, generates no revenues, and incurred a net loss of
$842,146 for the nine months ended September 30, 2009. The
Company's auditors have expressed substantial doubt about the
Company's ability to continue as a going concern in their audit
report on the Company's consolidated financial statements included
with the Annual Report on Form 10-K for the year ended
December 31, 2008.
About Diamondhead Casino
Based in Largo, Fla., Diamondhead Casino Corporation operated
gaming vessels in international waters from inception through
approximately August of 2000. The vessels sailed from state ports
into international waters where gaming operations were conducted.
The Company eventually divested itself of its gaming operations to
satisfy financial obligations to its vendors, lenders and taxing
authorities and to focus its resources on the development of a
casino resort on its 404.5 acres of waterfront property located on
Bay St. Louis in Diamondhead, Mississippi.
DOLLAR THRIFTY: Moody's Upgrades Corporate Family Rating to 'B3'
----------------------------------------------------------------
Moody's Investors Service upgraded the ratings of Dollar Thrifty
Automotive Group: Probability of Default Rating to B3 from Caa2;
Corporate Family Rating to B3 from Caa3; secured 1st lien term
loan and revolving credit facilities to B2 from Caa3; and
Speculative Grade Liquidity Rating to SGL-3 from SGL-4. The
outlook is stable.
The upgrades reflect the improvement in the competitive and
operating environment for the US auto rental sector, and a
strengthening in DTG's capital structure and liquidity profile.
As a result of these factors, Moody's expect that the company's
operating performance and credit metrics will show further
improvement through 2010. This should provide appropriate support
for the B3 rating level and for the stable rating outlook.
The operating environment for the auto rental sector has been
strengthened by several factors. These include: the significant
rise in used car prices; the completion of the broad-based
defleeting initiatives on the part of all of the major car rental
companies; the successful navigation of GM and Chrysler through
the bankruptcy process; and, a more stable pricing environment for
rental cars. The overall environment for the sector has also been
aided by the reopening of the ABS market to funding daily rental
fleets. Moody's believes that these factors will support DTG's
ability to generate improved performance that is increasingly
supportive of the B3 rating level.
DTG has also undertaken constructive operating and financial
initiatives. It has significantly diversified its fleet
purchasing strategy with 2010 vehicle purchase orders expected to
have these mix: Ford -- 34%; Chrysler -- 30%; GM -- 20%; and
others -- 16%. This strategy significantly reduces the company's
historic dependence on Chrysler which had accounted for as much as
90% of annual purchases. The company also continues to make
progress in lowering SG&A as a percent of sales, and in lowering
fleet costs by purchasing more risk vehicles.
DTG's financial position has been enhanced by the continued
deleveraging of its balance sheet; vehicle debt at September 2009
was $1.6 billion, down from $2.4 billion a year earlier. In
addition to this debt reduction, DTG recently raised approximately
$120 million through an equity issuance. Moody's views the
decision to issue equity as an important and constructive sign of
the company's commitment to maintaining a stronger capital
structure.
The principal liquidity sources available to DTG at the quarter
ending September 2009 include approximately $306 million of
unrestricted cash and $562 million of restricted cash. Beyond
this, the company also has the $120 million in proceeds from the
equity issuance. Through 2010, approximately $600 million of ABS
will amortize. Conditions in the ABS market are becoming more
conducive to the company's ability to replace the maturing
obligations with new ABS issuances. However, should DTG be unable
to access the ABS market, its total cash position of over
$900 million should provide adequate liquidity to fund its fleet
purchasing requirements and other cash needs through the coming
year.
The upgrade of the secured credit facilities to B2 (one notch
above the B3 CFR) reflects the $300 reduction in first-lien, non-
fleet debt in the company's capital structure during the past
year. It also recognizes an improvement in Moody's estimate of
the Family Recover Rate to 50% from 35% under the Loss Given
Default Methodology. The improved Family Recovery Rate recognizes
the diminished level of risk associated with DTG's ties to auto
makers.
Despite these positive operating and financial conditions, DTG
continues to face notable challenges. It remains a relatively
small, niche player in the US car rental market, with a market
share of approximately 10% compared with the roughly 30% share
held by each of the other three major car rental companies. In
addition, the company's key credit metrics remain weak. For the
LTM through September 2009 EBITA/ interest was negative,
EBITDA/interest was a modest 2.5x, and debt/EBITDA was high at
6.3x. Although currently very weak, Moody's expect that the
company's twelve-month metrics will improve as the very weak
quarters from 2008 fall out of the calculation, and as the company
continues to benefit from its cost cutting initiatives and from
improved industry conditions.
Moving forward factors that could support an improvement in DTG's
rating include an ability to sustain EBITA/interest above 1.5x and
debt/EBITDA below 4x
The rating could come under pressure should EBITA/interest fall
below 1x, or if debt/EBITDA remained above 5x.
The last rating action on DTG was a downgrade the company's CFR to
Caa3 on December 23rd, 2008.
Dollar Thrifty Automotive Group, Inc., headquartered in Tulsa,
Okalahoma, is a leading car rental company.
DONALD KELLAND: Sec. 341 Meeting Set for December 17
----------------------------------------------------
The U.S. Trustee for Region 14 will convene a meeting of Donald
Kelland's creditors on December 17, 2009, at 3:30 p.m. at US
Trustee Meeting Room, 230 N. First Avenue, Suite 102, Phoenix, AZ.
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.
Phoenix, Arizona-based Donald Kelland filed for Chapter 11
bankruptcy protection on November 15, 2009 (Bankr. D. Ariz. Case
No. 09-29392). Phil Hineman, Esq., at Law Office of Phil Hineman
assists the Company in its restructuring effort. The Company
listed $10,000,001 to $50,000,000 in assets and $10,000,001 to
$50,000,000 in liabilities.
DRYSHIPS INC: Increases Convertible Notes Offering to $400-Mil.
---------------------------------------------------------------
DryShips Inc. has announced the pricing of its public offering of
convertible senior notes. The offering size was increased from
$300 million to $400 million. The sale of the convertible notes
is expected to close on November 25, 2009, subject to customary
closing conditions.
The convertible notes, which are being issued at a price equal to
100% of their face value, will have an interest rate of 5%. The
convertible notes will be senior unsecured obligations of the
Company. The initial conversion price for the convertible notes
will be $7.19 per share.
The underwriter for the offering will also have the option to
purchase up to $60 million principal amount of additional
convertible notes solely to cover any over-allotments. The
Company estimates that the net proceeds from the offering will be
approximately $387 million after deducting underwriter discounts
and commissions and estimated offering expenses payable by the
Company assuming the over-allotment option is not exercised. The
Company intends to use the proceeds from the offering for vessel
acquisitions and other general corporate purposes.
Concurrently with the offering of the convertible notes, the
Company has entered into a share lending agreement with Deutsche
Bank AG, London Branch, under which it will loan to Deutsche Bank
AG 26.1 million shares of its common stock. The Company has also
entered into an equity underwriting agreement with Deutsche Bank
Securities Inc. pursuant to which Deutsche Bank AG or its
affiliates intend to sell shares of the Company's common stock
that they will be entitled to borrow from the Company under the
share lending agreement.
These shares will be offered in an underwritten offering
registered under the Securities Act of 1933, as amended, pursuant
to the Company's existing shelf registration statement in order to
facilitate hedging transactions undertaken by the purchasers of
the convertible notes. The Company will not receive any of the
proceeds from this sale of common stock but will receive a nominal
lending fee from Deutsche Bank AG under the share lending
agreement. Deutsche Bank AG will be required to return the
borrowed shares on or about the maturity of the convertible notes
or, if earlier, upon the conversion, repurchase, cancellation or
redemption of all of the convertible notes and upon the occurrence
of certain other events. The delivery of common stock pursuant to
the share lending agreement will be contingent upon the closing of
the convertible notes offering, and the closing of the convertible
notes offering will be contingent upon the delivery of common
stock pursuant to the share lending agreement.
Deutsche Bank Securities Inc. is acting as Sole Book-running
Manager for the offerings.
The convertible notes and the common stock will be offered only by
means of a prospectus, forming a part of the Company's shelf
registration statement, related prospectus supplements and other
related documents.
On November 20, 2009, the Company filed a Final Term Sheet
Relating to its $400,000,000 Aggregate Principal Amount of 5.00%
Convertible Senior Notes due 2014 and 26,100,000 Shares of Common
Stock Issued Pursuant to a Share Lending Agreement. A full-text
copy of the issuer free writing prospectus is available at no
charge at http://ResearchArchives.com/t/s?4a20
As reported by the Troubled Company Reporter, DryShips this month
signed an agreement with Deutsche Schiffsbank on waiver terms for
two facilities with an aggregate of $117.5 million of its
outstanding debt. DryShips also signed a separate agreement with
Commerzbank and West LB on waiver terms for $70 million of its
outstanding debt.
About DryShips Inc.
DryShips Inc. -- http://www.dryships.com/-- based in Greece, is
an owner and operator of drybulk carriers and offshore oil deep
water drilling that operate worldwide. As of the day of this
release, DryShips owns a fleet of 39 drybulk carriers comprising 7
Capesize, 30 Panamax and 2 Supramax, with a combined deadweight
tonnage of over 3.4 million tons, 2 ultra deep water
semisubmersible drilling rigs and 4 ultra deep water newbuilding
drillships. DryShips Inc.'s common stock is listed on the NASDAQ
Global Market where trades under the symbol "DRYS".
As of September 30, 2009, the Company had US$5,404,843,000 in
total assets against US$1,900,444 in total current liabilities and
US$836,760,000 in total non-current liabilities, resulting in
US$2,667,639,000 in stockholders' equity.
EASTON-BELL SPORTS: S&P Junks Ratings on Senior Secured Notes
-------------------------------------------------------------
Standard & Poor's Ratings Services said that it lowered its rating
on Van Nuys, California-based Easton-Bell Sports Inc.'s proposed
seven-year senior secured notes. S&P lowered the rating to 'CCC+'
(one notch less than the counterparty credit rating on Easton-
Bell) from 'B-' and revised the recovery rating to '5', which
indicates S&P's expectation for modest (10% to 30%) recovery in
the event of a payment default or bankruptcy, from '4'.
"The rating action reflects a reduction in the estimated recovery
value of the proposed notes due to an increase in the issuance
amount to about $350 million from $325 million," said Standard &
Poor's credit analyst Jerry Phelan.
The ratings are based on the proposed terms for the company's
recapitalization, which include the proposed notes, unrated
$250 million senior secured asset backed revolving credit
facility, unrated $105 million holding company term loan, and
$115 million preferred equity transactions. Easton-Bell is a
leading company in the sporting goods industry specializing in
protective head gear and performance products.
Ratings List
Easton-Bell Sports Inc.
Corporate credit rating B-/Positive/--
Rating Lowered
To From
-- ----
Senior secured debt CCC+ B-
Recovery rating 5 4
ECO2 PLASTICS: Posts $9,960,000 Net Loss in Q3 2009
---------------------------------------------------
ECO2 Plastics, Inc., reported a net loss of $9,960,000 on revenue
of $1,423,000 for the three months ended September 30, 2009,
compared with a net loss of $3,823,000 on revenue of $2,525,000 in
the same period of 2008. As a result of closing the Riverbank
facility, the Company recorded a loss on impairment of $7,578,000.
At September 30, 2009, the Company's balance sheets showed
$1,695,000 in total assets and $6,387,000 in total liabilities,
resulting in a $4,692,000 shareholders' deficit.
The Company's balance sheet also showed strained liquidity with
$680,000 in total current assets available to pay $3,823,000 in
total current liabilities.
A full-text copy of the Company's Form 10-Q is available for free
at http://researcharchives.com/t/s?4a0f
Going Concern Doubt
Since inception, the Company has reported net losses, operating
activities have used cash, and the Company has working capital and
stockholders' deficits, and it recently ceased production in order
to relocate its plant. These matters raise substantial doubt
about the Company's ability to continue as a going concern.
The Company anticipates it will not have sufficient cash to meet
its needs for the next twelve months.
About ECO2 Plastics
Based in Riverbank, Calif., ECO2 Plastics, Inc., was incorporated
under the laws of the State of Delaware in 2000, and formed for
purposes of acquiring certain patented technology and development
of a worldwide market. The Company has developed a unique and
revolutionary process referred to as the ECO2(TM) Environmental
System. The ECO2 Environmental System cleans post-consumer
plastics, without the use of water, at a cost savings versus
traditional methods). This Process is both patented and patent-
pending and is licensed from Honeywell Federal Manufacturing &
Technologies, LLC, and the Department of Energy on an exclusive
basis for the patent life.
EMPIRE RESORTS: Posts $1.6 Million Net Loss in Q3 2009
------------------------------------------------------
Empire Resorts, Inc., and subsidiaries reported a net loss on net
of $1.6 million on net revenues of $20.9 million for the three
months ended September 30, 2009, compared with a net loss of
$2.1 million on net revenues of $20.6 million in the same period
in 2008.
Revenue from racing operations increased by approximately
$2.8 million. Gaming revenue decreased by approximately
$1.3 million and food, beverage and other revenue decreased by
approximately $90,000. Complimentary expenses increased by
approximately $1.1 million.
At September 30, 2009, the Company's consolidated balance sheets
showed $51.3 million in total assets and $78.7 million in total
current liabilities, resulting in a $27.4 million shareholders'
deficit.
A full-text copy of the Company's Form 10-Q is available for free
at http://researcharchives.com/t/s?4a28
Going Concern Doubt
The Company says its ability to continue as a going concern is
dependent upon a determination that it did not have the obligation
to repurchase its $65 million of 5 1/2% senior convertible notes
on July 31, 2009, and/or its ability to arrange financing with
other sources to fulfill its obligations under a loan agreement
with The Park Avenue Bank of New York. The Company is continuing
efforts to obtain financing, but there is no assurance that it
will be successful in doing so. The Company believes these
factors, as well as continuing net losses and negative cash flows
from operating activities, raise substantial doubt about its
ability to continue as a going concern.
About Empire Resorts
Empire Resorts, Inc. (NASDAQ: NYNY) -- http://www.empiresorts.com/
-- owns and operates the Monticello Casino & Raceway, a harness
racing track and casino located in Monticello, New York, and 90
miles from midtown Manhattan.
ENRON CORP: Alfa, ING Keep Money in Enron Securities Dispute
------------------------------------------------------------
In a victory for investors who collect securities settlements from
soon-to-be bankrupt companies, noteholders including Alfa SAP and
two ING funds will not have to return early payments they received
from Enron to the Enron Creditors Recovery Corp, Law360 reports.
Based in Houston, Texas, Enron Corporation filed for Chapter 11
protection on December 2, 2001 (Bankr. S.D.N.Y. Case No.
01-16033) following controversy over accounting procedures, which
caused Enron's stock price and credit rating to drop sharply.
Enron hired lawyers at Togut Segal & Segal LLP; Weil, Gotshal &
Manges LLP, Venable; Cadwalader, Wickersham & Taft, LLP for its
bankruptcy case. The Official Committee of Unsecured Creditors in
the case tapped lawyers at Milbank, Tweed, Hadley & McCloy LLP.
The Debtors filed their Chapter Plan and Disclosure Statement on
July 11, 2003. On January 9, 2004, they filed their fifth Amended
Plan and on the same day the Court approved the adequacy of the
Disclosure Statement. On July 15, 2004, the Court confirmed the
Debtors' Modified Fifth Amended Plan and that plan was declared
effective on November 17, 2004.
After the approval of the Plan, the new board of directors decided
to change the name of Enron Corp. to Enron Creditors Recovery
Corp. to reflect the current corporate purpose. ECRC's sole
mission is to reorganize and liquidate certain of the operations
and assets of the "pre-bankruptcy" Enron for the benefit of
creditors.
ECRC has been involved in the MegaClaims Litigation, an action
against 11 major banks and financial institutions that ECRC
believes contributed to Enron's collapse; the Commercial Paper
Litigation, an action involving the recovery of payments made to
commercial paper dealers; and the Equity Transactions Litigation,
which ECRC filed against Lehman Brothers Holdings, Inc., UBS AG,
Credit Suisse and Bear Stearns to recover payments made to the
four banks on transactions involving Enron's stock while the
company was insolvent.
(Enron Bankruptcy News; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).
ERICKSON RETIREMENT: Panel Proposes Protiviti as Fin'l Advisors
---------------------------------------------------------------
The Official Committee of Unsecured Creditors in Erickson
Retirement Communities LLC's cases seeks the Court's authority to
retain Protiviti Inc. as its financial advisor, nunc pro tunc to
November 4, 2009.
As the Committee's financial advisor, Protiviti will render these
services to the Committee:
(a) Assist in the review of the Debtors' business plan and
associated restructuring initiatives and advise the
Committee regarding the Debtors' business plans, cash flow
forecasts, financial projections, cash flow reporting,
claims, and plan alternatives;
(b) Advise the Committee with respect to available capital
restructuring relating to the current DIP facility and
sale and financing alternatives, including providing
options regarding potential courses of action and
assisting with the design, structuring and negotiation of
alternative restructuring and transaction structures;
(c) Assist the Committee in identifying and valuing
undisclosed assets, if any, and consult with the Debtors
and their advisors on the progress of asset sales,
locations, identification, and value;
(d) Prepare periodic reports and updates to the Committee
regarding the status of the Debtors' postpetition
operating performance, and other issues as requested by
the Committee to facilitate informed decisions;
(e) Advise the Committee regarding identity and value of
avoidance actions; and
(f) Perform all other services as directed by the Committee or
its counsel and as may be required in the interests of the
creditors.
Protiviti will be paid a fee of $150,000 per month for the first
four months of its engagement agreement with the Committee, and
$100,000 per month thereafter until further amended and approved
by the Bankruptcy Court. The firm is also to be reimbursed for
necessary and actual expenses incurred or to be incurred.
Michael L. Atkinson, managing director at Protiviti, maintains
that upon review, his firm is a "disinterested person" within the
meaning of Section 101(14) of the Bankruptcy Code. He assures
the Court that Protiviti's engagement is not materially adverse
to the interest of the Debtors' estates.
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: Web Site Is Misleading, Mass. Agency Says
--------------------------------------------------------------
Barbara Anthony, undersecretary of the Office of Consumer Affairs
and Business Regulation for the state of Massachusetts asserted
that Erickson Retirement Communities, LLC's company Web site does
not comply with state advertising rules, according to a Nov. 11,
2009 report of The Patriot Ledger.
ERC's web site advertises that potential residents will need to
pay a one-time 100% refundable entrance deposit; however, the web
site does not indicate that the deposit is only returned if a new
occupant can be found for a resident's unit, The Patriot Ledger
pointed out.
"If it says 100% fully refundable, then the condition of
refunding the deposits should be disclosed at the same time,"
commented Ms. Anthony, the Patriot Ledger reported.
On behalf of ERC, Mel Tansill related that the terms of refunding
of entrance deposits are fully disclosed in the contracts to be
signed with any of ERC's communities, Patriot Ledger noted.
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)
EUROFRESH INC: Joint Plan of Reorganization Declared Effective
--------------------------------------------------------------
Eurofresh Inc exited Chapter 11 bankruptcy protection November 19.
Eurofresh Inc., doing business as Eurofresh Farms, and its
subsidiary Eurofresh Produce Ltd., emerged from bankruptcy less
than seven months after they originally reached a recapitalization
agreement with their investors, including Eurofresh founder and
current chairman, Johan van den Berg. The company originally
announced their financial reorganization on April 21, 2009.
Dwight Ferguson, chief executive officer of Eurofresh, said the
Company is emerging from bankruptcy stronger than ever, and will
continue searching for future growth opportunities.
"The future for Eurofresh has never been brighter," he said. "We
look forward to providing the highest quality produce and services
available to our customers for many years to come."
Terms of the Plan
The Troubled Company Reporter said on Oct. 1, 2009, under the
Plan, holders of existing credit facility secured claims,
miscellaneous secured claims, and convenience claims are expected
to receive 100% recovery. Holders of general unsecured claims and
senior noteholder claims are expected to get between 5% and 7%
recovery under the plan. The Debtors do not expect any
distribution to holders of discount noteholder claims,
subordinated debt securities claims and holders of equity
interests. According to the explanatory disclosure statement,
claimants will receive these distributions under the Plan:
i) holders of existing credit facility secured claims -- debt
of $50 million secured by a blanket lien on substantially
all assets of Eurofresh pursuant to a Credit and Guaranty
Agreement dated as of March 25, 2008, signed by Silver
Point Finance, LLC, as agent -- will receive a principal
reduction payment of $7.5 million of the outstanding
obligations under the existing credit documents and a
rollover of all remaining obligations under the existing
credit documents, to the extent allowed, into a new credit
facility;
ii) holders of miscellaneous secured claims will, on the
effective date, either be reinstated, paid in full in cash
or satisfied by the return of collateral;
iii) holders of allowed convenience claims will receive the
lesser of the allowed general unsecured claims of the
holder or $1,000 paid in cash;
iv) holders of allowed general unsecured claims will receive
cash payments in an amount equal to the holder's pro rata
share of the general unsecured claim fund; and
v) holders of allowed senior noteholder claims will receive
their pro rata share of:
a) $10.0 million in face amount of PIK preferred stock;
b) one million shares of New Common Stock; and
c) certain proceeds of reserved shares under certain
circumstances.
The Plan will be funded by new money financing and the issuance of
new common stock and PIK stock. A total of $12.5 million in new
financing will be provided by Johan van den Berg and certain
noteholders -- holders of the $170,000,000 of 11-1/2% senior notes
due in 2013 issued by Eurofresh prepetition. The $7.5 million of
the new money financing will be applied to reduce the principal
amount under the Existing Credit Documents and $5 million of which
will be used for working capital of Reorganized Eurofresh.
Bio Dynamics B.V./S.a.r.L., a Luxembourg company, company, which
is an affiliate, and under the direction, of Johan van den Berg,
will receive 40% of the stock of reorganized Eurofresh, the
Investing Noteholders 40%, 10% to Senior Noteholders and the
remaining 10% to be held in reserve.
A full-text copy of the disclosure statement explaining the Plan
is available for free at http://ResearchArchives.com/t/s?3df6
A full-text copy of the Plan of Reorganization is available for
free at http://ResearchArchives.com/t/s?3df7
About Eurofresh Inc.
Headquartered in Snowflake, Arizona, Eurofresh, Inc. --
http://www.eurofresh.com/-- is the leading year-round producer
and marketer of greenhouse tomatoes in the United States and a
leading innovator in the branded, flavorful fresh tomato, cucumber
and pepper industry. Premium quality and certified pesticide-free
products are grown with care in one of the world's largest
greenhouse complexes with abundant Arizona sunlight. Eurofresh's
two greenhouses cover more than 318 acres in Willcox and
Snowflake, Ariz.
Eurofresh Inc. and Eurofresh Produce Ltd. filed for Chapter 11 on
April 21, 2009 (Bankr. D. Ariz. Lead Case No. 09-07970). Craig D.
Hansen, Esq., at Squire, Sanders & Dempsey L.L.P. represents the
Debtors in their restructuring effort. The Official Committee of
Unsecured Creditors retained Stutman, Treister & Glatt P.C. as
counsel, and Lewis & Roca L.L.P. as co-counsel. The Eurofresh
Inc., in its bankruptcy petition, said it has assets worth $50
million to $100 million and debts of $100 million to $500 million.
EXTENDED STAY: Can Use Cash Collateral to Pay Incentives
--------------------------------------------------------
Extended Stay Inc. and its affiliated debtors sought and obtained
the Court's authority to use their cash collateral to fund the
incentive plan for five senior executives of HVM LLC.
In his November 12, 2009 order, Judge James Peck of the U.S.
Bankruptcy Court for the Southern District of New York authorized
the Debtors to use the cash earmarked as collateral for their
$4.1 billion mortgage loan, pursuant to these revised terms to
govern the payment of HVM's senior executives:
(1) Quarterly incentive payments for the senior executives
will begin in the fourth quarter of 2009 through the
effective date of a plan of reorganization or emergence
of the Debtors. The quarterly incentive payments will be
based on satisfaction of performance metrics based on the
revenue incentive, the controllable expense incentive and
the corporate overhead incentive.
* The revenue incentive should equal: if the Debtors'
quarterly RevPar Index performance relative to its peer
group in comparison to the same quarter in the prior
year (i) has not fallen by more than 2%, then 12.5% of
the remaining payment will be earned, or (ii) has
increased, then for each percentage increase in the
RevPar Index up to and including 5%, an incremental 2.3%
of the remaining payment will be earned, and above 5%,
an incremental 4.2% of the remaining payment will be
earned.
* The controllable expense incentive should equal: if the
Debtors' quarterly Controllable Costs Per Occupied Room
in comparison to the same quarter in the prior year, (i)
has not increased by more than 2%, then 6.25% of
remaining payment will be earned, or (ii) has declined,
then for each percentage decline in CCPOR from 1% down
to and including 5%, an incremental 1.438% of the
remaining payment will be earned, and for each
percentage decline in the CCPOR below 5%, an incremental
2.1% of the remaining payment will be earned.
* The corporate overhead incentive should equal: if the
Debtors' quarterly corporate overhead in comparison to
the amount set forth in the Debtors' current business
plan, (i) is equal to or less than the amount in the
business plan, 6.25% of the remaining payment will be
earned, and (ii) has declined by more than 1%, then for
each percentage decline from 1% down to and including
5%, an incremental 1.438% of the remaining payment will
be earned, and below 5%, an incremental 2.1% of the
remaining payment will be earned.
(2) In the event emergence occurs during the first, second or
third quarters of 2010, the quarterly incentive payment
for the quarter in which emergence occurs will not be
made. Instead, each senior executive will receive an
early payment equal to 75%, 50% or 25%, based on the
quarter in which emergence occurs, of the remaining
payment.
(3) Each of the critical employees would receive an additional
payment, equal to the percentage of the incentive amount,
depending on the employee's title:
* Regional Directors -- up to 67.5% of the incentive
amount, payable at HVM's discretion, based on the
incentive amount, measured for the hotels that each
regional director manages.
* Non-Senior Executives -- 67.5% of the incentive amount.
* Senior Executives excluding the President and CEO --
135% of the incentive amount.
* President/CEO -- 182.25% of the incentive amount.
For purposes of the additional payments, the incentive
amount will be measured for the period beginning July 1,
2009, through emergence against the prior year's
equivalent period, except that if emergence is after
June 30, 2010, measurements would be made based on the
trailing 12 months prior to emergence versus the prior
year 12-month period or what the Debtors' call the "annual
measuring period," and will be calculated as the sum of:
* the revenue incentive should equal: if the Debtors'
RevPAR Index performance relative to its peer group in
comparison to the annual measuring period, (i) has not
fallen by more than 2%, then 30 of the remaining
payment will be earned, or (ii) has increased, then
for each percentage increase in the RevPAR Index up to
and including 5%, an incremental 4.0% of the remaining
payment will be earned, and above 5%, an incremental
8.0% of the remaining payment will be earned;
* the controllable expense incentive should equal: if
the Debtors' CCPOR in comparison to the annual
measuring period, (i) has not increased by more than
2%, then 15.0% of the remaining payment will be
earned, or (ii) has declined, from 0% down to and
including 5%, then 25.0% of the remaining payment will
be earned, and below 5%, an incremental 4.0% of the
remaining payment will be earned; and
* the corporate overhead incentive will equal: if the
Debtors' corporate overhead in comparison to the
amount set forth in the business plan for the annual
measuring period, (i) is equal to or less than the
amount in the business plan, then 15.0% of the
remaining payment will be earned, (ii) has declined by
more than 1%, then for each percentage decline from 1%
down to and including 5%, an incremental 2.5% of the
remaining payment will be earned, and below 5%, an
incremental 4.0% of the remaining payment will be
earned.
(4) The Debtors are authorized to utilize any amount that
would have been owed to a critical employee who fails to
qualify for his or her payments to increase the $300,000
"discretionary pool cap," and utilize the funds to provide
payments to any replacement employees that HVM may deem
necessary.
(5) Each of the senior executives will receive a 10% base
salary increase effective November 1, 2009.
(6) To the extent the critical employee is terminated by HVM
for cause, that employee will not be entitled to and will
forfeit all rights to receive his or her deferred
quarterly incentive piece or additional payments, to the
extent applicable.
Judge Peck held that all amounts earned and payable to the senior
executives and other critical employees constitute administrative
expenses of the Debtors' Chapter 11 cases.
In case HVM's management agreements or similar agreements are
terminated with consent of HVM's members prior to the effective
date of a plan of reorganization, neither the critical employees
nor HVM will be entitled to an administrative expense or other
claim for any future unearned quarterly incentive or additional
payments, Judge Peck ruled.
The November 12 order is the second ruling the Bankruptcy Court
issued on the Debtors' proposal to use their cash collateral to
fund HVM's incentive program.
Judge Peck issued an initial order on October 29, 2009, approving
the use of the cash collateral to fund the first and second
payments of HVM's non-senior management employees as well as the
use of up to $300,000 of cash collateral for future payments for
employees who are not currently eligible participants in the
program. The Court, however, delayed the approval of the use of
cash collateral to pay the company's senior executives upon
request of the Debtors, which revised the terms of the incentive
program for those executives after the U.S. Trustee and the
Official Committee of Unsecured Creditors raised certain
objections.
The U.S. Trustee previously opposed the use of cash collateral on
grounds that the Debtors did not comply with Section 503(c)(1) of
the Bankruptcy Code, which limits the payment of retention
bonuses to insiders of a debtor. The U.S. Trustee argued that
the Debtors have to comply with bankruptcy law since the payments
being proposed are intended to induce the key employees to stay
in HVM. The Creditors Committee also questioned the purpose of
the program, noting that it provides incentives to senior
executives just to keep them around and not to maximize value for
the Debtors' estates and their creditors.
The Debtors countered that the incentive program would maximize
their operational and financial performance as well as enhance
their restructuring prospects by providing incentives to
employees to continue to render their services for the benefit of
the estates.
The Debtors, at the request of the U.S. Trustee, also filed
supporting documents, declaring that none of the non-senior
management employees and regional directors eligible for the
incentive program make management and policy decisions for the
Debtors or HVM.
About Extended Stay
Extended Stay is the largest owner and operator of mid-price
extended stay hotels in the United States, holding one of the most
geographically diverse portfolios in the lodging sector with
properties located across 44 states (including 11 hotels located
in New York) and two provinces in Canada. As a result of
acquisitions and mergers, Extended Stay's portfolio has expanded
to encompass over 680 properties, consisting of hotels directly
owned or leased by Extended Stay or one of its affiliates.
Extended Stay currently operates five hotel brands: (i) Crossland
Economy Studios, (ii) Extended Stay America, (iii) Extended Stay
Deluxe, (iv) Homestead Studio Suites, and (v) StudioPLUS Deluxe
Studios.
For the year ending December 31, 2008, Extended Stay's audited
financial statements show consolidated assets (including nondebtor
affiliates) totaling approximately $7.1 billion and consolidated
liabilities totaling approximately $7.6 billion. Consolidated
revenues for the 12 months ending December 31, 2008 were
approximately $1 billion.
Extended Stay Inc. and its affiliates filed for Chapter 11 on
June 15, 2009 (Bankr. S.D.N.Y. Case No. 09-13764). Judge James M.
Peck handles the case. Marcia L. Goldstein, Esq., at Weil Gotshal
& Manges LLP, in New York, represents the Debtors. Lazard Freres
& Co. LLC is the Debtors' financial advisors. Kurtzman Carson
Consultants LLC is the claims agent.
Bankruptcy Creditors' Service, Inc., publishes Extended Stay
Bankruptcy News. The newsletter provides gavel-to-gavel coverage
of the Chapter 11 proceedings undertaken by Extended Stay Inc. and
its various affiliates. (http://bankrupt.com/newsstand/or
215/945-7000).
EXTENDED STAY: Has BoA Deal on Cash Generated by ESA Units
----------------------------------------------------------
Extended Stay Inc. seeks a Court ruling approving a deal with
Bank of America N.A. that would allow it to use the cash
collateral generated by two of its debtor affiliates, ESA UD
Properties LLC and ESA Operating Lessee Inc.
ESA UD and ESA Operating generate cash from properties, which
they posted as collateral for the $8.5 million loan ESA UD
Properties availed from BofA.
The properties include real estates in Plains Township,
Pennsylvania, and in Findlay, Ohio, and personal properties owned
by ESA UD and ESA Operating. All cash generated from the
properties serve as collateral of BofA.
Jacqueline Marcus, Esq., at Weil Gotshal & Manges LLP, in New
York, says the Debtors need the cash collateral to maintain the
operations and fund the expenses of the two hotels owned by ESA
UD.
The funds generated from those hotels will continue to be
provided to HVM LLC, which manages all Extended Stay hotels, for
payment of employees and service providers tapped by utilized by
ESA UD and ESA Operating, according to Ms. Marcus.
In return for using the cash collateral, ESI agreed to make
payments to BofA, grant the bank an allowed superpriority
administrative claim in the Chapter 11 cases of ESA UD and ESA
Operating, and other forms of protection. ESI and BofA
specifically agreed on these terms:
(1) The party with an interest in the cash collateral is BofA,
pursuant to a loan agreement it executed with ESA UD
Properties and ESA Operating Lessee dated February 14,
2008.
(2) ESA UD Properties and ESA Operating Lessee will use the
cash collateral to pay expenses of operating two hotels
that constitute collateral for BofA's loan.
(3) In the absence of further order of the Court, ESA UD
Properties and ESA Operating Lessee will not be authorized
to use the cash collateral without consent from BofA,
during the period from the date of the proposed cash
collateral order to the date BofA declares the termination
or restriction of ESA UD Properties and ESA Operating
Lessee's use of the cash collateral.
(4) The occurrence of any of these events constitutes an event
of default unless waived in writing by BofA:
* The failure by ESA UD Properties and ESA Operating
Lessee to make "adequate protection payments;" comply
with the cash collateral budget and any variance
permitted for any applicable measurement period; or
perform any other terms, provisions, conditions,
covenants or obligations under the proposed cash
collateral order;
* ESA UD Properties and ESA Operating Lessee obtaining
credit or incurring debt that is secured by a security
interest, mortgage or other lien on the collateral
which is equal or senior to any security interest,
mortgage or other lien of BofA; entitled to priority
administrative status which is equal or senior to that
granted to BofA or in each case any Debtor applies for,
consents to or acquiesces in any relief; or violating
the terms of the February 2008 loan agreement and its
related documents;
* Any lien or security interest purported to be created
under the loan documents will cease to be or will be
asserted by any Debtor not to be, a valid and perfected
lien on or security interest in any collateral, with
the priority required by the loan documents or in the
proposed cash collateral order;
* The entry of a court order or any Debtor applies
for, consents to or acquiesces in, relief from or
modifying the automatic stay to allow any creditor to
execute upon or enforce a lien on or security interest
in any collateral having a value in excess of $50,000;
or with respect to any lien of or the granting of a
lien on the collateral to any state, local
environmental or regulatory agency or authority, which
would have an adverse effect on the business,
operations, property, assets, condition, financial or
otherwise of the Debtors;
* Reversal, vacatur or modification of the proposed cash
collateral order or ESA UD Properties and ESA Operating
Lessee apply for, consent to or acquiesce in any such
relief;
* Dismissal of the Chapter 11 cases of ESA UD Properties
and ESA Operating Lessee, conversion of their cases to
Chapter 7 cases, appointment of a Chapter 11 trustee or
examiner with enlarged powers or other responsible
person, or ESA UD Properties and ESA Operating Lessee
apply for, consent to or acquiesce in any such relief;
* Any misrepresentation of a material fact made after the
bankruptcy filing by the Debtors or their agents to
BofA about their financial condition; nature, extent,
location or quality of the collateral; or the
disposition or use of the collateral, subject in each
case to a grace period of five days after delivery to
the Debtors, with a copy to counsel for TriMont Real
Estate Advisors Inc. and the Official Committee of
Unsecured Creditors of a notice of the
misrepresentation.
(5) To the extent of any adequate protection obligations, BofA
is granted all of the right, title and interest of ESA UD
Properties and ESA Operating Lessee in their property and
assets provided that the collateral will not include the
companies' claims and causes of action or their proceeds.
(6) No costs or expenses of administration which have been or
may be incurred in any of the Debtors' Chapter 11 cases
should be charged against BofA, its claims or the
collateral without the bank's prior written consent.
The terms on the use of the BofA cash collateral are detailed in
the proposed order, a copy of which is available without charge
at http://bankrupt.com/misc/ESIPropcashcollorderBofA.pdf
About Extended Stay
Extended Stay is the largest owner and operator of mid-price
extended stay hotels in the United States, holding one of the most
geographically diverse portfolios in the lodging sector with
properties located across 44 states (including 11 hotels located
in New York) and two provinces in Canada. As a result of
acquisitions and mergers, Extended Stay's portfolio has expanded
to encompass over 680 properties, consisting of hotels directly
owned or leased by Extended Stay or one of its affiliates.
Extended Stay currently operates five hotel brands: (i) Crossland
Economy Studios, (ii) Extended Stay America, (iii) Extended Stay
Deluxe, (iv) Homestead Studio Suites, and (v) StudioPLUS Deluxe
Studios.
For the year ending December 31, 2008, Extended Stay's audited
financial statements show consolidated assets (including nondebtor
affiliates) totaling approximately $7.1 billion and consolidated
liabilities totaling approximately $7.6 billion. Consolidated
revenues for the 12 months ending December 31, 2008 were
approximately $1 billion.
Extended Stay Inc. and its affiliates filed for Chapter 11 on
June 15, 2009 (Bankr. S.D.N.Y. Case No. 09-13764). Judge James M.
Peck handles the case. Marcia L. Goldstein, Esq., at Weil Gotshal
& Manges LLP, in New York, represents the Debtors. Lazard Freres
& Co. LLC is the Debtors' financial advisors. Kurtzman Carson
Consultants LLC is the claims agent.
Bankruptcy Creditors' Service, Inc., publishes Extended Stay
Bankruptcy News. The newsletter provides gavel-to-gavel coverage
of the Chapter 11 proceedings undertaken by Extended Stay Inc. and
its various affiliates. (http://bankrupt.com/newsstand/or
215/945-7000).
EXTENDED STAY: Proposes Insurance Deal With Zurich
--------------------------------------------------
Extended Stay Inc. and its affiliated debtors sought and obtained
authority from the Court to enter into an agreement with Zurich
American Insurance Company to extend the terms of their insurance
program for at least another year.
The Debtors' insurance program with Zurich expired on
September 30, 2009. It covers the workers' compensation
liability, general liability, deductible protection, among other
things. The Debtors wanted the terms of the Zurich Insurance
Program extended for the period October 1, 2009, to October 1,
2010.
Under the deal, the Debtors and Zurich agreed on these terms:
(1) Workers' Compensation Coverage
The workers' compensation coverage is a guaranteed cost
program. Statutory workers' compensation coverage insures
HVM LLC, up to the individual state limits for each
occurrence. Employers' liability insurance coverage
insures HVM for claims up to the policy limits --
$1 million for each occurrence and $1 million in the
aggregate. The applicable premium is $6,800,150.
(2) General Liability Coverage in U.S.
The deductible is $250,000. After payment of the
deductible, Zurich insures the Debtors for claims up to
the policy limits -- $1 million for each occurrence and
$40 million in the aggregate. The applicable premium is
$597,771.
(3) General Liability Coverage in Canada
The deductible is $250,000. After payment of the
deductible, Zurich insures the Debtors for claims up to
the policy limits -- $1 million for each occurrence and
$40 million in the aggregate. The applicable premium is
$3,939.
(4) Automobile Liability Coverage in U.S.
The deductible for comprehensive coverage is $1,000 and
the deductible for collision coverage is $1,000. After
payment of the respective deductible, Zurich insures the
Debtors for claims up to the policy limits of $2 million
for each occurrence. The applicable premium is $299,961.
(5) Automobile Liability Coverage in Canada
The deductible for comprehensive coverage is $1,000 and
the deductible for collision coverage is $1,000. After
payment of the respective deductible, Zurich insures the
Debtors for claims up to the policy limits of $2 million
for each occurrence. The applicable premium is $6,300.
(6) Garage Keepers' Liability Coverage in Canada.
The deductible on this coverage is $2,500. The applicable
premium is $2,000.
The Debtors and Zurich also agree that the $17,475,000 of
collateral in the form of two letters of credit securing the
Debtors' deductible-related obligations under the original
policies that is currently held by Zurich will not be increased
per the terms of the new policies.
All collateral held by Zurich and posted by the Debtors whether
before or after the Petition Date will secure all the Debtors'
obligations to the company no matter when they arise. The amount
of collateral or any of its replacement may be adjusted from time
to time at Zurich's sole option. The Debtors also agree under
the deal to assume all of their current obligations to Zurich.
In connection with the renewal of the policies, the Debtors are
required to pay Zurich about $3 million no later than Oct. 30,
2009, and about $1.15 million no later than Nov. 30, 2009.
About Extended Stay
Extended Stay is the largest owner and operator of mid-price
extended stay hotels in the United States, holding one of the most
geographically diverse portfolios in the lodging sector with
properties located across 44 states (including 11 hotels located
in New York) and two provinces in Canada. As a result of
acquisitions and mergers, Extended Stay's portfolio has expanded
to encompass over 680 properties, consisting of hotels directly
owned or leased by Extended Stay or one of its affiliates.
Extended Stay currently operates five hotel brands: (i) Crossland
Economy Studios, (ii) Extended Stay America, (iii) Extended Stay
Deluxe, (iv) Homestead Studio Suites, and (v) StudioPLUS Deluxe
Studios.
For the year ending December 31, 2008, Extended Stay's audited
financial statements show consolidated assets (including nondebtor
affiliates) totaling approximately $7.1 billion and consolidated
liabilities totaling approximately $7.6 billion. Consolidated
revenues for the 12 months ending December 31, 2008 were
approximately $1 billion.
Extended Stay Inc. and its affiliates filed for Chapter 11 on
June 15, 2009 (Bankr. S.D.N.Y. Case No. 09-13764). Judge James M.
Peck handles the case. Marcia L. Goldstein, Esq., at Weil Gotshal
& Manges LLP, in New York, represents the Debtors. Lazard Freres
& Co. LLC is the Debtors' financial advisors. Kurtzman Carson
Consultants LLC is the claims agent.
Bankruptcy Creditors' Service, Inc., publishes Extended Stay
Bankruptcy News. The newsletter provides gavel-to-gavel coverage
of the Chapter 11 proceedings undertaken by Extended Stay Inc. and
its various affiliates. (http://bankrupt.com/newsstand/or
215/945-7000).
FINANCIAL RESOURCES: Sent to Chapter 11 by NH Attorney General
--------------------------------------------------------------
An attorney general in New Hampshire made an involuntary
bankruptcy filing against Financial Resources Management and C L
and M Inc., citing investors backing the Company's construction
projects were demanding payment from homeowners and threatening to
take their property, Taragana.com reports. The state is asking
the Bankruptcy Court to appoint a trustee to oversee the company's
assets, source says.
Financial Resources Management is a financial institution.
FLYING J: To Sell Insurance Services Biz to Buckner Co.
-------------------------------------------------------
Paul Beebe at The Salt Lake Tribune reports Flying J. Inc. has
agreed to sell its insurance subsidiary, Flying J Insurance
Services, for an undisclosed sum to The Buckner Co., based in Salt
Lake City, Utah. According to Mr. Beebe, Buckner will buy Flying
J Insurance Services on January 1.
Salt Lake Tribune says Flying J has been marketing many of its
assets to generate cash that will allow it to pay off debts and
exit bankruptcy. In October, Flying J put its crude-oil refinery
in North Salt Lake up for sale. Flying J also has sold its
Longhorn subsidiary, put its refinery in Bakersfield, California,
up for sale, and announced plans to merge its Flying J truck stops
with rival Pilot Travel Centers, according to Salt Lake Tribune.
Salt Lake Tribune notes Flying J Insurance has been selling
insurance policies to the trucking industry since 1997. According
to Mr. Beebe, Flying J Insurance gathers about $25 million of
insurance premiums annually. Buckner collected $134 million in
premiums last year.
Flying J Insurance and other subsidiaries were not included in the
parent's bankruptcy filing.
Based in Ogden, Utah, Flying J Inc. -- http://www.flyingj.com/--
is among the 20 largest private companies in America, with 2007
sales exceeding $16 billion. The fully integrated oil company
employs approximately 14,700 people in the U.S. and Canada through
its interstate operations, transportation, refining and supply,
exploration and production, as well as its financial services and
communications, divisions.
Flying J and six of its affiliates filed for bankruptcy on
December 22, 2008 (Bankr. D. Del. Lead Case No. 08-13384). Flying
J sought Chapter 11 protections after a precipitous drop in oil
prices and disruption in the credit markets brought to bear
significant short-term pressure on the company's liquidity
position.
Attorneys at Kirkland & Ellis LLP represent the Debtors as
counsel. Young, Conaway, Stargatt & Taylor LLP is the Debtors'
Delaware Counsel. Blackstone Advisory Services L.P. is the
Debtors' investment banker and financial advisor. Epiq Bankruptcy
Solutions LLC is the Debtors' notice, claims and balloting agent.
In its formal schedules submitted to the Bankruptcy Court, Flying
J listed assets of $1,433,724,226 and debts of $640,958,656.
An official committee of unsecured creditors has been appointed in
the case. Pachulski Stang Ziehl & Jones LLP has been tapped as
counsel for the creditors' panel.
FLYING J INC: Plan Exclusivity Extended to February 28
------------------------------------------------------
Flying J Inc. and its debtor-affiliates sought and obtained from
the U.S. Bankruptcy Court for the District of Delaware an
extension of their exclusive periods to file a Chapter 11 plan
until Feb. 28, 2010, and solicit votes on that Plan until
April 28, 2010.
The Debtors relate that the proposed extension will enable them to
finalize a plan of reorganization. The proposed extension will
also provide the Debtors and their stakeholders with adequate time
to analyze and refine the treatment of the Debtors' creditor
constituencies and develop a fair and reasonable distribution
scheme.
Based in Ogden, Utah, Flying J Inc. -- http://www.flyingj.com/--
is among the 20 largest private companies in America, with 2007
sales exceeding $16 billion. The fully integrated oil company
employs approximately 14,700 people in the U.S. and Canada through
its interstate operations, transportation, refining and supply,
exploration and production, as well as its financial services and
communications, divisions.
Flying J and six of its affiliates filed for bankruptcy on
December 22, 2008 (Bankr. D. Del. Lead Case No. 08-13384). Flying
J sought Chapter 11 protections after a precipitous drop in oil
prices and disruption in the credit markets brought to bear
significant short-term pressure on the company's liquidity
position.
Attorneys at Kirkland & Ellis LLP represent the Debtors as
counsel. Young, Conaway, Stargatt & Taylor LLP is the Debtors'
Delaware Counsel. Blackstone Advisory Services L.P. is the
Debtors' investment banker and financial advisor. Epiq Bankruptcy
Solutions LLC is the Debtors' notice, claims and balloting agent.
In its formal schedules submitted to the Bankruptcy Court, Flying
J listed assets of $1,433,724,226 and debts of $640,958,656.
An official committee of unsecured creditors has been appointed in
the case. Pachulski Stang Ziehl & Jones LLP has been tapped as
counsel for the creditors' panel.
FLOWSERVE CORPORATION: Fitch Affirms 'BB+' Issuer Default Rating
----------------------------------------------------------------
Fitch Ratings has affirmed Flowserve Corporation's Issuer Default
Rating and senior secured bank facilities:
-- IDR at 'BB+';
-- Senior secured bank facilities at 'BB+'.
The Rating Outlook is revised to Positive from Stable.
Flowserve had approximately $569 million of debt outstanding at
Sept. 30, 2009, including a $545 million bank term loan.
The Positive Rating Outlook reflects Flowserve's low leverage, its
solid operating performance, and Fitch's expectation that the
company will continue to follow disciplined financial policies.
The ratings could eventually be upgraded if Flowserve is able to
generate consistent financial results at lower sales levels and
continues to control discretionary spending for acquisitions and
share repurchases. Flowserve's credit metrics are strong enough
to leave room for some deterioration in earnings, cash flow and
leverage following historically strong results through most of
2008. Double digit internal growth rates prior to 2009, together
with stable debt levels, contributed to steady declines in
leverage. At Sept. 30, 2009 debt to EBITDA was 0.8 times and free
cash flow to total adjusted debt was 23%. The company has not
made significant acquisitions for several years but they could
potentially become more important if internal growth doesn't
return to previous levels. Fitch anticipates that free cash flow
will be sufficient to fund a moderate level of acquisitions even
if the economic environment doesn't improve significantly in the
near term. Furthermore, Flowserve remains focused on maintaining
a strong balance sheet which is important to its ability to
compete for new project awards against other large providers in
the global flow control market.
Near term results are being affected by the global recession that
has reduced activity in Flowserve's energy, chemical, water and
industrial markets. Bookings declined in late 2008 from high
levels but have stabilized at lower levels through most of 2009.
The impact on margins is being offset by benefits from
restructuring to improve efficiency in its engineering and IT
functions. Much of the cost reductions, which Flowserve estimates
at $110 million annually, are expected to be realized in late 2009
and in 2010.
Rating concerns include uncertainty about the timing of
improvement in Flowserve's end-markets, the possibility of higher
leverage from future acquisitions, and pricing and competitive
pressure related to lower project activity. Contingent
liabilities represent another concern and include asbestos,
compliance with government regulations, environmental remediation,
and shareholder lawsuits. Flowserve has made steady progress
toward resolving these issues, and the ratings incorporate Fitch's
assumption that they will not require a substantial use of cash in
the future.
These concerns are offset by expectations for long term growth in
the company's infrastructure markets and a solid backlog which
stood at $2.7 billion as of Sept. 30, 2009. The backlog was lower
than peak levels reported in 2008 but is still high by historical
standards. Flowserve's on-time deliveries have been above 90%.
Customer service and an emphasis on technology and engineering
content are important to the company's ability to be competitive
and to generate acceptable operating margins. In addition, after-
market business makes up more than one-third of sales and helps to
moderate the impact of cyclical equipment sales. Flowserve has an
extensive network of service centers that supports its aftermarket
business.
At Sept. 30, 2009 Flowserve's liquidity included $291 million of
cash and a $400 million revolver that matures in 2012, offset by
$28 million of current debt and $114 million of letter of credit
usage under the revolver. Nearly all of Flowserve's debt consists
of a $545 million bank term loan that has no significant scheduled
payments until 2011. The bank facilities are secured by
substantially all of Flowserve's domestic assets and 65% of the
capital stock of certain foreign subsidiaries. The facilities
would become unsecured if the company maintains investment grade
ratings, as defined in the agreement, for at least 90 days.
Flowserve contributed $82 million to its pension plans through the
first nine months of 2009 which, when combined with favorable
market returns during the year, will help control its net pension
liabilities and future contribution requirements.
FONTAINEBLEAU LV: Committee Deadline to Challenge Liens on Dec. 15
------------------------------------------------------------------
In two separate orders, the Bankruptcy Court has extended the
deadline for the Official Committee of Unsecured Creditors of
Fontainebleau Las Vegas Holdings LLC to challenge the claims and
liens of the prepetition term lenders or to prosecute avoidance
actions against the Term Lenders and other related parties through
and including December 15, 2009, without prejudice to being
further extended.
The Court also ruled that, pursuant to Section 1103 and 1109 of
the Bankruptcy Code, the Committee is granted derivative standing
and is authorized to commence and prosecute the Claims and
Defenses against the Released Parties, as those terms are defined
in the Interim Cash Collateral Orders entered by the Court.
Court Explains Decision
The Court said it was not persuaded by the arguments of the
Debtors or Term Lender Steering Committee that an extension of
the deadline for the Creditors Committee to challenge the claims
and liens of the Term Lenders or to prosecute avoidance actions
against the Term Lenders and other related parties would
prejudice them. But even if prejudice could be shown, which
Judge A. Jay Cristol avers it has not, the Court believes that
whatever prejudice may be suffered by either the Debtors or Term
Lenders is surely outweighed by the prejudice the Creditors
Committee may experience if the current deadline to challenge
claims is not extended.
Originally, Judge Cristol relates, when the Court set the date by
which the challenges were to have been filed, the Court
contemplated there would be an agreement for the sale of the
subject property, with sale procedures in place.
According to Judge Cristol, it was deemed to be in the best
interest of the bankruptcy estates to have all claims known by
the deadline before consummation of the sale.
The Court, hence, believes it is best to extend the deadline so
it does not expire until, at the very least, sale procedures are
established, to provide the Creditors Committee a full and fair
opportunity to evaluate the case and determine the existence and
scope of any potential claims against the Term Lenders and
others.
About Fontainebleau Las Vegas
Fontainebleau Las Vegas -- http://www.fontainebleau.com/-- is
constructing a luxury resort, Fontainebleu Las Vegas, on the
northern end of the Las Vegas Strip.
Fontainebleau Las Vegas Holdings, LLC, Fontainebleau Las Vegas,
LLC, Fontainebleau Las Vegas Capital Corp. filed for Chapter 11
protection on June 9, 2009 (Bankr. S.D. Fla. Lead Case No.
09-21481). Judge A. Jay Cristol presides over the Debtors' cases.
Scott L Baena, Esq., at Bilzin Sumberg Baena Price & Axelrod LLP,
represents the Debtors in their restructuring efforts. The
Debtors' Financial Advisor are Moelis & Company LLC and Citadel
Derivatives Group LLC. The Debtors' Special Litigation Counsel is
David M. Friedman, Esq., at Kasowitz, Benson, Torres & Friedman
LLP and the Debtors' Special Counsel is Jack J. Kessler, Esq., and
Alan Rubin, Esq., at Buchanan Ingersoll & Rooney PC. The Debtors'
Claims Agent is Kurtzman Carson Consulting LLC. Attorneys at
Genovese Joblove & Battista, P.A., and Fox Rothschild, LLP,
represent the Official Committee of Unsecured Creditors.
As of June 9, 2009, Fontainebleau Las Vegas LLC listed more than
$1 billion in debt and a similar amount in assets, while each of
Fontainebleau Las Vegas Capital Corp. and Fontainebleau Las Vegas
Holdings, LLC, listed less than $50,000 in assets and more than
$1 billion in debts.
Bankruptcy Creditors' Service, Inc., publishes Fontainebleau
Bankruptcy News. The newsletter tracks the Chapter 11 proceedings
of Fontainebleau Las Vegas Holdings, LLC, and its debtor-
affiliates. (http://bankrupt.com/newsstand/or 215/945-7000)
FONTAINEBLEAU LV: Proposes Cash Collateral Use Until November 27
----------------------------------------------------------------
Fontainebleau Las Vegas Holdings LLC and its units seek the
Court's permission to utilize approximately $144,853 of Cash
Collateral over a period ending November 27, 2009, to preserve and
protect the "Tier A" casino hotel resort -- the Project -- pending
consideration by the Court on November 23, 2009, of the Motion to
borrow $51,503,734, from the DIP Lenders, including Nevada Gaming
Ventures, Inc., as the DIP Agent.
The Debtors propose to use the funds pursuant to a Budget for the
period from November 16, through November 22, and pursuant
to a Proposed Interim Cash Collateral Order, copies of which is
available for free at
http://bankrupt.com/misc/FB_Budget_Nov16toNov22.pdf
http://bankrupt.com/misc/FB_PropIntCashCollOrd1118.pdf
The Debtors will utilize the $353,786 of Cash Collateral in order
to fund (a) security for the Project site, (b) the Debtors'
payroll and reimbursement of employee expenses, (c) payment of
bills for electricity, water, and internet connectivity; (d)
payment of critical administrative payables relating to health
and safety or that are required to maintain county permits
consisting of a ground water filtration system, generator
service, and maintenance of the building's elevators and
sprinkler systems , and (e) certain pass-through salary and
benefits expenses of Turnberry West Construction, Inc. for
critical services including fire watch, electrical monitoring,
elevator, security, and water leak monitoring, recordkeeping and
maintenance of permitting records, and liaising with Clark County
officials, subcontractors, and prospective investors, lenders,
and their representatives regarding completion issues and
analysis.
The Debtors note that the Proposed Interim Cash Collateral Order
includes Adequate Protection Obligations previously approved by
the Court including (a) a Priming Lien in favor of the
Prepetition Lenders solely to the extent of diminution in Cash
Collateral as a result of its use authorized; (b) a limited
waiver of the Debtors' surcharge rights under Section 506(c) of
the Bankruptcy Code in respect of Cash Collateral being utilized;
(c) a superpriority claim pursuant to Section 507(b) to the
extent of the Adequate Protection Obligations being specified;
(d) certain reporting and access obligations; (e) provisions and
findings that bind a subsequently appointed trustee; and (f)
provisions modifying the automatic stay to provide remedies to
the Prepetition Term Lenders after the occurrence and
continuation of a Termination Event.
* * *
The Court has also authorized the Debtors to utilize
approximately $144,853 of the Cash Collateral over a period
ending November 20, 2009, to preserve and protect the Project.
About Fontainebleau Las Vegas
Fontainebleau Las Vegas -- http://www.fontainebleau.com/-- is
constructing a luxury resort, Fontainebleu Las Vegas, on the
northern end of the Las Vegas Strip.
Fontainebleau Las Vegas Holdings, LLC, Fontainebleau Las Vegas,
LLC, Fontainebleau Las Vegas Capital Corp. filed for Chapter 11
protection on June 9, 2009 (Bankr. S.D. Fla. Lead Case No.
09-21481). Judge A. Jay Cristol presides over the Debtors' cases.
Scott L Baena, Esq., at Bilzin Sumberg Baena Price & Axelrod LLP,
represents the Debtors in their restructuring efforts. The
Debtors' Financial Advisor are Moelis & Company LLC and Citadel
Derivatives Group LLC. The Debtors' Special Litigation Counsel is
David M. Friedman, Esq., at Kasowitz, Benson, Torres & Friedman
LLP and the Debtors' Special Counsel is Jack J. Kessler, Esq., and
Alan Rubin, Esq., at Buchanan Ingersoll & Rooney PC. The Debtors'
Claims Agent is Kurtzman Carson Consulting LLC. Attorneys at
Genovese Joblove & Battista, P.A., and Fox Rothschild, LLP,
represent the Official Committee of Unsecured Creditors.
As of June 9, 2009, Fontainebleau Las Vegas LLC listed more than
$1 billion in debt and a similar amount in assets, while each of
Fontainebleau Las Vegas Capital Corp. and Fontainebleau Las Vegas
Holdings, LLC, listed less than $50,000 in assets and more than
$1 billion in debts.
Bankruptcy Creditors' Service, Inc., publishes Fontainebleau
Bankruptcy News. The newsletter tracks the Chapter 11 proceedings
of Fontainebleau Las Vegas Holdings, LLC, and its debtor-
affiliates. (http://bankrupt.com/newsstand/or 215/945-7000)
FONTAINEBLEAU: Icahn Replaces Penn as Stalking Horse Bidder
-----------------------------------------------------------
Carl Icahn outbid Penn National Gaming Inc. to place a starting
bid of $155 million for the unfinished Fontainebleau Las Vegas
hotel-casino project, reports The Wall Street Journal.
To recall, Penn National has offered to buy the "Tier A" casino
hotel resort for $50 million, plus $51.5 million for debtor-in-
possession financing to fund the project's costs until a sale
occurs.
The Journal's Alexandra Berzon said, Icahn Enterprises LP, a
subsidiary of Mr. Icahn's firm, outbid Penn National $155 million
to $145 million to become what is known as the "stalking horse"
bidder, setting the base price for auction.
"Icahn . . . triggered a bidding war in court today, leading to
its so-called stalking-horse offer of $105 million, plus $51.5
million in debtor-in-possession financing," reports Bloomberg
News.
Penn National Chief Operating Officer Timothy Wilmott said the
company decided to stop bidding at $145 million because it doesn't
believe the casino-hotel is worth more than the cost to finish the
project given that gambling and hotel revenues in Las Vegas have
fallen amid the downturn, notes the Journal.
"One of the concerns we have is that the value of this property is
really the value to complete the asset, and every dollar you spend
up front now the customer never sees," the Journal quotes Mr.
Wilmott as saying. "That's a concern of ours that has caused us
to pause."
Mr. Wilmott noted, however, that Penn National may still bid on
the project once it goes up for auction, says the report.
The auction is slated for January 2010.
About Fontainebleau Las Vegas
Fontainebleau Las Vegas -- http://www.fontainebleau.com/-- is
constructing a luxury resort, Fontainebleu Las Vegas, on the
northern end of the Las Vegas Strip.
Fontainebleau Las Vegas Holdings, LLC, Fontainebleau Las Vegas,
LLC, Fontainebleau Las Vegas Capital Corp. filed for Chapter 11
protection on June 9, 2009 (Bankr. S.D. Fla. Lead Case No.
09-21481). Judge A. Jay Cristol presides over the Debtors' cases.
Scott L Baena, Esq., at Bilzin Sumberg Baena Price & Axelrod LLP,
represents the Debtors in their restructuring efforts. The
Debtors' Financial Advisor are Moelis & Company LLC and Citadel
Derivatives Group LLC. The Debtors' Special Litigation Counsel is
David M. Friedman, Esq., at Kasowitz, Benson, Torres & Friedman
LLP and the Debtors' Special Counsel is Jack J. Kessler, Esq., and
Alan Rubin, Esq., at Buchanan Ingersoll & Rooney PC. The Debtors'
Claims Agent is Kurtzman Carson Consulting LLC. Attorneys at
Genovese Joblove & Battista, P.A., and Fox Rothschild, LLP,
represent the Official Committee of Unsecured Creditors.
As of June 9, 2009, Fontainebleau Las Vegas LLC listed more than
$1 billion in debt and a similar amount in assets, while each of
Fontainebleau Las Vegas Capital Corp. and Fontainebleau Las Vegas
Holdings, LLC, listed less than $50,000 in assets and more than
$1 billion in debts.
Bankruptcy Creditors' Service, Inc., publishes Fontainebleau
Bankruptcy News. The newsletter tracks the Chapter 11 proceedings
of Fontainebleau Las Vegas Holdings, LLC, and its debtor-
affiliates. (http://bankrupt.com/newsstand/or 215/945-7000)
FOOTHILLS TEXAS: To Present Plan for Confirmation on Dec. 28
------------------------------------------------------------
Foothills Texas, Inc., and its debtor-affiliates will seek
confirmation of their first amended joint plan of reorganization
at a hearing scheduled for December 28. Ballots and objections to
the Plan are due December 21.
A copy of the Company's First Amended Disclosure Statement is
available for free at:
http://bankrupt.com/misc/FoothillsTexas_amendedDS.pdf
A copy of the Company's First Amended Plan of Reorganization is
available for free at:
http://bankrupt.com/misc/FoothillsTexas_AmendedPlan.pdf
According to the Disclosure Statement, the Plan provides for one
of the prepetition lenders, Regiment Capital Special Situations
Fund III LP , to acquire the Debtors by accepting stock in
Reorganized Foothills Resources in lieu of cash or collateral on
account of a portion of its secured prepetition loans to the
Debtors, and for all the prepetition common and preferred stock
interest in Foothills Resources, to be canceled, but will remain
outstanding, all of which interests will continue to be owned
directly by Reorganized Foothills Resources.
The other claims will be paid in cash derived from the exit
facility to be executed in accordance with the plan, with notes or
with beneficial interests issued in connection with the Trust.
Foothills Texas, Inc. -- http://www.foothills-resources.com/--
sought protection under Chapter 11 (Bankr. D. Del. Case No. 09-
10452) on February 11, 2009. Charles R. Gibbs, Esq., David F.
Staber, Esq., and Sarah Link Schultz, Esq., at Akin Gump Strauss
Hauer & Feld, LLP, in Dallas, Tex., and Norman L. Pernick, Esq.,
at Cole, Schotz, Meisel, Forman & Leonard, in Wilmington, Del.,
represent the Debtor. In its Chapter 11 petition, the Debtor
disclosed $89.5 million in assets and $78.8 million in
liabilities, of which $71.2 million is owed to secured lenders.
Regiment Capital Special Situations Fund III LP provided
$2.5 million of postpetition financing.
FORD MOTOR CREDIT: Reports $427 Million Net Income in Q3 2009
-------------------------------------------------------------
Ford Motor Credit Company LLC reported net income of $427 million
in the third quarter ended September 30, 2009, an increase of
$332 million from earnings of $95 million a year earlier. On a
pre-tax basis, Ford Credit earned $677 million in the third
quarter, compared with $161 million in the previous year.
The Company says the increase in pre-tax earnings primarily
reflected lower depreciation expense for leased vehicles due to
higher auction values, a lower provision for credit losses, and
lower operating costs. These factors were offset partially by
lower volume.
"We always adapt our operations to changing business conditions
and had the additional benefit in the third quarter of improved
used vehicle auction markets. We continue to profitably support
Ford Motor Company sales," Chairman and CEO Mike Bannister said.
On September 30, 2009, Ford Credit's on-balance sheet net
receivables totaled $92.5 billion, compared with $115.8 billion at
year-end 2008. Managed receivables were $94.4 billion on
September 30, 2009, down from $117.7 billion on December 31, 2008.
The lower receivables primarily reflected lower industry volumes,
lower dealer stocks, and the transition of Jaguar, Land Rover and
Mazda financing to other finance providers.
At September 30, 2009, managed leverage was 7.7 to 1, compared
with 9.9 to 1 at December 31, 2008. In the third quarter of 2009,
Ford Credit paid a cash distribution of $400 million and a non-
cash distribution of $31 million for its ownership interest in AB
Volvofinans to its immediate parent, Ford Holdings LLC.
Ford Credit said it expects to be profitable in the fourth quarter
of 2009. The Company anticipates managed receivables at year-end
2009 to be in the range of $90 billion to $95 billion, consistent
with managed receivables of $94 billion at September 30, 2009.
Ford Credit said it expects reduced profits in 2010 based on lower
average receivables and non-recurrence of favorable 2009 factors.
Balance Sheet
At September 30, 2009, Ford Motor Credit Company LLC and
subsidiaries' consolidated balance sheet showed $124.8 billion in
total assets, $114.3 billion in total liabilities, and
$10.5 billion in total shareholders' interest.
A full-text copy of the Company's Form 10-Q is available for free
at http://researcharchives.com/t/s?4a06
Liquidity
At September 30, 2009, committed capacity and cash totaled
$58.4 billion, of which $44.6 billion could be utilized (after
adjusting for capacity in excess of eligible receivables of
$7.7 billion and cash required to support on-balance sheet
securitization transactions of $6.1 billion). At September 30,
2009, $20.7 billion was utilized, leaving $23.9 billion available
for use (including $17.3 billion of cash, cash equivalents and
marketable securities, but excluding marketable securities related
to insurance activities, and cash and cash equivalents to support
on-balance sheet securitization transactions). Liquidity
available for use was about 25% of managed receivables, compared
with 18% at year-end 2008. In addition to the $23.9 billion of
liquidity available for use, the $7.7 billion of capacity in
excess of eligible receivables provides the Company with an
alternative for funding future purchases or originations and gives
it flexibility to shift capacity to alternate markets and asset-
classes.
At September 30, 2009, cash, cash equivalents, and marketable
securities (excluding marketable securities related to insurance
activities) totaled $23.4 billion, compared with $23.6 billion at
year-end 2008.
At September 30, 2009, the Company and its subsidiaries, including
FCE Bank plc, had $1.3 billion of contractually-committed
unsecured credit facilities with financial institutions, of which
$671 million were available for use. Of the $1.3 billion of
contractually-committed credit facilities, almost all are FCE
worldwide credit facilities.
In addition, at September 30, 2009, the Company had $10.4 billion
of contractually-committed liquidity facilities provided by banks
to support the Company's FCAR Owner Trust ("FCAR") program. This
includes $114 million provided by Lehman Brothers Bank, FSB, which
is guaranteed by Lehman Brothers Holdings Inc. Lehman Brothers
Holdings Inc. filed for protection under Chapter 11 of the U.S.
Bankruptcy Code on September 15, 2008.
About Ford Motor Credit
Headquartered in Dearborn, Michigan, Ford Motor Credit Company LLC
-- http://www.fordcredit.com/-- is one of the world's largest
automotive finance companies and has supported the sale of Ford
Motor Company products since 1959. Ford Credit is an indirect,
wholly owned subsidiary of Ford. It provides automotive financing
for Ford, Lincoln, Mercury and Volvo dealers and customers.
* * *
On November 2, 2009, DBRS placed the ratings assigned to the
Company under review with positive implications; Fitch changed the
outlook assigned to the Company to positive from stable; and
Moody's upgraded the senior unsecured credit rating assigned to
the Company to B3 from Caa1, while keeping the long-term ratings
assigned to the Company under review for a further possible
upgrade. On November 3, 2009, S&P upgraded the senior unsecured
credit rating assigned to the Company to B- from CCC+ with a
stable outlook. Ford Motor Credit carries Firch's C short-term
credit rating.
FREEDOM COMMUNICATIONS: CEO, CFO Say Bankruptcy Plan "Is Fair"
--------------------------------------------------------------
Mary Ann Milbourn at the Orange County Register reports that
Freedom Communications' Chief Executive Burl Osborne and Chief
Financial Officer Mark McEachen defended the Debtors' plan of
reorganization during a conference call with a group of Freedom
reporters and editors last week.
Freedom owns Orange County Register.
According to the Troubled Company Reporter, pre-bankruptcy,
Freedom reached agreement with its lenders on a restructuring of
the Company's debt under Chapter 11. Pursuant to the plan support
agreement, lenders owed $771 million will receive $325 million in
two secured term loans plus 100% of the stock, subject to
dilution. Unsecured creditors would split $5 million in cash if
they don't object to the plan, and nothing if they object.
Suppliers who continue to provide goods and services will receive
full payment for their prepetition claims. Existing stockholders
-- members of the founding Hoiles family and two private equity
firms -- would get 2% of the new stock, along with warrants to
acquire another 10%, if they don't object to the plan. A Plan
Support Agreement with the lenders will be terminated by the
lenders if the Debtors do not obtain confirmation of the Plan
within five months from the Petition Date. Deadline to consummate
the Plan is 11 months after the Petition Date.
The Register reports that the unsecured creditors committee has
called the plan the product of "an unholy alliance" between the
banks and the current board of directors. The creditors pointed
out they are being offered just $5 million of the $300 million
they are owed.
The Register also relates that former Chief Executive Alan Bell,
who is leading an effort to recover the pension money, accused the
company of needless cruelty. He said these people worked hard,
believing that they would be paid pensions.
According to the Register, CEO Osborne said they are making
progress with the effort to restructure the Company and expects to
complete the bankruptcy process by June 2010.
CFO McEachen said the plan is fair because the shareholders will
get no stake if the unsecured creditors do not approve the
reorganization plan. CFO McEachen also said the $300 million
figure had been misunderstood. He said it represented total
liabilities but that "less than $25 million" is owed to the
unsecured creditors. "That number, that ratio of $5 million to
less than $25 million is a lot better recovery than in usual
recoveries," Mr. McEachen said.
The Register notes that the $25 million figure does not include a
separate $28.9 million legal settlement with Register newspaper
carriers. The Company contends the bankruptcy filing voided the
settlement.
According to the Register, Rob Feinstein, Esq., counsel to the
committee, said he took the $300 million figure from the company's
bankruptcy filing. Mr. Feinstein, according to the Register, said
it is unfair to give the unsecured creditors less then they are
owed and then make any payment contingent on the existing
shareholders retaining a stake in the company. "Creditors are
impaired all the time, but you don't impair the creditors and give
more to the shareholders," he said.
The Register notes that among the unsecured creditors are about
100 highly-compensated current and former executives and their
survivors who are owed about $17 million in pension money. The
Company cut off those pension payments as part of the bankruptcy.
Mr. Osborne, according to the Register, said he was sympathetic to
those who lost their pensions but that such plans often are voided
in bankruptcy proceedings. "It's not that someone at Freedom did
not like this program and wanted to get rid of it," Mr. Osborne
said.
About Freedom Communications
Freedom Communications, headquartered in Irvine, Calif., is a
national privately owned information and entertainment company of
print publications, broadcast television stations and interactive
businesses. The company's print portfolio includes approximately
90 daily and weekly publications, including approximately 30 daily
newspapers, plus ancillary magazines and other specialty
publications. The broadcast company's stations -- five CBS, two
ABC network affiliates and one CW affiliate -- reach more than
3 million households across the country. The Company's news,
information and entertainment Web sites complement its print and
broadcast properties.
Freedom Communications filed for Chapter 11 on Sept. 1, 2009
(Bankr. D. Del. Case No. 09-13046). Attorneys at Young Conaway
Stargatt & Taylor, and Latham & Watkins LLP serve as Chapter 11
counsel. Houlihan, Lokey, Howard & Zukin, Inc., serves as
financial advisor while AlixPartners LLC is restructuring
consultant. Logan & Co. serves as claims and notice agent.
Freedom Communications had $757,000,000 in assets against debts of
$1,077,000,000 as of July 31, 2009.
FREEDOM COMMUNICATIONS: Receives Bid for East Valley Tribune
------------------------------------------------------------
Freedom Communications has received a letter of intent to purchase
the East Valley Tribune and keep the Pulitzer-Prize winning
newspaper and Web site operating, Publisher Julie Moreno said
Friday, according to an article by Tribune's Ed Taylor.
The buyer was not identified. Ms. Moreno said Freedom will seek
approval from the U.S. Bankruptcy Court for the District of
Delaware to complete the sale by the end of this year, Mr. Taylor
relates.
Freedom had said earlier this month that it planned to close the
newspaper and Web site at the end of this year, Mr. Taylor says.
Mary Ann Milbourn at the Orange County Register, another newspaper
owned by Freedom, reports that Freedom's Chief Executive Burl
Osborne and Chief Financial Officer Mark McEachen told a group of
Freedom reporters and editors at a conference call Thursday, the
buyer came in with a last-minute offer that would save a "large
number" of the jobs at East Valley Tribune.
Ms. Milbourn says the unsecured creditors committee in Freedom's
case has asked the Bankruptcy Court for permission to seek buyers
or to offer alternative proposals for the Company.
According to Mr. Taylor, Ms. Moreno said more information will be
announced this week.
Mr. Taylor reports that, according to Ms. Moreno, the Tribune
press equipment will be part of the sale, but it might not include
the Tribune building and land in downtown Mesa. The Sun City
Daily News-Sun and the Ahwatukee Foothills News, two Freedom-owned
papers the California company plans to continue, are not part of
the proposed sale, Ms. Moreno said.
Mr. McEachen told reporters at the conference that Freedom is not
currently shopping the Company and has declined several offers by
what he called "bottom feeders," according to Ms. Milbourn.
About Freedom Communications
Freedom Communications, headquartered in Irvine, Calif., is a
national privately owned information and entertainment company of
print publications, broadcast television stations and interactive
businesses. The company's print portfolio includes approximately
90 daily and weekly publications, including approximately 30 daily
newspapers, plus ancillary magazines and other specialty
publications. The broadcast company's stations -- five CBS, two
ABC network affiliates and one CW affiliate -- reach more than
3 million households across the country. The Company's news,
information and entertainment Web sites complement its print and
broadcast properties.
Freedom Communications filed for Chapter 11 on Sept. 1, 2009
(Bankr. D. Del. Case No. 09-13046). Attorneys at Young Conaway
Stargatt & Taylor, and Latham & Watkins LLP serve as Chapter 11
counsel. Houlihan, Lokey, Howard & Zukin, Inc., serves as
financial advisor while AlixPartners LLC is restructuring
consultant. Logan & Co. serves as claims and notice agent.
Freedom Communications had $757,000,000 in assets against debts of
$1,077,000,000 as of July 31, 2009.
FREMONT GENERAL: Parties-in-Interest Wants Examiner Appointed
-------------------------------------------------------------
John M. Mlynick and Andre Mutchnik, parties-in-interest, ask the
U.S. Bankruptcy Court for the Central District of California to
approve: (i) the appointment of an examiner in the Chapter 11
cases of Fremont General Corp.; and (ii) terminate for cause the
current executive team.
The parties allege that the Debtor is:
* dishonest with the Court -- based on the entries of fee
applications, the counsel's advice benefited the executives
rather than the Debtor;
* mismanaged the Fremont Reorganizing Corporation, fka Fremont
Investment & Loan business -- both severance and bonuses
would be adversely affected had the Debtor's subsidiaries as
FRC been subject to Bankruptcy Code.
The parties relate that the assets of Fremont are contained in a
non-debtor subsidiary FRC. The parties add that because of its
non-debtor status, the Debtor's executives have an unfettered and
unchecked control over FRC.
The parties propose a hearing on the motion on Dec. 3, 2009, at
2:00 p.m. at Courtroom 5A 411 West Fourth Street, Santa Ana,
California.
Based in Santa Monica, California, Fremont General Corp. (OTC:
FMNTQ) -- http://www.fremontgeneral.com/-- was a financial
services holding company with $8.8 billion in total assets at
September 30, 2007. Fremont General ceased being a financial
services holding company on July 25, 2008, when its wholly owned
bank subsidiary, Fremont Reorganizing Corporation (f/k/a Fremont
Investment & Loan) completed the sale of its assets, including all
of its 22 branches, and 100% of its $5.2 billion of deposits to
CapitalSource Bank.
Fremont General filed for Chapter 11 protection on June 18, 2008,
(Bankr. C.D. Calif. Case No. 08-13421). Robert W. Jones, Esq.,
and J. Maxwell Tucker, Esq., at Patton Boggs LLP, Theodore
Stolman, Esq., Scott H. Yun, Esq., and Whitman L. Holt, Esq., at
Stutman Treister & Glatt, represent the Debtor as counsel.
Kurtzman Carson Consultants LLC is the Debtor's noticing
agent and claims processor. Lee R. Bogdanoff, Esq., Jonathan S.
Shenson, Esq., and Brian M. Metcalf, at Klee, Tuchin, Bogdanoff &
Stern LLP, represent the Official Committee of Unsecured
Creditors as counsel. Fremont's formal schedules showed
$330,036,435 in total assets and $326,560,878 in total debts.
GENMAR HOLDINGS: Wins Nod to Sell Minnesota Marina for $3-Mil.
--------------------------------------------------------------
Genmar Holdings Inc. won permission from the Bankruptcy Court to
sell a marina in Orono, Minnesota, for $3 million. The Court also
approved selling 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.
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.
HALO TECHNOLOGY: U.S. Trustee Withdraws Motion to Convert Case
--------------------------------------------------------------
Diana G. Adams, the U.S. Trustee for Region 2, withdrew her
motion, filed with U.S. Bankruptcy Court for the District of
Connecticut, to convert or dismiss Halo Technology Holdings,
Inc.'s Chapter 11 cases. The U.S. Trustee reserves the right to
reclaim her motion if circumstances warrant.
As reported in the Troubled Company Reporter on May 26, 2009,
the U.S. Trustee asked the Court for conversion of the case to a
Chapter 7, or dismiss the Debtors' bankruptcy cases, for failure
to file any monthly operating reports during the pendency of their
respective Chapter 11 cases and for failure to pay the quarterly
fees pursuant to Sec. 1930(a)(6) of the U.S. Code.
Greenwich, Connecticut-based Halo Technology Holdings, Inc. fka
Warp Technology Holdings Inc. -- http://www.haloholdings.com/--
is a holding company whose subsidiaries operate enterprise
software and information technology businesses. The company and
its affiliates filed for chapter 11 protection on Aug. 20, 2007
(Bankr. D. Conn. Lead Case No. 07-50480). David Wallman, Esq., at
The Wallman Law Firm, LLC; lawyers at Zeisler & Zeisler P.C.; and
Jeffrey R. Gleit, Esq., at Kasowitz Benson Torres & Friedman, LLP,
serve as the Debtors' counsel. James C. Graham, Esq., Kristin B.
Mayhew, Esq., at Pepe & Hazard; and Patrick M. Birney, Esq., at
Robinson & Cole LLP, represent the pfficial committee of unsecured
creditors as counsel. At March 31, 2007, the company reported
total assets of $47,344,373 and total liabilities of $45,494,297.
HANESBRANDS INC: Moody's Assigns 'Ba1' Rating on $400 Mil. Loan
---------------------------------------------------------------
Moody's Investors Service assigned a Ba1 rating to Hanesbrands
Inc.'s proposed first lien credit facilities, comprised of a
$400 million revolving credit facility expiring in 2013 and a
$750 million term loan due in 2015. Hanesbrands' Ba3 Corporate
Family and Probability of Default ratings were affirmed along with
the company's long-term debt ratings and SGL-2 Speculative Grade
Liquidity rating.
Proceeds from the proposed credit facilities will be used to
refinance the company's existing Ba1 $500 million revolving credit
facility expiring in 2011 and Ba1 $850 million of existing first
lien term loans due in 2013. The ratings on the existing credit
facilities will be withdrawn upon successful closing of the new
transactions.
The Ba1 rating assigned to the new credit facilities reflects
their first priority perfected lien in substantially all assets of
Hanesbrands and certain subsidiaries of the company and their
priority ranking to the companies existing $450 million second
lien term loan and $494 million senior unsecured notes.
Hanesbrands has publicly stated that it may also pursue the
refinancing of its existing $450 million second lien loans due
2014. Provided the incremental funding necessary to refinance the
second lien term loans is from sources that rank junior to the new
term loans, Moody's do not anticipate there would be any change to
the rating to the proposed first lien credit facilities.
The affirmation of Hanesbrands' Ba3 Corporate Family Rating
considers that the proposed refinancing transaction is neutral to
the company's leverage which Moody's considers to be high.
Debt/EBITDA is currently about 6.0 times. The affirmation also
acknowledges the relatively commoditized product categories in
which the company operates, and significant customer
concentrations. Hanesbrands' ratings are supported by the solid
size and scale of the company's operations, its leading market
shares, and relatively stable product demand characteristics.
Although the proposed transaction will be neutral in terms of
leverage, it will significantly extend Hanesbrands' debt
maturities.
New ratings assigned:
-- $400 million senior secured first lien revolving credit
facility expiring 2013 - Ba1 (LGD 2, 22%)
-- $750 million senior secured first lien term loan B due 2015 -
Ba1 (LGD 2, 22%)
Ratings affirmed and LGD point assessments revised where
applicable:
-- Corporate Family Rating at Ba3
-- Probability of Default Rating at Ba3
-- Speculative Grade Liquidity rating at SGL-2
-- $500 million first lien revolver expiring 2011 at Ba1 (LGD 2,
23%)
-- $850 million first lien term loans due 2013 at Ba1 (LGD 2,
23%)
-- $450 million second lien term loan due 2014 at Ba3 (LGD 4,
56% from LGD 4, 57%)
-- $494 million senior unsecured notes due 2014 at B2 (LGD 5,
84%)
Moody's last rating action on Hanesbrands was on November 4, 2009
when the company's rating outlook was revised to stable from
negative.
Hanesbrands Inc. is a major manufacturer and marketer of branded
innerwear and outerwear apparel. The company markets products
under the "Hanes", "Champion", "Playtex", "Bali", "Wonderbra" and
"L'eggs" brands. The company has annual revenue of about
$3.9 billion.
HERBST GAMING: Bondholders Challenge Plan, Commence Lawsuit
-----------------------------------------------------------
Daily Bankruptcy Review reports that Herbst Gaming Inc.'s
bondholders, who stand to be wiped out under the Company owner's
proposed Chapter 11 restructuring, are suing the Debtor over its
plan to exit bankruptcy protection under the control of its bank
lenders.
As reported by the Troubled Company Reporter on November 4, 2009,
Herbst Gaming won court confirmation of a reorganization plan that
will hand the company to its lenders, leaving nothing for
noteholders owed $363 million. Steven Church at Bloomberg said
that U.S. Bankruptcy Judge Gregg W. Zive approved the plan,
overruling objections from the noteholders and other low-ranking
creditors, who claim the three Herbst brothers drove their company
into bankruptcy by doubling its debt to $1.15 billion through a
pair of acquisitions in 2007.
As part of the reorganization plan, the company agreed not to file
lawsuits related to the 2007 expansion, a decision opposed by the
Official Committee of Unsecured Creditors. The creditors argued
they could potentially be paid more by suing lenders and the
Herbst family. "I find the probability of success to be very
low," Judge Zive said in court, referring to the potential
lawsuits.
The Chapter 11 Plan
As reported by the Troubled Company Reporter on August 11, 2009,
the Debtors have determined that the enterprise value of their
Assets, consisting of the Casino Business and Slot Route Business
ranges from $500,000,000 to $600,000,000.
The holders of senior credit facility claims owed $847,363,000 in
principal plus accrued interest of $29,103,000, will receive 100%
of the stock. Holders of Senior Credit Facility Claims will
receive indirectly through the ownership of Herbst Gaming LLC 100%
ownership of the Reorganized Debtors and $350,000,000 of
restructured debt.
Holders of 7% Senior Subordinated Notes Due November 15, 2014 and
8.125% Senior Subordinated Notes Due June 1, 2012, are
contractually subordinated to the Senior Credit Facility Claims,
won't receive anything under the Plan, in light of the enterprise
value of the assets.
Holders of allowed general unsecured claims will be paid in full.
The Debtors intend to assume and honor all Slot Route Contracts.
Equity Interests in Herbst Gaming will be canceled and equity
holders will not receive anything under the Plan.
A full-text copy of the second amended disclosure statement is
available for free at http://ResearchArchives.com/t/s?41e7
About Herbst Gaming
Headquartered in Reno, Nevada, Herbst Gaming Inc. --
http://www.herbstgaming.com/-- is a diversified gaming company.
The Company and its subsidaries focuses on two business lines,
slot route operations and casino operations.
The slot route business involves the exclusive installation and
operation of slot machines in non-casino locations, such as
grocery stores, drug stores, convenience stores, bars and
restaurants throughout Nevada. As of March 31, 2009, the slot
route Debtors operated approximately 6,900 slot machines machines
through Nevada.
The casino business consists of 12 casinos in Nevada, and two in
Missouri and one in Iowa. As of the petition date, the Nevada
casinos had an aggregate of roughly 5,082 hotel rooms, 329
recreational vehicle spaces/hookups, 6,800 slot machines and 138
table games. As of the petition date, the non-Nevada casinos had
an aggregate of roughly 2,300 slot machines and 47 table games.
The Iowa casino also offers roughly 60 all-suite hotel rooms and
65 RV spaces with utility hookups.
The Company and 17 of its affiliates filed for Chapter
11 protection on March 22, 2009 (Bankr. D. Nev. Lead Case No.
09-50752). Thomas H. Fell, Esq., and Gerald M. Gordon, Esq., at
Gordon Silver, represent the Debtors in their restructuring
efforts. Herbst Gaming had $919.1 million in total assets; and
$33.5 million in total liabilities not subject to compromise and
$1.24 billion in liabilities subject to compromise, resulting in
$361.0 million in stockholders' deficiency as of March 31, 2009.
HERTZ CORPORATION: DBRS Confirms Issuer Rating at 'BB'
------------------------------------------------------
DBRS has confirmed the Issuer Rating of Hertz Corporation (Hertz
or the Company) at BB. The trend on all ratings remains Stable.
The ratings reflect the Company's strong business franchise and
leading market position in the daily vehicle rental business, its
sizeable variable cost structure and its solid fleet management.
The ratings also consider the ongoing pressure on profitability,
the highly leveraged position and the reliance on wholesale
funding markets.
The strong business franchise, combined with solid fleet
management has allowed Hertz to navigate successfully through
seasonal markets and various business cycles. However, beginning
in the latter part of 2008 and into 2009, profitability and
revenue generation have been pressured by the weakened general
economic environment in the U.S. and Europe. For the nine months
ending September 30, 2009, Hertz reported a loss of $124.0 million
compared with a profit of $10.9 million a year ago. Declining
rental transaction volumes pressured revenue, with the Company's
Car Rental segment experiencing a 16.9% decline year-on-year in
revenues. To counter this, Hertz leveraged its sizeable variable
cost structure by reducing its rental fleet by 9.2%, thereby
removing significant costs and effectively reducing a level of
earnings pressure. For the nine months ended September 30, 2009,
direct operating expenses declined 19.4% from a year ago. Rental
transaction volumes have begun to stabilize, albeit at lower
levels, while pricing improved, especially in the leisure travel
segment. Further, improving used-vehicle markets has resulted in
increasing residual values, reducing the near-term risk of
additional losses associated with the disposal of non-program
vehicles. Nonetheless, DBRS anticipates that earnings will remain
under pressure for the balance of 2009 and well into 2010, as
travel volumes are expected to remain depressed and funding costs
continue to be elevated.
DBRS considers the acquisition of Advantage Rent-A-Car (Advantage)
by Hertz, as a long term positive for the Company, as it provides
Hertz with an established brand in the price-oriented customer
market. Moreover, the acquisition enables Hertz to retain
customers who during periods of economic downturns replace premier
brands with lower cost substitutes. Given the size of the
Advantage transaction, downside risk to this transaction is very
limited, yet the upside adds to the overall franchise strength.
The rating considers the funding profile, which has improved with
the closing of the $2.14 billion fleet debt refinancing and the
recent issuance of $1.2 billion of asset-backed notes. These
transactions reduce refinancing risk, given they account for a
significant portion of the $4.2 billion 2010 vehicle related debt
maturities. Further, funding pressure is mitigated by the Federal
Reserve's recent decision allowing rental car ABS financings as
eligible assets under its Term Asset Liquidity Facility (TALF),
which is now slated to continue until March 31, 2010.
Nonetheless, the Company remains reliant on wholesale markets for
its funding.
The Company's highly leveraged position is factored into the
ratings. however the high proportion of fleet-related debt in the
debt stack provides a level of tolerance, given the flexibility in
altering the fleet size and composition. Further, the equity
offering and private placement completed earlier this year reduced
leverage. Importantly, DBRS believes this transaction
demonstrates the strength of the franchise and the Company's
ability to access capital during difficult market conditions.
Finally, the ratings consider the highly encumbered nature of the
balance sheet which is factored into the one notch differential
between the Issuer and the Senior Unsecured Debt ratings.
The trend is Stable. Although DBRS expects that near-term
underlying performance will be under a level of pressure, the
presence of large variable costs within its cost structure
provides Hertz with significant financial flexibility to adjust
its business for the economic cycle. Further, the Stable trend
reflects the more recently stabilized operating environment and
the reduced level of refinancing risk.
HOME BUILDERS: Financial Woes Prompt Chapter 11 Filing
------------------------------------------------------
Home Builders Association of Greater Chicago filed for bankruptcy
in the U.S. Bankruptcy Court in Chicago, citing inability to
support current debt load to the creditors crisis and 90% decline
in building permits within the Chicago area, according to Chicago
Tribune.
The company said it will continue to provide services to its
members during its Chapter 11 reorganization, source notes.
Chicago Business says the company has assets of between $100,001
and $500,000, and liabilities of between $1,000,001 and
$10 million in its petition.
Home Builders Association of Greater Chicago is a home builder.
HORIZON FINANCIAL: Posts $35.1-Mil. Net Loss in September Quarter
-----------------------------------------------------------------
Horizon Financial Corp. has issued its earnings release for the
quarter ended September 30, 2009.
Horizon Financial Corp. reported a net loss of $35.1 million, or
$2.93 per share, for the three months ended September 30, 2009,
and a net loss of $80.8 million, or $6.74 per share, for the six
months ended September 30, 2009. The loss for the quarter
reflects a $29.0 million provision for loan losses, $4.1 million
from losses on real estate owned and collection related expenses,
along with $1.5 million in FDIC insurance premiums. Horizon had a
net loss of $4.6 million, or $0.39 per share, and $2.6 million, or
$0.22 per share, for the quarter and six months ended
September 30, 2008.
The Company says the current period losses have reduced capital
levels significantly and resulted in both the holding company and
its subsidiary bank being considered "critically
undercapitalized," with the Bank's total risk based capital ratio
falling to 1.98%, Tier 1 leverage ratio at 0.77% and the Tier 1
risk based capital ratio at 0.99% as of September 30, 2009.
"Subsequent to the quarter ended September 30, 2009, Congress
passed legislation relating to recovering taxes paid in prior
years. The new law regarding expanding the application of net
operating losses, both for future and past earnings, is a positive
development for us," said Rich Jacobson, President and Chief
Executive Officer. "The new law, passed and signed last week,
will allow us to reverse a valuation allowance and recognize in
earnings a tax benefit of $17.9 million in the third fiscal
quarter. Under the new tax law, companies will be permitted to
carry back 2008 or 2009 losses to reduce taxable income for the
past five years and obtain a refund of taxes already paid. A
refund for the fifth year would be subject to a 50% reduction. In
addition, companies can carry forward previous year losses for up
to 20 years, using the tax credit against future income. This
change to our balance sheet would have placed our capital
situation at 'significantly undercapitalized' at September 30,
2009, rather than 'critically undercapitalized.' Capital ratios
under the new tax treatment would have shown the total risk based
capital ratio at 3.92% rather than the reported 1.98%, Tier 1
leverage ratio at 2.09% rather than the reported 0.77% and the
Tier 1 risk based capital ratio at 2.64% rather than 0.99% as of
September 30, 2009."
"We continue to work through our non-performing asset challenges
while working with investment bankers to raise new capital," said
Mr. Jacobson. "However, no assurances can be made that we will be
successful in this regard.
"As part of our balance sheet management process, we are
deleveraging our balance sheet and have increased liquidity to
meet the needs of our customers," Mr. Jacobson continued. Cash,
interest bearing deposits and investment securities totaled
$221 million, which is almost double the level of liquid
investments on the balance sheet a year ago. Net loans are down
$302 million, or 24% year-over-year. Of the reduction,
$204 million is in the commercial construction portfolio, which is
down 60% from a year ago, and $41 million is in the land
development portfolio, which is down 23% from one year ago. "As a
result of continued declining market values for the collateral
supporting our real estate loan portfolio, we once again set aside
an elevated provision for loan losses. This continued
deterioration of the housing market and the economy has materially
adversely affected our business, liquidity and financial results."
The Company says that core deposits (excluding brokered
certificates of deposits ("CDs") and CDs over $100,000) increased
7% year over year and helped replace $47 million in matured
brokered CDs which, based on the Company's agreement with its
regulators, cannot be renewed. Total deposits increased 2% to
$1.17 billion at September 30, 2009, from $1.15 billion at
September 30, 2008. "All of our team members recognize the value
of core deposits to our franchise, and I am very pleased with
their efforts to work to maintain FDIC insurance coverage for our
customers. Any customer who has questions regarding their account
insurance is encouraged to contact their local Horizon office,"
said Mr. Jacobson.
Total non-performing assets were $128.4 million, or 9.88% of total
assets at September 30, 2009, an improvement from $138.4 million,
or 10.17% of total assets at June 30, 2009, and up from
$80.2 million, or 5.53% of total assets at September 30, 2008.
Net charge-offs during the second quarter of fiscal 2010 were
$44.6 million compared to $23.0 million in the immediate prior
quarter and $5.6 million in the second fiscal quarter a year ago.
The allowance for loan losses was $35.9 million, or 3.83% of net
loans at September 30, 2009, down from $51.5 million or 4.98% of
net loans at June 30, 2009, and up from $25.6 million, or 2.06% of
net loans a year ago.
Progress on Regulatory Agreement
As disclosed in the Company's March 2, 2009 Form 8-K filing with
the Securities and Exchange Commission, Horizon Bank entered into
a formal agreement with its regulators. This agreement became
effective March 3, 2009, and contained target dates to achieve
certain objectives, as outlined in the Form 8-K filing and
Horizon's Form 10-K filing for its fiscal year ended March 31,
2009. "We are pleased to report that all of the requirements that
were due within 90 days were completed on-time and submitted
to our regulators," said Mr. Jacobson. "Also included in the
agreement is a requirement to reduce our balances of loans which
were classified during our September 2008 regulatory examination
as "substandard" and "doubtful" to specified levels within 270
days of the effective date of the agreement. As of the date of
this release, we have met the requirement to reduce substandard
loans to the target levels set forth in the agreement, and are
within $1.0 million of the target for doubtful loans. As a
result, we intend to meet this requirement in advance of the 270
day target date."
The agreement also contains a requirement to increase the
Company's Tier 1 capital ratio to 10% within 270 days. At
September 30, 2009, Horizon Bank's Tier 1 capital was
$10.4 million, representing 0.77% of average assets.
Consolidated Statement of Financial Position
At September 30, 2009, Horizon Financial Corp. had total assets of
$1.30 billion, total liabilities of $1.29 billion, and total
stockholders' equity of $12.8 million.
A full-text copy of the Company's Form 10-Q is available for free
at http://researcharchives.com/t/s?4a29
Going Concern Doubt
As of September 30, 2009, due to the Company's significant net
loss from operations in the three and six months ended
September 30, 2009, deterioration in the credit quality of the
loan portfolio, and the decline in the level of its regulatory
capital to support operations, the Company believes there is
substantial doubt about its ability to continue as a going
concern. Further, due to its capital condition, Horizon Bank is
prohibited from paying a dividend to the Company.
About Horizon Financial
Horizon Financial Corp. (NASDAQ GS: HRZB) --
http://www.horizonbank/-- is a bank holding company headquartered
in Bellingham, Washington. Its primary subsidiary, Horizon Bank,
operates 18 full-service offices, four commercial loan centers and
four real estate loan centers throughout Whatcom, Skagit,
Snohomish and Pierce Counties in Washington.
HORIZON FINANCIAL: Steven Hoekstra Resigns as EVP of Horizon Bank
-----------------------------------------------------------------
Horizon Financial Corp. reported last week that Horizon Bank has
accepted the resignation of Steven L. Hoekstra, Executive Vice
President and Chief Lending Officer. The Company said that
Mr. Hoekstra was responsible for the Bank's commercial lending
operations from June 2002 to the present. The members of the
current management have assumed the duties of this position.
About Horizon Financial
Horizon Financial Corp. (NASDAQ GS: HRZB) --
http://www.horizonbank/-- is a bank holding company headquartered
in Bellingham, Washington. Its primary subsidiary, Horizon Bank,
operates 18 full-service offices, four commercial loan centers and
four real estate loan centers throughout Whatcom, Skagit,
Snohomish and Pierce Counties in Washington.
At September 30, 2009, Horizon Financial Corp. had total assets of
$1.30 billion, total liabilities of $1.29 billion, and total
stockholders' equity of $12.8 million.
A full-text copy of the Company's Form 10-Q for the three and six
months ended September 30, 2009, is available for free at:
http://researcharchives.com/t/s?4a29
Going Concern Doubt
As of September 30, 2009, due to the Company's significant net
loss from operations in the three and six months ended
September 30, 2009, deterioration in the credit quality of the
loan portfolio, and the decline in the level of its regulatory
capital to support operations, the Company believes there is
substantial doubt about its ability to continue as a going
concern. Further, due to its capital condition, Horizon Bank is
prohibited from paying a dividend to the Company.
INDYMAC BANCORP: Chapter 7 Trustee Sues Board and CEO
-----------------------------------------------------
According to Bill Rochelle at Bloomberg News, the Chapter 7
trustee for IndyMac Bancorp Inc. sued former directors and Chief
Executive Officer Michael Perry in bankruptcy court, contending
they breached their duties to the holding company by downstreaming
almost $355 million to the bank when it needed billions more in
capital.
The complaint, the report relates, contends that Mr. Perry and the
board failed to pursue "numerous" opportunities for third-party
investment so they could preserve their own interest in the
company. The funds they downstreamed, while "very material" to
the holding company, were "wholly immaterial" compared with the
capital the bank subsidiary needed to survive. The trustee claims
the board shoveled money into the bank to "stay in their positions
a few more months until the bank collapsed."
According to Bloomberg, the complaint seeks to disallow the
defendants' claims against the holding company and force them to
repay money the holding company transferred to the bank
subsidiary.
About Indymac
Based in Pasadena, California, IndyMac Bancorp Inc. (NYSE:IMB) --
http://www.indymacbank.com/-- was the holding company for IndyMac
Bank FSB, a hybrid thrift/mortgage bank that originated mortgages
in all 50 states of the United States.
On July 11, 2008, the Office of Thrift Supervision closed IndyMac
Bank and appointed FDIC as the bank's receiver. Thacher Proffitt
& Wood LLP was engaged as counsel to the FDIC.
All non-brokered insured deposit accounts and substantially all of
the assets of the bank were transferred to IndyMac Federal Bank,
F.S.B., Pasadena, CA, a newly chartered full-service FDIC-insured
institution. On March 19, IndyMac Federal Bank was sold to
OneWest Bank, F.S.B., Pasadena, California. OneWest Bank, FSB is a
newly formed federal savings bank organized by IMB HoldCo LLC.
Indymac Bancorp filed for Chapter 7 bankruptcy protection on
July 31, 2008 (Bankr. C.D.Calif., Case No. 08-21752).
Representing the Debtor are Dean G. Rallis, Jr., Esq., and John C.
Weitnauer, Esq. Bloomberg noted that Indymac had about
$32.01 billion in assets as of July 11, 2008. In court documents,
IndyMac disclosed estimated assets of $50 million to $100 million
and estimated debts of $100 million to $500 million.
INFOLOGIX INC: Completes Debt Restructuring with Sr. Lender
-----------------------------------------------------------
InfoLogix, Inc., have completed a restructuring transaction with
its senior lender, Hercules Technology Growth Capital, Inc.,
pursuant to which a portion of the Company's outstanding debt with
Hercules Technology I, LLC, a wholly-owned subsidiary of Hercules,
was converted into equity in the Company, the remaining
outstanding debt with Hercules was otherwise restructured, the
Company issued warrants to purchase equity in the Company to HTI,
and certain other debt and earnout obligations with other parties
were restructured. The restructuring resulted in the cancellation
of $5 million in indebtedness and provides for up to $5 million in
additional availability under a revolving credit facility with
Hercules.
Under the terms of the restructuring, HTI exchanged $5 million in
existing indebtedness for 67,294,751 shares of the Company's
common stock. Additionally, the Company issued to HTI at closing
a warrant to purchase 16,823,688 shares of the Company's common
stock at an exercise price of $0.0743 per share. The warrant has
a five year term and is immediately exercisable at such time when
the Company amends its certificate of incorporation to increase
the number of authorized shares of common stock or implements a
reverse stock split that results in the Company having a
sufficient amount of authorized shares to issue the warrant
shares. The Company has agreed to register these shares with the
Securities and Exchange Commission for resale.
The remainder of the Company's indebtedness with Hercules was
restructured to include two term loans aggregating $10.5 million
and a revolving credit facility of $12 million, of which
$7 million is outstanding at closing. The revolving credit
facility expires on May 1, 2011, but may be extended at the
Company's option for six months if there is no existing event of
default. Any advances under the revolving credit facility bear
interest initially at 12.0% per annum until the term loans, as
described below, are repaid in full, when the interest rate on
outstanding advances will be prime plus 4%. Borrowings under the
revolving credit facility are based on eligible accounts
receivables, including an overadvance provision of up to $500,000,
which will be due 28 days after the overadvance is drawn.
Overadvances bear interest at 15% per annum.
The term loans are comprised of a $5.5 million term loan due on
November 1, 2013 ("Term Loan A") and a $5 million convertible term
loan due on November 1, 2014 ("Term Loan B"). Amortization on
Term Loan A begins on December 1, 2010. Term Loan B may be
converted into shares of the Company's common stock at a price of
$0.0743 per share at Hercules' option, or automatically if the 90-
day value weighted adjusted price of the common stock exceeds five
times the conversion price. The Company, however, has the right
to pay a portion of the conversion amount in cash plus applicable
fees, interest and other charges instead of shares of common stock
if an automatic conversion occurs under certain circumstances.
Term Loan A bears interest at (i) 12% per annum for the first
year, (ii) 18% per annum for the next year, and (iii) 15%
thereafter. All interest on Term Loan A is payable in cash
monthly commencing December 1, 2009. Term Loan B bears interest
at (i) 14.5% per annum for the first year, (ii) 20.5% per annum
for the next year, and (iii) 17.5% thereafter. 2.5% of the
interest on Term Loan B will be "paid in kind" compounded monthly.
Hercules has the option to turn the PIK interest into cash
interest or additional shares of common stock if certain
predefined metrics are maintained. The balance of the interest on
Term Loan B is payable in cash monthly commencing December 1,
2009. In the event the term loans are prepaid, a prepayment
charge on the principal prepaid of 5% if prepaid during the first
12 months, 3% if prepaid during the next 12 months and 1%
thereafter will be due, provided that, if the term loans are
prepaid in the first 12 months and there is no event of default,
Hercules will waive the prepayment charge on both term loans. The
Company has agreed to register for resale with the Securities and
Exchange Commission the shares issuable upon conversion of Term
Loan B and accreted Term Loan B interest.
The Company was assessed a transaction fee of $450,000 in
connection with the Restructuring, which is payable in 12 equal
monthly installments beginning in May 2010. The obligations of
the Company under the Loan Agreement are secured by all of the
personal property of the Company and its subsidiaries, including
all of the equity interests of the Company and its subsidiaries in
their respective subsidiaries.
NASDAQ Compliance Status
On August 19, 2009, NASDAQ notified the Company that it did not
comply with the minimum $2.5 million stockholders' equity
requirement for continued listing on The NASDAQ Capital Market, as
set forth in Listing Rule 5550(b). On October 30, 2009, the
Company received notice that the NASDAQ Listing Qualifications
Staff had granted the Company's request for an extension to regain
compliance with this listing rule by no later than November 20,
2009. Additionally, on October 30, 2009, NASDAQ granted the
Company's request for a financial viability exception to NASDAQ's
stockholder approval requirements for the restructuring. On
November 10, 2009, the Company issued a press release and provided
notice to its stockholders announcing that NASDAQ had granted the
Company's request for a financial viability exception.
Based upon the consummation of the restructuring discussed above,
the Company believes that as of the date of this press release it
has regained compliance with the $2.5 million stockholders' equity
requirement for continued listing on The NASDAQ Capital Market.
The Company is awaiting NASDAQ's formal determination with respect
to its compliance status. In addition, NASDAQ will continue to
monitor the Company's ongoing compliance with the minimum
stockholders' equity requirement and, if at the time of its next
periodic report the Company does not evidence compliance with that
requirement, it may be subject to delisting from NASDAQ.
There can be no assurance that the Company will continue to meet
the minimum stockholders' equity requirement. If the Company does
not, the Company may request a hearing before the NASDAQ Listing
Qualifications Panel. Such request would stay any delisting
determination by the NASDAQ Listing Qualifications Staff and the
Company's securities would remain listed on NASDAQ pending a
formal determination by the Panel.
About InfoLogix, Inc.
InfoLogix Inc. (NASDAQ: IFLG) -- http://www.infologix.com/--
provides enterprise mobility solutions for the healthcare and
commercial industries. InfoLogix uses the industry's most
advanced technologies to increase the efficiency, accuracy, and
transparency of complex business and clinical processes. With 19
issued patents, InfoLogix provides mobile managed solutions, on-
demand software applications, mobile infrastructure products, and
strategic consulting services to over 2,000 clients in North
America including Kraft Foods, Merck and Company, General
Electric, Kaiser Permanente, MultiCare Health System and Stanford
School of Medicine.
The Company has $45.06 million in assets against debts of
$46.35 million as of June 30, 2009.
INTEGRA TELECOM: Moody's Upgrades Corporate Family Rating to 'B2'
-----------------------------------------------------------------
Moody's Investors Service has upgraded Integra Telecom, Inc.'s
Corporate Family Rating to B2 from Caa1 and Probability of Default
Rating to B2 from Ca following the completion of its previously
announced debt restructuring program. All other ratings were
confirmed. These rating actions conclude the review initiated by
Moody's on February 6, 2009.
The upgrades reflect the Company's stronger credit profile
following the restructuring, as the company eliminated roughly one
half of its debt and management can now devote its full attention
to the prospective restoration of the Company's growth potential.
Under the agreement, the senior secured first lien credit facility
at Integra's wholly-owned subsidiary, Integra Telecom Holdings,
Inc., remains in place, and the rating been confirmed at B2 --
LGD3-49%. The senior secured second lien credit facility (Ca -
LGD4 - 64%) at Holdings and the senior unsecured PIK loan (C -
LGD5 - 89%) at Integra have been converted into common equity.
The ratings on these instruments will be withdrawn in accordance
with Moody's policies.
Upgrades:
Issuer: Integra Telecom, Inc.
-- Probability of Default Rating, Upgraded to B2 from Ca
-- Corporate Family Rating, Upgraded to B2 from Caa1
Outlook Actions:
Issuer: Integra Telecom Holdings, Inc.
-- Outlook, Changed To Stable From Rating Under Review
Issuer: Integra Telecom, Inc.
-- Outlook, Changed To Stable From Rating Under Review
Confirmations:
Issuer: Integra Telecom Holdings, Inc.
-- Senior Secured Bank Credit Facility, Confirmed at B2, LGD3,
49%
Issuer: Integra Telecom, Inc.
-- Senior Unsecured Bank Credit Facility, Confirmed at C, LGD5,
89%
The B2 corporate family rating largely reflects Integra's improved
credit profile, and the progress it is making in turning around
the weaker than expected revenue generation since it acquired
Eschelon Telecom in late 2007. The Company believes that it has
reached a trough in sales declines and churn, such that combined
with cost containment programs put in place over the past year and
the elimination of the fees related to the restructuring it should
return to positive free cash flow generation in 2010. Moody's is
concerned, however, about the impact of the economy in the
Company's service territories, which may delay the envisioned path
to free cash flow growth. Moody's notes that the ratings are
supported by the Company's significant fiber-optic network in the
Pacific Northwest and its management team's long track record of
operating in the competitive telecom arena.
Moody's believes that the Company will have adequate liquidity
over the next four quarters, as it ramps up capital expenditures
over the run-rate 2009 levels to grow its business. The Company
expects to fund the modest free cash flow shortfall with cash on
hand. In addition, the amended credit agreement gives the Company
added headroom in managing its covenant compliance.
Moody's most recent rating action for Integra was on May 18, 2009
when the Company's PDR was changed to Ca/LD from Ca (and
subsequently back to Ca), reflecting the limited default via
stoppage of interest payments on the Senior Secured Second Lien
Credit Facility.
Integra is headquartered in Portland, OR, and provides
telecommunications services to small and medium-sized enterprises
and other communications companies.
J J DETWEILER: December 1 Sale Auction to Hit Road Block
--------------------------------------------------------
Robin Ford Wallace, staff reporter at The Dade County Sentinel,
reports that an auction to sell the assets of J.J. Detweiler will
take place on Dec. 1, 2009, in Ohio.
Valerie Epstein, Esq., at Berk and Berke, says the sale won't
happen if she can help it, Mr. Wallace says. Ms. Epstein made a
class action lawsuit against the company for failing to complete
roads and utilities promised to lot purchasers, he notes.
Ms. Epstein objected to the sale for several reasons including
lack of transparency, Mr. Wallace relates.
Based in Uniontown, Ohio, Joseph J. Detweiler filed for Chapter 11
protection on August 17, 2009 (Bankr. N.D. Ohio Case No. 09-
63377). Anthony J. DeGirolamo, Esq., represents the Debtor. In
its petition, the Debtor has $3,669,999 in total assets and
$32,913,552 in total debts.
JOHNSONDIVERSEY INC: Fitch Affirms Issuer Default Rating at 'B-'
----------------------------------------------------------------
Fitch Ratings has affirmed all ratings for JohnsonDiversey, Inc.,
and its holding company JohnsonDiversey Holdings, Inc. The
Rating Outlook remains Positive. Fitch also plans to rate
JohnsonDiversey Holding's proposed senior discount notes 'CC/RR6'.
Fitch has affirmed these ratings:
JohnsonDiversey:
-- Issuer Default Rating at 'B-';
-- Senior secured bank credit facilities at 'BB-/RR1';
-- Senior subordinated notes at 'B-/RR4'.
JohnsonDiversey Holdings, Inc.:
-- IDR at 'B-';
-- Senior discount notes at 'CCC/RR6'.
Upon completion of the equity investments and the recapitalization
of the company, Fitch would anticipate these rating changes:
-- Assigning a rating of 'B-/RR4' to JohnsonDiversey's new
$400 million senior unsecured notes;
-- Assigning a rating of 'BB-/RR1' to JohnsonDiversey's new
senior secured bank credit facility';
-- Assigning an IDR of 'B-' to JohnsonDiversey Holdings IIand an
IDR of 'B-' to JohnsonDiversey Canada, Inc., both co-
borrowers under the senior secured bank credit facilities;
-- Assigning a rating of 'CC/RR6' to JohnsonDiversey Holdings,
Inc.'s new $250 million senior discount notes;
-- Withdrawing the ratings for the existing senior subordinated
notes at JohnsonDiversey and the rating on the existing
senior discount notes at JohnsonDiversey Holdings, which will
be paid in full at closing.
Fitch notes that the primary driver of the rating affirmation and
proposed assignment of ratings to JohnsonDiversey Holdings' senior
discount notes relates to the company's decision to issue the
notes at JohnsonDiversey Holdings publicly. Previously, Fitch had
anticipated that these notes would be issued directly to Unilever
PLC and therefore would not require a public rating upon closing
of the transaction.
The Outlook for JohnsonDiversey, JohnsonDiversey Holdings II B.V.,
JohnsonDiversey Canada, Inc. and JohnsonDiversey Holdings, Inc. is
Positive. Fitch anticipates that the Positive Outlook will be
maintained upon closing of the transaction.
The ratings reflect high debt levels relative to cash flows,
mitigated by the company's leading positions in the global
institutional and industrial cleaning markets, its improving
profitability and ability to generate cash flow as well as a
relatively stable operating performance during the global economic
downturn.
The Positive Outlook is based on the favorable implications of the
announced $477 million equity investment by a Clayton, Dubilier &
Rice managed fund in JohnsonDiversey and the recapitalization,
which includes debt financing of approximately $1.7 billion, on
JohnsonDiversey's capital structure and liquidity. The
transaction removes the uncertainties related to the Unilever
'put' option from the capital structure of the company. It also
improves the company's liquidity, which, post-closing, will be
comprised of an undrawn $250 million revolving credit facility,
upsized from the current $175 million revolver, and $129 million
cash on hand as of Oct. 2, 2009. Post closing, the resulting
maturity profile will be extended with no major debt coming due
before 2014 with the anticipated maturity of the company's amended
and extended revolving credit facility. The $1 billion term loan
will mature in 2015, while JohnsonDiversey's new senior unsecured
notes and JohnsonDiversey Holdings Inc.'s senior discount notes
will expire in 2019 and 2020, respectively. Before the
recapitalization, all of the company's existing $1.5 billion was
due on or before 2013.
The new $250 million senior discount notes will be issued by
JohnsonDiversey Holdings. Interests will be paid in kind during
the first five years and in cash thereafter. The notes are
structurally subordinated to approximately $1.4 billion debt at
JohnsonDiversey, Inc. and its operating subsidiaries.
Post closing, Fitch expects that benefits from the past
restructurings will continue to support profitability and cash
flows. Sustainable margin improvements and free cash flow
generation used to reduce debt would be catalysts for a ratings
upgrade.
JohnsonDiversey is a global player in the industrial and
institutional (I&I) cleaning market and sells its products into
these product segments: floor care, foodservice, food processing,
restroom/housekeeping, laundry and industrial. JohnsonDiversey is
currently a wholly owned subsidiary of JohnsonDiversey Holdings,
which is currently owned by Commercial Markets Holdco (67%) and
Unilever (33%). JohnsonDiversey had approximately $3.1 billion in
net sales and Fitch calculated operating EBITDA of approximately
$342 million for the last 12 months ending Oct. 3, 2009. The
company also announced that it will change its name to 'Diversey,
Inc' upon closing of the transaction.
JONES SODA: Posts $1.5 Million Net Loss in Q3 2009
--------------------------------------------------
Jones Soda Co. has disclosed its financial results for the third
quarter ended September 30, 2009.
The Company reported a net loss of $1.5 million, or ($0.06) per
share, for the third quarter 2009, an improvement of 72% over the
third quarter 2008 net loss of $5.3 million, or ($0.20) per share.
"Our third quarter bottom-line results show meaningful improvement
over the same period last year and represent our best performance
in the last nine quarters, underscoring the positive progress we
have made during the past 12 months to streamline our business,"
commented Joth Ricci, President & Chief Executive Officer.
Revenue decreased 18% to $7.2 million for the quarter ended
September 30, 2009, compared to $8.7 million in the third quarter
of 2008.
Gross profit increased 57% to $1.5 million or 21% of sales for the
quarter ended September 30, 2009, compared to $966,000, or 11% of
sales in the corresponding period a year ago.
Operating expenses decreased 51% to $3.0 million, compared to the
corresponding period a year ago and were benefited by cost
containment measures undertaken over the last year, including an
additional reduction in workforce during the third quarter of
approximately 30%.
"With emphasis on higher margin sales opportunities for our Jones
Soda glass bottles along with the restructuring of our sales and
marketing platform, we have been able to drive improved bottom-
line results on planned lower case volumes," continued Mr. Ricci.
"Importantly, several new product extensions within our core glass
business have performed well at retail, including Jones Jumble and
Jones Refresco de Cana Pura. Additionally, our gross margin and
operating expenses are both dramatically improved versus a year
ago, and as a result, we significantly reduced our use of cash in
the quarter."
Mr. Ricci, concluded, "We are proud of our year-over-year
performance and are encouraged by a number of recent distribution
wins. With the upcoming launch of new packaging and products, we
are striving to generate top-line momentum as we head into next
year."
Balance Sheet
At September 30, 2009, the Company's consolidated balance sheets
showed $18.2 million in total assets, $3.7 million in total
liabilities, and $14.5 million in total shareholders' equity.
As of September 30, 2009, the Company had cash and cash-
equivalents of approximately $6.1 million and working capital of
$11.3 million. Cash used in operations during the nine months
ended September 30, 2009, totaled $6.2 million.
A full-text copy of the Company's Form 10-Q is available for free
at http://researcharchives.com/t/s?4a2a
Going Concern Doubt
The Company says that it may no longer have sufficient margin in
its operating plan to absorb further material declines against the
Company's expectations with regard to the economy or its
business. The Company believes its revised operating plan already
includes the majority of attainable cost cutting measures, which
places greater emphasis on the need to meet its case sales
projections in order to effectively operate its business.
The Company said there is uncertainty regarding its ability to
meet its revised case sales projections. The Company believes
this uncertainty, together with its inability to implement further
meaningful cost containment measures beyond those it undertook in
the third quarter and the extremely difficult environment in which
to obtain additional equity or debt financing, raise substantial
doubt about its ability to continue as a going concern.
About Jones Soda
Headquartered in Seattle, Washington, Jones Soda Co.
(NASDAQ: JSDA) -- http://www.jonessoda.com/-- markets and
distributes premium beverages under the Jones Soda, Jones Pure
Cane Soda(TM), Jones 24C(TM), Jones GABA(R), Jones Organics(TM),
Jones Naturals(R) and Whoopass Energy Drink(R) brands and sells
through its distribution network in markets primarily across North
America.
JULES R SCHUBOT: Can Liquidate Assets and Close Remaining Stores
----------------------------------------------------------------
Joseph Szczesny of The Oakland Press reports that a federal
bankruptcy court in Detroit authorized Jules R. Schubot Inc. of
Troy to liquidate its assets and close its remaining store. The
liquidation sale marks the end of era, Mr. Szczesny notes.
Based in Troy, The Jules R. Schubot jewelry store --
http://www.schubot.com/-- owned and operated a jewelry store.
KINGSWAY LINKED: DBRS Cuts LROC Preferred Units Rating to 'B'
-------------------------------------------------------------
DBRS has downgraded its rating on the LROC Preferred Units (the
Units) issued by Kingsway Linked Return of Capital Trust (the
Trust) to Pfd-4 (low) from Pfd-4. The Under Review with Negative
Implications status, which was assigned to the Units on June 8,
2009, is being maintained.
The LROC Preferred Units are supported by an exposure to a note
guaranteed by Kingsway Financial Services Inc. and Kingsway
America Inc. (collectively, Kingsway) through a forward purchase
agreement. The downgrade of the Units is a result of DBRS
downgrading the long-term debt ratings of Kingsway earlier today
to B (high) from BB (low).
Also, subsequent to today's downgrade, DBRS immediately
discontinued its ratings coverage of Kingsway. As a result, the
rating of the Units has also been discontinued.
KINGSWAY FINANCIAL: DBRS Downgrades Senior Debt Rating to 'B'
-------------------------------------------------------------
DBRS has downgraded its ratings on the senior debt of Kingsway
Financial Services Inc. and affiliates (Kingsway or the Company)
to B (high) from BB (low). The Under Review with Negative
Implications (UR-Negative) status, which was assigned to Kingsway
on June 4, 2009, is being maintained. The downgrade reflects the
continued adverse reserve development at Lincoln General Insurance
Company (Lincoln), the corresponding erosion of the Company's
financial strength and flexibility, and the reduced scale and
diversification of the remaining operations. The continuation of
the UR-Negative status reflects the uncertainty raised by the
announcement by the Pennsylvania insurance regulator that it would
contest the Company's disposal of its ownership in Lincoln. A
reversal of the Company's disposal would increase the probability
that the Company will remain liable for continued adverse
development in the run-off operation. Immediately following this
rating action, the ratings are to be discontinued.
DBRS's analysis is now based on public information only. The lack
of transparency available to us, given the Company's financial
difficulties, has caused DBRS to choose to discontinue the ratings
at B (high).
Following 13 consecutive quarters of adverse reserve development
at Lincoln, including an additional $84 million charge taken in Q3
2009 that has eroded shareholder equity, the Company's debt ratio
has increased to 55.1%, up from 42.8% at year-end 2008. While
primarily reflecting the Company's deteriorated financial
condition, the B (high) rating also recognizes certain operating
strengths and adequate regulatory capital of Kingsway's continuing
core niche operations in non-standard auto insurance and the
progress that it has made in improving operating efficiencies
through cost-cutting and process improvements.
Lincoln is now in run-off under the supervision of the
Pennsylvania Department of Insurance. On October 19, 2009, the
Company stated that, in its opinion, its continuing exposure to
Lincoln had been terminated with the disposal of its shareholdings
to 20 charities and could correspondingly be considered a
discontinued operation. However, on November 16, 2009, the
Pennsylvania regulator announced its intention to take legal
action against Kingsway in order to unwind what it called a "set
of sham transactions," thereby raising the prospect of the
Company's continuing liability for the underperformance of the
run-off operations against the original plan.
LAMBERT PROPERTIES: Court OKs Schedules Filing Until December 4
---------------------------------------------------------------
The Hon. Margaret A. Mahoney of the U.S. Bankruptcy Court for the
Southern District of Alabama extended until Dec. 4, 2009, Lambert
Properties, LLC's time to file its schedules of assets and
liabilities.
The Debtor related that there was a scheduling conflict in its
attorney's office.
Loxley, Alabama-based Lambert Properties, LLC, operates a real
estate business. The Company filed for Chapter 11 on Oct. 27,
2009 (Bankr. Case S.D. Ala. No. 09-14987). Barry A. Friedman,
Esq., at Barry A. Friedman and Associates P.C., represents the
Debtor in its restructuring effort. The Debtor did not file a
list of its 20 largest unsecured creditors when it filed its
petition. In its petition, the Debtor listed assets and debts
both ranging from $1,000,001 to $10,000,000.
LEHMAN BROTHERS: Assigned $173 Mil. Corp. Loans for October
-----------------------------------------------------------
Pursuant to a court order authorizing Lehman Brothers Holdings
Inc. and its units to terminate or assign unfunded commitments and
enter into restructuring transactions with respect to their
corporate loans, the Debtors filed in Court a monthly report of
the transactions they made for October 2009.
The report showed that the Debtors terminated or assigned 11
corporate loans, with an aggregate outstanding principal balance
of $173,343,039. The Debtors did not make any payment in excess
of $1 million in connection with the termination or assignment,
the report said.
The Debtors also disclosed that they did not enter into any
restructuring transactions during the period in which they have a
beneficial interest in at least 10% of the outstanding principal
amount or which the outstanding principal amount due to them is
more than $50 million.
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 US$639 billion in assets and US$613 billion in debts,
effectively making the firm's bankruptcy filing the largest in
U.S. history. Several other affiliates followed thereafter.
The Debtors' bankruptcy cases are handled by Judge James M. Peck.
Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife,
Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil,
Gotshal & Manges, LLP, in New York, represent Lehman. Epiq
Bankruptcy Solutions serves as claims and noticing agent.
On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the
U.S. District Court for the Southern District of New York, entered
an order commencing liquidation of Lehman Brothers, Inc., pursuant
to the provisions of the Securities Investor Protection Act (Case
No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as
trustee for the SIPA liquidation of the business of LBI
The Bankruptcy Court has approved Barclays Bank Plc's purchase of
Lehman Brothers' North American investment banking and capital
markets operations and supporting infrastructure for
US$1.75 billion. Nomura Holdings Inc., the largest brokerage
house in Japan, purchased LBHI's operations in Europe for US$2
plus the retention of most of employees. Nomura also
bought Lehman's operations in the Asia Pacific for US$225 million.
International Operations Collapse
Lehman Brothers International (Europe), the principal UK trading
company in the Lehman group, was placed into administration,
together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE
Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and
Mike Jervis, partners at PricewaterhouseCoopers LLP, have been
appointed as joint administrators to Lehman Brothers International
(Europe) on September 15, 2008. The joint administrators have
been appointed to wind down the business.
Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc.
filed for bankruptcy in the Tokyo District Court on September 16.
Lehman Brothers Japan Inc. reported about JPY3.4 trillion
(US$33 billion) in liabilities in its petition.
Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by Lehman Brothers Holdings, Inc., and other insolvency
and bankruptcy proceedings undertaken by its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
LEHMAN BROTHERS: Fee Committee Proposes to Tap Browngreer
---------------------------------------------------------
The Fee Committee of Lehman Brothers Holdings, Inc., and its
affiliated debtors asks the Court for authority to employ
BrownGreer PLC as fee and expense analyst, nunc pro tunc to
June 10, 2009.
The Fee Committee has determined that the volume of fee and
expense applications from retained professionals warrants
assistance from a consultant who can provide computerized
analyses of those requests. Accordingly, the Fee Committee has
selected BrownGreer as the best qualified and most cost-effective
professional to support the Fee Committee, with automated
analysis and related services, in its review of fee and expense
requests.
The Fee Committee has engaged BrownGreer to provide the services
outlined in an Engagement Statement, which include:
(a) auditing the accuracy of Fee Applications and Invoices;
(b) reviewing the Fee Applications and Invoices for compliance
with the applicable provisions of the Bankruptcy Code, the
Bankruptcy Rules, the U.S. Trustee Guidelines, and the
Local Rules and Orders of the Court;
(c) analyzing Fee Applications and Invoices for identification
of billing irregularities;
(d) preparing standard and customized reports summarizing the
results of the Fee Application and Invoice reviews; and
(e) other services as the Fee Committee may request.
Kenneth R. Feinberg, chairman of the Fee Committee, asserts that
the employment of BrownGreer is in the best interest of the
Debtors estates and of their bankruptcy cases as a whole because
it will aid in the Fee Committee's analysis of fees and expenses,
and will augment the Fee Committee's ability to properly and
efficiently analyze a large volume of fee and expense requests
within relatively short time frames. Mr. Feinberg relates that
from the Petition Date through May 31, 2009, the Retained
Professionals have submitted approximately $217.8 million in fees
and expenses.
The Fee Committee will pay BrownGreer at the Firm's regular
hourly rates for legal and non-legal personnel, and to reimburse
BrownGreer for all reasonable and necessary expenses.
BrownGreer's hourly rate structure ranges from:
-- $350 to $380 for partners,
-- $150 to $200 for associates and counsel, and
-- $45 to $145 for paraprofessionals.
Orran L. Brown, owner and chairman of BrownGreer PLC, assures the
Court that his firm has not represented and has no relationship
with (i) the Debtors; (ii) their creditors or equity security
holders; (iii) any other parties-in-interest in this case; (iv)
the attorneys and accountants of any party-in-interest; or (v)
the United States Trustee or any person employed in the Office of
the United States Trustees, in any matter relating to the
Debtors' bankruptcy cases.
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 US$639 billion in assets and US$613 billion in debts,
effectively making the firm's bankruptcy filing the largest in
U.S. history. Several other affiliates followed thereafter.
The Debtors' bankruptcy cases are handled by Judge James M. Peck.
Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife,
Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil,
Gotshal & Manges, LLP, in New York, represent Lehman. Epiq
Bankruptcy Solutions serves as claims and noticing agent.
On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the
U.S. District Court for the Southern District of New York, entered
an order commencing liquidation of Lehman Brothers, Inc., pursuant
to the provisions of the Securities Investor Protection Act (Case
No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as
trustee for the SIPA liquidation of the business of LBI
The Bankruptcy Court has approved Barclays Bank Plc's purchase of
Lehman Brothers' North American investment banking and capital
markets operations and supporting infrastructure for
US$1.75 billion. Nomura Holdings Inc., the largest brokerage
house in Japan, purchased LBHI's operations in Europe for US$2
plus the retention of most of employees. Nomura also
bought Lehman's operations in the Asia Pacific for US$225 million.
International Operations Collapse
Lehman Brothers International (Europe), the principal UK trading
company in the Lehman group, was placed into administration,
together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE
Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and
Mike Jervis, partners at PricewaterhouseCoopers LLP, have been
appointed as joint administrators to Lehman Brothers International
(Europe) on September 15, 2008. The joint administrators have
been appointed to wind down the business.
Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc.
filed for bankruptcy in the Tokyo District Court on September 16.
Lehman Brothers Japan Inc. reported about JPY3.4 trillion
(US$33 billion) in liabilities in its petition.
Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by Lehman Brothers Holdings, Inc., and other insolvency
and bankruptcy proceedings undertaken by its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
LEHMAN BROTHERS: LB Rose Proposes to Reject Hansen, et al., Pacts
-----------------------------------------------------------------
LB Rose Ranch LLC, an affiliated debtor of Lehman Brothers
Holdings Inc., seeks court approval to reject an agreement with
Hansen Construction Inc. and three other companies for the sale
of its properties in Colorado.
The agreement authorized Hansen Construction to arrange the
purchase and development of some of LB Rose' residential lots in
Garfield County, which consist of 292 unrestricted lots and 24
housing units.
LB Rose proposed to reject the agreement after the developers
allegedly violated the terms of the contract including their
failure to provide LB Rose of its share of the profit, which the
developers generated from the sale of the unrestricted lots.
The three other developers are Ironbridge Homes LLC, Ironbridge
Mountain Cottages LLC, and Ironbridge Aspen Collection LLC.
Shai Waisman, Esq., at Weil Gotshal & Manges LLP, in New York,
says LB Rose is planning to make a deal with a new company to
complete the development of the unrestricted lots, and, thus, it
no longer needs to continue its agreement with the developers.
LB Rose also intends to reject a deal with Ironbridge Homes,
which was formalized in a letter agreement dated November 12,
2007. Under the deal, Ironbridge Homes agreed to construct the
housing units for a contract price while LB Rose agreed to
reimburse the developer of its costs for each housing unit and
pay a portion of the difference between the costs and the
contract price.
The construction of the housing units was not completed after a
dispute ensued between the companies over Ironbridge Homes'
accounting with respect to the allocation of costs and expenses.
LB Rose is also planning to enter into a new agreement with a
different developer to push through with the construction of the
housing units.
Weil Gotshal will present a motion to Judge James Peck on
November 25, 2009, for approval of the proposed rejection. If an
objection is filed on or before that date, a hearing will be held
on December 16, 2009.
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 US$639 billion in assets and US$613 billion in debts,
effectively making the firm's bankruptcy filing the largest in
U.S. history. Several other affiliates followed thereafter.
The Debtors' bankruptcy cases are handled by Judge James M. Peck.
Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife,
Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil,
Gotshal & Manges, LLP, in New York, represent Lehman. Epiq
Bankruptcy Solutions serves as claims and noticing agent.
On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the
U.S. District Court for the Southern District of New York, entered
an order commencing liquidation of Lehman Brothers, Inc., pursuant
to the provisions of the Securities Investor Protection Act (Case
No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as
trustee for the SIPA liquidation of the business of LBI
The Bankruptcy Court has approved Barclays Bank Plc's purchase of
Lehman Brothers' North American investment banking and capital
markets operations and supporting infrastructure for
US$1.75 billion. Nomura Holdings Inc., the largest brokerage
house in Japan, purchased LBHI's operations in Europe for US$2
plus the retention of most of employees. Nomura also
bought Lehman's operations in the Asia Pacific for US$225 million.
International Operations Collapse
Lehman Brothers International (Europe), the principal UK trading
company in the Lehman group, was placed into administration,
together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE
Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and
Mike Jervis, partners at PricewaterhouseCoopers LLP, have been
appointed as joint administrators to Lehman Brothers International
(Europe) on September 15, 2008. The joint administrators have
been appointed to wind down the business.
Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc.
filed for bankruptcy in the Tokyo District Court on September 16.
Lehman Brothers Japan Inc. reported about JPY3.4 trillion
(US$33 billion) in liabilities in its petition.
Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by Lehman Brothers Holdings, Inc., and other insolvency
and bankruptcy proceedings undertaken by its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
LEHMAN BROTHERS: Study Says CEO Fuld Got $541MM Before Collapse
---------------------------------------------------------------
The Wall Street Journal's Aaron Lucchetti reports that a study
slated for release Monday showed Bear Stearns Cos. and Lehman
Brothers Holdings Inc. executives got nearly $2.5 billion from
their firms between 2000 and 2008 even though the financial crisis
hammered the shares they held.
Mr. Lucchetti relates the study showed former Bear Chairman and
Chief Executive James Cayne walked away with $388 million for the
period covered by the analysis, while former Lehman Chairman and
CEO Richard Fuld Jr. got $541 million. Mr. Cayne's paper losses
on his Bear stock were more than $900 million, and Mr. Fuld was
hit with losses of about $930 million on his Lehman stake, Mr.
Lucchetti points out.
According to Mr. Lucchetti, the study's authors include Lucian
Bebchuk, executive director of Harvard Law School's corporate-
governance program and an adviser to Treasury Department official
Kenneth Feinberg. They used public filings from the companies.
"What happened at Bear and Lehman, the study concludes, shows that
toughened oversight of compensation proposed by the U.S. Federal
Reserve and other regulators around the world is needed to prevent
executives from taking excessive risks," Mr. Lucchetti says.
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.
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 US$639 billion in assets and US$613 billion in debts,
effectively making the firm's bankruptcy filing the largest in
U.S. history. Several other affiliates followed thereafter.
The Debtors' bankruptcy cases are handled by Judge James M. Peck.
Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife,
Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil,
Gotshal & Manges, LLP, in New York, represent Lehman. Epiq
Bankruptcy Solutions serves as claims and noticing agent.
On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the
U.S. District Court for the Southern District of New York, entered
an order commencing liquidation of Lehman Brothers, Inc., pursuant
to the provisions of the Securities Investor Protection Act (Case
No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as
trustee for the SIPA liquidation of the business of LBI
The Bankruptcy Court has approved Barclays Bank Plc's purchase of
Lehman Brothers' North American investment banking and capital
markets operations and supporting infrastructure for
US$1.75 billion. Nomura Holdings Inc., the largest brokerage
house in Japan, purchased LBHI's operations in Europe for US$2
plus the retention of most of employees. Nomura also
bought Lehman's operations in the Asia Pacific for US$225 million.
International Operations Collapse
Lehman Brothers International (Europe), the principal UK trading
company in the Lehman group, was placed into administration,
together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE
Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and
Mike Jervis, partners at PricewaterhouseCoopers LLP, have been
appointed as joint administrators to Lehman Brothers International
(Europe) on September 15, 2008. The joint administrators have
been appointed to wind down the business.
Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc.
filed for bankruptcy in the Tokyo District Court on September 16.
Lehman Brothers Japan Inc. reported about JPY3.4 trillion
(US$33 billion) in liabilities in its petition.
Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by Lehman Brothers Holdings, Inc., and other insolvency
and bankruptcy proceedings undertaken by its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
LEHMAN BROTHERS: Wants to Compel ZAO to Return Receipts
-------------------------------------------------------
Lehman Brothers Holdings Inc. and its affiliated debtors seek a
court ruling that would authorize ZAO Citibank (Russia) to turn
over receipts of RUB114,995,982 to LBHI.
The amount represents a portion of the postpetition receipts that
ZAO Citibank, a unit of Citigroup Inc., automatically applied to
cover LBHI UK's account with the bank on September 15, 2008.
Citigroup is authorized under a prior stipulation with the
Debtors, which was approved by the Court early this year, to turn
over to the Debtors postpetition receipts that are deposited in
their bank accounts with Citigroup and its units throughout the
world. However, in compliance with the requirements of Russian
banking and other laws, the Debtors opted to seek a court order
that would authorize the turnover of the postpetition receipts of
RUB114,995,982, according to the Debtors' attorney, Lori Fife,
Esq., at Weil Gotshal & Manges LLP, in New York.
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 US$639 billion in assets and US$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)
LIBERTY MEDIA: Moody's Downgrades Corporate Family Rating to 'B1'
-----------------------------------------------------------------
Moody's Investors Service downgraded Liberty Media LLC's Corporate
Family Rating to B1 from Ba2, Probability of Default Rating to Ba3
from Ba2, and senior unsecured bonds to B1 from Ba2 following the
spin-off of the majority of its Liberty Entertainment group assets
including its 57% ownership stake in The DIRECTV Group (subsidiary
DIRECTV Holdings LLC has a Ba1 CFR). These actions conclude the
review for possible downgrade that was initiated on September 3,
2008 upon the spin-off announcement. Moody's also upgraded
Liberty's speculative-grade liquidity rating to SGL-1 from SGL-2.
The ratings of Liberty's wholly-owned subsidiary QVC, Inc. are not
affected, including QVC's Ba2 CFR and the Ba2 ratings on its 2019
notes and March 2006 credit facility, as amended. Liberty's
rating outlook is stable.
Downgrades:
Issuer: Liberty Media LLC
-- Corporate Family Rating, Downgraded to B1 from Ba2
-- Probability of Default Rating, Downgraded to Ba3 from Ba2
-- Senior Unsecured Regular Bond/Debenture, Downgraded to B1,
LGD4 - 67% from Ba2, LGD4 - 52%
-- Senior Unsecured Conv./Exch. Bond/Debenture, Downgraded to
B1, LGD4 - 67% from Ba2 - LGD4, 52%
Upgrades:
Issuer: Liberty Media LLC
-- Speculative Grade Liquidity Rating, Upgraded to SGL-1 from
SGL-2
Outlook Actions:
Issuer: Liberty Media LLC
-- Outlook, Changed To Stable From Rating Under Review
The downgrades are driven by Liberty's significantly reduced
financial flexibility and after-tax asset coverage of debt
following the spin-off of approximately $13 billion of liquid
assets in the form of DTVG stock and the increased proportional
reliance on the cash flow generated by QVC and the remaining
smaller and more speculative investment portfolio to service
Liberty's bonds. Moody's believes that the reduction in the
amount and diversity of assets supporting Liberty's bonds no
longer fully mitigate the structural subordination of Liberty's
stand alone debt to debt at subsidiaries including QVC, which
generates a substantial majority of Liberty's consolidated revenue
and cash flow. Moody's is also concerned that a potentially
volatile investment portfolio and cash may be used in a manner
that continues to benefit shareholders more than bondholders and
provides a less certain source of protection than a cash
generating asset such as QVC. These factors contribute to the
two-notch downgrade and the two-notch rating differential between
the respective CFR's of Ba2 for QVC and B1 for Liberty.
Liberty's B1 CFR and stable rating outlook reflect Moody's
expectation that the company's after-tax asset value-to-debt will
remain in an approximate 2x range. Moody's continues to include
QVC debt and asset values in calculating Liberty's consolidated
asset coverage. Moody's anticipates gross debt-to-EBITDA leverage
including QVC (approximately 6.9x LTM 9/30/09 pro forma for the
spin-off and incorporating Moody's standard adjustments) will
decline to a low 6x range in 2010, but will be well into a double
digit range excluding QVC. Liberty has repurchased bonds and
committed to a meaningful amortization schedule of QVC bank debt,
and this somewhat cushions the decline in the asset coverage
ratio.
QVC's credit agreement contains restrictions on distributions to
Liberty. QVC can upstream cash to service debt attributed to the
Liberty Media Interactive group tracking stock, to fund Liberty's
purchase of QVC bank debt, for taxes, and other payments subject
to and meeting a debt-to-EBITDA limit of 3.5x (stepping down to
3.25x in March 2010 and 3.0x in March 2011).
The company's Ba3 PDR and the one notch gap with the B1 CFR is
based upon Moody's assumption of a below average recovery rate
(35%) for Liberty in the event of a default. The ownership of QVC
provides a source of liquidity that Moody's also believes leads to
default risk more consistent with the Ba3 PDR. The notching of
Liberty's bonds (rated B1 with a LGD4 -- 67% assessment) relative
to its CFR is evaluated on a stand-alone basis (excluding QVC
debt) within Moody's Loss Given Default Methodology as QVC's bank
debt and bond ratings are based on QVC's Ba2 CFR. The 35% family
recovery rate is consistent with Moody's Loss Given Default
Methodology for all-bond structures.
The upgrade of the speculative-grade liquidity rating to SGL-1
from SGL-2 reflects the return of cash on the SiriusXM investment,
and incremental headroom under QVC's credit facility covenants
provided by debt reduction and a stabilization of earnings.
Liberty has a sizable cash balance (approximately $4.4 billion
post spin), no near term bond maturities, sufficient projected QVC
free cash flow to meet QVC's bank debt amortization, and good
cushion under the financial maintenance covenants in QVC's credit
facility.
The last rating on action Liberty occurred on February 18, 2009
when Moody's lowered the company's speculative grade liquidity
rating to SGL-2 from SGL-1.
Liberty's ratings were assigned by evaluating factors that Moody's
considers relevant to the credit profile of the issuer, such as
the company's (i) business risk and competitive position compared
with others within the industry; (iii) capital structure and
financial risk; (iii) projected performance over the near to
intermediate term; and (iv) management's track record and
tolerance for risk. Moody's compared these attributes against
other issuers both within and outside Liberty's core industry and
believes Liberty's ratings are comparable to those of other
issuers with similar credit risk.
Liberty, headquartered in Englewood, Colorado, is a holding
company that owns and operates a broad range of electronic
retailing, communications, and entertainment businesses and also
owns equity and debt positions in wide variety of technology,
media and telecommunications companies.
LOUISIANA HOSPITAL: To Auction Hospital Facility on December 9
--------------------------------------------------------------
The facility of Louisiana Hospital Center LLC on Airport Road
South of Interstate 12 will be up for sale at an auction set for
Dec. 9, 2010, in the U.S. Bankruptcy Court in New Orleans, Debra
Lemoine at the Advocate.com, citing court documents.
Proceeds of the sale, Ms. Lemoine says, will be used to repay the
Hammond Area Economic and Industrial Development District and G.E.
Capital.
G.E. Capital made an opening bid to credit the debt owned on the
facility by $8.7 million to gain title to the property, Ms.
Lemoine notes. Interested purchasers for the facility may submit
their offers until Dec. 7, 2009, she notes.
Based in Louisiana Hospital Center LLC operates a hospital. An
involuntary Chapter 11 petition (Bankr. E.D. La. Case No. 09-
11346) was filed against Louisiana Hospital Center, L.L.C., on
May 7, 2009.
MAGNA ENTERTAINMENT: 2 Developers Eyeing Pimlico, Laurel, Bowie
---------------------------------------------------------------
Sean R. Sedam at Gazette.net reports that the stalking horse bid
for Magna Entertainment Corp.'s Pimlico Race Course, Laurel Park
and Bowie Training Center could either come from Carl Verstandig
or David S. Cordish.
According to Gazette.net, Mr. Verstandig said that he is talking
to two large companies from the West Coast who are "well-known and
well-heeled" in the horse-racing industry about a joint bid for
the assets, while Mr. Cordish is also considering a bid.
Gazette.not states that Mr. Verstandig, which had said earlier
this year that he wanted to bid on Pimlico and Laurel Park but
would continue racing at Laurel while developing Pimlico, later
said that he wants to develop "excess land at Pimlico" into a mix
of office, medical and retail space, while keeping to the current
schedule of racing there and ensuring year-round racing at Laurel
Park and keeping the Preakness Stakes in Maryland.
The deadline to submit bids for the Maryland racetracks is on
Dec. 2. The auction will be Jan. 8, followed by a sale approval
hearing on Jan. 20.
A Feb. 25 auction is scheduled for the tracks Santa Anita and
Golden Gate Fields in California, and Gulfstream in Florida; with
bids due Feb. 10 and a sale hearing on Feb. 26
About Magna Entertainment
Based in Aurora, Ontario, Magna Entertainment Corp. is North
America's largest owner and operator of horse racetracks based on
revenue. The Company develops, owns and operates horse racetracks
and related pari-mutuel wagering operations, including off-track
betting facilities. MEC also develops, owns and operates casinos
in conjunction with its racetracks where permitted by law.
MEC owns and operates AmTote International, Inc., a provider of
totalisator services to the pari-mutuel industry, XpressBet(R), a
national Internet and telephone account wagering system, as well
as MagnaBet(TM) internationally. Pursuant to joint ventures, MEC
has a 50% interest in HorseRacing TV(R), a 24-hour horse racing
television network, and TrackNet Media Group LLC, a content
management company formed for distribution of the full breadth of
MEC's horse racing content.
Following its failure to meet obligations to lenders led by PNC
Bank, National Association, and Wells Fargo Bank, National
Association, and controlling shareholder MI Developments Inc.'s
decision not to provide further financial backing, Magna
Entertainment Corp. and 24 affiliates filed for Chapter 11 on
March 5, 2009 (Bankr. D. Del. Lead Case No. 09-10720).
Marcia L. Goldstein, Esq., and Brian S. Rosen, Esq., at Weil,
Gotshal & Manges LLP, have been engaged as bankruptcy counsel.
Mark D. Collins, Esq., L. Katherine Good, Esq., and Maris J.
Finnegan, Esq., at Richards, Layton & Finger, P.A., are the
Debtors' local counsel. Miller Buckfire & Co. LLC is the Debtors'
investment banker and financial advisor. Kurtzman Carson
Consultants LLC is the claims and noticing agent for the Debtors.
Magna Entertainment Corp. had total assets of US$1.054 billion and
total liabilities of US$947.3 million based on unaudited
consolidated financial statements as of December 31, 2008.
MAGNA ENTERTAINMENT: $600,000 Executive Bonus Program Approved
--------------------------------------------------------------
Bill Rochelle at Bloomberg News reports that Magna Entertainment
Corp. obtained permission from the Bankruptcy Court to adopt a
bonus program for executives that may pay as much as $600,000,
although no more than half a year's salary to any individual.
According to the report, participants in the program include the
chief financial officer, the general counsel, the controller and
the vice president for finance.
Based in Aurora, Ontario, Magna Entertainment Corp. is North
America's largest owner and operator of horse racetracks based on
revenue. The Company develops, owns and operates horse racetracks
and related pari-mutuel wagering operations, including off-track
betting facilities. MEC also develops, owns and operates casinos
in conjunction with its racetracks where permitted by law.
MEC owns and operates AmTote International, Inc., a provider of
totalisator services to the pari-mutuel industry, XpressBet(R), a
national Internet and telephone account wagering system, as well
as MagnaBet(TM) internationally. Pursuant to joint ventures, MEC
has a 50% interest in HorseRacing TV(R), a 24-hour horse racing
television network, and TrackNet Media Group LLC, a content
management company formed for distribution of the full breadth of
MEC's horse racing content.
Following its failure to meet obligations to lenders led by PNC
Bank, National Association, and Wells Fargo Bank, National
Association, and controlling shareholder MI Developments Inc.'s
decision not to provide further financial backing, Magna
Entertainment Corp. and 24 affiliates filed for Chapter 11 on
March 5, 2009 (Bankr. D. Del. Lead Case No. 09-10720).
Marcia L. Goldstein, Esq., and Brian S. Rosen, Esq., at Weil,
Gotshal & Manges LLP, have been engaged as bankruptcy counsel.
Mark D. Collins, Esq., L. Katherine Good, Esq., and Maris J.
Finnegan, Esq., at Richards, Layton & Finger, P.A., are the
Debtors' local counsel. Miller Buckfire & Co. LLC is the Debtors'
investment banker and financial advisor. Kurtzman Carson
Consultants LLC is the claims and noticing agent for the Debtors.
Magna Entertainment Corp. had total assets of $1.054 billion and
total liabilities of $947.3 million based on unaudited
consolidated financial statements as of December 31, 2008.
MAJESTIC STAR: Files for Bankruptcy in Delaware
-----------------------------------------------
Majestic Star Casino LLC and seven affiliates filed for Chapter 11
bankruptcy on Monday before the U.S. Bankruptcy Court for the
District of Delaware (Bankr. D. Del. Case No. 09-14136) after
months of talks with lenders failed to produce an agreement on
restructuring its defaulted debt, Tom Hals at Reuters says, citing
court documents. Majestic Star listed assets of $402.1 million
and liabilities of $771.1 million as of October 31, 2009,
according to Reuters.
Reuters says Majestic's parent, Barden Development Inc, which is
owned by Detroit businessman Don Barden, is not part of the
bankruptcy. Barden Development owns a Las Vegas casino.
On November 12, 2009, Majestic Star filed a Form 15 with the
Securities and Exchange Commission to deregister its 9-1/2% Senior
Secured Notes due 2010 and 9-3/4% Senior Notes due 2011.
Reuters says the Company is not seeking debtor-in-possession
financing to fund its operations in bankruptcy, according to court
documents. Mr. Hals relates Majestic Star reported having $62.5
million in cash as of June 30, 2009, according to a regulatory
filing, and said in court documents its business produces positive
cash flow, excluding debt payments.
Debt includes $79.3 million owing on the senior secured credit
facility where Wells Fargo Foothill Inc. serves as agent senior
secured noteholders with a second lien are owed $300 million. In
unsecured debt, Majestic Star owes $200 million on senior notes
and $63.5 million on discount notes.
As reported by the TCR on Nov. 9, 2009, the Majestic Star Casino,
LLC, on October 30, 2009, received a Notice of Events of Default
and Reservation of Rights from the administrative agent for the
lenders under the Company's Senior Secured Credit Facility and
relating to the Loan and Security Agreement, dated as of October
7, 2003, as amended, restated, supplemented, or otherwise modified
from time to time. In the Acceleration Notice, the Agent declared
all obligations under the Loan and Security Agreement, in the
amount of $79,334,364, immediately due and payable.
An Event of Default exists under Majestic Star Casino's $300.0
million of 9-1/2% Senior Secured Notes due 2010, $200.0 million of
9-3/4% Senior Notes due 2011 and $80.0 million Senior Secured
Credit Facility.
About Majestic Star
The Majestic Star Casino, LLC, is a wholly owned subsidiary of
Majestic Holdco, LLC, which is a wholly owned subsidiary of Barden
Development, Inc. The Company was formed on December 8, 1993, as
an Indiana limited liability company to provide gaming and related
entertainment to the public. The Company commenced gaming
operations in the City of Gary at Buffington Harbor, located in
Lake County, Indiana on June 7, 1996. The Company is a multi-
jurisdictional gaming company with operations in three states --
Indiana, Mississippi and Colorado.
The Majestic Star Casino, LLC's balance sheet at June 30, 2009,
showed total assets of $406.42 million and total liabilities of
749.55 million, resulting in a members' deficit of
$343.13 million.
METROMEDIA INT'L: Plan Exclusivity Extended Until Feb. 16
---------------------------------------------------------
The Hon. Kevin Gross of the U.S. Bankruptcy Court for the District
of Delaware extended the exclusive periods of MIG, Inc., fka
Metromedia International Group, Inc. The Debtor's exclusive
period to file a plan of reorganization is extended until Feb. 16,
2010; and its time to solicit acceptances of the plan is extended
until April 16, 2010.
The Official Committee of Unsecured Creditors opposed the
requested extension, citing that the bankruptcy reorganization was
filed "for the naked purpose" of obtaining a stay of the Delaware
court judgment.
MIG was bought in October 2007 by CaucusCom Ventures LP for
USUS$1.80 a share, or about USUS$170 million, according to data
compiled by Bloomberg. A group of preferred shareholders asked
Judge William B. Chandler of the Delaware Chancery Court to
evaluate the value of their shares at the time of the merger.
Judge Chandler ruled that each share was worth USUS$47.47, or a
total of about USUS$188.4 million. MIG appealed the ruling.
But unable to post a bond enabling an appeal, MIG filed for
Chapter 11.
Bankruptcy Judge Kevin Gross allowed MIG Inc. to continue an
appeal of the Delaware Chancery Court decision. MIG said the
amount of the judgment is "substantially overstated," and said its
assets will turn out to be worth much more than the judgment, even
though the assets currently are illiquid. However, this November,
the Delaware Supreme Court upheld the judgment against MIG.
MIG Inc. then filed a proposed Chapter 11 plan, less than three
weeks after the Delaware Supreme Court affirmed the $188 million
judgment. The plan offers an 80% recovery for holders of
$3.8 million in unsecured claims. Existing common shareholders
are to retain the common stock and would be allowed to vote.
The plaintiffs in the appraisal action, who were preferred
shareholders, are being offered some of the company's excess
cash, a note and equity for an expected 100% recovery. The
note would bear 10.5% interest and mature in 2017.
About MIG Inc.
Based in Charlotte, North Carolina, MIG Inc. (PINK SHEETS: MTRM,
MTRMP) -- http://www.metromedia-group.com/-- through its wholly
owned subsidiaries, owns interests in several communications
businesses in the country of Georgia. The Company's core
businesses include Magticom Ltd., a mobile telephony operator
located in Tbilisi, Georgia, Telecom Georgia, a long distance
telephony operator, and Telenet, which provides Internet access,
data communications, voice telephony and international access
services.
MIG, Inc., fka Metromedia International Group, Inc., filed for
Chapter 11 bankruptcy protection on June 18, 2009 (Bankr. D. Del.
Case No. 09-12118). Scott D. Cousins, Esq., at Greenberg Traurig
LLP assists the Company in its restructuring efforts. Debevoise &
Plimpton LLP is the Company's special corporate counsel, while
Potter Anderson & Corroon LLP is the Company's special litigation
counsel. The official committee of unsecured creditors of MIG,
Inc., has retained Baker & McKenzie LLP as its bankruptcy
counsel, nunc pro tunc to June 30, 2009.
In its petition, the Company said it had $100 million to
$500 million in assets and $100 million to $500 million in
debts. In its formal schedules, the Company said it had assets of
METROMEDIA INT'L: Unsec. Creditors to Recover 70% Under Plan
------------------------------------------------------------
MIG, Inc., fka Metromedia International Group, Inc. filed with the
U.S. Bankruptcy Court for the District of Delaware a Plan of
Reorganization and a disclosure statement explaining the Plan.
According to the Plan, the Reorganized Debtor may enter into
transactions and may take actions to effect a corporate or
operational restructuring of its business, to simplify the overall
corporate or operational structure of the Reorganized Debtor, to
achieve corporate or operational efficiencies, or to improve
financial results; provided that the transactions or actions are
not inconsistent with the Plan, the distributions to be made under
the Plan or the New Corporate Governance Documents. The
transactions or actions may include any mergers, conversions,
consolidations, restructurings, dispositions, liquidations,
closures, or dissolutions, as may be determined by the Reorganized
Debtor to be necessary or appropriate.
The overview of certain material terms of the Plan include:
-- The Debtor will be reorganized, converted into a
Delaware limited liability company and continue in
operation.
-- Allowed administrative claims and priority tax claims will
be paid in full, unless agreed by the holders of the claims.
-- Allowed other priority claims will be paid in full in cash
on the distribution date, unless otherwise agreed by the
holders of the claims.
-- Allowed secured workers' compensation obligations claims
will receive cash payments in the ordinary course as set
forth in the order authorizing the Debtor to pay certain
prepetition workers compensation obligations in the ordinary
course of business.
-- Class 3 Hauf secured claim will be allowed in the amount of
$607,500, which is 90% of the total class 3 claims, and
receive cash on the distribution date in the allowed amount
of its claim.
-- Allowed Class 4 general unsecured claims will be paid in
cash on the distribution date, 70% of the allowed amount of
each holder's claim.
-- On the distribution date, each holder of an allowed class 5
claim will receive, in full, final and complete
satisfaction, settlement, release, and discharge of the
allowed class 5 claim its pro rata share of class 5's
ratable portion of the sum of (x) 100% of excess cash; plus
(y) the common B membership interests; plus (z) New MIG
Notes in the principal amount equal to the difference
between the (a) allowed final appraisal amount and the
allowed non-appraisal amount of claims of electing class 6
holders and (b) the sum of excess cash and the common b
membership equity distribution value.
-- A holder of an allowed class 6 claim will be entitled to
elect to receive, in full, final and complete satisfaction,
settlement, release, and discharge of the allowed class 6
claim, one of the after forms of treatment under the Plan:
(i) one preferred unit per share of preferred equity
interests held by the holder of an allowed class 6 claim; or
(ii) its pro rata share of class 6's ratable portion of the
sum of (x) 100% of excess cash; plus (y) the common b
membership interests; plus (z) New MIG Notes in the
principal amount equal to the difference between the (a)
allowed final appraisal amount and the allowed non-appraisal
amount of claims of electing class 6 holders and (b) the sum
of excess cash and the common b membership equity
distribution value; provided, however, that the Holder of an
allowed class 6 claim makes the written election provided
for in Section 3.03(d)(ii) of the Plan on a validly executed
ballot that is delivered on or before the otherwise voting
deadline.
-- A holder of an allowed class 7 common equity interest will
receive its pro rata share of common a membership interests.
The Plan provides that cash payments under the Plan will be in
U.S. funds, and will be made, at the option, and in the sole
discretion, of the Reorganized Debtor, by (i) checks drawn on or
(ii) wire transfers from a domestic bank selected by the
Reorganized Debtor. Cash payments to foreign creditors may be
made, at the option, and in the sole discretion, of the
Reorganized Debtor, in the funds and by the means as are
necessary or customary in a particular foreign jurisdiction. Cash
payments made pursuant to the Plan in the form of checks issued by
the Reorganized Debtor will be null and void if not cashed within
120 days of the date of the issuance thereof. Requests for
reissuance of any check will be made directly to the Reorganized
Debtor.
For purposes of effectuating distributions under the Plan, any
claim denominated in foreign currency will be converted to U.S.
dollars pursuant to the applicable published exchange rate in
effect on the petition date.
A full-text copy of the Plan of Reorganization is available for
free at:
http://bankrupt.com/misc/MetroMediaIntl_PlanofReorganization.pdf
A full-text copy of the Disclosure Statement is available for free
at http://bankrupt.com/misc/MetroMediaIntl_DisclosureStatement.pdf
About MIG Inc.
Based in Charlotte, North Carolina, MIG Inc. (PINK SHEETS: MTRM,
MTRMP) -- http://www.metromedia-group.com/-- through its wholly
owned subsidiaries, owns interests in several communications
businesses in the country of Georgia. The Company's core
businesses include Magticom Ltd., a mobile telephony operator
located in Tbilisi, Georgia, Telecom Georgia, a long distance
telephony operator, and Telenet, which provides Internet access,
data communications, voice telephony and international access
services.
MIG, Inc., fka Metromedia International Group, Inc., filed for
Chapter 11 bankruptcy protection on June 18, 2009 (Bankr. D. Del.
Case No. 09-12118). Scott D. Cousins, Esq., at Greenberg Traurig
LLP assists the Company in its restructuring efforts. Debevoise &
Plimpton LLP is the Company's special corporate counsel, while
Potter Anderson & Corroon LLP is the Company's special litigation
counsel. The official committee of unsecured creditors of MIG,
Inc., has retained Baker & McKenzie LLP as its bankruptcy
counsel, nunc pro tunc to June 30, 2009.
In its petition, the Company said it had US$100 million to
US$500 million in assets and US$100 million to US$500 million in
debts. In its formal schedules, the Company said it had assets of
$54,820,681 against debts of $210,183,657.
MIRABILIS VENTURES: Court Confirms Joint Amended Liquidating Plan
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Florida
confirmed late October the joint amended plan of liquidation
submitted by Mirabilis Ventures, Inc., Hoth Holdings, LLC, and
AEM, Inc..
The Plan provides for the liquidation of all of the Debtors'
assets and the cessation of its business. R.W. Cuthill, Jr. was
appointed as the initial President and the initial Director of the
Liquidating Debtor.
Allowed unsecured claims will receive their pro rata distribution
of payment from the Liquidated Debtors after the allowed priority
claims have been paid in full. Equity interests will be
cancelled.
Recoveries for creditors will come from the income generated from
the liquidation of the Debtors' assets on the petition date, the
proceeds from litigation, the proceeds from settlements, and
payments made on promissory notes currently held by the Debtors.
The Debtors say it is unable to provide an estimate of timing or
amounts of recoveries to unsecured creditors because recovery of
the various litigations, which includes some large, successful
corporations, is uncertain.
A full-text copy of the amended joint disclosure statement
explaining the Debtors' plan of liquidation is available for free
at http://bankrupt.com/misc/mirabilis.ds.pdf
About Mirabilis Ventures
Orlando, Florida-based Mirabilis Ventures Inc. is a private equity
company, which acquired companies companies that has a strategic
fit into its unique business model. The Company and two of its
affiliates, filed for Chapter 11 protection on May 27, 2008
(Bankr. M.D. Fla. Lead Case No. 08-04327). Elizabeth A. Green,
Esq., and Jimmy D. Parish, Esq., at Latham Shuker Eden & Beaudine
LLP, represents the Debtors in their restructuring efforts. When
the Debtors filed for protection from their creditors, they listed
between $50 million and $100 million each in assets and debts.
MOONLIGHT BASIN: Files Chapter 11 to Halt Lehman Foreclosure
------------------------------------------------------------
Moonlight Basin Ranch L.P. and its subsidiaries filed voluntary
petitions in U.S. Bankruptcy Court for the District of Montana for
reorganization under Chapter 11 of the U.S. Bankruptcy Code.
"This was a necessary decision brought on by Lehman Brothers'
actions, including its recent effort to foreclose on Moonlight
Basin Resort and the uncertain future of the Resort resulting from
Lehman Brothers' actions," said Russ McElyea, COO. "We decided
that it is in the best interest of the Moonlight Basin family,
including our creditors, employees, customers, suppliers, home
owners, and the Montana communities in which Moonlight Basin
operates to reorganize under Chapter 11."
Moonlight Basin concluded that Bankruptcy Court protection was
necessary as a result of Lehman Brothers' decision to foreclose on
an outstanding loan, and its threats to cease critical funding,
rather than work with Moonlight Basin to appropriately restructure
its debt contrary to its prior representations to Moonlight Basin.
Chapter 11 protection will enable Moonlight Basin to conduct its
business operations as usual while it develops a long term
reorganization plan. With the bankruptcy filing, the foreclosure
action brought by Lehman Brothers against Moonlight Basin is
automatically stayed while the reorganization goes forward.
Moonlight Basin's staff, which consists of over 250 seasonal and
year round employees are excited about the upcoming ski season.
This year, Moonlight Basin is part of a community wide effort to
promote Big Sky, Montana and the Biggest Skiing in America. The
Moonlight Basin and Big Sky Resort interconnect ticket provides
access to over 5,500 acres of terrain. Moonlight Basin is excited
to offer a collection of new events and programs for the season,
including a Freeride Team, new SnowSports programs and expanded
terrain park. In addition, Moonlight Basin is proud to encourage
academic achievement in our local community through our legendary
M-BAR-T program, which rewards scholastic achievement with free
skiing at Moonlight Basin. Each of these programs will continue
without interruption.
"With this filing, we can assure everyone -- our customers, home
owners, suppliers, employees and our communities -- that Moonlight
Basin intends to be open for business as usual. We look forward to
a successful opening of the ski season at Moonlight Basin on
December 1," added Lee Poole, President and CEO. "Our guests can
continue to rely on us for our genuine Montana hospitality and our
commitment to the land we cherish."
Moonlight Basin Ranch LLP --
http://www.moonlightbasin.com/site/index.html-- operates resort
with 5500 acre ski resort, Jack Nicklaus 18-hole golf course, spa
and lodge.
MPC CORPORATION: Files Liquidating Chapter 11 Plan
--------------------------------------------------
MPC Corp. filed with Bankruptcy Court a proposed Plan of
Liquidation and an explanatory Disclosure Statement.
The purpose of the Plan is to conclude the Debtors' orderly
liquidation of assets and govern distributions to creditors.
Under the Plan, secured creditors will recover 100% of their
claims in the form of cash, payment from the proceeds from the
sale of their collateral, or the surrender of the collateral to
the claimants. Unsecured claimants will receive their pro rata
share from "distributable cash". To the extent they are paid in
full, the unsecured creditors will be entitled to receive
postpetition interest. Equity holders won't receive any
distributions.
If the Plan is not confirmed, the Debtors believe that they will
be forced either to liquidate under Chapter 7 of the Bankruptcy
Code of dismiss their bankruptcy cases. In either event, the
Debtors believe that the Debtors' unsecured creditors would
receive smaller distributions, or, in certain cases, none at all,
for their claims.
The Plan effects a transfer of all of the Debtors' assets and
liabilities into the newly-formed liquidating trust created for
the purposes, among others, of making distributions to the holders
of allowed claims and interests, pursuing causes of action and
otherwise completing the liquidation of the estates.
A copy of the Plan is available for free at:
http://bankrupt.com/misc/MPC_Chapter11Plan.pdf
A copy of the Disclosure Statement is available for free at:
http://bankrupt.com/misc/MPC_DiscStatement.pdf
About MPC Corporation
Headquartered in Nampa, Idaho, MPC Corporation --
http://www.mpccorp.com/-- sells personal computer and provides
computer softwares and hardwares to mid-size businesses,
government agencies and education organizations. The Debtors
acquired Gateway Professional Divison from Gateway Inc. and
Gateway Technologies Inc. in October 1, 2007.
The Company and eight of its affiliates filed for Chapter 11
protection on Nov. 6, 2008 (Bankr. D. Del. Lead Case No. 08-
12673). Richard A. Robinson, Esq., at Reed Smith LLP, represents
the Debtors in their restructuring efforts. The Debtor selected
Focus Management Group USA, LLC, as its financial advisor.
Roberta A. DeAngelis, the United States Trustee for Region 3,
appointed seven creditors to serve on an Official Committee of
Unsecured Creditors for the chapter 11 cases of MPC Corporation
and its debtor-affiliates. Hahn & Hessen LLP has been named as
Committee's lead counsel. As of June 30, 2008, the Debtors have
$258.3 million in total assets and $277.8 million in total debts.
MVP HEALTH CARE, INC.: A.M. Best Downgrades FSR to 'B'
------------------------------------------------------
A.M. Best Co. has downgraded the financial strength ratings (FSR)
to B (Fair) from B+ (Good) and issuer credit ratings (ICR) to
"bb+" from "bbb-" of MVP Health Insurance Company (Schenectady,
NY) and Preferred Assurance Company, Inc. (Rochester, NY).
Additionally, A.M. Best has downgraded the FSRs to B- (Fair) from
B (Fair) and ICRs to "bb-" from "bb+" of MVP Health Plan of New
Hampshire, Inc. (Bedford, NH) and MVP Health Insurance Company of
NH, Inc. (Manchester, NH). All of the above ratings have been
placed under review with negative implications. Concurrently,
A.M. Best has placed under review with negative implications and
affirmed the FSRs of B+ (Good) and ICRs of "bbb-" of MVP Health
Plan, Inc. and MVP Health Services Corp. (both of Schenectady,
NY).
These rating actions follow the reporting of negative capital and
surplus levels at MVP Health Insurance Company and MVP Health
Insurance Plan of New Hampshire, Inc. for third quarter 2009. The
negative capital and surplus levels at these two insurance
companies resulted from underwriting and net losses through
September 2009. The management of the parent company, MVP Health
Care, Inc. (Schenectady, NY), is working to gain regulatory
approval from the New York State Insurance Department and the New
York State Department of Health to transfer capital to these
entities.
The ratings will remain under review until sufficient capital
levels are achieved at all of the insurance subsidiaries and the
completion of further discussions with MVP Health Care, Inc's
management on full year 2009 projections as well as financial
projections for 2010 and the overall capital management of all
insurance subsidiaries.
NEUROGEN CORP: Posts $1.9 Million Net Loss in Q3 2009
-----------------------------------------------------
Neurogen Corporation posted a net loss of $1,943,000 for the three
months ended September 30, 2009, compared with a net loss of
$6,527,000 in the same period in 2008.
For the nine months ended September 30, 2009, the Company posted a
net loss of $20,290,000, compared with a net loss of $29,479,000
in the same period in 2008.
The Company's consolidated balance sheets at September 30, 2009,
showed total assets of $19,381,000, total liabilities of
$6,230,000 and total stockholders' equity of $13,151,000.
Neurogen's cash and marketable securities as of September 30,
2009, totaled $15,312,000, compared to $31,073,000 at
December 31, 2008.
A full-text copy of the Company's Form 10-Q is available for free
at http://researcharchives.com/t/s?4a27
Going Concern Doubt
The Company has not derived any revenue from product sales to
date. If the Company were to resume development of its drug
candidates, it would expect to incur substantial and increasing
losses for at least the next several years and would need
substantial additional financing to obtain regulatory approvals,
fund operating losses, and if deemed appropriate, establish
manufacturing and sales and marketing capabilities. The Company
believes these circumstances, among others, raise substantial
doubt about its ability to continue as a going concern.
About Neurogen Corporation
Neurogen Corporation (Nasdaq NRGN) -- http://www.neurogen.com/--
-- is a drug development company historically focusing on small-
molecule drugs to improve the lives of patients suffering from
psychiatric and neurological disorders with significant unmet
medical need.
NOBLE INTERNATIONAL: Files Amended Plan of Liquidation and DS
-------------------------------------------------------------
Noble International, Ltd., and its debtor-affiliates filed with
the U.S. Bankruptcy Court for the Eastern District of Michigan
fine-tuned their amended joint plan of liquidation and a
disclosure statement explaining the plan.
Noble International's plan contemplates the sale of substantially
all of the Debtors' assets before the plan's effective date, free
and clear of all liens, claims, encumbrances and interests.
According to the disclosure statement, the plan, on the effective
date, any proceeds generated by the sale of the assets, after
satisfaction of all claims entitled to payment, will be
transferred to the liquidating trust.
A full-text copy of the Debtors' amended Disclosure Statement is
available for free at http://researcharchives.com/t/s?4a2d
A full-text copy of the Debtors' amended Plan of Liquidation is
available for free at http://researcharchives.com/t/s?4a2e
Headquartered in Warren, Michigan, Noble International, Ltd. --
http://www.nobleintl.com/home.html/-- provides flat, tubular,
shaped and enclosed formed structures to automotive original
equipment manufacturers and their suppliers, for use in automobile
applications, including doors, fenders, body side panels, pillars,
bumpers, door beams, load floors, windshield headers, door tracks,
door frames, and glass channels.
Noble International and its affiliates filed for Chapter 11
protection on April 15, 2009 (Bankr. E.D. Mich. Case No. 09-
51720). The Debtors proposed Foley & Lardner LLP as their general
bankruptcy counsel. Conway Mackenzie, Inc., has been tapped as
the Debtors' financial advisors. The official committee of
unsecured creditors is represented by Jaffe Raitt Heuer & Weiss,
P.C. The Debtors disclosed total assets of $190,763,000 and total
debts of $38,691,000, as of January 10, 2009.
NORTEL NETWORKS: Ciena Wins Auction for Ethernet Business
---------------------------------------------------------
Ciena(R) Corporation has been selected as the successful bidder in
the auction of substantially all of the optical networking and
carrier Ethernet assets of Nortel's Metro Ethernet Networks (MEN)
business. Ciena has agreed to pay US $530 million in cash and
issue US $239 million in aggregate principal amount of 6% Senior
Convertible notes due 2017 for a total consideration of
US$769 million for the assets.
A motion to approve Ciena as the acquirer will be heard by
bankruptcy courts in the U.S. and Canada on December 2, 2009.
"These optical and carrier Ethernet assets bring exceptional
technologies, talent and scale that will accelerate Ciena's
current strategy to deliver innovative network solutions to
customers worldwide," said Gary Smith, Ciena's CEO and president.
"With this combination, we are bringing together complementary
technologies in switching and transport to create an innovative
powerhouse with the scale to challenge the industry status quo and
offer customers a practical path for transitioning to automated,
optical Ethernet-based networking. We will be intently focused on
integration as we work together to deliver the benefits of this
transaction to customers, employees and shareholders."
"Ciena provides a natural fit for Nortel's Optical and Carrier
Ethernet assets, providing an environment where our businesses'
expertise and technology can be grown and leveraged," said
Philippe Morin, president, Metro Ethernet Networks for Nortel.
"The combination of our two organizations creates an industry
powerhouse with a heritage of innovation and a shared commitment
to building and maintaining reliable networks. With today's
agreement, Nortel customers can be assured that they will be
working with a known, trusted and experienced partner who can
ensure continuity of supply and continue Nortel's heritage of
innovation."
The assets to be acquired generated approximately $1.36 billion in
revenue for Nortel in 2008 and $556 million (unaudited) in the
first six months of 2009. Ciena expects the transaction to be
significantly accretive to Ciena's results of operations in fiscal
2011. Ciena is also expected to make employment offers to at least
2,000 Nortel employees to become part of Ciena's global team of
network specialists.
The transaction is expected to close in the first calendar quarter
of 2010. Ciena has been granted early termination of the
antitrust waiting period under the Hart-Scott-Rodino Act and also
has received notification from the Canadian Competition Bureau
terminating the applicable waiting period for the proposed
transaction under the Competition Act. The transaction remains
subject to additional regional regulatory clearances and customary
closing conditions.
Details of the Convertible Notes to be Issued in the Acquisition
A portion of the aggregate consideration consists of 6% senior
convertible notes, to be issued to the sellers by Ciena with terms
substantially similar to Ciena's outstanding series of 2017 senior
convertible notes. The notes will be senior unsecured obligations
and will rank equally with all of Ciena's other existing and
future senior unsecured debt. The notes will bear interest at the
rate of 6.0% per annum, payable semi-annually, commencing six
months after the date of issuance, and will mature on June 15,
2017. The interest rate is subject to an upward adjustment up to
a maximum of 8% per annum, in the event that the volume weighted
average price of Ciena's common stock price over the measuring
period immediately preceding closing is below $13.17 per share.
The notes may be converted prior to maturity (unless earlier
redeemed) at the option of the holder into shares of Ciena common
stock at the initial conversion rate of 60.744 shares of Ciena
common stock per $1,000 in principal amount of Notes, which is
equal to an initial conversion price of approximately $16.4625 per
share, subject to customary adjustments. Prior to the notes
becoming freely transferable in the hands of the holders, which is
expected to occur approximately 60 days after the closing, Ciena
has the right to replace its obligation to issue the notes (or
redeem the notes if they have been issued) with cash in the
principal amount equal to the greater of 105% of the face amount
of the notes or 95% of the fair value of the notes (or, under
certain circumstances, at 100% of the face amount of the notes).
During that time period, Ciena must offer to use the net proceeds
of a capital raising transaction to redeem the notes at the above
price.
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: Weil Gotshal, Other Pros Get OK in Nortek Ch. 11
--------------------------------------------------------------
Law360 reports that NTK Holdings Inc. -- the parent company of
heating, ventilation and consumer technology manufacturer Nortek
Inc. -- has received approval to retain Weil Gotshal & Manges LLP
and a number of other professionals for its prepackaged bankruptcy
case.
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).
ONE COMMUNICATIONS: Forbearance Deal Cues Moody's Rating Reviews
----------------------------------------------------------------
Moody's Investors Service has placed the ratings of One
Communications Corp on review for possible downgrade, following
the announcement by the company that it has entered into a
forbearance agreement with its lenders regarding a potential
covenant breach for the quarter ended September 30, 2009.
Rating Actions:
On Review for Possible Downgrade:
Issuer: One Communications Corp.
-- Probability of Default Rating, Placed on Review for Possible
Downgrade, currently B2
-- Corporate Family Rating, Placed on Review for Possible
Downgrade, currently B2
-- Senior Secured Bank Credit Facility, Placed on Review for
Possible Downgrade, currently B2-LGD4, 51%
Outlook Actions:
Issuer: One Communications Corp.
-- Outlook, Changed To Rating Under Review From Stable
Over the past two years, One Communications' revenue and EBITDA
have fallen, as the Company's operations have been impacted by the
highly competitive environment in the northeastern USA, while the
Company's Midwest operations were hit by the macroeconomic forces.
In addition, the ongoing challenges in revamping the sales force
have contributed to the revenue shortfalls.
As a result of the decline in the Company's EBITDA, One
Communications may be in technical default of financial covenants
under its credit facilities. The Company has initiated an
amendment process with the bank group. Moody's will monitor the
developments with the lenders. The conclusion of the review will
be greatly influenced by the outcome of the amendment process.
Moody's notes that the company's adjusted debt/EBITDA leverage at
9/30/09 was 3.3x, which is moderate for a CLEC, and there is a low
probability of a default or impairment at this point, assuming the
company either cures its default with an equity injection or
attains relief from the covenant pressure for a reasonable period
of time. Moody's also notes that certain of the company's
existing sponsors are willing to support the Company with a
$25 million commitment to cure the covenant default, as permitted
within the credit agreement. Nevertheless, depending on the final
terms of the amendment, the company's ultimate credit profile will
likely worsen, as it will pay a higher interest rate on its debt,
and as the revenue and EBITDA slide trend continues. Moody's
believes that with an amendment, it is unlikely that One
Communications' ratings would be downgraded by more than one
notch.
Moody's review will focus on a) the Company's ability to
successfully obtain an amendment from its lenders resetting the
covenant levels to give it operating flexibility over the next 12
to 18 months, b) Moody's comfort with the company's business plan
going forward, and c) the company's path to restore free cash flow
growth.
Moody's most recent rating action for One Communications was on
August 12, 2009. At that time Moody's withdrew the ratings on the
company's proposed senior secured notes issuance, due to
unfavorable market conditions.
One Communications is a CLEC headquartered in Burlington, MA. The
Company generated over $785 million in revenues in 2008.
OPUS WEST: Franklin Skierski Bills $93,000 for Jul.-Sep. Work
-------------------------------------------------------------
Professionals retained in connection with the Opus West Debtors'
bankruptcy cases filed applications for payment of fees and
reimbursement of expenses for these periods:
Professional Applicable Period Fees Expenses
------------ ----------------- -------- --------
Franklin Skierski Jul.-Sep. 2009 $93,285 $381
Lovall Hayward LLP Oct. 2009 7,640 76
Greenberg Traurig Oct. 2009 78,037 1,967
LLP
Pronske & Patel Jul. 2009 1,113 2
P.C. Aug. 2009 20 0
Sep. 2009 9,760 838
In addition, Franklin Skierski seeks the Court's authority to
draw down $18,657 from a retainer, which represent the remaining
20% of fees the Debtors still owe the firm for the July to
September 2009 period.
In separate filings, these professionals certified that no
objections to their monthly fee applications for these periods
were asserted:
Professional Period
------------ ------
Chatham Financial Corp. Jul.-Aug. 2009
Gardere Wynn Sewell LLP Sep. 2009
* * *
The Court approves the fee application of Chatham Financial for
the July to August 2009 period.
About Opus West Corporation
Based in Phoenix, Arizona, Opus West Corporation is a full-service
real estate development firm that focuses on acquiring,
constructing, operating, managing, leasing and/or disposing of
real estate development projects primarily located in the western
United States.
Opus West and its affiliates filed for Chapter 11 on July 6, 2009
(Bankr. N.D. Tex. Case No. 09-34356). Clifton R. Jessup, Jr., at
Greenberg Traurig, LLP, represents the Debtors in their
restructuring efforts. Franklin Skierski Lovall Hayward, LLP, is
co-counsel to the Debtors. Pronske & Patel, P.C., is conflicts
counsel. Chatham Financial Corp. is financial advisor. BMC Group
is the Company's claims and notice agent. As of May 31, Opus West
-- together with its non-debtor affiliates -- had $1,275,334,000
in assets against $1,462,328,000 in debts. In its bankruptcy
petition, Opus West said it had assets and debts both ranging from
$100 million to $500 million.
Opus West joins affiliates that previously filed for bankruptcy.
Opus East LLC, a real estate operator from Rockville, Maryland,
commenced a Chapter 7 liquidation on July 1 in Delaware. Opus
South Corp., a Florida condominium developer based in Atlanta,
filed a Chapter 11 petition April 22 in Delaware.
Bankruptcy Creditors' Service, Inc., publishes Opus West
Bankruptcy News. The newsletter tracks the separate Chapter 11
proceedings of Opus West Corp. and Opus South Corp. and their
related debtor-affiliates. (http://bankrupt.com/newsstand/
or 215/945-7000)
OPUS WEST: Gets Nod to Release $54MM Lakepointe Property Lien
-------------------------------------------------------------
Before the Petition Date the Opus West Corp. and its units entered
into a Deed of Trust, Assignment, Security Agreement and Fixture
Filing, wherein Opus West L.P. granted a $54,400,000 lien on their
property known as "the Lakepointe property" to Opus West
Corporation.
Clifton R. Jessup, Jr., Esq., at Greenberg Traurig LLP, in
Dallas, Texas, relates that the purpose of the Deed of Trust was
to secure financing to fund the costs of constructing
improvements on the Lakepointe Property and certain other costs
and expenses. He notes that as of October 6, 2009, no funds have
been advanced from OWC to OWLP under the documents secured by the
Deed of Trust.
Accordingly, the Opus West Corp. and its units obtained approval
from the Bankruptcy Court to release the lien contained in the
Deed of Trust.
Since no amounts were advanced by OWC to OWLP pursuant to the
loan documents, OWC and OWLP each seek the Court's authority
pursuant to Sections 105 and 363 of the Bankruptcy Code to
release the lien on the Lakepointe Property as it secures no
debt.
Mr. Jessup asserts that the release of the lien is equitable
because it allows the creditors of the estates to properly
benefit from the sale of the assets of each estate without
competing with potential inter-debtor claims.
About Opus West Corporation
Based in Phoenix, Arizona, Opus West Corporation is a full-service
real estate development firm that focuses on acquiring,
constructing, operating, managing, leasing and/or disposing of
real estate development projects primarily located in the western
United States.
Opus West and its affiliates filed for Chapter 11 on July 6, 2009
(Bankr. N.D. Tex. Case No. 09-34356). Clifton R. Jessup, Jr., at
Greenberg Traurig, LLP, represents the Debtors in their
restructuring efforts. Franklin Skierski Lovall Hayward, LLP, is
co-counsel to the Debtors. Pronske & Patel, P.C., is conflicts
counsel. Chatham Financial Corp. is financial advisor. BMC Group
is the Company's claims and notice agent. As of May 31, Opus West
-- together with its non-debtor affiliates -- had $1,275,334,000
in assets against $1,462,328,000 in debts. In its bankruptcy
petition, Opus West said it had assets and debts both ranging from
$100 million to $500 million.
Opus West joins affiliates that previously filed for bankruptcy.
Opus East LLC, a real estate operator from Rockville, Maryland,
commenced a Chapter 7 liquidation on July 1 in Delaware. Opus
South Corp., a Florida condominium developer based in Atlanta,
filed a Chapter 11 petition April 22 in Delaware.
Bankruptcy Creditors' Service, Inc., publishes Opus West
Bankruptcy News. The newsletter tracks the separate Chapter 11
proceedings of Opus West Corp. and Opus South Corp. and their
related debtor-affiliates. (http://bankrupt.com/newsstand/
or 215/945-7000)
PACIFIC CAPITAL: DBRS Rates Issuer And Senior Debt Rating at 'B'
----------------------------------------------------------------
DBRS has commented on the Q3 2009 earnings of Pacific Capital
Bancorp (PCBC or the Company). DBRS rates PCBC's Issuer & Senior
Debt at B and all ratings are Under Review with Negative
Implications. DBRS notes that failure to raise significant
capital or to execute upon its strategic option(s) in Q4 2009
would likely lead to a multiple notch downgrade.
PCBC reported another sizeable net loss available to common
shareholders of $40.7 million compared to net losses of
$362.6 million in the second quarter and $47.5 million a year ago.
Elevated loan loss provisioning needs, margin compression, an
$8.9 million impairment related to Community Reinvestment Act
investments and higher credit related costs drove the quarterly
loss. Expense initiatives and improvements in some fee-based
revenues brought income before provision and taxes (IBPT) to
$1 million. While IBPT is finally positive again, it is hardly
sufficient to allow PCBC to earn its way through its substantial
asset quality issues.
Asset quality remains a significant challenge for the Company.
Non-performing assets (NPAs) continue to increase and net charge-
offs (NCOs) remain high. NPAs reached 7.16% of loans held for
investment, up from 6.17% last quarter. While loan sales did hurt
this metric, the absolute amount of NPAs increased as well driven
by the commercial real estate and residential real estate
portfolios. Meanwhile, NCOs declined to 2.50% of average loans
(annualized) from 5.40% in the second quarter. Construction
continues to account for the majority of NCOs. While the pace of
decline in updated appraisals has slowed, the appraisals are still
coming in lower, which could lead to additional future losses.
Additionally, delinquencies have yet to stabilize pointing to
continued asset quality problems.
During the quarter, the Company delivered solid deposit growth
enhancing overall liquidity. Indeed, core Bank (excludes RAL-
related deposits), increased almost $400 million, or 8.2%, during
the quarter. However, the deposit growth was invested in low
yielding, safe assets putting pressure on the net interest margin
(NIM). Specifically, NIM declined 6 basis points during the
quarter to 2.93%. With PCBC focused on maintaining strong
liquidity levels, NIM is likely to remain under pressure and limit
IBPT improvement. Despite over $200 million in loan sales, the
increase in liquidity ballooned the balance sheet by approximately
$600 million. The balance sheet growth combined with the net loss
hurt already weak capital metrics. DBRS notes that while the
Company is well-capitalized by the standard regulatory definition,
capital metrics are below the enhanced capital requirements
mandated by the OCC. Furthermore, tangible common equity to
tangible assets is below 3% and needs to be bolstered immediately.
The review, which was initiated on July 31, 2009, is focused on
what strategic plans management will undertake to position the
Company for improved financial fundamentals, the ability of PCBC
to operate its RAL/RT business at or near capacity, whether
balance sheet initiatives will achieve the desired regulatory
capital ratios mandated by the OCC and whether elevated credit
costs will continue to invade capital and pressure overall
results. With a weak tangible common equity ratio and more
potential losses coming, DBRS notes that significant downside risk
to the ratings remain if significant capital is not raised
shortly.
PATRICK INDUSTRIES: Board Approves 2009 Omnibus Incentive Plan
--------------------------------------------------------------
At a special meeting of shareholders of Patrick Industries, Inc.,
on November 19, 2009, the shareholders of the Company, upon the
recommendation of the Company's Board of Directors, approved the
Patrick Industries, Inc. 2009 Omnibus Incentive Plan. The Board
approved and adopted the 2009 Plan, subject to shareholder
approval, on August 13, 2009.
The purposes of the 2009 Plan are to attract and retain highly
competent persons as employees, directors, and consultants of the
Company and its affiliates. The 2009 Plan covers, among other
things, administration of the 2009 Plan, participant eligibility,
shares available under the 2009 Plan, the types of awards that may
be granted, and performance criteria.
The maximum number of shares available for delivery to Service
Providers pursuant to awards granted under the 2009 Plan is
750,000, subject to adjustment as described in the 2009 plan, plus
264,502 shares that were available for future awards under the
terms of the Patrick Industries, Inc. 1987 Stock Option Program,
as amended and restated as of October 19, 2009, less 255,000
shares issuable under the May 2009 stock option grant that were
subject to shareholder approval of the 2009 Plan, plus shares that
become available for future awards under the Predecessor Plan as a
result of the subsequent forfeiture, lapse or expiration of awards
granted pursuant to the Predecessor Plan. Since the 2009 Plan has
been approved by shareholders, no future grants will be made under
the Predecessor Plan.
These types of awards may be granted under the 2009 Plan -- which
may be in lieu of other amounts owed to a participant -- subject
to such terms as the Compensation Committee of the Board may
prescribe in an award agreement: stock options, stock appreciation
rights, restricted stock and restricted stock units, performance
awards, and other awards. The 2009 Plan will be administered by
the Compensation Committee of the Board and expire no later than
August 13, 2019, or earlier if all shares available for issuance
have been issued as fully vested shares.
A full-text copy of the 2009 Omnibus Incentive Plan is available
at no charge at http://ResearchArchives.com/t/s?4a21
At March 1, 2009, Patrick was in violation of the Consolidated
EBITDA financial covenant under the terms of its credit agreement.
On April 14, the Company entered into a Third Amendment to the
Company's Credit Agreement dated May 18, 2007, which, among other
things, provide that:
(a) The lenders waived any actual or potential Event of
Default resulting from the Company's failure to comply
with the one-month and two-month Consolidated EBITDA
covenants for the fiscal months ended March 1, 2009, and
March 29, 2009.
(b) The financial covenants were modified to establish new
one-month and two-month minimum Consolidated EBITDA
requirements that became effective beginning with the
fiscal months ended June 28, 2009, and July 26, 2009,
respectively. Until that date, there is no applicable
minimum Consolidated EBITDA requirement.
About Patrick Industries
Patrick Industries, Inc. -- http://www.patrickind.com/-- is a
major manufacturer of component products and distributor of
building products serving the manufactured housing, recreational
vehicle, kitchen cabinet, home and office furniture, fixture and
commercial furnishings, marine, and other industrial markets and
operates coast-to-coast through locations in 13 states. Patrick's
major manufactured products include decorative vinyl and paper
panels, wrapped moldings, cabinet doors and components, slotwall
and slotwall components, and countertops. The Company also
distributes drywall and drywall finishing products, interior
passage doors, flooring and roofing products, vinyl and cement
siding, ceramic tile, and other miscellaneous products.
PATRICK INDUSTRIES: Narrows Net Loss to $622,000 at Sept. 27 Qtr
----------------------------------------------------------------
Patrick Industries, Inc., said net loss was $622,000 or $0.07 per
diluted share for third quarter ended September 27, 2009, compared
to a net loss of $2.3 million or $0.26 per diluted share for the
quarter ended September 28, 2008. For the nine months, the net
loss was $5.4 million or $0.59 per diluted share in 2009 compared
to a net loss of $2.3 million or $0.31 per diluted share in 2008.
Net sales decreased $18.4 million or 23.9%, to $58.3 million in
third quarter 2009 from $76.7 million in the comparable prior year
period. For the nine months ended September 27, 2009, net sales
decreased $110.2 million or 40.9%, to $159.1 million from
$269.3 million in the prior year period. The decline in net sales
for both the quarter and year-to-date periods primarily reflects
the continuation of overall lower end market demand due to the
economic recession and its residual effects. In addition, reduced
recreational vehicle and manufactured housing retail inventory
levels in response to restricted credit conditions and increasing
credit costs, a decline in consumer discretionary spending, and
economic trends that continued to weaken in all three of the
primary markets the Company serves all had an impact on the
Company's revenues.
The MH and RV industries, which together comprise approximately
85% and 80% of the Company's third quarter and nine months 2009
net sales, respectively, experienced unit shipment declines in the
quarter of approximately 37% and 1.4%, respectively, and
approximately 42% and 43%, respectively, on a year-to-date basis.
Approximately 60% of the Company's industrial revenue base is
linked to the residential housing market which continued to be
impacted by depressed conditions as new housing starts for the
first nine months of 2009 were down approximately 43% from the
comparable period in 2008 (as reported by the U.S. Department of
Commerce). While the RV market appears to be stabilizing with
projected improvement beginning in late 2009 and into 2010, the
Company expects continued weakness in all three major markets it
serves when compared to prior periods.
At September 27, 2009, the Company had $86.5 million in total
assets against $71.1 million in total liabilities, resulting in
$15.3 million in stockholders' equity.
Fiscal Year 2009 Outlook
Although both RV and MH unit shipments increased in the third
quarter of 2009 compared to the first two quarters of 2009,
Patrick anticipates the normal seasonal sales decline in the
fourth quarter of 2009 and potential further closures/
consolidations of customers and suppliers during the remainder of
2009 and into 2010. While both Patrick's RV and MH content per
unit sales has improved, the Company anticipates that the residual
effects of the recession and low consumer confidence will continue
for the rest of 2009 and potentially into 2010 as consumers remain
cautious when deciding whether or not to purchase discretionary
items such as RVs. In addition, the Company anticipates a decline
in production levels in the MH industry in the fourth quarter of
2009 that will continue to be well below historical sales levels.
Sales to the industrial markets are also projected to decline for
the remainder of 2009 largely reflecting the lack of overall
growth in the residential construction sector.
Based on the sacrifices made by its team members, reductions in
fixed and variable overhead expense levels, available capacity,
and production and cost efficiencies that the Company has gained
in the last 24 months, the Company believes it is well-positioned
to increase revenues in all of the markets that it serves upon
improvement in the overall economic environment. The management
team remains focused on better aligning costs with revenues and
will continue to size the operating platform according to the
revenue base. Key focus areas for the remainder of 2009 include
earnings before interest, taxes, depreciation and amortization,
cash flow, liquidity maximization, and debt reduction. Additional
key focus areas include:
-- additional market share penetration;
-- sales into commercial/institutional markets to diversify
revenue base;
-- further improvement of operating efficiencies in all
manufacturing operations and corporate functions;
-- aggressive management of inventory quantities and pricing,
and the addition of select key commodity suppliers; and
-- ongoing development of existing product lines and the
addition of new product lines.
In conjunction with the Company's strategic plan, the Company said
it will continue to make targeted capital investments to support
new business and leverage its operating platform, and work to more
fully integrate sales efforts to broaden customer relationships
and meet customer demands. In the first nine months of 2009,
capital expenditures were approximately $200,000 based on its
capital needs and cash management priorities. The acquisition of
Adorn Holdings, Inc., in 2007 and the related consolidation plan
allowed the Company to take advantage of excess redundant
equipment and therefore reduced its need for significant capital
expenditures in the short-term. Additionally, the Company has
continued to perform necessary and regular preventative
maintenance on its equipment to ensure that it is working at an
optimal efficiency level. The capital plan for full year 2009
includes estimated expenditures of up to $0.5 million, and such
expenditures are limited to $2.25 million for any fiscal year per
the amended Credit Agreement.
Credit Agreement Amendment
At March 1, 2009 -- the Company's February fiscal month end --
Patrick was in violation of the Consolidated EBITDA financial
covenant under the terms of its credit agreement. On April 14,
2009, the Company entered into a Third Amendment to the Company's
Credit Agreement, pursuant to which, among other things, the
lenders waived any actual or potential Event of Default resulting
from its failure to comply with the Consolidated EBITDA covenants
for the fiscal months ended March 1, 2009 and March 29, 2009. In
addition, the Third Amendment amended or added certain
definitions, terms and reporting requirements including a
modification of the one-month and two-month Consolidated EBITDA
covenants to be more reflective of current economic conditions.
Borrowings under the revolving line of credit are subject to a
borrowing base, up to a borrowing limit. The maximum borrowing
limit amount was reduced from $33.0 million to $29.0 million in
accordance with the Company's cash flow forecast. The principal
amount outstanding under the term loan, the interest rates for
borrowings under the revolving line of credit and the term loan,
and the expiration date of the Credit Agreement remained unchanged
under the amended terms.
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?4a22
A full-text copy of the Company's earnings release is available at
no charge at http://ResearchArchives.com/t/s?4a23
About Patrick Industries
Patrick Industries, Inc. -- http://www.patrickind.com/-- is a
major manufacturer of component products and distributor of
building products serving the manufactured housing, recreational
vehicle, kitchen cabinet, home and office furniture, fixture and
commercial furnishings, marine, and other industrial markets and
operates coast-to-coast through locations in 13 states. Patrick's
major manufactured products include decorative vinyl and paper
panels, wrapped moldings, cabinet doors and components, slotwall
and slotwall components, and countertops. The Company also
distributes drywall and drywall finishing products, interior
passage doors, flooring and roofing products, vinyl and cement
siding, ceramic tile, and other miscellaneous products.
PENN TRAFFIC: To Shut Down Local Stores by February 2010
--------------------------------------------------------
9WSYR.com reports that Penn Traffic Company said in a letter to
leaders to several communities in Central and Western New York
that local stores would close by February unless financing or a
purchaser for the stores is found.
Stores affected by the closing have either P&C stores or P&C
facilities, source notes.
About Penn Traffic
The Penn Traffic Company -- http://www.penntraffic.com/-- owns
and operates supermarkets under the P&C, Quality and BiLo trade
names in Upstate New York, Pennsylvania, Vermont and New
Hampshire. Headquartered in Syracuse, N.Y., Penn Traffic's
conventional supermarkets offer value pricing, fresh and local
products, and full-service stores in convenient neighborhood
locations. The regional retailer's P&C Fresh supermarkets combine
all the features of conventional-format stores with gourmet,
premium and store-made fresh products, as well as ready-to-eat
foods, easy-to prepare meals and expanded natural and organic
product offerings. Retail supermarkets and consumers became Penn
Traffic's primary focus with the sale of its wholesale business
segment during fiscal 2009.
Penn Traffic has filed for Chapter 11 three times. Its first trip
to the bankruptcy court was in June 1999. Penn Traffic again
filed for chapter 11 protection on May 30, 2003 (Bankr. S.D.N.Y.
Case No. 03-22945). Under the plan that was declared effective
April 2005, the Debtor gave all the stock to unsecured creditors
while cutting the store count almost in half.
Penn Traffic filed for Chapter 11 on November 18, 2009 (Bankr. D.
Del. Case No. 09-14078). Attorneys at Morris, Nichols, Arsht &
Tunnell LLP, serve as counsel. Donlin Recano serves as claims and
notice agent.
PETTERS CO: Interlachen Lost $60 Million in Fraud
-------------------------------------------------
The Associated Press reports that Interlachen Capital Group
partner Gregg Colburn said that his company gave $60 million to
Petters Company, Inc., thinking that the Company was going to use
the money to purchase Sony and Panasonic TVs from a distributor.
Citing Mr. Colburn, The AP relates that Interlachen was led to
believe that the TVs were being unloaded by Circuit City.
According to The AP, Mr. Colburn claimed that Tom Petters and his
associates also led Interlachen to believe that Petters Company
would be reselling the TVs to the retailers Sam's Club, Costco,
and BJ's Wholesale Club. The AP states that the merchandise never
existed, and Interlachen lost its $60 million when Petters
collapsed in 2008.
Based in Minnetonka, Minnesota, Petters Group Worldwide LLC is
named for founder and chairman Tom Petters. The group is a
collection of some 20 companies, most of which make and market
consumer products. It also works with existing brands through
licensing agreements to further extend those brands into new
product lines and markets. Holdings include Fingerhut (consumer
products via its catalog and Web site), SoniqCast (maker of
portable, WiFi MP3 devices), leading instant film and camera
company Polaroid (purchased for $426 million in 2005), Sun Country
Airlines (acquired in 2006), and Enable Holdings (online
marketplace and auction for consumers and manufacturers' overstock
inventory). Petters formed the company in 1988.
Petters Company, Inc., is the financing and capital-raising unit
of Petters Group Worldwide, LLC. Petters Company, Inc., Petters
Group Worldwide, LLC, and eight other affiliates filed separate
petitions for Chapter 11 relief on October 11, 2008 (Bankr. D.
Minn. Lead Case No. 08-45257). James A. Lodoen, Esq., at
Lindquist & Vennum P.L.L.P., represents the Debtors as counsel.
In its petition, Petters Company, Inc., listed debts of between
$500 million and $1 billion, while its parent, Petters Group
Worldwide, LLC, listed debts of not more than $50,000.
As reported in the Troubled Company Reporter on October 7, 2008,
Petters Aviation, LLC, and affiliates MN Airlines, LLC, doing
business as Sun Country Airlines, Inc., and MN Airline Holdings,
Inc., filed separate petitions for Chapter 11 bankruptcy
protection with the U.S. Bankruptcy Court for the District of
Minnesota on October 6, 2008 (Case Nos. 08-45136, 08-35197 and 08-
35198). Petters Aviation, LLC is a wholly owned unit of Thomas
Petters Inc. and owner of MN Airline Holdings, Inc., Sun Country's
parent company.
PHILADELPHIA NEWSPAPERS: Has Plan Exclusivity Until Jan. 31
-----------------------------------------------------------
Chris Mondics at philly.com relates that the Hon. Stephen
Raslavich extended, until Jan. 31, 2010, the exclusive period to
file a reorganization plan of Philadelphia Newspapers LLC.
Meanwhile, according to Law360, Pennsylvania's revenue department
has challenged Philadelphia Newspapers LLC's proposed
reorganization plan, saying it is objectionable because it would
unfairly let the bankrupt newspaper company off the hook for
unpaid state taxes.
As reported by the TCR on Nov. 19, 2009, secured lenders to
Philadelphia Newspapers LLC went to the U.S. Court of Appeals for
the Third Circuit in Philadelphia and won a stay on November 17
pending their appeal of a ruling by the district court Denying
them the ability to bid for the newspapers using their secured
debt rather than cash.
the Third Circuit scheduled the appeal for Dec. 15 and stayed the
auction for the newspapers until then. Absent action by the
appeals court, the auction would have been held Nov. 25.
Philadelphia Newspapers LLC took an appeal to the District Court
from the Bankruptcy Court's ruling that gives secured lenders the
right to use the $300 million in debt they are owed as part of
their bid to acquire the Company.
The Company is contemplating to sell its business to a group of
local investors, including Bruce E. Toll, absent higher and better
bids for the assets. The investor group Philly Papers LLC is
offering $30 million cash plus a combination of payment of certain
expenses and assumption of liabilities that will yield gross
proceeds to the estates of $41 million.
The Debtor opposed a credit bid by lenders owed more than $400
million, saying that it would have a "chilling effect" on
competing bidders. A credit bid would easily top the offer by Mr.
Toll.
In an opinion entered November 10, 2009, District Judge Eduardo C.
Robreno reversed the October 8 ruling by the Bankruptcy Court. As
a result, Philadelphia Newspapers can hold an auction where the
secured lenders must bid cash and cannot submit a credit bid if
intends to participate in the auction.
The Chapter 11 Plan
Philadelphia Newspapers LLC is scheduled to present its Chapter 11
reorganization plan for confirmation at hearings scheduled to
begin December 4, 2009.
Philadelphia Newspapers has already obtained approval of the
disclosure statement explaining the Plan and are now soliciting
votes on the Plan.
The Plan is based upon a sale of all of the Debtors' business to
Bruce E. Toll-led Philly Papers LLC, subject to higher and better
offers. According to the disclosure statement explaining the
Plan, with the sale of the Debtors' business to Bruce Toll,
holders of secured claims, including $66 million, senior secured
claims, will recover 100 cents on the dollar. Holders of $350
million prepetition unsecured debt claims will recover less
than 1% of their claims. Holders of prepetition unsecured trade
claims will recover up to 6%. The Plan allocates $750,000
liquidating trust in favor of general unsecured trade creditors
and a 3% distribution of equity interests in Philly Papers to
holders of unsecured prepetition claims other than general trade
creditors.
A copy of the Debtors' Disclosure Statement is available for free
at http://bankrupt.com/misc/PhillyNews_DiscStatement.pdf
A copy of the Debtors' Insider Chapter 11 Plan is available for
free at http://bankrupt.com/misc/PhillyNews_Ch11Plan.pdf
About Philadelphia Newspapers
Philadelphia Newspapers -- http://www.philly.com/-- owns and
operates numerous print and online publications in the
Philadelphia market, including the Philadelphia Inquirer, the
Philadelphia Daily News, several community newspapers, the
region's number one local Web site, philly.com, and a number of
related online products. The Company's flagship publications are
the Inquirer, the third oldest newspaper in the country and the
winner of numerous Pulitzer Prizes and other journalistic
recognitions, and the Daily News.
Philadelphia Newspapers and its debtor-affiliates filed for
Chapter 11 bankruptcy protection on February 22, 2008 (Bankr. E.D.
Pa. Case No. 09-11204). Proskauer Rose LLP is the Debtors'
bankruptcy counsel, while Lawrence G. McMichael, Esq., at Dilworth
Paxson LLP is the local counsel. The Debtors' financial advisor
is Jefferies & Company Inc. The Garden City Group, Inc., serves
as claims and notice agent. Philadelphia Newspapers listed assets
and debts of $100 million to $500 million in its bankruptcy
petition.
PINNACLE FOODS: S&P Puts 'B-' Rating on CreditWatch Positive
------------------------------------------------------------
Standard & Poor's Ratings Services said that it placed its rating
on Pinnacle Foods Group LLC, including its 'B-' corporate credit
rating, on CreditWatch with positive implications. S&P estimates
that pro forma balance sheet debt for the Birds Eye acquisition
will likely total about $3 billion.
"We placed the ratings on CreditWatch positive when Pinnacle Foods
announced an agreement to acquire Birds Eye Foods Inc. in a
transaction valued at $1.3 billion," said Standard & Poor's credit
analyst Christopher Johnson. "We believe that the acquisition
will likely be leverage neutral." S&P estimates that pro forma
debt to EBITDA, excluding any EBITDA synergies, would be about
7.8x compared with a ratio of about 7.7x for the 12 months ended
Sept. 30, 2009, and that potential synergies from the combination
could result in reduced leverage following the close of the
transaction. Moreover, S&P believes the combination of Birds Eye
Foods, a company with good brand recognition in the frozen foods
segment of the packaged foods industry, with Pinnacle's leading
brands could result in a stronger business profile for the newly
merged company.
The CreditWatch placement means that S&P could affirm or raise the
ratings following the completion of S&P's review, which will focus
on the company's pro forma capital structure, synergy
opportunities, and integration risks of the announced acquisition.
Standard & Poor's will meet with management to further discuss
Pinnacle Foods' financial policies and operating trends (for the
combined entity) in order to resolve the CreditWatch listing.
PONIARD PHARMACEUTICALS: Posts $9.9 Million Net Loss in Q3 2009
---------------------------------------------------------------
Poniard Pharmaceuticals, Inc., reported a net loss of $9.9 million
for the quarter ended September 30, 2009, compared with a net loss
of $12.2 million for the quarter ended September 30, 2008. The
Company reported a net loss of $32.5 million for the nine months
ended September 30, 2009, compared with a net loss of
$34.6 million for the same period in 2008.
Total operating expenses for the quarter ended September 30, 2009,
were $9.2 million compared with $12.4 million for the quarter
ended September 30, 2008, and were $30.5 million for the nine
months ended September 30, 2009, compared with $35.8 million for
the same period in 2008. Total operating expenses for the nine
months ended September 30, 2009, include a charge of $1.1 million
for the restructuring and related asset impairment resulting from
the Company's implementation of a strategic restructuring plan to
discontinue its in-house preclinical research operations and
reduce its workforce by approximately 12% effective March 31,
2009.
Research and development expenses were $5.4 million for the
quarter ended September 30, 2009, compared with $9.0 million for
the quarter ended September 30, 2008. Research and development
expenses were $19.2 million for the nine months ended
September 30, 2009, compared with $24.5 million for the same
period in 2008.
General and administrative expenses were $3.8 million for the
quarter ended September 30, 2009, compared with $3.4 million for
the quarter ended September 30, 2008. General and administrative
expenses were $10.3 million for the nine months ended
September 30, 2009, compared with $11.3 million for the same
period in 2008.
Cash and investment securities as of September 30, 2009, were
$40.1 million, compared with $72.8 million at December 31, 2008.
The Company believes that its existing cash and investment
securities will provide adequate resources to fund the Company's
operations at least into the first quarter of 2010.
Balance Sheet
As of September 30, 2009, the Company's consolidated balance
sheets showed total assets of $49.6 million, total liabilities of
$29.4 million, and total shareholders' equity of $20.2 million.
A full-text copy of the Company's consolidated financial
statements for the three and nine months ended September 30, 2009,
is available for free at http://researcharchives.com/t/s?4a08
Going Concern Doubt
The Company has historically experienced recurring operating
losses and negative cash flows from operations. As of
September 30, 2009, the Company had working capital of
$23.7 million, an accumulated deficit of $394.9 million and total
shareholders' equity of $20.2 million.
The Company's current loan facility contains covenants that
restrict certain financing activities by the Company and require
the Company to maintain a minimum amount of unrestricted cash.
Taking into account the minimum unrestricted cash requirement and
the Company's projected operating results, the Company believes
that its current cash, cash equivalents and investment securities
balances will provide adequate resources to fund operations at
least into the first quarter of 2010. However, given the
uncertainties of outcomes of the Company's clinical trials, there
is no assurance that the Company can achieve its projected
operating results. The Company has no assurance that, especially
in light of the current distressed economic environment, the
lenders will be willing to waive or renegotiate the terms of the
loan agreement to address or avoid financial or other defaults.
The Company believes that these factors, among others, raise
substantial doubt about its ability to continue as a going conce
About Poniard Pharmaceuticals
Based in South San Francisco, Calif., Poniard Pharmaceuticals,
Inc. (NASDAQ: PARD) - http://poniard.com/-- is a
biopharmaceutical company focused on the development and
commercialization of innovative oncology products to impact the
lives of people with cancer.
QUEST RESOURCE: Cherokee Loan Maturity Extended to Nov. 20
----------------------------------------------------------
Quest Resource Corporation reports that on November 16, 2009,
Quest Cherokee, LLC, Quest Energy Partners, L.P., and Quest
Cherokee Oilfield Service, LLC, entered into a Fifth Amendment to
Second Lien Senior Term Loan Agreement to extend the maturity date
of the Second Lien Senior Term Loan Agreement, as amended, from
November 16 to 20, 2009. The Fifth Amendment is among Quest
Cherokee, as borrower, the Partnership, QCOS and STP Newco, Inc.,
as guarantors, Royal Bank of Canada, as administrative agent and
collateral agent, KeyBank National Association, as syndication
agent, Societe Generale, as syndication agent, and the lenders
party thereto.
The Company has not provided any update on the Cherokee loan as of
press time.
A full-text copy of the Fifth Amendment to Second Lien Senior Term
Loan Agreement, dated as of November 16, 2009, by and among Quest
Cherokee, LLC, Quest Energy Partners, L.P., Quest Cherokee
Oilfield Service, LLC, STP Newco, Inc., Royal Bank of Canada,
KeyBank National Association, Societe Generale and the Lenders
party thereto, is available at no charge at:
http://ResearchArchives.com/t/s?4a24
About Quest Resource
Quest Resource Corporation -- http://www.qrcp.net/,
http://www.qelp.net/, and http://www.qmlp.net/-- is a fully
integrated E&P company that owns producing properties and acreage
in the Appalachian Basin of the northeastern United States; 100%
of the general partner and a 57% limited partner interest in Quest
Energy Partners, L.P.; and 85% of the general partner and a 36.4%
of the limited partner interests in the form of subordinated units
in Quest Midstream Partners, L.P. Quest Resource operates and
controls Quest Energy Partners and Quest Midstream Partners
through its ownership of their general partners.
At September 30, 2009, the Company had $459,572,000 in total
assets against total current liabilities of $69,894,000, long-term
derivative financial instrument liabilities of $5,294,000, asset
retirement obligations of $6,346,000 and notes payable of
$302,535,000. At September 30, 2009, the Company had accumulated
deficit of $383,423,000, total stockholders' deficit before non-
controlling interests of $84,263,000, non-controlling interests of
$159,766,000 and total equity of $75,503,000.
Recombination
Given the liquidity challenges facing the Company, Quest Midstream
and Quest Energy, each entity has undertaken a strategic review of
its assets and has evaluated and continues to evaluate
transactions to dispose of assets to raise additional funds for
operations or to repay indebtedness. On July 2, 2009, QRCP, Quest
Midstream, Quest Energy and other parties thereto entered into an
Agreement and Plan of Merger pursuant to which, following a series
of mergers and an entity conversion, QRCP, Quest Energy and the
successor to Quest Midstream will become wholly-owned subsidiaries
of PostRock Energy Corporation, a new, publicly traded
corporation. On October 2, 2009, the Merger Agreement was amended
to, among other things, reflect certain technical changes as the
result of an internal restructuring.
Going Concern
As reported by the Troubled Company Reporter on June 23, 2009, the
report of UHY LLP, in Houston, Texas, the Company's independent
registered public accounting firm, on its financial statements for
the fiscal year ended December 31, 2008, includes an explanatory
paragraph regarding the Company's ability to continue as a going
concern. The factors contributing to this concern include QRCP's
recurring losses from operations, stockholders' accumulated
deficit, and inability to generate sufficient cash flow to meet
its obligations and sustain its operations.
QUEST RESOURCE: Stephen Taylor Discloses 4.2% Equity Stake
----------------------------------------------------------
Stephen S. Taylor has direct beneficial ownership of 583,879
shares of Quest Resource Corporation held in an individual
retirement account for his benefit. Taylor International Fund,
Ltd. has direct beneficial ownership of 772,191 shares.
Mr. Taylor is the President of Taylor Asset Management Inc., which
is the Investment Manager of TIF. Accordingly, Mr. Taylor may be
deemed to own beneficially a total of 1,356,070 Quest Resource
shares constituting 4.2% of the shares of Quest Resource's Common
Stock outstanding as of November 2, 2009. Mr. Taylor has the sole
power to vote and to dispose or direct the disposition of
1,356,070 shares.
Mr. Taylor and TAM have sold Quest Resource shares in various
transactions on the open market since October 19, 2009.
About Quest Resource
Quest Resource Corporation -- http://www.qrcp.net/,
http://www.qelp.net/, and http://www.qmlp.net/-- is a fully
integrated E&P company that owns producing properties and acreage
in the Appalachian Basin of the northeastern United States; 100%
of the general partner and a 57% limited partner interest in Quest
Energy Partners, L.P.; and 85% of the general partner and a 36.4%
of the limited partner interests in the form of subordinated units
in Quest Midstream Partners, L.P. Quest Resource operates and
controls Quest Energy Partners and Quest Midstream Partners
through its ownership of their general partners.
At September 30, 2009, the Company had $459,572,000 in total
assets against total current liabilities of $69,894,000, long-term
derivative financial instrument liabilities of $5,294,000, asset
retirement obligations of $6,346,000 and notes payable of
$302,535,000. At September 30, 2009, the Company had accumulated
deficit of $383,423,000, total stockholders' deficit before non-
controlling interests of $84,263,000, non-controlling interests of
$159,766,000 and total equity of $75,503,000.
Recombination
Given the liquidity challenges facing the Company, Quest Midstream
and Quest Energy, each entity has undertaken a strategic review of
its assets and has evaluated and continues to evaluate
transactions to dispose of assets to raise additional funds for
operations or to repay indebtedness. On July 2, 2009, QRCP, Quest
Midstream, Quest Energy and other parties thereto entered into an
Agreement and Plan of Merger pursuant to which, following a series
of mergers and an entity conversion, QRCP, Quest Energy and the
successor to Quest Midstream will become wholly-owned subsidiaries
of PostRock Energy Corporation, a new, publicly traded
corporation. On October 2, 2009, the Merger Agreement was amended
to, among other things, reflect certain technical changes as the
result of an internal restructuring.
Going Concern
As reported by the Troubled Company Reporter on June 23, 2009, the
report of UHY LLP, in Houston, Texas, the Company's independent
registered public accounting firm, on its financial statements for
the fiscal year ended December 31, 2008, includes an explanatory
paragraph regarding the Company's ability to continue as a going
concern. The factors contributing to this concern include QRCP's
recurring losses from operations, stockholders' accumulated
deficit, and inability to generate sufficient cash flow to meet
its obligations and sustain its operations.
RASER TECHNOLOGIES: Posts $3.5 Million Net Loss in Q3 2009
----------------------------------------------------------
Raser Technologies, Inc., and subsidiaries reported a net loss of
$3.5 million for the three months ended September 30, 2009,
compared with a net loss of $7.6 million in the same period in
2008.
During the three months ended September 30, 2009, the Company
recognized revenue totaling $845,265 as compared to $30,000 during
the same period in 2008. During the second quarter of 2009, the
Company began selling electricity generated by its Thermo No. 1
geothermal power plant to the City of Anaheim. During the third
quarter, the Company generated and sold approximately 9,819 MW
hours of electricity.
Balance Sheet
At September 30, 2009, the Company's consolidated balance sheets
showed $158.2 million in total assets, $125.8 million in total
liabilities, $27.9 million in non-controlling interest in Thermo
No. 1 subsidiary, and $4.5 million in total shareholders' equity.
The Company's consolidated balance sheets at September 30, 2009,
also showed strained liquidity with $10.0 million in total current
assets available to pay $28.9 million in total current
liabilities.
A full-text copy of the Company's Form 10-Q is available for free
at http://researcharchives.com/t/s?4a2c
Going Concern Doubt
As of September 30, 2009, the Company had approximately
$3.8 million in cash and cash equivalents on hand and restricted
cash and marketable securities of approximately $16.8 million and
accounts payable and accrued liabilities of $15.5 million. Cash
used in operations totaled approximately $24.7 million for the
nine months ended September 30, 2009, and the Company's
accumulated deficit totaled $103.7 million. The Company has
incurred substantial losses since inception, and is not operating
at cash breakeven.
The Company's continuation as a going concern is dependent on
efforts to secure additional funding, increase revenues, reduce
expenses, and ultimately achieve profitable operations, any of
which may be challenging given the current economic environment.
If substantial losses continue, or if the Company is unable to
secure sufficient additional funding on reasonable terms,
liquidity concerns may require the Company to curtail or cease
operations, liquidate or sell assets or pursue other actions that
could adversely affect future operations.
The Company's independent registered public accounting firm's
report on the Company's financial statements as of December 31,
2008, expressed doubt about the Company's ability to continue as a
going concern due to significant losses, the use of significant
cash in operations, and the lack of sufficient capital to support
its business plan through the end of 2009.
About Raser Technologies
Based in Provo, Utah, Raser Technologies (NYSE: RZ) --
http://www.rasertech.com/-- is an environmental energy technology
company focused on geothermal power development and technology
licensing. The Company operates two business segments: Power
Systems and Transportation & Industrial. The Power Systems
segment develops clean, renewable geothermal electric power plants
and anticipates also developing bottom-cycling operations in the
future. The Transportation & Industrial segment focuses on using
its Symetron(TM) family of technologies to improve the efficiency
of electric motors, generators and power electronic drives used in
electric and hybrid electric vehicle propulsion systems.
READER'S DIGEST: Moving Headquarters to Manhattan
-------------------------------------------------
Reader's Digest Association is seeking approval from the
Bankruptcy Court to move its executive offices to Manhattan.
According to Bloomberg's Bill Rochelle, to take advantage of
declining commercial rents and rid itself of excess office space,
Reader's Digest will move out of its headquarters in Chappaqua,
New York, and existing Manhattan offices at 260 Madison Avenue and
16 East 34th Street. In their places, leases were negotiated for
a building in White Plains, New York, where the effective net rent
will be $26.31 a square foot. The new Manhattan headquarters, at
750 Third Avenue, has a net effective rent of $32.34 a square
foot. Reader's Digest says it will save $4.5 million a year, with
the present value of the savings working out to $17.1 million.
The capital costs of building out the new space will be
$8.9 million, the company said in a court filing. Reader's Digest
said it attempted to negotiate a new lease with the existing
landlord in Chappaqua. The landlord said it couldn't secure
lenders' approval to revise the existing lease.
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: Disclosure Hearing Continues Today
---------------------------------------------------
The Bankruptcy Court will reconvene today to consider approval of
the disclosure statement explaining the Chapter 11 plan proposed
by publisher Reader's Digest Association.
The Disclosure Statement hearing was previously set to start
November 5. The Disclosure Statement hearing was later adjourned
to November 20, 2009. Objections to the Disclosure Statement were
due November 16.
The Debtors, the Official Committee of Unsecured Creditors, and
The Readers' Digest Retiree Group have entered into an agreed
order establishing a discovery protocol and schedule in connection
with the Plan and Disclosure Statement and agreed, in good faith,
to adjourn the Disclosure Statement hearing and related objection
deadline.
Reader's Digest received several objections to the disclosure
statement. The pension fund of the Debtor's U.K. arm says the
Plan fails to consider the Company's underfunded pension plans.
The U.S. Trustee, an arm of the Justice Department, said there is
insufficient justification for releases in the Plan in favor of
third parties.
The confirmation hearing for approval of the plan is scheduled to
begin January 13. Absent any modifications, the Plan would reduce
funded debt by 75% to $555 million while providing a 53% to 63%
percent recovery to first-lien lenders owed $1.65 billion by
giving them a new $300 million second-lien loan and all the new
stock. Holders of unsecured trade claims will receive full
recovery. Other general unsecured creditors are to receive a 2.5%
to 2.7% recovery from a $3 million cash reserved for their $115
million in claims.
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)
ROTHSTEIN ROSENFELDT: Investor Sues on Trust Theory
---------------------------------------------------
According to Bill Rochelle at Bloomberg News, Todd D. Snyder filed
a complaint in bankruptcy court reciting how he gave Rothstein
Rosenfeldt Adler PA's co-founder Scott Rothstein $2.2 million on
October 23. He says the money still resides in a trust account at
TD Bank NA, which he also sued. Mr. Snyder contends the money is
held in trust and isn't property of the bankrupt firm. He says he
wire-transferred the money to a firm trust account for a "future,
and yet to be finalized, transaction."
Rothstein Rosenfeldt's co-founder Scott Rothstein has been
suspected of running a multimillion-dollar Ponzi scheme. U.S.
authorities claimed in a civil forfeiture lawsuit filed Nov. 9
that Mr. Rothstein, the firm's former chief executive officer,
sold investments in non-existent legal settlements. Mr. Rothstein
hasn't been charged criminally by U.S. authorities, who continue
to investigate the case.
Creditors of Rothstein Rosenfeldt Adler PA signed a petition to
send the Florida law firm to bankruptcy (Bankr. S.D. Fla. Case No.
09-34791). The petitioners include Bonnie Barnett, who says she
lost $500,000 in legal settlement investments; Aran Development,
Inc., which said it lost $345,000 in investments; and trade
creditor Universal Legal, identified as a recruitment firm, which
said it is owed $7,800. The creditors say they are owed money
invested in lawsuit settlements.
Herbert M. Stettin, the state-court appointed receiver for
Rothstein Rosenfeldt, was officially carried over as the Chapter
11 trustee in the involuntary bankruptcy case.
ROTHSTEIN ROSENFELDT: Faces Lawsuit for Fraud Lodged by Investors
-----------------------------------------------------------------
The Palm Beach Post News reports that Scott Rothstein of Rothstein
Rosenfeldt Adler and four people inside the firm, and TD Bank and
three of its executives are facing a lawsuit lodged by investors -
- Linda and Doug Von Allmen and his stepson, Dean Kretschmar --
citing that they have duped them and helped the firm manipulate
bank statements.
A bank spokesperson denies the lawsuit's claims, source says. The
lawsuit names three bank executives Frank Spinosa, senior vice
president; Jennifer Kerstetter, assistant manager; and Roseanne
Caretsky, assistant vice president and branch manager. In the
suit, all three met with investors, verified account statements
and provided "lock letters' securing funds, source notes.
Rothstein Rosenfeldt Adler -- http://www.rra-law.com/-- is a law
firm.
Creditors of Florida law firm Rothstein Rosenfeldt Adler PA signed
a petition to send the law firm to bankruptcy (Bankr. S.D. Fla.
Case No. 09-34791). The petitioners include Bonnie Barnett, who
says she lost $500,000 in legal settlement investments; Aran
Development, Inc., which said it lost $345,000 in investments; and
trade creditor Universal Legal, identified as a recruitment firm,
which said it is owed $7,800. The creditors say they are owed
money invested in lawsuit settlements.
ROTHSTEIN ROSENFELDT: To Pay Health Insurance and Small Payroll
---------------------------------------------------------------
According to SunSentinel.com, a federal judge allowed Rothstein
Rosenfeldt Adler, which is being run by a trustee, to pay for
employee's health insurance and the small payroll of the remaining
14 employees.
Rothstein Rosenfeldt's co-founder Scott Rothstein has been
suspected of running a multimillion-dollar Ponzi scheme. U.S.
authorities claimed in a civil forfeiture lawsuit filed Nov. 9
that Mr. Rothstein, the firm's former chief executive officer,
sold investments in non-existent legal settlements. Mr. Rothstein
hasn't been charged criminally by U.S. authorities, who continue
to investigate the case.
Creditors of Rothstein Rosenfeldt Adler PA signed a petition to
send the Florida law firm to bankruptcy (Bankr. S.D. Fla. Case No.
09-34791). The petitioners include Bonnie Barnett, who says she
lost $500,000 in legal settlement investments; Aran Development,
Inc., which said it lost $345,000 in investments; and trade
creditor Universal Legal, identified as a recruitment firm, which
said it is owed $7,800. The creditors say they are owed money
invested in lawsuit settlements.
Herbert M. Stettin, the state-court appointed receiver for
Rothstein Rosenfeldt, was officially carried over as the Chapter
11 trustee in the involuntary bankruptcy case.
SALLY BEAUTY: Says Fiscal 2009 Net Earnings Grew 19.2% to $95.9MM
-----------------------------------------------------------------
Sally Beauty Holdings, Inc., said for the fiscal 2009 fourth
quarter, consolidated net sales were $676.2 million, an increase
of 0.6% from the fiscal 2008 fourth quarter, and include a
negative impact from foreign currency exchange of $13.1 million,
or 2.0% of sales. This sales increase is attributed to
consolidated same stores sales growth of 2.4% and the addition of
new stores.
Consolidated net sales for fiscal year 2009 were $2.6 billion, a
decrease of 0.4% from fiscal year 2008, and include a negative
impact from foreign currency exchange of $86.0 million, or 3.2% of
sales. Consolidated same stores sales growth of 1.8% and the
addition of new stores partially offset the negative impact to
sales from unfavorable foreign currency exchange.
For the fiscal 2009 fourth quarter, adjusted net earnings (a non-
GAAP measure) increased by 22.8% to $24.8 million, or $0.14
earnings per diluted share, after adjusting for $2.2 million in
after-tax non-cash interest income from marked-to-market changes
in the fair value of the Company's interest rate swaps. For the
fiscal 2008 fourth quarter, adjusted net earnings were
$20.2 million, or $0.11 per diluted share, after adjusting for
$1.3 million, or approximately $0.01 per diluted share, in non-
cash interest income from marked-to-market changes in the fair
value of the interest rate swaps.
On a GAAP basis, net earnings for the fiscal 2009 fourth quarter
grew 25.6% to $27.0 million, or $0.15 per diluted share, compared
to $21.5 million, or $0.12 per diluted share, for the fiscal 2008
fourth quarter.
For fiscal year 2009, adjusted net earnings grew 19.2% to
$95.9 million, or $0.52 per diluted earnings per share, after
adjusting for $3.2 million in after-tax non-cash interest income
from marked-to-market changes in the fair value of the Company's
interest rate swaps. For the 2008 fiscal year, adjusted net
earnings were $80.5 million, or $0.44 per share, and exclude a
$2.9 million after-tax non-cash interest charge related to the
interest rate swaps.
On a GAAP basis, net earnings for fiscal 2009 grew 27.8% to
$99.1 million, or $0.54 per share, compared to $77.6 million, or
$0.42 per share, for fiscal 2008.
Adjusted EBITDA for the fiscal 2009 fourth quarter was
$90.1 million, an increase of 5.3% from $85.6 million for the
fiscal 2008 fourth quarter. Fiscal year 2009 Adjusted EBITDA was
$352.5 million, an increase of 3.2% from $341.7 million in fiscal
2008. This increase is primarily due to year-over-year growth in
segment operating earnings and reductions in corporate overhead.
At September 30, 2009, the Company had $1.49 billion in total
assets against $2.13 billion in total liabilities. Total member's
deficit was $642.13 million at September 30, 2009.
Cash and cash equivalents as of September 30, 2009, were
$54.4 million. The Company's asset-based loan revolving credit
facility began and ended the 2009 fourth quarter with a zero
balance. Borrowing capacity on the ABL facility was approximately
$325.6 million at the end of the fiscal 2009 fourth quarter. The
Company paid down $20.0 million of its senior term loans during
the fiscal 2009 fourth quarter. The Company's debt, excluding
capital leases, totaled $1.7 billion as of September 30, 2009.
For the full year ended September 30, 2009, the Company's capital
expenditures totaled $37.3 million. Capital Expenditures for
fiscal year 2010 are projected to be in the range of $45 million
to $50 million, excluding acquisitions.
Inventories decreased $38.5 million from September 30, 2008.
Inventories as of September 30, 2009, were $559.7 million,
including $13 million of inventories from the acquisition of
Schoeneman Beauty Supply, Inc., on September 30, 2009.
Year-end store count includes 43 stores from the acquisition on
September 30, 2009, of Schoeneman Beauty Supply, Inc.; 16 stores
from the acquisition of InterSalon located in Chile; 3 stores
acquired in Belgium and France; 3 stores acquired in Puerto Rico.
"Sally Beauty Holdings delivered very good fourth quarter and full
year results despite a difficult recessionary environment," stated
Gary Winterhalter, President and Chief Executive Officer. "For
the fiscal year consolidated same store sales finished up 1.8%
with gross margin expansion of 60 basis points and GAAP net
earnings growth of 28%. We executed on all of our strategic
objectives, including 3.7% growth in our store base achieved
through organic store openings, acquisitions and the strengthening
of our balance sheet through a $73 million reduction in long-term
debt. We believe we are well positioned as we head into fiscal
2010 and remain confident we will continue to execute against our
strategy and deliver another year of solid performance."
A full-text copy of the Company's Annual Report on Form 10-K is
available at no charge at http://ResearchArchives.com/t/s?4a0c
A full-text copy of the Company's earnings release is available at
no charge at http://ResearchArchives.com/t/s?4a0d
About Sally Beauty Holdings
Based in Denton, Texas, Sally Beauty Holdings, Inc. (NYSE: SBH) --
http://www.sallybeauty.com/-- is an international specialty
retailer and distributor of professional beauty supplies with
revenues of more than $2.6 billion annually. Through the Sally
Beauty Supply and Beauty Systems Group businesses, the Company
sells and distributes through over 3,900 stores, including
approximately 200 franchised units, throughout the United States,
the United Kingdom, Belgium, Chile, France, Canada, Puerto Rico,
Mexico, Ireland, Spain and Germany. Sally Beauty Supply stores
offer more than 6,000 products for hair, skin, and nails through
professional lines such as Clairol, L'Oreal, Wella and Conair, as
well as an extensive selection of proprietary merchandise. Beauty
Systems Group stores, branded as CosmoProf or Armstrong McCall
stores, along with its outside sales consultants, sell up to 9,800
professionally branded products including Paul Mitchell, Wella,
Sebastian, Goldwell, and TIGI which are targeted exclusively for
professional and salon use and resale to their customers.
SIMMONS BEDDING: Taps Weil Gotshal as Bankruptcy Counsel
--------------------------------------------------------
Simmons Bedding Company, et al., have sought the permission of the
U.S. Bankruptcy Court for the District of Delaware to employ Weil,
Gotshall & Manges LLP as bankruptcy counsel, nunc pro tunc to the
Petition Date.
The Firm will, among other things:
(a) take necessary and appropriate actions to protect and
preserve the Debtors' estates, including the prosecution
of actions on the Debtors' behalf, the defense of any
actions commenced against the Debtors in their Chapter 11
cases, the negotiation of disputes in which the Debtors
are involved, and the preparation of objections to claims
filed against the Debtors' estates;
(b) prepare, on behalf of the Debtors, necessary or
appropriate motions, applications, answers, orders,
reports, and other papers in connection with the
administration of the Debtors' Chapter 11 cases; and
(c) take necessary and appropriate actions in connection with
a Chapter 11 plan or plans and related disclosure
statement(s) and related documents, as well as furhter
actions as may be required in connection with the
administration of the Debtors' Chapter 11 cases.
Lydia T. Protopapas, a member of Weil Gotshal, says that the Firm
will be paid based on the hourly rates of its professionals,
ranging between $155 (for paralegals) and $950, depending upon the
level of seniority and expertise of the particular attorney or
paralegal involved. The precise amount will be determined upon
the final recording of all time and expense charges.
Ms. Protopapas assures that the Court that the Firm doesn't have
interests adverse to the interest of the Debtors' estates or of
any class of creditors and equity security holders. Ms.
Protopapas maintains that the Firm is a "disinterested person" as
the term is defined under Section 101(14) of the Bankruptcy Code.
Atlanta, Georgia-based Simmons Bedding Company -- aka Simmons
Company a Corporation of Delaware; Simmons Company, N.A.; Simmons;
Simmons Company (U.S.A.); Simmons Co.; Simmons Company, a Delaware
Corporation; Simmons Bedding; Simmons USA Company; THL Bedding
Company; Simmons U.S.A. Company; Simmons U.S.A. Corporation;
Simmons Bedding Company -- is a holding company with no operating
assets. Through its wholly-owned subsidiary, Bedding Holdco
Incorporated, which is also a holding company, Simmons Company
owns the common stock of Simmons Bedding Company. All of Simmons
Company's business operations are conducted by Simmons Bedding
Company and its direct and indirect subsidiaries. Simmons
Company, together with its subsidiaries, is one of the largest
bedding manufacturers in North America.
The Company filed for Chapter 11 bankruptcy protection on
November 16, 2009 (Bankr. D. Delaware Case No. 09-14037). The
Company's affiliates also filed separate Chapter 11 petitions.
Simmons Bedding listed $895,970,000 in assets and $1,263,522,000
in liabilities as of June 27, 2009.
SIMMONS BEDDING: Wants Richards Layton as Co-Counsel
----------------------------------------------------
Simmons Bedding Company, et al., have asked for permission from
the U.S. Bankruptcy Court for the District of Delaware to employ
Richards, Layton & Finger, P.A., as co-counsel, nunc pro tunc to
the Petition Date.
The Firm will, among other things:
(a) prepare petitions, motions, applications, orders,
reports, and papers necessary or desirable to commence
the Debtors' Chapter 11 cases;
(b) take action to protect and preserve the Debtors' estates,
including the prosecution of actions on behalf of the
Debtors, the defense of actions commenced against the
Debtors in their Chapter 11 cases, the negotiation of
disputes in which the Debtors are involved and the
preparation of objections to claims filed against the
Debtors;
(c) to prepare on behalf of the Debtors motions,
applications, answers, orders, reports and papers in
connection with the administration of the Debtors'
estates; and
(d) prepare the Debtors' plan of reorganization, disclosure
statement, and any related documents and pleadings
necessary to solicit votes on the Debtors' plan of
reorganization.
Mark D. Collins, an attorney and director at Richards Layton, says
that the Firm will be paid based on the hourly rates of its
professionals:
Mark D. Collins $675
Michael J. Merchant $525
Jason M. Madron $345
Travis A. McRoberts $230
Aja E. McDowell $195
Mr. Collins assures the Court that the Firm doesn't have interests
adverse to the interest of the Debtors' estates or of any class of
creditors and equity security holders. Mr. Collins maintains that
the Firm is a "disinterested person" as the term is defined under
Section 101(14) of the Bankruptcy Code.
The Firm has discussed with Weil, Gotshal & Manges LLP -- the
Debtors' proposed bankruptcy counsel -- a division of
responsibilities regarding the Debtors' representation in their
Chapter 11 cases and both firms will make every effort to avoid
and/or minimize duplication of services.
Atlanta, Georgia-based Simmons Bedding Company -- aka Simmons
Company a Corporation of Delaware; Simmons Company, N.A.; Simmons;
Simmons Company (U.S.A.); Simmons Co.; Simmons Company, a Delaware
Corporation; Simmons Bedding; Simmons USA Company; THL Bedding
Company; Simmons U.S.A. Company; Simmons U.S.A. Corporation;
Simmons Bedding Company -- is a holding company with no operating
assets. Through its wholly-owned subsidiary, Bedding Holdco
Incorporated, which is also a holding company, Simmons Company
owns the common stock of Simmons Bedding Company. All of Simmons
Company's business operations are conducted by Simmons Bedding
Company and its direct and indirect subsidiaries. Simmons
Company, together with its subsidiaries, is one of the largest
bedding manufacturers in North America.
The Company filed for Chapter 11 bankruptcy protection on
November 16, 2009 (Bankr. D. Delaware Case No. 09-14037). The
Company's affiliates also filed separate Chapter 11 petitions.
Simmons Bedding listed $895,970,000 in assets and $1,263,522,000
in liabilities as of June 27, 2009.
SIMMONS BEDDING: Wants to Extend Schedules Filing Until Feb. 14
---------------------------------------------------------------
Simmons Bedding Company, et al., have asked the U.S. Bankruptcy
Court for the District of Delaware to extend the filing of
schedules of assets and liabilities, schedules of executory
contracts and unexpired leases and statements of financial affairs
until February 14, 2009.
The Debtors are asking for additional 60 days beyond the 30-day
extension provided for pursuant to Local Rule 1007-1(b).
The Debtor has over 11,000 potential creditors. The Debtors say
that to prepare the schedules, they would have to compile
voluminous information from books, records, and documents relating
to the creditors' claims, as well as the Debtors' many assets and
contracts, which would require a significant expenditure of time
and effort on the part of the Debtors and their employees in the
near term.
Atlanta, Georgia-based Simmons Bedding Company -- aka Simmons
Company a Corporation of Delaware; Simmons Company, N.A.; Simmons;
Simmons Company (U.S.A.); Simmons Co.; Simmons Company, a Delaware
Corporation; Simmons Bedding; Simmons USA Company; THL Bedding
Company; Simmons U.S.A. Company; Simmons U.S.A. Corporation;
Simmons Bedding Company -- is a holding company with no operating
assets. Through its wholly-owned subsidiary, Bedding Holdco
Incorporated, which is also a holding company, Simmons Company
owns the common stock of Simmons Bedding Company. All of Simmons
Company's business operations are conducted by Simmons Bedding
Company and its direct and indirect subsidiaries. Simmons
Company, together with its subsidiaries, is one of the largest
bedding manufacturers in North America.
The Company filed for Chapter 11 bankruptcy protection on
November 16, 2009 (Bankr. D. Delaware Case No. 09-14037). The
Company's affiliates also filed separate Chapter 11 petitions.
Simmons Bedding listed $895,970,000 in assets and $1,263,522,000
in liabilities as of June 27, 2009.
SMURFIT-STONE: Appoints Exner as SVP of Containerboard Mill
-----------------------------------------------------------
Smurfit-Stone Container Corporation has appointed Michael
Exner as senior vice president and general manager of the
company's Containerboard Mill division, effective January 1,
2010.
Mr. Exner reports to Steve Klinger, Smurfit-Stone's president and
chief operating officer.
Mr. Exner's distinguished career in the paper industry spans 31
years and includes a variety of leadership positions with
International Paper and Boise-Cascade Corporation.
Most recently, he served as International Paper's vice president
of manufacturing for Containerboard. During his 29-year tenure
with IP, Exner also served as pulp and operations manager; mill
manager for the company's Vicksburg, MS, and Lock Haven, PA,
facilities; and director of manufacturing for IP's commercial
printing and imaging papers division.
He received his bachelor's degree in chemistry from Lawrence
University in Appleton, WI, and his master's degree from The
Institute of Paper Chemistry in Appleton.
"Mike's leadership and proven ability to deliver results will help
to drive greater efficiencies and operational success in our Mill
division," said Klinger. "We're fortunate to welcome someone with
his level of expertise and talent to our organization."
Smurfit-Stone Container Corporation is one of the industry's
leading integrated containerboard and corrugated packaging
producers, and one of the world's largest paper recyclers. The
company is a member of the Sustainable Forestry Initiative(R) and
the Chicago Climate Exchange. Smurfit-Stone generated revenue of
$7.04 billion in 2008; has led the industry in safety every year
since 2001; and conducts its business in compliance with the
environmental, health, and safety principles of the American
Forest & Paper Association.
About Smurfit-Stone
Smurfit-Stone Container Corp. -- http://www.smurfit-stone.com/--
is one of the leading integrated manufacturers of paperboard and
paper-based packaging in North America and one of the world's
largest paper recyclers. The Company operates 162 manufacturing
facilities that are primarily located in the United States and
Canada. The Company also owns roughly one million acres of
timberland in Canada and operates wood harvesting facilities in
Canada and the United States. The Company employs roughly
21,250 employees, 17,400 of which are based in the United States.
For the quarterly period ended September 30, 2008, the Company
reported roughly $7.450 billion in total assets and
$5.582 billion in total liabilities on a consolidated basis.
Smurfit-Stone and its U.S. and Canadian subsidiaries filed for
Chapter 11 protection on January 26, 2009 (Bankr. D. Del. Lead
Case No. 09-10235). Certain of the company's affiliates,
including Smurfit-Stone Container Canada Inc., a wholly owned
subsidiary of SSCE, and certain of its affiliates, filed to
reorganize under the Companies' Creditors Arrangement Act in the
Ontario Superior Court of Justice in Canada.
Smurfit-Stone joined pulp- and paper-related bankruptcies as
rising Internet use hurts magazines and newspapers. Corporacion
Durango SAB, Mexico's largest papermaker, sought U.S. bankruptcy
in October. Quebecor World Inc., a magazine printer and Pope &
Talbot Inc., a pulp-mill operator, also sought cross-border
bankruptcies for their operations in the U.S. and Canada.
James F. Conlan, Esq., Matthew A. Clemente, Esq., Dennis M.
Twomey, Esq., and Bojan Guzina, Esq., at Sidley Austin LLP, in
Chicago, Illinois; and Robert S. Brady, Esq., and Edmon L. Morton,
Esq., at Young Conaway Stargatt & Taylor in Wilmington, Delaware,
serve as the Debtors' bankruptcy counsel. PricewaterhouseCooper
LLC, serves as the Debtors' financial and investment consultants.
Lazard Freres & Co. LLC acts as the Debtors' investment bankers.
Epiq Bankruptcy Solutions LLC acts as the Debtors' notice and
claims agent.
Bankruptcy Creditors' Service, Inc., publishes Smurfit-Stone
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
and ancillary foreign proceedings undertaken by Smurfit-Stone
Container Corp. and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
ST MARY'S HOSPITAL: Reaches Tentative Deal With Unionized Workers
-----------------------------------------------------------------
Bob Groves, staff writer at NorthJersey.com, reports that
unionized employees at St. Mary's Hospital in Passaic entered into
a tentative deal that extends pay cuts and other concessions until
the hospital starts to recover financially.
Hospital employees, Mr. Groves says, ratified a three-year
contract, which sets to expire on Feb. 28, 2010. As part of the
deal, the hospital will restore, among other things, 2% of the
workers' wages when its plan is approved, he adds.
Mr. Groves notes that the hospital has filed a reorganization plan
this month t the U.S. Bankruptcy Court in Newark and has until
Jan. 6, 2009, for creditors to vote for its plan.
A hearing is set for Dec. 18, 2009, to consider the hospital
disclosure statement explaining its plan, Mr. Grove says.
About St. Mary's Hospital, Passaic, N.J.
St. Mary's Hospital, Passaic, N.J., filed for Chapter 11
protection on March 9, 2009 (Bankr. D. N.J. Case No. 09-15619).
Joseph Lubertazzi, Jr., Esq., at McCarter & English assists the
hospital in its restructuring effort. St. Mary's listed assets of
$70.8 million and debts of $128 million.
STATION CASINOS: Has Interim Deal on Lease Dispute
--------------------------------------------------
Station Casinos Inc. has reached an interim three-month settlement
with FCP PropCo LLC in connection with leases for four hotel
casinos.
Station Casinos leases the casinos from debtor-affiliate Propco;
and the leased hotels are in turn operated by SCI and non-debtor
operating units. The issue of the master lease has been a point
of contention among major stakeholders. Lenders to the operating
companies contend the leases are in reality disguised financing
arrangements while lenders to PropCo contend they are bona fide
leases. The PropCo's mortgage lenders assert that the contractual
relationship between the parties was structured as a lessor/lessee
because SCI would be forced to decide either to pay the scheduled
rent or reject the lease in its entirety. Lenders to SCI said it
won't approve a cash collateral budget that provided for the
payment of rent under the master lease beginning in December 2009.
SCI said it had three alternatives: (1) proceeding with a non-
consensual cash collateral use, which would trigger to a contested
cash collateral fight, (2) reject the master lease, accompanied by
the surrender of the leased hotels; or (3) engage in discussions
with PropCo to try to reach an agreement.
The settlement calls for reducing monthly rent to PropCo to
$13.8 million from $21.4 million. The difference will be paid in
cash if the master lease is subsequently assumed or will become
prepetition damage claims if the lease ultimately is rejected.
If the leases are rejected, the operating companies will continue
operating the casinos for five months after rejection, to afford
PropCo time to find another licensed operator of the casinos. In
addition, in the event of a rejection of the master lease, PropCo
will hold an allowed, partially secured prepetition claim against
SCI for rejection damages in the amount of the deferred rent plus
the statutory lease rejection claim of $647,000,000.
The interim settlement is designed to afford the parties an
opportunity to work out a long-term settlement or limit adverse
effects if one side or the other wins outright in litigation.
The interim settlement is scheduled for hearing on Dec. 7.
About Station Casinos
Station Casinos, Inc., is a gaming and entertainment company that
currently owns and operates nine major hotel/casino properties
(one of which is 50% owned) and eight smaller casino properties
(three of which are 50% owned), in the Las Vegas metropolitan
area, as well as manages a casino for a Native American tribe.
Station Casinos Inc., together with its affiliates, filed for
Chapter 11 on July 28, 2009 (Bankr. D. Nev. Case No. 09-52477).
Station Casinos has hired Milbank, Tweed, Hadley & McCloy LLP as
legal counsel in the Chapter 11 case; Brownstein Hyatt Farber
Schreck, LLP, as regulatory counsel; and Lewis and Roca LLP as
local counsel. The Debtor is also hiring Lazard Freres & Co. LLC
as investment banker and financial advisor. Kurtzman Carson
Consultants LLC is the claims and noticing agent.
In its bankruptcy petition, Station Casinos said that it had
assets of $5,725,001,325 against debts of $6,482,637,653 as of
June 30, 2009. About 4,378,929,997 of its liabilities constitute
unsecured or subordinated debt securities.
Bankruptcy Creditors' Service, Inc., publishes Station Casinos
Bankruptcy News. The newsletter tracks the Chapter 11 proceedings
of Station Casinos Inc. and its debtor-affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
SYNTHEMED INC: Posts $1,037,000 Net Loss in Q3 2009
---------------------------------------------------
SyntheMed Inc. posted a net loss of $1,037,000 for the three
months ended September 30, 2009, compared with a net loss of
$1,074,000 for the same period in 2008.
For the nine months ended September 30, 2009, the Company posted a
net loss $3,526,000, compared with a net loss of $3,238,000 in the
same period in 2008.
The Company's balance sheets at September 30, 2009, showed total
assets of $3,331,000, total liabilities of $428,000, and total
stockholders' equity of $2,903,000.
A full-text copy of the Company's Form 10-Q is available for free
at http://researcharchives.com/t/s?4a17
Going Concern Doubt
On March 23, 2009, Eisner LLP, in New York, expressed substantial
doubt about SyntheMed Inc.'s ability to continue as a going
concern after auditing the company's financial statements for the
years ended Dec. 31, 2008, and 2007. The auditing firm pointed to
the company's recurring net losses, limited revenues and cash
outflows from operating activities.
About SyntheMed Inc.
Headquartered in Iselin, New Jersey, SyntheMed Inc. (OTC BB: SYMD)
-- http://www.synthemed.com/-- is a biomaterials company engaged
in the development and commercialization of innovative and cost-
effective medical devices for therapeutic applications. The
Company's products and product candidates, all of which are based
on the Company's proprietary, bioresorbable polymer technology,
are primarily surgical implants designed to prevent or reduce the
formation of adhesions (scar tissue) following a broad range of
surgical procedures. The Company's commercialization efforts are
currently focused on its lead product, REPEL-CV(R) Bioresorbable
Adhesion Barrier, for use in cardiac surgery. REPEL-CV is a
bioresorbable film designed to be placed over the surface of the
heart at the conclusion of surgery to reduce the formation of
post-operative adhesions.
TARRAGON CORP: Aims to Emerge From Bankruptcy in January
--------------------------------------------------------
Andrew Tangel, staff writer at NewJersey.com relates that Tarragon
Corp. has reached an agreement with The Kushner Cos. of Florham
Park, wherein its subsidiary Westminster Residential Acquisition
LLC will provide $4.5 million in debtor-in-possession financing.
Kushner's unit will provide $11.75 million in debt financing and
$250,000 equity financing, when the company emerges from
bankruptcy in exchange, for a majority stake in the company, Mr.
Tangel notes.
Based in New York City, Tarragon Corporation (NasdaqGS:TARR) --
http://www.tarragoncorp.com/-- is a leading developer of
multifamily housing for rent and for sale. Tarragon's operations
are concentrated in the Northeast, Florida, Texas, and Tennessee.
Tarragon and its affiliates filed for Chapter 11 protection on
January 12, 2009 (Bankr. D. N.J. Case No. 09-10555). The Hon.
Donald H. Steckroth presides over the case.
Michael D. Sirota, Esq., Warren A. Usatine, Esq., and Felice R.
Yudkin, Esq., at Cole Schotz Meisel Forman & Leonard, P.A.
THERMOENERGY CORP: Completes 2nd Phase of Recapitalization Plan
---------------------------------------------------------------
ThermoEnergy Corporation completed the second phase of its
recapitalization. The second phase of the plan raised from its
investors $1.4 million in cash and retired $5.9 million of
outstanding debt and interest in exchange for 3.0 million shares
of Series B Convertible Preferred Stock and 5.6 million common
stock purchase warrants. The Series B Convertible Preferred Stock
were issued at $2.40 per share and are convertible, at any time at
the discretion of the holder, into 10 shares of common stock. The
warrants have a term of five years and an exercise price of $0.50
per share. Both instruments include conventional weighted average
anti-dilution provisions. All parties to this second tranche of
our recapitalization provided the Company with complete and
general releases to all claims in the past and present, whether
known or unknown.
The third phase of the four-phased recapitalization plan would
raise another $1.8 million of new cash in exchange for Series B
Convertible Preferred Stock and common stock purchase warrants.
This phase of the plan will be completed in conjunction with the
signing of a contract for an Ammonia Recovery Project with the
City of New York. The Company expects the contract to be signed
in the very near future.
On October 15, 2009, David Gelbaum, David Anthony, and Joseph
Bartlett of The Quercus Trust joined the Company's Board of
Directors. Mr. Gelbaum and Mr. Anthony also joined the board of
the Babcock-Thermo Carbon Capture LLC.
ThermoEnergy, through its subsidiary, ThermoEnergy Power Systems,
LLC, recently formed a Limited Liability Company with Babcock
Power, Inc. called Babcock-Thermo Carbon Capture, LLC, to finalize
the development and commercialization of the Company's zero air
emission, carbon capture fossil fuel power plant design. The
joint venture is currently designing a 600 Mw reference plant
which will be used to design, build and operate a 40 Mw
demonstration plant at a host utility site.
Mr. Ted Klowan, Jr., CPA, joined the Company as Executive Vice
President, Chief Financial Officer, and Treasurer this month. Mr.
Arthur S. Reynolds, who served as interim CFO since August 2009
will remain a member of the Company's Board of Directors.
Dennis C. Cossey, the Chairman and Chief Executive Officer of
ThermoEnergy said, "We are grateful for the confidence and
continuing support of our major shareholders, which has led to the
completion of the second phase of our recapitalization plan. We
are also pleased to announce the addition of Mr. Gelbaum, Mr.
Anthony, and Mr. Bartlett to our Board and the Board of the BTCC
along with the addition of Mr. Klowan as our Chief Financial
Officer. We expect these changes in management of the Company
will strengthen the Company's ability to achieve it's objectives
and drive the Company to profitability."
About ThermoEnergy
Founded in 1988, ThermoEnergy Corporation (OTC Pink Sheets: TMEN)
-- http://www.thermoenergy.com/, http://www.castion.com/-- in
Little Rock, Arkansas, is a diversified technologies company
engaged in the worldwide commercialization of patented or
proprietary municipal and industrial wastewater treatment and
power generation technologies. The wastewater treatment
technologies are consolidated in a wholly-owned subsidiary,
CASTion Corporation, a developer and manufacturer of wastewater
treatment and recovery systems for industrial and municipal
clients, with large-scale systems operating in the U.S., Mexico,
Canada and Japan. The Company has additional offices in
Jacksonville, Florida and New York.
Kemp & Company, a Professional Association, in Little Rock,
Arkansas, expressed substantial doubt about ThermoEnergy
Corporation's ability to continue as a going concern after
auditing the Company's consolidated financial statements for the
year ended December 31, 2008.
The auditing firm reported that the Company has incurred net
losses since inception and will require substantial capital to
continue commercialization of the Company's technologies and to
fund the Company's liabilities, which included $2,022,000 of
unpaid payroll taxes, $3,478,000 of convertible debt in default
(net of debt discounts of $313,000) and $3,334,000 of contingent
liability reserves at December 31, 2008.
At December 31, 2008, the Company's consolidated balance sheet
showed $1,035,000 in total assets and $10,457,000 in total
liabilities, resulting in a $9,422,000 stockholders' deficit.
TOYS "R" US: Property Subsidiary Completes Refinancing
------------------------------------------------------
Toys "R" Us, Inc., on Friday completed the offering of
$725 million aggregate principal amount of senior secured 8.50%
notes due 2017 by Toys "R" Us Property Company II, LLC, formerly
known as Giraffe Properties, LLC, one of its indirect wholly owned
subsidiaries.
The Notes were issued pursuant to an indenture, dated as of
November 20, 2009, among the Company (solely with respect to
certain covenants), Toys Propco, The Bank of New York Mellon, as
trustee, and The Bank of New York Mellon, as collateral agent.
The Notes were issued at a price equal to 98.573% of their face
amount at maturity. The maturity date of the Notes is December 1,
2017. Interest on the Notes will be payable at a rate of 8.50%
per year, semiannually on June 1 and December 1, commencing on
June 1, 2010. The Notes are Toys Propco II's senior secured
obligations.
Toys Propco II used the gross proceeds of approximately
$715 million from the offering of the Notes, together with cash on
hand, to repay its loan and security agreement and related
mezzanine loans, which were terminated in connection with the
repayment, to purchase certain properties and to pay fees and
expenses incurred in connection with the offering. The Notes are
solely the obligation of Toys Propco II and are not guaranteed by
Toys "R" Us, Inc., or Toys "R" Us - Delaware, Inc. In addition,
in connection with the offering and the related transactions, MPO
Properties, LLC, an indirect wholly owned subsidiary of Toys "R"
Us, Inc., and its direct and indirect parent entities repaid their
senior secured real estate loan and security agreement and related
mezzanine loans in the aggregate amount of $200 million. The
Notes will be secured by first priority security interests in all
of the existing and future real estate properties of Toys Propco
II and its interest in the master lease.
The Notes may be redeemed, in whole or in part, at any time prior
to December 1, 2013, at a price equal to 100% of the aggregate
principal amount of the Notes plus a "make-whole" premium. On or
after December 1, 2013, the Notes may be redeemed at the prices
set forth if redeemed during the 12-month period beginning on
December 1 of the years set forth, plus accrued and unpaid
interest:
Year Price
---- -----
2013 104.250%
2014 102.125%
2015 and thereafter 100.000%
Prior to December 1, 2013, Toys Propco II may also redeem during
each 12 month period commencing with December 1, 2009, up to 10%
of the aggregate principal amount of the Notes, at a redemption
price equal to 103% of the principal amount of the Notes, plus
accrued and unpaid interest to the date of redemption. In
addition, Toys Propco II may redeem up to 35% of the Notes at
108.500% before December 1, 2012, with the net cash proceeds from
certain equity offerings.
Following specific kinds of change of control, Toys Propco II will
be required to offer to purchase all of the Notes at a purchase
price of 101% of their principal amount, plus accrued and unpaid
interest, if any, to the date of purchase.
The Indenture, among other things, will limit the ability of Toys
Propco II and the Guarantors to:
-- incur indebtedness;
-- pay dividends or make other distributions;
-- make other restricted payments and investments; and
-- create liens.
The Indenture also limits the ability of the Company to cause or
permit Toys-Delaware to incur indebtedness or make restricted
payments. These covenants are subject to a number of important
qualifications and limitations.
The Indenture contains customary terms and covenants, including
certain events of default after which the Notes may be due and
payable immediately.
Pursuant to a registration rights agreement with the initial
purchasers of the Notes, Toys Propco II agreed to use its
reasonable best efforts to register with the Securities and
Exchange Commission, notes having substantially identical terms as
the Notes as an offer to exchange freely tradable exchange notes
for the Notes. Pursuant to the registration rights agreement,
Toys Propco II has agreed to file an exchange offer registration
statement, use its reasonable best efforts to cause the exchange
offer to be completed within 365 days after the issue date of the
Notes and under certain circumstances, file a shelf registration
statement with respect to the Notes. If Toys Propco II fails to
meet the 365-day target or certain other conditions set forth in
the registration rights agreement, the annual interest rate on the
Notes will increase by 0.25%. The annual interest rate on the
Notes will increase by an additional 0.25% for each subsequent 90-
day period, up to a maximum additional interest rate of 0.50%.
The Notes were offered only to qualified institutional buyers in
reliance on the exemption from registration set forth in Rule 144A
under the Securities Act of 1933, as amended, and outside the
United States to non-U.S. persons in reliance on the exemption
from registration set forth in Regulation S under the Securities
Act. The Notes have not been registered under the Securities Act,
or the securities laws of any state or other jurisdiction, and may
not be offered or sold in the United States without registration
or an applicable exemption from the Securities Act.
Toys Propco II owns fee and leasehold interests in 129 properties
in the United States which it leases on a long term basis to Toys-
Delaware, the operating entity for all of the Company's North
American businesses, pursuant to a Master Lease.
About Toys "R" Us
Toys "R" Us, headquartered in Wayne, New Jersey, is the largest
specialty retailer of toys, with annual revenues of around
$14 billion. It operates stores both in the U.S. and
internationally, as well as the Babies "R" Us format.
As of August 1, 2009, the company had $8.172 billion in total
assets; total current liabilities of $2.085 billion, long-term
debt of $5.496 billion, deferred tax liabilities of $55 million,
deferred rent liabilities of $269 million, and other non-current
liabilities of $372 million. As of August 1, 2009, the company
had Toys "R" Us, Inc. stockholders' deficit of $214 million and
noncontrolling interest of $109 million, and total stockholders'
deficit of $105 million.
The Company carries a 'B2' probability of default rating from
Moody's, "B" issuer credit ratings from Standard & Poor's, and
"B-" long term issuer default rating from Fitch.
TRONOX INC: Discloses Projected Balance Sheet at End of Year
------------------------------------------------------------
Tronox Incorporated discloses with the U.S. Securities and
Exchange Commission, on October 14, 2009, its projected balance
sheet as of December 31, 2009.
Projected Balance Sheet
As of December 31, 2009
ASSETS
Cash $97,300,000
Operating A/R - Net 181,600,000
Inventory 238,800,000
Prepaid and Other Assets 38,500,000
ST Environment A/R 5,700,000
Other Current Assets 1,600,000
------------
Total Current Assets $563,500,000
LT Environment A/R 55,600,000
Property Plant & Equipment - Net 292,600,000
Other Long-Term Assets 53,000,000
------------
Total Assets $965,000,000
============
LIABILITIES & EQUITY
Debtor-in-possession financing $54,200,000
Accounts payable 92,400,000
Accrued liabilities 88,300,000
Current Long Term Debt 212,600,000
Liab. Subject to Compromise 430,400,000
Other Current Liabilities 4,700,000
------------
Total Current Liabilities $882,600,000
Environmental Liabilities 143,300,400
Long Term Debt - Net 0
Other Long Term Liabilities 126,800,000
Total Equity (187,600,000)
------------
Total Liabilities & Equity $965,000,000
============
Tronox also disclosed that on October 16, 2009, it hosted a
meeting of the holders of the 9.5% Senior Unsecured Notes Due
December 2012, issued by Tronox Worldwide LLC and Tronox Finance
Corp. The meeting took place at the offices of Kirkland & Ellis
LLP, located at Fiftieth Floor, 601 Lexington Avenue, in New
York. Copies of the materials that were distributed to the
Holders and discussed at the meeting are available for free
at http://ResearchArchives.com/t/s?493e
According to Michael J. Foster, vice president, general counsel
and secretary of Tronox Incorporated, the projections were not
prepared to comply with the guidelines for prospective financial
statements published by the American Institute of Certified
Public Accountants and the rules and regulations of the SEC.
The Company cautions that no representations can be made as to
the accuracy of the historical financial information or the
projections or to the Company's ability to achieve the projected
results. Some assumptions may prove to be inaccurate. The
projections may not be relied upon as a guaranty or other
assurance of the actual results that will occur.
About Tronox Inc.
Headquartered in Oklahoma City, Tronox Incorporated (Pink Sheets:
TRXAQ, TRXBQ) is the world's fourth-largest producer and marketer
of titanium dioxide pigment, with an annual production capacity of
535,000 tonnes. Titanium dioxide pigment is an inorganic white
pigment used in paint, coatings, plastics, paper and many other
everyday products. The Company's four pigment plants, which are
located in the United States, Australia and the Netherlands,
supply high-performance products to approximately 1,100 customers
in 100 countries. In addition, Tronox produces electrolytic
products, including sodium chlorate, electrolytic manganese
dioxide, boron trichloride, elemental boron and lithium manganese
oxide.
Tronox has $1.6 billion in total assets, including $646.9 million
in current assets, as at September 30, 2008. The Company has
$881.6 million in current debts and $355.9 million in total
noncurrent debts.
Tronox Inc., aka New-Co Chemical, Inc., and 14 other affiliates
filed for Chapter 11 protection on January 13, 2009 (Bankr.
S.D.N.Y. Case No. 09-10156). The case is before Hon. Allan L.
Gropper. Richard M. Cieri, Esq., Jonathan S. Henes, Esq., and
Colin M. Adams, Esq., at Kirkland & Ellis LLP in New York,
represent the Debtors. The Debtors also tapped Togut, Segal &
Segal LLP as conflicts counsel; Rothschild Inc. as investment
bankers; Alvarez & Marsal North America LLC, as restructuring
consultants; and Kurtzman Carson Consultants serves as notice and
claims agent.
An official committee of unsecured creditors and an official
committee of equity security holders have been appointed in the
cases. The Creditors Committee has retained Paul, Weiss, Rifkind,
Wharton & Garrison LLP as counsel.
Until September 30, 2008, Tronox Inc. was publicly traded on the
New York Stock Exchange under the symbols TRX and TRX.B. Since
then, Tronox Inc. has traded on the Over the Counter Bulletin
Board under the symbols TROX.A.PK and TROX.B.PK. As of
December 31, 2008, Tronox Inc. had 19,107,367 outstanding shares
of class A common stock and 22,889,431 outstanding shares of class
B common stock.
Bankruptcy Creditors' Service, Inc., publishes Tronox Bankruptcy
News. The newsletter tracks the Chapter 11 proceeding undertaken
by Tronox Inc. and its 14 affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
TRUMP ENTERTAINMENT: Shareholders Raise Eye Brow on Trump's Deal
----------------------------------------------------------------
Daily Bankruptcy Review reports that former Trump Casino
shareholders question Donald Trump's chapter 11 deal. DBR says
shareholders who are still stinging from their treatment in the
last Trump casino bankruptcy say they're worried Mr. Trump has cut
a deal with bondholders designed to silence questions about his
influence on the Company.
The Troubled Company Reporter on Monday said Trump Entertainment
Resorts Holdings, L.P., received a letter on November 16, 2009,
from Mr. Trump terminating the Purchase Agreement dated August 3,
2009, among the partnership, Trump Entertainment Resorts, Inc.,
BNAC, Inc. and Mr. Trump, as amended by an amendment dated October
5, 2009.
Pursuant to the letter received by the partnership, Mr. Trump has
exercised his rights to terminate the Purchase Agreement on
various grounds including as a result of the appointment of an
examiner in the Company's Chapter 11 cases and as a result of the
confirmation hearing in the bankruptcy cases being scheduled for
after January 15, 2010, which is the deadline in the Purchase
Agreement for confirmation of the Company's plan of
reorganization.
The Company has also been advised that Mr. Trump and Ivanka Trump
have entered into an agreement with the holders of 61% of the
partnership's outstanding 8.5% Senior Secured Notes due 2015
pursuant to which, among other things, Mr. Trump and his daughter
Ivanka have agreed to support the Chapter 11 plan of
reorganization for the Company proposed by the noteholders and to
permit the Company to continue to use the Trump name in connection
with the Company's three casinos. Pursuant to such agreement, Mr.
Trump will receive 5% of the new common stock in the Company to be
issued under such noteholders' proposed Chapter 11 plan of
reorganization and warrants to purchase up to an additional 5% of
such common stock.
Neither Beal Bank, the Company's senior lender, nor the Company,
however, are parties to the settlement agreement among Mr. Trump
and such noteholders. Beal Bank, directly and through its
affiliates, and Mr. Trump had agreed to provide the necessary
funding for the Company's Chapter 11 plan. The Company said it is
considering its alternatives now that Mr. Trump has terminated the
Purchase Agreement.
Management of Trump Entertainment Resorts filed a plan built upon
a sale of the Company to secured lender Beal Bank and shareholder
Donald Trump. The ad hoc committee of noteholders filed a
competing plan because the management plan would wipe out their
claims. The disclosure statements to the competing plans have
been approved by Bankruptcy Judge Judith H. Wizmur, setting up
parties for a confirmation hearing where the judge will decide
which plan is superior on January 20.
About Trump Entertainment
Based in Atlantic City, New Jersey, Trump Entertainment Resorts
Inc. (NASDAQ: TRMP) -- http://www.trumpcasinos.com/-- owns and
operates three casino hotel properties in Atlantic City, New
Jersey, which include Trump Taj Mahal Casino Resort, Trump Plaza
Hotel and Casino, and Trump Marina Hotel Casino. The Company
conducts gaming activities and provides customers with casino
resort and entertainment.
Donald Trump is a shareholder of the Company and, as its non-
executive Chairman, is not involved in the daily operations of the
Company. The Company is separate and distinct from Mr. Trump's
privately held real estate and other holdings.
Trump Entertainment Resorts, TCI 2 Holdings, LLC, and other
affiliates filed for Chapter 11 on February 17, 2009 (Bankr. D.
N.J., Lead Case No. 09-13654). The Company has tapped Charles A.
Stanziale, Jr., Esq., at McCarter & English, LLP, as lead counsel,
and Weil Gotshal & Manges as co-counsel. Ernst & Young LLP is the
Company's auditor and accountant and Lazard Freres & Co. LLC is
the financial advisor. Garden City Group is the claims agent.
The Company disclosed assets of $2,055,555,000 and debts of
$1,737,726,000 as of December 31, 2008.
Trump Hotels & Casino Resorts, Inc., filed for Chapter 11
protection on Nov. 21, 2004 (Bankr. D. N.J. Case No. 04-46898
through 04-46925). Trump Hotels' obtained the Court's
confirmation of its Chapter 11 plan on April 5, 2005, and in May
2005, it exited from bankruptcy under the name Trump Entertainment
Resorts Inc.
TVI CORPORATION: Signature Proposes to Auction All Assets Nov. 30
-----------------------------------------------------------------
Signature Special Event Services, Inc., a debtor-affiliate of TVI
Corporation, asks the U.S. Bankruptcy Court for the District of
Maryland for permission to sell substantially all of its assets of
free and clear of liens, claims and encumbrances, pursuant to
Section 363 of the Bankruptcy Code.
S.R. Holdings, Inc., dba Emergency Disaster Services, the stalking
horse bidder, agreed to purchase Signature's assets for cash
consideration of $1,300,000.
The sale of the Assets will be subject to these terms:
a. At the hearing on this sale motion, scheduled for Nov. 30,
2009, at 11:00 a.m., the Court will hold an auction to
consider higher and better offers.
b. Other prospective purchasers may bid at the auction,
provided that any bidder making a competing bid must (i)
deposit $150,000 in immediately available funds with the
seller prior to the sale hearing, and (ii) agree at the
auction that it is submitting its competing bid with the
understanding that, if it is the successful bidder at the
auction, it will execute an agreement on substantially the
same terms as the APA, and will close in accordance with its
terms. Any competing bid must exceed the purchase price by
at least $65,000. Subsequent bids must be in increments of
at least $10,000.
c. At the conclusion of the auction, the Court will approve the
sale of the assets to the party which the Court determines
to have made the highest and best offer for the assets.
d. In the event that the prevailing bidder is not the stalking
horse bidder, the stalking horse bidder will be entitled to
a break-up fee equal to $39,000.
Both the Debtors and Branch Banking & Trust Company, the Debtors'
lender, seek to have an agreed portion of the proceeds of sale to
be paid to BB&T at closing, in partial satisfaction of the
Debtors' obligations to BB&T in an amount no less than $700,000.
At the sale hearing, the Debtors will announce how much of the
proceeds of sale are to be paid to BB&T.
About TVI Corporation
Headquartered in Glenn Dale, Maryland, TVI Corporation --
http://www.tvicorp.com/-- supplies military and civilian
emergency first responder and first receiver products, personal
protection products and quick-erect shelter systems. The products
include powered air-purifying respirators, respiratory filters and
quick-erect shelter systems used for decontamination, hospital
surge systems and command and control. The users of these
products include military and homeland defense/homeland security
customers.
The Company and two of its affiliates filed for Chapter 11
protection on April 1, 2009 (Bankr. D. Md. Lead Case No.
09-15677). Christopher William Mahoney, Esq., Jeffrey W. Spear,
Esq., and Joel M. Walker, Esq., at Duane Morris LLP, represent the
Debtors in their restructuring efforts. Alan M. Grochal, Esq.,
and Maria Ellena Chavez-Ruark, Esq., at Tydings and Rosenberg,
serve as counsel to the official committee of unsecured creditors.
When the Debtor filed for protection from its creditors, it listed
$10 million to $50 million in assets and $1 million to $10 million
in debts.
UNIVERSITY SHOPPES: Filed Chapter 11 to Halt Foreclosure
--------------------------------------------------------
University Shoppes LLC filed a Chapter 11 petition to halt
foreclosure of a mortgage. University Shoppes owns a shopping
center near Florida International University in Miami.
The petition contends the assets are worth $19.2 million while
debt, mostly secured, is $25.4 million.
University Shoppes filed for Chapter 11 on Nov. 19 (Bankr. S.D.
Fla. Case No. 09-35544). Paul DeCailly, Esq., represents the
Debtor in its restructuring effort.
VALENCE TECHNOLOGY: Posts $6.2 Million Net Loss in FY2010 Q2
------------------------------------------------------------
Valence Technology, Inc. reported a net loss of $6.2 million on
total revenues of $3.3 million for its fiscal 2010 second quarter
ended September 30, 2009, compared with a net loss of $6.2 million
on total revenue of $5.8 million in the same period in fiscal
2009.
The Company had a reduction in revenue to Segway Inc. of
$1.7 million in the three months ended September 30, 2009.
At September 30, 2009, the Company's consolidated balance sheets
showed $23.0 million in total assets, $89.1 million in total
liabilities, and $8.6 million in redeemable convertible preferred
stock, resulting in a $74.7 million shareholders' deficit.
The Company's consolidated balance sheets at September 30, 2009,
also showed strained liquidity with $17.4 million in total current
assets available to pay $28.2 million in total current
liabilities.
A full-text copy of the Company's Form 10-Q is available for free
at http://researcharchives.com/t/s?4a12
Going Concern Doubt
The Company has incurred operating losses each year since its
inception in 1989 and had an accumulated deficit of $570.1 million
as of September 30, 2009. For the three and six month periods
ended September 30, 2009, the Company sustained net losses
available to common stockholders of $6.2 and $12.4 million,
respectively. For the three and six month periods ended
September 30, 2008, the Company sustained net losses available to
common stockholders of $6.2 and $11.8 million, respectively. The
Company believes these factors, among others, raise substantial
doubt about its ability to continue as a going concern.
About Valence Technology
Based in Austin, Texas, Valence Technology, Inc. (NASDAQ: VLNC) --
http://www.valence.com/-- develops, manufactures and sells high-
energy
power systems utilizing its proprietary phosphate=based lithium-
ion technology for diverse applications, with special emphasis on
portable appliances and future generations of hybird and electric
vehicles.
VERSACOLD INTERNATIONAL: S&P Affirms 'B' Corporate Credit Rating
----------------------------------------------------------------
Standard & Poor's Ratings Services said it affirmed its 'B' long-
term corporate credit rating on Versacold International Corp., and
affirmed its 'BB-' issue-level rating on the company's senior
secured first-lien debt. The '1' recovery rating on the first-
lien debt is unchanged.
S&P also lowered the issue-level rating on Versacold's
C$179 million equivalent second-lien secured term loan to 'B' (the
same as the corporate credit rating on the company) from 'B+'.
This downgrade follows are S&P's revision to the recovery rating
on the debt to '4', indicating an average (30%-50%) recovery in a
default situation, from '2', which indicates substantial (70%-90%)
recovery. S&P bases the revision on its expectation of a lower
EBITDA insolvency proxy and enterprise value at default, which
largely reflects the reduced fixed charges the company needs to
cover because of the recent interest rate revision to its
mezzanine debt.
In addition, S&P removed all the ratings on Versacold from
CreditWatch with developing implications where they were placed
Nov. 6, 2008. The outlook on the company is stable.
"These rating actions follow The Yucaipa Companies LLC's completed
purchase of Hf. Eimskipafelag Islands' 49% equity interest in
Versacold with an option to acquire the remaining 51%," said
Standard & Poor's credit analyst Greg Pau. "We understand
Versacold's operating strategy and performance, as well as its
capital structure, are unlikely to materially change in the near
term because of the ownership change," Mr. Pau added.
The ratings on Vancouver-based Versacold reflect what Standard &
Poor's views as the company's fair business risk profile and
highly leveraged financial risk profile. The ratings are
constrained, in S&P's opinion, by the company's very high debt
level relative to its operating cash flow, resulting in this
highly leveraged financial risk profile. Under the current
financial structure, S&P believes that Versacold's credit standing
is unlikely to materially improve because its operating cash flow
will only allow moderate deleveraging in the medium term. The
financial risk profile is, in S&P's view, partially mitigated by
Versacold's market-leading position in the public refrigerated
warehousing (PRW) industry, which has demonstrated recession-
resilient demand and a steady operating margin.
On June 30, 2009, Yucaipa completed its purchase of a 49% equity
interest in Versacold from EI with an option to acquire the
remaining 51%. Yucaipa also owns Americold Realty Trust (not
rated), the largest PRW operator in the U.S. S&P understands that
Versacold and Americold would operate independently and that there
is no imminent plan to combine or consolidate the two companies'
operations. S&P also understands that Versacold would continue to
operate under the current capital structure. While the ratings on
Versacold reflect the company's stand-alone credit standing with
no expectation of any financial support from Yucaipa, S&P believes
a decision toward eventual business consolidation between
Versacold and Americold or a change in capital structure could
have a material effect on the rating.
The stable outlook reflects S&P's view that although Versacold's
operating cash flows should remain stable from its recession-
resilient PRW business, material debt reduction is unlikely
because cash flows would be required largely to cover interest
expenses and capital expenditures, leaving little excess for debt
repayment. S&P could consider raising the rating only if the
company materially improves its financial risk profile, possibly
by reducing debt using external sources such as an equity
injection. Conversely, the rating could come under pressure
because refinancing risk increases as debt maturities approach or
if there is material shortfall in operating cash flow, possibly
because of a weaker-than-expected operating margin.
VISTEON CORP: Looks to Donate Connersville Property to City
-----------------------------------------------------------
Visteon Corp. is seeking to sell a contaminated piece of land back
in Connersville, Indiana, to the City, looking for relief from the
financial obligations connected to the property.
Visteon will sell the shuttered plant to Connersville for $500, in
exchange for the city's agreement to rid the land of contamination
at a cost estimated at $4 million. The property has a plant and
water-treatment facilities on a 186-acre parcel
"Simply put, given the Debtors' environmental obligations, the
property's inherent marketability issues, and the fact that the
property is nonessential, the Debtors believe that the
consideration obtained from the City - namely, the City's
agreement to assume responsibility for the environmental
remediation of the Property - is fair and reasonable and in the
best interests of the Debtors' estates," Visteon said in a court
filing.
The Court will convene a hearing on December 10, 2009, to consider
approval of the sale.
According to Law360, 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.
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)
VITACLINA CORPORATION: Seeks Protection Under Chapter 11
--------------------------------------------------------
Sergio Chapa at ValleyCentral.com relates that Vitaclina
Corporation of America filed for Chapter 11 bankruptcy in the Rio
Grande Valley. Elizabeth Alvarado, Esq., represents the company,
Mr. Chapa notes.
Vitaclina Corporation of America distributes skin cream products
from Mexico.
VONAGE HOLDINGS: Chairman Citron Sells Portion of Stake
-------------------------------------------------------
Jeffrey Citron, Chairman of the Board of Directors of Vonage
Holdings Corp., on November 17, 2009, sold a small portion of his
shares of common stock of the Company and may sell a limited
number of additional shares. Afterward, Mr. Citron will continue
to beneficially own more than 58 million shares or 28% of Vonage
common stock, assuming conversion of convertible notes and options
he is deemed to beneficially own.
Mr. Citron issued a statement in connection with his sale: "My
decision to sell a limited amount of my holdings in Vonage
reflects the advice of my financial and estate planning advisors
to broaden my investment portfolio. I remain fully supportive of
Vonage management."
On November 6, 2009, Vonage reported a net loss of $54,555,000 for
the three months ended September 30, 2009, from a net loss of
$7,817,000 for the same period a year ago. Vonage posted a net
loss of $46,999,000 for the nine months ended September 30, 2009,
from a net loss of $23,660,000 for the same period a year ago.
At September 30, 2009, Vonage had $317,751,000 in total assets
against $419,681,000 in total liabilities, resulting in
stockholders' deficit of $101,930,000. At December 31, 2008, the
Company had stockholders' deficit of $90,742,000. The Company's
September 30 balance sheet showed strained liquidity: The Company
had $129,369,000 in total current assets against $152,009,000 in
total current liabilities.
About Vonage Holdings
Based in Holmdel, New Jersey, Vonage Holdings Corp. is a
technology company that leverages software to enable high-quality
voice and messaging services across multiple devices and locations
over broadband networks. Vonage's technology serviced roughly
2.45 million subscriber lines as of September 30, 2009. While
customers in the United States represented 94% of Vonage's
subscriber lines at September 30, 2009, the Company also serves
customers in Canada and in the United Kingdom.
WALDEN RESERVE: Amended Plan of Liquidation Wins Court Approval
---------------------------------------------------------------
The Hon. Dale L. Somers of the U.S. Bankruptcy Court for the
District of Kansas approved Walden Reserve, LLC's Disclosure
Statement and confirmed the Debtor's first amended Plan of
Liquidation dated Aug. 13, 2009.
The Debtor filed a summary of balloting indicating that 12 ballots
were filed. Class 1 and 2 did not vote. Class 3 rejected the
original Plan, but has unanimously accepted the first amended
Plan. Class 5 unanimously accepted the Plan, and the treatment is
the same in the first amended Plan. Classes 3 and 5 are impaired
by the first amended Plan. Class 4 rejected the Plan, and the
treatment is the same in the first amended Plan.
The Debtor agreed to these revisions to its first amended Plan
with regard to the treatment of these Creditors' Claim in Class 3
of the first amended Plan:
a. Eagles Nest will receive $739,000.
b. James Sharp will receive $46,200.
c. Jerry & Grisel Wiley will receive $46,200.
The Debtor will pay the Unsecured Creditors Committee $50,000 for
the payment of the attorney's fees of the Spencer Fane Britt
& Brown.
After the payment, the balance of the remaining funds will be paid
to Evans & Mullinix, P.A. for the Debtor's attorney's fees.
As reported in the Troubled Company Reporter on July 21, 2009,
under the Plan, allowed unsecured claims without priority and
allowed undersecured claims will receive nothing under the Plan.
Membership interests in the Debtor will receive nothing under the
Plan. Claims of the unsecured creditors were scheduled in the
amount of $1,749,140.
Classification of Claims and Interests
Class 1: Allowed Secured Claim of Farm Credit Services of Mid-
America, PCA.
Class 2: Secured Claim of Cumberland County Tennessee.
Class 3: Secured Claims of Eagles Nest, LLC, James and Amanda
Sharp and Grisel Wiley.
Class 4: Allowed Unsecured Prepetition Claims Without Priority
and Allowed Undersecured Claims.
Class 5: The Allowed Interests of the Debtor.
Classes 1 through 5 are all impaired by this Plan.
The Debtor scheduled nine secured creditors, with claims totaling
$5,279,073. Claims of the unsecured creditors were scheduled
in the approximate amount of $1,749,140.
A full-text copy of the first amended Disclosure Statement is
available for free at:
http://bankrupt.com/misc/WaldenReserve_DisclosureStatement.pdf
A full-text copy of the first amended Plan of Liquidation is
available for free at:
http://bankrupt.com/misc/WALDENRESERVE_PlanofLiquidation.pdf
Based in Overland Park, Kansas, Walden Reserve, LLC, fdba Renegade
Mountain Partners LLC, is a real estate developer in the State of
Tennessee. The Debtor filed for Chapter 11 protection on May 28,
2008 (D. Kan. Case No. 08-21230). Colin N. Gotham, Esq., at Evans
& Mullinix, P.A., represents the Debtor in its restructuring
efforts. Scott J. Goldstein, Esq., at Spencer, Fane, Britt &
Browne LLP, represents the Committee of Unsecured Creditors as
counsel. When the Debtor filed for protection from its creditors,
it listed total assets of $14,637,288 and total debts of
$7,085,320.
WHITNEY DESIGN INC: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------------
Debtor: Whitney Design, Inc.
5895 North Lindbergh Blvd.
Hazelwood, MO 63042
Bankruptcy Case No.: 09-51928
Chapter 11 Petition Date: November 21, 2009
Court: United States Bankruptcy Court
Eastern District of Missouri (St. Louis)
Judge: Charles E. Rendlen III
Debtor's Counsel: David A. Warfield, Esq.
Thompson Coburn LLP
One US Bank Plaza
St. Louis, MO 63101
Tel: (314) 552-6070
Fax: (314) 552-7000
Email: dwarfield@thompsoncoburn.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
A full-text copy of the Debtor's petition, including a list of its
20 largest unsecured creditors, is available for free at:
http://bankrupt.com/misc/moeb09-51928.pdf
The petition was signed by James L. Glenn, president of the
Company.
WILLIAM LANSDALE: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: William M. Lansdale
aka Bit Lansdale
350 Ocean Avenue
Seal Beach, CA 90740
Case No.: 09-22982
Chapter 11 Petition Date: November 22, 2009
Court: United States Bankruptcy Court
Central District of California (Santa Ana)
Judge:?Erithe A. Smith
Debtor's Counsel: Jeffrey N. Pomerantz, Esq.
10100 Santa Monica Blvd #1100
Los Angeles, CA 90067
Tel: (310) 277-6910
Fax: (310) 2010760
Email: jpomerantz@pszjlaw.com
Estimated Assets: $10,000,001 to $50,000,000
Estimated Debts: $1,000,001 to $10,000,000
The petition was signed by Mr. Lansdale.
Debtor's List of 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
VIBIR Contract Unknown
c/o Joanne E. Bozzuto,
Receiver
VI Department of Justice
GERS Complex, 2nd Floor
34-38 Kronprindses Gade
St. Thomas, VI 00802
Rufus Rhoades Contract $3,000,000
350 West Colorado Blvd
Suite 500
Pasadena, CA 91109
Mary Lou Narz Promissory Note $426,833
16222 Monterey Lane
Space 296
Huntington Beach, CA 92649
JP Morgan Chase & Co Lawsuit $600,000
c/o Dudley Clark &
Chan LLP
9720 Estate Thomas
(Havensight)
St. Thomas, V.I. 00802
Bradley Allen Scherer Oil or Gas Royalties $13,632
Tiger Cased Hole-Services Vendor $13,550
Inc.
Anterra Energy Services Vendor $12,598
Inc.
Margaret Galbraith Escrow Oil or Gas Royalties $11,560
Agent
Karl and Tina Rodi Family
Trust
John M. Phillips Oilfield Vendor $10,354
Equipment
Wayne Andrew Fenner Oil or Gas Royalties $6,870
Mullin
John Mullin Oil Royalties $6,870
TMG Transportation Vendor $5,315
H&H Casing Services Vendor $4,317
Margaret Scherer Oil or Gas Royalties $3,399
Margaret Galbraith Oil or Gas Royalties $2,217
Lucy Lyons Oil or Gas Royalties $554
Affordable Tank Rentals Vendor $480
John Guzman Crane Vendor $180
Service
Glenarvon Behymer Jr. Oil or Gas Royalties $111
Arvonne Degenfelder Oil or Gas Royalties $111
WILLIAMS COAL: Royalty Income Drops to $77,700 in 3rd Quarter
-------------------------------------------------------------
Williams Coal Seam Gas Royalty Trust reported distributable
expenses in excess of income of $104,196 for the three months
ended September 30, 2009, compared with distributable income of
$3,479,598 in the comparable period in 2008. This decrease in
income was the result of lower royalty income.
For the quarter ended September 30, 2009, royalty income received
by the Trust amounted to $77,767 as compared to $3,629,317
received for the same quarter in 2008. The decrease in royalty
income is primarily due to lower production and significantly
lower natural gas prices, impacting the net profits interest due
to the Trust. Production related to the royalty income received
by the Trust in the third quarter of 2009 was 153,226 MMBtu as
compared to 911,187 MMBtu for the same quarter in 2008.
General and administrative expenses for the three month period
ended September 30, 2009, increased by $26,228 compared to the
same period in 2008 due to increased professional fees.
If natural gas prices remain at current levels or decrease, the
Trust anticipates that royalty income may not exceed Trust
expenses in future quarters, in which case no distributions will
be made.
Statement of Assets, Liabilities and Trust Corpus
At September 30, 2009, the Trust's condensed statements of assets,
liabilities and trust corpus' showed total assets of $4,893,887,
total liabilities of $191,436, and trust corpus of $4,702,451.
The Trust reported current assets of $52,542 and current
liabilities of $191,436 at September 30, 2009, resulting in a
working capital deficit of $183,894.
A full-text copy of the Trust's Form 10-Q is available for free
at http://researcharchives.com/t/s?4a1d
Going Concern Doubt
On March 12, 2009, Ernst & Young LLP, in Tulsa, Oklahoma,
expressed substantial doubt about the Trust's ability to continue
as a going concern after auditing the Company's financial
statements for the years ended December 31, 2008, and 2007. The
auditing firm pointed to the 2009 commodity price outlook and the
resulting possible impact on the termination events pursuant to
the terms of the Trust Agreement.
The current outlook for 2009 commodity prices is significantly
lower than the prices realized during 2008, resulting in
uncertainty regarding the Trust's ability to avoid a termination
triggering event in accordance with the provisions of the Trust
Agreement when the test is next performed as of December 31, 2009.
Should the Trust's computed net present value fall below the
$30 million stipulated threshold as of December 31, 2009, the
Trust will terminate effective March 1, 2010.
About Williams Coal
Headquartered in Dallas, Texas, Williams Coal Seam Gas Royalty
Trust -- http://www.wtu-williamscoalseamgastrust.com/-- is a
grantor trust formed by The Williams Companies, Inc., parent
company of Williams Production Company, and was designed to
provide unitholders with quarterly cash distributions and tax
credits under Section 29 of the Internal Revenue Code, which has
expired as of December 31, 2009, from certain coal seam gas
properties. The units are listed on The New York Stock Exchange
under the symbol "WTU".
The Trust owns net profits interests in certain proved coal seam
gas properties owned by Williams Production Company and located in
the San Juan Basin of northwestern New Mexico and southwestern
Colorado, including WPC's 35% net profits interest in 5,348 gross
acres in La Plata County, Colorado.
X-RITE INC: One Equity Partners Discloses 40.44% Equity Stake
-------------------------------------------------------------
OEPX, LLC; One Equity Partners III, L.P.; OEP General Partner III,
L.P.; and OEP Holding Corporation disclose that they may be deemed
to beneficially own 33,401,024 shares of X-Rite Incorporated
common stock, representing roughly 40.44% of the outstanding
X-Rite Common Stock (based on 77,913,695 shares of X-Rite Common
Stock outstanding on November 1, 2009).
This number consists of (i) 33,146,266 shares of X-Rite Common
Stock issued to OEP, (ii) options to purchase 7,098 shares of
X-Rite Common Stock issued to each of two officers of OEP Holding
on October 28, 2008, (iii) options to purchase 81,566 shares of
X-Rite Common Stock issued to each of two officers of OEP Holding
on April 15, 2009, and (iv) 38,715 shares of restricted X-Rite
Common Stock issued to each of two officers of OEP Holding on
May 20, 2009.
The officers of OEP Holding, David M. Cohen and Colin M. Farmer,
are two of the three individuals designated by OEP to serve on the
Board. In connection with Mr. Cohen's and Mr. Farmer's service on
X-Rite's Board, each was granted (i) on October 28, 2008, options
to purchase 7,098 shares of X-Rite Common Stock, (ii) on April 15,
2009, options to purchase 81,566 shares of X-Rite Common Stock and
(iii) on May 20, 2009, 38,715 shares of X-Rite Common Stock, each
under X-Rite's 2008 Omnibus Long Term Incentive Plan. Each of Mr.
Cohen and Mr. Farmer holds these shares of restricted X-Rite
Common Stock and stock options for the benefit of OEP III.
In addition, in connection with Mr. Cohen's and Mr. Farmer's
service to the Board, each was granted on May 20, 2009, options to
purchase 87,109 shares of X-Rite Common Stock.
On October 28, 2009, 3,155 shares of restricted common stock
previously granted to each of two officers of OEP Holding were
transferred to OEPX for no consideration. On November 17, 2009
OEP elected to exercise the OEP Warrant for an exercise price of
$0.01 per share (representing an aggregate payment of $45,685.27)
and received 4,568,527 shares of X-Rite Common Stock. Pursuant to
the terms of the OEP Warrant, OEP received cash in lieu of
fractional shares.
On April 3, 2008, the Company said it was not in compliance with
certain covenants under its secured credit facilities. As a
result of the defaults, borrowings on the Company's revolving line
of credit were frozen and default interest was charged on the
first lien loan. On August 20, 2008, the Company entered into
forbearance and amendment agreements with the first and second
lien lender groups, that provided for forbearance on the defaults
through the closing of the Company's recapitalization at which
time the lenders agreed to amend the credit facilities to provide
new financial covenants and interest rates, with the amendments
effective on the date of closing of the Corporate Recapitalization
Plan. As of July 4, 2009, the Company was in compliance with the
financial covenants contained in its first and second lien credit
agreements, as amended.
About X-Rite
Grand Rapids, Michigan-based X-Rite, Incorporated (NASDAQ: XRIT)
-- http://www.xrite.com/-- is the global leader in color science
and technology. The Company, which now includes design industry
color leader Pantone LLC, develops, manufactures, markets and
supports innovative color solutions through measurement systems,
software, color standards and services. X-Rite's expertise in
inspiring, selecting, measuring, formulating, communicating and
matching color helps users get color right the first time and
every time, which translates to better quality and reduced costs.
X-Rite serves a range of industries, including printing,
packaging, photography, graphic design, video, automotive, paints,
plastics, textiles, dental and medical.
X-RITE INC: Reports $9 Million Net Loss for Oct. 3 Quarter
----------------------------------------------------------
X-Rite, Incorporated, reported net sales of $45.6 million for the
third quarter ended October 3, 2009, compared to $61.3 million for
the third quarter ended September 27, 2008. These results are in
the range of Company expectations given general market conditions
and reflect a decline of 25.6% versus prior year (24.8% after
adjusting for currency impact). While the year-over-year sales
difference narrowed in the third quarter, particularly in the
Standards segment, soft demand from large printing customers
continued to put pressure on sales results in the Measurement
segment. On a year-to-date basis, net sales were $141.6 million,
down 29.4% (27.0% after adjusting for the currency impact) for the
same period in 2008.
Supported by the Company's profit improvement actions and
narrowing sales difference from the prior year, the 2009 third
quarter net loss was $9.0 million versus a net loss of
$15.5 million in the third quarter of last year. 2009 operating
income was $1.6 million in the quarter, up from $300,000 in the
third quarter of 2008. Adjusted EBITDA in the third quarter was
$10.7 million and 23.3% of sales this year versus $14.0 million
and 22.8% of sales in the same period last year.
At October 3, 2009, the Company had $479.4 million in total assets
against $38.7 million in total current liabilities and
$230.9 million in total long-term liabilities, resulting in
$209.7 million in shareholders' investment. At October 3, 2009,
the Company had cash of $29.0 million, compared with $50.8 million
at January 3, 2009, a decrease of $21.8 million. At October 3,
2009, approximately $20.4 million in cash was held by subsidiaries
outside of the United States.
The Company also reported continuing progress in working capital
management supporting positive operating cash flows in the third
quarter of 2009. The combination of continuing positive cash
flows and the sale of the Viptronic's campus in Brixen contributed
to a debt pay down of $7.7 million in the quarter. Favorably
influenced by the mandatorily redeemable preferred stock and
warrant transaction, the Company reduced its first and second lien
debt by $41.7 million to $158.5 million, net of cash of
$29.0 million.
"The third quarter has been an extremely active period for the
Company, contributing many positives for the future of X-Rite,"
said Thomas J. Vacchiano Jr., X-Rite's Chief Executive Officer.
"Our debt to preferred stock exchange provides additional
operating cushion relative to covenants in our credit agreements,
our sales initiatives are narrowing the year-over-year revenue
difference, our positive operating cash flow has permitted us to
continue an aggressive debt pay down schedule, and our recently
released new products are being well received in the marketplace."
Rajesh K. Shah, X-Rite's Chief Financial Officer, commented, "I
recently joined X-Rite because I was attracted by their leading
market position and attractive business model. The Company has
managed well through these difficult economic conditions and
continues to do so. I believe X-Rite is well positioned for the
opportunities we see ahead of us."
X-Rite reported that its new myPANTONE software application has
been a top seller in its category since its launch in September,
selling more than 25,000 copies to date on Apple's App Store.
More recently, myPANTONE won the prestigious Editor's Choice Award
from MacLife for its innovation in the design and creative
category. Good news continued for X-Rite and its MatchRite iVue
color matching system at the Ace Hardware Fall Exhibition, where
bookings rebounded to pre-recession levels, achieving $700,000 to
date.
Mr. Vacchiano closed by saying, "Market indicators are not yet
clear enough or consistent enough to provide guidance. That said,
we do see signs of improving market conditions in certain
geographies and market segments. New sales and marketing
activities, particularly when combined with new products, appear
to be gaining more momentum than six to nine months ago."
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?4a25
A full-text copy of the Company's earnings release is available at
no charge at http://ResearchArchives.com/t/s?4a26
On April 3, 2008, the Company said it was not in compliance with
certain covenants under its secured credit facilities. As a
result of the defaults, borrowings on the Company's revolving line
of credit were frozen and default interest was charged on the
first lien loan. On August 20, 2008 the Company entered into
forbearance and amendment agreements with the first and second
lien lender groups, that provided for forbearance on the defaults
through the closing of the Company's recapitalization at which
time the lenders agreed to amend the credit facilities to provide
new financial covenants and interest rates, with the amendments
effective on the date of closing of the Corporate Recapitalization
Plan. As of July 4, 2009, the Company was in compliance with the
financial covenants contained in its first and second lien credit
agreements, as amended.
About X-Rite
Grand Rapids, Michigan-based X-Rite, Incorporated (NASDAQ: XRIT)
-- http://www.xrite.com/-- is the global leader in color science
and technology. The Company, which now includes design industry
color leader Pantone LLC, develops, manufactures, markets and
supports innovative color solutions through measurement systems,
software, color standards and services. X-Rite's expertise in
inspiring, selecting, measuring, formulating, communicating and
matching color helps users get color right the first time and
every time, which translates to better quality and reduced costs.
X-Rite serves a range of industries, including printing,
packaging, photography, graphic design, video, automotive, paints,
plastics, textiles, dental and medical.
YTB INTERNATIONAL: Reports Net Income of $362,000 in Q3 2009
------------------------------------------------------------
YTB International, Inc., has disclosed its financial results for
the third quarter ended September 30, 2009.
The Company reported net income of $362,000 for the quarter ended
September 30, 2009, compared to net income of $288,000 for the
same period of 2008.
Total revenue for the quarter ended September 30, 2009, decreased
62% to $15.9 million, compared to $42.2 million for the third
quarter of 2008. The Company says the decline in revenue was
primarily attributable to a decline in the number of new Internet
Business Centers sold during the quarter and a decrease in the
number of active IBC Site Owners.
The Company was able to significantly decrease general and
administrative expenses by $9.5 million in the third quarter of
2009 compared to the same period of 2008, primarily attributable
to the implementation of the Company's cost reduction program as
well as costs associated with the reduction of IBC sales and
active Site Owners.
Total revenue for the nine months ended September 30, 2009,
decreased 57% to $55.3 million, compared to $127.8 million for the
comparable period in 2008. The Company reported a net loss of
$3.1 million for the nine months ended September 30, 2009,
compared to a net loss of $3.4 million for the same period of
2008. The Company said its overall results for the nine months
ended September 30, 2009, were significantly impacted by the
recording of the sale and related exit costs of the Company's
formerly wholly-owned subsidiary, REZconnect Technologies, Inc.
For the nine months ended September 30, 2009, general and
administrative expenses were reduced by $15.0 million when
compared with the prior year's comparable period.
J. Scott Tomer, Chief Executive Officer of YTB Marketing, Inc.
commented, "Our team continues to focus on adding additional value
for our Site Owners by expanding on our high incentive products
and services."
Robert Van Patten, Chief Executive Officer of YTB, added, "Though
I have only recently been appointed to head YTB, I am pleased with
the changes that are taking place. To be clear, our revenue
shortfall is not acceptable. However, we were able to reduce our
net loss for the nine-month period and significantly increase our
net income for the third quarter. Our results show that our cost
cutting initiatives are beginning to take hold, as we have
significantly decreased our general and administrative expenses."
Van Patten continued, "The team that we have assembled is working
day and night to ensure that the value that we provide to our
current and future Site Owners is clearly communicated. The
changes that we have made reflect our desire to have highly
specialized team members, working within the areas of their
greatest strengths. We feel that we have accomplished this, and
now look forward to delivering on our obligation to increase
shareholder value, while maintaining our ability to deliver high-
quality service offerings."
At September 30, 2009, the Company's consolidated balance sheets
showed $31.3 million in total assets, $17.5 million in total
liabilities, and $13.8 million in total shareholders' equity.
Th Company's consolidated balance sheets at September 30, 2009,
showed current assets of $9.2 million and current liabilities of
$14.7 million, resulting in a working capital deficit of
$5.5 million.
A full-text copy of the Company's Form 10-Q is available for free
at http://researcharchives.com/t/s?4a0e
Going Concern Doubt
The Company has incurred operating losses for the first nine
months of 2009 and 2008 of $207,000 and $2.9 million,
respectively. In addition, negative current economic conditions
and other factors have led to a falloff in the number of active
Site Owners' IBCs in the Company. In May 2009, a civil action was
filed by the Illinois Attorney General against three subsidiaries
of the Company and certain of its executive officers alleging that
the Company violated Illinois' unfair competition and advertising
laws. The Company believes that it has meritorious defenses
against this action as well as the legal proceedings, and intends
to vigorously defend the cases.
The Company believes itss year-to-date losses from continuing
operations, working capital deficiency and uncertainties
surrounding the Company's pending litigation may raise substantial
doubt about its ability to continue as a going concern.
About YTB International
Based in Wood River, Ill., YTB International, Inc. (OTC BB: YTBLA)
- http://www.ytb.com/-- provides Internet-based travel booking
services for home-based independent representatives in the United
States, Puerto Rico, the Bahamas, Canada, Bermuda, and the U.S.
Virgin Islands. The Company operates through three subsidiaries:
YTB Marketing, Inc. (formerly YourTravelBiz.com, Inc.), YTB Travel
Network, Inc., and YTB Franchise Services, Inc.
* Wells Fargo Shut Out Of Visa, MasterCard Antitrust Deal
---------------------------------------------------------
Law360 reports that a federal judge has declined to allow Wells
Fargo Retail Finance -- as a secured creditor to certain bankrupt
class members -- to participate in a multibillion-dollar retailer
antitrust settlement with Visa USA Inc. and MasterCard
International Inc., saying that the lender was too late in filing
its claim.
* Large Companies With Insolvent Balance Sheets
-----------------------------------------------
Total
Total Share-
Total Working holders'
Assets Capital Equity
Company Ticker ($MM) ($MM) ($MM)
------- ------ ------ ------- --------
AUTOZONE INC AZO US 5,318.40 (145.02) (433.07)
DUN & BRADSTREET DNB US 1,600.30 (181.70) (720.30)
CLOROX CO CLX US 4,598.00 (665.00) (47.00)
BOEING CO BA US 58,667.00 (1,822.00) (877.00)
MEAD JOHNSON-A MJN US 1,964.30 502.30 (697.50)
BOARDWALK REAL E BEI-U CN 2,405.68 N.A. (36.79)
BOARDWALK REAL E BOWFF US 2,405.68 N.A. (36.79)
BOEING CO BAB BB 58,667.00 (1,822.00) (877.00)
TAUBMAN CENTERS TCO US 2,607.20 N.A. (466.57)
NAVISTAR INTL NAV US 9,384.00 180.00 (1,294.00)
UNISYS CORP UIS US 2,741.10 186.80 (1,145.50)
CHOICE HOTELS CHH US 353.03 (13.42) (132.91)
WEIGHT WATCHERS WTW US 1,076.72 (329.14) (748.21)
LINEAR TECH CORP LLTC US 1,466.40 993.39 (163.78)
CABLEVISION SYS CVC US 10,128.00 (111.68) (5,193.36)
ARTIO GLOBAL INV ART US 280.40 N.A. (33.37)
IPCS INC IPCS US 559.20 72.11 (33.02)
WR GRACE & CO GRA US 3,936.80 1,095.10 (312.30)
MOODY'S CORP MCO US 1,874.20 (305.80) (647.50)
PETROALGAE INC PALG US 3.23 (6.62) (40.14)
IMS HEALTH INC RX US 2,110.52 230.86 (42.68)
AFFYMAX INC AFFY US 144.93 7.14 (2.73)
DISH NETWORK-A DISH US 8,658.74 710.57 (1,381.37)
SUN COMMUNITIES SUI US 1,189.20 N.A. (95.46)
HEALTHSOUTH CORP HLS US 1,754.40 35.90 (534.50)
REVLON INC-A REV US 802.00 105.40 (1,043.40)
ARTIO GLOBAL INV A1I GR 280.40 N.A. (33.37)
OVERSTOCK.COM OSTK US 144.38 34.09 (3.10)
SUCCESSFACTORS I SFSF US 181.33 3.21 (2.59)
TENNECO INC TEN US 2,939.00 233.00 (213.00)
NATIONAL CINEMED NCMI US 607.80 85.00 (504.50)
THERAVANCE THRX US 183.47 123.53 (175.21)
REGAL ENTERTAI-A RGC US 2,512.50 (13.60) (258.50)
JUST ENERGY INCO JE-U CN 1,378.06 (392.04) (350.05)
PALM INC PALM US 793.95 (269.46) (454.17)
CHENIERE ENERGY CQP US 1,918.95 28.24 (472.03)
VENOCO INC VQ US 715.17 (13.00) (169.00)
OCH-ZIFF CAPIT-A OZM US 1,976.06 N.A. (88.36)
CARDTRONICS INC CATM US 457.20 (41.75) (8.29)
INTERMUNE INC ITMN US 157.15 92.82 (83.36)
WORLD COLOR PRES WC CN 2,641.50 479.20 (1,735.90)
KNOLOGY INC KNOL US 643.99 20.90 (41.94)
BLOUNT INTL BLT US 487.85 29.49 (22.15)
UNITED RENTALS URI US 3,895.00 312.00 (18.00)
SONIC CORP SONC US 849.04 84.81 (4.27)
WORLD COLOR PRES WC/U CN 2,641.50 479.20 (1,735.90)
SEMGROUP ENERGY SGLP US 316.83 (4.27) (133.64)
SANDRIDGE ENERGY SD US 2,310.97 1.42 (190.99)
FORD MOTOR CO F US 205,896.00 (9,751.00) (7,270.00)
ARVINMERITOR INC ARM US 2,508.00 27.00 (1,248.00)
CENTENNIAL COMM CYCL US 1,480.90 (52.08) (925.89)
AFC ENTERPRISES AFCE US 115.70 (0.30) (22.90)
PDL BIOPHARMA IN PDLI US 264.45 (16.23) (242.39)
CENVEO INC CVO US 1,601.19 203.42 (178.97)
EXTENDICARE REAL EXE-U CN 1,655.19 126.26 (47.76)
DOMINO'S PIZZA DPZ US 443.74 106.68 (1,350.12)
INCYTE CORP INCY US 472.82 358.38 (199.36)
OMEROS CORP OMER US 6.91 (7.00) (14.27)
SALLY BEAUTY HOL SBH US 1,490.73 341.73 (613.65)
DEXCOM DXCM US 53.96 25.84 (9.10)
SIGA TECH INC SIGA US 8.17 (4.07) (11.49)
JAZZ PHARMACEUTI JAZZ US 102.17 (8.97) (82.44)
UAL CORP UAUA US 18,347.00 (2,111.00) (2,645.00)
MANNKIND CORP MNKD US 288.66 34.89 (2.41)
WARNER MUSIC GRO WMG US 3,989.00 (680.00) (142.00)
EXELIXIS INC EXEL US 421.10 91.53 (142.77)
TALBOTS INC TLB US 855.94 (25.08) (206.66)
PROTECTION ONE PONE US 632.46 8.11 (82.40)
OSIRIS THERAPEUT OSIR US 110.80 48.53 (3.29)
AMER AXLE & MFG AXL US 1,953.00 33.10 (739.60)
RURAL/METRO CORP RURL US 294.72 62.28 (101.53)
ACCO BRANDS CORP ABD US 1,078.00 217.20 (102.90)
ZYMOGENETICS INC ZGEN US 243.39 59.40 (21.76)
AMR CORP AMR US 25,754.00 (1,448.00) (2,859.00)
KL ENERGY CORP KLEG US 4.53 (6.50) (3.09)
FORD MOTOR CO F BB 205,896.00 (9,751.00) (7,270.00)
SELECT COMFORT C SCSS US 82.27 (68.66) (38.75)
VIRGIN MOBILE-A VM US 307.41 (138.28) (244.23)
IMMUNOTECH LABOR IMMB US 0.38 (2.32) (2.09)
EPICEPT CORP EPCT SS 11.96 5.79 (5.16)
DELCATH SYSTEMS DCTH US 6.77 (4.98) (4.94)
CELLDEX THERAPEU CLDX US 48.10 13.90 (2.24)
CYTORI THERAPEUT CYTX US 25.00 11.37 (1.42)
LIN TV CORP-CL A TVL US 772.71 6.57 (188.41)
MEDIACOM COMM-A MCCC US 3,721.86 (253.93) (434.75)
ENERGY COMPOSITE ENCC US 0.00 (0.01) (0.01)
HOVNANIAN ENT-A HOV US 2,285.45 1,524.67 (73.61)
EASTMAN KODAK EK US 7,483.00 935.00 (651.00)
HOVNANIAN ENT-B HOVVB US 2,285.45 1,524.67 (73.61)
DYAX CORP DYAX US 51.59 23.57 (49.20)
STEREOTAXIS INC STXS US 40.48 1.36 (15.27)
QWEST COMMUNICAT Q US 20,225.00 766.00 (1,031.00)
SINCLAIR BROAD-A SBGI US 1,629.15 (17.99) (132.17)
US AIRWAYS GROUP LCC US 7,744.00 (552.00) (260.00)
GLG PARTNERS-UTS GLG/U US 466.58 168.33 (277.14)
*********
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. Marites Claro, Joy Agravante, Rousel Elaine Tumanda, Howard
C. Tolentino, Joseph Medel C. Martirez, Denise Marie Varquez,
Philline Reluya, Ronald C. Sy, Joel Anthony G. Lopez, Cecil R.
Villacampa, Sheryl Joy P. Olano, Carlo Fernandez, Christopher G.
Patalinghug, and Peter A. Chapman, Editors.
Copyright 2009. All rights reserved. ISSN: 1520-9474.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers. Information contained
herein is obtained from sources believed to be reliable, but is
not guaranteed.
The TCR subscription rate is $775 for 6 months delivered via e-
mail. Additional e-mail subscriptions for members of the same
firm for the term of the initial subscription or balance thereof
are $25 each. For subscription information, contact Christopher
Beard at 240/629-3300.
*** End of Transmission **