/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/100127.mbx T R O U B L E D C O M P A N Y R E P O R T E R Wednesday, January 27, 2010, Vol. 14, No. 26 Headlines 101/202 HOLDINGS: Court to Consider Case Dismissal on February 16 101/202 HOLDINGS: U.S. Trustee Unable to Form Creditors Committee ABITIBIBOWATER INC: Fee Auditor OKs Paul Hasting's $1.2MM Fees ABITIBIBOWATER INC: Gets Nod to Settle Wrongful Death Suit ABITIBIBOWATER INC: Has Approval for Deloitte as Fin'l Advisor ACCURIDE CORP: Court Wants More Disclosure From Bondholders ALABAMA & DUNLAVY: Chapter 11 Reorganization Case Dismissed ALL LAND INVESTMENTS: Amends Schedules of Assets and Liabilities ALLEN CAPITAL: Dallas Logistics Hub Files Voluntary Chapter 11 ALLEN CAPITAL: Case Summary & 20 Largest Unsecured Creditors ALLIED CAPITAL: Prospect Challenges Board's Decision to Scrap Bid AMERICAN INT'L: TARP Inspector to Probe Payout to Trading Partners ANA VERDE: DIP Financing, Cash Collateral Use Get Interim OK ANAVERDE LLC: Files Liquidation Plan & Disclosure Statement ANGIOTECH PHARMACEUTICALS: Franklin Resources Reports 4.1% Stake APPLETON PAPERS: Moody's Affirms Corporate Family Rating at 'B2' APPLETON PAPERS: S&P Assigns 'B+' Rating on $300 Mil. Notes ARIZONA EQUIPMENT: Files First Amended Disclosure Statement ASSOCIATED BANC-CORP: Capital Actions Help Stabilize Fitch Ratings B&G FOODS: Unveils Initial Results of Tender Offer BH S&B HOLDINGS: Guippone Deadline for Claims Moved to March 27 BIG WEST: Moody's Assigns Corporate Family Rating at 'B2' BIGLER LP: Files Schedules of Assets and Liabilities BIGLER LP: U.S. Trustee Sets Meeting of Creditors for February 11 BLACK CROW MEDIA: Wants DIP Financing & Cash Collateral Use BLUE HERON: U.S. Trustee Appoints 7-Member Creditors Committee BLUE HERON: Section 341(a) Meeting Set at U.S. Trustee's Office BRIDGEVIEW AEROSOL: Has Until July 8 to File Chapter 11 Plan BRIDGEVIEW AEROSOL: Court Sets March 15 as General Bar Date BROADLANE INC: S&P Affirms 'B+' Corporate Credit Rating BRUNO GRELA-MPOKO: Case Summary & 20 Largest Unsecured Creditors BUILDERS FIRSTSOURCE: S&P Drops Corpore to 'SD' on Debt Exchange BUILDING MATERIALS: S&P Raises Corporate Credit Rating to 'BB+' CALIFORNIA HOUSING: Moody's Cuts Rating on Insurance Fund to 'B2' CANWEST GLOBAL: CCAA Stay Period Extended Until March 31 CANWEST GLOBAL: Doesn't Want to Sell Assets in Parts CANWEST GLOBAL: Pays Salvation Army in Excess of $50,000 CAPMARK FINANCIAL: Affordable's Schedules & Statement CAPMARK FINANCIAL: Dewey & LeBoeuf Charges $3MM for November Work CAPMARK FINANCIAL: Sues Gruss Global to Stop Noteholder Suits CAPMARK FINANCIAL: Asks for First Plan Exclusivity Extension CARBON BEACH: Files Schedules of Assets and Liabilities CATALYST PAPER: Amends Private Exchange Offer CATALYST PAPER: Refutes Claims From Payment Recovery in Quebecor C&C ELLEGANZA: Case Summary & 16 Largest Unsecured Creditors CELL THERAPEUTICS: Sells $30 Mil. in Preferreds and Warrants CERUS CORP: Royce & Associates Reports 10.05% Equity Stake CERUS CORP: Board OKs Bonus Pool for Senior Management CFT-III LLC: Voluntary Chapter 11 Case Summary CHEMTURA CORP: Albemarle Discloses Impact of Deal in Q4 Earnings CHRYSLER LLC: 600 Dealers Try to Restore Businesses CHRYSLER LLC: Assigns Two Daimler Contracts to New Chrysler CHRYSLER LLC: Dealers Pursue Plea to Overturn Contract Rejections CHRYSLER LLC: New Chrysler Recalls Pickups Due to Safety Issues CHRYSLER LLC: Ohio Plan to Stay Open Until June CHRYSLER LLC: Sending 2nd Amended Plan to Creditors for Voting CHRYSLER LLC: Dealerships to Seek Arbitration CIMINO BROKERAGE: Cash Collateral Hearing Set for March 5 CINEMA FUSION: Loan Default Prompts Chapter 11 Filing CNG HOLDINGS: Moody's Assigns Corporate Family Rating at 'B3' CNG HOLDINGS: S&P Assigns 'B' Counterparty Credit Rating COACHMEN INDUSTRIES: Unit Has Deal to Build College Residence Hall COINMACH SERVICE: S&P Raises Corporate Credit Rating to 'B-' COLONIAL BANCGROUP: Can Access Cash on Hand to Pay Bills COMMERCIAL VEHICLE: Delays Planned Sale of $2-Mil. in Securities COMMONWEALTH EDISON: Fitch Raises Issuer Default Rating From 'BB+' COPPERFIELD INVESTMENTS: Claimant Denied Derivative Standing CREDIT ACCEPTANCE: S&P Assigns 'BB-' Senior Secured Debt Rating DESIGNER LICENSE: Taps Goldberg Weprin as Bankruptcy Counsel DESIGNER LICENSE: U.S. Trustee Picks 3-Member Creditors Panel DESIGNER LICENSE: Section 341(a) Meeting Scheduled for February 4 DEWITT LEE WEARY: Case Summary & 20 Largest Unsecured Creditors EDWARD MANDEL: Voluntary Chapter 11 Case Summary EINSTEIN NOAH: Reports Preliminary Financial Results for Q4 EMISPHERE TECHNOLOGIES: Board OKs Salary Hike for Two Executives EMRISE CORP: Modifies Credit Agreement to Avert Default ENERGY XXI: Moody's Upgrades Corporate Family Rating to 'Caa1' EQUINOX HOLDINGS: Moody's Cuts Rating on Senior Notes to 'B2' EXPRESS ENERGY: Moody's Withdraws 'Ca' Corporate Family Rating EXTENDED STAY: Cerberus, et al., Wants Five Mile Suit to Stay EXTENDED STAY: Lichtenstein et al. Want Transfer Ruling Reversed FAIRFAX FINANCIAL: Moody's Assigns 'Ba3' Preferred Share Rating FAIRFAX FINANCIAL: S&P Assigns 'BB' Rating on Preferred Shares FANNIE MAE: House Financial Services Chairman Calls for End FONTAINEBLEAU LV: Hearing on Sale of Resort to Icahn Today FONTAINEBLEAU LV: Identifies Contracts to be Assigned to Icahn FONTAINEBLEAU LV: Plan Exclusivity Extended Until March 1 FORD MOTORS: Sequoia Restaurant Presents First Award FREDDIE MAC: Seeks to File Own Liquidation Plan for Taylor Bean GENERAL GROWTH: Hires UBS to Evaluate Financial Transactions GLOBAL GEOPHYSICAL: S&P Raises Corporate Credit Rating to 'B' GLUTH BROS: Judge Tosses Fraudulent Conveyance Lawsuit GENERAL MOTORS: CEO Whitacre, et al., to Remain Under Pay Limits GENERAL MOTORS: Dealerships to Seek Arbitration GENERAL MOTORS: Sues BMW for Breach of Delivery Agreement GENERATION BRANDS: Completes Restructuring and Exits Chapter 11 GTC BIOTHERAPEUTICS: LFB Converts Preferreds Into Common Shares HAMILTON BROTHERS: Case Summary & 21 Largest Unsecured Creditors HARBORWALK LP: Voluntary Chapter 11 Case Summary HARRISBURG, PA: Bankruptcy Looms Amid Budget Deficit HARVEST OIL: Can Access Lenders' Cash Collateral Until January 31 INTERNATIONAL ALUMINUM: Committee Trying to Slow Case INTERNATIONAL LEASE: S&P Downgrades Unsec. Debt Rating to 'BB+' JACUZZI BRANDS: S&P Downgrades Corporate Credit Rating to 'SD' JEFFREY PATRICK RICE: Voluntary Chapter 11 Case Summary JONES STEPHENS: Creditors Want Exclusivity Terminated JOSE JORGE: Has Access to Northwest Farm Cash Until February 14 KAINOS PARTNERS: Has Until March 3 to File Chapter 11 Plan KINGSLEY CAPITAL: 10th Cir. Says Appeal Time Can't Be Waived KLCG PROPERTY: KeyLime Water Park Heading for March 16 Auction LA JOLLA: Receives Nasdaq Delisting Notice; Intends to Appeal LAS VEGAS MONORAIL: Wants to Use Cash Collateral LAS VEGAS SANDS: Inks Amended Employment Deal With Sr. VP Kay LEHMAN BROTHERS: Fires Back in Metavante Swap Dispute LIBBEY INC: Unit Commences Tender Offer for Senior Secured Notes LODGENET INTERACTIVE: Black Horse Capital Reports 11.6% Stake LODGENET INTERACTIVE: Delays Sale of $290MM of Debt Securities LYONDELL CHEMICAL: BoNY Settles Plea for Payment of $361.5MM LYONDELL CHEMICAL: Court Won't Stop Adequate Protection Payments LYONDELL CHEMICAL: Gets Approval for Settlement with Insurers MANHATTAN INVESTMENT: S.D.N.Y. Declines to Tax Costs to Trustee MESA AIR: Moves to Terminate Excess Aircraft Leases MICHAEL GEIGER: Voluntary Chapter 11 Case Summary MICHAEL MACK: Case Summary & 20 Largest Unsecured Creditors NATIONAL MEDICAL: S&P Withdraws 'BB' Corporate Credit Rating NEXTWAVE WIRELESS: Receives Delisting Notice From NASDAQ NORANDA ALUMINUM: Moody's Upgrades Sr. Unsec. Notes Rating to Caa2 NORANDA ALUMINUM: Plans to Sell $250,000,000 of Common Stock NUVEEN INVESTMENTS: Broker Dealer Faces FINRA Disciplinary Action ONEIDA LTD: Judge Affirms Dismissal of $6M Claim in Oneida Ch. 11 OPUS EAST: Cooch & Taylor Bills $172,000 for July-Oct. OPUS WEST: Proposes Settlement With Two Former Employees OPUS EAST: Trustee Proposes Backlick Road Property Sale PALM SPRINGS: Case Summary & Unsecured Creditor PARTITIONS PLUS: United Rentals Loses Preferential Transfer Appeal PENN TRAFFIC: Tops Markets Buying Supermarket Operations PHILADELPHIA ORCHESTRA: Seeks $15-Mil. Funding; Bankruptcy Looms QUALITY CANDY: Files for Chapter 11 Protection in Milwaukee QUANTUM CORP: Wells Fargo, Harrosh Disclose Equity Stake READER'S DIGEST: Moody's Assigns 'B1' Corporate Family Rating REFCO INC: Post-Confirmation Report for Q4 2009 RES-CARE INC: S&P Affirms Corporate Credit Rating at 'BB-' RICKIE WALKER: Case Summary & 7 Largest Unsecured Creditors S-TRAN HOLDINGS: Hearing on Ch. 11 Case Conversion Set for Today ST. VINCENT'S: Faces Cash Flow Crunch, Bankruptcy SIMMONS BEDDING: Raises $425 Million From Debt Offering SIMMONS BEDDING: Amended Bankruptcy-Exit Plan Declared Effective SPANSION INC: ChipMos Has Deal to Sell Claim to Citigroup SPANSION INC: Files Supplements to 2nd Amended Plan SPANSION INC: Has Interim Nod for $450 Mil. Exit Facility SPANSION INC: Noteholders Say Plan Outline Has Misrepresentations SPANSION INC: Proposes to Settle Japan Dispute for $45 Mil. SPANSION INC: Reports $4,329,000 Net Income for 4th Quarter STATION CASINOS: Committee Creditors Can't Sue for Fraud Yet STATION CASINOS: Bondholders Defend Bid to Pursue LBO Lawsuits SUMBRY MORTUARY: Voluntary Chapter 11 Case Summary TAYLOR BEAN: Freddie Mac Wants to File Own Liquidation Plan TELIGENT INC: Seeks To Limit K&L Gates Discovery TRIPLE J OILFIELD: Case Summary & 20 Largest Unsecured Creditors TRUMP ENTERTAINMENT: Court Delays Review of Interest Payment Issue VIKING SYSTEMS: Dutchess to Buy Shares Over 36-Month Period VIKING SYSTEMS: Registers 2.8MM Shares Under Incentive Plan VITERRA, INC: Moody's Confirms Corporate Family Rating at 'Ba1' WEST POINT: Case Summary & 11 Largest Unsecured Creditors WILLIAM CARTER: Moody's Confirms Corporate Family Rating at 'Ba2' WM BOLTHOUSE: Moody's Assigns 'B1' Rating on Senior Secured Loan W.R. GRACE: Wraps Up Confirmation Hearing on Plan * Epiq Systems Expanded Electronic Discovery Segment in 2009 * John Hintz Joins Chadbourne & Parke's IP Group * Valuation and Strategic Consulting Specialist Joins Marks Paneth * Upcoming Meetings, Conferences and Seminars ********* 101/202 HOLDINGS: Court to Consider Case Dismissal on February 16 ----------------------------------------------------------------- 101/202 Holdings, L.L.C., asks the U.S. Bankruptcy Court for the District of Arizona to dismiss its Chapter 11 case. 101/202 explains that it has failed to obtain third party financing to satisfy all claims against the estate. The Debtor says it is allowing the senior lien holders to initiate a trustee's sale of its property. The Hon. Sarah Sharer Curley will consider the Debtor's motion to dismiss at a hearing on February 16, 2010, at 11:00 a.m. at 230 N. First Avenue, 7th Floor, Courtroom 701, Phoenix, Arizona. Tempe, Arizona-based 101/202 Holdings, L.L.C. filed for Chapter 11 on November 27, 2009 (Bankr. D. Ariz. Case No. 09-30627). Jerry L. Cochran, Esq., at Cochran Law Firm, PC represents the Debtor in its restructuring effort. In its petition, the Debtor listed $10,000,001 to $50,000,000 in assets and $1,000,001 to $10,000,000 in debts. 101/202 HOLDINGS: U.S. Trustee Unable to Form Creditors Committee ----------------------------------------------------------------- The Office of the U.S. Trustee for Region 14 notified the U.S. Bankruptcy Court for the District of Arizona that it was unable to appoint an official committee of unsecured creditors in the Chapter 11 case of 101/202 Holdings, L.L.C. The U.S. Trustee related that there were an insufficient number of unsecured creditors who have expressed interest in serving on a committee. The UST reserves the right to appoint the committee if interest develop among the creditors. Tempe, Arizona-based 101/202 Holdings, L.L.C. filed for Chapter 11 on November 27, 2009 (Bankr. D. Ariz. Case No. 09-30627). Jerry L. Cochran, Esq., at Cochran Law Firm, PC represents the Debtor in its restructuring effort. In its petition, the Debtor listed $10,000,001 to $50,000,000 in assets and $1,000,001 to $10,000,000 in debts. ABITIBIBOWATER INC: Fee Auditor OKs Paul Hasting's $1.2MM Fees -------------------------------------------------------------- In separate reports filed with the Court, Direct Fee Review LLC, in its capacity as fee auditor in AbitibiBowater Inc.'s cases, recommended the approval of fees and the reimbursement of expenses of these professionals for these fee periods: Professional Fee Period Fees Expenses ------------ ----------- ---------- -------- Paul, Hastings, 04/28/09 to $1,200,217 $17,398 Janofsky & Walker LLP 08/31/09 Lazard Freres & Co. LLC 05/04/09 to $1,200,000 $31,762 10/31/09 PricewaterhouseCoopers 04/01/09 to $709,277 $20,115 LLP, (Canada) 06/30/09 Meanwhile, Direct Fee Review LLC submitted to the Court separate reports recommending the allowance of these professionals' fees and the reimbursement of their expenses during these fee periods: Professional Fee Period Fees Expenses ------------ ---------- ---------- -------- Paul, Weiss, Rifkind 08/01/09 to $1,073,271 $27,379 Wharton & Garrison LLP 09/30/09 Blackstone Advisory 07/01/09 to 1,125,000 36,303 Services, LP 09/30/09 Huron Consulting, 07/16/09 to 734,610 203,255 LLC 08/31/09 Deloitte Tax, LLP 08/01/09 to 622,704 15,240 10/31/09 PricewaterhouseCoopers 06/01/09 to 380,340 0 LLP, US 08/31/09 Troutman Sanders, LLP 08/01/09 to 306,701 5,046 10/31/09 Young Conaway Stargatt 08/01/09 to 224,997 27,403 & Taylor, LLP 10/31/09 Ernst & Young LLP 08/01/09 to 222,401 14,992 09/30/09 Bayard, P.A. 08/01/09 to 76,438 7,482 10/31/09 FTI Consulting, Inc. 08/01/09 to 0 12,821 10/31/09 Bennett Jones LLP 08/01/09 to C$231,480 C$36,790 10/31/09 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 28 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: Gets Nod to Settle Wrongful Death Suit ---------------------------------------------------------- AbitibiBowater Inc. and its units obtained approval from the U.S. Bankruptcy Court of a settlement agreement they negotiated in relation to a complaint filed by Tiffany Lloyd, Latoya Lloyd, Crystal Lloyd, Mark Lloyd, Brittney Lloyd, Courtney Lloyd, Cameron Lloyd, Jake Wells, Sr., and Mark O'Hara against them and Jeffrey Trammell in the Circuit Court of St. Charles County in Missouri. The Lloyd Complaint, currently ongoing, alleges causes of action for wrongful death, negligence per se, and negligent supervision hiring related to a November 2007 traffic accident. The Complaint specifically alleges that Mr. Trammell, acting as an employee of the Debtors, lost control of his vehicle in the County of St. Charles, Missouri, and collided with Regina Lloyd's vehicle, causing Ms. Lloyd to suffer injuries ultimately resulting in her death, Sean T. Greecher, Esq., at Young Conaway Stargatt & Taylor LLP, in Wilmington, Delaware, relates. Following extensive negotiations, the Debtors and the Claimants agreed to settle any and all claims related to the Missouri Action, and to establish the terms and a schedule for payment of the agreed settlement amount. The Settlement Agreement, which was reached in accordance with Rule 9019 of the Federal Rules of Bankruptcy Procedure, specifically provides that: (a) The Missouri Action will be settled for the sum of $6.5 million, the entirety of which will be paid and satisfied from the proceeds of applicable insurance of the Debtors; and (b) In the event any judgment is obtained in the Missouri Action, including judgment for punitive, compensatory, or other damages of any kind, the Claimants will only enforce the judgment as to the $6.5 million settlement. Under the Settlement Agreement, in no event will the Claimants recover from the Debtors amounts in excess of $6.5 million. Hence, limiting the Debtors' liability to an amount claimable under the applicable insurance policies, causing the Debtors' out-of-pocket expense to be likely minimal, Mr. Greecher points out. 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 28 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: Has Approval for Deloitte as Fin'l Advisor -------------------------------------------------------------- AbitibiBowater Inc. and its units received permission from the U.S. Bankruptcy Court to employ Deloitte Financial Advisory Services LLP as their financial advisor nunc pro tunc to November 9, 2009. The Debtors have selected Deloitte FAS because of the firm's extensive experience and knowledge in the area of fresh-start accounting. The firm and more than 1,000 of its professionals have assisted companies in a variety of complex business issues, including restructuring and reorganizations, Sean T. Greecher, Esq., at Young Conaway Stargatt & Taylor, LLP, in Wilmington, Delaware, relates. Pursuant to an Engagement Letter entered into by the parties, Deloitte FAS agrees to provide the Debtors with these Fresh-Start Accounting services, including planning for, determination of and substantiation of the Fresh Start Balance Sheet, which specifically include: (a) assisting the Debtors' management in their development of an implementation approach for Fresh Start Accounting, starting with any necessary training support and culminating in a strategy and work plan for the project; (b) advising and providing recommendations to the Debtors' management in connection with the determination of a plan of reorganization adjustments necessary to record the impact of the POR to the books of entry of the appropriate legal entities, through Deloitte FAS will: -- work with accounting, legal and tax advisors to advise the Debtors' management as it determines the appropriate recoveries to claimants for allowed claims and the allocation of resulting gains on extinguishment or other earnings impacts to separate legal entities within AbitibiBowater's corporate structure; -- review the POR to identify and advise the Debtors' management and provide recommendations on necessary accounting adjustments resulting from POR provisions; and -- advise the Debtors' management in connection with its estimation of recoveries to claimants for accrual accounting purposes, including comparisons with the Debtors' claims database to estimate liabilities related to contingent, unliquidated and disputed claims; and (c) assisting the Debtors' management in its determination of revaluation and other fresh start adjustments necessary to comply with the accounting and reporting requirements, in coordination with bankruptcy, accounting, tax and valuation specialists, through advising the Debtors' management as it records and substantiates adjustments necessary to determine the Debtors' opening fresh start balance sheet, as applicable. Deloitte FAS will also render Valuation Services to the Debtors. Specifically, the firm will: (a) develop an estimate of the fair value of the business enterprise of the Debtors' reporting units as of the reporting date, including, but not limited to Newsprint, Specialty Papers, Coated Papers, Market Pulp, Wood Products and Corporate; and (b) as required for purposes of the analysis, develop an estimate of the fair value of the business enterprise at the plant level, and perform a reconciliation of the aggregate value of the Reporting Units to the overall enterprise value of AbitibiBowater; (c) develop an estimate of the fair value of consolidated joint ventures with minority interest liability, primarily including, but not limited to these joint ventures: -- ACH Limited Partnership -- Manicouagan Power Company -- Augusta Newsprint Company -- Calhoun Newsprint Company -- Bowater Mersey Paper Company Ltd. -- Donahue Malbaie Inc. -- Products Forestiers Mauricie The Debtors and Deloitte FAS agree that (i) the services will not include a valuation of the joint venture between the Debtors and Louisiana-Pacific Corporation, (ii) the results of Deloitte FAS's valuation services will not be pushed down or otherwise recorded or reflected in the financial statements of Louisiana-Pacific. (d) develop an estimate of the fair value of certain unconsolidated equity investments, potentially including, but not limited to: -- Ponderay Newsprint Company -- Exploits River Hydro Partnership -- Star Lake Hydro Partnership, -- Bois d'ingenierie (Larouche) -- Societe en Commandite Scierie Opitciwan (e) develop an estimate of the fair value and estimated useful lives of certain assets and liabilities as of the fresh start reporting date or the valuation date for each of the Reporting Units. The intangible assets to be considered include, but may not be limited to, water rights, cutting rights, customer relationships, material contracts, power purchase agreements, cogeneration contracts, and other assets or liabilities that Deloitte FAS and the Debtors' management will mutually agree to include. Deloitte FAS will rely on the Debtors' management to identify and confirm its conclusions regarding the specification of the assets. Deloitte FAS will also provide the Debtors with advice and assistance in relation to Accounting and Financial Reporting, including: (a) assistance with post-emergence accounting, reporting, valuation or process and systems implications of POR and fresh start reporting; (b) advise the Debtors' management as it prepares accounting information and disclosures in support of public and private filings or audited or unaudited financial statements; (c) assist the Debtors' management with other valuation matters as necessary for financial diclosures; (d) advise the Debtors' management as it evaluates existing internal controls and develops new controls for Fresh Start Accounting implementation; (e) assist the Debtors' management with its responses to questions or other requests from the Debtors' external auditors regarding bankruptcy accounting, valuation and reporting matters. In relation to application support services, Deloitte FAS will assist the Debtors' management in its preparation and implementation of the accounting treatments and systems updates required for Fresh-Start Accounting implementation as of the fresh-start reporting date. The firm will also advise the Debtors' management regarding high level requirements and consultation on best practices with respect to (i) stub-year general ledger cut-off as of the fresh- start reporting date, (ii) push-down of new asset values to fixed asset subsystems, and (iii) purging of pre-petition accounts payable subsystem data. Upon request, Application Support may also include hands on assistance with these items as required: -- Definition of specific processing requirements; -- Programming specifications; -- Application configuration and set-up; -- Interface development; and -- Data cleansing and reconciliation. The Debtors propose to pay for Deloitte FAS' services pursuant to a fee structure in accordance with these hourly fees, excluding Valuation Services: Professional Hourly Rate ------------ ----------- Partner/Principal/Director $560 Senior Manager $450 Manager $375 Senior Associate $275 Associate $170 With respect to Valuation Services, the hourly rates for Deloitte FAS professionals are: Professional Hourly Rate ------------ ----------- Partner/Principal/Director $375 Senior Manager $325 Manager $280 Senior Associate $215 Associate $170 The Debtors will also reimburse Deloitte FAS for its actual and necessary out-of-pocket expenses. Mark Pighini, a principal member at Deloitte FAS, assured the Court that his firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. 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 28 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). ACCURIDE CORP: Court Wants More Disclosure From Bondholders ----------------------------------------------------------- Daily Bankruptcy Review reports the U.S. Bankruptcy Court for the District of Delaware has ordered a group representing Accuride Corp.'s bondholders to reveal its members, how much debt they each hold and what they paid for it. As reported by the Troubled Company Reporter on December 28, 2009, the Bankruptcy Court approved Accuride's disclosure statement, allowing the Company to put its Chapter 11 plan of reorganization o creditors for a vote. Ballots are due January 29. The Disclosure Statement was approved after Accuride agreed to include mention of the Official Committee of Equity Holders' opposition to the Plan. The Equity Committee does not support confirmation of the Plan because it believes, among other things, that the Debtors have undervalued the Debtors and are depriving current equity holders of value. The Plan offers to return 100 cents on the dollar to unsecured creditors and gives 98% of the new stock to holders of subordinate notes. Only impaired creditors -- general unsecured claimants are not impaired -- are voting on the Plan. Additional terms of the Plan are: -- Accuride will amend its existing secured credit agreement to modify certain financial covenants and extend its maturity through June 30, 2013. Recovery would be 100%. -- Accuride's $291.22 million of subordinated notes will be converted into 98,000,000 shares of new stock (98% of the stock) of reorganized Accuride. Recovery would be 42.9% -- Unsecured trade creditors will be unimpaired and will be paid in full. Recovery would be 100%. -- Holders of preferred equity interests will be paid with a $100 liquidation preference in cash. Recovery would be 100%. -- Accuride's common stock will be cancelled and, if the equity holders of equity interests vote to accept the Plan, they will receive 2,000,0900 shares (2% of the stock) and warrants to purchase an additional 22,058,824 shares. -- The Reorganized Debtors and Accuride Canada Inc., will enter into a restructured credit facility in an amount equal to $308.2 million. -- The reorganized Accuride will complete a $140 million rights offering of new senior unsecured convertible notes to current noteholders. Accuride will present the Plan for confirmation on February 10, 2010 at 10 a.m. prevailing Eastern Time. Objections are due January 29. A copy of the Third Amended Plan is available at no charge at: http://bankrupt.com/misc/Accuride_3rd_Plan.pdf A copy of the Third Amended Disclosure Statement is available at no charge at: http://bankrupt.com/misc/Accuride_3rd_DS.pdf About Accuride Corp. Accuride Corp. and its affiliates are among the largest and most diversified manufacturers and suppliers of commercial vehicle components in North America. The Company's products include wheels, wheel-end components and assemblies, truck body and chassis parts, seating assemblies and other commercial vehicle components marketed under several well-recognized brands in the industry, including Accuride, Gunite, Imperial, Bostrom, Fabco, Brillion and Highway Original. According to filings by Accuride, the Company is seeking to restructure in excess of $675 million in debt through its bankruptcy proceeding. The bankruptcy cases are pending in the United States Bankruptcy Court for the District of Delaware. Jeffrey M. Reisner and Tavi C. Flanagan, Esq., at Irell & Manella LLP's Newport Beach-based bankruptcy practice, will serve as lead counsel to the Official Committee of Unsecured Creditors in the affiliated debtors' bankruptcy cases. Mr. Reisner chairs the firm's bankruptcy practice. Kurt Gwynne, Esq., at Reed Smith LLP, serves as Delaware counsel and Joel Dryer of Morris Anderson & Associates will serve as financial advisors to the Official Committee of Unsecured Creditors. The Chapter 11 filing includes Accuride Corp. and a number of subsidiaries and affiliates, including Accuride Cuyahoga Falls, Inc., Accuride Distributing, LLC, Accuride EMI, LLC, Accuride Erie L.P., Accuride Henderson Limited Liability Company, AKW General Partner L.L.C., AOT Inc., Bostrom Holdings, Inc., Bostrom Seating, Inc., Bostrom Specialty Seating, Inc., Brillion Iron Works, Inc., Erie Land Holding, Inc., Fabco Automotive Corporation, Gunite Corporation, Imperial Group Holding Corp. -1, Imperial Group Holding Corp. -2, Imperial Group, L.P., JAII Management Company, Transportation Technologies Industries, Inc., and Truck Components Inc. ALABAMA & DUNLAVY: Chapter 11 Reorganization Case Dismissed ----------------------------------------------------------- The Hon. Wesley W. Steen of the U.S. Bankruptcy Court Southern District of Texas approved the dismissal of the Chapter 11 case of Alabama & Dunlavy Ltd. In November 2009, WEDGE Real Estate Finance, L.L.C., a secured creditor, asked for the dismissal of the case, citing that the case was filed in "bad faith." The filing allegedly was made to hinder WEDGE from foreclosing on the Debtor's sole asset. WEDGE added that it is unlikely that the Debtor will be able to effectively reorganize. On December 2, 2009, the U.S. Trustee filed a motion, also seeking the dismissal of the case, or the conversion to Chapter 7, saying that the Debtor had not filed the required list of creditors, the bankruptcy schedules, and the statement of financial affairs. The U.S. Trustee alleged other serious deficiencies in prosecution of the case. On December 14, the Debtor filed its own motion to dismiss, alleging that it no longer wishes to proceed with its Chapter 11 petition claims for relief. Wedge filed a limited objection to Debtor's motion to dismiss, asking for a dismissal with prejudice to prevent Debtor from filing another bankruptcy case. Houston, Texas-based Alabama & Dunlavy Ltd, also known as Flatstone II Ltd., filed for Chapter 11 on Nov. 3, 2009, (Bankr. S.D. Tex. Case No. 09-38463). Justin M. Jackson, Esq., at the Jackson Law Firm, represents the Debtor in its restructuring effort. In its petition, the Debtor listed assets and debts both ranging from $10,000,001 to $50,000,000. ALL LAND INVESTMENTS: Amends Schedules of Assets and Liabilities ---------------------------------------------------------------- All Land Investments, LLC, filed with the U.S. Bankruptcy Court for the District of Delaware, an amended schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ------ ----------- A. Real Property $20,160,193 B. Personal Property $5,193 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $14,125,864 E. Creditors Holding Unsecured Priority Claims $25,973 F. Creditors Holding Unsecured Non-priority Claims $8,644,701 ----------- ------------ TOTAL $20,165,386 $22,796,538 Newark, Delaware-based All Land Investments, LLC, operates a real estate business. The Company filed for Chapter 11 bankruptcy protection on October 29, 2009 (Bankr. D. Del. Case No. 09-13790). Gary F. Seitz, Esq., at Rawle & Henderson LLP assists the Company in its restructuring efforts. The Company listed $10,000,001 to $50,000,000 in assets and $10,000,001 to $50,000,000 in liabilities. ALLEN CAPITAL: Dallas Logistics Hub Files Voluntary Chapter 11 -------------------------------------------------------------- DLH Master Land Holding, LLC (DLH) and its parent company Allen Capital Partners, LLC (ACP), developers of the 6,000-acre Dallas Logistics Hub, announced January 26 they have filed voluntary Chapter 11 petitions in Dallas to reorganize their debts. DLH and ACP said filing for Chapter 11 will permit them to extend debt maturities, improve their capital structure and further strengthen the Dallas Logistic Hub's competitive position. None of The Allen Group (TAG) organizations or their other entities in Kansas or California was included in the filings. DLH and ACP have been working closely with lender and investor groups on a new capital structure. The proposed capital structure is consistent with the Dallas Logistic Hub's long-term operational and financial strategies. Chapter 11 will enable continuity of property management, asset management, construction services and general partner functions, and will maximize creditor and equity owner recoveries. This action will also provide sufficient operating funds and time to continue actively marketing the development. DLH and ACP expect to promptly confirm a plan of reorganization. "We have a balance sheet problem, not an operational one. The actions we announced today will allow us to resolve that issue," said Richard Allen, chief executive officer of DLH and ACP, in a Jan. 26 statement. "The support we have already received from our lenders and our investors, along with the Chapter 11 filings, will set the foundation for achieving a rational capital structure to support the Dallas Logistics Hub going forward. The unprecedented collapse of the U.S. real estate and capital markets has made it impossible to continue without restructuring our financial obligations. We are confident our restructure plan will enable us to promptly emerge from this process; maximize value for all of our stakeholders; and create a stronger operating platform going forward." DLH and ACP also announced a debtor-in-possession loan (DIP) from a group of Allen Family investors to be used to fund post-petition operating expenses; meet ongoing obligations to employees, customers and suppliers; and support ongoing marketing efforts during Chapter 11. DLH and ACP expect the restructuring process will have no impact on the day-to-day Dallas Logistics Hub business operations or its ability to fulfill its ongoing obligations to its employees, suppliers and tenants. The voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code were filed in the U.S. Bankruptcy Court for the Northern District of Texas, Dallas Division. Additional information about Chapter 11 restructuring can also be found at http://www.dallashub.com/ About DLH, LLC and ACP, LLC DLH Master Land Holding, LLC (DLH) and its parent company Allen Capital Partners, LLC (ACP), based in Dallas, Texas, develop and manage the Dallas Logistics Hub. DLH is a 6,000-acre master- planned development located in the area of Southern Dallas, Wilmer, Hutchins and Lancaster. DLH is one of the largest multi- modal logistics facilities in North America. This unique industrial development will include two intermodal facilities; Union Pacific Railroad's existing Dallas Intermodal Terminal and the proposed Burlington Northern Santa Fe Intermodal Facility; and the Lancaster Executive Airport currently under-going major expansion. DLH is bordered by four major highways; I-20, I-35, I- 45 and planned Loop 9. ALLEN CAPITAL: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Allen Capital Partners, LLC dba The Allen Group 11943 El Camino Real, Suite 200 San Diego, CA 92130 Bankruptcy Case No.: 10-30562 Debtor-affiliate filing separate Chapter 11 petition: Entity Case No. ------ -------- DLH Master Land Holding, LLC 10-30561 dba The Allen Group Chapter 11 Petition Date: January 25, 2010 Court: United States Bankruptcy Court Northern District of Texas (Dallas) Judge: Harlin DeWayne Hale Debtors' Counsel: Mark MacDonald, Esq. MacDonald + MacDonald, P.C. 9938 Ontario Dallas, TX 75220 Tel: (214) 922-9050 Fax: (214) 351-0640 Email: mark@macdonaldlaw.com Debtors' Financial Advisor: Lain, Faulkner & Co. Estimated Assets: $100,000,001 to $500,000,000 Estimated Debts: $100,000,001 to $500,000,000 A. Allen Capital Partners' 20 largest unsecured creditors is available for free at: http://bankrupt.com/misc/txnb10-30562.pdf Allen Capital Partners, LLC's List of 20 Largest Unsecured Creditors: Debtor's List of 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Bank of America Loan Guaranties $49,018,111 5 Park Plaza, Suite 500 Irvine, CA 92614-8525 TierOne Bank Loan Guaranty $47,483,353 1235 "N" Street DLH Master Land Lincoln, NE 68508 Holding, LLC BBVA Compass Loan Guaranties $26,314,133 8333 Douglas Avenue Dallas, TX 75225 Regions Bank Bank Loan $3,998,647 Commerce Real Estate Two Union Square, Suite 300 Chattanooga, TN 37402 Valley Business Bank Bank Loan $3,798,440 200 S. Court Street PO Box 751 Visalia, CA 93279 Southwest Securities Loan Guaranty $2,293,111 PO Box 1959 DLH Hutchins Arlington, TX 76004-1959 Wintergreen 15, LLC Myron Goff Trade Debt $1,061,945 c/o Cloverleaf Park, Inc. 407 S. I-45 Hutchins, TX 75141 FKM Associates, LLC Trade Debt $1,030,665 5400 Rosedale Highway Bakersfield, CA 93308 ADSC Diamante, LLC Trade Debt $691,530 c/o The Allen Group 6005 Hidden Valley Rd., Suite 150 Carlsbad, CA 92009 Ronald Weisenberger Trade Debt $114,020 McGladrey & Pullen Trade Debt $59,745 Certified Public Accountants Daniells, Philips, Vaughn Trade Debt $38,300 & Bock CoStar Group, Inc. Trade Debt $25,860 Allen, Matkins, Leck, Trade Debt $19,095 Gamble Allison Brown Holdings, Trade Debt $11,861 Inc. dba Allison & Partners Wilson Sonsinie Goodrich Trade Debt $8,356 & Rosati Heidrick & Struggles Trade Debt $5,728 Retirement Plan Trade Debt $5,391 Consultants Capital Consulting, LLC Trade Debt $4,800 AFCO Trade Debt $3,162 B. DLH MASTER Land Holding's 20 largest unsecured creditors is available for free at: http://bankrupt.com/misc/txnb10-30561.pdf DLH MASTER Land Holding, LLC's List of 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Chuck Nichols Trade Debt $2,196,712 dba Sierra Farms 13762 First Avenue Hanford, CA 93230 James Guadagni Trade Debt $1,262,500 13324 Avenue 272 Visalia, CA 93277 Mike Kranyak Trade Debt $1,010,000 5400 Rosedale Highway Bakersfield, CA 93308 Majid Mojibi Trade Debt $1,010,000 3129 Standard Street Bakersfield, CA 93388 Margaret M. Jensen Trade Debt $605,000 1396 W. Herndon Ave., #108 Fresno, CA 93711 La Madera Inc. Trade Debt $505,000 1396 W. Herndon Ave., #108 Fresno, CA 93711 JRJ Paving, LP Trade Debt $502,772 1805 Royal Lane, Suite 107 Dallas, TX 75229 Hunton & Williams Trade Debt $122,080 Jackson Walker, LLP Trade Debt $122,023 Allen, Matkins, Leck, Trade Debt $75,106 Gamble Daniells, Phillips, Trade Debt $58,850 Vaughn & Bock Kleinfelder Central, Inc. Trade Debt $17,234 Vinson & Elkins, LLP Trade Debt $16,950 MYCON General Contractors, Trade Debt $11,171 Inc. Attn: Damon Norman CoStar Realty Information Trade Debt $10,451 Inc. Trans Systems Corporation Trade Debt $7,966 Allison & Partners Trade Debt $6,055 Fortune China Publishing Trade Debt $5,496 Marcoa Publishing Dallas, Trade Debt $3,645 Inc. Atmos Energy Trade Debt $3,290 The petition was signed by Richard S. Allen. ALLIED CAPITAL: Prospect Challenges Board's Decision to Scrap Bid ----------------------------------------------------------------- Prospect Capital Corporation has challenged the decision of the Board of Directors of Allied Capital Corp. to unanimously reject an unsolicited non-binding offer from Prospect Capital to acquire all of the issued and outstanding shares of Allied Capital in a stock-for-stock merger. "We were disappointed by your summary rejection of our offer to acquire Allied at a significant premium to the implied value offered to Allied's shareholders by Ares Corporation. The cavalier manner in which you have dealt with our bona fide offer is a continuation of your stonewalling over the last nine months in the face of our numerous expressions of serious interest in acquiring Allied," Prospect Capital said in a January 20 letter distributed through Market Wire. "We believe your contention that our offer does not constitute a 'Superior Proposal' under the Ares merger is both unfounded and contrary to the interests of Allied's shareholders," the letter said. Inferior Proposal Allied Capital's Board on January 19, 2010, unanimously determined that Prospect Capital's offer does not constitute a "Superior Proposal," as such term is defined in the Agreement and Plan of Merger, dated as of October 26, 2009, by and among Allied Capital, Ares Capital Corporation and ARCC Odyssey Corp. In a regulatory filing with the Securities and Exchange Commission, Allied Capital explained the unsolicited non-binding offer contains a proposed share exchange ratio of 0.385 Prospect Capital shares for each Allied Capital share which, based on the closing prices of Prospect Capital and Ares Capital as of January 19, 2010, without consideration of other relevant factors, would imply a small premium to the value of the exchange ratio provided for in the merger with Ares Capital. However, Allied Capital's Board of Directors determined that the transaction contemplated by the unsolicited non-binding offer presents significant risks relating to, among other things, the ability for the combined company to maintain dividend payments post-closing and to access the capital markets on favorable terms to provide for future growth of the business and certainty of closing. In addition, the unsolicited non-binding offer is subject to significant contingencies, including, among other things, performance of due diligence by Prospect Capital and Allied Capital and negotiation of binding documentation. Allied Capital's Board of Directors' unanimous decision to reject the unsolicited non-binding offer was made after careful consideration thereof in consultation with Allied Capital's management and external financial and legal advisors. Allied Capital's Board unanimously reaffirmed its recommendation that Allied Capital's stockholders vote in favor of the approval of the pending merger with Ares Capital and the merger agreement with Ares Capital for the reasons that it initially approved the merger with Ares Capital, including, among other things, the resumption of dividend payments for Allied Capital's stockholders, the combined company's improved access to the debt capital markets on more favorable terms, the combined company's improved access to the equity capital markets, the combined company's increased liquidity and flexibility to provide for future growth of the business, the combined company's increased portfolio diversity, the size and scope of Ares Capital's investment manager and closing certainty for Allied Capital's stockholders. Allied Capital notes that significant progress has been made on the pending merger with Ares Capital and that Ares Capital and Allied Capital believe, subject to receipt of stockholder approvals and certain third party consents, the transaction is on target for a closing in the first quarter of 2010. Allied Capital and Ares Capital hope to be able to distribute the joint proxy statement and voting instructions to their respective stockholders in the near future. Misleading Prospect Capital said Allied Capital's SEC disclosure misleadingly fails to disclose several material facts that directly refute the Allied Capital board's stated reasons for rejecting its offer out of hand. According to Prospect Capital: -- Based on an after-market trading price of $12.93 per share of Prospect common stock on January 19, 2010, Prospect's offer represents a value of $4.98 per share of Allied common stock, which is a 10% premium to the $4.53 value per Allied share implied by an exchange ratio of 0.325 of a share of Ares common stock in the Ares merger (based on a $13.94 after-market trading price of Ares common stock price on January 19, 2010). -- The board asserted without any support that Prospect's offer presents "significant risks" relating to the combined company's ability to maintain dividend payments. In fact, Ares cut its dividend in 2009 by 17% while Prospect has increased its dividend in each of the 21 quarters since its 2004 initial public offering. Prospect pays a $0.40875 per share dividend, compared to $0.35 per share for Ares. -- Based on Prospect's proposed exchange ratio of 0.385 of a share of Prospect common stock for each share of Allied common stock, Prospect's offer would provide Allied shareholders with a dividend of $0.157 per share of Allied common stock as compared with a dividend of $0.114 per share of Allied common stock under the Ares merger. -- Contrary to the board's professed concern that Prospect's offer poses "significant risks" concerning future access to the capital markets, Prospect believes that based on its track record, a Prospect/Allied combination would provide Allied shareholders with superior access to debt and equity capital markets. Prospect indicated that it has successfully completed 13 equity offerings since 2004, including 10 offerings aggregating more than $350 million since the inception of the credit dislocation in mid-2007 and six equity offerings aggregating more than $200 million during 2009. Unlike Ares, Prospect increased both its credit facility size and its number of lenders over the last year. -- Allied's SEC disclosure fails to acknowledge the point made in Prospect's offer that Prospect currently has a debt/equity ratio of less than 0.1x, which, pro forma for the proposed Prospect/Allied combination, would provide significant de-leveraging for Allied shareholders. Ares, by comparison, has a debt/equity ratio of approximately 0.7x, which Prospect believes makes an Ares/Allied combination riskier for Allied's shareholders. Further, Prospect enjoys investment grade ratings with Standard and Poor's and Moody's for Prospect's corporate rating and credit facility rating, respectively, which Prospect's believes Allied's lenders and shareholders would view positively. Prospect said it has relied solely on Allied's public documents in making the offer, which is conditioned on access to due diligence information. "To the extent that you can provide us, which your agreement with Ares allows you to do, with information that demonstrates that a higher valuation of Allied is justified, we would be prepared to discuss an increase in the consideration to be paid in our offer," Prospect said. Ares to Close Deal by End of Q1 Ares Capital has filed a registration statement that includes an amended preliminary joint proxy statement/prospectus with the SEC. As described in the joint proxy, each of Ares Capital and Allied Capital have set a record date of February 2, 2010, and a special meeting date for Ares Capital and Allied Capital stockholders meetings of March 26, 2010. The joint proxy will be mailed to Ares Capital and Allied Capital stockholders once it is declared effective by the SEC. Ares Capital still anticipates the closing of the Allied Capital acquisition to take place, subject to receipt of stockholder approvals and certain third party consents, by the end of the first quarter of 2010. The closing of the acquisition is subject to the joint proxy being declared effective by the SEC, receipt of stockholder approvals, certain Ares Capital and Allied Capital lender consents and other closing conditions. About Prospect Capital Prospect Capital Corporation -- http://www.prospectstreet.com/-- is a closed-end investment company that lends to and invests in private and microcap public businesses. Prospect's investment objective is to generate both current income and long-term capital appreciation through debt and equity investments. About Ares Capital Ares Capital Corporation -- http://www.arescapitalcorp.com/-- is a specialty finance company that provides integrated debt and equity financing solutions to U.S. middle-market companies. Ares Capital invests primarily in first- and second-lien loans and mezzanine debt, which in some cases includes an equity component. To a lesser extent, Ares Capital also makes equity investments. Ares Capital is externally managed by Ares Capital Management LLC, an affiliate of Ares Management LLC, an SEC registered investment advisor and alternative asset investment management firm with approximately $33 billion of committed capital under management as of December 31, 2009. Ares Capital Corporation is a closed-end, non-diversified management investment company that has elected to be regulated as a Business Development Company under the Investment Company Act of 1940. About Allied Capital Allied Capital (NYSE: ALD) - http://www.alliedcapital.com/-- is a business development company that is regulated under the Investment Company Act of 1940. Allied Capital has a portfolio of investments in the debt and equity capital of middle market businesses nationwide. Founded in 1958 and operating as a public company since 1960, Allied Capital has been investing in the U.S. entrepreneurial economy for 50 years. Allied Capital has a diverse portfolio of investments in 88 companies across a variety of industries. At September 30, 2009, the Company's consolidated balance sheets showed $2.840 billion in total assets, $1.639 billion in total liabilities, and $1.201 bilion in total shareholders' equity. Going Concern Doubt In its audit report on the Company's financial statements for the fiscal year ended December 31, 2008, KPMG LLP, the Company's independent registered public accounting firm, expressed substantial doubt about the Company's ability to continue as a going concern. Prior to the Company's debt restructure, certain events of default occurred under the Company's bank credit facility and the Company's private notes. These events of default provided the respective lenders the right to declare immediately due and payable unpaid amounts approximating $1.1 billion at June 30, 2009. With the completion of the comprehensive restructuring of the Company's private notes and bank facility during the third quarter of 2009, the factors that gave rise to the uncertainty about the Company's ability to continue as a going concern have been remediated. * * * As reported by the Troubled Company Reporter on January 26, 2010, Standard & Poor's Ratings Services kept its 'BB+' long-term counterparty credit rating and 'BB' senior unsecured debt rating on Allied Capital Corp. on CreditWatch with positive implications. S&P also kept its 'BBB' long-term counterparty credit rating on Ares Capital Corp. on CreditWatch with negative implications. AMERICAN INT'L: TARP Inspector to Probe Payout to Trading Partners ------------------------------------------------------------------ The Wall Street Journal's Michael R. Crittenden and John D. McKinnon report that Neil Barofsky, the special inspector general for the $700 billion Troubled Asset Relief Program, is opening a probe into disclosures made as part of the government's rescue of American International Group Inc. when the company's trading partners were paid billions in November 2008. According to the Journal, Mr. Barofsky plans to tell a U.S. House panel Wednesday that he is investigating whether there was any "misconduct relating to the disclosure or lack thereof" surrounding the deals, in which banks who had traded with AIG got paid in full on $62 billion in bets on soured mortgage securities. The Journal also reports Mr. Barofsky said he is reviewing the Federal Reserve's cooperation with his office. According to the Journal, issues raised in recent weeks "call into question whether the government has been and is being as transparent as possible with the American people," he said in prepared remarks for a Wednesday hearing before the House Committee on Oversight and Government Reform. The Journal says the probe is likely to ratchet up the heat on the Federal Reserve, which lately has been under some of the most intense scrutiny from Congress it has ever faced. Chairman Ben Bernanke is the focus of a heated debate in the U.S. Senate over whether he should be confirmed to serve a second term as head of the central bank. According to the Journal, among the issues that have emerged in recent weeks and months are why the Fed resisted releasing the names of AIG's trading partners and why it was reluctant to acknowledge that they received 100 cents on the dollar when they agreed to tear up their contracts with AIG. New documents reviewed by Journal further suggest that New York Fed officials were reluctant to disclose in writing that AIG's counterparties were being paid off at 100%. The Journal also relates that in November 2008, a Fed official urged deleting a reference to the 100% payouts from a request for proposals being sent to service providers. The RFP was for the so-called Maiden Lane III structure, formed to facilitate the New York Fed's financial assistance to AIG. About AIG Inc. Based in New York, American International Group, Inc., is the leading international insurance organization with operation in more than 130 countries and jurisdictions. AIG companies serve commercial, institutional and individual customers through the most extensive worldwide property-casualty and life insurance networks of any insurer. In addition, AIG companies are leading providers of retirement services, financial services and asset management around the world. AIG's common stock is listed on the New York Stock Exchange, as well as the stock exchanges in Ireland and Tokyo. In September 2008, AIG experienced a liquidity crunch when its credit ratings were downgraded below "AA" levels by Standard & Poor's, Moody's Investors Service and Fitch Ratings. On September 16, 2008, the Federal Reserve Bank created an $85 billion credit facility to enable AIG to meet increased collateral obligations consequent to the ratings downgrade, in exchange for the issuance of a stock warrant to the Fed for 79.9% of the equity of AIG. The credit facility was eventually increased to as much as $182.5 billion. AIG has sold a number of its subsidiaries and other assets to pay down loans received from the U.S. government, and continues to seek buyers of its assets. ANA VERDE: DIP Financing, Cash Collateral Use Get Interim OK ------------------------------------------------------------ Ana Verde LLC sought and obtained interim approval from the U.S. Bankruptcy Court for the District of Delaware to obtain postpetition secured financing from New Anaverde LLC and to use cash collateral. The DIP lender has committed to provide up to $250,000 upon entry of the interim order and up to $700,000 upon entry of the final court order. The attorneys for the Debtor -- Christopher P. Simon, Esq., and Kevin S. Mann, Esq., at Cross & Simon, LLC -- explained that the Debtor needs the money to fund its Chapter 11 case, pay suppliers and other parties. The Debtor will grant security interest, liens to New Anaverde to secure obligations of the Debtor under and with respect to the DIP Facility (i) a perfected lien upon the Debtor's assets, the ALM Membership Interest and the Palmdale Membership Interest subject to the lien of the Cadim Note, Inc. Loan, that is junior in priority and payment to the lien of the Cadim Loan; (ii) a first priority, perfected lien upon all of the Debtor's assets that aren't otherwise encumbered by a validly perfected lien or security interest and all of the Debtor's right, title and interest in, to and under all proceeds of avoidance actions and any rights Section 506(c) of the U.S. Bankruptcy Code; and (iii) an allowed superpriority administrative expense claim having priority over any or all administrative expenses. The DIP facility will mature on May 1, 2010. The DIP facility will incur interest at 17% per annum, compounded monthly, but not more than the maximum rate permitted under applicable law and will be capitalized and added to the principal of the loan. In the event of default, the principal of the loan and any overdue interest or other amount will bear interest at a rate of 19%, which will be capitalized and added to the principal of the loan during the period prior to the time Cadim has received an aggregate amount in respect of the Cadim loan. Anaverde Land Management, LLC, and Palmdale Land Investors, comprising the sole members of the Debtor, have agreed to provide the collateral to secure the loans under the DIP Credit Agreement. Messrs. Simon and Mann said that the Debtors will also use the cash collateral to provide additional liquidity. The Los Angeles County Treasurer and Tax Collector has filed an objection to the Debtor's request to obtain DIP financing, claiming that the Debtor has improperly classified LACCTTC's tax claim as an unsecured claim. The Debtor owes LACTTC property taxes in the amount of $389,669.53 (the Tax Claim) and $154.76 (the Unsecured Tax Claim). According to LACTTC, the Debtor didn't properly address the Tax Claim in its DIP Motion. The Court has set the final hearing for February 5, 2010, at 2:00 p.m. on the Debtor's request for DIP financing and cash collateral. LACTTC is represented by Elliott Greenleaf and Steckbauer Weinhart Jaffe, LLP. About Anaverde LLC San Francisco, California-based Anaverde LLC filed for Chapter 11 bankruptcy protection on January 15, 2010 (Bankr. D. Delaware Case No. 10-10113). Kevin Scott Mann, Esq., at Cross & Simon, LLC, assists the Company in its restructuring effort. The Company listed $10,000,001 to $50,000,000 in assets and $50,000,001 to $100,000,000 in liabilities. ANAVERDE LLC: Files Liquidation Plan & Disclosure Statement ----------------------------------------------------------- Anaverde LLC has filed a plan of liquidation and disclosure statement with the U.S. Bankruptcy Court for the District of Delaware. The Debtor doesn't anticipate that there will be any priority tax and administrative claims. The total amount of priority tax and administrative claims is estimated to be $0 as they are to be paid in the ordinary course of business. Cadim, the holder of the Class A1 Secured Claims, would accept (i) $10,125,000 of the cash proceeds from the sale transaction plus an amount equal to 12% per annum, compounded annually, on $10,125,000 from December 24, 2009, until the $10,125,000 is disbursed up to a maximum of $948,699; (ii) any outstanding unreimbursed reasonable fees and expenses of Cadim's counsel in pursuing the Plan, but in no event more than $383,000; and (iii) 25% of the cash profits from sales of land included in the project which (1) are received by New Anaverde during the two-year period immediately following consummation of the Plan, and (2) exceed the sum of (a) $26,700,000, (b) an amount equal to 12% per annum, compounded annually, on $10,125,000 from December 24, 2009, to the time the $10,125,000 payment to Cadim is made, (c) any other amounts paid to Cadim pursuant to the Plan, (d) any other amounts paid by New Anaverde in connection with the bankruptcy case, whether through the Plan, the DIP Financing or otherwise, and (e) any other out-of-pocket cost paid or investments made bya Anaverde or New Anaverde after November 30, 2009, which are related to the project. The Debtor will pay Class - 2 DIP Credit Facility Claims in cash on the effective date. The Debtor doesn't anticipate that there will be any Class 3 - Other Secured and Class 4 - Priority Claims. Each holder of an allowed priority claim will be treated as an allowed Class 5 General Unsecured Claims and be allowed to receive a pro rata share of the amount remaining of the $650,000 of the cash proceeds of the sale after the members of the convenience class have been paid and that is still available for general unsecured creditors. Holders of Class 5 - General Unsecured Claims will receive a Pro Rata share of the amount remaining of the $350,000 of the cash proceeds of the sale transaction after the members of the convenience class have been paid, which, if the Plan is confirmed, Cadim would give to the unsecured creditors from distributions otherwise owed to Cadim on account of its secured claim. Holders of Class 6 - Convenience Class Claims will receive cash equal to 50% of their claims. Member of the Convenience Class will be paid from the $350,000 cash proceeds of the sale transaction, which Cadim would otherwise have been entitled to receive on account of its secured claim, but Cadim would, if the Plan is confirmed, to give to the unsecured creditors and will be paid prior to distributing the Pro Rata shares due to the general unsecured creditors. It is estimated that holders of Class 7 - Subordinated Claims, Class 8 - Intercompany Claims, and Class 9 - Equity Interest Claims won't receive or retain any property or interest. Under a sale agreement, the Buyer of the Debtor's assets will pay, among sale transaction proceeds of an amount equal to at a minimum, but not limited to $10,475,000 million plus an amount equal to 12% per annum, compounded annually, on $10,125,000 from December 24, 2009, until the $10,125,000 is disbursed up to a maximum of $948,699 plus any outstanding unreimbursed reasonable fees and expenses of Cadim's counsel in pursuing the Plan, but in no event more than $383,000, in return for all or substantially all of the assets of the Debtor as a going concern. It is anticipated that the sale transaction proceeds received as a result of the sale transaction will be used to satisfy the allowed secured claims of Cadim and DIP Credit Facility Claims. Any remaining sale transaction proceeds will be distributed to allowed general unsecured claims. The sale agreement may also provide for the assumption of certain liabilities and/or the assumption and assignment of certain leases and contracts subject to the ability to satisfy the requirements of the Bankruptcy Code. Any remaining property of the estate will vest in the post effective date debtor. After the effective date, the plan agent will administer the Plan. Each existing member of the Board of Directors of the Debtor will resign or be deemed to have resigned and the plan agent will be deemed sole shareholder, officer and director of the post effective date debtor. Plan Objections The Los Angeles County Treasurer and Tax Collector has filed an objection to the Plan and the disclosure statement accompanying the Plan, claiming that the Debtor has improperly classified LACCTTC's tax claim as an unsecured claim. The Debtor owes LACTTC property taxes in the amount of $389,669.53 (the Tax Claim) and $154.76 (the Unsecured Tax Claim). According to LACTTC, the Debtor didn't properly address the Tax Claim in its disclosure statement, nor make provision for the payment of the tax claim in the Plan. LACTTC is represented by Elliott Greenleaf and Steckbauer Weinhart Jaffe, LLP. About Anaverde San Francisco, California-based Anaverde LLC filed for Chapter 11 bankruptcy protection on January 15, 2010 (Bankr. D. Delaware Case No. 10-10113). Kevin Scott Mann, Esq., at Cross & Simon, LLC, assists the Company in its restructuring effort. The Company listed $10,000,001 to $50,000,000 in assets and $50,000,001 to $100,000,000 in liabilities. ANGIOTECH PHARMACEUTICALS: Franklin Resources Reports 4.1% Stake ---------------------------------------------------------------- Franklin Resources, Inc.; Charles B. Johnson; and Rupert H. Johnson, Jr., disclosed that they beneficially own 3,453,577 shares or roughly 4.1% of the Common Shares, Without Par Value, of Angiotech Pharmaceuticals, Inc., as of December 31, 2009. Angiotech Pharmaceuticals, Inc. (NASDAQ: ANPI, TSX: ANP) -- http://www.angiotech.com/-- is a global specialty pharmaceutical and medical device company. Angiotech discovers, develops and markets innovative treatment solutions for diseases or complications associated with medical device implants, surgical interventions and acute injury. As of September 30, 2009, the Company's consolidated balance sheets showed $377.1 million in total assets and $680.4 million in total liabilities, resulting in a 303.3 million shareholders' deficit. Liquidity As of September 30, 2009, cash and short-term investments were $53.8 million and net debt was $521.2 million, as compared with cash and short-term investments of $39.8 million and net debt of $535.2 million as of December 31, 2008. During the three months ended September 30, 2009, operating activities provided $3.0 million, and the Company used $1.9 million to fund investing activities and $216,000 for financing activities. For the nine months ended September 30, 2009, operating activities provided $22.8 million, and the Company used $7.0 million to fund investing activities and $3.2 million for financing activities. Cash resources are used to support clinical studies, research and development initiatives, sales and marketing initiatives, working capital requirements, debt servicing requirements and for general corporate costs. Cash resources may also be used to fund acquisitions of, or investments in, businesses, products or technologies that expand, complement or are otherwise related to the Company's business. * * * As reported in the Troubled Company Reporter on October 9, 2009, Standard & Poor's Ratings Services said it raised its long-term corporate credit rating on Vancouver-based Angiotech Pharmaceuticals Inc. by two notches to 'CCC' from 'CC'. The outlook is negative. At the same time, S&P raised its rating on the company's $325 million senior unsecured notes two notches to 'CCC' (the same as the corporate credit rating on Angiotech) from 'CC'. The recovery rating on the unsecured notes is unchanged at '4', indicating S&P's expectation of average (30%-50%) recovery in a default scenario. Furthermore, S&P raised its rating on the company's $250 million senior subordinated notes to 'CC' (two notches below the corporate credit rating) from 'C'. The recovery rating on the subordinated notes is unchanged at '6', indicating S&P's expectation of negligible (0%-10%) recovery in a default scenario. Finally, S&P removed all the ratings from CreditWatch with positive implications, where they were placed June 25, 2009. APPLETON PAPERS: Moody's Affirms Corporate Family Rating at 'B2' ---------------------------------------------------------------- Moody's Investors Service affirmed the B2 corporate family rating and B2 probability of default rating of Appleton Papers, Inc., raised the company's speculative grade liquidity rating to SGL-3 from SGL-4, and changed its outlook to stable from negative. At the same time, Moody's assigned a B1 rating to Appleton's proposed $300 million senior secured first lien note issue, proceeds of which are expected to be used to retire all outstanding borrowings under its $145 million revolver and $225 million term loan. The ratings on Appleton's existing bank credit facility will be withdrawn upon the close of the transaction. Appleton's B2 corporate family rating reflects high adjusted leverage; weak cash flow generation; continued declines in the carbonless paper segment; and the lower margins associated with a migration away from the carbonless paper segment. The ratings also consider Moody's expectation for a stable pricing environment; higher sales of thermal papers as a result of ongoing capacity expansions at the company's West Carrollton, Ohio mill; and the company's strong market position within both the carbonless and thermal paper segments. The SGL rating looks ahead 12-18 months and considers internal sources of liquidity (cash on hand plus free cash flow generation), external sources of liquidity, covenant compliance, and alternate sources of liquidity. Appleton's SGL-3 rating represents adequate liquidity. The company's weak free cash flow generation and limited revolver availability are offset by the lack of restrictive maintenance covenants going forward. The SGL rating could come under pressure if Appleton were to begin generating sharply negative free cash flow. The outlook revision to stable from negative recognizes that the proposed transaction should allow Appleton the financial flexibility to navigate through a slow recovery without pressure of covenant compliance or looming debt maturities. These ratings were affected: * Corporate family rating, affirmed at B2; * Probability of default rating, affirmed at B2; * Speculative grade liquidity rating raised to SGL-3 from SGL-4; * Proposed $300 million senior secured first lien notes, B1 (LGD3, 34%) assigned; * Senior secured notes, changed to B3 (LGD4, 69%) from B3 (LGD4, 68%); * Senior unsecured notes, changed to Caa1 (LGD5, 85%) from Caa1 (LGD5, 86%); * Senior subordinated notes, affirmed at Caa1 (LGD6, 94%); * Outlook revised to stable from negative. The last rating action on Appleton occurred on September 28, 2009, when Moody's affirmed the company's corporate family rating of B2 and changed its probability of default rating to B2/LD from Caa3. Appleton Papers Inc., headquartered in Appleton, Wisconsin, develops and manufactures specialty coated paper products, including carbonless paper, thermal paper, and other specialty papers. It also develops and manufactures flexible packaging products. APPLETON PAPERS: S&P Assigns 'B+' Rating on $300 Mil. Notes ----------------------------------------------------------- Standard & Poor's Ratings Services assigned Appleton, Wisconsin- based Appleton Papers Inc.'s proposed $300 million first lien notes due 2015 its issue-level rating of 'B+' (one notch above S&P's 'B' corporate credit rating on the company). S&P assigned a '2' recovery rating to this debt, indicating its expectation of substantial (70% to 90%) recovery in the event of a payment default. At the same time, S&P affirmed all its ratings on the company, including the 'B' corporate credit rating. The rating outlook is stable. The Appleton, Wis.-based company intends to use proceeds from the proposed notes to repay outstanding amounts under its existing revolving credit and term loan facilities. In addition, it is expected that the company will replace its current $145 million revolving credit facility due 2012 with a new $100 million asset- based lending facility due in 2015, which S&P does not expect to rate. S&P will withdraw its issue-level and recovery ratings on the existing credit facilities following the successful completion of the proposed transactions. The stable rating outlook reflects S&P's expectations that the credit measures will improve over the next few quarter because of higher sales volumes as the U.S. economy recovers. S&P forecasts operating margins of around 11% and debt to EBITDA in the mid- to high-5x area over the next several quarters, which S&P thinks is in line with the 'B' rating given its weak business risk profile. In addition, S&P thinks that the company's financial flexibility will improve if the proposed financing transactions are successfully completed, through the extension of its debt maturities and elimination of maintenance financial covenants. S&P could lower the ratings if market conditions deteriorate because of a tepid recovery in the U.S. economy, or if input costs rise without corresponding sales price increases, which S&P thinks will likely prevent the sequential improvement in credit measures over the next few quarters. Specifically, a negative rating action could occur if S&P think that debt to EBITDA will exceed 6x during the intermediate term. Rating upside potential could occur if end-market demand improves considerably, resulting in higher sales volumes without any significant run-up in input costs or decline in selling prices. Then, in S&P's estimates, the company would generate EBITDA growth in the 15%-20% range and better-than-expected free cash flow, which S&P expects it would use for debt reduction. Specifically, S&P would consider a positive rating action if debt leverage were to improve and be maintained below 5x on a sustained basis. ARIZONA EQUIPMENT: Files First Amended Disclosure Statement ----------------------------------------------------------- Arizona Equipment Rental I, LLC, filed with the U.S. Bankruptcy Court for the District of Texas an amended disclosure statement in support of its proposed plan of reorganization. The Hon. Eileen W. Hollowell, after reviewing the original Disclosure Statement, concluded that the document does not comply with the guidelines set forth in In re A.C. Williams Co., 25 B.R. 173, 176 (Bankr. N.D. Ohio 1982.) The Court will review the red-lined copy of the Amended Disclosure Statement and, if the changes are deemed adequate, the Court will notify counsel for the Debtor to submit an order approving the Amended Disclosure Statement and setting the matter for confirmation. Tucson, Arizona-based Arizona Equipment Rental I, LLC, was founded by Lance Evic and Jeffrey Bleecker in 2004 as a Volvo Rents franchise construction equipment rental company serving Arizona. AER is headquartered in Tucson, Arizona, and currently employs approximately 30 employees. The business however has been hit by the slow down in the construction and mining industy. The Company filed for Chapter 11 bankruptcy protection on October 30, 2009 (Bankr. D. Ariz. Case No. 09-27946). The Company listed $10,000,001 to $50,000,000 in assets and $10,000,001 to $50,000,000 in liabilities. ASSOCIATED BANC-CORP: Capital Actions Help Stabilize Fitch Ratings ------------------------------------------------------------------ Fitch Ratings has reviewed recent actions taken by Associated Banc-Corp (rated 'BB+/B' with a Negative Rating Outlook by Fitch), holding company of Associated Bank, National Association (rated 'BBB-/F3, Rating Outlook Negative by Fitch). Fitch is encouraged by steps taken by senior management to bolster capital and the loan loss reserve. ASBC has also conducted a credit review of its loan book which Fitch believes has resulted in more timely recognition of credit losses and problem assets in the current credit environment. ASBC issued $500 million in common stock in January 2010 and cut its quarterly common dividend to one cent per share. The reduction in the dividend represents annual savings of $20.5 million. Depending on future levels of liquid assets maintained at the holding company, Fitch views the capital actions as helping stabilize the holding company's ratings in particular given the bank's higher capital requirements imposed by regulators and high credit costs and $200 million in holding company subordinated debt maturing in August 2011. The company's $173 million net loss for the fourth quarter of 2009 (prior to preferred dividends) reflected $395 million in provision expense. Net charge-offs were $234 million (6.35% of average loans) and the loan loss reserve increased to 4.06% of loans. ASBC's credit losses and nonperforming loans increased in the commercial real estate and construction loan categories in particular. Fitch does expect credit costs and problem asset levels to remain elevated in the near term and will continue to assess the extent to which elevated credit costs erode current capital levels. Fitch's internal stress testing of ASBC's commercial real estate loan book with the addition of the recently issued common equity results in a tangible common equity to tangible assets ratio that is fairly consistent with the current ratings. B&G FOODS: Unveils Initial Results of Tender Offer -------------------------------------------------- B&G Foods, Inc., has received and accepted for purchase approximately $238.9 million aggregate principal amount of its outstanding 8% senior notes due 2011 (CUSIP No. 05508R AC 0) and approximately $44.7 million aggregate principal amount of its outstanding 12% senior subordinated notes due 2016 (CUSIP No. 05508R AB 2) validly tendered by 5:00 p.m., New York City time, on January 22, 2010, which was the deadline for holders to submit tenders in order to receive the consent payments in connection with the tender offers. B&G Foods has received consents from holders of approximately 99.5% of the Senior Notes and approximately 64.3% of the Senior Subordinated Notes as of the consent payment deadline. The consents are sufficient to effect the proposed amendments to the indenture governing the Senior Notes and the indenture governing the Senior Subordinated Notes as set forth in B&G Foods' Offer to Purchase and Consent Solicitation Statement dated January 8, 2010, and the related Letter of Transmittal and Consent, pursuant to which the tender offers and the consent solicitations are being made. The proposed amendments eliminate substantially all of the restrictive covenants and certain default provisions contained in each indenture. B&G Foods has executed a supplemental indenture for each series of notes effecting the proposed amendments to the indentures. The supplemental indentures are binding on the holders of notes not purchased in the tender offers. B&G Foods also announced that it is revising the terms of its tender offers such that holders who tender their notes after the date hereof and prior to the expiration of the tender offer at 11:59 p.m., New York City time, on February 5, 2010 (unless extended or earlier terminated by the Company) will receive a tender offer consideration of $1,020 for every $1,000 principal amount of Senior Notes tendered, and a tender offer consideration of $3.303544 for every $3.116551 principal amount of Senior Subordinated Notes tendered, plus, in each case, accrued and unpaid interest to, but excluding, the tender offer payment date. As set forth in the Tender Offer Documents, Senior Notes and Senior Subordinated Notes validly tendered may no longer be withdrawn. B&G Foods is simultaneously announcing that it is irrevocably calling for redemption on February 25, 2010, all Senior Notes and Senior Subordinated Notes that remain outstanding after the expiration of the tender offer, at the redemption price of $1,020 for every $1,000 principal amount of Senior Notes redeemed and at the redemption price of $3.303544 for every $3.116551 principal amount of Senior Subordinated Notes redeemed, plus, in each case, accrued and unpaid interest to, but excluding the redemption date. Notices of Redemption are being mailed by The Bank of New York Mellon, the trustee for each series of notes, to the registered holder of such notes. Copies of the Notices of Redemption and additional information relating to the procedure for redemption may be obtained by contacting The Bank of New York Mellon at 1.800.254.2826. Credit Suisse Securities (USA) LLC is acting as Dealer Manager and Solicitation Agent for the tender offers and consent solicitations. Questions regarding the tender offers or consent solicitations may be directed to Credit Suisse at (212) 325-5912 (collect) or (800) 820-1653 (toll-free). Requests for copies of the Tender Offer Documents may be directed to D. F. King & Co., Inc. at (212) 269-5550 (collect) or (800) 859-8511 (toll-free). Beneficial owners also may contact their broker, dealer, commercial bank, trust company or other nominee for assistance concerning the tender offers and the consent solicitation. About B&G Foods, Inc. B&G Foods, Inc. -- http://www.bgfoods.com/-- manufactures, sells and distributes a diverse portfolio of shelf-stable food products across the United States, Canada and Puerto Rico. The Company's products include hot cereals, fruit spreads, canned meats and beans, spices, seasonings, marinades, hot sauces, wine vinegar, maple syrup, molasses, salad dressings, Mexican-style sauces, taco shells and kits, salsas, pickles, peppers and other specialty food products. It distributes these products throughout the United States via a nationwide network of independent brokers and distributors to supermarket chains, food service outlets, mass merchants, warehouse clubs, non-food outlets and specialty food distributors. * * * As reported by the Troubled Company Reporter, on Jan. 11, 2010, Standard & Poor's Rating Services assigned its issue-level and recovery ratings to B&G Foods Inc.'s proposed $350 million senior unsecured notes due 2018. S&P assigned a 'B+' issue rating (the same as the corporate credit rating on the company) to the notes, and assigned a recovery rating of '4' (indicating S&P's expectation of average (30%-50%) recovery in the event of a payment default). B&G will use the proceeds from the notes offering to repay the company's existing senior notes due 2011 and senior subordinated notes due 2016. S&P estimates that the Parsippany, New Jersey-based B&G Foods currently has about $440 million of debt outstanding. The outlook on the 'B+' corporate credit rating is stable. BH S&B HOLDINGS: Guippone Deadline for Claims Moved to March 27 --------------------------------------------------------------- BH S&B Holdings LLC and its debtor-affiliates entered into a stipulation and sixth agreed order with Michael Guippone, extending the bar date for any claims related to an adversary proceeding between the two of them until March 27, 2010. BH S&B Holdings LLC filed for bankruptcy protection together with seven other affiliates on November 19, 2008 (Bankr. S.D.N.Y. Lead Case No. 08-14604). The seven debtor-affiliates are BH S&B Distribution LLC, BH S&B Lico LLC, BH S&B Retail LLC, BHY S&B Intermediate Holdco LLC, Cubicle Licensing LLC, Fashion Plate Licensing LLC, and Heritage Licensing LLC. BH S&B was formed by investment firms Bay Harbour Management and York Capital Management in August 2008 to acquire the business operations and assets of bankrupt retailer Steve & Barry's for $163 million in August 2008. Steve & Barry's had 240 locations when it was bought and the new owners had planned to cut that down to 173 stores. Due to disappointing sales, Steve & Barry's returned to bankruptcy in November 2008. BH S&B and its affiliates' Chapter 11 cases are presided over by the Honorable Martin Glenn. Joel H. Levitin, Esq., and Richard A. Stieglitz, Jr., Esq., at Cahill Gordon & Reindel LLP, in New York, serve as bankruptcy counsel to BH S&B and its affiliates. RAS Management Advisors LLC acts as restructuring advisors, and Kurtzman Carson Consultants LLC as claims and notice agent. BIG WEST: Moody's Assigns Corporate Family Rating at 'B2' --------------------------------------------------------- Moody's Investors Service assigned a B2 Corporate Family Rating and B2 Probability of Default Rating to Big West Oil, LLC as well as a B2 (LGD 3; 47%) rating to its $360 million 5 year senior first secured Term Loan. The rating outlook is stable. The Term Loan has a first lien primarily on BWO's Salt Lake City 30,000 barrels per day refinery and a second lien on its accounts receivable and crude oil and refined product inventories. A $75 million 3 year borrowing base bank revolver (unrated) will have a first lien on BWO's accounts receivable and inventories and a second lien on the refinery. Term Loan proceeds will primarily repay a majority of BWO's pre- bankruptcy obligations, with its remaining pre-bankruptcy obligations being repaid with cash on hand and cash down-streamed from BWO's parent (Flying J Inc. or FJI). Since filing for bankruptcy on December 22, 2008, FJI sold its Longhorn Pipeline and a small exploration and production business. It also announced the pending sale of its large Flying J gasoline and diesel travel plaza retail network to Pilot Travel Centers LLC for cash and a minority interest in new Pilot. By repaying pre- bankruptcy creditors in full, FJI would retain sole ownership of BWO. BWO believes it will retain a contractual right to supply both FJI's former retail network and Pilot's travel plazas located within BWO's marketing region. The B2 CFR is supported by BWO's long history of profitable Salt Lake City refinery operations and comparatively attractive gross refining margins in particular due to the strong regional niche in which it operates. Salt Lake City refiners benefit from the effectively captive markets faced by the region's black and yellow wax crude oil producers and by general regional oversupply of medium and light crude oils, including Wyoming condensate production. Furthermore, the Salt Lake market is logistically remote from large competing refiners and pipeline capacity to feed competing products into BWO's marketing region is also comparatively scarce. Gasoline and especially diesel sell at significant regional premiums compared to Gulf Coast prices. However, the combination of inherent margin volatility, single stand-alone refinery risk, high leverage and a weak sector outlook restrain the ratings. BWO will carry the highest leverage on installed capacity of all Moody's rated refiners and it has limited diversification of key refining business risks. Though its niche margins generate above average earnings for a refiner of its size, until scheduled and cash sweep debt amortization reduce leverage by approximately 30% to 50% BWO is unlikely to be considered for an upgrade. BWO also has no diversification of unscheduled downtime risk. With one operating refinery, BWO is directly exposed to the common sector risk of unscheduled refining downtime. The loss of cash flow from material unplanned refinery downtime would have significant negative impact on debt service capacity since the refinery is BWO's only source of operating cash flow. Furthermore, the refining sector will likely continue to labor under excess supply conditions for several years. While this would restrain BWO's margins, the BWO's Salt Lake City market niche should significantly dampen the impact on its margins. The 2010 completion by a competitor of a new refined product pipeline from Salt Lake City to Las Vegas is likely to further improve market tone for the five refineries operating in Salt Lake City. With one small 30,000 bpd refinery, BWO is the smallest of Moody's rated North American refiners. The next largest rated refiner is nearly double BWO's capacity. However, BWO's North Salt Lake City refinery has been one of the more profitable refineries amongst Moody's rated North American refining peer group. BWO's larger but less sophisticated and poorly supplied Bakersfield refinery is problematic under expected market conditions. It was shutdown upon BWO's bankruptcy and is for sale. Leverage on capacity is very high. Assuming BWO emerges from bankruptcy at the expected leverage, the anticipated capital structure would have Debt / Complexity Barrels of over $1,200 per complexity barrel. However, the company gains ratings support from cash flow and earnings based metrics. EBIT/Throughput Barrels is strong, with EBIT / Interest Expense lean at a 2x to 3x range but nevertheless benefiting from BWO's comparatively high margins per throughput barrel. BWO will have modest liquidity based on the proposed capital structure. This would include a minimal cash balance and an un- drawn $75 million working capital secured revolver. BWO has consistently generated significantly over $100 million in EBITDA per year, 2010 capital spending is currently planned to not to exceed $10 million, and scheduled amortization is $6 million per quarter. While there will be a cash sweep of 50% to 75% of excess cash flow, both the range of the cash sweep and the definition of excess cash flow have not been finalized. Moody's expect the historic pattern of large cash distributions to resume to the extent permitted under the loan agreements. The last rating action for BWO was on December 22, 2008, when Moody's downgraded BWO's Corporate Family Rating to Caa3 from B1, its Probability of Default Rating to D from B1, and the rating on its delayed draw $400 million 7 year senior first secured Term Loan B (TLB) to Caa3 from B1. BWO's ratings were subsequently withdrawn. Big West Oil., LLC, and its parent Flying J, Inc., are headquartered in Ogden, Utah. BIGLER LP: Files Schedules of Assets and Liabilities ---------------------------------------------------- Bigler LP filed with the U.S. Bankruptcy Court for the Southern District of Texas its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $0 B. Personal Property $184,644,992 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $46,843,243 E. Creditors Holding Unsecured Priority Claims $4,926 F. Creditors Holding Unsecured Non-priority Claims $61,007,120 ----------- ----------- TOTAL $184,644,992 $107,855,289 Houston-based Bigler LP is a diversified petrochemical producer. Bigler has production and storage facilities on 271 acres on the Houston Ship Channel. Bigler filed for Chapter 11 reorganization on Oct. 30 in Houston (Bankr S.D. Tex. Case No. 09-38188). The petition listed assets of $233 million against debt totaling $151 million. Liabilities include $67 million owed to secured lender Amegy Bank NA, which has a lien on all assets. Attorneys at King & Spalding LLP represent the Debtors. Secured lender Amegy Bank is represented by Porter & Hedges LLP. BIGLER LP: U.S. Trustee Sets Meeting of Creditors for February 11 ----------------------------------------------------------------- The U.S. Trustee for Region 7 will convene a meeting of creditors in Bigler LP and its debtor-affiliates' Chapter 11 cases on February 11, 2010, at 10:00 a.m. The meeting will be held at Suite 3401, 515 Rusk Ave, Houston, Texas. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Houston-based Bigler LP is a diversified petrochemical producer. Bigler has production and storage facilities on 271 acres on the Houston Ship Channel. Bigler filed for Chapter 11 reorganization on Oct. 30 in Houston (Bankr S.D. Tex. Case No. 09-38188). The petition listed assets of $233 million against debt totaling $151 million. Liabilities include $67 million owed to secured lender Amegy Bank NA, which has a lien on all assets. Attorneys at King & Spalding LLP represent the Debtors. Secured lender Amegy Bank is represented by Porter & Hedges LLP. BLACK CROW MEDIA: Wants DIP Financing & Cash Collateral Use ----------------------------------------------------------- Black Crow Media Group, LLC and its debtor-affiliates have sought authorization from the U.S. Bankruptcy Court for the Middle District of Florida to obtain postpetition secured financing from Paul C. Stone and to use cash collateral. The DIP lender has committed to provide up to $$1,500,000. The attorneys for the Debtors -- R. Scott Shuker, Esq., at Latham, Shuker, Eden & Beaudine, LLP, and H. Jason Gold, Esq., et al., at Wiley Rein LLP -- explain that the Debtors need the money to fund their Chapter 11 case, pay suppliers and other parties. The DIP facility will mature one year from the petition date. The DIP facility will incur interest at 12% per annum. In the event of default, the Debtors will pay an additional 2% default interest per annum. The Debtors' obligations under the DIP facility will be secured by postpetition cash and accounts receivable, and the proceeds therefrom, generated from the Debtors' business operations following the Closing Date. As set forth in the credit agreement, J. Michael Linn, the Debtors' President and CEO, has agreed to provide the DIP Lender, as additional collateral for the DIP Loan, a mortgage on a condominium located in Daytona Beach, Florida, which is owned by Mr. Linn. As adequate protection, the Debtors will grant the DIP Lender a first priority lien on all of the Debtors' cash and accounts receivables generated subsequent to the closing date and a superpriority administrative expense claim. The lien will be subordinate to payment of up to $100,000 of these expenses: (i) fees required to be paid to the Office of the U.S. Trustee; and (ii) fees and expenses incurred by the Debtors and the official committee of unsecured creditors, if any, in connection with compensation for services rendered or reimbursement of expenses allowed by the Court to the Debtors' or the Committee's professionals. Messrs. Shuker and Gold say that the Debtors will also use the cash collateral to provide additional liquidity. About Black Crow Media Daytona Beach, Florida-based Black Crow Media Group, LLC, owns and operates 17 FM and 5 AM radio stations in Daytona Beach, Live Oak, Valdosta, Huntsville, Alabama, and Jackson, Tennessee. The Company filed for Chapter 11 bankruptcy protection on January 11, 2010 (Bankr. M.D. Fla. Case No. 10-00172). The Company's affiliates -- Black Crow Media, LLC, et al. -- also filed separate Chapter 11 petitions. Mariane L. Dorris, Esq., and R Scott Shuker, Esq., at Latham Shuker Eden & Beaudine LLP, assist the Company in its restructuring effort. The Company listed $10,000,001 to $50,000,000 in assets and $50,000,001 to $100,000,000 in liabilities. BLUE HERON: U.S. Trustee Appoints 7-Member Creditors Committee -------------------------------------------------------------- Robert D. Miller Jr., Acting U.S. Trustee for Region 18, appointed seven members to the official committee of unsecured creditors in the Chapter 11 case of Blue Heron Paper Company. The Creditors Committee members are: (1) Weyerhaeuser NR Company Linda Fornero, Credit Mgr. CH2E30 PO Box 9777 Federal Way, WA 98063 Chair Tel: (253) 924-7176 Fax: (253) 928-2197 E-mail: linda.fornero@weyerhaeuser.com (2) Metro Waste Paper Recovery, Inc. Ken Rasmussen, Manager 12345 104 Ave. Surrey, BC V3V3H2 Tel: (604) 580-3070 Fax: (604) 930-9170 E-mail: krasmussen@metrowaste.com (3) Ashland, Inc. Terry Nicholson, Credit Manager NA 5200 Blazer Parkway Dublin, OH 43017 Tel: (614) 790-3009 Fax: (614) 790-4054 E-mail: tnicholson@ashland.com (4) Nationwide Magazine Recycling, Inc. Roy Threlkeld, President 2300 Apollo Circle Carrollton, TX 75006 Tel: (972) 416-9599 Fax: (972) 417-3803 E-mail: royt@nwmri.com (5) National Fiber Supply Michael R. Riley 303 W. Madison St. Chicago, IL 60603 Tel: (312) 346-4800 ext. 1310 Fax: (312) 726-0371 E-mail: michael.r.riley@nationalfibersupply.com (6) Demitrakikes Trucking, Inc. Denise Thornton, President PO Box 381 Canby, OR 97013 Tel: (503) 266-9265 Fax: (503) 263-6082 E-mail: demitrakikes@gmail.com (7) Pacific Fibre Products Don Lightfoot, Controller PO Box 278 Longview, WA 98632 Tel: (360) 577-7112 Fax: (360) 577-1363 E-mail: llemmons@pacfibre.com About Blue Heron Oregon City, Oregon-based Blue Heron Paper Company filed for Chapter 11 bankruptcy protection on December 31, 2009 (Bankr. D. Ore. Case No. 09-40921). Brandy A. Sargent, Esq., and Robert J. Vanden Bos, Esq., who have offices in Portland, Oregon, assist 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. BLUE HERON: Section 341(a) Meeting Set at U.S. Trustee's Office --------------------------------------------------------------- The U.S. Trustee for Region 18 will convene a meeting of Blue Heron Paper Company's creditors on February 2, 2010, at 1:30 p.m. at the U.S. Trustee's Office, 620 SW Main Street, Room 223, Portland, Oregon. The meeting will not be held at Multnomah County Courthouse. 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. Oregon City, Oregon-based Blue Heron Paper Company filed for Chapter 11 bankruptcy protection on December 31, 2009 (Bankr. D. Ore. Case No. 09-40921). Brandy A. Sargent, Esq., and Robert J. Vanden Bos, Esq., who have offices in Portland, Oregon, assist 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. BRIDGEVIEW AEROSOL: Has Until July 8 to File Chapter 11 Plan ------------------------------------------------------------ The U.S. Bankruptcy Court for the Northern District of Illinois ordered Bridgeview Aerosol, LLC, et al., to file a Chapter 11 Plan and its accompanying Disclosure Statement by July 8, 2010. Bridgeview, Illinois-based Bridgeview Aerosol, LLC, is in the custom aerosol specialty products industry. BVA provides a wide array of services relating to aerosol products including initial product formulation, testing, manufacturing, packaging and distribution. BVA primarily manufactures, packages and distributes household cleaning and automotive products. Affiliate AeroNuevo owns the real property on which BVA operates. USAerosols is the parent company of BVA and AeroNuevo. Bridgeview Aerosol filed for Chapter 11 bankruptcy protection on October 30, 2009 (Bankr. N.D. Ill. Case No. 09-41021). Steven B. Towbin, Esq., at Shaw Gussis et al assists the Company in its restructuring efforts. The Company listed $10,000,001 to $50,000,000 in assets and $10,000,001 to $50,000,000 in liabilities. BRIDGEVIEW AEROSOL: Court Sets March 15 as General Bar Date ----------------------------------------------------------- The Hon. Pamela S. Hollis U.S. Bankruptcy Court for the Northern District of Illinois has established March 15, 2010, as the last day for any individual or entity to file proofs of claim against Bridgeview Aerosol, LLC, and its debtor-affiliates. The Court also fixed April 20, 2010, as the governmental bar date. All proofs of claim must be filed with the Clerk of the U.S. Bankruptcy Court for the Northern District of Illinois, eastern Division. Bridgeview, Illinois-based Bridgeview Aerosol, LLC is in the custom aerosol specialty products industry. BVA provides a wide array of services relating to aerosol products including initial product formulation, testing, manufacturing, packaging and distribution. BVA primarily manufactures, packages and distributes household cleaning and automotive products. Affiliate AeroNuevo owns the real property on which BVA operates. USAerosols is the parent company of BVA and AeroNuevo. Bridgeview Aerosol filed for Chapter 11 bankruptcy protection on October 30, 2009 (Bankr. N.D. Ill. Case No. 09-41021). Steven B. Towbin, Esq., at Shaw Gussis et al assists the Company in its restructuring efforts. The Company listed $10,000,001 to $50,000,000 in assets and $10,000,001 to $50,000,000 in liabilities. BROADLANE INC: S&P Affirms 'B+' Corporate Credit Rating ------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B+' corporate credit rating on Dallas-based group purchasing organization Broadlane Inc. At the same time, S&P assigned a 'BB-' issue-level and '2' recovery rating to Broadlane's proposed $195 million senior secured credit facility. S&P will withdraw the ratings on the existing senior secured credit facility upon close of the transaction; S&P does not rate the subordinated notes. The outlook remains stable. The rating on Broadlane reflects its position as a relatively small player in the concentrated GPO industry, the concentration within its relatively limited revenue base, and its high financial leverage. Broadlane's weak business risk profile primarily reflects its position as a relatively small player in the highly consolidated GPO industry, and its concentrated revenue base. In the GPO industry, the top six GPOs control about 89% of the market. With more than $10 billion in annual contract spending, Broadlane is the fourth-largest GPO behind Novation, Premier, and Consorta/HealthTrust. Given Broadlane's relatively low profile in the field, the company remains susceptible to competition from larger GPOs Novation and Premier, which control more than one-half of the GPO market. In addition, the company could find it difficult to expand and diversify a limited revenue base that depends on its two largest contracts for more than 30% of its business. Given its concentration of revenue and its limited revenue base, should one of those contracts not renew, the resulting revenue loss would particularly affect Broadlane, which would then result in margin compression and reduced cash flows. The company receives 93% of its revenues from its supply chain management business, which includes its GPO business. Broadlane's largest business continues to see growth in this sluggish economy, aided by client efforts to reduce supply chain costs. The remaining 7% of revenues comes from its workforce management business, which has seen a decline in demand as lower admissions and an increase in full-time staffing reduced the need for temporary employees. Broadlane receives administrative fees of up to 3% from the manufacturers of health care products and supplies sold to its hospital and other health care-provider clients. Customers enter into exclusive three- to five-year contracts with the company, and Broadlane has retained 95% of its customers since 1999. The company's emphasis on customer compliance, rather than total spending, to deliver GPO contract savings, is a key aspect of its marketing emphasis. Despite a reduction of about one turn over the past year, Broadlane's highly leveraged financial risk profile reflects projected 2009 operating lease- and preferred stock-adjusted debt to EBITDA of 7.4x. Standard & Poor's treats the sponsor-held preferred stock, which S&P view as having the potential to be recapitalized by borrowings, as debt. BRUNO GRELA-MPOKO: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Bruno Grela-Mpoko P.O. Box 2949 Montgomery Village, MD 20886 Bankruptcy Case No.: 10-11581 Chapter 11 Petition Date: January 25, 2010 Court: United States Bankruptcy Court District of Maryland (Greenbelt) Judge: Thomas J. Catliota Debtor's Counsel: Richard B. Rosenblatt, Esq. The Law Offices of Richard B. Rosenblatt 30 Courthouse Square, Ste. 302 Rockville, MD 20850 Tel: (301) 838-0098 Email: rrosenblatt@rosenblattlaw.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/mdb10-11581.pdf The petition was signed by Bruno Grela-Mpoko. BUILDERS FIRSTSOURCE: S&P Drops Corpore to 'SD' on Debt Exchange ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on Builders FirstSource Inc., a manufacturer and supplier of building products for new residential construction, to 'SD' from 'CC'. S&P also lowered its issue-level rating on the company's second-lien notes due 2012 to 'D' from 'C'. The recovery rating on these notes remains at '5', indicating S&P's expectation of modest (10% to 30%) recovery in the event of a payment default. These rating actions follow the company's announcement that it completed its common stock rights offering and debt exchange of its outstanding second-lien notes due 2012 for new second-lien notes due 2016. "Standard & Poor's views the exchange as tantamount to default given the company's stressed and highly leveraged financial risk profile and S&P's concerns about the company's ability to service its capital structure over the medium term in light of still weak residential construction markets," said Standard & Poor's credit analyst Andy Sookram. S&P expects to raise its corporate credit rating on Builders FirstSource to 'CCC+' with a positive outlook in the near future. The new rating will reflect S&P's expectation that the company's liquidity should remain be sufficient over the 12 months to meet operating, capital, and debt service requirements, and its expectation that the company's credit measures will likely improve given its expectation for a gradual recovery in the new residential construction market. The anticipated 'CCC+' rating will incorporate the company's new capital structure, which reflects improved financial flexibility through higher cash, lower debt, and extended maturities. BUILDING MATERIALS: S&P Raises Corporate Credit Rating to 'BB+' --------------------------------------------------------------- Standard & Poor's Ratings Services said that it raised its ratings on Wayne, New Jersey-based Building Materials Corp of America. S&P raised the corporate credit rating to 'BB+' from 'BB-'. At the same time, S&P raised the issue-level ratings on the company's $975 million term loan and $250 million senior secured notes to 'BBB-' from 'BB', both with a recovery rating of '2', indicating that investors can expect to achieve substantial recovery (70% to 90%) in the event of a payment default. Finally, S&P removed all ratings from CreditWatch, where they were placed with positive implications on Dec. 15, 2009. The outlook is stable. "The upgrade recognizes the greater-than-expected progress BMCA has made in strengthening its credit measures as a result of recent strong profitability and a lower debt burden, and S&P's belief that this new level of performance should be sustainable over the next few years," said Standard & Poor's credit analyst Thomas Nadramia. The ratings reflect BMCA's well-established No. 1 market position in U.S. asphalt roofing shingles, attractive operating margins, good geographic sales diversity within the U.S., and relatively stable demand that supports a fair business risk profile. CALIFORNIA HOUSING: Moody's Cuts Rating on Insurance Fund to 'B2' ----------------------------------------------------------------- Moody's Investors Service has downgraded the rating of the California Housing Loan Insurance Fund to B2 from Aa3. The rating remains under review for further possible downgrade. The action is based upon the sharp decline in the performance of the single family mortgage portfolio insured by CalHLIF and the expectation that the claims that the fund will pay on the loans which are currently delinquent will substantially erode its capital position. The downgrade also reflects the reduction in support for CalHLIF from the California Housing Finance Agency (the Agency), which in 2009 reduced a line of credit it had made available to the fund to $10 million from $100 million. The B2 rating is an Issuer rating and there is no debt affected by this action. Moody's rating review will take into account many factors including the projections of future claims on the fund, the financial position of the fund including its current and projected capital positions, the expected future coverage from the reinsurance agreement with Genworth and any expectations or indication of additional support from the Agency or the state going forward. CalHLIF Overview: CalHLIF is a separately capitalized fund administered by the Agency. As of 9/30/09, CAlHLIF had assets of $72 million, including cash and investments of $70 million. Liabilities of $60 million consisted primarily of $56 million in insurance loss reserves. Insurance in force was approximately $2.9 billion. CalHLIF benefits from a 75% quota share reinsurance agreement with Genworth Mortgage Insurance Corporation (rated Baa2 developing). The majority of CalHLIF's insurance is for the benefit of single family loans financed by the Agency's Home Mortgage Revenue Bond program. Recent Developments: Reduced Support from Agency: The Agency had until mid-2009 provided material support for CaHLIF's primary mortgage insurance obligations from their own balance sheet in the form of a line of credit that had been maintained at $100 million. As a result of this support as well as the aligned interest of the Agency and the fund, Moody's viewed the financial strength of the Agency as a critical component in its assessment of the fund. In 2009, the Agency significantly reduced the support provided to the fund by reducing the line of credit to $10 million. As a result of the change in support provided by the Agency to the claims paying ability of the fund is now limited to assets of the Fund in the face of sharply rising delinquencies and foreclosures on the portfolio of loans it insures. Sharply Declining Loan Portfolio Performance: The performance of the loan portfolio insured by CalHLIF has declined significantly since Moody's last review of the fund and the Agency in July 2009.The percentage of loans which were 90+ days delinquent (including loans in foreclosure) as of October 31, 2009 was equal to 15.5% representing a 70% increase in loans 90+ days delinquent from March 31, 2009, when the rate was equal to 9.1%. In addition, another 3.7% and 2.6% of insured loans were 30 and 60 days delinquent, respectively. Based on prior trends Moody's anticipate that many of these loans will season into seriously delinquent loans and foreclosures which CalHLIF will have to pay claims on. Furthermore, Moody's expect that the portfolio insured by CalHLIF will continue to experience increasing delinquencies over the near term. Nearly half of the loans insured by CalHLIF for the Agency are comprised of "Interest Only" loans which are fixed coupon loans that are interest-only for five years and then amortize over thirty years. Moody's expect that the delinquencies on this type of loan will continue to rise given that these loans are still in interest-only mode and are already experiencing very high delinquency rates with 20.3% 90+ days delinquent as of October 31, 2009. The Agency started making these loans over the last few years, and the first loans commence amortization in 2010, Projected Claim Payments Expected to Substantially Erode CalHLIF's Capital: Based on the current level of delinquent loans, Moody's project that CalHLIF could pay claims (after receiving 75% reinsurance from Genworth) on these loans in excess of $50 million. This would reduce the amount of capital available to pay future claims to approximately $20 million in cash and investments held by the fund plus the $10 million line of credit from the Agency. Moody's review will incorporate the extent to which the remaining available capital will be able to cover Moody's expectations of future claim payments. Rating Methodologies Used & Last Rating Action: The California Housing Loan Insurance Fund's issuer rating was assigned by evaluating factors believed to be relevant to the credit profile of the instrument such as i) the business risk and competitive position of the issuer versus others within its industry or sector, ii) the capital structure and financial risk of the issuer, iii) the projected performance of the issuer over the near to intermediate term, and iv) the issuer's performance and financial history. The last rating action was on the rating on the California Housing Loan Insurance Fund was on November 15, 2003, when a stable outlook was assigned to the Aa3 rating. CANWEST GLOBAL: CCAA Stay Period Extended Until March 31 -------------------------------------------------------- Canwest Global Communications Corp. announced that the Ontario Superior Court of Justice (Commercial Division) has granted the request by Canwest, Canwest Media Inc. and certain of its subsidiaries for an extension of the Stay Period granted under the Companies' Creditors Arrangement Act to March 31, 2010. In its Initial Order obtained on October 6, 2009, the Court provided a 30 day Stay Period which was subsequently extended to January 22, 2010. About Canwest Global Canwest Global Communications Corp. (TSX: CGS and CGS.A) -- http://www.canwest.com/-- an international media company, is Canada's largest media company. In addition to owning the Global Television Network, Canwest is Canada's largest publisher of English language daily newspapers and owns, operates and holds substantial interests in conventional television, out-of-home advertising, specialty cable channels, web sites and radio stations and networks in Canada, New Zealand, Australia, Turkey, Indonesia, Singapore, the United Kingdom and the United States. On October 6, 2009, Canwest Global, Canwest Media Inc., Canwest Television Limited Partnership (including Global Television, MovieTime, DejaView and Fox Sports World), The National Post Company and certain subsidiaries voluntarily entered into, and successfully obtained an Order from the Ontario Superior Court of Justice (Commercial Division) commencing proceedings under the Companies' Creditors Arrangement Act. The CMI Entities' commencement of these proceedings was undertaken in furtherance of a proposed recapitalization transaction that is supported by over 70% of holders of the 8% senior subordinated notes issued by CMI. On the same day, FTI Consulting Canada Inc., the Court-appointed Monitor in the CCAA proceedings, sought protection in the United States Bankruptcy Court under Chapter 15 of the United States Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No. 09-15994) for certain of the entities involved in Canwest's television business that filed for protection under the CCAA, including Canwest, Canwest Media Inc. and Canwest Global Broadcasting Inc./Radiodiffusion Canwest Global Inc. Judge Stuart M. Bernstein presides over the Chapter 15 cases. Evan D. Flaschen, Esq., at Bracewell & Giuliani LLP, in Hartford, Connecticut, serves as Chapter 15 Petitioner's counsel. The Chapter 15 Debtors disclosed estimated assets of $500 million to $1 billion and estimated debts of $50 million to $100 million. In a regulatory filing with the U.S. Securities and Exchange Commission, Canwest Media disclosed C$4,847,020,000 in total assets and C$5,826,522,000 in total liabilities at May 31, 2009. Bankruptcy Creditors' Service, Inc., publishes Canwest Bankruptcy News. The newsletter tracks the CCAA proceedings and Chapter 15 proceedings undertaken by Canwest Global Communications Corp. and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000). CANWEST GLOBAL: Doesn't Want to Sell Assets in Parts ---------------------------------------------------- Jerry Grafstein, a retired senator in Canada, told Bloomberg News in an interview that his team plans to bid for the National Post, Montreal Gazette and Ottawa Citizen, three daily newspapers owned by Canwest Global Communications Corp. Bloomberg's Doug Alexander says Mr. Grafstein's investor group includes Quebec editor Beryl Wajsman and media consultant Raymond Heard. Ontario Superior Court Judge Sarah Pepall has approved a sale process for Canwest's publications. Bloomberg notes the court- appointed monitor overseeing the sale will only consider bids for all or "substantially all" of the assets. "If the courts say no, the courts say no," Mr. Grafstein told Bloomberg. "But the courts will be looking at everything and see what's valuable and what's not." Mr. Grafstein told Bloomberg his group is preparing an application to review Canwest's finances, the first step in making a bid. Mr. Grafstein said they have "very strong financial support." Mr. Grafstein, however, declined to name the investors. "I believe that there's a future for newspapers if they have strong roots in each of their communities and they're locally owned and controlled and they can marry it with the Internet," Mr. Grafstein, 75, who retired from the Senate this month, told Bloomberg. Canwest Doesn't Want Piecemeal Bids Bidders are lining up to buy parts of the newspaper chain owned by CanWest Global Communications Corp., but the piecemeal offers are being dismissed as the company holds out for a single buyer, The Globe and Mail reported. The report says CanWest officials said the company and its creditors have little interest in pursuing partial bids for the newspaper assets, which include 10 large city newspapers and 35 community and weekly publications across Canada. Bank of Nova Scotia, which is leading a group of banks owed about $935-million, has said it will take ownership of the assets if a sale to a sole buyer does not recoup that amount, note the report. The newspapers would then be sold on the stock market in an initial public offering. "We do have a concrete bid for the entire entity," The Globe and Mail quoted CanWest spokesman John Douglas as saying, referring to the $935-million the banks would acquire the papers for. Any bid would not be accepted unless it trumps that number, and small bidders are likely to make it worth the creditors' while to break up the assets, the report adds. According to The Globe and Mail, splintering up the newspaper empire would allow buyers to cherry-pick the best publications, while leaving less-profitable ones stranded and difficult to sell. "While CanWest said it is impossible for any single small bidder to trump the Scotiabank offer with a partial bid, it is possible for several bidders to team up in a consortium that could make an offer in tandem and come up with the $1-billion necessary to win the newspapers," reports Grant Robinson of The Globe and Mail. About Canwest Global Canwest Global Communications Corp. (TSX: CGS and CGS.A) -- http://www.canwest.com/-- an international media company, is Canada's largest media company. In addition to owning the Global Television Network, Canwest is Canada's largest publisher of English language daily newspapers and owns, operates and holds substantial interests in conventional television, out-of-home advertising, specialty cable channels, web sites and radio stations and networks in Canada, New Zealand, Australia, Turkey, Indonesia, Singapore, the United Kingdom and the United States. On October 6, 2009, Canwest Global, Canwest Media Inc., Canwest Television Limited Partnership (including Global Television, MovieTime, DejaView and Fox Sports World), The National Post Company and certain subsidiaries voluntarily entered into, and successfully obtained an Order from the Ontario Superior Court of Justice (Commercial Division) commencing proceedings under the Companies' Creditors Arrangement Act. The CMI Entities' commencement of these proceedings was undertaken in furtherance of a proposed recapitalization transaction that is supported by over 70% of holders of the 8% senior subordinated notes issued by CMI. On the same day, FTI Consulting Canada Inc., the Court-appointed Monitor in the CCAA proceedings, sought protection in the United States Bankruptcy Court under Chapter 15 of the United States Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No. 09-15994) for certain of the entities involved in Canwest's television business that filed for protection under the CCAA, including Canwest, Canwest Media Inc. and Canwest Global Broadcasting Inc./Radiodiffusion Canwest Global Inc. Judge Stuart M. Bernstein presides over the Chapter 15 cases. Evan D. Flaschen, Esq., at Bracewell & Giuliani LLP, in Hartford, Connecticut, serves as Chapter 15 Petitioner's counsel. The Chapter 15 Debtors disclosed estimated assets of $500 million to $1 billion and estimated debts of $50 million to $100 million. In a regulatory filing with the U.S. Securities and Exchange Commission, Canwest Media disclosed C$4,847,020,000 in total assets and C$5,826,522,000 in total liabilities at May 31, 2009. Bankruptcy Creditors' Service, Inc., publishes Canwest Bankruptcy News. The newsletter tracks the CCAA proceedings and Chapter 15 proceedings undertaken by Canwest Global Communications Corp. and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000). CANWEST GLOBAL: Pays Salvation Army in Excess of $50,000 -------------------------------------------------------- CanWest Global Communications Corp.'s newspaper division will pay more than $50,000 to the Salvation Army in Saskatoon, reports Paul Waldie of Globe and Mail. Salvation Army is one of CanWest's more than 300 creditors, as disclosed in papers filed in court. Court documents note that the charity was owed $54,485, which amount stemmed from an annual Christmas fundraising drive by the Saskatoon StarPhoenix newspaper, says the report. Cam Hutchinson, the paper's managing editor, said in an e-mail that a check had been sent to the charity since CanWest's filing for creditor protection last week. "It was a priority," Mr. Hutchinson said, notes the Globe and Mail. He added that the charity had failed to cash an earlier check, which caused the problem. About Canwest Global Canwest Global Communications Corp. (TSX: CGS and CGS.A) -- http://www.canwest.com/-- an international media company, is Canada's largest media company. In addition to owning the Global Television Network, Canwest is Canada's largest publisher of English language daily newspapers and owns, operates and holds substantial interests in conventional television, out-of-home advertising, specialty cable channels, web sites and radio stations and networks in Canada, New Zealand, Australia, Turkey, Indonesia, Singapore, the United Kingdom and the United States. On October 6, 2009, Canwest Global, Canwest Media Inc., Canwest Television Limited Partnership (including Global Television, MovieTime, DejaView and Fox Sports World), The National Post Company and certain subsidiaries voluntarily entered into, and successfully obtained an Order from the Ontario Superior Court of Justice (Commercial Division) commencing proceedings under the Companies' Creditors Arrangement Act. The CMI Entities' commencement of these proceedings was undertaken in furtherance of a proposed recapitalization transaction that is supported by over 70% of holders of the 8% senior subordinated notes issued by CMI. On the same day, FTI Consulting Canada Inc., the Court-appointed Monitor in the CCAA proceedings, sought protection in the United States Bankruptcy Court under Chapter 15 of the United States Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No. 09-15994) for certain of the entities involved in Canwest's television business that filed for protection under the CCAA, including Canwest, Canwest Media Inc. and Canwest Global Broadcasting Inc./Radiodiffusion Canwest Global Inc. Judge Stuart M. Bernstein presides over the Chapter 15 cases. Evan D. Flaschen, Esq., at Bracewell & Giuliani LLP, in Hartford, Connecticut, serves as Chapter 15 Petitioner's counsel. The Chapter 15 Debtors disclosed estimated assets of $500 million to $1 billion and estimated debts of $50 million to $100 million. In a regulatory filing with the U.S. Securities and Exchange Commission, Canwest Media disclosed C$4,847,020,000 in total assets and C$5,826,522,000 in total liabilities at May 31, 2009. Bankruptcy Creditors' Service, Inc., publishes Canwest Bankruptcy News. The newsletter tracks the CCAA proceedings and Chapter 15 proceedings undertaken by Canwest Global Communications Corp. and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000). CAPMARK FINANCIAL: Affordable's Schedules & Statement ----------------------------------------------------- A. Real Property Belmont Villas $21,662,381 Fin46 Properties 315,360,329 B. Personal Property B.1 Cash on hand Accounts Consolidated for GAAP reporting 1,408,355 Bank of America 55,691,282 Bank of America 51,716 PNC Bank 2,516 PNC Bank 11,857,646 B.14 Interests in partnerships 99.99% Equity Interest in: Arbor Glen Providence 2,437,584 Capitol Gateway Phase II Atlanta 3,844,988 Carleton Place Lofts 1,866,301 Casa De Vallejo 2,217,560 Cedar Hills Minnetonka 1,731,391 Chippington Towers I & II Madison 1,592,795 Eagle Cove Eager 1,575,579 Georgian Woods 8,066,380 Globe Mill Sacramento 7,812,871 Hampton Extension 1,490,176 Hillwood Apartments, Phase II 1,938,372 Horizons at Indio 2,389,433 Jackie Robinson 5,116,784 Kearney Plaza 1,205,497 Lincoln Point Lofts Phase II 1,721,570 Magnolia Pointe Durham 3,470,125 Mariposa at River Bend 1,962,155 Midcrown Senior 2,767,092 Oakview Millville 2,709,804 Pinebrook Manor Apartments 729,168 Primrose at Bammell 522,007 Ramblewood Apartments 790,377 Savannah Senior 2,238,606 Spanish Trace 660,840 Sunny Hill 323,004 Tenino Terrace 853,889 Unity Estates 476,803 University Heights 3,038,418 Ventana 1,541,611 Village at Hesperia 195,356 Village East 260,787 Interest in Assets Consolidated from GAAP 621,154,418 B.18 Other Liquidated Debts Asset Management Fees Receivable 4,991,212 Intercompany Receivable 36,389,141 Intercompany Receivable 259,765,118 Intercompany Receivable 1,625,440 Intercompany Receivable 13,609,228 Intercompany Receivable 5,500,000 Intercompany Receivable 61,875,966 Intercompany Receivable 30,739,834 Intercompany Receivable 92,352,425 Intercompany Receivable 3,651,748 Intercompany Receivable 1,729,151 Intercompany Receivable 45,311,232 Interest Receivable 3,924,507 LN#20030818F 3,800,049 LN#20069983 3,051,766 LN#20079988 5,427,702 Multiple Property Savings Loans 239,521,587 Syndication/Guarantee Fees 15,733,839 Others 364,767,594 B.24 Customer lists or other compilations Undetermined B.28 Office equipment, furnishings and supplies 34,969 B.29 Machinery 455,583 B.35 Other Personal Property Nominal Equity Interest in Guaranteed Funds 86,391,624 Property Level Assets Owned and Consolidated 16,780,306 Rent Ar 54,543 TOTAL SCHEDULED ASSETS $2,051,683,869 ======================================================== C. Property Claimed as Exempt None D. Secured Claim Undetermined E. Unsecured Priority Claims Undetermined F. Unsecured Non-priority Claims Capmark Capital Inc. 808,836,626 Capmark Finance Inc 53,454,423 Others 15,833,614 TOTAL SCHEDULED LIABILITIES $878,124,663 ======================================================= Statement of Financial Affairs Capmark Affordable Equity Inc., reports that it received income from employment, trade, or profession, or from operation of its business during the two years before the Petition Date: Amount Source ---------- ------ $7,644,691 Asset Management Fees - FYE 2007 12,108,495 Asset Management Fees - FYE 2008 6,362,200 Asset Management Fees - FYE 2009 (50,835,671) Equity In (loss) income of joint ventures and partnerships - FYE 2007 (23,313,130) Equity in (loss) income of joint ventures and partnerships - FYE 2008 (14,319,182) Equity in (loss) income of joint ventures and partnerships - YTD 2009 1,981,435 Interest Income - Intercompany - YTD 2009 9,966,265 Interest Income - FYE 2007 5,782,059 Interest Income - FYE 2008 49,449,767 Investment Banking Fees and Syndication Income - FYE 2007 70,294,018 Investment Banking Fees and Syndication Income - FYE 2008 7,064,289 Investment Banking Fees and Syndication Income - YTD 2009 13,025,328 Net (losses) gains on investments and real estate - FYE 2007 (23,334,847) Net (losses) gains on investments and real estate - FYE 2008 (33,973,524) Net (losses) gains on investments and real estate - YTD 2009 53,672,106 Net Real Estate Investment and Other Income - FYE 2007 41,743,355 Net Real Estate Investment and Other Income - FYE 2008 29,582,429 Net Real Estate Investment and Other Income - YTD 2009 9,242,925 Other Fees - FYE 2007 9,449,001 Other Fees - YTD 2008 9,628,378 Other Fees - YTD 2009 19,283 Other gains(losses), Net - FYE 2007 11,353,715 Other gains(losses), Net - FYE 2008 975,872 Other gains(losses), Net - YTD 2009 Capmark Affordable discloses that it made payments or transfers to 32 creditors totaling $354,230,634 within 90 days before the Petition Date: Claimant Amount -------- ------ Amerisouth Management LP AS $47,706 Amtax 34-B 427,137 Amtax 38 16,381 Amtax Ambac II 8,691 Amtax Ambac III 44,480 Amtax VII 40,043 Amtax XI 120,761 Amtax XVI 29,732 Amtax XXIX 434,397 Ashley Meadows 29,632 ATCCF XVI 12,260 ATCCF XVIII 36,346 ATCCF XX 3,692,585 Capmark Affordable Equity Inc. 17,799 Capmark Affordable Equity Payr 1,043,357 Capmark Capital Inc 175,368,225 Capstone Real Estate Svcs AAF 50,584 Corporate Trust Clearing 30,913,300 Elsinore Courtyard 49,884 FFC Novogradac and Co 6,000 I Construction co Inc Opeartin 75,480 Knights Protection 9,058 Merrill Lynch Pierce Fenner 68,000 Nixon Peabody LLP 14,068 Pershing 769,985 Pershing LLC 139,184,927 Protech 150 1,239,607 Reznick Group 23,300 The Fentress Group LLC 19,818 The Village of Kalamazoo, LPO 102,519 US Bank CT Southeast Wire Clrg 70,400 Wingate Tower and Garden Apts 264,162 Capmark Affordable also made payments totaling $1,804,315 to certain insiders within one year before the Petition Date on account of regular wages and discretionary bonus. A list of the payments is available for free at: http://bankrupt.com/misc/CapmarkAff_Stmt3c.pdf About Capmark Financial Based in Horsham, Pennsylvania, Capmark Financial Group Inc. -- http://www.capmark.com/-- is a diversified company that provides a broad range of financial services to investors in commercial real estate-related assets. Capmark has three core businesses: lending and mortgage banking, investments and funds management, and servicing. Capmark operates in North America, Europe and Asia. Capmark has 1,000 employees located in 37 offices worldwide. On October 25, 2009, Capmark Financial Group Inc. and certain of its subsidiaries filed voluntary petitions for relief under Chapter 11 (Bankr. D. Del. Case No. 09-13684) Capmark's financial advisors are Lazard Freres & Co. LLC and Loughlin Meghji + Company. Capmark's bankruptcy counsel is Dewey & LeBoeuf LLP. Richards, Layton & Finger, P.A. serves as local counsel. Beekman Advisors, Inc., is serving as strategic advisor. KPMG LLP is tax and accounting advisor. Epiq Bankruptcy Solutions, LLC, is the claims and notice agent. Capmark has total assets of US$20 billion against total debts of US$21 billion as of June 30, 2009. Bankruptcy Creditors' Service, Inc., publishes Capmark Financial Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Capmark Financial Group Inc. and its units. (http://bankrupt.com/newsstand/or 215/945-7000) CAPMARK FINANCIAL: Dewey & LeBoeuf Charges $3MM for November Work ----------------------------------------------------------------- Pursuant to Sections 330 and 331 of the Bankruptcy Code, professionals of the Debtors and the Official Committee of Unsecured Creditors seek payment of their fees and reimbursement of their expenses: A. Debtors' Professionals Professional Period Fees Expenses ------------ ------ ---- -------- Dewey & LeBoeuf LLP 10/25/09- 11/30/09 $3,054,340 $28,853 Richards, Layton & 10/25/09- Finger, P.A. 11/30/09 86,451 15,605 Dewey & LeBoeuf serves as the Debtors' attorneys. Richards Layton acts as counsel to the Debtors. In a separate filing, the Debtors certified to the Court that no objections were filed as to these professionals' fee applications: Professional Period ------------ ----------------- Dewey LeBoeuf LLP 10/25/09-11/30/09 Alvarez & Marsal North America, LLC 11/03/09-11/30/09 B. Professionals of the Official Committee on Unsecured Creditors Professional Period Fees Expenses ------------ ------ ---- -------- JR Myriad LLC 11/03/09- 11/30/09 $286,467 $0 Alvarez & Marsal North 11/03/09- America, LLC 11/30/09 237,490 6,153 Kramer Levin Naftalis 11/02/09- & Frankel LLP 11/30/09 1,239,928 29,858 MR Myriad serves as real estate business advisors to the Committee. Alvarez & Marsal acts as the Committee's financial advisor. Kramer Levin is the Committee's counsel. The Committee certified to the Court that no objections were filed as to these professionals' fee applications: Professional Period ------------ ----------------- Bayard, P.A. 11/04/09-11/30/09 Kramer Levin Naftalis & Frankel LLP 11/02/09-11/30/09 Beekman Files Final Application Beekman Advisors, Inc., filed with the Court, on January 5, 2010, its application for final allowance of compensation for the period from October 25, 2009, through December 11, 2009, totaling $2,431,529, and reimbursement of expenses for $2,499. Shekar Narasimhan, managing partner of Beekman Advisors, Inc., asserts that the fees and expenses requested in the Application are fair and reasonable given: (a) the size and complexity of the Debtors' cases; (b) the nature of the commercial mortgage servicing and mortgage banking business or MSB Business; (c) the nature and extent of the services rendered by Beekman in connection with the sale of the MSB Business to Berkadia Commercial Mortgage LLC; (d) the value received by the estates from the sale of the MSB Business; (e) Beekman's established expertise in the commercial and multifamily mortgage origination and servicing fields, including, but not limited to government sponsored entities; and (f) the costs of comparable services other than in a case under the Bankruptcy Code. To recall, the Debtors sought and obtained the Court's authority to employ Beekman as their strategic advisor in connection with the sale of the Debtors' North American servicing and North American lending and mortgage banking business. About Capmark Financial Based in Horsham, Pennsylvania, Capmark Financial Group Inc. -- http://www.capmark.com/-- is a diversified company that provides a broad range of financial services to investors in commercial real estate-related assets. Capmark has three core businesses: lending and mortgage banking, investments and funds management, and servicing. Capmark operates in North America, Europe and Asia. Capmark has 1,000 employees located in 37 offices worldwide. On October 25, 2009, Capmark Financial Group Inc. and certain of its subsidiaries filed voluntary petitions for relief under Chapter 11 (Bankr. D. Del. Case No. 09-13684) Capmark's financial advisors are Lazard Freres & Co. LLC and Loughlin Meghji + Company. Capmark's bankruptcy counsel is Dewey & LeBoeuf LLP. Richards, Layton & Finger, P.A. serves as local counsel. Beekman Advisors, Inc., is serving as strategic advisor. KPMG LLP is tax and accounting advisor. Epiq Bankruptcy Solutions, LLC, is the claims and notice agent. Capmark has total assets of US$20 billion against total debts of US$21 billion as of June 30, 2009. Bankruptcy Creditors' Service, Inc., publishes Capmark Financial Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Capmark Financial Group Inc. and its units. (http://bankrupt.com/newsstand/or 215/945-7000) CAPMARK FINANCIAL: Sues Gruss Global to Stop Noteholder Suits ------------------------------------------------------------- Capmark Financial Group Inc. issued on May 10, 2007, $2,550,000,000 of unsecured notes, consisting of: (i) $850 million of Floating Rate Senior Notes Due 2010; (ii) $1.2 billion of 5.875% Senior Notes Due 2012; and (iii) $500 million of 6.300% Senior Notes Due 2017. Each of the Notes was issued pursuant to a separate indenture between Capmark, the guarantors, and Deutsche Bank Trust Company of Americas as Indenture Trustee. In connection with the issuance of $1.5 billion in secured debt under a Term Facility Credit and Guaranty Agreement, Capmark presented Deutsche Bank with, and requested that it execute, three supplemental indentures for the purpose of amending Section 4.04 of each Indenture to cure an ambiguity, omission, defect or inconsistency created by the inadvertent omission of the words "secured by Liens" in one of the exceptions to the negative covenant relating to the granting of liens on assets. Gruss Global Investors Master Fund, Ltd., et al., who purport to hold an aggregate of $800 million in face value of the Notes, filed on October 1, 2009, an action against Deutsche Bank in the Supreme Court of the State of New York, asserting claims for breach of contract, violation of the Trust Indenture Act, breach of fiduciary duty, and negligence in connection with the issuance of the Supplemental Indentures. Deutsche Bank also filed a third-party complaint against the Debtors, as well as two of their nondebtor affiliates, seeking contribution and indemnity for all damages, costs and expenses it incurs as a result of the claims asserted by the Noteholder Plaintiffs. By this complaint, Debtors Capmark Financial Group Inc., Capmark Capital Inc., Capmark Finance Inc., Commercial Equity Investments, Inc., Mortgage Investments, LLC, Net Lease Acquisition LLC and SJM Cap, LLC, seek two forms of relief against Gruss Global Investors Master Fund, Ltd., et al.: (1) A declaration that, pursuant to Section 362 of the Bankruptcy Code, the automatic stay applicable to claims against the Debtors precludes the Noteholder Plaintiffs from prosecuting their clams in the Noteholder Action against Deutsche Bank, which, in light of Deutsche Bank's rights of indemnity, are de facto claims against the Debtors themselves; and (2) In the alternative, issuance of an injunction pursuant to Section 105(a) of the Bankruptcy Code to preclude the Noteholder Plaintiffs from prosecuting their claims in the Noteholder Action against Deutsche Bank. The Debtors assert that resolution of the claims asserted by the Noteholder Plaintiffs will, among other things: (a) significantly affect the administration of their estates; (b) require discovery of the officers and other key employees of the Debtors; (c) increase the amount, and interfere with the Court's determination, of Deutsche Bank's contractual claims for indemnity from the Debtors; and (d) create an undue risk of multiple litigation and inconsistent adjudications. About Capmark Financial Based in Horsham, Pennsylvania, Capmark Financial Group Inc. -- http://www.capmark.com/-- is a diversified company that provides a broad range of financial services to investors in commercial real estate-related assets. Capmark has three core businesses: lending and mortgage banking, investments and funds management, and servicing. Capmark operates in North America, Europe and Asia. Capmark has 1,000 employees located in 37 offices worldwide. On October 25, 2009, Capmark Financial Group Inc. and certain of its subsidiaries filed voluntary petitions for relief under Chapter 11 (Bankr. D. Del. Case No. 09-13684) Capmark's financial advisors are Lazard Freres & Co. LLC and Loughlin Meghji + Company. Capmark's bankruptcy counsel is Dewey & LeBoeuf LLP. Richards, Layton & Finger, P.A. serves as local counsel. Beekman Advisors, Inc., is serving as strategic advisor. KPMG LLP is tax and accounting advisor. Epiq Bankruptcy Solutions, LLC, is the claims and notice agent. Capmark has total assets of US$20 billion against total debts of US$21 billion as of June 30, 2009. Bankruptcy Creditors' Service, Inc., publishes Capmark Financial Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Capmark Financial Group Inc. and its units. (http://bankrupt.com/newsstand/or 215/945-7000) CAPMARK FINANCIAL: Asks for First Plan Exclusivity Extension ------------------------------------------------------------ Capmark Financial Group Inc. is asking for a first extension of the period within which it has the exclusive right to propose a Chapter 11 plan. Capmark, which has sold most of its assets, is seeking a seven-month extension, until September 30, of its exclusive period to file a Chapter 11 plan, and an extension until November 30 of its exclusive period to solicit acceptances of the Plan. The motion is scheduled fore hearing on February 19, with objections due on February 12. According to Bill Rochelle at Bloomberg News, the Official Committee of Unsecured Creditors agreed to support the exclusivity extension request so long as the committee has the right to terminate exclusivity on July 30. Capmark would nonetheless retain the right to ask the court for longer exclusivity despite the Committee's desire for an earlier termination. Since the Petition Date, the Debtors have focused on stabilizing their businesses, and ensuring a smooth transition into chapter 11 while, at the same time, focusing on other time-sensitive and complex aspects of these cases. Among other significant tasks, in the first few months of these cases the Debtors have marketed, obtained authority to sell, and consummated the sale of the MSB Business, which closed on December 11, 2009, and the Debtors' military housing business, which closed on December 18, 2009 The sale of the Debtors' shares in a Japanese subsidiary engaged in loan servicing in Japan was also approved by this Court on December 18,2009, and is scheduled to close in January 2010 The sale of the MSB Business generated in excess of $500 million of cash to the Debtors' estates. About Capmark Financial Based in Horsham, Pennsylvania, Capmark Financial Group Inc. -- http://www.capmark.com/-- is a diversified company that provides a broad range of financial services to investors in commercial real estate-related assets. Capmark has three core businesses: lending and mortgage banking, investments and funds management, and servicing. Capmark operates in North America, Europe and Asia. Capmark has 1,000 employees located in 37 offices worldwide. On October 25, 2009, Capmark Financial Group Inc. and certain of its subsidiaries filed voluntary petitions for relief under Chapter 11 (Bankr. D. Del. Case No. 09-13684) Capmark's financial advisors are Lazard Freres & Co. LLC and Loughlin Meghji + Company. Capmark's bankruptcy counsel is Dewey & LeBoeuf LLP. Richards, Layton & Finger, P.A. serves as local counsel. Beekman Advisors, Inc., is serving as strategic advisor. KPMG LLP is tax and accounting advisor. Epiq Bankruptcy Solutions, LLC, is the claims and notice agent. Capmark has total assets of US$20 billion against total debts of US$21 billion as of June 30, 2009. Bankruptcy Creditors' Service, Inc., publishes Capmark Financial Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Capmark Financial Group Inc. and its units. (http://bankrupt.com/newsstand/or 215/945-7000) CARBON BEACH: Files Schedules of Assets and Liabilities ------------------------------------------------------- Carbon Beach Partners, LLC, filed with the U.S. Bankruptcy Court for the Central District of California its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $21,000,000 B. Personal Property $44 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $17,388,577 E. Creditors Holding Unsecured Priority Claims $0 F. Creditors Holding Unsecured Non-priority Claims $75,000 ----------- ----------- TOTAL $21,000,044 $17,463,557 The Debtor relates that it needs more time to prepare and complete the documents considering its limited accounting staff, who still handle its normal accounting responsibilities. Calabasas, California-based Carbon Beach Partners, LLC, filed for Chapter 11 on November 3, 2009 (Bankr. C.D. Calif. Case No. 09- 24657). Anne Wells, Esq., represents the Debtor in its restructuring effort. In its petition, the Debtor listed assets and debts both ranging from $10,000,001 to $50,000,000. CATALYST PAPER: Amends Private Exchange Offer --------------------------------------------- Catalyst Paper announces an amendment to the private exchange offer and consent solicitation for its 8 5/8% senior notes due 2011 (CUSIP No. 65653RAD5) Catalyst Paper Corporation has amended the terms of its private exchange offer and consent solicitation for its outstanding 8 5/8% Senior Notes due June 15, 2011. As a result of this amendment, an amended and restated offering memorandum, reflecting the terms of the amended Exchange Offer, will be made available to Eligible Holders as soon as possible. The terms of the amended Exchange Offer include the following: * Holders who validly tender and do not validly withdraw their Old Notes will receive, for each U.S. $1,000 principal amount of Old Notes accepted for exchange: -- U.S. $830 in principal amount of Senior Secured Notes of Catalyst due December 15, 2016, plus -- U.S. $50 in principal amount of the New Notes as an early tender premium to holders who validly tender and do not validly withdraw their Old Notes prior to a date to be specified in the Amended Offering Memorandum. The New Notes will pay interest of 11% per annum. * The New Notes will be secured on a first priority basis by all of Catalyst's assets, subject to certain exceptions, and subject to the senior security interest in the property and assets which secure obligations under Catalyst's existing CDN $330 million asset-based revolving credit facility and the obligations under any derivatives transactions from time to time entered into by Catalyst such property and assets subject to senior security interests of the ABL Facility, which primarily consists of working capital and the plant, property and equipment of Catalyst's Snowflake mill, the "ABL Priority Lien. * The New Notes will also be secured by a junior security interest in the ABL Priority Lien * The New Notes will be guaranteed on a senior basis, jointly and severally, by each of Catalyst's restricted subsidiaries, subject to certain exceptions. Catalyst has executed a support agreement with an ad hoc group of holders of the Old Notes holding U.S. $101,334,000 or 28.6% of the outstanding Old Notes. The members of the Ad Hoc Committee have agreed to tender their Old Notes into the amended Exchange Offer, subject to the terms of the Support Agreement. Catalyst has been advised by the exchange agent for the Exchange Offer that, as of the close of business on January 22, 2010, the aggregate principal amount of Old Notes that had been validly tendered and for which related consents had been validly delivered was approximately U.S. $29.35 million or 8.3% of the outstanding Old Notes. The amended Exchange Offer will be subject to certain conditions, including the receipt of tenders and consents in respect of at least 95% of the outstanding aggregate principal amount of the Old Notes and the negotiation and execution of inter-creditor and other related agreements with the lenders under the ABL Facility arising from the issuance of the New Notes. The consent solicitation set forth in the existing Exchange Offer will remain the same in the amended Exchange Offer. At December 31, 2009, the Company had liquidity of $157.4 million, comprised of $83.1 million of cash, and availability of $74.3 million under the ABL Facility, after taking into account a covenant that requires Catalyst to maintain $35.0 million in availability under the ABL Facility. Total debt outstanding as at December 31, 2009 was $775.6 million, including $11.2 million of capital lease obligations and $112.9 million of non-recourse debt owed by a joint venture in which Catalyst has a 50.001% interest The amended Exchange Offer will be made, and the New Notes will be offered and issued, in transactions exempt from the registration requirements of the U.S. Securities Act of 1933, as amended. A full-text copy of the support agreement is available for free at http://ResearchArchives.com/t/s?4e3d About Catalyst Paper Headquartered in Richmond, British Columbia, Catalyst Paper Corporation (TSX:CTL) manufactures diverse specialty printing papers, newsprint and pulp. Its customers include retailers, publishers and commercial printers in North America, Latin America, the Pacific Rim and Europe. With six mills strategically located in British Columbia and Arizona, Catalyst has a combined annual production capacity of 2.5 million tones. At September 30, 2009, the Company had C$2.20 billion in total assets against C$1.29 billion in total liabilities. At September 30, 2009, the Company had liquidity of C$192.9 million, comprised of C$90.6 million cash, and availability of C$102.3 million on the Company's asset-based loan facility. * * * According to the Troubled Company Reporter on Dec. 1, 2009, DBRS has downgraded the Issuer Rating of Catalyst Paper Corporation (Catalyst or the Company) to B (low) from BB and the Senior Debt rating to CCC from BB, and placed the Company's ratings Under Review with Negative Implications. All ratings previously had Negative trends. The downgrades reflect the Company's weak financial risk which is likely to weaken further in view of expected continuation of soft industry conditions and follows the Company's announcement on November 23, 2009 of its offer to exchange its outstanding 8 5/8% Senior Debt due June 15, 2011 (Old Notes) with new 10% Senior Secured Notes due December 15, 2016 (New Notes) and shares of its common stock. CATALYST PAPER: Refutes Claims From Payment Recovery in Quebecor ---------------------------------------------------------------- Catalyst Paper said that a claim filed against it by Quebecor World (USA)'s litigation trustee for alleged preferential transfers of approximately US$18.8 million is not expected to result in any significant liability to Catalyst. The claim seeks the return of payments made by Quebecor World to Catalyst in the ordinary course of their trade relationship in the 90 days prior to Quebecor World's Chapter 11 filing in December, 2007. Catalyst is one of 1700 vendors of Quebecor World who received payments totalling US$390 million during the preference period in which the litigation trustee has sought recovery. The claim is made pursuant to the U.S. Bankruptcy Code which allows recovery of certain transfer made by the bankrupt debtor within the 90 days prior to the bankruptcy filing, subject to a vendor's defenses. Catalyst said it intends to defend the claim and has been advised that it has a number of defences available that are expected to eliminate or significantly reduce its financial exposure. Accordingly, Catalyst does not expect to incur any significant liability in connection with the Quebecor World claim. About Catalyst Paper Headquartered in Richmond, British Columbia, Catalyst Paper Corporation (TSX:CTL) manufactures diverse specialty printing papers, newsprint and pulp. Its customers include retailers, publishers and commercial printers in North America, Latin America, the Pacific Rim and Europe. With six mills strategically located in British Columbia and Arizona, Catalyst has a combined annual production capacity of 2.5 million tones. At September 30, 2009, the Company had C$2.20 billion in total assets against C$1.29 billion in total liabilities. At September 30, 2009, the Company had liquidity of C$192.9 million, comprised of C$90.6 million cash, and availability of C$102.3 million on the Company's asset-based loan facility. * * * According to the Troubled Company Reporter on Dec. 1, 2009, DBRS has downgraded the Issuer Rating of Catalyst Paper Corporation (Catalyst or the Company) to B (low) from BB and the Senior Debt rating to CCC from BB, and placed the Company's ratings Under Review with Negative Implications. All ratings previously had Negative trends. The downgrades reflect the Company's weak financial risk which is likely to weaken further in view of expected continuation of soft industry conditions and follows the Company's announcement on November 23, 2009 of its offer to exchange its outstanding 8 5/8% Senior Debt due June 15, 2011 (Old Notes) with new 10% Senior Secured Notes due December 15, 2016 (New Notes) and shares of its common stock. C&C ELLEGANZA: Case Summary & 16 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: C&C Elleganza, Inc. fdba Elleganza, Inc 1353 Carr 19, Suite 260 Guaynabo, PR 00966 Bankruptcy Case No.: 10-00377 Chapter 11 Petition Date: January 25, 2010 Court: United States Bankruptcy Court District of Puerto Rico (Old San Juan) Debtor's Counsel: Victor Gratacos Diaz, Esq. Po Box 7571 Caguas, PR 00726 Tel: (787) 746-4772 Email: vgratacd@coqui.net Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 According to the schedules, the Company has assets of $1,892,001, and total debts of $2,345,965. A full-text copy of the Debtor's petition, including a list of its 16 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/prb10-00377.pdf The petition was signed by Carlos Cumbas Ortiz, president of the Company. CELL THERAPEUTICS: Sells $30 Mil. in Preferreds and Warrants ------------------------------------------------------------ Cell Therapeutics, Inc., has entered into an agreement to sell $30 million of shares of its Series 3 Preferred Stock and warrants to purchase shares of its common stock in a registered offering to two institutional investors. Each share of Series 3 Preferred Stock is convertible at the option of the holder, at any time during its existence, into 823 shares of common stock at a conversion price of $1.21375 per share of common stock, for a total of 24,690,000 common shares. In connection with the offering, the investors received warrants to purchase up to 8,640,000 shares of common stock. The warrants have an exercise price of $1.18 per warrant share, for total potential additional proceeds to the Company of $10.2 million upon exercise of the warrants. The warrants are exercisable immediately upon issuance and terminate one year and one day after the date of issuance. The Company intends to use the net proceeds from the offering for working capital and general corporate purposes, which may include, among other things, paying interest on or retiring portions of its outstanding debt, funding research and development, preclinical and clinical trials, the preparation and filing of new drug applications, and general working capital. Shares of the Series 3 Preferred Stock will receive dividends in the same amount as any dividends declared and paid on shares of common stock and have no voting rights on general corporate matters. The closing of the offering was expected to occur on January 19, 2010, at which time the Company will receive the cash proceeds and deliver the securities. Roughly $40.4 million of Cell Therapeutics' 4% Convertible Senior Subordinated Notes due 2010 mature on July 1, 2010. Roughly $10.3 million of Cell Therapeutics' 7.5% Convertible Senior Notes due 2011 mature on April 30, 2011; and roughly $10.9 million of Cell Therapeutics' 5.75% Convertible Senior Notes due 2011 mature on December 15, 2011. Rodman & Renshaw, LLC, a wholly owned subsidiary of Rodman & Renshaw Capital Group, Inc., (Nasdaq:RODM), acted as the exclusive placement agent for the offering. A shelf registration statement relating to the shares of Series 3 Preferred Stock and warrants issued in the offering (and the shares of common stock issuable upon conversion of the Series 3 Preferred Stock and exercise of the warrants) has been filed with the Securities and Exchange Commission. The shelf registration statement was automatically effective upon filing with the SEC. A prospectus supplement relating to the offering will be filed with the SEC. Copies of the prospectus supplement and accompanying prospectus may be obtained directly from the Company by contacting the Company at: Cell Therapeutics, Inc., 501 Elliott Avenue West, Suite 400, Seattle, Washington 98119. On January 15, 2010, the Company filed Articles of Amendment to its Amended and Restated Articles of Incorporation with the Secretary of State of the State of Washington, establishing the Series 3 Preferred Stock. Each share of Series 3 Preferred Stock is entitled to a liquidation preference equal to the stated value of such share of Series 3 Preferred Stock plus any accrued and unpaid dividends before the holders of Common Stock or any other junior securities of the Company receive any payments upon such liquidation. The Series 3 Preferred Stock is not entitled to dividends except to share in any dividends actually paid on the Common Stock or any pari passu or junior securities. The Series 3 Preferred Stock is convertible into Common Stock, at the option of the holder, at an initial conversion price of $1.21375 per share, subject to a 10% blocker provision. The Series 3 Preferred Stock has no voting rights except for limited protective provisions and except as is otherwise required by law. About Cell Therapeutics Headquartered in Seattle, Cell Therapeutics, Inc. (NASDAQ and MTA: CTIC) -- http://www.CellTherapeutics.com/-- is a biopharmaceutical company committed to developing an integrated portfolio of oncology products aimed at making cancer more treatable. CTI's principal business strategy is focused on cancer therapeutics; an area with significant market opportunity that it believes is not adequately served by existing therapies. Subsequent to the closure of its Bresso, Italy operations in September 2009, CTI's operations are conducted solely in the United States. During 2008, CTI had one approved drug, Zevalin(R) (ibritumomab tiuxetan), or Zevalin, which it acquired in 2007, generating product sales. CTI contributed Zevalin to a joint venture, RIT Oncology, LLC, upon its formation in December 2008 and in March 2009 CTI finalized the sale of its 50% interest in RIT Oncology to the other member, Spectrum Pharmaceuticals, Inc. All of CTI's current product candidates, including pixantrone, OPAXIO and brostallicin are under development. As of September 30, 2009, the Company had $87,299,000 in total assets against $96,828,000 in total liabilities. The Company's September 30 balance sheet also showed strained liquidity: the Company had $59,497,000 in total current assets, including $54,992,000 in cash and cash equivalents, against $72,882,000 in total current liabilities. Bankruptcy Warning "The condensed consolidated financial statements have been prepared assuming that we will continue as a going concern, which contemplates realization of assets and the satisfaction of liabilities in the normal course of business for the twelve month period following the date of these financials. However, we have incurred losses since inception and we expect to generate losses from operations through 2010 primarily due to research and development costs for pixantrone, OPAXIO and brostallicin. Our available cash and cash equivalents are approximately $55.0 million as of September 30, 2009 and we do not expect that we will have sufficient cash to fund our planned operations through the second quarter of 2010, which raises substantial doubt about our ability to continue as a going concern," the Company said in its Form 10-Q filing with the Securities and Exchange Commission. "We have achieved cost saving initiatives to reduce operating expenses, including the reduction of employees related to Zevalin operations and the closure of our operations in Italy . . . and we continue to seek additional areas for cost reductions. However, we will also need to raise additional funds and are currently exploring alternative sources of equity or debt financing. We may seek to raise such capital through public or private equity financings, partnerships, joint ventures, disposition of assets, debt financings or restructurings, bank borrowings or other sources." The Company cautioned additional funding may not be available on favorable terms or at all. If additional funds are raised by issuing equity securities, substantial dilution to existing shareholders may result. If it fails to obtain capital when required, the Company said it may be required to delay, scale back, or eliminate some or all of its research and development programs and may be forced to cease operations, liquidate its assets and possibly seek bankruptcy protection. CERUS CORP: Royce & Associates Reports 10.05% Equity Stake ---------------------------------------------------------- Royce & Associates, LLC, disclosed that it may be deemed as the beneficial owner of 3,891,200 shares or roughly 10.05% of the common stock of Cerus Corporation as of December 31, 2009. Going Concern Doubt At September 30, 2009, the Company's consolidated balance sheets showed $43.0 million in total assets, $17.2 million in total liabilities, and $25.8 million in total shareholders' equity. Ernst & Young LLP, in Palo Alto, Calif., expressed substantial doubt about Cerus Corporation's ability to continue as a going concern after auditing the Company's consolidated financial statements for the years ended December 31, 2008, and 2007. The auditors pointed to the Company's recurring operating losses and negative cash flows from operating activities from inception through December 31, 2008. About Cerus Corporation Cerus Corporation (NASDAQ: CERS) -- http://www.cerus.com/-- is a biomedical products company focused on commercializing the INTERCEPT Blood System to enhance blood safety. The INTERCEPT Blood System is designed to inactivate blood-borne pathogens in donated blood components intended for transfusion. Cerus currently markets the INTERCEPT Blood System for both platelets and plasma in Europe, Russia, the Middle East and selected countries in other regions around the world. The INTERCEPT red blood cell system is currently in clinical development. CERUS CORP: Board OKs Bonus Pool for Senior Management ------------------------------------------------------ Cerus Corporation said that on January 6, 2010, the Compensation Committee of the Company's Board of Directors, pursuant to authority delegated to the Compensation Committee by the Board, approved the creation of a bonus pool in accordance with the terms of the Company's Bonus Plan for Senior Management of Cerus Corporation. Pursuant to the terms of the Bonus Plan, 70% of each recipient's bonus was awarded in cash and 30% was awarded in the form of restricted stock units with the exception of Dr. Corash, who was awarded 45.5% of his bonus in cash, 24.5% of his bonus in the form of a fully-vested stock bonus award and the remaining 30% of his bonus in the form of restricted stock units. The bonuses paid to the Company's current principal financial officer and each of the Company's named executive officers (as such term is defined by Regulation SK Item 402(a)(3), 17 C.F.R. Section 229.10, et. seq.) that were employees as of December 31, 2009 are set forth: 2009 2009 Total 2009 2009 Restricted Bonus Cash Stock Stock 2009 Amount Bonus Bonus Units Salary ------ ----- ----- ---------- ------ Claes Glassell President & CEO $147,000 $102,901 - 23,837 $490,000 Laurence M. Corash, M.D. SVP & Chief Scientific Officer $56,250 $25,595 7,449 9,121 $375,000 Howard G. Ervin VP-Legal Affairs $46,730 $32,712 - 7,577 $311,531 William M. Greenman SVP-Business Development & Marketing $46,800 $32,760 - 7,589 $312,000 Kevin D. Green VP-Finance and Chief Accounting Officer $23,100 $16,171 - 3,745 $220,000 As permitted under the Bonus Plan, the Compensation Committee used its discretion to fund a bonus pool based on 30% of each individual's target bonus percentage for 2009 in recognition of the strong performance by the Company's officers in a challenging year of transition. The target bonus percentage for 2009 was 100% for Mr. Glassell, 50% for each of Dr. Corash, Mr. Greenman and Mr. Ervin and 35% for Mr. Green. The Company's corporate goals for 2009 included sales and cash-flow targets and the achievement of specific performance metrics. Going Concern Doubt At September 30, 2009, the Company's consolidated balance sheets showed $43.0 million in total assets, $17.2 million in total liabilities, and $25.8 million in total shareholders' equity. Ernst & Young LLP, in Palo Alto, Calif., expressed substantial doubt about Cerus Corporation's ability to continue as a going concern after auditing the Company's consolidated financial statements for the years ended December 31, 2008, and 2007. The auditors pointed to the Company's recurring operating losses and negative cash flows from operating activities from inception through December 31, 2008. About Cerus Corporation Cerus Corporation (NASDAQ: CERS) -- http://www.cerus.com/-- is a biomedical products company focused on commercializing the INTERCEPT Blood System to enhance blood safety. The INTERCEPT Blood System is designed to inactivate blood-borne pathogens in donated blood components intended for transfusion. Cerus currently markets the INTERCEPT Blood System for both platelets and plasma in Europe, Russia, the Middle East and selected countries in other regions around the world. The INTERCEPT red blood cell system is currently in clinical development. CFT-III LLC: Voluntary Chapter 11 Case Summary ---------------------------------------------- Debtor: CFT-III, LLC 353 South Main Street, Suite 503 Decatur, IL 62523 Bankruptcy Case No.: 10-70160 Chapter 11 Petition Date: January 25, 2010 Court: United States Bankruptcy Court Central District of Illinois (Springfield) Judge: Mary P. Gorman Debtor's Counsel: Jonathan A. Backman, Esq. 117 N Center St Bloomington, IL 61701 Tel: (309) 820-7420 Fax: (309) 820-7430 Email: jabackman@backlawoffice.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The petition was signed by John Cardwell, manager of the company. CHEMTURA CORP: Albemarle Discloses Impact of Deal in Q4 Earnings ---------------------------------------------------------------- Albemarle Corporation said its fourth quarter 2009 results include $11.6 million in pre-tax charges ($7.6 million or 8 cents per share after tax) for restructuring and other costs related principally to planned reductions in force and to the write-off of certain assets at its Arkansas facility related to an with Chemtura Corporation, which was approved January 21, 2010, by the court presiding over Chemtura's Chapter 11 bankruptcy proceeding. Fourth quarter results also include $11.3 million, or 12 cents per share, in one-time tax benefits related principally to the settlement of the 2005-2007 tax audits with the U.S. Internal Revenue Service. Net sales in the fourth quarter of 2009 totaled $558.2 million compared to fourth quarter 2008 net sales of $517.7 million. Early this month, Albemarle entered into a series of strategic agreements with Chemtura. The parties entered into a long-term supply agreement under which Albemarle will supply Chemtura with certain requirements of BA-59P(TM) (Tetrabrom), DE-83P(TM) (Decabromodiphenyl oxide), Decabromodiphenyl ethane, N Propyl Bromide and Sodium Bromide. The two companies have also entered into a Settlement and Cross License Agreement that resolves pending litigation and grants Chemtura a license to sell Albemarle's proprietary Saytex(R) 8010 flame retardant. Additionally, the companies have entered into a Brine Mineral Interest Agreement in which Albemarle will assign certain brine mineral interests in Chemtura's existing West Bromine Unit to Chemtura, and Chemtura will assume Albemarle's obligations related thereto. Albemarle had said it will incur charges of roughly $4 million in the fourth quarter 2009 relating to the transfer of its brine mineral interests and the write-off of certain impacted bromine assets. Albemarle reported fourth quarter 2009 earnings of $62.3 million, or 68 cents per share, compared to $13.1 million, or 14 cents per share, for the fourth quarter of 2008. Earnings for 2009 were $178.4 million, or $1.94 per share, compared to $194.2 million, or $2.09 per share, for 2008. Excluding the second quarter 2009 after-tax special item of $8.2 million related to Port de Bouc, the fourth quarter $7.6 million after tax restructuring and other charges and $22.8 million in one-time benefits comprised mainly from the settlement of prior year tax audits, earnings for 2009 were $171.4 million, or $1.86 per share. Excluding special and one- time tax items, earnings for 2008 were $221.3 million, or $2.39 per share. Full year net sales for 2009 were $2.01 billion compared to $2.47 billion for 2008. Albemarle Corporation (NYSE: ALB) -- http://www.albemarle.com/-- headquartered in Baton Rouge, Louisiana, is a global developer, manufacturer, and marketer of highly-engineered specialty chemicals for consumer electronics, petroleum refining, utilities, packaging, construction, automotive/transportation, pharmaceuticals, crop protection, food-safety and custom chemistry services. Albemarle employs over 4,100 people and serves customers in 100 countries. About Chemtura Corp. Based in Middlebury, Connecticut, Chemtura Corporation (CEM) -- http://www.chemtura.com/-- with 2008 sales of $3.5 billion, is a global manufacturer and marketer of specialty chemicals, crop protection products, and pool, spa and home care products. Chemtura Corporation and 26 of its U.S. affiliates filed voluntary petitions for relief under Chapter 11 on March 18, 2009 (Bankr. S.D.N.Y. Case No. 09-11233). M. Natasha Labovitz, Esq., at Kirkland & Ellis LLP, in New York, serves as bankruptcy counsel. Wolfblock LLP serves as the Debtors' special counsel. The Debtors' auditors and accountant are KPMG LLP; their investment bankers are Lazard Freres & Co.; their strategic communications advisors are Joele Frank, Wilkinson Brimmer Katcher; their business advisors are Alvarez & Marsal LLC and Ray Dombrowski serves as their chief restructuring officer; and their claims and noticing agent is Kurtzman Carson Consultants LLC. As of December 31, 2008, the Debtors had total assets of $3.06 billion and total debts of $1.02 billion. Bankruptcy Creditors' Service, Inc., publishes Chemtura Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by Chemtura Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CHRYSLER LLC: 600 Dealers Try to Restore Businesses --------------------------------------------------- About 21 percent of Chrysler and General Motors dealers which were closed in 2009 or are slated to be shut down later this year have appealed the automakers' decisions, according to a January 21 report by The Salt Lake Tribune. The American Arbitration Association, which was appointed to handle the claims, said about 600 of the roughly 2,800 rejected dealers have asked for hearings in a bid to restore their businesses, The Salt Lake Tribune reported. The appeals are being filed under a federal law passed in December, which gives dealers affected by Old Chrysler's and GM's bankruptcy filings a chance to appeal their termination. It establishes a binding arbitration process to determine whether dealerships ought to be reinstated. GM indicated it would terminate about 2,000 underperforming dealers by October of this year while old Chrysler terminated 789 dealers as part of the sale of its assets to Italy-based auto maker Fiat S.p.A. "There seems to be pretty strong interest [in arbitrating] among our dealers who were terminated," The Salt lake Tribune quoted Craig Bickmore, executive director of the New Car Dealers Association of Utah, as saying. "At least now some may have a chance to get their businesses back, which is something they didn't have before," Mr. Craig said. India Johnson, an association senior vice president who is in charge of the hearings, said she expects 700 to 800 dealers to seek arbitration by the midnight Monday deadline, according to another report by Dallas News. Not all dealers will get hearings, however. Some only filed paperwork to preserve their right to appeal but may not proceed while others may settle with the automakers before the hearings, Ms. Johnson said. Jim Hinckley, one of the affected Chrysler dealers, told The Salt Lake Tribune that he was skeptical about participating when he first heard about the arbitration. "But the more I learned, the more it looked like there might be some benefit, even if it only helps us get back some of what they owe us," The Salt Lake Tribune quoted him as saying. Another affected dealer, Homer Cutrubus, whose Chrysler dealerships in Ogden and Layton were on the company's list to be eliminated, said he was preparing the paper on Thursday in anticipating of submitting it before the Monday deadline. "We were a five-star Chrysler dealership, which meant we were among the best in the country, so I'm interested in having them tell us why they decided to terminate us," Mr. Cutrubus told the Salt lake Tribune. About Chrysler Group Chrysler Group LLC, formed in 2009 from a global strategic alliance with Fiat Group, produces Chrysler, Jeep(R), Dodge, Ram Truck, Mopar(R) and Global Electric Motorcars (GEM) brand vehicles and products. Headquartered in Auburn Hills, Michigan, Chrysler Group LLC's product lineup features some of the world's most recognizable vehicles, including the Chrysler 300, Jeep Wrangler and Ram Truck. Fiat will contribute world-class technology, platforms and powertrains for small- and medium-sized cars, allowing Chrysler Group to offer an expanded product line including environmentally friendly vehicles. About Chrysler LLC Chrysler LLC and 24 affiliates on April 30 sought Chapter 11 protection from creditors (Bankr. S.D.N.Y (Mega-case), Lead Case No. 09-50002). Chrysler hired Jones Day, as lead counsel; Togut Segal & Segal LLP, as conflicts counsel; Capstone Advisory Group LLC, and Greenhill & Co. LLC, for financial advisory services; and Epiq Bankruptcy Solutions LLC, as its claims agent. Chrysler has changed its corporate name to Old CarCo following its sale to a Fiat-owned company. As of December 31, 2008, Chrysler had $39,336,000,000 in assets and $55,233,000,000 in debts. Chrysler had $1.9 billion in cash at that time. In connection with the bankruptcy filing, Chrysler reached an agreement with Fiat SpA, the U.S. and Canadian governments and other key constituents regarding a transaction under Section 363 of the Bankruptcy Code that would effect an alliance between Chrysler and Italian automobile manufacturer Fiat. Under the terms approved by the Bankruptcy Court, the company formerly known as Chrysler LLC on June 10, 2009, formally sold substantially all of its assets, without certain debts and liabilities, to a new company that will operate as Chrysler Group LLC. Fiat has a 20 percent equity interest in Chrysler Group. Bankruptcy Creditors' Service, Inc., publishes Chrysler Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Chrysler LLC and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CHRYSLER LLC: Assigns Two Daimler Contracts to New Chrysler ----------------------------------------------------------- Chrysler LLC and its units sought and obtained authority from the Court to assume and assign two executory contracts to Chrysler Group LLC: -- a Vehicle Dismantling, Sales and Scrap Agreement between LKQ Corporation and DaimlerChrysler Corporation; and -- an EDGE Tax Credit Agreement between the State of Illinois, acting through its Department of Commerce and Economic Opportunity, and DaimlerChrysler North America Holding Corporation on behalf of DaimlerChrysler Corporation. The Debtors submit that New Chrysler has indicated its desire to take an assignment of the Contracts and to satisfy all outstanding obligations and liabilities to the Counterparties under the Contracts. About Chrysler Group Chrysler Group LLC, formed in 2009 from a global strategic alliance with Fiat Group, produces Chrysler, Jeep(R), Dodge, Ram Truck, Mopar(R) and Global Electric Motorcars (GEM) brand vehicles and products. Headquartered in Auburn Hills, Michigan, Chrysler Group LLC's product lineup features some of the world's most recognizable vehicles, including the Chrysler 300, Jeep Wrangler and Ram Truck. Fiat will contribute world-class technology, platforms and powertrains for small- and medium-sized cars, allowing Chrysler Group to offer an expanded product line including environmentally friendly vehicles. About Chrysler LLC Chrysler LLC and 24 affiliates on April 30 sought Chapter 11 protection from creditors (Bankr. S.D.N.Y (Mega-case), Lead Case No. 09-50002). Chrysler hired Jones Day, as lead counsel; Togut Segal & Segal LLP, as conflicts counsel; Capstone Advisory Group LLC, and Greenhill & Co. LLC, for financial advisory services; and Epiq Bankruptcy Solutions LLC, as its claims agent. Chrysler has changed its corporate name to Old CarCo following its sale to a Fiat-owned company. As of December 31, 2008, Chrysler had $39,336,000,000 in assets and $55,233,000,000 in debts. Chrysler had $1.9 billion in cash at that time. In connection with the bankruptcy filing, Chrysler reached an agreement with Fiat SpA, the U.S. and Canadian governments and other key constituents regarding a transaction under Section 363 of the Bankruptcy Code that would effect an alliance between Chrysler and Italian automobile manufacturer Fiat. Under the terms approved by the Bankruptcy Court, the company formerly known as Chrysler LLC on June 10, 2009, formally sold substantially all of its assets, without certain debts and liabilities, to a new company that will operate as Chrysler Group LLC. Fiat has a 20 percent equity interest in Chrysler Group. Bankruptcy Creditors' Service, Inc., publishes Chrysler Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Chrysler LLC and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CHRYSLER LLC: Dealers Pursue Plea to Overturn Contract Rejections ----------------------------------------------------------------- Chrysler LLC, now known as Old Carco LLC, previously asked the Bankruptcy Court to deny certain dealers' request to reconsider the Court's decision authorizing the rejection of executory contracts and unexpired leases with certain domestic dealers, and the Court's opinion regarding authorization of that rejection. In response to the Debtors' objection, the Affected Dealers note that in their original memorandum in support of the Request to Reconsider, they argued that the Court's Rejection Opinion contained a statement alleged to have been made by Fiat Executive, Alfredo Altavilla, which was not contained anywhere in the record. They argued that allowing the record to remain as it was would perpetrate a fraud upon the Court. Leo C. Donofrio, Esq., at Pidgeon & Donofrio GP, in Everett, Washington, relates that the Affected Dealers, however, never alleged that the fraud upon the Court was intentional. He says that the Affected Dealers understand there are thousands of pages of documents, testimony and depositions which have been entered into the record, however, an inadvertent mistake was made and the Court published a fact which does not exist in the record. "Unfortunately, the severity of that falsehood upon our clients' cause was so damaging that it was necessary for us to demonstrate how it disturbed the judicial machinery's normal function of being an impartial arbiter of the truth," Mr. Donofrio says. In the Debtors' objection to the Request, the Debtor's Counsel has taken the Disputed Testimony and "run with it in their memorandum . . . ," Mr. Donofrio argues. He explains that instead of quoting to the actual record of the case, the Debtor's counsel has taken the extraordinary step of quoting the Disputed Testimony published by the Court in its Objection. Mr. Donofrio points the Court to Page 8, Footnote 13 of the Debtor's Objection memorandum, which he says improperly attempts to "psychoanalyze the motivations of our clients" in bringing the Request by making reference to news reports which discuss nonrelated "Constitutional causes" which have absolutely nothing to do with the Request. He adds that Footnote 13 is an entirely improper attack upon the Affected Dealers and their Counsel by way of reference to controversial lawsuits which the Affected Dealers' Counsel have been involved with. "Such distractions serve no purpose before this Court other than to distract, confuse, and delay justice by throwing dirt in the Court's eyes," Mr. Donofrio contends. Against this backdrop, the Affected Dealers ask the Court to overrule the Debtors' Objection to the Request. About Chrysler Group LLC Chrysler Group LLC, formed in 2009 from a global strategic alliance with Fiat Group, produces Chrysler, Jeep(R), Dodge, Ram Truck, Mopar(R) and Global Electric Motorcars (GEM) brand vehicles and products. Headquartered in Auburn Hills, Michigan, Chrysler Group LLC's product lineup features some of the world's most recognizable vehicles, including the Chrysler 300, Jeep Wrangler and Ram Truck. Fiat will contribute world-class technology, platforms and powertrains for small- and medium-sized cars, allowing Chrysler Group to offer an expanded product line including environmentally friendly vehicles. About Chrysler LLC Chrysler LLC and 24 affiliates on April 30 sought Chapter 11 protection from creditors (Bankr. S.D.N.Y (Mega-case), Lead Case No. 09-50002). Chrysler hired Jones Day, as lead counsel; Togut Segal & Segal LLP, as conflicts counsel; Capstone Advisory Group LLC, and Greenhill & Co. LLC, for financial advisory services; and Epiq Bankruptcy Solutions LLC, as its claims agent. Chrysler has changed its corporate name to Old CarCo following its sale to a Fiat-owned company. As of December 31, 2008, Chrysler had $39,336,000,000 in assets and $55,233,000,000 in debts. Chrysler had $1.9 billion in cash at that time. In connection with the bankruptcy filing, Chrysler reached an agreement with Fiat SpA, the U.S. and Canadian governments and other key constituents regarding a transaction under Section 363 of the Bankruptcy Code that would effect an alliance between Chrysler and Italian automobile manufacturer Fiat. Under the terms approved by the Bankruptcy Court, the company formerly known as Chrysler LLC on June 10, 2009, formally sold substantially all of its assets, without certain debts and liabilities, to a new company that will operate as Chrysler Group LLC. Fiat has a 20 percent equity interest in Chrysler Group. Bankruptcy Creditors' Service, Inc., publishes Chrysler Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Chrysler LLC and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CHRYSLER LLC: New Chrysler Recalls Pickups Due to Safety Issues --------------------------------------------------------------- During a quality inspection it was found that some 2010 Chrysler Sebring, Dodge Avenger, Nitro, Jeep Liberty, Grand Cherokee, Commander and 2009-2010 Ram pickups may have been built with improperly formed brake booster push rod retaining clips or without a clip potentially resulting in push rod separation from the brake pedal assembly and a loss of braking. The quality control systems in place caught the issue early. All affected assembly plants held vehicle inventory and inspected for and replaced the clips as necessary. The company is not aware of any complaints related to this issue. No accidents, injuries or property damage have been reported. Parts that meet the appropriate specifications have been introduced into production at the plant level. Chrysler Group LLC is issuing a voluntary safety recall notice and distributing new parts that meet the appropriate specifications to our dealers for vehicle repairs. It said it will be launching the recall to the dealers starting on January 25 and begin sending notices to customers in the mail on February 3. Customers can input their Vehicle Identification Number (VIN) on Chrysler.com, Dodge.com and Jeep.com websites to check on affected vehicles starting on January 25. About Chrysler Group Chrysler Group LLC, formed in 2009 from a global strategic alliance with Fiat Group, produces Chrysler, Jeep(R), Dodge, Ram Truck, Mopar(R) and Global Electric Motorcars (GEM) brand vehicles and products. Headquartered in Auburn Hills, Michigan, Chrysler Group LLC's product lineup features some of the world's most recognizable vehicles, including the Chrysler 300, Jeep Wrangler and Ram Truck. Fiat will contribute world-class technology, platforms and powertrains for small- and medium-sized cars, allowing Chrysler Group to offer an expanded product line including environmentally friendly vehicles. About Chrysler LLC Chrysler LLC and 24 affiliates on April 30 sought Chapter 11 protection from creditors (Bankr. S.D.N.Y (Mega-case), Lead Case No. 09-50002). Chrysler hired Jones Day, as lead counsel; Togut Segal & Segal LLP, as conflicts counsel; Capstone Advisory Group LLC, and Greenhill & Co. LLC, for financial advisory services; and Epiq Bankruptcy Solutions LLC, as its claims agent. Chrysler has changed its corporate name to Old CarCo following its sale to a Fiat-owned company. As of December 31, 2008, Chrysler had $39,336,000,000 in assets and $55,233,000,000 in debts. Chrysler had $1.9 billion in cash at that time. In connection with the bankruptcy filing, Chrysler reached an agreement with Fiat SpA, the U.S. and Canadian governments and other key constituents regarding a transaction under Section 363 of the Bankruptcy Code that would effect an alliance between Chrysler and Italian automobile manufacturer Fiat. Under the terms approved by the Bankruptcy Court, the company formerly known as Chrysler LLC on June 10, 2009, formally sold substantially all of its assets, without certain debts and liabilities, to a new company that will operate as Chrysler Group LLC. Fiat has a 20 percent equity interest in Chrysler Group. Bankruptcy Creditors' Service, Inc., publishes Chrysler Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Chrysler LLC and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CHRYSLER LLC: Ohio Plan to Stay Open Until June ----------------------------------------------- Doug Rice, president of United Auto Workers Local 122, announced that Chrysler's stamping plant in Twinsburg, Ohio, will stay until June 26, 2010, according to a report by Plain Dealer. Mr. Rice told Plain Dealer that Chrysler "wanted to build up a bank of parts" before closing the plant but increasing steel prices delayed the auto maker's plans. Chrysler had originally set to close the Ohio plant by the end of March this year as part of its restructuring. The plant takes steel sheets and presses them into the shapes of door panels and other auto parts. Mr. Rice estimated that there are 415 workers at the Ohio plant, a number he expects to fall to 350 within the next month. The plant had about 1,000 workers at the time Chrysler announced the closure, Plain Dealer reported. Chrysler wants to sell the site and use the proceeds to pay off its creditors. Larry Finch, director of planning and community development for Twinsburg, said the auto maker's adviser, Capstone Advisory Group, has already received letters of interest for the property. "They're working with a number of entities that have expressed some interest. They have three or four serious contenders," Plain Dealer quoted Mr. Finch as saying. Mr. Finch said that the plant's purchase will be based on "how the lien holders will be affected, what the top bid will be." The plant has been an industrial anchor for Twinsburg for more than 50 years, making up about 13% of the city's income tax revenue in 2009. About Chrysler Group LLC Chrysler Group LLC, formed in 2009 from a global strategic alliance with Fiat Group, produces Chrysler, Jeep(R), Dodge, Ram Truck, Mopar(R) and Global Electric Motorcars (GEM) brand vehicles and products. Headquartered in Auburn Hills, Michigan, Chrysler Group LLC's product lineup features some of the world's most recognizable vehicles, including the Chrysler 300, Jeep Wrangler and Ram Truck. Fiat will contribute world-class technology, platforms and powertrains for small- and medium-sized cars, allowing Chrysler Group to offer an expanded product line including environmentally friendly vehicles. About Chrysler LLC Chrysler LLC and 24 affiliates on April 30 sought Chapter 11 protection from creditors (Bankr. S.D.N.Y (Mega-case), Lead Case No. 09-50002). Chrysler hired Jones Day, as lead counsel; Togut Segal & Segal LLP, as conflicts counsel; Capstone Advisory Group LLC, and Greenhill & Co. LLC, for financial advisory services; and Epiq Bankruptcy Solutions LLC, as its claims agent. Chrysler has changed its corporate name to Old CarCo following its sale to a Fiat-owned company. As of December 31, 2008, Chrysler had $39,336,000,000 in assets and $55,233,000,000 in debts. Chrysler had $1.9 billion in cash at that time. In connection with the bankruptcy filing, Chrysler reached an agreement with Fiat SpA, the U.S. and Canadian governments and other key constituents regarding a transaction under Section 363 of the Bankruptcy Code that would effect an alliance between Chrysler and Italian automobile manufacturer Fiat. Under the terms approved by the Bankruptcy Court, the company formerly known as Chrysler LLC on June 10, 2009, formally sold substantially all of its assets, without certain debts and liabilities, to a new company that will operate as Chrysler Group LLC. Fiat has a 20 percent equity interest in Chrysler Group. Bankruptcy Creditors' Service, Inc., publishes Chrysler Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Chrysler LLC and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CHRYSLER LLC: Sending 2nd Amended Plan to Creditors for Voting -------------------------------------------------------------- Old Carco LLC, formerly known as Chrysler LLC, and its 24 debtor subsidiaries submitted to the United States Bankruptcy Court for the Southern District of New York their Second Amended Joint Plan of Liquidation and accompanying Disclosure Statement on January 22, 2010. The Second Amended Plan and Disclosure Statement contain non- material revisions to the Amended Plan and Disclosure Statement dated January 19, 2010. Among these revisions are typographical corrections and grammatical revisions, and certain updates relating to the Debtors' bankruptcy cases and adversary proceedings. To recall, the Court approved the Disclosure Statement accompanying the Debtors' First Amended Plan on January 21, 2010. In his Disclosure Statement Order, Judge Gonzalez held that, prior to the commencement of solicitation of votes on the Plan, the Debtors (i) are authorized to make non-material revisions, updates and corrections to the Disclosure Statement and the Plan, and (ii) will file a copy of the final Disclosure Statement and any amended Plan with the Court. 2nd Amended Plan The Second Amended Plan relates that Daimler AG announced in February 2007 that it would explore all options for the Old Chrysler, including a sale, and in August of the same year, CG Investment Group, LLC, acquired a controlling interest in Chrysler Holding LLC, Old Carco's ultimate parent. The Daimler Divestiture created the first privately-held American auto company in 50 years. Daimler AG and DaimlerChrysler Holding LLC also entered into an agreement with the Pension Benefit Guaranty Corporation and CG Investor LLC, requiring Daimler AG to issue a guaranty of up to $1 billion for any shortfalls to the Debtors' pension plans. CG Investment and CGI are affiliates of Cerberus Capital Management, L.P. Ronald E. Kolka, Old Carco's Chief Executive Officer, relates that as of the Petition Date, 80.1% of the membership interests in Chrysler Parent were held by CG Investment and 19.9% of the membership interests were held by certain affiliates of Daimler AG. Pursuant to a June 2009 agreement among Chrysler Parent, CG Investment and Daimler AG, among other parties, Chrysler Parent redeemed the Daimler Owners' 19.9% membership interest. CG Investment holds 100% of the outstanding membership interests in Chrysler Parent as of January 22, 2010. The latest Plan is also amended to relate that on June 5, 2009, the Debtors entered into a settlement agreement with (1) CG Investment, (2) CGI, (3) Chrysler Parent, (4) CarCo Holding I, (5) Old Carco, (6) Daimler AG, (7) Daimler North America Finance Corporation, (8) Daimler Investments US Corporation, formerly known as DaimlerChrysler Holding Corporation, and (9) the PBGC. The agreement, also known as the Settlement Agreement III, sought to resolve various open issues related to the Daimler Divestiture, among other things. Claim Objections Consistent with the Court-approved procedures for claims objections and claims settlement, the Debtors relate they have filed seven omnibus objections seeking to disallow over 1,300 proofs of claim asserting a total of approximately $2 billion in liabilities. They reveal that two of the objections, addressing approximately 210 claims totaling approximately $110 million, have been granted. The other five omnibus objections remain pending. Penalty on Priority Tax Claim Notwithstanding the provisions of the Plan, the Second Amended Plan provides that a holder of an Allowed Priority Tax Claim will not be entitled to receive any payment on account of any penalty arising with respect to or in connection with the Allowed Priority Tax Claim. Any Claim or demand for any of that penalty will be subject to treatment in Class 3A, if not subordinated to Class 3A Claims pursuant to a Court order. The holder of an Allowed Priority Tax Claim will not assess or attempt to collect the penalty from the Debtors, the Liquidation Trust or the Liquidation Trustee, or their property, including the Liquidation Accounts, other than pursuant to its rights as a holder of an Allowed Class 3A Claim. Copies of the Second Amended Plan and Disclosure Statement are available for free at: http://bankrupt.com/misc/Chrysler_2ndAmendedPlan_012210.pdf http://bankrupt.com/misc/Chrysler_2ndAmendedDS_012210.pdf The hearing to consider confirmation of the Plan is currently set to commence March 16, 2010, at 10:00 a.m., Eastern Time. Confirmation objections are due March 2. Deadline for submitting ballots to accept or reject the Plan is also on March 2. Assuming that the requisite votes to accept the Plan are received, the applicable requirements under the Bankruptcy Code are met and the other conditions to the confirmation of the Plan are satisfied, the effective date of the Plan currently is expected to occur on or before March 31, 2010. The Joint Plan provides for the liquidation of the Debtors' remaining assets and the implementation of certain restructuring transactions and other agreements. As of the effective date of the Plan, each of the Debtors will cease to exist, and the Liquidation Trust Assets will be transferred to and vest in the Liquidation Trust free and clear of all Liens, Claims and Interests. The Debtors, according to their Plan, will not be paying the initial $4 billion loan it availed from the U.S. government through the Troubled Asset Relief Program in January 2008. Unsecured creditors will not recover anything, unless they vote to accept the Plan and the Daimler Litigation will bring in more than $25 million. The Daimler Litigation was commenced by the Official Committee of Unsecured Creditors on August 17, 2009, against certain Daimler Parties for intentional and constructive fraudulent transfer, unjust enrichment, corporate alter ego and breach of fiduciary duty. About Chrysler Group LLC Chrysler Group LLC, formed in 2009 from a global strategic alliance with Fiat Group, produces Chrysler, Jeep(R), Dodge, Ram Truck, Mopar(R) and Global Electric Motorcars (GEM) brand vehicles and products. Headquartered in Auburn Hills, Michigan, Chrysler Group LLC's product lineup features some of the world's most recognizable vehicles, including the Chrysler 300, Jeep Wrangler and Ram Truck. Fiat will contribute world-class technology, platforms and powertrains for small- and medium-sized cars, allowing Chrysler Group to offer an expanded product line including environmentally friendly vehicles. About Chrysler LLC Chrysler LLC and 24 affiliates on April 30 sought Chapter 11 protection from creditors (Bankr. S.D.N.Y (Mega-case), Lead Case No. 09-50002). Chrysler hired Jones Day, as lead counsel; Togut Segal & Segal LLP, as conflicts counsel; Capstone Advisory Group LLC, and Greenhill & Co. LLC, for financial advisory services; and Epiq Bankruptcy Solutions LLC, as its claims agent. Chrysler has changed its corporate name to Old CarCo following its sale to a Fiat-owned company. As of December 31, 2008, Chrysler had $39,336,000,000 in assets and $55,233,000,000 in debts. Chrysler had $1.9 billion in cash at that time. In connection with the bankruptcy filing, Chrysler reached an agreement with Fiat SpA, the U.S. and Canadian governments and other key constituents regarding a transaction under Section 363 of the Bankruptcy Code that would effect an alliance between Chrysler and Italian automobile manufacturer Fiat. Under the terms approved by the Bankruptcy Court, the company formerly known as Chrysler LLC on June 10, 2009, formally sold substantially all of its assets, without certain debts and liabilities, to a new company that will operate as Chrysler Group LLC. Fiat has a 20 percent equity interest in Chrysler Group. Bankruptcy Creditors' Service, Inc., publishes Chrysler Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Chrysler LLC and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CHRYSLER LLC: Dealerships to Seek Arbitration --------------------------------------------- Bryce G. Hoffman and David Shepardson at The Detroit News report that more than 1,300 General Motors Co. and Chrysler Group LLC dealers forced to give up their franchises during the companies' bankruptcy reorganizations are challenging those decisions under a new law that allows them to seek arbitration. The deadline to file arbitration requests was midnight Monday. Detroit News reports that more than 50 Michigan dealers had done so by Monday afternoon. Detroit News cited India Johnson, senior vice president of the American Arbitrators Association, who was tallying the submissions. Detroit News relates Terry Burns, executive vice president of the Michigan Automobile Dealers Association, said dealers must convince the arbitrator that businesses remain viable -- a real challenge, considering that some stores already have been closed for months and those that remain open are struggling in the face of one of the biggest downturns in the industry's history. Detroit News says the Michigan Automobile Dealers Association was counseling any dealer who might want to challenge a closure order to file to keep that option open. According to the report, some already have reconsidered, so the actual number that goes to arbitration likely will be lower. Detroit News also reports GM Chairman and CEO Edward Whitacre Jr. said Monday that 500 to 600 GM dealers have appealed. According to Detroit News, Mr. Whitacre said this month that GM is likely to reinstate "hundreds of dealers," but then backpedaled and said it could be as few as 100. Detroit News observes Mr. Whitacre has taken a more conciliatory approach to the dealer issue, acknowledging GM likely made some mistakes in its dealer closings, and said any reinstatement decisions will not threaten the company's restructuring. Detroit News also reports a source close to Chrysler said arbitrations could end up costing the company "hundreds of millions of dollars" and pose new challenges for dealers that were not ordered to close their doors. That is because Chrysler transferred some of the franchises it closed to other dealers -- in some cases on the same street. "It could be worse than going backward," that person said, according to Detroit News. "The retained dealers, the ones we chose to go forward with, are going to be put into a tough position." Detroit News recalls GM and Chrysler ordered the closures last year as part of their Chapter 11 bankruptcy reorganizations. Their aim was to better match dealer bases with dramatically reduced shares of the U.S. auto market and make it easier for those dealerships that remained to turn a profit. Detroit News relates GM says 2,000 dealers it ordered to close are eligible for arbitration. Of those, 1,300 were ordered to close outright and 700 are losing at least one GM brand. Dealerships that sell only one of the four brands that GM is closing -- Saturn, Saab, Hummer or Pontiac -- cannot appeal. Detroit News notes GM already has reversed its decisions on about 80 dealers. It also set aside $600 million to compensate dealers ordered to close and gave them until October of this year to wind down. According to Detroit News, the legislation also applies to 789 dealerships that Chrysler closed in June, or one-quarter of its network. Unlike GM, Detroit News continues, Chrysler heard no appeals, offered dealers no cash compensation and gave them just a month to close their doors. But people familiar with the situation, according to Detroit News, estimated that 80% of those dealers are still in business, either selling other brands or used cars. Detroit News says Chrysler CEO Sergio Marchionne during a roundtable interview last week at the North American International Auto Show in Detroit said the closings were a good decision in hindsight, and it was "fair and equitable and designed to yield a healthier distribution network for Chrysler." About Chrysler Group LLC Chrysler Group LLC, formed in 2009 from a global strategic alliance with Fiat Group, produces Chrysler, Jeep(R), Dodge, Ram Truck, Mopar(R) and Global Electric Motorcars (GEM) brand vehicles and products. Headquartered in Auburn Hills, Michigan, Chrysler Group LLC's product lineup features some of the world's most recognizable vehicles, including the Chrysler 300, Jeep Wrangler and Ram Truck. Fiat will contribute world-class technology, platforms and powertrains for small- and medium-sized cars, allowing Chrysler Group to offer an expanded product line including environmentally friendly vehicles. About Chrysler LLC Chrysler LLC and 24 affiliates on April 30 sought Chapter 11 protection from creditors (Bankr. S.D.N.Y (Mega-case), Lead Case No. 09-50002). Chrysler hired Jones Day, as lead counsel; Togut Segal & Segal LLP, as conflicts counsel; Capstone Advisory Group LLC, and Greenhill & Co. LLC, for financial advisory services; and Epiq Bankruptcy Solutions LLC, as its claims agent. Chrysler has changed its corporate name to Old CarCo following its sale to a Fiat-owned company. As of December 31, 2008, Chrysler had $39,336,000,000 in assets and $55,233,000,000 in debts. Chrysler had $1.9 billion in cash at that time. In connection with the bankruptcy filing, Chrysler reached an agreement with Fiat SpA, the U.S. and Canadian governments and other key constituents regarding a transaction under Section 363 of the Bankruptcy Code that would effect an alliance between Chrysler and Italian automobile manufacturer Fiat. Under the terms approved by the Bankruptcy Court, the company formerly known as Chrysler LLC on June 10, 2009, formally sold substantially all of its assets, without certain debts and liabilities, to a new company that will operate as Chrysler Group LLC. Fiat has a 20 percent equity interest in Chrysler Group. Bankruptcy Creditors' Service, Inc., publishes Chrysler Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Chrysler LLC and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) About General Motors General Motors Company -- http://www.gm.com/-- is one of the world's largest automakers, tracing its roots back to 1908. With its global headquarters in Detroit, GM employs 209,000 people in every major region of the world and does business in some 140 countries. GM and its strategic partners produce cars and trucks in 34 countries, and sell and service these vehicles through these brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, Opel, Vauxhall and Wuling. GM's largest national market is the United States, followed by China, Brazil, the United Kingdom, Canada, Russia and Germany. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. GM acquired its operations from General Motors Company, n/k/a Motors Liquidation Company, on July 10, 2009, pursuant to a sale under Section 363 of the Bankruptcy Code. Motors Liquidation or Old GM is the subject of a pending Chapter 11 reorganization case before the U.S. Bankruptcy Court for the Southern District of New York. At September 30, 2009, GM had US$107.45 billion in total assets against US$135.60 billion in total liabilities. About Motors Liquidation General Motors Corporation and three of its affiliates filed for Chapter 11 protection on June 1, 2009 (Bankr. S.D.N.Y. Lead Case No. 09-50026). General Motors changed its name to Motors Liquidation Co. following the sale of its key assets to a company 60.8% owned by the U.S. Government. The Honorable Robert E. Gerber presides over the Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors in their restructuring efforts. Al Koch at AP Services, LLC, an affiliate of AlixPartners, LLP, serves as the Chief Executive Officer for Motors Liquidation Company. GM is also represented by Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as counsel. Cravath, Swaine, & Moore LLP is providing legal advice to the GM Board of Directors. GM's financial advisors are Morgan Stanley, Evercore Partners and the Blackstone Group LLP. Bankruptcy Creditors' Service, Inc., publishes General Motors Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Motors Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CIMINO BROKERAGE: Cash Collateral Hearing Set for March 5 --------------------------------------------------------- The Hon. Arthur S. Weissbrodt of the U.S. Bankruptcy Court for the Northern District of California will continue to consider Cimino Brokerage Company's cash collateral use at a hearing on March 5, 2010, at 2:00 p.m. at San Jose Courtroom 3020. The Court authorized, on an interim basis, the Debtor to access Temple-Inland, Inc. cash collateral; and grant adequate protection to TIN. The Debtor would use the money to fund its Chapter 11 case and pay suppliers and other parties. As adequate protection for any diminution in value of the lenders' collateral, the Debtors will grant the TIN a replacement lien on postpetition assets derived. The replacement lien will be subordinate to the (i) compensation and expense reimbursement allowed to a trustee in any successor Chapter 7 case; and (ii) fees payable to the U.S. Trustee. About Cimino Brokerage Salinas, California-based Cimino Brokerage Company, a California general partnership -- aka Cimino Brothers Produce and dba Cimino Brothers Produce -- was founded over 15 years ago by the Cimino family, which has been in the agricultural business since 1895. The Debtor is currently owned 50% by Vincent Cimino, 25% by Armand Cimino and 25% by Stephanie Cimino. The Company is a year-round grower, shipper and distributor of fresh vegetables and fruits, primarily broccoli. The Company, through its Mexican wholly-owned subsidiary (Cimino Brothers Produce Mexico S.A. de C.V. is the creator of the Asian Cut Crown broccoli category, and has developed the largest national network of Asian foodservice distributors and customers in the nation. The Company's administrative operations are carried out from its facilities in Salinas, California. The Company's primary cooling facilities in the United States are located in Laredo, Texas. The Company filed for Chapter 11 bankruptcy protection on November 24, 2009 (Bankr. N.D. Calif. Case No. 09-60291). Todd M. Arnold, Esq., at Levene, Neale, Bender, Rankin, and Brill assists the Company in its restructuring effort. The Company listed US$10,000,001 to US$50,000,000 in assets and US$10,000,001 to US$50,000,000 in liabilities. CINEMA FUSION: Loan Default Prompts Chapter 11 Filing ----------------------------------------------------- Sherri Cruz at Orange County Business relates Cinema Fusion filed for Chapter 11 bankruptcy listing debts of between $1 million and $10 million. The Chapter 11 filing came a month after the Company defaulted on its debt, according to the report. Cinema Fusion operates movie theaters at The Shops at Anaheim GardenWalk. The Company's developer, Excel Realty Holdings, is in talks with an arm of Citigroup Inc. to rework the terms of its loan. The Company has not paid more than $188 million in debt since September last year. CNG HOLDINGS: Moody's Assigns Corporate Family Rating at 'B3' ------------------------------------------------------------- Moody's has assigned a B3 Corporate Family Rating to CNG Holdings, Inc., and a B3 senior secured debt rating to the $200 million Senior Secured Notes issued by the company, with a stable outlook. CNG's ratings reflect the company's credit strengths, including an extensive and well-established retail network providing financial services to the un-banked and under-banked population, particularly in the U.S. (#4 position), where the company maintains 1,066 stores in 28 states, and to a lesser degree in the U.K. (#2 position), where the company currently maintains 140 stores and plans considerable further growth over the next several years. CNG's credit strengths also include the company's experienced, long-tenured management team, as exemplified by President David Davis (14 years) and EVP/Founder Jared Davis (15 years). In addition, the company enjoys solid underlying demand fundamentals from large un-banked/under-banked populations in both the U.S. (~ 60 million adults or ~ 25% of the U.S. population) and the U.K. (~ 8.4 million or ~ 14% of the population). Finally, the company will have a long average debt maturity profile post- issuance of the Senior Secured Notes, which will have a 5-year term. Balancing these strengths are a number of credit challenges facing CNG, including material ongoing political, regulatory, and litigation risks, particularly in the company's U.S. payday lending business. These risks may become even more pronounced going forward given currently pending financial and regulatory reform initiatives, including the potential establishment of a Consumer Financial Protection Agency with purview over mortgages, credit cards, and payday loans. Such risks are accentuated by CNG's heavy revenue and earnings concentration in US payday lending which currently comprises approximately 80% of CNG's consolidated revenues. This is a significant risk factor, in Moody's view, given the political and regulatory pressure being felt by this industry. This is partially mitigated by CNG's growing international operations (UK), which are adding profitable geographic diversification with good growth prospects. The company's additional credit challenges are reflected in CNG's high leverage as well as debt service metrics such as adjusted EBIT/interest expense, which are indicative of a low single-B rating; a privately held ownership structure which limits financial flexibility; the inherently high credit risk profile of CNG's customer base, and limited asset coverage for the Senior Secured Notes noteholders after giving effect to the first priority secured position of the bank revolving credit facilities. The continuing political risks pertaining to this sector have been incorporated into CNG's B3 ratings and stable outlook. Legislative initiatives (such as those underway in Illinois and Wisconsin) could potentially be more disruptive to CNG's profitability and coverages than expected, therefore representing a performance uncertainty that materially constrains the rating. CNG is headquartered in Cincinnati, OH, and issued these Senior Secured Notes as part of a recent global refinancing in the ordinary course of business. CNG HOLDINGS: S&P Assigns 'B' Counterparty Credit Rating -------------------------------------------------------- On Jan. 25, 2009, Standard & Poor's Rating Services assigned its 'B' long-term counterparty credit rating to Cincinnati, Ohio-based CNG Holdings Inc. At the same time, S&P assigned its 'B' senior secured debt rating to the company, with a recovery rating of '3'. The outlook is stable. S&P's ratings on CNG are based on the company's negative tangible equity, inconsistent earnings, and moderate interest coverage. CNG's payday-loan product concentration and its reliance on third parties to fund loans in Texas also limit the rating. The moderate credit risk inherent in payday lending, favorable consumer demand for payday lending products, and operational advantages relative to smaller competitors partly offset the weaknesses. The high cost and incidence of customer refinancing associated with payday loans continue to draw scrutiny from government officials and consumer groups. Potential legislative actions in Ohio, Arizona, and Maryland related to short-term consumer loans are likely to reduce or eliminate CNG's earnings from those states. But regulatory actions also tend to hurt smaller competitors, enabling larger lenders, such as CNG, to gain market share. As S&P enters 2010, management views the North American market as mature; thus, much of CNG's plan for growth is dependent on growing its overseas operations in the U.K. Currently, the U.K. operations' contribution to EBITDA is negligible. However, S&P believes CNG's focus on rapid overseas growth entails significant strategic and operational risk. The stable outlook balances the performance and adequate cash flow of the firm's U.S. operations against the operational risk of management's U.K. expansion plans. S&P could raise the rating if the company can expand its overseas business while maintaining adequate profitability and leverage. S&P could lower the rating if leverage -- measured by cash-flow coverage of debt and interest -- rises because of decreased cash flow or increased debt, or due to material adverse legal/regulatory actions. COACHMEN INDUSTRIES: Unit Has Deal to Build College Residence Hall ------------------------------------------------------------------ Mod-U-Kraf Homes, LLC, a subsidiary of Coachmen Industries, Inc. on January 18, 2010, entered into a contract with a private liberal arts college for the construction of a new residence hall at the college's campus in Virginia. The terms of the contract call for the Company to design, build and deliver the project to specifications that will enable the new residence hall, when completed, to qualify for LEED Silver designation. The total contract price for design, construction, delivery, and finish of the new residence hall is approximately $4.5 million. Work on the project is to begin immediately, and will be substantially completed by the Company before August 2010. The Company anticipates that the bulk of the revenue for this project will be recognized by the end of the second quarter of 2010. About Coachmen Industries Coachmen Industries, Inc., doing business as All American Group, is one of America's premier systems-built construction companies operating under the ALL AMERICAN BUILDING SYSTEMS(R), ALL AMERICAN HOMES(R) and MOD-U-KRAF(R) brands, as well as a manufacturer of specialty vehicles through a joint venture with ARBOC Mobility, LLC. All American Group is a publicly held company with stock quoted and traded on the over-the-counter markets under the ticker COHM.PK. All American Group includes All American Homes, LLC and Mod-U- Kraf, LLC, which combined are one of the nation's largest builders of systems-built residential homes. Models range from single- story ranches to spacious two-story colonials to beautifully rustic log homes, under the Ameri-Log(R) brand. A line of solar homes that can generate low to zero energy bills is available under the Solar Village(R) brand. All American Building Systems, LLC, builds large scale projects such as apartments, condominiums, dormitories, hotels, military and student housing. The Company's construction facilities are located in Colorado, Indiana, Iowa, North Carolina and Virginia. * * * In March 2009, Coachmen's independent public accounting firm, Ernst & Young LLP, said that despite the Company's sale of the assets related to its RV Segment, its recurring net losses and lack of current liquidity raise substantial doubt about its ability to continue as a going concern. Coachmen said its ability to continue as a going concern is highly dependent on its ability to obtain financing or other sources of capital. COINMACH SERVICE: S&P Raises Corporate Credit Rating to 'B-' ------------------------------------------------------------ Standard & Poor's Ratings Services said it raised its corporate credit rating on Plainview, New York-based Coinmach Service Corp. to 'B-' from 'CCC'. CSC recently completed the exchange of its subordinate notes to payment-in-kind preferred equity securities in late December 2009, improving its liquidity position by eliminating accrued cash interest payments. At the same time, S&P raised its issue-level ratings on CSC's senior secured bank debt to 'B' from 'CCC+'. The debt consists of a $50 million revolving credit facility due 2013, a $50 million delay draw term loan due 2014, and a $725 million term loan due 2014. The recovery rating remains '2', indicating S&P's expectation of substantial (70%-90%) recovery for lenders in the event of a payment default. The outlook is stable. S&P estimate that CSC had about $1.2 billion in balance sheet debt outstanding (including about $271 million in PIK-preferred stock) at the completion of the exchange. "The rating action reflects S&P's belief that liquidity has improved following the exchange of the company's remaining outstanding subordinated notes due 2015 for PIK-preferred securities," said Standard & Poor's credit analyst Christopher Johnson. S&P estimates that the entire transaction, including the partial exchange dated Sept. 30, 2009, of about $40.9 million in senior subordinated debt for PIK-preferred securities and the conversion of the company's outstanding $186 million 10.125% senior unsecured notes due 2015 to PIK interest through November 2012, will result in annual cash interest savings of about $45 million, thereby restoring positive free cash flow. In addition, S&P believes the entire conversion of the senior subordinated notes will result in lower covenant defined debt and adequate covenant cushion of greater than 15% on the company's maximum leverage covenant over the next year. "Still," added Mr. Johnson, "leverage remains very high, and S&P believes that beyond 2012, the company will again need to address the cash interest burden associated with its highly leveraged capital structure." S&P estimates that pro forma for the transaction, adjusted debt to EBITDA (including S&P's standard adjustments for operating leases and 100% debt treatment of the company's outstanding PIK-preferred equity securities totaling about $271 million) was about 9.6x compared with a ratio of about 9.4x for the 12 months ended Sept. 30, 2009. COLONIAL BANCGROUP: Can Access Cash on Hand to Pay Bills -------------------------------------------------------- Russell Hubbard at The Birmingham News says the U.S. Bankruptcy Court in Montgomery authorized Colonial BancGroup to use cash on hand to pay bills. The Company said it is operating on a monthly budget of $95,000. The Company board members are collecting $6,000 a month in compensation. About The Colonial BancGroup Headquartered in Montgomery, Alabama, The Colonial BancGroup, Inc. (NYSE: CNB) was holding company to Colonial Bank, N.A, its banking subsidiary. Colonial bank -- http://www.colonialbank.com/ -- operated 354 branches in Florida, Alabama, Georgia, Nevada and Texas with over $26 billion in assets. On August 14, 2009, Colonial Bank was seized by regulators and the Federal Deposit Insurance Corporation was named receiver. The FDIC sold most of the assets to Branch Banking and Trust, Winston-Salem, North Carolina. BB&T acquired $22 billion in assets and assumed $20 billion in deposits of the Bank. Colonial BancGroup filed for Chapter 11 bankruptcy protection on August 25, 2009 (Bankr. M.D. Ala. Case No. 09-32303). W. Clark Watson, Esq., at Balch & Bingham LLP and Rufus T. Dorsey IV, Esq., at Parker Hudson Rainer & Dobbs LLP, assist the Company in its restructuring effort. The Company listed $45,000,000 in assets and $380,000,000 in debts in its bankruptcy filing. COMMERCIAL VEHICLE: Delays Planned Sale of $2-Mil. in Securities ---------------------------------------------------------------- Commercial Vehicle Group, Inc., has filed with the Securities and Exchange Commission Amendment No. 2 to Form S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 to delay the effective date of its registration statement related to the primary offering by the Company of $200,000,000 in debt or equity securities. CVG said selling stockholders may offer and sell up to 344,014 shares of the Company's common stock from time to time under the prospectus, which shares are issuable upon exercise of warrants held by selling stockholders. CVG will not receive any proceeds from the sale of common stock by the selling stockholders. A full-text copy of Amendment No. 2 is available at no charge at: http://ResearchArchives.com/t/s?4e42 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. 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. * * * 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. COMMONWEALTH EDISON: Fitch Raises Issuer Default Rating From 'BB+' ------------------------------------------------------------------ Fitch Ratings has upgraded the Issuer Default Ratings and instrument ratings of Commonwealth Edison Company and affirmed the ratings of Exelon Corp. and subsidiaries Exelon Generation Company, LLC, and PECO Energy Company. The Rating Outlook for all entities is Stable. Fitch has upgraded these ratings: Commonwealth Edison Company -- Long-term IDR to 'BBB- from 'BB+'; -- First mortgage bonds to 'BBB+' from 'BBB'; -- Senior unsecured debt to 'BBB' from 'BBB-'; -- Preferred stock to 'BB+' from 'BB'; -- Short-term IDR to 'F3' from 'B'; -- Commercial paper to 'F3' from 'B'. Comed Financing Trust III -- Preferred stock to 'BB+' from 'BB'. Fitch has affirmed these ratings: Exelon Corp. -- IDR at 'BBB+'; -- Senior unsecured debt at 'BBB+'; -- Commercial paper at 'F2'; -- Short-term IDR at 'F2'. Exelon Generation Co., LLC -- IDR at 'BBB+'; -- Senior unsecured debt at 'BBB+'; -- Commercial paper at 'F2'; -- Short-term IDR at 'F2'. PECO Energy Co. -- IDR at 'BBB+'; -- First mortgage bonds at 'A'; -- Preferred stock at 'BBB'; -- Commercial paper at 'F2'; -- Short-term IDR at 'F2'. PECO Energy Capital Trust III -- Preferred stock at 'BBB'. PECO Energy Capital Trust IV -- Preferred stock at 'BBB'. The upgrade of Comed reflects the financial improvement achieved over the past year, a more settled regulatory and legislative environment in Illinois and moderate capital expenditures that should limit future external funding requirements. In addition, the power procurement process in Illinois is progressing as expected and Comed has no commodity price exposure. The financial improvement realized in 2009 is due in large part to a $274 million rate increase effective October 2008 and lower interest expense that more than offset reduced demand driven by the poor economic climate and mild weather. Going forward credit measures should benefit from recently implemented cost controls and legislation enacted in 2009 that provides Illinois utilities the ability to adjust their rates annually, through a rider mechanism, to reflect increases or decreases in annual uncollectible accounts from 2008 and beyond. Comed under-collected approximately $26 million in 2008 and approximately $32 million during the nine months ended Sept. 30, 2009. On Sept. 8, 2009, the company filed a proposed tariff to recover the bad debt expense in accordance with the legislation and on Jan. 14, 2010, the Administrative Law Judge issued a proposed order adopting the proposed tariffs. An Illinois Commerce Commission order is expected in early February. The lingering effect of the economic recession on delivery revenues and future rate filings are the primary credit concerns. Comed is expected to file for a rate increase later this year with new rates effective in 2011. The timing of the rate filing and results could be affected by the current economic environment. Also, while Fitch anticipates a slow economic recovery in 2010, electricity demand is likely to remain below historical levels. The affirmation of EXC's ratings reflects the company's strong consolidated financial profile, the credit quality and earnings capacity of its largest subsidiary and primary source of cash flow, Exgen, which operates a low cost and low emission competitive electric generation business, as well as the earnings stability of its two regulated utility subsidiaries, PECO and Comed, and disciplined financial management. The ratings of Exgen are supported by very strong credit ratios, the favorable competitive position of its wholesale electric power business and a three-year forward hedging strategy that limits earnings and cash flow volatility. The ratings also consider the strong liquidity provided by the company's $4.8 billion bank credit facility, which matures in 2012. The financial hedge targets are 90%-98% of expected generation in year one, 70%-90% in year two and 50%-70% in year three. Approximately 90% of Exgen's electricity production is derived from base load nuclear facilities that are low on the dispatch curve and stand to benefit from any new legislation limiting greenhouse gas emissions. Although financial measures are expected to trend downward in 2010, they remain far superior to its peer group of wholesale generation companies and to Fitch's rating guidelines. The expected downtrend in financial ratios reflects relatively weak forward power prices as well as rising capital expenditures associated with a discretionary nuclear uprate program. In 2011, lower power prices are mitigated by the expiration of a below market contract with affiliate PECO. The ratings of PECO reflect solid financial measures and the absence of commodity price exposure. Also, concerns over legislative interference into the transition to market-based rates beginning in 2011 have abated with the completion and regulatory approval of the initial solicitations for 2011 power supply and a decline in power prices. There are no pending legislative or regulatory initiatives to limit recovery of power procurement costs and all procurement costs are expected to be recovered from customers on a timely basis. The ratings also consider a rising capital expenditure program largely attributable to plans to invest approximately $225 million over the next three years (2010- 2012) in smart meters (net of a $125 million federal stimulus grant). Over the next 10-15 years PECO plans to invest $650 million for advanced metering infrastructure, including $100 million over the next three years for smart grid investments. The advanced metering is required by Act 129, which provides for cost recovery through a surcharge, including a return on investment. The smart grid investments will be recovered through traditional transmission and distribution rate cases. COPPERFIELD INVESTMENTS: Claimant Denied Derivative Standing ------------------------------------------------------------ WestLaw reports that a claimant that sought to pursue avoidance and other claims on the behalf of a Chapter 11 estate could not show an injury-in-fact resulting from the plan administrator's failure to bring the proposed claims, since the claimant, which at most held an equity interest on which no distribution was to be made under the confirmed plan, had no right to share in the proceeds of the proposed claims or other sufficient financial interest in the outcome of the proposed litigation. Therefore, the claimant lacked Article III standing to move for derivative standing to prosecute the litigation on the estate's behalf. In re Copperfield Investments, LLC, --- B.R. ----, 2010 WL 92492 (Bankr.E.D.N.Y.) Copperfield Investments, LLC, a mortgage servicer located in Jericho, N.Y., sought Chapter 11 bankruptcy protection (Bankr. E.D.N.Y. Case No. 07-71327) on April 17, 2007. Roy J. Lester, Esq., at Lester & Associates, P.C., represents the Debtor. When it filed for bankruptcy, the Debtor reported $140,047,500 in total assets and $95,000,000 in total debts. David Pauker, in his capacity as the Debtor's Chapter 11 Trustee, successfully prosecuted a chapter 11 plan to confirmation in early 2009. CREDIT ACCEPTANCE: S&P Assigns 'BB-' Senior Secured Debt Rating --------------------------------------------------------------- Standard & Poor's Ratings Services said that it has assigned its 'BB-' senior secured debt rating to Credit Acceptance Corp.'s $225 million senior secured notes. Credit Acceptance's adequate collateral afforded by assets not sold to securitizations and the firm's strong leverage and interest-coverage metrics support S&P's rating on the firm's $225 million of senior secured notes. Credit Acceptance has been consistently profitable and its management has crafted a strategy that provides a buffer against competitive threats. The firm's monoline business profile, concentration in lending to deep subprime customers, and concentrated ownership partially offset its strengths. With $1.2 billion in assets and $452 million of equity as of Sept. 30, 2009, Credit Acceptance is smaller than peers, particularly compared to those with a nationwide franchise. Maintenance covenants requiring that Credit Acceptance maintain asset coverage on the notes of 1.25x and overall leverage of 3.25x enhance S&P's view of the notes. At the end of third-quarter 2009 the firm's overall ratio of debt to adjusted total equity, at 1.2x, is strong for the rating. Its earnings have also remained robust through the severe recession, with return on average assets improving to an annualized rate of 12.1% through the first nine months of 2009 from 6.0% in 2008. S&P expects coverage levels to exceed significantly the levels stipulated in the debt covenants, and the firm's strong earnings to continue to provide sufficient cushion against modest changes in asset quality. Credit Acceptance's concentration in deep subprime lending and its dependence on wholesale funding partly offset these strengths. The founder and Chairman of the Board, Donald A. Foss, owns the majority of shares of the company. This presents key man, succession, and governance risks because of the power concentration. Ratings List Credit Acceptance Corp. Counterparty Credit Rating BB-/Stable/-- $225 Million Sr. Secured Notes BB- DESIGNER LICENSE: Taps Goldberg Weprin as Bankruptcy Counsel ------------------------------------------------------------ Designer License Holding Company, LLC, asks the U.S. Bankruptcy Court for the Southern District of New York for permission to employ Goldberg Weprin Finkel Goldstein LLP as counsel. Goldberg Weprin will, among other things: -- provide the Debtor with necessary legal advice in connection with the operation and rehabilitation of its business during the Chapter 11 proceedings and its responsibilities and duties as a debtor-in-possession; -- represent the Debtor in all Court proceedings before the Court; and -- prepare all necessary legal papers, petitions, orders, applications, motions, reports and plan documents on behalf of the Debtor. Kevin J. Nash, a member of Goldberg Weprin, tells the Court that prepetition, the firm received a $20,000 retainer plus an advance $3,000 for disbursements. The hourly rates of Goldberg Weprin's personnel are: Partners $300 - $495 Associates $200 - $400 Mr. Nash assures the Court that Goldberg Weprin is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Mr. Nash can be reached at: Goldberg Weprin Finkel Goldstein LLP 1501 Broadway, 22nd Floor New York, NY 10036 Tel: (212)-301-6944 Fax: (212) 422-6836 New York City based, Designer License Holding Company, LLC filed for Chapter 11 on December 31, 2009, (Bankr. S.D. N.Y. Case No. 09-17661). In its petition, the Debtor listed assets and debts both ranging from $10,000,001 to $50,000,000. DESIGNER LICENSE: U.S. Trustee Picks 3-Member Creditors Panel ------------------------------------------------------------- Diana G. Adams, the U.S. Trustee for Region 2, appointed three members to the official committee of unsecured creditors in the Chapter 11 case of Designer License Holding Company, LLC. The Creditors Committee members are: 1. Labels Inter-Global Inc. Attn: Steve Ziangos 109 W. 38th Street No. 701 New York, NY 10018 Tel. 212-398-0006 2. SEJ Group Co. Inc. Attn: Sam Hamway 485 7th Ave, Suite 501 New York, NY 10018 Tel. 212-643-8500 3. E-Lo Sportswear Inc. Attn: Sam Kaplan 1 Cape May St. Harrison, NJ 07029 Tel. 862-902-5225 Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at the Debtor's expense. They may investigate the Debtor's business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. Those committees will also Attnempt to negotiate the terms of a consensual Chapter 11 plan -- almost always subject to the terms of strict confidentiality agreements with the Debtors and other core parties-in-interest. If negotiations break down, the Committee may ask the Bankruptcy Court to replace management with an independent trustee. If the Committee concludes reorganization of the Debtor is impossible, the Committee will urge the Bankruptcy Court to convert the Chapter 11 cases to a liquidation proceeding. New York City based, Designer License Holding Company, LLC filed for Chapter 11 on December 31, 2009, (Bankr. S.D. N.Y. Case No. 09-17661.) Kevin J. Nash, Esq. at Goldberg Weprin Finkel Goldstein LLP assists the Debtor in its restructuring effort. In its petition, the Debtor listed assets and debts both ranging from $10,000,001 to $50,000,000. DESIGNER LICENSE: Section 341(a) Meeting Scheduled for February 4 ----------------------------------------------------------------- The U.S. Trustee for Region 2 will convene a meeting of creditors in Designer License Holding Company, LLC's Chapter 11 case on February 4, 2010, at 2:30 p.m. The meeting will be held at the Office of the U.S. Trustee, 80 Broad Street, Fourth Floor, New York City. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible 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. New York City based, Designer License Holding Company, LLC filed for Chapter 11 on December 31, 2009, (Bankr. S.D. N.Y. Case No. 09-17661). Kevin J. Nash, Esq., at Goldberg Weprin Finkel Goldstein LLP assists the Debtor in its restructuring effort. In its petition, the Debtor listed assets and debts both ranging from $10,000,001 to $50,000,000. DEWITT LEE WEARY: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Joint Debtors: Dewitt Lee Weary, III dba Care Management Tamarra Tranaise Weary dba Care Management dba Care Management 8 Country Lane Columbia, IL 62236 Bankruptcy Case No.: 10-30165 Chapter 11 Petition Date: January 25, 2010 Court: United States Bankruptcy Court Southern District of Illinois (East St Louis) Judge: Kenneth J. Meyers Debtors' Counsel: Donald M. Samson, Esq. Attorney 226 W Main St, Suite 102 Belleville, IL 62220 Tel: (618) 235-2226 Email: dnldsamson@yahoo.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 According to the schedules, the Company has assets of $1,283,754 and total debts of $1,457,405. A full-text copy of the Debtors' petition, including a list of their 20 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/ilsb10-30165.pdf The petition was signed by the Joint Debtors. EDWARD MANDEL: Voluntary Chapter 11 Case Summary ------------------------------------------------ Debtor: Edward Mandel 5653 Monterey Drive Frisco, TX 75034 Bankruptcy Case No.: 10-40219 Chapter 11 Petition Date: January 25, 2010 Court: United States Bankruptcy Court Eastern District of Texas (Sherman) Debtor's Counsel: Mark H. Ralston, Esq. Ralston Law Firm 2603 Oak Lawn Ave., Suite 230 Dallas, TX 75219 Tel: (214) 295-6416 Fax: (214) 281-8720 Email: ralstonlaw@gmail.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of its 20 largest unsecured creditors when it filed its petition. The petition was signed by Mr. Mandel. EINSTEIN NOAH: Reports Preliminary Financial Results for Q4 ----------------------------------------------------------- Einstein Noah Restaurant Group, Inc., reported preliminary financial results for the fourth quarter ended December 29, 2009. For the 13-week period ending December 29, 2009, total revenues were virtually flat at roughly $103.7 million compared to $103.9 million in the fourth quarter of 2008. System-wide comparable store sales showed sequential improvement in the latest quarter. Comparable store sales decreased 1.5%, with a 1.1% decline in transactions, while Company-owned comparable store sales decreased 1.8%, including a 1.6% decline in transactions. Based upon these top-line results, as well as the Company's expectations for an improvement in gross margins, the Company expects fourth quarter 2009 EBITDA of between $12.6 million and $12.9 million. Excluding any possible impairments, the Company expects diluted EPS of between $0.22 and $0.23. The Company also indicated that it redeemed a total of $5.0 million in Series Z Preferred Stock on December 29, 2009. This includes the $3.0 million scheduled redemption as well as an additional $2.0 million redemption. As of December 29, 2009, there was $32 million of outstanding Series Z Preferred Stock. The Company expects $3.9 million of free cash flow in the most recent quarter. For the full year, the Company expects $17.4 million of free cash flow and had $9.9 million of unrestricted cash. During the fourth quarter of 2009, the Company opened three new company-owned Einstein Bros. restaurants, two franchised restaurants, and nine Einstein Bros. licensed restaurants. In 2010, the Company anticipates signing 10 to 15 new franchise development agreements that will develop 42 to 53 new units in the upcoming years. This will result in a total of 111 to 122 anticipated units from signed development agreements and the Company expects to have a remaining pipeline by the end of 2010 of 90 to 97 units. The Company anticipates having 218 total licensed restaurants open by the end of 2010. Jeff O'Neill, Chief Executive Officer and President of Einstein Noah, stated, "We were pleased to end 2009 on a 'high note' with what we consider to be strong preliminary quarterly results, including our best comparable store sales and transaction performance of the year in what continues to be a challenging consumer spending environment. We also continue to reap the rewards of our ongoing marketing and merchandising initiatives centered on raising customer awareness, trial, and frequency, coupled with our disciplined approach to cost control and operational execution. We are proud of our ability to increase our cash flow generation and our commitment to deploying capital in a manner that can lead to long term value creation. As we move into 2010, we look forward to building upon our accomplishments as we position ourselves for an even brighter future." About Einstein Noah Restaurant Group Based in Lakewood, Colorado, Einstein Noah Restaurant Group Inc. (Nasdaq: BAGL) -- http://www.einsteinnoah.com/-- operates a a retail chain of quick casual restaurants in the United States, specializing in foods for breakfast and lunch. The Company operates locations primarily under the Einstein Bros.(R) Bagels and Noah's New York Bagels(R) brands and primarily franchises locations under the Manhattan Bage(R) brand. The Company's retail system consists of more than 600 restaurants, including more than 100 license locations, in 35 states plus the District of Columbia. As of September 29, 2009, Einstein Noah had total assets of $213,792,000 against $155,494,000 in total liabilities. The September 29 balance sheet showed strained liquidity: the Company had $36,262,000 in total current assets against $69,956,000 in total current liabilities. As of June 30, 2009, the Company had $172.9 million in total assets; and $186.5 million in total liabilities; resulting in $13.6 million stockholders' deficit. EMISPHERE TECHNOLOGIES: Board OKs Salary Hike for Two Executives ---------------------------------------------------------------- The Compensation Committee of the Board of Directors of Emisphere Technologies, Inc., on January 19, 2010, approved an increase in salary for each of Michael Garone, the Company's Chief Financial Officer and Gary Riley, the Company's Vice President, Nonclinical Development and Applied Biology. Mr. Garone's compensation for fiscal 2010 will be $241,644. Mr. Riley's compensation for fiscal 2010 will be $278,416. Also on January 19, 2010, the Compensation Committee approved the grant of 20,000 options to purchase shares of common stock to each of Mr. Garone and Mr. Riley. The option grants were made pursuant to the Company's 2007 Stock Award and Incentive Plan. Bankruptcy Warning/Going Concern At September 30, 2009, the Company's consolidated balance sheets showed $9.2 million in total assets and $49.7 million in total liabilities, resulting in a $40.5 million shareholders' deficit. At September 30, 2009, Emisphere reported cash and restricted cash of $7.2 million, compared to $1.5 million at June 30, 2009. In December, Emisphere said Novartis Pharma AG has agreed to extend the maturity date of Emisphere's Convertible Promissory Note to February 26, 2010. The $10 million original principal amount Note, plus interest accrued to date, was originally issued to Novartis on December 1, 2004, in connection with the Research Collaboration and Option License Agreement between the parties of that date and was originally due on December 1, 2009. In its quarterly report for the period ended September 30, 2009, the Company disclosed approximately $12.5 million was due as payment of the Novartis Note on December 1, 2009. The Company had said assuming it would be able to satisfy its obligation under the Novartis Note by some means other than the use of its existing capital resources, it anticipates its existing cash resources would enable it to continue operations only through approximately February 2010. The Company had warned it could be forced into bankruptcy had it been declared in default under the Novartis Note. Further, the Company has significant future commitments and obligations. The Company said these conditions raise substantial doubt about its ability to continue as a going concern. Consequently, the audit opinion issued by the Company's independent registered public accounting firm relating to the Company's financial statements for the year ended December 31, 2008, contained a going concern explanatory paragraph. About Emisphere Technologies Based in Cedar Knolls, New Jersey, Emisphere Technologies, Inc. (OTC BB: EMIS) -- http://www.emisphere.com/-- is a biopharmaceutical company that focuses on a unique and improved delivery of pharmaceutical compounds and nutritional supplements using its Eligen(R) Technology. The Eligen(R) Technology can be applied to the oral route of administration as well other delivery pathways, such as buccal, rectal, inhalation, intra-vaginal or transdermal. EMRISE CORP: Modifies Credit Agreement to Avert Default ------------------------------------------------------- EMRISE CORPORATION has entered into a material modification to its credit agreement with its primary lender through June 30, 2010. In December 2009, the Company did not raise any capital in an equity offering as required by the Credit Agreement and, further, believed that it may not be, at December 31, in compliance with a number of the financial covenants in the Credit Agreement, including minimum EBITDA, maximum leverage ratio and minimum liquidity. Based on these anticipated events of default, the Borrowers and the Lender began discussions regarding a plan for payment and a long-term forbearance. During such discussions, the Borrowers and Lender entered into two short-term forbearance agreements. On January 25, 2010, the Borrowers and the Lender entered into Amendment Number 8 to Loan Documents, which amends the Credit Agreement as of December 31, 2009. Amendment 8 retroactively removes the requirement to conduct an equity raise that would have otherwise triggered a default, and certain financial covenants that may have triggered a default, reduces the monthly principal payments made on January 1, 2010 and through June 30, 2010, and requires the sale of certain assets of the Borrowers. More specifically, Amendment 8 provides for the following amendments to the Credit Agreement: The financial covenants related to minimum EBITDA, maximum leverage ratio and minimum liquidity, as well as the requirement to raise capital through the issuance of the Company's common stock, have been retroactively deleted and removed as ongoing obligations of the Borrowers. Amendment 8 does not remove or alter the maximum capital expenditure financial covenants. Lender has the right, after February 25, 2010, to appoint an outside observer to review the Borrower's books and records and business operations, with certain limitations designed to minimize disruption to the business operations of the Borrowers. The monthly principal payments of $287,000 due on the first of each month commencing January 1, 2010, were reduced to $150,000 at January 1, 2010, and bi-weekly payments of $75,000, beginning on February 1, 2010, through maturity. Certain fees (including a $200,000 advisory fee arising in connection with Amendment 8) and certain expenses (excluding reasonable attorney fees incurred in connection with Amendment 8) owed by Borrowers have been deferred until the Maturity Date. Borrowers agreed to sell certain assets, and will retain a percentage of the proceeds of some of such sales for working capital and will use the remaining proceeds to pay down the obligations owed to the Lender. Amendment 8 provides for certain milestone events related to the sales process. Failure to achieve these milestones can result in a default under the Credit Agreement. Borrowers are also obligated to provide financial information and status reports to the Lender on a regular basis. Finally, Borrowers agreed to release Lender from potential claims. The practical effect of Amendment 8 is to provide a forbearance by the Lender through the Maturity Date on the equity raise default and the possible financial covenant defaults that was and may have been otherwise triggered under the Credit Agreement as of December 31, 2009, and allows the Company sufficient time to sell certain assets in order to pay down its obligations to the Lender. The Company believes that net proceeds from the sales of assets contemplated by Amendment 8 will be sufficient to pay the obligations owed to Lender in full. If a new event of default were to occur, including the failure to achieve any of the milestones, the Lender could accelerate the debt and exercise its rights and remedies under the Credit Agreement, which could include a foreclosure on the assets of the Borrowers before the contemplated asset sales could be completed. There can be no assurance that the Company will be able to successfully sell the contemplated assets in the agreed time frames and/or at prices sufficient to satisfy the debt owed to Lender, if at all. Even if the Company does successfully sell the contemplated assets and pay the obligations owed to the Lender in full, the ongoing revenues of the Company will be substantially reduced which could have a material adverse affect on the Company's operations and financial condition. About EMRISE Corporation EMRISE -- http://www.emrise.com/-- designs, manufactures and markets electronic devices, sub-systems and equipment for aerospace, defense, industrial and communications markets. EMRISE products perform key functions such as power supply and power conversion; radio frequency (RF) and microwave signal processing; and network access and timing and synchronization of communications networks. Primary growth driver applications for EMRISE products include the use of its RF devices in radio- controlled improvised explosive device (RCIED) jamming systems, and the use of its Network Timing and Synchronization products in edge networks. EMRISE serves customers in North America, Europe and Asia through operations in the United States, England and France. The Company has built a worldwide base of customers including a majority of the Fortune 100 in the U.S. that do business in markets served by EMRISE and many similar-size companies in Europe and Asia. ENERGY XXI: Moody's Upgrades Corporate Family Rating to 'Caa1' -------------------------------------------------------------- Moody's Investors Service upgraded Energy XXI Gulf Coast, Inc.'s Corporate Family Rating to Caa1 from Caa2 and assigned a Caa1 rating to the company's $338 million 16% Second Lien Junior Secured Notes due 2014. Moody's affirmed the Caa3 rating on Energy XXI's $276.5 million senior unsecured notes due 2013 and the Speculative Grade Liquidity rating remains SGL-3. The rating outlook is stable. "Energy XXI's recent equity funded acquisition meaningfully increased the company's reserves and production base and improved its leverage metrics," commented Pete Speer, Moody's Vice President. "However, the company's property base remains very concentrated in a few fields in the shallow water Gulf of Mexico." The company acquired MitEnergy Upstream LLC's ownership interests in certain Gulf of Mexico properties for $259 million in cash plus the assumption of $47 million of abandonment liabilities. The acquired property interests currently produce approximately 8,000 barrels of oil equivalent per day and hold an estimated 22.9 million boe of proved reserves that are 77% oil. The acquisition cost is approximately $38,000/boe of daily production and $17/boe of proved reserves, including $77.1 million of estimated future development costs. In December 2009, Energy XXI issued common stock and $110 million of 7.25% convertible perpetual preferred stock, for total net proceeds of $276.1 million. With the acquisition nearly all equity funded (we treat the preferred stock as 75% equity), the company's leverage on production and proved developed reserves was reduced to around $30,000/boepd and $15/boe. These leverage metrics are much improved, but are still high relative to higher rated E&P peers. The acquisition adds production and reserves in Energy XXI's existing property holdings, increasing its current production by 42% and proved reserves by 37%. The company's production will be 67% oil, a higher proportion than most Gulf of Mexico focused peers that will be beneficial in the current oil and natural gas price environment. However, the acquisition does not provide any diversification benefits and Energy XXI will have over 55% of pro forma production concentrated in two fields in relatively close proximity in the Gulf of Mexico. The Caa1 second lien junior secured notes rating and Caa3 senior unsecured notes rating reflect both the overall probability of default of Energy XXI, to which Moody's assigns a PDR of Caa1, and a loss given default of LGD 4 (54%) and LGD 5 (86%), respectively. The company is finalizing a borrowing base redetermination following the acquisition and expects to have a $350 million borrowing base on the senior secured revolving credit facility. The second lien junior secured notes are subordinate to the secured credit facility but will have a priority claim to the company's assets over the senior unsecured notes. Therefore the senior unsecured notes are notched two ratings beneath the Caa1 CFR under Moody's Loss Given Default Methodology, while the second lien junior secured notes are rated the same as the Caa1 CFR. The last rating action on Energy XXI was on November 19, 2009, when Moody's upgraded the CFR to Caa2 from Caa3 and the senior unsecured notes to Caa3 from Ca following the company's completion of its debt exchange. Energy XXI Gulf Coast, Inc., is an independent exploration and production company based in Houston, Texas, and is an indirect wholly owned subsidiary of Energy XXI (Bermuda) Limited. EQUINOX HOLDINGS: Moody's Cuts Rating on Senior Notes to 'B2' ------------------------------------------------------------- Moody's Investors Service changed the rating on Equinox Holdings, Inc.'s (Equinox) proposed senior secured notes due 2016 that was assigned on January 15, 2010. Specifically, the senior secured notes were lowered to B2 from B1 based on the effects of a change in the capital structure by the company. The proposed senior secured notes have been increased in size to $425 million from $400 million while the proposed HoldCo PIK notes have been reduced. Although this change does not impact the total amount of debt or the corporate family rating, it does impact the proportion of senior secured debt in the capital structure. The impact of this change, based on Moody's Loss Given Default methodology, results in a lowering of the senior secured notes rating to B2 from B1. This rating has been changed: * $425 million of Senior Secured Notes due 2016 to B2 (LGD3, 35%) from B1 (LGD 3, 32%). These ratings are unchanged: * Corporate Family Rating at B3; * Probability of Default Rating at B3. The ratings on the proposed notes are subject to Moody's satisfactory review of the final documentation. The last rating action was on January 15, 2010, when Moody's assigned a B1 rating to Equinox's proposed $400 million of senior secured notes due 2016. Concurrently, Moody's also affirmed Equinox's B3 corporate family rating and B3 probability of default rating. Headquartered in New York, Equinox Holdings, Inc., is an operator of high-end full-service fitness clubs that offer an integrated selection of Equinox-branded programs, services and products. Revenues for the twelve month period ended September 30, 2009, were approximately $344 million. EXPRESS ENERGY: Moody's Withdraws 'Ca' Corporate Family Rating -------------------------------------------------------------- Moody's Investors Service has withdrawn the ratings of Express Energy Services Operating, LP, following the joint plan of reorganization under Chapter 11 of the United States Bankruptcy Code with the United States Bankruptcy Court for the Southern District of Texas. Under the plan, which is effective, all of the obligations owed to the 75 secured lenders, $330 million including unpaid interest have been converted to equity in the new company. The new Express Energy Services is essentially debt free. The ratings being withdrawn are: * Corporate Family Rating -- Ca * Probability of Default Rating (PDR) -- D * First Lien senior secured term loan -- Ca, LGD 4 (69%) * First Lien senior secured revolver -- Ca, LGD 4 (69%) The last rating action was on July 8, 2009, when Moody's downgraded Express' CFR to Ca from Caa2, PDR to D from Caa3 and the senior secured debt ratings to Ca from Caa2. Express Energy Services Operating, LP, is headquartered in Houston, TX. EXTENDED STAY: Cerberus, et al., Wants Five Mile Suit to Stay ------------------------------------------------------------- Cerberus Capital Management LP and Centerbridge Partners LP ask the U.S. District Court for the Southern District of New York to uphold a Bankruptcy Court decision denying the transfer of a lawsuit filed by Five Mile Capital II SPE ESH LLC. Representing the Cerberus Plaintiffs, Gregg Weiner, Esq., at Fried Frank Harris Shriver & Jacobson LLP, in New York, asserts that Five Mile's Lawsuit "constitutes a related to proceeding over which the Bankruptcy Court has jurisdiction." Mr. Weiner maintains that the Bankruptcy Court properly scrutinized the Lawsuit in the context of the Chapter 11 cases of Extended Stay Inc. and its affiliated debtors, including the impact Five Mile's claims for equitable relief would have on the Bankruptcy Court's duty to oversee the bankruptcy process and the Debtors' ability to successfully reorganize. "The propriety of the Bankruptcy Court's holding that [the Five Mile Lawsuit] is a core proceeding is underscored by Five Mile's admissions regarding the true end-goal of this litigation -- to dictate the parties with whom the Debtors may, and may not, discuss potential debt restructuring alternatives as part of the ongoing reorganization process, thereby influencing how parties behave in the bankruptcy cases," Mr. Weiner says in a statement filed in the District Court, on behalf of the Cerberus Plaintiffs. The Debtors also assert that the Bankruptcy Court rightfully denied the proposed transfer of the Five Mile Lawsuit. "Five Mile does not dispute that the relief it seeks is intended to control the negotiation of a plan of reorganization in the Debtors' bankruptcy cases," Howard Comet, Esq., at Weil Gotshal & Manges LLP, in New York, contends on behalf of the Debtors. The Cerberus Plaintiffs issued the statements after Five Mile appealed to the District Court of the Bankruptcy Court's decision. Five Mile wants the District Court to determine whether or not the Bankruptcy Court erred when it denied the transfer of its lawsuit and allowed the Debtors to intervene in the lawsuit on grounds that it is a core proceeding. Five Mile sued Cerberus, Centerbridge, The Blackstone Group Inc. and GEM Capital Management Inc. after the Defendants allegedly negotiated with the Debtors on the restructuring of the Debtors' debt. Five Mile alleged that the negotiations led to an agreement on the terms of a restructuring that was detrimental to the Debtors while beneficial to the Defendants. The lawsuit was initially filed in the New York Supreme Court but was eventually moved to the Bankruptcy Court after the Debtors filed for bankruptcy protection. Five Mile then asked the Bankruptcy Court to remand the Lawsuit to the Supreme Court, which the Bankruptcy Court denied. Judge Laura Taylor Swain, who handles the civil cases ordered the attorneys, on behalf of the parties, to confer no later than March 1, 2010, to settle or resolve consensually the issues presented on the appeal. 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: Lichtenstein et al. Want Transfer Ruling Reversed ---------------------------------------------------------------- David Lichtenstein, chairman of Lightstone Holdings LLC, asks the U.S. District Court for the Southern District of New York to reverse a Bankruptcy Court ruling requiring the transfer of a lawsuit filed against him by Line Trust Corporation Ltd. and Deuce Properties Ltd. Mr. Lichtenstein's attorney, Adina Storch, Esq., at Kasowitz Benson Torres & Friedman LLP, in New York, says the Bankruptcy Court should have retained jurisdiction of the Lawsuit since there is an "unmistakable nexus" between the Lawsuit and the Chapter 11 cases of Extended Stay Inc. and its affiliated debtors. "Any outcome in the state court action will have a significant and undeniable impact upon the administration of the bankruptcy estate," Ms. Storch relates in a 30-page document. Ms. Storch says Debtors Extended Stay Inc. and Homestead Village LLC are "jointly and severally liable" with Mr. Lichtenstein and Lightstone Holdings under the guaranty agreements. "Any determination of [Mr. Lichtenstein's and Lightstone Holdings'] liability under the guaranty will necessarily impact the legal rights and financial liabilities of the Debtors," she points out. Ms. Torch adds that since any amounts awarded to Line Trust and Deuce Properties under the guaranty agreements "would proportionately reduce their claims against [Extended Stay's] estate, the cascade of bankruptcy distributions to lenders beneath appellees in the capital stack would necessarily be altered." Line Trust and Deuce Properties filed the Lawsuit after Mr. Lichtenstein allegedly failed to make a $100 million payment under the guaranty agreements. They also accused Mr. Lichtenstein of being induced by lenders to put the Debtors in bankruptcy to push junior loan holders out of the money, which in turn promised to provide him indemnification of up to $100 million and a $5 million "litigation defense war chest" to resist potential claims from junior lenders. The Lawsuit was initially filed in the Supreme Court but was moved to the Bankruptcy Court as a result of the Debtors' Chapter 11 filings. The Bankruptcy Court eventually ordered the transfer of the Lawsuit back to the Supreme Court after determining that it is not a core proceeding. Cerberus Capital Management LP, Centerbridge Partners LP and the Debtors also called for the reversal of the Bankruptcy Court decision. The Debtors assert that the Bankruptcy Court, in ordering the transfer of the Lawsuit, failed to discuss Line Trust and Deuce Properties' claims that Mr. Lichtenstein is liable under state tort law for inducing the Debtors' bankruptcy filing and is contractually liable on $100 million guarantees solely because of the bankruptcy filing. "It is settled law that state law tort claims based on a bankruptcy filing are preempted by the Bankruptcy Code and therefore give rise to federal bankruptcy jurisdiction," says the Debtors' attorney, Howard Comet, Esq., at Weil Gotshal & Manges LLP, in New York. "The Bankruptcy Code preempts such claims regardless of whether they are asserted against the bankruptcy debtor or against other parties who allegedly caused or induced the debtor's bankruptcy filing," he avers. Meanwhile, Cerberus and Centerbridge insisted in a joint statement that the claims of Line Trust and Deuce Properties must be considered a core proceeding or related to the Debtors' bankruptcy cases because their complaint was intended to challenge the Debtors' bankruptcy filing and potential plan of reorganization. Cerberus Capital and Centerbridge Partners own a portion of the $4.1 billion mortgage loan that was used to fund the acquisition of the Debtors from Blackstone Group LP. District Court Asked to Reverse Bankruptcy Court Decision David Lichtenstein, chairman of Lightstone Holdings LLC, also asks the U.S. District Court for the Southern District of New York to reverse a Bankruptcy Court decision to transfer the lawsuit filed by Bank of America N.A. and certain other plaintiffs to the New York Supreme Court. Judge James Peck of the U.S. Bankruptcy Court for the Southern District of New York earlier ordered the transfer of the BofA Lawsuit after determining that it is not a "core proceeding." 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). FAIRFAX FINANCIAL: Moody's Assigns 'Ba3' Preferred Share Rating --------------------------------------------------------------- Moody's Investors Service has assigned a preferred share rating of Ba3 to Fairfax Financial Holdings Limited's C$200 million Series E Cumulative 5-Year Rate Reset Preferred Shares. There is also a C$50 million over-allotment at the option of the underwriters. The outlook on the Preferred Shares is positive, reflecting the positive outlook on Fairfax. Fairfax will use the proceeds from this issue to bolster an already high level of cash at the holding company, to retire outstanding debt from time to time, or for other general corporate purposes. The rating agency said that the Ba3 rating is two notches lower than Fairfax's senior unsecured debt rating (Ba1), reflecting the Preferred Shares' relative position in claims priority. The notching for the Preferred Shares is consistent with Moody's guidelines for notching hybrid securities issued by insurance holding companies. Fairfax is an insurance and financial services holding company that offers property & casualty insurance products through its reinsurance and insurance operating subsidiaries. Moody's noted that Fairfax's Ba1 senior unsecured debt rating is based on a diversified revenue stream by product and geography, a strong market position within Canadian property & casualty insurance, a high level of cash resources at the parent-company level, and a high-quality, liquid investment portfolio. Several challenges remain significant to Fairfax's credit profile, which include the potential deficiency and volatility of loss reserves, exposure to catastrophe risk, weak pre-tax operating earnings (excluding realized gains), and a moderate level of financial leverage. Moody's Senior Vice President Peter Routledge commented: "Fairfax's overall capital structure will not be materially altered by this transaction, nor by the company's previous issuance of C$250 million of preferred shares in October, 2009. Although financial leverage will rise in 4Q09, it will remain within Moody's expectations at Fairfax's current ratings level." The rating agency expects Fairfax's pro-forma financial leverage to rise to 32% from 26% reported at the end of 3Q09 (due to the new preferred issuance, as well as Fairfax's purchase of the non- controlling interest in Odyssey Re Holdings Corp. during the quarter). Pro-forma earnings coverage (excluding realized and unrealized gains) is expected to decline somewhat to 2.3x from 2.6x. Moody's said these could lead to an upgrade of Fairfax's rating: (1) the stand-alone financial strength ratings of the company's lead operating P&C and/or reinsurance companies are upgraded, (2) adjusted financial leverage stays below 30% for a sustained period and adjusted earnings coverage (excluding realized gains) remains above 3x; (3) the company maintains its commitment to substantial holding company liquidity (in the $750 million to $1 billion range); (4) a further reduction in risk from Fairfax's run-off operations; and / or (5) adverse claims development at Fairfax's subsidiaries remains below 1% of gross reserves. Given the positive outlook, a downgrade in the near-term is unlikely. These conditions, however, could lead to a return to a stable outlook: (1) adjusted financial leverage stays above 30% and earnings coverage (excluding realized gains) remains below 3x; (2) significant adverse development emerges from Fairfax's run-off or operating subsidiaries, such that adverse claims exceed 1% of gross reserves; and / or (3) financial strength weakens at one of Fairfax's operating subsidiaries. Moody's last rating action on Fairfax was on September 9, 2009, when the rating agency upgraded the company's senior unsecured debt rating to Ba1 from Ba2, with a positive outlook. Fairfax is a financial services holding company which engages in property & casualty insurance, reinsurance, and investment management through its operating subsidiaries. Through September 30, 2009, Fairfax reported net premiums written of US$3.3 billion and net income of US$777 million for the nine-month period, and quarter-end common shareholders' equity of US$7.6 billion. FAIRFAX FINANCIAL: S&P Assigns 'BB' Rating on Preferred Shares -------------------------------------------------------------- Standard & Poor's Ratings Services said that it assigned its 'BB' global-scale and 'P-3' Canadian-scale ratings to Toronto-based Fairfax Financial Holdings Ltd.'s (BBB-/Stable/--) recent issuance of C$200 million in preferred shares, with an option on an additional C$50 million available to the underwriters. Fairfax issued the preferred shares from its current US$2 billion universal shelf filing. It will use the proceeds to augment its cash position, to increase short-term investments and marketable securities held at the holding-company level, to retire outstanding debt and other corporate obligations from time to time, and for general corporate purposes. The ratings on Fairfax reflect its strong business and financial profile. Fairfax, through its insurance operating subsidiaries-- including Odyssey Re Holdings Corp., Northbridge Financial units, and Crum & Forster Holdings Corp.--maintains a competitive presence in the North American commercial insurance marketplace as well as the global reinsurance market. Through Sept. 30, 2009, Fairfax reported consolidated pretax operating income of US$1.22 billion, a satisfactory combined loss and expense ratio of 99.0%, and total shareholders' equity of $7.65 billion. Upon completion of the issuance, Fairfax's total financial leverage will be about 25%, which is within S&P's expected range of 20%- 30%. Ratings List Fairfax Financial Holdings Ltd. Counterparty credit rating BBB-/Stable/-- New Rating Fairfax Financial Holdings Ltd. C$200M preferred shares Global-scale rating BB Canadian-scale rating P-3 FANNIE MAE: House Financial Services Chairman Calls for End ----------------------------------------------------------- ABI reports that House Financial Services Chairman Barney Frank (D-Mass.) said on Friday that his committee was preparing to recommend "abolishing" Fannie Mae and Freddie Mac and rebuilding the U.S. housing-finance system from scratch. Fannie Mae -- http://www.fanniemae.com/-- is a government- sponsored enterprise that was chartered by Congress in 1938. Fannie Mae securitizes mortgage loans originated by lenders in the primary mortgage market into mortgage-backed securities, which can then be bought and sold in the secondary mortgage market. Fannie Mae also participates in the secondary mortgage market by purchasing mortgage loans and mortgage-related securities, including the Fannie Mae MBS, for its own mortgage portfolio. In addition, Fannie Mae makes other investments that increase the supply of affordable housing. Under its charter, Fannie Mae may not lend money directly to consumers in the primary mortgage market. Although Fannie Mae is a corporation chartered by the U.S. Congress, and although its conservator is a U.S. government agency and Treasury owns its senior preferred stock and a warrant to purchase its common stock, the U.S. government does not guarantee its securities or other obligations. Conservatorship As reported by the Troubled Company Reporter, the U.S. government took direct responsibility for Fannie Mae and Freddie Mac, placing the government sponsored enterprises under conservatorship on September 7, 2008. James B. Lockhart, director of Federal Housing Finance Agency, said that Fannie Mae and Freddie Mac share the critical mission of providing stability and liquidity to the housing market. Between them, the Enterprises have $5.4 trillion of guaranteed mortgage-backed securities (MBS) and debt outstanding, which is equal to the publicly held debt of the United States. Among the key components of the conservatorship, the FHFA, as conservator, assumed the power of the Board and management. FONTAINEBLEAU LV: Hearing on Sale of Resort to Icahn Today ---------------------------------------------------------- Carl Icahn's Icahn Enterprises LP emerged as the only qualified bidder for Fontainebleau Las Vegas after two competing bids were deemed unqualified, relates a notice filed by Jeffrey R. Truitt, the appointed Chapter 11 Examiner in the Debtors' Chapter 11 cases. Mr. Truitt's notice, filed before the U.S. Bankruptcy Court for the District of Florida on January 20, 2010, said he received two submissions on the January 15 bid deadline. However, for various reasons, including that neither of the Submissions were accompanied by either the requisite deposit or satisfactory evidence of the financial ability to close a sale transaction, the Examiner has determined that the Submissions are not Qualified Bids. In his Ninth Examiner's report, the Examiner also related that he received bid participation materials by the January 11, 2010 deadline from three parties, two of which were considering a joint bid. However, Mr. Truitt continued, none of the parties that submitted participation materials submitted a bid by the January 15, 2010 bid deadline. Accordingly, the only Qualified Bid received by the Examiner is the Icahn Nevada Gaming Acquisition LLC bid. Based on these circumstances and in accordance with the Bidding Procedures, there will be no Auction for the Assets, he said. To recall, Mr. Icahn had pledged $106 million for the project, plus $50 million in financing during bankruptcy proceedings. A person close to the situation told The Wall Street Journal that several hedge funds looked closely at Fontainebleau in the past few weeks but ultimately decided not to bid. A hearing on January 27, 2010, is expected to approve the sale, which must close by February 9. Prior to the Examiner's notification, San Francisco real estate developer Luke Brugnara told the Las Vegas Review-Journal in an e- mail he has submitted a $170 million "all cash" offer with the U.S. Bankruptcy Court in Miami for the Fontainebleau project. Review-Journal relates Mr. Brugnara said he would pay up to $200 million for the Fontainebleau project, and that he is backed financially by a New York City hedge fund. Penn National Gaming Inc. in November initially offered $101.5 million for the project -- $50 million in cash and $51.5 million in DIP financing. Penn National raised its offer to $145 million, but was topped by Carl Icahn. Penn National eventually pulled out of the bidding process. "Penn came to the conclusion there is not a lot of value to moving forward in the process," The Wall Street Journal quoted Penn Spokesman Joe Jaffoni as saying. Craig Road Development Corporation, in a letter dated December 2, 2009, likewise informed the Court of its interest to acquire 100% of the "Tier A" casino hotel and resort from Fontainebleau. An entity formed by CRDC and certain investors -- Heroes Property Group, LLC -- will pay $350,000,000 for 100% of the Project's equity, payable in cash at closing. The letter, however, indicated the Sellers would be responsible for retiring any funded and interest bearing debt, including capital leases, of the Project. The Project's stock purchased by Heroes Property Group will be free and clear of all liens and encumbrances. In a letter sent to CRDC on December 4, 2009, Judge Cristol asked CRDC to coordinate with the Debtors and the Chapter 11 Examiner if it wishes to participate in the January 21, 2010 Auction. According to the Journal, no matter who emerges as the winner, backers of developer Jeffrey Soffer stand to reap a very small portion of the $2 billion they've already sunk into the Project. Objections Various parties have objected to the sale of Fontainebleau Las Vegas' assets. The M&M Lienholders, who hold lien claims in the aggregate amount of approximately $225 million, says that to the extent the final sale price obtained at the auction of the Debtors' and Retail Debtors' assets is less than the amount of the secured claims of the M&M Lienholders, the M&M Lienholders are objecting to the sale. Based upon the onerous and commercially unreasonable terms proposed by the prospective buyer, the M&M Lienholders and Contractor Claimants disclose that they do not consent to the sale. McKeon Door of Nevada, Inc. argues that the Sale Transaction and sale of the Purchased Assets free and clear of all claims pursuant to Section 363(f) of the Bankruptcy Code does not comply with the requirements for a sale pursuant to Section 363(f) of the Bankruptcy Code and does not provide adequate protection to McKeon Door pursuant to Section 363(e). McKeon Door asserts that it does not consent to the sale of the Purchased Assets free and clear of the McKeon Door mechanics' lien which amounts to $396,548. Secured Creditor, Young Electric Sign Co. says it does not oppose the sale which is the subject of the Sales Procedures Order, and affirmatively supports the Debtors' efforts to achieve a sale if its assets, with liens to be preserved and attach to the cash proceeds, but seeks to clarify that the sale will not vest the purchaser with any greater rights than those of the Debtors. 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: Identifies Contracts to be Assigned to Icahn -------------------------------------------------------------- Fontainebleau Las Vegas Holdings LLC and its units delivered to the Court a list of certain executory contracts and unexpired leases that they may assume and assign to Carl Icahn's Nevada Gaming Acquisition LLC, pursuant to Section 365 of the Bankruptcy Code. The Debtors have listed also the amounts that the Debtors believe must be paid to cure all defaults under the Designated Agreements as of January 19, 2010, in accordance with Section 365(b). Cure Costs were listed on an agreement-by-agreement basis or in the aggregate for multiple related Designated Agreements. No later than 12:00 p.m. (Eastern Time), on January 23, 2010, Icahn Nevada will send to all applicable NonDebtor Counterparties a notice indicating (i) the Designated Agreements which Icahn Nevada has made a final determination and agrees to take assignment of, as well as (ii) the amount of cure costs that Icahn Nevada agrees to pay in relation to the Designated Agreements. A full-text copy of the Designated Agreements and Proposed Cure Amounts is available for fee at: http://bankrupt.com/misc/FB_DS&PCASchedules.pdf Objections to the assumption and assignment of the Designated Agreements are due on January 25, 2010, not later than 3:00 p.m. (Eastern Time). A hearing to consider objections relating to assumption and assignment of a Designated Agreement will be conducted on January 27, 2010, at 10:00 a.m. (Eastern Time). Affidavits of Publications In separate affidavits, Stacey M Lewis, the Legal Clerk for the Las Vegas Review-Journal and the Las Vegas Sun, and Erin Ostenson, the advertising clerk of the publisher of The Wall Street Journal, informed the Court their newspapers have published the Debtors' Notice of Sale on December 9, 2009, or December 10, 2009. 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: Plan Exclusivity Extended Until March 1 --------------------------------------------------------- Judge A. Jay Cristol of the United States Bankruptcy Court for the Southern District of Florida has further extended the exclusive periods of Fontainebleau Las Vegas Holdings, LLC, Fontainebleau Las Vegas, LLC and Fontainebleau Las Vegas Capital Corp. to: (a) file a plan or plans of reorganization through and including March 1, 2010; and (b) solicit acceptances of that plan through and including May 3, 2010. Scott L. Baena, Esq., at Bilzin Sumberg Baena Price & Axelrod LLP, in Miami, Florida, said the extension will allow the sale process for the Debtors' assets and the Debtors' stabilization efforts to continue without distraction and to provide an opportunity for the sale process to play itself out. The Court has also granted an additional 41-day extension, or through and including February 15, 2010, of the period within which the Debtors may assume or reject unexpired nonresidential real property leases. 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) FORD MOTORS: Sequoia Restaurant Presents First Award ---------------------------------------------------- The Sequoia Restaurant disclosed that Ford Motor Company is the recipient of its first "Don't Give Up the Ship!" Award. The award states, "As the only American automobile company to avoid bankruptcy and turn down a government bailout, Ford exemplifies the spirit of the award, which honors an individual or corporation that exhibits ingenuity, tenacity, grace under pressure and the strength of character to persevere against any and all odds to get the job done." The honor will be presented in the form of a congratulatory full-page, color ad in the Jan. 26 Washington Post, the morning Ford Motor Co. CEO Alan Mulally gives the keynote speech at the Washington Auto Show's (WAS) Public Policy Days and one day before the start of the 2010 WAS on Jan. 27. "We are proud to launch the "Don't Give Up the Ship!" Award by recognizing the Ford Motor Company, an iconic American corporation whose actions set an example for all of us," said Michael Weinstein, CEO of Ark Restaurants, the parent company of the Sequoia Restaurant. In the War of 1812, Captain James Lawrence, in command of the U.S.S. Chesapeake, engaged in a bloody battle just outside Boston Harbor with a British frigate. Lying mortally wounded, the heroic captain spoke his legendary last words: 'Don't give up the ship!' That intrepid mantra is a pertinent way to remind Washingtonians and visitors, who are seeking the essence of our nation's capitol, about Sequoia's grand heritage of being named after America's celebrated presidential yacht. Bestowing, when appropriate, a "Don't Give Up the Ship!" Award to recognize and commemorate an heroic and unique act of patriotism in these trying times will not only make the restaurant's staff proud, but will also please its patrons and all the concerned citizens of our great nation. Background Under the leadership of Chief Executive Officer Alan R. Mulally, Ford Motor Company was the only one of the Big Three American Automakers to refuse government bailout money and to avoid government-sponsored bankruptcy. The company's persistence during one of the toughest years in history has paid off; in the third quarter of 2009, it reported its first profitable quarter in two years with earnings of $1 billion. According to its web site, Ford posted higher sales for every brand, resulting in a 33 percent increase in sales in December over the previous year. Additionally, "every consumer metric about the Ford brand -- including favorable opinion, consideration, shopping and intention to buy -- ended the year at record levels. In fact, favorable opinion is up more than 20 percent from the beginning of the year, and intention to buy Ford increased more than 30 percent," the web site said. "Winning Car of the Year honors for the Ford Fusion Hybrid and Truck of the Year for the Ford TransitConnect is a tremendous 'sugar high' for everyone at Ford," said Mark Field, Ford America's President, in the Detroit News (Jan. 13, 2010). About Ford Motor Headquartered in Dearborn, Michigan, Ford Motor Co. (NYSE: F) -- http://www.ford.com/-- manufactures or distributes automobiles across six continents. With about 200,000 employees and about 90 plants worldwide, the company's automotive brands include Ford, Lincoln, Mercury and Volvo. The company provides financial services through Ford Motor Credit Company. At Sept. 30, 2009, the Company had US$203.106 billion in total assets against US$210.376 billion in total liabilities. On March 4, 2009, Ford deferred future interest payments on its 6.50% Junior Subordinated Convertible Debentures due January 15, 2032, beginning with the April 15, 2009 quarterly interest payment. As reported by the Troubled Company Reporter on Nov. 4, 2009, Moody's Investors Service upgraded the senior unsecured rating of Ford Motor Credit Company LLC to B3 from Caa1. This follows Moody's upgrade of Ford Motor Company's corporate family rating to B3 from Caa1, with a stable outlook. Ford Credit's long-term ratings remain on review for further possible upgrade. On Nov. 3, 2009, S&P raised the corporate credit ratings on Ford Motor Co. and Ford Motor Credit Co. LLC to 'B-' from 'CCC+'. Ford Motor Co. carries a long-term issuer default rating of 'CCC', with a positive outlook, from Fitch Ratings. FREDDIE MAC: Seeks to File Own Liquidation Plan for Taylor Bean --------------------------------------------------------------- Daily Bankruptcy Review reports Freddie Mac is looking to wrest control over the bankruptcy liquidation of Taylor Bean & Whitaker Mortgage Corp. According to DBR, Freddie Mac contends Taylor Bean is wasting cash on the advisory firm running the company. About Freddie Mac The Federal Home Loan Mortgage Corporation (FHLMC) NYSE: FRE -- http://www.freddiemac.com/-- commonly known as Freddie Mac, is a stockholder-owned government-sponsored enterprise authorized to make loans and loan guarantees. Freddie Mac was created in 1970 to provide a continuous and low cost source of credit to finance America's housing. Freddie Mac conducts its business primarily by buying mortgages from lenders, packaging the mortgages into securities and selling the securities -- guaranteed by Freddie Mac -- to investors. Mortgage lenders use the proceeds from selling loans to Freddie Mac to fund new mortgages, constantly replenishing the pool of funds available for lending to homebuyers and apartment owners. Freddie Mac narrowed its net loss to $5,013,000,000 for the three months ended September 30, 2009, from a net loss of $25,295,000,000 for the same quarter a year ago. Freddie Mac posted a net loss of $14,097,000,000 for the nine months ended September 30, 2009, from a net loss of $26,263,000,000 for the same period a year ago. As of September 30, 2009, Freddie Mac had $866,601,000,000 in total assets against $856,195,000,000 in total liabilities. As of September 30, 2009, Total Freddie Mac stockholders' equity was $10,311,000,000; and Total equity was $10,406,000,000. Conservatorship As reported by the Troubled Company Reporter, the U.S. government took direct responsibility for Fannie Mae and Freddie Mac, placing the government sponsored enterprises under conservatorship on September 7, 2008. James B. Lockhart, director of Federal Housing Finance Agency, said that Fannie Mae and Freddie Mac share the critical mission of providing stability and liquidity to the housing market. Between them, the Enterprises have $5.4 trillion of guaranteed mortgage-backed securities (MBS) and debt outstanding, which is equal to the publicly held debt of the United States. Among the key components of the conservatorship, the FHFA, as conservator, assumed the power of the Board and management. About Taylor Bean Taylor, Bean & Whitaker Mortgage Corp. is a 27-year-old company that grew from a small Ocala-based mortgage broker to become one of the largest mortgage bankers in the United States. In 2009, Taylor Bean was the country's third largest direct-endorsement lender of FHA-insured loans of the largest wholesale mortgage lenders and issuer of mortgage backed securities. It also managed a combined mortgage servicing portfolio of approximately $80 billion. The company employed more that 2,000 people in offices located throughout the United States. Taylor Bean filed for Chapter 11 on August 24 (Bankr. M.D. Fla. Case No. 09-07047). Taylor Bean has more than $1 billion of both assets and liabilities, and between 1,000 and 5,000 creditors, according to the bankruptcy petition. GENERAL GROWTH: Hires UBS to Evaluate Financial Transactions ------------------------------------------------------------ General Growth Properties, Inc., has engaged UBS Investment Bank, a leading global full service financial firm, to assist the Company in evaluating potential financial transactions for emergence from Chapter 11, raising exit capital and with such other matters as may be required by the Board of Directors. The engagement of UBS is subject to Bankruptcy Court approval. GGP and certain of its subsidiaries filed bankruptcy in April 2009 as a result of the inability to refinance maturing mortgage loans due to the collapse of the credit markets. Since the filing, the Company has pursued subsidiary plans of reorganization to extend mortgage maturities, and, as previously reported, has confirmed plans to restructure secured mortgage loans on 112 properties aggregating approximately $11.6 billion. The Company is focused on the emergence from bankruptcy for the remaining debtors and in connection with such emergence, the reduction of corporate debt and overall leverage and establishment of a sustainable, long-term capital structure for the Company. The Company has determined that new financing will be desirable to achieve these objectives and emerge from Chapter 11. At the outset of the bankruptcy process, the Company engaged Miller Buckfire & Co., LLC, as financial advisor and investment banker. Given the unique circumstances of the Company's bankruptcy filings and the fundamental soundness of the Company's core retail business, the Board of Directors and management of the Company have determined that the Company should consider all forms of exit financing, including capital sources not generally associated with financing a company's emergence from bankruptcy. UBS has been retained to assist with this process. "The engagement of UBS complements the services provided to us by Miller Buckfire," said Adam Metz, chief executive officer of GGP. "With both advisors, we are positioned to analyze and source the most cost effective primary capital that we will need to complete the reorganization process, a goal intended to benefit all of our stakeholders." A hearing to consider the Company's motion to engage UBS is currently scheduled before the Bankruptcy Court on February 16, 2010. This release does not constitute an offer of any securities or the solicitation to buy any securities. There can be no assurance if or when the Company will offer any securities. About General Growth Properties Based in Chicago, Illinois, General Growth Properties, Inc. -- http://www.ggp.com/-- is the second-largest U.S. mall owner, having ownership interest in, or management responsibility for, more than 200 regional shopping malls in 44 states, as well as ownership in master planned community developments and commercial office buildings. The Company's portfolio totals roughly 200 million square feet of retail space and includes more than 24,000 retail stores nationwide. General Growth is a self- administered and self-managed real estate investment trust. The Company's common stock is trading in the pink sheets under the symbol GGWPQ. General Growth Properties Inc. and its affiliates filed for Chapter 11 on April 16, 2009 (Bankr. S.D.N.Y., Case No. 09-11977). Marcia L. Goldstein, Esq., Gary T. Holtzer, Esq., Adam P. Strochak, Esq., and Stephen A. Youngman, Esq., at Weil, Gotshal & Manges LLP, have been tapped as bankruptcy counsel. Kirkland & Ellis LLP is co-counsel. Kurtzman Carson Consultants LLC has been engaged as claims agent. The Company also hired AlixPartners LLP as financial advisor and Miller Buckfire Co. LLC, as investment bankers. The Debtors disclosed $29,557,330,000 in assets and $27,293,734,000 in debts as of December 31, 2008. Bankruptcy Creditors' Service, Inc., publishes General Growth Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Growth Properties Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GLOBAL GEOPHYSICAL: S&P Raises Corporate Credit Rating to 'B' ------------------------------------------------------------- Standard & Poor's Ratings Services raised its corporate credit rating on Houston-based Global Geophysical Services Inc. to 'B' from 'B-'. The outlook is stable. At the same time, S&P raised the issue-level ratings on the $30 million first-lien revolving credit facility and $120 million first-lien secured bank loan to 'B+' (one notch higher than the corporate credit rating) from 'B'. The recovery rating remains a '2', indicating expectation of substantial (70-90%) recovery in the event of a default. The issue-level rating on the company's second-lien term loan was raised to 'B' (the same as the corporate credit rating). The recovery rating remains a '4', indicating expectation of average (30%-50%) recovery in the event of a default. "The upgrade reflects Global's performance through 2009, which exceeded S&P's expectations," said Standard & Poor's credit analyst Aniki Saha-Yannopoulos. The company managed to hold its EBITDA in line with 2008 and improved its EBITDA margins despite difficult industry conditions. A combination of factors boosted Global's performance, including a large backlog as it entered 2009, a strong customer base, and increased efficiency and lower costs associated with its established seismic crews. With more stable oil prices and exploration and production companies announcing higher capital budgets for 2010, S&P expects Global to benefit in the near term through higher revenues and stronger EBITDA margins. The ratings on Global reflect the company's participation in the cyclical land seismic acquisition business, its small size, and cash flow volatility as it is exposed to the budgets of E&P companies. The ratings also incorporate the company's backlog of data-acquisition projects, its performance through 2009, and its experienced management team. As of Sept. 30, 2009, Global had approximately $176 million in debt, adjusted for operating leases. The stable outlook reflects S&P's view that Global will continue to generate EBITDA and maintain margins as industry conditions benefits from stronger oil prices and E&P companies increase their capital budgets for 2010. Further upgrades are currently limited given its business profile risks. S&P could consider a negative rating action if the company's operations deteriorate causing substantial decline in financial measures. GLUTH BROS: Judge Tosses Fraudulent Conveyance Lawsuit ------------------------------------------------------ WestLaw reports that the trustees of a Chapter 11 creditor trust adequately alleged that the prepetition sale of the debtor's interest in a joint venture was for less than reasonably equivalent value, for purposes of claims for constructively fraudulent transfer under the Bankruptcy Code and the Illinois Uniform Fraudulent Transfer Act (UFTA). The trustees alleged that the debtor sold its interest in the joint venture for approximately $31,000 at a time when the value of that interest was worth at least $320,000, as shown by the more than $89,000 in the joint venture's savings account and the joint venture's right to the payment of more than $230,000 in fees from the state, which were deposited into the joint venture's checking account two weeks after the sale of the debtor's interest. In re Gluth Bros. Const., Inc., --- B.R. ----, 2009 WL 4037795 (Bankr. N.D. Ill.) (Barbosa, J.). Considering a motion by a handful of defendants to dismiss the Trust's lawsuit (Bankr. N.D. Ill. Adv. Pro. No. 09-A-96133) against them, the Homorable Manuel Barbosa The Bankruptcy Court, Manuel Barbosa, J., held that (1) the trustees adequately alleged that a prepetition sale of debtor's interest in a joint venture was for less than reasonably equivalent value for purposes of claims for constructively fraudulent transfer; (2) the trustees failed to adequately plead the insolvency element of their claims for constructively fraudulent transfer; (3) the trustees failed to state claim for an actual fraudulent transfer; (4) the debtor's principal did not transfer bankruptcy estate property, as required for the trustees to avoid the transfers as postpetition transfers of estate property; (5) withdrawals made from bank accounts of the joint venture were not avoidable as unauthorized postpetition transfers of bankruptcy estate property; and (6) the trustees failed to state claim for turnover of bankruptcy estate property. Accordingly, Judge Barbosa dismissed the lawsuit. Bradley T. Koch, Esq., at Holmstrom & Kennedy P.C., in Rockford, Ill., represented the Defendants in this dispute. Gluth Bros. Construction, Inc., a construction project contractor based in Woodstock, Ill., sought chapter 11 protection (Bankr. N.D. Ill. Case No. 07-71375) on June 5, 2007. Robert R. Benjamin, Esq., at Querrey & Harrow, Ltd., in Chicago, represents the Debtor. At the time of the filing, the Debtor disclosed $3,214,430 in assets and liabilities totalling $8,150,879. On March 4, 2009, the Court entered an order confirming a Plan of Liquidation Dated January 27, 2009. Pursuant to the Plan, and the Gluth Bros. Construction, Inc. Creditor Trust Agreement, entered into among the Debtor, the Official Committee of Unsecured Creditors and the Creditor Trustees, all remaining property of the Debtor's estate, including causes of action, were vested in the Creditor Trust, and the Creditor Trustees were granted the authority to commence actions. Charles Dixon and Charles Graeber, Jr., serve as the Trustees of the Creditor Trust. The Trust is represented by Aaron L. Hammer, Esq., and Shira R. Isenberg, Esq., at Freeborn & Peters LLP in Chicago. GENERAL MOTORS: CEO Whitacre, et al., to Remain Under Pay Limits ---------------------------------------------------------------- Meena Thiruvengadam at Dow Jones Newswires reports a U.S. Treasury official said Monday that General Motors Co.'s newly permanent chief executive Edward E. Whitacre and others will remain subject to government pay restrictions despite GM's repayment of $5.7 billion in bailout loans. As reported by the Troubled Company Reporter on January 26, 2010, Mr. Whitacre has agreed to continue as chairman and CEO of General Motors. Speaking at a press conference at GM's headquarters, Mr. Whitacre also expressed the GM board's commitment that the company will pay back in full the U.S. Treasury and the Canadian and Ontario government loans by June. Ms. Thiruvengadam relates that GM said it would repay the remainder of an original $6.7 billion loan extended to it under the Troubled Asset Relief Program by June's end. GM repaid $1 billion of that loan in December. Ms. Thiruvengadam relates Ron Bloom, a Treasury adviser for the manufacturing and auto sector, said the repayment won't harm GM's financial position. "They're doing a little bit better actually than the plan we looked at when we put the financing together," he noted in a conference call with reporters. Ms. Thiruvengadam says GM is using unspent taxpayer loans to repay the debt. Ms. Thiruvengadam relates Mr. Bloom said it was unclear exactly how long GM executives would be subject to government pay restrictions. Even after the debt repayment, the U.S. will continue to hold 60.8% of GM's common stock and $2.1 billion in GM preferred stock. Ms. Thiruvengadam also reports Mr. Bloom continues to expect a GM initial public offering in the second half of 2010, but he said the government likely would not sell its entire holdings in the company at one time. "We do not think it is practical," he said. According to Ms. Thiruvengadam, GM and Chrysler, which also received government aid, have been adamant that they could repay taxpayer funds even though oversight bodies, such as the Congressional Oversight Panel, have been skeptical. Ms. Thiruvengadam recalls the panel in September was projecting that taxpayers' investments in the companies would likely not be recouped. It also questioned the viability of a 2010 IPO for GM. Ms. Thiruvengadam notes the U.S. in fiscal year 2009 reported losses of $30.47 billion on its more than $81 billion in assistance to the auto sector. The Treasury has provided GM alone with $49.5 billion in aid. About General Motors General Motors Company -- http://www.gm.com/-- is one of the world's largest automakers, tracing its roots back to 1908. With its global headquarters in Detroit, GM employs 209,000 people in every major region of the world and does business in some 140 countries. GM and its strategic partners produce cars and trucks in 34 countries, and sell and service these vehicles through these brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, Opel, Vauxhall and Wuling. GM's largest national market is the United States, followed by China, Brazil, the United Kingdom, Canada, Russia and Germany. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. GM acquired its operations from General Motors Company, n/k/a Motors Liquidation Company, on July 10, 2009, pursuant to a sale under Section 363 of the Bankruptcy Code. Motors Liquidation or Old GM is the subject of a pending Chapter 11 reorganization case before the U.S. Bankruptcy Court for the Southern District of New York. At September 30, 2009, GM had US$107.45 billion in total assets against US$135.60 billion in total liabilities. About Motors Liquidation General Motors Corporation and three of its affiliates filed for Chapter 11 protection on June 1, 2009 (Bankr. S.D.N.Y. Lead Case No. 09-50026). General Motors changed its name to Motors Liquidation Co. following the sale of its key assets to a company 60.8% owned by the U.S. Government. The Honorable Robert E. Gerber presides over the Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors in their restructuring efforts. Al Koch at AP Services, LLC, an affiliate of AlixPartners, LLP, serves as the Chief Executive Officer for Motors Liquidation Company. GM is also represented by Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as counsel. Cravath, Swaine, & Moore LLP is providing legal advice to the GM Board of Directors. GM's financial advisors are Morgan Stanley, Evercore Partners and the Blackstone Group LLP. Bankruptcy Creditors' Service, Inc., publishes General Motors Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Motors Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GENERAL MOTORS: Dealerships to Seek Arbitration ----------------------------------------------- Bryce G. Hoffman and David Shepardson at The Detroit News report that more than 1,300 General Motors Co. and Chrysler Group LLC dealers forced to give up their franchises during the companies' bankruptcy reorganizations are challenging those decisions under a new law that allows them to seek arbitration. The deadline to file arbitration requests was midnight Monday. Detroit News reports that more than 50 Michigan dealers had done so by Monday afternoon. Detroit News cited India Johnson, senior vice president of the American Arbitrators Association, who was tallying the submissions. Detroit News relates Terry Burns, executive vice president of the Michigan Automobile Dealers Association, said dealers must convince the arbitrator that businesses remain viable -- a real challenge, considering that some stores already have been closed for months and those that remain open are struggling in the face of one of the biggest downturns in the industry's history. Detroit News says the Michigan Automobile Dealers Association was counseling any dealer who might want to challenge a closure order to file to keep that option open. According to the report, some already have reconsidered, so the actual number that goes to arbitration likely will be lower. Detroit News also reports GM Chairman and CEO Edward Whitacre Jr. said Monday that 500 to 600 GM dealers have appealed. According to Detroit News, Mr. Whitacre said this month that GM is likely to reinstate "hundreds of dealers," but then backpedaled and said it could be as few as 100. Detroit News observes Mr. Whitacre has taken a more conciliatory approach to the dealer issue, acknowledging GM likely made some mistakes in its dealer closings, and said any reinstatement decisions will not threaten the company's restructuring. Detroit News also reports a source close to Chrysler said arbitrations could end up costing the company "hundreds of millions of dollars" and pose new challenges for dealers that were not ordered to close their doors. That is because Chrysler transferred some of the franchises it closed to other dealers -- in some cases on the same street. "It could be worse than going backward," that person said, according to Detroit News. "The retained dealers, the ones we chose to go forward with, are going to be put into a tough position." Detroit News recalls GM and Chrysler ordered the closures last year as part of their Chapter 11 bankruptcy reorganizations. Their aim was to better match dealer bases with dramatically reduced shares of the U.S. auto market and make it easier for those dealerships that remained to turn a profit. Detroit News relates GM says 2,000 dealers it ordered to close are eligible for arbitration. Of those, 1,300 were ordered to close outright and 700 are losing at least one GM brand. Dealerships that sell only one of the four brands that GM is closing -- Saturn, Saab, Hummer or Pontiac -- cannot appeal. Detroit News notes GM already has reversed its decisions on about 80 dealers. It also set aside $600 million to compensate dealers ordered to close and gave them until October of this year to wind down. According to Detroit News, the legislation also applies to 789 dealerships that Chrysler closed in June, or one-quarter of its network. Unlike GM, Detroit News continues, Chrysler heard no appeals, offered dealers no cash compensation and gave them just a month to close their doors. But people familiar with the situation, according to Detroit News, estimated that 80% of those dealers are still in business, either selling other brands or used cars. Detroit News says Chrysler CEO Sergio Marchionne during a roundtable interview last week at the North American International Auto Show in Detroit said the closings were a good decision in hindsight, and it was "fair and equitable and designed to yield a healthier distribution network for Chrysler." About Chrysler Group LLC Chrysler Group LLC, formed in 2009 from a global strategic alliance with Fiat Group, produces Chrysler, Jeep(R), Dodge, Ram Truck, Mopar(R) and Global Electric Motorcars (GEM) brand vehicles and products. Headquartered in Auburn Hills, Michigan, Chrysler Group LLC's product lineup features some of the world's most recognizable vehicles, including the Chrysler 300, Jeep Wrangler and Ram Truck. Fiat will contribute world-class technology, platforms and powertrains for small- and medium-sized cars, allowing Chrysler Group to offer an expanded product line including environmentally friendly vehicles. About Chrysler LLC Chrysler LLC and 24 affiliates on April 30 sought Chapter 11 protection from creditors (Bankr. S.D.N.Y (Mega-case), Lead Case No. 09-50002). Chrysler hired Jones Day, as lead counsel; Togut Segal & Segal LLP, as conflicts counsel; Capstone Advisory Group LLC, and Greenhill & Co. LLC, for financial advisory services; and Epiq Bankruptcy Solutions LLC, as its claims agent. Chrysler has changed its corporate name to Old CarCo following its sale to a Fiat-owned company. As of December 31, 2008, Chrysler had $39,336,000,000 in assets and $55,233,000,000 in debts. Chrysler had $1.9 billion in cash at that time. In connection with the bankruptcy filing, Chrysler reached an agreement with Fiat SpA, the U.S. and Canadian governments and other key constituents regarding a transaction under Section 363 of the Bankruptcy Code that would effect an alliance between Chrysler and Italian automobile manufacturer Fiat. Under the terms approved by the Bankruptcy Court, the company formerly known as Chrysler LLC on June 10, 2009, formally sold substantially all of its assets, without certain debts and liabilities, to a new company that will operate as Chrysler Group LLC. Fiat has a 20 percent equity interest in Chrysler Group. Bankruptcy Creditors' Service, Inc., publishes Chrysler Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Chrysler LLC and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) About General Motors General Motors Company -- http://www.gm.com/-- is one of the world's largest automakers, tracing its roots back to 1908. With its global headquarters in Detroit, GM employs 209,000 people in every major region of the world and does business in some 140 countries. GM and its strategic partners produce cars and trucks in 34 countries, and sell and service these vehicles through these brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, Opel, Vauxhall and Wuling. GM's largest national market is the United States, followed by China, Brazil, the United Kingdom, Canada, Russia and Germany. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. GM acquired its operations from General Motors Company, n/k/a Motors Liquidation Company, on July 10, 2009, pursuant to a sale under Section 363 of the Bankruptcy Code. Motors Liquidation or Old GM is the subject of a pending Chapter 11 reorganization case before the U.S. Bankruptcy Court for the Southern District of New York. At September 30, 2009, GM had US$107.45 billion in total assets against US$135.60 billion in total liabilities. About Motors Liquidation General Motors Corporation and three of its affiliates filed for Chapter 11 protection on June 1, 2009 (Bankr. S.D.N.Y. Lead Case No. 09-50026). General Motors changed its name to Motors Liquidation Co. following the sale of its key assets to a company 60.8% owned by the U.S. Government. The Honorable Robert E. Gerber presides over the Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors in their restructuring efforts. Al Koch at AP Services, LLC, an affiliate of AlixPartners, LLP, serves as the Chief Executive Officer for Motors Liquidation Company. GM is also represented by Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as counsel. Cravath, Swaine, & Moore LLP is providing legal advice to the GM Board of Directors. GM's financial advisors are Morgan Stanley, Evercore Partners and the Blackstone Group LLP. Bankruptcy Creditors' Service, Inc., publishes General Motors Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Motors Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GENERAL MOTORS: Sues BMW for Breach of Delivery Agreement --------------------------------------------------------- Motors Liquidation Company, formerly known as General Motors Corporation, commenced an adversary proceeding before the U.S. Bankruptcy Court for the Southern District of New York against Bayerische Motoren Werke Aktiengesellschaft (more commonly known as BMW) for breach of a delivery agreement. GMC and BMW entered into the 6L45 Development and Delivery Agreement on May 6, 2004, for the development, production, and sale of transmissions. The contract and its exhibits provide extensive specifications regarding the technical requirements for the transmissions. GMC, its Powertrain Group, and its subsidiary GM Strasbourg SAS, located in Strasbourg, France, fully complied with their obligations under the contract, developing and thereafter supplying transmissions to BMW in compliance with the specifications. For its part, BMW was obligated, under the terms of the contract, to purchase a minimum of 1.9 million transmissions from GMC by December 31, 2015. In late 2008, BMW requested an amendment to the contract under which GMC would supply different transmissions incorporating new technology that is not required by or provided for in the contract. GMC-and later MLC-negotiated in good faith with BMW, offering technological solutions and terms that, if accepted, would have met BMW's requests. According to the Debtors, BMW, however, repeatedly rejected every solution proposed by GMC and MLC, and ultimately informed MLC that it did not intend to comply with its purchase obligations under the contract, but rather that it would shift production of transmissions to an alternate supplier. Remarkably, BMW further threatened to seek, through the Court, to recover damages from MLC. The Debtors contend that a substantial controversy exists between the parties regarding MLC's performance under the contract that warrants declaratory judgment. Moreover, because MLC has fully performed its obligations under the contract, the Court, applying German law, should order BMW to specifically perform its obligations under the contract. In the alternative, the Court should find that BMW, through its repudiation of the agreement, has breached the contract and caused MLC to incur significant and substantial damages, leaving MLC with no alternative but to seek redress from the Court. About General Motors General Motors Company -- http://www.gm.com/-- is one of the world's largest automakers, tracing its roots back to 1908. With its global headquarters in Detroit, GM employs 209,000 people in every major region of the world and does business in some 140 countries. GM and its strategic partners produce cars and trucks in 34 countries, and sell and service these vehicles through these brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, Opel, Vauxhall and Wuling. GM's largest national market is the United States, followed by China, Brazil, the United Kingdom, Canada, Russia and Germany. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. GM acquired its operations from General Motors Company, n/k/a Motors Liquidation Company, on July 10, 2009, pursuant to a sale under Section 363 of the Bankruptcy Code. Motors Liquidation or Old GM is the subject of a pending Chapter 11 reorganization case before the U.S. Bankruptcy Court for the Southern District of New York. At September 30, 2009, GM had US$107.45 billion in total assets against US$135.60 billion in total liabilities. About Motors Liquidation General Motors Corporation and three of its affiliates filed for Chapter 11 protection on June 1, 2009 (Bankr. S.D.N.Y. Lead Case No. 09-50026). General Motors changed its name to Motors Liquidation Co. following the sale of its key assets to a company 60.8% owned by the U.S. Government. The Honorable Robert E. Gerber presides over the Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors in their restructuring efforts. Al Koch at AP Services, LLC, an affiliate of AlixPartners, LLP, serves as the Chief Executive Officer for Motors Liquidation Company. GM is also represented by Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as counsel. Cravath, Swaine, & Moore LLP is providing legal advice to the GM Board of Directors. GM's financial advisors are Morgan Stanley, Evercore Partners and the Blackstone Group LLP. Bankruptcy Creditors' Service, Inc., publishes General Motors Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Motors Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GENERATION BRANDS: Completes Restructuring and Exits Chapter 11 --------------------------------------------------------------- Generation Brands announced January 26 that it has successfully completed its financial restructuring and emerged from Chapter 11, eliminating more than $150 million of debt from its balance sheet. In conjunction with its emergence from Chapter 11, Generation Brands has received a new $20 million equity investment from an affiliate of Quad-C Management, Inc., the Company's principal stockholder. With this new investment, the Company has approximately $40 million in liquidity and no debt maturities until 2014. "Just 53 days after filing for Chapter 11, we were able to significantly de-lever the Company's balance sheet, ensure more than sufficient liquidity to support our working capital needs and emerge from Chapter 11 with the flexibility to pursue ongoing investments in new product development," said Generation Brands President and Chief Executive Officer T. Tracy Bilbrough. "Our expeditious restructuring is a testament to our devoted employees, dedicated customers and suppliers and the strong relationship we have with our lenders, noteholders and stockholders," Mr. Bilbrough added. This financial restructuring has sharply reduced the Company's debt and interest payments, better positioning Generation Brands to capitalize on opportunities both in the current market and emanating from the recovery of the housing industry and economy at large. The Company also noted that throughout its brief Chapter 11 restructuring, it met all of its customer supply needs without interruption. The Company was also able to achieve its restructuring goals without impacting its suppliers, who continued to be paid normally in the ordinary course of business. "During this process, Generation Brands met all of its financial targets. I believe that everyone at the Company is energized and excited to continue this success as we begin operating outside of Chapter 11," Mr. Bilbrough concluded. The Company filed its voluntary petitions in the U.S. Bankruptcy Court for the District of Delaware in Wilmington. The Company was advised in connection with its pre-packaged Chapter 11 financial reorganization by White & Case LLP and Barclays Capital. About Generation Brands Generation Brands is one of America's leading companies serving the lighting, electrical wholesale, home improvement, home decor, and building industries. The Company has an outstanding portfolio of fashionable and functional lighting fixtures, ceiling fans, and decorative products that provide value and growth for its customers and end-users. Generation Brands Holdings, Inc., Quality Home Brands Holdings LLC and other affiliates filed for bankruptcy protection on December 4, 2009 (Bankr. D. Del. Case No. 09-14312). QHB Holdings listed $500,000,001 to $1,000,000,000 in assets and $500,000,001 to $1,000,000,000 in liabilities. The Company was advised in connection with its pre-packaged Chapter 11 financial reorganization by White & Case LLP and Barclays Capital. Fox Rothschild LLP also serves as counsel. GTC BIOTHERAPEUTICS: LFB Converts Preferreds Into Common Shares --------------------------------------------------------------- GTC Biotherapeutics, Inc., said LFB Biotechnologies, a wholly owned subsidiary of LFB S.A. (Laboratoire Francais du Fractionnement et des Biotechnologies S.A., Les Ulis, France) and a strategic shareholder in GTC, has converted the convertible preferred stock it previously purchased in November 2009 under the terms described in the financing agreements approved by GTC shareholders in July 2009 into a total of 5.3 million shares of common stock. This completes the conversion into common shares of all convertible preferred stock acquired by LFB in 2009. LFB Biotechnologies, S.A.S., in a separate regulatory filing disclosed holding 28,469,468 shares or roughly 77.1% of the common stock of GTC. About LFB LFB is a biopharmaceutical group that develops, manufactures and markets medicinal products for the treatment of serious and often rare diseases in several major therapeutic fields, namely Hemostasis, Immunology and Intensive Care. LFB Group is the leading manufacturer of plasma-derived medicinal products in France and 6th worldwide and is also among the leading European companies for the development of monoclonal antibodies and new- generation proteins based on biotechnologies. With its strong focus on research, the LFB Group is pursuing a growth strategy that seeks to extend its activities at the international level and develop innovative therapies. In 2008, LFB reported total turnover of EUR352.4 million, an increase of 9%, and invested EUR66.6 million in product development. LFB markets its products in 20 countries around the world. Going Concern GTC said its recurring losses from operations and limited funds raise substantial doubt about its ability to continue as a going concern. As of September 27, 2009, the Company had $23.4 million in total assets against $63.1 million in total liabilities, and ($10.4) million in total redeemable convertible preferred stock, resulting in $29.2 million in stockholders' deficit. On November 2, 2009, the Company entered into a Stock Purchase Agreement with LFB Biotechnologies S.A.S., its principal stockholder, under which the Company agreed to issue to LFB $3.625 million in shares of the Company's common stock at a sales price of $1.07, which is equal to the closing price of the common stock on the Nasdaq Capital Market on October 30. On October 31, 2009, LFB notified the Company that it was exercising its option to purchase the $12.75 million of additional shares of Series E convertible preferred stock under the terms described in the financing agreements approved by the Company's shareholders in July 2009. This transaction provided the Company with roughly $6.38 million of new cash proceeds. In addition, LFB converted its existing shares of Series E convertible preferred stock it previously purchased in July into a total of roughly 10.6 million shares of common stock. Management expects that future sources of funding will include sales of equity or debt securities and new or expanded partnering arrangements. The Company said if no funds are available it would have to sell or liquidate the business. Based on its cash balance as of September 27, 2009, as well as the $10 million in cash it received from the closing of the LFB financing transactions and potential cash receipts from existing programs -- the Company anticipates it has the ability to continue its operations into the middle of the first quarter of 2010, including normal recurring debt service payments. The Company is engaged in discussions for potential new partnering transactions and plan to bring further financial resources into GTC in the future through some combination of partnering transactions and other debt or equity financing arrangements. About GTC Biotherapeutics Headquartered in Framingham, Massachusetts, GTC Biotherapeutics, Inc. (NASDAQ: GTCB) -- http://www.gtc-bio.com/-- develops, supplies, and commercializes therapeutic proteins produced through transgenic animal technology. The Company is also developing a portfolio of recombinant human plasma proteins with known therapeutic properties. The company also has a monoclonal antibody portfolio focused on follow-on biologics, including a CD20 monoclonal antibody. The intellectual property of the company includes a patent in the United States through 2021 for the production of any therapeutic protein in the milk of any transgenic mammal. Its transgenic production platform is particularly well suited to enabling cost effective development of proteins that are difficult to express in traditional recombinant production systems as well as proteins that are required in large volumes. HAMILTON BROTHERS: Case Summary & 21 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Hamilton Brothers Builders, LLC 11314 Halcyon Loop Daphne, AL 36526 Bankruptcy Case No.: 10-00266 Chapter 11 Petition Date: January 25, 2010 Court: United States Bankruptcy Court Southern District of Alabama (Mobile) Debtor's Counsel: Michael B. Smith, Esq. PO Box 40127 Mobile, AL 36640 Tel: (251) 441-8077 Email: smi067@aol.com Estimated Assets: $1,000,001 to $100,000,000 Estimated Debts: $1,000,001 to $100,000,000 According to the schedules, the Company has assets of $1,274,315, and total debts of $1,217,699. A full-text copy of the Debtor's petition, including a list of its 21 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/alsb10-00266.pdf The petition was signed by Paul Hamilton, president of the Company. HARBORWALK LP: Voluntary Chapter 11 Case Summary ------------------------------------------------ Debtor: Harborwalk, LP 1445 Harborwalk Blvd Hitchcock, TX 77563 Bankruptcy Case No.: 10-80043 Type of Business: Chapter 11 Petition Date: January 25, 2010 Court: United States Bankruptcy Court Southern District of Texas (Galveston) Judge: Letitia Z. Paul Debtor's Counsel: Marcy E. Kurtz, Esq. Bracewell & Giuliani LLP 711 Louisiana, Ste 2300 Houston, TX 77002 Tel: (713) 221-1206 Fax: (713) 221-2125 Email: marcy.kurtz@bgllp.com Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $10,000,001 to $50,000,000 The petition was signed by Lynn B. Watkins. HARRISBURG, PA: Bankruptcy Looms Amid Budget Deficit ---------------------------------------------------- Bankruptcy fears are swirling around Pennsylvania's capital city, according to an article by Marie Beaudette posted at The Wall Street Journal's Bankruptcy Beat. Management Partners Inc. on January 25, 2010, presented to Mayor Linda D. Thompson of the city of Harrisburg, Pennsylvania, the City of Harrisburg Emergency Financial Plan that defines the scope of the city's economic troubles and offers guidelines for preventing a deeper financial crisis. "The financial situation of the City of Harrisburg is just short of dire," said Gerald E. Newfarmer, President and CEO of Management Partners, Inc. Management Partners is a consulting firm that provides services to governmental organizations throughout North America. The City of Harrisburg received a grant from the Commonwealth of Pennsylvania under the auspices of the Early Intervention Program to provide a financial analysis and management audit of its operations. Management Partners began work on the project in October 2009 and submitted an interim progress report on December 18, 2009, which concluded that the City of Harrisburg was in a "state of financial crisis." "Management Partners' analysis of the City's financial circumstances indicates that the total financial deficit over the next five years is approximately $164 million, of which $144.8 million is debt service and $19.2 million is General Fund operations. "Of the debt service obligation, $68.7 million is due for payment in 2010, and the remaining amount is due between 2011 and 2015. Of the $68.7 million of debt service due in 2010, $16.8 million is due over the course of the first six months of 2010." The report provides a plan for dealing with the financial crisis, which Newfarmer said involves considerable "cash flow" issues that could cripple the city's abilities to meet its financial obligations. "The fiscal situation is caused by the debt obligations resulting from the City's Refuse Recycling Facility, the drastic downturns in the current economic conditions and institutional financial conditions," the report concludes. "In developing the Emergency Plan, we considered three primary subject areas that we believe the city must address to resolve its financial issues: obligations for debt service, cash management, and structural financial issues." Among the short-term recommendations is sale or lease of city assets, deferring capital expenditures, restructuring debt obligations, and increasing fees for city services. Mayor Thompson on Tuesday was slated to submit the Emergency Plan to the City council for its review. HARVEST OIL: Can Access Lenders' Cash Collateral Until January 31 ----------------------------------------------------------------- The Hon. Robert Summerhays of the U.S. Bankruptcy Court for the Western District of Louisiana, in a tenth interim order, authorized Harvest Oil & Gas, LLC, and its debtor-affiliates to access cash collateral of Wayzata Investments Partners, LLC, as agent for certain lenders, and Macquarie Bank Limited and its affiliates to preserve and continue their business. The Debtors are authorized to use the cash collateral until January 31, 2010. As reported in the Troubled Company Reporter on July 29, 2009, the Debtors will not pay wages or salary to any party who is not working for the Debtors. The prepetition lenders will retain their security interests and liens on the cash collateral to the fullest extent and relative priority as set forth in their respective prepetition security agreements. As partial adequate protection for any use or diminution in the value of their collateral, the prepetition lenders are granted security interests and liens in all of the property and assets of the Debtors' estates, as may be acquired postpetition, including all cash collateral in the DIP Account. About Harvest Oil and Gas, LLC Headquartered in Covington, Louisiana, Harvest Oil and Gas, LLC -- http://www.harvest-oil.com/-- is engaged on acquisition, development and exploration of energy resources. The Debtor and its debtor-affiliates filed for Chapter 11 protection on March 31, 2009 (Bankr. W.D. La. Lead Case No. 09-50397). Robin B. Cheatham, Esq., at Adams & Reese LLP, represents the Debtors in their restructuring efforts. The Debtors listed between $100 million and $500 million each in assets and debts. INTERNATIONAL ALUMINUM: Committee Trying to Slow Case ----------------------------------------------------- Bill Rochelle at Bloomberg News reports that the Official Committee of Unsecured Creditors of International Aluminum Corp. is asking the Bankruptcy Court to slow down the plan approval process. The Committee says IAC is "not a melting ice cube" and has $49 million cash. According to the report, the Committee, in a motion on Jan. 22, is asking the bankruptcy judge to push back the disclosure statement hearing, scheduled for February 17, by one month. The Committee contends the plan "unfairly discriminates against one class of unsecured creditor by purporting to pay all other unsecured creditors in full." The Committee says the plan is also infected with "sweetheart deals by management." Two members of the Committee are investors Carlyle Mezzanine Partners LP and AEA Mezzanine Funding B LLC. Mezzanine lenders would be wiped out in IAC's plan. The Chapter 11 Plan International Aluminum Corp. and its units have filed with the U.S. Bankruptcy Court for the District of Delaware a joint plan of reorganization and disclosure statement. Under the Plan, senior secured creditors -- owed $125 million on a term loan and $20 million on a revolving loan -- would receive $38 million in new notes and 100% of the equity in the reorganized companies. They will recover 72.5% to 82% of their claims. Holders of other secured claims would have their claims reinstated and will recover 100%. General unsecured claims, administrative expense claims, tax claims, certain priority non-tax claims and certain other secured claims would be paid in full. Holders of 12.75% Senior Subordinated Notes due 2014, aggregating $45 million would receive nothing on account of their claims. Carlyle Mezzanine Partners, L.P., is agent under the senior subordinated loan agreement. Existing equity interests would be extinguished and equity holders won't have any distributions. They are deemed to reject the Plan and won't be receiving ballots. About International Aluminum International Aluminum filed for Chapter 11 bankruptcy protection on January 4, 2010 (Bankr. D. Delaware Case No. 10-10003). The Company's affiliates, including IAC Holding Co. and United States Aluminum Corporation, also filed Chapter 11 bankruptcy petitions. John Henry Knight, Esq., and L. Katherine Good, Esq., at Richards, Layton & Finger, P.A., assist the Debtors in their restructuring efforts. Weil, Gotshal & Manges LLP is the Debtor's co-counsel. Moelis & Company is the Debtor's financial advisor. Kurtzman Carson Consultants LLC is the Debtor's claims agent. The Debtor listed $198 million in assets and $217 million in liabilities as of November 30, 2009. INTERNATIONAL LEASE: S&P Downgrades Unsec. Debt Rating to 'BB+' --------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on International Lease Finance Corp., including lowering the corporate credit rating to 'BBB-' from 'BBB+', and lowered the ratings on its unsecured debt to 'BB+' from 'BBB+'. The ratings remain on CreditWatch with negative implications. S&P bases the downgrade of its corporate credit rating on Los Angeles-based aircraft lessor ILFC on: * S&P's credit assessment of ILFC as a business AIG will most likely continue to own and partially fund for the next several years, while holding for eventual sale; * S&P's assessment of the likelihood of continued funding advances from AIG to ILFC; and * ILFC's shift toward secured borrowing, which reduces financial flexibility and in S&P's view will likely require amendment of the company's bank credit facilities, thus placing them on a secured basis and raising borrowing costs. "S&P bases its downgrade of ILFC's senior unsecured debt to 'BB+', one notch lower than the corporate credit rating, on an increasing proportion of secured debt (secured debt, equal to about 23% of assets, a proportion that S&P expects to increase)," said Standard & Poor's credit analyst Christopher DeNicolo. "This places unsecured creditors in an essentially subordinated position," he continued. The ratings remain on CreditWatch with negative implications. Although S&P believes AIG is likely to remain committed to supporting ILFC based on current conditions, S&P also believes there is material execution risk in planned asset sales, refinancings, and the potential amendment of credit facilities. S&P could lower its ratings if S&P concludes there is less certainty of AIG continuing to provide funding to ILFC to supplement internal cash sources, or if adverse developments raise concerns regarding its long-term business prospects or ILFC's ability to execute on material liquidity initiatives. S&P could affirm the ratings if improved aviation market and credit market conditions allow ILFC to secure substantial external funding and eliminate its reliance on further advances from AIG, conditions that would also be conducive to a sale of the company. JACUZZI BRANDS: S&P Downgrades Corporate Credit Rating to 'SD' -------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on Chino, Calif.-based bath and spa manufacturer Jacuzzi Brands Corp. to 'SD' (selective default) from 'CCC'. At the same time, S&P lowered the issue rating on the company's $150 million second-lien term loan ($175 million outstanding, including $25 million of payment-in-kind interest) to 'D' from 'CC', reflecting the exchange of this debt into an equity interest. Subsequently, we'll withdraw this issue rating since the debt has been cancelled. The rating action follows Jacuzzi's announcement that it closed an equity investment and recapitalization transaction that eliminated approximately $175 million of second-lien debt and will reduce annual cash interest expense by about $10 million. Second-lien debtholders will receive an equity interest in the company in exchange for their second-lien note holdings. In addition, certain second-lien debtholders, existing ownership, and members of management invested approximately $56 million in new capital into the company and its parent. "We view the exchange as tantamount to default, given Jacuzzi's stressed and highly leveraged financial risk profile and S&P's concerns regarding the company's ability to service its debt obligations in the near-term had the second-lien term loan remained in place," said Standard & Poor's credit analyst Tom Nadramia. S&P expects to reassess the corporate credit rating on Jacuzzi in the near future. S&P's analysis will reflect the reduction in the company's debt, the lowering of its annual interest cost by approximately $10 million, and an improved liquidity position while recognizing the current weak industry conditions affecting bath and spa end markets. JEFFREY PATRICK RICE: Voluntary Chapter 11 Case Summary ------------------------------------------------------- Joint Debtors: Jeffrey Patrick Rice Stephanie Ann Rice 6133 E. Sage Drive Paradise Valley, AZ 85253 Bankruptcy Case No.: 10-01838 Chapter 11 Petition Date: January 25, 2010 Court: United States Bankruptcy Court District of Arizona (Phoenix) Judge: Charles G. Case II Debtors' Counsel: Kevin Mccoy, Esq. Allen, Sala & Bayne, P.L.C. Viad Corporate Center 1850 N. Central Ave., #1150 Phoenix, AZ 85004 Tel: (602) 256-6000 Email: kmccoy@asbazlaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtors did not file a list of their 20 largest unsecured creditors when they filed their petition. The petition was signed by the Joint Debtors. JONES STEPHENS: Creditors Want Exclusivity Terminated ----------------------------------------------------- Daily Bankruptcy Review reports unsecured creditors of Jones Stephens Corp. want to end the Debtors' control of its restructuring so they may file a rival plan that promises them greater recoveries on their claims. Headquartered in Moody, Alabama, Jones Stephens Corp. -- http://www.plumbest.com/-- is a designer, manufacturer, and distributor of specialty plumbing products, primarily serving plumbing wholesalers, do-it-yourself retailers and hardware stores. Jones Stephens offers its products under the Jones Stephens(TM) and PlumBest(R) brand names. Products are used in repair, remodel and new construction applications within both the residential and commercial markets. Jones Stephens Corp., together with affiliate Plumbing Holdings Corp., filed for Chapter 11 on Dec. 15, 2009 (Bankr. D. Del. Case No. 09-14414). Howard A. Cohen, Esq., at Drinker Biddle & Reath LLP, represents the Debtor in its restructuring effort. The petition says it has assets of $84 million and debt of $101 million. The company hired AlixPartners LLP as its financial adviser and Drinker Biddle & Reath LLP as its bankruptcy counsel. JOSE JORGE: Has Access to Northwest Farm Cash Until February 14 --------------------------------------------------------------- The Hon. W. Richard Lee of the U.S. Bankruptcy Court for the Eastern District of California, in a second interim order, authorized Jose Jorge and Fatima Jorge to use the cash collateral of Northwest Farm Credit Services until February 14, 2010. A continued interim hearing on the Debtors' cash collateral use will be held on February 11, 2010, at 9:00 a.m. in this Court. Any objections may be presented at the continued hearing. The Debtors would use the money to fund their Chapter 11 case, pay suppliers and other parties. The Court also ordered that the California and Idaho creamery checks will continue to be payable to Northwest Farm. Northwest Farm holds a perfected security interest on the Debtors' personal property and the second deed of trust on the real property. The Court added that any funds not expended pursuant to the interim order will remain in the accounts subject to further order of the Court. The remaining proceeds from the January 15 to January 31 milk proceeds checks, after payment, will constitute adequate protection to Northwest Farm. The Debtors will deposit all cash collateral received from Northwest Farm into the accounts. As adequate protection for any diminution in value of Northwest Farm's collateral, the Debtors will grant Northwest Farm a replacement lien on like collateral to the extent and in the same priority as existed on the cash collateral. Gustine, California-based Jose Jorge -- dba Jose M. Jorge Dairy, dba Jorge Family Dairy -- operate two dairies as sole proprietor, one in California and one in Idaho. Jose Jorge filed for Chapter 11 bankruptcy protection on December 10, 2009 (Bankr. E.D. Calif. Case No. 09-62001). Hilton A. Ryder, Esq., who has an office in Fresno, California, 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. KAINOS PARTNERS: Has Until March 3 to File Chapter 11 Plan ---------------------------------------------------------- The Hon. Brendan L. Shannon of the U.S. Bankruptcy Court for the District of Delaware extended Kainos Partners Holding Company, LLC, et al.'s exclusive periods to file their Chapter 11 Plan and to solicit acceptances of that Plan until March 3, 2010, and May 4, 2010. Greer, South Carolina-based Kainos Partners Holding Company, LLC, -- http://www.kainospartners.com/-- operates the "donut-and- coffee" franchises. The Company and its affiliates filed for Chapter 11 on July 6, 2009 (Bankr. D. Del. Lead Case No. 09-12292). Two of its affiliates filed for separate Chapter 11 petitions on Sept. 15, 2009 (Bankr. D. Del. Case Nos. 09-13213 to 09-13214). An affiliate filed for separate Chapter 11 petition on Sept. 23, 2009 (Bankr. D. Del. Case No. 09-13285). Attorneys at the Law Offices of Joseph J. Bodnar represent the Debtors in their restructuring efforts. The Debtor did not file a list of 20 largest unsecured creditors. In its petition, the Debtors listed assets and debts both ranging from $10 million and $50 million. KINGSLEY CAPITAL: 10th Cir. Says Appeal Time Can't Be Waived ------------------------------------------------------------ WestLaw reports that the U.S. Court of Appeals for the Tenth Circuit has held that the timely filing of a notice of appeal of a Bankruptcy Court order was jurisdictional. Therefore, that timeliness requirement was not subject to waiver. In re Kingsley Capital, Inc., --- F.3d ----, 2010 WL 177251 (10th Cir.). Denver, Colorado-based Kingsley Capital Inc. sought Chapter 11 protection (Bankr. D. Colo. Case No. 08-17152) on May 23, 2008. Christian C. Onsager, Esq., David M. Rich, Esq., and Michael J. Guyerson, Esq., at Onsager, Staelin & Guyerson LLC, represent the Debtor. The Debtor filed its schedules of assets and schedules, disclosing total assets of $10,356,146 and total liabilities of $5,028,840, on June 9, 2008. As reported in the Troubled Company Reporter on Nov. 12, 2009, the Bankruptcy Court confirmed the Debtor's Second Amended Plan of Reorganization. KLCG PROPERTY: KeyLime Water Park Heading for March 16 Auction -------------------------------------------------------------- Bill Rochelle at Bloomberg News reports that KLCG Property LLC and Gurnee Property LLC, the owners of the KeyLime Cove indoor water park in Gurnee, Illinois, intend to sell the property to secured lender Dougherty Funding LLC unless there's a better offer at an auction scheduled for March 16. Dougherty will pay $65 million for the project by exchanging some of the pre-bankruptcy secured debt and the $2.8 million KLCG is offering to finance the reorganization effort. According to the report, the Bankruptcy Court will hold a hearing on Feb. 9 to consider approval of the Bid Procedures. KLCG wants competing bids by March 12, in advance of the March 16 auction and a hearing on March 18 for approval of the sale. Dougherty Funding has been the intended buyer since the Chapter 11 case began Dec. 16. Dougherty is owed $89.5 million on a construction loan. Headquartered in Gurnee, Illinois, KLCG Property, LLC, was organized in Delaware on October 13, 2005, for the purpose of constructing, owning, and operating a 414-room destination resort hotel, indoor water park and conference center located within the greater northern Chicagoland region. KLCG Property filed for Chapter 11 bankruptcy protection on December 16, 2009 (Bankr. D. Delaware Case No. 09-14418). The Company's affiliate, Gurnee Property, LLC, also filed for Chapter 11 bankruptcy protection. Donald J. Bowman, Jr., Esq., and Michael R. Nestor, Esq., at Young Conaway Stargatt & Taylor assist the Debtors in their restructuring efforts. KLCG Property listed $50,000,001 to $100,000,000 in assets and $100,000,001 to $500,000,000 in liabilities. LA JOLLA: Receives Nasdaq Delisting Notice; Intends to Appeal ------------------------------------------------------------- La Jolla Pharmaceutical Company received a delisting notice from the Nasdaq Stock Market LLC on January 19, 2010. The notice indicates Nasdaq's belief that the Company is operating as a "public shell" and that the resulting entity in the proposed merger between the Company and Adamis Pharmaceuticals Corporation (OTCBB: ADMP.OB) will not meet Nasdaq's initial listing requirements. Nasdaq has determined that the continued listing and trading of public shells could be detrimental to the interests of the investing public. Listing Rule 5101 provides Nasdaq with discretionary authority to apply more stringent criteria for continued listing and terminate the inclusion of particular securities based on any event that occurs that in the opinion of Nasdaq makes inclusion of the securities on Nasdaq inadvisable or unwarranted. The Company intends to appeal the determination in the January 19 letter. Absent such an appeal, trading of the Company's common stock would be suspended at the open of business on January 28, 2010 and a Form 25-NSE would be filed with the Securities and Exchange Commission to remove the Company's securities from listing and registration on Nasdaq. The Company's appeal will stay the suspension of the trading of the Company's common stock pending a final decision by a Nasdaq Listing Qualifications Panel. Accordingly, the Company does not expect any change to its listing status until after the hearing date, which is expected to take place within four to six weeks. Notwithstanding the appeal, the Company expects that its stock will be delisted following the completion of the merger with Adamis as the transaction will constitute a change of control and the combined entity is not expected to satisfy the Nasdaq initial listing standards that would be applied at that time. La Jolla Pharmaceutical Company is a biopharmaceutical company that has historically focused on the development and testing of Riquent as a treatment for Lupus nephritis. As of December 31, 2008, La Jolla's balance sheet showed $20.8 million in total assets, $17.2 million in total current liabilities, $179,000 in non-current portion of obligations under notes payable, and $34,000 in non-current portion of obligations under capital leases. LAS VEGAS MONORAIL: Wants to Use Cash Collateral ------------------------------------------------ Las Vegas Monorail Company has sought authorization from the U.S. Bankruptcy Court for the District of Nevada to use cash collateral securing their obligation to their prepetition lenders. The attorneys for the Debtor -- Gerald M. Gordon, Esq., and William M. Noall, Esq., who have offices in Las Vegas, Nevada -- explain that the Debtor needs the money to fund its Chapter 11 case, pay suppliers and other parties. The Debtor executed a Financing Agreement dated September 1, 2000 (the Financing Agreement) with the Director of the Nevada Department of Business and Industry (the Director or Issuer), granting certain limited security interests in cash and cash equivalents and amounts held in funds or accounts with Wells Fargo Bank, N.A. (the Trustee), which Financing Agreement was assigned to Wells Fargo as trustee under the Senior Indenture dated September 1, 2000 (the Senior Indenture) and the Subordinate Indenture dated as of September 1, 2000 (the Subordinate Indenture and, together with the Senior Indenture, the Indentures). Payment of principal and interest of the 1st Tier Bonds under the Senior Indenture is insured by Ambac Assurance Corporation. The Director and Ambac entered into a Guaranty Agreement dated as of September 20, 2000 (the Guaranty) by which, among other things, the Director granted Ambac a security interest in the same collateral as the Trustee for the Indentures, but which is subordinated to the Trustee's rights under the Indentures. The Trustee and Ambac are the only entities with an interest in any Cash Collateral. Debtor seeks a determination by the Court as to whether and to what extent cash and cash equivalents of the Debtor as of the Petition Date, and cash and cash equivalents generated by the Debtor after the Petition Date, constitute Cash Collateral. The Debtor contends that the extent of Cash Collateral is limited to: (1) Project Revenues that have been deposited in Debtor's Collection Fund at Wells Fargo or other accounts maintained at Wells Fargo as of the Petition Date, excluding any amounts required by the Debtor for operation and maintenance costs; (2) interest income generated by the Project Revenues deposited in the Collection Fund or other accounts at Wells Fargo as of the Petition Date; and (3) the Bond Proceeds and interest income generated by the Bond Proceeds to the extent that the Bond Proceeds still exist and are maintained in accounts with Wells Fargo. The Debtor contends that Project Revenues that aren't in the Collection Fund or otherwise on deposit in an account at Wells Fargo as of the Petition Date are not Cash Collateral. Debtor contends that Project Revenues that are generated after the Petition Date are not Cash Collateral (the Postpetition Revenues). The Debtor proposes a replacement lien in the Postpetition Revenues, which are otherwise unsecured. Messrs. Gordon and Noall state, "The relief sought herein is emergency in nature because the Trustee seeks to block the Debtor's use of any cash, whether generated prepetition or postpetition, and whether or not controlled by the Trustee." To the extent the Prepetition Revenues not deposited with the Trustee or the Postpetition Revenues constitute Cash Collateral, the Debtor requests that it be entitled to use that Cash Collateral on an emergency interim basis and pending the final hearing, pursuant to a budget. "None of the Debtor's Prepetition Revenues are subject to properly perfected security interests held by the Trustee or Ambac and thus are not Cash Collateral," Messrs. Gordon and Noall say. The Cash on Hand as of the Petition Date and the Bank of America Account aren't subject to a properly perfected security interest of the Trustee or Ambac because the funds and the account aren't in their possession. The Receivables aren't subject to any security interest of the Trustee or Ambac because no security interest was ever granted in the property in their applicable security documents. Fare Revenues and Ad Revenues have been deposited into the BofA Account, and thus the Trustee and Ambac will lack the requisite possession or control over the property or account to have a properly perfected security interest therein. The funds on deposit at Wells Fargo are secured to the extent the funds aren't necessary to pay O&M Costs. The Debtor's Postpetition Revenues aren't subject to any properly perfected security interest of the Trustee or Ambac and thus do not constitute Cash Collateral. All of the Debtor's Postpetition Revenues will be derived from operation of the Monorail, and thus are not "proceeds" of any prepetition collateral. The maximum amount subject to the Trustee's security interest which may be Cash Collateral is approximately $226,346.06. Rather than make postpetition adequate protection payments to the Trustee, the Debtor requests authority to use the funds in its BofA Account and Debtor's Wells Fargo Accounts that are required to pay O&M costs. The Trustee and Ambac don't agree with the Debtor regarding the characterization and extent of Cash Collateral and proposed expenditures by the Debtor, and have made demands upon the Debtor to the extent of adequate protection which couldn't be resolved by the Petition Date. The Director disagrees with the Debtor's position concerning the reach of the indenture trustee's interest in cash held by the Debtor, but doesn't object to the use of the cash collateral in the Debtor's operation provided the Debtor adheres to its obligations to the Director and the indenture trustee under the Financing Agreement and Indentures. According to the Director, the Debtor, which has been in default of the Financing Agreement and Indentures for nearly three years, turned over all revenues to the Trustee until recently when, unbeknownst to the Director or apparently the Trustee, the Debtor began diverting a portion of such revenue to a new bank account at BofA in an effort to deprive the holders of the Bonds of possession of, and thus their security interest in, a substantial portion of the Monorail's revenue. The Director is represented by Ballard Spahr LLP. Bombardier Transit Corporation says that it doesn't wish to inform the Court regarding its maintenance and operation contract with the Debtor and the importance and necessity of those services. Bombardier states that if it is forced to suspend work on the System as a result of nonpayment, the System cannot operate either practically or legally under the Clark County Amusement & Transportation System ordinance. It is imperative that any budget approved by the Court contain a line item for payment of the monthly fees owing to Bombardier under the existing operations and maintenance contract. Bombardier states that the Debtor and the Trustee agree that the Debtor will be permitted to continue making monthly payment and other reasonable and necessary payments to Bombardier pursuant to the terms of the O&M Contract. Bombardier is represented by Santoro, Driggs, Walch, Kearney, Holley & Thompson. About Las Vegas Monorail Las Vegas, Nevada-based Las Vegas Monorail Company, organized by the State of Nevada in 2000 as a nonprofit corporation, owns and manages the Las Vegas Monorail. The Monorail is a seven-stop, elevated train system that travels along a 3.9-mile route near the Las Vegas Strip. LVMC has contracted with Bombardier Transit Corporation to operate the Monorail. Though it benefits from its tax-exempt status due to being a nonprofit entity, LVMC claims to be the first privately-owned public transportation system in the nation to be funded solely by fares and advertising. LVMC says it receives no governmental financial support or subsidies. The Company filed for Chapter 11 bankruptcy protection on January 13, 2010 (Bankr. D. Nev. Case No. 10-10464). Gerald M. Gordon, Esq., at Gordon Silver, assists the Company in its restructuring effort. Alvarez & Marsal North America, LLC, is the Debtor's financial advisor. Stradling Yocca Carlson & Rauth is the Debtor's special bond counsel. Jones Vargas is the Debtor's special corporate counsel. The Company listed $10,000,001 to $50,000,000 in assets and $500,000,001 to $1,000,000,000 in liabilities. LAS VEGAS SANDS: Inks Amended Employment Deal With Sr. VP Kay ------------------------------------------------------------- Las Vegas Sands Corp. and Kenneth J. Kay, the Company's Senior Vice President and Chief Financial Officer, entered into a letter agreement to amend Mr. Kay's employment agreement, dated as of November 3, 2008. The Amendment provides for an increase in Mr. Kay's base salary from $900,000 to $1.1 million, retroactive to December 1, 2009. Pursuant to his Employment Agreement, Mr. Kay was granted nonqualified stock options to purchase 100,000 shares of the Company's common stock pursuant to the Company's 2004 Equity Award Plan, with an exercise price equal to the fair market value of the Company's common stock on January 1, 2009. The stock options vest over six years, with 33,333 options vesting over four years commencing on the first anniversary of the Date of Grant, an additional 33,333 options vesting over four years commencing on the second anniversary of the Date of Grant and the remaining 33,334 vesting over four years commencing on the third anniversary of the Date of Grant. Accordingly, 5,000 stock options vested on January 1, 2010. In accordance with the Amendment, the vesting schedule of the options set forth in the Employment Agreement and the option agreement between Mr. Kay and the Company is amended so that (a) an additional 20,000 options are deemed retroactively vested as of January 1, 2010, resulting in a cumulative total of 25,000 options being vested as of that date and (b) the remaining 75,000 options will vest in equal installments of 25,000 options each on the second, third and fourth anniversaries of the Date of Grant. About Las Vegas Sands Based in Las Vegas, Nevada, Las Vegas Sands Corp. (NYSE: LVS) -- http://www.lasvegassands.com/-- owns and operates The Venetian Resort Hotel Casino, The Palazzo Resort Hotel Casino, and an expo and convention center. The company also owns and operates the Sands Macao, the first Las Vegas-style casino in Macao, China. As reported by the TCR on Aug. 4, 2009, Moody's placed Las Vegas Sands Corp.'s ratings, including its 'B3' Corporate Family Rating, on review for possible downgrade. Moody's cited weak operating results and heightened concern regarding the Company's ability to maintain compliance with financial covenants, among other things. The Company also carries 'B-' issuer credit ratings from Standard & Poor's. LEHMAN BROTHERS: Fires Back in Metavante Swap Dispute ----------------------------------------------------- Law360 reports that Lehman Brothers Special Financing Inc. has weighed in on Metavante Corp.'s attempt to reverse a bankruptcy judge's ruling that it owed LBSF more than $6.6 million under a 2007 swap agreement, arguing that Metavante could not suspend payments since it waited too long to terminate the swap. 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) LIBBEY INC: Unit Commences Tender Offer for Senior Secured Notes ---------------------------------------------------------------- Libbey Inc.'s wholly owned subsidiary Libbey Glass Inc. has commenced a cash tender offer to purchase any and all of its outstanding $306.0 million aggregate principal amount of Floating Rate Senior Secured Notes due 2011, plus accrued and unpaid interest to, but excluding, the applicable settlement date. In conjunction with the Tender Offer, Libbey Glass is also soliciting consents for certain proposed amendments to the indenture governing the Notes that would eliminate substantially all of the restrictive covenants and modify certain of the events of default and other provisions of the Indenture. The Tender Offer is scheduled to expire at 11:59 p.m., New York City time, on February 22, 2010, unless extended by the Company. The Consent Solicitation will expire at 5:00 p.m., New York City time, on February 5, 2010, unless extended or earlier terminated by the Company. Tendered Notes may be withdrawn at any time on or prior to 5:00 p.m., New York City time, on February 5, 2010. Other than as required by applicable law, tendered Notes may not be withdrawn after the Withdrawal Date. Any Holder who tenders Notes pursuant to the Tender Offer must also deliver a Consent to the Proposed Amendments. Holders who validly tender (and do not validly withdraw) Notes and deliver their Consents at or prior to the Consent Date will receive total consideration of $1,027.50 per $1,000 principal amount of Notes, which includes an amount of cash equal to $30.00 per $1,000 principal amount of Notes so tendered and accepted for purchase. Holders who validly tender Notes after the Consent Date but at or prior to the Expiration Date will be eligible to receive the Total Consideration less the Early Tender Premium. Holders who validly tender and do not validly withdraw their Notes in the Offer will also be paid accrued and unpaid interest on such Notes from the last interest payment date to, but not including, the applicable settlement date, payable on the applicable settlement date. The table below provides a summary of these payments. Tender Offer Early Tender Total Consideration(1)(2)(3) Premium(1) Consideration(1)(3)(4) ----------------------- ------------ ---------------------- $997.50 $30.00 $1,027.50 ------- ------ --------- (1) Per $1,000 principal amount of Notes accepted for purchase. If validly tendered after the Consent Date and at or prior to the (2) Expiration Date. Does not include accrued and unpaid interest that will be paid on (3) Notes accepted for purchase. If validly tendered at or prior to the Consent Date and not (4) validly withdrawn at or prior to the Withdrawal Date. Libbey Glass's obligation to accept for purchase and pay the Total Consideration or Tender Offer Consideration, as applicable, for validly tendered Notes is subject to, and conditioned upon, satisfaction or, where applicable, Libbey Glass's waiver of, the following: the tender of at least a majority in principal amount of the outstanding Notes at or prior to the Consent Date (whereby Libbey Glass will obtain the Consents from the Holders of at least a majority in aggregate principal amount of the Notes then outstanding for the Proposed Amendments); the consummation of the following transactions: issuance of at least $400.0 million aggregate principal amount of senior secured notes of Libbey Glass; the repayment of Libbey Glass's $80.4 million Senior Subordinated Secured Payment-in-Kind Notes due 2021; the entry by Libbey Glass into a new senior secured credit facility; and the payment of related fees and expenses; and certain other conditions listed in the Offer to Purchase and Consent Solicitation Statement. The Company reserves the right to waive any and all conditions to the Offer. The Company will not be required to pay any Early Tender Premium in connection with the Offer unless the Notes are tendered at or prior to the Consent Date and the Company shall have accepted the Notes for purchase pursuant to the Tender Offer. The principal purpose of the Offer is to acquire all outstanding Notes and to eliminate substantially all of the restrictive covenants and to modify certain of the events of default and other provisions in the Indenture. The Company has engaged Barclays Capital Inc. and BofA Merrill Lynch to act as Dealer Managers and Solicitation Agents for the Offer and Bondholder Communications Group, LLC to act as Information and Tender Agent for the Offer. Questions regarding the terms of the Tender Offer and Consent Solicitation may be directed to Barclays Capital Inc. at (800) 438-3242 (toll free) or (212) 528-7581 (collect) or BofA Merrill Lynch at (888) 292-0070 (toll free) or (980) 388-9217 (collect). Questions regarding procedures for tendering Notes and delivering Consents or requests for documentation may be directed to Bondholder Communications Group, LLC at (888) 385-2663 (toll free) or (212) 809-2663 (collect). Based in Toledo, Ohio, since 1888, the Company operates glass tableware manufacturing plants in the United States, Mexico, China, Portugal and the Netherlands. Based in Toledo, Ohio, since 1888, Libbey operates glass tableware manufacturing plants in the United States in Louisiana and Ohio, as well as in Mexico, China, Portugal and the Netherlands. Libbey supplies tabletop products to foodservice, retail, industrial and business-to-business customers in over 100 countries. In 2008, Libbey Inc.'s net sales totaled $810.2 million. * * * As reported by the Troubled Company Reporter on Nov. 13, 2009, Standard & Poor's Ratings Services said that it lowered its corporate credit rating on Toledo, Ohio-based Libbey Inc. to 'SD' (selective default) from 'B'. The issue-level ratings remain on CreditWatch, where S&P had placed them on June 11, 2009, following S&P's concerns about the difficult operating environment facing Libbey, increased leverage, and its ability to improve credit metrics. LODGENET INTERACTIVE: Black Horse Capital Reports 11.6% Stake ------------------------------------------------------------- Black Horse Capital LP; Black Horse Capital (QP) LP; Black Horse Capital Master Fund Ltd.; Black Horse Capital Management LLC; and Dale Chappell disclosed that they beneficially hold in the aggregate 2,705,080 shares representing 11.6% of the outstanding Common Stock of LodgeNet Interactive Corporation as of January 12, 2010. Sioux Falls, South Dakota-based LodgeNet Interactive Corporation (Nasdaq:LNET) -- http://www.lodgenet.com/-- provides media and connectivity solutions designed to meet the unique needs of hospitality, healthcare and other guest-based businesses. LodgeNet Interactive serves more than 1.9 million hotel rooms worldwide in addition to healthcare facilities throughout the United States. The Company's services include: Interactive Television Solutions, Broadband Internet Solutions, Content Solutions, Professional Solutions and Advertising Media Solutions. LodgeNet Interactive Corporation owns and operates businesses under the industry leading brands: LodgeNet, LodgeNetRX, and The Hotel Networks. As of September 30, 2009, LodgeNet had $541.5 million in total assets against $610.5 million in total liabilities, resulting in $68.9 million in stockholders' deficiency. * * * As reported by the Troubled Company Reporter on June 10, 2009, Moody's affirmed LodgeNet's B3 corporate family rating, Caa1 probability of default rating and SGL-4 speculative grade liquidity rating (indicating poor liquidity). The rating continues to be influenced primarily by liquidity matters stemming from the company's very limited financial covenant compliance cushion. LODGENET INTERACTIVE: Delays Sale of $290MM of Debt Securities -------------------------------------------------------------- LodgeNet Interactive Corporation filed with the Securities and Exchange Commission a FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 to delay the effective date of a registration statement relating to the Company's planned issuance of $290,000,000 of Debt Securities, Preferred Stock, $0.01 par value per share, Common Stock, $0.01 par value per share, Depositary Shares, Warrants and Units. The Company intends to use the net proceeds from the sale of the securities for general corporate purposes, which may include additions to working capital, repayment or redemption of existing indebtedness, financing of capital expenditures, research and development of new technologies, acquisitions and strategic investment opportunities. A full-text copy of the Company's Form S-3 Registration Statement and related prospectus is available at no charge at: http://ResearchArchives.com/t/s?4e43 Sioux Falls, South Dakota-based LodgeNet Interactive Corporation (Nasdaq:LNET) -- http://www.lodgenet.com/-- provides media and connectivity solutions designed to meet the unique needs of hospitality, healthcare and other guest-based businesses. LodgeNet Interactive serves more than 1.9 million hotel rooms worldwide in addition to healthcare facilities throughout the United States. The Company's services include: Interactive Television Solutions, Broadband Internet Solutions, Content Solutions, Professional Solutions and Advertising Media Solutions. LodgeNet Interactive Corporation owns and operates businesses under the industry leading brands: LodgeNet, LodgeNetRX, and The Hotel Networks. As of September 30, 2009, LodgeNet had $541.5 million in total assets against $610.5 million in total liabilities, resulting in $68.9 million in stockholders' deficiency. * * * As reported by the Troubled Company Reporter on June 10, 2009, Moody's affirmed LodgeNet's B3 corporate family rating, Caa1 probability of default rating and SGL-4 speculative grade liquidity rating (indicating poor liquidity). The rating continues to be influenced primarily by liquidity matters stemming from the company's very limited financial covenant compliance cushion. LYONDELL CHEMICAL: BoNY Settles Plea for Payment of $361.5MM ------------------------------------------------------------ The Bank of New York Mellon and the Bank of New York Mellon Trust Company, N.A., as indenture trustee for the holders of certain notes aggregating (a) $100 million issued by Lyondell Chemical Company, as predecessor-in-interest of ARCO Chemical Company, and (b) $225 million issued by Equistar Chemicals, LP, is asking the Court to allow and direct payment of an administrative expense claim under Section 507(b) of the Bankruptcy Code for $361.5 million. BoNY claims it now holds a Section 507(b) superpriority administrative expense claim for $361.5 million in light of the decline in value of its collateral. In separate filings, the Debtors, the Official Committee of Unsecured Creditors and the Ad Hoc Group of Senior Secured Lenders object to The Bank of New York Mellon and the Bank of New York Mellon Trust Company, N.A.'s Motion to Allow its Claim under Section 507(b) of the Bankruptcy Code for $361.5 million. Representing the Debtors, Mark C. Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP, in New York, tells the Court that BoNY's Motion to Allow is premature. If the Second Amended Joint Plan of Reorganization is confirmed, the Noteholders' Section 507(b) rights, if any, will be eliminated and the Court will never need to decide whether and to what extent Section 507(b) claims exist, he discloses. The Committee contends that BoNY's collateral has not declined in value since the Petition Date. Instead, the Debtors' Business Enterprise Value or "BEV" of $19.2 billion at the time of the DIP final hearing is wrong when compared with the BEV asserted in the Second Amended Disclosure Statement of $14.5 billion, Steven D. Pohl, Esq., at Brown Rudnick LLP, in Boston, Massachusetts, points out. If BoNY is allowed a superpriority administrative expense claim based on mistake rather than actual diminution, the Debtors' estates and all other constituents would be further and improperly harmed, he contends. Following negotiations, the Debtors' counsel, Andrew M. Troop, Esq., at Cadwalader, Wickersham & Taft LLP, in New York, told the Court on January 19, 2010, that BoNY's Motion to Allow is tentatively resolved due to a pending settlement it reached with the Debtors that remains subject to definitive documentation. Indeed, counsel for BoNY, Glenn E. Siegel, Esq., at Dechert LLP, in New York, told Judge Gerber that BoNY reached a settlement with the Debtors that will allow its bonds to be treated the same as similar debt, reports Bloomberg News. BoNY owns $325 million in notes due 2020, known as "Arco notes," and $150 million in notes due 2026, known as "Equistar notes." "The Arco and Equistar noteholders will receive identical plan consideration and treatment," Mr. Siegel said, adds Bloomberg. The noteholders won't have to bear the costs of litigation against secured lenders, who may have their claims reduced by the amount of some payments already received in the case, Mr. Siegel added. The proposed settlement is subject to Court approval. About Lyondell Chemical LyondellBasell Industries is one of the world's largest polymers, petrochemicals and fuels companies. It is the global leader in polyolefins technology, production and marketing; a pioneer in propylene oxide and derivatives; and a significant producer of fuels and refined products, including biofuels. Through research and development, LyondellBasell develops innovative materials and technologies that deliver exceptional customer value and products that improve quality of life for people around the world. Headquartered in The Netherlands, LyondellBasell -- http://www.lyondellbasell.com/-- is privately owned by Access Industries. Basell AF and Lyondell Chemical Company merged operations in 2007 to form LyondellBasell Industries, the world's third largest independent chemical company. LyondellBasell became saddled with debt as part of the US$12.7 billion merger. On January 6, 2009, LyondellBasell Industries' U.S. operations and one of its European holding companies -- Basell Germany Holdings GmbH -- filed voluntary petitions to reorganize under Chapter 11 of the U.S. Bankruptcy Code to facilitate a restructuring of the company's debts. The case is In re Lyondell Chemical Company, et al., Bankr. S.D.N.Y. Lead Case No. 09-10023). Seventy-nine Lyondell entities, including Equistar Chemicals, LP, Lyondell Chemical Company, Millennium Chemicals Inc., and Wyatt Industries, Inc. filed for Chapter 11. In May 2009, one of the cases was dismissed -- Case No. 09-10068 -- because it is duplicative of Case No. 09- 10040 relating to Debtor Glidden Latin America Holdings. The Hon. Robert E. Gerber presides over the case. Deryck A. Palmer, Esq., at Cadwalader, Wickersham & Taft LLP, in New York, serves as the Debtors' bankruptcy counsel. Evercore Partners serves as financial advisors, and Alix Partners and its subsidiary AP Services LLC, serves as restructuring advisors. AlixPartners' Kevin M. McShea acts as the Debtors' Chief Restructuring Officer. Clifford Chance LLP serves as restructuring advisors to the European entities. Lyondell Chemical estimated that consolidated assets total US$27.12 billion and debts total US$19.34 billion as of the bankruptcy filing date. Lyondell has obtained approximately US$8 billion in DIP financing to fund continuing operations. The DIP financing includes two credit agreements: a US$6.5 billion term loan, which comprises a US$3.25 billion in new loans and a US$3.25 billion roll-up of existing loans; and a US$1.57 billion asset-backed lending facility. Luxembourg-based LyondellBasell Industries AF S.C.A. and another affiliate were voluntarily added to Lyondell Chemical's reorganization filing under Chapter 11 on April 24, 2009, in order to seek protection against claims by certain financial and U.S. trade creditors. On May 8, 2009, LyondellBasell Industries added 13 non-operating entities to Lyondell Chemical Company's reorganization filing under Chapter 11 of the U.S. Bankruptcy Code. All of the entities are U.S. companies and were added to the original Chapter 11 filing for administrative purposes. The filings will have no impact on current business or operations as none of the entities manufactures or sells products. Bankruptcy Creditors' Service, Inc., publishes Lyondell Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lyondell Chemical Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LYONDELL CHEMICAL: Court Won't Stop Adequate Protection Payments ---------------------------------------------------------------- The Official Committee of Unsecured Creditors in Lyondell Chemical's cases alleges that since the entry of the order approving Lyondell's access to DIP financing, the DIP Lenders and First Lien Lenders who are Senior Facility Prepetition Secured Lenders holding First Lien Loans that are not Roll Up DIP Loans, have steered the restructuring of the Debtors to their exclusive benefit. The First Lien Lenders have improperly received $440 million in postpetition interest payments and $32 million in reimbursement of professional fees and expenses as adequate protection payments, Steven D. Pohl, Esq., at Brown Rudnick LLP, in New York, asserts. Moreover, Jack F. Williams, the examiner appointed in the Debtors' Chapter 11 cases, noted in his report that at least 45% to 60% of the $100 million plus of the Debtors' total monthly restructuring expenses relate to adequate protection payments and professional fees in connection with the DIP Financing, Mr. Pohl notes. By this motion, the Committee seeks relief from the Final DIP Order with respect to these provisions requiring: (i) Lyondell Chemical Company and Basell GmbH to pay all accrued but unpaid interest and letter of credit and other fees on the first business day of each month beginning on March 2, 2009, for the preceding month under the Senior Facility Prepetition Credit Agreement with respect to Senior Facility Loan that has not been designated as Roll Up Dip Loans, at the non-default contract rate under the Senior Facility Prepetition Loan documents; and (ii) the Debtors to make current cash payments of all fees and expenses, including the reasonable fees and disbursements of counsel, financial and other consultants and advisors to, among others, the prepetition agents, LeverageSource III S.a.r.l., and the Ad Hoc Group of Senior Secured Lenders. The Debtors and the Ad Hoc Group of Senior Secured Lenders oppose the Official Committee of Unsecured Creditors' Motion for Relief from the Final DIP Order. On behalf of the Debtors, George A. Davis, Esq., at Cadwalader, Wickersham & Taft LLP, in New York, tells the Court that a modification of the Final DIP Order to terminate the Debtors' obligations to make adequate protection payments may constitute an event of default under the DIP Credit Agreement. An Event of Default occurs upon entry of an order by the Bankruptcy Court reversing, amending, supplementing or modifying the Final DIP Order, he says. Moreover, the Final DIP Order grants the DIP Lenders authority to exercise rights with respect to an event of default if the Final DIP Order is modified to terminate the adequate protection payments, he stresses. After due consideration, Judge Gerber denied the Committee's request at a hearing held January 19, 2010, to modify the Final DIP Order to terminate the Adequate Protection Payments, Reuters reports. The payments, which protect lenders' collateral while the company is in bankruptcy, total about $500 million, notes Bloomberg News. The payments were based on an initial report released by Duff & Phelps in February 2009, estimating Lyondell's enterprise value at $19 billion. The Debtors' Second Amended Plan in December 2009, disclosed that the Debtors' enterprise value is about $14.5 billion. According to Bloomberg News, Judge Gerber said that the disparity in the Debtors' business enterprise values led him to question whether he got a "garbage valuation" in the Duffs & Phelps report. "The idea that the estate has lost half a billion causes me to at least wonder that I got a bad valuation at the outset of this case. A really bad valuation," Judge Gerber pointed out, notes Bloomberg. "While it is likely that the Debtors' previous BEV was too high, it is arguable that better valuations prepared now would find that the Senior Secured Lenders were under-secured," Judge Gerber added, Reuters noted. Judge Gerber stressed at the January 19 hearing that if the Adequate Protection Payments stop, the Debtors could be in default on their $8 Billion DIP Loan, leading to distracting and costly litigation, Bloomberg disclosed. Lyondell Chemical Company's spokesperson told Reuters that the Court's decision not to intervene in the adequate protection issue was favorable to the Debtors because other options could create issues for the DIP financing that the Debtors are committed to avoiding. A formal order is yet to be entered by the Court. About Lyondell Chemical LyondellBasell Industries is one of the world's largest polymers, petrochemicals and fuels companies. It is the global leader in polyolefins technology, production and marketing; a pioneer in propylene oxide and derivatives; and a significant producer of fuels and refined products, including biofuels. Through research and development, LyondellBasell develops innovative materials and technologies that deliver exceptional customer value and products that improve quality of life for people around the world. Headquartered in The Netherlands, LyondellBasell -- http://www.lyondellbasell.com/-- is privately owned by Access Industries. Basell AF and Lyondell Chemical Company merged operations in 2007 to form LyondellBasell Industries, the world's third largest independent chemical company. LyondellBasell became saddled with debt as part of the US$12.7 billion merger. On January 6, 2009, LyondellBasell Industries' U.S. operations and one of its European holding companies -- Basell Germany Holdings GmbH -- filed voluntary petitions to reorganize under Chapter 11 of the U.S. Bankruptcy Code to facilitate a restructuring of the company's debts. The case is In re Lyondell Chemical Company, et al., Bankr. S.D.N.Y. Lead Case No. 09-10023). Seventy-nine Lyondell entities, including Equistar Chemicals, LP, Lyondell Chemical Company, Millennium Chemicals Inc., and Wyatt Industries, Inc. filed for Chapter 11. In May 2009, one of the cases was dismissed -- Case No. 09-10068 -- because it is duplicative of Case No. 09- 10040 relating to Debtor Glidden Latin America Holdings. The Hon. Robert E. Gerber presides over the case. Deryck A. Palmer, Esq., at Cadwalader, Wickersham & Taft LLP, in New York, serves as the Debtors' bankruptcy counsel. Evercore Partners serves as financial advisors, and Alix Partners and its subsidiary AP Services LLC, serves as restructuring advisors. AlixPartners' Kevin M. McShea acts as the Debtors' Chief Restructuring Officer. Clifford Chance LLP serves as restructuring advisors to the European entities. Lyondell Chemical estimated that consolidated assets total US$27.12 billion and debts total US$19.34 billion as of the bankruptcy filing date. Lyondell has obtained approximately US$8 billion in DIP financing to fund continuing operations. The DIP financing includes two credit agreements: a US$6.5 billion term loan, which comprises a US$3.25 billion in new loans and a US$3.25 billion roll-up of existing loans; and a US$1.57 billion asset-backed lending facility. Luxembourg-based LyondellBasell Industries AF S.C.A. and another affiliate were voluntarily added to Lyondell Chemical's reorganization filing under Chapter 11 on April 24, 2009, in order to seek protection against claims by certain financial and U.S. trade creditors. On May 8, 2009, LyondellBasell Industries added 13 non-operating entities to Lyondell Chemical Company's reorganization filing under Chapter 11 of the U.S. Bankruptcy Code. All of the entities are U.S. companies and were added to the original Chapter 11 filing for administrative purposes. The filings will have no impact on current business or operations as none of the entities manufactures or sells products. Bankruptcy Creditors' Service, Inc., publishes Lyondell Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lyondell Chemical Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LYONDELL CHEMICAL: Gets Approval for Settlement with Insurers ------------------------------------------------------------- Lyondell Chemical Co. and its units obtained approval from the Court to: (a) a settlement among Debtors Lyondell Chemical Company, Equistar Chemicals, LP and Millennium Chemicals Inc., Zurich America Insurance Company and 20 other insurance companies, a list of which is available for free at: http://bankrupt.com/misc/Lyondell_SettlingInsurers.pdf (b) a settlement among Lyondell, Equistar, MCI and Allianz Global Risks US Insurance Company. Christopher R. Mirick, Esq., at Cadwalader, Wickersham & Taft LLP, in New York, relates that the Settlements will resolve all outstanding issues between the Debtors and the Insurers in connection with the coverage of, and liability under, certain insurance policies with respect to the damage to various facilities of the Debtors caused by Hurricane Rita in September 2005. Zurich Settlement Specifically, the Zurich Settlement provides that the Zurich Insurers separately participated in an Excess of Loss property insurance program and issued policies of insurance to Lyondell for the period of November 1, 2004, to November 1, 2005. In light of Hurricane Rita, the Debtors submitted a claim for Loss under the Policies for physical loss or damage, and other costs and expenses. The Debtors also submitted a claim for the Loss under its primary Oil Insurance Limited policy. Against this backdrop, the Debtors and the Zurich Insurers agreed to settle the Claim for $2,416,114, which is payable by the Zurich Insurers pursuant to a breakdown, a copy of which is may be accessed for free at: http://bankrupt.com/misc/Lyondell_ZurichInsurersShare.pdf In turn, the Debtors agreed not to sue, and to release the Zurich Insurers from any and all causes of action, claims, or demands of any kind that the Debtors have or may have relating to: -- the Loss or Claim; -- demands for money or of any nature, including damages sustained directly, indirectly or arising out of the Loss or Claim; and -- any claim or cause of action for physical loss or damage and other costs arising out of the Claim or actual or alleged insurance coverage for the Loss based upon any allegations of violation of duty of good faith, bad faith, violation of any applicable insurance code, acts of commission or omission with respect to settlement arising from the Claim or Loss on the part of the Zurich Insurers, or any claims for attorney's fees or expenses. Allianz Settlement The Allianz Settlement provides that Allianz Global Risks participated in an Excess of Loss property insurance program and issued a policy of insurance to the Debtors for the period of November 1, 2004, to November 1, 2005. As a result of Hurricane Rita, the Debtors submitted a claim for Loss under the Policy for physical loss and other costs to Allianz Global Risks. The Debtors also filed a claim for the Loss under its primary Oil Insurance Limited policy. In this light, the Debtors and Allianz Global Risks reached an agreement to settle the Claim for $120,805. In turn, the Debtors agreed not to sue and release Allianz Global Risks from any and all causes of action, claims, or demands of any kind that the Debtors have or may have relating to: -- the Loss or Claim; -- demands for money or of any nature, including damages sustained directly, indirectly or arising out of the Loss or Claim; and -- any claim or cause of action for physical loss and other costs arising out of the Claim or actual or alleged insurance coverage for the Loss based upon any allegations of violation of duty of good faith, bad faith, violation of any applicable insurance code, acts of commission or omission with respect to settlement arising from the Claim or Loss on the part of Allianz Global Risks, or any claims for attorney's fees or expenses. Mr. Mirick adds that the Settlements provide finality with respect to the insurance reconciliation efforts of the Debtors, and free resources of the Debtors to pursue more productive tasks. About Lyondell Chemical LyondellBasell Industries is one of the world's largest polymers, petrochemicals and fuels companies. It is the global leader in polyolefins technology, production and marketing; a pioneer in propylene oxide and derivatives; and a significant producer of fuels and refined products, including biofuels. Through research and development, LyondellBasell develops innovative materials and technologies that deliver exceptional customer value and products that improve quality of life for people around the world. Headquartered in The Netherlands, LyondellBasell -- http://www.lyondellbasell.com/-- is privately owned by Access Industries. Basell AF and Lyondell Chemical Company merged operations in 2007 to form LyondellBasell Industries, the world's third largest independent chemical company. LyondellBasell became saddled with debt as part of the US$12.7 billion merger. On January 6, 2009, LyondellBasell Industries' U.S. operations and one of its European holding companies -- Basell Germany Holdings GmbH -- filed voluntary petitions to reorganize under Chapter 11 of the U.S. Bankruptcy Code to facilitate a restructuring of the company's debts. The case is In re Lyondell Chemical Company, et al., Bankr. S.D.N.Y. Lead Case No. 09-10023). Seventy-nine Lyondell entities, including Equistar Chemicals, LP, Lyondell Chemical Company, Millennium Chemicals Inc., and Wyatt Industries, Inc. filed for Chapter 11. In May 2009, one of the cases was dismissed -- Case No. 09-10068 -- because it is duplicative of Case No. 09- 10040 relating to Debtor Glidden Latin America Holdings. The Hon. Robert E. Gerber presides over the case. Deryck A. Palmer, Esq., at Cadwalader, Wickersham & Taft LLP, in New York, serves as the Debtors' bankruptcy counsel. Evercore Partners serves as financial advisors, and Alix Partners and its subsidiary AP Services LLC, serves as restructuring advisors. AlixPartners' Kevin M. McShea acts as the Debtors' Chief Restructuring Officer. Clifford Chance LLP serves as restructuring advisors to the European entities. Lyondell Chemical estimated that consolidated assets total US$27.12 billion and debts total US$19.34 billion as of the bankruptcy filing date. Lyondell has obtained approximately US$8 billion in DIP financing to fund continuing operations. The DIP financing includes two credit agreements: a US$6.5 billion term loan, which comprises a US$3.25 billion in new loans and a US$3.25 billion roll-up of existing loans; and a US$1.57 billion asset-backed lending facility. Luxembourg-based LyondellBasell Industries AF S.C.A. and another affiliate were voluntarily added to Lyondell Chemical's reorganization filing under Chapter 11 on April 24, 2009, in order to seek protection against claims by certain financial and U.S. trade creditors. On May 8, 2009, LyondellBasell Industries added 13 non-operating entities to Lyondell Chemical Company's reorganization filing under Chapter 11 of the U.S. Bankruptcy Code. All of the entities are U.S. companies and were added to the original Chapter 11 filing for administrative purposes. The filings will have no impact on current business or operations as none of the entities manufactures or sells products. Bankruptcy Creditors' Service, Inc., publishes Lyondell Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lyondell Chemical Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) MANHATTAN INVESTMENT: S.D.N.Y. Declines to Tax Costs to Trustee --------------------------------------------------------------- On appeal in a fraudulent transfer avoidance action challenging transfers that the debtors effected in furtherance of a Ponzi scheme, WestLaw reports, the district court would exercise its discretion not to tax against the trustee the costs that the defendant incurred in posting a supersedeas bond, though the district court ultimately found that fact issues as to whether the defendant had demonstrated the requisite diligence precluded entry of summary judgment for the trustee on the defendant's "good faith" defense. The district court, while rejecting the bankruptcy court's conclusion that summary judgment was warranted in favor of the trustee on the "good faith" defense, certainly did not conclude that a jury could not reach a decision consistent with that of the bankruptcy court and in favor of the trustee. Moreover, the proceeding involved numerous complex and novel issues, on most of which the trustee prevailed. In re Manhattan Inv. Fund Ltd., --- B.R. ----, 2009 WL 5178411 (S.D.N.Y.). Manhattan Investment Fund Ltd. sought chapter 11 protection on March 7, 2000 (Bankr. S.D.N.Y. Case No. 00-10922), estimating assets between $10 million and $50 million and liabilities of more than $100 million. Helen Gredd is the Chapter 11 Trustee for the Manhattan Investment Fund. MESA AIR: Moves to Terminate Excess Aircraft Leases --------------------------------------------------- Bill Rochelle at Bloomberg News reports that Mesa Air Group Inc. is seeking approval from the Bankruptcy Court to terminate leases for excess aircraft. From the outset, Mesa said that 52 unneeded aircraft were already parked and another 25 aren't needed. Mesa is seeking authorization from the bankruptcy court to end the leases immediately or at a future dates when the aircraft become surplus. The motion is scheduled for hearing on February 9. About Mesa Air Group Mesa currently operates 130 aircraft with approximately 700 daily system departures to 127 cities, 41 states, Canada, and Mexico. Mesa operates as Delta Connection, US Airways Express and United Express under contractual agreements with Delta Air Lines, US Airways and United Airlines, respectively, and independently as Mesa Airlines and go! Mokulele. This operation links Honolulu to the neighbor island airports of Hilo, Kahului, Kona and Lihue. The Company, founded by Larry and Janie Risley in New Mexico in 1982, has approximately 3,500 employees. Mesa Air Group Inc. and its units filed their Chapter 11 petitions Jan. 5 in New York (Bankr. S.D.N.Y. Case No. 10-10018), listing assets of $976 million against debt totaling $869 million as of Sept. 30, 2009. Richard M. Pachulski, Esq., and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP, serve as local counsel. Imperial Capital LLC is the investment banker. Epiq Bankruptcy Solutions is claims and notice agent. Bankruptcy Creditors' Service, Inc., publishes Mesa Air Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by Mesa Air Group Inc. and its units. (http://bankrupt.com/newsstand/or 215/945-7000) MICHAEL GEIGER: Voluntary Chapter 11 Case Summary ------------------------------------------------- Debtor: Michael Geiger 96 Woodhill Road Newtown, PA 18940 Bankruptcy Case No.: 10-10513 Chapter 11 Petition Date: January 25, 2010 Court: United States Bankruptcy Court Eastern District of Pennsylvania (Philadelphia) Judge: Jean K. FitzSimon Debtor's Counsel: Kenneth E. Aaron, Esq. Weir & Partners LLP 1339 Chestnut Street, Suite 500 Philadelphia, PA 19107 Tel: (215) 665-8181 Email: Kaaron@Weirpartners.Com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The petition was signed by Mr. Geiger. MICHAEL MACK: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Joint Debtors: Michael H. Mack Marilyn Kay Mack PO Box 217 Nolensville, TN 37135 Bankruptcy Case No.: 10-00682 Chapter 11 Petition Date: January 25, 2010 Court: United States Bankruptcy Court Middle District of Tennessee (Nashville) Debtors' Counsel: E. Covington Johnston, Esq. Johnston & Street 238 Public Sq Franklin, TN 37064 Tel: (615) 791-1819 Fax: (615) 791-1418 Email: ecjohnston@covad.net Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 According to the schedules, the Company has assets of $2,455,910 and total debts of $1,640,900. A full-text copy of the Debtors' petition, including a list of their 20 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/tnmb10-00682.pdf The petition was signed by the Joint Debtors. NATIONAL MEDICAL: S&P Withdraws 'BB' Corporate Credit Rating ------------------------------------------------------------ Standard & Poor's Ratings Services said that it withdrew its 'BB' corporate credit rating on the U.S.-based healthcare company National Medical Care Inc. as the company no longer has any publicly rated debt instruments outstanding. National Medical Care Inc. is a subsidiary of Germany-based health care company Fresenius Medical Care AG & Co. KGaA (BB/Stable/--). NEXTWAVE WIRELESS: Receives Delisting Notice From NASDAQ -------------------------------------------------------- NextWave Wireless Inc. announced that, on Jan. 22, 2010, the Company received a NASDAQ Staff Determination letter indicating that the Company's common stock is subject to delisting from The NASDAQ Global Market because of non-compliance with the $1.00 minimum bid price requirement, as set forth in NASDAQ Listing Rule 5450 (A 29.45, +0.28, +0.96%) (1), unless the Company requests a hearing before a NASDAQ Listing Qualifications Panel by the close of business on Jan. 29, 2010. The Company intends to timely request a hearing and accordingly its common stock will remain listed on The NASDAQ Global Market pending a final determination by the Panel. In connection with the hearing, the Company intends to submit a plan outlining its strategy for regaining compliance with the Rule, which the Company anticipates may include a reverse stock split. Under NASDAQ's Listing Rules, the Panel may, in its discretion, determine to continue the Company's listing pursuant to an exception to the Rule for a maximum of 180 calendar days from the date of the Staff Determination letter, or through July 21, 2010, in order to permit the Company adequate time to effectuate a reverse stock split or otherwise regain compliance with the Rule. However, there can be no assurance that the Panel will grant the Company additional time or that the Company's efforts to maintain the listing of its common stock on NASDAQ will be successful. About NextWave Wireless NextWave Wireless Inc. is a wireless technology company that develops, produces and markets mobile multimedia and consumer electronic connectivity products including device-embedded software for mobile handsets, client-server media platforms, media sharing software for consumer electronics and pocket-sized mobile broadcast receivers. The company also manages and maintains worldwide wireless spectrum licenses. NORANDA ALUMINUM: Moody's Upgrades Sr. Unsec. Notes Rating to Caa2 ------------------------------------------------------------------ Moody's Investors Service upgraded Noranda Aluminum Holding Corporation's Corporate Family Rating and Probability of Default Rating to B3 from Caa1. Moody's also upgraded Noranda's senior unsecured notes rating to Caa2 from Caa3. At the same time, Moody's upgraded Noranda Aluminum Acquisition Corporation's senior secured revolver and senior secured term loan ratings to B1 from B2 and raised the senior unsecured notes rating to Caa1 from Caa2. The speculative grade liquidity rating was also raised to SGL-2 from SGL-3. The rating outlook is positive. Noranda's B3 corporate family rating reflects the earnings enhancement that will result from the restart of substantially all of the New Madrid smelter pot lines with the company expecting to reach full capacity by March 2010, as well as the significant deleveraging of the company's capital structure, which was achieved through the partial monetization of its hedge book. The rating also acknowledges the cost savings that will be achieved through headcount reductions and other efficiencies, the strategic benefits of acquiring sole ownership of Noranda Alumina (formerly Gramercy), and the improving earnings trends given the more favorable aluminum price environment and incremental demand uptick. However, Moody's believe aluminum prices and volumes remain at risk to the downside as strong fundamental demand improvement is not yet evident and global inventories remain excessive. Nonetheless, the rating reflects Moody's expectation that Noranda's earnings performance, leverage and coverage ratios will be materially better in 2010 than was the case in 2009. The rating also considers Noranda's limited size, dimensioned by its single smelter operation and four rolling mills and its high absolute level of debt (including Moody's standard adjustments - approximately $931 million dollars on a pro forma basis in January 2010 after adjusting for the repayment of revolver borrowings). However, Moody's expect the company's leverage, as measured by the debt/EBITDA ratio, will improve to around 4.0x by the end of 2010 (whereas it was approximately 7x on a LTM basis to September 30, 2009), using LME aluminum prices in the mid-80 cents per pound range, and recognizing the 2010 portion of locked in hedge gains ($127.3 million of locked in 2010 and 2011 hedge gains remain as of January 14, 2009). Furthermore, the company's downstream fabricating operations, while heavily exposed to residential construction, have remained profitable (excluding impairment charges) although this business contributes a modest degree of earnings relative to the performance of Noranda's upstream operations. We anticipate 2010 primary aluminum volumes will show material improvement over 2009 levels as New Madrid becomes fully operational, however the ability to reach historical run rates remains uncertain given the expectation for only a slow improvement in critical end markets through the course of 2010. Given Noranda's earnings leverage to its primary aluminum operations, volumes in this segment combined with the company's improved cost position will drive the company's earnings performance going forward. The upgrade to Noranda's speculative grade liquidity rating, to SGL-2, reflects Moody's expectation for improved earnings and cash flow in 2010 as primary aluminum production volumes expand, higher prices are realized, and the cost basis improves, particularly given that the company will not need to purchase aluminum on the market to meet primary customer orders. In addition, 2010 performance will continue to benefit from cash realizations from Noranda's collared hedge book, which runs through 2011. Following the January 2010 repayment of $150 million of outstandings under its revolver, the company has ample availability. The positive outlook reflects Moody's expectation that Noranda will be able to evidence improving earnings performance on a sequential quarterly basis in 2010 as it benefits from the resumption of full production at New Madrid, together with the cost savings achieved to date and the benefits from sole ownership of the alumina refinery. The outlook also anticipates that the company will continue to apply proceeds from its hedge book to debt repayment, thereby continuing to strengthen its capital structure. Upgrades: Issuer: Noranda Aluminum Acquisition Corporation -- Senior Secured Bank Credit Facility, Upgraded to B1 from B2, LGD 2, 26% -- Senior Unsecured Regular Bond/Debenture, Upgraded to Caa1 from Caa2, LGD 5, 77% Issuer: Noranda Aluminum Holding Corporation -- Probability of Default Rating, Upgraded to B3 from Caa1 -- Speculative Grade Liquidity Rating, Upgraded to SGL-2 from SGL-3 -- Corporate Family Rating, Upgraded to B3 from Caa1 -- Senior Unsecured Regular Bond/Debenture, Upgraded to Caa2 from Caa3, LGD 6, 95% Outlook Actions: Issuer: Noranda Aluminum Acquisition Corporation -- Outlook, Changed To Positive From Stable Issuer: Noranda Aluminum Holding Corporation -- Outlook, Changed To Positive From Stable Moody's last rating action on Noranda Aluminum Holding Corporation and Noranda Aluminum Acquisition Corporation was on August 6, 2009, when the ratings were confirmed, concluding the review initiated on January 30, 2009 and continued on April 2, 2009. Headquartered in Franklin, Tennessee, Noranda generated revenues of $802 million for the twelve months ended September 30, 2009. It operates in two business segments: primary aluminum and downstream. NORANDA ALUMINUM: Plans to Sell $250,000,000 of Common Stock ------------------------------------------------------------ Noranda Aluminum Holding Corporation is seeking to sell $250,000,000 of Common Stock, par value $0.01 per share. Noranda intends to use the net proceeds from the shares, including any net proceeds from any sales of the common stock sold pursuant to the underwriters' over-allotment, for general corporate purposes. A full-text copy of Noranda's prospectus is available at no charge at http://ResearchArchives.com/t/s?4e46 About Noranda Aluminum Franklin, Tennessee-based Noranda Aluminum Holding Corporation -- http://www.norandaaluminum.com/-- is a North American integrated producer of value-added primary aluminum products, as well as high quality rolled aluminum coils. The Company has two businesses, an upstream and downstream business. The primary metals, or upstream business, produced approximately 261,000 metric tons of primary aluminum in 2008. The rolling mills, or downstream business, are one of the largest foil producers in North America and a major producer of light gauge sheet products. Noranda Aluminum Holding Corporation is a private company owned by affiliates of Apollo Management, L.P. As reported by the Troubled Company Reporter on January 19, 2010, Standard & Poor's Ratings Services placed its 'CCC+' corporate credit rating on Noranda Aluminum Holding Corp. on CreditWatch with positive implications. The issue-level ratings on Noranda and its operating subsidiary, Noranda Aluminum Acquisition Corp., are not part of this rating action and remain 'D'. The TCR said August 10, 2009, that Moody's Investors Service confirmed Noranda Aluminum Holding Corporation's Caa1 Probability of Default rating, Caa1 Corporate Family Rating, and Caa3 senior unsecured notes rating. At the same time, Moody's confirmed Noranda Aluminum Acquisition Corporation's B2 senior secured revolver and senior secured term loan ratings and its Caa2 senior unsecured notes rating. The speculative grade liquidity rating remains SGL-3 and the rating outlook is stable. NUVEEN INVESTMENTS: Broker Dealer Faces FINRA Disciplinary Action ----------------------------------------------------------------- In connection with the previously disclosed inquiry by the Financial Industry Regulatory Authority into activities by Nuveen Investments, Inc.'s broker dealer subsidiary, Nuveen Investments, LLC, relating to the marketing and distribution of auction rate preferred securities, FINRA's staff has notified Nuveen's broker dealer that the staff has made a preliminary determination to recommend that a disciplinary action be brought against the broker dealer. The potential charges recommended by the staff of FINRA in such action would allege that certain ARPS marketing materials provided by Nuveen's broker dealer were false and misleading from 2006 to 2008 and also would allege failures by Nuveen's broker dealer relating to its supervisory system with respect to the marketing of ARPS during that period. The staff of FINRA has provided Nuveen's broker dealer an opportunity to make a written submission to FINRA to aid its consideration of whether to revise or go forward with the staff's preliminary determination to recommend disciplinary action. Nuveen's broker dealer is preparing such a submission responding to the potential allegations and asserting its defenses. Nuveen's broker dealer anticipates continuing to discuss these matters with the staff of FINRA. About Nuveen Investments Nuveen Investments, Inc., headquartered in Chicago, is a U.S.- domiciled holding company whose subsidiaries provide investment management products and services to retail and institutional investors predominantly in the US. The company's assets under management were $128 billion as of June 30, 2009. At September 30, 2009, the Company had total assets of $6,657,946,000 against total liabilities of $5,692,573,000. "We believe that funds generated from operations and existing cash reserves will be adequate to fund debt service requirements, capital expenditures and working capital requirements for the foreseeable future. Our ability to continue to fund these items and to service debt may be affected by general economic, financial, competitive, legislative, legal and regulatory factors and by our ability to refinance or repay outstanding indebtedness with scheduled maturities beginning in November 2013," Nuveen Investments said. On April 1, 2009, Moody's Investor Service lowered Nuveen Investments' corporate family rating to Caa1, the rating for its senior secured credit facilities to B3, and the rating for its senior unsecured notes to Caa3. In addition, on April 1, 2009, Standard and Poor's Ratings Services lowered Nuveen Investments' local currency long-term counterparty credit rating to B-. ONEIDA LTD: Judge Affirms Dismissal of $6M Claim in Oneida Ch. 11 ----------------------------------------------------------------- Law360 reports that a federal judge has upheld a bankruptcy judge's decision to expunge a breach of contract claim for more than $6 million brought by financial advisory firm Peter J. Solomon Co. LP against Oneida Ltd. because the flatware maker didn't send written notice before retaining another adviser ahead of its March 2006 Chapter 11 filing. Headquartered in Oneida, New York, Oneida Ltd. (OTC: ONEI) -- http://www.oneida.com/-- manufactures stainless steel and silverplated flatware for both the Consumer and Foodservice industries, and supplies dinnerware to the foodservice industry. Oneida also supplies a variety of crystal, glassware and metal serveware for the tabletop industries. The Company has operations in the United States, Canada, Mexico, the U.K., and Australia. The Company and its eight affiliates filed for Chapter 11 protection on March 19, 2006 (Bankr. S.D. N.Y. Case No. 06-10489). On May 12, 2006, Judge Gropper approved the Debtors' disclosure statement. Their pre-negotiated plan of reorganization was confirmed on Aug. 31, 2006. The company emerged from Chapter 11 on Sept. 15, 2006, as a privately held company. OPUS EAST: Cooch & Taylor Bills $172,000 for July-Oct. ------------------------------------------------------ Cooch & Taylor asserts $171,992 in fees and $2,828 as reimbursement of expenses incurred as counsel to Jeoffrey L. Burtch, the duly appointed Chapter 7 Trustee of the Opus East Debtors, for services performed for the benefit of Debtor Opus East LLC for the period from July to October 2009. In a separate application, Cooch & Taylor asserts $71,486 in fees and $142 as reimbursement of expenses incurred for services performed for Debtors APG I and APG II for the period from July to October 2009. In a separate filing, Land Partners, Inc. asserts $41,370 in fees and reimbursement of $620 in expenses incurred from July 23 to November 20, 2009. About Opus East Rockville-based Opus East LLC has developed more than 13.3 million square feet of space since starting operations in 1994. It filed for Chapter 7 liquidation in the U.S. Bankruptcy Court for the District of Delaware. Opus East LLC listed $100 million to $500 million in debts, against $50 million to $100 million in assets in its Chapter 7 petition. 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 Chapter 7 proceedings of Opus East their related debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) OPUS WEST: Proposes Settlement With Two Former Employees -------------------------------------------------------- Opus West Corp. and its debtor-affiliates ask the Court to approve their claims settlement agreement with two of their employees, Jefferson E. Hill, Jr. and Tomas E. Schaal, Jr. Vickie L. Driver, Esq., at Pronske & Patel PC, in Dallas, Texas, relates that the Debtors and the Employees desire to avoid the expense, inconvenience, delay and uncertainty of litigation by compromising and settling the claims and disputes arising pursuant to the Employees' wage and other related claims as well as a certain separation agreement and general release of all claims. Prior to the termination of their employment, each of the Employees entered into Separation Agreements, which provided that the Debtors would make payments to each of the Employees in exchange for the Employees' release of claims against Opus West and all of its affiliates. Ms. Driver notes that the payments owed by the Debtors under the Separation Agreements total over $1 million -- $960,347 for Mr. Hill and $130,103 for Mr. Shaal. The Debtors' Settlement Agreement with the Employees provides that each of the Employees are willing to release all claims against the Debtors, except for their $10,950 priority wage claims, in exchange for rescission of the Separation Agreements. The Employees will be able to retain all payments made under the Separation Agreements, but the Debtors will no longer be liable for any other payments. Ms. Driver asserts that the Settlement Agreement is a product of arm's-length negotiations between the Debtors and the Employees. The Settlement terms are fair, she maintains. She adds that the Settlement will result in the release of approximately $1 million in unsecured claims, as well as the avoidance of other potential damages in the event the Employees are forced to seek rescission of the Separation Agreements through litigation. 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 EAST: Trustee Proposes Backlick Road Property Sale ------------------------------------------------------- Jeoffrey L. Burtch, the appointed Chapter 7 trustee for the Opus East Debtors, ask the Court for authority to sell and transfer the Opus East Debtors' interest in a property, commonly known as 7800 Backlick Road, located in Springfield, Fairfax County, Virginia. The Backlick Road Property is comprised of a 20,000 sq. ft. building utilized by EEE of Fairfax LLC and EEE Auto Sales, Inc., the current tenants, as a car dealership showroom, together with approximately 250 car parking spaces. Wachovia Bank, National Association, is the Debtors' secured lender with respect to the Property. The Chapter 7 Trustee calculates the indebtedness owed to Wachovia Bank to be approximately $3,100,000 pursuant to a certain Deed of Trust between Opus East LLC and TRSTE, Inc., and Wachovia. As of the Petition Date, the Property was leased to the EEE Tenants pursuant to a lease agreement. The Lease's initial expiration date was November 20, 2009, subject to the Tenants' right to extend the term. The Original Lease is secured by a personal guaranty of Enayet Rashid. According to John D. McLaughlin, Jr., Esq., at Young Conaway Stargatt & Taylor LLP, in Wilmington, Delaware, the Tenants failed to exercise their right to extend the term of the Original Lease. Accordingly, to provide the Tenants with sufficient time to relocate their business, the Chapter 7 Trustee agreed to extend the term of the Original Lease through March 31, 2010, with an automatic month-to-month renewal of the term thereafter, subject to either party's right to terminate the Original Lease upon at least 120 days' prior written notice to the other party. Mr. McLaughlin discloses that the Chapter 7 Trustee has been working to market the Property cooperatively with several interested parties who are aware that the Property is available for sale, including COPT Acquisitions, Inc., a Delaware corporation, a subsidiary of Corporate Office Properties Trust, an active but ultimately unsuccessful bidder in a prior proceeding in the Court for the Debtor's real property located in Aberdeen, Maryland. The Chapter 7 Trustee has also received inquiries from other parties who have expressed an interest, including COPT. According to Mr. McLaughlin, the highest offer for the Property was received from COPT who offered $4,500,000. Accordingly, the Opus East Debtors entered into a Real Estate Purchase and Sale Agreement with COPT for the sale of the Property, free and clear of all claims, liens and encumbrances. The Sale Agreement also contemplates that COPT will serve as a stalking horse bidder for the Property, and will be entitled to break-up-fee amounting equal to 2.25% of the purchase price and reimbursement of certain expenses arising in connection with the sale transaction in an amount not to exceed $150,000. The Expense Reimbursement will be treated as an administrative expense pursuant to Section 507(a)(1) of the Bankruptcy Code and will be paid to COPT upon the closing of the sale to a successful bidder other than COPT. Mr. McLaughlin assures the Court that COPT is not an "insider" of the Debtor as that term is defined under Section 101(13) of the Bankruptcy Code and the Agreement was negotiated without collusion, at arm's-length and in good faith by both parties. The Chapter 7 Trustee avers that it desires to maximize the value of the Property and to set the fair market price by holding a public auction sale. The Chapter 7 Trustee thus seeks the establishment of uniform bidding and sale procedures, which contemplate an auction process pursuant to which bids will be subject to higher or better offers and which establishes a minimum bid equal to the Purchase Price, plus payment of the Break-Up-Fee and Expense Reimbursement. A copy of the Sale Procedures is available for free at: http://bankrupt.com/misc/OEBidProc.pdf About Opus East Rockville-based Opus East LLC has developed more than 13.3 million square feet of space since starting operations in 1994. It filed for Chapter 7 liquidation in the U.S. Bankruptcy Court for the District of Delaware. Opus East LLC listed $100 million to $500 million in debts, against $50 million to $100 million in assets in its Chapter 7 petition. 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 Chapter 7 proceedings of Opus East their related debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) PALM SPRINGS: Case Summary & Unsecured Creditor ----------------------------------------------- Debtor: Palm Springs Enterprises, LLC 369 N Palm Canyon Dr Palm Springs, CA 92262 Bankruptcy Case No.: 10-11838 Chapter 11 Petition Date: January 25, 2010 Court: United States Bankruptcy Court Central District of California (Riverside) Debtor's Counsel: Gene E O'Brien, Esq. Law Office of Gene E O'Brien 74040 Hwy 111 #210 Palm Desert, CA 92260 Tel: (760) 340-5200 Fax: (760) 340-5233 Email: geneeob@aol.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 According to the schedules, the Company has assets of $4,000,000 and total debts of $1,622,000. The Debtor identified Bank of America with a line of credit debt claim for $250,000 as its largest unsecured creditor. A full-text copy of the Debtor's petition, including a list of its largest unsecured creditor, is available for free at: http://bankrupt.com/misc/cacb10-11838.pdf The petition was signed by George Kessinger, managing member of the Company. PARTITIONS PLUS: United Rentals Loses Preferential Transfer Appeal ------------------------------------------------------------------ In a dispute over preferential transfers, a federal appeals court has upheld a ruling requiring United Rentals Inc. to return payments it received from Partitions Plus of Wilmington Inc. before its bankruptcy filing, Law360 reports. About Partitions Plus Partitions Plus of Wilmington, Inc., doing business as Partitions, Inc., installs interior walls, studs, wall finishes, insulation, ceiling tile, together with interior and exterior stucco finishes, and other related items. It filed for Chapter 11 on September 1, 2004 (Bankr. E.D. N.C. Case No. 04-06776). James Oliver Carter, Esq., at Carter & Carter, PA, represented the Debtor in its restructuring effort. The petition says debts range from $1 million to $10 million. About United Rentals Greenwich, Connecticut-based United Rentals, Inc. (NYSE: URI) -- http://www.unitedrentals.com/-- is the largest equipment rental company in the world, with an integrated network of 568 rental locations in 48 states, 10 Canadian provinces and Mexico. The company's 8,000 employees serve construction and industrial customers, utilities, municipalities, homeowners and others. The company offers for rent 3,000 classes of rental equipment with a total original cost of $3.8 billion. United Rentals is a member of the Standard & Poor's MidCap 400 Index and the Russell 2000 Index(R). As of September 30, 2009, the Company had $3.895 billion in total assets against $3.913 billion in total liabilities, resulting in stockholders' deficit of $18 million. PENN TRAFFIC: Tops Markets Buying Supermarket Operations -------------------------------------------------------- Bill Rochelle at Bloomberg News reports that Penn Traffic Co. obtained approval from the Bankruptcy Court to sell most of its assets to Tops Markets LLC. Tops is paying $85 million cash while structuring the acquisition so there is no $72 million claim arising from what otherwise would have been the termination of a pension plan. In addition, the Tops offer will reduce a supplier's claim by $27 million. The contract with Tops requires completion of the sale by Jan. 28. According to the report, Tops will act as Penn Traffic's agent to sell inventory and operate the stores until it decides which stores it will keep and which it won't. By continuing will be a majority of the stores, Penn Traffic won't be facing so much in lease termination claims. Syracuse, New York-based The Penn Traffic Company -- dba P&C Foods, Bi-Lo Foods, and Quality Markets -- operates supermarkets in Pennsylvania, upstate New York, Vermont, and New Hampshire under the Bilo, P&C and Quality trade names. The Company filed for Chapter 11 bankruptcy protection on November 18, 2009 (Bankr. D. Delaware Case No. 09-14078). Ann C. Cordo, Esq., and Gregory W. Werkheiser, Esq., at Morris, Nichols, Arsht & Tunnell assist the Company in its restructuring effort. Donlin Recano is the Company's claims agent. The Company listed $150,347,730 in assets and $136,874,394 in liabilities as of May 4, 2009. These affiliates also filed separate Chapter 11 petition: Sunrise Properties, Inc.; Pennway Express, Inc.; Penny Curtiss Baking Company, Inc.; Big M Supermarkets, Inc.; Commander Foods Inc.; P and C Food Markets, Inc. of Vermont; and P.T. Development, LLC. PHILADELPHIA ORCHESTRA: Seeks $15-Mil. Funding; Bankruptcy Looms ---------------------------------------------------------------- Peter Dobrin at Inquirer Music Critic reports that bankruptcy looms for The Philadelphia Orchestra amid plummeting attendance and severely strained finances. "I can tell you our effort is to avoid bankruptcy and to achieve a recovery for the orchestra. For that to work out, we need to see some progress in reducing the deficit and raising money for the recovery fund," orchestra chairman Richard B. Worley said, according to Inquirer Music Critic. According to Inquirer Music Critic, the goal of the recovery fund, also called an emergency bridge fund, is $15 million. According to Inquirer Music Critic, no decision on bankruptcy has been made. "It isn't preferable," said Allison Vulgamore, who started work Monday as the orchestra's president and chief executive officer, Inquirer Music Critic reports. QUALITY CANDY: Files for Chapter 11 Protection in Milwaukee ----------------------------------------------------------- Quality Candy Shoppes/Buddy Squirrel of Wisconsin Inc. sought protection under Chapter 11 in the U.S. Bankruptcy Court in Milwaukee, listing both assets and debts of between $1 million and $10 million, Rich Kirchen at The Business Journal of Milwaukee. The company said it owes $89,938 to Cargill Inc.; $10,959, Wright Brothers Paper Box; $10,332, Lakefront Communications; $8,910, George Pinter; and $8,032, J.M. Swank Co., Mr. Kirchen notes. The Court allowed the company to provide an accounting of its cash use and make interest-only payments to banks, Mr. Kirchen says. Quality candy Shoppes/Buddy Squirrel of Wisconsin Inc owns Quality Candy Shoppes and Buddy Squirrel that owns and operates stores in the Milwaukee area, Racine and Madison. QUANTUM CORP: Wells Fargo, Harrosh Disclose Equity Stake -------------------------------------------------------- Wells Fargo and Company disclosed that it may be deemed to beneficially own 13,172,641 or roughly 6.18% of the common stock of Quantum Corporation as of December 31, 2009. Meanwhile, Joseph L. Harrosh disclosed that he may be deemed to beneficially own less than 5% of Quantum Corp. common stock. Meanwhile, Quantum's Leadership and Compensation Committee on January 1, 2010, amended the Company's Employee Stock Purchase Plan to set the maximum number of shares available for sale under the ESPP in any one offering period at two million (2,000,000) shares of the Company's common stock (subject to adjustment upon changes in capitalization of the Company as provided in Section 18 of the ESPP). About Quantum Based in San Jose, California, Quantum Corp. (NYSE:QTM) -- http://www.quantum.com/-- is a storage company specializing in backup, recovery and archive. Quantum provides a comprehensive, integrated range of disk, tape, and software solutions supported by a world-class sales and service organization. As of September 30, 2009, the Company had $501.6 million in total assets against $247.2 million in total current liabilities and $352.9 million in total long-term liabilities, resulting in $98.5 million in stockholders' deficit. * * * As reported by the Troubled Company Reporter on July 10, 2009, Standard & Poor's Ratings Services raised its corporate credit rating on Quantum Corp. to 'B-' from 'CC'. S&P also raised the company's subordinated rating to 'CCC' from 'C'. S&P has removed all ratings from CreditWatch, where they were placed on April 3, 2009. The outlook is negative. The TCR said July 8, 2009, Moody's Investors Service upgraded Quantum's corporate family rating and probability of default rating each to B3, from Caa1 and Ca, respectively, following the announcement that the Company has repurchased more than $135 million of its 4.375% Convertible Subordinated Notes due 2010. The rating outlook is positive. READER'S DIGEST: Moody's Assigns 'B1' Corporate Family Rating ------------------------------------------------------------- Moody's Investors Service assigned The Reader's Digest Association, Inc. a B1 Corporate Family Rating, B1 Probability of Default Rating and B1 senior secured note rating based on the company's proposed reorganized capital structure upon emergence from Chapter 11 bankruptcy. Moody's also assigned RDA a SGL-2 speculative-grade liquidity rating. RDA plans to utilize the net proceeds from the notes along with existing cash to repay in full all of the term loans that are being issued in the reorganization. The rating outlook is stable. Assignments: Issuer: Reader's Digest Association, Inc. (The) -- Corporate Family Rating, Assigned B1 -- Probability of Default Rating, Assigned B1 -- Senior Secured Regular Bond/Debenture, Assigned a B1, LGD4 - 56% -- Speculative Grade Liquidity Rating, Assigned SGL-2 Outlook Actions: Issuer: Reader's Digest Association, Inc. (The) -- Outlook, Assigned Stable The bankruptcy court confirmed RDA's November 30, 2009 third amended joint Chapter 11 plan of reorganization on January 19, 2010, and the company expects the POR to become effective by the end of January 2010. Approximately $1.75 billion of the company's $2.3 billion of debt (including a $150 million fully funded debtor-in-possession facility) along with preferred stock issued by RDA's parent company would be eliminated under the proposed plan. In addition, RDA reached an agreement to retire the approximate $180 million pension obligation of its U.K. subsidiary for an $17.6 million cash payment and one-third equity interest in RDA UK. The reorganization will significantly reduce the company's debt and cash interest burden and provide more financial and operating flexibility. RDA's B1 CFR reflects revenue pressure from declining demand for the mature print-based publishing products, exposure to cyclical discretionary consumer spending, and the high (albeit lower) debt- to-EBITDA leverage (low 4x range pro forma for the effects of the reorganization and incorporating Moody's standard adjustments) expected following the reorganization. RDA is attempting to capitalize on its portfolio of recognizable brands, significant global distribution capabilities, and broad content generation in four key affinity groups (food, health/wellness, home/garden and personal inspiration/education) to retain and attract consumers and preserve pricing as media consumption habits evolve to include more digitized formats including online and mobile applications. At the same time, RDA is implementing a range of cost saving measures to reduce fixed costs and create more operational flexibility. Moody's expects the revenue initiatives, ongoing operational restructuring along with the material decline in debt and cash interest expense will allow for modest free cash flow generation. Moody's anticipates RDA will redeploy free cash flow to reduce debt and make strategic acquisitions and investments. RDA is targeting a conservative 2.0x gross debt-to-cash EBITDA leverage profile (company definition) and indicated it is not contemplating a dividend or share repurchases until leverage falls closer to this level. However, Moody's believes the shareholder base of mature companies such as RDA prefer cash returns, and contemplates RDA introducing a modest dividend and/or share repurchase program over time. The SGL-2 speculative-grade liquidity rating reflects RDA's good liquidity position over the next 12 months with $175 million of cash expected upon emergence, positive projected free cash flow of approximately $50 million over the next 12 months, no required debt repayments, and a reasonable cushion under the revolver's financial maintenance covenants. The stable rating outlook reflects Moody's expectation that RDA will maintain a good liquidity position over the next 12-18 months that will provide the company flexibility to manage in the consumer spending downturn, continue to execute its affinity-based operating strategy, and further streamline costs. Moody's anticipates RDA's debt-to-EBITDA leverage will remain in a 4x range as the company executes these initiatives. The POR contemplates conversion of the pre-petition credit facility into approximately $555 million of exit term loans (inclusive of the conversion of the DIP loan into an exit term loan) and 100% of the reorganized common stock (subject to dilution for warrants and management incentive plans). RDA has decided to refinance the exit term loans into the proposed notes concurrent with the effective date of the reorganization to extend the maturity profile and reduce interest expense. The company's debt capital structure after the offering will consist of the notes, an undrawn $50 million senior secured revolver, and approximately $2 million drawn under international lines of credit. Moody's rating assignments are subject to a review of the final terms and conditions of the debt instruments, and the company's liquidity position including headroom under financial maintenance covenants. RDA and its domestic subsidiaries filed for Chapter 11 bankruptcy on August 24, 2009. Moody's last rating action for RDA was on September 2, 2009, when a Ba1 rating was assigned to the company's $150 million DIP facility. In accordance with Moody's practice, the DIP facility rating was withdrawn on September 10, 2009. RDA'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 RDA's core industry and believes RDA's ratings are comparable to those of other issuers with similar credit risk. RDA, headquartered in Pleasantville, New York, is a global publisher and direct marketer of products including books, magazines, recorded music collections and home videos, and food and gifts. LTM 9/30/09 revenue incorporating the pending sale of CompassLearning was approximately $2.1 billion. REFCO INC: Post-Confirmation Report for Q4 2009 ----------------------------------------------- Refco, Inc., and its affiliates, including Refco Capital Markets, Ltd., delivered to the U.S. Bankruptcy Court for the Southern District of New York a copy of their post-confirmation quarterly report for the period from October 1 to December 31, 2009. According to Valerie E. DePiro, chief financial officer of Refco Inc. and Refco Capital Markets, Ltd., a cash balance of $69,196,000 at the beginning of October 2009 increased to $73,484,000 at the end of the reporting period. The Reorganized Debtors received $37,449,000 in total cash and disbursed $33,161,000 for the fourth quarter of 2009. Unaudited Schedule of Cash Receipts and Disbursements (in thousands) Beginning Inter-Ending Debtor Balance Receipts Company Disbursements Balance ----- ------- -------- ------- ------------- ------- Refco Capital Markets $17,203 $63 $31,000 ($29,828) $18,438 Refco Capital LLC 45,151 37,386 (33,929) (744) 47,864 Refco F/X Assoc. 6,708 0 - (22) 6,686 Refco Group Ltd. - - - - - Refco Regulated - - - - - Refco Inc. 134 - 2,929 (2,567) 496 Westminster- Refco - - - - - ------- -------- ------- ------------- ------- Totals $69,196 $37,449 $- ($33,161) $73,484 The Reorganized Debtors served as paying agent for certain non- Debtors and Refco LLC. The $63,000 in receipts for RCM includes proceeds miscellaneous asset recoveries and interest income. The $37.3 million in receipts for Refco Capital LLC consists of $6.3 million from Refco Securities LLC, a non-Debtor, $30.87 million from Refco LLC, and recoveries of miscellaneous assets, including interest income. The $744,000 in disbursements includes the payment of operating expenses. The $22,000 in disbursements for Refco F/X Associates, LLC represents operating expenses and professional fees, according to Ms. DePiro. Ms. DePiro disclosed that the intercompany receipt of $2.9 million represents RCC's funding of Refco Inc. in accordance with the Eighth Interim Distribution to Allowed Contributing Debtor Class 5a Unsecured Claims. The $2.56 million in disbursements represents payments made on account of the Eighth Interim Distribution to Allowed Contributing Debtor Class 5a Unsecured Claims. Cash at December 31, 2009, included $413,000 in outstanding checks from Interim Distributions to Allowed Claims. Schedule of Cash Distributions to Creditors (In Thousands) Quarter Ended Emergence Dec. 31, 2009 to Date ------------- --------- Administrative and Operating Expenses $909 $95,990 TREATMENT OF CONTRIBUTING DEBTORS' CREDITORS AND INTEREST HOLDERS Priority Tax Claims - 1,613 Class 1 - Non Tax Priority Claims - - Class 2 - Other Secured Claims - - Class 3 - Secured Lender Claims - 703,967 Class 4 - Senior Subordinated Note Claims - 335,985 Class 5(a) - Contributing Debtors General Unsecured Claims 2,567 144,944 Class 5(b) - Related Claims - - Class 6 - RCM Intercompany Claims - - Class 7 - Subordinated Claims - - Class 8 - Old Equity Interests - - TREATMENT OF FXA CREDITORS Priority Tax Claims - 90 Class 1 - FXA Non-Tax Priority Claims - - Class 2 - FXA Other Secured Claims - - Class 3 - FXA Secured Lender Claims - - Class 4 - FXA Sr. Subordinated Note Claims - - Class 5(a) - FXA General Unsecured Claims - 19,453 Class 5(b) - Related Claims - - Class 6 - FXA Convenience Claims - 4,827 Class 7 - FXA Subordinated Claims - - TREATMENT OF RCM CREDITORS Priority Tax Claims - - Class 1 - RCM Non-Tax Priority Claims - - Class 2 - RCM Other Secured Claims - - Class 3 - RCM FX/Unsecured Claims 15,607 442,793 Class 4 - RCM Securities Customer Claims 13,963 2,664,073 Class 5 - RCM Leuthold Metals Claims - 19,364 Class 6 - Related Claims - - Class 7 - RCM Subordinated Claims - - According to Ms. DePiro, all employees were terminated by the Debtors at September 30, 2008. From time to time, the Debtors continue to utilize former employees as contractors to assist with certain wind-down activities, including effectuating distributions to creditors, for which former employees are compensated on an hourly basis. Tax claims and notices were received by the Debtors from the IRS and State taxing authorities in the aggregate amount of approximately $20 million. All of the original 47 claims filed have been expunged or resolved. Allowed Claims total approximately $1.6 million and have been paid. All insurance policies are fully paid for the current period, Ms. DePiro told the Court. A full-text copy of the Reorganized Debtors' Post-Confirmation Quarterly Report for the Fourth Quarter 2009 is available at no charge at http://bankrupt.com/misc/Refco4thQ2009PostCon.pdf About Refco Inc. Headquartered in New York, Refco Inc. -- http://www.refco.com/-- was a diversified financial services organization with operations in 14 countries and an extensive global institutional and retail client base. Refco's worldwide subsidiaries were members of principal U.S. and international exchanges, and were among the most active members of futures exchanges in Chicago, New York, London and Singapore. Refco was also a major broker of cash market products, including foreign exchange, foreign exchange options, government securities, domestic and international equities, emerging market debt, and OTC financial and commodity products. Refco was one of the largest global clearing firms for derivatives. The Company had operations in Bermuda. The Company and 23 of its affiliates filed for Chapter 11 protection on October 17, 2005 (Bankr. S.D.N.Y. Case No. 05- 60006). J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represented the Debtors in their restructuring efforts. Milbank, Tweed, Hadley & McCloy LLP, represented the Official Committee of Unsecured Creditors. Refco reported US$16.5 billion in assets and US$16.8 billion in debts to the Bankruptcy Court on the first day of its Chapter 11 cases. The Court confirmed the Modified Joint Chapter 11 Plan of Refco Inc. and certain of its Direct and Indirect Subsidiaries, including Refco Capital Markets, Ltd., and Refco F/X Associates, LLC, on December 15, 2006. That Plan became effective on Dec. 26, 2006. Pursuant to the plan, RJM, LLC, was named plan administrator to reorganized Refco, Inc. and its affiliates, and Marc S. Kirschner as plan administrator to Refco Capital Markets, Ltd. Bankruptcy Creditors' Service, Inc., publishes Refco Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by Refco Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) RES-CARE INC: S&P Affirms Corporate Credit Rating at 'BB-' ---------------------------------------------------------- Standard & Poor's Ratings Services affirmed the ratings, including the 'BB-' corporate credit rating, on Res-Care Inc. S&P also revised the outlook on the company to negative from stable. The ratings on the Louisville, Kentucky-based company reflect its susceptibility to state budget cuts, narrow operating focus, and already-slim profit margins. These are predominating risk factors despite Res-Care's successful track record of acquisitive growth in previous years, which has allowed the company to expand and diversify its core operations. Because of a weak macroeconomic environment, some states have had to impose budget cuts that have effectively scaled back growth opportunities for Res-Care in many of its operating divisions. This has been the key contributing factor in the company's recent revision of its earnings guidance for fourth-quarter 2009. This has raised concerns that the company will fall short of S&P's earlier earnings expectations for fiscal 2010. "The negative outlook reflects potential threats to operating margins from state budget cuts, along with possibly higher debt leverage if the pending legal judgment is finalized and the company must fund the judgment," said Standard & Poor's credit analyst Tahira Y. Wright. This also raises the risk of a lower debt covenant cushion that could impair liquidity. S&P could lower the ratings if anticipated state budget cuts are greater than S&P expected, contributing to a decline in margins, S&P believes total lease-adjusted leverage will rise to and remain at above 4x, and if the covenant cushion falls 10%. "We could revise the outlook to stable if the company can successfully reduce costs to contend with budget cuts and the outlook for its payor sources does not deteriorate further, such that lease-adjusted debt leverage declines to a sustainable level near historic levels of below 3x," she continued. RICKIE WALKER: Case Summary & 7 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Rickie Walker 3830 Whitney Oaks Dr Rocklin, CA 95765 Bankruptcy Case No.: 10-21656 Chapter 11 Petition Date: January 25, 2010 Court: United States Bankruptcy Court Eastern District of California (Sacramento) Judge: Ronald H. Sargis Debtor's Counsel: Mitchell L. Abdallah, Esq. 980 9th St 16th Fl Sacramento, CA 95814 Tel: (916) 446-1974 Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 According to the schedules, the Company has assets of $1,208,877, and total debts of $2,302,785. A full-text copy of Mr. Walker's petition, including a list of his 7 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/caeb10-21656.pdf The petition was signed by Mr. Walker. S-TRAN HOLDINGS: Hearing on Ch. 11 Case Conversion Set for Today ---------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware will consider at a hearing today, January 27, 2010, at 2:30 p.m. (prevailing Eastern Time), S-Tran Holdings, Inc., et al.'s motion to convert their Chapter 11 cases to one under Chapter 7 of the Bankruptcy Code. The Debtors relate that they do not have the ability to fund the Chapter 11 cases going forward. Among other things, the Debtors do not have the ability to pay the administrative expenses that would continue to accrue on account of the U.S. Trustee fees or services of professionals of the estates. Headquartered in Cookeville, Tennessee, S-Tran Holdings, Inc., provides common carrier services and specialized in less-than- truckload shipments and also supplies overnight and second day service to shippers in 11 states in the Southeast and Midwestern United States. The company and its debtor-affiliates filed for Chapter 11 relief on May 13, 2005 (Bankr. D. Del. Case No. 05-11391). Bruce Grohsgal, Esq., Laura Davis Jones, Esq., Michael Seidl, Esq., and Sandra G.M. Selzer, Esq., at Pachulski Stang Ziehl Young & Jones LLP represent the Debtors as counsel. Christopher A. Ward, Esq., at Polsinelli Shalton Flanigan Suelthaus, Mary E. Augustine, Esq., at Ciardi, Ciardi & Astin, P.C., and Steven M. Yoder, Esq., at Potter Anderson & Corroon LLP, represent the Official Committee of Unsecured Creditors as counsel. When the Debtors filed for protection from their creditors, they listed total assets of $22,508,000 and total debts of $30,891,000. ST. VINCENT'S: Faces Cash Flow Crunch, Bankruptcy ------------------------------------------------- Barbara Benson at Crain's New York Business reports Saint Vincent Catholic Medical Centers may be on the brink of a second bankruptcy filing just two years after emerging from Chapter 11. Crain's says St. Vincent's has reached out to several hospitals at the urging and guidance of state health department officials, with a goal of brokering a deal that will keep it out of bankruptcy court. One source familiar with negotiations told Crain's St. Vincent's has operating debt of as much as $100 million. Crain's says St. Vincent's crushing cash flow crunch has forced it into default on its Chapter 11 reorganization plan. According to Crain's, Continuum Health Partners said in a statement that it has had discussions with St. Vincent's that focus on "how our two organizations could work together in the future to address many of the difficult issues facing health care providers in New York City. Our proposal to the St. Vincent Board, submitted at its request, was intended as an alternative to financial liquidation. If St. Vincent is able to continue to meet its mission on its own, they have our full support." "Eight separate budget cuts from New York state over the last two years and the worst recession in many decades have combined to present St. Vincent's with some serious financial challenges," Crain's cited Henry J. Amoroso, chief executive of St. Vincent Catholic Medical Centers, as saying. "Despite these challenges, St. Vincent's has continued to provide quality healthcare, and working together with our lenders at GE Capital and TD Commerce, I firmly believe that we can continue to work with the state as well as other healthcare providers so we can emerge as a stronger healthcare system for the hundreds of thousands of New Yorkers who we treat each and every year." Crain's relates the state Department of Health said at this point it has no plan from St. Vincent's to approve. Crain's relates St. Vincent's is in default of its reorganization plan. It missed a $10 million payment to a trust fund created to deal with medical malpractice cases. Crain's reports that, according to a court document, St. Vincent's failed to transfer $10 million to the MedMal Trusts on August 30, the anniversary of the plan's effective date. Crain's says lawyers tried to work with St. Vincent's to cure the default, including an asset sale. But on January 19, Crain's continues, St. Vincent's informed the fund that it would not cure the default with a $10 million payment. Instead, St. Vincent's is distributing $18.6 million to other creditors, according to the document. Crain's says lawyers sought to keep the issue out of court dockets "in an effort to protect the sensitivity of these matters and to provide SVCMC with an opportunity to avoid a second bankruptcy filing." About Saint Vincent Catholic Medical Centers Saint Vincent Catholic Medical Centers -- http://www.svcmc.org/-- is anchored by St. Vincent's Hospital Manhattan, an academic medical center located in Greenwich Village and the only emergency room on the Westside of Manhattan from Midtown to Tribeca, St. Vincent's Westchester, a behavioral health hospital in Westchester County, and continuing care services that include two skilled nursing facilities in Brooklyn, another on Staten Island, a hospice, and a home health agency serving the Metropolitan New York area. Its behavioral health services also provide supportive housing programs for people with mental illness throughout the Metropolitan area. Saint Vincent's is the designated provider for the New York and New Jersey region of the US Family Health Plan sponsored by the US Department of Defense. Saint Vincent's serves as the academic medical center of New York Medical College in New York City. The healthcare organization is sponsored by the Roman Catholic Bishop of Brooklyn and the president of the Sisters of Charity of New York. Saint Vincent Catholic Medical Centers of New York and six of its affiliates filed for Chapter 11 protection on July 5, 2005 (Bankr. S.D.N.Y. Case No. 05-14945 through 05-14951). Gary Ravert, Esq., and Stephen B. Selbst, Esq., at McDermott Will & Emery, LLP, filed the Debtors' Chapter 11 cases. On September 12, 2005, John J. Rapisardi, Esq., at Weil, Gotshal & Manges LLP took over representing the Debtors in their restructuring efforts. Martin G. Bunin, Esq., at Thelen Reid & Priest LLP, represented the Official Committee of Unsecured Creditors. As of April 30, 2005, the Debtors listed $972 million in total assets and $1 billion in total debts. The Court confirmed the Debtors' Chapter 11 plan on July 27, 2007. SIMMONS BEDDING: Raises $425 Million From Debt Offering ------------------------------------------------------- Simmons Bedding Co. said in a regulatory filing with the Securities and Exchange Commission that it raised $425 million through sale of debt. A total of 85 investors bought the debt offering. A full-text copy of the regulatory D filing is available for free at http://ResearchArchives.com/t/s?4df5 About Simmons Bedding 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. Del. 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. Weil, Gotshal & Manges LLP is acting as legal counsel and Miller Buckfire & Co., LLC is acting as financial advisor to Simmons. Sullivan & Cromwell LLP is acting as legal counsel and Goldman, Sachs & Co., is acting as financial advisor to Ares and Teachers'. SIMMONS BEDDING: Amended Bankruptcy-Exit Plan Declared Effective ---------------------------------------------------------------- Simmons Bedding Company said that its prepackaged reorganization plan, as twice amended, became effective January 20, 2010. As a result, the Company and its units have emerged from Chapter 11 protection. Simmons Bedding Company on Jan. 5 announced that the U.S. Bankruptcy Court for the District of Delaware has confirmed its pre-packaged restructuring plan. The court's ruling allows for the previously announced acquisition of Simmons Bedding and all of its domestic and international subsidiaries, as well as its parent Bedding Holdco Incorporated, by affiliates of Ares Management LLC and Teachers' Private Capital, the private investment department of the Ontario Teachers' Pension Plan. Simmons total debt obligations are now approximately $450 million, down from approximately $1 billion. The Plan was proposed pursuant to the September 2009 Plan Sponsor Agreement among the Debtors and AOT Bedding Super Holdings, LLC, and AOT Bedding Intermediate Holdings, LLC (the Purchasers). Under the Plan Sponsor Agreement, Bedding Holdco Incorporated, Simmons Bedding and its subsidiaries will be acquired by the Purchasers upon consummation of the Plan. The Debtors would be filing a motion seeking approval of the Plan Sponsor Agreement, which includes certain covenants relating to the conduct of the Debtors' business, including a general requirement that the Debtors continue operating in the ordinary course of business. Under the Plan, secured creditors, unsecured trade creditors, and administrative and priority creditors will be paid in full or reinstated. The Debtors will reinstate $12.5 million of claims arising in connection with certain industrial revenue bonds and assume obligations aggregating $10 million under certain letters of credit. Holders of the SBC Notes and Holdco Notes will get cash recoveries, which the Debtors will finance from an equity investment by the Purchasers of approximately $310 million and the proceeds issuance of $425 million senior secured term notes. Holders of the SBC Notes, Holdco Notes and SBC Credit Agreement Claims as well as an affiliate of one of the Purchasers have committed to purchase senior secured term notes. The Debtor held an October 13, 2009 solicitation of votes on the Plan via a disclosure statement. The Plan has been accepted in excess of the statutory thresholds specified in Section 1126(c) of the Bankruptcy Code by the classes entitled to vote. The restructuring contemplated by the Plan will cut the Debtors' outstanding indebtedness by $572 million. A copy of the Plan is available for free at: http://bankrupt.com/misc/SIMMONS_BEDDING_reorganizationplan.pdf http://bankrupt.com/misc/SIMMONS_BEDDING_reorganizationplan2.pdf A copy of the disclosure statement is available for free at: http://bankrupt.com/misc/SIMMONS_BEDDING_ds.pdf http://bankrupt.com/misc/SIMMONS_BEDDING_ds2.pdf About Simmons Bedding 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. Del. 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. Weil, Gotshal & Manges LLP is acting as legal counsel and Miller Buckfire & Co., LLC is acting as financial advisor to Simmons. Sullivan & Cromwell LLP is acting as legal counsel and Goldman, Sachs & Co., is acting as financial advisor to Ares and Teachers'. SPANSION INC: ChipMos Has Deal to Sell Claim to Citigroup --------------------------------------------------------- ChipMOS Technologies (Bermuda) Limited disclosed that ChipMOS TECHNOLOGIES, INC., a wholly owned subsidiary of ChipMOS, has entered into a definitive Transfer Of Claim Agreement to sell to Citigroup Financial Products Inc. the general unsecured claim reflected in the proof of claim against Spansion Inc., Spansion Technology LLC, Spansion LLC, Spansion International Inc. and Cerium Laboratories LLC filed by ChipMOS Taiwan in United States Bankruptcy Court. The claim that is the subject of the Agreement includes accounts receivable for testing and assembly services provided to Spansion in the amount of approximately US$66 million to US$70 million (the "Undisputed Claim"). The purchase price for the Undisputed Claim is approximately US$33 million. At closing, Citigroup will pay an initial purchase price for the Undisputed Claim to an escrow agent to be held in escrow. The escrow agent will release the initial purchase price to ChipMOS Taiwan 20 days after the closing date, so long as no objection to ChipMOS Taiwan's transfer of the claim to Citigroup is filed in the Spansion bankruptcy proceeding prior to the end of the escrow period. If an objection to the claim transfer is filed in the proceeding prior to the end of the escrow period, the Undisputed Claim will be repurchased by ChipMOS Taiwan, the escrow agent will pay the Undisputed Claim purchase price to Citigroup and the agreement to sell the Undisputed Claim to Citigroup will terminate. The Agreement also includes the sale of breach of contract and liquidated damages rights against Spansion in the amount of approximately US$234 million. The purchase price for the Damages Claim is expected to be an amount that would be determined based on a Purchase Rate of 50.2 percent multiplied by the portion of the Damages Claim that is allowed by a final adjudication of the United States Bankruptcy Court. The purchase price for the Damages Claim is payable to ChipMOS Taiwan to the extent that the Court allows this claim. If an objection to the claim transfer is filed in the Spansion bankruptcy proceeding prior to the end of the escrow period, the agreement to sell the Damages Claim to Citigroup will terminate and the Damages Claim will not be transferred to Citigroup. In furtherance of the Agreement, the Company also has entered into an agreement to subscribe for, purchase and transfer to Citigroup rights offering shares to be issued by Spansion according to the Second Amended Joint Plan of Reorganization filed in United States Bankruptcy Court. This agreement provides that Citigroup will pay to the Company the amount of the rights offering shares purchase price. The Company earlier disclosed information about this transaction in the Company's January 14, 2010 press release. About ChipMOS ChipMOS is a leading independent provider of semiconductor testing and assembly services to customers in Taiwan, Japan, and the U.S. With advanced facilities in Hsinchu and Southern Taiwan Science Parks in Taiwan and Shanghai, ChipMOS and its subsidiaries provide testing and assembly services to a broad range of customers, including leading fabless semiconductor companies, integrated device manufacturers and independent semiconductor foundries. About Spansion Inc. Spansion Inc. (Pink Sheets: SPSNQ) -- http://www.spansion.com/-- is a Flash memory solutions provider. Spansion is a former joint venture of AMD and Fujitsu. Spansion Inc., Spansion LLC, Spansion Technology LLC, Spansion International, Inc., and Cerium Laboratories LLC filed voluntary petitions for Chapter 11 on March 1, 2009 (Bankr. D. Del. Lead Case No. 09-10690). On February 9, 2009, Spansion's Japanese subsidiary, Spansion Japan Ltd., voluntarily entered into a proceeding under the Corporate Reorganization Law (Kaisha Kosei Ho) of Japan to obtain protection from its creditors as part of the company's restructuring efforts. None of Spansion's subsidiaries in countries other than the United States and Japan are included in the U.S. or Japan filings. Michael S. Lurey, Esq., Gregory O. Lunt, Esq., and Kimberly A. Posin, Esq., at Latham & Watkins LLP, have been tapped as bankruptcy counsel. Michael R. Lastowski, Esq., at Duane Morris LLP, is the Delaware counsel. Epiq Bankruptcy Solutions LLC, is the claims agent. The United States Trustee has appointed an official committee of unsecured creditors in the case. As of September 30, 2008, Spansion disclosed total assets of US$3,840,000,000, and total debts of US$2,398,000,000. Spansion Japan Ltd. filed a Chapter 15 petition on April 30, 2009 (Bankr. D. Del. Case No. 09-11480). The Chapter 15 Petitioner's counsel is Gregory Alan Taylor, Esq., at Ashby & Geddes. It said that Spansion Japan had US$10 million to US$50 million in assets and US$50 million to US$100 million in debts. Bankruptcy Creditors' Service, Inc., publishes Spansion Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Spansion Inc. and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000) SPANSION INC: Files Supplements to 2nd Amended Plan --------------------------------------------------- Spansion Inc. and its debtor affiliates delivered to the U.S. Bankruptcy Court for the District of Delaware, on January 19, 2010, a supplement to their Second Amended Joint Plan of Reorganization dated December 16, 2009. The Plan Supplement contains copies of: -- the Estimate of Administrative and Priority Claims; -- List of Causes of Action; -- Rights Offering Documents: * Identity of Backstop Party * Backstop Rights Purchase Agreement -- Documents Related To New Notes: * Adjusted Plan Equity Value for Conversion Price Calculation 5 * Indenture and Form of Note for New Convertible Notes 6 * Indenture and Form of Note for New Senior Notes 7 -- Financing Documents: * New Spansion Debt Documents 8 -- Governance Documents: * New Governing Documents 9 * Proposed Members of Initial Board 10 -- Bankruptcy Documents: * Proposed Confirmation Order The Debtors estimate that the potential priority claims and administrative claims as of January 18, 2010 total: Categories Low High ---------- ---------- ---------- Lease pymts for rejected leases $2,561,775 $2,561,775 Potential cure amounts 3,108,679 5,125,025 Professional fees 14,526,057 14,526,057 Professional success fee 13,155,604 13,155,604 Employee - John Kispert 1,750,000 1,750,000 Admin. tax claim - Santa Clara 1,330,420 1,330,420 Estimate for Warn Claims 7,102,000 7,102,000 Other Admin & Priority Claims 849,999 1,136,038 Interest on FRNs 4,930,085 4,930,085 ------------ ----------- 49,313,618 51,617,003 ------------ ----------- Contingency 5,500,000 8,000,000 ------------ ----------- 54,813,618 59,617,003 ------------ ----------- ------------ ----------- Range w/o Spansion Japan 55,000,000 60,000,000 ------------ ----------- Japan's Admin Claim Due 3/31/2010 10,000,000 10,000,000 Due 6/30/2010 12,500,000 12,500,000 Due 9/30/2010 12,500,000 12,500,000 Due 12/31/2010 10,000,000 10,000,000 ------------ ----------- Range w/ Spansion Japan's claim 100,000,000 105,000,000 ------------ ----------- The Debtors added these actions in the definition of the term "Causes of Action" in their Second Amended Joint Plan of Reorganization: 1. In the Matter of: Certain Flash Memory and Products Containing The Same; Spansion, Inc., Spansion LLC v. Samsung Electronics Co., Ltd., Samsung Electronics America, Inc., Samsung International, Inc., Samsung Semiconductor, Inc., Samsung Telecommunications America, LLC., Apple, Inc., Hon Hai Precision Industry Co., Ltd., AsusTek Computer Inc., Asus Computer International Inc., Kingston Technology Company, Inc., Kingston Technology (Shanghai) Co. Ltd., Kingston Technology Far East Co., Kingston Technology Far East (Malaysia), Lenovo Group Limited., Lenovo(United States) Inc., Lenovo (Beijing) Limited., International Information Products(Shenzhen) Co., Ltd., Lenovo Information Products (Shenzhen) Co. Ltd., Lenovo (Huiyang) Electronic Industrial Co. Ltd., Shanghai Lenovo Electronic Co., Ltd., PNY Technologies, Inc., Research In Motion Ltd., Research In Motion Corporation, Sony Corporation, Sony Corporation of America, Sony Ericsson Mobile Communications, AB., Sony Ericsson Mobile Communications (USA), Inc., Beijing SE Putian Mobile Communication Co., Ltd., Transcend Information Inc., Transcend Information, Inc. (US), Case No. 337-TA-664. 2. Spansion, LLC v. Samsung Electronics Co. LTD., Samsung Electronics America Inc., Samsung Semiconductor Inc., Samsung Telecommunications America LLC., Samsung Austin Semiconductor LLC, Case No. 08-855 (SLR). 3. Actions relating to strict enforcement of any of the Debtors' intellectual property rights, including patents, copyrights and trademarks, including claims against third parties for infringement of any intellectual property rights or other misuse of that intellectual property. 4. Avoidance Actions. 5. Actions to recover money or property from customers, vendors or employees whether based on contract or tort. 6. Actions brought against any Entities for failure to pay for products or services provided or rendered by any of the Debtors. 7. Actions to recover any of the Debtors' or the Reorganized Debtors' accounts receivable or other receivables or rights to payment created or arising in the ordinary course of any of the Debtors' or the Reorganized Debtors' businesses, including claim overpayments and tax refunds. 8. All other actions which were pending as of the Petition Date. 9. All other actions, whether in law or in equity, whether known or unknown, which any Debtor or any Debtors' Estate may bring against any Entity. A full-text copy of the Debtors' Plan Supplement is available for free at http://bankrupt.com/misc/Spansion_PlanSupplement.pdf Consequently, the Debtors filed with the Court, on January 22, 2010, an addendum to the Plan Supplement. The Addendum contains documents related to the new notes and governance documents, full-text copies of which are available for free at: http://bankrupt.com/misc/Spansion_PlanAddendum1.pdf Exhibit 10 to the Addendum discloses that pursuant to a further agreement by and among the Debtors, the Official Committee of Unsecured Creditors, the Senior Noteholders Informal Group, and the Ad Hoc Committee of Convertible Noteholders, the Debtors will file, on or before January 29, 2010, an exhibit disclosing the identity of the Persons proposed to serve on the initial board of directors of Reorganized Spansion Inc. The Spansion Plan Spansion's reorganization plan contemplates full payment to the holders of $625 million in floating rate notes by giving them $158 million cash, $238 million in new notes, and $238 million in new convertible notes. Unsecured creditors are to split up some 46.3 million shares of stock. The unsecured claim pool is made up of $251 million in senior notes, $208 million in exchangeable debentures, and claims of general unsecured creditors ranging between $440 million and $841 million. The Disclosure Statement anticipates that unsecured creditors will recover between 31% and 45% from the stock. The $7 million secured credit facility is to be paid in full. A hearing to consider confirmation of the Debtors' proposed plan of reorganization is set to commence before the Court on February 11, 2010. About Spansion Inc. Spansion Inc. (Pink Sheets: SPSNQ) -- http://www.spansion.com/-- is a Flash memory solutions provider. Spansion is a former joint venture of AMD and Fujitsu. Spansion Inc., Spansion LLC, Spansion Technology LLC, Spansion International, Inc., and Cerium Laboratories LLC filed voluntary petitions for Chapter 11 on March 1, 2009 (Bankr. D. Del. Lead Case No. 09-10690). On February 9, 2009, Spansion's Japanese subsidiary, Spansion Japan Ltd., voluntarily entered into a proceeding under the Corporate Reorganization Law (Kaisha Kosei Ho) of Japan to obtain protection from its creditors as part of the company's restructuring efforts. None of Spansion's subsidiaries in countries other than the United States and Japan are included in the U.S. or Japan filings. Michael S. Lurey, Esq., Gregory O. Lunt, Esq., and Kimberly A. Posin, Esq., at Latham & Watkins LLP, have been tapped as bankruptcy counsel. Michael R. Lastowski, Esq., at Duane Morris LLP, is the Delaware counsel. Epiq Bankruptcy Solutions LLC, is the claims agent. The United States Trustee has appointed an official committee of unsecured creditors in the case. As of September 30, 2008, Spansion disclosed total assets of US$3,840,000,000, and total debts of US$2,398,000,000. Spansion Japan Ltd. filed a Chapter 15 petition on April 30, 2009 (Bankr. D. Del. Case No. 09-11480). The Chapter 15 Petitioner's counsel is Gregory Alan Taylor, Esq., at Ashby & Geddes. It said that Spansion Japan had US$10 million to US$50 million in assets and US$50 million to US$100 million in debts. Bankruptcy Creditors' Service, Inc., publishes Spansion Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Spansion Inc. and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000) SPANSION INC: Has Interim Nod for $450 Mil. Exit Facility --------------------------------------------------------- Spansion Inc. and its debtor affiliates sought and obtained an interim order from the Court authorizing them to enter into a $450 million senior secured credit facility with Barclays Capital, the investment banking division of Barclays Bank PLC and Morgan Stanley Senior Funding, Inc., as joint lead arrangers, and Barclays Bank PLC as administrative agent and collateral agent. The Debtors' Plan of Reorganization provides the Debtors with the option to select between two alternatives in dealing with the claims of holders of prepetition floating rate notes. The Debtors can distribute cash, new senior notes in the aggregate principal amount of $237,500,000 and new convertible notes in the aggregate principal amount of $237,500,000 to holders of FRNs. Alternatively, upon the satisfaction of certain conditions, the Debtors can distribute additional cash to holders of the FRNs to reduce in part or in full the principal amount of the New Senior Notes and New Convertible Notes that would otherwise be distributed to them under the first alternative. The Debtors relate that their anticipated cash balances as of the effective date of the Plan will be hundreds of millions of dollars less than the amounts needed for them to exercise the Cash Out Option to repay the FRN claims in full. Thus, the Debtors aver they will be in a position to exercise the Cash Out Option only if they are able to raise a significant amount of additional cash. The Plan provides two mechanisms for the Debtors to raise cash: (i) The Plan provides for a rights offering pursuant to which the Debtors' unsecured creditors can acquire new common stock of Reorganized Spansion Inc. for an aggregate purchase price of approximately $109 million. (ii) The Plan permits the Debtors to incur additional debt in an amount of up to $500 million though either the issuance of new debt securities or through a new term loan facility. So long as they can consummate the Rights Offering and the New Spansion Debt and satisfy the applicable requirements of the Plan, the Debtors intend to exercise the Cash Out Option and payoff the FRN claims in full. The Debtors believe that they will have a more sound and flexible capital structure post- emergence from the Chapter 11 cases if they are able to exercise the Cash Out Option, paying the FRN holders cash instead of issuing the New Convertible Notes and the New Senior Notes to them. For a number of reasons, including the timeframe for securing the New Spansion Debt, the Debtors, in consultation with the Arrangers, concluded that the best option available to them to attempt to secure the necessary funds to consummate the Cash Out Option was to structure the New Spansion Debt as a secured, syndicated term loan credit facility. The salient terms of the Exit Financing Facility are: Borrower: Spansion LLC Joint Lead Arrangers/ Joint Bookrunners: Barclays Capital and Morgan Stanley Administrative Agent/ Collateral Agent: Barclays Bank PLC Syndication Agent: Morgan Stanley Documentation Agent: Barclays Bank Term Facility: A senior secured term loan facility in an aggregate principal amount of up to $450,000,000 Purpose: The proceeds of the Terms Facility will be used by the borrower as follows: (i) approximately $633,000,000 to fully discharge the claims of holders of the Senior Secured Floating Rate Notes due 2013, (ii) amounts necessary to pay Administrative Expense Claims and Priority Claims, and (iii) amounts necessary to pay fees and expenses related to the Term Facility. Termination: If (a) the Account Release Conditions are not met within 60 days of the Closing Date, (b) the Borrower, prior to that date, informs the Lenders in writing that the conditions will not be met, (c) the Term Loans are accelerated for any reason or (d) the Bankruptcy Court order approving fees and transactions contemplated is overturned, vacated or stayed, then a "termination date" will be deemed to have occurred and each Lender will be refunded directly from the Escrow Account its pro rata share of 100% of the aggregate principal amount of the Loans plus accrued interest thereon from the Closing Date through and including the Termination Date. The remaining balance in the Escrow Account will be distributed to the Borrower. Final Maturity and Amortization: The Term Facility will mature on the date that is five years after the Closing Date, and will be payable in equal quarterly amounts of 1% per annum with the balance payable on the maturity date of the Term Facility. Counsel to the Arrangers and Administrative Agent: Dewey & LeBoeuf LLP Redacted copies of the Term Sheet and Fee Letter with respect the Exit Facility are available for free at: http://bankrupt.com/misc/Spansion_BarclaysFeeLetter.pdf http://bankrupt.com/misc/Spansion_BarclaysTermSheet.pdf The Debtors have sought and obtained the Court's authority to lodge the Fee Letter and Term Sheet under seal. The Court issued an order closing to the public those portions of the hearing relating to the Confidential Exhibit, and directing the parties before the Court at the hearing to not disclose the terms of the Confidential Exhibits and to redact certain portions of the transcript related to the hearing for approval of the Term Sheet and Fee Letter. The Debtors assert that the information contained in the Confidential Exhibit is precisely the sort of non-public, confidential "commercial information" which merits protection under Section 107(b) of the Bankruptcy Code. The Confidential Exhibit includes summary of the fees associated with the services to be provided by Barclays and Morgan Stanley under the terms of the Fee Letter. The Debtors relate that the Confidential Exhibit relates to the allocation of credit risk and collateral, and is necessary to properly incentivize Underwriters or Arrangers to provide services in the still-recovering credit market. The Debtors aver that revealing the Confidential Exhibit would put Barclays and Morgan Stanley at a competitive disadvantage and impair their ability to effectively syndicate the New Spansion Debt. IBM Responds Prior to the Court's entry of its interim order, the International Business Machines Corporation filed an objection to the proposed Exit Facility. IBM and Spansion LLC are parties to a Patent Cross License Agreement dated April 8, 2008. Pursuant to the Agreement, IBM and Spansion have granted one another a cross license in certain of the patents which patents are defined as "Licensed Patents" under the License Agreement. The License Agreement provides that neither party may assign the License Agreement except under limited circumstances. IBM asserted that any security interest that purports to grant a lien encumbering Spansion LLC's license to IBM's License Patents would constitute an assignment in violation of Section 8.2 of the License Agreement. IBM's second concern is that the security interest granted in the Debtors' patents are not subject to IBM's rights in those patents. Therefore, any security interest, lien or other right granted to the Lender in the Debtors' patents must be subject to IBM's rights under the License Agreement. IBM asserted that the Order approving the Motion must exclude the License Agreement from the Collateral pledged to the Lender and make all liens and security interests granted to the Lender subject to the rights of IBM under the License Agreement. To address IBM's objection, Judge Carey held that no security interest will be granted in the Patent Cross License Agreement by and between IBM and Spansion LLC or in the Debtors' other intellectual property subject to the IBM Agreement in contravention of the terms of the IBM Agreement. A final hearing to consider the Motion will be held on Feb. 11, 2010. A full-text copy of the Interim Order is available for free at: http://bankrupt.com/misc/Spansion_OrdBarclaysFinancing.pdf About Spansion Inc. Spansion Inc. (Pink Sheets: SPSNQ) -- http://www.spansion.com/-- is a Flash memory solutions provider. Spansion is a former joint venture of AMD and Fujitsu. Spansion Inc., Spansion LLC, Spansion Technology LLC, Spansion International, Inc., and Cerium Laboratories LLC filed voluntary petitions for Chapter 11 on March 1, 2009 (Bankr. D. Del. Lead Case No. 09-10690). On February 9, 2009, Spansion's Japanese subsidiary, Spansion Japan Ltd., voluntarily entered into a proceeding under the Corporate Reorganization Law (Kaisha Kosei Ho) of Japan to obtain protection from its creditors as part of the company's restructuring efforts. None of Spansion's subsidiaries in countries other than the United States and Japan are included in the U.S. or Japan filings. Michael S. Lurey, Esq., Gregory O. Lunt, Esq., and Kimberly A. Posin, Esq., at Latham & Watkins LLP, have been tapped as bankruptcy counsel. Michael R. Lastowski, Esq., at Duane Morris LLP, is the Delaware counsel. Epiq Bankruptcy Solutions LLC, is the claims agent. The United States Trustee has appointed an official committee of unsecured creditors in the case. As of September 30, 2008, Spansion disclosed total assets of US$3,840,000,000, and total debts of US$2,398,000,000. Spansion Japan Ltd. filed a Chapter 15 petition on April 30, 2009 (Bankr. D. Del. Case No. 09-11480). The Chapter 15 Petitioner's counsel is Gregory Alan Taylor, Esq., at Ashby & Geddes. It said that Spansion Japan had US$10 million to US$50 million in assets and US$50 million to US$100 million in debts. Bankruptcy Creditors' Service, Inc., publishes Spansion Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Spansion Inc. and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000) SPANSION INC: Noteholders Say Plan Outline Has Misrepresentations ----------------------------------------------------------------- The Ad Hoc Committee of Convertible Noteholders consisting of certain holders of the 2.25% Exchangeable Senior Subordinated Debentures Due 2016 issued by Spansion LLC asks the U.S. Bankruptcy Court for the District of Delaware Court to: (a) vacate its order approving the Debtors' Disclosure Statement; (b) adjourn the confirmation hearing; and (c) direct appointment of trustee or examiner. By the order of the Court dated December 18, 2009, the Debtors' proposed Disclosure Statement was approved pursuant to Section 1125 of the Bankruptcy Code as containing "adequate information." A hearing to consider confirmation of the Debtors' proposed plan of reorganization is set to commence before the Court on February 11, 2010. A hearing to consider whether to adjourn or continue the confirmation hearing to a later date is set to be heard by the Court on January 29, 2010. Mark E. Felger, Esq., at Cozen O'Connor, in Wilmington, Delaware, counsel to the Ad Hoc Committee of Convertible Noteholders, asserts that the Disclosure Statement is replete with fundamental misrepresentations. Mr. Felger avers that the valuation contained in the Disclosure Statement is not the Debtors' valuation and, therefore, cannot be the starting point, or initial benchmark, for a confirmation valuation trial. "In the context of a confirmation valuation trial, it is fundamentally unfair and improper for the Debtors to use a valuation in a Disclosure Statement that is inconsistent with the Debtors' managements' own valuation and underlying assumptions," Mr. Felger avers. "Fundamentally, in the context of a Chapter 11, it is outrageous for a purported fiduciary not to provide a complete and accurate picture of its financial condition and prospects," he adds. In addition to vacating the Disclosure Order and adjourning the Confirmation Hearing, the Convertible Committee seeks the appointment of an examiner pursuant to the mandatory provisions of Section 1104(c)(2) of the Bankruptcy Code, which provides that the Court will appoint an examiner where the Debtors' fixed, liquidated unsecured debt exceeds $5 million. Alternatively, the Convertible Committee seeks an order directing the appointment of a disinterested independent trustee. According to the Convertible Committee, that examiner should be charged with investigating, among other things, the intentional misrepresentations. In a separate filing, the Convertible Committee seeks a Court order authorizing them to file non-redacted version of confidential documents under seal and directing that the non- redacted Confidential Documents remain under seal and not made available to anyone but the Court and the parties to the Nondisclosure Agreement. The Convertible Committee tells the Court that the Confidential Documents contain information that the Debtors provided to its advisors pursuant to a Nondisclosure Agreement dated October 28, 2009. The Spansion Plan Spansion's reorganization plan contemplates full payment to the holders of $625 million in floating rate notes by giving them $158 million cash, $238 million in new notes, and $238 million in new convertible notes. Unsecured creditors are to split up some 46.3 million shares of stock. The unsecured claim pool is made up of $251 million in senior notes, $208 million in exchangeable debentures, and claims of general unsecured creditors ranging between $440 million and $841 million. The Disclosure Statement anticipates that unsecured creditors will recover between 31% and 45% from the stock. The $7 million secured credit facility is to be paid in full. A hearing to consider confirmation of the Debtors' proposed plan of reorganization is set to commence before the Court on February 11, 2010. About Spansion Inc. Spansion Inc. (Pink Sheets: SPSNQ) -- http://www.spansion.com/-- is a Flash memory solutions provider. Spansion is a former joint venture of AMD and Fujitsu. Spansion Inc., Spansion LLC, Spansion Technology LLC, Spansion International, Inc., and Cerium Laboratories LLC filed voluntary petitions for Chapter 11 on March 1, 2009 (Bankr. D. Del. Lead Case No. 09-10690). On February 9, 2009, Spansion's Japanese subsidiary, Spansion Japan Ltd., voluntarily entered into a proceeding under the Corporate Reorganization Law (Kaisha Kosei Ho) of Japan to obtain protection from its creditors as part of the company's restructuring efforts. None of Spansion's subsidiaries in countries other than the United States and Japan are included in the U.S. or Japan filings. Michael S. Lurey, Esq., Gregory O. Lunt, Esq., and Kimberly A. Posin, Esq., at Latham & Watkins LLP, have been tapped as bankruptcy counsel. Michael R. Lastowski, Esq., at Duane Morris LLP, is the Delaware counsel. Epiq Bankruptcy Solutions LLC, is the claims agent. The United States Trustee has appointed an official committee of unsecured creditors in the case. As of September 30, 2008, Spansion disclosed total assets of US$3,840,000,000, and total debts of US$2,398,000,000. Spansion Japan Ltd. filed a Chapter 15 petition on April 30, 2009 (Bankr. D. Del. Case No. 09-11480). The Chapter 15 Petitioner's counsel is Gregory Alan Taylor, Esq., at Ashby & Geddes. It said that Spansion Japan had US$10 million to US$50 million in assets and US$50 million to US$100 million in debts. Bankruptcy Creditors' Service, Inc., publishes Spansion Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Spansion Inc. and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000) SPANSION INC: Proposes to Settle Japan Dispute for $45 Mil. ----------------------------------------------------------- Historically, Spansion LLC relied upon Spansion Japan Limited for, among other things, (i) sales and applications support, as Spansion Japan accounts for approximately 25% of Spansion LLC's total global sales; (ii) wafer fabrication, as Spansion Japan's JV3 production facility is projected to supply approximately 25% of Spansion LLC's total wafers in the first quarter of 2010; and (iii) research and development. In turn, Spansion Japan relied on Spansion LLC for 100% of its revenue and cost reimbursement, as Spansion LLC is both the sole customer of Spansion Japan's wafers and sort services, and the sole supplier for Spansion Japan's distribution business. Davis Lee Wright, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in Wilmington, Delaware, counsel for the Debtors, says the relationship between the parties has deteriorated dramatically since the filing of the Debtors' Chapter 11 cases, due in part to the competing fiduciary responsibilities confronted by the Debtors and Spansion Japan, culminating in the rejection of the Foundry Agreement and extensive litigation over the GE Financial Services Corporation Administrative Expense Motion, the Spansion Japan Administrative Expense Motion, and the Debtors' Motion to Estimate Claims of Spansion Japan. "Given the uncertainty surrounding the resolution of the motions and the Spansion Japan Administrative Expense and the impact that resolution could have on the reorganizations of the Debtors and Spansion Japan, the parties have agreed to resolve the GE Administrative Expense Motion, the Spansion Japan Administrative Expense Motion and the Estimation Motion and the claims of the parties, pursuant to a set of consensual, cooperative procedures which provide value and promise for both of their estates," Mr. Wright tells the Court. The Settlement covers all aspects of the relationship between Spansion LLC and Spansion Japan, including, entry into the new Foundry Agreement providing for continued wafer and sort services from Spansion Japan. Thus, the Debtors maintain, the Settlement provides Spansion LLC with manufacturing services and ongoing support for its Japanese customers during this time of transition, while simultaneously giving Spansion Japan the basis upon which to reorganize as a standalone entity. "Those arrangements not only are consistent with, but will also facilitate the success of, the formation of Spansion LLC's new subsidiary, Spansion Nihon, which will ultimately provide to Spansion LLC critical services to ensure the Debtors' success post-bankruptcy, the Debtors assert," Mr. Davis asserts. Spansion LLC and Spansion Japan acknowledge that there remain issues respecting rejection damages and Spansion LLC's plan of reorganization. Primarily because the parties simply have divergent views on the potential value of Spansion Japan's potential claims arising from the rejection of the Foundry Agreement or the Debtors' potential rejection of the other agreements to which the Debtors and Spansion Japan are parties, however, the parties determined to consummate this Settlement to preserve value through fostering customer relationships and reserve the rejection claim issues for another day. "For now, the Settlement allows the parties to continue to do business in a constructive manner as well as provide a framework for the future determination of their entire relationship," Mr. Wright maintains. Accordingly, the Debtors and Spansion Japan ask Court enter an order authorizing them to enter into the Settlement reflected in a Term Sheet, including (i) the execution of the Definitive Agreements and (ii) the taking of all actions necessary to fund and cause Spansion Nihon to acquire certain assets of Spansion Japan. The Settlement contemplates: (i) the continued purchase of wafers from Spansion Japan by Spansion LLC at a defined price, quantity and duration via the Foundry Agreement; (ii) other definitive agreements to assist the parties to define their relationship as they both pursue a successful emergence from bankruptcy; (iii) a settlement payment in lieu of the Spansion Japan Administrative Expense and in consideration of the various other benefits of the Settlement including in particular the License Agreement; and (iv) the reservation of Spansion Japan's Rejection Damages Claim and plan confirmation challenges for the upcoming confirmation trial in the Debtors' chapter 11 cases. Foundry Agreement Under the Foundry Agreement, Spansion LLC will purchase from Spansion Japan's JV3 fabrication facility at least 200,000 wafers over the next six quarters. Spansion Japan will continue to provide sort services to Spansion LLC during the same period, with a minimum floor sort revenue of $8.9 million per quarter to Spansion Japan. Although most of the wafers produced by Spansion Japan can also be produced at the Debtors' Austin fabrication facility, not all of those wafers can be produced in Austin at this time. This arrangement continues the relationship between Spansion LLC and Spansion Japan. In particular, the Foundry Agreement permits Spansion LLC to continue its operations without disruption to its customers while transitioning production of wafers from Spansion Japan's JV3 Fab to Spansion LLC's Fab 25 in an orderly fashion. Simultaneously, the Foundry Agreement provides Spansion Japan with time and revenue to implement alternatives to establish its independent viability post- bankruptcy. This aspect of the Settlement will cost the Debtors approximately $11 million in EBITDA during the six quarter period -- in other words, if the Debtors instead produced these wafers in Austin, they would achieve EBITDA savings of $11 million. When compared against the various benefits available under the Settlement, the Debtors view this cost as modest. In addition, Spansion Japan has also agreed to provide certain technical information to the Debtors, and the Debtors have agreed to pay Spansion Japan $5 million for those technical information. The parties had disagreements over the manner, timing and extent to which Spansion Japan was obligated to provide technical information to Spansion LLC. This aspect of the Settlement confirms that Spansion Japan will provide information reasonably necessary to the Debtors in their ongoing business, as well as provides needed capital for operations to enable Spansion Japan in fact to be in a position to provide the information. License Agreement Although during the course of the litigation, the parties have contested their rights in certain technology and intellectual property, the License Agreement provides clarity and compromise with respect to these issues in a way that is acceptable to both parties for their continued business dealings. Under the License Agreement, Spansion Japan will continue to license from Spansion LLC those intellectual property rights that it needs to continue providing services to Spansion LLC. In addition, the License Agreement grants a license to Spansion Japan of certain other intellectual property rights for Spansion Japan to make certain licensed products. The term of the License Agreement extends for up to five years. In addition, the parties will consider, discuss in good faith and potentially negotiate a further extension of that term, depending on market conditions at the time of those discussions. By entering into the License Agreement, Spansion LLC and Spansion Japan establish an arm's- length arrangement whereby Spansion Japan is able to generate revenue from providing services to Spansion LLC, and, in turn, Spansion LLC receives the benefit of those services, thereby allowing the entities to establish successful independent operations. In addition, the License Agreement provides an important building block to Spansion Japan in connection with its own reorganization in the Japanese Proceeding. Spansion Japan would not have agreed to the Settlement but for this important feature. Transition Services Agreement Under the TSA, Spansion LLC and Spansion Japan will continue to provide certain crucial technology and other support to each other during this time of transition. Spansion Japan, for instance, will continue to provide certain foundry-related technical support and data to Spansion LLC that Spansion LLC would not be able to procure easily or timely without the assistance of Spansion Japan. Spansion LLC, in turn, will continue to provide basic office support to Spansion Japan that as administrative and similar services and other services as may be agreed to by the parties. By way of the TSA, Spansion LLC and Spansion Japan will provide one another with those services for a period of time to allow both to independently establish their alternatives for the future. The failure to achieve this term of the Settlement would have resulted in material disruption and hardship to both companies. Bailment Agreement The Bailment Agreement governs the lending of probe cards needed for testing purposes. Certain probe cards belong to Spansion LLC while others belong to Spansion Japan. Each party lends probe cards to the other, and they are thus moved frequently between the two companies to maximize the efficiency of testing wafers. Under the Bailment Agreement, the parties regulate these arrangements, including the lending of additional probe cards needed by Spansion Japan to continue providing sorting services to Spansion LLC during the transition period. Term Sheet Under the Term Sheet, Spansion LLC will pay to Spansion Japan $45,000,000 in consideration of the Spansion Japan Administrative Expense and the various other benefits of the Settlement. The Settlement Payment will be payable over the course of 2010 in this manner: * $10,000,000 on March 31, 2010; * $12,500,000 on June 30, 2010; * $12,500,000 on September 30, 2010; and * $10,000,000 on December 31, 2010. Although $45,000,000 is greater than what Spansion LLC believes would have been the allowed amount of the Spansion Japan Administrative Expense, $45,000,000 is slightly more than 10% of the amount sought in connection with the Spansion Japan Administrative Expense. Furthermore, the parties anticipated that they would require multiple trial dates to conclude the litigation of the disputes between them. The Court would also take additional time to make a decision and render an opinion. It is unclear what impact that delay would have on the resolution of the disputes and, ultimately, confirmation of the Debtors' plan of reorganization. Accordingly, Spansion LLC and Spansion Japan believe that $45,000,000 is a fair and reasonable amount to achieve resolution of the issues at this time with complete certainty, particularly when the payment timing is considered. In addition, the Term Sheet provides for the resolution of the substantial claims of Spansion LLC and Spansion Japan against one another and requires that GE Financial Services Corporation withdraw all of its claims against the Debtors. Spansion LLC, however, will not be entitled to any distribution on account of the Spansion LLC Prepetition Claims. All claims of Spansion Japan and Spansion LLC against each other will be expunged, released and satisfied, including, but not limited to Spansion Japan's claims under Section 503(b)(9) of the Bankruptcy Code. Spansion Japan will retain its Rejection Damages Claim against Spansion LLC, and Spansion LLC will retain all rights and defenses against those Rejection Damage Claims, including, but not limited to, any liability that Spansion Japan may have under Chapter 5 of the Bankruptcy Code. Spansion Japan will retain its rights and defenses to oppose any claim or defense to its Rejection Damage Claims, including, but not limited to, under Chapter 5 of the Bankruptcy Code. Full-text copies of the Term Sheet, Foundry Agreement, Transition Services Agreement, and Bailment Agreement are available for free at http://bankrupt.com/misc/Spansion_TermsheetSJPsettlement.pdf Kawasaki Business Consistent with the order authorizing the formation and funding of Spansion Nihon, Spansion LLC will fund Spansion Nihon and will cause Spansion Nihon to purchase the Kawasaki Business. The purchase transitions key services from Spansion Japan to Spansion LLC through Spansion Nihon. Consistent with the Term Sheet, Spansion Nihon will purchase Spansion Japan's Kawasaki business, which consists of distribution and research and development, for $12,500,000, payable at closing. Certain of Spansion Japan's Kawasaki personnel will transfer and become employees of Spansion Nihon. By consummating this aspect of the Term Sheet, Spansion LLC, through Spansion Nihon, retains control over those aspects of Spansion Japan's business that are specific to Spansion LLC and its future success, but which are not the foundation of any future business of Spansion Japan's. This aspect of the settlement will also allow the Debtors to transition an ongoing distribution business into Spansion Nihon, where, absent the settlement, the Debtors would be required to start their distribution business out of whole cloth. This provides substantial value to the Debtors in terms of their customer relationships. For Spansion Japan, it provides for the placement of personnel and assets that would otherwise be superfluous to its operations in the absence of a relationship with the Debtors. Prior to the Debtors' filing of their request to approve the settlement with Spansion Japan Limited, they sought and obtained the Court's approval to extend their time to file their request, through January 18, 2010. About Spansion Inc. Spansion Inc. (Pink Sheets: SPSNQ) -- http://www.spansion.com/-- is a Flash memory solutions provider. Spansion is a former joint venture of AMD and Fujitsu. Spansion Inc., Spansion LLC, Spansion Technology LLC, Spansion International, Inc., and Cerium Laboratories LLC filed voluntary petitions for Chapter 11 on March 1, 2009 (Bankr. D. Del. Lead Case No. 09-10690). On February 9, 2009, Spansion's Japanese subsidiary, Spansion Japan Ltd., voluntarily entered into a proceeding under the Corporate Reorganization Law (Kaisha Kosei Ho) of Japan to obtain protection from its creditors as part of the company's restructuring efforts. None of Spansion's subsidiaries in countries other than the United States and Japan are included in the U.S. or Japan filings. Michael S. Lurey, Esq., Gregory O. Lunt, Esq., and Kimberly A. Posin, Esq., at Latham & Watkins LLP, have been tapped as bankruptcy counsel. Michael R. Lastowski, Esq., at Duane Morris LLP, is the Delaware counsel. Epiq Bankruptcy Solutions LLC, is the claims agent. The United States Trustee has appointed an official committee of unsecured creditors in the case. As of September 30, 2008, Spansion disclosed total assets of US$3,840,000,000, and total debts of US$2,398,000,000. Spansion Japan Ltd. filed a Chapter 15 petition on April 30, 2009 (Bankr. D. Del. Case No. 09-11480). The Chapter 15 Petitioner's counsel is Gregory Alan Taylor, Esq., at Ashby & Geddes. It said that Spansion Japan had US$10 million to US$50 million in assets and US$50 million to US$100 million in debts. Bankruptcy Creditors' Service, Inc., publishes Spansion Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Spansion Inc. and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000) SPANSION INC: Reports $4,329,000 Net Income for 4th Quarter ----------------------------------------------------------- Spansion Inc. announced on January 15, 2010, operating results for its fourth quarter and fiscal year ended December 27, 2009. Spansion reported fourth quarter of 2009 net sales of $307.1 million and its second consecutive profitable quarter with net income on a U.S. GAAP basis of $4.3 million, or diluted net income per share of $0.02. Operating income for the quarter was $20.7 million and U.S. GAAP gross and operating margins were 33.1% and 6.7%. U.S. GAAP Comparison Q4 2009 Q3 2009 Q4 2008 ------- ------- ------- Net sales $307.1 million $327.6 million $468.0 million Net income(loss) $4.3 million $1.5 million ($2,076.9 million) Diluted net income (loss) per share $0.02 $0.01 ($12.90) Operating income (loss) $20.7 million $20.0 million($2,007.3 million) Gross margin 33.1% 28.3% (43.1%) Operating margin 6.7% 6.1% (429.0%) "Spansion's core markets showed strength this quarter and helped the company easily surpass our expectations for revenue in 2009," said John Kispert, Spansion president and CEO. "With our restructuring and reorganization activities largely behind us, we look forward to continued strong results in 2010." Non-GAAP net income for the fourth quarter of 2009, excluding restructuring, reorganization, and other special charges and credits, was $29.8 million, or net income per share of $0.17. Reconciliation between U.S. GAAP operating results and non-GAAP operating results is provided following the financial statements in this release. Non-GAAP Comparison Q4 2009 Q3 2009 Q4 2008 ------- ------- ------- Net income(loss) $29.8 million $17.6 million ($433.0 million) ---------------- ------------- ------------- -------------- Diluted net income (loss) per share $0.17 $0.10 ($2.69) ----------------- ----- ----- ------ The company increased its cash position by over $61 million and ended the fourth quarter of 2009 with $324.9 million in cash, compared to $263.6 million at the end of the third quarter of fiscal 2009 and $116.4 million at the end of the fourth quarter of 2008. "The continued margin improvement on lower net sales is a result of Spansion's strategy to focus on embedded and targeted wireless applications," said Randy Furr, Spansion CFO. "The company's sound financial management, including operational expense control and working capital management, helped increase the cash position over $225 million since first quarter 2009, resulting in approximately $325 million of cash and equivalents at year-end." Restructuring Spansion's second amended disclosure statement and its plan of reorganization were approved by the U.S. Bankruptcy Court on December 22, 2009. A confirmation hearing for the plan of reorganization is scheduled for February 11, 2010. Prior to the filing of Spansion's Annual Report on Form 10-K for the fiscal year ended December 27, 2009, the company may settle, in connection with the company's Chapter 11 bankruptcy proceedings, pre-petition claims of creditors. Consequently, the company may be required, in accordance with U.S. GAAP, to record adjustments related to any such settlement of pre-petition claims. These adjustments may change reorganization items and net income presented in the statement of operations, and liabilities subject to compromise presented in the balance sheet. As a result, there could be a material change to the statement of operations and balance sheet reported in this release. Spansion Japan On March 3, 2009, Spansion Japan Limited commenced corporate reorganization proceedings under the Japanese Corporate Reorganization Law (Kaisha Kosei Ho) in the Tokyo District Court. As a result, and in accordance with U.S. GAAP, the financial results of Spansion Japan Limited are not included in the consolidated financial results of Spansion Inc. after March 3, 2009. On January 8, 2010, the company announced that it reached verbal agreements in principle with its former subsidiary, Spansion Japan, to acquire Spansion Japan's distribution business and to obtain foundry services, including wafer and sort services, from Spansion Japan. Additional details can be read in Spansion's 8-K filing on January 11, 2010, which can be accessed at http://investor.spansion.com. Use of Non-GAAP Financial Information The non-GAAP and supplemental information provided in this press release is a supplement to, and not a substitute for or superior to, the company's financial results presented in accordance with U.S. GAAP. The non-GAAP financial measures presented by the company may be different than the non-GAAP financial measures presented by other companies. The non-GAAP and supplemental information is provided to enhance the user's overall understanding of the company's operating performance. Specifically, the company believes the non-GAAP information provides useful measures to investors regarding the company's financial performance by excluding certain costs and expenses that the company believes are not indicative of its core operating results. The presentation of non-GAAP and supplemental information is not meant to be considered in isolation or as a substitute for results prepared and presented in accordance with U.S. GAAP. Spansion Inc. Condensed Consolidated Balance Sheet As of December 27, 2009 ASSETS Cash & Cash Equivalents $324,903,000 Auction rate securities 100,335,000 Accounts Receivable 129,174,000 Accounts receivable, related party 366,602,000 Allowance for doubtful accounts (56,408,000) Inventories 141,723,000 Deferred income taxes 13,332,000 Prepaid expenses and current assets 49,533,000 -------------- Total current assets 1,069,194,000 Property and Equipment 322,710,000 Auction rate securities 0 Other assets 46,073,000 -------------- Total Assets $1,437,977,000 ============== Liabilities and Stockholders' Deficit Current Liabilities Notes payable $0 Short term note 64,149,000 Accounts Payable & Accrued Liabilities 146,140,000 Accounts Payable related party 221,211,000 Accrued compensation and benefits 21,630,000 Income taxes payable 83,000 Deferred income 62,958,000 -------------- Total current liabilities 516,171,000 Deferred income taxes 13,405,000 Other long-term liabilities 9,825,000 Liabilities subject to compromise 1,756,269,000 -------------- Total liabilities 2,295,670,000 Stockholders' deficit (857,693,000) -------------- Total liabilities and stockholders' deficit $1,437,977,000 ============== Spansion Inc. Consolidated Statement of Operations For Quarter Ended December 27, 2009 Net Sales $307,146,000 Cost of Sales 205,504,000 -------------- Gross Margin 101,642,000 Research and Development 25,533,000 Sales, general and administrative 41,661,000 Restructuring charges 1,206,000 Asset impairment charges 12,538,000 -------------- Operating income(loss) 20,704,000 Other than temporary impairment 0 Gain on deconsolidation 0 Interest and other income 1,110,000 Interest expense (8,099,000) -------------- Income(loss) before reorganization items 13,715,000 Reorganization Items (9,736,000) -------------- Income(loss) before income taxes 3,979,000 Benefit(provision) for income taxes 350,000 -------------- Net income(loss) $4,329,000 ============== Spansion Inc. Consolidated Statement of Cash Flows For Quarter Ended December 27, 2009 Cash Flows from Operating Activities: Net income(loss) $4,329,000 Adjustment to reconcile net loss to net cash provided by operating activities: Depreciation, amortization 29,620,000 Asset impairment charges 14,045,000 Provision for deferred income taxes 6,000 Provision for doubtful accounts 578,000 Net loss on sale of property 1,448,000 Compensation under employee stock plans 1,976,000 Gain on deconsolidation of subsidiary 0 Gain on sale of Suzhou entity (3,885,000) Loss from write-off rejected capital 0 Changes in operating assets and liabilities: Increase in accounts receivable (66,724,000) (Increase) decrease in inventories (4,527,000) (Increase)decrease in prepaid expenses 660,000 (Increase)decrease in other assets 2,833,000 Increase(decrease) in accounts payable 72,069,000 Decrease in income taxes payable (381,000) Increase in deferred income 6,663,000 -------------- Net cash provided by operating activities 58,710,000 Cash Flows from Investing Activities: Proceeds from sale property, plant, equip. 3,507,000 Purchases of property, plant, equipment (14,066,000) Cash proceeds from PTI 15,539,000 Proceeds from redemption of ARS 4,150,000 -------------- Net cash provided by investing activities 9,130,000 Cash Flows From Financing Activities: Proceeds from borrowings 0 Payments on debt and capital lease (6,491,000) -------------- Net cash used in financing activities (6,491,000) Effect of exchange rate changes on cash 0 -------------- Net increase in cash and equivalents 61,349,000 Cash and cash equiv. beginning period 263,554,000 -------------- Cash and cash equiv. at end of period $324,903,000 ============== About Spansion Inc. Spansion Inc. (Pink Sheets: SPSNQ) -- http://www.spansion.com/-- is a Flash memory solutions provider. Spansion is a former joint venture of AMD and Fujitsu. Spansion Inc., Spansion LLC, Spansion Technology LLC, Spansion International, Inc., and Cerium Laboratories LLC filed voluntary petitions for Chapter 11 on March 1, 2009 (Bankr. D. Del. Lead Case No. 09-10690). On February 9, 2009, Spansion's Japanese subsidiary, Spansion Japan Ltd., voluntarily entered into a proceeding under the Corporate Reorganization Law (Kaisha Kosei Ho) of Japan to obtain protection from its creditors as part of the company's restructuring efforts. None of Spansion's subsidiaries in countries other than the United States and Japan are included in the U.S. or Japan filings. Michael S. Lurey, Esq., Gregory O. Lunt, Esq., and Kimberly A. Posin, Esq., at Latham & Watkins LLP, have been tapped as bankruptcy counsel. Michael R. Lastowski, Esq., at Duane Morris LLP, is the Delaware counsel. Epiq Bankruptcy Solutions LLC, is the claims agent. The United States Trustee has appointed an official committee of unsecured creditors in the case. As of September 30, 2008, Spansion disclosed total assets of US$3,840,000,000, and total debts of US$2,398,000,000. Spansion Japan Ltd. filed a Chapter 15 petition on April 30, 2009 (Bankr. D. Del. Case No. 09-11480). The Chapter 15 Petitioner's counsel is Gregory Alan Taylor, Esq., at Ashby & Geddes. It said that Spansion Japan had US$10 million to US$50 million in assets and US$50 million to US$100 million in debts. Bankruptcy Creditors' Service, Inc., publishes Spansion Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Spansion Inc. and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000) STATION CASINOS: Committee Creditors Can't Sue for Fraud Yet ------------------------------------------------------------ The Official Committee of Unsecured Creditors of Station Casinos, Inc. and its affiliated debtors-in-possession asks the Court, pursuant to Sections 105(a), 503(b), 1103(c), and 1109(b), to authorize it to pursue certain claims and causes of action relating to the Debtors' leveraged buyout transaction that closed on November 7, 2007. Bill Rochelle at Bloomberg News reports that following a hearing, the Committee failed in their effort at persuading the bankruptcy judge to give them authority to file two lawsuits, one contending the leveraged buyout in November 2007 resulted in fraudulent transfers and the second seeking to recharacterize leases as disguised financings. According to the report, ruling at the end of the hearing, U.S. Bankruptcy Judge Gregg Zive in Reno, Nevada, said he would reconsider giving creditors authority to file suit after the Company files a reorganization plan. He also said that "extraordinary circumstances" would be required before he extends the company's exclusive right to propose a Chapter 11 plan that expires March 25. The judge said he saw no evidence of an intent by management to defraud creditors. Committee Plea to Sue The Committee has investigated the LBO Transaction, including the Master Lease Transaction, over the last three months. Station Casinos Bankruptcy News reports that a draft LBO Complaint prepared by the Creditors' Committee demonstrates that the LBO Transaction saddled SCI with an additional $1.7 billion in interest-bearing debt, a crushing burden that offered virtually no value in return. As a result of the LBO Transaction, the Debtors were rendered insolvent and were left with unreasonably small capital, Susheel Kirpalani, Esq., at Quinn Emanuel Urqhuart Oliver & Hedges LLP, in Los Angeles, California, relates. Meanwhile, the draft LBO Complaint alleges that Individual Defendants received hundreds of millions of dollars, by virtue of the cancelation of their owned shares of SCI common stock and the award of the Accelerated Stock Benefits, which the LBO Complaint refers to as the immediate vesting of Restricted Stock and the acceleration of Stock Options. A draft Lease Complaint prepared by the Creditors' Committee, according to Mr. Kirpalani, demonstrates that the so-called Master Lease Transaction is really a disguised debt financing between SCI and FCP PropCo, LLC. Notwithstanding the obvious efforts to obfuscate the economic substance of the Master Lease Transaction by creating various corporate entities and executing numerous documents that purported to transfer assets, the economic substance cannot be ignored -- SCI borrowed approximately $2.475 billion, funneled through PropCo, to help fund the LBO Transaction. The security for that borrowing was the Four Casinos. Slapping a "lease" label on a loan does not make it a lease, Mr. Kirpalani asserts. The draft Lease Complaint further claims to have the Master Lease Transaction recharacterized as a disguised debt financing between SCI, as borrower, and PropCo, as lender or as a lending vehicle for the PropCo Lenders. The Lease Complaint further alleges that the obligations that SCI incurred under the Master Lease Transaction are avoidable fraudulent transfers. Full-text copies of the proposed Complaints are available for free at: http://bankrupt.com/misc/SC_PropLBOComplaint.pdf http://bankrupt.com/misc/SC_PropLeaseComplaint.pdf Objections to Standing Motion Various parties, including Frank J. Fertitta III and Lorenzo J. Fertitta, owners of Station Casinos, Inc., the Debtors, and the Special Litigation Committee of the Board of Directors of Station Casinos, Inc., filed objections to the Standing Motion. The Debtors argue that the derivative standing is granted to a committee when the committee's interests are aligned with the best interests of the estate. When the committee represents an out-of- money constituent whose sole hope for recovery is through aggressive and "swing for the fences" litigation, that alignment of interests does not exist because a committee owes a fiduciary duty only to the class of creditors it represents, not to the estate, Paul S. Aronzon, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in Los Angeles, California, asserts. Deutsche Bank Trust Company Americas, as administrative agent to the OpCo Lenders, complains that the Creditors' Committee has not presented any colorable claim against the OpCo Lender Parties. There are no valid constructive fraudulent conveyance claims against the OpCo Lender Parties under either state or federal law because the OpCo Lenders partially refinanced a $2 billion BofA Credit Facility in connection with the LBO Transaction and provided a working capital line to the Debtors and their subsidiaries -- the hallmarks of reasonably equivalent value, Deutsche Bank asserts. About Station Casinos Station Casinos, Inc., is a gaming and entertainment company that currently owns and operates nine major hotel/casino properties (one of which is 50% owned) and eight smaller casino properties (three of which are 50% owned), in the Las Vegas metropolitan area, as well as manages a casino for a Native American tribe. Station Casinos Inc., together with its affiliates, filed for Chapter 11 on July 28, 2009 (Bankr. D. Nev. Case No. 09-52477). Station Casinos has hired Milbank, Tweed, Hadley & McCloy LLP as legal counsel in the Chapter 11 case; Brownstein Hyatt Farber Schreck, LLP, as regulatory counsel; and Lewis and Roca LLP as local counsel. The Debtor is also hiring Lazard Freres & Co. LLC as investment banker and financial advisor. Kurtzman Carson Consultants LLC is the claims and noticing agent. In its bankruptcy petition, Station Casinos said that it had assets of $5,725,001,325 against debts of $6,482,637,653 as of June 30, 2009. About 4,378,929,997 of its liabilities constitute unsecured or subordinated debt securities. Bankruptcy Creditors' Service, Inc., publishes Station Casinos Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Station Casinos Inc. and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) STATION CASINOS: Bondholders Defend Bid to Pursue LBO Lawsuits -------------------------------------------------------------- Daily Bankruptcy Review reports Station Casinos Inc.'s bondholders are defending their bid to sue the Debtors' owners and the banks that arranged its 2007 leveraged buyout. The bondholders contend the deal "fueled a massive transfer wealth to insiders" at their expense. 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) SUMBRY MORTUARY: Voluntary Chapter 11 Case Summary -------------------------------------------------- Debtor: Sumbry Mortuary, Inc. dba Sumbry Mortuary and Florist P.O. Box 1769 Phenix City, AL 36869 Bankruptcy Case No.: 10-80118 Chapter 11 Petition Date: January 25, 2010 Court: United States Bankruptcy Court Middle District of Alabama (Opelika) Judge: William R. Sawyer Debtor's Counsel: Michael A. Fritz, Sr., Esq. Fritz & Hughes, LLC 7020 Fain Park Drive, Suite 1 Montgomery, AL 36117 Tel: (334) 215-4422 Fax: (334) 215-4424 Email: bankruptcy@fritzandhughes.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $100,001 to $500,000 The Company says it does not have unsecured creditors who are non insiders when they filed their petition. The petition was signed by Arthur L. Sumbry, funeral director of the Company. TAYLOR BEAN: Freddie Mac Wants to File Own Liquidation Plan ----------------------------------------------------------- Daily Bankruptcy Review reports Freddie Mac is looking to wrest control over the bankruptcy liquidation of Taylor Bean & Whitaker Mortgage Corp. According to DBR, Freddie Mac contends Taylor Bean is wasting cash on the advisory firm running the company. About Freddie Mac The Federal Home Loan Mortgage Corporation (FHLMC) NYSE: FRE -- http://www.freddiemac.com/-- commonly known as Freddie Mac, is a stockholder-owned government-sponsored enterprise authorized to make loans and loan guarantees. Freddie Mac was created in 1970 to provide a continuous and low cost source of credit to finance America's housing. Freddie Mac conducts its business primarily by buying mortgages from lenders, packaging the mortgages into securities and selling the securities -- guaranteed by Freddie Mac -- to investors. Mortgage lenders use the proceeds from selling loans to Freddie Mac to fund new mortgages, constantly replenishing the pool of funds available for lending to homebuyers and apartment owners. Freddie Mac narrowed its net loss to $5,013,000,000 for the three months ended September 30, 2009, from a net loss of $25,295,000,000 for the same quarter a year ago. Freddie Mac posted a net loss of $14,097,000,000 for the nine months ended September 30, 2009, from a net loss of $26,263,000,000 for the same period a year ago. As of September 30, 2009, Freddie Mac had $866,601,000,000 in total assets against $856,195,000,000 in total liabilities. As of September 30, 2009, Total Freddie Mac stockholders' equity was $10,311,000,000; and Total equity was $10,406,000,000. Conservatorship As reported by the Troubled Company Reporter, the U.S. government took direct responsibility for Fannie Mae and Freddie Mac, placing the government sponsored enterprises under conservatorship on September 7, 2008. James B. Lockhart, director of Federal Housing Finance Agency, said that Fannie Mae and Freddie Mac share the critical mission of providing stability and liquidity to the housing market. Between them, the Enterprises have $5.4 trillion of guaranteed mortgage-backed securities (MBS) and debt outstanding, which is equal to the publicly held debt of the United States. Among the key components of the conservatorship, the FHFA, as conservator, assumed the power of the Board and management. About Taylor Bean Taylor, Bean & Whitaker Mortgage Corp. is a 27-year-old company that grew from a small Ocala-based mortgage broker to become one of the largest mortgage bankers in the United States. In 2009, Taylor Bean was the country's third largest direct-endorsement lender of FHA-insured loans of the largest wholesale mortgage lenders and issuer of mortgage backed securities. It also managed a combined mortgage servicing portfolio of approximately $80 billion. The company employed more that 2,000 people in offices located throughout the United States. Taylor Bean filed for Chapter 11 on August 24 (Bankr. M.D. Fla. Case No. 09-07047). Taylor Bean has more than $1 billion of both assets and liabilities, and between 1,000 and 5,000 creditors, according to the bankruptcy petition. TELIGENT INC: Seeks To Limit K&L Gates Discovery ------------------------------------------------ Law360 reports that the unsecured claims estate representative for Teligent Inc. is trying to block attorneys from K&L Gates LLP from accessing confidential settlement documents relating to former CEO Alex Mandl's departure from the telecom that the firm hopes to use in defending a malpractice suit that spun out of the original litigation. Teligent, Inc., a provider of broadband communication services offering business customers local, long distance, high-speed data and dedicated Internet services over its digital SmartWave local networks in major markets throughout the United States, filed for chapter 11 protection on May 21, 2001. James H.M. Sprayregen, Esq., Matthew N. Kleiman, Esq., and Lena Mandel, Esq., at Kirkland & Ellis represented the Debtors in their restructuring effort. When the Company filed for protection from its creditors, it listed $1,209,476,000 in assets and $1,649,403,000 debts. The Debtors' Third Amended Plan of Reorganization was confirmed on Sept. 6, 2002. Pursuant to the confirmed Plan, Savage & Associates, P.C., serves as the Unsecured Claims Estate Representative to pursue preference litigation and other post-confirmation recovery actions. TRIPLE J OILFIELD: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Triple J Oilfield Services, Inc. P.O. Box 1665 Mission, TX 78572 Bankruptcy Case No.: 10-70048 Chapter 11 Petition Date: January 25, 2010 Court: United States Bankruptcy Court Southern District of Texas (McAllen) Judge: Richard S. Schmidt Debtor's Counsel: Eduardo V. Rodriguez, Esq. Malaise Law Firm 1265 N Expressway 83 Brownsville, TX 78521 Tel: (956) 547-9638 Fax: (956) 547-9630 Email: evrcourt@malaiselawfirm.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 According to the schedules, the Company has assets of $3,978,561, and total debts of $4,336,554. 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/txsb10-70048.pdf The petition was signed by Jimmy J. Jones, president of the Company. TRUMP ENTERTAINMENT: Court Delays Review of Interest Payment Issue ------------------------------------------------------------------ Eric Morath at Dow Jones Daily Bankruptcy Review reports that Judge Judith H. Wizmur of the U.S. Bankruptcy Court for the District of New Jersey has put off a decision in the Trump Entertainment Resorts Inc. Chapter 11 case that could have given Donald Trump the upper hand over Carl Icahn in their battle for control of three Atlantic City, N.J., casinos. According to the report, Judge Wizmur on Thursday said she wouldn't determine if $40.5 million in payments made to Trump Entertainment's lenders were interest or payments on loan principal until she considers rival bankruptcy plans for the Debtors at a February 23 hearing. Icahn owns or controls all of the company's $488.8 million in secured debt through a deal with Beal Bank. According to Mr. Morath, if the $40.5 million was determined to be principal payments, then the amount owed to lenders would be reduced, lowering what a Trump-backed group would have to pay to cash-out the lenders and take control of the casinos that bear the Trump name. Mr. Morath reports that Judge Wizmur said she will determine how to characterize the payments at the confirmation hearing when the total value of Trump Entertainment is discussed. Creditors are in the process of voting on the rival plans. According to Mr. Morath, Judge Wizmur said these are "issues we will take up at confirmation" and that if the issues "are resolved earlier, it will cause more confusion when we take up the central valuation issue." As reported by the Troubled Company Reporter on January 22, 2010, the Court approved the adequacy of information in the disclosure statements of the two competing Plans for Trump Entertainment. The Plans were proposed by the Debtors, and the Ad Hoc Committee of Holders of 8.5% Senior Secured Notes; and Beal Bank and Icahn Partners. The Court's approval of the competing disclosure statements allows each parties to commence the solicitation of votes for confirmation of their Plan. The deadline for returning completed ballots is at 4:00 p.m. (prevailing Eastern Time) on February 12, 2010. Objections, if any, to confirmation of the Plan must be received by the Court and notice parties no later than 5:00 p.m. February 19, 2010. A hearing to consider confirmation of the Plans is scheduled for February 23, 2010, at 9:00 a.m. (prevailing Eastern Time.) According to the Fifth Amended Disclosure Statement proposed by Beal Bank and Icahn Partners, dated January 5, 2010, the Plan provides that (i) each holder of an allowed general unsecured claim, will receive its pro rata share of (a) $13,937,300, to be paid in cash and (b) the subscription rights; and (ii) in all other cases, the holder will not be entitled to, nor will it receive or retain, any property or interest in property on account of its allowed general unsecured claims. Under the Modified Sixth Amended Disclosure Statement proposed by the Ad Hoc Committee of Holders of 8.5% Senior Secured Notes Due 2015 and the Debtors, dated January 5, 2010, the holders of allowed general unsecured claims will receive on the effective date, (i) the cash distribution; and (ii) their pro rata share of the creditor distribution. A full-text copy of the Beal DS is available for free at: http://bankrupt.com/misc/TrumpEntertainment_4thABealPlan.pdf A full-text copy of the Beal Plan is available for free at: http://bankrupt.com/misc/TrumpEntertainment_5thABealDS.pdf A full-text copy of the Noteholders DS is available for free at: http://bankrupt.com/misc/Trump_6thANoteholdersDS.pdf A full-text copy of the Noteholders Plan is available for free at: http://bankrupt.com/misc/Trump_6thANoteholdersPlan.pdf 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. VIKING SYSTEMS: Dutchess to Buy Shares Over 36-Month Period ----------------------------------------------------------- Viking Systems, Inc., on January 7, 2010, entered into an Investment Agreement with Dutchess Opportunity Fund, II, LP. The Investor committed to purchase up to $5,000,000 of the Company's common stock over 36 months. The Company may draw on the facility from time to time, as and when it determines appropriate in accordance with the terms and conditions of the Investment Agreement. The purchase price will be set at 96% of the volume weighted average price (VWAP) of the Company's common stock during the 5 consecutive trading day period beginning on the trading day immediately following the date of delivery of the applicable put notice. The amount that the Company is entitled to Put in any one notice will be equal to either 1) 200% of the average daily volume of the common stock for the 3 trading days prior to the applicable Put Notice Date, multiplied by the average of the 3 daily closing prices immediately preceding the Put Date or 2) $100,000. The Investor will not be obligated to purchase shares if the Investor's total number of shares beneficially held at that time would exceed 4.99% of the number of shares of the Company's common stock as determined in accordance with Rule 13d-1 of the Securities Exchange Act of 1934, as amended. In addition, the Company is not permitted to draw on the facility unless there is an effective registration statement to cover the resale of the shares. Pursuant to the terms of a Registration Rights Agreement dated January 7, 2010, between the Company and the Investor, the Company is obligated to file a registration statement with the SEC to register the resale by the Investor of 15,000,000 shares of the common stock underlying the Investment Agreement on or before 21 calendar days of the date of the Registration Rights Agreement. The Company is obligated to use all commercially reasonable efforts to have the registration statement declared effective by the SEC within 90 days after the registration statement is filed. On January 15, the Company filed with the Securities and Exchange Commission FORM S-1 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 to register the 15,000,000 shares. The proposed maximum aggregate offering price for the shares is $4,200,000. A full-text copy of the Registration Statement is available at no charge at http://ResearchArchives.com/t/s?4e44 Going Concern Doubt The report dated April 15, 2009, from the Company's independent registered public accounting firm, Squar, Milner, Peterson, Miranda & Williamson, LLP, on the Company's financial statements for the year ended December 31, 2008, included a going concern explanatory paragraph in which they stated that there was substantial doubt regarding the Company's ability to continue as a going concern. The Company's independent auditors pointed to the Company's significant operating losses and negative operating cash flows. About Viking Systems Based in Westborough, Massachusetts, Viking Systems, Inc. (OTCBB: VKNG.OB) -- http://www.vikingsystems.com/-- is a developer, manufacturer and marketer of visualization solutions for complex minimally invasive surgery. The Company partners with medical device companies and healthcare facilities to provide surgeons with proprietary visualization systems enabling minimally invasive surgical procedures, which reduce patient trauma and recovery time. VIKING SYSTEMS: Registers 2.8MM Shares Under Incentive Plan ----------------------------------------------------------- Viking Systems, Inc., filed with the Securities and Exchange Commission a FORM S-8 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 to register 2,800,000 shares of Common Stock, par value $0.001 per share, issued under the Viking Systems, Inc. Amended 2008 Stock Incentive Plan. On December 16, 2009, the Company's board of directors approved 2,800,000 additional shares to be issued under the Amended 2008 Equity Incentive Plan. A full-text copy of the Company's registration statement is available at no charge at http://ResearchArchives.com/t/s?4e45 Going Concern Doubt The report dated April 15, 2009, from the Company's independent registered public accounting firm, Squar, Milner, Peterson, Miranda & Williamson, LLP, on the Company's financial statements for the year ended December 31, 2008, included a going concern explanatory paragraph in which they stated that there was substantial doubt regarding the Company's ability to continue as a going concern. The Company's independent auditors pointed to the Company's significant operating losses and negative operating cash flows. About Viking Systems Based in Westborough, Massachusetts, Viking Systems, Inc. (OTCBB: VKNG.OB) -- http://www.vikingsystems.com/-- is a developer, manufacturer and marketer of visualization solutions for complex minimally invasive surgery. The Company partners with medical device companies and healthcare facilities to provide surgeons with proprietary visualization systems enabling minimally invasive surgical procedures, which reduce patient trauma and recovery time. VITERRA, INC: Moody's Confirms Corporate Family Rating at 'Ba1' --------------------------------------------------------------- Moody's Investors Service confirmed Viterra, Inc.'s Ba1 Corporate Family Rating and other ratings, concluding the review beginning on May 19, 2009, pending the completion of the proposed acquisition of ABB Grain Ltd. by Viterra in a friendly transaction. Viterra's Speculative Grade Liquidity rating was raised to SGL-2 from SGL-3 indicating an improvement to a good liquidity profile over the next 12 months. The outlook is stable. The rating confirmation reflects the final financing arrangements for the acquisition, (specifically on the choice of ABB shareholders of a mix of cash versus shares), the strategic fit of the two companies, and the level of cash flow that can be generated to reduce debt, if needed, in a reasonable fashion given the cyclicality and price volatility of the company's agricultural products. Moody's indicated in May 2009, and again in December 2009, that if the transaction went forward as proposed it was likely that Viterra's existing ratings would be confirmed. The ABB acquisition, valued at approximately A$1.6 billion (C$1.4 billion), was comprised of a prudent mix of 50% equity and 50% cash. As consideration for the acquisition Viterra paid ABB shareholders about C$703 million in cash and 78.3 million Viterra shares. Moreover, a considerable portion of the cash used in the purchase was pre-funded with a C$450 million equity offering. Viterra's unadjusted debt to capital at the end of FYE October 31, 2009 was 31%. This is a low level of leverage, especially given that Viterra had some C$1 billion in cash and marketable securities on its balance sheet at year end versus some C$1.6 billion of unadjusted debt. Viterra has indicated that it anticipates generating roughly C$30 million in annual synergies in 2012. In addition, the Ba1 ratings continue to reflect the growth aspirations of Viterra management. The stable outlook incorporates the assumption that future acquisition activity of material size would be prudently financed. The outlook also reflects the desire by Moody's to see Viterra to perform over a longer period of time with its relatively new consolidated group of assets given the fast acquisition related growth that management has undertaken. Viterra's revenues have grown from C$1.5 billion at the end of 2006 to some C$6.6 billion at the end of 2009 and ABB could add another C$2 billion in revenues over the next 12 months. It is not expected that Viterra will be considered for an upgrade in the very near term since management has indicated that they are looking to continue a program of strategic acquisitions (possibly using leverage). Furthermore, the structure of Viterra's credit facilities and term debt are secured (secured debt is unusual at the investment grade rating level), and most importantly Moody's would like to see the generation of investment grade credit metrics by Viterra's new business profile on a sustainable multi year basis. The generation of free cash flow is a typical trait for investment grade issuers. A free cash flow to debt ratio of over 8% on a sustainable basis would be seen as a positive for the rating. Prior to a positive rating move Moody's would look for the agricultural market dynamics to remain healthy, for the provision for security on their senior secured credit facility to be eliminated or in the process of being eliminated, for continued success by management at integrating the ABB and other potential acquisitions, and for investment grade credit metrics to be achieved and sustained over a multi-year period. Ratings confirmed and removed from review Issuer: Viterra Inc. -- Probability of Default Rating - Ba1 -- Corporate Family Rating- Ba1 -- Senior Unsecured Notes- Ba1 - moved to LGD3 49% from LGD4 56% .SGL-2 moved from SGL-3 Viterra's SGL-2 rating, reflecting a good liquidity profile, is indicative of the company's significant cash generating capabilities, balanced by the high seasonal demands on working capital for its grain handling and agri-products businesses (over 75% of Viterra's agri-products are delivered from April through June). Ongoing liquidity concerns for grain processors center on volatility of crop and farm input pricing. For example, a significant increase in the cost of commodity grains can increase the working capital burden for Viterra and other processors, and these price movements will increase the cash requirements in managing the business. Viterra's liquidity is supported by its sizeable cash and marketable securities of approximately C$1.0 billion as of the fourth quarter filings (October 31, 2009). Additionally, Moody's estimates that as of October 31, 2010 the company had in excess of C$460 million in availability under its domestic revolving C$800 million ABL facility for use in managing the seasonal swings in working capital. Sustaining capital spending for 2010 is estimated at C$140 million. Viterra does not pay a dividend on its common stock and the company further benefits from having no near term maturities of its long-term debt; the 3-year C$800 million revolving ABL facility is due in 2012, subject to meeting compliance tests, and there was nothing drawn at the end of October 2009. The company is expected to maintain compliance with its ABL covenants which do not become effective unless availability drops below C$75 million. Viterra announced its intention to, by the end of January 2010, reduce the short-term debt of its Australian operations by A$300 million. At October 31, 2009 the company had about A$600 million drawn under the A$1.2 billion secured revolvers that fund the working capital needs of the ABB business. The company is utilizing A$300 million of surplus cash to reduce ABB's seasonal drawings. This action is expected to reduce the Company's interest expense (net of interest otherwise earned on short-term investments) by approximately C$1.3 million per month. At year-end October 2009, Viterra had over C$1 billion in cash and short-term investments on its balance sheet, of which approximately C$800 million is available for other uses. Post this payment Viterra would have some C$500 million in cash available for growth initiatives. Availability under the A$1.2 billion facility is not impacted. Current cash balances are expected to remain in place until they are required to support Viterra's future growth plans. Management has publicly indicated that they would consider other acquisitions and Moody's assume they will be funded in a similar prudent manner as the last two large acquisitions. Moody's most recent announcements concerning the ratings for Viterra was on December 8, 2009, when Moody's maintained Moody's review as the company addressed a possible covenant breach in a bank facility at ABB. Viterra announced on December 29, 2009, that the breach had been remedied through a waiver by ABB's Australian lending syndicate. Viterra Inc., formerly known as Saskatchewan Wheat Pool Inc., is headquartered in Regina, Saskatchewan, and is the largest grain handler in Canada. The Viterra entity was formed on May 29, 2007, after the acquisition of Agricore United by Saskatchewan Wheat Pool. Viterra operates through five business segments; Grain Handling and Marketing, Agri-Products, Agri-Food Processing, Livestock Feed and Services, and Financial Products, but derives the majority of their income through the Grain Handling and Marketing and Agri-Products business segment. Revenues were C$6.6 billion for the 12 month period ending third-quarter October 31, 2009. WEST POINT: Case Summary & 11 Largest Unsecured Creditors --------------------------------------------------------- Debtor: West Point Log Corporation POB 170 West Point, VA 23181-0170 Bankruptcy Case No.: 10-30453 Chapter 11 Petition Date: January 25, 2010 Court: United States Bankruptcy Court Eastern District of Virginia (Richmond) Judge: Chief Judge Douglas O. Tice Jr. Debtor's Counsel: Robert A. Canfield, Esq. Canfield, Baer, Heller & Johnston, LLP 2201 Libbie Ave., Suite 200 Richmond, VA 23230 Tel: (804) 673-6600 Fax: (804) 673-6604 Email: bcanfield@canfieldbaer.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 11 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/vaeb10-30453.pdf The petition was signed by Dean L. Greer, president of the Company. WILLIAM CARTER: Moody's Confirms Corporate Family Rating at 'Ba2' ----------------------------------------------------------------- Moody's Investors Service confirmed the ratings of William Carter Company Inc. (a wholly owned subsidiary of Carter's Inc.) including its Corporate Family Rating at Ba2. This rating action concludes the review for possible downgrade initiated on Nov 10, 2009, following Carter's announcement that due to material weakness in internal controls, previously filed financials should no longer be relied upon. The confirmation of Carter's ratings recognizes that Carter's has made significant progress towards remediating the deficiencies in its internal controls and subsequently restated prior consolidated financial statements. The company is now current with all public filings and is in compliance with all covenants related to its senior secured bank credit facility. The extent of the restatement adjustments is not material and the effect on credit metrics is minimal. Moody's believe that there are adequate initiatives underway to remediate the remaining material weakness and Moody's expect no further restatement adjustment on the company's financial reports. These ratings were confirmed: William Carter Company * Corporate Family Rating at Ba2 * Probability of Default Rating at Ba3 * Sr. Secured Credit Facilities at Ba2 (LGD 2, 28%) Moody's last rating action on Carter's Inc. was on November 10, 2009, when the company's ratings were placed on review for possible downgrade. Headquartered in Atlanta, Georgia, The William Carter Company (Carter's) is a leading marketer of branded apparel product for infants and young children under the Carter's and OshKosh brands. WM BOLTHOUSE: Moody's Assigns 'B1' Rating on Senior Secured Loan ---------------------------------------------------------------- Moody's Investors Service assigned its B1 rating to Wm. Bolthouse Farms, Inc.'s proposed senior secured revolving credit and first lien term loan, a rating of Caa1 to its proposed second lien term loan and affirmed its B2 CFR. The rating outlook was changed to stable from negative. The rating action follows the company's announcement that it plans to refinance its senior credit facilities and Holdco PIK Perpetual Preferred Stock. The new proposed credit facility includes $65 million 1st lien Revolving Credit Facility; $500 million 1st lien Term Loan; $225 million 2nd Lien Term Loan. Moody's change in outlook was prompted by i) improvement in covenant cushion under a new credit facility, alleviating short- term liquidity concerns; ii) extending the upcoming maturity of the existing revolver into 2015 and term loans into 2016; iii) an improving trend in Bolthouse's operating results combined with lower future after-tax interest costs as a result of refinancing; and iv) improved cushion which allows for reinvestment in operations and more marketing spend to promote growth. While the new capital structure results in a higher funded debt and leverage in the near-term, Moody's views the refinancing transaction as making strategic sense and benefiting company's ability to reduce its leverage in the long run. Proposed senior secured credit facility: * $65 million 1st lien Revolver B1 (LGD3, 36%) * $500 million 1st lien Term Loan B1 (LGD3, 36%) * $225 million 2nd Lien Term Loan Caa1 (LGD5, 86%) These ratings were affirmed: * CFR B2 * PDR B2 The outlook was changed to stable from negative. Following the closing of the new facilites as listed above, the ratings on the prior bank facilities will be withdrawn. Moody's most recent rating action on Bolthouse was on August 6, 2009, when Moody's upgraded the probability of default rating to B2 from B3 and the 2nd lien term loan to Caa1 from Caa2. The B2 CFR was affirmed. Headquartered in Bakersfield, California, BF Bolthouse Holdco, LLC through its operating subsidiaries including Wm. Bolthouse Farms, Inc, is a grower, processor and distributor of peeled and cut carrots and carrot products, and a producer of fruit and vegetable based beverages and salad dressings. Revenues for the twelve months ended September 30, 2009, were approximately $623 million. The company is majority owned and controlled by an affiliate of private equity firm Madison Dearborn Capital Partners IV, L.P W.R. GRACE: Wraps Up Confirmation Hearing on Plan ------------------------------------------------- Peg Brickley at Dow Jones Daily Bankruptcy Review reports that W.R. Grace & Co. wrapped up final arguments over its Chapter 11 exit plan Monday with a debate over how much interest is due on its loans when it emerges from bankruptcy. According to DBR, Grace argues that investors who bought $500 million in bank loans should be paid about $350 million in interest, in addition to payment in full on the principal. Grace says the bank loan interest rate was determined in a series of deals, including the multi-billion-dollar global settlement of asbestos damage claims that cleared the way for it to get out of Chapter 11. The settlement allows shareholders to hang on to their stock, which was trading for $25 per share Monday. DBR says investors in Grace's bank debt point out the company is healthy enough to pay the default rate of interest on loans, honoring the bargain it entered into when it borrowed the money. The holders of Grace bank loan, according to DBR, want nearly $100 million more than Grace is offering, and contend Grace should not be allowed out of bankruptcy until it pays them. DBR relates that lenders argue Grace's market capitalization stands as proof the Debtor is solvent, and its Chapter 11 case is not like most cases, which pay creditors pennies on the dollar of debt, "especially these days," said bank attorney Ken Pasquale, Esq., at Stroock & Stroock & Lavan. DBR says the bank loans at issue predate Grace's April 2001 Chapter 11 filing. DBR notes Monday's argument marked the end of months of confirmation hearings at which Grace is seeking permission to put its reorganization plan in place and emerge from bankruptcy. "The default rate is rarely applied. It is applied in very, very highly unusual cases," Judge Judith Fitzgerald at the U.S. Bankruptcy Court for the District of Delaware commented at the hearing, DBR reports. Grace's plan provides for the establishment of a $2.9 billion trust to cover asbestos liabilities. David Bernick, Esq., at Kirkland & Ellis, on Grace's behalf, on Monday said asbestos creditors and shareholders all gave up something in the compromise that led to the Chapter 11 plan, and that it would only be fair for bank debt holders to be on the same footing as others. DRB, citing court documents, relates investors in Grace's bank debt included Avenue Capital Management, Caspian Capital Advisors, Citigroup Inc., and J.P. Morgan Chase & Co. About W.R. Grace Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA) -- http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally. The Company and its debtor-affiliates filed for Chapter 11 protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139). David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP, represent the Debtors in their restructuring efforts. The Debtors hired Blackstone Group, L.P., for financial advice. PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Capstone Corporate Recovery LLC for financial advice. David T. Austern, the legal representative of future asbestos personal injury claimants, is represented by Orrick Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official Committee of Asbestos Personal Injury Claimants. The Asbestos Committee of Property Damage Claimants tapped Scott Baena, Esq., and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod, LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel, LLP, represents the Official Committee of Equity Security Holders. W.R. Grace and its debtor affiliates, with the support of the Official Committee of Asbestos Personal Injury Claimants, the Asbestos PI Future Claimants' Representative and the Official Committee of Equity Security Holders, have submitted a proposed Chapter 11 plan of reorganization. The Chapter 11 plan is built around an April 2008 settlement for all present and future asbestos personal injury claims, and a subsequent settlement for asbestos property damage claims. The Plan confirmation hearing wrapped up on January 25. Bankruptcy Creditors' Service, Inc., publishes W.R. Grace Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) * Epiq Systems Expanded Electronic Discovery Segment in 2009 ------------------------------------------------------------ Epiq Systems, Inc., broadened its e-discovery service offerings in 2009, adding data collections, forensics, and document review services and expanding its geographic presence to include Hong Kong and Brussels. The company recently launched IQ ReviewTM, a revolutionary combination of new intelligent technology and expert services which incorporates new prioritization technology into DocuMatrixTM, its flagship document management platform. The company will report in its 2009 year-end earnings release that the electronic discovery segment's fourth quarter operating revenue (total revenue before operating revenue from reimbursed direct costs) represented its strongest quarter of 2009. Preliminary fourth quarter operating revenue for the segment is projected to be up 13% compared to the fourth quarter of 2008, and up 26% compared to the third quarter of 2009. As previously announced, Epiq will be hosting E-Discovery Super Sessions at the ALM 2010 LegalTech conference. Industry thought leaders from global law firms, the judiciary, consulting firms and Epiq Systems will participate in panel sessions which address issues facing law firms and corporations and propose solutions related to document review, international e-discovery and joint repositories. The panel sessions will be held on February 2, 2010, in Concourse G at the Hilton New York. Tom W. Olofson, chairman and CEO, and Christopher E. Olofson, president and COO of Epiq Systems, stated, "We anticipate continued increases in electronic discovery activity in 2010, including an overall pickup in legal matters as well as an active regulatory environment, both domestically and internationally. Our continued investment in technology, services, and global reach allow us to provide value-added, streamlined e-discovery solutions for law firms and corporations." About Epiq Systems Epiq Systems is a leading global provider of integrated technology solutions for the legal profession. * John Hintz Joins Chadbourne & Parke's IP Group ------------------------------------------------ The international law firm of Chadbourne & Parke LLP disclosed that John M. Hintz has joined the firm as a partner in the intellectual property practice group of the New York Office. Mr. Hintz, 46, comes to Chadbourne from the New York office of Wilmer Hale. The addition of Mr. Hintz reflects the continued expansion of Chadbourne's IP practice in the areas of financial services, Internet technology, and media. He joins the recent high-profile additions of former Goldman Sachs Chief Intellectual Property Counsel John A. Squires, former Time Warner Inc. Chief Patent Counsel Chuck Fish, former Chief Patent Counsel for Credit Suisse Securities (USA) LLP Kenneth L. Johnson and former Yahoo! Vice President & Associate General Counsel - Global Patents Duane Valz. "We are excited about our continued expansion of our IP practice to meet the full service needs of our clients and the changing IP marketplace. John provides us with additional, nationally, recognized expertise to provide a top litigation defense team to combat the growing problem of predatory patent assertions," said Chadbourne Managing Partner Charles K. O'Neill. Mr. Hintz's experience further rounds out the litigation and counseling capabilities of the IP practice, and he will play a pivotal role in its continued rapid growth. "John's reputation of successfully defending non-practicing entity patent assertions precedes him and allows us to continue to build out our platform and model to provide a full range of IP representation," said Walter Hanchuk, co-chair of the IP practice. "John has most recently successfully defended and favorably resolved patent litigation assertions against a variety of financial services clients," said John A. Squires, co-chair of the practice. "Indeed, increasingly these patent assertions involve multiple defendants, and John's talents allow us to efficiently and effectively manage both the case and the multi-defendant dynamic," according to Squires. Chadbourne is currently defending clients in various IP litigation matters in Texas and other jurisdictions In addition to handling all aspects of patent disputes, Mr. Hintz also has significant transactional, licensing and counseling experience, including advising clients on the IP aspects of mergers and acquisitions, as well as on the licensing of IP assets. "I am delighted to join the Chadbourne IP team," said Mr. Hintz. "The model that John and Walter have created is unique in IP representation and is a win-win for Chadbourne and its clients." Mr. Hintz was formerly a partner at Wilmer Hale in the firm's litigation/controversy department, and a member of the IP litigation practice group. His practice focused on all aspects of patent disputes, and he has litigated in federal courts throughout the country and before the International Trade Commission. Previously, he was a partner at Fish & Neave, an IP litigation boutique, where he worked for 16 years. He received a J.D., with honors, from George Washington University in 1988, where he served on Law Review and the Moot Court Board. Mr. Hintz also graduated from Miami University, where he received a B.S. in Paper Science and Engineering in 1985. About Chadbourne & Parke LLP Chadbourne & Parke LLP, an international law firm headquartered in New York City, provides a full range of legal services, including mergers and acquisitions, securities, project finance, private funds, corporate finance, energy, communications and technology, commercial and products liability litigation, securities litigation and regulatory enforcement, special investigations and litigation, intellectual property, antitrust, domestic and international tax, insurance and reinsurance, environmental, real estate, bankruptcy and financial restructuring, employment law and ERISA, trusts and estates and government contract matters. Major geographical areas of concentration include Russia, Central and Eastern Europe, the Middle East and Latin America. The Firm has offices in New York, Washington, DC, Los Angeles, Mexico City, London (an affiliated partnership), Moscow, St. Petersburg, Warsaw, Kyiv, Almaty, Dubai and Beijing. * Valuation and Strategic Consulting Specialist Joins Marks Paneth ------------------------------------------------------------------ Leading New York-area accounting firm Marks Paneth & Shron LLP (MP&S) announced today that Donald M. May, Ph.D., CPA, 49, a valuation specialist with nearly twenty years of experience in industry, academia and public accounting and deep expertise in litigation and strategic consulting has joined the firm as a director in the MP&S Litigation and Corporate Financial Advisory Services Group. Dr. May will be based in MP&S's Manhattan headquarters. Dr. May comes to MP&S from leading global consulting and accounting firms including a Big Four firm and most recently Experts-on-Experts LLC, a New York-based litigation support firm where he served as Managing Partner and economic advisor to law firm clients across various industries on valuation, lost profits, opposing expert reports and deposition and trial preparation. Earlier in his career, Dr. May was an Assistant Professor in the Sloan School of Management at the Massachusetts Institute of Technology where he published research and taught MBA and Ph.D. level classes in economics, accounting, financial statement analysis and statistics. "We're delighted to welcome Donald to our practice," said Steven L. Henning, CPA, partner-in-charge of the Litigation and Corporate Financial Advisory Services Group at Marks Paneth & Shron. "Don's vast experience developing and implementing asset valuation as well as preparing expert reports and witness testimony will bring tremendous value to the litigation services we offer our clients. In addition, Don's teaching background at one of the leading business schools underscores the increasingly sophisticated needs of our client base in this space." Dr. May brings to MP&S his experience preparing expert reports and expert witness testimony related to business valuation, hedge fund valuation, lost profits, lost enterprise value, time-series forecast models, asset and investment portfolio valuation and statistical forecasting models and methodologies. Dr. May also brings to MP&S experience developing and implementing firm wide training programs for estimating the cost of capital and valuation techniques. About Marks Paneth & Shron Marks Paneth & Shron LLP is an accounting firm with nearly 500 people, approximately 70 of whom are partners and principals. The firm provides businesses with a full range of auditing, accounting, tax, bankruptcy and restructuring services as well as litigation and corporate financial advisory services to domestic and international clients. The firm also specializes in providing tax advisory and consulting for high-net-worth individuals and their families, as well as a wide range of services for international, real estate, media, entertainment, nonprofit, professional and financial services and energy clients. The firm's subsidiary, Tailored Technologies, LLC, provides information technology consulting services. In addition, its membership in JHI, the leading international association for independent business advisers, financial consulting and accounting firms, facilitates service delivery to clients throughout the United States and around the world. Marks Paneth & Shron LLP, whose origins date back to 1907, is the 32 largest accounting firm in the U.S., and the 13th largest in the New York area. Its headquarters are in Manhattan. * Upcoming Meetings, Conferences and Seminars --------------------------------------------- January 27-29, 2010 TURNAROUND MANAGEMENT ASSOCIATION Distressed Investing Conference, Bellagio, Las Vegas Contact: http://www.turnaround.org/ Feb. 21-23, 2010 INSOL International Annual Regional Conference Madinat Jumeirah, Dubai, UAE Contact: 44-0-20-7929-6679 or http://www.insol.org/ April 20-22, 2010 TURNAROUND MANAGEMENT ASSOCIATION Sheraton New York Hotel and Towers, New York, NY Contact: http://www.turnaround.org/ Apr. 29-May 2, 2010 AMERICAN BANKRUPTCY INSTITUTE Annual Spring Meeting Gaylord National Resort & Convention Center, Maryland Contact: 1-703-739-0800; http://www.abiworld.org/ June 17-20, 2010 AMERICAN BANKRUPTCY INSTITUTE Central States Bankruptcy Workshop Grand Traverse Resort and Spa, Traverse City, Michigan Contact: 1-703-739-0800; http://www.abiworld.org/ July 7-10, 2010 AMERICAN BANKRUPTCY INSTITUTE Northeast Bankruptcy Conference Ocean Edge Resort, Brewster, Massachusetts Contact: 1-703-739-0800; http://www.abiworld.org/ July 14-17, 2010 AMERICAN BANKRUPTCY INSTITUTE Southeast Bankruptcy Conference The Ritz-Carlton Amelia Island, Amelia, Fla. Contact: http://www.abiworld.org/ Aug. 5-7, 2010 AMERICAN BANKRUPTCY INSTITUTE Mid-Atlantic Bankruptcy Workshop Hyatt Regency Chesapeake Bay, Cambridge, Maryland Contact: 1-703-739-0800; http://www.abiworld.org/ Oct. 6-8, 2010 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention JW Marriott Grande Lakes, Orlando, Florida Contact: http://www.turnaround.org/ Dec. 2-4, 2010 AMERICAN BANKRUPTCY INSTITUTE 22nd Annual Winter Leadership Conference Camelback Inn, Scottsdale, Arizona Contact: 1-703-739-0800; http://www.abiworld.org/ Mar. 31-Apr. 3, 2011 AMERICAN BANKRUPTCY INSTITUTE Annual Spring Meeting Gaylord National Resort & Convention Center, Maryland Contact: 1-703-739-0800; http://www.abiworld.org/ June 9-12, 2011 AMERICAN BANKRUPTCY INSTITUTE Central States Bankruptcy Workshop Grand Traverse Resort and Spa Traverse City, Michigan Contact: http://www.abiworld.org/ October 25-27, 2011 TURNAROUND MANAGEMENT ASSOCIATION Hilton San Diego Bayfront, San Diego, CA Contact: http://www.turnaround.org/ Dec. 1-3, 2011 AMERICAN BANKRUPTCY INSTITUTE 23rd Annual Winter Leadership Conference La Quinta Resort & Spa, La Quinta, California Contact: 1-703-739-0800; http://www.abiworld.org/ The Meetings, Conferences and Seminars column appears in the Troubled Company Reporter each Wednesday. Submissions via e-mail to conferences@bankrupt.com are encouraged. Last Updated: December 6, 2009 ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers' public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com/ On Thursdays, the TCR delivers a list of recently filed Chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to nation's bankruptcy courts. The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. The Sunday TCR delivers securitization rating news from the week then-ending. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland, USA. 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 2010. 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 ***