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/raid1/www/Hosts/bankrupt/TCR_Public/100212.mbx T R O U B L E D C O M P A N Y R E P O R T E R Friday, February 12, 2010, Vol. 14, No. 42 Headlines 1031 TAX: Judge Saves Investors' Claims in 1031 Fraud Suit 155 EAST TROPICANA: Warned of Looming Liquidity Crisis in 2010 2151 HOTEL: Files Schedules of Assets & Liabilities ABITIBIBOWATER INC: Delaware Trustee Files Late Claim ALLEN CAPITAL: Has Interim Financing Approval AMERICAN AIRLINES: JAL Alliance Won't Affect S&P's 'B-' Ratings AMERICAN INT'L: MetLife May Pay $8-Bil. in Stock for Unit AMERICAN LOCKER: Reports Net Profit for June 2009 Quarter AMERICAN MEDIA: Provides Financial, Circulation Report to Lenders AMTRUST FINANCIAL: Proposes to Sell Property & Casualty Business ARVINMERITOR INC: Moody's Retains 'Caa1' Corporate Family Rating BANK OF AMERICA: S&P Assigns Negative Outlook BANK OF AMERICA: Judge Rakoff Poses Questions on SEC Accord BI-LO LLC: Creditors Committee Abandons Competing Plan BIGLER LP: Judge Bohm Keep a Leash on Investment-Banking Fees BISCAYNE BAY: Facing Involuntary Chapter 7 Petition BLOCKBUSTER INC: Three Officials Step Down from Post BLOCKBUSTER INC: To File for Bankruptcy in Portugal BONEYARD LLC: Gets OK to Sell Real Property to Lennar Homes BONEYARD LLC: Taps Morgan Lewis as Bankruptcy Counsel BOSTON SCIENTIFIC: Unveils Management Changes, Restructuring Plan CALIFORNIA COASTAL: Dimensional Fund Owns 5.87% of Common Stock CANOPY FINANCIAL: Authorized to Sell Assets CANWEST GLOBAL: Canwest LP Enters Into $25 Mil. Credit Pact CANWEST GLOBAL: LP Senior Lenders Approve Plan of Compromise CANWEST GLOBAL: Noteholders Extend Approval Date for Plan CCS MEDICAL: Second Confirmation Hearing Set for March 11 CELL THERAPEUTICS: Decreases Net Loss by 42% in 2009 CHRYSLER LLC: 35 Ex-Dealers Seek to Restore Franchises CHRYSLER LLC: Ex-Dealers First In Line for New Franchises CHRYSLER LLC: Jones Day Charges $5.9 Mil. for Sept.-Dec. CHRYSLER LLC: Mercedes-Benz Objects to Sale of Equipment CIT GROUP: Taxpayers' $2.3-Bil. Stake Wiped Out, Treasury Says CITADEL BROADCASTING: Cash Collateral Hearing Moved to March 3 CITADEL BROADCASTING: Gets Final Nod to Pay Station Affiliates CITADEL BROADCASTING: Sec. 341 Meeting Set for February 22 CITIGROUP INC: Barclays to Acquire Italian Credit Card Business COEUR D'ALENE: Provides More Info. on $100-Mil. Notes Offering COHARIE HOG: Bankr. Administrator Says Panel Wants to Be Disbanded COHARIE HOG: Gets Final Okay to Use Cash Collateral CONSECO INC: Columbia Wanger Beneficially Owns 10% of Common Stock CRESCENT RESOURCES: Wants Bonus Program for Workers and Execs. CROWN HOLDINGS: Fitch Affirms Issuer Default Rating at 'BB-' DELTA AIR: JAL Unsuccessful Bid Won't Affect S&P's 'B' Ratings DENNY HECKER: Indicted on Conspiracy, Fraud and Money Laundering DESTINATION MATERNITY: S&P Raises Corporate Credit Rating to 'B' DOWNEY REGIONAL: Daughters of Charity Wants to Acquire Assets DUANE READE: Kasowitz Files Suit for Payment of $7.1MM Success Fee EDDIE BAUER: Texas Comptroller Objects to Plan Confirmation ELECTROGLAS INC: QVT Financial Ceases to Own Common Shares EMERSON OVERLOOK: Files Schedules of Assets and Liabilities EMERSON OVERLOOK: Gets Second Interim OK to Use Cash Collateral EMERSON JOSEPH: Falling Deman Prompts Chapter 11 Filing FAIRPOINT COMMS: Files Plan of Reorganization FAIRPOINT COMMS: Inks Agreement With Labor Unions FAIRPOINT COMMS: Offers to Return 16.9% to Unsecured Creditors FANNIE MAE: Guaranteed Mortgage Securities Tumble FAYETTEVILLE MARKETFAIR: Can Continue Using Cash Collateral FENDER MUSICAL: Moody's Downgrades Corporate Family Rating to 'B2' FLYING J: Proposes March 19 Auction for Bakersfield Refinery FRANK J GOMES: Files Schedules of Assets and Liabilities FRANK J GOMES: Can Use Cash Collateral Until Feb. 28 FREDDIE MAC: To Purchase Delinquent Loans From PC Securities FREDDIE MAC: Guaranteed Mortgage Securities Tumble GABRIEL COMMUNICATIONS: Moody's Withdraws 'B2' Corp. Family Rating GENERAL MOTORS: Hummer Sale Deadline Extended to End of Feb. GENERAL MOTORS: To Manufacture Own Electric Motors Starting 2013 GENERAL MOTORS: U.S. Sales For January Up by 14% GOTTSCHALKS INC: Dimensional Ceases to be Owners of 5% of Stock GRAHAM PACKAGING: Announces Pricing of Initial Public Offering HALCYON HOLDING: Court OKs Sale of 'Terminator' to Pacificor HARTMARX CORP: Proposes Lee & Associates as Broker HAWKER BEECHCRAFT: Has $712 Million Operating Loss for 2009 HIGH ROCK HOLDING: Files Schedules of Assets and Liabilities HSH DELAWARE: Has $5 Million Financing from Flowers IMPERIAL HOMES: Files for Chapter 7 Liquidation INTERNATIONAL ALUMINUM: Creditors Committee Fails to Halt Plan INTERNATIONAL RECTIFIER: Fitch Affirms 'BB' Issuer Default Rating ISACK ROSENBERG: New York Court Tosses Out Deal With Capital One ITC^DELTACOM INC: Withdraws Notes Offering Amid Weak Market JAPAN AIRLINES: Announces New Executive Officers JAPAN AIRLINES: Applies for Revision of IATA Normal Fares JAPAN AIRLINES: Discloses Route & Flight Frequency Plan for 2010 JOANNE SANDBLOM: Files Schedules of Assets and Liabilities LAKE AT LAS VEGAS: Former Owners Balk at Bankruptcy-Exit Plan LANDAMERICA FIN'L: Dimensional Stake Down to 300 Shares LANDAMERICA FIN'L: OneStop Plan Gets 86.36% Creditors' Acceptance LANDAMERICA FIN'L: Equity Title, et al., Oppose OneStop Plan LANDAMERICA FIN'L: OneStop Removal Period Extended to June 2 LANDMARK VALLEY: Gets OK to Continue Using INB's Cash Collateral LANDMARK VALLEY: Gets OK to Hire Cardenas Whitis as Bankr. Counsel LANDMARK VALLEY: Section 341(a) Meeting Scheduled for February 23 LBJ LAKEFRONT: Files Schedules of Assets and Liabilities LEHMAN BROTHERS: Barclays Defends Terms of Assets Purchase LEHMAN BROTHERS: Hearing on Unsealing of Examiner Report March 11 LEHMAN BROTHERS: Proposes Deal With Stamford Associates, et al. LEHMAN BROTHERS: Proposes to Prepay Variable Funding Trusts LEHMAN BROTHERS: Wants to Compel Foreign Banks to Pay $29MM+ LEHMAN BROTHERS: Wants to Set Process for Securities Transfer LEHMAN BROTHERS: CalPERS Loses $17M Lehman Debt Swap Bid LIFE TECHNOLOGIES: Moody's Affirms 'Ba1' Corporate Family Rating LINCOLN NATIONAL: Fitch Affirms 'BB+' Rating on Junior Debt LINENS 'N THINGS: Plan Modifications Approval Sought LYKINS ENTERPRISES: Files for Chapter 11 Bankruptcy MAGNA ENTERTAINMENT: Racing Groups Saddle Magna With $2.6M MAMMOTH CORONA: Court Sets Plan Outline Hearing for February 24 MAMMOTH SAN JUAN: Court Continues Plan Outline Hearing on Feb. 22 MESA AIR: Gets Approval for Jones Day as Special Counsel MESA AIR: Gets Nod to Continue LOC & Surety Bond Programs MESA AIR: Gets Nod to Hire Pachulski as Bankruptcy Attorneys NORTHERN 120: Taps Polsinelli Shughart as Bankr. Counsel OPTI CANADA: Reports Year-End 2009 Financial Results PACIFIC ETHANOL: Wants March 12 Extension of Plan Exclusivity PACIFIC GALVESTON: Taps John Lewis as Bankruptcy Counsel PAJAAMCO FAMILY: Meeting of Creditors Slated for February 23 PENN TRAFFIC: Foxhill Opportunity Ceases to Own 5% of Common Stock PENTON BUSINESS: Case Summary & 50 Largest Unsec. Creditors PENTON BUSINESS: S&P Downgrades Corporate Credit Rating to 'CC' PINNACLE ENTERTAINMENT: Moody's Affirms 'B2' Corp. Family Rating POPE & TALBOT: Trustee Fails to File Claim vs. Abitibi On-Time PRIMUS TELECOM: Whitebox Advisors Owns 5.6% of Common Stock PROLIANCE INT'L: Dimensional Fund Ceases to Own 5% of Common Stock PROTOSTAR LTD: Creditor Blasts Firm's Bid For Sale-Related Bonuses QUEST RESOURCE: PostRock Registration Statement Now Effective RECTICEL NA: Aims to Confirm Full Payment Plan in April RECKSON OPERATING: S&P Gives Stable Outlook, Keeps 'BB+' Rating RVL TEXAS: Files List of 20 Largest Unsecured Creditors RVL TEXAS: Files Schedules of Assets and Liabilities RVL TEXAS: Section 341(a) Meeting Scheduled for February 18 SONRISA PROPERTIES: Files Schedules of Assets and Liabilities SPA CHAKRA: Sets Hercules-Led Auction on February 24 SPANSION INC: Proposes to Settle Disputes With ASML SPANSION INC: Has Settlement Resolving Three Claims SPANSION INC: Spansion Japan Opposes Panel Plea to Sue SPANSION INC: Spansion Japan Settlement Approved by Court SPECTRUM BRANDS: Russell Hobbs Merger Cues Moody's Rating Review SUMMIT-BRANTLEY: Has $1.2 Million in Liabilities SYNUTRA INT'L: Reports $9.7-Million Net Loss for Q3 TEKOIL & GAS: Files Amended Disclosure Statement & Plan THREE-FIVE SYSTEMS: February 9 Distributions Delayed TIMOTHY SCHWARTZ: Files Schedules of Assets and Liabilities TLC VISION: Wants to Obtain $25MM Junior Secured Financing TRAVELPORT LLC: Shelves Discounted Offer for Floating Rate Notes TRIBUNE CO: Aurelius Contests Sealing of Creditors' Suit TRUMP ENTERTAINMENT: February 19 Set as Plan Objection Deadline VALENCE TECHNOLOGY: Dec. 31 Balance Sheet Upside-Down by $76MM VALASSIS COMMS: To Hold Investor Conference Call Today VAN HUNTER: Files Schedules of Assets and Liabilities VAUGHAN FOODDS: Won't Appeal NASDAQ Notice of Bid Price Deficiency VITESSE SEMICONDUCTOR: Inks Resignation and Separation Agreement VITESSE SEMICONDUCTOR: Losses Shrink to $33.86MM in 4th Quarter WALTER DIAL: Files Schedules of Assets and Liabilities WHITEMARK HOMES: Retains New Auditors WINN-DIXIE: To Distribute Shares Currently Held in Reserve WOLVERINE TUBE: Stockholders Reelect Board Members WYNDHAM WORLDWIDE: Bigger Dividend Won't Move Moody's Ba1 Rating ZAYO GROUP: S&P Assigns First-Time Corporate Credit Rating at 'B' * Chrysler-Fiat Transaction Wins IDD's M&A Deal of 2009 * January Bankruptcy Filings Hike 21% Over Last Year * Few Municipal Bonds Defaulted in 39 Years, Says Moody's * U.S. Foreclosure Activity Decreases 10% in January * Fed Lowers Value of AIG Assets, Hikes for Bear Holdings * Lasry's Avenue Capital to Invest in Distressed Debt * Sheppard Mullin Elects Ten Attorneys to Partnership * BOOK REVIEW: The First Junk Bond: A Story of Corp. Boom & Bust ********* 1031 TAX: Judge Saves Investors' Claims in 1031 Fraud Suit ---------------------------------------------------------- Law360 reports that a federal judge has denied a motion by Cordell Consultants Inc. to enforce an injunction issued in the bankruptcy of The 1031 Tax Group LLC that would bar investors in a separate case from asserting claims against the consulting firm. Headquartered in Richmond, Virginia, The 1031 Tax Group LLC -- http://www.ixg1031.com/-- was a privately held consolidated group of qualified intermediaries created to service real property exchanges under Section 1031 of the Internal Revenue Code. The Company and 15 of its affiliates filed for Chapter 11 protection on May 14, 2007 (Bankr. S.D.N.Y. Lead Case No. 07- 11448). Gerard A. McHale, Jr., was appointed Chapter 11 trustee. Jonathan L. Flaxer, Esq., and David J. Eisenman, Esq., at Golenbock Eiseman Assor Bell & Peskoe LLP, represent the Chapter 11 trustee. Kurtzman Carson Consultants LLC acts as claims and notice agent. Thomas J. Weber, Esq., Melanie L. Cyganowski, Esq., and Allen G. Kadish, Esq., at Greenberg Traurig, LLP, represent the Official Committee of Unsecured Creditors. As of Sept. 30, 2007, the Debtors had total assets of $164,231,012 and total liabilities of $168,126,294, resulting in a total stockholders' deficit of $3,895,282. Former CEO Edward H. Okun is in federal prison at Northern Neck Regional Jail in Warsaw, Virginia, after being convicted of mail fraud and other charges. Mr. Okun allegedly engaged in several misappropriations of funds of 1031 Tax Group and other entities. The funds were used for Mr. Okun's lavish lifestyle including acquiring properties and luxury asset. 155 EAST TROPICANA: Warned of Looming Liquidity Crisis in 2010 -------------------------------------------------------------- 155 East Tropicana, LLC, does not believe it will be able to generate sufficient cash flows from operations to fund 2010 financial commitments and cannot provide any assurances that it will be able to raise additional capital. In a regulatory filing in November, the Company warned it has significant indebtedness and financial commitments in 2009. As of September 30, 2009, the Company has $146.7 million in total debt. The Company also said its Senior Secured Credit Facility is fully extended and the Company has no additional availability to borrow against the Credit Facility. James Covert at The New York Post said the Company, which operates as Hooters Casino and Hotel in Las Vegas, defaulted on $144.5 million in long-term debt. Mr. Covert said Hooters Casino's key creditors include investment vehicles owned by the founders of the Hooters restaurant chain. Mr. Covert notes the resort's operations aren't connected with the Hooters restaurant, to which it pays a royalty fee for the use of its name. 155 East Tropicana in November reported a net loss of $5,377,574 for the three months ended September 30, 2009, from a net loss of $5,260,797 for the same period in 2008. The Company reported a net loss of $14,486,788 for the nine months ended September 30, 2009, from a net loss of $5,013,070 for the same period in 2008. Net operating revenues for the three months ended September 30, 2009, were $10,729,014 from $14,211,243 for the same period in 2008. Net operating revenues for the nine months ended September 30, 2009, were $35,744,847 from $46,772,167 for the same period in 2008. At September 30, 2009, the Company had total assets of $126,087,132 against total liabilities of $166,832,429, resulting in members' deficit of $40,745,298. The September 30 balance sheet showed strained liquidity: The Company had total current assets of $8,345,924 against $160,449,134 in total current liabilities. Based on anticipated future operations, the Company does not believe that cash on hand at September 30, 2009 of $5.6 million and expected cash flows would be adequate to meet the total financial obligations which include (1) anticipated operational expenses, (2) debt service on equipment leases and the Credit Facility, (3) capital expenses and (4) scheduled payments of interest on the Company's 8.75% Senior secured notes. The Company was unable to make the interest payment on the Notes due April 1, 2009 and October 1, 2009. The Company's current other obligations are being paid in the normal course of business. Due to the Company's inability to make the interest payments, an event of default occurred under the indenture governing the Notes. As a result, the note holders could exercise certain remedies provided under the indenture. The Company also has received Notice of Default and Reservation of Rights letters from the lenders under the Credit Facility. The Default Letters state that (i) an event of default exists under the Credit Facility as a result of the Company's failure to obtain control agreements for one or more deposit accounts established and maintained by the Company and as a result of failure to pay interest on the Notes, (ii) as a result of the event of default, the lenders are under no further obligation to extend further credit under the Credit Facility, (iii) the lenders will continue to evaluate their response to the event of default, and (iv) the Company no longer has an option of paying the LIBOR interest rate, but must pay the Wells Fargo prime rate plus the default rate, which is equal to four percentage points above prime rate. The lenders have not elected to accelerate the indebtedness under the Credit Facility. The Company has entered into discussions with the note holders and the Credit Facility lenders to attempt to negotiate forbearance agreements pursuant to which they would agree not to exercise, for a specified period of time, their remedies under the indenture or the Credit Facility. The Company has engaged a financial advisor to assist with its evaluation of financial and strategic alternatives. If the Company is not successful in obtaining a forbearance or entering into a transaction to address its liquidity and capital structure, the note holders have the ability to accelerate repayment of all amounts outstanding under the indenture ($141.4 million at September 30, 2009) and the Credit Facility lenders have the ability to accelerate repayment of all amounts outstanding under the Credit Facility ($14.5 million at September 30, 2009, plus an irrevocable letter of credit for $500,000 at September 30, 2009). If either the Notes indebtedness or the Credit Facility indebtedness were to be accelerated, the Company would be required to refinance or restructure the payments on that debt. The Company cannot be assured that it will be successful in completing a refinancing or restructuring. If the Company is unable to do so, it may determine to seek protection under Chapter 11 of the U.S. Bankruptcy Code. The Company said there is substantial doubt about its ability to continue as a going concern. The Company incurred restructuring expenses related to expenses associated with financial advisory services and related legal expenses for the quarter ended September 30, 2009, were $500,000 compared to $100,000 in the same quarter in 2008. Restructuring expense associated with financial advisory services and related legal expenses for the nine months ended September 30, 2009, were $1.4 million. The Company expects the costs to continue in future months until a recapitalization, refinancing, restructuring or reorganization of the Company's obligations or a sale of some or all of its business assets is completed. About 155 East Tropicana 155 East Tropicana, LLC, acquired the real and personal property of the Hotel San Remo Casino and Resort in Las Vegas, Nevada, in 2004. Upon acquisition, the property was renovated with a "Hooters" entertainment concept and theme and the Hotel San Remo property was reopened as the new Hooters Casino Hotel February 3, 2006. 2151 HOTEL: Files Schedules of Assets & Liabilities --------------------------------------------------- 2151 Hotel Circle South, LLC, filed with the U.S. Bankruptcy Court Central District of California its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $13,000,000 B. Personal Property $713,300 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $10,054,678 E. Creditors Holding Unsecured Priority Claims $106,895 F. Creditors Holding Unsecured Non-priority Claims $8,193,777 ----------- ----------- TOTAL $13,713,300 $18,355,350 Woodland Hills, California-based 2151 Hotel Circle South, LLC, filed for Chapter 11 on January 4, 2010 (Bankr. C.D. Calif. Case No. 10-10065). The Law Offices of Alexander Lebecki assists the Debtor in its restructuring effort. In its petition, it listed assets and liabilities both ranging from $10,000,001 to $50,000,000. ABITIBIBOWATER INC: Delaware Trustee Files Late Claim ----------------------------------------------------- Bill Rochelle at Bloomberg News reports that a Chapter 7 trustee in Delaware asked the bankruptcy judge for permission to file a late claim against AbitibiBowater Inc. According to the report, the Chapter 7 trustee for Pope & Talbot Inc. said it was "unknown" to him when Abitibi filed for reorganization in April 2009. The trustee also said he didn't know when the bankruptcy judge in Delaware set Nov. 13 as the last day for filing claims against Abitibi. The Pope & Talbot trustee, according to Bloomberg, evidently didn't learn about the bankruptcy until September when he sued Abitibi to recover an alleged $530,000 preference. The bankruptcy judge in Abitibi's case will decide at a March 23 hearing whether the Pope & Talbot trustee can file a late claim. 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 US$9,937,000,000 in total assets and US$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). About Pope & Talbot Inc. Based in Portland, Oregon, Pope & Talbot Inc. (Other OTC: PTBT.PK) -- http://www.poptal.com/-- was a pulp and wood products business. Pope & Talbot was founded in 1849 and produced market pulp and softwood lumber at mills in the U.S. and Canada. Markets for the company's products include the U.S., Europe, Canada, South America and the Pacific Rim. PricewaterhouseCoopers Inc. petitioned for Chapter 15 Bankruptcy on Aug. 22, 2008, (Bankr. D. Del. Lead Case No. 08-11933). Fourteen debtor-affiliates with pending Chapter 7 cases also filed for separate Chapter 15 petitions. Michael R. Lastowski, Esq., at Duane Morris LLP represents the Debtors in their restructuring efforts. The Debtors listed assets between $100 million and $500 million, and debts between $100 million and $500 million. On Oct. 28, 2007, the company and its U.S. and Canadian subsidiaries applied for protection under the Companies' Creditors Arrangement Act of Canada. The Debtors' CCAA Stay expired on Jan. 16, 2008. On Nov. 19, 2007, the company and 14 of its debtor-affiliates filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 07-11738). The Court converted their Chapter 11 cases to a Chapter 7 liquidation proceeding. Pope & Talbot Pulp Sales Europe, LLC, a subsidiary, on Nov. 21, 2007, filed an application for relief under Belgian bankruptcy laws in the commercial court in Brussels. ALLEN CAPITAL: Has Interim Financing Approval --------------------------------------------- Bill Rochelle at Bloomberg News reports that Allen Capital Partners LLC and subsidiary DLH Master Land Holding LLC received interim authority to borrow $250,000 on a junior lien. They also received interim permission to use rental income. The Court will consider final approval of $2.25 million in financing at a hearing on March 15. 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. San Diego, California-based Allen Capital Partners, LLC, dba The Allen Group, filed for Chapter 11 bankruptcy protection on January 25, 2010 (Bankr. N.D. Tex. Case No. 10-30562). Mark MacDonald, Esq., at MacDonald + MacDonald, P.C., assists the Company in its restructuring effort. Lain, Faulkner & Co. is the Debtor's financial advisor. The Company listed $100,000,001 to $500,000,000 in assets and $100,000,001 to $500,000,000 in liabilities in its petition. The Debtor's affiliate -- DLH Master Land Holding, LLC, dba The Allen Group -- filed a separate Chapter 11 bankruptcy petition The Chapter 11 filings were intended to stop one of the lenders from taking over the equity interest of ACP. AMERICAN AIRLINES: JAL Alliance Won't Affect S&P's 'B-' Ratings --------------------------------------------------------------- Standard & Poor's Ratings Services said that American Airlines Inc.'s (B-/Negative/--) successful retention of its marketing alliance with Japan Airlines Corp. (D/NM/--) will not affect the ratings or outlook on American. S&P views this news as a modest positive for American and parent AMR Corp. (B-/Negative/--), compared with the status quo, and it avoids what would have been a clear negative if JAL had decided to ally with Delta Air Lines Inc. The main benefit to American will come from the planned creation of an "antitrust-immune" alliance with JAL, which should boost revenues and reduce costs of the two companies. Continuation of the alliance will not involve any capital contribution from American and its oneworld alliance partners, which could have been $1.4 billion from AMR and private equity partner TPG. In December 2009, the U.S. and Japan governments signed a memorandum of understanding on a proposed revised aviation agreement that would ease access to Japan, potentially increasing competition. As part of the new agreement, the Japanese government and various airlines operating U.S.-Japan routes are seeking permission from the two governments for alliances to operate U.S.-Japan routes with antitrust immunity. The immunity allows airlines to share information and coordinate pricing, and even choose to set up joint ventures on certain routes. Delta and its SkyTeam alliance partners had also been trying to lure JAL to SkyTeam, offering a capital contribution of $1 billion. However, Delta already has a large share of the key U.S.-Tokyo Narita market (estimated at around 20%), which handles most U.S.-Japan traffic. The other major alliance, the Star Alliance, includes United Air Lines Inc. (B-/Negative/--), Japanese airline All Nippon Airways Co. Ltd. (not rated), and Continental Airlines Inc. (B/Negative/--), which combined account for an estimated 40% of the U.S.-Tokyo Narita market. These airlines applied for antitrust immunity in December 2009. S&P expects JAL and American to file for antitrust immunity later this week. S&P estimates their combined share of the U.S.-Tokyo Narita market at 39%, which includes American's estimated 15% share. If JAL had decided to join the SkyTeam alliance, S&P believes American would have been at a substantial disadvantage to potential antitrust immune joint ventures of the SkyTeam and Star alliances, having been left without a Japanese airline partner. AMERICAN INT'L: MetLife May Pay $8-Bil. in Stock for Unit --------------------------------------------------------- Emre Peker, Zachary R. Mider and Hugh Son at Bloomberg News reports three people with knowledge of the matter said MetLife Inc. may pay American International Group Inc. $8 billion in stock and the rest in cash for the planned $15 billion purchase of American Life Insurance Co. One of the sources told Bloomberg, the stock payment to AIG may include common shares and preferred stock, and that the deal would leave AIG with one of the biggest stakes in MetLife. Sources told Bloomberg some of the cash may come from a $5 billion bridge loan from banks including JPMorgan Chase & Co., Bank of America Corp., Deutsche Bank AG, and Credit Suisse Group AG. "It shows AIG needs to get a deal done, and they'd be willing to accept MetLife stock even though they'd probably prefer all cash," said Robert Haines, an analyst at CreditSights Inc. in New York, according to Bloomberg. "What AIG can't have is a complete blow- up of this deal; that would be viewed extremely negatively by the market and public." Bloomberg notes the planned price for Alico exceeds the sum of more than 20 earlier asset sales announced by AIG since its bailout in 2008. One of the sources also told Bloomberg AIG and MetLife may reach an agreement over the sale as soon as February 11. Bloomberg notes AIG previously said that $9 billion from a sale or initial public offering of Alico would go toward repaying assistance from the Federal Reserve. AIG CEO Robert Benmosche, who was previously connected with MetLife, was prohibited from participating in negotiations with MetLife. About AIG Based in New York, American International Group, Inc., is the leading international insurance organization with operation in more than 130 countries and jurisdictions. AIG companies serve commercial, institutional and individual customers through the most extensive worldwide property-casualty and life insurance networks of any insurer. In addition, AIG companies are leading providers of retirement services, financial services and asset management around the world. AIG's common stock is listed on the New York Stock Exchange, as well as the stock exchanges in Ireland and Tokyo. In September 2008, AIG experienced a liquidity crunch when its credit ratings were downgraded below "AA" levels by Standard & Poor's, Moody's Investors Service and Fitch Ratings. On September 16, 2008, the Federal Reserve Bank created an $85 billion credit facility to enable AIG to meet increased collateral obligations consequent to the ratings downgrade, in exchange for the issuance of a stock warrant to the Fed for 79.9% of the equity of AIG. The credit facility was eventually increased to as much as $182.5 billion. AIG has sold a number of its subsidiaries and other assets to pay down loans received from the U.S. government, and continues to seek buyers of its assets. AMERICAN LOCKER: Reports Net Profit for June 2009 Quarter --------------------------------------------------------- American Locker Group Incorporated recorded net profit of $105,158 on $3.04 million of net sales for the three months ended June 30, 2009, compared with a $748,746 net loss on $3.91 million of revenue for the same period a year earlier. The Company delayed its annual report on Form 10-K for the year 2008, and quarterly reports on Form 10-Q for 2009. THe Comopany said that due to the current credit crisis, it postponed the audit of its financial statements for the fiscal year ended December 31, 2008, until it could complete a restructuring of its credit facility. The Company said it has $10.26 million in total assets against $6.08 million in total liabilities, resulting to $4.18 million in stockholders' equity as of June 30, 2009. As a result of the economic crisis, the Company implemented a restructuring in January 2009 to rationalize its cost structure in an uncertain economic environment. The restructuring included the elimination of approximately 50 permanent and temporary positions as well as an across the board 10% reduction in wages and a 15% reduction in the base fee paid to members of the Company's Board of Directors. These reductions (representing approximately 40% of the Company's workforce) resulted in severance and payroll tax charges during the three and six months ended June 30, 2009 of approximately $36,000 and $264,000, respectively. These payments are expected to be made over the next 15 months. Additionally, the Company expects to incur $100,000 which has not been accrued for when it relocates its Ellicottville, New York operations to Texas in the first half of 2011. The restructuring and relocation is expected to result in approximately $1,400,000 in annual savings. To implement the restructuring plan, management anticipates incurring aggregate restructuring charges and costs of $396,000. A full-text copy of the Company's financial report on Form 10-Q is available for free at http://ResearchArchives.com/t/s?51fc About American Locker Group American Locker Group Incorporated (ALGI.PK) -- http://www.americanlocker.com/, http://www.canadianlocker.com; and http://www.securitymanufacturing.com-- is known for its proven reliability, durability and customer service. American Locker is the only locker company to operate a dedicated center to provide prompt and reliable service to their customers. American Locker is used by thousands of water parks, theme parks, ski resorts, retailers, law enforcement agencies, and health club operators around the world. According to the Troubled Company Reporter on February 27, 2009, the Company has warned that unless it is able to enter into an acceptable extension or forbearance agreement with the Bank and obtain additional financing, the Company might be forced to restructure its debts under the protection of Chapter 11 of the U.S. Bankruptcy Code. AMERICAN MEDIA: Provides Financial, Circulation Report to Lenders ----------------------------------------------------------------- American Media, Inc., has made available at its corporate Web site certain information, including the average estimated monthly circulation of certain key magazine titles during the period April 2009 through January 2010, as well as the recent levels of the Company's Revolving Credit Facility and cash balances. American Media said its Revolving Credit Facilities Balance was $35.0 million and its Cash and Equivalents was $11.3 million as of January 31, 2010. The information, which was provided to the Company's lenders, is available at no charge at: http://www.americanmediainc.com/bankinfo/Jan2010.pdf About American Media American Media, Inc. -- http://www.americanmediainc.com/-- publishes celebrity journalism and health and fitness magazines in the U.S. These include Star, Shape, Men's Fitness, Muscle & Fitness, Flex, Natural Health, and The National Enquirer. In addition to print properties, AMI owns Distribution Services, Inc., the country's #1 in-store magazine merchandising company. * * * American Media Inc.'s subsidiary, American Media Operations Inc., continues to carry Standard & Poor's Ratings Services' "CCC+" LT Foreign Issuer Credit Rating and LT Local Issuer Credit Rating; and Moody's "Caa2" LT Corporate Family Rating and "Caa2/LD" Probability of Default Rating. AMTRUST FINANCIAL: Proposes to Sell Property & Casualty Business ---------------------------------------------------------------- A unit of AmTrust Financial Corp. is seeking approval from the Bankruptcy Court to sell its property and casualty business. AmTrust proposes to sell the business to Novak Insurance Agency Inc., absent higher and better bids at an auction. Pursuant to the Agreement, AmTrust Insurance Agency, Inc., as seller, intends to transfer to Novak at a closing anticipated for immediately following a sale hearing, assets relating to the Business, including machinery and equipment, contracts and agreements of property and casualty insurance, intellectual property, and client lists. The assets to be conveyed would not include cash and premiums or commissions payable to AIAI prior to the closing. In consideration for the sale and transfer of the Assets, Novak intends to pay AIAI $450,000 at the Closing. In the event of any competing bids for the Assets, resulting in Novak not being the successful Buyer, it will receive a breakup fee of $25,000 to be paid at the time of the closing of the sale with such third party buyer. The Debtors propose a February 19 deadline for competing bids. The Debtors propose an auction on February 22 followed by a sale hearing the day after. Objections The holders, or the investment advisors or managers for the account of holders of the 11.78% Senior Notes, due October 20, 2012 issued by AmTrust Financial Corporation filed a "limited objection", asserting that that their liens are attached to the proceeds of the sale. The Debtors have challenged the validity of the grant of the security interest to the noteholders. The United States Government, on behalf of the Internal Revenue Service, says it has no objection to the sale of the assets provided that the Debtor sets aside sufficient funds to full pay any capital gains taxes that arise from the sale of the assets. At the present time the maximum capital gains tax rate is 35%. About AmTrust Financial AmTrust Financial Corp (PINK:AFNL) was the owner of the AmTrust Bank. AmTrust was the seventh-largest holder of deposits in South Florida, with $4.7 billion in deposits and 21 branches. In November 2008, the Office of Thrift Supervision issued a cease and desist order requiring AmTrust to improve its capital ratios. AmTrust Financial, together with affiliates that include AmTrust Management Inc., filed for Chapter 11 bankruptcy protection on November 30, 2009 (Bankr. N.D. Ohio Case No. 09-21323). G. Christopher Meyer, Esq., and Sherri Lynn Dahl, Esq., at Squire Sanders & Dempsey L.L.P., assist the Debtors in their restructuring efforts. AmTrust Management listed $100,000,001 to $500,000,000 in assets and $100,000,001 to $500,000,000 in liabilities. AmTrust Bank is not part of the Chapter 11 filings. On December 4, AmTrust Bank was closed by the Office of Thrift Supervision, which appointed the Federal Deposit Insurance Corporation as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with New York Community Bank, Westbury, New York, to assume all of the deposits of AmTrust Bank. ARVINMERITOR INC: Moody's Retains 'Caa1' Corporate Family Rating ---------------------------------------------------------------- Moody's Investors Service said ArvinMeritor's Caa1 Corporate Family Rating remains unchanged following the company's announcement that it entered into an amendment to its existing revolving credit agreement. The previous rating action on ArvinMeritor was on January 21, 2010, when the outlook was changed to stable from negative. ArvinMeritor, Inc., headquartered in Troy, MI, is a global supplier of a broad range of integrated systems, modules and components serving light vehicles, commercial trucks, trailers, and specialty original equipment manufacturers, as well as certain aftermarkets. Revenues in fiscal 2009 were approximately $4.1 billion. BANK OF AMERICA: S&P Assigns Negative Outlook --------------------------------------------- Standard & Poor's Ratings Services on February 9, 2010, revised its outlook on Bank of America Corp. to negative from stable. At the same time, S&P affirmed all ratings, including its 'A/A-1' counterparty credit rating and its ratings on all related entities. "The outlook revision reflects our increased uncertainty about the U.S. government's willingness to provide additional extraordinary support to highly systemically important financial institutions in a way that benefits debt holders," said Standard & Poor's credit analyst John Bartko. "We previously stated our belief that the extraordinary support was temporary. We believe markets are beginning to stabilize and the U.S. government is seeking ways to reduce the potential for moral hazard and systemic risk associated with large financial institutions." As reported by the Troubled Company Reporter, S&P on Tuesday also revised its outlook on Citigroup Inc. to negative from stable. At the same time, S&P affirmed its counterparty credit and debt ratings on Citi (A/A-1; holding company). In light of what S&P views as improved stand-alone characteristics, S&P raised the ratings on its hybrid capital issues to 'BB-' from 'B+' (excluding its preferred stock, which S&P affirmed at 'C'). According to S&P, one such effort to reduce these risks is evident in the House bill (H.R. 4173) passed in mid-December that would specifically preclude the government from company-specific bailouts, and would allow it to use public funds to assist in winding down an ailing financial institution, but only if that entity's debt holders incurred losses. The subsequently proposed Financial Crisis Responsibility Fee, which would impose a significant cost burden on the largest banks, further underscores the extent to which the political climate affects bondholders of the companies adversely. If such legislation were enacted in the form that has been proposed, it could cause S&P to revise the analytical basis S&P currently uses for imputing extraordinary government support in its ratings on BofA and other highly systemically important financial institutions. The outlook is negative. S&P's rating on BofA is enhanced, currently by three notches, to reflect the potential for additional extraordinary government support, should this be necessary. Ultimately, the counterparty credit rating and stand- alone creditworthiness may: converge at the current stand-alone credit profile level (if it became necessary to remove enhancement for government support as a rating factor and S&P saw no apparent additional improvement in BofA's stand-alone credit profile); converge at the level of the current issuer credit rating (if there were very substantial improvement in BofA's stand-alone credit profile); or wind up somewhere in between (with a combination of weaker government support and some improvement in the stand-alone credit profile). "We are uncertain whether BofA will be able to show sufficient additional improvement over the next two years in its operating performance and profitability to benefit its stand-alone credit profile and narrow the current gap between the counterparty credit rating -- which incorporates our assessment of potential extraordinary government support -- and its stand-alone creditworthiness," Mr. Bartko added. BANK OF AMERICA: Judge Rakoff Poses Questions on SEC Accord ----------------------------------------------------------- Bloomberg News reports that the judge overseeing Bank of America Corp.'s proposed $150 million settlement with the U.S. Securities and Exchange Commission posed eight questions for attorneys to answer before he decides whether to accept the deal. Four of the questions ask if the settlement should be modified to include terms proposed by U.S. District Judge Jed Rakoff. Among them is a proposal that Judge Rakoff be allowed to approve a compensation consultant for the bank. Judge Rakoff has said he will decide by Feb. 19 on whether to accept the settlement of the lawsuit by the SEC. As already reported by the TCR, the Commission on February 4 filed a motion before the U.S. District Court for the Southern District of New York seeking court approval of a proposed settlement whereby Bank of America will pay $150 million and strengthen its corporate governance and disclosure practices to settle SEC charges that the company failed to properly disclose employee bonuses and financial losses at Merrill Lynch before shareholders approved the merger of the companies in December 2008. The SEC previously filed two sets of charges alleging Bank of America failed to disclose material information to shareholders prior to their vote to approve the merger with Merrill Lynch. In the first enforcement action on Aug. 3, 2009, the Commission charged Bank of America with failing to disclose, in proxy materials soliciting shareholder votes for approval of the merger, its prior agreement authorizing Merrill to pay year-end bonuses of up to $5.8 billion to its employees prior to the closing of the merger. In the second enforcement action on Jan. 12, 2010, the Commission charged Bank of America with failing to disclose the extraordinary losses that Merrill sustained in October and November 2008. Under the terms of the proposed settlement, which are subject to the District Court's approval, the $150 million penalty will be distributed to Bank of America shareholders harmed by the Bank's alleged disclosure violations. The Commission will propose a distribution plan at a later date. About Bank of America Based in Charlotte, North Carolina, Bank of America -- http://www.bankofamerica.com/-- is one of the world's largest financial institutions, serving individual consumers, small and middle market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk-management products and services. The Company serves more than 59 million consumer and small business relationships with more than 6,100 retail banking offices, nearly 18,700 ATMs and online banking with nearly 29 million active users. Following the acquisition of Merrill Lynch on January 1, 2009, Bank of America is among the world's leading wealth management companies and is a global leader in corporate and investment banking and trading across a broad range of asset classes serving corporations, governments, institutions and individuals around the world. Bank of America offers support to more than 4 million small business owners. The Company serves clients in more than 150 countries. Bank of America Corporation stock is a component of the Dow Jones Industrial Average and is listed on the New York Stock Exchange. BofA sought government backing in completing its acquisition of Merrill Lynch. Merrill Lynch & Co. Inc. -- http://www.ml.com/-- is a wealth management, capital markets and advisory companies with offices in 40 countries and territories. * * * BofA has received US$45 billion in government bailout money since the economic collapse in 2008. As reported by the Troubled Company Reporter on March 27, 2009, Moody's Investors Service lowered the senior debt rating of Bank of America Corporation to A2 from A1, the senior subordinated debt rating to A3 from A2, and the junior subordinated debt rating to Baa3 from A2. The preferred stock rating was downgraded to B3 from Baa1. The holding company's short-term rating was affirmed at Prime-1. Bank of America reported a third-quarter 2009 net loss of $1.0 billion. BI-LO LLC: Creditors Committee Abandons Competing Plan ------------------------------------------------------ The official committee of unsecured creditors in Bi-Lo LLC's case notified the Bankruptcy Court and parties-in-interest that it is withdrawing its competing reorganization plan after term-loan lenders, the plan's co-proponents, terminated their agreement to fund the plan. According to Bill Rochelle at Bloomberg News, a hearing had been scheduled for Feb. 2 and Feb. 3 on the disclosure statement explaining the plans. The hearing has been put off until a date to be determined. The Committee Plan The Creditors' Plan was premised on two key features: first, the investment of $79.5 million in new capital by, WCM-BL Holding, LLC, and BILO Recovery, LLC, who are affiliates of members of a committee of term lenders. The second key feature of the plan is the agreement by the Term Lenders to convert approximately $100 million of their prepetition debt into equity as part of a settlement of potential litigation over the value of the Term Lenders' collateral, which could have been a costly and time- consuming process. In addition, the Creditors Plan includes a settlement of claims and a restructuring of the contractual relationship with C&S Wholesale Grocers, Inc., the Debtors' primary supplier and distributor, to provide more favorable terms and significant cost savings to BI-LO than the current C&S arrangement. As part of this settlement, C&S will receive a 5% share in the equity of Reorganized BI-LO Holding. The Term Lenders' recoveries under the Creditors Plan on account of $260 million in principal amount of secured prepetition debt will primarily consist of $164.1 million in New Term Notes and 43.1% of the equity of Reorganized BI-LO Holding. Other secured creditors will receive a 100% recovery on their claims, either through reinstatement of such claims, payment in cash, or the return of collateral. The Creditors Plan also provides for a Creditors' Trust that will be created to hold assets for distributions to unsecured creditors. Included in the trust's assets will be $30 million in cash, as well as the right to assert certain claims against third parties, if any are found to exist following appropriate investigation. These claims could include, among others, claims against Lone Star, its advisors and affiliates, and the prepetition officers and directors of the Debtors. Unsecured creditors holding claims in a "liquidated" amount of $5,000 or less, or creditors willing to reduce their claims to $5,000, will be separately treated as Class 5 Convenience Claims and will receive a recovery of 60% in cash for their claims shortly after the confirmation of the Creditors Plan. The Official Creditors' Committee estimates that claims of $5,000 and under represent approximately two-thirds of the claims filed in the chapter 11 cases. A copy of the Committee's plan is available for free at: http://bankrupt.com/misc/BILO_Panel_Plan.pdf A copy of the Committee's disclosure statement is available for free at: http://bankrupt.com/misc/BILO_Panel_DS.pdf The Company Plan Under the management-proposed plan, Lone Star will make a new $150 million equity investment and provide a $200 million term loan. Lone Star's plan would allow it to retain ownership by paying the term-loan lenders $260 million while giving unsecured creditors $30 million cash plus lawsuit recoveries from a trust. Under the Plan, unsecured creditors would recover 17.5% to 32.7%, from $30 million allocated to a creditors' trust and proceeds from causes of action. Reorganized BI-LO will retain substantially all of the store locations currently in operation, subject to the Debtors obtaining necessary rent concessions from landlords at certain underperforming locations. A copy of the Company's plan is available for free at: http://bankrupt.com/misc/BILO_Amended_Plan.pdf A copy of the Company's disclosure statement is available for free at: http://bankrupt.com/misc/BILO_Amended_DS.pdf Suit vs. Lone Star According to Bill Rochelle at Bloomberg News, the Committee contends the company plan is "unconfirmable" because it provides releases to a broad swath of insiders along with present and former owners. While the two plans on their faces appear to provide the same recovery for unsecured creditors, the Committee, in its objection last week, says the recoveries will in fact differ greatly. Under both plans, unsecured creditors are to have $30 million cash. The differences are in whom the creditors can sue after confirmation and whom they can't. The Creditors, in their plan, intend to sue Lone Star, officers and directors, the company's professionals, and others. The Committee argues that the Company's disclosure statement doesn't clearly enough explain how the right to sue is "extremely limited" under the Lone-Star sponsored plan. Lone Star, on the other hand, wants the Committee's disclosure statement to tell creditors about the offer it made to give creditors a minimum of $60 million. Lone Star says the committee "refused to negotiate." About BI-LO Headquartered in Mauldin, South Carolina, BI-LO LLC operates 214 supermarkets in South Carolina, North Carolina, Georgia and Tennessee, and employs approximately 15,500 people. Dallas-based Lone Star Funds bought the business in 2005 from Koninklijke Ahold NV, the Dutch supermarket operator. Lone Star also owns Bruno's Supermarkets LLC, a chain of 66 stores that filed under Chapter 11 in February in Birmingham, Alabama. BI-LO and its affiliates filed for Chapter 11 bankruptcy protection on March 23, 2009 (Bankr. D. S.C. Case No. 09-02140). George B. Cauthen, Esq., Frank B. Knowlton, Esq., at Nelson Mullins Riley & Scarborough, L.L.P; Josiah M. Daniel, III, Esq., Katherine D. Grissel, Esq., at Vinson & Elkins L.L.P. in Dallas; and Dov Kleiner, Esq., Alexandra S. Kelly, Esq., at Vinson & Elkins L.L.P., in New York, serve as counsel. Kurtzman Carson Consultants LLC serves as notice and claims agent. BI-LO listed between $100 million and $500 million each in assets and debts. BIGLER LP: Judge Bohm Keep a Leash on Investment-Banking Fees ------------------------------------------------------------- Bill Rochelle at Bloomberg News reports that U.S. Bankruptcy Judge Jeff Bohm in Houston approved Bigler LP's engagement of Parkman Whaling LLC as financial advisers on modified terms. The Official Committee of Unsecured Creditors objected to the retention on account of the tail fee the Parkman firm would earn if a transaction were to occur within a year after the engagement ended. According to the report, Judge Bohm, in his nine-page opinion, said he was tempted to disapprove the engagement because the tail fee could be earned, as the judge put it, even in the absence of a "tangible, identifiable, material benefit to the estate." The judge approved the engagement on terms requiring Parkman to file an application to approve the payment of fees. The court retained the right to reject payment of a tail fee if there isn't proof of benefit to the company. About Bigler LP 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. BISCAYNE BAY: Facing Involuntary Chapter 7 Petition --------------------------------------------------- Paul Brinkman at South Florida Business Journal reports that Biscayne Bay Lofts LLC, developer for a condominium project, is facing bankruptcy after a Chapter 7 petition was signed by Jeffrey Blacher on behalf of the condominium association; the association's president, Norman Wartman; and Miami-based BAP Development Group. According to the report, BAP Development makes up part of Biscayne Bay Lofts LLC, along with Gustavo Micuslitzki of Argentina-based GGM Developers. Onyx has been stuck in a foreclosure battle since May, when Corus Bank filed a foreclosure action targeting 41 unsold units in the 118-unit tower. In September, Miami-based Hyperion Development Group said one of its affiliates bought the loan from Corus just days after regulators seized the bank. The Association stated, "Onyx requires immediate funds to continue operating. Either Biscayne Bay or Hyperion control the unsold units at Onyx and should be responsible for funding the Onyx operating budget". Biscayne Bay Lofts LLC is the developer of the 28-story Onyx on the Bay condominium project in Miami. BLOCKBUSTER INC: Three Officials Step Down from Post ---------------------------------------------------- Blockbuster Inc. reported with the Securities and Exchange Commission that it was provided notice by: * Phillip K. Morrow of his resignation as the Company's Senior Vice President and Chief Information Officer effective as of the close of business on January 29, 2010; * Eric H. Peterson of his resignation as the Company's Chief Administrative Officer, Executive Vice President, Secretary and General Counsel, effective as of the close of business on February 5, 2010; * Bill R. Lee of his resignation as the Company's Executive Vice President and Chief Merchandising Officer, effective as of the close of business on February 5, 2010. About Blockbuster Inc. Dallas-based Blockbuster Inc. (NYSE: BBI, BBI.B) is a global provider of rental and retail movie and game entertainment. The Company provides its customers with convenient access to media entertainment anywhere and any way they want it -- whether in- store, by-mail, through vending and kiosks or digital download. With a highly recognized brand name and a library of over 125,000 movie and game titles, Blockbuster leverages its multi-channel presence to further build upon its leadership position in the media entertainment industry and to best serve the two million daily global customers and over 50 million annual global customers. The Company may be accessed worldwide at http://www.blockbuster.com/ As reported by the Troubled Company Reporter, Sept. 18, 2009, Standard & Poor's Ratings Services raised its corporate credit rating on Blockbuster to 'B-' from 'CCC'. The outlook is stable. The TCR on Oct. 6, 2009, said Moody's Investors Service upgraded Blockbuster's long term ratings, including its probability of default rating to 'Caa1' from 'Caa3' and its corporate family rating to 'Caa1' from 'Caa2'. The rating outlook is stable. BLOCKBUSTER INC: To File for Bankruptcy in Portugal --------------------------------------------------- Thomas Ricker at Engadget reports that Blockbuster Inc. is filing for bankruptcy in Portugal. According to the report, the company's remaining 17 stores in the country are struggling to survive. Blockbuster, the report says, blames government's flaccid response to Internet piracy for its insolvency. About Blockbuster Inc. Dallas-based Blockbuster Inc. -- http://www.blockbuster.com/-- (NYSE: BBI, BBI.B) is a global provider of rental and retail movie and game entertainment. The Company provides its customers with convenient access to media entertainment anywhere and any way they want it -- whether in-store, by-mail, through vending and kiosks or digital download. With a highly recognized brand name and a library of over 125,000 movie and game titles, Blockbuster leverages its multi-channel presence to further build upon its leadership position in the media entertainment industry and to best serve the two million daily global customers and over 50 million annual global customers. As reported by the Troubled Company Reporter, Sept. 18, 2009, Standard & Poor's Ratings Services raised its corporate credit rating on Blockbuster to 'B-' from 'CCC'. The outlook is stable. The TCR on Oct. 6, 2009, said Moody's Investors Service upgraded Blockbuster's long term ratings, including its probability of default rating to 'Caa1' from 'Caa3' and its corporate family rating to 'Caa1' from 'Caa2'. The rating outlook is stable. BONEYARD LLC: Gets OK to Sell Real Property to Lennar Homes ----------------------------------------------------------- Boneyard, LLC, obtained permission from the U.S. Bankruptcy Court for the Central District of California to sell real property. As reported by the TCR on December 23, 2009, the Debtor sought authorization from the Court to sell certain real property to Toll Bros., Inc., free and clear of interests, for $11 million. The Court has denied approval of the Toll Bros. agreement, including the payment of a break-up fee to Toll Bros., in favor of Lennar Homes of California, Inc., which presented a better offer. The Court approved the Purchase and Sale Agreement and Joint Escrow Instructions by and between the Debtor and Lennar. The approval of the sale is subject to the terms and conditions of certain "Stipulation Among Boneyard, LLC, Luckey Industrial, LLC and Pacific Western Bank re Sale of Real Property Free and Clear of Interests". The Stipulation is contingent upon: (a) the entry of orders of the bankruptcy court in Boneyard's bankruptcy case and the Luckey Case approving this Stipulation, which order in this case may be the order granting the Sale Motion; (b) the closing of the sale of the Toll Property on or before February 12, 2010, or such later date as may be agreed to by the parties to this Stipulation in writing, but in no event later than February 26, 2010. In the event that either of the conditions is not satisfied, the parties to the Stipulation will enter into a separate stipulation regarding their respective rights and remedies. Persons and entities holding Interests in the Property will be barred, estopped and permanently enjoined from asserting, prosecuting or otherwise pursuing against the Buyer, its property, its successors and assigns, its affiliates or the Property, any claim arising from the Interest. The Court determined that the sale motion wasn't served upon certain potential mechanic's lien claimants listed on the Debtor's Schedule D in accordance with Bankruptcy Rule 7004 because notice of the sale motion was mailed to the claimants as listed on the Debtor's Schedule D, rather than to the attention of an officer, a managing or general agent, or to any other agent authorized by appointment or by law to receive service of process, the sale order will be provisionally effective. The Debtor must provide notice to those claimants by January 15, 2010. Those parties will then have until January 25, 2010, within which to file legal objections to the sale motion. Barto/Signal Petroleum, Inc., filed an objection to the sale on December 30, 2009, but withdrew that objection on January 13, 2010. About Boneyard Irvine, California-based Boneyard, LLC, is a limited liability company whose sole member is Le Plastrier Management Co., Inc. Boneyard filed for Chapter 11 bankruptcy protection on Dec. 14, 2009 (Bankr. C.D. Calif. Case No. 09-23930). Richard W. Esterkin, Esq., who has an office in Los Angeles, 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. BONEYARD LLC: Taps Morgan Lewis as Bankruptcy Counsel ----------------------------------------------------- Boneyard LLC, has sought permission from the U.S. Bankruptcy court for the Central District of California to employ Morgan, Lewis & Bockius LLP as bankruptcy counsel, effective as of December 14, 2009. Morgan Lewis will, among other things: (a) represent the Debtor at hearings and other proceedings to be held before this Court, and communicating with the Debtor regarding matters heard and issues raised as well as the decisions of this Court; (b) represent the Debtor at hearings and other proceedings in Connection with any appeals that may be filed from the decisions of this Court; (c) assist the Debtor in preparing appropriate legal pleadings and proposed orders as may be required in support of positions taken by Debtor and preparing witnesses and reviewing documents relevant thereto; and (d) advise and assisting the Debtor with regard to the formulation, negotiation, proposal, and confirmation of a plan or reorganization. The hourly rates of Morgan Lewis' personnel are: Anthony Ciasulli, Partner $590 Richard W. Esterkin, Of Counsel $645 Prescott Littlefield, Associate $265 Anthony Ciasulli, a member of the law firm Morgan Lewis, assures the Court that the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Irvine, California-based Boneyard, LLC, is a limited liability company whose sole member is Le Plastrier Management Co., Inc. Boneyard filed for Chapter 11 bankruptcy protection on Dec. 14, 2009 (Bankr. C.D. Calif. Case No. 09-23930). Richard W. Esterkin, Esq., who has an office in Los Angeles, California, assists the Company in its restructuring effort. In its petition, the Company listed $10,000,001 to $50,000,000 in assets and $10,000,001 to $50,000,000 in liabilities. BOSTON SCIENTIFIC: Unveils Management Changes, Restructuring Plan ----------------------------------------------------------------- Boston Scientific Corporation unveiled Wednesday a series of management changes and restructuring initiatives designed to strengthen the Company and position it for long-term success. "The actions we are announcing [] will provide the organizational structure and leadership needed to execute our strategic plan and fulfill the enormous promise of this company," said Ray Elliott, President and Chief Executive Officer of Boston Scientific. "They are aimed at driving innovation, accelerating profitable growth and increasing both accountability and shareholder value. Above all else, they will help us better serve our customers and their patients." Key components of the management changes and restructuring initiatives include: -- The Cardiovascular Group and Cardiac Rhythm Management Group (formerly Guidant) will be combined into one, stronger and more competitive organization that will deliver better value to hospitals, better solutions to physicians and better outcomes to patients. This combined organization will also position the Company to respond more efficiently and effectively to rapidly accelerating changes in the procurement, reimbursement and regulatory environments, and to other changes in the delivery of health care globally. The new organization will be led by Hank Kucheman, who has been promoted to Executive Vice President and President of the new Cardiology, Rhythm and Vascular Group. Mr. Kucheman most recently served as President of the Cardiovascular Group. The Group will increase its focus on structural heart, disruptive, primary prevention ICDs, atrial fibrillation and hypertension. The Endovascular Unit, including Peripheral Solutions, Neurovascular, Imaging, Electrophysiology and the Canadian business unit, will report to new Senior Vice President and Executive Committee member, Joe Fitzgerald. -- Fred Colen has been promoted to the new role of Executive Vice President and Chief Technology Officer. As CTO, Mr. Colen will oversee a centralized corporate research and development group that will refocus and strengthen the Company's innovation efforts. Under Mr. Colen's leadership, the Company will change its allocation of R&D resources to incorporate its newly established growth priorities, create technology Centers of Excellence, drive improved product development timing and efficiency, and expand the spectrum of new product opportunities. Mr. Colen most recently served as President of the Cardiac Rhythm Management Group. -- The Company's International Headquarters will be eliminated. The Presidents of Japan, Europe (including a consolidated Shared Services team) and the newly formed Emerging Markets Group will report directly to the CEO. The Emerging Markets Group, composed primarily of India, China, Brazil, Russia, Eastern Europe and parts of the Middle East, Asia and Latin America, will attract greater investment and infrastructure, including the pursuit of selective offshore manufacturing, research, a variety of support services and individual country growth vehicles. Leadership for the Emerging Markets Group will be announced at a later date. -- The Endoscopy division and new Urology and Women's Health division will each report directly to the CEO, and the Endosurgery Group structure, which currently oversees the Endoscopy and Urology/Gynecology divisions, will no longer exist. The newly named Urology and Women's Health division, led by new Senior Vice President and Executive Committee member, John Pedersen, will significantly increase investment in its franchise in order to more aggressively pursue the substantial opportunities for device-related solutions for unmet women's health needs. The Endoscopy division, led by new Senior Vice President and Executive Committee member, Michael Phalen, will pursue incremental growth through devices for endoluminal surgery, obesity/diabetes solutions and pulmonary asthma. -- Steve Moreci, currently the Endosurgery Group President, will lead a newly created team devoted to Global Sales Focus. This team will drive targeted sales force expansions and deliver best practice capabilities in training, management, forecasting and planning. In particular, the team will focus on reaching the economic customer on a global basis and as a result the Company's Corporate Sales group will become part of this team. -- The Company plans to further rationalize and refocus its business portfolio through both select divestitures and acquisitions in direct support of our new strategic priorities. -- The Company will immediately begin to execute a new set of restructuring initiatives designed to improve its effectiveness and efficiency. Gross expenses are expected to be reduced by a range of $200 million to $250 million from the 2009 base during the next two years, representing a reduction of 5.5 to 7 percent. These initiatives will also result in a gross head count reduction of 1,000 to 1,300, or 8 to 10 percent, from our non direct labor base. These reductions will be partially offset by the inflationary impact of our base expenses and selective redeployment of expenses and head count into important sales and research initiatives. Eligible employees affected by these head count reductions will be offered severance packages and other assistance and support. The restructuring plan excludes manufacturing direct labor positions, which are production dependent. -- The action plans related to these reductions are expected to result in pre-tax charges of approximately $180 million to $200 million. The vast majority of the restructuring costs will be cash charges. In addition, the Company announced these management changes: -- Sam Leno will be promoted to Executive Vice President and Chief Operations Officer, effective March 1. He will oversee Finance, Information Systems, Manufacturing and Operations. Since joining Boston Scientific in 2007, Mr. Leno has served as Executive Vice President of Finance and Information Systems and Chief Financial Officer. -- Jeff Capello will be promoted to Executive Vice President and Chief Financial Officer, effective March 1. Mr. Capello joined the Company in 2008 and has served as Chief Accounting Officer and Corporate Controller. -- Tim Pratt has been promoted to Executive Vice President and Chief Administrative Officer; he will continue to serve as General Counsel and Secretary. The Company will consolidate Legal, Corporate Communications, Government Affairs, Human Resources, Quality and Regulatory Affairs under Mr. Pratt, who joined the Company in 2008. -- Jean Lance has been promoted to Senior Vice President and Chief Compliance Officer and will become a member of the Company's Executive Committee. Ms. Lance joined Boston Scientific in 1996 and was named Chief Compliance Officer last year. Prior to that she served as Vice President and General Counsel for the Company's Cardiovascular Group. She manages and enforces Boston Scientific's Global Compliance Program. -- Dan Brennan has been promoted to Senior Vice President and Corporate Controller. Mr. Brennan joined Boston Scientific in 1996. He has served in a wide variety of finance roles supporting a number of the Company's businesses. -- Larry Neumann has been promoted to Senior Vice President of Restructuring and Integration. Mr. Neumann will oversee and be accountable for all the Company's restructuring and integration activities, including the combination of the Cardiovascular Group and the Cardiac Rhythm Management Group. Mr. Neumann joined the Company in 1996 and has served in a number of capacities, including head of Corporate Tax, Business Development and Investor Relations. Andy Milani has recently been named Senior Vice President of Human Resources. Mr. Milani joined Boston Scientific in 2009 after a distinguished 28-year career as an officer in the U.S. Army, serving most recently as Chief of Staff for the Army's Special Operations Command. "These changes to date bring together an outstanding group of seasoned leaders, with a broad range of talents and abilities and a proven history of delivering results and achieving objectives," said Elliott. "The Company and all its stakeholders stand to benefit considerably from their collective knowledge, experience and expertise. These changes were, in part, designed to allow me to spend more time with our operating divisions and international regions, as we place greater emphasis on stimulating sales growth, assessing our business portfolio opportunities and expanding operating profit margins." Natick, Massachusetts-based Boston Scientific Corporation (NYSE: BSX) -- http://www.bostonscientific.com/-- is a worldwide developer, manufacturer and marketer of medical devices whose products are used in a broad range of interventional medical specialties. * * * As reported by the Troubled Company Reporter on February 3, 2010, Moody's affirmed Boston Scientific's Ba1 Corporate Family and Ba1 senior note ratings following the company's announcement that it had settled several key long-standing patent lawsuits with Johnson & Johnson for $1.725 billion. The TCR also said Fitch Ratings affirmed the Issuer Default Rating and outstanding debt ratings on Boston Scientific -- IDR at 'BB+'; Senior unsecured notes at 'BB+'; and Unsecured bank credit facility at 'BB+'. CALIFORNIA COASTAL: Dimensional Fund Owns 5.87% of Common Stock --------------------------------------------------------------- Dimensional Fund Advisors LP has filed with the Securities and Exchange Commission Amendment No. 3 to its Schedule 13-G which was initially filed on February 2, 2007. The CUSIP number of the common stock is 129915203. Dimensional Fund Advisors LP disclosed that it may be deemed to beneficially own shares of California Coastal Community Inc.'s common stock: Shares Beneficially Company Owned Percentage ------- ------------ ---------- Dimensional Fund Advisors LP 645,394 5.87% Dimensional Fund Advisors LP, an investment adviser registered under Section 203 of the Investment Advisors Act of 1940, furnishes investment advice to four investment companies registered under the Investment Company Act of 1940, and serves as investment manager to certain other commingled group trusts and separate accounts (such investment companies, trusts and accounts, collectively referred to as the "Funds"). In certain cases, subsidiaries of Dimensional Fund Advisors LP may act as an adviser or sub-adviser to certain Funds. In its role as investment advisor, sub-adviser and/or manager, neither Dimensional Fund Advisors LP or its subsidiaries possess voting and/or investment power over the securities of the Issuer that are owned by the Funds, and may be deemed to be the beneficial owner of the shares of the Issuer held by the Funds. However, all securities reported in this schedule are owned by the Funds. Dimensional Fund and its subsidiaries disclaim beneficial ownership of such securities. In addition, the filing of this Schedule 13G shall not be construed as an admission that the reporting person or any of its affiliates is the beneficial owner of any securities covered by this Schedule 13G for any other purposes than Section 13(d) of the Securities Exchange Act of 1934. A full-text copy of Dimensional Fund's amended Schedule 13G is available for free http://researcharchives.com/t/s?51f4 About California Coastal California Coastal Communities, Inc., (Nasdaq: CALC) -- http://www.californiacoastalcommunities.com/-- is a residential land development and homebuilding company operating in Southern California. The Company's principal subsidiaries are Hearthside Homes which is a homebuilding company, and Signal Landmark which owns 105 acres on the Bolsa Chica mesa where sales commenced in August 2007 at the 356-home Brightwater community. Hearthside Homes has delivered 2,200 homes to families throughout Southern California since its formation in 1994. Irvine, California-based California Coastal Communities, Inc., filed for Chapter 11 bankruptcy protection on October 27, 2009 (Bankr. C.D. Calif. Case No. 09-21712). Joshua M. Mester, Esq., who has an office in Los Angeles, California, assists the Company in its restructuring efforts. The Company listed $100,000,001 to $500,000,000 in assets and $100,000,001 to $500,000,000 in liabilities. CANOPY FINANCIAL: Authorized to Sell Assets ------------------------------------------- Bill Rochelle at Bloomberg News reports that the Chapter 7 trustee of Canopy Financial Inc. received permission early this month to sell assets including intellectual property for $3 million. Canopy sold $75 million in preferred stock in July and August. From the proceeds, $39.3 million was used to repurchase some existing common and preferred stock. Chicago-based Canopy Financial is a provider of financial processing services for the health-care industry. It filed for Chapter 11 on November 25 (Bankr. N.D. Ill. Case No. 09-44943). The petition says assets are less than $10 million while debt exceeds $50 million. At the end of the year, the Court ordered the conversion of the case to a Chapter 7 liquidation. CANWEST GLOBAL: Canwest LP Enters Into $25 Mil. Credit Pact ----------------------------------------------------------- Canwest Global Communications Corp. ("Canwest") announced that its subsidiary, Canwest Limited Partnership/Canwest Societe en Commandite and its general partner, Canwest (Canada) Inc., and their subsidiaries Canwest Publishing Inc. /Publications Canwest Inc. and Canwest Books Inc. (collectively, the "LP Entities") have entered into a senior secured super-priority debtor-in-possession ("DIP") credit agreement pursuant to which DIP financing of up to $25 million has been made available to the LP Entities in connection with their ongoing financial restructuring. This DIP financing was arranged and approved by the Ontario Superior Court of Justice (Commercial List) in January, when the LP Entities filed for creditor protection under the Companies' Creditors Arrangement Act. Since that time, the LP Entities and the DIP lenders have been negotiating the necessary agreements and other documents associated with the DIP financing. 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: LP Senior Lenders Approve Plan of Compromise ------------------------------------------------------------ Canwest Global Communications Corp's disclosed in a statement dated January 27, 2010, that senior secured lenders of its subsidiary, Canwest Limited Partnership/Canwest Societe en Commandite and certain of its subsidiaries -- the LP Entities -- voted in favor of a resolution to approve a plan of compromise or arrangement, which forms part of the support agreement entered into by the LP Entities with its senior secured lenders on January 8, 2010. The Plan was filed with the Ontario Superior Court of Justice (Commercial List) on January 8, 2010, in connection with the Initial Order granted in the LP Entities' Companies' Creditors Arrangement Act proceedings. The senior secured lenders vote met both the required majority in number of the LP Entities' senior secured lenders which cast votes on the Plan, and represented over two-thirds in amount of their claims. When the Plan was filed with the Court on January 8, it had the support of more than 48% in amount of claims. Support has increased as 153 of 157 senior secured lenders at the meeting, representing 89% of the amount of claims at the meeting, voted to approve the Plan. In accordance with the Support Agreement, the LP Entities will bring a motion before the Court seeking an order sanctioning the Plan should no superior offer emerge from the Sale and Investor Solicitation Process currently being conducted by RBC Capital Markets, financial advisor to the LP Entities. LP Entities' Plan of Compromise and Arrangement The purpose of the LP Entities' Plan of Compromise and Arrangement is to effect a compromise and arrangement of the Senior Secured Claims against the LP Entities and implement a Credit Acquisition or a Superior Cash Offer Transaction, as applicable. On the Plan Implementation Date -- which means the Credit Acquisition Plan Implementation Date or the Superior Cash Offer Plan Implementation Date, whichever occurs -- the Plan will become effective and be binding on the LP Entities and the Senior Lenders, and for greater certainty will not affect certain claims. Claims Unaffected by the Plan The Plan does not compromise or affect any Claims other than the Senior Secured Claims, which other Claims are referred to as "Unaffected Claims" and, for greater certainty, include: (a) Secured Claims (other than the Senior Secured Claims), including DIP Claims; (b) Unsecured Claims; (c) Cash Management Claims; (d) Claims of government entities including: (i) claims by Her Majesty in Right of Canada pursuant to subsections 224(1.2) and 224(1.3) of the Income Tax Act (Canada), R.S.C. 1985, c. 1 (5th Supp.) (ITA); (ii) claims pursuant to any provision of the Canada Pension Plan or the Employment Insurance Act that refers to subsection 224(1.2) of the ITA; (iii) claims pursuant to any provision of provincial legislation that has a similar purpose to subsection 224(1.2) of the ITA; (e) Claims of employees (Employee Priority Claims) as: (i) amounts equal to the amounts that employees and former employees would have been qualified to receive under paragraph 136(1)(d) of the BIA if the LP Entities had become bankrupt on the Filing Date; and (ii) claims for wages, salaries, commissions or compensation for services rendered after the Filing Date and before the Credit Acquisition Sanction Order Date or the Superior Cash Offer Sanction Order Date, whichever occurs, together with, in the case of travelling salespersons, disbursements properly incurred by them in and about the company's business during the same period; (f) Claims for the payment of any of amounts that, in respect of the period up to the Plan Implementation Date are due and remain unpaid to the funds established in respect of CCAA prescribed pension plans of the LP Entities (Pension Priority Claims): (i) an amount equal to the sum of all amounts that were deducted from the employees' remuneration for payment to the funds; (ii) if any of the CCAA prescribed pension plans is regulated by an Act of Parliament: (A) an amount equal to the normal cost, within the meaning of subsection 2(1) of the Pension Benefits Standards Regulations, 1985, that was required to be paid by the employer to the fund; and (B) an amount equal to the sum of all amounts that were required to be paid by the employer to the fund under a defined contribution provision, within the meaning of subsection 2(1) of the Pension Benefits Standards Act, 1985, and (iii) in the case of any other CCAA prescribed pension plan: (A) an amount equal to the amount that would be the normal cost, within the meaning of subsection 2(1) of the Pension Benefits Standards Regulations, 1985, that the employer would be required to pay to the fund if the prescribed plan were regulated by an Act of Parliament; and (B) an amount equal to the sum of all amounts that would have been required to be paid by the employer to the fund under a defined contribution provision, within the meaning of subsection 2(1) of the Pension Benefits Standards Act, 1985, if the prescribed plan were regulated by an Act of Parliament; and (g) Claims for any fine, penalty, restitution order or other order similar in nature to a fine, penalty or restitution order, imposed by a court in respect of an offence and any interest owed in relation thereto. Under the Plan, no holder of an Unaffected Claim will be entitled to vote on or receive any distribution in respect of the Unaffected Claim. Classification of Claims For the purpose of considering and voting upon the Plan and any entitlement to receive distributions under the Plan, there will be one Class of Senior Lenders consisting of all of the Senior Lenders and each Senior Lender will be entitled to vote upon the Plan as part of that Class in respect of its Senior Secured Claim in accordance with the Initial Order. Treatment of Unaffected Creditors (a) Payment of DIP Lenders The DIP Claims will be repaid in full by the LP Entities to the DIP Lenders on the Plan Implementation Date, or subject to obtaining the prior written consent of the DIP Lenders (i) in the case of the Credit Acquisition, assumed by Acquireco in accordance with the Acquisition and Assumption Agreement, or (ii) in the case of a Superior Cash Offer Transaction, otherwise dealt with in accordance with that consent. Acquireco refers to 7272049 Canada Inc., a corporation incorporated pursuant to the Canada Business Corporations Act, R.S.C., 1985 for the purpose of acquiring the Acquired Assets pursuant to the Acquisition and Assumption Agreement and the Plan. (b) Government Priority Claims In the case of a Credit Acquisition, the Government Priority Claims will at the election of Acquireco either be (i) paid by the LP Entities on or before the Credit Acquisition Plan Implementation Date, (ii) assumed by Acquireco on behalf of the applicable LP Entities on the Credit Acquisition Plan Implementation Date, or (iii) paid in full by the Monitor from the Cash Reserve to Her Majesty in right of Canada or the applicable province when due and, in any event, within six months after the Credit Acquisition Sanction Order Date. In the case of a Superior Cash Offer Transaction, the Government Priority Claims will either be (i) paid by the LP Entities on or before the Plan Implementation Date, or (ii) other arrangements satisfactory to the Court will be made for the payment in full of the Government Priority Claims to Her Majesty in right of Canada or the applicable province when due and, in any event, within six months after the Superior Cash Offer Sanction Order Date. (c) Employee Priority Claims In the case of a Credit Acquisition, at the election of Acquireco, Employee Priority Claims will either be (i) paid by the LP Entities on or before the Credit Acquisition Sanction Order Date, or (ii) paid immediately after the Credit Acquisition Sanction Order Date from funds set aside for that purpose on terms satisfactory to the Court on or before the date. In the case of a Superior Cash Offer Transaction, the Employee Priority Claims will either be (i) paid by the LP Entities on or before the Superior Cash Offer Sanction Order Date, or (ii) paid immediately after the Superior Cash Offer Sanction Order Date from funds set aside for that purpose on terms satisfactory to the Court on or before the date. (d) Pension Priority Claims In the case of a Credit Acquisition, at the election of Acquireco either (i) Pension Priority Claims will be paid by the LP Entities on or before the Credit Acquisition Plan Implementation Date, (ii) assumed by Acquireco on behalf of the applicable LP Entities on the Credit Acquisition Plan Implementation Date, (iii) paid in full by the Monitor from the Cash Reserve on or following the Credit Acquisition Plan Implementation Date, or (iv) other arrangements satisfactory to the Court will be made for payment in full of the Pension Priority Claims on or following the Credit Acquisition Plan Implementation Date. In the case of a Superior Cash Offer Transaction, either Pension Priority Claims will either be paid (i) by the LP Entities on or before the Superior Cash Offer Plan Implementation Date, or (ii) immediately after the Superior Cash Offer Plan Implementation Date from funds set aside for that purpose on terms satisfactory to the Court on or before the date. (e) Prior Ranking Secured Claims In the case of a Credit Acquisition, at the election of Acquireco either (i) Prior Ranking Secured Claims will be paid by the LP Entities on or before the Credit Acquisition Plan Implementation Date, (ii) Prior Ranking Secured Claims will be assumed by Acquireco on behalf of the applicable LP Entities on the Credit Acquisition Plan Implementation Date, or (iii) arrangements satisfactory to the Court will be made for the property subject to security in respect of the Prior Ranking Secured Claim to be released to the holder of the Prior Ranking Secured Claim on or after the Plan Implementation Date. In the case of a Superior Cash Offer Transaction, either (i) Prior Ranking Secured Claims will be paid by the LP Entities on or before the Superior Cash Offer Plan Implementation Date, (ii) the property subject to security in respect of Prior Ranking Secured Claim will be released to the holder of the Prior Ranking Secured Claim on or after the Plan Implementation Date, or (iii) other arrangements satisfactory to the Court will be made for the payment of the Prior Ranking Secured Claims. (f) Cash Management Claims In the case of a Credit Acquisition, at the election of Acquireco either (i) Cash Management Claims will be assumed by Acquireco on behalf of the applicable LP Entities, or (ii) other arrangements satisfactory to the Administrative Agent will be made for the payment in full of the Cash Management Claims. In the case of a Superior Cash Offer Transaction, arrangements satisfactory to the Administrative Agent will be made for the payment in full of the Cash Management Claims on the Superior Cash Offer Plan Implementation Date. Treatment of Senior Lenders On the Plan Implementation Date, the treatment of Senior Secured Claims under the Plan will be final and binding on the LP Entities and all Senior Lenders. (a) Voting Each Senior Lender will be entitled to vote to the extent that its Senior Secured Claim is an Accepted Senior Voting Claim on the second Business Day immediately prior to the date of the Senior Lenders Meeting. None of the LP Entities will be entitled to vote on the Plan. (b) Exchange of Senior Secured Claims On and after the Credit Acquisition Plan Implementation Date, each Senior Lender will be entitled to receive Acquireco Debt and Acquireco Equity in accordance with the Acquireco Capitalization Term Sheet on account of its Proven Senior Secured Claim, with Unpaid Interest either paid on the Plan Implementation Date or assumed by Acquireco. Each Senior Lender will be entitled to receive its Pro Rata Share of the Reference Amount in repayment of its Senior Secured Claim. The Acquireco Capitalization Term Sheet contains the confidential Summary of Terms and Conditions for the Initial Capitalization of Acquireco that is posted as of the Filing Date on the IntraLinks site established by the Administrative Agent solely for that purpose for the Senior Lenders. (c) Repayment of Senior Secured Claims On and after the Superior Cash Offer Plan Implementation Date, each Senior Lender will be entitled to receive its Pro Rata Share of the Reference Amount in repayment of its Senior Secured Claim. (d) Unresolved Senior Claims Reserve The Monitor will establish the Unresolved Senior Claims Reserve on the Plan Implementation Date. In the case of a Credit Acquisition: (a) the Unresolved Senior Claims Reserve will be comprised of Acquireco Debt, Acquireco Equity and cash reserved out of the LP Entity Cash and Cash Equivalents; (b) the aggregate value of the Acquireco Debt and Acquireco Equity to be included in the Unresolved Senior Claims Reserve will be equal to the value of Acquireco Debt and Acquireco Equity that would have been distributed in respect of the Unresolved Senior Claims if the full amounts of the Unresolved Senior Claims were Proven Senior Secured Claims on the Credit Acquisition Plan Implementation Date; (c) the aggregate amount of the cash to be included in the Unresolved Senior Claims Reserve will be equal to the amount of all Unpaid Interest on Unresolved Senior Claims as of the Credit Acquisition Plan Implementation Date that would have been paid to the Senior Lenders holding the Unresolved Senior Claims if the full amounts of the Unresolved Senior Claims were Proven Senior Secured Claims on the Credit Acquisition Plan Implementation Date; and (d) not later than 15 days following the Final Determination Date, the Monitor will distribute from the Unresolved Senior Claims Reserve to the Persons entitled in accordance with the Plan and the Acquireco Capitalization Term Sheet Acquireco Debt and Acquireco Equity in respect of any Senior Secured Claims that were Unresolved Senior Claims. Following the distribution, any balance of Acquireco Debt and Acquireco Equity that forms part of the Unresolved Senior Claims Reserve will be distributed to the Persons entitled in accordance with the Plan and the Acquireco Capitalization Term Sheet that all Acquireco Debt and Acquireco Equity will have been distributed in accordance with the Plan and the Acquireco Capitalization Term Sheet. Any interest, distributions or other payments actually received by the Monitor will be distributed to the Persons receiving the applicable Acquireco Debt or Acquireco Equity in an amount equal to the aggregate amount of all Unpaid Interest on Senior Secured Claims that were Unresolved Senior Claims on the Credit Acquisition Plan Implementation Date that subsequently became Proven Senior Secured Claims. Any balance of cash that forms part of the Unresolved Senior Claims Reserve together with any interest actually received by the Monitor will be paid to Acquireco; and In the case of a Superior Cash Offer Transaction: (a) the Unresolved Senior Claims Reserve will be comprised of cash in the amount that would have been paid to the Senior Lenders holding Unresolved Senior Claims if the full amount of all Unresolved Senior Claims were Proven Senior Secured Claims on the Plan Implementation Date; and (b) not later than 15 days following the Final Determination Date, the Monitor will distribute from the Unresolved Senior Claims Reserve cash plus any interest actually received by the Monitor, to those Senior Lenders whose Unresolved Senior Claims are determined to be Proven Senior Secured Claims after the Plan Implementation Date, following which distribution, any balance of the cash, together with any interest actually received by the Monitor will be paid to the LP Entities or as otherwise directed in the Superior Cash Offer Sanction Order. Credit Acquisition In the event that the Plan is accepted by the Senior Lenders, on the Credit Acquisition Sanction Order Trigger Date, the LP Entities, and The Bank of Nova Scotia, as Administrative Agent for the Senior Lenders under the Senior Credit Agreement, acting in consultation with the Steering Committee may apply for the Credit Acquisition Sanction Order. The Senior Credit Agreement is the Credit Agreement dated as of July 10, 2007, between CanWest MediaWorks Limited Partnership, as Borrower, the Guarantors party thereto from time to time, as Guarantors, the Lenders party thereto from time to time as Lenders and the Administrative Agent on behalf of the Lenders. The Credit Acquisition Sanction Order Trigger Date is the earliest to occur of these events: (i) the determination that the Sale and Investor Solicitation Process will not proceed to Phase 2, (ii) the determination by the Monitor in accordance with the SISP that it will be unable to obtain a Successful Bid by the Phase 2 Bid Deadline, (iii) no Qualified Bid is received by the Phase 2 Bid Deadline that constitutes a Superior Offer, and (iv) no Superior Offer results in the completion of a transaction on or before the date that is 60 days following the Phase 2 Bid Deadline. A Credit Acquisition Sanction Order refers to an order approving the transactions contemplated in the Acquisition and Assumption Agreement, (ii) sanctioning the Plan pursuant to the provisions of the CCAA, (iii) vesting in CPI all of the right, title and interest in and to the Canwest Books Assets, Canwest GP Assets and CLP Assets, (iv) vesting in Acquireco all right, title and interest in and to the Senior Secured Claims and the Senior Security, (v) vesting in Acquireco all right, title and interest in and to the Acquired Assets, and (vi) vesting in Acquireco any amounts in the Cash Reserve Account that are not used by the Monitor to pay Cash Reserve Costs in accordance with the Cash Reserve Order. The implementation of the Credit Acquisition is conditional, among others, upon the fulfillment or satisfaction of these conditions, on or before June 30, 2010, as the date may be extended from time to time by the Administrative Agent: (a) the Credit Acquisition Sanction Order will have been made and be in form and substance satisfactory to the Administrative Agent, acting in consultation with the Steering Committee and will have become a Final Order; (c) there will be outstanding no order or decree restraining or enjoining the consummation of the transactions contemplated by the Plan; (d) all amounts secured by charges created by the Initial Order will have been paid by the LP Entities or assumed by Acquireco or provision acceptable to the Court, therefore, will have been made by way of the Cash Reserve; (e) each condition in favor of the LP Entities pursuant to the Acquisition and Assumption Agreement between Acquireco and the LP Entities will have been fulfilled or performed or have been waived by the LP Entities; (f) the LP Entities will have complied with all of their obligations under the Initial Order and the Support Agreement or the requirement to comply with the obligations will have been waived by the Administrative Agent acting in consultation with the Steering Committee; and (g) each condition in favor of Acquireco pursuant to the Acquisition and Assumption Agreement will have been fulfilled or performed or have been waived by Acquireco in its discretion. Superior Cash Offer Transaction In the event that the Plan is accepted by the Class in accordance with Section 7.2 and a Superior Cash Offer is received and is to be closed not later than 60 days after the Phase 2 Bid Deadline, the LP Entities will apply for the Superior Cash Offer Sanction Order and not the Credit Acquisition Sanction Order. A Superior Cash Offer Sanction Order would mean an order in form and substance satisfactory to the Administrative Agent, acting in consultation with the Steering Committee, (i) approving the Superior Cash Offer Transaction, (ii) sanctioning the Plan pursuant to the provisions of the CCAA, and (iii) approving the distribution to and acceptance by the Senior Lenders of the Reference Amount calculated as of the Plan Implementation Date in full and final satisfaction of the Senior Secured Claims. The implementation of a Superior Cash Offer Transaction is conditional upon, among others, the fulfillment of these conditions within 60 days after the Phase 2 Bid Deadline, or longer period as permitted pursuant to the Sale and Investor Solicitation Process: (a) the Superior Cash Offer Sanction Order will have been made and will have become a Final Order; (b) there will be outstanding no order or decree restraining or enjoining the confirmation of the transactions contemplated by the Plan; (c) the Administrative Agent will have received, or escrow arrangements satisfactory to the Administrative Agent will have been made to ensure that it receives on the Superior Cash Offer Plan Implementation Date, from or on behalf of the LP Entities in immediately available funds an amount equal to the aggregate amount of all Implementation Senior Secured Claim Amounts plus Unpaid Interest plus all Administrative Agent Claims less the Discount Amount for distribution to the Senior Lenders in indefeasible repayment in full of the Senior Secured Claims in accordance with the terms of the Senior Credit Agreement, the Hedging Agreements and the Collateral Agency Agreement; and (d) the Monitor will have received, or escrow arrangements satisfactory to the Administrative Agent will have been made to ensure that the Monitor receives, from or on behalf of the LP Entities in immediately available funds an amount equal to the amount of the Unresolved Senior Claims Reserve. Plan Administration Subject to the provisions of the Plan, the Monitor will, after the Plan Implementation Date, continue to exercise the powers and authorities previously granted to the Monitor by the Court or pursuant to the CCAA. After the Credit Acquisition Plan Implementation Date, no material decisions or steps will be taken by the Monitor in respect of the administration of the Cash Reserve or the Unresolved Senior Claims Reserve without obtaining either the prior written consent of the Administrative Agent in consultation with the Steering Committee or prior approval of the Court on notice to the Administrative Agent. The Monitor will establish the Cash Reserve on the Credit Acquisition Plan Implementation Date in accordance with the Cash Reserve Order. From time to time, after the Credit Acquisition Plan Implementation Date, the Monitor may (i) pay from the Cash Reserve the Cash Reserve Costs, and (ii) reduce the amount of the Cash Reserve as and to the extent it is no longer required to satisfy the Cash Reserve Costs by distributing to Acquireco, the amount of the reductions, in each case in accordance with the Cash Reserve Order. Any residual balance in the Cash Reserve after the payment of the Cash Reserve Costs will be an asset of and owned by Acquireco. A full-text copy of the Plan is available for free at http://bankrupt.com/misc/LPEntities_PlanofCompromise.pdf About Canwest Global Canwest Global Communications Corp. (TSX: CGS and CGS.A) -- http://www.canwest.com/-- an international media company, is Canada's largest media company. In addition to owning the Global Television Network, Canwest is Canada's largest publisher of English language daily newspapers and owns, operates and holds substantial interests in conventional television, out-of-home advertising, specialty cable channels, web sites and radio stations and networks in Canada, New Zealand, Australia, Turkey, Indonesia, Singapore, the United Kingdom and the United States. On October 6, 2009, Canwest Global, Canwest Media Inc., Canwest Television Limited Partnership (including Global Television, MovieTime, DejaView and Fox Sports World), The National Post Company and certain subsidiaries voluntarily entered into, and successfully obtained an Order from the Ontario Superior Court of Justice (Commercial Division) commencing proceedings under the Companies' Creditors Arrangement Act. The CMI Entities' commencement of these proceedings was undertaken in furtherance of a proposed recapitalization transaction that is supported by over 70% of holders of the 8% senior subordinated notes issued by CMI. On the same day, FTI Consulting Canada Inc., the Court-appointed Monitor in the CCAA proceedings, sought protection in the United States Bankruptcy Court under Chapter 15 of the United States Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No. 09-15994) for certain of the entities involved in Canwest's television business that filed for protection under the CCAA, including Canwest, Canwest Media Inc. and Canwest Global Broadcasting Inc./Radiodiffusion Canwest Global Inc. Judge Stuart M. Bernstein presides over the Chapter 15 cases. Evan D. Flaschen, Esq., at Bracewell & Giuliani LLP, in Hartford, Connecticut, serves as Chapter 15 Petitioner's counsel. The Chapter 15 Debtors disclosed estimated assets of $500 million to $1 billion and estimated debts of $50 million to $100 million. In a regulatory filing with the U.S. Securities and Exchange Commission, Canwest Media disclosed C$4,847,020,000 in total assets and C$5,826,522,000 in total liabilities at May 31, 2009. Bankruptcy Creditors' Service, Inc., publishes Canwest Bankruptcy News. The newsletter tracks the CCAA proceedings and Chapter 15 proceedings undertaken by Canwest Global Communications Corp. and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000). CANWEST GLOBAL: Noteholders Extend Approval Date for Plan --------------------------------------------------------- Canwest Global Communications Corp ("Canwest" or the "Company") announced it has agreed with the members of the ad hoc committee of 8% senior subordinated noteholders (the "Ad Hoc Committee") of Canwest Media Inc ("CMI") to extend to March 26, 2010, the date by which a recapitalization plan of the Company, CMI and certain of their subsidiaries must be approved by creditors under the terms of the Support Agreement and the Use of Cash Collateral and Consent Agreement. The previous deadline to receive creditor approval was January 30, 2010. The Company also announced that CIT Business Credit Canada Inc. has agreed to a corresponding amendment of the terms of the credit facility agreement (the "CIT Credit Agreement") pursuant to which debtor-in-possession financing has been provided to Canwest in connection with its ongoing restructuring. As previously disclosed, Canwest is required to file a consensual recapitalization plan with the Ontario Superior Court of Justice (Commercial Division) no later than the twenty-first day prior to the meeting of the creditors to be called for approval of the plan. The terms of the amended Support Agreement, the Use of Cash Collateral and Consent Agreement and the CIT Credit Agreement continue to contemplate successful implementation of the recapitalization plan by April 15, 2010. The extension of the date for creditor approval of the plan provides Canwest with additional time to develop, in consultation with the members of the Ad Hoc Committee, a comprehensive plan for an orderly and structured recapitalization for the benefit of all of the Company's stakeholders. About Canwest Global Canwest Global Communications Corp. (TSX: CGS and CGS.A) -- http://www.canwest.com/-- an international media company, is Canada's largest media company. In addition to owning the Global Television Network, Canwest is Canada's largest publisher of English language daily newspapers and owns, operates and holds substantial interests in conventional television, out-of-home advertising, specialty cable channels, web sites and radio stations and networks in Canada, New Zealand, Australia, Turkey, Indonesia, Singapore, the United Kingdom and the United States. On October 6, 2009, Canwest Global, Canwest Media Inc., Canwest Television Limited Partnership (including Global Television, MovieTime, DejaView and Fox Sports World), The National Post Company and certain subsidiaries voluntarily entered into, and successfully obtained an Order from the Ontario Superior Court of Justice (Commercial Division) commencing proceedings under the Companies' Creditors Arrangement Act. The CMI Entities' commencement of these proceedings was undertaken in furtherance of a proposed recapitalization transaction that is supported by over 70% of holders of the 8% senior subordinated notes issued by CMI. On the same day, FTI Consulting Canada Inc., the Court-appointed Monitor in the CCAA proceedings, sought protection in the United States Bankruptcy Court under Chapter 15 of the United States Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No. 09-15994) for certain of the entities involved in Canwest's television business that filed for protection under the CCAA, including Canwest, Canwest Media Inc. and Canwest Global Broadcasting Inc./Radiodiffusion Canwest Global Inc. Judge Stuart M. Bernstein presides over the Chapter 15 cases. Evan D. Flaschen, Esq., at Bracewell & Giuliani LLP, in Hartford, Connecticut, serves as Chapter 15 Petitioner's counsel. The Chapter 15 Debtors disclosed estimated assets of $500 million to $1 billion and estimated debts of $50 million to $100 million. In a regulatory filing with the U.S. Securities and Exchange Commission, Canwest Media disclosed C$4,847,020,000 in total assets and C$5,826,522,000 in total liabilities at May 31, 2009. Bankruptcy Creditors' Service, Inc., publishes Canwest Bankruptcy News. The newsletter tracks the CCAA proceedings and Chapter 15 proceedings undertaken by Canwest Global Communications Corp. and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000). CCS MEDICAL: Second Confirmation Hearing Set for March 11 --------------------------------------------------------- CCS Medical Inc. will present another reorganization plan for confirmation at a hearing on March 11. Objections to CCS Medical's plan are due March 5. Deadline to submit ballots on the Plan is also on March 5. Bill Rochelle at Bloomberg News reports that the new plan contemplates an auction, which deals with the valuation problem that caused the failure of CCS's prepackaged plan of reorganization. The auction is to take place February 15. If the auction brings a cash price of more than $295 million, the successful bidder can buy either the stock or the assets. If the best price is less than $295 million, the first-lien lenders owed $349 million have the option of going ahead with the sale at the lower price or confirming a stand-alone plan where they will exchange their debt for all the new equity plus $200 million in new debt. According to the report, second-lien lenders, owed $113 million, don't stand to see a recovery unless the sale price is enough to pay off senior lenders. Lenders holding $83 million in secured subordinated pay-in-kind notes also aren't likely to see a distribution. If there is no sale and the senior lenders end up as owners, they will make a gift so that unsecured creditors with $9.1 million in claims will recover 2.4 percent. A copy of CCS Medical's Second Amended Plan is available for free at http://bankrupt.com/misc/CCS_2ndAmended_Plan.pdf CCS Medical negotiated a plan before the Chapter 11 filing in July that would have converted $350 million of first-lien debt into all of the new stock and $200 million in new notes. The projected recovery on the first-lien claims was between 66% and 82%. Second lien-lenders and other lower ranked creditors won't receive anything. However, the holders of $110 million in second-lien debt persuaded the bankruptcy judge not to approve that plan during confirmation hearings in October. The judge decided that the Debtor had failed to prove the Company was worth less than $350 million, and thereby justifying wiping out all creditors aside from the first-lien lenders. Under the Court-approved auction, the deadline for qualified parties to submit qualifying bids was February 8, 2010 at 4:00 p.m. (EST). If qualifying bids are received, an auction will take place on February 15, 2010, at the offices of the Company's legal counsel Willkie Farr & Gallagher LLP in New York. A hearing to approve the sale would then occur on February 17, 2010. About CCS Medical Founded in 1994, CCS Medical Inc. -- http://www.ccsmed.com/-- has become a leading provider of medical supplies. CCS Medical assists patients that need diabetes test strips, insulin pumps, urological supplies, ostomy supplies, advanced wound care dressings and prescription drugs. Clear Water, Florida-based CCS Medical specializes in providing a convenient way for patients to receive supplies for their chronic illnesses in a manner that saves them time and money. CCS Medical, along with its affiliates, filed for Chapter 11 on July 8, 2009 (Bankr. D. Del. Case No. 09-12390). At the time of the filing, CCS Medical said that it had assets of $100 million to $500 million against debts of $500 million to $1 billion. Attorneys at Young Conaway Stargatt & Taylor, LLP, represent the Debtors. Willkie Farr & Gallagher LLP serves as co-counsel to the Debtors. Goldman, Sachs & Co., serves as investment banker and Alvarez & Marsal Healthcare Industry Group, LLC, as restructuring advisor. Epiq Bankruptcy Solutions LLC is claims agent. CELL THERAPEUTICS: Decreases Net Loss by 42% in 2009 ---------------------------------------------------- Cell Therapeutics, Inc., on Thursday reported accomplishments and financial results for the fourth quarter and year ended December 31, 2009. For the quarter ended December 31, 2009, total net operating expenses were approximately $26.2 million, compared to $11.2 million for the same period in 2008. The increase in total net operating expenses was mainly a result of a non-cash equity based compensation expense of $11.7 million for the quarter ended December 31, 2009, and a $9.4 million gain on the sale of Zevalin to a 50/50 owned joint venture with Spectrum that was recognized in the quarter ended December 31, 2008. Research and development expenses decreased by 15% to $7.3 million compared to $8.6 million for the same period in 2008. Net loss attributable to common shareholders decreased by 34% to $27.4 million ($0.05 per share), compared to a net loss attributable to common shareholders of $41.3 million ($0.52 per share) for the same period in 2008. The decrease in net loss for the quarter ended December 31, 2009, is mainly a result of the decrease in expenses associated with financings for the quarter ended December 31, 2009, compared to the expenses associated with financings incurred in the same period in 2008. For the year ended December 31, 2009, total net operating expenses decreased to $81.6 million, compared to $88.7 million for the same period in 2008. Research and development expenses decreased by 42% to $30.2 million compared to $51.6 million for the same period in 2008. Net loss attributable to common shareholders decreased 42% to $116.8 million ($0.25 per share), compared to a net loss attributable to shareholders of $202.9 million ($7.00 per share) for the same period in 2008. The decrease in net loss for the year ended December, 31, 2009, compared to the same period in 2008 is mainly the result of a decrease in research and development expenses and expenses associated with financings. As of December 31, 2009, CTI had approximately $37.8 million in cash, cash equivalents and securities available-for-sale; negative working capital of $21.6 million; total assets of $69.6 million; convertible debt of $62.1 million; accumulated deficit of $1.42 billion; and shareholders' deficit of $18.8 million. This does not include approximately $28.2 million in net proceeds, the Company received in January 2010 in connection with a registered offering of preferred stock and warrants. Review of 2009 Key Accomplishments and Targeted 2010 Milestones -- Pixantrone New Drug Application for relapsed/refractory aggressive non-Hodgkin's lymphoma filed with the U.S. Food and Drug Administration and accepted for review in 2009. The FDA established Prescription Drug User Fee Act (PDUFA) date of April 23, 2010. -- Initiated a Marketing Authorization Application for pixantrone in Europe in 2009 and received Orphan Drug Designation by the European Medicines Agency. CTI expects to file a Marketing Authorization Application in mid-2010. -- Phase II clinical data on OPAXIO demonstrated high rates of pathologic complete remissions for treatment of patients with advanced esophageal cancer paving way for potential registration trial as radiation sensitizer. CTI expects to meet with the FDA in the first half of 2010 to discuss a potential registration trial for OPAXIO as a radiation sensitizer. -- Decreased debt in 2009 by $57.4 million through exchanges and eliminated all of outstanding preferred stock. -- Added in 2009 to the Russell 2000, 3000 and Global Indices as well as the Nasdaq Global Biotechnology Index. -- Adopted Shareholder Rights Plan designed to deter coercive takeover tactics, and to prevent an acquirer from gaining control of CTI without offering a fair price to all of CTI's shareholders. -- Received net proceeds of $136 million in 2009 through sale of Zevalin and investments by institutions to fund operations and decrease debt. "In 2009 we focused on streamlining our operations, improving our balance sheet and supporting our late stage product to position us for the potential commercialization of a CTI product," stated James A. Bianco, M.D., CEO of CTI. "We look forward to presenting the benefit-risk pixantrone data to the Oncologic Drugs Advisory Committee at the meeting which is being rescheduled especially in light of the completion of the updated study overall survival results." About Cell Therapeutics Headquartered in Seattle, Cell Therapeutics, Inc. (NASDAQ and MTA: CTIC) -- http://www.CellTherapeutics.com/-- is a biopharmaceutical company that develops an integrated portfolio of oncology products aimed at making cancer more treatable. Subsequent to the closure of its Bresso, Italy operations in September 2009, CTI's operations are conducted solely in the United States. Bankruptcy Warning In its Form 10-Q report for the period ended September 30, 2009, filed with the Securities and Exchange Commission, the Company warned it does not expect it will have sufficient cash to fund planned operations through the second quarter of 2010, which raises substantial doubt about its ability to continue as a going concern. The Company said 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. CHRYSLER LLC: 35 Ex-Dealers Seek to Restore Franchises ------------------------------------------------------ Thirty-five terminated dealers of Chrysler Group LLC in Minnesota sought immediate reinstatement of their franchises through federal binding arbitration, according to a report by Star Tribune. "Dealers fought hard for these arbitration proceedings to happen and are grateful to Congress for acting on their concerns. I am confident that we will be successful," Star Tribune quoted Scott Lambert, executive vice-president of Minnesota Automobile Dealers Association, as saying. The move came following the passage of a bill in December 2009 which gives dealers of Chrysler Group and another bankrupt auto maker, General Motors Corp., a chance to challenge or reconsider prior decisions to close the dealers. It establishes a binding arbitration process to determine whether dealerships ought to be reinstated. Chrysler Group terminated 789 dealers as part of the sale of its assets to Italy-based auto maker Fiat S.p.A. while GM indicated it would terminate about 2,000 underperforming dealers by October of this year. Mr. Lambert cautioned MADA members during a meeting that arbitration is a "stressful and expensive process." "Dealers and the manufacturers will spend millions if each arbitration is played out. It strikes us as ultimately a waste of time, energy and money," Star Tribune quoted Mr. Lambert as saying. The association did not release names of dealers who applied for arbitration. Chrysler group, in a January 28 statement, announced that 409 dealers whose contracts were rejected have filed for arbitration as of January 27, and that it is readying itself to actively participate in the process. "The company looks forward to the expeditious completion of the process. A robust dealer network is a critical component of Chrysler Group's strategy of rebuilding a strong and resilient American automaker," the statement said. 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: Ex-Dealers First In Line for New Franchises --------------------------------------------------------- Former dealers of Chrysler Group LLC in Colorado who were stripped of their franchises following the automaker's bankruptcy would have right of first refusal to get them back under a bill recently approved by a state House of Representatives committee, according to a report by Denver Business Journal. HB 1049, which was approved unanimously by the committee, would require auto makers that want to reopen an area franchise to offer it to the former dealer for 10 years from the day their franchise agreements were terminated. The auto makers would also be required to reimburse the dealers for any facility upgrades that they made in the five years before they were closed down for insolvency reasons, Denver Business Journal reported. Chrysler terminated 789 dealers last year as part of the sale of its assets to Italy-based auto maker Fiat S.p.A. Geoff Blue, Colorado's deputy attorney general for legal policy, said that his office believes HB 1049 is constitutional and is willing to defend it in court if the state is sued by the auto makers, according to the report. So far, four states have passed bills similar to Colorado's. Chrysler is appealing those laws to a bankruptcy court, saying that requiring it to offer back franchises is inconsistent with the bankruptcy court's order which authorized the rejection of its contracts with the dealers. 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: Jones Day Charges $5.9 Mil. for Sept.-Dec. -------------------------------------------------------- Professionals retained in connection with the Debtors' bankruptcy cases filed applications for payment of fees and reimbursement of expenses for the specified period: Professional Applicable Period Fees Expenses ------------ ----------------- ---- -------- Schulte Roth & 09/01 to 12/31/09 $30,468 $6,609 Zabel LLP Cahill Gordon & 09/01 to 12/31/09 236,940 3,567 Reindel LLP Kramer Levin 09/01 to 12/31/09 640,804 43,589 Naftalis & Frankel LLP Mesirow Financial 09/01 to 12/31/09 148,046 0 Consulting LLC Jones Day 09/01 to 12/31/09 5,946,182 137,229 Capstone Advisory 09/01 to 12/31/09 3,479,643 286,163 Group LLC Togut Segal & Segal 09/01 to 12/31/09 544,998 1,724 LLP In a separate filing, Togut Segal notified the Court that effective as of January 1, 2010, its standard hourly rate are: Partners $800 to $935 Associates & counsel $275 to $720 Paralegals & law clerks $185 to $285 For December 2009 alone, Togut Segal seek $78,766 in fees and reimbursement of expenses incurred totaling $381. Jones Day also notified the Court that it has revised its standard hourly rates effective as of January 1. A table identifying each Jones Day professional's current hourly rate and the prior hourly rate before the Rate Changes is available for free at http://bankrupt.com/misc/ChrysJD01rates.pdf The Court will conduct a hearing on February 18, 2010 to consider certain of the Professionals' interim fee applications. 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: Mercedes-Benz Objects to Sale of Equipment -------------------------------------------------------- Eric Morath at Dow Jones' Daily Bankruptcy Review reports that Mercedes-Benz is objecting to Chrysler LLC's bid to sell off some specialized equipment from a hybrid vehicle laboratory that it once shared with Mercedes. Old Chrysler is seeking to sell the equipment, which is used for the development of prototype hybrid engines -- along with supplies and spare parts found in several vacated facilities, to New Chrysler. Dow Jones says Mercedes contends the equipment is not Chrysler's to sell. Mercedes says it owns the devices and that Chrysler has no right to them. Mercedes wants the equipment removed from the sale so that it can continue to negotiate a settlement to its dispute with the Debtors. Dow Jones says Mercedes told Chrysler not bother looking for testing and development equipment at the old lab. Dow Jones says Mercedes indicated the equipment has been moved to a Mercedes new hybrid development center, 25 miles away. 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) Dow Jones notes both auto makers formerly operated under the Daimler umbrella. Dow Jones also relates both automakers have been fighting over the equipment since Chrysler left the Troy, Michigan, facility a few months before it filed for Chapter 11 protection. CIT GROUP: Taxpayers' $2.3-Bil. Stake Wiped Out, Treasury Says -------------------------------------------------------------- According to Meena Thiruvengadam at The Wall Street Journal, a U.S. Treasury report released Wednesday said U.S. taxpayers' $2.3 billion stake in CIT Group Inc. has officially been wiped out. The Treasury extended financing to CIT from the Troubled Asset Relief Program in December 2008. CIT winded up in Chapter 11 bankruptcy roughly 11 months later. Citing Linda Shen at Bloomberg News, the Troubled Company Reporter on February 9, 2010, said CIT disclosed that the U.S. Treasury doesn't have a stake in the company anymore. "While the U.S. Treasury no longer has an investment in CIT, we are generally endeavoring to apply Treasury governance best practices," CIT spokesman Curt Ritter said in an e-mailed statement to Bloomberg News. Bloomberg noted that the Treasury said in a filing earlier this month that it still held "contingent value rights," which CIT had distributed to preferred shareholders as part of its bankruptcy reorganization. On February 9, CIT said that since the terms for distribution of common shares to holders of its Contingent Value Rights were not met as of the February 8, 2010 Measurement Date, they have expired without value. According to the Journal, despite the CIT Group loss, which was expected, and other likely taxpayer losses, the Treasury expects the cost of TARP will continue to fall from the current level, of just under $120 billion. The Treasury is expecting its losses on financial-sector rescue efforts to largely stem from aid provided to domestic auto makers, American International Group and government sponsored enterprises Fannie Mae and Freddie Mac. "If Congress joins the President in adopting a Financial Crisis Responsibility Fee, Americans will not have to pay one cent for TARP," Treasury Secretary Timothy Geithner said in a statement released on Wednesday, according to the Journal. About CIT Group CIT Group Inc. (NYSE: CIT) -- http://www.cit.com/-- is a bank holding company with more than $60 billion in finance and leasing assets that provides financial products and advisory services to small and middle market businesses. Operating in more than 50 countries across 30 industries, CIT provides an unparalleled combination of relationship, intellectual and financial capital to its customers worldwide. CIT maintains leadership positions in small business and middle market lending, retail finance, aerospace, equipment and rail leasing, and vendor finance. Founded in 1908 and headquartered in New York City, CIT is a member of the Fortune 500. CIT Group Inc. and affiliate CIT Group Funding Company of Delaware LLC announced a Chapter 11 filing on November 1, 2009 (Bankr. S.D.N.Y. Case No. 09-16565). Evercore Partners, Morgan Stanley and FTI Consulting are the Company's financial advisors and Skadden, Arps, Slate, Meagher & Flom LLP is legal counsel in connection with the restructuring plan. Sullivan & Cromwell is legal advisor to CIT's Board of Directors. CIT Group on November 1 announced that, with the overwhelming support of its debtholders, the Board of Directors voted to proceed with the prepackaged plan of reorganization for CIT Group Inc. and a subsidiary that will restructure the Company's debt and streamline its capital structure. None of CIT's operating subsidiaries, including CIT Bank, a Utah state bank, were included in the filings. On December 8, the Court confirmed the Debtors' prepackaged plan. On December 11, CIT emerged from bankruptcy. CITADEL BROADCASTING: Cash Collateral Hearing Moved to March 3 -------------------------------------------------------------- The final hearing to consider approval of Citadel Broadcasting Corp.'s request for authority to use Cash Collateral has been adjourned to March 3, 2010. The objection deadline with respect to the Cash Collateral Motion has been extended solely for the statutory committee of unsecured creditors appointed in the Chapter 11 cases to February 24, 2010, at 5:00 p.m. (ET). Prior to the adjournment of the hearing, the Debtors filed a copy of a 13-Week Cash Flow Forecast ending March 19, 2010, a full- text copy of which is available for free at: http://bankrupt.com/misc/Ctdl13wkCflow.pdf About Citadel Broadcasting Citadel Broadcasting Corporation (OTC BB: CTDB) -- http://www.citadelbroadcasting.com/-- is the third largest radio group in the United States, with a national footprint reaching more than 50 markets. Citadel is comprised of 166 FM stations and 58 AM stations in the nation's leading markets, in addition to Citadel Media, which is one of the three largest radio networks in the United States. Citadel Broadcasting filed for Chapter 11 with 50 affiliates on Dec. 20, 2009, in Manhattan (Bankr. S.D.N.Y. Case No. 09-17422). The Company listed assets of $1.4 billion and debt of $2.5 billion in its Chapter 11 filing. Kirkland & Ellis LLP is serving as legal counsel and Lazard Freres & Co. LLC. As financial advisor for the restructuring. Kurtzman Carson Consultants is serving as claims and notice agent. Bankruptcy Creditors' Service, Inc., publishes Citadel Broadcasting Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Citadel Broadcasting Corp. and other affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CITADEL BROADCASTING: Gets Final Nod to Pay Station Affiliates -------------------------------------------------------------- The Bankruptcy Court has issued a final order authorizing Citadel Broadcasting Corp. and its units to pay or honor prepetition claims and obligations due and owing to the Debtors' "On-Air Talent and Station Affiliates" in the ordinary course of their operations, provided that the Debtors will not pay an amount aggregating in excess of $10,000,000 on account of Talent Obligations, Affiliate Obligations and Programming Obligations, without conferring with the U.S. Trustee and the Official Committee of Unsecured Creditors. To recall, the Debtors asked the Court to expand the relief granted in the Interim Talent and Affiliate Order to include the authority to pay prepetition amounts that are owing to producers of certain programming that is essential to the Debtors' generation of revenues and operational success. The approximate amount of the Programming Obligations that the Debtors asked permission to pay was $250,000. About Citadel Broadcasting Citadel Broadcasting Corporation (OTC BB: CTDB) -- http://www.citadelbroadcasting.com/-- is the third largest radio group in the United States, with a national footprint reaching more than 50 markets. Citadel is comprised of 166 FM stations and 58 AM stations in the nation's leading markets, in addition to Citadel Media, which is one of the three largest radio networks in the United States. Citadel Broadcasting filed for Chapter 11 with 50 affiliates on Dec. 20, 2009, in Manhattan (Bankr. S.D.N.Y. Case No. 09-17422). The Company listed assets of $1.4 billion and debt of $2.5 billion in its Chapter 11 filing. Kirkland & Ellis LLP is serving as legal counsel and Lazard Freres & Co. LLC. As financial advisor for the restructuring. Kurtzman Carson Consultants is serving as claims and notice agent. Bankruptcy Creditors' Service, Inc., publishes Citadel Broadcasting Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Citadel Broadcasting Corp. and other affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CITADEL BROADCASTING: Sec. 341 Meeting Set for February 22 ---------------------------------------------------------- A meeting of the creditors of Citadel Broadcasting Corporation and its debtor-affiliates has been scheduled for February 22, 2010, at 02:00 p.m. (EST). The meeting will be held at the office of the U.S. Trustee located at 80 Broad Street, 4th Floor, in New York. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in the Debtors' bankruptcy cases. Attendance by the Debtors' creditors at the meeting is welcome, but not required. The Sec. 341(a) meeting offers the creditors a one-time opportunity to examine the Debtors' representative under oath about the Debtors' financial affairs and operations that would be of interest to the general body of creditors. About Citadel Broadcasting Citadel Broadcasting Corporation (OTC BB: CTDB) -- http://www.citadelbroadcasting.com/-- is the third largest radio group in the United States, with a national footprint reaching more than 50 markets. Citadel is comprised of 166 FM stations and 58 AM stations in the nation's leading markets, in addition to Citadel Media, which is one of the three largest radio networks in the United States. Citadel Broadcasting filed for Chapter 11 with 50 affiliates on Dec. 20, 2009, in Manhattan (Bankr. S.D.N.Y. Case No. 09-17422). The Company listed assets of $1.4 billion and debt of $2.5 billion in its Chapter 11 filing. Kirkland & Ellis LLP is serving as legal counsel and Lazard Freres & Co. LLC. As financial advisor for the restructuring. Kurtzman Carson Consultants is serving as claims and notice agent. Bankruptcy Creditors' Service, Inc., publishes Citadel Broadcasting Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Citadel Broadcasting Corp. and other affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CITIGROUP INC: Barclays to Acquire Italian Credit Card Business --------------------------------------------------------------- Barclays Bank PLC has agreed to acquire the Italian credit card business of Citibank International Bank plc. Barclays will acquire the business as a going concern which involves the acquisition of approximately 197,000 credit card accounts and gross assets of approximately EUR234 million (as at December 31, 2009), of which substantially all relate to receivables. Barclays intends to integrate the Business and its employees into its existing Barclays Italy business, which is part of Global Retail and Commercial Banking - Western Europe division. Over time, Barclays intends to rebrand the acquired credit cards with its global Barclaycard brand. Completion is subject to customary conditions, including competition clearance and completion of the mandatory consultation procedure with Unions. This is expected to occur in the first quarter of 2010. Leo Salom, Chief Executive of Barclays Global Retail and Commercial Banking - Western Europe, said, "This acquisition provides Barclays with the perfect opportunity to grow and develop further our cards business in Italy. The deal will create significant scale for continued growth and development". About Barclays PLC Barclays -- http://www.barclays.com/-- is a major global financial services provider engaged in retail and corporate banking, credit cards, investment banking, wealth management and investment management services, with an extensive international presence in Europe, the Americas, Africa and Asia. With over 300 years of history and expertise in banking, Barclays operates in over 50 countries and employs over 145,000 people. Barclays moves, lends, invests and protects money for more than 49 million customers and clients worldwide. About Barclays Italy Barclays has been present in Italy since 1990 through Woolwich, Barclays mortgage arm. Since the establishment of retail operations three years ago, Barclays has hired over 1,000 employees and now operates through a network of more than 200 branches, 100 financial shops and with over 400 sales agents. Barclays continues to pursue growth and additional hiring in Italy. About Citigroup Based in New York, Citigroup Inc. (NYSE: C) -- is a global diversified financial services holding company whose businesses provide a broad range of financial services to consumer and corporate customers. Citigroup has roughly 200 million customer accounts and does business in more than 140 countries. Citigroup's businesses are aligned in three reporting segments: (i) Citicorp, which consists of Regional Consumer Banking (in North America, EMEA, Asia, and Latin America) and the Institutional Clients Group (Securities and Banking, including the Private Bank, and Transaction Services); (ii) Citi Holdings, which consists of Brokerage and Asset Management, Local Consumer Lending, and a Special Asset Pool; and (iii) Corporate/Other. As reported in the Troubled Company Reporter on November 25, 2008, the U.S. government entered into an agreement with Citigroup to provide a package of guarantees, liquidity access, and capital. The U.S. Treasury and the Federal Deposit Insurance Corporation agreed to provide protection against the possibility of unusually large losses on an asset pool of roughly $306 billion of loans and securities backed by residential and commercial real estate and other such assets, which will remain on Citigroup's balance sheet. As a fee for this arrangement, Citigroup issued preferred shares to the Treasury and FDIC. The Federal Reserve agreed to backstop residual risk in the asset pool through a non-recourse loan. Citigroup, the third-biggest U.S. bank, received $45 billion in bailout aid. Other bailed-out banks, including Bank of America Corp., Wells Fargo & Co., have pledged to repay TARP money. JPMorgan Chase & Co., Goldman Sachs Group Inc. and Morgan Stanley, repaid TARP funds in June. Citigroup is selling assets to repay the bailout funds. Citigroup is one of the banks that, according to results of the government's stress test, need more capital. COEUR D'ALENE: Provides More Info. on $100-Mil. Notes Offering -------------------------------------------------------------- Coeur d'Alene Mines Corporation filed certain exhibits in connection with its public offering of $100,000,000 aggregate principal amount of its Senior Term Notes due December 31, 2012, and a number of shares of common stock of the Company equal to $3,750,000 divided by 90% of the average of the four lowest daily volume weighted average prices of the shares of common stock of the Company during the ten trading days commencing February 8, 2010. On February 5, 2010, the Company filed, pursuant to Rule 424(b) under the Securities Act, a prospectus supplement, dated February 5, 2010, relating to the public offering of the Shares and the Notes. Settlement of the Shares is expected to occur on or around February 23, 2010. The Company issued and sold the Notes on February 5, 2010. The Notes were issued under an indenture, dated as of February 5, 2010, between the Company and The Bank of New York Mellon, as trustee, as supplemented by a first supplemental indenture, dated as of February 5, 2010, among the Company and the Trustee. On August 31, 2009, Coeur d'Alene Mines Corporation filed an automatically effective registration statement on Form S-3 with the Securities and Exchange Commission, relating to the public offering, pursuant to Rule 415 under the Securities Act of 1933, as amended, of an unlimited amount of common stock, preferred stock, debt securities, warrants, depositary shares, purchase contracts, guarantees and units of the Company. All amounts due under the notes may be paid in cash, shares of the Company's common stock, or a combination of cash and shares of the Company's common stock. The stated rate of interest on the Notes is 6.5%, but payments made under the notes will be computed to give effect to recent share prices. Shares issued in payment of amounts due under the notes will be valued at 90% of the average of the four lowest daily volume weighted average prices of the Company's common stock over a ten trading day period ending shortly before the payment date. Up to 50% of any payment may be paid in cash without any adjustment to give effect to share prices. If the cash portion of any payment exceeds 50%, then the excess cash amount will be paid in an amount equal to the market value of the number of shares that would have been issued for the excess amount if the Company had paid the excess amount in common stock. Principal and interest on the Notes are payable quarterly on March 31, June 30, September 30 and December 31 of each year, beginning on March 31, 2010. The Notes mature on December 31, 2012, unless earlier redeemed or repurchased by the Company. The Notes are unsecured. The Shares and the Notes were sold pursuant to a Securities Purchase Agreement among the Company, Sonoma Capital Offshore, Ltd., Sonoma Capital, L.P., Manchester Securities Corp, JGB Capital L.P., JGB Capital Offshore Ltd. and SAMC LLC dated as of February 5, 2010. The closing of the sale of the Shares and the Notes occurred on February 5, 2010. The net proceeds payable from the offering of the Shares and the Notes, after deducting fees and expenses, were approximately $99.5 million and will be used for general corporate purposes. A full-text copy of the senior debt securities indenture is available for free at http://ResearchArchives.com/t/s?5221 About Coeur d'Alene Mines Coeur d'Alene Mines Corporation (NYSE:CDE, TSX:CDM, ASX:CXC) is one of the world's leading silver companies and also a significant gold producer. Coeur common shares are traded on the New York Stock Exchange under the symbol CDE, the Toronto Stock Exchange under the symbol CDM, and its CHESS Depositary Interests are traded on the Australian Securities Exchange under symbol CXC. At September 30, 2009, the Company had $3,059,759,000 in total assets, including cash and cash equivalents of $45,603,000; against $193,341,000 in total current liabilities and $888,959,000 in total long-term liabilities. At September 30, 2009, the Company had accumulated deficit of $419,574,000 and stockholders' equity of $1,977,459,000. Coeur d'Alene Mines had $402.2 million in accumulated deficit as of June 30, 2009. As reported by the Troubled Company Reporter on August 11, 2009, Standard & Poor's Ratings Services raised its corporate credit rating on Coeur D'Alene Mines to 'B-' from 'CCC' and raised the ratings on the company's $180 million senior unsecured notes due 2024 ($106 million outstanding) and $230 million senior unsecured notes due 2028 ($150 million outstanding) to 'CCC+' from 'CCC-'. The recovery rating on the notes remains unchanged at '5'. S&P removed the corporate credit and issue-level ratings from CreditWatch, where they were placed with positive implications on May 18, 2009. The outlook is positive. COHARIE HOG: Bankr. Administrator Says Panel Wants to Be Disbanded ------------------------------------------------------------------ Marjorie K. Lynch, the Bankruptcy Administrator for the Eastern District of North Carolina, recommended that the U.S. Bankruptcy Court terminate the official committee of unsecured creditors in the Chapter 11 cases of Coharie Hog Farm, Inc. The Bankruptcy Administrator related that: -- the members of the Committee communicated that they no longer wish to remain members of the Committee; and -- no further creditors of the Debtor have expressed interest in participating in the Committee. Clinton, North Carolina based Coharie Hog Farm, Inc., says it has been one of the largest swine producers in the U.S., supplying more than 500,000 hogs a year to a plant operated by Smithfield Foods Inc. It produced more than 140 million pounds of pork annually. The closely held operation has six storage facilities with 3.9 million bushels of capacity. The business used more than 100 contract farmers to raise hogs for market. Anne Faircloth owns 75% of the Company and Nelson Waters owns the remaining quarter. Coharie Hog Farm filed for Chapter 11 on Nov. 6, 2009 (Bankr. E.D. N.C. Case No. 09-09737). Terri L. Gardner, Esq., at Nelson Mullins Riley & Scarborough, LLP, represents the Debtor in its Chapter 11 effort. The petition says assets and debts range from $10,000,001 to $50,000,000. COHARIE HOG: Gets Final Okay to Use Cash Collateral --------------------------------------------------- Coharie Hog Farm, Inc., obtained final authorization from the Hon. J. Rich Leonard of the U.S. Bankruptcy Court for the Eastern District of North Carolina to use the cash collateral of Cape Fear Farm Credit, ACA, through June 15, 2010. As reported by the TCR on December 7, 2009, the Debtor asked the Court to hold the final hearing on the use of the cash collateral on December 15, 2009, at 11:00 a.m., in Raleigh, North Carolina. The final hearing was scheduled for November 30, 2009. The Court had approved, on an interim basis the Debtor's use of cash collateral securing the prepetition loans from CFFC through the week ending November 30, 2009, and also approved a $1.5 million postpetition loan from CFFC to shore up the Debtor's cash needs during the first weeks of operation in Chapter 11. All post-petition collections will be deposited into a deposit account (the DIP Account) maintained with BB&T upon which CFFC will have a senior lien which will be deemed perfected and valid against the Debtor, any trustee and all creditors without the need for further action by CFFC or the Court, and the lien will survive conversion to Chapter 7 and will be deemed perfected as against competing interests. BB&T agreed to recognize CFFC's first priority adequate protection lien and accept direction from CFFC with respect to the funds in the accounts without further orders from the Court. All interests of BB&T with respect to the funds will be subordinate to the adequate protection lien. Post- petition expenses will be funded out of the DIP Account in accordance with the budget, a copy of which is available for free at http://bankrupt.com/misc/COHARIE_HOG_budget.pdf CFFC will be adequately protected by the feeding, care and sale of its collateral in an orderly manner with only those expenses incurred that are needed to effectuate the liquidation in a prompt manner. CFFC will have a replacement and adequate protection of CFFC's secured claim on all present and after-acquired personal and real property of the Debtor. CFFC will have an administrative expense claim with priority over other administrative claims. The Debtor will provide CFFC financial statements and reports. Clinton, North Carolina based Coharie Hog Farm, Inc., says it has been one of the largest swine producers in the U.S., supplying more than 500,000 hogs a year to a plant operated by Smithfield Foods Inc. It produced more than 140 million pounds of pork annually. The closely held operation has six storage facilities with 3.9 million bushels of capacity. The business used more than 100 contract farmers to raise hogs for market. Anne Faircloth owns 75% of the Company and Nelson Waters owns the remaining quarter. Coharie Hog Farm filed for Chapter 11 on Nov. 6, 2009 (Bankr. E.D. N.C. Case No. 09-09737). Terri L. Gardner, Esq., at Nelson Mullins Riley & Scarborough, LLP, represents the Debtor in its Chapter 11 effort. The petition says assets and debts range from $10,000,001 to $50,000,000. CONSECO INC: Columbia Wanger Beneficially Owns 10% of Common Stock ------------------------------------------------------------------ Columbia Wanger Asset Management, L.P., has filed with the Securities and Exchange Commission Amendment No. 4 to its Schedule 13-G which was initially filed on January 22, 2008. The CUSIP Number of the common stock is 208464883. Columbia Wanger Asset Management, L.P. disclosed that it may be deemed to beneficially own shares of Conseco inc's common stock: Shares Beneficially Company Owned Percentage ------- ------------ ---------- Columbia Wanger Asset Management, L.P. 25,139,000 10.0% The shares reported herein include shares held by Columbia Acorn Trust (CAT), a Massachusetts business trust that is advised by the reporing person. CAT holds 9.11% of the shares of Conseco Inc. A full-text copy of the amended Schedule 13-G is available at no charge at http://researcharchives.com/t/s?5245 About Conseco Inc. Headquartered in Carmel, Indiana, Conseco Inc. (NYSE: CNO) -- http://www.conseco.com/-- is the holding company for a group of insurance companies operating throughout the United States that develop, market and administer supplemental health insurance, annuity, individual life insurance and other insurance products. The company became the successor to Conseco Inc. (Old Conseco), in connection with its bankruptcy reorganization. CNO focuses on serving the senior and middle-income markets. The company sells its products through three distribution channels: career agents, professional independent producers and direct marketing. CNO operates through its segments, which includes Bankers Life, Conseco Insurance Group, Colonial Penn, other business in run-off and corporate operations. * * * Moody's Investors Service has affirmed the ratings of Conseco, Inc. (senior bank facility at Caa1) and its insurance subsidiaries (insurance financial strength at Ba2) and changed the outlook to positive from negative. Standard & Poor's Ratings Services said that it affirmed its 'CCC' counterparty credit rating on Conseco Inc. and the 'BB-' financial strength ratings on Conseco's insurance subsidiaries. S&P revised the outlook to stable from negative. In December, S&P placed its 'CCC' counterparty credit rating on Conseco Inc. on CreditWatch with positive implications, "to reflect Conseco's significantly improved financial flexibility." CRESCENT RESOURCES: Wants Bonus Program for Workers and Execs. -------------------------------------------------------------- Crescent Resources LLC is seeking approval from the Bankruptcy Court of a $4 million bonus program for all of its 218 employees in which $3.5 million is earmarked for executives. Bonuses for each participant will be capped at the lesser of $500,000 or twice an executive's base salary. Payment of the bonuses, if approved by the bankruptcy judge at a Feb. 19 hearing, will depend on whether the company meets cash-flow targets. Crescent Resources, LLC -- http://www.crescent-resources.com/-- is a land management and real estate development company with interests in 10 states in the southeastern and southwestern United States. Crescent Resources is a joint venture between Duke Energy and Morgan Stanley Real Estate Fund. Established in 1969, Crescent creates mixed-use developments, country club communities, single-family neighborhoods, apartment and condominium communities, Class A office space, business and industrial parks and shopping centers. Crescent Resources, LLC, and its debtor-affiliates filed for Chapter 11 protection on June 10, 2009, with the U.S. Bankruptcy Court for the Western District of Texas (Austin), lead case number 09-11507, before Judge Craig A. Gargotta. Eric J. Taube, Esq., at Hohmann, Taube & Summers, L.L.P., is serves as the Debtors' bankruptcy counsel. CROWN HOLDINGS: Fitch Affirms Issuer Default Rating at 'BB-' ------------------------------------------------------------ Fitch Ratings has affirmed the ratings for Crown Holdings, Inc., and its subsidiaries Crown Cork & Seal Company, Inc., Crown Americas, LLC, and Crown European Holdings, SA: Crown -- Issuer Default Rating at 'BB-'. CCS -- IDR at 'BB-'; -- Senior unsecured notes at 'B+'. CA -- IDR at 'BB-'; -- Senior secured dollar term facility at 'BBB-'; -- Senior secured dollar revolving facility at 'BBB-'; -- Senior unsecured notes at 'BB-'. CEH -- IDR at 'BB-'; -- Senior secured euro term facility at 'BBB-'; -- Senior secured euro revolving facility at 'BBB-'; -- Senior secured euro 1st priority notes at 'BBB-' . The Rating Outlook has been revised to Positive from Stable. The ratings affirmation of Crown reflects the stability in the company's cash flows despite a challenging economic environment that pressured volumes in certain segments although cost containment measures, including restructuring and price increases, have led to continued profitability improvements. Fitch also believes the geographical diversification across both mature and emerging markets with a diverse customer mix results in a more balanced revenue stream that lends greater stability through economic cycles. In addition, Crown's credit profile has strengthened through debt repayment, an improved maturity profile and increased liquidity that has resulted in leverage and interest coverage improvements. Fitch further expects Crown's operational prospects and credit profile to strengthen during 2010. As a result, the Outlook has been revised to Positive. Adjusted leverage (including accounts receivable securitization and lease expense) at the end of 2009 was 3.3 times compared with 3.7x at the end of 2008. Based upon its strengths, Fitch believes Crown is well-positioned to sustain operating free cash flow levels. Free cash flow for 2009 was $489 million (including minority interest distributions) and incorporated a material positive component from working capital. Other cash obligations included pension contributions of $74 million and asbestos payments of $26 million that should continue at similar levels for 2010. Crown also paid $87 million in minority interests distributions associated with the company's joint venture beverage can operations that likely should be of comparable nature in 2010. Fitch believes that it's reasonable that underlying volume demand should continue to recover in 2010 and result in growth compared to 2009 as the company additionally benefits from new capacity coming on line thus driving revenue growth. Consequently, with expectations for stable profitability, Fitch anticipates at least modest growth in EBITDA for 2010. Expectations are for the company to use a significant portion of its free cash flow in 2010 for further debt reduction with the company likely focusing on its near-term maturities (2011 and 2013) or potentially reducing outstandings under its accounts receivable securitization program. With the company nearing its net leverage goal of 2.0x or less, Fitch expects the company will consider using some excess cash for shareholder based initiatives like share repurchases. Crown has a $500 million share repurchase program that expires at the end of 2010 with $467 million of availability. With the improvement in its credit profile and considerable free cash generation, Crown certainly has capacity to consider acquisitions, but Fitch believes any acquisition would likely be of smaller size as opportunities for a larger acquisition appear limited at this time. By the end of 2010, Fitch expects adjusted leverage in the range of 2.7-2.9x. Crown's liquidity is good, in excess of $1 billion, with $459 million of cash and $758 million under its revolving credit facility less $84 million of outstanding letters of credit and $113 million drawn on the revolver. In addition, the company has capacity under its securitization program, which totaled $232 million at the end of 2009. Crown has a committed $225 million North American and Euro120 million European securitization facilities, which mature in March 2010 and June 2010, respectively. Crown's secured revolving credit facilities mature in May 2011. Fitch expects Crown to address the maturities with its accounts receivable program and the credit facility in the next couple of quarters. As a result of past deleveraging and cash flow growth, Crown currently has a considerable cushion under its covenants, and Fitch believes the company should be able to maintain ample cushion even though the covenants tightened at the end of 2009. Current maturities are relatively modest during the next two years. During 2009, Crown improved its maturity profile by reducing its 2011 maturity in excess of $400 million, its 2013 maturity by $300 million and by extending $400 million of debt maturities through 2017. As a result, Crown now has $229 million outstanding on its first lien secured notes due in September 2011. Crown also has $354 million U.S. secured term loan and $388 million European secured term loan due November 2012. The term loans are prepayable without penalty although the company has chosen not to reduce the amount outstanding in the past due to its attractive interest rate and has paid down other higher cost debt. Crown could also consider a Eurobond issuance to extend maturities further and increase its mix of foreign debt given the majority of the company's revenues is outside of the U.S. DELTA AIR: JAL Unsuccessful Bid Won't Affect S&P's 'B' Ratings -------------------------------------------------------------- Standard & Poor's Ratings Services said that Delta Air Lines Inc.'s (B/Negative/--) unsuccessful bid for Japan Airlines Corp. (D/NM/--) to enter into a marketing alliance with Delta and its SkyTeam alliance partners will not affect the ratings on the company. On Feb. 9, 2010, JAL announced that it would remain in the oneworld alliance, which includes American Airlines Inc. (B- /Negative/--). S&P views this news as a modest negative for Delta, compared with the status quo. While Delta already has a substantial market share (estimated at 20%) in the key U.S.-Tokyo Narita market, S&P expects additional competition if the U.S. and Japanese governments approve antitrust immunity for other alliances. In December 2009, the U.S. and Japan governments signed a memorandum of understanding on a proposed revised aviation agreement that would ease access to Japan, potentially increasing competition. As part of the new agreement, the Japanese government and various airlines operating U.S.-Japan routes are seeking permission from the two governments to operate U.S.-Japan routes with antitrust immunity. The immunity allows airlines to share information and coordinate pricing and even choose to set up joint ventures on certain routes. The oneworld alliance, and Delta and its SkyTeam alliance partners, had been competing to ally with JAL and seek regulatory permission for antitrust immunity. The two alliances at one point offered capital contributions of at least $1 billion to JAL to aid in its financial restructuring. Delta already has a large share of the key U.S.-Tokyo Narita Airport market, which handles most U.S.-Japan traffic. The other major alliances are oneworld (estimated 39% share) and the Star Alliance, which includes United Air Lines Inc. (B-/Negative/--), Japanese airline All Nippon Airways Co. Ltd. (not rated), and Continental Airlines Inc. (B/Negative/--), which combined account for an estimated 40% of the U.S.-Tokyo Narita market. These airlines applied for antitrust immunity in December 2009. S&P expects JAL and American to file for antitrust immunity later this week. S&P also expects Delta to maintain a significant share in the U.S.-Japan market, but if government regulators approve antitrust alliances, S&P foresees additional competition for Delta. DENNY HECKER: Indicted on Conspiracy, Fraud and Money Laundering ---------------------------------------------------------------- Amy Forliti, Associated Press Writer in Minneapolis, Minnesota, reports that Denny Hecker was indicted Wednesday on seven counts of federal conspiracy, fraud and money laundering charges in an alleged scheme -- from September 2007 through at least June 2009 -- to defraud lenders and others of millions. AP says a former executive in Mr. Hecker's company, Steven Joseph Leach, was also charged with one count of conspiracy to commit wire fraud and five counts of wire fraud. According to AP, Marsh Halberg, Esq., Mr. Hecker's counsel, said Wednesday that Mr. Hecker maintains his innocence. Mr. Hecker was scheduled to make his first court appearance Thursday. Meanwhile, MaryJo Webster at TwinCities.com Pioneer Press reports that Randall Seaver, the bankruptcy trustee appointed to oversee the liquidation of Mr. Hecker's estate, on Friday made public an e-mail exchange between Mr. Hecker and Monroe Summers of Aspen, Colorado, who claims to have some of Mr. Hecker's assets in a storage unit. According to Pioneer Press, the first e-mail, dated October 16, 2009, from Mr. Summers asked Mr. Hecker and his girlfriend, Christi Rowan, when he will be reimbursed the $6,637 he has spent "to pay the storage on your possessions." The e-mail warned that that if the payment is not made soon, "I will be forced to notify the Bankruptcy Trustee that I have access to some of your assets." According to Pioneer Press, Mr. Hecker responded on October 20, saying he would send the check by the end of that week. "As you can understand things suck here," Mr. Hecker wrote. "I am sorry your time and energy hasn't been appreciated more." According to Pioneer Press, Bill Skolnick, Esq., Mr. Hecker's lawyer, said Friday that his client reported all the assets in his bankruptcy filings last summer. Pioneer Press says Mr. Seaver submitted the e-mails as part of a motion seeking permission to force Mr. Summers to turn over documents relating to the assets, including a full accounting of the items he has held since May 1, copies of checks or other forms of payment and correspondence with Mr. Hecker or Ms. Rowan. About Denny Hecker Denny Hecker filed for Chapter 7 bankruptcy on June 4, 2009, before the U.S. Bankruptcy Court for the District of Minnesota. Mr. Hecker listed $18 million in assets and $767 million in debts owed to automakers, lenders, business partners and former employees. According to the Star Tribune in Minneapolis-St. Paul, the bankruptcy filing had been widely anticipated. Star Tribune noted Mr. Hecker has been forced to sell or close 25 of his 26 dealerships in recent months, and Chrysler Financial won a $477 million court judgment against him in April. The bankruptcy filing temporarily halted efforts by Chrysler and other creditors from collecting money they say they are owed. The Troubled Company Reporter on November 20 said Bankruptcy Judge Robert Kressel held Mr. Hecker in contempt of court for failing to turn over his financial records in a timely manner. William R. Skolnick, Esq., at Skolnick & Shiff, P.A., in Minneapolis, represents Mr. Hecker. DESTINATION MATERNITY: S&P Raises Corporate Credit Rating to 'B' ---------------------------------------------------------------- Standard & Poor's Ratings Services said that it raised its corporate credit rating on Philadelphia-based Destination Maternity Corp. to 'B' from 'B-'. The outlook is stable. At the same time, S&P raised the issue-level rating on the company's $90 million term loan to 'BB-' from 'B' and revised the recovery rating to '1', indicating S&P's expectation for very high (90%-100%) recovery in the event of a payment default, from '2'. "The upgrade reflects the on-going margin improvement, which has contributed to a substantial increase in EBITDA year over year," said Standard & Poor's credit analyst David M. Kuntz. "This EBITDA growth, coupled with moderate amounts of debt repayment, has resulted in sufficient improvement in the company's credit protection metrics to warrant an upgrade." The ratings on Destination Maternity reflect the high business risk associated with its participation in the narrowly defined and intensely competitive maternity segment of the apparel retailing industry, weak top-line performance, and credit metrics that offer only fair protection. The stable outlook reflects S&P's expectation that Destination Maternity's performance is likely to remain in-line with recent historical levels. Although the company has repaid a fair amount of debt of the past few years, S&P does not believe there will be much more incremental benefit if the company continues to do so. S&P expects revenues to remain weak due to negative same store sales, but margins gains should hold over the near term as benefits from the restructuring initiatives offset negative operating leverage. Furthermore, S&P expects the company's liquidity to remain adequate and covenant cushions to grow as a result of lower funded debt levels. S&P would consider upgrading the rating if the company was able to reverse its trend of negative same store sales and realize meaningful benefits from its Sears and Kmart re-launch, resulting in modestly positive revenue growth. In addition, S&P would expect that the company would maintain lean inventory levels and avoid significant markdown activity, which would result in margin stability. At the same time, the company would keep its leverage and coverage in line with recent levels. S&P would consider lowering the rating if merchandising mis-steps, issues with expansion, or lax inventory controls resulted in revenues declining in the mid-single digits and margins falling by about 100 basis points. At that time, leverage would be in the mid-4.0x range. DOWNEY REGIONAL: Daughters of Charity Wants to Acquire Assets ------------------------------------------------------------- According to Chris Rauber at the San Francisco Business Times, the Daughters of Charity Health System is in talks with Downey Regional Medical Center to acquire Downey's assets. Downey Regional approved a letter of intent for the affiliation. The Downey hospital would become the seventh hospital in the Los Altos Hills-based Daughters of Charity system, if the discussions prove fruitful. About Downey Regional Medical Los Angeles, California-based Downey Regional Medical Center- Hospital Inc. operates a non-profit community hospital. The Company filed for Chapter 11 on Sept. 14, 2009 (Bankr. C. D. Calif. Case No. 09-34714). Lisa Hill Fenning, Esq., represents the Debtor in its restructuring effort. The Debtor did not file a list of its 20 largest unsecured creditors when it filed its petition. In its petition, the Debtor listed assets and debts both ranging from $10,000,001 to $50,000,000. DUANE READE: Kasowitz Files Suit for Payment of $7.1MM Success Fee ------------------------------------------------------------------ Duane Reade and Duane Reade, Inc., are facing a lawsuit filed by Kasowitz, Benson, Torres & Friedman LLP for payment of success fee. According to the lawsuit, filed before the Supreme Court of the State of New York, Kasowitz Benson represented Duane Reade in a 2006 ATM contract dispute with Cardtronics LLP. Duane Reade had alleged Cardtronics was not paying it the full amount of fees owed under the parties' ATM agreement based on a disputed interpretation of the contract. Pursuant to a modified fee arrangement, Kasowitz Benson agreed to receive for its legal services (1) a flat fee of $1,000,000 exclusive of disbursements, to be paid over a period of time; and (2) a success fee equal to 20% of any value Duane Reade received in the case in excess of $4,000,000. Kasowitz Benson said Duane Reade has paid the flat fee in 10 equal installments of $100,000. Kasowitz Benson said that at one point during the case, the court ordered the parties to medication, which was conducted in May 2007. New York Law Journal relates Cardtronics, represented by Steven Paradise, Esq., at Vinson & Elkins, in September 2007 won summary judgment, but Duane Reade appealed, and in August 2008, the New York Supreme Court, Appellate Division, 1st Department, remanded the case. The dispute finally settled. Duane Reade ultimately obtained a favorable settlement of the Cardtronics litigation in February 2009. The lawsuit alleges that Duane Reade did not inform Kasowitz Benson of the settlement. Kasowitz Benson said the settlement "achieved the stated goals Duane Reade hired [the firm] expressly to achieve at the inception of the Cardtronics litigation," including those pursued at the May 2007 mediation. Kasowitz said Duane Reade realized more than $39,500,000 from the Cardtronics litigation. Kasowitz said it is entitled to a success fee of no less than $7,100,000, which represents $20% of the $35,500,000 in value that exceeds the threshold amount under the Fee Arrangement. Kasowitz said under the Cardtronics settlement (i) Cardtronics would pay Duane Reade cash; (ii) Cardtronics would increase the surcharge fees consumers would pay at the ATM machines, (iii) Cardtronics agreed to terminate the ATM agreement so that Duane Reade could do a more lucrative ATM deal directly with JPMorgan Chase; and (iv) Cardtronics agreed to cooperate and assist Duane Reade in transitioning the ATM business to Chase. Kasowitz said it is also entitled to 20% of all other revenues obtained by Duane Reade under the Chase deal. Kasowitz said it requires further discovery to precisely calculate any such amount. Kasowitz said Duane Reade has breached or repudiated the fee agreement by failing and refusing to pay the success fee. Kasowitz's Mitchell R. Schrage, Esq., and Michael E. Hagenson, Esq., signed off the complaint. About Duane Reade Founded in 1960, Duane Reade is the largest drug store chain in New York City, offering a wide variety of prescription and over- the-counter drugs, health and beauty care items, cosmetics, convenience foods, greeting cards and photofinishing. As of June 27, 2009, the Company operated 253 stores. At September 26, 2009, Duane Reade Holdings, Inc., had $725,237,000 in total assets against $867,282,000 in total liabilities, resulting in stockholders' deficit of $142,045,000. * * * The Troubled Company Reporter said July 17, 2009, that Moody's Investors Service affirmed Duane Reade's Caa1 Corporate Family Rating and Ca Probability of Default Rating. Duane Reade's Caa1 CFR reflects the company's high leverage and weak coverage along with its geographic concentration in and disproportionate exposure to economic conditions in the intensely competitive New York metro market. The rating also incorporates Moody's expectation that free cash flow will be weak over the next 12 months due to relatively modest cash flow that is largely consumed by capital expenditures. EDDIE BAUER: Texas Comptroller Objects to Plan Confirmation ----------------------------------------------------------- BankruptcyData reports that the Texas Comptroller of Public Accountants is objecting to the plan of liquidation of Eddie Bauer Holdings. Texas Comptroller says that the section in the Plan that provides for payment of priority claims in one of three ways, at the sole option of the Debtor, does not comply with Section 1129(a)(9)(C) of the Bankruptcy Code. Section 1129(a)(9)(C) mandates priority tax claims be paid their present value via regular installments to be completed within five (5) years from the order of relief. The Comptroller says that to the extent its priority tax claim is not paid in full on the Effective Date, the Plan should provide for payment, with interest at the rate of 4.25%2, via monthly installments to be completed before June 17, 2014. About Eddie Bauer Eddie Bauer -- http://www.eddiebauer.com/-- is a specialty retailer that sells outerwear, apparel and accessories for the active outdoor lifestyle. Eddie Bauer participates in a joint venture in Japan and has licensing agreements across a variety of product categories. Eddie Bauer, founded in Bellevue, Wash., in 1920, was acquired by General Mills Inc. in 1971 and then sold to catalog retailer Spiegel Inc. in 1988. Eddie Bauer Inc. emerged from Spiegel's 2003 Chapter 11 case as a separate, reorganized entity under the control and ownership of Eddie Bauer Holdings, Inc. Eddie Bauer Holdings, Inc., and eight affiliates filed for bankruptcy on June 17, 2009 (Bankr. D. Del. Lead Case No. 09-12099). Judge Mary F. Walrath presides over the case. David S. Heller, Esq., Josef S. Athanas, Esq., and Heather L. Fowler, Esq., at Latham & Watkins LLP, serve as the Debtors' general counsel. Kara Hammond Coyle, Esq., and Michael R. Nestor, Esq., at Young Conaway Stargatt & Taylor LLP, serve as local counsel. The Debtors' restructuring advisors are Alvarez and Marsal North America LLC. Their financial advisors are Peter J. Solomon Company. Kurtzman Carson Consultants LLC acts as claims and notice agent. As of April 4, 2009, Eddie Bauer had $525,224,000 in total assets and $448,907,000 in total liabilities. Eddie Bauer Canada, Inc., and Eddie Bauer Customer Services filed for protection from their creditors in Canada on June 17, 2009, the same day the U.S. Debtors filed for protection from their creditors. The Canadian Debtors have obtained an initial order of the Canadian Court staying the proceedings against the Canadian Debtors and their property in Canada. RSM Richter Inc. was appointed as monitor in the Canadian proceedings. On August 4, 2009, Golden Gate Capital closed a deal to acquire Eddie Bauer Holdings for $286 million. Golden Gate will maintain the substantial majority of Eddie Bauer's stores and employees in a newly formed going concern company. Golden Gate beat an affiliate of CCMP Capital Advisors, LLC, at the auction. The CCMP unit's $202 million cash offer served as stalking horse bid. Golden Gate Capital -- http://www.goldengatecap.com/-- is a San Francisco-based private equity investment firm with roughly $9 billion of assets under management. ELECTROGLAS INC: QVT Financial Ceases to Own Common Shares ---------------------------------------------------------- QVT Financial LP has filed with the Securities and Exchange Commission Amendment No. 2 to its Schedule 13-G with was initially filed on March 30, 2007. The CUSIP number of the common stock is 285324109. QVT Financial LP, QVT Financial GP LLC, QVT Fund LP, and QVT Associates GP LLC disclose that as of December 31, 2009, they own no shares of the issuer's common stock. A full-text copy of the amendment no. 2 to QVT Financial's SC 13G is available for free at http://researcharchives.com/t/s?51fd San Jose, California-based Electroglas, Inc., supplies semiconductor manufacturing test equipment and software to the global semiconductor industry, and have been in the semiconductor equipment business for more than 40 years. The Debtors' other major source of revenue comes from their business of designing, manufacturing, selling and supporting motion control systems for advanced technologies. The Company and Electroglas International, Inc., filed for Chapter 11 on July 9, 2009 (Bankr. D. Del. Lead Case No. 09-12416). David B. Stratton, Esq., and James C. Carignan, Esq., at Pepper Hamilton LLP represent the debtors in their restructuring efforts. No official committee of unsecured creditors has been appointed in the Chapter 11 cases. The Debtors listed total assets of $19,625,000 and total debts of $31,542,000. EMERSON OVERLOOK: Files Schedules of Assets and Liabilities ----------------------------------------------------------- Emerson Overlook, LLC, filed with the U.S. Bankruptcy Court for the Northern District of Georgia its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $0 B. Personal Property $76,409 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $19,021,950 E. Creditors Holding Unsecured Priority Claims $108,129 F. Creditors Holding Unsecured Non-priority Claims $1,200,968 ----------- ----------- TOTAL $76,409 $20,331,047 Marietta, Georgia-based Emerson Overlook, LLC, filed for Chapter 11 bankruptcy protection on January 4, 2010 (Bankr. N.D. Ga. Case No. 10-60282). Todd E. Hennings, Esq., and William A. Rountree, Esq., at Macey, Wilensky, Kessler & Hennings LLC, 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. EMERSON OVERLOOK: Gets Second Interim OK to Use Cash Collateral --------------------------------------------------------------- Emerson Overlook, LLC, sought and obtained a second interim authorization from the Hon. James E. Massey of the U.S. Bankruptcy Court for the Northern District of Georgia to use cash collateral. As reported by the TCR on January 14, 2010, the Debtor sought and obtained interim approval from Judge Massey to use the cash collateral of The Bank of North Georgia and The Landmark Bank to fund its Chapter 11 case, pay suppliers and other parties. In exchange for using the cash collateral, the Debtor proposes to grant the creditor replacement liens on accounts receivable and rents of the Debtor generated post-petition, to the same validity, priority and extent as existed pre-petition. In the event of any condominium sales, liens will attach to sales proceeds and net proceeds will go toward reduction of the principal debt to this creditor. Judge Massey then set a final hearing for February 2, 2010, at 2:00 p.m. on the Debtor's request to use cash collateral. Judge Massey has now set the final hearing on the Debtor's request on February 18, 2010, at 10:00 a.m. Objections to the requested relief and entry of the final order are due on February 16, 2010, at 5:00 p.m. Marietta, Georgia-based Emerson Overlook, LLC, filed for Chapter 11 bankruptcy protection on January 4, 2010 (Bankr. N.D. Ga. Case No. 10-60282). Todd E. Hennings, Esq., and William A. Rountree, Esq., at Macey, Wilensky, Kessler & Hennings LLC, 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. EMERSON JOSEPH: Falling Deman Prompts Chapter 11 Filing ------------------------------------------------------- Kerry Hall Singe at Charlotte Observer says Emerson Joseph has filed for Chapter 11 bankruptcy protection, listing liabilities of $2,600,000 and assets between $100,000 and $500,000. According to the Company, the filing resulted from problems including falling demand as the economy soured and unexpected costs associated with its failed SouthPark location. Emerson Joseph owns a high-end men's grooming salon in uptown and Ballantyne, North Carolina. FAIRPOINT COMMS: Files Plan of Reorganization --------------------------------------------- FairPoint Communications, Inc. and its 79 debtor affiliates delivered to the United States Bankruptcy Court for the Southern District of New York on February 8, 2010, a Joint Plan of Reorganization and a Disclosure Statement describing the Plan. The Plan reflects a consensual resolution and settlement among the FairPoint Debtors and a steering committee of lenders under FairPoint's Prepetition Credit Agreement regarding the allocation of FairPoint's assets among the holders of Allowed Claims, according to FairPoint Executive Vice President and General Counsel Shirley J. Linn, Esq. The Plan has the support of the Debtors and the Lender Steering Committee. "FairPoint's reorganization is premised upon effecting a substantial de-leveraging and strengthening of FairPoint's balance sheet through the conversion of a substantial portion of FairPoint's prepetition indebtedness into New Common Stock on the Effective Date," Ms. Linn discloses. Essentially, the Plan contemplates the conversion of approximately $1 billion of FairPoint's prepetition indebtedness into equity in Reorganized FairPoint Communications. Under the Plan, and subject to dilution from the securities to be issued under the "FairPoint Long Term Incentive Plan" and the "New Warrants," as applicable, the New Common Stock will be distributed in this manner: (a) Each holder of an Allowed Class 4 Prepetition Credit Agreement Claim will receive that holder's Ratable Proportion of 47,275,785 shares of the New Common Stock; provided that if the Class of FairPoint Unsecured Claims rejects the Plan, each Class 4 holder will receive its Ratable Proportion of 58,484,587 shares of the New Common Stock; and (b) Each holder of an Allowed Class 7 FairPoint Communications Unsecured Claim will, if that Class of that holder votes to accept the Plan, receive its Ratable Proportion of (i) 4,190,651 shares of the New Common Stock, and (ii) the New Warrants, Ms. Linn elaborates. Holders of Class 7 Claims expect to receive $635 million in aggregate distributions -- primarily in stocks -- or a 16.9% recovery if the class of unsecured claimants votes to accept the Plan. Holders of Class 7 Claims are expected to recover 87.9% on their claims, which is contemplated to aggregate $2.1 billion. The New Warrants refer to certain warrants to purchase up to 7,143,156 shares of New Common Stock issued pursuant to the Plan. A Term Sheet on the New Warrants is available for free at: http://bankrupt.com/misc/FairPt_NewWarrantsTermSheet.pdf Issuance of New Common Stock The Amended Certificate of Incorporation of Reorganized FairPoint will authorize the issuance of 75,000,000 shares of New Common Stock. The shares of New Common Stock that are authorized on the Effective Date will be issued or reserved: (a) in the event the Class of FairPoint Communications Unsecured Claims accepts the Plan: -- 51,466,436 shares of New Common Stock, in the aggregate, will be distributed to holders of Allowed Claims under Section 5.4 and Section 5.7 of the Plan; and -- 7,143,156 shares of the New Common Stock will be reserved in connection with the New Warrants; (b) in the event the Class of FairPoint Communications Unsecured Claims rejects the Plan, 58,484,587 shares of New Common Stock, in the aggregate, will be distributed to holders of Allowed Claims under Section 5.4 of the Plan; and (c) 6,269,206 shares of New Common Stock will be issued or reserved in connection with the Long Term Incentive Plan. On Effective Date, Reorganized FairPoint is expected to continue to engage in its business operations. Other Provisions The Plan, Ms. Linn adds, among other things, provides for (1) the validity of certain regulatory settlements, (2) the extinguishment of old equity, (3) a new term loan and a new revolver loan, and (4) a new board for Reorganized FairPoint A. Regulatory Settlements The entry of the Confirmation Order will constitute the Bankruptcy Court's finding and determination that FairPoint's Regulatory Settlements with the New Hampshire Public Utilities Commission and the Vermont Department of Public Service, are fair, equitable and reasonable. The Regulatory Settlements represent compromises between the parties with respect to service quality requirements, broadband commitments, financial commitments and management commitments. Copies of the Regulatory Settlements are available without charge at: http://bankrupt.com/misc/FairPt_RegulatorySettlments.pdf B. New Term Loan and New Revolver On FairPoint's emergence from Chapter 11, holders of Prepetition Credit Agreement Claims will receive, among other things, their Ratable Proportion of a new $1,000,000,000 secured term loan agreement, which will be guaranteed by FairPoint subsidiaries that have guaranteed repayment of the DIP Credit Agreement, with certain financial institutions and Bank of America, N.A., as the administrative agent. The material terms of the New Term Loan are: * The New Term Loan will be secured by the same or substantially the same collateral as the collateral which secures the DIP Credit Agreement, except to the extent prohibited by law or regulation. * 5-year maturity * Interest at LIBOR + 4.50%, with a LIBOR floor of 2.00%. * No upfront fee. * Mandatory prepayment at par, upon certain conditions to be determined. * Optional prepayment at anytime at par. * Amortization Schedule -- Year 1: 1% annually, Year 2: 1% annually, Year 3: 5% annually, Year 4: 15% annually and Year 5: 15% (5% per quarter for the first 3 quarters) with 63% bullet payment in 4th quarter. * Amortization occurs quarterly commencing upon the first full quarter after the Effective Date. * If FairPoint's consolidated leverage ratio is above 2.0x at the end of the fiscal year, FairPoint will be subject to a sweep of 75% of its Excess Cash Flow based upon an annual test and paid in the subsequent quarter, provided that, with respect to the test occurring for fiscal year 2010, Excess Cash Flow will be calculated for the period from the Effective Date through the end of such fiscal year and, if the sweep described is applicable, will be payable in fiscal year 2011. If FairPoint's consolidated leverage ratio is below 2.0x at the end of the fiscal year, such sweep will be reduced to 50% of FairPoint's Excess Cash Flow. * Any sweep of FairPoint's Excess Cash Flow by the lenders will be applied pro rata against obligations in accordance with the amortization schedule. * If FairPoint's consolidated total leverage ratio is below 2.0x at the end of the fiscal year, FairPoint will be permitted to pay dividends with its share of Excess Cash Flow. * Financial covenants will only include interest coverage and leverage ratio tests. Those tests will first occur in the first full quarter following the Effective Date. * Usual and customary affirmative and negative covenants as may be mutually agreed to by the agent, the lenders and FairPoint. In addition, the Plan contemplates that the DIP Credit Agreement will, subject to certain conditions, roll into a revolving credit exit facility with an aggregate principal amount of $75,000,000 with a five year term. If any of the conditions are not met and, as a result, the DIP Credit Agreement does not convert into the New Revolver, FairPoint intends to obtain a new revolving credit facility. However, there are no assurances that FairPoint would be able to obtain a revolving credit facility on commercially reasonable terms or at all, Ms. Linn says. C. New Board On the Plan Effective Date, FairPoint will have a New Board, which will initially consist of nine directors. The Lender Steering Committee will have the option to reduce the number of members of the New Board they are entitled to nominate pursuant to the Plan from seven or eight, to five. D. FairPoint's existing securities will be cancelled as of the Plan Effective Date. E. Long Term Incentive Plan Reorganized FairPoint will be deemed to have adopted the Long Term Incentive Plan as of the Plan Effective Date. F. Indemnification Reorganized FairPoint will assume all existing indemnification obligations of Debtor FairPoint in favor of FairPoint's directors who held positions on June 1, 2009 and thereafter, and the directors, officers and employees of Reorganized FairPoint on and after the Effective Date; provided that the indemnification obligation to and for the benefit of the Indemnified Persons will be limited in the aggregate to $20,000,000 with respect to any Claim asserted against the Indemnified Person that arose prior to the Effective Date. 2010 Labor MOU Among the conditions precedent to the effectivity of the Plan is the ratification by the applicable union membership of a Labor Memorandum of Understanding Northern New England Telephone Operations LLC with International Brotherhood of Electrical Workers, AFL-CIO Locals 2320, 2326, and 2327 and Communications Workers of America, AFL-CIO FairPoint on February 1, 2010. Valuation Analysis Rothschild Inc. has performed an analysis of the estimated value of Reorganized FairPoint on a going-concern basis. Among others, Rothschild used an assumed June 30, 2010 Plan Effective Date and assumed a September 30, 2009 Valuation Date in preparing the Valuation Analysis. As a result, Rothschild estimates the total enterprise value of Reorganized FairPoint to be approximately $1.8 billion to $2.1 billion, with a midpoint of $1.9 billion. Rothschild reduced the TEV estimates by the estimated pro forma net debt levels of Reorganized FairPoint -- approximately $1.0 billion -- to estimate the implied reorganized equity value of Reorganized FairPoint. Rothschild estimates that Reorganized FairPoint's implied total reorganized equity value will range from $0.8 million to $1.1 billion. After deducting estimated value for the Seven-Year Warrants and the Ten-Year Options of approximately $38 million to $70 million, with a midpoint of $53 million, Rothschild estimates the implied distributable reorganized equity valued will range from $776 million to $1,064 million, with a midpoint of $920 million. Any variance on the ultimate General Unsecured Claims pool could have a material impact on recoveries achieved, Rothschild adds. A full-text copy of the Valuation Analysis is available for free at http://bankrupt.com/misc/FairPt_ValuatnAnlysis.pdf Liquidation Analysis FairPoint relates that it has prepared a liquidation analysis, with the assistance of its advisors, which is premised on a hypothetical liquidation in a Chapter 7 case. FairPoint, however, has yet to file a copy of that Analysis to the Court. Financial Projections FairPoint has also prepared projected financial information that forecasts the financial performance of Reorganized FairPoint through the year 2013. The projections are based on the current business plan for Reorganized FairPoint. The ongoing post- Effective Date operations of Reorganized FairPoint will be financed through its business operations and certain exit credit facilities. A full-text copy of FairPoint's Financial Projections is available for free at: http://bankrupt.com/misc/FairPt_PlanFinPrjctns.pdf Full-text copies of the FairPoint Plan and Disclosure Statement are available for free at: http://bankrupt.com/misc/FairPt_Plan.pdf http://bankrupt.com/misc/FairPt_DS.pdf About FairPoint Communications FairPoint Communications, Inc. (NYSE: FRP) -- http://www.fairpoint.com/-- is an industry leading provider of communications services to communities across the country. FairPoint owns and operates local exchange companies in 18 states offering advanced communications with a personal touch, including local and long distance voice, data, Internet, television and broadband services. FairPoint is traded on the New York Stock Exchange under the symbols FRP and FRP.BC. Fairpoint and its affiliates filed for Chapter 11 on Oct. 26, 2009 (Bankr. D. Del. Case No. 09-16335). Rothschild Inc. is acting as financial advisor for the Company; AlixPartners, LLP, as the restructuring advisor; and Paul, Hastings, Janofsky & Walker LLP is the Company's counsel. BMC Group is claims and notice agent. As of June 30, 2009, Fairpoint reported $3.24 billion in total assets, $321.41 million in total current liabilities, $2.91 billion in total long-term liabilities, and $1.23 million in total stockholders' equity. Bankruptcy Creditors' Service, Inc., publishes Fairpoint Communications Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Fairpoint Communications Inc. and its debtor- affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) FAIRPOINT COMMS: Inks Agreement With Labor Unions ------------------------------------------------- Negotiations undertaken by FairPoint Communications Inc., its debtor affiliates, and certain labor unions have ultimately resulted in the parties signing a Labor Memorandum of Understanding on February 1, 2010. FairPoint Communications Inc. Executive Vice President and General Counsel Shirley J. Linn, Esq., relates that Debtors Northern New England Telephone Operations LLC and Telephone Operating Company of Vermont LLC dba FairPoint Communications are parties to two collective bargaining agreements with locals of two major unions, the International Brotherhood of Electrical Workers or IBEW and the Communications Workers of America or CWA. Prior to the acquisition of the NNE Operations, a number of subsidiaries of FairPoint Communications had a much smaller number of unionized employees and did not have significant liabilities arising under its CBAs. As such, FairPoint has not historically faced large-scale labor issues in the operation of its businesses. However, with the acquisition of the NNE Operations, Northern New England Telephone Operations LLC and Telephone Operating Company of Vermont LLC entered into CBAs, which became effective on April 1, 2008, and would have expired by their terms on August 3, 2013. The CBAs cover the majority of FairPoint's represented employees in Maine, New Hampshire and Vermont. Approximately 2,000 of these employees are represented by the IBEW and approximately 300 of these employees are represented by the CWA. Ms. Linn informs the Court that FairPoint Communications initiated discussions with the NNE Unions during the summer of 2009 in order to advise them of the financial issues confronting FairPoint Communications and to seek their support and cooperation in making adjustments to the CBAs in order to assist FairPoint Communications in addressing those financial issues. The discussion continued even after the Debtors filed for bankruptcy. The parties have finally agreed on a Labor MOU on February 1, 2010. The Labor MOU provides for: (1) a one year extension of the term of the CBAs, to August 2, 2014; (2) cancellation of a 3% wage increase previously scheduled for August 2010, to be replaced by a 3% wage increase in August 2013; (3) elimination of a minimum payment under the corporate profit sharing program and the adoption of the profit sharing methodology applied for FairPoint Communications' non-union employees which provides for a greater level of profit sharing if the Company meets or exceeds its financial objectives and a lower level of profit sharing if FairPoint Communications fails to do so; (4) creation of a joint labor-management committee, the Joint Committee on Operational Effectiveness, which will work with professional facilitators to identify opportunities to achieve a goal of $25 million per year reduction in FairPoint Communications' operating costs; (5) a mutual release of claims by FairPoint Communications and the Unions; and (6) the authorization for FairPoint Communications to pay matching contributions under its 401K plan in stock rather than cash. The Labor MOU is subject to membership ratification and Bankruptcy Court approval, both of which will be sought promptly. A full-text copy of the FairPoint 2010 Labor MOU is available for free at http://bankrupt.com/misc/FairPt_2010LaborMOU.pdf About FairPoint Communications FairPoint Communications, Inc. (NYSE: FRP) -- http://www.fairpoint.com/-- is an industry leading provider of communications services to communities across the country. FairPoint owns and operates local exchange companies in 18 states offering advanced communications with a personal touch, including local and long distance voice, data, Internet, television and broadband services. FairPoint is traded on the New York Stock Exchange under the symbols FRP and FRP.BC. Fairpoint and its affiliates filed for Chapter 11 on Oct. 26, 2009 (Bankr. D. Del. Case No. 09-16335). Rothschild Inc. is acting as financial advisor for the Company; AlixPartners, LLP, as the restructuring advisor; and Paul, Hastings, Janofsky & Walker LLP is the Company's counsel. BMC Group is claims and notice agent. As of June 30, 2009, Fairpoint reported $3.24 billion in total assets, $321.41 million in total current liabilities, $2.91 billion in total long-term liabilities, and $1.23 million in total stockholders' equity. Bankruptcy Creditors' Service, Inc., publishes Fairpoint Communications Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Fairpoint Communications Inc. and its debtor- affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) FAIRPOINT COMMS: Offers to Return 16.9% to Unsecured Creditors -------------------------------------------------------------- The Joint Chapter 11 Plan filed by FairPoint Communications Inc. and its debtor affiliates designates claims and interests into 5 unclassified claim categories and 11 claim classes: Class/ Estimated Estimated Description Treatment Claim Amt Recovery ----------- --------- ----------- ---------- Administrative To be paid in full. -- -- Expense Claims Adequate To be paid in full. -- -- Protection Claims Priority Tax To be paid in full. -- -- Claims Professional To be paid in full, -- -- Claims as allowed by the Court. Intercompany At the election of the -- -- Claims Debtors or a claimant, Intercompany Claim may (a) be released as of the Effective Date, (b) contributed to the capital of the obligor corporation, (c) dividended, or (d) remain unimpaired. Class 1 Unimpaired status. $0 100% Other Priority Not entitled to vote. Claims To be paid in full in Cash. Class 2 Unimpaired status. $5.7 mil. 100% Secured Tax Not entitled to vote. Claims To be paid in full. Class 3 Unimpaired status. $0 100% Other Secured Not entitled to vote. Claims At the option of the Debtors, either (i) an Allowed Class 3 Claim will be Reinstated and rendered Unimpaired in accordance with Section 1142(2) of the Bankruptcy Code, (ii) each holder will receive Cash in an amount equal to the Claim, or (iii) each holder will receive the Collateral securing the Claim. Class 4 Impaired status. $2.1 bil. 87.9% Allowed Entitled to vote. Prepetition Each holder of an Credit Allowed Class 4 Agreement Claim will receive: Claims (i) on the Effective Date, that holder's Ratable Proportion of the New Term Loan; (ii) on the Effective Date, that holder's Ratable Proportion of 47,275,785 shares of the New Common Stock; (iii) on the Effective Date, that holder's Ratable Proportion of the Cash Payment; and (iv) on the applicable Distribution Date, if any, that Holder's Ratable Proportion of Cash Distributions out of the Reserve that are no longer required to be reserved for the benefit of anyone other than the holders of Allowed Class 4 Claims. Class 5 Unimpaired status $10.5 mil. 100% Legacy Not entitled to vote. Subsidiary To be paid in full. Secured Claims Class 6 Allowed Class 6 Claims -- -- NNE Subsidiary will receive a Unsecured distribution on terms Claims to be provided and which are reasonably satisfactory to the Debtors and the Lender Steering Committee. Class 7 Impaired status. $653 mil. 16.9% FairPoint Entitled to vote. Communications Each Allowed Class 7 Unsecured Claim holder will Claims receive: (i) if the Class 7 votes to accept the Plan, its Ratable Proportion of (x) 4,190,651 shares of New Common Stock, or (y) the New Warrants; or (ii) if the Class 7 votes to reject the Plan, no distributions under the Plan. Class 8 Unimpaired status. $3.3 mil. 100% Convenience Not entitled to vote. Claims Each Allowed Class 8 Claim Holder will be paid in full. Class 9 Impaired status. 0 0% Subordinated Not entitled to vote. Securities Each Allowed Class 9 Claims Claim Holder will not receive or retain any interest or property under the Plan on account of the Allowed Claim. Class 10 Unimpaired status. N/A Reinstated Subsidiary Not Entitled to vote. Equity The Subsidiary Equity Interests Interests will be reinstated on the Effective Date. Class 11 Impaired status. N/A 0% Old FairPoint Not entitled to vote. Equity On the Effective Date, Interests the certificates evidencing Class 11 Interests will be cancelled. About FairPoint Communications FairPoint Communications, Inc. (NYSE: FRP) -- http://www.fairpoint.com/-- is an industry leading provider of communications services to communities across the country. FairPoint owns and operates local exchange companies in 18 states offering advanced communications with a personal touch, including local and long distance voice, data, Internet, television and broadband services. FairPoint is traded on the New York Stock Exchange under the symbols FRP and FRP.BC. Fairpoint and its affiliates filed for Chapter 11 on Oct. 26, 2009 (Bankr. D. Del. Case No. 09-16335). Rothschild Inc. is acting as financial advisor for the Company; AlixPartners, LLP, as the restructuring advisor; and Paul, Hastings, Janofsky & Walker LLP is the Company's counsel. BMC Group is claims and notice agent. As of June 30, 2009, Fairpoint reported $3.24 billion in total assets, $321.41 million in total current liabilities, $2.91 billion in total long-term liabilities, and $1.23 million in total stockholders' equity. Bankruptcy Creditors' Service, Inc., publishes Fairpoint Communications Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Fairpoint Communications Inc. and its debtor- affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) FANNIE MAE: Guaranteed Mortgage Securities Tumble ------------------------------------------------- Bloomberg News reports that high-coupon mortgage bonds guaranteed by Fannie Mae and Freddie Mac fell after the government-supported home-financing companies said they would step up purchases of delinquent loans from their securities to cut expenses. Investors who buy bonds for more than face value risk losses from the repurchases because they get fewer interest payments than they may have estimated. Fannie Mae and Freddie Mac would pay missed interest to bondholders if they didn't repurchase the loans. As reported by the Troubled Company Reporter, Freddie Mac would buy "substantially all" loans with payments late by 120 days or more from its securities in the next month. Fannie Mae, Bloomberg relates, said later that it will "increase significantly" its buyouts, setting a less aggressive timeline. "Freddie dropped the buyout bombshell this morning," Brian Ye, an analyst at JPMorgan Chase & Co. in New York, said in a note to clients. 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 Fannie Mae 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. FAYETTEVILLE MARKETFAIR: Can Continue Using Cash Collateral ----------------------------------------------------------- Fayetteville Marketfair Investors, LLC, sought and obtained a third interim approval from the Hon. Randy D. Doub of the U.S. Bankruptcy Court for the Eastern District of North Carolina to use the cash collateral of Capmark Finance Inc. As reported by the TCR on January 12, 2010, Judge Doub, in a second interim order, authorized the Debtor to use cash securing its obligations to prepetition lenders to fund the Debtor's Chapter 11 case, pay suppliers and other parties. A final hearing on the Debtor's use of cash collateral was set for January 19, 2010, at 9:30 p.m. The Debtor will continue to collect rents, and tenants of the real property are directed and authorized to pay rent to the Debtor. All rents collected will be deposited into a debtor-in-possession bank account, and the Debtor will make no expenditures from the account except as provided for in the budget, a copy of which is available for free at: http://bankrupt.com/misc/FAYETTEVILLE_MARKETFAIR_budget.pdf The Debtor is authorized to: a. make payment of interest, as adequate protection for use of the cash collateral; b. make payment of all Capmark's reasonable attorneys' fees upon the submission of invoices detailing fees and expenses on not less than 10 days notice, with an opportunity to review, to the Debtor, counsel to the Debtor, counsel to the Committee and the Bankruptcy Administrator: (i) for the period prior to the Petition Date through the date the Final Cash Collateral Order is approved, payable within 10 days after receipt of invoices detailing fees and expenses, provided that no objection to payment of the fees is raised; and (ii) for the period after the date the Final Cash Collateral Order is entered, payable on the 20th day of each month following the submission of each monthly invoice detailing fees and expenses, provided that no objection to payment is raised; and c. to transfer, convey, grant and assign to Capmark as replacement liens for the Prepetition Liens, liens (collectively, the "Postpetition Liens") upon and security interests in the Postpetition Cash Collateral, unless a court of competent jurisdiction were to determine that the Prepetition Liens are invalid, unenforeceable and/or should be avoided and to the extent Cash Collateral is used. The Postpetition Liens will be senior, first- priority, validly perfected liens, subordinate only to payment of fees to the Bankruptcy Administrator. The Debtor will continue to provide to Capmark with information, statements and reports concerning its financial condition and its assets as are required to be furnished under the loan documents or at the reasonable request of Capmark. The Court has set an interim hearing for March 18, 2010, at 10:00 a.m. on the Debtor's request to use cash collateral. About Fayetteville Marketfair Miami, Florida-based Fayetteville Marketfair Investors, LLC, filed for Chapter 11 on Dec. 14, 2009 (Bankr. E.D. N.C. Case No. 09- 10859). William P. Janvier, Esq., at Everett Gaskins Hancock & Stevens, LLP, 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. FENDER MUSICAL: Moody's Downgrades Corporate Family Rating to 'B2' ------------------------------------------------------------------ Moody's Investors Service downgraded Fender Musical Instrument's ratings one notch (CFR and PDR to B2 ) due to Moody's expectation that, while showing some recent signs of moderating, operating performance and credit metrics will remain below Moody's expectations of a B1 consumer durable company in the near to medium term. At the same time, the B2 rating on the senior secured term loan was affirmed. The rating outlook is revised to stable from negative. "Despite its ongoing debt reduction and cost rationalization efforts, Moody's believe Fender's earnings and credit metrics will not return to their pre-recession levels in the foreseeable future," said Kevin Cassidy, Senior Credit Officer at Moody's Investors Service. Fenders reduced profitability is principally caused by the continuing weakness in discretionary consumer spending. The B2 corporate family rating reflects the company's high adjusted leverage of over 6.5x, negative revenue trends and generally modest credit metrics. The rating also reflects Fender's relatively small size with revenue of around $625 million as well as the weak discretionary consumer spending environment, which Moody's do not expect to significantly improve in the near term. The B2 rating also reflects the company's strong brand name, geographic diversification throughout the US and internationally, good liquidity profile and strong market share in the electric guitar segment. The stable outlook reflects Moody's belief that revenue will likely stabilize or experience just modest declines in the near term, which, in turn, should lead to improved earnings and cash flow, although at reduced levels. Moody's expects 2010 revenue to be between $600 million and $625 million and 2010 EBITDA of $45 million to $50 million. At this level of profitability, which is more than 15% lower than the LTM September 2009 EBITDA, adjusted leverage should range from 5x to 5.5x, which is about what Moody's expect for the foreseeable future. The stable outlook also reflects Moody's expectation that Fender will deploy its free cash flow to reduce debt over the next couple of years. While not expected, the rating and/or outlook could experience additional negative pressure if revenue and profitability do not begin to stabilize and are meaningfully below Moody's expectations. The outlook and/or rating could experience positive momentum if leverage is reduced to around 4.5x for a sustained period, revenue grows more than expected and operating margins climb to their previous double digit levels. The B2 rating of the term loan was affirmed despite the one notch downgrade of the CFR and PDR due to the change in the relative mix of the capital structure highlighted by Moody's expectation that Fender will not have to draw down on the revolver over the foreseeable future. These ratings were downgraded: * Corporate family rating to B2 from B1; * Probability of default rating to B2 from B1; These ratings were downgraded/assessments revised: * $200 million senior secured term loan at B2 (LGD4, 58% from LGD4, 57%); * $100 million senior secured delayed draw term loan at B2 (LGD4, 58% from LGD4, 57%) The last rating action was on July 23, 2009, where Moody's affirmed Fender's ratings. Fender Musical Instruments Corporation, based in Scottsdale, Arizona, develops, manufactures and distributes musical instruments, principally guitars, to wholesale and retail outlets throughout the world. Revenue for the twelve months ended September 30, 2009, approximated $620 million. FLYING J: Proposes March 19 Auction for Bakersfield Refinery ------------------------------------------------------------ Flying J Inc. will seek approval on February 23 to set up auction and sale procedures for its Bakersfield refinery where an affiliate of Alon USA Energy Inc. will be the stalking horse bidder. Flying J proposes a March 19 auction, with initial bids due March 16. The Debtor will seek approval of the results of the auction on March 23. Absent higher and better bids, Alon USA will buy the refinery for $40 million cash plus a formula for the value of inventory. The Bakersfield refinery is located in California's Central Valley and has the capacity to refine up to 70,000 barrels per day of crude oil. The refinery is supplied by crude oil produced in the San Joaquin Valley with its products marketed in California, and is a major provider of motor fuels in central California. About Alon USA Alon USA Energy, Inc., headquartered in Dallas, Texas, is an independent refiner and marketer of petroleum products, operating primarily in the South Central, Southwestern and Western regions of the United States. The Company owns four crude oil refineries in Texas, California, Louisiana and Oregon, with an aggregate crude oil throughput capacity of approximately 250,000 barrels per day. Alon is a leading producer of asphalt, which it markets through its asphalt terminals predominately in the Western United States. Alon is the largest 7-Eleven licensee in the United States and operates more than 300 convenience stores in Texas and New Mexico. Alon markets motor fuel products under the FINA brand at these locations and at approximately 640 distributor-serviced locations. About Flying J Based in Ogden, Utah, Flying J Inc. -- http://www.flyingj.com/-- is among the 20 largest private companies in America, with 2007 sales exceeding $16 billion. The fully integrated oil company employs approximately 14,700 people in the U.S. and Canada through its interstate operations, transportation, refining and supply, exploration and production, as well as its financial services and communications, divisions. Flying J and six of its affiliates filed for bankruptcy on December 22, 2008 (Bankr. D. Del. Lead Case No. 08-13384). Flying J sought Chapter 11 protections after a precipitous drop in oil prices and disruption in the credit markets brought to bear significant short-term pressure on the company's liquidity position. Attorneys at Kirkland & Ellis LLP represent the Debtors as counsel. Young, Conaway, Stargatt & Taylor LLP is the Debtors' Delaware Counsel. Blackstone Advisory Services L.P. is the Debtors' investment banker and financial advisor. Epiq Bankruptcy Solutions LLC is the Debtors' notice, claims and balloting agent. In its formal schedules submitted to the Bankruptcy Court, Flying J listed assets of $1,433,724,226 and debts of $640,958,656. An official committee of unsecured creditors has been appointed in the case. Pachulski Stang Ziehl & Jones LLP has been tapped as counsel for the creditors' panel. Magellan Midstream Partners LP was authorized by the Bankruptcy Court in July to buy Flying J's Longhorn pipeline that runs 700 miles from Houston to El Paso, Texas. FRANK J GOMES: Files Schedules of Assets and Liabilities -------------------------------------------------------- Frank J. Gomes Dairy filed with the U.S. Bankruptcy Court for the Eastern District of California its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $22,200,000 B. Personal Property $12,425,671 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $26,030,336 E. Creditors Holding Unsecured Priority Claims $987,450 F. Creditors Holding Unsecured Non-priority Claims $3,913,609 ----------- ----------- TOTAL $34,625,671 $30,931,395 Headquartered in Stevenson, California, Frank J. Gomes Dairy, dba F and A Farms, operates an agricultural and farming business. The Company filed for Chapter 11 on November 12, 2009 (Bankr. E.D. Calif. Case No. 09-61024). Hilton A. Ryder, Esq., represents the Debtor in its restructuring efforts. In its petition, the Debtor listed assets both ranging from $10,000,001 to $50,000,000 FRANK J GOMES: Can Use Cash Collateral Until Feb. 28 ---------------------------------------------------- Frank J. Gomes Dairy sought and obtained interim authorization from the Hon. Whiney Rimel of the U.S. Bankruptcy Court for the Eastern District of California to use the cash collateral of Wells Fargo Bank, N.A. (the Bank) and Wells Fargo Equipment Finance, Inc. (WFEFI) from February 1, 2010, through February 28, 2010. As reported by the TCR on November 23, 2009, the Debtor was allowed to use, on the interim, the cash collateral of the Bank from November 12, 2009, until December 15, 2009, to fund the Debtor's Chapter 11 case, pay suppliers and other parties. The Debtor will continue using the cash collateral pursuant to a budget, a copy of which is available for free at: http://bankrupt.com/misc/Frank_Gomes_budget.pdf The Debtor will pay the Bank adequate protection payments of $5,599.45 and $81,443.24, in the form of two separate checks, on February 5, 2010. The Debtor will be permitted to purchase during this month and every calendar month thereafter, cows having a total value of no more than $20,000, subject to the condition that the Debtor pay to the Bank, within two business days of the purchase of any cows, an amount equal to the purchase price paid by the Debtor for the cows. The Cow Payment will be applied by the Bank to the outstanding principal obligation owed by the Debtor to the Bank pursuant to a certain Revolving Line of Credit Note dated June 20, 2008, in the original principal sum of $4 million. The Debtor will pay WFEFI on February 15, 2010, these amounts owed to the September 7, 2005 Master Lease: a. Supplement No. 400 (September 7, 2005) $2,285.93 b. Supplement No. 401 (September 13, 2005) $1,710.91 c. Supplement No. 402 (October 4, 2005) $1,274.69 d. Supplement No. 403 (November 7, 2005) $3,999.05 e. Supplement No. 404 (March 1, 2006) $2,404.57 f. Supplement No. 405 (April 7, 2006) $4,359.83 g. Supplement No. 406 (April 7, 2006) $3,223.09; and h. Supplement No. 407 (December 7, 2007) $4,398.42 The Debtor will pay these additional adequate protection payments to these entities on February 15, 2010: a. Agricredit Acceptance $6,178.42; b. C&H Capital $1,277.75; c. Ford Credit $1,038.79; d. Ford Credit $397.64; e. GE Capital $1,041.67; f. John Deere $2,703.61; g. Paccar Leasing $2,338.29; h. C&H Capital $3.039.79; and i. C&H Capital $12,538.06 The Debtor will continue to deposit all cash collateral, in kind, into a debtor-in-possession account which the Debtor will establish with the Bank. The Debtor has granted the Bank, WFEFI and other secured creditors a lien and security interest (the Replacement Lien) in all assets of the Debtor acquired starting November 12, 2009. The Debtor will provide reports, documents, copies, and other information to the Bank. Commencing on February 8, 2010, and continuing on each Monday thereafter (or if Monday is a legal holiday, on the next business day thereafter), the Debtor will deliver weekly and monthly reports to that Bank. About Frank J Gomes Stevenson, California-based Frank J. Gomes Dairy, dba F and A Farms, operates an agricultural and farming business. The Company filed for Chapter 11 bankruptcy protection on November 12, 2009 (Bankr. E.D. Calif. Case No. 09-61024). Hilton A. Ryder, Esq., who has an office in Fresno, California, assists the Company in its restructuring effort. According to the schedules, the Company has assets of $34,613,277, and total debts of $30,930,195. FREDDIE MAC: To Purchase Delinquent Loans From PC Securities ------------------------------------------------------------ Freddie Mac said Wednesday it will purchase substantially all 120 days or more delinquent mortgage loans from the company's related fixed-rate and adjustable-rate mortgage Participation Certificate securities. The company's purchases of these loans from related PCs should be reflected in the PC factor report published after the close of business on March 4, 2010, and the corresponding principal payments would be passed through to fixed-rate and ARM PC holders on March 15 and April 15, respectively. The decision to effect these purchases stems from the fact that the cost of guarantee payments to security holders, including advances of interest at the security coupon rate, exceeds the cost of holding the nonperforming loans in the company's mortgage-related investments portfolio as a result of the required adoption of new accounting standards and changing economics. In addition, the delinquent loan purchases will help Freddie Mac preserve capital and reduce the amount of any additional draws from the U.S. Department of the Treasury. The purchases would not affect Freddie Mac's activities under the Making Home Affordable Program. In December 2007, Freddie Mac announced operational changes for purchasing delinquent loans from PCs. The company stated that, among other conditions, it will purchase mortgages that are 120 days or more delinquent from PCs when the cost of guarantee payments to security holders, including advances of interest at the security coupon rate, exceeds the cost of holding the nonperforming loans in its portfolio. On January 1, 2010, Freddie Mac adopted new accounting standards for transfers of financial assets and the consolidation of variable interest entities - SFAS 166 and SFAS 167. As a result, the cost of purchasing most delinquent loans from PCs and holding them in portfolio will be less than the cost of continued guarantee payments to security holders. Freddie Mac will continue to review the economics of purchasing loans 120 days or more delinquent in the future and may reevaluate its delinquent loans purchase practices and alter them if circumstances warrant. For more information as of December 31, 2009, on applicable Freddie Mac single-family mortgage loans that are 120 days or more delinquent and related PCs (including PCs owned by the company's mortgage-related investments portfolio), see the table, Delinquency Rates -- Loans in PC Pools, By Loan Origination Year, available on the company's Web site at: http://www.FreddieMac.com/mbs/docs/delinquencyrates021010.pdf Freddie Mac's contemplated purchases of loans that are 120 days or more delinquent will reflect borrower activity through January 31, 2010, on applicable loans. By April 2010, to provide better visibility to PC holders, Freddie Mac expects to disclose in its Monthly Volume Summary the number of loans that are 90 days or more delinquent in related fixed-rate 30-year and 15-year PCs and in ARM PCs. 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. FREDDIE MAC: Guaranteed Mortgage Securities Tumble -------------------------------------------------- Bloomberg News reports that high-coupon mortgage bonds guaranteed by Fannie Mae and Freddie Mac fell after the government-supported home-financing companies said they would step up purchases of delinquent loans from their securities to cut expenses. Investors who buy bonds for more than face value risk losses from the repurchases because they get fewer interest payments than they may have estimated. Fannie Mae and Freddie Mac would pay missed interest to bondholders if they didn't repurchase the loans. As reported by the Troubled Company Reporter, Freddie Mac would buy "substantially all" loans with payments late by 120 days or more from its securities in the next month. Fannie Mae, Bloomberg relates, said later that it will "increase significantly" its buyouts, setting a less aggressive timeline. "Freddie dropped the buyout bombshell this morning," Brian Ye, an analyst at JPMorgan Chase & Co. in New York, said in a note to clients. 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 Fannie Mae 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. GABRIEL COMMUNICATIONS: Moody's Withdraws 'B2' Corp. Family Rating ------------------------------------------------------------------ Moody's Investors Service withdrew the B2 corporate family rating and all other ratings of Gabriel Communications Finance Company, a wholly-owned subsidiary of NuVox, Inc. The action follows repayment in full of NuVox's senior secured credit facility, which occurred in conjunction with the acquisition of NuVox by Windstream Corporation (Ba2 Corporate Family Rating). A summary of the action follows. Gabriel Communications Finance Company -- Probability of Default Rating, Withdrawn, previously rated B3 -- Corporate Family Rating, Withdrawn, previously rated B2 -- Senior Secured Bank Credit Facility, Withdrawn, previously rated B2, LGD3, 33% -- Outlook, Changed To Rating Withdrawn From Rating Under Review Moody's last rating action on NuVox was on November 3, 2009, when Moody's placed ratings under review for upgrade after Windstream announced plans to acquire NuVox. NuVox, headquartered in Greenville, SC, is a CLEC with approximately 90,000 small and medium-sized business customers across 16 states in the Southeast and Midwest. Its annual revenue is approximately $560 million. GENERAL MOTORS: Hummer Sale Deadline Extended to End of Feb. ------------------------------------------------------------ China's Sichuan Tengzhong Heavy Industrial Machinery Co., and General Motors Co. have agreed to postpone until the end of February 2010 a definitive agreement that will allow the Chinese car manufacturer to acquire GM's all-terrain Hummer brand, GM officials told Bloomberg on January 31, 2010. The parties have agreed to extend the January 31 deadline as they await Beijing's approval for the deal to proceed. Sources close to the deal commented that one major challenge that the sale has to go through is to convince Chinese regulators that Hummer can make trucks that are better in terms of fuel and environment conservation than its current lineup, The Wall Street Journal said on February 2. "While the transaction approval process is not proceeding as quickly as originally forecasted, we're optimistic about the progress that has occurred to date," Jim Taylor, Hummer's chief executive officer, told Bloomberg in an e-mailed statement. "There are more than 3,000 people directly employed in the design, build and sale of Hummer vehicles. As such, we are committed to giving the sale every reasonable opportunity toward a successful conclusion," Mr. Taylor added. 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: To Manufacture Own Electric Motors Starting 2013 ---------------------------------------------------------------- General Motors will manufacture its own electric motors to power electric and hybrid vehicles starting in 2013, the Associated Press reported on January 26, 2010. This implies that GM will be needing about 200 more positions to man its hybrid transmission factory in White Marsh, Maryland. To achieve this, GM needs to invest more than $246,000,000 for infrastructure and equipment to enable the plant to produce more than 40,000 of the global rear wheel drive motor units, AP said. Sources close to GM told AP that the company aims to develop a lighter, smaller and more powerful electric motor that the company can install from cars to full-size pickups and sports vehicles. 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: U.S. Sales For January Up by 14% ------------------------------------------------ U.S. dealers for GM's brands, Chevrolet, Buick, GMC and Cadillac, reported retail sales of 102,420, up 3 percent compared to January 2009, and 145,098 total sales (up 30 percent). These results were driven by the continued strong growth of new GM crossovers and passenger cars. For the month, GM dealers reported 146,825 total sales (including other brands), representing a total sales increase of 14 percent from the previous year. "This is the fourth month in a row that Chevrolet, Buick, GMC and Cadillac have shown a collective year-over-year retail sales increase," said Susan Docherty, GM vice president, Sales, Service and Marketing. "Our long-term plan to continue to focus and strengthen our brands is delivering results." Chevrolet, Buick, GMC and Cadillac comprised 98 percent of the company's retail sales in January, compared to 85 percent a year earlier. Retail sales, including other brands, in the U.S. were 104,122 during the month. This represents a 10 percent decline from a year ago, driven by other brand sales -- Pontiac, Saturn, Saab and HUMMER -- that were 90 percent lower. GM dealers delivered 42,703 fleet vehicles, comprising 29 percent of total deliveries for the month. Other Key Facts: * Chevrolet Equinox retail sales increased 67 percent; estimated retail share of the compact crossover segment is up 5 points (Jan. 2009 vs. Jan. 2010) * GMC Terrain retail sales were up 162 percent (compared to the vehicle it replaces, Pontiac Torrent); estimated retail share of the compact crossover segment is up more than 3 points (Jan. 2009 vs. Jan. 2010) * Cadillac SRX retail sales were up 218 percent vs. last year, the fifth consecutive month it has gained more than 100 percent year-over-year; SRX gained approximately 15 points of retail share in the Mid-lux SUV crossover segment (Jan. 2009 vs. Jan. 2010) * In their first year on sale, GM Compact Crossovers -- Chevrolet Equinox and GMC Terrain -- have become the second best selling crossovers in the industry * GM sells more crossovers than any other automaker, representing approximately 20 percent of industry crossovers sold * Buick LaCrosse retail sales were up 142 percent, the fourth consecutive month it has gained more than 100 percent year-over-year; LaCrosse gained an estimated 12 points of retail segment share, making it number one in its segment (Jan. 2009 vs. Jan. 2010) * Chevrolet dealers sold 5,371 Camaros -- the eighth straight month it has outsold Mustang "Our launch vehicles such as the Chevrolet Equinox and Camaro, Buick LaCrosse, GMC Terrain, and Cadillac SRX continue to attract new customers to our brands," Docherty said. "In addition to styling and fuel efficiency, customers have told us they want safe, high quality vehicles. They can have peace of mind knowing that our vehicles come standard with our 5-year, 100,000 mile powertrain warranty and OnStar." Management Discussion of January Sales Results "Global economic recovery is picking up pace," said Mike DiGiovanni, executive director, global market and industry analysis. "In the U.S., we are seeing a strong rebound in manufacturing and stabilization of consumer confidence, which will support a slow but steady improvement in the vehicle market." U.S. Economy * Leading economic indicators point to a continuing recovery in 2010, although risks remain. * Job losses continue to decline, but initial claims of unemployment remain high, indicating continuing reduction in the labor force. Unemployment is likely to stay near 10 percent. * Consumer confidence stabilized at the December level. Consumer vehicle buying attitude is improving, but consumers don't anticipate a strong recovery in jobs and income. * Home prices have stabilized in large parts of the country. Housing starts dropped 4 percent in December, but rising housing permits indicate construction will pick up in coming months * The manufacturing sector continues to expand. Corporate profit reports show the corporate sector is positioned to expand as the economy improves U. S. Auto Industry * The U.S. January 2010 SAAR is estimated to be approximately 11.0 to 11.3 million (total industry estimate) -- largely on par with Q4 2009 sales * Based on the strengthening U.S. economy, we are increasing our 2010 CY sales outlook to 11.5 to 12.0 million (total vehicle) GM North America Production Units 000s Car Truck Total --------------------------- --- ----- ----- 2010 January 69 130 199 Units O/(U) prior year 63 71 134 % change O/(U) prior year 1050% 120% 206% 2010 Q1 237 413 650 Units O/(U) prior year 121 158 279 % change O/(U) prior year 104% 62% 75% GM U.S. Dealer Inventory Units 000s Car Truck Total --------------------------- --- ----- ----- 2010 January 143 247 390 Units O/(U) prior year (220) (192) (411) % change O/(U) prior year (61%) (44%) (51%) Units O/(U) prior month (6) 11 5 % change O/(U) prior month (4%) 4% 1% 2009 December 149 236 385 2009 January 363 439 801 Other Brands Sales Down 90 Percent in January; Represent 1.2 Percent of Sales, 1 Percent of Inventory Saturn, Pontiac, Saab and HUMMER combined volumes represented 1.2 percent of total sales in January, compared with 12 percent in May 2009. Inventories for the combined brands totaled 4,212 units at January month-end, representing a 96 percent decrease compared to the end of May 2009 (112,141 units). Month-End Inventories of Non-Core Brands (May 2009 to Jan. 2010): May 2009 Jan 2010 % Reduction -------- -------- ----------- HUMMER 4,039 2,493 38% Pontiac 70,876 534 99% Saab 4,579 780 83% Saturn 32,647 405 99% 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) GOTTSCHALKS INC: Dimensional Ceases to be Owners of 5% of Stock --------------------------------------------------------------- Dimensional Fund Advisors LP has filed with the Securities and Exchange Commission Amendment No. 3 to its Schedule 13-G which was initially filed on February 2, 2001. The CUSIP Number of the common stock is 383485109. Dimensional Fund discloses that it has ceased to be beneficial owners of 5% or more of Gottschalks Inc.'s common stock. A full-text copy of the amendment no. 3 to Dimensional Fund's SC 13-G is available for free at http://researcharchives.com/t/s?51f5 About Gottschalks Inc. Headquartered in Fresno, California, Gottschalks Inc. (Pink Sheets: GOTTQ.PK) -- http://www.gottschalks.com/-- is a regional department store chain, operating 58 department stores and three specialty apparel stores in six western states. Gottschalks offers better to moderate brand-name fashion apparel, cosmetics, shoes, accessories and home merchandise. The Company filed for Chapter 11 protection on January 14, 2009 (Bankr. D. Del. Case No. 09-10157). O'Melveny & Myers LLP represents the Debtor in its Chapter 11 case. Lee E. Kaufman, Esq., and Mark D. Collins, Esq., at Richards, Layton & Finger, P.A., serves as the Debtors' co-counsel. The Debtor selected Kurtzman Carson Consultants LLC as its claims agent. The U.S. Trustee for Region 3 appointed seven creditors to serve on an official committee of unsecured creditors. When the Debtor filed for protection from its creditors, it listed $288,438,000 in total assets and $197,072,000 in total debts. GRAHAM PACKAGING: Announces Pricing of Initial Public Offering -------------------------------------------------------------- Graham Packaging Company Inc. on Wednesday announced the pricing of its initial public offering of 16,666,667 shares of its common stock at $10.00 per share. The shares were to begin trading on the New York Stock Exchange on February 11, 2009, under the ticker symbol "GRM," and the offering is expected to close February 17, 2010. Graham Packaging has granted the underwriters a 30-day option to purchase up to an additional 2,500,000 shares at the initial public offering price. Graham Packaging expects to contribute the majority of the net proceeds from the offering to its indirect subsidiary, Graham Packaging Company, L.P., to repay a portion of its indebtedness, and the remaining net proceeds primarily to pay a one-time termination fee under Graham Packaging's Monitoring Agreement. Any additional proceeds received as a result of the exercise of the underwriters' option to purchase additional shares will be contributed to the Operating Company to repay additional indebtedness. Citi, Goldman, Sachs & Co. and Deutsche Bank Securities are acting as joint bookrunning managers for the offering. BofA Merrill Lynch, UBS Investment Bank, KeyBanc Capital Markets, Baird and Chapin Davis Inc. are acting as co-managers. A registration statement relating to shares of the common stock of Graham Packaging has been declared effective by the U.S. Securities and Exchange Commission. The offering of these securities will be made only by means of a prospectus, copies of which may be obtained from Citi at Brooklyn Army Terminal, 140 58th Street, 8th Floor, Brooklyn, NY 11220, telephone: (800) 831-9146, email: batprospectusciti.com, Goldman, Sachs & Co. at Prospectus Department, 85 Broad Street, New York, New York 10004, facsimile: 212-902-9316, email: prospectus- ny@ny.email.gs.com and Deutsche Bank Securities Inc., at Attn: Prospectus Department, 100 Plaza One, Jersey City, New Jersey 07311, Tel: (800) 503-4611, email: prospectusrequest@list.db.com About Graham Packaging Headquartered in York, Pennsylvania, Graham Packaging Holdings Company, -- http://www.grahampackaging.com/-- the parent company of Graham Packaging Company, L.P., is engaged in the design, manufacture and sale of customized blow molded plastic containers for the branded food and beverage, household, automotive lubricants and personal care/specialty product categories. As of the end of June 2008, the company operated 83 manufacturing facilities throughout North America, Europe and South America. Graham Packaging's consolidated balance sheets at September 30, 2009, showed $2.067 billion in total assets and $2.937 billion in total liabilities, resulting in a $869.6 million partners' deficit. HALCYON HOLDING: Court OKs Sale of 'Terminator' to Pacificor ------------------------------------------------------------ Alex Dobuzinskis and Emily Chasan at Reuters report U.S. Bankruptcy Judge Ernest Robles in Los Angeles, California, authorized Halcyon Holding Corp. to sell the Terminator movie franchise and other spin-off rights for $29.5 million to Santa Barbara-based hedge fund Pacificor LLC. The Troubled Company Reporter, citing a report by Nikki Finke at Deadline.com, ran a story on February 10 about Pacificor winning the auction. According to Reuters, Judge Robles overruled an objection from Columbia Pictures and Lions Gate Entertainment Corp. who had claimed the auction process was unfair after their joint bid for the franchise was not selected. According to Reuters, Judge Robles held that the transaction would offer the best deal for Halcyon's unsecured creditors. Ben Fritz at Los Angeles Times said Tuesday that Sony and Lions Gate were in talks with Pacificor to jointly take control of the rights to the Terminator movie franchise. According to LA Times, Pacificor, with no experience in the entertainment industry or ability to produce sequels itself, was engaged in discussions with Sony and Lions Gate to handle future "Terminator" films. The parties are still working out potential deal terms. Sources told LA Times that if those talks aren't concluded amicably, Sony and Lions Gate would object to the sale. Pacificor, Halcyon's largest creditor in the bankruptcy, made a winning "credit bid" of $29.5 million on Monday to acquire the franchise. It promised to pay an additional $5 million to Halcyon's bankruptcy estate for each future Terminator sequel created. According to Reuters, Lions Gate and Columbia Pictures, a unit of Sony Corp, made a $35.6 million joint offer and promised to pay the Debtor a further $2 million for each of the sixth and seventh Terminator sequels, but no money for the fifth sequel. Reuters says the movie studios had contested last minute changes that allowed Pacificor to credit bid up to $38 million. According to Reuters, Judge Robles said he believed the Pacificor deal would lead to a better return for Halcyon's unsecured creditors. "They have the most at stake here," Judge Robles said. Halcyon Holding acquired the Terminator franchise in 2007 for about $25 million. It had been working on the concept for a fifth Terminator film when it filed for bankruptcy. FTI Capital Advisors acted as the banker for the auction, Peitzman, Weg & Kempinsky LLP represents Halcyon. Pacificor is represented by Latham & Watkins. The Troubled Company Reporter, citing Bloomberg News, said Halcyon filed for bankruptcy August 17, 2009, the same day it launched a court battle with Pacificor, which provided funding for its film. Halcyon sued Pacificor and one of its former employees. According to the Los Angeles Times, Derek Anderson and Victor Kubiceck, Halcyon's owners, failed to make a payment demanded by Pacificor. In their suit against Pacificor, filed in state court in Los Angeles, Messrs. Anderson and Kubiceck claimed they couldn't make the payment because of a lien Pacificor placed on Dominion Holdings, one of the companies that filed for protection. Halcyon borrowed a total of $39 million from Pacificor and has paid back $15 million, the LA Times said, citing people close to the company. Ms. Finke said Halcyon in its lawsuit accused Pacificor of extortion, bribery, and fraud and demanded $30 million in damages. Halcyon Holding Group LLC is the company that produced "Terminator Salvation," a film that generated $369 million in box office receipts. Halcyon Holding Group LLC and two affiliated companies filed Chapter 11 petitions on Aug. 17 in Los Angeles, California (Bankr. C.D. Calif. Case No. 09-31854). Halcyon said it has between $50 million and $100 million in both assets and debts. HARTMARX CORP: Proposes Lee & Associates as Broker -------------------------------------------------- Hartmarx Corp. is seeking approval from the U.S. Bankruptcy Court to employ Lee & Associates of Illinois as real estate broker. The Debtor proposes to pay the firm a commission consisting of 6% of the gross sale price with respect to improved real estate and 8% of the gross sale price with respect to vacant land. Based in Chicago, Illinois, Hartmarx Corporation -- http://www.hartmarx.com/-- produced and marketed business, casual, and golf apparel under its own brands, which included Hart Schaffner Marx, Hickey-Freeman, Palm Beach and Coppley among others. A drop off in demand for tailored clothing led to poor sales. The company and 51 affiliates sought Chapter 11 bankruptcy protection on January 23, 2009 (Bankr. N.D. Ill. Lead Case No. 09-02046). George N. Panagakis, Esq., Felicia Gerber Perlman, Esq., and Eric J. Howe, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for bankruptcy, they listed $483,108,000 in total assets and $261,220,000 in total debts as of August 31, 2008. HAWKER BEECHCRAFT: Has $712 Million Operating Loss for 2009 ----------------------------------------------------------- Hawker Beechcraft Acquisition Company LLC reported net sales of $3.2 billion and an operating loss of $712.0 million for the 12 months ended Dec. 31, 2009, compared with net sales of $3.5 billion and an operating income of $140.3 million for the same period in 2008. The Company disclosed $3.74 billion in total assets against $3.62 billion in total liabilities, resulting to a $120 million stockholders' equity, as of Dec. 31, 2009. In addition to lower sales, the Company's 2009 operating income was impacted by significant non-cash impairment and other charges totaling $726.4 million recorded during the third quarter 2009. Despite the lower operating income, cash flow from operations for 2009 was $177.1 million compared to cash consumed in operations of $69.0 million in 2008. The 2009 sales were affected by lower volume in the Company's Business & General Aviation segment as a result of weakness in the general aviation market throughout the year. B&GA sales for 2009 were $2.3 billion, compared to $2.8 billion in 2008. The Company delivered 309 business and general aviation aircraft during 2009, consisting of 98 jet, 155 turboprop and 56 piston aircraft. This compares to 441 deliveries during 2008. Details of the deliveries in the fourth quarter and for full year 2009, along with the comparable periods in 2008, are included in the Appendix. Trainer Aircraft segment sales were $531.3 million for 2009, compared to $338.2 million in 2008. The $193.1 million increase was the result of increased production volume in support of higher trainer aircraft deliveries. Volume in 2008 was impacted by the previously disclosed June 2008 suspension of deliveries, pending resolution of quality issues with a supplier's component. Deliveries resumed in January 2009. Sales in the Company's Customer Support segment for 2009 were $438.3 million, compared to $522.8 million in 2008. In addition to lower general aviation aircraft usage as a result of recent economic conditions, Customer Support segment sales were also impacted by the sale of the Company's fuel and line operations during 2008. 2008 sales included $48.5 million related to the fuel and line operations subsequently sold. The $712.0 million operating loss for 2009 was heavily impacted by $726.4 million of impairment and other charges recorded during the third quarter. Excluding these charges, operating income was $14.4 million for 2009. The decline, compared to the prior year operating income of $140.3 million, is primarily due to the downturn in the B&GA segment as a result of the overall economic conditions. The Appendix includes a presentation of adjusted earnings before interest, tax, depreciation and amortization (Adjusted EBITDA). Adjusted EBITDA is a non-GAAP measure the Company believes is useful in evaluating the ability of issuers of "high-yield" securities to meet their debt service obligations. This measure is not intended as a substitute for an evaluation of results under GAAP and has been reconciled to its closest GAAP measure, Income Before Tax, in the Appendix. Adjusted EBITDA, as presented, was $127.3 million for 2009. On Dec. 14, 2009, the Company provided 2009 earnings guidance of an operating loss range of $725.0 million to $740.0 million and Adjusted EBITDA range, determined on the same basis as presented in the Appendix, of $95.0 million to $110.0 million. The Company's 2009 net operating loss and Adjusted EBITDA were better than the prior guidance due primarily to better than expected performance in a number of areas, including final aircraft delivery volume. Cash flow from operations was $177.1 million for the full year 2009, compared to cash consumed of $69.0 million in 2008. The favorable cash performance was despite lower overall earnings and reflects sharply reduced inventory on-hand as a result of aircraft delivered during the year, as well as lower material receipts. In addition, improved inventory management and ongoing cost reduction efforts throughout the Company favorably impacted operating cash flow. The Company's cash balance at Dec. 31, 2009, was $568.8 million. Subsequent to year end, the Company used a portion of its cash balance to fully repay the $235.0 million previously borrowed under its revolving credit facility. The revolving credit facility remains available for future borrowings as needed. A full-text copy of the Company 2009 report on Form 10-K is available for free at http://ResearchArchives.com/t/s?521f About Hawker Beechcraft Hawker Beechcraft Acquisition Company, LLC, headquartered in Wichita, Kansas, is a leading manufacturer of business jets, turboprops and piston aircraft for corporations, governments and individuals worldwide. * * * According to the Troubled Company Reporter on Feb. 1, 2010, Participations in a syndicated loan under which Hawker Beechcraft is a borrower traded in the secondary market at 75.21 cents-on- the-dollar during the week ended Friday, Jan. 29, 2010, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents a drop of 0.93 percentage points from the previous week, The Journal relates. The Company pays 200 basis points above LIBOR to borrow under the facility. The bank loan matures on March 26, 2014, and carries Moody's Caa1 rating and Standard & Poor's CCC+ rating. The debt is one of the biggest gainers and losers among widely quoted syndicated loans in secondary trading in the week ended Friday among the 172 loans with five or more bids. HIGH ROCK HOLDING: Files Schedules of Assets and Liabilities ------------------------------------------------------------ High Rock Holding, LLC, filed with the U.S. Bankruptcy Court for the District of Nevada its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $0 B. Personal Property $29,112 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $12,287,016 E. Creditors Holding Unsecured Priority Claims $0 F. Creditors Holding Unsecured Non-priority Claims $5,776,491 ----------- ----------- TOTAL $29,112 $18,063,507 Carson City, Nevada-based High Rock Holding, LLC, filed for Chapter 11 bankruptcy protection on November 8, 2009 (Bankr. D. Nev. Case No. 09-53989). Kenneth D. Sisco, Esq., at Sisco& Naramore 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. HSH DELAWARE: Has $5 Million Financing from Flowers --------------------------------------------------- Bill Rochelle at Bloomberg News reports that HSH Delaware GP LLC and affiliates scheduled a Feb. 24 hearing for preliminary approval of $5 million in secured financing to pay bills during the reorganization. The loan would have a lien prior to the existing lenders' security interests. The EUR1.25 billion (US$1.76 billion) purchase price was financed in part with a EUR375 million loan from ABN Amro Bank NV, London Branch. About HSH Delaware HSH Delaware GP LLC, and six affiliates filed for Chapter 11 on January 21, 2010 (Bankr. D. Del. Case No. 10-10187). Nine HSH partnerships were created in 2006 to buy a 26% stake in HSH Nordbank AG, the world's largest shipping financier, from WestLB AG for about EUR1.25 billion ($1.76 billion). The partnerships received unsecured term and revolving loans of EUR375 million from ABN AMRO bank to fund the purchase of HSH Nordbank shares. In September 2009, creditors with claims aggregating $27.8 million filed a petition to send affiliate HSH Delaware LP to Chapter 7 liquidation (Bankr. D. Del. Case No. 09-13145). Commerzbank AG, Lloyds TSB Bank Plc, ABN Amro Bank NV, Calyon, Royal Bank of Scotland Plc and Landsbanki Islands HF filed the involuntary Chapter 7 petition. John Henry Knight, Esq., and Lee E. Kaufman, Esq., at Richards, Layton & Finger, P.A., represent HSH Delaware GP and its affiliates. McCarthy Tetrault LLP is the Canadian counsel. H Ronald Weissman is the chief restructuring officer. HSH, based in Wilmington, Delaware, listed as much as $500 million in both assets and debt in Chapter 11 documents filed in Bankruptcy Court. According to Reuters, people familiar with the bankruptcy said the partnerships had total assets of $680 million. IMPERIAL HOMES: Files for Chapter 7 Liquidation ----------------------------------------------- Imperial Homes Texas Ltd. filed for Chapter 7 liquidation on Feb. 9 (Bankr. S.D. Tex. Case No. 10-31140), listing assets of $5 million against debt totaling $11.6 million. Imperial Homes Texas Ltd. is Houston-area builder, owning nine homes and 35 lots. INTERNATIONAL ALUMINUM: Creditors Committee Fails to Halt Plan -------------------------------------------------------------- Bill Rochelle at Bloomberg News reports that the Official Committee of Unsecured Creditors in International Aluminum Corp.'s cases failed in its effort at slowing confirmation of the prepackaged reorganization. The Committee, in a motion on Jan. 22, asked 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 RECTIFIER: Fitch Affirms 'BB' Issuer Default Rating ----------------------------------------------------------------- Fitch Ratings has affirmed International Rectifier Corp.'s 'BB' Issuer Default Rating and revised the Rating Outlook to Stable from Negative. The rating and Outlook reflect Fitch's expectations for IR's operating performance and free cash flow to meaningfully improve over the near-term, driven by a healthier operating environment and strong new order patterns for its power management semiconductors. Fitch also anticipates the company will benefit from its ongoing restructuring initiatives, which should provide meaningful operating leverage within the context of even modest revenue growth. Fitch believes the company will be challenged to return profitability to cycle peak levels (in the mid-20%) over the next few years, given IR's increased emphasis on its lower gross margin Power Management Devices segment and outsourcing initiatives. Nonetheless, Fitch anticipates operating EBITDA margin will approach and potentially exceed 10% in fiscal year 2010, versus 2.5% in the prior fiscal year, and reach the mid- teens beyond the near-term. Fitch believes free cash flow likely will be modestly negative for the full fiscal year 2010, driven mostly by cash payments related to settling outstanding litigation and restructuring charges. Nonetheless, Fitch anticipates modestly positive annual free cash flow beyond the current full fiscal year ending on approximately June 30, 2010, due to the combination of higher anticipated profitability and Fitch's belief that IR will maintain capital spending at or below 6% of annual sales versus 10% historically and more than 15% for the broader semiconductor industry. Capital spending likely will be slightly elevated from maintenance levels over the next few years, as the company implements a new enterprise resource planning system and facilities capacity for its gallium nitride platform production capabilities. This will be partially offset over time by IR's efforts to increase manufacturing outsourcing to approximately 30% from approximately 2% of total output. The ratings and Outlook incorporate Fitch's expectations that the company will remediate its material weaknesses related to its historical accounting issues and subsequent financial reporting restatements over the near-term. Remediation of the material weaknesses represents the last step in resolving these legacy issues, following the Securities and Exchange Commission's (SEC) recent announcement that it had concluded its investigation and does not intend to recommend any enforcement action against IR. The ratings and Outlook contemplate Fitch's belief that IR's capital structure will not remain debt-free over the longer-term and proceeds of any issuance would most likely be used for share repurchases (or some other form of shareholder friendly distribution) or consolidating acquisitions, given the fragmented nature of the power management semiconductor market. Fitch believes that the former is more likely, given the current rich valuations for potential acquisitions and IR's announcement that it will provide more visibility into its intended use of cash to deliver shareholder value in the coming months. IR has approximately $65 million remaining outstanding under the up to $100 million share repurchase program authorized in October 2008. Fitch estimates IR's minimum operating cash levels currently are approximately $200 million, given that the company currently does not have a revolving credit facility. The ratings are supported by: -- IR's leading positions in a variety of end markets for power management semiconductors and increased electronics penetration and adoption of more energy efficient devices. -- The relatively low technology risk and capital spending requirements associated with power management semiconductors. -- Diversified customer, end market and product portfolios. Ratings concerns center on IR's: -- Modest free cash flow profile. -- Relatively limited scale, potentially constraining opportunities for market share consolidation. -- Lack of clarity on financial policies. -- Operating volatility associated with significant industry cyclicality. Fitch may take negative rating actions if: -- IR meaningfully depletes cash balances via accelerating share repurchases; -- annual free cash flow remains negative through the intermediate-term, likely stemming from a combination of market share erosion, the inability to expand profit margins, or excess inventory levels within the context of a meaningfully slower than expected macroeconomic recovery. Fitch believes positive rating actions are unlikely over the near- term, however, could be achieved through IR generating meaningfully stronger than anticipated annual free cash flow over the longer-term, likely from a combination of substantially reduced capital spending associated with the company's efforts to outsource manufacturing, the consolidation of market share, or strong adoption of its GaN technology platforms. Fitch believes IR's liquidity position was sufficient as of Dec. 27, 2009, and supported by: -- $209 million of cash and cash equivalents; -- $337 million of short- and long-term investments. Fitch believes free cash flow will be modestly negative in fiscal year 2010 (approximately $50 million) but modestly positive beyond fiscal year 2010, driven by expectations for improved profitability and lower than historical capital spending. ISACK ROSENBERG: New York Court Tosses Out Deal With Capital One ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of New York dismissed the agreement between the developers Isack Rosenberg and Yitzchak Schwartz, and Capital One that would extend the deadline for the developers to purchase the debt on a 120-condo unit by March 31, 2010, according to Amanda Fung at Crain's New York Business. Crain's, citing papers filed with the Court, reported that Mr. Rosenberg had the $30 million amount necessary to pay for Warehouse 11 and was ready to pay a month before the March 31 deadline but Capital One rejected the tender. Isack Rosenberg filed a Chapter 11 petition (Bankr. E.D.N.Y. Case No. 09-46326) on July 28, 2009. A copy of his petition is available at http://bankrupt.com/misc/nyeb09-46326.pdfat no charge. The Debtor's assets consist primarily of ownership interests in a number of businesses, including Certified Lumber Corporation and Boro Park Home Center, lumber and hardware businesses, as well as other entities engaged in the development of real estate. One such entity is McCaren Park Mews, LLC, of which the Debtor owns 50%. McCaren owns an unfinished condominium project in Williamsburg, Brooklyn. Capital One, N.A., holds a mortgage and security interest on McCaren's assets, securing debt in the approximate amount of $50 million. The Debtor and Yitzchok Schwartz, the owner of the other half of the equity interest in McCaren, each have guaranteed the McCaren Debt. Other creditors of the Debtor include RCGLV Maspeth LLC, RCG Longview II, L.P., and Galster Funding, LLC, which individually or collectively hold a security interest in the Debtor's ownership interest in various entities, including McCaren. Judge Craig appointed an Examiner in the Debtor's case on Nov. 5, 2009. ITC^DELTACOM INC: Withdraws Notes Offering Amid Weak Market ----------------------------------------------------------- ITC^DeltaCom, Inc., said Wednesday that, in light of current market conditions, it is withdrawing its private offering of senior secured notes to institutional investors. "The proposed transaction was intended to opportunistically refinance our existing indebtedness with fixed rate senior secured notes," commented Richard Fish, ITC^DeltaCom's Chief Financial Officer. "When we initially embarked on this process, the anticipated cost of capital for the new senior secured notes was in the range of 9% to 9.5%. However, as a result of the significantly weaker market conditions that have occurred over the last several days, the pricing on the new senior secured notes would have increased by an additional 2% to 2.5%. Clearly, given that the company's current cost of capital is approximately 5%, the operational flexibility that would have been provided by the new senior secured notes is significantly outweighed by the estimated new cost of capital. Accordingly, the proposed refinancing is unattractive at this time." As reported by the Troubled Company Reporter on February 4, 2010, Moody's Investors Service assigned a B3 rating to ITC^DeltaCom's proposed $325 million second lien senior secured notes due 2016, assigned a Ba3 rating to the proposed $30 million first lien senior secured revolving credit facility due 2015, affirmed the B3 corporate family rating, and upgraded the speculative grade liquidity rating to SGL-1 from SGL-2. The fundamental rating outlook was revised to positive from stable. The ratings on the existing senior secured credit facilities were expected to be withdrawn upon completion of the transaction. Moody's said it would consider an upgrade if the company is successful in further transforming its revenue mix, with expectations for leverage sustained below 3.5x and free cash flow in excess of 5% of debt. Moody's previous rating action for Deltacom occurred on September 4, 2008, when Moody's affirmed the B3 corporate family rating. About Itc^DeltaCom Headquartered in Huntsville, Alabama, ITC^DeltaCom, Inc. (OTC Bulletin Board: ITCD) -- http://www.deltacom.com/-- provides, through its operating subsidiaries, integrated telecommunications and technology services to businesses and other communications providers in the southeastern United States. ITC^DeltaCom offers a comprehensive suite of voice and data communications services, including local, long distance, broadband data, Internet connectivity, wireless voice and data services, and customer premise equipment. ITC^DeltaCom is one of the largest competitive telecommunications providers in its primary eight-state region. JAPAN AIRLINES: Announces New Executive Officers ------------------------------------------------ The Japan Airlines Group announced the formation of a new executive management team for the holding company, Japan Airlines Corporation (JALS), and of its main operating company Japan Airlines International (JALI) with effect from February 8, 2010. In pursuit of a more streamlined management structure, the position of managing executive officer will be removed and the number of executive officers reduced by 11 from the previous team. With a younger, slimmer top management that is expected to comprehensively draw up and speedily implement effective measures, the JAL Group is determined to achieve a swift revitalization of the company. Under the new leadership of Mr. Kazuo Inamori as the JAL Group chairman, and Mr. Masaru Onishi as president, both assuming office from February 1, 2010, the newly-appointed board members, executive officers, and every employee of the JAL Group will work collectively as one to continue offering customers flights of the highest safety and service levels. Executive Officers of Japan Airlines Corporation Co. Ltd and Japan Airlines International Co. Ltd Name Title Assignments ---- ----- ----------- Kazuo Inamori Chairman Masaru Onishi President JAL Group COO; Chairman of Safety Enhancement Task Force / Customer Satisfaction Improvement Committee / Corporate Culture Reformation Committee / CSR Committee / Global Environmental Committee / Corporate Compliance and Business Risk Management Committee Hisao Taguchi Executive Assistant to the President / Vice Internal Control / Customer President Satisfaction Improvement / Executive Secretariat Office Hiroyasu Omura Senior Human Resource Management / Managing Industrial Relations / Medical Executive Services Officer Chihiro Tamura Senior General Manager, Corporate Safety Managing & Security Division / Family Executive Assistance & Support / Corporate Officer Culture Reformation / Environmental Affairs Hirohide Kamikawa Executive Regional Manager, Tokyo & Eastern Officer Japan Kunio Hirata Executive Cargo & Mail / President of JAL Officer Cargo Sales Shigemi Kurusu Executive General Manager, Corporate Officer Planning Hiroshi Ikeda Executive President of JALways Officer Yoshiharu Ueki Executive General Manager, Flight Operations Officer Division Tatsuhito Saikawa Executive Deputy General Manager, Flight Officer Operations Division / Vice President, Flight Planning and Administration, Flight Operations Division Tadao Sakai Executive Deputy General Manager, Corporate Officer Safety & Security Division Tetsuro Sugawa Executive Airport Operations Division / Officer President of JAL Sky Tsutomu Ando Executive International Affairs Division / Officer China Business Development Eiichi Yamaguchi Executive Regional Manager, Osaka & Western Officer Japan / President of JAL Sales Western Japan Susumu Fukushima Executive Regional Manager Narita / Officer Executive Vice President of JAL Sky / Vice President, Narita Airport Nobuhiro Sato Executive General Manager, Engineering & Officer Maintenance Division / President of JAL Engineering Takashi Saito Executive Deputy General Manager, Officer Engineering & Maintenance Division / Maintenance Planning & Administration Office Manabu Sato Executive Vice President, Office of the Officer Trustees Yoshito Shimizu Executive President of JAL EXPRESS Officer Tsuyoshi Yamamura Executive President of J-AIR Officer Junko Okawa Executive Cabin Attendants Division Officer Toshio Shinohara Executive Executive Vice President of JAL Officer Sky, Vice President Haneda Airport Norikazu Saito Executive Finance & Investor Relations / Officer Accounting / Internal Control Tadashi Fujita Executive Passenger Sales & Marketing Officer Division / Asia & Oceania Toshiyuki Executive Purchasing Kawarabata Officer Arata Yasujima Executive President of Japan Air Commuter Officer Toshiaki Norita Executive Personnel Officer Ryuzo Toyoshima Executive General Administration / Public Officer Relations / Strategic Corporate Relations / Legal Affairs and Compliance Hideki Kikuyama Executive Deputy General Manager, Corporate Officer Planning Hideo Ninomiya Executive IT Services & Planning / Internal Officer Control Retirements from the board with effect from February 7, 2010 Name Title ---- ----- Katsuhiko Nawano Executive Vice President Tetsuya Takenaka Executive Vice President Kiyoshi Kishida Executive Vice President Susumu Miyoshi Senior Managing Executive Officer Masato Uehara Senior Managing Executive Officer Toshio Annaka Managing Executive Officer Shunichi Saito Managing Executive Officer Masaaki Haga Managing Executive Officer Atsuro Nishi Managing Executive Officer Tetsuo Takahashi Executive Officer Yoshimasa Kanayama Executive Officer Toshinari Oshima Executive Officer Takahiro Kato Executive Officer Yuji Okada Executive Officer Muneyuki Mitsui Executive Officer Toshio Takahashi Executive Officer Ichiro Morii Executive Officer Katsuaki Suzuki Executive Officer Yoriko Nagata Executive Officer Yoshio Imajo Executive Officer Keizaburo Yokota Executive Officer Kazuhiko Nishi Executive Officer These persons will remain in the company with their respective assignments: * Takahiro Kato - Regional Manager, Nagoya & Central Japan * Yuji Okada - CEO for Europe, Middle East & Africa Vice President & Regional Manager, UK and Ireland * Keizaburo Yokota - Vice President & Regional Manager, Beijing * Kazuhiko Nishi - Deputy Regional Manager, Tokyo & Eastern Japan / Corporate Accounts About Japan Airlines Japan Airlines Corporation -- http://www.jal.co.jp/-- is a Japan-based company mainly engaged in the provision of air transport services. The Company is active in five business segments through its 203 subsidiaries and 83 associated companies. JAL International Co. Ltd. is a wholly owned operating subsidiary of Japan Airlines Corporation. * * * Japan Airlines Corporation, Japan Airlines International Co., Ltd. and JAL Capital Co., Ltd., on January 19, 2010, filed the petitions to commenced corporate reorganization proceedings with the Tokyo District Court. The Court appointed the Enterprise Turnaround Initiative Corporation of Japan and Eiji Katayama, Esq., as reorganization trustees. Japan Airlines Corp. filed for reorganization January 19 in the Tokyo District Court and filed a Chapter 15 petition in New York (Bankr. S.D.N.Y. Case No. 10-10198). The Company said debt is $28 billion. Bankruptcy Creditors' Service, Inc., publishes Japan Airlines Bankruptcy News. The newsletter tracks the Chapter 15 proceedings and the bankruptcy proceedings in Tokyo undertaken by Japan Airlines Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) JAPAN AIRLINES: Applies for Revision of IATA Normal Fares ---------------------------------------------------------- The JAL Group filed an application with the Japanese Ministry of Land Infrastructure, Transport & Tourism (MLIT) requesting a revision of IATA international normal and PEX airfares applicable for Japan departures to Europe, Middle East and Oceania (Australia and New Zealand). The application for fares to North America, Central and South America, Hawaii, Southeast Asia and India from Japan was submitted on December 25, 2009. The revisions will take effect from April 1, 2010, pending government approval. About Japan Airlines Japan Airlines Corporation -- http://www.jal.co.jp/-- is a Japan-based company mainly engaged in the provision of air transport services. The Company is active in five business segments through its 203 subsidiaries and 83 associated companies. JAL International Co. Ltd. is a wholly owned operating subsidiary of Japan Airlines Corporation. * * * Japan Airlines Corporation, Japan Airlines International Co., Ltd. and JAL Capital Co., Ltd., on January 19, 2010, filed the petitions to commenced corporate reorganization proceedings with the Tokyo District Court. The Court appointed the Enterprise Turnaround Initiative Corporation of Japan and Eiji Katayama, Esq., as reorganization trustees. Japan Airlines Corp. filed for reorganization January 19 in the Tokyo District Court and filed a Chapter 15 petition in New York (Bankr. S.D.N.Y. Case No. 10-10198). The Company said debt is $28 billion. Bankruptcy Creditors' Service, Inc., publishes Japan Airlines Bankruptcy News. The newsletter tracks the Chapter 15 proceedings and the bankruptcy proceedings in Tokyo undertaken by Japan Airlines Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) JAPAN AIRLINES: Discloses Route & Flight Frequency Plan for 2010 ---------------------------------------------------------------- The JAL Group announced, its route, flight frequency and fleet plan for international and domestic passenger operations as well as international cargo operations for the first half of FY2010, the period ending September 30, 2010. In formulating the JAL Reorganization Plan with a sharp focus on improving profitability, JAL will closely evaluate market situations and effectively capitalize on the up-coming expansion of airports in Tokyo. JAL will continue striving towards improving profitability with unwavering commitment to offer customers the highest levels of safety, on-time performance and service. About Japan Airlines Japan Airlines Corporation -- http://www.jal.co.jp/-- is a Japan-based company mainly engaged in the provision of air transport services. The Company is active in five business segments through its 203 subsidiaries and 83 associated companies. JAL International Co. Ltd. is a wholly owned operating subsidiary of Japan Airlines Corporation. * * * Japan Airlines Corporation, Japan Airlines International Co., Ltd. and JAL Capital Co., Ltd., on January 19, 2010, filed the petitions to commenced corporate reorganization proceedings with the Tokyo District Court. The Court appointed the Enterprise Turnaround Initiative Corporation of Japan and Eiji Katayama, Esq., as reorganization trustees. Japan Airlines Corp. filed for reorganization January 19 in the Tokyo District Court and filed a Chapter 15 petition in New York (Bankr. S.D.N.Y. Case No. 10-10198). The Company said debt is $28 billion. Bankruptcy Creditors' Service, Inc., publishes Japan Airlines Bankruptcy News. The newsletter tracks the Chapter 15 proceedings and the bankruptcy proceedings in Tokyo undertaken by Japan Airlines Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) JOANNE SANDBLOM: Files Schedules of Assets and Liabilities ---------------------------------------------------------- Joanne M. Sandblom filed with the U.S. Bankruptcy Court for the Northern District of Illinois its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $1,055,000 B. Personal Property $27,702,535 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $31,363,565 E. Creditors Holding Unsecured Priority Claims $195,000 F. Creditors Holding Unsecured Non-priority Claims $35,998 ----------- ----------- TOTAL $28,757,535 $31,594,563 Algonquin, Illinois-based Joanne M. Sandblom filed for Chapter 11 bankruptcy protection on January 4, 2010 (Bankr. N.D. Ill. Case No. 10-70005). Ms. Sandblom's affiliates, Boulevard Shoppes, LLC, and Oakridge Development Co., each filed bankruptcy petitions last year. James E. Stevens, Esq., at Barrick, Switzer, Long, Balsley & Van Ev, assists Ms. Sandblom in her restructuring effort. Ms. Sandblom listed $10,000,001 to $50,000,000 in assets and $10,000,001 to $50,000,000 in liabilities. LAKE AT LAS VEGAS: Former Owners Balk at Bankruptcy-Exit Plan ------------------------------------------------------------- ABI reports that Lake Las Vegas is facing a number of objections to its plan to exit bankruptcy under the control of Texas investment firm Highland Capital Management. The confirmation hearing for approval of the reorganization plan of Lake at Las Vegas Joint Venture LLC is currently scheduled for April 13. The Debtors have yet to begin soliciting votes on the Plan. They will begin soliciting votes on the Plan following approval of the adequacy of the information in the Disclosure Statement. The Debtors propose a hearing on the adequacy of information in the Disclosure Statement on February 16, 2010, at 1:30 p.m. (Pacific time.) According to the amended Disclosure Statement, the Plan provides for holders of general unsecured claims to receive their ratable share of a $1 million fund (after expenses) and up to 10% of the net proceeds of the Debtors' litigation claims. As reported in the Troubled Company Reporter on October 15, 2009, general unsecured creditors will receive their ratable share of a $1 million fund and the 6-2/3% share of the litigation recoveries from the creditor trust. Solely for the purposes of the Plan, the assets, claims, and affairs of the Debtors and their estates will be substantively consolidated. In effect, all general unsecured creditors accepting the Plan will receive the same ratable distribution, without regard to which Debtor they have a claim against. A Creditor Trust will be created to hold and prosecute the Debtors' claims against the former insiders and certain avoidance actions, including fraudulent transfer and preference actions. Obligations required to be satisfied in cash under the Plan on and after the Effective Date will be satisfied from the Reorganized Debtors' cash on hand, including the remaining proceeds of the DIP Facility, the lease or sale of assets, revenues, and the proceeds of the exit facility. A full-text copy of the Disclosure Statement is available at: http://bankrupt.com/misc/LakeatLas_AmendedDS.pdf A full-text copy of the Plan is available for free at: http://bankrupt.com/misc/LakeatLas_AmendedPlan.pdf About Lake at Las Vegas Headquartered in Henderson, Nevada, Lake at Las Vegas Joint Venture, LLC and 14 of its debtor-affiliates -- http://www.lakelasvegas.com/-- are owners and developers of 3,592-acre residential and resort destination Lake Las Vegas Resort in Las Vegas, Nevada. Centered around a 320-acre man-made lake, Lake Las Vegas contains more than 9,000 residential units, and also includes two luxury resort hotels (a Loews and a Ritz- Carlton), a casino, a specialty retail village shopping area, marinas, three signature golf courses and related clubhouses, and other real property. The Debtors filed separate petitions for Chapter 11 relief on July 17, 2008 (Bankr. D. Nev. Lead Case No. 08-17814). When Lake at Las Vegas Joint Venture, LLC, filed for protection from its creditors, it listed assets of $100 million to $500 million, and debts of $500 million to $1.0 billion. Courtney E. Pozmantier, Esq., Martin R. Barash, Esq., at Klee, Tuchin, Bogdanoff & Stern LLP, Jason D. Smith, Esq., at Santoro, Driggs, Walch, Kearney, Holley & Thompson, Jeanette E. McPherson, Esq., Lenard E. Schwartzer, Esq., at Schwartzer & McPherson Law Firm, represent the Debtors as counsel. Kaaran E. Thomas, Esq., Ryan J. Works, Esq., at McDonald Carano Wilson LLP, represent the Official Committee of Unsecured Creditors as counsel. LANDAMERICA FIN'L: Dimensional Stake Down to 300 Shares ------------------------------------------------------- Dimensional Fund Advisors LP has filed with the Securities and Exchange Commission Amendment No. 10 to its Schedule 13G which was initially filed on February 2, 2001. The CUSIP number of the common stock is 514936103. Dimensional Fund Advisors LP disclosed that it may be deemed to beneficially own shares of LandAmerica Financial Group, Inc.'s common stock: Shares Beneficially Company Owned Percentage ------- ------------ ---------- Dimensional Fund Advisors LP 300 0% Dimensional Fund Advisors LP, an investment adviser registered under Section 203 of the Investment Advisors Act of 1940, furnishes investment advice to four investment companies registered under the Investment Company Act of 1940, and serves as investment manager to certain other commingled group trusts and separate accounts (such investment companies, trusts and accounts, collectively referred to as the "Funds"). In certain cases, subsidiaries of Dimensional Fund Advisors LP may act as an adviser or sub-adviser to certain Funds. In its role as investment advisor, sub-adviser and/or manager, neither Dimensional Fund Advisors LP or its subsidiaries possess voting and/or investment power over the securities of the Issuer that are owned by the Funds, and may be deemed to be the beneficial owner of the shares of the Issuer held by the Funds. However, all securities reported in this schedule are owned by the Funds. Dimensional Fund and its subsidiaries disclaim beneficial ownership of such securities. In addition, the filing of this Schedule 13G shall not be construed as an admission that the reporting person or any of its affiliates is the beneficial owner of any securities covered by this Schedule 13G for any other purposes than Section 13(d) of the Securities Exchange Act of 1934. A full-text copy of Dimensional Fund's amended Schedule 13G is available for free at http://researcharchives.com/t/s?5220 About LandAmerica Financial LandAmerica Financial Group, Inc., provides real estate transaction services with offices nationwide and a vast network of active agents. LandAmerica and its affiliates operate through approximately 700 offices and a network of more than 10,000 active agents throughout the world, including Mexico, Canada, the Caribbean, Latin America, Europe, and Asia. LandAmerica Financial Group and its affiliate LandAmerica 1031 Exchange Services, Inc. filed for Chapter 11 protection Nov. 26, 2008 (Bankr. E.D. Va. Lead Case No. 08-35994). Attorneys at Willkie Farr & Gallagher LLP and McGuireWoods LLP serve as co- counsel. Zolfo Cooper is the restructuring advisor. Epiq Bankruptcy Solutions serves as claims and notice agent. Attorneys at Akin Gump Strauss Hauer & Feld LLP and Tavenner & Beran, PLC, serve as counsel to the Creditors Committee of 1031 Exchange. Bingham McCutchen LLP and LeClair Ryan serve as counsel to the Creditors Committee of LFG. In its bankruptcy petition, LFG listed total assets of $3,325,100,000, and total debts of $2,839,800,000 as of Sept. 30, 2008. On March 6, 2009, affiliate LandAmerica Assessment Corporation, aka National Assessment Corporation, filed its own petition for Chapter 11 relief. Affiliate LandAmerica Title Company filed for for Chapter 11 relief on March 27, 2009. LandAmerica Credit Services, Inc., filed for Chapter 11 in July 2009. Bankruptcy Creditors' Service, Inc., publishes LandAmerica Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by LandAmerica Financial and its affiliate LandAmerica 1031 Exchange Services, Inc. (http://bankrupt.com/newsstand/or 215/945-7000) LANDAMERICA FIN'L: OneStop Plan Gets 86.36% Creditors' Acceptance ----------------------------------------------------------------- The scheduled hearing by which Debtor LandAmerica OneStop, Inc., will seek confirmation of the Chapter 11 Plan filed by LandAmerica Financial Group, Inc. and its debtor affiliates as to its own case is set to commence on February 9, 2010, at 10:00 a.m. Eastern Time, before the U.S. Bankruptcy Court for the Eastern District of Virginia. In connection with the OneStop Confirmation Hearing, Epiq Bankruptcy Solutions LLC Senior Consultant Christina Pullo delivered to the Court the results of the solicitation of votes on the Joint Chapter 11 Plan of LandAmerica Financial Group, Inc. and its affiliated debtors from the creditors of OneStop. The deadline for OneStop creditors to send in their ballots was January 29, 2010. The OneStop Disclosure Statement Order provides that only holders of Claims in Class SD 3 General Unsecured Claims are entitled to vote to accept or reject the Plan. Ms. Pullo says the tabulation reflects the exclusion of votes, if any, cast on ballots for which the underlying Claim was the subject of an objection filed with the Court on or before January 8, 2010, except to the extent allowed for voting purposes pursuant to an order of the Court. The aggregate results of the tabulation of the OneStop creditor votes are: | | TOTAL BALLOTS RECEIVED | | | ACCEPT | REJECT | | CLASS | AMOUNT | NUMBER | AMOUNT | NUMBER | | SD 3 | $615,612.06 | 19 | $7,647.25 | 3 | | LandAmerica | 98.77% | 86.36% | 1.23% | 13.64% | | OneStop, | | | | | | Inc. | | | | | A ballot report included in the Vote Tabulation is available for free at http://bankrupt.com/misc/OneStop_ConformingBallots.pdf A ballot report not included in the Vote Tabulation is available for free at: http://bankrupt.com/misc/OneStop_NonConformingBallots.pdf Also in light of the upcoming Confirmation Hearing, LFG Chief Restructuring Officer Jonathan A. Mitchell filed a declaration and the Debtors filed a memorandum of law on February 8, 2010, all in support of the plan confirmation OneStop seeks from the Court. Under his declaration, Mr. Mitchell asserts that the Plan satisfies all of the applicable confirmation requirements contained in the Bankruptcy Code; and that due and adequate notice of the OneStop Confirmation Hearing, the OneStop Voting Deadline, and the deadline for objecting to confirmation of the Plan was properly given. He further emphasizes that the Plan is feasible and assures the Court that OneStop will be able to make the payments anticipated by the Plan. According to Mr. Mitchell, if the Plan is not confirmed, OneStop could be liquidated under Chapter 7 of the Bankruptcy Code and that liquidation would result in lower aggregate distributions being made to creditors than those provided for in the Chapter 11 Plan. In a Memorandum of Law presented to the Court, the Debtors note that they have one final case to confirm and then all their assets will be governed by liquidation trustees, whose duty is to liquidate and distribute their assets to creditors. In this light, OneStop now seeks to join the other LandAmerica Debtors who have exited bankruptcy and are currently liquidating. The Debtors assert that confirmation of the Plan as to OneStop, as supported by OneStop's creditors, is integral to achieving finality in their bankruptcy cases. The Debtors also note that only one objection to confirmation of the OneStop Plan has been filed. OneStop understands that the objection will be withdrawn, either prior to or at the OneStop Confirmation Hearing. The resulting lack of any formal objections underscores OneStop's belief that the Plan enjoys broad support amongst its creditors, the Debtors point out. The Debtors also submitted to the Court a proposed order confirming OneStop's Plan, a full-text copy of which is available for free at http://bankrupt.com/misc/OneStop_PropConfOrd.pdf About LandAmerica Financial LandAmerica Financial Group, Inc., provides real estate transaction services with offices nationwide and a vast network of active agents. LandAmerica and its affiliates operate through approximately 700 offices and a network of more than 10,000 active agents throughout the world, including Mexico, Canada, the Caribbean, Latin America, Europe, and Asia. LandAmerica Financial Group and its affiliate LandAmerica 1031 Exchange Services, Inc. filed for Chapter 11 protection Nov. 26, 2008 (Bankr. E.D. Va. Lead Case No. 08-35994). Attorneys at Willkie Farr & Gallagher LLP and McGuireWoods LLP serve as co- counsel. Zolfo Cooper is the restructuring advisor. Epiq Bankruptcy Solutions serves as claims and notice agent. Attorneys at Akin Gump Strauss Hauer & Feld LLP and Tavenner & Beran, PLC, serve as counsel to the Creditors Committee of 1031 Exchange. Bingham McCutchen LLP and LeClair Ryan serve as counsel to the Creditors Committee of LFG. In its bankruptcy petition, LFG listed total assets of $3,325,100,000, and total debts of $2,839,800,000 as of Sept. 30, 2008. On March 6, 2009, affiliate LandAmerica Assessment Corporation, aka National Assessment Corporation, filed its own petition for Chapter 11 relief. Affiliate LandAmerica Title Company filed for for Chapter 11 relief on March 27, 2009. LandAmerica Credit Services, Inc., filed for Chapter 11 in July 2009. Bankruptcy Creditors' Service, Inc., publishes LandAmerica Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by LandAmerica Financial and its affiliate LandAmerica 1031 Exchange Services, Inc. (http://bankrupt.com/newsstand/or 215/945-7000) LANDAMERICA FIN'L: Equity Title, et al., Oppose OneStop Plan ------------------------------------------------------------ Equity Title Agency, Inc.; Equity Title, LLC, dba as Equity Title of Nevada; JLM Title, LLC, dba First Centennial Title Co. of Nevada; and Orange Coast Title Company assert that the Plan proposed by LandAmerica OneStop, Inc. provides disparate treatment for creditors. It does not meet the standards necessary to obtain confirmation of the Plan under the applicable provisions of the Bankruptcy Code, the Objectors further assert. The Objectors complain that the Plan has not been proposed in good faith, discriminates unfairly and is not fair and equitable. The Objectors relate that four entities related to OneStop -- Capital Title Group, Inc., Geodata Research Systems, Inc., Land America Financial Group, Inc., and Land America Title Company -- are listed as unsecured creditors on the Debtor's Schedules of Assets and Liabilities. The Related Entities allegedly have claims, totaling $88,948,445, against OneStop. The Plan provides that: -- the Related Entities' claims will be paid based on the amounts scheduled by OneStop and the Related Entities; -- the Related Entities are not required to provide any documentation to support the amounts owed to them by OneStop; and -- the Related Entities' claims are classified as general unsecured creditors. The Objectors contend that if the Related Entities are allowed to receive the same treatment as other general unsecured creditors of OneStop, they will receive the majority of the funds paid to general unsecured creditors in the Debtor's case. The Objectors argue that the Related Entities are "insider" creditors who participated in or controlled OneStop's business and their claims should not be classified with other general unsecured creditors of the Debtor's estate. The Objectors argue that the Related Entities' claims should be equitably subordinated or placed in a separate class with priority of payment below the general unsecured creditors in the Debtor's case. About LandAmerica Financial LandAmerica Financial Group, Inc., provides real estate transaction services with offices nationwide and a vast network of active agents. LandAmerica and its affiliates operate through approximately 700 offices and a network of more than 10,000 active agents throughout the world, including Mexico, Canada, the Caribbean, Latin America, Europe, and Asia. LandAmerica Financial Group and its affiliate LandAmerica 1031 Exchange Services, Inc. filed for Chapter 11 protection Nov. 26, 2008 (Bankr. E.D. Va. Lead Case No. 08-35994). Attorneys at Willkie Farr & Gallagher LLP and McGuireWoods LLP serve as co- counsel. Zolfo Cooper is the restructuring advisor. Epiq Bankruptcy Solutions serves as claims and notice agent. Attorneys at Akin Gump Strauss Hauer & Feld LLP and Tavenner & Beran, PLC, serve as counsel to the Creditors Committee of 1031 Exchange. Bingham McCutchen LLP and LeClair Ryan serve as counsel to the Creditors Committee of LFG. In its bankruptcy petition, LFG listed total assets of $3,325,100,000, and total debts of $2,839,800,000 as of Sept. 30, 2008. On March 6, 2009, affiliate LandAmerica Assessment Corporation, aka National Assessment Corporation, filed its own petition for Chapter 11 relief. Affiliate LandAmerica Title Company filed for for Chapter 11 relief on March 27, 2009. LandAmerica Credit Services, Inc., filed for Chapter 11 in July 2009. Bankruptcy Creditors' Service, Inc., publishes LandAmerica Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by LandAmerica Financial and its affiliate LandAmerica 1031 Exchange Services, Inc. (http://bankrupt.com/newsstand/or 215/945-7000) LANDAMERICA FIN'L: OneStop Removal Period Extended to June 2 ------------------------------------------------------------ Judge Kevin R. Huennekens of the U.S. Bankruptcy Court for the Eastern District of Virginia has extended the period within which Debtor LandAmerica OneStop, Inc. may seek removal of pending state court actions pursuant to Section 1452 of the Judiciary and Judicial Procedures Code and Rule 9027 of the Federal Rules of Bankruptcy Procedure, through and including June 2, 2010. The Order is without prejudice to OneStop's right to seek further extensions. About LandAmerica Financial LandAmerica Financial Group, Inc., provides real estate transaction services with offices nationwide and a vast network of active agents. LandAmerica and its affiliates operate through approximately 700 offices and a network of more than 10,000 active agents throughout the world, including Mexico, Canada, the Caribbean, Latin America, Europe, and Asia. LandAmerica Financial Group and its affiliate LandAmerica 1031 Exchange Services, Inc. filed for Chapter 11 protection Nov. 26, 2008 (Bankr. E.D. Va. Lead Case No. 08-35994). Attorneys at Willkie Farr & Gallagher LLP and McGuireWoods LLP serve as co- counsel. Zolfo Cooper is the restructuring advisor. Epiq Bankruptcy Solutions serves as claims and notice agent. Attorneys at Akin Gump Strauss Hauer & Feld LLP and Tavenner & Beran, PLC, serve as counsel to the Creditors Committee of 1031 Exchange. Bingham McCutchen LLP and LeClair Ryan serve as counsel to the Creditors Committee of LFG. In its bankruptcy petition, LFG listed total assets of $3,325,100,000, and total debts of $2,839,800,000 as of Sept. 30, 2008. On March 6, 2009, affiliate LandAmerica Assessment Corporation, aka National Assessment Corporation, filed its own petition for Chapter 11 relief. Affiliate LandAmerica Title Company filed for for Chapter 11 relief on March 27, 2009. LandAmerica Credit Services, Inc., filed for Chapter 11 in July 2009. Bankruptcy Creditors' Service, Inc., publishes LandAmerica Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by LandAmerica Financial and its affiliate LandAmerica 1031 Exchange Services, Inc. (http://bankrupt.com/newsstand/or 215/945-7000) LANDMARK VALLEY: Gets OK to Continue Using INB's Cash Collateral ---------------------------------------------------------------- Landmark Valley Homes, Inc., sought and obtained permission from the U.S. Bankruptcy Court for the Southern District of Texas to continue using the cash collateral of Inter National Bank. As reported by the TCR on January 14, 2010, the Debtor asked for the Court's authorization to use INB's cash collateral on an interim basis, to fund the Chapter 11 case, pay suppliers and other parties. The Debtor's business includes inventory of unsold homes and lots which are believed to be subject to security interests and liens granted by Debtor to INB and to Wachovia. INB is owed $11,848,877. INB and Wachovia each have separate collateral packages consisting of homes, lots and development tracts. The sale proceeds and accounts generated in the ordinary course of business constitute cash collateral. The Court has allowed the Debtor to use the cash collateral pursuant to a budget, a copy of which is available for free at: http://bankrupt.com/misc/LANDMARK_VALLEY_budget.pdf INB and any party having a valid prepetition lien on the cash collateral used by the Debtor will be granted a replacement lien to the same priority, validity and extent as prepetition on rents, equipment, and other collateral specified in the applicable security documents. A hearing will be held on April 21, 2010, at 9:00 a.m. on the Debtor's request to use the cash collateral. McAllen, Texas-based Landmark Valley Homes, Inc., owns and operates residential construction/real estate development business. The Company filed for Chapter 11 bankruptcy protection on January 4, 2010 (Bankr. S.D. Tex. Case No. 10-70013). John Kurt Stephen, Esq., at Cardena Whitis and Stephen, assists the Company in its restructuring effort. The Company has assets of $34,119,790, and total debts of $19,484,476. LANDMARK VALLEY: Gets OK to Hire Cardenas Whitis as Bankr. Counsel ------------------------------------------------------------------ Landmark Valley Homes, Inc., sought and obtained permission from the U.S. Bankruptcy Court for the Southern District of Texas to employ Kurt Stephen and the law firm of Cardenas, Whitis, & Stephen L.L.P. as bankruptcy counsel. Cardenas Whitis will: a. prepare appropriate schedules, statement of financial affairs, motions, notices, orders, and applications to comply with the requisites of the U.S. Trustee and the U.S. Bankruptcy Code and Bankruptcy Rules; b. counsel with the Debtor regarding preparation of operating reports and development of a Chapter 11 Plan; and c. discuss reorganization with creditors and/or third parties, and preparation and proposal of a Chapter 11 Plan. Cardenas Whitis will be paid $300 per hour for his services. Cardenas Whitis is "disinterested" as that term is defined in Section 101(14) of the Bankruptcy Code. McAllen, Texas-based Landmark Valley Homes, Inc., owns and operates residential construction/real estate development business. The Company filed for Chapter 11 bankruptcy protection on January 4, 2010 (Bankr. S.D. Texas Case No. 10-70013). The Company has assets of $34,119,790, and total debts of $19,484,476. LANDMARK VALLEY: Section 341(a) Meeting Scheduled for February 23 ----------------------------------------------------------------- The U.S. Trustee for Region 7 will convene a meeting of creditors in Landmark Valley Homes, Inc.'s Chapter 11 case on February 23, 2010, at 12:30 p.m. The meeting will be held at 222 East Van Buren, Room 301, Harlingen, 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. McAllen, Texas-based Landmark Valley Homes, Inc., owns and operates residential construction/real estate development business. The Company filed for Chapter 11 bankruptcy protection on January 4, 2010 (Bankr. S.D. Tex. Case No. 10-70013). John Kurt Stephen, Esq., at Cardena Whitis and Stephen, assists the Company in its restructuring effort. The Company has assets of $34,119,790, and total debts of $19,484,476. LBJ LAKEFRONT: Files Schedules of Assets and Liabilities -------------------------------------------------------- LBJ Lakefront Inc. filed with the U.S. Bankruptcy Court Western District of Texas its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $23,285,000 B. Personal Property $136,603 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $17,734,504 E. Creditors Holding Unsecured Priority Claims $86,766 F. Creditors Holding Unsecured Non-priority Claims $1,649,517 ----------- ----------- TOTAL $23,421,603 $19,470,787 Horseshoe Bay, Texas-based LBJ Lakefront Inc. filed for Chapter 11 bankruptcy protection on January 4, 2010 (Bankr. W.D. Texas Case No. 10-10023). Mark Curtis Taylor, Esq., at Hohmann, Taube & Summers, LLP, 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. LEHMAN BROTHERS: Barclays Defends Terms of Assets Purchase ---------------------------------------------------------- Barclays Capital Inc. has lashed back at allegations that it received possibly $12 billion in excess assets that were never disclosed when it bought the North American broker-dealer business of Lehman Brothers Holdings Inc. In a 325-page document submitted to the U.S. Bankruptcy Court for the Southern District of New York, Barclays says LBHI and the Official Committee of Unsecured Creditors simply want the Court to rewrite the terms of the sale because the deal was "too good for Barclays." "The motions are nothing more than a blatant attempt to breach both the sale order and the purchase agreement," says Barclays' attorney, Jonathan Schiller, Esq., at Boies Schiller & Flexner LLP, in New York, referring to the motions that were filed earlier by LBHI and the Creditors' Committee seeking reconsideration of the Court's prior order approving the September 2008 sale. LBHI and the Creditors' Committee made the move following the results of their own investigations, showing that the sale that closed was different from the deal approved by the Court and that the sale was secretly structured to give Barclays "immediate and enormous windfall profit" that was never disclosed. LBHI's legal counsel alleged that the changes made in the deal orchestrated an exchange of assets that were to be priced at between $50 and $52 billion for a payment of only $45 billion, hence delivering to Barclays an undisclosed discount of between $5 and $7 billion. Mr. Schiller describes as "gross distortion" allegations that there was a secret discount because the estimated book value of some financial inventory stated in the sale agreement may have been less than the "marks" on Lehman's books. According to him, the Lehman marks for many of the company's financial assets were "stale and overstated." "Barclays did not agree with those marks and did not want to accept those marks and then have to take an immediate write down after the sale," Mr. Schiller points out. He adds that the discount referred to by LBHI and the Creditors' Committee "is not a discount from fair market value but rather an attempt to adjust from stale Lehman marks to fair market value." Mr. Schiller further says that LBHI wants the Court to rewrite the agreement so that the Lehman estates "may avoid their contractual obligations." Barclays asserts that it is still owed more than $3 billion in additional assets which it never received from the sale. It asks the Court to compel LBHI to deliver those additional assets and to dismiss the lawsuit filed by LBHI. The lawsuit was brought by the Debtors, the Creditors' Committee, and the SIPA trustee of Lehman Brothers Inc. against Barclays to recover billions of dollars that were allegedly improperly transferred to Barclays under the deal and to award LBHI punitive damages. Mr. Schiller also filed similar court papers in LBI's liquidation proceeding under the Securities Investor Protection Act. LBHI spokeswoman Kimberly Macleod said in a statement that the deal at the time was described to LBHI's board and the court "as an equivalent exchange of value with no embedded gain for Barclays," according to a report by the Wall Street Journal. "Because the court was never told, it never approved such a gain for Barclays," Ms. Macleod reportedly said in the statement. James Giddens, the court-appointed trustee, who is in charge of liquidating LBI and who has joined efforts to recover assets, said in a statement that Barclays' argument is based on "strained interpretations of the sale agreements," the Wall Street Journal reported. LBI's trustee has identified some $6.7 billion in cash and securities he claims were wrongfully transferred to Barclays and were never supposed to be included in the deal. William Maguire, Esq., at Hughes Hubbard & Reed LLP, in New York, who represents the trustee, said "Barclays is changing the deal," according to a Reuters report. "The Court was told exactly what the deal was and we believe the Court approved that deal. They are saying they were basically entitled to a blank check," Reuters quoted Mr. Maguire as saying. Barclays, et al. Ink Stipulation In another development, Barclays entered into a stipulation allowing Lloyds TSB Bank plc, Bank of Tokyo-Mitsubishi UFJ Ltd., Australia and New Zealand Banking Group Ltd. to file until February 18, 2010, their objections or responses to the motions filed by LBHI, the Creditors Committee and LBI trustee. The stipulation was approved by the Court on February 2, 2010. Barclays, Lloyds TSB, Bank of Tokyo-Mitsubishi and ANZ Banking are defendants of a lawsuit filed by The Options Clearing Corp. concerning the proceeds of letters of credit issued by the three banks and drawn by OCC. The suit involves disputes concerning the interpretation of agreements that also are the subject of the motions. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy September 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition listed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on September 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on September 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: Hearing on Unsealing of Examiner Report March 11 ----------------------------------------------------------------- Anton Valukas, the examiner appointed to investigate the collapse of Lehman Brothers Holdings Inc. and its affiliated debtors, sought and obtained approval from Judge James Peck of the U.S. Bankruptcy Court for the Southern District of New York to file temporarily his 2,200-page report of the investigation and all appendices to the report. In seeking authority to file the Report under seal, the Examiner explained that although he believes the Report should be a public record open to examination, he needed to file the Report under seal to protect confidential information in the report and comply with various protective orders, confidentiality stipulations, or confidentiality agreements. The Examiner received permission from Judge Peck to temporarily file the report under seal so that the parties involved could address concerns about confidentiality information. The report divulges "protected information so extensively" that it would be impractical to redact those information, Mr. Valukas says in court papers. The Examiner also asks approval from the Court to implement a process to permit the unsealing of the Report. The Examiner says his professionals have not yet compiled a final list of confidential information they obtained through the investigation. However, once it is completed, each party will be notified on or before February 15, 2010 what confidential information it shared with the examiner that is referenced in the report. If Mr. Valukas obtains 100% consent from the party to release the information from the limitations in their confidentiality agreements, the Examiner will immediately advise the Court so that the report can be unsealed and made public. "Short of 100% agreement, a process must be established so that the report can be unsealed as soon as practicable," says the Examiner's attorney, Robert Byman, Esq., at Jenner & Block LLP, in Chicago, Illinois. Mr. Byman says the process would help promptly determine whether any confidential information should be protected from presumption and public policy in favor of public access to court records, and to permit the report to be unsealed. The Court will hold a hearing on March 11, 2010, to consider approval of the request. Deadline for filing objections is March 4, 2010. Nancy Rapoport, a professor at the University of Las Vegas, Nevada, says that when Mr. Valukas' findings are made public, they may help creditors sue to recover their money just as Enron Corp.'s creditors did after an examiner filed reports in 2002 and 2003, according to a February 9 report by Bloomberg News. "The job of an examiner is to get to the bottom of things, so good ones don't shy away from taking on the big guns," Ms. Rapoport says in an e-mail sent to the news agency. Mr. Valukas was appointed on January 19, 2009, after LBHI's creditors called for transparency on its business affairs. The creditors complained over the lack of disclosure, particularly on the flow of funds and property among LBHI and its affiliates days before their bankruptcy filing. The Walt Disney Company, which is allegedly owed about $199 million by LBHI and its affiliates, asked for an examiner to be appointed and was supported by Bank of America Corp., Harbinger Capital Partners Special Situations Fund LP, Harbinger Capital Partners Master Fund I and the U.S. Trustee's office. Mr. Valukas spent a year and $34 million probing the failure of the fourth-largest investment bank by interviewing more than 100 people and scrutinizing more than 10 million documents, Bloomberg News reported. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy September 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition listed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on September 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on September 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: Proposes Deal With Stamford Associates, et al. --------------------------------------------------------------- Prior to the petition date, some of Lehman Brothers Holdings Inc.'s subsidiaries participated in a sale leaseback transaction involving real property located in Stamford, Connecticut. The property is divided into two fee interests, a 560,000-square foot office building and the land where the building stands. The transaction was structured so that a Lehman-controlled unit, Stamford Associates L.P., entered into a ground lease for the land and took fee title to the building from a subsidiary of General Re Corporation. SALP then subleased the land and leased the building to another Lehman subsidiary, Stamford Real Estate Corporation, which, in turn, subleased the land and the building back to Gen Re. Another Lehman unit, Stamford Investment Partners provided financing in connection with these transactions. Gen Re's subsidiary retains the fee interest in the land. LBHI structured its ownership interest in the property to provide two revenue streams. First, in 1985, LBHI syndicated the limited partnership interests in SALP to Security Pacific Capital Leasing Corporation for $43 million. In order to induce SPCLC to participate in the syndication, LBHI provided a guarantee of Stamford Real Estate's obligations under the various leases and subleases and a related tax indemnity. The guarantee and the tax indemnity are currently LBHI's only direct connection to the property. Second, Lehman anticipated that the financing provided by Stamford Investment would eventually result in a positive net cash flow. The financing provided by Stamford Investment consisted of a loan evidenced by a $26 million face amount Deferred Interest Subordinated Note Due 2020 dated November 9, 1984, and secured by the Second Mortgage and Security Agreement dated November 9, 1984, on the property by Stamford Investment and Stamford Real Estate. The first debt service payment of $11,343,142 is due on or before August 1, 2010. Following LBHI's bankruptcy filing, Security Pacific and SALP filed claims in its case on account of LBHI's obligations under the guaranty and the tax indemnity. The aggregate face amount asserted in the proofs of claim is $416,353,324. Gen Re is planning to vacate the property. Once that occurs, Stamford Real Estate will have no source of funding to satisfy its obligations to SALP under its sublease and SALP will not be able to make the debt service payments to Stamford Investment under the loan. If Stamford Investment does not receive payment under the loan from SALP, it will attempt to foreclose on the mortgage, an action that Security Pacific and SALP are likely to contest. To avoid the expense and delays of litigation, Security Pacific and SALP negotiated with the Lehman units the material terms of a settlement, pursuant to which: (1) SALP will convey its fee interest in the building and its interests under the ground lease and the master lease to a newly formed subsidiary of Stamford Investment without representation or warranty except as agreed among the parties to the agreement in consideration for the release of SALP and Security Pacific from all of their obligations; (2) at the closing, Claim No. 15799 filed by SALP and Security Pacific against LBHI, will be amended and superseded by a single allowed general unsecured claim in the allowed amount of $45 million solely against LBHI, which will not be subject to any reduction, disallowance, defense, counterclaim, setoff or subordination, and Claim No. 15794, filed by SPCLC against LBHI will be deemed amended and superseded by a single allowed general unsecured claim in the sum of $20 million solely against LBHI, which will not be subject to any reduction, disallowance, defense, counterclaim, setoff or subordination; (3) at the closing, any rights that SALP and Security Pacific have under the guarantee and the tax indemnity will be extinguished; (4) Stamford Investment, Stamford Real Estate and LBHI will provide certain releases to SALP and Security Pacific; and (5) certain of LBHI's non-debtor subsidiaries, SALP and Security Pacific will enter into additional agreements consistent with the overall restructuring plan. The only portion of the settlement that LBHI will be a party to is that certain Agreement for Deed/Assignment in Lieu of Foreclosure, and its only obligations under that agreement will be to consent to the amendment and replacement of Claim Nos. 15794 and 15799 with the amended and superseded proofs of claim, and to release SALP and Security Pacific from any claims relating to or arising out of the transactions and documents described in the proofs of claim. In exchange, the liability of LBHI's estate under the proofs of claim will be reduced by over $350 million, LBHI's obligations under the guarantee and the tax indemnity will be extinguished, and its wholly-owned, indirect and non-debtor subsidiaries will receive SALP's fee interest in the building and its interests under the ground lease and the master lease. In light of this, LBHI seeks approval of the U.S. Bankruptcy Court for the Southern District of New York to enter into the Agreement for Deed/Assignment in Lieu of Foreclosure. The Court will hold a hearing on February 10, 2010, to consider approval of the request. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy September 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition listed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on September 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on September 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: Proposes to Prepay Variable Funding Trusts ----------------------------------------------------------- Lehman Commercial Paper Inc. seeks court approval to prepay the notes issued by two securitization trusts before their dates of maturity. The maturity date for the notes issued by Variable Funding Trust 2008-1 is June 30, 2010, while the date of maturity for the notes issued by Variable Funding Trust 2007-1 was December 31, 2009, but it could be extended to June 30, 2010, pursuant to a settlement agreement between LCPI and Metropolitan Life Insurance Company. MetLife is the lender under the note purchase agreements it executed with the trusts, which authorized the latter to issue notes to MetLife in return for availing up to $500 million. Repayment of the notes is secured by collateral in the form of mortgage loans or participations in corporate loans that LCPI sold and assigned to the trusts. Currently, about $258.8 million is due under the notes issued by VFT 2007-1 after LCPI contributed to the trust about $115.5 million, which was used to pay off the indebtedness. Meanwhile, about $134.9 million is due under the notes issued by VFT 2008-1. Jacqueline Marcus, Esq., at Weil Gotshal & Manges LLP, in New York, says it is too costly for LCPI to continue the financing since the value of the collateral is presently greater than what is owed by the trusts to MetLife. She adds that LCPI would save at least more than $12 million in financing costs by paying off the notes prior to the maturity dates. LCPI estimates that interest in the sum of up to $12.7 million will accrue under the notes for the period January 20 to June 30, 2010. Ms. Marcus further says the prepayment would also protect the trusts' interests in the mortgage and corporate loans by "effecting a release" of those collateral and that it would allow LCPI to sell or restructure the loans without MetLife's consent. The Court will hold a hearing on February 10, 2010, to consider approval of the request. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy September 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition listed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on September 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on September 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: Wants to Compel Foreign Banks to Pay $29MM+ ------------------------------------------------------------ Lehman Brothers Holdings Inc. and its affiliated debtors ask the U.S. Bankruptcy Court for the Southern District of New York to compel three foreign banks to pay more than $29 million to LBHI. Skandinaviska Enskilda Banken AB (publ), Swedbank AB (publ.) and First National Bank allegedly refused to pay the funds that are deposited in LBHI's accounts with those banks. More than DKK9 million or almost US$18 million is deposited with SEB; over SEK82 million or more than US$11.7 million with Swedbank; and over ZAR 552,000 or about US$75,000 with FNB. The foreign banks placed an administrative freeze on LBHI's accounts after it filed for bankruptcy protection, preventing LBHI to withdraw the funds while allowing additional funds to be deposited in the accounts. The banks allegedly have plans to setoff the funds against LBHI's pre-bankruptcy debt, hence, the imposition of the administrative freeze. The Debtors' attorney, Richard Krasnow, Esq., at Weil Gotshal & Manges LLP, in New York, says the banks' refusal to make the payment and their failure to move the Court to lift the automatic stay so that they could setoff the funds while maintaining a freeze of the accounts constitute violations of the stay. Under the bankruptcy laws, the filing of a bankruptcy case by a company triggers an injunction against the continuance of an action by any creditor against that company or its property. The automatic stay gives the company protection from creditors subject to the oversight of the bankruptcy judge. Mr. Krasnow further says the funds are also ineligible for setoff since they were deposited or credited to LBHI's accounts after the bankruptcy filing. "Such funds constitute postpetition deposits which lack the requisite mutuality with LBHI's alleged prepetition obligations. This renders them ineligible for setoff," Mr. Krasnow says in court papers. Swedbank, in a statement, asks the Court to deny the request, saying that setoff and netting is permitted without the need to seek relief from stay since the bank and LBHI have mutual obligations under their ISDA master agreements. Swedbank argues that under non-bankruptcy laws applicable to obligations under the ISDA master agreements, it has the contractual right to setoff its debt against LBHI's debt to the bank. This contractual right remains wholly intact and unaffected by the automatic stay, according to Swedbank. The Court will hold a hearing on February 10, 2010, to consider approval of the requests. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy September 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition listed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on September 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on September 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: Wants to Set Process for Securities Transfer ------------------------------------------------------------- Lehman Brothers Holdings Inc. and its affiliated debtors seek court approval to implement a process for trading in their securities to protect the value of their tax attributes after they emerge from bankruptcy. A "Security" will be any claim against any of the Debtors, including, without limitation (i) any claim against any of the Debtors as a guarantor and (ii) these classes of preferred stock of LBHI: -- 5.94% Cumulative Preferred Stock, Series C; -- 5.67% Cumulative Preferred Stock, Series D; -- 6.50% Cumulative Preferred Stock, Series F; -- Floating Rate Cumulative Preferred Stock, Series G; and -- 7.95% Non-Cumulative Perpetual Preferred Stock, Series J. The tax attributes include the consolidated net operating tax loss carryforwards of LBHI and its units. LBHI estimates that they incurred NOLs of $48 billion in addition to other tax attributes as of January 19, 2010. The tax attributes could potentially allow the reorganized Debtors or their successors to reduce future U.S. federal income tax liability in case the restructuring turns successful, Shai Waisman, Esq., at Weil Gotshal & Manges LLP, in New York, tells the Court. Mr. Waisman says the Debtors need to monitor and to require the sell-down of securities acquired by some holders so that they can avail themselves of relief under Section 382(l)(5)of the Tax Code in case of a successful Chapter 11 plan. Section 382(l)(5) provides an exception to the annual limitation imposed on a corporation's use of its tax attributes following an "ownership change," which occurs when "5-percent shareholders" increase their stake in a corporation by more than 50%. Pursuant to the provision, a debtor corporation or group is not subject to the annual limitation if its shareholders who owned its stock immediately before the ownership change, and qualified creditors emerge from the reorganization owning at least 50% of the total value and voting power of the reorganized debtor's stock immediately after the ownership change. The Debtors propose, among others, for any person or Entity is or becomes a Substantial Securityholder to file with the Bankruptcy Court and serve upon the Debtors, the attorneys for the Debtors and the attorneys for the Creditors' Committee, a notice of Substantial Securityholder Status immediately after the date the person becomes a Substantial Securityholder. At the holder's election, the Notice of Substantial Securityholder Status that is filed with the Bankruptcy Court may be redacted to exclude that holder's taxpayer identification number and the aggregate dollar amount of Securities that that holder Beneficially Owns. Mr. Waisman says there is possibility that the Debtors' Chapter 11 plans will involve the issuance of new common stock and the distribution of the stock to some creditors to satisfy their securities. The issuance and distribution likely would result in an ownership change, in which the Debtors may be entitled to the relief afforded by Section 382(l)(5) pursuant to a confirmed Chapter 11 plan or court order, he adds. "Such relief, however, may not be available if the trading and accumulation of securities prior to the effective date of a chapter 11 plan is left unmonitored and unrestricted," Mr. Waisman further says. The Official Committee of Unsecured Creditors has expressed support for the implementation of the proposed process, saying it would allow the Debtors to request creditors to sell down some of their positions that could provide a reorganized Debtor with more flexibility to use its NOLs and other tax attributes. That ability, the Creditors' Committee says, is necessary to prevent acquisitions of claims from causing the Debtors to cease to qualify for the exception and use the tax attributes to offset future taxable income to the maximum extent possible. The Court will hold a hearing on February 10, 2010, to consider approval of the proposed procedures. A copy of the document detailing the proposed process is available at http://bankrupt.com/misc/LBHI_SecTradingProcess.pdf About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy September 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition listed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on September 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on September 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: CalPERS Loses $17M Lehman Debt Swap Bid -------------------------------------------------------- Law360 reports that the court overseeing the bankruptcy case of Lehman Brothers Holding Inc. has nixed a bid by the California Public Employees' Retirement System to deduct the $17 million CalPERS owes Lehman from the $433 million Lehman owes the pension fund. 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) LIFE TECHNOLOGIES: Moody's Affirms 'Ba1' Corporate Family Rating ---------------------------------------------------------------- Moody's Investors Service affirmed the Ba1 Corporate Family Rating of Life Technologies Corporation and assigned a Ba1 rating to the proposed new issuance of senior unsecured notes due 2013, 2015 and 2020. The proceeds of the proposed notes are expected to be used to repay the company's Term Loans A & B, which were used in part to finance the acquisition of Applied Biosystems in November 2008. In conjunction with the proposed refinancing transaction, Moody's upgraded the rating on the $250 million senior secured revolving credit facility to Baa1 from Baa3, reflecting the significant amount of unsecured debt that will be junior to the revolver in the proposed capital structure. Moody's has based its ratings on the assumption that all of the term debt will be repaid. If a substantial amount of term debt remains outstanding, the instrument ratings could be subject to change. Moody's also affirmed the liquidity rating of SGL-1, reflecting Moody's expectations for very good liquidity in 2010. The outlook for the ratings is stable. The Ba1 rating reflects Life Technologies' scale, leading positions in many of its markets, and good diversity by customer, product and geography. The business model also benefits from a high percentage of recurring revenues as roughly 80% of revenues are generated from consumables or services associated with capital equipment systems. Longer-term, Moody's believe increased focus in areas like gene expression and stem cell research, and the expansion of life sciences technologies into broader applied markets (such as forensics) will support the company's revenue growth. Life Technologies has made considerable progress integrating the Invitrogen and Applied Biosystems' businesses. Over the next year the company will continue with its integration efforts, including consolidating manufacturing, distribution and certain IT functions. Moody's believes there is reduced risk of significant operating disruption now that more than one year has passed since the acquisition. The company has also reduced leverage over the past year through a combination of EBITDA growth and debt repayments (with both free cash flow and proceeds from assets sales). However, financial leverage of roughly 3.0 times (including Moody's standard adjustments), while improved, continues to constrain the ratings. Further, an important factor in considering the potential for an investment grade rating is a company's demonstrated track record of conservative financial policies, and Life Technologies has a limited history in this regard. Instrument ratings are subject to review of final documentation. LGD estimates subject to change. Moody's assigned these ratings: * Senior unsecured notes due 2013, rated Ba1 (LGD4, 60%); * Senior unsecured notes due 2015, rated Ba1 (LGD4, 60%); * Senior unsecured notes due 2020, rated Ba1 (LGD4, 60%); * (P) Ba1 to the senior unsecured shelf Moody's affirmed these ratings: * Corporate Family Rating, Ba1; * Probability of Default Rating, Ba1; * Speculative Grade Liquidity of SGL-1; Moody's upgraded this rating: * $250 million senior secured revolving credit facility due 2013, to Baa1 (LGD1, 1%) from Baa3 (LGD 2, 29%); Moody's anticipates these ratings will be withdrawn at the close of the transaction: * $1.4 billion (face value) senior secured term loan A due 2013, rated Baa3 (LGD 2, 29%); and * $1 billion (face value) senior secured term loan B due 2015, rated Baa3 (LGD 2, 29%). The ratings outlook is stable. The last rating action on Life Technologies was August 4, 2009, when Moody's affirmed the long-term ratings and assigned a liquidity rating of SGL-1. Life Technologies, based in Carlsbad, California, is a provider of life science technologies for disease research, drug discovery, and commercial bioproduction. Its customers include academic and government research institutions, pharmaceutical/biotech companies and industrial applications worldwide. Products and services are used in research in the fields of genomics, proteomics, stem cells, cell therapy and cell biology as well as drug manufacturing. Revenues for the twelve months ended December 31, 2009, approximated $3.28 billion. LINCOLN NATIONAL: Fitch Affirms 'BB+' Rating on Junior Debt ----------------------------------------------------------- Fitch Ratings has affirmed the ratings of Lincoln National Corporation and its insurance operating subsidiaries. The Rating Outlook remains Negative. Key affirmations include these: -- LNC Issuer Default Rating at 'BBB+'; -- LNC senior debt at 'BBB'; -- LNC junior subordinated debt at 'BB+'; -- LNC Commercial Paper at 'F2'; -- Lincoln National Life Ins. Co Insurer Financial Strength rating at 'A+'. Fitch believes that the company has taken initiatives that have enhanced near-term financial flexibility in a period of challenging capital markets access. Specifically, Fitch views positively management's initiatives to adjust to the current uncertain operating environment and bolster statutory capital, which is estimated at 450% of NAIC Risk-Based Capital at year-end 2009. Management's actions include the negotiation of a 10-year $550 million letter of credit that resulted in $400 million of XXX reserve relief, $690 million common stock issuance, $800 million senior note issuances ($300 million of which was raised to pre- fund a $250 million maturity coming due in the first quarter of 2010), $950 million preferred stock issuance under the U.S. Treasury's Capital Purchase Program, sale of Lincoln UK and Delaware, a reduction of its common stock dividend and other cost savings initiatives. While LNC continues to face considerable challenges, primarily related to asset risk, refinancing risk and operating performance, these actions, which have resulted in over $1 billion in cash at the holding company, could ultimately help stabilize ratings. However, Fitch expects the effects of ongoing difficult economic conditions and capital market turmoil to continue to pressure LNC and its peers, and this expectation is reflected in LNC's current ratings and Negative Outlook. The Negative Outlook also reflects Fitch's view that near-term adverse financial market and challenging economic conditions could continue for an extended period. As a result, Fitch believes LNC could experience higher- than-expected volatility in financial results and capital, including further investment and goodwill impairments. Additionally, Fitch notes that there is execution risk associated with LNC's ability to refinance approximately $2.1 billion of LOCs which, assuming LNC exercises its option to extend the maturity for a year, will ultimately expire in the first quarter of 2012. Inability to refinance these existing LOC facilities, which currently support additional life insurance reserves, could have a material negative impact on the statutory capital levels of certain of LNC's domestic life insurance subsidiaries. Fitch's ratings on LNC are supported by the company's longstanding strong competitive position in the life insurance and annuity market, strong and diverse distribution network, strong management team and historically solid operating performance. These positives are tempered somewhat by the current weak economic and capital market conditions, as well as challenges LNC faces with respect to strong competition in the life insurance and asset accumulation sectors, particularly in the affluent market segment that LNC has targeted, and the degree to which the company's earnings continue to be leveraged to the equity markets. Additionally, Fitch believes LNC has an above average Total Financings and Commitments ratio at 1.1 times when excluding goodwill, which is a non-risk-based leverage measure that expands on Fitch's traditional debt-to-equity calculations. The ratio is driven largely by the company's outstanding debt and financings for life reserves. Fitch generally views these activities as well managed, and related risks are captured in LNC's ratings and Outlook. Lincoln National Corp., headquartered in Radnor, PA, markets a broad range of insurance and asset accumulation products and financial advisory services primarily to the affluent market segment. The company's consolidated assets were $177.4 billion, and common equity was $11.7 billion at year-end 2009. Fitch affirms the ratings of LNC and its insurance operating subsidiaries: Lincoln National Corporation -- Long-term IDR at 'BBB+'; -- Short-term IDR at 'F2'; -- CP at 'F2'; -- Floating rate senior notes due April 20, 2010 at 'BBB'; -- 6.2% senior notes due Dec. 15, 2011 at 'BBB'; -- 5.65% senior notes due Aug. 27, 2012 at 'BBB'; -- 4.75% senior notes due Jan. 27, 2014 at 'BBB'; -- 4.75% senior notes due Feb. 15, 2014 at 'BBB'; -- 7% senior notes due March 15, 2018 at 'BBB'; -- 8.75% senior notes due July 1, 2019 at 'BBB'; -- 6.25% senior notes due Feb. 15, 2020 at 'BBB'; -- 6.15% senior notes due April 7, 2036 at 'BBB'; -- 6.3% senior notes due Oct. 9, 2037 at 'BBB'; -- 6.75% junior subordinated debentures due April 20, 2066 at 'BB+'; -- 7% junior subordinated debentures due May 17, 2066 at 'BB+'; -- 6.05% junior subordinated debentures due April 20, 2067 at 'BB+'; -- Preferred stock at 'BB+'. Lincoln National Capital VI -- Trust preferred securities at 'BB+'. Lincoln National Life Insurance Company Lincoln Life & Annuity Company of New York First Penn-Pacific Life Insurance Company -- IFS at 'A+'. The Rating Outlook remains Negative. LINENS 'N THINGS: Plan Modifications Approval Sought ---------------------------------------------------- BankruptcyData reports that Linens 'n Things filed with the U.S. Bankruptcy Court a motion to approve modifications to the Debtors' Third Amended Joint Plan of Reorganization. According to the Debtors, the modifications are necessary to maximize recoveries and avoid a conversion to Chapter 7. According to the motion, "The Debtors estimate that the total amount of allowed administrative claims, allowed priority tax claims, and allowed other priority claims will be approximately $40 million. When crafting the confirmed Plan, the Debtors anticipated satisfying these claims through case sourced from the Senior Noteholder Contribution Amount and Avoidance recoveries. However, the process of collecting preferences has proven slower than expected and the Debtors do not anticipate generating sufficient proceeds to satisfy such claims in cash in the foreseeable future." Several parties, including The New York State Department of Taxation and Finance, filed with the U.S. Bankruptcy Court objections to Linens 'n Things' motion to this motion. The Court confirmed the Company's Third Amended Plan on June 15, 2009. Headquartered in Clifton, New Jersey, Linens 'n Things, Inc. -- http://www.lnt.com/-- was the second largest specialty retailer of home textiles, housewares and home accessories in North America. As of Sept. 30, 2008, Linens 'n Things operated 411 stores in 47 states and seven provinces across the United States and Canada. Linens 'n Things was acquired by private equity firm Apollo Management in 2006. On May 2, 2008, these Linens entities filed Chapter 11 petition (Bankr. D. Del.): Linens Holding Co. (08-10832), Linens 'n Things, Inc. (08-10833), Linens 'n Things Center, Inc. (08-10834), Bloomington, MN., L.T., Inc. (08-10835), Vendor Finance, LLC (08- 10836), LNT, Inc. (08-10837), LNT Services, Inc. (08-10838), LNT Leasing II, LLC (08-10839), LNT West, Inc. (08-10840), LNT Virginia LLC (08-10841), LNT Merchandising company LLC (08-10842), LNT Leasing III, LLC (08-10843), and Citadel LNT, LLC (08-10844). Judge Christopher S. Sontchi presides over the case. Mark D. Collins, Esq., John H. Knight, Esq., and Jason M. Madron, Esq., at Richards, Layton & Finger, P.A., are Linens 'n Things' bankruptcy counsel. The Debtors' special corporate counsel are Holland N. O'Neil, Esq., Ronald M. Gaswirth, Esq., Stephen A. McCaretin, Esq., Randall G. Ray, Esq., and Michael S. Haynes, Esq., at Morgan, Lewis & Bockius, LLP. The Debtors' restructuring management services provider is Conway Del Genio Gries & Co., LLC. The Debtors' CRO and Interim CEO is Michael F. Gries, co-founder of Conways Del Genio Gries & Co., LLC. The Debtors' claims agent is Kurtzman Carson Consultants, LLC. The Debtors' consultants are Asset Disposition Advisors, LLC, and Protivit, Inc. The Debtors' investment bankers are Financo, Inc., and Genuity Capital Markets. LYKINS ENTERPRISES: Files for Chapter 11 Bankruptcy --------------------------------------------------- Scott Sloan at Kentucky Herald-Leader says Lykins Enterprises has filed for bankruptcy protection. The Company has assets of up to $50,000 and liabilities between $1 million and $10 million. "We plan on revising our cash management system, tighten up our receivables and emerge from Chapter 11 as soon as possible," the Company stated, according to the report. The Company's three largest unsecured creditors are Chevron Oil Products, which is owed $841,444.28; Marathon, which is owed $480,085; and Shell Oil, which is owed $425,179, says Mr. Sloan citing papers filed with the court. The filing stated that an employee was found to be embezzling funds during that time period and to compensate for the financial hardship, Mr. Sloan relates. The company's problems continued in 2008 as the price of oil fell and gasoline revenues declined. In mid-2009, the company lost about $1 million in a short time when the price of oil dropped, he adds. Lykins Enterprises operates 14 convenience stores around Kentucky and Ohio. MAGNA ENTERTAINMENT: Racing Groups Saddle Magna With $2.6M ---------------------------------------------------------- Horse racing groups have filed a complaint against Magna Entertainment Corp. over its retention of $2.6 million in distributions from wagers - distributions the groups claim belong to them under California law, according to Law360. Based in Aurora, Ontario, Magna Entertainment Corp. is North America's largest owner and operator of horse racetracks based on revenue. The Company develops, owns and operates horse racetracks and related pari-mutuel wagering operations, including off-track betting facilities. MEC also develops, owns and operates casinos in conjunction with its racetracks where permitted by law. MEC owns and operates AmTote International, Inc., a provider of totalisator services to the pari-mutuel industry, XpressBet(R), a national Internet and telephone account wagering system, as well as MagnaBet(TM) internationally. Pursuant to joint ventures, MEC has a 50% interest in HorseRacing TV(R), a 24-hour horse racing television network, and TrackNet Media Group LLC, a content management company formed for distribution of the full breadth of MEC's horse racing content. Following its failure to meet obligations to lenders led by PNC Bank, National Association, and Wells Fargo Bank, National Association, and controlling shareholder MI Developments Inc.'s decision not to provide further financial backing, Magna Entertainment Corp. and 24 affiliates filed for Chapter 11 on March 5, 2009 (Bankr. D. Del. Lead Case No. 09-10720). Marcia L. Goldstein, Esq., and Brian S. Rosen, Esq., at Weil, Gotshal & Manges LLP, have been engaged as bankruptcy counsel. Mark D. Collins, Esq., L. Katherine Good, Esq., and Maris J. Finnegan, Esq., at Richards, Layton & Finger, P.A., are the Debtors' local counsel. Miller Buckfire & Co. LLC is the Debtors' investment banker and financial advisor. Kurtzman Carson Consultants LLC is the claims and noticing agent for the Debtors. Magna Entertainment Corp. had total assets of $1.054 billion and total liabilities of $947.3 million based on unaudited consolidated financial statements as of December 31, 2008. MAMMOTH CORONA: Court Sets Plan Outline Hearing for February 24 --------------------------------------------------------------- The Hon. Robert N. Kwan of the U.S. Bankruptcy Court for the Central District of California will consider at a hearing on February 24, 2010, at 11:00 a.m., the adequacy of the information in Mammoth Corona 1 LLC's Disclosure Statement in relation to its Chapter 11 Plan of Reorganization. The hearing will be at Courtroom 5D, 411 W Fourth St., Santa Ana, California. The Debtors will begin soliciting votes on the Plan following approval of the adequacy of the information in the Disclosure Statement. According to the Disclosure Statement, the Plan seeks to accomplish payment through the cash flow generated from the leasing of the Mammoth Property and through proceeds from a future sale or refinance of the Mammoth Property. In addition there is a $300,000 New Value contribution from the Interest Holders to cover any shortfalls in payments due under the plan. The Plan may provide for the Debtor to reorganize by continuing to operate and refinance or, to liquidate by selling assets of the estate, or a combination of both. The Debtor intends restructure one note held by U.S. Bank and converting, mechanics liens to deeds of trust, and contributing $300,000 in New Value to cover any debt service shortfalls. Secured creditors of the estate will be paid the present value of their claim at a market interest rate over a 42 month period, excepting that their claims may be paid in full prior to the 42nd month through a sale or refinance of the Mammoth Property. The effective date of the proposed Plan is June 15, 2010. Under the Plan, holders general unsecured claims ($26,319) will be paid over 42 months beginning at $42 per month on 100% of a principal balance of $26,319 or Class 3 Claimants may elect to receive 50% of their claim 12 months after the effective date as payment in full. In the event funds are not sufficient to pay the Class 3 Claimants upon sale of the Mammoth Property, the Class 3 Claimants will receive a pro rata share of the funds available by dividing the total amount of money each Class 3 Claimant is owed by the sum of the Class 3 Claimants claim and multiplying that percentage by the amount of money available to pay the Class 3 Claimants after sale of the Mammoth Property. The distributions under the Plan will be made from the $300,000 New Value contribution, the potential additional New Value Contribution to pay any Class 1 deficiency, available cash, cash flow from operations, refinance proceeds and net sale proceeds. A full-text copy of the Disclosure Statement is available for free at http://bankrupt.com/misc/MammothCorona_DS.pdf Based in San Juan Capistrano, California, Mammoth Corona 1 LLC filed for Chapter 11 on Oct. 16, 2009 (Bankr. C.D. Calif. Case No. 09-21220). Thomas C. Corcovelos, Esq., represents the Debtor. In its petition, the Debtor listed both assets and debts between $10 million and $50 million. MAMMOTH SAN JUAN: Court Continues Plan Outline Hearing on Feb. 22 ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Central District of California will continue to consider the adequacy of information in the Disclosure Statement filed by Mammoth San Juan Capistrano I, LLC, on February 22, 2010, at 9:00 a.m. at Courtroom 5D, 411 W. Fourth St., Santa Ana, California. The Debtors will begin soliciting votes on the Plan following approval of the adequacy of the information in the Disclosure Statement. According to the Disclosure Statement, the Debtor proposes to accomplish payments under the Plan by restructuring two notes held by JP Morgan Chase. The secured creditors of the estate will be paid the present value of their claim at a market interest rate over a 7 year period, excepting that their claims may be paid in full prior to the 7th year through a sale or refinance of the Mammoth property. The effective date of the proposed Plan is March 4, 2010. The distributions under the Plan will be made from available cash and net sale proceeds. The managing member of the Debtors, Robert Wish will provide oversight and assistance in the operation of the Debtor's business and day-to-day management decisions. Robert Wish will work to lease the remaining vacant space in the Mammoth property. The proceeds generated from the leases on the Mammoth property and any future refinance or sales proceeds will be used to fund payments to both secured and unsecured creditors. It is anticipated that there will be sufficient funds from the proceeds to pay all allowed secured and allowed unsecured claims as: -- secured creditor, JP Morgan Chase, will be paid in full on or before the 84th month after the effective date; -- the Orange County Tax Collector will be paid in full on or before the 72nd month after the effective date; and -- Allowed Class 4 General unsecured Claims may elect to receive a one-time lump sum payment equal to 25% of their allowed claim as payment in full on the 25th month after the effective date; or 100% of their allowed claim as payment in full on or before the 84th month after the effective date. A full-text copy of the Disclosure Statement is available for free at http://bankrupt.com/misc/MammothSanJuan_DS.pdf A full-text copy of the Chapter 11 Plan is available for free at: http://bankrupt.com/misc/MammothSanJuan_Chapter11Plan.pdf The Debtor has amended, for the second time, its Disclosure Statement and Plan of Reorganization. San Juan Capistrano, California-based Mammoth San Juan Capistrano I LLC operates a real estate business. The Company filed for Chapter 11 on July 8, 2009 (Bankr. C. D. Calif. Case No. 09-16836). Thomas Corcovelos, Esq., at Corcovelos Law Group represents the Debtor in its restructuring efforts. The Debtor listed between $10 million and $50 million each in assets and debts. MESA AIR: Gets Approval for Jones Day as Special Counsel -------------------------------------------------------- Debtors Mesa Air Group, Inc., and Freedom Airlines, Inc., and Delta Air Lines, Inc., are parties to the Delta Connection Agreement dated May 3, 2005, as amended on March 13, 2007, and March 10, 2009. The ERJ Agreement provides for operation by Freedom Airlines of up to 36 ERJ-145 50-seat regional jet aircraft for Delta. In addition, Mesa, Freedom Airlines and Delta are parties to a certain Delta Connection Agreement dated March 13, 2007. The CRJ Agreement provides for operation by Freedom Airlines of 14 CRJ-900 76-seat regional jet aircraft for Delta. Mesa and Freedom Airlines initiated a lawsuit against Delta on April 7, 2008, in the United States District Court for the Northern District of Georgia to enjoin Delta's alleged termination of the ERJ Agreement. The case is captioned "Mesa Air Group, Inc., and Freedom Airlines, Inc. v. Delta Air Lines, Inc.," Case No. 1:08-CV-1334-CC. Delta appealed the Georgia District Court's issuance of the preliminary injunction in favor of Mesa and Freedom Airlines. In July 2009, the U.S. Court of Appeals for the Eleventh Circuit affirmed the Georgia District Court's decision in the ERJ Litigation. A trial date has not yet been set by the Georgia District Court. On March 20, 2009, Mesa and Freedom Airlines filed a complaint in the Georgia District Court against Delta for the relief from the termination of the CRJ Agreement. The case is captioned "Mesa Air Group, Inc. and Freedom Airlines, Inc. v. Delta Air Lines, Inc.," Case No. 1:09-CV-0772-ODE. By the CRJ Litigation, Mesa and Freedom Airlines are seeking money damages resulting from Delta's wrongful termination of the CRJ Agreement. In the original complaint initiating the CRJ Litigation, Mesa and Freedom Airlines asserted damages in the total amount of between $8,000,000 and $15,000,000; however, as a result of updated damages calculations, the Debtors currently believe the damages could be as high as $40,000,000. The CRJ Litigation remains pending. According to Michael J. Lotz, the Debtors' president, Mesa is also involved in other pending litigation with Delta, including: (a) On August 6, 2008, Mesa filed a complaint against Delta in the U.S District Court for the District of Arizona after Delta's unauthorized retention of seven aircraft engines, which case is captioned "Mesa Air Group, Inc. v. Delta Air Lines, Inc.," Case No. 2:08-CV -01449-DGC -- Engine Litigation; and (b) Delta initiated an action against Mesa and Freedom Airlines in the Georgia District Court on August 19, 2009, alleging that Mesa and Freedom Airlines breached the ERJ Agreement regarding a "most favored nation" provision, which case is captioned "Delta Air Lines, Inc. v. Mesa Air Group, Inc. and Freedom Airlines, Inc.," Case No.1 :09-CV- 2267-CC -- Base Rate Litigation. In addition, Mesa is a defendant in an action for declaratory relief initiated by United Airlines, Inc. before the Petition Date. On November 23, 2009, United commenced a declaratory judgment action in the U.S. District Court for the Northern District of Illinois, which case is captioned "United Air Lines, Inc. v. Mesa Air Group, Inc.," Case No. 1:09-CY -07352. Pursuant to Section 327(e) of the Bankruptcy Code, Rules 2014 and 2016 of the Federal Rules of Bankruptcy Procedure, and Rules 2014-1 and 2016-1 of the Local Bankruptcy Rules for the Bankruptcy Court for the Southern District of New York, the Debtors sought and obtained the Court's authority to employ, nunc pro tunc to the Petition Date, Jones Day as their special counsel with respect to the Prepetition Litigation and any related or similar litigation. The Debtors' code-share relationships, and other business relationships, with Delta, United and US Airways, Inc., serve as the foundation of the Debtors' business operations and are critical to the success of their restructuring efforts, Mr. Lotz tells the Court. Preserving and defending these relationships, and related rights and claims, will be a critical component of the Debtors' overall restructuring in these cases, he asserts. Under the circumstances, as a fundamental component of their reorganization, the Debtors are compelled to promptly pursue claims against Delta, and to defend claims asserted, or to be asserted, by Delta or United in connection with the Prepetition Litigation and any related or similar litigation, Mr. Lotz says. As Special Counsel, Jones Day will: (a) advice and counsel the Debtors on all aspects of the Prepetition Litigation; (b) represent the Debtors in any litigation or contested matter related to the Prepetition Litigation, and perform all other necessary legal services in furtherance of the firm's role as special counsel for the Debtors with respect to the Prepetition Litigation; (c) perform other specific litigation-related services, as requested by the Debtors; and (d) assist the Debtors' bankruptcy professiona1s from time to time in connection with any issues relating to the Prepetition Litigation or other similar or related matters. Jones Day will be paid its customary hourly rates and reimbursed for its actual and necessary expenses incurred in connection with performing the Services. The current hourly rates of the attorneys and paraprofessionals currently expected to be most active with respect to the Prepetition Litigation and the Debtors' Chapter 11 cases are: G. Lee Garrett, Jr., partner $675 David M. Monde, partner $625 Morgan Hirst, associate $525 Paula Quist, associate $500 Robert Schmoll, associate $400 Jason Burnette, associate $325 Kacy Romig, associate $325 Megan Taylor, associate $275 Trixie Jones, paralegal $200 Jeff Grogan, trial practice project $150 coordinator Jones Day will also be reimbursed by the Debtors of any necessary out-of-pocket expenses. G. Lee Garrett, Jr., a partner at Jones Day, assures the Court that the firm has not, does not, and will not represent any entities other than the Debtors in matters related to the Prepetition Litigation or these Chapter 11 cases. Jones Day will not represent any entity adverse to the Debtors in connection with these Chapter 11 cases, the Prepetition Litigation or otherwise. Mr. Garrett discloses that the firm represented or currently represents these entities in matters unrelated to the Debtors, these bankruptcy cases, or the Prepetition Litigation: * Delta; * Wells Fargo Bank NW, N.A.; and * Airline Reporting Corporation. The Debtors are estimated to owe Jones Day $10,743 for services performed before the Petition Date. However, Jones Day is not seeking to collect this amount from the Debtors or their estates, Mr. Garrett says. He attests that Jones Day is a disinterested person, as the term is defined in Section 101(14) of the Bankruptcy Code. 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) MESA AIR: Gets Nod to Continue LOC & Surety Bond Programs --------------------------------------------------------- Mesa Air Group Inc. obtained permission from the Bankruptcy Court to maintain their surety bond programs without interruption, on the same basis, and in accordance with the same practices and procedures as were in effect before the Petition Date. In the ordinary course of their business, Mesa Air and its debtor affiliates are required to provide to third parties certain letters of credit and surety bonds to secure their payment or performance of certain obligations, including workers' compensation obligations; obligations owed to municipalities; obligations associated with foreign operations; contractual or permit obligations; fuel and liquor taxes; airport obligations; and U.S., Canadian or other customs requirements. Accordingly, the Debtors seek authority from Judge Martin Glenn of the U.S. Bankruptcy Court for the Southern District of New York to (i) pay, in their sole discretion, all amounts arising under their Letter of Credit and Surety Bond Programs due and payable after the Petition Date, and (ii) renew or obtain, in their sole discretion, new letters of credit and surety bonds, as needed, in the ordinary course of business. It is vital that the Debtors be permitted to continue and renew their Letter of Credit and Surety Bond Programs to ensure there is no disruption in their ability to conduct their operations, Maria A. Bove, Esq., at Pachulski Stang Ziehl & Jones LLP, in New York, tells the Court. The non-payment of any obligations under the Letter of Credit and Surety Bond Programs could result in one or more of the Providers terminating or declining to renew their letters of credit or surety bonds, or refusing to enter into letters of credit or surety bonds with the Debtors in the future, she asserts. If any letters of credit or surety bonds lapse without renewal, the Debtors could default on various obligations, which could severely disrupt the Debtors' operations, to the detriment of all parties-in-interest, Ms. Bove says. As of the Petition Date, the Providers have posted, on behalf of the Debtors, approximately $12,300,000 in outstanding letters of credit issued pursuant to certain prepetition agreements. Many of these letters of credit are collaterized by cash collateral. Commission and transaction fees are charged by the Providers on an annual basis as a requirement for the issuance and maintenance of these letters of credit, Ms. Bove relates. The amounts charged are generally on a percentage basis. The Debtors do not believe they owe any prepetition amounts to the Providers under the letters of credit, she adds. As of the Petition Date, the Debtors have approximately $2,500,000 in outstanding surety bonds. The premiums for most of the surety bonds are determined annually and are paid by the Debtors at inception and annually thereafter, according to Ms. Bove. The Debtors' principal surety is Fidelity and Deposit Company of Maryland. In addition, the Debtors use brokers to procure surety bonds. The Debtors believe that all premiums and related fees that were due as of the Petition Date have been fully paid. The Debtors are parties to a number of Provider indemnity agreements, pursuant to which the Debtors have agreed to indemnify certain parties from any loss, cost, damage or expense they may incur by reason of their execution of any bonds on behalf of the Debtors. By this motion, the Debtors seek the authority, but not the obligation, to honor these Provider Indemnity Agreements. Based on the current financial status of the Debtors, Ms. Bove says it is unlikely that they will be able to renew or obtain replacement letters of credit or surety bonds on an unsecured basis or, in some cases, capacity may not be available even on a secured basis. The Debtors' ability to provide the financial assurances necessary to continue their business operations during the reorganization process will require the maintenance of the existing Letter of Credit and Surety Bond Programs, Ms. Bove tells the Court. In addition, the Debtors may also need additional letters of credit and bonding capacity not currently provided by the Letter of Credit and Surety Bond Programs, she says. A list of the lending institutions, sureties and private insurance carriers that provide the Debtors with letters of credit or surety bonds, including the aggregate coverage amounts provided, is available at no charge at: http://bankrupt.com/misc/MA_LOC&SuretyBondsProviders010810.pdf 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) MESA AIR: Gets Nod to Hire Pachulski as Bankruptcy Attorneys ------------------------------------------------------------ Mesa Air Group Inc. and its units obtained the Court's authority to employ Pachulski Stang Ziehl & Jones LLP as their bankruptcy attorneys, nunc pro tunc to the Petition Date. Pachulski represented Mesa Air Group, Inc., and its subsidiaries since April 27, 2009. The firm is very familiar with the Debtors' business and affairs, and many of the potential legal issues that may arise in the context of these Chapter 11 cases, Michael J. Lotz, Mesa Air's president, relates. As counsel, Pachulski will: (a) take necessary or appropriate actions to protect and preserve the Debtors' estates; (b) prepare, on behalf of the Debtors, as debtors in possession, necessary or appropriate motions, applications, answers, orders, reports and other papers in connection with the administration of their estates; (c) counsel the Debtors with regard to their rights and obligations as debtors in possession, and their powers and duties in the continued management and operations of their businesses and properties; (d) take necessary or appropriate actions in connection with a plan or plans of reorganization, related disclosure statements and all related documents, and further actions, as may be required in connection with the administration of the Debtors' estates; and (e) act as general bankruptcy counsel for the Debtors, and perform all other necessary or appropriate legal services in connection with these Chapter 11 cases. Pachulski will be paid its standard hourly rates, subject to periodic adjustments, and reimbursed of actual, necessary expenses and other charges incurred by the firm. The current hourly rates of the principal attorneys and paralegals presently designated to represent the Debtors are: Richard M. Pachulski $925 Laura Davis Jones $855 Robert J. Feinstein $855 Debra I. Grassgreen $775 Joshua M. Fried $625 Maria A. Bove $550 John W. Lucas $450 David A. Abadir $425 Patricia Jeffries $235 Other attorneys and paralegals may, from time to time, serve the Debtors in connection with these matters. Pachulski will also be reimbursed for any necessary out-of-pocket expenses. Richard M. Pachulski, Esq., a partner at Pachulski Stang Ziehl & Jones LLP, relates that the firm represented, represents, and in the future will likely represent many entities that are claimants of or interest holders in the Debtors in matters unrelated to these pending Chapter 11 cases. Some of these entities are, or may consider themselves to be, creditors or parties in interest in these bankruptcy cases or to otherwise have interests in these cases, he says. The firm, however, is not representing any of those entities and will not represent them in any matters that they may have against the Debtors in these Chapter 11 cases, Mr. Pachulski assures the Court. Mr. Pachulski also discloses that the firm currently represents Greenwich Capital Financial Products, Inc., in connection with its interests in In re American Business Financial Services, Inc., case no. 05-10203 (MFW) (Bankr. D. Del. 2005). He adds that the firm also currently represents CIT Group/Business Credit, Inc., in connection with its interests in In re New Century TRS Holdings, Inc., case no. 07-10416 (KJC) (Bankr. D. Del. 2007). These representations are unrelated to the Debtors' bankruptcy cases, he assures the Court. Mr. Pachulski adds that his firm does not and will not represent these entities in the Debtors' cases and will not represent the Debtors in any claim may have against these entities. Mr. Pachulski further discloses that during the 12-month period before the Petition Date, the firm received an aggregate of $1,400,204 from the Debtors for professiona1 services performed and expenses incurred, a portion of which is an unapplied retainer. The Debtors did not owe Pachulski any amounts for legal services rendered before the Petition Date, although, as of the Petition Date, the firm had not completed a final reconciliation of its prepetition fees and expenses. Upon final reconciliation of the amount actually incurred prepetition, Pachulski will apply its retainer to the outstanding fees, and any balance remaining from the prepetition payments to the firm will be utilized as retainer to apply to postpetition fees and expenses pursuant to the compensation procedures approved by the Court and the Bankruptcy Code, Mr. Pachulski says. Pachulski does not hold or represent any interest adverse to the Debtors' estates. The firm is a disinterested person, as the term is defined in Section 101(14) of the Bankruptcy Code, he asserts. 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) NORTHERN 120: Taps Polsinelli Shughart as Bankr. Counsel -------------------------------------------------------- Northern 120, LLC, has asked permission from the U.S. Bankruptcy Court for the District of Arizona to employ Polsinelli Shughart PC as bankruptcy counsel, nunc pro tunc to the Petition Date. Polsinelli Shughart will: a. prepare pleadings and applications and conduct examinations incidental to administration; b. advise the Debtor of its rights, duties, obligations under Chapter 11 of the Bankruptcy Code; c. take any and all other necessary action incident to the proper preservation and administration of this Chapter 11 estate; and d. advise the Debtor in the formulation and presentation of a plan pursuant to Chapter 11 of the Bankruptcy Code, the disclosure statement and concerning any and all matters relating thereto. Polsinelli Shughart will be compensated $135 to $600 per hour for the services of its attorneys and paralegals who will work on the legal matters. The Debtor assures the Court that Polsinelli Shughart is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Phoenix, Arizona-based Northern 120, LLC, is a limited liability company engaged in the business of owning and developing real property in the State of Arizona. The Company filed for Chapter 11 bankruptcy protection on November 5, 2009 (Bankr. D. Ariz. Case No. 09-28417). Mark W. Roth, Esq., at Polsinelli Shughart P.C. 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. OPTI CANADA: Reports Year-End 2009 Financial Results ---------------------------------------------------- OPTI Canada Inc. (OPTI) said the company's financial and operating results for the year ended Dec. 31, 2009. Financial Highlights: 2009 2008 2007 ----- ---- ---- Net earnings (loss) $(306) $(477) $151 Working capital (deficiency) 168 (25) 271 Total oil sands expenditures 148 706 961 Shareholders' equity $1,311 $1,471 $1,951 Common shares outstanding 282 196 195 "Significant operational milestones were achieved at the Long Lake Project in 2009. All Upgrader units have successfully operated, demonstrating that our technology works, and our on stream factor has improved considerably. The gasifier is working as designed, providing a low-cost fuel source that reduces our reliance on natural gas. We have made and sold our premium finished product, PSCT, which has received pricing equal to or above other synthetic crude oils. As the Project ramps up to full production, we expect that we will have a substantial operating cost and netback advantage. "In our SAGD operation, we are encouraged by the improved quantity and reliability of steam generation after the turnaround in the third quarter. Recent steam rates have been the highest since the project commenced operation. With the number of wells on circulation and on SAGD at all-time highs, and several wells recently turned over to production, the focus of operations is now on optimizing reservoir performance and maximizing bitumen production. We continue to expect a significant ramp-up through 2010. "In the fourth quarter of 2009 we also completed several transactions that strengthened our financial position. We believe that we now have significant liquidity to support Long Lake ramp- up and to complete our previously announced review of strategic alternatives to enhance shareholder value," said Chris Slubicki, President and Chief Executive Officer of OPTI. A full-text copy of the company's year end 2009 results is available for free at http://ResearchArchives.com/t/s?51fe OPTI Canada Inc. is a Calgary, Alberta-based company focused on developing major oil sands projects in Canada using its proprietary OrCrude(TM) process. The first project, Phase 1 of Long Lake, consists of 72,000 barrels per day of SAGD (steam assisted gravity drainage) oil production integrated with an upgrading facility. The upgrader uses the OrCrude(TM) process combined with commercially available hydrocracking and gasification. Through gasification, this configuration substantially reduces the exposure to and the need to purchase natural gas. On a 100% basis, the Project is expected to produce 58,500 bbl/d of products, primarily 39 degree API Premium Sweet Crude with low sulphur content, making it a highly desirable refinery feedstock. Due to its premium characteristics, the Company expects PSC(TM) to sell at a price similar to West Texas Intermediate (WTI) crude oil. The Long Lake Project is being operated in a joint venture with Nexen Inc. OPTI holds a 35% working interest in the joint venture. OPTI's common shares trade on the Toronto Stock Exchange under the symbol OPC. * * * As reported by the Troubled Company Reporter on November 18, 2009, Moody's Investors Service lowered OPTI Canada's Caa1 Corporate Family Rating to Caa2, and Caa1 $1.75 billion second lien notes rating to Caa3. Moody's also assigned a B1 rating to OPTI's proposed C$150 million secured revolver and a B2 rating to its proposed secured notes issue. The rating outlook remains negative. The ratings on the existing C$350 million revolver will be withdrawn when the new C$150 million revolver closes. The TCR also said November 18, 2009, Standard & Poor's Ratings Services assigned its 'B+' debt rating to OPTI Canada Inc.'s proposed US$425 million senior secured notes due 2012, and its C$150 million secured revolving credit facility. (The closing of the new credit facility is subject to the notes' sale.) S&P will withdraw the ratings on OPTI's existing C$350 million credit facility when the proposed credit facility closes. S&P also assigned a '1' recovery rating to the notes and credit facility, indicating S&P's expectations of very high (90%-100%) recovery in the event of a default. S&P views the sale of the proposed notes as neutral to OPTI's credit profile. PACIFIC ETHANOL: Wants March 12 Extension of Plan Exclusivity ------------------------------------------------------------- Pacific Ethanol Holding Co. LLC and its units ask the U.S. Bankruptcy Court for the District of Delaware to extend (i) until March 12, 2010, their exclusive period to propose a Chapter 11 plan, and (ii) until May 7, 2010, their period to solicit acceptances of the plan. Pacific Ethanol says that it has been unable to complete a plan of reorganization as it has been busy with stabilizing the business, obtaining financing, and restarting commercial operations at its Magic Valley plant. It says that discussions with secured creditors are ongoing and that it is analyzing various options available. Pacific Ethanol previously obtained a Feb. 12 extension of its plan exclusivity. The Court granted the request for a third extension on Feb. 3. About Pacific Ethanol Pacific Ethanol Holding Co. LLC and four affiliates filed for Chapter 11 on May 17, 2009 (Bankr. D. Del. Case No. 09-11713). Judge Kevin Gross handles the case. Attorneys at Cooley Godward Kronish LLP represent the Debtors as counsel. Attorneys at Potter Anderson & Corroon LLP are co-counsel. Epiq Bankruptcy Solutions LLC is the claims agent. Pacific Ethanol Holding disclosed $50 million to $100 million in assets and $100 million to $500 million in debts in its petition. Pacific Ethanol Inc. and its marketing subsidiaries, Kinergy Marketing LLC, and Pacific Ag. Products, LLC, have not filed for Chapter 11 bankruptcy protection. The Company is expected to continue to manage the Plant Subsidiaries under an Asset Management Agreement and Kinergy and PAP are expected to continue to market and sell the Plant Subsidiaries' ethanol and feed production under existing Marketing Agreements. PACIFIC GALVESTON: Taps John Lewis as Bankruptcy Counsel -------------------------------------------------------- Pacific Galveston Properties L.P. has asked for permission from the U.S. Bankruptcy Court for the Northern District of Texas to employ John P. Lewis, Jr., as bankruptcy counsel. Mr. Lewis will: a. assist in the preparation of schedules and statement of affairs and any amendments thereto; b. attend and participate with the Debtor in its Sec. 341 meeting; c. direct the Debtor concerning administrative and reorganization issues; and d. perform other necessary legal services in connection with the Debtor's Chapter 11 case and in any adversary proceedings arising in the case. Mr. Lewis will be compensated $00 per hour for his services. The Debtor assures the Court that Mr. Lewis is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Dallas, Texas-based Pacific Galveston Properties, LP, dba Island Bay Apartments, filed for Chapter 11 bankruptcy protection on January 4, 2010 (Bankr. N.D. Texas Case No. 10-30122). John P. Lewis, Jr., Esq., at Law Office of John P. Lewis, Jr., 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. PAJAAMCO FAMILY: Meeting of Creditors Slated for February 23 ------------------------------------------------------------ The U.S. Trustee for Region 7 will convene a meeting of creditors in PAJAAMCO Family Limited Partnership's Chapter 11 case on February 23, 2010, at 11:45 a.m. The meeting will be held at 222 East Van Buren, Room 301, Harlingen, 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. McAllen, Texas-based PAJAAMCO Family Limited Partnership, fdba Pajamco Family Limited Partnership, filed for Chapter 11 bankruptcy protection on January 4, 2010 (Bankr. S.D. Texas Case No. 10-70010). John Kurt Stephen, Esq., at Cardena Whitis and Stephen, assists the Company in its restructuring effort. The Company has assets of $26,760,745, and total debts of $15,664,200. PENN TRAFFIC: Foxhill Opportunity Ceases to Own 5% of Common Stock ------------------------------------------------------------------ Foxhill Opportunity Master Fund, L.P., has filed with the Securities and Exchange Commission Amendment No. 1 to its Schedule 13D, was initially filed on November 30, 2009. The CUSIP Number of the common stock is 707832309. Items 5(a)-(d) are hereby amended and restated to read as follows: (a)-(d) On February 4, 2010, Foxhill Master Fund sold in the open market 330,000 Shares at a price per Share of $0.0558. On February 5, 2010, Foxhill Master Fund sold in the open market the remaining 870,000 Shares it beneficially owned at a price per Share of $0.0606. Accordingly, the Reporting Persons no longer beneficially own any securities of the Issuer. Item 5(e) is hereby amended and restated to read as follows: (e) As of February 5, 2010, the Reporting Persons ceased to be the beneficial owners of more than 5% of the Shares of the Issuer. A full-text copy of amendment no. 1 to Fox Opportunity Master Fund, L.P.'s SC 13D is available for free at: http://researcharchives.com/t/s?51f7 A full-text copy of the initial SC 13D filing is available for free at http://researcharchives.com/t/s?51f8 About Penn Traffic 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. PENTON BUSINESS: Case Summary & 50 Largest Unsec. Creditors ----------------------------------------------------------- Debtor: Penton Business Media Holdings, Inc. dba Donohue Meehan Publishing Company dba Healthwell.com, Inc. dba One, Inc. dba PBI Media Inc. dba Penton Internet, Inc. dba PMI Three, Inc. dba PMI Two, Inc. dba PRIMEDIA Business Media & Magazines Inc. dba PRIMEDIA Business Media & Magazines Internet Inc. dba PRIMEDIA Business Media & Magazines Publications Inc. dba Prism Business Media Inc. dba Prism Business Media Holdings Inc. dba Prism Business Media Internet Inc. dba Prism Business Media Publications Inc. dba Stardust.com, Inc. dba Tech Conferences, Inc. 249 W. 17th Street New York, NY 10011 Bankruptcy Case No.: 10-10689 Debtor-affiliate filing separate Chapter 11 petitions: Entity Case No. ------ -------- Duke Communications International, Inc. 10-10692 Duke Investments, Inc. 10-10693 DVGM & Associates 10-10694 Internet World Media, Inc. 10-10695 Penton Business Media Holdings, Inc. 10-10689 Penton Business Media Internet, Inc. 10-10696 Penton Business Media Publications, Inc. 10-10697 Penton Business Media, Inc. 10-10691 Penton Media, Inc. 10-10690 Chapter 11 Petition Date: February 10, 2010 Court: United States Bankruptcy Court Southern District of New York Judge: Arthur J. Gonzalez About the Business: As a leading, independent, business-to- business media company, Penton -- http://www.penton.com/-- knows business and how to create and disseminate the vital content that moves markets. Headquartered in New York City, the privately held company is owned by MidOcean Partners and U.S. Equity Partners II, an investment fund sponsored by Wasserstein & Co., LP, and its co-investors. Debtors' Counsel: Lisa G. Laukitis, Esq. Jones Day 222 East 41st Street New York, NY 10017 Tel: (212) 326-3939 Fax: (212) 755-7306 Email: http://www.jonesday.com/ Brad B. Erens, Esq. Robert E. Krebs, Esq. David A. Hall, Esq. Jones Day 77 West Wacker Chicago, IL 60601 Tel: (312) 782-3939 Fax: (312) 782-8585 Email: http://www.jonesday.com/ Debtors' Claims Agent: Kurtzman Carson Consultants LLC Estimated Assets: $500,000,001 to $1,000,000,000 Estimated Debts: More than $1,000,000,000 A full-text copy of the Debtor's petition, including a list of its 50 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/nysb10-10689.pdf Debtor's List of 50 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Worldcolor USA Corp Trade Debt $1,595,825 R R Donnelley Receivables Trade Debt $1,412,828 Inc. A T Clayton and Company Trade Debt $574,806 Inc. Hallmark Data Systems LLC Trade Debt $532,661 American Pacesetters Trade Debt $340,394 Enterprise LLC Three Z Printing Company Trade Debt $296,336 Georgia World Congress Trade Debt $229,608 Center Brown Printing Company Trade Debt $207,815 Bleuchip International Trade Debt $162,851 City of Anaheim Trade Debt $119,831 Convention Center On24 Inc. Trade Debt $114,577 Unisfair Trade Debt $111,750 United Parcel Service Trade Debt $109,859 City of Tampa Trade Debt $109,140 Anaheim Convention Center Trade Debt $107,225 Biocompare Trade Debt $104,000 Quadgraphics Inc. Trade Debt $81,885 CDW Direct LLC Trade Debt $74,110 California Marketing Trade Debt $71,139 Infousa Trade Debt $70,000 Neospire Inc. Trade Debt $66,963 Aramark Corporation Trade Debt $64,800 Inquiry Management Trade Debt $64,043 Systems Inc. Yesmail Canada Trade Debt $63,571 Walter Karl Inc. Trade Debt $63,274 TMS Transportation Trade Debt $58,583 Management Services Riverbend Executive Trade Debt $58,428 Center Inc. Delta Printing Solutions Trade Debt $56,889 Inc. ESP Computer Services Trade Debt $50,549 Convention Data Services Trade Debt $49,569 Inc. Cerberus Associates LLC Bank Debt Unliquidated Deficiency Claim UBS AG Stamford Branch Bank Debt Unliquidated Deficiency Claim Plainfield Asset Bank Debt Unliquidated Management LLC Deficiency Claim Riversource Investments Bank Debt Unliquidated LLC Deficiency Claim BlackRock Financial Bank Debt Unliquidated Management, Inc. Deficiency Claim Orix Financial Corp Bank Debt Unliquidated Deficiency Claim Apidos Capital Management Bank Debt Unliquidated LLC Deficiency Claim Hartford Investment Bank Debt Unliquidated Management Co Deficiency Claim Hillmark Capital Bank Debt Unliquidated Deficiency Claim Satellite Asset Bank Debt Unliquidated Management Deficiency Claim Symphony Asset Management Bank Debt Unliquidated LLC Deficiency Claim Pioneer Investment Bank Debt Unliquidated Management Inc Deficiency Claim Credit Suisse Bank Debt Unliquidated Deficiency Claim GE Capital Debt Advisors Bank Debt Unliquidated Deficiency Claim Alcentra NY LLC Bank Debt Unliquidated Deficiency Claim Callidus Capital Bank Debt Unliquidated Management Deficiency Claim Halbis Distressed Bank Debt Unliquidated Opportunity Master Deficiency Claim Fund Ltd MJX Asset Management Bank Debt Unliquidated LLC Deficiency Claim Knightsbridge Clo 2008-1 Bank Debt Unliquidated Ltd Deficiency Claim c/o ACKB LLC Primus CLO II Ltd Bank Debt Unliquidated Deficiency Claim The petition was signed by Jean B. Clifton, the company's executive vice-president and chief financial officer. PENTON BUSINESS: S&P Downgrades Corporate Credit Rating to 'CC' --------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on New York City-based Penton Business Media Holdings Inc. and related entities. The corporate credit rating was lowered to 'CC' from 'CCC' and the rating outlook is negative. The rating action reflects Penton's announcement that it expects to implement a restructuring through a prepackaged filing under Chapter 11 of the U.S. Bankruptcy Code. The global recession and secular challenges facing print advertising in light of competition from Internet-based media contributed to the company's weak operating performance in 2009. The weak operating performance raised leverage, weakened interest coverage, and reduced liquidity. S&P believes these factors contributed to the company's decision to file in the next few days. S&P is reevaluating its recovery ratings on Penton's first- and second-lien senior secured facilities. The lenders have agreed to a plan that would eliminate $270 million of the company's debt and extend the maturity of the senior secured facilities through 2014. S&P analyzes Penton Business Media Holdings on a consolidated basis with Penton Business Media Inc. and Penton Media Inc. PINNACLE ENTERTAINMENT: Moody's Affirms 'B2' Corp. Family Rating ---------------------------------------------------------------- Moody's Investors Service revised Pinnacle Entertainment, Inc.'s rating outlook to negative from stable. Pinnacle's B2 Corporate Family, B2 Probability of Default, B2 senior unsecured note, and Caa1 senior subordinated note ratings were affirmed. The outlook revision to negative from stable acknowledges the sudden and significant earnings decline in the fourth quarter of fiscal 2009 from the company's Lake Charles, LA casino, and reflects continued earnings declines from its Boomtown New Orleans and Belterra casino properties. These factors, combined with the company's commitment to further development in Louisiana, could make it difficult for Pinnacle to achieve debt/EBITDA below 6.5 times by the end of fiscal 2011-- the target leverage need for the company to maintain its B2 Corporate Family Rating. Pinnacle's B2 Corporate Family Rating considers its high leverage -- debt/EBITDA is expected to remain above 7 times through fiscal 2010 -- and significant concentration in Louisiana. Positive rating consideration is given to the company's leading market share position in Lake Charles, LA, and expectation that the company's River City casino development in St. Louis, MO -- scheduled to open in March 2010 -- will contribute favorably to earnings and cash flow. Also considered is the company's adequate liquidity profile. Pinnacle recently entered into a new (unrated) $375 million revolving credit agreement expiring in 2014 that refinanced a $531 million revolver which had a December 2010 expiration date. Ratings affirmed: * $450 million 8.625% senior unsecured notes due 2017 at B2 (LGD 3, 40%) * $380 million 7.5% senior subordinated notes due 2015 at Caa1 (LGD 5, 82%) Rating withdrawn: * $531 million senior secured revolver expiring 2010 at Ba2 (LGD 2, 13%) The previous rating action on Pinnacle occurred on July 27, 2009, when Moody's assigned a B2 rating to the company's 8.635% senior unsecured notes and affirmed the company's existing ratings. Pinnacle owns and operates casinos in Nevada, Louisiana, Indiana, Missouri, and Argentina. The company generates approximately $1 billion of annual net revenues. POPE & TALBOT: Trustee Fails to File Claim vs. Abitibi On-Time -------------------------------------------------------------- Bill Rochelle at Bloomberg News reports that a Chapter 7 trustee in Delaware asked the bankruptcy judge for permission to file a late claim against AbitibiBowater Inc. According to the report, the Chapter 7 trustee for Pope & Talbot Inc. said it was "unknown" to him when Abitibi filed for reorganization in April 2009. The trustee also said he didn't know when the bankruptcy judge in Delaware set Nov. 13 as the last day for filing claims against Abitibi. The Pope & Talbot trustee, according to Bloomberg, evidently didn't learn about the bankruptcy until September when he sued Abitibi to recover an alleged $530,000 preference. The bankruptcy judge in Abitibi's case will decide at a March 23 hearing whether the Pope & Talbot trustee can file a late claim. 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 US$9,937,000,000 in total assets and US$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). About Pope & Talbot Inc. Based in Portland, Oregon, Pope & Talbot Inc. (Other OTC: PTBT.PK) -- http://www.poptal.com/-- was a pulp and wood products business. Pope & Talbot was founded in 1849 and produced market pulp and softwood lumber at mills in the U.S. and Canada. Markets for the company's products include the U.S., Europe, Canada, South America and the Pacific Rim. PricewaterhouseCoopers Inc. petitioned for Chapter 15 Bankruptcy on Aug. 22, 2008, (Bankr. D. Del. Lead Case No. 08-11933). Fourteen debtor-affiliates with pending Chapter 7 cases also filed for separate Chapter 15 petitions. Michael R. Lastowski, Esq., at Duane Morris LLP represents the Debtors in their restructuring efforts. The Debtors listed assets between $100 million and $500 million, and debts between $100 million and $500 million. On Oct. 28, 2007, the company and its U.S. and Canadian subsidiaries applied for protection under the Companies' Creditors Arrangement Act of Canada. The Debtors' CCAA Stay expired on Jan. 16, 2008. On Nov. 19, 2007, the company and 14 of its debtor-affiliates filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 07-11738). The Court converted their Chapter 11 cases to a Chapter 7 liquidation proceeding. Pope & Talbot Pulp Sales Europe, LLC, a subsidiary, on Nov. 21, 2007, filed an application for relief under Belgian bankruptcy laws in the commercial court in Brussels. PRIMUS TELECOM: Whitebox Advisors Owns 5.6% of Common Stock ----------------------------------------------------------- Whitebox Advisors, LLC, has filed with the Securities and Exchange Commission Amendment No. 3 to its Schedule 13-G which was initially filed on February 14, 2008. The CUSIP Number of the Common Stock is 741929301. Whitebox Advisors, LLC, et al., disclosed that they may be deemed to beneficially own shares of Primus Telecommunications Group, Incorporated's common stock: Shares Beneficially Company Owned Percentage ------- ------------ ---------- Whitebox Advisors, LLC 539,244 5.6% Whitebox Convertible Arbitrage Advisors, LLC 97,804 1.0% Whitebox Convertible Arbitrage Partners, L.P. 97,804 1.0% Whitebox Concentrated Convertible Arbitrage Fund, L.P. 97,804 1.0% Whitebox Concentrated Convertible Arbitrage Fund, Ltd. 97,804 1.0% Whitebox Combined Advisors, LLC 235,169 2.4% Whitebox Combined Partners, L.P. 235,169 2.4% Whitebox Multi-Strategy Fund, L.P. 235,169 2.4% Whitebox Multi-Strategy Fund, Ltd. 235,169 2.4% Whitebox Hedged High Yield Advisors, LLC 83,521 0.9% Whitebox Hedged High Yield Partners, L.P. 83,521 0.9% Whitebox Credit Arbitrage Fund, L.P. 83,521 0.9% Whitebox Credit Arbitrage Fund, Ltd. 83,521 0.9% Pandora Select Advisors, LLC 67,783 0.7% Pandora Select Partners LP 67,783 0.7% Pandora Select Fund, LP 67,783 0.7% Pandora Select Fund, Ltd 67,783 0.7% A full-text copy of Whitebox Advisors' amendment no. 3 to its Schedule 13-G is available at http://researcharchives.com/t/s?5244 About Primus Telecom PRIMUS Telecommunications Group, Incorporated (OTC BB: PMUG) -- http://www.primustel.com/-- is a facilities-based integrated global communications services provider offering international and domestic voice, voice-over-Internet protocol (VOIP), Internet, wireless, data and hosting services to business and residential retail customers and other carriers located primarily in the United States, Canada, Australia, the United Kingdom and western Europe. PRIMUS provides services over its global network of owned and leased transmission facilities, including approximately 500 points-of-presence (POPs) throughout the world, ownership interests in undersea fiber optic cable systems, 18 carrier-grade international gateway and domestic switches, and a variety of operating relationships that allow it to deliver traffic worldwide. Founded in 1994, PRIMUS is based in McLean, Virginia. The Company and four its affiliates filed for Chapter 11 protection on March 16, 2009 (Bankr. D. Del. Lead Case No. 09-10867). George N. Panagakis, Esq., and T Kellan Grant, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in Chicago, are the Debtors' proposed counsel. Davis L. Wright, Esq., Eric M. Davis, Esq., and Anthony Clark, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in Wilmington, Delaware, are the Debtors' proposed local counsel. The Debtor proposed CRT Investment Banking LLC as financial adviser and investment banker. When the Debtors filed for protection from their creditors, they listed assets between $100 million and $500 million, and debts between $500 million and $1 billion. The Debtors filed their proposed plan of reorganization together with their bankruptcy petitions on March 16, 2009. An amended reorganization plan was filed April 27, 2009 and the final plan was filed on June 12, 2009. Primus has implemented its Chapter 11 reorganization plan. Primus' Chapter 11 plan was confirmed by the U.S. Bankruptcy Court for the District of Delaware on June 12, 2009. * * * As reported in the Troubled Company Reporter on December 8, 2009, Standard & Poor's Rating Services assigned its 'B-' corporate credit rating to Primus Telecommunications Group Inc. S&P also assigned 'B' issue-level and '2' recovery ratings to an aggregate $130 million of debt expected to be issued by two Primus units: Primus Telecommunications Holding Inc.'s $85 million senior secured notes due 2016 and Primus Telecommunications Canada Inc.'s $45 million senior secured notes due 2016. The '2' recovery rating indicates expectations for substantial (70%-90%) recovery of principal in the event of payment default. At the same time S&P assigned its 'CCC+' issue-level and '5' recovery ratings to unit Primus Telecommunications IHC Inc.'s existing $123 million senior secured subordinated notes due 2013. The '5' recovery rating on the notes indicates expectations for modest (10%-30%) recovery in the event of payment default. Outstanding debt, pro forma for the new notes, will be approximately $260 million, not adjusted for operating leases. Primus emerged from Chapter 11 bankruptcy on July 1, 2009, having discharged over half of its pre-petition debt. PROLIANCE INT'L: Dimensional Fund Ceases to Own 5% of Common Stock ------------------------------------------------------------------ Dimensional Fund Advisors LP has filed with the Securities and Exchange Commission Amendment No.6 to its Schedule 13G with respect to Proliance International, Inc. common stock covered by CUSIP Number 74340R104. Dimensional Fund discloses that it has ceased to be beneficial owners of 5% or more of Proliance International Inc.'s common stock. A full-text copy of the amendment no. 6 to Dimensional Fund's SC 13G is available for free at http://researcharchives.com/t/s?51fb About Proliance International Based in New Haven, Connecticut, Proliance International, Inc. -- http://www.pliii.com/-- aka Godan makes automobile parts. The Company and its affiliates filed for Chapter 11 on July 2, 2009 (Bankr. D. Del. Lead Case No. 09-12278). Christopher M. Samis, Esq., and Daniel J. DeFranceschi, Esq., at Richards, Layton & Finger PA, represent the Debtors in their restructuring efforts. The Debtors' financial condition as of June 22, 2009, showed total assets of $160.3 million and total debts of $133.5 million. The sale of Proliance's North American assets to Centrum Equities XV, LLC, was consummated under the provisions of Section 363 of the Bankruptcy Code on August 14, 2009. PROTOSTAR LTD: Creditor Blasts Firm's Bid For Sale-Related Bonuses ------------------------------------------------------------------ Law360 reports that creditor Afro Asian Satellite Communications Mauritius Ltd. has objected to ProtoStar Ltd.'s renewed request to pay bonuses to management and other employees for helping arrange the $210 million sale of a satellite to Intel Subsidiary Holding Co. Ltd. Hamilton, HM EX, Bermuda-based ProtoStar Ltd. is a satellite operator formed in 2005 to acquire, modify, launch and operate high-power geostationary communication satellites for direct-to- home satellite television and broadband internet access across the Asia-Pacific region. The Company and its affiliates filed for Chapter 11 on July 29, 2009 (Bankr. D. Del. Lead Case No. 09-12659). The Debtor selected Pachulski Stang Ziehl & Jones LLP as Delaware counsel; Law Firm of Appleby as their Bermuda counsel; UBS Securities LLC as financial advisor & investment banker and Kurtzman Carson Consultants LLC as claims and noticing agent. The Debtors have tapped UBS Securities LLC as investment banker and financial advisor. In their petition, the Debtors listed between US$100 million and US$500 million each in assets and debts. As of December 31, 2008, ProtoStar's consolidated financial statements, which include non- debtor affiliates, showed total assets of US$463,000,000 against debts of US$528,000,000. QUEST RESOURCE: PostRock Registration Statement Now Effective ------------------------------------------------------------- Quest Resource Corporation and Quest Energy Partners, L.P. said the Securities and Exchange Commission has declared the Registration Statement of PostRock Energy Corporation on Form S-4 effective. The Form S-4 registers with the SEC PostRock's common stock to be issued in connection with the pending merger of QRCP, QELP, and Quest Midstream Partners, L.P. into PostRock, a new, publicly- traded corporation that would wholly own all three entities. Shareholders of QRCP and QELP as of the Feb. 1, 2010 record date will be mailed a copy of the definitive joint proxy statement/prospectus included in the Registration Statement in order to consider and vote upon the Merger at shareholder meetings that have been scheduled for March 5, 2010. Going Concern The Company has incurred significant losses from 2003 through 2008 and into 2009, mainly attributable to operations, legal restructurings, financings, the current legal and operational structure and, to a lesser degree, the cash expenditures resulting from the investigation related to certain unauthorized transfers, repayments and re-transfers of funds to entities controlled by its former chief executive officer. The Company has determined that there is substantial doubt about its ability to continue as a going concern. About Quest Resource Quest Resource Corporation -- http://www.questresourcecorp.com/-- is a fully integrated E&P company that owns: producing properties and acreage in the Appalachian Basin of the northeastern United States; 100% of the general partner and a 57% limited partner interest in Quest Energy Partners, L.P. ("QELP"), including subordinated units; and 85% of the general partner and 36.4% of the limited partner interests in the form of subordinated units in Quest Midstream Partners, L.P. ("QMLP"). The Company operates and controls QELP and QMLP through its ownership of their general partners. Quest Energy Partners, L.P. -- http://www.qelp.net/-- was formed by the Company to acquire, exploit and develop natural gas and oil properties and to acquire, own, and operate related assets. QELP owns more than 2,400 wells and is the largest producer of natural gas in the Cherokee Basin, which is located in southeast Kansas and northeast Oklahoma. QELP also owns natural gas and oil producing wells in the Appalachian Basin of the northeastern United States and in Seminole County, Oklahoma. Quest Midstream Partners, L.P. -- http://www.qmlp.net/-- was formed by the Company to acquire and develop transmission and gathering assets in the midstream natural gas and oil industry. QMLP owns more than 2,000 miles of natural gas gathering pipelines and over 1,100 miles of interstate natural gas transmission pipelines in Oklahoma, Kansas, and Missouri. RECTICEL NA: Aims to Confirm Full Payment Plan in April ------------------------------------------------------- Recticel North America Inc. and affiliate Recticel Interiors North America LLC filed a reorganization plan. All creditors are expected to recover 100% recovery on their claims pursuant to the plan. However, general unsecured creditors of Recticel N.A. and Recticel Interiors N.A. are still considered as impaired and will vote on the Plan because they would not receive any interest on their claims. Secured claims would receive "payment in full in cash, delivery of the respective secured creditor's collateral, or other treatment that renders the claim unimpaired," all priority and unsecured claims would be paid in full in cash, and intercompany loans and equity interests would be retained. As reported by the Troubled Company Reporter on November 3, 2009, Recticel NA and Recticel Interiors were unable to renegotiate supply contracts with Johnson Controls Inc. and Inteva Products LLC, Recticel Interiors' two largest customers. Combined, the two customers comprised roughly 80% of Recticel Interiors NA's sales (both are tier one suppliers to Mercedes-Benz) as of the company's petition date. The hearing for approval of the adequacy of the information in the Disclosure Statement is scheduled for March 10. Voting on the Plan will begin as soon as approval of the Disclosure Statement is obtained. Confirmation hearing is tentatively scheduled for April 4. According to netDockets, during the course of the bankruptcy cases, Recticel Interiors reached settlements with both Johnson Controls and Inteva Products and is now seeking approval of those settlement agreements and assumption of the pre-petition agreements at a February 24, 2010 hearing. netDockets also relates Recticel Interiors also reached a settlement with a third customer, Consolidated Metco, Inc., after seeking to reject its contract. All three settlements would serve to modify pricing terms with respect to the products sold by Recticel Interiors (with respect to ConMet, the primary economic change is "the offset by ConMet of the increased freight costs incurred by [Recticel Interiors] to ship parts from its Michigan plant to ConMet's facility in Bryson City, North Carolina"). About Recticel North America Brussels-based Recticel SA (NYSE Euronext: REC) --- http://www.recticel.com/-- makes and sells foam filling for automobiles. Two units of Recticel -- Recticel North America, Inc., and Recticel Interiors North America, LLC -- filed for Chapter 11 on Oct. 29, 2009 (Bankr. E.D. Mich. Case No. 09-73411). RINA makes and sell interior trim for cars in the United States and RUNA operates in the manufacture of Colo-fast light-stable polyurethane compounds, which are used by RINA. RINA and RUNA have 250 employees. Together, the Auburn Hills, Michigan-based companies reported revenue of $69.6 million in 2008 and $28.3 million for the first nine months of 2009. Combined assets are $13.9 million, with combined debt totaling $105.9 million. The case is In re Recticel North America Inc., 09-73411, U.S. Bankruptcy Court, Eastern District Michigan (Detroit). RECKSON OPERATING: S&P Gives Stable Outlook, Keeps 'BB+' Rating --------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Reckson Operating Partnership L.P. to stable from negative. In addition, S&P affirmed its 'BB+' corporate credit rating on the company. S&P also affirmed its '3' recovery rating on Reckson's rated senior unsecured notes, indicating that lenders can expect a meaningful (50%-70%) recovery in the event of a payment default. The maintenance of the recovery rating reflects the affirmation of S&P's 'BB+' credit rating on the company's senior unsecured notes. S&P's ratings on Reckson continue to reflect the credit quality of its parent, SL Green Realty Corp., which acquired Reckson in January 2007. "S&P's outlook revision acknowledges recent capital transactions executed by SL Green that S&P believes improved its financial profile," said credit analyst Elizabeth Campbell. "Additionally, while the company's credit line usage is high and exposes the company to rising interest rate risk, S&P acknowledge the natural hedge that SL Green's roughly $600 million variable-rate structured finance loan pool provides." S&P anticipates that the company will ultimately refinance its credit facility debt with more costly longer-term capital. However, further deleveraging, along with incremental revenue from accretive investments, should somewhat temper the potential erosion to debt coverages. S&P would lower the ratings if fixed- charge coverage measures dip below the 1.7x level contemplated in its scenario analysis, possibly due to weaker-than-expected occupancy and rent. Although S&P currently views an upgrade as less likely until New York City office market conditions materially improve, S&P would consider raising the rating if SL Green reduces its floating-rate debt, lowers its credit facility usage, and sustains fixed-charge coverage measures comfortably above 2.0x. RVL TEXAS: Files List of 20 Largest Unsecured Creditors ------------------------------------------------------- RVL Texas Properties, LLC, filed with the U.S. Bankruptcy Court for the Southern District of Texas a list of its 20 largest unsecured creditors. A full-text copy of the list of unsecured creditors is avaailable for free at: http://bankrupt.com/misc/RVLTexas_ListofInsecCreditors.pdf Addison, Texas-based RVL Texas Properties, LLC, filed for Chapter 11 bankruptcy protection on January 4, 2010 (Bankr. S.D. Texas Case No. 10-20009). Joyce Williams Lindauer, Esq., who has an office in Dallas, Texas, assists the Company in its restructuring effort. The Company listed $10,000,001 to $50,000,000 in assets and $1,000,001 to $10,000,000 in liabilities. RVL TEXAS: Files Schedules of Assets and Liabilities ---------------------------------------------------- RVL Texas Properties, LLC, 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 $9,730,000 B. Personal Property $1,000,000 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $3,700,073 E. Creditors Holding Unsecured Priority Claims $62,370 F. Creditors Holding Unsecured Non-priority Claims $129,622 ----------- ----------- TOTAL $10,730,000 $3,892,065 Addison, Texas-based RVL Texas Properties, LLC, filed for Chapter 11 bankruptcy protection on January 4, 2010 (Bankr. S.D. Texas Case No. 10-20009). Joyce Williams Lindauer, Esq., who has an office in Dallas, Texas, assists the Company in its restructuring effort. The Company listed $10,000,001 to $50,000,000 in assets and $1,000,001 to $10,000,000 in liabilities. RVL TEXAS: Section 341(a) Meeting Scheduled for February 18 ----------------------------------------------------------- The U.S. Trustee for Region 7 will convene a meeting of creditors in RVL Texas Properties, LLC's Chapter 11 case on February 18, 2010, at 9:00 a.m. The meeting will be held at Room 1107, 606 North Carancahua, Corpus Christi, 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. Addison, Texas-based RVL Texas Properties, LLC, filed for Chapter 11 bankruptcy protection on January 4, 2010 (Bankr. S.D. Texas Case No. 10-20009). Joyce Williams Lindauer, Esq., who has an office in Dallas, Texas, assists the Company in its restructuring effort. The Company listed $10,000,001 to $50,000,000 in assets and $1,000,001 to $10,000,000 in liabilities. SONRISA PROPERTIES: Files Schedules of Assets and Liabilities ------------------------------------------------------------- Sonrisa Properties, Ltd., 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 $21,000,000 B. Personal Property $518,818 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $8,201,229 E. Creditors Holding Unsecured Priority Claims $0 F. Creditors Holding Unsecured Non-priority Claims $118,610 ----------- ----------- TOTAL $21,518,818 $8,319,839 League City, Texas-based Sonrisa Properties, Ltd., filed for Chapter 11 bankruptcy protection on January 4, 2010 (Bankr. S.D. Texas Case No. 10-80012). Karen R. Emmott, Esq., who has an office in Houston, Texas, assists the Company in its restructuring effort. The Company listed $10,000,001 to $50,000,000 in assets and $1,000,001 to $10,000,000 in liabilities. SPA CHAKRA: Sets Hercules-Led Auction on February 24 ---------------------------------------------------- Bill Rochelle at Bloomberg News reports that Spa Chakra Inc. is holding an auction on Feb. 24 to learn if anyone will beat the offer from Hercules Technology Growth Capital Inc., which proposes to buy the business mostly in exchange for secured debt. Other bids are due Feb. 23. The hearing for approval of the sale will take place Feb. 25. Palo Alto, California-based Hercules is offering $8 million, mostly by exchanging a portion of the $13.8 million in secured debt it held when the Chapter 11 case began in December. Initially founded in 1998 in Australia, Spa Chakra has continued to expand both domestically and overseas. Uniquely positioned in the marketplace, Spa Chakra has developed an award winning network of 16 luxury spas worldwide. Spa Chakra represents leading high- end luxury cosmetic and spa brands and is recognized as one of the top spa operators in the world. The Company filed a balance sheet showing assets of $28.4 million and debt totaling $22.9 million. The largest liability is a $11.1 million loan from Hercules. Spa Chakra, Inc., said it is proceeding towards a sale of substantially all of its assets to Hercules Technology Growth Capital. As part of the process to successfully complete the sale, Spa Chakra has filed for protection under Chapter 11 of the U.S. Bankruptcy Code with the U.S. Bankruptcy Court for New York (Bankr. S.D.N.Y. Case No. 09-17260). SPANSION INC: Proposes to Settle Disputes With ASML --------------------------------------------------- ASM Lithography, Inc., and Advanced Micro Devices, Inc., were parties to that certain Business Agreement effective January 1, 2002, pursuant to which ASM agreed to, among other things, sell manufacturing equipment to AMD. Spansion LLC and ASML US, Inc. are successors-in-interest under the Business Agreement. The initial term of the Business Agreement was three years, but the term was later extended through December 31, 2008. The Business Agreement expired on December 31, 2008. Pursuant to the terms of the Business Agreement, on September 5, 2006, Spansion LLC issued purchase order no. 5100241124 to ASML for the purchase of a TWINSCAN XT: 1400F with all specified features, accessories, and details, a lithography tool designed for volume 200-mm and 300-mm wafer production at 65-nm resolution. Pursuant to the Purchase Order, the Twinscan was originally scheduled to be delivered to Spansion LLC on February 20, 2007. The purchase price for the Twinscan was EUR22,693,375. ASML and Spansion subsequently delayed delivery of the Twinscan, but a delivery date was never finalized and the Twinscan ultimately was not delivered. On May 14, 2009, ASML filed Claim No. 186 asserting a general unsecured prepetition claim for "at least $29,597,055, plus other accrued and accruing interest, default interest, late charges, taxes, attorneys' fees and costs, and other amounts due and owing pursuant to the Business Agreement." On June 26, 2009, each of the Debtors filed their schedules and statements of financial affairs. Spansion LLC scheduled ASML as holding an allowed general unsecured claim for $603,000 relating to maintenance and parts provided by ASML to the Debtors. The Scheduled Claim is not superseded by the Original Claim or the Amended Claim. The Debtors sent ASML a letter, on August 13, 2009, confirming the expiration of the Business Agreement and, out of an abundance of caution, filed a motion for an order pursuant to Section 365 of the Bankruptcy Code, authorizing the rejection of executory contract with ASML US, Inc. On September 1, 2009, the Court entered its order granting the Debtors' motion authorizing the rejection of executory contract with ASML US, Inc., nunc pro tunc to August 13, 2009. On September 4, 2009, the Debtors filed their Objection to Claim No. 186 filed by ASML US, Inc., by which the Debtors object to the portion of the Original Claim relating to the Twinscan and request that the Court disallow any claim for damages related to the Twinscan. In response, ASML had requested that the Court deny the Claim Objection and grant it an allowed claim. The ASML Response asserts that ASML is entitled to, among other things, payment of the Twinscan purchase price and all related damages. On November 2, 2009, ASML amended the Original Claim "to include rejection damages arising in connection with the ASML Contract." The Amended Claim asserts a general unsecured prepetition claim for "at least $41,530,122 plus other accrued and accruing interest, default interest, late charges, taxes, attorneys' fees and costs, and other amounts due and owing pursuant to the Agreement and damages and remedies available under law and equity." The License Agreement In addition, Spansion LLC and ASML Masktools are parties to that certain Technology License Agreement effective December 19, 2005, which grants to Spansion LLC and Spansion LLC's Qualified Affiliates a nonexclusive and nontransferable license to use certain patented technology and software, including "Scattering Bar" technology, in the manufacture of Spansion-branded products. The technology enables the Debtors to use a "scatter bar" as a subresolution assist feature to aid wherever there is a disruption in the patterns of constructive interfaces. The technology is useful in current 90 nm and 65 nm production flows, on future 45 nm NOR technology and is also being implemented in 43 nm NAND products. Because there is no cure amount associated with assumption of the License Agreement, the terms of the License Agreement continue until the patents that are the subject of the agreement expire, and the License Agreement contains no ongoing payment obligations, there are only benefits to the Debtors associated with the assumption of the License Agreement. The Debtors wish to assume the License Agreement pursuant to Section 365 of the Bankruptcy Code and believe that doing so will benefit the Debtors' estates while posing no prejudice whatsoever to creditors and other parties-in-interest. Settlement of The Twinscan Action The Twinscan Action is still in its early stages and the parties have not completed discovery or had an opportunity to prepare expert reports or to brief many of the matters at issue in the litigation. Notwithstanding the Debtors' belief in the strength of their defenses, and without expressing any opinion as to the relative strength of ASML's claims, the Debtors maintain that continued litigation of the Twinscan Action will be costly and time-consuming, and like all litigation, inherently risky. "Were the Debtors to continue the Twinscan Action, they would be required to continue to spend significant resources on discovery and trial preparation, motions for summary judgment, and a lengthy trial to the detriment of other business needs," says Michael R. Lastowski, Esq., at Duane Morris, LLP, in Wilmington, Delaware. "At the same time, the Twinscan Action would likely consume a significant amount of time and energy of the Debtors' management," he adds. In early December, the Parties entered into good faith negotiations to try to settle the Twinscan Action and provide for the assumption of the License Agreement, which required ASML Masktools' consent pursuant to Section 365(c) of the Bankruptcy Code. After much negotiation, the Parties agreed to the terms of the Stipulation. Under the Stipulation, the Debtors will grant ASML an allowed claim for $5,700,000 in settlement of the Amended Claim, and will allow the Scheduled Claim, which the Debtors do not dispute. In exchange, ASML will consent to the assumption of the License Agreement, dismiss the Twinscan Action with prejudice, and agree that there will be no additional claims by ASML against any of the Debtors in the Chapter 11 Cases. The stipulation also contains mutual releases against the parties to the Claims and the parties' affiliates, subsidiaries, shareholders, directors, officers, employees, agents, attorneys, and their heirs, personal representatives, successors and assigns, from any and all liability from any claims, defenses, demands, liabilities and obligations, damages, actions, causes of action, set-offs, recoupments, costs and expenses relating to the Purchase Order or the Twinscan. The Stipulation will (i) result in a $35 million reduction in the amount of the Amended Claim, (ii) ensure ASML's consent to assume the License Agreement, (iii) eliminate the risks inherent in litigation, (iv) permit the Debtors to focus their resources and energies on their business operations, and (v) eliminate the need for the Debtors to continue to spend significant sums to litigate the Twinscan Action. 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 Settlement Resolving Three Claims --------------------------------------------------- In separate motions, the Debtors ask the Court to approve their agreements with three creditors regarding the allowance of each of their claims: Agreed Claim Agreed Unsecured Creditor No. Admin. Claim Claim -------- ---- ------------ ---------- ORIX Commercial Finance, LLC 1034 $71,505 $529,530 ICON Capital Corp. 269 89,813 268,987 General Electric Capital Corp. 1047 532,312 12,351,269 In separate filings, the Debtors delivered to the Court executed copies of the stipulation resolving claims of the three creditors, full-texts copies of which is available for free at: http://bankrupt.com/misc/Spansion_1047Stip.pdf http://bankrupt.com/misc/Spansion_ICONsett.pdf http://bankrupt.com/misc/Spansion_OrixStip.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: Spansion Japan Opposes Panel Plea to Sue ------------------------------------------------------ The Official Committee of Unsecured Creditors in Spansion Inc.'s cases seeks the U.S. Bankruptcy Court's authority to commence and prosecute certain preference claims of the Debtors' estates against Spansion Japan Limited. The Committee relates that it has conducted a detailed investigation of certain intercompany transfers and determined that a significant portion of the transfers are avoidable as preferential transfers under Section 547 of the Bankruptcy Code. In response, Spansion Japan Limited asserts that the motion of the Official Committee of Unsecured Creditors is a transparent attack on the approval of, and attempted end around, the settlement among the Debtors and Spansion Japan. According to Spansion Japan, the Committee must satisfy three requirements in order to obtain derivative standing: (1) The Claims must be colorable and make sense from a cost- benefit standpoint; (2) The Debtors have abused their discretion in not bringing the claims or, in this case, in settling them; and (3) The grant of derivative standing is in the best interests of the Debtors' estates. According to Spansion Japan, the Committee's proposed cure of action is wasteful and seeks to derail months of hard fought negotiations between the Debtors and Spansion Japan on the compromise of a $415 million administrative expense that would prevent the Debtors from continuing their path to plan confirmation in February 2010, not to mention further complicate Spansion Japan's efforts to reorganize in its Japanese insolvency proceeding. In addition, Spansion Japan notes, the relief the Committee seeks is substantively and procedurally deficient. Published decisions in the district court have uniformly held that potential preferences cannot be used as a bar to an administrative expense under Section 503(b) of the Bankruptcy Code. Debtors & GE Also Object The Debtors assert that there is simply no justification for granting the relief sought by the Committee at this time. Contrary to the Committee's allegations, the Debtors maintain that they did in fact assert the alleged preferential transfers in defense of the administrative claims asserted by Spansion Japan. According to the Debtors, the purpose for which the Committee wishes to pursue an action at this time is antithetical to the settlement recently announced with Spansion Japan. The Debtors aver that the Committee's pursuit of preferential transfers at this time would ultimately destroy material value for the Debtors' estates achieved through that settlement. For its part, GE Japan Corporation, as Administrative Agent, Security Agent, and secured lender, contends that the Committee's Motion is the Committee's attempt to "blue pencil" out of the settlement between the Debtors and Spansion Japan the one provision that the Committee finds most objectionable -- the Debtors' $45 million payment to Spansion Japan in settlement of asserted administrative claims in excess of $415,000,000. According to GE Japan, the Committee may not use its Motion as an effort to wage a surgical attack on the Settlement for two reasons: (1) there are neither legal nor factual grounds for the Committee to usurp for itself the estate's potential preference actions against Spansion Japan; and (2) the Committee's Motion is an improper attempt to substitute the Committee's business judgment for that of the Debtors in entering into the Settlement Agreement and in determining when and how to assert potential estate claims. 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: Spansion Japan Settlement Approved by Court --------------------------------------------------------- Spansion Inc. obtained approval from the Bankruptcy Court of its settlement with 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. The Official Committee of Unsecured Creditors objected, asserting that that the Settlement waives valuable rights of the Debtors' estates without full disclosure, falls far outside the range of reasonableness and is grossly inequitable to the creditors of the Debtors' estates. GE Japan Corporation, as Administrative Agent, Security Agent, and secured lender, for itself and on behalf of members of a committee of secured creditors, tells the Court that while it anticipates being able to consent to the Settlement, this consent remains conditioned upon the occurrence of the conditions precedent to the effectiveness of the Settlement, including: (a) approval by the Tokyo District Court of the Term Sheet and GE Term Sheet; (b) the completion of the Definitive Agreements in final form acceptable to GE; and (c) entry of an order approving the Settlement Motion in a form acceptable to GE. In its order approving the Motion to Settle, Bankruptcy Judge Kevin Carey held, among other things, that: * The Debtors are directed, upon the occurrence of the effective date of the Second Amended Plan of Reorganization, to fund the purchase of and cause Spansion Nihon to take all actions necessary to consummate the acquisition of the Kawasaki Business consistent with the Term Sheet and the Definitive Agreements. * If the Debtors fail to enter into the Definitive Agreements or cause Spansion Nihon to consummate the purchase of the Kawasaki Business consistent with the terms in the Term Sheet, then there will be no settlement of Spansion Japan's Administrative Expense. * Subject to confirmation of a plan of reorganization by the Debtors, the Debtors will pay to Spansion Japan $45,000,000, payable 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. The Settlement Payment will be in consideration of, among other things, the settlement of Spansion Japan's Administrative Expense including as set forth in Spansion Japan's motion for entry of an order allowing certain claims as an administrative expense and directing payment. * All accounts payable and accounts receivable between Spansion Japan and Spansion LLC for any and all activities, including, but not limited to, foundry, distribution, and research and development, before October 27, 2009, will be considered settled as of October 27, 2009. * Spansion LLC, subject to confirmation of a plan of reorganization by the Debtors, will pay $5 million to Spansion Japan as consideration for the provision of certain technical information to the Debtors as provided in the Term Sheet. * Any amounts due between Spansion Japan and Spansion LLC for the period of October 27, 2009, through and including January 29,2010, are not resolved pursuant to the Order and will be resolved and netted in accordance with the various agreements between the parties and any net amount paid by the applicable party in accordance with the terms of the purchase orders governing the period. * With regard to the claims of Spansion LLC against Spansion Japan arising prior to February 9, 2009, Spansion LLC is authorized and directed to vote the claims in favor of Spansion Japan's plan of reorganization consistent with the Terms of the Order. * Notwithstanding anything to the contrary, (a) Spansion Japan will retain its rejection damage claims against Spansion LLC in respect of the rejection of the Second Amended Foundry Agreement or the rejection of any other executory contract or agreement between Spansion LLC and Spansion Japan; (b) Spansion LLC will retain all of its rights and defenses against the Rejection Damage Claims, including, but not limited to, (x) any liability that Spansion Japan may have to Spansion LLC under Chapter 5 of the Bankruptcy Code and (y) its right to argue that it is entitled to reduce the Rejection Damages Claims by up to $85 million on account of the Spansion LLC Prepetition Claims; and (c) Spansion Japan will retain all of its rights and defenses to oppose any ' claim or defense to the Rejection Damage Claims. * As of the first date that both (a) the Tokyo Court will have approved the GE Term Sheet and (b) either (i) the order confirming the Debtors' Plan becomes a Final Order or (ii) the Effective Date of the Plan will have occurred, GE will withdraw all claims and pending pleadings or papers in the Debtors' Chapter 11 cases. Rejection Damages The Debtors ask the U.S. Bankruptcy Court for the District of Delaware to lift the automatic stay to allow them to file and proceed with an adversary proceeding against Spansion Japan Limited to adjudicate any Chapter 5 causes of action against, and determine the exposure of, Spansion Japan solely for the purposes of offsetting or disallowing Spansion Japan's alleged rejection damages. On November 19, 2009, the Court entered its order granting the motion of the debtors authorizing the rejection of second amended and restated foundry agreement with Spansion Japan Limited. The Rejection Order required GE Japan Corporation and Spansion Japan to file any claim for rejection damages "on or before the first business day that is sixty calendar days after entry of" the Rejection Order. On January 15, 2010, Spansion Japan filed proof of claim number 1165 asserting damages of $761,238,570. 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) SPECTRUM BRANDS: Russell Hobbs Merger Cues Moody's Rating Review ---------------------------------------------------------------- Moody's Investors Service placed the ratings of Spectrum Brands on review for possible upgrade following its recent announcement that it had signed a definitive merger agreement with Russell Hobbs, Inc. "The review for possible upgrade reflects Moody's view that this transaction will likely enhance the credit profile of Spectrum Brands due to its increased size, broader product diversification and additional profitability without incurring more debt," said Kevin Cassidy, Senior Credit Officer at Moody's Investors Service. The review for upgrade also reflects Moody's view that Spectrum's financial leverage will decrease as the acquisition is expected to be financed with stock. Moody's review will focus on, 1) the long term strategy of the company as it increases its product diversification, 2) the expected operating and cost saving synergies, 3) the final financing of the transaction, which is expected to be with all stock and 4) the potential for an improved liquidity profile. These ratings are placed under review: * Corporate family rating at B3; * Probability of default rating at B3; * $1.3 billion senior secured term loan due June 2012 at B3 (LGD 3, 49%); * $218 senior subordinated notes due 2013 at Caa2 (LGD 6, 92%); and * The LGD assessments are not on review, but are subject to change. The last rating action was on October 6, 2009, when Moody's assigned a B3 CFR and PDR with a stable outlook. Headquartered in Atlanta, Georgia, Spectrum Brands, Inc., is a global consumer products company with a diverse product portfolio including consumer batteries, home and garden control products and electric shaving and grooming. Sales for the twelve months ended December 31, 2009 approximated $2.3 billion. Russell Hobbs, Inc., located in Miramar, Florida, markets and distributes a wide range of small kitchen and home appliances through mass merchandisers, specialty retailers and appliance distributors. Russell Hobb's brand portfolio includes Black & Decker(R), George Foreman(R), Russell Hobbs(R), Toastmaster(R), LitterMaid(R), and Farberware(R). The company distributes internationally with fifty percent of its sales outside the U.S. Net sales for the year ended June 30, 2009, were approximately $800 million. SUMMIT-BRANTLEY: Has $1.2 Million in Liabilities ------------------------------------------------ Nicholas Beadle at jacksonsun.com says Summit-Brantley Building Innovations has $811,000 in assets including $544,000 of machinery and $1.2 million in liabilities. The Company is facing $221,000 in secured claims, which $140,000 owed to Chuck Clark, $80,000 owed to First State Bank, and $1,000 owed to Tennessee Department of Labor and Workforce Development. Summit-Brantley Building Innovations makes wall and flooring. The company filed for Chapter 11 bankruptcy in January 2010. SYNUTRA INT'L: Reports $9.7-Million Net Loss for Q3 --------------------------------------------------- Synutra International, Inc., reported Tuesday financial results for the Company's third quarter and nine months ended December 31, 2009. For the third fiscal quarter, the Company reported a net loss attributable to common shareholders of $9.7 million, or $0.18 per fully diluted share, compared to a year-earlier net loss of $49.3 million, or $0.91 per fully diluted share. On a sequential basis, net loss attributable to common shareholders in the latest quarter decreased from $14.0 million, or $0.26 per fully diluted share, in the quarter ended September 30, 2009. Revenues for the third fiscal quarter ended December 31, 2009, reached $96.80 million, an increase of over 400% from $17.7 million in the year-ago third quarter. The increase is primarily due to the absence of the Company's U-Smart product series in the year-ago third quarter after the Chinese government found that eight lots of Synutra's U-Smart series of formula products along with certain products of 21 other manufacturers had been contaminated with melamine in September 2008. nbSince the product recall, the Company has been steadily regaining the lost market share from the incident through a series of strategic initiatives, including new marketing and sales programs, sales of its premium line of Super series infant formula products, which accounts for the majority of segment sales, and sales of surplus milk powder to industrial customers. On a sequential basis, revenues in the third quarter increased 48.2% from $65.3 million in the second quarter ended September 30, 2009. The increase was primarily due to continued gains in sales of Synutra's powdered formula products and sales of surplus milk powder to industrial customers. According to data released by the Ministry of Commerce's Commercial Information Center (CIC), the Company's market share has stabilized at approximately 7.0% for the fiscal quarter ended December 31, 2009, representing a significant increase from the 3.4% as reported in October 2008, the month immediately following the melamine contamination incident. The Company's powdered formula segment recorded a gross margin of $16.7 million, or 41.6% from net sales of $40.1 million, which was offset by a gross loss of $3.8 million on other sales of $56.5 million. Other sales of $56.5 million mainly included revenue from industrial surplus milk powder of $53.4 million for the fiscal quarter ended December 31, 2009. The Company's powdered formula segment reported a gross loss of $11.4 million for the same period in the previous year. The improvement in gross profit was primarily due to the recovery of sales after the melamine incident. The Company generated a gross profit of $12.6 million during the third fiscal quarter compared to a loss of $9.8 million in the year-ago quarter. Liang Zhang, Chairman and CEO of Synutra, commented, "The quarterly gains in revenues and market share are clear signs of the success of our recovery efforts. During the past quarter, we focused on streamlining management tools and systems to ensure efficiency and transparency. As a result, we have been able to optimize our inventory levels both on the production side and in the distribution channels. We also redeployed significant resources to support increased promotional activities to our consumers and beyond the distribution channels, by our field promoters in the communities and our nutrition education professionals at the medical and healthcare facilities. With the direct impact of the 2008 melamine incident behind us, sales of our industrial surplus milk powder abating as our inventory levels are restored to reasonable levels, and with the success of the comprehensive recovery effort and new sales initiatives, I have reason to believe that we will be on track for growth and profitability in the near future and we continue to strive to regain our leadership position in the market in the months ahead." Nine Months Results Revenues for the nine months ended December 31, 2009, decreased by 12.7% to $209.5 million from $239.8 million in year-ago period. The Company's gross profits for the nine month period ended December 31, 2009, increased by 46.2% to $44.5 million from $30.4 million for the same period in the previous year. For the nine month period, the Company reported a net loss of $33.7 million, or $0.62 per diluted share, compared to a net loss of $83.4 million, or $1.54 per diluted share, for the same period in the previous year. The decrease in the Company's nine-month revenues was a result of the lingering impact of the product recall carried out in late 2008 as well as a greater proportion of rebates to distributors and the additional product discounts provided to distributors beginning August 2009 as compensation for certain product promotion activities that were previously handled by the Company. Cash Flows As of Dec. 31, 2009, Synutra held $56.5 million in cash and equivalents, as compared to $37.7 million at March 31, 2009, and $55.7 million at December 31, 2008. Net cash used in operating activities was $29.2 million for the nine months ended December 31, 2009, as compared to net cash used in operating activities of $66.6 million for the same period in the previous year. Net cash used in operating activities for the nine months ended December 31, 2009, was mainly due to net loss of $33.9 million, non-cash items not affecting cash flows of $12.9 million and a $8.2 million increase in working capital. The changes in working capital for the nine months ended December 31, 2009, were primarily related to $50.3 million decrease in inventories due to sales of surplus industrial milk powder, and $54.6 million decrease in accounts payable due to the settlement of certain accumulated extended liabilities. In the nine months ended December 31, 2009, the Company spent $184.0 million in purchasing raw materials and other production materials, $28.2 million in staff compensation and social welfare, $17.6 million in other taxes, $69.7 million in selling and distribution, advertising and promotion, and general and administrative expenses, and received $279.4 million from our customers. Net cash provided by investing activities was $31.5 million for the nine months ended December 31, 2009, as compared to net cash used in investing activities of $76.9 million for the same period in the previous year. Cash invested in purchases of property, plant and equipment was $8.2 million and $38.4 million for the nine months ended December 31, 2009, and 2008, respectively. Restricted cash decreased by $21.0 million for the nine months ended December 31, 2009, due to the release of cash deposit pledged for certain short-term loans which were repaid during the period, as compared to an increase of $30.9 million for the same period in the previous year. Restricted cash represents cash deposited with banks as security against the issuance of bank notes, letters of credit for the import of raw materials and as pledges for certain short-term borrowings. Proceeds from assets disposal were $20.2 million and represent the first and second installments of consideration paid by Wondersun to acquire Baoquanling and Cow Breeding's assets. Net cash provided by financing activities was $16.4 million for the nine months ended December 31, 2009, as compared to $100.0 million for the same period in the previous year. Cash provided by financing activities during the nine months ended December 31, 2009, was primarily related to $313.4 million short-term loans from domestic banks in China and related parties, $17.6 million long-term loans from domestic banks in China, offset by $314.5 million repayment of short-term loans to domestic banks in China. Debt As of December 31, 2009, the Company had short-term loans outstanding of $224.0 million. As of February 9, 2010, all outstanding short-term loans from lacal banks that have become due have been repaid. The weighted average interest rate on short- term loans from PRC banks outstanding at December 31, 2009, was 3.7% and 4.1%. As of December 31, 2009, the Company had long-term loans which are unsecured debt, from PRC banks in the amount of $26.4 million. The maturity dates of the long-term loans are from March 2011 to June 2012. The weighted average interest rate of outstanding long-term loans was 5.2%. Balance Sheet At December 31, 2009, the Company had total assets of $398.3 million, total liabilities of $354.5 million, and total stockholders' equity of $43.8 million. The Company's consolidated balance sheets at December 31, 2009, also showed strained liquidity with $250.5 million in total current assets available to pay $316.6 million in total current liabilities. A full-text copy of the Company's quarterly report on Form 10-Q is available for free at http://researcharchives.com/t/s?5247 Going Concern Doubt Following the government announcement in mid September 2008 that formula products of the Company and 21 other manufacturers had been contaminated with melamine, the Company conducted a compulsory recall of certain lots of U-Smart products and a voluntary recall of all other products produced before September 16, 2008, at the same facilities, where the Company believed the contaminated milk supplies originated. As a direct result of the incident, the Company has experienced significant operating losses and negative cash flows from operations for the fiscal year ended March 31, 2009, and the nine months ended December 31, 2009, and, as of December 31, 2009, had a working capital deficit of approximately $66.2 million caused primarily by the subsequent loss of sales following the product recall. "The occurrence of these economic events, the ensuing operating losses and the negative cash flows raise substantial doubt as to the Company's ability to continue as a going concern." About Synutra International Rockville, Md.-based Synutra International Inc. (Nasdaq: SYUT) -- http://www.synutra.com/-- is a US incorporated infant formula company in China. It principally produces, markets and sells its products under the "Shengyuan," or "Synutra," name, together with other complementary brands. It focuses on selling premium infant formula products, which are supplemented by more affordable infant formulas targeting the mass market as well as other nutritional products and ingredients. It sells its products through an extensive, nationwide sales and distribution network covering 30 provinces and provincial-level municipalities in China. As of December 31, 2009, this network comprised over 540 distributors and over 1000 sub-distributors who sell Synutra products in over 67,000 retail outlets. TEKOIL & GAS: Files Amended Disclosure Statement & Plan ------------------------------------------------------- Tekoil & Gas Corporation and Tekoil and Gas Gulf Coast, LLC filed with the U.S. Bankruptcy Court for the Southern District of Texas an amended Disclosure Statement in relation to their amended Plan of Reorganization. According to the amended Disclosure Statement, the Plan holders of Class 6A - General Unsecured Claims against Tekoil($42,048,876) and Class 6B - General Unsecured Claims against Gulf Coast ($33,824,809) will receive from the Creditor Trust in full satisfaction, release and discharge of and in exchange for the Claim, a Pro Rata share of the distributions available for Class 6 Creditors from the Creditor Trust. As reported in the Troubled Company Reporter on December 8, 2009, the General Unsecured Claims against Gulf Coast amounted to $33,851,979. A full-text copy of the Disclosure Statement is available for free at http://bankrupt.com/misc/TekOil&Gas_AmendedDS.pdf A full-text copy of the Plan of Reorganization is available for free at http://bankrupt.com/misc/TekOIl&Gas_AmendedPlan.pdf Based in Houston, Tekoil & Gas Corporation and its subsidiaries -- http://www.tekoil.com/-- own interests in four oil and gas properties, including the Trinity Bay, Redfish Reef, Fishers Reef, and North Point Bolivar fields located in Galveston Bay, Texas. The company was incorporated in Florida in 2004. Edward L. Rothberg, Esq., at Weycer Kaplan Pulaski & Zuber, Nancy Lee Ribaudo, Esq., and Patrick J. Neligan, Jr., Esq., at Neligan Foley LLP, represent the Debtors as counsel. David Ronald Jones, Esq., John F. Higgins, Esq., and Joshua Nielson Eppich, Esq., at Porter & Hedges, LLP, represent the Official Committee of Unsecured Creditors of Tekoil & Gas Corp. as counsel. When Tekoil & Gas Corp. filed for protection from its creditors, it listed assets of $10 million to $50 million, and liabilities of $10 million to $50 million. Based in Spring, Texas, Tekoil and Gas Gulf Coast, LLC is an acquisition subsidiary of Tekoil & Gas Corp. Tekoil & Gas Corporation filed for Chapter 11 protection on June 10, 2008 (Bankr. S.D. Tex. Case No. 08-80270). Tekoil and Gas Gulf Coast filed a separate petition for Chapter 11 relief on Aug. 29, 2008 (Bankr. S.D. Tex. Case No. 08-80405). Nancy Lee Ribaudo, Esq., and Patrick J. Neligan, Jr. at Neligan Foley LLP, represent Tekoil and Gas Gulf Coast as counsel. On October 1, 2008, the Court ordered the joint administration of the Debtors' bankruptcy cases. THREE-FIVE SYSTEMS: February 9 Distributions Delayed ---------------------------------------------------- Three-Five Systems, Inc. disclosed that the final liquidating distribution to certain of its stockholders that was scheduled to occur February 9, 2010 has been delayed in order to allow the Depository Trust Company additional time it requires to prepare for the final payment. While final confirmation from DTC has not yet been received, the Company anticipates the distribution to be concluded by February 19, 2010. The distribution will be made in accordance with the terms of the Amended Joint Plan of Reorganization the Company that was confirmed by the United States Bankruptcy Court on August 30, 2006. The Company announced the final liquidating distribution on December 29, 2009. Except for the payment date, there have been no changes in the terms or conditions associated with the distribution, including the amount payable to stockholders. About Three-Five Systems The Company previously conducted the business of providing specialized electronics manufacturing services to original equipment manufacturers (OEMs). The Company has ceased conducting business operations. Its only activities consist of liquidating its assets and preparing for dissolution pursuant to the Plan. "Three-Five Systems" and "TFS-DI" are trademarks of the Company. All other trademarks used herein are the property of their respective owners. TIMOTHY SCHWARTZ: Files Schedules of Assets and Liabilities ----------------------------------------------------------- Timothy L. Schwartz filed with the U.S. Bankruptcy Court for the Northern District of Illinois its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $880,000 B. Personal Property $28,829,122 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $31,318,504 E. Creditors Holding Unsecured Priority Claims $195,000 F. Creditors Holding Unsecured Non-priority Claims $774,098 ----------- ----------- TOTAL $29,709,122 $32,287,602 Algonquin, Illinois-based Timothy L. Schwartz filed for Chapter 11 bankruptcy protection on January 4, 2010 (Bankr. N.D. Ill. Case No. 10-70004). Mr. Scwartz's affiliates, Boulevard Shoppes, LLC; Naples Sunshine, LLC; and Oakridge Development Co., also filed separate bankruptcy petitions last year. James E. Stevens, Esq., at Barrick, Switzer, Long, Balsley & Van Ev, assists Mr. Scwartz in his restructuring effort. Mr. Schwartz listed $10,000,001 to $50,000,000 in assets and $10,000,001 to $50,000,000 in liabilities. TLC VISION: Wants to Obtain $25MM Junior Secured Financing ---------------------------------------------------------- TLC Vision (USA) Corp., et al., ask the U.S. Bankruptcy Court for the District of Delaware for authority to: -- obtain $10 million, in the interim, and $25 million, in the final basis, of postpetition secured financing, junior in priority to the prepetition secured claims and to the adequate protection claims and liens granted to the prepetition lenders, and with administrative priority pursuant to that certain junior secured superpriority debtor-in-possession credit agreement dated as of February 3, 2010, with Charlesbank Equity Fund VII, Limited Partnership, as collateral and administrative agent, for the DIP lenders; -- use cash collateral of prepetition lenders; and -- grant adequate protection to Wells Fargo Bank, N.A., as collateral and administrative agent for the prepetition lenders; and grant the DIP secured parties liens and superpriority claims. The Debtors need the money to pay their current and ongoing operating expenses. As of the petition date, the Debtors were indebted under the prepetition credit documents in an amount of $107 million. The material terms of the DIP Credit Agreement are: Commitment: A multiple draw junior term loan facility in an amount not to exceed $25 million. Borrowing availability: Initial advance: $10 million Subsequent draws: $1 to 15 million Term: The DIP facility will mature on the earliest of: (i) 35 days after the date of the entry of the interim order, or (ii) May 20, 2010, unless extended, or (iii) the occurrence of a termination event. Fees: (a) an exit fee equal to 4% of the maximum pricipal amount of the DIP facility, fully earned and payable on the maturity date; and (b) a commitment fee equal to 2% of the maximum principal amount of the DIP facility, fully earned and payable on the closing date. Interest Rate: A rate per annum equal to 1 month LIBOR Rate plus 10% due and payable in cash arrears, on (a) the last day of each month and (b) the maturity date. Default Interest Rate: The rate otherwise in effect plus 2%. Event of Default: Customary The Debtors will use the cash collateral to provide additional necessary capital with with to operate their business, pay employees, maximize value and pursue sale process. The prepetition lenders consented to the Debtors' use of cash collateral. As adequate protection for any diminution in value of the lenders' collateral, the Debtors will continue to grant the prepetition lenders additional and replacement security interest and liens in the collateral. The prepetition replacement liens will have the same priority as the liens securing the prepetition obligations, and DIP facility, and junior to the carve out. In addition allowed superpriority administrative claim will be granted to the prepetition lenders. About TLCVision TLCVision -- http://www.tlcvision.com/-- is North America's premier eye care services company, providing eye doctors with the tools and technologies needed to deliver high-quality patient care. Through its centers' management, technology access service models, extensive optometric relationships, direct to consumer advertising and managed care contracting strength, TLCVision maintains leading positions in Refractive, Cataract and Eye Care markets. TLC Vision (USA) Corporation, and two of its corporate affiliates filed petitions for Chapter 11 on Dec. 21, 2009 (Bankr. D. Del. Case No. 09-14473). The petition says assets and debts are $100 million to $500 million. The Company's lead U.S. restructuring counsel is the law firm of Proskauer Rose LLP and Canadian restructuring counsel is the law firm of Torys LLP. The Company's financial advisor is Conway Del Genio Gries & Co., LLC. Epiq Bankruptcy Solutions is claims and notice agent. TRAVELPORT LLC: Shelves Discounted Offer for Floating Rate Notes ---------------------------------------------------------------- Travelport LLC has terminated its previously announced cash tender offer for: -- its Senior Euro Floating Rate Notes due 2014; -- its Senior Dollar Floating Rate Notes due 2014; -- its 10-7/8% Senior Subordinated Euro Notes due 2016; and -- its 9-7/8% Senior Dollar Notes due 2014. Any Notes that have been tendered will be promptly returned to holders. The tender offer was made pursuant to the Offer to Purchase and the related Letter of Transmittal, dated January 20, 2010, as amended. The Company terminated the tender offer because it has determined the IPO Condition -- as defined in the Offer to Purchase -- will not be satisfied. On February 10, 2010, Travelport announced that at this time, following a review of market conditions, it has decided against proceeding with an initial public offering of shares and listing on the London Stock Exchange. The Company's cash tender offer with respect to its 11-7/8% Senior Subordinated Dollar Notes due 2016 was previously terminated on February 3, 2010. The discounted tender offer was reported by the Troubled Company Reporter on January 21, 2010. According to the report, Travelport commenced a cash tender offer for an aggregate principal amount of various notes, such that the maximum aggregate consideration for the Notes to be purchased in the tender offer, excluding accrued and unpaid interest, would be $350,000,000: * its Senior Euro Floating Rate Notes due 2014; * its Senior Dollar Floating Rate Notes due 2014; * its 10-7/8% Senior Subordinated Euro Notes due 2016; * its 9-7/8% Senior Dollar Notes due 2014; and * its 11 7/8% Senior Subordinated Dollar Notes due 2016. The terms and conditions of the tender offer are: Aggregate Principal Late Tender Early Total Title of Amount Offer Tender Tender Offer Security Outstanding Consideration Premium Consideration -------- ----------- ------------- ------- -------- ----- Sr Euro Floating Rate Notes due 2014 EUR171,600,000 EUR965 EUR20 EUR985 Sr. Dollar Floating Rate Notes due 2014 $144,000,000 $965 $20 $985 10-7/8% Senior Subordinated Euro Notes due 2016 EUR141,800,000 EUR1,050 EUR20 EUR1,070 9-7/8% Sr. Dollar Notes due 2014 $443,000,000 $1,055 $20 $1,075 11-7/8% Senior Subordinated Dollar Notes due 2016 $247,300,000 $1,080 $20 $1,100 About Travelport Travelport Limited -- http://www.travelport.com/-- the indirect parent company of Travelport LLC, and guarantor on an unsecured basis of the Notes, provides critical transaction processing solutions, offering broad based business services to companies operating in the global travel industry. Travelport Limited is comprised of the global distribution system business that includes the Worldspan and Galileo brands; GTA, a global, multi-channel provider of hotel and ground services; Airline IT Solutions, which hosts mission critical applications and provides business and data analysis solutions for major airlines. With 2008 revenues of $2.5 billion, Travelport Limited operates in 160 countries and has approximately 5,300 employees. Travelport Limited also owns approximately 48% of Orbitz Worldwide (OWW), a global online travel company. Travelport Limited is a private company owned by affiliates of The Blackstone Group, One Equity Partners, Technology Crossover Ventures and Travelport management. * * * As reported by the Troubled Company Reporter on January 21, 2010, Moody's Investors Service placed Travelport's B2 Corporate Family Rating, and all debt instrument ratings, under review for possible upgrade. The TCR also said Standard & Poor's Ratings Services placed its 'B-' long-term corporate credit ratings on Travelport and its indirect parent Travelport Holdings Ltd., on CreditWatch with positive implications. S&P also placed all the debt ratings on CreditWatch with positive implications. TRIBUNE CO: Aurelius Contests Sealing of Creditors' Suit -------------------------------------------------------- Law360 reports that Aurelius Capital Management LP is attacking an attempt by Tribune Co.'s unsecured creditors committee to keep under wraps its complaint against various banks over their role in a 2007 leveraged buyout that left the news giant stuck with more than $10 billion in debt. Headquartered in Chicago, Illinois, Tribune Co. -- http://www.tribune.com/-- is a media company, operating businesses in publishing, interactive and broadcasting, including ten daily newspapers and commuter tabloids, 23 television stations, WGN America, WGN-AM and the Chicago Cubs baseball team. The Company and 110 of its affiliates filed for Chapter 11 protection on Dec. 8, 2008 (Bankr. D. Del. Lead Case No. 08- 13141). The Debtors proposed Sidley Austion LLP as their counsel; Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel; Lazard Ltd. and Alvarez & Marsal North Americal LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims agent. As of Dec. 8, 2008, the Debtors have $7,604,195,000 in total assets and $12,972,541,148 in total debts. Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Tribune Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TRUMP ENTERTAINMENT: February 19 Set as Plan Objection Deadline --------------------------------------------------------------- The U.S. Bankruptcy Court for the District of New Jersey has established 2:00 p.m. (prevailing Eastern Time) on February 19, 2010, as the deadline to file objections to confirmation of the Plans proposed by Trump Entertainment Resorts, Inc., et al., and the Ad Hoc Committee of Holders of 8.5% Senior Secured Notes; and Beal Bank and Icahn Partners. A hearing to consider confirmation of the Plans is scheduled for February 23, 2010, at 9:00 a.m. (prevailing Eastern Time.) 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. VALENCE TECHNOLOGY: Dec. 31 Balance Sheet Upside-Down by $76MM -------------------------------------------------------------- Valence Technology Inc. reported financial results for its fiscal 2010 third quarter and nine months ended Dec. 31, 2009 and commented on business developments. The Company reported $23.42 million in total assets, $29.14 million total liabilities, $26.65 million long-term interest payable to stockholder, $34.85 million long-term debt to stockholder net of debt discount and $136,000 other long-term liabilities resulting to a $75.97 million stockholders' deficit, as of Dec. 31, 2009. The Company incurred $5.58 million net loss on $4.11 million total revenue for the three months ended Dec. 31, 2009, compared with $5.15 million net loss on $4.68 million in total revenues for the same period a year ago. "We had a very active third quarter as we signed supply agreements with Tennant Company and EVI, received new orders from Smith Electric U.S., expanded our efforts in the Marine markets, and saw additional government incentives granted in the U.K. which will benefit our customers," said Robert L. Kanode, president and CEO of Valence Technology, Inc. "The industry opportunities are expanding beyond the motive markets and we look forward to becoming a preferred supplier for various types of applications over time. We will continue to pursue the best opportunities to grow our business." Nine month revenues declined compared to the same period last year primarily due to a reduction in sales to Smith Electric Vehicles U.K, a division of The Tanfield Group and to Segway Inc. Gross margin increased to 13% mainly due to a shift in sales to higher gross margin products. Also, the nine-month period ended Dec. 31, 2008, included inventory adjustments, which increased cost of sales and reduced gross margin by $2.2 million related to the discontinuance of the N-Charge product line. There were no N-Charge related charges to cost of sales in the fiscal nine month 2010 period. Operating expenses increased by $1.7 million due to increased litigation costs and additional stock based compensation expense. A full-text copy of the company's financial results is available for free at http://ResearchArchives.com/t/s?51fa Going Concern Doubt The Company has incurred operating losses each year since its inception in 1989 and had an accumulated deficit of $570.1 million as of September 30, 2009. For the three and six month periods ended September 30, 2009, the Company sustained net losses available to common stockholders of $6.2 and $12.4 million, respectively. For the three and six month periods ended September 30, 2008, the Company sustained net losses available to common stockholders of $6.2 and $11.8 million, respectively. The Company believes these factors, among others, raise substantial doubt about its ability to continue as a going concern. About Valence Technology Based in Austin, Texas, Valence Technology, Inc. (NASDAQ: VLNC) -- http://www.valence.com/-- develops, manufactures and sells high- energy power systems utilizing its proprietary phosphate=based lithium-ion technology for diverse applications, with special emphasis on portable appliances and future generations of hybird and electric vehicles. VALASSIS COMMS: To Hold Investor Conference Call Today ------------------------------------------------------ Valassis will hold an investor conference call on Friday, Feb. 12, 2010 at 11 a.m. (ET) to discuss the recent News America Marketing lawsuit settlement. The call-in number is (877) 941-8610 (please reference conference #4226910). The call will be simulcast on our Web site at http://www.valassis.comand a telephonic replay of the call will be available through Feb. 22 at (800) 406-7325, pass code 4226910. The webcast will be archived on our Web site under "Investor." About Valassis Valassis is one of the nation's leading media and marketing services companies, offering unparalleled reach and scale to more than 15,000 advertisers. Its RedPlum media portfolio delivers value on a weekly basis to over 100 million shoppers across a multi-media platform - in-home, in-store and in-motion. Through its interactive offering - redplum.com - consumers will find compelling national and local deals online. Headquartered in Livonia, Michigan with approximately 7,000 associates in 28 states and eight countries, Valassis is widely recognized for its associate and corporate citizenship programs, including its America's Looking for Its Missing Children(R) program. Valassis companies include Valassis Direct Mail, Inc., Valassis Canada, Promotion Watch, Valassis Relationship Marketing Systems, LLC and NCH Marketing Services, Inc. As reported by the TCR on Feb. 3, 2010, Standard & Poor's Ratings Services placed its 'B+' corporate credit rating for Livonia, Michigan-based Valassis Communications Inc., along with all associated issue-level ratings, on CreditWatch with positive implications. VAN HUNTER: Files Schedules of Assets and Liabilities ----------------------------------------------------- Van Hunter Development, Ltd, filed with the U.S. Bankruptcy Court for the Eastern District of Texas its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $16,355,000 B. Personal Property $23,784 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $15,121,735 E. Creditors Holding Unsecured Priority Claims $71,434 F. Creditors Holding Unsecured Non-priority Claims $101,198 ----------- ----------- TOTAL $16,378,784 $15,294,367 Dallas, Texas-based Van Hunter Development, Ltd, filed for Chapter 11 bankruptcy protection on January 4, 2010 (Bankr. E.D. Texas Case No. 10-40052). Larry A. Levick, Esq., at Singer & Levick, P.C., 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. VAUGHAN FOODDS: Won't Appeal NASDAQ Notice of Bid Price Deficiency ------------------------------------------------------------------ As previously reported, on September 15, 2009, Vaughan Foods, Inc. received notice from the NASDAQ Listing Qualifications Department that its common stock has failed to maintain a minimum bid price of US$1.00 per share over a period of 30 consecutive trading days, as required by NASDAQ Listing Rule 5550(a)(2). In accordance with Listing Rule 5810(c)(3)(A), the Company has been provided with a grace period of 180 calendar days, or until March 15, 2010, to regain compliance with this requirement. To regain compliance, the Company's common stock must achieve a closing bid price of at least US$1.00 for a minimum of ten consecutive trading days. Management does not expect that its common stock will achieve the required threshold for continued listing by March 15, 2010 and, accordingly, management does not intend to appeal NASDAQ's expected action to delist the Company's stock since it believes its efforts are better directed towards improving the Company's performance and executing its business plan. Accordingly, management has initiated contact with NASDAQ to effect an orderly transition of trading to the OTC Bulletin Board prior to the de- listing event. About Vaughan Foods Vaughan Foods is an integrated manufacturer and distributor of value-added, refrigerated foods. VITESSE SEMICONDUCTOR: Inks Resignation and Separation Agreement ---------------------------------------------------------------- Michael B. Green, vice president, general counsel and secretary of Vitesse Semiconductor Corporation, entered into a Resignation and Separation Agreement and General Release of Claims with the company. Under the terms of the Resignation Agreement the Company agreed to pay Mr. Green * six months and three weeks of severance pay in the amount of $122,692; * an additional $15,000; and * full COBRA premiums for Mr. Green and his eligible dependents for up to twelve months for coverage under the same benefit option in which he and his eligible dependents were enrolled as of the day before his termination date and Mr. Green agreed to: -- cooperate with and assist the Company with respect to any pending or future litigation, disputed claims or other matters, including without limitation, by truthfully testifying, as may be reasonably requested from time to time by the Company; and -- release all claim against the Company, including all claims with respect to stock options and restricted stock options previously granted to him. The Resignation Agreement contains other standard terms and conditions, including a seven-day period in which Mr. Green has the right to revoke the Resignation Agreement. About Vitesse Semiconductor Based in Camarillo, California, Vitesse Semiconductor Corporation (Pink Sheets: VTSS.PK) -- http://www.vitesse.com/-- designs, develops and markets a diverse portfolio of high-performance, cost-competitive semiconductor solutions for Carrier and Enterprise networks worldwide. Engineering excellence and dedicated customer service distinguish Vitesse as an industry leader in Gigabit Ethernet, Ethernet-over-SONET, Optical Transport, and other applications. Vitesse had total assets of $107,636,000 against total debts of $160,101,000 as of June 30, 2009. Vitesse entered into debt restructuring agreements in October 2009 with its major creditors, which allow the Company to satisfy its creditors by converting most of its debt into new common stock, preferred stock and new convertible debentures. Vitesse is seeking stockholder approval to increase the number of authorized shares of the Company's common stock from 500,000,000 to 5,000,000,000 in conjunction with the debt restructuring agreements. The Company has warned if stockholders do not approve the proposal to authorize the Company to issue more shares by February 15, 2010, it will face a 1.0% per month interest charge on the New Debentures (at a cost of about $500,000 per month) beginning on February 16, 2010 and continuing until the increase in the authorized shares is approved. In addition, the holders of the New Debentures will have the right to demand repayment of the principal amount of the debt, plus potentially certain make-whole interest payments representing interest that would have been earned if the bonds had not been converted early. The Company could potentially be forced to file for protection from creditors under Chapter 11 of the U.S. Bankruptcy Code. VITESSE SEMICONDUCTOR: Losses Shrink to $33.86MM in 4th Quarter --------------------------------------------------------------- Vitesse Semiconductor Corporation reported $87.63 million in total assets and $130.12 million in total liabilities resulting to a $43.6 million stockholders' deficit, as of Dec. 31, 2009. The Company incurred $33.86 million net loss on $41.65 million of revenues for the three months ended Dec. 31, 2009, compared with a $189.95 million net loss on $49.81 million of revenues for the same period a year earlier. In the three months ended Dec. 31, 2008, the company's operating activities provided $5.7 million in cash. The company's net loss of $190.0 million for the three months ended Dec. 31, 2008, included non-cash charges of $1.1 million of depreciation, $0.8 million of stock-based compensation, and $191.4 million of goodwill impairment offset by the gain on the sale of the Colorado building for $2.9 million. Accounts receivable, net of allowance for sales return, increased $1.5 million from $11.4 million at September 30, 2009, to $12.8 million at December 31, 2009. The increase is primarily due to higher sales from new direct customers, the company related. Inventories increased $0.6 million from $18.8 million at September 30, 2009, to $19.4 million at December 31, 2009, as the company's channel partners and distributors took action to reduce their inventory in response to weaker demand. The Company was able to respond quickly to the change in demand, reducing orders to its suppliers. As a result of the increase in inventory, accounts payable slightly increased from $14.2 million to $14.4 million due to more orders placed with of its top suppliers. A full-text copy of the Company's quarterly report on Form 10-Q is available for free at http://ResearchArchives.com/t/s?5222 About Vitesse Semiconductor Based in Camarillo, California, Vitesse Semiconductor Corporation (Pink Sheets: VTSS.PK) -- http://www.vitesse.com/-- designs, develops and markets a diverse portfolio of high-performance, cost-competitive semiconductor solutions for Carrier and Enterprise networks worldwide. Engineering excellence and dedicated customer service distinguish Vitesse as an industry leader in Gigabit Ethernet, Ethernet-over-SONET, Optical Transport, and other applications. Vitesse had total assets of $107,636,000 against total debts of $160,101,000 as of June 30, 2009. Vitesse entered into debt restructuring agreements in October 2009 with its major creditors, which allow the Company to satisfy its creditors by converting most of its debt into new common stock, preferred stock and new convertible debentures. Vitesse is seeking stockholder approval to increase the number of authorized shares of the Company's common stock from 500,000,000 to 5,000,000,000 in conjunction with the debt restructuring agreements. The Company has warned if stockholders do not approve the proposal to authorize the Company to issue more shares by February 15, 2010, it will face a 1.0% per month interest charge on the New Debentures (at a cost of about $500,000 per month) beginning on February 16, 2010 and continuing until the increase in the authorized shares is approved. In addition, the holders of the New Debentures will have the right to demand repayment of the principal amount of the debt, plus potentially certain make-whole interest payments representing interest that would have been earned if the bonds had not been converted early. The Company could potentially be forced to file for protection from creditors under Chapter 11 of the U.S. Bankruptcy Code. WALTER DIAL: Files Schedules of Assets and Liabilities ------------------------------------------------------ Walter David Dial, III, and Lorina Jewelene Dial filed with the U.S. Bankruptcy Court for the Western District of Arkansas a summary of their schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $7,600,000 B. Personal Property $2,285,236 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $4,541,278 E. Creditors Holding Unsecured Priority Claims $0 F. Creditors Holding Unsecured Non-priority Claims $1,824,176 ----------- ----------- TOTAL $9,885,236 $6,365,454 Rogers, Arkansas-based Walter David Dial, III, and Lorina Jewelene Dial filed for Chapter 11 bankruptcy protection on January 4, 2010 (Bankr. W.D. Ark. Case No. 10-70009). David G. Nixon, Esq., at the Nixon Law Firm, assists the Company in its restructuring effort. The Company listed $10,000,001 to $50,000,000 in assets and $1,000,001 to $10,000,000 in liabilities. WHITEMARK HOMES: Retains New Auditors ------------------------------------- Whitemark Homes, Inc. is retaining new auditors. This will allow the Company to complete the audit for the fiscal 2008 and 2009 years end and once again become current in its filings to the SEC. In the January 29, the company announced that it has signed a letter of intent to acquire Ribbon Naturals Corp., a dynamic early stage nutraceutical company located in Tampa Bay, Florida. WINN-DIXIE: To Distribute Shares Currently Held in Reserve ---------------------------------------------------------- Winn-Dixie Stores, Inc. expects to distribute approximately 6.5 million shares, which are currently held in reserve to settle outstanding unsecured pre-petition bankruptcy claims. The distribution is based on the Company's determination that its bankruptcy share reserve contains more shares than will be necessary to resolve the remaining unsecured pre-petition claims against the Company. The Company will not receive any proceeds from this distribution and there will be no impact on the Company's financial statements. Because the shares to be distributed have been included in the Company's shares outstanding for purposes of calculating earnings per share (EPS) since emergence from Chapter 11, the distribution will not impact the Company's reported EPS. Winn-Dixie emerged from Chapter 11 protection on November 21, 2006 under a Plan of Reorganization (POR) that provided, among other things, for a total of 10.3 million of the Company's shares to be held in reserve to satisfy remaining unsecured pre-petition claims. Under the POR, once the Company determines that it has excess shares held in reserve, it must distribute them on a pro- rata basis to bankruptcy claimants with allowed claims, based on the number of shares they received pursuant to the POR. The 6.5 million shares would be distributed to persons previously holding allowed claims, such as noteholders, landlords, vendors or suppliers, retirement plan participants and other unsecured creditors. The distribution is expected to be made in the fourth quarter of fiscal 2010, which is the period from April 1, 2010 to June 30, 2010. The exact timing and number of shares to be distributed will be subject to final calculation by the Company and bankruptcy court approval. About Winn-Dixie Winn-Dixie Stores, Inc., is one of the nation's largest food retailers. Founded in 1925, the Company is headquartered in Jacksonville, FL. The Company currently operates 515 retail grocery locations, including more than 400 in-store pharmacies, in Florida, Alabama, Louisiana, Georgia, and Mississippi. WOLVERINE TUBE: Stockholders Reelect Board Members -------------------------------------------------- Wolverine Tube Inc.'s stockholders voted to reelect all members of the Board of Directors to serve for a term expiring at the next annual meeting of stockholders, including Steven S. Elbaum, K. Mitchell Posner, John L. Duncan, William F. Evans, David M. Gilchrist, Keith A. Carter and Alan Kestenbaum at its annual meeting of stockholders. Brett Young, who had served as a member of the Board since February 2007 as a designee of Plainfield Asset Management LLC pursuant to Plainfield's right to designate certain members to the Board under a previously disclosed 2007 definitive investment agreement with the Company, resigned, and was replaced by Mr. Carter as a Plainfield designated director of the Board. Mr. Carter currently serves as Senior Vice President of Plainfield Asset Management, LLC. Prior to joining Plainfield in 2006, Mr. Carter was Vice President of Briscoe Capital Management, LLC, the investment sub-advisor to the Fairfield Briscoe Senior Capital Fund, a hedge fund affiliated with the Fairfield Greenwich Group, focused on non-investment grade leveraged loans to companies owned by financial sponsors. From 2001 to 2005, Mr. Carter was an Associate at Heartland Industrial Partners, a private equity fund in Greenwich, CT specializing in industrial investments. About Wolverine Tube Wolverine Tube, Inc. is a global manufacturer and distributor of copper and copper alloy tube, fabricated products, and metal joining products. The Company currently operates seven facilities in the United States, Mexico, China, and Portugal. It also has distribution operations in the Netherlands and the United States. At October 4, 2009, the Company had total assets of $192,632,000 against total liabilities of $240,277,000; Series A Convertible Preferred Stock of $17,674,000; Series B Convertible Preferred Stock of $9,700,000; and total accumulated deficit of $75,019,000. Going Concern Doubt In its quarterly report for the three months ended October 4, 2009, the Company believes that its available cash and cash anticipated to be generated through operations is expected to be adequate to fund the Company's liquidity requirements, although there can be no assurances that the Company will be able to generate such cash. Additionally, the Company does not currently have in effect a revolving credit agreement or other capital commitments to supplement its existing cash and anticipated cash resources, if necessary, to meet its liquidity requirements materially in excess of the Company's current expectations. According to the Company, the uncertainty about the Company's ability to achieve its projected results, the absence of such credit or capital commitments and the uncertainty about the future price of copper, which has a substantial impact on working capital, raises substantial doubt about the Company's ability to continue as a going concern. The Company expects to continue to actively manage and optimize its cash balances and liquidity, working capital, operating expenses and product profitability, although there can be no assurances the Company will be able to do so. WYNDHAM WORLDWIDE: Bigger Dividend Won't Move Moody's Ba1 Rating ---------------------------------------------------------------- Moody's Investor Service said that Wyndham Worldwide's Ba1 Corporate Family Rating and stable rating outlook remains unchanged by the company's announcement that it has increased its dividend and will resume share repurchase activity. Moody's last rating action on Wyndham took place on May 13, 2009, when it assigned a Ba2 rating to the company's new unsecured convertible notes due 2012 and new senior unsecured notes due 2014. Wyndham Worldwide Corporation operates in three segments of the hospitality industry -- lodging, vacation exchange and rental, and vacation ownership. The company operates well known brand names such as, Wyndham Hotels & Resorts, Ramada, Days Inn, and RCI, among others. Annual revenues exceeded $4 billion in 2008. ZAYO GROUP: S&P Assigns First-Time Corporate Credit Rating at 'B' ----------------------------------------------------------------- Standard & Poor's Ratings Services said it assigned a first-time corporate credit rating of 'B' to Louisville, Colorado-based Zayo Group LLC. At the same time, S&P assigned a 'B-' issue-level rating and '5' recovery rating to the company's proposed $225 million of senior secured notes due 2017. The'5' recovery rating indicates expectations for modest (10%-30%) recovery of principal in the event of payment default. The outlook is stable. Zayo is a regional provider of fiber-based bandwidth infrastructure and neutral collocation. The company's regional fiber networks consist of about 20,000 fiber route miles primarily in the Northeastern and Midwest U.S. Zayo sells bandwidth primarily to other telecommunications companies. While the long- haul infrastructure market has a large number of competitors, Zayo generates most of its revenues in smaller secondary markets that generally have fewer competitors, with the local telephone company being the most significant. "This highlights Zayo's competitive advantage as its unique network serves deeply into underserved markets," said Standard & Poor's credit analyst Naveen Sarma. As a result, Zayo has an attractive customer base which includes the major national wireless operators, national and international long-haul operators, and competitive local exchange carriers. * Chrysler-Fiat Transaction Wins IDD's M&A Deal of 2009 ------------------------------------------------------- The sale of Chrysler's assets to a new company formed by Fiat through an expedited Section 363 bankruptcy sale won the 2009 M&A Deal of the Year award from Investment Dealers' Digest magazine (IDD). Jones Day served as lead counsel to Chrysler. In its article announcing the award, IDD cited numerous noteworthy features of the transaction, including Chrysler's size (100,000 creditors, $39.3 billion of assets, and $55.2 billion of liabilities) and place in the U.S. economy; the complexity and speed of the deal execution; and the involvement of the United States and Canadian governments (including a $4 billion pre- bankruptcy bridge loan, a $4.5 billion debtor-in-possession loan, and other financial assistance), as well as the United States Supreme Court. When Chrysler filed for bankruptcy in April 2009, President Obama promised its restructuring would be "efficient" and "controlled." Only 42 days after Chrysler sought bankruptcy protection, it completed the sale of substantially all of its assets to Chrysler Group LLC, a new entity formed and managed by Fiat, which now owns 20% of the company and can increase its stake by another 15% by meeting certain goals set by the U.S. government. As might be expected for a matter of this importance, complexity, and urgency, the Jones Day team advising Chrysler, led by New York-based partner Corinne Ball, included a substantial number of partners and associates from eight offices and eleven different areas of practice, including Banking & Finance, Business Restructuring & Reorganization, Employee Benefits & Executive Compensation, Government Regulation, Intellectual Property, Issues & Appeals, Labor & Employment, Mergers & Acquisitions, Real Estate, Tax, and Trial Practice. Founded in 1997, the IDD Deal of the Year Awards aim to honor the transactions that created the most value against the longest odds, pushed the boundaries of convention, and made a lasting mark on their industry. Honorees are selected solely by the editors of IDD. * January Bankruptcy Filings Hike 21% Over Last Year ---------------------------------------------------- Bankruptcy filings totaled more than 102,000 in January, a 21% increase on a daily basis from the same month in 2009, Bill Rochelle at Bloomberg News reported. Compared with December, January had 1 percent more filings, Mr. Rochelle said, citing data compiled from court records by Automated Access to Court Electronic Records. In January, commercial bankruptcies and larger companies filing in Chapter 11 were on the same pace as 2009 overall. Last year, Chapter 11 filings by U.S. businesses surged 50%, outpacing the 32% increase for individuals. * Few Municipal Bonds Defaulted in 39 Years, Says Moody's --------------------------------------------------------- Rated municipal issuers have a very limited default experience with only 54 defaults over the 1970-2009 period, said Moody's Investors Service in a new study on US municipal bond defaults and recoveries. More than three quarters of these defaults occurred in the healthcare and housing sectors. The default study presents historical default, loss and transition statistics for Moody's-rated issuers in the United States municipal bond market. "There is limited default experience in this market, in part due to the fact that many municipalities have the ability to secure their debt with a "general obligation" (GO) pledge, which means that all of the revenue-producing power of a municipality can be brought to bear to service the debt, including the municipality's ability to levy taxes," said Jennifer Tennant, Moody's AVP- Analyst. However, much of the debt issued in the municipal market is either sold by governments and not backed by a GO pledge or sold for obligors such as hospitals, universities or housing projects, and these debts, on average, have a modestly weaker credit profile than debts backed by a GO pledge. Of the 54 Moody's-rated municipal defaults since 1970, 51 of them have been defaults on non-GO debt. Overall, the historical recovery rates for defaulted US municipal bonds are higher, on average, than those for corporate bonds, said Moody's. For the period 1970-2009, the average historical 30-day post-default trading price for municipal bonds is $59.91 relative to a par value of $100, much higher than the average of $37.50 for corporate senior unsecured bonds over the same period. The full report, "U.S. Municipal Bond Defaults and Recoveries, 1970-2009," is available at www.moodys.com. * U.S. Foreclosure Activity Decreases 10% in January ---------------------------------------------------- RealtyTrac(R) released its January 2010 U.S. Foreclosure Market Report(TM), which shows foreclosure filings -- default notices, scheduled auctions and bank repossessions -- were reported on 315,716 U.S. properties during the month, a decrease of nearly 10 percent from the previous month but still 15 percent above the level reported in January 2009. The report also shows one in every 409 U.S. housing units received a foreclosure filing in January. REO activity nationwide was down 5 percent from the previous month but still up 31 percent from January 2009; default notices were down 12 percent from the previous month but still up 4 percent from January 2009; and scheduled foreclosure auctions were down 11 percent from the previous month but still up 15 percent from January 2009. "January foreclosure numbers are exhibiting a pattern very similar to a year ago: a double-digit percentage jump in December foreclosure activity followed by a 10 percent drop in January," said James J. Saccacio, chief executive officer of RealtyTrac. "If history repeats itself we will see a surge in the numbers over the next few months as lenders foreclose on delinquent loans where neither the existing loan modification programs or the new short sale and deed-in-lieu of foreclosure alternatives works." Nevada, Arizona, California, Florida post top state foreclosure rates Despite a year-over-year decrease in foreclosure activity of nearly 18 percent, Nevada's foreclosure rate remained highest among the states for the 37th straight month. One in every 95 Nevada housing units received a foreclosure filing during the month -- more than four times the national average. A 4 percent month-over-month increase in foreclosure activity boosted Arizona's foreclosure rate to second highest among the states in January. One in every 129 Arizona housing units received a foreclosure filing during the month. Foreclosure activity decreased by double-digit percentages from the previous month in both California and Florida, and the two states registered nearly identical foreclosure rates -- one in every 187 housing units receiving a foreclosure filing. California's foreclosure rate was statistically higher by a slim margin and ranked third highest among the states while Florida's foreclosure rate ranked fourth highest. With one in every 231 housing units receiving a foreclosure filing, Utah registered the nation's fifth highest state foreclosure rate despite a nearly 12 percent month-over-month decrease in foreclosure activity. Other states with foreclosure rates among the nation's 10 highest were Idaho, Michigan, Illinois, Oregon and Georgia. Six states account for nearly 60 percent of national total California, Florida and Arizona posted the three highest state totals in terms of properties receiving foreclosure filings in January, and together those states accounted for more than 44 percent of the national total. Illinois posted the nation's fourth highest total in January, with 18,120 properties receiving a foreclosure filing during the month -- a nearly 2 percent increase from the previous month and a 25 percent increase from January 2009. Michigan posted the nation's fifth highest total, with 17,574 properties receiving a foreclosure filing, and Texas posted the sixth highest total, with 12,225 properties receiving a foreclosure filing. Other states with totals among the 10 highest in the country were Nevada (11,854), Georgia (11,274), Ohio (11,105) and New Jersey (6,146). Phoenix only top 10 metro area to post monthly foreclosure increase Phoenix foreclosure activity increased nearly 4 percent from the previous month, and one in every 102 Phoenix housing units received a foreclosure filing during the month -- the second highest foreclosure rate among metropolitan areas with a population of at least 200,000. Phoenix was the only metro area among the top 10 to post a month-over-month increase in foreclosure activity. Las Vegas documented the highest metro foreclosure rate, with one in every 82 housing units receiving a foreclosure filing, despite a nearly 2 percent decrease in foreclosure activity from the previous month and a nearly 21 percent decrease in foreclosure activity from January 2009. Six California cities registered foreclosure rates among the top 10: Modesto at No. 3 (one in every 107 housing units); Stockton at No. 4 (one in 107); Riverside-San Bernardino-Ontario at No. 5 (one in 109); Merced at No. 6 (one in 109); Vallejo-Fairfield at No. 7 (one in 112); and Bakersfield at No. 8 (one in 118). Two Florida cities rounded out the top 10: Cape Coral-Fort Myers at No. 9 (one in 121); and Orlando-Kissimmee at No. 10 (one in 143). * Fed Lowers Value of AIG Assets, Hikes for Bear Holdings --------------------------------------------------------- Bloomberg News reports that the Federal Reserve lowered its estimated value of investment portfolios acquired in the rescue of American International Group Inc. by $193 million while raising the value of former Bear Stearns Cos. assets by $358 million. The net holdings of three corporations set up by the Fed for the mortgages and securities it took on in bailing out AIG and Bear Stearns in 2008 rose by $165 million, or 0.3% to $65 billion, the Fed said February 11 in a quarterly revaluation of the assets. The Bear Stearns investments rose 1.3% to $27.2 billion, while the two AIG portfolios lost 0.5% to $37.9 billion. * Lasry's Avenue Capital to Invest in Distressed Debt ----------------------------------------------------- Avenue Capital Group, the New York-based company started by Marc Lasry, is raising a new fund to invest in distressed debt, Bloomberg News reported, citing a person familiar with the discussions. According to the report, the Company, which has about $18.5 billion of assets under management, expects the fund to be about $3 billion, with fundraising concluding within three months. * Sheppard Mullin Elects Ten Attorneys to Partnership ----------------------------------------------------- Sheppard, Mullin, Richter & Hampton LLP is has elevated ten of its attorneys to partner. The ten new partners are Malani J. Cademartori (New York), Alfred Fraijo Jr. (Los Angeles/Downtown), S. Keith Garner (San Francisco), Bethany Hengsbach (Los Angeles/Downtown), Brent E. Horstman (Los Angeles/Downtown), Charbel Lahoud (Los Angeles/Downtown), Matthew S. McConnell (San Diego/Del Mar), Miriam Montesinos (San Francisco), Shannon Z. Petersen (San Diego/Downtown) and Scott R. Sveslosky (Los Angeles/Downtown). "We are proud to welcome this accomplished group of attorneys to the partnership, all of whom bring a wealth of knowledge and experience. Our newest partners have distinguished themselves through their achievements, as well as their commitment to maintaining the firm's entrepreneurial spirit and its dedication to clients," said Guy N. Halgren, chairman of the firm. Malani Cademartori, in the firm's Finance and Bankruptcy practice group in the New York office, regularly counsels both international and domestic clients in the areas of corporate reorganization, restructuring and liquidation in both domestic and cross-border insolvencies, creditors' rights, distressed asset acquisitions, insolvency-related securitizations, matters related to contract, lease and license issues in the insolvency and bankruptcy context, and out-of-court restructuring and bankruptcy planning. Cademartori has represented a wide array of entities in various industries in these areas, including debtors, major creditors, institutional lenders, bondholder committees, and investors in and purchasers of distressed assets. She received her J.D. from Fordham University School of Law in 1999 and her undergraduate degree from New York University in 1994. Alfred Fraijo Jr. is a member of the Real Estate, Land Use, Natural Resources and Environmental practice group and based in the firm's Los Angeles/Downtown office. Fraijo has significant experience in negotiating and securing land use entitlements for complex housing and mixed use development projects throughout California, including advising clients with innovative, urban renewal projects in the inner-city and other sectors with emerging markets. He advises public and private sector clients on state and federal land use and environmental laws, including the Subdivision Map Act, California Community Redevelopment Law, California Environmental Quality Act, National Environmental Policy Act, Clean Water Act, Endangered Species Act, CERCLA, RCRA, California Superfund Law and the Polanco Redevelopment Act. Fraijo also advises clients on all aspects of land use and redevelopment law in connection with the development of wind and solar energy projects. He received his law degree from Loyola Law School in 2002 and his undergraduate degrees, with honors, from Harvard University in 1999. Keith Garner, a member of the firm's Real Estate, Land Use, Natural Resources and Environmental practice group, is based in the firm's San Francisco office. Garner's practice focuses on state and federal environmental laws, land use planning and entitlement procedures, and natural resources permitting issues for large residential, commercial and mixed use communities and energy generation and transmission projects, including wind and solar facilities. He provides legal and strategic planning advice to clients at every stage of the complex development process, including due diligence for land acquisition, project planning and permitting, regulatory compliance, and land use litigation. Garner received his law degree from the University of California, Berkeley, Boalt Hall School of Law in 2001, his masters degree, with distinction, in Urban Planning from Harvard University in 1997 and his undergraduate degree, with honors, from Stanford University in 1993. Bethany Hengsbach, in the firm's Government Contracts and Regulated Industries practice group in the Los Angeles/Downtown office, specializes in commercial litigation and government contracts, with an emphasis on the Foreign Corrupt Practices Act, contractual disputes, and class actions. Hengsbach has represented businesses and individuals in litigation, arbitrations and investigations related to government contracts, international corporate compliance, trade secret misappropriation, products liability, professional liability, business torts, real estate, and intellectual property. She received her J.D. from DePaul University in 1997 and her undergraduate degree, with honors, from the University of Illinois in 1994. Brent Horstman is a member of the firm's Finance and Bankruptcy practice group and based in the Los Angeles/Downtown office. Horstman specializes in commercial law, with a primary focus on complex financial transactions, representing both lenders and borrowers in syndicated and single lender credit facilities, including both cash flow and asset-based financings. He has recently worked on a number of transactions involving hotel and gaming entities, in addition to a number of cross-border transactions. He received his law degree from Columbia University in 2001 and his undergraduate degree from Yale University in 1998. Charbel Lahoud, in the firm's Finance and Bankruptcy practice group in the Los Angeles/Downtown office, specializes in commercial law and focuses his practice on the structuring, documentation and negotiation of financial transactions. Lahoud's experience includes representing agents, lenders, participants and borrowers in personal and real property secured syndicated loan transactions and asset-based loan transactions. He received his J.D., order of the coif, from University of Southern California in 2001 and his undergraduate degree, cum laude, from University of California, Los Angeles in 1997. Matt McConnell is a member of the Labor and Employment practice group and based in the firm's San Diego/Del Mar office. McConnell specializes in labor and employment matters on behalf of management and has significant trial experience in which he has achieved multiple defense verdicts. He has defended employers in wrongful termination and employment discrimination litigation, including sexual harassment, race, age, national origin, gender and disability discrimination. McConnell has considerable experience representing employers on a variety of issues including representative and class action wage and hour matters, traditional labor matters, unfair competition claims, breach of contract, fraud and prevailing wages. He received his law degree from Duke University in 2000 and his undergraduate degrees from the University of California, San Diego in 1992. Miriam Montesinos, in the firm's Real Estate, Land Use, Natural Resources and Environmental practice group in the San Francisco office, specializes in land use, environmental and climate change matters, including obtaining development entitlements, compliance with the California Environmental Quality Act (CEQA), and administrative proceedings and litigation. Montesinos has worked on a wide variety of land use projects throughout California, including retail developments/shopping centers, office and industrial parks, residential, mixed use developments, and long- range strategic plans for developers. As part of her practice related to CEQA compliance, she has advised on the legal adequacy of numerous EIRs for projects throughout California. Montesinos received her J.D. from the University of California, Berkeley, Boalt Hall School of Law in 1999 and her undergraduate degree from Stanford University in 1995. Shannon Petersen, a member of the firm's Business Trial practice group and based in the San Diego/Downtown office, practices general business litigation. Petersen specializes in financial institution, insurance, and healthcare litigation. He has substantial lead counsel trial experience, and is familiar with all aspects of litigation, arbitration, and mediation. He has successfully represented business clients in claims, including class action claims, involving breach of contract, unfair business practices and unfair competition, false advertising, fraud, breach of fiduciary duty, negligence, bad faith, unjust enrichment, misappropriation of trade secrets, Consumer Legal Remedies Act, Truth in Lending Act and Real Estate Settlement Procedures Act violations, quiet title, infliction of emotional distress, and other causes of action. Petersen received his J.D., with distinction, from Stanford Law School in 2000, Ph.D. from University of Wisconsin in 2000, and M.A. and B.A., with high honors, from University of Montana in 1995 and 1993 respectively. He is a veteran of the U.S. Navy, where he served as a Russian linguist. Scott Sveslosky, in the firm's Business Trial practice group in the Los Angeles/Downtown office, has been responsible for numerous aspects of business, antitrust, professional liability, banking, products liability, trade secret, toxic tort and insurance litigation matters. Sveslosky has tried to verdict business matters involving breach of contract, fraud, and unfair competition. His experience includes representing clients in a variety of business disputes and claims of breach of fiduciary duties, breach of contract, fraud, tortious interference with business relations, violation of the federal RICO statute, misappropriation of trade secrets, bad faith and related causes of action. Sveslosky received his J.D. and his B.S. from the University of Southern California in 2001 and 1998 respectively. About Sheppard, Mullin, Richter & Hampton LLP Sheppard Mullin is a full service AmLaw 100 firm with 550 attorneys in 11 offices located in the United States and Asia. Since 1927, companies have turned to Sheppard Mullin to handle corporate and technology matters, high stakes litigation and complex financial transactions. In the U.S., the firm's clients include more than half of the Fortune 100. * BOOK REVIEW: The First Junk Bond: A Story of Corp. Boom & Bust ---------------------------------------------------------------- Author: Harlan D. Platt Publisher: Beard Books Paperback: 256 pages List Price: US$34.95 Order your personal copy at http://amazon.com/exec/obidos/ASIN/1587981203/internetbankrupt This is a book that business people will find particularly enlightening. It details how Texas International, Inc.'s bankruptcy filing affected various stakeholders, the bankruptcy negotiation process, and the alternative post-bankruptcy structures that were considered. This engrossing book follows the extraordinary journey of the company through its corporate growth and decline, debt exchange offers, and corporate rebirth. It is a case study of a company that exemplified the 1980s, complete with fascinating people, financial innovations, and successive rounds of high stakes poker, as the misfortunes of the company unfold. Detailed is the involvement of Drexel Lambert banking house and its guiding spirit Michael Milken, who secured fresh capital for the company through the issuance of a high-yield bond with an above-market rate of interest to counterbalance its elevated credit risk. ********* 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 ***