/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/100225.mbx T R O U B L E D C O M P A N Y R E P O R T E R Thursday, February 25, 2010, Vol. 14, No. 55 Headlines 1600 TRADING: Files Schedules of Assets & Liabilities 1600 TRADING: PlainsCapital Doesn't Consent to Cash Collateral Use 1600 TRADING: Section 341(a) Meeting Scheduled for March 19 1600 TRADING: Wants to Employ Eric Liepins as Bankruptcy Counsel ABITIBIBOWATER INC: Gets Dismissal of ABH LLC Case ABITIBIBOWATER INC: 2nd Creditors Claims Bar Date Set for April 7 ACCENTIA BIOPHARMA: Court Approves Emezine Settlement Agreement ACCENTIA BIOPHARMA: Laurus Master Fund Owns 9.99% of Common Stock ACE HARDWARE: Moody's Sees Sale Pact With Sears as Positive Sign AGE REFINING: Enduring Wants to Reclaim Delivered Oil ALLIANT TECHSYSTEMS: Fitch Affirms Issuer Default Rating at 'BB' AMERCO: S&P Affirms 'BB' Long-Term Corporate Credit Rating ANDERSON ENTERPRISES: Voluntary Chapter 11 Case Summary ANDERSON RENTALS: Voluntary Chapter 11 Case Summary ARDENT MEDICAL: Moody's Assigns 'B2' Corporate Family Rating ARDENT HEALTH: S&P Assigns Corporate Credit Rating at 'B' ARVINMERITOR INC: Commences Tender Offer for Up to $175MM of Notes ARVINMERITOR INC: Fitch Upgrades Issuer Default Rating to 'B-' ARVINMERITOR INC: Moody's Affirms 'Caa1' Corporate Family Rating ARVINMERITOR INC: S&P Assigns 'CCC-' Rating on $250 Mil. Notes ASARCO LLC: Claim Objection Deadline Extended to April 12 ASARCO LLC: Grupo Mexico Confident to Prevail vs. Sterlite Appeal ASARCO LLC: Plainfield Insists Add'l Interest Request Timely ASARCO LLC: Reaches Deal with Union on 1-Year Extension of CBA ATLANTIS SYSTEMS: Has Deal on Comvest Debt-to-Equity Conversion B&W INVESTMENTS: Voluntary Chapter 11 Case Summary BEDFORD COMMUNICATIONS: Filed for Chapter 11 in New York BELDEN INC: Moody's Affirms Corporate Family Rating at 'Ba1' BERNARD MADOFF: SIPC Says Net Equity Calculation is Correct BLANCA LLC: Case Summary & 20 Largest Unsecured Creditors BLOCKBUSTER INC: Weil Gotshal, Rothschild On Board BLOCKBUSTER INC: Reports $558.2-Mil. Net Loss for Fiscal 2009 BRIARWOOD CAPITAL: Case Summary & 20 Largest Unsecured Creditors BUCKINGHAM FINANCIAL: U.S. Trustee Wants Dismissal or Conversion CABLEVISION SYSTEMS: Marathon Holds 6.76% of Class A Shares CABLEVISION SYSTEMS: OppenheimerFunds Has 2.54% of Class A Shares CALIFORNIA: Postpones Sale of $2-Bil. GO Bonds for a Week CANWEST GLOBAL: D. Asper & Lisa Pankratz Resign From Board CANWEST GLOBAL: Union CEP Wants Severance Pay for Members CATHOLIC CHURCH: Wilmington Diocese Won't Pay Accused Priests CELTIC ADVENTURES: Files for Chapter 11 Bankruptcy CHATTEM INC: Discloses Noncompliance With NASDAQ Listing Rule CHINA ARCHITECTURAL: Enters Into Conditional Waiver Deal CHRYSLER LLC: Atty. Gen Says Dealer Laws Don't Conflict With Order CHRYSLER LLC: Hearing Today on Sale Process for Stamping Plant CHRYSLER LLC: Proposes DESCO & NAI as Brokers CHRYSLER LLC: Rejected Dealers Reconsideration Request Untimely CHRYSLER LLC: State Court Denies Dealers' Request for Injunction CINCINNATI BELL: Peninsula Capital Holds 6.40% of Class A Shares CINCINNATI BELL: Vanguard Group Holds 6.87% of Class A Shares CMR MORTGAGE: Court Continues Plan Outline Hearing to April 1 COMPUTER SYSTEMS: Gets Final OK to Use Lenders Cash Collateral CONSECO INC: Paulson & Co. Owns 9.7% of Common Stock CONTINENTAL AIRLINES: FMR, Fidelity Hold 15.598% of Class B Shares CONTINENTAL AIRLINES: Wellington Holds 5.06% of Class B Shares CRESCENT RESOURCES: Committee Against Executive Bonuses CROSS CANYON: Gets Final OK to Use CIT Capital's Cash Collateral DAZ VINEYARDS: Files Schedules of Assets & Liabilities DAZ VINEYARDS: Taps Beall & Burkhardt as Bankruptcy Counsel DOMINO'S PIZZA: Cedar Rock Capital Reports 4.62% Stake DOMINO'S PIZZA: TAMRO Capital Reports 5% Equity Stake DOYLE HEATON: Files Schedules of Assets & Liabilities DOYLE HEATON: Wants to Use Collateral Containing Rental Proceeds DOYLE HEATON: Taps Pachulski Stang as General Bankruptcy Counsel DURACO PRODUCT: STAG III Wants Conversion to Chapter 7 EAST WEST RESORT: Section 341(a) Meeting Scheduled for April 6 EAST WEST RESORT: Taps Paul Hastings as Bankruptcy Counsel EAST WEST RESORT: Wants to Hire Richards Layton as Co-Counsel EAST WEST RESORT: Wants Epiq Bankruptcy Solutions as Claims Agent EASTMAN KODAK: Legg Mason Owns 20.80% of Common Stock ELECTROGLAS INC: Wants to Have Until May 7 to Propose Plan ENNIS HOMES: Targets April 2 Confirmation on Reorganization Plan ENRON CORP: Savings Plan Begins Distribution from Newby Settlement EQUINIX INC: Discloses Proposed $500MM Public Offering of Sr Notes EQUINIX INC: Moody's Assigns Corporate Family Rating at 'Ba3' EQUINIX INC: S&P Affirms Corporate Credit Rating at 'B+' ERICKSON RETIREMENT: Further Amends Plan as Settlements Reached ERICKSON RETIREMENT: Wants Plan Exclusivity Until June 17 ESCADA AG: C. Marques to Assist in Wind Down of EUSA ESCADA AG: Creditors Oppose Plan Extension for EUSA ESCADA AG: U.S. Unit Proposes March 31 Admin. Claims Bar Date ETHAN ALLEN: Moody's Downgrades Credit Ratings to 'Ba2' FAIRFIELD RESIDENTIAL: Seeks Time to Fix Disclosure Statement FIDDLER'S CREEK: Case Summary & 20 Largest Unsecured Creditors FIRESTONE ASSOCIATES: Case Summary & 5 Largest Unsecured Creditors FIRST CONVALESCENT: Case Summary & 15 Largest Unsecured Creditors FLYING J: Term Loan Agent Opposes Exclusivity Extension FOOTHILLS RESOURCES: Emerges from Chapter 11 Bankruptcy FRASER PAPERS: Clears Final Conditions of Sale of Business FREESCALE SEMICONDUCTOR: Closes Senior Secured Notes Offering GENCORP INC: BlackRock Holds 6.59% of Common Stock GENCORP INC: Files Shelf Prospectus; May Sell $200MM of Securities GENCORP INC: Franklin Mutual Advisers Owns 5.7% of Common Stock GENCORP INC: To Hold Annual Shareholders Meeting on March 24 GENERAL GROWTH: Has $2.625-Bil. Investment Deal with Brookfield GENERAL GROWTH: Simon Says $10-Bil. Bid Superior to GGP Plan GENERAL GROWTH: Westfield Group Enters Bidding Picture GENERAL GROWTH: Fee Committee Gets OK for Hughes as Counsel GENERAL GROWTH: Luxor Capital Wants Trading of Covered Claims GENERAL GROWTH: Morgan Stanley Has 5.1% Stake GENERAL MOTORS: To Wind Down Hummer as Sichuan Deal Fails GIBSON GUITAR: Moody's Junks Corporate Family Rating From 'B3' GLOBAL CROSSING: Board, Panel Approve Pay-out of Annual Bonus GRAHAM PACKAGING: Fitch Upgrades Issuer Default Rating to 'B' GRANT RUDOLPH: Case Summary & 20 Largest Unsecured Creditors GREEKTOWN HOLDINGS: Court OKs $7 Mil. in Fees for Sept.-Nov. GREEKTOWN HOLDINGS: Enlarges Ernst & Young Work for 4th Time GREEKTOWN HOLDINGS: Proposes WG-Michigan as Gaming Consultant HAIGHTS CROSS: Court Confirms Prepackaged Reorganization Plan HEALTHSOUTH CORP: FMR, Fidelity Hold 1.399% of Common Stock HEALTHSOUTH CORP: Morgan Stanley Holds 7.2% of Common Stock HEALTHSOUTH CORP: Osterweis Holds 9.15% of Series A Preferreds HEALTHSOUTH CORP: Reports $128.8 Million Net Income for 2009 HOME INTERIORS: Plan Promises Pro Rata Share for Unsecureds INTELSAT SA: Expects Up to $900 Million in Total CapEx This Year JAMES EDWARD: Section 341(a) Meeting Scheduled for March 17 JAMES ROBERT RIDLEY: Case Summary & 20 Largest Unsecured Creditors JAPAN AIRLINES: Applies Antitrust Immunity With American Air JAPAN AIRLINES: M. Ventress Wants Lift Stay to Continue Appeal JAPAN AIRLINES: US Court Recognizes Tokyo Case as Main Proceeding JERRY KAPLAN: Case Summary & 7 Largest Unsecured Creditors K&S CAFETERIA: Files for Chapter 11 Bankruptcy LANDAMERICA FIN'L: Court Approves Final Fee Applications LANDAMERICA FIN'L: Court Confirms OneStop'S Chapter 11 Plan LANDAMERICA FIN'L: Trustee Wants More Time to Object to Claims LEAP WIRELESS: Cricket Has Joint Venture Deal with Pocket Comms LEAP WIRELESS: FMR, Fidelity Hold 9.878% of Common Stock LEAP WIRELESS: Goldman Sachs Cuts Stake to 0.1% From 7.4% LEAP WIRELESS: Wellington Management Holds 5.47% of Common Stock LEARNING CARE: Moody's Assigns 'B2' Rating on $265 Mil. Notes LEARNING CARE: S&P Affirms 'CCC+' Corporate Credit Rating LEHMAN BROTHERS: Hong Kong Agency Probing 1,056 Remaining Cases LEHMAN BROTHERS: LB Preferred Somerset's Schedules & Statement LEHMAN BROTHERS: LB Somerset LLC Files Schedules & Statement LEHMAN BROTHERS: Norton Rose Chages $1.1MM for June-Sept. Work LOONEY RICKS KISS: Case Summary & 20 Largest Unsecured Creditors MAGNA ENTERTAINMENT: Pimlico/Laurel Auction Moved to March 25 MAGNA ENTERTAINMENT: Disclosure Statement Hearing on March 23 MESA AIR: Bankruptcy Cues AAR's $45 Mil. Annual Revenue Loss MESA AIR: Donald Smith Has 1.51% Equity Stake MICHAELS STORES: Revolving Credit Facility Extended to April 2014 MIDWAY GAMES: Files Chapter 11 Plan of Liquidation MILA INC: Director Can Use D&O Policy Proceeds for Defense MOVIE GALLERY: Blockbuster Eyes Buying Some, Not All, Assets MOVIE GALLERY: Canada Stores Safe from Bankruptcy MOVIE GALLERY: Hires DJM as Real Estate Consultant MOVIE GALLERY: Wants Moelis as Financial Advisor MPI AZALEA: Can Hire Berger Singerman as Bankruptcy Counsel MT. ZION URBAN RENEWAL: Case Summary & 7 Largest Unsec. Creditors NATURAL PRODUCTS: Set to Emerge from Bankruptcy NAVISTAR INTERNATIONAL: Elects Richard Tarapchak as Vice President NEENAH ENTERPRISES: Taps Sidley Austin as Gen. Bankruptcy Counsel NISKA GAS: Moody's Assigns 'B1' Rating on $800 Mil. Senior Notes OCCUPATIONAL & MEDICAL: Chapter 15 Case Summary ORLEANS HOMEBUIDLERS: Wants to Extend Maturity Date of Loan Deal OSCIENT PHARMA: Guardian Unsecureds Has 0% Recovery Under the Plan OSHKOSH CORP: Moody's Rates $500 Mil. Senior Notes at 'B3' OSHKOSH CORP: S&P Assigns 'B-' Rating on $500 Mil. Senior Notes PECAN TERRACE: Case Summary & 2 Largest Unsecured Creditors PENN TRAFFIC: Wants Plan Exclusivity Until June 16 PETROFLOW ENERGY: Has Forbearance Agreement Until March 7 PINE VALLEY COUNTRY: Case Summary & 16 Largest Unsecured Creditors PPI PET PRODUCTS: Case Summary & 20 Largest Unsecured Creditors QUEBECOR WORLD: Angelo Gordon Acquires World Color Securities RANCHER ENERGY: Posts $14.9 Million Net Loss in Q3 Ended Dec. 31 RAYMOND READY MIX: Case Summary & 20 Largest Unsecured Creditors REDCORP VENTURES: Strategic Resource's Acquisition Bid Accepted REDDY ICE: Cuts Net Loss to $2 Million in 4th Quarter RICHARD BLACK: Case Summary & 9 Largest Unsecured Creditors SAMUEL TILDEN: Voluntary Chapter 11 Case Summary SGD TIMBER: Section 341(a) Meeting Scheduled for March 29 SGD TIMBER: Taps Messner & Reeves as Bankruptcy Counsel SPANSION INC: Addresses Objections to Reorganization Plan SPANSION INC: Court Gives Final Nod for $450 Mil. Exit Facility SPANSION INC: Opposes Spansion Japan Request for $761MM Reserve SPANSION INC: Plan Confirmation Hearing Today SPHERIS INC: Committee Slows Down Bid Procedures Hearing SRKO FAMILY: Files for Chapter 11 Bankruptcy in Denver STERLING MINING: Court Extends Exclusivity Period Until June 4 STERLING MINING: Goldman Sachs Group Owns 4.2% of Common Stock STEVE RIGGS: Files for Chapter 11 Bankruptcy SUNRISE SENIOR LIVING: Extends Wells Fargo Loans to Dec. 1 TALBOT INC: BPW Acquisition Stockholders Approve Merger TRIBUNE CO: Court Won't Dismiss Beatty's Suit Over Dick Tracy TRIBUNE CO: Gets Nod of Faggio & New Haven Settlements TVI CORP: Newland Capital Reports Zero Equity Stake UAL CORP: Board Appoints Wendy Morse to HR Committee US AIRWAYS: Ameriprise Discloses 3.45% Equity Stake US AIRWAYS: FMR LLC Discloses 10.523% Stake US AIRWAYS: Had $1.3 Billion Cash at End of Year VION PHARMACEUTICALS: Plans to Auction Equipment WHITE BIRCH: Files for Bankruptcy, Has $140MM DIP Facility W.R. GRACE: Gets Court's Nod to Seek Exit Financing W.R. GRACE: Plan Proponents Resolve Kaneb, et al., Objections W.R. GRACE: Signs Amendments to Credit & Hedge Agreements * Banks in FDIC's Problem List Rise to 702 at End of 2009 * Baker Hostetler Snags Arent Fox Bankruptcy Partner * Becker & Poliakoff NY Office Welcomes Atty. Helen Davis Chaitman * Lisa Hu Barquist Joins Payton & Associates LLC * Chapter 11 Cases with Assets & Liabilities Below $1,000,000 ********* 1600 TRADING: Files Schedules of Assets & Liabilities ----------------------------------------------------- 1600 Trading Co., L.P., has 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 $0 B. Personal Property $11,000,000 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $4,383,370 E. Creditors Holding Unsecured Priority Claims $0 F. Creditors Holding Unsecured Non-priority Claims $763,692 ---------- ---------- TOTAL $11,000,000 $5,147,062 Richardson, Texas-based 1600 Trading Co., LP, filed for Chapter 11 bankruptcy protection on February 15, 2010 (Bankr. E.D. Texas Case No. 10-40478). Eric A. Liepins, Esq., who has an office in Dallas, Texas, assists the Company in its restructuring effort. 1600 TRADING: PlainsCapital Doesn't Consent to Cash Collateral Use ------------------------------------------------------------------ PlainsCapital Bank has filed with the U.S. Bankruptcy Court for the Eastern District of Texas a notice of non-consent to the Debtor's use of cash collateral and request for accounting. PCB, as lender, entered into a certain loan and security agreement with the Debtor in October 2007. The Debtor executed a promissory note payable to PCB in the amount of $6 million. A balance remains outstanding and is due and owing to PCB on the 2007 Note. PCB claims that the loans made pursuant to the 2007 Loan and the 2007 Note are secured by a validly perfected, first priority lien on and security interest in substantially all assets of the Debtor. Consistent with the 2007 Loan, PCB claims a security interest in all cash held by the Debtor that constitute proceeds or other forms of cash collateral of PCB. PCB is asking for an accounting of all cash collateral received by the Debtor since July 3, 2009. Richardson, Texas-based 1600 Trading Co., LP, filed for Chapter 11 bankruptcy protection on February 15, 2010 (Bankr. E.D. Tex. Case No. 10-40478). Eric A. Liepins, Esq., who has an office in Dallas, Texas, assists the Company in its restructuring effort. The Company has assets of $11,000,000, and total debts of $5,147,062. 1600 TRADING: Section 341(a) Meeting Scheduled for March 19 ----------------------------------------------------------- The U.S. Trustee for Region 6 will convene a meeting of creditors in 1600 Trading Co., LP's Chapter 11 case on March 19, 2010, at 1:30 p.m. The meeting will be held at 2000 E. Spring Creek Parkway, Plano, TX 75074. 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. Richardson, Texas-based 1600 Trading Co., LP, filed for Chapter 11 bankruptcy protection on February 15, 2010 (Bankr. E.D. Tex. Case No. 10-40478). Eric A. Liepins, Esq., who has an office in Dallas, Texas, assists the Company in its restructuring effort. The Company has assets of $11,000,000, and total debts of $5,147,062. 1600 TRADING: Wants to Employ Eric Liepins as Bankruptcy Counsel ---------------------------------------------------------------- 1600 Trading Co., LP, has asked for permission from the U.S. Bankruptcy Court for the Eastern District of Texas to employ Eric A. Liepins, P.C., as bankruptcy counsel. The Debtor believes it is necessary to retain Eric A. Liepins immediately for the purpose of orderly liquidating the assets, reorganizing the claims of the estate and determining the validity of claims asserted in the estate. Eric A. Liepins will be paid based on the hourly rates of its personnel: Eric A. Liepins $250 Paralegals & Legal Assistants $30 to $50 The Debtor assures the Court that Eric A. Liepins is "disinterested" as that term is defined in Section 101(14) of the Bankruptcy Code. Richardson, Texas-based 1600 Trading Co., LP, filed for Chapter 11 bankruptcy protection on February 15, 2010 (Bankr. E.D. Texas Case No. 10-40478). Eric A. Liepins, Esq., who has an office in Dallas, Texas, assists the Company in its restructuring effort. The Company has assets of $11,000,000, and total debts of $5,147,062. ABITIBIBOWATER INC: Gets Dismissal of ABH LLC Case -------------------------------------------------- AbitibiBowater Inc. and its units sought and obtained an order from the Bankruptcy Court dismissing the Chapter 11 case of ABH LLC 2. ABH LLC 2 was a special purpose limited liability company formed in connection with, and pursuant to, a series of Court-approved transactions, or otherwise referred to as the Repayment Steps, to effectuate the repayment of certain intercompany debt to address the potential $55.25 million Canadian withholding tax liability without affecting creditors' interests in the Chapter 11 Cases. The withholding tax liability could have otherwise been payable on or before January 15, 2010. Specifically, AbitibiBowater U.S. Holding LLC, together with three newly formed limited liability companies -- (i) ABH LLC 1 or "LLC1," as a wholly owned subsidiary of AbitibiBowater Inc., (ii) ABH Holding Company LLC or "LLC Holdco", as the immediate parent of LLC1, and (ii) LLC2, as a wholly owned subsidiary of Abitibi-Consolidated Company of Canada -- engaged in the Repayment Transactions. Pursuant to the Repayment Steps, LLC2 merged with LLC1, with LLC1 being the surviving entity of that Merger. To that end, LLC2 served only a distinct, designated purpose which was outlined in the Repayment Steps, Sean T. Greecher, Esq., at Young Conaway Stargatt & Taylor, LLP, in Wilmington, Delaware, informed the Court. In light of the completion of the Repayment Steps on December 23, 2009, including the consummation of the Merger on December 22, LLC2 no longer exists as a separate legal entity, Mr. Greecher notes. According to Mr. Greecher, the dismissal of LLC2's case will affect neither the Debtors' other pending Chapter 11 cases, nor the proposed supplemental joint administration of LLC1 and LLC Holdco concurrently filed with, and approved by, the Court. Continuing LLC2's Chapter 11 case serves no purpose and could potentially confuse creditors, make it more difficult for the Debtors to properly craft and confirm an anticipated plan of reorganization, and waste valuable estate resources, Mr. Greecher told Judge Kevin Carey. About AbitibiBowater Inc. Headquartered in Montreal, Canada, AbitibiBowater Inc. -- http://www.abitibibowater.com/-- produces a wide range of newsprint, commercial printing papers, market pulp and wood products. It is the eighth largest publicly traded pulp and paper manufacturer in the world. AbitibiBowater owns or operates 23 pulp and paper facilities and 28 wood products facilities located in the United States, Canada, the United Kingdom and South Korea. Marketing its products in more than 90 countries, the Company is also among the world's largest recyclers of old newspapers and magazines, and has third-party certified 100% of its managed woodlands to sustainable forest management standards. AbitibiBowater's shares trade over-the-counter on the Pink Sheets and on the OTC Bulletin Board under the stock symbol ABWTQ. The Company and several of its affiliates filed for protection under Chapter 11 of the U.S. Bankruptcy Code on April 16, 2009 (Bankr. D. Del. Lead Case No. 09-11296). Judge Kevin J. Carey presides over the case. The Company and its Canadian affiliates commenced parallel restructuring proceedings under the Companies' Creditors Arrangement Act before the Quebec Superior Court Commercial Division the next day. Alex F. Morrison at Ernst & Young, Inc., was appointed CCAA monitor. Paul, Weiss, Rifkind, Wharton & Garrison LLP, serves as the Debtors' U.S. bankruptcy counsel. Stikeman Elliot LLP, acts as the Debtors' CCAA counsel. Young, Conaway, Stargatt & Taylor, in Wilmington, Delaware, serves as the Debtors' co-counsel, while Troutman Sanders LLP in New York, serves as the Debtors' conflicts counsel in the Chapter 11 proceedings. The Debtors' financial advisors are Advisory Services LP, and their noticing and claims agent is Epiq Bankruptcy Solutions LLC. The CCAA Monitor's counsel is Thornton, Grout & Finnigan LLP, in Toronto, Ontario. Abitibi-Consolidated Inc. and various Canadian subsidiaries filed for protection under Chapter 15 of the U.S. Bankruptcy Code on April 17, 2009 (Bankr. D. Del. 09-11348). Judge Carey also handles the Chapter 15 case. Pauline K. Morgan, Esq., and Sean T. Greecher, Esq., at Young, Conaway, Stargatt & Taylor, in Wilmington, represent the Chapter 15 Debtors. As of Sept. 30, 2008, the Company had $9,937,000,000 in total assets and $8,783,000,000 in total debts. Bankruptcy Creditors' Service, Inc., publishes AbitibiBowater Bankruptcy News. The newsletter provides gavel-to-gavel coverage of the Chapter 11 proceedings and parallel proceedings under the Companies' Creditors Arrangement Act in Canada undertaken by Abitibibowater Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). ABITIBIBOWATER INC: 2nd Creditors Claims Bar Date Set for April 7 ----------------------------------------------------------------- AbitibiBowater Inc. has received approval for a process to call for employee and other specified creditor claims by the Quebec Superior Court in Canada and the U.S. Bankruptcy Court for the District of Delaware. This Second Claims Process follows an earlier call for specified creditor claims which was approved by the courts and announced on September 4, 2009. The Second Claims Process outlines the procedures by which specified creditors can make claims against the Company. These specified creditors include, among others: certain creditors that were not subject to the First Claims Process, such as Company employees who were active as at April 16, 2009, or thereafter; certain creditors who may have claims arising from the breach or repudiation of contracts arising after August 31, 2009; and certain Company lenders. A comprehensive listing of procedures and specified creditors has been included in the Thirty-Second Report of the Monitor, a link to which can be found on abitibibowater.com. Under the Second Claims Process, creditor claims must be received by 4:00 p.m. (Eastern Daylight Time) on April 7, 2010. The Monitor, Ernst & Young Inc., and the Company's Claims Agent, Epiq Bankruptcy Solutions, LLC, will be mailing proof of claim packages to all known specified creditors. In addition, a copy of the court orders and the proof of claim package will be available through a link on abitibibowater.com. Creditors, or any other interested parties, who do not receive a proof of claim package can obtain the information through the Company website. About AbitibiBowater Inc. Headquartered in Montreal, Canada, AbitibiBowater Inc. -- http://www.abitibibowater.com/-- produces a wide range of newsprint, commercial printing papers, market pulp and wood products. It is the eighth largest publicly traded pulp and paper manufacturer in the world. AbitibiBowater owns or operates 23 pulp and paper facilities and 28 wood products facilities located in the United States, Canada, the United Kingdom and South Korea. Marketing its products in more than 90 countries, the Company is also among the world's largest recyclers of old newspapers and magazines, and has third-party certified 100% of its managed woodlands to sustainable forest management standards. AbitibiBowater's shares trade over-the-counter on the Pink Sheets and on the OTC Bulletin Board under the stock symbol ABWTQ. The Company and several of its affiliates filed for protection under Chapter 11 of the U.S. Bankruptcy Code on April 16, 2009 (Bankr. D. Del. Lead Case No. 09-11296). Judge Kevin J. Carey presides over the case. The Company and its Canadian affiliates commenced parallel restructuring proceedings under the Companies' Creditors Arrangement Act before the Quebec Superior Court Commercial Division the next day. Alex F. Morrison at Ernst & Young, Inc., was appointed CCAA monitor. Paul, Weiss, Rifkind, Wharton & Garrison LLP, serves as the Debtors' U.S. bankruptcy counsel. Stikeman Elliot LLP, acts as the Debtors' CCAA counsel. Young, Conaway, Stargatt & Taylor, in Wilmington, Delaware, serves as the Debtors' co-counsel, while Troutman Sanders LLP in New York, serves as the Debtors' conflicts counsel in the Chapter 11 proceedings. The Debtors' financial advisors are Advisory Services LP, and their noticing and claims agent is Epiq Bankruptcy Solutions LLC. The CCAA Monitor's counsel is Thornton, Grout & Finnigan LLP, in Toronto, Ontario. Abitibi-Consolidated Inc. and various Canadian subsidiaries filed for protection under Chapter 15 of the U.S. Bankruptcy Code on April 17, 2009 (Bankr. D. Del. 09-11348). Judge Carey also handles the Chapter 15 case. Pauline K. Morgan, Esq., and Sean T. Greecher, Esq., at Young, Conaway, Stargatt & Taylor, in Wilmington, represent the Chapter 15 Debtors. As of Sept. 30, 2008, the Company had $9,937,000,000 in total assets and $8,783,000,000 in total debts. Bankruptcy Creditors' Service, Inc., publishes AbitibiBowater Bankruptcy News. The newsletter provides gavel-to-gavel coverage of the Chapter 11 proceedings and parallel proceedings under the Companies' Creditors Arrangement Act in Canada undertaken by Abitibibowater Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). ACCENTIA BIOPHARMA: Court Approves Emezine Settlement Agreement --------------------------------------------------------------- On February 17, 2010, the U.S. Bankruptcy Court for the Middle District of Florida, Tampa Division, approved an Emezine Settlement Agreement between Accentia Biopharmaceuticals, Inc. and BioDelivery Sciences Inc. ("BDSI"), entered into as of December 30, 2009. Parties to the settlement agreement are the Company, the Company's wholly-owned subsidiary TEAMM Pharmaceuticals, Inc., d/b/a Accentia Pharmaceuticals, BDSI, and BDSI's wholly-owned subsidiary Arius Pharmaceuticals, Inc. The purpose of the settlement agreement is to memorialize the terms and conditions of a settlement between the Company and BDSI of claims by the Company relating to a distribution agreement, dated March 12, 2004, between Arius and TEAMM related to the marketing and distribution of Emezine, a product licensed by Arius from Reckitt Benckiser Healthcare (UK) Limited. Following the issuance in February 2006 by the U.S. Food and Drug Administration of a non-approvable letter with respect to the New Drug Application ("NDA") for Emezine, BDSI ceased its Emezine related development efforts and on December 17, 2008, the distribution agreement was terminated. The settlement agreement resolves the Company's claims against BDSI under the terminated distribution agreement. The settlement agreement provides that the Company and BDSI mutually release all claims that either may have against each other and, in connection therewith, the Company will: (a) receive $2.5 million from BDSI; and (b) receive the following royalty rights (the "Product Rights") from BDSI with respect to BDSI's BEMA Granisetron product candidate ("BEMA Granisetron") (or in the event it is not BEMA Granisetron, the third BDSI product candidate, excluding BEMA Bupremorphine, as to which BDSI files an NDA, which, together with BEMA Granisetron, shall be referred to hereinafter as the "Product"): (i) 70/30 split (BDSI/Company) of royalty received if a third party sells the Product and 85/15 split on net sales if BDSI sells the Product; and (ii) BDSI will, from the sale of the Product, fully recover amounts equal to (1) all internal and external worldwide development costs of the Product ("Costs") plus interest (measured on weighted average prime interest rate from first dollar spent until Product launch) and (2) the $2.5 million payment plus interest (measured on weighted average prime interest rate from the time of payment until Product launch) before the Company begins to receive its split as described in (b) (i) above. (c) issue to BDSI a warrant to purchase two (2) million shares of the Company's majority-owned subsidiary, Biovest International, Inc. from the Company, with a strike price equal to 120% of the closing bid price of Biovest's common stock as of the date the Bankruptcy Court enters a final order authorizing the Company to carry out the agreement, with the issuance of the warrant to occur upon receipt of the $2.5 million payment by the Company. The warrant will be exercisable immediately and for a period of seven (7) years from the date of issuance. During the initial two (2) year exercise period, any exercise of thewWarrant by BDSI will be subject to approval by Biovest. In the event that BDSI receives any sublicensing or milestone payments associated with the Product up to and including the NDA approval, BDSI will apply 30% of such payments toward payback of the Costs of the Product plus interest and the $2.5 million payment plus the interest. The $2.5 million payment shall be made upon approval of the agreement by the Bankruptcy Court and subsequent to a 14 day appeal period, and only if no appeals are received. The transfer of Product Rights shall become effective only upon the Company's exit from Reorganization, defined as the effective date of a reorganization plan for the Company that is confirmed by the Bankruptcy Court. The transfer of Product Rights shall be deemed terminated in the event that the Company does not exit Reorganization on or before December 31, 2010. In the event of a proposed sale of BDSI or its assets, BDSI has the right to terminate its Product Right payment obligations to the Company under the agreement upon the payment to the Company of an amount equal to the greater of: (i) Four Million Five Hundred Thousand Dollars ($4,500,000), or (ii) the fair market value of the Product Rights as determined by an independent third party appraiser. Further, if the Product Right is terminated, the warrant will be terminated if not already exercised, and, if exercised, an amount equal to the strike price will, in addition to the amount in (i) or (ii) above, be paid to the Company. A full-text copy of the Emezine Settlement Agreement is available for free at http://researcharchives.com/t/s?5490 About Accentia Biopharmaceuticals Headquartered in Tampa, Florida, Accentia Biopharmaceuticals Inc. (Nasdaq: ABPI) -- http://www.accentia.net/--is biopharmaceutical company focused on the development and commercialization of drug candidates that are in late-stage clinical development and typically are based on active pharmaceutical ingredients that have been previously approved by the FDA for other indications. The Company's lead product candidate is SinuNase(TM), a novel application and formulation of a known therapeutic to treat chronic rhinosinusitis. The Company has acquired the majority ownership interest in Biovest International Inc. and a royalty interest in Biovest's lead drug candidate, BiovaxID(TM) and any other biologic products developed by Biovest. The Company also has a specialty pharmaceutical business, which markets products focused on respiratory disease and an analytical consulting business that serves customers in the biopharmaceutical industry. Accentia Biopharmaceuticals and nine affiliates filed for Chapter 11 protection on November 10, 2008 (Bankr. M.D. Fla., Lead Case No. 08-17795). Charles A. Postler, Esq., and Elena P. Ketchum, Esq., at Stichter, Riedel, Blain & Prosser, in Tampa, Florida; and Jonathan B. Sbar, Esq., at Rocke, McLean & Sbar, P.A., represent the Debtors as counsel. Attorneys at Olshan Grundman Frome Rosenzweig, and Genovese Joblove & Battista PA, represent the official committee of unsecured creditors. The Debtors said assets totalled $134,919,728 while debts were $77,627,355 as of June 30, 2008. ACCENTIA BIOPHARMA: Laurus Master Fund Owns 9.99% of Common Stock ----------------------------------------------------------------- Laurus Master Fund, Ltd., et al., disclosed that as of December 31, 2009, they may be deemed to beneficially own shares of Accentia Biopharmaceuticals, Inc.'s common stock, par value $0.001 per share: Shares Beneficially Company Owned Percentage ------- ------------ ---------- Laurus Master Fund, Ltd. (In Liquidation) 6,455,581 9.99% PSource Structured Debt Limited 6,455,581 9.99% Laurus Capital Management, LLC 6,455,581 9.99% Valens Offshore SPV I, Ltd. 6,455,581 9.99% Valens U.S. SPV II, Corp. 6,455,581 9.99% Valens U.S. SPV I, LLC 6,455,581 9.99% Valens Capital Management, LLC 6,455,581 9.99% Chris Johnson 6,455,581 9.99% Russell Smith 6,455,581 9.99% David Grin 6,455,581 9.99% Eugene Grin 6,455,581 9.99% The CUSIP number of the Common Stock is 00430L10. The percentage of ownership is based on 58,243,115 shares of the common stock, par value $0.001 per share as of December 31, 2009, as reported by Accentia Biopharmaceuticals, Inc. on February 11, 2010. Laurus Master Fund, Ltd. is in liquidation under the supervision of the Grand Court of the Cayman Islands. The Joint Official Liquidators are Chris Johnson and Russell Smith of Johnson Smith Associates, Ltd. The JOLs have discretion over the management of the Fund and the disposition of its assets, including the securities owned by the Fund reported in this Schedule 13G, as amended. A full-text copy of Laurus Master Fund's amended Schedule 13G is available for free at http://researcharchives.com/t/s?548f Headquartered in Tampa, Florida, Accentia BioPharmaceuticals Inc. (Nasdaq: ABPI) -- http://www.accentia.net/--is biopharmaceutical company focused on the development and commercialization of drug candidates that are in late-stage clinical development and typically are based on active pharmaceutical ingredients that have been previously approved by the FDA for other indications. The Company's lead product candidate is SinuNase(TM), a novel application and formulation of a known therapeutic to treat chronic rhinosinusitis. The Company has acquired the majority ownership interest in Biovest International Inc. and a royalty interest in Biovest's lead drug candidate, BiovaxID(TM) and any other biologic products developed by Biovest. The Company also has a specialty pharmaceutical business, which markets products focused on respiratory disease and an analytical consulting business that serves customers in the biopharmaceutical industry. Accentia BioPharmaceuticals and nine affiliates filed for Chapter 11 protection on November 10, 2008 (Bankr. M.D. Fla., Lead Case No. 08-17795). Charles A. Postler, Esq., and Elena P. Ketchum, Esq., at Stichter, Riedel, Blain & Prosser, in Tampa, Florida; and Jonathan B. Sbar, Esq., at Rocke, McLean & Sbar, P.A., represent the Debtors as counsel. Attorneys at Olshan Grundman Frome Rosenzweig, and Genovese Joblove & Battista PA, represent the official committee of unsecured creditors. The Debtors said assets totalled $134,919,728 while debts were $77,627,355 as of June 30, 2008. ACE HARDWARE: Moody's Sees Sale Pact With Sears as Positive Sign ---------------------------------------------------------------- Moody's Investors Service stated that the new agreement between Ace Hardware and Sears Holdings allowing Ace to sell Craftsman products through its network of approximately 4,500+ retail stores should be viewed positively. "Craftsman is the world's largest selling tool brand, and having the ability to sell these products represents a clear competitive advantage for Ace within the hardware and home improvement segment", stated Moody's Senior Analyst Charlie O'Shea. The last rating action for Ace was the May 1, 2008 first-time assignment of the Ba3 corporate family and probability of default ratings with a stable outlook. Ace Hardware Corporation, headquartered in Chicago, Illinois, is a cooperative with over 2,900 members operating approximately 4,500 retail stores in the U.S. and over 60 foreign countries. Annual revenues for Ace are around $3.5 billion. AGE REFINING: Enduring Wants to Reclaim Delivered Oil ----------------------------------------------------- Vicke Vaughan at My San Antonio Business reports that Enduring Resources LLC wants the immediate return of, or payment for, $243,985 worth of crude oil that it delivered to Age Refining Inc. Enduring says that Age Refining received the oil on credit while it was insolvent. Age Refining said in a court filing that bankruptcy became necessary when JPMorgan Chase refused to issue more letters of credit. Without the security granted by letters of credit, suppliers wouldn't provide crude, Age said. JPM is agent for an undrawn $50 million revolving credit. Letters of credit totaling $26.6 million were undrawn when the Chapter 11 petition was filed. About Age Refining Age Refining, Inc., based in San Antonio, Texas, manufactures, refines and markets jet fuels, diesel products, solvents and other highly specialized fuels. The Company's clients cover a variety of sectors, including commercial, local municipalities and the federal government. Founded in 1991 by Al Gonzalez, AGE is a family owned and operated business in the heart of the San Antonio community. Starting on a shoe-string budget and a bushel of determination, AGE is proud to have posted over 22% growth per year since 1991. The Company filed for Chapter 11 bankruptcy protection on February 8, 2010 (Bankr. W.D. Texas Case No. 10-50501). Aaron Michael Kaufman, Esq.; Carol E. Jendrzey, Esq.; and Mark E. 7Andrews, Esq., at Cox Smith Matthews Incorporated, assist the Company in its restructuring effort. The Company listed $10,000,001 to $50,000,000 in assets and $100,000,001 to $500,000,000 in liabilities. ALLIANT TECHSYSTEMS: Fitch Affirms Issuer Default Rating at 'BB' ---------------------------------------------------------------- Fitch Ratings has affirmed Alliant Techsystems' ratings: -- Issuer Default Rating at 'BB'; -- Senior secured term loan at 'BBB-'; -- Senior secured revolver at 'BBB-'; -- Convertible senior subordinated notes at 'BB-'; -- Senior subordinated notes at 'BB-'. Approximately $1.4 billion of debt outstanding are covered by these ratings. The Rating Outlook remains Stable. ATK's ratings continue to be supported by healthy free cash flow and solid credit metrics for the rating; high levels of spending for munitions and some missile defense programs in the U.S. Department of Defense budget; potential revenue growth from the Joint Strike Fighter program; expansion of sales of commercial products; and ATK's role as a sole source provider for many of its products to the U.S. Government. The affirmed ratings assume that the Constellation program is cut from NASA's fiscal 2011 budget as the Obama administration has proposed; this termination in an incremental credit concern, but there several mitigants, as listed below. Other concerns include potential U.S. budgetary pressures in the longer term; the company's history of increasing leverage for acquisitions; a lack of diversity compared to other large and medium- sized defense contractors; the amount of revenue generated by operations in Iraq and Afghanistan; pension plan funding; and to a lesser extent, commodities exposure. The Stable Rating Outlook reflects the current high levels of defense spending, U.S. Army training requirements that should result in continued high usage of munitions, and the general level of the company's credit metrics for the rating category. The proposed termination of the Constellation program is an incremental negative for ATK's credit quality, but it is unlikely to affect the company's ratings for several reasons. First, the level of ATK's credit metrics is strong enough to support the loss of the program's future revenues if they are not replaced by other business. Second, Fitch notes that ATK may have the opportunity to pursue other revenue streams for space exploration with commercial space companies. Finally, ATK will receive some termination payments from the U.S. government if Constellation is cancelled. Fitch expects ATK to have sufficient liquidity in fiscal year 2011. At the end of the third quarter of FY2010 (3Q'10; ended Dec. 31, 2009), ATK had $728 million of liquidity which consisted of $386 million of cash on hand and $342 million available on the $500 million secured revolver. Fitch projects that ATK will have sufficient free cash flow in FY2011 to make modest acquisitions or repurchase shares; share repurchases have not been a use of cash in the first nine months of FY2010. The company does not have any debt maturities until 2011 when $300 million of convertibles are due; in 2012 the $500 million secured revolver and $265 million secured term loan are due. In addition, the company has two tranches of convertibles due 2024 (a $280 million tranche and a $200 million tranche). These are puttable to the company if the share price hits certain triggers. Historically, the company has a solid track record of cash flow generation when adjusted for discretionary pension contributions (as was done in FY2007 and already in FY2010). In FY2010, the company expects to generate free cash flow of approximately $150 million, which is below cash flow generation in recent years and the $313 million generated in FY2009. However, the projection for the fiscal year includes the $150 million pension contribution and increased working capital required to grow sales in commercial products. At the end of Dec. 31, 2008, the pension plan was underfunded by $555 million, or funded 70%. As with other pension plans, the underfunded status increased in 2008 due to deteriorating asset values. Leverage has been on the decline since FY2007 when ATK issued debt to fund its pension plan and repurchase shares, causing leverage to increase to 3.5x. At the end of fiscal 3Q'10, which ended Dec. 31, 2009, leverage declined to 2.1 times (x) versus 2.5x at the end of FY2009 and 2.9x at the end of FY2008. Though this credit metric has been improving, Fitch remains concerned about ATK's willingness to use the balance sheet for acquisitions. Changes within the NASA budget beyond the elimination of the Constellation program or for cuts in defense spending could have a negative impact on ATK. The company received 76% of its revenues from the U.S. Government in FY2009, and the U.S. Army accounted for 26% of total sales (with 12% of the total sales coming from one contract for ammunition). Sales to NASA accounted for 20% of FY2009 revenues. AMERCO: S&P Affirms 'BB' Long-Term Corporate Credit Rating ---------------------------------------------------------- Standard & Poor's Ratings Services affirmed the ratings on AMERCO, including the 'BB' long-term corporate credit rating. At the same time, S&P revised the outlook on AMERCO to stable from negative. The outlook revision reflects the stabilizing operating environment in the moving and storage segment, meaningful cost reduction, and improving credit metrics. The ratings on AMERCO reflect the company's aggressive financial profile and participation in a competitive and capital-intensive industry. The company's position as the largest consumer truck rental company in North America and its major position in self- storage partially offset these factors. AMERCO is a holding company for three operations. Its primary operating subsidiary is U-Haul International Inc. This segment includes the company's consumer truck rental operations and self- storage facilities, which account for more than 90% of AMERCO's consolidated revenues and operating profit. Other operating entities include two insurance companies, including Republic Western Insurance Co. (property and casualty), and Oxford Life Insurance Co. AMERCO also manages the self-storage properties owned or leased by SAC Holdings, a related entity controlled by Blackwater Investments Inc. which is wholly owned by Mark V. Shoen, a significant shareholder and executive officer of AMERCO. The outlook is stable. "Given the stabilizing economy, improving demand, and effective cost controls, S&P expects AMERCO's earnings and cash flow to improve over the next several quarters," said Standard & Poor's credit analyst Anita Ogbara. S&P could raise the ratings if earnings and credit metrics continue to strengthen, resulting in funds from operations to total debt in the low-20% range and debt to total capital consistently falling below 70%. "Alternatively, S&P could lower the ratings if earnings deteriorate and credit metrics weaken, resulting in FFO to total debt in the midteens percent range and debt to capital consistently above 75%," she continued. ANDERSON ENTERPRISES: Voluntary Chapter 11 Case Summary ------------------------------------------------------- Debtor: Anderson Enterprises 1312 W 6th Street Lawrence, KS 66044 Bankruptcy Case No.: 10-40212 Chapter 11 Petition Date: February 23, 2010 Court: United States Bankruptcy Court District of Kansas (Topeka) Debtor's Counsel: Justice B. King, Esq. Fisher, Patterson, Sayler & Smith 3550 S.W. Fifth Street P.O. Box 949 Topeka, KS 66601-0949 Tel: (785) 232-7761 Fax: (785) 232-6604 Email: jking@fisherpatterson.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Company says it does not have unsecured creditors who are non insiders when they filed their petition. The petition was signed by Mary Anderson, partner of the Company. ANDERSON RENTALS: Voluntary Chapter 11 Case Summary --------------------------------------------------- Debtor: Anderson Rentals, Inc. aka Anderson Rentals & Sales, Inc. 1312 West 6th Street Lawrence, KS 66044 Bankruptcy Case No.: 10-40210 Chapter 11 Petition Date: February 23, 2010 Court: United States Bankruptcy Court District of Kansas (Topeka) Judge: Janice Miller Karlin Debtor's Counsel: Justice B. King, Esq. Fisher, Patterson, Sayler & Smith 3550 S.W. Fifth Street P.O. Box 949 Topeka, KS 66601-0949 Tel: (785) 232-7761 Fax: (785) 232-6604 Email: jking@fisherpatterson.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 According to the schedules, the Company has assets of $2,065,378, and total debts of $1,782,541. The Debtor did not file a list of its 20 largest unsecured creditors when it filed its petition. The petition was signed by William A. Anderson, president of the Company. ARDENT MEDICAL: Moody's Assigns 'B2' Corporate Family Rating ------------------------------------------------------------ Moody's Investors Service assigned a B2 Corporate Family and Probability of Default Rating to Ardent Medical Services, Inc., a subsidiary of Ardent Health Services LLC. Moody's also assigned a B1 (LGD3, 37%) rating to the company's proposed credit facility, consisting of a $75 million revolving credit facility and a $400 million term loan. Moody's understands that the proceeds of the new term loan, along with available cash, will be used to repay existing senior debt and fund up to a $277 million distribution to Ardent shareholders, including private equity sponsor Welsh, Carson, Anderson & Stowe. The B2 rating reflects the significant increase in leverage associated with the payment of the distribution to shareholders. Moody's also expects that planned capital investments will likely constrain free cash flow in the near term and limit the likelihood of meaningful debt reduction. Further, anticipated reductions in Medicaid reimbursement in the company's markets is likely to result in a reduction of EBITDA and thereby limit improvement in financial metrics from current pro forma levels. While Moody's acknowledges the improvements in operations and the strength of the market position in each of the company's two markets provided by the integrated delivery systems in each, significant concentration risk constrains the rating. The stable rating outlook reflects our expectation that the company will continue to invest in growing its presence in its existing markets while focusing on maintaining and expanding margins. However, the outlook also reflects Moody's expectation that the company will have limited means by which to meaningfully improve credit metrics in the near term. The outlook also incorporates our expectation that the company will maintain a disciplined approach to acquisitions and the entrance into new markets. These ratings have been assigned. -- Corporate Family Rating, B2 -- Probability of Default Rating, B2 -- $75 million senior secured revolving credit facility, B1 (LGD3, 37%) -- $400 million senior secured term loan, B1 (LGD3, 37%) Moody's had previously maintained a rating on Ardent Health Services LLC. These ratings were withdrawn on August 18, 2005. This is the first time Moody's is assigning a rating to Ardent Medical Services, Inc. Headquartered in Nashville, Tennessee, Ardent Health Services, through its subsidiaries, operates eight acute care hospitals and other healthcare facilities in two states and a health plan in one state. The company recognized approximately $1.8 billion in revenue for the year ended December 31, 2009. ARDENT HEALTH: S&P Assigns Corporate Credit Rating at 'B' --------------------------------------------------------- Standard & Poor's Ratings Services said that it assigned its 'B' corporate credit rating to Nashville-based hospital and health plan operator Ardent Health Services Inc. In addition, S&P assigned its 'B' rating (the same as the corporate credit rating) to Ardent's proposed $400 million senior secured term loan maturing in 2016 and its $75 million revolving credit facility maturing in 2015. The recovery rating on these debt issues is '3', indicating S&P's expectation for meaningful (50%-70%) recovery in the event of payment default. The rating outlook is stable. "The speculative-grade ratings on Ardent reflect a relatively undiversified portfolio of hospitals, significant concentration of profit in one market, limited record of cash generation and an aggressive financial risk profile," said Standard & Poor's credit analyst David Peknay. Ardent operates eight acute-care hospitals and a large health plan in only two key markets, Albuquerque, N.M. and Tulsa, Okla. The Albuquerque market, which includes a health plan that generates a large percentage of the company's total revenue via member premiums, is responsible for most of its earnings. The ratings also reflect the competitive nature of these markets, the company's vulnerability to local economic circumstances, reimbursement risk tied to ongoing third-party payor efforts to limit health care cost increases, and the risks associated with managing the total health of a large health plan in one market with about 240,000 members. Over the past two years, Ardent divested facilities in Tulsa to address weak financial performance and a market share that had declined over several years. These efforts, coupled with large investments to improve its position in its markets in several key clinical areas such as cardiac and women's services, the divestiture of its highly unprofitable medical group in Albuquerque, and other operating improvements like reducing contract labor costs have been instrumental factors contributing to a dramatic improvement in its profitability the past two years. From 2007 to 2009, its EBITDA margin increased about 200 basis points. Still, the company's pending payment of a large distribution to its shareholders and transaction costs associated with the refinancing of all its debt is reflective of an aggressive financial risk profile. Given S&P's view that the company will likely channel its earnings toward activities to improve its business risk profile (possibly through more aggressive acquisition activity), S&P does not believe leverage will substantially decline over the long term. S&P expects lease- adjusted debt to EBITDA to be about 4x upon the completion of the transaction. Ardent remains vulnerable to changes in reimbursement during this extended period of economic weakness. In fact, a recent Medicaid cut in New Mexico will hurt Ardent's health plan in Albuquerque. Although any significant health reform effort is several years away, the effect on reimbursement will not likely be favorable for hospital operators because a key goal is to better control health care spending. Given the tenor of Welsh's 2001 investment, it is possible that the company could change ownership well before the implementation of any significant health reform efforts. ARVINMERITOR INC: Commences Tender Offer for Up to $175MM of Notes ------------------------------------------------------------------ ArvinMeritor, Inc. disclosed the commencement of a tender offer for up to $175 million aggregate principal amount of ArvinMeritor's 8-3/4% Notes due 2012 in the manner described below. The total outstanding principal amount of the notes included in the offer is approximately $276 million. ArvinMeritor will conduct the offer in accordance with terms and conditions described in its Offer to Purchase dated Feb. 23, 2010. The offer will expire at 11:59 p.m. New York City time on Mar. 22, 2010, unless extended or earlier terminated (the "Expiration Date"). The aggregate principal amount of notes that may be purchased in the offer will not exceed $175 million. To the extent the aggregate principal amount of notes tendered and not withdrawn pursuant to the offer exceeds this cap, ArvinMeritor will accept notes for purchase on a pro rata basis in the manner described in the Offer to Purchase. The Total Consideration for each $1,000 principal amount of notes tendered pursuant to the offer will be $1,065. The Tender Offer Consideration for each $1,000 principal amount of notes tendered pursuant to the offer will be $1,035, which consists of the Total Consideration minus the Early Tender Payment (which is $30.00 for each $1,000 principal amount of notes). ArvinMeritor intends to fund the purchase of the notes from the proceeds of its pending offering of notes due 2018. Holders of notes that are validly tendered and not validly withdrawn at or before 5:00 p.m. New York City time on the Early Tender Date of Mar. 8, 2010 will receive the Total Consideration for their notes that are accepted for purchase. Holders of notes that are validly tendered after 5:00 p.m. New York City time on the Early Tender Date and at or before 11:59 p.m. New York City time on the Expiration Date will receive the Tender Offer Consideration for their notes that are accepted for purchase, which is equal to the Total Consideration minus the Early Tender Payment. Holders who tender notes at or before 5:00 p.m. New York City time on the Early Tender Date can withdraw tenders at or before 5:00 p.m. New York City time on the Early Tender Date, but not thereafter. Holders who tender notes after 5:00 p.m. New York City time on the Early Tender Date cannot withdraw their tenders. In addition to any consideration received, holders who tender notes that are accepted for payment in the offer will be paid any accrued and unpaid interest calculated up to but not including the settlement date. The settlement date is expected to be Mar. 23, 2010, which is one day after the Expiration Date or promptly thereafter. BofA Merrill Lynch, J.P. Morgan, Citi and RBS are the dealer managers for the offer. Global Bondholder Services Corporation is the Information Agent and Depositary for the offer. This news release is neither an offer to purchase nor a solicitation of an offer to sell the securities. The offer is made only by the Offer to Purchase dated Feb. 23, 2010, and the information in this news release is qualified by reference to the Offer to Purchase. Persons with questions regarding the offer should contact BofA Merrill Lynch at (888) 292-0070 (U.S. toll free) or (980) 388-9217 (collect), J.P. Morgan at (866) 834-4666 (U.S. toll free) or (866) 834-3424 (collect), Citi at (800) 558-3745 (U.S. toll free) or (212) 723-6106 (collect) or RBS at (877) 297-9832 (U.S. toll free) or (203) 897-6145 (collect). Requests for documents should be directed to Global Bondholder Services Corporation at (866) 540- 1500 or (212) 430-3774 (collect). About ArvinMeritor Inc. Based in Troy, Michigan, ArvinMeritor, Inc. (NYSE: ARM) -- http://www.arvinmeritor.com/-- is a premier global supplier of a broad range of integrated systems, modules and components to the motor vehicle industry. The company marks its centennial anniversary in 2009, celebrating a long history of 'forward thinking.' The company serves commercial truck, trailer and specialty original equipment manufacturers and certain aftermarkets, and light vehicle manufacturers. As of September 30, 2009, ArvinMeritor had $2.508 billion in total assets and shareowners' deficit of $1.277 billion. As of September 30, 2009, short-term debt was $97 million; Accounts payable was $674 million; Other current liabilities were $411 million; Liabilities of discontinued operations were $107 million; Long-term debt was $1.080 billion; Retirement benefits were $1.077 billion; Other liabilities were $310 million, and Minority interests were $29 million. * * * According to the Troubled Company Reporter on Jan. 25, 2010, Moody's Investors Service affirmed the Corporate Family and Probability of Default ratings of ArvinMeritor, Inc., at Caa1. In a related action, the rating of the senior secured revolving credit facility was affirmed at B1, and the ratings of the senior unsecured notes were affirmed at Caa2. ArvinMeritor's Speculative Grade Liquidity Rating was raised to SGL-3 from SGL-4. The rating outlook is changed to stable. ARVINMERITOR INC: Fitch Upgrades Issuer Default Rating to 'B-' -------------------------------------------------------------- In light of ArvinMeritor's announcement of proposed capital market transactions, Fitch Ratings has upgraded ARM's Issuer Default Rating, secured bank facility ratings, and unsecured notes ratings: -- IDR to 'B-' from 'CCC'; -- Senior secured bank facility to 'BB-/R1' from 'B+/RR1'; -- Senior unsecured notes to 'CC/RR6' from 'C/RR6'. Fitch also expects to assign a 'CC/RR6' rating to ARM's new senior unsecured notes due 2018. The Outlook is Stable. On a pro forma basis, approximately $1.0 billion of debt outstanding is covered by the ratings. The ratings actions assume that the company successfully executes the announced transactions. The upgrade is driven by the extension of debt maturities and a modest improvement in the cash position which Fitch believes will provide ARM sufficient time to complete its restructuring. Other factors supporting the upgrade include Fitch's comfort in ARM's ability to increase profits to reduce leverage in 2010 as a result of some stabilization in end markets and fiscal first quarter performance. The company plans to offer equity, new notes, tender for a portion of existing notes, and amend and extend its revolver (in exchange for reduced commitment from lenders). Although the amount of the revolver is to be reduced, Fitch believes it is more than adequate for the company given its smaller size following the divestures of most of the Light Vehicle System assets. The ratings are supported by the plan to extend maturities, the company's access to the capital markets, progress in divesting businesses in the LVS segment, expectations that cash costs associated with divesting the remaining LVS assets appear manageable, comfort in ARM's ability to remain covenant compliant going forward, and expectations of a modest global recovery for commercial trucks in 2010. The Stable Outlook reflects Fitch's expectations that commercial truck production should improve in fiscal year 2010 and that cost- cutting efforts at the company should benefit margins particularly if volumes improve from the historically low levels seen in FY09. These factors along with the current liquidity position and the debt maturity schedule support the current ratings. Before accounting for the proposed transactions, liquidity as of Dec. 31, 2009, was $710 million, which includes availability of $605 million on the $666 million revolver (accounts for the use of $26 million for letters of credit) and cash on hand of $105 million. On a pro forma basis, Fitch calculates that liquidity would have been increased by approximately $70 million. Fitch estimates that pro forma leverage would have been approximately 6.7 times (x) which is significantly lower than the 12.4x ratio at the end of FY 2009. Fitch expects leverage to continue to improve in FY 2010. Although free cash was an outflow of $414 million in FY 2009, Fitch expects to see only a modest outflow in FY 2010. Credit concerns are focused on the company's ability to execute its plans to divest all remaining LVS businesses with cash outflows in line with expectations, the risk to commercial truck volumes in 2010, particularly in North America given changes in emission standards, high leverage, and Fitch's expectations for negative cash flows into FY 2010. The underfunded pension is also a concern. As of the end of FY 2009, the U.S. pension plan was 69% funded, or $321 million underfunded. The Recovery Ratings reflect Fitch's expectations under a scenario in which the distressed enterprise value is allocated to various debt classes. The secured lenders RRs remain 'RR1', which implies a 91%-100% recovery. The RR for unsecured lenders remains 'RR6', which implies a recovery in the range of 0%-10% in the event of a default. Planned changes to the capital structure include: -- Amending and extending the secured revolving credit facility. This will become effective when ARM completes a debt and/or equity offering equal to or above $275 million. The size of the current revolver is $666 million and commitments expire in June 2011. Once the amendment becomes effective, the size will be reduced to $539 million until June 2011. If the company succeeds with tendering for at least $150 million of the 2012 notes, the commitment will be for $396 million from June 2011 until January 2014. If not, the commitment of $396 million will extend from June 2011 until December 2011. The company's amended revolver will also be restricted by a borrowing base. -- Issuing $250 million of eight-year senior unsecured notes due 2018; the new notes are to rank pari passu with the existing senior unsecured notes. -- Issuing 15 million common shares of stock; an extra 2.25 million shares can be issued. -- Proceeds are to be used to tender for up to $175 million of the 2012's, to pay down the revolver and the accounts receivable securitization program, and the balance will be cash for the balance sheet which will be used for general corporate purposes. ARVINMERITOR INC: Moody's Affirms 'Caa1' Corporate Family Rating ---------------------------------------------------------------- Moody's Investors Service affirmed the Corporate Family and Probability of Default ratings of ArvinMeritor, Inc., at Caa1. In a related action, Moody's assigned a B1 rating to the amended senior secured revolving credit facility, and assigned a Caa2 rating to the new senior unsecured notes due 2018 offered in exchange for the existing unsecured notes due 2012. Moody's also affirmed the rating for any stub portion of unsecured notes due 2012 not tendered; these notes will continue to enjoy the same priority in the company's capital structure along with their existing guarantees and covenants. ArvinMeritor's Speculative Grade Liquidity Rating was affirmed at SGL-3. The rating outlook is changed to positive. ArvinMeritor announced an offering of $250 million of new senior unsecured notes and a common stock offering of approximately 15 million shares (expected to raise about $150 million) as part of a series of transactions intended to strengthen its balance sheet. The net proceeds from the note offering will be used to repurchase up to $175 million of the company's 8.75% unsecured notes due 2012 and for general corporate purposes. The net proceeds from the common stock offering will be used to repay amounts outstanding under the revolving credit facility and U.S. accounts receivable securitization program and for general corporate purposes. The transactions will satisfy a requirement for the extension of the recently amended bank credit facility that the company raise aggregate proceeds of at least $275 million from new debt or equity issues and redeem at least $150 million in the aggregate principal amount of its 8-3/4% senior notes due 2012. As a result, ArvinMeritor's recent amendment and extension of its senior secured revolving credit facility to January 2014 will become effective. The amendment, among other items, will reduce the committed amount of the facility to $539 million through June 2011 and then to $396 million until its maturity. The combination of the above actions is expected to bolster the company's operating flexibility over the intermediate-term by addressing the June 2011 senior secured revolving credit facility maturity. The enhanced liquidity will balance continued weak credit metrics over the near-term which is reflected in the assigned Caa1 Corporate Family Rating. The declining demand for commercial vehicles appears to have abated. A more stable profile for commercial vehicle build rates over the coming quarters appears to be supported by pre-2010 emissions compliant engines purchased in late 2009. Recent upturns in freight volumes could support modest improvement in commercial vehicle demand over the intermediate term. However, Moody's continues to expect a recovery in commercial vehicle orders to be delayed until late 2010, as underutilized fleets and tight credit markets limit growth in commercial vehicle purchases over the near-term. The change in outlook to positive reflects Moody's view that ArvinMeritor's more stable liquidity profile and the potential for modest improvement in operating performance could lessen the company's credit risk over the coming months. This liquidity profile also should provide sufficient operating flexibility for the company to improve its operating margin and credit metrics into its fiscal 2011 when global economic conditions are expected to recovery more substantially. About 58% of the company's fiscal 2009 commercial vehicle revenues are from North America which is experiencing stabilizing economic conditions. Europe, which represented about 22% of the company commercial vehicle revenues, is expected to continue to experience challenging economic conditions into 2010. For the LTM period ending December 31, 2009, ArvinMeritor's EBIT/Interest coverage (including Moody's standard adjustments) approximated 0.6x. ArvinMeritor's Speculative Grade Liquidity rating of SGL-3 continues to reflect adequate liquidity over the next twelve months. As of December 31, 2009, the company had $105 million of cash on hand. While slightly improved from the prior quarter, Moody's anticipates that free cash flow generation will be challenged by slow recovery in industry conditions over the coming quarters along with the company's debt service costs and capital reinvestment needs. As of December 31, 2009, the company's revolving credit facility had approximately $35 million of funding with approximately $26 million of LCs outstanding. While total commitments under the new revolving credit facility are expected to reduce to about $396 million by June 2011, Moody's expects this level to be sufficient to support operating flexibility given improvements in working capital management. The principal financial covenant will continue to be a senior secured leverage test at each quarter-end and amended test levels should continue to provide sufficient cushion to access the majority of the facility. The amended revolving credit will incorporate an availability limitation based on available collateral securing the facility. The revolving credit is secured by a first lien on certain assets of the company, primarily consisting of eligible domestic U.S. accounts receivable, inventory, plant, property and equipment, intellectual property and the company's investment in all or a portion of certain of its wholly-owned subsidiaries. Negative covenants under the revolver limit both annual and cumulative amounts of asset sales. Future events that have the potential to improve ArvinMeritor's ratings include improving production levels in the company's global commercial vehicle end-markets, or further enhancement of operating margins. Higher ratings could arise from the above, consistent free cash flow generation, or EBIT/interest improving to above 1.0x. Future events that have the potential to drive ArvinMeritor's outlook or ratings lower include further declines in global commercial vehicle production combined with a failure to successfully implement offsetting restructuring actions, or deteriorating liquidity. Lower ratings could arise from the above considerations, or if EBIT/Interest coverage is sustained at or below 0.5x times. Ratings assigned: -- Amended and extended senior secured bank debt, at B1 (LGD1, 5%); -- $250 new senior unsecured notes, Caa2 (LGD4, 60%); -- Shelf unsecured notes, at (P)Caa2 Ratings affirmed: -- Corporate Family Rating, at Caa1; -- Probability of Default, at Caa1; -- Existing senior unsecured notes not subject to tender offer, at Caa2 (LGD4, 60%); -- Untendered senior unsecured notes due 2012 Caa2 (LGD4, 60%); -- Speculative Grade Liquidity Rating, at SGL-3 Rating to be withdrawn upon completion of certain terms under the amendment to the secured bank debt: -- Existing senior secured bank debt, at B1 (LGD1, 9%) The last rating action for ArvinMeritor was on January 21, 2010, when the Corporate Family Rating was affirmed and the rating outlook changed to stable. ArvinMeritor, Inc., headquartered in Troy, Michigan, 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. ARVINMERITOR INC: S&P Assigns 'CCC-' Rating on $250 Mil. Notes -------------------------------------------------------------- Standard & Poor's Ratings Services assigned a 'CCC-' issue-level rating and a '6' recovery rating to ArvinMeritor Inc.'s proposed $250 million senior unsecured notes. The ratings on ArvinMeritor reflect the company's highly leveraged financial risk profile and a vulnerable business risk profile. In Standard & Poor's view, the company's liquidity should improve because the proposed debt refinancing pushes back a significant portion of senior notes due 2012 to 2018, and the equity issuance bolsters liquidity. Cash and availability under its revolving credit facility appear sufficient, taking into account S&P's projection of cash use in 2010 and debt maturities over the next year. S&P believes, however, that truck sales need to consistently rise to support earnings and cash generation levels in line with a higher rating. In addition, although the company sold most of its cash-draining chassis businesses in 2009, its light-vehicle systems business still makes up about 25% of its revenue, and this remains a concern. "Given the dramatic global decline in commercial-vehicle demand in 2009, S&P believes sales in North America and Europe could recover slightly in 2010, leading to reduced cash use and improved EBITDA," said Standard & Poor's credit analyst Lawrence Orlowski. S&P could raise the ratings if demand persists around the world and the company successfully minimizes its cash use from the remaining LVS businesses or completes an LVS sale without using significant liquidity. "For example, S&P could raise the ratings if S&P believed the company could consistently generate free operating cash flow," he continued. The outlook is positive. S&P could revise the outlook to stable if commercial-truck sales fail to eventually recover, or if weak LVS performance prevents liquidity from improving. S&P estimates that ArvinMeritor needs to sustain annual EBITDA of roughly $150 million to cover interest expense and reasonable capital spending. For instance, S&P estimates that to meet minimum cash requirements, gross margins would have to exceed 9% consistently. S&P would be concerned if weaker-than-expected earnings or cash flow generation strained liquidity significantly. ASARCO LLC: Claim Objection Deadline Extended to April 12 --------------------------------------------------------- Mark A. Roberts of Alvarez and Marsal North America LLC, the Reorganized Debtors' Plan Administrator, asks the Court to extend the deadline to object to claims for an additional 60 days, through and including April 12, 2010, pursuant to Section 14.2 of the Confirmed Plan of Reorganization and Rule 9006(b)(1)(1) of the Federal Rules of Bankruptcy Procedure. As the Chapter 11 Plan for the Debtors was confirmed on November 13, 2009, the initial deadline for the Plan Administrator and Reorganized ASARCO to object to Claims was February 11, 2010. Out of an abundance of caution, the Plan Administrator seeks an extension of the claims objection deadline to ensure that no Disputed Claims that should be objected to are inadvertently allowed by the passage of time, Dion W. Hayes, Esq., at McGuirewoods LLP, in Richmond, Virginia, tells Judge Schmidt. The requested extension will allow the Plan Administrator additional time to review the approximately 444 remaining unresolved Claims filed or scheduled in the Debtors' bankruptcy cases to determine whether any additional objections should be filed, Mr. Hayes asserts. He notes that the Plan Administrator will continue to make distributions on Claims, as has been done routinely since the Plan Effective Date, promptly after the Claims become Allowed Claims. Mr. Hayes assures the Court that the Plan Administrator and Reorganized ASARCO will not use the requested extension to delay payment to Claimants, who are appropriately entitled to distributions under the Plan. He adds that an extension will not prejudice the holders of Disputed Claims because under the Plan and Confirmation Order, Postpetition Interest continues to accrue and will be paid on the Allowed Amount, if any, of a Disputed Class 3 Claim, if and when it becomes an Allowed Claim. * * * Judge Schmidt grants the Plan Administrator's request. About ASARCO LLC Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. ASARCO LLC filed for Chapter 11 protection on August 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). Attorneys at Baker Botts L.L.P., and Jordan, Hyden, Womble & Culbreth, P.C., represented the Debtor in its restructuring efforts. On December 9, 2009, Grupo Mexico, S.A.B. consummated the Chapter 11 plan that it sponsored for Asarco LLC. The Plan, which was confirmed both by the bankruptcy and district courts, reintegrated Asarco LLC back to parent Grupo Mexico concluding the four-year Chapter 11 proceeding. Bankruptcy Creditors' Service, Inc., publishes ASARCO Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by ASARCO LLC and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) ASARCO LLC: Grupo Mexico Confident to Prevail vs. Sterlite Appeal ----------------------------------------------------------------- Grupo Mexico, S.A.B. DE C.V., is confident that it will prevail against the appeal filed by Sterlite (USA), Inc., and Sterlite Industries (India) Ltd. on District Judge Andrew S. Hanen's Memorandum Opinion and Order of Confirmation and Injunction entered on November 13, 2009, AMM.com reports. The United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, AFL-CIO, also filed an appeal on the Confirmation Order. "I think we are definitely over the Asarco situation," Daniel Muniz, told investors when asked during a conference call about Sterlite's appeal, Anne Riley of AMM reports. Mr. Muniz is Grupo Mexico's chief financial officer. To recall, Grupo Mexico and Sterlite engaged in a widely reported legal battle over the control of ASARCO LLC's business. The District Court and the Bankruptcy Court both agreed separately that the Grupo Mexico/Parent's Plan was best for the Debtors. The Plan became effective on December 9, 2009. About ASARCO LLC Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. ASARCO LLC filed for Chapter 11 protection on August 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). Attorneys at Baker Botts L.L.P., and Jordan, Hyden, Womble & Culbreth, P.C., represented the Debtor in its restructuring efforts. On December 9, 2009, Grupo Mexico, S.A.B. consummated the Chapter 11 plan that it sponsored for Asarco LLC. The Plan, which was confirmed both by the bankruptcy and district courts, reintegrated Asarco LLC back to parent Grupo Mexico concluding the four-year Chapter 11 proceeding. Bankruptcy Creditors' Service, Inc., publishes ASARCO Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by ASARCO LLC and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) ASARCO LLC: Plainfield Insists Add'l Interest Request Timely ------------------------------------------------------------ Plainfield Special Situations Master Fund Limited asks the Court to deem its request for payment of additional postpetition interests timely filed or, in the alternative, grant it leave to file its Section 4.4 Motion under Rule 9006 of the Federal Rules of Bankruptcy Procedure. Although the terms of the Court's scheduling order regarding payments of postpetition interests have been made applicable to the Plainfield's request, which is a motion under Section 4.4 of the Confirmed Plan of Reorganization, the Plan Administrator has asserted, in an e-mail correspondence, that Plainfield's request is not timely and Plainfield is required to file a motion for leave to file the request, relates Mark E. MacDonald, Esq., at MacDonald + MacDonald, P.C., in Dallas, Texas. Plainfield disagrees with that position, but in an abundance of caution, has asked the Court to Court determine, as a threshold matter, whether its request is timely. The Plan Administrator has agreed to allow certain general unsecured creditors of ASARCO until as late as January 25, 2010, to file Section 4.4 Motions, seeking payment of Postpetition Interest at a rate other than the federal judgment rate provided under the Plan, Mr. MacDonald relates. He notes that Plainfield filed its Section 4.4 Motion on January 22, 2010, but the Plan Administrator has not, however, agreed to apply the same January 25 deadline to Plainfield's request as it has for other general unsecured creditors. The Plan Administrator must apply that same deadline uniformly to all creditors within Class 3, including Plainfield, Mr. MacDonald argues. He asserts that no prejudice will result to the Plan Administrator or Reorganized ASARCO if all Section 4.4 Motions filed on or before January 22 or January 25 -- and not just those handpicked by the Plan Administrator or Reorganized ASARCO -- are deemed timely. Plan Administrator Objects The Court should deny Plainfield's request because its own pleadings indicate that it was well-aware of the impending Section 4.4 Motion deadline well before the Plan's Effective Date and it has failed to offer any excuse for its conceded neglect, Plan Administrator Mark A. Roberts contends. Even after learning of its mistake, Plainfield waited a total of 31 days after the Section 4.4 Motion deadline to file its request, Mr. Roberts points out. Plainfield unsuccessfully attempted to obtain an extension of the Court's deadline, he notes, and then waited another 17 days to present the issue to the Court. "Plainfield's own actions are the best evidence that its neglect is not excusable," Mr. Roberts argues. He points out that granting the request would substantially prejudice Reorganized ASARCO in a number of ways, including the fact that Plainfield's claim of nearly $1 million in and of itself is substantial and burdensome and will require an expenditure of time and resources to defend against, and potentially pay, when Plainfield inexcusably missed the Section 4.4 Motion deadline. ASARCO LLC joins in the Plan Administrator's objection to Plainfield's request. About ASARCO LLC Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. ASARCO LLC filed for Chapter 11 protection on August 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). Attorneys at Baker Botts L.L.P., and Jordan, Hyden, Womble & Culbreth, P.C., represented the Debtor in its restructuring efforts. On December 9, 2009, Grupo Mexico, S.A.B. consummated the Chapter 11 plan that it sponsored for Asarco LLC. The Plan, which was confirmed both by the bankruptcy and district courts, reintegrated Asarco LLC back to parent Grupo Mexico concluding the four-year Chapter 11 proceeding. Bankruptcy Creditors' Service, Inc., publishes ASARCO Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by ASARCO LLC and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) ASARCO LLC: Reaches Deal with Union on 1-Year Extension of CBA -------------------------------------------------------------- ASARCO LLC's miners and Grupo Mexico, S.A.B. DE C.V., have agreed to extend their existing contract for one more year, through and including June 30, 2011, Reuters reports. "We have reached an agreement on the extension which we offered. This is good news," Grupo Mexico's executive, Juan Rebolledo, told Reuters. As previously reported, Asarco Incorporated and Americas Mining Corporation informed the U.S. Bankruptcy Court for the Southern District of Texas that they have caused ASARCO LLC, as the employer of the employees covered under the existing collective bargaining agreement, to make a counter proposal to the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union AFL-CIO. The counter proposal contemplates the (i) extension of the "in place" collective bargaining agreement by one year, and (ii) appointment of one person to serve on the Board of Directors of ASARCO LLC from the date of acceptance of the CBA through the extended term of the CBA. USW district official, Manny Armenta, however, declined to comment on prospects for a longer-term contract, according to The Arizona Daily Star. "We'll have to see where everything is, in time," Mr. Armenta was quoted by the Daily Star as saying. According to the report, the Union's master contract covers about 1,700 members of the USW, the International Brotherhood of Electrical Workers, the Teamsters and the International Union of Operating Engineers. About ASARCO LLC Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. ASARCO LLC filed for Chapter 11 protection on August 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). Attorneys at Baker Botts L.L.P., and Jordan, Hyden, Womble & Culbreth, P.C., represented the Debtor in its restructuring efforts. On December 9, 2009, Grupo Mexico, S.A.B. consummated the Chapter 11 plan that it sponsored for Asarco LLC. The Plan, which was confirmed both by the bankruptcy and district courts, reintegrated Asarco LLC back to parent Grupo Mexico concluding the four-year Chapter 11 proceeding. Bankruptcy Creditors' Service, Inc., publishes ASARCO Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by ASARCO LLC and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) ATLANTIS SYSTEMS: Has Deal on Comvest Debt-to-Equity Conversion --------------------------------------------------------------- Atlantis Systems Corp. has negotiated a debt to equity conversion and an increased revolving facility with its principal lender ComVest Capital, LLC. These amendments formalize the ad hoc over-advances made to date by ComVest Capital, LLC and CEO Capital Corporation and provide for an entitlement to a US$1.5million over-advance facility to sit on top of the existing US$4 million revolving line that has been in place pursuant to the Revolving Credit and Term Loan Agreement with ComVest dated April 30, 2008 (the "Original ComVest Agreement"). Substantially all of such facility has already been advanced. As part of this amending transaction, Atlantis has procured the removal of the Borrowing Base and EBITDA financial test covenants (which covenants Atlantis has been in perpetual breach since 2008) contained in the Original ComVest Agreement and Atlantis has procured an extension of the revised facilities to April 30, 2011. As part of this amending transaction, the US$2.6 million term facility advanced in April 2008 will be converted to common shares at $0.02 per share, resulting in the issuance of 139,386,000 additional Common Shares. The effect of the transaction is that interest expense will be substantially reduced, and Atlantis will have eliminated the financial test covenant defaults for the balance of the extended term of the loan facilities. ComVest Capital, LLC will hold approximately 70% of the outstanding Common Shares on a fully-diluted basis and CEO Capital Corporation will hold approximately 10% of the outstanding Common Shares on a fully-diluted basis. "I am very pleased with this announcement and especially the ongoing support of ComVest" said Mark Rivers, Chairman of the Board. "It demonstrates support by our Bankers during difficult times, as well as confidence in the team we have assembled over the last 18 months to rebuild Atlantis. This has been echoed by our customers as we have nearly doubled our backlog in the last twelve months, during the company's worst economic condition in many years. As we continue to rebuild this company, we are winning the confidence of senior talent in the industry with some very strong, recent senior appointments. This recapitalization takes away the stigma and pressure of constantly being in default. It transforms our Bankers into owners, which ensures our ability to continue to bridge the business. As we ramp up our business to service the growth we are experiencing, it strengthens our balance sheet, reduces our interest costs and preserves a stake for our loyal shareholders during a time when there were very limited options available to the company. This is a significant accomplishment, and is the result of the resolve of our Board, our Management, our Staff and our two primary funders. This lays the foundation for a successful future" CEO Capital Corporation has provided approximately half of the interim over-advances received by Atlantis to date and it will participate to that extent in the new over-advance facility. CEO Capital Corporation, is a company in which Mark Rivers, the Chairman of the Board of Atlantis is a director, officer and significant shareholder. The terms of this amending and recapitalization transaction are conditional upon shareholder approval by April 30, 2010, Atlantis remaining in compliance with the terms of the loan facilities other than the financial test covenants as well as final approval of the NEX. Notice of a Special Meeting of shareholders to approve the transaction has been posted on Sedar. Those shareholders who hold shares as at February 11, 2010, the Record Date, will be eligible to vote at the Meeting. About Atlantis Systems Atlantis Systems (CA:AIQ) -- http://www.atlantissi.com/-- uses its core capabilities in simulation-aided design and engineering and e-learning, combined with various technology tools, to help customers in military aviation, civil aviation and nuclear energy ensure the feasibility, capability, and effective utilization of their complex assets. * * * As reported in the Troubled Company Reporter on July 21, 2009, Atlantis Systems Corp. reports that on July 13, 2009, the TSX announced they will be de-listing AIQ stock effective August 11, 2009. This means that as of that date AIQ stock will no longer be traded on the TSX. B&W INVESTMENTS: Voluntary Chapter 11 Case Summary -------------------------------------------------- Debtor: B&W Investments 650 Town Center Dr #1300 Costa Mesa, CA 92626 Bankruptcy Case No.: 10-12174 Chapter 11 Petition Date: February 23, 2010 Court: United States Bankruptcy Court Central District of California (Santa Ana) Judge: Erithe A. Smith Debtor's Counsel: Jeffrey S. Benice, Esq. 650 Town Center Drive, Ste. 1300 Costa Mesa, CA 92626 Tel: (714) 641-3600 Fax: (714) 641-3604 Email: jsb@jeffreybenice.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Company says it does not have unsecured creditors who are non insiders when they filed their petition. The petition was signed by Kenny X. Wong, partner of the Company. BEDFORD COMMUNICATIONS: Filed for Chapter 11 in New York -------------------------------------------------------- Bedford Communications Inc. filed for Chapter 11 protection in the U.S. Bankruptcy Court for the Southern District of New York, Crain's New York Business reported. Bedford Communications Inc. is the Manhattan based parent of Laptop magazine. The Company says debts are between $1 million and $10 million. The Company owes $900,000 to World Color (USA) Corp. and $800,000 to Gould Paper Corp., Mr. Flamm says. The Company has blamed the filing on the economy and media's revenue woes that have created pressures and cash flow issues. BELDEN INC: Moody's Affirms Corporate Family Rating at 'Ba1' ------------------------------------------------------------ Moody's Investors Service affirmed Belden, Inc.'s corporate family rating and probability of default rating at Ba1, senior secured revolving facility at Baa1, and senior subordinated notes at Ba2. The rating outlook remains negative, reflecting Belden's weak performance during the downturn, with revenues declining 29% in fiscal year 2009, and the challenges the company faces in restoring its revenues and credit metrics to pre-recession levels. The company moved quickly to reduce its cost structure to accommodate the lower sales volume, resulting in an adjusted operating margin of 8.5% in the December quarter compared to 4.4% in the prior year quarter. We expect Belden to restore margins to historical levels in the high single digits in 2010, but we believe revenues will continue to remain weak compared to 2008 levels. While the Ba1 rating incorporates the cyclical nature of the company, a prolonged period of weak global demand may have a more severe impact on Belden's profitability and credit metrics than contemplated in the current rating. The Ba1 CFR continues to reflect Belden's leading positions within segments of the enterprise and industrial cabling and connectivity product markets and the company's significant geographic and end customer diversification. Belden's leverage levels are currently elevated in relation to prior operating periods and to Ba1-rated manufacturing peers, with leverage of 4.3x (Moody's adjusted and pro forma for restructuring activities) for the LTM period ended September 2009. Management's continued focus on reducing costs should bring leverage below 3.5x by the end of fiscal year 2010 provided the business shows modest recovery. The company has been able to maintain its Ba1 rating through the downturn due to its strong cash balances ($309 million as of December 2009) and cash- generating capabilities. Maintaining substantial cash balances will continue to be critical to maintaining the Ba1 rating. The ratings could face downward pressure if Belden fails to demonstrate sustainable improvement in operating performance as a result of the restructuring initiatives, which the company expects to yield savings of $56 million in 2010. In particular, downward pressure could occur if leverage remains above 3.5x (Moody's adjusted) at December 2010 or if Belden's cash balance declines significantly. These ratings were affirmed and assessments revised: * Corporate Family Rating -- Ba1 * Probability of Default Rating -- Ba1 * $250 million Senior Secured Revolver due 2013 -- Baa1 (LGD1, 6%) * $350 million Senior Subordinated Notes due 2017 -- Ba2, assessment revised to (LGD4, 64%) from (LGD4, 60%) * $200 million Senior Subordinated Notes due 2019 -- Ba2, assessment revised to (LGD4, 64%) from (LGD4, 60%) The rating outlook is negative. The last rating action was on June 23, 2009, when Moody's rated Belden's new 10-year subordinated debt issuance Ba2, revised the rating on the company's secured revolver to Baa1 from Baa2, and affirmed the Ba1 CFR and negative outlook. Belden Inc. is a leading designer and manufacturer of connectivity and signal transmission products for the global network communication and specialty electronic marketplaces with trailing twelve month revenues of approximately $1.4 billion. The company is headquartered in Saint Louis, Missouri. BERNARD MADOFF: SIPC Says Net Equity Calculation is Correct ----------------------------------------------------------- Three investors who lost money in Bernard Madoff's Ponzi scheme filed a fraud lawsuit in New Jersey federal court against the president and directors of the Securities Investor Protection Corp. to try to boost the amount of reimbursements to victims. Stephen Harbeck, president of the SIPC, said in a statement, "From the outset of the Bernard L. Madoff Investment Securities LLC (Madoff) liquidation proceeding, the Securities Investor Protection Corporation has made it clear that our No. 1 goal is to make sure that every eligible Madoff investor receives every penny that he is or she is entitled to receive per the recovery process. "We have a great deal of empathy for the Madoff victims. That is why we have worked around the clock for more than a year to expedite this matter despite the unprecedented complexities arising from the web of deceit spun by Mr. Madoff. Our concern for the victims was also the reason why we worked with Irving H. Picard, the court-appointed trustee for the Madoff liquidation, to establish a special hardship procedure for particularly hard-hit victims requiring special attention. "That is why we are disappointed to see that certain attorneys are exploiting the plight of these victims to incorrectly direct their anger and frustration at SIPC. Sadly, this frivolous litigation will have the effect of making it harder for SIPC to focus all of its time and attention on aiding the Madoff victims. "That being said, SIPC is not now and never was a FDIC-like 'insurance' entity. "Regarding the question of 'net equity', which the United States Bankruptcy Court for the Southern District of New York is now weighing, we firmly believe that the calculation being used by Irving H. Picard, the court-appointed trustee for the liquidation of Bernard L. Madoff Investment Securities LLC of New York, NY, is correct. "This determination is completely consistent with past precedent on the matter. "SIPC has filed two extensive briefs with the Court, which explain our position in detail. At this time, we are awaiting the court's ruling on the matter. We look forward to the decision resolving this matter." SIPC's primary brief in the United States Bankruptcy Court for the Southern District of New York proceeding can be found at: http://www.sipc.org/pdf/519_Memorandum_of_Law-1.pdf About SIPC The Securities Investor Protection Corporation is the U.S. investor's first line of defense in the event a brokerage firm fails, owing customer cash and securities that are missing from customer accounts. SIPC either acts as trustee or works with an independent court-appointed trustee in a brokerage insolvency case to recover funds. About Bernard L. Madoff Bernard L. Madoff Investment Securities LLC and Bernard L. Madoff orchestrated the largest Ponzi scheme in history, with losses topping US$50 billion. On December 15, 2008, the Honorable Louis A. Stanton of the U.S. District Court for the Southern District of New York granted the application of the Securities Investor Protection Corporation for a decree adjudicating that the customers of BLMIS are in need of the protection afforded by the Securities Investor Protection Act of 1970. The District Court's Protective Order (i) appointed Irving H. Picard, Esq., as trustee for the liquidation of BLMIS, (ii) appointed Baker & Hostetler LLP as his counsel, and (iii) removed the SIPA Liquidation proceeding to the Bankruptcy Court (Bankr. S.D.N.Y. Adv. Pro. No. 08-01789) (Lifland, J.). On April 13, 2009, former BLMIS clients filed an involuntary Chapter 7 bankruptcy petition against Bernard Madoff (Bankr. S.D.N.Y. 09-11893). The case is before Hon. Burton Lifland. The petitioning creditors -- Blumenthal & Associates Florida General Partnership, Martin Rappaport Charitable Remainder Unitrust, Martin Rappaport, Marc Cherno, and Steven Morganstern -- assert $64 million in claims against Mr. Madoff based on the balances contained in the last statements they got from BLMIS. On April 14, 2009, Grant Thornton UK LLP as receiver placed Madoff Securities International Limited in London under bankruptcy protection pursuant to Chapter 15 of the U.S. Bankruptcy Code (Bankr. S.D. Fla. 09-16751). The Chapter 15 case was later transferred to Manhattan. In June 2009, Judge Lifland approved the consolidation of the Madoff SIPA proceedings and the bankruptcy case. Judge Denny Chin of the U.S. District Court for the Southern District of New York on June 29, 2009, sentenced Mr. Madoff to 150 years of life imprisonment for defrauding investors in United States v. Madoff, No. 09-CR-213 (S.D.N.Y.). BLANCA LLC: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------- Debtor: Blanca, LLC 8077 Florence Avenue, Suite 204 Downey, CA 90240 Bankruptcy Case No.: 10-16519 Chapter 11 Petition Date: February 23, 2010 Court: United States Bankruptcy Court Central District of California (Los Angeles) Judge: Victoria S. Kaufman Debtor's Counsel: Carolyn A. Dye, Esq. 3435 Wilshire Blvd., Ste. 1045 Los Angeles, CA 90010 Tel: (213) 368-5000 Email: trustee@cadye.com Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $10,000,001 to $50,000,000 According to the schedules, the Company has assets of $12,451,644, and total debts of $18,401,655. The petition was signed by David Sarinana, the company's managing member. Debtors' List of 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ East West Bank $6,050,000 9300 Flair Drive Value: 6th Floor $5,900,000 El Monte, CA 91731 Net Unsecured: $4,508,386 *Prior Liens Exist East West Bank $6,050,000 9300 Flair Drive Value: 6th Floor $5,300,000 El Monte, CA 91731 Net Unsecured: $750,000 Century 21 A Better Service $225,183 David Sarinana $203,451 James C. Caviola, Esq. $201,000 Estate Financial Services $180,608 Inc. Brico Electric $151,783 RBC Company $101,179 Worthy Construction $76,716 Talent Air $64,305 David Sarinana Insurance $46,000 D&M Steel $43,530 Pyramid Plastering $33,396 Raffis Metal Design $30,771 Miramontes Construction $29,464 Artistic Cuts, Inc. $29,000 c/o John Vukmanovic, Esq. T Brothers Landscape $28,712 SSD Systems $26,535 Gardner Pipe $15,994 Midwest Roofing $15,223 BLOCKBUSTER INC: Weil Gotshal, Rothschild On Board -------------------------------------------------- The Wall Street Journal's Mike Spector reports that people familiar with the matter said Blockbuster Inc. in recent days, tapped law firm Weil, Gotshal & Manges and investment bank Rothschild Inc. to look at ways to reduce its roughly $1 billion debt load and explore other strategies, such as acquisitions or partnerships. Sources told the Journal Blockbuster has mulled converting some of its debt to equity or buying back some bonds at a discount. A deal would likely focus on negotiating with a group of subordinated bondholders who are owed $300 million, the sources said. People familiar with the situation also told the Journal bondholders have begun organizing and talking with potential advisers to prepare for possible negotiations over reworking the company's capital structure, such as converting debt to equity. The Journal's sources said the restructuring discussions are in early stages and no major actions appear imminent. Blockbuster's Chief Executive Jim Keyes said the company works with advisers regularly and that management is considering a menu of options including reworking its debt and pursuing merger-and- acquisition opportunities. He declined to elaborate. "We don't contemplate filing for bankruptcy," he said in an interview, according to the Journal. According to the Journal, Mr. Keyes said the current discussions represent routine efforts to help "transform" Blockbuster's business. "I like to characterize it as remodeling a house," Mr. Keyes said. "When you're tearing down walls and moving stuff around, the process itself makes it difficult to see the end product . . . but the outcome is often quite good." Movie Gallery Talks The Journal also reports Blockbuster has been in discussions with Movie Gallery Inc. -- which filed for bankruptcy protection earlier this month -- about acquiring assets that might bolster Blockbuster's prospects. The Journal relates that in early January, Blockbuster's chief merchandising officer, Bill Lee, sent a letter to rival Movie Gallery expressing interest in acquiring certain assets, including stores and customer lists, according to people familiar with the matter. Movie Gallery chose not to engage in discussions and focused on preparing a bankruptcy filing. "We're still having discussions with them," Mr. Keyes said, adding the company has no intention of acquiring Movie Gallery wholesale. Mr. Lee has since left the company. About Movie Gallery Based in Wilsonville, Ore., Movie Gallery, Inc. is the second largest North American video and game rental company, operating stores in the U.S. and Canada under the Movie Gallery, Hollywood Video and Game Crazy brands. Movie Gallery first filed for Chapter 11 on Oct. 16, 2007 (Bankr. E.D. Va. Case Nos. 07-33849 to 07-33853). Kirkland & Ellis LLP and Kutak Rock LLP represented the Debtors. The Company emerged from bankruptcy on May 20, 2008, with private-investment firms Sopris Capital Advisors LLC and Aspen Advisors LLC as its principal owners. William Kaye was appointed plan administrator and litigation trustee. Movie Gallery returned to Chapter 11 protection on February 3, 2009 (Bankr. E.D. Va. Case No. 10-30696). Attorneys at Sonnenschein Nath & Rosenthal LLP and Kutak Rock LLP represent the Debtors in their second restructuring effort. Kurtzman Carson Consultants serves as claims and notice agent. About Blockbuster 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: Reports $558.2-Mil. Net Loss for Fiscal 2009 ------------------------------------------------------------- Blockbuster Inc. said total revenues for the fiscal fourth quarter ended January 3, 2010, were $1.08 billion as compared to total revenue of $1.31 billion for the same period one year ago. Results of the fourth quarter were primarily attributable to a 14.7% decrease in same-store comparables, a further reduction in company-operated stores and competitive pressures. Net loss in the fourth quarter of 2009 was $434.9 million, or $2.24 per share, which includes the non-cash charge of $369.2 million for the impairment of goodwill and other long-lived assets. This compares to a net loss of $359.8 million, or $1.89 per share, in the fourth quarter of 2008, which included the $435.0 million non-cash charge for the impairment of goodwill and other long-lived assets. Adjusted net loss for the fourth quarter of 2009, which excludes costs associated with store closures, severance and impairments, totaled $44.3 million, or $0.24 per share. This compares to adjusted net income of $75.5 million, or $0.38 per share, in the fourth quarter of 2008. Fourth quarter 2009 earnings before interest, taxes, depreciation and amortization was $16.5 million, compared to $122.8 million for the fourth quarter of 2008. Adjusted EBITDA, which excludes stock-based compensation, costs associated with lease terminations and severance, was $31.3 million in the fourth quarter of 2009, compared to adjusted EBITDA of $128.1 million in the same period one year ago. Blockbuster ended the fourth quarter of 2009 with $188.7 million in cash and cash equivalents and $58.5 million in restricted cash related to the Company's letters of credit. On January 14, 2010 Blockbuster announced the elimination of the remaining $24 million of letters of credit related to Viacom, which enhanced the Company's liquidity and reduced its restricted cash balance to approximately $36 million as of January 2010. The remaining portion of the Company's restricted cash is primarily related to its workers' compensation insurance. Blockbuster said total revenues for the full year 2009 were $4.06 billion, compared to $5.07 billion for the full year of 2008. Net loss for the full year of 2009 was $558.2 million, or $2.93 per share. This compares with net loss of $374.1 million, or $2.01 per share, in 2008. Excluding costs associated with store closures, severance, impairments and certain other items, adjusted net loss for the full year of 2009 was $73.7 million, or $0.44 per share. This compares with adjusted net income of $70.2 million, of $0.31 per share, in 2008. Full year 2009 EBITDA was $158.1 million, compared to $277.3 million for the full year of 2008. Adjusted EBITDA, which excludes stock-based compensation, costs associated with lease terminations, severance and certain other items was $196.4 million for the full year of 2009, compared to adjusted EBITDA of $302.5 million for the full year of 2008. "While Blockbuster had a challenging year, we did make progress during the year towards the continued transformation of Blockbuster. We closed several hundred stores, but added over 2,000 new Blockbuster Express kiosks. In addition, we introduced a new a la carte by-mail program that provides our in-store customers access to over 95,000 titles and launched Blockbuster On Demand, making streaming video-on-demand available to millions of households with the movies they enjoy at the touch of a button. We completed these initiatives in spite of a challenging global economy and the practical constraints of limited liquidity while we were refinancing the Company's debt," stated Jim Keyes, Chairman and Chief Executive Officer of Blockbuster Inc. "Increased inventory levels to support a higher in-stock availability and our investment in advertising were intended to improve top line performance; however, disappointing holiday sales due primarily to aggressive new competition and lower than expected international performance led to a shortfall in our financial results." Mr. Keyes concluded, "While we believe the future is bright, the next 12 to 18 months will remain challenging as we balance the secular decline of a single channel with the ascension of emerging channels; such as vending and digital. As we look at our plans for 2010, stores remain a key component of our multi-channel offering. Through our alliance with NCR, we expect to add an additional 7,000 Blockbuster Express kiosks. We also plan to grow the by-mail channel and further expand availability of our digital offering through Blockbuster On Demand. We recognize the need to focus on liquidity and regain the confidence of our stakeholders and will continue to reduce costs, while expanding our new channels through collaborative partnerships. Meanwhile, we will continue to explore a variety of strategic alternatives to strengthen our capital structure to position the Company for success in our transformational efforts." "For the full year 2010 we will continue to take actions to improve liquidity," stated Tom Casey, Executive Vice President and Chief Financial Officer of Blockbuster Inc. "We expect to further reduce G&A expenses by over $200 million, continue to rationalize the domestic store portfolio and work to divest international assets. In addition, in 2010 global capital expenditures will remain at maintenance levels in the range of approximately $30 million to $35 million and we will aggressively manage working capital." Optimizing the Domestic Portfolio During 2010 Blockbuster will continue to rationalize its footprint. Portfolio optimization key metrics are: -- Through the Company's alliance with NCR, the Company will add an additional 7,000 Blockbuster Express kiosks and expect to have at least 10,000 by 2010 year end. -- With regard to the Company's store portfolio, for the full year of 2009 Blockbuster closed 374 domestic company-owned stores, which includes 140 domestic company-owned stores that were closed during the fourth quarter of 2009. -- For the full year of 2010 Blockbuster expects to close a range of 500 to 545 underperforming domestic company-owned stores. Blockbuster closed 253 domestic company-owned stores in January 2010 and has identified 150 domestic company-owned stores that are expected to be closed in April 2010. The Company expects to close 75 to 125 domestic company-owned stores throughout the remaining portion of 2010. -- The Company continues to expect approximately $50 million in benefit to 2010 adjusted EBITDA from revenue transfer and loss avoidance from 2009 domestic company-owned store closures and expected domestic company-owned store closures in 2010. Equity and Capital Structure During the fourth quarter 2009, Blockbuster announced it would seek shareholder approval to combine its two classes of common stock into one class of common stock. The ratio for the proposed combination is expected to be one-for-one and is subject to obtaining stockholder approval at Blockbuster's annual stockholders' meeting, which is currently scheduled to occur in May 2010. Blockbuster's dual class capital structure was originally established in connection with its prior ownership by Viacom. The Company believes the elimination of the dual class capital structure will improve the market liquidity for its common stock and provide a more clearly defined equity structure. In addition, in November 2009 the Company was notified by the New York Stock Exchange that the Company's Class A common stock did not satisfy the NYSE's continued listing standard that requires the average closing price of a listed security be no less than $1.00 per share over a consecutive 30 trading-day period. Under NYSE rules, the Company has through the date of its 2010 annual meeting within which to cure this deficiency. As such, the Company has identified action items that it believes will enable it to meet this continued listing standard within the cure period. These actions include a reverse stock split, which will be voted upon at Blockbuster's upcoming annual stockholders' meeting currently scheduled for May 2010. Blockbuster continues to actively explore various recapitalization opportunities, which may include a recapitalization of the Company's outstanding debt or equity securities. Rothschild Inc. has worked with Blockbuster since February 2009 on a variety of financing and strategic initiatives and continues to assist the Company in connection with evaluating capital structure alternatives. Adverse Going Concern Opinion Anticipated The Company expects to file its Annual Report on Form 10-K for fiscal 2009 with the Securities and Exchange Commission on or before March 19, 2010. Management anticipates the report of the Company's independent registered public accounting firm relative to the Company's 2009 consolidated financial statements will contain an explanatory paragraph indicating that substantial doubt exists with respect to the Company's ability to continue as a going concern. The Company's independent public accountants have advised management that such an opinion will be related to the risk that the Company will have a low level of liquidity, particularly as a result of decreased cash from operations. As the Company noted, it intends to explore strategic alternatives, one or more which could improve its liquidity. A full-text copy of Blockbuster's earnings release is available at no charge at http://ResearchArchives.com/t/s?54c4 About Blockbuster 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. BRIARWOOD CAPITAL: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Briarwood Capital, LLC P.O. Box 1159 Rancho Santa Fe, CA 92067 Bankruptcy Case No.: 10-02677 Chapter 11 Petition Date: February 23, 2010 Court: United States Bankruptcy Court Southern District of California (San Diego) Judge: Chief Judge Peter W. Bowie Debtors' Counsel: Jeffry A. Davis, Esq. Mintz Levin Cohn Ferris Glovsky & Popeo 3580 Carmel Mountain Road, Suite 300 San Diego, CA 92130 Tel: (858) 314-1500 Fax: (858) 314-1501 Email: jadavis@mintz.com Estimated Assets: $100,000,001 to $500,000,000 Estimated Debts: $10,000,001 to $50,000,000 A list of the Company's 20 largest unsecured creditors is available for free at: http://bankrupt.com/misc/casb10-02677.pdf Debtor's List of 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Gordon & Holmes Contingent legal fee Unknown 223 W. Date St. San Diego, CA 92101 HCC Investors, LLC Litigation claim Unknown c/o O'Melveny & Myers LLP 1999 Ave. of the Stars, 7th Fl. Los Angeles, CA 90067-6035 Lennar Bridges, LLC Litigation claim Unknown c/o O'Melveny & Myers LLP 1999 Ave. of the Stars, 7th Fl. Los Angeles, CA 90067-6035 Lennar Land Partners II Litigation claim Unknown c/o O'Melveny & Myers LLP 1999 Ave. of the Stars, 7th Fl. Los Angeles, CA 90067-6035 Lennar San Jose Holdings, Litigation claim Unknown Inc. c/o O'Melveny & Myers LLP 1999 Ave. of the Stars, 7th Fl. Los Angeles, CA 90067-6035 LLP II HCC Holdings, LLC Litigation claim Unknown c/o O'Melveny & Myers LLP 1999 Ave. of the Stars, 7th Fl. Los Angeles, CA 90067-6035 Cooley Godward Kronish Legal Expenses $580,365 4401 Eastgate Mall San Diego, CA 92121-1909 American Lawyers Funding, Loan $525,000 Inc. 2100 Palomar Airport Rd. Suite 214 Carlsbad, CA 92011 LECG, LLC Legal Expenses $400,000 PO Box 952423 St. Louis, MO 63195-2423 Vantage Law Group Legal Expenses $241,551 Shook Hardy & Bacon Legal Expenses $181,776 Attn: Accounting Navigant Consulting Legal Expenses $101,328 Citi Business Card Credit Card $87,734 GAFCON, Inc. Legal Expenses $79,418 US Bank Credit Card $73,678 Sullivan Hill Lewin Legal Expenses $60,000 Rez etc. Market Pointe Realty Legal Expenses $50,324 Advisors First Bankcard Credit Card $44,620 TERIS Legal Expenses $39,531 Brodshatzer Wallace Legal Expenses $35,925 Spoon Yip The petition was signed by Nicolas Marsch III, the company's managing member. BUCKINGHAM FINANCIAL: U.S. Trustee Wants Dismissal or Conversion ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of Texas will consider at a hearing on March 23, 2010, at 2:00 p.m., the U.S. Trustee's motion to dismiss Buckingham Financial, LLC's Chapter 11 bankruptcy case. The hearing will be held at 660 N. Central Expressway, 3rd Floor Plano, Texas. William T. Neary, the U.S. Trustee for Region 6, is asking the Court to (a) appoint a Chapter 11 trustee, (b) dismiss the case, (c) convert the case to Chapter 7, or (d) impose plan filing and confirmation deadlines. The U.S. Trustee contended that certain circumstances of the case call for evaluation by a neutral third party to determine the best course for the Debtor's creditors. The U.S. Trustee related that Christine Brauss, the sole owner, is not competent to effectively manage the affairs of the Debtor and may be conflicted with the interests of creditors by her relation or exposure to the Debtor's affiliates. The U.S. Trustee added that the Debtor has no employees and operations, hence, the assets should be liquidated. The Hon. Brenda T. Rhoades has earlier denied investor Helmut Landwehr, et al.'s request to dismiss the Debtor's case. Plano, Texas-based Buckingham Financial, LLC, operates as a real estate business. The Company filed for Chapter 11 bankruptcy protection on December 6, 2009 (Bankr. E.D. Tex. Case No. 09- 43863). John P. Lewis, Jr., 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 $10,000,001 to $50,000,000 in liabilities. CABLEVISION SYSTEMS: Marathon Holds 6.76% of Class A Shares ----------------------------------------------------------- M.A.M. Investments Ltd., a Jersey corporation; Marathon Asset Management (Services) Ltd., a UK Corporation; Marathon Asset Management LLP, a limited liability partnership incorporated under the laws of England and Wales; and William James Arah, Jeremy John Hosking and Neil Mark Ostrer disclosed that as of December 31, 2009, they may be deemed to beneficially own 16,697,089 shares or roughly 6.76% of the Class A common stock of Cablevision Systems Corp. Headquartered in Bethpage, New York, Cablevision Systems Corp. is predominantly a domestic cable TV multiple system operator serving approximately 3.1 million subscribers in and around the New York metropolitan area. Among other entertainment-and media-related business ventures, the company also owns and distributes programming to cable television and direct broadcast satellite providers throughout the United States through its Rainbow National Services subsidiary. As of September 30, 2009, the Company had $10,127,998,000 in total assets against $15,321,360,000 in total liabilities and $11,371,000 in redeemable noncontrolling interests. The Company as of September 30, 2009, had non-controlling interest of $24,000 and total deficiency of $5,204,733,000. * * * As reported by the Troubled Company Reporter on Oct. 15, 2009, Standard & Poor's said it lowered its issue-level rating on Cablevision Systems Corp. (BB/Negative/--) subsidiary Newsday LLC's $650 million senior secured credit facility due 2013, which consists of a $525 million fixed-rate term loan and a $125 million floating-rate term loan. S&P is lowering the issue-level rating on the loan to 'BB' from 'BB+' and removed it from CreditWatch, where it was placed with negative implications on Feb. 9, 2009. S&P also revised the recovery rating on the loan to '3' from '2'. A '3' recovery rating indicates that lenders can expect meaningful (50%-70%) recovery in the event of payment default. The TCR reported on Sept. 11, 2009, Standard & Poor's affirmed the 'BB' corporate credit rating of Cablevision. Cablevision has around $11.8 billion of debt reported outstanding at June 30, 2009. The outlook is negative. Cablevision carries "Ba2" Corporate Family and Probability of Default Ratings from Moody's. CABLEVISION SYSTEMS: OppenheimerFunds Has 2.54% of Class A Shares ----------------------------------------------------------------- OppenheimerFunds, Inc., disclosed that as of December 31, 2009, it may be deemed to beneficially own 6,260,053 shares or roughly 2.54% of the Class A common stock of Cablevision Systems Corp. Headquartered in Bethpage, New York, Cablevision Systems Corp. is predominantly a domestic cable TV multiple system operator serving approximately 3.1 million subscribers in and around the New York metropolitan area. Among other entertainment-and media-related business ventures, the company also owns and distributes programming to cable television and direct broadcast satellite providers throughout the United States through its Rainbow National Services subsidiary. As of September 30, 2009, the Company had $10,127,998,000 in total assets against $15,321,360,000 in total liabilities and $11,371,000 in redeemable noncontrolling interests. The Company as of September 30, 2009, had non-controlling interest of $24,000 and total deficiency of $5,204,733,000. * * * As reported by the Troubled Company Reporter on Oct. 15, 2009, Standard & Poor's said it lowered its issue-level rating on Cablevision Systems Corp. (BB/Negative/--) subsidiary Newsday LLC's $650 million senior secured credit facility due 2013, which consists of a $525 million fixed-rate term loan and a $125 million floating-rate term loan. S&P is lowering the issue-level rating on the loan to 'BB' from 'BB+' and removed it from CreditWatch, where it was placed with negative implications on Feb. 9, 2009. S&P also revised the recovery rating on the loan to '3' from '2'. A '3' recovery rating indicates that lenders can expect meaningful (50%-70%) recovery in the event of payment default. The TCR reported on Sept. 11, 2009, Standard & Poor's affirmed the 'BB' corporate credit rating of Cablevision. Cablevision has around $11.8 billion of debt reported outstanding at June 30, 2009. The outlook is negative. Cablevision carries "Ba2" Corporate Family and Probability of Default Ratings from Moody's. CALIFORNIA: Postpones Sale of $2-Bil. GO Bonds for a Week --------------------------------------------------------- Romy Varghese at Dow Jones Newswires reports California Treasurer Bill Lockyer has postponed the planned sale of $2 billion of general obligation bonds for a week. The bond sale was scheduled to begin next week and price on March 4. According to Dow Jones, Mr. Lockyer said the delay was required because the state legislature hadn't voted on a cash-management bill that would make California debt more appealing to investors and ratings firms. According to Dow Jones, California has the lowest credit ratings of any state. Moody's Investors Service rates the state's general-obligation bonds Baa1, Standard & Poor's ranks them A- minus, and Fitch Ratings rates them BBB. According to Dow Jones, Dan Solender, director of municipal bond management at Lord Abbett, said a delay of a week may not impact the yields the bonds must pay, but any longer may raise costs, especially as interest rates are attractive now. "The key thing is for them not to take too long to resolve this," Mr. Solender said, according to Dow Jones. "If they can get their act together quickly, it's a good time to borrow." Dow Jones reports that John Flahive, director of fixed income at BNY Mellon Wealth Management, said that because of the delay and the size of the deal, the bonds may come around 20 basis points over where existing debt trades, which means the yields would be in the range of 5.875% to 6%. According to Dow Jones, Tom Dresslar, spokesman for Mr. Lockyer, said says a higher rate doesn't make sense, since the cash- management bill would "increase investors' comfort level." The bill would make the state better able to deal with cash-flow management and avoid last year's situation when it issued IOUs. Dow Jones relates that Finance department spokesman H.D. Palmer said officials are confident that the bill will be approved by the end of the week. CANWEST GLOBAL: D. Asper & Lisa Pankratz Resign From Board ---------------------------------------------------------- Canwest Global Communications Corp announced that Ms. Gail Asper OC, OM, LLD, Mr. David Asper and Ms. Lisa Pankratz have tendered their resignations from the Company's Board of Directors and all other director and officer positions with Canwest and its subsidiaries. In tendering their resignations, the members cited their respective desires to pursue other business commitments and charitable initiatives as well as to assist the Company's efforts to reduce the size of its Board. Derek Burney OC, Canwest's Chairman of the Board, said that these director positions would not be filled given the Company's court-supervised restructuring which commenced in October 2009, and the Company's newspaper and online publishing group pursuing a separate court-supervised financial restructuring plan, which commenced last month. "I would like to thank Gail, David and Lisa for their years of skilled and dedicated service to Canwest's Board of Directors and the commitment that they have demonstrated to Canwest," Mr. Burney said. He added: "I would particularly like to thank Gail and David for their decades of leadership and dedication to the vision that built Canwest. I know that their decisions were carefully considered and they have each acted throughout in the best interests of all stakeholders. I would also like to thank Lisa for her valued oversight and considerable contributions as Chair of the Pension Committee and as a member of the Audit Committee." Mr. Burney noted that the Company will continue to benefit from Ms. Asper and Mr. Asper's considerable experience and legacy contribution through the restructuring process. Canwest has entered into consulting agreements with them for up to six months or until such time that Canwest emerges from CCAA protection, whichever occurs earlier. Gail Asper, a lawyer, joined the Company in 1989, serving as General Counsel until 1998 and Corporate Secretary from 1990 to January 2008. Ms. Asper joined the Company's Board of Directors in February 1992. She has also served for many years in leadership positions on numerous not-for-profit boards and charitable foundations including having served as President of the Canwest Global Foundation since it was established in 1997. She is currently President of the Asper Foundation and is also National Campaign Chair for Friends of the Canadian Museum for Human Rights which is spearheading the development of a new national museum in Winnipeg. David Asper, also a lawyer, joined the Company in 1992 and became a member of its Board of Directors in January 1997. During his time with Canwest, he held various positions at the Company and its subsidiaries, including Executive Vice-President of Canwest and Chairman of the National Post. He is currently an Assistant Professor of Law at Robson Hall Law School at the University of Manitoba and is Executive Chairman of Creswin Properties Inc., which, among its business activities in North America, is working towards the construction of a new CFL football stadium and retail development in Winnipeg. Lisa Pankratz, a chartered accountant, became a director of Canwest in April 2005 and also served as Chair of the Pension Committee and member of its Audit Committee. Ms. Pankratz is President of Mackenzie Cundill Investment Management Ltd. and an advisor to the investment committees of Pacific Blue Cross and B.C. Life & Casualty Company. She is also a Trustee of the Board of the Canadian Museum for Human Rights. Leonard Asper, Canwest's President and Chief Executive Officer and a director, will continue to serve in each of his present positions with the Company and its subsidiaries. The remaining Board members Derek Burney, David Drybrough, David Kerr and Margot Micallef are Independent directors actively involved in the Company's financial restructuring activities. 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: Union CEP Wants Severance Pay for Members --------------------------------------------------------- Communications, Energy and Paperworkers Union of Canada asks the Ontario Superior Court of Justice for an order directing Canwest Global Communications Corp. and the other applicants and partnerships -- the CMI Entities -- CMI Entities -- to immediately satisfy all obligations in respect of severance payments in accordance with the terms of the applicable collective agreements to members of the Union that rendered services to the CMI Entities after October 6, 2009 -- the date of the Initial Order. The Union also asks the Ontario Court for an order directing the CMI Entities to establish a process to enable former employees that are experiencing financial hardship to apply for immediate payment on account of their future claim distributions in the CMI Entities' bankruptcy proceedings. The CMI Entities laid off or provided notice of layoff to approximately 35 members of the Union in or around October 6, 2009. The Affected Members were employed in the CMI Entities' operations located in Calgary (8 members), Kelowna (9 members), Saskatoon (9 members) and Ontario (9 members). As a result of those layoffs, the affected employees became entitled to severance pay and other benefits under a certain collective agreement. The Union says that the CMI Entities owed the Affected Employees approximately C$490,000 for the severance payments. The Affected Members employed in connection with the Calgary and Ontario operations were all on layoff and receiving severance payments as of the date of the Initial Order. Although additional severance payments remained outstanding, the CMI Entities discontinued all payments to the Affected Members employed at the Calgary and Ontario operations as of the date of the Initial Order. The Affected Members employed in connection with the Kelowna and Saskatoon operations all received notices of layoff with effective dates that fell subsequent to the date of the Initial Order. Accordingly, all of the Affected Members employed at the Kelowna and Saskatoon continued to render services to the Applicants after the date of the Initial Order. However, and notwithstanding the provision of services to the CMI Entities after the date of the Initial Order, when the Affected Members at the Kelowna and Saskatoon operations reached their lay-off dates, the CMI Entities refused to comply with their obligations to make severance payments in accordance with the terms of the applicable collective agreements. Robert Lumgair, a national representative employed by the Communications, Energy and Paperworkers Union of Canada, relates that notwithstanding the provisions of the collective agreement, the employer unilaterally decided to make severance payments by way of "salary continuance"; that is, it would continue to pay the employees' regular salary, after the employees were laid off, until the employer's severance obligations were exhausted. In response, the Union filed a grievance in relation to the employer's failure to pay out severance claims on a "lump sum" basis, Mr. Lumgair says. According to Mr. Lumgair, the Affected Members have suffered financial hardship as a result of the CMI Entities' refusal to comply with the terms of the applicable collective agreements. 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). CATHOLIC CHURCH: Wilmington Diocese Won't Pay Accused Priests ------------------------------------------------------------- The Catholic Diocese of Wilmington, Inc., withdrew its request to continue providing pensions, sustenance and medical coverage in the ordinary course to certain priests accused of sexual abuse of minors, Bill Rochelle at Bloomberg News reported. The Diocese asked authority from the U.S. Bankruptcy Court for the District of Delaware to: (a) continue providing pensions, sustenance and medical coverage in the ordinary course to certain priests accused of sexual abuse of minors; and (b) use certain restricted funds for the payment of prepetition pension obligations and certain housing and health costs for retired priests. The Official Committee of Unsecured Creditors and the representative of the abuse claimants, however, asked the Bankruptcy Court to deny the Diocese's request. The Committee's counsel, Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, contends, among other things, that Third Circuit law is clear that claims to pension benefits that vested prepetition are prepetition claims that cannot be paid outside of a plan of reorganization. About the Diocese of Wilmington The Diocese of Wilmington covers Delaware and the Eastern Shore of Maryland and serves about 230,000 Catholics. The Delaware diocese is the seventh Roman Catholic diocese to file for Chapter 11 protection to deal with lawsuits for sexual abuse. Previous filings were by the dioceses in Spokane, Washington; Portland, Oregon; Tucson, Arizona; Davenport, Iowa, Fairbanks, Alaska; and San Diego, California. The bankruptcy filing automatically stayed eight consecutive abuse trials scheduled in Delaware scheduled to begin October 19. There are 131 cases filed against the Diocese, with 30 scheduled for trial. The Diocese filed for Chapter 11 on Oct. 18, 2009 (Bankr. D. Del. Case No. 09-13560). Attorneys at Young Conaway Stargatt & Taylor, LLP, serve as counsel to the Diocese. The Ramaekers Group, LLC is the financial advisor. The petition says assets range $50,000,001 to $100,000,000 while debts are between $100,000,001 to $500,000,000. (Catholic Church Bankruptcy News; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). CELTIC ADVENTURES: Files for Chapter 11 Bankruptcy -------------------------------------------------- Celtic Adventures LLC filed for Chapter 11 bankruptcy due to the economic downturn, which hurt cash flow, according to reporting by newsobserver.com. Celtic Adventures LLC operates a pub. CHATTEM INC: Discloses Noncompliance With NASDAQ Listing Rule ------------------------------------------------------------- Chattem, Inc. is no longer in compliance with NASDAQ Listing Rule 5605(c) which requires that the audit committee of the Company's Board of Directors be composed of at least three independent directors. As a result of certain appointments to, and resignations from, the Board as contemplated by the Agreement and Plan of Merger, dated as of December 20, 2009, among the Company, sanofi-aventis, a French societe anonyme, and River Acquisition Corp., a Tennessee corporation and an indirect wholly-owned subsidiary of Parent, the Company has only two independent directors, both of whom are members of the audit committee. On February 19, 2010, the Company received a notice from the staff of the NASDAQ Stock Market, indicating the Company is not in compliance with Rule 5605(c). However, consistent with Listing Rule 5605(c)(4)(A), NASDAQ will provide the Company a cure period in order to regain compliance: -- until the earlier of the Company's next annual shareholders' meeting or February 9, 2011; or -- if the next annual shareholder's meeting is held before August 9, 2010 then the Company must evidence compliance no later than August 9, 2010. The Company must submit to NASDAQ documentation, including biographies of any new directors, evidencing compliance with the rules no later than this date. In the event the Company does not regain compliance by this date, NASDAQ rules require the NASDAQ staff to provide written notification to the Company that its securities will be delisted. If the merger that is contemplated by the Merger Agreement does not occur prior to the expiration of the cure period, the Company will take the necessary steps to appoint an additional independent director to the Board and to the Company's audit committee in order to comply with Rule 5605(c). About Chattem, Inc Chattem, Inc., is a leading marketer and manufacturer of a broad portfolio of branded OTC healthcare products, toiletries and dietary supplements. Total revenues for the last twelve months ended November 2009 were approximately $500 million. * * * As reported in the Troubled Company Reporter-Latin America on Feb. 11, 2010, Moody's Investors Service confirmed and will withdraw the Ba3 corporate family rating and all other ratings for Chattem, Inc. These actions reflect the successful tender offer by an indirect, wholly-owned subsidiary of sanofi-aventis for all the outstanding common shares of Chattem, as well as the deposit by Chattem of funds with a trustee necessary to fully discharge all of Chattem's oustanding $90 million senior subordinated notes. This concludes a review for possible upgrade that was initiated on December 21, 2009. These ratings of Chattem were confirmed and will be withdrawn: -- Corporate family rating of Ba3, -- Probability of default rating of Ba3, and -- $90 million senior subordinated notes of to B2 (LGD 6, 91%). CHINA ARCHITECTURAL: Enters Into Conditional Waiver Deal -------------------------------------------------------- China Architectural Engineering, Inc., has entered into a waiver agreement with the bondholders applicable to the proposed acquisition of a majority stake in Shanghai ConnGame Network Co. Ltd. As stated in the Company's previous press release dated December 14, 2009, the acquisition of a 60% equity interest of ConnGame and the issuance of the 25 million CAEI shares are subject to a number of closing conditions, including but not limited to the bondholders' waiver of their rights to a reduction in the conversion price of the Company's outstanding convertible bonds and exercise price of the related warrants as a result of the proposed acquisition. On February 24, 2010, the bondholders entered into an Amendment and Waiver Agreement and agreed to waive their rights to a reduction in the bond conversion prices and warrant exercise prices for up to three months. In exchange, the Company agreed to make payments of the bonds' interest in arrears and interest due in April 2010, in addition to repayment of a separate banking facility. Completion of the proposed acquisition is subject to negotiation and execution of a definitive equity transfer agreement, regulatory approvals, and other customary closing conditions. At closing of the acquisition and upon receiving 25 million CAEI shares, First Jet will become CAE's largest shareholder, and it is expected that Mr. Jun Tang, who is First Jet's largest shareholder, will be appointed CAE's new Chairman of the Board. Mr. Tang commented, "I greatly look forward to joining China Architectural Engineering's board of directors as its new Chairman. I am highly impressed with Mr. Luo's business and technical vision to leverage the unique, complementary strengths of CAE and ConnGame to transform CAE into a high-end architectural design consultant and service provider, while also expanding into China's growing online game market. I am convinced that CAE and ConnGame share a common culture of technical excellence, and therefore, I am confident that the eventual integration of our businesses and technologies will result in a greater new CAE." Mr. Ken Yi Luo, the Company's Chief Executive Officer and Chairman, commented, "We are appreciative of the support of our bondholders and excited by the prospect of soon welcoming Mr. Tang as our new Chairman. Mr. Tang's proven leadership, deep technical expertise, and prior success in the gaming industry will be invaluable in helping to integrate and transform the new CAE, enabling us to not only continue to take greater advantage of our core architectural engineering and design market but also China's large and rapidly growing online game market. I truly look forward to working closely with Mr. Tang to grow our combined businesses and to deliver greater value to our supportive shareholders." Overview of Conversion Price of the Bonds Pursuant to the trust deeds that govern the Company's outstanding Variable Rate Convertible Bonds due 2012 (the "2007 Bonds") and 12% Convertible Bonds due 2011 (the "2008 bonds," and collectively with the 2007 Bonds, the "Bonds") and the warrants to purchase 300,000 shares of common stock of the Company expiring 2013 (the "2008 Warrants"), the conversion price of the Bonds and the exercise price of the 2008 Warrants shall adjust downward if the Company issues shares at a per share price that is less than the current conversion price of the Bonds or exercise price of the 2008 Warrants. The 2007 Bonds are currently exercisable at $2.45 per share and the 2008 Bonds and 2008 Warrants are currently convertible and exercisable at $6.35 per share. According to the agreed upon terms of the acquisition, one of the conditions to the acquisition is the bondholders agreeing to waive their rights to a reduction in the conversion price of the Bonds and exercise price of the 2008 Warrants due to the issuance of the Shares. About Shanghai ConnGame Shanghai ConnGame, founded and led by seasoned experts with extensive previous success in China's online game industry, develops and operates MMORPGs in China. Leveraging its innovative game engines, scalable development platforms, and accomplished production teams, ConnGame focuses on self-developed MMORPGs game titles that are based on China's iconic characters and nostalgic epochs. About China Architectural China Architectural Engineering, Inc. is a leader in the design, engineering, fabrication and installation of high-end curtain wall systems, roofing systems, steel construction systems, and eco- energy systems. Founded in 1992, CAEI has maintained its market leadership by providing timely, high-quality, reliable, fully integrated, and cost-effective solutions. Collaborating with world-renowned architects and building engineers, the Company has successfully completed over one hundred large, complex and unique projects worldwide, including numerous award-winning landmarks across Asia's major cities. CHRYSLER LLC: Atty. Gen Says Dealer Laws Don't Conflict With Order ------------------------------------------------------------------ Old Carco LLC, formerly known as Chrysler LLC, Old Carco Motors LLC, formerly known as Chrysler Motors LLC, and Chrysler Group LLC, commenced a lawsuit, seeking a declaration that recently enacted amendments to the dealer laws of Maine, Oregon, North Carolina and Illinois impose obligations on New Chrysler and grant rights to certain dealers that are in conflict with, and therefore are preempted by, the Bankruptcy Code and final orders issued by the Court in connection with the "free and clear" sale of substantially all of the Debtors' assets to New Chrysler and the rejection of dealer agreements with 789 of the Debtors' Chrysler, Jeep, and Dodge dealers. The defendants in the adversary proceeding are: * John Kroger, Oregon Attorney General; * Matthew Garrett, Director of Oregon Department of Transportation; * Matthew Dunlap, Maine Secretary of State; * John McCurry, Chairman of the Maine Motor Vehicles Franchise Board; * Gene Conti, Transportation Secretary for the North Carolina Department of Transportation; * Mike Robertson, North Carolina Commissioner of Motor Vehicles; * Jesse White, Illinois Secretary of State; and * Terrence M. O'Brien, Chairperson of Illinois Motor Vehicle Review Board. On August 31, 2009, the Bankruptcy Court issued an Opinion and Order barring a group of rejected dealers from pursuing claims against New Chrysler under already existing state dealer laws on the ground that the statutory provisions relied on by the Rejected Dealers were in conflict with, and therefore were preempted by, the Bankruptcy Code and the Court's previously rendered final orders and opinions. The same conclusions reached in the Enforcement Opinion regarding the exercise of rights under prior laws apply with equal force to bar the enforcement of similar rights under the new Rejected Dealer Amendments. Answers to Complaint A. John Kroger and Matthew Garrett John Kroger, Oregon Attorney General, and Matthew Garrett, Director of Oregon Department of Transportation, deny that the recently enacted amendments to the dealer laws of Maine, Oregon, North Carolina, and Illinois purport to: (a) require New Chrysler to reinstate the dealers' rejected dealer agreements in those states under certain circumstances; (b) seek to afford Rejected Dealers "blocking rights" to challenge establishments or relocations in their former markets, including their former line-makes; and (c) mandate that New Chrysler pay the Rejected Dealers the fair market value of their dealerships -- rights that the U.S. Bankruptcy Court for the Southern District of New York previously rejected as preempted under the Bankruptcy Code and the Bankruptcy Court's prior orders in connection with its construction of existing state statutes that seek to impose successor liability on New Chrysler. Messrs. Kroger and Garrett deny that the Rejected Dealer Amendments conflict with the Sale Order, the Rejection Order, the Bankruptcy Code, settled bankruptcy law, and multiple provisions of the United States Constitution and the Constitutions of the States of Oregon, Maine, and Illinois. They further deny, among other things, that (i) New Chrysler faces the prospect of immediate, severe, and irreparable injury if the enforcement of the Rejected Dealer Amendments is not enjoined, and (ii) the Rejected Dealer Amendments violate each of the contracts clauses of the American Constitution and state constitutions as applied to New Chrysler. Accordingly, Messrs. Kroger and Garrett ask the Bankruptcy Court to deny the requests for declaratory judgments, injunction and payment of fees and costs. B. Matthew Dunlap and John McCurry Matthew Dunlap, Maine Secretary of State, and John McCurry, Chairman of the Maine Motor Vehicle Franchise Board contend that the Plaintiffs fail to state a claim upon which relief may be granted. They assert that the Plaintiffs' claims in the complaint are barred by sovereign immunity. Messrs. Dunlap and McCurry argue that the Bankruptcy Court lacks personal jurisdiction over the Defendants, and lacks subject matter jurisdiction. Hence, they ask Judge Gonzalez to dismiss the complaint, deny the request for declaratory judgment and injunctive relief, and deny the request for fees and costs. Illinois Seek Stay and Withdrawal of Reference Jesse White, Illinois Secretary of State and Terrence O'Brien, Chairperson of the Illinois Vehicle Review Board ask the U.S. Bankruptcy Court for the Southern District of New York to enter an order staying litigation in the adversary proceeding until the U.S. District Court for the Southern District of New York rules on Illinois' motion to withdraw the reference. Old Carco LLC, Old Carco Motors LLC and Chrysler Group LLC sued Illinois on December 31, 2009, to enjoin the enforcement of certain recent amendments to the Illinois Motor Vehicle Franchise Act. Although the District Court Clerk's office issued the summons on January 10, 2010, the summons and complaint was not served on Illinois until January 19. The deadline for filing an answer or otherwise pleading was February 10, 2010. Lisa Madigan, Illinois Attorney General, in Chicago, Illinois, relates that Illinois has since reviewed the complaint and decided that it is appropriate to file a motion to withdraw the reference with the District Court pursuant to Section 157 of the Judiciary and Judicial Procedures Code. The motion seeks withdrawal on both mandatory and discretionary withdrawal grounds and is being filed concurrently with the filing of Stay Motion. Ms. Madigan reminds the Court that Rule 5011 of the Federal Rules of Bankruptcy Procedure provides that the filing of a motion to withdraw the reference does not stay the proceedings for which withdrawal of the reference is sought but authorizes the bankruptcy court to grant a stay of the proceedings pending disposition of the withdrawal motion by the district court. She asserts that there is a likelihood that Illinois will prevail on the merits of its Withdrawal Motion. Illinois will be harmed if a stay is not granted to the extent it may have to duplicate efforts with respect to litigating the adversary proceeding in both the Bankruptcy and District Courts, Ms. Madigan contends. She points out that granting a stay during the limited period of time required for the District Court to decide Illinois' Withdrawal Motion will not cause substantial harm to the Plaintiffs because they have already taken a significant amount of time to serve Illinois with the complaint after it was filed and a limited delay while the District Court considers the Withdrawal Motion should not prejudice them. The public interest will not be harmed by granting a stay, Ms. Madigan further contends. She explains that public interest is the general interest of creditors and they will not be harmed as this is a discrete proceeding and a limited duration stay will have no effect on confirmation of a liquidating plan or other aspects of estate administration. In its Withdrawal Motion, Illinois asserts that the Bankruptcy Court should withdraw the reference of the adversary proceeding because the mandatory withdrawal provisions of Section 157(d) of the Judiciary and Judicial Procedures Code apply where a timely motion is brought by a party and resolution of the proceeding requires consideration of both Bankruptcy Code and other federal laws regulating organizations or activities affecting interstate commerce. In the alternative, the discretionary withdrawal provisions of Section 157(d) authorize the Bankruptcy Court to withdraw the reference on its own motion or on timely motion of a party-in-interest "for cause shown," Ms. Madigan says. Court Extends North Carolina's Deadline In a consented order signed by Judge Gonzalez, the Bankruptcy Court extends to February 19, 2010, the deadline for North Carolina to answer or otherwise respond to the complaint. The order was agreed upon by Plaintiffs Old Chrysler and New Chrysler and Defendants Gene Conti, Transportation Secretary for the North Carolina Department of Transportation, and Mike Robertson, North Carolina Commissioner of Motor Vehicles. 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: Hearing Today on Sale Process for Stamping Plant -------------------------------------------------------------- Old Carco LLC f/k/a Chrysler LLC, one of the Debtors, has executed a stalking horse agreement with Twinsburg Industrial Park LLC for the sale of certain real and personal property comprising the Debtors' Twinsburg, Ohio stamping plant, Corinne Ball, Esq., at Jones Day, in New York, relates. Accordingly, the Debtors ask the U.S. Bankruptcy Court for the Southern District of New York to: (a) schedule a hearing on March 11, 2010, to consider approval of the sale of the Property to the Buyer or a higher and better bidder at an auction to be held on March 10, 2010; and (b) authorize and approve (i) the notice of the Auction and Sale Hearing and (ii) the Debtors' proposed procedures for further marketing of the Property, including the establishment of certain deadlines for indications of interest and the submission of qualifying bids, assistance with certain due diligence, the granting of certain stalking-horse bidder protections to the Buyer and the conduct of the Auction. In addition, the Debtors ask that, upon conclusion of the Sale Hearing, the Court will authorize the sale of the Property, free and clear of liens, claims, interests and encumbrances to the Buyer or a higher or better bidder at the Auction. According to netDockets, the Debtors seek to sell: -- 11 parcels of real property totaling 195 acres located at 2000 East Aurora Road, Twinsburg, Summit County, Ohio together with all facilities (including a state-of-the- art stamping facility), buildings, fixtures and other improvements located thereon and certain ancillary rights related thereto; -- all intangible property pertaining thereto; and -- certain personalty, trade fixtures and equipment located and/or used at the Real Property. The Property was pledged as collateral to secure the Debtors' obligations under the Amended and Restated First Lien Credit Agreement among Carco Intermediate Holdco II LLC, Old Carco, the lender parties thereto and JPMorgan Chase Bank, N.A., as the agent to the First Lien Lenders who hold the first priority lien on all of the Property, subject to certain permitted liens. Pursuant to a Transition Services Agreement, by Old Carco and New Chrysler, New Chrysler is entitled to use the Property through July 31, 2010 and has been conducting operations at the Property. Pursuant to the TSA, New Chrysler does not pay rent for use of the Property during the License Period, but is responsible for (a) all carrying costs during the License Period and (b) the phase out and deactivation of the premises at the conclusion of the License Period. Ms. Ball says that the carrying costs associated with the Property are substantial and are estimated to be approximately $2,400,000 on an annual basis. She adds that New Chrysler's obligation to pay the costs terminates at the expiration of the License Period, which could result in the Debtors being forced to bear the entirety of the carrying costs in the next six months. Ms. Ball tells the Court that the First Lien Lenders have consented to the sale. Chrysler received inquiries from 31 parties initially about acquiring the assets but the interest translated into only seven letters of intent and, finally, one offer to purchase, according to a report by The Detroit News. The Twinsburg plant was initially slated to close next month but the need to stamp a supply of parts for Chrysler vehicles will keep the plant and its roughly 400 workers employed until June 26, the report said. The principal terms of the Purchase Agreement, include these provisions: * The Buyer will not assume any liabilities, claims, other claims, debts, commitments and obligations of Old Carco of any and all kind whatsoever, whether or not relating to the Property or Old Carco's business, whether arising prior to, on or after the closing of the sale. * The purchase price is $27,500,000. * A deposit amounting $2,750,000, must be delivered by wire transfer in immediately available funds to First American Title Insurance Company before the execution of the Purchase Agreement, and is refundable to the Buyer in the event the Purchase Agreement is terminated for any reason other than the Buyer's material breach of any representation, warranty, covenant or agreement contained in the Purchase Agreement and the breach is not cured within 10 days of the Buyer's receipt of notice of the breach. * From and after the date of execution of the Purchase Agreement, Old Carco has agreed not to amend the TSA without the Buyer's prior written consent to the extent the amendment would relate to the Property. * At the Closing of the Sale, Old Carco will pay, out of the proceeds of the Transaction: (a) any fees incurred in connection with the removal of unpermitted exceptions; (b) all city, state and county transfer taxes and fees payable in connection with the sale or conveyance of the Real Property; and (c) one-half of any escrow fee. The Buyer will pay: (a) the cost of obtaining the Title Policy; (b) the cost of recording the Deed; and (c) one-half of any escrow fee; and * In consideration of the Buyer's due diligence and good faith negotiation of, and entry into, the Purchase Agreement, and in reimbursement of the Buyer's incurred expenses, in the event that Old Carco (a) consummates an approved alternative transaction for the Property or (b) the Buyer terminates the Purchase Agreement upon Old Carco's entry into an alternative transaction, Old Carco has agreed to pay the Buyer a break-up fee amounting $600,000 or the amount of the net proceeds of an alternative transaction, not to exceed $600,000. The Break-up Fee will be payable as an administrative expense under Sections 503(b)(1) and 507(a)(2) of the Bankruptcy Code on the date of the closing, and out of the proceeds, of the applicable transaction. In no event will the Buyer be entitled to payment of the Break- up Fee unless and until the closing of an Approved Alternative Transaction. A copy of the Purchase Agreement is available for free at: http://bankrupt.com/misc/ChrysStampSaleAgrmt.pdf Proposed Bidding Procedures The Debtors will: * assist potential bidders in conducting their due diligence investigations and accept bids until 5:00 p.m. (Eastern Time) on March 5, 2010; * negotiate with qualified bidders in preparation for the Auction to begin at 10:00 a.m. (Eastern Time) on March 10, 2010, if any additional Qualified Bids are received; and * select a successful bidder at the conclusion of the Auction and seek authority to sell the Property to the Successful Bidder at the Sale Hearing to be held by the Court at 10:00 a.m. (Eastern Time) on March 11, 2010. A potential bidder must deliver written and electronic copies of its bid to Capstone Advisory Group LLC, the Debtors' financial advisor, so as to be received not later than 5:00 p.m. (prevailing Eastern Time) on March 1, 2010. A Potential Bidder must deposit with an escrow agent selected by the Debtors a deposit equal to 10% of the initial cash purchase price and must be made by certified check or wire transfer and will be held by the Deposit Agent in accordance with the terms of an escrow agreement to be provided with the Purchase Agreement. If more than one qualified bid is received by the Bid Deadline, the Debtors will conduct the Auction at 10:00 a.m. (prevailing Eastern Time) on March 10, 2010, at the offices of Jones Day in New York. The bidding will start at the purchase price and terms proposed in the Baseline Bid, and continue in increments of at least $100,000. Notwithstanding any other provision of the Bidding Procedures, when comparing bids at the Auction, the Buyer will be credited with, and have added to the aggregate amount of any bid that the Buyer elects to make at the Auction, an amount equal to the Break- up Fee. Qualified bidders are eligible to participate in the Auction. The Debtors will select, with the consent of the First Lien Agent, the highest and best qualified bid for the Property to serve as the starting point for the Auction. As soon as practicable, the Debtors will provide all qualified bidders with a copy of the Baseline Bid. Immediately prior to the conclusion of the Auction, the Debtors, with the consent of the First Lien Agent, will: (i) review and evaluate each bid made at the Auction on the basis of financial and contractual terms and other factors relevant to the sale process, including those factors affecting the speed and certainty of consummating the Transaction; (ii) identify the successful bid; and (iii) notify all Qualified Bidders participating in the Auction, prior to its adjournment, of the successful bidder, and the amount and other material terms of the Successful Bid. At the Sale Hearing, the Debtors will present the Successful Bid to the Court for approval. The Good Faith Deposits of all Qualified Bidders, and the Deposit of the Buyer, will be held in escrow by the Deposit Agent and will not become property of the Debtors' bankruptcy estates absent further order of the Court. The Deposit Agent will retain the Deposit of the Buyer or the Good Faith Deposit of the Successful Bidder, as the case may be, until the earlier of the closing of the Transaction or the termination or expiration of the applicable Marked Agreement or the Purchase Agreement, as the case may be. At the closing of the Transaction contemplated by the Successful Bid, a Successful Bidder will be entitled to a credit for the amount of its Good Faith Deposit or, in the case of the Buyer, its Deposit. The Good Faith Deposits of all Qualified Bidders, other than the Successful Bidder and the Next Highest Bidder, will be released by the Debtors upon the entry of the Sale Order. The Good Faith Deposits of the Successful Bidder and the Next Highest Bidder will be released by the Debtors upon the earlier of (i) the closing of the Transaction or (ii) the withdrawal of the Property for sale by the Debtors. Additionally, if the Purchase Agreement is terminated, the Buyer's Deposit will be returned to the extent required by the Purchase Agreement. A copy of the proposed Bidding Procedures is available for free at http://bankrupt.com/misc/ChrysStampBidProc.pdf The Court will convene a hearing on February 25, 2010, to consider approval of the Proposed Bidding Procedures. Objections must be filed on or before February 23, 2010. 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: Proposes DESCO & NAI as Brokers --------------------------------------------- Old CarCo LLC and its units ask the Bankruptcy Court for authority to employ DESCO Commercial LLC and NAI Farbman as their real estate brokers nunc pro tunc to January 22, 2010, and nunc pro tunc to February 4, 2010. Specifically, the Debtors seek to retain: (a) DESCO in connection with the contemplated sale of the Debtors' manufacturing facility at 1001 N. Highway Drive, 2295 and 2300 Hitzert Court and 1050 Dodge Drive, Fenton, Missouri, in accordance with the terms of an exclusive listing agreement; and (b) Farbman in connection with the sale of certain real property located at (i) 12311 Mark Twain, Detroit, Michigan and (ii) 14250 Plymouth Road, Detroit, Michigan in accordance with the terms of an exclusive right to sell agreement. The Brokers are part of the NAI Global Network, which is a premier network of independent commercial real estate firms and one of the largest commercial real estate service providers worldwide. Ronald E. Kolka, the Debtors' chief executive officer, notes that the Brokers have performed certain real estate brokerage and related services for the Debtors since the Agreements were executed and will continue to perform those services pending a hearing on the Debtors' Application to employ them. According to Mr. Kolka, initiating work before the completion and filing of the Application was appropriate because: -- proceeding with the sale of the Properties as expeditiously as possible furthers the Debtors' efforts to (i) efficiently wind-down their Chapter 11 estates as contemplated by the Plan and (ii) monetize the Properties for the benefit of the Debtors' estates and creditors, including their secured lenders who hold the primary economic interest in the Properties; and -- the Debtors believe that they are authorized to utilize the services of the Brokers consistent with the terms and conditions of the OCP Order. A. DESCO Upon the closing of the sale or exchange of the St. Louis Property, the Debtors will pay to DESCO, a commission equal to (a) two percent of the first $30 million of the "Total Consideration" and (b) three percent of the Total Consideration in excess of $30 million; provided, however, that: * any DESCO Commission payable pursuant to the DESCO Agreement will be: -- deemed earned upon the closing of the applicable sale or exchange of all or any portion of the St. Louis Property; and -- due and payable solely out of the proceeds derived from the sale or exchange of all or any portion of the St. Louis Property; and * the total DESCO Commission paid to DESCO for all sales related to the St. Louis Property will not exceed $2,000,000; * the DESCO Commission will be one percent of the Total Consideration if the buyer is an "Excluded Contact"; and * in no event will the DESCO Commission be payable if (A) the Court has not entered an order approving the proposed sale of all or any portion of the St. Louis Property, to the extent that an order is required, (B) the proposed sale or exchange of all or any portion of the St. Louis Property does not close or (C) the First Lien Lenders acquire the St. Louis Property pursuant to the terms of the Plan; * in no event will the sum of all DESCO Commissions payable to DESCO be less than $250,000. If all or any portion of the St. Louis Property is sold at auction under the supervision of the Court and DESCO is entitled to the payment of a DESCO Commission in connection therewith, the Total Consideration for purposes of computing the DESCO Commission will be the greater of: (a) the Total Consideration to be paid pursuant to any existing contract obtained prior to the Auction, if applicable; or (b) the Total Consideration to be paid by the successful bidder at the Auction. In addition to the DESCO Commission, the Debtors will directly pay or reimburse DESCO for its reasonable and necessary expenses actually incurred in connection with the offer and sale of the St. Louis Property, including, but not limited to, advertising, signage and brochure costs, which will be billed to the Debtors and payable within 30 days of receipt of invoice, provided that the Debtors will not pay or reimburse DESCO for any expenses in excess of $25,000. B. Farbman Upon the closing of the sale or exchange of all or any portion of the Detroit Properties, the Debtors will pay to Farbman a 10% commission, provided, however, that (a) any Farbman Commission will be due and payable at the time of closing solely out of the proceeds derived from the sale or exchange of all or any portion of the Detroit Properties; (b) if the buyer is a "Restricted Party", then the applicable Farbman Commission will be (i) 10% of the Total Consideration if the sale involves a co-broker, provided, however, that the commission will be six percent of the Total Consideration should any co-broker fail to comply with the requirements of the OCP Order and (ii) six percent of the Total Consideration if the sale does not involve a co-broker; and (c) in no event will the Farbman Commission be payable if (i) the Court has not entered an order approving the proposed sale of all or any portion of a Detroit Property, to the extent that an order is required, (ii) the proposed sale or exchange of all or any portion of the Detroit Properties does not close or (iii) the First Lien Lenders acquire the applicable Detroit Property pursuant to the terms of the Plan. In no event will the sum of all Farbman Commissions payable to Farbman on account of all sales related to the Plymouth Road Property be less than $40,000. In addition to the Farbman Commission, the Debtors will directly pay or reimburse Farbman for its reasonable and necessary expenses actually incurred in connection with the offer and sale of the Detroit Properties, which will be billed to the Debtors and payable within 30 days of the Court's approval of the expenses as reasonable and necessary. The Debtors and Farbman have agreed to establish a budget for the expenses prior to Farbman incurring the expenses and the total is not expected to exceed $50,000. The Debtors indemnify the Brokers against all losses, damages, expenses, claims, suits and liabilities to the extent arising out of or resulting from the Brokers' negligent or intentional acts or omissions or those of their personnel. Daniel W. Hayes, a principal at DESCO, and Douglas P. Fura, a senior vice president of Farbman, assure the Court that their firms are each "disinterested persons" as that term is defined in Section 101(14) of the Bankruptcy Code. 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: Rejected Dealers Reconsideration Request Untimely --------------------------------------------------------------- Island Jeep Incorporated, Scotia Motors Inc., Golden Motors, John Hine Pontiac, Pen Motors Inc., West End Garage, Mauro Motors, Inc., Bollinger's, Inc., Brother's Motors Inc., St Pete Jeep Chrysler, Rallye Auto Plaza Inc., Neil Huffman Incorporated, Bill Spurlock Dodge, Inc., Rock of Texas Automotive Inc., South Holland Dodge, Pride Chrysler Jeep, Thomas Dodge Corp, Taylor-Parker Motor Company, Evansville Chrysler Inc., and Alley's of Kingsport, Inc., asked the Bankruptcy Court to reconsider its order authorizing the rejection of executory contracts and unexpired leases with certain domestic dealers, and the Court's opinion regarding authorization of that rejection. The Bankruptcy Court has denied in its entirety the Dealers' request for reconsideration of the Rejection Opinion and Order. Bankruptcy Judge Arthur Gonzalez also concluded in his 25-page opinion that the Reconsideration Motion, pursuant to Rule 60(b)(1) of the Federal Rules of Civil Procedure, is untimely. The Court further held that application of the Court's inherent power to grant reconsideration is not warranted under the circumstances. Because the Dealers' allegations do not rise to the level of fraud on the Court, the request for reconsideration, pursuant to Rule 60(d)(3), is denied, Judge Gonzalez maintained. He added that the additional relief sought by the Dealers is not properly before the Court in the context of a motion for reconsideration and those additional relief are denied. In addition to the Dealers' response to the Debtors' objection to the Reconsideration Motion, the Dealers asked the Court to strike Footnote 13 of the objection and further asked that the Court order the Debtors to resubmit their objection without Footnote 13. The Dealers argued that the Footnote improperly attempts to "psychoanalyze the motivations of our clients" in bringing the Request by making reference to news reports, which discuss non- related "Constitutional causes" that have absolutely nothing to do with the Reconsideration Motion. The Dealers added that Footnote 13 is an entirely improper attack upon them and their counsel by way of reference to controversial lawsuits which their counsel have been involved with. Footnote 13 provides that the Debtors have taken note of certain public statements connecting the Reconsideration Motion to a crusade involving the Dealers' counsel to challenge President Barack Obama's legitimacy as President of the United States of America. The Footnote also cited a report that new attempts challenging President Obama's legitimacy as President involves a legal maneuver known as "quo warranto," a prerogative writ requiring the person to whom it is directed to show what authority he has for exercising some right or power he claims to hold. The new attempt centers on the Chrysler bailout, and President Obama's authority to use Troubled Asset Relief Program funds to bail out Chrysler. Although a separate motion by the Dealers would have been the appropriate procedural means by which to address their request, Judge Gonzalez said he will treat the request to strike as a motion, and therefore, directed the Debtors to file a response to that motion. Debtors Comply With Court's Directive In response to the Court's direction and although the Debtors disagree with the Dealers' claims in their Motion to Strike, the Debtors withdraw Footnote 13 from the Objection to resolve the matter and avoid the need for further litigation. The Debtors also tell Judge Gonzalez that the Court can deem the Amended Objection as substituted for the Objection in its original form. The Debtors believe that the withdrawal resolves the Motion to Strike and obviates the need for any further proceedings in this regard. 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: State Court Denies Dealers' Request for Injunction ---------------------------------------------------------------- Old Carco LLC, formerly Chrysler LLC, and Chrysler Group LLC made a third request before the Bankruptcy Court to enforce the protections of the automatic stay in connection with the actions of certain noncompliant dealers, Archer Automotive, Inc., and Archer Volkswagen, Inc., in the Texas District Court, Travis County. Specifically, the Noncompliant Dealers, whose dealership agreements were properly rejected by the Rejection Order, sought and obtained a temporary restraining order, and were seeking a temporary injunction, from the State Court enjoining the Texas Department of Motor Vehicles from processing and issuing dealer licenses to New Chrysler's dealer candidates anywhere in Fort Bend and Harris Counties -- the counties where the Noncompliant Dealers formerly operated Chrysler, Jeep and Dodge dealerships. Corinne Ball, Esq., at Jones Day, in New York, relates that after the Debtors filed the Third Enforcement Motion, the Noncompliant Dealers' request for temporary injunction has been denied by the State Court. Accordingly, the Debtors and New Chrysler withdraw the Third Enforcement Motion at this time, without prejudice. However, the Debtors and New Chrysler expressly reserve their right to seek any form of relief, including, but not limited to, attorneys' fees and costs, against the Noncompliant Dealers or any other party that asserts claims or pursues actions in any non-bankruptcy forum. 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) CINCINNATI BELL: Peninsula Capital Holds 6.40% of Class A Shares ---------------------------------------------------------------- Peninsula Capital Advisors, LLC, and Peninsula Investment Partners, L.P., disclosed that as of December 31, 2009, they may be deemed to beneficially own 13,000,000 shares or roughly 6.40% of the Class A common stock of Cincinnati Bell Inc. Headquartered in Cincinnati, Ohio, Cincinnati Bell Inc. (NYSE: CBB) -- http://www.cincinnatibell.com/-- provides integrated communications solutions-including local, long distance, data, Internet, and wireless services. In addition, the Company provides office communications systems as well as complex information technology solutions including data center and managed services. Cincinnati Bell conducts its operations through three business segments: Wireline, Wireless, and Technology Solutions. As of Sept. 30, 2009, the Company had $2.01 billion in total assets against $2.62 billion in total liabilities, resulting in $614.0 million in stockholders' deficit. Cincinnati Bell carries Fitch's 'B+' Issuer Default Rating. CINCINNATI BELL: Vanguard Group Holds 6.87% of Class A Shares ------------------------------------------------------------- The Vanguard Group Inc. disclosed that as of December 31, 2009, it may be deemed to beneficially own 13,947,850 shares or roughly 6.87% of the common stock of Cincinnati Bell Inc. Headquartered in Cincinnati, Ohio, Cincinnati Bell Inc. (NYSE: CBB) -- http://www.cincinnatibell.com/-- provides integrated communications solutions-including local, long distance, data, Internet, and wireless services. In addition, the Company provides office communications systems as well as complex information technology solutions including data center and managed services. Cincinnati Bell conducts its operations through three business segments: Wireline, Wireless, and Technology Solutions. As of Sept. 30, 2009, the Company had $2.01 billion in total assets against $2.62 billion in total liabilities, resulting in $614.0 million in stockholders' deficit. Cincinnati Bell carries Fitch's 'B+' Issuer Default Rating. CMR MORTGAGE: Court Continues Plan Outline Hearing to April 1 ------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of California will continue hearing until April 1, 2010, at 9:30 a.m., the approval of CMR Mortgage Fund II, LLC, and CMR Mortgage Fund III, LLC's proposed Disclosure Statement for their Chapter 11 Plan. The hearing will be held at San Francisco Courtroom 23. The Debtors will begin soliciting votes on the Plan following approval of the adequacy of the information in the Disclosure Statement. As reported in the Troubled Company Reporter on Oct. 23, 2009, the Plan provides that substantially all secured and unsecured creditors will be paid in full over a maximum seven-year term, members of the Debtors will retain their membership interests or voluntarily exchange the interests for debt as provided for in the Plan, and the Debtors will eventually begin to return capital to members of the Debtors. Distributions under the Plan will be funded by sales or Joint Ventures of real property, loans secured by real property and payoffs by borrowers. There are only two secured claims against assets held by CMR Fund II, which claims will be paid from the proceeds of the sale or refinance of the underlying assets or satisfied by forfeiture of the assets. There are no secured claims against assets held by CMR Fund III. The Debtors intend to obtain DIP Financing in order to fund business operations, however, the DIP Financing will not be used to make distributions under the Plan. The Plan further provides that the Debtors will restructure their members' equity interests and reduce the number of members of each Debtor to less than 300 in order to enable the Debtors to terminate the requirement to register their securities with Section 12(g)(4) of the Securities and Exchange Act of 1934 and to file reports as a public company. In order to accomplish the restructuring, the Debtors will offer some or all members the option of exchanging their membership interest for unsecured debt. Imperial Capital Bank will retain its lien against the Sand City Property. CMR Fund II intends to sell or refinance the Sand City Property and pay Imperial Capital Bank's Allowed Secured Claim in full. Imperial Capital Bank holds a first priority lien against the Sand City Property. In addition to the lien which was foreclosed upon, CMR Fund II holds a second position lien against the Sand City Property in the amount of $10,000,000. A third position lien against the Sand City Property in the amount of $10,000,000 is jointly held by CMR Fund I (97%) and CMR Fund III (3%). The Plan also proposes that CMR Income Fund, LLC, a California limited liability company, and Wells Fargo Foothill, Inc. will retain their jointly-held lien against Fund II's lien against the Wheatland Property and its membership interests in Wheatland Holdings. CMR Fund II intends to sell or refinance the Wheatland Property and pay the Allowed Class 2A Claim in full. Income Fund and Wells Fargo Foothill, Inc. hold a lien in the amount of $23,333,777 against CMR Fund II's lien against the Wheatland Property and its membership interest in Wheatland Holdings. A full-text copy of the Debtor's Disclosure Statement is available for free at http://bankrupt.com/misc/CMRMortgage_DS.pdf A full-text copy of the Debtor's Joint Plan of Reorganization is available for free at: http://bankrupt.com/misc/CMRMortgage_JointPlan.pdf San Francisco, California-based CMR Mortgage Fund II, LLC, is a limited liability company organized for the purpose of making or investing in business loans secured by deeds of trust or mortgages on real properties located primarily in California. The Company previously funded lending activities through loan pay downs or pay offs, as well as by selling its membership interests, and by selling all or a portion of interests in the loans to individual investors. The Company commenced operations in February 2004. The Company ceased accepting new members in the third quarter of 2006. The Company and CMR Mortgage Fund III, LLC, filed for Chapter 11 protection on March 31, 2009 (Bankr. N. D. Calif. Case No. 09- 30788 and 09-30802). Robert G. Harris, Esq., at the Law Offices of Binder and Malter, represents the Debtor as counsel. The Debtor listed between $10 million and $50 million each in assets and debts. COMPUTER SYSTEMS: Gets Final OK to Use Lenders Cash Collateral -------------------------------------------------------------- The Hon. Randolph Baxter of the U.S. Bankruptcy Court for the District of Ohio authorized, on a final basis, Computer Systems Company, Inc., and its subsidiary R4, LLC, to: -- access cash collateral securing repayment of obligations with Huntington Bank, SWPelham Fund L.P. and Development Capital Ventures, LP, and the IRS; and -- grant adequate protection to prepetition lenders. As of the petition date, the Debtors owed Huntington not less than $13,700,000, which was secured by a perfected, first priority security interest in substantially all of the Debtors' assets. IRS also asserts that it has a perfected first priority lien on certain of the Debtors' account receivable by virtue of filing notices of tax lien. The Debtors would use the money to fund their Chapter 11 case, pay suppliers and other parties. As reported in the Troubled Company Reporter on November 25, 2009, in exchange for using the cash collateral, the Debtors will grant, as adequate protection, to: (i) Huntington Bank, the Senior Lender, monthly interest payments as set forth in the Budget and continuing valid, binding, enforceable and perfected, replacement liens and security interests in and on all of the post-petition assets of the Debtors to the same extent, amount and priority as the Senior Lender's liens existed pre- petition without the necessity of any filing of any UCC Financing Statement or other document. Computer Systems has a senior, secured credit facility with the Senior Lender that, as amended, includes a revolving loan in the maximum amount of $13,000,000 and a term loan in the maximum amount of $1,500,000. (ii) SWPelham Fund L.P. and Development Capital Ventures, LP -- the Subordinated Noteholders -- and the IRS continuing valid, binding, enforceable and perfected, replacement liens and security interests in and on all of the post- petition assets of the Debtors to the same extent, amount and priority as the Subordinated Noteholder and the IRS liens existed pre-petition without the necessity of any filing of any UCC Financing Statement or other document. Computer Systems obtained additional loans from the Subordinated Noteholders in the original principal amount of $5,000,000 pursuant to the issuance of secured notes which were subordinated to the First Senior Credit Facility. The Debtors' access to the cash collateral will terminate on (i) June 30, 2010, or (ii) the occurrence of an event of default. Subject to the notice and cure requirements, any and all of IRS' obligations will terminate and IRS may prosecuted its administrative remedies, upon the Debtors' failure to (i) timely maka adequate protection payments, (ii) timely file any postpetition federal tax returns, or (iii) timely pay any postpetition federal tax liabilities. About Computer Systems Strongsville, Ohio-based Computer Systems Co., also known as CSC Group, is a provider of information management software for health-care providers. The Company and its subsidiary, R4, LLC, filed for Chapter 11 bankruptcy on November 13, 2009 (Bankr. N.D. Ohio Case No. 09-20802). Computer Systems said that its assets were $49.1 million and debt was $33.9 million at September 30, 2009. CONSECO INC: Paulson & Co. Owns 9.7% of Common Stock ---------------------------------------------------- Paulson & Co. Inc., et al., disclose that as of February 2, 2010, they collectively beneficially own 24,455,000 shares of Conseco Inc's common stock representing 9.7% of the outstanding common shares: Shares Beneficially Company Owned Percentage ------- ------------ ---------- Paulson & Co. Inc. 24,455,000 9.7% Paulson Advantage Master Ltd. 4,640,931 1.8% Paulson Advantage Plus Master Ltd. 10,014,501 4.0% Paulson Advantage Select Master Fund Ltd. 99,568 <0.1% Paulson Recovery Master Fund Ltd. 9,700,000 3.9% John Paulson 24,455,000 9.7% A full-text copy of the amended Schedule 13-G is available at no charge at http://researcharchives.com/t/s?5494 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." CONTINENTAL AIRLINES: FMR, Fidelity Hold 15.598% of Class B Shares ------------------------------------------------------------------ FMR LLC disclosed that it may be deemed to beneficially own 21,791,255 shares or roughly 15.598% of the Class B common stock of Continental Airlines Inc. Fidelity Management & Research Company, a wholly owned subsidiary of FMR LLC, is the beneficial owner of 21,018,423 shares or 15.044% of Continental's Class B shares. The number of Class B Continental shares included 485,032 shares of Class B Common Stock resulting from the assumed conversion of $9,640,000 principal amount of CONTINENTL AIR CONV 4.5% 1/15 (50.3145 shares of Class B Common Stock for each $1,000 principal amount of debenture). The ownership of one investment company, Fidelity Capital Appreciation Fund, amounted to 9,662,014 shares or 6.916% of the Class B Common Stock outstanding. Edward C. Johnson 3d and FMR LLC, through its control of Fidelity, and the funds each has sole power to dispose of the 21,018,423 shares owned by the Funds. In its 2009 annual report on Form 10-K, Continental said as of February 16, 2010, there were 18,890 holders of record of its common stock. Continental said it paid no cash dividends on the common stock during 2009 or 2008, and has no current intention of doing so. About Continental Airlines Continental Airlines Inc. (NYSE: CAL) -- http://www.continental.com/-- is the world's fifth largest airline. Continental, together with Continental Express and Continental Connection, has more than 2,400 daily departures throughout the Americas, Europe and Asia, serving 130 domestic and 132 international destinations. Continental is a member of Star Alliance, which provides access to more than 900 additional points in 169 countries via 24 other member airlines. With more than 41,000 employees, Continental has hubs serving New York, Houston, Cleveland and Guam, and together with its regional partners, carries roughly 63 million passengers per year. At December 31, 2009, Continental had total assets of $12.781 billion against total current liabilities of $4.389 billion; long- term debt and capital leases of $5.291 billion; deferred income taxes of $203 million; accrued pension liability of $1.248 billion; accrued retiree medical benefits of $216 million; and other liabilities of $844 million. At December 31, 2009, the Company had accumulated deficit of $442 million, accumulated other comprehensive loss of $1.185 billion and stockholders' equity of $590 million. The December 31 balance sheet showed strained liquidity: Continental had total current assets of $4.373 billion against total current liabilities of $4.389 billion. * * * As reported by the Troubled Company Reporter on September 4, 2009, Standard & Poor's Ratings Services lowered its issue-level ratings on all senior unsecured debt of Continental to 'CCC+' from 'B-' and revised the recovery ratings on certain unsecured debt issues, excluding industrial revenue bonds, to '6' from '5'. At the same time, S&P affirmed its 'B' corporate credit rating and secured debt ratings on Continental. The ratings on Continental's unsecured debt are based principally on declining aircraft values caused by the global aviation downturn. This could result in reduced asset protection for unsecured creditors if Continental were to file for bankruptcy. Continental continues to carry Moody's Investors Service's B2 corporate family and Fitch Ratings' 'B-' Issuer Default Rating and 'CC/RR6' from 'CCC/RR6' senior unsecured rating. CONTINENTAL AIRLINES: Wellington Holds 5.06% of Class B Shares -------------------------------------------------------------- Wellington Management Company, LLP, in its capacity as investment adviser, may be deemed to beneficially own 7,012,327 shares or 5.06% of the Class B common stock of Continental Airlines Inc. In its 2009 annual report on Form 10-K, Continental said as of February 16, 2010, there were 18,890 holders of record of its common stock. Continental said it paid no cash dividends on the common stock during 2009 or 2008, and has no current intention of doing so. About Continental Airlines Continental Airlines Inc. (NYSE: CAL) -- http://www.continental.com/-- is the world's fifth largest airline. Continental, together with Continental Express and Continental Connection, has more than 2,400 daily departures throughout the Americas, Europe and Asia, serving 130 domestic and 132 international destinations. Continental is a member of Star Alliance, which provides access to more than 900 additional points in 169 countries via 24 other member airlines. With more than 41,000 employees, Continental has hubs serving New York, Houston, Cleveland and Guam, and together with its regional partners, carries roughly 63 million passengers per year. At December 31, 2009, Continental had total assets of $12.781 billion against total current liabilities of $4.389 billion; long- term debt and capital leases of $5.291 billion; deferred income taxes of $203 million; accrued pension liability of $1.248 billion; accrued retiree medical benefits of $216 million; and other liabilities of $844 million. At December 31, 2009, the Company had accumulated deficit of $442 million, accumulated other comprehensive loss of $1.185 billion and stockholders' equity of $590 million. The December 31 balance sheet showed strained liquidity: Continental had total current assets of $4.373 billion against total current liabilities of $4.389 billion. * * * As reported by the Troubled Company Reporter on September 4, 2009, Standard & Poor's Ratings Services lowered its issue-level ratings on all senior unsecured debt of Continental to 'CCC+' from 'B-' and revised the recovery ratings on certain unsecured debt issues, excluding industrial revenue bonds, to '6' from '5'. At the same time, S&P affirmed its 'B' corporate credit rating and secured debt ratings on Continental. The ratings on Continental's unsecured debt are based principally on declining aircraft values caused by the global aviation downturn. This could result in reduced asset protection for unsecured creditors if Continental were to file for bankruptcy. Continental continues to carry Moody's Investors Service's B2 corporate family and Fitch Ratings' 'B-' Issuer Default Rating and 'CC/RR6' from 'CCC/RR6' senior unsecured rating. CRESCENT RESOURCES: Committee Against Executive Bonuses ------------------------------------------------------- Bill Rochelle at Bloomberg News reports that the Official Committee of Unsecured Creditors in Crescent Resources LLC's is objecting to management's request for a $4 million bonus program. The U.S. Trustee has earlier filed an objection to the proposed bonus program, calling the payments a retention plan for insiders. The Creditors Committee proposes that the bonuses be built into what it calls the "egregiously inequitable" and "unconfirmable" reorganization plan where unsecured creditors receive nothing aside from recoveries by a litigation trust. Crescent Resources 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 will depend on whether the company meets cash-flow targets. About Crescent Resources 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. 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. CROSS CANYON: Gets Final OK to Use CIT Capital's Cash Collateral ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Texas, in a final order, authorized Cross Canyon Energy Corp. to use the cash collateral securing their obligation to CIT Capital and other lenders. The Debtor acknowledged that as of the petition date, it was indebted to the administrative agents and other lenders: a) $11,500,000 plus accrued and unpaid interest of $488,184 and costs and expenses, pursuant to the amended and restated credit agreement dated September 2, 2008; and b) $22,000,000 plus accrued and unpaid interest of $1,450,396 and costs and expenses, pursuant to the second lien term loan agreement dated September 2, 2008. The Debtor would use the money to fund its Chapter 11 case, pay suppliers and other parties. As reported in the Troubled Company Reporter on February 9, 2010, in exchange for using the cash collateral, the Debtors propose to grant CIT Capital: (a) continuing, valid, binding, enforceable, non-avoidable and automatically and properly perfected first priority security interests in and liens (collectively, the "Adequate Protection Liens") on all Prepetition Collateral. The Debtor further proposed that the Adequate Protection Liens, subject to entry of a Final Order, will have recourse to the proceeds or property recovered in respect of any Avoidance Actions, any and all hereafter acquired assets and real and personal property of the Debtor, together with any proceeds thereof (the Collateral). The Adequate Protection Liens will be senior and prior to all other interests or liens whatsoever in or on the Collateral, and will be subject and subordinate only to a carve-out for case professionals and valid, perfected and unavoidable liens or security interests on the Petition Date or liens perfected after the Petition Date the priority and perfection of which relates back to a date before the Petition Date; (b) a superpriority administrative expense claim with priority in this case, and otherwise, over all administrative expense claims and unsecured claims whether in existence on or arising after the Petition Date against the Debtor and its estate of any kind or nature whatsoever, subject only to the Carve-Out; and (c) reimbursement of CIT Capital for its reasonable out-of- pocket expenses incurred both before the Petition Date and during the case. As adequate protection to any other secured creditor of the estate that may exist, a replacement security interest and lien in the Debtor's postpetition collateral in the same amount, and with the same validity and priority as the lien had as of the Petition Date. The Debtor and CIT reserve all rights to contest the amount, validity and priority of any and all liens and security interests asserted by the other secured creditors. The Debtors' access to the cash collateral will terminate on (i) March 31, 2010; and (ii) on the occurrence of a termination event. Spring, Texas-based Cross Canyon Energy Corp., fdba ABC Funding, Inc., filed for Chapter 11 bankruptcy protection on January 29, 2010 (Bankr. S.D. Texas Case No. 10-30747). Rhett G. Campbell, Esq., at Thompson & Knight, 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. DAZ VINEYARDS: Files Schedules of Assets & Liabilities ------------------------------------------------------ DAZ Vineyards, LLC, has filed with the U.S. Bankruptcy Court for the Central District of California its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ------ ----------- A. Real Property $12,200,000 B. Personal Property $19,871,232 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $11,185,299 E. Creditors Holding Unsecured Priority Claims $40,682 F. Creditors Holding Unsecured Non-priority Claims $192,356 ------------- ---------- TOTAL $32,071,232 $11,418,337 Los Olivos, California-based DAZ Vineyards, LLC, dba Demetria Estate Winery, filed for Chapter 11 bankruptcy protection on February 15, 2010 (Bankr. C.D. Calif. Case No. 10-10689). William C. Beall, Esq., at Beall and Burkhardt, assists the Company in its restructuring effort. DAZ VINEYARDS: Taps Beall & Burkhardt as Bankruptcy Counsel ----------------------------------------------------------- DAZ Vineyards, LLC, have sought authorization from the U.S. Bankruptcy Court for the Central District of California to employ Beall & Burkhardt as bankruptcy counsel. Beall & Burkhardt will, among other things: a. meet with the Debtor concerning the initial filing requirements of a Chapter 11 case; b. represent the Debtor in hearings and meetings before the Court; c. prosecute and defend appropriate adversary proceedings in the Court; and d. prepare a disclosure statement and plan of reorganization. Beall & Burkhardt will be paid based on the hourly rates of its personnel: William C. Beall $395 Eric W. Burkhardt $375 William C. Beall, a partner at Beall & Burkhardt, assures the Court that the firm is "disinterested" as that term is defined in Section 101(14) of the Bankruptcy Code. Los Olivos, California-based DAZ Vineyards, LLC, dba Demetria Estate Winery, filed for Chapter 11 bankruptcy protection on February 15, 2010 (Bankr. C.D. Calif. Case No. 10-10689). The Company, according to the schedules, has assets of $32,071,232, and total debts of $11,418,337. DOMINO'S PIZZA: Cedar Rock Capital Reports 4.62% Stake ------------------------------------------------------ Cedar Rock Capital LLC disclosed that as of December 31, 2009, it may be deemed to beneficially own 2,699,087 shares or roughly 4.62% of the common stock of Domino's Pizza, Inc. Founded in 1960, Ann Arbor, Michigan-based Domino's Pizza, Inc. (NYSE: DPZ) -- http://www.dominos.com/-- is the recognized world leader in pizza delivery. Through its primarily locally owned and operated franchised system, Domino's operates a network of 8,886 franchised and Company-owned stores in the United States and over 60 international markets. The Domino's Pizza((R)) brand, named a Megabrand by Advertising Age magazine, had global retail sales of over $5.5 billion in 2008, comprised of nearly $3.1 billion domestically and over $2.4 billion internationally. During the third quarter of 2009, the Domino's Pizza((R)) brand had global retail sales of over $1.2 billion, comprised of over $672 million domestically and over $570 million internationally. As of September 6, 2009, the Company had $443.7 million in total assets against $156.9 million in total current liabilities and $1.636 billion in total long-term liabilities, resulting in $1.350 billion in stockholders' deficit. DOMINO'S PIZZA: TAMRO Capital Reports 5% Equity Stake ----------------------------------------------------- TAMRO Capital Partners LLC disclosed that as of December 31, 2009, it may be deemed to beneficially own 2,919,601 shares or roughly 5% of the common stock of Domino's Pizza, Inc. Founded in 1960, Ann Arbor, Michigan-based Domino's Pizza, Inc. (NYSE: DPZ) -- http://www.dominos.com/-- is the recognized world leader in pizza delivery. Through its primarily locally owned and operated franchised system, Domino's operates a network of 8,886 franchised and Company-owned stores in the United States and over 60 international markets. The Domino's Pizza((R)) brand, named a Megabrand by Advertising Age magazine, had global retail sales of over $5.5 billion in 2008, comprised of nearly $3.1 billion domestically and over $2.4 billion internationally. During the third quarter of 2009, the Domino's Pizza((R)) brand had global retail sales of over $1.2 billion, comprised of over $672 million domestically and over $570 million internationally. As of September 6, 2009, the Company had $443.7 million in total assets against $156.9 million in total current liabilities and $1.636 billion in total long-term liabilities, resulting in $1.350 billion in stockholders' deficit. DOYLE HEATON: Files Schedules of Assets & Liabilities ----------------------------------------------------- Doyle D. Heaton and Mary K. Heaton have filed with the U.S. Bankruptcy Court for the Northern District of California its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ------ ----------- A. Real Property $ 11,955,000 B. Personal Property $7,331,631 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $13,228,028 E. Creditors Holding Unsecured Priority Claims $66,436 F. Creditors Holding Unsecured Non-priority Claims $118,661,304 ------------- -------------- TOTAL $19,286,631 $131,955,768 Pleasant Hill, California-based Doyle D. Heaton and Mary K. Heaton filed for Chapter 11 protection on January 11, 2010 (Bankr. N.D. Calif. Case No. 10-40297). Maxim B. Litvak, Esq., at Pachulski, Stang, Ziehl and Jones, assists the Debtors in their restructuring efforts. DOYLE HEATON: Wants to Use Collateral Containing Rental Proceeds ---------------------------------------------------------------- Doyle D. Heaton and Mary K. Heaton have asked for permission from the U.S. Bankruptcy Court for the Northern District of California to use cash collateral consisting of proceeds from rental properties. Maxim B. Litvak, Esq., Pachulski Stang Ziehl & Jones LLP, the attorney for the Debtors, explain that the Debtors will use the money to maintain the Rental Properties, pay or reserve for tax obligations relating to the Rental Properties and, to the extent of any remaining excess proceeds, distribute the proceeds to the first lien lenders on the Rental Properties to be applied against the Debtors' outstanding obligations to the lenders. The Debtors also seek the Court's permission for: (a) any lenders holding interest reserves for the benefit of the Debtors on account of the Rental Properties to utilize, offset or otherwise apply the reserves in their discretion; and (b) any second lien lenders on the Rental Properties to advance funds, in their discretion, to (i) holders of first lien deeds of trust against the Rental Properties for the purpose of paying senior debt service, or (ii) the Debtors for the purpose of maintaining or renovating the Rental Properties for sale. The Debtors say that they won't commingle any of the rental proceeds from any particular Rental Property with another Rental Property, and that only rental proceeds from each individual Rental Property will be utilized for purposes of maintaining that property, paying taxes on that property, and/or making distributions to first lien lenders on account of that property. Each of the Rental Properties is encumbered by first deeds of trust and, in most instances, second deeds of trust. The Debtors believe that each of the Rental Properties is "underwater" from the perspective of the estate in that the secured claims against the Rental Properties exceed the value of the properties. The Debtors intend to liquidate these assets over the next four to six months as part of settlements with their secured creditors that will be incorporated in the Debtors' contemplated plan. In the meantime, the Debtors need to maintain the Rental Properties and to satisfy tax obligations associated with these assets. The Debtors believe that any excess rental proceeds should be distributed to applicable first lien lenders given that the Debtors' estate has no equity in the Rental Properties, and even if there was equity, payment now will minimize accruing interest and fees under the loans at issue. The Court has set a hearing for March 4, 2010, at 2:30 p.m. on the Debtors' request to use cash collateral. Pleasant Hill, California-based Doyle D. Heaton and Mary K. Heaton filed for Chapter 11 protection on January 11, 2010 (Bankr. N.D. Calif. Case No. 10-40297). Maxim B. Litvak, Esq., at Pachulski, Stang, Ziehl and Jones, assists the Debtors in their restructuring efforts. DOYLE HEATON: Taps Pachulski Stang as General Bankruptcy Counsel ---------------------------------------------------------------- Doyle D. Heaton and Mary K. Heaton sought and obtained authorization from the Hon. Edward D. Jellen at the U.S. Bankruptcy Court for the Northern District of California to employ Pachulski Stang Ziehl & Jones LLP as general bankruptcy counsel. Pachulski Stang will, among other things: a. assist, advise, and represent the Debtors in their consultations with creditors regarding the administration of the Debtors' bankruptcy case; b. assist, advise, and represent the Debtors in any manner relevant to a review of the Debtors' leases and other contractual obligations, and asset dispositions; c. assist, advise, and represent the Debtors in any issues associated with the acts, conduct, assets, liabilities, and financial condition of the Debtors; and d. assist, advise, and represent the Debtors in the negotiation, formulation, and drafting of any plan of reorganization and disclosure statement. Pachulski Stang will be paid based on the hourly rates of its personnel: Debra I. Grassgreen $775 Maxim B. Litvak $650 Paralegal Patricia J. Jeffries $235 Pachulski Stang is "disinterested" as that term is defined in Section 101(14) of the Bankruptcy Code. Pleasant Hill, California-based Doyle D. Heaton and Mary K. Heaton filed for Chapter 11 protection on January 11, 2010 (Bankr. N.D. Calif. Case No. 10-40297). Maxim B. Litvak, Esq., at Pachulski, Stang, Ziehl and Jones, assists the Debtors in their restructuring efforts. The Debtors estimated their assets at $10,000,001 to $50,000,000 and debts at $100,000,001 to $500,000,000. DURACO PRODUCT: STAG III Wants Conversion to Chapter 7 ------------------------------------------------------ Plastic News reports that creditor STAG III Streamwood LLC is asking the U.S. Bankruptcy Court in Chicago to convert Duraco Products Inc.'s Chapter 11 case to Chapter 7 liquidation. STAG III claims that Duraco is administratively insolvent and unable to reorganize. STAG, which has a $2 million claim against Duraco, said the Company filed to make payments in early January. Based in Illinois, Duraco Products, Inc. makes molding lawn and garden furniture. The company filed for Chapter 11 protection on November 18, 2008 (Bankr. N.D. Ill. Case No. 08-31353). Keevan D. Morgan, Esq., at Morgan & Bley, Ltd., represents the Debtor in its restructuring efforts. The company has assets of less than $50,000, and debts of between $1 million and $10 million. EAST WEST RESORT: Section 341(a) Meeting Scheduled for April 6 -------------------------------------------------------------- Roberta A. Deangelis, the Acting U.S. Trustee for Region 3, will convene a meeting of creditors in East West Resort Development V, L.P., L.L.L.P., et al.'s Chapter 11 case on April 6, 2010, at 1:00 p.m. The meeting will be held at J. Caleb Boggs Federal Building, 5th Floor, Room 5209, Wilmington, DE 19801. 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. Avon, Colorado-based East West Resort Development V, L.P., L.L.L.P., is a limited partnership between Crescent Resort Development, Inc., and long-standing developer East West Partners, Inc., that was formed to develop residential and commercial real estate projects on and around the Northstar at Tahoe Resort in Lake Tahoe, California. East West Resort filed for Chapter 11 bankruptcy protection on February 16, 2010 (Bankr. D. Delaware Case No. 10-10452), estimating its assets and debts at $100,000,001 to $500,000,000. The Company's affiliates -- Tahoe Club Company, LLC Tahoe Club Company, LLC; Tahoe Mountain Resorts, LLC; NMP Holdings, LLC; Grays Station, LLC; Old Greenwood, LLC; Old Greenwood Realty, Inc.; Northstar Village Townhomes, LLC; Northstar Big Horn, LLC; Northstar Trailside Townhomes, LLC; Northstar Iron Horse, LLC; and Northstar Mountain Properties, LLC -- filed separate Chapter 11 petitions. Dana L. Reynolds, Esq.; Daniel J. DeFranceschi, Esq.; and Paul N. Heath, Esq., at Richards, Layton & Finger, P.A., assist the Debtors in their restructuring efforts. The Debtors' financial advisor is Houlihan Lokey Howard & Zukin Capital, Inc. The Debtors' claims agent is Epiq Bankruptcy Solutions. EAST WEST RESORT: Taps Paul Hastings as Bankruptcy Counsel ---------------------------------------------------------- East West Resort Development V, L.P., L.L.L.P., et al., have sought permission from the U.S. Bankruptcy Court for the District of Delaware to employ Paul, Hastings, Janofsky & Walker LLP as bankruptcy counsel, nunc pro tunc to the Petition Date. Paul Hastings will, among other things: a. prepare necessary and appropriate applications, motions, proposed orders, pleadings, notices, schedules and other documents, and review financial and other reports to be filed in the bankruptcy cases; b. advise the Debtors and assist them in the negotiation and documentation of, financing agreements and related transactions; c. review the nature and validity of any liens asserted against the Debtors' property and advise the Debtors concerning the enforceability of the liens; and d. advise the Debtors with the formulation, negotiation and promulgation of a plan or plans of reorganization, and related transactional documents. Richard A. Chesley, a member of Paul Hastings, says that the firm will be paid based on the hourly rates of its personnel: Richard A. Chesley, Partner $935 Gregory S. Otsuka, Associate $655 Hilla Uribe Jimenez, Associate $475 Aaron M. Paushter, Associate $360 Jamie Brown, Case Assistant $205 Mr. Chesley assures the Court that Paul Hastings is "disinterested" as that term is defined in Section 101(14) of the Bankruptcy Code. Avon, Colorado-based East West Resort Development V, L.P., L.L.L.P., is a limited partnership between Crescent Resort Development, Inc., and long-standing developer East West Partners, Inc., that was formed to develop residential and commercial real estate projects on and around the Northstar at Tahoe Resort in Lake Tahoe, California. East West Resort filed for Chapter 11 bankruptcy protection on February 16, 2010 (Bankr. D. Delaware Case No. 10-10452), estimating its assets and debts at $100,000,001 to $500,000,000. The Company's affiliates -- Tahoe Club Company, LLC Tahoe Club Company, LLC; Tahoe Mountain Resorts, LLC; NMP Holdings, LLC; Grays Station, LLC; Old Greenwood, LLC; Old Greenwood Realty, Inc.; Northstar Village Townhomes, LLC; Northstar Big Horn, LLC; Northstar Trailside Townhomes, LLC; Northstar Iron Horse, LLC; and Northstar Mountain Properties, LLC -- filed separate Chapter 11 petitions. The Debtors' financial advisor is Houlihan Lokey Howard & Zukin Capital, Inc. The Debtors' claims agent is Epiq Bankruptcy Solutions. EAST WEST RESORT: Wants to Hire Richards Layton as Co-Counsel ------------------------------------------------------------- East West Resort Development V, L.P., L.L.L.P., et al., have asked for authorization from the U.S. Bankruptcy Court for the District of Delaware to employ Richards, Layton & Finger, P.A., as co- counsel, nunc pro tunc to the Petition Date. RL&F will: a. advise the Debtors of their rights, powers and duties as debtors and debtors-in-possession; b. take necessary action to protect and preserve the Debtors' estates, including the prosecution of actions on the Debtors' behalf, the defense of any actions commenced against the Debtors, the negotiation of disputes in which the Debtors are involved, and the preparation of objections to claims filed against the Debtors' estates; c. prepare necessary motions, applications, answers, orders, reports and papers in connection with the administration of the Debtors' estates; and d. perform other necessary legal services in connection with the bankruptcy cases. Paul N. Heath, a director of RL&F, says that the firm will be paid based on the hourly rates of its personnel: Daniel J. DeFranceschi $600 Paul N. Heath $525 Dana L. Reynolds $290 Jaime Schairer $195 Mr. Heath assures the Court that RL&F is "disinterested" as that term is defined in Section 101(14) of the Bankruptcy Code. Avon, Colorado-based East West Resort Development V, L.P., L.L.L.P., is a limited partnership between Crescent Resort Development, Inc., and long-standing developer East West Partners, Inc., that was formed to develop residential and commercial real estate projects on and around the Northstar at Tahoe Resort in Lake Tahoe, California. East West Resort filed for Chapter 11 bankruptcy protection on February 16, 2010 (Bankr. D. Delaware Case No. 10-10452), estimating its assets and debts at $100,000,001 to $500,000,000. The Company's affiliates -- Tahoe Club Company, LLC Tahoe Club Company, LLC; Tahoe Mountain Resorts, LLC; NMP Holdings, LLC; Grays Station, LLC; Old Greenwood, LLC; Old Greenwood Realty, Inc.; Northstar Village Townhomes, LLC; Northstar Big Horn, LLC; Northstar Trailside Townhomes, LLC; Northstar Iron Horse, LLC; and Northstar Mountain Properties, LLC -- filed separate Chapter 11 petitions. The Debtors' financial advisor is Houlihan Lokey Howard & Zukin Capital, Inc. The Debtors' claims agent is Epiq Bankruptcy Solutions. EAST WEST RESORT: Wants Epiq Bankruptcy Solutions as Claims Agent ----------------------------------------------------------------- East West Resort Development V, L.P., L.L.L.P., et al., sought and obtained authorization from the Hon. Brendan L. Shannon of the U.S. Bankruptcy Court for the District of Delaware to employ Epiq Bankruptcy Solutions, LLC, as claims, noticing and balloting agent. Epiq will, among other things: a. prepare and serve notices required in the Debtors' bankruptcy cases; b. maintain copies of proofs of claim and proofs of interest filed in the Debtors' bankruptcy cases; c. maintain the official claims register; and d. maintain an up-to-date mailing list of creditors and all entities who have filed proofs of claim or interest and/or requests for notices in the Debtors' bankruptcy cases. Epiq will be compensated based on its services agreement with the Debtors. A copy of the agreement is available for free at: http://bankrupt.com/misc/EASTWESTRESROT_claimsagentpact.pdf Daniel C. McElhinney, the executive director of Epiq, assures the Court that the firm is "disinterested" as that term is defined in Section 101(14) of the Bankruptcy Code. Avon, Colorado-based East West Resort Development V, L.P., L.L.L.P., is a limited partnership between Crescent Resort Development, Inc., and long-standing developer East West Partners, Inc., that was formed to develop residential and commercial real estate projects on and around the Northstar at Tahoe Resort in Lake Tahoe, California. East West Resort filed for Chapter 11 bankruptcy protection on February 16, 2010 (Bankr. D. Delaware Case No. 10-10452), estimating its assets and debts at $100,000,001 to $500,000,000. The Company's affiliates -- Tahoe Club Company, LLC Tahoe Club Company, LLC; Tahoe Mountain Resorts, LLC; NMP Holdings, LLC; Grays Station, LLC; Old Greenwood, LLC; Old Greenwood Realty, Inc.; Northstar Village Townhomes, LLC; Northstar Big Horn, LLC; Northstar Trailside Townhomes, LLC; Northstar Iron Horse, LLC; and Northstar Mountain Properties, LLC -- filed separate Chapter 11 petitions. Dana L. Reynolds, Esq.; Daniel J. DeFranceschi, Esq.; and Paul N. Heath, Esq., at Richards, Layton & Finger, P.A., assist the Debtors in their restructuring efforts. The Debtors' financial advisor is Houlihan Lokey Howard & Zukin Capital, Inc. The Debtors' claims agent is Epiq Bankruptcy Solutions. EASTMAN KODAK: Legg Mason Owns 20.80% of Common Stock ----------------------------------------------------- Legg Mason Capital Management, Inc.; LMM LLC; Legg Mason Value Trust, Inc.; and Legg Mason Opportunity Trust disclosed that as of December 31, 2009, they may be deemed to beneficially own 55,783,199 shares or roughly 20.80% of the common stock of Eastman Kodak Company. Headquartered in Rochester, New York, Eastman Kodak Company (NYSE:EK) -- http://www.kodak.com/-- provides imaging technology products and services to the photographic and graphic communications markets. As of December 31, 2009, the Company had total assets of $7.691 billion against total liabilities of $7.724 billion, resulting in shareholders' deficit of $35 million. On February 19, 2010, Moody's revised its rating outlook on the Company from negative to stable, and affirmed its B3 corporate rating and Caa1 senior unsecured rating. On February 11, 2010, S&P revised its B- rating outlook on the Company to stable from negative. All ratings on the Company, including the B- Corporate Rating, were affirmed. ELECTROGLAS INC: Wants to Have Until May 7 to Propose Plan ---------------------------------------------------------- Electroglas, Inc., and Electroglas International, Inc., ask the U.S. Bankruptcy Court for the District of Delaware to extend their exclusive periods to file and solicit acceptances of a plan of liquidation until May 7, 2010, and August 6, 2010, respectively. This is the Debtors' second request for exclusivity extension. Absent the extension, the Debtors' plan filing period will expire on March 8, 2010, and their solicitation period will expire on May 7, 2010. The Debtors relate that they needed additional time to review the remaining assets and potential claims that will likely be asserted against the estates to determine the structure of the eventual plan. The Debtors propose a hearing on this motion on March 17, 2010, at 3:00 p.m. Objections, if any, are due on March 2, 2010, at 4:00 p.m. 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. ENNIS HOMES: Targets April 2 Confirmation on Reorganization Plan ---------------------------------------------------------------- Ennis Homes, Inc., released the schedule in connection with the solicitation of votes on, and the confirmation of, the Plan of Reorganization. The Debtor received approval from the Hon. Whitney Rimel of the U.S. Bankruptcy Court for the Eastern District of California of the adequacy of the disclosure statement for its amended Plan dated as of February 12, 2010. The Bankruptcy Court approval of the Debtor's disclosure statement allows the Debtor to commence the solicitation of votes for confirmation of its Plan. Plan materials and ballots was scheduled for mailing on February 17, 2010. The deadline for returning completed ballots is 5:00 p.m. EST on March 18, 2010. Objections, if any, to confirmation of the Plan must be received by the Court and notice parties no later than March 18, 2010. A hearing to consider confirmation of the Plan is scheduled for April 2, 2010, at 11:00 a.m. A full-text copy of the Disclosure Statement is available for free at http://bankrupt.com/misc/EnnisHomes_AmendedDS.pdf Ennis Homes Inc. is a homebuilder in California. Ennis Homes was founded in 1979 by Ben Ennis and has become one of the largest family owned homebuilders in the Central Valley,. Son Brian Ennis serves as President and daughter Pam Ennis acts as Vice President- Marketing of the Company. Ennis Homes Inc. filed for Chapter 11 on Feb. 3, 2009 (Bankr. E.D. Calif. Case No. 09-10848). Hagop T. Bedoyan, Esq., and Jacob L. Eaton, Esq., represent the Debtor as counsel. In its petition, Ennis Homes listed between $100 million and $500 million each in assets and debts. ENRON CORP: Savings Plan Begins Distribution from Newby Settlement ------------------------------------------------------------------ When Enron filed for bankruptcy in December 2001, thousands of employees lost not only their jobs but also the retirement savings they had invested in Enron stock through the Enron Corp. Savings Plan (Savings Plan) and the Enron Corp. Employee Stock Ownership Plan (ESOP). Today, many of those people are recovering at least a portion of what they lost as the Savings Plan begins to distribute more than $70 million in proceeds of the plan's claims in the settlement of the class action law suit, Newby v. Enron Corp. (Newby), in the United States District Court for the Southern District of Texas. More than 16,500 participants and beneficiaries who acquired Enron stock through the Savings Plan and ESOP are eligible for a distribution from the Savings Plan as a result of the Newby settlement. Notices were mailed from the Savings Plan on February 12, 2010, to more than 14,000 people informing them that they can elect to take their settlement in cash or roll it over to an Individual Retirement Account (IRA) or another employer's qualified retirement plan. In addition, more than 2,500 people will have money transferred to their accounts in successor plans sponsored by companies including Portland General Electric Company in Portland, Oregon. When Carole Blanton of Orlando, Florida, received notification of her distribution from the Savings Plan this week she said, "It may not be much, but it was more than we expected. The Enron settlement money is so appreciated." Under an agreement between Enron and the U.S. Department of Labor, Fiduciary Counselors Inc. was appointed as the independent fiduciary to act for the Savings Plan and ESOP in connection with Newby. Fiduciary Counselors filed the Newby claims on behalf of the plans. Fiduciary Counselors also has filed claims on behalf of the Savings Plan and ESOP with the Enron Victim Trust, which is responsible for processing claims related to money recovered by the U.S. Securities and Exchange Commission on behalf of Enron investors. It is anticipated that additional amounts will be distributed in the future from both the Newby settlement and the Enron Victim Trust, and former Enron employees who acquired stock through the plans should keep their addresses up to date at http://www.enronsavingsplan.com. Fiduciary Counselors periodically posts updates at http://www.enron.planfiduciary.com. Fiduciary Counselors Inc. is an investment adviser registered with the U.S. Securities and Exchange Commission (SEC) that primarily acts as an independent fiduciary for employee benefit plans and other institutional investors. Fiduciary Counselors currently has more than $5 billion in assets under management. Fiduciary Counselors acts as independent fiduciary for employer stock in 401(k) and other retirement plans, for plans sponsored by employers in bankruptcy, for litigation settlements involving the employer or in-house fiduciaries and in other situations where in- house or institutional fiduciaries have potential conflicts of interest. About Enron Corp. Based in Houston, Texas, Enron Corporation filed for Chapter 11 protection on December 2, 2001 (Bankr. S.D.N.Y. Case No. 01-16033) following controversy over accounting procedures, which caused Enron's stock price and credit rating to drop sharply. Enron hired lawyers at Togut Segal & Segal LLP; Weil, Gotshal & Manges LLP, Venable; Cadwalader, Wickersham & Taft, LLP for its bankruptcy case. The Official Committee of Unsecured Creditors in the case tapped lawyers at Milbank, Tweed, Hadley & McCloy LLP. The Debtors filed their Chapter Plan and Disclosure Statement on July 11, 2003. On January 9, 2004, they filed their fifth Amended Plan and on the same day the Court approved the adequacy of the Disclosure Statement. On July 15, 2004, the Court confirmed the Debtors' Modified Fifth Amended Plan and that plan was declared effective on November 17, 2004. After the approval of the Plan, the new board of directors decided to change the name of Enron Corp. to Enron Creditors Recovery Corp. to reflect the current corporate purpose. ECRC's sole mission is to reorganize and liquidate certain of the operations and assets of the "pre-bankruptcy" Enron for the benefit of creditors. ECRC has been involved in the MegaClaims Litigation, an action against 11 major banks and financial institutions that ECRC believes contributed to Enron's collapse; the Commercial Paper Litigation, an action involving the recovery of payments made to commercial paper dealers; and the Equity Transactions Litigation, which ECRC filed against Lehman Brothers Holdings, Inc., UBS AG, Credit Suisse and Bear Stearns to recover payments made to the four banks on transactions involving Enron's stock while the company was insolvent. (Enron Bankruptcy News; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). EQUINIX INC: Discloses Proposed $500MM Public Offering of Sr Notes ------------------------------------------------------------------ Equinix, Inc. intends to offer, subject to market and other conditions, $500 million aggregate principal amount of its senior notes due 2018 under an automatically effective shelf registration statement on file with the Securities and Exchange Commission (SEC). The notes will be Equinix's general senior obligations and will rank equal in right of payment to all of its existing and future senior indebtedness and interest will be payable semi- annually. The interest rate, offering price and other terms of the notes will be determined by Equinix and the underwriters. Equinix intends to use the net proceeds from this offering for general corporate purposes, which may include expansion capital expenditures and the repayment of indebtedness, including indebtedness that it expects to assume in connection with its planned acquisition of Switch & Data Facilities Company, Inc. (Switch and Data). Citigroup Global Markets Inc. and J.P. Morgan Securities Inc. are acting as joint book-running managers and BofA Merrill Lynch, Barclays Capital Inc., Goldman, Sachs & Co., ING Financial Markets LLC and RBS Securities Inc. are acting as co-managers for the offering. About Equinix, Inc. Equinix, Inc. -- http://www.equinix.com/-- provides network- neutral colocation, interconnection and managed information technology infrastructure services to enterprises, content providers and financial companies. Through its International Business Exchange (IBX) data centers, across 18 markets in North America, Europe and Asia-Pacific, customers directly interconnect with a network ecosystem of partners and customers. Its services comprises colocation, interconnection and managed IT infrastructure services. Colocation services include cabinets, power, operations space and storage space for customers' colocation needs. Interconnection services include cross connects, as well as switch ports on the Equinix exchange service. Managed IT infrastructure services helps customers to leverage Equinix's telecommunications. In February 2008, it acquired Virtu Secure Webservices B.V. In May 2009, the Company announced the opening of the second phase expansion of its New York-4 IBX data center in Secaucus, New Jersey. * * * As reported in the Troubled Company Reporter on June 12, 2009, Standard & Poor's Ratings Services said it assigned its 'B-' issue-level and '6' recovery ratings to Foster City, California- based data center and interconnection service provider Equinix Inc.'s $325 million of convertible subordinated notes due 2016. EQUINIX INC: Moody's Assigns Corporate Family Rating at 'Ba3' ------------------------------------------------------------- Moody's Investors Service assigned a first-time Ba3 corporate family rating and a Ba3 probability of default rating to Equinix, Inc., along with a SGL-1 liquidity rating indicating very good liquidity. As part of the rating action, Moody's also assigned a Ba2 rating to Equinix's proposed $500 million (gross proceeds) senior unsecured note issuance. The company will use the note issuance proceeds for general corporate purposes, likely to refinance existing debt and enhance its cash balances in advance of the pending acquisition of Switch & Data Facilities, Inc. Issuer: Equinix, Inc. -- Probability of Default Rating, Assigned Ba3 -- Corporate Family Rating, Assigned Ba3 -- Senior Unsecured Regular Bond/Debenture, Assigned Ba2 LGD2- 27% -- Speculative Grade Liquidity, Assigned SGL-1 -- Outlook is Stable Equinix's Ba3 CFR reflects the company's position as the leading global independent data center operator offering carrier-neutral data center and interconnection services to large enterprises, content distributors and global Internet companies. The company is the largest publicly traded carrier-neutral hosting provider in the world, and generated over $882 million in revenues in 2009. Moody's notes that the telecommunications carriers that terminate in Equinix's data centers represent about 90% of global Internet routes. The rating also recognizes the favorable near-term growth trends for data center services across the world, driven by rapidly growing internet usage and the ongoing migration of corporate information technology to IP standards. At the same time, the ratings are tempered by the significant industry risks, intensifying competition and the high capital intensity inherent in the company's business plans, and the company's ongoing expansion which is expected to consume cash resources over the rating horizon. Moody's notes that in addition to favorable near-term industry demand trends, Equinix benefits from business factors that are more positive than for traditional competitive telecommunications companies. Equinix's customer contracts are several years in duration, and the colocation space Equinix provides to its customers is mission critical to their IT infrastructure, leading to very low churn rates. Moody's expects the company to maintain a high level of capital spending, and the company is unlikely to generate positive free cash flow for the foreseeable future. Technology risk is somewhat mitigated by the fact that Equinix does not invest in server capacity. Instead, it provides the built out hosting space, along with security, power and backup facilities to sophisticated customers who have dedicated IT departments to manage their own computing, storage and communications infrastructure inside Equinix data centers. Equinix's SGL-1 liquidity rating indicates very good liquidity. Over the 4-quarter horizon to December 31, 2010 Equinix's main source of liquidity is expected to be cash and equivalents, which pro-forma for the $500 million debt raise would be roughly $740 million. Against this, Equinix main use of cash will be its likely cash burn of almost $220 million to support its expansion plans over this 4-quarter period, along with $284 million expected to be used for the cash portion of the Switch & Data acquisition and repayment of that company's debt at closing. The stable outlook reflects Moody's view that the company will continue along a rational expansion path, whereby it will not commence construction of new data center facilities in advance of a solid demand in bookings. In addition, as the company is acquiring Switch & Data with 80% of the consideration paid in Equinix stock, Moody's expects the company to retain a disciplined capital structure in its expansion plans, with adjusted debt/EBITDA leverage in the low 4.0x range over the rating horizon. Moody's believes that if Equinix is able to close its pending acquisition of Switch & Data under the proposed terms, the combined company's credit profile should benefit from the increased scale of the operations and from the greater connectivity options for customers. In addition, the transaction is expected to result in organic deleveraging, as Equinix plans to use its shares to pay for 80% of the $689 million purchase price. The transaction is currently under regulatory review, and the company expects the closing to occur sometime in the second quarter of 2010. This is the first time that Moody's has rated Equinix. Headquartered in Foster City, CA, Equinix is a data company which operates 49 domestic and international data centers across 18 markets, totaling over 4 million square feet of data center space. EQUINIX INC: S&P Affirms Corporate Credit Rating at 'B+' -------------------------------------------------------- Standard & Poor's Ratings Services said it affirmed its 'B+' corporate credit rating on Foster City, California-based data center and interconnection provider Equinix Inc. At the same time, S&P affirmed the company's 'B-' subordinated debt rating and assigned a 'BB-' issue rating and '2' recovery rating to the company's proposed $500 million in unsecured notes. Proceeds will be used for general corporate purposes, including the repayment of indebtedness, including debt expected to be assuming in connection with the planned acquisition of Switch & Data. Pro forma funded debt will be about $1.8 billion. In addition, S&P revised the outlook on the company to positive from stable. The outlook revision reflects the company's performance over the past year, in which it consistently grew its revenues and EBITDA as it added customers at its data center facilities. Revenues for the full year grew by 25.2%, while adjusted EBITDA rose by about 39.7%. Resultant EBITDA margins improved to around 46% from about the 42% achieved in 2008. Leverage is at around the mid-4x area, pro forma for the acquisition of Switch & Data and the current refinancing. "S&P predicate a possible upgrade on the company's ability to reach leverage of about 4x or less on a sustained basis," said Standard & Poor's credit analyst Catherine Cosentino, "despite the potential for additional debt-funded acquisitions or expansions of data center capacity." "The rating on Equinix reflects its competitive operating environment, anticipated significant near-term capital requirements," said Ms. Cosentino, "and accompanying aggressive albeit improving-leverage." The data center business, which includes co-location and interconnection services, has very limited maintenance capital expenditure requirements. Standard & Poor's expects that the company will remain aggressive in expanding its data center facilities over the next several years either through organic expansion or acquisitions. Equinix has plans to add capacity in several markets in 2010, and will also close on its acquisition of Switch & Data later this year. "While these activities limit its net free cash flow generating ability over the next few years, they provide the platform for higher longer term cash flow generating ability," added Ms. Cosentino. ERICKSON RETIREMENT: Further Amends Plan as Settlements Reached --------------------------------------------------------------- Erickson Retirement Communities, LLC, and its debtor affiliates presented to the United States Bankruptcy Court for the Northern District of Texas their Second Amended Joint Plan of Reorganization and accompanying Disclosure Statement on February 16, 2010. The Amended Plan incorporates, among others (i) settlements between the Debtors and parties-in-interests in the Debtors' Chapter 11 cases, (ii) more details on the liquidating creditor trust, (iii) a recovery analysis, and (iv) modified claims classification and treatment. ERC Executive Vice President and General Counsel Gerald Doherty reminds the Court that Debtors Concord Campus, LP; Dallas Campus, LP; Dallas Campus GP, LLC; Littleton Campus, LLC; Houston Campus, LP; Novi Campus, LP; Warminster Campus, LP; and Warminster Campus GP filed adversary complaints against Strategic Concord Landholder, MSRESS III Dallas Campus, L.P.; HCP ER6, LP; MSRESS III Denver Campus, LLC; HCP ER2, LP; HCP ER3, LP. The Debtors are seeking a declaratory judgment determining that certain junior loan transactions between the Debtor Plaintiffs and Lender Defendants are financing transactions, and not lease agreements. In order to resolve the Adversary Proceedings, the Debtors have entered into settlement agreements with the HCP Entities and the MSRESS Entities, Mr. Doherty discloses. A. HCP Settlement The Debtors filed with the Bankruptcy Court a motion seeking authority to enter into a settlement agreement with HCP, Inc., HCP ER2, HCP ER3, and HCP ER6 to settle the adversary proceedings against the HCP Entities. The terms of the HCP Settlement are: -- The HCP Entities will receive $8.2 million in cash from the Debtors, which will be allocated to repayment of Warminster's obligations owed to the HCP Entities; -- The HCP Entities will retain the security deposits provided to the HCP Entities by Houston Campus, Novi Campus, and Warminster Campus pursuant to the applicable Financing Transactions, which as of December 31, 2009 were valued $4,994,025 in the aggregate; -- The HCP Entities will withdraw the claims they filed against the Debtors with respect to the Financing Transactions. HCP ER2 filed a claim against Novi Campus for $17 million; HCP ER3 filed a claim against Warminster Campus for $19.5 million; and HCP ER6 filed a claim against Houston Campus for $23 million. The HCP Entities will not file any additional proofs of claim or adversary proceedings. The withdrawal will not affect the HCP Entities' participation interest in the construction loan on the Houston Campus; -- The HCP Entities will withdraw: (i) their joinder to PNC Bank National Association's objection to the Debtors' DIP Financing Motion and PNC Bank's objection to the bidding procedures governing the sale of the Debtors' assets, (ii) their motions to conduct examination on the Debtors pursuant to Rule 2004 of the Federal Rules of Bankruptcy Procedure, and (iii) their participation in MSRESS III Kansas Campus, L.P., Strategic Concord Landowner, LP and Strategic Ashby Ponds Lender, LLC's motion to appoint an examiner in the Debtors' Chapter 11 cases; -- The HCP Entities agree to transfer legal ownership by quitclaim deed of the Warminster Campus, Novi Campus and Houston Campus properties in a form reasonably acceptable to the Debtors and Redwood-ERC Senior Living Holdings, LLC, pursuant to the Amended Plan; -- The Debtors will dismiss the Adversary Proceedings on the effective date of the HCP Settlement Agreement; -- The HCP Entities and the Debtors will exchange mutual releases from any claims, which may arise out of any of the HCP Entities' claims on the Warminster, Novi and Houston Campuses, except for the HCP Entities' Houston Participation Interest; and -- The execution of lender support documents. The HCP Settlement Agreement is subject to confirmation of the Plan and is pending Court approval. B. MSRESS Settlement The Debtors have consented on the principal terms of a settlement agreement with respect to the adversary proceedings commenced by the Dallas Debtors and Littleton Campus against MSRESS III Dallas Campus, L.P.; and MSRESS III Denver Campus, LLC. The MSRESS Settlement is conditioned on the global settlement with all other settling parties, including HCP and the Official Committee of Unsecured Committee. The terms of the settlement are: -- The MSRESS Entities will receive $1 million in cash and the value of the out-parcel related to Littleton Campus for over $6 million, which will be split equally between the MSRESS Entities and Capmark Finance, Inc. as administrative agent under Littleton Campus' Construction Loan for the benefit of the holders of that loan; -- The MSRESS Entities will withdraw their participation in the Subdebt Lenders' Examiner Motion; -- The MSRESS Entities agree to transfer legal ownership by quitclaim deed of Dallas' and Littleton's properties in a form reasonably acceptable to the Debtors and Redwood, as directed under the Amended Plan; and -- The Debtors will dismiss the adversary proceedings on the effective date of the MSRESS settlement agreement. The MSRESS Settlement Agreement is subject to confirmation of the Plan and is pending court approval. C. Creditors Committee Settlement Agreement In February 2010, the Debtors, the "Corporate Revolver Lenders" and the "Construction Lenders" entered into a global settlement agreement with the Creditors Committee. The Corporate Revolver Lenders consist of Manufacturers and Traders Trust Company, Sovereign Bank, Virginia Commerce Bank, Wilmington Trust FSB, First Commonwealth Bank, Commerce Bank, N.A., Sandy Spring Bank, Abington Bank, Hillcrest Bank, Provident Bank and Bank of America, N.A. PNC Bank acts agent to the Corporate Revolver Lenders. The Project Construction Lenders consist of PNC Bank (Mercantile), Bank of America, N.A., Capmark Bank, Guaranty Bank, Commerce Bank (MO), Wilmington Trust FSB, Solutions Bank, Hillcrest Bank, Citizens Bank of Pennsylvania, Wachovia Bank, National Association, Sandy Spring Bank, Chevy Chase Bank FSB, The Bank of Glen Burnie, Provident Bank, Abington Bank, Univest National Bank & Trust Co., National Penn Bank, Legacy Bank, Key Healthcare Finance, Columbia Bank, Chesapeake Bank, Health Care Property Investors, Inc., Colonial Bank, Fifth Third Bank, and KeyBank National Association. The agents acting on behalf of the Project Construction Lenders are Mercantile-Safe Deposit and Trust Company, PNC Bank, National Association, Bank of America, N.A., Capmark Finance, Inc., and KeyBank National Association. Redwood Purchase Transaction Redwood, Redwood-ERC Management, LLC, Redwood-ERC Development, LLC, Redwood-ERC Properties, LLC, Redwood-ERC Kansas, LLC, ERC, Erickson Group LLC, Concord Campus, Dallas Campus, Houston Campus, Ashburn Campus LLC, Littleton Campus, Novi Campus, Kansas Campus LLC, Tinton Falls Campus II LLC, Senior Campus Care LLC, Naperville Campus, Warminster Campus , Point View Campus II LLC, Hingham Campus LLC, Lincolnshire Campus, LLC, and Erickson Construction entered into a Second Amended and Restated Master Purchase and Sale Agreement, whereby Redwood is contemplated to acquire substantially all of the assets of the Debtor Sellers relating to the business and the equity interests in Warminster LP and Warminster GP, collectively known as the "Transferred Landowners," free and clear of all liens and liabilities except for certain permitted encumbrances, including certain Community Loans, Special District Tax Bonds, and Purchase Option Deposits, and in the case of Warminster Campus, certain other obligations and encumbrances associated with Ann's Choice Bonds as restructured pursuant to the Amended Plan. Ann's Choice Bonds refer to an issue of $81,945,000 Bucks County Industrial Development Authority Retirement Community Revenue Bonds Series 2005 A and B. The Assets to be sold include: (a) the intellectual property owned or used by ERC in its business; (b) certain contracts and all tangible and intangible personal property owned or used by ERC in the Business; (c) all original books and records relating to the ERC Business; (d) all of ERC's right, title, and interest in all notes receivable due to ERC or any of its affiliates from Brooksby Village, Inc., and Riderwood Village, Inc., including (i) the Second Amended and Restated Working Capital Promissory Note dated June 30, 2008, in the principal amount of $14,032,807 made by Brooksby Village in favor of ERC; (ii) the Purchase Money Note dated June 30, 2008, in the amount of $19,715,086 made by Brooksby Village, Inc. in favor of Senior Living Limited Partnership; (iii) the Purchase Money Note in the amount of $2,698,039 made by Riderwood Village in favor of Senior Living Limited Partnership; and (iv) the Second Amended and Restated Working Capital Promissory Note dated December 31, 2007, in the amount of $5,000,000 made by Riderwood Village, Inc., in favor of ERC. These notes are known as the B&R Notes; (e) Cash, including cash equivalents, not to exceed $10,000,000; (f) permits, to the extent transferrable pursuant to applicable law; (g) certain causes of action and rights of recovery related those causes of action, including avoidance actions arising under the Bankruptcy Code; (h) all cash held by ERC for purpose of paying self-funded medical or dental claims, medical or dental insurance premiums, and related administrative expenses, Cash Collateral, and the minimum cash balances: (i) $1,900,000 by Ashburn Campus, LLC; (ii) $6,300,000 by Concord Campus, LP; (iii) $1,700,000 by Dallas Campus; (iv) $1,800,000 by Houston Campus; (v) $2,100,000 by Littleton Campus; and (vi) $5,600,000 by Novi at closing; (i) insurance policies; (j) furnishings, furniture, and other equipment and other personal property and fixed assets; (k) corporate headquarters; (l) all Initial Entrance Deposits with respect to Tallgrass Creek Campus and all Initial Entrance Deposits collected after November 27, 2009, at Warminster's campus; (m) ERC's interests in the Transferred Landowners; and (n) all causes of action and rights of recovery of the Sellers with respect to ERC. In addition, Redwood has exclusive options to purchase Point View Campus II, LLC, Hingham Campus, LLC, Lincolnshire Campus, LLC and/or Naperville Campus, LLC, or any or all of their assets. From and after the sale of the ERC Assets, Redwood will permit each of the bonded communities known as Monarch Landing, Sedgebrook and Linden Ponds access to use intellectual property, personal property, permits, insurance or other Assets as and to the extent used by each Bonded Community prior to the sale on reasonable business terms and under pricing consistent with industry standards and as mutually agreed by the Redwood, the applicable National Senior Campus, Inc. and Not-for-Profit entity, and the applicable bond trustee. This permitted use will cease a year after the management agreement for the applicable Bonded Community is terminated. Moreover, Redwood will not purchase the transferred claims assigned to the Liquidating Creditor Trust and the Littleton Out- Parcel; and a loan in the principal amount of $49,648,620 between Erickson Group, LLC, as lender and John C. Erickson GST Trust and 2002 Nancy A. Erickson GST Trust, as borrowers -- the "GST Loan." Littleton Out-Parcel is a real property referred to as Lot 1, Block 1 consisting of 12.5 acres and Lot 1, Block 2 consisting of 18 acres. Redwood will pay $365,000,000 in cash for the Purchased Assets, subject to (i) deduction of the amount of all Initial Entrance Deposits relating to Ashburn Campus, Columbus Campus, Concord Campus, Dallas Campus, Houston Campus, Kansas Campus, Littleton Campus, Novi Campus and Warminster Campus collected after November 27, 2009, excluding those Initial Entrance Deposits collected at Kansas Campus and, after November 27, 2009, Warminster Campus, (ii) the extent Cash on Hand as of the Closing is less than $10,000,000, and (iii) deduction of $9 million to be paid by Redwood to NSC during the restructuring period. Moreover, under the Amended MSPA, Redwood will form acquisition companies to acquire substantially all of the business assets of ERC and Kansas Campus. Those companies will be referred to as Redwood ManagementCo, Redwood DevCo, and Redwood PropCo. Pursuant to the Amended MSPA, ERC will sell to Redwood PropCo all of its interests in the Transferred Landowners, which hold property or assets in connection with a current or planned campus. Redwood DevCo will acquire all assets and properties of Erickson Construction. Any Development Agreement relating to the three Bonded Communities that are not being acquired by Redwood under the Amended Plan will be on terms reasonably acceptable to the relevant Bond Trustee and Redwood. Redwood will own 100% of Redwood DevCo and Redwood Propco. Landowner Restructurings The Amended Plan also provided restructurings of the Debtor Landowners: (1) Ashburn Campus, Concord Campus, Dallas Campus, Houston Campus, Littleton Campus, Novi Campus and Kansas Campus will sell, free and clear of all liens and liabilities, all of their assets and properties to Redwood. The sale of the Debtor Landowners' assets to Redwood is subject to payments to the applicable administrative agents of the Landowners' construction loans in cash and from the Cedar Crest Receivable, which means all sums due to Point View Campus II, LLC from Cedar Crest Village: Debtor Cash Landowner Payment Cedar Crest Payment -------------- ----------- ------------------- Ashburn Campus $60,626,000 $732,000 Concord Campus $62,757,000 $637,000 Dallas Campus $19,496,000 $282,000 Houston Campus $7,041,000 $135,000 Littleton Campus $46,400,000 $594,000 Novi Campus $24,914,000 $389,000 With respect to Littleton Campus, the administrative agent will also be paid 100% of the net proceeds from the sale of the Littleton Out-Parcel up to $6 million and 50% above $6 million as required under the Amended Plan. (2) The indebtedness related to Columbus Campus will not be restructured. Columbus Campus expects to liquidate the property by delivering to the construction lenders a deed in lieu of foreclosure prior to the effective date of the Amended Plan or allowing the construction lenders to Complete their pending foreclosure process. (3) Kansas Campus' community loan will be amended and restated at the outstanding balance amount and assumed by Redwood Kansas, as modified. The Working Capital Loan and other agreements between Kansas Campus and Tallgrass Creek, Inc. will be terminated as of the Effective Date, and Redwood Kansas and Tallgrass Creek, Inc., will enter into new agreements on mutually agreed upon terms consistent with the terms agreed to with the NSC on the record as part of the December 22, 2010 auction. (4) The outstanding balance of the purchase option deposit refund obligation set forth in an amended and restated purchase option agreement between Warminster Campus and Ann's Choice, Inc., in the amount of $75,000,000 will be reinstated in full. Warminster Campus' obligations under the Purchase Option Refund Deposit Agreement will be guaranteed by the Initial Entrance Deposits collected by Warminster Campus after November 27, 2009, not to exceed $10 million. Warminster Campus will assume, reinstate and/or ratify the mortgage securing Ann's Choice Bonds and the Warminster Debtors will assume, reinstate or ratify all other obligations, encumbrances, and agreements relating to the Ann's Choice Bonds to which they were a party as of the Petition Date. Redwood will make available a revolver to fund costs of the borrower, including construction costs, marketing costs, departmental charges, development fees and taxes. The available commitment amount under the New Warminster Revolver will be mutually determined by Redwood and the borrower. Redwood will provide a separate revolving facility for the purpose of funding reasonable working capital needs of Ann's Choice Campus. (5) Erickson Construction will sell all of its assets and Properties, including all transferred contracts to which ERC is a party, to Redwood DevCo, free and clear of all liens and liabilities. Liquidating Creditor Trust On the Plan Effective Date, the Liquidating Creditor Trust will be established pursuant to a Trust Agreement and other documents to be included in the supplements to the Amended Plan. Under the Amended MSPA, Redwood is acquiring the causes of action, counterclaims and defenses which the Debtors would have been entitled to bring and which are not transferred, waived or released under the Amended Plan. Redwood will assign those claims and Causes of Action to the Liquidating Creditor Trust for the benefit of the Beneficiaries that consent to the Creditors Committee Global Settlement: (A) All Chapter 5 causes of action of ERC, Erickson Construction, and the Landowner Debtors, including actions against John Erickson and members of the Erickson family. All current officers, directors and employees of the Debtors employed by Redwood on the Effective Date through the 90th day anniversary will be excluded from the Chapter 5 Avoidance Actions assigned to the Trust. The Liquidating Creditors Trust will not prosecute Chapter 5 avoidance actions against employees of the Subject Debtors: (a) who received transfers during the period ending October 18, 2008 and beginning on the date that the applicable statute of limitations for fraudulent conveyances for that transfer began to run; and (b) whose transfers during that period do not exceed $350,000 in the aggregate; provided, that the Liquidating Trust's covenant not to sue will not apply to transfers to employees within a year prior to October 19, 2009. (B) All director and officer liability claims of the Subject Debtors. The assignment of claims of the Subject Debtors and Erickson Group to the Liquidating Trust will be exclusive of any and all claims or Causes of Action against the lenders, both in their capacities as lenders and in any other capacities, all of which claims or Causes of Action, including the Chapter 5 Avoidance Actions and other avoidance actions, will be expressly waived by the Debtors, Redwood, mezzanine lenders, Holders of Claims under the Subordinated Taxable Adjustable Mezzanine Put Securities or "STAMPS," and the NSC-NFPs. In addition to the Causes of Action, on and after the Effective Date, (i) all director and officer liability claims of Erickson Group, (ii) all Chapter 5 Avoidance Actions Threshold Employees, (iii) all third party causes of action not acquired by Redwood and not otherwise released by the Plan, (iv) unencumbered assets of the Debtors' estates, and (v) Excluded Assets will be assigned to the Liquidating Trust. The assets transferred to the Liquidating Trust, subject to the applicable provisions of the Amended Plan, will fully vest in, the Liquidating Trust, free and clear of all claims, liens, encumbrances and other liabilities. The Debtors estimate that the value of potential preference Causes of Action is approximately $7.5 million. Any reference in the Plan to potential claims against any director, officer or other insider of any of the Debtors should not be construed to suggest that the Debtors believe that any valid claim exists or is worthy of pursuit. Moreover, the confirmation of the Plan and any agreements consummated pursuant to the Amended Plan will be without prejudice to any of those parties' defenses to any Potential Claims. All defenses to the Potential Claims under applicable bankruptcy and non-bankruptcy law will be fully preserved. Notwithstanding any provision of the Amended Plan, the Disclosure Statement or any order on the Disclosure Statement or Amended Plan, ERC's membership interests in Lincolnshire Campus LLC and Hingham Campus LLC will remain subject to all liens granted to the relevant Bond Trustee under the relevant Bond Documents. Moreover, holders of these types of claims may not participate as Beneficiaries of the Liquidating Creditor Trust: (1) all deficiency claims of Corporate Revolver Lenders, which will be waived as against all of the Debtors except Erickson Group, (2) all loan deficiency and guarantee claims of Construction Lenders, which will be waived as against all of the Debtors except Erickson Group, (3) all intercompany claims, (4) all obligations with respect to purchase option deposits, (5) claims under ERC's Amended and Restated Growth Participation Plan, effective as of January 1, 2006, (6) guarantees of ERC's non-debtor subsidiaries' prepetition obligations, (7) UMBC Building Construction Loan deficiency claims, (8) all mezzanine loan/saleleaseback deficiency claims and guarantee claims that have been waived in writing, (9) community loan claims, (10) NFP Claims, and (11) purchase deposit claims. All Liquidating Trust Expenses will be charged against and paid from the proceeds of any Causes of Action, asset sales for other Trust Assets and the Trust Cash, as determined by the Creditors Committee or the Liquidating Trustee, as applicable, in their discretion. On the Effective Date, the Liquidating Creditor Trust will be provided with a funding of $2.5 million in Cash, which amount may be used to pay the reasonable fees and expenses incurred by the Liquidating Trust or the Liquidating Trustee in administering the Liquidating Trust. The Liquidating Trust will not be liable for the Debtors' postpetition obligation to indemnify directors and officers under the Amended Plan. Under the Amended Plan, the rights of Erickson Group with respect to the $49 million "GST Loan" extended by Erickson Group to the John C. Erickson GST Trust and 2002 Nancy A. Erickson GST Trust will be assigned to the Liquidating Trust for the benefit of Construction Lenders with Erickson Group Guaranty Claims. The Creditors Committee and lenders with Erickson Group Guaranty Claims will discuss in good faith the terms under which the Liquidating Creditor Trust may receive the right to prosecute collection claims arising from the GST Loan and distribution of those proceeds. A Beneficiary may only participate in the recoveries of the claims and Causes of Action assigned to the Liquidating Creditor Trust if that Beneficiary consents to the Creditors Committee Global Settlement. Distributions to Three Subclasses of Claims A. Tier A Subclass - Trade Claims: (a) Tier A will consist of Beneficiaries that that are not Holders of a mezzanine loan/sale-leaseback deficiency claim, mezzanine loan/sale-leaseback guarantee claim, Permitted Non-Debtor Obligations, which mean guarantees by a Subject Debtor of prepetition obligations of non- debtor ERC subsidiaries or affiliates, or Participating Construction Claims. (b) Tier A will receive, pro rata, the first $7 million of dividends paid by the Liquidating Trust. After the payment of the Trade Dividend in full, Tier A will not be entitled to any further distributions from the Liquidating Trust, subject to a Proration Trigger Event, which means that if as a result of future distributions to participants in Tiers B and C, the Tier B/C Percentage Recovery equals or exceeds the Tier A Percentage Recovery. B. Tier B Subclass - Construction Claims: (a) Tier B will consist of Beneficiaries which are Holders of the: * Permitted Non-Debtor Obligations, provided that they will not include any claim held by, guarantees of prepetition obligations of, or letters of credit issued to John Erickson, any member of the Erickson family, any trust or special purpose vehicle created or managed primarily for the benefit of John Erickson or any member of the Erickson family; and * deficiency and guarantee claims of the construction lenders to Columbus Campus and Kansas Campus. (b) Tier B will not receive any distribution from the Liquidating Trust until the Trade Dividend has been paid in full. Thereafter, Tier B will participate in all dividends from the Liquidating Trust, pro rata, with other Tier B participants only, up to $2 million, and, with Tier C participants pro rata, subject to the Proration Trigger Event. C. Tier C Subclass - Mezzanine/Sale-Lease Back Claims: (a) Tier C will consist of Beneficiaries that hold mezzanine loan/sale-leaseback guarantee claims and deficiency claims that have not been voluntarily waived in writing. (b) Tier C will not participate in dividends from the Liquidating Trust until the occurrence of a Tier C Trigger Event. Thereafter, Tier C will participate with Tier B in all dividends of the Liquidating Trust, pro rata, subject to the Proration Trigger Event. For purposes of distributions from the Liquidating Trust, the holders of STAMPS will participate in Tier A, provided that any amount distributable to the STAMPS will be paid to the holders of Senior Indebtedness pursuant to a November 1, 2007 trust indenture among ERC and The Bank of New York, subject to Lender Pay-Over Waivers in Tier A pro rata. The fees of the STAMPS indenture trustee, up to $250,000, will not be subject to the STAMPS Pay-Over Obligation. Upon the occurrence of the Proration Trigger Event, the Stamps Pay-Over Obligation will be deemed waived in its entirety and thereafter, holders of the STAMPS will be entitled to a pro rata share of all Liquidating Creditor Trust distributions. Corporate Revolver Lenders, Construction Lenders and holders of Permitted Non-Debtor Obligations will waive all subordination and pay-over rights with respect to distributions from the Liquidating Creditor Trust and the recipients; provided that a Lender Pay-Over Waiver will only be effective with respect to a holder of mezzanine loan/sale-leaseback deficiency claims or mezzanine loan/sale-leaseback guarantee claims if the beneficiary of lenders grant that waiver. The Creditors Committee will have authority with respect to drafting the definitive trust documents, governance and selection of a Liquidating Trustee, subject to approval by the Bankruptcy Court. The Liquidating Creditor Trust will have the right to object to Claims in connection with the post-Effective Date Claims allowance process, provided that it will not object to any Claim of the Corporate Revolver Lenders and Construction Lenders, all of which will be Allowed. Prior to the Effective Date, the Debtors will consult with the Creditors Committee in connection with that Claims allowance process. The Debtors will apply the Transaction Proceeds or the DIP financing funds to the payment of the fees and expenses of the Creditors Committee's professionals up to an allowed amount of $1.1 million. Injunctions All persons or entities who have held, hold, or may hold Claims against or Interests in the Debtors are permanently enjoined from and after the Effective Date from commencing or continuing in any manner any action or other proceeding of any kind with respect to that Claim or Interest against: (a) the Debtors, (b) the Reorganized Debtors, (c) Redwood, (d) the Creditors Committee, (e) the Liquidating Trust and Liquidating Trustee, (f) the Corporate Revolver Lenders, (g) the Construction Lenders, (h) the holders of Participating Mezzanine Claims, (i) the NSC and the NSC-NFPs, (j) Redwood PropCo, Devco and ManagementCo. The Disclosure Statement, the Amended Plan or any order on the Disclosure Statement or Amended Plan will not release or in any manner limit (i) the obligations of any NSC-NFP or other party not a Debtor in these Chapter 11 cases under any Bond Documents; (ii) any rights or claims by any Bond Trustee or beneficial bondholder against any NSC-NFP or other party not a Debtor based on those obligations; or (iii) any rights or claims by any NSC- NFP against any party not a Debtor in these cases based on those obligations. Moreover, the Lenders and Agents will not be enjoined from commencing any actions, enforcing or pursuing in any manner whatsoever claims against the NSC and NSC-NFPs, including: (1) claims for indemnity, contribution, crossclaims, counterclaims and third party claims in the event any of the Agents or the Lenders are sued by any third party; (2) claims under the parties' subrogation agreements to the extent the NSC and NSC- NFPs receive any distributions from the bankruptcy estates, Liquidating Trust, the Debtors, the Reorganized Debtors or any other source related to the bankruptcy cases; and (3) that litigation commenced in Circuit Court for Baltimore County by PNC Bank, National Association against the NSC-NFPs. Recovery Analysis & Other Disclosures In addition, the Debtors prepared a recovery analysis, liquidation analysis and financial statements in conjunction with the Amended Plan. Under the Recovery Analysis, the Debtors estimate $135,799,000 in total value that will be available for distribution. The Plan further incorporates an allocation of Distributable Cash among the Debtors' estates or Lenders' Allocation and the creation and application of a transaction implementation pool or TIP: Allocation Payments ---------- PNC Claim Secured by Corporate Headquarters $1,203,000 Dallas Construction Loan Payment 2,000,000 Kansas Construction Loan Payment 4,347,000 Littleton Junior Loan Payment 1,000,000 Warminster Junior Loan Payment 6,022,000 Trust Cash 2,500,000 Unsecured Creditors Committee Professional Fees 500,000 ------------ Total TIP $17,572,000 ============ A full-text copy of the Recovery Analysis is available for free at http://bankrupt.com/misc/ERC_RecoveryAnalysis.pdf Based on the Liquidation Analysis, the Debtors estimate a 12.9% recovery for ERC and Erickson Construction LLC under an orderly liquidation and only an 8.2% recovery for the same Debtor entities under a forced liquidation. A Liquidation Analysis on the other Debtor Landowners also show that the Landowners are expected to recover more from an orderly liquidation than from a forced liquidation. A full-text copy of the Liquidation Analysis is available for free at http://bankrupt.com/misc/ERC_Feb16LiquidationAnalysis.pdf The Debtors also presented their consolidated balance sheets and statements of income as of September 30, 2009, a full-text copy of which is available for free at: http://bankrupt.com/misc/ERC_ConsFinlStats.pdf The Debtors submitted a chart showing the post-Effective Date organization of the Debtors, a full-text copy of which is available for free at: http://bankrupt.com/misc/ERC_EmergenceOrgChart.pdf Second Amended MSPA In connection with the Amended Plan, the Debtors appended a copy of their Second Amended MSPA with Redwood, to reflect the results of the December 22, 2009 Auction and the negotiations with the Creditors Committee, the HCP Entities, the MSRESS Entities, and the Strategic Entities. A full-text copy of the Amended MSPA dated February 16, 2010, is available for free at: http://bankrupt.com/misc/ERC_AmMSPA.pdf Full-text copies of the Second Amended Plan and Disclosure Statement dated February 16, 2010, are available for free at: http://bankrupt.com/misc/ERC_Feb16AmPlan.pdf http://bankrupt.com/misc/ERC_Feb16AmDS.pdf Blacklined versions of the Second Amended Plan and Disclosure Statement are available for free at: http://bankrupt.com/misc/ERC_Feb16AmPlan_blacklined.pdf http://bankrupt.com/misc/ERC_Feb16DS_blacklined.pdf Treatment of Claims Erickson Retirement Communities LLC Executive Vice President and General Counsel Gerald Doherty related that the treatment of claims is subject to subsequent modification under the Second Amended Joint Plan of Reorganization of Erickson Retirement Communities and its debtor affiliates. Among the modifications noted on the estimated recovery of certain class of claims: Estimated Entitled Debtor Class/Designation Recovery to Vote ------ ----------------- --------- -------- Erickson Group LLC Class 4 Erickson To be No Group Guaranty Determined (deemed Claims to reject) Erickson Class 3 Corporate 50.6% Yes Retirement Revolver Claims Communities LLC Class 4 Interest 50.6% Yes Rate Swap Claims Class 5 Other 100.00% No Secured Claims (deemed to accept) Class 6 UMBC 66.8% Yes Construction Loan Claims Class 7 Management 100.00% Yes Agreement Claims Class 8 General [--%] Yes Unsecured Claims Erickson Class 4 Corporate 50.6% Yes Construction LLC Revolver Claims Class 5 UMBC 66.8% Yes Building Construction Loan Claims Class 6 General 0% Yes Unsecured Claims [--%] A schedule of the amended claims classification under the Erickson Retirement Amended Plan is available for free at: http://bankrupt.com/misc/ERC_AmClaimsClassification.pdf Holders of ERC Class 5 Other Secured Claims are unimpaired and are deemed to accept the Amended Plan. The Amended Plan provides modified treatment for these claims: * DIP Funding Claims. The Debtor Borrowers will pay Cash to each holder of a DIP Funding Claim in an amount equal to that Claim in full and complete satisfaction through a credit against the $365 million cash proceeds from the purchase transaction entered between Redwood-ERC Senior Living Holdings, LLC and the Debtors. * Compensation and Reimbursement Claims. The Reorganized Debtors are authorized to pay compensation for services rendered or reimbursement of expenses incurred after the confirmation date of the Amended Plan and until the effective date of the Amended Plan, subject to the requirement that invoices evidencing the amount sought will be distributed to these parties set forth in the Interim Compensation Procedures Order and payment will be governed by that order, except for the 20% holdback provision. * Erickson Group Guaranty Claims Class 4. The Official Committee of Unsecured Creditors and lenders with guarantee claims against Erickson Group will discuss in good faith the terms under which the Liquidating Creditor Trust may receive the right to prosecute collection claims arising from a "GST Loan" and distribution of proceeds from it. The GST Loan refers to a certain loan in the original amount of $49,648,620 between Erickson Group and the John C. Erickson GST Trust and the 2002 Nancy A. Erickson GST Trust. * Revolver Claims. ERC and Erickson Construction Corporate Revolver Claims will be allowed in the amount set forth in the proofs of claim timely filed by the Holders of the Corporate Revolver Claims or, if no Proof of Claim is timely filed by a Holder, the Proof of Claim timely filed by Wilmington Trust FSB, as collateral and administrative agent for the Holders of the Corporate Revolver Claims. Wilmington Trust will be paid, on behalf of the Holders of the Corporate Revolver Claims, $96,070,940 in Cash and $3,074,020 from a Cedar Crest Receivable, which amounts will be distributed by Wilmington Trust to the Holders in accordance with the Corporate Revolver Loan documents and the Lender Allocation under the Amended Plan. Upon receipt of the required payment, Wilmington Trust will release its lien against the assets of ERC. The Cedar Crest Receivable refers to all sums due to Point View Campus II, LLC from Cedar Crest Village. * ERC Class 4 Claims. Holders of ERC's Class 4 Interest Rate Swap Claims will receive a pro rata distribution of $2,349,000 in Cash and $75,000 from the Cedar Crest Receivable. * ERC Class 5 Other Secured Claims. Holders of ERC's Class 5 Other Secured Claims will receive (a) reinstatement of that allowed Other Secured Claim; (b) payment of that Allowed Other Secured Claim in full in cash; or (c) other treatment as ERC and each Holder will agree. In the case of the secured claim of Wells Fargo Bank, National Association, as indenture trustee for Ann's Choice's December 1, 2005 Indenture based on its liens in ERC's partnership interests in Warminster Campus, LP, those partnership interests will be transferred to Redwood, free and clear of the liens of Wells Fargo in exchange for the treatment of other interests held by Wells Fargo in the Debtors' Chapter 11 cases. The claim of PNC Bank National Association related to a loan in the approximate amount of $1.2 million and secured by a first priority security interest in and mortgage on the Corporate Headquarters will be paid in full in Cash from the Transaction implementation pool under the Amended Plan. * Holders of ERC, Erickson Construction, Senior Campus Services LLC, UMBC Building Construction Loan will be Allowed in the amount set forth in the Proofs of Claim timely filed by the Holders of the UMBC Building Construction Loan Claims. If no Proof of Claim is timely filed by a Holder, the Proof of Claim timely filed by Manufacturers and Traders Trust Company, as collateral and administrative agent for the Holders of the UMBC Building Construction Loan Claims. Each Holder of an Allowed UMBC Building Construction Loan Claim will (i) receive the property securing that Claim, or (ii) the Debtors will dispose of the property securing that Claim in a manner agreed upon by M&T Bank, in full satisfaction of the Holder's Allowed Claim. * Holders of General Unsecured Claims of ERC, Erickson Construction, Senior Campus, Ashburn Campus, LLC, Columbus Campus, LLC, Concord Campus, L.P., Concord Campus GP, LLC, Dallas Campus, LP, Dallas Campus GP, LLC, Houston Campus, L.P., Kansas Campus, LLC, Littleton Campus, LLC, Warminster Campus, L.P. may receive a participation interest in the recoveries of the Liquidating Creditor Trust. * Interests in Erickson Construction will be cancelled. * Holders of Ashburn Campus, Concord Construction Campus, Dallas Campus, Houston Campus, Kansas Campus and Littleton Campus Loan Claims will be allowed in the amount set forth in the Proofs of Claim filed by the Holders of the Construction Loan Claims or, if no Proof of Claim is filed by a Holder, the Proof of Claim filed by the applicable administrative agents for the Holders of the Construction Loan Claims. For the Ashburn Campus Construction Loan Claims, PNC Bank will be paid $60,626,000 in cash and $732,000 from the Cedar Crest Receivable, which amount will be distributed by PNC Bank to the Holders in accordance with the Ashburn Construction Loan documents and the Lender Allocation. As to Concord Construction Loan Claims, PNC Bank will be paid $62,757,000 in Cash and $637,000 from the Cedar Crest Receivable, which amounts will be distributed by PNC Bank to the Holders in accordance with the Concord Construction Loan documents and the Lender Allocation. For Dallas Construction Loan Claims, Bank of America, National Association, will be paid $19,496,000 in Cash and $282,000 from the Cedar Crest Receivable, which amounts will be distributed by BofA to the Holders in accordance with the Dallas Construction Loan documents and the Lender Allocation. For Houston Construction Loan Claims, PNC Bank will be paid $7,041,000 in Cash and $135,000 from the Cedar Crest Receivable, which amounts will be distributed by PNC Bank to the Holders in accordance with the Houston Construction Loan documents and the Lender Allocation. For Kansas Construction Loan Claims, PNC Bank will be paid $2,778,000 in Cash from the TIP, which amount will be distributed by PNC Bank to the Holders in accordance with the Kansas Construction Loan documents and the Lender Allocation. The Holders of Kansas Construction Loan Claims will retain their deficiency claims and participate in the Liquidating Creditor Trust. For Littleton Construction Loan Claims, Capmark Finance, Inc. will be paid $46,400,000 in Cash, $594,000 from the Cedar Crest Receivable and 100% of the net proceeds from the sale of Littleton's Out-Parcel up to $6 million and 50% above $6 million. The Cash payment will be distributed by Capmark to Holders of the Littleton Construction Loan Claims. Upon receipt of the required payment, Capmark will release its lien against the assets of Littleton; provided, however, Capmark will retain its lien against the Littleton Out-Parcel in an amount equal to its deficiency Claim after the Cash payments. The holder of the Allowed Novi Construction Loan Claim will receive $24,914,000 in Cash and $389,000 from the Cedar Crest Receivable, which amounts will be distributed by PNC Bank. Upon receipt of the required payments, PNC Bank will release its liens against the assets of Concord Campus, Ashburn Campus, Houston Campus, Kansas Campus, and Novi Campus. * No holders of Ashburn Class 5 Community Loan Claims will receive any distribution. * For holders of Columbus Class 3 Improvement Bond Claims, Columbus Campus is surrendering Hickory Chase campus to the Holders of the Columbus Construction Loan Claims by means of a deed in lieu of foreclosure or the completion of an existing foreclosure process. In this light, Columbus does not expect to make a distribution on any allowed claims in Class 3 through Class 9. To the extent there is a distribution, each Holder of an Allowed Columbus Improvement Bond Claim will receive a Distribution, relative to the priority of its security interest. The first priority tax lien securing the Columbus Improvement Bond Claim will remain on the Hickory Chase Campus and be unaffected by the Debtors' bankruptcy cases. * No Holders of Concord Campus and Houston Campus Junior Loan Claims will receive any distribution. * Holders of Concord, Littleton and Warminster Other Secured Claims will receive (a) reinstatement of the allowed Other Secured Claim; (b) payment of that Allowed Other Secured Claim in full in cash; or (c) other treatment as ERC and each Holder will agree. * Holders of Dallas Class 5 Texas A&M Note Claims will receive a pro rata distribution of $3,440,000. Texas A&M Note refers to a promissory note in the original amount of $4.4 million granted by Dallas to the Board of Regents of the Texas A&M University System. * Holders of Littleton Class 6 Junior Claims will receive a Distribution in the form of $1 million Cash, paid from the TIP, and a contractual commitment to receive 50% of the net proceeds from the sale of the Littleton Out-Parcel above $6 million, which will be shared equally with the construction loan holder. * For holders of Warminster Class 4 Community Loan Claims, Warminster Campus assume, reinstate or ratify the Warminster Community Loan on terms mutually agreeable to Redwood, Ann's Choice and Wells Fargo and consistent with the terms agreed to during the December 22, 2009 auction. * Each holder of an Allowed Warminster Class 5 Purchase Option Deposit Refund Agreement Claim will receive reinstated debt in the full amount of the holders. Warminster Campus will assume the Warminster Purchase Option Deposit Refund Agreement as it exists or on terms mutually agreeable to Redwood, Ann's Choice and Wells Fargo and consistent with the terms agreed to during the Auction. Warminster's obligations under an Purchase Option Refund Deposit Agreement will be guaranteed by Initial Entrance Deposits collected by Warminster after November 27, 2009, not to exceed $10 million. * As to Warminster Class 8 NFP Claims, the working capital loan and master lease associated with Warminster's campus will be assumed as they exist or on terms mutually agreeable to Redwood, Ann's Choice and Wells Fargo. About Erickson Retirement The Baltimore, Maryland-based Erickson Retirement Communities LLC owns 20 continuing care retirement communities in 11 states. Among Erickson's 20 communities, eight are completed, 11 are open although in construction, and one is in development. They have 23,000 residents in total. Erickson, along with affiliates, filed for Chapter 11 on Oct. 19, 2009 (Bankr. N.D. Tex. Case No. 09-37010). DLA Piper LLP (US) serves as counsel to the Debtors. BMC Group Inc. serves as claims and notice agent. Houlihan, Lokey, Howard & Zoukin, Inc., is also serving as investment and financial consultant. Alvarez & Marsal is serving as restructuring adviser. As of September 30, 2009, on a book value basis, ERC had approximately $2.7 billion in assets, including $2.2 billion of property and equipment, and $3.0 billion in liabilities. Liabilities include $195.8 million on the revolving credit, $347.5 million on construction credit, $64 million in accounts payable, $47.8 million in subordinate debt, and $475 million in purchase option deposits. Bankruptcy Creditors' Service, Inc., publishes Erickson Retirement Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Erickson Retirement Communities LLC and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) ERICKSON RETIREMENT: Wants Plan Exclusivity Until June 17 --------------------------------------------------------- The exclusive period for Erickson Retirement Communities, LLC and its debtor affiliates to solicit acceptances for a Chapter 11 plan filed in their bankruptcy cases will expire on April 17, 2010. The Debtors just delivered to the United States Bankruptcy Court for the Northern District of Texas their Second Amended Joint Plan of Reorganization and accompanying Disclosure Statement on February 16, 2010. Against this backdrop, the Debtors ask Judge Jernigan to extend their Exclusive Solicitation Period through June 17, 2010, pursuant to Section 1121(d) of the Bankruptcy Code. Vincent P. Slusher, Esq., at DLA Piper LLP, in Dallas, Texas, asserts that cause exists to extend the Debtors' Exclusive Solicitation Period. For one, the Debtors' Chapter 11 case are large and complex, which involve parties-in-interest like the Official Committee of Unsecured Creditors, the Corporate Lenders, the Project Lenders, the Subdebt Lenders, and the not-for-profit organizations, he says. The Subdebt Lenders are HCP ER6, LP, HCP ER3, LP, and HCP ER2, LP; MSRESS III Dallas Campus, L.P. and MSRESS III Denver Campus, LLC; and Strategic Concord Landholder, L.P. and Strategic Ashby Ponds Lender, LLC. Mr. Slusher continues that the Debtors also have a complex organizational structure with 20 continuing care retirement communities across 11 states and thousands of prepetition creditors with more than $2 billion in claims against the Debtors. The Debtors' management of CCRCs adds to the complexity of their Chapter 11 cases, he points out, because the reorganization of their business implicates the additional considerations of the involvement of governmental regulatory agencies, licensing requirements, and the impact of the bankruptcy on the residents of the CCRCs. Moreover, Mr. Slusher says, the Debtors have made good faith progress toward reorganization and have filed a plan of reorganization and disclosure statement. He reminds the Court that the Debtors filed their initial Joint Plan of Reorganization and Disclosure Statement on November 13, 2009, contemplating the sale of substantially all of their assets to Redwood-ERC Senior Living Holdings, LLC, or to another higher bidder at an auction. The Debtors conducted an auction on December 22, 2009, in which Redwood emerged as the successful bidder with a final bid price of $365 million in cash. The Debtors filed their First Amended Joint Plan of Reorganization on December 30, 2009, to reflect the results of the Auction. The Debtors relate that they have also made significant progress in negotiations with the Creditors Committee, the HCP Entities, the MSRESS Entities and the Strategic Entities. Indeed, the Debtors filed with the Court a settlement agreement with the HCP Entities, resolving the adversary proceedings they filed against the HCP Entities and the claims asserted by the HCP Entities against the Debtors. The Debtors are also negotiating settlements with the MSRESS Entities and the Strategic Entities to resolve their adversary proceedings and claims. The Debtors note that they have reached a global settlement with the Creditors Committee that determines the allocation of proceeds from the asset sale to the general unsecured creditors. The global settlement resolves objections to the Debtors' Motion for More Protections on Initial Entrance Deposits, the Creditors Committee's Motion for Appropriate Valuation under the Amended Plan, and the Motions to Disband Creditors Committee filed by Capmark Finance, Inc., PNC Bank, National Association, Bank of America, N.A., and Wells Fargo Bank National Association. The Debtors further assure the Court that they have been paying their debts as those debts become due. The Debtors are seeking an extension of the Exclusive Solicitation Period that will not prejudice creditors, and is not sought to pressure creditors, Mr. Slusher clarifies maintains. The Court will convene a hearing with respect to the Debtors' Exclusivity Motion on March 23, 2010. Objections are due no later than March 9. About Erickson Retirement The Baltimore, Maryland-based Erickson Retirement Communities LLC owns 20 continuing care retirement communities in 11 states. Among Erickson's 20 communities, eight are completed, 11 are open although in construction, and one is in development. They have 23,000 residents in total. Erickson, along with affiliates, filed for Chapter 11 on Oct. 19, 2009 (Bankr. N.D. Tex. Case No. 09-37010). DLA Piper LLP (US) serves as counsel to the Debtors. BMC Group Inc. serves as claims and notice agent. Houlihan, Lokey, Howard & Zoukin, Inc., is also serving as investment and financial consultant. Alvarez & Marsal is serving as restructuring adviser. As of September 30, 2009, on a book value basis, ERC had approximately $2.7 billion in assets, including $2.2 billion of property and equipment, and $3.0 billion in liabilities. Liabilities include $195.8 million on the revolving credit, $347.5 million on construction credit, $64 million in accounts payable, $47.8 million in subordinate debt, and $475 million in purchase option deposits. Bankruptcy Creditors' Service, Inc., publishes Erickson Retirement Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Erickson Retirement Communities LLC and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) ESCADA AG: C. Marques to Assist in Wind Down of EUSA ---------------------------------------------------- EUSA Liquidation Inc., formerly known as Escada (USA), Inc., seeks the Court's authority to enter into an employment agreement with Christian D. Marques. As previously reported, the Debtor sold substantially all of its assets and business to Escada US Subco, LLC, and successfully closed the sale transaction on January 15, 2010. Accordingly, the Debtor terminated all of its employees on January 14. Moreover, Escada AG, the sole stockholder of the Debtor, removed each member of the Debtor's board of directors from their positions and appointed Mr. Marques as sole director as of January 14. Subco subsequently hired substantially all of the Debtor's former employees, including its senior management team other than Mr. Marques, the Debtor's former executive vice president, chief financial officer and treasurer on January 15. Mr. Marques, in his capacity as sole director, then appointed himself as President and Treasurer of the Debtor. Counsel to the Debtor, Gerald S. Bender, Esq., at O'Melveny & Myers LLP, in New York, avers that Mr. Marques, due to his extensive knowledge of the Debtor's financial condition and operations, is qualified to act as the Debtor's President and Treasurer and to assist the Debtor with its continuing obligations, including post-Closing matters, continuing corporate obligations and the preparation and prosecution of a plan of liquidation and subsequent wind-down of its estate. Mr. Marques is currently a party to certain agreements which were crucial to his retention by Debtor prior to the Petition Date, Mr. Bender points out. The Agreements were also an integral part of Mr. Marques' compensation arrangement with the Debtor. The Agreements are: (i) a Split Dollar Agreement, as amended, which provides that the Debtor will pay Mr. Marques a portion of the annual premium on a life insurance policy with Massachusetts Mutual Life Insurance to which Mr. Marques is the sole beneficiary; and (ii) a severance agreement, dated October 27, 2008, which provides that the termination of Mr. Marques' employment by the Debtor entitles him to a lump sum severance payment equal to $150,000 as well as continued coverage under the Debtor's health insurance programs, upon Mr. Marques' election. The Debtor now seeks to enter into an employment agreement with Mr. Marques that will provide him with similar benefits as those he is already entitled to. The Split Dollar Agreement is to be amended, superseded or modified, as necessary and appropriate, by the terms of the Employment Agreement. Terms of the Employment Agreement The Employment Agreement provides for a six-month term of Mr. Marques' employment commencing on January 15, 2010, and ending on July 15, 2010, at a salary of $25,000 per month. The Debtor will also reimburse Mr. Marques for reasonable business-related expenses, subject to review by the Official Committee of Unsecured Creditors. The Employment Agreement, however, does not provide a bonus or any form of incentive compensation during Mr. Marques' term of employment. With respect to benefits, the Debtor will pay for Mr. Marques' medical care and dental care continuation coverage pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985, which COBRA payments will total $11,638 over the life of the Employment Agreement. Following expiration of the Employment Agreement, the Debtor will reimburse Mr. Marques for an additional six months of COBRA continuation coverage, if needed. The Debtor will continue to pay the premium payments in connection with the Split Dollar Agreement to Mr. Marques through the expiration of his employment term. Upon the expiration of the employment term, Mr. Marques will receive the benefit of the underlying insurance policy upon his payment to the Debtor of the Split Dollar Rebate Amount plus the aggregate Premium Payments paid by the Debtor during the term of the Employment Agreement. Upon completion of his term under the Employment Agreement, Mr. Marques will receive a $150,000 lump sum payment, equal to six months' gross salary. The Debtor, with the consent of the Creditors' Committee, may terminate Mr. Marques' employment (i) for "cause" at any time, (ii) without cause, (iii) upon Mr. Marques' death, or (iv) in the event Mr. Marques sustains a disability, under which Mr. Marques will not be entitled to receive any further compensation or severance. The Debtor may only terminate Mr. Marques' employment without "cause" with the consent of the Creditors' Committee, and entitle him to full payment of all compensation due for the balance of the Employment Agreement term, plus payment of the severance obligations. Mr. Marques will release and discharge the Debtor with respect to, and from, any and all claims which he has or may in the future have in connection with his previous employment with the Debtor or otherwise. The Debtor, however, will not be released from claims (i) that arise in connection with the new Employment Agreement, (ii) related to rights to indemnification pursuant to the By-laws of the Debtor or applicable state law, (iii) rights against insurance coverage for those losses, or (iv) any rights to payment of benefits pursuant to a retirement or similar plan. Cost Sharing Agreement Mr. Marques has agreed to provide Subco with assistance and advice with respect to the transfer of the Debtor's assets and business to Subco, provided that those services do not materially interfere with his primary duties under the Employment Agreement. In return, Subco has agreed to share the costs of Mr. Marques' retention. Accordingly, the Debtor seeks the Court's approval of the Cost Sharing Agreement it entered into with Subco as of January 15, 2010, pursuant to which Subco "will reimburse the Debtor for 50% of all costs and fees associated with the Debtor's retention and employment of Mr. Marques in connection with the Employment Agreement." Pursuant to the Cost Sharing Agreement, Subco is not obligated to reimburse the Debtor if the Debtor (i) terminates Mr. Marques' employment without cause, and (ii) the termination is made without obtaining the consent of the Creditors' Committee prior to the date of termination. In addition to the reimbursement of 50% of the costs and expenses incurred by the Debtor in connection with the Marques Employment Agreement, Subco will provide Mr. Marques with reasonable office space at Subco's offices at 1412 Broadway, in New York, New York. Given Mr. Marques' knowledge of the Debtor and the services he is expected to perform, the costs associated with the Marques Employment Agreement are more than justified, Mr. Bender asserts. Moreover, Mr. Bender points out, the sharing of costs and expenses pursuant to the Cost Sharing Agreement only amplifies the value that the Debtor will receive for Mr. Marques' services. Accordingly, the Debtor maintains that the Marques Employment Agreement and the Cost Sharing Agreement are in the best interests of its estate and creditors, and should be approved in all respects. U.S. Trustee Objects The Debtor "completely ignored" Section 503(c)(2) of the Bankruptcy Code by allowing severance payments under the Marques Employment Agreement absent satisfaction of the evidentiary burden requirement, Diana G. Adams, the United States Trustee for Region 2, argues. Section 503(c), added in 2005 as part of the Bankruptcy Abuse Prevention and Consumer Protection Act, was intended to curtail payments of retention incentives or severance to insiders, including bonuses granted to other employees without factual and circumstantial justification, Trial Attorney Elisabetta G. Gasparini, Esq., in New York, relates, on behalf of the U.S. Trustee. Mr. Marques is an insider of the Debtor as that term is defined under Section 101(31) of the Bankruptcy Code. Despite this, the Debtor has failed to show (i) that the severance payments sought to be made are part of a program that generally is applicable to all full-time employees; and (ii) that the amount of the payment is not greater than 10 times the amount of the mean severance pay given to non-management employees during the calendar year in which the payment is made, Ms. Gasparini notes. Neither has the Debtor submitted affidavits, declarations or other evidence in support of its Employment Motion to satisfy its burden under Section 503(c)(2), she adds. Ms. Gasparini says it is "unclear" whether there were any severance payments made during the first two weeks of 2010, prior to the closing of the Sale Transaction. Moreover, paying the Severance Payments to Mr. Marques would have the effect of rewarding a senior manager and insider of the Debtor, who also ran the company prepetition, while reducing monies available to pay creditor claims, Ms. Gasparini contends. This would fly in the face of Section 503(c), which was explicitly enacted to limit a debtor's ability to favor insiders economically at the expense of all other creditors, Ms. Gasparini tells Judge Bernstein, citing In re Pilgrim's Pride Corp., 401 B.R. at 234 Accordingly, the U.S. Trustee maintains that Severance Payments under the Employment Agreements should be disallowed. Judge Bernstein will consider the Debtor's request on February 23, 2010. About Escada AG The ESCADA Group -- http://www.escada.com/-- is an international fashion group for women's apparel and accessories, which is active on the international luxury goods market. It has pursued a course of steady expansion since its founding in 1976 by Margaretha and Wolfgang Ley and today has 182 own shops and 225 franchise shops/corners in more than 60 countries. As of August 10, 2009, the Escada Group operated 176 owned stores and so-called shop in shops, of which 26 owned stores are located in the United States and operated by Escada (USA) Inc. and 2 stores are planned to be opened in the United States before year end. Escada Group products are also sold in 163 stores worldwide which are operated by franchisees. Escada Group had total assets of EUR322.2 million against total liabilities of 338.9 million as of April 30, 2009. Wholly owned subsidiary Escada (USA) Inc. filed for Chapter 11 on August 14, 2009 (Bankr. S.D.N.Y. Case No. 09-15008). Judge Stuart M. Bernstein handles the case. O'Melveny & Myers LLP has been tapped as bankruptcy counsel. Kurtzman Carson Consultants serves as claims and notice agent. Escada US listed US$50 million to US$100 million in assets and US$100 million to US$500 million in debts in its petition. Bankruptcy Creditors' Service, Inc., publishes Escada USA Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Escada USA, and the insolvency proceedings of ESCADA AG and its units. (http://bankrupt.com/newsstand/or 215/945-7000) ESCADA AG: Creditors Oppose Plan Extension for EUSA --------------------------------------------------- The Official Committee of Unsecured Creditors in the Chapter 11 case of EUSA Liquidation Inc., formerly known as Escada (USA), Inc., is "very concerned" about the Debtor's proposed extension of the exclusive periods within which the Debtor (i) may file a Chapter 11 plan through March 31, 2010, and (ii) solicit acceptances of that plan through May 30, 2010. The Debtor told Judge Bernstein that it has focused on stabilizing its business operations and preparing for, negotiating and documenting the sale of substantially all of its assets and business to Escada US Subco LLC. The Debtor added that the consummation of the Asset Sale on January 15, 2010, also prevented it from formulating a viable and confirmable Chapter 11 plan. "As a result of the closing of the Sale, the Debtor is no longer operating its business, and has one remaining employee, Christian Marques. Accordingly, the focus of this case should now be, as it always should have been, squarely upon the preparation and confirmation of a plan of liquidation to marshal the Debtor's assets, reconcile claims, and distribute the Debtor's assets to its creditors," Melanie L. Cyganowski, Esq., at Otterbourg, Steindler, Houston & Rosen, P.C., in New York, points out, on behalf of the Creditors Committee. Ms. Cyganowski says the liquidation of the Debtor's remaining assets should be a straight-forward process, especially since the Debtor has already consummated the Sale and does not have any significant prepetition secured debts. Hence, she notes, the plan of liquidation in the Debtor's case should not be overly complex or controversial since the distribution will likely be from one single "pot" for virtually all creditors. According to Ms. Cyganowski, the Creditors' Committee has repeatedly asked the Debtor to provide a draft plan and disclosure statement. The Debtor repeatedly represented that it would provide a draft, but, to date, had failed to do so. "[This is] especially surprising because, from the very filing of this case, the Debtor has consistently represented that it anticipated a sale and liquidation of its assets," she notes. Against this backdrop, the Creditors Committee contends that the proposed six-week extension of the Exclusive Plan Filing Deadline and the Exclusive Plan Solicitation Deadline through the end of March and May 2010 is unnecessary. Judge Bernstein will convene a hearing on February 23, 2010, to consider the extension request on the Exclusive Periods. About Escada AG The ESCADA Group -- http://www.escada.com/-- is an international fashion group for women's apparel and accessories, which is active on the international luxury goods market. It has pursued a course of steady expansion since its founding in 1976 by Margaretha and Wolfgang Ley and today has 182 own shops and 225 franchise shops/corners in more than 60 countries. As of August 10, 2009, the Escada Group operated 176 owned stores and so-called shop in shops, of which 26 owned stores are located in the United States and operated by Escada (USA) Inc. and 2 stores are planned to be opened in the United States before year end. Escada Group products are also sold in 163 stores worldwide which are operated by franchisees. Escada Group had total assets of EUR322.2 million against total liabilities of 338.9 million as of April 30, 2009. Wholly owned subsidiary Escada (USA) Inc. filed for Chapter 11 on August 14, 2009 (Bankr. S.D.N.Y. Case No. 09-15008). Judge Stuart M. Bernstein handles the case. O'Melveny & Myers LLP has been tapped as bankruptcy counsel. Kurtzman Carson Consultants serves as claims and notice agent. Escada US listed US$50 million to US$100 million in assets and US$100 million to US$500 million in debts in its petition. Bankruptcy Creditors' Service, Inc., publishes Escada USA Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Escada USA, and the insolvency proceedings of ESCADA AG and its units. (http://bankrupt.com/newsstand/or 215/945-7000) ESCADA AG: U.S. Unit Proposes March 31 Admin. Claims Bar Date ------------------------------------------------------------- EUSA Liquidation Inc., formerly known as Escada (USA), Inc., asks the U.S. Bankruptcy Court to establish March 31, 2010, as the final date by which all parties, including governmental units, must file requests for allowance of administrative expense claims arising under Sections 503 and 507(a)(1) in the Debtor's Chapter 11 case. The Debtor also asks Judge Bernstein's approval to apply the Administrative Claims Bar Date to all accrued and unpaid Administrative Claims arising from and after the Petition Date through the closing of the Debtor's sale substantially all of its assets and business to Escada US Subco LLC on January 15, 2010, pursuant to the Purchase Agreement, except for these Excluded Claims: * administrative claims of professionals retained pursuant to Sections 327 and 328 of the Bankruptcy Code; and * the United States Trustee fees pursuant to Section 1930 of the Judiciary and Judicial Procedures Code. Setting a deadline for filing Administrative Claims and barring untimely claims is necessary to quantify the aggregate dollar amount of Administrative Claims outstanding against the Debtor, which is essential to formulating a plan of liquidation, Gerald S. Bender, Esq., at O'Melveny & Myers LLP, in New York, asserts. According to Mr. Bender, the Debtor is currently proceeding with formulating and proposing a plan of liquidation to allow it to make distributions to creditors. To facilitate the plan process, the Debtor requires finality on the number and amount of Administrative Claims that will be asserted against its estate. Accordingly, the proposed Administrative Claims Bar Date will allow the Debtor to expeditiously move forward with formulating and proposing a plan of liquidation in its Chapter 11 case, Mr. Bender maintains. Admin. Claims Filing Procedures The Debtor proposes that an Administrative Claim against the Debtor must be made in writing, conform to the Bankruptcy Rules and the Local Rules, and must be filed by either overnight mail, first class mail, or by hand delivery to: EUSA Liquidation Inc. (f/k/a Escada USA Inc.) Claims Processing Center c/o Kurtzman Carson Consultants, LLC 2335 Alaska Avenue El Segundo, CA 90245 (866) 967-0490 Administrative claims may also be sent by hand delivery to: The United States Bankruptcy Court Southern District of New York 1 Bowling Green, Room 534 New York, NY 10004 The Administrative Claim will be deemed filed only if actually filed in conformity with procedures and when received by KCC as the Debtor's Claims and Noticing Agent or by the Court. The Administrative Claim must: (i) state the name of the claimant and the nature of the claim or interest of the asserting party, (ii) specify the name and case number of the Chapter 11 case, (iii) set forth with specificity the grounds for the claim, and (iv) include supporting documentation or an explanation as to why documentation is not available. Pursuant to Rule 3003(c)(2) of the Federal Rules of Bankruptcy Procedure, any claimant that fails to timely and property file its Administrative Claim will be forever barred, estopped and enjoined from asserting that claim against the Debtor. As a result, the Debtor will be forever discharged from any and all indebtedness or liability with respect to the Administrative Claim, and the holder will not be permitted to participate in any distribution in the Debtor's Chapter 11 case or receive further notices on account of that Administrative Claim. The Debtor further asks the Court to approve the notice of the Administrative Claims Bar Date, which the Debtor intends to serve at least 25 days prior to the Administrative Claims Bar Date on: * those parties who have requested notice pursuant to Rule 2002 of the Federal Rules of Bankruptcy Procedure; * the United States Trustee; * counsel to the Official Committee of Unsecured Creditors; * all known counterparties to the Debtor's contracts and leases; * all former employees; * all other known holders of prepetition claims; and * all other parties known by the Debtor to hold or assert Administrative Claims, including taxing authorities. The Debtor intends to publish a modified form of the Administrative Claims Bar Date Notice for publication once in Women's Wear Daily. About Escada AG The ESCADA Group -- http://www.escada.com/-- is an international fashion group for women's apparel and accessories, which is active on the international luxury goods market. It has pursued a course of steady expansion since its founding in 1976 by Margaretha and Wolfgang Ley and today has 182 own shops and 225 franchise shops/corners in more than 60 countries. As of August 10, 2009, the Escada Group operated 176 owned stores and so-called shop in shops, of which 26 owned stores are located in the United States and operated by Escada (USA) Inc. and 2 stores are planned to be opened in the United States before year end. Escada Group products are also sold in 163 stores worldwide which are operated by franchisees. Escada Group had total assets of EUR322.2 million against total liabilities of 338.9 million as of April 30, 2009. Wholly owned subsidiary Escada (USA) Inc. filed for Chapter 11 on August 14, 2009 (Bankr. S.D.N.Y. Case No. 09-15008). Judge Stuart M. Bernstein handles the case. O'Melveny & Myers LLP has been tapped as bankruptcy counsel. Kurtzman Carson Consultants serves as claims and notice agent. Escada US listed US$50 million to US$100 million in assets and US$100 million to US$500 million in debts in its petition. Bankruptcy Creditors' Service, Inc., publishes Escada USA Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Escada USA, and the insolvency proceedings of ESCADA AG and its units. (http://bankrupt.com/newsstand/or 215/945-7000) ETHAN ALLEN: Moody's Downgrades Credit Ratings to 'Ba2' ------------------------------------------------------- Moody's Investors Service lowered Ethan Allen's credit ratings to Ba2 and stabilized the company's rating outlook. Moody's action reflects the decline in debt protection measures due to the impact of the economic recession. However, the stable outlook reflects our expectation that management actions taken over the past year will lead to improving profitability and operating cash flow over the next several quarters. The company's liquidity position is stable and should continue to improve going forward. Moody's downgraded these ratings to Ba2: corporate family rating, probability of default rating and the senior unsecured notes rating. The speculative grade liquidity rating was affirmed at SGL 2. "The stable outlook reflects Moody's expectation that the combination of stabilized discretionary consumer spending, albeit at significantly lower levels than in the past, and Ethan Allen's new initiatives such as migrating toward custom order case goods are likely to result in quarterly improvements in revenue, profitability and operating cash flow," said Kevin Cassidy, Senior Credit Officer at Moody's Investors Service. While not enough to offset the dramatic decreases in the first two quarters, the expected quarterly improvements should diminish the annual decrease. For example, Moody's expects fiscal 2010 revenue to range from $600 million to $625 million and adjusted EBITDA to be between $60 million and $70 million. The one notch downgrade in the corporate family rating incorporates Moody's expectation that Ethan Allen's business profile, operating results and credit metrics are more reflective of a Ba2 consumer durable company over the medium to long term than a Ba1 consumer durable company. For example, revenue is not expected to meaningfully exceed $700 million, financial leverage is expected to range from 3x to 4x and operating margins are expected to be in the high single digits. These ratings were downgraded: -- Corporate Family Rating to Ba2 from Ba1; -- Probability of Default Rating to Ba2 from Ba1; and -- 200 million senior unsecured notes, due 2015, to Ba2 (LGD 4, 58%) from Ba1 (LGD 4, 58%) This rating was affirmed: -- Speculative Grade Liquidity rating at SGL-2 The last rating action was on June 8, 2009, where the rating was downgraded to Ba1 with a negative outlook. Ethan Allen is a manufacturer, wholesaler, and retailer of the furniture, upholstery, and accessories in the U.S. Revenues approximated $560 million for the twelve months ended December 31, 2009. FAIRFIELD RESIDENTIAL: Seeks Time to Fix Disclosure Statement ------------------------------------------------------------- Fairfield Residential LLC asked the bankruptcy judge to delay the hearing on its disclosure statement so that it can address several objections, Law360 reports. Fairfield will commence soliciting votes on, then seek approval of its liquidating plan after the explanatory disclosure statement is approved. Under the Plan, an initial liquidating trustee will be selected by creditors. Holders of unsecured claims will split available cash allocated for these creditors. Holders of convenience claims will receive cash equal to 100% of the face amount thereof up to a maximum of $1,000 total payout in full and final satisfaction of the claim. Interestholders won't receive anything from the liquidating trustee. Newco will be formed as a new entity, which will hold, directly or indirectly, all of the equity interests of Reorganized FF Properties. Reorganized Fairfield will retain the Reorganized Fairfield Assets and will assume certain executory contracts and operating liabilities of FF Properties and its affiliates associated with the employees of the Debtors. Newco will be structured for administrative and tax efficiency consistent with its two primary businesses: (i) providing management and other services and (ii) investing as a general partner in new projects. A copy of the Plan is available for free at: http://bankrupt.com/misc/FAIRFIELD_RESIDENTIAL_plan.pdf About Fairfield Residential San Diego, California-based Fairfield Residential LLC is a fully integrated multifamily housing company that through its various subsidiaries provides a diverse mix of services to a wide range of investors, joint venture partners and clients. FFR either directly or indirectly acts as a general partner or managing member of, and owns varying stakes in, a number of project level operating companies. The Company and its affiliates -- FF Development, Inc., et al. -- filed for Chapter 11 bankruptcy protection on December 13, 2009 (Bankr. D. Delaware Case No. 09-14378). Daniel J. DeFranceschi, Esq.; Lee E. Kaufman, Esq.; Paul Noble Heath, Esq.; and Travis A. McRoberts, Esq., at Richards, Layton & Finger, P.A., assist the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors is represented by Brett H. Miller, Esq., Stefan W. Engelhardt, Esq., and Melissa A. Hager, Esq., at Morrison & Foerster LLP; and William E. Chipman Jr., Esq., Kerri K. Mumford, Esq., and Kimberly A. Brown, Esq., at Landis Rath & Cobb LLP. Fairfield Residential listed $100,000,001 to $500,000,000 in assets and more than $1,000,000,000 in liabilities. Dow Jones says Fairfield listed assets worth $958 million and liabilities of nearly $835 million. FIDDLER'S CREEK: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Fiddler's Creek, LLC 8156 Fiddler's Creek Parkway Naples, FL 34114 Bankruptcy Case No.: 10-03846 Chapter 11 Petition Date: February 23, 2010 Court: United States Bankruptcy Court Middle District of Florida (Ft. Myers) Judge: Alexander L. Paskay Debtors' Counsel: Paul J. Battista, Esq. Genovese Joblove & Battista PA 100 Southeast 2nd Street, 44th Floor Miami, FL 33131 Tel: (305) 349-2300 Fax: (305) 349-2310 Email: pbattista@gjb-law.com Estimated Assets: $100,000,001 to $500,000,000 Estimated Debts: $100,000,001 to $500,000,000 A list of the Company's 20 largest unsecured creditors is available for free at: http://bankrupt.com/misc/flmb10-03846.pdf Debtor's List of 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ AON Risk Services Inc. Trade Claim of GBFC $38,867 of NY Development Ltd. Ash City USA Trade Claim of FC $5,560 Golf Ltd. Avalon Risk Inc 35000004 Trade Claim of 951 $4,840 Land Holdings Ltd. Bellagio Village Trade Claim of GBFC $6,927 Association Development Ltd. Carriage Limousine LLC Trade Claim of $9,231 Fiddler's Creek Management Inc. Century Link Trade Claim of GBFC $11,097 Development Ltd. Cranberry Crossing Trade Claim of GBFC $3,723 Development Ltd. Evans Oil Company Trade Claim of GBFC $10,761 Marina Ltd. and FC Golf Ltd. FBS Property Tax Trade Claim of GBFC $21,083 Abatement LLC Development Ltd. Grand Western Brands Inc. Trade Claim of Gulf $6,122 Bay Hospitality Ltd. Guymann Construction Trade Claim of GBP $100,800 of FL Development Ltd. Jenner & Block LLP Trade Claim of GBFC $158,207 Development Ltd. John Deere Landscapes Trade Claim of FC $23,100 Golf Ltd. Lee County Port Authority Trade Claim of GBFC $17,985 Development Ltd. SYSCO West Coast FL Trade Claim of Gulf $31,408 Bay Hospitality Ltd. Tampa Bay Trane Trade Claim of Gulf $9,913 Bay Hospitality Ltd. & FC Golf Ltd. Textron Business Services Trade Claim of FC $48,006 Inc. Golf Ltd. The Advocacy Group at Tew Trade Claim of FC $80,090 Cardenas LLC Golf Ltd. Titleist/Acushnet Company Trade Claim of FC $4,051 Golf Ltd United Capital Funding Trade Claim of Gulf $4,550 Corp Bay Hospitality Ltd. The petition was signed by Anthony DiNardo, the company's authorized officer. Debtor-affiliates that filed separate Chapter 11 petitions February 23, 2009: (1) 951 Land Holdings, LLC Case No: 10-03852 Estimated Assets: $0 to $50,000 Estimated Debts: $0 to $50,000 (2) DY Associates, LLC Case No: 10-03856 Estimated Assets: $0 to $50,000 Estimated Debts: $0 to $50,000 (3) GBFC Development, LLC Case No: 10-03864 Estimated Assets: $0 to $50,000 Estimated Debts: $0 to $50,000 (4) FC Marina, LLC Case No: 10-03872 Estimated Assets: $0 to $50,000 Estimated Debts: $0 to $50,000 (5) FC Beach, LLC Case No: 10-03873 Estimated Assets: $0 to $50,000 Estimated Debts: $0 to $50,000 (6) FC Golf, LLC Case No: 10-03875 Estimated Assets: $0 to $50,000 Estimated Debts: $0 to $50,000 (7) DY Land Holdings II, LLC Case No: 10-03878 Estimated Assets: $50,000,001 to $100,000,000 Estimated Debts: $10,000,001 to $50,000,000 (8) FC Parcel 73, LLC Case No: 10-03881 Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $1,000,001 to $10,000,000 (9) FC Commercial, LLC Case No: 10-03886 Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $10,000,001 to $50,000,000 (10) FC Hotel, LLC Case No: 10-03888 Estimated Assets: $0 to $50,000 Estimated Debts: $0 to $50,000 (11) FC Resort, LLC Case No: 10-03896 Estimated Assets: $0 to $50,000 Estimated Debts: $0 to $50,000 (12) Gulf Bay Hospitality Company, LLC Case No: 10-03898 Estimated Assets: $0 to $50,000 Estimated Debts: $0 to $50,000 (13) Gulf Bay Hotel Company, LLC Case No: 10-03905 Estimated Assets: $0 to $50,000 Estimated Debts: $0 to $50,000 (14) GBP Development, LLC Case No: 10-03908 Estimated Assets: $0 to $50,000 Estimated Debts: $0 to $50,000 (15) GB Peninsula, Ltd. Case No: 10-03909 Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $10,000,001 to $50,000,000 (16) 951 Land Holdings, Ltd. Case No: 10-03911 Estimated Assets: $100,000,001 to $500,000,000 Estimated Debts: $100,000,001 to $500,000,000 (17) DY Land Associates, Ltd. Case No: 10-03918 Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $10,000,001 to $50,000,000 (18) GBFC Development, Ltd. Case No: 10-03920 Estimated Assets: $100,000,001 to $500,000,000 Estimated Debts: $50,000,001 to $100,000,000 (19) GBFC Marina, Ltd. Case No: 10-03928 Estimated Assets: $50,000,001 to $100,000,000 Estimated Debts: $50,000,001 to $100,000,000 (20) FC Beach, Ltd. Case No: 10-03934 Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 (21) FC Golf, Ltd. Case No: 10-03937 Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $10,000,001 to $50,000,000 (22) FC Hotel, Ltd. Case No: 10-03938 Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 (23) FC Resort, Ltd. Case No: 10-03947 Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $10,000,001 to $50,000,000 (24) Gulf Bay Hospitality, Ltd. Case No: 10-03949 Estimated Assets: $500,001 to $1,000,000 Estimated Debts: $1,000,001 to $10,000,000 (25) Gulf Bay Hotel Company, Ltd. Case No: 10-03950 Estimated Assets: $$1,000,001 to $10,000,000 Estimated Debts: $0 to $50,000 (26) GBP Development, Ltd. Case No: 10-03952 Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $10,000,001 to $50,000,000 (27) Fiddler's Creek Management, Inc. Case No: 10-03954 Estimated Assets: $500,001 to $1,000,000 Estimated Debts: $1,000,001 to $10,000,000 FIRESTONE ASSOCIATES: Case Summary & 5 Largest Unsecured Creditors ------------------------------------------------------------------ Debtor: Firestone Associates, LLC 8077 Florence Avenue Downey, CA 90240 Bankruptcy Case No.: 10-16498 Chapter 11 Petition Date: February 23, 2010 Court: United States Bankruptcy Court Central District of California (Los Angeles) Judge: Barry Russell Debtor's Counsel: Carolyn A. Dye, Esq. 3435 Wilshire Blvd., Ste 1045 Los Angeles, CA 90010 Tel: (213) 368-5000 Email: trustee@cadye.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $10,000,001 to $50,000,000 According to the schedules, the Company has assets of $7,000,100, and total debts of $6,924,385. A full-text copy of the Debtor's petition, including a list of its 5 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/cacb10-16498.pdf The petition was signed by David Sarinana, managing member of the Company. FIRST CONVALESCENT: Case Summary & 15 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: First Convalescent, LLC 550 Hammond Drive NE Atlanta, GA 30328 Bankruptcy Case No.: 10-65131 Chapter 11 Petition Date: February 23, 2010 Court: United States Bankruptcy Court Northern District of Georgia (Atlanta) Judge: C. Ray Mullins Debtor's Counsel: George D. Houser, Esq. George D. Houser, Attorney at Law 550 Hammond Drive NE Sandy Springs, GA 30328 Tel: (404) 228-3148 Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $500,001 to $1,000,000 A full-text copy of the Debtor's petition, including a list of its 15 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/ganb10-65131.pdf The petition was signed by George D. Houser, manager of the Company. FLYING J: Term Loan Agent Opposes Exclusivity Extension ------------------------------------------------------- Wilmington Trust Company, agent for a group of prepetition term lenders, is seeking to thwart Flying J Inc.'s request for an extension of its exclusive period to file a Chapter 11 plan, according to Law360. The Debtors are asking the Court to extend their exclusive periods to file a Chapter 11 plan until June 22, 2010, and to solicit acceptances of that plan until August 22, 2010. The Debtors said they need additional time to finalize a plan of reorganization for the debtor entities in cooperation with the major creditor constituencies and Pilot Travel Center LLC, the purchaser of all of the Debtors' retail assets. About Flying J Inc. 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. FOOTHILLS RESOURCES: Emerges from Chapter 11 Bankruptcy ------------------------------------------------------- Foothills Resources, Inc., and its subsidiaries have completed their financial restructuring and emerged from bankruptcy protection. "This successful financial restructuring is a significant accomplishment, and we are satisfied with the outcome," said W. Kirk Bosche, chief financial officer of the Company. "Thanks to the hard work and commitment of our employees, officers, directors and advisors, Foothills is now emerging from reorganization as a stronger entity and better positioned to support its operations." The Company's emergence from bankruptcy was preceded by confirmation of the Debtors' First Amended Joint Plan of Reorganization Under Chapter 11 of the Bankruptcy Code (Modified) (the "Plan") in the U.S. Bankruptcy Court in Wilmington, Delaware on January 29, 2010. Under the terms of the confirmed Plan: * The Company has a commitment for a $27,954,700 exit financing facility from one of the Company's pre-petition secured lenders. * The exit financing facility will be used to pay down a portion of the Company's pre-petition secured debt. * A portion of the Company's pre-petition secured debt will be exchanged for all of the equity in the restructured Company. The Plan was supported by virtually all of the Company's creditors and interest holders, including the Company's pre-petition secured lenders, unsecured creditors, and equity interest holders. By application of the Plan, all of the Company's equity securities, including its publicly traded common stock, have been cancelled and no such shares remain outstanding. Following the dramatic decline in commodity prices experienced in the second half of 2008, the Company voluntarily filed for chapter 11 bankruptcy protection in Delaware on February 11, 2009 when, as a result, it was no longer able to service its secured indebtedness and the prevailing disruption in the credit markets foreclosed any opportunity to refinance its debt other than through a reorganization proceeding. The Company was represented in its chapter 11 restructuring by Charles R. Gibbs and Sarah Link Schultz of Akin Gump Strauss Hauer & Feld LLP and Patrick J. Reilley of Cole, Schotz, Meisel, Forman & Leonard, P.A. About Foothills Resources Foothills Resources, Inc., is engaged in the acquisition, exploration and development of oil and natural gas properties. The Company's operations are conducted primarily through its wholly owned subsidiaries, Foothills California, Inc., Foothills Texas, Inc., and Foothills Oklahoma, Inc. On February 11, 2009, Foothills Resources and its wholly owned subsidiaries, Foothills California, Foothills Oklahoma, and Foothills Texas, filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 09-10452). Judge Christopher S. Sontchi handles the Chapter 11 cases. Akin Gump Strauss Hauer & Feld LLP is the Debtors' lead bankruptcy counsel. Norman L. Pernick, Esq., and Patrick J. Reilley, Esq., at Cole, Schotz, Meisel, Forman & Leonard, represent the Debtors as Delaware counsel. The Garden City Group, Inc., is the claims agent for the Debtors. The explanatory disclosure statement, filed along with Foothills' plan, says that assets were $41 million and debt was $59.5 million on Dec. 31. The Chapter 11 petition and a regulatory filing listed assets of $89.5 million and debt totaling $78.8 million as of Sept. 30, 2008, with $71.2 million owing to secured creditors on term loan and revolving credit agreements. FRASER PAPERS: Clears Final Conditions of Sale of Business ---------------------------------------------------------- Fraser Papers Inc. has cleared the remaining material conditions under an offer to purchase its specialty papers business. The Company, the Canadian Energy and Paperworkers Union of Canada, the Government of New Brunswick and other stakeholders agreed to the broad terms under which Fraser Papers will proceed to close the sale of its specialty papers business to a company sponsored by the secured creditors of Fraser Papers. The Agreement included proposed changes to the collective agreements at the Company's Edmundston pulp and energy complex which will require ratification on or before March 10, 2010. The Company filed the Agreement with the Ontario Superior Court of Justice. The Company will work diligently with its secured creditors and Newco to close the sale of the specialty papers business before March 31, 2010. The final agreement (the "Purchase Agreement") will be subject to court approval prior to closing. Under the terms of the Purchase Agreement, the unsecured creditors of Fraser Papers will receive promissory notes and a 49% common equity interest in the new company. Brookfield Asset Management Inc., a secured creditor, has agreed to convert its secured claim against the Company into a 51% common equity interest in Newco while the Government of New Brunswick has agreed to convert its $35 million secured loan plus accrued interest into equity in the form of preferred shares of the new company. Newco and the Company are currently negotiating a $50 million revolving credit facility with CIT Business Credit Canada Inc., which will provide Newco with operating liquidity. The Company disclosed that the Court has granted a further extension of the initial Order under which Fraser Papers, was granted creditor protection under the Companies' Creditors Arrangement Act. This extension is through April 9, 2010 and was supported by PricewaterhouseCoopers Inc., the Court appointed Monitor of the Company's CCAA process. About Fraser Papers Fraser Papers -- http://www.fraserpapers.com/-- is an integrated specialty paper company that produces a broad range of specialty packaging and printing papers. The Company has operations in New Brunswick, Maine, New Hampshire and Quebec. On June 18, 2009, citing continued operating losses, weak markets for pulp and lumber, impending debt repayments and significant pension funding obligations, the Company and its subsidiaries filed for protection under the Companies Creditors Arrangement Act (Ont. Super. Ct. J. Ct. File No. CV-09-8241-00CL) in Toronto and Chapter 15 (Bankr. D. Del. Case No. 09-12123) of the U.S. Bankruptcy Code. Fraser is represented by Michael Barrack, Esq., Robert I. Thornton, Esq., and D.J. Miller, Esq., at ThorntonGroutFinnigan LLP, in Toronto, and Derek C. Abbott, Esq., at Morris, Nichols, Arsht & Tunnell LLP, in Wilmington, Del. With adequate financing to support continuing operations, Fraser says it is developing a restructuring plan to present to its creditors -- hopefully by Oct. 16, 2009 -- with the objective of emerging with a sustainable and profitable specialty papers business. FREESCALE SEMICONDUCTOR: Closes Senior Secured Notes Offering ------------------------------------------------------------- Freescale Semiconductor Inc. closed the private offering of its senior secured notes. The offering consists of $750 million principal amount of its 10-1/8% senior secured notes due 2018. All of the proceeds from the offering will be used to repay indebtedness outstanding under the Company's credit facility at par. About Freescale Semiconductor Freescale Semiconductor -- http://www.freescale.com/-- is a global leader in the design and manufacture of embedded semiconductors for the automotive, consumer, industrial, networking and wireless markets. The privately held company is based in Austin, Texas, and has design, research and development, manufacturing or sales operations around the world. Freescale's corporate credit ratings from Standard & Poor's, Moody's and Fitch are 'B-', 'Caa1' and 'CCC', respectively. * * * According to the Troubled Company Reporter on Feb. 23, 2010, Fitch Ratings rates Freescale Semiconductor Inc.'s $750 million senior secured note offering due 2018, which are pari passu with the existing senior secured debt, at 'CCC/RR4'. Additionally, Fitch believes that the current ratings on Freescale Semiconductor Inc. are unaffected by the company's amendment to its existing bank credit facility. GENCORP INC: BlackRock Holds 6.59% of Common Stock -------------------------------------------------- BlackRock Inc. disclosed that as of December 31, 2009, it may be deemed to beneficially own 3,856,990 shares or roughly 6.59% of the common stock of GenCorp Incorporated. GenCorp Inc. manufactures aerospace and defense systems, with a separate real estate segment. GenCorp's Aerospace and Defense segment includes the operations of Aerojet-General Corporation, which develops and manufactures propulsion systems for defense and space applications, armament systems for precision tactical weapon systems and munitions applications. GenCorp's Real Estate segment includes activities related to the entitlement, sale, and leasing of excess real estate assets. GenCorp owns 12,200 acres of land adjacent to U.S. Highway 50 between Rancho Cordova and Folsom, California, east of Sacramento. GenCorp also owns 580 acres in Chino Hills, California. As of November 30, 2009, the Company had total assets of $935.7 million against total liabilities of $1.224 billion, resulting in stockholders' deficit of $295.1 million. * * * According to the Troubled Company Reporter on Jan. 26, 2010, Standard & Poor's Ratings Services said it raised its ratings on GenCorp Inc. by one notch and removed all ratings from CreditWatch, where S&P had placed them with positive implications on Dec. 15, 2009. The corporate credit rating is now 'B-' and the outlook is stable. The recovery ratings were not on CreditWatch and remain unchanged. The rating actions follow the company's repayment of $125 million of debt that was tendered to it, with proceeds from the $200 million in convertible subordinated debentures it issued in late December 2009. GENCORP INC: Files Shelf Prospectus; May Sell $200MM of Securities ------------------------------------------------------------------ GenCorp Inc. is eyeing to sell up to $200,000,000 of debt securities and common stock, par value $0.10 per share. GenCorp said in a shelf-registration statement filed with the Securities and Exchange Commission that the securities may be offered and sold by the Company in one or more offerings. The debt securities may be convertible into or exercisable or exchangeable for common stock or other of the Company's securities or securities of one or more other entities. Shares of the Company's common stock are traded on the New York Stock Exchange and the Chicago Stock Exchange under the symbol "GY". Gencorp may offer and sell the securities to or through one or more underwriters, dealers and agents, or directly to purchasers, on a continuous or delayed basis. In December 2009, GenCorp closed an offering of $200 million aggregate principal amount of 4.0625% Convertible Subordinated Debentures due 2039 in a private placement to qualified institutional buyers. GenCorp used a portion of the net proceeds in January 2010 to repurchase $124.7 million of 4% Contingent Convertible Subordinated Notes due 2024. As a result of the repurchase of the Notes, GenCorp's borrowing availability under the revolving credit facility provided for in its senior credit facility, which had been reduced to $60 million effective May 1, 2009, was restored to $80 million. A full-text copy of the shelf prospectus is available at no charge at http://ResearchArchives.com/t/s?54b9 About GenCorp GenCorp Inc. manufactures aerospace and defense systems, with a separate real estate segment. GenCorp's Aerospace and Defense segment includes the operations of Aerojet-General Corporation, which develops and manufactures propulsion systems for defense and space applications, armament systems for precision tactical weapon systems and munitions applications. GenCorp's Real Estate segment includes activities related to the entitlement, sale, and leasing of excess real estate assets. GenCorp owns 12,200 acres of land adjacent to U.S. Highway 50 between Rancho Cordova and Folsom, California, east of Sacramento. GenCorp also owns 580 acres in Chino Hills, California. As of November 30, 2009, the Company had total assets of $935.7 million against total liabilities of $1.224 billion, resulting in stockholders' deficit of $295.1 million. * * * According to the Troubled Company Reporter on Jan. 26, 2010, Standard & Poor's Ratings Services said it raised its ratings on GenCorp Inc. by one notch and removed all ratings from CreditWatch, where S&P had placed them with positive implications on Dec. 15, 2009. The corporate credit rating is now 'B-' and the outlook is stable. The recovery ratings were not on CreditWatch and remain unchanged. The rating actions follow the company's repayment of $125 million of debt that was tendered to it, with proceeds from the $200 million in convertible subordinated debentures it issued in late December 2009. GENCORP INC: Franklin Mutual Advisers Owns 5.7% of Common Stock --------------------------------------------------------------- Franklin Mutual Advisers, LLC, disclosed that as of December 31, 2009, it may be deemed to beneficially own 3,331,352 shares or roughly 5.7% of the common stock of GenCorp Incorporated. The securities are beneficially owned by one or more open-end investment companies or other managed accounts which, pursuant to investment management contracts, are managed by Franklin Mutual Advisers, an indirect wholly owned subsidiary of Franklin Resources, Inc. The investment management contracts grant to FMA all investment and voting power over the securities owned by such investment management clients. GenCorp Inc. manufactures aerospace and defense systems, with a separate real estate segment. GenCorp's Aerospace and Defense segment includes the operations of Aerojet-General Corporation, which develops and manufactures propulsion systems for defense and space applications, armament systems for precision tactical weapon systems and munitions applications. GenCorp's Real Estate segment includes activities related to the entitlement, sale, and leasing of excess real estate assets. GenCorp owns 12,200 acres of land adjacent to U.S. Highway 50 between Rancho Cordova and Folsom, California, east of Sacramento. GenCorp also owns 580 acres in Chino Hills, California. As of November 30, 2009, the Company had total assets of $935.7 million against total liabilities of $1.224 billion, resulting in stockholders' deficit of $295.1 million. * * * According to the Troubled Company Reporter on Jan. 26, 2010, Standard & Poor's Ratings Services said it raised its ratings on GenCorp Inc. by one notch and removed all ratings from CreditWatch, where S&P had placed them with positive implications on Dec. 15, 2009. The corporate credit rating is now 'B-' and the outlook is stable. The recovery ratings were not on CreditWatch and remain unchanged. The rating actions follow the company's repayment of $125 million of debt that was tendered to it, with proceeds from the $200 million in convertible subordinated debentures it issued in late December 2009. GENCORP INC: To Hold Annual Shareholders Meeting on March 24 ------------------------------------------------------------ GenCorp Incorporated will hold its annual meeting of shareholders at 9:00 a.m. Eastern time on March 24, 2010. The meeting will be held at the offices of Olshan Grundman Frome Rosenzweig & Wolosky LLP, Park Avenue Tower, 65 East, 55th Street in New York. At the meeting, shareholders will be asked to: 1. To elect eight directors to the Company's Board of Directors to serve until the 2011 annual meeting of shareholders and until their successors have been duly elected and qualified; 2. To amend the Company's Amended Articles of Incorporation to restrict transfers of the Company's common stock to preserve the value of certain tax assets associated with net operating loss carryforwards under Section 382 of the Internal Revenue Code; 3. To approve an amendment to the GenCorp 2009 Equity and Performance Incentive Plan to increase the number of shares authorized and reserved for issuance thereunder by 1,000,000 shares; 4. To ratify the appointment of PricewaterhouseCoopers LLP as the independent registered public accounting firm of the Company for the fiscal year ending November 30, 2010; and 5. To consider and act on such other business as may properly be brought before the meeting or any adjournments or postponements thereof. A full-text copy of the Company's proxy statement is available at no charge at http://ResearchArchives.com/t/s?54ba About GenCorp GenCorp Inc. manufactures aerospace and defense systems, with a separate real estate segment. GenCorp's Aerospace and Defense segment includes the operations of Aerojet-General Corporation, which develops and manufactures propulsion systems for defense and space applications, armament systems for precision tactical weapon systems and munitions applications. GenCorp's Real Estate segment includes activities related to the entitlement, sale, and leasing of excess real estate assets. GenCorp owns 12,200 acres of land adjacent to U.S. Highway 50 between Rancho Cordova and Folsom, California, east of Sacramento. GenCorp also owns 580 acres in Chino Hills, California. As of November 30, 2009, the Company had total assets of $935.7 million against total liabilities of $1.224 billion, resulting in stockholders' deficit of $295.1 million. * * * According to the Troubled Company Reporter on Jan. 26, 2010, Standard & Poor's Ratings Services said it raised its ratings on GenCorp Inc. by one notch and removed all ratings from CreditWatch, where S&P had placed them with positive implications on Dec. 15, 2009. The corporate credit rating is now 'B-' and the outlook is stable. The recovery ratings were not on CreditWatch and remain unchanged. The rating actions follow the company's repayment of $125 million of debt that was tendered to it, with proceeds from the $200 million in convertible subordinated debentures it issued in late December 2009. GENERAL GROWTH: Has $2.625-Bil. Investment Deal with Brookfield --------------------------------------------------------------- General Growth Properties, Inc., on February 24 announced that it has reached an agreement in principle with Brookfield Asset Management Inc., one of the world's largest real estate investors and asset managers, to invest in a proposed recapitalization of GGP at a plan value of $15.00 per share and provide par plus accrued interest to unsecured creditors. The $2.625 billion proposed equity commitment from Brookfield is not subject to due diligence or any financing condition and is expected to create a floor value for the purpose of raising additional equity for the company. The plan is subject to definitive documentation, approval of the Bankruptcy Court and higher and better offers pursuant to a bidding process to be approved by the Bankruptcy Court. The complete term sheet for the proposed plan with Brookfield is available on GGP's website at http://www.ggp.com/company/Default.aspx?id=97 The proposed plan is designed to maximize value for all GGP stakeholders and enable a restructured GGP to emerge from bankruptcy on a standalone basis with a diverse portfolio of high- quality income-producing assets, strong cash flow and a solid balance sheet capitalized principally with long-term non-recourse debt. Under the terms of the proposed plan: * GGP's existing shareholders will receive one share of new GGP common stock with an initial value of $10.00 per share, plus one share of General Growth Opportunities ("GGO") with an initial value of $5.00 per share, for total consideration of $15.00 per share * Unsecured creditors will receive par plus accrued interest * Brookfield will invest $2.5 billion at $10.00 per share for new GGP common stock and up to $125 million at $5.00 per share for GGO common stock "This proposed plan offers significant value for all of our stakeholders," said Adam Metz, Chief Executive Officer of GGP. "It is designed to allow GGP to deliver a minimum of $15.00 per share in value to our existing common shareholders, while providing our unsecured creditors with par plus accrued interest. The Brookfield-sponsored recapitalization -- coupled with the more than $13 billion of restructured debt, our compelling scale as the second-largest regional mall owner, our fortress assets and a business plan that focuses on further deleveraging the balance sheet and building liquidity -- provides a strong financial foundation for the future. In addition, GGP shareholders will be able to participate in the value-creation opportunity presented by this plan. "We have tremendous respect for Brookfield and its management team. We believe Brookfield will add substantial value to both enterprises over the short and long term through its asset management expertise and access to global institutional capital sources. We look forward to welcoming Brookfield as a significant shareholder in the company following our emergence from Chapter 11," continued Mr. Metz. Terms of the Brookfield Investment Under the terms of the proposal, Brookfield will invest $2.5 billion in cash in GGP in exchange for GGP common stock, thereby providing sufficient liquidity to fund GGP's bankruptcy emergence needs. Brookfield will own approximately 30% of GGP and have the right to nominate three directors. This cornerstone investment will provide the flexibility for GGP to pursue additional capital-raising alternatives up to a total of $5.8 billion, including the issuance of new equity, asset sales and limited new debt issuance. Brookfield has agreed to assist GGP in raising the balance of this capital using its relationships with global institutional capital sources. As part of the restructuring, GGP intends to distribute to GGP shareholders shares in GGO, a new company that will own certain non-core assets, such as all of the company's master planned communities and landmark developments like South Street Seaport and others. A shareholder must be invested in GGP prior to the recapitalization in order to receive a dividend of GGO. These assets produce little or no current income but have the potential for significant long-term value. GGO plans to raise $250 million through a rights offering at $5.00 per share, with Brookfield backstopping $125 million of such offering. "We are excited about the opportunities this recapitalization creates for our company and all of our stakeholders," added Thomas H. Nolan, Jr., President and Chief Operating Officer of GGP. "GGP has an extremely strong portfolio of successful properties, while GGO will have a large portfolio of opportunistic assets that have substantial long-term value, as well as certain assets where we believe value can be created through restructuring. By creating two separate companies, we enable both companies to manage their core strengths, take advantage of different market opportunities and appeal to distinct groups of investors with their own investment criteria. Our shareholders will be able to participate in the expected future value creation of both of these companies." Bid Protection and Path to Completion As consideration for acting as "stalking horse" in the company's process to raise capital, Brookfield will be granted seven-year warrants to purchase 60 million shares of existing GGP common stock at an exercise price of $15.00 per share. The warrants are intended to provide compensation to Brookfield for its financial commitment. Brookfield will not receive any other consideration or bid protection, including any break-up fee, expense reimbursement, commitment fee, underwriting discount or any other fees. The companies expect to move promptly to execute a definitive agreement and file a motion seeking appropriate Bankruptcy Court approval. GGP will also ask the Bankruptcy Court to approve bidding procedures with respect to the solicitation of proposals superior to Brookfield's including, but not limited to, the sale of the company. Until the warrants are approved by the Bankruptcy Court, Pershing Square Capital Management is providing interim protection to Brookfield. If Brookfield's investment in GGP is not made, and the company completes a transaction with another party at a per share value above $12.75, Pershing Square will be obligated to pay Brookfield 25% of its profits from its investment in GGP above $12.75 per share. GGP will not be required to reimburse Pershing Square for any amounts paid pursuant to this agreement. This agreement follows GGP's successful restructuring - or agreements to restructure - more than $13 billion of secured mortgage debt and the emergence from bankruptcy of more than 200 subsidiary debtors owning 108 properties. UBS Investment Bank and Miller Buckfire & Co. LLC served as financial advisors to General Growth Properties, and Weil, Gotshal & Manges LLP acted as legal counsel to the company. Goldman Sachs & Co. and Barclays Capital served as financial advisors to Brookfield, and Willkie Farr & Gallagher LLP acted as legal counsel to Brookfield. About Brookfield Asset Brookfield Asset Management Inc., focused on property, renewable power and infrastructure assets, has over $100 billion of assets under management and is co-listed on the New York and Toronto Stock Exchanges under the symbol BAM and on NYSE Euronext under the symbol BAMA. For more information, please visit its website at http://www.brookfield.com/ * * * The Wall Street Journal's Kris Hudson and Jeffrey McCracken, report that General Growth's complex plan was drafted partly by activist investor and General Growth board member William Ackman. The plan, the Journal says, is meant to top a $10 billion buyout bid that Simon Property Group Inc. made last week. The General Growth-Brookfield plan values General Growth at $15 a share and the Simon offer at $9 a share. "We know it is not automatic," Brookfield spokesman Denis Couture said, according to the Journal. "But, we look forward to working with them and through the court process." The Journal says under General Growth's plan to split itself in two to exit bankruptcy, the challenge will be for General Growth to assemble $7 billion in cash to pay its unsecured creditors. Simon and its partners have already amassed such a sum. The complete term sheet for the Brookfield plan is available at no charge at http://www.ggp.com/content/Docs/TermSheet_22410.pdf In a statement released late Wednesday, Simon said its all-cash bid was superior to the Brookfield plan because it provided $10 billion "of real value . . . as compared to a complex piece of financial engineering that is so highly conditional as to be illusory." The Journal notes that if General Growth gains approval from its creditors and the bankruptcy judge for the breakup, the larger of the resulting companies, which would retain the General Growth Properties name, would hold roughly 180 of the company's more than 200 malls. Brookfield has pledged to buy 30% of that company's shares at a price of $10 a share, for a total of roughly $2.5 billion. The larger company would carry more than $19 billion of mortgages on its malls. The smaller company, to be called General Growth Opportunities, would include many of General Growth's less-valuable malls -- including the South Street Seaport mall in New York and 13 malls the company previously intended to forfeit to its lenders -- as well as assets like its residential-development division and development rights. Brookfield would support the smaller company by providing half of the $250 million that company would raise by selling stock at $5 a share, people familiar with the matter said. Brookfield, in turn, would get a 7% stake in that company, which would carry $1.2 billion of mortgages on its properties. After an early surge on news of the breakup plan, General Growth's stock ended the day down eight cents at $12.89 in 4 p.m. trading on the over-the-counter Pink Sheets. Analysts said investors were unsure of the true value of the smaller company with riskier assets. The Brookfield plan values General Growth at about $4.5 billion in equity value, compared with $3 billion under the Simon offer. The Journal says Simon has been cutting deals with Blackstone Group LP and other deep-pocketed partners in case it decides to raise its bid. Simon also has lined up sovereign wealth funds to help finance its bid. According to the Journal, Simon on its own, has $4 billion of cash and $3.5 billion of borrowing capacity. Yet Simon ultimately might structure its bid as a joint venture in which it owns half and its partners own half, especially if it eventually must sweeten the bid, people familiar with the matter said. The Journal also reports Kevin Starke, an analyst with CRT Capital LLC, estimates that Simon can justify paying as much as $16 a share for General Growth, based on General Growth's estimated asset value and cash flow. The Journal says one advantage Simon has over Brookfield is that, as the largest U.S. mall owner, Simon can wring cost savings out of General Growth that Brookfield couldn't. In other words, Simon can recoup some of its outlay by cutting duplicated corporate jobs and perhaps combining other staffs. "If there's another bid, [Simon is] going to be forced to raise their bid," said Jim Sullivan, an analyst with Green Street Advisors Inc., prior to the Brookfield bid's unveiling, the Journal reports. "But they have the strategic advantage in being in the mall business, which allows them to bid more. They have a very strong balance sheet. But someone has to prompt them to bid more." Simon Property Offer Simon Property Group, Inc., on February 17 said it has made a written offer to acquire General Growth Properties in a fully financed transaction valued at more than $10 billion, including approximately $9 billion in cash. Simon's offer would provide a 100% cash recovery of par value plus accrued interest and dividends to all General Growth unsecured creditors, the holders of its trust preferred securities, the lenders under its credit facility, the holders of its Exchangeable Senior Notes and the holders of Rouse bonds, immediately upon the effectiveness of a definitive transaction agreement. This consideration to creditors totals approximately $7 billion. General Growth shareholders would receive more than $9.00 per General Growth share, consisting of $6.00 per share in cash and a distribution of General Growth's ownership interest in the Master Planned Community assets valued by General Growth at more than $3.00 per share. Lazard Ltd., J.P. Morgan and Morgan Stanley are acting as financial advisors to Simon and Wachtell, Lipton, Rosen & Katz is serving as legal advisor. About General Growth Properties Based in Chicago, Illinois, General Growth Properties, Inc. -- http://www.ggp.com/-- is the second-largest U.S. mall owner, having ownership interest in, or management responsibility for, more than 200 regional shopping malls in 44 states, as well as ownership in master planned community developments and commercial office buildings. The Company's portfolio totals roughly 200 million square feet of retail space and includes more than 24,000 retail stores nationwide. General Growth is a self- administered and self-managed real estate investment trust. The Company's common stock is trading in the pink sheets under the symbol GGWPQ. General Growth Properties Inc. and its affiliates filed for Chapter 11 on April 16, 2009 (Bankr. S.D.N.Y., Case No. 09-11977). Marcia L. Goldstein, Esq., Gary T. Holtzer, Esq., Adam P. Strochak, Esq., and Stephen A. Youngman, Esq., at Weil, Gotshal & Manges LLP, have been tapped as bankruptcy counsel. Kirkland & Ellis LLP is co-counsel. Kurtzman Carson Consultants LLC has been engaged as claims agent. The Company also hired AlixPartners LLP as financial advisor and Miller Buckfire Co. LLC, as investment bankers. The Debtors disclosed $29,557,330,000 in assets and $27,293,734,000 in debts as of December 31, 2008. Bankruptcy Creditors' Service, Inc., publishes General Growth Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Growth Properties Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GENERAL GROWTH: Simon Says $10-Bil. Bid Superior to GGP Plan ------------------------------------------------------------ Simon Property Group, Inc., issued this statement in response to the highly conditional recapitalization proposal announced by General Growth Properties, Inc.: "General Growth's proposed recapitalization amounts to a risky equity play on the backs of its unsecured creditors. While continuing to block the immediate and certain 100% cash recovery provided by Simon's offer, General Growth has preempted its own self-proclaimed 'process' in favor of a highly speculative and risky plan to attempt to raise $5.8 billion of new capital in today's uncertain markets -- including $3.3 billion of dilutive new equity, $1 billion in asset sales and $1.5 billion in new debt -- on top of the approximately $28 billion it already owes. Simon is providing $10 billion of real value -- $3 billion to shareholders as well as $7 billion to creditors -- as compared to a complex piece of financial engineering that is so highly conditional as to be illusory." Simon's offer is far superior to the General Growth proposal in many ways, including: -- $9 billion of cash upfront vs. the General Growth plan which offers only $2 billion in cash and the hope of additional cash down the road, subject to highly uncertain market conditions. -- 100% immediate and certain cash recovery to unsecured creditors vs. the General Growth plan which would likely result in unsecured creditors receiving most of any recovery at some point down the road in the form of equity in a highly leveraged, capital constrained entity. In addition, the inevitable sale of shares by creditors who receive stock would put downward pressure on the value of General Growth shares. -- Cash value to equity holders with no dilution vs. the General Growth plan which would result in significant dilution of General Growth shareholders -- who would be left with two speculative equity securities that are likely to underperform. -- Fully addresses claims of unsecured creditors vs. General Growth's proposal which turns the bankruptcy process on its head by favoring equity holders at the expense of creditors. -- No financing condition vs. the combination of the massive required capital raising and asset sales in the General Growth plan which amount to a financing condition for the majority of potential cash recovery for creditors. Potential for equity holders and certain creditors to elect SPG stock in lieu of cash, providing certainty and upside potential in an established equity security of an S&P 500 company that has historically outperformed. Stakeholders who elect SPG stock will be investors in an entity that has enhanced growth prospects through superior management, synergies and access to capital to realize value creation. About Simon Property Simon Property Group, Inc. is an S&P 500 company and the largest public U.S. real estate company. Simon is a fully integrated real estate company which operates from five retail real estate platforms: regional malls, Premium Outlet Centers(R), The Mills(R), community/lifestyle centers and international properties. It currently owns or has an interest in 382 properties comprising 261 million square feet of gross leasable area in North America, Europe and Asia. The Company is headquartered in Indianapolis, Indiana and employs more than 5,000 people worldwide. Simon Property Group, Inc. is publicly traded on the NYSE under the symbol SPG. About General Growth Based in Chicago, Illinois, General Growth Properties, Inc. -- http://www.ggp.com/-- is the second-largest U.S. mall owner, having ownership interest in, or management responsibility for, more than 200 regional shopping malls in 44 states, as well as ownership in master planned community developments and commercial office buildings. The Company's portfolio totals roughly 200 million square feet of retail space and includes more than 24,000 retail stores nationwide. General Growth is a self- administered and self-managed real estate investment trust. The Company's common stock is trading in the pink sheets under the symbol GGWPQ. General Growth Properties Inc. and its affiliates filed for Chapter 11 on April 16, 2009 (Bankr. S.D.N.Y., Case No. 09-11977). Marcia L. Goldstein, Esq., Gary T. Holtzer, Esq., Adam P. Strochak, Esq., and Stephen A. Youngman, Esq., at Weil, Gotshal & Manges LLP, have been tapped as bankruptcy counsel. Kirkland & Ellis LLP is co-counsel. Kurtzman Carson Consultants LLC has been engaged as claims agent. The Company also hired AlixPartners LLP as financial advisor and Miller Buckfire Co. LLC, as investment bankers. The Debtors disclosed $29,557,330,000 in assets and $27,293,734,000 in debts as of December 31, 2008. Bankruptcy Creditors' Service, Inc., publishes General Growth Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Growth Properties Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GENERAL GROWTH: Westfield Group Enters Bidding Picture ------------------------------------------------------ The Wall Street Journal's Kris Hudson and Jeffrey McCracken, citing people familiar with the matter, report that Australian mall owner Westfield Group has signed a nondisclosure agreement this week to begin discussions with General Growth Properties about a possible offer. Westfield owns 119 malls in the U.S., Australia and Britain. Sources told the Journal Westfield has $8 billion of borrowing capacity on hand, and is thus far acting alone. About General Growth Based in Chicago, Illinois, General Growth Properties, Inc. -- http://www.ggp.com/-- is the second-largest U.S. mall owner, having ownership interest in, or management responsibility for, more than 200 regional shopping malls in 44 states, as well as ownership in master planned community developments and commercial office buildings. The Company's portfolio totals roughly 200 million square feet of retail space and includes more than 24,000 retail stores nationwide. General Growth is a self- administered and self-managed real estate investment trust. The Company's common stock is trading in the pink sheets under the symbol GGWPQ. General Growth Properties Inc. and its affiliates filed for Chapter 11 on April 16, 2009 (Bankr. S.D.N.Y., Case No. 09-11977). Marcia L. Goldstein, Esq., Gary T. Holtzer, Esq., Adam P. Strochak, Esq., and Stephen A. Youngman, Esq., at Weil, Gotshal & Manges LLP, have been tapped as bankruptcy counsel. Kirkland & Ellis LLP is co-counsel. Kurtzman Carson Consultants LLC has been engaged as claims agent. The Company also hired AlixPartners LLP as financial advisor and Miller Buckfire Co. LLC, as investment bankers. The Debtors disclosed $29,557,330,000 in assets and $27,293,734,000 in debts as of December 31, 2008. Bankruptcy Creditors' Service, Inc., publishes General Growth Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Growth Properties Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GENERAL GROWTH: Fee Committee Gets OK for Hughes as Counsel ----------------------------------------------------------- Bankruptcy Judge Allan Gropper authorizes the Fee Committee in General Growth Properties' cases to retain Hughes Hubbard & Reed LLP as its counsel. Prior to entry of the order, Richard Stern, Esq., a member at Hughes Hubbard & Reed LLP, informed the Court that as of February 9, 2010, no objections were filed or served to the Fee Committee's application to retain Hughes Hubbard as counsel. Hughes Hubbard has not received any informal objections to the Application, he added. The Fee Committee consists of four members: Dan Pfeffer, representative of the Official Committee of Equity Security Holders and Chairperson of the Fee Committee; Gene Davis, representative of the Official Committee of Unsecured Creditors; Elizabeth G. Gasparini, Esq., representative of the United States Trustee for Region 2; and Ronald Gem, Esq., representative of the Debtors. As the Fee Committee's counsel, Hughes Hubbard will: (a) assist the Fee Committee in reviewing the professional employed and retained in the Debtors' Chapter 11 cases' fee applications, drafting reports and appearing at hearings on behalf of the Fee Committee; (b) assist the Fee Committee with regard to inquiries to and from the Retained Professionals; and (c) coordinate and attend meetings between the Fee Committee and the Retained Professionals. Richard Stern, Esq., a partner at Hughes Hubbard will lead the engagement and will be billed $775 per hour. The Debtors will also pay Hubbard Hughes according to its professionals' customary hourly rate with a discounted rate of 10% in effect on the date services are rendered. The current customary and discounted hourly rates are: Discounted Title Rate per Hour Rate per Hour ----- ------------- ------------- Partners $650 to $950 $585 to $855 Counsel $625 to $925 $587 to $832 Associates $355 to $695 $319 to $625 Legal Assistants $230 $207 The Debtors will also reimburse Hughes Hubbard for expenses incurred. Mr. Stern discloses that Hughes Hubbard represents M & T Bank in connection with the Debtors' Chapter 11 cases. However, Hughes Hubbard has not provided any service to M & T in connection with the Debtors' Chapter 11 cases since November 2009, he relates. He further says that M & T has consented to Hughes Hubbard's representation of the Fee Committee and granted Hughes Hubbard a waiver with respect to that representation. He further states that Hughes Hubbard represents Ernst & Young LLP, Deloitte Tax LLP, Deloitte & Touche LLP and PricewaterhouseCoopers LLP in matters unrelated to the Debtors' Chapter 11 cases and has obtained waivers from these parties with respect to its engagement by the Fee Committee. In this light, Mr. Stern maintains that Hughes Hubbard is a "disinterested person" as the term is defined under Section 101(14) of the Bankruptcy Code. About General Growth Properties Based in Chicago, Illinois, General Growth Properties, Inc. -- http://www.ggp.com/-- is the second-largest U.S. mall owner, having ownership interest in, or management responsibility for, more than 200 regional shopping malls in 44 states, as well as ownership in master planned community developments and commercial office buildings. The Company's portfolio totals roughly 200 million square feet of retail space and includes more than 24,000 retail stores nationwide. General Growth is a self- administered and self-managed real estate investment trust. The Company's common stock is trading in the pink sheets under the symbol GGWPQ. General Growth Properties Inc. and its affiliates filed for Chapter 11 on April 16, 2009 (Bankr. S.D.N.Y., Case No. 09-11977). Marcia L. Goldstein, Esq., Gary T. Holtzer, Esq., Adam P. Strochak, Esq., and Stephen A. Youngman, Esq., at Weil, Gotshal & Manges LLP, have been tapped as bankruptcy counsel. Kirkland & Ellis LLP is co-counsel. Kurtzman Carson Consultants LLC has been engaged as claims agent. The Company also hired AlixPartners LLP as financial advisor and Miller Buckfire Co. LLC, as investment bankers. The Debtors disclosed $29,557,330,000 in assets and $27,293,734,000 in debts as of December 31, 2008. Bankruptcy Creditors' Service, Inc., publishes General Growth Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Growth Properties Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GENERAL GROWTH: Luxor Capital Wants Trading of Covered Claims ------------------------------------------------------------- Luxor Capital Group, LP, as member of the Official Committee of Unsecured Creditors, asks the Court to approve specific information blocking procedure and permit trading of "Covered Claims," including securities as defined in Section 2(a)(1) of the Securities Act of 1993 and bank debt, against the Debtors. Luxor Capital filed this motion on behalf of Luxor Capital Partners, LP; Luxor Capital Partners Offshore, Ltd.; Luxor Spectrum, LLC; Luxor Capital Partners Offshore Master Fund, LP; Luxor Spectrum Offshore Master Fund, LP; and Luxor Wavefront, LP; and Luxor Spectrum Offshore, Ltd. Matthew J. Gold, Esq., at Kleinberg, Kaplan, Wolf & Cohen, P.C., in New York, tells the Court that Luxor will not violate its fiduciary duties as members of the Creditors Committee by trading in the Covered Claims during the Debtors' bankruptcy cases, provided that Luxor establishes and adheres to the information blocking policies and procedures that are approved by the United States Trustee for Region 2. In light with the existing information blocking procedures, Luxor agrees to establish and maintain these internal procedures: (1) Sharon F. Manewitz, principal at Manewitz, Weiker Associates LLC, as consultant to Luxor; and Norris Nissim, general counsel of Luxor are the representatives on behalf of the Creditors Committee in the Debtors' Chapter 11 cases. The Committee Personnel will execute a letter acknowledging that they may receive non-public Information and that they are aware of the information blocking procedures, which are in effect with respect to the Covered Claims and will follow these procedures and will immediately inform the Creditors Committee's counsel and the U.S. Trustee if these procedures are breached. (2) The Committee Personnel will not directly or indirectly share any non-public information generated by, received from or relating to Committee Activities or Committee membership with any other employees, representatives or agents of the Lenders. (3) The Committee Personnel will maintain all files containing information received in connection with or generated from Committee activities in secured cabinets and offices not generally accessible to other employees of the Lenders. (4) The Committee Personnel will not receive any information regarding the Lenders' trades in the Covered Claims in advance of the execution of the trades, but the Committee Personnel may submit trading reports showing the Lenders' purchases and sales and ownership of the Covered Claims in a biweekly basis. (5) So long as the Lenders are members of the Committee, they will disclose to the U.S. Trustee any decrease in dollar amount of the Covered Claims held by the Lenders, which results in the holdings being less than 25% of the dollar amount of the Covered Claims held by the Lenders as of their appointment to the Committee. Moreover, the Lenders will disclose to the Committee counsel and the U.S. Trustee every six months a declaration verifying continued compliance with the Procedures. The lenders will immediately disclose to the Committee counsel and the U.S. Trustee any material breaches of the Procedures. (6) If the Lenders resign from the Committee, they will continue to follow the Procedures until a plan has been confirmed in the Debtors' Chapter 11 cases or the Debtors' Chapter 11 cases have been converted or dismissed. Although members of the Creditors Committee owe fiduciary duties to the creditors of the Debtors' estates, Luxor's personnel also have fiduciary duties to maximize returns through trading securities and other financial interests, Mr. Gold points out. Thus, if Luxor is barred from trading the Covered Claims during the pendency of the Debtors' bankruptcy cases because of its duties to other creditors, it may risk the loss of a beneficial investment opportunity and may breach also its fiduciary duty to its shareholders, he points out. Moreover, if Luxor is compelled to resign from the Creditors Committee because of its inability to trade for the benefit of its institutions, its interests may be compromised by virtue of taking a less active role in the reorganization of the Debtors, he asserts. Against this backdrop, Luxor should not be forced to choose between serving on the Creditors Committee and risking the loss of beneficial investment opportunities, he says. In a related request, Luxor asks the Court to shorten the notice period with respect to Luxor's Motion to Permit Trading of Claims. Mr. Gold notes that in order for the Committee Personnel to fully participate on the Creditors Committee, it is necessary for an order on Luxor's Motion to Permit Trading of Claims to be entered immediately. About General Growth Properties Based in Chicago, Illinois, General Growth Properties, Inc. -- http://www.ggp.com/-- is the second-largest U.S. mall owner, having ownership interest in, or management responsibility for, more than 200 regional shopping malls in 44 states, as well as ownership in master planned community developments and commercial office buildings. The Company's portfolio totals roughly 200 million square feet of retail space and includes more than 24,000 retail stores nationwide. General Growth is a self- administered and self-managed real estate investment trust. The Company's common stock is trading in the pink sheets under the symbol GGWPQ. General Growth Properties Inc. and its affiliates filed for Chapter 11 on April 16, 2009 (Bankr. S.D.N.Y., Case No. 09-11977). Marcia L. Goldstein, Esq., Gary T. Holtzer, Esq., Adam P. Strochak, Esq., and Stephen A. Youngman, Esq., at Weil, Gotshal & Manges LLP, have been tapped as bankruptcy counsel. Kirkland & Ellis LLP is co-counsel. Kurtzman Carson Consultants LLC has been engaged as claims agent. The Company also hired AlixPartners LLP as financial advisor and Miller Buckfire Co. LLC, as investment bankers. The Debtors disclosed $29,557,330,000 in assets and $27,293,734,000 in debts as of December 31, 2008. Bankruptcy Creditors' Service, Inc., publishes General Growth Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Growth Properties Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GENERAL GROWTH: Morgan Stanley Has 5.1% Stake --------------------------------------------- In a Schedule 13-G filed with the Securities and Exchange Commission on February 12, 2010, Morgan Stanley reported that it beneficially owned 16,034,320 shares of General Growth Properties, Inc.'s common stock, representing 5.1% of the 313,832,656 GGP shares of common stock outstanding as of November 4, 2009. Morgan Stanley has sole power to vote 16,019,036 shares of GGP's common stock. Morgan Stanley also has sole power to dispose of 16,063,320 shares of GGP's common stock. Morgan Stanley has shared voting power of 31,433 shares of GGP's common stock. Moreover, Morgan Stanley Capital Services Inc. beneficially owns 16,000,020 shares of GGP's common stock, representing 5.1% of the outstanding shares of GGP's common stock. MSCSI has sole power to vote and dispose of 16,000,020 shares of GGP's common stock. About General Growth Properties Based in Chicago, Illinois, General Growth Properties, Inc. -- http://www.ggp.com/-- is the second-largest U.S. mall owner, having ownership interest in, or management responsibility for, more than 200 regional shopping malls in 44 states, as well as ownership in master planned community developments and commercial office buildings. The Company's portfolio totals roughly 200 million square feet of retail space and includes more than 24,000 retail stores nationwide. General Growth is a self- administered and self-managed real estate investment trust. The Company's common stock is trading in the pink sheets under the symbol GGWPQ. General Growth Properties Inc. and its affiliates filed for Chapter 11 on April 16, 2009 (Bankr. S.D.N.Y., Case No. 09-11977). Marcia L. Goldstein, Esq., Gary T. Holtzer, Esq., Adam P. Strochak, Esq., and Stephen A. Youngman, Esq., at Weil, Gotshal & Manges LLP, have been tapped as bankruptcy counsel. Kirkland & Ellis LLP is co-counsel. Kurtzman Carson Consultants LLC has been engaged as claims agent. The Company also hired AlixPartners LLP as financial advisor and Miller Buckfire Co. LLC, as investment bankers. The Debtors disclosed $29,557,330,000 in assets and $27,293,734,000 in debts as of December 31, 2008. Bankruptcy Creditors' Service, Inc., publishes General Growth Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Growth Properties Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GENERAL MOTORS: To Wind Down Hummer as Sichuan Deal Fails --------------------------------------------------------- Katie Merx at Bloomberg News reports that General Motors Co. said it will close Hummer, the maker of military-inspired sport-utility vehicles, after Sichuan Tengzhong Heavy Industrial Machinery Co. couldn't win Chinese approval to buy the unit. GM spokesman Nick Richards said winding down the brand will take several months. Some of the 3,000 people now employed at Hummer work on other vehicles, so GM doesn't know how many jobs will be lost, he said. According to Bloomberg, Mr. Richards said GM would consider "viable alternatives for all or part of the brand during wind down." Bloomberg relates Tengzhong said in a statement that it was "unable to obtain clearance of the transaction from the Chinese regulators within the proposed deal time frame." As reported in the Troubled Company Reporter on Feb. 12, 2010, 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. 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) GIBSON GUITAR: Moody's Junks Corporate Family Rating From 'B3' -------------------------------------------------------------- Moody's Investors Service downgraded Gibson Guitar Corp.'s corporate family rating to Caa1 from B3 due to the continuing delay in issuing its 2008 audited financial statements and increasing concerns regarding its corporate governance structure. At the same time, the probability of default rating was downgraded to Caa2 from Caa1 and the rating on the senior secured credit facility (term loan and revolver) was downgraded to Caa1 from B3. These actions conclude a review for possible downgrade initiated on October 27, 2009. The rating outlook is revised to developing. The downgrade reflects Moody's concern over Gibson's liquidity position as the company no longer has access to its revolving credit facility and, although we think it is unlikely, the banks have the ability to call the loan" said Kevin Cassidy, Senior Credit Officer at Moody's Investors Service. The downgrade also reflects Moody's concerns over Gibson's weak financial controls and weak corporate governance structure. The developing outlook reflects the near term uncertainties regarding the direction of the rating as the company's operating results are beginning to show signs of stabilization yet the risk of default is present until the company issues its audited financial statements. If the company issues its financial statements in the next month or two without significant changes to the unaudited information, the rating outlook will likely be stabilized. If the financial statements are not issued in the next couple of months, the rating outlook and/or rating could experience additional negative pressure. These ratings were downgraded: -- Corporate family rating to Caa1 from B3; -- Probability-of-default rating to Caa2 from Caa1; -- $50 million senior secured revolving credit facility due 2012 to Caa1 (LGD 3, 31%) from B3 (LGD 3, 32%); -- $100 million senior secured term loan B due 2014 to Caa1 (LGD 3, 31%) from B3 (LGD 3, 32%) The last rating action was on October 27, 2009. Headquartered in Nashville, Tennessee, Gibson Guitar Corp. primarily manufactures and markets acoustic and electric guitars under the Gibson and Epiphone brand names. The company also sells other stringed instruments and instruments related accessories such as amplifiers, speakers, and picks/straps. Revenues for the twelve months ended September 30, 2009 were approximately $280 million. GLOBAL CROSSING: Board, Panel Approve Pay-out of Annual Bonus ------------------------------------------------------------- The Board of Directors of Global Crossing Limited and the Compensation Committee of the Board approved a pay-out of 31.9% of annual bonus target under the Company's 2009 discretionary incentive compensation bonus program. All of the bonus payable under the 2009 bonus program will be payable in cash. The dollar value of the bonus pay-outs to executive officers named in the Summary Compensation Table of the Company's proxy statement for its 2009 Annual General Meeting of Shareholders are: 2009 Annual Bonus ----------------- John J. Legere $35,681 David R. Carey $88,068 Daniel J. Enright $82,888 John A. Kritzmacher $102,574 John B. McShane $81,852 About Global Crossing Based in Hamilton, Bermuda, Global Crossing Limited (NASDAQ: GLBC) and its subsidiaries are a global communications service provider, serving many of the world's largest corporations, government entities and many other telecommunications carriers, providing a full range of Internet Protocol and managed data and voice products and services. The Company's network delivers services to nearly 700 cities in more than 60 countries and six continents around the world. The Company operates as an integrated global services provider with operations in North America, Europe, Latin America and a portion of the Asia/Pacific region, providing services that support a migration path to a fully converged IP environment. Global Crossing reported a net loss of US$73 million for the three months ended September 30, 2009, from a net loss of US$72 million for the year ago period. Global Crossing reported a net loss of US$104 million for the nine months ended September 30, 2009, from a net loss of US$232 million for the year ago period. At September 30, 2009, Global Crossing had US$2,463,000,000 in total assets against US$2,796,000,000 in total liabilities, resulting in US$333,000,000 in stockholders' deficit. GRAHAM PACKAGING: Fitch Upgrades Issuer Default Rating to 'B' ------------------------------------------------------------- Fitch Ratings has upgraded the ratings for Graham Packaging Company, L.P.'s Issuer Default Rating and long-term debt ratings: Graham Packaging Company, L.P. and subsidiary GPC Capital Corp. I: -- IDR to 'B' from 'B-'; -- Senior secured revolving credit facility to 'B+/RR3' from 'B/RR3'. -- Senior unsecured notes to 'CCC/RR6' from 'CC/RR6'; -- Senior subordinated notes to 'CCC/RR6' from 'CC/RR6'; -- Senior secured term loan to 'B+/RR3' from 'B/RR3'. The Rating Outlook is Stable. Approximately $2.3 billion of debt is covered by the ratings. The ratings upgrade reflects the strengthening in Graham's credit profile, the stable operating results in a challenging environment, the improved maturity profile and the recent debt reduction of $114 million from IPO proceeds, although reduced from initial expectations. Pro forma leverage was approximately 5.1 times (x) at the end of 2009 compared with leverage of 5.9x in 2008. Fitch expects credit measures to further strengthen, with leverage decreasing to 5x or less in 2010. The company has also taken steps to improve its maturity profile. The recent $250 million debt offering extended maturities by five years to 2017 and the amendments to its credit agreement extended maturities on $1.2 billion of $1.8 billion term loan debt by 2 1/2 years to 2014 and a significant portion of its revolver by three years to 2013. Graham's ratings reflect the company's higher debt-to-EBITDA leverage, leading market shares across its product categories, long-term customer relationships, the on-site customer integration with many customer, and proprietary technology investments. Over the next several quarters, Graham will need to address refinancing options for approximately $590 million of term loan debt due in October 2011 and $135 million of revolving commitments due October 2010 from lenders that did not consent to extend the maturity. Graham's pro forma liquidity has increased to approximately $430 million at year-end 2009, which consisted of an undrawn $260 million revolving credit facility (the company had $10.7 million of outstanding letters of credit at Sept. 30, 2009) and $183 million of cash. Near-term maturities during the next year are relatively modest. Amortization payments for 2010 total $18 million. Fitch also expects Graham will likely require a payment associated with the excess cash flow sweep in 2010. Graham made a $42 million payment in 2009. Free cash flow for the last 12 months (as of Sept. 30, 2009) was $149 million. For 2010, with capital spending expected to be in a similar range as 2009, Graham should sustain FCF at comparative levels. The company remains in compliance with its credit agreement covenants and has considerable cushion under the senior secured debt-to-EBITDA covenant. Leverage for the last four quarters (as of Sept 30, 2009) was 3.5x compared to the maximum leverage of 5.5x. The covenant steps down modestly in 2011. As a result of the IPO, Graham entered into an income tax receivable agreement to the benefit of existing stockholder and unitholders. Under the agreement, Graham will pay existing holders 85% of the actual reduction in federal, state and local tax payments. Graham will retain the remainder of such tax benefits. Graham expects future payments under the agreement will likely total in the range of $200 million to $250 million. GRANT RUDOLPH: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Joint Debtors: Grant Rudolph Victoria L Vogel aka Victoria Lee Vogel 30 Catalpa Ave Mill Valley, CA 94941 Bankruptcy Case No.: 10-10586 Chapter 11 Petition Date: February 23, 2010 Court: United States Bankruptcy Court Northern District of California (Santa Rosa) Judge: Alan Jaroslovsky Debtors' Counsel: Michael C. Fallon, Esq. Law Offices of Michael C. Fallon 100 E St. #219 Santa Rosa, CA 95404 Tel: (707) 546-6770 Email: mcfallon@fallonlaw.net Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 According to the schedules, the Company has assets of $2,436,401 and total debts of $5,453,435. A full-text copy of the Debtors' petition, including a list of their 20 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/canb10-10586.pdf The petition was signed by the Joint Debtors. GREEKTOWN HOLDINGS: Court OKs $7 Mil. in Fees for Sept.-Nov. ------------------------------------------------------------ In separate filings, Bankruptcy Judge Shapero approved the interim fee applications of 12 bankruptcy professionals retained in the Debtors' cases for services rendered for the September to November 2009 quarter period after the professionals certified that no objections or responses were filed against their fee requests. The Approved Fees aggregate approximately $7,700,000 and the Approved Expenses aggregate approximately $830,000: Professional Fees Expenses ------------ ---------- ---------- Fine Consulting, Inc. $2,565,463 $218,231 Conway MacKenzie, Inc. 1,259,222 52,333 Schafer and Weiner PLLC 803,656 80,844 Honigman Miller Schwartz and Cohn LLP 613,771 8,822 XRoads Solutions Group LLC 605,202 5,855 Moelis & Company LLC 450,000 419,834 Charles S. Edelman LLC 450,000 10,375 Clark Hill PLC 440,790 25,855 Ernst & Young LLC 367,088 3,023 Jackier Gould P.C. 123,330 5,468 Signature Associates 40,000 0 Floyd E. Allen & Associates P.C. 975 0 Before the Fee Applications were approved, the Debtors informed Judge Shapero that certain of the Fee Applications were submitted to them for review seven days before being filed with the Court and that they have no objections to those reviewed applications. About Greektown Casino Based in Detroit, Michigan, Greektown Holdings, LLC, and its affiliates -- http://www.greektowncasino.com/-- operates world-class casino gaming facilities located in Detroit's historic Greektown district featuring more than 75,000 square feet of casino gaming space with more than 2,400 slot machines, over 70 tables games, a 12,500-square foot salon dedicated to high limit gaming and the largest live poker room in the metropolitan Detroit gaming market. Greektown Casino employs approximately 1,971 employees, and estimates that it attracts over 15,800 patrons each day, many of whom make regular visits to its casino complex and related properties. In 2007, Greektown Casino achieved a 25.6% market share of the metropolitan Detroit gaming market. Greektown Casino has also been rated as the "Best Casino in Michigan" and "Best Casino in Detroit" numerous times in annual readers' polls in Detroit's two largest newspapers. The Company and seven of its affiliates filed for Chapter 11 protection on May 29, 2008 (Bankr. E.D. Mich. Lead Case No. 08-53104). Daniel J. Weiner, Esq., Michael E. Baum, Esq., and Ryan D. Heilman, Esq., at Schafer and Weiner PLLC, represent the Debtors in their restructuring efforts. Judy B. Calton, Esq., at Honigman Miller Schwartz and Cohn LLP, represents the Debtors as their special counsel. The Debtors chose Conway MacKenzie & Dunleavy as their financial advisor, and Kurtzman Carson Consultants LLC as claims, noticing, and balloting agent. Clark Hill PLC serves as counsel to the Official Committee of Unsecured Creditors. Greektown Holdings listed assets and debts of $100 million to $500 million in its bankruptcy petition. Bankruptcy Creditors' Service, Inc., publishes Greektown Casino Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by Greektown Casino and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GREEKTOWN HOLDINGS: Enlarges Ernst & Young Work for 4th Time ------------------------------------------------------------ Greektown Holdings and its units presented to the Court their fourth application to extend the scope of Ernst & Young LLP's employment as their auditors and accountants to include: -- Fiscal Year 2010 compliance services related to Code of Federal Regulation, Title 31, Part 103; and -- the performance of certain restructuring tax services required in connection with the confirmed Noteholder Plan becoming effective. Subject to Court approval, the Debtors propose to pay Ernst & Young approximately $30,000 for the additional services. The Debtors' Supplemental Application is supported by the Office of the United States Trustee. About Greektown Casino Based in Detroit, Michigan, Greektown Holdings, LLC, and its affiliates -- http://www.greektowncasino.com/-- operates world-class casino gaming facilities located in Detroit's historic Greektown district featuring more than 75,000 square feet of casino gaming space with more than 2,400 slot machines, over 70 tables games, a 12,500-square foot salon dedicated to high limit gaming and the largest live poker room in the metropolitan Detroit gaming market. Greektown Casino employs approximately 1,971 employees, and estimates that it attracts over 15,800 patrons each day, many of whom make regular visits to its casino complex and related properties. In 2007, Greektown Casino achieved a 25.6% market share of the metropolitan Detroit gaming market. Greektown Casino has also been rated as the "Best Casino in Michigan" and "Best Casino in Detroit" numerous times in annual readers' polls in Detroit's two largest newspapers. The Company and seven of its affiliates filed for Chapter 11 protection on May 29, 2008 (Bankr. E.D. Mich. Lead Case No. 08-53104). Daniel J. Weiner, Esq., Michael E. Baum, Esq., and Ryan D. Heilman, Esq., at Schafer and Weiner PLLC, represent the Debtors in their restructuring efforts. Judy B. Calton, Esq., at Honigman Miller Schwartz and Cohn LLP, represents the Debtors as their special counsel. The Debtors chose Conway MacKenzie & Dunleavy as their financial advisor, and Kurtzman Carson Consultants LLC as claims, noticing, and balloting agent. Clark Hill PLC serves as counsel to the Official Committee of Unsecured Creditors. Greektown Holdings listed assets and debts of $100 million to $500 million in its bankruptcy petition. Bankruptcy Creditors' Service, Inc., publishes Greektown Casino Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by Greektown Casino and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GREEKTOWN HOLDINGS: Proposes WG-Michigan as Gaming Consultant ------------------------------------------------------------- Greektown Holdings Inc. and its units ask the Court for authority to hire WG-Michigan LLC as their gaming consultant upon the occurrence of the Effective Date of the confirmed Noteholders' Chapter 11 Plan for Greektown Casino, which is anticipated to occur on or before June 30, 2010. Daniel J. Weiner, Esq., at Schafer and Weiner PLLC, in Bloomfield Hills, Michigan, notes that the Debtors previously engaged Isle of Capri Michigan LLC to provide temporary consulting services after the expiration of the Debtors' engagement of The Fine Point Group on December 31, 2009. The Debtors, however, withdrew the Isle of Capri application after certain parties filed objections to it. After discussions with the Noteholder Plan Proponents, the Debtors decided to engage WG-Michigan, a wholly owned subsidiary of Warner Gaming, according to Mr. Weiner. The Debtors aver that WG-Michigan has experience operating land-based and tribal casinos as well as navigating gaming requirements in five jurisdictions. As part of its engagement, WG-Michigan will provide a comprehensive review of the Debtors' operations, marketing, proposed capital projects, and obtain patron feedback. Mr. Weiner asserts that the services WG-Michigan will provide the Debtors are necessary to enable the Debtors to maximize the value of their estates. He assures the Court that WG-Michigan's services will not duplicate the services that other professionals provide to the Debtors in the Chapter 11 cases. The Debtors or WG-Michigan may terminate the Consulting Agreement with or without cause on 10 days' notice to the other party. In any event, the Consulting Agreement will terminate on the earlier of (i) a sale of substantially all of the Debtors' assets, (ii) the effective date of the Noteholders Plan, or (iii) September 1, 2010. The Debtors will pay WG-Michigan a fixed fee amounting to $200,000 per calendar month for the duration of the engagement for the firm's services. The Fixed Fee will be paid monthly in advance; provided, however, that it will be pro-rated for any partial months. In addition, the Debtors will reimburse WG-Michigan for reasonable and necessary third party expenses incurred in connection with the firm's services. Should the Debtors terminate the Consulting Agreement for any reason other than WG-Michigan's material breach of the Agreement, the Debtors will pay: -- any earned but unpaid fees; -- reimbursable expenses incurred prior to the date of the termination; and -- an amount equal to the fees that would have been payable to WG-Michigan for the lesser of (i) the termination date through September 1, 2010, and (b) three months if the termination date is prior to the six month anniversary of the Consulting Agreement's effective date. Salvatore Semola, the president of WG-Michigan, assures that Court that to the best of his knowledge and information, his Firm (i) does not have any connection with the Debtors, their affiliates, the Bankruptcy Court, the United States Trustee, or the Debtors' attorneys; and (b) does not represent or hold any interest adverse to the Debtors or to their estates. About Greektown Casino Based in Detroit, Michigan, Greektown Holdings, LLC, and its affiliates -- http://www.greektowncasino.com/-- operates world-class casino gaming facilities located in Detroit's historic Greektown district featuring more than 75,000 square feet of casino gaming space with more than 2,400 slot machines, over 70 tables games, a 12,500-square foot salon dedicated to high limit gaming and the largest live poker room in the metropolitan Detroit gaming market. Greektown Casino employs approximately 1,971 employees, and estimates that it attracts over 15,800 patrons each day, many of whom make regular visits to its casino complex and related properties. In 2007, Greektown Casino achieved a 25.6% market share of the metropolitan Detroit gaming market. Greektown Casino has also been rated as the "Best Casino in Michigan" and "Best Casino in Detroit" numerous times in annual readers' polls in Detroit's two largest newspapers. The Company and seven of its affiliates filed for Chapter 11 protection on May 29, 2008 (Bankr. E.D. Mich. Lead Case No. 08-53104). Daniel J. Weiner, Esq., Michael E. Baum, Esq., and Ryan D. Heilman, Esq., at Schafer and Weiner PLLC, represent the Debtors in their restructuring efforts. Judy B. Calton, Esq., at Honigman Miller Schwartz and Cohn LLP, represents the Debtors as their special counsel. The Debtors chose Conway MacKenzie & Dunleavy as their financial advisor, and Kurtzman Carson Consultants LLC as claims, noticing, and balloting agent. Clark Hill PLC serves as counsel to the Official Committee of Unsecured Creditors. Greektown Holdings listed assets and debts of $100 million to $500 million in its bankruptcy petition. Bankruptcy Creditors' Service, Inc., publishes Greektown Casino Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by Greektown Casino and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) HAIGHTS CROSS: Court Confirms Prepackaged Reorganization Plan ------------------------------------------------------------- Haights Cross Communications, Inc.'s prepackaged plan of reorganization has been confirmed by the U.S. Bankruptcy Court for the District of Delaware, only 44 days after the Plan and related petitions were filed. Upon emergence, expected in mid-March, the Company's debt obligations will be reduced by approximately $200 million (to approximately $180 million in the aggregate). "We could not have achieved our recapitalization in such a short period of time without the loyalty of our customers and vendors, the professionalism and dedication of our employees, and the commitment and support of our creditor groups," said Paul J. Crecca, HCC's President and Chief Executive Officer. The Company filed its voluntary Chapter 11 petitions and Plan in the U.S. Bankruptcy Court for the District of Delaware. A form of the Plan and the related Disclosure Statement, which provide a substantial description of the restructuring, may be accessed through http://www.haightscross.com/. Effectiveness of Plan The effectiveness of the Company's Plan is subject to numerous closing conditions. In the event that the Company is not able to successfully complete the restructuring contemplated by the Plan, it intends to explore all other restructuring alternatives available to it at that time. The Company cannot make assurances that any alternative restructuring arrangement or plan could be accomplished. About Haights Cross Haights Cross Communications, Inc., develops and publishes products for the kindergarten through grade 12 education and public library markets. Their products include state-specific test preparation materials, skills assessment and intervention books and unabridged audiobooks, and are sold primarily to schools and public libraries. The Company filed for Chapter 11 bankruptcy protection on January 11, 2010 (Bankr. D. Del. Case No. 10-10062). The Company's affiliates -- Haights Cross Operating Company; Triumph Learning, LLC; Recorded Books, LLC; and SNEP, LLC -- also filed bankruptcy petitions. Steven D. Pohl, Esq., and Tally Wiener, Esq., at Brown Rudnick, assist the Debtors in their restructuring efforts. Daniel J. DeFranceschi, Esq., Paul N. Heath, Esq., and Christopher M. Samis, Esq., at Richards, Layton & Finger, P.A., are the co-counsel for the Debtors. Houlihan Lokey is the Debtors' financial advisor. The Company listed $232,388,000 in assets and $432,741,000 in liabilities as of June 30, 2009. HEALTHSOUTH CORP: FMR, Fidelity Hold 1.399% of Common Stock ----------------------------------------------------------- FMR LLC and Edward C. Johnson 3d disclosed that they may be deemed to beneficially own 1,314,642 shares or roughly 1.399% of the common stock of HealthSouth Corporation. Fidelity Management & Research Company, a wholly owned subsidiary of FMR LLC, is the beneficial owner of 81,962 shares or 0.087% of HealthSouth common stock as a result of acting as investment adviser to various investment companies registered under Section 8 of the Investment Company Act of 1940. The number of HealthSouth shares owned by the investment companies at December 31, 2009, included 80,262 shares of Common Stock resulting from the assumed conversion of 2,448 shares of HEALTHSOUTH 6.5% PC PERP SER A (32.7869 shares of Common Stock for each share of Convertible Preferred Stock). Edward C. Johnson 3d and FMR LLC, through its control of Fidelity, and the funds each has sole power to dispose of the 81,962 shares owned by the Funds. Birmingham, Alabama, HealthSouth Corporation (NYSE: HLS) -- http://www.healthsouth.com/-- is the nation's largest provider of inpatient rehabilitative healthcare services. Operating in 26 states across the country and in Puerto Rico, HealthSouth serves patients through its network of inpatient rehabilitation hospitals, long-term acute care hospitals, outpatient rehabilitation satellites, and home health agencies. As of December 31, 2009, the Company had total assets of $1.681 billion against total liabilities of $2.191 billion and convertible perpetual preferred stock of $387.4 million. HEALTHSOUTH CORP: Morgan Stanley Holds 7.2% of Common Stock ----------------------------------------------------------- Morgan Stanley disclosed that as of December 31, 2009, it may be deemed to beneficially own 6,774,456 shares or roughly 7.2% of the common stock of HealthSouth Corporation. Birmingham, Alabama, HealthSouth Corporation (NYSE: HLS) -- http://www.healthsouth.com/-- is the nation's largest provider of inpatient rehabilitative healthcare services. Operating in 26 states across the country and in Puerto Rico, HealthSouth serves patients through its network of inpatient rehabilitation hospitals, long-term acute care hospitals, outpatient rehabilitation satellites, and home health agencies. As of December 31, 2009, the Company had total assets of $1.681 billion against total liabilities of $2.191 billion and convertible perpetual preferred stock of $387.4 million. HEALTHSOUTH CORP: Osterweis Holds 9.15% of Series A Preferreds -------------------------------------------------------------- Osterweis Capital Management, Inc.; Osterweis Capital Management, LLC; and John S. Osterweis disclosed that as of December 31, 2009, they may be deemed to beneficially own in the aggregate 36,615 shares or roughly 9.15% of HealthSouth Corporation's 6.50% Series A Convertible Perpetual Preferred Stock. Birmingham, Alabama, HealthSouth Corporation (NYSE: HLS) -- http://www.healthsouth.com/-- is the nation's largest provider of inpatient rehabilitative healthcare services. Operating in 26 states across the country and in Puerto Rico, HealthSouth serves patients through its network of inpatient rehabilitation hospitals, long-term acute care hospitals, outpatient rehabilitation satellites, and home health agencies. As of December 31, 2009, the Company had total assets of $1.681 billion against total liabilities of $2.191 billion and convertible perpetual preferred stock of $387.4 million. HEALTHSOUTH CORP: Reports $128.8 Million Net Income for 2009 ------------------------------------------------------------ HealthSouth Corporation reported declining net income of $128.8 million for the year ended December 31, 2009, from net income of $281.8 million for 2008 and net income of $718.7 million for 2007. Net operating revenues were $1.911 billion for 2009, compared to $1.829 billion for 2008 and $1.723 billion for 2007. For the fourth quarter of 2009, the Company reported net income of $46.9 million from net income of $190.2 million. Net operating revenues were $486.2 million from $460.8 million for 2008. As of December 31, 2009, the Company had total assets of $1.681 billion against total liabilities of $2.191 billion and convertible perpetual preferred stock of $387.4 million. "The fourth quarter was a strong conclusion to an excellent year for HealthSouth," said Jay Grinney, President and Chief Executive Officer of HealthSouth. "The Company continued to execute its business plan and performed well across all key metrics: we discharged 4.6% more patients; provided this care on a cost- effective basis; and strengthened our balance sheet repaying approximately $34 million of debt. For the year, we discharged 5.4% more patients and reduced debt by approximately $151 million through the continued generation of strong cash flows. We believe these solid results provide the necessary momentum for another successful year in 2010." As of December 31, 2009, total debt outstanding approximated $1.7 billion, with no amounts drawn on the Company's $400 million revolving credit facility. During 2009, the Company reduced its total debt outstanding by $151 million and increased its cash and cash equivalents by $49 million. Cash flows provided by operating activities were $406.1 million for 2009 compared to $227.2 million for 2008. Cash flows provided by operating activities in 2009 included $73.8 million in net cash proceeds related to the Company's settlement with UBS and the receipt of $63.7 million in income tax refunds associated with amended tax returns from previous periods. Due to the Company's debt reduction efforts and its higher Adjusted Consolidated EBITDA, the Company's leverage ratio was 4.3x as of December 31, 2009 compared to 5.3x as of December 31, 2008. The Company remains confident it can achieve its leverage ratio goal of 3.5x to 4.0x by the end of 2011. 2010 Guidance Adjusted income from continuing operations for 2010 is expected to be in the range of $1.60 to $1.70 per diluted share, compared to $1.45 per share in 2009. Adjusted income from continuing operations excludes any gain or loss associated with the fair value adjustments to the Company's interest rate swaps that are not designated as hedges, certain professional fees (related primarily to the Company's derivative litigation), and other non- recurring items. Adjusted Consolidated EBITDA for 2010 is expected to be in the range of $397 million to $407 million, compared to $383 million for 2009. The Company's credit agreement allows unusual noncash items or nonrecurring charges to be added to net income to arrive at Adjusted Consolidated EBITDA. A full-text copy of the Company's earnings release is available at no charge at http://ResearchArchives.com/t/s?54bb A full-text copy of the Company's annual report on Form 10-K is available at no charge at http://ResearchArchives.com/t/s?54bc About HealthSouth Birmingham, Alabama, HealthSouth Corporation (NYSE: HLS) -- http://www.healthsouth.com/-- is the nation's largest provider of inpatient rehabilitative healthcare services. Operating in 26 states across the country and in Puerto Rico, HealthSouth serves patients through its network of inpatient rehabilitation hospitals, long-term acute care hospitals, outpatient rehabilitation satellites, and home health agencies. HOME INTERIORS: Plan Promises Pro Rata Share for Unsecureds ----------------------------------------------------------- Dennis Faulkner, Chapter 11 trustee for Home Interiors & Gifts, Inc., et al., asks the U.S. Bankruptcy Court for the Northern District of Texas to approve the proposed disclosure statement with respect to the Chapter 11 Plan of Liquidation. The Chapter 11 trustee 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 provides for the consolidation of the Debtors' estates and for the transfer of all remaining assets, well as the causes of actions to the creditors trust. General unsecured creditors will share pro rata in any recoveries from Chapter 5 causes of action (avoidance actions.) When distributions to general unsecured creditors in Class 2 reach $3.5 million, the general unsecured creditors will then share pro rata in the pool of all unsecured claims including the deficiency claim of the Group 2 lenders (the non-Highland lenders.) The rights of equity interest holders will be extinguished on the effective date. On the effective date, the trustee, the creditor trust trustee, and the members of the creditor trust oversight committee will establish the Home Interiors Creditors Trust. Under the Plan, a substantive consolidation of the estates will allow ratable distribution to all creditors of the combined estates. A full-text copy of the Disclosure Statement is available for free at http://bankrupt.com/misc/HomeInteriors_DS.pdf A full-text copy of the Plan of Liquidation is available for free at http://bankrupt.com/misc/HomeInteriors_Plan.pdf About Home Interiors & Gifts, Inc. Headquartered in Carrollton, Texas, Home Interiors & Gifts, Inc. -- http://www.homeinteriors.com/-- manufactures, imports and distributes indoor and outdoor home decorative accessories. It was founded by Mary Crowley in 1957. Through its affiliates, the Company has a significant presence in Mexico, Puerto Rico, and Canada. Annual revenue in 2007 reached $300 million. When Mary Crowley, died in 1986, her son, Don Carter continued the business operation nearly debt-free. In a leveraged transaction in 1998, private equity firm of Hicks, Muse, Tate, and Furst acquired 66% of the parent company, which resulted in the imposition of more than $500 million in debt on the Debtors. In the face of decreased sales and increased debt load, bondholders canceled their debts in February 2006 in exchange for receiving most of the outstanding equity of the Debtors. About 40% of the goods the Debtors sell are now acquired from manufacturers in China. In the last decade, sales volume in the U.S. has waned, but the Debtors reported that sales in Mexico and Puerto Rico significantly increased. The Company and six of its affiliates filed for Chapter 11 protection on April 29, 2008 (Bankr. N.D. Tex. Lead Case No. 08-31961). Andrew Jillson, Esq., Cameron Kinvig, Esq., Robert McCormick, Esq., and Mike Massad, Esq., at Hunton & Williams, LLP, represent the Debtors as counsel. Richard A. Lindenmuth at Boulder International LLC, is designated as CRO. The U.S. Trustee for Region 6 has appointed seven creditors to serve on an official committee of unsecured creditors. Munsch Hardt Kopf & Harr, PC, represents the Committee in these cases. Kurtzman Carson Consultants LLC is the official noticing and balloting agent. In its schedules, Home Interiors & Gifts, Inc., listed $88,653,051 in total assets, and $510,451,698 in total liabilities. As reported in the Troubled Company Reporter on December 11, 2008, the Court approved the appointment by the United States Trustee of Dennis Faulkner as Chapter 11 trustee in the Debtors' bankruptcy cases. Dennis Faulkner, of the accounting firm of Lain, Faulkner & Co., P.C., is a member of the American Bankruptcy Institute and the Association of Insolvency and Restructuring Advisors. Lain, Faulkner & Co., P.C., is an accounting firm which specializes in bankruptcy, litigation and business advisory services. INTELSAT SA: Expects Up to $900 Million in Total CapEx This Year ---------------------------------------------------------------- Intelsat S.A. recently unveiled annual capital expenditure guidance for the three fiscal years beginning January 1, 2010, and ending December 31, 2012. Intelsat expects 2010 total capital expenditures to range from $825 million to $900 million, including some capital expenditures that were expected to be incurred in 2009 but that now are expected to be incurred in 2010. Expected annual capital expenditure ranges for fiscal years 2011 and 2012 are $800 million to $875 million, and $450 million to $525 million, respectively. Intelsat has nine satellites in development, including Intelsat New Dawn, that are expected to be launched during the Guidance Period. In addition to these programs, Intelsat expects to procure two additional replacement satellites during this period. By the conclusion of the Guidance Period, Intelsat does not expect its total station-kept transponder count to change significantly from current levels. Intelsat's guidance excludes capital expenditures associated with the Intelsat New Dawn satellite being procured and launched by our New Dawn joint venture. About Intelsat Headquartered in Pembroke, Bermuda, Intelsat, Ltd. -- http://www.intelsat.com/-- provides fixed satellite services worldwide. Intelsat provides service on a global fleet of 51 satellites and seven owned teleports and terrestrial facilities. Intelsat supplies video, data and voice connectivity in roughly 200 countries and territories for roughly 1,800 customers, many of which Intelsat has had relationships with for over 30 years. Intelsat has one of the largest, most flexible and one of the most reliable satellite fleets in the world, which covers over 99% of the world's population. As of September 30, 2009, Intelsat had US$17,052,043,000 in total assets against total current liabilities of US$659,614,000, long- term debt, net of current portion of US$15,087,524,000, deferred satellite performance incentives, net of current portion of US$115,607,000, deferred revenue, net of current portion of US$226,198,000, deferred income taxes of US$531,913,000, accrued retirement benefits of US$238,385,000, other long-term liabilities of US$343,554,000 and noncontrolling interest of US$7,058,000, resulting in stockholders' deficit of US$157,810,000. JAMES EDWARD: Section 341(a) Meeting Scheduled for March 17 ----------------------------------------------------------- The U.S. Trustee for Region 19 will convene a meeting of creditors in James Edward Gilbert's Chapter 11 case on March 17, 2010, at 10:00 a.m. The meeting will be held at U.S. Custom House, 721 19th Street, Room 104, Denver, CO 80202. 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. Edwards, Colorado-based James Edward Gilbert and Joette Elizabeth Gilbert filed for Chapter 11 bankruptcy protection on February 16, 2010 (Bankr. D. Colo. Case No. 10-12806). Robert Padjen, Esq., who has an office in Englewood, Colorado, assists the Debtors in their restructuring efforts. The Debtors estimated their assets at $10,000,001 to $50,000,000, and debts at $1,000,001 to $10,000,000. JAMES ROBERT RIDLEY: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------------ Joint Debtors: James Robert Ridley, Jr. aka Jim Ridley Constance Creel Ridley aka Connie Ridley aka Connie Creel 1200 Hilbrook Road Dothan, AL 36303 Bankruptcy Case No.: 10-10306 Chapter 11 Petition Date: February 23, 2010 Court: United States Bankruptcy Court Middle District of Alabama (Dothan) Judge: William R. Sawyer Debtors' Counsel: Cameron-RRL A. Metcalf, Esq. Espy, Metcalf & Espy, P.C. P.O. Drawer 6504 Dothan, AL 36302 Tel: (334) 793-6288 Email: cam@espymetcalf.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 According to the schedules, the Company has assets of $1,241,545 and total debts of $1,597,855. A full-text copy of the Debtors' petition, including a list of their 20 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/almb10-10306.pdf The petition was signed by the Joint Debtors. JAPAN AIRLINES: Applies Antitrust Immunity With American Air ------------------------------------------------------------ American Airlines and Japan Airlines (JAL) filed an application with the U.S. Department of Transportation (DOT) for antitrust immunity to forge a closer relationship and implement a Joint Business Agreement (JBA) governing the operation of their flights between North America and Asia. The airlines also will notify the Ministry of Land, Infrastructure, Transport and Tourism in Japan of the transaction. "An immunized JBA will benefit the public, offer new competition in the fast-growing Asian aviation marketplace and strengthen the relationship between American and Japan Airlines, which will support JAL's successful restructuring," said Gerard Arpey, American's Chairman and CEO. "It will improve customer choice by giving the oneworld(R) Alliance, of which American and JAL are key members, strong hub operations at Tokyo, thus allowing more vibrant competition with other global alliances in northeast Asia and beyond." "With immunity to enter a JBA, Japan Airlines and American Airlines will be able to cooperate more tightly in raising the quality of our services and thus encourage healthy competition in this promising region for the industry," said JAL Group Chief Operating Officer and President Masaru Onishi. "Furthermore, not only will both carriers be able to improve operational efficiency but most importantly, our valued customers will receive greater benefits and convenience which we hope will place us in a position to always be the airlines of their choice." Antitrust immunity between American and JAL is made possible by the Open Skies accord reached by the United States and Japan in December 2009. When that agreement becomes effective, it will eliminate the restraints on competition. More Consumer Benefits, Choices and Travel Options Under an immunized JBA, American and JAL will cooperate commercially on flights while continuing to operate as separate legal entities. They will coordinate fares, services and schedules in order to attract new customers and boost revenues. By more closely integrating their networks, the airlines will be able to improve efficiency, find opportunities to lower costs and have greater ability to invest in products, services and fleets. By working together to provide links for connecting passengers, the airlines can expand customer choice by offering new routes and supporting existing routes that would not be economically viable for the airlines individually. American and JAL expect more opportunities to expand their codeshare arrangements on flights within and beyond Japan and the U.S. and to create new competition in the trans-Pacific marketplace. Consumers also will continue to receive reciprocal frequent flyer benefits, and eligible customers will continue to have access to the airport lounges of both airlines. Employees and other stakeholders are expected to benefit from the airlines' improved competitive position and financial stability. The JBA will be "metal neutral," meaning American and JAL will benefit from a customer's ticket purchase regardless of which one carries the passenger, as the airlines will share revenue on all JBA flights. The revenue growth resulting from the JBA will provide both airlines with substantial support towards improving profitability. Enhanced Trans-Pacific Competition The closer cooperation between oneworld Alliance members American and JAL will improve network competition with the other alliances. Through the JBA, the two airlines will offer a fully-integrated network between trans-Pacific gateway airports, ensuring all customers a third robust global airline alliance from which to choose, and more options for time-sensitive business travelers. About American Airlines American Airlines, American Eagle and AmericanConnection(R) serve 250 cities in 40 countries with, on average, more than 3,400 daily flights. The combined network fleet numbers more than 900 aircraft. American's award-winning Web site, AA.com(R), provides users with easy access to check and book fares, plus personalized news, information and travel offers. American Airlines is a founding member of the oneworld(R) Alliance, which brings together some of the best and biggest names in the airline business, enabling them to offer their customers more services and benefits than any airline can provide on its own. Together, its members serve nearly 700 destinations in more than 130 countries and territories. American Airlines, Inc. and American Eagle Airlines, Inc. are subsidiaries of AMR Corporation (NYSE: AMR). 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: M. Ventress Wants Lift Stay to Continue Appeal -------------------------------------------------------------- Martin Ventress asks the U.S. Bankruptcy Court for the Southern District of New York to lift the automatic stay in order to continue an appeal pending in the United States Court of Appeals for the Ninth Circuit. Mr. Ventress asks that the automatic stay imposed by Section 362 of the Bankruptcy Code be lifted to permit the Ninth Circuit Court of Appeals to enter judgment regarding certain appellate litigation currently pending between the Japan Airlines Corporation, Japan Airlines International Co., Ltd., and JAL Capital Co., Ltd., and Mr. Ventress. Mr. Ventress is signed an employment contract with Hawaii Aviation Contract Services, Inc., to fly airplanes for JALways Co., Ltd., not Japan Airlines Corporation. Mr. Ventress submitted Safety Reports describing violations against JAL and JALways for instructing pilot, Jeff Bicknell, to fly passenger flights despite being extremely ill. Mr. Ventress, a Flight Engineer, warned the Japanese Captain of Bicknell's illness prior to flights they operated for both JAL and JALways. Bicknell had been flying with a cancerous tumor lodged in the base of his brain and nearly crashed a commercial DC-10 aircraft with passengers and crew, Mr. Ventress relates. Mr. Ventress says he was retaliated against after submitting Safety Reports of Mr. Bicknell's health, to JAL, JALways, HACS and U.S. Federal Agencies that included the FAA. Mr. Ventress was fired and named JAL, JALways, and HACS in a wrongful termination lawsuit in the U. S. District Court of Central California in December 2002 (Case No. 02-09762NM - SHX). In July 2003, the case was transferred to the USDC of Hawaii (Case No. 03-00451 - SPK/LEK). The case was dismissed on the grounds that a 1953 Friendship, Commerce and Navigation Treaty allowed Japanese companies an absolute right to employ employees covered by the FCN Treaty without regard for U.S. Federal employment laws. Mr. Ventress appealed in the 9th Circuit which reversed USDC ruling for JAL and JALways and remanded the case back to Hawaii for further proceedings that included instructions to amend the complaint from California State Law to Hawaii State Law. The USDC denied the Motion to amend the complaint; but instead granted JAL and JALways summary judgment to dismiss the case, this time under the Federal Airline Deregulation Act. In April 2008, Mr. Ventress filed another appeal in the 9th Circuit Court, which is currently pending. Mr. Ventress' employment contract with HACS incorporated an arbitration provision that was not negotiable. The arbitration is being appealed as scandalous at best, because it was procured by fraud; and too, awaits 9th Circuit determination. Mr. Ventress requests relief from the automatic stay so that it may proceed by whatever means are appropriate and consistent with the 9th Circuit schedule to have those issues and claims determined. Mr. Ventress asserts that the Debtor's bankruptcy petition should not stop the long overdue decision by the 9th Circuit in a lawsuit that involves multiple parties and the Bankruptcy Court should be so inclined as to allow the lawsuit to go forward, considering JALways and HACS, currently in business, have not filed a petition for bankruptcy, neither named as Debtors in the Chapter 15 case. Foreign Representative Objects Eiji Katayama, the foreign representative of the Debtors, objects to the Lift Stay Motion. The Foreign Representative says he intends to resolve the Lift Stay Motion amicably with Mr. Ventress and has been in contact with him in the days subsequent to receipt of the Lift Stay Motion to attempt to reach a mutual resolution. However, out of an abundance of caution, the Foreign Representative files an Objection to preserve any rights it may have with respect to the Lift Stay Motion. 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: US Court Recognizes Tokyo Case as Main Proceeding ----------------------------------------------------------------- Judge James M. Peck of the United States Bankruptcy Court for the Southern District of New York issued an order on February 17, 2010, recognizing the proceedings of Japan Airlines Corporation, Japan Airlines International Co., Ltd., and JAL Capital Co., Ltd., in the Tokyo District Court as foreign main proceedings pursuant to Sections 1517(a) and 1517(b)(1) of the U.S. Bankruptcy Code. Judge Peck held that all provisions of Section 1520 of the U.S. Bankruptcy Code apply in the Chapter 15 cases, including the stay under Section 362 and the provisions of Section 363 throughout the duration of the Chapter 15 cases or until otherwise ordered by the U.S. Court. Pursuant to Section 1520 of the U.S. Bankruptcy Code, the Japan Proceeding will be given its full force and effect, and, among other things: (a) the protections of Sections 361 and 362 of the U.S. Bankruptcy Code apply with respect to the Debtors and the property of the Debtors in the territorial jurisdiction of the United States; (b) all persons and entities are enjoined from seizing, attaching or enforcing or executing liens or judgments against the Debtors' property in the United States or from transferring, encumbering or otherwise disposing of or interfering with the Debtors' assets or agreements in the United States without the express consent of the Foreign Representative; and (c) all persons and entities are enjoined from commencing or continuing, including the issuance or employment of process of, any judicial, administrative or any other action or proceeding involving or against the Debtors or their assets or proceeds thereof that are located in the United States, or to recover a claim or enforce any judicial, quasi-judicial, regulatory, administrative or other judgment, assessment, order, lien or arbitration award against the Debtors or their assets or proceeds thereof that are located in the United States. Notwithstanding anything to the contrary to the provisions of Section 1520, any party may move the U.S. Court for relief from those restrictions for good cause shown. The U.S. Court recognized Eiji Katayama, Esq., at Abe, Ikubo & Katayama, as "foreign representative" as defined in Section 101(24) of the Bankruptcy Code. The Debtors will be entitled to the full protections and rights enumerated under Section 1521(a)(4) and (5) of the Bankruptcy Code. The Foreign Representative: (a) is entrusted with the administration or realization of all or part of the Debtors' assets located in the United States; and (b) has the right and power to examine witnesses, take evidence or deliver information concerning the Debtors' assets, affairs, rights, obligations, or liabilities. The Foreign Representative is established as the representative of the Debtors with full authority to administer the Debtors' assets and affairs in the United States, including making payments on account of the Debtors' prepetition and postpetition obligations. The banks and financial institutions with which the Debtors maintain bank accounts or on which checks are drawn or electronic payment requests made in payment of prepetition or postpetition obligations are authorized and directed to continue to service and administer the Debtors' bank accounts without interruption and in the ordinary course and to receive, process, honor and pay any checks, drafts, wires and automatic clearing house transfers issued, whether before or after the Petition Date and drawn on the Debtors' bank accounts by respective holders and makers thereof and at the direction of the Foreign Representative or the Debtors, as the case may be. The Foreign Representative having confirmed that it has elected in accordance with applicable Japanese insolvency law to assume, accept, validate and perform the Debtors' obligations under the Debtors' interline agreements and clearinghouse agreements and billing and settlement agreements administered by the International Air Transport Association (IATA), the IATA Clearing House, Airlines Clearing House, Inc. and Universal Air Travel Plan, Inc. -- Industry Agreements -- the Debtors and the Foreign Representative, as the case may be, are authorized to perform in accordance with the Industry Agreements, including (a) to honor and pay outstanding prepetition and postpetition claims arising in the ordinary course of business under the Industry Agreements, and (b) to process customary payments and transfers and to honor customary transfer requests made by Debtors and other participants pursuant to the Industry Agreements. Notwithstanding anything, the provisions of Sections 362 and 1520 of the U.S. Bankruptcy Code are modified, nunc pro tunc to January 19, 2010, solely to the extent necessary to permit performance of, and under, the Industry Agreements by the Debtors and other parties to the agreements and by financial institutions involved in implementing the agreements. A full-text copy of the Recognition Order is available for free at http://bankrupt.com/misc/JAL_OrdRecognitionMO.pdf 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) JERRY KAPLAN: Case Summary & 7 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Jerry M. Kaplan 164 Eileen Drive Cedar Grove, NJ 07009 Bankruptcy Case No.: 10-15102 Chapter 11 Petition Date: February 23, 2010 Court: United States Bankruptcy Court District of New Jersey (Newark) Debtor's Counsel: Richard D. Trenk, Esq. Trenk, DiPasquale, Webster, Della Fera & Sodono, P.C. 347 Mt. Pleasant Avenue, Suite 300 West Orange, NJ 07052 Tel: (973) 243-8600 Email: rtrenk@trenklawfirm.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 According to the schedules, the Company has assets of $2,017,290, and total debts of $1,159,688. A full-text copy of Mr. Kaplan's petition, including a list of his 7 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/njb10-15102.pdf The petition was signed by Mr. Kaplan. K&S CAFETERIA: Files for Chapter 11 Bankruptcy ---------------------------------------------- Jeff Drew at Triangle Business Journal reports that K&S Cafeteria at Tower Inc. filed for Chapter 11 bankruptcy, listing assets of less than $50,000 and debts of between $1 million and $10 million. The Company owes $204,175 in unsecured claims to Wachovia, now part of Wells Fargo & Co., and $50,000 in loaned money to William W. Terry. The Company's landlord Martin Properties is seeking about $116,000 in unpaid rent. K&S Cafeteria at Tower Inc. owns and operates chains of cafeterias. LANDAMERICA FIN'L: Court Approves Final Fee Applications -------------------------------------------------------- Judge Heunnekens approved the final fee applications of these professionals retained in LandAmerica Financial Group's bankruptcy cases: A. Debtors' Professionals Professional Period Fees Expenses ------------ --------- ---------- -------- McGuireWoods LLP 11/26/08- $331,478 $3,923 12/06/09 Deloitte Tax LLP 03/23/09- $1,019,030 $18,840 12/04/09 Williams, Mullen, 11/26/08- $403,305 $4,749 Clark & Dobbins, P.C. 12/06/09 Sandler O'Neil & 11/26/08- - $5,688 Partners L.P. 12/06/09 B. Official Committee of Unsecured Creditors' Professionals Professional Period Fees Expenses ------------ -------- --------- -------- Bingham McCutchen LLP 12/03/08- $6,721,107 $223,231 12/06/09 Alvarez & Marsal 09/01/09- $300,455 $7,681 North America, LLC 12/06/09 and Alvarez & Marsal Dispute Analysis & Forensic Services, LLC The LandAmerica Financial Group, Inc, Liquidation Trustee is authorized and directed to pay to Bingham $60,279 as allowance and reimbursement of the firm's fees and expenses incurred during the "Gap Period" as a substantial contribution to the Debtors' estates. The Gap Period refers to the period from November 26, 2008, through December 2, 2008 The hearing with respect to the portion of McGuireWoods' Final Application that relates solely to fees for services performed and expenses incurred on behalf of LandAmerica 1031 Exchange Services, Inc., will be held March 2, 2010, at 10:00 a.m. Eastern Time. LeClairRyan Files Supplemental Application In a supplemental request, LeClairRyan asks the Court to award it $30,218 for fees and expenses incurred from the period from November 26, 2008 to December 2, 2008, known as the "Gap Period," as a substantial contribution to the Debtors' estates. LeClairRyan avers that during the Gap Period, it was instrumental in affording a voice to the unsecured creditors in connection with an objection to LFG's Sale Motion of its primary title insurance underwriting subsidiaries Commonwealth Land Title Insurance Company, Lawyers Title Insurance Corporation, and United Capital Title Insurance Company. 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: Court Confirms OneStop'S Chapter 11 Plan ----------------------------------------------------------- Judge Kevin Huennekens of the United States Bankruptcy Court for the Eastern District of Virginia confirmed the Joint Chapter 11 Plan of LandAmerica Financial Group, Inc., and its affiliated debtors with respect to Debtor LandAmerica OneStop, Inc., at a hearing held last February 9, 2010. Judge Huennekens formally signed the Confirmation Order on February 16, 2010. Any objections or responses to confirmation of the Plan that (a) have not been withdrawn, waived or settled prior to the entry of the OneStop Confirmation Order, or (b) are not cured by the relief granted under the OneStop Confirmation Order are overruled in their entirety and on their merits, the Court ruled. All withdrawn objections or responses are deemed withdrawn with prejudice, the Court held. Upon review, the Court held that the Plan complied with the confirmation requirements of Section 1129(a) of the Bankruptcy Code as to OneStop. The Court further held that the Plan satisfies the requirements of Section 1129(d) because no party-in-interest including, but not limited to, any Governmental Unit, has requested that the Court deny confirmation of the Plan on grounds that the principal purpose of the Plan is the avoidance of taxes or the avoidance of the application of Section 5 of the Securities Act of 1933. Claims Bar Dates The Confirmation Order provides that a holder of an Administrative Expense Claim against OneStop must file with the Bankruptcy Court and serve on: (a) OneStop or the Post-Effective Date Entity, as applicable; (b) the SD Trustee; and (c) the Claims Agent, proof of the Administrative Expense Claim within 30 days after the Effective Date. Any professional seeking allowance by the Bankruptcy Court of a Fee Claim in relation to the bankruptcy case of OneStop will file its final application for allowance of compensation for services rendered and reimbursement of expenses incurred prior to the Effective Date no later than 40 days after the Effective Date. Failure to file and serve final fee applications and Administrative Expense Claims timely and properly will result in the Fee Claim being forever barred and disallowed. In a memorandum issued by the Court, Judge Huennekens noted that the Confirmation Order with respect to OneStop and the Chapter 11 Closing Procedures for the Eastern District of Virginia outlines the steps to be followed in Chapter 11 cases in which substantial consummation has been completed. Procedures may be found on the Court's web site at http://www.vaeb.uscourts.gov According to the Court, the Office of the United States Trustee will ensure compliance with those procedures and monitor the filing of the final report. A full-text copy of the OneStop Confirmation Order is available for free at http://bankrupt.com/misc/OneStop_ConfOrd.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: Trustee Wants More Time to Object to Claims -------------------------------------------------------------- By this motion, Bruce H. Matson, Trustee for the LandAmerica Financial Group, Inc. Liquidation Trust, asks the Court to extend the bar date for filing objections to claims set forth in the Confirmed Joint Chapter 11 Plan of LandAmerica Financial Group, Inc. and its debtors affiliates, as to all Debtors other than LandAmerica OneStop Inc., for 180 days from April 6, 2010 to October 4, 2010. The LFG Trustee expects to be able to conclude his review of the asserted Claims against the Debtors and file objections to them before October 4. However, out of an abundance of caution, the LFG Trustee seeks that his request be entered without prejudice to his right to seek further extensions of the Claims Objection Deadline. The Debtors relate that as of February 16, 2010, they have objected to approximately 1,787 claims in order to accomplish the goals and objectives of their Chapter 11 Plan. Pursuant to the Plan and the Confirmation Order, the task of determining and resolving claims has been assigned to the LFG Trustee as of the Plan Effective Date. The Debtors aver that their counsel continue to assist the LFG Trustee in filing various individual objections to claims. The LFG Trustee expects that once the orders resolving certain claims have been entered, he will have resolved close to 2,118 claims. Martha E. Hulley, Esq., at LeClairRyan, in Richmond, Virginia, relates that analysis of claims by the LFG Trustee, together with Zolfo Cooper, LLC, and counsel for the Debtors, is continuing. The LFG Trustee in the future anticipates filing objections or resolving the remaining claims before October 4, 2010. The LFG Trustee says he has settled and resolved several individual claims for which stipulations will soon be filed in Court. He adds that he is also attempting to resolve various complex litigation claims, which require more time to resolve than permitted through normal omnibus claims procedures. Ms. Hulley assures the Court that the LFG Trustee is making substantial progress of his review and reconciliation of the filed claims. The Court will convene a hearing on March 18, 2010, at 2:00 p.m. Eastern Time, to consider the LFG Trustee's request. Objections are due no later than March 11, 2010. 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) LEAP WIRELESS: Cricket Has Joint Venture Deal with Pocket Comms --------------------------------------------------------------- Cricket Communications, Inc., a wholly owned subsidiary of Leap Wireless International, Inc., on February 22, 2010, entered into an asset purchase and contribution agreement with various entities doing business as Pocket Communications. Cricket and Pocket agreed to contribute substantially all of their wireless spectrum and operating assets in South Texas to a joint venture controlled by Cricket. Cricket will own 76% of the joint venture and Pocket will own 24%. Immediately prior to the closing Cricket will purchase specified assets from Pocket for approximately $38 million in cash, which assets will also be contributed to the joint venture. At the closing, the joint venture will be a "Restricted Subsidiary" under the indentures governing Cricket's senior secured and unsecured notes, but will not guarantee such notes or grant a security interest in favor of Cricket's collateral trustee and secured bondholders. The wireless spectrum to be contributed by Cricket to the joint venture comprises 20 MHz of spectrum in the basic trading area of San Antonio, TX, 10 MHz of spectrum in the basic trading area of McAllen, TX, 10 MHz of spectrum in the basic economic area of McAllen-Edinburg-Mission, TX, 10 MHz of spectrum in each of the basic trading area and basic economic area of Corpus Christi, TX, 10 MHz of spectrum in each of the cellular market area and basic trading area of Laredo, TX, 10 MHz of spectrum in the basic trading area of Brownsville-Harlingen, TX and 10 MHz of spectrum in the basic trading area of Brownwood, TX. The wireless spectrum to be contributed by Pocket to the joint venture comprises 10 MHz of spectrum in each of these basic trading areas: Brownwood, TX, McAllen, TX, San Antonio, TX, Brownsville-Harlingen, TX and Laredo, TX. Pocket will also contribute its spectrum lease for 10 MHz of spectrum in the basic trading area of Corpus Christi, TX. Under the limited liability company agreement that will govern the joint venture after the closing, Pocket will have the right to put all of its membership interests in the joint venture to Cricket at any time after the earliest of 3-1/2 years after the closing, the date of launch by Cricket of a competing wireless business in designated South Texas markets and the liquidation of the joint venture. Cricket will have the right to call all of Pocket's membership interests in the joint venture at any time after the earliest of 3-1/2 years after the closing, the date of launch by Cricket of a competing wireless business in designated South Texas markets (to be no earlier than 2-1/2 years after the closing) and the withholding by Pocket of consent to certain specified matters for which it has a consent right under the LLC Agreement. In addition, in the event that a change of control of Leap (or similar transaction) is consummated, Pocket is obligated to sell to Cricket all of its membership interests in the joint venture. The LLC Agreement also contains customary right of first refusal, drag-along and tag-along rights. The purchase price for Pocket's membership interests in any such put, call or mandatory buyout will be calculated as the fair market value of the joint venture multiplied by 24.25%, less all distributions made by the joint venture to Pocket (other than for taxes) plus an 8% return on such distributions (compounded annually). The fair market value of the joint venture will be calculated as total revenues of the joint venture multiplied by a Leap enterprise value multiple of total revenues, subject to certain adjustments (and, with respect to a put in liquidation, will be capped at the joint venture's members' equity). The purchase price will be payable in cash, restricted shares of Leap common stock or a combination thereof, subject to certain restrictions, provided that at least $25 million of the purchase price (or the full purchase price, if less) will be payable in cash unless such payment would constitute or cause a default under Cricket's debt instruments. The operations of the joint venture will be funded primarily from cash generated from operations of the joint venture. Cricket, as sole manager of the joint venture, is also authorized to make capital calls from time to time in such amounts as it deems appropriate or desirable, and may elect to make one or more unsecured loans to the joint venture (but Cricket will not be entitled to lodge a creditor claim in liquidation for more than $60 million with respect to any such loans). The joint venture may also obtain additional debt financing if Cricket deems such financing to be appropriate or desirable to fund the capital requirements of the joint venture. In addition to quarterly distributions for taxes, the joint venture will make cash distributions to its members on a pro rata basis at such times and in such amounts as Cricket, as sole manager, may determine. In addition, in the event of a partial closing of a Pocket put or mandatory buyout, the joint venture will be required to make quarterly distributions to its members on a pro rata basis thereafter in an amount that would result in Pocket receiving the lesser of the balance of the purchase price and Pocket's pro rata share of the joint venture's excess cash. In the event that Pocket so receives the balance of the purchase price, then Pocket's remaining membership interests in the joint venture will be automatically cancelled. At the closing, the joint venture will also enter into a loan and security agreement with Pocket pursuant to which, commencing 18 months after the closing, the joint venture will make loans to Pocket in an aggregate principal amount of up to $30 million (or, if lesser, the then-applicable purchase price (whether or not a put, call or mandatory buyout has been triggered) or the joint venture's excess cash). The loans will bear interest at 8% per annum (compounded annually), and will mature on the tenth anniversary of the closing date. Cricket will have the right to set off all outstanding principal and interest under this loan facility against the payment of the purchase price in the event of a put, call or mandatory buyout. The closing of the transactions is subject to customary closing conditions, including the consent of the FCC. About Leap Headquartered in San Diego, California, Leap Wireless International, Inc. (NASDAQ: LEAP) -- http://www.leapwireless.com/ -- and its joint ventures provide wireless services in 34 states and the District of Columbia and hold licenses in 35 of the top 50 U.S. markets. Through its affordable, flat-rate service plans, Cricket offers customers a choice of unlimited voice, text, high- speed data and mobile Web services. Leap spun out from Qualcomm Inc. in 1998 and expanded primarily into rural markets. It has customers in 34 states and annual sales around $2.3 billion, making it the seventh-largest wireless carrier in the U.S., according to The Wall Street Journal. As of September 30, 2009, Leap had $5.36 billion in total assets, including $222.9 million in cash and cash equivalents, against total liabilities of $3.55 billion and redeemable noncontrolling interests of $75.7 million, resulting in $1.74 billion in stockholders' equity. * * * According to the Troubled Company Reporter on April 29, 2009, Standard & Poor's Ratings Services revised its outlook on Leap Wireless International Inc. to positive from stable. At the same time, S&P affirmed its ratings on the San Diego-based wireless carrier, including the "B-" long-term corporate credit rating and "B+" secured bank loan rating on subsidiary Cricket Communications Inc. LEAP WIRELESS: FMR, Fidelity Hold 9.878% of Common Stock -------------------------------------------------------- FMR LLC and Edward C. Johnson 3d disclosed that they may be deemed to beneficially own 7,699,250 shares or roughly 9.878% of the common stock of Leap Wireless International, Inc. Fidelity Management & Research Company, a wholly owned subsidiary of FMR LLC, is the beneficial owner of 7,459,788 shares or 9.570% of Leap Common Stock as a result of acting as investment adviser to various investment companies registered under Section 8 of the Investment Company Act of 1940. The number of shares of Common Stock of LEAP WIRELESS INTL INC owned by the investment companies at December 31, 2009 included 303,738 shares of Common Stock resulting from the assumed conversion of $28,310,000 principal amount of LEAP WIRELESS CONV 4.5% 7/14 (10.729 shares of Common Stock for each $1,000 principal amount of debenture). Edward C. Johnson 3d and FMR LLC, through its control of Fidelity, and the funds each has sole power to dispose of the 7,459,788 shares owned by the Funds. About Leap Headquartered in San Diego, California, Leap Wireless International, Inc. (NASDAQ: LEAP) -- http://www.leapwireless.com/ -- and its joint ventures provide wireless services in 34 states and the District of Columbia and hold licenses in 35 of the top 50 U.S. markets. Through its affordable, flat-rate service plans, Cricket offers customers a choice of unlimited voice, text, high- speed data and mobile Web services. Leap spun out from Qualcomm Inc. in 1998 and expanded primarily into rural markets. It has customers in 34 states and annual sales around $2.3 billion, making it the seventh-largest wireless carrier in the U.S., according to The Wall Street Journal. As of September 30, 2009, Leap had $5.36 billion in total assets, including $222.9 million in cash and cash equivalents, against total liabilities of $3.55 billion and redeemable noncontrolling interests of $75.7 million, resulting in $1.74 billion in stockholders' equity. * * * According to the Troubled Company Reporter on April 29, 2009, Standard & Poor's Ratings Services revised its outlook on Leap Wireless International Inc. to positive from stable. At the same time, S&P affirmed its ratings on the San Diego-based wireless carrier, including the "B-" long-term corporate credit rating and "B+" secured bank loan rating on subsidiary Cricket Communications Inc. LEAP WIRELESS: Goldman Sachs Cuts Stake to 0.1% From 7.4% --------------------------------------------------------- The Goldman Sachs Group, Inc., and Goldman, Sachs & Co. disclosed that as of January 29, 2010, they may be deemed to beneficially own 107,929 shares or roughly 0.1% of Leap Wireless International, Inc. common stock. As of December 31, 2009, Goldman held 5,732,674 or 7.4% of Leap shares. Headquartered in San Diego, California, Leap Wireless International, Inc. (NASDAQ: LEAP) -- http://www.leapwireless.com/ -- and its joint ventures provide wireless services in 34 states and the District of Columbia and hold licenses in 35 of the top 50 U.S. markets. Through its affordable, flat-rate service plans, Cricket offers customers a choice of unlimited voice, text, high- speed data and mobile Web services. Leap spun out from Qualcomm Inc. in 1998 and expanded primarily into rural markets. It has customers in 34 states and annual sales around $2.3 billion, making it the seventh-largest wireless carrier in the U.S., according to The Wall Street Journal. As of September 30, 2009, Leap had $5.36 billion in total assets, including $222.9 million in cash and cash equivalents, against total liabilities of $3.55 billion and redeemable noncontrolling interests of $75.7 million, resulting in $1.74 billion in stockholders' equity. * * * According to the Troubled Company Reporter on April 29, 2009, Standard & Poor's Ratings Services revised its outlook on Leap Wireless International Inc. to positive from stable. At the same time, S&P affirmed its ratings on the San Diego-based wireless carrier, including the "B-" long-term corporate credit rating and "B+" secured bank loan rating on subsidiary Cricket Communications Inc. LEAP WIRELESS: Wellington Management Holds 5.47% of Common Stock ---------------------------------------------------------------- Wellington Management Company, LLP, said that, in its capacity as investment adviser, it may be deemed as of December 31, 2009, to beneficially own 4,242,590 shares or roughly 5.47% of Leap Wireless International, Inc. common stock. The shares are held of record by clients of Wellington Management. Headquartered in San Diego, California, Leap Wireless International, Inc. (NASDAQ: LEAP) -- http://www.leapwireless.com/ -- and its joint ventures provide wireless services in 34 states and the District of Columbia and hold licenses in 35 of the top 50 U.S. markets. Through its affordable, flat-rate service plans, Cricket offers customers a choice of unlimited voice, text, high- speed data and mobile Web services. Leap spun out from Qualcomm Inc. in 1998 and expanded primarily into rural markets. It has customers in 34 states and annual sales around $2.3 billion, making it the seventh-largest wireless carrier in the U.S., according to The Wall Street Journal. As of September 30, 2009, Leap had $5.36 billion in total assets, including $222.9 million in cash and cash equivalents, against total liabilities of $3.55 billion and redeemable noncontrolling interests of $75.7 million, resulting in $1.74 billion in stockholders' equity. * * * According to the Troubled Company Reporter on April 29, 2009, Standard & Poor's Ratings Services revised its outlook on Leap Wireless International Inc. to positive from stable. At the same time, S&P affirmed its ratings on the San Diego-based wireless carrier, including the "B-" long-term corporate credit rating and "B+" secured bank loan rating on subsidiary Cricket Communications Inc. LEARNING CARE: Moody's Assigns 'B2' Rating on $265 Mil. Notes ------------------------------------------------------------- Moody's Investors Service assigned a B2 rating to $265 million of proposed senior secured notes of Learning Care Group (US) No. 2 Inc. and affirmed all other credit ratings. The rating outlook remains negative. The proceeds from the offering are expected to be used to repay existing indebtedness, pay related fees and expenses, and modestly increase balance sheet cash. LCG also expects to enter into a $40 million amended revolving credit facility that provides for greater headroom under financial covenants. Absent a refinancing or an amendment, the company is unlikely to comply with financial covenants in existing debt agreements during calendar 2010. The failure to complete the proposed refinancing and/or obtain an amendment to existing debt agreements could lead to ratings downgrade. Completion of the proposed refinancing and revolver amendment would result in an improved liquidity profile with modest projected covenant headroom during 2010. The B3 Corporate Family Rating is constrained by interest coverage and free cash flow metrics that are weak for the rating category and declining revenues and profitability during 2009. The high level of job losses in the US over the last 12 to 18 months has led to sharply lower enrollments at company centers. Given the likelihood of a slow improvement in the unemployment rate, Moody's expects enrollment trends to remain weak during the 2010 calendar year. However, Moody's expects year over year comparable center revenue declines to moderate during 2010. The ratings are supported by a large geographically diverse property base within the US, significant improvements to the cost structure, a track record of price increases at company centers, and an improved liquidity profile pro forma for the completion of the proposed refinancing. The negative outlook anticipates a moderate decline in profitability during calendar 2010, with year over year enrollment declines partially offset by price increases and the benefit of cost saving initiatives. Moody's took these rating actions: -- Assigned $265 million 5 year senior secured notes B2 (LGD 3, 37%) -- Affirmed $40 million senior secured revolving credit facility due 2013, Ba3 (LGD 2, 24%) -- Affirmed $175 million senior secured term loan B due 2015, Ba3 (LGD 2, 24%) -- Affirmed Corporate Family Rating, B3 -- Affirmed Probability of Default Rating, B3 The ratings on the term loan and revolver are expected to be withdrawn upon the closing of the refinancing. The last rating action on LCG was on April 9, 2009, when Moody's downgraded the Corporate Family Rating to B3 from B2 and changed the outlook to negative. Learning Care Group (US) No. 2 Inc., based in Novi, Michigan, is the second largest provider of for-profit child care and early education services in the United States, including outside school hours care. LCG reported revenues of approximately $795 million in the twelve months ended September 30, 2009. Morgan Stanley Private Equity owns 60% of LCG's parent holding company, with the remaining 40% owned by A.B.C. Learning Centres Limited. LEARNING CARE: S&P Affirms 'CCC+' Corporate Credit Rating --------------------------------------------------------- Standard & Poor's Rating Services said it affirmed its 'CCC+' corporate credit rating on Learning Care Group (US) Inc. The rating outlook is negative. Novi, Michigan-based Learning Care Group is the second-largest player in the fragmented U.S. institutional childcare industry. Pro forma total debt was $312 million as of Dec. 31, 2009. Standard & Poor's also assigned subsidiary Learning Care Group (US) No. 2 Inc.'s proposed 144A issuance of $265 million senior secured notes due 2015 S&P's issue-level rating of 'CCC+' (at the same level as the corporate credit rating on the parent company). S&P also assigned the proposed notes a recovery rating of '4', indicating its expectation of average (30%-50%) recovery for noteholders in the event of a payment default. In conjunction with this transaction, the company is seeking to amend its $40 million revolving credit facility, which would loosen near-term covenants. S&P assigned its issue-level and recovery ratings to Learning Care Group (US) No. 2's proposed amended and restated $40 million revolving credit facility due 2013. S&P assigned the facility an issue-level rating of 'B' (two notches higher than the 'CCC+' corporate credit rating on the company), with a recovery rating of '1', indicating its expectation of very high (90%-100%) recovery for lenders in the event of a payment default. The company plans to use proceeds of the notes to refinance its existing indebtedness, except capital lease obligations, and add $17.8 million to cash balances. "The ratings reflect the risk surrounding the company's need to complete the transaction to avoid a likely near-term covenant default," said Standard & Poor's credit analyst Hal F. Diamond. Learning Care had 4.09x leverage as of Dec. 31, 2009, based on its credit agreement calculation, representing a thin margin of compliance with its 4.30x total debt leverage covenant. "S&P view the company as unlikely to be able to remain in compliance with existing financial covenants, given step-downs to 4.0x at March 31, 2010 and to 3.7x at June 30, 2010," added Mr. Diamond, "unless it can either complete the proposed refinancing or obtain an amendment or waiver. The refinancing, in S&P's view, only forestalls liquidity difficulties." If the financing is completed, S&P would still be concerned about the company's high debt leverage, weakening operating performance, and limited liquidity. LEHMAN BROTHERS: Hong Kong Agency Probing 1,056 Remaining Cases --------------------------------------------------------------- The Hong Kong Monetary Authority (HKMA) announced that up to 11 February 2010, there were 12,923 complaint cases concerning Lehman-Brothers-related investment products which have been resolved by a settlement agreement reached under section 201 of the Securities and Futures Ordinance and 819 cases through the enhanced complaint-handling procedures required by the settlement agreement. Together with the 2,812 cases closed because insufficient prima facie evidence of misconduct was found after assessment or no sufficient grounds and evidence were found after investigation, the handling of 16,554 complaints received have now been completed. Currently, 1,056 Lehman-Brothers-related complaint cases (including minibond cases) are under disciplinary consideration after detailed investigation by the HKMA. Proposed disciplinary notices are being prepared in respect of 757 such cases and proposed disciplinary notices or decision notices have been issued in respect of another 299 cases. Adding these 1,056 cases to those the handling of which has already been completed, investigation work has finished for 81% of complaint cases received. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy September 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition listed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on September 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on September 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: LB Preferred Somerset's Schedules & Statement -------------------------------------------------------------- A. Real Property $0 B. Personal Property $0 TOTAL SCHEDULED ASSETS $0 ======================================================== C. Property Claimed as Exempt Not applicable D. Secured Claim $0 E. Unsecured Priority Claims $0 F. Unsecured Non-priority Claims PAMI LLC $9,656,919 Richards Layton & Finger $63,691 Somerset Associates, LLC $2,584,200 TOTAL SCHEDULED LIABILITIES $12,304,810 ======================================================== Statement of Financial Affairs LB Preferred Somerset LLC informed the U.S. Bankruptcy Court for the Southern District of New York that it received $465,163 from mandatory preferred return payments in 2008. The company also disclosed that that it generated losses from operations other than from the operation of its business within two years prior to its bankruptcy filing: Source Amount ------ ----------- 2009 Write down of investment loss ($8,544,659) 2008 Write down of investment loss ($3,690,898) LB Preferred is a party to a lawsuit filed by Falls of Neuse, Investments LLC, which seeks to compel funding of preferred capital and eliminate rights to participate in management of company. The case was stayed following the company's bankruptcy filing. LB Preferred disclosed that these bookkeepers and accountants kept or supervised the keeping of its books of account and records: Personnel Dates Services Rendered --------- ----------------------- TriMont Real Estate Advisors Inc. 07/09/07 - present Jeffrey Fitts 09/15/08 - present TriMont and Mr. Fitts were also in possession of the books of account and records of the company at the time of its bankruptcy filing, according to LB Preferred. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy September 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition listed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on September 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on September 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: LB Somerset LLC Files Schedules & Statement ------------------------------------------------------------ A. Real Property $0 B. Personal Property $0 TOTAL SCHEDULED ASSETS $0 ======================================================== C. Property Claimed as Exempt Not applicable D. Secured Claim $0 E. Unsecured Priority Claims $0 F. Unsecured Non-priority Claims Clyde Click P.C. $26,098 PAMI LLC $7,467,932 TOTAL SCHEDULED LIABILITIES $7,494,031 ======================================================== Statement of Financial Affairs LB Somerset LLC informed the U.S. Bankruptcy Court for the Southern District of New York that it generated income other than from the operation of its business within two years prior to its bankruptcy filing: Source Amount ------ ----------- 2008 Write down of investment loss ($7,352,181) 2007 Write down of investment loss ($67,754) LB Somerset is a party to a lawsuit filed by Falls of Neuse, Investments LLC, which seeks to compel funding of preferred capital and eliminate rights to participate in management of company. The case was stayed as a result of LB Somerset's bankruptcy filing. LB Somerset disclosed that these bookkeepers and accountants kept or supervised the keeping of its books of account and records: Personnel Dates Services Rendered --------- ----------------------- TriMont Real Estate Advisors Inc. 07/09/07 - present Jeffrey Fitts 09/15/08 - present TriMont and Mr. Fitts were also in possession of the books of account and records of LB Somerset at the time of its bankruptcy filing. 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: Norton Rose Chages $1.1MM for June-Sept. Work -------------------------------------------------------------- Professionals hired in Lehman Brothers, Inc.'s Securities Investor Protection Act liquidation, filed interim applications for allowance and payment of their fees and expenses: Professional Period Fees Expenses ------------ ------ ---- -------- Norton Rose LLP 06/01/09- $1,103,416 $39,096 09/23/09 Steinmetz, Haring, 07/13/09- 64,912 15,288 Gurman & Co. 12/31/09 Norton Rose is the United Kingdom counsel for James W. Giddens, the trustee for the SIPA liquidation of LBI. Steinmetz Haring is special Israeli counsel to the SIPA Trustee. 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) LOONEY RICKS KISS: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Looney Ricks Kiss Architects, Inc. fdba Looney Ricks Kiss, Inc. 175 Toyota Plaza, Suite 600 Memphis, TN 38103 Bankruptcy Case No.: 10-22034 Chapter 11 Petition Date: February 23, 2010 Court: United States Bankruptcy Court Western District of Tennessee (Memphis) Judge: Jennie D. Latta Debtor's Counsel: John L. Ryder, Esq. One Commerce Square, Suite 2700 Memphis, TN 38103-2555 Tel: (901) 525-1455 Email: jryder@harrisshelton.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 According to the schedules, the Company has assets of $3,117,189, and total debts of $4,200,925. A full-text copy of the Debtor's petition, including a list of its 20 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/tnwb10-22034.pdf The petition was signed by H. Frank Ricks Jr., president of the Company. MAGNA ENTERTAINMENT: Pimlico/Laurel Auction Moved to March 25 ------------------------------------------------------------- Bill Rochelle at Bloomberg News reports that Magna Entertainment Corp. has postponed until March 25 the auction for its Pimlico and Laurel Park racetracks in Maryland. This is the fourth time the auction has been adjourned. The Company previously said there were six potential bidders, although none was sufficiently attractive to warrant signing a contract. About Magna Entertainment Based in Aurora, Ontario, Magna Entertainment Corp. is North America's largest owner and operator of horse racetracks based on revenue. The Company develops, owns and operates horse racetracks and related pari-mutuel wagering operations, including off-track betting facilities. MEC also develops, owns and operates casinos in conjunction with its racetracks where permitted by law. MEC owns and operates AmTote International, Inc., a provider of totalisator services to the pari-mutuel industry, XpressBet(R), a national Internet and telephone account wagering system, as well as MagnaBet(TM) internationally. Pursuant to joint ventures, MEC has a 50% interest in HorseRacing TV(R), a 24-hour horse racing television network, and TrackNet Media Group LLC, a content management company formed for distribution of the full breadth of MEC's horse racing content. Following its failure to meet obligations to lenders led by PNC Bank, National Association, and Wells Fargo Bank, National Association, and controlling shareholder MI Developments Inc.'s decision not to provide further financial backing, Magna Entertainment Corp. and 24 affiliates filed for Chapter 11 on March 5, 2009 (Bankr. D. Del. Lead Case No. 09-10720). Marcia L. Goldstein, Esq., and Brian S. Rosen, Esq., at Weil, Gotshal & Manges LLP, have been engaged as bankruptcy counsel. Mark D. Collins, Esq., L. Katherine Good, Esq., and Maris J. Finnegan, Esq., at Richards, Layton & Finger, P.A., are the Debtors' local counsel. Miller Buckfire & Co. LLC is the Debtors' investment banker and financial advisor. Kurtzman Carson Consultants LLC is the claims and noticing agent for the Debtors. Magna Entertainment Corp. had total assets of $1.054 billion and total liabilities of $947.3 million based on unaudited consolidated financial statements as of December 31, 2008. MAGNA ENTERTAINMENT: Disclosure Statement Hearing on March 23 ------------------------------------------------------------- Magna Entertainment Corp. and its units will seek approval on March 23 of the disclosure statement explaining their proposed plan of reorganization. Magna Entertainment will be able to commence soliciting votes on, then seek confirmation of the Plan, following approval of the Disclosure Statement. MI Developments Inc. and the Official Committee of Unsecured Creditors of MEC serve as co-proponents of the Plan. The backbone of the Plan is a settlement of the lawsuit commenced by the Creditors Committee against, among others, MID and MEC. The Creditors Committee had commenced an adversary proceeding against MID Islandi sf., the Debtors' largest prepetition secured lender, MI Developments Inc., Magna Entertainment's controlling shareholder, and certain other third party defendants asserting, among other things, claims of fraudulent transfer, equitable subordination, recharacterization and breaches of fiduciary duty. To implement the settlement in principle of the Committee Litigation, the parties have agreed to, among other things, these terms and conditions: * The Creditors Committee has agreed to dismiss the Committee Litigation, with prejudice, on the Effective Date. MID has agreed that it or MI Developments US Financing Inc. ("MID Transferee") will pay (a) $75,000,000 for distribution of the Creditor Cash to holders of Allowed Non-MJC General Unsecured Claims, (b) cash in an amount necessary to satisfy, in full, Allowed Administrative Expense Claims, Allowed Priority Tax Claims, Allowed Priority Non-Tax Claims, the Allowed PNC Claim and Allowed MJC Claims, on the terms and subject to the conditions set forth in the Plan and (c) $1,500,000 for payment of certain fees and expenses of the Creditors Committee's professionals and certain members of the Creditors Committee incurred in connection with the Committee Litigation. * In full satisfaction and release of all of its Claims against the Debtors, the Debtors, the Creditors Committee and MID agree that on the Effective Date: -- MID Transferee will receive net sale proceeds received from the sale of Lone Star Park, if any, in excess of the first $20,000,000 or, in the event that the sale of Lone Star Park has not been consummated as of the Effective Date, the LSP Trust Interests entitling it to receive its share of the Lone Star Park sale proceeds; -- MID Transferee shall receive the first $20,000,000 of net sale proceeds received from the sale of Maryland Jockey Club or its assets, in whole or in part, and 50% of any sales proceeds in excess of the first $20,000,000, after full satisfaction, settlement, release and discharge of all MJC Claims and the PNC Claim, or, in the event that the sale of Maryland Jockey Club or its assets, in whole or in part, has not been consummated as of the Effective Date, the MJC Trust Interests entitling it to receive its share of the Maryland Jockey Club sale proceeds; -- MID Transferee will receive the first $20,000,000 of net sale proceeds received from the sale of Thistledown or, in the event that the sale of Thistledown has not been consummated as of the Effective Date, the Thistledown Trust Interests entitling it to receive its share of the Thistledown sale proceeds; -- Equity Interests in certain of the Reorganized Debtors will be issued to MID Transferee, and assets of certain Reorganized Debtors shall be transferred to MID Transferee, pursuant to the Plan, such that on the Effective Date, MID Transferee shall own the Debtors' racetracks known as Santa Anita Park, Golden Gate Fields, and Gulfstream Park, AmTote and certain other assets of the Debtors; -- The Debtors or the Reorganized Debtors shall convey to MID Transferee certain non-debtor assets, including the assets of XpressBet, Inc. and Magna Entertainment's interests in TrackNet Media Group LLC, HRTV, LLC, MEC Media Television Holdings Inc. and MEC Oregon Racing, Inc.; -- Any proceeds received by the Debtors or the Reorganized Debtors from the settlement or resolution of the PA Meadows Litigation shall go to MID Transferee. * Holders of Allowed Non-MJC General Unsecured Claims, Allowed 8.55% Note Claims and Allowed 7.25% Note Claims will receive, subject to certain reductions, including a reduction of the KLNF Contingency Fee, their pro rata share of (a) the Committee Litigation Settlement Payment, (b) the first $20,000,000 of net sale proceeds from the sale of Lone Star Park or, in the event that the sale of Lone Star Park has not been consummated as of the Effective Date, the LSP Trust Interests entitling them to receive their share of the Lone Star Park sale proceeds; (c) net sale proceeds received from the sale of Thistledown, if any, in excess of the first $20,000,000 or, in the event that the sale of Thistledown has not been consummated as of the Effective Date, the Thistledown Trust Interests entitling them to receive their share of the Thistledown sale proceeds; and (d) 50% of any net sale proceeds in excess of the first $20,000,000 received from the sale of Maryland Jockey Club or, in the event that the sale of Maryland Jockey Club or its assets, in whole or in part, has not been consummated as of the Effective Date, the MJC Trust Interests entitling them to receive their share of the Maryland Jockey Club net sale proceeds. * In the event that the sales of Lone Star Park, Maryland Jockey Club, or Thistledown or their respective assets, in whole or in part, have not been consummated as of the Effective Date, the assets and reorganized equity of each entity will be placed into Operating Trusts and MID Transferee and the holders of Allowed General Unsecured Claims, Allowed 8.55% Note Claims and Allowed 7.25% Note Claims shall receive the applicable Operating Trust Interests entitling them to payment of the sales proceeds upon consummation of the applicable sales in accordance with the Plan. In addition, the Plan provides certain releases to, among others, MID Islandi, MID, MID US Financing, and the Debtors. The plan proponents have entered into a Support Agreement pursuant to which, among other things, MID and the Committee agreed to support the Plan and MEC agreed to seek approval of the Disclosure Statement in the Bankruptcy Court on or prior to March 31 and obtain confirmation of the Plan by the Bankruptcy Court on or prior to April 30. The Support Agreement may be terminated if, among other things, the Bankruptcy Court denies confirmation of the Plan. With respect to the non-real estate related MEC assets that will be transferred to MID as contemplated by the Plan, MID intends to announce on or prior to the Confirmation Date certain forbearance terms or funding limitations or other restrictions to be approved by its Special Committee of the Board with respect to any future investments by MID in, or loans to be made by MID in respect of, such assets. A copy of the Plan is available for free at: http://bankrupt.com/misc/Magna_Ch11Plan_Feb18.pdf A copy of the Disclosure Statement is available for free at: http://bankrupt.com/misc/Magna_DiscStatement_Feb18.pdf About Magna Entertainment Based in Aurora, Ontario, Magna Entertainment Corp. is North America's largest owner and operator of horse racetracks based on revenue. The Company develops, owns and operates horse racetracks and related pari-mutuel wagering operations, including off-track betting facilities. MEC also develops, owns and operates casinos in conjunction with its racetracks where permitted by law. MEC owns and operates AmTote International, Inc., a provider of totalisator services to the pari-mutuel industry, XpressBet(R), a national Internet and telephone account wagering system, as well as MagnaBet(TM) internationally. Pursuant to joint ventures, MEC has a 50% interest in HorseRacing TV(R), a 24-hour horse racing television network, and TrackNet Media Group LLC, a content management company formed for distribution of the full breadth of MEC's horse racing content. Following its failure to meet obligations to lenders led by PNC Bank, National Association, and Wells Fargo Bank, National Association, and controlling shareholder MI Developments Inc.'s decision not to provide further financial backing, Magna Entertainment Corp. and 24 affiliates filed for Chapter 11 on March 5, 2009 (Bankr. D. Del. Lead Case No. 09-10720). Marcia L. Goldstein, Esq., and Brian S. Rosen, Esq., at Weil, Gotshal & Manges LLP, have been engaged as bankruptcy counsel. Mark D. Collins, Esq., L. Katherine Good, Esq., and Maris J. Finnegan, Esq., at Richards, Layton & Finger, P.A., are the Debtors' local counsel. Miller Buckfire & Co. LLC is the Debtors' investment banker and financial advisor. Kurtzman Carson Consultants LLC is the claims and noticing agent for the Debtors. Magna Entertainment Corp. had total assets of $1.054 billion and total liabilities of $947.3 million based on unaudited consolidated financial statements as of December 31, 2008. MESA AIR: Bankruptcy Cues AAR's $45 Mil. Annual Revenue Loss ------------------------------------------------------------ AAR Corp. said in a statement, dated February 9, 2010, that its results for the third quarter ending February 28, 2010, will be "unfavorably impacted by approximately $0.10 diluted earnings per share" resulting from Mesa Air Group, Inc.'s January 5, 2010 Chapter 11 filing. According to the statement, the impact "reflects the Company's estimated loss on [prepetition] trade accounts receivables and the reduction in the carrying value of other [contract-related] assets." AAR supplies parts and provides aircraft maintenance to Mesa, canadianbusiness.com noted. As previously reported, Mesa is reducing its fleet of aircraft to eliminate costs. AAR said that it expects annual sales to Mesa to drop to $45,000,000, from the $70,000,000 before Mesa's bankruptcy filing. AAR Chairman and Chief Executive Officer, David P. Storch, said in the statement that the company's defense business "remains strong" and, after excluding Mesa's unfavorable impact, they "expect to achieve modest sequential earnings per share improvement in our Fiscal 2010 third quarter results." He added that the company expects "continued strong cash flow from operations" in its third quarter. 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: Donald Smith Has 1.51% Equity Stake --------------------------------------------- In separate amendments to their Schedules 13G filed with the United States Securities and Exchange Commission, (i) Donald Smith & Co., Inc., disclosed that it owns 1.51% of the shares in Mesa Air Group, Inc. common stock; and (ii) LC Capital Master Fund, Ltd., Lampe, Conway & Co., LLC, Steven G. Lampe, and Richard F. Conway disclosed that they do not beneficially own any shares of Mesa common stock as of February 12, 2010. As of February 12, the entities have ceased to be holders of more than 5% of the securities. Reporting Entity No. Shares Owned % Shares ---------------- ---------------- -------- Donald Smith & Co., Inc. 2,642,861 1.51% LC Capital Master Fund, Ltd. 0 0% Lampe, Conway & Co., LLC 0 0% Steven G. Lampe 0 0% Richard F. Conway 0 0% 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 January 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 September 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) MICHAELS STORES: Revolving Credit Facility Extended to April 2014 ----------------------------------------------------------------- Michaels Stores Inc. entered into an Amended and Restated Credit Agreement to amend various terms of the Company's Credit Agreement dated as of Oct. 31, 2006, with Bank of America, N.A. as administrative agent and collateral agent; Wells Fargo Retail Finance LLC, as syndication agent; Deutsche Bank Securities Inc., JPMorgan Chase Bank, N.A. and Credit Suisse, as co-documentation agents, General Electric Capital Corporation, UBS Securities LLC and RBS Business Capital, as senior managing agents, Banc of America Securities LLC, Wells Fargo Retail Finance, LLC and Deutsche Bank Securities Inc., as joint lead arrangers, and Banc of America Securities LLC, Wells Fargo Retail Finance, LLC, Deutsche Bank Securities Inc., J.P. Morgan Securities Inc. and Credit Suisse, as joint book runners. Pursuant to the Amended Credit Agreement, the Company and the Lenders agreed that, with respect to certain of the Lenders under the Existing Credit Agreement, representing an aggregate amount of $850,000,000 of the tranche A commitments and $50,000,000 of the FILO commitments, the termination date of the asset-based revolving credit facility under the Existing Credit Agreement would be extended from October 31, 2011, to the earlier of: * April 15, 2014; * 45 days prior to the maturity date of any class of term loans in the Company's term loan credit facility; and * the date on which the maturity of the obligations is accelerated and the commitments with respect to the Extending Lenders are terminated due to an event of default. $202 million of commitments of certain of the other Lenders under the Existing Credit Agreement under the Existing Facility shall terminate on the earlier of the Existing Maturity Date and the date on which the maturity of the obligations is accelerated and the commitments under the Existing Facility are terminated due to an event of default. Additionally, under the Amended Credit Agreement, the aggregate amount of first in last out commitments has been reduced from $100,000,000 to $50,000,000. Simultaneously with entering into the Amended Credit Agreement, the Company exercised its ability to increase the tranche A commitments in the aggregate amount of $152,000,000. With respect to the Extending Lenders, the interest rates under the Amended Credit Agreement are based on: * for LIBO loans for any interest period, at a rate per annum equal to the LIBO rate as determined by the Administrative Agent, for such interest period multiplied by the Statutory Reserve Rate, plus an applicable margin of: -- 3.00%, 3.25%, 3.50% or 3.75% for tranche A loans; and -- 5.00%, 5.25%, 5.50% or 5.75% for FILO loans, in each case based on Availability for the most recently ended Fiscal Quarter; and * for prime rate loans, a rate per annum equal to the highest of: -- the variable annual rate of interest then announced by Bank of America, N.A. at its head office as its "prime rate" and -- the federal funds rate in effect on such date plus 0.50% per annum; or -- the Adjusted LIBO Rate plus 1.00% per annum, plus an applicable margin of (x) 2.00%, 2.25%, 2.50% or 2.75% for tranche A loans and (y) 4.00%, 4.25%, 4.50% or 4.75% for FILO loans, in each case based on Availability for the most recently ended Fiscal Quarter. With respect to the Non-Extending Lenders, the interest rates shall be the same as those set forth under the Existing Credit Agreement. Under the Amended Credit Agreement, in addition to certain customary administrative and other fees, the Loan Parties must pay the Administrative Agent, for the account of the Extending Lenders, an aggregate fee equal to 0.625% per annum of the average daily balance of the Extending Lenders' unused loan commitments during the Fiscal Quarter just ended. The fees paid to the Non- Extending Lenders for their unused commitments shall be the same as those set forth in the Existing Credit Agreement Under the Amended Credit Agreement, the Loan Parties must satisfy a pro forma credit availability condition as follows: * for each of the 30 consecutive days preceding the Existing Termination Date and on a pro forma basis after giving effect to the termination or reduction of the commitments of the Non-Extending Lenders and the repayment of the obligations owed to the Non-Extending Lenders on the Existing Termination Date, Availability of not less than $125,000,000; and * on a projected pro forma basis for each of the six months immediately following, and after giving effect to, the termination or reduction of the commitments of the Non- Extending Lenders and repayment of the obligations owed to the Non-Extending Lenders on the Existing Termination Date, based on projections prepared by the Loan Parties at the time of the Existing Termination Date, Availability of not less than $125,000,000. Except for the periods described in the preceding sentence, the Loan Parties must not permit Availability at any time to be less than the greater of: * $75,000,000; and * 10% of the lesser of (a) the then borrowing base under the Amended Credit Agreement or (b) a revolving credit ceiling of $1,102,000,000. "Availability" under the Amended Credit Agreement means the lesser of (a) the Revolving Credit Ceiling minus the outstanding credit extensions and (b) the then borrowing base minus the outstanding credit extensions. A full-text copy of the amended and restated credit agreement is available for free at http://ResearchArchives.com/t/s?54b8 About Michaels Stores Irving, Texas-based Michaels Stores, Inc., is North America's largest specialty retailer of arts, crafts, framing, floral, wall d,cor and seasonal merchandise for the hobbyist and do-it-yourself home decorator. As of November 30, 2009, the Company owns and operates 1,027 Michaels stores in 49 states and Canada, and 152 Aaron Brothers stores. As of October 31, 2009, the Company had $1.760 billion in total assets against $4.619 billion in total liabilities, resulting in $2.859 billion in stockholders' deficit. As of October 31, 2009, the Company's cash balance was $49 million. Third quarter debt levels declined $272 million to $3.911 billion compared to $4.183 billion as of the end of the third quarter of fiscal 2008. Availability under the revolving credit facility was $799 million. During the quarter, the Company also made a $5.9 million amortization payment on its Senior Secured Term Loan. * * * According to the Troubled Company Reporter on Nov. 10, 2009, Standard & Poor's Ratings Services said it affirmed its ratings outlook on the Irving, Texas-based-Michaels Stores Inc. This action comes after the company amended its senior secured credit facility so that $1 billion of the currently outstanding $2.285 billion now matures in 2016. Michaels agreed to pay a higher interest rate margin on the extended portion of the term loan; the LIBOR margin increased to 4.5% from 2.25%. MIDWAY GAMES: Files Chapter 11 Plan of Liquidation -------------------------------------------------- Midway Games Inc. and its affiliates on February 23 filed a joint Chapter 11 plan of liquidation and explanatory disclosure statement. The Debtors will seek approval of the adequacy of the information in the Disclosure Statement on March 23. Objections are due March 16. The Debtors will begin soliciting votes on, and then seek confirmation of, the Plan after the Disclosure Statement is approved. The Plan will be funded by the proceeds previously generated from the Debtors' ongoing operations, together with the proceeds generated from asset sales. The Plan will implement the settlement among members of the Official Committee of Unsecured Creditors. Under the settlement, unsecured creditors with claims against Midway Games (Class 3A) and the subsidiaries (Class 3B) will have their pro rata share of the $34.67 million estimated "Net Distribution Value". Holders of claims in Class 3A aggregating $154.82 million will recover 16.5% based on the class's share of $25.5 million of NDV. Holders of claims in Class 3B aggregating $36.66 million will recover 25%. As part of the settlement, holders of NAI Subordinated Claims, which are subordinated to the claims of noteholders in class 3A, won't recover anything. Equity holders won't recover anything. Holders of secured claims will recover cash equal to the amount of their secured claims or will recover the collateral securing their claims. A copy of the Disclosure Statement is available for free at: http://bankrupt.com/misc/Midway_DiscStatement.pdf About Midway Games Headquartered in Chicago, Illinois, Midway Games Inc. (OTC Pink Sheets: MWYGQ) -- http://www.midway.com/-- was a leading developer and publisher of interactive entertainment software for major videogame systems and personal computers. The Company and nine of its affiliates filed for Chapter 11 protection on February 12, 2009 (Bankr. D. Del. Lead Case No. 09-10465). Michael D. DeBaecke, Esq., Jason W. Staib, Esq, and Victoria A. Guilfoyle, Esq., at Blank Rome LLP, in Wilmington, Delaware; and Marc E. Richards, Esq., and Pamela E. Flaherty, Esq., at Blank Rome LLP, in New York, represent the Debtors in their restructuring efforts. Attorneys at Milbank, Tweed, Hadley & McCloy LLP and Richards, Layton & Finger, P.A. represent the official committee of unsecured creditors as counsel. Epiq Bankruptcy Solutions, LLC, is the Debtors' claims, noticing, and balloting agent. On July 10, 2009, Midway and certain of its U.S. subsidiaries completed the sale of substantially all of their assets to Warner Bros. Entertainment Inc. in a sale approved by the Court. The aggregate gross purchase price is roughly $49 million, including the assumption of certain liabilities. Midway is disposing of its remaining assets. At June 30, 2009, the Debtors had $1.39 billion in total assets and $1.59 billion in total liabilities. MILA INC: Director Can Use D&O Policy Proceeds for Defense ---------------------------------------------------------- WestLaw reports that regardless of whether the proceeds of the Chapter 11 debtor's directors and officers insurance policy were property of the estate, a Washington bankruptcy court did not abuse its discretion in granting the debtor's sole director stay relief for "cause" so that he could use the proceeds of the policy, a "wasting" policy which offered only "A-side" and "B- side" coverage, to fund the costs that he incurred in defending an adversary proceeding brought against him by the trustee. The director's defense losses were clear, immediate, and ongoing, while the trustee could only show hypothetical or speculative indemnification claims against the debtor since neither it nor the estate had paid anything to the director and no other actions had been filed against other of the debtor's officers. In addition, the Bankruptcy Appellate Panel found, the likelihood that the director would exhaust the $1 million policy with his defense costs appeared to be remote. In re Mila, Inc., --- B.R. ----, 2010 WL 455328, 10 Cal. Daily Op. Serv. 1903 (9th Cir. BAP). As related in the Troubled Company Reporter on Oct. 9, 2008, Geoffrey Groshong, the chapter 11 trustee in MILA Inc.'s chapter 11 case sued founder and CEO Layne Sapp, accusing him of improperly draining the company's assets. The lawsuit alleges that Mr. Sapp collected $32 million in salary, dividends and bonuses from MILA in the 3-1/2 years prior to the company's collapse. Mr. Sapp has denied all of trustee's allegations. Headquartered in Mountlake Terrace, Washington, MILA Inc., doing business as Mortgage Investment Lending Associates, Inc. -- http://www.mila.com/-- is an e-commerce mortgage solutions provider that utilizes AccessPoint, a proprietary e-commerce portal, to help mortgage brokers, realtors and bankers fulfill customized residential home loans. The company filed for Chapter 11 protection (Bankr. W.D. Wash. Case No. 07-13059) on July 2, 2007. Christine M. Tobin, Esq. and James L. Day, Esq., at Bush, Strout, & Kornfeld, represent the Debtor in its restructuring efforts. The Court appointed Geoffrey Groshong as chapter 11 trustee on July 6, 2007. The law firm of Crocker Kuno Ostrovsky LLC represents the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it disclosed assets of $7,886,962, and liabilities of $174,730,413. MOVIE GALLERY: Blockbuster Eyes Buying Some, Not All, Assets ------------------------------------------------------------ The Wall Street Journal's Mike Spector reports Blockbuster Inc. has been in discussions with Movie Gallery Inc. -- which filed for bankruptcy protection earlier this month -- about acquiring assets that might bolster Blockbuster's prospects. The Journal relates that in early January, Blockbuster's chief merchandising officer, Bill Lee, sent a letter to rival Movie Gallery expressing interest in acquiring certain assets, including stores and customer lists, according to people familiar with the matter. Movie Gallery chose not to engage in discussions and focused on preparing a bankruptcy filing. "We're still having discussions with them," Mr. Keyes said, adding the company has no intention of acquiring Movie Gallery wholesale. Mr. Lee has since left the company. The Journal also reports that people familiar with the matter said Blockbuster Inc. in recent days, tapped law firm Weil, Gotshal & Manges and investment bank Rothschild Inc. to look at ways to reduce its roughly $1 billion debt load and explore other strategies, such as acquisitions or partnerships. Sources told the Journal Blockbuster has mulled converting some of its debt to equity or buying back some bonds at a discount. A deal would likely focus on negotiating with a group of subordinated bondholders who are owed $300 million, the sources said. People familiar with the situation also told the Journal bondholders have begun organizing and talking with potential advisers to prepare for possible negotiations over reworking the company's capital structure, such as converting debt to equity. The Journal's sources said the restructuring discussions are in early stages and no major actions appear imminent. Blockbuster's Chief Executive Jim Keyes said the company works with advisers regularly and that management is considering a menu of options including reworking its debt and pursuing merger-and- acquisition opportunities. He declined to elaborate. "We don't contemplate filing for bankruptcy," he said in an interview, according to the Journal. According to the Journal, Mr. Keyes said the current discussions represent routine efforts to help "transform" Blockbuster's business. "I like to characterize it as remodeling a house," Mr. Keyes said. "When you're tearing down walls and moving stuff around, the process itself makes it difficult to see the end product . . . but the outcome is often quite good." About Movie Gallery Based in Wilsonville, Ore., Movie Gallery, Inc. is the second largest North American video and game rental company, operating stores in the U.S. and Canada under the Movie Gallery, Hollywood Video and Game Crazy brands. Movie Gallery first filed for Chapter 11 on Oct. 16, 2007 (Bankr. E.D. Va. Case Nos. 07-33849 to 07-33853). Kirkland & Ellis LLP and Kutak Rock LLP represented the Debtors. The Company emerged from bankruptcy on May 20, 2008, with private-investment firms Sopris Capital Advisors LLC and Aspen Advisors LLC as its principal owners. William Kaye was appointed plan administrator and litigation trustee. Movie Gallery returned to Chapter 11 protection on February 3, 2009 (Bankr. E.D. Va. Case No. 10-30696). Attorneys at Sonnenschein Nath & Rosenthal LLP and Kutak Rock LLP represent the Debtors in their second restructuring effort. Kurtzman Carson Consultants serves as claims and notice agent. About Blockbuster 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. MOVIE GALLERY: Canada Stores Safe from Bankruptcy ------------------------------------------------- Movie Gallery in Canada, which operates 184 video rental stores in Canada had clarified that it is safe from bankruptcy, the Daily Graphic reported. The Wilsonville, Oregon-based Movie Gallery in the United States filed for bankruptcy protection in the United States Bankruptcy Court for the Eastern District of Virginia last February 2. The company aims to close more than 800 of its 2,415 stores in the United States, but its Canadian affiliate remains safe as it is not part of the bankruptcy filing, the Daily Graphic said. About Movie Gallery Based in Wilsonville, Ore., Movie Gallery, Inc., is the second largest North American video and game rental company, operating stores in the U.S. and Canada under the Movie Gallery, Hollywood Video and Game Crazy brands. Movie Gallery first filed for Chapter 11 on October 16, 2007 (Bankr. E.D. Va. Case Nos. 07-33849 to 07-33853). Kirkland & Ellis LLP and Kutak Rock LLP represented the Debtors. The Company emerged from bankruptcy on May 20, 2008, with private-investment firms Sopris Capital Advisors LLC and Aspen Advisors LLC as its principal owners. William Kaye was appointed plan administrator and litigation trustee. Movie Gallery returned to Chapter 11 protection on February 3, 2009 (Bankr. E.D. Va. Case No. 10-30696). Attorneys at Sonnenschein Nath & Rosenthal LLP and Kutak Rock LLP represent the Debtors in their second restructuring effort. Kurtzman Carson Consultants serves as claims and notice agent. MOVIE GALLERY: Hires DJM as Real Estate Consultant -------------------------------------------------- Movie Gallery Inc. and its units sought and obtained the Court's authority to employ DJM Realty Services, LLC, as their Real Estate Consultant pursuant to the terms set forth in a Real Estate Consulting Agreement executed by the parties on December 23, 2009. The Debtors believe that DJM is both well qualified and uniquely able to provide real estate consulting services in the Debtors' Chapter 11 cases in an efficient and timely manner. As Real Estate Consultant, the Debtors expect DJM to render these services: (a) Cure Claims Related to Lease Properties. With respect to real property leases that are to be assumed, DJM may attempt to negotiate with relevant landlord for the waiver, release or negotiation of any potential cure claim. (b) Renegotiation of Leased Properties. With respect to the negotiation of certain leases, DJM will administer a rent renegotiation program and represent the Debtors in the negotiation of lease modification agreements for those Leased Properties designated by the Debtors. As part of the rent negotiation program, DJM's services may include, documenting all lease modification proposals and working with the Debtors to establish negotiating parameters, including rent deductions, lease term modifications and other leasehold concessions. At all times, the Debtors retain the complete discretion to reject any real estate proposal. The Debtors propose to pay DJM on these terms: (a) Lease Modifications. With respect to any Leased Properties for which DJM negotiates a modification of the monetary terms of the lease, including rent reductions, waivers of cure claims, elimination of percentage rent payments, reductions in term or size and reductions or limitations on extra charges, DJM will earn and be paid fees equal to 4.5% of the Total Occupancy Cost Savings. (b) Additional Services. With respect to any additional services DJM may provide at the Debtors' request, DJM will be compensated at the rate of $400 per hour, provided however, that DJM will provide the Debtors with an upfront written estimate of the total cost of any additional services, which written estimate must be expressly approved in writing by the Debtors. (c) Expense Reimbursement. Pursuant to the Retention Agreement, the Debtors will reimburse DJM for all transactional costs or legal expenses incurred in connection with the rendering of services, including pre- approved, reasonably incurred travel expenses. Similarly, the Court approved the Debtors' request to have DJM submit invoices to the Debtors for payment of professional services rendered and reimbursement of expenses incurred as the compensation becomes due and owing and as these expenses are incurred. Furthermore, the Debtors obtained the Court's approval of their request for immediate payment of DJM invoices, subject to the Debtors' review and ability to dispute, without any further order of the Court. Andrew B. Graiser, co-president of DJM, assures the Court that DJM has no connections with the Debtors, their parties-in- interest, their attorneys, or the U.S Trustee. A full-text copy of the Real Estate Consulting Agreement is available for free at: http://bankrupt.com/misc/MG_DJMretentionagrmnt.pdf About Movie Gallery Based in Wilsonville, Ore., Movie Gallery, Inc. is the second largest North American video and game rental company, operating stores in the U.S. and Canada under the Movie Gallery, Hollywood Video and Game Crazy brands. Movie Gallery first filed for Chapter 11 on Oct. 16, 2007 (Bankr. E.D. Va. Case Nos. 07-33849 to 07-33853). Kirkland & Ellis LLP and Kutak Rock LLP represented the Debtors. The Company emerged from bankruptcy on May 20, 2008, with private-investment firms Sopris Capital Advisors LLC and Aspen Advisors LLC as its principal owners. William Kaye was appointed plan administrator and litigation trustee. Movie Gallery returned to Chapter 11 protection on February 3, 2009 (Bankr. E.D. Va. Case No. 10-30696). Attorneys at Sonnenschein Nath & Rosenthal LLP and Kutak Rock LLP represent the Debtors in their second restructuring effort. Kurtzman Carson Consultants serves as claims and notice agent. MOVIE GALLERY: Wants Moelis as Financial Advisor ------------------------------------------------ Movie Gallery Inc. and its units seek the Court's authority to employ Moelis & Company LLC as their investment banker and financial advisor, nunc pro tunc to the Petition Date, in accordance with the terms and conditions set forth in an engagement letter that the Debtors and Moelis entered into on December 9, 2009. The Debtors intend to employ Moelis as investment banker and financial advisor because Moelis has extensive experience in this area as well as expansive knowledge of mergers and acquisitions, bank financings and capital restructurings. The Debtors believe that Moelis is qualified to assist them in this regard. The Debtors intend to pay Moelis on these terms: (a) Monthly Fee. During the term of the Engagement Letter, a cash fee of $150,000 per month. The Debtors paid the first Monthly Fee immediately upon the execution of the Engagement Letter and is required to pay each subsequent Monthly Fee in advance on each monthly anniversary of the parties' agreement commencing with the December 9, 2009, monthly anniversary. Whether or not a Restructuring, Sale or Capital Transaction has taken place or will take place, Moelis will earn and be paid the Monthly Fee every month during the term of its engagement. Fifty percent of the Monthly Fee will be offset, to the extent previously paid, against any Restructuring Fee. (b) Opinion Fee. In addition, the Debtors will upon delivery of an Opinion to the Board of Directors, will pay Moelis an opinion fee of $500,000. The Opinion Fee will be offset, to the extent previously paid, against any Restructuring Fee. (c) Restructuring Fee. In addition to the Monthly Fees, the Debtors will pay Moelis a cash fee of $4,500,000, unless the Debtors have previously paid Moelis the Sale Transaction Fee. The Debtors will pay the Restructuring Fee immediately upon the consummation of a Restructuring. (d) Capital Transaction Fee. In addition to the Monthly Fees, the Debtors will pay Moelis a cash fee in an amount equal to (i) 1.50% of the aggregate amount of new secured debt obligations or debtor-in-possession financing raised in a Capital Transaction, (ii) 3.0% of the aggregate amount of new unsecured debt obligations raised in a Capital Transaction, and (iii) 5.5% of the aggregate amount or face value new capital raised in a Capital Transaction in the form of equity, equity-linked securities, options, warrants or other rights to acquire equity interests of the Debtors. The Debtors will pay the Capital Transaction Fee in respect of each Capital Transaction in the event that more than one Capital Transaction will occur. (e) Sale Transaction Fee. In addition to the Monthly Fees, the Debtors will pay Moelis a cash fee of (i) $4,500,000 in the case of a Sale involving the sale of at least substantially all of the assets of, or at least a majority of the voting equity securities of, the Debtors, unless the Company has previously paid Moelis the Restructuring Fee in which case the $4,500,000 Sale Transaction Fee will not be payable, and (ii) in the case of any other Sale a market-based cash fee in an amount to be mutually agreed upon in good faith by the parties. The Sale Transaction Fee will be paid immediately upon the closing of the Sale. (f) Expenses. Whether or not any Restructuring, Sale or Capital Transaction is consummated, and in addition to any fees payable, to Moelis, the Debtors will reimburse Moelis for all reasonable expenses incurred by Moelis in connection with its performance of services. The Debtors will indemnify and hold harmless Moelis and certain related persons against any liabilities arising out of Moelis engagement in the Debtors' Chapter 11 cases. The Debtors will reimburse each indemnified party for certain related reasonable and documented expenses, except for any liability which is finally judicially determined by Court to have resulted primarily from the willful misconduct, bad faith or negligence of Moelis or certain related persons. William Q. Derrough, a managing director of Moelis, assures the Court that Moelis does not hold interest materially adverse to the Debtors or their estates. Furthermore, Moelis is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code, Mr. Derrough states. The Court will convene a hearing to consider the application on February 22, 2010, at 10:00 a.m. Objections are due February 18. About Movie Gallery Based in Wilsonville, Ore., Movie Gallery, Inc. is the second largest North American video and game rental company, operating stores in the U.S. and Canada under the Movie Gallery, Hollywood Video and Game Crazy brands. Movie Gallery first filed for Chapter 11 on Oct. 16, 2007 (Bankr. E.D. Va. Case Nos. 07-33849 to 07-33853). Kirkland & Ellis LLP and Kutak Rock LLP represented the Debtors. The Company emerged from bankruptcy on May 20, 2008, with private-investment firms Sopris Capital Advisors LLC and Aspen Advisors LLC as its principal owners. William Kaye was appointed plan administrator and litigation trustee. Movie Gallery returned to Chapter 11 protection on February 3, 2009 (Bankr. E.D. Va. Case No. 10-30696). Attorneys at Sonnenschein Nath & Rosenthal LLP and Kutak Rock LLP represent the Debtors in their second restructuring effort. Kurtzman Carson Consultants serves as claims and notice agent. MPI AZALEA: Can Hire Berger Singerman as Bankruptcy Counsel ----------------------------------------------------------- The Hon. Margaret H. Murphy of the U.S. Bankruptcy Court for the Northern District of Georgia authorized MPI Azalea, LLC, and its debtor-affiliates to employ Berger Singerman, P.A. as counsel, subject to the objection of the U.S. Trustee on or before 20 days from the date of entry of the order. The order was issued on February 2, 2010. To the best of the Debtors' knowledge, Berger Singerman is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Atlanta, Georgia-based MPI Azalea, LLC, aka Highland Brooke Apartments and its affiliates filed for Chapter 11 on January 8, 2010 (Bankr. N.D. Ga. Lead Case No. 09-60803). Jimmy C. Luke, Esq., at Foltz Martin, LLC assists the Debtor in its restructuring effort. In its petition, the Debtor listed assets and liabilities both ranging from $10,000,001 to $50,000,000. MT. ZION URBAN RENEWAL: Case Summary & 7 Largest Unsec. Creditors ----------------------------------------------------------------- Debtor: Mt. Zion Urban Renewal 131 Perry St. Trenton, NJ 08618 Bankruptcy Case No.: 10-15097 Chapter 11 Petition Date: February 23, 2010 Court: United States Bankruptcy Court District of New Jersey (Trenton) Debtor's Counsel: Frank Armenante, Esq. Malsbury & Armenante, Esqs. 12 N. Main Street PO Box 157 Allentown, NJ 08501 Tel: (609) 259-7944 Fax: (609) 259-0872 Email: frankp@malsarmlaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 According to the schedules, the Company has assets of $1,200,000, and total debts of $2,064,570. A full-text copy of the Debtor's petition, including a list of its 7 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/njb10-15097.pdf The petition was signed by James S. Justice, president of the Company. NATURAL PRODUCTS: Set to Emerge from Bankruptcy ----------------------------------------------- Natural Products Group LLC is set to emerge from Chapter 11 after it has received confirmation of its pre-packaged reorganization plan, ABI reports. According to the explanatory disclosure statement, the Plan provides for these terms: * Corporate Restructuring. On or prior to the closing of the Restructuring, NPG will be converted from a Delaware limited liability company to a Delaware corporation that will serve as the ultimate parent of the Company after the Restructuring. If the Restructuring is effected through the Plan, this will be implemented through federal bankruptcy law and appropriate filings pursuant to the Delaware General Corporation Law. If the Restructuring is effected through the Out-of-Court Transaction, this conversion will be accomplished through a merger of NPG with a newly-formed Delaware corporation. Additionally, the two current direct subsidiaries of NPG, Arbonne Intermediate Holdco, Inc. ("Arbonne HoldCo") and Levlad Intermediate Holdco, Inc. ("Levlad HoldCo"), will merge with each other, with Arbonne HoldCo surviving the merger (the "Levlad Merger"). Arbonne HoldCo following the Levlad Merger will be referred as "New HoldCo". New NPG will be the sole stockholder of New HoldCo which, in turn, will continue to own directly Arbonne International, LLC ("Arbonne") and Levlad, LLC ("Levlad"). * OpCo Debt. All of the outstanding debt under that certain Credit Agreement, dated as of March 8, 2007, by and among Arbonne and Levlad, as borrowers, Arbonne HoldCo and Levlad HoldCo, as guarantors, and the several lenders from time to time party thereto (the "OpCo Lenders"), Canadian Imperial Bank of Commerce as administrative agent and collateral agent, CIBC World Markets Corp. and Credit Suisse Securities (USA) LLC as joint lead arrangers and joint bookrunners, Credit Suisse as syndication agent, and Freeport Financial LLC and General Electric Capital Corporation as codocumentation agents, on the other hand, would be fully satisfied and restructured. -- An aggregate of $125 million of the existing OpCo Debt would be reinstated as a new term loan by and among Arbonne and Levlad as borrowers, and the existing OpCo Lenders. Each OpCo Lender would participate on a pro rata basis in the Reinstated OpCo Term Loan. -- In full satisfaction of the OpCo Debt not reinstated pursuant to the Reinstated OpCo Term Loan, New NPG will issue to each OpCo Lender its pro rata share of 85% of the common stock of New NPG to be issued upon the Effective Date, subject to dilution for (i) New NPG Common Stock issuable upon the exercise of the New NPG Warrants, (ii) New NPG Common ii Stock issuable upon the exercise of any New NPG Options that may be issued under the Long Term Management Incentive Plan (up to an additional 7.5% of the New NPG Common Stock, on a fully diluted basis), and (iii) any additional New NPG Common Stock that may be awarded in accordance with the Long Term Management Incentive Plan. * HoldCo Debt. All of the outstanding debt under the HoldCo Credit Agreement, dated as of June 19, 2006, by and among Arbonne HoldCo and Levlad HoldCo, as borrowers, and the several lenders from time to time party thereto (the "HoldCo Lenders"), Wilmington Trust FSB, as successor in interest to Credit Suisse, New York Branch as administrative agent, Credit Suisse Securities (USA) LLC and CIBC World Markets Corp. as joint lead arrangers and joint bookrunners, CIBC World Markets Corp. as syndication agent, and CitiCorp North America, Inc. and UBS Securities LLC, as codocumentation agents, will be fully satisfied: -- New NPG will issue to each HoldCo Lender its pro rata share of warrants that will entitle the holders thereof to purchase New NPG Common Stock equal to an aggregate of 5% of the New NPG Common Stock, subject to dilution for (i) New NPG Common Stock issuable upon the exercise of any New NPG Options that may be issued under the Long Term Management Incentive Plan (up to an additional 7.5% of the New NPG Common Stock, on a fully diluted basis), and (ii) any additional New NPG Common Stock that may be awarded in accordance with the Long Term Management Incentive Plan. -- The New NPG Warrants will have an aggregate cash exercise price equal to the sum of 100% of the principal amount of the OpCo Debt plus accrued interest thereon as of the closing date of the Restructuring, plus the principal, interest, fees and expenses outstanding under the New Term Loan as of the closing date of the Restructuring. The aggregate cash exercise price of the New NPG Warrants will be allocated among all HoldCo Lenders on a pro rata basis * In connection with the Restructuring, each OpCo Lender will be entitled to participate in providing to Arbonne and Levlad a new senior secured debtor-in-possession facility (in the event of a prepackaged chapter 11 filing) or new term loan (in the event of the Out-of-Court Transaction) in an initial amount of $10 million, which shall be drawn on the effective date of such facility, with the option of the borrowers to borrow up to an additional $10 million at any time prior to June 30, 2010 in one subsequent draw upon the satisfaction of certain conditions. If the Restructuring is effected pursuant to a chapter 11 filing, the debtorin- possession facility would automatically become a term loan under an exit lending facility on the Effective Date. If the Restructuring is effected as an Out-of-Court Transaction, there will be no debtor-in-possession facility because it will be unnecessary. Instead, the New Term Loan would be implemented consensually at the closing of the Restructuring. Except with respect to the debtor-in-possession facility, the New Term Loan will be part of a single facility that will include the New Term Loan and the Reinstated OpCo Term Loan. In consideration for providing the commitment in respect of the New Term Loan, each lender under the New Term Loan portion of the Exit Facility will receive its pro rata share of 10% of the New NPG Common Stock to be issued on the Effective Date, subject to dilution for (i) New NPG Common Stock issuable upon the exercise of the New NPG Warrants, (ii) New NPG Common Stock issuable upon the exercise of any New NPG Options that may be issued under the Long Term Management Incentive Plan (up to an additional 7.5% of the New NPG Common Stock, on a fully diluted basis), and (iii) any additional New NPG Common Stock that may be awarded in accordance with the Long Term Management Incentive Plan. About Natural Products Wilmington, Delaware-based Natural Products Group, LLC, filed for Chapter 11 bankruptcy protection on January 27, 2010 (Bankr. D. Delaware Case No. 10-10239). Eric Michael Sutty, Esq.; Jeffrey M. Schlerf, Esq.; and John H. Strock, III, Esq., at Fox Rothschild LLP, assist the Company in its restructuring effort. The Company listed $100,000,001 to $500,000,000 in assets and $500,000,001 to $1,000,000,000 in liabilities. The Company's affiliates -- Arbonne Intermerdiate Holdco, Inc.; Levlad Intermediate Holdco, Inc.; Arbonne International, LLC; Levlad, LLC; Arbonne Institute of Research and Development, LLC; Arbonne International Holdings, Inc.; and Arbonne International Distribution, Inc. -- filed separate Chapter 11 bankruptcy petitions. NAVISTAR INTERNATIONAL: Elects Richard Tarapchak as Vice President ------------------------------------------------------------------ The Board of Directors of Navistar International Corporation determined to elect Richard C. Tarapchak to the position of Vice President and Corporate Controller, and in that capacity Mr. Tarapchak will serve as the Company's principal accounting officer. The effective date of Mr. Tarapchak's election to Vice President and Corporate Controller is March 11, 2010. Mr. Tarapchak, age 44, previously served as Vice President -- Strategic Initiatives of Navistar, Inc., the Company's principal operating subsidiary, since 2008. Mr. Tarapchak also served as Vice President -- Chief Financial Officer of the Truck Group of Navistar, Inc. from 2005 -- 2008, Director -- Corporate Financial Analysis of Navistar, Inc. from 2003 - 2005 and Director, Finance -- Operations of Navistar, Inc. from 2000 -- 2003. Mr. Tarapchak is a Certified Public Accountant and holds an MBA in Finance and Accounting from The Ohio State University. Mr. Tarapchak is not a party to any transaction with the Company or any of its subsidiaries in which he had a direct or indirect material interest requiring disclosure under this Item. In connection with Mr. Tarapchak's election as Vice President and Corporate Controller, the Compensation Committee of the Board of Directors of the Company approved, (i) an increase in his annual base salary to $320,000, (ii) an increase in his target annual bonus opportunity for fiscal 2010 to 55% of his salary and (iii) increased severance benefits under his Executive Severance Agreement and other benefits commensurate with his new position. For further information regarding the ESA, please refer to the Form of the Amended and Restated ESA as incorporated by reference as exhibit 10.97 to the Company's Annual Report on Form 10-K for the year ended October 31, 2009 filed with the Securities and Exchange Commission on December 21, 2009. Mr. Tarapchak will succeed John P. Waldron, who has served as the Company's Controller since September 2006. Mr. Waldron will be facilitating an effective transition of his responsibilities to Mr. Tarapchak through March 11, 2010 and will be leaving the Company shortly thereafter. About Navistar International Navistar International Corporation (NYSE: NAV) -- http://www.Navistar.com/-- is a holding company whose subsidiaries and affiliates subsidiaries produce International(R) brand commercial and military trucks, MaxxForce(R) brand diesel engines, IC Bus(TM) brand school and commercial buses, Monaco RV brands of recreational vehicles, and Workhorse(R) brand chassis for motor homes and step vans. It also is a private-label designer and manufacturer of diesel engines for the pickup truck, van and SUV markets. The company also provides truck and diesel engine parts and service. Another affiliate offers financing services. * * * According to the Troubled Company Reporter on Jan. 28, 2010, Standard & Poor's Ratings Services said it has revised its outlook on Navistar International Corp. and related entities to stable from negative and affirmed its 'BB-' corporate credit rating and other ratings. NEENAH ENTERPRISES: Taps Sidley Austin as Gen. Bankruptcy Counsel ----------------------------------------------------------------- Neenah Enterprises, Inc., et al., ask the U.S. Bankruptcy Court for the District of Delaware for permission to employ Sidley Austin LLP as general reorganization and bankruptcy counsel. Sidley, will, among other things: -- provide legal advice with respect to the Debtors' powera and duties as debtors-in-possession in the continued operation of their businesses; -- take all necessary action on behalf of the Debtors to protect and preserve the Debtors' estates, including prosecuting claims and causes of action on behalf of the Debtors, negotiating any and all litigation in which the Debtors are involved, and objecting to claims filed against the Debtors' estates; and -- prepare on behalf of the Debtors all necessary motions, answers, orders, reports, and other legal papers in connection with the administration of the Debtors' assets. In a separate application, the Debtors sought to retain Young, Conaway, Stargatt & Taylor as their Delaware bankruptcy counsel. The Debtors relate that Sidley and YCST will coordinate their efforts to prevent duplication of services. Larry J, Nyhan, a partner at Sidley, tells the Court that prepetition, Sidley received an $500,000 retainer. On February 2, 2010, the advanced retainer was increased to $225,000. As of the petition date, the amount of Sidley's unpaid fees exceeded the advance payment by $49,698. Sidley agreed to waive and forego the payment of its unpaid prepetition fees and expenses. Mr. Nyhan adds that the current hourly rates of Sidley's professionals and paraprofessionals range from $90 to $950. Mr. Nyhan assures the Court that Sidley is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The firms can be reached at: Sidley Austin LLP One South Dearborn Chicago, IL 60603 Tel: (312) 853-7000 Fax: (312) 853-7036 Young, Conaway, Stargatt & Taylor 1000 West Street, 17th Floor Wilmington, DE 19801 Tel: (302) 571-6600 The Debtors propose a hearing on their proposes counsels employment on March 9, 2010, at 1:00 p.m. (ET.) Objections, if any, are due on March 2, 2010. About Neenah Enterprises Headquartered in Neenah, Wisconsin, Neenah Enterprises, Inc. -- http://www.nfco.com/-- is the indirect parent holding company of Neenah Foundry Company. Neenah Foundry Company and its subsidiaries manufacture and market a wide range of iron castings and steel forgings for the heavy municipal market and selected segments of the industrial markets. Neenah is one of the largest independent foundry companies in the United States, with substantial market share in the municipal and various industrial markets for gray and ductile iron castings and forged steel products. The Company filed for Chapter 11 bankruptcy protection on February 3, 2010 (Bankr. D. Del. Case No. 10-10360). Edmon L. Morton, Esq., and Kenneth J. Enos, Esq., assist the Company in its restructuring effort. The Company had $286,611,000 in total assets against total liabilities of $449,435,000, resulting in stockholder's deficit of $162,824,000. The Company's affiliates -- NFC Castings, Inc.; Neenah Foundry Company; Cast Alloys, Inc.; Neenah Transport, Inc.; Advanced Cast Products, Inc.; Gregg Industries, Inc.; Mercer Forge Corporation; Deeter Foundry, Inc.; and Dalton Corporation -- filed separate Chapter 11 petitions. NISKA GAS: Moody's Assigns 'B1' Rating on $800 Mil. Senior Notes ----------------------------------------------------------------- Moody's Investors Service assigned a B1 rating to Niska Gas Storage's proposed private offering of $800 million of senior unsecured notes and a Baa3 rating to its new $400 million senior secured asset-based revolving credit facility. At the same time, Moody's affirmed the company's Ba3 Corporate Family Rating. The rating outlook is stable. The proceeds of the new notes issue will be used to repay existing term loan (~$593 million) and revolver debt (~$82 million) and to cover distributions to private equity funds affiliated with Riverstone Holdings -- Niska's private equity sponsor -- and other minority equity holders, and transaction fees. While total debt will increase by approximately $125 million, and $75 million of Niska's existing revolving debt will be replaced by longer maturity debt, the Ba3 rating accommodates this incremental leverage. The rating also factors in additional borrowings under the revolver that will be required to support the contango arbitrage business, but which will be mostly backed by purchased natural gas inventory. The CFR also assumes that Niska will convert to a Master Limited Partnership concurrent with an Initial Public Offering and will raise approximately $300 million to $400 million of equity. Equity proceeds will be primarily used to repay revolver borrowings, which will be made to fund a distribution to equity holders, and to fund future capex. Niska will have essentially the same debt burden at closing as it had at the end of the 2007 fiscal year, but will have greater cash flow support from expanded current storage capacity. Storage capacity has grown from 144 Bcf in 2006 to 186 Bcf, and is expected to grow to 212.5 Bcf over the next two years. Overall debt service cost will increase however, due to higher interest rates associated with the new notes. The company's high quality and strategically located assets, underlying contracted core revenue and earnings base, and increased borrowing capacity and less stringent financial covenants under the new revolver are solid supports for the ratings. Following its conversion to a publicly-traded MLP, the company will also have access to equity markets. However, the MLP business model requires ongoing high cash payouts and places greater emphasis on growth. This increases liquidity risk and reliance on external financing and leaves little room for market disruption. Niska as a new player in the MLP space, therefore, will need to carefully manage its distributions against growth capex and debt maturities. Although Niska's annual maintenance capex needs are nominal, and Niska is positioned to fund most of its capacity expansions in 2010 and 2011 from residual cash remaining from the notes and equity issuances, expansionary capital beyond 2011 will likely have to be sourced from external sources, which could lead to higher leverage and pressure the rating. Niska's Ba3 CFR is negatively impacted by the inherent volatility in seasonal and cyclical demand for natural gas storage and the resultant variability in a portion of its revenue; the heavy reliance on its riskier merchant energy arbitrage business; and the capital requirements and execution risk of its expansion projects. The rating is also restrained by highly variable working capital requirements and revenues related to the company's merchant energy and proprietary contango arbitrage business; the limited ability of depleted reservoir storage systems (versus salt dome storage) to augment earnings by meeting sharp surges in withdrawal demand; and the less frequent ability of depleted reservoir storage to turn over its storage per year (roughly 2x) versus salt dome storage (6x to 12x); and the re-contracting risk of Niska's storage contracts. The stable outlook reflects Niska's contracted term-storage business that provides revenue certainty, substantial storage capacity, and robust demand for natural gas storage in North America. Niska has adequate liquidity. Cash on hand combined with internally generated cash flow should be sufficient to cover interest payments, capital expenditures and distributions in 2010. At December 31, 2009, proforma for the closing of the notes issue, Niska would have no amounts drawn under the new $400 million borrowing-base revolving credit facility. Given that Niska primarily uses its borrowing base revolving credit facility to fund margin calls and cover contango inventory purchases, revolver borrowings can be volatile, and would increase significantly if Niska were to expand its trading and optimization operation or if natural gas prices rose sharply. The company may also need to rely on the revolver to cover growth capex or shareholder distributions if operating performance falls short of expectations. Assignments: Issuer: AECO Gas Storage Partnership -- Senior Secured Bank Credit Facility, Assigned 07 - LGD1 to Baa3 Issuer: Niska Gas Storage US, LLC -- Senior Unsecured Bank Credit Facility, Assigned 07 - LGD1 to Baa3 -- Senior Unsecured Regular Bond/Debenture, Assigned 63 - LGD4 to B1 -- Senior Unsecured Regular Bond/Debenture, Assigned B1 The last rating action on Niska was in April 2006 when we first rated the company and assigned a Ba3 CFR. Headquartered in Calgary, Alberta, with assets in Alberta, California and Oklahoma, Niska Gas Storage is the largest independent owner and operator of natural gas storage assets in North America. OCCUPATIONAL & MEDICAL: Chapter 15 Case Summary ----------------------------------------------- Chapter 15 Petitioner: David Stimpson, foreign representative Chapter 15 Debtor: Occupational & Medical Innovations Limited Unit 1, 12 Booran Drive Slacks Creek Brisbane,Queensland 4127 Australia Chapter 15 Case No.: 10-60181 Chapter 15 Petition Date: February 23, 2010 Court: Eastern District of Texas (Tyler) Chapter 15 Petitioner's Counsel: Bradley L. Drell, Esq. Gold, Weems, Bruser, Sues & Rundell P.O. Box 6118 Alexandria, LA 71307-6118 Tel: (318) 445-6471 Fax: (318) 445-6476 Email: bdrell@goldweems.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $100,000,001 to $500,000,000 ORLEANS HOMEBUIDLERS: Wants to Extend Maturity Date of Loan Deal ---------------------------------------------------------------- Orleans Homebuilders Inc. and its senior management have been working actively with the Company's bank lenders to obtain a maturity extension of its Second Amended and Restated Revolving Credit Loan Agreement dated Sept. 30, 2008, as amended from time- to-time. Any extension or similar modification or accommodation under the Credit Facility requires the consent of 100% of the approximately 17 bank lenders. However, the Company and its lenders under the Credit Facility were not able to obtain the necessary bank approvals to extend the maturity of the Credit Facility pursuant to the non-binding term sheet agreed to by the Company with certain lenders on Dec. 3, 2009. The Company and its lenders were also unable to agree on any temporary modification of, or other accommodation under, the Credit Facility. As a result, the final maturity of the Credit Facility occurred on Feb. 12, 2010, and the Company is now in default, which entitles the lenders to all rights available to senior secured creditors. The Company does not have sufficient funds to repay the amounts outstanding under the Credit Facility. The Company also noted that it was continuing to consider certain options for new or modified funding sources to continue normal operations, including in connection with an in-court or out-of-court restructuring of the Company's liabilities; continuing its negotiations regarding a sale or recapitalization of the Company; or obtaining a temporary modification of, or other accommodation under, the Credit Facility. However, there can be no assurance that the Company will be able to consummate any transaction on terms acceptable to it or the senior secured lenders, or that any such transaction would provide any value for either the Company's unsecured creditors or its equity holders. The Company intends to act promptly to resolve its financing issues, although there can be no assurance that the Company will be able to do so at all or on a timely basis. About Orleans Homebuilders Based in Bensalem, Pa., Orleans Homebuilders, Inc. (Amex: OHB) -- http://www.orleanshomes.com/-- develops, builds and markets single-family homes, townhouses and condominiums. The Company currently operates in the following eleven distinct markets: Southeastern Pennsylvania; Central and Southern New Jersey; Orange County, New York; Charlotte, Raleigh and Greensboro, North Carolina; Richmond and Tidewater, Virginia; Chicago, Illinois; and Orlando, Florida. The Company's Charlotte, North Carolina operations also include adjacent counties in South Carolina. * * * As reported in the Troubled Company Reporter on February 22, 2010, the Company is now in default under the Second Amended and Restated Revolving Credit Loan Agreement dated September 30, 2008. On February 17, 2010, the Company received a notice of default from Wachovia Bank, National Association, Wachovia Bank, National Association, in its as Administrative Agent under the credit facility. OSCIENT PHARMA: Guardian Unsecureds Has 0% Recovery Under the Plan ------------------------------------------------------------------ The Hon. Henry J. Boroff of the U.S. Bankruptcy Court for the District of Massachusetts will consider at a hearing on April 2, 2010, at 10:30 a.m., the adequacy of the proposed disclosure statement of Oscient Pharmaceuticals Corporation and Guardian II Acquisition Corporation for their Plan of Reorganization. The hearing will be held at the U.S. Courthouse, 300 State Street, Berkshire Courtroom, Third Floor, Springfield, Massachusetts. 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 provides the liquidation of the Debtors' estates and the distribution of their remaining assets to holders of allowed claims. The Plan also effects settlement between Oscient, Guardian, and Paul Royalty Fund Holdings II, an affiliate of Paul Capital Partners, and a settlement between Oscient, Guardian and Abbott Laboratories. Under the Plan, Oscient unsecured creditors will receive, on the effective date, a pro rata share of the Oscient Trust interests. Projected recovery under the Plan is 18.9% on claims aggregating $91.3 million. Holders of Guardian unsecured claims will not recover anything on account of their claims aggregating $97.3 million. A full-text copy of the Disclosure Statement is available for free at http://bankrupt.com/misc/OscientPharma_DS.pdf Based in Waltham, Massachusetts, Oscient Pharmaceuticals Corporation -- http://www.antararx.com/and http://www.factive.com/-- and its wholly owned subsidiary, Guardian II Acquisition Corporation, sell two products, ANTARA (fenofibrate) capsules, which is a cardiovascular product indicated for the adjunct treatment of hypercholesterolemia (high blood cholesterol) and hypertriglyceridemia (high triglycerides) in combination with diet, and FACTIVE (gemifloxacin mesylate) tablets, which is a fluoroquinolone antibiotic indicated for the treatment of acute bacterial exacerbations of chronic bronchitis and community-acquired pneumonia of mild to moderate severity. As of December 31, 2008, the Debtors' audited consolidated financial statements reflected total assets of $174.0 million and total liabilities of $255.2 million. Oscient Pharmaceuticals Corporation together with an affiliate filed for Chapter 11 on July 13, 2009 (Bankr. D. Mass. Case No. 09-16576). Judge Henry J. Boroff presides over the case. Charles A. Dale III, Esq., at K&L Gates LLP, represents the Debtors. The Debtors also hired Ropes & Gray LLP as special litigation counsel, and Broadpoint Capital Inc. as financial advisor. OSHKOSH CORP: Moody's Rates $500 Mil. Senior Notes at 'B3' ---------------------------------------------------------- Moody's Investors Service has rated Oshkosh Corporation's proposed $500 million senior unsecured notes B3 (LGD5, 88%) and upgraded the company's 1st lien senior secured credit facility comprised of a $550 million revolver and $1.9 billion Term loan B to Ba3 from B1. The company's SGL-1 liquidity rating was affirmed. The company's ratings outlook remains stable. The new $500 million senior unsecured notes are being issued in two roughly equal increments with one maturing in 2017 and the other in 2020. The notes will be guaranteed on a senior unsecured basis and rank pari passu with all of the company's senior unsecured debt. The notes will be redeemable on an optional basis as of 2014 and 2015, respectively. The upgrade of the first lien facility reflects the additional support provided in the event of bankruptcy by the addition of the senior unsecured notes that are subordinated to the first lien facility. Furthermore, as the company implements its strategy to reduce its leverage, Moody's anticipates that first lien debt position will be reduced and will comprise a lower percent of the company's overall capital structure. The stable ratings outlook considers the strengthening of the company's credit metrics as a result of the contract to produce MRAP-All Terrain Vehicles for the Afghanistan war, balanced against the continued weak performance of the company's other businesses during 2010. The company's non-defense businesses are expected to strengthen in 2011 as the economy improves. We therefore currently expect that the company's credit quality is likely to stabilize at a level that is consistent with the B1 ratings category after the M-ATV business winds down. This view is supported by the way in which the natural equipment replacement cycle of access equipment should support demand within the next couple of years even if demand from new projects does not grow meaningfully. The ratings and/or outlook could be negatively affected if the company were unable to meet its commitments to produce the M-ATV as contracted or at the profitability level anticipated by Moody's. If the company's other businesses are still weak at the time the M-ATV contract winds down, the ratings outlook could come under pressure. A reduction in free cash flow to total debt below 5% would create rating pressure as would EBITDA to interest below 2.5 times. The rating would benefit from a meaningful and sustainable improvement in the company's access equipment business (JLG) given the size of the business. A reduction in leverage to under three times that was deemed to be sustainable and improving would also provide upward rating traction. The last ratings action was February 3, 2010, when Moody's upgraded the corporate family rating and probability of default rating for Oshkosh Corporation -- to B1 from B2 and changed the ratings outlook to stable. The SGL rating was upgraded to SGL-1 from SGL-3. Upgrades: Issuer: Oshkosh Corporation -- Senior Secured Bank Credit Facility, Upgraded to Ba3 (LGD3, 41%) from B1 (LGD4, 50%) Assignments: Issuer: Oshkosh Corporation -- Approximately $250 million senior unsecured notes due 2017 rated B3 (LGD5, 88%) -- Approximately $250 million senior unsecured notes due 2020 rated B3 (LGD5, 88%) The ratings outlook is stable. Oshkosh Corporation is a leading designer, manufacturer and marketer of a broad range of specialty vehicles and vehicle bodies. The company operates in four segments: access equipment, defense, fire & emergency, and commercial. Oshkosh's JLG subsidiary is the world's leading producer of access equipment including aerial work platforms and telehandlers. Revenues for the fiscal year ended September 30, 2009, totaled $5.3 billion. OSHKOSH CORP: S&P Assigns 'B-' Rating on $500 Mil. Senior Notes --------------------------------------------------------------- Standard & Poor's Ratings Services assigned a 'B-' issue-level rating to Oshkosh Corp.'s proposed new $500 million senior unsecured notes. S&P also assigned a recovery rating of '6' to this debt, indicating its expectation of negligible (0%-10%) recovery in a payment default scenario. In addition, S&P placed the senior secured debt issues on CreditWatch with positive implications. "The company announced it will attempt to raise $500 million in senior unsecured notes and that it will use the proceeds to prepay term loan debt," said Standard & Poor's credit analyst Dan Picciotto. "The repayment would represent a repayment of about 30% of outstanding senior secured debt," he continued. S&P also placed the senior secured debt on CreditWatch with positive implications because of expected improvement in recovery prospects following the completion of the notes deal and subsequent prepayment of term loan debt. S&P expects to raise the ratings on the company's secured debt following the transaction, and to revise the recovery rating to '1', indicating its expectation of very high (90%-100%) recovery in a payment default scenario, from '2'. The outlook is positive. While most of Oshkosh's industrial end markets remain weak, S&P expects the company's defense segment should support overall results. S&P could raise the ratings if S&P expects industrial end markets to improve next year as the defense segments' Mine-Resistant Ambush Protected (M-ATV)-related profits decline, resulting in credit measures consistent with its expectations. For instance, if the company appears likely to maintain credit measures of less than 4x adjusted debt to EBITDA and more than 15% funds from operations to adjusted debt, S&P could raise the ratings. Alternatively, S&P could revise the outlook to stable if a prolonged downturn or debt-financed acquisition results in weaker credit measures. For instance, if the company does not make further meaningful debt repayments and EBITDA declines to less than $450 million in 2011, adjusted debt to EBITDA would increase to more than 4x, which could result in an outlook revision to stable. PECAN TERRACE: Case Summary & 2 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Pecan Terrace, LLC. P.O. Box 814 Cordele, GA 31010 Bankruptcy Case No.: 10-10322 Chapter 11 Petition Date: February 23, 2010 Court: United States Bankruptcy Court Middle District of Georgia (Albany) Debtor's Counsel: Robert L. Kraselsky, Esq. P.O. Box 71702 Albany, GA 31708-1702 Tel: (229) 438-7373 Email: rlk@rlkpclaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 According to the schedules, the Company has assets of $1,874,797, and total debts of $1,962,999. A full-text copy of the Debtor's petition, including a list of its 2 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/gamb10-10322.pdf The petition was signed by Robert D. McCadams, operating manager of the Company. PENN TRAFFIC: Wants Plan Exclusivity Until June 16 -------------------------------------------------- Bill Rochelle at Bloomberg News reports that Penn Traffic Co. is asking for an extension of the exclusive right to propose a Chapter 11 plan until June 16. The hearing on the exclusivity motion will take place March 3. Tops Markets acquired substantially all of the assets of Penn Traffic for $85 million. It also agreed to take on another $70 million in related costs. 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. PETROFLOW ENERGY: Has Forbearance Agreement Until March 7 --------------------------------------------------------- Petroflow Energy Ltd. has entered into a forbearance agreement with its banking syndicate in connection with certain events of defaults under its amended and restated credit agreement, as amended. Under terms of the forbearance agreement the Company has agreed to increase the interest rate on its Tranche A and Tranche C loans to 7.5% per annum. The forbearance agreement also requires that the Company start making monthly principal reductions payments in the amount of $1 million per month commencing immediately. In connection with the forbearance agreement, the Company entered into additional security agreements related to additional collateral required by the lenders. The Company currently has $106 million outstanding under its Credit Facility with a borrowing base deficiency of $31 million. The forbearance period expires on March 7, 2010, provided that if the Company has entered into a purchase and sale agreement to sell its Oklahoma oil and gas properties by March 7, then the forbearance period is extended until May 1, 2010. The forbearance period will automatically terminate, and the lenders may accelerate all amounts under the Credit Facility upon the occurrence of any further defaults under the forbearance agreement or the Credit Facility. There can be no assurance that the Company will be able to negotiate an amendment to the Credit Facility or additional forbearances, that such amendment or forbearances will be on terms acceptable to the Company, or that the Company will be able to complete any of the strategic alternatives on satisfactory terms, or at all. The failure of the Company to remedy existing defaults under the Credit Facility may impair the Company's operations and future prospects. PINE VALLEY COUNTRY: Case Summary & 16 Largest Unsecured Creditors ------------------------------------------------------------------ Debtor: Pine Valley Country Club, Inc 9529 Wessex Place Louisville, KY 40222 Bankruptcy Case No.: 10-30877 Chapter 11 Petition Date: February 23, 2010 Court: United States Bankruptcy Court Western District of Kentucky (Louisville) Debtor's Counsel: Christopher T. Kurtz, Esq. Kurtz and Kurtz Attorneys 2721 Taylorsville Road Louisville, KY 40205 Tel: 423-0846 Fax: 423-8131 Email: ctkkurtz@aol.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A full-text copy of the Debtor's petition, including a list of its 16 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/kywb10-30877.pdf The petition was signed by Jack P. Ridge, president of the Company. PPI PET PRODUCTS: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: PPI Pet Products, Inc. fka Purbeck Isle, Inc. fka P & P Pet Food Distributors 200 Millenium Drive Lakeville, MA 02347 Bankruptcy Case No.: 10-11745 Chapter 11 Petition Date: February 23, 2010 Court: United States Bankruptcy Court District of Massachusetts (Boston) Judge: Henry J. Boroff Debtor's Counsel: Alan L. Braunstein, Esq. Riemer & Braunstein, LLP Three Center Plaza Boston, MA 02108 Tel: (617) 880-3516 Email: abraunstein@riemerlaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's 20 largest unsecured creditors is available for free at: http://bankrupt.com/misc/mab10-11745.pdf The petition was signed by David Hinson, president of the company. QUEBECOR WORLD: Angelo Gordon Acquires World Color Securities ------------------------------------------------------------- Angelo, Gordon & Co., L.P. in connection with the recently completed restructuring of World Color Press Inc. (formerly Quebecor World Inc.) ("WCP") and subsequent market transactions, it has acquired, through various investment funds under its management, an aggregate of 6,230,545 common shares, 981,042 Class A convertible preferred shares ("Preferred Shares") and warrants to acquire 945,344 Common Shares of WCP ("Warrants"). Assuming the conversion of all the Preferred Shares and the exercise of all of the Warrants held by Angelo Gordon, the aggregate percentage of the WCP Common Shares held is approximately 10.85% of the Common Shares that would then be outstanding. Angelo, Gordon acquired its Common Shares, Preferred Shares and Warrants pursuant to (i) the terms of plans of reorganization for WCP that were approved by the Quebec Superior Court and the U.S. Bankruptcy Court for the Southern District of New York on June 30, 2009 (the "Plan"), and (ii) open market transactions on the Toronto Stock Exchange occurring after the Plan. Immediately prior to the reorganization, investment funds managed by Angelo, Gordon held certain indebtedness of WCP which was exchanged for Common Shares, Preferred Shares and Warrants in connection with the implementation of the Plan. Angelo, Gordon has acquired these securities in the ordinary course of business and not with the purpose of influencing the control or direction of WCP. Depending on market and other conditions, Angelo, Gordon may, from time to time, increase or decrease its ownership, control or direction over the Common Shares, Preferred Shares, Warrants or other securities of WCP. About Quebecor World Based in Montreal, Quebec, Quebecor World Inc. (CA:IQW) -- http://www.quebecorworldinc.com/-- provides market solutions, including marketing and advertising activities, well as print solutions to retailers, branded goods companies, catalogers and to publishers of magazines, books and other printed media. It has 127 printing and related facilities located in North America, Europe, Latin America and Asia. In the United States, it has 82 facilities in 30 states, and is engaged in the printing of books, magazines, directories, retail inserts, catalogs and direct mail. The company has operations in Mexico, Brazil, Colombia, Chile, Peru, Argentina, and the British Virgin Islands. Ernst & Young, Inc., the monitor of Quebecor World Inc., and its affiliates' reorganization proceedings under the Canadian Companies' Creditors Arrangement Act, filed a petition under Chapter 15 of the Bankruptcy Code before the U.S. Bankruptcy Court for the Southern District of New York on September 30, 2008, on behalf of QWI (Bankr. S.D.N.Y. Case No. 08-13814). The Chapter 15 case is before Judge James M. Peck. Kenneth P. Coleman, Esq., at Allen & Overy LLP, in New York, serves as counsel to the Chapter 15 petitioner. QWI and certain of its subsidiaries commenced the CCAA proceedings before the Quebec Superior Court (Commercial Division) on January 20, 2008. The following day, 53 of QWI's U.S. subsidiaries, including Quebecor World (USA), Inc., filed petitions under Chapter 11 of the U.S. Bankruptcy Code. The Honorable Justice Robert Mongeon oversees the CCAA case. Francois-David Pare, Esq., at Ogilvy Renault, LLP, represents the Company in the CCAA case. Ernst & Young Inc. was appointed as Monitor. Quebecor World (USA) Inc., its U.S. subsidiary, along with other U.S. affiliates, filed for Chapter 11 bankruptcy before the U.S. Bankruptcy Court for the Southern District of New York (Lead Case No. 08-10152). Anthony D. Boccanfuso, Esq., at Arnold & Porter LLP, represents the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors is represented by Akin Gump Strauss Hauer & Feld LLP. Based in Corby, Northamptonshire, Quebecor World PLC -- http://www.quebecorworldplc.com/-- is the U.K. subsidiary of Quebecor World Inc. that specializes in web offset magazines, catalogues and specialty print products for marketing and advertising campaigns. The Company employs around 290 people. Quebecor PLC was placed into administration with Ian Best and David Duggins of Ernst & Young LLP appointed as joint administrators effective January 28, 2008. QWI is the only entity involved in the CCAA proceedings that is not a Debtor in the Chapter 11 Cases. As of June 30, 2008, Quebecor World's unaudited consolidated balance sheet showed total assets of US$3,412,100,000 total liabilities of US$4,326,500,000 preferred shares of US$62,000,000 and total shareholders' deficit of US$976,400,000. On June 30, 2009, Judge Peck and the Honorable Judge Robert Mongeon of the Quebec Superior Court of Justice, in a joint hearing, approved the plan of compromise filed by Quebecor World Inc. and its affiliates in their cases before the Canadian Companies' Creditors Arrangement Act and the Chapter 11 plan of reorganization filed by Quebecor World (USA), Inc., and its debtor affiliates in the U.S. Bankruptcy Court. On July 21, 2009, Quebecor World Inc. and its affiliated debtors and debtors-in-possession emerged from protection under the Companies' Creditors Arrangement Act in Canada and Chapter 11 of the U.S. Bankruptcy Code. Quebecor World emerged from bankruptcy as World Color Press Inc." RANCHER ENERGY: Posts $14.9 Million Net Loss in Q3 Ended Dec. 31 ---------------------------------------------------------------- Rancher Energy Corp. reported a net loss of $14,884,921, or $0.12 per basic and fully-diluted share, for the three months ended December 31, 2009, compared to a net loss of $33,429,758, or $0.29 per basic and fully-diluted share, for the corresponding three months of 2008. For the three months ended December 31, 2009, the Company recorded crude oil sales of $970,502 on 14,484 barrels of oil at an average price of $67.01, as compared to revenues of $746,967 on 16,997 barrels of oil at an average price of $43.95 per barrel in 2008. The decreased volume in 2009 reflects the loss of several producing wells due to mechanical problems in late 2008 and early 2009, coupled with routine production decline from year to year. Following the bankruptcy filing and reaching agreement with its secured lender for the use of cash collateral the Company has begun efforts to stop the production decline by repairing wells and surface facilities that had been offline due to lack of available capital. The Company recognized $13,525,642 and $32,500,000 of impairment of unproved properties during the three months ended December 31, 2009, and 2008, respectively. Reorganization expenses totaled $158,727 for the three months ended December 31, 2009. These costs consist primarily of professional fees to legal counsel for assistance with the filing process and the development of a reorganization plan. Nine Months Results For the nine months ended December 31, 2009, the Company reported a net loss of $19,060,343, or $0.16 per basic and fully-diluted share, compared to a net loss of $44,646,638, or $0.29 per basic and fully-diluted share, for the corresponding nine months of 2008. For the nine months ended December 31, 2009, the Company recorded crude oil sales of $2,498,376 on 41,477 barrels of oil at an average price of $60.24, as compared to revenues of $4,641,836 on 51,239 barrels of oil at an average price of $90.59 per barrel in 2008. Balance Sheet At December 31, 2009, the Company's balance sheets showed total assets of $18,858,906, total liabilities of $13,703,552, and total stockholders' equity of $5,155,354. The Company's balance sheets at December 31, 2009, also showed strained liquidity with $956,369 in total current assets available to pay $11,142,825 in total current liabilities. A full-text copy of the Company's quarterly report is available for free at http://researcharchives.com/t/s?54b7 Bankruptcy Filing On October 15, 2009, short term debt in the amount of approximately $10,188,000 matured. The Company was unable to repay the short term debt. On October 16, 2009, the Company received a default notice from the Lender, GasRock Capital LLC, and notice of their intent to foreclose on the properties securing the debt. On October 21, 2009, GasRock swept the remaining $98,000 from the Company's operating bank account, leaving the Company without the ability to meet operating expense obligations, or pay staff or other administrative expenses. On October 27, 2009, the Company raised $140,000 in cash through the issuance of convertible promissory notes to certain of its officers, directors and shareholders and used the funds to retain counsel to provide debtor advice and to provide working capital. The promissory notes mature on November 1, 2010. All obligations and payments due under the promissory notes are subordinate to the Company's senior debt. Principal and accrued interest are due on the maturity date. The promissory notes are convertible, at the holder's option, into shares of the Company's common stock at a conversion price of $0.02 per share, at any time during the term of the promissory notes. On October 28, 2009, the Company filed a voluntary petition for relief in the U.S. Bankruptcy Court for the District of Colorado under Chapter 11 of the Bankruptcy Code. A March 5, 2010 deadline for the filing of proofs of claim under the Bankruptcy Code has been established by the Bankruptcy Court. The Company is currently holding discussions with a number of potential DIP financing sources and is developing its restructuring plans should such financing be successful. There is no assurance the Company's efforts to raise DIP financing will be successful or that the restructuring plans will enable the Company to emerge from bankruptcy. About Rancher Energy Rancher Energy Corp. (OTC BB: RNCHQ) -- http://www.rancherenergy.com/--is AN independent energy company that explores for and develops produces, and markets oil and gas in North America. The Company operates three oil fields in the Powder River Basin, Wyoming. The Company was formerly known as Metalex Resources, Inc. and changed its name to Rancher Energy Corp. in 2006. Rancher Energy Corp. was incorporated in the State of Nevada on February 4, 2004, and is headquartered in Denver, Colorado. Rancher Energy filed for Chapter 11 bankruptcy protection on October 28, 2009 (Bankr. D. Colo. Case No. 09-32943). Herbert A. Delap, Esq., who has an office in Denver, Colorado, assists the Debtor 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. RAYMOND READY MIX: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Raymond Ready Mix Inc. PO Box 336 Hatillo, PR 00659-0336 Bankruptcy Case No.: 10-01256 Chapter 11 Petition Date: February 23, 2010 Court: United States Bankruptcy Court District of Puerto Rico (Old San Juan) Debtor's Counsel: Wigberto Lugo Mender, Esq. Lugo Mender & Co Centro Internacional De Mercadeo Rd 165 Torre 1, Suite 501 Guaynabo, PR 00968 Tel: (787) 707-0404 Email: wlugo@lugomender.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A full-text copy of the Debtor's petition, including a list of its 20 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/prb10-01256.pdf The petition was signed by Ramon Jimenez Plumey, president of the Company. REDCORP VENTURES: Strategic Resource's Acquisition Bid Accepted --------------------------------------------------------------- Strategic Resource Acquisition Corporation's bid to acquire Redcorp Ventures Ltd. Portugal subsidiary Redcorp Empreendimentos Mineiros Unipessoal, Lda, pursuant to an asset sale process managed by the Trustee in bankruptcy of Redcorp, has been accepted and the transaction to acquire the shares of REM is being reviewed in accordance with Portuguese requirements. The acquisition is subject to a number of conditions, which may include approval by the Supreme Court of BC. Once the final purchase terms are completed, including restructuring intercompany debt in REM, a follow up press release announcing the final deal structure will be issued. The assets of the Acquisition include two exploration projects in Portugal covering gold prospects at the Vila de Rei concession and polymetallic massive sulphide mineralization at the 208 km2 Lagoa Salgada Concession. The Lagoa Salgada concession covers a partially defined massive sulphide deposit which was subject of a 43-101 compliant resource estimate prepared by Wardrop Engineering Inc. for Redcorp. Redcorp disclosed the estimate on August 21, 2007 and filed the technical report on SEDAR on October 1, 2007. The technical report estimated an inferred resource totalling 2,017,000 tonnes grading 0.35% copper, 4.83% lead, 5.13% zinc, 1.29 g/t gold and 85.35 g/t silver. The deposit remains open to expansion. In addition, Redcorp discovered a second polymetallic mineralized horizon on the Lagoa Salgada concession, at Rio de Moinhos, approximately 11 km southeast of the Lagoa Salgada deposit. Intercepts at Rio de Moinhos are interpreted to be lateral fringe mineralization of a separate massive sulphide zone. The Lagoa Salgada property is located at the northwest extension of the Iberian Pyrite belt, which hosts numerous past and current producing mines in both Spain and Portugal. Lagoa Salgada is located approximately 60 km northwest of the large Aljustrel mining complex and 80 km northwest of the producing Neves-Corvo mine of Lundin Mining. The major connecting highway to the Algarve and rail line for transporting mine concentrates pass adjacent to the Lagoa Salgada project. Gold mineralization at the Vila de Rei property in central Portugal occurs in persistent quartz vein systems up to 15m in width and in breccia zones associated with late granitic intrusives. The concession covers sites of Roman-era placer gold mining operations. The Qualified Person for SRA, as defined by National Instrument 43-101, is Terence Chandler, P.Geo, Executive Vice President, with more than 35 years experience in the minerals industry. Victor Wyprysky, President and Chief Executive Officer About SRA Strategic Resource Acquisition Corporation is a Toronto-based mineral development company, focused on acquisition and development of base and precious metal properties in Canada and in low-risk foreign locations. About Redcorp Ventures Redcorp Ventures Ltd. (CA:RDV) -- http://www.redcorp-ventures.com and http://www.redfern.bc.ca-- is a Vancouver, British Columbia- based mineral exploration and development company with active projects in British Columbia, Canada and Portugal. Redcorp and Redfern sought and were granted protection under the Companies' Creditors Arrangement Act by order of the Supreme Court of British Columbia on March 4, 2009. KPMG Inc. was appointed Monitor. REDDY ICE: Cuts Net Loss to $2 Million in 4th Quarter ----------------------------------------------------- Reddy Ice Holdings Inc. reported financial results for the fourth quarter and full year ended Dec. 31, 2009. Revenues for the fourth quarter of 2009 were $54.7 million, compared to $57.9 million in the same quarter of 2008. The Company's net loss was $2.0 million in the fourth quarter of 2009, compared to a net loss of $9.8 million in the same period of 2008. Net loss per share was $0.09 in the fourth quarter of 2009 compared to a net loss per share of $0.44 in the same period of 2008. Included in the fourth quarter 2009 results are a $5.0 million insurance recovery, net of costs, related to the ongoing antitrust investigations and related litigation and a $0.6 million net gain realized in connection with an acquisition. Included in the fourth quarter 2008 results were $3.6 million of costs related to the antitrust investigations and related litigation. Adjusted EBITDA, defined as earnings before interest, taxes, depreciation and amortization, and the effects of certain other items was $1.9 million in the fourth quarter of 2009 versus $2.0 million in the same period of 2008. Available Cash for the fourth quarter of 2009 was negative $3.4 million compared to negative $2.1 million in the same period of 2008. A discussion regarding the presentation of Adjusted EBITDA and Available Cash in this press release, including reconciliations of Adjusted EBITDA to EBITDA and net income and the calculation of Available Cash, is set forth below in the section titled, "SUPPLEMENTAL DISCLOSURE REGARDING NON-GAAP FINANCIAL INFORMATION." "Our fourth quarter results continued to be adversely impacted by general economic conditions and unfavorable weather patterns," commented Chairman of the Board, Chief Executive Officer and President Gilbert M. Cassagne. "However, we are continuing to pursue growth and efficiency opportunities and expect those efforts to contribute to our results in 2010." Revenues for the full year of 2009 were $312.3 million, compared to $329.3 million in 2008. The Company's net income was $4.2 million for the full year 2009, compared to a net loss of $120.4 million in 2008. Diluted net income per share was $0.19 for the full year 2009, compared to a net loss per share of $5.47 in 2008. Included in the full year 2009 results are a $0.9 million insurance recovery, net of costs, related to the ongoing antitrust investigations and related litigation and a $0.6 million net gain realized in connection with an acquisition. Included in the results for the full year 2008 are a gain of $17.0 million related to the termination of the merger agreement between the Company and affiliates of GSO Capital Partners LP on Jan. 31, 2008, a gain of $1.0 million related to the settlement of a property insurance claim, $15.5 million of costs related to the ongoing antitrust investigations and related civil litigation, $0.8 million of costs related to the GSO transaction and the related stockholder litigation and a non-cash charge of $149.9 million related to the impairment of assets in the third quarter. The non-cash asset impairment charge is comprised primarily of $149.7 million reduction in the value of the Company's goodwill recognized in the three months ended September 30, 2008. The evaluation of the Company's goodwill and resulting write-down was triggered by the decline in the Company's stock price during the three months ended Sep. 30, 2008. Adjusted EBITDA was $65.8 million for the full year of 2009 versus $68.5 million in 2008. Available Cash for the full year of 2009 was $28.7 million compared to $50.8 million in 2008. In the fourth quarter of 2009, one acquisition was completed with an aggregate acquisition cost of approximately $1.1 million. Annual revenues and Adjusted EBITDA associated with this acquisition were approximately $1.7 million and $0.4 million, respectively. The Company continues to evaluate acquisition opportunities as part of its ongoing acquisition strategy. A full-text copy of the Company press release explaining its fourth quarter and full year 2009 results is available for free at http://ResearchArchives.com/t/s?5496 Reddy Ice Holdings, Inc. -- http://www.reddyice.com/-- manufactures and distributes packaged ice in the United States. The company serves variety of customers in 31 states and the District of Columbia under the Reddy Ice brand name. Its principal product is ice packaged in seven to 50 pound bags, which it sells to a diversified customer base, including supermarkets, mass merchants and convenience stores. As of March 6, 2009, the company owned or operated 58 ice manufacturing facilities, 67 distribution centers and approximately 3,100 Ice Factories. * * * According to the Troubled Company Reporter on Feb. 23, 2010, Moody's Investors Service assigned a B1 rating to Reddy Ice Corporation's (a wholly owned subsidiary of Reddy Ice Holdings, Inc.) proposed $300 million first lien senior secured notes due 2015. The company plans to use proceeds from the first lien notes to refinance its existing $240 million senior secured term loan due 2012 and for general corporate purposes. RICHARD BLACK: Case Summary & 9 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Richard R. Black dba Quality Nuclear Medicine (Ohio registered trade name) 7340 Wharton Road Russell, OH 44072 Bankruptcy Case No.: 10-11305 Chapter 11 Petition Date: February 23, 2010 Court: United States Bankruptcy Court Northern District of Ohio (Cleveland) Judge: Pat E. Morgenstern-Clarren Debtor's Counsel: Scott H. Scharf, Esq. 30100 Chagrin Boulevard, Suite 250 Cleveland, OH 44124 Tel: (216) 514-2225 Fax: (216) 514-3142 Email: scharf@scharflegal.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 According to the schedules, the Company has assets of $1,471,450, and total debts of $3,573,389. A full-text copy of Mr. Black's petition, including a list of his 9 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/ohnb10-11305.pdf The petition was signed by Mr. Black. SAMUEL TILDEN: Voluntary Chapter 11 Case Summary ------------------------------------------------ Debtor: Samuel J. Tilden aka S.J. Tilden aka Sam J. Tilden 22 Castle Rock Rd Cody, WY 82414 Bankruptcy Case No.: 10-20160 Chapter 11 Petition Date: February 23, 2010 Court: United States Bankruptcy Court District of Wyoming (Cheyenne) Judge: Peter J. McNiff Debtor's Counsel: Paul Hunter, Esq. 2616 Central Avenue Cheyenne, WY 82001 Tel: (307) 637-0212 Email: attypaulhunter@prodigy.net Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of its 20 largest unsecured creditors when it filed its petition. The petition was signed by Mr. Tilden. SGD TIMBER: Section 341(a) Meeting Scheduled for March 29 --------------------------------------------------------- The U.S. Trustee for Region 19 will convene a meeting of creditors in SGD Timber Canyon, LLC's Chapter 11 case on March 29, 2010, at 9:30 a.m. The meeting will be held at U.S. Custom House, 721 19th Street, Room 104, Denver, CO 80202. 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. Parker, Colorado-based SGD Timber Canyon, LLC, filed for Chapter 11 bankruptcy protection on February 16, 2010 (Bankr. D. Colo. Case No. 10-12804). Torben Welch, Esq., who has an office in Denver, Colorado, assists the Company in its restructuring effort. The Company estimated its assets and debts at $10,000,001 to $50,000,000. SGD TIMBER: Taps Messner & Reeves as Bankruptcy Counsel ------------------------------------------------------- SGD Timber Canyon, LLC, has sought permission from the U.S. Bankruptcy Court for the District of Colorado to employ Messner & Reeves, LLC, as bankruptcy counsel. Messner & Reeves will, among other things: a. aid the Debtor in the development of a plan of reorganization; b. file necessary petitions, pleadings, reports, and actions which may be required in the continued administration of the Debtor's property under Chapter 11; c. take necessary actions to enjoin and stay until final decree herein continuation of pending proceedings and to enjoin and stay until final decree herein commencement of lien foreclosure proceedings; and d. investigate the financial affairs of the Debtor. Messner & Reeves will be paid based on the hourly rates of its personnel: Nathan S. Merrill $250 Torben M. Welch $250 Paralegals $110 Law Clerks $85 Torben M. Welch, an attorney with Messner & Reeves, assures the Court that the firm is "disinterested" as that term is defined in Section 101(14) of the Bankruptcy Code. Parker, Colorado-based SGD Timber Canyon, LLC, filed for Chapter 11 bankruptcy protection on February 16, 2010 (Bankr. D. Colo. Case No. 10-12804). The Company estimated its assets and debts at $10,000,001 to $50,000,000. SPANSION INC: Addresses Objections to Reorganization Plan --------------------------------------------------------- In response to objections to the releases under their Second Amended Joint Plan of Reorganization, Spansion Inc. and its units clarify that the Plan does not release any party from pending claims, willful misconduct, gross negligence or claims objections and do not extend to Spansion Japan Limited, its officers, directors, employees, partners, members, managers and advisors. Moreover, the Debtors note, their former officers, directors and employees are not released under the Plan. The Debtors maintain that the Releases in the Plan are appropriate because: (1) the Debtors' current directors, officers and employees share an identity of interest with the Debtors such that an action brought against any of them regarding the discharge of their duties for the Debtors is in essence, a suit against the Debtors or will deplete the assets of the estates; (2) the Debtor Releasees have all substantially contributed to the Debtors' reorganization by actively participating in the restructuring of the Debtors' operations and the formulation of the Plan; (3) the Releases and exculpation provisions are critical to the success of the reorganized company for many reasons, but most importantly, the Debtors' present employees, directors and officers need to focus on the continued success of the Debtors' businesses, rather than face distractions from litigation; (4) the Debtors anticipate that a majority of their creditors will agree to the Releases and vote in favor of the Plan; and (5) distributions under the Plan will provide most of the Debtors' creditors with a significant recovery on their claims. The Debtors relate that they have mutually resolved the Texas Comptroller of Public Accounts' objection and expect that the Objection be withdrawn. In addition, the Debtors tell the Court that they are working with Winbond Electronics Corporation to resolve its objection and anticipate its withdrawal to be forthcoming. Finally, the Debtors have resolved the Objection of the United States Customs and Border Protection and expect it to be withdrawn prior to the Confirmation Hearing as well. Convertible Committee's Proposal According to the Debtors, the Ad Hoc Committee of Convertible Noteholders' contention that the Debtors' backstop agreement evidences bad faith is equally without basis. On January 15, 2010, the Convertible Committee presented the Debtors with a proposal from certain unspecified parties to acquire $112 million shares of New Spansion Common Stock in lieu of the Rights Offering and the Silver Lake backstop. Upon receiving the Proposal, the Debtors contacted the Convertible Committee to learn the identity of the parties making the Proposal and discuss a number of concerns that the Debtors had with the Proposal. These concerns, the Debtors note, included, among others, (i) the failure of the Proposal to establish a floor for the per share purchase price, (ii) the credit and other risks associated with the Proposal, (iii) the fact that the Proposal would be in lieu of the Rights Offering and thus would divest creditors of their participation rights, and (iv) the delays and risks attendant with the Proposal including, if it were accepted, the need to amend the Plan and re-solicit acceptances. The Convertible Committee responded with a revised proposal on January 20, 2010. According to the Debtors, the amended proposal included a nominal floor on the per share purchase price, but otherwise suffered from the same defects as the Proposal. The Debtors maintain that as a result of these continuing defects, they have not pursued the revised proposal. The Debtors tell the Court that they are also concerned about the timing of, and motives behind, the Proposal and revised proposal. The Debtors relate that the Convertible Committee has been an active participant in their Chapter 11 cases since October 2009. The fact that the Convertible Committee waited to make the Proposal until mid-January in the midst of the Rights Offering and mere weeks before the confirmation hearing raises serious doubts about its motivation and tactics, the Debtors assert. In a supplemental objection, the Convertible Committee tells the Court that its members made a superior equity financing proposal to the Debtors for $112,375,000 at a price per share equal to the lesser of: (i) the price per share resulting from the implied equity value that is derived from an assumed total enterprise value of the Reorganized Debtors of $1.5 billion; or (ii) if the total enterprise value of the reorganized Debtors resulting from a valuation confirmed by the Court is less than $1.5 billion, an amount equal to the price per share resulting from the implied equity value that is derived from the total enterprise value as confirmed by the Court, but in no event to be less than the price per share resulting from an assumed total enterprise value of the reorganized Debtors of $1.2 billion. The Convertible Committee asserts that its proposal, even at its lowest price, is materially higher than the Silver Lake backstop. The Convertible Committee avers that the Debtors' entry into the Backstop Right Purchase Agreement with Silver Lake is clearly the result of insider dealing; is not "entirely fair"; and offends traditional notions of the sound exercise of business judgment. According to the Convertible Committee, Silver Lake and the Debtors' management have developed closed ties, particularly since Silver Lake first approach the Debtors in 2009. The Convertible Committee asserts that Silver Lake is a non-statutory insider because: (a) it is purchasing Spansion trade terms; (b) its affiliate holds bondholder claims; (c) it has prepared with the Debtors and participated in presentations to bank investors; (d) it is acting as the Debtors' "equity sponsor" and is controlling the course of the Debtors' Chapter 11 cases and efforts to emerge from Chapter 11; and (e) it is to have control over the reorganized Debtors' Board of Directors and helped select the individuals who will act as claim agent under the Plan. Debtors Address Specific Objections The Debtors also addressed each of objecting parties' concerns. A. Convertible Committee The Convertible Committee's objections regarding good faith, the fair and equitable test, and third party releases are without merit and should be overruled. Nothing in the Bankruptcy Code requires that avoidance actions or any other estate assets for that matter be transferred to any entity other than the Reorganized Debtors. This objection speaks to the Convertible Committee's dissatisfaction with the Plan and not any legal defect or infirmity. B. Ad Hoc Committee of Equity Security Holders The Equity Committee generally asserts that the Debtors have not complied with Sections 1129(a)(1) and (2) of the Bankruptcy Code because the Plan itself does not comply with the Bankruptcy Code and the Debtors, as proponent of the Plan, have also failed to comply with the Bankruptcy Code. The Debtors aver that the Equity Committee's objections are meritless. The Debtors note that they have complied with Sections 1129(a)(1) and (2) of the Bankruptcy Code by proposing a Plan that comports with the Bankruptcy Code as a whole, and, as the proponent of the Plan, the Debtors themselves have also complied with the applicable provisions of the Bankruptcy Code. C. AIG Commercial Equipment Finance, Inc. The Debtors intend to assume the AIG contract and included the AIG contract in the Contract/Lease Schedule pursuant to Debtors' Second Amended Plan Of Reorganization, filed by the Debtors on January 29, 2010. D. International Business Machines Corporation The transfer of ownership of the New Spansion Common Stock of Reorganized Spansion Inc. under the Plan should not breach any change of control provision in any executory contract of any of the Debtors. However, IBM's Objection would be relevant only if a single entity obtained more than 50% of the shares of the Reorganized Spansion Inc. pursuant to the Plan. As a factual matter, the Debtors do not believe that any single entity will obtain ownership of a majority of the Reorganized Spansion Inc. common stock pursuant to the Plan. Therefore, IBM's Objection on this basis is moot. E. Joseph E. Rubino Nothing in the Bankruptcy Code requires the settlement or resolution of a claim as a prerequisite to the filing or confirmation of the Plan. Accordingly, the Mr. Rubino's Objection should be overruled. F. Longacre Opportunity Fund, LP While the Debtors understand that creditors would like as much of their distributions as quickly as possible, they must balance the desire for expeditious resolution and Distribution with the sheer amount of work that needs to be done and the paramount interest of ensuring that only valid and legal Claims are ultimately allowed. Longacre also requests that the Debtors appoint a person in charge of reconciling pending Claims and making Distributions. Longacre fails to cite any authority in support of its request for that person. However, the Debtors have agreed with the Committee and the Senior Noteholders Group to amend the Plan to provide for the appointment of a Claims Agent to handle the Claims adjudication process. G. Texas Comptroller of Public Accounts The Texas Comptroller's objection to the Plan has been resolved to the Texas Comptroller's satisfaction and the Debtors expect that the Texas Comptroller will withdraw its objection. H. The John Gorman 401(k) The John Gorman's objections regarding good faith, valuation and third party releases are without merit and should be overruled. I. US Bank, N.A. US Bank's objections are unfounded and the subject of a pending adversary proceeding before the Court. US Bank's objections are also moot. J. United States Customs and Border Protection The Objection of U.S. Customs has been resolved and the Debtors expect that US Customs will withdraw its Objection shortly. K. United States Trustee The United States Trustee's objections regarding third party releases are without merit and should be overruled. L. Winbond Electronics Corporation The Objection of Winbond has been resolved and the Debtors expect that Winbond will withdraw its Objection shortly. M. Reservations of Rights by Bank of America Bank of America filed a reservation of rights in the event relevant documentation is not executed or agreed to prior to the Confirmation Hearing. The Debtors expect to enter into documentation reasonably satisfactory to the Debtors and Bank of America with respect to the Secured Credit Facility Claim shortly. O. Tessera, Inc. Tessera's objection lacks merit. Tessera's feasibility argument relies on an overstatement of the amount of Spansion Japan's administrative expense claim and Tessera's own alleged administrative expense claim. Furthermore, the Plan's treatment of Tessera's alleged administrative expense claim complies with Section 1129(A)(9)(a) of the Bankruptcy Code. The Court should therefore overrule the objection. P. GE Japan Corporation and Spansion Japan Contrary to the Japan Objectors' assertions, the Plan does meet the best interests of creditors test. While the Japan Objectors highlight a section of the Debtors' liquidation analysis that suggests a modest recovery for unsecured creditors under certain circumstances, they fail to acknowledge that the most recent update of the liquidation analysis projects no recovery for unsecured creditors whatsoever. Thus, under the Plan, Spansion Japan is designated to receive exactly what it could hope to recover in a hypothetical Chapter 7. The Plan does not unfairly discriminate against Spansion Japan. Spansion Japan itself has conceded that the Debtors have provided it with the building blocks upon which it can reorganize in the Spansion Japan Proceeding. The Debtors' unsecured creditors classified in Class 5 have made it abundantly clear that they would not support the Debtors' reorganization in the event that the Debtors permitted additional value to be transferred to an insider like Spansion Japan. In addition, the Debtors will be unable to recover avoidable preferences from Spansion Japan in the same manner that the Debtors can recover those preferences from creditors in Class 5. In the event Spansion Japan survives its own reorganization, Spansion Japan will be a competitor of the Debtors. In short, the Debtors have articulated a valid basis for Spansion Japan receiving no more value from the Debtors' estates. Objection Status Chart A status chart that identifies each of the Objections with a short summary of the substance of the objection and the status of the Debtors' attempt to resolve the Objections is available for free at http://bankrupt.com/misc/Spansion_AmStatusChart.pdf Winbond Electronics subsequently withdrew its limited objection to the Debtors' Plan. * * * The Court authorized Spansion Japan and the Convertible Committee to file under seal certain exhibits to their Confirmation Objection. Randy Furr Files Declaration Randy Furr, executive vice president and chief financial officer of the Debtors, relates that the Debtors explored alternative treatments of Spansion Japan with the Creditors Committee and senior noteholders. According to Mr. Furr, the Debtors designed these alternative treatments in an effort to be sensitive to the concerns of those creditor constituencies and also to provide different treatment as to Spansion Japan. He adds that the Debtors negotiated with the Creditors' Committee and senior noteholders in an effort to reach a consensus on the treatment of the Rejection Damages Claim. Mr. Furr notes that as a result of these discussions, the Debtors did reclassify Spansion Japan in Class 5D. The treatment of class 5D, as described in the Plan filed on February 8, 2010, provides a mechanism to move Spansion Japan to Class 5B in the event that the Court grants Spansion Japan's motion to be reclassified there. Mr. Furr maintains that the Debtors are unaware of any other solution that would reconcile the views of the Creditors' Committee, on the one hand, and Spansion Japan, on the other. Rohm & Haas Objects Rohm and Haas Electronic Materials CMP, Inc. and Rohm and Haas Electronic Materials, LLC ask the Court to deny approval of the Debtors' Disclosure Statement for failure to include adequate information for the purposes of Section 1125(a) of the Bankruptcy Code that would enable creditors to make an informed decision about the Plan. Martin J. Weiss, Esq., at Dilworth Paxson LLP, in Wilmington Delaware, counsel for Rohm and Haas, contends that by filing the Amended Plan after the deadline for objecting to confirmation of the Plan had expired; after the Voting Deadline had expired; and after the Debtors were precluded from amending the Contracts List, the Debtors effectively denied creditors of any real ability to protect themselves from the impact of the Amended Plan on their interests. "The provisions of Section 9.2 of the Amended Plan constitute a material and adverse change with respect to any creditor that received a payment during the applicable preference period," Mr. Weiss asserts. "The fact that the Debtors will not control the preference actions is a relevant consideration to a creditor when voting on the Plan," he adds. 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: Court Gives Final Nod for $450 Mil. Exit Facility --------------------------------------------------------------- On a final basis, Bankruptcy Judge Kevin Carey authorized Spansion Inc. and its debtor affiliates to enter into a Senior Secured Debt Facility with Barclays Capital and Morgan Stanley Senior Funding, Inc., as joint lead arrangers and Barclays Capital PLC as administrative agent. As previously reported, the Arrangers have agreed to structure, arrange and syndicate a $450,000,000 Senior Secured Term Loan Facility to be provided by lenders. Pursuant to the Final Order, no security interest will be granted in the Debtors' Patent Cross License Agreement with International Business Machine Corporation or in the Debtors' other intellectual property subject to the IBM Agreement in contravention of the terms of the IBM Agreement. All objections to the Final Order are overruled. A full-text copy of the Final Order is available for free at: http://bankrupt.com/misc/Spansion_DebtFacilityFinOrd.pdf The Debtors' Plan of Reorganization provides the Debtors with the option to select between two alternatives in dealing with the claims of holders of prepetition floating rate notes. The Debtors can distribute cash, new senior notes in the aggregate principal amount of $237,500,000 and new convertible notes in the aggregate principal amount of $237,500,000 to holders of FRNs. Alternatively, upon the satisfaction of certain conditions, the Debtors can distribute additional cash to holders of the FRNs to reduce in part or in full the principal amount of the New Senior Notes and New Convertible Notes that would otherwise be distributed to them under the first alternative. The Debtors relate that their anticipated cash balances as of the effective date of the Plan will be hundreds of millions of dollars less than the amounts needed for them to exercise the Cash Out Option to repay the FRN claims in full. Thus, the Debtors aver they will be in a position to exercise the Cash Out Option only if they are able to raise a significant amount of additional cash. The Plan provides two mechanisms for the Debtors to raise cash: (i) The Plan provides for a rights offering pursuant to which the Debtors' unsecured creditors can acquire new common stock of Reorganized Spansion Inc. for an aggregate purchase price of approximately $109 million. (ii) The Plan permits the Debtors to incur additional debt in an amount of up to $500 million though either the issuance of new debt securities or through a new term loan facility. So long as they can consummate the Rights Offering and the New Spansion Debt and satisfy the applicable requirements of the Plan, the Debtors intend to exercise the Cash Out Option and payoff the FRN claims in full. The Debtors believe that they will have a more sound and flexible capital structure post- emergence from the Chapter 11 cases if they are able to exercise the Cash Out Option, paying the FRN holders cash instead of issuing the New Convertible Notes and the New Senior Notes to them. For a number of reasons, including the timeframe for securing the New Spansion Debt, the Debtors, in consultation with the Arrangers, concluded that the best option available to them to attempt to secure the necessary funds to consummate the Cash Out Option was to structure the New Spansion Debt as a secured, syndicated term loan credit facility. The salient terms of the Exit Financing Facility are: Borrower: Spansion LLC Joint Lead Arrangers/ Joint Bookrunners: Barclays Capital and Morgan Stanley Administrative Agent/ Collateral Agent: Barclays Bank PLC Syndication Agent: Morgan Stanley Documentation Agent: Barclays Bank Term Facility: A senior secured term loan facility in an aggregate principal amount of up to $450,000,000 Purpose: The proceeds of the Terms Facility will be used by the borrower as follows: (i) approximately $633,000,000 to fully discharge the claims of holders of the Senior Secured Floating Rate Notes due 2013, (ii) amounts necessary to pay Administrative Expense Claims and Priority Claims, and (iii) amounts necessary to pay fees and expenses related to the Term Facility. Termination: If (a) the Account Release Conditions are not met within 60 days of the Closing Date, (b) the Borrower, prior to that date, informs the Lenders in writing that the conditions will not be met, (c) the Term Loans are accelerated for any reason or (d) the Bankruptcy Court order approving fees and transactions contemplated is overturned, vacated or stayed, then a "termination date" will be deemed to have occurred and each Lender will be refunded directly from the Escrow Account its pro rata share of 100% of the aggregate principal amount of the Loans plus accrued interest thereon from the Closing Date through and including the Termination Date. The remaining balance in the Escrow Account will be distributed to the Borrower. Final Maturity and Amortization: The Term Facility will mature on the date that is five years after the Closing Date, and will be payable in equal quarterly amounts of 1% per annum with the balance payable on the maturity date of the Term Facility. Counsel to the Arrangers and Administrative Agent: Dewey & LeBoeuf LLP Redacted copies of the Term Sheet and Fee Letter with respect the Exit Facility are available for free at: http://bankrupt.com/misc/Spansion_BarclaysFeeLetter.pdf http://bankrupt.com/misc/Spansion_BarclaysTermSheet.pdf 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: Opposes Spansion Japan Request for $761MM Reserve --------------------------------------------------------------- Spansion Japan Limited filed its Claim No. 1165 for damages resulting from the rejection of a Foundry Agreement with the Debtors for $761,238,570 on January 15, 2009. In the Debtors' proposed Plan of Reorganization, the Debtors (a) purport to classify Spansion Japan's Rejection Damages Claim separately from the other Class 5B general unsecured claims, (b) seek to provide Spansion Japan with zero recovery on account of its Rejection Damages Claim worth approximately $761 million, and (c) seek to get away with failing to provide for a reserve to protect Spansion Japan's interest during the liquidation and final allowance of its Rejection Damages Claim following confirmation. By this motion, Spansion Japan asks the Court to determine the proper classification of the Rejection Damages Claim and require the Debtors to establish a reserve for distribution on account of the Rejection Damages Claim in accordance with the procedures established for holders of Class 5B claims under the Debtors' plan of reorganization. Debtors and Committee Object The Debtors ask the Court to deny the Classification Motion to the extent that it seeks to establish any reserves at the hearing on confirmation of the Plan. According to the Debtors, Spansion Japan has not demonstrated any basis to shorten time to consider the appropriateness of a reserve on an expedited basis. Moreover, the Debtors maintain, a separate classification of the Rejection Damages Claim is essential for consummation of the Plan. For its part, the Official Committee of Unsecured Creditors asserts that Spansion Japan's request for an approximately $761 million reserve is a wholly unnecessary and inefficient use of estate resources because, as a matter of law, the Rejection Damages Claim should be valued at zero. Unless Spansion Japan returns the Preferential Transfers to the Debtors, the Rejection Damages Claim and any other claim asserted by Spansion Japan against the Debtors should be disallowed in their entirety pursuant to section 502(d) of the Bankruptcy Code, the Committee asserts. GE Japan Responds to Objections The objections by the Debtors and the Committee to the Rule 3013 motion offer up new excuses for a persistent problem -- the Debtors' blatant discrimination against their largest unsecured creditor, asserts Stuart M. Brown, Esq., at Edwards Angell Palmer & Dodge LLP, in Wilmington, Delaware, counsel for GE Japan Corporation. "The pretenses that have been offered, and which have evolved over time, provide no fig leaf to the Committee's self-interested desire to hold down the denominator and increase the percentage return to members of the Committee and other favored creditors, nor do they excuse the Debtors' capitulation to the demands of the Committee now that they have extracted the value they wanted from the 9019 settlement with Spansion Japan," Mr. Brown adds. He maintains that given the size of Spansion Japan's claim, a reserve of stock is necessary to satisfy a claim of hundreds of millions of dollars until the claim is resolved on its merits. In a separate motion, GE Japan Corporation and the Spansion Japan Limited Secured Lenders seek the Court's authority to file a non- redacted version of the response and its related exhibits under seal. The documents sought to be filed under seal contain information that GE Japan received in discovery and has been marked as confidential by other parties pursuant to that certain Stipulation and Order Governing Production and Exchange of Confidential Material dated November 19, 2009. Expert Report Spansion Japan discloses that its expert witness, Jonathan Vanderveen, will testify in support of the Classification Motion. Mr. Vanderveen is a managing director at Alvarez & Marsal. As detailed in his expert report, Mr. Vanderveen and his team have concluded that of the approximately $208 million of cash transfers from Spansion LLC to Spansion Japan during the year prior to the Debtors' Petition Date, none of these transfers are avoidable after application of the "new value defense" pursuant to Section 547(c)(4) of the Bankruptcy Code. Accordingly, the total amount of avoidable transfers that Spansion LLC made to Spansion Japan during the year prior to the Petition Date is $0, the report adds. Mr. Vanderveen's analysis has not considered other potential defenses to the alleged avoidable transfers, including, without limitation, the ordinary course defense pursuant to Section 547(c)(2). A full-text copy of Mr. Vanderveen's Expert Report is available for free at http://bankrupt.com/misc/Spansion_Vanderveen.pdf In a separate filing, Spansion Japan delivered to the Court a list of deposition designations and exhibits to be offered by it in connection with the hearing on the Classification Motion, a full-text copy of this list is available for free at: http://bankrupt.com/misc/Spansion_ClassExh.pdf GE Japan Files Response to Committee's Objection under Seal GE Japan Corporation sought and obtained the Court's approval to file under seal a non-redacted version of its response to the Committee's objection. The documents that GE Japan sought to file under seal contain information that GE Japan received in discovery and has been marked as confidential by other parties. Pursuant to that certain Stipulation and Order Governing Production and Exchange of Confidential Material dated November 19, 2009, GE Japan and the SJL Secured Lenders are constrained to file the Response and the exhibits thereto under seal and will contemporaneously file with the Court a redacted version of the Response. Randy Furr Files Declaration Randy Furr relates that the Debtors have never had any ulterior motives in deciding to separately classify the Rejection Damages Claim. He adds that the Debtors did not seek to obtain an unfair advantage over Spansion Japan in connection with any past, pending or future litigation with Spansion Japan. The Debtors also did not seek to force Spansion Japan into any particular settlement of its Rejection Damages Claim. In fact, there is currently no proposal on the table by the Debtors with respect to the Rejection Damages Claim. Mr. Furr asserts that the Debtors have valid reasons to differentiate between Spansion Japan, on the one hand, and the creditors classified in Classes 5A, 5B and 5C, on the other hand. Mr. Furr says the classification and treatment of Spansion Japan as set forth in the current Plan is well supported by legitimate business reasons. Mr. Furr adds that the treatment of Spansion Japan's Rejection Damages Claim is fair based on an analysis he performed, comparing the treatment of Spansion Japan with the treatment Spansion Japan might receive were it classified in Class 5B. 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: Plan Confirmation Hearing Today --------------------------------------------- The Bankruptcy Court will convene a hearing today, February 24, at 10:00 a.m. to consider confirmation of Spansion Inc. and its debtor affiliates' plan of reorganization. The hearing was originally scheduled for February 11, 2010. However, in light of the Debtors' filing of a modified Second Amended Joint Plan of Reorganization on February 8, 2010, adjournment of the hearing was necessary to provide parties-in- interest ample opportunity to object to the February 8 Plan. Prior to the adjournment, Wilmington Trust Company, as successor indenture trustee under an indenture dated as of June 12, 2006, asked the U.S. Bankruptcy Court for the District of Delaware to compel the Debtors to comply with Rule 2002(b) of the Federal Rule of Bankruptcy Procedure, which provides that "all creditors [shall receive]. . . not less than 28 days notice by mail of the time fixed . . . for filing objections and the hearing to consider confirmation of a . . . Chapter 11 . . . plan." Counsel for Wilmington Trust, Mark E. Felger, Esq., at Cozen O'Connor, in Wilmington, Delaware, argued that the February 8 Plan substantially and materially changes the Second Amended Plan by eliminating the mechanism established to address a pending X- Clause Litigation; and the Debtors propose to provide the affected creditors only three days' notice of this critical change embodied in the February 8 Plan. The X-Clause Litigation refers to the complaint filed by U.S. Bank National Association on October 19, 2009, seeking a declaratory judgment that the Senior Noteholders are entitled to the Class 5C Stock Allocation. "If this Court holds a confirmation hearing on the February 8 Plan without appropriate notice to creditors, the Subordinated Noteholders will be deprived of their statutorily mandated notice period to review, and potentially to object to, the February 8 Plan," Mr. Felger told the Court. Accordingly, Wilmington Trust asked the Court to adjourn confirmation of the February 8 Plan and require the Debtors to provide notice to the Subordinated Noteholders of the changes proposed in the February 8 Plan. Subsequently, Judge Carey ordered, in accordance with the agreement reached by Wilmington Trust and the Debtors, that the Debtors will provide the holders of 2.25% Exchangeable Senior Subordinated Debentures Due 2016 with a supplemental notice of the filing of the Debtors' Second Amended Joint Plan of Reorganization dated February 8, which notice will advise the Subordinated Noteholders that their deadline for objecting to the Plan is February 22, 2010. Pursuant to the Court's directive, a Supplemental Notice was delivered to the Court on February 12, 2010. Creditors Vote on Plan Jane Sullivan, executive vice president of Epiq Bankruptcy Solutions, LLC, disclosed with the Court voting results on Spansion's Second Amended Plan dated December 16, 2009: Voting ACCEPT REJECT Class Amount Number Amount Number ----------- ------ ----------- ------- 1 $12,249,451 1 $0 0 100% 100% 0% 0% 3 $512,939,999 119 $0 0 100% 100% 0% 0% 5A $190,500,000 49 $19,868,000 4 90.56% 92.45% 9.44% 7.55% 5B $400,882,508 127 $48,835,411 25 89.14% 83.55% 10.86% 16.45% 5C $11,479,830 5 $159,634,000 25 6.71% 16.67% 93.29% 83.33% 5D $0 0 $839,168,077 2 0% 0% 100% 100% Under the Second Amended Plan, only holders of claims in these classes were entitled to vote to accept or reject the Plan: Class Type of Claim ----- ------------- 1 Secured Credit Facility Claims 3 FRN Claims 5A Senior Notes Claims 5B General Unsecured Claims 5C Exchangeable Debentures Claims 5D Spansion Japan Rejection Damages Claim A list of all votes included in the tabulation is available for free at http://bankrupt.com/misc/Spansion_TabInclude.pdf The 68 ballots which were excluded from tabulation were either (i) elected to Class 6, (ii) not filled out by record date holders, (iii) duplicate, (iv) unverified whether the beneficial holder was a record date holder, or (v) late filed. A list of all votes excluded from the tabulations is available for free at http://bankrupt.com/misc/Spansion_TabExclude.pdf A full-text copy of the Tabulation Results is available for free at http://bankrupt.com/misc/Spansion_TabulationResults.pdf Modified Second Amended Plan Spansion Inc. and its debtor affiliates' Modified Second Amended Joint Plan of Reorganization dated February 8, 2010, adds, among other things, a separate classification of Spansion Japan's Rejection Damages Claims as Class 5D. The February 8 Plan provides that holders of an Allowed Class 5D Claim will receive no distribution under the Plan. Class 5D is impaired and is entitled to vote to accept or reject the Plan pursuant to Section 1126 of the Bankruptcy Code. In the event that the Court grants the motion of Spansion Japan Limited for an order (I) determining the proper classification of Spansion Japan's Rejection Damages Claim and (II) requiring the Debtors to establish a reserve under the Plan for distributions on account of Spansion Japan's Rejection Damages Claim to the extent that the holders of an Allowed Class 5D Claim must receive the same treatment afforded to holders of an Allowed Class 5B Claim under the Plan, the holders of an Allowed Class 5D Claim will be reclassified in Class 5B, subject to the operation of Section 502(d) of the Bankruptcy Code. In the event that, within 60 days after the effective date of the Plan, an action is commenced against the Holder of a Class 5D Claim under Chapter 5 of the Bankruptcy Code, including the disallowance of that Class 5D Claim pursuant to Section 502(d), no distributions on account of Class 5D Claims will be made unless and until that action has been resolved by final order. Pursuant to the February 8 Plan, the ad hoc consortium of holders of the floating rate notes' professionals will be entitled to assert a claim for reasonable services rendered and expenses incurred in connection with the consummation of the Plan. In the event an appeal is pending from the Confirmation Order as of the Effective Date, the Ad Hoc Consortium's professionals will be entitled to compensation and reimbursement of expenses for services related to that appeal; provided, however, that the Ad Hoc Consortium's professionals will not be entitled to compensation and reimbursement of expenses for services related to that appeal if the Holders of FRN Claims have received the Distributions. The February 8 Plan also discloses that the Debtors have elected to exercise the Cash Out Option, and on the Effective Date, the Debtors will do so in lieu of issuing any New Senior Notes or New Convertible Notes to holders of allowed Class 3 Claims. Under the February 8 Plan, the Official Committee of Unsecured Creditors and the informal group of holders of senior notes will jointly designate a person or other entity, who will be reasonably acceptable to the Debtors, to act as the agent for the estates in evaluating and prosecuting (i) objections to disputed claims in Classes 5A, 5B and 5C, and (ii) Avoidance Actions to recover any alleged preferential transfers made to any entity that received payments or transfers during the applicable "look back" period and (iii) all actions brought pursuant to Section 510(c) of the Bankruptcy Code, except with respect to holders of Designated Disputed Claims, Secured Credit Facility Claims, UBS Credit Facility Claims, FRN Claims, Senior Note Claims, Exchangeable Debentures Claims, Other Secured Claims and Claims for Professional Compensation. A full-text copy of the February 8 Plan is available for free at: http://bankrupt.com/misc/Spansion_Feb8Plan.pdf A redlined copy of the February 8 Plan is available for free at: http://bankrupt.com/misc/Spansion_Feb8Redline.pdf In a memorandum filed in support of their February 8 Plan, the Debtors assured the Court that the modifications to the Plan do not materially or adversely affect any holders of claims or require resolicitation for the Plan. According to the Debtors, they have incorporated in the Plan certain modifications to the December 16 Plan and have modified the Confirmation Order to clarify certain provision of the December 16 Plan, to address objections or concerns filed or asserted by third-parties, and to resolve objections filed by various parties. A full-text copy of the Memorandum is available for free at: http://bankrupt.com/misc/Spansion_Feb8Memo.pdf Debtors File Revised Proposed Confirmation Order In a separate filing, the Debtors delivered to the Court a proposed order confirming their February 8 Plan. The Revised Proposed Order provides, among other things, the approval of: (a) the Debtors' amendment of their contracts with SanDisk IL Ltd. pursuant to the Amendment to New Collaboration Agreement dated January 31, 2010; and (b) the assumption of the New Collaboration Agreement dated May 1, 2006, which is entitled to the SSP Driver Software License Agreement, as amended by the SanDisk Amendment. Under the proposed Confirmation Order and the SanDisk Amendment, (i) the cure amount due with respect to the assumption of the SanDisk Contracts will be $1,157,065, (ii) SanDisk will have an allowed prepetition General Unsecured Claim for $1,166,123 due under the SanDisk Contracts and a second allowed prepetition General Unsecured Claim for $5,000,000 as a claim for rejection damages, which claims will be the only prepetition, General Unsecured Claims allowed to SanDisk, (iii) any and all claims or proofs of claims which SanDisk asserted will be deemed modified to assert only the SanDisk Claims and (iv) the ORNAND Driver Software License Agreement is rejected and terminated. In consideration of AT&T Corporation's waiver of any and all cure amounts otherwise payable to it, the (i) AT&T Global Services Inc. Claim No. 474 amounting to $15,802; and (ii) AT&T Corp. Claim No. 593 amounting to $30,153, will be allowed General Unsecured Claims. Neither the Debtors' assumption of their executory contracts with Robert Bosch GmbH and Robert Bosch LLC would alter or impair any of Bosch's rights or remedies pertaining to product warranties, product liability or other product-related claims, and the reorganized Debtors will remain liable for those Product Claims and responsible for the payment of those claims, subject only to any defenses that the Debtors would have had to the Product Claims under the assumed contracts if they had not been debtors in the Chapter 11 cases or confirmed the Plan. The Allowed Administrative Expense Claims in favor of Rohm and Haas Electronics Materials CMP, Inc. and Rohm and Haas Electronic Materials, LLC are not subject to disallowance under Section 502(d) of the Bankruptcy Code, in that those Claims were Allowed by an Order of the Bankruptcy Court entered prior to the date of the Confirmation Order. Furthermore, nothing constitutes a waiver by Rohm and Haas or precludes Rohm and Haas from asserting any objection or defense which it may have to any demand, motion or other action by any of the Debtors or the Reorganized Debtors seeking, among other things, to have any claim asserted by Rohm and Haas disallowed. Treatment of the Claim of the Texas Comptroller of Public Accounts: (a) Interest at the rate of 4.25% per annum will commence to accrue on the Allowed unpaid balance of the Comptroller's Claim on the Effective Date of the Plan until paid in full; (b) the Comptroller's claim will be paid in full in Cash, together with interest accrued, within 30 days after it becomes an Allowed Claim; (c) nothing provided in the Plan or the Confirmation Order will affect or impair any setoff rights of the Comptroller; (d) nothing provided in the Plan or the Confirmation Order will affect or impair any rights of the Texas Comptroller to pursue any non-debtor third parties for tax debts or claims; (e) the failure by the Reorganized Debtor to make a payment when due will constitute an event of default. If the Reorganized Debtors fail to cure an Event of Default within 10 days after the receipt of written notice of that default from the Comptroller, then the Comptroller may accelerate all Allowed Claims and indebtedness due and exercise any and all rights and remedies available under applicable non-bankruptcy law. The releases set forth in the Plan will not be deemed to waive or release any claims which Winbond Electronics Corporation has or may have against Spansion (Penang) Sdn. Bhd., or any other non- debtor affiliate of the Debtors. Nothing will impede or affect: (i) the ability of the Bureau of Customs and Border Protection to make demand on, be paid by or otherwise pursue any sureties that are jointly and severally liable with the Debtors for any debt owed to Customs and furthermore, nothing will release or discharge any claims against non-debtor third parties or enjoin or restrain Customs from enforcing any action against non-debtor third parties that may arise as a result of the exercise of any Customs' police and regulatory power; and (ii) the set-off and recoupment rights of Customs and those rights are expressly preserved. Exhibits For Confirmation Hearing Filed Spansion Japan Limited tells the Court that it may offer to the Confirmation Hearing any of the deposition testimony Randy W. Furr dated January 26, 2010. Spansion Japan will also offer, among others, these exhibits as evidence: * Spansion Japan's Second Amended Notice of Deposition Directed to the Debtors; * Skadden Arps Slate Meagher & Flom, LLP, Correspondence to Robert Hamilton dated January 18, 2010; * E-mail from John Kispert to Nate Sarkisian dated October 16, 2009; * E-mail from Michael Lurey to Luc Despins dated November 22, 2009; * Spansion Unsecured Creditors Presentation dated December 22, 2009 * Order Approving Settlement between Spansion LLC and Spansion Japan, including Term Sheet dated January 29, 2010. GE Japan Corporation tells the Court that it expects to offer the deposition testimony of Randy Furr at the Confirmation Hearing. GE Japan will also submit to the hearing exhibits containing, among others: * Spansion Inc. Form 10-Q for the period ended September 27, 2009, filed on December 31, 2009 * Transcript of January 26, 2006 deposition of Randy Furr * Letter from Van C. Durrer II to Robert W. Hamilton dated January 18, 2010 * Email from John Kispert to Nate Sarkisian dated October 26, 2009 * Email from Michael Lurey to Luc Despins dated November 22, 2009 The Ad Hoc Committee of Equity Security Holders informs the Court that it may call Jonathan Brownstein as a witness. Moreover, the Ad Hoc Committee may offer as evidence these exhibits: * Convert Committee's Motion to Vacate Disclosure Statement Order, dated January 22, 2010 * Ad Hoc Committee's First Request for Documents * September 2009 Creditor Presentation * Transcript of January 12, 2010 Bank Meeting * Owsley Report in Support of Confirmation, submitted January 20, 2010 The Debtors, for their part, notify the Court that they will offer these witnesses in support of the confirmation of Plan: * Don Devost * Nate Sarkisian * Randy Furr * Thora Thoroddsen * John Kispert * Todd Sirras * Henry Owsley * John Brincko The Debtors will also present exhibits at the Confirmation Hearing, a list of which is available for free at: http://bankrupt.com/misc/Spansion_DebtorExhibits.pdf The Ad Hoc Committee of Floating Rate Noteholders tells the Court that it reserves its rights to cross-examine any witness identified by any party, and to use at trial any exhibit identified by any party. The Ad Hoc Committee of Convertible Noteholders submitted with the Court an amended list of exhibits for the Confirmation Hearing, a copy of which is available for free at: http://bankrupt.com/misc/Spansion_AdHocList.pdf The Convertible Noteholders said it will offer these witnesses at the Confirmation Hearing: * Richard Morgner * Randy Furr * Nathan Sarkisian * Donald Devost * Luc A. Despins * Greg Poncetta The informal group of certain holders of the 11.25% Senior Notes due 2016 proposes to offer Michael Genereux as a witness. The Informal Group also submitted a list of exhibits containing, among others: * Expert Report of Henry Owsley * Blackstone Report Project Density * Jefferies Report Enterprise Valuation Report * Oppenheimer Critique of Expert Reports * Expert Rebuttal Report of Henry Owsley 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) SPHERIS INC: Committee Slows Down Bid Procedures Hearing -------------------------------------------------------- The newly formed Official Committee of Unsecured Creditors Inc. in Spheris Inc.'s cases was granted an adjournment of hearings that had been scheduled for last week. The hearings for final approval of financing and approval of bidding procedures will take place this week. Spheris has a contract for the sale of the business to subsidiaries of CBay Holding Ltd. for $75.25 million cash, absent a higher bid at auction. The bankruptcy judge already gave interim authority to borrow $7.5 million under a proposed $15 million loan. About Spheris Based in Franklin, Tennessee, Spheris Inc. -- http://www.spheris.com/-- is a global provider of clinical documentation technology and services. Spheris Inc., along with five affiliates, filed for Chapter 11 on Feb. 3, 2010 (Bankr. D. Del. Case No. 10-10352). Matthew Barry Lunn, Esq., and Ryan M. Bartley, Esq., at Young Conaway Stargatt & Taylor, LLP, represent the Debtors in their Chapter 11 effort. The petition says that assets range from $50,000,001 to $100,000,000 while debts range from $100,000,001 to $500,000,000. SRKO FAMILY: Files for Chapter 11 Bankruptcy in Denver ------------------------------------------------------ Rich Laden at The Gazette reports SRKO Family Limited Partnership filed for Chapter 11 protection in the U.S. Bankruptcy Court in Denver to reorganize its finances. SRKO Family Limited Partnership is a property developer. The Company said it owes $32 million to Richardson's Sunshine Home Development. The Gazette notes the Company failed to include a full list of creditors and other financial data. The Company has until March 5, 2010, to filed these requirements. STERLING MINING: Court Extends Exclusivity Period Until June 4 -------------------------------------------------------------- The Hon. Terry L. Myers of the U.S. Bankruptcy Court for the District of Idaho has extended, at the behest of Sterling Mining Company, the exclusive period to solicit acceptances and confirmation of its plan of reorganization until June 4, 2010. The Court has overruled an objection by Sunshine Precious Metals, Inc., to extend the exclusivity period. According to Sunshine Precious, the Debtor's extension motion was filed on January 2, 2010, which was 309 days after the petition was filed, and that the Debtor's request for an extension should have been made within 180 days after the petition date. Sunshine Precious claims that the Debtor's bankruptcy case has turned into a bidding contest for the stock of the reorganized debtor. Sunshine Precious was represented by Holland & Hart LLP. Based in Coeur d'Alene, Idaho, Sterling Mining Company (OTCBB:SRLM and FSE:SMX) -- http://www.SterlingMining.com/-- is a mineral resource development and exploration company. Sterling is engaged in the business of acquiring, exploring, developing and mining mineral properties primarily those containing silver and associated base and precious metals. Sterling operates the Sunshine Silver Mine in Idaho and has exploration projects in Idaho, U.S.A. Sterling was incorporated under the laws of the State of Idaho on February 3, 1903 and its common shares are currently listed on the OTCBB: SRLMQ and Frankfurt Stock Exchange: SMX. Sterling is currently a debtor-in-possession in Chapter 11 Bankruptcy in the District of Idaho, U.S.A. Sterling Mining filed for bankruptcy protection on March 3, 2009 (Bankr. D. Idaho Case No. 09-20178). Bruce A. Anderson, Esq., at Elsaesser Jarzabek Anderson Marks Elliott & McHugh, Chartered represents the Debtor as counsel. As of September 30, 2008, Sterling Mining had $31.9 million in total assets, and $13.2 million in total current liabilities and $1.6 million in total long-term liabilities. In its schedules, the Debtor listed total assets of $11,706,761 and total debts of $14,159,010. STERLING MINING: Goldman Sachs Group Owns 4.2% of Common Stock -------------------------------------------------------------- The Goldman Sachs Group, Inc. and Goldman, Sachs & Co. have ceased to be the beneficial owners of more than 5% of Sterling Mining Company's common stock, par value $0.05 per share. The reporting persons disclosed that that as of December 31, 2009, they may be deemed to beneficially own shares of Sterling Mining Company's common stock: Shares Beneficially Company Owned Percentage ------- ------------ ---------- The Goldman Sachs Group, Inc. 1,661,000 4.2% Goldman, Sachs & Co. 1,661,000 4.2% The CUSIP number of the Common Stock is 895410102. A full-text copy of The Goldman Sachs Group's amended Schedule 13G is available for free at http://researcharchives.com/t/s?5491 About Sterling Mining Based in Coeur d'Alene, Idaho, Sterling Mining Company (OTCBB:SRLM and FSE:SMX) -- http://www.SterlingMining.com/-- is a mineral resource development and exploration company. Sterling is engaged in the business of acquiring, exploring, developing and mining mineral properties primarily those containing silver and associated base and precious metals. Sterling operates the Sunshine Silver Mine in Idaho and has exploration projects in Idaho, U.S.A. Sterling was incorporated under the laws of the State of Idaho on February 3, 1903 and its common shares are currently listed on the OTCBB: SRLMQ and Frankfurt Stock Exchange: SMX. Sterling is currently a debtor-in-possession in Chapter 11 Bankruptcy in the District of Idaho, U.S.A. Sterling Mining filed for bankruptcy protection on March 3, 2009 (Bankr. D. Idaho Case No. 09-20178). Bruce A. Anderson, Esq., at Elsaesser Jarzabek Anderson Marks Elliott & McHugh, Chartered represents the Debtor as counsel. As of September 30, 2008, Sterling Mining had $31.9 million in total assets, and $13.2 million in total current liabilities and $1.6 million in total long-term liabilities. In its schedules, the Debtor listed total assets of $11,706,761 and total debts of $14,159,010. STEVE RIGGS: Files for Chapter 11 Bankruptcy -------------------------------------------- Dusty Ricketts at Daily News reports that Steve Riggs filed for Chapter 11 bankruptcy, citing assets between $1 million and $10 million, and debts between $10 million and $50 million. Daily News relates that the filing came after Mr. Riggs invested million of money in a failed large-scale residential community on the north end of Okaloosa County, in Florida. Mr. Riggs ceased development on the project after he personally lost roughly $6.5 million. SUNRISE SENIOR LIVING: Extends Wells Fargo Loans to Dec. 1 ---------------------------------------------------------- Sunrise Pasadena CA Senior Living LLC and Sunrise Pleasanton CA Senior Living L.P. entered into a modification agreement dated February 10, 2010, with Wells Fargo Bank, National Association regarding a Loan Agreement dated September 28, 2007. In addition, on February 12, 2010, Sunrise Monterey Senior Living, LP entered into a modification agreement dated February 10, 2010, with Wells Fargo regarding that certain Building Loan Agreement dated April 10, 2008. Sunrise Pasadena and Sunrise Pleasanton own undeveloped land respectively located in Pasadena and Pleasanton, California, and Sunrise Monterey owns land located in Monterey, California, on which it operates an assisted living community. Sunrise Pasadena, Sunrise Pleasanton and Sunrise Monterey are consolidated subsidiaries of Sunrise Senior Living, Inc. The Pasadena/Pleasanton Modification Agreement, among other matters: i) extended the maturity date of the previously matured Pasadena/Pleasanton Loan Agreement to the earlier of: a) December 1, 2010 and b) the maturity date of Sunrise's revolving bank credit agreement; ii) established the terms and conditions on which a further maturity extension to April 1, 2011 may be available iii) waived defaults under the Pasadena/Pleasanton Loan Agreement iv) provided for a $5 million principal payment to be made by the Pasadena/Pleasanton Borrowers at closing; v) provided for an additional $5 million principal payment to be made on or before July 31, 2010 vi) established certain minimum release prices for the sale of the Pasadena/Pleasanton Properties and expressly permitted proceeds from the sale of such properties to be used to make the $5 million prepayment due on July 31, 2010 vii) required the Pasadena/Pleasanton Borrowers to guarantee on a secured basis Sunrise Monterey's obligations under the Monterey Loan Agreement viii) modified the financial covenants applicable to Sunrise to make them consistent with the financial covenants under the Parent Credit Agreement ix) provided for additional reporting requirements; and x) increased the interest rate on amounts outstanding to LIBOR plus 3.00%. As of February 12, 2010, there was approximately $16.9 million in outstanding borrowings under the Pasadena/Pleasanton Loan Agreement. The Pasadena/Pleasanton Borrowers' obligations under the Pasadena Loan Agreement are secured by mortgages on the Pasadena/Pleasanton Properties and the Monterey Property and are guaranteed by Sunrise and Sunrise Monterey. The Monterey Modification Agreement, among other matters, (i) modified the maturity date of the Monterey Loan Agreement to the earlier of (a) April 1, 2011 and (b) the maturity date of the Parent Credit Agreement, (ii) modified the terms and conditions on which a further maturity extension to April 1, 2012 may be available, (iii) waived defaults under the Monterey Loan Agreement, (iv) required Sunrise Monterey to guarantee on a secured basis the Pasadena/Pleasanton Borrowers' obligations under the Pasadena/Pleasanton Loan Agreement, (v) revised certain financial and operating covenants, (vi) provided for additional reporting requirements, and (vii) increased the interest rate on amounts outstanding to LIBOR plus 3.00% (with an all-in floor of 3.50%). As of February 12, 2010, there was approximately $35.1 million in outstanding borrowings under the Monterey Loan Agreement. Sunrise Monterey's obligations under the Monterey Loan Agreement are secured by mortgages on the Monterey Property and the Pasadena/Pleasanton Properties and are guaranteed by Sunrise and the Pasadena/Pleasanton Borrowers. In connection with the modification of both the Pasadena/Pleasanton Loan Agreement and the Monterey Loan Agreement, an $85,313 one-time fee was paid to Wells Fargo on February 12, 2010. The foregoing description of the Pasadena/Pleasanton Modification Agreement and the Monterey Modification Agreement is qualified in its entirety by reference to the full text of the Pasadena/Pleasanton Modification Agreement and the Monterey Modification Agreement, which are attached hereto as Exhibits 10.1 and 10.3 and are incorporated herein by reference. About Sunrise Senior McLean, Virginia-based Sunrise Senior Living -- http://www.sunriseseniorliving.com/-- employs 40,000 people. As of November 9, 2009, Sunrise operated 403 communities in the United States, Canada, Germany and the United Kingdom, with a combined unit capacity of approximately 41,500 units. Sunrise offers a full range of personalized senior living services, including independent living, assisted living, care for individuals with Alzheimer's and other forms of memory loss, as well as nursing and rehabilitative services. Sunrise's senior living services are delivered by staff trained to encourage the independence, preserve the dignity, enable freedom of choice and protect the privacy of residents. At Sept. 30, 2009, the Company had total assets of $1.096 billion against total liabilities of $1.092 billion. At Sept. 30, 2009, Sunrise had a retained loss of $471.4 million and stockholders' deficit of $87,000. With non-controlling interest of $4.1 million, Sunrise had total equity of $4.0 million at September 30, 2009. Moreover, Sunrise's September 30 balance sheet showed strained liquidity: The company had $373.6 million in total current assets against $860.5 million in total current liabilities. TALBOT INC: BPW Acquisition Stockholders Approve Merger ------------------------------------------------------- BPW Acquisition Corp. announced that at a special meeting of stockholders held February, BPW's stockholders voted to adopt the Agreement and Plan of Merger, as amended on February 16, providing for the acquisition of BPW by The Talbots, Inc. Based on preliminary voting results from the independent inspector of elections, approximately 91 percent of votes cast were in favor of the merger proposal. Additionally, less than one percent of shares outstanding elected to convert their shares into cash. During business proceedings at today's special meeting, stockholders also approved the following resolutions: -- The pre-closing certificate amendment proposal, which extends BPW's corporate existence by two months, to twenty-six months in total from the date of its initial public offering; and -- The post-closing certificate amendment proposal, which provides for the amendment and restatement of BPW's certificate of incorporation to provide for the perpetual existence of BPW and to eliminate provisions of the BPW certificate of incorporation related to BPW's operation as a blank check company. "We are pleased that our stockholders have voted in support of this transaction, which is uniquely designed to enhance value for shareholders of both BPW and Talbots," said Gary S. Barancik, Chief Executive Officer of BPW. "We believe the merger of BPW and Talbots provides Talbots with the strategic capital necessary to strengthen its balance sheet and support future growth, while giving BPW stockholders and warrantholders the opportunity to participate in the growth of Talbots, one of the country's best- known specialty retailers of women's apparel." As previously disclosed, Talbots will promptly commence an exchange offer for existing BPW warrants held by public warrantholders. The proposed transaction remains subject to customary closing conditions, the receipt of necessary financing by Talbots and the completion of the warrant exchange offer on the terms described in the merger agreement. BPW expects the transaction to close during the first calendar quarter of 2010. About BPW Acquisition Corp. BPW Acquisition Corp. is a special purpose acquisition company formed in 2008 for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or other similar business combination with one or more operating businesses About Talbots Inc. Hingham, Massachusetts-based The Talbots, Inc. (NYSE:TLB) is a specialty retailer and direct marketer of women's apparel, shoes and accessories. At the end of third quarter 2009, the Company operated 589 Talbots brand stores in 46 states, the District of Columbia, and Canada. Talbots brand on-line shopping site is located at http://www.talbots.com/ As of October 31, 2009, the Company had $839,703,000 in total assets, including $479,741,000 in total current assets, against total current liabilities of $483,687,000; long-term debt less current portion of $20,000,000; related party debt less current portion of $241,494,000; deferred rent under lease commitments of $124,126,000; deferred income taxes of $28,456,000; other liabilities of $132,501,000; resulting in stockholders' deficit of $190,561,000. TRIBUNE CO: Court Won't Dismiss Beatty's Suit Over Dick Tracy ------------------------------------------------------------- Judge Dean D. Pregerson of the U.S. District Court for the Central District of California has denied Tribune Media Services Inc.'s motion to dismiss Warren Beatty's lawsuit over ownership of the cartoon character Dick Tracy and various works embodying that character and denied Mr. Beatty's request to sanction Tribune for filing the motion to dismiss. To recall, Mr. Beatty filed a lawsuit against Tribune on November 20, 2008. The Complaint alleges that there is a dispute between the parties as to whether Tribune is entitled to effect a reversion of the Dick Tracy Rights and a judicial declaration as to this dispute is necessary in order for the parties to know their respective rights in and to the Dick Tracy property. Tribune filed the motion to dismiss arguing that the case or controversy requirement is not satisfied because the action is moot. The California Court concludes that there is a substantial controversy between the parties warranting the issuance of a declaratory judgment. However, because the prayer for declaratory relief is not a model of clarity, the Court declines to sanction Tribune for filing the motion to dismiss. About Tribune Co. Headquartered in Chicago, Illinois, Tribune Co. -- http://www.tribune.com/-- is a media company, operating businesses in publishing, interactive and broadcasting, including ten daily newspapers and commuter tabloids, 23 television stations, WGN America, WGN-AM and the Chicago Cubs baseball team. The Company and 110 of its affiliates filed for Chapter 11 protection on Dec. 8, 2008 (Bankr. D. Del. Lead Case No. 08- 13141). The Debtors proposed Sidley Austion LLP as their counsel; Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel; Lazard Ltd. and Alvarez & Marsal North Americal LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims agent. As of Dec. 8, 2008, the Debtors have $7,604,195,000 in total assets and $12,972,541,148 in total debts. Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Tribune Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TRIBUNE CO: Gets Nod of Faggio & New Haven Settlements ------------------------------------------------------ Tribune Co. and its units won approval from the.S. Bankruptcy Court for the District of Delaware of: (i) a settlement agreement between Debtor The Hartford Courant Company and Jennifer Faggio, both individually and as the Conservator of the Estate of Andrew Faggio; and (ii) a settlement agreement between the Hartford Courant and the City of New Haven. Ms. Faggio commenced a personal injury action in the Superior Court of the Middlesex Judicial District at Middletown Connecticut on December 29, 2004. Ms. Faggio filed a Third Amended Complaint against Leon Brown and Hartford Courant alleging injuries on account of an incident occurring on or about January 31, 2003, involving the operation of a motor vehicle by an alleged employee of Hartford Courant. It is claimed in the State Court Action that, as a result of the incident, Mr. Faggio has been hospitalized in a minimally conscious state. At the time of the incident, Debtor Tribune Company, the ultimate parent company of Hartford Courant, maintained certain insurance policies applicable to Hartford Courant. The deductible obligation in connection with the insurance coverage is $1 million. As of the Petition Date, the Debtors had expended approximately $522,298 in relation to insurance deductible obligations under the insurance coverage to the State Court Action, leaving a remaining insurance deductible of $477,701. The City of New Haven subsequently moved to intervene in the State Court Action as an intervening plaintiff asserting a worker's compensation lien arising from amounts it has expended as a result of the January 21, 2003 incident. On January 22, 2010, the Hartford Courant and Ms. Faggio entered into the Settlement Agreement pursuant to which the Debtors' insurers will pay to Ms. Faggio the sum of $5,579,478 and the Debtors' insurers will pay to the City of New Haven the sum of $2,000,000 in satisfaction of a worker's compensation lien held by the City of New Haven. Ms. Faggio has agreed that neither the Hartford Courant nor any of the Debtors will pay any portion of the Total Settlement Amount and no portion of the Total Settlement Amount will be enforced against any property or assets belonging to the Hartford Courant or any other Debtor. About Tribune Co. Headquartered in Chicago, Illinois, Tribune Co. -- http://www.tribune.com/-- is a media company, operating businesses in publishing, interactive and broadcasting, including ten daily newspapers and commuter tabloids, 23 television stations, WGN America, WGN-AM and the Chicago Cubs baseball team. The Company and 110 of its affiliates filed for Chapter 11 protection on Dec. 8, 2008 (Bankr. D. Del. Lead Case No. 08- 13141). The Debtors proposed Sidley Austion LLP as their counsel; Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel; Lazard Ltd. and Alvarez & Marsal North Americal LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims agent. As of Dec. 8, 2008, the Debtors have $7,604,195,000 in total assets and $12,972,541,148 in total debts. Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Tribune Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TVI CORP: Newland Capital Reports Zero Equity Stake --------------------------------------------------- Newland Capital Management, LLC, Newland Master Fund, Ltd., Newland Offshore Fund, Ltd., Ken Brodkowitz, and Michael Vermut disclosed that as of December 31, 2009, they have ceased to own any shares of TVI Corporation's common stock, par value $0.01 per share. A full-text copy of Newland Capital Management's amended Schedule 13G is available for free at http://researcharchives.com/t/s?5492 About TVI Corporation Headquartered in Glenn Dale, Maryland, TVI Corporation -- http://www.tvicorp.com/-- supplies military and civilian emergency first responder and first receiver products, personal protection products and quick-erect shelter systems. The products include powered air-purifying respirators, respiratory filters and quick-erect shelter systems used for decontamination, hospital surge systems and command and control. The users of these products include military and homeland defense/homeland security customers. The Company and two of its affiliates filed for Chapter 11 protection on April 1, 2009 (Bankr. D. Md. Lead Case No. 09-15677). Christopher William Mahoney, Esq., Jeffrey W. Spear, Esq., and Joel M. Walker, Esq., at Duane Morris LLP, represent the Debtors in their restructuring efforts. Alan M. Grochal, Esq., and Maria Ellena Chavez-Ruark, Esq., at Tydings and Rosenberg, serve as counsel to the official committee of unsecured creditors. When the Debtor filed for protection from its creditors, it listed $10 million to $50 million in assets and $1 million to $10 million in debts. UAL CORP: Board Appoints Wendy Morse to HR Committee ---------------------------------------------------- The Board of Directors of UAL Corporation approved the recommendation of the Nominating/Governance Committee to appoint Captain Wendy J. Morse to serve on the Human Resources Committee and the Public Responsibility Committee of the Board. Captain Morse was elected as a new member of the Board of Directors of UAL Corporation effective Jan. 1, 2010. About UAL Corporation Based in Chicago, Illinois, UAL Corporation (NASDAQ: UAUA) -- http://www.united.com/-- is the holding company for United Airlines, Inc. United Airlines is the world's second largest air carrier. The airline flies to Brazil, Korea and Germany. The company filed for Chapter 11 protection on Dec. 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191). James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and Steven R. Kotarba, Esq., at Kirkland & Ellis, represented the Debtors in their restructuring efforts. Fruman Jacobson, Esq., at Sonnenschein Nath & Rosenthal LLP represented the Official Committee of Unsecured Creditors. Judge Eugene R. Wedoff confirmed a reorganization plan for United on Jan. 20, 2006. The Company emerged from bankruptcy on Feb. 1, 2006. (United Airlines Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) UAL Corp. carries a 'Caa1' probability of default rating from Moody's, 'B-' long term foreign issuer credit rating from Standard & Poor's, and 'CCC' long term issuer default rating from Fitch. US AIRWAYS: Ameriprise Discloses 3.45% Equity Stake --------------------------------------------------- Ameriprise Financial, Inc., disclosed with the U.S. Securities and Exchange Commission on February 12, 2010, that it beneficially owns 5,550,437 shares of US Airways Group, Inc. common stock representing 3.45% of US Airways stock outstanding. Ameriprise notes that it has shared voting power with respect 120,907 shares and shared dispositive power over the 5,550,437 shares. Similarly, RiverSource Investments, LLC, disclosed that it beneficially owns 5,550,437 shares of US Airways Group, Inc. common stock representing 3.45% of US Airways stock outstanding. It also has shared voting power with respect 120,907 shares and shared dispositive power over the 5,550,437 shares. Ameriprise Financial, as the parent company of RiverSource Investments, may be deemed to beneficially own the shares reported by RiverSource Investments. Accordingly, the shares reported by Ameriprise Financial include those shares separately reported by RiverSource Investments. As of February 12, 2010, there were 161,118,427 shares of US Airways Group, Inc. common stock outstanding. About US Airways US Airways, along with US Airways Shuttle and US Airways Express, operates more than 3,200 flights per day and serves more than 200 communities in the U.S., Canada, Europe, the Middle East, the Caribbean and Latin America. The airline employs more than 33,000 aviation professionals worldwide and is a member of the Star Alliance network, which offers its customers more than 17,000 daily flights to 916 destinations in 160 countries worldwide. And for the eleventh consecutive year, the airline received a Diamond Award for maintenance training excellence from the Federal Aviation Administration (FAA) for its Charlotte, North Carolina hub line maintenance facility. For more company information, visit http://www.usairways.com/ Under a Chapter 11 plan declared effective on March 31, 2003, USAir emerged from bankruptcy with the Retirement Systems of Alabama taking a 40% equity stake in the deleveraged carrier in exchange for $240 million infusion of new capital. US Airways and its subsidiaries filed another Chapter 11 petition on September 12, 2004 (Bankr. E.D. Va. Case No. 04-13820). Brian P. Leitch, Esq., Daniel M. Lewis, Esq., and Michael J. Canning, Esq., at Arnold & Porter LLP, and Lawrence E. Rifken, Esq., and Douglas M. Foley, Esq., at McGuireWoods LLP, represented the Debtors in their restructuring efforts. In the Company's second bankruptcy filing, it listed $8,805,972,000 in total assets and $8,702,437,000 in total debts. The USAir II bankruptcy plan became effective on September 27, 2005. The Debtors completed their merger with America West on the same date. (US Airways Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). * * * Reorganized US Airways reported, on a GAAP basis, a net loss of $205 million, or ($1.54) per share for 2009, following a net loss of $2.2 billion, or ($22.11) per share, in 2008. As of Dec. 31, 2009, reorganized US Airways had total assets of $7,454,000,000 against debts of $7,809,000,000, for a stockholders' deficit of $355,000,000. In February, Moody's Investors Service affirmed the 'Caa1' Corporate Family and Probability of Default ratings of US Airways Group, Inc., and the SGL-4 Speculative Grade Liquidity rating. US Airways Group carries a 'CCC' issuer default rating from Fitch. US AIRWAYS: FMR LLC Discloses 10.523% Stake ------------------------------------------- In an amended 13G filing with the U.S. Securities and Exchange Commission on February 16, 2010, FMR LLC disclosed that it beneficially owns 16,973,336 shares of US Airways Group, Inc. common stock representing 10.523% of shares outstanding. FMR has sole power to vote or to direct the vote with respect 1,078,801 shares, and the sole power to dispose or to direct the disposition of 16,973,336 shares. Separately, Edward C. Johnson 3d disclosed ownership of 16,973,336 shares representing 10.523% of shares outstanding. As of February 12, 2010, there were 161,118,427 shares of US Airways Group, Inc. common stock outstanding. Fidelity Management & Research Company, a wholly owned subsidiary of FMR LLC and an investment adviser registered under Section 203 of the Investment Advisers Act of 1940, is the beneficial owner of 15,896,735 shares or 9.855% of the Common Stock outstanding of US Airways Group, Inc. as a result of acting as investment adviser to various investment companies registered under Section 8 of the Investment Company Act of 1940. The number of shares of Common Stock of US Airways Group, Inc. owned by the investment companies at December 31, 2009, included 199,378 shares of Common Stock resulting from the assumed conversion of $4,810,000 principal amount of US AIRWAYS GRP 7 9/30/20 (41.4508 shares of Common Stock for each $1,000 principal amount of debenture). Edward C. Johnson 3d and FMR LLC, through its control of Fidelity, and the funds each has sole power to dispose of the 15,896,735 shares owned by the Funds. Members of the family of Edward C. Johnson 3d, Chairman of FMR LLC, are the predominant owners, directly or through trusts, of Series B voting common shares of FMR LLC, representing 49% of the voting power of FMR LLC. The Johnson family group and all other Series B shareholders have entered into a shareholders' voting agreement under which all Series B voting common shares will be voted in accordance with the majority vote of Series B voting common shares. Accordingly, through their ownership of voting common shares and the execution of the shareholders' voting agreement, members of the Johnson family may be deemed, under the Investment Company Act of 1940, to form a controlling group with respect to FMR LLC. Neither FMR LLC nor Edward C. Johnson 3d, Chairman of FMR LLC, has the sole power to vote or direct the voting of the shares owned directly by the Fidelity Funds, which power resides with the Funds' Boards of Trustees. Fidelity carries out the voting of the shares under written guidelines established by the Funds' Boards of Trustees. FIL Limited and various foreign-based subsidiaries provide investment advisory and management services to a number of non- U.S. investment companies and certain institutional investors. FIL, which is a qualified institution under Section 240.13d- 1(b)(1)(ii), is the beneficial owner of 1,076,601 shares or 0.667% of the Common Stock outstanding of the Company. Partnerships controlled predominantly by members of the family of Edward C. Johnson 3d, Chairman of FMR LLC and FIL, or trusts for their benefit, own shares of FIL voting stock with the right to cast approximately 47% of the total votes which may be cast by all holders of FIL voting stock. FMR LLC and FIL are separate and independent corporate entities, and their Boards of Directors are generally composed of different individuals. FMR LLC and FIL are of the view that they are not acting as a "group" for purposes of Section 13(d) under the Securities Exchange Act of 1934 and that they are not otherwise required to attribute to each other the "beneficial ownership" of securities "beneficially owned" by the other corporation within the meaning of Rule 13d-3 promulgated under the 1934 Act. Therefore, they are of the view that the shares held by the other corporation need not be aggregated for purposes of Section 13(d). About US Airways US Airways, along with US Airways Shuttle and US Airways Express, operates more than 3,200 flights per day and serves more than 200 communities in the U.S., Canada, Europe, the Middle East, the Caribbean and Latin America. The airline employs more than 33,000 aviation professionals worldwide and is a member of the Star Alliance network, which offers its customers more than 17,000 daily flights to 916 destinations in 160 countries worldwide. And for the eleventh consecutive year, the airline received a Diamond Award for maintenance training excellence from the Federal Aviation Administration (FAA) for its Charlotte, North Carolina hub line maintenance facility. For more company information, visit http://www.usairways.com/ Under a Chapter 11 plan declared effective on March 31, 2003, USAir emerged from bankruptcy with the Retirement Systems of Alabama taking a 40% equity stake in the deleveraged carrier in exchange for $240 million infusion of new capital. US Airways and its subsidiaries filed another Chapter 11 petition on September 12, 2004 (Bankr. E.D. Va. Case No. 04-13820). Brian P. Leitch, Esq., Daniel M. Lewis, Esq., and Michael J. Canning, Esq., at Arnold & Porter LLP, and Lawrence E. Rifken, Esq., and Douglas M. Foley, Esq., at McGuireWoods LLP, represented the Debtors in their restructuring efforts. In the Company's second bankruptcy filing, it listed $8,805,972,000 in total assets and $8,702,437,000 in total debts. The USAir II bankruptcy plan became effective on September 27, 2005. The Debtors completed their merger with America West on the same date. (US Airways Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). * * * Reorganized US Airways reported, on a GAAP basis, a net loss of $205 million, or ($1.54) per share for 2009, following a net loss of $2.2 billion, or ($22.11) per share, in 2008. As of Dec. 31, 2009, reorganized US Airways had total assets of $7,454,000,000 against debts of $7,809,000,000, for a stockholders' deficit of $355,000,000. In February, Moody's Investors Service affirmed the 'Caa1' Corporate Family and Probability of Default ratings of US Airways Group, Inc., and the SGL-4 Speculative Grade Liquidity rating. US Airways Group carries a 'CCC' issuer default rating from Fitch. US AIRWAYS: Had $1.3 Billion Cash at End of Year ------------------------------------------------ US Airways Group Inc. has filed its annual report on Form 10-K with the U.S. Securities and Exchange Commission. US Airways Group, Inc. Condensed Consolidated Balance Sheet As of December 31, 2009 Assets Current Assets Cash and cash equivalents $1,299,000,000 Restricted cash 0 Accounts receivable, net 285,000,000 Materials and supplies, net 227,000,000 Prepaid expenses and other 520,000,000 --------------- Total current assets 2,331,000,000 Property and equipment Flight equipment 3,852,000,000 Ground property and equipment 883,000,000 Less accumulated depreciation and amort. (1,151,000,000) --------------- 3,584,000,000 Equipment purchase deposits 112,000,000 --------------- Total property and equipment 3,696,000,000 Other assets Other intangibles, net 503,000,000 Restricted cash 480,000,000 Investments in marketable securities 203,000,000 Other assets, net 241,000,000 --------------- Total other assets 1,427,000,000 --------------- Total assets $7,454,000,000 Liabilities and Stockholders' Deficit Current liabilities Current maturities of debt and capital leases $502,000,000 Accounts payable 337,000,000 Air traffic liability 778,000,000 Accrued compensation and vacation 178,000,000 Accrued taxes 141,000,000 Other accrued expenses 853,000,000 --------------- Total current liabilities 2,789,000,000 Noncurrent liabilities and deferred credits Long-term debt and capital leases 4,024,000,000 Deferred gains and credits, net 377,000,000 Employee benefit liabilities and other 619,000,000 --------------- Total noncurrent liabilities & deferred credits 5,020,000,000 Stockholders' Deficit Common stock 2,000,000 Additional paid-in capital 2,107,000,000 Accumulated other comprehensive income 90,000,000 Accumulated deficit (2,541,000,000) Treasury stock (13,000,000) --------------- Total stockholders' equity (355,000,000) --------------- Total liabilities and stockholders' equity $7,454,000,000 US Airways Group, Inc. Condensed Consolidated Statement of Operations For Three Months Ended December 31, 2009 Operating revenues: Mainline passenger $1,660,000,000 Express passenger 647,000,000 Cargo 33,000,000 Other 286,000,000 --------------- Total operating revenues 2,626,000,000 Operating expenses: Aircraft fuel and related taxes 511,000,000 Loss(gain) on fuel hedging instruments, net 0 Salaries and related costs 512,000,000 Express expenses Fuel 171,000,000 Other 465,000,000 Aircraft rent 173,000,000 Aircraft maintenance 168,000,000 Other rent and landing fees 138,000,000 Selling expenses 91,000,000 Special items, net 33,000,000 Depreciation and amortization 57,000,000 Goodwill impairment 0 Other 293,000,000 --------------- Total operating expenses 2,612,000,000 Operating income(loss) 14,000,000 Non-operating income(expense): Interest income 6,000,000 Interest expense, net (75,000,000) Other, net (62,000,000) -------------- Total non-operating expense, net (131,000,000) -------------- Loss before income taxes (117,000,000) Income tax benefit (38,000,000) -------------- Net loss ($79,000,000) US Airways Group, Inc. Condensed Consolidated Statement of Operations For Twelve Months Ended December 31, 2009 Operating revenues: Mainline passenger $6,752,000,000 Express passenger 2,503,000,000 Cargo 100,000,000 Other 1,103,000,000 -------------- Total operating revenues 10,458,000,000 Operating expenses: Aircraft fuel and related taxes 1,863,000,000 Loss(gain) on fuel hedging instruments, net: Realized 382,000,000 Unrealized (375,000,000) Salaries and related costs 2,165,000,000 Express expenses Fuel 609,000,000 Other 1,910,000,000 Aircraft rent 695,000,000 Aircraft maintenance 700,000,000 Other rent and landing fees 560,000,000 Selling expenses 382,000,000 Special items, net 55,000,000 Depreciation and amortization 242,000,000 Goodwill impairment 0 Other 1,152,000,000 -------------- Total operating expenses 10,340,000,000 Operating income(loss) 118,000,000 Non-operating income(expense): Interest income 24,000,000 Interest expense, net (304,000,000) Other, net (81,000,000) -------------- Total non-operating expense, net (361,000,000) -------------- Loss before income taxes (243,000,000) Income tax benefit (38,000,000) -------------- Net loss ($205,000,000) US Airways Group, Inc. Condensed Consolidated Statements of Cash Flows For the Year Ended December 31, 2009 Cash flows from operating activities: Net income(loss) ($205,000,000) Adjustments to reconcile net income(loss) to net cash provided by(used in) operating activities: Depreciation and amortization 267,000,000 Gain on curtailment of pension benefit 0 Loss on dispositions of property and equipment 61,000,000 Auction rate security impairment 10,000,000 Asset impairment 21,000,000 Non-cash tax benefits (24,000,000) Change in fair value of fuel hedging instruments (375,000,000) Amortization of deferred credits and rent (62,000,000) Amortization of debt discount and issuance costs 56,000,000 Amortization of actuarial gains (6,000,000) Stock-based compensation 20,000,000 Debt extinguishment costs 6,000,000 Other (8,000,000) Changes in operating assets and liabilities: Decrease(increase) in restricted cash 186,000,000 Decrease in accounts receivable, net 8,000,000 Decrease(increase) in materials and supplies (29,000,000) Decrease(increase) in prepaid expenses 162,000,000 Decrease(increase) in other assets, net (14,000,000) Decrease(increase) in accounts payable (78,000,000) Increase(decrease) in air traffic liability 80,000,000 Increase(decrease) in accrued compensation 20,000,000 Decrease in accrued taxes (1,000,000) Increase(decrease)in other liabilities (36,000,000) -------------- Net cash provided by operating activities 59,000,000 Cash flows from investing activities: Purchases of property and equipment (683,000,000) Purchases of marketable securities 0 Sales of marketable securities 52,000,000 Decrease(increase) in long-term restricted cash 60,000,000 Proceeds from sale-leaseback transactions 76,000,000 ------------- Net cash provided by (used in) invest. activities (495,000,000) Cash flows from financing activities: Repayments of debt and capital lease obligations (407,000,000) Proceeds from issuance of debt 919,000,000 Deferred financing costs (14,000,000) Proceeds from issuance of common stock 203,000,000 -------------- Net cash provided by financing activities 701,000,000 Net increase(decrease) in cash and cash equiv. 265,000,000 Cash and cash equivalents at beginning period 1,034,000,000 -------------- Cash and cash equivalents at end of year $1,299,000,000 ============== A full-text copy of US Airway's Annual Report is available for free at http://ResearchArchives.com/t/s?5323 About US Airways US Airways, along with US Airways Shuttle and US Airways Express, operates more than 3,200 flights per day and serves more than 200 communities in the U.S., Canada, Europe, the Middle East, the Caribbean and Latin America. The airline employs more than 33,000 aviation professionals worldwide and is a member of the Star Alliance network, which offers its customers more than 17,000 daily flights to 916 destinations in 160 countries worldwide. And for the eleventh consecutive year, the airline received a Diamond Award for maintenance training excellence from the Federal Aviation Administration (FAA) for its Charlotte, North Carolina hub line maintenance facility. For more company information, visit http://www.usairways.com/ Under a Chapter 11 plan declared effective on March 31, 2003, USAir emerged from bankruptcy with the Retirement Systems of Alabama taking a 40% equity stake in the deleveraged carrier in exchange for $240 million infusion of new capital. US Airways and its subsidiaries filed another Chapter 11 petition on September 12, 2004 (Bankr. E.D. Va. Case No. 04-13820). Brian P. Leitch, Esq., Daniel M. Lewis, Esq., and Michael J. Canning, Esq., at Arnold & Porter LLP, and Lawrence E. Rifken, Esq., and Douglas M. Foley, Esq., at McGuireWoods LLP, represented the Debtors in their restructuring efforts. In the Company's second bankruptcy filing, it listed $8,805,972,000 in total assets and $8,702,437,000 in total debts. The USAir II bankruptcy plan became effective on September 27, 2005. The Debtors completed their merger with America West on the same date. (US Airways Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). * * * Reorganized US Airways reported, on a GAAP basis, a net loss of $205 million, or ($1.54) per share for 2009, following a net loss of $2.2 billion, or ($22.11) per share, in 2008. As of Dec. 31, 2009, reorganized US Airways had total assets of $7,454,000,000 against debts of $7,809,000,000, for a stockholders' deficit of $355,000,000. In February, Moody's Investors Service affirmed the 'Caa1' Corporate Family and Probability of Default ratings of US Airways Group, Inc., and the SGL-4 Speculative Grade Liquidity rating. US Airways Group carries a 'CCC' issuer default rating from Fitch. VION PHARMACEUTICALS: Plans to Auction Equipment ------------------------------------------------ Bill Rochelle at Bloomberg News reports that Vion Pharmaceuticals Inc. selected Heritage Global Partners as the auctioneer to sell equipment. Unless there's a better offer made, Heritage will guarantee a minimum of $300,000. Vion Pharmaceuticals Inc. filed a Chapter 11 plan on Feb. 16 to liquidate its assets and distribute available cash to unsecured creditors. The proposed disclosure statement projects that unsecured creditors owed a total of $69.2 million should recover between 13% and 17%. The Company has no secured debt. New Haven, Connecticut-based Vion Pharmaceuticals Inc. is a developer of cancer drug therapies. Vion Pharmaceuticals filed for Chapter 11 bankruptcy protection on December 17, 2009 (Bankr. D. Del. Case No. 09-14429). Christopher M. Samis, Esq., and John Henry Knight, Esq., at Richards, Layton & Finger, P.A., assist the Company in its restructuring effort. Roth Capital Partners, LLC, assisted the Debtor with the sale of all or key assets during the Chapter 11 proceeding. The Company listed $10,000,001 to $50,000,000 in assets and $50,000,001 to $100,000,000 in liabilities. WHITE BIRCH: Files for Bankruptcy, Has $140MM DIP Facility ---------------------------------------------------------- White Birch Paper Company and its subsidiaries have sought creditor protection in Canada under the Companies' Creditors Arrangement Act to preserve and maximize the value of the business and improve their capital structure. The Company's U.S. subsidiary, Bear Island Paper Company, also filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code in the Bankruptcy Court for the Eastern District of Virginia. The Company intends to continue to work with its lenders toward a financial restructuring as expeditiously as possible. White Birch expects operations to continue as usual and remains focused on serving its customers during and after the restructuring process. "This process is about fixing our capital structure," said Christopher Brant, President. "We remain committed to delivering the highest quality product to our many valued customers, and through this financial restructuring, we believe we will be better positioned to continue to do so well into the future. The filing today is an important step toward ensuring White Birch's future as a strong competitor with a healthy balance sheet." The Company is seeking approval in Canada and the U.S. of a $140 million in debtor-in-possession (DIP) financing with certain of its lenders, which is expected to provide more than adequate liquidity during the restructuring. In conjunction with today's filings, the Company requested customary relief to support its customers and employees during the process. As part of this relief, the Company asked the Court for permission to continue employee and customer programs without interruption. The Company remains in ongoing, productive dialogue with its creditors and other stakeholders regarding the terms of the restructuring. White Birch is seeking to retain Kirkland & Ellis as legal counsel in the U.S., Stikeman Elliott as legal counsel in Canada, Lazard as financial advisor, Ernst & Young Inc. as Canadian monitor and AlixPartners as restructuring advisor. The filing comes at the culmination of a year of detrimental economic conditions which negatively impacted the Company. Significant factors include a decline in demand for newsprint, combined with a decline in prices, as well as the increased strength of the Canadian dollar. Information about the White Birch restructuring is available at the Company's website, www.whitebirchpaper.com or via the Company's restructuring information line at (888) 232-0287. About White Birch White Birch Paper Company -- http://www.whitebirchpaper.com/-- is the second largest newsprint manufacturer in North America with operations in both Canada and the United States. W.R. GRACE: Gets Court's Nod to Seek Exit Financing --------------------------------------------------- Over the last two years, W.R. Grace & Co., Inc., and its units and their financial advisor, Blackstone Advisory Partners L.P., have maintained dialogue with prospective lenders concerning the terms and structuring of a potential exit financing package. Based on their analysis of the requirements of the Debtors' Plan of Reorganization and their post-emergence working capital and liquidity needs, the Debtors and Blackstone have concluded that the appropriate exit financing package is likely to include (i) one or more senior secured term loan facilities, (ii) a senior secured revolving credit facility, and (iii) debt securities in the form of notes issued pursuant to a registered public offering. In May 2009, the Debtors and Blackstone launched a formal competitive process to solicit exit financing proposals from leading financial institutions. Despite the progress in obtaining exit financing commitments, the Debtors, in consultation with Blackstone, decided not to enter into a commitment. Instead, in October 2009, the Debtors decided to consider engaging certain of the second-round prospective lenders to act as lead bookrunners, arrangers, or underwriters, and lead initial purchasers or lead placement agents for the eventual exit financing on a "best efforts" basis, Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, relates. The Debtors accordingly sought and obtained approval from the Bankruptcy Court to enter into two engagement letters providing for a "best efforts" engagement to provide exit financing by with these exit lenders: (1) the Loan Engagement Letter with Deutsche Bank Securities Inc., and Goldman Sachs Lending Partners LLC, as arrangers; and (2) the Bond Engagement Letter, which relates to any underwritten offering or private placement of debt securities issued in connection with the transaction, or Permanent Securities, and to any bar loan or similar debt financing other than the Facilities and the Permanent Securities, or the Permanent Loans with Goldman, Sachs & Co., and DBSI, as investment banks. Under the Loan Engagement Letter, the Arrangers are "exclusively authorized by the Debtors to act as joint lead arrangers and joint bookrunners in connection with the Facilities." The Bond Engagement Letter, on the other hand, provides that the Debtors will not offer or sell any Permanent Securities to, or incur any Permanent Loans or borrow any similar debt from, any third party during the term of the engagement without the prior consent of GS&Co., and DBSI. The Court also ruled that the Debtors' payment obligations arising under the Engagement Letters will be entitled to priority as administrative claims under Sections 503(b) and 507(a)(1) of the Bankruptcy Code, whether or not the Loan Documents are executed or any of the Exit Facilities are funded. Pursuant to the Engagement Letters, the Debtors will pay: (i) each Arranger an arrangement fee equal to a percentage of the maximum face amount of the Facilities which will be payable on the date of first funding under the Facilities; (ii) a fee from the Debtors in a specified amount, or the Bar Alternate Transaction Fee, in the event that, at any time prior to one year after the execution of the Loan Engagement Letter, the Debtors complete any Exit Financing that is a bar financing, loan, credit facility or similar financing in which Arranger or any of its affiliates does not act as a joint lead arranger and joint lead booker; and (iii) the Bond Engagement Letter Fee as compensation for u underwriting, purchasing or privately placing any debt securities. The Debtors will also reimburse expenses under the Exit Financing Agreements. The Debtors also obtained the Court's permission to file the Engagement Letters under seal due to confidentiality concerns. No objections to their Motion were filed, the Debtors noted. About W.R. Grace Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA) -- http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally. The Company and its debtor-affiliates filed for Chapter 11 protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139). David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP, represent the Debtors in their restructuring efforts. The Debtors hired Blackstone Group, L.P., for financial advice. PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Capstone Corporate Recovery LLC for financial advice. David T. Austern, the legal representative of future asbestos personal injury claimants, is represented by Orrick Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official Committee of Asbestos Personal Injury Claimants. The Asbestos Committee of Property Damage Claimants tapped Scott Baena, Esq., and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod, LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel, LLP, represents the Official Committee of Equity Security Holders. W.R. Grace and its debtor affiliates, with the support of the Official Committee of Asbestos Personal Injury Claimants, the Asbestos PI Future Claimants' Representative and the Official Committee of Equity Security Holders, have submitted a proposed Chapter 11 plan of reorganization. The Chapter 11 plan is built around an April 2008 settlement for all present and future asbestos personal injury claims, and a subsequent settlement for asbestos property damage claims. The Plan confirmation hearing wrapped up on January 25. Bankruptcy Creditors' Service, Inc., publishes W.R. Grace Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) W.R. GRACE: Plan Proponents Resolve Kaneb, et al., Objections ------------------------------------------------------------- W.R. Grace & Co., Inc., the Official Committee of Asbestos Personal Injury Claimants, the Asbestos Personal Injury Future Claimants' Representative, and the Official Committee of Equity Security Holders as the Plan Proponents, reached separate stipulations with various parties that agreed to withdraw their objections to the confirmation of the Joint Chapter 11 Plan of Reorganization, conditioned on the incorporation of certain provisions to the proposed Plan confirmation order. Kaneb Pipe Line Operating Partnership, L.P., now known as NuStar Pipeline Operating Partnership L.P, and Support Terminal Services, Inc., now known as NuStar Terminal Services, Inc., conditioned their support to the Plan confirmation on the provision that neither the Successor Claims Injunction nor the Asbestos Insurance Entity Injunction, as defined in the Plan, bars the NuStar Entities from pursuing claims against any Asbestos Insurance Entities pursuant to the operations coverage issued by certain asbestos insurance companies with respect to alleged liability of the NuStar Entities for claims that are not Asbestos PI Claims or Asbestos PD Claims. Nothing in the Plan will permit the NuStar Entities to pursue Asbestos Claims. The environmental claims asserted by Kaneb against certain Asbestos Insurance Entities relating to (i) alleged jet fuel releases from the pipeline which previously served Otis Air Force Base on the Massachusetts Military Reservation in Sandwich, and (ii) alleged jet fuel releases from the pipeline in Macon, Georgia serving Warner Robins Air Force Base -- but not relating to asbestos -- are recognized not to be enjoined by either the Asbestos PI Channeling Injunction or the Asbestos Property Damage Channeling Injunction. The Stipulation was subsequently amended to provide that the Debtors agree to recognize, defend, indemnify and hold harmless the Sealed Air Indemnified Parties or the Fresenius Indemnified Parties from and against damages, as defined in the Plan. Continental Casualty Company, Transportation Insurance Company and Maryland Casualty Company proposed that the Asbestos PI Trust Distribution Procedures under the Plan will be amended to provide that: * Indirect PI Trust Claims will not be disallowed by the Court under Section 502(e) of the Bankruptcy Code on the grounds that such claims were contingent or unliquidated; and * Section 502(e) will not be applied to determine the validity and amount of Indirect PI Trust Claims and Indemnified Insurer TDP Claim. Seaton Insurance Company and OneBeacon America Insurance Company also agreed to withdraw their Plan Objections in light of these agreements with the Plan Proponents: (1) All Seaton Claims arising under or related to the Settlement Agreement, Release and Indemnification/Hold Harmless Agreement between W. R. Grace & Co.-Conn., W. R. Grace & Co., and Unigard Security Insurance Company dated as of May 15, 1995 and August 6, 1992, that are Asbestos PI Claims or Asbestos PD Claims will be subject to the Asbestos PI Channeling Injunction or the Asbestos PD Injunction and will be treated as timely Class 6 Claims or Class 7A Claims under the Joint Plan. (2) All claims by Seaton against Fresenius Medical Care Holdings, Inc. or any of the Fresenius Indemnified Parties arising under or related to the 1995 Agreement that are Asbestos PI Claims or Asbestos PD Claims shall be subject to the Asbestos PI Channeling Injunction or the Asbestos PD Injunction and will be treated as Class 6 Claims or Class 7A Claims. (3) All claims by Seaton against Fresenius arising under or related to the Agreement and Settlement Agreement and Release between W. R. Grace & Co., W. R. Grace & Co., and Unigard Security Insurance Company, dated as of March 5, 1997, and Settlement Agreement between W. R. Grace & Co., W. R. Grace & Co.-Conn., Commercial Union Insurance Company, and American Employers' Insurance Company, dated as of May 10, 1993, that are not Asbestos PI Claims or Asbestos PD Claims will be enjoined and otherwise waived and released by Seaton as against Fresenius. (4) Grace agrees to use good faith efforts to obtain releases from the NuStar Entities and Samson Hydrocarbons Company in favor of Grace's insurers with respect to claims arising from that particular oil Otis Pipeline. The Plan does not release the Sealed Air Corporation from any contractual indemnification obligation that they may have to OneBeacon with respect to environmental claims asserted against the policies covered by the Settlement Agreement and Release entered into between W. R. Grace & Co.-Conn., W. R. Grace & Co., American Employers' Insurance Company, and Employers Commercial Union Insurance Company, dated as of December 17, 1996, except where any obligation is, gives rise to, is based on, arises out of, or otherwise relates to any Asbestos Claim. The Plan Proponents and Insurers also stipulated regarding reservations from the Injunction for the benefit of holders of Grace-Related and OneBeacon Claims. * * * Judge Fitzgerald approved the Plan Proponents' stipulation with certain insurers which provide for Plan modifications that eliminate the Insurers' objections with respect to neutrality. As a result, the Insurers have withdrawn their Neutrality Objections except as they relate to their right to litigate certain issues, including, among other things, Asbestos Insurance Rights, claims, indemnifications and injunction provisions under the Plan. The Insurers consist of Continental Casualty Company; Transportation Insurance Company; Federal Insurance Company; Seaton Insurance Company; Government Employees Insurance Company; Republic Insurance Company, now known as Starr Indemnity & Liability Company; and AXA Belgium as successor to Royale Belge. The Debtors noted that they received no objections to their Neutrality Stipulation with the Insurers. About W.R. Grace Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA) -- http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally. The Company and its debtor-affiliates filed for Chapter 11 protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139). David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP, represent the Debtors in their restructuring efforts. The Debtors hired Blackstone Group, L.P., for financial advice. PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Capstone Corporate Recovery LLC for financial advice. David T. Austern, the legal representative of future asbestos personal injury claimants, is represented by Orrick Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official Committee of Asbestos Personal Injury Claimants. The Asbestos Committee of Property Damage Claimants tapped Scott Baena, Esq., and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod, LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel, LLP, represents the Official Committee of Equity Security Holders. W.R. Grace and its debtor affiliates, with the support of the Official Committee of Asbestos Personal Injury Claimants, the Asbestos PI Future Claimants' Representative and the Official Committee of Equity Security Holders, have submitted a proposed Chapter 11 plan of reorganization. The Chapter 11 plan is built around an April 2008 settlement for all present and future asbestos personal injury claims, and a subsequent settlement for asbestos property damage claims. The Plan confirmation hearing wrapped up on January 25. Bankruptcy Creditors' Service, Inc., publishes W.R. Grace Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) W.R. GRACE: Signs Amendments to Credit & Hedge Agreements --------------------------------------------------------- W.R. Grace & Co. and its debtor-affiliates previously sought the authority of Judge Judith K. Fitzgerald of the United States Bankruptcy Court for the District of Delaware to enter into: (1) the new letter of credit facility, as documented by the Postpetition Letter of Credit Facility Agreement among certain financial institutions as Issuers; Bank of America, N.A., or BANA, as Agent; and W.R. Grace & Co.- Conn., as Account Party, with a commitment of $100,000,000; (2) a new International Swap and Derivatives Association or ISDA 2002 Master Agreement and Schedule to the 2002 Master Agreement between Grace and BANA, governing Grace's current and future hedging arrangements in the ordinary course of its risk management activities, which will be secured through the LOC Agreement by two dedicated cash collateral accounts separate from the cash collateral account securing the L/C Facility transactions; and (3) certain cash collateral control agreements with BANA, which will provide for the handling and disposition of funds in three separate cash collateral accounts. The Transactions, according to the Debtors, will permit them to terminate their existing debtor-in-possession financing facility, which -- as documented by the Postpetition Loan and Security Agreement dated April 1, 2001, as amended and modified -- currently provides for a financing commitment of up to $165 million, including a letter of credit sub-commitment of $150 million. As of December 31, 2009, the DIP Facility had (i) no outstanding draws or other loans, and (ii) Existing Letters of Credit in the aggregate face amount of $71 million. As a result of subsequent discussions, the Debtors and the Agent have agreed to certain modifications to the L/C Agreement to embody changes, as agreed to by all parties-in-interest, consisting of: (1) amendment of the description of the Debtors' need to enter into the L/C Facility; (2) deletion of references to the "Interim Order" and Section 364(d) of the Bankruptcy Code; (3) addition of these provisions: * The superpriority claims of the Agent, the Letter of Credit Issuers and any other holders of the Obligations arising from the Obligations will be solely to the extent of the Collateral, and not to any other property of the Debtors, on the terms and conditions provided for in the Facility Agreement; and * The Liens of the Agent will attach solely to the Collateral, and not to any other property of the Debtors, on the terms and conditions provided for in the Facility Agreement; and (4) addition of references regarding the scope of superpriority administrative claims. The key changes to the Facility Agreement agreed to by all constituencies include: * deletion of the word "solely" from the carve-out from indemnification for gross negligence and willful misconduct in various indemnifications; * addition of the term "material" in reference to competing superpriority claims and liens; and * addition of the words "reasonable, documented" to conform to the definition of "Attorney Costs." Copies of the revised version of the Proposed Facility Order and the Revised Facility Agreement have been provided to the United States Trustee, the official committees in the Debtors' cases, the Future Claimants' Representatives and the Agent -- all of whom is agreeable to the Revised Documents. The Debtors noted that no objections have been filed with respect to their request. About W.R. Grace Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA) -- http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally. The Company and its debtor-affiliates filed for Chapter 11 protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139). David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP, represent the Debtors in their restructuring efforts. The Debtors hired Blackstone Group, L.P., for financial advice. PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Capstone Corporate Recovery LLC for financial advice. David T. Austern, the legal representative of future asbestos personal injury claimants, is represented by Orrick Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official Committee of Asbestos Personal Injury Claimants. The Asbestos Committee of Property Damage Claimants tapped Scott Baena, Esq., and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod, LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel, LLP, represents the Official Committee of Equity Security Holders. W.R. Grace and its debtor affiliates, with the support of the Official Committee of Asbestos Personal Injury Claimants, the Asbestos PI Future Claimants' Representative and the Official Committee of Equity Security Holders, have submitted a proposed Chapter 11 plan of reorganization. The Chapter 11 plan is built around an April 2008 settlement for all present and future asbestos personal injury claims, and a subsequent settlement for asbestos property damage claims. The Plan confirmation hearing wrapped up on January 25. Bankruptcy Creditors' Service, Inc., publishes W.R. Grace Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) * Banks in FDIC's Problem List Rise to 702 at End of 2009 --------------------------------------------------------- In its quarterly banking profile, the Federal Deposit Insurance Corp. said that the number of institutions on its "Problem List" rose to 702 at the end of 2009, from 552 at the end of the third quarter and 252 at the end of 2008. The FDIC, in its February 23 report, said that total assets of "problem" institutions were $402.8 billion at yearend 2009, compared with $345.9 billion at the end of September and $159.0 billion at the end of 2008. Both the number and assets of "problem" institutions are at the highest level since June 30, 1993. The Deposit Insurance Fund decreased by $12.6 billion during the fourth quarter to a negative $20.9 billion (unaudited) primarily because of $17.8 billion in additional provisions for bank failures. Also, unrealized losses on available-for-sale securities combined with operating expenses reduced the fund by $692 million. Accrued assessment income added $3.1 billion to the fund during the quarter, and interest earned, combined with termination fees on loss share guarantees and surcharges from the Temporary Liquidity Guarantee Program added $2.8 billion. For the year, the fund balance shrank by $38.1 billion, compared to a $35.1 billion decrease in 2008. The DIF's reserve ratio was negative 0.39% on December 31, 2009, down from negative 0.16% on September 30, 2009, and 0.36% a year ago. The December 31, 2009, reserve ratio is the lowest reserve ratio for a combined bank and thrift insurance fund on record. Forty-five insured institutions with combined assets of $65.0 billion failed during the fourth quarter of 2009, at an estimated cost of $10.2 billion. For all of 2009, 140 FDIC- insured institutions with assets of $169.7 billion failed, at an estimated cost of $37.4 billion. This was the largest number of failures since 1990 when 168 institutions with combined assets of $16.9 billion failed. On November 12, 2009, the FDIC adopted a final rule amending the assessment regulations to require insured depository institutions to prepay their quarterly risk-based assessments for the fourth quarter of 2009 and for all of 2010, 2011, and 2012 on December 30, 2009, along with each institution's risk-based assessment for the third quarter of 2009. The FDIC is asking banks to prepay three years of premiums on Dec. 30 to raise $45 billion for the fund. "Problem" institutions are those institutions with financial, operational, or managerial weaknesses that threaten their continued financial viability. They are rated by the FDIC or Office of the Thrift Supervision as either a "4" or "5", based on a scale of 1 to 5 in ascending order of supervisory concern. The Problem List is not divulged to the public. No advance notice is given to the public when a financial institution is closed. Problem Institutions Failed Institutions -------------------- ------------------- Year Number Assets (Mil) Number Assets (Mil) ---- ------ ------------ ------ ------------ 2009 702 $402,800 140 $169,700 2008 252 $159,405 25 $371,945 2007 76 $22,189 3 $2,615 2006 50 $8,265 0 $0 2005 52 $6,607 0 $0 2004 80 $28,250 4 $170 A copy of the FDIC's Quarterly Banking Profile for the quarter ended Dec. 31, 2009, is available for free at: http://bankrupt.com/misc/FDIC_QBP_Q4_09.pdf * Baker Hostetler Snags Arent Fox Bankruptcy Partner ---------------------------------------------------- Baker Hostetler announced the addition of Christopher J. Giaimo to its Bankruptcy, Restructuring and Creditors' Rights Practice team. Mr. Giaimo, who was most recently a partner with Arent Fox, will be resident in Baker Hostetler's Washington, D.C., office. Mr. Giaimo's practice focuses on financial restructuring and workout proceedings on behalf of financially distressed companies or their creditors. In addition to representation of Official Committees of Unsecured Creditors in Chapter 11 cases, Mr. Giaimo has extensive experience representing various debtors through the Chapter 11 process. He also represents a vast number of clients in the enforcement of a broad spectrum of creditors' rights in secured, public or private, and taxable and tax-exempt debt through the representation of lenders and investor syndicates, indenture trustees, creditor trustees, liquidation trustees and plan administrators. Mr. Giaimo is a member of the American Bankruptcy Institute and the Maryland Bankruptcy Bar Association. He is Chair of the Bankruptcy Committee of the Corporation, Finance & Securities Law Section of the DC Bar Association. "We are pleased to welcome Chris Giaimo to Baker Hostetler," said Jeffrey Paravano, Managing Partner of the firm's Washington, D.C., office. "Chris has extensive experience and will be a terrific asset to clients." "In the current business climate where restructurings and insolvencies continue to proliferate, the timing of Chris joining us could not be better," said Joseph Hutchinson, National Chair of Baker Hostetler's Bankruptcy, Restructuring and Creditors' Rights Practice Team. "It is important for us to maintain our strong presence in the distressed arena; Chris will be an important complement to our strong team of attorneys and will add important synergies to our practice," according to Hutchinson. About Baker Hostetler Founded more than 90 years ago in 1916, Baker Hostetler is among the nation's 100 largest law firms with 600 attorneys coast to coast. The firm has offices in Chicago, Cincinnati, Cleveland, Columbus, Costa Mesa, Denver, Houston, Los Angeles, New York, Orlando and Washington, D.C. Its five primary practice groups are Business, Employment, Intellectual Property, Litigation and Tax. * Becker & Poliakoff NY Office Welcomes Atty. Helen Davis Chaitman ------------------------------------------------------------------ Becker & Poliakoff, a diversified commercial law firm with more than 130 attorneys in 13 Florida offices, New York City, New Jersey, Nassau (Bahamas) and Prague, today announced that commercial litigation attorney Helen Davis Chaitman has joined the firm as a partner in its Commercial Litigation Practice Group in New York City. Ms. Chaitman comes to Becker & Poliakoff from Phillips Nizer LLP in New York. Ms. Chaitman is a nationally recognized litigator with a diverse trial practice in the areas of lender liability, bankruptcy, bank fraud, RICO, professional malpractice, trusts and estates and white collar defense. She is the author of The Law of Lender Liability (Warren, Gorham & Lamont) the leading treatise on lender liability in which she coined the term "lender liability," and, since 1987, has authored the monthly newsletter, The Lender Liability Law Report. In 1995, she was named one of the nation's top ten litigators by the National Law Journal for a jury verdict she obtained in an accountants' malpractice case. Since early 2009, Ms. Chaitman has been an outspoken advocate for investors in Bernard L. Madoff Investment Securities LLC and has led a lobbying effort in Congress advocating protections for Madoff investors. Her blog, chaitmanonmadoff.com, includes her congressional testimony, related court decisions and other key documents. "I am thrilled to be joining Becker & Poliakoff," said Ms. Chaitman. "As one of the largest Florida based law firms, with offices in New York and New Jersey, they have the resources and capabilities I need to support the work I am doing for my Madoff and other clients." "Helen Chaitman has a tremendous record of accomplishment both inside and outside the courtroom," said Alan Becker, managing partner, Becker & Poliakoff. "Her depth of knowledge and vast experience will further strengthen our ability to service clients in all of our offices." "Helen is a tremendous addition to our New York office and will support the strategic growth of the Firm's Litigation Practice in New York, Florida, and nationally," said Victor J. DiGioia, Managing Partner of the New York Office. A Madoff victim herself, Ms. Chaitman has devoted the 2009 year working, largely on a pro bono basis, for hundreds of Madoff investors. In late 2009, she met with 55 Senators, Representatives, and/or the aides, advocating both tax relief and anti-clawback legislation to protect Madoff investors. On December 9, 2009, Ms. Chaitman testified concerning the plight of Madoff investors before the House Financial Services Committee's Subcommittee on Capital Markets, Insurance, and Government-Sponsored Enterprises. She is litigating against Irving H. Picard, Trustee, on several different issues and represents numerous victims of Madoff's scheme who are subject to "clawback" claims asserted by Picard. Ms. Chaitman practices in New York and New Jersey and has been admitted to practice pro haec vice in numerous jurisdictions throughout the United States. She is a graduate of Bryn Mawr College and received her J.D. degree from Rutgers University. About Becker & Poliakoff Becker & Poliakoff is a diverse commercial law firm with more than 130 attorneys in 13 Florida offices, New York City, New Jersey, Nassau, Bahamas, Prague and affiliated international offices. Celebrating its thirty-seventh (37th) year of serving clients, the firm has seven primary areas of practice: Real Estate, Construction, Community Association, Customs & International Trade, Commercial Litigation, Corporate & Securities, and Government Law & Lobbying. For more information, visit: www.becker-poliakoff.com. * Lisa Hu Barquist Joins Payton & Associates LLC ------------------------------------------------ Lisa Hu Barquist has joined Payton & Associates LLC, a Miami commercial litigation firm. She represents corporate and individual clients in commercial litigation, business transactions, and real estate. An experienced trial lawyer, Lisa has been practicing law for 21 years. Prior to joining Payton & Associates, she was principal of her law firm, Hu Barquist & Associates P.A., where she represented U.S. and Chinese clients in complex commercial transactional and litigation matters; special counsel to Duane Morris LLP; and a federal prosecutor who litigated health care fraud and narcotics cases on behalf of the United States in the Southern District of Florida and Western District of New York. Born in Taiwan, Lisa is fluent in spoken Mandarin Chinese. She serves as Vice Chair of the Miami Dade County Asian Advisory Board, Director and Officer of the Florida China Chamber of Commerce, and Member of the Taiwan Business Association and Chinese Cultural Foundation. She is an adjunct professor of Business Law at Miami Dade College. Lisa was awarded her J.D. in 1989 from the University of Southern California Law Center, where she was editor of the Law Review; and her B.A. from Yale University in 1983, where she was elected Regent to Yale College Council. She is admitted to practice in State and Federal Courts in California, New York, Florida, and Washington, D.C. About Payton & Associates Payton & Associates LLC is a Miami commercial litigation firm with a reputation for professionalism and successful results. The firm specializes in litigating complex business matters including lender liability, construction litigation, commercial foreclosures, commercial real estate litigation, bankruptcy adversary proceedings, professional liability, condominium litigation, and appellate law. Harry Payton, managing member of the firm, has over 30 years of courtroom experience. He is one of the few Florida attorneys board certified by the Florida Bar in both civil trial and business litigation. For more information about Payton & Associates, please visit www.payton-law.com, or call 305.372.3500. * Chapter 11 Cases with Assets & Liabilities Below $1,000,000 ------------------------------------------------------------- Recent Chapter 11 cases filed with assets and liabilities below $1,000,000: In Re Pacific Sun Entertainment Inc. Bankr. N.D. Calif. Case No. 10-50019 Chapter 11 Petition Filed January 4, 2010 See http://bankrupt.com/misc/canb10-50019p.pdf See http://bankrupt.com/misc/canb10-50019c.pdf In Re Den-7817 L.P. Bankr. W.D. Texas Case No. 10-10031 Chapter 11 Petition Filed January 4, 2010 Filed As Pro Se In Re H2K, Inc. dba Huntington Learning Center Bankr. Ariz. Case No. 10-00121 Chapter 11 Petition Filed January 5, 2010 See http://bankrupt.com/misc/azb10-00121.pdf In Re Creative Financial Solutions, LLC Bankr. Ariz. Case No. 10-03809 Chapter 11 Petition Filed February 16, 2010 Filed As Pro Se In Re Harold J Perkins Bankr. C.D. Calif. Case No. 10-15467 Chapter 11 Petition Filed February 16, 2010 See http://bankrupt.com/misc/cacb10-15467.pdf In Re Jay Tien Chiang Bankr. C.D. Calif. Case No. 10-15473 Chapter 11 Petition Filed February 16, 2010 Filed As Pro Se In Re Lesser Investments, LLC Bankr. C.D. Calif. Case No. 10-11694 Chapter 11 Petition Filed February 16, 2010 See http://bankrupt.com/misc/cacb10-11694.pdf In Re RE/MAX Marquee Partners, Inc. fba CF Real Estate Loans, Inc. dba RE/MAX All Cities Realty dba RE/MAX Beverly Hills dba RE/MAX Marquee Partners dba RE/MAX Beach Cities Realty dba RE/MAX Westside Properties dba RE/MAX West Los Angeles dba RE/MAX Lake Arrowhead dba RE/MAX Crestline dba RE/MAX Hollywood Hills dba RE/MAX Sunset Blvd Bankr. C.D. Calif. Case No. 10-15425 Chapter 11 Petition Filed February 16, 2010 See http://bankrupt.com/misc/cacb10-15425.pdf In Re Paul F. Dumas Jacklyn J. Dumas Bankr. E.D. Calif. Case No. 10-90518 Chapter 11 Petition Filed February 16, 2010 See http://bankrupt.com/misc/caeb10-90518.pdf In Re 453 Sixth Avenue, LLC, a Delaware Limited Liability Company Bankr. S.D. Calif. Case No. 10-02285 Chapter 11 Petition Filed February 16, 2010 See http://bankrupt.com/misc/casb10-02285.pdf In Re Stanley Glemaud dba The Blue Pearl Restaurant dba Akirka Holding Corporation fdba AHC Property Ventures, LLC Karlene L. Chacon-Glemaud aka Karlene L. Glemaud Bankr. Conn. Case No. 10-30432 Chapter 11 Petition Filed February 16, 2010 See http://bankrupt.com/misc/ctb10-30432.pdf In Re Collette P. Gunby Bankr. N.D. Ga. Case No. 10-64415 Chapter 11 Petition Filed February 16, 2010 See http://bankrupt.com/misc/ganb10-64415.pdf In Re Vincent John Boos Mary Ann T. Boos Bankr. N.D. Ga. Case No. 10-64478 Chapter 11 Petition Filed February 16, 2010 See http://bankrupt.com/misc/ganb10-64478.pdf In Re The Staffing Difference Nurse Agency, Inc. Bankr. C.D. Ill. Case No. 10-80447 Chapter 11 Petition Filed February 16, 2010 See http://bankrupt.com/misc/ilcb10-80447.pdf In Re Two Guys Printing LLC Bankr. W.D. Ky. Case No. 10-30744 Chapter 11 Petition Filed February 16, 2010 See http://bankrupt.com/misc/kywb10-30744.pdf In Re In Young Lee Bankr. Nev. Case No. 10-12425 Chapter 11 Petition Filed February 16, 2010 See http://bankrupt.com/misc/nvb10-12425.pdf In Re Cheryl Merrill dba Merrill's Convenience Center Bankr. N.H. Case No. 10-10630 Chapter 11 Petition Filed February 16, 2010 See http://bankrupt.com/misc/nhb10-10630.pdf In Re Camille Philippe, MD PC Bankr. E.D. N.Y. Case No. 10-41194 Chapter 11 Petition Filed February 16, 2010 See http://bankrupt.com/misc/nyeb10-41194.pdf In Re Cofire Paving Corp. Bankr. E.D. N.Y. Case No. 10-41193 Chapter 11 Petition Filed February 16, 2010 See http://bankrupt.com/misc/nyeb10-41193.pdf In Re K&S Cafeteria at Tower, Inc. Bankr. E.D. N.C. Case No. 10-01185 Chapter 11 Petition Filed February 16, 2010 See http://bankrupt.com/misc/nceb10-01185.pdf In Re Paul Stephen Brady Melody Lane Brady Bankr. W.D. N.C. Case No. 10-10171 Chapter 11 Petition Filed February 16, 2010 See http://bankrupt.com/misc/ncwb10-10171.pdf In Re Allied Solutions Group, Inc. Bankr. N.D. Ohio Case No. 10-11081 Chapter 11 Petition Filed February 16, 2010 See http://bankrupt.com/misc/ohnb10-11081.pdf In Re Douglas P. Fay Bankr. N.D. Ohio Case No. 10-30748 Chapter 11 Petition Filed February 16, 2010 See http://bankrupt.com/misc/ohnb10-30748.pdf In Re Home Sweet Home Sales, Inc. Bankr. Ore. Case No. 10-31099 Chapter 11 Petition Filed February 16, 2010 See http://bankrupt.com/misc/orb10-31099.pdf In Re Wilrich, Inc. Bankr. E.D. Pa. Case No. 10-11094 Chapter 11 Petition Filed February 16, 2010 See http://bankrupt.com/misc/paeb10-11094.pdf In Re Woodstock Management Corporation Bankr. E.D. Pa. Case No. 10-11079 Chapter 11 Petition Filed February 16, 2010 Filed As Pro Se In Re Contract Furniture Services, Inc. Bankr. W.D. Texas Case No. 10-10395 Chapter 11 Petition Filed February 16, 2010 See http://bankrupt.com/misc/txwb10-10395.pdf In Re CFR Investments, L.L.C. aka CFR Investment, L.L.C. Bankr. Utah Case No. 10-21587 Chapter 11 Petition Filed February 16, 2010 See http://bankrupt.com/misc/utb10-21587.pdf In Re Hertzler Clearing and Grading Corporation Bankr. E.D. Va. Case No. 10-50263 Chapter 11 Petition Filed February 16, 2010 See http://bankrupt.com/misc/vaeb10-50263.pdf In Re The Royal Investment Firm, LLC dba The Royal Investment Firm Bankr. E.D. Va. Case No. 10-30949 Chapter 11 Petition Filed February 16, 2010 See http://bankrupt.com/misc/vaeb10-30949.pdf In Re Getnet, Inc. Bankr. Ariz. Case No. 10-03950 Chapter 11 Petition Filed February 17, 2010 Filed As Pro Se In Re Deborah Joy O'Grady Bankr. C.D. Calif. Case No. 10-14330 Chapter 11 Petition Filed February 17, 2010 See http://bankrupt.com/misc/cacb10-14330.pdf In Re Gordon James Grill & Bar, Inc. Bankr. C.D. Calif. Case No. 10-11966 Chapter 11 Petition Filed February 17, 2010 See http://bankrupt.com/misc/cacb10-11966.pdf In Re Plastic Engineering Technologies Bankr. C.D. Calif. Case No. 10-14248 Chapter 11 Petition Filed February 17, 2010 Filed As Pro Se In Re Robert Pyke Bankr. C.D. Calif. Case No. 10-15706 Chapter 11 Petition Filed February 17, 2010 See http://bankrupt.com/misc/cacb10-15706.pdf In Re David Paul Schwenke aka David P. Schwenke Celia Sherrie Schwente aka Cecilia Schwenke Bankr. E.D. Calif. Case No. 10-23673 Chapter 11 Petition Filed February 17, 2010 See http://bankrupt.com/misc/caeb10-23673.pdf In Re Melchor Celeridad Gorospe Lucila Monte Gorospe Bankr. N.D. Calif. Case No. 10-41681 Chapter 11 Petition Filed February 17, 2010 Filed As Pro Se In Re Charlie's Roofing & Waterproofing, Inc. Bankr. M.D. Fla. Case No. 10-03324 Chapter 11 Petition Filed February 17, 2010 See http://bankrupt.com/misc/flmb10-03324.pdf In Re Pinkheart, Inc. dba Pink Heart Accessories Bankr. N.D. Ga. Case No. 10-64600 Chapter 11 Petition Filed February 17, 2010 See http://bankrupt.com/misc/ganb10-64600.pdf In Re SBB Properties, LLC Bankr. Nev. Case No. 10-12485 Chapter 11 Petition Filed February 17, 2010 See http://bankrupt.com/misc/nvb10-12485.pdf In Re A Copy A Second, Inc. Bankr. S.D. N.Y. Case No. 10-35413 Chapter 11 Petition Filed February 17, 2010 See http://bankrupt.com/misc/nysb10-35413.pdf In Re Dino Silice Brunetti Anastasia Brunetti Bankr. W.D. N.C. Case No. 10-10174 Chapter 11 Petition Filed February 17, 2010 Filed As Pro Se In Re Donald Wesley Dennett Bankr. Utah Case No. 10-21685 Chapter 11 Petition Filed February 17, 2010 See http://bankrupt.com/misc/utb10-21685.pdf In Re Paul R. Coronado, Jr. Laura Dee Coronado Bankr. Ariz. Case No. 10-04080 Chapter 11 Petition Filed February 18, 2010 See http://bankrupt.com/misc/azb10-04080p.pdf See http://bankrupt.com/misc/azb10-04080c.pdf In Re 17623 Martha St. LLC Bankr. C.D. Calif. Case No. 10-11815 Chapter 11 Petition Filed February 18, 2010 Filed As Pro Se In Re Irvine Brothers, Inc. dba Ws China Bistro Bankr. C.D. Calif. Case No. 10-12014 Chapter 11 Petition Filed February 18, 2010 See http://bankrupt.com/misc/cacb10-12014.pdf In Re Eurostone Marble and Granite, Inc. Bankr. M.D. Fla. Case No. 10-03379 Chapter 11 Petition Filed February 18, 2010 See http://bankrupt.com/misc/flmb10-03379.pdf In Re Paul Shimko Diana San Juan Shimko Bankr. Idaho Case No. 10-00363 Chapter 11 Petition Filed February 18, 2010 See http://bankrupt.com/misc/idb10-00363p.pdf See http://bankrupt.com/misc/idb10-00363c.pdf In Re Lay Trucking Company, Inc. Bankr. N.D. Ind. Case No. 10-30545 Chapter 11 Petition Filed February 18, 2010 See http://bankrupt.com/misc/innb10-30545p.pdf See http://bankrupt.com/misc/innb10-30545c.pdf In Re 107 East 25th Street, LLC Bankr. Md. Case No. 10-13146 Chapter 11 Petition Filed February 18, 2010 See http://bankrupt.com/misc/mdb10-13146.pdf In Re Asa K. Seeley, II Lynne A. Seeley Bankr. Mass. Case No. 10-11636 Chapter 11 Petition Filed February 18, 2010 See http://bankrupt.com/misc/mab10-11636.pdf In Re Grant Hansel aka Grant Hansel, Jr. Bankr. Mass. Case No. 10-11577 Chapter 11 Petition Filed February 18, 2010 See http://bankrupt.com/misc/mab10-11577.pdf In Re James T. Scamby Bankr. Mass. Case No. 10-11633 Chapter 11 Petition Filed February 18, 2010 See http://bankrupt.com/misc/mab10-11633.pdf In Re Aubrey Earnest Foster dba Bongo's Bistro dba Jessie's Old Place Bankr. W.D. Mo. Case No. 10-60325 Chapter 11 Petition Filed February 18, 2010 See http://bankrupt.com/misc/mowb10-60325.pdf In Re Jim's Bagel & Bistro, LLC Bankr. N.J. Case No. 10-14482 Chapter 11 Petition Filed February 18, 2010 See http://bankrupt.com/misc/njb10-14482.pdf In Re White Plains Rd. Realty, Corp. Bankr. S.D. N.Y. Case No. 10-10803 Chapter 11 Petition Filed February 18, 2010 See http://bankrupt.com/misc/nysb10-10803.pdf In Re Century Drive LHDH LLC Bankr. E.D. N.C. Case No. 10-01253 Chapter 11 Petition Filed February 18, 2010 See http://bankrupt.com/misc/nceb10-01253.pdf In Re Elite Collision And Frame, Inc. Bankr. N.D. Ohio Case No. 10-30793 Chapter 11 Petition Filed February 18, 2010 See http://bankrupt.com/misc/ohnb10-30793.pdf In Re Janice Marie Montgomery Bankr. W.D. Okla. Case No. 10-10767 Chapter 11 Petition Filed February 18, 2010 Filed As Pro Se In Re Brookside Investment Group, Inc. Bankr. E.D. Tenn. Case No. 10-50348 Chapter 11 Petition Filed February 18, 2010 See http://bankrupt.com/misc/tneb10-50348p.pdf See http://bankrupt.com/misc/tneb10-50348c.pdf In Re NABA of America, Inc. dba Collision Masters Bankr. N.D. Texas Case No. 10-41099 Chapter 11 Petition Filed February 18, 2010 See http://bankrupt.com/misc/txnb10-41099.pdf In Re Charles Joseph Ulrich Victoria Lynne Ulrich Bankr. Ariz. Case No. 10-04278 Chapter 11 Petition Filed February 19, 2010 See http://bankrupt.com/misc/azb10-04278.pdf In Re Central Occupational Medicine Providers, A Medical Corporation Bankr. C.D. Calif. Case No. 10-14524 Chapter 11 Petition Filed February 19, 2010 See http://bankrupt.com/misc/cacb10-14524.pdf In Re The Rabuck Agency, Inc. Bankr. C.D. Calif. Case No. 10-16013 Chapter 11 Petition Filed February 19, 2010 See http://bankrupt.com/misc/cacb10-16013p.pdf See http://bankrupt.com/misc/cacb10-16013c.pdf In Re Ronald Eugene Hill dba Rib Co Lisa Ann Hill dba Rib Co Bankr. C.D. Calif. Case No. 10-14588 Chapter 11 Petition Filed February 19, 2010 Filed As Pro Se In Re We The People USA, Inc. aka We The People aka WTP Acquisition Corp Bankr. Del. Case No. 10-10503 Chapter 11 Petition Filed February 19, 2010 See http://bankrupt.com/misc/deb10-10503p.pdf See http://bankrupt.com/misc/deb10-10503c.pdf In Re We The People LLC aka We The People aka WTP Acquisition Corp Bankr. Del. Case No. 10-10504 Chapter 11 Petition Filed February 19, 2010 See http://bankrupt.com/misc/deb10-10504.pdf In Re DBI, LLC Bankr. S.D. Fla. Case No. 10-14022 Chapter 11 Petition Filed February 19, 2010 See http://bankrupt.com/misc/flsb10-14022.pdf In Re Club 4100, Inc. Bankr. Md. Case No. 10-13336 Chapter 11 Petition Filed February 19, 2010 See http://bankrupt.com/misc/mdb10-13336.pdf In Re Reoger Paul Wiesenauer Janet L. Wall Bankr. Nev. Case No. 10-12530 Chapter 11 Petition Filed February 19, 2010 See http://bankrupt.com/misc/nvb10-12530.pdf In Re Romar Enterprises, Inc. Bankr. S.D. N.Y. Case No. 10-35454 Chapter 11 Petition Filed February 19, 2010 See http://bankrupt.com/misc/nysb10-35454.pdf In Re Celtic Adventures, LLC dba Connolly's Irish Pub Bankr. E.D. N.C. Case No. 10-01275 Chapter 11 Petition Filed February 19, 2010 See http://bankrupt.com/misc/nceb10-01275.pdf In Re DH Marketing Concepts, Inc. Bankr. W.D. Pa. Case No. 10-21012 Chapter 11 Petition Filed February 19, 2010 See http://bankrupt.com/misc/pawb10-21012.pdf In Re Continental First Federal Bankr. M.D. Tenn. Case No. 10-01695 Chapter 11 Petition Filed February 19, 2010 See http://bankrupt.com/misc/tnmb10-01695.pdf In Re Defendersoft, Inc. Bankr. N.D. Texas Case No. 10-31179 Chapter 11 Petition Filed February 19, 2010 See http://bankrupt.com/misc/txnb10-31179.pdf In Re Mariah Bay Leasing Corporation Bankr. N.D. Texas Case No. 10-31171 Chapter 11 Petition Filed February 19, 2010 See http://bankrupt.com/misc/txnb10-31171.pdf In Re HSL Investments, Inc. Bankr. D.C. Case No. 10-00147 Chapter 11 Petition Filed February 19, 2010 See http://bankrupt.com/misc/dcb10-00147.pdf In Re B.V.F., Inc. Bankr. Minn. Case No. 10-41155 Chapter 11 Petition Filed February 20, 2010 See http://bankrupt.com/misc/mnb10-41155.pdf In Re Divine Enterprises, LLC Bankr.Nev. Case No. 10-12644 Chapter 11 Petition Filed February 20, 2010 See http://bankrupt.com/misc/nvb10-12644.pdf In Re Divine Event Productions, Inc. Bankr.Nev. Case No. 10-12645 Chapter 11 Petition Filed February 20, 2010 See http://bankrupt.com/misc/nvb10-12645.pdf In Re Aldemir T. Coelho Bankr. Ariz. Case No. 10-04297 Chapter 11 Petition Filed February 21, 2010 See http://bankrupt.com/misc/azb10-04297.pdf In Re Arizona Entryways, LLC Bankr. Ariz. Case No. 10-04387 Chapter 11 Petition Filed February 22, 2010 See http://bankrupt.com/misc/azb10-04387.pdf In Re Nathaniel W. Chanek Bankr. Ariz. Case No. 10-04308 Chapter 11 Petition Filed February 22, 2010 See http://bankrupt.com/misc/azb10-04308.pdf In Re Harkomal K. Dhaliwal Bankr. W.D. Ark. Case No. 10-70809 Chapter 11 Petition Filed February 22, 2010 See http://bankrupt.com/misc/arwb10-70809.pdf In Re Alamo Auto Car Care Center Inc. Bankr. C.D. Calif. Case No. 10-16317 Chapter 11 Petition Filed February 22, 2010 See http://bankrupt.com/misc/cacb10-16317.pdf In Re Avishay Weinberg Bankr. C.D. Calif. Case No. 10-16229 Chapter 11 Petition Filed February 22, 2010 Filed As Pro Se In Re Gabriel Tauber aka Pedro Tauber Bankr. C.D. Calif. Case No. 10-11943 Chapter 11 Petition Filed February 22, 2010 Filed As Pro Se In Re Lasaine Avenue Development LLC Bankr. C.D. Calif. Case No. 10-11967 Chapter 11 Petition Filed February 22, 2010 Filed As Pro Se In Re Oasis Club, Inc. Bankr. C.D. Calif. Case No. 10-16304 Chapter 11 Petition Filed February 22, 2010 See http://bankrupt.com/misc/cacb10-16304.pdf In Re The Yucca Group, LLC a California Limited Liability Company Bankr. C.D. Calif. Case No. 10-16226 Chapter 11 Petition Filed February 22, 2010 Filed As Pro Se In Re Douglas Wayne Gary aka DG Logging Bankr. E.D. Calif. Case No. 10-24109 Chapter 11 Petition Filed February 22, 2010 Filed As Pro Se In Re W.H.E. Enterprises, LLC Bankr. N.D. Calif. Case No. 10-10566 Chapter 11 Petition Filed February 22, 2010 See http://bankrupt.com/misc/canb10-10566p.pdf See http://bankrupt.com/misc/canb10-10566c.pdf In Re Alpay Can Bankr. N.J. Case No. 10-14885 Chapter 11 Petition Filed February 22, 2010 See http://bankrupt.com/misc/njb10-14885.pdf In Re Douglas F. Vaughan Bankr. N.M. Case No. 10-10763 Chapter 11 Petition Filed February 22, 2010 See http://bankrupt.com/misc/nmb10-10763.pdf In Re CSH Ventures LLC Bankr. N.D. N.Y. Case No. 10-10562 Chapter 11 Petition Filed February 22, 2010 Filed As Pro Se In Re Ameriplast Inc. Bankr. Puerto Rico Case No. 10-01245 Chapter 11 Petition Filed February 22, 2010 See http://bankrupt.com/misc/prb10-01245.pdf In Re Larry Kenneth West Bankr. M.D. Tenn. Case No. 10-01775 Chapter 11 Petition Filed February 22, 2010 See http://bankrupt.com/misc/tnmb10-01775.pdf In Re Lawrence Henry Schumaker aka Larry Schumaker Bankr. M.D. Tenn. Case No. 10-01774 Chapter 11 Petition Filed February 22, 2010 See http://bankrupt.com/misc/tnmb10-01774.pdf In Re Coy Enterprises, Inc. Bankr. E.D. Wash. Case No. 10-00945 Chapter 11 Petition Filed February 22, 2010 See http://bankrupt.com/misc/waeb10-00945p.pdf See http://bankrupt.com/misc/waeb10-00945c.pdf ********* 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 ***