/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/100301.mbx T R O U B L E D C O M P A N Y R E P O R T E R Monday, March 1, 2010, Vol. 14, No. 59 Headlines 31 SOUTH MAIN STREET: Case Summary & 19 Largest Unsec. Creditors 9801 IRVINE CENTER: Case Summary & 2 Largest Unsecured Creditors ACCURIDE COMMUNICATION: Emerges from Chapter 11 Bankruptcy AGL PROPERTIES: Case Summary & 7 Largest Unsecured Creditors AHMAD REZA RAFII: Case Summary & 20 Largest Unsecured Creditors ALLBRITTON COMMUNICATIONS: Moody's Upgrades Bond Ratings to 'B3' AMERICAN INT'L: Narrows FY2009 Net Loss to $12.3 Billion AMERICAN INT'L: Close to Selling AIA to Prudential for $35.5BB AMES DEPARTMENT: Preference Doesn't Bar Admin. Claim Recovery ASARCO LLC: New Mexico Receives $3.6 Mil. for Cleanups ASARCO LLC: Parties File Claims for Substantial Contribution ASARCO LLC: Reaches Deal With USW on Claim Disallowance ASARCO LLC: Texas Custodial Trust Wants Clarification on Deal AVIS BUDGET: Bank Debt Trades at 1% Off in Secondary Market BEAR ISLAND: Weak Dollar, Poor Newsprint Demand Cue Bankruptcy BH S&B: Creditors Appeal Fight with Owners BIRCH COMMUNICATIONS: S&P Withdraws 'B-' Corporate Credit Rating BUCKEYE TECHNOLOGIES: S&P Puts BB- Rating on CreditWatch Negative BOCK FAMILY TRUST: Voluntary Chapter 11 Case Summary BORA BORA: Automatic Stay Not Extended to Debtor's Principal BUCEPHALUS ALTERNATIVE: Voluntary Chapter 11 Case Summary CALIFORNIA COASTAL: Brightwater Homes Sales Facing Objection CALIFORNIA COASTAL: March 10 Hearing Set for Cash Collateral Use CARSON RIVER COMMUNITY: Closed; Heritage Bank Assumes All Deposits CATALINA LIGHTING: Files for Chapter 11 Bankruptcy Protection CAVALIER TELEPHONE: Bank Debt Trades at 14% Off CELESTICA INC: S&P Raises Corporate Credit Rating to 'BB' CENTRAL CROSSING: DIP Financing, Collateral Use Gets Interim OK CHRYSLER LLC: New Chrysler Asks for More Time on Plant Ownership CHRYSLER LLC: New Chrysler Eyes Return of Alfa Romeo in N. America CHRYSLER LLC: New Chrysler Halts Production at Two Plants CHRYSLER LLC: New Chrysler to Sell Fiat 500 in Canada by Dec. CINRAM INTL: Bank Debt Trades at 23% Off in Secondary Market CITADEL BROADCASTING: Bank Debt Trades at 17% Off CITIGROUP INC: CEO Pandit Gets Alwaleed Bin Talal's Support CITIGROUP INC: Says Internet Banking Unit Not For Sale CLAIRE'S STORES: Bank Debt Trades at 17% Off in Secondary Market CONSECO INC: Reports $85.7 Million Net Income in 2009 CRACKER BARREL: Bank Debt Trades at 2% Off in Secondary Market CRESCENT RESOURCES: Bank Debt Trades at 59% Off DANA HOLDING: Bank Debt Trades at 3% Off in Secondary Market DAREN BERG: 10th Cir. BAP Says Discharge Denial Premature DEP THI TRIEU: Case Summary & 18 Largest Unsecured Creditors DEX MEDIA WEST: Bank Debt Trades at 5% Off in Secondary Market DIAMONDROCK HOSPITALITY: Out of Compliance with Loan Requirements DOROTHY EARGLE TRUST: Voluntary Chapter 11 Case Summary EASTMAN KODAK: S&P Affirms 'B-' Rating on Senior Secured Notes EXTENDED STAY: Affiliates File Plan of Reorganization EXTENDED STAY: ESA P Portfolio, 4 Others Also in Chapter 11 EXTENDED STAY: Proposes Deal With Centerbridge, Et Al. FAIRPOINT COMMS: Bank Debt Trades at 24% Off in Secondary Market FINLAY ENTERPRISES: Norman Matthews Resigns from Board FORD MOTOR: Invests $590-Mil. for Essex Plant in Windsor, Canada FORD MOTOR: Invests $155-Mil., Adds 60 Jobs for Cleveland Plant FOUNTAIN VILLAGE: Gets Interim Nod to Use Telesis' Cash Collateral FREDDIE MAC: Posts $21.6 Billion Net Loss in 2009 FREEDOM COMMUNICATIONS: US Objects to Ch. 11 Plan on Tax Grounds GENERAL GROWTH: Fitch Withdraws 'D' Issuer Default Rating GENERAL GROWTH: Court Approves Securities Action Settlement GENERAL GROWTH: District Court Dismisses A&K Appeal on DIP Order GENERAL GROWTH: Shareholder Sues Board for Simon Bid Rejection GENERAL GROWTH: To Turn Over Chapel Hills Mall to LNR Partners GENERAL GROWTH: U.S. Trustee Adds M&T to Creditors Committee GMAC INC: Bankruptcy Would Have Cost Treasury $50 Billion GOTTSCHALKS INC: Fred Ruiz Resigns as Director of Board GOTTSCHALKS INC: GE Capital Blasts Liquidation Plan GRAY COMMUNICATIONS: Bank Debt Trades at 10% Off GROUP HEALTH: S&P Assigns 'BB-' Counterparty Credit Rating HARRAH'S ENTERTAINMENT: HOC Bank Debt Trades at 0.28% Off HAYASHI ASSET: Case Summary & 20 Largest Unsecured Creditors HERTZ CORP: Bank Debt Trades at 2% Off in Secondary Market HOLLYWOOD MOTION PICTURE: Voluntary Chapter 11 Case Summary H.P.W. LTD: Case Summary & 3 Largest Unsecured Creditors HUFFY CORP: Plan Discharged Retailer's Indemnification Claim IMAGEWARE SYSTEMS: Stonefield Josephson Raises Going Concern Doubt INFOLOGIX INC: David Gulian Holds 3.4% of Common Stock INFOLOGIX INC: IL Venture Capital No Longer Holds Shares INFOLOGIX INC: Richard Hodge Holds 3% of Common Stock INFOLOGIX INC: Warren Musser Holds 2.1% of Common Stock IRON MOUNTAIN: New Repurchase Program Won't Affect Moody's Rating ISLE OF CAPRI: Bank Debt Trades at 2% Off in Secondary Market J. CALDERON ENTERPRISES: Voluntary Chapter 11 Case Summary JENNIFER CONVERTIBLES: To be Delisted From Amex JOHN MANEELY: Bank Debt Trades at 6% Off in Secondary Market KMART CORP: Court Slaps $10 Mil. Fine on Former CEO Conway LAMAR MEDIA: S&P Raises Rating on Subordinated Notes to 'B+' LAS VEGAS SANDS: Bank Debt Trades at 13% Off in Secondary Market LAS VEGAS TV: Files for Chapter 11 in Nevada LEVEL 3 COMMS: Bank Debt Trades at 10% Off in Secondary Market LEVI STRAUSS: Moody's Affirms Corporate Family Rating at 'B1' LIBERTY MEDIA: Moody's Retains 'B1' Corporate Family Rating LINENS 'N THINGS: Bankruptcy Converted to Chapter 7 LNR PROPERTY: Bank Debt Trades at 16% Off in Secondary Market LODGIAN INC: Posts $52.4 Million Net Loss in 2009 LYONDELL CHEMICAL: Amends Ch. 11 Plan Due to BoNY Settlement LYONDELL CHEMICAL: Proposes Settlement With Oil Insurance LYONDELL CHEMICAL: Reaches Deal With Unsecured Creditors LYONDELL CHEMICAL: Wins Approval of Settlement With BoNY MEDICOR LTD: Files First Amended Chapter 11 Plan MGM MIRAGE: Majority of Lenders Agree to 2014 Extension of Loan MGM MIRAGE: Sugerman Resigns From Board of Directors MICHAEL LUNSFORD: Case Summary & 20 Largest Unsecured Creditors MONEYGRAM INT'L: Board Approves 3 Employee Incentive Plans MONEYGRAM INT'L: FMR, Fidelity Own 10.114% of Common Stock MONEYGRAM INT'L: Guardian Life Owns 13.4% of Common Stock MONEYGRAM INT'L: To Settle Securities Class Action NETWORK DEVELOPMENT: Case Summary & 6 Largest Unsecured Creditors NEUMANN HOMES: Court Confirms Plan of Liquidation NEUMANN HOMES: Proposes Settlement With Former CEO NEUMANN HOMES: Submits Status Report on Adversary Proceedings NEWMARKET CORP: S&P Raises Corporate Credit Rating to 'BB+' NIGHTLIFE ENTERPRISES: Voluntary Chapter 11 Case Summary NLP ACQUISITION: Case Summary & 13 Largest Unsecured Creditors NOVELIS INC: Bank Debt Trades at 4% Off in Secondary Market OCEAN MIST RESORT: Case Summary & 4 Largest Unsecured Creditors OMNIA COLLEGE: Case Summary & Unsecured Creditor OTTER TAIL: Gets Approval for Cash Collateral Use Until May 31 PROTOSTAR LTD: Creditors Fail to Stall Sale Bonuses RAINIER PACIFIC BANK: Closed; Umpqua Bank Assumes All Deposits RAMSEY HOLDINGS: Court Sets Cash Collateral Hearing for March 9 READER'S DIGEST: Committee Hired BDO UK as Pension Advisor READER'S DIGEST: U.K. Edition in Talks With Bidders READER'S DIGEST: S&P Raises Corporate Credit Rating to 'B' READER'S DIGEST: Plan Declared Effective February 19 REALOGY CORP: Bank Debt Trades at 12% Off in Secondary Market REVLON INC: Bank Debt Trades at 2% Off in Secondary Market SIX FLAGS: Barclays & Renaissance No Longer Have Equity Stake REDWOOD PARK: Voluntary Chapter 11 Case Summary REVLON CONSUMER: Moody's Affirms 'B2' Corporate Family Rating RJ YORK: Taps Armstrong Teasdale as Bankruptcy Counsel ROBERTO ALVARADO: Case Summary & 20 Largest Unsecured Creditors RONALD EDWARDS: Case Summary & 3 Largest Unsecured Creditors SANTA CLARA: Wants Access to East West Cash to Pay Operating Costs SEARS HOLDINGS: S&P Changes Outlook to Stable; Keeps 'BB-' Rating SELDEN ENTERPRISES: Voluntary Chapter 11 Case Summary SENIAH CORP: Case Summary & 4 Largest Unsecured Creditors SHALLOWBAG MARINA: Case Summary & 9 Largest Unsecured Creditors SHEARIN FAMILY: Bankr. Administrator Wants Conversion or Dismissal SIRIUS XM RADIO: Enterprise Value 18 Times Projected 2010 EBITDA SIRIUS XM RADIO: Reports $342 Million Net Loss for 2009 SORENSON HUNTING: Case Summary & 20 Largest Unsecured Creditors SPANSION INC: Donald Smith Owns Zero Shares of Class A Stock SPANSION INC: Jennison Discloses 0% Ownership of Stock SPANSION INC: Reports $514,059,000 Net Loss for 2009 TENNECO INC: Fitch Upgrades Issuer Default Rating to 'BB+/RR1' THOMAS KAMINSKY: Case Summary & 20 Largest Unsecured Creditors THORNBURG MORTGAGE: Creditors Seek to Cut Venable's Fees TIMOTHY RAY: Gets Interim Okay to Use Cash Collateral TISHMAN SPEYER: Bank Debt Trades at 21% Off in Secondary Market TLC VISION: Strategic Turnaround Owns 1.08% of Common Stock TRIBUNE CO: Bank Debt Trades at 39% Off in Secondary Market TRIDENT RESOURCES: Courts OK Sale & Investor Solicitation Process TRONOX INC: Gets Nod for Settlement With Term Loan Lenders TRONOX INC: OKs Rejection of Pittman & Koehler Contracts TRONOX INC: RTI Hamilton Lawsuit Dismissed by Court TRUMP ENTERTAINMENT: Attys' Fee Dispute Heading to 3rd Circuit TSG INCORPORATED: Has Access to PNC Bank's Cash Until May 21 US CONCRETE: Moody's Downgrades Corporate Family Rating to 'Caa2' USI HOLDINGS: S&P Gives Stable Outlook, Keeps CCC Rating VION PHARMACEUTICALS: Plan Outline Hearing Set for Today VION PHARMACEUTICALS: Gets FDA Response on Protocol Assessment VISTEON CORP: Court Declines to Remove Pensioners From Committee VISTEON CORP: Has Access to Cash Collateral Until March 17 VISTEON CORP: Wants Plan Exclusivity Until April 30 VISTEON CORP: Bank Debt Trades at 109.66% in Secondary Market VISTEON CORP: Earns $184 Million in 2009 Despite Sales Decrease WASHINGTON MUTUAL: Court Denies Disbandment of Equity Committee WASHINGTON MUTUAL: Plan Participants Insist Rights on HFA Trusts WASHINGTON MUTUAL: SEC, Ratings Agencies Need Not Produce Docs. WEST HAWK: Wants Plan Filing Further Extended Until May 12 WESTERN REFINING: Bank Debt Trades at 9% Off in Secondary Market W.R. GRACE: Adage Continues to Own 5.07% of Common Stock W.R. GRACE: FMR LLC Has 14.43% Equity Stake W.R. GRACE: P. Norris Resigns From Board of Directors * Bank Failures This Year Reach 22 * FDIC Auctions $610.5 Million in Loans From Failed Banks * New Bill Seeks Pro-Labor Changes to Chapter 11 * Retailers Seen More Reluctant to Seek Bankruptcy Protection * Snow Storm, Toyota Recall to Affect Auto Makers' Feb. Sales * PERELLA WEINBERG: Maurin Joins Restructuring Group * BOND PRICING -- For the Week From Feb. 22 to 26, 2010 ********* 31 SOUTH MAIN STREET: Case Summary & 19 Largest Unsec. Creditors ---------------------------------------------------------------- Debtor: 31 South Main Street, LLC PO Box 610 Gilmanton, NH 03237 Bankruptcy Case No.: 10-10765 Chapter 11 Petition Date: February 24, 2010 Court: United States Bankruptcy Court District of New Hampshire Live Database (Manchester) Debtor's Counsel: Deborah A. Notinger, Esq. Donchess & Notinger, PC 547 Amherst Street, Ste. 204 Nashua, NH 03063 Tel: (603) 886-7266 Fax: (603) 886-7922 Email: debbie@dntpc.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 19 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/nhb10-10765.pdf The petition was signed by Thomas J. Farley, managing member of the Company. 9801 IRVINE CENTER: Case Summary & 2 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: 9801 Irvine Center Drive LLC 26021 Horseshoe Cir Laguna Hills, CA 92653 Bankruptcy Case No.: 10-12239 Chapter 11 Petition Date: February 24, 2010 Court: United States Bankruptcy Court Central District of California (Santa Ana) Judge: Robert N. Kwan Debtor's Counsel: Marc C. Rosenberg, Esq. Law Offices of Marc Rosenberg APC 18321 Ventura Blvd #860 Tarzana, CA 91356 Tel: (818) 776-0012 Fax: (818) 776-0892 Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A full-text copy of the Debtor's petition, including a list of its 2 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/cacb10-12239.pdf The petition was signed by Javad Mehrvijeh, managing member of the Company. ACCURIDE COMMUNICATION: Emerges from Chapter 11 Bankruptcy ---------------------------------------------------------- Accuride Corporation has successfully completed all conditions of its Plan of Reorganization and emerged from Chapter 11 with a new capital structure after only five months. "Entering Chapter 11 with a pre-arranged agreement and the continued support of our lenders, allowed Accuride to emerge in an expeditious manner," said Bill Lasky Accuride's President, CEO, and Chairman of the Board. "Accuride has always been a solid leader in product innovation and operational efficiency. Our improved financial structure, coupled with the respect of our industry brands, will allow us to pursue initiatives to further expand our product offering and geographic penetration, while in turn providing increased solutions for our customers and greater value for our shareholders." As outlined in the Plan, the Company exits bankruptcy with a more flexible capital structure including a $308 million term loan and $140 million of convertible notes. All unsecured trade creditors will be paid in full for valid claims. In addition, the company has filed the necessary paperwork for Accuride's common stock to begin trading on the Over-the-Counter Bulletin Boards and will announce the symbol for trading in Accuride's common stock when it becomes available. "Upon filing our voluntary petition for Chapter 11 protection, we embarked upon the very aggressive path we had chartered to ensure the Company emerged from the process as expeditiously as possible," said Lasky. "I would like to extend my extreme gratitude for all who worked so diligently, allowing us to remain on track and emerge today a healthier Company. I would also like to reiterate my sincere appreciation for our team members whose dedication ensured that we maintained quality production and on- time delivery, as well as our customers and suppliers who remained loyal to Accuride throughout the restructuring process. We look forward to continuing these partnerships through which we will together bring innovation to the industry." On October 8, 2009, Accuride's U.S. entities filed a voluntary petition for protection under Chapter 11 of the U.S. Bankruptcy Code in the District of Delaware. About Accuride Corp. Accuride Corp. and its affiliates are among the largest and most diversified manufacturers and suppliers of commercial vehicle components in North America. The Company's products include wheels, wheel-end components and assemblies, truck body and chassis parts, seating assemblies and other commercial vehicle components marketed under several well-recognized brands in the industry, including Accuride, Gunite, Imperial, Bostrom, Fabco, Brillion and Highway Original. According to filings by Accuride, the Company is seeking to restructure in excess of $675 million in debt through its bankruptcy proceeding. The bankruptcy cases are pending in the United States Bankruptcy Court for the District of Delaware. Jeffrey M. Reisner and Tavi C. Flanagan, Esq., at Irell & Manella LLP's Newport Beach-based bankruptcy practice, will serve as lead counsel to the Official Committee of Unsecured Creditors in the affiliated debtors' bankruptcy cases. Mr. Reisner chairs the firm's bankruptcy practice. Kurt Gwynne, Esq., at Reed Smith LLP, serves as Delaware counsel and Joel Dryer of Morris Anderson & Associates will serve as financial advisors to the Official Committee of Unsecured Creditors. The Chapter 11 filing includes Accuride Corp. and a number of subsidiaries and affiliates, including Accuride Cuyahoga Falls, Inc., Accuride Distributing, LLC, Accuride EMI, LLC, Accuride Erie L.P., Accuride Henderson Limited Liability Company, AKW General Partner L.L.C., AOT Inc., Bostrom Holdings, Inc., Bostrom Seating, Inc., Bostrom Specialty Seating, Inc., Brillion Iron Works, Inc., Erie Land Holding, Inc., Fabco Automotive Corporation, Gunite Corporation, Imperial Group Holding Corp. -1, Imperial Group Holding Corp. -2, Imperial Group, L.P., JAII Management Company, Transportation Technologies Industries, Inc., and Truck Components Inc. As reported in the Troubled Company Reporter on February 22, 2010, the Bankruptcy has confirmed the Company's Plan of Reorganization. Accuride expects the Plan to become effective on or about February 26, 2010, once all closing conditions have been met. AGL PROPERTIES: Case Summary & 7 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: AGL Properties, LLC aka Williamsburg Apartments aka Crossing at Williamsburg 240 55th Avenue SW Vero Beach, FL 32968 Bankruptcy Case No.: 10-11057 Chapter 11 Petition Date: February 24, 2010 Court: United States Bankruptcy Court Eastern District of Tennessee (Chattanooga) Judge: John C. Cook Debtor's Counsel: David J. Fulton, Esq. Scarborough, Fulton & Glass 701 Market Street, Suite 1000 Chattanooga, TN 37402 Tel: (423) 648-1880 Fax: (423) 648-1881 Email: djf@sfglegal.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 7 largest unsecured creditors is available for free at: http://bankrupt.com/misc/tneb10-11057.pdf The petition was signed by George A. Crupi, president of the company. AHMAD REZA RAFII: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Joint Debtors: Ahmad Reza Rafii dba Advanced Chiropractic Center Nooshin Dalili dba Law Office of Nooshin Dalili 115 Hill Top Drive Los Gatos, CA 95032 Bankruptcy Case No.: 10-51776 Chapter 11 Petition Date: February 24, 2010 Court: United States Bankruptcy Court Northern District of California (San Jose) Judge: Roger L. Efremsky Debtors' Counsel: Lars T. Fuller, Esq. The Fuller Law Firm 60 N Keeble Ave. San Jose, CA 95126 Tel: (408) 295-5595 Email: Fullerlawfirmecf@aol.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 According to the schedules, the Company has assets of $1,967,179 and total debts of $2,973,469. A list of the Company's 20 largest unsecured creditors is available for free at: http://bankrupt.com/misc/canb10-51776.pdf The petition was signed by the Joint Debtors. ALLBRITTON COMMUNICATIONS: Moody's Upgrades Bond Ratings to 'B3' ---------------------------------------------------------------- Moody's Investors Service upgraded the rating on the senior subordinated bonds of Allbritton Communications Company to B3 from Caa1 and changed the ratings outlook to stable from negative. Moody's also affirmed Allbritton's B3 corporate family rating. Moody's upgraded the rating on the bonds based on lower current and projected borrowings under the revolver. Bondholders are contractually and effectively subordinated to lenders under the revolving credit facility, and the reduction in higher priority debt above the bondholders debt drives the upgrade. The outlook change incorporates expectations that with economic stabilization, continued growth in cash flow is likely, and credit metrics will continue to improve. These factors have created a better cushion of projected compliance under the financial covenants of Allbritton's senior secured credit facility (unrated). Allbritton outperformed many of its peers during the downturn, which also supports the outlook revision. Allbritton Communications Company -- Senior Subordinated Bonds, Upgraded to B3, LGD4, 57% from Caa1, LGD4, 58% -- Affirmed B3 Corporate Family Rating -- Affirmed B3 Probability of Default Rating -- Outlook, Changed To Stable From Negative The last rating action on Allbritton was February 11, 2009, when Moody's confirmed the B3 corporate family rating and changed the outlook to negative from under review for downgrade. Allbritton Communications Company, headquartered in Arlington, Virginia, owns and operates television stations affiliated with ABC in six geographic markets. The company also owns NewsChannel 8, a 24 hour basic cable channel primarily focused on local news for the DC area. In November 2009, Allbritton divested Politico, a specialized newspaper and Internet site that serves Congress, congressional staffers, and others interested in the political electoral process. The Allbritton family indirectly controls the company, and its annual revenue is approximately $200 million. AMERICAN INT'L: Narrows FY2009 Net Loss to $12.3 Billion -------------------------------------------------------- American International Group Inc. on Friday said net loss for the year ended December 31, 2009, narrowed to $12.313 billion from a net loss of $100.387 billion for 2008. AIG said total revenues were $96.004 billion for 2009, from $6.896 billion in 2008. In a news release, AIG said net loss attributable to AIG common shareholders was $8.9 billion for the fourth quarter of 2009, or $65.51 per diluted common share, compared to a net loss of $61.7 billion or $458.99 per diluted share in the fourth quarter of 2008. Fourth quarter 2009 adjusted net loss was $7.2 billion, compared to an adjusted net loss of $38.5 billion in the fourth quarter of 2008. AIG said the net loss in the quarter can be primarily attributed to these items: * $6.2 billion ($4.0 billion after tax) of interest and amortization expense, including $5.2 billion ($3.4 billion after tax) of accelerated amortization expense on the prepaid commitment asset resulting from the $25 billion reduction in the balance outstanding and the maximum credit available under the Federal Reserve Bank of New York (FRBNY) Credit Facility; * a $2.8 billion ($1.5 billion after tax) loss recognized on the pending sale of Nan Shan Life Insurance Company, Limited (Nan Shan); * loss reserve strengthening of $2.3 billion ($1.5 billion after tax) in Commercial Insurance; and, * a valuation allowance charge of $2.7 billion for tax benefits not presently recognizable. AIG President and Chief Executive Officer Robert H. Benmosche said, "Our team made great progress during the year in executing our strategic restructuring plan, by stabilizing and strengthening AIG's insurance businesses, reducing AIG Financial Products Corp. (AIGFP) exposures, and positioning certain businesses for sale. I am delighted that several seasoned, well-respected, financial services executives, including Peter Hancock, Tom Russo, Michael Cowan and Sandra Kapell, have joined the AIG team and enhanced our prospects for rebuilding this great company. "In the fourth quarter, we took significant strides toward the dispositions of American International Assurance Company, Ltd. (AIA) and American Life Insurance Company (ALICO); and through the creation of two special purpose vehicles (SPVs) that now own these two companies, we reduced our debt to the FRBNY Credit Facility by $25 billion in exchange for FRBNY ownership of preferred interests in the SPVs. "As a result of reducing our debt to the FRBNY, during the fourth quarter we incurred certain losses associated with this debt reduction. Back in September of 2008, in exchange for $85 billion in support, AIG turned over a 79.9% ownership stake in the company to a trust established for the sole benefit of the U.S. Treasury. This ownership stake in effect represented a 'pre-paid commitment' fee that AIG valued at $23 billion as an asset on its balance sheet, which we are amortizing over the life of the FRBNY Credit Facility, accelerated for mandatory prepayments. In the fourth quarter of 2009, we accelerated the amortization of $5.2 billion pre-tax of this asset in connection with reducing the amount we could borrow from the FRBNY by $25 billion. This is the second time we have reduced the amount we could borrow. Last year, we reduced the original $85 billion commitment to $60 billion when the terms of the FRBNY Credit Facility were amended and recorded a similar accelerated amortization amount of $6.6 billion. "Importantly, in the fourth quarter, AIG strengthened its General Insurance worldwide loss reserves by $2.3 billion, or $1.5 billion after tax, based on AIG's year end internal actuarial analyses. AIG considered the results of its third party actuary's analysis in reaching its judgment. This reserve strengthening represents roughly 3.6 percent of Chartis' carried reserves at December 31, 2009. "At our Domestic Life Insurance & Retirement Services companies, recently rebranded as the SunAmerica Financial Group, we have made notable progress in re-establishing relationships and reinvigorating sales distributions. We are very proud that Western National, one of the first insurance companies to develop fixed annuity products specifically for sale through banks, successfully regained its number one position in that market in the third quarter of 2009. "We continue to address the funding needs and are exploring strategic restructuring opportunities for International Lease Finance Corporation (ILFC), and American General Finance, Inc. (AGF). "Lastly, we are increasingly confident in how we see the mix of AIG's businesses over the long term. We are taking the right steps to regain our stature as one of the most respected and diverse property-casualty operations in the world, with a strong U.S. life and annuity operation and several other businesses that will enhance our nucleus, help us to meet our goal of repaying taxpayers and provide value to the communities where we operate," Mr. Benmosche concluded. AIG said at December 31, 2009, total assets at the parent level were $173.473 billion against total liabilities of $103.649 billion. AIG continues to make progress on its strategic restructuring plan. During 2009 and through February 17, 2010, AIG entered into agreements to sell or completed the sales of operations and assets, excluding AIGFP assets, that are expected to generate a total of approximately $5.6 billion of aggregate net cash proceeds that will be available to repay outstanding borrowings and will reduce the maximum lending commitment under the FRBNY Credit Facility upon closing. AIG continues to engage in productive discussions with third parties with respect to a number of other transactions. As of February 17, 2010, AIG had outstanding net borrowings under the FRBNY Credit Facility of $21 billion, plus accrued interest and fees of $5.5 billion. Available capacity totaled $14 billion. Net borrowings under the FRBNY Credit Facility increased by approximately $3.1 billion since year-end, primarily to repay $3.5 billion of commercial paper outstanding under the FRBNY Commercial Paper Funding Facility (CPFF). As of February 17, 2010, AIG's total balance outstanding under the CPFF was $1.2 billion. Separately, Nightingale Finance LLC, a structured investment vehicle sponsored by AIGFP but not consolidated by AIG, participated in the CPFF with a balance of $1.1 billion at that date. As of February 17, 2010, the remaining available amount under the Department of the Treasury Commitment was $22.3 billion. A full-text copy of AIG's annual report on Form 10-K is available at no charge at http://ResearchArchives.com/t/s?555c A full-text copy of AIG's earnings release is available at no charge at http://ResearchArchives.com/t/s?555d About AIG Based in New York, American International Group, Inc., is an international insurance organization with operation in more than 130 countries and jurisdictions. AIG companies serve commercial, institutional and individual customers through the most extensive worldwide property-casualty and life insurance networks of any insurer. In addition, AIG companies provide retirement services, financial services and asset management around the world. AIG's common stock is listed on the New York Stock Exchange, as well as the stock exchanges in Ireland and Tokyo. In September 2008, AIG experienced a liquidity crunch when its credit ratings were downgraded below "AA" levels by Standard & Poor's, Moody's Investors Service and Fitch Ratings. On September 16, 2008, the Federal Reserve Bank created an $85 billion credit facility to enable AIG to meet increased collateral obligations consequent to the ratings downgrade, in exchange for the issuance of a stock warrant to the Fed for 79.9% of the equity of AIG. The credit facility was eventually increased to as much as $182.5 billion. AIG has sold a number of its subsidiaries and other assets to pay down loans received from the U.S. government, and continues to seek buyers of its assets. AMERICAN INT'L: Close to Selling AIA to Prudential for $35.5BB -------------------------------------------------------------- The Wall Street Journal's Jeffrey McCracken, Dana Cimilluca and Serena Ng report that AIG neared an agreement late Sunday to sell American International Assurance Ltd., its crown-jewel Asian life- insurance business, to British financial services firm Prudential PLC for about $35.5 billion, people familiar with the situation said. The Journal says the government-controlled insurer's board approved the sale of AIA and was close to signing the deal Sunday night. Sources told the Journal The Federal Reserve Bank of New York and Treasury Department officials also signed off on the deal. The New York Times' Andrew Ross Sorkin and Michael J. de la Merced report that people briefed on the matter told New York Times' DealBook on Saturday, the deal could be worth more than $30 billion. According to Messrs. Sorkin and de la Merced, sources told NY Times that a deal for AIA could come as soon as the middle of this week. The sources did caution that talks are ongoing and may not lead to a transaction. NY Times notes that the Federal Reserve, which owns a stake in AIA, is set to receive about $16 billion from any sale or spinoff of the division. AIG is eyeing an initial public offering of AIA in Hong Kong. According to NY Times, analysts have said that the AIA IPO could value the business at more than $20 billion. Messrs. Sorkin and de la Merced relate that Prudential and other firms had expressed interest in acquiring the unit last year, only to be rebuffed because AIG was seeking a higher price. According to Messrs. Sorkin and de la Merced, people briefed on the matter said Prudential's interest in buying AIA could prompt other insurance firms and deep-pocketed investors like sovereign wealth funds into making their own bids for the business. NY Times says Edward Brewster, a spokesman for Prudential, and Christina Pretto, a spokeswoman for AIG, declined to comment. About AIG Based in New York, American International Group, Inc., is an international insurance organization with operation in more than 130 countries and jurisdictions. AIG companies serve commercial, institutional and individual customers through the most extensive worldwide property-casualty and life insurance networks of any insurer. In addition, AIG companies provide retirement services, financial services and asset management around the world. AIG's common stock is listed on the New York Stock Exchange, as well as the stock exchanges in Ireland and Tokyo. In September 2008, AIG experienced a liquidity crunch when its credit ratings were downgraded below "AA" levels by Standard & Poor's, Moody's Investors Service and Fitch Ratings. On September 16, 2008, the Federal Reserve Bank created an $85 billion credit facility to enable AIG to meet increased collateral obligations consequent to the ratings downgrade, in exchange for the issuance of a stock warrant to the Fed for 79.9% of the equity of AIG. The credit facility was eventually increased to as much as $182.5 billion. AIG has sold a number of its subsidiaries and other assets to pay down loans received from the U.S. government, and continues to seek buyers of its assets. AMES DEPARTMENT: Preference Doesn't Bar Admin. Claim Recovery ------------------------------------------------------------- Denying certiorari, WestLaw reports, the United States Supreme Court has let stand a decision in which the U.S. Court of Appeals for the Second Circuit ruled, as a matter of apparent first impression in the circuit, that 11 U.S.C. Sec. 502(d), the section of the Bankruptcy Code barring allowance of certain claims filed against the debtor's estate by alleged recipients of preferential transfers, does not also bar allowance to such a claimant of postpetition administrative expenses. Accordingly, Sec. 502(d) did not bar allowance of administrative expense claims until the claimant's predecessor in interest satisfied a default judgment that a Chapter 11 debtor obtained against it in a preference action. In their petition for a writ of certiorari, the debtors pointed out that the Second Circuit's holding directly conflicted with the Eighth Circuit's decision in In re Colonial Services Co., 480 F.2d 747 (8th Cir. 1973), which held that Sec. 502(d)'s predecessor provision in the Bankruptcy Act of 1898 applied to administrative expense claims. In addition, the petition asserted, the decision below overrode the plain meaning of the statute without any contention that the plain meaning led to an absurd result. Finally, the petition stated, the Second Circuit's holding created the absurdity that the debtors had to pay administrative expense claims of $393,000, even when the original administrative claimant owed the debtors $825,000 in preference payments and was itself in bankruptcy and likely unable to pay. Ames Dept. Stores, Inc. v. ASM Capital, L.P., --- S.Ct. ----, 2010 WL 596884, 78 USLW 3375 (U.S.). The Second Circuit's ruling in In re Ames Dept. Stores, Inc., 582 F.3d 422 (2d Cir. 2009), was covered in the Sept. 24, 2009, edition of the Troubled Company Reporter. Rocky Hill, Connecticut-based Ames Department Stores was founded in 1958. At its peak, Ames operated 700 stores in 20 states, including the Northeast, Upper South, Midwest and the District of Columbia. In April 1990, Ames filed for bankruptcy protection under Chapter 11 of the U.S. Bankruptcy Code. In Ames I, the retailer closed 370 stores and emerged from chapter 11 on December 30, 1992. Ames filed a second bankrupty petition under Chapter 11 on August 20, 2001 (Bankr. S.D.N.Y. Case No. 01-42217). Togut, Segal & Segal LLP; Weil, Gotshal & Manges; Storch Amini Munves PC;, Cadwalader, Wickersham & Taft LLP;, and Dewey & LeBoeuf LLP represent the Debtors. When the Company filed for protection from their creditors, they reported $1,901,573,000 in assets and $1,558,410,000 in liabilities. The company closed all of its department stores in 2002. Ames and its affiliates filed a consolidated Chapter 11 Plan, and a related Disclosure Statement explaining the Plan with the Court on December 6, 2004. A full-text copy of Ames' Chapter 11 Plan is available at no charge at: http://bankrupt.com/misc/ames_chapter_11_plan.pdf and a full-text copy of Ames' Disclosure Statement is available at no charge at: http://bankrupt.com/misc/ames'_disclosure_statement.pdf As previously reported in the Troubled Company Reporter, Ames had until October 29, 2009, to solicit acceptances of that Plan. At press time, the status of the plan or whether it was confirmed is unknown. ASARCO LLC: New Mexico Receives $3.6 Mil. for Cleanups ------------------------------------------------------ In a statement dated January 22, 2010, the state of New Mexico disclosed that it received $3.6 million in bankruptcy settlements of environmental contamination by ASARCO LLC within the state for sites related to the company's mining business. The state, through the Office of Natural Resources Trustee, the Environment Department and Energy, Minerals and Natural Resources Department, filed claims for environmental damage done by ASARCO within the state. New Mexico's participation in the bankruptcy was led by attorneys in the office of Attorney General Gary King. "I commend the collaboration of the state agencies that took part in the successful resolution of this claim for New Mexicans," Governor Bill Richardson said. "Now we can look forward to restoring the natural resources of the state." "We are gratified that our state will be compensated to some degree for pollution originating from the former Asarco facilities," said New Mexico Environment Department Secretary Ron Curry. "New Mexico fought for this settlement -- as well as to keep the El Paso Asarco facility closed permanently -- to undo some of the damage created by the company's air and soil pollution." Attorneys, who led the settlement in the Office of the State attorney General, stated, "This has been a long process, and we are pleased that our four year effort has resulted in significant funding to benefit New Mexico's environment and resources. We are also hopeful that the cleanup and restoration activities will provide a boost to the economies of the towns and rural areas in which the various sites are located." Approximately $1.12 million was awarded to the New Mexico Office of Natural Resources Trustee for settlement of natural resource damage claims at five sites: the Blackhawk Mine in Grant County, the Deming Mill in Luna County, the Magdalena Mine in Socorro County, and the El Paso Metal Site and the Stephenson-Bennett Mine in Dona Ana County. The Office of Natural Resources Trustee will prepare a restoration plan to identify restoration activities to be financed. The Trustee will announce the availability of the draft restoration plan so that the public will have an opportunity to comment on restoration actions prior to final selection. "The bankruptcy settlement, along with remedial actions taken during the bankruptcy, bring us closer to assuring that the protections under the New Mexico Mining Act will be met for the Deming Mill," stated Bill Brancard, Mining and Minerals Division Director for the Energy, Minerals and Natural Resources Department. In addition to funds received for restoration of natural resources, $290,000 was received for cleanup of the Blackhawk Mine in Grant County and the Stephenson-Bennett Mine in Dona Ana County. The Blackhawk Mine Site consists of approximately 50 acres of former tailings impoundments and remnants of a former mill. The Stephenson-Bennett Mine Site, which includes underground workings and a former quarry, has soil in residential areas contaminated with arsenic and lead. Another $2.19 million has been transferred into a bankruptcy custodial trust for the Magdalena Mine Site, which is located in Hop Canyon west of Socorro and the Deming Mill, which is located in Luna County. The Magdalena site consists of an 18 acre capped tailings impoundment and various abandoned structures for remediation. The Deming Mill includes a former lead and zinc mill and several capped tailings impoundments. In total, ASARCO is paying $1.79 billion to settle environmental claims in 19 states, including Arizona, Alabama, Arkansas, California, Colorado, Idaho, Illinois, Indiana, Kansas, Missouri, Montana, Nebraska, New Jersey, Ohio, Oklahoma, Texas, Utah, and Washington, in addition to New Mexico. ASARCO operated copper, lead and other heavy metal mines and smelters across the country, including a smelter in El Paso. The company announced in February that the smelter would not reopen. Prior to that announcement, the State of New Mexico voiced opposition to the reopening of that facility. ASARCO continues to operate three copper mines in Arizona and a refinery in Amarillo, Texas. 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: Parties File Claims for Substantial Contribution ------------------------------------------------------------ Several parties ask the Court to allow their administrative expense claim for their substantial contribution to the bankruptcy cases pursuant to Section 503(b) of the Bankruptcy Code: Claimants Claim Amount --------- ------------ Harbinger Capital Partners Master $6,000,000 Fund I, Ltd., Harbinger Capital Partners Special Situations Fund, LP and Citigroup Global Markets, Inc. United States of America, on behalf of 3,733,000 the United States Environmental Protection Agency and other federal environmental claimants State of Montana Department of Justice 1,617,734 and the Department of Environmental Quality Texas Attorney General's Office, counsel 873,200 to the Texas Commission on Environmental Quality The Baupost Group 890,435 Elliott Management 489,483 State of Arizona and the Arizona 167,612 Department of Environmental Quality State of Washington, Office of the 113,677 Attorney General (Washington) A creditor who makes a substantial contribution in a case under Chapter 11 of the Bankruptcy Code will be allowed administrative expenses, which may include reasonable compensation for attorneys as well as expenses under Section 503(b). The Creditors contend that they made substantial contributions to the success of the Debtors' bankruptcy cases, including their participation in the Plan process, sale process and environmental settlement. Over the four year pendency of the Debtors' cases, the environmental regulatory authorities, including the United States Environmental Protection Agency, other federal agencies, and the environmental agencies for 19 states, operated as a de facto committee, Hal F. Morris, Esq., Assistant Attorney General for Texas, relates. In so operating and by working collectively, the environmental regulatory authorities significantly eased the burden, financial and otherwise, that the Debtors faced in dealing with their extensive environmental liabilities, he maintains. He adds that ultimately, the efforts of the environmental regulatory authorities in working cooperatively with the Debtors benefited all creditors of the bankruptcy estate and contributed to the confirmation of a plan that paid all creditors in full. The Creditors, hence, ask the Court to allow their administrative claims. 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 USW on Claim Disallowance ------------------------------------------------------- Mark A. Roberts, the plan administrator for Asarco LLC, asked the Bankruptcy Court to disallow and extinguish Claim No. 10531 asserted by United Steel, Paper, and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, American Federation of Labor and Congress of Industrial Organizations, Central Labor Council. The Union filed on July 27, 2006, a general unsecured claim in the estimated, unliquidated amount of no less than $83,000,000, asserting claims against ASARCO based on debts allegedly incurred under the then-existing collective bargaining agreement between the Union and ASARCO. The Union filed the Union Claim both in its capacity as the collective bargaining representative of ASARCO LLC's employees and on behalf of retirees for, among other things, "post-retirement medical and other benefits," which the Union characterized as "unliquidated, but at least $83,000,000," and entitled to administrative expense priority. The Union Claim also referred to an unspecified amount of liability, arising from certain grievances filed by Union members under the Old CBA and certain other amounts, which may be due to Union members under the Old CBA. Deborah D. Williamson, Esq., at Cox Smith Matthews Incorporated, in San Antonio, Texas, contends that the Union filed its Claim based on causes of action, which were already being litigated in the United States District Court for the District of Arizona, and which was subsequently settled and released in accordance with a court-approved settlement. As a result, she maintains, the Union Claim is unenforceable against ASARCO LLC pursuant to Section 502(b)(1) of the Bankruptcy Code. Union Responds The United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union filed a limited response to the Plan Administrator's objection to and request for disallowance of the Union's Claim No. 10531. The Plan Administrator's Claim Objection suggests that all obligations under the collective bargaining agreement approved by the Court have been assumed by ASARCO LLC as the Reorganized Debtor under the Parent's Confirmed Plan of Reorganization and that the USW and retirees involved in the Court-approved Retiree Health Care Litigation Settlement retain rights to challenge potential future actions by ASARCO, Patrick M. Flynn, Esq., in Houston, Texas, tells Judge Schmidt. The assumption of the New CBA must be complete for the debtor to be relieved of all liabilities, Mr. Flynn contends citing NLRB v. Bildisco & Bildisco, 465 U.S. 513, 531-32. He asserts that the USW opposes the Claim Objection unless the order granting that objection specifically confirms that ASARCO as the Reorganized Debtor has assumed all obligations under the New CBA and that the USW and other relevant parties retain all potential rights against ASARCO reserved under the Retiree Benefits Settlement. Mr. Flynn further contends that any order granting the Claim Objection must contain these languages: (a) "To the extent there are any unpaid amounts due under the New CBA, including any grievance claims by the Union or Union members under the New CBA and any claims related to any of Reorganized ASARCO's Employee Benefit Plans, workers' compensation benefits, or Pension Plans, Asarco LLC as the Reorganized Debtor has agreed to pay those UNPAID CLAIMS in the ordinary course of its business (to the extent they result in monetary relief), even if such liability or obligation relates to Claims incurred (whether or not reported or paid) prior to the Effective Date"; and (b) "As provided in the Retiree Healthcare Litigation Settlement, to the extent Asarco LLC as the Reorganized Debtor modifies or terminates retiree benefits after the expiration of the collective bargaining agreement," which will occur on June 30, 2010 absent an extension or renewal, the parties to the Retiree Settlement Agreement will have the right to challenge the modification or termination and retain all legal arguments that they asserted or could have asserted in the litigation." Parties Stipulate Subsequently, in a Court-approved stipulation, the parties agree that the Plan Administrator's objection is sustained and the USW Claim is disallowed and extinguished in its entirety. To the extent there are any unpaid amounts due under the New CBA, including in respect of (i) grievances by the Union or Union members under the New CBA, (ii) Reorganized ASARCO's Employee Benefit Plans, (iii) workers' compensation benefits, or (iv) Pension Plans, Reorganized ASARCO has agreed to pay those Unpaid Amounts in the ordinary course of business to the extent they result in monetary relief, if due, even if the liability or obligation relates to Unpaid Amounts incurred whether or not reported or paid prior to the Effective Date. 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: Texas Custodial Trust Wants Clarification on Deal ------------------------------------------------------------- Project Navigator Ltd., as Custodial Trustee of the Texas Custodial Trust, asks the Court to clarify the Consent Decree and Settlement Agreement entered into by the United States of America, the state of Texas, the Texas Commission on Environmental Quality, and ASARCO LLC on March 19, 2009. The Consent Decree governs the creation of the Texas Custodial Trust, which took title to two Texas properties owned by ASARCO, commonly known as the El Paso smelting facility and the Amarillo smelting facility on December 9, 2009. The purpose of the transfer of the Properties to the Texas Custodial Trust is to divest ASARCO of ownership of the Properties, to ensure the environmental remediation of those sites by the Trustee, and to eventually sell the Properties to help pay for the costs associated with the environmental remediation and sale of the Properties. The Deed without Warranty, which purports to transfer title to he subject Properties from ASARCO to the Texas Custodial Trust, provides no warranty, either general or special, of title to the Properties, Mary W. Koks, Esq., at Munsch Hardt Kopf & Harr, P.C., in Houston, Texas, tells Judge Schmidt. She reveals that ASARCO was unwilling to enter into any deed that contains any form of a warranty whatsoever, thus, the form of Deed without Warranty that was used to convey the Properties is nothing more than a quit claim deed. She notes that most title companies will not insure title that has a quit claim deed in the chain of title. A concern has arisen by the Custodial Trustee regarding the ability of a future purchaser of the Properties to obtain title insurance with a quit claim deed in the chain of title, Ms. Koks points out. To date, the Custodial Trustee has found only one title company willing to issue a title policy based on the form of Deed without Warranty. Despite this one title company, Ms. Koks contends that there is no guaranty that the same title company, or a different title company, will be willing to insure title to a new purchaser in the future when the Properties are sold by the Custodial Trustee. The inability of a subsequent purchaser to be able to acquire title insurance on the Properties could result in the failure of the Custodial Trustee to effectuate a sale, or at the very least, to obtain full value for the Properties, Ms. Koks argues. She points out that the funds to be received from the sale of the Properties are to supplement the current Custodial Trust funds to conduct the environmental remediation efforts and sale of the Properties, which is in the best interest of all parties. Ms. Koks clarifies that nothing in the Custodial Trustee's request seeks to change the Deed provided by ASARCO to the Custodial Trustee. The request, she explains, only seeks to clarify that the any claims or other ownership interests claimed by third parties were extinguished by the bankruptcy and that all the Debtors' interests in the Properties were transferred to the Trustee. Accordingly, the Custodial Trustee seeks an order from the Court to clarify the approval of the transfer of the Properties in the Consent Decree and Settlement Agreement by finding that: (a) ASARCO was the current and sole record owner vested with fee simple title to the Properties at the time the Properties were conveyed to the Texas Custodial Trust pursuant to the Deed without Warranty; (b) any legal or equitable interests in and to the Properties that can, could, or may have been claimed by any other party as well as any and all other liens, claims, or encumbrances to title that may have existed whether or not listed of record in the real property records of the county in which the Properties are located or with the state of Texas, have been extinguished by their failure to have asserted those claims in the Chapter 11 bankruptcy proceeding affecting the Properties; and (c) the Consent Decree and Settlement Agreement, together with the sought order, approves the conveyance fee simple title to the Properties to the Texas Custodial Trustee, free and clear of any and all liens, claims, or encumbrances. 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) AVIS BUDGET: Bank Debt Trades at 1% Off in Secondary Market ----------------------------------------------------------- Participations in a syndicated loan under which Avis Budget Car Rental LLC is a borrower traded in the secondary market at 98.70 cents-on-the-dollar during the week ended Friday, Feb. 26, 2010, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 1.09 percentage points from the previous week, The Journal relates. The Company pays 125 basis points above LIBOR to borrow under the facility. The bank loan matures on April 1, 2012, and carries Moody's Ba3 rating and Standard & Poor's B+ rating. The debt is one of the biggest gainers and losers among 188 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. Based in Parsippany, New Jersey, Avis Budget Group, Inc., provides car and truck rentals and ancillary services to businesses and consumers in the United States and internationally. Avis Budget Car Rental LLC and Avis Budget Group Inc. carry CCC+ corporate credit ratings from Standard & Poor's. BEAR ISLAND: Weak Dollar, Poor Newsprint Demand Cue Bankruptcy -------------------------------------------------------------- Bear Island Paper Company, L.L.C., filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Eastern District of Virginia on February 24, 2010. The company's parent, White Birch Paper Company, filed for bankruptcy protection under Canada's Companies' Creditors Arrangement Act, before the Superior Court for the Province of Quebec, Commercial Division, Judicial District of Montreal, Canada. White Birch and five other affiliates -- F.F. Soucy Limited Partnership; F.F. Soucy, Inc. & Partners, Limited Partnership; Papier Masson Ltee; Stadacona Limited Partnership; and Stadacona General Partner, Inc. -- also sought bankruptcy protection under Chapter 15 of the U.S. Bankruptcy Code. White Birch blamed its woes on (a) the overall decline in the world economy and its impact on demand for, and price and inventories of, newsprint; (b) the fundamental decline in demand for newsprint as consumers establish greater reliance on electronic alternatives; (c) the increased strength of the Canadian dollar and corresponding weakness of the U.S. dollar; (d) the group's significant debt service obligations; and (e) the detrimental effect of low floating interest rates on the group's position in certain major interest rate swap transactions. On September 30, 2009, White Birch did not make certain payments pursuant to its First and Second Lien Term Loan both arranged by Credit Suisse First Boston and Credit Suisse First Boston Toronto Branch; and its Swap Agreements arranged by TD Securities (USA) LLC, including: (a) an interest payment of $3.7 million under the First Lien Term Loan Agreement; (b) an interest payment of $1.4 million under the Second Lien Term Loan Agreement; and (c) accelerated payments of $51.5 million under the Swap Agreements. White Birch entered into separate forbearance agreements with its lenders, except the lenders under the Second Lien Term Loan Agreement. The latest forbearance periods expired February 26, 2010. With respect to Second Lien lenders, the company failed to secure forbearance. Notwithstanding, the Second Lien lenders were subject to a 180-day standstill pursuant to a 2007 Intercreditor Agreement, and were precluded from exercising their rights or remedies through and including the end of March 2010. During the forbearance periods, White Birch participated in arm's- length and good faith negotiations to reach an out-of-court arrangement with certain of its stakeholders. Unfortunately, no out-of-court restructuring could be reached. Foreign Main Proceeding On the Chapter 15 petition date, White Birch filed a motion asking the Bankruptcy Court to recognize its Canadian Proceeding as a "foreign main proceeding" under Section 1515 of the Bankruptcy Code. White Birch said its needs the U.S. Court's recognition and enforcement in the United States of an order granted by the Canadian Court that, among other things, grants a stay of all proceedings against the Company and their assets, including assets located in the United States. White Birch said the Debtors are exposed to harmful creditor or other actions, which could impact the Company's operations and jeopardize the restructuring. About White Birch White Birch is the second-largest newsprint producer in North America. As of December 31, 2009, the WB Group held a 12% share of the North American newsprint market and employed roughly 1,300 individuals (the majority of which reside in Canada). Additionally, for the 12 months ended December 31, 2009, the WB Group maintained an annual production capacity of roughly 1.3 million metric tons of newsprint and directory paper, up to 50% of which consists of recycled content, and achieved net sales of roughly $667 million. Bear Island's assets are almost exclusively located in the U.S. Jonathan L. Hauser, Esq., at Troutman Sanders LLP, in Virginia Beach, Virginia; and Richard M. Cieri, Esq., Christopher J. Marcus, Esq., and Michael A. Cohen, Esq., at Kirkland & Ellis LLP, in New York, serve as counsel to White Birch, as Foreign Representative. Kirkland & Ellis and Troutman Sanders also serve as Chapter 11 counsel to Bear Island. AlixPartnes LLP serves as financial/restructuring advisor to Bear Island, and Lazard Freres & Co., serves as investment banker. Chief Judge Douglas O. Tice, Jr., handles the Chapter 11 and Chapter 15 cases. BH S&B: Creditors Appeal Fight with Owners ------------------------------------------ Law360 reports that the unsecured creditors of BH S&B Holdings LLC, which purchased the Steve & Barry's clothing store chain out of bankruptcy in August 2008, took their case to district court Friday, after a bankruptcy court rejected their argument that the hedge fund conglomerates that owned BH S&B ran the retailer into the ground. BH S&B Holdings LLC filed for bankruptcy protection together with seven other affiliates on Nov. 19, 2008 (Bankr. S.D. N.Y. Lead Case No. 08-14604). The seven debtor-affiliates are BH S&B Distribution LLC, BH S&B Lico LLC, BH S&B Retail LLC, BHY S&B Intermediate Holdco LLC, Cubicle Licensing LLC, Fashion Plate Licensing LLC, and Heritage Licensing LLC. BH S&B was formed by investment firms Bay Harbour Management and York Capital Management in August 2008 to acquire the business operations and assets of bankrupt retailer Steve & Barry's for $163 million in August 2008. Steve and Barry's, based in Port Washington, New York, was a specialty retailer of apparel and accessories, selling, among other things, university apparel and lifestyle brands, private-label casual clothing, and exclusive celebrity endorsed apparel. Steve & Barry's had 240 locations when it was bought and the new owners had planned to cut that down to 173 stores. BH S&B had intended to operate certain Steve & Barry's stores as going concerns and to liquidate inventory at other locations. Since the sale closing, however, for various reasons, including the general health of the American economy and the state of the retail market in particular, sales at all stores have been disappointing, and BH S&B's revenue has suffered. As a result, BH S&B was not in compliance with certain covenants under their senior secured credit facility and had no prospects for continued financing of their business as a going concern. In consultation with its lenders, BH S&B decided the appropriate course of action to maximize value for the benefit of all of its stakeholders was an orderly liquidation in Chapter 11. Bay Harbour Management is an SEC registered investment advisor with significant experience in purchasing distressed companies and effectuating their turnaround. The firm's holdings have included the retailer Barneys New York, the facilities based CLEC Telcove, and the former Aladdin Casino, now operating on the Las Vegas strip as the Planet Hollywood Resort and Casino following its rebranding and turnaround. York Capital Management is an SEC registered investment advisor with offices in New York, London, and Hong Kong with more than $15 billion in assets under management. York Capital was founded in 1991 and specializes in value oriented and event driven equity and credit investments. BH S&B is 100% owned by BHY S&B Intermediate Holdco LLC. BH S&B and its affiliates' chapter 11 cases are presided over by the Honorable Martin Glenn. Joel H. Levitin, Esq., and Richard A. Stieglitz, Jr., Esq., at Cahill Gordon & Reindel LLP, in New York, serve as bankruptcy counsel to BH S&B and its affiliates. RAS Management Advisors LLC acts as restructuring advisors, and Kurtzman Carson Consultants LLC as claims and notice agent. About Steve & Barry's Steve & Barry's LLC, and 63 affiliates filed separate voluntary petitions under Chapter 11 on July 9, 2008 (Bankr. S.D. N.Y. Lead Case No. 08-12579). Lori R. Fife, Esq., and Shai Waisman, Esq., at Weil, Gotshal & Manges, LLP, represent the Debtors in their restructuring efforts. Pursuant to the Purchase Agreement, the Court authorized 51 entities to change their corporate names. Lead Debtor Steve & Barry's Manhattan LLC (Case No. 08-12579) was changed to Stone Barn Manhattan LLC. Parent company Steve & Barry's LLC (Case No. 08-12615) is now known as Steel Bolt LLC. When Steve & Barry's LLC and its affiliates filed for bankruptcy, they listed $693,492,000 in total assets and $638,086,000 in total debts. BIRCH COMMUNICATIONS: S&P Withdraws 'B-' Corporate Credit Rating ---------------------------------------------------------------- Standard & Poor's Ratings Services said it withdrew its 'B-' corporate credit rating on Atlanta-based competitive local exchange carrier Birch Communications Inc. as well as the 'CCC+' issue-level rating on its $100 million senior secured notes due 2015 at the company's request as the issue was not sold. BUCKEYE TECHNOLOGIES: S&P Puts BB- Rating on CreditWatch Negative ----------------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings, including the 'BB-' corporate credit rating, on Buckeye Technologies Inc. on CreditWatch with positive implications. "The CreditWatch placement acknowledges Buckeye's recently improved financial risk profile following the significant reduction in debt, and S&P's expectation that recovering economic conditions will lead to higher profitability and continued debt reduction in the next several quarters," said Standard & Poor's credit analyst Andy Sookram. Operating margins declined slightly to 15.5% for the 12 months ended Dec. 31, 2009, from 16% for the same period a year ago, reflecting lower demand and selling prices due to the recessionary environment. However, Buckeye continued to generate good levels of free cash flow due to a reduction in capital spending; its significant sales into non-discretionary markets such as food casings, diapers, wipes, and cigarette filters; and lower input costs. For the 12 months ended Dec. 31, 2009, free cash flow, which excludes about $55 million received from alternative fuel tax credits, increased to approximately $60 million from $10 million for the comparable 12-month period in 2008. Buckeye used its free cash flow and funds received from AFTC to reduce debt to about $315 million at Dec. 31, 2009, from $420 million at Dec. 31, 2008. As a result, total adjusted debt to EBITDA declined to 2.9x from 3.2x over the same timeframe, and FFO to adjusted debt increased to 30% from 21%. Given S&P's expectations that an improving economy will lead to higher selling prices and volumes, S&P thinks operating margins will increase to around 16% by Dec. 31, 2010. In addition, S&P believes the company will continue to use free cash flow to reduce debt, such that total adjusted debt to EBITDA based on S&P's projections could decline to around 2.5x, a level that would be in line with a higher rating given the company's fair business risk profile. S&P also expects EBITDA coverage of interest expense to increase to nearly 5x at Dec. 31, 2010, from 4x at Dec. 31, 2009, reflecting the lower debt levels. Based in Memphis, Tenn., Buckeye produces value-added specialty fibers and nonwoven materials that are used in diverse end market applications such as food casings, thickeners, tire cords, and absorbent products. In resolving S&P's CreditWatch listing, S&P will assess management's near- and intermediate-term business and financial strategies, including financial policies, growth objectives, and plans for shareholder returns. If a higher rating is the ultimate outcome of its review, S&P believes it will likely be limited to one notch. BOCK FAMILY TRUST: Voluntary Chapter 11 Case Summary ---------------------------------------------------- Debtor: Bock Family Trust Dated December 9, 1999 C/O Mr. Gregory Bock, Trustee 707 Colleen Dr San Jose, CA 95123 Bankruptcy Case No.: 10-24302 Chapter 11 Petition Date: February 24, 2010 Court: United States Bankruptcy Court Eastern District of California (Sacramento) Judge: Michael S. McManus Debtor's Counsel: Ignascio G. Camarena, II, Esq. 600 W Santa Ana Blvd #108 Santa Ana, CA 92701 Tel: (714) 543-4225 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 Gregory Bock, trustee of the Company. BORA BORA: Automatic Stay Not Extended to Debtor's Principal ------------------------------------------------------------ WestLaw reports that no unusual circumstances existed, of a kind sufficient to warrant issuance of an injunction to extend the protections of the automatic stay to a corporate Chapter 11 debtor's principal and to prevent a creditor from suing the principal on his guarantee of certain corporate debt. The debtor, in seeking such relief, failed to explain why litigation on the guarantee was so complex that it would distract the principal, or how the debtor's business was so complicated that it needed the principal's undivided personal attention to run smoothly. Furthermore, it appeared that funding for the debtor's reorganization would come from a third-party lender, not the principal. In re Bora Bora, Inc., --- B.R. ----, 2010 WL 282415 (Bankr. D. P.R.). Bora Bora, Inc., sought Chapter 11 protection (Bankr. D. P.R. Case No. 09-03693) on May 6, 2009, is represented by Carmen D. Conde Torres, Esq., in San Juan, P.R., and estimated assets of less than $50,000 and debts of more than $10 million at the time of the filing. BUCEPHALUS ALTERNATIVE: Voluntary Chapter 11 Case Summary --------------------------------------------------------- Debtor: Bucephalus Alternative Energy Group, LLC 1221 Avenue of the Americas, 25th Floor New York, NY 10020 Bankruptcy Case No.: 10-10968 Chapter 11 Petition Date: February 24, 2010 Court: United States Bankruptcy Court Southern District of New York (Manhattan) Debtor's Counsel: Bruce Baldinger, Esq. 365 South Street Morristown, NJ 07960 Tel: (908) 218-0060 Fax: (973) 270-0934 Email: bbaldinger@baldingerlaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $500,001 to $1,000,000 The Debtor did not file a list of its 20 largest unsecured creditors when it filed its petition. The petition was signed by Bhavesh Singh, partner of the Company. CALIFORNIA COASTAL: Brightwater Homes Sales Facing Objection ------------------------------------------------------------ KeyBank National Association, in its capacity as Agent for the prepetition lenders, has filed with the U.S. Bankruptcy Court for the Central District of California an objection to California Coastal Communities, Inc. et al.'s request to sell homes at its Brightwater Project in southern California, free and clear of lines, claims, encumbrances and other interests. The Debtors are parties to 17 contracts for the construction and sale of homes in the Brightwater Project. The Debtors' Brightwater Project is also subject to liens arising from the Debtors' prepetition secured financing facilities. The Debtors are parties to a Senior Secured Revolving Credit Agreement, dated as of Sept. 15, 2006, with KeyBank as agent and lender and other lenders and a Senior Secured Term Loan Agreement, dated as of Sept. 15, 2006, with the Agent and other lenders. As reported by the TCR on November 25, 2009, the Court authorized, on an interim basis, the Debtor to sell the home located at Trails Home Lot 2. The Court authorized, on an interim basis, the Debtors to, among other things: -- continue to enter into contracts for the construction and sale of homes and to take actions to close the sale of homes through Dec. 9, 2009; provided, however, that, (i) the sales price of the homes will be at least 95% of the minimum sales price for the applicable home, and (ii) the purchasers of the Homes will be bona fide, non-insider retail purchasers acquiring the Homes for cash and for personal use only. -- continue with their prepetition Customer Programs through Dec. 9, 2009, including without limitation the ability to make non-material modifications to prepetition and postpetition contracts for the sale of homes to address market conditions or other negotiating changes, and to provide additional appropriate incentives consistent with ordinary business practices in the homebuilding industry. On February 17, 2010, the Court allowed the Debtors to continue entering into contracts for the construction and sale of the homes and to take actions to close the sale of Homes through Feb. 24, 2010, provided that (i) the sales price of the Homes will be at least 95% of the minimum sales price for the applicable Home as set forth in the schedule of minimum sale prices provided by the Debtors to the Agent, and (ii) the purchasers of the Homes will be bona fide, non-insider retail purchasers acquiring the Homes for cash and for personal use only. The Debtors were authorized to continue with their prepetition customer programs through the Outside Date, including the ability to make non-material modifications to prepetition or postpetition contracts for the sale of Homes to address market conditions or other negotiating changes as may be necessary, and to provide additional appropriate incentives consistent with ordinary business practices in the homebuilding industry, provided however that the incentives for each Home won't exceed the maximum amounts for the Home set forth on a schedule provided by the Debtors to the Agent. KeyBank is represented by Kaye Scholer LLP. About California Coastal California Coastal Communities, Inc., (Nasdaq: CALC) -- http://www.californiacoastalcommunities.com/-- is a residential land development and homebuilding company operating in Southern California. The Company's principal subsidiaries are Hearthside Homes which is a homebuilding company, and Signal Landmark which owns 105 acres on the Bolsa Chica mesa where sales commenced in August 2007 at the 356-home Brightwater community. Hearthside Homes has delivered 2,200 homes to families throughout Southern California since its formation in 1994. Irvine, California-based California Coastal Communities, Inc., filed for Chapter 11 bankruptcy protection on October 27, 2009 (Bankr. C.D. Calif. Case No. 09-21712). Joshua M. Mester, Esq., who has an office in Los Angeles, California, assists the Company in its restructuring efforts. The Company listed $100,000,001 to $500,000,000 in assets and $100,000,001 to $500,000,000 in liabilities. CALIFORNIA COASTAL: March 10 Hearing Set for Cash Collateral Use ---------------------------------------------------------------- The U.S. Bankruptcy court for the Central District of California has set a hearing for March 10, 2010, at 10:00 a.m. on California Coastal Communities, Inc., et al.'s request to continue using cash collateral. The Debtors are indebted to KeyBank National Association, as agent and lender, and the lenders party thereto: -- in the maximum amount of $100,000,000 pursuant to the Senior Secured Revolving Credit Agreement as of Sept. 15, 2006; and -- in the maximum amount of $125,000,000 pursuant to the Senior Secured Term Credit Agreement as of Sept. 15, 2006. The Debtors have access to cash collateral on an interim basis. As adequate protection, the lenders are granted replacement liens and cash payment of interest at the non-default rates and at the times provided for in the prepetition credit agreements on the prepetition indebtedness. In addition, the Debtors will grant the lenders replacement liens and superpriority administrative expense claim in an amount equal to the amount of any collateral diminution. The prepetition agent's liens on and security interests will be subordinate and subject only to carve-out of $75,000. About California Coastal California Coastal Communities, Inc., is a residential land development and homebuilding company operating in Southern California. The company's principal subsidiaries are Hearthside Homes which is a homebuilding company, and Signal Landmark which owns 105 acres on the Bolsa Chica mesa where sales commenced in August 2007 at the 356-home Brightwater community. Hearthside Homes has delivered 2,200 homes to families throughout Southern California since its formation in 1994. Irvine, California-based California Coastal Communities, Inc., filed for Chapter 11 bankruptcy protection on October 27, 2009 (Bankr. C.D. Calif. Case No. 09-21712). Joshua M. Mester, Esq., who has an office in Los Angeles, California, assists the Company in its restructuring efforts. The Company listed $100,000,001 to $500,000,000 in assets and $100,000,001 to $500,000,000 in liabilities. CARSON RIVER COMMUNITY: Closed; Heritage Bank Assumes All Deposits ------------------------------------------------------------------ Carson River Community Bank, Carson City, Nevada, was closed February 26 by the Nevada Department of Business and Industry, Financial Institutions Division, which appointed the Federal Deposit Insurance Corporation as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Heritage Bank of Nevada, Reno, Nevada, to assume all of the deposits of Carson River Community Bank. The sole branch of Carson River Community Bank will reopen on Monday as a branch of Heritage Bank of Nevada. Depositors of Carson River Community Bank will automatically become depositors of Heritage Bank of Nevada. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship to retain their deposit insurance coverage. Customers should continue to use their former Carson River Community Bank branch until they receive notice from Heritage Bank of Nevada that it has completed systems changes to allow other Heritage Bank of Nevada branches to process their accounts as well. As of December 31, 2009, Carson River Community Bank had approximately $51.1 million in total assets and $50.0 million in total deposits. Heritage Bank of Nevada did not pay the FDIC a premium to assume all of the deposits of Carson River Community Bank. In addition to assuming all of the deposits, Heritage Bank of Nevada agreed to purchase approximately $38.0 million of the failed bank's assets. The FDIC will retain the remaining assets for later disposition. The FDIC and Heritage Bank of Nevada entered into a loss-share transaction on $28.5 million of Carson River Community Bank's assets. Heritage Bank of Nevada will share in the losses on the asset pools covered under the loss-share agreement. The loss-share transaction is projected to maximize returns on the assets covered by keeping them in the private sector. The transaction also is expected to minimize disruptions for loan customers. For more information on loss share, please visit: http://www.fdic.gov/bank/individual/failed/lossshare/index.html Customers who have questions about the transaction can call the FDIC toll-free at 1-800-894-6802. Interested parties also can visit the FDIC's Web site at http://www.fdic.gov/bank/individual/failed/carsonriver.html The FDIC estimates that the cost to the Deposit Insurance Fund will be $7.9 million. Heritage Bank of Nevada's acquisition of all the deposits was the "least costly" resolution for the FDIC's DIF compared to all alternatives. Carson River Community Bank is the 21st FDIC-insured institution to fail in the nation this year, and the first in Nevada. The last FDIC-insured institution closed in the state was Community Bank of Nevada, August 14, 2009. CATALINA LIGHTING: Files for Chapter 11 Bankruptcy Protection ------------------------------------------------------------- Catalina Lighting Inc. filed for Chapter 11 protection in Miami, listing assets of $1 million to $10 million and debt of as much as $50 million. "The recession hit Catalina and other companies in the onsumer lighting industry particularly hard," Catalina Chief Executive Officer A. Corydon Meyer said, according to Bloomberg News. "The slowdown in building and remolding has had a very negative impact on sales." Catalina Lighting Inc. is a maker of residential lighting products. Catalina, based in Miami, distributes its products to retailers including Wal-Mart, Lowes, OfficeMax, Sears, Staples Kmart and Bed Bath and Beyond. Catalina Lighting filed for Chapter 11 on Feb 25, 2010 (Bankr. S.D. Fla. Case No. 10-14786). Affiliate Catalin Industries also sought protection. Stephen P. Drobny, Esq., at Shutts & Bowen LLP, represents the Debtor in its Chapter 11 effort. CAVALIER TELEPHONE: Bank Debt Trades at 14% Off ----------------------------------------------- Participations in a syndicated loan under which Cavalier Telephone is a borrower traded in the secondary market at 85.60 cents-on- the-dollar during the week ended Friday, Feb. 26, 2010, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 0.90 percentage points from the previous week, The Journal relates. The Company pays 475 basis points above LIBOR to borrow under the facility. The bank loan matures on Dec. 31, 2012, carries Moody's Caa2 rating and is not rated by Standard & Poor's. The debt is one of the biggest gainers and losers among 188 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. Cavalier Telephone -- http://www.cavtel.com/-- is a Competitive Local Exchange Carrier (CLEC) headquartered in Richmond Virginia and operating in seven markets across five states and the District of Columbia as a leading competitive service provider to both business and residential customers. CELESTICA INC: S&P Raises Corporate Credit Rating to 'BB' --------------------------------------------------------- Standard & Poor's Ratings Services said it raised its long-term corporate credit rating on Toronto-based EMS provider Celestica Inc. to 'BB' from 'BB-'. At the same time, S&P removed all the ratings from CreditWatch with positive implications where they were placed Jan. 29, 2010, following the company's announcement that it will exercise its option to redeem all of its US$223.1 million 7.625% senior subordinated notes due 2013 from existing cash balances. The outlook is stable. Given the one-notch upgrade to the corporate credit rating, S&P has raised the issue-level rating on the still-outstanding 2013 notes to 'BB' from 'BB-'. The recovery rating on the notes is unchanged at '4', indicating that lenders expect an average (30%- 50%) recovery in the event of payment default. S&P expects to withdraw the ratings on these notes following their redemption on or before March 31, 2010. "S&P believes Celestica's credit quality should improve meaningfully following the planned debt redemption, which will leave the company with no public debt outstanding," said Standard & Poor's credit analyst Madhav Hari. "Given improved operating efficiency, a more favorable revenue outlook, solid liquidity, and more important, S&P's assumption that the company will adhere to 'moderate' financial policies in the near-to-medium term, S&P believes a higher rating is appropriate," Mr. Hari added. The ratings on Celestica reflect S&P's opinion of the company's business risk profile, which S&P view as "fair," given what S&P consider the highly competitive EMS industry; difficult market conditions characterized by still-weak economic recovery as well as a high degree of volatility in the communications and IT infrastructure end-markets; the industry's low capacity utilization, which could affect pricing; and its still-high revenue and customer concentration relative to that of its peers. These factors are partially offset, in Standard & Poor's opinion, by Celestica's Tier-I position in the EMS sector; solid long-term relationships with large customers; and an improved cost structure that positions it favorably for a turnaround. The ratings are also supported by S&P's view that the company should be able to sustain an "intermediate" financial risk profile in the near term largely owing to its expectations that it will adhere to "moderate" financial policies, and that it will maintain strong liquidity for the ratings. Celestica is the fourth-largest EMS provider in the world, with revenues of about US$6.1 billion for the year ended Dec. 31, 2009. The company offers a full range of supply-chain management solutions for original equipment manufacturers. Products and services include the high-volume manufacture of complex printed circuit-board assemblies and full-system assembly of final products, product design, worldwide distribution, and after-sales support. The stable outlook reflects what Standard & Poor's views as Celestica's improved operating efficiency, a more favorable demand outlook, and significant financial flexibility that provides solid support to the ratings. Near-term ratings upside is currently constrained by aggressive industry conditions and, to a lesser extent, the company's weaker revenue and customer diversity relative to Tier-1 EMS peers. Celestica's lightly leveraged balance sheet and good debt capacity provide a substantial degree of downside protection. Nevertheless, the adoption of a more aggressive financial policy, including debt-financed acquisitions, and leverage levels in excess of 3x, could lead us to consider revising the outlook or even downgrading the company. CENTRAL CROSSING: DIP Financing, Collateral Use Gets Interim OK ---------------------------------------------------------------- Central Crossing Business Park Building II, LLC obtained interim authorization from the Hon. Novalyn L. Winfield of the U.S. Bankruptcy Court for the District of New Jersey to access up to the principal amount of $40,000 in postpetition secured financing from Harry and Wendy Kantor and use Webster Bank, N.A.'s cash collateral. The DIP lenders have committed to provide up to $636,000 on a final basis, and $40,000 on an interim basis. Bruce Buechler, Esq., at Lowenstein Sandler PC, the attorney for the Debtor, explains that the Debtor needs the money to fund tenant improvements so that NetFlix, Inc., can take occupancy in the Debtor's industrial building, East Building, and provide the Debtor sufficient liquidity to pay it expenses including monthly interest payments to Webster Bank, whom the Debtor owed $13 million pursuant to a December 2006 prepetition loan agreement. The Debtor signed in January 2010 a lease with Netflix under which Netflix agreed to lease 40,000 square feet of the East Building. The Debtor will grant Kantor a security interest and lien on all assets of the Debtor, junior to allowed secured claim of Webster. A copy of the DIP financing agreement is available for free at: http://ResearchArchives.com/t/s?5552 The Debtor will also use the Cash Collateral to provide additional liquidity, pursuant to a budget. A copy of the budget is available for free at: http://bankrupt.com/misc/CENTRAL_CROSSING_budget.pdf The Debtor will grant Webster a replacement lien for its use of cash collateral. Judge Winfield has set a final hearing for March 16, 2010, at 2:00 p.m. on the Debtor's request to obtain DIP financing and use cash collateral. Jersey City, New Jersey-based Central Crossings Business Park Building II, LLC, owns and operates a portion of an industrial business park located at 300 Bordentown-Hedding Road in Bordentown, New Jersey. The Company filed for Chapter 11 bankruptcy protection on February 18, 2010 (Bankr. D. N.J. Case No. 10-14578). Kenneth Rosen, Esq., at Lowenstein Sandler, assists the Company in its restructuring effort. The Company estimated its assets and debts at $10,000,001 to $50,000,000. CHRYSLER LLC: New Chrysler Asks for More Time on Plant Ownership ---------------------------------------------------------------- Chrysler Group LLC has asked the Sterling Heights City Council for additional time to negotiate the transfer of ownership of its assembly plant, according to The Detroit News. The City Council on January 19 gave Chrysler Group until February 2 to complete the agreement but it proved to be time consuming. Consequently, Chrysler Group sought and received an extension of the deadline. Sterling Heights Mayor Richard Notte said the council will likely agree to give the auto maker 30 more days to complete the transfer of ownership of the plant assets from old Chrysler LLC to Chrysler Group, The Detroit News reported. City Manager Mark Vanderpool said Sterling Heights is hoping the plant will be chosen to make the next-generation cars because Chrysler is the community's largest taxpayer. He said the auto maker generates $2.6 million annually in tax revenue, and that the plant and its 1,200 jobs also generate as much as $500 million in spinoff benefits, according to the report. The Sterling Heights plant was left behind with other discarded assets in Chrysler LLC, which remains under bankruptcy protection. The U.S. Bankruptcy Court for the Southern District of New York, which oversees the bankruptcy case, supervises the disposition of old assets. The Sterling Heights plant makes the Chrysler Sebring and Dodge Avenger. Chrysler Group previously planned to shut down the plant at the end of 2010 but reversed its decision after it decided to produce upgraded versions of the Avenger and Sebring models through 2012. Chrysler Group was offered a tax break by the City Council if it agrees to keep the plant open. Doug Bernstein, Esq., a bankruptcy attorney with Plunkett Cooney, said Chrysler could have saved a significant amount of money had it included the Sterling Heights plant in its bankruptcy exit plan, according to a report by Detroit Free Press. About Chrysler Group LLC Chrysler Group LLC, formed in 2009 from a global strategic alliance with Fiat Group, produces Chrysler, Jeep(R), Dodge, Ram Truck, Mopar(R) and Global Electric Motorcars (GEM) brand vehicles and products. Headquartered in Auburn Hills, Michigan, Chrysler Group LLC's product lineup features some of the world's most recognizable vehicles, including the Chrysler 300, Jeep Wrangler and Ram Truck. Fiat will contribute world-class technology, platforms and powertrains for small- and medium-sized cars, allowing Chrysler Group to offer an expanded product line including environmentally friendly vehicles. About Chrysler LLC Chrysler LLC and 24 affiliates on April 30 sought Chapter 11 protection from creditors (Bankr. S.D.N.Y (Mega-case), Lead Case No. 09-50002). Chrysler hired Jones Day, as lead counsel; Togut Segal & Segal LLP, as conflicts counsel; Capstone Advisory Group LLC, and Greenhill & Co. LLC, for financial advisory services; and Epiq Bankruptcy Solutions LLC, as its claims agent. Chrysler has changed its corporate name to Old CarCo following its sale to a Fiat-owned company. As of December 31, 2008, Chrysler had $39,336,000,000 in assets and $55,233,000,000 in debts. Chrysler had $1.9 billion in cash at that time. In connection with the bankruptcy filing, Chrysler reached an agreement with Fiat SpA, the U.S. and Canadian governments and other key constituents regarding a transaction under Section 363 of the Bankruptcy Code that would effect an alliance between Chrysler and Italian automobile manufacturer Fiat. Under the terms approved by the Bankruptcy Court, the company formerly known as Chrysler LLC on June 10, 2009, formally sold substantially all of its assets, without certain debts and liabilities, to a new company that will operate as Chrysler Group LLC. Fiat has a 20 percent equity interest in Chrysler Group. Bankruptcy Creditors' Service, Inc., publishes Chrysler Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Chrysler LLC and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CHRYSLER LLC: New Chrysler Eyes Return of Alfa Romeo in N. America ------------------------------------------------------------------ Sergio Marchionne, chief executive of Chrysler Group LLC, has indicated that the Alfa Romeo model may make a return to the North American market, according to The Province. "I'm a lot more confident now . . . that Alfa Romeo will reconstitute a product offering that is acceptable globally, and more in particular in the United States and Canada," The Province quoted Mr. Marchionne as saying. He added that there is "strong likelihood" that the vehicle will be back within the next 24 months. The Alfa Romeo Brand was last seen in North America in the mid- 1990s. Mr. Marchionne further said that if the new Alfa Romeo 169 gets built, it will be manufactured in Brampton, Ontario. A decision on the Alfa Romeo 169 is expected by the end of the year, The Province reported. About Chrysler Group LLC Chrysler Group LLC, formed in 2009 from a global strategic alliance with Fiat Group, produces Chrysler, Jeep(R), Dodge, Ram Truck, Mopar(R) and Global Electric Motorcars (GEM) brand vehicles and products. Headquartered in Auburn Hills, Michigan, Chrysler Group LLC's product lineup features some of the world's most recognizable vehicles, including the Chrysler 300, Jeep Wrangler and Ram Truck. Fiat will contribute world-class technology, platforms and powertrains for small- and medium-sized cars, allowing Chrysler Group to offer an expanded product line including environmentally friendly vehicles. About Chrysler LLC Chrysler LLC and 24 affiliates on April 30 sought Chapter 11 protection from creditors (Bankr. S.D.N.Y (Mega-case), Lead Case No. 09-50002). Chrysler hired Jones Day, as lead counsel; Togut Segal & Segal LLP, as conflicts counsel; Capstone Advisory Group LLC, and Greenhill & Co. LLC, for financial advisory services; and Epiq Bankruptcy Solutions LLC, as its claims agent. Chrysler has changed its corporate name to Old CarCo following its sale to a Fiat-owned company. As of December 31, 2008, Chrysler had $39,336,000,000 in assets and $55,233,000,000 in debts. Chrysler had $1.9 billion in cash at that time. In connection with the bankruptcy filing, Chrysler reached an agreement with Fiat SpA, the U.S. and Canadian governments and other key constituents regarding a transaction under Section 363 of the Bankruptcy Code that would effect an alliance between Chrysler and Italian automobile manufacturer Fiat. Under the terms approved by the Bankruptcy Court, the company formerly known as Chrysler LLC on June 10, 2009, formally sold substantially all of its assets, without certain debts and liabilities, to a new company that will operate as Chrysler Group LLC. Fiat has a 20 percent equity interest in Chrysler Group. Bankruptcy Creditors' Service, Inc., publishes Chrysler Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Chrysler LLC and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CHRYSLER LLC: New Chrysler Halts Production at Two Plants --------------------------------------------------------- Chrysler Group LLC has suspended production at its assembly plants in Michigan and Illinois because of parts shortages, according to Bloomberg News. Production at the Michigan factory was suspended for two days while the auto maker awaits a supply of parts affected by inclement weather, according to Chrysler spokeswoman Jodi Tinson. Chrysler Group also temporarily idled its output at the Illinois plant, with work to resume on February 19, Ms. Tinson said. She did not disclose what caused the shortage and did not name the supplier or the part. "We don't expect any loss of production. We'll find ways to make it up as we go," Bloomberg News quoted Ms. Tinson as saying. This was not the first time Chrysler Group had to suspend its production because of issues with suppliers. In October 2009, Chrysler Group had to suspend production of its Jeep Wrangler in Toledo for one week because of an undisclosed part problem. Last month, the auto maker halted production at its plant in Ontario for almost a week also because of a part problem, The Wall Street Journal reported. Chrysler Group Chief Executive Sergio Marchionne met with suppliers last year to repair relations that were strained after the auto maker closed its plants for more than two months and after it won court approval to delay or reduce payment for parts received, according to the report. In Illinois, some area suppliers were forced to lay off employees after Chrysler Group closed its plant last year. Some of the suppliers had had difficulty meeting demand since the plants reopened, according to another report by FOXBusiness. "We are cleaning up (our relationships). We have had to make some payments as part of the process and we are trying to resolve some issues that have been out there for years," Mr. Marchionne told the Journal in an interview in January. He added that he plans to be direct with the supply base in the future. About Chrysler Group LLC Chrysler Group LLC, formed in 2009 from a global strategic alliance with Fiat Group, produces Chrysler, Jeep(R), Dodge, Ram Truck, Mopar(R) and Global Electric Motorcars (GEM) brand vehicles and products. Headquartered in Auburn Hills, Michigan, Chrysler Group LLC's product lineup features some of the world's most recognizable vehicles, including the Chrysler 300, Jeep Wrangler and Ram Truck. Fiat will contribute world-class technology, platforms and powertrains for small- and medium-sized cars, allowing Chrysler Group to offer an expanded product line including environmentally friendly vehicles. About Chrysler LLC Chrysler LLC and 24 affiliates on April 30 sought Chapter 11 protection from creditors (Bankr. S.D.N.Y (Mega-case), Lead Case No. 09-50002). Chrysler hired Jones Day, as lead counsel; Togut Segal & Segal LLP, as conflicts counsel; Capstone Advisory Group LLC, and Greenhill & Co. LLC, for financial advisory services; and Epiq Bankruptcy Solutions LLC, as its claims agent. Chrysler has changed its corporate name to Old CarCo following its sale to a Fiat-owned company. As of December 31, 2008, Chrysler had $39,336,000,000 in assets and $55,233,000,000 in debts. Chrysler had $1.9 billion in cash at that time. In connection with the bankruptcy filing, Chrysler reached an agreement with Fiat SpA, the U.S. and Canadian governments and other key constituents regarding a transaction under Section 363 of the Bankruptcy Code that would effect an alliance between Chrysler and Italian automobile manufacturer Fiat. Under the terms approved by the Bankruptcy Court, the company formerly known as Chrysler LLC on June 10, 2009, formally sold substantially all of its assets, without certain debts and liabilities, to a new company that will operate as Chrysler Group LLC. Fiat has a 20 percent equity interest in Chrysler Group. Bankruptcy Creditors' Service, Inc., publishes Chrysler Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Chrysler LLC and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CHRYSLER LLC: New Chrysler to Sell Fiat 500 in Canada by Dec. ------------------------------------------------------------- Chrysler will begin selling the subcompact Fiat 500 in Canada by December, hoping the smaller but more fuel-efficient vehicles would allow it to compete more effectively, according to a report by The Canadian Press. The vehicle will be the first Fiat model to be sold at Chrysler dealerships since the Italy-based Fiat S.p.A. and the auto maker partnered up last year. Reid Bigland, president and chief executive of Chrysler Canada, said the vehicle allows Chrysler to fill an important gap in its vehicle lineup. He said he can foresee the Fiat 500 becoming an immediate competitor to the Toyota Yaris and the Honda Fit when it arrives, according to the report. "What Fiat brings is significant strength in the small and compact-vehicle segments and the small and compact-vehicle technologies. So the Fiat 500 lands squarely in the Canadian market wheelhouse," the Canadian Press quoted Mr. Bigland as saying. Mr. Bigland said Chrysler does not have plans to introduce other Fiat cars to North America but Fiat's engine technology will find its way into Chrysler products as early as this spring, according to the report. Chrysler took the No. 2 sales spot in Canada last month but sales of its vehicles fell 39% during January compared with the same month in 2009, according to a February 16 report by The Province. Dennis DesRosiers, president of DesRosiers Automotive Consultants, said Chrysler has a weak product lineup right now. "Sixty percent of the market is [compact and subcompact] cars and they're weak in that segment," The Province quoted him as saying. 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) CINRAM INTL: Bank Debt Trades at 23% Off in Secondary Market ------------------------------------------------------------ Participations in a syndicated loan under which Cinram International, Inc., is a borrower traded in the secondary market at 77.05 cents-on-the-dollar during the week ended Friday, Feb. 26, 2010, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 1.88 percentage points from the previous week, The Journal relates. The Company pays 175 basis points above LIBOR to borrow under the facility. The bank loan matures on April 26, 2011, and carries Moody's B3 rating and Standard & Poor's B- rating. The debt is one of the biggest gainers and losers among 188 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. As reported by the Troubled Company Reporter on Feb. 3, 2010, Standard & Poor's lowered its ratings on Scarborough, Ontario- based Cinram International, Inc., including the long-term corporate credit rating to 'B-' from 'B'. At the same time, S&P placed all the ratings on CreditWatch with negative implications. "The rating actions follow the announcement that Cinram received notice that Warner Home Video, Inc., has exercised its option to terminate its service agreements with Cinram on July 31, 2010," said Standard & Poor's credit analyst Lori Harris. Warner Home Video (WHV; not rated) is a subsidiary of Time Warner, Inc. (BBB/Stable/A-2). On Feb. 5, 2010, the TCR said Moody's downgraded Cinram International, Inc.'s corporate family and probability of default ratings to Caa1 and Caa2 (previously B3 and Caa1). Individual debt instruments were also downgraded by one notch. The rating actions stem directly from Cinram's announcement that "it has received written notice from Warner Home Video Inc. that WHV has exercised its option to terminate its service agreements on July 31, 2010. The notice covers all Cinram entities globally and will directly impact operations in North America, Mexico, UK, France, Germany and Spain. Cinram has not provided a clear explanation of the underlying commercial issues that caused the WHV contract termination notice. With headquarters in Toronto, Ontario, Canada, Cinram International, Inc., is one of the world's largest independent manufacturers, replicators and distributors of DVDs and audio CDs. CITADEL BROADCASTING: Bank Debt Trades at 17% Off ------------------------------------------------- Participations in a syndicated loan under which Citadel Broadcasting Corporation is a borrower traded in the secondary market at 82.57 cents-on-the-dollar during the week ended Friday, Feb. 26, 2010, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 1.96 percentage points from the previous week, The Journal relates. Citadel pays 175 basis points above LIBOR to borrow under the loan facility, which matures on June 1, 2014. Moody's has withdrawn its rating, while Standard & Poor's has assigned a default rating, on the bank debt. The debt is one of the biggest gainers and losers among 188 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. Citadel Broadcasting Corporation (OTC BB: CTDB) -- http://www.citadelbroadcasting.com/-- is the third largest radio group in the United States, with a national footprint reaching more than 50 markets. Citadel is comprised of 166 FM stations and 58 AM stations in the nation's leading markets, in addition to Citadel Media, which is one of the three largest radio networks in the United States. Citadel Broadcasting filed for Chapter 11 with 50 affiliates on Dec. 20, 2009, in Manhattan (Bankr. S.D.N.Y. Case No. 09-17422). The Company listed assets of $1.4 billion and debt of $2.5 billion in its Chapter 11 filing. Kirkland & Ellis LLP is serving as legal counsel and Lazard Freres & Co. LLC as financial advisor for the restructuring. Kurtzman Carson Consultants is serving as claims and notice agent. Bankruptcy Creditors' Service, Inc., publishes Citadel Broadcasting Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Citadel Broadcasting Corp. and other affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CITIGROUP INC: CEO Pandit Gets Alwaleed Bin Talal's Support ----------------------------------------------------------- Dow Jones Newswires' Summer Said reports that Saudi Arabia's billionaire Prince Alwaleed Bin Talal, Citigroup Inc.'s biggest individual shareholder, reiterated Saturday his support of the bank's chief executive, Vikram Pandit, and Citigroup's management. According to Dow Jones, Mr. Alwaleed's holding company, Kingdom Holding, said he and Mr. Pandit met and "discussed economic issues and the latest developments in Citigroup." It said that Mr. Pandit also met with the Saudi Arabia's Finance Minister Ibrahim al-Assaf and the head of Saudi Arabia's central bank, Muhammad al- Jasser in Riyadh. According to Dow Jones, Mr. Pandit on Sunday said Citigroup is exploring new investment opportunities in the Middle East, which is a "core part" of its growth strategy. Dow Jones recalls Mr. Alwaleed told Fox Business that 2010 was the year Mr. Pandit had "to deliver" results and that shareholders had already given the U.S. bank two years to turn it around. In 2006, Dow Jones continues, Mr. Alwaleed grew impatient with the U.S. bank's former CEO Charles Prince, complaining that the bank's costs were rising faster than its revenue. Mr. Pandit replaced Mr. Prince in 2007. About Citigroup Based in New York, Citigroup Inc. (NYSE: C) -- is a global diversified financial services holding company whose businesses provide a broad range of financial services to consumer and corporate customers. Citigroup has roughly 200 million customer accounts and does business in more than 140 countries. Citigroup's businesses are aligned in three reporting segments: (i) Citicorp, which consists of Regional Consumer Banking (in North America, EMEA, Asia, and Latin America) and the Institutional Clients Group (Securities and Banking, including the Private Bank, and Transaction Services); (ii) Citi Holdings, which consists of Brokerage and Asset Management, Local Consumer Lending, and a Special Asset Pool; and (iii) Corporate/Other. As reported in the Troubled Company Reporter on November 25, 2008, the U.S. government entered into an agreement with Citigroup to provide a package of guarantees, liquidity access, and capital. The U.S. Treasury and the Federal Deposit Insurance Corporation agreed to provide protection against the possibility of unusually large losses on an asset pool of roughly $306 billion of loans and securities backed by residential and commercial real estate and other such assets, which will remain on Citigroup's balance sheet. As a fee for this arrangement, Citigroup issued preferred shares to the Treasury and FDIC. The Federal Reserve agreed to backstop residual risk in the asset pool through a non-recourse loan. Citigroup, the third-biggest U.S. bank, received $45 billion in bailout aid. Other bailed-out banks, including Bank of America Corp., Wells Fargo & Co., have pledged to repay TARP money. JPMorgan Chase & Co., Goldman Sachs Group Inc. and Morgan Stanley, repaid TARP funds in June. Citigroup is selling assets to repay the bailout funds. Citigroup is one of the banks that, according to results of the government's stress test, need more capital. CITIGROUP INC: Says Internet Banking Unit Not For Sale ------------------------------------------------------ Dow Jones Newswires' Summer Said reports that Citigroup Inc. on Sunday denied its Internet banking unit Egg is for sale, following a report in the U.K.'s Mail On Sunday that Citi is in talks over a disposal. A spokeswoman for Citi said the division isn't for sale and also denied it is actively seeking buyers. Based in New York, Citigroup Inc. (NYSE: C) -- is a global diversified financial services holding company whose businesses provide a broad range of financial services to consumer and corporate customers. Citigroup has roughly 200 million customer accounts and does business in more than 140 countries. Citigroup's businesses are aligned in three reporting segments: (i) Citicorp, which consists of Regional Consumer Banking (in North America, EMEA, Asia, and Latin America) and the Institutional Clients Group (Securities and Banking, including the Private Bank, and Transaction Services); (ii) Citi Holdings, which consists of Brokerage and Asset Management, Local Consumer Lending, and a Special Asset Pool; and (iii) Corporate/Other. As reported in the Troubled Company Reporter on November 25, 2008, the U.S. government entered into an agreement with Citigroup to provide a package of guarantees, liquidity access, and capital. The U.S. Treasury and the Federal Deposit Insurance Corporation agreed to provide protection against the possibility of unusually large losses on an asset pool of roughly $306 billion of loans and securities backed by residential and commercial real estate and other such assets, which will remain on Citigroup's balance sheet. As a fee for this arrangement, Citigroup issued preferred shares to the Treasury and FDIC. The Federal Reserve agreed to backstop residual risk in the asset pool through a non-recourse loan. Citigroup, the third-biggest U.S. bank, received $45 billion in bailout aid. Other bailed-out banks, including Bank of America Corp., Wells Fargo & Co., have pledged to repay TARP money. JPMorgan Chase & Co., Goldman Sachs Group Inc. and Morgan Stanley, repaid TARP funds in June. Citigroup is selling assets to repay the bailout funds. Citigroup is one of the banks that, according to results of the government's stress test, need more capital. CLAIRE'S STORES: Bank Debt Trades at 17% Off in Secondary Market ---------------------------------------------------------------- Participations in a syndicated loan under which Claire's Stores, Inc., is a borrower traded in the secondary market at 82.75 cents- on-the-dollar during the week ended Friday, Feb. 26, 2010, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 3.13 percentage points from the previous week, The Journal relates. The Company pays 275 basis points above LIBOR to borrow under the facility. The bank loan matures on May 29, 2014, and carries Moody's Caa2 rating and Standard & Poor's B- rating. The debt is one of the biggest gainers and losers among 188 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. Claire's Stores, Inc. -- http://www.clairestores.com/-- operates as a specialty retailer of fashion accessories and jewelry for preteens and teenagers, as well as for young adults in North America and internationally. It offers jewelry products that comprise costume jewelry, earrings, and ear piercing services; and accessories, including fashion accessories, hair ornaments, handbags, and novelty items. Based in Pembroke Pines, Florida, Claire's Stores operates under two brands: Claire's(R), which operates worldwide and Icing(R), which operates only in North America. As of Jan. 31, 2009, Claire's Stores, Inc., operated 2,969 stores in North America and Europe. Claire's Stores, Inc., also operates through its subsidiary, Claire's Nippon, Co., Ltd., 213 stores in Japan as a 50:50 joint venture with AEON, Co., Ltd. The Company also franchises 198 stores in the Middle East, Turkey, Russia, South Africa, Poland and Guatemala. As stated by the Troubled Company Reporter on Sept. 14, 2009, Claire's Stores, Inc., reported a net loss of $3.733 million for the three months ended Aug. 1, 2009, from a net loss of $16.93 million for the three months ended Aug. 2, 2008. The Company reported a net loss of $32.75 million for the six months ended Aug. 1, 2009, from a net loss of $52.50 million for the six months ended Aug. 2, 2008. At Aug. 1, 2009, the Company had $2.85 billion in total assets; and $190.73 million in total current liabilities and $2.72 billion in total long-term and other liabilities, resulting in $60.10 million in stockholders' deficit. CONSECO INC: Reports $85.7 Million Net Income in 2009 ----------------------------------------------------- Conseco, Inc., disclosed Thursday results for the fourth quarter and year-end 2009. The Company reported net income of $18.2 million, or $0.09 per diluted share in Q4 2009, compared to a net loss of $453.3 million, or ($2.45) per diluted share in Q4 2008 (including $13.8 million of net realized investment losses, valuation allowance for deferred tax assets and loss on extinguishment or modification of debt, in Q4 2009 vs. $486.7 million of net realized investment losses, valuation allowance for deferred tax assets, losses related to discontinued operations, net of gain on extinguishment of debt in Q4 2008) For the full year ended December 31, 2009, net income was $85.7 million, or $0.45 per diluted share, compared to a net loss of $1.132 billion, or ($6.13 per diluted share) in 2008 (including $78.9 million of net realized investment losses, valuation allowance for deferred tax assets and loss on extinguishment or modification of debt in 2009 vs. $1,269.3 million of net realized investment losses, valuation allowance for deferred tax assets, losses related to discontinued operations, net of gain on extinguishment of debt in 2008). "We are pleased to report that Conseco delivered its fourth consecutive profitable quarter," CEO Jim Prieur said. "Overall sales were up by 18% over the fourth quarter of 2008, led by a strong performance by our Bankers Life business. Our business model continues to perform well, and we are well positioned to serve the rapidly growing middle income and retirement markets," Mr. Prieur said. "Results for the quarter were impacted significantly by charges related to accruals for regulatory and legal settlements, as well as charges related to the extinguishment of debt. The impact of these charges on net income per share was approximately 8 cents for the quarter," Mr. Prieur said. "During the quarter we also successfully completed our recapitalization with the issuance of common stock, adding $296 million of equity," CFO Ed Bonach said. "In addition, we paid down $223 million of debt, further strengthening our financial foundation and positioning us for continued growth." During 2009, significant improvements were made to the actuarial reporting internal control environment in the Company's Conseco Insurance Group segment. Although controls have been enhanced, not all of the improved controls have operated for a period of time necessary to demonstrate their effectiveness at December 31, 2009. The issues that resulted in the Company's continued material control weakness have been identified and relate to less than 12% (or $230 million) of the Company's specified disease policy reserves. Given its enhanced controls and remediation efforts, the Company believes total policy reserves are reasonably stated. Balance Sheet At December 31, 2009, the Company's consolidated balance sheet showed total assets of $30.343 billion, total liabilities of $26.811 billion, and total shareholders' equity of $3.532 billion. A full-text copy of the Company's press release disclosing its financial results for the quarter and year ended December 31, 2009, is available for free at http://researcharchives.com/t/s?5558 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." CRACKER BARREL: Bank Debt Trades at 2% Off in Secondary Market -------------------------------------------------------------- Participations in a syndicated loan under which Cracker Barrel Old Country Store, Inc., is a borrower traded in the secondary market at 97.75 cents-on-the-dollar during the week ended Friday, Feb. 26, 2010, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 0.71 percentage points from the previous week, The Journal relates. The Company pays 150 basis points above LIBOR to borrow under the facility. The bank loan matures on April 27, 2013, and carries Moody's Ba3 rating and Standard & Poor's BB- rating. The debt is one of the biggest gainers and losers among 188 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. As reported by the Troubled Company Reporter on Oct. 22, 2009, Moody's affirmed all ratings of Cracker Barrel Old Country Store, Inc., including its Ba3 Corporate Family Rating and Probability of Default Rating and Ba3 senior secured rating. In addition, the outlook for CBRL was changed to stable from negative. On Oct. 16, 2009, The TCR stated that Standard & Poor's revised its outlook on Cracker Barrel Old Country Store, Inc., to stable from negative because of improved credit metrics and improved cushion over financial covenants. S&P also affirmed the ratings on the company, including the 'BB-' corporate credit rating. Cracker Barrel Old Country Store, Inc., headquartered in Tennessee, owns and operates the Cracker Barrel Old Country Store restaurant and retail concept with approximately 590 restaurants in 41 states. Annual revenues are approximately $2.4 billion. CRESCENT RESOURCES: Bank Debt Trades at 59% Off ----------------------------------------------- Participations in a syndicated loan under which Crescent Resources, LLC, is a borrower traded in the secondary market at 41.10 cents-on-the-dollar during the week ended Friday, Feb. 26, 2010, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 1.70 percentage points from the previous week, The Journal relates. The Company pays 300 basis points above LIBOR to borrow under the facility. The bank loan matures on Nov. 8, 2012, and carries Moody's B1 rating and Standard & Poor's B+ rating. The debt is one of the biggest gainers and losers among 188 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. 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. DANA HOLDING: Bank Debt Trades at 3% Off in Secondary Market ------------------------------------------------------------ Participations in a syndicated loan under which Dana Holding Corporation is a borrower traded in the secondary market at 97.00 cents-on-the-dollar during the week ended Friday, Feb. 26, 2010, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 1.27 percentage points from the previous week, The Journal relates. The Company pays 375 basis points above LIBOR to borrow under the facility. The bank loan matures on Jan. 31, 2015, and carries Moody's B1 rating and Standard & Poor's B+ rating. The debt is one of the biggest gainers and losers among 188 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. Based in Toledo, Ohio, Dana Holding Corporation -- http://www.dana.com/-- designs and manufactures products for every major vehicle producer in the world, and supplies drivetrain, chassis, structural, and engine technologies to those companies. Dana employs 46,000 people in 28 countries. Dana is focused on being an essential partner to automotive, commercial, and off-highway vehicle customers, which collectively produce more than 60 million vehicles annually. Dana has facilities in China in the Asia-Pacific, Argentina in the Latin-American regions and Italy in Europe. Dana Corp., together with affiliates, affiliates filed for Chapter 11 protection on March 3, 2006 (Bankr. S.D.N.Y. Case No. 06- 10354). Attorneys at Jones Day represented the Debtors. It emerged from bankruptcy Jan. 31, 2008, and the reorganized entity was named Dana Holding Corporation. As reported in the Troubled Company Reporter on June 9, 2009, Moody's Investors Service lowered the Corporate Family Rating of Dana Holding Corporation to 'Caa2', raised the Probability of Default Rating to 'Caa1', and adjusted the ratings of certain debt instruments. According to Moody's, the positioning of Dana's PDR at 'Caa1' reflects ongoing pressures the company faces from the continued erosion in the global automotive and commercial vehicle markets. DAREN BERG: 10th Cir. BAP Says Discharge Denial Premature --------------------------------------------------------- WestLaw reports that a Wyoming bankruptcy court erred by denying a Chapter 11 debtor a discharge without making findings concerning two of the three elements of 11 U.S.C. Sec. 1141(d)(3), the section of the Bankruptcy Code governing the denial of discharge in a Chapter 11 case. Although the court determined that the debtor would not have been eligible for a Chapter 7 discharge under Sec. 727(a)(3) due to inadequate recordkeeping, it failed to address whether the debtor had confirmed a liquidating plan and whether the debtor intended to engage in business after consummating the plan. All three elements had to be established before the debtor's discharge could be denied under Sec. 1141(d)(3). In re Berg, ---B.R.----, 2010 WL 537566 (10th Cir. BAP). Daren Scott Berg sought chapter 11 protection (Bankr. D. Wyo. Case No. 08-20184) on April 2, 2008. A copy of the Debtor's chapter 11 petition is avaialable at http://bankrupt.com/misc/wyb08-20184.pdf at no charge. DEP THI TRIEU: Case Summary & 18 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Dep Thi Trieu 6946 Calabazas Creek Circle San Jose, CA 95129 Bankruptcy Case No.: 10-51793 Chapter 11 Petition Date: February 24, 2010 Court: United States Bankruptcy Court Northern District of California (San Jose) Judge: Robert N. Kwan Debtor's Counsel: Michael Chinh Vu, Esq. VUSA Law Offices 142 E Mission St. San Jose, CA 95112 Tel: (408) 288-7400 Email: michaelvu@vusalaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 According to the schedules, the Company has assets of $1,932,120, and total debts of $3,077,893. A full-text copy of the Debtor's petition, including a list of its 18 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/canb10-51793.pdf The petition was signed by Dep Thi Trieu. DEX MEDIA WEST: Bank Debt Trades at 5% Off in Secondary Market -------------------------------------------------------------- Participations in a syndicated loan under which Dex Media West LLC is a borrower traded in the secondary market at 95.35 cents-on- the-dollar during the week ended Friday, Feb. 26, 2010, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents a drop of 1.30 percentage points from the previous week, The Journal relates. The Company pays 450 basis points above LIBOR to borrow under the facility. The bank loan matures on Oct. 24, 2014, and is not rated by Moody's and Standard & Poor's. The debt is one of the biggest gainers and losers among 188 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. Dex Media West LLC is a subsidiary of Dex Media West, Inc., and an indirect wholly owned subsidiary of Dex Media, Inc. Dex Media is a direct wholly owned subsidiary of R.H. Donnelley Corporation. Dex Media West is the exclusive publisher of the official yellow pages and white pages directories for Qwest Corporation, the local exchange carrier of Qwest Communications International Inc., in Arizona, Idaho, Montana, Oregon, Utah, Washington, and Wyoming. R.H. Donnelley Corp. and 19 of its affiliates, including Dex Media East LLC, Dex Media West LLC and Dex Media Inc., filed for Chapter 11 protection on May 28, 2009 (Bank. D. Del. Case No. 09-11833 through 09-11852), after missing a $55 million interest payment on its senior unsecured notes due April 15. James F. Conlan, Esq., Larry J. Nyhan, Esq., Jeffrey C. Steen, Esq., Jeffrey E. Bjork, Esq., and Peter K. Booth, Esq., at Sidley Austin LLP, in Chicago, Illinois represent the Debtors in their restructuring efforts. Edmon L. Morton, Esq., and Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor LLP, in Wilmington, Delaware, serve as the Debtors' local counsel. The Debtors' financial advisor is Deloitte Financial Advisory Services LLP while its investment banker is Lazard Freres & Co. LLC. The Garden City Group, Inc., is claims and noticing agent. As of March 31, 2009, the Company had $929,829,000 in total assets and $1,023,526,000 in total liabilities, resulting in $93,697,000 in total shareholders' deficit. Bankruptcy Creditors' Service, Inc., publishes R.H. Donnelley Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of R.H. Donnelley Corp. and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) DIAMONDROCK HOSPITALITY: Out of Compliance with Loan Requirements ----------------------------------------------------------------- DiamondRock Hospitality Company recognized that it was out of compliance with certain loan requirements related to the completion of specified capital projects at Frenchman's Reef and Morning Star Marriott Beach Resort ("Frenchman's Reef"). The Company proactively raised the issue with the loan servicer and is currently in discussions to reach a mutually agreeable solution. Specifically, as of December 31, 2009, the Company had not completed certain capital projects required under the $62.5 million limited recourse mortgage loan secured by Frenchman's Reef (the "Loan"). The Loan stipulated that the Company should complete certain capital projects by December 31, 2008 and December 31, 2009, respectively, or request for the extension of the due date in accordance with the Loan. The failure to complete the capital projects or receive an extension resulted in a non- monetary Event of Default as of January 1, 2009. During an Event of Default the lender has the ability to charge penalty interest of 5% above the Loan's stated interest rate. In addition, the lender has the right to declare that the Loan is due and payable which will accelerate the maturity date of the loan. As of February 26, 2010, the lender has not declared the Loan due and payable. The Loan penalty interest is $3.1 million for the year ended December 31, 2009. The Company is currently in discussions with the Loan master servicer and special servicer to obtain a waiver of the Event of Default and extend the due date of the capital projects to December 31, 2012. If the Loan servicers accept the Company's proposed solution to this Event of Default and enter into the amendment, the Company may reverse the $3.1 million penalty interest accrual. If the Company is unable to reach agreement with the Loan servicers, there is a risk that the lender will exercise its right to accelerate the Loan. The Loan is non- recourse to the Company with the exception of a $2 million corporate guaranty of the completion of certain capital projects. The corporate guaranty is not eliminated in the event of an acceleration of the Loan or lender foreclosure of Frenchman's Reef. A copy of the company's fourth quarter and full-year financial report is available free at http://ResearchArchives.com/t/s?5560 About DiamondRock Hospitality DiamondRock Hospitality Company -- www.drhc.com. -- is a self- advised real estate investment trust (REIT) that is an owner of premium hotel properties. DiamondRock owns 20 hotels with approximately 9,600 guestrooms. DOROTHY EARGLE TRUST: Voluntary Chapter 11 Case Summary ------------------------------------------------------- Debtor: Dorothy M. Eargle Trust PO Box 700 Saluda, NC 28773 Bankruptcy Case No.: 10-40111 Chapter 11 Petition Date: February 24, 2010 Court: United States Bankruptcy Court Western District of North Carolina (Shelby) Judge: George R. Hodges Debtor's Counsel: David G. Gray, Esq. 81 Central Avenue Asheville, NC 28801 Tel: (828) 254-6315 Email: judyhj@bellsouth.net Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $500,001 to $1,000,000 According to the schedules, the Company has assets of $1,864,500, and total debts of $667,514. The Company says it does not have unsecured creditors who are non insiders when they filed their petition. The petition was signed by Dorothy M. Eargle, trustee of the Company. EASTMAN KODAK: S&P Affirms 'B-' Rating on Senior Secured Notes -------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its ratings on Eastman Kodak Co.'s second-lien senior secured notes due 2018, following the company's upsizing of the deal to $500 million from $400 million. S&P rated the notes 'B-' (at the same level as the 'B-' corporate credit rating on the company) with a recovery rating of '3', indicating S&P's expectation of meaningful (50% to 70%) recovery for noteholders in the event of a payment default. The company plans to use net proceeds to repurchase its existing $300 million second-lien notes due 2017 and about $200 million of its 7.25% notes due 2013. The corporate credit rating on Kodak is 'B-' and the rating outlook is stable. The rating reflects S&P's concern regarding the company's earnings and cash flow prospects, based on: * The continued secular volume decline of Kodak's traditional photographic products and services business, * The unproven long-term profit potential of the company's consumer digital imaging businesses, * Intermediate-term potential for a decline in Kodak's entertainment imaging businesses, * Unpredictability of intellectual property earnings, * Significant discretionary cash flow deficits, * Vulnerability to economic pressures, and * The company's leveraged financial profile. Ratings List Eastman Kodak Co. Corporate Credit Rating B-/Stable/-- $500M second-lien nts due 2018 B- Recovery Rating 3 EXTENDED STAY: Affiliates File Plan of Reorganization ----------------------------------------------------- Extended Stay Inc. delivered to the U.S. Bankruptcy Court for the Southern District of New York a proposed Chapter 11 plan of reorganization for its 39 debtor affiliates on February 19, 2010. The Plan applies to the additional Extended Stay affiliates that filed for bankruptcy protection last February 18, 2010, namely, ESA P. Portfolio TXNC GP L.L.C., ESH/MSTX GP L.L.C., ESH/TXGP L.L.C., ESH TXGP L.L.C., and ESH/TN Member Inc. It, however, does not apply to the lead debtor, Extended Stay Inc. The proposed Plan would be financed by as much as $450 million from Centerbridge Partners LP and Paulson & Co. Extended Stay filed the Plan following a month-long negotiation with certain investment firms, which culminated in an agreement to provide the $450 million funding that includes a $225 million equity investment and a $225 million backstopped rights offering. The Agreement authorizes Centerbridge Partners and Paulson to acquire $225 million of common interests in a new company that will be formed as of the Plan effective date. It permits the Investors to contribute to the new company certain certificates they currently hold in exchange for 38.22% of the new company's common interests. The proposed deal also provides that a $225 million rights offering will be made available to holders of certificates, which represent an additional 22.50% of the new company's common interests. The certificates represent a beneficial interest in a trust that was formed to hold a $4.1 billion mortgage loan used to fund the acquisition of Extended Stay and its units from Blackstone Group LP. Substantive Consolidation Extended Stay President David Lichtenstein relates that the Plan is premised on the substantive consolidation of the Debtor Affiliates for all purposes related to the Plan. As of the Plan Effective Date, the 39 Plan Debtor Affiliates and their estates will be deemed merged; all their assets and liabilities will be treated for purposes of the Plan as though they were merged; and all guarantees of the Debtor Affiliates of payment, performance or collection of obligations will be eliminated and cancelled. All joint obligations of the Debtor Affiliates and all multiple claims against them on account of those joint obligations will be considered a single claim against them. Under the Plan, a new Delaware limited liability company, an alternate corporate or other organizational entity that may be selected by Centerbridge Partners and Paulson & Co. will be formed as of the Plan effective date. The new company will be managed by a seven-member Board of Managers. The Board will be composed of the chief executive officer of the new company, four individuals designated by Centerbridge Partners and Paulson & Co., and two independent managers. Classification of Claims & Equity Interests The Plan designates claims against the 39 Plan Debtors debtor affiliates into 15 classes. Classes 2 to 5 are impaired and creditors holding claims under those classes are entitled to vote on the Plan. Classes 6 and 15, which consist of equity interests, are also impaired. Equity holders are deemed to reject the Plan and are not entitled to vote on the Plan. Class 4 Mortgage Facility Deficiency Claim refers to the claim of Wells Fargo Bank N.A. with respect to the June 11, 2007 Mortgage Loan Agreement under which it serves as trustee for certificate holders, to the extent that the value of the collateral for the mortgage loan is less than $4.1 billion. Class 2 Mortgage Facility Claim refers to the secured claim of Wells Fargo as trustee under the 2007 Mortgage Facility. The Plan also provides treatment for unclassified claims, namely administrative expense claims, compensation and reimbursement claims, and priority tax claims. The various claims under the Plan and their designated treatment are summarized as: Class Type of Claim Claim Treatment ----- ------------- ----------------------------- N/A Administrative Allowed amounts of Expense Claims Administrative Expense Claims will be paid in full, in cash. N/A Compensation and Allowed amounts of Reimbursement Claims Compensation Claims will be paid in full, in cash. N/A Priority Tax Claims Allowed amounts of Priority Tax Claims will be paid in full, in cash. Class 1 Priority Claims Holders of Allowed Priority Claims will be paid in full, in cash. Class 2 Mortgage Facility If holders of Class 2 claims Claim accept the Plan, they will receive (i) 100% of the Rights, and (ii) on the initial distribution date, 100% of the New Class A1 Mortgage Notes, 100% of the New Class A2 Mortgage Notes, 100% of the New Class A3 Mortgage Notes, 100% of the New Class A4 Mortgage Notes, 470,482 NewCo Common Interests and 100% of the New Unsecured Notes. If Class 2 claim holders reject the Plan, the holders of Allowed Mortgage Facility Claims will receive, on the initial distribution date, the New Alternate Notes in an aggregate principal amount not to exceed $3.2 billion, which represents the value of the collateral securing the Allowed Mortgage Facility Claim, and which New Alternate Notes will bear interest at the rate of 5.34% per annum or such lower rate as will be fixed by the Court, and will have a final maturity date that is nine years after the Initial Distribution Date. ESH Properties, et al., with the consent of the Investors, reserve the right to seek confirmation of a plan under Section 1129(b) of the Bankruptcy Code, pursuant to which the holder of the Allowed Mortgage Facility Claim will receive New Alternate Notes in an aggregate principal amount less than $3.2 billion, with amount and $3.2 billion being provided in New Equity Securities, to the extent permitted by law. In either case, the Rights will be extinguished. Class 3 ESA UD Mortgage Holders of Allowed ESA UD Claim Mortgage Claim will receive on the Distribution Date the New ESA UD Mortgage Note in full settlement, satisfaction, release and discharge of the Claim. Class 4 Mortgage Facility No distribution will be made Deficiency Claim with respect to the Mortgage Facility Deficiency Claim; provided that in order to facilitate a consensual Plan, if Class 4 votes to accept the Plan, Class 4 will receive its Pro Rata Share of the New A Warrants. Class 5 General Unsecured No distribution will be made Claims with respect to the General Unsecured Claims; provided that in order to facilitate a consensual Plan, if Class 5 accepts the Plan, each holder of a General Unsecured Claim will receive, at its election, either (i) its Pro Rata Share of New A Warrants, or (ii) if its claim is $100,000 or less or it elects to reduce its claim to $100,000, its Pro Rata Share of the Cash Distribution; provided that if Class 4 accepts the Plan, all holders of General Unsecured Claims will be deemed to have elected the Cash option. Class 6 Existing Equity No distribution will be made from the Estates with respect to Existing Equity. On the Plan Effective Date, the certificates that previously evidenced ownership of Existing Equity will be cancelled and will be null and void. Class 7 ESA MD Properties Holders will retain the ESA MD Trust Certificate Properties Trust Certificate. Class 8 ESA MD Borrower Holders will retain their ESA Interests MD Borrower Interests. Class 9 ESA P Portfolio MD Holders will retain the ESA P Trust Certificate Portfolio Trust Certificate. Class 10 ESA P Portfolio MD Holders will retain their Borrower Interests ESA P Portfolio MD Borrower Interests. Class 11 ESA Canada Properties Holders will retain their ESA Interests Canada Properties Interests. Class 12 ESA Canada Properties Holders will retain their ESA Borrower Interests Canada Properties Borrower Interests. Class 13 ESH/TN Properties LLC Holders will retain their Membership Interests ESH/TN Properties Membership Interest. Class 14 ESH/ESA General Holders will retain their Partnership Interests ESH/ESA General Partnership Interests. Class 15 Other Existing Equity No distribution will be made Interests from the Estates with respect to the Other Existing Equity Interests. On the Plan Effective Date, the certificates that previously evidenced ownership of the Other Existing Equity Interests will be cancelled and will be null and void. A full-text copy of the Chapter 11 Plan for the 39 Debtor affiliates and certain attached exhibits is available for free at: http://bankrupt.com/misc/EStay_Ch11Planfor39Debtors.pdf In connection with the filing of the proposed Plan, Extended Stay asked the Court for more time, through March 17, 2010, to file a disclosure statement. Extended Stay has decided to file the Plan without the disclosure statement to expedite the conclusion of the cases and facilitate the process by which other investors may submit competitive proposals, according to Jacqueline Marcus, Esq., at Weil Gotshal & Manges LLP, in New York. She adds that the requested extension would give Extended Stay, Centerbridge Partners and Paulson & Co. time to discuss, review and finalize the disclosure statement. The Court will hold a hearing on March 16, 2010, to consider approval of the proposed extension. Deadline for filing objections is March 11, 2010. About Extended Stay Extended Stay is the largest owner and operator of mid-price extended stay hotels in the United States, holding one of the most geographically diverse portfolios in the lodging sector with properties located across 44 states (including 11 hotels located in New York) and two provinces in Canada. As a result of acquisitions and mergers, Extended Stay's portfolio has expanded to encompass over 680 properties, consisting of hotels directly owned or leased by Extended Stay or one of its affiliates. Extended Stay currently operates five hotel brands: (i) Crossland Economy Studios, (ii) Extended Stay America, (iii) Extended Stay Deluxe, (iv) Homestead Studio Suites, and (v) StudioPLUS Deluxe Studios. For the year ending December 31, 2008, Extended Stay's audited financial statements show consolidated assets (including nondebtor affiliates) totaling approximately $7.1 billion and consolidated liabilities totaling approximately $7.6 billion. Consolidated revenues for the 12 months ending December 31, 2008 were approximately $1 billion. Extended Stay Inc. and its affiliates filed for Chapter 11 on June 15, 2009 (Bankr. S.D.N.Y. Case No. 09-13764). Judge James M. Peck handles the case. Marcia L. Goldstein, Esq., at Weil Gotshal & Manges LLP, in New York, represents the Debtors. Lazard Freres & Co. LLC is the Debtors' financial advisors. Kurtzman Carson Consultants LLC is the claims agent. Bankruptcy Creditors' Service, Inc., publishes Extended Stay Bankruptcy News. The newsletter provides gavel-to-gavel coverage of the Chapter 11 proceedings undertaken by Extended Stay Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). EXTENDED STAY: ESA P Portfolio, 4 Others Also in Chapter 11 ----------------------------------------------------------- Five affiliates of Extended Stay Inc. filed voluntary petitions in the U.S. Bankruptcy Court for the Southern District of New York on February 18, 2010, seeking relief under Chapter 11 of the Bankruptcy Code. The five debtor affiliates and their assigned case numbers are: Entity Case No. ------ -------- ESA P Portfolio TXNC GP LLC 10-10805 ESA TXGP LLC 10-10806 ESH/MSTX GP LLC 10-10807 ESH/TXGP LLC 10-10808 ESH/TN Member Inc. 10-10809 ESA P Portfolio and ESA TXGP reported estimated assets and liabilities of more than $1 billion in their bankruptcy petition documents. Both do not have unsecured creditors, according to court filings. ESA P Mezz LLC and ESA Mezz LLC hold 100% interest in ESA P Portfolio and ESA TXGP respectively. The Subsequent Debtors have no independent assets and are dormant entities without any business activity other than ownership of their respective 1% general partnership or 1% managing member interests in certain of the Original Debtors. The Subsequent Debtors have filed voluntary Chapter 11 petitions in order to effectuate the transfer of the Debtors' business in connection with the proposed Chapter 11 Plan for certain of the Debtors dated February 19, 2010. The Chapter 11 cases of Subsequent Debtors are handled by the New York-based law firm of Weil Gotshal & Manges LLP, which also oversees the bankruptcy cases of the Original Extended Stay Debtors. In connection with the filing of the Chapter 11 cases of the Subsequent Debtors, asked the Court to jointly administer those cases under the Chapter 11 cases of Original Extended Stay Debtors under Lead Case No. 09-13764. Jacqueline Marcus, Esq., at Weil Gotshal, in New York, said the proposed joint administration would not adversely affect the creditors' rights since Extended Stay is merely seeking administrative consolidation and not substantive consolidation of the estates. Extended Stay also asked the Court to issue a ruling directing that certain first-day motion orders it previously issued be made applicable to the Chapter 11 cases of ESA P Portfolio GP, et al. The Court will hold a hearing on March 16, 2010, to consider approval of the Debtor's requests. Deadline for filing objections is March 11, 2010. About Extended Stay Extended Stay is the largest owner and operator of mid-price extended stay hotels in the United States, holding one of the most geographically diverse portfolios in the lodging sector with properties located across 44 states (including 11 hotels located in New York) and two provinces in Canada. As a result of acquisitions and mergers, Extended Stay's portfolio has expanded to encompass over 680 properties, consisting of hotels directly owned or leased by Extended Stay or one of its affiliates. Extended Stay currently operates five hotel brands: (i) Crossland Economy Studios, (ii) Extended Stay America, (iii) Extended Stay Deluxe, (iv) Homestead Studio Suites, and (v) StudioPLUS Deluxe Studios. For the year ending December 31, 2008, Extended Stay's audited financial statements show consolidated assets (including nondebtor affiliates) totaling approximately $7.1 billion and consolidated liabilities totaling approximately $7.6 billion. Consolidated revenues for the 12 months ending December 31, 2008 were approximately $1 billion. Extended Stay Inc. and its affiliates filed for Chapter 11 on June 15, 2009 (Bankr. S.D.N.Y. Case No. 09-13764). Judge James M. Peck handles the case. Marcia L. Goldstein, Esq., at Weil Gotshal & Manges LLP, in New York, represents the Debtors. Lazard Freres & Co. LLC is the Debtors' financial advisors. Kurtzman Carson Consultants LLC is the claims agent. Bankruptcy Creditors' Service, Inc., publishes Extended Stay Bankruptcy News. The newsletter provides gavel-to-gavel coverage of the Chapter 11 proceedings undertaken by Extended Stay Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). EXTENDED STAY: Proposes Deal With Centerbridge, Et Al. ------------------------------------------------------ Extended Stay Inc. seeks authority from the U.S. Bankruptcy Court for the Southern District of New York to enter into an agreement with investment firms, Centerbridge Partners L.P. and Paulson & Co. Inc., to obtain financing for the proposed Chapter 11 plan of its affiliated debtors. Extended Stay hammered out the deal with the Investors to obtain as much as $450 million in funding for the proposed plan of reorganization of more than 30 Extended Stay Debtor-Affiliates. The offer consists of a $225 million equity investment and a $225 million backstopped rights offering. Under the deal, Centerbridge Partners and Paulson & Co. agreed to purchase $225 million of common interests in a new company that will be formed as of the effective date of the Plan, and contribute to the new company certificates the Investors currently hold in exchange for 38.22% of the new company's common interests. The certificates held by the investors represent a beneficial interest in a trust that was formed to hold a $4.1 billion mortgage loan, which was used to fund the acquisition of Extended Stay and its units from Blackstone Group LP. The proposed deal also provides that a $225 million rights offering will be made available to the holders of the certificates, which represent an additional 22.50% of the new company's common interests. In return for the financing, Extended Stay agreed to make a non- refundable payment to Centerbridge Partners and Paulson & Co. in an amount equal to 5% of the proceeds from the investment and rights offering. The Investors, however, will not receive any payment other than reimbursement of their expenses if the deal is completed. Extended Stay's attorney, Jacqueline Marcus, Esq., at Weil Gotshal & Manges LLP, in New York, says the proposed deal does not preclude Extended Stay from continuing its talks with other potential sponsors of the proposed Chapter 11 plan. Ms. Marcus says Extended Stay is still evaluating the merits of the offer made by a consortium of creditors led by SOF-VII U.S. Hotel Co-Invest Holdings L.P., an affiliate of Starwood Capital Group Global L.P. "We have a fiduciary duty to try to maximize value. We are continuing to talk to other parties," Ms. Marcus told Bloomberg News in an interview. Starwood Capital Group sought to take control of Extended Stay's reorganization by forming a rival plan to "strategically align" the company. Starwood said last month that it had support of Extended Stay creditors, which include Citigroup Inc., Five Mile Capital Partners LLC and D.E. Shaw Real Estate Portfolios, Bloomberg News reported. Ms. Marcus, however, notes that to date, Centerbridge and Paulson's proposal is the only one offer on the table that involves a commitment to proceed. "Nobody else who has come to the table is in that position yet," Bloomberg News quoted Ms. Marcus as saying. Centerbridge Partners and Paulson & Co. have committed to proceed with their funding proposal provided that Extended Stay files a disclosure statement on or before March 2, 2010, and the Court approves the proposal on or before March 26, 2010. The Extended Stay/Centerbridge/Paulson deal has been formalized in a 58-page agreement, a copy of which is available for free at: http://bankrupt.com/misc/ESI_DealCenterbridge&Paulson.pdf The Court will hold a hearing on March 16, 2010, to consider approval of the Centerbridge/Paulson Agreement. Deadline for parties-in-interest to file objections to the deal is March 11, 2010. About Extended Stay Extended Stay is the largest owner and operator of mid-price extended stay hotels in the United States, holding one of the most geographically diverse portfolios in the lodging sector with properties located across 44 states (including 11 hotels located in New York) and two provinces in Canada. As a result of acquisitions and mergers, Extended Stay's portfolio has expanded to encompass over 680 properties, consisting of hotels directly owned or leased by Extended Stay or one of its affiliates. Extended Stay currently operates five hotel brands: (i) Crossland Economy Studios, (ii) Extended Stay America, (iii) Extended Stay Deluxe, (iv) Homestead Studio Suites, and (v) StudioPLUS Deluxe Studios. For the year ending December 31, 2008, Extended Stay's audited financial statements show consolidated assets (including nondebtor affiliates) totaling approximately $7.1 billion and consolidated liabilities totaling approximately $7.6 billion. Consolidated revenues for the 12 months ending December 31, 2008 were approximately $1 billion. Extended Stay Inc. and its affiliates filed for Chapter 11 on June 15, 2009 (Bankr. S.D.N.Y. Case No. 09-13764). Judge James M. Peck handles the case. Marcia L. Goldstein, Esq., at Weil Gotshal & Manges LLP, in New York, represents the Debtors. Lazard Freres & Co. LLC is the Debtors' financial advisors. Kurtzman Carson Consultants LLC is the claims agent. Bankruptcy Creditors' Service, Inc., publishes Extended Stay Bankruptcy News. The newsletter provides gavel-to-gavel coverage of the Chapter 11 proceedings undertaken by Extended Stay Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). FAIRPOINT COMMS: Bank Debt Trades at 24% Off in Secondary Market ---------------------------------------------------------------- Participations in a syndicated loan under which FairPoint Communications, Inc., is a borrower traded in the secondary market at 76.25 cents-on-the-dollar during the week ended Friday, Feb. 26, 2010, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents a drop of 0.71 percentage points from the previous week, The Journal relates. The debt matures on March 31, 2015. The Company pays 275 basis points above LIBOR to borrow under the loan facility. Moody's has withdrawn its rating, while Standard & Poor's has assigned a default rating, on the bank debt. The debt is one of the biggest gainers and losers among 188 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. FairPoint Communications, Inc. (NYSE: FRP) -- http://www.fairpoint.com/-- is an industry leading provider of communications services to communities across the country. FairPoint owns and operates local exchange companies in 18 states offering advanced communications with a personal touch, including local and long distance voice, data, Internet, television and broadband services. FairPoint is traded on the New York Stock Exchange under the symbols FRP and FRP.BC. Fairpoint and its affiliates filed for Chapter 11 on Oct. 26, 2009 (Bankr. D. Del. Case No. 09-16335). Rothschild Inc. is acting as financial advisor for the Company; AlixPartners, LLP as the restructuring advisor; and Paul, Hastings, Janofsky & Walker LLP is the Company's counsel. BMC Group is claims and notice agent. As of June 30, 2009, Fairpoint reported $3.24 billion in total assets, $321.41 million in total current liabilities, $2.91 billion in total long-term liabilities, and $1.23 million in total stockholders' equity. Bankruptcy Creditors' Service, Inc., publishes Fairpoint Communications Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Fairpoint Communications Inc. and its debtor- affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) FINLAY ENTERPRISES: Norman Matthews Resigns from Board ------------------------------------------------------ On February 22, 2010, Norman S. Matthews notified Finlay Enterprises, Inc., that he was resigning from the Board of Directors of Finlay Enterprises, Inc., and the Board of Directors of the Company's wholly-owned subsidiary, Finlay Fine Jewelry Corporation, effective February 22, 2010. Mr. Matthew's resignation is not the result of a disagreement with the Company or Finlay Jewelry on any matter relating to the Company's or Finlay Jewelry's operations, policies or practices. About Finlay Enterprises Finlay Enterprises, Inc. (OTC Bulletin Board: FNLY) through its wholly owned subsidiary, Finlay Fine Jewelry Corporation, is a retailer of fine jewelry operating luxury stand-alone specialty jewelry stores and licensed fine jewelry departments in department stores throughout the United States and achieved sales of $754.3 million in fiscal 2008. The number of locations at the end of the second quarter ended August 1, 2009, totaled 182, including 67 Bailey Banks & Biddle, 34 Carlyle and four Congress specialty jewelry stores and 77 licensed departments with The Bon Ton. The Company and seven affiliates filed for Chapter 11 on August 5, 2009 (Bankr. S. D. N.Y. Case No. 09-14873). Weil, Gotshal & Manges LLP, serves as bankruptcy counsel. Alvarez & Marsal North America, LLC, is engaged as restructuring advisor in the Chapter 11 case, and the firm's David Coles is appointed as chief restructuring officer. Epiq Bankruptcy Solutions, LLC, serves as claims and notice agent. Judge James Peck presides over the case. In its bankruptcy petition, Finlay Enterprises disclosed assets of $331,824,000 against debts of $385,476,000 as of July 4, 2009. As of the petition date, Finlay owes $38 million outstanding under a first lien credit agreement, $24.7 million under second lien notes, $176.6 million outstanding under third lien notes (in addition to $17.5 million to secured vendors), and $40.6 million under remaining unsecured obligations under the senior notes. On September 25, 2009, the Bankruptcy Court appointed Gordon Brothers Retail Partners, LLC, as agent for Finlay Enterprises and its affiliates and subsidiaries to conduct 'store closing" or similar sales of merchandise located at all of the Company's retail store locations and the Company's two distribution centers. The transaction is expected to be completed by February 28, 2010. Gordon Brothers bid 85.75 cents on the dollar for inventory valued at an estimated $116 million for closings sales of 49 Finlay stores. Gordon had a prepetition contract to conduct store closings sales for 55 other stores. FORD MOTOR: Invests $590-Mil. for Essex Plant in Windsor, Canada ---------------------------------------------------------------- After being idled in 2007, the Ford Essex Engine Plant in Windsor, Ontario, is ramping up again to build one of the most exciting engines in Ford's lineup, thanks to a $590 million investment. With its new flexible manufacturing system, Essex Engine will soon be at full production of the all-new 5.0-litre V-8 engine for the 2011 Ford Mustang GT which is expected to deliver segment-leading fuel economy and 412 horsepower. "That's what today's customers demand -- top performance, a fun- to-drive experience and great fuel economy, and this new V-8 for the 2011 Mustang delivers," said Jim Tetreault, vice president, North American Manufacturing, Ford Motor Company, in a February 26 statement. "Ford is introducing an unprecedented number of new or upgraded powertrains this year as part of our 2011 vehicle launches." Including the new V-8 engine built at Essex Engine, Ford has already started producing six of the nine new engines and transmissions planned for the 2011 model year. These powertrains are being supported by a significant investment in powertrain engineering and facility upgrades across North America. The investment in Essex Engine will pay off for years to come considering that each auto manufacturing job creates seven additional jobs in the broader Canadian economy. For example, Ontario suppliers are manufacturing a variety of parts for the new V-8 engine - everything from automatic flywheels and oil filter adapters to thermostat housings. The Essex Engine investment is also supporting the expansion of Ford's North American Centre for Advanced Powertrain Research and Innovation located at the plant. The research centre will become a hub for powertrain research that will also involve Canadian universities and Canadian automotive parts suppliers. The centre will include 16 advanced dynamometer research and test cells capable of evaluating the emissions and performance of alternative fuel powertrains, including those powered by gasoline, diesel, biodiesel, ethanol blends, hybrid powertrains and hydrogen. About Ford Motor Headquartered in Dearborn, Michigan, Ford Motor Co. (NYSE: F) -- http://www.ford.com/-- manufactures or distributes automobiles across six continents. With about 200,000 employees and about 90 plants worldwide, the company's automotive brands include Ford, Lincoln, Mercury and Volvo. The company provides financial services through Ford Motor Credit Company. At Sept. 30, 2009, the Company had US$203.106 billion in total assets against US$210.376 billion in total liabilities. As reported by the Troubled Company Reporter on Nov. 4, 2009, Moody's Investors Service upgraded the senior unsecured rating of Ford Motor Credit Company LLC to B3 from Caa1. This follows Moody's upgrade of Ford Motor Company's corporate family rating to B3 from Caa1, with a stable outlook. Ford Credit's long-term ratings remain on review for further possible upgrade. On Nov. 3, 2009, S&P raised the corporate credit ratings on Ford Motor Co. and Ford Motor Credit Co. LLC to 'B-' from 'CCC+'. Ford Motor Co. carries a long-term issuer default rating of 'CCC', with a positive outlook, from Fitch Ratings. FORD MOTOR: Invests $155-Mil., Adds 60 Jobs for Cleveland Plant --------------------------------------------------------------- Ford Motor Company is investing $155 million and adding 60 jobs at its Cleveland operations to build a new fuel-efficient V-6 engine for the 2011 Mustang, which has expected class-leading highway fuel efficiency of 30 miles per gallon on the highway and 305 horsepower. The investment and jobs at Ford's Cleveland Engine Plant No. 1 brings the company's investment in powertrain engineering and facility upgrades in North America to $1.8 billion to support its 2011 vehicle launches - with more to come. The total number of jobs being added as part of these investments is 1,260. The new Mustang engine is one of nine new or upgraded engines or transmissions for 2011 model Ford, Lincoln and Mercury vehicles. "Ford is absolutely committed to delivering class-leading fuel efficiency with every new vehicle we introduce, and this investment in Cleveland provides further proof," said Bill Russo, director of manufacturing for Ford's powertrain operations. On sale this spring, the 2011 Ford Mustang delivers 305 high- performance horses for V-6 coupe buyers. The all-aluminum dual- overhead cam (DOHC), 3.7-liter Duratec 24-valve V-6 engine delivers a projected 30 mpg on the highway with a six-speed automatic transmission and fun for drivers on nearly every road. "Mustang is completely transformed with this new engine," said Derrick Kuzak, group vice president, Global Product Development. "Everything people love about the car is still there and now under the hood is a V-6 engine that uses premium technology to deliver the power, the feel, the fuel efficiency, even the sound of the best sports coupes in the world." Also available for the 2011-model year are the Mustang GT - with an all-new 5.0-liter V-8 delivering 412 horsepower and projected unsurpassed highway mileage of 25 mpg - and a no-compromises Shelby GT500 powered by a 5.4-liter supercharged V-8 and 550 horsepower. The new 3.7-liter V-6 is built at Ford's Cleveland Engine Plant 1. The 5.0-liter V-8 engine is built at Ford's Essex Engine Plant in Windsor, Ontario. The 5.4-liter supercharged V-8 is built at Ford's Romeo, Mich., Engine Plant. Cleveland Engine Plant 1 Retooled Cleveland Engine Plant No. 1's V-6 engine is expected to represent two-thirds of Mustang's volume this calendar year. Ford's $155 million investment there includes $121 million in manufacturing investment at the plant and $34 million for launch and engineering. Sixty new jobs have been added to the plant to support the new engine. Specifically, the $121 million for the manufacturing facility supports continued investment in developing and re-tooling the plant's flexible manufacturing systems in the assembly and component (cylinder block, head and crankshaft) areas. "The Cleveland Engine Plant is not only building fuel-efficient engines for some of our most popular Ford products, it's becoming a hub for the future of Ford powertrains," Russo said. "This facility has the flexibility and the expertise to help us meet customer demands for fun, fuel-efficient vehicles, and it represents the future of advanced manufacturing in North America." Ford's investment at Cleveland Engine Plant is supported by Ford's green partnership with the U.S. Department of Energy. This Ohio plant is one of 11 Ford facilities in the U.S. participating in the Advanced Technology Vehicles Manufacturing Incentives Program initiated by Congress and implemented by the Obama administration. The program is helping to develop advanced technology vehicles and strengthen American manufacturing across the country. This project is also supported by Ford's state and local government partners primarily through training funds. The investment represents the latest in Ford's ongoing commitment to the Cleveland Engine Plant No. 1. Opened in 1951 as Ford's first engine plant in Ohio, the facility has produced more than 35 million engines. In 2004, Ford invested $350 million into the plant for redesign and installation of an all-new assembly line as well as block, crankshaft and cylinder head machining lines. The plant also led the way in 2009 with the introduction of Ford's first EcoBoost engines, which use gasoline turbocharged direct-injection technology for up to 20 percent better fuel economy, 15 percent fewer CO2 emissions and superior driving performance versus larger displacement engines. Nine New or Upgraded Powertrains This Year Ford is introducing nine new or upgraded powertrains in North America for its 2011 model vehicles, representing $1.8 billion worth of investment in engineering and facilities. Among the nine powertrains are: * 6.2-liter V-8 gasoline engine for the F-Series Super Duty * 6.7-liter Power Stroke Diesel for the F-Series Super Duty * 6R140 heavy-duty TorqShift(R) automatic transmission for the F-Series Super Duty * 3.7-liter Ti-VCT V-6 engine for the Mustang * 5.0-liter Ti-VCT V-8 engine for the Mustang * Six-speed automatic transmission for the Mustang The 2011 Mustang is the most technically advanced model yet of America's favorite sports car. Both V-6 and V-8 models feature Twin Independent Variable Valve Timing (Ti-VCT), double overhead cams, four-valves per-cylinder and free-flowing exhaust systems. Both models are available with six-speed manual or an upgraded 6- speed automatic transmission. With so much additional horsepower standard, the 2011 Mustang received enhancements to its chassis and suspension to maintain the outstanding driving behavior Mustang owners expect. The addition of new technologies and features, including segment- exclusive electric power assisted steering will mark a new era of driving dynamics for Mustang. "We're focusing on every single detail of our engine and transmission lineup to speed class-leading fuel efficiency to our customers as quickly as possible, affordably and in high volumes," said Barb Samardzich, vice president, Powertrain Development. The 2011 Mustang is a strong example of Ford's industry leading fuel economy gains. According to the Environmental Protection Agency, Ford's combined car and truck fuel economy has improved nearly 20 percent since 2004 - almost double the next closest competitor. Additionally, Ford has lowered its tailpipe CO2 emissions more than any other automaker. Ford's fleet-wide average of 434 grams per mile is 37 grams lower than the 2007 total and 25 grams lower than 2008. About Ford Motor Headquartered in Dearborn, Michigan, Ford Motor Co. (NYSE: F) -- http://www.ford.com/-- manufactures or distributes automobiles across six continents. With about 200,000 employees and about 90 plants worldwide, the company's automotive brands include Ford, Lincoln, Mercury and Volvo. The company provides financial services through Ford Motor Credit Company. At Sept. 30, 2009, the Company had US$203.106 billion in total assets against US$210.376 billion in total liabilities. As reported by the Troubled Company Reporter on Nov. 4, 2009, Moody's Investors Service upgraded the senior unsecured rating of Ford Motor Credit Company LLC to B3 from Caa1. This follows Moody's upgrade of Ford Motor Company's corporate family rating to B3 from Caa1, with a stable outlook. Ford Credit's long-term ratings remain on review for further possible upgrade. On Nov. 3, 2009, S&P raised the corporate credit ratings on Ford Motor Co. and Ford Motor Credit Co. LLC to 'B-' from 'CCC+'. Ford Motor Co. carries a long-term issuer default rating of 'CCC', with a positive outlook, from Fitch Ratings. FOUNTAIN VILLAGE: Gets Interim Nod to Use Telesis' Cash Collateral ------------------------------------------------------------------ Fountain Village Development sought and obtained interim approval to use Telesis Community Credit Union's cash collateral. On August 21, 2003, the Debtor entered into a loan with Telesis in the original principal sum of $7,575,000 secured by property commonly referred to as the New Market Theatre. The current balance due and owing under the New Market Theatre Loan is $7 million, plus accrued interest. The New Market theatre consists of two commercial buildings that have been joined together. Ava L. Schoen, Esq., at Tonkon Torp LLP, the attorney for the Debtor, explains that the Debtor needs to use the cash collateral to fund its Chapter 11 case, pay suppliers and other parties. The Debtor will use the collateral pursuant to a budget, a copy of which is available for free at: http://bankrupt.com/misc/FOUNTAINVILLAGE_budget.pdf As adequate protection, the Debtor will grant the lender a replacement security interest in and lien upon the Debtor's property and revenue from the Debtor's property in which the lender held a valid and perfected prepetition lien and security interest. The lender's replacement security interest and lien upon the assets from and after the Petition Date will be of the same category, kind, character, and description as were subject to perfected and valid security interest in existence on the Petition Date. The adequate protection lien granted to the lender won't enhance or improve the position of the lender, as the Debtor believes that the value of the real property securing the indebtedness owing to the lender exceeds the amount of the indebtedness of the lender. The Court has set a final hearing for March 15, 2010, at 1:30 p.m. on the Debtor's request to use cash collateral. Telesis is represented by Perkins Coie LLP. Portland, Oregon-based Fountain Village Development, a general partnership, aka Fountain Village Development Co, owns, develops, operates, manages, and/or leases 20 buildings in Portland, Hillsboro, and Gearhart, Oregon. The Company has filed for Chapter 11 bankruptcy protection on November 20, 2009 (Bankr. D. Ore. Case No. 09-39718). Albert N. Kennedy, Esq., and Ava L. Schoen, Esq., who have offices in Portland, Oregon, assist the Company in its restructuring effort. The Company listed $50,000,001 to $100,000,000 in assets and $50,000,001 to $100,000,000 in liabilities. FREDDIE MAC: Posts $21.6 Billion Net Loss in 2009 ------------------------------------------------- Freddie Mac, formally known as the Federal Home Loan Mortgage Corporation, reported a net loss of $21.6 billion for the full- year 2009, compared to a net loss of $50.1 billion for the full- year 2008. After dividend payments of $4.1 billion during the year on its senior preferred stock to the U.S. Department of Treasury, Freddie Mac reported a net loss attributable to common stockholders of $25.7 billion, or $7.89 per diluted common share, for the full- year 2009, compared to a net loss attributable to common stockholders of $50.8 billion, or $34.60 per diluted common share, for the full-year 2008. For the quarter ended December 31, 2009, the Company reported a net loss of $6.5 billion, compared to a net loss of $5.4 billion for the quarter ended September 30, 2009. After the dividend payment of $1.3 billion on its senior preferred stock to Treasury, Freddie Mac reported a net loss attributable to common stockholders of $7.8 billion, or $2.39 per diluted common share, in the fourth quarter of 2009, compared to a net loss attributable to common stockholders of $6.7 billion, or $2.06 per diluted common share, in the third quarter of 2009. Fourth quarter and full-year 2009 results were negatively impacted by $7.1 billion and $29.8 billion in credit-related expenses, respectively, reflecting the challenging economic conditions during 2009. In addition, fourth quarter and full-year 2009 results were affected by $3.4 billion and $4.2 billion in low- income housing tax credit partnerships expense, respectively, primarily due to the write-down of the carrying value of the company's LIHTC partnership investments to zero as of December 31, 2009. These results were partially offset by net interest income of $4.5 billion in the fourth quarter of 2009 and $17.1 billion in the full-year 2009, mainly due to lower funding costs. Freddie Mac had positive net worth of $4.4 billion at December 31, 2009, compared to positive net worth of $9.4 billion at September 30, 2009. As a result of the positive net worth, no additional funding was required from Treasury under the terms of the Purchase Agreement for the fourth quarter. The decline in positive net worth for the fourth quarter of 2009 resulted from the fourth quarter 2009 net loss of $6.5 billion and the dividend payment of $1.3 billion to Treasury on the senior preferred stock, partially offset by a $2.7 billion decrease in unrealized losses recorded in accumulated other comprehensive income (loss) (AOCI) primarily driven by improved values on the company's available- for-sale (AFS) securities. Freddie Mac had a net worth deficit of $30.6 billion at December 31, 2008. "In a trying and turbulent year, Freddie Mac played a critical role in supporting the nation's housing recovery," said Freddie Mac Chief Executive Officer Charles E. Haldeman, Jr. "We provided a constant source of liquidity - purchasing one out of every four home loans originated last year - and our presence in the market helped keep mortgage rates at historic lows. We also helped approximately 1.8 million borrowers lower their mortgage payments, and more than a quarter million families avoid foreclosure. "We start 2010 with some early signs of stabilization in the housing market, with house prices and home sales likely nearing the bottom sometime in 2010. We expect that low mortgage rates, relatively high affordability and the homebuyer tax credit will help continue to fuel the recovery. Still, the housing recovery remains fragile, with significant downside risk posed by high unemployment and a potential large wave of foreclosures. That's why our commitment to help struggling homeowners is steadfast - and we will continue working to find ways to keep families in their homes through both our own programs and the Obama Administration's Making Home Affordable Program." Net interest income for the fourth quarter of 2009 was $4.5 billion, relatively unchanged from the third quarter of 2009. Net interest yield on a fully taxable-equivalent basis for the fourth quarter of 2009 was 215 basis points, compared to 205 basis points for the third quarter of 2009. The increase in net interest yield in the fourth quarter was primarily driven by lower funding costs due to lower interest rates on the company's short- and long-term debt. Net interest income for the full-year 2009 was $17.1 billion, compared to $6.8 billion for the full-year 2008. Net interest yield on a fully taxable-equivalent basis for the full-year 2009 was 194 basis points, compared to 87 basis points for the full- year 2008. The increase in net interest income and net interest yield during 2009 was primarily driven by a decrease in funding costs as a result of the replacement of higher cost short- and long-term debt with lower cost debt, as well as an increase in the average balance of the Company's investments in mortgage loans and mortgage-related securities. These increases were partially offset by the impact of declining short-term interest rates on the company's floating-rate investments. Net interest income and net interest yield during 2009 exclude the cost of funds the Company received from Treasury under the Purchase Agreement, which is reported as dividends paid on senior preferred stock. Management and guarantee income for the fourth quarter of 2009 was $743 million, compared to $800 million for the third quarter of 2009. Management and guarantee income for the full-year 2009 was $3.0 billion, compared to $3.4 billion for the full-year 2008. The decreases in management and guarantee income for both the fourth quarter and full-year 2009 reflect reduced amortization income related to certain pre-2003 deferred fees due to an increase in forecasted interest rates, which resulted in a decrease in projected prepayments. Low-income housing tax credit partnerships for the fourth quarter of 2009 was an expense of $3.4 billion, compared to an expense of $479 million for the third quarter of 2009. Low-income housing tax credit partnerships for the full-year 2009 was an expense of $4.2 billion, compared to an expense of $453 million for the full- year 2008. The increase in LIHTC partnerships expense in both the fourth quarter and full-year 2009 was mostly driven by the write-down of the carrying value of the company's LIHTC partnership investments to zero during the fourth quarter. On February 18, 2010, after consultation with Treasury and consistent with the terms of the Purchase Agreement, the Federal Housing Finance Agency (FHFA) informed Freddie Mac the Company may not sell or transfer the assets and that FHFA sees no other disposition options. As a result, the company wrote down the carrying value of its LIHTC investments to zero as of December 31, 2009. This write-down increases the likelihood that the company will require additional draws from Treasury under the Purchase Agreement. Other non-interest income (loss) for the fourth quarter of 2009 was income of $883 million, compared to a loss of $1.4 billion for the third quarter of 2009. Other non-interest income (loss) for the full-year 2009 was a loss of $1.6 billion, compared to a loss of $32.1 billion for the full-year 2008. Included in other non-interest income for the fourth quarter of 2009 were net mark-to-market gains of $2.1 billion, compared to net mark-to-market gains of $42 million in the third quarter of 2009. Fourth quarter net mark-to-market gains reflect the effect of higher long-term interest rates and tighter spreads on the company's derivative portfolio, guarantee asset and trading securities. Also included in other non-interest income for the fourth quarter of 2009 was $667 million of net impairment of AFS securities recognized in earnings, compared to $1.2 billion of net impairment of AFS securities recognized in earnings during the third quarter of 2009, as the pace of deterioration in credit quality of the underlying collateral slowed during the fourth quarter. Other non-interest loss for the full-year 2009 included $11.2 billion of net impairment of available-for-sale (AFS) securities recognized in earnings. The Company adopted an amendment to the accounting standards for investments in debt and equity securities on April 1, 2009. Consequently, full-year 2009 impairment results are not directly comparable to the full-year 2008 impairment results. Net impairment of AFS securities recorded in earnings was $17.7 billion for the full-year 2008. Other non-interest loss for the full-year 2009 also included net mark-to-market gains of $11.0 billion, compared to net mark-to- market losses of $17.7 billion for the full-year 2008. Net mark- to-market gains in 2009 were mainly driven by higher long-term interest rates and tighter spreads on the company's derivative portfolio, guarantee asset and trading securities during the year. Credit-related expenses, consisting of provision for credit losses and real estate owned (REO) operations expense, were $7.1 billion for the fourth quarter of 2009, compared to $7.9 billion for the third quarter of 2009. Credit-related expenses for the full-year 2009 were $29.8 billion, compared to $17.5 billion for the full- year 2008. During the fourth quarter of 2009, the company identified two errors in loss severity rate inputs used by its models to estimate the Company's single-family loan loss reserves. These errors affected amounts previously reported. Freddie Mac has concluded that while these errors are not material to the Company's previously issued consolidated financial statements for the first three quarters of 2009 or to its consolidated financial statements for the full-year 2009, the cumulative impact of correcting these errors in the fourth quarter would have been material to the fourth quarter of 2009. Freddie Mac revised its previously reported results for the first three quarters of 2009 to correct these errors in the appropriate quarterly period. As a result, Freddie Mac increased its previously reported third quarter 2009 provision for credit losses by $396 million to reflect these adjustments. Provision for credit losses for the fourth quarter of 2009 was $7.0 billion, compared to $8.0 billion for the third quarter of 2009. Provision for credit losses remained at an elevated level due to continued credit deterioration and challenging economic conditions. The third quarter results include an adjustment to the provision for credit losses based on observed changes in economic drivers impacting borrower behavior and delinquency trends for certain loans, as well as the adjustments discussed above. Provision for credit losses for the full-year 2009 was $29.5 billion, compared to $16.4 billion for the full-year 2008, reflecting continued credit losses amid ongoing weakness in the U.S. economy and housing market. The increase in provision for credit losses during 2009 primarily reflected significant increases in delinquency rates and foreclosures and higher severity of losses on a per-property basis. REO operations income (expense) for the fourth quarter of 2009 was an expense of $88 million, compared to income of $96 million for the third quarter of 2009, reflecting lower recoveries of property write-downs in the fourth quarter compared to the third quarter. REO operations expense for the full-year 2009 was $307 million, compared to $1.1 billion for the full-year 2008. The decrease was primarily due to a stabilization in home prices during 2009, compared to a sharp decline in home prices during 2008. Other non-interest expense for the fourth quarter of 2009 was $1.2 billion, compared to $628 million for the third quarter of 2009. Other non-interest expense for the full-year 2009 was $5.2 billion, compared to $3.2 billion for the full-year 2008. The increase in other non-interest expense for the fourth quarter of 2009, compared to the third quarter of 2009, was driven by a $481 million increase in losses on loans purchased from the Company's PC pools due to an increase in purchase volume of delinquent and modified loans as more modifications were settled in the fourth quarter of 2009. The increase in other non-interest expense for the full-year 2009 compared to the full-year 2008 was primarily driven by a $3.1 billion increase in losses on loans purchased due to both an increase in volume and a decline in the fair value of loans purchased from PC pools. Other non-interest expense for the full- year 2008 included a securities administrator loss on investment activity of $1.1 billion related to investments made by Freddie Mac in Lehman Brothers Holdings Inc. in the Company's role as securities administrator for certain trust-related assets. Income tax benefit (expense) for the fourth quarter of 2009 was an expense of $440 million, compared to a benefit of $149 million for the third quarter of 2009, primarily due to a decrease in the estimated 2009 taxable loss. Income tax benefit (expense) for the full-year 2009 was a benefit of $830 million, compared to an expense of $5.6 billion for the full-year 2008. Income tax expense for the full-year 2008 was primarily driven by the Company's establishment of a partial valuation allowance against the net deferred tax asset in the third quarter of 2008. The Company is required to assess the realizability of the deferred tax asset on a quarterly basis. At December 31, 2009, the company had a remaining net deferred tax asset of $11.1 billion, representing the tax effect of net unrealized losses on its AFS securities, which management believes is more likely than not of being realized because of the company's conclusion that it has the intent and ability to hold its AFS securities until temporary unrealized losses are recovered. AOCI, net of taxes as of December 31, 2009, was a loss of $23.6 billion, compared to a loss of $26.4 billion as of September 30, 2009, and a loss of $32.4 billion as of December 31, 2008. The decrease in unrealized losses recorded in AOCI for both the fourth quarter and full-year 2009 was primarily attributable to improved values on the company's AFS securities. Balance Sheet At December 31, 2009, the Company's consolidated balance sheets showed total assets of $841.,784 billion, total liabilities of $837.412 billion, and total equity of $4.372 billion. The Company received $6.1 billion and $30.8 billion in June 2009 and March 2009, respectively, pursuant to draw requests that FHFA submitted to Treasury on the Company's behalf to address the deficits in the Company's net worth as of March 31, 2009, and December 31, 2008, respectively. As a result of funding of these draw requests, the aggregate liquidation preference on the senior preferred stock owned by Treasury increased from $14.8 billion as of December 31, 2008, to $51.7 billion on December 31, 2009. Based on the current aggregate liquidation preference of $51.7 billion, Treasury, the holder of the senior preferred stock, is entitled to annual cash dividends of approximately $5.2 billion, which exceeds the Company's annual historical earnings in most periods. Including the $1.3 billion quarterly dividend paid on December 31, 2009, the Company has paid aggregate dividends of $4.3 billion in cash on the senior preferred stock to Treasury at the direction of FHFA, acting as Conservator. A full-text copy of the Company's annual report for 2009 is available at no charge at http://researcharchives.com/t/s?5557 Freddie Mac is Under Conservatorship Freddie Mac is under conservatorship and is dependent upon the continued support of Treasury and FHFA to continue operating its business. While the conservatorship has benefited the Company through, for example, improved access to the debt markets because of the support the Company receives from Treasury and the Federal Reserve, th e Company is also subject to certain constraints on its business activities by Treasury due to the terms of, and Treasury's rights under, the Purchase Agreement. The conservatorship and related developments have had a wide-ranging impact on the Company, including the Company's regulatory supervision, management, business, financial condition and results of operations. There is significant uncertainty as to whether or when the Company will emerge from conservatorship, as it has no specified termination date, and as to what changes may occur to the Company's business structure during or following its conservatorship, including whether the Company will continue to exist. The Company's future structure and role are currently being considered by the President Obama and the U.S. Congress. The Company has no no ability to predict the outcome of these deliberations. The Company's business objectives and strategies have in some cases been altered since it was placed into conservatorship, and may continue to change. These changes to the Company's business objectives and strategies may not contribute to the Company's profitability. Some of the Company's activities are expected to have an adverse impact on the Company's near and long-term financial results. The Conservator and Treasury also did not authorize the Company to engage in certain business activities and transactions, including the sale of certain assets, which the Company believes may have had a beneficial impact on the Company's results of operations or financial condition, if executed. The Company's inability to execute certain business activities and transactions may adversely affect its profitability, and thus contribute to its need to draw additional funds under the Purchase Agreement. On February 18, 2010, the Company received a letter from the Acting Director of FHFA stating that FHFA has determined that any sale of the LIHTC investments by Freddie Mac would require Treasury's consent under the terms of the Purchase Agreement. The letter further stated that FHFA had presented other options for Treasury to consider, including allowing Freddie Mac to pay senior preferred stock dividends by waiving the right to claim future tax benefits of the LIHTC investments. However, after further consultation with Treasury and consistent with the terms of the Purchase Agreement, the Acting Director informed the Company it may not sell or transfer the assets and that he sees no other disposition options. As a result, the Company wrote down the carrying value of its LIHTC investments to zero as of December 31, 2009, resulting in a loss of $3.4 billion. This write-down reduces the Company's net worth at December 31, 2009, and increases the likelihood that the Company will require additional draws from Treasury under the Purchase Agreement and, as a consequence, increases the likelihood that the Company's dividend obligation on the senior preferred stock will increase. There is significant uncertainty as to the ultimate impact that the Company efforts to aid the housing and mortgage markets will have on the Company's future capital or liquidity needs and the Company cannot estimate whether, and the extent to which, costs it incurs in the near term as a result of these efforts, which for the most part the Company is not reimbursed for, will be offset by the prevention or reduction of potential future costs. In a letter to the Chairmen and Ranking Members of the Congressional Banking and Financial Services Committees dated February 2, 2010, the Acting Director of FHFA stated that the Company's central goal is to minimize its credit losses and that the Company will be limited to continuing its existing core business activities and taking actions necessary to advance the goals of the conservatorship. The Acting Director stated that FHFA does not expect the Company will be a substantial buyer or seller of mortgages for its mortgage-related investments portfolio, except for purchases of delinquent mortgages out of participation certificate (PC) pools. The Acting Director also stated that permitting the Company to engage in new products is inconsistent with the goals of the conservatorship. These restrictions could limit the Company's ability to return to profitability in future periods. About Freddie Mac Based in McLean, Virginia, Freddie Mac (NYSE: FRE) -- http://www.FreddieMac.com/-- was established by Congress in 1970 to provide liquidity, stability and affordability to the nation's residential mortgage markets. The Company's participation in the secondary mortgage market includes providing its credit guarantee for residential mortgages originated by mortgage lenders and investing in mortgage loans and mortgage-related securities. The Company earns management and guarantee fees for providing its guarantee and performing management activities (such as ongoing trustee services, administration of pass-through amounts, paying agent services, tax reporting and other required services) with respect to issued PCs and Structured Securities. FREEDOM COMMUNICATIONS: US Objects to Ch. 11 Plan on Tax Grounds ---------------------------------------------------------------- Law360 reports the U.S. has filed an objection to the confirmation of Freedom Communications Holdings Inc.'s Chapter 11 plan, saying it does not adequately address the debtor's tax liabilities to the government. Freedom Communications is currently soliciting votes on the Plan, which cuts $445 million from the Company's secured debt. The Debtors are scheduled to present the Plan for confirmation on March 9, 2010, at 10:00 a.m. Objections are due March 1. As reported by the TCR on Jan. 22, 2010, Freedom Communications filed its joint Disclosure Statement and Plan of Reorganization, which is supported by the agent bank for its secured lenders and the Official Committee of Unsecured Creditors. Under the new, joint Plan, the Company's secured debt would be reduced from $770 million to $325 million, with the secured lenders holding 100 percent of the common stock in the new company. Additionally, the Plan provides that participants in the Company's non-qualified pension program will have 70 percent of their benefits reinstated, to be paid out according to the terms of those pension plans. Further, a fund of $5.5 million will be established for payment to trade creditors who participate in the trade arrangement outlined in the Plan of Reorganization. For the benefit of other general unsecured creditors, the Company will establish a $14.5 million trust, which will also receive rights to pursue certain litigation claims on the Company's behalf. About Freedom Communications Freedom Communications, headquartered in Irvine, California, is a national privately owned information and entertainment company of print publications, broadcast television stations and interactive businesses. The company's print portfolio includes approximately 90 daily and weekly publications, including approximately 30 daily newspapers, plus ancillary magazines and other specialty publications. The broadcast company's stations -- five CBS, two ABC network affiliates and one CW affiliate -- reach more than 3 million households across the country. The Company's news, information and entertainment Web sites complement its print and broadcast properties. Freedom Communications filed for Chapter 11 on Sept. 1, 2009 (Bankr. D. Del. Case No. 09-13046). Attorneys at Young Conaway Stargatt & Taylor, and Latham & Watkins LLP serve as Chapter 11 counsel. Houlihan, Lokey, Howard & Zukin, Inc., serves as financial advisor while AlixPartners LLC is restructuring consultant. Logan & Co. serves as claims and notice agent. Freedom Communications had $757,000,000 in assets against debts of $1,077,000,000 as of July 31, 2009. GENERAL GROWTH: Fitch Withdraws 'D' Issuer Default Rating --------------------------------------------------------- Fitch Ratings has withdrawn the ratings for General Growth Properties, Inc., and its subsidiaries GGP Limited Partnership and The Rouse Company LP. The Issuer Default Ratings for these entities were downgraded to 'D' following the announcement that these entities filed for bankruptcy in April 2009. Fitch will no longer provide analytical coverage on GGP or its subsidiaries. Withdrawn ratings are: General Growth Properties, Inc. -- IDR 'D'. GGP Limited Partnership -- IDR 'D'; -- Revolving credit facility 'C/RR5'; -- Term loan 'C/RR5'; -- Exchangeable senior notes 'C/RR5'; -- Perpetual preferred stock (indicative) 'C/RR6'. The Rouse Company LP -- IDR 'D'; -- Senior unsecured notes 'C/RR5'. Fitch believes that a successful recapitalization or transaction with a third party would likely result in recoveries for the aforementioned debt obligations materially higher than indicated by the current 'RR5'. The rating withdrawals are due to insufficient information to evaluate the prospects of such recapitalization or transaction, given the potential complexities surrounding the approval required by the Bankruptcy Court. GENERAL GROWTH: Court Approves Securities Action Settlement ----------------------------------------------------------- Bankruptcy Judge Allan Gropper of the United States Bankruptcy Court for the Southern District of New York approves a settlement agreement resolving securities lawsuits filed against the Debtors' directors. The securities lawsuits are consolidated in one proceeding with Sharankishor Desai acting as lead plaintiff for the Securities Lawsuits. Moreover, Judge Gropper lifts the automatic stay to allow Twin City Fire Insurance Co. and Illinois National Insurance Company to make payment of $15,000,000 under the Settlement Agreement on behalf of General Growth Properties, Inc.'s directors who are defendants in the Securities Class Action. Judge Gropper clarifies that nothing in this order will modify, alter or accelerate the rights and obligations of Twin City, the Debtors or the Director Defendants provided for under the Directors, Officers and Company Liability Insurance Policy. Moreover, nothing in the order will constitute a determination that the proceeds of the D&O Policies are property of the Debtors' estates and the rights of all parties-in-interest to assert that the proceeds of the Policy are, or are not, property of the Debtors' estates are reserved, Judge Gropper avers. 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: District Court Dismisses A&K Appeal on DIP Order ---------------------------------------------------------------- To recall, A&K Endowment, Inc., took an appeal to the U.S. District Court for the Southern District of New York from Judge Gropper's final order authorizing the Debtors to obtain DIP Financing entered on May 14, 2009 Judge John G. Koeltl of the District Court noted that Section 364(e) of the Bankruptcy Code does not expressly require the dismissal of an appeal on the ground of mootness, however this section makes clear that if the statutory requirements are met, any appeal does not affect the validity of the loan or the lien created. The Appeal seeks to invalidate the lien on a master planned community known as Summerlin, which is owned by the Debtors, including The Howard Hughes Corporation and Howard Hughes Properties, Inc., Judge Koeltl noted. Judge Koeltl held that pursuant to Section 364(e) the Debtors correctly argue that the Appeal is moot because A&K did not seek a stay of the Final DIP Order, the Final DIP Order was entered in good faith, and the proceeds of the DIP Loan have been disbursed and the lien has attached to the Summerlin Property. The lien that was granted cannot be affected unless the authorization has been stayed pending appeal, Judge Koeltl averred. A&K Endowment has reasoned that the Summerlin property constituted a very small proportion of the collateral that was used to secure the DIP loan and that it would have been prohibitively expensive to obtain a bond. However, no exception of that kind exists under Section 364(e), Judge Koeltl said. In any event, A&K Endowment's argument cannot excuse its failure even to seek a stay with an appropriate bond before the Bankruptcy Court, Judge Koeltl held. Judge Koeltl further noted that A&K Endowment argued that the appeal is not moot because the District Court could provide effective relief by voiding the lien placed on the Summerlin property in the Final DIP Order. However, removing the Summerlin property from the scope of the lien would be inequitable because it would undo collateral on which the DIP financing was made, and threaten to unravel the intricate DIP financing, Judge Koetel opined. Judge Koeltl also said that the Bankruptcy Court found that the terms and conditions of the DIP documents were negotiated in good faith, and that terms and conditions of the DIP Documents were subject to the protections contemplated in Section 364(e). Thus, the Bankruptcy Court's findings that the Debtors acted in good faith are findings of fact, thus, they must be accepted unless clearly erroneous, Judge Koeltl averred. In this light, Judge Koeltl found that A&K Endowment's substantive challenges to the Final DIP Order fail. Since it was not clearly erroneous for the Bankruptcy Court to reject A&K Endowment's three central arguments, the Final DIP Order entered by the Bankruptcy Court should not be reversed, Judge Koeltl opined. A&K Endowment's three central arguments and the District Court's findings are: (1) A&K Endowment asserts that the Debtors failed to prove to the Bankruptcy Court that the financing approved by the Final DIP Order is necessary to preserve the assets of, or provides a benefit to, the estates of the specific Debtors that hold Summerlin and who were required to grant liens on their property in favor of the DIP lender. The District Court found that the Debtors established that DIP financing was required to maintain centralized business operations, continue their business uninterrupted and preserve value at each property, including Summerlin. (2) A&K Endowment challenges the necessity of repaying a prepetition bridge loan made by Goldman Sachs Group, Inc., arguing that the repayment does not benefit Summerlin. As the Bankruptcy Court found, the payment of the Goldman Facility reflects the Debtors' exercise of prudent business judgment, the District Court held. (3) A&K Endownment asserts that requiring the Summerlin Debtors to grant a lien on the Summerlin property to the DIP lender improperly required the Summerlin Debtors to violate their fiduciary and contractual obligations under a Contingent Stock Agreement, executed at the time of a merger between Debtor The Rouse Compan LP and the assets of the Estate of Howard R. Hughes Jr., The District Court found that the Debtors correctly point out that the CSA was not designated as part of the record on appeal, and thus it would be difficult to rely on that document to find clear error by the Bankruptcy Court. Moreover, the Bankruptcy Code preempts prepetition Contracts, the District Court said. Judge Koeltl said that to the extent there are arguments not dealt with, they are either moot or without merit. Thus, for those reasons, Judge Koeltl dismissed the Appeal as moot. Judge Koeltl also directed the Clerk of Court to close the Appeal. A full-text copy of the District Court's order dated February 15, 2010, is available for free at: http://bankrupt.com/misc/ggp_Feb15DCOrder.pdf 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: Shareholder Sues Board for Simon Bid Rejection -------------------------------------------------------------- James Young, a shareholder of General Growth Properties, Inc., sued the mall operator's board of directors over its rejection of Simon Property Group, Inc.'s bid to acquire the company for $10 billion, Bloomberg News reported. Simon Property made a written offer to acquire General Growth in a fully financed transaction valued at more than $10 billion, including roughly $9 billion in cash. Simon's offer would provide a 100% cash recovery of par value plus accrued interest and dividends to all GGP's 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. Mr. Young brought a class-action complaint in the Circuit Court for Cook County, Chancery Division against John Bucksbaum, chairman of GGP's Board along with six other members namely Alan S. Cohen, Anthony Downs, Adams Metz, Thomas H. Nolan Jr., John T. Riordan and Beth Stewart. In the complaint, Mr. Young accused Mr. Bucksbaum and the board members of breaching their fiduciary duty to GGP's investors when they turned down Simon Property's bid, Bloomberg says. Moreover, Mr. Young alleged in his complaint that the Board's conduct is substantially unfair to GGP and the company's public shareholders, Bloomberg says. Mr. Young also stated in his complaint that he brought the action one behalf of stockholders and for the benefit of GGP, Bloomberg notes. Thus, Mr. Young, in the complaint, seeks an order barring the directors from entering into any contract that harms the company or its shareholders, or makes it more difficult or costly for a would-be purchaser to acquire it, Bloomberg quotes from the complaint. The action is set for case management call on August 12, 2010 before the Circuit Court. 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: To Turn Over Chapel Hills Mall to LNR Partners -------------------------------------------------------------- General Growth Properties, Inc., has agreed to turn over its ownership of Chapel Hills Mall to LNR Partners Inc. to avoid foreclosure of a $122 million loan that will mature in October 2010, The Gazette reports, citing Commercial Real Direct, a commercial property investment and news research publishing group. Pursuant to an agreement, GGP will relinquish the ownership of the Mall to LNR Partners, as administrative agent of the loan for LB-UBS Commercial Mortgage Trust 2006-C1, The Gazette notes. The handing over of the Mall's ownership comes as GGP failed to extend the maturity date of the $122 million loan, according to Commercial Real Direct. Moreover, GGP still owes $114.2 million under the Loan, but the property is worth less than $17 million, says Realpoint LLC, a company that provides research on commercial real estate loans. GGP's Joint Plan of Reorganization allows the lenders for the Mall along with 12 other malls classified as "Special Consideration Properties" under the Amended Plan to demand GGP to hand over the properties or begin foreclosure proceedings if the full payment is not made within 10 days of the due date, Debtwire.com explains. GGP spokesperson David Keating said in an e-mailed statement to The Gazette that the company has not yet turned over ownership of the Mall to its lender and is reviewing all options available at this time. 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: U.S. Trustee Adds M&T to Creditors Committee ------------------------------------------------------------ Pursuant to Section 1102 of the Bankruptcy Code, Diana G. Adams, United States Trustee for Region 2, appointed, on February 18, 2010, M&T Bank, to serve as member of the Official Committee of Unsecured Creditors in General Growth Properties, Inc., and its debtor-affiliates' Chapter 11 cases. M&T Bank can be reached at: M&T Bank Attn: Mark S. Gaffin 25 S. Charles Street. 10th Floor Baltimore, Maryland 21201 (410) 244-3932 The existing members of the Committee are: -- Luxor Capital Group, LP Attn: Nathaniel Redleaf 767 5th Avenue, 19th Floor New York 10153 (212) 763-8018 -- Eurohypo AG, New York Branch; Attn: Daniel Vinson 1114 Avenue of the Americas New York, New York 10036 Tel. No. (212) 479-2518 -- The Bank of New York Mellon Trust Co.; Attn: Robert Major 6525 West Campus Oval New Albany, Ohio 43054 Tel. No. (614) 775-5278 -- American High-Income Trust; Attn: Ellen Carr 333 S. Hope Street, 55th Floor Los Angeles, California 90071 Tel. No. (310) 996-6342 -- Fidelity Fixed Income Trust, Fidelity Strategic Real Return Fund and Fidelity Investments. Attn: Andrew Boyd 82 Devonshire Street, V13H Boston, Massachusetts 02109 -- Wilmington Trust; Attn: Patrick Healy Rodney Square North 1100 North Market Street Wilmington, Delaware 19890-1600 Tel. No. (302) 636-6391 -- Taberna Capital Management, LLC; Attn: Rafael Licht 450 Park Avenue New York, New York 10022 Tel. No. (212) 300-6901 -- Macy's Inc.; Attn: Carl L. Goetemoeller 7 West Seventh Street Cincinnati, Ohio 45202 Tel. No. (513) 579-7666 -- General Electric Capital Corp.; and Attn: Carl L. Goetemoeller 201 Merritt Norwalk, CT 06856 Tel. No. (513) 956-4405 -- Millard Mall Services, Inc. Attn: Lawrence B. Kugler 7301 North Cicero Avenue Lincolnwood, IL 60712 Tel. No. (847) 763-2040 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) GMAC INC: Bankruptcy Would Have Cost Treasury $50 Billion --------------------------------------------------------- ABI reports that the Treasury Department's lead auto industry adviser said bankruptcy for GMAC Inc., the auto and home lender majority owned by the U.S. government, would have cost the government as much as $50 billion. GMAC -- http://www.gmacfs.com/-- is a bank holding company with 15 million customers worldwide. As a global financial services institution, GMAC's business operations include automotive finance, mortgage operations, insurance and commercial finance. The Company also offers retail banking products through its online bank, Ally Bank. * * * As reported by the Troubled Company Reporter on February 8, 2010, Moody's Investors Service upgraded the senior unsecured rating of GMAC and GMAC-supported subsidiaries to B3 from Ca, with a stable rating outlook. The long-term rating of mortgage finance subsidiary Residential Capital was affirmed at C, with a stable rating outlook. The TCR on January 29, 2010, reported that Standard & Poor's Ratings Services raised its long-term counterparty credit rating on both GMAC and Residential Capital to 'B' from 'CCC'. The 'C' short-term ratings and the 'C' preferred securities ratings are affirmed. S&P also affirmed the recovery ratings on senior secured debt at Residential Capital LLC and raising the senior secured debt ratings. The outlook on both entities is stable. GOTTSCHALKS INC: Fred Ruiz Resigns as Director of Board ------------------------------------------------------- On February 23, 2010, Fred Ruiz resigned as a member of the Board of Directors of Gottschalks Inc., effective immediately. According to the Company, the resignation of Mr. Ruiz is not the result of a disagreement with the Company on any matter relating to the Company's operations, policies or practices. The Company reported net income of $1,139,000 for the reporting period January 3, 2010, through Janaury 30, 2010. At January 30, 2010, the Company had $37,587,000 in total assets and $77,455,000 in total liabilities, resulting in a stockholders' deficit of $39,868,000. About Gottschalks Inc. Headquartered in Fresno, California, Gottschalks Inc. (Pink Sheets: GOTTQ.PK) -- http://www.gottschalks.com/-- is a regional department store chain, operating 58 department stores and three specialty apparel stores in six western states. Gottschalks offers better to moderate brand-name fashion apparel, cosmetics, shoes, accessories and home merchandise. The Company filed for Chapter 11 protection on January 14, 2009 (Bankr. D. Del. Case No. 09-10157). O'Melveny & Myers LLP represents the Debtor in its Chapter 11 case. Lee E. Kaufman, Esq., and Mark D. Collins, Esq., at Richards, Layton & Finger, P.A., serves as the Debtors' co-counsel. The Debtor selected Kurtzman Carson Consultants LLC as its claims agent. The U.S. Trustee for Region 3 appointed seven creditors to serve on an official committee of unsecured creditors. When the Debtor filed for protection from its creditors, it listed $288,438,000 in total assets and $197,072,000 in total debts. GOTTSCHALKS INC: GE Capital Blasts Liquidation Plan --------------------------------------------------- Law360 reports that General Electric Capital Corp. has lashed out at Gottschalks Inc.'s liquidation plan, saying it fails to make good on certain obligations Gottschalks owes GE Capital as a lender. Under Gottschalks Inc.'s plan, unsecured creditors will split the $4 million to $10 million left after secured and other higher- priority claims are paid in full. Unsecured claims are expected to aggregate $75 million to $105 million. The amount for payment toward unsecured claims doesn't include recoveries from lawsuits, including preference suits against suppliers who were paid within 90 days of bankruptcy. About Gottschalks Inc. Headquartered in Fresno, California, Gottschalks Inc. (Pink Sheets: GOTTQ.PK) -- http://www.gottschalks.com/-- is a regional department store chain, operating 58 department stores and three specialty apparel stores in six western states. Gottschalks offers better to moderate brand-name fashion apparel, cosmetics, shoes, accessories and home merchandise. The Company filed for Chapter 11 protection on January 14, 2009 (Bankr. D. Del. Case No. 09-10157). O'Melveny & Myers LLP represents the Debtor in its Chapter 11 case. Lee E. Kaufman, Esq., and Mark D. Collins, Esq., at Richards, Layton & Finger, P.A., serves as the Debtors' co-counsel. The Debtor selected Kurtzman Carson Consultants LLC as its claims agent. The U.S. Trustee for Region 3 appointed seven creditors to serve on an official committee of unsecured creditors. When the Debtor filed for protection from its creditors, it listed $288,438,000 in total assets and $197,072,000 in total debts. GRAY COMMUNICATIONS: Bank Debt Trades at 10% Off ------------------------------------------------ Participations in a syndicated loan under which Gray Communications is a borrower traded in the secondary market at 89.70 cents-on-the-dollar during the week ended Friday, Feb. 26, 2010, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents a drop of 1.49 percentage points from the previous week, The Journal relates. The Company pays 150 basis points above LIBOR to borrow under the facility. The bank loan matures on Dec. 21, 2014, and carries Moody's Caa1 rating and Standard & Poor's CCC rating. The debt is one of the biggest gainers and losers among 188 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. Formerly known as Gray Communications System Gray Television, Inc., Atlanta, Georgia-based Gray Television, Inc., is a television broadcast company. Gray currently operates 36 television stations serving 30 markets. Each of the stations are affiliated with either CBS (17 stations), NBC (10 stations), ABC (8 stations) or FOX (1 station). In addition, Gray currently operates 38 digital second channels including 1 ABC, 4 Fox, 7 CW, 16 MyNetworkTV and 1 Universal Sports Network affiliates plus 8 local news/weather channels and 1 "independent" channel in certain of its existing markets. Gray Television carries 'CCC' issuer credit ratings from Standard & Poor's and 'Caa1' corporate family rating from Moody's. GROUP HEALTH: S&P Assigns 'BB-' Counterparty Credit Rating ---------------------------------------------------------- Standard & Poor's Ratings Services said that it assigned 'BB-' counterparty credit and financial strength ratings to Group Health Inc. Standard & Poor's also said that it assigned 'BB+' counterparty credit and financial strength ratings to two downstream subsidiaries of Health Insurance Plan of Greater New York (BB+/Stable): ConnectiCare of Massachusetts Inc. and ConnectiCare of New York. Standard & Poor's also affirmed its 'BB+' counterparty credit and financial strength ratings on HIP of Greater New York and its subsidiaries. The outlooks on all ConnectiCare entities are negative, and the outlooks on GHI and HIP are stable. "The ratings on GHI are constrained by its weak risk-adjusted capitalization, which S&P consider the key weakness, and marginal operating performance overall, noted Standard & Poor's credit analyst Shellie Stoddard. "GHI has filed a plan for surplus restoration with New York State to address its $100 million deficiency." The ratings on HIP are based on its good competitive position in the New York State and Connecticut markets, good risk-adjusted capitalization, and good liquidity profile, offset by marginal operating performance. The negative outlook on the ConnectiCare subsidiaries reflects the weaker earnings and capitalization that emerged in 2009. GHI, like HIP, is a not-for-profit affiliate of EmblemHealth Inc., a New York regional health plan organization. S&P analyzes GHI and HIP on a stand-alone basis, including credit given for group enhancement through shared strategic and operational strengths but excluding any credit given for potential capital movement between the entities. If EmblemHealth completes its plan for a for-profit conversion, GHI and HIP will be converted to three for-profit entities that will provide insurance, HMO, and dental coverage. At that time, S&P would likely view the successor plans to GHI and HIP to be core to each other and the overall EmblemHealth group. S&P's criteria would also indicate a holding-company rating of three notches below the notional group operating rating, reflecting structural and regulatory subordination to holding-company obligations. S&P expects that GHI will mirror EmblemHealth's operating performance improvement in 2010, supported by pricing corrections in its commercial book of business and successful implementation of targeted medical and care-management strategies. Although positive net earnings should provide improvement in capital in 2010, S&P still expects capital to remain a weakness to the rating. For 2010, Standard & Poor's expects that EmblemHealth will generate about $9 billion-$10 billion in premium revenues and adjusted pretax income of about $60 million-70 million, for a return on revenue of about 0.7%-0.8%. GHI will have a slightly higher margin. S&P expects that consolidated medical membership (excluding ancillary insured and stand-alone Part D members) will decrease by about 4%-5% to about 2.6 million-2.7 million members by year-end 2010, driven by losses in the commercial and state- sponsored members. Capitalization should remain a rating weakness at GHI but a strength on a consolidated basis, with continued capital redundancy at the rating level based on Standard & Poor's model. "Given the marginal level of EmblemHealth's earnings and historically volatile operating performance, S&P does not believe a positive rating action is likely in the next 12-18 months," Ms. Stoddard added. "However, if EmblemHealth is unable to turn around its commercial business, if it suffers from any additional decline in earnings, or if consolidated capitalization were to weaken from its current level, S&P would likely consider a negative rating action. Similarly, if GHI is unable to successfully turn around its commercial business or if its capital declines further, S&P will likely lower the rating." HARRAH'S ENTERTAINMENT: HOC Bank Debt Trades at 0.28% Off --------------------------------------------------------- Participations in a syndicated loan under which Harrah's Operating Company, Inc., is a borrower traded in the secondary market at 99.72 cents-on-the-dollar during the week ended Friday, Feb. 26, 2010, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 0.63 percentage points from the previous week, The Journal relates. The Company pays 750 basis points above LIBOR to borrow under the facility. The bank loan matures on Oct. 23, 2016, and carries Moody's Caa1 rating and Standard & Poor's B- rating. The debt is one of the biggest gainers and losers among 188 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. Las Vegas, Nevada-based Harrah's Entertainment, Inc. -- http://www.harrahs.com/-- through its wholly owned subsidiary, Harrah's Operating Company, Inc., operates nearly 40 casinos across the United States, primarily under the Harrah's(R), Caesars(R) and Horseshoe(R) brand names; Harrah's also owns the London Clubs International family of casinos and the World Series of Poker(R). Private equity firms Apollo Global Management and TPG Capital LP acquired Harrah's in January for $31 billion. As of June 30, 2009, the Company had $30.7 billion in total assets and total current liabilities of $1.71 billion, long-term debt of $19.3 billion, deferred credits and other of $718.2 million, deferred income taxes of $5.74 billion, and preferred stock of $2.46 billion. Harrah's Entertainment carries a 'Caa3' Corporate Family rating, and a 'Caa3' Probability of default rating from Moody's. The ratings "reflect very high leverage and a negative outlook for gaming demand over the next year," Moody's said in September 2009. HAYASHI ASSET: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Hayashi Asset Management, L.L.C., a Nevada Limited Liability Company 3530 Wilshire Blvd., Suite 1655 Los Angeles, CA 90010 Bankruptcy Case No.: 10-16721 Chapter 11 Petition Date: February 24, 2010 Court: United States Bankruptcy Court Central District of California (Los Angeles) Debtor's Counsel: David Weinstein, Esq. Richardson & Patel LLP Murdock Plaza 10900 Wilshire Blvd., Ste 500 Los Angeles, CA 90024 Tel: (310) 208-1182 Fax: (310) 208-1154 Email: dweinstein@richardsonpatel.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/cacb10-16721.pdf The petition was signed by Edgardo J. Maliksi, manager of the Company. HERTZ CORP: Bank Debt Trades at 2% Off in Secondary Market ---------------------------------------------------------- Participations in a syndicated loan under which The Hertz Corporation is a borrower traded in the secondary market at 97.59 cents-on-the-dollar during the week ended Friday, Feb. 26, 2010, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 0.75 percentage points from the previous week, The Journal relates. The Company pays 175 basis points above LIBOR to borrow under the facility. The bank loan matures on Dec. 21, 2012, and carries Moody's B a1 rating and Standard & Poor's BB- rating. The debt is one of the biggest gainers and losers among 188 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. The Hertz Corporation, a subsidiary of Hertz Global Holdings, Inc. (NYSE: HTZ), based in Park Ridge, New Jersey, is the world's largest general use car rental brand, operating from approximately 8,000 locations in 147 countries worldwide. Hertz also operates one of the world's largest equipment rental businesses, Hertz Equipment Rental Corporation, through more than 375 branches in the United States, Canada, France, Spain and China. In July, Fitch Ratings downgraded Hertz Corporation's Issuer Default Rating to 'BB-' from 'BB', and Moody's lowered Hertz's Corporate Family Rating and Probability of Default to 'B1' from 'Ba3'. HOLLYWOOD MOTION PICTURE: Voluntary Chapter 11 Case Summary ----------------------------------------------------------- Debtor: Hollywood Motion Picture Trust 4124 North Ryan Road Creston, CA 93432 Bankruptcy Case No.: 10-10864 Chapter 11 Petition Date: February 24, 2010 Court: United States Bankruptcy Court Central District of California (Santa Barbara) Judge: Robin Riblet Debtor's Counsel: Peter Susi, Esq. 7 W Figueroa 2nd Fl Santa Barbara, CA 93101-3191 Tel: (805) 965-1011 Fax: (805) 965-7351 Email: cheryl@msmlaw.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 $5,261,474, and total debts of $5,556,944. The Company says it does not have unsecured creditors who are non insiders when they filed their petition. The petition was signed by Todd Fisher, trustee of the Company. H.P.W. LTD: Case Summary & 3 Largest Unsecured Creditors -------------------------------------------------------- Debtor: H.P.W. Ltd. c/o William K. Haines, Jr. 8050 Freedom Avenue NW North Canton, OH 44720 Bankruptcy Case No.: 10-60618 Chapter 11 Petition Date: February 24, 2010 Court: United States Bankruptcy Court Northern District of Ohio (Canton) Judge: Russ Kendig Debtor's Counsel: Patrick J. Keating, Esq. Buckingham, Doolittle & Burroughs LLP 3800 Embassy Parkway, Suite 300 Akron, OH 44333 Tel: (330) 258-6554 Fax: (330) 252-5554 Email: pkeating@bdblaw.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 3 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/ohnb10-60618.pdf The petition was signed by William K. Haines, Jr., partner of the Company. HUFFY CORP: Plan Discharged Retailer's Indemnification Claim ------------------------------------------------------------ WestLaw reports that regardless of whether a bankruptcy court adopted the "conduct" or the "relationship/fair contemplation" test, a retailer that had a preexisting relationship with a Chapter 11 debtor-manufacturer, pursuant to which it purchased products from the debtor for sale to consumers at its stores and enjoyed a contractual right to indemnification under an agreement that the parties had executed well in advance of the debtor's bankruptcy, had a contingent, prepetition claim for indemnity for which it, like other retailers with which the debtor enjoyed such a relationship, should have filed a proof of claim, and which was discharged in bankruptcy. It did not matter that an accident involving a basketball pole allegedly manufactured by the debtor, which allegedly triggered the retailer's right to indemnity, did not occur until after the petition was filed. Treating the claim as a prepetition claim that was discharged in bankruptcy was not unfair to the retailer, as the parties clearly contemplated the possibility of liability arising from sale of the debtor's products prior to its bankruptcy filing, as demonstrated by the terms of the indemnification clause, and as retailer had actively participated in the bankruptcy proceedings. In re Huffy Corp., -- - B.R. ----, 2010 WL 622054 (Bankr. S.D. Ohio) (Walter, J.). Headquartered in Miamisburg, Ohio, Huffy Corporation -- http://www.huffy.com/-- designs and supplies wheeled and related products, including bicycles, scooters and tricycles. The Company and its debtor-affiliates filed for chapter 11 protection on Oct. 20, 2004 (Bankr. S.D. Ohio Case No. 04-39148). Kim Martin Lewis, Esq., and Donald W. Mallory, Esq., at Dinsmore & Shohl LLP, represented the Debtors in their successful restructuring of $138,700,000 in assets and $161,200,000 in debts. The Court confirmed the Debtors' chapter 11 Plan on Sept. 23, 2005, and Huffy emerged from chapter 11 in Oct. 2005. IMAGEWARE SYSTEMS: Stonefield Josephson Raises Going Concern Doubt ------------------------------------------------------------------ Stonefield Josephson, Inc., in Irvine, California, expressed substantial doubt about ImageWare Systems, Inc.'s ability to continue as a going concern after auditing the Company's consolidated financial statements as of and for the years ended December 31, 2008, and 2007. The independent auditors reported that the Company has incurred substantial losses since inception, experienced negative cash flows from operations, and has negative working capital as of December 31, 2008. As of the end of the third quarter of 2008 the Company was faced with limited funds for operations and was compelled to suspend SEC filings. The Company reported a net loss of $5,718,000 on revenues of $6,515,000 for the year ended December 31, 2008, compared to a net loss of $4,685,000 on revenues of $8,488,000 for the year ended December 31, 2007. Results for the twelve months ended December 31, 2008, include impairment losses of $742,000 for long-lived intangible assets acquired in the Company's December 2007 purchase of certain assets of Sol Logic, Inc. Balance Sheet At December 31, 2008, the Company's consolidated balance sheets showed $5,237,000 in total assets and $6,269,000 in total liabilities, resulting in a $1,032,000 shareholders' deficit. The Company's consolidated balance sheets at December 31, 2008, also showed strained liquidity with $884,000 in total current assets available to pay $5,069,000 in total current liabilities. A full-text copy of the Company's 2008 annual report is available for free at http://researcharchives.com/t/s?5559 Q3 2009 Results The Company reported a net loss of $4,693,000 on revenues of $4,394,000 for the nine months ended September 30, 2008, compared to a net loss of $3,399,000 on revenues of $6,624,000 for the same period in 2007. A full-text copy of the Company's Q3 2009 report is available at no charge at http://researcharchives.com/t/s?555a About ImageWare Systems ImageWare Systems, Inc. -- http://www.iwsinc.com/-- provides software-based identity management solutions. The Company's "flagship" product is the IWS Biometric Engine, a multi-biometric platform that is hardware and algorithm independent, enabling the enrollment and management of unlimited population sizes. The Company, formerly known as ImageWare Software, Inc., was founded in 1987 and is headquartered in San Diego, California. INFOLOGIX INC: David Gulian Holds 3.4% of Common Stock ------------------------------------------------------ David T. Gulian may be deemed to have sole voting and dispositive power over 125,976 shares of Common Stock of InfoLogix, Inc., that includes 91,101 shares owned by Mr. Gulian, 24,375 shares that may be acquired upon the exercise of a warrant held directly by Mr. Gulian, and 10,500 shares that may be acquired upon the exercise of vested options. Mr. Gulian may also be deemed to have shared voting and dispositive power over 2,000 shares of Common Stock that he holds jointly with Ann Marie Gulian. Accordingly, Mr. Gulian may be deemed to be the beneficial owner -- within the meaning of Rule 13d-3 under the Securities Exchange Act of 1934 -- of 127,976 shares of Common Stock, which represents approximately 3.4% of the shares of Common Stock deemed to be outstanding pursuant to Rule 13d-3(d)(1). On January 5, 2010, InfoLogix effected a 1-for-25 reverse stock split of its issued and outstanding shares of Common Stock, par value $0.00001 per share. Mr. Musser's disclosure reflects the post-split number of shares of common stock. About InfoLogix Inc. Based Hatboro, Pennsylvania, InfoLogix Inc. (NASDAQ: IFLG) -- http://www.infologix.com/-- provides enterprise mobility solutions for the healthcare and commercial industries. InfoLogix uses the industry's most advanced technologies to increase the efficiency, accuracy, and transparency of complex business and clinical processes. With 19 issued patents, InfoLogix provides mobile managed solutions, on-demand software applications, mobile infrastructure products, and strategic consulting services to over 2,000 clients in North America including Kraft Foods, Merck and Company, General Electric, Kaiser Permanente, MultiCare Health System and Stanford School of Medicine. At September 30, 2009, the Company had total assets of $42,332,000 against total liabilities of $45,512,000, resulting in stockholders' deficiency of $3,180,000. Going Concern The Company has said, "Our condensed consolidated financial statements for the three and nine months ended September 30, 2009 have been prepared on a going concern basis, which contemplates continuing operations, securing additional debt or equity financing, selling certain assets, and realizing assets and liabilities in the ordinary course of business. However, we have incurred significant net losses from 2006 through 2009, including net losses of $11,513 for the nine months ended September 30, 2009 and have accumulated a stockholders' deficiency of $3,180. We have substantial liquidity requirements including monthly interest on our outstanding debt and those related to the repayment of our revolving line of credit that comes due on May 1, 2011, as well as to earn out payments for past acquisitions. Though we are taking measures to improve our liquidity, we do not currently expect to generate sufficient cash flow from operations to fund those obligations." INFOLOGIX INC: IL Venture Capital No Longer Holds Shares -------------------------------------------------------- IL Venture Capital, LLC, and Ira M. Lubert disclosed that as of December 31, 2009, they no longer hold shares of common stock of InfoLogix, Inc. Based Hatboro, Pennsylvania, InfoLogix Inc. (NASDAQ: IFLG) -- http://www.infologix.com/-- provides enterprise mobility solutions for the healthcare and commercial industries. InfoLogix uses the industry's most advanced technologies to increase the efficiency, accuracy, and transparency of complex business and clinical processes. With 19 issued patents, InfoLogix provides mobile managed solutions, on-demand software applications, mobile infrastructure products, and strategic consulting services to over 2,000 clients in North America including Kraft Foods, Merck and Company, General Electric, Kaiser Permanente, MultiCare Health System and Stanford School of Medicine. At September 30, 2009, the Company had total assets of $42,332,000 against total liabilities of $45,512,000, resulting in stockholders' deficiency of $3,180,000. Going Concern The Company has said, "Our condensed consolidated financial statements for the three and nine months ended September 30, 2009 have been prepared on a going concern basis, which contemplates continuing operations, securing additional debt or equity financing, selling certain assets, and realizing assets and liabilities in the ordinary course of business. However, we have incurred significant net losses from 2006 through 2009, including net losses of $11,513 for the nine months ended September 30, 2009 and have accumulated a stockholders' deficiency of $3,180. We have substantial liquidity requirements including monthly interest on our outstanding debt and those related to the repayment of our revolving line of credit that comes due on May 1, 2011, as well as to earn out payments for past acquisitions. Though we are taking measures to improve our liquidity, we do not currently expect to generate sufficient cash flow from operations to fund those obligations." INFOLOGIX INC: Richard Hodge Holds 3% of Common Stock ----------------------------------------------------- Richard D. Hodge may be deemed to have sole voting and dispositive power over 113,141 shares of Common Stock of InfoLogix, Inc., that includes 89,578 shares owned by Mr. Hodge, 11,563 shares that may be acquired upon the exercise of a warrant held directly by Mr. Hodge, and 12,000 shares that may be acquired upon the exercise of vested options. Accordingly, Mr. Musser may be deemed to be the beneficial owner -- within the meaning of Rule 13d-3 under the Securities Exchange Act of 1934 -- of 89,578 shares of Common Stock, which represents approximately 3.0% of the shares of Common Stock deemed to be outstanding pursuant to Rule 13d-3(d)(1). On January 5, 2010, InfoLogix effected a 1-for-25 reverse stock split of its issued and outstanding shares of Common Stock, par value $0.00001 per share. Mr. Musser's disclosure reflects the post-split number of shares of common stock. About InfoLogix Inc. Based Hatboro, Pennsylvania, InfoLogix Inc. (NASDAQ: IFLG) -- http://www.infologix.com/-- provides enterprise mobility solutions for the healthcare and commercial industries. InfoLogix uses the industry's most advanced technologies to increase the efficiency, accuracy, and transparency of complex business and clinical processes. With 19 issued patents, InfoLogix provides mobile managed solutions, on-demand software applications, mobile infrastructure products, and strategic consulting services to over 2,000 clients in North America including Kraft Foods, Merck and Company, General Electric, Kaiser Permanente, MultiCare Health System and Stanford School of Medicine. At September 30, 2009, the Company had total assets of $42,332,000 against total liabilities of $45,512,000, resulting in stockholders' deficiency of $3,180,000. Going Concern The Company has said, "Our condensed consolidated financial statements for the three and nine months ended September 30, 2009 have been prepared on a going concern basis, which contemplates continuing operations, securing additional debt or equity financing, selling certain assets, and realizing assets and liabilities in the ordinary course of business. However, we have incurred significant net losses from 2006 through 2009, including net losses of $11,513 for the nine months ended September 30, 2009 and have accumulated a stockholders' deficiency of $3,180. We have substantial liquidity requirements including monthly interest on our outstanding debt and those related to the repayment of our revolving line of credit that comes due on May 1, 2011, as well as to earn out payments for past acquisitions. Though we are taking measures to improve our liquidity, we do not currently expect to generate sufficient cash flow from operations to fund those obligations." INFOLOGIX INC: Warren Musser Holds 2.1% of Common Stock ------------------------------------------------------- Warren V. Musser may be deemed to have sole voting and dispositive power over 80,133 shares of Common Stock of InfoLogix, Inc., that includes 52,133 shares owned by Mr. Musser, 24,000 shares that may be acquired upon the exercise of a warrant held directly by Mr. Musser, 2,000 shares that may be acquired upon the exercise of vested options and 2,000 shares of Common Stock held by The Musser Foundation, of which Mr. Musser is President and Treasurer. Accordingly, Mr. Musser may be deemed to be the beneficial owner - - within the meaning of Rule 13d-3 under the Securities Exchange Act of 1934 -- of 80,133 shares of Common Stock, which represents approximately 2.1% of the shares of Common Stock deemed to be outstanding pursuant to Rule 13d-3(d)(1). On January 5, 2010, InfoLogix effected a 1-for-25 reverse stock split of its issued and outstanding shares of Common Stock, par value $0.00001 per share. Mr. Musser's disclosure reflects the post-split number of shares of common stock. About InfoLogix Inc. Based Hatboro, Pennsylvania, InfoLogix Inc. (NASDAQ: IFLG) -- http://www.infologix.com/-- provides enterprise mobility solutions for the healthcare and commercial industries. InfoLogix uses the industry's most advanced technologies to increase the efficiency, accuracy, and transparency of complex business and clinical processes. With 19 issued patents, InfoLogix provides mobile managed solutions, on-demand software applications, mobile infrastructure products, and strategic consulting services to over 2,000 clients in North America including Kraft Foods, Merck and Company, General Electric, Kaiser Permanente, MultiCare Health System and Stanford School of Medicine. At September 30, 2009, the Company had total assets of $42,332,000 against total liabilities of $45,512,000, resulting in stockholders' deficiency of $3,180,000. Going Concern The Company has said, "Our condensed consolidated financial statements for the three and nine months ended September 30, 2009 have been prepared on a going concern basis, which contemplates continuing operations, securing additional debt or equity financing, selling certain assets, and realizing assets and liabilities in the ordinary course of business. However, we have incurred significant net losses from 2006 through 2009, including net losses of $11,513 for the nine months ended September 30, 2009 and have accumulated a stockholders' deficiency of $3,180. We have substantial liquidity requirements including monthly interest on our outstanding debt and those related to the repayment of our revolving line of credit that comes due on May 1, 2011, as well as to earn out payments for past acquisitions. Though we are taking measures to improve our liquidity, we do not currently expect to generate sufficient cash flow from operations to fund those obligations." IRON MOUNTAIN: New Repurchase Program Won't Affect Moody's Rating ----------------------------------------------------------------- Moody's Investors Service said Iron Mountain Incorporated's B1 Corporate Family Rating and positive outlook are unchanged after the company announced its board of directors has approved a new share repurchase program and initiated a new dividend policy. The last rating action on Iron Mountain occurred on August 5, 2009 when Moody's assigned a B2 rating to the proposed $450 million senior subordinated notes due 2021 and affirmed the company's ratings. Headquartered in Boston, Massachusetts, Iron Mountain is an international provider of information storage and protection related services. The company reported 2009 revenue of $3 billion. ISLE OF CAPRI: Bank Debt Trades at 2% Off in Secondary Market ------------------------------------------------------------- Participations in a syndicated loan under which Isle of Capri Casinos, Inc., is a borrower traded in the secondary market at 97.83 cents-on-the-dollar during the week ended Friday, Feb. 26, 2010, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents a drop of 0.64 percentage points from the previous week, The Journal relates. The Company pays 175 basis points above LIBOR to borrow under the facility. The bank loan matures on Dec. 19, 2013, and carries Moody's B1 rating and Standard & Poor's B+ rating. The debt is one of the biggest gainers and losers among 188 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. Isle of Capri Casinos, Inc., located in Saint Louis, Missourri, owns and operates 18 casino properties throughout the U.S. The company also has international gaming interests in the Grand Bahamas and England. Net revenue for the 12-month period ended Oct. 26, 2008, was about $1.1 billion. J. CALDERON ENTERPRISES: Voluntary Chapter 11 Case Summary ---------------------------------------------------------- Debtor: J. Calderon Enterprises, Inc. 244-250 Pelham Road New Rochelle, NY 10805 Bankruptcy Case No.: 10-22324 Chapter 11 Petition Date: February 24, 2010 Court: United States Bankruptcy Court Southern District of New York (White Plains) Judge: Robert D. Drain Debtor's Counsel: John W. Freeman, Esq. 211-31 Jamaica Avenue Queens Village, NY 11429 Tel: (347) 581-4485 Fax: (917) 386-2569 Email: spedlit625@aol.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of its 20 largest unsecured creditors when it filed its petition. The petition was signed by Javier Calderon, president of the Company. JENNIFER CONVERTIBLES: To be Delisted From Amex ----------------------------------------------- Jennifer Convertibles, Inc. has received a notice from the NYSE Amex, LLC informing the Company that the Exchange intends to file a delisting application with the Securities and Exchange Commission. As previously disclosed in a press release and a Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on January 12, 2010, the Exchange had advised the Company that it was not in compliance with the continued listing requirements, since its stockholders' equity was below $2,000,000 and it had reported losses from continuing operations and net losses in two of its three most recent fiscal years. The Company was offered an opportunity to submit a plan of compliance by February 12, 2010, addressing how it intended to regain compliance, but it elected not to submit a plan. The Company understands that its stock will cease trading on the Exchange effective March 8, 2010. It is taking steps to have the stock listed for trading on the Over-The-Counter Bulletin Board effective as of the opening of business on March 8, 2010. In the event that the stock is not listed on the Over-The-Counter Bulletin Board by March 8, 2010, the stock will trade on the Pink Sheets until it is listed. About Jennifer Convertibles Jennifer Convertibles is the owner and licensor of the largest group of sofabed specialty retail stores in the United States, with 144 Jennifer Convertibles(R) stores and is the largest specialty retailer of leather furniture with 13 Jennifer Leather stores. Following a transaction with the former affiliated private company, as of February 25, 2010, the Company owns 157 stores and operates five licensed Ashley Furniture HomeStores. JOHN MANEELY: Bank Debt Trades at 6% Off in Secondary Market ------------------------------------------------------------ Participations in a syndicated loan under which John Maneely Company is a borrower traded in the secondary market at 93.61 cents-on-the-dollar during the week ended Friday, Feb. 26, 2010, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents a drop of 1.29 percentage points from the previous week, The Journal relates. The Company pays 325 basis points above LIBOR to borrow under the facility. The bank loan matures on Dec. 9, 2013, and carries Moody's B3 rating and Standard & Poor's B rating. The debt is one of the biggest gainers and losers among 188 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. Headquartered in Beachwood, Ohio, John Maneely Company manufactures steel pipe, hollow structural steel, electrical conduit products and tubular products at ten manufacturing facilities in the U.S. and Canada. The Company is number one or two in its key product areas: HSS, standard pipe and electrical conduit. JMC also enjoys leading market positions in the galvanized mechanical tube and fittings markets. Its products are sold principally to plumbing and electrical distributors. JMC's parent, DBO Holdings, Inc., is approximately 55% owned by the Carlyle Partners IV, LP. KMART CORP: Court Slaps $10 Mil. Fine on Former CEO Conway ---------------------------------------------------------- Reuters reports that Magistrate Judge Steven Pepe on Thursday ordered former Kmart Corporation chief executive, Charles Conaway, to pay more than $10 million for misleading shareholders about Kmart's prospects before its 2002 bankruptcy. Judge Pepe held that Mr. Conaway as chief executive had played a central role in the securities violations and gave false testimony under oath. According to Reuters, the Court fined Mr. Conaway $2.5 million and ordered him to return a $5 million loan and about $2.7 million of interest. The U.S. Securities and Exchange Commission sued Mr. Conaway in 2005, accusing him of duping investors in the management discussion and analysis portion of a third-quarter 2001 securities filing and during a November 27, 2001, conference call. According to the Commission, Mr. Conaway failed to tell investors that Kmart faced a cash shortage and was delaying payments to vendors in the months before it filed for bankruptcy. A federal jury in June 2009 found Mr. Conaway hid information about Kmart's cash shortage, aiding and abetting Kmart's misstatements. The Troubled Company Reporter on January 22, 2010, said Mr. Conaway lost a bid to reverse that 2009 jury verdict. Reuters relates that Judge Pepe denied the SEC's request to bar Mr. Conaway from serving as an officer or director of a public company. According to Reuters, Scott Lassar, Esq., a partner at Sidley Austin in Chicago who represents Mr. Conaway, said his client planned to appeal the verdict and the penalty. "Mr. Conaway did not get a dime from Kmart that he did not earn, and there were no ill-gotten gains," Mr. Lassar said, according to Reuters. Mr. Lassar, Reuters continues, also referred to a 2005 arbitration panel decision finding no basis to hold Mr. Conaway personally liable for Kmart's problems. Kmart Corporation is a predecessor operating company of Kmart Holding. In January 2002, Kmart Corp. and 37 of its U.S. subsidiaries filed voluntary petitions for reorganization under Chapter 11 of the federal bankruptcy laws. The Debtors emerged from bankruptcy on May 6, 2003, pursuant to the terms of an Amended Joint Plan of Reorganization. Kmart completed its merger with Sears, Roebuck and Co. on March 24, 2005. LAMAR MEDIA: S&P Raises Rating on Subordinated Notes to 'B+' ------------------------------------------------------------ Standard & Poor's Ratings Services revised its recovery rating on Baton Rouge, La.-based Lamar Media Corp.'s subordinated notes to '4', indicating S&P's expectation of average (30% to 50%) recovery for noteholders in the event of a payment default, from '5'. At the same time, S&P raised its issue-level rating on these securities to 'B+' (at the same level as its 'B+' corporate credit rating on the company) from 'B', in accordance with S&P's notching criteria for a '4' recovery rating. S&P affirmed its other existing ratings on Lamar Media Corp. and parent company Lamar Advertising Co., including the 'B+' corporate credit rating. S&P's ratings are based on the consolidated creditworthiness of the parent. "The revised recovery rating reflects S&P's expectation for a smaller decrease in cash flow in its simulated default scenario than S&P had previously factored," said Standard & Poor's credit analyst Ariel Silverberg. "This is due to a moderation of S&P's previous assumption of a rapid and severe decline in cash flow resulting from a weak and uncertain advertising environment, in light of the company's performance in 2009. The resulting increase in net enterprise value versus S&P's previous analysis was sufficient enough to improve the recovery prospects for holders of the subordinated debt to warrant the change in recovery rating." The 'B+' corporate credit rating reflects the company's high debt leverage, heavy term loan amortization burden, and aggressive financial policy. Lamar's strong position in small-to-midsize outdoor advertising markets, its consistently high EBITDA margin, and S&P's expectation for continued positive discretionary cash flow generation over the intermediate term somewhat temper the company's weaknesses. LAS VEGAS SANDS: Bank Debt Trades at 13% Off in Secondary Market ---------------------------------------------------------------- Participations in a syndicated loan under which Las Vegas Sands Corp. is a borrower traded in the secondary market at 87.30 cents- on-the-dollar during the week ended Friday, Feb. 26, 2010, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 1.88 percentage points from the previous week, The Journal relates. The Company pays 175 basis points above LIBOR to borrow under the facility. The bank loan matures on May 1, 2014, and carries Moody's B3 rating and Standard & Poor's B- rating. The debt is one of the biggest gainers and losers among 188 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. Based in Las Vegas, Nevada, Las Vegas Sands Corp. (NYSE: LVS) -- http://www.lasvegassands.com/-- owns and operates The Venetian Resort Hotel Casino, The Palazzo Resort Hotel Casino, and an expo and convention center. The company also owns and operates the Sands Macao, the first Las Vegas-style casino in Macao, China. As reported by the TCR on Aug. 4, 2009, Moody's placed Las Vegas Sands Corp.'s ratings, including its 'B3' Corporate Family Rating, on review for possible downgrade. Moody's cited weak operating results and heightened concern regarding the Company's ability to maintain compliance with financial covenants, among other things. The Company also carries 'B-' issuer credit ratings from Standard & Poor's. LAS VEGAS TV: Files for Chapter 11 in Nevada -------------------------------------------- Las Vegas TV Partners LLC filed for Chapter 11 on February 26 (Bankr. D. Nev. Case No. 10-13140). The Chapter 11 petition says that assets are between $1 million and $10 million, while debts range from $10 million to $50 million. Stephen R. Harris, Esq., at Belding, Harris & Petroni, Ltd., represents the Debtor in its Chapter 11 effort. Las Vegas TV said it plans to restructure its debt and "create a healthier business model". According to LasVegasNOW.com, Station Manager and Sales Director Lisa Amerson Lychock said in a statement, "Our dedicated employees will retain their jobs and benefits, our advertisers will continue to receive top quality customer service for their investment and we will continue to maintain and seek top quality programming opportunities for our loyal, committed viewers and advertisers." Las Vegas TV Partners operates the KTUD Vegas TV station. Las Vegas TV Partners LLC is a partnership of Greenspun Broadcasting and Catalyst Investors. The station was previously affiliated with the UPN and WB networks before becoming an independent station in 2006 and adopting the "Vegas TV" name. Last year, the station entered into a sharing agreement with KVBC Channel 3, the Las Vegas NBC affiliate. LEVEL 3 COMMS: Bank Debt Trades at 10% Off in Secondary Market -------------------------------------------------------------- Participations in a syndicated loan under which Level 3 Communications, Inc., is a borrower traded in the secondary market at 90.04 cents-on-the-dollar during the week ended Friday, Feb. 26, 2010, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 0.58 percentage points from the previous week, The Journal relates. The Company pays 225 basis points above LIBOR to borrow under the facility. The bank loan matures on March 1, 2014, and carries Moody's B3 rating and Standard & Poor's B- rating. The debt is one of the biggest gainers and losers among 188 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. Headquartered in Broomfield, Colorado, Level 3 Communications, Inc., is a publicly traded international communications company with one of the world's largest communications and Internet backbones. Level 3 Communications carries a 'Caa1' corporate family rating, and 'Caa2' probability of default rating, with negative outlook from Moody's, a 'B-' issuer default rating from Fitch, and 'B-' long term issuer credit ratings from Standard & Poor's. LEVI STRAUSS: Moody's Affirms Corporate Family Rating at 'B1' ------------------------------------------------------------- Moody's Investors Service affirmed Levi Strauss & Co.'s Corporate Family & Probability of Default ratings at B1 and revised the rating outlook to stable from positive. LS&Co's rating outlook was revised to stable as Moody's expects the company's financial leverage to remain high for the near to intermediate term, representing a credit profile more representative of its current rather than a higher rating. "The company's operating margins have experienced erosion, primarily in its European business, and as it continues to invest in retail activities", stated Scott Tuhy, Senior Analyst at Moody's. "Weaker performance has also arisen to a lesser extent from underperformance of its Dockers brands", Tuhy added. While Moody's expects near term positive impacts on revenues from acquisitions undertaken in the past year, the rating firm also expects the company's operating margins will remain pressured. At the same time as the company is increasing capital expenditures for the near term, and is also expected to maintain a dividend payment, thus Moody's does not anticipate material deleveraging. LS&Co's B1 rating reflects the company's high financial leverage and good market position in the highly competitive denim and casual slacks categories. The company's ratings also reflect its solid liquidity profile with significant cash balances, ample undrawn committed credit facilities, and limited near term debt maturities. These ratings were affirmed: -- Corporate Family Rating at B1 -- Probability of Default Rating at B1 -- Senior Unsecured Notes at B2 (LGD 4, 66%) Moody's last rating action on Levi Strauss & Co was on April 27, 2009, when the company's B1 rating with a positive outlook was affirmed. San Francisco, CA based Levi Strauss & Co. markets apparel products in more than 110 countries primarily under the "Levi's", "Dockers" and "Signature by Levi Strauss" brands. The company had global net revenues of approximately $4.1 billion for the year ending November 29, 2009. LIBERTY MEDIA: Moody's Retains 'B1' Corporate Family Rating ----------------------------------------------------------- Moody's Investors Service indicated that Liberty Media LLC's B1 Corporate Family Rating, B1 senior unsecured note ratings, SGL-1 speculative-grade liquidity rating and stable rating outlook are not affected by Liberty Media Corporation's (Liberty's parent) announcement that it intends to transfer/reattribute approximately $1.9 billion of assets and liabilities, including $807 million of cash, to Liberty Interactive from Liberty Capital. For further information, see the issuer comment posted to www.moodys.com. Moody's last rating on action Liberty occurred on November 20, 2009, when it lowered the company's CFR to B1 from Ba2, Probability of Default Rating to Ba3 from Ba2, and senior unsecured note rating to B1 from Ba2, concluding the review for possible downgrade initiated on September 3, 2008. Liberty's ratings were assigned by evaluating factors that Moody's considers relevant to the credit profile of the issuer, such as the company's (i) business risk and competitive position compared with others within the industry; (iii) capital structure and financial risk; (iii) projected performance over the near to intermediate term; and (iv) management's track record and tolerance for risk. Moody's compared these attributes against other issuers both within and outside Liberty's core industry and believes Liberty's ratings are comparable to those of other issuers with similar credit risk. Liberty, headquartered in Englewood, Colorado, is a holding company that owns and operates a broad range of electronic retailing, communications, and entertainment businesses and also owns equity and debt positions in wide variety of technology, media and telecommunications companies. Annual revenue is approximately $10 billion. LINENS 'N THINGS: Bankruptcy Converted to Chapter 7 --------------------------------------------------- Law360 reports that a federal judge has converted Linens 'N Things' bankruptcy proceedings to Chapter 7 liquidation based on the company's concerns that it would not be able to collect enough cash to implement its confirmed Chapter 11 plan. Headquartered in Clifton, New Jersey, Linens 'n Things, Inc. -- http://www.lnt.com/-- was the second largest specialty retailer of home textiles, housewares and home accessories in North America. As of Sept. 30, 2008, Linens 'n Things operated 411 stores in 47 states and seven provinces across the United States and Canada. Linens 'n Things was acquired by private equity firm Apollo Management in 2006. On May 2, 2008, these Linens entities filed Chapter 11 petition (Bankr. D. Del.): Linens Holding Co. (08-10832), Linens 'n Things, Inc. (08-10833), Linens 'n Things Center, Inc. (08-10834), Bloomington, MN., L.T., Inc. (08-10835), Vendor Finance, LLC (08- 10836), LNT, Inc. (08-10837), LNT Services, Inc. (08-10838), LNT Leasing II, LLC (08-10839), LNT West, Inc. (08-10840), LNT Virginia LLC (08-10841), LNT Merchandising company LLC (08-10842), LNT Leasing III, LLC (08-10843), and Citadel LNT, LLC (08-10844). Judge Christopher S. Sontchi presides over the case. Mark D. Collins, Esq., John H. Knight, Esq., and Jason M. Madron, Esq., at Richards, Layton & Finger, P.A., are Linens 'n Things' bankruptcy counsel. The Debtors' special corporate counsel are Holland N. O'Neil, Esq., Ronald M. Gaswirth, Esq., Stephen A. McCaretin, Esq., Randall G. Ray, Esq., and Michael S. Haynes, Esq., at Morgan, Lewis & Bockius, LLP. The Debtors' restructuring management services provider is Conway Del Genio Gries & Co., LLC. The Debtors' CRO and Interim CEO is Michael F. Gries, co-founder of Conways Del Genio Gries & Co., LLC. The Debtors' claims agent is Kurtzman Carson Consultants, LLC. The Debtors' consultants are Asset Disposition Advisors, LLC, and Protivit, Inc. The Debtors' investment bankers are Financo, Inc., and Genuity Capital Markets. LNR PROPERTY: Bank Debt Trades at 16% Off in Secondary Market ------------------------------------------------------------- Participations in a syndicated loan under which LNR Property Corp. is a borrower traded in the secondary market at 83.79 cents-on- the-dollar during the week ended Friday, Feb. 26, 2010, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 1.54 percentage points from the previous week, The Journal relates. The Company pays 275 basis points above LIBOR to borrow under the facility. The bank loan matures on July 11, 2011, and carries Moody's Ca rating and Standard & Poor's CCC rating. The debt is one of the biggest gainers and losers among 188 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. LNR Property Corp. -- http://www.lnrproperty.com/-- is a real estate investment and management company spun off from homebuilding giant Lennar in 1997. LNR owns and manages a portfolio of real estate properties and real estate finance investments (unrated and junk-grade commercial mortgage-backed securities and collateralized debt obligations, high-yield mortgage loans, and mezzanine financing). Its LandSource Communities Development joint venture with Lennar develops and sells homes as well as land for residential or commercial use; it owns Newhall Land and Farming. LandSource declared bankruptcy in 2008, a victim of the housing downturn. LNR is a subsidiary of Cerberus Capital Management, which owns a 75% stake in the company through LNR Property Holdings. As reported by the Troubled Company Reporter on Sept. 18, 2009, Moody's Investors Service downgraded the ratings of LNR Property Corporation's senior bank credit facility and corporate family rating to B3 from B2, and placed the ratings under review for possible downgrade. The downgrade reflects the accelerated deterioration in asset quality of the company's CMBS and real estate investments as a result of the pressures on commercial real estate fundamentals and the credit markets. LODGIAN INC: Posts $52.4 Million Net Loss in 2009 ------------------------------------------------- On February 25, 2010, Lodgian, Inc., released its results for the fourth quarter and full-year ended December 31, 2009. The Company reported a net loss attributable to common shares of $52.4 million, or $2.46 per share, for the year ended December 31, 2009, compared to a net loss of $12.0 million, or $0.55 per diluted share in 2008. EBITDA from continuing operations hotels declined to $(2.5) million, compared to $40.2 million the prior year, due largely to the previously discussed impairment losses. Adjusted EBITDA for the same properties decreased from $45.8 million in 2008 to $28.3 million in 2009. Adjusted EBITDA margins for the 33 continuing operations hotels decreased 500 basis points to 15.0% for the 2009 full year due to the significant revenue decline. 2009 total revenue for continuing operations hotels declined 17.4% to $188.5 million from $228.2 million in 2008. Occupancy decreased 9.9% to 63.1%, while average daily rate decreased 9.0% to $96.56 in 2009. Loss from continuing operations was $50.3 million, compared to $8.0 million in 2008, due to impairment losses of $30.7 million recorded during 2009 compared to $4.5 million of impairment losses recorded during 2008, as well as the significant decline in revenue. Fourth Quarter Results For the fourth quarter ended December 31, 2009, net loss attributable to common shares was $2.3 million, or $0.11 per share, compared to a net loss of $4.7 million, or $0.22 per share in the 2008 fourth quarter. The lower net loss in the 2009 fourth quarter was due to net income from discontinued operations of $5.7 million, which was driven by a net $6.1 million gain on property sales. EBITDA from continuing operations hotels declined $(3.7) million to $3.7 million, compared to the prior year's fourth quarter. Adjusted EBITDA for the same properties decreased from $8.8 million in the fourth quarter of 2008 to $4.0 million in the 2009 fourth quarter. Adjusted EBITDA margins for the 33 continuing operations hotels declined 750 basis points to 9.7% during the 2009 fourth quarter, compared to the 2008 fourth quarter, due to the significant decline in revenue. Fourth quarter 2009 total revenue for the Company's 33 continuing operations hotels declined approximately 18.2% to $41.8 million, compared to the 2008 fourth quarter. Occupancy decreased 10.6% to 57.2%, while average daily rate decreased 9.1% to $90.56 in the 2009 fourth quarter. Loss from continuing operations was $8.4 million, compared to a loss of $4.9 million in the 2008 fourth quarter. "Competition remains fierce as hotels in segments above the hotels in our portfolio continue to discount deeply to attract our guests," said Dan Ellis, Lodgian president and chief executive officer. "This has especially impacted our contract business. This pricing war, combined with a very strong 2008 fourth quarter in which we outperformed the industry, impacted our continuing operations hotels' RevPAR, which was down 18.2%, compared to an industry average of 11.7%. Our RevPAR market share declined to 98.9%, compared to 102.5% in the previous year's fourth quarter. We continue to compete aggressively, but will not take on business solely for the sake of revenue when there is essentially no profit." Pending Merger Transaction As previously disclosed on January 22, 2010, the Company entered into a definitive agreement to be acquired by LSREF Lodging Investments, LLC, in a transaction valued at approximately $270 million, including assumed debt. Under the terms of the agreement, the purchaser will acquire all of the outstanding common stock of Lodgian for $2.50 per share in an all-cash transaction. The price represents a premium of approximately 67.% over Lodgian's average closing share price during the trading period of one calendar month prior to January 15, 2010, and 64.3% over Lodgian's average closing share price during the trading period of six calendar months prior to January 15, 2010. Lodgian's Board of Directors has unanimously approved the merger agreement and has recommended approval of the transaction by Lodgian shareholders. Asset Disposition Program During the year, Lodgian sold five hotels for gross proceeds of $21.9 million. Of the proceeds, $6.8 million was used for debt reduction and the remainder for general corporate purposes. As of December 31, 2009, one property remains classified as held for sale. Balance Sheet At December 31, 2009, the Company's unaudted consolidated balance sheets showed $453.0 million in total assets, $319.7 million in total liabilities, and $133.3 million in total stockholders' equity. The Company's consolidated balance sheets at December 31, 2009, also showed strained liquidity with $58.0 million in total current assets available to pay $134.6 milion in total current liabilities. At year-end 2009, Lodgian had $31.8 million in unrestricted and restricted cash on its balance sheet, as well as $6.2 million held by lenders for various capital expenditure projects. A full-text copy of the press release is available at no charge at http://researcharchives.com/t/s?5556 A copy of the conference call script announcing the release of the fourth quarter and full year results for 2009 is available at no charge at http://researcharchives.com/t/s?5555 Going Concern Doubt In the fourth quarter of 2009, the Company surrendered the Crowne Plaza in Worcester, Massachusetts to a receiver appointed by the lender. On February 16, 2010, the Company disclosed that it was surrendering the six hotels in the Merrill Lynch Fixed Rate Pool #3 to a receiver. The debt associated with these six hotels was $45.5 million as of December 31, 2009. The Company has $56 million of mortgage debt maturing in 2010, comprising two single-asset mortgages and the Merrill Lynch Fixed Rate Pool 1. With respect to the Merrill Lynch Fixed Rate Pool 1, which is the largest maturity in 2010 with a principal balance of $34.5 million, the Company discloses that Jones Lang LaSalle continues to pursue refinancing options for this pool on the Company's behalf. As of December 31, 2009, the current portions of the Company's long-term liabilities were re-classified to current liabilities. Specifically, the Merrill Lynch Fixed Rate #1 Loan of $34.5 million, which matures in July, has been classified as a current liability. "As a result of these re-classifications, as of December 31, the Company's current liabilities significantly exceeded its current assets," said James MacLennan, the Company's chief financial officer, during the conference call. "This situation raises the issue of the company's ability to continue as a going concern. Therefore, management expects that Deloitte's opinion, that will accompany our 10-K filing next month, will include "going concern" language," Mr. MacLennan reported. About Lodgian, Inc. Lodgian, Inc. (NYSE Amex Equities: LGN) -- http://www.lodgian.com/ -- is one of the nation's largest independent hotel owners and operators. The Company currently owns and manages a portfolio of 28 hotels with 5,359 rooms located in 19 states. Of the Company's 28-hotel portfolio, 14 are InterContinental Hotels Group brands (Crowne Plaza, Holiday Inn, Holiday Inn Select and Holiday Inn Express), 8 are Marriott brands (Marriott, Courtyard by Marriott, SpringHill Suites by Marriott, Residence Inn by Marriott and Fairfield Inn by Marriott), two are Hilton brands, and four are affiliated with other nationally recognized franchisors including Starwood, Wyndham, and Carlson. LYONDELL CHEMICAL: Amends Ch. 11 Plan Due to BoNY Settlement ------------------------------------------------------------ Lyondell Chemical Company and its debtor affiliates filed with the United States Bankruptcy Court for the Southern District of New York a Third Amended Joint Plan of Reorganization dated February 16, 2010. The 3rd Amended Plan was filed as an exhibit to the Debtors' settlement agreement with The Bank of New York Mellon and the Bank of New York Mellon Trust Company, N.A. Under the 3rd Amended Plan, modifications were made in a manner consistent with the terms agreed to in the BoNY Settlement Pact, Deryck A. Palmer, Esq., at Cadwalader, Wickersham & Taft LLP, in New York, explains. BoNY is the indenture trustee for the holders of certain notes aggregating (a) $100 million issued by Lyondell Chemical Company, as predecessor-in-interest of ARCO Chemical Company, and (b) $225 million issued by Equistar Chemicals, LP. On the effective date of the 3rd Amended Plan, Reorganized LyondellBasell will implement the BoNY Settlement along with the Lender Litigation Settlement they entered into with the Financing Party Defendants. The Financing Party Defendants are Citibank, N.A.; Citibank International plc; Citigroup Global Markets Inc.; Goldman Sachs Credit Partners, L.P.; Goldman Sachs International; Merrill, Lynch, Pierce, Fenner & Smith; Merrill Lynch Capital Corporation; ABN AMRO Inc.; ABN AMRO Bank N.V.; UBS Securities, LLC; UBS Loan Finance LLC; LeverageSource III S.a.r.l., in its individual capacity; Ares Management; Bank of Scotland; DZ Bank AG; Kohlberg Kravis Roberts & Co.; and UBS AG. According to the 3rd Amended Plan, in full and complete satisfaction, settlement and release of their claims against the "Obligor Non-Debtors," if any, and pursuant to distributions in connection with the Debtors' global restructuring and pursuant to the Amended Plan, each holder of a Senior Secured Claim will receive its pro rata share of 100% of the Class A Shares allocable to the value of Debtor LyondellBasell Industries AF. S.C.A. and non-Debtor LyondellBasell Industries Holdings B.V. and any of their direct and indirect subsidiaries, subject to dilution on account of an equity plan for certain employees of the Reorganized Debtors and the warrants to be issued to holders of Class 5 Claims on the Effective Date. The Obligor Non-Debtors refer to non-debtor affiliates of the Debtors that are obligors, issuers, borrowers or guarantors under a December 20, 2007 Senior Secured Credit Agreement and a December 20, 2007 Bridge Loan Agreement and an August 10, 2005 indenture among LBI, the guarantor parties, Wilmington Trust Co. as trustee for 8.375% senior notes due 2015 in the principal amounts of $615 million and EUR500 million issued pursuant to the 2015 Notes Indenture. A list of the Obligor Non-Debtors is available for free at: http://bankrupt.com/misc/Lyondell_ObligorNonDebtors.pdf Mr. Palmer explains that a pro rata allocation under the BoNY Settlement will be used to determine the aggregate distributions allocable to each of these subcategories of Senior Secured Claims: (i) claims arising under the Senior Secured Credit Agreement, (ii) claims arising under the Secured Hedge Agreements, (iii) claims arising under the Arco Notes, and (iv) claims arising under the Equistar Notes. Global Restructuring On or prior to the Effective Date, these transactions will be effectuated in conjunction with the Amended Plan: (1) LyondellBasell Industries N.V. or New Topco and LyondellBasell Holdings B.V, a newly created, wholly owned subsidiary of New Topco will be formed outside the existing corporate structure of LyondellBasell. (2) LBIH will sell its single share of LBI to non-Debtor Basell Funding S.a.r.l. (3) LBI will transfer its Claims against the Obligor Non- Debtors Basell Finance Company B.V. and LBIH to the holders of the Senior Secured Claims. The holders of the claims under the Senior Secured Credit Agreement will transfer their claims against the Obligor Non-Debtors and Debtor Basell Germany Holdings GmbH to LBHBV in exchange for all of the outstanding stock of LBHBV. The holders of Senior Secured Claims will transfer all of the stock of LBHBV to New Topco in exchange for Class A Shares of New Topco and any other consideration they are to receive under the Amended Plan other than subscription rights. Citibank, N.A. as security agent under an intercreditor agreement dated December 20, 2007, among LBI, the Obligor Debtors and Obligor Non-Debtors, Deutsche Bank Trust Company America, Merrill Lynch Capital Corporation, BoNY, and other parties will sell the stock of LBIH to LBHBV for EUR10 in Cash. The vote of the Senior Secured Lenders on the Amended Plan will be deemed to be a direction to Citibank to make that sale. All guarantee claims and liens against Obligor Non-Debtors under the 2015 Notes Indenture and the Bridge Loan Agreement will be released. . Obligor Debtors are those Debtors that are obligors, issuers, borrowers or guarantors under the Senior Secured Credit Agreement, the Bridge Loan Agreement and the 2015 Notes Indenture, but are not Schedule III Debtors. A list of the Obligor Debtors is available for free at: http://bankrupt.com/misc/Lyondell_ObligorDebtors.pdf A list of the Schedule III Debtors is available for free at http://bankrupt.com/misc/Lyondell_SchedIIIDebtors.pdf (4) Debtor LyondellBasell Finance Company will cancel its existing stock and will issue new capital stock to New Topco. (5) LBFC may assign a portion of an LCC/LBFC Intercompany Note to New Topco in consideration for cash and a portion of the Class A Shares. New Topco will transfer the remaining Class A Shares on account of Claims against the U.S. Debtors to LBFC as a capital contribution. LBFC in turn will transfer Class A Shares to each entity that is an obligor with respect to these Claims in proportion to the outstanding debt issued, and these obligors will immediately distribute the Class A Shares to the applicable holders of Claims. The value of Class A Shares distributed to the holders of Claims against the U.S. Debtors will be equal to the net value of the U.S. Debtors. LCC/LBFC Intercompany Note refers to an intercompany note in the approximate amount of $7.2 billion owed by Lyondell Chemical to LBFC. (6) LBFC will contribute as capital to Lyondell Chemical the remainder of the LCC/LBFC Intercompany Note. (7) LBI, Debtor Basell Funding S.a.r.l. and LyondellBasell AF GP S.a.r.l. will be dissolved post-emergence in accordance with applicable law. Millennium Custodial Trust Mr. Palmer notes that on or before the Effective Date, a Millennium Custodial Trust will be formed pursuant to a Millennium Custodial Trust Agreement and the filing of a certificate of trust with the Delaware Secretary of State. The Delaware Trustee and the Millennium Trust Trustee will be appointed by the Debtors to administer the Millennium Custodial Trust. On the Effective Date, Equistar will transfer all of its Equity Interests in Quantum Pipeline Company, Equistar Polypropylene, LLC, Equistar Transportation Company, LLC and Equistar Funding Corporation, the former subsidiaries of Equistar, to Millennium Chemicals Inc. On the Effective Date, certain Debtors, including certain of MCI's subsidiaries, will transfer certain real property to the Environmental Custodial Trust. Subsequently, Lyondell Chemical will transfer all of its Equity Interests in MCI to the Millennium Custodial Trust. By virtue of Lyondell Chemical's transfer of its Equity Interests in MCI to the Millennium Custodial Trust, MCI's Subsidiaries, including the Former Equistar Subsidiaries, will be transferred to the Millennium Custodial Trust. The holders of Allowed Claims against MCI will receive the Millennium Custodial Trust Interests, which will entitle each holder to its Pro Rata Share of recoveries with respect to the Millennium Trust Assets, including any recovery by MCI from its direct and indirect ownership of the MCI Subsidiaries. Intercompany Agreements Within 90 days of the Effective Date, the Millennium Trust Trustee will review all executory contracts and unexpired leases that exist between any of the Schedule III Debtors and will determine whether to assume or reject these contracts. Any claims arising from the assumption or rejection of these contracts will be Schedule III Intercompany Claims that will be treated in accordance with the Amended Plan and payments, if any, will be directed by the Millennium Trust Trustee. All executory contracts and unexpired leases that exist between any of the Schedule III Debtors and a Reorganized Debtor or a Non-Debtor Affiliate will be deemed rejected as of the Effective Date, and any claims arising from the rejection will be Schedule III Intercompany Claims that will be treated in accordance with the Amended Plan, and the Schedule III Intercompany Claims will be discharged and waived. Exculpation and Release As of the confirmation date of the Plan, the Debtors and their directors, professionals and agents will be deemed to have solicited acceptances of the Amended Plan in good faith and in compliance with the applicable provisions of the Bankruptcy Code. Moreover, these parties and their employees will not have or incur any liability to any holder of any Claim or Equity Interest or any other Person for any act or omission taken or not taken in good faith in connection with the Debtors' Chapter 11 cases, the Disclosure Statement, the Amended Plan, the DIP Credit Agreement, the solicitation of votes for and the pursuit of confirmation of the Plan: * the Debtors, * the Reorganized Debtors, * the Ad Hoc Group of Senior Secured Lenders, * current and former agents under the Senior Secured Credit Agreement and the Bridge Loan Agreement, * the Senior Secured Credit Agreement Lenders, * UBS AG, Stamford Branch and Citibank N.A., collectively referred to as the DIP Agent, * the DIP Lenders, * LeverageSource (Delaware) LLC, an affiliate of Apollo Management VII, L.P., AI LBI Investment LLC, an affiliate of Access Industries, and Ares Corporate Opportunities Fund III, L.P., the Rights Offering Sponsors, * the Bridge Loan Agreement lenders, * ABN AMRO Incorporated, Citigroup Global Markets Inc., Goldman Sachs Credit Partners L.P., Merrill Lynch, Pierce, Fenner & Smith Incorporated and UBS Securities LLC, and their affiliates, as Joint Lead Arrangers and Joint Bookrunners and in all other capacities under the Senior Secured Credit Agreement and the Bridge Loan Agreement, * holders of ARCO Notes and Equistar Notes, * BoNY, * the Creditors Committee, * Citibank as security agent under the Intercreditor Agreement, and * and the Disbursing Agent under the Amended Plan. Except for acts or omissions constituting willful misconduct or gross negligence or bad faith as determined by a final order; and in all respects, these parties will be entitled to rely upon the advice of counsel with respect to their duties and responsibilities under the Amended Plan. Similarly, upon the occurrence of the Effective Date, the Debtors, the Reorganized Debtors or their authorized representative will be deemed to unconditionally and forever release, waive and discharge all Causes of Action in connection with or related to the Debtors, their Chapter 11 cases, the Amended Plan against the Parties subject to exculpation under the Amended Plan. However, unless the United States Government or any of its agencies or any state and local authority has agreed otherwise, nothing in the Confirmation Order or the Plan (i) will effect a release of any claim by the United States Government or any of its agencies or any state and local authority whatsoever, including, any claim arising under the Internal Revenue Code, federal securities laws, the environmental laws or any criminal laws of the United States or any state and local authority against the parties; (ii) enjoin the United States or any state or local authority from bringing any claim, suit, action or other proceedings against the Released Parties for any liability whatever, including, any claim, suit or action arising under the Internal Revenue Code, federal securities laws, the environmental laws or any criminal laws of the United States or any state or local authority; or (iii) exculpate any party from any liability to the United States Government or any of its agencies or any state and local authority whatsoever, including any liabilities arising under the Internal Revenue Code, federal securities laws, the environmental laws or any criminal laws of the United States or any state and local authority against the Released Parties. Modified Claims Treatment The Amended Plan also modified treatment of certain classes: (1) Class 4 Senior Secured Claims will receive in full and complete satisfaction, settlement and release of and in exchange for the Allowed Claim against the Debtors: (a) its Pro Rata Share of 100% of Class A Shares based on the net value allocable to LBFC and its direct and indirect subsidiaries, less the number of Class A Shares provided to holders of Allowed Claims who receive a distribution in Classes 5 and 7-C, and subject to dilution on account of the Equity Compensation Plan and the New Warrants. Holders of ARCO/Equistar Claims will receive an additional amount of Class A Shares and rights to purchase Class B Shares in the Rights Offering, the combined value of which will equal the product of $300 million and ratio of the total Allowed ARCO/Equistar Claims to total Allowed Class 4 Claims; (b) the right to purchase its Rights Offering Pro Rata Share of Class B Shares; and (c) an Allowed Claim in Class 7-C in an amount up to $9.5 billion against each of the Debtors, provided however, that the amount of the Allowed Claim will be limited in amount as provided in the Senior Secured Credit Agreement, Millennium Notes Indenture and Bridge Loan Agreement, as applicable. The Millennium Notes Indenture is an indenture dated November 27, 1996, between Millennium America Inc. and Law Debenture Trust Company of New York, as successor to The Bank of New York, pursuant to which 7.625% senior unsecured notes of Millennium America due 2026 in the principal amount of $241 million were issued. (2) Each of Class 5 Bridge Loan Claims will receive, in full satisfaction, settlement and release of and in exchange for the Allowed Claim against the Debtors: -- an Allowed Claim in Class 7-C against each of the Debtors; provided however, that the amount of that Allowed Claim will be limited in amount as provided in the Senior Secured Credit Agreement, Millennium Notes Indenture and Bridge Loan Agreement, as applicable; -- its Pro Rata Share of 28,195,099 Class A Shares, subject to dilution on account of the Equity Compensation Plan and the New Warrants; and -- its Pro Rata Share of the New Warrants. (3) Each of Class 7-A General Unsecured Claims Against Obligor Debtors will receive, in full satisfaction, settlement and release of and in exchange for the Allowed Claims: -- its Pro Rata Share of Cash totaling $300 million, less an amount of Cash distributed to holders of Allowed Class 8 Claims on a pro rata basis as if the amount of that claimant's Allowed Class 8 Claims were included in Class 7-A; and -- its Pro Rata Share of the Litigation Trust, less the Amount distributed to holders of Allowed Class 8 Claims on a pro rata basis as if the amount of the claimant's Allowed Class 8 Claims were included in Class 7-A. (4) Class 7-B General Unsecured Claims against Obligor Debtors arising from the same primary debt will be allowed against only the Obligor Debtor primarily obligated on that debt, and all other Claims against any other Obligor Debtor based on that primary debt will be deemed disallowed in their entirety without further action on the part of the Debtors. However, if the Court does not approve the consolidation of the Class 7-A Claims, then the Lender Litigation Settlement proceeds will be apportioned as determined by the Bankruptcy Court on or after the confirmation hearing. In that event, the Lender Litigation Settlement proceeds will be subject to a reserve. (5) As to Class 7-C General Unsecured Claims against Schedule III Debtors, the BoNY Settlement Pro Rata Allocation will be used to determine the aggregate distributions allocable to these subcategories of Senior Secured Claims: -- claims arising under the Senior Secured Credit Agreement, -- claims arising under the Secured Hedge Agreements, -- the Arco Notes Claims, and -- the Equistar Notes Claims. In the event that the aggregate allowed amount of Senior Secured Claims in any subcategory is different from the amount assumed to be outstanding in that subcategory for purposes of the BoNY Settlement Pro Rata Allocation, the aggregate distribution to that subcategory will not change, but each holder of an Allowed Senior Secured Claim within that subcategory will be entitled to receive its pro rata share of the distribution to that subcategory, based on the actual aggregate Allowed claims in that subcategory. A breakdown of the estimated unsecured claim recovery for each Schedule III Debtor is available for free at: http://bankrupt.com/misc/Lyondell_SchedIIIUnsecuredClaimsRecvry.pd f A breakdown of the estimated unsecured claim recovery for each Non-Obligor Debtor is available for free at: http://bankrupt.com/misc/Lyondell_EstRecforNon-ObligorDebtors.pdf Non-Obligor Debtors are those Debtors that are not Obligor Debtors or Schedule III Debtors. Other Disclosures The Amended Plan also provides for these terms: (i) No New Third Lien Notes or Cram Down Notes will be distributed under the Amended Plan in increments of less than $1,000. No fractions of New Common Stock, or New Warrants with respect to fractional shares of New Common Stock, or Cash in lieu thereof will be distributed. Cash will not be distributed under the Plan in denominations of less than one $0.01. (ii) All executory contracts and unexpired leases that exist between any of the Reorganized Debtors or the Reorganized Debtors and any Non-Debtor Affiliate will be deemed assumed by the Reorganized Debtor at $0 cure, as of the Effective Date, but the parties reserve the right to agree (a) to a different cure amount and (b) that the amounts owed under a rejected contract will be deemed Intercompany Claims pursuant to the Amended Plan. (iii) On the Effective Date, each of the insurance policies and insurance agreements issued to or entered into by a Debtor or a Debtor's predecessor will be, as applicable, either deemed assumed by the applicable Debtors, Reorganized Debtors or Schedule III Debtors pursuant to Section 365 of the Bankruptcy Code or continued in accordance with its terms in a way that each of the parties' contractual, legal and equitable rights under each Insurance Policy and Insurance Agreement will remain unaltered. Nothing in the Amended Plan, the Plan Supplement or an order confirming the Amended Plan will affect, impair or prejudice the rights and defenses of the Insurers or the Debtors, Reorganized Debtors or other insureds under the Insurance Policies and Insurance Agreements in any manner. (iv) During the pendency of the Debtors' Chapter 11 cases, the sponsorship of certain U.S. Pension Plans has changed, including sponsorship of the (i) Millennium Chemicals Inc. Consolidated Retirement Plan, (ii) Pension Plan for Eligible Hourly Employees of the Millennium Petrochemicals, Inc. Nortech Plant, (iii) Basell Pension Plan, (iv) Basell Retirement Income Plan and (v) Basell Pension Plan for Hourly Employees at Edison New Jersey. Thus, these U.S. Pension Plans will be assumed with the new sponsors; provided that the change in sponsorship has not resulted, and will not result, in any liability for the affected U.S. Pension Plans being removed from the Debtors' controlled group. A full-text copy of the Third Amended Plan is available for free at http://bankrupt.com/misc/Lyondell_ThirdAmendedPlan.pdf Disclosure Statement Hearing Moved to March 8 The Court rescheduled the hearing to consider the adequacy of the Disclosure Statement to March 8, 2010. Prior to this, the Court tentatively rescheduled the Disclosure Statement hearing from February 22, 2010, to March 1. Moreover, the Court states that the February 22, 2010 record date to determine creditors that are entitled to vote on the Amended Plan will be adjusted to coincide more closely with the date that an order is entered approving the Disclosure Statement. About Lyondell Chemical LyondellBasell Industries is one of the world's largest polymers, petrochemicals and fuels companies. It is the global leader in polyolefins technology, production and marketing; a pioneer in propylene oxide and derivatives; and a significant producer of fuels and refined products, including biofuels. Through research and development, LyondellBasell develops innovative materials and technologies that deliver exceptional customer value and products that improve quality of life for people around the world. Headquartered in The Netherlands, LyondellBasell -- http://www.lyondellbasell.com/-- is privately owned by Access Industries. Basell AF and Lyondell Chemical Company merged operations in 2007 to form LyondellBasell Industries, the world's third largest independent chemical company. LyondellBasell became saddled with debt as part of the US$12.7 billion merger. On January 6, 2009, LyondellBasell Industries' U.S. operations and one of its European holding companies -- Basell Germany Holdings GmbH -- filed voluntary petitions to reorganize under Chapter 11 of the U.S. Bankruptcy Code to facilitate a restructuring of the company's debts. The case is In re Lyondell Chemical Company, et al., Bankr. S.D.N.Y. Lead Case No. 09-10023). Seventy-nine Lyondell entities, including Equistar Chemicals, LP, Lyondell Chemical Company, Millennium Chemicals Inc., and Wyatt Industries, Inc. filed for Chapter 11. In May 2009, one of the cases was dismissed -- Case No. 09-10068 -- because it is duplicative of Case No. 09- 10040 relating to Debtor Glidden Latin America Holdings. The Hon. Robert E. Gerber presides over the case. Deryck A. Palmer, Esq., at Cadwalader, Wickersham & Taft LLP, in New York, serves as the Debtors' bankruptcy counsel. Evercore Partners serves as financial advisors, and Alix Partners and its subsidiary AP Services LLC, serves as restructuring advisors. AlixPartners' Kevin M. McShea acts as the Debtors' Chief Restructuring Officer. Clifford Chance LLP serves as restructuring advisors to the European entities. Lyondell Chemical estimated that consolidated assets total US$27.12 billion and debts total US$19.34 billion as of the bankruptcy filing date. Lyondell has obtained approximately US$8 billion in DIP financing to fund continuing operations. The DIP financing includes two credit agreements: a US$6.5 billion term loan, which comprises a US$3.25 billion in new loans and a US$3.25 billion roll-up of existing loans; and a US$1.57 billion asset-backed lending facility. Luxembourg-based LyondellBasell Industries AF S.C.A. and another affiliate were voluntarily added to Lyondell Chemical's reorganization filing under Chapter 11 on April 24, 2009, in order to seek protection against claims by certain financial and U.S. trade creditors. On May 8, 2009, LyondellBasell Industries added 13 non-operating entities to Lyondell Chemical Company's reorganization filing under Chapter 11 of the U.S. Bankruptcy Code. All of the entities are U.S. companies and were added to the original Chapter 11 filing for administrative purposes. The filings will have no impact on current business or operations as none of the entities manufactures or sells products. Bankruptcy Creditors' Service, Inc., publishes Lyondell Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lyondell Chemical Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LYONDELL CHEMICAL: Proposes Settlement With Oil Insurance --------------------------------------------------------- Lyondell Chemical Co. and its affiliates ask the Court to approve a settlement with Oil Insurance Limited. Christopher R. Mirick, Esq., at Cadwalader, Wickersham & Taft LLP, in New York, says that the Settlement will resolve certain outstanding issues between the Parties in connection with the coverage of, and liability under, the Debtors' insurance with Oil Insurance with respect to the damage to the Debtors' various facilities caused by Hurricane Rita in September 2005. Lyondell is a member and insured of Oil Insurance. Oil Insurance provided and continues to provide insurance for certain losses incurred by Lyondell that were part of the Hurricane Rita aggregation event as set forth in the Oil Policy. Under the formula set forth in the Oil Policy, final determination of the amounts payable due to an aggregation event cannot be made until all claims with the aggregation event are resolved. Thus, Oil Insurance and Lyondell wish to partially resolve Lyondell's Rita claim in advance of the Final Determination of all amounts payable due to Rita. Oil Insurance has paid Lyondell an aggregate of $4,429,542 with respect to the Rita Claim; $2,189,099 was paid prior the Petition Date. Oil Insurance's best determination of the ultimate proportionate distribution for Hurricane Rita at this time is 67.52%. Thus, the Parties agreed that: (1) Lyondell's total covered loss with respect to Hurricane Rita is $13,053,713, which is subject to a deductible of $5,000,000. Oil Insurance's full obligation to Lyondell with respect to Hurricane Rita would be $8,053,713; (2) Oil Insurance will pay to Lyondell $1,008,567, which, when added to the Previous Payment will be the product of a Scaling Factor of 67.523% and $8,053,713; (3) Once the Final Determination is made, the Scaling Factor will be adjusted accordingly. If the adjusted Scaling Factor is higher than 67.52%, Oil Insurance agrees to pay Lyondell its proportionate share of the additional funds based on $8,053,713 of otherwise covered total loss. If the adjusted Scaling Factor is lower than 67.52%, Lyondell agrees to pay Oil Insurance the difference between the amount paid in accordance with the 67.523% scaling factor and the adjusted Scaling Factor after Final Determination based on $8,053,713 of covered total loss. Nothing in the Settlement will require Lyondell to pay Oil Insurance an amount greater than the total of the Previous Payment plus the Current Payment less the Prepetition Payment; and (4) the Debtors agreed not to sue, and to release Oil Insurance from any and all causes of action, claims, or demands of any kind that the Debtors have or may have relating to Hurricane Rita. The Debtors maintain that the Settlement will provide finality with respect to their insurance reconciliation efforts and free their resources to pursue more productive tasks. About Lyondell Chemical LyondellBasell Industries is one of the world's largest polymers, petrochemicals and fuels companies. It is the global leader in polyolefins technology, production and marketing; a pioneer in propylene oxide and derivatives; and a significant producer of fuels and refined products, including biofuels. Through research and development, LyondellBasell develops innovative materials and technologies that deliver exceptional customer value and products that improve quality of life for people around the world. Headquartered in The Netherlands, LyondellBasell -- http://www.lyondellbasell.com/-- is privately owned by Access Industries. Basell AF and Lyondell Chemical Company merged operations in 2007 to form LyondellBasell Industries, the world's third largest independent chemical company. LyondellBasell became saddled with debt as part of the US$12.7 billion merger. On January 6, 2009, LyondellBasell Industries' U.S. operations and one of its European holding companies -- Basell Germany Holdings GmbH -- filed voluntary petitions to reorganize under Chapter 11 of the U.S. Bankruptcy Code to facilitate a restructuring of the company's debts. The case is In re Lyondell Chemical Company, et al., Bankr. S.D.N.Y. Lead Case No. 09-10023). Seventy-nine Lyondell entities, including Equistar Chemicals, LP, Lyondell Chemical Company, Millennium Chemicals Inc., and Wyatt Industries, Inc. filed for Chapter 11. In May 2009, one of the cases was dismissed -- Case No. 09-10068 -- because it is duplicative of Case No. 09- 10040 relating to Debtor Glidden Latin America Holdings. The Hon. Robert E. Gerber presides over the case. Deryck A. Palmer, Esq., at Cadwalader, Wickersham & Taft LLP, in New York, serves as the Debtors' bankruptcy counsel. Evercore Partners serves as financial advisors, and Alix Partners and its subsidiary AP Services LLC, serves as restructuring advisors. AlixPartners' Kevin M. McShea acts as the Debtors' Chief Restructuring Officer. Clifford Chance LLP serves as restructuring advisors to the European entities. Lyondell Chemical estimated that consolidated assets total US$27.12 billion and debts total US$19.34 billion as of the bankruptcy filing date. Lyondell has obtained approximately US$8 billion in DIP financing to fund continuing operations. The DIP financing includes two credit agreements: a US$6.5 billion term loan, which comprises a US$3.25 billion in new loans and a US$3.25 billion roll-up of existing loans; and a US$1.57 billion asset-backed lending facility. Luxembourg-based LyondellBasell Industries AF S.C.A. and another affiliate were voluntarily added to Lyondell Chemical's reorganization filing under Chapter 11 on April 24, 2009, in order to seek protection against claims by certain financial and U.S. trade creditors. On May 8, 2009, LyondellBasell Industries added 13 non-operating entities to Lyondell Chemical Company's reorganization filing under Chapter 11 of the U.S. Bankruptcy Code. All of the entities are U.S. companies and were added to the original Chapter 11 filing for administrative purposes. The filings will have no impact on current business or operations as none of the entities manufactures or sells products. Bankruptcy Creditors' Service, Inc., publishes Lyondell Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lyondell Chemical Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LYONDELL CHEMICAL: Reaches Deal With Unsecured Creditors -------------------------------------------------------- LyondellBasell Industries announced that an agreement has been reached that will help pave the way to LyondellBasell's emergence from Chapter 11. The proposed agreement, which remains subject to court approval, final internal approval and final documentation, resolves objections by the Unsecured Creditor's Committee to the company's settlement of the estate's claims against the parties who financed the 2007 leveraged buyout of Lyondell by Basell. That settlement was announced in December 2009. The new agreement increases the amount that will be distributed on the effective date of the Plan to the holders of general unsecured claims, the Millennium Bonds and 2015 Notes from $300 million to $450 million. The additional $150 million is to be paid in the form of reorganized equity which will be funded by reduction in distributions to the holders of Senior Secured Facility and Bridge Loan Claims under the Plan. The dispute between the unsecured creditors and these defendants has been limiting LyondellBasell's ability to complete approval of the disclosure statement and Plan of Reorganization. It is anticipated that this can be accomplished soon. As part of the new agreement, the Unsecured Creditor's Committee, substantial holders of the senior debt and bridge debt and the 2015 Notes Trustee have agreed to support LyondellBasell's Plan. The proposed settlement is not conditioned on the success of any particular proposal to raise new capital for LyondellBasell upon emergence. We will continue to work with all parties to design a confirmable Plan of Reorganization that maximizes value for our creditors while improving the financial stability of the reorganized company. The Plan and Disclosure Statement will be revised to implement the new agreement and the current agreements among various creditor constituents. Among other things, the Plan reflects the agreement among the senior and bridge debt to convert approximately $18 billion of senior and bridge debt into common equity under the Plan and the allocation of such equity in the reorganized LyondellBasell between the holders of such debt upon confirmation of the Plan. About Lyondell Chemical LyondellBasell Industries is one of the world's largest polymers, petrochemicals and fuels companies. It is the global leader in polyolefins technology, production and marketing; a pioneer in propylene oxide and derivatives; and a significant producer of fuels and refined products, including biofuels. Through research and development, LyondellBasell develops innovative materials and technologies that deliver exceptional customer value and products that improve quality of life for people around the world. Headquartered in The Netherlands, LyondellBasell -- http://www.lyondellbasell.com/-- is privately owned by Access Industries. Basell AF and Lyondell Chemical Company merged operations in 2007 to form LyondellBasell Industries, the world's third largest independent chemical company. LyondellBasell became saddled with debt as part of the US$12.7 billion merger. On January 6, 2009, LyondellBasell Industries' U.S. operations and one of its European holding companies -- Basell Germany Holdings GmbH -- filed voluntary petitions to reorganize under Chapter 11 of the U.S. Bankruptcy Code to facilitate a restructuring of the company's debts. The case is In re Lyondell Chemical Company, et al., Bankr. S.D.N.Y. Lead Case No. 09-10023). Seventy-nine Lyondell entities, including Equistar Chemicals, LP, Lyondell Chemical Company, Millennium Chemicals Inc., and Wyatt Industries, Inc. filed for Chapter 11. In May 2009, one of the cases was dismissed -- Case No. 09-10068 -- because it is duplicative of Case No. 09- 10040 relating to Debtor Glidden Latin America Holdings. The Hon. Robert E. Gerber presides over the case. Deryck A. Palmer, Esq., at Cadwalader, Wickersham & Taft LLP, in New York, serves as the Debtors' bankruptcy counsel. Evercore Partners serves as financial advisors, and Alix Partners and its subsidiary AP Services LLC, serves as restructuring advisors. AlixPartners' Kevin M. McShea acts as the Debtors' Chief Restructuring Officer. Clifford Chance LLP serves as restructuring advisors to the European entities. Lyondell Chemical estimated that consolidated assets total US$27.12 billion and debts total US$19.34 billion as of the bankruptcy filing date. Lyondell has obtained approximately US$8 billion in DIP financing to fund continuing operations. The DIP financing includes two credit agreements: a US$6.5 billion term loan, which comprises a US$3.25 billion in new loans and a US$3.25 billion roll-up of existing loans; and a US$1.57 billion asset-backed lending facility. Luxembourg-based LyondellBasell Industries AF S.C.A. and another affiliate were voluntarily added to Lyondell Chemical's reorganization filing under Chapter 11 on April 24, 2009, in order to seek protection against claims by certain financial and U.S. trade creditors. On May 8, 2009, LyondellBasell Industries added 13 non-operating entities to Lyondell Chemical Company's reorganization filing under Chapter 11 of the U.S. Bankruptcy Code. All of the entities are U.S. companies and were added to the original Chapter 11 filing for administrative purposes. The filings will have no impact on current business or operations as none of the entities manufactures or sells products. Bankruptcy Creditors' Service, Inc., publishes Lyondell Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lyondell Chemical Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LYONDELL CHEMICAL: Wins Approval of Settlement With BoNY -------------------------------------------------------- Bankruptcy Judge Robert Gerber entered a formal order on February 17, 2010, authorizing the Debtors' entry into a settlement agreement with The Bank of New York Mellon and the Bank of New York Mellon Trust Company, N.A. BoNY is the indenture trustee for the holders of certain notes aggregating (a) $100 million issued by Lyondell Chemical Company, as predecessor-in-interest of ARCO Chemical Company, and (b) $225 million issued by Equistar Chemicals, LP. To recall, the Court approved the BoNY Settlement on February 11, 2010, subject to changes that allow Lyondell Chemical Company to consider offers other than the then Second Amended Joint Plan of Reorganization based on a rights offering of new stock. Judge Gerber further held that: * In agreeing to the BoNY Settlement, the Debtors acted in good faith and negotiated at arm's-length; * In agreeing to the BoNY Settlement, BoNY acted in compliance with its duties under the ARCO and Equistar Indentures; * BoNY negotiated and agreed to the terms of the BoNY Settlement in good faith and have ascertained the facts pertinent to the BoNY Settlement; * BoNY exercised only those rights and powers vested in it by the ARCO and Equistar Indentures; * BoNY, on behalf of the holders of the ARCO and Equistar Notes, is the sole holder of any and all liens granted by any Debtors pursuant to and in accordance with the Equistar and ARCO Indenture, thus, BoNY is the sole holder of any claim under Section 507(b) of the Bankruptcy Code that may arise in connection with the ARCO and Equistar Notes. * As part of the BoNY Settlement, BoNY has settled any and all claims it may have under Section 507(b). Judge Gerber also acknowledged that at the February 11, 2010 hearing, BoNY and the Debtors agreed to delete a provision in the BoNY Settlement, which stated that any Party's breach of the provisions of the BoNY Settlement would cause irreparable damage to the other Party. Prior to entry of the February 17 order, the Debtors filed with the Court a copy of their Third Amended Joint Plan of Reorganization as an exhibit to the BoNY Settlement. The 3rd Amended Plan contain modifications in a manner consistent with the BoNY Settlement. About Lyondell Chemical LyondellBasell Industries is one of the world's largest polymers, petrochemicals and fuels companies. It is the global leader in polyolefins technology, production and marketing; a pioneer in propylene oxide and derivatives; and a significant producer of fuels and refined products, including biofuels. Through research and development, LyondellBasell develops innovative materials and technologies that deliver exceptional customer value and products that improve quality of life for people around the world. Headquartered in The Netherlands, LyondellBasell -- http://www.lyondellbasell.com/-- is privately owned by Access Industries. Basell AF and Lyondell Chemical Company merged operations in 2007 to form LyondellBasell Industries, the world's third largest independent chemical company. LyondellBasell became saddled with debt as part of the US$12.7 billion merger. On January 6, 2009, LyondellBasell Industries' U.S. operations and one of its European holding companies -- Basell Germany Holdings GmbH -- filed voluntary petitions to reorganize under Chapter 11 of the U.S. Bankruptcy Code to facilitate a restructuring of the company's debts. The case is In re Lyondell Chemical Company, et al., Bankr. S.D.N.Y. Lead Case No. 09-10023). Seventy-nine Lyondell entities, including Equistar Chemicals, LP, Lyondell Chemical Company, Millennium Chemicals Inc., and Wyatt Industries, Inc. filed for Chapter 11. In May 2009, one of the cases was dismissed -- Case No. 09-10068 -- because it is duplicative of Case No. 09- 10040 relating to Debtor Glidden Latin America Holdings. The Hon. Robert E. Gerber presides over the case. Deryck A. Palmer, Esq., at Cadwalader, Wickersham & Taft LLP, in New York, serves as the Debtors' bankruptcy counsel. Evercore Partners serves as financial advisors, and Alix Partners and its subsidiary AP Services LLC, serves as restructuring advisors. AlixPartners' Kevin M. McShea acts as the Debtors' Chief Restructuring Officer. Clifford Chance LLP serves as restructuring advisors to the European entities. Lyondell Chemical estimated that consolidated assets total US$27.12 billion and debts total US$19.34 billion as of the bankruptcy filing date. Lyondell has obtained approximately US$8 billion in DIP financing to fund continuing operations. The DIP financing includes two credit agreements: a US$6.5 billion term loan, which comprises a US$3.25 billion in new loans and a US$3.25 billion roll-up of existing loans; and a US$1.57 billion asset-backed lending facility. Luxembourg-based LyondellBasell Industries AF S.C.A. and another affiliate were voluntarily added to Lyondell Chemical's reorganization filing under Chapter 11 on April 24, 2009, in order to seek protection against claims by certain financial and U.S. trade creditors. On May 8, 2009, LyondellBasell Industries added 13 non-operating entities to Lyondell Chemical Company's reorganization filing under Chapter 11 of the U.S. Bankruptcy Code. All of the entities are U.S. companies and were added to the original Chapter 11 filing for administrative purposes. The filings will have no impact on current business or operations as none of the entities manufactures or sells products. Bankruptcy Creditors' Service, Inc., publishes Lyondell Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lyondell Chemical Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) MEDICOR LTD: Files First Amended Chapter 11 Plan ------------------------------------------------ Law360 reports that MediCor Ltd. has filed an amended liquidation plan that includes millions of dollars in settlements with plaintiffs in a series of securities class actions against the company's officers and directors and a separate deal with its receiver, as well as an agreement between MediCor's unsecured creditors and senior lenders. BankruptcyData relates that according to the Disclosure Statement, the Plan is a Plan of Liquidation, pursuant to which the net proceeds of the prior sale of the Debtors' assets will be distributed to certain holders of allowed claims. In sum, the Plan provides that MediCor's pre-petition senior lenders on account of their pre-petition secured loans in excess of $57 million will receive the distributable cash, along with their pro rata share of certain proceeds of litigation to be pursued by a liquidating trustee appointed under the Plan. Additionally, pursuant to the Plan and a settlement with the senior lenders and committee, holders of allowed general unsecured claims will receive on account of prepetition unsecured indebtedness owed to them by the Debtors, pro rata shares of the following after the payment of the reasonable fees and expenses of a liquidating trustee appointed under the Plan: (i) $700,000 cash, (ii) $ $275,000.00 and (iii) certain proceeds of litigation to be pursued by the liquidating trustee. Under the Plan, administrative expense claims and priority tax claims are unclassified and are to be paid in full or upon such other terms as the Debtors and the affected creditor may agree. Class 1 priority non-tax claims are left unimpaired, and are to be paid in full, or upon such other terms as the Debtors and the affected creditor may agree. Holders of Southwest Exchange claims, inter-Debtor claims, non-debtor subsidiary claims, stock claims and equity interests in the Debtors will receive no distributions. About MediCor Ltd. Headquartered in North Las Vegas, Nevada, MediCor Ltd. -- http://www.medicorltd.com/-- manufactures and markets products primarily for aesthetic, plastic and reconstructive surgery and dermatology markets. The company and seven of its affiliates filed for Chapter 11 protection on June 29, 2007 (Bankr. D. Del. Lead Case No. 07-10877) to effectuate the orderly marketing and sale of their business. Dennis A. Meloro, Esq., and Victoria Watson Counihan, Esq., at Greenberg Traurig, LLP, represent the Debtors' as Delaware counsel. The Debtors engaged Alvarez & Marsal North America, LLC as their restructuring advisor. David W. Carickhoff, Jr., Esq., at Blank Rome LLP represents the Official Committee of Unsecured Creditors as counsel. In its schedules of assets and debts, MediCor Ltd. disclosed total assets of $96,553,019, and total debts of $158,137,507. MGM MIRAGE: Majority of Lenders Agree to 2014 Extension of Loan --------------------------------------------------------------- MGM MIRAGE said lenders representing roughly $4.37 billion of the outstanding commitments under its $5.55 billion senior bank credit facility have entered into an amendment agreement which, subject to certain conditions, will extend the maturity of a portion of the credit facility from October 3, 2011, to February 21, 2014. Pursuant to the Amendment, a restatement of the Company's senior credit facility will become effective upon the making of certain required prepayments and satisfaction of certain documentary conditions provided that these occur no later than June 30, 2010. The Restated Loan Agreement will: * require the Company to make a 20% reduction in credit exposures to lenders which have agreed to extend their commitments, other than lenders which have waived the reduction -- roughly $820 million; * re-tranche the senior credit facility so that roughly $1.4 billion of revolving loans and commitments will be effectively converted into term loans, leaving a revolving credit commitment of $2.0 billion, roughly $400 million of which will mature in October 2011; * require the Company to repay the roughly $1.2 billion owed to lenders who have not agreed to extend their commitments by October 2011; * extend the maturity date for the remaining roughly $3.6 billion under the credit facility through February 21, 2014 (subject to certain conditions); * provide for extension fees and a 100 basis point increase in interest rate for extending lenders; * continue the existing minimum EBITDA and capital expenditure covenants with periodic step-ups during the extension period; and * permit the Company to issue unsecured debt and equity to refinance interim maturities. The Amendment permits the Company to raise up to $850 million through the issuance of secured indebtedness to fund all or a portion of the Required Prepayments. The Amendment also authorizes the Company to transfer its 50% interest in Borgata and related land holdings into a trust as contemplated by a proposed settlement that the Company continues to negotiate with the New Jersey Division of Gaming Enforcement. "This Amendment underscores the tremendous confidence our bank group has in our Company," said Jim Murren, Chairman and Chief Executive Officer of MGM MIRAGE. "The transaction provides us with additional long-term financial flexibility and reflects our continued commitment to strengthen our financial position." "Completing this Amendment represents another important milestone as we continue to improve our balance sheet and enhance our debt maturity profile," said Dan D'Arrigo, Executive Vice President and Chief Financial Officer of MGM MIRAGE. "This is a testament to the strength of our bank relationships and the partnership we have enjoyed with our lenders over the years." Bank of America, N.A. is the administrative agent for the Restated Loan Agreement. The joint lead arrangers for the Restated Loan Agreement are Banc of America Securities LLC, RBS Securities, Inc., J.P. Morgan Securities Inc., Barclays Capital, BNP Paribas Securities Corp., Deutsche Bank Securities Inc., Citibank North America, Inc., Sumitomo Mitsui Banking Corporation, Bank of Scotland Plc, Commerzbank, Wachovia Bank, National Association, Morgan Stanley Senior Funding, Inc. and UBS Securities LLC. About MGM MIRAGE Headquartered in Las Vegas, Nevada, MGM MIRAGE (NYSE: MGM) -- http://www.mgmmirage.com/-- owns and operates 16 properties located in Nevada, Mississippi and Michigan, and has 50% investments in four other properties in Nevada, New Jersey, Illinois and Macau. CityCenter, an urban metropolis on the Las Vegas Strip scheduled to open in late 2009, is a joint venture between MGM MIRAGE and Infinity World Development Corp, a subsidiary of Dubai World. MGM MIRAGE Hospitality has entered into management agreements for future casino and non-casino resorts throughout the world. The Company reported $22.51 billion in total assets, $2.38 billion in total current liabilities, $3.03 billion in deferred income taxes, $12.97 billion in long term debt, and $256.83 million other long term obligation, resulting to a $3.87 billion stockholders' equity as of December 31, 2009. * * * As reported by the Troubled Company Reporter on September 22, 2009, Moody's Investors Service affirmed MGM MIRAGE's Caa2 Corporate Family Rating and Caa3 Probability of Default Rating. Moody's also assigned a Caa2 rating to the company's new $475 million 11.375% senior unsecured notes due 2018. Moody's also affirmed MGM's SGL-4 Speculative Grade Liquidity rating. The rating outlook is negative. As reported by the TCR on September 24, 2009, Fitch Ratings has assigned a 'CCC/RR4' rating to MGM MIRAGE's $475 million 11.375% unsecured notes due 2018. The notes were priced at a 97.396% discount to yield 11.875%. The net proceeds will be used to reduce credit facility borrowings, and also for general corporate purposes. The offering attempts to chip away at the company's most significant credit hurdle: the maturity of its $5.8 billion credit facility in 2011, which had $4.1 billion outstanding as of June 30, 2009. MGM MIRAGE: Sugerman Resigns From Board of Directors ---------------------------------------------------- MGM MIRAGE on Thursday announced the resignation of one of its members of the Board of Directors of the Company, Joseph H. Sugerman, M.D., effective February 25, 2010. Dr. Sugerman has resigned to concentrate on the commitments of his medical practice. Headquartered in Las Vegas, Nevada, MGM MIRAGE (NYSE: MGM) -- http://www.mgmmirage.com/-- owns and operates 16 properties located in Nevada, Mississippi and Michigan, and has 50% investments in four other properties in Nevada, New Jersey, Illinois and Macau. CityCenter, an urban metropolis on the Las Vegas Strip scheduled to open in late 2009, is a joint venture between MGM MIRAGE and Infinity World Development Corp, a subsidiary of Dubai World. MGM MIRAGE Hospitality has entered into management agreements for future casino and non-casino resorts throughout the world. The Company reported $22.51 billion in total assets, $2.38 billion in total current liabilities, $3.03 billion in deferred income taxes, $12.97 billion in long term debt, and $256.83 million other long term obligation, resulting to a $3.87 billion stockholders' equity as of December 31, 2009. * * * As reported by the Troubled Company Reporter on September 22, 2009, Moody's Investors Service affirmed MGM MIRAGE's Caa2 Corporate Family Rating and Caa3 Probability of Default Rating. Moody's also assigned a Caa2 rating to the company's new $475 million 11.375% senior unsecured notes due 2018. Moody's also affirmed MGM's SGL-4 Speculative Grade Liquidity rating. The rating outlook is negative. As reported by the TCR on September 24, 2009, Fitch Ratings has assigned a 'CCC/RR4' rating to MGM MIRAGE's $475 million 11.375% unsecured notes due 2018. The notes were priced at a 97.396% discount to yield 11.875%. The net proceeds will be used to reduce credit facility borrowings, and also for general corporate purposes. The offering attempts to chip away at the company's most significant credit hurdle: the maturity of its $5.8 billion credit facility in 2011, which had $4.1 billion outstanding as of June 30, 2009. MICHAEL LUNSFORD: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Michael G. Lunsford 19991 84th Way Scottsdale, AZ 85255 Bankruptcy Case No.: 10-04769 Chapter 11 Petition Date: February 24, 2010 Court: United States Bankruptcy Court District of Arizona (Phoenix) Debtor's Counsel: Robert M. Cook, Esq. Law Offices Of Robert M. Cook PLLC 219 W Second St Yuma, AZ 85364 Tel: (928) 782-7771 Fax: (928) 782-7778 Email: robertmcook@yahoo.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A full-text copy of Mr. Lunsford's petition, including a list of his 20 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/azb10-04769.pdf The petition was signed by Mr. Lunsford. MONEYGRAM INT'L: Board Approves 3 Employee Incentive Plans ---------------------------------------------------------- The Board of Directors of MoneyGram International, Inc., upon recommendation of the Human Resources and Nominating Committee, on February 17, 2010, approved: -- MoneyGram International, Inc. 2005 Omnibus Incentive Plan, as amended February 17, 2010, subject to approval of the stockholders of the Corporation at its next Annual Meeting of Stockholders. The Omnibus Plan was amended to: (i) increase the aggregate number of shares that may be granted to an Eligible Person in any calendar year under the Omnibus Plan from 10 million to 12 million shares; (ii) an additional provision for Section 162(m) limitations for performance awards denominated in shares; and (iii) clarification regarding performance awards denominated in cash. -- MoneyGram International, Inc. Performance Bonus Plan, as amended and restated February 17, 2010. The Bonus Plan (formerly known as the MoneyGram International, Inc. Amended and Restated Management and Line of Business Incentive Plan) was amended to: (i) change the name of the plan; (ii) to expand the participant eligibility under the Bonus Plan to include professional level employees; and (iii) to change the responsibility for implementation and administration of the Bonus Plan from the Chief Executive Officer to the Executive Vice President, Human Resources and Corporate Services. -- MoneyGram International, Inc. Severance Plan. The Severance Plan sets forth the monetary and outplacement severance benefits the Corporation would provide to an eligible employee based upon the employment level of the individual and their number of years of service with the Corporation. 2009 Financial Results MoneyGram swung to a net income of $18.344 million for the year ended December 31, 2009, from a net loss of $261.385 million for year 2008. Net income for the fourth quarter of 2009 was $28.124 million from $122.861 million for the same period in 2008. Full-year total revenue in 2009 was $1.171 billion, up from $927.1 million in 2008. Total revenue in 2008 included net securities losses of $340.7 million and investment revenue that was $128.9 million more favorable compared with 2009. Total revenue in the fourth quarter 2009 was $296.4 million compared with $319.0 million in the same period in 2008. Fourth quarter 2008 total revenue included net securities gains of $10.2 million and investment revenue that was $27.6 million more favorable compared with 2009. At December 31, 2009, the Company had total assets of $5.879 billion against $5.877 billion in total liabilities, $864.328 million in mezzanine equity and $862.763 million in stockholders' deficit. In the fourth quarter of 2009, MoneyGram paid the remaining $45.0 million outstanding on its revolving credit facility and made a $40.0 million prepayment on its Senior Tranche B Loan under its Senior Facility. In 2009, the Company paid down $186.9 million, or 19%, of its total outstanding debt. The Company ended the year with assets in excess of payment service obligations of $313.3 million. The Company has not filed its annual report on Form 10-K with the Securities and Exchange Commission. A full-text copy of the Company's earnings release is available at no charge at http://ResearchArchives.com/t/s?555b About MoneyGram International Minneapolis, Minnesota, MoneyGram International (NYSE:MGI) -- http://www.moneygram.com/-- offers more control and more choices for people separated by distance or with limited bank relationships to meet their financial needs. MoneyGram helps consumers to pay bills quickly and safely send money around the world in as little as 10 minutes. Its global network is comprised of 180,000 agent locations in nearly 190 countries and territories. MoneyGram's convenient and reliable network includes retailers, international post offices and financial institutions. At December 31, 2009, the Company had total assets of $5.879 billion against $5.877 billion in total liabilities, $864.328 million in mezzanine equity and $862.763 million in stockholders' deficit. MONEYGRAM INT'L: FMR, Fidelity Own 10.114% of Common Stock ---------------------------------------------------------- FMR LLC and Edward C. Johnson 3d disclosed that they may be deemed to beneficially own 8,345,708 shares or roughly 10.114% of the common stock of MoneyGram International. Fidelity Management & Research Company, a wholly owned subsidiary of FMR LLC, is also the beneficial owner of 8,345,708 shares or 10.114% of the MoneyGram 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. Edward C. Johnson 3d and FMR LLC, through its control of Fidelity, and the funds each has sole power to dispose of the 8,345,708 shares owned by the Funds. About MoneyGram International Minneapolis, Minnesota, MoneyGram International (NYSE:MGI) -- http://www.moneygram.com/-- offers more control and more choices for people separated by distance or with limited bank relationships to meet their financial needs. MoneyGram helps consumers to pay bills quickly and safely send money around the world in as little as 10 minutes. Its global network is comprised of 180,000 agent locations in nearly 190 countries and territories. MoneyGram's convenient and reliable network includes retailers, international post offices and financial institutions. At December 31, 2009, the Company had total assets of $5.879 billion against $5.877 billion in total liabilities, $864.328 million in mezzanine equity and $862.763 million in stockholders' deficit. MONEYGRAM INT'L: Guardian Life Owns 13.4% of Common Stock --------------------------------------------------------- The Guardian Life Insurance Company of America, Guardian Investor Services LLC, RS Investment Management Co. LLC, and RS Partners Fund disclosed that as of December 31, 2009, they may be deemed to beneficially own 11,066,848 shares or roughly 13.4% of the common stock of MoneyGram International. The Guardian Life Insurance Company of America is an insurance company and the parent company of Guardian Investor Services LLC and RS Investment Management Co. LLC. Guardian Investor Services LLC is a registered investment adviser, a registered broker- dealer, and the parent company of RS Investment Management Co. LLC. RS Investment Management Co. LLC is a registered investment adviser. About MoneyGram International Minneapolis, Minnesota, MoneyGram International (NYSE:MGI) -- http://www.moneygram.com/-- offers more control and more choices for people separated by distance or with limited bank relationships to meet their financial needs. MoneyGram helps consumers to pay bills quickly and safely send money around the world in as little as 10 minutes. Its global network is comprised of 180,000 agent locations in nearly 190 countries and territories. MoneyGram's convenient and reliable network includes retailers, international post offices and financial institutions. At December 31, 2009, the Company had total assets of $5.879 billion against $5.877 billion in total liabilities, $864.328 million in mezzanine equity and $862.763 million in stockholders' deficit. MONEYGRAM INT'L: To Settle Securities Class Action -------------------------------------------------- MoneyGram International has entered into memoranda of understanding to settle federal securities class and stockholder derivative actions pending in the United States District Court for the District of Minnesota. The claims arise out of the subprime related losses in 2007 and 2008. "We are pleased to be able to enter into these agreements and bring to conclusion these legal proceedings," said Pamela H. Patsley, MoneyGram chairman and CEO. "My goal since joining MoneyGram has been to re-focus the organization on our core business and transform the company into a global market leader. These agreements will put these claims behind us and move MoneyGram another step forward towards the achievement of that goal." Under terms of the securities class action memorandum of understanding, the plaintiffs agree in principle to settle the claims for an $80 million cash payment, all but $20 million of which will be paid by the Company's insurance coverage. The derivative claims memorandum of understanding provides for changes to MoneyGram's business, corporate governance and internal controls, some of which have already been implemented in whole or in part in connection with MoneyGram's recent recapitalization. The memoranda of understanding are subject to negotiation and execution of definitive settlement documents containing usual and customary settlement agreement terms, notice to the class and shareholders, and approval of the Court. MoneyGram's three remaining pre-recapitalization directors, having helped MoneyGram successfully manage the transition of the company's ownership, management and governance and resolve the litigation, have determined not to seek re-election as directors at MoneyGram's annual meeting for the year 2010 in order to ensure a wholly new post-recapitalization board and wholly new audit committee. "MoneyGram is committed to ensuring that its Board of Directors embodies the highest standards of governance and oversight for MoneyGram and its shareholders," added Ms. Patsley. "Our Nominating Committee and board will work to ensure that the MoneyGram Board of Directors and Audit Committee are comprised of directors best suited to uphold these standards." The company has begun a process to identify new director candidates and anticipates nominating candidates for election to the board at the 2010 annual meeting of stockholders. About MoneyGram International Minneapolis, Minnesota, MoneyGram International (NYSE:MGI) -- http://www.moneygram.com/-- offers more control and more choices for people separated by distance or with limited bank relationships to meet their financial needs. MoneyGram helps consumers to pay bills quickly and safely send money around the world in as little as 10 minutes. Its global network is comprised of 180,000 agent locations in nearly 190 countries and territories. MoneyGram's convenient and reliable network includes retailers, international post offices and financial institutions. At December 31, 2009, the Company had total assets of $5.879 billion against $5.877 billion in total liabilities, $864.328 million in mezzanine equity and $862.763 million in stockholders' deficit. NETWORK DEVELOPMENT: Case Summary & 6 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Network Development, LLC 1580 Sparkman Dr., Suite 203 Huntsville, AL 35816 Bankruptcy Case No.: 10-80703 Chapter 11 Petition Date: February 24, 2010 Court: United States Bankruptcy Court Northern District Of Alabama (Decatur) Judge: Jack Caddell Debtor's Counsel: Garland C. Hall, III, Esq. Attorney at Law P.O. Box 2613 Decatur, AL 35602 Tel: (256) 355-1301 Email: gchall3@aol.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $500,001 to $1,000,000 A list of the Company's 6 largest unsecured creditors is available for free at: http://bankrupt.com/misc/alnb10-80703.pdf The petition was signed by Michael Forehand, managing member of the company. NEUMANN HOMES: Court Confirms Plan of Liquidation ------------------------------------------------- Judge Eugene Wedoff of the U.S. Bankruptcy Court for the Northern District of Illinois approved and confirmed on February 17, 2010, the Joint Plan of Liquidation, its modifications and all plan- related exhibits as satisfying Section 1129 of the Bankruptcy Code in the Chapter 11 cases of Neumann Homes Inc. and its debtor affiliates other than the cases of NHI Sky Ranch, LLC and Sky Ranch, LLC. The Confirmation Order came barely six months after the Debtors filed their Plan and Disclosure Statement. The Disclosure statement was previously approved by the Court on December 11, 2009, following a series of amendments. The Debtors stepped Judge Wedoff through the statutory requirements of Sections 1129(a) and (b) necessary to confirm a Chapter 11 plan: A. Section 1129(a)(1) requires that the Plan comply with all applicable provisions of the Bankruptcy Code, which include compliance with Sections 1122 and 1123, governing classification and contents of the Plan. The Debtors' Plan meets those requirements. In addition to administrative claims and priority tax claims, which are not required to be classified, the Plan designates 12 separate classes of claims and interests. Article III of the Plan provides for the separate classification of claims and interests with respect to the Debtors based on differences in the legal nature or priority of those claims and interests. B. The Debtors relate that they complied with the terms of the court orders approving the Disclosure Statement and the Solicitation Procedures, and the applicable provisions of the Bankruptcy Code. Accordingly, the requirements of Section 1129(a)(2) are satisfied. C. Section 1129(a)(3) requires that a plan be proposed in good faith and not by any means forbidden by law. The Debtors maintain that they proposed the Plan in good faith. Consistent with the purpose of Chapter 11 of the Bankruptcy Code, the Plan enables holders of claims to maximize their possible recoveries under the circumstances. The Debtors relate that they are not aware of any viable alternative that would allow them to emerge from Chapter 11 with the recoveries equal to or greater than those projected for creditors under the Plan. D. All payments made or to be made by the Debtors for services or expenses in connection with their Chapter 11 cases are subject to approval of the Court. Section 2.1 of the Plan provides for the payment only of allowed administrative claims, and Article XI of the Plan makes all payments on account of the professionals' requests for compensation or reimbursement for services rendered prior to the effective date subject to the requirements of the Bankruptcy Code and orders of the Court. Accordingly, the Plan complies with the requirements of Section 1129(a)(4). E. Section 1129(a)(5) requires that the proponent of a plan disclose the identity of certain individuals who will hold positions with the debtors or their successors after confirmation. To the extent the requirements of Section 1129(a)(5) apply to the Liquidation Trust Administrator and the Liquidation Trust Advisor Board members, the Debtors disclosed the identity of those individuals. F. Section 1129(a)(6) does not apply because there is no governmental regulatory commission that has jurisdiction over the Debtors' rates. G. The best interests test is satisfied as to each impaired class of claims and interests because each dissenting holder will receive or retain under the Plan, on account of its claim, property of a value, as of the effective date of the Plan, that is not less than the amount that it would receive in a Chapter 7 liquidation of the Debtors' assets on that date. As a result, the Plan satisfies the requirements of Section 1129(a)(7). H. Section 1129(a)(8) of the Bankruptcy Code requires that each class of claims or interests under a plan has either accepted the plan or is not impaired under the plan. In the Debtors' Chapter 11 cases, all classes of impaired claims (Class 4 General Unsecured Claims) voted to accept the Plan while Classes 1-A through 1-F, 2 and 3 are conclusively presumed to have accepted the Plan. Meanwhile, the votes of holders of Class 5 claims have not been solicited as such class is deemed to reject the Plan. As a result, Section 1129(a)(8), which requires that all impaired classes accept the Plan, has not been satisfied with respect to Class 5. The Debtors' Plan, however, can still be confirmed because it does not discriminate unfairly against Class 5, thereby satisfying the first prong of Section 1129(b)(1). Under the Plan, no holders of claims or interests junior to the holders in Class 5 will receive or retain any property, and no class of claims or interests senior to Class 5 will receive more than full payment on account of those claims or interests. I. Section 1129(a)(9) of the Bankruptcy Code requires that certain priority claims be paid in full on the effective date of a plan and that the holders of certain other priority claims receive deferred cash payments. The Debtors' Plan complies with Section 1129(a)(9). The Plan provides that on or as soon as reasonably practicable after the later of the Plan Effective Date or the date on which an administrative claim becomes an allowed claim, each creditor will receive cash equal to the unpaid portion of its allowed administrative claim or other less favorable treatment that has been agreed upon in writing by the Debtors and the creditor. J. The Debtors have satisfied Section 1129(a)(10). The Plan has been accepted by the only impaired class entitled to vote on the Plan, Class 4 General Unsecured Claims, and no entity included in Class 4 is an "insider" of the Debtors. K. Pursuant to Section 1129(a)(11), a plan may be confirmed only if the confirmation is not likely to be followed by the liquidation or the need for further financial reorganization of the debtor or its successor unless that liquidation or reorganization is proposed under the plan. For purposes of determining whether the Plan satisfies these feasibility standards, the Debtors have analyzed their ability to meet their obligations under the Plan. The Plan contemplates that the liquidation trust ultimately will dispose all the Debtors' assets and that all proceeds of the assets will be distributed to the creditors. Moreover, the Debtors expect to have sufficient funds available to meet their obligations under the Plan. Accordingly, the Plan is feasible and satisfies the standards of Section 1129(a)(11). L. All fees payable have been paid or will be paid on the effective date of the Plan, thereby, satisfying Section 1129(a)(12). M. The Debtors have withdrawn from or terminated their retiree benefit plans and therefore, none of them is obligated to pay any unpaid retiree benefits on an ongoing basis or in the future. Accordingly, the requirements of Section 1129(a)(13) have been satisfied. N. The Debtors are not required by a judicial or administrative order, or by statute, to pay any domestic support obligations. Accordingly, Section 1129(a)(14) is inapplicable. O. The Debtors are not individuals and accordingly, Section 1129(a)(15) is inapplicable. P. The Debtors operate moneyed businesses and are commercial corporations. Accordingly, Section 1129(a)(16), which addresses non-profit organization, is inapplicable. Settlements The Court acknowledged that the Debtors' Plan is dependent on and incorporates the terms of certain compromises and settlements that are necessary for the success of the Plan, including the Debtors' settlement agreements with Kenneth Neumann and his related entities and the Debtors' settlements with IndyMac Ventures LLC, GMAC and Comerica Bank. Releases and Injunctions Judge Wedoff also approved the releases and injunctions stated in Sections 14.6, 14.7, 14.1 and 14.8; the indemnification obligations stated in Section 14.5; and the injunctions or stays stated in Section 16.14 of the Plan. * Section 14.6 specifically requires the Debtors to release Kenneth Neumann, Jean Neumann and all entities presently or formerly owned or affiliated with Mr. Neumann, from all claims and liabilities. * Under Section 14.7, all persons entitled to vote to accept the Plan, creditors, holders of claims, parties-in-interests and others, are required to release the so-called "released parties," from claims or causes of actions except those that are based on tax codes, Employee Retirement Income Security Act, and environmental, criminal and securities laws. * Section 14.1 provides that confirmation will not discharge claims against the Debtors, however, holders of claims are preliminarily enjoined from seeking or receiving any payment or other distribution from, or seeking recourse against the liquidation trust or any of its property on account of those claims. * Section 14.5 provides that the indemnification rights of all present and former directors, officers, employees consultants, agents or representatives of a Debtor will be released and terminated on the Plan Effective Date, except those indemnification rights of an indemnitee who is also a "released party" and those based solely upon any act or omission arising out of or relating to the indemnitee's service with, for or on behalf of a Debtor on and after the bankruptcy filing. * Section 16.14 of the Plan provides all injunctions or stays provided for in the Chapter 11 cases will remain in full force and effect during the 90-day period when IndyMac Venture' collateral will be retained in the Debtors' estates. The Court further held that the provisions of each executory contract or unexpired lease to be assumed under the Plan that are or may be in default will be satisfied solely by cure payments. The Debtors are required to serve a notice on all parties to those contracts, stating the proposed amount to cure the default, no later than February 27, 2010. Any person who disagrees with the proposed cure amount has 30 days after service of the notice to file his or her objection. William Kaye is designated as the Liquidation Trust Administrator under the Trust Agreement. Wayne Walker and Neil Luria are designated as members of the Liquidation Trust Advisory Board. The Court consider the Plan as to Debtors NHI Sky Ranch LLC and Sky Ranch LLC at a later date. Full-text copies of the Confirmation Order and the Amended Plan dated February 8, 2010, are available without charge at: http://bankrupt.com/misc/Neumann_ConfirmationOrder.pdf http://bankrupt.com/misc/Neumann_LiquidationPlan.pdf About Neumann Homes Headquartered in Warrenville, Illinois, Neumann Homes Inc. -- http://www.neumannhomes.com/-- develops and builds residential real estate throughout the Midwest and West US. The company is active in the Chicago area, southeastern Wisconsin, Colorado, and Michigan. The Company has built more than 11,000 homes in some 150 residential communities. The Company offers formal business training to employees through classes, seminars, and computer- based training. The Company filed for Chapter 11 protection on November 1, 2007 (Bankr. N.D. Ill. Case No. 07-20412). George Panagakis, Esq., at Skadded, Arps, Slate, Meagher & Flom L.L.P., was selected by the Debtors to represent them in these cases. The Official Committee of Unsecured Creditors has selected Paul, Hastings, Janofsky & Walker LLP, as its counsel in these bankruptcy proceeding. When the Debtors filed for protection from its creditors, they listed assets and debts of more than $100 million. (Neumann Bankruptcy News; Bankruptcy Creditors' Services Inc. http://bankrupt.com/newsstand/or 215/945-7000) NEUMANN HOMES: Proposes Settlement With Former CEO -------------------------------------------------- Neumann Homes Inc. and its affiliated debtors sought and obtained an order from the U.S. Bankruptcy Court for the Northern District of Illinois, approving a settlement agreement they entered into with their former chief executive Kenneth Neumann. The Debtors entered into the Neumann Agreement to settle their claims against Mr. Neumann and his wife, Jean Neumann, and all entities presently or formerly owned or affiliated with the former CEO. Those entities include KJET Office Building LLC, Kreutzer Road LLC, KDJET LLC, KPN Michigan LLC, KPN Michigan Pool LLC and KPN Sterling Woods LLC. Under the Settlement Agreement, Mr. Neumann, et al., are required to pay $1.125 million to fund the Debtors' joint plan of liquidation and to release their claims against the Debtors, which include more than $2 million in administrative claims. In return, Mr. Neumann, et al., will be released from all claims asserted against them by the Debtors, will receive certain assets of the Debtors which include trade names, and will obtain injunctive relief from claims of other persons or entities pursuant to the Settlement Agreement and the Plan. Upon execution of the Settlement Agreement, IHP Investment Fund III L.P. will also be released from claims asserted against it by the Debtors. IHP Investment is one of the defendants of a lawsuit filed by the Debtors, alleging claims for the avoidance of preferential or fraudulent transfers, totaling $3,220,074. Mr. Neumann, et al., were also named as respondents in the lawsuit. A full-text copy of the Neumann Homes-Kenneth Neumann Settlement Agreement is available without charge at: http://bankrupt.com/misc/Neumann_KPNSettlementDeal.pdf About Neumann Homes Headquartered in Warrenville, Illinois, Neumann Homes Inc. -- http://www.neumannhomes.com/-- develops and builds residential real estate throughout the Midwest and West US. The company is active in the Chicago area, southeastern Wisconsin, Colorado, and Michigan. The Company has built more than 11,000 homes in some 150 residential communities. The Company offers formal business training to employees through classes, seminars, and computer- based training. The Company filed for Chapter 11 protection on November 1, 2007 (Bankr. N.D. Ill. Case No. 07-20412). George Panagakis, Esq., at Skadded, Arps, Slate, Meagher & Flom L.L.P., was selected by the Debtors to represent them in these cases. The Official Committee of Unsecured Creditors has selected Paul, Hastings, Janofsky & Walker LLP, as its counsel in these bankruptcy proceeding. When the Debtors filed for protection from its creditors, they listed assets and debts of more than $100 million. (Neumann Bankruptcy News; Bankruptcy Creditors' Services Inc. http://bankrupt.com/newsstand/or 215/945-7000) NEUMANN HOMES: Submits Status Report on Adversary Proceedings ------------------------------------------------------------- In accordance with a Court directive issued at a January 19, 2010 status hearing, law firms Keating & Shure, Ltd., and Bracewell & Giuliani LLP submitted to the Court on February 16, 2010, status reports of adversary proceedings in the cases of Neumann Homes Inc. and its debtor affiliates. Keating & Shure apprised the Court of these adversary cases which it has handled or currently handles: Adversary Case Status of the Case --------------- ------------------ NHI v. City of Kenosha, WI The parties have agreed to settle the matter. NHI v. City of Lockport, IL The parties have agreed to settle the matter. NHI v. Village of On February 12, 2010, the Debtors Carpentersville, IL filed an amended complaint adding a declaratory claim against Carpentersville and Carolina Casualty Insurance Company. Service upon Carolina Casualty is outstanding. Carpentersville's responsive pleading is due February 26, 2010. NHI v. Village of Minooka, IL The Debtors filed an amended complaint on February 3, 2010. A responsive pleading was due on February 17, 2010. NHI v. Village of Round Settlement discussion continuing. Lake Heights, IL Extension granted in answering the complaint, through March 17, 2010. NHI v. Village of Wauconda The parties have agreed to settle the matter. NHI v. City of Naperville, IL The parties have agreed to settle the matter. NHI v. Woodstock Comm. Unit The Debtors filed an amended S.D. No. 200 complaint on February 3, 2010. Motion to dismiss was filed on February 12, 2010. NHI v. Oswego Community Settlement discussion continuing. School District Extension granted in answering until after negotiations break down. NHI v. Parker, CO Water & Answer filed. Discovery to Sanitation District commence. NHI v. School District Amended Complaint filed on No. 34 Antioch, IL February 3, 2010. Motion to dismiss was filed on February 12, 2010. NHI v. Town of Firestone, CO The parties have agreed to settle the matter. NHI v. Village of Hanover Case dismissed on January 19, Park, IL 2010. NHI v. Village of Wonder Amended Complaint filed Feb. 3, Lake, IL 2010. Motion to dismiss Amended Complaint filed February 10, 2010. NHI v. City of Aurora, CO The parties have agreed to settle the matter. NHI v. Town of Cortland, IL The case was dismissed on November 13, 2009. NHI v. Village of Oswego, IL Complaint filed and served. Answer due by February 17, 2010, by agreement. NHI v. Commonwealth Edison Answer filed on December 21, 2009. Company Discovery pending. Responses to NHI discovery due on March 10, 2010. NHI v. Sprint/Nextel Retail Answer filed November 25, 2009. Stores LLC Discovery to commence. NHI v. SBC Internet Services Extension to answer until Feb. 26, 2010. NHI v. AT&T Corporation Answer filed January 15, 2010. Discovery to commence. NHI v. Neu Towne Parker Complaint served on Colorado Metro District municipal corporation. Extension on answer granted until March 17, 2010. NHI v. Minooka, IL High Amended Complaint filed on School District No. 111 February 3, 2010. Extension on response granted until March 3, 2010. NHI v. Village of Gilberts This case was dismissed on January 19, 2010. NHI v. School District U-46 Amended Complaint filed on Elgin, IL February 3, 2010. Motion to dismiss was filed on February 12, 2010. NHI v. Hanover Park Case Number 09-01082. The parties District have agreed to settle the matter. NHI v. Village of Sturtevant The parties have agreed to settle the matter. NHI v. Minooka, IL School Amended Complaint filed on District 201 February 3, 2010. Motion to dismiss was filed on February 12, 2010. NHI v. Clear Channel Outdoor Settlement discussion pending. Extension granted on answer until date after negotiations break down. NHI v. American Express The parties have agreed to settle Company the matter. NHI v. Safeco Business No response to complaint. Insurance NHI v. Cardmember Services The parties have agreed to settle the matter. Bracewell & Giuliani apprised the Court of these adversary cases which it handled or currently handles: Adversary Cases Status of the Case --------------- ------------------ Neumann Homes, Inc. et al. No responsive pleadings filed. v. Kenneth P. Neumann et al. This case will be discharged upon confirmation of the Plan in the underlying bankruptcy. Neumann Homes, Inc. et al. Answer filed. Discovery to v. Village of Grayslake commence. Neumann Homes, Inc. et al. Answer filed. Discovery to v. City of Aurora, IL commence. Neumann Homes, Inc. et al. Waiver of service sent Nov. 24, v. City of Joliet 2009. Responsive pleading due January 25, 2010. Settlement discussions pending. Neumann Homes, Inc. et al. Amended Complaint filed on v. Village of Antioch February 3, 2010. Motion to Illinois Dismiss Amended Complaint filed February 10, 2010. Neumann Homes, Inc. et al. Responsive pleading due from v. Cavalli-Dotson Ventures Bailey Dotson and Best Buy Homes Colorado, I LLC, et al. Inc. on March 1, 2010. Neumann Homes, Inc. et al. The case has not been served and v. Premium Assignment Corp. will be discharged upon confirmation of the Plan in the underlying bankruptcy. Neumann Homes, Inc. et al. This case has not been served and v. Worknet Inc. will be discharged upon confirmation of the Plan in the underlying bankruptcy. Neumann Homes, Inc. et al. This case has not been served and v. D&B Advertising will be discharged upon confirmation of the Plan in the underlying bankruptcy. Neumann Homes, Inc. et al. This case has not been served and v. Compass Signs will be discharged upon confirmation of the Plan in the underlying bankruptcy. Neumann Homes, Inc. et al. This case has not been served and v. Paddock Publications Inc. will be discharged upon confirmation of the Plan in the underlying bankruptcy. Neumann Homes, Inc. et al. This case has not been served and v. Northwest News Group of will be discharged upon Greater Chicago confirmation of the Plan in the underlying bankruptcy. Neumann Homes, Inc. et al. This case has not been served and v. Kenosha News Publishing will be discharged upon Corp. confirmation of the Plan in the underlying bankruptcy. Neumann Homes, Inc. et al. This case has not been served and v. Copy Xpress will be discharged upon confirmation of the Plan in the underlying bankruptcy. Neumann Homes, Inc. et al. This case has not been served and v. IHP Investment Fund and will be discharged upon Kenneth P. Neumann confirmation of the Plan in the underlying bankruptcy. Neumann Homes, Inc. et al. This case has not been served and v. Another Plumbing Co., will be discharged upon et al. confirmation of the Plan in the underlying bankruptcy. Neumann Homes, Inc. et al. Deadline to file responsive v. Middlesboro at Oakhurst pleadings extended to March 2, 2010 by agreement. About Neumann Homes Headquartered in Warrenville, Illinois, Neumann Homes Inc. -- http://www.neumannhomes.com/-- develops and builds residential real estate throughout the Midwest and West US. The company is active in the Chicago area, southeastern Wisconsin, Colorado, and Michigan. The Company has built more than 11,000 homes in some 150 residential communities. The Company offers formal business training to employees through classes, seminars, and computer- based training. The Company filed for Chapter 11 protection on November 1, 2007 (Bankr. N.D. Ill. Case No. 07-20412). George Panagakis, Esq., at Skadded, Arps, Slate, Meagher & Flom L.L.P., was selected by the Debtors to represent them in these cases. The Official Committee of Unsecured Creditors has selected Paul, Hastings, Janofsky & Walker LLP, as its counsel in these bankruptcy proceeding. When the Debtors filed for protection from its creditors, they listed assets and debts of more than $100 million. (Neumann Bankruptcy News; Bankruptcy Creditors' Services Inc. http://bankrupt.com/newsstand/or 215/945-7000) NEWMARKET CORP: S&P Raises Corporate Credit Rating to 'BB+' ----------------------------------------------------------- Standard & Poor's Ratings Services raised its corporate credit rating on Richmond, Va.-based NewMarket Corp. to 'BB+' from 'BB'. The outlook is stable. At the same time, S&P raised the issue-level rating on the company's 7.125% senior unsecured notes due 2016 to 'BB' (one notch below the corporate credit rating) from 'BB-'. The recovery rating remains at '5', indicating S&P's expectation of modest recovery (10% to 30%) in the event of a payment default. "The upgrade follows improved financial metrics and liquidity as the company generated strong profits and cash flows during 2009," said Standard & Poor's credit analyst Ket Gondha. While this improvement was partially driven by margin expansion due to short-term fluctuations in raw material prices and temporary reductions in spending, a level balance of supply and demand should underpin the company's ability to maintain margins above historical norms. In S&P's view, NewMarket will maintain credit measures that are appropriate for the rating, even as the company implements its financial and strategic initiatives aimed at increasing shareholder returns, diversity, and growth. The ratings on NewMarket reflect the company's focus on the highly competitive, mature global petroleum additives industry, exposure to volatile raw material costs, and moderately aggressive financial policies. Well-entrenched market positions in niche product areas, satisfactory liquidity, and credit ratios that are currently robust for the rating temper these negative factors. NIGHTLIFE ENTERPRISES: Voluntary Chapter 11 Case Summary -------------------------------------------------------- Debtor: Nightlife Enterprises, L.P. dba China Club 268 W. 47th Street New York, NY 10036 Bankruptcy Case No.: 10-10956 Chapter 11 Petition Date: February 24, 2010 Court: United States Bankruptcy Court Southern District of New York (Manhattan) Judge: Allan L. Gropper Debtor's Counsel: Erica R. Feynman, Esq. Rattet, Pasternak & Gordon-Oliver, LLP 550 Mamaroneck Avenue Harrison, NY 10528 Tel: (914) 381-7400 Fax: (914) 381-7406 Email: efeynman@rattetlaw.com Jonathan S. Pasternak, Esq. Rattet, Pasternak & Gordon Oliver, LLP 550 Mamaroneck Avenue, Suite 510 Harrison, NY 10528 Tel: (914) 381-7400 Fax: (914) 381-7406 Email: jsp@rattetlaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of its 20 largest unsecured creditors when it filed its petition. The petition was signed by Daniel Fried. NLP ACQUISITION: Case Summary & 13 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: NLP Acquisition Limited Partnership c/o William K. Haines, Jr. 8050 Freedom Avenue NW North Canton, OH 44720 Bankruptcy Case No.: 10-60613 Chapter 11 Petition Date: February 24, 2010 Court: United States Bankruptcy Court Northern District of Ohio (Canton) Judge: Russ Kendig Debtor's Counsel: Patrick J. Keating, Esq. Buckingham, Doolittle & Burroughs LLP 3800 Embassy Parkway, Suite 300 Akron, OH 44333 Tel: (330) 258-6554 Fax: (330) 252-5554 Email: pkeating@bdblaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $10,000,001 to $50,000,000 A full-text copy of the Debtor's petition, including a list of its 13 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/ohnb10-60613.pdf The petition was signed by William K. Haines, Jr., managing member of the Company. NOVELIS INC: Bank Debt Trades at 4% Off in Secondary Market ----------------------------------------------------------- Participations in a syndicated loan under which Novelis, Inc., is a borrower traded in the secondary market at 96.22 cents-on-the- dollar during the week ended Friday, Feb. 26, 2010, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 1.26 percentage points from the previous week, The Journal relates. The Company pays 200 basis points above LIBOR to borrow under the facility. The bank loan matures on July 6, 2014. The bank debt is not rated by Moody's while it carries Standard & Poor's BB- rating. The debt is one of the biggest gainers and losers among 188 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. As reported by the Troubled Company Reporter on Nov. 19, 2009, Moody's changed the outlook for Novelis, Inc., and Novelis Corporation to stable from negative. The speculative grade liquidity rating of Novelis, Inc., was also upgraded to SGL-2 from SGL-3. At the same time, Moody's affirmed Novelis Inc's B2 corporate family rating, its B2 probability of default rating, the Ba3 rating on its senior secured term loan, and the Caa1 senior unsecured notes rating. The Ba3 rating on Novelis Corporation's senior secured term loan was also affirmed. The change in outlook to stable reflects Moody's expectation that Novelis will continue to show improvement in its earnings and cash flow generation given the renegotiation of all of its can sheet contracts, cost cutting efforts and the run off of virtually all its hedge loss position. The outlook anticipates that the company will continue to focus on cash generation and liquidity and that its performance will continue to benefit from the more robust conditions in its can sheet business, which accounts for roughly 50% to 60% of sales. Although Moody's does not expect that the company will meaningfully reduce absolute debt levels over the next twelve to fifteen months, the outlook reflects Moody's belief that debt protection coverage ratios will continue to strengthen as the company returns to a sustainable level of profitability. Moody's last rating action on Novelis was Aug. 5, 2009, when the company's senior unsecured ratings were downgraded to Caa1 from B3. Headquartered in Atlanta, Georgia, Novelis is the world's largest producer of aluminum rolled products. For the twelve months ended Sept. 30, 2009, the company had total shipments of approximately 2,725 kilotonnes and generated $8.2 billion in revenues. OCEAN MIST RESORT: Case Summary & 4 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Ocean Mist Resort LLC 416 Main St West Dennis, MA 02670 Bankruptcy Case No.: 10-11834 Chapter 11 Petition Date: February 24, 2010 Court: United States Bankruptcy Court District of Massachusetts (Boston) Judge: William C. Hillman Debtor's Counsel: Simon Mann, Esq. Law Office of Simon Mann 11 Beacon St, Suite #315 Boston, MA 02108 8574980021 Fax: (617) 367-7903 Email: simonmannlaw@gmail.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 4 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/mab10-11834.pdf The petition was signed by Devitt Adams and Leon Narbone, managers of the Company. OMNIA COLLEGE: Case Summary & Unsecured Creditor ------------------------------------------------ Debtor: Omnia College, LLC P.O. Box 61237 Palo Alto, CA 94306 Bankruptcy Case No.: 10-51757 Chapter 11 Petition Date: February 24, 2010 Court: United States Bankruptcy Court Northern District of California (San Jose) Judge: Arthur S. Weissbrodt Debtor's Counsel: Charles B. Greene, Esq. Law Offices of Charles B. Greene 84 W Santa Clara St. #770 San Jose, CA 95113 Tel: (408) 279-3518 Email: cbgattyecf@aol.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 According to the schedules, the Company has assets of $2,400,000 and total debts of $2,594,567. The Debtor identified BAC Home Loans with a debt claim (586 College Ave. Palo Alto, CA Single family residence) for $1,054,377 ($2,400,000 secured) ($1,540,190 senior lien) as its largest unsecured creditor. A full-text copy of the Debtor's petition, including a list of its largest unsecured creditor, is available for free at: http://bankrupt.com/misc/canb10-51757.pdf The petition was signed by Manar Zarroug, principal officer of the Company. OTTER TAIL: Gets Approval for Cash Collateral Use Until May 31 -------------------------------------------------------------- Otter Tail Ag Enterprises, LLC, obtained the approval of the Hon. Dennis D. O'Brien of the U.S. Bankruptcy Court for the District of Minnesota to continue using the cash collateral of AgStar Financial Services, PCA, and MMCDC New Markets Fund II, LLC, until May 31, 2010. The Debtor requires the continued use of cash collateral in order to continue its operations, and to accommodate the plan filing and confirmation process relating to the upcoming filing of the Debtor's Plan of Reorganization. The Debtor said that it needs approximately $24,423,366 between February 28, 2010, and the period ending on May 31, 2010. The Debtor entered into a stipulation and agreed order with the lenders concerning use of cash collateral, adequate protection and other related matters. The Debtor will, unless AgStar will otherwise consent in advance in writing, submit to the Prepetition Lenders, U.S. Bank and the County: (a) reports required to be delivered by Debtor of the master loan agreement; (b) reports filed with the United States Trustee in Debtor's Case; (c) by 5:00 p.m. (Central Time) on Thursday of each week, a weekly report comparing on a line item basis budgeted amounts, as itemized in the Budget, to actual amounts disbursed during the preceding week; (d) by 5:00 p.m. (Central Time) on Thursday of each week, a weekly report itemizing all expenditures during the preceding week and (e) by 5:00 p.m. (Central Time) on Thursday of each week, its certification of the ledger balance of all deposit accounts of Debtor as of the close of business on the immediately preceding Friday; and (xvi) all other financial information reasonably requested. The Debtor will pay to the Prepetition Lenders, as additional adequate protection: (a) accrued interest at the nondefault rate of interest set forth in the AgStar Loan Documents and the NMF Loan Documents, for the prior month on the Prepetition Loans will be paid by Debtor to the Prepetition Lenders on the first day of each month, beginning on March 1, 2010, and monthly thereafter, through the Cash Collateral Maturity Date in the amounts set forth in the Budget and other sums paid in connection with this order. AgStar's security interest in the AgStar Postpetition Collateral will be subject to payment of the Carve-Out not to exceed $75,000. As security for the use of Cash Collateral, AgStar will have and is granted a perfected security interest in all of the real and personal property of Debtor. AgStar will also be entitled to an administrative expense claim. As adequate protection against any diminution in the interest of NMF, U.S. Bank and the County in the prepetition collateral occurring from and after the Petition Date, NMF, U.S. Bank, and the County will have and are granted a perfected security interest in all of the real and personal property of the Debtor. The Debtor will used the cash collateral pursuant to a budget, a copy of which is available for free at: http://bankrupt.com/misc/OTTER_TAIL_budget.pdf Debtor will maintain a minimum cash balance at all time through the Cash Collateral Maturity Date of $2,000,000, measured as of the close of business each Friday and included in the financial reports required of the Debtor. About Otter Tail Based in Fergus Falls, Minnesota, Otter Tail AG Enterprises, LLC -- http://www.ottertailethanol.com/-- owns and operates a nameplate capacity 55 million gallon annual production plant of undenatured ethanol in Fergus Falls, Minnesota. The Company processes approximately 20 million bushels of corn into approximately 55 million gallons of ethanol each year. In addition, the Company sells distillers grains, a principal co- product of the ethanol production process. The Company filed for Chapter 11 relief on Oct. 30 (Bankr. D. Minn. Case No. 09-61250). The petition listed assets of $66.4 million against $86 million in debt, nearly all secured. The largest secured creditor is AgStar Financial Services, owed $40.9 million. PROTOSTAR LTD: Creditors Fail to Stall Sale Bonuses --------------------------------------------------- A judge has rejected unsecured creditors' request to bar bonus payments associated with ProtoStar Ltd.'s $185 million satellite sale while they appeal the order approving the payments, despite the creditors' belief that they will prevail in the dispute, Law360 reports. Hamilton, HM EX, Bermuda-based ProtoStar Ltd. is a satellite operator formed in 2005 to acquire, modify, launch and operate high-power geostationary communication satellites for direct-to- home satellite television and broadband internet access across the Asia-Pacific region. The Company and its affiliates filed for Chapter 11 on July 29, 2009 (Bankr. D. Del. Lead Case No. 09-12659). The Debtor selected Pachulski Stang Ziehl & Jones LLP as Delaware counsel; Law Firm of Appleby as their Bermuda counsel; UBS Securities LLC as financial advisor & investment banker and Kurtzman Carson Consultants LLC as claims and noticing agent. The Debtors have tapped UBS Securities LLC as investment banker and financial advisor. Also on July 29, 2009, ProtoStar and its affiliates, including ProtoStar Development Ltd., commenced a coordinated proceeding in the Supreme Court of Bermuda. John C. McKenna of Finance & Risk Services Ltd. as liquidator of the Bermuda Group. In their Chapter 11 petition, the Debtors listed between US$100 million and US$500 million each in assets and debts. As of December 31, 2008, ProtoStar's consolidated financial statements, which include non-debtor affiliates, showed total assets of US$463,000,000 against debts of US$528,000,000. RAINIER PACIFIC BANK: Closed; Umpqua Bank Assumes All Deposits -------------------------------------------------------------- Rainier Pacific Bank, Tacoma, Washington, was closed February 26 by the Washington Department of Financial Institutions, which appointed the Federal Deposit Insurance Corporation as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Umpqua Bank, Roseburg, Oregon, to assume all of the deposits of Rainier Pacific Bank. The 14 branches of Rainier Pacific Bank will reopen during normal business hours as branches of Umpqua Bank. Depositors of Rainier Pacific Bank will automatically become depositors of Umpqua Bank. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship to retain their deposit insurance coverage. Customers should continue to use their former Rainier Pacific Bank branch until they receive notice from Umpqua Bank that it has completed systems changes to allow other Umpqua Bank branches to process their accounts as well. Friday evening and over the weekend, depositors of Rainier Pacific Bank can access their money by writing checks or using ATM or debit cards. Checks drawn on the bank will continue to be processed. Loan customers should continue to make their payments as usual. As of December 31, 2009, Rainier Pacific Bank had approximately $717.8 million in total assets and $446.2 million in total deposits. Umpqua Bank will pay the FDIC a premium of 1.04 percent to assume all of the deposits of Rainier Pacific Bank. In addition to assuming all of the deposits, Umpqua Bank agreed to purchase approximately $670.1 million of the failed bank's assets. The FDIC will retain the remaining assets for later disposition. The FDIC and Umpqua Bank entered into a loss-share transaction on $578.1 million of Rainier Pacific Bank's assets. Umpqua Bank will share in the losses on the asset pools covered under the loss- share agreement. The loss-share transaction is projected to maximize returns on the assets covered by keeping them in the private sector. The transaction also is expected to minimize disruptions for loan customers. For more information on loss share, please visit: http://www.fdic.gov/bank/individual/failed/lossshare/index.html Customers who have questions about the transaction can call the FDIC toll-free at 1-800-830-4725. Interested parties also can visit the FDIC's Web site at http://www.fdic.gov/bank/individual/failed/rainier.html The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $95.2 million. Umpqua Bank's acquisition of all the deposits was the "least costly" resolution for the FDIC's DIF compared to all alternatives. Rainier Pacific Bank is the 22nd FDIC-insured institution to fail in the nation this year, and the fourth in Washington. The last FDIC-insured institution closed in the state was American Marine Bank, January 29, 2010. RAMSEY HOLDINGS: Court Sets Cash Collateral Hearing for March 9 --------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Oklahoma will consider at a hearing on March 9, 2010, at 1:30 p.m., Ramsey Holdings, Inc., et al.'s authority to use cash securing obligation with CIT Lending Services Corp. The hearing will be held at Courtroom 2, 1st Floor, 224 S. Boulder Ave., Tulsa, Oklahoma. The Debtors would use the money to fund their Chapter 11 cases, pay suppliers and other parties. As reported on the Troubled Company Reporter on January 4, 2010, the Debtor is indebted to CIT Lending Services Corp., as administrative and collateral agent under the April 2007 Credit Agreement and amended in January 2008, on behalf of the prepetition lenders. As of the petition date, the Debtor owed CIT Lending $22 million in original principal plus $4 million of capitalized accrued interest outstanding under the subordinated notes and the Debtors' aggregate unsecured trade debt is $4 million. The majority of the trade debt is owed by its operating entities: Auto Crane, Ramsey Winch and Eskridge. In exchange for using the cash collateral, the Debtors will grant the prepetition agent replacement liens on any and all of the Debtors' assets, and superpriority administrative expense claim. About Ramsey Holdings, Inc. Tulsa, Oklahoma-based Ramsey Holdings, Inc., filed for Chapter 11 bankruptcy protection on December 18, 2009 (Bankr. N.D. Okla. Case No. 09-13998). The Company's affiliates -- Auto Crane Company; Eskridge, Inc.; Ramsey Industries, Inc.; and Ramsey Winch Company -- also filed for Chapter 11 bankruptcy protection. John D. Dale, Esq., at Gable & Gotwals assists the Debtors in their restructuring efforts. Ramsey Holdings listed $10,000,001 to $50,000,000 in assets and $50,000,001 to $100,000,000 in liabilities. READER'S DIGEST: Committee Hired BDO UK as Pension Advisor ---------------------------------------------------------- The Official Committee of Unsecured Creditors of The Reader's Digest Association, Inc., and its Debtor-subsidiaries sought the Court's permission to retain BDO (U.K.), LLP, as special UK pension advisor, nunc pro tunc to September 14, 2009. Daniel Pevonka, on behalf of R.R. Donnelley & Sons Company and chairperson of the Creditors' Committee, relates that a non-debtor foreign affiliate of the Debtors, The Reader's Digest Association Limited, has potential liabilities arising out of a pension scheme, whereby employees of RDA UK became entitled to pension benefits and RDA UK agreed to meet the balance of the cost of providing the benefits after taking into account the employees' own contributions. Subsequent to the Petition Date, the Pensions Regulator in the United Kingdom commenced an investigation as to whether it should exercise its moral hazard powers against the Debtors in an attempt to hold the Debtors responsible for the Pension Scheme Liability, Mr. Pevonka relates. He notes that the Creditors' Committee had requested that BDO UK apply its specialized knowledge and experience to assist the Creditors Committee in evaluating and quantifying the potential responsibility of the Debtors for the Pension Scheme Liability. In performing its services, BDO UK's activities were and will be limited to reviewing and analyzing information provided by, and conferring with, the Debtors' UK financial advisors, the Debtors, RDA UK or the Pensions Regulator, and reviewing and analyzing the terms of any proposed settlement of the Pension Scheme liabilities and reporting its findings to the Creditors Committee, Mr. Pevonka tells the Court. BDO UK will be paid at its customary hourly billing rates: Partners GBP520 to GBP645 Directors GBP413 to GBP498 Senior Managers GBP413 to GBP498 Managers GBP322 to GBP379 Seniors GBP193 to GBP240 Staffs GBP88 to GBP175 Richard Farr, a partner at BDO UK, assures the Court that his firm is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. A hearing will be held on March 8, 2010, to consider the application. Objections are due March 3. About The Reader's Digest Association RDA is a global multi-brand media and marketing company that educates, entertains and connects audiences around the world. The company builds multi-platform communities based on branded content. With offices in 44 countries, it markets books, magazines, and music, video and educational products reaching a customer base of 130 million in 78 countries. It publishes 94 magazines, including 50 editions of Reader's Digest, the world's largest-circulation magazine, operates 65 branded Web sites generating 22 million unique visitors per month, and sells 40 million books, music and video products across the world each year. Its global headquarters are in Pleasantville, N.Y. Reader's Digest said that as of June 30, 2009, it had total assets of US$2.2 billion against total debts of US$3.4 billion. Reader's Digest, together with its 47 affiliates, filed for Chapter 11 on August 24 (Bankr. S.D.N.Y. Case No. 09-23529). Kirkland & Ellis LLP has been engaged as general restructuring counsel. Mallet-Prevost, Colt & Mosle LLP has been tapped as conflicts counsel. Ernst & Young LLP is auditor. Miller Buckfire & Co, LLC, is financial advisor. AlixPartners, LLC, is restructuring consultant. Kurtzman Carson Consultants is notice and claims agent. The Official Committee of Unsecured Creditors is tapping BDO Seidman, LLP, as financial advisor, Trenwith Securities, LLP, as investment banker and Otterbourg, Steindler, Houston & Rosen, P.C., as counsel. Bankruptcy Creditors' Service, Inc., publishes Reader's Digest Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Reader's Digest and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000) READER'S DIGEST: U.K. Edition in Talks With Bidders --------------------------------------------------- Reader's Digest Association Inc.'s U.K. unit is in talks with potential buyers, the Associated Press reported, citing the administrator for the publication. There is "significant interest" in the publication, said Phillip Sykes, a partner at Moore Stephens, according to the report. Mid-February, the Reader's Digest Association, Ltd., a subsidiary of RDA, filed an administration proceeding in the UK. The decision by the RDA UK board to place the UK company into an orderly insolvency process follows the recent decision by the UK Pensions Regulator that it would not support an agreement already reached between RDA UK, the trustees of its pension plan and the UK Pension Protection Fund to settle a longstanding pension plan liability. About The Reader's Digest Association RDA is a global multi-brand media and marketing company that educates, entertains and connects audiences around the world. The company builds multi-platform communities based on branded content. With offices in 44 countries, it markets books, magazines, and music, video and educational products reaching a customer base of 130 million in 78 countries. It publishes 94 magazines, including 50 editions of Reader's Digest, the world's largest-circulation magazine, operates 65 branded Web sites generating 22 million unique visitors per month, and sells 40 million books, music and video products across the world each year. Its global headquarters are in Pleasantville, N.Y. Reader's Digest said that as of June 30, 2009, it had total assets of US$2.2 billion against total debts of US$3.4 billion. Reader's Digest, together with its 47 affiliates, filed for Chapter 11 on August 24 (Bankr. S.D.N.Y. Case No. 09-23529). Kirkland & Ellis LLP has been engaged as general restructuring counsel. Mallet-Prevost, Colt & Mosle LLP has been tapped as conflicts counsel. Ernst & Young LLP is auditor. Miller Buckfire & Co, LLC, is financial advisor. AlixPartners, LLC, is restructuring consultant. Kurtzman Carson Consultants is notice and claims agent. The Official Committee of Unsecured Creditors is tapping BDO Seidman, LLP, as financial advisor, Trenwith Securities, LLP, as investment banker and Otterbourg, Steindler, Houston & Rosen, P.C., as counsel. Bankruptcy Creditors' Service, Inc., publishes Reader's Digest Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Reader's Digest and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000) READER'S DIGEST: S&P Raises Corporate Credit Rating to 'B' ---------------------------------------------------------- Standard & Poor's Ratings Services raised its corporate credit rating on Pleasantville, New York-based Reader's Digest Assn. Inc. to 'B' from 'D'. The rating outlook is stable. At the same times, S&P assigned the company's $525 million senior secured notes due 2017 an issue-level rating of 'B' (at the same level as the 'B' corporate credit rating) with a recovery rating of '4', indicating S&P's expectation of average (30% to 50%) recovery for noteholders in the event of a payment default. The rating reflects: * Reader's Digest's exposure to economic cyclicality; * The highly competitive nature of the publishing business; * Secular pressures facing the publications business; * Mature growth prospects of the company's direct marketing business; * The dated image of the Reader's Digest flagship magazine; and * An increasingly uncompetitive direct marketing model focused on selling music, videos, and books. In S&P's view, the position of the company's flagship publication as the world's highest circulating paid magazine does not offset these factors. Leverage and coverage improve under the refinanced capital structure from that of the prepetition capital structure and the exit capital structure. The company reduced debt to $525 million, from $2.2 billion under the prepetition capital structure. Under the plan of reorganization, the $2.2 billion prepetition capital structure was converted to $555 million senior secured facilities. The senior secured facilities consisted of a $150 first-lien term loan, which was converted from the DIP financing; a reinstated $105 million first-lien German term loan; and a $300 million second-lien U.S. term loan. The $525 million senior secured notes and cash on the balance sheet were used to refinance the $555 million portion of the exit capital structure. Pro forma lease-adjusted leverage would be 3.7x as of Sept. 30, 2009, and interest coverage would improve to 3.8x. At June 30, 2009, the company's interest coverage was fractional. Lower interest expense would also increase discretionary cash flow. S&P expects the company to generate positive discretionary cash flow over the near term, after the costs related to the bankruptcy filing and related restructuring have rolled off. READER'S DIGEST: Plan Declared Effective February 19 ---------------------------------------------------- The Reader's Digest Association, Inc., and its debtor-affiliates notified the United States Bankruptcy Court for the Southern District of New York and parties-in-interest that their Third Amended Joint Chapter 11 Plan of Reorganization became effective on February 19, 2009. Judge Robert D. Drain signed a written order, on January 19, 2010, confirming the Debtors' Plan. Under the Plan, the Debtors will reduce its total debt by 75% from more than $2.2 billion to approximately $555 million. General unsecured creditors, including the retirees, will get a 3.3% to 3.6% recovery on estimated claims of $110 million to $120 million. Holders of the Debtors' senior secured debt will receive equity, effectively transferring ownership of Reader's Digest to a lender group led by J.P. Morgan Chase & Co. Reader's Digest and 47 of its affiliates filed on August 24, 2009, separate voluntary petitions for Chapter 11 of the U.S. Bankruptcy Code because of the world's recent economic storm constrained by the substantial debt on their balance sheet and associated debt service obligations. The bankruptcy filing is a pre-arranged Chapter 11 restructuring with the Debtors' senior secured lenders. Pursuant to Section 1141(d) of the Bankruptcy Code, except as otherwise provided in the Plan, the Confirmation Order or other Court order that may be applicable, on the latest to occur of (i) the Effective Date, (ii) the entry of a Final Order resolving all Claims in the Chapter 11 Cases, and (iii) the final distribution made to Holders of Allowed Claims pursuant to the Plan, all Claims and Equity Interests in the Debtors are discharged and released in full. Accordingly, all persons and entities will be precluded from asserting against the Debtors, their successors or assigns, including the Reorganized Debtors, any other or further Claims based upon any act or transaction that occurred prior to the Effective Date. Under the Plan, each of the Debtors' Executory Contracts and Unexpired Leases has been deemed assumed as of the Effective Date except any Executory Contract or Unexpired Lease previously assumed, rejected, or for which request for rejection is pending as of the Effective Date. All Proofs of Claim arising from the rejection of any Executory Contract or Unexpired Lease pursuant to the Plan must be filed by Holders of the Claims no later than March 24, 2010. All requests for payment of an Administrative Claim that accrued on or before the Effective Date that were not otherwise accrued in the ordinary course of business must be filed with the Court no later than April 24, 2010. All final requests for professional compensation and reimbursement claims, including those for substantial contribution compensation and expenses for services rendered before the Effective Date, must be filed by April 8, 2010. Reader's Digest Exit Ch. 11 on High Yield Bonds The emergence of Reader's Digest and its debtor-affiliates from bankruptcy protection is setting a trail that other distressed companies will likely follow, Joe Bel Bruno of The Wall Street Journal reported on February 19, 2010. Instead of taking a debtor-in-possession credit facility, the Debtors previously sought and obtained the Court's authority to enter into an agreement to issue and sell notes to refinance their (i) obligations under their new first and second priority secured term loans to be issued on the effective date of their plan of reorganization, and (ii) reinstated euro term loan. The Debtors' decision to sell $525 million floating-rate 7-year notes was "purely a financial" one, Mr. Bruno reported, citing Reader's Digest's chief financial officer, Thomas A. Williams as source. The high-yield bonds, also known as junk bonds, are cheaper to finance and will be paid off in much shorter periods, the report said. "I sat with the capital markets desks at J.P. Morgan, Bank of America, Goldman Sachs and Credit Suisse, and in all situations the high-yield bond offering was presented as having this extraordinary flexibility," the Journal quoted Mr. Williams as saying. According to the report, Reader's Digest is expected to save about $30 million a year on the notes as a result of lower interest rates. The notes will mature on February 15, 2017. Due to its flexibility, Mr. Bruno said that similar high-yield notes deals from other distressed companies are under way, citing LyondellBasell Industries as an example. LyondellBasell, he noted, is considering issuing junk bonds to finance its exit from bankruptcy. About The Reader's Digest Association RDA is a global multi-brand media and marketing company that educates, entertains and connects audiences around the world. The company builds multi-platform communities based on branded content. With offices in 44 countries, it markets books, magazines, and music, video and educational products reaching a customer base of 130 million in 78 countries. It publishes 94 magazines, including 50 editions of Reader's Digest, the world's largest-circulation magazine, operates 65 branded Web sites generating 22 million unique visitors per month, and sells 40 million books, music and video products across the world each year. Its global headquarters are in Pleasantville, N.Y. Reader's Digest said that as of June 30, 2009, it had total assets of US$2.2 billion against total debts of US$3.4 billion. Reader's Digest, together with its 47 affiliates, filed for Chapter 11 on August 24 (Bankr. S.D.N.Y. Case No. 09-23529). Kirkland & Ellis LLP has been engaged as general restructuring counsel. Mallet-Prevost, Colt & Mosle LLP has been tapped as conflicts counsel. Ernst & Young LLP is auditor. Miller Buckfire & Co, LLC, is financial advisor. AlixPartners, LLC, is restructuring consultant. Kurtzman Carson Consultants is notice and claims agent. The Official Committee of Unsecured Creditors is tapping BDO Seidman, LLP, as financial advisor, Trenwith Securities, LLP, as investment banker and Otterbourg, Steindler, Houston & Rosen, P.C., as counsel. Bankruptcy Creditors' Service, Inc., publishes Reader's Digest Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Reader's Digest and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000) REALOGY CORP: Bank Debt Trades at 12% Off in Secondary Market ------------------------------------------------------------- Participations in a syndicated loan under which Realogy Corp. is a borrower traded in the secondary market at 88.34 cents-on-the- dollar during the week ended Friday, Feb. 26, 2010, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 0.70 percentage points from the previous week, The Journal relates. The Company pays 300 basis points above LIBOR to borrow under the facility. The bank loan matures on sept. 30, 2013, and carries Moody's Caa1 rating and Standard & Poor's CCC- rating. The debt is one of the biggest gainers and losers among 188 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. Realogy Corp. -- http://www.realogy.com/-- a global provider of real estate and relocation services, has a diversified business model that includes real estate franchising, brokerage, relocation and title services. Realogy's world-renowned brands and business units include Better Homes and Gardens Real Estate, CENTURY 21, Coldwell Banker, Coldwell Banker Commercial, The Corcoran Group, ERA, Sotheby's International Realty, NRT LLC, Cartus and Title Resource Group. Collectively, Realogy's franchise systems have approximately 15,000 offices and 270,000 sales associates doing business in 92 countries around the world. Headquartered in Parsippany, N.J., Realogy is owned by affiliates of Apollo Management, L.P., a leading private equity and capital markets investor. Realogy fully supports the principles of the Fair Housing Act. REVLON INC: Bank Debt Trades at 2% Off in Secondary Market ---------------------------------------------------------- Participations in a syndicated loan under which Revlon, Inc., is a borrower traded in the secondary market at 98.31 cents-on-the- dollar during the week ended Friday, Feb. 26, 2010, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 0.59 percentage points from the previous week, The Journal relates. The Company pays 400 basis points above LIBOR to borrow under the facility. The bank loan matures on Dec. 20, 2011, and carries Moody's Ba3 rating and Standard & Poor's B+ rating. The debt is one of the biggest gainers and losers among 188 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. Headquartered in New York City, Revlon, Inc. (NYSE: REV) -- http://www.revloninc.com/-- is a worldwide cosmetics, hair color, beauty tools, fragrances, skincare, anti-perspirants/deodorants and personal care products company. The Company's brands, which are sold worldwide, include Revlon(R), Almay(R), Mitchum(R), Charlie(R), Gatineau(R), and Ultima II(R). At September 30, 2009, Revlon had $802.0 million in total assets against total current liabilities of $315.2 million, long-term debt of $1.147 billion, long-term debt-affiliates of $107.0 million, long-term pension and other post-retirement plan liabilities of $209.3 million, other long-term liabilities of $66.1 million, resulting in $1.04 billion in stockholders' deficiency. At September 30, 2009, the Company had a liquidity position of $173.2 million, consisting of cash and cash equivalents (net of any outstanding checks) of $59.7 million, as well as $113.5 million in available borrowings under the 2006 Revolving Credit Facility. SIX FLAGS: Barclays & Renaissance No Longer Have Equity Stake ------------------------------------------------------------- In a Schedule 13G/A filing with the U.S. Securities and Exchange Commission dated February 15, 2010, Barclays PLC disclosed that it beneficially owns 41,732 shares of Common Stock with 0% equity stake in Six Flags Inc. In an SEC filing dated February 12, 2010, Mark Silber, executive vice president of Renaissance Technologies LLC, disclosed that Renaissance holds 0% shares of Six Flags common stock. About Six Flags Headquartered in New York City, Six Flags, Inc., is the world's largest regional theme park company with 20 parks across the United States, Mexico and Canada. Six Flags filed for Chapter 11 protection on June 13, 2009 (Bankr. D. Del. Lead Case No. 09-12019). Paul E. Harner, Esq., Steven T. Catlett, Esq., and Christian M. Auty, Esq., at Paul, Hastings, Janofsky & Walker LLP in Chicago, Illinois, act as the Debtors' lead counsel. Daniel J. DeFranceschi, Esq., and L. Katherine Good, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, act as local counsel. Cadwalader Wickersham & Taft LLP, serves as special counsel. Houlihan Lokey Howard & Zukin Capital Inc., serves as financial advisors, while KPMG LLC acts as accountants. Kurtzman Carson Consultants LLC serves as claims and notice agent. As of March 31, 2009, Six Flags had $2,907,335,000 in total assets and $3,431,647,000 in total liabilities. Bankruptcy Creditors' Service, Inc., publishes Six Flags Bankruptcy News. The newsletter provides gavel-to-gavel coverage of the Chapter 11 proceedings undertaken by Six Flags Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945- 7000). REDWOOD PARK: Voluntary Chapter 11 Case Summary ----------------------------------------------- Debtor: Redwood Park, Inc. 3915 Danbury Amarillo, TX 79109 Bankruptcy Case No.: 10-20102 Chapter 11 Petition Date: February 24, 2010 Court: United States Bankruptcy Court Northern District of Texas (Amarillo) Judge: Robert L. Jones Debtor's Counsel: Bill Kinkead, Esq. Kinkead Law Offices 6937 Bell St., Suite G Amarillo, TX 79109 Tel: (806) 353-2129 Fax: (806) 353-4370 Email: bkinkead713@hotmail.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 Sidney H. Thompson, president of the Company. REVLON CONSUMER: Moody's Affirms 'B2' Corporate Family Rating ------------------------------------------------------------- Moody's Investors Service affirmed all of Revlon Consumer Products Corporation's ratings, including its B2 corporate family rating and its speculative grade liquidity rating of SGL-2. Moody's also assigned ratings of Ba2 and Ba3 to the company's proposed $140 million asset-based revolving credit facility and its $800 million senior secured term loan, respectively. Moody's will withdraw the company's existing bank facility ratings, currently Ba3 on both the revolver and term loan, upon successful completion of the proposed refinancing. Final ratings will also be dependent upon Moody's review of all final documentation. The outlook is stable. Moody's affirmation of Revlon's ratings reflects the company's sustained operating and financial improvements despite the ongoing challenges of the macroeconomic environment as well as its ability to stabilize its Revlon brand market share position as a result of a series of successful new product introductions. Moody's recognizes that the proposed bank financing is an important step in its multi-year effort to improve its capital structure and liquidity. "Revlon's improved cost structure and debt profile should provide the company with sufficient financial flexibility to profitably sustain its market share through ongoing investments in new product development," says Moody's Vice President and Senior Credit Officer, Janice Hofferber. "The company's next challenge will be to grow revenue by expanding its Revlon global brand and/or its portfolio of other brands internationally while maximizing its opportunities in new product development." Revlon's B2 corporate family rating reflects the company's global brand franchises, strong geographic and product diversification for a number of well known brands in color cosmetics, hair color and fragrances, and significantly improved and sustained profitability and cash flow metrics (EBITA margins of 14% and FCF to Debt of 6% respectively, based on Moody's analytic adjustments). Moody's expects Revlon's profitability to be sustainable despite strategies to grow the company's revenue which may require additional product development and advertising and promotional spending. However, Revlon's ratings will remain somewhat constrained by the highly competitive nature of the cosmetics and personal care category in which it operates and the company's still relatively high adjusted leverage (5.8 times). Revlon's ratings could be upgraded if it is able to successfully demonstrate meaningful organic growth while maintaining profitability at current levels and reducing its leverage. These ratings of Revlon were affirmed (LGD point estimates revised): -- Corporate family rating of B2; -- Probability of default rating of B2; -- $160 million senior secured asset based revolving credit facility due 2012 at Ba3 (LGD 2, 28%) -- $815 million senior secured term loan facility of Ba3 (LGD 2, 28%); -- $330 million 9 _% Senior Secured Notes due 2015 of B3 (LGD 5, 74%), and -- Speculative grade liquidity rating of SGL-2 These ratings of Revlon were assigned: -- $140 million senior secured asset based revolving credit facility due March 2014 at Ba2 (LGD 1, 2%); and -- $800 million senior secured term loan facility due March 2017 at Ba3 (LGD 3, 31%). -- Outlook is stable The last rating action regarding Revlon was on November 2, 2009, when Moody's upgraded the company's corporate family rating to B2 from B3, its Speculative Grade Liquidity rating to SGL-2 from SGL- 3 with a stable outlook. Headquartered in New York, Revlon Consumer Products Corporation is a worldwide cosmetics, skin care, fragrance, and personal care products company. The company is a wholly-owned subsidiary of Revlon, Inc., which is majority-owned by MacAndrews & Forbes, which is in turn wholly-owned by Ronald O. Perelman. Revlon's net sales for the twelve-month period ended December 2009 were approximately $1.3 billion. M&F beneficially owns approximately 77.4% of Revlon's outstanding Class A common stock, 100% of Revlon's Class B common stock and 78.8% of Revlon's combined outstanding shares of Class A and Class B common stock, which together represent approximately 77.2% of the combined voting power of such shares. RJ YORK: Taps Armstrong Teasdale as Bankruptcy Counsel ------------------------------------------------------ RJ York SSG, LLC, has sought permission from the U.S. Bankruptcy Court for the Eastern District of Missouri to employ Armstrong Teasdale, LLP, as bankruptcy counsel. Armstrong Teasdale will, among other things: a. attend meetings and negotiate with representatives of creditors and other parties-in-interest; b. prepare motions, applications, answers, orders, reports and papers necessary to the administration of the estate; c. negotiate and prepare a plan of reorganization, disclosure statement and related agreements and/or documents, and take any necessary action on behalf of the Debtor to obtain approval of the disclosure statement and confirmation of the plan; and d. represent the Debtor in connection with obtaining post- petition loans. Armstrong Teasdale will apply for compensation for professional services rendered in connection with the Chapter 11 case, subject to the Court's approval and in compliance with applicable provisions of the U.S. Bankruptcy Code, the Local Rules and orders of the Court, on an hourly basis plus reimbursement of actual, necessary expenses and charges that Armstrong Teasdale incurs. The Debtor assures the Court that Armstrong Teasdale is "disinterested" as that term is defined in Section 101(14) of the Bankruptcy Code. St. Louis, Missouri-based RJ York SSG, LLC, is a property developer. The Company filed for Chapter 11 bankruptcy protection on February 2, 2010 (Bankr. E.D. Mo. Case No. 10-40876). David L. Going, Esq., and Susan K. Ehlers, Esq., at Armstrong, Teasdale et al., assist the Company in its restructuring effort. The Company listed $10,000,001 to $50,000,000 in assets and $10,000,001 to $50,000,000 in liabilities. ROBERTO ALVARADO: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Roberto Feliciano Alvarado dba Supermercado Danny aka Centro Ahorros . PO Box 898 Salinas, PR 00751 Bankruptcy Case No.: 10-01324 Chapter 11 Petition Date: February 24, 2010 Court: United States Bankruptcy Court District of Puerto Rico (Ponce) Debtor's Counsel: Nydia Gonzalez Ortiz, Esq. Santiago & Gonzalez 11 Calle Betances Yauco, PR 00698 Tel: (787) 267-2205 Email: sgecf@yahoo.com According to the schedules, the Company has assets of $1,566,802, and total debts of $1,790,467. 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/prb10-01324.pdf RONALD EDWARDS: Case Summary & 3 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Ronald A. Edwards Construction Company, Inc. 2920 Oak Circle Columbus, GA 31907 Bankruptcy Case No.: 10-40232 Chapter 11 Petition Date: February 24, 2010 Court: United States Bankruptcy Court Middle District of Georgia (Columbus) Debtor's Counsel: Stephen G. Gunby, Esq. P.O. Box 1846 Columbus, GA 31902 Tel: (706) 324-3448 Fax: (706) 327-3958 Email: sggunby@bellsouth.net 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 3 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/gamb10-40232.pdf The petition was signed by Ronald A. Edwards, CEO/president of the Company. SANTA CLARA: Wants Access to East West Cash to Pay Operating Costs ------------------------------------------------------------------ Santa Clara Square, LLC, asks the U.S. Bankruptcy Court for the Northern District of California for authorization to use the cash collateral of East West Bank, a secured creditor, to pay its operating expenses for the post-petition period (end of December 2009, and January 2010.) The outstanding expenses are: Thoits Insurance: $2,026 City of Santa Clara (Utilities): $657 Bay Alarm: $281 Starlite Sweeper: $1,100 Martinez Gardening: $600 Trustee's Fees $325 Alpha Invest. & Prop. Mgt. $2,500 Total: $7,490 East West consented to the Debtor's use of cash collateral to pay these amounts, with payment to be made from funds held in the debtor-in-possession account (current balance of $363,240.) Los Altos, California-based Santa Clara Square, LLC, filed for Chapter 11 bankruptcy protection on December 21, 2009 (Bankr. N.D. Calif. Case No. 09-61196). Lawrence A. Jacobson, Esq., at the Law Offices of Cohen and Jacobson, assists the Company in its restructuring effort. The Company listed $10,000,001 to $50,000,000 in assets and liabilities in its petition. SEARS HOLDINGS: S&P Changes Outlook to Stable; Keeps 'BB-' Rating ----------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Hoffman Estates, Illinois-based Sears Holdings Corp. to stable from negative. At the same time, S&P affirmed all ratings on Sears, including the 'BB-' corporate credit rating on the company. S&P based the rating affirmations and outlook revision on its analysis of Sears' better-than-expected operating performance in the fourth quarter ended Jan. 30, 2010, as well as improving credit measures because of higher profitability and modest debt reduction. Total debt to EBITDA declined to about 3.6x in the fiscal year ended Jan. 30, 2010, from 4.2x a year ago. The ratings on Sears reflect the relatively high business risk associated with Sears department stores and Kmart discount department stores, weak profitability relative to its peers, and S&P's expectation that both concepts will still face obstacles in improving sales and store productivity. S&P is also concerned about the company's historical use of cash flow to fund share repurchases and its diminishing reinvestment of cash for capital expenditures. Despite continued weakness in sales, Sears reported better-than- expected operating results for the fourth quarter ended Jan. 30, 2010, as a result of improving gross margin rates and cost reduction. Domestic comparable-store sales declined 2.5% after an increase of 1.7% at Kmart and a decline of 6.1% at Sears' domestic operations. For the fiscal year ended Jan. 30, 2010, comparable- store sales declined 5.1%; there was a 0.8% decline at Kmart and an 8.7% decline at Sears' domestic operations. However, well- controlled inventory levels restored gross margin; this, along with cost reduction, contributed to improving profitability in the important fourth quarter. As a result, EBITDA increased to $992 million (including pension expense) in the fourth quarter from $885 million a year ago. Despite a 1.7% decline in comparable-store sales, operating results also recovered in the fourth quarter at Sears Canada because of effective expense control and tight inventory management. Although sales trends are improving at Kmart, S&P expects sales to remain soft at Sears' domestic operations as a result of high unemployment and a weak housing market, which hampers demand for high ticket products such as home appliances. S&P remain concerned about management's ability to revive sales and improve store productivity in difficult economic and housing conditions amid an intensely competitive landscape within the department store segment. Still, S&P expects sales and earnings to make some progress in fiscal 2010 given Sears' disciplined inventory control and tight expense management, which mitigates some of the effect of weak sales. SELDEN ENTERPRISES: Voluntary Chapter 11 Case Summary ----------------------------------------------------- Debtor: Selden Enterprises Limited Partnership 4124 North Ryan Road Creston, CA 93432 Bankruptcy Case No.: 10-10865 Chapter 11 Petition Date: February 24, 2010 Court: United States Bankruptcy Court Central District of California (Santa Barbara) Judge: Robin Riblet Debtor's Counsel: Peter Susi, Esq. 7 W Figueroa 2nd Fl Santa Barbara, CA 93101-3191 Tel: (805) 965-1011 Fax: (805) 965-7351 Email: cheryl@msmlaw.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 $9,150,395, and total debts of $6,427,742. The Company says it does not have unsecured creditors who are non insiders when they filed their petition. The petition was signed by Todd Fisher. SENIAH CORP: Case Summary & 4 Largest Unsecured Creditors --------------------------------------------------------- Debtor: Seniah Corp. c/o William K. Haines, Jr. 8050 Freedom Avenue NW North Canton, OH 44720 Bankruptcy Case No.: 10-60620 Chapter 11 Petition Date: February 24, 2010 Court: United States Bankruptcy Court Northern District of Ohio (Canton) Judge: Russ Kendig Debtor's Counsel: Patrick J. Keating, Esq. Buckingham, Doolittle & Burroughs LLP 3800 Embassy Parkway, Suite 300 Akron, OH 44333 Tel: (330) 258-6554 Fax: (330) 252-5554 Email: pkeating@bdblaw.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 4 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/ohnb10-60620.pdf The petition was signed by William K. Haines, Jr., president of the Company. SHALLOWBAG MARINA: Case Summary & 9 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Shallowbag Marina, LP 2839 Paces Ferry Road, Ste. 880 Atlanta, GA 30339 Bankruptcy Case No.: 10-65225 Chapter 11 Petition Date: February 24, 2010 Court: United States Bankruptcy Court Northern District of Georgia (Atlanta) Judge: Robert Brizendine Debtor's Counsel: Gregory D. Ellis, Esq. Lamberth, Cifelli, Stokes, Ellis & Nason Suite 550, 3343 Peachtree Road, NE Atlanta, GA 30326-1022 Tel: (404) 262-7373 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 9 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/ganb10-65225.pdf The petition was signed by Stephanie A. Haugen. SHEARIN FAMILY: Bankr. Administrator Wants Conversion or Dismissal ------------------------------------------------------------------ Marjorie K. Lynch, the bankruptcy administrator for the Eastern District of North Carolina, has asked the U.S. Bankruptcy Court for the Eastern District of North Carolina to convert Shearin Family Investments, LLC's Chapter 11 bankruptcy case to Chapter 7 or, in the alternative, dismiss the Debtor's case. Ms. Lynch says that the Debtor has failed to pay its quarterly fees for the fourth quarter of 2009. Based in Rocky Mount, North Carolina, Shearin Family Investments, LLC owns and operates a condominium resort in Carteret County, in North Carolina. The company filed for Chapter 11 relief on Oct. 13, 2008 (Bankr. E.D. N.C. Case No. 08-07082). Amy M. Faber, Esq., at Stubbs & Perdue, P.A., and Trawick H. Stubbs, Jr., Esq., at Stubbs & Perdue, P.A., represent the Debtor as counsel. When the Debtor filed for protection from its creditors, it listed assets of $46,327,546 and debts of $49,260,007. SIRIUS XM RADIO: Enterprise Value 18 Times Projected 2010 EBITDA ---------------------------------------------------------------- The Wall Street Journal's Martin Peers wrote Friday that Sirius XM Radio's valuation is "out of this world." Mr. Peers explained that Sirius' financial statements indicate it has 3.6 billion shares outstanding. However, including the 40% that Liberty Media Corporation would get from converting preferred shares in Sirius, the outstanding shares would be 6.45 billion. "On Sirius's stock price of $1.07, that means the company's enterprise value is a whopping 18 times estimated 2010 earnings before interest, taxes, depreciation and amortization, or Ebitda," Mr. Peers wrote for the Journal. Mr. Peers noted that accounting analyst Robert Willens said accounting rules require a company to exclude "potential common shares" from computation of its share count if it is losing money from continuing operations. Sirius on Thursday reported its third consecutive annual net loss. Sirius posted a net loss of $342.790 million for the year ended December 31, 2009, from net losses of $5.313 billion for 2008 and $565.252 million for 2007. Total revenue was $2.472 billion for 2009 compared to $1.663 billion for 2008 and $922.066 million for 2007. Mr. Peers recalled Liberty obtained the preferred stock as part payment for its bailout of Sirius in February 2009. Liberty paid $12,500 for the preferred shares, in addition to providing loans. "Sirius has since repaid those loans, but the common stock underlying the preferred shares now is valued at $2.8 billion," Mr. Peers said. "The current valuation is hard to justify, even assuming Sirius's subscription service continues to expand. A more reasonable enterprise value to the Ebitda multiple might be about eight, higher than that of cable-TV operators whose business is somewhat similar, which suggests the stock is worth only 26 cents," Mr. Peers said. In its 2009 annual report on Form 10-K, Sirius said Liberty has significant influence over its business and affairs. Sirius said pursuant to the terms of the preferred stock held by Liberty Media, Sirius cannot take certain actions, such as certain issuances of equity or debt securities, without the consent of Liberty Media. Additionally, Liberty Media has the right to designate six members of Sirius' 15-member board of directors. "The interests of Liberty Media may differ from our interests. The extent of Liberty Media's stock ownership in us also may have the effect of discouraging offers to acquire control of us," Sirius said. About Sirius XM Radio Based in New York, Sirius XM Radio Inc. has two principal wholly owned subsidiaries, XM Satellite Radio Holdings Inc. and Satellite CD Radio Inc. XM Satellite Radio Holdings Inc. owns XM Satellite Radio Inc., the operating company for the XM satellite radio service. Satellite CD Radio Inc. owns the Federal Communications Commission license associated with the SIRIUS satellite radio service. XM Satellite Radio Inc. owns XM Radio Inc., the holder of the FCC license associated with the XM satellite radio service. In July 2008, the Company's wholly owned subsidiary, Vernon Merger Corporation, merged with and into XM Satellite Radio Holdings Inc. and, as a result, XM Satellite Radio Holdings Inc. became Sirius' wholly owned subsidiary. As of December 31, 2009, the Company had total assets of $7.263 billion against total liabilities of $7.226 billion. * * * As reported by the Troubled Company Reporter on February 3, 2010, Moody's Investors Service upgraded Sirius XM Radio Inc.'s Corporate Family Rating to Caa1 from Ca, Probability of Default Rating to B3 from Caa3, and speculative-grade liquidity rating to SGL-2 from SGL-3. The upgrades reflect Moody's view that continued expected improvement in the company's operating results and recent refinancing actions to term out debt have improved its liquidity position and significantly lowered near-term default risk. Realized synergies from the merger of Sirius and XM and stabilization of the subscriber base is driving a significant shift in Sirius XM's earnings performance, with EBITDA turning positive in 2009 for the first time in the company's history. On January 29, the TCR said Standard & Poor's Ratings Services raised its corporate credit rating on Sirius XM Radio and its subsidiaries, XM Satellite Radio Holdings Inc. and XM Satellite Radio Inc. (which S&P analyze on a consolidated basis), to 'B' from 'B-'. SIRIUS XM RADIO: Reports $342 Million Net Loss for 2009 ------------------------------------------------------- SIRIUS XM Radio on Thursday reported its third consecutive annual net loss. SIRIUS XM Radio posted a net loss of $342.790 million for the year ended December 31, 2009, from net losses of $5.313 billion for 2008 and $565.252 million for 2007. Total revenue was $2.472 billion for 2009 compared to $1.663 billion for 2008 and $922.066 million for 2007. As of December 31, 2009, the Company had total assets of $7.263 billion against total liabilities of $7.226 billion. In a news release, SIRIUS XM Radio said pro forma 2009 revenue was $2.53 billion, up 4% over 2008 pro forma revenue of $2.44 billion, and pro forma adjusted income from operations of $463 million, versus ($136) million in 2008. "2009 was a notable year of firsts for SIRIUS XM: The first full year of positive pro forma adjusted income from operations and the first full year of positive free cash flow in the company's history," said Mel Karmazin, the Chief Executive Officer of SIRIUS XM. "We demonstrated considerable operating momentum in the fourth quarter -- the addition of over 250,000 subscribers, ARPU growth, revenue growth, improved SAC, and continued operating cost reductions. These gains position us to deliver on our 2010 guidance." In the fourth quarter 2009, the Company's pro forma average revenue per subscriber (ARPU) grew to $10.92 from $10.65 in the fourth quarter of 2008. The average self-pay monthly customer churn rate was 2.0% in the fourth quarter of 2009, as compared with 1.8% in the fourth quarter of 2008. Fourth quarter of 2009 pro forma revenue was $684 million, up 6% from fourth quarter 2008 pro forma revenue of $644 million. Subscriber acquisition costs (SAC) per gross subscriber addition was $64 in the fourth quarter of 2009, an improvement of 9% over the $70 in SAC per gross subscriber addition in the fourth quarter of 2008. In the fourth quarter of 2009, SIRIUS XM achieved pro forma adjusted income from operations of $115 million as compared with $32 million in the fourth quarter of 2008. Free cash flow in the quarter of 2009 was $150 million compared to $26 million in the fourth quarter of 2008. The pro forma fourth quarter 2009 net loss was ($25) million as compared with ($248) million in the fourth quarter of 2008. On a GAAP basis, the fourth quarter 2009 net income was $14 million compared to a loss of ($246) million in the 2008 quarter. "The $599 million improvement in full-year pro forma adjusted income from operations illustrates the strength of our business model and also demonstrates the economic benefit generated by the SIRIUS-XM merger in July 2008," said David Frear, the Company's Executive Vice President and Chief Financial Officer. "With over $380 million in cash, positive free cash flow and continued growth in adjusted income from operations, our financial condition has never been stronger," Mr. Frear added. 2010 Outlook Looking to 2010, the Company expects full-year revenue of over $2.7 billion. Free cash flow is expected to remain positive in 2010. "We expect to add over 500,000 net subscribers this year, exceeding the company's previous subscriber high of 19 million at the end of 2008. We also expect this year's adjusted income from operations to be up approximately 20% to $550 million," said Mr. Karmazin. 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?554e A full-text copy of the Company's earnings release is available at no charge at http://ResearchArchives.com/t/s?554f Donnelly Employment Deal On January 14, 2010, the Company entered into a new employment agreement with Patrick L. Donnelly to continue to serve as its Executive Vice President, General Counsel and Secretary, through January 13, 2014. The Employment Agreement supersedes Mr. Donnelly's existing employment agreement and provides for an initial base salary of $575,000, with specified increases. If Mr. Donnelly's employment is terminated without cause or he terminates his employment for good reason, the Company is obligated to pay him a lump sum payment equal to his then annual salary and the cash value of the bonus last paid or payable to him in respect of the preceding fiscal year and to continue his health and life insurance benefits for one year. The Company's obligations to pay the amounts are subject to Mr. Donnelly's execution of a valid release of claims against the Company and his compliance with certain restrictive covenants. The Company also has agreed to indemnify Mr. Donnelly for any excise taxes that may be imposed on him under Section 280G of the Internal Revenue Code. The Company granted Mr. Donnelly an option to purchase 13,163,495 shares of the Company's common stock at an exercise price of $0.6669 per share (the last sale price of the Company's common stock on the Nasdaq Global Select Market prior to the execution of the Employment Agreement). The Option will generally vest in four equal installments on each of January 14, 2011, January 14, 2012, January 14, 2013 and January 14, 2014, subject to earlier acceleration or termination under certain circumstances. About Sirius XM Radio Based in New York, Sirius XM Radio Inc. has two principal wholly owned subsidiaries, XM Satellite Radio Holdings Inc. and Satellite CD Radio Inc. XM Satellite Radio Holdings Inc. owns XM Satellite Radio Inc., the operating company for the XM satellite radio service. Satellite CD Radio Inc. owns the Federal Communications Commission license associated with the SIRIUS satellite radio service. XM Satellite Radio Inc. owns XM Radio Inc., the holder of the FCC license associated with the XM satellite radio service. In July 2008, the Company's wholly owned subsidiary, Vernon Merger Corporation, merged with and into XM Satellite Radio Holdings Inc. and, as a result, XM Satellite Radio Holdings Inc. became Sirius' wholly owned subsidiary. * * * As reported by the Troubled Company Reporter on February 3, 2010, Moody's Investors Service upgraded Sirius XM Radio Inc.'s Corporate Family Rating to Caa1 from Ca, Probability of Default Rating to B3 from Caa3, and speculative-grade liquidity rating to SGL-2 from SGL-3. The upgrades reflect Moody's view that continued expected improvement in the company's operating results and recent refinancing actions to term out debt have improved its liquidity position and significantly lowered near-term default risk. Realized synergies from the merger of Sirius and XM and stabilization of the subscriber base is driving a significant shift in Sirius XM's earnings performance, with EBITDA turning positive in 2009 for the first time in the company's history. On January 29, the TCR said Standard & Poor's Ratings Services raised its corporate credit rating on Sirius XM Radio and its subsidiaries, XM Satellite Radio Holdings Inc. and XM Satellite Radio Inc. (which S&P analyze on a consolidated basis), to 'B' from 'B-'. SORENSON HUNTING: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Sorenson Hunting Lodge and Resort, Inc. fdba Spring Lake Hunting Lodge and Resort fdba Spring Lake Hunt Club 44915 218th Street Oldham, SD 57041 Bankruptcy Case No.: 10-40099 Chapter 11 Petition Date: February 24, 2010 Court: United States Bankruptcy Court District of South Dakota (Southern (Sioux Falls) Judge: Charles L. Nail, Jr. Debtor's Counsel: A. Thomas Pokela, Esq. PO Box 2621 Sioux Falls, SD 57101-2621 Tel: (605) 338-6151 Email: thomaspokela@qwestoffice.net Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $500,001 to $1,000,000 According to the schedules, the Company has assets of $1,630,000, and total debts of $881,845. 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/sdb10-40099.pdf The petition was signed by Brad Lingbeck, director of the Company. SPANSION INC: Donald Smith Owns Zero Shares of Class A Stock ------------------------------------------------------------ Donald Smith & Co., Inc., disclosed with the U.S. Securities and Exchange Commission on February 11, 2010, that it beneficially owns zero shares of Spansion Inc. Class A Common Stock. 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: Jennison Discloses 0% Ownership of Stock ------------------------------------------------------ Jennison Associates LLC discloses with the U.S. Securities and Exchange Commission on February 12, 2010, that it beneficially owns zero shares of Spansion Inc. Common Stock. Jennison Associates furnishes investment advice to several investment companies, insurance separate accounts, and institutional clients -- the Managed Portfolios. As a result of its role as investment adviser of the Managed Portfolios, Jennison may be deemed to be the beneficial owner of the shares of Spansion Inc.'s Common Stock held by those Managed Portfolios. Prudential Financial, Inc. indirectly owns 100% of equity interests of Jennison. As a result, Prudential may be deemed to have the power to exercise or to direct the exercise of the voting or dispositive power that Jennison may have with respect to the Issuer's Common Stock held by the Managed Portfolios. About Spansion Inc. Spansion Inc. (Pink Sheets: SPSNQ) -- http://www.spansion.com/-- is a Flash memory solutions provider. Spansion is a former joint venture of AMD and Fujitsu. Spansion Inc., Spansion LLC, Spansion Technology LLC, Spansion International, Inc., and Cerium Laboratories LLC filed voluntary petitions for Chapter 11 on March 1, 2009 (Bankr. D. Del. Lead Case No. 09-10690). On February 9, 2009, Spansion's Japanese subsidiary, Spansion Japan Ltd., voluntarily entered into a proceeding under the Corporate Reorganization Law (Kaisha Kosei Ho) of Japan to obtain protection from its creditors as part of the company's restructuring efforts. None of Spansion's subsidiaries in countries other than the United States and Japan are included in the U.S. or Japan filings. Michael S. Lurey, Esq., Gregory O. Lunt, Esq., and Kimberly A. Posin, Esq., at Latham & Watkins LLP, have been tapped as bankruptcy counsel. Michael R. Lastowski, Esq., at Duane Morris LLP, is the Delaware counsel. Epiq Bankruptcy Solutions LLC, is the claims agent. The United States Trustee has appointed an official committee of unsecured creditors in the case. As of September 30, 2008, Spansion disclosed total assets of US$3,840,000,000, and total debts of US$2,398,000,000. Spansion Japan Ltd. filed a Chapter 15 petition on April 30, 2009 (Bankr. D. Del. Case No. 09-11480). The Chapter 15 Petitioner's counsel is Gregory Alan Taylor, Esq., at Ashby & Geddes. It said that Spansion Japan had US$10 million to US$50 million in assets and US$50 million to US$100 million in debts. Bankruptcy Creditors' Service, Inc., publishes Spansion Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Spansion Inc. and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000) SPANSION INC: Reports $514,059,000 Net Loss for 2009 ---------------------------------------------------- Spansion Inc. filed with the Court its 2009 annual report on form 10-K with the Securities and Exchange Commission on February 12, 2010. A full-text copy of Spansion Inc.'s 10-k is available for free at http://ResearchArchives.com/t/s?52b4 Spansion Inc. Consolidated Statement of Operations For Year Ended December 27, 2009 Net Sales $1,059,408,000 Net sales to related parties 351,245,000 -------------- Total net sales 1,410,653,000 Cost of sales 1,103,757,000 Research and Development 136,449,000 Sales, general and administrative 216,298,000 In-process Research and Development - Restructuring charges 46,852,000 Asset impairment charges 12,538,000 -------------- Operating loss before reorganization items (105,241,000) Other Income (expense) Interest and other income 4,038,000 Interest expense (50,976,000) Gain on deconsolidation of subsidiary 30,100,000 -------------- Loss before reorganization items (122,079,000) Reorganization Items (391,383,000) -------------- Loss before income taxes (513,462,000) (Provision) Benefit for income taxes (597,000) -------------- Net Loss ($514,059,000) ============== Spansion Inc. Consolidated Statement of Cash Flows For Year Ended December 27, 2009 Cash Flows from Operating Activities: Net loss ($514,059,000) Adjustment to reconcile net loss to net cash provided by operating activities: Depreciation, amortization 168,368,000 Asset impairment charges 14,045,000 Provision for doubtful accounts 19,832,000 Provision for deferred income taxes 18,000 Net loss on sale and disposal 76,000 Compensation recognized under ESOP 12,419,000 Gain on deconsolidation of subsidiary (30,100,000) Gain on sale of Suzhou plant (4,669,000) Loss from write-off of rejected leases 3,090,000 Amortization of debt premium and discount 1,540,000 Changes in operating assets and liabilities: Decrease in accounts receivables (248,352,000) Decrease(increase) in inventories 180,569,000 (Increase)decrease in prepaid expenses (10,448,000) Increase in other assets (5,165,000) Increase(decrease) in accounts payable 629,396,000 (Decrease) increase in income taxes payable (2,708,000) Increase(decrease) in deferred income 11,665,000 Increase(decrease) in deferred income 11,032,000 -------------- Net cash provided by operating activities 236,549,000 Cash Flows from Investing Activities: Proceeds from sale property, plant, equip. 4,352,000 Purchases of property, plant, equipment (29,713,000) Loan made to an investee (5,263,000) Cash proceeds from PTI 15,539,000 Proceeds from redemption of ARS 14,775,000 Cash decrease due to deconsolidation (52,092,000) Cash decreases due to the sale of Suzhou (10,431,000) -------------- Net cash provided by investing activities (62,833,000) Cash Flows From Financing Activities: Proceeds from borrowings 117,758,000 Payments on debt and capital lease (79,863,000) -------------- Net cash provided by financing activities 37,895,000 Effect of exchange rate changes on cash (3,095,000) -------------- Net increase in cash and equivalents 208,516,000 Cash and cash equiv. beginning period 116,387,000 -------------- Cash and cash equiv. at end of period $324,903,000 ============== About Spansion Inc. Spansion Inc. (Pink Sheets: SPSNQ) -- http://www.spansion.com/-- is a Flash memory solutions provider. Spansion is a former joint venture of AMD and Fujitsu. Spansion Inc., Spansion LLC, Spansion Technology LLC, Spansion International, Inc., and Cerium Laboratories LLC filed voluntary petitions for Chapter 11 on March 1, 2009 (Bankr. D. Del. Lead Case No. 09-10690). On February 9, 2009, Spansion's Japanese subsidiary, Spansion Japan Ltd., voluntarily entered into a proceeding under the Corporate Reorganization Law (Kaisha Kosei Ho) of Japan to obtain protection from its creditors as part of the company's restructuring efforts. None of Spansion's subsidiaries in countries other than the United States and Japan are included in the U.S. or Japan filings. Michael S. Lurey, Esq., Gregory O. Lunt, Esq., and Kimberly A. Posin, Esq., at Latham & Watkins LLP, have been tapped as bankruptcy counsel. Michael R. Lastowski, Esq., at Duane Morris LLP, is the Delaware counsel. Epiq Bankruptcy Solutions LLC, is the claims agent. The United States Trustee has appointed an official committee of unsecured creditors in the case. As of September 30, 2008, Spansion disclosed total assets of US$3,840,000,000, and total debts of US$2,398,000,000. Spansion Japan Ltd. filed a Chapter 15 petition on April 30, 2009 (Bankr. D. Del. Case No. 09-11480). The Chapter 15 Petitioner's counsel is Gregory Alan Taylor, Esq., at Ashby & Geddes. It said that Spansion Japan had US$10 million to US$50 million in assets and US$50 million to US$100 million in debts. Bankruptcy Creditors' Service, Inc., publishes Spansion Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Spansion Inc. and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000) TENNECO INC: Fitch Upgrades Issuer Default Rating to 'BB+/RR1' -------------------------------------------------------------- Fitch Ratings has upgraded Tenneco Inc.'s Issuer Default Rating and outstanding debt: -- IDR to 'B+' from 'B'; -- Senior secured revolving credit facility to 'BB+/RR1' from 'BB/RR1'; -- Senior secured term loan to 'BB+/RR1' from 'BB/RR1'; -- Senior secured tranche B-1 letter of credit/revolving loan facility to 'BB+/RR1' from 'BB/RR1'; -- Senior secured second lien notes to 'BB/RR2' from 'CCC/RR6'; -- Senior unsecured notes to 'B-/RR6' from 'CCC/RR6'; -- Subordinated notes to 'B-/RR6' from 'CCC/RR6'. The Rating Outlook is Positive. Approximately $1.2 billion of debt outstanding is covered by these ratings. The upgrade is supported by improvements in the credit profile, Fitch's expectations for additional deleveraging in 2010 and an improved global automotive environment. TEN's credit profile improved in the fourth quarter because of solid profitability, strong free cash flow, and debt reduction, all of which combined to drive gross leverage materially lower. The upgrade is also driven by the strong liquidity position and the outlook for significant revenue growth. This is due to expectations for higher light vehicle production globally and new opportunities for sales to commercial vehicles, which TEN has forecasted will be a significant addition to original equipment revenues going forward. Furthermore, during the challenges in 2009 the company took restructuring actions that should increase operating efficiencies and allow for margin expansion. The Positive Outlook is driven by Fitch's view that the company's credit profile will continue to improve, the profile could be strong for the new rating over the next twelve months and further positive ratings actions may be warranted if TEN's favorable operating trend persists and if the industry recovery continues. Concerns remain centered on revenue concentration in Europe given Fitch's outlook for flat production, the company's underfunded pension plan, exposure to commodities, and the possibility that working capital requirements may negatively impact free cash flow as a result of significant revenue growth. While the company's sales are globally diversified, 44% of its sales in 2009 were from Europe, South America and India, which is a concern. Fitch forecasts that European light vehicle sales will decline in 2010 due to the lack of government incentives to boost vehicle demand; as a result, production volumes are forecasted to slightly decline. This credit concern is mitigated by TEN's somewhat diverse sales mix. Sales to the original equipment manufacturers accounted for approximately 78% of sales and aftermarket sales contributed 22% to the top line in 2009. Furthermore, Fitch believes that material new wins, particularly in the non-automotive area, should provide solid top-line growth over the next several years in the event of continued weakness in automotive production. The Recovery Ratings on the senior secured facilities (revolving credit facility, Term Loan A, and Tranche B1) remain 'RR1' which implies a recovery in the range of 91%-100%. With stronger earnings, Fitch believes the outlook for recovery ratings for the second lien notes has improved to 'RR2' from 'RR6'; the new recovery rating implies a recovery between 71% and 90%. The senior unsecured and subordinated notes recovery ratings remain 'RR6' which reflects a recovery in the range of 0%-10%. The recovery ratings reflect Fitch's recovery expectations under a scenario in which distressed enterprise value is allocated to the various debt classes. In 2009, free cash flow was $121 million and Fitch expects it to be positive again in 2010 given the company's cash preservation initiatives. With greater earnings and reduced borrowings, leverage at the end of the recent quarter declined to 3.5 times (x), a significant change from 5.0x at the end of the prior quarter. While profits have driven the earnings portion of the equation, the company's equity offering in November 2009 generated net proceeds of $188 million which was used for debt reduction. The combination of these two factors drove the significant sequential change. Fitch projects that leverage could fall to below 3.0x during 2010. Liquidity at the end of 2009 was $797 million which consisted of $167 million of cash on the balance sheet and $630 million on the revolving credit facility. In addition, the company has a U.S. accounts receivable program which can be used up to $100 million. TEN also has European accounts receivable programs which benefits the company's liquidity position; some of these European programs can be cancelled with 30 days notice. Importantly, TEN does not have any significant debt maturities until 2012 when $700 million of the $830 million of the credit facility expires. TEN had a $249 million underfunded pension obligation, which due to losses in the equity and fixed income markets in 2008, is likely to require incremental contributions over the near term. At the end of 2008, the pension funding status was 59%. The company expects to make 2010 contributions of $54 million to the plans. Over the longer term, TEN's position in the emissions segment positions the company well to expand its customer base and volumes. Also over a longer time horizon, product demand should increase given plans for tighter emission standards and expected growth in revenues and profits that should come from TEN's migration to more technological, value-added products which should also support margins. THOMAS KAMINSKY: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Joint Debtors: Thomas O. Kaminsky Cathy S. Kaminsky aka Catherine Simic Kaminsky 5727 E. Monterosa St. Phoenix, Az 85018 Bankruptcy Case No.: 10-04692 Chapter 11 Petition Date: February 24, 2010 Court: United States Bankruptcy Court District of Arizona (Phoenix) Debtors' Counsel: John N. Skiba, Esq. Jackson White, PC 40 North Center Street, Suite 200 Mesa, AZ 85201 Tel: (480) 464-1111 Fax: (480) 464-5692 Email: jskiba@jacksonwhitelaw.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 $1,993,353 and total debts of $3,089,931. 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/azb10-04692.pdf The petition was signed by the Joint Debtors. THORNBURG MORTGAGE: Creditors Seek to Cut Venable's Fees -------------------------------------------------------- A group of unsecured creditors has criticized as excessive a request by TMST Inc.'s counsel for almost $500,000 in fees for certain work done in the real estate investment firm's Chapter 11 case and asked for the fees to be reduced, according to Law360. Based in Santa Fe, New Mexico, Thornburg Mortgage Inc. (NYSE: TMA) -- http://www.thornburgmortgage.com/-- was a single-family residential mortgage lender focused principally on prime and super-prime borrowers seeking jumbo and super-jumbo adjustable rate mortgages. It originated, acquired, and retained investments in adjustable and variable rate mortgage assets. Its ARM assets comprised of purchased ARM assets and ARM loans, including traditional ARM assets and hybrid ARM assets. Thornburg Mortgage, Inc., and its four affiliates filed for Chapter 11 on May 1 (Bankr. D. Md. Lead Case No. 09-17787). Thornburg has changed its name to TMST, Inc. Judge Duncan W. Keir is handling the case. David E. Rice, Esq., at Venable LLP, in Baltimore, Maryland, has been tapped as counsel. Orrick, Herrington & Sutcliffe LLP is employed as special counsel. Jim Murray, and David Hilty, at Houlihan Lokey Howard & Zukin Capital, Inc., have been tapped as investment banker and financial advisor. Protiviti Inc. has also been engaged for financial advisory services. KPMG LLP is the tax consultant. Epiq Systems, Inc., is claims and noticing agent. In its bankruptcy petition, Thornburg listed total assets of $24,400,000,000 and total debts of $24,700,000,000, as of January 31, 2009. On October 28, 2009, the Court approved the appointment of Joel I. Sher as the Chapter 11 Trustee for the Company, TMST Acquisition Subsidiary, Inc., TMST Home Loans, Inc. and TMST Hedging Strategies, Inc. TIMOTHY RAY: Gets Interim Okay to Use Cash Collateral ----------------------------------------------------- Timothy Ray Wright obtained interim authorization from the Hon. Sarah S. Curley of the U.S. Bankruptcy Court for the District of Arizona to use cash collateral until May 1, 2010. Bank of America, N.A. (BofA) has consented to the Debtor's request to use the cash collateral. As security for repayment of an indebtedness in an aggregate amount of at least $9,832,349, BofA holds a lien on properties. A list of the properties, along with a copy of the budget, is available for free at: http://ResearchArchives.com/t/s?5553 BofA hasn't consented to the surcharge of the BofA Real Property Collateral or any of the BofA Cash Collateral. The Debtor may not surcharge the BofA Real Property Collateral or any of the BofA cash collateral and surcharge cash collateral to maintain property rental business as a going concern. The Court has set a final hearing for March 24, 2010, at 1:30 p.m. on the Debtor's request to use cash collateral. BofA is represented by Gallagher & Kennedy PA. Phoenix, Arizona-based Timothy Ray Wright -- dba Timothy R. Wright and Timothy Wright -- filed for Chapter 11 bankruptcy protection on December 14, 2009 (Bankr. D. Ariz. Case No. 09-32244). Howard C. Meyers, Esq., at Burch & Cracchiolo, P.A., 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. TISHMAN SPEYER: Bank Debt Trades at 21% Off in Secondary Market --------------------------------------------------------------- Participations in a syndicated loan under which Tishman Speyer Properties is a borrower traded in the secondary market at 78.92 cents-on-the-dollar during the week ended Friday, Feb. 26, 2010, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 0.96 percentage points from the previous week, The Journal relates. The Company pays 175 basis points above LIBOR to borrow under the facility. The bank loan matures on Dec. 27, 2012, and carries Moody's Ba2 rating. It is not rated by Standard & Poor's. The debt is one of the biggest gainers and losers among 188 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. Tishman Speyer Properties -- http://www.tishmanspeyer.com/-- lays claim to New York City's Chrysler Building and Rockefeller Center. The property company invests in, develops, and/or operates commercial real estate. Other well known holdings include Berlin's Q 205 project (the first post-reunification development in the city's center) and Chicago's Franklin Center (one of the city's largest office properties). The company owns or has developed more than 115 million sq. ft. in Asia, Europe, South America, and the US since it was founded in 1978. The company also has projects in India, China, and Brazil, and owns some 92,000 residential units around the world. TLC VISION: Strategic Turnaround Owns 1.08% of Common Stock ----------------------------------------------------------- Strategic Turnaround Equity Partners LP (Cayman), et al., disclosed that as of February 23, 2010, they may be deemed to beneficially own shares of TLC Vision Corp.'s common stock, par value $0.01 per share: Shares Beneficially Company Owned Percentage ------- ------------ ---------- Trinad Capital Master Fund, Ltd. 2,087,296 4.13% Trinad Management, LLC 2,087,296 4.13% Strategic Turnaround Equity Partners, L.P. (Cayman) 543,910 1.08% Galloway Capital Management LLC 543,910 1.08% Robert Ellin 2,087,296 4.13% Gary Herman 557,410 1.10% Bruce Galloway 1,277,082 2.53% Larry Hopfenspirger 1,499,436 2.96% David Sandberg 1,075,984 2.13% Red Oak Partners, LLC 622,597 1.23% The Red Oak Fund, LP 622,597 1.23% Pinnacle Partners, LLC 453,387 .90% Pinnacle Fund, LLLP 453,387 .90% Strategic Turnaround is a fund primarily focused on investing in undervalued public equities. Galloway Capital is principally engaged in serving as the general partner of Strategic Turnaround. Gary L. Herman and Bruce Galloway are the managing members of Galloway Capital. Trinad Capital is a fund dedicated to investing in micro-cap companies. Trinad Management is principally engaged in serving as the general partner of Trinad Capital. Robert Ellin is the managing member of Trinad Management. Larry Hopfenspirger is an individual investor principally involved in the business of investments. David Sandberg is the controlling member of Red Oak Partners. Red Oak Partners (i) manages Red Oak Fund and (ii) is general partner of Pinnacle Partners, which manages Pinnacle Fund (each of Pinnacle Fund and Red Oak Fund a "Fund" and, collectively, the "Funds"). The Funds are private investment vehicles formed for the purpose of investing and trading in a wide variety of securities and financial instruments. The Funds directly own the shares as reported in this statement. Each of the filers disclaims beneficial ownership with respect to any shares other than shares owned directly by said filer. The Reporting Persons additionally disclose that they are not satisfied with, and intend to object to the Company's proposed plan of reorganization, which was filed with the United States Bankruptcy Court for the District of Delaware on December 21, 2009. The Company's plan contemplates, among other things, (i) the cancellation of all of the Debtors' existing common stock; and (ii) the issuance of common stock in a reorganized entity to the Debtors' prepetition secured lenders and certain members of senior management, and nothing for the equity holders. The Reporting Persons render their own independent investment decisions. An informal arrangement may be deemed to exist between the Reporting Persons. Although there is no formal agreement, the Reporting Persons may seek to have discussions with management or the Board of Directors or the Company's lenders, advisors, other investors, or may determine to correlate their activities with respect to their investment in the Company. The aggregate percentage of shares of Common Stock outstanding reported owned by each Reporting Person is based on the 50,565,219 shares outstanding as of November 13, 2009, which is the total number of shares outstanding as reported in the Company's quarterly report on Form 10-Q, as filed with the Securities and Exchange Commission on November 16, 2009. A full-text copy of Strategic Turnaround's amended Schedule 13D is available for free at http://researcharchives.com/t/s?5554 About TLC Vision TLCVision -- http://www.tlcvision.com/ -- is North America's premier eye care services company, providing eye doctors with the tools and technologies needed to deliver high-quality patient care. Through its centers' management, technology access service models, extensive optometric relationships, direct to consumer advertising and managed care contracting strength, TLCVision maintains leading positions in Refractive, Cataract and Eye Care markets. TLC Vision (USA) Corporation, and two of its corporate affiliates filed petitions for Chapter 11 on Dec. 21, 2009 (Bankr. D. Del. Case No. 09-14473). The petition says assets and debts are $100 million to $500 million. The Company's lead U.S. restructuring counsel is the law firm of Proskauer Rose LLP and Canadian restructuring counsel is the law firm of Torys LLP. The Company's financial advisor is Conway Del Genio Gries & Co., LLC. Epiq Bankruptcy Solutions is claims and notice agent. TRIBUNE CO: Bank Debt Trades at 39% Off in Secondary Market ----------------------------------------------------------- Participations in a syndicated loan under which Tribune Co. is a borrower traded in the secondary market at 60.89 cents-on-the- dollar during the week ended Friday, Feb. 26, 2010, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 0.89 percentage points from the previous week, The Journal relates. . The loan matures May 17, 2014. Tribune pays 300 basis points above LIBOR to borrow under the facility. Moody's has withdrawn its rating on the bank debt, while it is not rated by Standard & Poor's. The debt is one of the biggest gainers and losers among 188 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. 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) TRIDENT RESOURCES: Courts OK Sale & Investor Solicitation Process ----------------------------------------------------------------- Trident Resources Corp., Trident Exploration Corp. and their affiliates, disclosed that on February 19, 2010, in conjunction with the ongoing restructuring proceedings under the Companies' Creditors Arrangement Act (the "CCAA") in Canada and Chapter 11 of the United States Bankruptcy Code in the United States, the Canadian Court and the US Court (the "Courts") each approved a "back-stop" commitment letter that provides for a US$200 million equity commitment, subject to a number of conditions being met. The Courts also approved a sale and investor solicitation process (the "SISP") which provides the opportunity to invest in Trident or to acquire some or all of the Trident assets and business. The SISP is being undertaken under the supervision of FTI Consulting Canada ULC, the Court-appointed Monitor in the CCAA proceedings. The terms of the SISP are available on the Monitor's website at http://cfcanada.fticonsulting.com/trident. Any party that wishes to participate in the SISP must contact William Shaw (212-403-5221, william.shaw@rothschild.com) or Marcelo Messer (212-403-3716 marcelo.messer@rothschild.com) of Rothschild Inc., financial advisor to Trident. The deadline for letters of intent is March 31, 2010. About Trident Resources Calgary, Alberta-based Trident Resources Corp. operates a natural gas exploration and development company. The Company and its affiliates filed for Chapter 11 on Sept. 8, 2009 (Bankr. D. Del. Case Nos. 09-13150 to 09-13154). Trident Exploration Corp. and certain of TEC's Canadian subsidiaries filed an application with the Court of Queen's Bench of Alberta, Judicial District of Calgary, under the Companies' Creditors Arrangement Act (Canada). Trident on December 3, 2009, obtained an extension from the Canadian Court of the "stay period" in its Canadian proceedings until January 15, 2010, to allow the Debtors to focus on their restructuring efforts. In their petition, the Debtors listed $10,000,001 to $50,000,000 in assets and $500,000,001 to $1,000,000,000 in debts. As of October 31, 2009, the Debtors had $374,484,559 in total assets against $612,233,705 in total liabilities. TRONOX INC: Gets Nod for Settlement With Term Loan Lenders ---------------------------------------------------------- Judge Allan L. Gropper of the U.S. Bankruptcy Court for the Southern District of New York has approved the Settlement Agreement entered into by and between Tronox Incorporated and its debtor affiliates, the Official Committee of Unsecured Creditors, and Credit Suisse AG, as administrative agent under the Credit Agreement dated November 28, 2005, concerning the term loan facility under the Credit Agreement and certain litigation related to the facility brought on behalf of Tronox by the Creditors' Committee. The Settlement Agreement results in substantial benefits to the Debtors' estates, including receiving payment of the $5 million Escrow Amount for the benefit of the estates. The Settlement Agreement will be binding and enforceable against the Debtors and their estates, Credit Suisse AG, acting on behalf of and at the direction of the Required Lenders under the Credit Agreement, and the Lenders. Nothing contained in any plan confirmed in any of the Chapter 11 cases or any order of the Court confirming any plan will conflict with or derogate from the provisions of the Settlement Agreement or the Order. On February 26, 2010, the parties will execute and the Creditors' Committee will file a stipulation dismissing the Committee Litigation with prejudice. The mutual releases contained in the Settlement Agreement will be effective as of the Effective Date, and each Party will be deemed to have released and to be permanently enjoined from asserting, pursuing or prosecuting in any manner and in any forum any claims released pursuant to the Settlement Agreement, including claims arising from the negotiation of or entry into the Settlement Agreement. Claim No. 2327 filed by the Agent on behalf of the Lenders in connection with claims arising under the Credit Agreement will be deemed allowed and paid in full after giving effect to the payments to be made under the Settlement Agreement. About Tronox Inc. Headquartered in Oklahoma City, Tronox Incorporated (Pink Sheets: TRXAQ, TRXBQ) is the world's fourth-largest producer and marketer of titanium dioxide pigment, with an annual production capacity of 535,000 tonnes. Titanium dioxide pigment is an inorganic white pigment used in paint, coatings, plastics, paper and many other everyday products. The Company's four pigment plants, which are located in the United States, Australia and the Netherlands, supply high-performance products to approximately 1,100 customers in 100 countries. In addition, Tronox produces electrolytic products, including sodium chlorate, electrolytic manganese dioxide, boron trichloride, elemental boron and lithium manganese oxide. Tronox has $1.6 billion in total assets, including $646.9 million in current assets, as at September 30, 2008. The Company has $881.6 million in current debts and $355.9 million in total noncurrent debts. Tronox Inc., aka New-Co Chemical, Inc., and 14 other affiliates filed for Chapter 11 protection on January 13, 2009 (Bankr. S.D.N.Y. Case No. 09-10156). The case is before Hon. Allan L. Gropper. Richard M. Cieri, Esq., Jonathan S. Henes, Esq., and Colin M. Adams, Esq., at Kirkland & Ellis LLP in New York, represent the Debtors. The Debtors also tapped Togut, Segal & Segal LLP as conflicts counsel; Rothschild Inc. as investment bankers; Alvarez & Marsal North America LLC, as restructuring consultants; and Kurtzman Carson Consultants serves as notice and claims agent. An official committee of unsecured creditors and an official committee of equity security holders have been appointed in the cases. The Creditors Committee has retained Paul, Weiss, Rifkind, Wharton & Garrison LLP as counsel. Until September 30, 2008, Tronox Inc. was publicly traded on the New York Stock Exchange under the symbols TRX and TRX.B. Since then, Tronox Inc. has traded on the Over the Counter Bulletin Board under the symbols TROX.A.PK and TROX.B.PK. As of December 31, 2008, Tronox Inc. had 19,107,367 outstanding shares of class A common stock and 22,889,431 outstanding shares of class B common stock. Bankruptcy Creditors' Service, Inc., publishes Tronox Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Tronox Inc. and its 14 affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TRONOX INC: OKs Rejection of Pittman & Koehler Contracts -------------------------------------------------------- The Bankruptcy Court has authorized Tronox Inc. and its units to reject the HR Contracts of Gary Pittman and Dr. Berndt U. Koehler. The Contracts are rejected effective as of February 23, 2010. The Executives must file (a) any proof of claim, or (b) any amendment to any proof s of claim filed previously, for damages arising from the rejection of the HR Contracts on or before March 25, 2010. ronox Incorporated terminated the employment of Mr. Adams on August 15, 2008, Mr. Brown on December 4, 2008, Ms. Mikkelson on May 8, 2009, and Mr. Corbett on May 31, 2009. On September 3, 2008, Tronox Incorporated entered into an Executive Employment Agreement with Gary Pittman, pursuant to which Mr. Pittman was employed as Vice President of Special Projects. Tronox Incorporated terminated the employment of Mr. Pittman on January 23, 2009. On May 18, 2007, Tronox LLC entered into an agreement regarding a "Success Bonus" with Dr. Berndt Koehler, who was employed as Business Director with Tronox Pigments GmbH, a non-debtor and formerly one of Tronox's German subsidiaries. Dr. Koehler is entitled to a bonus if Tronox's Uerdingen, Germany facility, owned by Tronox Pigments GmbH, is successfully sold. On March 13, 2009, Tronox's German subsidiaries filed for insolvency protection in Germany. As a result of that filing, Tronox LLC is no longer in control of these subsidiaries. Accordingly, Tronox LLC is no longer pursuing a sale of the Uerdingen Facility and no longer pays any employee associated with that facility. Because the Debtors no longer need to incentivize Dr. Koehler to pursue a successful sale of the Uerdingen Facility, the Debtors have determined to reject the Koehler Contract to avoid any potential administrative expense claim on account of that contract. About Tronox Inc. Headquartered in Oklahoma City, Tronox Incorporated (Pink Sheets: TRXAQ, TRXBQ) is the world's fourth-largest producer and marketer of titanium dioxide pigment, with an annual production capacity of 535,000 tonnes. Titanium dioxide pigment is an inorganic white pigment used in paint, coatings, plastics, paper and many other everyday products. The Company's four pigment plants, which are located in the United States, Australia and the Netherlands, supply high-performance products to approximately 1,100 customers in 100 countries. In addition, Tronox produces electrolytic products, including sodium chlorate, electrolytic manganese dioxide, boron trichloride, elemental boron and lithium manganese oxide. Tronox has $1.6 billion in total assets, including $646.9 million in current assets, as at September 30, 2008. The Company has $881.6 million in current debts and $355.9 million in total noncurrent debts. Tronox Inc., aka New-Co Chemical, Inc., and 14 other affiliates filed for Chapter 11 protection on January 13, 2009 (Bankr. S.D.N.Y. Case No. 09-10156). The case is before Hon. Allan L. Gropper. Richard M. Cieri, Esq., Jonathan S. Henes, Esq., and Colin M. Adams, Esq., at Kirkland & Ellis LLP in New York, represent the Debtors. The Debtors also tapped Togut, Segal & Segal LLP as conflicts counsel; Rothschild Inc. as investment bankers; Alvarez & Marsal North America LLC, as restructuring consultants; and Kurtzman Carson Consultants serves as notice and claims agent. An official committee of unsecured creditors and an official committee of equity security holders have been appointed in the cases. The Creditors Committee has retained Paul, Weiss, Rifkind, Wharton & Garrison LLP as counsel. Until September 30, 2008, Tronox Inc. was publicly traded on the New York Stock Exchange under the symbols TRX and TRX.B. Since then, Tronox Inc. has traded on the Over the Counter Bulletin Board under the symbols TROX.A.PK and TROX.B.PK. As of December 31, 2008, Tronox Inc. had 19,107,367 outstanding shares of class A common stock and 22,889,431 outstanding shares of class B common stock. Bankruptcy Creditors' Service, Inc., publishes Tronox Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Tronox Inc. and its 14 affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TRONOX INC: RTI Hamilton Lawsuit Dismissed by Court --------------------------------------------------- Judge Allan L. Gropper of the U.S. Bankruptcy Court for the Southern District of New York has granted Tronox LLC's Motion to Dismiss RTI Hamilton, Inc.'s Adversary Complaint and all counts of the Adversary Complaint are dismissed. In a Memorandum of Decision, the Court states that the language of the supply agreement between Tronox LLC and RTIH within its four corners is clear and unambiguous. Judge Gropper says the Supply Agreement carefully allocates responsibilities to the parties regarding the construction of the plant and the supply of product. On the other hand, he notes that the agreement contains no representation or warranty by either party as to its financial condition, and it contains no obligation on either party to inform the other of matters relating to financial condition. According to Judge Gropper, the fact that Tronox has admitted in the Adversary Case against Anadarko Petroleum Corporation and Kerr-McGee Corporation that it is and has been undercapitalized or insolvent does not constitute an automatic breach of a contract that does not otherwise contain a representation relating to solvency or financial status. Moreover, Judge Gropper relates, RTIH's allegations as to bad faith by Tronox relate only to an alleged failure to disclose facts and conduct prior to the execution of the Supply Agreement. As there are no allegations in the complaint that Tronox has acted in bad faith during performance under or enforcement of the contract, Tronox's motion to dismiss the claim must be granted, Judge Gropper says. RTIH may have 10 days to move to amend the Complaint, and Tronox may have 10 days to respond to any motion, Judge Gropper rules. In the absence of a timely motion to amend, the adversary proceeding will be closed, and judgment entered in favor of Tronox. Prior to the Court's entry of the Order, RTIH objected to the proposed order filed by the Debtors dismissing the adversary complaint as it does not allow RTIH to amend its Adversary Complaint. RTIH also asked the Court to grant it leave to amend its Adversary Complaint. Tronox, however, asserted that because RTIH's proposed amendments to its complaint fail to address deficiencies recognized by the Court in its Memorandum of Decision granting Tronox's motion to dismiss allowing RTIH leave to amend would be futile. RTIH's opposition further confirms that the adversary proceeding is simply an attempt to avoid its "take or pay" obligations with respect to a project that it abandoned for its own business reasons -- not because of any confusion regarding Tronox's financial condition, Tronox asserted. About Tronox Inc. Headquartered in Oklahoma City, Tronox Incorporated (Pink Sheets: TRXAQ, TRXBQ) is the world's fourth-largest producer and marketer of titanium dioxide pigment, with an annual production capacity of 535,000 tonnes. Titanium dioxide pigment is an inorganic white pigment used in paint, coatings, plastics, paper and many other everyday products. The Company's four pigment plants, which are located in the United States, Australia and the Netherlands, supply high-performance products to approximately 1,100 customers in 100 countries. In addition, Tronox produces electrolytic products, including sodium chlorate, electrolytic manganese dioxide, boron trichloride, elemental boron and lithium manganese oxide. Tronox has $1.6 billion in total assets, including $646.9 million in current assets, as at September 30, 2008. The Company has $881.6 million in current debts and $355.9 million in total noncurrent debts. Tronox Inc., aka New-Co Chemical, Inc., and 14 other affiliates filed for Chapter 11 protection on January 13, 2009 (Bankr. S.D.N.Y. Case No. 09-10156). The case is before Hon. Allan L. Gropper. Richard M. Cieri, Esq., Jonathan S. Henes, Esq., and Colin M. Adams, Esq., at Kirkland & Ellis LLP in New York, represent the Debtors. The Debtors also tapped Togut, Segal & Segal LLP as conflicts counsel; Rothschild Inc. as investment bankers; Alvarez & Marsal North America LLC, as restructuring consultants; and Kurtzman Carson Consultants serves as notice and claims agent. An official committee of unsecured creditors and an official committee of equity security holders have been appointed in the cases. The Creditors Committee has retained Paul, Weiss, Rifkind, Wharton & Garrison LLP as counsel. Until September 30, 2008, Tronox Inc. was publicly traded on the New York Stock Exchange under the symbols TRX and TRX.B. Since then, Tronox Inc. has traded on the Over the Counter Bulletin Board under the symbols TROX.A.PK and TROX.B.PK. As of December 31, 2008, Tronox Inc. had 19,107,367 outstanding shares of class A common stock and 22,889,431 outstanding shares of class B common stock. Bankruptcy Creditors' Service, Inc., publishes Tronox Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Tronox Inc. and its 14 affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TRUMP ENTERTAINMENT: Attys' Fee Dispute Heading to 3rd Circuit -------------------------------------------------------------- Law360 reports that a group of developers embroiled in protracted litigation with Trump Entertainment Resorts Inc. over a Florida land purchase has asked a federal appeals court to consider its request for attorneys' fees after a district court said it was barred by the automatic stay in Trump's bankruptcy. Based in Atlantic City, New Jersey, Trump Entertainment Resorts Inc. (NASDAQ: TRMP) -- http://www.trumpcasinos.com/-- owns and operates three casino hotel properties in Atlantic City, New Jersey, which include Trump Taj Mahal Casino Resort, Trump Plaza Hotel and Casino, and Trump Marina Hotel Casino. The Company conducts gaming activities and provides customers with casino resort and entertainment. Donald Trump is a shareholder of the Company and, as its non- executive Chairman, is not involved in the daily operations of the Company. The Company is separate and distinct from Mr. Trump's privately held real estate and other holdings. Trump Entertainment Resorts, TCI 2 Holdings, LLC, and other affiliates filed for Chapter 11 on February 17, 2009 (Bankr. D. N.J., Lead Case No. 09-13654). The Company has tapped Charles A. Stanziale, Jr., Esq., at McCarter & English, LLP, as lead counsel, and Weil Gotshal & Manges as co-counsel. Ernst & Young LLP is the Company's auditor and accountant and Lazard Freres & Co. LLC is the financial advisor. Garden City Group is the claims agent. The Company disclosed assets of $2,055,555,000 and debts of $1,737,726,000 as of December 31, 2008. Trump Hotels & Casino Resorts, Inc., filed for Chapter 11 protection on Nov. 21, 2004 (Bankr. D. N.J. Case No. 04-46898 through 04-46925). Trump Hotels' obtained the Court's confirmation of its Chapter 11 plan on April 5, 2005, and in May 2005, it exited from bankruptcy under the name Trump Entertainment Resorts Inc. TSG INCORPORATED: Has Access to PNC Bank's Cash Until May 21 ------------------------------------------------------------ The U.S. Bankruptcy Court for the Eastern District of Pennsylvania approved a third stipulation, authorizing TSG Incorporated to use cash collateral of PNC Bank, National Association until 5:00 p.m. (ET) on May 21, 2010. A continued hearing on the Debtor's use of cash collateral will be held on May 18, 2010, at 10:30 a.m. (ET) in Courtroom No. 4, 900 Market Street, Philadelphia, Pennsylvania. As reported in the Troubled Company Reporter on January 18, 2010, the Debtor owes PNC Bank, National Association, a total amount of $4.9 million under three separate loans: (i) a term loan in the original principal face amount of $6.5 million, of which approximately $2.3 million is outstanding (the "Term Loan"), (ii) a line of credit in the original principal face amount of $2 million, of which approximately $1.745 million is outstanding (the "Line of Credit"); and (iii) a line of credit (that was subsequently converted into a term loan) in the original principal face amount of $1.5 million, of which approximately $895,000 is outstanding (the "Converted Line of Credit"). The Debtor would use the cash collateral to pay employees, maintain its assets, provide financial information, and perform any task that would maximize the value of its assets and to reorganize. Pursuant to the stipulation: 1. the Debtor is permitted to exceed expenses by an amount not more than 5% of the total expenses or 5% with respect to each individual line item; 2. the unused amount of the cash collateral may be deferred for use or later use during the period; and 3. the Debtor will not increase its payroll without the prior written consent of the lender or the Court. As adequate protection of PNC's interest in the cash collateral, the Debtor will grant PNC replacements liens. The Debtor will also make periodic cash payments. North Wales, Pennsylvania-based TSG Incorporated operates a real estate business. Founded in 1901 under the name of Levy's International Water Shrinking and Drying Company, the Debtor has operated as a privately held, family owned business for over 108 years. Locally headquartered in North Wales, Pennsylvania, the Debtor is in the business of fabric finishing, coating and embossing. TSG -- which is an acronym for "The Synthetics Group" -- is one of the largest commission finishers in the United States. The Company filed for Chapter 11 bankruptcy protection on November 29, 2009 (Bankr. E.D. Pa. Case No. 09-19124). Michael Jason Barrie, Esq., at Benesch Friedlander Coplan & Aronoff LLP assists the Company in its restructuring effort. The Company listed $10,000,001 to $50,000,000 in assets and $1,000,001 to $10,000,000 in liabilities. US CONCRETE: Moody's Downgrades Corporate Family Rating to 'Caa2' ----------------------------------------------------------------- Moody's Investors Service downgraded U.S. Concrete's corporate family rating and probability of default rating to Caa2 from Caa1 and the rating for its senior subordinated notes to Caa3 from Caa2. Its speculative grade liquidity rating remains SGL-4, and its outlook remains negative. The downgrades reflect continued volume deterioration of ready- mixed concrete and precast concrete, resulting from weak construction activity across all market segments, particularly the company's largest segment, non-residential construction. Moody's believes that non-residential construction will continue to decline in 2010 and ready-mixed concrete prices will weaken. As a result, the company's profitability is expected to continue to suffer and its debt-to-EBITDA leverage to remain elevated over the next year. The downgrades also reflect weak liquidity and the risk of credit agreement covenant violations in 2010. As a result of the above mentioned pressures, the company announced plans to engage Lazard FrŠres & Co. and Alix Partners as financial advisors, and Kirkland & Ellis LLP as a legal advisor as it considers alternatives to strengthen its balance sheet. One prospective outcome may entail a securities exchange for its subordinated notes that Moody's could view as a distressed exchange, akin to a limited default. The SGL-4 reflects U.S. Concrete's weakened liquidity position, including weak cash flow generation, heavy reliance on the revolving credit facility and risk of covenant violations in 2010. The company entered into an amendment of its senior credit facility to temporarily lower the springing fixed-charge coverage availability trigger from $25 million to $20 million, providing it with an additional $5 million in short-term liquidity until April 30, 2010. It also received a waiver for any potential cross defaults that might be triggered by the non-payment of interest due on April 1, 2010 on the senior subordinated notes. U.S. Concrete's liquidity may be weakened by cash contributions to the company's Superior Materials joint venture, which also faces potential covenant violations and credit facility refinancing needs. The negative outlook reflects the risk of potential delays in stimulus-related infrastructure spending or of a delay in the recovery of residential construction, which would negatively affect the company's credit metrics, liquidity position, credit agreement covenant compliance, and credit facility refinancing risk. The Caa2 corporate family rating reflects the company's highly cyclical operating performance, high financial leverage, low profitability, heavy reliance on a single product, lack of vertical integration, high fixed cost structure, and current pricing pressures. The rating is supported by the company's geographic diversification and strong presence in markets with favorable long-term growth prospects, such as Texas (Dallas / Fort Worth and West Texas) and Northern California, which together account for approximately two-thirds of its revenues. The rating is also supported by the company's exposure (19% of revenues) to the public infrastructure and street and highway construction markets, which are expected to benefit from federal stimulus funding. Moody's last rating action occurred on November 18, 2009, at which time U.S. Concrete's corporate family rating was downgraded to Caa1 from B2, and its senior subordinated notes to Caa2 from B3. U.S. Concrete, headquartered in Houston, Texas, is a producer of ready-mixed concrete, precast concrete and concrete-related products, and ranks among the top ten ready-mixed concrete producers in the U.S. The company serves construction markets in West Texas, Dallas / Fort Worth, Northern California, the Atlantic region, and Michigan, with a primary focus on Texas and California markets. In 2008, U.S. Concrete generated approximately $754 million in revenues and shipped approximately 6.5 million cubic yards of ready-mixed concrete. USI HOLDINGS: S&P Gives Stable Outlook, Keeps CCC Rating -------------------------------------------------------- Standard & Poor's Ratings Services said that it revised its outlook on USI Holdings Corp. to stable from negative. At the same time, Standard & Poor's affirmed its 'B-' counterparty credit, 'B-' senior secured debt, and 'CCC' subordinated unsecured debt ratings on USI. The recovery rating on USI's senior secured debt remains '3' (50%-70% recovery), and the recovery rating on its unsecured debt is unchanged at '6' (0%-10% recovery). The outlook on USI had been negative since the first quarter of 2008, primarily because the company's performance had been lower than both S&P's expectations and peers' results. In addition, S&P had concerns regarding the company's ability to manage through the soft pricing cycle. Since then -- under the leadership of Mike Sicard, who took over as CEO in late 2007 -- the company has been taking appropriate strategic measures to improve its financial and business profile. S&P believes management has a clear strategy and is committed to maximizing organic revenue growth, improving operating efficiencies, and making fewer acquisitions, with a greater commitment to more effectively integrating acquired companies into the organization. To date, management has been building traction to achieve these goals through initiatives such as institutionalized sales pipeline management and tracking processes, better coordinated carrier-relations efforts, value proposition enhancements, talent additions in both leadership and producer ranks, and more effective operational controls. Somewhat mitigating this positive traction is S&P's view that many of these initiatives are, in some respects, only now enabling the company to catch up on many operational and business processes that several peers have already had in place for some time. Further, S&P believes it will continue to take time for these business initiatives to translate into material improvements in financial results, particularly given the economic headwinds that are currently having a negative impact on USI and its peers in the broker segment. As a result, the company's financial performance has remained somewhat weak this year. Still, the stable outlook incorporates S&P's belief that USI has positioned itself to display tangible improvements in its financial results in 2010. Further contributing to the stable outlook, USI has demonstrated adequate financial management through the tough market cycle. The company can offset the material organic growth declines through disciplined expense management as well as selected strategic acquisitions, which resulted in EBITDA growth and margin expansion during 2009. Its liquidity is appropriate for the rating level. Finally, USI has a healthy cushion with respect to its restrictive covenants, consisting mainly of a maximum leverage test. The rating on USI reflects its highly leveraged balance sheet, limited financial flexibility, and industry-trailing operating performance as well as the pressure on organic growth and profitability from a continued challenging pricing environment and economic climate. Somewhat offsetting these weaknesses is USI's earnings diversification, encompassing product placement through its property/casualty, employee benefits, and specialized benefits divisions. Moreover, USI benefits from a strategy that emphasizes organic growth and improving operating efficiencies as well as an enhanced competitive position through the expansion of the company's national footprint, primarily from acquisitions. "The ratings will come under pressure if the company's revenue and profitability and resultant coverage metrics fall short of S&P's expectations," noted Standard & Poor's credit analyst. "This could happen because of the unsuccessful execution of recent strategic initiatives, a greater-than-anticipated impact from the unfavorable pricing or economic climate, or more aggressive financial management. On the other hand, if the company significantly exceeds S&P's outlined expectations, there could be positive rating movement over the medium to long term." VION PHARMACEUTICALS: Plan Outline Hearing Set for Today -------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware will consider at a hearing on March 1, 2010, at noon (prevailing Eastern Time,) Vion Pharmaceuticals, Inc.'s Disclosure Statement explaining its proposed plan of liquidation. Objections were due February 26, 2010. 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 for the liquidation the Debtor's estate and distribute the remaining assets, which consists mainly of sale proceeds, to holders of allowed claims. The Plan also contemplates the transfer of the Debtor's assets and liabilities into the Vion Liquidating Trust. The liquidating trustee will be the disbursing agent that will make all distributions under the Plan. Treatment of Claims Type of Claim Plan Treatment Est. Recovery ------------- -------------- ------------- Administrative Claims Paid full in cash 100% Priority Tax Claims Paid full in cash 100% Class 1 - Priority Paid full in cash 100% Class 2 - Secured Paid full in cash 100% Class 3 - General Unsecured Each holder paid its 13% - 17% Claims, including notes pro rata share of Claims distributable cash Class 4 - Interests and No distribution 0% related related claims arising from common stock A full-text copy of the Disclosure Statement is available for free at http://bankrupt.com/misc/VIONPharmaceuticals_DS.pdf The Court will also consider confirmation of the Plan on April 6, 2010, at 11:30 a.m. About Vion Pharmaceuticals Inc. 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. VION PHARMACEUTICALS: Gets FDA Response on Protocol Assessment -------------------------------------------------------------- Vion Pharmaceuticals Inc. had received a response from the U.S. Food and Drug Administration on a Special Protocol Assessment for its oncology therapeutic Onrigin(TM) (laromustine) Injection. In January 2010, Vion filed a SPA with the FDA related to a randomized Phase II/III trial of Onrigin(TM) in combination with low-dose Ara-C in elderly patients with newly diagnosed acute myeloid leukemia. In its response, the FDA requested that the Company conduct a separate Phase II trial of Onrigin(TM) and review the results of this trial with the FDA prior to conducting a Phase III trial. The SPA process is intended to evaluate a Phase III protocol whose data will form the primary basis for an efficacy claim. The Phase II/III randomized trial for which the Company filed the SPA had been designed in response to the FDA's complete response letter to the Company's New Drug Application for Onrigin(TM) that required a randomized trial be conducted to support the approval of Onrigin(TM) for the treatment of AML. On December 17, 2009, Vion filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court in the District of Delaware. On February 11, 2010 Vion filed with the Court a Chapter 11 Plan of Liquidation and a related disclosure statement. A hearing is scheduled to consider approval of the Disclosure Statement on March 1, 2010 and the Plan on April 6, 2010. Assuming that these hearings are held on or before the scheduled dates, and that the Plan is so confirmed at the scheduled hearing and goes effective by its terms, Vion anticipates that it will then no longer be a reporting company under the Securities Exchange Act of 1934, as amended. Bankruptcy law does not permit solicitation of acceptances of the Plan until the Court approves the Disclosure Statement. About Vion Pharmaceuticals Inc. 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. VISTEON CORP: Court Declines to Remove Pensioners From Committee ---------------------------------------------------------------- The Official Committee of Unsecured Creditors in Visteon Corp.'s cases sought an order from the Court, directing the Office of the United States Trustee to: (a) reconstitute the composition of the Creditors Committee by removing representatives of the Pension Plan Participants; and (b) appoint an official committee of Pension Plan Participants. As previously reported, the U.S. Trustee, at the Court's direction, appointed on February 1, 2010, (i) Chris A. Hensel of Program Supply Electronics for Visteon Corporation, (ii) Robert Leiss, president of UAW Local 1695, and (iii) Michael Lostutter, the director of the IUE-CWA's Pension Fund & 401K Plan as additional members to the Creditors Committee. Representatives of the Creditors Committee, an ad hoc committee of Pension Plan Participants, the IUE-CWA and UAW shared with the U.S. Trustee common beliefs that the interests of the Pension Plan Participants, general unsecured creditors and other stakeholders would be best served by the appointment of an official committee of Pension Plan Participants, William P. Bowden, Esq., at Ashby & Geddes, P.A., in Wilmington, Delaware, counsel for the Committee, pointed out. The Creditors Committee noted that while it believes the representatives of the Pension Plan Participants will strictly maintain confidentiality and will take an objective view of operational matters relative to the Debtors' businesses, other key participants in the Debtors' cases may not share that comfort level. "As a result, the presence of the representatives of the Pension Plan Participants on the Creditors Committee may well substantially inhibit the Creditors Committee's ability to engage these other participants, and to negotiate and resolve the important operational and financial restructuring issues the Debtors' case present," Mr. Bowden said. The Pension Plan Participants' focus on the survival of the Pension Plans, and less direct interest in the other crucial operational issues confronting unsecured creditors, augers for the appointment of an official committee of Pension Plan Participants, Mr. Bowden emphasized. He noted that the other members of the Creditors Committee have additional complex issues that the Pension Plan Participants might not take a direct interest. Those issues include: -- engaging relevant parties in formulating an alternative plan that will fund a substantial recovery for unsecured creditors; -- seeking out the best means of recapitalizing reorganized Visteon; -- determining how to allocate value among unsecured creditors; and -- determining how to best implement and consummate the Debtors' operational restructuring. Mr. Bowden further asserted that the addition of the representatives of Pension Plan Participants to the Creditors Committee may very well detract from or dilute the effectiveness of both the representatives and the Creditors Committee, on behalf of their respective constituencies. The Creditors Committee's Reconstitution Motion is supported by the Ad Hoc Pension Committee. The interim Ad Hoc Committee of Non-Union Defined Benefit Plan Participants of Visteon Entities also filed its joinder to the Reconstitution Motion. Parties React Roberta A. DeAngelis, the Acting U.S. Trustee for Region 3, and Wilmington Trust FSB, as administrative agent under the Debtors' senior secured term loan facility, on behalf of itself and the several lenders of the Prepetition Term Loan Facility, opposed the relief requested by the Creditors' Committee. Ms. DeAngelis averred that since the Debtors have not affirmatively moved to terminate or modify the Pension Plans, the appointment of a separate Pension Plan Committee is not appropriate. Wilmington Trust contended that the Debtors are correct, and that the Court should reconsider and vacate its January 21, 2010 Order. Wilmington Trust asserted that if the Court does not do so, it should deny the Committee's Reconstitution Motion. Wilmington Trust added that the Bankruptcy Code does not authorize the appointment of an Official Committee of Pension Plan Participants because they are not creditors. * * * For records set forth in open court, Judge Sontchi denied the Committee's request. About Visteon Corp. Headquartered in Van Buren Township, Michigan, Visteon Corporation (NYSE: VC) -- http://www.visteon.com/-- is a global automotive supplier that designs, engineers and manufactures innovative climate, interior, electronic and lighting products for vehicle manufacturers, and also provides a range of products and services to aftermarket customers. The company has corporate offices in Van Buren Township, Michigan (U.S.); Shanghai, China; and Kerpen, Germany. It has facilities in 27 countries and employs roughly 35,500 people. The Company has assets of $4,561,000,000 and debts of $5,311,000,000 as of March 31, 2009. Visteon Corporation and 30 of its affiliates filed for Chapter 11 protection on May 28, 2009, (Bank. D. Del. Case No. 09-11786 through 09-11818). Judge Christopher S. Sontchi oversees the Chapter 11 cases. James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., and James J. Mazza, Jr., Esq., at Kirkland & Ellis LLP, in Chicago, Illinois, represent the Debtors in their restructuring efforts. Laura Davis Jones, Esq., James E. O'Neill, Esq., Timothy P. Cairns, Esq., and Mark M. Billion, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, serve as the Debtors' local counsel. The Debtors' investment banker and financial advisor is Rothschild Inc. The Debtors' notice, claims, and solicitation agent is Kurtzman Carson Consultants LLC. The Debtors' restructuring advisor is Alvarez & Marsal North America, LLC. Bankruptcy Creditors' Service, Inc., publishes Visteon Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Visteon Corp. and its debtor-affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000) VISTEON CORP: Has Access to Cash Collateral Until March 17 ---------------------------------------------------------- Judge Christopher S. Sontchi of the U.S. Bankruptcy Court for the District of Delaware entered his Eleventh Supplemental Interim Order authorizing Visteon Corporation and its debtor affiliates to further use the cash collateral through March 17, 2010. The Debtors' use of the Cash Collateral will be subject to compliance of a prepared budget, a copy of which is available for free at http://bankrupt.com/misc/Visteon_March19Budget.pdf A final hearing will be held on March 16, 2010. Parties who oppose the Cash Collateral use have until March 11 to send in their formal objections. A full-text copy of the 11th Supplemental Interim Cash Collateral Order is available for free at: http://bankrupt.com/misc/Visteon_11thCashColl.pdf About Visteon Corp. Headquartered in Van Buren Township, Michigan, Visteon Corporation (NYSE: VC) -- http://www.visteon.com/-- is a global automotive supplier that designs, engineers and manufactures innovative climate, interior, electronic and lighting products for vehicle manufacturers, and also provides a range of products and services to aftermarket customers. The company has corporate offices in Van Buren Township, Michigan (U.S.); Shanghai, China; and Kerpen, Germany. It has facilities in 27 countries and employs roughly 35,500 people. The Company has assets of $4,561,000,000 and debts of $5,311,000,000 as of March 31, 2009. Visteon Corporation and 30 of its affiliates filed for Chapter 11 protection on May 28, 2009, (Bank. D. Del. Case No. 09-11786 through 09-11818). Judge Christopher S. Sontchi oversees the Chapter 11 cases. James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., and James J. Mazza, Jr., Esq., at Kirkland & Ellis LLP, in Chicago, Illinois, represent the Debtors in their restructuring efforts. Laura Davis Jones, Esq., James E. O'Neill, Esq., Timothy P. Cairns, Esq., and Mark M. Billion, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, serve as the Debtors' local counsel. The Debtors' investment banker and financial advisor is Rothschild Inc. The Debtors' notice, claims, and solicitation agent is Kurtzman Carson Consultants LLC. The Debtors' restructuring advisor is Alvarez & Marsal North America, LLC. Bankruptcy Creditors' Service, Inc., publishes Visteon Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Visteon Corp. and its debtor-affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000) VISTEON CORP: Wants Plan Exclusivity Until April 30 --------------------------------------------------- Visteon Corporation and its debtor affiliates ask Judge Christopher S. Sontchi of the U.S. Bankruptcy Court for the District of Delaware to further extend: (a) their exclusive period to file a Chapter 11 plan of reorganization through April 30, 2010; and (b) their exclusive periods to solicit acceptances of that plan through July 30, 2010. The Debtors filed their Exclusivity Period Extension Motion on February 17, 2010, and designated it as their Second Exclusivity Motion. Simultaneous with the filing of their recent Exclusivity Motion, the Debtors also delivered to a Court a further status report on their reorganization proceedings for the month of February 2010. Previously, under the January 2010 Status Report, the Debtors noted that the filing of their plan of reorganization on December 17, 2009, appeared to have spurred a number of parties to action. The prospect of no recovery for bondholders, the freshening of the capital markets, the Debtors' operational success, and signs of a potential rebound in the automotive sector precipitated major institutions, who hold substantial amounts of the Debtors' unsecured bonds, to reach out to the Debtors and the Official Committee of Unsecured Creditors regarding the possibility of entering into a backstopped rights offering to raise junior capital. In this light, since early January, the Debtors continued to seek progress toward developing confirmable plan options with their creditor constituents, Mark A. Billion, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, relates under the February Status Report. Mr. Billion summarizes the Debtors' recent activities: * In early January 2010, the Debtors entered into confidentiality agreements with 11 financial institutions regarding exit financing. * On January 15, 2010, the Debtors, Ford Motor Company, the holders of the Debtors' prepetition secured term loan debt, and the Committee reached a "stand still" agreement to allow each of the parties the opportunity to explore whether alternative plan structures may be viable. As part of the Stand Still Agreement, as extended pursuant to a stipulation and order on February 8, 2010, the parties effectively agreed to an extension of the Debtors' Exclusive Plan Filing Period through March 16, 2010, and an extension of the Debtors' Exclusive Solicitation Period through April, 22, 2010. * On January 19, 2010, one of the holders of the Debtors' outstanding notes sent the Debtors a proposed plan and rights offering term sheet contemplating a fully backstopped $900 million equity commitment. * In early February 2010, seven financial institutions provided preliminary indications of interests with respect to those financing. * On February 1, 2010, about 30 of the Noteholders putatively representing a majority of all tranches of the Debtors' unsecured bonds submitted a plan term sheet premised on a backstopped $950 million rights offering along with a signed equity commitment letter. * On or around February 8, 2010, the Debtors and certain of putative backstop parties completed several weeks of negotiations with respect to, and executed confidentiality agreements to enable access to the comprehensive data room maintained by the Debtors. In addition, the Restricted Backstop Parties retained industry-specific advisors, including OHorizons, LLC and Conway Mackenzie, Inc., to assist in their due diligence. * On February 9, 2010, the Debtors' senior management team and their financial advisors met with certain of the Restricted Backstop Parties and their advisors to provide them with a comprehensive overview of the Debtors' business plan. * On February 12, 2010, the Noteholders provided the Debtors with a draft work plan that contemplates continued diligence over the next several weeks with a target date of on or about March 15, 2010, for completion of definitive documents and filing of a junior creditor rights offering- based plan. * On February 15, 2010, the Debtors' senior management team and their financial advisors met again with the Noteholders and financial advisors that attended the February 9, 2010 meeting. The Debtors inform the Court that they have also been in active and near continuous discussions with the Term Lenders regarding possible modifications to the December 17, 2009 Plan of Reorganization. Meanwhile, by all accounts, the Debtors tell Judge Sontchi that they have continued to perform well in bankruptcy, notwithstanding continued turbulence in the automotive sector. The Debtors maintain that all major constituencies seem to agree they have skillfully managed their businesses through the Chapter 11 process and have kept information and communication flowing freely in a concerted effort to drive consensus and preserve and enhance the value of their estates. "Without doubt, the positive momentum generated on a number of fronts since filing the plan on December 17, 2010, will help ensure Visteon's successful emergence from chapter 11 while maximizing value for all stakeholders," Mr. Billion says. "But to determine how to achieve its exit from chapter 11, Visteon must, and will, work with each of the parties as they continue their rigorous diligence efforts," he maintains. According to Mr. Billion, the Debtors must continue their analysis of each of the issues presented by the proposals as received and to the extent those proposals evolve. He adds that at this stage of the cases, the Debtors and their advisors are considering, among other things: -- Whether the funding proposed by the Noteholders will actually materialize on acceptable terms to permit the filing of a feasible alternate plan with a sustainable capital structure; -- What level of debt reorganized Visteon will be able to service to assure future success and continued access to new business; -- Whether, and to what extent, reinstatement of any unpaid term debt is legally available; -- Whether there is a viable plan alternative that would allow the Debtors to maintain all of their pension plans and provide some form of recovery to unsecured creditors; -- The inherent litigation and execution risks associated with each of the parties' alternative plan structures; and -- Most importantly, whether key customers, including Ford, which the Committee continues to threaten with protracted litigation, would support an alternative to the filed plan. Mr. Billion asserts that the potential plan sponsors need additional time to swiftly complete their diligence efforts. He notes that the Noteholders' work plan contemplates that diligence will continue through the middle of March 2010. The Debtors aver that while they may ultimately have multiple restructuring options, their goals in these Chapter 11 cases remain the same. Deleveraging of the Debtors' balance sheet and addressing legacy costs remains critical to their go-forward business, Mr. Billion points out, so that customers will be assured that the Debtors will be a reliable and stable partner for the multiyear vehicle platforms and programs that are the lifeblood of the Original Equipment Manufacturer/supplier relationship. Achieving consensus between key stakeholders remains ideal, he adds, because a protracted and litigious stay in bankruptcy could destroy the Debtors' value and inject substantial additional risk, time, and expense into the process of returning Visteon to financial health. Accordingly, the Debtors relate that they intend to progress these cases toward confirmation as soon as a plan structure -- whether it be the filed plan or an alternative plan structure -- emerges as the most feasible way to deleverage their balance sheet, address legacy costs, and assure their OEM customers that they will be a reliable and stable supplier and partner in the future. Against this backdrop, the Debtors assert that all of the factors courts generally weigh in determining whether to extend exclusivity weigh in favor of extending their Exclusive Periods. The Debtors remind the Court that in less than nine months since the Petition Date, they have effectuated an aggressive operational restructuring and executed on a number of liquidity- enhancing measures, including attaining substantial accommodation agreements with five key customers and procuring a favorable debtor-in-possession financing facility from a subset of the Term Lenders. The Debtors add that they have also begun their claims reconciliation process in an effort to determine the extent of the claims pool and its impact on potential recoveries. The Court will convene a hearing on March 16, 2010, to consider the Debtors' exclusivity request. Objections are due no later than March 11. About Visteon Corp. Headquartered in Van Buren Township, Michigan, Visteon Corporation (NYSE: VC) -- http://www.visteon.com/-- is a global automotive supplier that designs, engineers and manufactures innovative climate, interior, electronic and lighting products for vehicle manufacturers, and also provides a range of products and services to aftermarket customers. The company has corporate offices in Van Buren Township, Michigan (U.S.); Shanghai, China; and Kerpen, Germany. It has facilities in 27 countries and employs roughly 35,500 people. The Company has assets of $4,561,000,000 and debts of $5,311,000,000 as of March 31, 2009. Visteon Corporation and 30 of its affiliates filed for Chapter 11 protection on May 28, 2009, (Bank. D. Del. Case No. 09-11786 through 09-11818). Judge Christopher S. Sontchi oversees the Chapter 11 cases. James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., and James J. Mazza, Jr., Esq., at Kirkland & Ellis LLP, in Chicago, Illinois, represent the Debtors in their restructuring efforts. Laura Davis Jones, Esq., James E. O'Neill, Esq., Timothy P. Cairns, Esq., and Mark M. Billion, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, serve as the Debtors' local counsel. The Debtors' investment banker and financial advisor is Rothschild Inc. The Debtors' notice, claims, and solicitation agent is Kurtzman Carson Consultants LLC. The Debtors' restructuring advisor is Alvarez & Marsal North America, LLC. Bankruptcy Creditors' Service, Inc., publishes Visteon Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Visteon Corp. and its debtor-affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000) VISTEON CORP: Bank Debt Trades at 109.66% in Secondary Market ------------------------------------------------------------- Participations in a syndicated loan under which Visteon Corporation is a borrower traded in the secondary market at 109.66 cents-on-the-dollar during the week ended Friday, Feb. 26, 2010, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 0.73 percentage points from the previous week, The Journal relates. The loan matures on May 30, 2013. Visteon pays 300 basis points above LIBOR to borrow under the facility. Moody's has withdrawn its rating on the bank debt and it is not rated by Standard & Poor's. The debt is one of the biggest gainers and losers among 188 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. Headquartered in Van Buren Township, Michigan, Visteon Corporation (NYSE: VC) -- http://www.visteon.com/-- is a global automotive supplier that designs, engineers and manufactures innovative climate, interior, electronic and lighting products for vehicle manufacturers, and also provides a range of products and services to aftermarket customers. The company has corporate offices in Van Buren Township, Michigan (U.S.); Shanghai, China; and Kerpen, Germany. It has facilities in 27 countries and employs roughly 35,500 people. The Company has assets of $4,561,000,000 and debts of $5,311,000,000 as of March 31, 2009. Visteon Corporation and 30 of its affiliates filed for Chapter 11 protection on May 28, 2009, (Bank. D. Del. Case No. 09-11786 through 09-11818). Judge Christopher S. Sontchi oversees the Chapter 11 cases. James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., and James J. Mazza, Jr., Esq., at Kirkland & Ellis LLP, in Chicago, Illinois, represent the Debtors in their restructuring efforts. Laura Davis Jones, Esq., James E. O'Neill, Esq., Timothy P. Cairns, Esq., and Mark M. Billion, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, serve as the Debtors' local counsel. The Debtors' investment banker and financial advisor is Rothschild Inc. The Debtors' notice, claims, and solicitation agent is Kurtzman Carson Consultants LLC. The Debtors' restructuring advisor is Alvarez & Marsal North America, LLC. Bankruptcy Creditors' Service, Inc., publishes Visteon Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Visteon Corp. and its debtor-affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000) VISTEON CORP: Earns $184 Million in 2009 Despite Sales Decrease --------------------------------------------------------------- Visteon Corporation and subsidiaries reported net income of $184.0 million on net sales of $6.68 billion for the year ended December 31, 2009, compared to a net loss of $647.0 million on net sales of $9.54 billion for the year ended December 31, 2008. Net sales decreased $2.86 billion during the year ended December 31, 2009, when compared to the same period of 2008, consisting of a $2.66 billion decrease in product sales and a $202 million decrease in services revenues. The decrease in product sales included a $1.7 billion decline associated with lower production volumes and customer sourcing actions in all regions and for all major customers, $610 million associated with facility divestitures and closures, $300 million of unfavorable currency primarily related to the Euro and Korean Won, and net customer price reductions. Net sales for Climate were $2.54 billion for the year ended December 31, 2009, compared with $3.14 billion for the same period of 2008, representing a decrease of $600 million. Net sales for Electronics were $2.17 billion for the year ended December 31, 2009, compared to $3.28 billion for the same period of 2008, representing a decrease of $1.11 billion. Net sales for Interiors were $1.92 billion and $2.80 billion for the years ended December 31, 2009 and 2008, respectively, representing a decrease of $877 million. Services revenues primarily relate to information technology, engineering, administrative and other business support services provided by the Company to Automotive Components Holdings, LLC ("ACH"), an indirect, wholly-owned subsidiary of the Company. Said services are generally provided at an amount that approximates cost. Total services revenues were $265 million for the year ended December 31, 2009, compared with $467 million for the same period of 2008. The decrease in services revenue represents lower ACH utilization of the Company's services in connection with the terms of various agreements. The Company's gross margin was $597 million for the year ended December 31, 2009, compared with $459 million for the same period in 2008, representing an increase of $138 million. Selling, general and administrative expenses were $331 million for the year ended December 31, 2009, compared with $553 million for the same period in 2008, representing a decrease of $222 million. The Company recorded restructuring expenses of $84 million for the year ended December 31, 2009, compared to $147 million for the same period in 2008. Substantially all of the Company's restructuring expenses are related to employee severance and termination benefit costs. The Company recorded reimbursement for qualifying restructuring costs of $62 million and $113 million for the years ended December 31, 2009, and 2008, respectively, pursuant to the terms of the Amended Escrow Agreement. All remaining funds available under the Amended Escrow Agreement were fully utilized during 2009. On March 31, 2009, representatives from KPMG were appointed as administrators of Visteon UK Limited, a company organized under the laws of England and Wales and an indirect, wholly-owned subsidiary of Visteon Corporation. As of March 31, 2009, total assets of $64 million, total liabilities of $132 million and related amounts deferred as "Accumulated other comprehensive income" of $84 million, were deconsolidated from the Company's balance sheet resulting in a deconsolidation gain of $152 million. The Company also recorded $57 million for contingent liabilities related to the UK Administration, including $45 million of costs associated with former employees of the UK Debtor, for which the Company was reimbursed from the escrow account on a 100% basis. On December 24, 2009, the Company terminated a lease arrangement that was subject to a previous sale-leaseback transaction, ceasing the Company's continuing involvement and triggering the recognition of $30 million of previously deferred gains on the sale-leaseback transaction. This amount was partially offset by a loss of $10 million associated with the remaining net book value of leasehold improvements associated with the facility and $9 million of other losses and impairments related to asset disposals. The Company recorded reorganization items of $60 million for the year ended December 31, 2009. These items are primarily related to professional service fees. Interest expense was $117 million for the year ended December 31, 2009, compared to $215 million for the year ended December 31, 2008. The decrease is primarily due to the Company ceasing to record interest expense in connection with the Chapter 11 proceedings. Interest income was $11 million for the year ended December 31, 2009, compared to $46 million for the year ended December 31, 2008. The Company's 2009 provision for income tax was $80.0 million, a $36 million decrease when compared with 2008. Balance Sheet At December 31, 2009, the Company's consolidated balance sheets showed $5.02 billion in total assets, $5.47 billion in total liabilities (including $2.82 billion in liabilities subject to compromise), resulting in a $455 million shareholders' deficit. A full-text copy of the Company's annual report for 2009 is available at no charge at http://researcharchives.com/t/s?555e Bankruptcy Proceedings During 2008, weakened economic conditions, largely attributable to the global credit crisis, and erosion of consumer confidence, negatively impacted the automotive sector on a global basis. Despite actions taken by the Company to reduce its operating costs in 2008, the rate of reductions did not keep pace with that of the rapidly deteriorating market conditions and related decline in OEM production volumes, which resulted in significant operating losses and cash flow usage by the Company, particularly in the fourth quarter of 2008. On March 31, 2009, Visteon UK Limited filed for administration under the United Kingdom Insolvency Act of 1986 with the High Court of Justice, Chancery division in London, England. The UK Administration does not include the Company or any of the Company's other subsidiaries. The UK Administration was initiated in response to continuing operating losses of the UK Debtor and mounting labor costs and their related demand on the Company's cash flows. Since their appointment, the Administrators have wound down the business of the UK Debtor and closed its operations in Enfield, UK, Basildon, UK and Belfast, UK, and made the employees redundant. The Administrators continue to realize the UK Debtor's assets, primarily comprised of receivables. Amounts related to contingent liabilities for potential claims under the UK Administration, which may result from (i) negotiations; (ii) actions of the Administrators; (iii) resolution of contractual arrangements, including unexpired leases; (iv) assertions by the UK Pensions Regulator; and, (v) material adverse developments; or other events, may be recorded in future periods. Accordingly, no assurance can be provided that the Company will not be subject to future litigation and/or liabilities related to the UK Administration. On May 28, 2009, Visteon and certain of its U.S. subsidiaries filed voluntary petitions for reorganization relief under Chapter 11 of the U.S. Bankruptcy Code in the Bankruptcy Court for the District of Delaware. The reorganization cases are being jointly administered as Case No. 09-11786. The Company's other subsidiaries, primarily non-U.S. subsidiaries, have been excluded from the Chapter 11 proceedings and continue to operate their businesses without supervision from the Court and are not subject to the requirements of the Bankruptcy Code. The Debtors are currently funding post-petition operations under a temporary cash collateral order from the Bankruptcy Court and a $150 million Senior Secured Super Priority Priming Debtor in Possession Credit and Guaranty Agreement, under which the Company has borrowed $75 million and may borrow the remaining $75 million in one additional advance prior to maturity, subject to certain conditions. The Company's non-debtor subsidiaries are funding their operations through cash generated from operating activities supplemented by customer support agreements and local financing arrangements or through cash transfers from the Debtors subject to specific authorization from the Court. The Company has also entered into various accommodation and other support agreements with certain North American and European customers that provide for additional liquidity through cash surcharge payments, payments for research and engineering costs, accelerated payment terms, asset sales and other commercial arrangements. There can be no assurance that cash on hand and other available funds will be sufficient to meet the Company's reorganization or ongoing cash needs or that the Company will be successful in extending the duration of the temporary cash collateral order with the Bankruptcy Court or that the Company will remain in compliance with all necessary terms and conditions of the DIP Credit Agreement or that the lending commitments under the DIP Credit Agreement will not be terminated by the lenders. On August 26, 2009, pursuant to the Bankruptcy Code, the Debtors filed statements and schedules with the Court setting forth the assets and liabilities of the Debtors as of the Petition Date. In September 2009, the Debtors issued approximately 57,000 proof of claim forms to their current and prior employees, known creditors, vendors and other parties with whom the Debtors have previously conducted business. An October 15, 2009 bar date was set for the filing of proofs of claim against the Debtors. On December 17, 2009, the Debtors filed a plan of reorganization and related disclosure statement with the Bankruptcy Court. As set forth in the Disclosure Statement, the Plan is predicated on the termination of certain pension plans to ensure the equitization of secured term lender interests. The Plan calls for settlement of the Debtors' estate through the split of equity interests in the reorganized Debtors between the secured interests (96%) and the Pension Benefit Guaranty Corporation (4%) on account of its controlled group underfunding claim, which is structurally superior to the claims of other unsecured interests. Disclosure Statement hearings associated with the Plan scheduled for January and February 2010 were postponed to allow more time to consider alternatives to the Plan. The Company believes that its presently outstanding equity securities will have no value and will be canceled under any plan of reorganization and it urges that caution be exercised with respect to existing and future investments in any security of the Company. About Visteon Corp. Headquartered in Van Buren Township, Michigan, Visteon Corporation (NYSE: VC) -- http://www.visteon.com/-- is a global supplier of climate, interiors and electronics systmes, modules and components to global automotive original equipment manufacturers. Visteon has a workforce of approximately 29,500 employees and a network of manufacturing operations, technical centers customer service centers and joint ventures in every major geographic region of the world. The Company had assets of $4,561,000,000 and debts of $5,311,000,000 as of March 31, 2009. Visteon Corporation and 30 of its affiliates filed for Chapter 11 protection on May 28, 2009, (Bank. D. Del. Case No. 09-11786 through 09-11818). Judge Christopher S. Sontchi oversees the Chapter 11 cases. James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., and James J. Mazza, Jr., Esq., at Kirkland & Ellis LLP, in Chicago, Illinois, represent the Debtors in their restructuring efforts. Laura Davis Jones, Esq., James E. O'Neill, Esq., Timothy P. Cairns, Esq., and Mark M. Billion, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, serve as the Debtors' local counsel. The Debtors' investment banker and financial advisor is Rothschild Inc. The Debtors' notice, claims, and solicitation agent is Kurtzman Carson Consultants LLC. The Debtors' restructuring advisor is Alvarez & Marsal North America, LLC. Bankruptcy Creditors' Service, Inc., publishes Visteon Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Visteon Corp. and its debtor-affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000) WASHINGTON MUTUAL: Court Denies Disbandment of Equity Committee --------------------------------------------------------------- In a written order dated February 17, 2010, Judge Mary F. Walrath of the United States Bankruptcy Court for the District of Delaware denied the request of Washington Mutual, Inc., and WMI Investment Corp., for disbandment of the Official Committee of Equity Security Holders. The Order reinforces Judge Walrath's oral ruling on January 28, 2010, denying the request. She noted at the hearing that equity holders "have a right to a place at the table." Composed of seven equity holders, the Equity Committee was appointed on January 11, 2010, by Roberta A. DeAngelis, the Acting United States Trustee for Region 3, pursuant to Section 1102(a)(1) of the Bankruptcy Code. The Debtors argued that any action taken by the Equity Committee would be duplicative of action they have undertaken in connection with the prosecution of litigation claims. Refuting the Debtors' request, the Equity Committee asserted that it should be allowed to effectively participate in the formulation of a Chapter 11 plan and the negotiation of litigation with respect to (i) adversary proceedings relating to WaMu's request for the turnover of $4 billion in funds held by JPMorgan Chase Bank, National Association and JPMorgan's complaint against the Debtors, the Official Committee of Unsecured Creditors and the Federal Deposit Insurance Corporation, as receiver for Washington Mutual Bank; and (ii) the action styled American National Insurance Co., et al. v. FDIC, litigated in the U.S. District Court for the District of Columbia, which tackles allegations that JPMorgan engaged in sham negotiations. Judge Walrath also denied the request of Black Horse Capital Management LLC to "properly reconstitute" the membership of the Equity Committee with the holders of WaMu's true preferred stock or the Preferred Holders. The Court slammed Black Horse's contention that WaMu has issued outstanding preferred stock in the amount of approximately $7.5 billion, which has a liquidation preference over common equity. Judge Walrath's order is consistent with an agreed order reached among the Debtors, the Equity Committee, the Creditors' Committee, Black Horse, and the U. S. Trustee. Holders of senior notes issued by Washington Mutual Bank have not objected to the Agreed Order, according to the Debtors. About Washington Mutual Based in Seattle, Washington, Washington Mutual Inc. -- http://www.wamu.com/-- is a holding company for Washington Mutual Bank as well as numerous non-bank subsidiaries. The Company operates in four segments: the Retail Banking Group, which operates a retail bank network of 2,257 stores in California, Florida, Texas, New York, Washington, Illinois, Oregon, New Jersey, Georgia, Arizona, Colorado, Nevada, Utah, Idaho and Connecticut; the Card Services Group, which operates a nationwide credit card lending business; the Commercial Group, which conducts a multi-family and commercial real estate lending business in selected markets, and the Home Loans Group, which engages in nationwide single-family residential real estate lending, servicing and capital markets activities. Washington Mutual Bank was taken over September 25 by U.S. government regulators. The next day, WaMu and its affiliate, WMI Investment Corp., filed separate petitions for Chapter 11 relief (Bankr. D. Del. 08-12229 and 08-12228, respectively). Wamu owns 100% of the equity in WMI Investment. Weil Gotshal & Manges represents the Debtors as counsel. When WaMu filed for protection from its creditors, it listed assets of $32,896,605,516 and debts of $8,167,022,695. WMI Investment listed assets of $500,000,000 to $1,000,000,000 with zero debts. Bankruptcy Creditors' Service Inc. publishes Washington Mutual Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Washington Mutual Inc. (http://bankrupt.com/newsstand/or 215/945-7000). WASHINGTON MUTUAL: Plan Participants Insist Rights on HFA Trusts ---------------------------------------------------------------- The H.F. Ahmanson & Co. Trusts entitled participants under the HFA Deferred Compensation Plans "to immediate lump sum payments of their Plan benefits at any time subject to penalty," as enforceable under Section 502(a)(1)(B) of the Employee Retirement Income Security Act of 1974, Laurie A. Krepto, Esq., at Montgomery, McCracken, Walker & Rhoads, LLP, in Wilmington, Delaware, explains on behalf of Plan Participants William E. Broza, Geoffrey G. Olsen, Kari Noomen, Donald T. Cook, Kevin J. McDonough and Dottie Jensen. When the Participants stated their requests for distributions in 2007, WaMu "deliberately refused" its obligation and legal duty to administer the Ahmanson Plans in accordance with the Plans' terms, and to distribute the Plan benefits immediately, Ms. Krepto reveals. Instead, WaMu intentionally misled the Participants into believing that they had no right under any circumstances, Ms. Krepto tells the Court. Instead of providing the "full and fair" review mandated by ERISA, WaMu (i) refused to process the Participants' requests, (ii) failed to tell the Participants about the Ahmanson Plans' provision that allowed for immediate distributions, (iii) failed to ensure that they were aware of the Participants' rights under the Ahmanson Plans, and (iv) failed to provide the Participants any appeal or review of the Participants' denied claims, Ms. Krepto relates. "Each and every time that the Participants reached out to [WaMu's] Human Resources Department for help in the fall of 2007, [WaMu] stonewalled the Participants by citing vague concerns about the risk of 'constructive receipt' and about the applicability of an inapplicable statute," Ms. Krepto discloses. Ms. Krepto further points out that at the same time WaMu ignored the Participants' repeated requests, WaMu Chief Executive Officer Kerry Killinger and other senior executives received their WaMu plan benefits through amendment of the WaMu Plan to provide for "accelerated elections" under Section 409(A) of the Internal Revenue Code. However, unlike the Ahmanson Plans whose benefits are secured by $69 million under the Ahmanson Trusts, WaMu had not set aside a pool of money in a rabbi trust to fund WaMu Plan benefits, she notes. "[Mr.] Killinger alone received over $40 million funded in company money," Ms Krepto laments. "Yet, [WaMu] seeks to deny the Participants' rightful claims to $3 million in Ahmanson Plan benefits by asserting ownership rights over the $69 million in the Ahmanson Trusts to pay-off its creditors. Now that it is in bankruptcy, it seeks to invoke the insolvency provision of the Ahmanson Trusts to deny yet again the Participants' rightful claims." Accordingly, the Plan Participants ask Judge Walrath to: -- deny the Debtors' request to reopen and supplement the Debtors' record and exercise ownership of the Ahmanson Trusts; -- entitle them to benefits under ERISA; and -- impose a constructive trust over the funds held in the Ahmanson Trusts in their favor in an amount sufficient to provide for their interests in the Ahmanson Plans. Plan Participants' Objections are Meritless, Debtors Assert Mark D. Collins, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, explains that the Ahmanson Plans, as "non- qualified plans," must be unfunded and at all times, involves the risk of deferred amounts being forfeited. Distributions under the Ahmanson Plans must be payable from the general assets of the employer, Mr. Collins elaborates. If the employer sets aside assets in a trust to provide funding for those distributions, the assets must be subject to other creditors' claims in the event of WaMu's bankruptcy. Hence, upon WaMu's bankruptcy, the Funds automatically became property of the estate, available for distribution to all creditors, while the deferred compensation participants retain general unsecured claims against the employer's estate, Mr. Collins continues. "Exercising its fiduciary duty to maximize the value of its estate and provide assets for distribution to creditors, WaMu sought to liquidate the Trusts," Mr. Collins related in a post- trial brief and memorandum of law filed with the Court. "The fact that the Trusts' assets are subject to claims of WaMu's creditors is the precise characteristic of the Trusts that enabled the Participants -- and all other beneficiaries of, and participants in, the Ahmanson Plans -- to enjoy tax benefits with respect to their deferred compensation for years," Mr. Collins explains. It seems that the Participants want the Court to disregard the restrictions under the Trust, so they can get paid ahead of WaMu's other creditors, Mr. Collins contends. Moreover, he notes, the Participants seek direct ownership interest in the Trust Assets by implementing a constructive trust -- which is legally defective and factually without merit. The Plan Participants must assert their claims, along with all the Debtors' other creditors, against the Debtors' estate, pursuant to the Chapter 11 process "to ensure fair treatment to all of the Debtors' creditors," Mr. Collins maintains. The Official Committee of Unsecured Creditors submitted a joinder in support of the Debtors' arguments. The Debtors and Plan Participants also filed with the Court document appendices to support their arguments. Debtors Seek to File Documents Under Seal JPMorgan Chase Bank, National Association, paid certain of the Plan Participants amounts owed pursuant to the WaMu Deferred Compensation Plan, in exchange for an assignment of proofs of claim against WaMu. JPMorgan specifically filed Claim No. 2373 with respect to, among other things, the Assigned Claims. The Debtors aver that certain personally identifiable and confidential information with respect to the Claim are central to arguments they made. In order for the Debtors to successfully argue the HFA Trust Motion and for the Court to be fully informed, the Confidential Information must be referenced in the Debtors' submitted documents, Mr. Collins says. Accordingly, the Debtors ask the Court, pursuant to Section 107(c) of the Bankruptcy Code, to authorize them, and direct the Clerk of the Court, to: (a) file redacted versions of the Post-Trial Brief and the Confidential Exhibits; and (b) submit to the Court and maintain unredacted copies of the Post-Trial Brief and Confidential Exhibits under seal. According to Mr. Collins, the Post-Trial Brief and the Confidential Exhibits both include the Confidential Information that consist of personal financial information regarding the Participants. Public disclosure of such information could impact WaMu employees' privacy interests, he insists. On the contrary, Mr. Collins notes, no harm would befall on any party by redacting the Confidential Information from the Debtors' public filings and providing those information only on a limited basis to those parties who truly need access to it. About Washington Mutual Based in Seattle, Washington, Washington Mutual Inc. -- http://www.wamu.com/-- is a holding company for Washington Mutual Bank as well as numerous non-bank subsidiaries. The Company operates in four segments: the Retail Banking Group, which operates a retail bank network of 2,257 stores in California, Florida, Texas, New York, Washington, Illinois, Oregon, New Jersey, Georgia, Arizona, Colorado, Nevada, Utah, Idaho and Connecticut; the Card Services Group, which operates a nationwide credit card lending business; the Commercial Group, which conducts a multi-family and commercial real estate lending business in selected markets, and the Home Loans Group, which engages in nationwide single-family residential real estate lending, servicing and capital markets activities. Washington Mutual Bank was taken over September 25 by U.S. government regulators. The next day, WaMu and its affiliate, WMI Investment Corp., filed separate petitions for Chapter 11 relief (Bankr. D. Del. 08-12229 and 08-12228, respectively). Wamu owns 100% of the equity in WMI Investment. Weil Gotshal & Manges represents the Debtors as counsel. When WaMu filed for protection from its creditors, it listed assets of $32,896,605,516 and debts of $8,167,022,695. WMI Investment listed assets of $500,000,000 to $1,000,000,000 with zero debts. Bankruptcy Creditors' Service Inc. publishes Washington Mutual Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Washington Mutual Inc. (http://bankrupt.com/newsstand/or 215/945-7000). WASHINGTON MUTUAL: SEC, Ratings Agencies Need Not Produce Docs. --------------------------------------------------------------- Bankruptcy Judge Mary Walrath entered a written order, denying the request of Washington Mutual, Inc., to compel its former suitors, regulatory entities, rating agencies, banks, professional entities and government agencies to produce documents and witnesses for examination pursuant to Rule 2004 of the Federal Rules of Bankruptcy Procedure and Local Rule 2004-1 of Bankruptcy Practice of the United States Bankruptcy Court for the District of Delaware. The Debtors have previously stated that "Knowledgeable Parties" are likely to have information they currently are unable to obtain, with respect to the business tort and tortious interference against JPMorgan Chase Bank, National Association, in connection with their investigation of certain prepetition conduct that may unearth estate claims. The Debtors specifically sought from the Knowledgeable Parties documents and information relating to, among others, property, liabilities and financial condition of WaMu and any other matter which may affect the administration of their Chapter 11 estates. Judge Walrath previously denied the request at a hearing on January 28, 2010, noting that "issuing subpoenas against dozens of third parties just goes too far," according to reports. The Court also suggested that WaMu was trying "an end run" around discovery to get documents from the Federal Deposit Insurance Corporation. In separate filings, the Debtors informed the Court and parties- in-interest that the Office of Thrift Supervision and TPG Capital, formerly Texas Pacific Group, have voluntarily produced documents responsive to the Rule 2004 Exam request. About Washington Mutual Based in Seattle, Washington, Washington Mutual Inc. -- http://www.wamu.com/-- is a holding company for Washington Mutual Bank as well as numerous non-bank subsidiaries. The Company operates in four segments: the Retail Banking Group, which operates a retail bank network of 2,257 stores in California, Florida, Texas, New York, Washington, Illinois, Oregon, New Jersey, Georgia, Arizona, Colorado, Nevada, Utah, Idaho and Connecticut; the Card Services Group, which operates a nationwide credit card lending business; the Commercial Group, which conducts a multi-family and commercial real estate lending business in selected markets, and the Home Loans Group, which engages in nationwide single-family residential real estate lending, servicing and capital markets activities. Washington Mutual Bank was taken over September 25 by U.S. government regulators. The next day, WaMu and its affiliate, WMI Investment Corp., filed separate petitions for Chapter 11 relief (Bankr. D. Del. 08-12229 and 08-12228, respectively). Wamu owns 100% of the equity in WMI Investment. Weil Gotshal & Manges represents the Debtors as counsel. When WaMu filed for protection from its creditors, it listed assets of $32,896,605,516 and debts of $8,167,022,695. WMI Investment listed assets of $500,000,000 to $1,000,000,000 with zero debts. Bankruptcy Creditors' Service Inc. publishes Washington Mutual Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Washington Mutual Inc. (http://bankrupt.com/newsstand/or 215/945-7000). WEST HAWK: Wants Plan Filing Further Extended Until May 12 ---------------------------------------------------------- West Hawk Energy (USA), LLC, et al., have asked the U.S. Bankruptcy Court for the District of Colorado to extend the period through which they have the exclusive right to file a plan by an additional 90 days until May 12, 2010, and to extend the date by which each class of impaired creditors must accept the plan until July 12, 2010. West Hawk filed for Chapter 11 bankruptcy protection on December 18, 2008, while WHE Holdings, LLC, filed for the same bankruptcy protection on April 7, 2009. Holdings' case is jointly administered with West Hawk's. Due to substantial identity between the Debtors, they have filed a motion for substantive consolidation of their two estates. That motion is pending. The Debtors say that KT First Lending, LLC, an affiliate of Chiron Financial Advisors, LLC, and the proposed lender to the Debtors under the motion for approval of post-petition financing dated August 14, 2009, is in direct negotiation with mineral rights holders regarding the terms of an investment in the Figure Four Project. This investment would replace the Debtors' rights with respect to the Drilling and Development Agreement and would provide a basis for a plan of reorganization addressing treatment of claims. In addition, the Debtors are in discussion with a group (including some present and former management) for acquisition of the Debtors' interest in the project on terms that would provide some recovery to creditors. The Debtors are aware that a settlement may become an unreachable possibility, in which case they are willing to consider conversion of their Chapter 11 bankruptcy case to Chapter 7. According to the Debtors, a 90-day extension of the exclusivity periods will provide the Debtors with sufficient time to negotiate a deal and draft a plan of reorganization. The Court has set a hearing for March 2, 2010, at 3:30 p.m. on the Debtors' request to extend the exclusivity period. Headquartered in Englewood, Colorado, West Hawk Energy USA, LLC -- http://www.westhawkdevelopment.com/-- provides energy products (e.g. oil and gas) from a variety of sources. Assets under development include the figure four natural gas property located in the Piceance Basin, Colorado, being developed under a drilling and development agreement; and the Groundhog coal property located in northwest British Columbia. The Company filed for Chapter 11 on Dec. 18, 2008 (Bankr. D. Colo. Case No. 08-30241). Cecilia Kupchik, Esq., at Kupchik Rossi LLC represents the Debtor in its restructuring effort. The Debtor did not file a list of 20 largest unsecured creditors. In its petition, the Debtor listed assets and debts both ranging from $10 million to $50 million. WESTERN REFINING: Bank Debt Trades at 9% Off in Secondary Market ---------------------------------------------------------------- Participations in a syndicated loan under which Western Refining, Inc., is a borrower traded in the secondary market at 90.54 cents- on-the-dollar during the week ended Friday, Feb. 26, 2010, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents a drop of 0.64 percentage points from the previous week, The Journal relates. The Company pays 600 basis points above LIBOR to borrow under the facility. The bank loan matures on May 31.2014, and carries Moody's B3 rating and Standard & Poor's BB- rating. The debt is one of the biggest gainers and losers among 188 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. Western Refining, Inc., headquartered in El Paso, Texas, is an independent refining and marketing company. Western owns and operates a 128,000 barrel per day low complexity light sweet refinery at El Paso, Texas, a medium sized relatively complex coking refinery at Yorktown, Virginia, and two very small light sweet crude oil refineries in the Four Corners region of New Mexico. W.R. GRACE: Adage Continues to Own 5.07% of Common Stock -------------------------------------------------------- In a Schedule 13-G filed with the U.S. Securities and Exchange Commission on February 16, 2010, Adage Capital Partners, L.P., disclosed that it has shared voting power and shared dispositive power of 3,661,356 shares of W.R. Grace & Co. common stock. Adage owns an aggregate of 3,661,356 or 5.07% of 72,236,518 Grace shares issued and outstanding as of October 31, 2009. Adage Capital Partners GP, L.L.C., Adage Capital Advisors, L.L.C., as general partners of ACP, each owns 3,661,356 shares of Grace common stock. Robert Atchinson and Phillip Gross, as managing members of ACP, also disclose ownership of 3,661,356 Grace shares. The disclosure restates Adage's SEC filing as of December 24, 2009. 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: FMR LLC Has 14.43% Equity Stake ------------------------------------------- FMR LLC disclosed with the Securities and Exchange Commission on February 16, 2010, that it beneficially owns 10,426,017 shares of W.R. Grace & Co. common stock, or a 14.43% equity stake in Grace based on the Company's 72,236,518 shares issued and outstanding as of October 31, 2009. FMC LLC has the sole power to vote or direct the vote on 467,750 shares and the sole power to dispose, or direct the disposition of, 10,426,017 shares. 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 9,878,087 shares or 13.675% of Grace outstanding common stock as a result of acting as investment adviser. Edward C. Johnson 3d and FMR LLC, through its control of Fidelity and the funds each has sole power to dispose of the 9,878,087 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. Pyramis Global Advisors Trust Company, an indirect wholly-owned subsidiary of FMR LLC and a bank as defined in Section 3(a)(6) of the Securities Exchange Act of 1934, is the beneficial owner of 527,030 shares or 0.730% of the outstanding Common Stock of the W.R. Grace & Company as a result of its serving as investment manager of institutional accounts owning those shares. Edward C. Johnson 3d and FMR LLC, through its control of Pyramis, each has sole dispositive power over 527,030 shares and sole power to vote or to direct the voting of 446,850 shares of Common Stock owned by the institutional accounts managed by PGATC. 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 is the beneficial owner of 20,900 shares or 0.029% 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. 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: P. Norris Resigns From Board of Directors ----------------------------------------------------- W. R. Grace & Co. has announced that Paul J. Norris has resigned from its Board of Directors, a transition planned in 2009. Mr. Norris joined Grace as President and Chief Executive Officer in 1998 and was elected Chairman of the Board in 1999. He served as President until 2003, CEO until 2005 and remained a member of Grace's Board after relinquishing the Chairman responsibility in 2008. The Grace Board has nine members after Mr. Norris' resignation. "Paul led Grace through one of the most challenging times in its history," said Fred Festa, Grace's Chairman, President and Chief Executive Officer. "While managing through this period, Paul sharpened Grace's focus on growth and productivity. He introduced Six Sigma concepts at Grace and new approaches to safety. Each year, Grace locations around the world strive to receive the Norris Award for outstanding safety performance. We thank him for his service to Grace and wish him well." * Bank Failures This Year Reach 22 ---------------------------------- Regulators closed two banks bank Friday -- Rainier Pacific Bank, Tacoma, WA; and Carson River Community Bank, Carson City, NV -- raising the total closings for this year to 22. The Federal Deposit Insurance Corporation was appointed receiver for the banks. In accordance with Federal law, allowed claims against failed financial institutions will be paid, after administrative expenses, in this order of priority: 1. Depositors 2. General Unsecured Creditors 3. Subordinated Debt 4. Stockholders 2010 Failed Banks List The FDIC was appointed as receiver for the closed banks. To protect the depositors, the FDIC entered into a purchase and assumption agreement with various banks that agreed to assume the deposits of most of the closed banks. The FDIC also entered into loss-share transactions on assets bought by the banks. For this year, the failed banks are: Loss-Share Transaction Party FDIC Cost Assets of Bank That Assumed to Insurance Closed Bank Deposits & Bought Fund Closed Bank (millions) Certain Assets (millions) ----------- ---------- -------------- ----------- Rainier Pacific Bank $446.2 Umpqua Bank, Roseburg $95.2 Carson River Community $51.1 Heritage Bank of Nevada $7.9 George Washington $412.8 FirstMerit Bank $141.4 La Jolla Bank $3,600.0 OneWest Bank, FSB $882.3 The La Coste Nat'l $53.9 Community National $3.7 Marco Community Bank $119.6 Omaha Bank $38.1 1st American State $18.2 Community Development $3.1 First National Bank $832.6 Community & Southern $260.4 Florida Community $875.5 Premier American Bank $352.6 American Marine Bank $373.2 Columbia State Bank $58.9 Marshall Bank, N.A. $59.9 United Valley Bank $4.1 First Regional Bank $2,180.0 First-Citizens Bank $825.5 Comm. Bank & Trust $1,210.0 SCBT, N.A. $354.5 Charter Bank $1,200.0 Charter, Albuquerque $201.9 Evergreen Bank $488.5 Umpqua Bank, Roseburg $64.2 Columbia River Bank $1,100.0 Columbia State Bank $172.5 Bank of Leeton $20.1 Sunflower Bank $8.1 Premier American Bank $350.9 Bond Street subsidiary $85.0 Town Community $69.6 Bank First American $17.8 St. Stephen State $24.7 First State Bank $7.2 Barnes Banking $827.8 {DINB Created} $271.3 Horizon Bank $1,400.0 Washington Federal $539.1 In 2009, there were 140 failed banks, compared with just 25 for 2008. A complete list of banks that failed since 2000 is available at: http://www.fdic.gov/bank/individual/failed/banklist.html 702 Banks on Problem List 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 (DIF) 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 * FDIC Auctions $610.5 Million in Loans From Failed Banks --------------------------------------------------------- Brian Louis at Bloomberg News reports that the Federal Deposit Insurance Corp. is seeking bids for $610.5 million of unpaid loans it's holding from failed U.S. lenders including IndyMac Bank, Silverton Bank and New Frontier Bank. Peter Tobin, managing director of New York-based Mission Capital Advisors LLC, the FDIC's marketing agent and financial adviser for the offering, said the loans are backed in part by land, developed lots and condominium construction projects. Most of the properties are in Colorado, California, Utah and Idaho, and about 78 percent of the debt is 90 days or more past due, according to a description on Mission Capital's Web site. According to Bloomberg, the FDIC is disposing of real estate, soured mortgages and personal property ranging from tour buses to palm trees that once belonged to failed banks. * New Bill Seeks Pro-Labor Changes to Chapter 11 ------------------------------------------------ Sen. Dick Durbin, D-Ill., and Sen. John Conyers, D-Mich., have introduced a bill that would restrict executive compensation and make it easier for workers to recover wages during corporate bankruptcies, according to Law360. * Retailers Seen More Reluctant to Seek Bankruptcy Protection ------------------------------------------------------------- Scarred by the wave of retail bankruptcy filings that largely turned into liquidations, restructuring experts say that struggling retailers are doing everything they can to stay out of bankruptcy, according to ABI. * Snow Storm, Toyota Recall to Affect Auto Makers' Feb. Sales ------------------------------------------------------------- Dow Jones Newswires' Sharon Terlep reports that car makers on Tuesday are expected to report disappointing U.S. sales for February, mainly due to snowstorms in the Northeast and Midwest that kept customers away from dealerships. Dow Jones, citing industry forecasting firm TrueCar, also says the quality crisis at Toyota Motor Corp. is predicted to have hurt sales for that company by at least about 25%. Ms. Terlep relates the heavy storm that hit Eastern states from Virginia to Maine in the middle of February brought sales to a halt for almost a week in many areas. "We were completely out of business for a couple of days -- we were open but no one was coming in," said Tammy Darvish, vice president of Darcars Automotive Group, based in Silver Spring, Maryland, according to Ms. Terlep. A second storm late in the month then wiped out February's final weekend, which is when dealers normally report strong sales, Ms. Terlep notes. TrueCar.com last week said it expects February 2010 light vehicle sales (including fleet) in the U.S. to be 752,668 units, a jump of nearly 8% from January 2010 and more than 9% from this time last year (on an unadjusted basis). February's forecast translates into a SAAR level of 10.04 million new car sales. "The Toyota recall paired with bad weather across the country suppressed sales in February," said Jesse Toprak, VP of Industry Trends and Insight for TrueCar.com. "To see a 9% boost over last year is still encouraging for the industry, especially considering the circumstances; this relative growth indicates that the fundamentals that fuel car buying are slowly continuing to improve." According to TrueCar, the February forecast bears out what has been speculated for the last month across the industry: Toyota has lost a great deal of its industry leading market share, ceding it to its primary competitors as well as several less heralded brands. "We anticipate Toyota offering generous consumer incentives with hopes of bringing buyers back to their showrooms in the coming weeks," added Mr. Toprak. "Consumers now have more choices than ever and the quality gap that once existed between the different automakers no longer exists; making price the most important factor in purchasing a vehicle for the majority of consumers." TrueCar.com offers a comprehensive forecast that also goes deeper into the numbers, looking at unit sales and market share by manufacturer, but also shows market share by origin and sales down to the brand level. Forecasts for the top seven manufacturers for February: Unit Sales Forecast Feb. 2010 Change vs. Change vs. Manufacturer Forecast Jan. 2010 Feb. 2009 ------------ --------- ---------- ---------- Chrysler 67,415 18% -20% Ford 129,326 15% 35% GM 152,797 5% 21% Honda 82,981 23% 16% Nissan 66,523 6% 23% Toyota 80,543 -18% -27% Hyundai/Kia 62,671 19% 19% Market Share Forecast Feb. 2010 Manufacturer Forecast Jan. 2010 Feb. 2009 ------------ --------- ---------- ---------- Chrysler 9.0% 8.2% 12.2% Ford 17.2% 16.1% 14.0% GM 20.3% 20.9% 18.4% Honda 11.0% 9.7% 10.4% Nissan 8.9% 9.0% 7.9% Toyota 10.7% 14.2% 15.9% Hyundai/Kia 8.3% 7.5% 7.6% Market share forecasts for the origin of the manufacturer for February: Feb. 2010 Manufacturer Forecast Jan. 2010 Feb. 2009 ------------ --------- ---------- ---------- Europe 9.2% 9.2% 8.4% Japan 36.1% 38.2% 39.5% South Korea 8.3% 7.5% 7.6% USA 46.4% 45.2% 44.5% TrueCar also projects sales down to the brand level. TrueCar.com bases its forecast on actual transaction data that cover nearly 45% of all new car sales in the U.S. The transaction data based forecast is refined by other current and historical factors that impact vehicle sales including: sales, inventory, incentives, fuel prices, and macro economic data (major stock market indexes, consumer confidence, new home starts, and CPI). TrueCar.com does not adjust for selling days in year-over-year percentage change calculations. According to Ms. Terlep, J.D. Power & Associates, another car forecasting and research firm, predicts overall February sales showed a modest increase compared to particularly weak results a year earlier. In February 2009, sales slowed dramatically as the U.S. economy was mired in recession, consumer credit all but disappeared and GM and Chrysler Group LLC moved toward bankruptcy. According to Ms. Terlep, J.D. Power forecasts that auto makers sold about 741,500 cars and light trucks in February, compared to 688,244 in the same month a year ago. That translates into a seasonally adjusted annualized selling rate of 9.9 million vehicles. While that is up from the 9.1 million rate in February 2009, it is a considerable drop from January 2010, when the sales pace was 10.7 million vehicles. Ms. Terlep relates Earl Hesterberg, chief executive of Group 1 Automotive Inc., a dealership chain with several stores in the Northeast, said the industry should recoup its lost sales in coming months. "If someone needs a car they'll come back when the weather's better," he said in a recent interview. The bigger hit for dealers is lost service and repair business. "You have technicians on staff and if they're not generating revenue, you can't make that up," Mr. Hesterberg said, according to Ms. Terlep. * PERELLA WEINBERG: Maurin Joins Restructuring Group ---------------------------------------------------- Sebastien Maurin has joined Perella Weinberg Partners as a Managing Director in its Corporate Advisory Group where he will focus on restructuring and distressed merger and acquisition transactions. Based in London, Mr. Maurin joins a growing team of restructuring advisory professionals that have been involved in more than 30 restructuring transactions since 2007. Mr. Maurin has 21 years of investment banking experience, focusing primarily on advising constituents in restructuring, distressed, and leveraged situations. He was most recently a senior member of the debt restructuring advisory business at MPC Longberry. Prior to that, Mr. Maurin was Head of the Global High Yield and Distressed Debt Proprietary Trading Group at Commerzbank AG. Peter Weinberg, a Founding Partner of Perella Weinberg Partners said, "We are committed to providing first-rate, independent advice to clients as they consider transformative merger, acquisition or restructuring transactions. As such, attracting seasoned professionals whose expertise augments and complements the capabilities of our group is a primary focus. We are dedicated to serving the best interests of our clients, and we remain focused on being a trusted senior advisor as we expand our advisory practice." Michael Kramer, a Partner at Perella Weinberg Partners and head of the Firm's restructuring practice, added, "We are excited to have Sebastien join us as we continue building our restructuring effort in Europe and the United States. We have had a growing demand for our restructuring expertise in Europe and are committed to being a key player in this important space." Perella Weinberg Partners has been actively advising clients globally on an array of in-court and out-of-court restructuring matters. Some of the Firm's recent cross border assignments include advising: -- Reliance Industries on its proposed acquisition of Lyondell Basell (India); -- Thomson S.A. regarding the improvement of its balance sheet (France); -- Education Media & Publishing Group on its debt restructuring (Ireland); -- Dubai World on its joint venture project with MGM Mirage in the City Center project (Dubai); and -- Gulf Bank of Kuwait on its recapitalization plan (Kuwait). Mr. Maurin, 44, has specialized in providing restructuring counsel and has significant experience in dealing with corporates, bondholders, shareholders, and lenders. He was most recently a senior member of the debt restructuring advisory business at MPC Longberry. From 2007 to 2009, Mr. Maurin was Head of the Global High Yield and Distressed Debt Proprietary Trading Group at Commerzbank AG. From 2005 to 2006, he was President and Founding Partner of Financiere GMS, a specialized investment fund that invested in distressed and recovery situations in Europe. Mr. Maurin held several senior roles at JPMorgan in European Secondary Loan Trading and the Restructuring Group where he ran, or was a member of, steering committees for some of the largest restructuring situations in Europe. He also was the President of the Supervisory Board of Allibert SA from 2000 to 2003. Mr. Maurin was a founding member of the European High Yield Team at Lehman Brothers where he developed the research effort, and prior to that was a Vice President in Bank of America's restructuring group. About Perella Weinberg Partners Perella Weinberg Partners -- http://www.pwpartners.com/-- is a financial services firm that provides corporate advisory and asset management services to clients around the world. The corporate advisory business provides high quality, independent advice and transaction execution capabilities, including mergers and acquisitions, exclusive sales, defense advisory and financial restructuring. The global asset management business comprises a suite of hedge fund strategies, private capital, and a multimanager business, and including affiliates, has capital commitments and managed assets of over $5.5 billion. Launched in 2006, the Firm is a private partnership with more than 275 employees recruited from a wide variety of leading financial institutions. The Firm has offices in London, New York, Austin, Denver, and San Francisco. * BOND PRICING -- For the Week From Feb. 22 to 26, 2010 ------------------------------------------------------- Company Coupon Maturity Bid Price ------- ------ -------- --------- 155 E TROPICANA 8.750% 4/1/2012 26.100 ABITIBI-CONS FIN 7.875% 8/1/2009 12.000 ACARS-GM 8.100% 6/15/2024 17.500 ADVANTA CAP TR 8.990% 12/17/2026 13.125 ALERIS INTL INC 9.000% 12/15/2014 0.500 AMBAC INC 9.375% 8/1/2011 47.090 APRIA HEALTHCARE 3.375% 9/1/2033 60.000 ARCO CHEMICAL CO 10.250% 11/1/2010 80.000 AT HOME CORP 0.525% 12/28/2018 0.005 ATHEROGENICS INC 1.500% 2/1/2012 0.375 BALLY TOTAL FITN 13.000% 7/15/2011 2.000 BALLY TOTAL FITN 14.000% 10/1/2013 0.500 BANK NEW ENGLAND 8.750% 4/1/1999 11.125 BANK NEW ENGLAND 9.875% 9/15/1999 9.000 BANK UNITED 8.000% 3/15/2009 0.900 BANKUNITED FINL 3.125% 3/1/2034 7.000 BANKUNITED FINL 6.370% 5/17/2012 5.000 BLOCKBUSTER INC 9.000% 9/1/2012 20.440 BOWATER INC 6.500% 6/15/2013 31.000 BOWATER INC 9.500% 10/15/2012 28.100 CAPMARK FINL GRP 5.875% 5/10/2012 28.500 CHAMPION ENTERPR 2.750% 11/1/2037 6.813 CHANDLER USA INC 8.750% 7/16/2014 20.000 CITADEL BROADCAS 4.000% 2/15/2011 5.000 CMP SUSQUEHANNA 9.875% 5/15/2014 37.000 COLLINS & AIKMAN 10.750% 12/31/2011 1.000 COMPUCREDIT 3.625% 5/30/2025 49.500 CONGOLEUM CORP 8.625% 8/1/2008 21.003 COUNTRYWIDE FINL 5.000% 3/15/2010 98.000 CREDENCE SYSTEM 3.500% 5/15/2010 60.000 DECODE GENETICS 3.500% 4/15/2011 5.875 DECODE GENETICS 3.500% 4/15/2011 6.375 FAIRPOINT COMMUN 13.125% 4/1/2018 12.000 FAIRPOINT COMMUN 13.125% 4/2/2018 15.125 FEDDERS NORTH AM 9.875% 3/1/2014 1.000 FINLAY FINE JWLY 8.375% 6/1/2012 1.000 GENERAL MOTORS 7.125% 7/15/2013 27.965 GENERAL MOTORS 7.700% 4/15/2016 28.750 GENERAL MOTORS 9.450% 11/1/2011 26.500 HAIGHTS CROSS OP 11.750% 8/15/2011 40.500 HAWAIIAN TELCOM 9.750% 5/1/2013 3.000 INDALEX HOLD 11.500% 2/1/2014 1.050 INN OF THE MOUNT 12.000% 11/15/2010 47.000 INTL LEASE FIN 5.300% 3/15/2010 98.875 INTL LEASE FIN 7.700% 3/15/2010 96.250 LANDRY'S RESTAUR 9.500% 12/15/2014 85.140 LEHMAN BROS HLDG 4.375% 11/30/2010 21.250 LEHMAN BROS HLDG 4.500% 7/26/2010 21.000 LEHMAN BROS HLDG 4.500% 8/3/2011 16.770 LEHMAN BROS HLDG 4.700% 3/6/2013 18.750 LEHMAN BROS HLDG 4.800% 2/27/2013 18.250 LEHMAN BROS HLDG 4.800% 3/13/2014 21.400 LEHMAN BROS HLDG 5.000% 1/14/2011 21.776 LEHMAN BROS HLDG 5.000% 1/22/2013 18.636 LEHMAN BROS HLDG 5.000% 2/11/2013 18.500 LEHMAN BROS HLDG 5.000% 3/27/2013 19.000 LEHMAN BROS HLDG 5.000% 8/3/2014 17.780 LEHMAN BROS HLDG 5.000% 8/5/2015 18.200 LEHMAN BROS HLDG 5.100% 1/28/2013 17.770 LEHMAN BROS HLDG 5.150% 2/4/2015 18.000 LEHMAN BROS HLDG 5.250% 2/6/2012 23.375 LEHMAN BROS HLDG 5.250% 2/11/2015 16.375 LEHMAN BROS HLDG 5.250% 3/5/2018 18.000 LEHMAN BROS HLDG 5.500% 4/4/2016 21.440 LEHMAN BROS HLDG 5.500% 2/4/2018 18.450 LEHMAN BROS HLDG 5.500% 2/27/2020 15.500 LEHMAN BROS HLDG 5.550% 2/11/2018 18.770 LEHMAN BROS HLDG 5.625% 1/24/2013 23.125 LEHMAN BROS HLDG 5.750% 4/25/2011 20.080 LEHMAN BROS HLDG 5.750% 7/18/2011 21.500 LEHMAN BROS HLDG 5.750% 5/17/2013 22.500 LEHMAN BROS HLDG 5.750% 1/3/2017 0.250 LEHMAN BROS HLDG 6.000% 4/1/2011 17.250 LEHMAN BROS HLDG 6.000% 7/19/2012 22.875 LEHMAN BROS HLDG 6.000% 6/26/2015 18.250 LEHMAN BROS HLDG 6.000% 12/18/2015 17.000 LEHMAN BROS HLDG 6.000% 2/12/2018 18.375 LEHMAN BROS HLDG 6.200% 9/26/2014 21.000 LEHMAN BROS HLDG 6.500% 3/6/2023 17.800 LEHMAN BROS HLDG 6.625% 1/18/2012 22.000 LEHMAN BROS HLDG 6.800% 9/7/2032 17.125 LEHMAN BROS HLDG 6.875% 7/17/2037 0.710 LEHMAN BROS HLDG 6.900% 6/20/2036 16.000 LEHMAN BROS HLDG 7.000% 4/16/2019 17.000 LEHMAN BROS HLDG 7.000% 5/12/2023 17.770 LEHMAN BROS HLDG 7.000% 10/4/2032 17.500 LEHMAN BROS HLDG 7.000% 9/28/2037 17.500 LEHMAN BROS HLDG 7.000% 4/22/2038 16.383 LEHMAN BROS HLDG 7.100% 3/25/2038 17.935 LEHMAN BROS HLDG 7.250% 4/29/2038 18.000 LEHMAN BROS HLDG 7.500% 5/11/2038 0.400 LEHMAN BROS HLDG 7.875% 11/1/2009 20.500 LEHMAN BROS HLDG 7.875% 8/15/2010 21.010 LEHMAN BROS HLDG 8.000% 3/5/2022 14.000 LEHMAN BROS HLDG 8.000% 3/17/2023 16.000 LEHMAN BROS HLDG 8.050% 1/15/2019 17.750 LEHMAN BROS HLDG 8.500% 8/1/2015 25.500 LEHMAN BROS HLDG 8.500% 6/15/2022 15.500 LEHMAN BROS HLDG 8.750% 2/6/2023 17.625 LEHMAN BROS HLDG 8.800% 3/1/2015 19.950 LEHMAN BROS HLDG 8.920% 2/16/2017 19.000 LEHMAN BROS HLDG 9.000% 3/7/2023 18.250 LEHMAN BROS HLDG 9.500% 12/28/2022 17.100 LEHMAN BROS HLDG 9.500% 1/30/2023 17.875 LEHMAN BROS HLDG 9.500% 2/27/2023 16.900 LEHMAN BROS HLDG 10.000% 3/13/2023 18.875 LEHMAN BROS HLDG 10.375% 5/24/2024 16.000 LEHMAN BROS HLDG 11.000% 10/25/2017 17.000 LEHMAN BROS HLDG 11.000% 6/22/2022 18.375 LEHMAN BROS HLDG 11.000% 8/29/2022 17.250 LEHMAN BROS HLDG 11.500% 9/26/2022 18.125 LEHMAN BROS HLDG 18.000% 7/14/2023 18.250 LEINER HEALTH 11.000% 6/1/2012 9.500 MAGNA ENTERTAINM 8.550% 6/15/2010 41.000 MAJESTIC STAR 9.500% 10/15/2010 76.000 MERRILL LYNCH 2.760% 3/9/2011 99.125 METALDYNE CORP 10.000% 11/1/2013 10.000 METALDYNE CORP 11.000% 6/15/2012 1.000 MORRIS PUBLISH 7.000% 8/1/2013 32.250 NEFF CORP 10.000% 6/1/2015 12.500 NETWORK COMMUNIC 10.750% 12/1/2013 42.020 NEWPAGE CORP 10.000% 5/1/2012 60.021 NEWPAGE CORP 12.000% 5/1/2013 39.137 NORTH ATL TRADNG 9.250% 3/1/2012 35.000 PALM HARBOR 3.250% 5/15/2024 68.500 RAFAELLA APPAREL 11.250% 6/15/2011 49.750 RAIT FINANCIAL 6.875% 4/15/2027 40.329 READER'S DIGEST 9.000% 2/15/2017 0.450 REXNORD CORP 10.125% 12/15/2012 38.000 RJ TOWER CORP 12.000% 6/1/2013 1.000 ROTECH HEALTHCA 9.500% 4/1/2012 60.000 SILVERLEAF RES 8.000% 4/1/2010 91.600 SIX FLAGS INC 9.625% 6/1/2014 26.500 SIX FLAGS INC 9.750% 4/15/2013 28.000 SPACEHAB INC 5.500% 10/15/2010 80.200 SPHERIS INC 11.000% 12/15/2012 17.610 STATION CASINOS 6.000% 4/1/2012 16.500 STATION CASINOS 6.875% 3/1/2016 0.625 STATION CASINOS 7.750% 8/15/2016 14.500 THORNBURG MTG 8.000% 5/15/2013 12.375 TIMES MIRROR CO 7.250% 3/1/2013 28.000 TOUSA INC 7.500% 3/15/2011 3.500 TOUSA INC 7.500% 1/15/2015 3.500 TOUSA INC 9.000% 7/1/2010 62.500 TOUSA INC 9.000% 7/1/2010 56.200 TOUSA INC 10.375% 7/1/2012 3.520 TOYOTA-CALL03/10 4.500% 3/20/2017 96.400 TRANS-LUX CORP 8.250% 3/1/2012 45.200 TRIBUNE CO 4.875% 8/15/2010 29.400 TRUMP ENTERTNMNT 8.500% 6/1/2015 1.308 VANGUARD HEALTH 9.000% 10/1/2014 104.366 VERASUN ENERGY 9.375% 6/1/2017 6.625 VERENIUM CORP 5.500% 4/1/2027 49.640 VION PHARM INC 7.750% 2/15/2012 15.500 WASH MUT BANK FA 5.125% 1/15/2015 1.000 WASH MUT BANK FA 5.650% 8/15/2014 0.760 WASH MUT BANK NV 5.500% 1/15/2013 0.375 WASH MUT BANK NV 5.550% 6/16/2010 44.000 WASH MUT BANK NV 5.950% 5/20/2013 0.949 WASH MUT BANK NV 6.750% 5/20/2036 1.375 WCI COMMUNITIES 7.875% 10/1/2013 1.550 WCI COMMUNITIES 9.125% 5/1/2012 3.250 YELLOW CORP 5.000% 8/8/2023 87.500 ********* 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 ***