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/raid1/www/Hosts/bankrupt/TCR_Public/100308.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 8, 2010, Vol. 14, No. 66 Headlines ABITIBIBOWATER INC: Hearing on Wells Fargo Claims Again Adjourned ABITIBIBOWATER INC: Proposes to Sell Rhea Timberland Assets ABITIBIBOWATER INC: Wants to Sell ARN Newsprint for $1.2MM ADELPHIA COMMS: Fraud Transfer Suit Against Citi Still Pending ADRIAN THEODORE: Files Schedules of Assets & Liabilities ADRIAN THEODORE: Gets OK to Hire H&C as Bankruptcy Counsel ADRIAN THEODORE: Section 341(a) Meeting Scheduled for March 25 AFFINITY GROUP: Inks Amended Credit Deals with Two Banks AIRTRAN HOLDINGS: Earns $134.7 Million in 2009 AMERICAN AXLE: Posts $253.3 Million Net Loss in 2009 AMERICAN GENERAL: WFI and AIG Bank Settle Civil Lawsuit with DOJ AMERICAN GENERAL: Posts $473.9 Million Net Loss in 2009 AMERICAN HOMEPATIENT: Reports $13.1 Million Net Loss in 2009 AMERICAN INT'L: Units Settle Mortgage Discrimination Case AMERIGROW RECYCLING: Files Proposed Plan of Reorganization ARENA MEDIA: Files Schedules of Assets & Liabilities ARENA MEDIA: Taps Klestadt & Winters as Bankruptcy Counsel ARENA MEDIA: Proposes to Hold Access 360-Led Auction ARENA MEDIA: Gets Interim Okay to Obtain Postpetition Financing ARTHUR GROOM: Asks for Court OK to Obtain DIP Financing ARTHUR GROOM: Gets Interim Nod to Use Cash Collateral ARVINMERITOR INC: Inks Underwriting Deal for 17.35-Mil. Shares AVAYA INC: Bank Debt Trades at 12% Off in Secondary Market AVIS BUDGET: BlackRock Holds 5.52% of Common Stock AVIS BUDGET: Columbia Wanger Asset Holds 6.2% of Common Stock AVIS BUDGET: Unit to Offer $400 Million of Senior Notes AVIZA TECHNOLOGY: Files Revised Plan of Liquidation BANK OF ILLINOIS: Closed; Heartland Bank Assumes All Deposits BRIGHAM EXPLORATION: Posts $123 Million Net Loss in 2009 BRUNO'S SUPERMARKETS: Citigroup Reaches Agreement in Old Suit BUTLER INTERNATIONAL: Seeks Dismissal of Chapter 11 Case CAROLINA FIRST: Moody's Downgrades Long-Term Issuer Rating to 'C' CENTENNIAL BANK: Closed; FDIC OKs Payout of Insured Deposits CHARTER COMMS: Bank Debt Trades at 6% Off in Secondary Market CHRYSLER LLC: Facing Plan Objections From Taxing Authorities CHRYSLER LLC: Michigan Wants Contaminated Sites Addressed by Plan CHRYSLER LLC: New Chrysler Asserts Ownership of Rabbi Trusts CHRYSLER LLC: Proposes to Sell Sterling Heights Plant for $20MM CHINA SXAN: December 31 Balance Sheet Upside-Down by $132,486 CINCINNATI BELL: Lowers Net Income to $89.8 Million in 2009 CINRAM INTL: Bank Debt Trades at 22% Off in Secondary Market CITADEL BROADCASTING: Bank Debt Trades at 17% Off CITADEL BROADCASTING: Receives Approval to Tap Cash CITADEL BROADCASTING: Committee Proposes Stroock as Lead Counsel CITADEL BROADCASTING: Gets Nod for Deloitte as Auditors CLAIRE'S STORES: Bank Debt Trades at 16% Off in Secondary Market COLONIAL BANCGROUP: Sues FDIC Over Returns; Schulte Hits Back COMMUNITY HEALTH: Bank Debt Trades at 6% Off in Secondary Market COMSTOCK HOMEBUILDING: Inks Loan Modification Deal with BofA CONEXANT SYSTEMS: Prices $175 Million Senior Secured Note CONEXANT SYSTEMS: Launches Comprehensive Refinancing Plan CONSECO INC: Reports $85.7 Million Net Income for 2009 CRESCENT RESOURCES: Bank Debt Trades at 59% Off CTI FOODS: Moody's Affirms Corporate Family Rating at 'B2' DEED AND NOTE: Sec. 341(a) Meeting Scheduled for March 25 DEED AND NOTE: Court Extends Filing of Schedules Until March 15 DEED AND NOTE: Files List of 20 Largest Unsecured Creditors DEED AND NOTE: Gets OK to Hire Gibson Nakamura as Bankr. Counsel DENNY'S CORP: Morgan Stanley Holds 8.2% of Common Stock DENNY'S CORP: Wellington Management Holds 5.35% of Common Stock DENNY'S CORP: Vanguard Group Holds 8.08% of Common Stock DETROIT: Warns of Bankruptcy as It Prepares Bond Sale DIPAK DESAI: Files for Bankruptcy to Halt Civil Lawsuits DOLLAR THRIFTY: Swings to $45 Million Net Income in 2009 E*TRADE FIN'L: Posts 3rd Consecutive Annual Net Loss EMMIS COMMS: Inks New Employment Agreement with Richard Cummings ENNIS HOME: Expects to Emerge from Bankruptcy Protection ERICKSON RETIREMENT: Addresses Disclosure Statement Objections ERICKSON RETIREMENT: Amends Plan to Provide for $356MM Split ERICKSON RETIREMENT: Ex-Employee Wants Separate Class for Claims ERICKSON RETIREMENT: Lenders Object Sec. 1104 Examiner ERICKSON RETIREMENT: MSRESS Gets Nod for Rule 2004 Probe ERICKSON RETIREMENT: Strategic Wants Relief From Deposition FANNIE MAE: Bondholders Shouldn't Assume Govt. Guarantee FIRST AMERICAN: Moody's Assigns 'Ba2' Corporate Family Rating FLOWSERVE CORPORATION: Moody's Raises Corp. Family Rating to 'Ba1' FORD MOTOR: Files Form 10-K; Reports $2.7 Billion Net Income FORD MOTOR CREDIT: Files Form 10-K; Posts $1.3-Billion Net Income FORD MOTOR: Moody's Upgrades Senior Unsec. Ratings to 'B2' FREDDIE MAC: Bondholders Shouldn't Assume Govt. Guarantee FREDDIE MAC: Files January 2010 Monthly Volume Summary GARDUNO'S RESTAURANT: Files for Bankruptcy, Closes Three Shops GATEHOUSE MEDIA: Bank Debt Trades at 53% Off in Secondary Market GENERAL GROWTH: S&P Revises Bank Debt Recovery Ratings to '3' GENERAL MOTORS: To Reinstate 661 Dealers to Shore Up Market Share GENERAL MOTORS: Fee Examiner Reviews $54.7MM Billed by Firms GENERAL MOTORS: Former Dealer Wants $677,000 Wind-Down Payment GENERAL MOTORS: Gets Nod to Settle, Send Claims to Mediation GENERAL MOTORS: Unsec. Bondholder Sues GM, Govt. for Assets Deal GENERAL MOTORS: Wants to Tap Great American as Appraiser GRAHAM PACKAGING: Swings to $11.08MM Net Income in 2009 GULFSTREAM CRANE: U.S. Trustee Appoints 3-Member Creditors Panel HARRAH'S ENTERTAINMENT: HOC Bank Debt Trades at 100.42% HAWKER BEECHCRAFT: Bank Debt Trades at 23% Off in Secondary Market HCA INC: Bank Debt Trades at 4% Off in Secondary Market HERBST GAMING: David Ross Inks Employment Agreement as COO/Gaming HOVNANIAN ENTERPRISES: Swings to $236MM Net Income for Jan. 31 Qtr HOLLY ENERGY: S&P Assigns 'B+' Rating on $150 Mil. Notes HOVNANIAN ENTERPRISES: To Invest $40MM for 10% Stake in Developer IMPLANT SCIENCES: Posts $1.6-Mil. Net Loss for Dec. 31 Quarter INFORMATION SOLUTIONS: S&P Assigns 'BB' Corporate Credit Rating INTEGRA BANK: Continues to Defer Trust Preferred Dividends INTELSAT LTD: Bank Debt Trades at 4% Off in Secondary Market ISLE OF CAPRI: Bank Debt Trades at 3% Off in Secondary Market JANUS CAPITAL: S&P Affirms 'BB+' Counterparty Credit Rating JAPAN AIRLINES: To Cut 5% of Employees at Core Unit KAINOS PARTNERS: Gets Interim Approval to Use Dunkin Brands Cash KORLEY SEARS: Files Schedules of Assets & Liabilities KORLEY SEARS: Section 341(a) Meeting Scheduled for March 11 KORLEY SEARS: Taps Jerrold Strasheim as Bankruptcy Counsel LANDAMERICA FIN'L: OneStop Plan Declared Effective March 1 LANDAMERICA FIN'L: Trustee Sues Fidelity for $50 Million LANDAMERICA FIN'L: Trustee Wants Until Oct. 4 to Object to Claims LAS VEGAS SANDS: Bank Debt Trades at 12% Off in Secondary Market LEAP WIRELESS: Net Loss Widens to $241.08-Mil. for 2009 LEAP WIRELESS: Registers 100,000 Shares Under 2009 Equity Plan LEVEL 3 COMMS: Bank Debt Trades at 9% Off in Secondary Market LODGENET INTERACTIVE: Federated Investors Holds 14.03% Stake LODGENET INTERACTIVE: Morgan Stanley Holds De Minimis Stake MCCLATCHY CO: Rebounds in 2009 with $54 Million of Net Income MEDCLEAN TECHNOLOGIES: Reports $5.4 Million Net Loss in 2009 MESA AIR: Citicorp Holds $25 Mil. Claim MESA AIR: NASDAQ Delists Common Stock METRO-GOLDWYN-MAYER: Bank Debt Trades at 40% Off MGM MIRAGE: Inks Amended & Restated Agreement with Bank of America MICHAELS STORES: Bank Debt Trades at 9% Off in Secondary Market MIDWEST BANC: Inks Exchange Agreement with U.S. Dept. Treasury MOMENTIVE PERFORMANCE: Bank Debt Trades at 8% Off MOVIE GALLERY: Asks Court to Hold FMS in Contempt of Court MOVIE GALLERY: FacilitySource Ordered to Release Funds MOVIE GALLERY: Has Final Approval for Cash Collateral Access MOVIE GALLERY: To Close Three Stores in Florida MYLAN INC: Moody's Upgrades Corporate Family Rating to 'Ba3' NEIMAN MARCUS: Bank Debt Trades at 9% Off in Secondary Market NIELSEN COMPANY: Bank Debt Trades at 6% Off in Secondary Market NICOLE ENERGY: Judge Hoffman Declines to Disqualify Himself NLP ACQUISITION: Section 341(a) Meeting Scheduled for April 19 NLP ACQUISITION: Taps Buckingham Doolittle as Bankruptcy Counsel NORTEL NETWORKS: ASM Capital Continues to Buy Claims NORTEL NETWORKS: Jefferies Okayed to Assume More Responsibilities NORTEL NETWORKS: Proposes LinkLaters as U.K. Counsel NPS PHARMACEUTICALS: Morgan Stanley Holds 4.8% of Common Stock NPS PHARMACEUTICALS: OrbiMed Holds 8.92% of Common Stock NPS PHARMACEUTICALS: Renaissance Tech Holds 5.65% of Common Stock NPS PHARMACEUTICALS: Visium Holds 9.04% of Common Stock OCCUPATIONAL & MEDICAL: Retractable Wins Permanent Injunction ORLEANS HOMEBUILDERS: Gets Interim OK to Obtain $11MM Financing OVB LLC: Files for Bankruptcy to Protection to Avert Foreclosure PHILADELPHIA NEWSPAPERS: Pleads for Chance to Probe Recordings PRIME GROUP: Board Approves Sale of Chicago Property PRIMUS TELECOM: Reports $16.4 Million Net Income in Q4 2009 RENAISSANCE RESIDENTIAL: Bookkeeper Defined as a Professional RENEW ENERGY: Creditors Oppose Chapter 7 Conversion REVLON CONSUMER: S&P Assigns 'B+' Rating on $800 Mil. Loan REVLON INC: Bank Debt Trades at 1% Off in Secondary Market RITE AID: Reports 3.2% Same Store Sales Decrease for February RITE AID: FMR, Fidelity Hold 8.842% of Common Stock RIVERBEND LEASING: Files Schedules of Assets & Liabilities RIVERBEND LEASING: Section 341(a) Meeting Scheduled for March 8 RIVERBEND LEASING: Taps Bradshaw Fowler as Gen. Reorg. Counsel SAFETY-KLEEN: CBS Rips Waste Co.'s Efforts to Elicit Cleanup Funds SID'S HARDWARE: Files for Bankruptcy Protection in Brooklyn SIX FLAGS: Commences Adv. Proceeding to Resolve Kentucky Dispute SIX FLAGS: Creditors Committee Opposes Two HSBC Claims SKY LAKES: S&P Affirms 'BB+' Long-Term & Underlying Rating on Debt SMART ONLINE: Extends Paragon Note Maturity Until August SPANSION INC: AHEC Wants Rule 2019 File for Trade Claims Group SPANSION INC: Objects to Expanded Work for FTI Consulting SPANSION INC: Tessera Wants to Compel Payment of $96MM Claim SPRINT NEXTEL: Fitch Affirms Issuer Default Rating at 'BB' SPRINT NEXTEL: S&P Downgrades Corporate Credit Rating to 'BB-' SPRINT NEXTEL: Sets Short-Term Incentive Compensation Plan SUN AMERICAN BANK: Closed; First-Citizens Assumes All Deposits TANDUS FLOORING: S&P Downgrades Corporate Credit Rating to 'B' TECK RESOURCES: Moody's Upgrades Corp. Family Rating to 'Ba1' TEXTRON INC: Fitch Affirms Issuer Default Rating at 'BB+' THORNBURG MORTGAGE: Orrick's Dempsey Tagged in Trustee's Suit THORNBURG MORTGAGE: Former Execs, Orrick Partner Face Fraud Suit TRIAD GUARANTY: Posts $79.1 Million Net Loss in Q4 2009 TRIBUNE CO: Bank Debt Trades at 38% Off in Secondary Market TRONOX INC: Pigments Units Had EUR120 Mil. in Sales in 2009 TRONOX INC: Wants Plan Exclusivity Until July 12 TRUMP ENTERTAINMENT: Wants $45MM Bridge Liquidity Funding OK'd TRW AUTOMOTIVE: Moody's Raises Corporate Family Rating to 'B2' UAL CORP: Decision to Outsource Raises Safety Issues UAL CORP: Disagrees With Fee Hikes at O'Hare Int'l Airport UAL CORP: To Sell Former Headquarters Facility UNITED AIR: Bank Debt Trades at 18% Off in Secondary Market VALMONT INDUSTRIES: Moody's Affirms 'Ba1' Corp. Family Rating VERILINK CORP: District Court Rejects Interlocutory Appeal VISTEON CORP: Bank Debt Trades at 110.25% in Secondary Market WATERFIELD BANK: Closed; New bank to Take Over Operations WESTERN REFINING: Bank Debt Trades at 9% Off in Secondary Market XIOM CORP: James Weber Replaces Andrew Mazzone from Board * Bank Failures This Year Reach 26 as 4 Fell March 5 * Democrats Unveil Bankruptcy-Law Reforms to Mixed Reaction * DLA Piper Snags Restructuring Attorneys in NYC, SF * Ropes & Gray Adds Weil Gotshal Bankruptcy Partner * BOND PRICING -- For the Week From Feb. 22 to 26, 2010 ********* ABITIBIBOWATER INC: Hearing on Wells Fargo Claims Again Adjourned ----------------------------------------------------------------- Pursuant to a stipulation with parties-in-interest, the Official Committee of Unsecured Creditors in AbitibiBowater Inc. asked the U.S. Bankruptcy Court on February 3, 2010, to extend the deadline within it may be authorized to commence and prosecute causes of action challenging, among other things, the extent and validity of Wells Fargo Bank National Association's and certain lenders' liens upon, and security interests in, the Debtors' assets. Wells Fargo is the successor-in-interest to Goldman Sachs Credit Partners L.P., in its capacity as administrative agent and collateral agent under a Credit and Guaranty Agreement dated April 1, 2008, as amended. Lenders under the Credit Agreement provided a $400,000,000 term loan and other accommodations for the benefit of the Debtors and its affiliates as borrowers. The Court issued an order on February 16, 2010, extending the Investigation Deadline through March 31, 2010. Pursuant to a further stipulation, the Debtors, the Creditors' Committee and Wells Fargo agreed that the hearing for a final judgment on the Motion "[will] be adjourned to the date and time the Court establishes for the hearing on the confirmation of a plan of reorganization." Any Party that seeks to schedule the Hearing Date in advance of the Plan Confirmation Hearing must provide a 30-day prior notice. Similarly, the Parties agreed to extend the deadline for parties- in-interest to object to the Investigation Deadline Extension Deadline "to the date and time the Court establishes for responses or objections to the plan confirmation." About AbitibiBowater Inc. Headquartered in Montreal, Canada, AbitibiBowater Inc. -- http://www.abitibibowater.com/-- produces a wide range of newsprint, commercial printing papers, market pulp and wood products. It is the eighth largest publicly traded pulp and paper manufacturer in the world. AbitibiBowater owns or operates 23 pulp and paper facilities and 28 wood products facilities located in the United States, Canada, the United Kingdom and South Korea. Marketing its products in more than 90 countries, the Company is also among the world's largest recyclers of old newspapers and magazines, and has third-party certified 100% of its managed woodlands to sustainable forest management standards. AbitibiBowater's shares trade over-the-counter on the Pink Sheets and on the OTC Bulletin Board under the stock symbol ABWTQ. The Company and several of its affiliates filed for protection under Chapter 11 of the U.S. Bankruptcy Code on April 16, 2009 (Bankr. D. Del. Lead Case No. 09-11296). Judge Kevin J. Carey presides over the case. The Company and its Canadian affiliates commenced parallel restructuring proceedings under the Companies' Creditors Arrangement Act before the Quebec Superior Court Commercial Division the next day. Alex F. Morrison at Ernst & Young, Inc., was appointed CCAA monitor. Paul, Weiss, Rifkind, Wharton & Garrison LLP, serves as the Debtors' U.S. bankruptcy counsel. Stikeman Elliot LLP, acts as the Debtors' CCAA counsel. Young, Conaway, Stargatt & Taylor, in Wilmington, Delaware, serves as the Debtors' co-counsel, while Troutman Sanders LLP in New York, serves as the Debtors' conflicts counsel in the Chapter 11 proceedings. The Debtors' financial advisors are Advisory Services LP, and their noticing and claims agent is Epiq Bankruptcy Solutions LLC. The CCAA Monitor's counsel is Thornton, Grout & Finnigan LLP, in Toronto, Ontario. Abitibi-Consolidated Inc. and various Canadian subsidiaries filed for protection under Chapter 15 of the U.S. Bankruptcy Code on April 17, 2009 (Bankr. D. Del. 09-11348). Judge Carey also handles the Chapter 15 case. Pauline K. Morgan, Esq., and Sean T. Greecher, Esq., at Young, Conaway, Stargatt & Taylor, in Wilmington, represent the Chapter 15 Debtors. As of Sept. 30, 2008, the Company had $9,937,000,000 in total assets and $8,783,000,000 in total debts. Bankruptcy Creditors' Service, Inc., publishes AbitibiBowater Bankruptcy News. The newsletter provides gavel-to-gavel coverage of the Chapter 11 proceedings and parallel proceedings under the Companies' Creditors Arrangement Act in Canada undertaken by Abitibibowater Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). ABITIBIBOWATER INC: Proposes to Sell Rhea Timberland Assets ----------------------------------------------------------- AbitibiBowater Inc. and its units seek the U.S. Bankruptcy Court's authority to enter into real property sale contracts to consummate the sale of 997 acres of timberland in Rhea County, Tennessee, owned by Debtor Bowater Inc. to Rachel M. Pruett for an aggregate of $1,096,700 or $1,100 per surveyed acre. The Debtors' seek to convey and transfer the Timberland Assets to the Purchaser subject to all existing easements and rights of way for public roads and highways, public utilities, railroads, pipelines and riparian rights, if any, extending into, through, over or across the Property, relates Sean T. Greecher, Esq., at Young Conaway Stargatt & Taylor, LLP, in Wilmington, Delaware. Mr. Greecher tells the Court that the Purchaser originally offered $800 per acre, but based on the Debtors' experience with similar sales, the Debtors were able to successfully negotiate a significantly higher sale price closer to $1,100 per acre. The Debtors did not receive any other bids for the Assets and believe that the $1,100 per acre offer is a fair, reasonable, and indeed, favorable purchase price, he relates. The Debtors aver that they did not appraise the Property due to (i) related expenses that they may incur in pursuing such appraisal, and (ii) a lack of comparable sales information. The Debtors' experience, however, places the value of the Assets in the $800 and $1,000 range given the availability of a viable buyer, according to Mr. Greecher. Mr. Greecher contends that the Debtors will realize "over $1 million from the Sale," which constitutes another step in the Debtors' continuing efforts to dispose of certain non-profitable and burdensome assets for which they have no use due to the reduced demand for timber. The Sale, Mr. Greecher says, is also part of an ongoing effort to monetize the Debtors' non-strategic timberland assets. The Timberland Assets are remote acreage in Tennessee lying on the top and sides of a steep ridge, with neither abundant usable timber nor an opportunity for timber management due to excessive slope, Mr. Greecher points out. The Assets, he adds, have no public utilities available and insignificant road frontage. The Assets' primary value to buyers lies in either its use for aesthetic purposes or its fitness for recreational use, the Debtors cite. Although the Sale will not relieve significant costs for the Debtors, it will provide the Debtors with some manner of property tax relief, according to Mr. Greecher. About AbitibiBowater Inc. Headquartered in Montreal, Canada, AbitibiBowater Inc. -- http://www.abitibibowater.com/-- produces a wide range of newsprint, commercial printing papers, market pulp and wood products. It is the eighth largest publicly traded pulp and paper manufacturer in the world. AbitibiBowater owns or operates 23 pulp and paper facilities and 28 wood products facilities located in the United States, Canada, the United Kingdom and South Korea. Marketing its products in more than 90 countries, the Company is also among the world's largest recyclers of old newspapers and magazines, and has third-party certified 100% of its managed woodlands to sustainable forest management standards. AbitibiBowater's shares trade over-the-counter on the Pink Sheets and on the OTC Bulletin Board under the stock symbol ABWTQ. The Company and several of its affiliates filed for protection under Chapter 11 of the U.S. Bankruptcy Code on April 16, 2009 (Bankr. D. Del. Lead Case No. 09-11296). Judge Kevin J. Carey presides over the case. The Company and its Canadian affiliates commenced parallel restructuring proceedings under the Companies' Creditors Arrangement Act before the Quebec Superior Court Commercial Division the next day. Alex F. Morrison at Ernst & Young, Inc., was appointed CCAA monitor. Paul, Weiss, Rifkind, Wharton & Garrison LLP, serves as the Debtors' U.S. bankruptcy counsel. Stikeman Elliot LLP, acts as the Debtors' CCAA counsel. Young, Conaway, Stargatt & Taylor, in Wilmington, Delaware, serves as the Debtors' co-counsel, while Troutman Sanders LLP in New York, serves as the Debtors' conflicts counsel in the Chapter 11 proceedings. The Debtors' financial advisors are Advisory Services LP, and their noticing and claims agent is Epiq Bankruptcy Solutions LLC. The CCAA Monitor's counsel is Thornton, Grout & Finnigan LLP, in Toronto, Ontario. Abitibi-Consolidated Inc. and various Canadian subsidiaries filed for protection under Chapter 15 of the U.S. Bankruptcy Code on April 17, 2009 (Bankr. D. Del. 09-11348). Judge Carey also handles the Chapter 15 case. Pauline K. Morgan, Esq., and Sean T. Greecher, Esq., at Young, Conaway, Stargatt & Taylor, in Wilmington, represent the Chapter 15 Debtors. As of Sept. 30, 2008, the Company had $9,937,000,000 in total assets and $8,783,000,000 in total debts. Bankruptcy Creditors' Service, Inc., publishes AbitibiBowater Bankruptcy News. The newsletter provides gavel-to-gavel coverage of the Chapter 11 proceedings and parallel proceedings under the Companies' Creditors Arrangement Act in Canada undertaken by Abitibibowater Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). ABITIBIBOWATER INC: Wants to Sell ARN Newsprint for $1.2MM ---------------------------------------------------------- In 1988, Parsons & Whittemore Alabama Newsprint Corp. and Parsons & Whittemore Incorporated or the "PW Partners;" and Abitibi-Price Alabama Corporation and Abitibi-Price Inc. or the "Abitibi Partners" created Alabama River Newsprint Company for the purpose of constructing and operating a 220,000-ton-per-year newsprint mill. The site at which the ARN Newsprint Mill was to be constructed adjoins the Alabama River and the pulp mill owned by Alabama River Pulp Company, Inc., or ARP and Alabama Pine Pulp Company or APP. The PW Partners owns ARP and APP. ARN built the Newsprint Mill pursuant to a funding and construction agreement with the Industrial Development Board of Monroe County, Alabama. In connection with construction of the Newsprint Mill, ARN entered into a "lease agreement" dated October 1, 1988, with the Development Board, in connection with the Board's issuance of bonds to finance industrial facilities for the benefit of ARN. The Board has record title to the real property described under the Lease Agreement. In October 2009, ARN assumed the Lease Agreement, relates Sean T. Greecher, Esq., at Young Conaway Stargatt & Taylor, LLP, in Wilmington, Delaware. In 2004, a disagreement arose between the PW Partners and Abitibi Partners, which caused the dissolution of the original partnership and separation of ARN and ARP's ownership of the Newsprint Mill. As a result, Abitibi-Consolidated Sales Corporation and its wholly owned subsidiary, Abitibi-Consolidated Alabama Corporation, became ARN's limited and general partners. The PW Partners remained the partners and owners of ARP and APP. In connection with the creation of the ARN and the construction of the Newsprint Mill, ARN and ARP entered into a Services Agreement set to terminate in 2018. Under the Services Agreement, ARP agreed that its Pulp Mill will provide raw materials and other services to the Newsprint Mill once the Mill became operational. As the demand for newsprint has decreased, however, the Services Agreement no longer reflects the Newsprint Mill's actual need for pulp and other services. In fact, the Newsprint Mill is currently idle, Mr. Greecher points out. Sale Agreement & Amended Services Agreement In an effort to maximize value of the Newsprint Mill for the benefit of the Debtors' estates, the Debtors and ARP have agreed to restructure their relationship and align it more closely with the Newsprint Mill's actual needs and the two mills' operating realities. Specifically, the parties: (a) have agreed to enter into Amendment No. 3 to the Services Agreement to: (i) reduce payments due to ARP from ARN to no more than $5,000 per month for so long as ARN has suspended papermaking operations at the Newsprint Mill; (ii) allow ARN to cancel the Amended Services Agreement upon 60 days' written notice to ARP; and (iii) allow the parties to assign the Services Agreement to a third party; and (b) have agreed that ARN will sell to ARP and APP, as buyers, certain of ARN's assets, free and clear of liens, claims, encumbrances, and other interests. Pursuant to the proposed sale of the ARN Assets: (a) ARN will use its best efforts to cause the Development Board (i) to release the Property from the Lease Agreement through an amendment of the Lease Agreement, and (ii) to effect the transfer to ARP of all of the Board's right, title and interest in and to portions of the Leased Property and certain equipment; (b) The Buyers agree to hold ARN harmless from any responsibility related to the disposal of process sludge generated as a result of the operation of the effluent treatment facilities and stored on ARN's manufacturing site; (c) The Buyers will also make one-time cash payment of $1,250,000 to ARN payable at the closing of the Sale; and (d) ARN will execute and deliver Amendment No. 3 of Services Agreement. Mr. Greecher contends that the Contemplated Transactions maximize value for the Debtors' estates. He notes that even in an idled state, ARN depends on ARP for certain services, but not at the rate and volume provided for under the Services Agreement. Conversely, he cites, ARP uses ARN's Equipment for its own operations as well as for servicing ARN's diminished operations, and has operations on the Conveyed Land. The Debtors tell the Court that they have considered alternatives to the proposed asset sale, including a rejection of the Services Agreement and a sale of the Equipment to another party. Rejecting the Services Agreement, however, leaves the Debtors without necessary services at the ARN site and accordingly, entry into new terms with ARP was inevitable, Mr. Greecher notes. Moreover, the Amended Services Agreement reduces the Debtors' costs for services, including the effluent treatment, by 75%, from $200,000 to $5,000 per month for so long as ARN has suspended paper-making operations at the ARN mill, Mr. Greecher points out. A hearing to consider the Debtors' request is set for March 22, 2010. Objections, if any, must be filed by March 15. About AbitibiBowater Inc. Headquartered in Montreal, Canada, AbitibiBowater Inc. -- http://www.abitibibowater.com/-- produces a wide range of newsprint, commercial printing papers, market pulp and wood products. It is the eighth largest publicly traded pulp and paper manufacturer in the world. AbitibiBowater owns or operates 23 pulp and paper facilities and 28 wood products facilities located in the United States, Canada, the United Kingdom and South Korea. Marketing its products in more than 90 countries, the Company is also among the world's largest recyclers of old newspapers and magazines, and has third-party certified 100% of its managed woodlands to sustainable forest management standards. AbitibiBowater's shares trade over-the-counter on the Pink Sheets and on the OTC Bulletin Board under the stock symbol ABWTQ. The Company and several of its affiliates filed for protection under Chapter 11 of the U.S. Bankruptcy Code on April 16, 2009 (Bankr. D. Del. Lead Case No. 09-11296). Judge Kevin J. Carey presides over the case. The Company and its Canadian affiliates commenced parallel restructuring proceedings under the Companies' Creditors Arrangement Act before the Quebec Superior Court Commercial Division the next day. Alex F. Morrison at Ernst & Young, Inc., was appointed CCAA monitor. Paul, Weiss, Rifkind, Wharton & Garrison LLP, serves as the Debtors' U.S. bankruptcy counsel. Stikeman Elliot LLP, acts as the Debtors' CCAA counsel. Young, Conaway, Stargatt & Taylor, in Wilmington, Delaware, serves as the Debtors' co-counsel, while Troutman Sanders LLP in New York, serves as the Debtors' conflicts counsel in the Chapter 11 proceedings. The Debtors' financial advisors are Advisory Services LP, and their noticing and claims agent is Epiq Bankruptcy Solutions LLC. The CCAA Monitor's counsel is Thornton, Grout & Finnigan LLP, in Toronto, Ontario. Abitibi-Consolidated Inc. and various Canadian subsidiaries filed for protection under Chapter 15 of the U.S. Bankruptcy Code on April 17, 2009 (Bankr. D. Del. 09-11348). Judge Carey also handles the Chapter 15 case. Pauline K. Morgan, Esq., and Sean T. Greecher, Esq., at Young, Conaway, Stargatt & Taylor, in Wilmington, represent the Chapter 15 Debtors. As of Sept. 30, 2008, the Company had $9,937,000,000 in total assets and $8,783,000,000 in total debts. Bankruptcy Creditors' Service, Inc., publishes AbitibiBowater Bankruptcy News. The newsletter provides gavel-to-gavel coverage of the Chapter 11 proceedings and parallel proceedings under the Companies' Creditors Arrangement Act in Canada undertaken by Abitibibowater Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). ADELPHIA COMMS: Fraud Transfer Suit Against Citi Still Pending -------------------------------------------------------------- In 2003, the statutory committees of unsecured creditors and equity holders in Adelphia Communications Inc.'s cases commenced adversary proceedings, on behalf of the Debtor, against Citigroup affiliates and subsidiaries as well as other lenders and investment banks asserting violations of the Bank Holding Company Act, the Bankruptcy Code, and common law. The complaints sought unspecified damages and recovery of certain purportedly fraudulent transfers. Following litigation of motions to dismiss, the Adelphia Recovery Trust, which replaced the committees as plaintiffs in the actions, filed a consolidated amended complaint on behalf of the Adelphia Estate. The district court granted in part and denied in part the defendants' motions to dismiss the consolidated complaint. Citigroup Inc. said in its annual report on Form 10-K that ART's appeal to the Second Circuit from that partial dismissal is pending. Before the district court, the parties are briefing summary judgment. Trial of any claims that survive is scheduled for September 2010. About Adelphia Communications Based in Coudersport, Pennsylvania, Adelphia Communications Corporation (OTC: ADELQ) -- http://www.adelphia.com/-- was a cable television company. Adelphia served customers in 30 states and Puerto Rico, and offers analog and digital video services, Internet access and other advanced services over its broadband networks. The company and its more than 200 affiliates filed for Chapter 11 protection in the Southern District of New York on June 25, 2002. Those cases are jointly administered under case number 02-41729. Willkie Farr & Gallagher represented the Debtors in their restructuring effort. PricewaterhouseCoopers served as the Debtors' financial advisor. Kasowitz, Benson, Torres & Friedman, LLP, and Klee, Tuchin, Bogdanoff & Stern LLP represented the Official Committee of Unsecured Creditors. Adelphia Cablevision Associates of Radnor, L.P., and 20 of its affiliates, collectively known as Rigas Managed Entities, are entities that were previously held or controlled by members of the Rigas family. In March 2006, the rights and titles to these entities were transferred to certain subsidiaries of Adelphia Cablevision LLC. The RME Debtors filed for Chapter 11 protection on March 31, 2006 (Bankr. S.D.N.Y. Case Nos. 06-10622 through 06-10642). Their cases were jointly administered under Adelphia Communications and its debtor-affiliates' Chapter 11 cases. The Bankruptcy Court confirmed the Debtors' Joint Chapter 11 Plan of Reorganization on Jan. 5, 2007. That plan became effective on Feb. 13, 2007. ADRIAN THEODORE: Files Schedules of Assets & Liabilities -------------------------------------------------------- Adrian Theodore Johnson, Jr., and Kathryn Marie Johnson have filed with the U.S. Bankruptcy Court for the District of Minnesota their schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ------ ----------- A. Real Property $7,307,471 B. Personal Property $3,251,308 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $7,554,918 E. Creditors Holding Unsecured Priority Claims $75,304 F. Creditors Holding Unsecured Non-priority Claims $16,753,880 ------------- ------------- TOTAL $10,558,779 $24,384,103 Wayzata, Minnesota-based Adrian Theodore Johnson, Jr., and Kathryn Marie Johnson filed for Chapter 11 bankruptcy protection on February 11, 2010 (Bankr. D. Minn. Case No. 10-40957). Steven H. Silton, Esq., at Hinshaw & Culbertson LLP, assists the Company in its restructuring effort. The Company listed $1,000,001 to $10,000,000 in assets and $10,000,001 to $50,000,000 in assets. ADRIAN THEODORE: Gets OK to Hire H&C as Bankruptcy Counsel ---------------------------------------------------------- Adrian T. Johnson and Kathryn M. Johnson sought and obtained authorization from the U.S. Bankruptcy Court for the District of Minnesota to employ Steven H. Silton and the law firm of Hinshaw & Culbertson LLP as bankruptcy counsel. Steven H. Silton, a partner at H&C, will assist the Debtors in carrying out their duties under Title 11 of the U.S. Code, and to perform other legal services necessary to the Debtors. The Debtors proposed that the employment be on a general retainer with fees calculated on a reasonable fee basis, dependent primarily on the number of hours expended, but taking into consideration any risk that there may not be funds available to pay fees, any delay in making payments of fees, and other factors as may be appropriate, subject to the approval of the Court. The Debtors requested that fee applications for professionals employed by the Debtors be heard on intervals of 90 days. The Debtors requested that the professionals employed by the Debtors be permitted to submit invoices to the Debtors on a monthly basis, and that the Debtors be authorized to pay 80% of fees and 100% of costs owing pursuant to the monthly invoices. Mr. Silton assured the Court that the firm is "disinterested" as that term is defined in Section 101(14) of the Bankruptcy Code. Wayzata, Minnesota-based Adrian Theodore Johnson, Jr., and Kathryn Marie Johnson filed for Chapter 11 bankruptcy protection on February 11, 2010 (Bankr. D. Minn. Case No. 10-40957). The Company listed $1,000,001 to $10,000,000 in assets and $10,000,001 to $50,000,000 in assets. ADRIAN THEODORE: Section 341(a) Meeting Scheduled for March 25 -------------------------------------------------------------- The U.S. Trustee for Region 12 will convene a meeting of creditors in Adrian Theodore Johnson Jr. and Kathryn Marie Johnson's Chapter 11 case on March 25, 2010, at 10:00 a.m. The meeting will be held at U.S. Courthouse, Room 1017, 300 S 4th Street, Minneapolis, MN 55415. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Wayzata, Minnesota-based Adrian Theodore Johnson, Jr., and Kathryn Marie Johnson filed for Chapter 11 bankruptcy protection on February 11, 2010 (Bankr. D. Minn. Case No. 10-40957). Steven H. Silton, Esq., at Hinshaw & Culbertson LLP, assists the Company in its restructuring effort. The Company listed $1,000,001 to $10,000,000 in assets and $10,000,001 to $50,000,000 in assets. AFFINITY GROUP: Inks Amended Credit Deals with Two Banks -------------------------------------------------------- Affinity Group Inc. entered into a second amended and restated credit agreement to refinance its existing senior credit facility ($128.9 million aggregate principal amount outstanding) which was scheduled to mature on March 31, 2010, and second lien notes totaling $9.7 million due July 31, 2010. The AGI New Senior Credit Agreement provides for term loans aggregating $144.3 million, including an original issue discount of 2%, that are payable in quarterly installments of $360,750 beginning March 1, 2011. In addition, there are mandatory prepayments of the term loans from excess cash flow of AGI and from asset sales. The term loans under the AGI New Senior Credit Agreement mature on the earlier of March 1, 2015, or 90 days prior to the maturity of either AGI's 9% senior subordinated notes due 2012 or AGHI's 10-7/8% senior notes due 2012. Interest on the term loans under the AGI New Senior Credit Agreement floats at either 8.75% over the base rate for borrowings whose interest is based on the prime rate or 10.0% over the LIBOR rate for borrowings whose interest is based on LIBOR. The AGI New Senior Credit Agreement contains affirmative covenants, including financial covenants, and negative covenants, including a restriction on dividends or distributions by AGI to AGHI. Borrowings under the AGI New Senior Credit Agreement are guaranteed by the direct and indirect subsidiaries of AGI and are secured by liens on the assets of AGI and its direct and indirect subsidiaries. As a condition to the term loans under the AGI New Senior Credit Agreement, AGHI acquired the $25.4 million of AGHI Notes due on March 15, 2010, that were held by an affiliate of AGHI and cancelled those notes. A full-text copy of the Second Amended and Restated Credit Agreement with Wilmington Trust FSB is available for free at http://ResearchArchives.com/t/s?56fd CWI Credit Facility In addition, on March 1, 2010, AGI's wholly-owned subsidiary, Camping World, Inc., an indirect subsidiary, CWI, Inc., as co- borrowers, and Camping World's subsidiaries entered into a credit agreement providing for an asset based lending facility of up to $22 million, of which $10 million is available for letters of credit and $12 million is available for revolving loans. The CW Credit Facility matures on the earlier of March 1, 2013, 60 days prior to the date of maturity of the AGI New Senior Credit Agreement, or 120 days prior to the earlier date of maturity of the AGI Notes and the AGH Notes. Interest under the revolving loans under the CW Credit Facility floats at either 3.25% over the base rate for borrowings whose interest is based on the prime rate or 3.25% over the LIBOR rate for borrowings whose interest is based on LIBOR. Borrowings under the CW Credit Facility are based on the borrowing base of eligible inventory and accounts receivable of Camping World and its subsidiaries. The CW Credit Facility contains affirmative covenants, including financial covenants, and negative covenants. Borrowings under the Camping World Credit Agreement are guaranteed by the direct and indirect subsidiaries of Camping World and are secured by a pledge on the stock of Camping World and its direct and indirect subsidiaries and liens on the assets of Camping World and its direct and indirect subsidiaries. The lenders under the AGI New Senior Credit Agreement and the CW Credit Facility have entered into an intercreditor agreement that governs their rights in the collateral that is pledged to secure their respective loans. A full-text copy of the Credit Agreement with SunTrust Bank, as the Issuing Bank, and SunTrust Bank, as the Administrative Agent, is available for free at http://ResearchArchives.com/t/s?56fe About Affinity Group Affinity Group Holding, Inc., is a large member-based direct marketing company, targeting North American recreational vehicle owners and outdoor enthusiasts. The company reported net revenue of $506 million for the LTM period ended March 31, 2009. At September 30, 2009, the Company had $230,111,000 in total assets against $560,760,000 in total liabilities, resulting in $330,649,000 in stockholders' deficit. The September 30 balance sheet showed strained liquidity: The Company had $117,673,000 in total current assets against $291,986,000 in total current liabilities. Affinity Group carries a 'Caa1' long term corporate family rating from Moody's and a 'CCC' issuer credit rating from Standard & Poor's. AIRTRAN HOLDINGS: Earns $134.7 Million in 2009 ---------------------------------------------- AirTran Holdings, Inc., filed its annual report on Form 10-K, showing net income of $134.7 million on $2.3 billion of revenue for 2009, compared to a net loss of $266.3 million on $2.6 billion of revenue for 2008. The Company's balance sheet as of Dec. 31, 2009, showed $2.3 billion in assets, $726.5 million of debts, and $501.9 million in stockholders' equity. Currently, the Company's public debt is rated below-investment grade. This may adversely affect the Company's borrowing costs or ability to borrow. A full-text copy of the annual report is available for free at: http://researcharchives.com/t/s?53dc About AirTran Holdings Headquartered in Orlando Florida, AirTran Holdings Inc. (NYSE: AAI) -- http://www.airtran.com/-- through its wholly owned subsidiary, AirTran Airways, Inc., operates scheduled airline service throughout the United States and to selected international locations. As of February 1, 2010, the Company operated 86 Boeing B717-200 aircraft and 52 Boeing B737-700 aircraft offering approximately 700 scheduled flights per day to 63 locations in the United States, including San Juan, Puerto Rico, and to Orangestad, Aruba, Cancun, Mexico, and Nassau, The Bahamas. * * * As reported by the Troubled Company Reporter on December 28, 2009, Moody's Investors Service raised its ratings of AirTran Holdings' corporate family and probability of default ratings each to Caa1 from Caa2. The 'Caa1' corporate family rating considers the still high leverage and AirTran's exposure to cyclical risks in the airline industry. The airline's carries a corporate credit rating of CCC+/Stable/-- from Standard & Poor's. AMERICAN AXLE: Posts $253.3 Million Net Loss in 2009 ---------------------------------------------------- American Axle & Manufacturing Holdings, Inc., filed its annual report on Form 10-K, showing a net loss of $253.3 million on $1.521 billion of revenue for 2009, compared with a net loss of $1.224 billion on $2.109 billion of revenue for 2008. The Company's balance sheet as of Dec. 31, 2009, showed $1.987 billion in assets and $2.547 billion of debts, for a $559.9 million stockholders' deficit. The Company's current credit ratings are: Corporate Family Secured Senior Unsecured Senior Rating Notes Rating Notes Rating ---------------- -------------- ---------------- S & P B- B CCC Moody's Caa2 B2 Caa3 Fitch B- B+ CC A full-text copy of the annual report is available for free at: http://researcharchives.com/t/s?5732 Headquartered in Detroit, Michigan, American Axle & Manufacturing Holdings Inc. (NYSE: AXL) -- http://www.aam.com/-- is a Tier I supplier to the automotive industry. American Axle manufactures, engineers, designs and validates driveline and drivetrain systems and related components and chassis modules for light trucks, sport utility vehicles, passenger cars, crossover vehicles and commercial vehicles. American Axle is the principal supplier of driveline components to General Motors for its rear-wheel drive light trucks and SUVs manufactured in North America, supplying substantially all of GM's rear axle and front four-wheel drive and all-wheel drive (4WD/AWD) axle requirements for these vehicle platforms. Sales to GM were roughly 78% of the Company's total net sales in 2009, 74% in 2008 and 78% in 2007. In addition to locations in the United States (Michigan, New York, Ohio and Indiana and Pennsylvania), the Company also has offices or facilities in Brazil, China, Germany, India, Japan, Luxembourg, Mexico, Poland, Scotand, South Korea and Thailand. AMERICAN GENERAL: WFI and AIG Bank Settle Civil Lawsuit with DOJ ---------------------------------------------------------------- American General Finance Corporation discloses that on March 4, 2010, its wholly owned subsidiary Wilmington Finance, Inc. and AIG Federal Savings Bank, a non-subsidiary affiliate of AGFC, settled a civil lawsuit brought by the United States Department of Justice for alleged violations of the Fair Housing Act and the Equal Credit Opportunity Act. The DOJ has alleged that WFI and AIG Bank allowed independent wholesale mortgage loan brokers to charge certain minority borrowers higher broker fees than were charged to certain other borrowers between 2003 and 2006. Wilmington Finance and AIG Bank deny any legal violation, and maintain that at all times they conducted their lending and other activities in compliance with fair-lending and other laws. As part of the settlement, Wilmington Finance and AIG Bank agreed to provide $6.1 million for borrower remediation. Upon completion of the remediation, all remaining funds will be distributed for consumer education purposes. In the event that the remaining funds do not total at least $1 million, AIG Bank and Wilmington Finance have agreed to replenish the fund up to $1 million for distribution for educational purposes. In addition, AIG Bank and Wilmington Finance will incur certain costs associated with administering the settlement. Wilminton Finance ceased wholesale mortgage lending originations in 2008. About AGFC Evansville, Ind.-based American General Finance Corporation is a financial services holding company with subsidiaries engaged in the consumer finance and credit insurance businesses. At December 31, 2009, the Company had 1,178 branch offices in 39 states, Puerto Rico and the U.S. Virgin Islands; foreign operations in the United Kingdom; and approximately 6,500 employees. AGFC is a wholly owned subsidiary of American General Finance, Inc. Effective June 29, 2007, AGFI became a direct wholly owned subsidiary of AIG Capital Corporation, a direct wholly owned subsidiary of American International Group, Inc. The Company's balance sheet as of Dec. 31, 2009, showed $22.6 billion in assets, $20.2 billion of debts, and $2.4 billion of stockholders' equity. * * * American General Finance Corporation filed its annual report on Form 10-K on March 5, 2010. PricewaterhouseCoopers LLP, the Company's independent auditors reported that the Company is dependent upon the continued financial support of its ultimate parent company, American International Group, Inc., to meet its financial obligations as they become due and to support its ongoing operations. AMERICAN GENERAL: Posts $473.9 Million Net Loss in 2009 ------------------------------------------------------- American General Finance Corporation filed its annual report on Form 10-K, showing a net loss of $473.9 million on $2.2 billion of revenue for 2009, compared with a net loss of $1.3 billion on $2.7 billion of revenue for 2008. The Company's balance sheet as of Dec. 31, 2009, showed $22.6 billion in assets, $20.2 billion of debts, and $2.4 billion of stockholders' equity. PricewaterhouseCoopers LLP, in Chicago, Illinois, said that the Company is dependent upon the continued financial support of its ultimate parent company, American International Group, Inc., to meet its financial obligations as they become due and to support its ongoing operations. The Company says that due to a combination of the challenges facing AIG, its dependency on AIG, its liquidity concerns, its results of operations, downgrades of its credit ratings by the rating agencies, and the turmoil in the capital markets, the Company currently has no access to the unsecured debt market, and the maximum amount of its credit facilities has been drawn. A full-text copy of the annual report is available for free at: http://researcharchives.com/t/s?573a About AGFC Evansville, Ind.-based American General Finance Corporation is a financial services holding company with subsidiaries engaged in the consumer finance and credit insurance businesses. At December 31, 2009, the Company had 1,178 branch offices in 39 states, Puerto Rico and the U.S. Virgin Islands; foreign operations in the United Kingdom; and approximately 6,500 employees. AGFC is a wholly owned subsidiary of American General Finance, Inc. Effective June 29, 2007, AGFI became a direct wholly owned subsidiary of AIG Capital Corporation, a direct wholly owned subsidiary of American International Group, Inc. AMERICAN HOMEPATIENT: Reports $13.1 Million Net Loss in 2009 ------------------------------------------------------------ American HomePatient, Inc., disclosed Thursday its financial results for the fourth quarter and year ended December 31, 2009. Net loss for the fourth quarter of 2009 was $1.2 million, or $0.07 per diluted share, compared to net income of $1.5 million, or $0.09 per diluted share, for the fourth quarter of 2008. Net loss for the year ended December 31, 2009, was $13.1 million, or $0.75 per diluted share, compared to net income of $514,000, or $0.03 per diluted share for the same period in 2008. Revenues for the fourth quarter of 2009 were $61.3 million compared to $67.8 million for the fourth quarter of 2008, representing a decrease of $6.5 million, or 9.6%. Revenues for the year ended December 31, 2009, were $236.3 million compared to $266.9 million for the same period in 2008, representing a decrease of $30.6 million, or 11.5%. Medicare reimbursement reductions effective January 1, 2009, reduced revenues by approximately $6.5 million in the fourth quarter of 2009 and $27.4 million for the year ended December 31, 2009. Further reductions in revenues in 2009 resulted from the impact of Medicare policy changes related to coverage guidelines for positive airway pressure devices, a change in inhalation drug product mix resulting from Medicare reimbursement reductions, and the Company's reduced emphasis on less profitable product lines such as non-respiratory durable medical equipment and infusion therapy. These revenue decreases were partially offset by growth in sleep therapy revenue. Operating expenses declined in the fourth quarter of 2009 compared to the fourth quarter of 2008 by approximately $1.6 million, or 4.9%. Operating expenses for the year ended December 31, 2009, compared to the same period in 2008 declined by $8.0 million, or 6.0%. The decreases in operating expenses for the fourth quarter and year ended December 31, 2009, were primarily the result of improved operating efficiencies and the resulting reduced operating costs, partially offset by increases in certain expenses associated with the development and implementation of initiatives designed to provide additional productivity improvements. Areas of focus have included centralization of branch functions, consolidation of branches, improved routing and delivery systems, and more effective utilization of leased space. Adjusted EBITDA was $9.4 million, or 15.3% of net revenue, for the fourth quarter of 2009 compared to $14.2 million, or 20.9% of net revenue, for the same period of 2008. Adjusted EBITDA was $32.7 million, or 13.8% of net revenue, for the year ended December 31, 2009, compared to $51.6 million, or 19.3% of net revenue, for the same period of 2008. Medicare reimbursement cuts effective January 1, 2009, reduced adjusted EBITDA and net income in the fourth quarter and twelve months of 2009 by approximately $6.5 million and $27.4 million, respectively. Adjusted EBITDA and net income were further reduced in 2009 as a result of the impact of Medicare policy changes related to coverage guidelines for positive airway pressure devices and a change in inhalation drug product mix resulting from Medicare reimbursement reductions. These items were partially offset by reduced operating expenses resulting from improved operating efficiencies, reduced bad debt expense resulting from improved revenue qualification and collection processes, and growth in sleep therapy revenues. Secured Debt Maturity The Company has secured debt of $226.4 million that was due to be repaid on August 1, 2009. As previously disclosed, a series of forbearance agreements have been entered into by and among the Company, the agent for the secured debt, and certain forbearance holders. The parties to the forbearance agreement have agreed to not exercise, prior to the expiration of the term of the agreement, any of the rights or remedies available to them as a result of the Company's failure to repay the secured debt on the maturity date. The current forbearance agreement expires March 16, 2010. Since the maturity date, the Company has continued to pay interest on a monthly basis in an amount consistent with the original terms of the secured debt. The Company, the agent, and the forbearance holders continue to work toward a resolution of the debt maturity issue. However, there can be no assurance a resolution will be reached with favorable terms to the Company and its stockholders or at all. Balance Sheet The Company's balance sheet as of Dec. 31, 2009, showed $239.3 million in assets and $276.3 million of debts, for a stockholders' deficit of $37.0 million. The Company also reported $66.0 million in current assets and $264.2 million of current liabilities, for a net working capital deficiency of $198.1 million. Going Concern Doubt KPMG LLP, in Nashville, Tennessee, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that of the Company's net capital deficiency and net working capital deficiency resulting from $226.4 million of debt that matured on August 1, 2009. A full-text copy of the press release is available for free at: http://researcharchives.com/t/s?5737 A full-text copy of the annual report is available for free at: http://researcharchives.com/t/s?5736 About American HomePatient Brentwood, Tenn.-based American HomePatient, Inc. (OTC BB: AHOM) is one of the nation's largest home health care providers with operations in 33 states. Its product and service offerings include respiratory services, infusion therapy, parenteral and enteral nutrition, and medical equipment for patients in their home. American HomePatient, Inc.'s common stock is currently traded in the over-the-counter market or, on application by broker-dealers, in the NASD's Electronic Bulletin Board under the symbol AHOM or AHOM.OB. AMERICAN INT'L: Units Settle Mortgage Discrimination Case --------------------------------------------------------- ABI reports that the Department of Justice said yesterday that two AIG units settled federal charges that they discriminated against African American home buyers on fees for mortgages and will pay $7.1 million for restitution and education efforts. Based in New York, American International Group, Inc., is the leading international insurance organization with operation in more than 130 countries and jurisdictions. AIG companies serve commercial, institutional and individual customers through the most extensive worldwide property-casualty and life insurance networks of any insurer. In addition, AIG companies are leading providers of retirement services, financial services and asset management around the world. AIG's common stock is listed on the New York Stock Exchange, as well as the stock exchanges in Ireland and Tokyo. In September 2008, AIG experienced a liquidity crunch when its credit ratings were downgraded below "AA" levels by Standard & Poor's, Moody's Investors Service and Fitch Ratings. On September 16, 2008, the Federal Reserve Bank created an $85 billion credit facility to enable AIG to meet increased collateral obligations consequent to the ratings downgrade, in exchange for the issuance of a stock warrant to the Fed for 79.9% of the equity of AIG. The credit facility was eventually increased to as much as $182.5 billion. AIG has sold a number of its subsidiaries and other assets to pay down loans received from the U.S. government, and continues to seek buyers of its assets. AMERIGROW RECYCLING: Files Proposed Plan of Reorganization ---------------------------------------------------------- Amerigrow Recycling-Delray, Limited Partnership, et al., filed with the U.S. Bankruptcy Court for the Southern District of Florida a Disclosure Statement explaining their proposed Plan of Reorganization. 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 all assets of the estates to be transferred to and vested in the respective Reorganized Debtor under the sole control of the respective Reorganized Debtor, free and clear of all liens, claims, encumbrances and interests of any kind except as provided under the Plan. The distributions required under the Plan will be funded by the Debtors' cash on hand as of the effective date and the Reorganized Debtors' business operations. In addition, the Debtors will be authorized to commence or continue litigation on behalf of the estate to recover, inter alia, voidable transfers and other claims, if any. Secured creditors are expected to receive full recovery on account of their claims. The Plan did not provide for the estimated percentage recovery by holders of unsecured claims. The Debtors do not expect there would be funds for distributions available for interest holders. Interests in Reorganized Amerigrow Corp. will be issued to Janet Tomlinson (50%) and Silvia Kearney (50%). A full-text copy of the Disclosure Statement is available for free at http://bankrupt.com/misc/AMERIGROWRECYCLING_DS.pdf About Amerigrow Recycling Delray Beach, Florida-based Amerigrow Recycling-Delray, Limited Partnership -- dba Amerigriow Recycling, Amerigrow Soils, Amerigrow Golf, Amerigrow Trucking, Mulching Solutions -- was founded in 1995, and operates as a full-service organic-recycling facility, accepting organic landscape debris at its convenient drive-thru Delray Beach store and dumping facility. Amerigrow Recycling and its affiliates filed for Chapter 11 on November 2, 2009 (Bankr. S.D. Fla. Case No. 09-34122). The Company listed $10,000,001 to $50,000,000 in assets and debts. ARENA MEDIA: Files Schedules of Assets & Liabilities ---------------------------------------------------- Arena Media Networks LLC has filed with the U.S. Bankruptcy Court for the Southern District of New York its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ------ ----------- A. Real Property $0 B. Personal Property $5,016,908 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $17,000,422 E. Creditors Holding Unsecured Priority Claims $50,535 F. Creditors Holding Unsecured Non-priority Claims $5,727,773 ------------- ------------ TOTAL $5,016,908 $22,778,730 New York-based Arena Media Networks LLC provides video networks at concessions stands at 52 sports venues. The petition says assets are less than $10 million while debt exceeds $10 million. The Company filed for Chapter 11 bankruptcy protection on February 8, 2010 (Bankr. S.D.N.Y. Case No. 10-10667). Ian R. Winters, Esq., and Joseph Corneau, Esq., at Klestadt & Winters, LLP, assist the Company in its restructuring effort. The Company estimated its assets at $1,000,001 to $10,000,000 and liabilities at $10,000,001 to $50,000,000. ARENA MEDIA: Taps Klestadt & Winters as Bankruptcy Counsel ---------------------------------------------------------- Arena Media Networks, LLC, has sought permission from the U.S. Bankruptcy Court for the Southern District of New York to employ Klestadt & Winters, LLP, as bankruptcy counsel, nunc pro tunc to the Petition Date. K&W will, among other things: (a) perform appropriate services as the Debtor's counsel, including, without limitation, advising the Debtor, representing the Debtor, and preparing necessary documents on behalf of the Debtor; (b) take necessary actions to protect and preserve the Debtor's estate during the Case, including the prosecution of actions by the Debtor, the defense of any actions commenced against the Debtor in the context of the case, negotiations concerning all litigation in which the Debtor is involved, and objecting to claims filed against the estate; (c) prepare necessary motions, applications, answers, orders, reports, and papers in connection with the administration of the Debtor's bankruptcy case; and (d) provide counsel to the Debtor with regard to its rights and obligations as debtor in possession. Ian R. Winters, a partner at K&W, says that the firm will be paid based on the hourly rates of its personnel: Ian R. Winters $475 Partners $575-$395 Of Counsel $475-$575 Associates $195-$360 Paralegals $150 Mr. Winters assures the Court that K&W is "disinterested" as that term is defined in Section 101(14) of the Bankruptcy Code. New York-based Arena Media Networks LLC provides video networks at concessions stands at 52 sports venues. The petition says assets are less than $10 million while debt exceeds $10 million. The Company filed for Chapter 11 bankruptcy protection on February 8, 2010 (Bankr. S.D.N.Y. Case No. 10-10667). The Company estimated its assets at $1,000,001 to $10,000,000 and liabilities at $10,000,001 to $50,000,000. ARENA MEDIA: Proposes to Hold Access 360-Led Auction ---------------------------------------------------- Arena Media Networks, LLC, has sought approval from the U.S. Bankruptcy Court for the Southern District of New York for a process of selling its assets, free and clear of liens, claims and encumbrances. The Debtor has signed a contract with Access 360 Media, Inc., as purchaser. Absent higher and better offers, Access 360 will purchase the assets at a purchase price equal to: (i) the value of Access' DIP claim; (ii) the assumption of liabilities, including the payment of designated cure costs; (iii) $100,000 for remaining creditors; and (iv) a maximum of $50,000, plus access to the Purchaser's back office resources and administrative services, to wind up the estate. The Purchaser will assume and the designated contract liability and diversified media liability up to $565,293, and will perform in accordance with their terms, the designated contracts including the designated cure costs. The proposed sale would result in the satisfaction of the entire DIP Loan up to $800,000, plus the lender's interest, fees and expenses. The Debtor has also proposed a March 18, 2010 auction if other parties are interested in the assets. Entities that want to make a bid for the assets must (i) present an offer that will be on substantially the same terms and conditions as the Asset Purchase Agreement with the Purchaser, except for price; (ii) pay the purchase price to the Debtor of not less than $7 million, and; (ii) make an earnest money deposit of 10% of the competing offer in the form of a certified or cashier's check made payable to Klestadt & Winters, LLP Escrow Management Account. The deadline for competing offers is March 16, 2010. Any further bids made at the auction will be in increments of at least $150,000 greater than the preceding bid. Debtor will pay Purchaser a break-up fee of 3.0% of the Purchase Price inclusive of costs of assumption of debt currently estimated at $5.2 million and the Purchase DIP Claim, with a floor of no less than $180,000, plus reimbursement of Purchaser's expenses, including attorneys, investment banking, accountant and other professional fees and expense incurred in pursuit of its bid and preparation of the Asset Purchase Agreement and related documents. The break-up fee and reimbursement expense will constitute a first priority administrative expense of the Debtor and will be paid within two days of any closing in connection with the acquired assets and without further order or application to the Bankruptcy Court. The Debtor has asked for a March 22, 2010 hearing for the Court to consider approval of the sale transaction. A copy of the bidding procedures is available for free at: http://bankrupt.com/misc/ARENA_MEDIA_biddingprocedures.pdf A copy of the Asset Purchase Agreement is available for free at: http://bankrupt.com/misc/ARENA_MEDIA_assetpurchasepact.pdf New York-based Arena Media Networks LLC provides video networks at concessions stands at 52 sports venues. The petition says assets are less than $10 million while debt exceeds $10 million. The Company filed for Chapter 11 bankruptcy protection on February 8, 2010 (Bankr. S.D.N.Y. Case No. 10-10667). Ian R. Winters, Esq., and Joseph Corneau, Esq., at Klestadt & Winters, LLP, assist the Company in its restructuring effort. The Company estimated its assets at $1,000,001 to $10,000,000 and liabilities at $10,000,001 to $50,000,000. ARENA MEDIA: Gets Interim Okay to Obtain Postpetition Financing --------------------------------------------------------------- Arena Media Networks, LLC, sought and obtained interim authorization from the U.S. Bankruptcy Court for the Southern District of New York to obtain postpetition secured financing from Access 360 Media Networks, Inc. The DIP lender has committed to provide up to $800,000. Upon the entry of the interim order, the Debtor will be authorized to obtain equal to $280,000 in financing. Ian R. Winters, Esq., at Klestadt & Winters, LLP, the attorney for the Debtor, explains that the Debtor needs the money to fund its Chapter 11 case, pay suppliers and other parties. The DIP facility will mature on March 31, 2010. The interest rate applicable to the DIP Loan will be equal to the prime rate published in the Wall Street Journal as of the date of the DIP Agreement plus 175 basis points, calculated on a 360 day year for the actual days elapsed. A copy of the DIP financing agreement is available for free at: http://bankrupt.com/misc/ARENA_MEDIA_dipfinancingpact.pdf New York-based Arena Media Networks LLC provides video networks at concessions stands at 52 sports venues. The petition says assets are less than $10 million while debt exceeds $10 million. The Company filed for Chapter 11 bankruptcy protection on February 8, 2010 (Bankr. S.D.N.Y. Case No. 10-10667). Ian R. Winters, Esq., and Joseph Corneau, Esq., at Klestadt & Winters, LLP, assist the Company in its restructuring effort. The Company estimated its assets at $1,000,001 to $10,000,000 and liabilities at $10,000,001 to $50,000,000. ARTHUR GROOM: Asks for Court OK to Obtain DIP Financing ------------------------------------------------------- Arthur Groom & Company, Inc., has sought permission from the U.S. Bankruptcy Court for the District of New Jersey to obtain credit or incur debt secured by a lien on property of the estate that isn't otherwise subject to a lien, through a consignment arrangement. John P. Di Iorio, Esq., at Shapiro & Croland, the attorney for the Debtor, says that through a consignment arrangement, the Debtor seeks to augment its inventory and thereby increase its revenue to enhance its reorganization prospects. The vendors who will supply the Debtor with inventory on consignment seek to obtain a first priority lien on the consigned inventory and the proceeds thereof. The Debtor obtained goods on consignment from vendors, including: -- RDI Trading; -- B.A. Gold; -- United Pearl; -- Stuller; -- Suna Brothers -- Gem Wave; -- Simon Ardem; -- Byard & Brogan; -- Coast Diamond; -- Varner; -- Saturn; -- KimMarie Designs; -- Quality Designs; -- Edgar Neira; -- Memoire; -- David Buyers; and -- Herco. The Debtor will hold the inventory for sale on consignment. The Vendors will have a first priority perfected, purchase-money security interest and lien in the specific inventory each of the vendors supplies to the Debtor and the proceeds thereof. The Debtor will account to each of the Vendors and remit the proceeds of sale from any consigned inventory to each of the Vendors by the 31th day of the month following the sale of consigned inventory. A copy of the consignment agreement is available for free at: http://bankrupt.com/misc/ARTHUR_GROOM_consignmentagreement.pdf Arthur Groom & Company, Inc., operates a retail jewelry store in Ridgewood, New Jersey. The Company filed for Chapter 11 bankruptcy protection on February 3, 2010 (Bankr. D. N.J. Case No. 10-13221). The Company listed $1,000,001 to $10,000,000 in assets and $10,000,001 to $50,000,000 in liabilities. ARTHUR GROOM: Gets Interim Nod to Use Cash Collateral ----------------------------------------------------- Arthur Groom & Company, Inc., sought and obtained interim authorization from the U.S. Bankruptcy Court for the District of New Jersey to use until March 17, 2010, the cash collateral securing their obligation to their prepetition lenders. TD Bank, N.A.; Velocity Financing Group, Inc.; Alliance Leasing; Co-Activ Capital Partners; and M&I Equipment Finance Company may claim an interest in the Debtor's cash collateral. John P. Di Iorio, Esq., at Shapiro & Croland, the attorney for the Debtor, explains that the Debtor needs the money 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/ARTHUR_GROOM_budget.pdf In exchange for using the cash collateral, the Debtor will grant the Lenders a replacement lien as well as monthly payments. The Court has set a final hearing for March 17, 2010, on the Debtor's request to use cash collateral. Arthur Groom & Company, Inc., operates a retail jewelry store in Ridgewood, New Jersey. The Company filed for Chapter 11 bankruptcy protection on February 3, 2010 (Bankr. D. N.J. Case No. 10-13221). The Company listed $1,000,001 to $10,000,000 in assets and $10,000,001 to $50,000,000 in liabilities. ARVINMERITOR INC: Inks Underwriting Deal for 17.35-Mil. Shares -------------------------------------------------------------- ArvinMeritor Inc. entered into an underwriting agreement with J.P. Morgan Securities Inc., Citigroup Global Markets Inc. and UBS Securities LLC, as representatives of the several underwriters named therein, in connection with the offer and sale of 17,350,000 shares of common stock, par value $1.00 per share, of the Company in an underwritten public offering. Pursuant to the Equity Underwriting Agreement, the Company also granted the Equity Underwriters an over-allotment option, which the Equity Underwriters exercised in full on March 1, 2010, to purchase up to an additional 2,602,500 shares of the Company's common stock. The Equity Underwriting Agreement contains representations, warranties and agreements of the Company, conditions to closing, indemnification and contribution rights and obligations of the parties, termination provisions and other terms and conditions, in each case, that are customary in agreements of this type. The issuance and sale of the Shares closed on March 3, 2010. The net proceeds to the Company from the sale of the Shares, after deducting Equity Underwriters' discounts and commissions and other estimated offering expenses payable by the Company, were approximately $199 million. Certain of the Equity Underwriters or their affiliates participated as Debt Underwriters of the Company's offering of the Securities in an underwritten public offering that occurred concurrently with the offering of the Shares, and certain of the Equity Underwriters are acting as dealer managers for the Company's pending offer to purchase up to $175 million aggregate principal amount of the Company's 8-3/4% notes due 2012. Certain of the Equity Underwriters or their affiliates are holders of the Company's 8-3/4% notes due 2012 that are subject to such pending offer to purchase. In addition, certain of the Equity Underwriters or their affiliates are lenders under the Company's senior secured credit facility. From time to time in the ordinary course of their respective businesses, the Equity Underwriters and their affiliates have engaged in and may in the future engage in commercial banking, investment management, investment banking, derivatives and/or financial advisory and other commercial transactions and services with the Company and its affiliates for which they have received or will receive customary fees and commissions. A full-text copy of the Equity Underwriting Agreement is available for free at http://ResearchArchives.com/t/s?5724 About ArvinMeritor Inc. Based in Troy, Michigan, ArvinMeritor, Inc. (NYSE: ARM) -- http://www.arvinmeritor.com/-- is a premier global supplier of a broad range of integrated systems, modules and components to the motor vehicle industry. The company marks its centennial anniversary in 2009, celebrating a long history of 'forward thinking.' The company serves commercial truck, trailer and specialty original equipment manufacturers and certain aftermarkets, and light vehicle manufacturers. As of September 30, 2009, ArvinMeritor had $2.508 billion in total assets and shareowners' deficit of $1.277 billion. As of September 30, 2009, short-term debt was $97 million; Accounts payable was $674 million; Other current liabilities were $411 million; Liabilities of discontinued operations were $107 million; Long-term debt was $1.080 billion; Retirement benefits were $1.077 billion; Other liabilities were $310 million, and Minority interests were $29 million. * * * According to the Troubled Company Reporter on Jan. 25, 2010, Moody's Investors Service affirmed the Corporate Family and Probability of Default ratings of ArvinMeritor, Inc., at Caa1. In a related action, the rating of the senior secured revolving credit facility was affirmed at B1, and the ratings of the senior unsecured notes were affirmed at Caa2. ArvinMeritor's Speculative Grade Liquidity Rating was raised to SGL-3 from SGL-4. The rating outlook is changed to stable. AVAYA INC: Bank Debt Trades at 12% Off in Secondary Market ---------------------------------------------------------- Participations in a syndicated loan under which Avaya, Inc., is a borrower traded in the secondary market at 87.70 cents-on-the- dollar during the week ended Friday, March 5, 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 275 basis points above LIBOR to borrow under the facility. The bank loan matures on Oct. 26, 2014. Moody's and Standard & Poor's do not rate the bank debt. The debt is one of the biggest gainers and losers among 190 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. Avaya, Inc., based in Basking Ridge, New Jersey, is a supplier of communications systems and software for enterprise customers. The Troubled Company Reporter stated on Dec. 23, 2009, that Moody's downgraded Avaya's corporate family rating to B3 from B2. The downgrade was driven by challenges presented by the acquisition of Nortel's enterprise assets as well as the large amount of additional debt incurred to finance the acquisition (approximately $1 billion). The TCR reported on Sept. 16, 2009, that Standard & Poor's placed its ratings, including the 'B' corporate credit rating, on Avaya, Inc., on CreditWatch with negative implications, following the company's announcement that it has been accepted as the buyer of Nortel Networks Corp.'s (not rated) Enterprise Solutions businesses, for $900 million. AVIS BUDGET: BlackRock Holds 5.52% of Common Stock -------------------------------------------------- BlackRock Inc. disclosed that it may be deemed to beneficially own 5,632,243 shares or roughly 5.52% of the common stock of Avis Budget Group Inc. Avis Budget Group (NYSE: CAR) -- http://www.avisbudgetgroup.com/ -- provides vehicle rental services, with operations in more than 70 countries. Through its Avis and Budget brands, the Company is a general-use vehicle rental company in each of North America, Australia, New Zealand and certain other regions based on published airport statistics. Avis Budget Group is headquartered in Parsippany, N.J. and has roughly 24,000 employees. At December 31, 2009, the Company had $10.093 billion in total assets against total current liabilities of 1.284 billion, total liabilities exclusive of liabilities under vehicle programs of $4.033 billion, and liabilities under vehicle programs of $5.828 billion, resulting in stockholders' equity of $222 million. * * * As reported by the Troubled Company Reporter on February 19, 2010, Moody's Investors Service changed the rating outlook for Avis Budget Car Rental LLC to Positive from Negative. The company's ratings remain unchanged -- Corporate Family Rating at B2; Probability of Default Rating at B2; senior secured credit facilities at Ba3; senior unsecured at Caa1; and Speculative Grade Liquidity rating at SGL-3. The change in outlook reflects the considerable improvement that continues to take place in Avis' operating, competitive, and funding environment. As reported by the TCR on February 4, 2010, Standard & Poor's Ratings Services raised its corporate credit rating on Avis Budget Group Inc. to 'B+' from 'B-'. S&P also raised the other ratings on the company by two notches, and the recovery ratings on the company's secured and unsecured debt remain unchanged. AVIS BUDGET: Columbia Wanger Asset Holds 6.2% of Common Stock ------------------------------------------------------------- Columbia Wanger Asset Management, L.P., disclosed that it may be deemed to beneficially own 6,358,250 shares or roughly 6.2% of the common stock of Avis Budget Group Inc. Fidelity Management & Research Company, a wholly owned subsidiary of FMR LLC, is the beneficial owner of 13,704,356 shares or 13.437% of the Common Stock outstanding of Avis Budget Group as a result of acting as investment adviser to various investment companies. Edward C. Johnson 3d and FMR LLC, through its control of Fidelity, and the funds each has sole power to dispose of the 13,704,356 shares owned by the Funds. About Avis Budget Group Avis Budget Group (NYSE: CAR) -- http://www.avisbudgetgroup.com/ -- provides vehicle rental services, with operations in more than 70 countries. Through its Avis and Budget brands, the Company is a general-use vehicle rental company in each of North America, Australia, New Zealand and certain other regions based on published airport statistics. Avis Budget Group is headquartered in Parsippany, N.J. and has roughly 24,000 employees. At December 31, 2009, the Company had $10.093 billion in total assets against total current liabilities of 1.284 billion, total liabilities exclusive of liabilities under vehicle programs of $4.033 billion, and liabilities under vehicle programs of $5.828 billion, resulting in stockholders' equity of $222 million. * * * As reported by the Troubled Company Reporter on February 19, 2010, Moody's Investors Service changed the rating outlook for Avis Budget Car Rental LLC to Positive from Negative. The company's ratings remain unchanged -- Corporate Family Rating at B2; Probability of Default Rating at B2; senior secured credit facilities at Ba3; senior unsecured at Caa1; and Speculative Grade Liquidity rating at SGL-3. The change in outlook reflects the considerable improvement that continues to take place in Avis' operating, competitive, and funding environment. As reported by the TCR on February 4, 2010, Standard & Poor's Ratings Services raised its corporate credit rating on Avis Budget Group Inc. to 'B+' from 'B-'. S&P also raised the other ratings on the company by two notches, and the recovery ratings on the company's secured and unsecured debt remain unchanged. AVIS BUDGET: Unit to Offer $400 Million of Senior Notes ------------------------------------------------------- Avis Budget Group Inc. reported that its wholly owned subsidiary, Avis Budget Car Rental LLC, intends to offer $400 million aggregate principal amount of senior notes. The notes will be senior obligations of Avis Budget Car Rental, LLC and will be guaranteed on a senior basis by Avis Budget Group and certain of its domestic subsidiaries. The Company intends to use the net proceeds of the offering to help repay outstanding indebtedness on its floating rate term loan and for general corporate purposes. Including the effect of interest rate hedges, the floating rate term loan being repaid has an effective interest rate of approximately 9.2%. Contemporaneously, the Company has also proposed an amendment to its senior credit facility, which, among other items, would reduce the maximum aggregate amount of debt outstanding under such facility to $1.5 billion. As part of the amendment, the company will extend the maturities of approximately $1.2 billion of the facility by two years, increase the interest rate spreads by 50 basis points, significantly reduce the principal amount of the term loan outstanding, and revise the financial and non-financial covenants to provide more flexibility to the Company. The amendment also provides for payment of normal and customary fees and expenses. Although the Company has received commitments from lenders for the proposed amendment, the amendment is subject to satisfaction of customary closing conditions; therefore, there can be no assurance that the proposed amendment will be completed as contemplated or at all. About Avis Budget Group Avis Budget Group (NYSE: CAR) -- http://www.avisbudgetgroup.com/ -- provides vehicle rental services, with operations in more than 70 countries. Through its Avis and Budget brands, the Company is a general-use vehicle rental company in each of North America, Australia, New Zealand and certain other regions based on published airport statistics. Avis Budget Group is headquartered in Parsippany, N.J. and has roughly 24,000 employees. At September 30, 2009, the Company had $9.96 billion in total assets against total current liabilities of $858 million, total liabilities exclusive of liabilities under vehicle programs of $3.85 billion, and liabilities under vehicle programs of $5.88 billion, resulting in stockholders' equity of $229 million. * * * According to the Troubled Company Reporter on Feb. 4, 2010, Standard & Poor's Ratings Services raised its corporate credit rating on Avis Budget Group Inc. to 'B+' from 'B-'. S&P also raised the other ratings on the company by two notches, and the recovery ratings on the company's secured and unsecured debt remain unchanged. The outlook is now stable. AVIZA TECHNOLOGY: Files Revised Plan of Liquidation --------------------------------------------------- BankruptcyData reports that Aviza Technology filed with the U.S. Bankruptcy Court a revised Plan of Liquidation and related Disclosure Statement. BData says the Plan provides for the consolidation of all assets and all liabilities of ATI, Aviza and TTI into a single estate as of the effective date of the Plan. The consolidation of the estates eliminates any inter-company claims between the three Debtors not previously cancelled as well as the guaranties of the obligations of one Debtor by either of the others. Consolidation also ensures that multiple and duplicative claims filed against more than one Debtor will not improperly receive more than one distribution. In addition, creditors of the consolidated estates are combined for purposes of voting on the Plan. Substantive consolidation will not affect the treatment afforded to the banks' allowed secured claim in the Plan and, therefore, will not affect the right of the banks to be paid ahead of other creditors as provided by the Plan. The Court approved the sale of certain of the assets of the Debtors and the assets and stock of certain of their direct and indirect subsidiaries to Sumitomo Precision Products. The purchase transaction closed on October 16, 2009, and the consideration, valued by the Debtors at approximately $60 million, included cash, certain promissory notes and the assumption of certain liabilities. The Debtors' Plan will be implemented by distributing cash received from the promissory notes, liquidation of the Debtors' remaining assets and the wind down and upstreaming of cash by direct and indirect subsidiaries of ATI to the Debtors. The Court subsequently issued an order approving the Disclosure Statement and scheduled an April 8, 2010 hearing to consider confirming the Plan. About Aviza Technology Inc. Headquartered in Scotts Valley, California, Aviza Technology Inc. (NASDAQ GM:AVZA) -- http://www.aviza.com/-- designs, manufactures, sells and supports semiconductor capital equipment and process technologies for the global semiconductor industry and related markets. The Company's systems are used in a variety of segments of the semiconductor market for advanced silicon for memory devices, 3-D packaging and power integrated circuits for communications. The Company's manufacturing, R&D, sales and customer support facilities are located in the United Kingdom, Germany, France, Taiwan, China, Japan, Korea, Singapore and Malaysia. The Company and two of its subsidiaries, Aviza Inc. and Trikon Technologies Inc., filed for Chapter 11 bankruptcy protection on June 9, 2009 (Bankr. N.D. Calif. Case No. 09-54511). Judge Roger L. Efremsky presides over the Chapter 11 case. Attorneys at the Law Offices of Murray and Murray represent the Debtors. At the time of the filing, Aviza Technology estimated assets and debts of $10 million to $50 million. BANK OF ILLINOIS: Closed; Heartland Bank Assumes All Deposits ------------------------------------------------------------- Bank of Illinois, Normal, Illinois, was closed March 5 by the Illinois Department of Financial Professional Regulation -- Division of Banking, which appointed the Federal Deposit Insurance Corporation as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Heartland Bank and Trust Company, Bloomington, Illinois, to assume all of the deposits of Bank of Illinois. The two branches of Bank of Illinois will reopen as branches of Heartland Bank and Trust Company. Depositors of Bank of Illinois will automatically become depositors of Heartland Bank and Trust Company. 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 existing branch until they receive notice from Heartland Bank and Trust Company that it has completed systems changes to allow other Heartland Bank and Trust Company branches to process their accounts as well. As of December 31, 2009, Bank of Illinois had approximately $211.7 million in total assets and $198.5 million in total deposits. Heartland Bank and Trust Company will pay the FDIC a premium of 3.61 percent to assume all of the deposits of Bank of Illinois. In addition to assuming all of the deposits of the failed bank, Heartland Bank and Trust Company agreed to purchase essentially all of the assets. The FDIC and Heartland Bank and Trust Company entered into a loss- share transaction on $166.6 million of Bank of Illinois's assets. Heartland Bank and Trust Company 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 1-800-760-3641. Interested parties also can visit the FDIC's Web site at http://www.fdic.gov/bank/individual/failed/bankofillinois.html The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $53.7 million. Heartland Bank and Trust Company's acquisition of all the deposits was the "least costly" resolution for the FDIC's DIF compared to all alternatives. Bank of Illinois is the 24th FDIC-insured institution to fail in the nation this year, and the third in Illinois. The last FDIC-insured institution closed in the state was George Washington Savings Bank, Orland Park, on February 19, 2010. BRIGHAM EXPLORATION: Posts $123 Million Net Loss in 2009 -------------------------------------------------------- Brigham Exploration Company filed its annual report on Form 10-K, showing a net loss of $123.0 million on $70.4 million of revenue for 2009, compared with a net loss of $162.2 million on $127.8 million of revenue for 2008. The Company's balance sheet as of Dec. 31, 2009, showed $498.3 million in assets, $234.0 million of debts, and $264.3 million of stockholders' equity. A full-text copy of the annual report is available for free at: http://researcharchives.com/t/s?5739 About Brigham Exploration Austin, Texas-based Brigham Exploration Company (NASDAQ: BEXP) -- http://www.bexp3d.com/-- is an independent exploration, development and production company that utilizes advanced exploration, drilling and completion technologies to systematically explore for, develop and produce domestic onshore oil and natural gas reserves. In late 2007, the majority of the Company's drilling capital expenditures shifted from its historically active areas in the Onshore Gulf Coast, the Anadarko Basin and West Texas to the Williston Basin in North Dakota and Montana, where the Company is currently targeting the Bakken, Three Forks and Red River objectives. * * * As reported in the Troubled Company Reporter or October 26, 2009, Moody's Investors Service upgraded Brigham Exploration Company's Corporate Family Fating and Probability of Default Rating to Caa2 from Caa3, its senior unsecured note rating to Caa3 (LGD5-73%) from Ca (LGD5-75%), and its Speculative Grade Liquidity rating to SGL-2 from SGL-4. The rating outlook is positive. BRUNO'S SUPERMARKETS: Citigroup Reaches Agreement in Old Suit ------------------------------------------------------------- Citigroup Inc. reached an agreement in a lawsuit with bondholders in Bruno's Supermarkets LLC who sued units of the lender for as much as $750 million. Purchasers of senior subordinated notes issued in connection with a 1995 leveraged recapitalization of Bruno's Inc., filed a complaint in Alabama state court against certain Citigroup subsidiaries and affiliates, and other defendants, in 2004, alleging violations of state law arising out of an underwriting of Bruno's securities. Plaintiffs seek "hundreds of millions of dollars" in damages. Citigroup said in its annual report on Form 10-K that in January 2010, prior to trial, the Citigroup defendants entered into a settlement conditioned on court approval. Citigroup did not divulge the terms of the settlement. According to Bloomberg News, the suit was filed in 1999 after Bruno's defaulted in the junk-bond market under ownership by private-equity firm Kohlberg Kravis Roberts & Co., now known as KKR & Co. Plaintiffs were investors who participated in the supermarket chain's $400 million bond issue in 1995 as part of a $1.15 billion leveraged buyout led by KKR, according to a Citigroup filing from August 2009 and data compiled by Bloomberg. Bruno's adviser in the bond sale was Robinson Humphrey Co., which later became a unit of Citigroup's Salomon Smith Barney unit. Bloomberg relates that the resulting debt load led to a Chapter 11 filing by Bruno's in 1998, which culminated in a reorganization plan at the end of 1999. Existing stock and bonds were canceled in the reorganization with new stock going to senior bank creditors. About Bruno's Supermarkets Bruno's Supermarkets LLC -- now known as BFW Liquidation, LLC -- is a privately held company headquartered in Birmingham, Alabama. Bruno's is the parent company of the Bruno's, Food World, and FoodMax grocery store chains, which includes 23 Bruno's, 41 Food World, and 2 FoodMax locations in Alabama and the Florida panhandle. Founded in 1933, Bruno's has operated as an independent company since 2007 after undergoing several transitions and changes in ownership starting in 1995. The current owner is Lone Star Funds, a Dallas-based investor. Bruno's filed for Chapter 11 relief on February 5, 2009 (Bankr. N.D. Ala. Case No. 09-00634). Burr & Forman LLP is the Debtor's lead counsel. Najjar Denaburg, P.C., is the Debtor's conflicts counsel. Greenberg Traurig, LLP, is the official committee of unsecured creditors' counsel. Alvarez & Marsal is the Debtor's restructuring advisor. When Bruno's filed for Chapter 11 protection from its creditors, it listed between $100 million and $500 million each in assets and debts. Bruno's has sold 56 of its stores to C&S Wholesale Grocers Inc., $45.8 million. C&S will operate 31 stores and liquidated the remainder. BUTLER INTERNATIONAL: Seeks Dismissal of Chapter 11 Case -------------------------------------------------------- BankruptcyData reports that Butler International filed with the U.S. Bankruptcy Court a motion to approve a compromise, under Rule 9019, for entry of an order (a) approving a stipulation among the Debtors, the official committee of unsecured creditors and the pre-petition second lien parties, (b) dismissing the Debtors' Chapter 11 cases and (c) granting certain related relief. The Court scheduled a March 31, 2010 hearing to consider the motion. Based in Ft. Lauderdale, Florida, Butler International, Inc. (PINKSHEETS: BUTL) -- http://www.butler.com/-- provides Engineering and Technical Outsourcing services. During its 62- year history of providing services, Butler International has served clients in the aircraft/aerospace, federal/defense, communications, consumer and manufacturing and commercial sectors. At September 30, 2007, the Company had $118,755,000 in total assets, $100,224,000 in total liabilities, and $18,531,000 in total stockholders' equity. For the nine month period then ended, the Company reported a net loss of $4,221,000 on net sales of $236,361,000. The Company has not filed its annual reports for 2007 and 2008 with the Securities and Exchange Commission. The Company and its affiliates, including Butler Services International Inc., filed for Chapter 11 bankruptcy protection on June 1, 2009 (Bankr. D. Del. Case No. 09-11914). Charlene D. Davis, Esq., at Bayard, P.A., assists the Company in its restructuring efforts. The Company listed $50,000,001 to $100,000,000 in assets and $50,000,001 to $100,000,000 in debts. CAROLINA FIRST: Moody's Downgrades Long-Term Issuer Rating to 'C' ----------------------------------------------------------------- Moody's Investors Service downgraded the ratings of Carolina First Bank (long-term issuer to C from Ca, long-term OSO to C from Ca). In addition, the long-term deposit rating of Caa1 and bank financial strength rating of E, have been affirmed. Following the downgrade, the rating outlook is stable. Carolina First Bank is the lead bank of The South Financial Group, Inc., and unrated bank holding company. The downgrade reflects Moody's view that unsecured creditors are in a more vulnerable position than depositors, with an expected loss for uninsured depositors of 0-10% and more than 50% for unsecured creditors. The stable outlook reflects Moody's opinion that the Caa1 rating for long-term deposits appropriately captures the risk to uninsured depositors. In the coming days, the rating agency expects to withdraw the ratings. Carolina First is headquartered in Greenville, South Carolina, and reported total assets of $11.9 billion at December 31, 2009. The last rating action on Carolina First was on October 23, 2009, when Moody's downgraded the bank's ratings (bank financial strength to E from D and long-term deposits to Caa1 from Ba2), and maintained a negative outlook. Downgrades: Issuer: Carolina First Bank -- Issuer Rating, Downgraded to C from Ca -- OSO Senior Unsecured OSO Rating, Downgraded to C from Ca Outlook Actions: Issuer: Carolina First Bank -- Outlook, Changed To Stable From Negative CENTENNIAL BANK: Closed; FDIC OKs Payout of Insured Deposits ------------------------------------------------------------ The Federal Deposit Insurance Corporation approved the payout of the insured deposits of Centennial Bank, Ogden, Utah. The bank was closed March 5 by the Utah Department of Financial Institutions, which appointed the FDIC as receiver. The FDIC entered into an agreement with Zions First National Bank, Salt Lake City, Utah, to accept the failed bank's direct deposits from the federal government, such as Social Security and Veterans' payments. The FDIC was unable to find another financial institution to take over the banking operations of Centennial Bank. As a result, checks to the retail depositors for their insured funds will be mailed on Monday. Brokered deposits will be wired once brokers provide the FDIC with the necessary documents to determine if any of their clients exceed the insurance limits. Customers who placed money with brokers should contact them directly for more information about the status of their funds. As of December 31, 2009, Centennial Bank had approximately $215.2 million in total assets and $205.1 million in total deposits. At the time of closing, the bank had an estimated $1.8 million in uninsured funds. This amount is an estimate that is likely to change once the FDIC obtains additional information from these customers. Customers who have questions about the transaction can call the FDIC toll-free at 1-800-889-4976. Customers with accounts in excess of $250,000 also should contact the toll-free number to set up an appointment to discuss their deposits. Interested parties also can visit the FDIC's Web site at http://www.fdic.gov/bank/individual/failed/centennial-ut.html Beginning on Monday, customers of Centennial Bank with deposits exceeding $250,000 at the bank may visit the FDIC's Web page "Is My Account Fully Insured?" at https://www2.fdic.gov/drrip/afi/index.asp Centennial Bank is the 26th FDIC-insured institution to fail this year and the second in Utah since Barnes Banking Company, Kaysville, was closed on January 15, 2010. The FDIC estimates the cost of the failure to its Deposit Insurance Fund to be approximately $96.3 million. CHARTER COMMS: Bank Debt Trades at 6% Off in Secondary Market ------------------------------------------------------------- Participations in a syndicated loan under which Charter Communications, Inc., is a borrower traded in the secondary market at 93.86 cents-on-the-dollar during the week ended Friday, March 5, 2010, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 0.50 percentage points from the previous week, The Journal relates. The Company pays 262.5 basis points above LIBOR to borrow under the facility. The debt matures on March 6, 2014. Moody's has withdrawn its rating, while Standard & Poor's has assigned a BB+ rating, on the bank debt. The debt is one of the biggest gainers and losers among 190 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. About Charter Communications Based in St. Louis, Missouri, Charter Communications, Inc. (Pink OTC: CHTRQ) -- http://www.charter.com/-- is a broadband communications company and the fourth-largest cable operator in the United States. Charter provides a full range of advanced broadband services, including advanced Charter Digital Cable(R) video entertainment programming, Charter High-Speed(R) Internet access, and Charter Telephone(R). Charter Business(TM) similarly provides scalable, tailored, and cost-effective broadband communications solutions to business organizations, such as business-to-business Internet access, data networking, video and music entertainment services, and business telephone. Charter's advertising sales and production services are sold under the Charter Media(R) brand. Charter Communications and more than a hundred affiliates filed voluntary Chapter 11 petitions on March 27, 2009 (Bankr. S.D.N.Y. Case No. 09-11435). As of March 31, 2009, the Debtors had total assets of $13,650,000,000, and total liabilities of $24,501,000,000. Pacific Microwave filed for bankruptcy April 20, 2009, disclosing assets of not more than $50,000 and debts of more than $1 billion. The Hon. James M. Peck presides over the cases. Richard M. Cieri, Esq., Paul M. Basta, Esq., and Stephen E. Hessler, Esq., at Kirkland & Ellis LLP, in New York, serve as counsel to the Debtors, excluding Charter Investment Inc. Albert Togut, Esq., at Togut, Segal & Segal LLP in New York, serves as Charter Investment, Inc.'s bankruptcy counsel. Curtis, Mallet-Prevost, Colt & Mosel LLP, in New York, is the Debtors' conflicts counsel. Ernst & Young LLP is the Debtors' tax advisors. KPMG LLP is the Debtors' independent auditor. The Debtors' valuation consultants are Duff & Phelps LLC; the Debtors' financial advisors are Lazard Freres & Co. LLC; and the Debtors' restructuring consultants are AlixPartners LLC. The Debtors' regulatory counsel is Davis Wright Tremaine LLP, and Friend Hudak & Harris LLP. The Debtors' claims agent is Kurtzman Carson Consultants LLC. Judge James M. Peck of the U.S. Bankruptcy Court for the Southern District of New York approved the Debtors' pre-arranged joint plan of reorganization in a bench ruling on Oct. 15, 2009. On Nov. 30, 2009, Charter Communications, Inc., announced that it has successfully completed its financial restructuring, which significantly improves the Company's capital structure by reducing debt by approximately 40 percent, or approximately $8 billion. Charter Communications, Inc., has emerged from Chapter 11 under its pre-arranged Joint Plan of Reorganization, which was confirmed by the United States Bankruptcy Court for the Southern District of New York on Nov. 17, 2009. Bankruptcy Creditors' Service, Inc., publishes Charter Communications Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by Charter Communications and more than 100 of its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CHRYSLER LLC: Facing Plan Objections From Taxing Authorities ------------------------------------------------------------ Various parties filed objections to confirmation of the Chapter 11 plan of Chrysler LLC, now known as Old CarCo LLC. The objectors include taxing authorities. The Department of Treasury of the state of Michigan asks the Court to deny confirmation of Old CarCo LLC's Chapter 11 plan or, in the alternative, that the Court hold that nothing in the Plan will be deemed to affect the ability of the Treasury to assert its own statutory or contractual rights against the Debtors and their corporate officers. On September 16, 2009, the Treasury issued an intent to assess single business tax liabilities for the 1996 through 2001 tax periods against Old Chrysler as successor to the controlling members on the 1996 through 2001 SBT consolidated returns. In their Second Amended Joint Plan of Liquidation, the Debtors, however, propose to forever release, waive and discharge themselves and their corporate officers from all liabilities that in any way relate to the Debtors in the Chapter 11 cases. The Illinois Departments of Revenue and Employment Security questions a provision in the liquidation plan, which sets a "30 day bar date" for administrative expense claims. The agency says the provision violates the bankruptcy law to the extent it applies to administrative tax claims. The local tax authorities in Texas ask the Court to deny confirmation of the Debtors' Liquidation Plan unless the Plan provides for the retention of their liens for taxes on the Debtors' properties until those taxes are paid in full. The Texas Tax Authorities assert a $175,000 pre-bankruptcy claim against the Debtors, which is secured by first priority liens on the Debtors' real and personal properties. The Chapter 11 Plan Copies of the Second Amended Plan and Disclosure Statement are available for free at: http://bankrupt.com/misc/Chrysler_2ndAmendedPlan_012210.pdf http://bankrupt.com/misc/Chrysler_2ndAmendedDS_012210.pdf The hearing to consider confirmation of the Plan is currently set to commence March 16, 2010, at 10:00 a.m., Eastern Time. Confirmation objections are due March 2. Deadline for submitting ballots to accept or reject the Plan is also on March 2. Assuming that the requisite votes to accept the Plan are received, the applicable requirements under the Bankruptcy Code are met and the other conditions to the confirmation of the Plan are satisfied, the effective date of the Plan currently is expected to occur on or before March 31, 2010. The Joint Plan provides for the liquidation of the Debtors' remaining assets and the implementation of certain restructuring transactions and other agreements. As of the effective date of the Plan, each of the Debtors will cease to exist, and the Liquidation Trust Assets will be transferred to and vest in the Liquidation Trust free and clear of all Liens, Claims and Interests. The Debtors, according to their Plan, will not be paying the initial $4 billion loan it availed from the U.S. government through the Troubled Asset Relief Program in January 2008. Unsecured creditors will not recover anything, unless they vote to accept the Plan and the Daimler Litigation will bring in more than $25 million. The Daimler Litigation was commenced by the Official Committee of Unsecured Creditors on August 17, 2009, against certain Daimler Parties for intentional and constructive fraudulent transfer, unjust enrichment, corporate alter ego and breach of fiduciary duty. About Chrysler Group LLC Chrysler Group LLC, formed in 2009 from a global strategic alliance with Fiat Group, produces Chrysler, Jeep(R), Dodge, Ram Truck, Mopar(R) and Global Electric Motorcars (GEM) brand vehicles and products. Headquartered in Auburn Hills, Michigan, Chrysler Group LLC's product lineup features some of the world's most recognizable vehicles, including the Chrysler 300, Jeep Wrangler and Ram Truck. Fiat will contribute world-class technology, platforms and powertrains for small- and medium-sized cars, allowing Chrysler Group to offer an expanded product line including environmentally friendly vehicles. About Chrysler LLC Chrysler LLC and 24 affiliates on April 30 sought Chapter 11 protection from creditors (Bankr. S.D.N.Y (Mega-case), Lead Case No. 09-50002). Chrysler hired Jones Day, as lead counsel; Togut Segal & Segal LLP, as conflicts counsel; Capstone Advisory Group LLC, and Greenhill & Co. LLC, for financial advisory services; and Epiq Bankruptcy Solutions LLC, as its claims agent. Chrysler has changed its corporate name to Old CarCo following its sale to a Fiat-owned company. As of December 31, 2008, Chrysler had $39,336,000,000 in assets and $55,233,000,000 in debts. Chrysler had $1.9 billion in cash at that time. In connection with the bankruptcy filing, Chrysler reached an agreement with Fiat SpA, the U.S. and Canadian governments and other key constituents regarding a transaction under Section 363 of the Bankruptcy Code that would effect an alliance between Chrysler and Italian automobile manufacturer Fiat. Under the terms approved by the Bankruptcy Court, the company formerly known as Chrysler LLC on June 10, 2009, formally sold substantially all of its assets, without certain debts and liabilities, to a new company that will operate as Chrysler Group LLC. Fiat has a 20 percent equity interest in Chrysler Group. Bankruptcy Creditors' Service, Inc., publishes Chrysler Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Chrysler LLC and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CHRYSLER LLC: Michigan Wants Contaminated Sites Addressed by Plan ----------------------------------------------------------------- The State of Michigan Department of Environmental Quality relates that it is charged with regulatory authority and police powers to protect public health, safety and enforce the environmental laws in Michigan. The MDEQ contends that the Debtors' Second Amended Joint Plan of Liquidation does not comply with non-bankruptcy law, and does not address the Debtors' injunctive obligations for environmentally contaminated sites in Michigan that are currently or previously owned and operated by them. Therefore, the MDEQ argues, the Plan does not meet the requirements for confirmation under the Bankruptcy Code. Michael A. Cox, Esq., Attorney General for the state of Michigan, relates that MDEQ filed a proof of claim against Old Carco for the recovery of its liquidated past environmental response costs paid or incurred by MDEQ under state and federal environmental laws. He contends that the Debtors are jointly and severally liable for those costs. The MDEQ has incurred unreimbursed prepetition response costs of $116,174 at various Old Carco facilities. The Plan does not comply with applicable provisions of the Bankruptcy Code as required by Section 1129(a)(1) of the Bankruptcy Code because it fails to acknowledge or properly classify environmental claims and does not address the environmental contamination at the Michigan facilities or treat the injunctive obligations as nondischargeable, Mr. Cox argues. "The Debtor cannot walk away from its obligation to address environmental contamination for which it is liable," Mr. Cox contends. He explains that with regard to the Debtors' owned sites, it is settled law that property of a bankruptcy estate cannot be abandoned in violation of state laws that protect public health and safety. "In Michigan, compliance with the environmental laws is not optional," he continues. While the Debtors have not yet sought abandonment under Section 554 of the Bankruptcy Code for their remaining facilities, they have failed to adequately address those in their Plan, Mr. Cox asserts. He points out that a debtor cannot abandon the hazardous conditions it creates, and must also address contamination at its former facilities. To the extent the Plan is an attempt to abandon the Debtors' obligation to address environmental contamination for which it is liable, it is contrary to Michigan law and not confirmable, the MDEQ tells Judge Gonzalez. The Chapter 11 Plan Copies of the Second Amended Plan and Disclosure Statement are available for free at: http://bankrupt.com/misc/Chrysler_2ndAmendedPlan_012210.pdf http://bankrupt.com/misc/Chrysler_2ndAmendedDS_012210.pdf The hearing to consider confirmation of the Plan is currently set to commence March 16, 2010, at 10:00 a.m., Eastern Time. Confirmation objections are due March 2. Deadline for submitting ballots to accept or reject the Plan is also on March 2. Assuming that the requisite votes to accept the Plan are received, the applicable requirements under the Bankruptcy Code are met and the other conditions to the confirmation of the Plan are satisfied, the effective date of the Plan currently is expected to occur on or before March 31, 2010. The Joint Plan provides for the liquidation of the Debtors' remaining assets and the implementation of certain restructuring transactions and other agreements. As of the effective date of the Plan, each of the Debtors will cease to exist, and the Liquidation Trust Assets will be transferred to and vest in the Liquidation Trust free and clear of all Liens, Claims and Interests. The Debtors, according to their Plan, will not be paying the initial $4 billion loan it availed from the U.S. government through the Troubled Asset Relief Program in January 2008. Unsecured creditors will not recover anything, unless they vote to accept the Plan and the Daimler Litigation will bring in more than $25 million. The Daimler Litigation was commenced by the Official Committee of Unsecured Creditors on August 17, 2009, against certain Daimler Parties for intentional and constructive fraudulent transfer, unjust enrichment, corporate alter ego and breach of fiduciary duty. About Chrysler Group LLC Chrysler Group LLC, formed in 2009 from a global strategic alliance with Fiat Group, produces Chrysler, Jeep(R), Dodge, Ram Truck, Mopar(R) and Global Electric Motorcars (GEM) brand vehicles and products. Headquartered in Auburn Hills, Michigan, Chrysler Group LLC's product lineup features some of the world's most recognizable vehicles, including the Chrysler 300, Jeep Wrangler and Ram Truck. Fiat will contribute world-class technology, platforms and powertrains for small- and medium-sized cars, allowing Chrysler Group to offer an expanded product line including environmentally friendly vehicles. About Chrysler LLC Chrysler LLC and 24 affiliates on April 30 sought Chapter 11 protection from creditors (Bankr. S.D.N.Y (Mega-case), Lead Case No. 09-50002). Chrysler hired Jones Day, as lead counsel; Togut Segal & Segal LLP, as conflicts counsel; Capstone Advisory Group LLC, and Greenhill & Co. LLC, for financial advisory services; and Epiq Bankruptcy Solutions LLC, as its claims agent. Chrysler has changed its corporate name to Old CarCo following its sale to a Fiat-owned company. As of December 31, 2008, Chrysler had $39,336,000,000 in assets and $55,233,000,000 in debts. Chrysler had $1.9 billion in cash at that time. In connection with the bankruptcy filing, Chrysler reached an agreement with Fiat SpA, the U.S. and Canadian governments and other key constituents regarding a transaction under Section 363 of the Bankruptcy Code that would effect an alliance between Chrysler and Italian automobile manufacturer Fiat. Under the terms approved by the Bankruptcy Court, the company formerly known as Chrysler LLC on June 10, 2009, formally sold substantially all of its assets, without certain debts and liabilities, to a new company that will operate as Chrysler Group LLC. Fiat has a 20 percent equity interest in Chrysler Group. Bankruptcy Creditors' Service, Inc., publishes Chrysler Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Chrysler LLC and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CHRYSLER LLC: New Chrysler Asserts Ownership of Rabbi Trusts ------------------------------------------------------------ Chrysler Group LLC f/k/a New CarCo Acquisition LLC objects to the Debtors' Joint Chapter 11 Plan of Liquidation only to the extent that the Debtors purport to own or distribute assets purchased by Chrysler Group under the Master Transaction Agreement governing the sale of substantially all of the Debtors' assets to Chrysler Group. In the Sale, the Debtors sold all of their right, title and interest in the "Purchased Assets," which is defined broadly in the MTA to include "all of the properties, assets and rights of Sellers" other than a list of specific "Excluded Assets," Steven L. Holley, Esq., at Sullivan & Cromwell LLP, in New York, relates. He adds that in addition to the general reference, the MTA definition of "Purchased Assets" includes a specific reference to "any and all rights" of the Debtors "related to or arising under" specific non-qualified deferred compensation plans, which include certain assets in "rabbi trusts" governed by Merrill Lynch Trust Company of America (Illinois), State Street Corporate Services, and the Employee Benefits Committee of New Venture Gear, Inc. The Assumed Plan Rabbi Trusts provide assets intended to fund payment obligations under the Assumed Plans and are, therefore, "Purchased Assets" because they are held in trust to fund the Assumed Plans and because they are properties, assets and rights of the Debtors not identified as "Excluded Assets", Mr. Holley asserts. The Debtors identify unspecified "Rabbi Trust" assets as First Lien Lender Collateral in the Plan and the accompanying Disclosure Statement, Mr. Holley points out. He argues that Chrysler Group is uncertain to which trusts the reference relates. To the extent the Debtors are claiming that they or any creditor retained an interest in the Assumed Plan Rabbi Trusts, Mr. Holley contends that the Debtors are incorrect. Those trusts do not belong to the Debtors and are no longer First Lien Lender Collateral because they were acquired by Chrysler Group under the MTA free and clear of any lien or interest. Mr. Holley tells the Court that discussions between the Debtors and Chrysler Group are ongoing, and Chrysler Group is hopeful that the matter will be resolved without the Court's intervention. Nevertheless, in order to preserve Chrysler Group's rights to the Assumed Plan Rabbi Trusts that it purchased, Chrysler Group objects to the Plan to the extent that the Debtors purport to own or distribute any right, title or interest relating to the Assumed Plan Rabbi Trusts or Trust Agreements or any other Purchased Assets. The Chapter 11 Plan Copies of the Second Amended Plan and Disclosure Statement are available for free at: http://bankrupt.com/misc/Chrysler_2ndAmendedPlan_012210.pdf http://bankrupt.com/misc/Chrysler_2ndAmendedDS_012210.pdf The hearing to consider confirmation of the Plan is currently set to commence March 16, 2010, at 10:00 a.m., Eastern Time. Confirmation objections are due March 2. Deadline for submitting ballots to accept or reject the Plan is also on March 2. Assuming that the requisite votes to accept the Plan are received, the applicable requirements under the Bankruptcy Code are met and the other conditions to the confirmation of the Plan are satisfied, the effective date of the Plan currently is expected to occur on or before March 31, 2010. The Joint Plan provides for the liquidation of the Debtors' remaining assets and the implementation of certain restructuring transactions and other agreements. As of the effective date of the Plan, each of the Debtors will cease to exist, and the Liquidation Trust Assets will be transferred to and vest in the Liquidation Trust free and clear of all Liens, Claims and Interests. The Debtors, according to their Plan, will not be paying the initial $4 billion loan it availed from the U.S. government through the Troubled Asset Relief Program in January 2008. Unsecured creditors will not recover anything, unless they vote to accept the Plan and the Daimler Litigation will bring in more than $25 million. The Daimler Litigation was commenced by the Official Committee of Unsecured Creditors on August 17, 2009, against certain Daimler Parties for intentional and constructive fraudulent transfer, unjust enrichment, corporate alter ego and breach of fiduciary duty. About Chrysler Group LLC Chrysler Group LLC, formed in 2009 from a global strategic alliance with Fiat Group, produces Chrysler, Jeep(R), Dodge, Ram Truck, Mopar(R) and Global Electric Motorcars (GEM) brand vehicles and products. Headquartered in Auburn Hills, Michigan, Chrysler Group LLC's product lineup features some of the world's most recognizable vehicles, including the Chrysler 300, Jeep Wrangler and Ram Truck. Fiat will contribute world-class technology, platforms and powertrains for small- and medium-sized cars, allowing Chrysler Group to offer an expanded product line including environmentally friendly vehicles. About Chrysler LLC Chrysler LLC and 24 affiliates on April 30 sought Chapter 11 protection from creditors (Bankr. S.D.N.Y (Mega-case), Lead Case No. 09-50002). Chrysler hired Jones Day, as lead counsel; Togut Segal & Segal LLP, as conflicts counsel; Capstone Advisory Group LLC, and Greenhill & Co. LLC, for financial advisory services; and Epiq Bankruptcy Solutions LLC, as its claims agent. Chrysler has changed its corporate name to Old CarCo following its sale to a Fiat-owned company. As of December 31, 2008, Chrysler had $39,336,000,000 in assets and $55,233,000,000 in debts. Chrysler had $1.9 billion in cash at that time. In connection with the bankruptcy filing, Chrysler reached an agreement with Fiat SpA, the U.S. and Canadian governments and other key constituents regarding a transaction under Section 363 of the Bankruptcy Code that would effect an alliance between Chrysler and Italian automobile manufacturer Fiat. Under the terms approved by the Bankruptcy Court, the company formerly known as Chrysler LLC on June 10, 2009, formally sold substantially all of its assets, without certain debts and liabilities, to a new company that will operate as Chrysler Group LLC. Fiat has a 20 percent equity interest in Chrysler Group. Bankruptcy Creditors' Service, Inc., publishes Chrysler Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Chrysler LLC and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CHRYSLER LLC: Proposes to Sell Sterling Heights Plant for $20MM --------------------------------------------------------------- Chrysler LLC, now known as Old CarCo LLC, and its units ask the U.S. Bankruptcy Court for the Southern District of New York to: (a) authorize the sale of an assembly plant, in Sterling Heights, Michigan, for $20,000,000, pursuant to a private sale to Chrysler Group LLC free and clear of liens, claims, interests and encumbrances pursuant to Sections 105, 363 and 365 of the Bankruptcy Code; (b) authorize and approve Old Carco's entry into, and performance under: * an Amendment No. 3 to a Transition Services Agreement to be executed as of the closing date of the sale transaction between Old Carco and New Chrysler. The TSA was entered into by Old Carco and New Chrysler on June 10, 2009; and * an Intellectual Property License Agreement to be executed as of the Closing Date, between Old Carco and New Chrysler; and (c) authorize the assumption, and assignment to New Chrysler, of: * a Utility Services Agreement, dated as of May 24, 2004, between DTE Energy Center, LLC, and Debtor Utility Assets LLC; * an Easement Agreement, dated as of May 17, 2004, between Old Carco, as successor-in-interest to DaimlerChrysler Corporation, and Utility Assets; and * a Natural Gas Exploration, Production and Sale Agreement, dated August 20, 1991, between Old Carco and West Bay Exploration Company. Corinne Ball, Esq., at Jones Day, in New York, relates that the Debtors have executed a purchase agreement dated February 18, 2010, for the sale of the Property to New Chrysler. The Property consists of (i) a parcel of real property located at 38111 Van Dyke, Sterling Heights, Macomb County, Michigan, which also includes a manufacturing and assembly facility, and (ii) all of the Debtors' right, title and interest, if any, in and to all personalty, trade fixtures and equipment currently located on the Land. The Property was pledged as collateral to secure the Debtors' obligations under the Amended and Restated First Lien Credit Agreement, dated as of November 29, 2007, among Carco Intermediate Holdco II LLC, Old Carco, the lender parties and JPMorgan Chase Bank, N.A., as agent. The First Lien Lenders hold the first priority lien on all of the Property, subject to certain permitted liens, as set forth in the Court's "First Lien Winddown Order" between the Debtors and the First Lien Agent on behalf of the First Lien Lenders, entered on November 19, 2009. DTE provides Utility Assets with various utility services at the Property. The related Easement Agreement between DTE and Old Carco governs DTE's access to the Property in connection with its provision of the Utility Services. Non-Debtor West Bay Exploration Company conducted natural gas exploration activities on the Land, and constructed a well, drilling facility and piping system for the recovery and transmission of natural gas and other liquid hydrocarbons to both the assembly plant located on the Property and certain third-party distributors of natural gas or other consumers of Natural Gas. Pursuant to the TSA, New Chrysler (i) is entitled to use the Property through the license period until April 30, 2011, and (ii) since the Closing Date, has been conducting, and currently conducts, operations at the Property. Pursuant to the TSA, New Chrysler does not pay rent for use of the Property during the License Period, but is responsible for all carrying costs during the License Period, and the phase out and deactivation of the premises at the conclusion of the License Period. Purchase Agreement The principal terms of the Purchase Agreement are: (a) Purchase Price: $20,000,000; (b) Deposit: $1,000,000 in immediately available funds payable to First American Title Insurance Company -- the Title Company -- which will hold the deposit in an interest bearing escrow account and will apply it toward the Purchase Price upon closing of the Transaction. A title company is a company involved in examining and insuring title claims, usually for real estate, on behalf of its customers; (c) New Chrysler's obligation to close the Transaction is conditioned on, among other things, Old Carco's delivery to the Title Company of a quitclaim deed conveying fee simple title to the Property, subject only to Permitted Liens; (d) Old Carco's obligation to close the Transaction is conditioned on, among other things, New Chrysler's delivery to the Title Company of an acceptable closing statement; (e) At the Closing, Old Carco will pay, out of the proceeds of the Transaction: -- any fees incurred in connection with the removal of unpermitted exceptions with respect to the Property; -- all city, state and county transfer taxes and fees payable in connection with the sale; and -- one-half of any escrow fee; and (f) New Chrysler will take title to the Property on an "as is" and "where is" basis. New Chrysler has agreed to assume the environmental condition of the Property in its condition at the Closing, and to indemnify Old Carco from and against any claim that may arise regarding the environmental condition of the Property caused by the Purchaser's activities and operation, whether existing prior to, on or after the Closing. A full-text copy of the Purchase Agreement can be obtained for free at: http://bankrupt.com/misc/Chrysler_PurchaseSterling_021810.pdf Extraordinary Provisions There are items in the Purchase Agreement and the Sale Order that may be considered "extraordinary provisions" under the "Guidelines for the Conduct of Asset Sales" promulgated pursuant to General Order M-331, Ms. Ball relates. The Extraordinary Provisions are: (a) Private Sale. As set forth in the request, the Purchase Agreement and Sale Order contemplate the private sale of the Property. The Debtors believe that a private sale is appropriate under the circumstances and maximizes the value of the Property; (b) Use of Proceeds. The Debtors intend to release the net proceeds of the sale of the Property to the First Lien Lenders, to whom the Property has been pledged as collateral and as the primary economic parties-in- interest, in accordance with the First Lien Winddown Order; and (c) Waiver of Bankruptcy Rule 6004(h) Stay. The proposed form of Sale Order seeks a waiver of the 14-day stay imposed under Rule 6004(h) of the Federal Rules of Bankruptcy Procedure. Ms. Ball contends that the fact that the Property is to be sold pursuant to a private sale does not undermine the fair or reasonable nature of New Chrysler's offer for the Property. She explains that the $20 million cash consideration to be received in exchange for the Property, without even considering the substantial additional value of the Ancillary Agreements or the absence of any brokers' fees in connection with the Transaction, falls at the upper end of the range of the previous estimates of the gross recoverable value of the Property received by the Debtors. The Court will commence a hearing on March 11, 2010, at 10:00 a.m., Eastern Time, to consider the request. Objections were due on March 1, 2010. New Chrysler to Keep Plant Open Through 2012 According to a report by The Canadian Press, New Chrysler agreed to acquire the Sterling assembly plant to keep it open through 2012. The Sterling Heights plant, which builds the Chrysler Sebring and Dodge Avenger, was previously slated for closure in July but New Chrysler did not push through with it after seeing the need to produce upgraded versions of the vehicles through 2012. New Chrysler's decision to keep the plant open through 2012 would save 1,200 jobs at the plant. Sterling Heights City Council said the decision also means that the city will continue to get $2.6 million a year in taxes from the auto maker, according to The Canadian Press. New Chrysler, meanwhile, would get the $8.2 million in annual tax abatements offered by the city from its acquisition of the plant, according to a February 19 report by The Wall Street Journal. Although Chrysler has not made a commitment beyond 2010, Sterling Heights City Council said that the auto maker's decision to keep the plant leaves open the possibility that it might make a longer- term commitment. The Sterling Heights plant has been in operations since 1983 and is credited for supporting parts suppliers and merchants in the surrounding areas. Chrysler reportedly 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. "Loss of the plant would have created a huge void in the middle of our industrial corridor, which would have been difficult and very costly to fill in these tough economic times," The Canadian Press quoted Mark Vanderpool, city manager, as saying. New Chrysler said the City Council has twice extended tax breaks on the plant while it negotiated the plant's acquisition. New Chrysler said on Friday it will accept the city's offer to transfer property tax abatements to the auto maker, The Canadian Press reported. Michael Robinet, an auto industry analyst at CSM Worldwide, said New Chrysler likely has looked ahead and decided it needed the extra production capacity from the plant, according to the report. In a February 22 statement, U.S. Congresswoman Candice Miller commended New Chrysler's decision to purchase the plant. "With this news that Chrysler is purchasing the plant, we all are very hopeful about [Sterling Heights assembly plant's] future. This plant, and the men and women who work there, are up for any challenge and they will prove that they can help Chrysler build some of the best automobiles the world has ever seen," Ms. Miller said. "I congratulate the city, the City Council and the Automotive Task Force that was formed by the City of Sterling Heights, which I was proud to be a part of, and we look forward to continuing to work to make Chrysler free of government intervention and on the road to economic prosperity," she further said. New Chrysler also elicited praises from U.S. Senator Debbie Stabenow, who said that the auto maker is "moving in the right direction and wants to continue making vehicles in Michigan." "I also applaud the tremendous work by the City of Sterling Heights and their Automotive Task Force. This announcement could not have happened without their involvement, and I was pleased to support their efforts," Ms. Stabenow said in a February 22 statement. 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) CHINA SXAN: December 31 Balance Sheet Upside-Down by $132,486 ------------------------------------------------------------- China Sxan Biotech, Inc. filed its quarterly report on Form 10-Q, showing a net loss of $306,275 on $12 of revenue for the three months ended December 31, 2009, compared with a net loss of $256,904 on $346 of revenue for the same period of 2008. The Company's balance sheet as of Dec. 31, 2009, showed $3.9 million in assets and $4.0 million of debts, for a stockholders' deficit of $132,486. At December 31, 2009, the Company's balance sheet also showed strained liquidity with $1.5 million in current assets available to pay $2.3 million in total current liabilities. A full-text copy of the quarterly report is available for free at: http://researcharchives.com/t/s?573b Based in Beijing, P.R. China, China Sxan Biotech, Inc., has one operating subsidiary, SNX Organic Fertilizers, Inc. SNX Organic Fertilizers, Inc., was formed and registered in the state of Delaware in November 2005. Its core business, through its operating subsidiaries based in China, is to develop, manufacture and market organic fertilizer. CINCINNATI BELL: Lowers Net Income to $89.8 Million in 2009 ----------------------------------------------------------- Cincinnati Bell Inc. filed its annual report on Form 10-K, showing net income of $89.8 million on $1.3 billion of revenue for 2009, compared with net income of 102.6 million on $1.4 billion of revenue for 2008. The Company's balance sheet as of Dec. 31, 2009, showed $2.064 billion in assets and $2.719 billion of debts, for a stockholders' deficit of $654.6 million. As of December 31, 2009, the Company had $2.0 billion of outstanding indebtedness and an accumulated deficit of $3.3 billion. The Company incurred a significant amount of indebtedness and accumulated deficit from the purchase and operation of a national broadband business over the period of 1999 to 2002, which caused outstanding indebtedness and accumulated deficit to reach their respective year-end peaks of $2.6 billion and $4.9 billion at December 31, 2002. This broadband business was sold in 2003. A full-text copy of the annual report is available for free at: http://researcharchives.com/t/s?5731 Headquartered in Cincinnati, Ohio, Cincinnati Bell Inc. (NYSE: CBB) -- http://www.cincinnatibell.com/-- is a full-service regional provider of data and voice communications services over wireline and wireless networks and a full-service provider of data center operations, related managed services and equipment. CINRAM INTL: Bank Debt Trades at 22% Off in Secondary Market ------------------------------------------------------------ Participations in a syndicated loan under which Cinram International, Inc., is a borrower traded in the secondary market at 77.65 cents-on-the-dollar during the week ended Friday, arch 5, 2010, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 0.60 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 190 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. 03, 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. 05, 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 83.43 cents-on-the-dollar during the week ended Friday, March 5, 2010, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 1.00 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 190 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) CITADEL BROADCASTING: Receives Approval to Tap Cash --------------------------------------------------- ABI reports that Citadel Broadcasting Corp. on March 3 received final permission Bankruptcy Judge Burton Lifland to tap cash that its pre-bankruptcy lenders have marked as collateral. Citadel Broadcasting Corporation (OTC BB: CTDB) -- http://www.citadelbroadcasting.com/-- is the third largest radio group in the United States, with a national footprint reaching more than 50 markets. Citadel is comprised of 166 FM stations and 58 AM stations in the nation's leading markets, in addition to Citadel Media, which is one of the three largest radio networks in the United States. Citadel Broadcasting filed for Chapter 11 with 50 affiliates on Dec. 20, 2009, in Manhattan (Bankr. S.D.N.Y. Case No. 09-17422). The Company listed assets of $1.4 billion and debt of $2.5 billion in its Chapter 11 filing. Kirkland & Ellis LLP is serving as legal counsel and Lazard Freres & Co. LLC as financial advisor for the restructuring. Kurtzman Carson Consultants is serving as claims and notice agent. Bankruptcy Creditors' Service, Inc., publishes Citadel Broadcasting Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Citadel Broadcasting Corp. and other affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CITADEL BROADCASTING: Committee Proposes Stroock as Lead Counsel ---------------------------------------------------------------- The Official Committee of Unsecured Creditors in Citadel Broadcasting Corp.'s cases asks the Court for authority to retain Stroock & Stroock & Lavan LLP as its counsel, nunc pro tunc to January 15, 2010. At a January 15, 2010 meeting, the Committee disclosed that it selected Stroock as bankruptcy counsel and appointed The Walt Disney Company as chairman. As the Committee's lead counsel, Stroock will render legal services, which include: (a) advising the Committee with respect to its rights, duties and powers in the Chapter 11 Cases; (b) assisting and advising the Committee in its consultations and negotiations with the Debtors relative to the administration of the Chapter 11 Cases; (c) assisting the Committee in analyzing the claims of the Debtors' creditors and in negotiating with creditors; (d) assisting with the Committee's investigation of the acts, conduct, assets, liabilities and financial condition of the Debtors and of the operation of the Debtors' business; (e) assisting the Committee in its analysis of, and negotiations with, the Debtors or their creditors concerning matters related to, among other things, the terms of the Joint Plan of Reorganization dated February 3, 2010, as may be amended or supplemented and related disclosure statement filed in connection with the Plan and all ancillary documents related thereto; (f) assisting and advising the Committee with respect to its communications with the general creditor body regarding significant matters in the case; (g) assisting and counseling the Committee with respect to its organization and governance; the conduct of its business and meetings; the dissemination of information to its constituency; and other matters as are reasonably deemed necessary to facilitate the administrative activities of the Committee; (h) attending the meetings of the Committee and participate on Committee calls; (i) representing the Committee at all hearings and other proceedings; (j) reviewing and analyzing all applications, orders, statements of operations and schedules filed with the Court and advising the Committee as to their propriety; (k) assisting the Committee in preparing pleadings and applications as may be necessary in furtherance of the Committee's interests and objectives; and (l) performing other legal services as may be required and are deemed to be in the interests of the Committee in accordance with the Committee's powers and duties as set in the Bankruptcy Code. The Debtors will pay Stroock based on its hourly rates: Partners $675 to $995 Counsel $630 to $720 Associates $310 to $630 Paraprofessionals $235 to $305 Litigation Support $175 to $280 In addition, the Debtors will reimburse Stroock for necessary out-of-pocket expenses. Kristopher Hansen, Esq., a member of Stroock, assures the Court that his firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About Citadel Broadcasting Citadel Broadcasting Corporation (OTC BB: CTDB) -- http://www.citadelbroadcasting.com/-- is the third largest radio group in the United States, with a national footprint reaching more than 50 markets. Citadel is comprised of 166 FM stations and 58 AM stations in the nation's leading markets, in addition to Citadel Media, which is one of the three largest radio networks in the United States. Citadel Broadcasting filed for Chapter 11 with 50 affiliates on Dec. 20, 2009, in Manhattan (Bankr. S.D.N.Y. Case No. 09-17422). The Company listed assets of $1.4 billion and debt of $2.5 billion in its Chapter 11 filing. Kirkland & Ellis LLP is serving as legal counsel and Lazard Freres & Co. LLC as financial advisor for the restructuring. Kurtzman Carson Consultants is serving as claims and notice agent. Bankruptcy Creditors' Service, Inc., publishes Citadel Broadcasting Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Citadel Broadcasting Corp. and other affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CITADEL BROADCASTING: Gets Nod for Deloitte as Auditors ------------------------------------------------------- The Bankruptcy Court has authorized Citadel Broadcasting Corp. and its units to employ Deloitte & Touche LLP as their independent auditors and accounting services provider and Deloitte Tax LLP as their tax advisors, each nunc pro tunc to the Petition Date. However, the Court replaced portions of the appendixes of the Deloitte & Touche engagement letter, specifically to Appendix F and Appendix G. The Court's changes can be viewed for free at: http://bankrupt.com/misc/CtdlDeloitteRed.pdf According to the Debtors, they require the services of a capable and experienced accounting and tax advisory firm, like Deloitte & Touche and Deloitte Tax to provide audit, accounting and tax services. They assert that Deloitte & Touche's and Deloitte Tax's resources and capabilities complement the services offered by their other professionals and the Debtors believe Deloitte & Touche's and Deloitte Tax's employment is important to the success of the Chapter 11 cases. Specifically, the Two Firms will provide these services: * Deloitte & Touche will perform an integrated audit of the Debtors' financial statements for the year ending December 31, 2009, and will express an opinion on the effectiveness of the Debtors' internal control over financial reporting; * To the extent not already completed, Deloitte & Touche will review the Debtors' interim financial information in accordance with the Public Company Accounting Oversight Board Standards for each of the quarters in the year ending December 31, 2009, prepared for submission to the Securities and Exchange Commission; * Deloitte & Touche will assist the Debtors with respect to their the accounting and disclosures during and upon emergence from bankruptcy as appropriate; and * Deloitte Tax will provide tax advisory services on federal, state and local tax matters on an as-requested basis related to debt-discharge and other reorganization issues arising in connection with the Chapter 11 case and debt restructuring. The Debtors will pay Deloitte & Touche based on the hours actually expended by each assigned staff member multiplied by the staff member's hourly billing rate. The fees for Deloitte & Touche's services is estimated to be $1,197,500, the Debtors note. The fee structure will remain in place. However, the fees for additional audit-related services not anticipated will be based on these hourly rates: Partners (National Office) $302 Partners/Directors $261 Senior Managers $215 Managers $195 Senior Associates $156 Staff $121 Deloitte & Touche's fees for additional services relating specifically to audit matters associated with bankruptcy issues will be based on these hourly rates: Partners (National Office) $332 Partners/Directors $287 Senior Managers $236 Managers $215 Senior Associates $172 Staff $133 Deloitte & Touche has already been paid $1,100,000 by the Debtors. With regard to tax services, the Debtors have agreed to compensate Deloitte Tax for professional services rendered at these hourly rates: Partners $600 Directors $550 Senior Managers $475 Managers $400 Senior Associates $300 Staff $185 The Debtors will indemnify and hold harmless Deloitte Tax, its subcontractors and its personnel from all claims, except to the extent finally judicially determined to have resulted primarily from the bad faith or intentional misconduct of Deloitte Tax or its subcontractors. John Ruddell, a partner of Deloitte & Touche, and Gregory Wichman, a partner of Deloitte Tax, assure the Court that each of their firms is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Citadel Broadcasting Citadel Broadcasting Corporation (OTC BB: CTDB) -- http://www.citadelbroadcasting.com/-- is the third largest radio group in the United States, with a national footprint reaching more than 50 markets. Citadel is comprised of 166 FM stations and 58 AM stations in the nation's leading markets, in addition to Citadel Media, which is one of the three largest radio networks in the United States. Citadel Broadcasting filed for Chapter 11 with 50 affiliates on Dec. 20, 2009, in Manhattan (Bankr. S.D.N.Y. Case No. 09-17422). The Company listed assets of $1.4 billion and debt of $2.5 billion in its Chapter 11 filing. Kirkland & Ellis LLP is serving as legal counsel and Lazard Freres & Co. LLC as financial advisor for the restructuring. Kurtzman Carson Consultants is serving as claims and notice agent. Bankruptcy Creditors' Service, Inc., publishes Citadel Broadcasting Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Citadel Broadcasting Corp. and other affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CLAIRE'S STORES: Bank Debt Trades at 16% Off in Secondary Market ---------------------------------------------------------------- Participations in a syndicated loan under which Claire's Stores, Inc., is a borrower traded in the secondary market at 84.43 cents- on-the-dollar during the week ended Friday, March 5, 2010, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 1.71 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 190 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. COLONIAL BANCGROUP: Sues FDIC Over Returns; Schulte Hits Back ------------------------------------------------------------- Law360 reports that Schulte Roth & Zabel LLP has blasted as "patently absurd" Federal Deposit Insurance Corp. allegations that the firm is wasting time and running up the bills for the estate of Colonial Bancgroup Inc. Meanwhile Colonial Bancgroup has smacked the Federal Deposit Insurance Corp. with two adversary cases over tax returns, property and insurance proceeds it says belong to its Chapter 11 estate, not to the federal receiver, the FDIC said. Headquartered in Montgomery, Alabama, The Colonial BancGroup, Inc. (NYSE: CNB) was holding company to Colonial Bank, N.A, its banking subsidiary. Colonial bank -- http://www.colonialbank.com/ -- operated 354 branches in Florida, Alabama, Georgia, Nevada and Texas with over $26 billion in assets. On August 14, 2009, Colonial Bank was seized by regulators and the Federal Deposit Insurance Corporation was named receiver. The FDIC sold most of the assets to Branch Banking and Trust, Winston-Salem, North Carolina. BB&T acquired $22 billion in assets and assumed $20 billion in deposits of the Bank. Colonial BancGroup filed for Chapter 11 bankruptcy protection on August 25, 2009 (Bankr. M.D. Ala. Case No. 09-32303). W. Clark Watson, Esq., at Balch & Bingham LLP and Rufus T. Dorsey IV, Esq., at Parker Hudson Rainer & Dobbs LLP, assist the Company in its restructuring effort. The Company listed $45,000,000 in assets and $380,000,000 in debts in its bankruptcy filing. COMMUNITY HEALTH: Bank Debt Trades at 6% Off in Secondary Market ---------------------------------------------------------------- Participations in a syndicated loan under which Community Health Systems is a borrower traded in the secondary market at 93.95 cents-on-the-dollar during the week ended Friday, March 5, 2010, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 0.53 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 May 1, 2014, and carries Moody's Ba3 rating and Standard & Poor's BB rating. The debt is one of the biggest gainers and losers among 190 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. Based in Franklin, Tennessee, Community Health Systems, Inc. -- http://www.chs.net/-- is the largest publicly traded operator of hospitals in the United States in terms of number of facilities and net operating revenues. The company provides healthcare services through these hospitals that it owns and operates in non- urban and selected urban markets throughout the United States. The company also owns and operates home health agencies, including four home health agencies located in markets where it does not operate a hospital. Through its wholly owned subsidiary, Quorum Health Resources, LLC, the company provides management and consulting services to non-affiliated general acute care hospitals located throughout the United States. COMSTOCK HOMEBUILDING: Inks Loan Modification Deal with BofA ------------------------------------------------------------ Comstock Homebuilding Companies Inc. entered into a Loan Modification Agreement with Bank of America, NA, providing for the modification of a certain senior unsecured note in the outstanding principal amount of approximately $3,700,000, plus accrued and unpaid interest, as more particularly described in that certain Revolving Line of Credit Note dated Feb. 22, 2006. Under the terms of the Loan Modification Agreement, Lender agreed that all previously accrued but unpaid interest payments due from the Company to Lender under the Line of Credit will be deferred until Jan. 28, 2011 in exchange for an extension fee of $100,000. Interest only cash payments shall be due from the Company through January 28, 2012, after which interest and certain monthly principal payments shall be due to Lender through the date of maturity of the Line of Credit, currently set at Dec. 28, 2018. Bankruptcy Warning At September 30, 2009, the Company had $94,526,000 in total assets against $91,950,000 in total liabilities. At September 30, 2009, the Company had $152,384,000 in accumulated deficit and shareholders' equity of $2,576,000. In its Form 10-Q filing with the Securities and Exchange Commission for the period ended September 30, 2009, Comstock disclosed that at September 30, 2009, the Company and its subsidiaries had $9.6 million of debt which had either already matured or have payment obligations during the remainder of 2009. Net of the debt related to the Wachovia and M&T Bank foreclosure agreements executed in the third quarter of 2009, the Company is the guarantor of $54.5 million of debt including that of subsidiaries. "As a result, any significant failure to negotiate renewals and extensions to its debt obligations would severely compromise the Company's liquidity and would jeopardize the Company's ability to satisfy its capital requirements. This inability to meet our capital requirements could result in our need to seek bankruptcy protections either for certain subsidiary entities or for Company as a whole," Comstock said. Comstock retained external consultants in the second quarter of 2008 to act as a financial advisor to the Company in exploring debt restructuring and alternatives for raising additional capital for the Company. In connection with the exploration of available debt restructuring alternatives, the Company then elected to cease making certain scheduled interest or principal curtailment payments while it attempted to negotiate modifications or other satisfactory resolutions with its lenders. During 2008 the Company reported several loan covenant violations and notices of default from several of its lenders. The violations and notices led to foreclosures of certain assets and have resulted in certain guarantee enforcement actions being initiated against the Company where no foreclosures have taken place. Many of the Company's loan facilities contain Material Adverse Effect clauses which, if invoked, could create an event of default under those loans. In the event certain of the Company's loans were deemed to be in default as a result of a Material Adverse Effect, the Company's ability to meet its cash flow and debt obligations would be compromised. During the fourth quarter of 2008 the Company discontinued its relationship with its external advisory consultants. The Company continued to negotiate with its lenders into 2009 and has continued to report debt restructurings as they occur. Strategic Realignment Plan Due to the extended nature of the economic conditions affecting the home building industry the Company, in early 2009, formulated and began implementing its Strategic Realignment Plan, a strategy for eliminating debt and settling obligations of the Company with the goal of refocusing the Company's operations on key projects in its core market of Washington, DC and Raleigh, NC while reaching amicable agreements with all of the Company's major creditors before year end 2009 to position the Company for improved operating results in 2010 and beyond. As of September 30, 2009, the company had successfully negotiated settlements with most of its secured lenders regarding a majority of the loans guaranteed by the Company and had reduced the outstanding balance of overall debt from $102.8 million at December 31, 2008, to $83.4 million at September 30, 2009. In most cases the Company was released from the obligations under each subject loan in return for its agreement not to contest the foreclosure of the real estate assets that it wished to dispose of and that secured each subject loan. In certain cases the Company provided the lender a non-interest bearing deficiency note in an amount equal to a small fraction of the original debt with a term of three years. Due to the time required to complete the requisite foreclosures on certain real estate assets, the foreclosure actions were not all complete at September 30, 2009 and will occur in future periods. Fifth Third Bank Forbearance On November 10, 2009, Comstock Homes of Raleigh, LLC, and Comstock Homebuilding Cos. entered into a Forbearance and Conditional Release Agreement with Fifth Third Bank, an Ohio banking corporation, with respect to the $1.3 million outstanding principal under the Borrower's secured Brookfield project loan. Under the terms of the Agreement, the Lender has released the Borrower from its obligations relating to the Loan contemporaneous with the execution by the Borrower of statutory foreclosure waivers allowing for the expeditious foreclosure of the single family building lots secured by the Loan. If the Lender successfully forecloses on the Collateral by February 28, 2010, subject to extension, the Lender shall receive a non-interest bearing unsecured deficiency note in the amount of $25,000 with a three-year term from the Company. The Deficiency Note shall be fully subordinate to the repayment of the secured lenders of the Company's subsidiaries. Should the Lender fail to foreclose on the Collateral on or before February 28, 2010, subject to extension, the Company will not be required to deliver the Deficiency Note but the release issued by the Lender will nevertheless remain effective upon its eventual foreclosure of the Collateral. About Comstock Homebuilding Established in 1985, Comstock Homebuilding Companies, Inc. (Nasdaq: CHCI) -- http://www.comstockhomebuilding.com/-- is a publicly traded, diversified real estate development firm with a focus on a variety of for-sale residential products. The company currently actively markets its products under the Comstock Homes brand in the Washington, D.C. and Raleigh, N.C. metropolitan areas. CONEXANT SYSTEMS: Prices $175 Million Senior Secured Note --------------------------------------------------------- Conexant Systems Inc. had priced, and entered into an agreement to issue and sell, $175 million aggregate principal amount of 11.25% senior secured notes due 2015 in a private placement that is exempt from the registration requirements of the Securities Act of 1933, as amended. The Notes have been offered only to qualified institutional buyers in reliance on Rule 144A under the Securities Act, and outside the United States only to non-U.S. investors pursuant to Regulation S. The Notes will not be registered under the Securities Act or any state securities laws and may not be offered or sold in the United States absent an effective registration statement or an applicable exemption from registration requirements or a transaction not subject to the registration requirements of the Securities Act or any state securities laws. The Company also intent to offer 14 million shares of its common stock in an underwritten public offering. The Common Stock will be offered by the Company pursuant to a registration statement on Form S-3 previously filed and declared effective by the Securities and Exchange Commission. In connection with the Notes Offering and the Common Stock Offering, the Company announced its intent to commence a tender offer to purchase for cash any and all of the Company's outstanding 4.00% Convertible Subordinated Notes due March 2026. The Company's obligation to purchase the Convertible Notes in the tender offer is conditioned upon, among other things, the consummation of the Notes Offering and the Common Stock Offering in an amount sufficient to pay the total consideration owed to any tendering holders of Convertible Notes. The tender offer will be made pursuant to an Offer to Purchase, which will more fully set forth the terms and conditions of the tender offer. About Conexant Newport Beach, California-based Conexant Systems, Inc. (NASDAQ: CNXT) -- http://www.conexant.com/-- is a fabless semiconductor company. Conexant's comprehensive portfolio of innovative semiconductor solutions includes products for imaging, audio, embedded-modem, and video applications. Outside the United States, the Company has subsidiaries in Northern Ireland, China, Barbados, Korea, Mauritius, Hong Kong, France, Germany, the United Kingdom, Iceland, India, Israel, Japan, Netherlands, Singapore, and Israel. As of January 1, 2010, the Company had total assets of $273.747 million against total liabilities of $340.397 million, resulting in shareholders' deficit of $66.650 million. CONEXANT SYSTEMS: Launches Comprehensive Refinancing Plan --------------------------------------------------------- Conexant Systems Inc. reported a comprehensive refinancing plan designed to improve its balance sheet and address its liquidity needs. The company expects that this refinancing plan will provide sufficient financial flexibility to tender for its outstanding 4% convertible subordinated notes due 2026 and to realize the benefits associated with its business and growth opportunities. Conexant has priced $175 million of new 11.25% senior secured notes due 2015, and is launching an offering of approximately 14 million shares of its common stock. The senior secured notes have already been placed with institutional investors, and the company expects to complete the equity offering in the next several days. The proceeds from these offerings, together with available cash, will be used by the company to tender for any and all of its outstanding $232 million convertible subordinated notes, which are "puttable" in March 2011. Under the terms of a tender offer commenced today, holders of convertible subordinated notes will be offered par value in cash. The tender offer will be contingent upon the successful completion of the new debt and equity offerings and is expected to be completed by March 30, 2010. "Last year we concluded the major operational restructuring of Conexant with the sale of our DSL business," said Scott Mercer, Conexant chairman and chief executive officer. "Since then, completing the financial restructuring of our company has been one of our highest priorities. Once we successfully close our new debt and equity offerings and retire our convertible debt, we will have a stronger, more sustainable capital structure. At that point our company transformation will be complete, and we will be focused exclusively on driving profitable growth by expanding our market- leading position in solutions for imaging, audio, embedded modem, and video surveillance applications. In addition, we intend to use our core expertise in analog and mixed-signal design to take advantage of new opportunities in adjacent markets." A full-text copy of the Loan and Security Agreement is available for free at http://ResearchArchives.com/t/s?5721 About Conexant Newport Beach, California-based Conexant Systems, Inc. (NASDAQ: CNXT) -- http://www.conexant.com/-- is a fabless semiconductor company. Conexant's comprehensive portfolio of innovative semiconductor solutions includes products for imaging, audio, embedded-modem, and video applications. Outside the United States, the Company has subsidiaries in Northern Ireland, China, Barbados, Korea, Mauritius, Hong Kong, France, Germany, the United Kingdom, Iceland, India, Israel, Japan, Netherlands, Singapore, and Israel. As of January 1, 2010, the Company had total assets of $273.747 million against total liabilities of $340.397 million, resulting in shareholders' deficit of $66.650 million. CONSECO INC: Reports $85.7 Million Net Income for 2009 ------------------------------------------------------ Conseco Inc. filed its annual report on Form 10-K, showing net income of $85.7 million on $4.3 billion of revenue for 2009, compared with a net loss of $1.1 billion on $4.2 billion of revenue for 2008. The Company's balance sheet as of Dec. 31, 2009, showed $30.3 billion in assets, $26.8 billion of debts, and $3.5 billion of stockholders' equity. Moody has assigned a "Caa1" rating on the Company's senior secured debt with a positive outlook. "In Moody's view, an obligation rated "Caa1" is in poor standing and there may be present elements of danger with respect to principal or interest." A full-text copy of the annual report is available for free at: http://researcharchives.com/t/s?5733 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 the Company's bankruptcy reorganization which became effective on September 20, 2003. 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. 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 41.42 cents-on-the-dollar during the week ended Friday, March 5, 2010, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 0.54 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. 2012, and carries Moody's B1 rating and Standard & Poor's B+ rating. The debt is one of the biggest gainers and losers among 190 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. CTI FOODS: Moody's Affirms Corporate Family Rating at 'B2' ---------------------------------------------------------- Moody's Investors Service has affirmed the B2 corporate family rating of CTI Foods Holding Co, LLC. At the same time, a B2 rating was assigned to the proposed first lien $40 million revolver due 2014 and $146 million term loan due 2015 and a Caa1 rating was assigned to the second lien $34 million term loan due 2015. These ratings are assigned subject to the review of the final amendments to the existing facilities and will replace the previously existing ratings. The rating outlook has been changed to stable from negative. The affirmation of the B2 CFR follows CTI's recent announcement that the business will be acquired by Littlejohn & Co., LLC. The transaction is expected to be funded via an equity contribution by Littlejohn, the rollover of existing management equity, issuance of a $10 million holdco PIK note and through the amendment and extension of the existing credit facilities. In addition, Moody's anticipates that the company plans to raise an additional $15 million of first lien term loans to help fund a planned expansion of its soup capacity. The B2 rating reflects CTI's elevated post acquisition financial leverage, meaningful customer concentrations and current geographic focus in the western United States. CTI's relationship with its top customer is believed to support the majority of its earnings. While this concentration constrains the rating, Moody's views CTI's key customer relationships as mutually beneficial and should be protected by high switching costs and the long term nature of the existing relationships. Further, the rating is supported by the stability of CTI's core operating performance which benefits from its contractual right to pass along commodity price increases in many of its product offerings. Moody's anticipates that growth in its newer products, particularly offerings such as beans and soups, should offset the lower meat sales that will likely continue in light of the weak economy in North America given the maturity of the meat products. The stable outlook recognizes the increased headroom expected in the financial covenants in CTI's bank facilities as a result of its improved operating performance and expected changes to covenant levels in the proposed amendments. Further, the stable outlook is a reflection of CTI's profitable volume growth, consistent operating margins and the expectation that CTI will continue to generate solid cash flows from operations. For additional information on CTI, please refer to the credit opinion on Moodys.com. These ratings/outlook were affirmed/revised: -- B2 corporate family rating; and -- B2 probability of default rating. The rating outlook was revised to stable from negative. These ratings were assigned: -- B2 (LGD3, 45%) to the $40 million first lien revolver due 2014; -- B2 (LGD3, 45%) to the $146 million first lien term loan due 2015; and -- Caa1 (LGD6, 90%) to the $35 million second lien term loan due 2015 The ratings on the existing term loan facilities will be removed upon execution of the proposed amendment. The last rating action on CTI was on April 15, 2009, when the rating outlook was changed to negative from stable. Headquartered in Wilder, Idaho, CTI Foods Holding Co., LLC, manufactures food products primarily for the quick service restaurant industry. Revenues for the twelve months ended January 2, 2010, were approximately $500 million. DEED AND NOTE: Sec. 341(a) Meeting Scheduled for March 25 --------------------------------------------------------- The U.S. Trustee for Region 14 will convene a meeting of creditors in Deed And Note Traders, L.L.C.'s Chapter 11 case on March 25, 2010, at 12:30 p.m. The meeting will be held at James A. Walsh Courthouse, 38 S. Scott Avenue, Suite 140, Tucson, AZ. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Tucson, Arizona-based Deed and Note Traders, L.L.C., filed for Chapter 11 bankruptcy protection on February 12, 2010 (Bankr. D. Ariz. Case No. 10-03640). Scott D. Gibson, Esq., at Gibson, Nakamura & Green, PLLC, assists the Company in its restructuring effort. The Company estimated its assets and debts at $1,000,001 to $100,000,000. DEED AND NOTE: Court Extends Filing of Schedules Until March 15 --------------------------------------------------------------- The Hon. Eileen W. Hollowell of the U.S. Bankruptcy Court for the District of Arizona extended, at the behest of Deed And Note Traders, LLC, the deadline for the filing of schedules of assets and liabilities and statement of financial affairs until March 15, 2010. The Debtor said that it needs additional time to compile the financial information necessary to complete its schedules and statement of financial affairs. The date of the requested continuance of March 15, 2010, is more than 10 days prior to the scheduled first meeting of creditors. Tucson, Arizona-based Deed and Note Traders, L.L.C., filed for Chapter 11 bankruptcy protection on February 12, 2010 (Bankr. D. Ariz. Case No. 10-03640). Scott D. Gibson, Esq., at Gibson, Nakamura & Green, PLLC, assists the Company in its restructuring effort. The Company estimated its assets and debts at $1,000,001 to $100,000,000. DEED AND NOTE: Files List of 20 Largest Unsecured Creditors ----------------------------------------------------------- Deed And Note Traders, L.L.C., has filed with the U.S. Bankruptcy Court for the District of Arizona a list of its 20 largest unsecured creditors. A full-text copy of the Debtor's list of creditors is available for free at http://bankrupt.com/misc/azb10-03640.pdf Tucson, Arizona-based Deed and Note Traders, L.L.C., filed for Chapter 11 bankruptcy protection on February 12, 2010 (Bankr. D. Ariz. Case No. 10-03640). Scott D. Gibson, Esq., at Gibson, Nakamura & Green, PLLC, assists the Company in its restructuring effort. The Company estimated its assets and debts at $1,000,001 to $100,000,000. DEED AND NOTE: Gets OK to Hire Gibson Nakamura as Bankr. Counsel ---------------------------------------------------------------- Deed And Note Traders, LLC, sought and obtained authorization from the U.S. Bankruptcy Court for the District of Arizona to employ Gibson, Nakamura & Green, P.L.L.C., as bankruptcy counsel. GNG will: (a) give the Debtor legal advice with respect to its powers and duties as a debtor in the continued operation of its business and management of its property; (b) prepare necessary applications, notices, answers, orders, reports and other legal papers; (c) assist the Debtor in the negotiation of a plan of Reorganization satisfactory to creditors and parties-in- interest and to prepare a disclosure statement which will be submitted to creditors and parties-in-interest after it has been approved by the Court; and (d) perform other legal services for the Debtor which may be necessary in the Debtor's bankruptcy case. Scott D. Gibson, an attorney at GND, says that the firm will be paid based on the hourly rates of its personnel: Attorneys $295-$395 Legal Assistant $140 Mr. Gibson, assured the Court that GND is "disinterested" as that term is defined in Section 101(14) of the Bankruptcy Code. Tucson, Arizona-based Deed and Note Traders, L.L.C., filed for Chapter 11 bankruptcy protection on February 12, 2010 (Bankr. D. Ariz. Case No. 10-03640). The Company estimated its assets and debts at $1,000,001 to $100,000,000. DENNY'S CORP: Morgan Stanley Holds 8.2% of Common Stock ------------------------------------------------------- Morgan Stanley disclosed that as of December 31, 2009, it may be deemed to beneficially own 7,968,109 shares or roughly 8.2% of the common stock of Denny's Corporation. Based in Spartanburg, South Carolina, Denny's Corporation (NASDAQ: DENN) -- http://www.dennys.com/-- is one of America's largest full-service family restaurant chains, consisting of 1,289 franchised and licensed units and 256 company-owned units, with operations in the United States, Canada, Costa Rica, Guam, Mexico, New Zealand and Puerto Rico. At December 30, 2009, the Company had total assets of $312.627 million against $440.125 million in total liabilities, resulting in $127.498 million shareholders' deficit. The December 30 balance sheet showed strained liquidity: The Company had total current assets of $58.345 million against $92.108 million in total current liabilities. DENNY'S CORP: Wellington Management Holds 5.35% of Common Stock --------------------------------------------------------------- Wellington Management Company, LLP, in its capacity as investment adviser, may be deemed to beneficially own 5,169,812 shares or roughly 5.35% of the common stock of Denny's Corporation. Based in Spartanburg, South Carolina, Denny's Corporation (NASDAQ: DENN) -- http://www.dennys.com/-- is one of America's largest full-service family restaurant chains, consisting of 1,289 franchised and licensed units and 256 company-owned units, with operations in the United States, Canada, Costa Rica, Guam, Mexico, New Zealand and Puerto Rico. At December 30, 2009, the Company had total assets of $312.627 million against $440.125 million in total liabilities, resulting in $127.498 million shareholders' deficit. The December 30 balance sheet showed strained liquidity: The Company had total current assets of $58.345 million against $92.108 million in total current liabilities. DENNY'S CORP: Vanguard Group Holds 8.08% of Common Stock -------------------------------------------------------- The Vanguard Group, Inc., disclosed that as of December 31, 2009, it may be deemed to beneficially own 7,814,266 shares or roughly 8.08% of the common stock of Denny's Corporation. Based in Spartanburg, South Carolina, Denny's Corporation (NASDAQ: DENN) -- http://www.dennys.com/-- is one of America's largest full-service family restaurant chains, consisting of 1,289 franchised and licensed units and 256 company-owned units, with operations in the United States, Canada, Costa Rica, Guam, Mexico, New Zealand and Puerto Rico. At December 30, 2009, the Company had total assets of $312.627 million against $440.125 million in total liabilities, resulting in $127.498 million shareholders' deficit. The December 30 balance sheet showed strained liquidity: The Company had total current assets of $58.345 million against $92.108 million in total current liabilities. DETROIT: Warns of Bankruptcy as It Prepares Bond Sale ----------------------------------------------------- Darrell Preston at Bloomberg News reports that the city of Detroit warned investors of the risk of bankruptcy as it prepares to sell $250 million of bonds to help close its budget deficit. According to the Bloomberg report, the city told bondholders in a March 2 preliminary offering statement that while it hasn't taken steps to reorganize under Chapter 9, it may have few other options if its financial condition worsens. Detroit is facing a deficit estimated at $280 million. Only two cities -- Menasha, Wisconsin, and Vallejo, California -- have sought bankruptcy protection during the past two years. DIPAK DESAI: Files for Bankruptcy to Halt Civil Lawsuits -------------------------------------------------------- According to Las Vegas Review-Journal, Dr. Dipak Desai filed for bankruptcy putting a halt on all civil lawsuits against him in state court including a first medical malpractice trial involving a patient with hepatitis C infection against him. Dr. Desai, a doctor, listed $22 million in assets -- including $2 million house at Red Rock Country Club, $1.1 million in bank accounts and more than $18 million in various investments and businesses -- and $1.2 million liabilities, the report says. DOLLAR THRIFTY: Swings to $45 Million Net Income in 2009 -------------------------------------------------------- Dollar Thrifty Automotive Group, Inc., last week filed with the Securities and Exchange Commission its annual report on Form 10-K for the year ended December 31, 2009. DTAG swung to a net income of $45,022,000 for 2009 from a net loss of $346,718,000 for 2008. DTAG reported net income of $1,215,000 for 2007, $51,692,000 for 2006 and $76,355,000 for 2005. Total revenues were $1,546,249,000 for 2009, from $1,697,993,000 for 2008, $1,760,791,000 for 2007, $1,660,677,000 for 2006 and $1,507,554,000 for 2005. At December 31, 2009, the Company had total assets of $2,645,937,000 against total debt of $1,727,810,000. Stockholders' equity was $393,914,000 at December 31, 2009, compared to $208,420,000 at end-2008. The Company believes that its cash generated from operations, cash balances and secured vehicle financing programs are adequate to meet its liquidity requirements during 2010. The Company has asset-backed medium term note maturities totaling $400 million that amortize ratably from January 2010 through June 2010, and an additional $100 million in maturities in December 2010. The Company has adequate cash on hand to fund these maturities without the need for additional financing, although it intends to pursue additional financing capacity on an opportunistic basis. Despite improving conditions in the asset backed medium term note market, the Company expects that new financing will require a substantially higher collateral enhancement rate than its current medium term notes, but will have similar interest rates. Although the financial markets were constrained during the first half of 2009, the fleet financing markets improved during the second half of 2009 and into 2010, and the Company believes it will be able to access funding to add capacity for future growth. In addition, based on its current cash position which was enhanced by the equity offering in the fourth quarter of 2009, the Company has the ability to meet such higher collateral requirements, and believes it would be able to refinance or replace its asset backed medium term notes with other debt upon their maturity or in the event of an early amortization. A full-text copy of DTAG's annual report on Form 10-K is available at no charge at http://ResearchArchives.com/t/s?5727 About Dollar Thrifty Automotive Dollar Thrifty Automotive Group, Inc. is headquartered in Tulsa, Oklahoma. Driven by the mission "Value Every Time," the Company's brands, Dollar Rent A Car and Thrifty Car Rental, serve value- conscious travelers in over 70 countries. Dollar and Thrifty have over 600 corporate and franchised locations in the United States and Canada, operating in virtually all of the top U.S. and Canadian airport markets. The Company's approximately 6,400 employees are located mainly in North America, but global service capabilities exist through an expanding international franchise network. In November 2009, Standard & Poor's Ratings Services raised its corporate credit rating of Dollar Thrifty to 'B-' from 'CCC', in light of the Company's improved operating and financial performance that began in mid-2009. Moody's Investors Service also upgraded Dollar Thrifty's Probability of Default Rating to 'B3' from 'Caa2' and Corporate Family Rating to 'B3' from 'Caa3'. E*TRADE FIN'L: Posts 3rd Consecutive Annual Net Loss ---------------------------------------------------- E*TRADE Financial Corporation has filed with the Securities and Exchange Commission its annual report on Form 10-K for the year ended December 31, 2009. E*TRADE reported its third consecutive annual net loss, posting $1,297,762,000 for 2009, from $511,790,000 for 2008 and $1,441,754,000 for 2007. Total net revenue was $2,217,016,000 for 2009, from $1,925,596,000 for 2008 and $161,726,000 for 2007. At December 31, 2009, the Company had total assets of $47,366,485,000 against total liabilities of $43,616,930,000, resulting in shareholders' equity of $3,749,555,000. A full-text copy of the Company's annual report on From 10-K is available at no charge at http://ResearchArchives.com/t/s?5728 The E*TRADE FINANCIAL (NASDAQ: ETFC) family of companies provides financial services including trading, investing and related banking products and services to retail investors. Securities products and services are offered by E*TRADE Securities LLC (Member FINRA/SIPC). Bank products and services are offered by E*TRADE Bank, a Federal savings bank, Member FDIC, or its subsidiaries. * * * The Company's current senior debt ratings are Caa3 by Moody's Investor Service, CC/CCC-(3) by Standard & Poor's and B (high) by Dominion Bond Rating Service. The Company's long-term deposit ratings are Ba3 by Moody's Investor Service, CCC+ (developing) by Standard & Poor's and BB by DBRS. EMMIS COMMS: Inks New Employment Agreement with Richard Cummings ---------------------------------------------------------------- Emmis Communications Corp. entered into a new one-year employment agreement with Richard F. Cummings to serve as President of Emmis Radio Programming effective March 1, 2010. Mr. Cummings' employment agreement will automatically renew each year following the initial one-year term for additional one-year terms unless either the company or Mr. Cummings provides the other with written notice of non-renewal prior to December 31 of the initial or subsequent term, as applicable. Under the agreement, Mr. Cummings' base salary is $446,500 and his annual incentive compensation target is 60% of his base salary. The annual incentive bonus will be paid, if at all, based upon achievement of certain performance goals to be determined by the company. The Company retains the right to pay such annual incentive compensation in cash or shares of the company's Class A common stock. Mr. Cummings will continue to receive an automobile allowance and will continue to be reimbursed for up to $5,000 per year in premiums for life or other insurance and retains the right to participate in all of our employee benefit plans for which he is otherwise eligible. He will also be entitled to severance equal to his previous base salary in the event he is not offered substantially similar employment upon the expiration of the term and his employment terminates. If Mr. Cumming is entitled to severance, he will be offered a four-year part-time programming role with total payments over the four years of $530,000. The switch from full-time to part-time employment is designed to constitute a 'separation from service' within the meaning of section 409A of the Internal Revenue Code. A full-text copy of the Company's employment agreement is available for free at http://ResearchArchives.com/t/s?5723 About Emmis Communications Headquartered in Indianapolis, Indiana, Emmis Communications Corporation owns and operates radio stations and magazine publications in the U.S. and in Europe. As of November 30, 2009, the Company had $513,406,000 in total assets against $497,070,000 in total liabilities and $140,459,000 in Series A Cumulative Convertible Preferred Stock. As of November 30, the Company had accumulated deficit of $697,805,000 and total shareholders' deficit of $173,894,000. * * * As reported by the Troubled Company Reporter on June 22, 2009, Moody's Investors Service changed Emmis Communications' senior secured term loan rating to Caa2 from Ca following the completion of a series of Dutch auction transactions pursuant to a March 3, 2009 credit facility amendment. The revised rating reflects the Company's capital structure, pro-forma for an roughly $78 million reduction of term loan debt which has resulted from these transactions. In addition, Moody's removed the "/LD" designation previously appended to the Probability of Default rating on April 27, 2009. In April, Moody's cut its corporate family rating on the Company to 'Caa2'. In May, S&P raised its corporate credit rating on the Company to 'CCC+'. In June, S&P withdrew the 'CCC+' Corp. Credit Rating at the Company's request. ENNIS HOME: Expects to Emerge from Bankruptcy Protection -------------------------------------------------------- Sarah De Crescenzo at The Porterville Recorder says Ennis Home Inc. said it expects to emerge from bankruptcy following the approval of its disclosure statement explaining its plan of reorganization in February 2010. As reported by the Troubled Company Reporter on Feb. 25, 2010, the Company received approval from the U.S. Bankruptcy Court for the Eastern District of California of the adequacy of the disclosure statement for its amended Plan dated as of February 12, 2010. The Bankruptcy Court approval of the Debtor's disclosure statement allows the Debtor to commence the solicitation of votes for confirmation of its Plan. The deadline for returning completed ballots is 5:00 p.m. EST on March 18, 2010. Objections, if any, to confirmation of the Plan must be received by the Court and notice parties no later than March 18, 2010. A hearing to consider confirmation of the Plan is scheduled for April 2, 2010, at 11:00 a.m. A full-text copy of the Disclosure Statement is available for free at http://bankrupt.com/misc/EnnisHomes_AmendedDS.pdf About Ennis Homes Ennis Homes Inc. is a homebuilder in California. Ennis Homes was founded in 1979 by Ben Ennis and has become one of the largest family owned homebuilders in the Central Valley,. Son Brian Ennis serves as President and daughter Pam Ennis acts as Vice President- Marketing of the Company. Ennis Homes Inc. filed for Chapter 11 on Feb. 3, 2009 (Bankr. E.D. Calif. Case No. 09-10848). Hagop T. Bedoyan, Esq., and Jacob L. Eaton, Esq., represent the Debtor as counsel. In its petition, Ennis Homes listed between $100 million and $500 million each in assets and debts. ERICKSON RETIREMENT: Addresses Disclosure Statement Objections -------------------------------------------------------------- Various parties filed responses to the Disclosure Statement accompanying the Third Amended Joint Plan of Reorganization of Erickson Retirement Communities LLC and its debtor affiliates. The objectors include the prepetition lenders, ERC Investment Holdings, LLC, referred as "Coastwood," and former employees. The objecting lenders include PNC Bank, National Association; Capmark Finance, Inc.; Bank of America, N.A.; The Bank of New York Mellon formerly known as The Bank of New York; Manufacturers and Traders Trust Company also known as M&T Bank; and Wells Fargo Bank National Association. BoNY complains that the Disclosure Statement fails to (i) provide the holders of STAMPS with detailed information regarding the use of the proceeds of the Subordinated Taxable Adjustable Mezzanine Put Securities Series 2007 or STAMPS; and (ii) accurately describe the STAMPS and the applicable subordination provisions as contained in the STAMPS Indenture. ERC Investment Holdings or Coastwood acknowledges that the Debtors agreed, at the Dec. 22 auction, that the losing bidder would be entitled to a fee representing 10% of the difference between the prevailing bid and $275 million, consistent with the Bid Procedures Order. Coastwood, however, contends that although the Disclosure Statement describes the Fee, it fails to provide creditors with sufficient and accurate information about the Fee and its payment. Redwood emerged as the winning bidder with an all-cash bid of $365 million at the Auction. Coastwood was the unsuccessful bidder entitled to consideration in exchange for its performance throughout the Auction process. In separate filings, former employees of the Debtors ask the Court to deny approval of the Disclosure Statement, asserting that it describes a Plan that is facially unconfirmable under Section 1129. The Former Employees allege that the Amended Plan and Disclosure Statement contain "death trap" provisions, including a language that any objection filed by a beneficiary to a global settlement discussed among the Debtors, the Official Committee of Unsecured Creditors and the Debtors' Lender will disqualify a Beneficiary from participating in a Liquidating Creditors Trust under the Amended Plan. Debtors Respond The Debtors filed an omnibus reply to the objections asserted against the Disclosure Statement in further support of the Disclosure Statement Motion on March 4, 2010. Counsel to the Debtors, Vincent P. Slusher, Esq., at DLA Piper LLP, in Dallas, Texas, reminds the Court that the Amended Plan and Disclosure Statement set forth a transaction and allocation of proceeds, which represents a complete settlement of the most significant issue among the major parties-in-interest in the Debtors' bankruptcy cases. The Debtors note that they have invested time and effort with certain lenders, the HCP Entities, the University of Texas A&M, Morgan Stanley Entities, National Senior Campus and the Creditors Committee in crafting a plan that allows them to consummate a sale of their assets to the Redwood Entities. "Failure to approve the Disclosure Statement and ultimately confirm the Amended Plan would endanger, if not imperil the sale," he contends. Mr. Slusher further asserts that the Disclosure Statement's description of the valuation of the Debtors' assets, the methodology of valuation, and the allocation of the Debtors' assets constitutes "adequate information" pursuant to Section 1125. The Debtors maintain that the Disclosure Statement and Plan represents a reasonable compromise of all outstanding issues regarding valuation and allocation of assets and thus, propose to include language in the Disclosure Statement to that effect. Moreover, in an effort to provide the disclosure required by the Bankruptcy Code, the Debtors note that they (i) included language in the Disclosure Statement provided by the objecting parties, (ii) worked with the objecting parties to craft further language for inclusion in the Disclosure Statement, or (iii) are proposing language for inclusion in the Disclosure Statement. Contrary to the Former Employees' objection, the Debtors assert that the Plan does allocate value in the form of the Creditor Liquidating Trust to general unsecured creditors, including the Employees. The Debtors further propose that the Former Employees receive these distributions under the Amended Plan: * 43% of the Employees will receive 100% of their claims as priority claims; * 65% of the Employees will receive at least 50% as a priority claims; and * every employee will receive either three months of severance or notice. The Debtors relate that they have continue to work closely with each of Capmark, BofA, M&T Bank, PNC Bank and Wilmington Trust to resolve any potential objections that may arise. Contrary to the Strategic Entities' objections, the Debtors insist that the information regarding the allocation of the Transaction Proceeds contained in the Disclosure Statement constitutes adequate information under Section 1125. In this light, the Debtors ask the Court to overrule the objections to, and approve, the Disclosure Statement. The Chapter 11 Plan Erickson Retirement Communities and its debtor affiliates presented to the United States Bankruptcy Court for the Northern District of Texas their Second Amended Joint Plan of Reorganization and accompanying Disclosure Statement on February 16, 2010. The Amended Plan incorporates, among others, settlements between the Debtors and parties-in-interests in the Debtors' Chapter 11 cases. The Plan estimate $135,799,000 in total value that will be available for distribution. Based on the Liquidation Analysis, the Debtors estimate a 12.9% recovery for ERC and Erickson Construction LLC under an orderly liquidation and only an 8.2% recovery for the same Debtor entities under a forced liquidation. A Liquidation Analysis on the other Debtor Landowners also show that the Landowners are expected to recover more from an orderly liquidation than from a forced liquidation. Full-text copies of the Third Amended Plan and Disclosure Statement are available for free at: http://bankrupt.com/misc/ERC_ThirdAmPlan.pdf http://bankrupt.com/misc/ERC_ThirdAmDS.pdf About Erickson Retirement The Baltimore, Maryland-based Erickson Retirement Communities LLC owns 20 continuing care retirement communities in 11 states. Among Erickson's 20 communities, eight are completed, 11 are open although in construction, and one is in development. They have 23,000 residents in total. Erickson, along with affiliates, filed for Chapter 11 on Oct. 19, 2009 (Bankr. N.D. Tex. Case No. 09-37010). DLA Piper LLP (US) serves as counsel to the Debtors. BMC Group Inc. serves as claims and notice agent. Houlihan, Lokey, Howard & Zoukin, Inc., is also serving as investment and financial consultant. Alvarez & Marsal is serving as restructuring adviser. As of September 30, 2009, on a book value basis, ERC had approximately $2.7 billion in assets, including $2.2 billion of property and equipment, and $3.0 billion in liabilities. Liabilities include $195.8 million on the revolving credit, $347.5 million on construction credit, $64 million in accounts payable, $47.8 million in subordinate debt, and $475 million in purchase option deposits. Bankruptcy Creditors' Service, Inc., publishes Erickson Retirement Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Erickson Retirement Communities LLC and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) ERICKSON RETIREMENT: Amends Plan to Provide for $356MM Split ------------------------------------------------------------ Erickson Retirement Communities, LLC, and its debtor affiliates delivered to the U.S. Bankruptcy Court for the Northern District of Texas their Third Amended Joint Plan of Reorganization and accompanying Disclosure Statement on March 1, 2010. The Amended Plan and Disclosure Statement provide more information on the auction for the Debtors' assets held last December 22, 2009, allocation of the sales proceeds, modified claims treatment as well as financial projections. Auction Results, Sale Proceeds Allocation Two parties qualified to bid for the Debtors' assets at the December 22 Auction -- Redwood-ERC Senior Living Holdings, LLC and ERC Investment Holdings, LLC, an entity formed by affiliates of Coastwood Senior Housing Partners, LLC, Kohlberg Kravis Roberts & Co., and Beecken Petty O'Keffe & Company, LLC. The Debtors' advisors engaged in extensive negotiations with National Senior Campuses, Inc. and the project lenders that resulted in the NSC's and NSC Not-for-Profit organizations' offer of 10-year management agreements to all bidders. Among other terms, the New Management Agreements will comply with Rev. Proc. 97-13, 1997-1 C.B. 632 and will not affect the status of an NFP under Section 501(c)(3) of the Internal Revenue Code. At the start of the Auction, the Debtors and their advisors deemed Coastwood's initial bid, consisting of cash, Term Loan A securities, and subordinated preferred securities to be higher or better than Redwood's stalking horse bid. Thus, to ensure the continued participation of both Redwood and Coastwood in the Auction, the Debtors, after consulting with their advisors and constituencies, agreed to pay an auction fee of $9 million, to the unsuccessful bidder. After 18 hours of negotiations and 25 rounds of bidding, Redwood was determined to be the successful bidder at the Auction with a final all cash bid price of $365 million. Thus, as the unsuccessful bidder, Coastwood is entitled to a $9 million Auction Fee upon the occurrence of the effective date of the Amended Plan. Coastwood intends to file a motion asking the Bankruptcy Court's approval of the Auction Fee payment as an administrative priority expense of the Debtors' estates. ERC Executive Vice President and General Counsel Gerald Doherty relates that the Amended Plan provides for an allocation of the $365 million purchase price, which is based on the percentage of proceeds allocated to each entity pursuant to the all-cash proposal provided by Redwood in a December 18, 2009 term sheet: Gross Cash Sales proceeds $365,000,000 NSC Allocation (9,000,000) ---------------- $356,000,000 ================ A breakdown of the $356 million amount per Debtor entity has been summarized: Purchase Price Campus Allocation % Total ------------ --------------- --------------- Ashburn Campus, LLC $68,775,000 19.30% Concord Campus, L.P. 59,866,000 16.80% Dallas Campus, LP 26,554,000 7.50% Houston Campus, L.P. 12,689,000 3.60% Kansas Campus, LLC - 0.00% Littleton Campus, LLC 55,850,000 15.70% Novi Campus, LLC 36,563,000 10.30% Warminster Campus, L.P. - 0.00% --------------- --------------- 260,297,000 73.10% Corporate 95,702,000 26.90% --------------- --------------- $355,999,000 =============== If a creditor objects to the proceeds allocation provided under the Amended Plan and the objection is not resolved through negotiations, the Debtors will seek the Court's intervention. Moreover, Redwood Holdings, Redwood-ERC Management, LLC, Redwood- ERC Development, LLC, Redwood-ERC Properties, LLC, Redwood-ERC Kansas, LLC, ERC, Erickson Group LLC, Concord Campus, Dallas Campus, Houston Campus, Ashburn Campus LLC, Littleton Campus, Novi Campus, Kansas Campus LLC, Tinton Falls Campus II LLC, Senior Campus Care LLC, Naperville Campus, Warminster Campus , Point View Campus II LLC, Hingham Campus LLC, Lincolnshire Campus, LLC, and Erickson Construction entered into a Second Amended and Restated Master Purchase and Sale Agreement, whereby Redwood is contemplated to acquire substantially all of the assets of the Debtor Sellers relating to the business and the equity interests in Warminster LP and Warminster GP, collectively known as the "Transferred Landowners," free and clear of all liens and liabilities except for certain permitted encumbrances. In addition, the Redwood Entities will acquire all Initial Entrance Deposits of the Debtors' retiree residents with respect to campus Tallgrass Creek, subject to the conditions set forth under the Amended Plan. Warminster Campus may use all of its Initial Entrance Deposits escrowed after November 27, 2009 pursuant to the Court's order granting additional protections to Initial Entrance Deposits. Holders of certain Allowed Claims will be assigned an interest up to a total of $7 million of the Cedar Crest Receivable, which refers to a receivable in the books of Point View Campus II, LLC in an amount equal to (i) the Initial Entrance Deposits not yet received by Cedar Crest, plus (ii) the Initial Entrance Deposits used by Cedar Crest to fund reserves under its bonds, less (iii) the outstanding principal interest and fees due to PPF MF 3900 Gracefield Road, LLC, for $25,000,000. At closing of the sale, Redwood will directly pay $9 million to the NSC. In turn, the NSC will transfer $2 million out of the $9 million to a transaction implementation pool or TIP under the Amended Plan. The NSC will retain the remaining $7 million and all payments the NSC and NSC-NFPs have received from the Debtors for reimbursement of professional fees and expenses incurred in the Debtors' Chapter 11 cases, without further Court order and free and clear of all claims by the Debtors, the lenders of construction loans of the Debtors, the Redwood Entities, and any other person. Redwood-ERC Development, LLC, or Redwood Devco will acquire all assets and properties of Erickson Construction LLC other than its cash on hand. The Redwood Entities through Redwood-ERC Management LLC or Redwood ManagementCo will manage Linden Ponds, Sedgebrook, and Monarch Landing collectively known as the "Bonded Communities" during the 90-day period after the confirmation date of the Amended Plan. During this period, Redwood will negotiate with the applicable NFPs and indenture trustees to reach a resolution regarding the Bonded Communities. If the parties reach a resolution, the Debtors will facilitate a definitive agreement regarding a restructuring plan for the Bond Communities. Absent a deal, ERC's interests in the Bond Communities will be resolved pursuant to Section 554 of the Bankruptcy Code, and Redwood will have no further obligation to manage the Bond Communities. Pursuant to the Second Amended MSPA, Redwood will not purchase all Initial Entrance Deposits, which have been placed in escrow pursuant to the Court's order granting additional protections to the Initial Entrance Deposits and title to all real property, building, fixtures, and any other improvements made to the Bond Communities. As part of its restructuring, Dallas Campus will sell to Redwood, free and clear of all liens and liabilities, all of its assets and properties upon (i) receipt by the holders of Texas A&M Note of $3,440,000 and (ii) receipt by Bank of America, N.A., as collateral agent and administrative agent for the holders of Dallas Campus' Construction Loan Claims, of $19,496,000 in cash; allowance of BofA's right to set off $34,531 held in deposit pursuant to an Expense Reserve Account pursuant to the Dallas Construction Loan Claim documents without further Court approval against the portion of the Dallas Construction Loan Claims that is unsecured; and $282,000 from the Cedar Crest Receivable. Texas A&M Note refers to a promissory note for $4.4 million granted by Dallas Campus to a board of regents of Texas A&M University System. Similarly, Kansas Campus will sell to Redwood, free and clear of all liens and liabilities, all of its assets and properties upon receipt by PNC Bank, National Association, as collateral and administrative agent for the holders of Kansas Campus' Construction Loan Claims, $2,778,000 from the TIP. All guarantees of Novi Campus' Construction Loan and Junior Loan will be terminated and released pursuant to the Amended Plan. Warminster Campus' Initial Entrance Deposits collected prior to November 27, 2009, will be transferred to the TIP. If Wells Fargo Bank, National Association, as indenture trustee for Ann's Choice's $81,945,000 Bucks County Industrial Development Authority Retirement Community Revenue Bonds Series 2005 A and B, is not willing to facilitate the transfer, the Debtors reserve their right to seek Court intervention. Mr. Doherty reveals that the Debtors and the agents to the Construction Loans have discussed a proposed global settlement agreement with the Official Committee of Unsecured Creditors that is subject to Plan confirmation. The Global Settlement and the Amended Plan intend to transfer all claims, causes of action, counterclaims and other defenses of the Debtors to a Liquidating Creditor Trust. Mr. Doherty also notes that the Debtors will first apply the DIP financing funds of up to $600,000 to the Creditors Committee's professional fees and an additional maximum consideration of up to $500,000 will be made available from the TIP for the payment of the Committee's professional fees up to an allowed amount of $1.1 million. Modified Claims Treatment Pursuant to the Amended Plan, Erickson Group Class 4 Guaranty Claims is entitled to vote on the Amended Plan. Senior Campus Class 4 Corporate Revolver Guaranty Claim is impaired and is thus, deemed to reject the Amended Plan. Holders of Corporate Revolver Guaranty Claims will not receive any distribution under the Plan. General Unsecured Claims consist of three subclasses and may receive a participation interest in the recovery per subclass under the Liquidating Trust: (1) Tier A Subclass - Trade Claims will receive a pro rata share of the first $7 million of dividends paid by the Liquidating Trust. (2) Tier B Subclass - Construction Claims will not receive any distribution from the Liquidating Trust until the $9 million Trade Dividend has been paid in full. Thereafter, Tier B will participate in all dividends from the Liquidating Trust pro rata, with other Tier B participants only up to $2 million, and with Tier C participants pro rata, subject to a proration trigger event. (3) Tier C Subclass - Mezzanine/Sale-Lease Back Claims will not participate in dividends from the Liquidating Trust until the occurrence of the proration trigger event. Upon the payment of the Trade Dividend to Tier A in full, Tier A will not be entitled to participate in any further distributions from the Liquidating. However, if as a result of future distributions to participants in Tier B and Tier C, a Tier B/C Percentage Recovery, which is the quotient of the total amount of distributions made by the Liquidating Trust to Tiers B and C participants, equals or exceeds the Tier A Percentage Recovery, all subsequent distributions from the Liquidating Trust will then be made to Tier A, Tier B and Tier C pro rata. With respect to Warminster Campus Class 5 Purchase Option Deposit Refund Agreement Claims, an amendment to a Purchase Option Deposit Refund Agreement will provide that if Ann's Choice exercises its option to purchase its campus under that agreement and the going concern value is less than the $75 million dollar amount of the purchase option deposit, Redwood will pay the amount of that shortfall to Ann's Choice out of Initial Entrance Deposits, up to a maximum amount of $10 million. The Purchase Option Deposit Refund Agreement refers to a purchase option agreement among ERC, Warminster Campus and ERC. Warminster Campus GP's Class 3 Corporate Revolver Guaranty Claims will not receive any distribution under the Amended Plan. Financial Projections In conjunction with the Amended Plan, the Debtors prepared financial projections for May 2010 through the end of 2014. The projections assume a Plan Effective Date of April 30, 2010. Expenses incurred as a result of the Debtors' Chapter 11 cases are assumed to be paid upon the Effective Date. If the Debtors do not emerge from Chapter 11 by April 30, 2010, additional bankruptcy expenses are expected to be incurred until the time as a Plan is confirmed. These expenses could significantly impact the Debtors' results of operations and cash flows, Mr. Doherty relates. The Debtors project a net operating income of $29 million for 2011, $38 million for $2012, $34 million for 2013, and $30 million for 2014. A copy of the Financial Projections is available for free at: http://bankrupt.com/misc/ERC_FinancialProjections.pdf Plan Supplement The Debtors remind the Court that they entered into a settlement agreement with MSRESS III Dallas Campus, L.P. and MSRESS III Denver Campus, LLC, the terms of which agreement will be filed as a Plan Supplement. The MSRESS III Entities will receive $1 million cash from the TIP and the net proceeds of a real property known as Littleton Out-Parcel over $6 million, which will be split between the MSRESS III Entities and Capmark Finance, Inc., as agent under Littleton Campus' construction loan for the benefit of the holders of the loan as allocated to repayment of Littleton Campus' obligations owed to the MSRESS III Entities. The Debtors also intend to explain how funds that are collected on account of Cedar Crest Receivable will flow through to Holders of Allowed Claims in documents that will be included in the Plan Supplement. Full-text copies of ERC's Third Amended Plan and Disclosure Statement are available for free at: http://bankrupt.com/misc/ERC_ThirdAmPlan.pdf http://bankrupt.com/misc/ERC_ThirdAmDS.pdf Blacklined versions of the Third Amended Plan and Disclosure Statement are available for free at: http://bankrupt.com/misc/ERC_3rdAmPlan_blacklined.pdf http://bankrupt.com/misc/ERC_3rdAmDS_blacklined.pdf The Court will consider approval of the Disclosure Statement on March 5, 2010. Debtors File Witness & Exhibits Lists for March 5 Hearing The Debtors submitted to the Bankruptcy Court lists of witnesses and exhibits for a hearing scheduled for March 5, 2010, to consider these motions: * The Disclosure Statement for the Debtors' Third Amended Joint Plan of Reorganization * The Debtors' Motions to Approve Disclosure Statement and Solicitation Protocol * Hess Corporation's Motion for reconsideration of the Utility Injunction Order * The Debtors' DIP Financing Motion. The Debtors may call on these witnesses in support of the motions: (1) Paul Rundell, (2) Gerry Doherty, (3) Matthew Niemann, (4) any witness identified by any other party, and (5) Rebuttal witnesses, if necessary The Debtors will submit certain exhibits for the March 5 hearing, a list of which is available for free at: http://bankruptc.com/misc/ERC_ExhibitList The Debtors will submit at the March 5 hearing certain exhibits, a list of which is available for free at: http://bankrupt.com/misc/ERC_Mar4ExhibitList.pdf The Committee reserves its rights to (i) call any witness designated by another party, and (ii) amend and add witnesses, including rebuttal witnesses as they are determined to be relevant or helpful to the Court. Similarly, the Committee reserves its right to offer into evidence any exhibit designated by another party and any rebuttal and impeachment exhibits and reserves its right to amend and supplemental the exhibit list. About Erickson Retirement The Baltimore, Maryland-based Erickson Retirement Communities LLC owns 20 continuing care retirement communities in 11 states. Among Erickson's 20 communities, eight are completed, 11 are open although in construction, and one is in development. They have 23,000 residents in total. Erickson, along with affiliates, filed for Chapter 11 on Oct. 19, 2009 (Bankr. N.D. Tex. Case No. 09-37010). DLA Piper LLP (US) serves as counsel to the Debtors. BMC Group Inc. serves as claims and notice agent. Houlihan, Lokey, Howard & Zoukin, Inc., is also serving as investment and financial consultant. Alvarez & Marsal is serving as restructuring adviser. As of September 30, 2009, on a book value basis, ERC had approximately $2.7 billion in assets, including $2.2 billion of property and equipment, and $3.0 billion in liabilities. Liabilities include $195.8 million on the revolving credit, $347.5 million on construction credit, $64 million in accounts payable, $47.8 million in subordinate debt, and $475 million in purchase option deposits. Bankruptcy Creditors' Service, Inc., publishes Erickson Retirement Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Erickson Retirement Communities LLC and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) ERICKSON RETIREMENT: Ex-Employee Wants Separate Class for Claims ---------------------------------------------------------------- Randolph Emerson Craig, a former employee of the Debtors, asks the Court to direct the Debtors to amend the Disclosure Statement to: (i) include a separate class for former employees entitled to severance payments; and (ii) set forth the priority for a separate class for former employees entitled to severance. Mr. Craig's request is in light of his contention that the Disclosure Statement makes no reference to the claims of about 94 laid off employees owed severance and health insurance payments per severance contracts entered into with the Debtors. In an objection filed with the Court, Mr. Craig asserted that the Disclosure Statement and the Amended Plan appear to classify those severance obligations as general unsecured claims. Pursuant to Section 1122 of the Bankruptcy Code, a particular claim will be included in a class only if it is significantly similar in nature to the other claims in that class. In this context, severance payments are entitled in whole or in part priority as designated in Section 507 of the Bankruptcy Code, Mr. Craig argues. Creditors with severance payment claims are employees and thus, a uniquely vulnerable class of creditors, he insists. The creditors owed severance payments are all individual persons with no corporate identity and their losses are suffered by their families and minor dependents, he points out. The employees owed severance by Erickson Retirement Communities LLC are a unique class in the particular case, in that they were assured that severance payments would continue despite its Chapter 11 case, Mr. Craig emphasizes. About Erickson Retirement The Baltimore, Maryland-based Erickson Retirement Communities LLC owns 20 continuing care retirement communities in 11 states. Among Erickson's 20 communities, eight are completed, 11 are open although in construction, and one is in development. They have 23,000 residents in total. Erickson, along with affiliates, filed for Chapter 11 on Oct. 19, 2009 (Bankr. N.D. Tex. Case No. 09-37010). DLA Piper LLP (US) serves as counsel to the Debtors. BMC Group Inc. serves as claims and notice agent. Houlihan, Lokey, Howard & Zoukin, Inc., is also serving as investment and financial consultant. Alvarez & Marsal is serving as restructuring adviser. As of September 30, 2009, on a book value basis, ERC had approximately $2.7 billion in assets, including $2.2 billion of property and equipment, and $3.0 billion in liabilities. Liabilities include $195.8 million on the revolving credit, $347.5 million on construction credit, $64 million in accounts payable, $47.8 million in subordinate debt, and $475 million in purchase option deposits. Bankruptcy Creditors' Service, Inc., publishes Erickson Retirement Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Erickson Retirement Communities LLC and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) ERICKSON RETIREMENT: Lenders Object Sec. 1104 Examiner ------------------------------------------------------ In renewed objections, PNC Bank, National Association and Wilmington Trust FSB ask the Court to deny the joint request of Strategic Ashby Ponds Lender LLC; Strategic Concord Landholder, LP; HCP ER6, LP; HCP ER2, LP; HCP ER3, LP; MSRESS III Dallas Campus, L.P.; MSRES III Denver Campus, LLC; and MSRESS III Kansas Campus, L.P, to appoint an examiner in the Debtors' Chapter 11 cases under Section 1104 of the Bankruptcy Code. PNC Bank is administrative and collateral agent for senior secured project loans made to Debtors Concord Campus, LP, and Ashburn Campus, LLC. Wilmington Trust is administrative agent on behalf of lenders under a July 27, 2007 Credit Agreement. A. PNC Bank PNC Bank complains that the Strategic Entities seem to seek appointment of an examiner in order to reallocate sales proceeds in the hopes that a reallocation would result in payment to them. PNC Bank reminds the Court that the Strategic Entities are "sophisticated investors who accepted the risks of subordinated financing for the possibility of a high 14% annual return." Counsel to PNC Bank, Daniel I. Morenoff, Esq., at K&L Gates LLP, in Dallas, Texas, reveals that Concord Campus owed the Concord Senior Lenders $70,000,000 under a Construction Loan Agreement. Strategic Concord Landholder, LP, thus entered into a Ground Lessor Tri-Party Agreement, as a condition to the Concord Senior Lenders' consent to an alleged conveyance of the collateral land to Strategic Concord for $25,000,000, and leaseback of the same land under a ground lease. Similarly, Ashburn Campus owed the Ashburn Senior Lenders $125,000 under a Construction Loan Agreement. Strategic Ashby Ponds Lenders, LLC, entered into a Subordination and Standstill Tri-Party Agreement as a condition to the Ashburn Senior Lenders' consent to subordinate financing by Strategic Ashby Ponds for $50,000,000. PNC Bank emphasizes that under the Subordination Agreements, the Strategic Entities agreed that they lack standing to take any action to collect their subordinated indebtedness until the senior secured indebtedness of the Concord and Ashburn Senior Lenders are paid in full. Simply put, Mr. Morenoff says, the Strategic Entities' request may not be heard because they have waived their rights when they entered into Subordinated Agreements. Moreover, PNC Bank reminds the Court, the senior secured indebtedness of the Concord and Ashburn Senior Lenders has not been paid in full to date. B. Wilmington Trust Counsel to Wilmington Trust, William L. Medford, Esq., at Greenberg Traurig, in Dallas, Texas, clarifies that Section 1104 states that the primary function of an examiner is to investigate "allegations of fraud, dishonesty, incompetence, misconduct, mismanagement, or irregularity in the management of the affairs of the debtor of or by current or former management of the debtor." He points out that the Mezzanine Lenders have not even alleged misconduct, instead, they wish to have an examiner appointed simply to perform a valuation and allocation analysis of the Debtors. Thus, Wilmington Trust insists that the Examiner Motion is an inappropriate attempt by the Mezzanine Lenders to shift the cost of a valuation fight onto the Debtors' estates and thus, in essence, onto the secured lenders. "This is a cost properly borne by the Mezzanine Lenders themselves, and they should not be allowed to selfishly straddle the Debtors' estates with that cost through the appointment of an examiner for a role outside of the scope envisioned by the Bankruptcy Code," Mr. Medford asserts. Moreover, Wilmington Trust believes that a global settlement is imminent thus an appointment of an examiner at this time is inappropriate. However, if an examiner is appointed in the Debtors' Chapter 11 cases to value substantially all of the Debtors' assets in connection with a potential sale or to allocate the proceeds of that sale among the Debtors' estates, the Court should require the cost of the appointment of an examiner to be borne by all of the Debtors' estates, Wilmington Trust contends. Strategic Entities React The Strategic Entities, at the Court's directive, filed a supplemental brief on the mandatory nature of the examiner request and on its standing to seek an examiner appointment. Counsel to the Strategic Entities, G. Martin Green, Esq., at Baker Botts L.L.P., in Dallas, Texas, asserts that the $5 million unsecured debt threshold of Section 1104(c)(2) is clearly met by ERC, Ashburn Campus and Concord Campus and thus, the appointment of an examiner is mandatory for these three cases. Mr. Green adds that documents on the record show that the Strategic Entities collectively hold claims, totaling $75 million against Concord Campus and Ashburn Campus and that those claims are backed by certain guarantees of ERC. The Strategic Entities, he asserts, are thus "parties-in-interest" with respect to Ashburn Campus, Concord Campus and ERC under Section 1104(c) and have a pecuniary interest in the other Debtors' cases to the extent any of the sales proceeds are proposed to be allocated to those Debtors. Against this backdrop, the Strategic Entities do have standing to seek an examiner appointment, Mr. Green emphasizes. Any suggestion that the Subordination Agreements somehow limit the Strategic Entities' standing to seek appointment of an examiner is simply wrong, Mr. Green further asserts. He insists that (i) the right to bring an examiner motion is a right granted under the Bankruptcy Code, and (ii) the provisions relied on by the Senior Lenders are non-specific and do not explicitly mention the exercise of any rights under the Bankruptcy Code whatsoever, he points out. The Strategic Entities reiterate that they seek an examiner appointment to assist in the proper allocation of the sale proceeds among the 16 Debtors' estates. They believe that based on an objective evaluation, allocation to Concord Campus would be higher than Ashburn Campus. In this light, the Strategic Entities are particularly concerned that the proposed allocation under the Plan actually allocates over $8.9 million more to Ashburn Campus than to Concord Campus -- $68.775 million is allocated to Ashburn Campus while $59.866 million is allocated to Concord Campus. Against this backdrop, the Strategic Entities ask the Court to grant the Examiner Motion. About Erickson Retirement The Baltimore, Maryland-based Erickson Retirement Communities LLC owns 20 continuing care retirement communities in 11 states. Among Erickson's 20 communities, eight are completed, 11 are open although in construction, and one is in development. They have 23,000 residents in total. Erickson, along with affiliates, filed for Chapter 11 on Oct. 19, 2009 (Bankr. N.D. Tex. Case No. 09-37010). DLA Piper LLP (US) serves as counsel to the Debtors. BMC Group Inc. serves as claims and notice agent. Houlihan, Lokey, Howard & Zoukin, Inc., is also serving as investment and financial consultant. Alvarez & Marsal is serving as restructuring adviser. As of September 30, 2009, on a book value basis, ERC had approximately $2.7 billion in assets, including $2.2 billion of property and equipment, and $3.0 billion in liabilities. Liabilities include $195.8 million on the revolving credit, $347.5 million on construction credit, $64 million in accounts payable, $47.8 million in subordinate debt, and $475 million in purchase option deposits. Bankruptcy Creditors' Service, Inc., publishes Erickson Retirement Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Erickson Retirement Communities LLC and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) ERICKSON RETIREMENT: MSRESS Gets Nod for Rule 2004 Probe -------------------------------------------------------- MSRESS III Dallas Campus, L.P., MSRESS III Denver Campus, L.L.C., and MSRESS III Kansas Campus, L.P., obtained a ruling from the Bankruptcy Court granting them their request to conduct examination of Erickson Retirement Communities LLC and its units pursuant to Rule 2004 of the Federal Rules of Bankruptcy Procedure. The Debtors agreed to MSRESS's request to conduct a Rule 2004 examination. The Debtors are directed to provide the MSRESS III Entities access to the data room established by the Debtors and an index of the documents contained in the data room upon execution of a confidentiality agreement between the parties. The Debtors' professionals, including Houlihan Lokey Howard & Zukin Capital, are also directed to assist the MSRESS III Entities in locating documents responsive to the document requests set forth under the MSRESS III Entities' Rule 2004 Motion. If documents responsive to the MSRESS III Entities' document requests are not located in the Debtors' data room, the Debtors are directed to produce those documents to counsel for the MSRESS III Entities. Responsive documents which the Debtors must perform electronic searches to locate are to be produced no later than February 26, 2010. The MSRESS III Entities assert that they collectively hold claims, totaling $67,500,000, against the Debtors. Thomas A. Connop, Esq., at Locke Lord Bissell & Lidell LLP, in Dallas, Texas, notes that the Debtors' Joint Plan of Reorganization seems to contemplate that the senior lenders on the retirement communities would foreclose and extinguish the junior debt, including the MSRESS III Entities' interest in the retirement communities of the Debtors. In this light, the MSRESS III Entities sought permission o examine the Debtors to determine whether there are agreements or understandings between the Debtors and the not-for-profit entities, which are the borrowers under Community Loans, or between the Debtors and Redwood Capital Investment LLC, which have not been fully disclosed. The Debtors have agreed to provide access to certain documents and information which the MSRESS III Entities will review, Mr. Connop says. However, the MSRESS III Entities seek additional documents and information beyond that which the Debtors have agreed to provide, he notes. About Erickson Retirement The Baltimore, Maryland-based Erickson Retirement Communities LLC owns 20 continuing care retirement communities in 11 states. Among Erickson's 20 communities, eight are completed, 11 are open although in construction, and one is in development. They have 23,000 residents in total. Erickson, along with affiliates, filed for Chapter 11 on Oct. 19, 2009 (Bankr. N.D. Tex. Case No. 09-37010). DLA Piper LLP (US) serves as counsel to the Debtors. BMC Group Inc. serves as claims and notice agent. Houlihan, Lokey, Howard & Zoukin, Inc., is also serving as investment and financial consultant. Alvarez & Marsal is serving as restructuring adviser. As of September 30, 2009, on a book value basis, ERC had approximately $2.7 billion in assets, including $2.2 billion of property and equipment, and $3.0 billion in liabilities. Liabilities include $195.8 million on the revolving credit, $347.5 million on construction credit, $64 million in accounts payable, $47.8 million in subordinate debt, and $475 million in purchase option deposits. Bankruptcy Creditors' Service, Inc., publishes Erickson Retirement Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Erickson Retirement Communities LLC and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) ERICKSON RETIREMENT: Strategic Wants Relief From Deposition ----------------------------------------------------------- Counsel to Strategic Ashby Ponds Lender LLC and Strategic Concord Landholder, LP, G. Martin Green, Esq., at Baker Botts L.L.P., in Dallas, Texas, tells the Court that on February 22, 2010, the Debtors served notices, seeking to take the depositions of the Strategic Entities' corporate representatives on March 1, 2010, pursuant to Rule 7030 of the Federal Rules of Bankruptcy Procedure and Rule 30(b)(6) of the Federal Rules of Civil Procedure. Under the Deposition Notices, the Debtors seek to depose the representatives on these topics: (1) Any review, analysis or statement relating to any value assigned to or associated with Ashby Ponds project Maris Grove project; (2) Any consideration or analysis performed in connection with the Strategic Entities' options as purported creditors of the Ashby Ponds and Maris Grove Projects, including to any analysis of their purported right to buy-out PNC Bank, National Association under subordination agreements, submit a credit bid or engage in a similar transaction; (3) Any review, analysis or statement relating to any allocation assigned to or associated with the Ashby Ponds and Maris Grove projects; and (4) The allegations and arguments asserted in Strategic Entities' Examiner Appointment Motion, including any exhibits or evidence the Strategic Entities intend to present at the hearing on the Examiner Motion and on the Disclosure Statement. Mr. Green discloses that he has been informed by the Debtors' counsel that they intend to seek a ruling on the issues of valuation and allocation in connection with the adequacy hearing of the Disclosure Statement of the Debtors' Second Amended Joint Plan of Reorganization. He further reveals that the Court entered an order on February 23, 2010, abating certain motions pending confirmation of the Amended Plan, including the Official Committee of Unsecured Creditors' Motion to Determine Appropriate Allocation of Value under the Amended Plan. In this light, the Strategic Entities ask the Court to grant them relief from the Deposition Notices. Mr. Green asserts that any Court ruling in the context of approval of the Disclosure Statement regarding the appropriateness of Debtors' proposed allocation of sales proceeds would be premature and is without sufficient notice for all parties in the issue to be heard. The Disclosure Statement itself does not state that the Debtors seek a ruling on the issues covered by the Deposition Notices at the Disclosure Statement hearing, he points out. Moreover, Mr. Green contends, the purpose of the Disclosure Statement hearing will primarily be to determine whether it contains adequate information under Section 1125 of the Bankruptcy Code, and the information sought by the Deposition Notices is not relevant to the adequacy of information in the Disclosure Statement. Rule 26 of the Federal Rules of Civil Procedure permits discovery of documents that are relevant to a live dispute that is procedurally and actually before the court. In this context, Rule 9014 of the Federal Rules of Bankruptcy Procedure has not yet been triggered and the Strategic Entities have not objected to the Disclosure Statement or the Amended Plan, Mr. Green says. In addition, the hearing on the Examiner Motion has occurred and the Debtors have no further reason or occasion to put on related evidence, Mr. Green argues. The Strategic Entities also ask the Court to enter a scheduling order to govern the litigation leading up to the confirmation proceedings in light of the confused nature of the confirmation hearings. At the Strategic Entities' request, the Court is set to convene a telephonic hearing on the Strategic Entities' request on February 26, 2010. Debtors Respond The Debtors' counsel, Vincent P. Slusher, Esq., at DLA Piper LLP, in Dallas, Texas, asserts that the Debtors only seek to resolve in an expeditious manner the issues raised by the Strategic Entities concerning the adequacy of the valuation, the method of valuation, and the allocation of the Debtors' assets contained in the Disclosure Statement. The Debtors aver that they have produced or made available much of the information relevant to these issues and will have complete the production of all relevant documents by February 26, 2010. The Strategic Entities should have no problem meeting the same deadline, Mr. Slusher notes. As the Court has recognized, it is in the best interests of all parties, the regulators, and most importantly, the retiree residents to resolve the noted issues as expeditiously as possible, Mr. Slusher states. Under these circumstances, the Debtors ask the Court to deny the request of the Strategic Entities for relief from the depositions. About Erickson Retirement The Baltimore, Maryland-based Erickson Retirement Communities LLC owns 20 continuing care retirement communities in 11 states. Among Erickson's 20 communities, eight are completed, 11 are open although in construction, and one is in development. They have 23,000 residents in total. Erickson, along with affiliates, filed for Chapter 11 on Oct. 19, 2009 (Bankr. N.D. Tex. Case No. 09-37010). DLA Piper LLP (US) serves as counsel to the Debtors. BMC Group Inc. serves as claims and notice agent. Houlihan, Lokey, Howard & Zoukin, Inc., is also serving as investment and financial consultant. Alvarez & Marsal is serving as restructuring adviser. As of September 30, 2009, on a book value basis, ERC had approximately $2.7 billion in assets, including $2.2 billion of property and equipment, and $3.0 billion in liabilities. Liabilities include $195.8 million on the revolving credit, $347.5 million on construction credit, $64 million in accounts payable, $47.8 million in subordinate debt, and $475 million in purchase option deposits. Bankruptcy Creditors' Service, Inc., publishes Erickson Retirement Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Erickson Retirement Communities LLC and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) FANNIE MAE: Bondholders Shouldn't Assume Govt. Guarantee -------------------------------------------------------- Dawn Kopecki at Bloomberg News reports that House Financial Services Committee Chairman Barney Frank said that Fannie Mae and Freddie Mac bondholders shouldn't assume the government will make them whole on their investments as Congress disbands the companies. Mr. Frank said the public role of Fannie Mae and Freddie Mac, as well as the U.S. government's implied backing of the companies' $1.7 trillion in debt, should be clarified by lawmakers to remove ambiguity. "Please don't think this is federally guaranteed, I don't think it is, I don't think it should be, I don't feel any obligation to bail you out," Mr. Frank said. Congress will "certainly not" extend any new protections to bond and mortgage-security investors beyond what exists. 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. Conservatorship 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. As reported by the Troubled Company Reporter, the U.S. government took direct responsibility for Fannie Mae and Freddie Mac, placing the government sponsored enterprises under conservatorship on September 7, 2008. James B. Lockhart, director of Federal Housing Finance Agency, said that Fannie Mae and Freddie Mac share the critical mission of providing stability and liquidity to the housing market. Between them, the Enterprises have $5.4 trillion of guaranteed mortgage-backed securities (MBS) and debt outstanding, which is equal to the publicly held debt of the United States. Among the key components of the conservatorship, the FHFA, as conservator, assumed the power of the Board and management. About Fannie Mae Fannie Mae -- http://www.fanniemae.com/-- is a government- sponsored enterprise that was chartered by Congress in 1938. Fannie Mae securitizes mortgage loans originated by lenders in the primary mortgage market into mortgage-backed securities, which can then be bought and sold in the secondary mortgage market. Fannie Mae also participates in the secondary mortgage market by purchasing mortgage loans and mortgage-related securities, including the Fannie Mae MBS, for its own mortgage portfolio. In addition, Fannie Mae makes other investments that increase the supply of affordable housing. Under its charter, Fannie Mae may not lend money directly to consumers in the primary mortgage market. Although Fannie Mae is a corporation chartered by the U.S. Congress, and although its conservator is a U.S. government agency and Treasury owns its senior preferred stock and a warrant to purchase its common stock, the U.S. government does not guarantee its securities or other obligations. Conservatorship As reported by the Troubled Company Reporter, the U.S. government took direct responsibility for Fannie Mae and Freddie Mac, placing the government sponsored enterprises under conservatorship on September 7, 2008. James B. Lockhart, director of Federal Housing Finance Agency, said that Fannie Mae and Freddie Mac share the critical mission of providing stability and liquidity to the housing market. Between them, the Enterprises have $5.4 trillion of guaranteed mortgage-backed securities (MBS) and debt outstanding, which is equal to the publicly held debt of the United States. Among the key components of the conservatorship, the FHFA, as conservator, assumed the power of the Board and management. FIRST AMERICAN: Moody's Assigns 'Ba2' Corporate Family Rating ------------------------------------------------------------- Moody's Investors Service has assigned first-time corporate family and probability of default ratings of (P)Ba2 to The First American Corporation's Information Solutions Company. Concurrently, Moody's assigned a (P)Ba2 rating to ISC's proposed $350 Senior Secured Term Loan. The rating outlook is stable. The provisional (P) ratings are prospective in nature and are based on the assumption that The First American Corporation completes the planned spin-off of its financial services businesses (mainly its title insurance and specialty insurance reporting segments) into a separate public company during 2010. Upon completion of the spin-off, the remaining First American company will be comprised of the Information Solutions business (referred to as ISC). ISC will have a capital structure consisting of a proposed $500 million secured credit facility and $350 million secured term loan. Assignment of definitive ratings will be subject to completion of the spin-off, a review of the final capital structure (including more detailed terms and conditions of the proposed debt instruments), the company's liquidity position and an assessment of its ability to remain in compliance with all terms and conditions governing the credit agreement (including financial maintenance covenants), and near- term financial performance of the company in light of 2010 expectations. The (P)Ba2 CFR reflects the company's leading market position within the mortgage settlement services market, long-standing relationships with several of the largest financial institutions, solid financial performance through economic cycles, and an increasingly diversified business model consisting of proprietary data analytics (e.g., loan performance and fraud detection) and risk mitigation services (e.g., credit services, employer services, and litigation support). The rating is constrained, however, by the company's high revenue concentration (approximately 70% real estate related), high customer concentration (with its top 10 clients accounting for about half of total revenue), and low geographic diversity (with substantially all of its revenue generated in the U.S.). A short-term speculative grade liquidity rating of (P)SGL-1 has also been assigned, reflecting ISC's very good internal and external liquidity following the spin-off, including an expected cash balance of about $460 million and cash flow from operations that should be more than sufficient to fund necessary capital expenditures, working capital requirements and mandatory debt amortization over the next twelve months. The company is expected to have external liquidity in the form of its $500 million revolving credit facility that expires in 2012. However, in connection with the potential purchase of the remaining Experian interest in the First American Real Estate Solutions LLC joint venture during 2010, the company may incur additional debt related to the $318 million purchase price. Moody's expects the company to be adequately within, and maintain, compliance with its two financial covenants (a debt-to-EBITDA leverage test and a minimum debt service coverage test). The stable rating outlook reflects the company's solid operating performance amidst the economic downturn and weak housing market, supported by the strength of the company's customer base, its proprietary data assets, significant operating leverage, and the growing diversity of revenue streams outside of mortgage originations. In addition, the stable outlook considers Moody's expectation that management will maintain conservative financial policies with a leverage target not exceeding 3x on a sustained basis. These first-time ratings/assessments were assigned: * Corporate Family Rating -- (P)Ba2 * Probability of Default Rating -- (P)Ba2 * $350 Million Senior Secured Term Loan due 2016 -- (P)Ba2 (LGD-3, 42%) * Speculative Grade Liquidity Rating of (P)SGL-1 Information Solutions Company, headquartered in Santa Ana, California, is a leading provider of property and mortgage data and analytics products and solutions. The company provides outsource solutions in mortgage risk analytics; property, credit and employment information. Revenues for the twelve months ended December 31, 2009, were approximately $2 billion. FLOWSERVE CORPORATION: Moody's Raises Corp. Family Rating to 'Ba1' ------------------------------------------------------------------ Moody's Investors Service upgraded Flowserve Corporation's corporate family rating to Ba1 from Ba2, its probability of default rating to Ba2 from Ba3, and the rating for its senior secured credit facility to Baa3 from Ba1. The ratings upgrade reflects the company's demonstrated ability to produce relatively robust operating results through challenging market conditions while maintaining strong credit metrics. The ratings outlook is stable. Upgrades: Issuer: Flowserve Corporation -- Corporate Family Rating, Upgraded to Ba1 from Ba2 -- Probability of Default Rating, Upgraded to Ba2 from Ba3 -- Senior Secured Bank Credit Facility, Upgraded to Baa3 (LGD 2, 19%) from Ba1 (LGD2, 18%) Flowserve recorded relatively stable top line results with modestly stronger operating margins in 2009. This performance compared very favorably to diversified manufacturing peers and contributed to further improve the company's already strong key credit metrics and its excellent liquidity position. While shipments from its order backlog have supported its results through the global downturn, the success of the company's multi- year transformation of its business has also been evident. Flowserve, a leading provider of flow control systems, has geared its business towards higher growth end-markets, aftermarket services and value-added products. These attributes should help contain top-line pressures in 2010 as reduced volumes flow from lower backlog levels (down 16% from 2008). Despite pricing pressures, benefits from realignment initiatives and the strength of its aftermarket business should enable margins to remain relatively stable. Key constraints within Flowserve's rating include the likelihood that its operating results will deteriorate through the near term, relatively narrow product diversification with considerable exposure to highly cyclical end-markets, concentration of its debt capital in relatively short term bank debt and the potential that increased shareholder returns or acquisition activity may eventually consume a portion of its debt capacity. The stable outlook incorporates the likelihood that Flowserve's financial performance may modestly deteriorate through the near term, offset by its strong credit metrics which provide ample flexibility to absorb any such deterioration. Sustained metrics associated with an upgrade consideration would include Debt/ EBITDA below 2.5x and EBITA/ Interest above 4.0x. Additionally, an upgrade would require that the company improve its debt maturity profile. Sustained metrics associated with a ratings downgrade would include Debt/ EBITDA above 3.0x with EBITA/ Interest coverage below 3.0x. Moody's most recent rating action was on April 30, 2009, when Moody's upgraded Flowserve's corporate family rating to Ba2 from Ba3. Headquartered in Irving, Texas, Flowserve is a leading provider of pumps, valves and mechanical seals as well as related services to various end markets globally. Revenue for 2009 totaled roughly $4.4 billion. FORD MOTOR: Files Form 10-K; Reports $2.7 Billion Net Income ------------------------------------------------------------ On February 25, 2010, Ford Motor Company filed its annual report on Form 10-K, showing net income of $2.7 billion on $105.89 billion of sales for 2009, compared with a net loss of $14.77 billion on $129.16 billion of sales for 2008. The Company's balance sheet as of Dec. 31, 2009, showed $194.9 billion in assets and $201.4 billion of debts, for a stockholders' deficit of $6.5 billion. Ford reported lower net sales in North America -- $50.5 billion in 2009, compared with $53.4 billion in 2008. Ford, however, reported a 15.3% market share in the United States in 2009, up 1.1 percentage points from 14.2% in 2008. A full-text copy of the annual report is available for free at: http://researcharchives.com/t/s?56f7 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 198,000 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 December 31, 2009, the Company had outstanding $3 billion of 6.50% Junior Subordinated Convertible Debentures due 2032 and $140 million of deferred interest. The $3 billion of Subordinated Convertible Debentures are due to Ford Motor Company Capital Trust II, a subsidiary trust, and are the sole assets of Trust II. On March 4, 2009, Ford deferred future interest payments on its 6.50% Junior Subordinated Convertible Debentures due January 15, 2032, beginning with the April 15, 2009 quarterly interest payment. As reported by the Troubled Company Reporter on Nov. 4, 2009, Moody's Investors Service upgraded the senior unsecured rating of Ford Motor Credit Company LLC to B3 from Caa1. This follows Moody's upgrade of Ford Motor Company's corporate family rating to B3 from Caa1, with a stable outlook. Ford Credit's long-term ratings remain on review for further possible upgrade. On Nov. 3, 2009, S&P raised the corporate credit ratings on Ford Motor Co. and Ford Motor Credit Co. LLC to 'B-' from 'CCC+'. Ford Motor Co. carries a long-term issuer default rating of 'CCC', with a positive outlook, from Fitch Ratings. FORD MOTOR CREDIT: Files Form 10-K; Posts $1.3-Billion Net Income ----------------------------------------------------------------- On February 25, 2010, Ford Motor Credit Company LLC filed its annual report on Form 10-K, showing net income of $1.3 billion for 2009, compared with a net loss of $1.5 billion for 2008. The improvement in net income primarily reflects higher net financing margin of $3.5 billion, compared to ($236 million) in 2008. The Company's balance sheet as of December 31, 2009, showed $117.3 billion in assets, $106.3 billion of debts, and shareholder's interest of $11.0 billion. A full-text copy of the annual report is available for free at: http://researcharchives.com/t/s?56f9 About Ford Motor Credit Headquartered in Dearborn, Michigan, Ford Motor Credit Company LLC -- http://www.fordcredit.com/-- is one of the world's largest automotive finance companies and has supported the sale of Ford Motor Company products since 1959. Ford Credit is an indirect, wholly owned subsidiary of Ford. * * * On November 2, 2009, DBRS placed the ratings assigned to the Company under review with positive implications; Fitch changed the outlook assigned to the Company to positive from stable; and Moody's upgraded the senior unsecured credit rating assigned to the Company to B3 from Caa1, while keeping the long-term ratings assigned to the Company under review for a further possible upgrade. On November 3, 2009, S&P upgraded the senior unsecured credit rating assigned to the Company to B- from CCC+ with a stable outlook. Ford Motor Credit carries Firch's C short-term credit rating. FORD MOTOR: Moody's Upgrades Senior Unsec. Ratings to 'B2' ---------------------------------------------------------- Moody's Investors Service upgraded the senior unsecured ratings of Ford Motor Credit Company LLC, FCE Bank Plc, and certain supported subsidiaries of Ford Credit to B2 from B3. The outlook for the ratings is stable. The ratings of Ford Motor Company were not affected by this action. This concludes Moody's review of Ford Credit's ratings initiated on November 2, 2009. Moody's said the B2 rating is supported by the steps that Ford Credit has taken to strengthen its capital position and preserve liquidity during the economic downturn and contraction in the capital markets. Though Ford Credit paid dividends of $1.5 billion to Ford during 2009, the firm's effective leverage ratio declined to 8.9x at the end of the year versus 12.2x at the end of 2008. The company has also maintained sizeable balances of cash and marketable securities as a liquidity cushion for operating requirements, ending 2009 with unrestricted cash and securities of $12.1 billion. In comparison, Ford Credit has $7.1 billion of unsecured long-term debt maturing in 2010. The upgrade also recognizes Ford Credit's asset quality and operating performance trends. Ford Credit's asset quality has deteriorated during the downturn, but to a lesser degree than has been observed among auto lender peers. In 2009, rising unemployment levels and increased bankruptcy filings contributed to higher repossession rates, though improvement in used car values offset the effects on net charge-offs and credit provisions. Moody's expects Ford Credit's operating prospects to improve as the economy stabilizes, though the firm's risk-adjusted returns in 2010 will remain vulnerable to compression due to elevated credit costs. "On balance, Moody's believe Ford Credit's financial fundamentals and operating outlook warrant the B2 rating," said Moody's vice president Mark Wasden. "We expect that Ford Credit will continue to employ appropriate capital and liquidity strategies, taking into consideration the challenging operating and funding conditions for itself and its parent." Moody's said Ford Credit has strategic importance to Ford, demonstrated in particular by the critical inventory financing it provides to Ford's dealers and further signified by Ford's support agreement with Ford Credit. Considering this, Moody's believes that Ford is motivated to maintain Ford Credit's operational viability. Because of the significant ownership, support, and business connections between Ford and Ford Credit, Ford Credit's ratings are closely aligned with Ford's. The upgrade to B2 positions Ford Credit's senior unsecured rating one notch higher than Ford's corporate family rating of B3. This reflects Moody's view that Ford Credit's unsecured creditors should anticipate stronger recovery in a liquidation scenario than the creditors of Ford. Moody's estimates that asset coverage of Ford Credit's unsecured debt improved in 2009 compared to 2008, the result of long-term debt repayments and retention of equity capital as the company shrunk its scale in response to lower auto sales and market funding constraints. The asset coverage analysis takes into consideration Ford Credit's high percentage of encumbered finance receivables and leases, as well as the effects of stressed economic and market conditions on asset performance and liquidation values. Moody's noted that in order to sustain the one notch differential in its rating versus the Ford rating, Ford Credit must maintain fundamental characteristics that merit the higher credit grade. A longer term constraint to Ford Credit's rating and the maintenance of the notching differential is the company's reliance on wholesale funding and the associated risk of illiquidity stemming from potential market disruption. In addition, Ford Credit relies significantly upon securitization to fund its new volumes, which limits its financial flexibility in Moody's view. Moody's expects that Ford Credit will seek to issue additional unsecured debt in 2010, after having raised $5 billion in 2009. However, the firm's ability to expand its access to this market is not assured. Moody's believes that Ford Credit must continue to adhere to sound policies regarding underwriting quality and capital levels, while also demonstrating improved profitability and reduced earnings volatilty, as a prerequisite to further strengthening its access to funding, and thereby improving its credit profile. Ford Credit's rating outlook is stable, reflecting the stable outlook for Ford's rating, and also the expectation that Ford Credit's asset quality and operating performance metrics will improve as economic recovery progresses. In particular, Moody's expects that Ford Credit will be profitable in 2010, that leverage will continue to be managed prudently, and that the company will make advances in expanding its access to funding as market conditions improve. An upgrade in Ford's rating would likely lead to an upgrade in Ford Credit's rating. A negative deviation in anticipated operating performance, a material increase in leverage, or inability to execute funding plans would constrain Ford Credit's ratings and rating outlook. Ratings affected by the action include: Issuer: Ford Motor Credit Company LLC: -- Senior unsecured to B2 from B3 -- Subordinate shelf to (P)Caa1 from (P)Caa2 Issuer: FCE Bank Plc: -- Senior unsecured to B2 from B3 Issuer: Ford Credit Australia Ltd.: -- Backed senior unsecured to B2 from B3 Issuer: Ford Credit Canada Limited: -- Backed senior unsecured to B2 from B3 Issuer: Ford Motor Credit Co. of New Zealand Ltd.: -- Backed senior unsecured to B2 from B3 Issuer: Ford Credit Capital Trusts I, II, and III: -- Backed preferred shelf to (P)Caa1 from (P)Caa2 In its last rating action on November 2, 2009, Moody's upgraded Ford Credit's senior unsecured rating to B3 and placed it on review for possible upgrade. Ford Motor Credit Company LLC is the Dearborn, Michigan-based captive finance arm of Ford Motor Company. FREDDIE MAC: Bondholders Shouldn't Assume Govt. Guarantee --------------------------------------------------------- Dawn Kopecki at Bloomberg News reports that House Financial Services Committee Chairman Barney Frank said that Fannie Mae and Freddie Mac bondholders shouldn't assume the government will make them whole on their investments as Congress disbands the companies. Mr. Frank said the public role of Fannie Mae and Freddie Mac, as well as the U.S. government's implied backing of the companies' $1.7 trillion in debt, should be clarified by lawmakers to remove ambiguity. "Please don't think this is federally guaranteed, I don't think it is, I don't think it should be, I don't feel any obligation to bail you out," Mr. Frank said. Congress will "certainly not" extend any new protections to bond and mortgage-security investors beyond what exists. 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. Conservatorship 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. As reported by the Troubled Company Reporter, the U.S. government took direct responsibility for Fannie Mae and Freddie Mac, placing the government sponsored enterprises under conservatorship on September 7, 2008. James B. Lockhart, director of Federal Housing Finance Agency, said that Fannie Mae and Freddie Mac share the critical mission of providing stability and liquidity to the housing market. Between them, the Enterprises have $5.4 trillion of guaranteed mortgage-backed securities (MBS) and debt outstanding, which is equal to the publicly held debt of the United States. Among the key components of the conservatorship, the FHFA, as conservator, assumed the power of the Board and management. About Fannie Mae Fannie Mae -- http://www.fanniemae.com/-- is a government- sponsored enterprise that was chartered by Congress in 1938. Fannie Mae securitizes mortgage loans originated by lenders in the primary mortgage market into mortgage-backed securities, which can then be bought and sold in the secondary mortgage market. Fannie Mae also participates in the secondary mortgage market by purchasing mortgage loans and mortgage-related securities, including the Fannie Mae MBS, for its own mortgage portfolio. In addition, Fannie Mae makes other investments that increase the supply of affordable housing. Under its charter, Fannie Mae may not lend money directly to consumers in the primary mortgage market. Although Fannie Mae is a corporation chartered by the U.S. Congress, and although its conservator is a U.S. government agency and Treasury owns its senior preferred stock and a warrant to purchase its common stock, the U.S. government does not guarantee its securities or other obligations. Conservatorship As reported by the Troubled Company Reporter, the U.S. government took direct responsibility for Fannie Mae and Freddie Mac, placing the government sponsored enterprises under conservatorship on September 7, 2008. James B. Lockhart, director of Federal Housing Finance Agency, said that Fannie Mae and Freddie Mac share the critical mission of providing stability and liquidity to the housing market. Between them, the Enterprises have $5.4 trillion of guaranteed mortgage-backed securities (MBS) and debt outstanding, which is equal to the publicly held debt of the United States. Among the key components of the conservatorship, the FHFA, as conservator, assumed the power of the Board and management. FREDDIE MAC: Files January 2010 Monthly Volume Summary ------------------------------------------------------ Freddie Mac, formally known as the Federal Home Loan Mortgage Corporation, on February 26, 2010, issued its January 2010 Monthly Volume Summary. The total mortgage portfolio decreased at an annualized rate of 1.7% in January. The aggregate unpaid principal balance of the Company's mortgage-related investments portfolio was $743.7 billion at January 31, 2010, down from $755.3 billion at December 31, 2009. The net amount of mortgage-related investments portfolio mortgage purchase (sale) agreements entered into during the month of January totaled $238 million, down from the $2.618 billion entered into during the month of December. Refinance-loan purchase and guarantee volume was $22.6 billion in January, down from $27.3 billion in December. Total guaranteed PCs and Structured Securities issued increased at an annualized rate of 0.5% in January. The Company's January 2010 issuance includes $7.2 billion of guarantees under the Housing Finance Agencies initiative. Treasury bears initial losses on these securities up to 35% of the program-wide issuance. The Company's single-family portfolio delinquency rate rose to 4.03% in January, up 16 basis points from December. Its multifamily delinquency rate was 0.15% in January. On February 10, 2010, the Company said it will purchase substantially all of the single-family mortgage loans that are 120 days or more delinquent from its PCs. A full-text copy of the Monthly Volume Summary is available at no charge at http://ResearchArchives.com/t/s?5729 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. 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. Freddie Mac is under conservatorship and is dependent upon the continued support of Treasury and FHFA to continue operating its business. 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 the 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. GARDUNO'S RESTAURANT: Files for Bankruptcy, Closes Three Shops -------------------------------------------------------------- According to koat.com, Garduno's Restaurant filed for Chapter 11 bankruptcy, closes three of five restaurant locations in Albuquerque, New Mexico. KOB.com says a federal judge authorized the Company to pay employee wages, salaries, contributions, benefit plans and any reimbursements. The gross amount of the payroll was about $71,000. Garduno's Restaurant -- http://www.gardunosrestaurants.com/-- operates a chain of restaurants. GATEHOUSE MEDIA: Bank Debt Trades at 53% Off in Secondary Market ---------------------------------------------------------------- Participations in a syndicated loan under which GateHouse Media, Inc., is a borrower traded in the secondary market at 46.95 cents- on-the-dollar during the week ended Friday, March 5, 2010, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 1.20 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 Feb. 27, 2014, and carries Moody's Ca rating and Standard & Poor's CCC rating. The debt is one of the biggest gainers and losers among 190 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. GateHouse Media, Inc. -- http://www.gatehousemedia.com/-- headquartered in Fairport, New York, is one of the largest publishers of locally based print and online media in the United States as measured by its 97 daily publications. GateHouse Media currently serves local audiences of more than 10 million per week across 21 states through hundreds of community publications and local Web sites. At Sept. 30, 2009, the Company had $601,666,000 in total assets against $1,350,478,000 in total liabilities. As reported by the Troubled Company Reporter on Sept. 21, 2009, Moody's downgraded GateHouse Media Operating, Inc.'s Corporate Family rating to "Ca" from "Caa1" and its Probability of Default rating to "Ca" from "Caa2", reflecting Moody's view of very high default risk and weakened recovery prospects for debtholders in an event of default scenario which is exacerbated by lingering adverse current market conditions. GENERAL GROWTH: S&P Revises Bank Debt Recovery Ratings to '3' ------------------------------------------------------------- Standard & Poor's Ratings Services on March 5 revised its recovery ratings on General Growth Properties Inc.'s (D/--/--) $4.8 billion of rated senior unsecured notes and bank debt to '3' from '5'. The '3' recovery ratings indicate our expectation for meaningful recovery in the low end of the 50%-70% range for holders of the rated debt in the event of the company's emergence from Chapter 11 bankruptcy. The rating revision affects rated debt consisting of $2.2 billion of senior unsecured notes (The Rouse Co. L.P., or TRCLP, bonds) and $2.6 billion of outstanding unsecured revolver and term loan borrowings (as of Dec. 31, 2009). The issue-level ratings on the unsecured debt remain unchanged at 'D' because the company remains in Chapter 11 bankruptcy proceedings. "The revised recovery ratings reflect our updated review of the recovery prospects for unsecured creditors. We will continue to monitor and review these recovery prospects as the bankruptcy process unfolds," S&P said. On March 3, 2010, the bankruptcy court granted the company extension of its exclusivity period -- during which GGP has the sole right to file a plan of reorganization--through July 15, 2010, and extended the company's period to solicit acceptances of a plan of reorganization through Sept. 15, 2010. To date, two potential buyers, Simon Property Group (A-/Watch Neg/--) and Brookfield Asset Management Inc. (A-/Negative/A-2), have come forth (in February) and expressed their interest in acquiring GGP. In short, Simon's written offer was for $10 billion in cash, and the existing secured debt on GGP's portfolio of assets would remain in place. The $10 billion in cash would fully cover approximately $7.0 billion in unsecured debt, which includes the rated debt. Brookfield's proposal put forth an offer to sponsor a recapitalization of GGP by raising about $8.3 billion in a combination of new debt and equity capital, in addition to providing existing GGP shareholders with the opportunity to participate in the new equity shares. Recovery in this scenario for unsecured bank debt and TRCLP bond debt claims includes either a cash payout or a combination of cash and new equity shares, both of which would have a capped amount to be determined pending the success of the capital fundraising. Furthermore, proceeds from certain asset sales would also be applied to satisfy any remaining unsecured bank and TRCLP bond debt claims. Ratings List General Growth Properties Inc. Corporate credit rating D/--/-- Unsecured debt rating D The Rouse Co. Unsecured debt rating D Recovery Rating Revised To From General Growth Properties Inc. Unsecured debt recovery rating 3 5 The Rouse Co. Unsecured debt recovery rating 3 5 GENERAL MOTORS: To Reinstate 661 Dealers to Shore Up Market Share ----------------------------------------------------------------- General Motors Company said that it reviewed 1,100 dealer reinstatement claims that were filed with the American Arbitration Association. Following individual reviews, GM determined it would send more than 600 Letters of Intent to the involved dealers. This action will allow these dealers to conduct normal dealership operations. "We are eager to restore relationships with our dealers, and get back to doing what we do best -- selling cars and taking care of customers," said Mark Reuss, president, GM North America. "The arbitration process creates uncertainty in the market. We believe issuing these Letters of Intent is good for our customers, our dealers and GM." According to Bloomberg News, GM is trying to increase U.S. sales and market share while trimming four of its eight brands. GM accounted for 19.9% of U.S. sales of cars and light trucks last year, a drop from 22.3 percent in 2008, according to Autodata Corp. in Woodcliff Lake, New Jersey. Ford Motor Co. beat GM in monthly sales in February for the first time since 1998. About General Motors General Motors Company -- http://www.gm.com/-- is one of the world's largest automakers, tracing its roots back to 1908. With its global headquarters in Detroit, GM employs 209,000 people in every major region of the world and does business in some 140 countries. GM and its strategic partners produce cars and trucks in 34 countries, and sell and service these vehicles through these brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, Opel, Vauxhall and Wuling. GM's largest national market is the United States, followed by China, Brazil, the United Kingdom, Canada, Russia and Germany. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. GM acquired its operations from General Motors Company, n/k/a Motors Liquidation Company, on July 10, 2009, pursuant to a sale under Section 363 of the Bankruptcy Code. Motors Liquidation or Old GM is the subject of a pending Chapter 11 reorganization case before the U.S. Bankruptcy Court for the Southern District of New York. At September 30, 2009, GM had US$107.45 billion in total assets against US$135.60 billion in total liabilities. About Motors Liquidation General Motors Corporation and three of its affiliates filed for Chapter 11 protection on June 1, 2009 (Bankr. S.D.N.Y. Lead Case No. 09-50026). General Motors changed its name to Motors Liquidation Co. following the sale of its key assets to a company 60.8% owned by the U.S. Government. The Honorable Robert E. Gerber presides over the Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors in their restructuring efforts. Al Koch at AP Services, LLC, an affiliate of AlixPartners, LLP, serves as the Chief Executive Officer for Motors Liquidation Company. GM is also represented by Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as counsel. Cravath, Swaine, & Moore LLP is providing legal advice to the GM Board of Directors. GM's financial advisors are Morgan Stanley, Evercore Partners and the Blackstone Group LLP. Bankruptcy Creditors' Service, Inc., publishes General Motors Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Motors Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GENERAL MOTORS: Fee Examiner Reviews $54.7MM Billed by Firms ------------------------------------------------------------ Brady C. Williamson, as fee examiner in Motors Liquidation Co.'s Chapter 11 cases, submitted his First Status Report and Advisory in preliminary review of fee applications submitted by professionals eligible for compensation under the Court's Interim Compensation and Reimbursement of Expenses Order pursuant to Sections 105(a) and 331 of the Bankruptcy Code. The Fee Examiner conducted initial review, though not yet in detail or to specific conclusions, of 14 fee applications pending as of February 16, 2010, each covering the period between June 1 and September 30, 2009, and with a combined total of $54,716,379. In addition, through February 16, two quarterly fee applications have been filed covering the periods from June 1 to August 31, 2009, as well as September 1 through November 30, 2009. The Quarterly Fee Applications aggregate $35,745,130. A schedule of the Fee Applications covered in the Fee Examiner's First Status Report is available for free at: http://bankrupt.com/misc/GM1stStatusReportFeeApps.pdf "The preliminary review . . . suggests that, in ways both minor and major, at least some of the initial interim applications and quarterly reports, in whole or in part, do not meet statutory and administrative guidelines," the Fee Examiner points out. He explains that certain Professionals did not provide a budget for the particular month beginning February 2010. The budget should set forth an estimate of the projected fees and expenses for that month, a general description of the categories of services that may be performed, and an explanation for any significant increase over the previous month's fees, the Fee Examiner tells the Court. The Fee Examiner says that he will (i) continue to consult, as necessary, with each retained professional regarding Budgets, and (ii) inform each Professional of any issue relating to quarterly reports. A report with objections to the Fee Applications will also be filed with the Court prior to the hearing date set by the Court. The First Status Report also incorporates observations that will assist professionals in preparing their second 120-day interim applications for the period from October 2009 to January 2010, or other compensation submissions. It is neither intended to be an exhaustive or exclusive list of the factors used in the assessment the Fee Examiner will undertake, nor to single out any particular professional's compliance or non-compliance with applicable standards, the Fee Examiner notes. About General Motors General Motors Company -- http://www.gm.com/-- is one of the world's largest automakers, tracing its roots back to 1908. With its global headquarters in Detroit, GM employs 209,000 people in every major region of the world and does business in some 140 countries. GM and its strategic partners produce cars and trucks in 34 countries, and sell and service these vehicles through these brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, Opel, Vauxhall and Wuling. GM's largest national market is the United States, followed by China, Brazil, the United Kingdom, Canada, Russia and Germany. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. GM acquired its operations from General Motors Company, n/k/a Motors Liquidation Company, on July 10, 2009, pursuant to a sale under Section 363 of the Bankruptcy Code. Motors Liquidation or Old GM is the subject of a pending Chapter 11 reorganization case before the U.S. Bankruptcy Court for the Southern District of New York. At September 30, 2009, GM had US$107.45 billion in total assets against US$135.60 billion in total liabilities. About Motors Liquidation General Motors Corporation and three of its affiliates filed for Chapter 11 protection on June 1, 2009 (Bankr. S.D.N.Y. Lead Case No. 09-50026). General Motors changed its name to Motors Liquidation Co. following the sale of its key assets to a company 60.8% owned by the U.S. Government. The Honorable Robert E. Gerber presides over the Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors in their restructuring efforts. Al Koch at AP Services, LLC, an affiliate of AlixPartners, LLP, serves as the Chief Executive Officer for Motors Liquidation Company. GM is also represented by Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as counsel. Cravath, Swaine, & Moore LLP is providing legal advice to the GM Board of Directors. GM's financial advisors are Morgan Stanley, Evercore Partners and the Blackstone Group LLP. Bankruptcy Creditors' Service, Inc., publishes General Motors Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Motors Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GENERAL MOTORS: Former Dealer Wants $677,000 Wind-Down Payment -------------------------------------------------------------- Zinn Company, Inc., a former dealer of General Motors in Southern Florida for Pontiac, Buick and GMC brands, asks the Court to compel GM to immediately pay $677,753 plus interest, free of the claimed charge-back or any other set-off or reduction. Alternatively, Zinn asks Judge Gerber to compel GM's payment to the extent that the Company pursues charge-back amounts. Pursuant to a Wind-Down Agreement, Zinn terminated its contract with GM in November 2009. Under the Wind-Down Agreement, GM agreed to pay Zinn a total "wind-down" amount of $903,671, in two payments, consisting of (i) 25% of the total amount upon signing of the Agreement, and (ii) the remaining 75% upon satisfaction of these conditions: -- Zinn has sold all GM inventory; -- Zinn has complied with all bulk transfer and sales transfer tax laws; -- Zinn has delivered to GM certificates of applicable taxing authorities or other reasonable evidence confirming compliance with condition; -- the effective date of termination of Zinn's GM dealership agreement has occurred; -- Zinn has removed or allowed GM to remove all GM signs from Zinn's dealership premises; -- Zinn has signed and delivered to GM the Supplemental Wind- Down Agreement in substantially the form attached to the Wind-Down Agreement; and -- GM has received any required approvals from the Bankruptcy Court. Despite Zinn's compliance with the Conditions, GM nevertheless refused to make the final payment of $677,753, unless Zinn first signed and delivered to GM a waiver of Zinn's right to arbitrate so as to be reinstated as GM dealer, pursuant to the Federal Dealer Legislation contained in the Consolidated Appropriations Act 2010 enacted in December 2009, Keith N. Costa, Esq., at Akerman Senterfitt LLP, in New York, relates on behalf of Zinn. Waiver of the right to arbitrate under the Federal Dealer Legislation was not a condition of the Wind-down Agreements. The deadline for GM to make the final payment to Zinn passed in December 2009, Mr. Costa says. GM has asserted that its obligation to make the $677,753 payment to Zinn is subject to an alleged charge-back in the amount of $556,671, resulting from a GM audit of Zinn's dealership that occurred in March 2009, which Zinn supposedly is not entitled to challenge. The alleged charge-back, however, "is illegal, unfounded, and at minimum grossly excessive," Mr. Costa insists. About General Motors General Motors Company -- http://www.gm.com/-- is one of the world's largest automakers, tracing its roots back to 1908. With its global headquarters in Detroit, GM employs 209,000 people in every major region of the world and does business in some 140 countries. GM and its strategic partners produce cars and trucks in 34 countries, and sell and service these vehicles through these brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, Opel, Vauxhall and Wuling. GM's largest national market is the United States, followed by China, Brazil, the United Kingdom, Canada, Russia and Germany. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. GM acquired its operations from General Motors Company, n/k/a Motors Liquidation Company, on July 10, 2009, pursuant to a sale under Section 363 of the Bankruptcy Code. Motors Liquidation or Old GM is the subject of a pending Chapter 11 reorganization case before the U.S. Bankruptcy Court for the Southern District of New York. At September 30, 2009, GM had US$107.45 billion in total assets against US$135.60 billion in total liabilities. About Motors Liquidation General Motors Corporation and three of its affiliates filed for Chapter 11 protection on June 1, 2009 (Bankr. S.D.N.Y. Lead Case No. 09-50026). General Motors changed its name to Motors Liquidation Co. following the sale of its key assets to a company 60.8% owned by the U.S. Government. The Honorable Robert E. Gerber presides over the Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors in their restructuring efforts. Al Koch at AP Services, LLC, an affiliate of AlixPartners, LLP, serves as the Chief Executive Officer for Motors Liquidation Company. GM is also represented by Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as counsel. Cravath, Swaine, & Moore LLP is providing legal advice to the GM Board of Directors. GM's financial advisors are Morgan Stanley, Evercore Partners and the Blackstone Group LLP. Bankruptcy Creditors' Service, Inc., publishes General Motors Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Motors Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GENERAL MOTORS: Gets Nod to Settle, Send Claims to Mediation ------------------------------------------------------------ Following the passage of the November 30, 2009 deadline for filing of proofs of claim against Motors Liquidation Company and its affiliates, more than 68,000 proofs of claim -- aggregating $217 billion --- remain either unliquidated or have an excessive claim amount, which undermine the Debtors' duty to distribute meaningful value to their creditors in an acceptable timeframe. Accordingly, Old GM sought the Court's authority to implement alternative dispute resolution procedures to facilitate the efficient resolution of each unliquidated or litigation claim that they designate without full-blown litigation, while safeguarding both their procedural rights and those of the holders of Designated Claims. Old GM said the ADR Procedures provide a structure that will (i) promote direct settlement discussions and exchange of information between the parties; and (ii) absent a settlement as a result of direct discussions between the parties, promote resolution of the Designated Claims through mediation or arbitration with the assistance of a neutral outside party. Following a hearing, Judge Robert E. Gerber of the United States Bankruptcy Court for the Southern District of New York authorized Old GM to implement alternative dispute resolution procedures with respect to: (a) personal injury claims; (b) wrongful death claims; (c) tort claims; (d) product liability claims; (e) claims for damages arising from the rejection of an executory contract or unexpired lease with a Debtor under Section 365 of the Bankruptcy Code, excluding claims for damages arising from the rejection of executory contracts that relate primarily to environmental matters; (f) indemnity claims, excluding tax indemnity claims relating to leveraged fixed equipment lease transactions and excluding indemnity claims relating to asbestos liability; (g) "lemon law" claims, to the extent applicable under the Master Sale and Purchase Agreement by and between the Debtors and NGMCO, Inc., dated as of June 1, 2009, and as amended; (h) warranty claims, to the extent applicable under the MPA; and (i) class action claims. The Court adjourned the ADR Motion to April 8, 2010, with respect to tax claims; indemnity claims relating to asbestos liability; and all other Unliquidated/Litigation Claims that are not Initial Subject Claims. The ADR procedures will not apply to claims filed by (i) the United States of America or its agencies, and (ii) state and tribal governments concerning alleged environmental liabilities. Judge Gerber directed the Debtors to provide the Ad Hoc Committee of Consumer Victims of General Motors with a schedule of caps for each mediator that any Designated Claimant can be surcharged for non-binding mediation in connection with the ADR Procedures. The Debtors, from time to time, may modify the Schedule of Mediators, in consultation with the Ad Hoc Committee. The Debtors are authorized to waive the obligation to share costs of non-binding mediation in their sole discretion to the extent the Designated Claimant establishes, to the satisfaction of the Debtors, that sharing of those expenses would constitute a substantial hardship upon the Designated Claimant, Judge Gerber ruled. Any holder of an Unliquidated/Litigation Claim that is an Initial Subject Claim may request the Debtors to initiate the ADR Procedures by sending a Capping Proposal Letter indicating a willingness to cap its Unliquidated/Litigation Claim at a reduced amount. The Court directed the Debtors to post a form of the Capping Proposal Letter at http://www.motorsliquidationdocket.com The Claim Amount Cap, if accepted by the Debtors, will become binding on the Designated Claimant, and the ultimate value of the Unliquidated/Litigation Claim will not exceed the Claim Amount Cap. To the extent the Debtors accept the Claim Amount Cap, the Debtors will be responsible for all fees and costs associated with any subsequent mediation. However, a Claim Amount Cap that the Debtors will not accept will not bind any party and will not be admissible to prove the amount of the Unliquidated/Litigation Claim. Judge Gerber authorized the Debtors to take any and all steps that are necessary or appropriate to implement the ADR Procedures, including by implementing any arbitration awards or settlements. The ADR Procedures, however, will not obligate the Debtors to settle or pursue settlement of any particular Designated Claim. If litigation of an Unresolved Designated Claim in a forum other than the Court is required, then the automatic stay will be modified solely to the extent necessary to permit the liquidation of the Unresolved Designated Claim. The Court's approval of the ADR Procedures will not be deemed to preclude any party-in-interest from objecting to any Designated Claim. Moreover, the ADR Procedures Order will not alter the rights of the Official Committee of Unsecured Creditors. Rule 408 of the Federal Rules of Evidence will apply to all aspects of the ADR Procedures, Judge Gerber ruled. A blacklined version of the ADR Procedures reflecting the limitation of applicability of the ADR Procedures to the Initial Subject Claims and other modifications is available at no charge at http://bankrupt.com/misc/GMBlacklinedADRProcedures.pdf A revised schedule of Mediators is available for free at: http://bankrupt.com/misc/GMRevisedADRMediatorsSched.pdf Objections Prior to the Court's approval of the ADR Procedures, the City of Anderson in Indiana related that GM retained all liability for environmental remediation required by the Indiana Department of Environmental Management at Scatterfield Road and Columbus Avenue, which were former GM properties. The City took title to the Properties as a result of a Donation Agreement with the Company dated September 20, 2006. Representing the City, Ann Marie Bauer, Esq., said the City was not party to, and has no ability to enforce, agreements with contractors and sub-contractors by GM to perform required remediation activities. She noted that the City "has no ability to mitigate the costs of the previously agreed to remediation activities." In a separate filing, the County of Onondoga, in New York contended that its claim in the Debtors' cases, which asserts costs of investigating and remediating sediment contamination down gradient of historic illegal discharges by the Debtor into a water body used by many and subject to competing state and federal oversight, is not the same as a contract, lease, lemon law or warranty claim. Jake W. Rodd asked the Court to exempt his claim from the ADR Procedures. About General Motors General Motors Company -- http://www.gm.com/-- is one of the world's largest automakers, tracing its roots back to 1908. With its global headquarters in Detroit, GM employs 209,000 people in every major region of the world and does business in some 140 countries. GM and its strategic partners produce cars and trucks in 34 countries, and sell and service these vehicles through these brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, Opel, Vauxhall and Wuling. GM's largest national market is the United States, followed by China, Brazil, the United Kingdom, Canada, Russia and Germany. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. GM acquired its operations from General Motors Company, n/k/a Motors Liquidation Company, on July 10, 2009, pursuant to a sale under Section 363 of the Bankruptcy Code. Motors Liquidation or Old GM is the subject of a pending Chapter 11 reorganization case before the U.S. Bankruptcy Court for the Southern District of New York. At September 30, 2009, GM had US$107.45 billion in total assets against US$135.60 billion in total liabilities. About Motors Liquidation General Motors Corporation and three of its affiliates filed for Chapter 11 protection on June 1, 2009 (Bankr. S.D.N.Y. Lead Case No. 09-50026). General Motors changed its name to Motors Liquidation Co. following the sale of its key assets to a company 60.8% owned by the U.S. Government. The Honorable Robert E. Gerber presides over the Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors in their restructuring efforts. Al Koch at AP Services, LLC, an affiliate of AlixPartners, LLP, serves as the Chief Executive Officer for Motors Liquidation Company. GM is also represented by Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as counsel. Cravath, Swaine, & Moore LLP is providing legal advice to the GM Board of Directors. GM's financial advisors are Morgan Stanley, Evercore Partners and the Blackstone Group LLP. Bankruptcy Creditors' Service, Inc., publishes General Motors Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Motors Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GENERAL MOTORS: Unsec. Bondholder Sues GM, Govt. for Assets Deal ---------------------------------------------------------------- In June 2009, Radha Ramana Murty Narumanchi and Radha Bhavatarini Devi Narumanchi filed a complaint against (i) the Debtors; (ii) Wilmington Trust Company; (iii) Timothy F. Geithner, as Treasury Secretary for the United States Government; (iv) Steven Rattner, the President's nominee on Auto Task Force; (v) Ron Bloom, (vi) Mathew Feldman and (vii) Harry J. Wilson, as members of ATF; (viii) Kent Kresa, as Chairman of the Board of Directors of GM; and (ix) Frederick "Fritz" Henderson (Henderson), former president and CEO of GM. The Narumanchis, who purchased unsecured 8.375% GM senior debentures due in 2033 in the face value of $400,000 at least January 2005, asked Judge Gerber to declare, among other things that notwithstanding GM's insolvency, the Company "has failed . . . to protect the true and real best interests of the unsecured bondholders which stood at an aggregate amount of $27,378,898,712." GM has failed in its fiduciary duty and responsibilities to the unsecured bondholders, the Plaintiffs noted. According to the Narumanchis, the specific instances of gross negligence and total breach of fiduciary duty committed GM to the unsecured bondholders during the period of its insolvency include: -- pledging the "crown jewels" of the Corporation to the U.S. Treasury and reducing the ability of the unsecured bondholders to achieve a maximum recovery of their investment; -- deepening the Insolvency Period of the bankrupt corporation and wasting and dissipating the cash and assets of the corporation, and incurring additional liabilities, even after receiving $17,000,000,000 from the U.S. Treasury; -- giving away "the so-called severance payments" to employees of Insolvent GM during its period of actual insolvency, to the detriment of the unsecured bondholders; -- paying dividends to stockholders even after the Company had entered into a state of insolvency, to the detriment of the unsecured bondholders; and -- engaging and paying so-called consultants in dozens of millions of dollars during the state of Insolvency to the detriment of the unsecured bondholders. The Narumanchis also sought "Money Judgment" from the Court for the losses deliberately caused by General Motors, et al., to the unsecured bondholders. Devi Narumanchi subsequently sought and obtained the Court's permission to withdraw as Plaintiff in the Complaint, due to health reasons. Devi Narumanchi then asked the Court to make an initial determination of the "core" and "non-core" issues involved in the Adversary Proceeding, to enable him to request the U.S. District Court for Southern District of New York "to withdraw reference with regard to all non-core issues." Defendants Seek Dismissal of Complaint In response, the Defendants sought to dismiss the Plaintiff's Complaint, which, according to the Debtors and Messrs. Kresa and Henderson, "is barely comprehensible" and fails to coherently set forth grounds for the Court's consideration. The Defendants maintained that under governing Delaware law, GM, as a corporation does not owe any fiduciary duty to creditors, including debentureholders. Neither does the Plaintiff have standing to assert direct claims for breach of fiduciary duty against Messrs. Kresa and Henderson. Moreover, a creditor has no direct claim for breach of fiduciary duty against directors. Accordingly, the Plaintiff does not have standing to prosecute derivative claims unless they either first make demand on the GM Board to take the requested action or else plead particularized facts sufficient to excuse demand, the Defendants noted. WTC, for its part, noted that the Plaintiff's Complaint has, during the course of the GM's Chapter 11 cases, "already been raised, briefed, and thoroughly argued by plaintiffs and other similarly situated bondholders." The Court properly rejected the arguments when it approved the sale of substantially all of GM's assets to NGMCO, Inc. under Section 363 of the Bankruptcy Code. Hence, the Plaintiff's allegations are barred by the doctrines of res judicata, and must be dismissed with prejudice. WTC the successor indenture trustee to Citibank, N.A., under two indentures with GM, pursuant to which GM issued (i) a Senior Indenture, dated as of December 7, 1995, as amended, and (ii) a Senior Indenture, dated as of November 15, 1990. On the other hand, the United States of America, on behalf of Messrs. Geithner, Rattner, Bloom, Feldman and Wilson sought to dismiss the Complaint against them "for lack of subject matter jurisdiction. "Congress excluded the intentional tort claims at issue in this case from the Government's waiver of sovereign immunity under the Federal Tort Claims Act." Court Dismisses Complaint, Plaintiff Takes Appeal At the behest of the Defendants, Judge Gerber dismissed the Adversary Proceeding with prejudice. The Court denied the Plaintiff leave to file an amended complaint. Consequently, the Plaintiff took an appeal to the District Court from the Bankruptcy Court's Dismissal Order. The Defendants counter-designated issues relating to the Plaintiff's Appeal, seeking to determine if appellant Narumanchi established that the Bankruptcy Court: (a) erred as a matter of law in granting the Defendants' motions to dismiss the adversary complaint (i) for failure to state a claim upon which relief can be granted, and (ii) insofar as such claims were derivative, rather than direct, for failure to make demand on the Board of Directors of GM or to plead with particularity facts excusing the Demand under Delaware law; and (b) abused its discretion in denying leave to replead. About General Motors General Motors Company -- http://www.gm.com/-- is one of the world's largest automakers, tracing its roots back to 1908. With its global headquarters in Detroit, GM employs 209,000 people in every major region of the world and does business in some 140 countries. GM and its strategic partners produce cars and trucks in 34 countries, and sell and service these vehicles through these brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, Opel, Vauxhall and Wuling. GM's largest national market is the United States, followed by China, Brazil, the United Kingdom, Canada, Russia and Germany. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. GM acquired its operations from General Motors Company, n/k/a Motors Liquidation Company, on July 10, 2009, pursuant to a sale under Section 363 of the Bankruptcy Code. Motors Liquidation or Old GM is the subject of a pending Chapter 11 reorganization case before the U.S. Bankruptcy Court for the Southern District of New York. At September 30, 2009, GM had US$107.45 billion in total assets against US$135.60 billion in total liabilities. About Motors Liquidation General Motors Corporation and three of its affiliates filed for Chapter 11 protection on June 1, 2009 (Bankr. S.D.N.Y. Lead Case No. 09-50026). General Motors changed its name to Motors Liquidation Co. following the sale of its key assets to a company 60.8% owned by the U.S. Government. The Honorable Robert E. Gerber presides over the Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors in their restructuring efforts. Al Koch at AP Services, LLC, an affiliate of AlixPartners, LLP, serves as the Chief Executive Officer for Motors Liquidation Company. GM is also represented by Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as counsel. Cravath, Swaine, & Moore LLP is providing legal advice to the GM Board of Directors. GM's financial advisors are Morgan Stanley, Evercore Partners and the Blackstone Group LLP. Bankruptcy Creditors' Service, Inc., publishes General Motors Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Motors Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GENERAL MOTORS: Wants to Tap Great American as Appraiser -------------------------------------------------------- General Motors Corp., formerly Motors Liquidation Co., and its units seek the Court's authority to employ Great American Group Advisory & Valuation Services, L.L.C., as their appraiser for certain real property locations, nunc pro tunc to February 22, 2010. Pursuant to an Engagement Letter, Great American will prepare appraisals of the land, improvements, and fixtures, and prepare an appraisal report for each of these 32 locations: (1) 340 White River Parkway, in Indianapolis, Indiana (2) 7600 General Motors Boulevard in Shreveport, Louisiana (3) 2627 West Grand Blvd., in Detroit, Michigan (4) 12950 Eckles Road in Livonia, Michigan (5) 2100 S Opdyke Road in Pontiac, Michigan (6) 13000 Eckles Road in Livonia, Michigan (7) 2000 Centerpoint Parkway in Pontiac, Michigan (8) 660 South Boulevard East in Pontiac, Michigan (9) 2930 Ecorse Road in Ypsilanti, Michigan (10) 37350 Ecorse Road in Romulus, Michigan (11) 900 Baldwin Avenue in Pontiac, Michigan (12) 4002 James Cole Blvd. in Flint, Michigan (13) 900 Baldwin Avenue in Pontiac, Michigan (14) 902 E Hamilton Avenue in Flint, Michigan (15) 12200 Middlebelt in Livonia, Michigan (16) 300 36th Street SW in Wyoming, Michigan (17) 902 East Hamilton Avenue in Flint, Michigan (18) 10800 S. Saginaw Road in Flint, Michigan (19) 2800-2801 West Saginaw St. in Lansing Township, Michigan (20) 2901 South Canal Road in Lansing, Michigan (21) 200 South Boulevard West in Pontiac, Michigan (22) 675 Oakland Avenue in Pontiac, Michigan (23) 1445 Parkway Avenue in Ewing, New Jersey (24) One General Motors Circle in Syracuse, New York (25) Factory Road in Syracuse, New York (26) Route 37 East in Massena, New York (27) 1829 Hallock Young Road in Lordstown, Ohio (28) 3100 Dryden Road in Moraine, Ohio (29) 2525 West Fourth Street in Mansfield, Ohio (30) 2601 West Stroop Road in Moraine, Ohio (31) 5400 Chevrolet Boulevard in Parma, Ohio (32) 11032 Tidewater Trail in Fredericksburg, Virginia Each Report will include valuations of the Properties based on cost, sales, and income approaches to valuation, as well as a liquidation value based on an immediate sale under distressed conditions. Great American will be paid $3,500 per Report and reimbursed for reasonable travel expenses. The Fees and Expenses will be due and payable upon completion and delivery of the Report for each Property. If Great American's consultants or advisors are called to give testimony or appear before a court or regulatory body or agency regarding the Reports, Great American will be paid (i) $2,000 per day plus reasonable travel expenses for each day of actual court testimony, and (ii) $240 per hour plus reasonable travel expenses for depositions, pretrial hearings, or meetings. As appraiser, Great American will assist the Debtors in obtaining market valuations and disposition valuations of the Properties to appropriate market the Properties or otherwise determine how to appropriately dispose of them, Harvey R. Miller, Esq., at Weil, Gotshal & Manges LLP, in New York, says. Lester Friedman, chief executive officer of Great American, assures Judge Gerber that his firm is a "disinterested person," as that term is defined in Section 101(14) of the Bankruptcy Code. The Court will convene a hearing on March 11, 2010, to consider the Debtors' Application. About General Motors General Motors Company -- http://www.gm.com/-- is one of the world's largest automakers, tracing its roots back to 1908. With its global headquarters in Detroit, GM employs 209,000 people in every major region of the world and does business in some 140 countries. GM and its strategic partners produce cars and trucks in 34 countries, and sell and service these vehicles through these brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, Opel, Vauxhall and Wuling. GM's largest national market is the United States, followed by China, Brazil, the United Kingdom, Canada, Russia and Germany. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. GM acquired its operations from General Motors Company, n/k/a Motors Liquidation Company, on July 10, 2009, pursuant to a sale under Section 363 of the Bankruptcy Code. Motors Liquidation or Old GM is the subject of a pending Chapter 11 reorganization case before the U.S. Bankruptcy Court for the Southern District of New York. At September 30, 2009, GM had US$107.45 billion in total assets against US$135.60 billion in total liabilities. About Motors Liquidation General Motors Corporation and three of its affiliates filed for Chapter 11 protection on June 1, 2009 (Bankr. S.D.N.Y. Lead Case No. 09-50026). General Motors changed its name to Motors Liquidation Co. following the sale of its key assets to a company 60.8% owned by the U.S. Government. The Honorable Robert E. Gerber presides over the Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors in their restructuring efforts. Al Koch at AP Services, LLC, an affiliate of AlixPartners, LLP, serves as the Chief Executive Officer for Motors Liquidation Company. GM is also represented by Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as counsel. Cravath, Swaine, & Moore LLP is providing legal advice to the GM Board of Directors. GM's financial advisors are Morgan Stanley, Evercore Partners and the Blackstone Group LLP. Bankruptcy Creditors' Service, Inc., publishes General Motors Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Motors Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GRAHAM PACKAGING: Swings to $11.08MM Net Income in 2009 ------------------------------------------------------- Graham Packaging Inc. reported a net income of $11.08 million on net sales of $2.276 billion for 2009, compared with a net loss of $57.9 million on net sales of $2.56 billion for 2008. The Company reported $2.126 billion in total assets and $2.889 in total liabilities, for a stockholders' of $763.1 million as of Dec. 31, 2009. The Company said in a statement that fourth quarter 2009 adjusted EBITDA increased to $99.9 million compared to $96.4 million in the fourth quarter of last year. Net loss for the fourth quarter of 2009 improved to a net loss of $46.6 million, as compared to a net loss of $95.0 million for the fourth quarter last year. Net sales declined by 3.8% to $534.7 million due to a decrease in resin costs which are passed through to customers. "Our fourth quarter profitability was slightly better than our expectations," said CEO Mark Burgess. "While sales were slightly lower because of resin costs, unit volumes showed some improvement as a result of stronger end markets and increased market penetration. Our adjusted EBITDA showed a 3.6% improvement over last year as a result of volume improvements and our intense focus on productivity. We are also pleased to have completed our Initial Public Offering last month, in spite of difficult market conditions. We intend to use our enhanced financial flexibility from the IPO and strong free cash flow to continue to de-lever and make strategic investments." By segment, sales were down $31.8 million, or 6.7%, in North America due to the decrease in resin costs mentioned above, offset by slightly better volumes. Sales were up $4.2 million, or 7.0%, in Europe primarily due to the positive impact of exchange rates. Sales were up $6.8 million, or 35.8%, in South America due to increased volume. During the fourth quarter of 2009, the Company continued to experience positive momentum in its drive to convert legacy packaging into Graham's technology-oriented performance packaging solutions. This area remains a driver of future growth for the Company. Operating income for the fourth quarter of 2009 increased to $23.7 million from an operating loss of $38.3 million for the fourth quarter of last year. The increase was driven by a decrease in asset impairment charges and increased gross profit due to productivity initiatives, better volumes and improved product mix. Interest expense for the fourth quarter of 2009 was $49.8 million, an increase of $4.9 million, from the fourth quarter of last year, due to the increased interest rate on the portion of our term loans which were extended in the second quarter. Full Year 2009 Full year 2009 adjusted EBITDA increased to $462.5 million compared to $452.8 million in 2008. Net income for 2009 increased to $14.3 million as compared to a net loss of $57.9 million for 2008. Net sales decreased by 11.3% to $2,271.0 million due to a decrease in resin costs which are passed through to customers. Commenting on the full year performance, Burgess stated: "We have had an eventful year at Graham. In the face of challenging economic conditions we delivered solid results. Through improved product mix, productivity initiatives and continued working capital management, we were able to expand our gross profit margin, improve operating income and generate strong free cash flow. In addition to operating improvements we have seen good results in our efforts to convert products into higher value packaging solutions. While our progress is gratifying, we are a long way from exhausted in these efforts, and we expect to see more momentum in the quarters ahead." By segment, sales decreased $252.5 million, or 11.5%, in North America due to the decrease in resin costs mentioned above. Sales decreased $38.5 million, or 14.0%, in Europe primarily due to the stronger dollar and decreased resin costs. Sales increased $3.0 million, or 3.3%, in South America due to increased volume. Operating income for 2009 increased to $233.7 million from $145.2 million last year. The increase was driven by a decrease in asset impairment charges, increased gross profit due to productivity initiatives, reduced depreciation and improved product mix, and lower selling, general, and administrative expenses. Interest expense for 2009, was $176.9 million, a $3.1 million decrease from 2008 which was primarily due to a decrease in interest rates. Initial Public Offering and Bond Refinance On February 10, 2010, the Company completed an initial public offering of its stock. The Company raised net proceeds of $150 million with the issuance of 16,666,667 shares of its stock at an initial offering price of $10 per share. The Company contributed $114.2 million of the proceeds to its subsidiary, Graham Packaging Company L.P., to pay down a portion of their term loans. The Company also used the proceeds to make a one-time payment of $35.0 million to terminate a monitoring agreement with its former general and limited partners which will be expensed in the first quarter of 2010. The remaining proceeds were used to pay off other deal related costs. As previously reported, on November 24, 2009, the Company's subsidiary, Graham Packaging Company L.P., issued $253.4 million aggregate principal amount of 8 1/4% senior notes due 2017. The proceeds of the issuance were used to redeem in full the 8 1/2% senior notes due 2012. A full-text copy of the Company's press release showing its 2009 results is available for free at http://ResearchArchives.com/t/s?5726 About Graham Packaging Headquartered in York, Pennsylvania, Graham Packaging Holdings Company, -- http://www.grahampackaging.com/-- the parent company of Graham Packaging Company, L.P., is engaged in the design, manufacture and sale of customized blow molded plastic containers for the branded food and beverage, household, automotive lubricants and personal care/specialty product categories. As of the end of June 2008, the company operated 83 manufacturing facilities throughout North America, Europe and South America. Graham Packaging's consolidated balance sheets at September 30, 2009, showed $2.067 billion in total assets and $2.937 billion in total liabilities, resulting in a $869.6 million partners' deficit. GULFSTREAM CRANE: U.S. Trustee Appoints 3-Member Creditors Panel ---------------------------------------------------------------- Donald F. Walton, the U.S. Trustee for Region 21, appointed three members to the official committee of unsecured creditors in the Chapter 11 case of Gulfstream Crane, LLC. The Creditors Committee members are: 1. *David Sitton, vice president Cargo Logistics Network 1825-C Crossbeam Drive Charlotte, NC 28217 Tel: (704) 357-0474 Fax: (704) 357-0437 2. Gregory R. Teslia, president Crane Safety & Inspections, Inc. 7631 Normande Court Margate, FL 33063 Tel: (954) 646-2609 Fax: (954) 752-3976 3. Mel Eardley, II America Transport Systems, Inc. 121 Inter Park Blvd, No. 501 San Antonio, TX 78216 Tel: (210) 496-7333 Fax: (210) 496-4747 * Temporary chairperson of the committee. Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at the Debtor's expense. They may investigate the Debtor's business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. Those committees will also Attnempt to negotiate the terms of a consensual Chapter 11 plan -- almost always subject to the terms of strict confidentiality agreements with the Debtors and other core parties-in-interest. If negotiations break down, the Committee may ask the Bankruptcy Court to replace management with an independent trustee. If the Committee concludes reorganization of the Debtor is impossible, the Committee will urge the Bankruptcy Court to convert the Chapter 11 cases to a liquidation proceeding. Pompano Beach, Florida-based Gulfstream Crane, LLC, dba General Crane, filed for Chapter 11 bankruptcy protection on December 8, 2009 (Bankr. S.D. Fla. Case No. 09-37091). Michael D. Seese, Esq., who has an office in Fort Lauderdale, Florida, assists the Company in its restructuring effort. The Company listed $50,000,001 to $100,000,000 listed in assets and $50,000,001 to $100,000,000 in liabilities. HARRAH'S ENTERTAINMENT: HOC Bank Debt Trades at 100.42% ------------------------------------------------------- Participations in a syndicated loan under which Harrah's Operating Company, Inc., is a borrower traded in the secondary market at 100.42 cents-on-the-dollar during the week ended Friday, March 5, 2010, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 0.46 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 190 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. HAWKER BEECHCRAFT: Bank Debt Trades at 23% Off in Secondary Market ------------------------------------------------------------------ Participations in a syndicated loan under which Hawker Beechcraft is a borrower traded in the secondary market at 77.11 cents-on- the-dollar during the week ended Friday, March 5, 2010, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 3.93 percentage points from the previous week, The Journal relates. The Company pays 200 basis points above LIBOR to borrow under the facility. The bank loan matures on March 26, 2014, and carries Moody's Caa1 rating and Standard & Poor's CCC+ rating. The debt is one of the biggest gainers and losers among 190 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. 20, 2009, Moody's affirmed Hawker Beechcraft Acquisition Company LLC's Caa2 Corporate Family and Probability of Default ratings but lowered the rating on the company's senior secured bank obligations to Caa1 from B3 following announcement of plans to expand the size of its secured term loan. At the same time, ratings on Hawker Beechcraft's senior unsecured cash-pay and PIK election notes (Caa3) and subordinated notes (Ca) were affirmed. The company's Speculative Grade Liquidity rating was changed to SGL-4, designating weak liquidity, but is expected to improve once final amounts sourced from an incremental term loan are known. The outlook was revised to negative. The actions follow several developments: an amendment to the company's revolving credit facility reducing the size of the commitment and revising financial covenants, a proposed increase of $200 million to an existing $1,271 million term loan, disclosure of some $0.7 billion of non-cash impairment and other charges during the company's third quarter. On Nov. 19, 2009, the TCR stated that Standard & Poor's assigned its 'CCC+' issue-level rating to Hawker Beechcraft Acquisition Co. LLC's proposed $200 million incremental term loan, the same as the corporate credit rating on parent Hawker Beechcraft Inc., and a '4' recovery rating, which indicates S&P's expectation of average (30%-50%) recovery in a payment default scenario. In addition, S&P affirmed its 'CCC+' corporate credit rating on Wichita, Kansas-based Hawker Beechcraft. The company has about $2.15 billion of debt. HCA INC: Bank Debt Trades at 4% Off in Secondary Market ------------------------------------------------------- Participations in a syndicated loan under which HCA, Inc., is a borrower traded in the secondary market at 96.27 cents-on-the- dollar during the week ended Friday, March 5, 2010, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 1.50 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 Nov. 6, 2013, and carries Moody's Ba3 rating and Standard & Poor's BB rating. The debt is one of the biggest gainers and losers among 190 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. Headquartered in Nashville, Tennessee, HCA, Inc. -- http://www.hcahealthcare.com/-- is the nation's leading provider of healthcare services. As of June 30, 2008, HCA operated 169 hospitals and 107 freestanding surgery centers, including eight hospitals and eight freestanding surgery centers operated through equity method joint ventures. HCA, Inc. carries a 'B2' long term corporate family rating from Moody's, a 'B' long term issuer default rating from Fitch, and 'B+' issuer credit ratings from Standard & Poor's. HERBST GAMING: David Ross Inks Employment Agreement as COO/Gaming ----------------------------------------------------------------- David Ross has signed as Herbst Gaming, Inc.'s Chief Operating Officer/Gaming and a member of the Office of the Chief Executive Officer, effective January 1, 2010. The employment agreement provides for a term that expires on the earlier of (i) December 31, 2010, and (ii) the Substantial Completion Date, as defined in the Company's First Amended Joint Plan of Reorganization and as confirmed by the Amended Order Confirming Debtors' First Amended Plan of Reorganization issued January 22, 2010. Under the employment agreement, Mr. Ross receives an annual base salary of $600,000 and is entitled to participate in the Company's benefit plans and the Company's 2010 Management Incentive Plan on terms approved by the Board of Directors in its sole discretion. In the event Mr. Ross's employment is terminated by the Company without cause, subject to his execution of a general release of claims, Mr. Ross is entitled to salary continuation through the expiration of the term of the employment agreement. Mr. Ross's estate is also entitled to these salary continuation benefits in the event of his death during the term of the employment agreement. The employment agreement provides for a one-year post- termination non-solicitation covenant and a standard confidentiality covenant. Under the terms of the employment agreement, Mr. Ross is permitted, during the term of the employment agreement, to enter into an employment agreement with Reorganized Herbst Gaming, which will be the successor in interest to the Company upon the Substantial Consummation Date, provided that such employment agreement is not effective until after the Substantial Completion Date. Mr. Ross joined the Company as COO/Gaming in May 2009 in accordance with the lockup agreement between the Company and lenders holding, in the aggregate, a majority of all of the outstanding claims under the Company's Second Amended and Restated Credit Agreement, dated as of January 3, 2007, as amended, relating to the Company's restructuring. Prior to joining the Company, Mr. Ross spent twenty five years with Coast Casinos, a division of Boyd Gaming Corp., serving in a variety of management positions. Most recently, he served as Coast Casinos' Chief Operating Officer from 2004 to 2008. Mr. Ross holds a 20% interest in a limited liability company which owns a tavern. At the end of 2009, the tavern entered into a slot route agreement with E-T-T, Inc., one of the Company's subsidiaries. Mr. Ross is in the process of divesting his interest in the limited liability company. A full-text copy of the Employment Agreement is available at no charge at http://researcharchives.com/t/s?572f About Herbst Gaming Headquartered in Reno, Nevada, Herbst Gaming, Inc. -- http://www.herbstgaming.com/-- is a diversified gaming company. The Company and its subsidiaries focus on two business lines, slot route operations and casino operations. The Company's route operations involves the exclusive installation and, as of Sept. 30, 2009, operation of approximately 6,300 slot machines in non-casino locations, such as grocery stores, drug stores, convenience stores, bars and restaurants. The casino operations consist of 16 casinos located in Nevada, Iowa and Missouri. The Company and 17 of its affiliates filed for Chapter 11 protection on March 22, 2009 (Bankr. D. Nev. Lead Case No. 09-50752). Thomas H. Fell, Esq., and Gerald M. Gordon, Esq., at Gordon Silver, represent the Debtors in their restructuring efforts. Herbst Gaming had $919.1 million in total assets; and $33.5 million in total liabilities not subject to compromise and $1.24 billion in liabilities subject to compromise, resulting in $361.0 million in stockholders' deficiency as of March 31, 2009. On January 22, 2010, the Bankruptcy Court entered an amended order confirming Debtors' First Amended Plan of Reorganization issued January 22, 2010. On February 5, 2010, all conditions precedent to the effectiveness of the Plan were deemed to have been met, and the Plan was declared effective as of said date. The Court set March 22, 2010, as the Administrative Claim Bar Date for filing requests for payment of all administrative claims against the Debtors, including claims pursuant to 11 U.S.C. Section 503(b), and all final applications for allowance and disbursement of professional fees and trustee fees. HOVNANIAN ENTERPRISES: Swings to $236MM Net Income for Jan. 31 Qtr ------------------------------------------------------------------ Hovnanian Enterprises, Inc., reported net income of $236,189,000 for its first fiscal quarter ended January 31, 2010, from a net loss of $178,410,000 for the year ago period. Hovnanian Enterprises reported total revenues of $319,645,000 from homebuilding and financial services for the fiscal quarter from $373,784,000 in total revenues for the year ago period. At January 31, 2010, the Company had total assets of $2,100,187,000 against total liabilities of $2,210,881,000. Total equity deficit was $110,694,000 at January 31, 2010. At January 31, 2010, homebuilding cash was $449.6 million, including restricted cash required to collateralize letters of credit. This cash position does not include the $274.1 million federal income tax refund that was received early in the second quarter or an additional federal income tax refund for approximately $17.2 million expected to be received later in the year. Cash flow during the first quarter of fiscal 2010 was negative $74.7 million. During the quarter, $77.1 million of cash was spent on land purchases and $22.3 million of cash was used to retire debt. During the first quarter of fiscal 2010, home deliveries through unconsolidated joint ventures were 38 homes, compared with 75 homes in the first quarter of the previous year. "The first quarter saw the typical seasonal home buying patterns that we would expect," commented Ara K. Hovnanian, Chairman of the Board, President and Chief Executive Officer. "Traffic and net contracts dropped off around the Thanksgiving holiday, and we began to see a pickup in traffic and net contracts during the last half of January and into February. In the first quarter, we continued to see a couple of positive year-over-year comparisons, including an increase in gross margins and an increase in net contracts per active selling community." "We are pleased to see the market for new land deals begin to thaw out a bit and we continue to diligently pursue new land opportunities where we can make normalized returns based on today's home prices and sales absorption levels. Adhering to sound land underwriting assumptions will reduce risk and prove beneficial to our future financial performance," Mr. Hovnanian continued. "We opened ten communities during the first quarter," stated J. Larry Sorsby, Executive Vice President and Chief Financial Officer. "After nine consecutive quarters of decline, our community count stabilized on a sequential basis at 179 communities at the end of the first quarter, which was the same as the community count at the end of our fiscal year. As we take steps to return the Company to profitability, we must acquire additional new land parcels so that we can start growing our community count, which will boost revenues and drive greater operating efficiencies," said Mr. Sorsby. "It is encouraging that we have been able to continue to report improving margins and year-over-year increases in sales absorption rates. Although we remain cautiously optimistic, several headwinds such as persistently high unemployment levels, the expiration of the federal homebuyers tax credit and the threat of more foreclosures continue to hinder a sustainable recovery in the housing market," concluded Mr. Hovnanian. A full-text copy of the Company's earnings release is available at no charge at http://ResearchArchives.com/t/s?572a Shareholders' Meeting The Annual Meeting of Shareholders will be held on March 16, 2010, at the offices of Simpson Thacher & Bartlett LLP, 425 Lexington Avenue, in New York. The meeting will start promptly at 10:30 a.m. At the meeting, shareholders will take on these matters: -- The election of directors of the Company for the ensuing year, to serve until the next Annual Meeting of Shareholders of the Company, and until their successors may be elected and qualified; -- The ratification of the selection of Deloitte & Touche LLP, an independent registered public accounting firm, to examine the financial statements of the Company for the year ending October 31, 2010; -- The approval of amendments to the Company's Amended and Restated 2008 Stock Incentive Plan; and -- The transaction of other business as may properly come before the meeting and any adjournment thereof. A full-text copy of the proxy statement is available at no charge at http://ResearchArchives.com/t/s?572b About Hovnanian Enterprises Hovnanian Enterprises, Inc. (NYSE: HOV), founded in 1959 by Kevork S. Hovnanian, is headquartered in Red Bank, New Jersey. The Company is one of the nation's largest homebuilders with operations in Arizona, California, Delaware, Florida, Georgia, Illinois, Kentucky, Maryland, Minnesota, New Jersey, New York, North Carolina, Ohio, Pennsylvania, South Carolina, Texas, Virginia and West Virginia. The Company's homes are marketed and sold under the trade names K. Hovnanian(R) Homes(R), Matzel & Mumford, Brighton Homes, Parkwood Builders, Town & Country Homes, Oster Homes, First Home Builders of Florida and CraftBuilt Homes. As the developer of K. Hovnanian's(R) Four Seasons communities, the Company is also one of the nation's largest builders of active adult homes. * * * Hovnanian carries S&P's "CCC" corporate credit rating; Moody's "Caa1" corporate family rating; and Fitch's "CCC" Issuer Default Rating. HOLLY ENERGY: S&P Assigns 'B+' Rating on $150 Mil. Notes -------------------------------------------------------- Standard & Poor's Ratings Services said that it assigned its 'B+' rating to Holly Energy Partners L.P.'s proposed $150 million senior unsecured note offering. S&P has assigned a recovery rating of '5' to this debt, indicating expectations of modest (30%-50%) recovery in the event of a payment default. The midstream oil and gas company intends to use proceeds to help fund its $93 million acquisition from Holly Corp., as well as repay outstanding borrowings under its credit facility. As of Dec. 31, 2009, Dallas-based Holly Energy had $391 million in balance sheet debt. The corporate credit rating on Holly Energy is 'BB-' and the outlook is stable. Rating List Holly Energy Partners L.P. Corporate Credit Rating BB-/Stable/-- Rating Assigned Holly Energy Partners L.P. $150 Mil. Senior Unsec. Note Offering B+ Recovery Rating 5 HOVNANIAN ENTERPRISES: To Invest $40MM for 10% Stake in Developer ----------------------------------------------------------------- Hovnanian Enterprises, Inc., is considering an investment of roughly $40 million in a newly formed company. This investment would represent a non-controlling ownership interest in Newco of roughly 10%. Newco would identify, acquire and develop land parcels and finished residential building lots located primarily in major U.S. homebuilding markets for sale to homebuilders as residential building lots under option and purchase agreements. Ara Hovnanian, the Chairman of the Company's Board of Directors and its Chief Executive Officer, will become the non-executive Chairman of the Board of Directors of Newco, while continuing in his positions for the Company. Newco would acquire land parcels located in major U.S. homebuilding markets and enter into lot option contracts with Hovnanian and other homebuilders for the delivery of finished residential building lots, which are lots that are fully developed, entitled and permit-ready for residential home construction when the homebuilders are ready to commence construction, or on a "just-in-time" basis. The Company is contemplating entering into an exclusive preferred sourcing arrangement with Newco that covers the Company's current geographic footprint. The agreement would provide for an exclusivity period of three years during which the Company would generally be required to present to Newco all investment opportunities meeting specified criteria that are identified, sourced, procured or acquired by the Company, or presented by a third party to the Company, and located both within and outside the Company's geographic footprint. In addition, during the three-year exclusivity period, Newco would generally be required to present to the Company all investment opportunities meeting specified criteria that are identified, sourced, procured or acquired by Newco and located within the Company's geographic footprint. Newco would not be obligated to present to the Company any investment opportunities located outside the Company's geographic footprint, whether identified, sourced, procured or acquired by Newco or presented to Newco by third parties, at any time during the term of the agreement. The Company expects to offer a substantial number of land acquisition opportunities to Newco during the three-year term of this arrangement. Pursuant to the preferred sourcing agreement, the Company would sell certain properties to Newco and enter into lot option contracts with respect thereto at the time of its equity investment. Lot option contracts under the preferred sourcing agreement would include predetermined lot take down schedules and prices that provide Newco an internal rate of return of 20% plus an additional contingent payment of 25% of the amount by which the actual direct margin, based on the actual home sale revenue and direct costs, exceeds the Company's projected direct margin. About Hovnanian Enterprises Hovnanian Enterprises, Inc. (NYSE: HOV), founded in 1959 by Kevork S. Hovnanian, is headquartered in Red Bank, New Jersey. The Company is one of the nation's largest homebuilders with operations in Arizona, California, Delaware, Florida, Georgia, Illinois, Kentucky, Maryland, Minnesota, New Jersey, New York, North Carolina, Ohio, Pennsylvania, South Carolina, Texas, Virginia and West Virginia. The Company's homes are marketed and sold under the trade names K. Hovnanian(R) Homes(R), Matzel & Mumford, Brighton Homes, Parkwood Builders, Town & Country Homes, Oster Homes, First Home Builders of Florida and CraftBuilt Homes. As the developer of K. Hovnanian's(R) Four Seasons communities, the Company is also one of the nation's largest builders of active adult homes. * * * Hovnanian carries S&P's "CCC" corporate credit rating; Moody's "Caa1" corporate family rating; and Fitch's "CCC" Issuer Default Rating. IMPLANT SCIENCES: Posts $1.6-Mil. Net Loss for Dec. 31 Quarter -------------------------------------------------------------- Implant Sciences Corporation said in a statement that for its fiscal 2010 second quarter ended December 31, 2009, net loss was $1,624,000, or $0.10 per share, as compared with $2,061,000, or $0.15 per share, for the comparable prior year period. Net loss for the six months ended December 31, 2009 was $3,273,000, or $0.21 per share, as compared to $1,705,000, or $0.12 per share, for the comparable prior year period. Net loss for the three and six months ended December 31, 2008 included income from discontinued operations of $29,000 and $1,019,000, respectively. The Company's revenues for the three months ended December 31, 2009 were $603,000 as compared with $1,519,000 for the comparable prior year period, a decrease of $916,000 or 60.3%. Revenues for the six months ended Dec. 31, 2009 were $2,423,000 as compared with $7,467,000 for the comparable prior year period, a decrease of $5,044,000 or 67.6%. The decrease in security products revenues for the three and six months ended December 31, 2009, is primarily the result of a decrease in the number of units sold of our explosives detection products to customers in China and India. During the six months ended Dec. 31, 2008, the company made significant shipments of our handheld explosives detection equipment to a customer in China, aggregating approximately $4,169,000 in sales which shipments coincided with security preparations for the 2008 Beijing Olympics. Revenue from government contracts decreased in the three months and six months ended December 31 2009, due to the expiration of several contracts in the period. Gross margin for the three months ended Dec. 31, 2009 decreased to $126,000 or 20.9% of revenues as compared with gross margin of $638,000 or 42.0% of revenues for the comparable prior year period. Gross margin for the six months ended Dec. 31, 2009 decreased to $967,000 or 39.9% of revenues as compared with gross margin of $3,414,000 or 45.7% of revenues for the comparable prior year period. The decrease in gross margin for the three and six months ended Dec. 31, 2009 is a result of competitive pricing pressures, increased per unit manufacturing overhead, as overhead costs were allocated to a reduced volume, an increase in quality assurance costs and minimum guaranteed royalties due on licensed technology. Research and development expense for the three months ended Dec. 31, 2009 decreased 23.3% to $576,000 as compared with $751,000 for the comparable prior year period. For the six months ended Dec. 31, 2009 research and development expense decreased 33.9% to $1,171,000 as compared with $1,771,000 for the comparable prior year period. The decrease in research and development expenses in the three and six months ended Dec. 31, 2009, is due primarily to decreased payroll and related fringe benefits costs resulting from a reduction in personnel and reduced consulting fees. Selling, general and administrative expenses for the three months ended Dec. 31, 2009, decreased 46.1% to $842,000 as compared with $1,561,000 for the comparable prior year period. For the six months ended Dec. 31, 2009, selling, general and administrative expenses decreased 47.3% to $2,069,000 as compared with $3,927,000 for the comparable prior year period. The decrease in selling, general and administrative expenses in the three and six months ended Dec. 31, 2009, is due primarily to decreased payroll and related fringe benefits costs resulting from a reduction in personnel, decreased variable selling expenses due to the significant decrease in sales of our security products, decreased rent and related occupancy costs and decreased legal and audit fees, partially offset by an increase in consulting fees and increased loan financing fees. For the three and six months ended Dec. 31, 2009, the company recorded a lease termination benefit of $384,000 as compared with $0 for the comparable prior year period. The lease termination benefit resulted from the dismissal of litigation related to Accurel's lease obligations in California on October 28, 2009. Accurel has no further obligations or liabilities to the lessor under this lease. For the three months ended Dec. 31, 2009, the recorded other expense, net of $716,000 as compared with other expense, net of $416,000, for the comparable prior year period, an increase of $300,000. For the six months ended Dec. 31, 2009, the Company recorded other expense, net of $1,364,000 as compared with other expense, net of $440,000, for the comparable prior year period, an increase of $924,000. The increase in the three and six months ended Dec. 31, 2009, is due primarily to increased borrowings under our credit facility with DMRJ Group, LLC, and to higher interest rates on these borrowings and the realized gain of $468,000 on the transfer of our investment in CorNova common stock in connection with the senior secured convertible promissory note issued to DMRJ in December 2008. Loss from continuing operations for the three months ended Dec. 31, 2009, was $1,624,000 as compared with a loss of $2,090,000 for the comparable prior year period, a decrease of $466,000, or 22.3%. The decrease in loss from continuing operations is due primarily to a decrease in operating expenses and recognition of the lease termination benefit. Loss from continuing operations for the six months ended Dec. 31, 2009, was $3,253,000 as compared with a loss of $2,724,000 for the comparable prior year period, an increase of $529,000, or 19.4%. The increase in loss from continuing operations is due primarily to decreased sales of the company's security products, an increase in interest expense and the realized gain of $468,000 on the transfer of our investment in CorNova common stock in the six months ended Dec. 31, 2008, offset partially by a decrease in operating expenses and recognition of the lease termination benefit. As of Dec. 31, 2009, its cash position was $25,000 as compared to $0 as of June 30, 2009. Glenn D. Bolduc, President and CEO of Implant Sciences, commented, "Our second quarter was a quarter of dynamic change where several important objectives were met, and which we believe set the stage for our future growth and success. Most notably, on Jan. 14, 2010, the Company was awarded a $6 million contract for our Quantum SnifferTM QS-H150 Portable Explosives Detector and associated support by the Ministry of Defence, Government of India. The Company was successful in achieving "Designation" for the Company's Quantum SnifferTM technology under the Support Anti- terrorism by Fostering Effective Technology Act of 2002 from the U. S Department of Homeland Security. The Company successfully negotiated an amendment to our credit facility with DMRJ Group, LLC, which extended the maturity of all of our indebtedness from Dec. 10, 2009 to June 10, 2010, increased our line of credit, waived all existing defaults under the Company notes and reduced the interest payable on our obligations under the notes to 15%. Further, we have commenced a process to retain industry- experienced sales and marketing personnel to expand our worldwide and domestic presence. The Company believes the recent Christmas Day bombing attempt of Northwest Airlines flight #253 combined with its market research suggests growing global demand for explosives trace detection equipment and technology. The Company's own recent business development activities indicate significant opportunities for sales of our existing handheld explosives detection equipment in India, China and Pakistan. The Company believes there is significant demand for handheld explosives detection equipment, estimated by the Company to be as much as $80 million over the next 12 to 18 months. Mr. Bolduc concluded, "While gratified at the successful accomplishments in our second quarter, we are mindful that there are significant challenges ahead. The Company will require capital to execute its business plan and is actively engaged in the pursuit of additional funding. However, in spite of the obstacles, we believe we have now put in place the right team to overcome the hurdles and take advantage of the growing worldwide opportunities to demonstrate the benefits of Implant Sciences' security solutions." About Implant Sciences Implant Sciences Corporation (OBB: IMSC.OB) -- http://www.implantsciences.com/-- develops, manufactures and sells sensors and systems for the security, safety and defense (SS&D) industries. As reported by the Troubled Company Reporter on January 15, 2010, Implant Sciences renegotiated its credit agreements with its senior secured investor, DMRJ Group LLC. DMRJ increased Implant Sciences' line of credit from $3,000,000 to $5,000,000; extended the maturity of all of Implant Sciences' indebtedness from December 10, 2009, to June 10, 2010; waived all existing defaults through the new maturity date; reduced the interest rate payable on Implant Sciences' obligations to 15% per annum; and removed all profit sharing arrangements from the agreements. Implant Sciences' total indebtedness to DMRJ, including all principal and accrued interest, now stands at $7,570,000. INFORMATION SOLUTIONS: S&P Assigns 'BB' Corporate Credit Rating --------------------------------------------------------------- Standard & Poor's Ratings Services said it assigned its 'BB' corporate credit rating to Santa Ana, Calif.-based Information Solutions Co., the surviving corporation after the pending spin- off of the First American Corp.'s financial services businesses. The outlook is positive. At the same time, S&P assigned InfoCo's proposed $850 million senior secured credit facilities a 'BB+' rating, with a recovery rating of '2', indicating its expectation for substantial recovery (70%-90%) recovery in the event of a payment default. The proposed facilities consist of a $500 million revolving credit facility expiring 2012 and a $350 million first-lien term loan due 2016. The company will use the loan proceeds to refinance existing debt and general corporate purposes as part of its spin- off of The First American Corp.'s other businesses. "The ratings on InfoCo reflect the company's leadership position, long-term customer relationships, and good free cash flow," said Standard & Poor's credit analyst Philip Schrank. A dependence on the cyclical mortgage origination business, customer concentration, and a limited track record as a stand-alone company offset those factors. INTEGRA BANK: Continues to Defer Trust Preferred Dividends ---------------------------------------------------------- As reported in the Troubled Company Reporter on Nov. 9, 2009, Integra Bank Corporation (Nasdaq:IBNK) suspended the payment of cash dividends on its outstanding preferred stock and elected to defer the payment of interest on its outstanding junior subordinated notes related to its trust preferred securities. The terms of the junior subordinated notes and the trust documents allow the Company to defer payments of interest for up to five years without default or penalty. During the deferral period, the respective trusts will likewise suspend the declaration and payment of dividends on the trust preferred securities. Also during the deferral period, the Company may not, among other things and with limited exceptions, pay cash dividends on or repurchase its common stock or preferred stock nor make any payment on outstanding debt obligations that rank equally with or junior to the junior subordinated notes. The Company believes that the suspension of cash dividends on its preferred and common stock and the deferral of interest payments on the junior subordinated notes will preserve approximately $1.8 million per quarter (compared with the continuing level of dividend and interest payments), thereby enhancing liquidity and the Company's ability to bolster Integra Bank's capital ratios. The decision to defer payment of dividends and interest is in line with guidance issued by the Federal Reserve in February 2009, as revised in March 2009 (SR-09-4) related to payment of dividends on common and preferred stock, as well as interest on the subordinated notes underlying trust preferred securities. For the fourth quarter ending Dec. 31, 2009, Integra reported a $96.1 million net loss to common shareholders, and a net loss of $195 million for the year ending Dec. 31, 2009. Integra has been selling assets and continues to do so. Headquartered in Evansville, Indiana, Integra Bank Corporation -- http://www.integrabank.com/-- is the parent of Integra Bank N.A. As of Dec. 31, 2009, Integra Bank has $2.9 billion in total assets and operates 69 banking centers and 116 ATMs at locations in Indiana, Kentucky, Illinois and Ohio. INTELSAT LTD: Bank Debt Trades at 4% Off in Secondary Market ------------------------------------------------------------ Participations in a syndicated loan under which Intelsat, Ltd., is a borrower traded in the secondary market at 95.83 cents-on-the- dollar during the week ended Friday, March 5, 2010, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 0.48 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 July 7, 2013, and carries Moody's B1 rating and Standard & Poor's BB- rating. The debt is one of the biggest gainers and losers among 190 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. Headquartered in Pembroke, Bermuda, Intelsat, Ltd., formerly PanAmSat Corp., -- http://www.intelsat.com/-- is the largest fixed satellite service operator in the world and is owned by Apollo Management, Apax Partners, Madison Dearborn, and Permira. The company has a sales office in Brazil. Intelsat Ltd.'s balance sheet showed total assets of US$12.05 billion, total debts of US$12.77 billion and stockholders' deficit of US$722.3 million as of March 31, 2008. ISLE OF CAPRI: Bank Debt Trades at 3% 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 97.33 cents-on-the-dollar during the week ended Friday, March 5, 2010, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents a drop of 0.67 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 190 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. JANUS CAPITAL: S&P Affirms 'BB+' Counterparty Credit Rating ----------------------------------------------------------- Standard & Poor's Ratings Services said that it affirmed its ratings on Janus Capital Group Inc., including the 'BB+' long-term counterparty credit rating. At the same time, S&P revised the outlook to positive from stable. "The outlook revision reflects positive trends in Janus's earnings and cash-flow generation, as AUM has recovered from its March 2009 low; an improved balance sheet following the mid-2009 bond tender offer and common stock issuance that bolstered the company's liquidity position and reduced near-term debt maturities; and the installation of a new CEO whom S&P believes will steer Janus on a more conservative path than in the past," said Standard & Poor's credit analyst Charles D. Rauch. S&P has affirmed the ratings because the company retains a relatively high business risk profile for an asset manager, and its credit metrics, although improved, are not yet those of an investment-grade asset manager. Current ratings on Janus reflect its moderately high business and financial risk profiles. Janus's reputation as one of the larger sponsors of mutual funds in the country supports the ratings. Although many consider Janus to be an equity growth retail mutual fund shop, the company has successfully expanded its investment disciplines and distribution channels during the past few years. Nonetheless, the company remains heavily exposed to the U.S. and global stock markets, as equities comprise nearly 95% of total assets under management. The positive outlook reflects the improvements in Janus's financial posture and potential for higher earnings in 2010. S&P would consider raising the ratings if the company generates consistent long-term investment performance to build on the momentum of the past three quarters, so that key debt-servicing metrics comfortably reside within investment-grade criteria. This extra financial hurdle is necessary before S&P would consider an upgrade because S&P believes Janus has a higher-than-average business risk profile and its financial performance is still vulnerable if stock prices were to collapse again. Alternatively, if Janus's long-term investment performance were to suffer to an extent that net redemptions pick up and cash-flow generation materially weakens, S&P could lower its ratings on the company. JAPAN AIRLINES: To Cut 5% of Employees at Core Unit --------------------------------------------------- Japan Airlines Corp., which employs about 51,800 groupwide, aims to let go of 2,700 employees at its core unit, Japan Airlines International Co, and the rest at other group firms, Reuters reported citing the Nikkei Business Daily. According to Reuters, the carrier, which did not disclose how much severance pay early retirees are to receive, will start with 400 flight crew and ground staff managers. Retirements will take effect April 30 and JAL is expected to book the associated costs as an extraordinary loss for next fiscal year, the report added. Earlier in January, JAL filed for protection from creditors with more than $25 billion in debts, making it Japan's biggest-ever bankruptcy by a non-financial firm, and vowed to slash 30 percent of its work force and axe money-losing routes. Selling off subsidiaries is supposed to eliminate at least 10,000 jobs, but that process could prove difficult, making it necessary to expand early retirement offerings, Reuters added. About Japan Airlines Japan Airlines Corporation -- http://www.jal.co.jp/-- is a Japan-based company mainly engaged in the provision of air transport services. The Company is active in five business segments through its 203 subsidiaries and 83 associated companies. JAL International Co. Ltd. is a wholly owned operating subsidiary of Japan Airlines Corporation. Japan Airlines Corporation, Japan Airlines International Co., Ltd. and JAL Capital Co., Ltd., on January 19, 2010, filed the petitions to commenced corporate reorganization proceedings with the Tokyo District Court. The Court appointed the Enterprise Turnaround Initiative Corporation of Japan and Eiji Katayama, Esq., as reorganization trustees. Japan Airlines Corp. filed for reorganization January 19 in the Tokyo District Court and filed a Chapter 15 petition in New York (Bankr. S.D.N.Y. Case No. 10-10198). The Company said debt is $28 billion. Bankruptcy Creditors' Service, Inc., publishes Japan Airlines Bankruptcy News. The newsletter tracks the Chapter 15 proceedings and the bankruptcy proceedings in Tokyo undertaken by Japan Airlines Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) KAINOS PARTNERS: Gets Interim Approval to Use Dunkin Brands Cash ---------------------------------------------------------------- The Hon. Brendan L. Shannon of the U.S. Bankruptcy Court for the District of Delaware authorized, on an interim basis, Kainos Partners Holding Company, LLC, et al., to: -- borrow funds and obtain extensions of credit up to $500,000 from Dunkin Brands, Inc.; and -- provide superpriority administrative expense status in connection with the second DIP financing. A final hearing on the Debtors' access to the cash collateral will be held on March 31, 2010. Objections, if any, are due on March 26, 2010, at 12:00 p.m. (Eastern Time.) The Debtors were unable to obtain unsecured credit under the terms and conditions as set forth in the second DIP loan financing documents. The DIP lender consented to the Debtors' use of cash collateral from March 1 until April 1. The Debtors would use the funds and financial accommodations to continue their ordinary course operations, meet their payroll and other necessary, ordinary course business expenditures, acquire goods and services, and administer and preserve the value of the estates. The Debtors' authority to use the cash collateral will expire on: (i) April 1, 2010; and (ii) the occurrence of an event of default or a termination event. About Kainos Partners Holding Company Greer, South Carolina-based Kainos Partners Holding Company, LLC - - http://www.kainospartners.com/-- operates the "donut-and- coffee" franchises. The Company and its affiliates filed for Chapter 11 on July 6, 2009 (Bankr. D. Del. Lead Case No. 09-12292). Two of its affiliates filed for separate Chapter 11 petitions on Sept. 15, 2009 (Bankr. D. Del. Case Nos. 09-13213 to 09-13214). An affiliate filed for separate Chapter 11 petition on Sept. 23, 2009 (Bankr. D. Del. Case No. 09-13285). Attorneys at the Law Offices of Joseph J. Bodnar represent the Debtors in their restructuring efforts. The Debtor did not file a list of 20 largest unsecured creditors. In its petition, the Debtors listed assets and debts both ranging from $10 million and $50 million. KORLEY SEARS: Files Schedules of Assets & Liabilities ----------------------------------------------------- Korley B. Sears has filed with the U.S. Bankruptcy Court for the District of Nebraska its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ------ ----------- A. Real Property $3,251,101 B. Personal Property $314,129 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $24,388,385 E. Creditors Holding Unsecured Priority Claims $0 F. Creditors Holding Unsecured Non-priority Claims $5,429,214 ------------- ------------ TOTAL $3,565,230 $29,817,599 Ainsworth, Nebraska-based Korley B. Sears filed for Chapter 11 bankruptcy protection on February 2, 2010 (Bankr. D. Neb. Case No. 10-40277). Jerrold L. Strasheim, Esq., who has an office in Omaha, Nebraska, assists the Company in its restructuring effort. The Company listed $1,000,001 to $10,000,000 in assets and $10,000,001 to $50,000,000 in liabilities. KORLEY SEARS: Section 341(a) Meeting Scheduled for March 11 ----------------------------------------------------------- The U.S. Trustee for Region 13 will convene a meeting of creditors in Korley B. Sears' Chapter 11 case on March 11, 2010, at 1:30 p.m. The meeting will be held at the U.S. Trustee Meeting Room, 1st Floor, Roman L. Hruska U.S. Courthouse, 111 South 18th Plaza, Omaha, Nebraska. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Ainsworth, Nebraska-based Korley B. Sears filed for Chapter 11 bankruptcy protection on February 2, 2010 (Bankr. D. Neb. Case No. 10-40277). Jerrold L. Strasheim, Esq., who has an office in Omaha, Nebraska, assists the Company in its restructuring effort. The Company listed $1,000,001 to $10,000,000 in assets and $10,000,001 to $50,000,000 in liabilities. KORLEY SEARS: Taps Jerrold Strasheim as Bankruptcy Counsel ---------------------------------------------------------- Korley B. Sears has asked for permission from the U.S. Bankruptcy Court for the District of Nebraska to employ Jerrold L. Strasheim as bankruptcy counsel. Mr. Strasheim will advise, represent and assist the Debtor in performing the Debtor's duties and exercising the rights and powers of a debtor-in-possession. Mr. Strasheim assures the Court that he is "disinterested" as that term is defined in Section 101(14) of the Bankruptcy Code. The Debtor and Mr. Strasheim didn't disclose how Mr. Strasheim will be compensated for his services. Ainsworth, Nebraska-based Korley B. Sears filed for Chapter 11 bankruptcy protection on February 2, 2010 (Bankr. D. Neb. Case No. 10-40277). The Company listed $1,000,001 to $10,000,000 in assets and $10,000,001 to $50,000,000 in liabilities. LANDAMERICA FIN'L: OneStop Plan Declared Effective March 1 ---------------------------------------------------------- The Joint Chapter 11 Plan of LandAmerica Financial Group, Inc., and its debtor affiliates as to LandAmerica OneStop, Inc., has been deemed effective as of March 1, 2010. OneStop has satisfied the conditions precedent to the effectiveness of the Plan. OneStop is a wholly owned subsidiary of LFG, which filed for bankruptcy on November 4, 2009, for the purpose of completing the winddown of its operations and providing a fair and equitable distribution of its estate to its stakeholders. As previously reported, the Chapter 11 Plan as to OneStop was confirmed by Judge Kevin Huennekens of the United States Bankruptcy Court for the District of Virginia on February 16, 2010. Claim Bar Dates By virtue of the Effective Date Notice and pursuant to the Plan and the Confirmation Order, each holder of an Administrative Expense Claim, other than the Internal Revenue Service and the holders of certain other Administrative Expense Claims noted under the Plan, must file with the Court and serve on: (a) OneStop; (b) the Subsidiary Debtor Trustee; and (c) the Debtors' Claims Agent, a proof of the Administrative Expense Claim within on or before March 31, 2010. Each Professional Person who holds or asserts a Fee Claim, other than ordinary course professionals retained by OneStop pursuant to a Court order, are required to file with the Court, and serve on all parties required to receive notice, a Fee Application on or before April 12, 2010. Moreover, pursuant to the Plan and the Confirmation Order, all proofs of Claim with respect to Claims arising from the rejection of executory contracts or unexpired leases, to the extent not subject to an earlier Bar Date set by a Court order, must be filed with the Court or served on the Claims Agent, on or before March 31, 2010. Failure to file and serve proof of claims in a timely and proper manner will result in the claims being forever barred and disallowed. Schedule of Assumed Contracts Shortly before the occurrence of the Plan Effective Date, OneStop delivered to the Court a schedule of its assumed contracts under the confirmed Chapter 11 Plan. The Contracts consist of non-residential real property leases and ground leases with, among others, Sprint PCS Assets LLC, PCS Leasing Company L.P., and T&F Acquisition Group, LLC. OneStop proposed a $0 cure amount for the Contracts. A full-text copy of OneStop's Schedule on Assumed Contracts as delivered to the Court on February 28, 2010, is available for free at http://bankrupt.com/misc/OneStop_SchedofAssumedContracts.pdf About LandAmerica Financial LandAmerica Financial Group, Inc., provides real estate transaction services with offices nationwide and a vast network of active agents. LandAmerica and its affiliates operate through approximately 700 offices and a network of more than 10,000 active agents throughout the world, including Mexico, Canada, the Caribbean, Latin America, Europe, and Asia. LandAmerica Financial Group and its affiliate LandAmerica 1031 Exchange Services, Inc., filed for Chapter 11 protection November 26, 2008 (Bankr. E.D. Va. Lead Case No. 08-35994). Attorneys at Willkie Farr & Gallagher LLP and McGuireWoods LLP serve as co-counsel. Zolfo Cooper is the restructuring advisor. Epiq Bankruptcy Solutions serves as claims and notice agent. Attorneys at Akin Gump Strauss Hauer & Feld LLP and Tavenner & Beran, PLC, serve as counsel to the Creditors Committee of 1031 Exchange. Bingham McCutchen LLP and LeClair Ryan serve as counsel to the Creditors Committee of LFG. In its bankruptcy petition, LFG listed total assets of $3,325,100,000, and total debts of $2,839,800,000 as of September 30, 2008. On March 6, 2009, affiliate LandAmerica Assessment Corporation, aka National Assessment Corporation, filed its own petition for Chapter 11 relief. Affiliate LandAmerica Title Company filed for for Chapter 11 relief on March 27, 2009. LandAmerica Credit Services, Inc., filed for Chapter 11 in July 2009. Bankruptcy Creditors' Service, Inc., publishes LandAmerica Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by LandAmerica Financial and its affiliate LandAmerica 1031 Exchange Services, Inc. (http://bankrupt.com/newsstand/or 215/945-7000) LANDAMERICA FIN'L: Trustee Sues Fidelity for $50 Million -------------------------------------------------------- Bruce H. Matson, Trustee for the LandAmerica Financial Group, Inc. Liquidation Trust, initiated a complaint against Fidelity National Financial, Inc., in the U.S. Bankruptcy Court for the Eastern District of Virginia on February 26, 2010. Under the Complaint, the LFG Trustee seeks to enforce the terms of certain Subordinated Notes Due 2013 made by Fidelity National Financial, Inc., as partial consideration for, and delivered to, LandAmerica Financial Group, Inc. in connection with FNF's purchase of certain LFG assets pursuant that a Stock Purchase Agreement dated November 25, 2008, as amended. The Notes are currently held by the LFG Trust. The LFG Trustee asserts that FNF defaulted on the Note by failing to pay the interest payment, due on December 22, 2009, on the payment due date or within any grace period provided by the terms of the Note. Michael E. Hastings, Esq., at LeClairRyan, in Richmond, Virginia, contends that FNF's default under the Note constitutes a breach of the Note and thus: -- the LFG Trust is entitled to judgment in the principal amount of $50,000,000, plus all interest and other charges provided under the Note from the issuance date of the Note until the date of judgment at an annual rate of interest of 2.36% and thereafter; -- the LFG Trust will be entitled to interest at the federal judgment rate from the date of judgment until the entire outstanding indebtedness under the Note is paid in full. The LFG Trustee informs the Court that he has notified FNF by a letter dated February 25, 2010, of an acceleration of the total outstanding indebtedness represented by the Note in light of the alleged breach. Mr. Hastings tells Judge Heunnekens that the LFG Trustee has incurred professional fees and expenses arising out of his efforts to enforce the Note. He notes that the LFG Trustee will continue to incur those fees and expenses until all of the aggregate outstanding balance of the Note, including all principal, interest and other charges provided under the Note and the Stock Purchase Agreement are paid in full. Accordingly, the LFG Trustee asks the Court to grant judgment in his favor: (a) in the amount of $50,000,000, plus all accrued interest from the issuance date of the Note until the date of judgment at the rate provided under the Note, plus all expenses, including attorneys' fees incurred in obtaining the judgment, plus (b) an award of post-judgment interest at the federal judgment rate from the date of judgment until the entire outstanding indebtedness under the Note is paid in full. About LandAmerica Financial LandAmerica Financial Group, Inc., provides real estate transaction services with offices nationwide and a vast network of active agents. LandAmerica and its affiliates operate through approximately 700 offices and a network of more than 10,000 active agents throughout the world, including Mexico, Canada, the Caribbean, Latin America, Europe, and Asia. LandAmerica Financial Group and its affiliate LandAmerica 1031 Exchange Services, Inc., filed for Chapter 11 protection November 26, 2008 (Bankr. E.D. Va. Lead Case No. 08-35994). Attorneys at Willkie Farr & Gallagher LLP and McGuireWoods LLP serve as co-counsel. Zolfo Cooper is the restructuring advisor. Epiq Bankruptcy Solutions serves as claims and notice agent. Attorneys at Akin Gump Strauss Hauer & Feld LLP and Tavenner & Beran, PLC, serve as counsel to the Creditors Committee of 1031 Exchange. Bingham McCutchen LLP and LeClair Ryan serve as counsel to the Creditors Committee of LFG. In its bankruptcy petition, LFG listed total assets of $3,325,100,000, and total debts of $2,839,800,000 as of Sept. 30, 2008. On March 6, 2009, affiliate LandAmerica Assessment Corporation, aka National Assessment Corporation, filed its own petition for Chapter 11 relief. Affiliate LandAmerica Title Company filed for for Chapter 11 relief on March 27, 2009. LandAmerica Credit Services, Inc., filed for Chapter 11 in July 2009. Bankruptcy Creditors' Service, Inc., publishes LandAmerica Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by LandAmerica Financial and its affiliate LandAmerica 1031 Exchange Services, Inc. (http://bankrupt.com/newsstand/or 215/945-7000) LANDAMERICA FIN'L: Trustee Wants Until Oct. 4 to Object to Claims ----------------------------------------------------------------- Gerard A. McHale, Jr., as trustee of the LandAmerica 1031 Exchange Services, Inc. Liquidation Trust, asks Judge Heunnekens to extend the deadline by which he can file objections to claims on behalf of the LES Trust and the LES estate through October 4, 2010. The LES Trustee notes that he currently has authority to object to claims filed against the LES estate until April 6, 2010, pursuant to the confirmed Joint Chapter 11 Plan of LandAmerica Financial Group, Inc., and its affiliated debtors. The LES Trustee avers that he has been reviewing, analyzing and reconciling claims. He, however, notes that he will not be able to address and resolve all of the claims before the current April 6 deadline objection deadline. As of February 26, 2010, the Debtors and their Liquidation Trustees have filed objections to approximately 1,787 claims and expect to either resolve or file objections to the remaining claims in the near future. The LES Trustee expects to be able to conclude his claims review and file the appropriate objections before the expiration of the new proposed Claims Objection Deadline. Nevertheless, out of an abundance of caution, the LES Trustee seeks that any order entered with respect to his request be without prejudice to his right to seek further extensions of the Claims Objection Deadline. About LandAmerica Financial LandAmerica Financial Group, Inc., provides real estate transaction services with offices nationwide and a vast network of active agents. LandAmerica and its affiliates operate through approximately 700 offices and a network of more than 10,000 active agents throughout the world, including Mexico, Canada, the Caribbean, Latin America, Europe, and Asia. LandAmerica Financial Group and its affiliate LandAmerica 1031 Exchange Services, Inc., filed for Chapter 11 protection November 26, 2008 (Bankr. E.D. Va. Lead Case No. 08-35994). Attorneys at Willkie Farr & Gallagher LLP and McGuireWoods LLP serve as co-counsel. Zolfo Cooper is the restructuring advisor. Epiq Bankruptcy Solutions serves as claims and notice agent. Attorneys at Akin Gump Strauss Hauer & Feld LLP and Tavenner & Beran, PLC, serve as counsel to the Creditors Committee of 1031 Exchange. Bingham McCutchen LLP and LeClair Ryan serve as counsel to the Creditors Committee of LFG. In its bankruptcy petition, LFG listed total assets of $3,325,100,000, and total debts of $2,839,800,000 as of Sept. 30, 2008. On March 6, 2009, affiliate LandAmerica Assessment Corporation, aka National Assessment Corporation, filed its own petition for Chapter 11 relief. Affiliate LandAmerica Title Company filed for for Chapter 11 relief on March 27, 2009. LandAmerica Credit Services, Inc., filed for Chapter 11 in July 2009. Bankruptcy Creditors' Service, Inc., publishes LandAmerica Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by LandAmerica Financial and its affiliate LandAmerica 1031 Exchange Services, Inc. (http://bankrupt.com/newsstand/or 215/945-7000) LAS VEGAS SANDS: Bank Debt Trades at 12% Off in Secondary Market ---------------------------------------------------------------- Participations in a syndicated loan under which Las Vegas Sands Corp. is a borrower traded in the secondary market at 87.73 cents- on-the-dollar during the week ended Friday, March 5, 2010, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 2.48 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 190 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. LEAP WIRELESS: Net Loss Widens to $241.08-Mil. for 2009 ------------------------------------------------------- Leap Wireless International, Inc., posted wider net loss of $241,078,000 for the year ended December 31, 2009, from a net loss of $145,077,000 for 2008 and $71,333,000 for 2007. Total revenues were $2,383,162,000 for 2009 from $1,958,862,000 for 2008 and $1,630,803,000 for 2007. At December 31, 2009, the Company had total assets of $5,380,697,000 against total liabilities of total liabilities of $3,596,896,000 and redeemable noncontrolling interests of $71,632,000, resulting in stockholder's equity of $1,712,169,000. As of December 31, 2009, Leap had $2.750 billion in senior indebtedness outstanding, which comprised $1.100 billion of 9.375% unsecured senior notes due 2014, $250 million of 4.5% convertible senior notes due 2014, $300 million of 10.0% unsecured senior notes due 2015 and $1,100 million of 7.75% senior secured notes due 2016. The indentures governing Cricket's secured and unsecured senior notes contain covenants that restrict the ability of Leap, Cricket and the subsidiary guarantors to take certain actions, including incurring additional indebtedness beyond specified thresholds. A full-text copy of Leap's annual report on Form 10-K is available at no charge at http://ResearchArchives.com/t/s?572c A full-text copy of Leap's earnings release is available at no charge at http://ResearchArchives.com/t/s?572d About Leap Wireless Headquartered in San Diego, California, Leap Wireless International, Inc. (NASDAQ: LEAP) -- http://www.leapwireless.com/ -- and its joint ventures provide wireless services in 34 states and the District of Columbia and hold licenses in 35 of the top 50 U.S. markets. Through its affordable, flat-rate service plans, Cricket offers customers a choice of unlimited voice, text, high- speed data and mobile Web services. Leap spun out from Qualcomm Inc. in 1998 and expanded primarily into rural markets. It has customers in 34 states and annual sales around $2.3 billion, making it the seventh-largest wireless carrier in the U.S., according to The Wall Street Journal. * * * According to the Troubled Company Reporter on April 29, 2009, Standard & Poor's Ratings Services revised its outlook on Leap Wireless International Inc. to positive from stable. At the same time, S&P affirmed its ratings on the San Diego-based wireless carrier, including the "B-" long-term corporate credit rating and "B+" secured bank loan rating on subsidiary Cricket Communications Inc. LEAP WIRELESS: Registers 100,000 Shares Under 2009 Equity Plan -------------------------------------------------------------- Leap Wireless International, Inc., filed with the Securities and Exchange Commission a Form S-8 Registration Statement under the Securities Act of 1933 for the offer and sale of an additional 100,000 shares of Leap common stock for issuance under the 2009 Employment Inducement Equity Incentive Plan of Leap Wireless International, Inc., as amended. The maximum aggregate amount of aggregate offering price is $1,434,000. A full-text copy of the Company's registration statement is available at no charge at http://ResearchArchives.com/t/s?572e About Leap Wireless Headquartered in San Diego, California, Leap Wireless International, Inc. (NASDAQ: LEAP) -- http://www.leapwireless.com/ -- and its joint ventures provide wireless services in 34 states and the District of Columbia and hold licenses in 35 of the top 50 U.S. markets. Through its affordable, flat-rate service plans, Cricket offers customers a choice of unlimited voice, text, high- speed data and mobile Web services. Leap spun out from Qualcomm Inc. in 1998 and expanded primarily into rural markets. It has customers in 34 states and annual sales around $2.3 billion, making it the seventh-largest wireless carrier in the U.S., according to The Wall Street Journal. At December 31, 2009, the Company had total assets of $5,380,697,000 against total liabilities of total liabilities of $3,596,896,000 and redeemable noncontrolling interests of $71,632,000, resulting in stockholder's equity of $1,712,169,000. * * * According to the Troubled Company Reporter on April 29, 2009, Standard & Poor's Ratings Services revised its outlook on Leap Wireless International Inc. to positive from stable. At the same time, S&P affirmed its ratings on the San Diego-based wireless carrier, including the "B-" long-term corporate credit rating and "B+" secured bank loan rating on subsidiary Cricket Communications Inc. LEVEL 3 COMMS: Bank Debt Trades at 9% Off in Secondary Market ------------------------------------------------------------- Participations in a syndicated loan under which Level 3 Communications, Inc., is a borrower traded in the secondary market at 90.63 cents-on-the-dollar during the week ended Friday, March 5, 2010, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 0.60 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 B1 rating and Standard & Poor's B+ rating. The debt is one of the biggest gainers and losers among 190 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. LODGENET INTERACTIVE: Federated Investors Holds 14.03% Stake ------------------------------------------------------------ Federated Investors, Inc., disclosed that as of December 31, 2009, it may be deemed to beneficially own 3,677,249 shares or roughly 14.03% of the common stock of LodgeNet Interactive Corporation. Sioux Falls, South Dakota-based LodgeNet Interactive Corporation (Nasdaq:LNET) -- http://www.lodgenet.com/-- provides media and connectivity solutions designed to meet the unique needs of hospitality, healthcare and other guest-based businesses. LodgeNet Interactive serves more than 1.9 million hotel rooms worldwide in addition to healthcare facilities throughout the United States. The Company's services include: Interactive Television Solutions, Broadband Internet Solutions, Content Solutions, Professional Solutions and Advertising Media Solutions. LodgeNet Interactive Corporation owns and operates businesses under the industry leading brands: LodgeNet, LodgeNetRX, and The Hotel Networks. The Company reported $508.3 million in assets and $579.3 million in total liabilities, resulting to a $71.0 million stockholders' deficit as of Dec. 31, 2009. * * * According to the Troubled Company Reporter on Sept. 30, 2009, Moody's Investors Service upgraded LodgeNet Interactive Corporation's speculative grade liquidity rating to SGL-3 (indicating adequate liquidity) from SGL-4 (indicating poor liquidity) while revising the outlook for all ratings to stable from negative. Concurrently, Moody's also affirmed LodgeNet's B3 corporate family rating and Caa1 probability of default rating. LODGENET INTERACTIVE: Morgan Stanley Holds De Minimis Stake ----------------------------------------------------------- Morgan Stanley and Morgan Stanley Capital Services Inc. disclosed that as of December 31, 2009, they may be deemed to beneficially own 74,749 shares or roughly .3% of the common stock of LodgeNet Interactive Corporation. Sioux Falls, South Dakota-based LodgeNet Interactive Corporation (Nasdaq:LNET) -- http://www.lodgenet.com/-- provides media and connectivity solutions designed to meet the unique needs of hospitality, healthcare and other guest-based businesses. LodgeNet Interactive serves more than 1.9 million hotel rooms worldwide in addition to healthcare facilities throughout the United States. The Company's services include: Interactive Television Solutions, Broadband Internet Solutions, Content Solutions, Professional Solutions and Advertising Media Solutions. LodgeNet Interactive Corporation owns and operates businesses under the industry leading brands: LodgeNet, LodgeNetRX, and The Hotel Networks. The Company reported $508.3 million in assets and $579.3 million in total liabilities, resulting to a $71.0 million stockholders' deficit as of Dec. 31, 2009. * * * According to the Troubled Company Reporter on September 30, 2009, Moody's Investors Service upgraded LodgeNet Interactive Corporation's speculative grade liquidity rating to SGL-3 (indicating adequate liquidity) from SGL-4 (indicating poor liquidity) while revising the outlook for all ratings to stable from negative. Concurrently, Moody's also affirmed LodgeNet's B3 corporate family rating and Caa1 probability of default rating. MCCLATCHY CO: Rebounds in 2009 with $54 Million of Net Income ------------------------------------------------------------- The McClatchy Company reported a net income of $54.0 million for the year ended Dec. 27, 2009, compared with $3.95 million net loss for the same year a year ago. Total revenue was at $1.47 billion in fiscal 2009, compared with $1.9 billion in fiscal 2008. The Company's balance sheet at Dec. 27, 2009, showed $3.30 billion in total assets and $2.86 billion in total liabilities. The Company's cash and cash equivalents were $6.2 million as of Dec. 27, 2009. In fiscal 2009 and fiscal 2008 all available cash was used to pay down debt on the Company's revolving credit line under its original credit agreement to minimize interest costs. The Company generated $131.6 million, $194.3 million and $356.3 million of cash from operating activities of continuing operations in fiscal 2009, 2008 and 2007, respectively. The decrease in cash from operating activities in from 2007 to 2009 primarily relates to lower advertising revenues and receipts due largely to the ongoing economic recession. The Company did not make any voluntary contributions to its qualified defined benefit pension plans during the last three years. The Company expects to make contributions to the qualified pension plan of approximately $22.0 million in 2010. The poor state of the capital markets in 2008 resulted in the Company's pension plans having investment losses in 2008, resulting in projected benefit obligations of the qualified pension plan exceeded plan assets by $611.2 million at the end of fiscal 2008. As a result of strong investment returns in 2009 partially offset by lower discount rates used to value pension obligations, the underfunded status improved to $500.0 million as of the end of fiscal 2009. Required contributions in years after 2010, while not yet known, are expected to be substantially higher than the 2010 amounts over the next seven years to eliminate the underfunded amount. Asset returns, the level of discount rates and government legislation could ultimately have an impact on the actual amount of required contributions. The Company used $8.4 million in cash from discontinued operations in 2009 relating primarily to income taxes paid in settlements of open tax issues related to newspapers which were disposed. In fiscal 2008 the Company generated $187.6 million in cash from discontinued operations which was primarily from a $185 million income tax refund related to the sale of The Star Tribune Company. The Company used the proceeds from the refund to repay debt. In 2009, the Company used $0.1 million of cash from investing activities primarily due to the receipt of $13.5 million in proceeds from selling various assets and receipts, net of closing adjustments, related to the sale of its interest in the SP Newsprint Company. These sources were offset by purchases of property, plant and equipment totaling $13.6 million. Capital expenditures have averaged $31.9 million annually over the last three years, and are expected to total about $20 million in 2010. The Company generated $74.0 million of cash from investing activities of continuing operations in fiscal 2008. In 2008, the Company received $63.1 million in proceeds from the sales of the Company's interests in SP and ShopLocal, and $33.2 million in proceeds from the sale of other assets. These inflows were offset by the purchase of property, plant and equipment totaling $21.4 million. The Company used the proceeds it received from the sale of SP, ShopLocal and other asset sales to reduce debt. The Company owns 10 acres of land in Miami which is currently under contract to sell for a price of approximately $190.0 million with after-tax net proceeds of approximately $115.0 million. The contract was amended on January 19, 2010, and provides for the buyer to close the transaction by January 31, 2011. The Company had previously received a non refundable cash deposit of $10 million as well as an additional non-refundable cash deposit of $6.0 million in January 2010 in consideration for this extension. The deposits received were used to reduce long-term debt. If the buyer fails to close the transaction the Company is entitled to a $7.0 million termination fee. The Company wrote down the carrying value of the land by $26.3 million in 2009. See an expanded discussion of this transaction in Note 4 in the Consolidated Financial Statements. The Company used $121.9 million to fund financing activities in fiscal 2009. During the second quarter of fiscal 2009, the Company repaid $31.0 million in bonds due on April 15, 2009. The Company also paid an aggregate of $7.1 million in cash and related expenses and issued $24.2 million of 15.75% senior notes due July 15, 2014, in total consideration to retire $102.8 million in publicly traded debt securities in its June 2009 private exchange offer. In fiscal 2009, the Company repaid $3.2 million of its Term A loan under its original credit agreement, reduced its revolving bank debt by $61 million under its original credit agreement, and paid $5.7 million in fees to amend its original credit agreement. The Company also paid $14.9 million in dividends in fiscal 2009. The Company suspended its dividend after the payment of the first quarter dividend in 2009. The Company is restricted from paying dividends after June 2009 if its leverage is greater than three times its EBITDA. The Company used $476.7 million of cash to fund financing transactions in fiscal 2008. A total of $300.9 million in cash, including offering expenses, was used to repurchase $319.0 million in face value of bonds and $116.9 million was used to repay bank debt. The Company also paid $9.7 million in financing costs relating to amending its original credit agreement in the first and third fiscal quarters of 2008 and paid $51.8 million in dividends. In 2007, cash from financing sources was primarily used to repay bank debt, to retire $100 million in public notes which matured and to pay $59.0 million in dividends. While the Company expects that most of its free cash flow generated from operations in the foreseeable future will be used to repay debt, management believes that operating cash flow and liquidity under its credit facilities as described below are adequate to meet the liquidity needs of the Company, including currently planned capital expenditures and other investments at least for the next twelve months. A full-text copy of the Company's annual report on Form 10-K is available for free at http://ResearchArchives.com/t/s?5720 About McClatchy Company The McClatchy Company is the third largest newspaper company in the United States, with 30 daily newspapers, 43 non-dailies, and direct marketing and direct mail operations. McClatchy also operates leading local websites in each of its markets which extend its audience reach. The websites offer users comprehensive news and information, advertising, e-commerce and other services. Together with its newspapers and direct marketing products, these interactive operations make McClatchy the leading local media company in each of its premium high growth markets. McClatchy- owned newspapers include The Miami Herald, The Sacramento Bee, the Fort Worth Star-Telegram, The Kansas City Star, The Charlotte Observer, and The News & Observer (Raleigh). McClatchy also owns a portfolio of premium digital assets, including 14.4% of CareerBuilder, the nation's largest online job site, 25.6% of Classified Ventures, a newspaper industry partnership that offers two of the nation's premier classified websites: the auto website, cars.com, and the rental site, Apartments.com and 33.3% of HomeFinder, LLC which operates the real estate website HomeFinder.com. McClatchy is listed on the New York Stock Exchange under the symbol MNI. At September 27, 2009, the Company had $3,325,395,000 in total assets against $275,532,000 in total current assets and $2,947,256,000 in total non-current liabilities. * * * Troubled Company Reporter said on Feb. 15, 2010, Moody's Investors Service upgraded The McClatchy Company's Corporate Family Rating to Caa1 from Caa2, Probability of Default Rating to Caa1 from Caa2, and senior unsecured and unguaranteed note ratings to Caa2 from Caa3, concluding the review for upgrade initiated on January 27, 2010. Moody's also assigned definitive B1 ratings to McClatchy's $875 million senior secured notes due 2017 and the approximate $397 million extended portion of its senior secured credit facility, and upgraded the company's speculative-grade liquidity rating to SGL-2 from SGL-4. The upgrades reflect McClatchy's improved liquidity position and reduced near-term default risk following completion of the company's refinancing, and its ability to stabilize EBITDA performance through significant cost reductions. The rating outlook is stable. As reported by the Troubled Company Reporter on January 14, 2010, Fitch Ratings placed The McClatchy Company's Issuer Default Rating of 'C' on Watch Positive. In addition, Fitch affirmed these: -- Senior secured credit facility at 'C/RR4'; -- Senior secured term loan at 'C/RR4; -- Senior unsecured guaranteed notes at 'C/RR6'; -- Senior unsecured notes/debentures at 'C/RR6'. Approximately $2 billion of debt is affected by Fitch's action. The TCR on July 2, 2009, said Standard & Poor's Ratings Services raised its corporate credit rating on McClatchy to 'CC' from 'SD' (selective default). The rating outlook is negative. At the same time, S&P raised its issue-level rating on each of McClatchy's senior unsecured notes originally issued by Knight Ridder Inc. to 'C' from 'D'. All other outstanding ratings on the company were affirmed. Moody's on June 29, 2009, lowered McClatchy's corporate family rating to Caa2 from Caa1 and the probability of default rating to Caa2/LD from Caa3 upon completion of an exchange offer of $102.9 million of then existing senior unsecured notes for $24.2 million of new 15.75% senior unsecured guaranteed notes due July 2014. At that time, Moody's also assigned a Caa1 rating (LGD3 - 42%) to the new 2014 notes. The PDR was subsequently changed to Caa2 from Caa2/LD on July 2, 2009. MEDCLEAN TECHNOLOGIES: Reports $5.4 Million Net Loss in 2009 ------------------------------------------------------------ Medclean Technologies filed its annual report on Form 10-K, showing a net loss of $5.37 million on $2.55 million of revenue for 2009, compared with a net loss of $7.83 million on $2.10 million of revenue for 2008. The Company's balance sheet as of Dec. 31, 2009, showed $1.78 million in assets, $1.76 million of debts, and $16,140 in stockholders' equity. Child, Van Wagoner & Bradshaw, PLLC, in Salt Lake City, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that of the Company's substantial recurring losses. A full-text copy of the annual report is available for free at: http://researcharchives.com/t/s?5730 About MedClean Technologies Based in Bethel, Connecticut, MedClean Technologies, Inc. (OTC BB: MCLN) -- http://www.medcleantechnologies.com/ -- provides services for the onsite treatment and disposal of regulated medical waste. MESA AIR: Citicorp Holds $25 Mil. Claim --------------------------------------- These entities filed with the Court separate notices of their status as substantial claimholders with respect to claims against the Debtors in these bankruptcy cases. The entities indicated in their notices that they beneficially own claims against the Debtors as of February 5, 22, and 23, 2010. * Mustang Aviation Inc. $1,600 * Citicorp North America, Inc. $25,000,000 * Aspen/Pitkin County Airport $41,624 Meanwhile, Robert A. Cordes filed a notice with the Court that he has become a substantial equity holder with respect to Mesa Air Group, Inc., equity securities. As of February 17, 2010, he beneficially owns 2,000 Mesa shares. About Mesa Air Group Mesa currently operates 130 aircraft with approximately 700 daily system departures to 127 cities, 41 states, Canada, and Mexico. Mesa operates as Delta Connection, US Airways Express and United Express under contractual agreements with Delta Air Lines, US Airways and United Airlines, respectively, and independently as Mesa Airlines and go! Mokulele. This operation links Honolulu to the neighbor island airports of Hilo, Kahului, Kona and Lihue. The Company, founded by Larry and Janie Risley in New Mexico in 1982, has approximately 3,500 employees. Mesa Air Group Inc. and its units filed their Chapter 11 petitions Jan. 5 in New York (Bankr. S.D.N.Y. Case No. 10-10018), listing assets of $976 million against debt totaling $869 million as of Sept. 30, 2009. Richard M. Pachulski, Esq., and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP, serve as local counsel. Imperial Capital LLC is the investment banker. Epiq Bankruptcy Solutions is claims and notice agent. Bankruptcy Creditors' Service, Inc., publishes Mesa Air Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by Mesa Air Group Inc. and its units. (http://bankrupt.com/newsstand/or 215/945-7000) MESA AIR: NASDAQ Delists Common Stock ------------------------------------- The common stock of Mesa Air Group, Inc., has been delisted from the NASDAQ Stock Market. NASDAQ said in its statement dated February 17, 2010, that it will delist the Mesa common stock, which was suspended on January 14, 2010, and has not traded on the NASDAQ since its suspension. NASDAQ filed a Form 25 with the U.S. Securities and Exchange Commission on February 18, 2010, to complete the delisting. According to the statement, the delisting will be effective 10 days after NASDAQ's filing with the SEC, notifying the removal of Mesa stock from listing or registration under Section 12(b) of the Securities Exchange Act of 1934. About Mesa Air Group Mesa currently operates 130 aircraft with approximately 700 daily system departures to 127 cities, 41 states, Canada, and Mexico. Mesa operates as Delta Connection, US Airways Express and United Express under contractual agreements with Delta Air Lines, US Airways and United Airlines, respectively, and independently as Mesa Airlines and go! Mokulele. This operation links Honolulu to the neighbor island airports of Hilo, Kahului, Kona and Lihue. The Company, founded by Larry and Janie Risley in New Mexico in 1982, has approximately 3,500 employees. Mesa Air Group Inc. and its units filed their Chapter 11 petitions Jan. 5 in New York (Bankr. S.D.N.Y. Case No. 10-10018), listing assets of $976 million against debt totaling $869 million as of Sept. 30, 2009. Richard M. Pachulski, Esq., and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP, serve as local counsel. Imperial Capital LLC is the investment banker. Epiq Bankruptcy Solutions is claims and notice agent. Bankruptcy Creditors' Service, Inc., publishes Mesa Air Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by Mesa Air Group Inc. and its units. (http://bankrupt.com/newsstand/or 215/945-7000) METRO-GOLDWYN-MAYER: Bank Debt Trades at 40% Off ------------------------------------------------ Participations in a syndicated loan under which Metro-Goldwyn- Mayer, Inc., is a borrower traded in the secondary market at 59.70 cents-on-the-dollar during the week ended Friday, March 5, 2010, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents a drop of 0.72 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 April 8, 2012. Moody's and Standard & Poor's do not rate the bank debt. The debt is one of the biggest gainers and losers among 190 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. Metro-Goldwyn-Mayer, Inc., is an independent, privately held motion picture, television, home video, and theatrical production and Distribution Company. The Company owns the world's largest library of modern films, comprising approximately 4,000 titles, and over 10,400 episodes of television programming. An investor consortium, comprised of Providence Equity Partners, TPG Capital, Sony Corporation of America, Comcast Corporation, DLJ Merchant Banking Partners and Quadrangle Group, owns MGM. As reported by the Troubled Company Reporter on Sept. 30, 2009, The New York Post, citing multiple sources, said discussions between debt holders and equity owners on a restructuring of Metro-Goldwyn-Mayer's massive debt load have begun on a contentious note, with both sides threatening to force MGM into bankruptcy in order to gain leverage and extract better terms from the other. Bloomberg also said that MGM is in talks to skip interest payments and restructure $3.7 billion in bank loans. MGM asked creditors to waive $12 million monthly interest payments until Feb. 15, 2010. MGM MIRAGE: Inks Amended & Restated Agreement with Bank of America ------------------------------------------------------------------ MGM MIRAGE entered into Amendment and Restatement Agreement dated February 25, 2010, to that certain Fifth Amended and Restated Loan Agreement with MGM Grand Detroit LLC, as initial co-borrower, and Bank of America, N.A., as administrative agent. Under the amended agreement, the Company is permitted, subject to certain terms and conditions, to issue not more than $850 million of secured indebtedness to finance all or a portion of the Required Prepayments described below. Amendment also permits the transfer by one of the Company's subsidiaries of its 50% ownership interest in the Borgata Hotel Casino & Spa and related leased land in Atlantic City, New Jersey, into a divestiture trust in connection with constructive settlement discussions between the Company and the New Jersey Division of Gaming Enforcement. Any settlement is subject to both DGE and New Jersey Casino Control Commission approval. Amendment requires that the Company pay an amendment fee to all lenders under the Loan Agreement. A restatement of the Loan Agreement will become effective upon the making the Required Prepayments and satisfaction of certain documentary conditions, provided that these conditions occur no later than June 30, 2010. The Restated Loan Agreement, among other things: * requires the Company to make a 20% reduction in credit exposures of those of the Company's lenders which have agreed to extend their commitments, other than lenders which have waived the reduction; * subject to the making of the Required Prepayments and the fulfillment of certain other documentary conditions, the senior credit facility will be re-tranched so that approximately $1.4 billion of revolving loans and commitments will be effectively converted into term loans, leaving a revolving credit commitment of $2.0 billion, approximately $300 million of which will mature in October 2011; * requires the Company to repay in full the approximately $1.2 billion owed to lenders which have not agreed to extend their commitments on or before the existing maturity date in October 2011; * extends the maturity date for the remaining approximately $3.6 billion of the loans and lending commitments under the credit facility through February 21, 2014; * provides for extension fees and a 100 basis point increase in interest rate for extending lenders; and * continues the existing minimum EBITDA and maximum annual capital expenditure covenants with periodic step-ups during the extension period. In addition, the Restated Loan Agreement will allow the Company to issue unsecured debt, equity-linked and equity securities to refinance indebtedness maturing prior to Oct. 3, 2011, and the $1.2 billion portion of the obligations owed to non-extending lenders. Following repayment of such indebtedness, the repayment of such lenders and the fulfillment of certain other documentary conditions, the maturity of the balance of the senior credit facility will be extended to Feb. 21, 2014, and the Restated Loan Agreement will thereafter permit the Company to issue unsecured debt, equity-linked and equity securities to refinance indebtedness which matures prior to the maturity date of the extended facilities. However, (a) indebtedness in amounts issued in excess of $250 million over such interim maturities requires ratable prepayment of the credit facilities in an amount equal to 50% of the net cash proceeds of such excess, and (b) equity amounts issued in excess of $500 million over such interim maturities require ratable prepayment of the credit facilities in an amount equal to 50% of the net cash proceeds of such excess. A full-text copy of the Amended Agreement is available for free at http://ResearchArchives.com/t/s?5722 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. At September 30, 2009, MGM MIRAGE had $21.7 billion in total assets against total current liabilities of $1.15 billion, deferred income taxes of $3.14 billion, long-term debt of $12.9 billion, other long-term obligations of $221.70 million; resulting in stockholders' equity of $4.29 billion. * * * 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. MICHAELS STORES: Bank Debt Trades at 9% Off in Secondary Market --------------------------------------------------------------- Participations in a syndicated loan under which Michaels Stores, Inc., is a borrower traded in the secondary market at 90.77 cents- on-the-dollar during the week ended Friday, March 5, 2010, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 0.80 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 Oct. 31, 2013, and carries Moody's B3 rating and Standard & Poor's B rating. The debt is one of the biggest gainers and losers among 190 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. Headquartered in Irving, Texas, Michaels Stores, Inc., is the largest arts and crafts specialty retailer in North America. As of March 9, 2009, the Company operated 1,105 "Michaels" retail stores in the United States and Canada and 161 Aaron Brothers Stores. MIDWEST BANC: Inks Exchange Agreement with U.S. Dept. Treasury -------------------------------------------------------------- Midwest Banc Holdings Inc. entered into an exchange agreement with the United States Department of the Treasury pursuant to which the U.S. Treasury agreed to exchange all shares of the Company's Fixed Rate Cumulative Perpetual Preferred Stock, Series T it owns, having an aggregate approximate liquidation preference of $84.8 million, plus approximately $4.5 million in unpaid dividends on such preferred stock, for a new series of Fixed Rate Cumulative Mandatorily Convertible Preferred Stock, Series G with a like liquidation preference. The New Preferred Stock will have the same dividend rate as the Series T preferred stock, namely a dividend rate of 5% per annum from the issue date to February 15, 2014, and 9% per annum thereafter. Each share of New Preferred Stock will be convertible into approximately 528 shares of common stock of the Company, subject to any required anti-dilution adjustments. If the U.S. Treasury were to convert all of the approximately $89.3 million in liquidation preference of the New Preferred Stock, the Company would be required to issue approximately 47.1 million shares of its common stock, subject to any required anti-dilution adjustments. Under the terms of the Exchange Agreement, the U.S. Treasury has the authority to convert the New Preferred Stock into the Company's common stock at any time. In addition, the Company can compel a conversion of the New Preferred Stock into common stock, subject to the following conditions: * the Company receives appropriate approvals from the Federal Reserve; * approximately $78.8 million principal amount of the Company's senior and subordinated debt shall have been previously converted into common stock on terms acceptable to the U.S. Treasury in its sole discretion; * the Company shall have completed a new cash equity raise of not less than $125 million on terms acceptable to the U.S. Treasury in its sole discretion; and * the Company has made the anti-dilution adjustments to the New Preferred Stock, if any. Unless earlier converted, the New Preferred Stock will convert automatically into shares of the Company's common stock on the seventh anniversary of the issuance of the New Preferred Stock. As part of the terms of the Exchange, the Company also agreed to amend and restate the terms of the U.S. Treasury's warrant, dated December 5, 2008, to purchase 4,282,020 shares of common stock, in order to adjust the conversion price to be consistent with the conversion price applicable to the New Preferred Stock. The Exchange remains subject to certain customary closing conditions. Going Concern Doubt According to the Troubled Company Reporter on Aug. 17, 2009, Midwest Banc Holdings, Inc., said in its quarterly report for the period ended June 30, 2009, that there is substantial doubt about its ability to continue as a going concern. The Company decided not to make the principal payment, suspend the dividend on its Series A Preferred Stock and defer the dividends on its Series T preferred stock and interest payments on its trust preferred securities, to retain cash and preserve liquidity and capital at the holding company. The revolving line of credit matured on July 3, 2009, and the Company did not pay to the lender all of the aggregate outstanding principal on the revolving line of credit. A full-text copy of the Exchange Agreement is available for free at http://ResearchArchives.com/t/s?56ff About Midwest Banc Midwest Banc Holdings, Inc. (NASDAQ:MBHI) is a community-based bank holding company. Through its wholly-owned subsidiaries, the Company provides a range of services, including traditional banking services, personal and corporate trust services, and insurance brokerage and retail securities brokerage services. The Company's principal operating subsidiary is Midwest Bank and Trust Company, an Illinois state bank that operates 27 banking centers in the Chicago metropolitan area. The Company operates in the community banking business segment, providing a range of services to individual and corporate customers. MOMENTIVE PERFORMANCE: Bank Debt Trades at 8% Off ------------------------------------------------- Participations in a syndicated loan under which Momentive Performance Materials, Inc., is a borrower traded in the secondary market at 91.69 cents-on-the-dollar during the week ended Friday, March 5, 2010, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 0.56 percentage points from the previous week, The Journal relates. The Company pays 250 basis points above LIBOR to borrow under the facility. The bank loan matures on Dec. 5, 2013, and carries Moody's B1 rating and Standard & Poor's CCC+ rating. The debt is one of the biggest gainers and losers among 190 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. Momentive Performance Materials, Inc., is a producer of silicones and silicone derivatives, and is engaged in the development and manufacture of products derived from quartz and specialty ceramics. As of Dec. 31, 2008, the Company had 25 production sites located worldwide, which allows it to produce the majority of its products locally in the Americas, Europe and Asia. Momentive's customers include companies in industries, such as Procter & Gamble, 3M, Goodyear, Unilever, Saint Gobain, Motorola, L'Oreal, BASF, The Home Depot and Lowe's. As of June 28, 2009, Momentive had $3.41 billion in total assets on $3.96 billion in total liabilities, resulting in $551.8 billion in stockholders' deficit. The Troubled Company Reporter said September 28, 2009, that Standard & Poor's Ratings Services placed all its ratings on Momentive Performance Materials and its subsidiaries on CreditWatch with positive implications, including the 'CCC-' corporate credit rating on Momentive Performance Materials. S&P believes it is likely that the waiver, together with improving operating performance, significantly reduces the likelihood of a near-term covenant breach. Quarterly EBITDA has been climbing steadily since reaching a low of about $15 million (as calculated for bank covenant purposes) in the first quarter of 2009. It was $64 million in the second quarter, and management expects it to be between $84 million and $94 million in the third quarter. MOVIE GALLERY: Asks Court to Hold FMS in Contempt of Court ---------------------------------------------------------- Movie Gallery Inc. and its units ask Judge Douglas O. Tice Jr. of the United States Bankruptcy Court for the Eastern District of Virginia, Richmond Division, to hold Fred Meyers Stores in contempt for its violation of the automatic stay under Section 362 of the Bankruptcy Code. According to Jeremy S. Williams, Esq., at Kutak Rock LLP, in Richmond, Virginia, the Debtors and FMS are parties to six retail lease agreements, which govern the terms of the Debtors' use and occupation of six non-residential properties located in Portland, Oregon area. On January 8, 2010, FMS allegedly sent the Debtors a letter informing them that they were past due on the January rent. On January 27, 2010, FMS sent a second letter requesting the Debtors to vacate the Stores immediately. On January 30, February 1 and February 2, 2010, FMS proceeded to change the locks of five Stores and has denied the Debtors the use of and access to the Stores and the Debtors' personal property located in the stores since those dates, Mr. Williams said. To recall, the Debtors filed their Chapter 11 petition with the Bankruptcy Court on February 2, 2010. On February 5, 2010, the Debtors received a letter from FMS in which FMS asserted, among others, that it is asserting an administrative claim for "storage fees" in an amount exactly equal to prepetition rent for the "storage" of the Debtors' property at the Stores. FMS has violated the automatic stay provisions of Section 362, and is, thus, subject to contempt for its actions, Mr. Williams asserts. The FMS leases are property of the estate, Mr. Williams avers. Neither the contractual language of the Leases, FMS' actions nor any provisions of Oregon law has resulted in the termination of the Leases despite the fact that FMS may have temporarily interrupted the Debtors' immediate possessory interest through unilateral self-help. Because the Leases have not been terminated, they are property of the estate and actions affecting the property are subject to the automatic stay, he stresses. Under ordinary contract principles, the "failure of a party to perform its part of the contract does not per se rescind it," Mr. Williams clarifies. Mr. Williams adds that under Oregon rule, even if the Debtors defaulted under the terms of the Lease, the Lease has not been terminated and remains a valid assumable agreement under Section 365 of the Bankruptcy Code. In this instance, he says, the Lease remains an unexpired lease of non-residential real property which is part of the estate. Failure to allow the Debtors to exercise their rights in connection with the Leases, including use and access of the Stores, is a violation of the automatic stay, he maintains. FMS has willfully violated the automatic stay by refusing to provide access to the Debtors despite repeated requests, Mr. Williams points out. For this reason, FMS ask the Court to find FMS in contempt and held liable for actual and punitive damages which represent among others, other losses, the amount of lost sales, and damage to goodwill, and compel FMS to provide the Debtors access to the Stores, Mr. Williams asserts. FMS Responds FMS asks the Court to deny the Debtors' request, contending that (1) it has not been served with the Motion as required by the Bankruptcy Rules, and it has not had adequate time to respond; and (2) the Debtors have no legal right to use or occupy the premises from which they have been lawfully evicted prepetition. Charles L. Williams, Esq., at Butler Williams & Skilling, P.C. in Richmond, Virginia, tells the Court that pursuant to the terms of the Leases, the Debtors' base rent on the premises is due on the first day of each month. On January 8, 2010, FMS sent notice to the Debtors stating that they had failed to make timely payment of the January 2010 rental payments on the Leases and demanded that payments be made by January 20, 2010, to avoid further action. On January 25 and 27, 2010 -- more than 10 days after the lease payments were due and seven days after the period for curing a default had expired -- FMS sent courtesy notices to the Debtors for four of the sites, stating that it had "terminated all of the tenant's rights under the Lease to occupy the premises" and requested that the Debtors immediately vacate the premises. Courtesy notices of termination are not required under the terms of the Leases or Oregon law, Mr. Williams points out. Because the Debtors cannot prove that they have any right to occupy the premises from which they have been lawfully evicted, they cannot maintain that FMS is withholding or controlling property of the estate in violation of the stay, Mr. Williams argues. Similarly, FMS asks the Court to deny the Debtors' request for actual and punitive damages because (i) FMS has not violated the stay order, (ii) the damages are not appropriate because any actual damages are the result of the Debtors' own failure to prevent the prepetition termination of their tenancies by making timely rent payments and (iii) their decision to reopen the stores in order to conduct going-out-of-business sales will cost far more than moving any remaining inventory to another location for liquidation. The Court will convene a hearing to consider the Debtors' Motion on March 8, 2010, at 10:00 a.m. The hearing was previously scheduled for Feb.3, then adjourned to Feb. 22. About Movie Gallery Based in Wilsonville, Ore., Movie Gallery, Inc., is the second largest North American video and game rental company, operating stores in the U.S. and Canada under the Movie Gallery, Hollywood Video and Game Crazy brands. Movie Gallery first filed for Chapter 11 on Oct. 16, 2007 (Bankr. E.D. Va. Case Nos. 07-33849 to 07-33853). Kirkland & Ellis LLP and Kutak Rock LLP represented the Debtors. The Company emerged from bankruptcy on May 20, 2008, with private-investment firms Sopris Capital Advisors LLC and Aspen Advisors LLC as its principal owners. William Kaye was appointed plan administrator and litigation trustee. Movie Gallery returned to Chapter 11 protection on Feb. 3, 2009 (Bankr. E.D. Va. Case No. 10-30696). Attorneys at Sonnenschein Nath & Rosenthal LLP and Kutak Rock LLP represent the Debtors in their second restructuring effort. Kurtzman Carson Consultants serves as claims and notice agent. Bankruptcy Creditors' Service, Inc., publishes Movie Gallery Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Movie Gallery Inc. and affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) MOVIE GALLERY: FacilitySource Ordered to Release Funds ------------------------------------------------------ At the behest of Movie Gallery Inc. and its units, the Court directed FacilitySource, Inc., to disburse contractor funds and other amounts that the Debtors transferred to FacilitySource for payment of contractors' prepetition claims. The Court also directed FacilitySource to disburse the Contractor Funds without the risk of FacilitySource incurring any liability for avoidance actions under Section 550 of the Bankruptcy Code. Kimberly A. Pierro, Esq., at Kutak Rock LLP, in Richmond, Virginia, related that the Debtors and FacilitySource are parties to an agreement dated April 29, 2009, whereby FacilitySource manages and makes payment to third party contractors for various facility maintenance services for multiple retail locations of the Debtors. FacilitySource coordinates and engages for the benefit of the Debtors, contractors and other vendors to perform repairs and other work for the Debtors' retail stores located throughout the United States. As part of this process, FacilitySource acts as a conduit for receiving payment from the Debtors and passing the funds through to the contractors for payment for the work performed. Pursuant to the Parties' Agreement, payments to FacilitySource for invoices, for any materials, trade services or sub-contractor vendor provided by FacilitySource to the Debtors will be due and payable via wire transfer in full within 21 days, Ms. Pierro said. FacilitySource will then remit payment to the applicable vendors within five days after receipt of payment from the Debtors, she noted. Ms. Pierro clarifies that these payments are separate and apart from the fees that the Debtors pay FacilitySource for its management services. These fees are solely for payment to third party vendors for services provided at retail facilities. During the Petition Date, FacilitySource was managing approximately 138 Contractors for the Debtors' facility maintenance, she said. Based on the nature of the work and services provided by the Contractors, the Debtors believe that the Contractors are capable of perfecting or maybe capable of perfecting liens for the amounts that they are owed, Ms. Pierro stressed. Prior to the Petition Date, the Debtors made a $660,608 payment to FacilitySource to pay the Contractors for services performed in November and December of 2009. However, FacilitySource has not yet disbursed the Contractor Funds to the Contractors, Ms. Pierro told the Court. The Debtors anticipate making additional payments pursuant to the Agreement for prepetition facility maintenance services, Ms. Pierro said. About Movie Gallery Based in Wilsonville, Ore., Movie Gallery, Inc., is the second largest North American video and game rental company, operating stores in the U.S. and Canada under the Movie Gallery, Hollywood Video and Game Crazy brands. Movie Gallery first filed for Chapter 11 on Oct. 16, 2007 (Bankr. E.D. Va. Case Nos. 07-33849 to 07-33853). Kirkland & Ellis LLP and Kutak Rock LLP represented the Debtors. The Company emerged from bankruptcy on May 20, 2008, with private-investment firms Sopris Capital Advisors LLC and Aspen Advisors LLC as its principal owners. William Kaye was appointed plan administrator and litigation trustee. Movie Gallery returned to Chapter 11 protection on Feb. 3, 2009 (Bankr. E.D. Va. Case No. 10-30696). Attorneys at Sonnenschein Nath & Rosenthal LLP and Kutak Rock LLP represent the Debtors in their second restructuring effort. Kurtzman Carson Consultants serves as claims and notice agent. Bankruptcy Creditors' Service, Inc., publishes Movie Gallery Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Movie Gallery Inc. and affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) MOVIE GALLERY: Has Final Approval for Cash Collateral Access ------------------------------------------------------------ Judge Douglas O. Tice Jr. of the United States Bankruptcy Court for the Eastern District of Virginia, Richmond Division authorized, on a final basis, effective as of February 25, 2010, Movie Gallery, Inc., and its debtor-affiliates to use the prepetition lenders' cash collateral within the six months after the Chapter 11 petition date. The lenders under the prepetition first lien revolving credit facility and the prepetition first lien term credit facility share a joint first lien on substantially all of the assets of the Debtors, including their cash on hand. The prepetition administrative agents have consented to the use of cash collateral. The consent will terminate on the date (i) the Requisite Lenders under the Prepetition First Lien Revolving Credit Agreement or the Requisite Lenders under the Prepetition First Lien Term Credit Agreement, as applicable, give to the Debtors notice that an Event of Default has occurred and is continuing or (ii) the Court terminates the Debtors' right to use the Cash Collateral. An Event of Default includes: (a) the Debtors' failure to make any Adequate Protection payment or other payment to a Prepetition Secured Party as and when required by the Final Order, subject to three business days notice and cure by the Debtors within three business days; (b) within 180 calendar days after the Petition Date, the Debtors fail to either (1) (i) file with the Court either a Chapter 11 plan that is reasonably acceptable to the number and amount of Prepetition First Lien Revolver Secured Parties and their claims necessary for the class of claims to accept the plan under Section 1126(c) of the Bankruptcy Code and (ii) within 270 days of the Petition Date obtain confirmation of a plan; or (2) to file a motion, acceptable in form and substance to the Requisite Lenders under the Prepetition First Lien Revolving Credit Facility and the Requisite Lenders under the Prepetition First Lien Term Credit Facility in their reasonable discretion, seeking approval of bidding and auction procedures in connection with the sale of substantially all of the Debtors' assets under Section 363 of the Bankruptcy Code; (c) if the Debtors file a motion seeking approval of bidding and auction procedures in connection with the sale of substantially all of the Debtors' assets under Section 363 of the Bankruptcy Code, and an order granting the motion and authorization for the Prepetition Secured Parties to credit bid their claims is not entered by the Court within 45 days of the filing of the motion; (d) the Debtors' removal of Corliss & Moore as their chief restructuring officer, or any other entity acting as CRO, and the CRO is not replaced with a CRO reasonably acceptable to the Requisite Lenders under both Prepetition Credit Agreements within three business days of the Removal. On the Termination Date, the Debtors' right to use the Cash Collateral will terminate automatically, unless at least two business days prior to the scheduled Termination Date, the Debtors' have filed a motion seeking approval of the right to continue to use Cash Collateral on terms not less favorable to the Prepetition Secured Parties and seeking an emergency hearing on the motion, in which case the Debtors' right to use Cash Collateral continue until the entry of an order granting or denying the Debtors' motion. The Cash Collateral will be used for general corporate purposes and costs and expenses related to the Debtors' Chapter 11 Cases in accordance with the terms of the Final Order and Budget. A full-text copy of the approved Monthly Cash Balance and 13-Week- Budget is also available for free at: http://bankrupt.com/misc/MG_FinalCashCollBudget.pdf The Cash Collateral Order provides, among others things, that: (a) On the first Monday following the 30th day after the Petition Date and every Monday thereafter until the time as the Prepetition First Lien Revolver Secured Parties have received $45,000,000 in principal payments under the Prepetition First Lien Revolving Credit Facility, the Debtors will pay to the Prepetition First Lien Revolver Administrative Agent for application to outstanding principal under the Prepetition First Lien Revolving Credit Facility an amount equal to the amount by which the Debtors' combined cash on deposit in the Debtors' bank concentration accounts at the close of business on the immediately preceding Friday exceeded $60,000,000. To the extent the Debtors' combined cash on hand or on deposit other than the Concentration Cash exceeds $5,000,000 on the Weekly Determination Date, that cash will be deemed to be Concentration Cash for purposes of determining the amount of Concentration Cash as of the Weekly Determination Date. Any amounts so repaid may not be re-borrowed. (b) The Debtors will maintain and utilize their ordinary course prepetition cash management system, practices, and policies, including as related to existing bank accounts, subject to any subsequent Court order requiring otherwise. Prior to the receipt by the Revolver Lenders of $45,000,000 in principal payments, if an Event of Default occurs and the Requisite Lenders under the Prepetition First Lien Revolving Credit Agreement have not given the Debtors notice of the occurrence of an Event of Default, then the Prepetition First Lien Term Secured Parties may file a motion with the Court requesting that the Debtors' right to use the Cash Collateral be terminated. Judge Tice directed the Debtors to promptly provide notice to the Prepetition Secured Parties, with a copy to counsel for the Committee and the United States Trustee, of the occurrence of any Event of Default. As adequate protection for the aggregate Diminutions in Value, the Prepetition Joint Collateral Agent, on behalf of itself and the other Prepetition Secured Parties, and the Prepetition Second Lien Agent, on behalf of itself and the other Prepetition Second Lien Term Secured Parties, are granted: (a) Adequate Protection Liens; (b) Superpriority Claims; (c) Periodic Cash Payments; and (e) Adequate Protection Obligations. The Adequate Protection Liens, the Prepetition Liens, the Prepetition First Lien Secured Obligations, and the Superpriority Claims will be subordinate and subject only to the Permitted Liens and the payment -- the Carve-Out -- of these expenses: (i) all fees required to be paid to the Clerk of the Bankruptcy Court and to the Office of the United States Trustee under Section 1930(a) of title 28 of the United States Code; (ii) fees and expenses incurred by the Debtors and the Committee in respect of compensation for services rendered or reimbursement of expenses allowed by the Bankruptcy Court to the Debtors' or the Committee's professionals or to the members of the Committee, in each case incurred prior to the delivery of a Carve-Out Notice, but in no event in excess of the amounts allocated for the Professionals in the Budget; (iii) after the delivery of a Carve-Out Notice, an amount not exceeding $3,000,000, to pay, any fees or expenses incurred following the delivery of the Carve-Out Notice by the Debtors and the Committee in respect of compensation for services rendered or reimbursement of expenses allowed by the Bankruptcy Court to the Debtors, the Committee, and their respective Professionals; and (iv) all reasonable fees and expenses incurred by a trustee appointed pursuant to Section 726(b) of the Bankruptcy Code in an amount not exceeding $100,000 in the aggregate. Judge Tice prohibited the Debtors, at all times before the Termination Date from (i) using the Adequate Protection Collateral or the Prepetition Collateral including the Cash Collateral and (ii) applying to any court for an order authorizing the use of the Adequate Protection Collateral or the Prepetition Collateral, including the Cash Collateral. Judge Tice further held that: * Nothing in the Final Order will prohibit the Debtors from seeking Court approval of (A) the use of Cash Collateral after the Termination Date; or (B) debtor-in-possession financing if: (1) within five business days of the Debtors' written request, the Prepetition Secured Parties and the Debtors have not reached agreement in principle on the terms of DIP financing to be provided by any Prepetition Secured Parties, or (2) within seven business days of that request, the Prepetition Secured Parties and the Debtors have not filed a joint motion seeking approval of a definitive agreement for financing. * Except as permitted under the Final Order, the order Authorizing "going out of business" sales at certain of the Debtors' stores and the Budget, the Debtors will not dispose of any of their assets outside of the ordinary course of business. A full-text copy of the Final Cash Collateral Order is available for free at http://bankrupt.com/misc/MG_Order_CashCollateral.pdf Prior to the Court's entry of its Final Order, these parties objected to the Debtors' request to use prepetition cash collateral: 1. Developers Diversified Realty Corporation, Weingarten Realty Investors, Regency Centers, LP, and Jones Lang Lasalle Americas, Inc. 2. Sywest Development, Passco Real Estate Enterprises, and The Macerich Company 3. Deutsche Bank Trust Company Americas 4. Chesapeake Square Associates, LLC, Surry Plaza Associates, LLC, Tri-County Associates, LLC, Bluefield (Ridgeview) WMS, LLC and Princeton (East River) WMS, LLC 5. the Official Committee of Unsecured Creditors The Parties argued, among other things, that the Debtors failed to timely pay their postpetition rent obligations, adding that if the lenders and Debtors are not able or willing to pay the postpetition costs of the liquidation of the lenders' collateral, the Cash Collateral Motion should be denied because it violates the priority scheme and specific provisions of the Bankruptcy Code and offends basic principles of law and equity. The Court held, however, that all objections to the Motion to the extent not withdrawn or resolved, are overruled. About Movie Gallery Based in Wilsonville, Ore., Movie Gallery, Inc., is the second largest North American video and game rental company, operating stores in the U.S. and Canada under the Movie Gallery, Hollywood Video and Game Crazy brands. Movie Gallery first filed for Chapter 11 on Oct. 16, 2007 (Bankr. E.D. Va. Case Nos. 07-33849 to 07-33853). Kirkland & Ellis LLP and Kutak Rock LLP represented the Debtors. The Company emerged from bankruptcy on May 20, 2008, with private-investment firms Sopris Capital Advisors LLC and Aspen Advisors LLC as its principal owners. William Kaye was appointed plan administrator and litigation trustee. Movie Gallery returned to Chapter 11 protection on Feb. 3, 2009 (Bankr. E.D. Va. Case No. 10-30696). Attorneys at Sonnenschein Nath & Rosenthal LLP and Kutak Rock LLP represent the Debtors in their second restructuring effort. Kurtzman Carson Consultants serves as claims and notice agent. Bankruptcy Creditors' Service, Inc., publishes Movie Gallery Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Movie Gallery Inc. and affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) MOVIE GALLERY: To Close Three Stores in Florida ----------------------------------------------- Movie Gallery is closing three of its Hollywood Video stores in Florida in the next two months. According to nwfdailynews.com, the three stores are among the 760 Movie Gallery, Hollywood Video and Game Crazy unprofitable stores the company has decided to close as part of the company's restructuring efforts. The Crestview store is scheduled to end its operations in March while its counterpart in Pace will close by April 1. The company has not given a definite date when it will close its store in Mary Esther. Liquidation sales are ongoing on these three stores, nwfdailynews.com said. Other Movie Gallery stores in Crestview, Destin, Milton and DeFuniak Springs will continue to operate, the report said. About Movie Gallery Based in Wilsonville, Ore., Movie Gallery, Inc., is the second largest North American video and game rental company, operating stores in the U.S. and Canada under the Movie Gallery, Hollywood Video and Game Crazy brands. Movie Gallery first filed for Chapter 11 on Oct. 16, 2007 (Bankr. E.D. Va. Case Nos. 07-33849 to 07-33853). Kirkland & Ellis LLP and Kutak Rock LLP represented the Debtors. The Company emerged from bankruptcy on May 20, 2008, with private-investment firms Sopris Capital Advisors LLC and Aspen Advisors LLC as its principal owners. William Kaye was appointed plan administrator and litigation trustee. Movie Gallery returned to Chapter 11 protection on Feb. 3, 2009 (Bankr. E.D. Va. Case No. 10-30696). Attorneys at Sonnenschein Nath & Rosenthal LLP and Kutak Rock LLP represent the Debtors in their second restructuring effort. Kurtzman Carson Consultants serves as claims and notice agent. Bankruptcy Creditors' Service, Inc., publishes Movie Gallery Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Movie Gallery Inc. and affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) MYLAN INC: Moody's Upgrades Corporate Family Rating to 'Ba3' ------------------------------------------------------------ Moody's Investors Service upgraded the ratings of Mylan Inc. including the Corporate Family Rating to Ba3 from B1 and the senior secured bank rating to Ba2 from Ba3. At the same time, Moody's affirmed Mylan's SGL-1 Speculative Grade Liquidity Rating. Following this rating action, the rating outlook remains positive. The upgrade of Mylan's ratings reflects good operating performance, steady debt reduction, and the expectation that positive performance trends will continue. "As a generics-focused pharmaceutical company Mylan enjoys good growth prospects based on a robust global pipeline and the benefits of vertical integration and cost synergies," stated Moody's Senior Vice President Michael Levesque. "If Mylan can continue steady performance and further reduce its financial leverage, an additional upgrade could occur within the next 12 to 18 months," continued Mr. Levesque. Mylan's Ba3 ratings reflect its solid #3 global industry position and its good prospects for growth in earnings and cash flow. Favorable prospects result from positive generic industry fundamentals as well as Mylan's ability to leverage its global footprint and strong pipeline. These strengths are offset by higher financial leverage than industry peers, with Debt/EBITDA of approximately 4.3x as of December 31, 2009 (using Moody's adjustments), CFO/Debt of 13% and FCF/Debt of 7%. The rating outlook remains positive indicating the potential for further upward rating action over the next 12 to 18 months. An upgrade could occur if Moody's believes Mylan can comfortably sustain key cash flow to debt ratios at the mid to upper ends of Moody's "Ba" ranges for pharmaceutical companies. These ranges include Debt/EBITDA of 2.5x to 3.75x, CFO/Debt of 15% to 22.5%, and FCF/Debt of 10% to 15%. For additional information please refer to Moody's updated Credit Opinion on Mylan Inc. available on www.moodys.com. Ratings upgraded: -- Corporate Family Rating to Ba3 from B1 -- Probability of Default Rating to Ba3 from B1 -- Senior sec. revolving credit facility of $750 million due 2013 to Ba2 (LGD3, 37% from Ba3 (LGD3, 36%) -- Senior sec. Term Loan A due 2013 to Ba2 (LGD3, 37% from Ba3 (LGD3, 36%) -- Senior sec. Term Loan B due 2014 to Ba2 (LGD3, 37% from Ba3 (LGD3, 36%) Rating affirmed: -- Speculative Grade Liquidity Rating at SGL-1 Moody's does not rate Mylan's convertible notes of $600 million due 2012, the $575 million convertible notes due 2015, or the mandatory convertible preferred stock due 2010. Moody's last rating action on Mylan took place on May 18, 2009, when Moody's revised the rating outlook to positive from stable and upgraded the Speculative Grade Liquidity Rating to SGL-1 from SGL-2. Headquartered in Canonsburg, Pennsylvania, Mylan Inc. is a specialty pharmaceutical company. In 2009 Mylan reported total revenues of approximately $5.1 billion. NEIMAN MARCUS: Bank Debt Trades at 9% Off in Secondary Market ------------------------------------------------------------- Participations in a syndicated loan under which Neiman Marcus Group, Inc., is a borrower traded in the secondary market at 91.27 cents-on-the-dollar during the week ended Friday, March 5, 2010, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 1.56 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 April 6, 2013, and carries Moody's B3 rating and Standard & Poor's BB- rating. The debt is one of the biggest gainers and losers among 190 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. Neiman Marcus Group, Inc., headquartered in Dallas, Texas, operates 40 Neiman Marcus stores, 2 Bergdorf Goodman stores, 27 clearance centers, and a direct business. Total revenues are about $3.9 billion. The Company carries a 'Caa1' Corporate Family Rating and 'Caa1' Probability of Default Rating from Moody's Investors Service. NIELSEN COMPANY: Bank Debt Trades at 6% Off in Secondary Market --------------------------------------------------------------- Participations in a syndicated loan under which Nielsen Company is a borrower traded in the secondary market at 94.02 cents-on-the- dollar during the week ended Friday, March 5, 2010, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents drop of 0.60 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 Aug. 2013, and carries Moody's Ba3 rating and Standard & Poor's B+ rating. The debt is one of the biggest gainers and losers among 190 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. Active in approximately 100 countries, with headquarters in Haarlem, The Netherlands and New York, USA, The Nielsen Company B.V. is a global information and media company. Nielsen Company carries a 'B2' long term corporate family rating from Moody's, 'B' issuer credit rating from standard & Poor's, and 'B' issuer default rating from Fitch. NICOLE ENERGY: Judge Hoffman Declines to Disqualify Himself ----------------------------------------------------------- WestLaw reports that disqualification motions filed in the four separate bankruptcy cases of the debtor entities by the debtors' principal set forth no facts and described no acts that, on any objective basis, would have reflected a personal bias on the part of the bankruptcy judge, or led a reasonable person to call into question the judge's impartiality. Accordingly, the Ohio bankruptcy court denied the motions. The motions contained no allegations of personal animosity and no examples of personal attacks against the movant or discrimination against African- American or pro se parties. The matters alleged to constitute bias stemmed from legal rulings made by the judge during the course of the Chapter 11 case. The judge's ruling that a functioning creditors committee existed was not tantamount to fraud, as alleged by the movant, but was affirmed on appeal. The movant's contention that the court approved an asset purchase agreement due to bias was unsupported. The court, moreover, based its denial of the movant's request for a stay pending appeal on the legal standard for that relief, not on the movant's race or pro se status. Finally, although the movant complained that the court failed to give him legal advice and failed to inform him of his and the debtors' rights, the court's proper role was not to give legal advice to any party, represented or not. In re Nicole Energy Services, Inc., --- B.R. ----, 2010 WL 668639 (Bankr. S.D. Ohio) (Hoffman, J.). Nicole Energy Services, Inc., based in Westerville, Ohio, provides natural gas, electric power & energy management. Columbia Gas affiliates filed an involuntary chapter 7 petition (Bankr. S.D. Ohio Case No. 03-67484) against Nicole Energy in 2003, and the company filed a voluntary chapter 11 petition (Bankr. S.D Ohio Case No. 04-53678) on March 12, 2004. Jay W. Maynard, Esq., in Worthington, Ohio, filed the voluntary petition. The Debtor's chapter 11 petition estimated less than $50,000 in assets and between $1 million and $10 million in debts at the time of the filing. After the debtor filed its voluntary Chapter 11 petition, it moved to dismiss the Chapter 7 case. The Court determined that the case should proceed under Chapter 11, but that the appropriate filing date was the date the involuntary petition was filed. On April 26, 2004, the Columbia Gas Entities moved for the appointment of a Chapter 11 trustee, or in the alternative, for conversion of the case to a case under Chapter 7. On August 18, 2004, the Columbia Entities, Duquesne Light Company and the Debotr agreed to the appointment of a Chapter 11 trustee, and Larry J. McClatchey was appointed as the Chapter 11 trustee by order entered October 8, 2004. Nicole Energy Marketing, Inc., Nicole Gas Marketing, Inc., and Nicole Gas Production Ltd., are also in bankruptcy (Bankr. S.D. Ohio Case Nos. 09-52884, 0952885 and 09-52887), following the filing of involuntary chapter 7 petitions on March 23, 2009, and the court's entry of orders for relief in those cases on May 4, 2009. Frederick L. Ransier serves as the Chapter 7 Trustee in these three cases. On November 14, 2005, Mr. McClatchey sued (Bankr. S.D. Ohio Adv. Pro. No. 05-2602) Freddie L. Fulson; Nicole Energy Marketing, Inc.; Nicole Gas Marketing, Inc.; Nicole Gas Production, Ltd.; Synaversa Energy Services, Inc.; Synaversa, Ltd.; and Seaburyson Properties, Ltd. The complaint seeks substantive consolidation of the assets and liabilities of the Fulson Entities with NES, an accounting, and an order avoiding and recovering certain alleged fraudulent and preferential transfers between NES and one or more of the defendants, or in the alternative, a money judgment. As reported in the Troubled Company Reporter on May 25, 2009, the Fulson Entities' move to withdraw the reference was denied. Prosecution of the adversary proceeding against the three Chapter 7 Debtors is now stayed by their bankruptcy filings, while prosecution as to Mr. Fulson; Synaversa Energy Services, Inc.; Synaversa Ltd. and Seaburyson Properties, Ltd. is not stayed, the nature of the relief sought makes it impractical to proceed against fewer than all defendants, and no action has been taken in connection with the adversary proceeding since 2008. NES and NEM assert breach-of-contract and negligence claims against one or more of the Columbia Entities. On July 15, 2005, following protracted litigation, the Bankruptcy Court remanded NES's and NEM's lawsuit to state court. In October 2006, Mr. McClatchey entered into an asset purchase agreement that provided for the sale of the bankruptcy estate's interest in the claims asserted in the state court litigation against certain Columbia Entities and sought competing bids. No competing bids were submitted, but Mr. Fulson and other Nicole Entities filed objections to the sale, and a three-day hearing on Mr. McClatchey's motion for approval of the APA was conducted in May 2007. Following post-hearing briefing, the Court issued a lengthy memorandum opinion approving the sale. The Court's order approving the sale was upheld on appeal. Mr. McClatchey sought to distribute the sale proceeds by way of a motion, but Mr. Fulson objected to that approach, and the Court ruled that Mr. McClatchey could not distribute the proceeds without either obtaining confirmation of a Chapter 11 liquidating plan or converting the NES case to Chapter 7, based on the teaching in Dep't of Taxation v. Swallen's, Inc. (In re Swallen's, Inc.), 269 B.R. 634, 639 (Bankr. B.A.P. 6th Cir. 2001) ("We simply cannot find a basis in the Bankruptcy Code for permitting, over objections by interested parties, a distribution to creditors of all the assets in a Chapter 11 case absent a confirmed Chapter 11 plan.") Mr. McClatchey then filed a liquidating plan. That plan was confirmed by this Court on September 9, 2009, following a hearing at which Mr. Fulson was permitted to cross-examine Mr. McClatchey. NLP ACQUISITION: Section 341(a) Meeting Scheduled for April 19 -------------------------------------------------------------- The U.S. Trustee for Region 9 will convene a meeting of creditors in NLP Acquisition Limited Partnership's Chapter 11 case on April 19, 2010, at 10:00 a.m. The meeting will be held at Frank T Bow Fed Building, 201 Cleveland Ave SW, Basement B-13, Canton, OH 44702. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. North Canton, Ohio-based NLP Acquisition Limited Partnership filed for Chapter 11 bankruptcy protection on February 24, 2010 (Bankr. N.D. Ohio Case No. 10-60613). Patrick J. Keating, Esq., at Buckingham, Doolittle & Burroughs LLP, assists the Company in its restructuring effort. The Company listed $1,000,001 to $10,000,000 in assets and $10,000,001 to $50,000,000 in liabilities. NLP ACQUISITION: Taps Buckingham Doolittle as Bankruptcy Counsel ---------------------------------------------------------------- NLP Acquisition Limited Partnership, et al., have asked for authorization from the U.S. Bankruptcy Court for the Northern District of Ohio to employ Buckingham, Doolittle & Burroughs, LLP, as bankruptcy counsel. BDB will, among other things: a. prepare necessary and appropriate applications, motions, pleadings, notices, schedules and other documents required or permitted to be filed with the Court in the Debtors' Chapter 11 cases; b. review financial and other reports to be filed and advise the Debtors and preparing responses to applications, motions, pleadings or other paper as required or permitted to be filed in the Debtors' Chapter 11 cases; c. advise the Debtors and assist in the negotiation and documentation of the refinancing or sale of the Debtors' assets, debt and lease restructuring, executor contract and unexpired lease assumptions, assignments or rejections, and related transactions; and d. review the nature and validity of liens asserted against the Debtors' property and advise the Debtors concerning the enforceability of the liens. BDB will be paid based on the hourly rates of its personnel: Partners $200-$465 Associates $160-$330 Paralegals $105-$220 Patrick J. Keating, a shareholder and principal at BDB, assures the Court that the firm is "disinterested" as that term is defined in Section 101(14) of the Bankruptcy Code. North Canton, Ohio-based NLP Acquisition Limited Partnership filed for Chapter 11 bankruptcy protection on February 24, 2010 (Bankr. N.D. Ohio Case No. 10-60613). The Company listed $1,000,001 to $10,000,000 in assets and $10,000,001 to $50,000,000 in liabilities. NORTEL NETWORKS: ASM Capital Continues to Buy Claims ---------------------------------------------------- The Office of the Clerk of the Bankruptcy Court recorded 10 notices of transfers of claims, aggregating more than $5.8 million, in the Debtors' Chapter 11 cases for the period from February 2 to 26, 2010. They are: Claim Claim Transferee Transferor Number Amount ---------- ---------- ------ ---------- ASM Capital III L.P. California Software 1356 $992,155 Laboratories American Furukawa Inc. 4531 $117,300 ASM Capital L.P. American Furukawa Inc. 4544 $51,000 Gladeck & Associates LLC N/A $4,000 Digital Lightwave N/A $23,635 Acme Packet Inc. 4455 $472,812 Blue Heron Micro Welch Consulting -- $14,572 Opportunities Fund -- $38,919 United States Debt Macadamian Technologies 1162 $1,291,998 Recovery III LP Inc. Telrad Networks 2560 $2,857,588 About Nortel Networks Nortel Networks (OTCBB:NRTLQ) -- http://www.nortel.com/-- delivers communications capabilities that make the promise of Business Made Simple a reality for the Company's customers. The Company's next-generation technologies, for both service provider and enterprise networks, support multimedia and business-critical applications. Nortel's technologies are designed to help eliminate the barriers to efficiency, speed and performance by simplifying networks and connecting people to the information they need, when they need it. Nortel Networks Corp., Nortel Networks Inc., and other affiliated corporations in Canada sought insolvency protection under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice (Commercial List). Ernst & Young was appointed to serve as monitor and foreign representative of the Canadian Nortel Group. The Monitor sought recognition of the CCAA Proceedings in the U.S. by filing a bankruptcy petition under Chapter 15 of the U.S. Bankruptcy Code (Bankr. D. Del. Case No. 09-10164). Mary Caloway, Esq., and Peter James Duhig, Esq., at Buchanan Ingersoll & Rooney PC, in Wilmington, Delaware, serves as the Chapter 15 petitioner's counsel. Nortel Networks Inc. and 14 affiliates filed separate Chapter 11 petitions on January 14, 2009 (Bankr. D. Del. Case No. 09-10138). Judge Kevin Gross presides over the case. James L. Bromley, Esq., at Cleary Gottlieb Steen & Hamilton, LLP, in New York, serves as general bankruptcy counsel; Derek C. Abbott, Esq., at Morris Nichols Arsht & Tunnell LLP, in Wilmington, serves as Delaware counsel. The Chapter 11 Debtors' other professionals are Lazard Freres & Co. LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims and notice agent. Certain of Nortel's European subsidiaries also made consequential filings for creditor protection. The Nortel Companies related in a press release that Nortel Networks UK Limited and certain subsidiaries of the Nortel group incorporated in the EMEA region have each obtained an administration order from the English High Court of Justice under the Insolvency Act 1986. The applications were made by the EMEA Subsidiaries under the provisions of the European Union's Council Regulation (EC) No. 1346/2000 on Insolvency Proceedings and on the basis that each EMEA Subsidiary's centre of main interests is in England. Under the terms of the orders, representatives of Ernst & Young LLP have been appointed as administrators of each of the EMEA Companies and will continue to manage the EMEA Companies and operate their businesses under the jurisdiction of the English Court and in accordance with the applicable provisions of the Insolvency Act. Several entities, particularly, Nortel Government Solutions Incorporated have material operations and are not part of the bankruptcy proceedings. As of September 30, 2008, Nortel Networks Corp. reported consolidated assets of US$11.6 billion and consolidated liabilities of US$11.8 billion. The Nortel Companies' U.S. businesses are primarily conducted through Nortel Networks Inc., which is the parent of majority of the U.S. Nortel Companies. As of September 30, 2008, NNI had assets of about US$9 billion and liabilities of US$3.2 billion, which do not include NNI's guarantee of some or all of the Nortel Companies' about US$4.2 billion of unsecured public debt. Bankruptcy Creditors' Service, Inc., publishes Nortel Networks Bankruptcy News. The newsletter tracks the Chapter 11 proceeding and ancillary foreign proceedings undertaken by Nortel Networks Corp. and its various affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000) NORTEL NETWORKS: Jefferies Okayed to Assume More Responsibilities ----------------------------------------------------------------- The Official Committee of Unsecured Creditors in Nortel Network's cases obtained permission from the U.S. Bankruptcy Court to expand the scope of services of its investment banker, Jefferies & Company Inc. The Creditors Committee wants Jefferies' role expanded to include these additional responsibilities: (1) Extensive interfacing with various bidders; (2) Serving as a primary point of contact for various bidders; (3) Directly negotiating with bidders on the structure of bids and process issues; (4) Providing extensive feedback on proposals, deal terms and negotiation dynamics to both the Debtors and certain bidders; (5) Providing considerable securities valuation analysis; and (6) Extensive bidder, transaction structure and pro-forma business plan due diligence. In connection with the proposed expanded services, the Creditors Committee asks the Court to approve the proposed modification to the terms of the firm's compensation structure. The modified terms are: (1) Pursuant to the original application, Jefferies' monthly fee was to be reduced from $250,000 to $200,000 on and after June 1, 2009. As modified, the monthly fee will remain at $250,000 until February 1, 2010, at which time the monthly fee will be reduced to $200,000; provided that the Creditors Committee will have the right to extend the date on which the monthly fee is reduced to $200,000 to a date that occurs after February 1, 2010, pursuant to a unanimous vote of the members of the Creditor Committee. (2) Pursuant to the original application, 50% of the monthly fees actually paid to Jefferies in excess of $2.6 million were to be credited against the transaction fee payable to the firm. As modified, 50% of the monthly fees paid to Jefferies for services rendered on and after August 1, 2010, will be credited against the transaction fee payable to the firm; provided that the Creditors Committee will have the right to extend the period during which monthly fees are not creditable against the transaction fee payable to Jefferies to a date that occurs after August 1, 2010, pursuant to a unanimous vote of the members of the Creditors Committee. (3) Should Jefferies be asked to produce an expert report or otherwise provide expert testimony in the form of deposition or live testimony in connection with the Debtors' cases, the firm and the Creditors Committee will determine a mutually agreeable fee based on the scope of services for the requested expert work. In no instance will expert fees exceed $150,000 for any discrete matter in which testimony is not provided; $500,000 for any discrete matter under any circumstances; and $2,000,000 in aggregate fees for expert work performed in the Debtors' cases. About Nortel Networks Nortel Networks (OTCBB:NRTLQ) -- http://www.nortel.com/-- delivers communications capabilities that make the promise of Business Made Simple a reality for the Company's customers. The Company's next-generation technologies, for both service provider and enterprise networks, support multimedia and business-critical applications. Nortel's technologies are designed to help eliminate the barriers to efficiency, speed and performance by simplifying networks and connecting people to the information they need, when they need it. Nortel Networks Corp., Nortel Networks Inc., and other affiliated corporations in Canada sought insolvency protection under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice (Commercial List). Ernst & Young was appointed to serve as monitor and foreign representative of the Canadian Nortel Group. The Monitor sought recognition of the CCAA Proceedings in the U.S. by filing a bankruptcy petition under Chapter 15 of the U.S. Bankruptcy Code (Bankr. D. Del. Case No. 09-10164). Mary Caloway, Esq., and Peter James Duhig, Esq., at Buchanan Ingersoll & Rooney PC, in Wilmington, Delaware, serves as the Chapter 15 petitioner's counsel. Nortel Networks Inc. and 14 affiliates filed separate Chapter 11 petitions on January 14, 2009 (Bankr. D. Del. Case No. 09-10138). Judge Kevin Gross presides over the case. James L. Bromley, Esq., at Cleary Gottlieb Steen & Hamilton, LLP, in New York, serves as general bankruptcy counsel; Derek C. Abbott, Esq., at Morris Nichols Arsht & Tunnell LLP, in Wilmington, serves as Delaware counsel. The Chapter 11 Debtors' other professionals are Lazard Freres & Co. LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims and notice agent. Certain of Nortel's European subsidiaries also made consequential filings for creditor protection. The Nortel Companies related in a press release that Nortel Networks UK Limited and certain subsidiaries of the Nortel group incorporated in the EMEA region have each obtained an administration order from the English High Court of Justice under the Insolvency Act 1986. The applications were made by the EMEA Subsidiaries under the provisions of the European Union's Council Regulation (EC) No. 1346/2000 on Insolvency Proceedings and on the basis that each EMEA Subsidiary's centre of main interests is in England. Under the terms of the orders, representatives of Ernst & Young LLP have been appointed as administrators of each of the EMEA Companies and will continue to manage the EMEA Companies and operate their businesses under the jurisdiction of the English Court and in accordance with the applicable provisions of the Insolvency Act. Several entities, particularly, Nortel Government Solutions Incorporated have material operations and are not part of the bankruptcy proceedings. As of September 30, 2008, Nortel Networks Corp. reported consolidated assets of US$11.6 billion and consolidated liabilities of US$11.8 billion. The Nortel Companies' U.S. businesses are primarily conducted through Nortel Networks Inc., which is the parent of majority of the U.S. Nortel Companies. As of September 30, 2008, NNI had assets of about US$9 billion and liabilities of US$3.2 billion, which do not include NNI's guarantee of some or all of the Nortel Companies' about US$4.2 billion of unsecured public debt. Bankruptcy Creditors' Service, Inc., publishes Nortel Networks Bankruptcy News. The newsletter tracks the Chapter 11 proceeding and ancillary foreign proceedings undertaken by Nortel Networks Corp. and its various affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000) NORTEL NETWORKS: Proposes LinkLaters as U.K. Counsel ---------------------------------------------------- Nortel Networks Inc. and its affiliated debtors seek Bankruptcy Court approval to employ Linklaters LLP, as their U.K. counsel, effective January 26, 2010. The Debtors tapped the services of Linklaters in light of the proofs of claim that were filed against NNI and some of its affiliates by the Board of the Pension Protection Fund. NNUK Pension Trust serves as trustee of the pension scheme of Nortel Networks UK Ltd. while the PPF Board manages U.K.'s Pension Protection Fund. The amount of claim asserted by the Pension Trustee and the PPF Board has not yet been determined. It is, however, believed to be over GBP2.1 billion, which is the estimated NNUK's pension scheme deficit as of January 13, 2009. "Linklaters' resources and capabilities are crucial to the multi- jurisdictional issues confronting the Debtors' success including asserted potential pension obligations under U.K. law," says the Debtors' counsel, Ann Cordo, Esq., at Morris Nichols Arsht & Tunnell LLP, in Wilmington, Delaware. "The services of Linklaters are necessary and essential to enable the Debtors to defend the claims of the trustee and the PPF," Ms. Cordo says in court papers. As the Debtors' U.K. counsel, Linklaters will be tasked to provide advice to the Debtors about U.K. law and other legal services in connection with the alleged pension obligations and the proofs of claim filed by the Pension Trustee and the PPF. Linklaters will be paid for its services on an hourly basis and will also be reimbursed of its necessary and reasonable expenses. The firm's hourly rates are: Partners GBP650 Counsel GBP600 Managing Associates GBP550 Associates GBP465 Trainee Solicitors GBP280 Paralegals GBP125 The Debtors will also be charged of fees and expenses of Paul Newman QC and James Walmsley of Wilberforce Chambers, the barristers instructed by Linklaters to represent NNI and Nortel Networks (CALA) Inc. in their Chapter 11 cases or to defend their rights under U.K. law. The hourly rates of Messrs. Newman and Walmsley are GBP500 and GBP175, respectively. In a declaration filed with the Court, Mark Blyth, Esq., a partner at Linklaters, assures the Court that his firm does not have interests adverse to the interest of the Debtors or their creditors. He asserts that Linklaters is a "disinterested person" as the term is defined under Section 101(14) of the Bankruptcy Code. About Nortel Networks Nortel Networks (OTCBB:NRTLQ) -- http://www.nortel.com/-- delivers communications capabilities that make the promise of Business Made Simple a reality for the Company's customers. The Company's next-generation technologies, for both service provider and enterprise networks, support multimedia and business-critical applications. Nortel's technologies are designed to help eliminate the barriers to efficiency, speed and performance by simplifying networks and connecting people to the information they need, when they need it. Nortel Networks Corp., Nortel Networks Inc., and other affiliated corporations in Canada sought insolvency protection under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice (Commercial List). Ernst & Young was appointed to serve as monitor and foreign representative of the Canadian Nortel Group. The Monitor sought recognition of the CCAA Proceedings in the U.S. by filing a bankruptcy petition under Chapter 15 of the U.S. Bankruptcy Code (Bankr. D. Del. Case No. 09-10164). Mary Caloway, Esq., and Peter James Duhig, Esq., at Buchanan Ingersoll & Rooney PC, in Wilmington, Delaware, serves as the Chapter 15 petitioner's counsel. Nortel Networks Inc. and 14 affiliates filed separate Chapter 11 petitions on January 14, 2009 (Bankr. D. Del. Case No. 09-10138). Judge Kevin Gross presides over the case. James L. Bromley, Esq., at Cleary Gottlieb Steen & Hamilton, LLP, in New York, serves as general bankruptcy counsel; Derek C. Abbott, Esq., at Morris Nichols Arsht & Tunnell LLP, in Wilmington, serves as Delaware counsel. The Chapter 11 Debtors' other professionals are Lazard Freres & Co. LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims and notice agent. Certain of Nortel's European subsidiaries also made consequential filings for creditor protection. The Nortel Companies related in a press release that Nortel Networks UK Limited and certain subsidiaries of the Nortel group incorporated in the EMEA region have each obtained an administration order from the English High Court of Justice under the Insolvency Act 1986. The applications were made by the EMEA Subsidiaries under the provisions of the European Union's Council Regulation (EC) No. 1346/2000 on Insolvency Proceedings and on the basis that each EMEA Subsidiary's centre of main interests is in England. Under the terms of the orders, representatives of Ernst & Young LLP have been appointed as administrators of each of the EMEA Companies and will continue to manage the EMEA Companies and operate their businesses under the jurisdiction of the English Court and in accordance with the applicable provisions of the Insolvency Act. Several entities, particularly, Nortel Government Solutions Incorporated have material operations and are not part of the bankruptcy proceedings. As of September 30, 2008, Nortel Networks Corp. reported consolidated assets of US$11.6 billion and consolidated liabilities of US$11.8 billion. The Nortel Companies' U.S. businesses are primarily conducted through Nortel Networks Inc., which is the parent of majority of the U.S. Nortel Companies. As of September 30, 2008, NNI had assets of about US$9 billion and liabilities of US$3.2 billion, which do not include NNI's guarantee of some or all of the Nortel Companies' about US$4.2 billion of unsecured public debt. Bankruptcy Creditors' Service, Inc., publishes Nortel Networks Bankruptcy News. The newsletter tracks the Chapter 11 proceeding and ancillary foreign proceedings undertaken by Nortel Networks Corp. and its various affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000) NPS PHARMACEUTICALS: Morgan Stanley Holds 4.8% of Common Stock -------------------------------------------------------------- Morgan Stanley and Morgan Stanley Capital Services Inc. disclosed that as of December 31, 2009, they may be deemed to beneficially own 2,341,954 shares or roughly 4.8% of the common stock of NPS Pharmaceuticals Inc. Based in Bedminster, New Jersey, NPS Pharmaceuticals Inc. (Nasdaq: NPSP) -- http://www.npsp.com/-- is developing specialty therapeutics company for gastrointestinal and endocrine disorders with high unmet medical need. The Company is currently advancing two late-stage programs. Teduglutide, a proprietary analog of GLP-2, is in Phase 3 clinical development for intestinal failure associated with short bowel syndrome as GATTEX(TM) and in preclinical development for gastrointestinal mucositis and necrotizing enterocolitis. At September 30, 2009, the Company had $154,654,000 in total assets, including $22,226,000 in cash and cash equivalents, against $377,021,000 in total liabilities, resulting in $222,367,000 in stockholders' deficit. NPS PHARMACEUTICALS: OrbiMed Holds 8.92% of Common Stock -------------------------------------------------------- OrbiMed Advisors LLC; OrbiMed Capital LLC; and Samuel D. Isaly disclosed that as of December 31, 2009, they may be deemed to beneficially own in the aggregate 4,319,000 shares or roughly 8.92% of the common stock of NPS Pharmaceuticals Inc. OrbiMed Advisors LLC and OrbiMed Capital LLC hold shares on behalf of Eaton Vance Worldwide Health Sciences (2,385,000 shares), Eaton Vance Emerald Worldwide Health Sciences (39,000 shares), Eaton Vance Variable Trust (45,000 shares), and Finsbury Worldwide Pharmaceutical Trust (1,850,000 shares). Based in Bedminster, New Jersey, NPS Pharmaceuticals Inc. (Nasdaq: NPSP) -- http://www.npsp.com/-- is developing specialty therapeutics company for gastrointestinal and endocrine disorders with high unmet medical need. The Company is currently advancing two late-stage programs. Teduglutide, a proprietary analog of GLP-2, is in Phase 3 clinical development for intestinal failure associated with short bowel syndrome as GATTEX(TM) and in preclinical development for gastrointestinal mucositis and necrotizing enterocolitis. At September 30, 2009, the Company had $154,654,000 in total assets, including $22,226,000 in cash and cash equivalents, against $377,021,000 in total liabilities, resulting in $222,367,000 in stockholders' deficit. NPS PHARMACEUTICALS: Renaissance Tech Holds 5.65% of Common Stock ----------------------------------------------------------------- Renaissance Technologies LLC and James H. Simons disclosed that as of December 31, 2009, they may be deemed to beneficially own 2,734,880 shares or roughly 5.65% of the common stock of NPS Pharmaceuticals Inc. Based in Bedminster, New Jersey, NPS Pharmaceuticals Inc. (Nasdaq: NPSP) -- http://www.npsp.com/-- is developing specialty therapeutics company for gastrointestinal and endocrine disorders with high unmet medical need. The Company is currently advancing two late-stage programs. Teduglutide, a proprietary analog of GLP-2, is in Phase 3 clinical development for intestinal failure associated with short bowel syndrome as GATTEX(TM) and in preclinical development for gastrointestinal mucositis and necrotizing enterocolitis. At September 30, 2009, the Company had $154,654,000 in total assets, including $22,226,000 in cash and cash equivalents, against $377,021,000 in total liabilities, resulting in $222,367,000 in stockholders' deficit. NPS PHARMACEUTICALS: Visium Holds 9.04% of Common Stock ------------------------------------------------------- Visium Balanced Master Fund, LTD, Visium Asset Management, LP, JG Asset, LLC, and Jacob Gottlieb disclosed that as of December 31, 2009, they may be deemed to beneficially own 4,378,563 shares or roughly 9.04% of the common stock of NPS Pharmaceuticals Inc. Based in Bedminster, New Jersey, NPS Pharmaceuticals Inc. (Nasdaq: NPSP) -- http://www.npsp.com/-- is developing specialty therapeutics company for gastrointestinal and endocrine disorders with high unmet medical need. The Company is currently advancing two late-stage programs. Teduglutide, a proprietary analog of GLP-2, is in Phase 3 clinical development for intestinal failure associated with short bowel syndrome as GATTEX(TM) and in preclinical development for gastrointestinal mucositis and necrotizing enterocolitis. At September 30, 2009, the Company had $154,654,000 in total assets, including $22,226,000 in cash and cash equivalents, against $377,021,000 in total liabilities, resulting in $222,367,000 in stockholders' deficit. OCCUPATIONAL & MEDICAL: Retractable Wins Permanent Injunction ------------------------------------------------------------- Retractable Technologies, Inc. (AMEX: RVP) said that a final judgment and permanent injunction were entered March 4, 2010, in the litigation of Retractable Technologies, Inc. v. OMI (Occupational & Medical Innovations Limited, an Australian company). On December 18, 2009, the jury delivered a verdict in favor of Retractable in its patent infringement and misappropriation of trade secrets lawsuit against OMI. The Court ordered that Retractable recover damages and prejudgment interest from OMI based on OMI's misappropriation of trade secrets in the amount of $3,153,575. In addition, the Court entered a permanent injunction enjoining OMI, its manufacturers, distributors and service providers from infringing Retractable's Patent Number 6,572,584, by making, importing, selling, or using any of OMI's syringes in the United States and its territories. The permanent injunction was effective at 12:00 noon, Central Time, on March 4, 2010. About Retractable Technologies Retractable manufactures and markets safety medical products, principally VanishPoint(R) automated retraction safety syringes, automated retraction blood collection devices, and automated retraction I.V. catheters, that virtually eliminate healthcare worker exposure to accidental needlestick injuries. These revolutionary devices use patented technology that causes the contaminated needle to retract automatically, a feature that is designed to prevent both accidental needlestick injury and device reuse. Retractable also manufactures and markets Patient Safe(R) syringes that are uniquely designed to reduce the risk of bloodstream infections resulting from catheter hub contamination. Patient's Safe unique luer guard reduces the risk of luer tip contact contamination and the risk of contamination of intravenous fluid. About Occupational & Medical Occupational & Medical is an Australia-based developer of safety products for the health-care industry. OMI is undergoing insolvency proceedings in Australia. It is seeking from the U.S. Bankruptcy Court recognition of the Australian proceedings as a foreign main proceeding under Chapter 15 of the Bankruptcy Code. A hearing on the request is scheduled for March 18. Occupational & Medical Innovations Ltd. filed a Chapter 15 petition in Tyler, Texas (Bankr. E.D. Tex. Case No. 10-60181). It said assets are less than $10 million while debt exceeds $100 million. Chapter 15 allows a non-U.S. debtor to seek a stay of creditor actions against it in the U.S. while it reorganizes abroad. OMI had been embroiled in litigation before the U.S. District Court, Eastern District of Texas, Tyler Division, involving alleged patent infringement by OMI of Retractable Technologies, Inc. patent involving retractable syringes. A trial was had on December 14 through 17th, 2009, with a jury verdict in favor of RTI being rendered on December 18, 2009. OMI's Restructuring Plan As to the Australian proceedings, on February 19, 2010, OMI's administrators received a "Proposal for a Deed of Company Arrangement from AssistMed (Australia) Pty. Ltd." In it, AssistMed Pty., Ltd., proposes to take a 51% equity stake in OMI in exchange for payment of all secured creditors, employee entitlements, and costs of administration. Unsecured creditors will receive either payment or stock in the recapitalized company. The administrators will schedule a second meeting of creditors to obtain approvals for the arrangement in the next couple of weeks, and anticipate that some time in early April the arrangement will be approved. The administrators believe that this arrangement will likely be approved by the creditors. ORLEANS HOMEBUILDERS: Gets Interim OK to Obtain $11MM Financing --------------------------------------------------------------- Orleans Homebuilders, Inc., has received the approval of the U.S. Bankruptcy Court for the District of Delaware on several key motions that will allow the continued operation of its homebuilding and management services operations. The Court gave interim approval for up to $26 million of the Company's $40 million debtor-in-possession (DIP) financing line, including up to $11 million of cash funding and up to $15 million of letters of credit. The Company intends to use the proceeds of the financing for, among other things, its ordinary course business expenses. The Court approved the Company's motions to pay prepetition employee wage and benefit charges, as well as motions to maintain the Company's existing cash management systems and to use its cash collateral. The Court also approved the Company's motions for the continuation of the Mortgage Plus Program and home warranty programs, and approved payment of prepetition amounts owed to homeowners' and condo associations. Finally, the Court approved a motion to honor prepetition claims for certain critical vendors, among other items. Orleans Homebuilders, Inc. -- aka FPA Corporation, OHB, Parker & Lancaster, Masterpiece Homes, Realen Homes and Orleans -- develops, builds and markets high-quality single-family homes, townhouses and condominiums. From its headquarters in suburban Philadelphia, the Company serves a broad customer base including first-time, move-up, luxury, empty-nester and active adult homebuyers. The Company currently operates in these 11 distinct markets: Southeastern Pennsylvania; Central and Southern New Jersey; Orange County, New York; Charlotte, Raleigh and Greensboro, North Carolina; Richmond and Tidewater, Virginia; Chicago, Illinois; and Orlando, Florida. The Company's Charlotte, North Carolina operations also include adjacent counties in South Carolina. Orleans Homebuilders employs approximately 300 people. The Company filed for Chapter 11 bankruptcy protection on March 1, 2010 (Bankr. D. Delaware Case No. 10-10684). Cahill Gordon & Reindell LLP is the Debtor's bankruptcy and restructuring counsel. Curtis S. Miller, Esq., and Robert J. Dehney, Esq., at Morris, Nichols, Arsht & Tunnell, are the Debtor's Delaware and restructuring counsel. Blank Rome LLP is the Debtor's special corporate counsel. Garden City Group Inc. is the Debtor's claims and notice agent. The Company estimated assets and debts at $100,000,001 to $500,000,000. OVB LLC: Files for Bankruptcy to Protection to Avert Foreclosure ---------------------------------------------------------------- Rebecca Logan at FayObserver.com notes OVB LLC and Camellia Parke LLC made a voluntary filing under Chapter 11 of the U.S. Bankruptcy Code to avert a foreclosure auction of three parcels in a shopping center near Pinehurst. OVB LLC and Camellia Parke LLC owns a village. PHILADELPHIA NEWSPAPERS: Pleads for Chance to Probe Recordings -------------------------------------------------------------- Law360 reports that Philadelphia Newspapers LLC has renewed its efforts to win permission to hire a law firm to investigate unauthorized recordings of confidential prepetition meetings between the company and senior secured lenders, arguing that it could complete the probe before confirmation if all the parties cooperate. Philadelphia Newspapers -- http://www.philly.com/-- owns and operates numerous print and online publications in the Philadelphia market, including the Philadelphia Inquirer, the Philadelphia Daily News, several community newspapers, the region's number one local Web site, philly.com, and a number of related online products. The Company's flagship publications are the Inquirer, the third oldest newspaper in the country and the winner of numerous Pulitzer Prizes and other journalistic recognitions, and the Daily News. Philadelphia Newspapers and its debtor-affiliates filed for Chapter 11 bankruptcy protection on February 22, 2008 (Bankr. E.D. Pa. Case No. 09-11204). Mark K. Thomas, Esq., and Paul V. Possinger, Esq., at PROSKAUER ROSE LLP in Chicago, Illinois; and Lawrence G. McMichael, Esq., Christie Callahan Comerford, Esq., and Anne M. Aaronson, Esq., at DILWORTH PAXSON LLP, in Philadelphia, Pennsylvania, serve as bankruptcy counsel. The Debtors' financial advisor is Jefferies & Company Inc. The Garden City Group, Inc., serves as claims and notice agent. Ben Logan, Esq., at O'MELVENY & MYERS LLP in Los Angeles, California; and Gary Schildhorn, Esq., at ECKERT SEAMANS CHERIN & MELLOTT, LLC in Philadelphia, represent the Official Committee of Unsecured Creditors. Fred S. Hodara, Esq., Abid Qureshi, Esq., and Alexis Freeman, Esq., at AKIN GUMP STRAUSS HAUER & FELD LLP in New York, represent the Steering Group of Prepetition Secured Lenders. Philadelphia Newspapers listed assets and debts of $100 million to $500 million in its bankruptcy petition. PRIME GROUP: Board Approves Sale of Chicago Property ---------------------------------------------------- Prime Group Realty Trust said that its Board of Trustees approved the sale of 180 North LaSalle Street, Chicago, Illinois, from the subsidiary of the Company that owns the Property to 180 N. LaSalle Realty LLC, an entity indirectly controlled by Mr. Michael Silberberg of Nanuet, New York. The parties entered into a purchase and sale agreement that became effective on Feb. 25, 2010. The gross purchase price for the Property is $72.25 million, subject to customary pro-rations, credits and adjustments. The closing of the sale is conditioned upon the existing first mortgage lender consenting to the assumption of the Property's existing debt by the Purchaser, unless the Purchaser notifies the Seller that the Purchaser has elected not to assume the existing debt and will instead obtain new financing for the acquisition. The Purchaser has deposited $4.0 million in escrow to secure its obligation to purchase the Property, which is nonrefundable except upon: * the failure of the first mortgage lender to consent to the assumption of the existing debt by the Purchaser; or * the occurrence of certain other customary events, such as a default by the Seller or the failure of the Seller to deliver certain satisfactory tenant estoppel certificates. The Company currently estimates that after closing adjustments and costs, the Seller will receive net proceeds of approximately $12.46 million. The Seller's estimated GAAP gain on the sale is approximately $1.8 million. It is currently contemplated that the closing will occur in May or June 2010. In the event that the Purchaser defaults on its obligation to purchase the Property, the Seller's sole remedy is to receive the Earnest Money as liquidated damages. In addition, the Company also announced that two of its subsidiaries, each of which own separate portions of the Continental Towers Complex in Rolling Meadows Illinois, are in default under their respective first mortgage loans encumbering the Complex. Continental Towers, L.L.C., a subsidiary of the Company, is the owner of Tower I, Tower III and the Commercium at the Continental Towers Complex. The CT Property is currently encumbered by a first mortgage loan from CWCapital LLC in the principal amount of $73.6 million. A separate subsidiary of the Company, Continental Towers Associates III, LLC, is the owner of Tower II at the Continental Towers Complex. The CTA III Property is currently encumbered by a first mortgage loan from Lender in the principal amount of $41.4 million. On Feb. 26, 2010, CTA III informed the Lender that it is in default under the CTA III Loan because the cash flow from the CTA III Property is not sufficient to pay the required escrows and debt service payments on the CTA III Loan. On the same day, CT LLC acknowledged to the Lender that the CT Loan is in default because it is cross-defaulted with the CTA III Loan. CTA III and CT LLC are currently in discussions with the Lender regarding the foregoing. Pursuant to the terms of each loan, upon the occurrence of a default the Lender may accelerate both loans and declare the obligations immediately due and payable. However, the CT Loan and the CTA III Loan are non-recourse to their respective borrowers, subject to customary non-recourse carve-outs, including but not limited to, certain environmental matters, fraud, waste, misapplication of funds, various special purpose entity covenants, the filing of a voluntary bankruptcy and other similar matters, which non-recourse carve-outs have been guaranteed by the Company's operating partnership, Prime Group Realty, L.P. The Company is currently not aware of the occurrence of any event that would constitute a non-recourse carve-out on either loan. About Prime Group Realty Trust Based in Chicago, Illinois, Prime Group Realty Trust (NYSE: PGEPRB) -- http://www.pgrt.com/-- is a fully-integrated, self- administered, and self-managed real estate investment trust which owns, manages, leases, develops, and redevelops office and industrial real estate, primarily in metropolitan Chicago. The Company owns 7 office properties containing an aggregate of 3.2 million net rentable square feet and a joint venture interest in one office property comprised of 101,000 net rentable square feet. The Company leases and manages 3.3 million square feet comprising all of its wholly owned properties. In addition, the Company is the asset and development manager for a 1.1 million square foot office building located at 1407 Broadway Avenue in New York. * * * As reported by the Troubled Company Reporter on December 15, 2009, Prime Group Realty Trust said the Company's Board of Trustees has determined not to declare a quarterly distribution on its Series B Preferred Shares for the fourth quarter of 2009, and that the Board is unable to determine when the Company might recommence distributions on the Series B Preferred Shares. According to the Troubled Company Reporter on March 3, 2010, Two of Prime Group Realty Trust's subsidiaries, each of which own separate portions of the Continental Towers Complex in Rolling Meadows, Illinois, are in default under their first mortgage loans encumbering the Complex. Continental Towers, L.L.C., a subsidiary of the Company, is the owner of Tower I, Tower III and the Commercium at the Continental Towers Complex. The CT Property is encumbered by a first mortgage loan from CWCapital LLC in the principal amount of $73.6 million. PRIMUS TELECOM: Reports $16.4 Million Net Income in Q4 2009 ----------------------------------------------------------- Primus Telecommunications Group, Inc., disclosed Thursday its financial results for the quarter and full year ended Dec. 31, 2009. Net income was $16.4 million, or $1.71 per basic and $1.67 per diluted common share for the fourth quarter 2009, compared to a net loss of $15.2 million, or $(1.58) per basic and diluted common share, in the prior quarter and a net loss of $35.3 million, or $(0.25) per basic and diluted share in the year-ago quarter. For the fourth quarter 2009, net revenue was $216.4 million; Adjusted EBITDA was $23.1 million; and Free Cash Flow was $2.7 million. On a combined basis for the full year 2009, net revenue was $815.6 million; Adjusted EBITDA was $84.3 million; and Free Cash Flow was $27.9 million. "Our fourth quarter results conclude a year of improved Adjusted EBITDA and positive Free Cash Flow," said K. Paul Singh, Chairman and Chief Executive Officer. On a combined basis for the full year 2009, Adjusted EBITDA was $84.3 million representing a 28.0% increase over the prior year, and Free Cash Flow was $27.9 million. In the fourth quarter we successfully completed a $130 million debt refinancing which extended former 2011 debt maturities to 2016, subject to certain conditions. Net revenue from high margin Growth Services - which include broadband, data, data center, retail VoIP, on-net local and wireless services - as a percentage of total retail net revenue, continues to rise, reaching 43%, up from 42% in the third quarter and 38% a year ago. Additionally, the rate of decline of retail net revenue continued to slow again this quarter. "In 2010, we expect continuation of a challenging global economic environment with an overall weak demand outlook for residential and commercial telecom spending. In this macro economic and competitive environment our priorities for 2010 will focus on implementing further operational and productivity improvements to enhance the financial performance of our existing businesses. We will continue to make additional marketing investments, in a prudent manner, to support our revenue mix shift toward broadband, data hosting and hosted IP-PBX services. Our objective is to generate stable Adjusted EBITDA and Free Cash Flow in 2010 concluded Singh. Fourth Quarter 2009 Financial Results Net revenue of $216.4 million increased $8.4 million, or 4.1%, from $207.9 million in the third quarter of 2009. Exclusive of a favorable $9.2 million currency effect, net revenue decreased roughly $800,000, or 0.4%, from the third quarter of 2009. This sequential decrease, exclusive of the currency effect, was comprised of a decline of $1.6 million in retail revenues and growth of roughly $800,000 in wholesale revenue. The $1.6 million decline in retail revenue, exclusive of currency, reflects continued improvement from the decline of $2.2 million and $5.3 million experienced in the third and second quarters of 2009, respectively. Growth Services net revenue was 43% of retail revenue in the fourth quarter, as compared to 42% in the prior quarter. On a year-over-year basis, fourth quarter net revenue increased $13.1 million, or 6.4%. Exclusive of a favorable $30.0 million currency effect, net revenue decreased $16.9 million, or 8.3% from the fourth quarter a year ago. Net revenue less cost of revenue was $74.0 million, or 34.2% of net revenue, compared to $71.9 million, or 34.6% of net revenue, in the prior quarter and $67.2 million, or 33.1% of net revenue, in the year-ago quarter. The sequential margin percentage decline reflects the loss of high margin traditional voice and dial-up internet services partially offset by cost reductions. The year- over-year margin percentage increase reflects both a shift in product mix from lower margin wholesale revenue and cost reduction actions. Selling, general and administrative (SG&A) expense was $51.8 million, or 23.9% of net revenue, compared to $51.1 million, or 24.6% of net revenue in the prior quarter, and $52.1 million, or 25.6% of net revenue, in the year-ago quarter. The roughly $700,000 sequential increase in SG&A expense is comprised of a $2.4 million increase from foreign currency and a $1.7 million decrease from operating expenses. The year-over-year roughly $300,000 decrease in SG&A reflects a $7.5 million increase from foreign currency translation and a $7.8 million decrease in virtually all categories of expense, with the exception of advertising, and is reflective of the Company's cost reduction actions over the past year. Income from operations was $2.7 million compared to $0.6 million in the prior quarter. Depreciation and amortization expense was $19.5 million as compared to $20.0 million in the third quarter of 2009. Adjusted EBITDA was $23.1 million, or 10.7% of net revenue, compared to $21.0 million, or 10.1% of net revenue, in the prior quarter and $15.2 million, or 7.5% of net revenue, in the year-ago quarter. Interest expense was $8.6 million, a decrease of roughly $200,000 from $8.8 million in the prior quarter and a $3.7 million decrease from $12.3 million in the year-ago quarter. The year-over-year decrease is attributable to a reduction in the Company's level of indebtedness as a result of the Company's financial restructuring. The Company is currently finalizing the impact on its results of various matters that relate to income taxes. Therefore, certain figures presented in this press release, may, depending on the finalization of certain income tax matters, differ from those that will be presented in the Company's Form 10-K for the year ended December 31, 2009. Balance Sheet, Liquidity and Capital Resources PRIMUS ended the fourth quarter 2009 with $42.5 million in unrestricted cash and cash equivalents up from $41.9 million at September 30, 2009. Cash uses during the quarter were comprised of $10.6 million for interest, $5.5 million in capital expenditures, $3.5 million for debt refinancing and capital lease amortization payments, $2.4 million for working capital and $1.5 million for previously accrued reorganization costs. These uses were offset by $23.1 million of Adjusted EBITDA and $1.0 million from currency movements. The principal amount of PRIMUS' long-term debt obligations as of December 31, 2009, was $259.5 million. Free Cash Flow for the fourth quarter 2009 was $2.7 million compared to $9.1 million in the prior quarter and negative $601,000 in the year-ago quarter. Debt Refinancing On December 22, 2009, the Company completed a $130.0 million Unit Offering consisting of senior secured notes of PRIMUS Telecommunications Holding, Inc. and PRIMUS Telecommunications Canada, Inc. due 2016, subject to certain conditions. Proceeds of the offering were used to retire the existing $94.8 million senior secured term loan facility and the $27.0 million Canadian credit facility due February and May 2011, respectively. "During the quarter, we accomplished our most important near-term objective, completing our debt refinancing that extended our 2011 debt maturities to 2016, subject to certain conditions, and increased our financial flexibility," said Thomas R. Kloster, Chief Financial Officer. "We also completed initiatives to reduce $10 million in annualized costs which partially benefited our fourth quarter results and will further benefit 2010 results. Capital expenditures in the fourth quarter were $5.5 million, with over 90% focused on Growth Services in our primary markets, bringing capital expenditures for the year to $15.1 million. Free Cash Flow in the quarter was $2.7 million and we ended the year with $42.5 million in unrestricted cash and cash equivalents. "Having accomplished our key 2009 financial objectives, for 2010 we are focused on generating stable Adjusted EBITDA and Free Cash Flow," concluded Mr. Kloster. Full Year 2009 Results Net revenue was $815.6 million for the year ended December 31, 2009 compared to $895.9 million for year ended December 31, 2008. Adjusted EBITDA was $84.3 million for the year ended December 31, 2009 compared to $65.8 million for the year ended December 31, 2008. Balance Sheet The Company's consolidated balance sheet showed $579.3 million in assets, $478.8 million in total liabilities, and $100.6 million in total stockholders' equity. The Company also reported $147.9 million in and $159.9 million in current liabilities, for a working capital deficit of $12.0 million. A full-text copy of the press release is available at: http://researcharchives.com/t/s?5735 About PRIMUS Telecommunications PRIMUS Telecommunications Group, Incorporated (OTC BB: PMUG) -- http://www.primustel.com/-- is a facilities-based integrated global communications services provider offering international and domestic voice, voice-over-Internet protocol (VoIP), Internet, wireless, data and hosting services to business and residential retail customers and other carriers located primarily in the United States, Canada, Australia, Brazil the United Kingdom and certain countries in western Europe. PRIMUS provides services over its global network of owned and leased transmission facilities, including approximately 500 points-of-presence (POPs) throughout the world, ownership interests in undersea fiber optic cable systems, 18 carrier-grade international gateway and domestic switches, and a variety of operating relationships that allow it to deliver traffic worldwide. Founded in 1994, PRIMUS is based in McLean, Virginia. The Company and four its affiliates filed for Chapter 11 protection on March 16, 2009 (Bankr. D. Del. Lead Case No. 09-10867). George N. Panagakis, Esq., and T Kellan Grant, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in Chicago, are the Debtors' proposed counsel. Davis L. Wright, Esq., Eric M. Davis, Esq., and Anthony Clark, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in Wilmington, Delaware, are the Debtors' proposed local counsel. The Debtor proposed CRT Investment Banking LLC as financial adviser and investment banker. When the Debtors filed for protection from their creditors, they listed assets between $100 million and $500 million, and debts between $500 million and $1 billion. The Debtors filed their proposed plan of reorganization together with their bankruptcy petitions on March 16, 2009. An amended reorganization plan was filed April 27, 2009 and the final plan was filed on June 12, 2009. Primus has implemented its Chapter 11 reorganization plan. Primus' Chapter 11 plan was confirmed by the U.S. Bankruptcy Court for the District of Delaware on June 12, 2009. * * * As reported in the Troubled Company Reporter on December 8, 2009, Standard & Poor's Rating Services assigned its 'B-' corporate credit rating to Primus Telecommunications Group Inc. S&P also assigned 'B' issue-level and '2' recovery ratings to an aggregate $130 million of debt expected to be issued by two Primus units: Primus Telecommunications Holding Inc.'s $85 million senior secured notes due 2016 and Primus Telecommunications Canada Inc.'s $45 million senior secured notes due 2016. The '2' recovery rating indicates expectations for substantial (70%-90%) recovery of principal in the event of payment default. At the same time S&P assigned its 'CCC+' issue-level and '5' recovery ratings to unit Primus Telecommunications IHC Inc.'s existing $123 million senior secured subordinated notes due 2013. The '5' recovery rating on the notes indicates expectations for modest (10%-30%) recovery in the event of payment default. Outstanding debt, pro forma for the new notes, will be approximately $260 million, not adjusted for operating leases. Primus emerged from Chapter 11 bankruptcy on July 1, 2009, having discharged over half of its pre-petition debt. RENAISSANCE RESIDENTIAL: Bookkeeper Defined as a Professional ------------------------------------------------------------- WestLaw reports that postpetition services provided by a bookkeeper for the Chapter 11 debtor-in-possession were "professional" in nature, and so, if the DIP intended to employ the bookkeeper for these services, it should have applied for the bookkeeper's retention under 11 U.S.C. Sec. 327, the section of the Bankruptcy Code governing the employment of professional persons. The categories of services at issue included establishment of a "program to reduce losses to condominium values," "post-petition bankruptcy support work," and "assistance with the evidentiary hearing on the Debtor's use of cash collateral," the bankruptcy court noted. These services went beyond the bookkeeper's routine prepetition bookkeeping services, which were already separately provided for in the DIP's operating budget. The services in question were of an accounting, legal, and consulting nature, and they were directed toward administration of the estate. The tasks, moreover, required some degree of professional judgment, discretion, skill, or training. The court rejected the DIP's argument that the services were "normal course activities" that fell within Sec. 1108. In re Renaissance Residential of Countryside, LLC, --- B.R. ----, 2010 WL 675527 (Bankr. N.D. Ill.) (Squires, J.). "[W]hen in doubt," Judge Squires says, "a prudent professional should seek to be retained under Sec. 327 in order to be paid for the services rendered." Slip op. at 7. Judge Squires also says he won't entertain any request for retroactive compensation to the bookkeeping firm. About Renaissance Residential of Countryside Palatine, Illinois-based Renaissance Residential of Countryside, LLC, is a developer and owner of a residential condominium conversion project in Palatine, Ill., known as The Woods at Countryside. The Woods consists of 719 one- and two-bedroom residential condominium units. The company filed for Chapter 11 protection (Bankr. N.D. Ill. Case No. 09-31460) on Aug. 26, 2009. Richard H. Fimoff, Esq., at Robbins, Salomon & Patt Ltd., represents the Debtor in its restructuring effort. In its petition, the Debtor estimated $50,000,001 to $100,000,000 in assets and $10,000,001 to $50,000,000 in debts. RENEW ENERGY: Creditors Oppose Chapter 7 Conversion --------------------------------------------------- Law360 reports that two banks and a group of creditors are battling a push by the receiver for Renew Energy LLC's chief unsecured creditor to convert the case to a Chapter 7 liquidation - a result they say could be drastic for them and would undo months of progress toward their own liquidation plan. Headquartered in Jefferson, Wisconsin, Renew Energy LLC -- http://www.renewenergyllc.com/-- operates an ethanol plant facility. The Company filed for Chapter 11 on January 30, 2009 (Bankr. W.D. Wis. Case No. 09-10491). Christopher Combest, Esq., at Quarles & Brady LLP, represents the Debtor in its restructuring efforts. William T. Neary, the United States Trustee for Region 11, appointed five creditors to serve on an Official Committee of Unsecured Creditors. The Debtor disclosed $188,953,970 in total assets and $194,410,573 in total debts. REVLON CONSUMER: S&P Assigns 'B+' Rating on $800 Mil. Loan ---------------------------------------------------------- Standard & Poor's Ratings Services assigned its issue-level and recovery ratings on Revlon Consumer Products Corp.'s (B/Positive/- -) proposed new $800 million senior secured term loan facility. The issue-level rating on the proposed debt is 'B+' (one notch above the corporate credit rating). The recovery rating on the debt is '2', indicating S&P's expectation for substantial (70%- 90%) recovery in the event of a payment default. The issue-level rating on RCPC's existing 9.75% senior secured notes remains 'B-' (one notch below the corporate credit rating). The recovery rating on this secured debt remains '5', indicating S&P's expectation for modest (10%-30%) recovery in the event of a payment default. The company will use proceeds from this new issue to refinance its existing $815 million senior secured term loan B. At the same time, RCPC is planning to issue a new $140 million asset-based revolving credit facility (ABL revolver) to replace its $160 million existing asset-based revolving credit facility. RCPC's other debt includes its senior subordinated term loans. Standard & Poor's does not rate any of the revolving credit facilities or the senior subordinated term loans. The ratings on RCPC reflect the company's strong brand names, participation in the intensely competitive mass-market cosmetics industry, highly leveraged capital structure, and positive operating momentum. Ratings List Revlon Consumer Products Corp. Corporate Credit Rating B/Positive/-- New Rating Revlon Consumer Products Corp. Senior Secured US$800 mil Term Loan Facility B+ Recovery Rating 2 REVLON INC: Bank Debt Trades at 1% Off in Secondary Market ---------------------------------------------------------- Participations in a syndicated loan under which Revlon, Inc., is a borrower traded in the secondary market at 98.68 cents-on-the- dollar during the week ended Friday, March 5, 2010, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 0.65 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 190 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. RITE AID: Reports 3.2% Same Store Sales Decrease for February ------------------------------------------------------------- Rite Aid Corporation on Thursday announced sales results for February. For the five weeks ended February 27, 2010, same store sales decreased 3.2% over the prior-year period. Front-end same store sales decreased 3.2% while pharmacy same store sales, which included an approximate 206 basis points negative impact from new generic introductions, were down 3.2%. Prescriptions filled at comparable stores decreased 3.4% over the prior-year period. Front-end and pharmacy same store sales were negatively impacted by a weaker cough, cold and flu season than in the like period last year. Front end sales were also negatively affected by severe weather, especially in the northeast and south, and continued weak consumer demand. Total drugstore sales for the five-week period decreased 4.5% to $2.434 billion compared to $2.549 billion for the same period last year. Prescription revenue accounted for 67.9% of drugstore sales, and third party prescription revenue represented 95.8% of pharmacy sales. Quarterly Sales Same store sales for the 13-week quarter ended February 27, 2010 decreased 2.4% over the prior-year period. Front-end same store sales were down 2.6% while pharmacy same store sales decreased 2.4%. Prescriptions filled at comparable stores decreased 1.7% over the prior-year period. Total drugstore sales for the 13-week third quarter decreased 3.7% to $6.438 billion compared to $6.683 billion in last year's like period. Prescription revenue represented 66.6% of total drugstore sales, and third party prescription revenue was 96.0% of pharmacy sales. Year End Sales Same store sales for the 52-week period ended February 27, 2010 decreased 0.9%, consisting of a 2.9% front-end same store sales decrease and a 0.1% increase in pharmacy same store sales. Prescriptions filled at comparable stores increased 0.8% over the prior-year period. Total drugstore sales for the 52 weeks ended February 27, 2010 decreased 2.4% to $25.569 billion from $26.185 billion in last year's like period. Prescription revenue accounted for 67.9% of total drugstore sales, and third-party prescription revenue was 96.2% of pharmacy sales. About Rite Aid Camp Hill, Pennsylvania-based Rite Aid Corporation (NYSE: RAD) -- http://www.riteaid.com/-- operates 4,780 drugstores compared to 4,901 stores in the like period a year ago. * * * As reported by the Troubled Company Reporter on December 21, 2009, Rite Aid reported a net loss of $83.862 million for the 13 weeks ended November 28, 2009, from a net loss of $243.125 million for the 13 week period ended November 29, 2008. Rite Aid reported a net loss of $83.862 million for the 13 weeks ended November 28, 2009, from a net loss of $243.125 million for the 13 week period ended November 29, 2008. At November 28, 2009, the Company had $8.597 billion in total assets against $10.076 billion in total liabilities, resulting in stockholders' deficit of $1.478 billion. RITE AID: FMR, Fidelity Hold 8.842% of Common Stock --------------------------------------------------- FMR LLC and Edward C. Johnson 3d disclosed that they may be deemed to own 80,537,600 shares or roughly 8.842% of the common stock of Rite Aid Corporation. Fidelity Management & Research Company, a wholly owned subsidiary of FMR LLC, is the beneficial owner of 63,258,199 shares or 6.945% of Rite Aid Common Stock as a result of acting as investment adviser to various investment companies. The number of Rite Aid shares owned by the investment companies at December 31, 2009, included 15,232,299 shares of Common Stock resulting from the assumed conversion of $39,425,000 principal amount of RITE AID CORP CONV 8.5 5/15/15 (386.3614 shares of Common Stock for each $1,000 principal amount of debenture). Edward C. Johnson 3d and FMR LLC, through its control of Fidelity, and the funds each has sole power to dispose of the 63,258,199 shares owned by the Funds. About Rite Aid Camp Hill, Pennsylvania-based Rite Aid Corporation (NYSE: RAD) -- http://www.riteaid.com/-- operates 4,780 drugstores compared to 4,901 stores in the like period a year ago. * * * As reported by the Troubled Company Reporter on December 21, 2009, Rite Aid reported a net loss of $83.862 million for the 13 weeks ended November 28, 2009, from a net loss of $243.125 million for the 13 week period ended November 29, 2008. Rite Aid reported a net loss of $83.862 million for the 13 weeks ended November 28, 2009, from a net loss of $243.125 million for the 13 week period ended November 29, 2008. At November 28, 2009, the Company had $8.597 billion in total assets against $10.076 billion in total liabilities, resulting in stockholders' deficit of $1.478 billion. RIVERBEND LEASING: Files Schedules of Assets & Liabilities ---------------------------------------------------------- Riverbend Leasing LLC has filed with the U.S. Bankruptcy Court for the Southern District of Iowa its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ------ ----------- A. Real Property $9,208,000 B. Personal Property $94,964 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $9,207,372 E. Creditors Holding Unsecured Priority Claims $245,843 F. Creditors Holding Unsecured Non-priority Claims $2,985,995 ------------- ------------ TOTAL $9,302,964 $12,439,210 Coralville, Iowa-based Riverbend Leasing LLC, aka River Bend Leasing LLC, filed for Chapter 11 bankruptcy protection on February 8, 2010 (Bankr. S.D. Iowa Case No. 10-00428). Jeffrey D. Goetz, Esq., who has an office in Des Moines, Iowa, assists the Company in its restructuring effort. According to the schedules, the Company has assets of $9,302,964, and total debts of $12,439,210. RIVERBEND LEASING: Section 341(a) Meeting Scheduled for March 8 --------------------------------------------------------------- The U.S. Trustee for Region 12 will convene a meeting of creditors in NLP Acquisition Limited Partnership's Chapter 11 case on March 8, 2010, at 10:00 a.m. The meeting will be held at Room 783, Federal Building, 210 Walnut, Des Moines, IA 50309. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Coralville, Iowa-based Riverbend Leasing LLC, aka River Bend Leasing LLC, filed for Chapter 11 bankruptcy protection on February 8, 2010 (Bankr. S.D. Iowa Case No. 10-00428). Jeffrey D. Goetz, Esq., who has an office in Des Moines, Iowa, assists the Company in its restructuring effort. The Company has assets of $9,302,964, and total debts of $12,439,210. RIVERBEND LEASING: Taps Bradshaw Fowler as Gen. Reorg. Counsel -------------------------------------------------------------- Riverbend Leasing LLC has asked for permission from the U.S. Bankruptcy Court for the Southern District of Iowa to employ Donald F. Neiman, Esq., and Jeffrey D. Goetz, Esq., of the law firm of Bradshaw, Fowler, Proctor & Fairgrave, P.C., as general reorganization counsel. Bradshaw Fowler will, among other things: a. represent the Debtor in any proceedings or hearings in the bankruptcy court and in any action in any other court where the Debtor's rights under the U.S. Bankruptcy Code may be litigated or affected; b. conduct examinations of witnesses, claimants, or adverse parties and prepare and assist in the preparation of reports, accounts, and pleadings related to the Debtors' Chapter 11 case; c. advise the Debtor concerning the requirements of the Bankruptcy Code and applicable rules as the same affect the Debtor in this proceeding; and d. assist the Debtor in the negotiation, formulation, confirmation, and implementation of a Chapter 11 Plan. The Debtor and Bradshaw Fowler entered into a legal services agreement dated February 5, 2010, that provided for the Debtor to pay a $15,000 retainer as a guaranty for payment of services. On February 8, 2010, Bradshaw Fowler received the $15,000 retainer. At the conclusion of this case, Bradshaw Fowler will file a final application seeking allowance of all fees and costs. The Debtor assured the Court that Bradshaw Fowler is "disinterested" as that term is defined in Section 101(14) of the Bankruptcy Code. Coralville, Iowa-based Riverbend Leasing LLC, aka River Bend Leasing LLC, filed for Chapter 11 bankruptcy protection on February 8, 2010 (Bankr. S.D. Iowa Case No. 10-00428). According to the schedules, the Company has assets of $9,302,964, and total debts of $12,439,210. SAFETY-KLEEN: CBS Rips Waste Co.'s Efforts to Elicit Cleanup Funds ------------------------------------------------------------------ Law360 reports that CBS Corp. has fought back in a squabble over decades-old pollution cleanup obligations stemming from a past stock deal involving the formerly bankrupt Safety Kleen Corp., which appealed an order allowing the network to sidestep the liabilities. Headquartered in Delaware, Safety-Kleen Corporation -- http://www.safety-kleen.com/-- provides specialty services such as parts cleaning, site remediation, soil decontamination, and wastewater services. The Company, along with many affiliates, filed for Chapter 11 protection (Bankr. D. Del. Case No. 00-02303) on June 9, 2000. Gregg M. Galardi, Esq., at Skadden, Arps, Slate, Meagher, represented the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $3,031,304,000 in assets and $3,333,745,000 in liabilities. Safety-Kleen emerged from Chapter 11 in Dec. 2003 under a plan of reorganization confirmed by Judge Walsh on Aug. 1, 2003, that transferred ownership of the Company to its secured creditors and created a litigation and claims resolution trust for the benefit of unsecured creditors. SID'S HARDWARE: Files for Bankruptcy Protection in Brooklyn ----------------------------------------------------------- Linda Collins at Brooklyn Daily Eagle reports Sid's Hardware filed for Chapter 11 bankruptcy in the U.S. Bankruptcy in Brooklyn to get out of lease when the Company was unable to work out on agreement with MetroTech. Sid's Hardware operates a store at 345 Jay St. in Downtown Brooklyn. SIX FLAGS: Commences Adv. Proceeding to Resolve Kentucky Dispute ---------------------------------------------------------------- Debtor KKI, LLC, filed an adversary complaint to resolve the controversy whether the Six Flags Kentucky Kingdom amusement rides are property of KKI and its estate; and if so, whether KKI is permitted to remove the contested rides in accordance with the terms of its rejection of the lease for the property where the amusement park is located. The Lease pertains to the February 21, 1996 lease among the Debtors and the Landlords, being The Commonwealth of Kentucky, State Property and Buildings Commission of the Commonwealth of Kentucky, Finance and Administration Cabinet of the Commonwealth of Kentucky, and the Kentucky State Fair Board. Pursuant to a Stock Purchase Agreement dated September 26, 1997, an affiliate of Six Flags, Inc., purchased the stock of KK Inc. Pursuant to the Assignment and assumption Agreement dated October 31, 1997, KK Inc. assigned its interest in the lease to KKI. On January 8, 2010, the Court approved the stipulation between KKI, LLC and the Landlord. Pursuant to the Stipulation, KKI and the Landlord agreed to extend the deadline by which the Debtors had the right to assume or reject the Lease from January 9, 2010 to April 9, 2010. KKI and the Landlord entered into negotiations to determine if it was possible to negotiate revised lease terms whereby KKI could continue to lease the Leased Premises and operate Kentucky Kingdom. KKI and the Landlord were unable to agree upon the terms and, KKI elected to reject to Lease effective March 5, 2010. In order to properly and orderly vacate the Leased Premises on or prior to March 5, KKI needs to remove its property that is not of de minimis value prior to March 5, Daniel J. DeFranceschi, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, relates. During KKI's preparations for the renewal of certain Contested Rides, KKI received a letter from counsel to the Landlords dated February 12, 2010, setting forth the Landlord's position regarding the ownership of the Contested Rides and instructing KKI not to remove any of the Contested Rides. The Landlords have reiterated this position during subsequent discussions, according to Mr. DeFranceschi. Consequently, a dispute has arisen between KKI and the Landlords as to the ownership of the Contested Rides, and thus, whether KKI is permitted to remove the Contested Rides from the Leased Premises. As a result of the dispute, the Landlords have frustrated KKI's ability to vacate Kentucky Kingdom and KKI has been forced to cease its vacation of Kentucky Kingdom, Mr. DeFranceschi says. While, upon information and belief, the Landlords acknowledge KKI's ownership of any amusement rides located wholly on the KKI Owned Property, both KKI and the Landlords claim ownership of the Contested Rides, which are either completely or partially located on the Leased Premises. For these reasons, KKI asks the Court to resolve the controversy regarding the ownership of the Contested Rides. Specifically, KKI asks the Court to: (1) declare that the Contested Rides are the property of the Debtors' estate; (2) declare that the Contested Rides are not the property of the Landlords; (3) declare that KKI has the right to remove the Contested Rides from the Leased Premises; (4) declare that notwithstanding the March 5, 2010 effective date of KKI's rejection of the lease pursuant to the Rejection Motion, KKI will have a reasonable period of time after the Court's determination of the ownership of the Contested Rides in which to remove its property from the Leased Premises; (5) enjoin the Landlords from interfering with KKI's removal of any of the Contested Rides from the Leased Premises; and (6) enjoin the Landlords from enforcing any of the remedies under the Lease on account of the removal of all or a portion of the Contested Rides. KKI also asks the Court to issue a permanent restraining order enjoining: (1) the Landlord from asserting an ownership in the Contested Rides; (2) the defendants from undertaking any acts to obtain possession of the Contested Rides; (3) the Landlord from exercising control over the Contested Rides; (4) the Landlord from interfering with KKI's removal of any of the Contested Rides from the Leased Premises; and (5) the Landlord from enforcing any of the remedies under the Lease on account of the removal of all or a portion of the Contested Rides. KKI also asks the Court to award it its actual damages in an amount to be proven at trial, sanctions and attorney's fees and costs pursuant to Section 362 of the Bankruptcy Code. 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). SIX FLAGS: Creditors Committee Opposes Two HSBC Claims ------------------------------------------------------ The Official Committee of Unsecured Creditors in Six Flags Inc.'s cases objects to and asks the Court to disallow supplements to Claim Nos. 1857 and 1858 filed by HSBC Bank USA, N.A., as trustee under the indenture dated June 16, 2008, for the 12.25% Senior Notes due 2016 issued by Debtor Six Flags Operations, Inc. The Creditors' Committee's counsel, Kathleen P. Makowski, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, relates that on the virtual eve of the confirmation trial on the Debtors' Fourth Amended Plan of Reorganization, as to which the Informal Committee of SFO Noteholders is effectively a co- proponent, the SFO Noteholders, acting through their Indenture Trustee, have interposed several new claims that radically increase their claims by nearly 50%, from approximately $420 million as originally filed on December 21,2009, to nearly $620 million. The Disclosure Statement explaining the Fourth Amended Plan listed the SFO Noteholders' allowed claims as totaling $420 million, Ms. Makowski notes. The SFO Noteholders did not file an objection to the Disclosure Statement, and have voted to approve the Fourth Amended Plan, she notes. Ms. Makowski further notes that the purported supplement to the Claims were filed on February 17, 2010, well after the January 2, 2010 Bar Date, and without seeking prior approval from the Court. In the "Supplement," the SFO Noteholders assert, in addition to the originally asserted $400 million principal and $20,008,333 prepetition interest: -- $148,138,679 as a "Make Whole Claim;" -- $48,362,839 in postpetition interest, which includes a claim for postpetition interest accruing at the default rate of 13.25% compounded bi-annually; and -- $2,419,150 on prepetition interest. Were the Court to give effect to the "Supplement," the total amount claimed by the SFO Noteholders would be $618,929,001, nearly a 50% increase over the amount claimed in the Original Claim. Despite this material increase, to the Creditors' Committee's knowledge, the Debtors inexplicably have yet to formulate a position on the New Claims, Ms. Makowski says. The Creditors' Committee wants the additional HSBC claims disallowed because these new claims, submitted after the Bar Date, are time-barred, as the SFO Noteholders filed their Supplement over a month after the Bar Date and neither asked for, nor received, the Court's permission to file the New Claims. Additionally, these claims are not authorized by applicable law, the Creditors' Committee further asserts. The newly claimed amounts should be rejected and the SFO Noteholders' claims should be allowed in an amount not exceeding the principal amount of the SFO Notes, plus any contractual interest accrued through June 13, 2009 -- the Debtors' Petition Date -- for a total claim of approximately $420 million. At the Creditors Committee's behest, the Court will convene a hearing to consider this motion on March 5, 2010. Objections will be due on or before March 4. 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). SKY LAKES: S&P Affirms 'BB+' Long-Term & Underlying Rating on Debt ------------------------------------------------------------------ Standard & Poor's Ratings Services revised its outlook to stable from negative on Klamath Falls Intercommunity Hospital Authority, Ore.'s outstanding bonds, issued on behalf of Sky Lakes Medical Center (formerly known as Merle West Medical Center). At the same time, Standard & Poor's affirmed its 'BB+' long-term and underlying rating on Sky Lakes Medical Center's outstanding debt. "Since the rating was lowered last year, Sky Lakes has demonstrated improved operating performance and balance sheet metrics," said Standard & Poor's credit analyst Geraldine Poon. "The rating continues to be supported by a solid business position." "Management attributes the improved operations to good control of staffing and supply expenses, as well as considerable revenue cycle improvements and productivity initiatives," Ms. Poon said. Given management's prioritization of increasing liquidity, future capital spending plans are very limited, with roughly $3 million budgeted in fiscal 2010. Sky Lakes, a 75-staffed (176 licensed beds/110 capacity) hospital located at the base of the Cascade Mountains in Klamath Falls, Ore., services a four-county area in southern Oregon and northern California. Given its location, with the mountains providing a natural geographic barrier and the nearest competitor located roughly 75 miles away, Sky Lakes maintains a very strong business position. The nearest tertiary facility is in Medford, Ore. SMART ONLINE: Extends Paragon Note Maturity Until August -------------------------------------------------------- Smart Online Inc. entered into a Modification Agreement with Paragon Commercial Bank with an effective date of February 22, 2010, relating to the secured promissory note dated February 20, 2008, delivered by the Company to Paragon in the maximum principal amount of $2,500,000. The company said the Modification Agreement: * extends the maturity date of the Paragon Note from February 11, 2010, to August 11, 2010; and * changes the interest rate from a variable annual rate equal to The Wall Street Journal Prime Rate, with a floor of 5.50%, to a fixed annual rate of 6.50%. The Company has been advised that, effective January 28, 2010, the expiration date of the standby letter of credit in the amount of $2,500,000 issued by HSBC Private Bank (Suisse) SA securing the Paragon Note has been extended from February 18, 2010 to September 17, 2010. A full-text copy of the Modification Agreement is available for free at http://ResearchArchives.com/t/s?56fb About Smart Online Durham, North Carolina-based Smart Online, Inc. -- http://www.smartonline.com/-- develops and markets software products and services (One Biz(TM)) targeted to small businesses that are delivered via a Software-as-a-Service model. The Company sells its SaaS products and services primarily through private- label marketing partners. In addition, the Company provides sophisticated and complex Web site consulting and development services, primarily in the e-commerce retail and direct-selling organization industries. At September 30, 2009, the Company had $1,788,096 in total assets against $13,610,936 in total liabilities, resulting in stockholders' deficit of $11,822,840. SPANSION INC: AHEC Wants Rule 2019 File for Trade Claims Group -------------------------------------------------------------- The ad hoc committee of holders of common stock and convertible notes of Spansion, Inc., asks the Court to compel the Trade Claims Group to comply with Rule 2019 of the Federal Rules of Bankruptcy Procedure. On February 19, 2010, counsel for an informal group of holders of trade claims sent a letter to the Board of Directors of Spansion. The letter expressed certain views regarding the Debtors' Second Amended Joint Plan of Reorganization dated February 8, 2010, the alternative financing proposal made by the Ad Hoc Committee of Convertible Noteholders, and other aspects of the Debtors' cases. The Trade Claims Group includes among its members, funds managed by affiliates of Fortress Investment Group, Citigroup Financial Products Inc., Contrarian Fund, LLC, Corre Opportunities Fund, L.P., Liquidity Solutions Inc., and Longacre Opportunity Fund, L.P. AHEC sent a letter to the Trade Claims Group requesting, among other things, that it comply with Rule 2019. However, AHEC notes, the Trade Claims Group had not complied with Rule 2019. Rule 2019 provides in relevant part that in a Chapter 11 reorganization case, every entity or committee representing more than one creditor or equity security holder will file a verified statement setting forth the name and addresses of the creditor or equity security holder and the nature and amount of the claim or interest and the time of acquisition unless it is alleged to have been acquired more than one year prior to the Petition Date. 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: Objects to Expanded Work for FTI Consulting --------------------------------------------------------- Spansion Inc. and its units ask the Court to deny the request of the Official Committee of Unsecured Creditors expanding the scope of services of FTI Consulting, Inc. According to the Debtors, the Supplemental Application should be denied in its entirety because: (a)"preference services" were included in the list of services to be provided by FTI pursuant to the Original Application in exchange for its $150,000 monthly fee. There is no justification for FTI to seek additional compensation for services within the scope of its employment; (b) if the Committee and FTI believe that the Original Application did not include the Additional Preference Services, they should have filed the Supplemental Application before FTI commenced to perform work outside the scope of its authorized services; and (c) the compensation requested in the Supplemental Application is unreasonable in that the Committee and FTI have not provided any statement or estimate of the amount of Additional Preference Services that have been performed and are expected to be performed by FTI; nor any indication of the magnitude of the fees that are asserted for the services which were already performed or will be performed. U.S. Trustee Also Opposes Request Roberta A. DeAngelis, Acting U.S. Trustee for Region 3, asks the Court to deny the Supplemental Application as the Committee and FTI have not established a record: (i) demonstrating the extent of services being provided; and (ii) distinguishing the Expanded Scope services from those previously authorized by the Court. Ms. DeAngelis avers that the record does not demonstrate that the original Court-approved compensation was improvident in light of developments not capable of being anticipated at the time of the fixing of those terms and conditions. In other words, Ms. DeAngelis maintains, FTI should not receive the benefit of Section 328 of the Bankruptcy Code approval of compensation terms, only to come in later as conditions change. Moreover, Ms. DeAngelis asserts, the Supplemental Application should also be denied to the extent that the Expanded Scope services duplicate those being provided by the Debtors' own professionals. 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: Tessera Wants to Compel Payment of $96MM Claim ------------------------------------------------------------ Tessera, Inc. asked the Court to direct the Debtors to pay it $96,765,070 as an administrative expense claim. Tessera asserts that the Debtors continue to infringe on its patents. Tessera avers that its postpetition claims for patent infringement should be allowed under Section 503(b)(1)(A) of the Bankruptcy Code. Tessera Files With the Court Amended Proof of Claim Tessera Inc. sent to Epiq Systems, on February 17, 2010, amendments to its proofs of claims, each in the amount of $219 million against Spansion Inc., Spansion Technology LLC, and Spansion LLC on account of patent infringement. Tessera previously filed the Claims, each directed to a separate Debtor entity, and each claim recited an amount of "not less than $25,000,000" in light of the lack of complete information regarding Spansion's infringing activities. All parties were thus on notice that Tessera's claims could be substantially greater, particularly given that Tessera filed papers stating that the damages could be hundreds of millions of dollars for the postpetition period alone. Tessera's Amended Claims merely clarify, in light of new information, Tessera's demand for monetary damages that arise from the same facts and claims in its original proofs of claim. Therefore, Tessera requests that the Court determine that leave of Court is not required to file the Amended Claims, or alternatively, that the Court enter an Order authorizing Tessera to file the Amended Claims. About Spansion Inc. Spansion Inc. (Pink Sheets: SPSNQ) -- http://www.spansion.com/-- is a Flash memory solutions provider. Spansion is a former joint venture of AMD and Fujitsu. Spansion Inc., Spansion LLC, Spansion Technology LLC, Spansion International, Inc., and Cerium Laboratories LLC filed voluntary petitions for Chapter 11 on March 1, 2009 (Bankr. D. Del. Lead Case No. 09-10690). On February 9, 2009, Spansion's Japanese subsidiary, Spansion Japan Ltd., voluntarily entered into a proceeding under the Corporate Reorganization Law (Kaisha Kosei Ho) of Japan to obtain protection from its creditors as part of the company's restructuring efforts. None of Spansion's subsidiaries in countries other than the United States and Japan are included in the U.S. or Japan filings. Michael S. Lurey, Esq., Gregory O. Lunt, Esq., and Kimberly A. Posin, Esq., at Latham & Watkins LLP, have been tapped as bankruptcy counsel. Michael R. Lastowski, Esq., at Duane Morris LLP, is the Delaware counsel. Epiq Bankruptcy Solutions LLC, is the claims agent. The United States Trustee has appointed an official committee of unsecured creditors in the case. As of September 30, 2008, Spansion disclosed total assets of US$3,840,000,000, and total debts of US$2,398,000,000. Spansion Japan Ltd. filed a Chapter 15 petition on April 30, 2009 (Bankr. D. Del. Case No. 09-11480). The Chapter 15 Petitioner's counsel is Gregory Alan Taylor, Esq., at Ashby & Geddes. It said that Spansion Japan had US$10 million to US$50 million in assets and US$50 million to US$100 million in debts. Bankruptcy Creditors' Service, Inc., publishes Spansion Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Spansion Inc. and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000) SPRINT NEXTEL: Fitch Affirms Issuer Default Rating at 'BB' ---------------------------------------------------------- Fitch Ratings has affirmed the Issuer Default Rating assigned to Sprint Nextel Corporation and its wholly owned subsidiaries Sprint Capital Corporation and Nextel Communications Inc. (Nextel) at 'BB'. In addition, Fitch has affirmed the specific issues within Sprint Nextel's capital structure as outlined below. Sprint Nextel -- Issuer Default Rating at 'BB'; -- Senior unsecured notes at 'BB'; -- Senior unsecured credit facility at 'BB'. Sprint Capital Corporation -- IDR at 'BB'; -- Senior unsecured notes at 'BB'. Nextel -- IDR at 'BB'; -- Senior unsecured notes at 'BB'. The Rating Outlook on Sprint Nextel and its subsidiaries remains Negative. Approximately $18.9 billion of outstanding debt is affected by Fitch's action. Sprint Nextel's ratings encompass the on-going challenges with stabilizing the postpaid segment of their wireless business against difficult competition in the midst of an economically challenged environment. Positively, Sprint Nextel demonstrated progress during the second half of 2009 in improving the customer experience, strengthening the brand and promoting aggressively valued pricing plans, which resulted in a material shift in its share of industry gross additions. However, the economy, exclusive handsets with other operators and lagging perceptions continued to pressure churn, resulting in only modest churn improvements during 2009. Fitch believes that Sprint Nextel will continue its progress with reducing postpaid subscriber losses in 2010 with expectations that its Code Division Multiple Access (CDMA) business segment will stabilize by the second half. The degree and pace of churn improvement will be the key factor in restoring growth and profitability to the company, and this will remain challenging given the low postpaid churn rates of its national competitors. In addition, Fitch believes the iDEN segment will continue to lose postpaid subscribers in 2010, albeit at a lower rate, with subscriber losses in the range of at least 1 million to 1.5 million subscribers. With the industry shift toward prepaid subscribers, the level of growth that Sprint Nextel can achieve with its targeted multi-brand strategy in the prepaid segment is an important offset to the declines in the iDEN postpaid segment. In Fitch's opinion, the prepaid business carries increased operating risks due in part to a greater level of competition within that market segment. Longer term, Sprint Nextel will need to leverage its scale across handsets and distribution of its prepaid business while executing on its strategic marketing initiatives to effectively address competitive responses that will likely pressure profitability. Fitch expects Sprint Nextel to aggressively control costs to offset further revenue pressures in 2010. With Sprint Nextel removing an anticipated $1.5 billion of annualized costs primarily through two announced labor cost reductions during 2009, additional reductions in operational costs do carry a higher degree of execution risk. Past operational pressure has resulted in declining financial performance with leverage increasing to 3.3 times compared to 2.8x at the end of 2008, which was within Fitch's rating expectations. Sprint Nextel's healthy liquidity position including expected free cash generation adds support to the rating. In addition, this gives the company flexibility when addressing its sizable maturity profile as management has stated a desire to keep significant cash balances to ensure sufficient liquidity for debt repayment. Cash at the end of the fourth quarter of 2009 decreased to $3.9 billion, down from $5.4 billion in the third quarter due to the iPCS and Virgin Mobile acquisitions, the $1.2 billion Clearwire investment and the credit facility debt repayment. As a result of the iPCS acquisition, Sprint Nextel unconditionally guaranteed the $479 million of iPCS debt, similar with past acquisitions of its affiliates. Fitch does not anticipate any further investment in Clearwire during 2010 by Sprint Nextel. However, given the pace of current build-outs and cash burn by Clearwire, Fitch believes Sprint Nextel will likely have further investment requirements in 2011 to fund continued 4G WiMAX market deployments. This is of strategic importance for the company, particularly as other operators like Verizon Wireless pursue relatively aggressive 4G LTE overlays. Consequently, the uncertainty to the level of future investments by Sprint Nextel and Clearwire's ability to obtain funding from other investors and the public debt markets remains a concern. Debt maturities during the next three years include $750 million of debt due in June 2010, $1.7 billion of debt in January 2011 and $2.75 billion of debt due March 2012. Free cash flow (FCF) for 2009, when factoring in the Clearwire investment, was approximately $1.7 billion, which included a $200 million pension contribution. Currently, Fitch expects Sprint Nextel to generate in excess of $1.5 billon in FCF for 2010. Sprint Nextel has a $4.5 billion revolving credit facility that matures in December 2010. The facility is undrawn after Sprint Nextel made a $1 billion repayment during the fourth quarter of 2009. With letters of credit outstanding of approximately $1.8 billion, the company had $2.7 billion of borrowing capacity. Fitch expects the company to replace the existing facility ahead of maturity. The new facility terms will likely have some changes compared to the previous five-year facility. Sprint Nextel had ample cushion under the maximum leverage covenant of 4.25x, with a covenant calculation of 3.5x at the end of 2009. The Negative Outlook reflects Fitch's concern based on past operating results, issuer financial trends, industry risk factors, location of rating within its rating category and uncertainty over future operating trends. Fitch currently expects credit metrics will weaken slightly during the first half of 2010, with leverage (debt-to-EBITDA) increasing to 3.5x before stabilizing in the second half. Failure to substantially improve subscriber trends and stabilize financial performance during 2010 would result in further assessments and potential rating actions. SPRINT NEXTEL: S&P Downgrades Corporate Credit Rating to 'BB-' -------------------------------------------------------------- Standard & Poor's Rating Services said it lowered its corporate credit rating on Overland Park, Kansas-based wireless carrier Sprint Nextel Corp. to 'BB-' from 'BB'. S&P also lowered all Sprint Nextel's issue ratings, including its senior unsecured debt rating, which S&P lowered to 'BB-' from 'BB'. The outlook is negative. Total funded debt was about $21 billion as of Dec. 31, 2009. S&P cut all other ratings on Sprint Nextel and related entities Sprint Capital and Nextel Communications one notch and removed them from CreditWatch, where they were placed with negative implications on Nov. 11, 2009, due to Sprint Nextel's weak operating performance, which has resulted in deteriorating credit measures. As part of the CreditWatch resolution, S&P also lowered the issue- level rating on unit iPCS Inc.'s $300 million first-lien notes due 2013 to 'BB-' from 'BB' and raised the issue-level rating on iPCS' $175 million (original issue amount) second-lien toggle notes due 2014 to 'BB-' from 'B+'. S&P removed both of these issue ratings from CreditWatch, where they were placed on Dec. 7, 2009, following the acquisition of iPCS by Sprint Nextel. These debt issues are now guaranteed by Sprint Nextel Corp. on an unsecured basis and rank pari passu with the unsecured debt of Sprint Nextel, Sprint Capital, and Nextel Communications. S&P revised the recovery rating on the first-lien notes to '3' from '4'. The '3' recovery rating indicates expectations for meaningful (50%- 70%) recovery in the event of payment default and is the same as the recovery rating on Sprint Nextel's unsecured debt. The original CreditWatch Negative listing for the second-lien notes reflected its junior ranking relative to the first-lien notes for iPCS' assets. However, S&P has now determined that the second- lien notes will also benefit from the unsecured parent guarantee and will be pari passu with the unsecured debt in Sprint Nextel's capital structure. As a result, S&P is raising the ratings on iPCS' second-lien notes to 'BB-' from 'B+' and revising the recovery rating to '3' from '6'. (See the separate recovery report, to be published as soon as possible following this press release.) S&P has withdrawn the corporate credit rating on iPCS since it is part of Sprint Nextel. "The rating action reflects S&P's view that post-paid subscriber losses will continue to pressure revenue and cash flow despite growth in the pre-paid business," said Standard & Poor's credit analyst Allyn Arden. Total operating lease-adjusted debt to EBITDA was about 4.5x at year-end 2009. Even if post-paid subscriber losses abate and the company continues to right-size its cost structure, key credit measures?including leverage reduction to the mid-3x area, which was S&P's threshold for the previous 'BB' rating?are unlikely to improve in the near term. During 2009, total revenue and EBITDA declined 9.5% and 16.4%, respectively, year over year, due primarily to a 9.5% decline in post-paid customers. "Despite growth in the pre-paid segment and some modest improvement in post-paid quarterly subscriber losses," said Mr. Arden, "S&P remain concerned that higher industry penetration levels and increased price-based competition will also hurt Sprint Nextel's operating and financial performance in the near term." SPRINT NEXTEL: Sets Short-Term Incentive Compensation Plan ---------------------------------------------------------- The Compensation Committee of the Board of Directors of Sprint Nextel Corporation established the performance objectives and other terms of the Company's 2010 Short-Term Incentive Plan for officers and other eligible employees of the Company. The Compensation Committee has established two six-month performance periods. The first period is from January 1, 2010, through June 30, 2010, and the second is from July 1, 2010, through December 31, 2010. Each performance period has discrete performance objectives, and employees must be employed on December 31, 2010, in order to be eligible to receive compensation for both periods. The 2010 STI Plan provides for a payment of incentive compensation to officers and other eligible employees based on the achievement of the following specified performance objectives during the first-half of 2010: adjusted OIBDA, weighted at 25%; a measure of retention of the company's post-paid wireless subscribers, which the company refers to as post-paid churn, weighted at 20%; net service revenue, weighted at 45%; and its subscribers on Clearwire's 4G network, which we call 4G subscribers, weighted at 10%. The Compensation Committee did not yet set performance objectives for the second-half of 2010. Each of the performance objectives will have a threshold, target and maximum level of payment opportunity. The maximum payment opportunity is equal to 200% of the individual's target opportunity. The award payment under the 2010 STI Plan will be determined based on the Company's results using three variables: * the individual's annual incentive target opportunity, which is based on a percentage of the individual's base salary; * the Compensation Committee's assessment and certification of Company performance compared with each of the above- referenced performance objectives; and * relative weightings for each performance objective. The determination of payments for certain executive officers will be made so as to comply with Section 162(m) of the Internal Revenue Code. Mr. Hesse's employment agreement provides for a target opportunity under the short-term incentive plan of not less than 170% of base salary -- or $2,040,000 for 2010 -- with actual payouts under the 2010 STI Plan limited to 200% of his targeted opportunity. Mr. Brust's employment agreement provides for a target opportunity under the STI Plan of not less than 130% of base salary -- or $1,300,000 for 2010. Mr. Cowan's employment agreement provides for a target opportunity under STI Plan of not less than 125% of base salary -- or $906,250 for 2010. Mr. Elfman's employment agreement provides for a target opportunity under STI Plan of not less than 125% of base salary == or $812,500 for 2010. Mr. Robert L. Johnson's employment agreement provides for a target opportunity under the STI Plan of not less than 100% of base salary -- or $460,000 for 2010. The actual incentive amounts paid under the 2010 STI Plan will be based on the Company's actual results during 2010 in relation to the established performance objectives, and these payments may be greater or less than the target amounts that have been established. Long-Term Incentive Compensation Plan for Mr. Brust On February 25, 2010, the Compensation Committee granted the 2010 awards for Mr. Brust under the Company's 2010 Long-Term Incentive Plan. The Compensation Committee has not yet set any of the terms of the 2010 LTI Plan with respect to any other officers or other eligible employees of the Company. Pursuant to the terms of his amended employment agreement, dated December 22, 2009, Mr. Brust's 2010 LTI Plan target opportunity of $3 million is allocated equally in value in stock options and restricted stock units all of which will vest on May 1, 2012, subject to compliance with non-compete and non-solicitation covenants under his employment agreement. The number of stock options granted is based on the value of each option determined using the Black-Scholes valuation model. The number of restricted share units awarded is based on the 30-day average trading price of the Company's common stock. The stock option grants and restricted stock unit awards, as applicable, will be made pursuant to the Company's 2007 Omnibus Incentive Plan. Special Payment On Feb. 25, 2010, the Compensation Committee also approved a lump- sum payment to Mr. Elfman in the amount of $300,000 related to his successful leadership of the Ericsson transaction, which was completed in 2009. About Sprint Nextel Overland Park, Kansas-based Sprint Nextel Corporation -- http://www.sprint.com/-- offers a comprehensive range of wireless and wireline communications services bringing the freedom of mobility to consumers, businesses and government users. Sprint Nextel is widely recognized for developing, engineering and deploying innovative technologies, including two wireless networks serving more than 48 million customers at the end of the third quarter of 2009 and the first and only 4G service from a national carrier in the United States; industry-leading mobile data services; instant national and international push-to-talk capabilities; and a global Tier 1 Internet backbone. As of September 30, 2009, the company had $55.648 billion in total assets against $37.414 billion in total liabilities. As of September 30, 2009, the company had $5.9 billion in cash, cash equivalents and short-term investments and $1.6 billion in borrowing capacity available under its revolving bank credit facility, for total liquidity of $7.5 billion. * * * Sprint Nextel carries Moody's Investors Service's Ba1 corporate family rating and Standard & Poor's Ratings Services' BB issuer credit rating. SUN AMERICAN BANK: Closed; First-Citizens Assumes All Deposits -------------------------------------------------------------- Sun American Bank, Boca Raton, Florida, was closed March 5 by the Florida Office of Financial Regulation, which appointed the Federal Deposit Insurance Corporation as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with First-Citizens Bank & Trust Company, Raleigh, North Carolina, to assume all of the deposits of Sun American Bank. The 12 branches of Sun American Bank will reopen on Monday as branches of First-Citizens Bank & Trust Company. Depositors of Sun American Bank will automatically become depositors of First- Citizens Bank & Trust Company. 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 existing branch until they receive notice from First-Citizens Bank & Trust Company that it has completed systems changes to allow other First- Citizens Bank & Trust Company branches to process their accounts as well. As of December 31, 2009, Sun American Bank had approximately $535.7 million in total assets and $443.5 million in total deposits. First-Citizens Bank & Trust Company did not pay a premium to acquire the deposits of Sun American Bank. In addition to assuming all of the deposits of the failed bank, First-Citizens Bank & Trust Company agreed to purchase essentially all of the assets. The FDIC and First-Citizens Bank & Trust Company entered into a loss-share transaction on $433.0 million of Sun American Bank's assets. First-Citizens Bank & Trust Company 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 1-866-954-9532. Interested parties also can visit the FDIC's Web site at http://www.fdic.gov/bank/individual/failed/sunamerican.html The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $103.8 million. First-Citizens Bank & Trust Company's acquisition of all the deposits was the "least costly" resolution for the FDIC's DIF compared to all alternatives. Sun American Bank is the 23rd FDIC-insured institution to fail in the nation this year, and the fourth in Florida. The last FDIC- insured institution closed in the state was Marco Community Bank, Marco Island, on February 19, 2010. TANDUS FLOORING: S&P Downgrades Corporate Credit Rating to 'B' -------------------------------------------------------------- Standard & Poor's Rating Services said that it lowered its ratings on Dalton, Georgia-based Tandus Flooring Inc. (formerly Collins & Aikman Floorcoverings Inc.), including its corporate credit rating to 'B' from 'B+'. The outlook is stable. S&P also lowered the issue-level rating on Tandus Flooring's term loan B due 2014 to 'B' from 'B+', the same as the corporate credit rating. The recovery rating on this debt remains '4', indicating that S&P believes lenders can expect average (30%-50%) recovery in the event of a payment default. S&P removed all of the ratings from CreditWatch, where S&P had placed them with negative implications on March 6, 2009, reflecting its concerns about the company's difficult operating environment, a significant deterioration in demand from corporate office customers, and the company's ability to meaningfully improve credit measures. S&P estimates that Tandus Flooring had about $234 million in reported debt outstanding as of Oct. 31, 2009. "The downgrade on Tandus reflects S&P's expectation that the company will face a difficult demand environment and rising input costs over the next year, and will be challenged to meaningfully improve its credit measures," said Standard & Poor's credit analyst Rick Joy. "The company has experienced a significant deterioration in demand from corporate office customers and S&P believes this is likely to continue over the next year." While some sectors of the U.S. economy are showing signs of recovery, S&P believes nonresidential construction will see continued declines. S&P believes that high vacancy rates, difficult financing conditions and a weak employment market will lead to a significant drop in nonresidential construction and refurbishment spending in 2010, and a recovery is unlikely until 2011. In addition, while the company benefited from lower input costs in 2009, S&P believes rising input costs could pressure operating results in 2010. The ratings on Tandus Flooring Inc. reflect the company's leveraged financial profile and participation in the highly competitive and cyclical carpet industry. High degrees of volatility in raw material, energy, and transportation costs are also rating concerns. The ratings also incorporate the firm's niche market position in the domestic commercial carpet market and its diversified customer base. Tandus is a leading manufacturer of vinyl-backed commercial floor covering in the U.S. and has the No. 1 market position in the six- foot roll carpet segment. The company also has leading brands in modular carpet tile and woven and tufted broadloom carpet. Although Tandus has a fairly diverse end market (its clients in government, education, and health care accounted for more than 50% of its revenues in the fiscal year ended Jan. 31, 2009), these areas have also experienced softer demand in recent quarters because of overall economic weakness. S&P expects that Tandus will maintain its adequate liquidity position, and continue to generate positive free cash flow despite the current weak demand environment. Given S&P's expectation for a continued weakening of domestic industry demand over the next year, S&P is expecting some near term erosion in credit measures. If the company experiences worse than expected operating difficulties and credit measures deteriorate substantially, and/or if the company's liquidity is materially pressured, S&P could consider lowering the ratings. S&P could consider raising the rating if the company is able to strengthen operating performance and is able to materially reduce and sustain leverage well below 4.5x. TECK RESOURCES: Moody's Upgrades Corp. Family Rating to 'Ba1' ------------------------------------------------------------- Moody's Investors Service upgraded Teck Resources Limited's Corporate Family Rating and senior secured notes rating to Ba1 from Ba2 and placed these ratings on review for possible further upgrade. The upgrade was prompted by Teck's strong 2009 operating performance through favorable commodity pricing and substantial debt reduction. Through its non-core asset sales program, the company received US$370 million of cash proceeds subsequent to the third quarter of 2009 and expects the sale of its one-third interest in the Waneta Dam for C$825 million to close in early March. As a result, Moody's expect Teck will reduce its total debt level in the near term to C$6.7 billion from the C$13.4 billion at the time of the Fording acquisition. Given the potential for further debt reduction due to improved conditions in the metals and coal markets, all ratings were placed on review for further upgrade. The review will focus on the status of contracted met coal volumes and prices for 2010, the sustainability of recently improved credit metrics, and the company's financial policies going forward. In addition, investment plans for strategic growth will be an important part of the review. Teck's Ba1 corporate family rating reflects the volatile demand and pricing for its commodity products and fairly high levels of operating and reinvestment risk inherent to the mining industry. The Ba1 rating favorably considers Teck's improved credit metrics, diversified operations, solid position across a variety of metals and ore markets, and high-quality assets in primarily politically stable regions. Upgrades: Issuer: Teck Resources Limited -- Corporate Family Rating, Upgraded to Ba1 from Ba2 -- Probability of Default Rating, Upgraded to Ba1 from Ba2 -- Senior Secured Regular Bond/Debenture, Upgraded to Ba1, LGD3, 45% from Ba2 -- Senior Unsecured Regular Bond/Debenture, Upgraded to Ba1, LGD3, 45% from Ba2 Outlook Actions: Issuer: Teck Resources Limited -- Outlook, Changed To Review for Possible Upgrade From Positive Moody's last rating action on Teck was on July 7, 2009, when the CFR was upgraded to Ba2 from Ba3. Teck Resources Limited, based in Vancouver, British Columbia, has a diversified business base with operations in metallurgical coal, zinc, copper, gold and other investment holdings. Its revenues in 2009 were C$7.7 billion. TEXTRON INC: Fitch Affirms Issuer Default Rating at 'BB+' --------------------------------------------------------- Fitch Ratings has affirmed the long- and short-term ratings for Textron Inc. and Textron Financial Corporation: TXT -- IDR at 'BB+'; -- Senior unsecured bank facilities at 'BB+'; -- Senior unsecured debt at 'BB+'; -- Short-term IDR at 'B'; -- Commercial paper at 'B'. TFC -- IDR at 'BB+'; -- Senior unsecured bank facilities at 'BB+'; -- Senior unsecured debt at 'BB+'; -- Junior subordinated notes at 'B+'; -- Short-term IDR at 'B'; -- Commercial paper at 'B'. The Rating Outlook has been revised to Stable from Negative. TFC's ratings are linked to TXT's ratings through a support agreement and other factors. The support agreement requires TXT to maintain full ownership, minimum net worth of $200 million and fixed charge coverage of 1.25 times. Other factors supporting the rating linkage include a shared corporate identity, common management, including the recent integration of TFC's treasury and certain other functions, and the extension of intercompany loans to TFC. Nearly $9.4 billion of debt outstanding at Dec. 31, 2009, is affected by the ratings, including $3.7 billion at TXT and $5.7 billion at TFC. Fitch includes in debt the full $600 million of TXT's 4.5% convertible notes, rather than the discounted amount as reported. The ratings affirmation and revision of the Rating Outlook to Stable primarily reflect progress made over the last year to address liquidity concerns and execution risks relating to liquidation of TFC's non-captive business. The ratings and Outlook also consider TXT's stable free cash flow, demonstrated access to capital markets, stabilizing conditions in the business jet market, and stability provided by TXT's defense-related businesses. Credit concerns include uncertainty about future losses at TFC, leverage at TXT that is much higher than in the past, low margins at Cessna, the possibility of large pension contributions, and the potential for negative cash flow at TFC. Fitch believes that TXT has the financial flexibility and capacity to extend, if necessary, sufficient financial support to meet TFC's funding requirements (namely maturing debt obligations) as the non-captive finance business is liquidated. Much of the support could be in the form of intracompany loans that totaled $413 million at the end of 2009. The amount of this support could increase and will depend on the pace of TFC's portfolio liquidation. Fitch notes TXT raised $1.45 billion of capital in 2009 to enhance liquidity. As a result, TXT's consolidated cash balance as of Dec. 31, 2009, grew to $1.9 billion and is expected to be sufficient to support TFC's liquidity needs. Additionally, the pace of liquidation and cash flow generated from the non-captive portfolio has exceeded the company's original expectations. Net portfolio liquidations totaled $3.8 billion in 2009, which was applied toward repayment of $2.3 billion of securitized debt and $1.7 billion of TFC's maturing debt obligations. TFC's near-term profitability and operating performance will likely remain weak due to portfolio losses and collection costs related to liquidation of the non-captive portfolio. Consequently, Fitch expects TXT will be required to continue to make modest capital contributions as required under its support agreement to maintain TFC's fixed charge ratio at 1.25x. In the absence of cost-effective third-party financing, TFC will remain reliant on TXT for liquidity particularly if timing differences arise between cash generated from amortization or liquidation of TFC's receivable portfolio and repayment of maturing debt obligations, including the $1.7 billion bank facility that matures in 2012. As a result, execution risk at TFC remains a significant rating factor, especially regarding the collection of the Resort and Golf Mortgage exposure. If cash generated from liquidation of TFC's non-captive portfolio is markedly lower than expected due to higher credit losses or discounting, the impact on TXT's liquidity and leverage could be significant and potentially lead to a downward revision in the ratings or Outlook. Fitch's view of TXT's manufacturing business has not changed significantly. Fitch believes that TXT's financial profile, when excluding TFC, is consistent with a low investment grade rating. However, until TXT's performance improves, its capacity to support TFC is limited. Leverage at TXT increased materially in 2009 due to a combination of higher debt levels and low earnings at Cessna and the Industrial businesses. Debt proceeds enabled the company to increase its cash balances by $1.2 billion during the year, giving it additional financial flexibility to support TFC as the non- captive finance portfolio is liquidated. Gross debt/EBITDA at TXT's manufacturing business was approximately 4.2x when excluding certain special charges. This level is considered to be weak at the current rating level, but it should decline gradually when the Cessna and Industrial segments begin to recover. However, a recovery in Cessna's business jet market may not occur until 2011. The ratings and Outlook could improve if the liquidation of TFC's portfolio is achieved on time and loss rates at TFC remain within expected levels. TFC's results and its exit from the non-captive portfolio will be important in determining Textron's consolidated liquidity and ability to rebuild its credit metrics. Other factors that could result in an upward revision to the ratings or Outlook include actions in the next year or so to address the $2.9 billion bank debt maturity, further stabilization and eventual improvement at the Cessna and Industrial segments, and a decline in leverage at TXT. The ratings could potentially be reviewed for a downgrade if losses at TFC are higher than expected or if TXT's cash flow and leverage are weaker than expected due to worsening economic conditions, a delayed rebound in the business jet market, or unexpectedly large pension contributions. The ratings and Outlook incorporate sustainable free cash flow at TXT while the Cessna and Industrial businesses confront low volumes. TXT's manufacturing businesses generated free cash flow after dividends of $400 million in 2009. This level could increase to near $500 million in 2010. The expected improvement reflects the impact of significant restructuring beginning in late 2008, primarily at the Cessna and Industrial segments. Cessna's workforce has been reduced by 50%, partly offsetting the impact of lower volumes. Deliveries at Cessna are expected to decline to 225 units in 2010 from 289 units in 2009 and 467 units in 2008. As a result, the company expects margins to be in the low single digits during 2010. Cessna's backlog is at its lowest point in six years reflecting a large number of cancellations and TXT's decision to cancel development of the Citation Columbus. There are signs of stabilization with respect to orders and utilization rates. However, ongoing industry concerns include corporate profitability that is linked to demand for business jets, increasing competitive pressure as the business jet market becomes more global, and the availability of financing. In TXT's other segments, Bell and Textron Systems continue to be relatively stable owing to their exposure to defense spending. Commercial helicopter deliveries by Bell remain at low levels but military deliveries could increase for the V-22 and H-1 programs. Results at Textron Systems also remain steady although margins could decline slightly toward normal levels as certain government contracts are renewed. The Industrial segment, which has faced very difficult conditions, could improve modestly as Kautex benefits from a rebound in automotive production from unusually low levels in 2009. However, conditions in the non-residential construction, golf, and turf markets likely will continue to pressure results in the Industrial segment's other businesses. Textron's consolidated cash balances, including TFC, totaled $1.9 billion at the end of 2009, of which more than $1.7 billion was at TXT. Cash represents the company's primary source of liquidity because it fully drew down its $3 billion of bank facilities in early 2009. The facilities mature in April 2012. Textron's reliance on the bank facilities makes covenant compliance an important credit issue. Fitch estimates that TXT is well within the required range of its debt-to-capitalization covenant. Aside from the bank facilities due in 2012, the nearest debt maturities at TXT are modest with $129 million scheduled to mature in 2010 and $154 million due in 2012. Other cash requirements include pension contributions. TXT plans to contribute $20 million in 2010 but contributions could become more significant in the future depending on market conditions. THORNBURG MORTGAGE: Orrick's Dempsey Tagged in Trustee's Suit ------------------------------------------------------------- The complaint filed by Joel I. Sher, the trustee overseeing the liquidation of TMST Inc., formerly Thornburg Mortgage Inc., against company executives also charges Karen Dempsey, Esq., a partner at Orrick, Herrington & Sutcliffe, with being part of the alleged conspiracy to defraud Thornburg and divert the company's money to SAF Financial, a new entity started by ex-Thornburg management. The Troubled Company Reporter on Friday ran a story on Mr. Sher's lawsuit against ex-Thornburg executives. Zach Lowe at The American Lawyer reports that Ms. Dempsey is alleged to have helped the former executives by, among other things, advising them on how to set up SAF and amend the Thornburg management agreement in a way that allowed for the payment of management fees and bonuses from Thornburg to the executives on a faster timetable -- and outside of bankruptcy court. According to Mr. Lowe, Ms. Dempsey declined to comment on the matter when reached by phone Thursday afternoon, and instead referred Am Lawyer to her attorney, Pamela Phillips, Esq., at Howard Rice. Mr. Lowe relates that in a statement e-mailed to The Am Law Daily, Ms. Phillips calls the allegations "outrageous" and says they reflect Mr. Sher's desire to "find deep pockets without regard to the actual facts." Mr. Sher is suing these ex-Thornburg officers: 1. Larry Goldstone, the former chief operating officer; 2. Clarence Simmons III, the former chief financial officer; 3. Deborah Burns, a former vice president; and 4. Amy Pell, a former senior vice president and director of investor relations. As reported by the TCR, the complaint alleges that the Senior Officers (i) amended a management agreement between TMST and TMAC in order to transfer millions of dollars to TMAC and then lied to the board about the reason for the amendment, (ii) needlessly paid hundreds of thousands of dollars to vendors so that the vendors? products would be available for their new venture, (iii) illegally paid themselves hundreds of thousands of dollars in unauthorized bonuses on the eve of bankruptcy, (iv) secretly transferred the Debtors' confidential and proprietary information to their new venture, (v) used millions of dollars of the Debtors' work product for their new venture without compensating the Debtors, (vi) used the Debtors' employees and resources post petition to start up their new venture, (vii) paid themselves excessive post petition salaries while they were primarily engaged in promoting their new venture, and (viii) engaged in a grand scheme to hide and cover up their actions. About Thornburg Mortgage 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. THORNBURG MORTGAGE: Former Execs, Orrick Partner Face Fraud Suit ---------------------------------------------------------------- Law360 reports that a trustee for Thornburg Mortgage Inc. has sued former executives and an Orrick Herrington & Sutcliffe LLP attorney alleging that they conspired to siphon assets away from the ailing company to secretly start a new business venture, breaching confidentiality and other agreements. 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. TRIAD GUARANTY: Posts $79.1 Million Net Loss in Q4 2009 ------------------------------------------------------- Triad Guaranty Inc. reported a net loss for the quarter ended December 31, 2009, of $79.1 million compared to a net loss of $101.9 million for the third quarter of 2009 and a net loss of $122.2 million for the fourth quarter of 2008. The net loss for the year ended December 31, 2009 was $595.6 million compared to a net loss of $631.1 million for the year ended December 31, 2008. Total revenues increased to $57.8 million for the fourth quarter of 2009, as compared to $51.3 million in the third quarter of 2009 and $41.4 million in the fourth quarter of 2008. Fourth quarter revenues include a gain of $12.9 million related to the sale of the operating platform to Essent Guaranty, Inc. Net losses and loss adjustment expenses were $128.9 million for the fourth quarter of 2009, down from $145.8 million in the 2009 third quarter and $178.1 million for the fourth quarter of 2008. About Triad Guaranty Winston-Salem, N.C.-based Triad Guaranty Inc. (OTC BB: TGIC) -- http://www.triadguaranty.com/is a holding company which, through its wholly-owned subsidiary, Triad Guaranty Insurance Corporation, historically has provided mortgage insurance coverage in the United States. Triad ceased issuing new commitments for mortgage guaranty insurance coverage on July 15, 2008, and is operating its business in run-off under two Corrective Orders issued by the Illinois Dpartment of Insurance and its director. * * * In its Form 10-Q for the quarterly period ended September 30, 2009, Triad Guaranty Inc. said that there is substantial doubt as to its ability to continue as a going concern, based on, among other things, the possible inability of Triad to comply with the provisions of the Corrective Orders, the Company's recurring losses from operations and the Company reporting an increasing deficit in assets as of the end of each of its last five calendar quarters. TRIBUNE CO: Bank Debt Trades at 38% Off in Secondary Market ----------------------------------------------------------- Participations in a syndicated loan under which Tribune Co. is a borrower traded in the secondary market at 61.82 cents-on-the- dollar during the week ended Friday, March 5, 2010, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 0.93 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 190 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) TRONOX INC: Pigments Units Had EUR120 Mil. in Sales in 2009 ----------------------------------------------------------- With sales of EUR120 million and clear indications that earnings were positive, insolvent titanium dioxide producer Tronox Pigments did comparatively well in 2009, according to Plast Europe. The report, however, says the former subsidiary of Tronox Inc. did not provide any information on its earnings. The recent investment plans, located in the high single-digit millions range, provide some indication of its earnings position, the report said. The aim is to drive forward the development of intelligent new products and to target markets as yet untapped by the company, the report added. 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: Wants Plan Exclusivity Until July 12 ------------------------------------------------ Tronox Incorporated and its debtor-affiliates ask Judge Allan L. Gropper of the U.S. Bankruptcy Court for the Southern District of New York to extend their exclusive period to file a plan of reorganization through July 12, 2010, and their exclusive period to solicit acceptances of that plan through September 13, 2010. Jonathan S. Henes, Esq., at Kirkland & Ellis LLP, in New York, relates that since the December 10, 2009 order extending the Debtors' Exclusive Periods to March 15, 2010 and May 14, 2010, and as a result of herculean efforts, the Debtors and their key creditor constituencies reached an agreement on the framework and substance of a plan of reorganization, thereby eliminating the need for an auction of the Debtors' assets. Consequently, the Debtors cancelled their scheduled auction and, since that time, have focused on negotiating and documenting a standalone plan of reorganization. According to Mr. Henes, the negotiation and documentation of the standalone plan is complex. The Debtors must make sure numerous creditor constituencies with disparate rights and views are comfortable with the plan, which takes careful consideration and time. In addition, the Debtors are working hard to attempt to achieve a fully consensual plan by brokering a settlement between the Debtors' equity committee and creditor constituencies. "Based on the progress the Debtors have made to date and the momentum it has generated towards constructing a standalone plan, ample cause exists to extend the Exclusive Periods for a fourth time to enable the Debtors' to bring the Chapter 11 cases to a successful end," Mr. Henes tells the Court. Mr. Henes also notes that during the Third Exclusivity Period the Debtors reached a settlement with its prepetition term loan lenders and the Official Committee of Unsecured Creditors regarding the Creditors Committee's suit against those lenders, Adv. Proc. No. 09-01388 (ALG). The settlement, which was a key component of the Debtors' standalone plan negotiations, resulted in the receipt of $5 million by the Debtors in exchange for a release of the term loan lenders from the claims underlying the suit. Mr. Henes avers that the Debtors are not seeking an extension of their Exclusive Periods to pressure creditors. To the contrary, Mr. Henes explains, the Debtors have worked constructively and openly with all of its stakeholders to negotiate the framework for its standalone plan of reorganization and will continue to do so to win support for consummation of that plan. The Court will convene a hearing on March 25, 2010, at 11:00 a.m. (Eastern Time) to consider approval of the request. Objections are due on March 18, 2010, at 4:00 p.m. (Eastern Time). 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: Wants $45MM Bridge Liquidity Funding OK'd -------------------------------------------------------------- Trump Entertainment Resorts, Inc., et al., ask the U.S. Bankruptcy Court for the District of New Jersey for authorization to: (i) incur postpetition indebtedness with priority over administrative expenses and secured by liens on property of the estates, subject to the carve out; and (ii) amend the cash collateral order to provide for the continued use of cash collateral. The Debtors intend to use the money to (a) operate their three casino hotels in Atlantic City; and (b) make adequate protection payments the First Lien Lenders under the cash collateral order. The Debtors relate that the competing plan process have caused the excessive adequate protection payments to the First Lien Lenders. Proceedings are underway in connection with the Court's consideration of two competing plans, one submitted jointly by the Debtors and certain holders of the 8.5% Senior Secured Notes due 2015, and the other submitted by Icahn Partners, Beal Bank and Beal Bank Nevada. The Ad Hoc Committee committed to provide $45 million in bridge liquidity from the confirmation date through the effective date of the AHC/Debtor Plan. The Salient Terms of the DIP Financing * DIP Facility Lenders: Avenue Capital Management II, L.P.; Contrarian Funds, LLC; Continental Casualty Company; GoldenTree Asset Management, LP; MFC Global Investment Management U.S. LLC; Northeast Investors Trust; Polygon Global Opportunities Master Fund; Interstate 15 Holdings, Ltd., or affiliates of one or more of the foregoing. * DIP Facility Amount: up to $45,000,000. * Type of DIP Facility: A non-amortizing, multiple issuance secured term notes facility. * Administrative Agent: Wilmington Trust FSB or another entity to be appointed with the consent of the Commitment Parties. * Availability Period: from the closing date through the DIP Termination Date. * DIP Termination Date: The earliest of (i) the date which is six months after the closing date, or (ii) the occurrence of an event of default or the termination date. *Interest Rate: 10% per annum * Fees: None. In a separate motion, the Debtors will be seeking an amendment of the cash collateral order to eliminate further adequate protection payment requirements until further order of the Court. The Debtors believe that the over $52 million of adequate protection cash payments made to the First Lien Lenders, are more than sufficient to adequately protect Icahn and Beal Bank, and the cessation of further payment obligations will enable the Debtors to meet all its current payment obligations. The Debtors add that Icahn offered to provide debtor-in-possession financing in connection with, and subject to confirmation of, the Icahn/Beal Plan. The Debtors have not pursued that proposal because they strongly oppose confirmation of the Icahn/Beal Plan. About Trump Entertainment Resorts 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. TRW AUTOMOTIVE: Moody's Raises Corporate Family Rating to 'B2' -------------------------------------------------------------- Moody's Investors Service raised TRW Automotive, Inc.'s Corporate Family and Probability of Default ratings to B2 from B3. In a related action Moody's also raised the ratings of the senior secured credit facilities to Ba2 from Ba3, and raised the ratings for the guaranteed senior unsecured notes to B3 from Caa1. The Speculative Grade Liquidity Rating was raised to SGL-2 from SGL-3. The rating outlook is changed to positive from stable. The upgrade of TRW's Corporate Family Rating to B2 is in response to the company's strong operating performance and resulting credit metrics for the fourth quarter of 2009 beyond Moody's expectations, as a result of improving automotive production compared to earlier in the year and the effect of restructuring actions. These conditions led to gross margin improvement from about 1% in the first quarter of 2009 to about 11% in the fourth quarter. Most of this improvement is expected to benefit the company's results in 2010. However, the company's performance will be challenged by risks. These risks include the approximate 20% of TRW's 2009 revenues from the North American operations of the Detroit-3, exposing the company to the potential for market share erosions and further restructuring actions at GM and Chrysler. Moody's also expects second-half 2010 automotive production levels in Europe to be pressured by Moody's expectation of lower retail units sales for the full year (declining 15%). Content per vehicle will also be pressured as consumers' buying preferences shift to smaller cars away from SUVs. TRW's positive outlook considers potential for the company's credit metrics to further improve over the intermediate-term as a result of Moody's expectation for improving North American automotive production levels in 2010 and 2011 of 11.5 million units, and 13 million units, respectively. North America accounted for about 26% of TRW's revenues in 2009. The company's liquidity position should support the company's ability to deliver stronger results over the intermediate-term, given the expected lackluster improvement in automotive production levels in Europe (about 58% of revenue) in 2010. TRW's competitive position is expected to continue to benefit from its strong position in safety products, and a sound level of geographic, customer, and product diversification. TRW's liquidity rating of SGL-2 reflects a good liquidity profile over the next twelve months. As of December 31, 2009, the company's cash balance was $788 million. The cash balance improvement over the third quarter cash balance of $474 million was driven by the company's strong fourth quarter free cash flow, the net proceeds from the exchangeable and senior unsecured note issuances, partially offset by the net reduction of funded senior secured debt. Although there is nominal required amortization under the senior secured credit facilities, incremental capital expenditures and working capital needs required to support the company's growth are expected to result in only a modest cash burn over the next twelve months. TRW's liquidity position is also supported by a $1.256 billion revolving credit facility. As of December 31, 2009, the revolving credit facility was unfunded with $58 million of letters of credit and bank guarantees issued. The majority of the committed facility is expected to remain available over the next twelve months providing ample funding capacity for the company's needs. The financial covenant cushions over the near-term are expected to benefit from the company's recent strong quarterly performance allowing TRW full access to the revolver availability. Alternative liquidity arrangements will continue to be limited by the current bank liens over substantially all of the company's assets. Ratings raised: -- Corporate Family Rating, to B2 from B3; -- Probability of Default Rating, to B2 from B3; -- $1.256 billion combined senior secured domestic and global revolving credit facilities, to Ba2 (LGD1, 8%) from Ba3 (LGD1, 8%); -- $225 million senior secured term loan A2, to Ba2 (LGD1, 8%) from Ba3 (LGD1, 8%); -- $175 million senior secured term loan B, to Ba2 (LGD1, 8%) from Ba3 (LGD1, 8%); -- $500 million senior unsecured notes due 2014, to B3 (LGD4 61%) from Caa1 (LGD4, 62%); -- EUR275 million senior unsecured notes due 2014, to B3 (LGD4 61%) from Caa1 (LGD4, 62%); -- $600 million senior unsecured notes due 2017, to B3 (LGD4 61%) from Caa1 (LGD4, 62%); -- Speculative Grade Liquidity Rating, to SGL-2 from SGL-3 -- Rating Outlook, to Positive from Stable The last rating action was on December 7, 2009 when ratings were assigned to the amended senior secured credit facilities. TRW Automotive, Inc., headquartered in Livonia, MI, is among the world's largest and most diversified suppliers of automotive systems, modules, and components to global vehicle manufacturers and related aftermarket. The company has four operating segments: Chassis Systems, Occupant Safety Systems, Automotive Components, and Electronics. Its primary business lines encompass the design, manufacture, and sale of active and passive safety related products. Revenues in 2009 were approximately $11.6 billion. UAL CORP: Decision to Outsource Raises Safety Issues ---------------------------------------------------- United Air Lines, Inc., intends to outsource engineering work from its mechanic base at San Francisco International Airport, San Mateo County Times reports. United plans to lay off 50 employees, mostly engineers, later this year at the San Francisco hub, the report says. In this light, United will move majority of the engineering work to a private consulting firm in Atlanta, Georgia, called TeamSAI, Inc., while some information technology jobs would be transferred to India, the report discloses. However, United's employees and U.S. Congress Representative Jackie Speier for California's 12th District are concerned of the impact the move will have on the quality of repair work and aircraft safety, San Mateo County Times reports. United's engineers and mechanics and Ms. Speier pointed out that duties being done by non-airline workers offsite could cause mistakes from miscommunication or inferior quality work, the report notes. United spokesperson Megan McCarthy stated that the safety of the aircraft is United's highest priority, San Mateo County Times reports. All the laid off employees were given the chance to apply for a transfer to Atlanta or to another job at the San Francisco hub, the report says. The aviation subcommittee of the House of Representatives will convene a hearing on United's San Francisco topic later this summer, San Mateo County Times discloses. About UAL Corporation Based in Chicago, Illinois, UAL Corporation (NASDAQ: UAUA) -- http://www.united.com/-- is the holding company for United Airlines, Inc. United Airlines is the world's second largest air carrier. The airline flies to Brazil, Korea and Germany. The company filed for Chapter 11 protection on Dec. 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191). James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and Steven R. Kotarba, Esq., at Kirkland & Ellis, represented the Debtors in their restructuring efforts. Fruman Jacobson, Esq., at Sonnenschein Nath & Rosenthal LLP represented the Official Committee of Unsecured Creditors. Judge Eugene R. Wedoff confirmed a reorganization plan for United on Jan. 20, 2006. The Company emerged from bankruptcy on Feb. 1, 2006. (United Airlines Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) UAL Corp. carries a 'Caa1' probability of default rating from Moody's, 'B-' long term foreign issuer credit rating from Standard & Poor's, and 'CCC' long term issuer default rating from Fitch. UAL CORP: Disagrees With Fee Hikes at O'Hare Int'l Airport ---------------------------------------------------------- United Air Lines, Inc., and American Airlines are against the Chicago aviation officials' plan to raise rents and landing fees at O'Hare International Airport despite the recession and a struggling airline industry, Chicago Tribune reports. The Carriers also disagree with the City's plan to use the money to repay bonds, which carry a 4% variable interest and are not due for another 20 years, the article points out. Against this backdrop, talks on the funding deal of the final new runways at O'Hare International Airport are put off until the City rethinks its financial strategy, the Airlines said in a letter to Chicago Aviation Commissioner Rosemario Andolino, Tribune discloses. On behalf of United, Michael Trevino commented that it is fiscally irresponsible to prepay debt that already has a coupon of 4%, especially when that debt is not due until 2030, The Tribune notes. About UAL Corporation Based in Chicago, Illinois, UAL Corporation (NASDAQ: UAUA) -- http://www.united.com/-- is the holding company for United Airlines, Inc. United Airlines is the world's second largest air carrier. The airline flies to Brazil, Korea and Germany. The company filed for Chapter 11 protection on Dec. 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191). James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and Steven R. Kotarba, Esq., at Kirkland & Ellis, represented the Debtors in their restructuring efforts. Fruman Jacobson, Esq., at Sonnenschein Nath & Rosenthal LLP represented the Official Committee of Unsecured Creditors. Judge Eugene R. Wedoff confirmed a reorganization plan for United on Jan. 20, 2006. The Company emerged from bankruptcy on Feb. 1, 2006. (United Airlines Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) UAL Corp. carries a 'Caa1' probability of default rating from Moody's, 'B-' long term foreign issuer credit rating from Standard & Poor's, and 'CCC' long term issuer default rating from Fitch. UAL CORP: To Sell Former Headquarters Facility ---------------------------------------------- United Air Lines, Inc., will sell the space at its former world headquarters facility in 1200 E Algonquin Rd, Arlington Heights, Illinois, GlobeSt.com discloses. Jones Lang Lasalle markets the 66-acre, one million-square foot property, which includes four office buildings and an underground data center, GlobeST.com notes. No price is set since the property could be utilized in different ways, GlobeST.com points out. United plans to lease the space back for at least three years while the company transitions to new facilities, Jones Lang says, GlobeST.com notes. Jones Lang however clarifies that United will not occupy the entire facility but the company will take the entire data center as well as one of the office buildings, GlobeSt.com adds. About UAL Corporation Based in Chicago, Illinois, UAL Corporation (NASDAQ: UAUA) -- http://www.united.com/-- is the holding company for United Airlines, Inc. United Airlines is the world's second largest air carrier. The airline flies to Brazil, Korea and Germany. The company filed for Chapter 11 protection on Dec. 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191). James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and Steven R. Kotarba, Esq., at Kirkland & Ellis, represented the Debtors in their restructuring efforts. Fruman Jacobson, Esq., at Sonnenschein Nath & Rosenthal LLP represented the Official Committee of Unsecured Creditors. Judge Eugene R. Wedoff confirmed a reorganization plan for United on Jan. 20, 2006. The Company emerged from bankruptcy on Feb. 1, 2006. (United Airlines Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) UAL Corp. carries a 'Caa1' probability of default rating from Moody's, 'B-' long term foreign issuer credit rating from Standard & Poor's, and 'CCC' long term issuer default rating from Fitch. UNITED AIR: Bank Debt Trades at 18% Off in Secondary Market ----------------------------------------------------------- Participations in a syndicated loan under which United Airlines, Inc., is a borrower traded in the secondary market at 81.83 cents- on-the-dollar during the week ended Friday, March 5, 2010, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. This represents an increase of 1.00 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 Feb. 13, 2013, and carries Moody's B3 rating and Standard & Poor's B+ rating. The debt is one of the biggest gainers and losers among 190 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. Based in Chicago, Illinois, UAL Corporation (NASDAQ: UAUA) -- http://www.united.com/-- is the holding company for United Airlines, Inc. United Airlines is the world's second largest air carrier. The airline flies to Brazil, Korea and Germany. The company filed for Chapter 11 protection on Dec. 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191). James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and Steven R. Kotarba, Esq., at Kirkland & Ellis, represented the Debtors in their restructuring efforts. Fruman Jacobson, Esq., at Sonnenschein Nath & Rosenthal LLP represented the Official Committee of Unsecured Creditors before the Committee was dissolved when the Debtors emerged from bankruptcy. Judge Eugene R. Wedoff confirmed the Debtors' Second Amended Plan on Jan. 20, 2006. The company emerged from bankruptcy protection on Feb. 1, 2006. (United Airlines Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) UAL Corp. carries a 'Caa1' probability of default rating from Moody's, 'B-' long term foreign issuer credit rating from Standard & Poor's, and 'CCC' long term issuer default rating from Fitch. VALMONT INDUSTRIES: Moody's Affirms 'Ba1' Corp. Family Rating ------------------------------------------------------------- Moody's Investors Service affirmed all the credit ratings of Valmont Industries, Inc., including the Ba1 Corporate Family Rating and the Ba2 rating on the senior subordinated notes. The ratings outlook remains positive. Valmont announced that the boards of directors of Valmont and Delta, PLC have agreed to the terms of a recommended cash offer for all of the outstanding ordinary shares of Delta. The offer price is GBP1.85 per ordinary share, representing a transaction value of approximately $430 million at current exchange rates. The transaction is subject to the satisfaction of customary closing conditions, including Delta shareholder acceptance and regulatory approvals. Valmont expects to close the transaction in the second quarter. Valmont will finance the transaction with cash on hand, its existing $280 million revolver, and a short-term committed debt facility to be provided by Credit Suisse Securities (USA) LLC and Banc of America Securities LLC. Permanent debt financing is anticipated through a bond offering in the future. "Valmont's financial metrics were very strong for the Ba1 rating category prior to the Delta acquisition and are expected to remain strong afterwards," stated Moody's analyst Suzanne Wingo. Debt to EBITDA, reflecting Moody's standard adjustments, would increase from 0.9 times at December 31, 2009 to approximately 2 times on a pro forma basis. The acquisition increases Valmont's scale and geographic diversification by adding approximately $500 million in incremental revenues in mostly complementary product lines to its existing businesses. Nonetheless, while no major restructuring activities are planned, the majority of Delta's assets are located outside the Americas which could add a level of risk and complexity to the integration process. Although Moody's are maintaining a positive ratings outlook, Moody's do not anticipate a positive rating action in the very near term. The ratings could be upgraded after permanent financing is obtained, there are clear indications that Delta's businesses have been successfully integrated, and Moody's have more visibility into the combined company's expected financial results and policies over the medium term. The ratings outlook could be stabilized if Valmont were to experience a prolonged downturn resulting in a sustained contraction in the company's consolidated results or liquidity profile. Additionally, a change towards more aggressive financial policies could pressure the ratings. In the meantime, Valmont's short-term liquidity rating may be impacted at various points in the upcoming financing process. Currently, the company's liquidity rating is SGL-1, indicating a very good liquidity profile. The SGL-1 rating could be downgraded when the transaction closes if acquisition financing has a near- term maturity and availability under the $280 million revolver has been significantly reduced. If this is the case and the liquidity rating is lowered, after permanent long-term financing has been put in place the liquidity rating could subsequently be raised. Moody's affirmed these ratings: -- Corporate Family Rating, Ba1 -- Probability of Default Rating, Ba1 -- $150 million senior subordinated notes due 2014, Ba2 / LGD5 (85%) -- Speculative Grade Liquidity Rating, SGL-1 The previous rating action for Valmont occurred on August 4, 2009, when Moody's changed the rating outlook to positive from stable and affirmed all the ratings. Valmont Industries, Inc. is a global producer of metal and concrete pole and tower structures, mechanized irrigation systems and coatings. Customers and end-users include state and federal governments, contractors, utility and telecommunications companies, manufacturers of commercial lighting fixtures and large farms. Headquartered in Omaha, Nebraska, the company is publicly held (ticker: VMI) and reported revenues of $1.8 billion for the year ended December 26, 2009. VERILINK CORP: District Court Rejects Interlocutory Appeal ---------------------------------------------------------- WestLaw reports that interlocutory appellate review of a bankruptcy court order denying defendants' motion for judgment on the pleadings on limitations grounds in an adversary proceeding alleging breach of fiduciary duties and violations of federal securities laws was not warranted. The bankruptcy court refused to rule on the issue because additional factual development was needed before it could rule on tolling issues. There was no showing that other courts had examined the issue and reached different conclusions. Smith v. Laddin, --- F.Supp.2d ----, 2010 WL 569688 (N.D. Ala.) (Hopkins, J.). Liquidating Trustee Darryl S. Laddin filed a Complaint (Bankr. N.D. Ala. Adv. Pro. No 08-____) on April 8, 2008, against Leigh S. Belden, Steven C. Taylor, C.W. Smith, S. Todd Westbrook, and others, asserting causes of action based on (1) insider trading claims, (2) claims arising from a transaction involving Larscom while in the zone of insolvency, (3) claims under Section 14(a) of the Securities Exchange Act of 1934, and (4) "PIPE Notes" claims. In the Bankruptcy Court, Messrs. Smith and Westbrook argued that the statutes of limitations expired on all the claims asserted against them. The Trustee countered by asserting that the limitations periods were tolled. Judge Cadell held that "[t]olling may apply to preserve each of Plaintiff's breach of fiduciary claims, as well as Plaintiff's claim under Section 14(a) of the Securities Exchange Act of 1934. At this early stage of the litigation where there has been no significant discovery, the Court cannot rule that the limitations periods were not tolled by any of the tolling theories asserted by Plaintiff." Judge Hopkins won't either. Messrs. Beldon and Taylor contend that Verilink, as a corporation, lacks standing to bring claims for violation of the Section 14(a) of the Securities Exchange Act of 1934. Judge Cadell held that "developed case law" by the Supreme Court and the Court of Appeals for the Second Circuit "provides for [a] private right of action under Sec. 14(a) . . . for corporations themselves." Messrs. Beldon and Taylor tell Judge Hopkins that Judge Cadell should have looked at Delaware law rather than Second Circuit law. Judge Hopkins says Messrs. Beldon and Taylor need to have another conversation with Judge Cadell rather than the District Court. About Verilink Corp. Verilink and its subsidiary Larscom Incorporated filed voluntary Chapter 11 petitions (Bankr. N.D. Ala. Case Nos. 06-50866 and 06-80567) on April 9, 2006, disclosing $37,221,000 in assets and $23,913,000 in debts at the time of the filing. On December 7, 2006, the Company submitted a Second Amended Joint Plan of Reorganization to the Court for consideration. On January 31, 2007, the Court issued an order confirming the Plan in its entirety. The Plan was deemed effective January 31, 2007. The Plan provided for the orderly liquidation of the Company's assets to provide a distribution to its creditors. The Plan provides for the creation of a Liquidating Trust to transfer all remaining assets for liquidation, administration and distribution in accordance with the Plan. The assets transferred to the Liquidating Trust include, without limitation, all Causes of Action that the Debtors had or had power to assert immediately prior to the Order confirming the Plan. Darryl S. Laddin serves as the Liquidating Trustee and is represented by J. Hayden Kepner, Jr., Esq., at Arnal Golden Gregory LLP, in Atlanta, Ga. VISTEON CORP: Bank Debt Trades at 110.25% in Secondary Market ------------------------------------------------------------- Participations in a syndicated loan under which Visteon Corporation is a borrower traded in the secondary market at 110.25 cents-on-the-dollar during the week ended Friday, March 5, 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 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 190 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) WATERFIELD BANK: Closed; New bank to Take Over Operations --------------------------------------------------------- Waterfield Bank, Germantown, Maryland, was closed March 5 by the Office of Thrift Supervision, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the insured depositors, the FDIC created Waterfield Bank, FA-a new depository institution chartered by the OTS and insured by the FDIC-to take over the operations of Waterfield Bank. The new institution will remain open until April 5, 2010, to allow depositors access to their insured funds and time to move accounts to other insured institutions. The bank had one branch location. It also took deposits from customers via the Internet and 38 affinity groups. At the time of closing, the receiver immediately transferred to Waterfield Bank, FA, all insured deposits of the failed bank, except certificates of deposits (CDs) and individual retirement accounts (IRAs). The FDIC will mail checks directly to customers with CDs and IRAs for the amount of their insured funds, on Monday morning, March 8. Customers with savings accounts, checking accounts and money market deposit accounts will have access to their insured funds as usual during this transitional period. Banking activities, such as direct deposit, check writing, and ATM and debit card use, will continue as normal for the customers with demand deposit accounts until Waterfield Bank, FA, closes on April 5. At the end of this transition period, the FDIC will mail checks to customers who have not closed their accounts or transferred their funds to another institution. On-line banking services, including bill pay, were unavailable for transactions over the weekend; however, these systems will be active by Monday morning, March 8. As of December 31, 2009, Waterfield Bank had $155.6 million in assets and $156.4 million in deposits. At the time of closing, the amount of deposits exceeding the insurance limits totaled about $407,000. This amount is an estimate and is likely to change as the FDIC works with customers of Waterfield Bank. The uninsured deposits were not transferred to the newly chartered institution. Depositors with more than $250,000 at Waterfield Bank should call the FDIC at (800) 830-4735 to make an appointment to discuss the status of their funds. Customers who would like more information about the transaction can call the toll-free number; send an e- mail to waterfieldbankquestions@fdic.gov; or visit the FDIC's Web site at: http://www.fdic.gov/bank/individual/failed/waterfield.html Under the FDI Act, the FDIC may create a new depository institution to ensure that depositors have continued access to their insured funds where no other bank has agreed to assume the insured deposits. This arrangement allows for uninterrupted direct deposits and automated payments from customers' accounts and allows them time to find another institution with which to do business. The FDIC estimates that the cost to its Deposit Insurance Fund will be $51.0 million. Waterfield Bank is the 25th bank to fail in the nation this year and the first in Maryland. The last FDIC- insured institution to fail in the state was Bradford Bank, Baltimore, on August 28, 2009. 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 91.46 cents- on-the-dollar during the week ended Friday, March 5, 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 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 190 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. XIOM CORP: James Weber Replaces Andrew Mazzone from Board --------------------------------------------------------- The Board of Directors of Environmental Infrastructure Holdings Corp. accepted the resignation of Andrew B. Mazzone from the board, and elected James K. Weber to fill the vacancy created by the resignation of Mr. Mazzone. Mr. Mazzone's decision to resign his seat on the board did not arise or result from any disagreement with the Registrant on any matters relating to the the company's operations, policies or practices, but rather Mr. Mazzone's desire to curtail his activities for personal reasons. Mr. Weber's term will expire at the Annual Stockholders Meeting in 2010. There are no understandings or arrangements between Mr. Weber and any other person by which he was selected as a director. Environmental Infrastructure Holdings Corp, formerly XIOM Corp,, was incorporated in Delaware on March 2, 1998. Xiom Corp. -- http://xiom-corp.com/-- manufactures industrial based thermal spray coating systems in the United States. * * * According to the Troubled Company Reporter on Feb. 24, 2010, Environmental Infrastructure Holdings Corp. said it is unable to file its quarterly report on Form 10-Q for its fiscal quarter ended Dec. 31, 2009, because it was unable to compile certain information. * Bank Failures This Year Reach 26 as 4 Fell March 5 ---------------------------------------------------- Regulators closed four banks bank Friday -- Sun American Bank, Boca Raton, FL; Waterfield Bank, Germantown, MD; Centennial Bank, Ogden, UT; and Bank of Illinois, Normal, IL -- raising the total closings for this year to 26. 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) ----------- ---------- -------------- ----------- Sun American Bank $535.7 First-Citizens Bank $103.8 Waterfield Bank $155.6 {FDIC Created} $51.0 Centennial Bank $215.2 Zions Bank $96.3 Bank of Illinois $211.7 Heartland Bank $53.7 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 * Democrats Unveil Bankruptcy-Law Reforms to Mixed Reaction ----------------------------------------------------------- Proposed legislation to amend the Bankruptcy Code to protect rank- and-file workers' pay and pensions while prohibiting bonuses for top executives has drawn lukewarm reviews from the debtors' bar and bankruptcy professors, ABI reports. Assistant Senate Majority Leader Dick Durbin (D-IL) and House Judiciary Committee Chairman John Conyers (D-MI) introduced legislation, The Protecting Employees and Retirees in Business Bankruptcies Act, which would make several changes to Chapter 11 bankruptcy law, putting workers interests near the top when companies file for bankruptcy. The new legislation amends bankruptcy law by prohibiting bonuses and other forms of incentive compensation to senior officers of companies in bankruptcy reorganization. Under the proposed amendments, senior executives would be prohibited from receiving retirement benefits if workers lose retirement or health benefits. * DLA Piper Snags Restructuring Attorneys in NYC, SF ---------------------------------------------------- DLA Piper has picked up three attorneys from King & Spalding LLP, Pepler Mastromonaco LLP and Skadden Arps Slate Meagher & Flom LLP, adding to the firm's restructuring and finance practices in New York and San Francisco, Law360 reports. Based in Baltimore, Maryland, DLA Piper -- http://www.dlapiper.com -- has 3,400 lawyers operating out of 65 offices in the US; Europe, the Middle East, and Africa; and the Asia Pacific region. It serves corporate clients through a broad range of practices divided into a dozen key groups; specialties include intellectual property, regulatory and government affairs, and technology and media. The firm, which shortened its name from DLA Piper Rudnick Gray Cary in 2006, was formed in 2005 when Maryland-based Piper Rudnick merged with California-based Gray Cary Ware & Freidenrich and UK firm DLA. * Ropes & Gray Adds Weil Gotshal Bankruptcy Partner --------------------------------------------------- Ropes & Gray announced that Tony Horspool has joined the firm in its Bankruptcy and Business Restructuring practice. Horspool is the latest in a series of strategic appointments since the firm launched its London office in January. Horspool joins Ropes & Gray from Weil, Gotshal & Manges in London. Named a leading lawyer by Chambers UK: A Client's Guide to the UK Legal Profession, he represents clients across the financial services sector, including hedge funds, special situations groups, banks, monolines, accounting firms and insurers. The U.K. team is headed by leading finance and restructuring lawyers Maurice Allen and Michael Goetz and was bolstered with the addition of U.S. securities partner Jonathan Bloom. By adding a top flight lawyer with deep experience advising companies and their creditors in distressed situations, Ropes & Gray is demonstrating its strong commitment to establishing a premier service center for its clients in the vital London market. "Tony's outstanding technical insolvency skills added to our existing capabilities ensures that we can effectively represent all the key constituencies in restructurings and insolvencies: borrowers and sponsor clients, senior lenders, and subordinated lenders," Allen says. Horspool has been involved in many of the largest and most complex restructurings of European companies, including Eurotunnel, Parmalat and Telewest. He also has been involved with a number of structured investment vehicles, and has been advising Lehman Brothers Holding Inc. in relation to cross-border aspects of its Chapter 11 filing and TI Automotive on its proposed scheme of arrangement. * 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 ***