/raid1/www/Hosts/bankrupt/TCR_Public/100422.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Thursday, April 22, 2010, Vol. 14, No. 110
Headlines
114 TENTH AVENUE: Judge Gropper Sorts Out Mortgage Dispute
155 EAST: Moody's Withdraws 'Ca' Corporate Family Rating
ABITIBIBOWATER INC: Canadian Court Okays Sale of Mackenzie Assets
ABITIBIBOWATER INC: Panel Says Rejection Request Premature
ABITIBIBOWATER INC: Shareholders Seek Formation of Equity Panel
ALAMO IRON: Cash Collateral Use, DIP Financing Gets Interim Nod
ALTHEIMER & GRAY: 7th Cir. Subordinates Partner's Claim
AMERICAN CAPITAL: CEO Wilkus' 2009 Pay Down From 2007 Level
AMERICAN CAPITAL: Sells $295MM in Shares; Paulson Gets 13% Stake
AMERICAN INT'L: Mulls Action Against Goldman Over CDO Losses
AMERICAN SEAFOODS: S&P Affirms Corporate Credit Rating at 'B'
ANGEL AND BELL: Case Summary & 9 Largest Unsecured Creditors
ANNA NICOLE SMITH: Estate Asks for En Banc Rehearing
ARTISAN HOTEL: Court OKs Limiting Cash Collateral Use
ASG CONSOLIDATED: Moody's Cuts Corporate Family Rating to 'B2'
ASPECT SOFTWARE: Moody's Upgrades Corporate Family Rating to 'B2'
ASPECT SOFTWARE: S&P Upgrades Rating to 'B' on Refinancing
ATRIUM CORP: Sets Financing Guidelines for Exit Loan
AVENTINE RENEWABLE: Former White Energy Exec. Named CFO
BARZEL INDUSTRIES: To Decide If Liquidating Plan Is 'Feasible'
BEAZER HOMES: Fitch Affirms 'CCC' Issuer Default Ratings
BERNARD MADOFF: Connecticut AG Sues Westport Bank for Fraud
BH S&B: Deferred Rent Rolled Into Rejection Damage Claims
BIODELIVERY SCIENCES: Cherry Bekaert Raises Going Concern Doubt
BIODELIVERY SCIENCES: To Raise $10 Million in Shares Offering
BLACK CROW: GECC Claims Rights to Cash Paid to Professionals
BRITTWOOD CREEK: Case Summary & 20 Largest Unsecured Creditors
BROCAM LLC: Voluntary Chapter 11 Case Summary
C&S GROUP: S&P Affirms 'BB-' Rating on $300 Mil. Senior Notes
CAMBRIA MOONSTONE, THE: Case Summary & 20 Largest Unsec. Creditors
CASA NOSTRA: Case Summary & 20 Largest Unsecured Creditors
CHAPARRAL ENERGY: Moody's Upgrades Corporate Family Rating to 'B3'
CHEMTURA CORP: Joins In Panel Objections to CERT's $9 Bil. Claims
CHEMTURA CORP: Given More Time to Probe Diacetyl Claim Liabilities
CHINA DIGITAL: Bongiovanni & Associates Raises Going Concern Doubt
CHINA DU: Keith Zhen Raises Going Concern Doubt
CHRYSLER LLC: Wins Confirmation of Liquidating Plan
CHRYSLER LLC: Dealer Issues with North Carolina Resolved
CIRCUIT CITY: Court OKs Sale of Whitehall Property to H&L
CIRCUIT CITY: Plan Confirmation Hearing Continued to May 11
CIRCUIT CITY: Removal Period Extended Until August 3
CITADEL BROADCASTING: Files Annual Report on Form 10-K
CITADEL BROADCASTING: Says Aurelius Violated Stock Purchase Limits
CITIGROUP INC: Says It Was "Not Involved" in Goldman Probe
COLLINS & AIKMAN: Ex-CEO Stockman Settles SEC Suit for $7.2MM
COLONIAL BANCGROUP: IBS Seeks to Acquire Substantial Interest
CONSUMER PRODUCTS: Case Summary & 20 Largest Unsec. Creditors
CORUS BANKSHARES: FDIC Closes on Loan & Asset-Backed Note Sale
CREDITWEST CORPORATION: Gets Interim Okay to Use Cash Collateral
DECODE GENETICS: Plan Confirmation Hearing Set for May 14
DEEP MARINE: Files Schedules of Assets and Liabilities
DENNY HECKER: Trustee Tags Valuable Items for Auction
ELES BROS: Selling Four Parcels in Pittsburgh for $265,000
ERICKSON RETIREMENT: Court Okays Valuation of Assets Under Plan
ERICKSON RETIREMENT: Seeks Approval of Sovereign Bank Settlement
ERICKSON RETIREMENT: Coastwood Supports $9MM Auction Fee Payment
EXPRESSWAY DEVELOPMENT: Case Summary & 10 Largest Unsec. Creditors
EXTENDED STAY: Backs Centerbridge-Paulson Offer
EXTENDED STAY: Pushed to Bankruptcy by Buyout, Says Examiner
FAIRFIELD RESIDENTIAL: Hearing on Och-Ziff Ouster Set for Today
FEDERAL-MOGUL: Eyes Companies Developing Emerging Technologies
FEDERAL-MOGUL: Named GM's Supplier of the Year
FEDERAL-MOGUL: To Hold 1st Qtr 2010 Fin'l Results Call on April 28
FIDDLER'S CREEK: GBFC Marina Files Schedules of Assets & Debts
FRANKLIN BANK: FDIC Closes on Loan & Asset-Backed Note Offering
GEMS TV: Cash Declining to $19.2 Million by July 2
GENBAND INC: Moody's Assigns 'B2' Corporate Family Rating
GENBAND INC: S&P Assigns Corporate Credit Rating at 'B'
GENERAL GROWTH: Simon Receives Add'l $1.1-Bil. to Boost Bid
GLUTH BROTHERS: Bank Lender Not Entitled to Defense Costs
GRAY TELEVISION: Moody's Assigns 'Caa2' Rating on $365 Mil. Notes
GRAY TELEVISION: S&P Assigns 'CCC' Rating on $365 Mil. Notes
GRYPHON HOLDINGS: SEC Halts Internet-Based Scam
HAWAII MEDICAL: Shareholders & Unsecureds Submit Chapter 11 Plan
HAWAIIAN TELCOM: Court Approves $6.4MM Fee Payment to Lazard & FTI
HAWKEYE RENEWABLE: Wants Plan Exclusivity Until June 19
HICKS ROAD: Case Summary & 4 Largest Unsecured Creditors
HOLIDAY 360: Gets Interim Okay to Use Cash Collateral
HOVNANIAN ENTERPRISES: Fitch Affirms 'CCC' Issuer Default Rating
HPT DEVELOPMENT: Files Schedules of Assets and Liabilities
INNKEEPERS USA: Preparing for Bankruptcy; Misses Debt Payment
INTELLIPHARMACEUTICS: Reports $1.4MM Net Loss for Q1 Ended Feb. 28
J CREW: Moody's Upgrades Corporate Family Rating to 'Ba1'
JOSHUA FARMER: Noteholders Want Bankr. Custodianship for Assets
JUAN MEDINA: Case Summary & 10 Largest Unsecured Creditors
JULIO POLO: Voluntary Chapter 11 Case Summary
KEMET CORP: Moody's Assigns 'B2' Corporate Family Rating
KEMET CORP: S&P Assigns Corporate Credit Rating at 'B'
KRATON POLYMERS: S&P Raises Corporate Credit Rating to 'B+'
LEHMAN BROTHERS: $1.8 Bil. in Claims Change Hands March 16-31
LEHMAN BROTHERS: Examiner Report on CME Exchange Unsealed
LEHMAN BROTHERS: Examiner Report Shows UBS Misconduct, Says Vernon
LEHMAN BROTHERS: Regulators Could Have Stopped Repo 105
LEHMAN BROTHERS: Metavante Claim Settlement Approved
LEHMAN BROTHERS: Sues IRS to Demand Return of $110 Million
LESARRA ATTACHED: Files Schedules of Assets and Liabilities
LEXINGTON PRECISION: Files Amended Reorganization Plan
LIMITED BRANDS: Fitch Assigns 'BB' Rating on $300 Mil. Notes
LIMITED BRANDS: Moody's Rates $300 Mil. Senior Notes at 'Ba1'
LIMITED BRANDS: S&P Assigns 'BB' Rating on $300 Mil. Senior Notes
LIONS GATE: Urges Shareholders to Reject the Icahn Group's Offer
LIVE NATION: Moody's Rates New Senior Secured Facilities at 'Ba2'
LOCATION BASED: February 28 Balance Sheet Upside-Down by $1.4MM
LYONDELL CHEMICAL: Names Initial Members of New Topco Board
LYONDELL CHEMICAL: Settles $7 Bil. in Environmental Claims by U.S.
LYONDELL CHEMICAL: Texas Tax Claimants Object to Plan
LYONDELL CHEMICAL: Tax Assessment Moved to State Court
MAGIC BRANDS: Signs Agreement for Assets Sale to Tavistock
MAGNA ENTERTAINMENT: Equity Holders Want Full Valuation
MAGNA ENTERTAINMENT: Pulls Out of Caruso Retail Venture Project
MANCHESTER JBJ: Case Summary & 2 Largest Unsecured Creditors
MATERA RIDGE: Files Schedules of Assets and Liabilities
MCGINN SMITH: SEC Files Action to Halt Fraudulent Scheme
MERIT MINING: Signs Subscription Agreement with Huakan Investment
METRO-GOLDWYN-MAYER: Filming of New Bond Movie Halted Pending Sale
MGM MIRAGE: Closes Private Offering of $1.15-Bil. in 4.25% Notes
MIRAMAX FILMS: Disney Finalizing Sale to Weinstein
MORTGAGEBROKERS.COM: Dec. 31 Balance Sheet Upside-Down by $588,000
NEWLAND INTERNATIONAL: Fitch Puts 'B+' Rating on $200 Mil. Notes
OCEAN SMART: Posts Net Loss of $323,039 in Q2 Ended February 28
PACE UNIVERSITY: Moody's Affirms 'Ba1' Rating on Bonds
PACIFIC ENERGY: Plan Exclusivity Extended to July 2
PALM INC: Analysts Doubt About Ability to Get Premium Price
PENSON WORLDWIDE: Moody's Assigns 'B1' Corporate Family Rating
PERRY COUNTY: Affiliate Files Schedules of Assets and Liabilities
PHILADELPHIA NEWSPAPERS: Court Extends Exclusivity Until April 30
PHILLIPS-VAN HEUSEN: Moody's Puts 'B2' Rating on $525 Mil. Notes
PHILLIPS-VAN HEUSEN: S&P Affirms 'BB+' Corporate Credit Rating
POINT BLANK: Organizational Meeting to Form Panel on April 26
PRIVE VEGAS: Nightclub Ceases Operations
PTC ALLIANCE: Court Enters Order Approving Sale of All Assets
RECTICEL NORTH AMERICA: Two Units to Exit Bankruptcy on April 23
RESURRECTION CHRISTIAN: Files for Chapter 11 Bankruptcy
R.H. HOOVER: Involuntary Chapter 11 Case Summary
RITZ CAMERA: Wins Confirmation of Liquidating Chapter 11 Plan
RIVERS EDGE: Case Summary & 4 Largest Unsecured Creditors
R L PHIPPS: Case Summary & 20 Largest Unsecured Creditors
ROBERTO SOLTERO: Case Summary & 7 Largest Unsecured Creditors
SARATOGA RESOURCES: Wins Confirmation of Reorganization Plan
SEA PINE: Voluntary Chapter 11 Case Summary
SIX FLAGS: Court Extends Removal Period to July 8
SIX FLAGS: Discloses Substantial Interest in Seven Entities
SIX FLAGS: Resilient Capital Wants to Join Confirmation Hearing
SMURFIT-STONE: Court Allows At Least $21MM in Professional Fees
SMURFIT-STONE: Monitor Files 13th-15th Reports on Canada Unit
SOUTH BAY EXPRESSWAY: Otay River Sues for Breach of Contract
SOUTH BAY EXPRESSWAY: To Hire Professionals in Ordinary Course
SOUTH BAY EXPRESSWAY: Wants to Pay Park Betterments Obligations
SPANSION INC: ITC to Discontinue Probe on Patent Violations
SPANSION INC: Noteholders Appeal Rejection of Ch. 11 Plan
SRV & ASSOCIATES: Case Summary & 2 Largest Unsecured Creditors
STANDARD PACIFIC: Fitch Upgrades Issuer Default Rating to 'B-'
STANDARD PACIFIC: Fitch Assigns 'B-/RR4' Rating on $200 Mil. Notes
STANDARD PACIFIC: Moody's Raises Corporate Family Rating to 'B3'
STANFORD INT'L: SEC's Ft. Worth Office Aware of Fraud Since 1997
STANLEY JOHNSON: Case Summary & 20 Largest Unsecured Creditors
STATION CASINOS: Reaches Deal With Fertita Gaming Over Plan
STERLING MINING: Alberta Star Unsuccessful in Bid to Acquire Firm
SUK HEE SUH: Case Summary & 20 Largest Unsecured Creditors
SUNNYMEADE LEASING: Case Summary & 20 Largest Unsecured Creditors
SUSPECT DETECTION: Davis Accounting Raises Going Concern Doubt
TALBOTS INC: Gets Approval for NYSE Amex Listing of Warrants
TERRACE POINTE: Asks for Court's Nod to Use Cash Collateral
TERRACE POINTE: Taps Stichter Riedel as Bankruptcy Counsel
TEXTRON INC: S&P Gives Stable Outlook; Affirms 'BB+/B' Rating
THEFLYONTHEWALL.COM: 3 Banks Ask Court to Keep Injunction
THERMON HOLDINGS: Moody's Assigns 'B1' Corporate Family Rating
TIB FINANCIAL: To Receive $25MM in New Equity from Patriot
TILLIE JAHNKE: Case Summary & 10 Largest Unsecured Creditors
TONGJI HEALTHCARE: Kabani & Company Raises Going Concern Doubt
TRIBUNE CO: Court Orders Examiner to Probe Zell LBO
TRIBUNE CO: Settles With Major Creditors Regarding Plan
TRIBUNE CO: Wilmington Trust Denies Any Violations
UNITED WESTERN: Chief Financial Officer Retires
US AIRWAYS: Fougere Holcombe Seeks to Delay Case Closing
US AIRWAYS: Looks to Reduce Auction Rate Security Exposure
US AIRWAYS: Resolves Claims Dispute With Ronald Katz
VALLEY FORGE: Net Losses Cue Going Concern Doubt
VALLEY MORTGAGE: Voluntary Chapter 11 Case Summary
VERINT SYSTEMS: S&P Retains CreditWatch Developing on Ratings
VIRGIN METALS: Issues First Default Status Report
VERMILLION INC: Professional Fees Reach $3.8 Million
VISINET LLC: Court Dismisses Chapter 11 Bankruptcy Case
VOLT INFORMATION: Fitch Affirms 'BB' Issuer Default Rating
WASHINGTON MUTUAL: Court Approves Benefit Plan Settlements
WASHINGTON MUTUAL: Equity Panel Can Hire Ashby & Geddes as Counsel
WASHINGTON MUTUAL: Court Allows Equity Panel to Hire PSJC
XERIUM TECHNOLOGIES: Proposes Cadwalader as Lead Counsel
XERIUM TECHNOLOGIES: Proposes Smith as Special Corporate Counsel
XERIUM TECHNOLOGIES: To Act as Representative in Foreign Countries
* Bankruptcy Judges Support Disclosure Rules
* Weil's Harvey Miller Comments on Financial Regulation Proposals
* Baker Donelson Taps Johnston Barton's Max A. Moseley
* John Owens Joins Huron Consulting Group
* Three Experienced Attorneys Join the McDonald Hopkins Law Firm
* Six Sidley Partners Recognized by Law360 as Rising Stars
* Chapter 11 Cases with Assets & Liabilities Below $1,000,000
*********
114 TENTH AVENUE: Judge Gropper Sorts Out Mortgage Dispute
----------------------------------------------------------
WestLaw reports that a mortgage on a corporate Chapter 11 debtor's
property had to be recognized even though the mortgage did not
secure a specific debt of the debtor to the mortgagee, as opposed
to a debt from the debtor's president-sole shareholder to the
mortgagee, and the debtor never signed the note for the $400,000
fixed amount of obligation. The mortgage was signed by the debtor
and the security interest was valid as a nonrecourse debt, and a
nonrecourse debt was presumptively treated as a recourse debt in a
Chapter 11 case. In re 114 Tenth Ave. Ass'n, Inc., --- B.R. ----,
2010 WL 1253086 (Bankr. S.D.N.Y.) (Gropper, J.).
Unable to vacate a tax lien foreclosure judgment in New York state
court, 114 Tenth Avenue Associates, Inc., sought Chapter 11
protection (Bankr. S.D.N.Y. Case No. 05-60099) on Nov. 10, 2005.
Joel M. Shafferman, Esq. at Schafferman & Feldman, LLP, in
Manhattan, represents the Debtor in its Chapter 11 proceeding. At
the time of the filing, the Debtor estimated assets of $1 million
to $10 million and liabilities of less than $500,000.
155 EAST: Moody's Withdraws 'Ca' Corporate Family Rating
--------------------------------------------------------
Moody's Investors Service has withdrawn the ratings of 155 East
Tropicana LLC for business reasons.
These ratings were withdrawn:
-- Corporate family rating at Ca
-- Probability of default rating at Ca/LD
-- $130 million 8.75% senior secured notes due 2012 rating at C
(LGD5; 72%)
-- SGL-4 Speculative Grade Liquidity rating
-- Negative rating outlook
The last rating action was on May 7, 2009, when Moody's lowered
155 East Tropicana's probability of default rating to Ca/LD from
Ca.
155 East Tropicana LLC owns the Hooters Casino Hotel in Las Vegas,
Nevada. The property is located one-half block from the
intersection of Tropicana Avenue and Las Vegas Boulevard, a major
intersection on the Las Vegas Strip. The Company generated net
revenues of approximately $47 million in 2009.
ABITIBIBOWATER INC: Canadian Court Okays Sale of Mackenzie Assets
-----------------------------------------------------------------
In a vesting order, the Honorable Mr. Justice Clement Gascon
approved the Asset Purchase Agreement dated March 11, 2010,
between Abitibi-Consolidated Company of Canada and 1508756 Ontario
Inc., as vendors; and 0869550 B.C. Ltd., as purchaser, with
respect to these assets located near Mackenzie, in the Province of
British Columbia:
* Two sawmills and two planer mills, including all buildings,
timber concessions, licenses and associated lands, all land
use agreements and permits and all spare parts;
* A newsprint paper mill, including the land on which the
newsprint paper mill is situated, the thermo-mechanical pulp
plant, the steam/power plant, including turbine and boiler
and paper machine assets;
* Current assets and liabilities comprising "net working
capital," which include all inventory and supplies, raw
materials, finished goods and work in process;
* Any remaining mobile and other assets associated with the
sawmills and planer mills; and
* Four corporate residential assets.
The Canadian Court directed that all right, title and interest of
the Vendors in and to the Purchased Assets will vest absolutely
and exclusively in and with the Purchaser, free and clear of and
from any and all liabilities.
Monitor Recommends Sale Approval,
Presents January 4 to 31, 2010 Cash Flow Results
Ernst & Young, Inc., as monitor of the CCAA Proceedings, relates
in its 36th Monitor Report that the Sale forms part of the CCAA
Applicants' restructuring plan, which includes reducing annual
holding costs of $960,000 for closed mills and disposing of
non-strategic assets.
E&Y Senior Vice President Alex Morrison contends that ACCC's
creditors will not be prejudiced as a result of the Sale, since
the proceeds of the Sale will be remitted to the Monitor in a
trust and will stand in the place and stead of the Assets. As a
result, all liens, charges and encumbrances on the Assets will
attach to the Proceeds with the same priority they had
immediately prior to the Sale.
In its 37th Monitor Report, Mr. Morrison apprised the Canadian
Court of the CCAA Applicants' four-week cash flow results for the
period from February 1 to 28, 2010. He noted that newsprint
prices "have partially rebounded from the lows experienced in the
summer of 2009."
As of February 28, 2010, Abitibi-Consolidated Inc. Group's had
cash on hand of approximately $224.7 million. In addition, the
ACI Group also has the ULC DIP Facility totaling $90 million
available as liquidity. The ACI Group also held a total of
$15.4 million in proceeds from sale of Recycling and West Tacoma
assets. The ACI Group's Immediately Available Liquidity for the
13 weeks ending May 30, 2010 is projected to be $230.5 million.
Bowater Canadian Forest Products Inc.'s liquidity as at May 30,
2010 is projected to be approximately $10.5 million, excluding
proceeds from the sale of timberland assets in a sale transaction
with Smurfit-Stone Container Canada Inc.
Full-text copies of E&Y's 36th and 37th Monitor Reports are
available for free at:
http://bankrupt.com/misc/CCAA_36thMonitorReport.pdf
http://bankrupt.com/misc/CCAA_37thMonitorReport.pdf
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: Panel Says Rejection Request Premature
----------------------------------------------------------
The Woodbridge Company Limited, Woodbridge International Holdings
Limited and Woodbridge International Holdings SA have asked Judge
Kevin J. Carey of the United States Bankruptcy Court for the
District of Delaware to compel Debtors Abitibi Consolidated Sales
Corporation and Abitibi-Consolidated Inc. to reject a partnership
agreement dated as of August 17, 1981, as last amended on July 1,
2004, among Woodbridge and its subsidiary Augusta Newsprint Inc.,
ACSC and ACI.
The Official Committee of Unsecured Creditors contends that
Woodbridge's request to compel the Debtors to decide whether to
assume or reject the Partnership Agreement "is premature in light
of the current posture of the [Debtors'] Chapter 11 cases." ACSC
should not be compelled to decide whether to assume or reject the
Partnership Agreement in advance of the confirmation of a plan of
reorganization, Jamie L. Edmonson Esq., at Bayard, P.A., in
Wilmington, Delaware -- jedmonson@bayardlaw.com -- asserts, on
behalf of the Creditors Committee.
"The fundamental error in Woodbridge's argument is that ANI and
Woodbridge have consented to ACSC's assumption of the Partnership
Agreement: the Partnership Agreement itself, as supplemented by a
December 10, 2007 Letter Agreement, contains an express consent to
the assumption of the Partnership Agreement by any direct or
indirect wholly-owned subsidiary of AbitibiBowater in connection
with any future reorganization," Sean T. Greecher, Esq., at Young
Conaway Stargatt & Taylor, LLP, in Wilmington, Delaware, says,
on behalf of the Debtors. Mr. Greecher maintains that
Woodbridge's Motion should be denied as "procedurally improper."
He notes that Woodbridge purports to bring its Motion to Compel
the rejection of the Partnership Agreement under Sections 105(a)
and 365(c)(I) of the Bankruptcy Code, but those provisions do not
provide basis for the Motion. According to Mr. Greecher, the
proper procedure would be for ANI and Woodbridge to seek to compel
ACSC to decide on whether to assume or reject the Partnership
Agreement within a specified period of time under Section
365(d)(2). Although ACSC currently contemplates assuming the
Partnership Agreement as part of the Debtors' as-yet unfiled plan
of reorganization, Section 365(d)(2) affords ACSC until
confirmation of a plan to make that decision, Mr. Greecher
relates. "ACSC [should] not be compelled to make that decision in
isolation now, outside the context of a comprehensive plan of
reorganization," he insists.
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: Shareholders Seek Formation of Equity Panel
---------------------------------------------------------------
Burr Timothy Cooper, Josephine A. Cooper, Matthew J. Resnick and
Peter Sha, as shareholders of AbitibiBowater, Inc., seek the
formation of an official committee of equity security holders in
the Debtors' Chapter 11 cases.
The Shareholders point to a request filed by Elizabeth & Henry
Romero to the U.S. Trustee on March 15, 2010, for the Equity
Committee formation. The Romeros submitted documents reflecting
a thorough analysis of the serious trading problems associated
with the AbitibiBowater common stock including shorting to
manipulate the price and naked short selling. The analysis also
demonstrates the undeniable fact that AbitibiBowater will have
significant equity and remain an ongoing concern upon the
Debtors' emergence from Chapter 11, according to the Coopers.
The Equity Committee will give AbitibiBowater shareholders formal
representation in the reorganization process, the Coopers assert.
"We are just as much stakeholders as union employees, non-union
employees, past employees, Directors and bondholders. While
there is an equal interest, there is not an equal level of
representation," the Coopers say.
"Historically . . . shareholders of a company in bankruptcy have
rarely been given a proper voice in court proceedings," according
to Mr. Resnick.
Pete Shah, a managing member at DPS Trading, LLC, which owns
50,000 shares of AbitibiBowater common stock, seeks to recover
some equity as the Debtors set to emerge from bankruptcy.
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).
ALAMO IRON: Cash Collateral Use, DIP Financing Gets Interim Nod
---------------------------------------------------------------
Alamo Iron Works, Inc., and its units sought and obtained interim
authorization from the Hon. Ronald B. King of the U.S. Bankruptcy
Court for the Western District of Texas to use cash collateral of
PNC Bank, National Association, and to obtain postpetition loans
from PNC.
The total senior secured first priority DIP facility will be
comprised of loans to be advanced and made available to the
Debtors under a revolving credit facility in the aggregate maximum
principal amount of up to $6,500,000.
David S. Gragg, Esq., at Langley & Banack, Incorporated, the
attorney for the Debtors, explains that the Debtors need the money
to refinance the pre-petition revolving credit facility
indebtedness and to fund (i) operating expenses and other amounts
for general corporate and ordinary course purposes of the Debtors,
in accordance with the DIP budget, (ii) current interest and fees
on the DIP facility, and (iii) other administrative payments.
The DIP facility will mature 70 days from the petition date. The
DIP facility will incur interest that will be payable monthly in
arrears in cash on the outstanding amount of the DIP revolving
loans on the first business day of each month at a rate equal to
the Alternate Base Rate plus 3.5% per annum. In the event of
default, the Debtors will pay interest on all outstanding
principal or any other obligation under the DIP facility at 2.0%
above the then applicable interest rate.
The Debtors are required to pay these fees to the DIP Lender:
a. $50 million upon the entry of the interim order;
b. $100 million upon the earlier of the maturity date or the
termination of the DIP facility;
c. a fee on the unused portion of the DIP commitment of 2.0%
per annum, payable monthly;
d. a collateral management fee in the amount of $3,000 in
advance per month until all obligations under the DIP
facility are paid to the DIP Lender; and
e. reimbursement of the reasonable fees and expenses of the
DIP Lender's professionals for so long as the DIP facility
remains unpaid.
The DIP Lender is granted superpriority administrative expense
status. To secure all of the DIP obligations and pre-petition
obligations, the DIP Lender will receive valid, enforceable and
fully perfected first priority security interests in and liens
upon all pre-petition and post-petition assets of the Debtors.
A copy of the DIP agreement is available for free at:
http://bankrupt.com/misc/ALAMO_IRON_dippact.pdf
The Court has set a final meeting for April 29, 2010, at 2:00 p.m.
on the Debtors' request to use cash collateral and obtain DIP
financing.
PNC is represented by Richard Aguilar, Esq.
(raguilar@mcglinchey.com) and Brad J. Axelrod, Esq.
(baxelrod@mcglinchey.com) at McGlinchey Stafford PLLC, and Carol
E. Jendrezey, Esq. (cjendrzey@coxsmith.com) at Cox Smith Mathews
Incorporated.
About Alamo Iron
San Antonio, Texas-based Alamo Iron Works, Inc., filed for Chapter
11 bankruptcy protection on April 5, 2010 (Bankr. W.D. Texas Case
No. 10-51269). David S. Gragg, Esq., at Langley & Banack, Inc,
assists the Company in its restructuring effort. The Company
estimated its assets and debts at $10,000,001 to $50,000,000.
ALTHEIMER & GRAY: 7th Cir. Subordinates Partner's Claim
-------------------------------------------------------
WestLaw reports that the claim of a creditor, who was an employee
but was not a partner of the debtor law firm under Illinois law,
had to be subordinated to the claims of other creditors, under a
plan of reorganization that defined the firm's partners to include
both "Unit Partners" and "Non-Unit Partners" and subordinated the
debts to partners to the debts owed to other creditors, where the
creditor called himself a "non-unit partner" in his claim. The
creditor's claim had been allowed, but an allowed claim was paid
only if it had a high enough priority. Allowance did not have
anything to do with priority. In re Altheimer & Gray, --- F.3d --
--, 2010 WL 1488517 (7th Cir.).
The Seventh Circuit's ruling affirmed prior decisions by the
Honorable Charles R. Norgle, 209 WL 2632240 (N.D. Ill. Case No. 08
C 4999) and the Honorable Carol A. Doyle (Bankr. N.D. Ill. Case
No. 03 B 43547) in 2008, finding and concluding that Mark H.
Berens, Esq., has no rights to a distribution in the Debtor's
chapter 11 case.
Altheimer & Gray was founded 1914 in Chicago, and expanded into
offices in Bratislava, Bucharest, Chicago, Istanbul, Kiev, London,
Prague, San Francisco, Shanghai, Springfield, and Warsaw. After
failing to pay its landlord and other creditors, an involuntary
petition (Bankr. N.D. Ill. Case No. 03-43547) was filed against
the law firm. The Bankruptcy Court confirmed a liquidating
chapter 11 plan in 2005. Under the confirmed plan, Development
Specialists, Inc., was named trustee for the Altheimer & Gray
Creditor Trust.
AMERICAN CAPITAL: CEO Wilkus' 2009 Pay Down From 2007 Level
-----------------------------------------------------------
American Capital Ltd. disclosed in a regulatory filing that it
paid Malon Wilkus, its Chief Executive Officer and Chairman of the
Board of Directors, $7,447,414 in total compensation for 2009.
Mr. Wilkus took home $6,546,850 in 2008 and $21,895,842 in 2007.
Mr. Wilkus receives a $1,495,000 base salary. The bulk of his
take home pay for 2008 and 2007 consisted of stock awards, option
awards and non-equity incentive plan compensation. Mr. Wilkus
received a $429,813 cash bonus in 2007, but none after that. He
received $12,586,692 in stock awards in 2007, $3,215,386 in 2008
and $418,975 in 2009.
Mr. Wilkus founded American Capital in 1986 and has served as our
Chief Executive Officer and Chairman of the Board of Directors
since that time, except for the period from 1997 to 1998 during
which he served as Chief Executive Officer and Vice Chairman of
the Board of Directors. He has also served as the Company's
President from 2001 to 2008 and from 1986 to 1999. In addition,
Mr. Wilkus is the President of American Capital, LLC, the
Company's fund management portfolio company. He is also Chief
Executive Officer, President and Chairman of the Board of
Directors of American Capital Agency Corp.
American Capital also disclosed it did not hand out cash bonuses
in 2009 and 2008 to its other top executives. Those executives
also experienced pay cuts from 2007 levels.
John R. Erickson, the Company's President, Structured Finance and
Chief Financial Officer, was paid $4,164,700 for 2009, $3,754,303
in 2008 and $12,261,626 in 2007.
Ira J. Wagner, the President for European Private Finance, was
paid $3,608,726 in 2009, $3,675,062 in 2008 and $12,261,626 in
2007.
Samuel A. Flax, the Executive Vice President, General Counsel,
Chief Compliance Officer and Secretary, was paid $3,599,344 in
2009 and $3,161,745 in 2008.
Gordon J. O'Brien, President for Specialty Finance and Operations,
received $3,631,376 in 2009, $2,771,443 in 2008 and $8,900,999 in
2007.
Proposed Restructuring & Lock Up Agreement
The lenders under American Capital's revolving credit agreement
agreed to extend the termination event date under a Lock Up
Agreement involving the credit agreement to May 31, 2010. The
Company and each of the lenders under the credit agreement entered
into the Lock Up Agreement, which, among other things, provides
that the parties will support an out-of-court restructuring of the
loans outstanding under the credit agreement and of the Company's
private and public unsecured notes. The parties may terminate the
Lock Up Agreement if certain events do not occur by the
termination event date. By agreement between the Company and the
administrative agent under the credit agreement, the termination
event date may be extended to June 30, 2010.
Since December 31, 2008, American Capital has been in breach of
financial covenants under its primary unsecured debt arrangements
totaling $2.4 billion as of December 31, 2009. Through the course
of 2009, the Company has had active discussions with the creditors
under the arrangements to negotiate a comprehensive restructuring
of its unsecured debt. In November 2009, the Company reached an
agreement in principle with a steering committee of the lenders
under its unsecured revolving credit facility with respect to the
material terms of a proposed restructuring of the Credit Facility,
which also required that the Company's other primary unsecured
debt arrangements be restructured on generally similar terms.
Under the current terms of the proposed Restructuring, the loans
outstanding under the Credit Facility and the Company's private
unsecured notes and public unsecured notes would be exchanged for
term debt secured by a pledge of substantially all of the
Company's unencumbered assets. Key terms of the proposed
Restructuring include (i) an aggregate $450 million principal
payment at closing, (ii) scheduled aggregate principal
amortization of $250 million in 2010, $300 million in 2011,
$350 million in 2012, and $300 million in 2013 with any remaining
unpaid principal due at maturity on December 31, 2013,
(iii) deferral through 2013 of up to $200 million in the aggregate
of annual scheduled principal amortization, which is limited to
$100 million in 2010, (iv) an interest rate of the greater of
2.00% or LIBOR, plus a spread based on the aggregate outstanding
principal balance of (a) 9.50% if the outstanding obligations are
greater than or equal to $1.7 billion, (b) 8.50% if the
outstanding obligations are less than $1.7 billion but greater
than or equal to $1.4 billion, (c) 6.50% if the outstanding
obligations are less than $1.4 billion but greater than or equal
to $1.0 billion, or (d) 5.50% if the outstanding obligations are
less than $1.0 billion, (v) an additional interest spread of 0.50%
each time that certain additional principal amortizations, which
are greater than the scheduled principal amortizations noted
above, are not met, (vi) an additional 1.00% if we defer any
portion of the scheduled principal amortization due in 2010, and
(vii) the payment of fees equal to 2.00% of the aggregate
principal balance at closing, and 1.00% at both December 31, 2011
and 2012.
The proposed Restructuring contemplates that there will be a
voluntary amendment and restatement of the Credit Facility and an
exchange of the unsecured private notes and unsecured public notes
for new securities. In the event that fewer than 100% of the
lenders under the Company's Credit Facility, fewer than 100% of
the holders of the Company's private unsecured notes and holders
of less than 85% of the principal amount of the Company's public
unsecured notes agree to enter the Exchange Transaction, the
Company intends to implement the proposed Restructuring by
soliciting votes for a prepackaged reorganization under Chapter 11
of the Bankruptcy Code and commence a voluntary reorganization
case under the Bankruptcy Code.
About American Capital
Based in Bethesda, Maryland, American Capital Ltd. (Nasdaq: ACAS)
-- http://www.americancapital.com/-- is a publicly traded private
equity firm and global asset manager. American Capital, both
directly and through its asset management business, originates,
underwrites and manages investments in middle market private
equity, leveraged finance, real estate and structured products.
Founded in 1986, American Capital has $13 billion in capital
resources under management and eight offices in the U.S., Europe
and Asia.
The Company's balance sheet as of Dec. 31, 2009, showed
$6.67 billion in assets, $4.34 billion of debts, and $2.33 billion
in stockholders' equity.
Ernst & Young Llp, in McLean Virginia, expressed substantial doubt
about the Company's ability to continue as a going concern. The
independent auditors reported that the Company has incurred net
losses of $910 milion and $3.11 billion for the years ended
December 31, 2009 and December 31, 2008, respectively. In
addition, the Company has received default notices from certain
lenders and noteholders for its non-compliance with certain
covenants of its unsecured borrowing arrangements, and the Company
is generally restricted from issuing any new debt because it has
not met the 200% minimum asset coverage requirement under the
Investment Company Act of 1940.
AMERICAN CAPITAL: Sells $295MM in Shares; Paulson Gets 13% Stake
----------------------------------------------------------------
American Capital, Ltd., is selling $295 million in shares of
common stock in a registered direct offering to a group of
institutional investors. The Company has entered into
subscription agreements with the investors to sell an aggregate
58.3 million shares of American Capital's common stock, including
43.725 million shares to funds and accounts managed by Paulson &
Co. Inc., at $5.06 per share. The offering is expected to close
April 22, 2010, subject to the satisfaction of customary closing
conditions.
On April 16, 2010, the closing price of the Company's common stock
on The NASDAQ Global Select Market was $5.33 per share.
The offering will be made under American Capital's existing shelf
registration statement, filed with and declared effective by the
Securities and Exchange Commission. American Capital expects to
use substantially all of the net proceeds of approximately $295
million for general corporate purposes, including for the
Company's investment and lending activities and to repay
indebtedness owed under its existing unsecured debt obligations.
Reuters reports that Paulson is buying about a 13% stake in
American Capital. Following the closure of the share transaction,
Paulson will become the largest shareholder in American Capital,
according to Thomson Reuters data.
A full-text copy of the Company's prospectus supplement is
available at no charge at http://ResearchArchives.com/t/s?6067
Proposed Restructuring & Lock Up Agreement
The lenders under American Capital's revolving credit agreement
agreed to extend the termination event date under a Lock Up
Agreement involving the credit agreement to May 31, 2010. The
Company and each of the lenders under the credit agreement entered
into the Lock Up Agreement, which, among other things, provides
that the parties will support an out-of-court restructuring of the
loans outstanding under the credit agreement and of the Company's
private and public unsecured notes. The parties may terminate the
Lock Up Agreement if certain events do not occur by the
termination event date. By agreement between the Company and the
administrative agent under the credit agreement, the termination
event date may be extended to June 30, 2010.
Since December 31, 2008, American Capital has been in breach of
financial covenants under its primary unsecured debt arrangements
totaling $2.4 billion as of December 31, 2009. Through the course
of 2009, the Company has had active discussions with the creditors
under the arrangements to negotiate a comprehensive restructuring
of its unsecured debt. In November 2009, the Company reached an
agreement in principle with a steering committee of the lenders
under its unsecured revolving credit facility with respect to the
material terms of a proposed restructuring of the Credit Facility,
which also required that the Company's other primary unsecured
debt arrangements be restructured on generally similar terms.
Under the current terms of the proposed Restructuring, the loans
outstanding under the Credit Facility and the Company's private
unsecured notes and public unsecured notes would be exchanged for
term debt secured by a pledge of substantially all of the
Company's unencumbered assets. Key terms of the proposed
Restructuring include (i) an aggregate $450 million principal
payment at closing, (ii) scheduled aggregate principal
amortization of $250 million in 2010, $300 million in 2011,
$350 million in 2012, and $300 million in 2013 with any remaining
unpaid principal due at maturity on December 31, 2013,
(iii) deferral through 2013 of up to $200 million in the aggregate
of annual scheduled principal amortization, which is limited to
$100 million in 2010, (iv) an interest rate of the greater of
2.00% or LIBOR, plus a spread based on the aggregate outstanding
principal balance of (a) 9.50% if the outstanding obligations are
greater than or equal to $1.7 billion, (b) 8.50% if the
outstanding obligations are less than $1.7 billion but greater
than or equal to $1.4 billion, (c) 6.50% if the outstanding
obligations are less than $1.4 billion but greater than or equal
to $1.0 billion, or (d) 5.50% if the outstanding obligations are
less than $1.0 billion, (v) an additional interest spread of 0.50%
each time that certain additional principal amortizations, which
are greater than the scheduled principal amortizations noted
above, are not met, (vi) an additional 1.00% if we defer any
portion of the scheduled principal amortization due in 2010, and
(vii) the payment of fees equal to 2.00% of the aggregate
principal balance at closing, and 1.00% at both December 31, 2011
and 2012.
The proposed Restructuring contemplates that there will be a
voluntary amendment and restatement of the Credit Facility and an
exchange of the unsecured private notes and unsecured public notes
for new securities. In the event that fewer than 100% of the
lenders under the Company's Credit Facility, fewer than 100% of
the holders of the Company's private unsecured notes and holders
of less than 85% of the principal amount of the Company's public
unsecured notes agree to enter the Exchange Transaction, the
Company intends to implement the proposed Restructuring by
soliciting votes for a prepackaged reorganization under Chapter 11
of the Bankruptcy Code and commence a voluntary reorganization
case under the Bankruptcy Code.
About American Capital
Based in Bethesda, Maryland, American Capital Ltd. (Nasdaq: ACAS)
-- http://www.americancapital.com/-- is a publicly traded private
equity firm and global asset manager. American Capital, both
directly and through its asset management business, originates,
underwrites and manages investments in middle market private
equity, leveraged finance, real estate and structured products.
Founded in 1986, American Capital has $13 billion in capital
resources under management and eight offices in the U.S., Europe
and Asia.
The Company's balance sheet as of Dec. 31, 2009, showed
$6.67 billion in assets, $4.34 billion of debts, and $2.33 billion
in stockholders' equity.
Ernst & Young Llp, in McLean Virginia, expressed substantial doubt
about the Company's ability to continue as a going concern. The
independent auditors reported that the Company has incurred net
losses of $910 milion and $3.11 billion for the years ended
December 31, 2009 and December 31, 2008, respectively. In
addition, the Company has received default notices from certain
lenders and noteholders for its non-compliance with certain
covenants of its unsecured borrowing arrangements, and the Company
is generally restricted from issuing any new debt because it has
not met the 200% minimum asset coverage requirement under the
Investment Company Act of 1940.
AMERICAN INT'L: Mulls Action Against Goldman Over CDO Losses
------------------------------------------------------------
The Financial Times' Francesco Guerrera in New York and Brooke
Masters in London report that American International Group is
considering pursuing Goldman Sachs over losses incurred on
$6 billion of insurance deals on mortgage-backed securities
similar to the one that led to fraud charges against Goldman.
According to the FT, people close to the situation said AIG was
reviewing deals to insure $6 billion-worth of Goldman's
collateralized debt obligations in the run-up to the crisis.
Sources also told the FT that AIG had yet to decide whether to
take action. AIG and Goldman declined to comment.
The FT recalls that, according to people close to the situation,
under a deal struck by AIG and Goldman in 2009, Goldman agreed to
cancel the insurance on some $3 billion-worth of CDOs in exchange
for keeping collateral worth about $2 billion. According to the
FT, AIG is believed to have recorded a loss of about $2 billion.
The report also notes that the CDOs being reviewed by AIG are part
of a family of securities known as Abacus.
The FT also adds that AIG's move over the Goldman deals is a sign
that the decision by the Securities and Exchange Commission to
file civil fraud charges against Goldman could spark actions from
investors who lost money on mortgage-backed securities. The FT
notes that the SEC's complaint is focusing on one of the Abacus
deals that is not among the securities insured by AIG.
About AIG
Based in New York, American International Group, Inc., is an
international insurance organization with operations in more than
130 countries and jurisdictions. AIG companies serve commercial,
institutional, and individual customers through one of the most
extensive worldwide property-casualty networks of any insurer. In
addition, AIG companies provide life insurance and retirement
services around the world. AIG common stock is listed on the New
York Stock Exchange, as well as the stock exchanges in Ireland and
Tokyo.
In September 2008, AIG experienced a liquidity crunch when its
credit ratings were downgraded below "AA" levels by Standard &
Poor's, Moody's Investors Service and Fitch Ratings. On September
16, 2008, the Federal Reserve Bank created an
$85 billion credit facility to enable AIG to meet increased
collateral obligations consequent to the ratings downgrade, in
exchange for the issuance of a stock warrant to the Fed for 79.9%
of the equity of AIG. The credit facility was eventually
increased to as much as $182.5 billion.
AIG has sold a number of its subsidiaries and other assets to pay
down loans received from the U.S. government, and continues to
seek buyers of its assets.
AMERICAN SEAFOODS: S&P Affirms Corporate Credit Rating at 'B'
-------------------------------------------------------------
Standard & Poor's Ratings Services said that it affirmed its 'B'
corporate credit rating on Seattle, Wash.-based American Seafoods
Group LLC. The outlook is stable.
In addition, S&P assigned a 'BB-' issue-level rating and '1'
recovery rating, which indicates S&P's expectation of very high
(90% to 100%) recovery for debt holders in the event of payment
default, on the senior secured credit facility. S&P also assigned
a 'B' issue-level rating and '4' recovery rating on the senior
subordinated notes, which indicates S&P's expectation of average
(30% to 50%) recovery for debt holders in the event of payment
default.
The rating action followed the company's announcement that it
plans to refinance its capital structure with a $475 million
senior secured credit facility, which is comprised of a proposed
$85 million revolver and $390 million term loan; $275 million
senior subordinated notes; and $125 million Holdco PIK notes (not
rated) that will be used to repay existing term debt and notes.
"The ratings on ASG reflect the company's high leverage,
aggressive financial policy, and participation in the competitive,
commodity-oriented commercial fishing industry," said Standard &
Poor's credit analyst Christopher Johnson. ASG has the leading
position as the largest and lowest-cost producer in the industry,
along with a proven track record for operating under the highly
regulated environment
ASG is a vertically integrated seafood harvesting, processing, and
marketing company, operating catcher-processor vessels which
participate in the largest commercial fishery in U.S. waters. The
company's products are subject to supply and demand vagaries that
can affect financial performance. ASG's strong position in the
U.S. Bering Sea Pollock fishery and regulatory support under the
American Fisheries Act, which became permanent federal law in
2001, somewhat mitigate these concerns. The AFA created a more
rational, stable, and profitable operating environment by limiting
the number of vessels operating in the fishery, which reduces some
of ASG's operating risk. Still, the company's ability to expand
its core pollock harvesting operations, either through the
purchase of quota or through legislative change, remains a key
rating consideration.
The stable outlook reflects S&P's expectation that operating
performance will gradually improve as TAC levels return to
historical average levels and prices rebound over the next few
years. Although leverage should remain high, S&P expects the
company to maintain adequate covenant cushion in its credit
facility over the near term. S&P could consider lowering the
ratings if covenant cushion levels decrease to less than 10%. S&P
estimates this could occur if EBITDA declines 16% (assuming debt
levels do not materially change from post-refinancing levels).
Alternatively, although unlikely in the near term, S&P could
consider raising the rating if the company can improve and sustain
debt leverage below 5.5x, which S&P estimates could occur if
EBITDA increases 38% (assuming debt levels do not materially
change from post-refinancing levels).
ANGEL AND BELL: Case Summary & 9 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Angel and Bell Corporation
12910 Seneca Road
Palos Heights, IL 60463
Bankruptcy Case No.: 10-17365
Chapter 11 Petition Date: April 19, 2010
Court: United States Bankruptcy Court
Northern District of Illinois (Chicago)
Judge: Bruce W. Black
Debtor's Counsel: Thomas W. Drexler, Esq.
Law Office of Thomas W. Drexler
77 W Washington
Suite 1910
Chicago, IL 60602
Tel: (312) 726-7335
Fax: (312) 263-0430
E-mail: drexler321@aol.com
Scheduled Assets: $1,800,031
Scheduled Debts: $1,968,374
A list of the Company's 9 largest unsecured creditors is
available for free at http://bankrupt.com/misc/ilnb10-17365.pdf
The petition was signed by Dr. Benjamin C. Guzman, president.
ANNA NICOLE SMITH: Estate Asks for En Banc Rehearing
----------------------------------------------------
Bill Rochelle at Bloomberg News reports that the lawyer for the
estate of Anna Nicole Smith filed a motion asking all the active
judges before the 9th U.S. Circuit Court of Appeals to conduct a
rehearing of her lawsuit against the estate of Texas billionaire
J. Howard Marshall.
In March, a panel of three judges ruled that Ms. Smith, formally
known as Vickie Lynn Hogan, is entitled to nothing from the estate
of Mr. Marshall, her deceased husband.
Ms. Smith married Mr. Marshall in 1994 when she was 26. She filed
under Chapter 11 in 1996 as part of a struggle over the estate of
Mr. Marshall, who died barely a year after they were wed. She
died in February 2007.
According to Bloomberg, in 2000, the bankruptcy judge awarded Ms.
Smith $449 million from the estate arising from a counterclaim she
filed in bankruptcy court in a lawsuit by one of Mr. Marshall's
sons. The 9th U.S. Circuit appeals court in San Francisco threw
out the judgment in 2004, holding that the bankruptcy court didn't
have jurisdiction over probate matters. The U.S. Supreme Court in
May 2006 issued a decision, overruling the federal appeals court
and finding that the bankruptcy court had jurisdiction, even
though the issues also could have been decided in the Texas
probate court.
The Supreme Court remanded the case for the federal appellate
court to decide whether her victory in the bankruptcy and district
courts was knocked out because a Texas probate court had entered
judgment first against her. On remand from the Supreme Court, the
9th Circuit issued its decision on March 19, concluding that the
bankruptcy court didn't have so-called core jurisdiction. The 9th
Circuit noted that before the U.S. district court was able to
enter judgment in her favor, the Texas probate court had entered
judgment against her saying she was entitled to nothing from her
deceased husband's estate.
The case is Marshall v. Stern (In re Vickie Lynn Marshall),
9th U.S. Circuit Court of Appeals (San Francisco).
ARTISAN HOTEL: Court OKs Limiting Cash Collateral Use
-----------------------------------------------------
The Hon. Mike K. Nakagawa of the U.S. Bankruptcy Court for the
District of Nevada approved, at the behest of The Artisan Hotel &
Spa, LLC, a stipulated order limiting the use of cash collateral
and providing secured creditor, The Citizens Bank of Oregon,
Missouri, with adequate protection.
David J. Winterton, Esq., at David J. Winterton & Associates,
Ltd., the attorney for the Debtor, explained that the Debtor
sought the Court's permission to use cash collateral.
In May 2007, the Bank lent the Debtor about $6 million. The Debtor
signed a Note and a Deed of Trust securing the Note. It also
included an Assignment of Leases and Rent. In November 2008, the
Bank caused a Notice of Default and Election to Sell under Deed of
Trust to be recorded against the property of the Debtor. In
February 2008, the Bank lent the Debtor some $1.8 million in the
form of a Note secured by a Second Deed of Trust. It also
included an Assignment of Leases and Rent.
The Debtor and the Bank worked out a stipulation order limiting
the use of cash collateral and providing the Bank with adequate
protection and conditioning the automatic stay.
The Debtor and the Bank agreed that the Bank has a validly
perfected first-priority security interest in the Debtor's rents,
issues and profits, which include hotel rents. The Bank's
security interest in the Debtor's rents, issues and profits, which
includes hotel rents and revenues, extends to those rents, issues,
profits and hotel rents generated by the Debtor's business after
the Petition Date.
More information on the stipulated order is available for free at:
http://bankrupt.com/misc/ARTISAN_HOTEL_cashcollmotion.pdf
The Citizens Bank of Oregon, Missouri, is represented by Bob L.
Olson, Esq., and Anne M. Loraditch, Esq., at Greenberg Traurig,
LLP.
The Artisan Hotel & Spa LLC -- http://www.theartisanhotel.com/ --
operates the Artisan Hotel & Spa in Las Vegas, Nevada.
The Company filed for Chapter 11 protection on Dec. 9, 2008
(Bankr. D. Nev. Case No. 08-24684). David J. Winterton, Esq., at
David J. Winterton & Assoc. Ltd., represented the Debtor in its
restructuring effort. In its petition, the Debtor posted assets
of between $10 million and $50 million, and debts of between
$1 million and $10 million.
ASG CONSOLIDATED: Moody's Cuts Corporate Family Rating to 'B2'
--------------------------------------------------------------
Moody's Investors Service has downgraded the corporate family
rating of ASG Consolidated LLC to B2 from B1. At the same time,
Moody's assigned a Ba3 rating to the proposed senior credit
facility and a B3 rating to the proposed senior subordinated notes
of American Seafoods Group LLC, a wholly owned subsidiary of ASG
Consolidated LLC, pending the completion of ASG's recently
proposed balance sheet refinancing. The ratings outlook is
stable. This action completes the review for possible downgrade
initiated on August 26, 2009.
Proceeds from the issuance of the proposed $390 million senior
secured term loan, $275 million senior subordinated notes and
unrated $125 million Holdco Note (issued at ASG Consolidated LLC)
coupled with borrowings under the proposed $85 million senior
secured revolver are expected to be used to refinance all of the
outstanding debt of ASG, preferred units and transaction related
fees.
The downgrade of the corporate family rating to B2 reflects ASG's
high leverage and weakened operating performance. ASG's
performance continues to be hampered by historically low Total
Allowable Catch levels in the U.S. Bering Sea pollock fishery in
2009 and 2010 as well as weak market pricing for certain fish
products. As a result of these challenges, ASG's financial
leverage and interest coverage metrics have deteriorated
meaningfully from historical norms for the company and are not
expected to be restored over the near term.
Despite its high leverage and heavy interest burden, the B2 rating
reflects the favorable regulatory environment for the pollock
fishing industry, which currently ensures ASG a market leading
share of the TAC in the U.S. Bering Sea pollock fishery. Further,
ASG's high margins and solid cash conversion is expected to
support the company's adequate liquidity profile over the next
twelve months.
These ratings were downgraded:
ASG Consolidated LLC
* Corporate family rating to B2 from B1
* Probability of default rating to B2 from B1; and
* Exisisting $251 million 11.5% senior discount notes due 2011 to
Caa1 (LGD5, 86%) from B3 (LGD5, 87%)
American Seafoods Group LLC
* Existing $75 million senior secured revolving credit expiring in
2011, and senior secured Term Loan A and Term Loan B to B1
(LGD3, 33%) from Ba3 (LGD3,33%)
These ratings were assigned at American Seafoods Group LLC:
* Ba3 (LGD2, 24%) to the proposed $85 million senior secured
revolver due 2015
* Ba3 (LGD2, 24%) to the proposed $390 million senior secured term
loan due 2015; and
* B3 (LGD5, 72%) to the proposed $275 million senior subordinated
notes due 2016.
Upon completion of the refinancing, Moody's will move the
corporate family rating and probability of default rating to
American Seafoods Group LLC from ASG Consolidated LLC and withdraw
the ratings on the existing credit facility and senior discount
notes.
Headquartered in Seattle, Washington, ASG is one of the world's
largest integrated seafood companies, harvesting and processing
primarily Pollock, Pacific whiting and cod. At-sea operations are
concentrated in the U.S. Bering Sea. ASG's revenues in 2009 were
$429 million.
ASPECT SOFTWARE: Moody's Upgrades Corporate Family Rating to 'B2'
-----------------------------------------------------------------
Moody's Investors Service upgraded Aspect Software, Inc.'s
corporate family rating to B2 from B3 pending closing of their
proposed new debt facilities. Ratings on the new facilities are
listed below. The upgrade is driven by the improved financial
covenant cushion and extended maturity of the new debt as well as
strong cash flow generation through the downturn and expectation
of improving performance in 2010. The existing B3 rating and
existing debt ratings will remain in effect until the transaction
closes. The outlook is stable.
The new debt facilities have greater cushion under their financial
covenants than the previous facilities. Covenant levels of
Aspect's existing debt were continuing to step down making
compliance increasingly difficult. Maturities have also been
pushed out to May 2014 from September 2010 for the revolver and to
May 2016 from July 2011 for the new first lien term loan.
Aspect's revenues declined significantly in 2008 and 2009 but
began showing some signs of improvement in Q4 2009. Industry
analysts expect some modest demand growth in the sector in 2010
which should also benefit Aspect.
The B2 rating reflects the company's still relatively high
leverage levels at a time when the contact center industry is
evolving. Contact center software is evolving to become an
integrated piece of larger integrated voice and data networks and
Aspect will continue to face challenges as much larger voice
equipment and system suppliers such as Cisco and Avaya bundle low
cost contact center software with their system sales. Aspect
continues to have well regarded contact center expertise and
recent partnering with Microsoft on their Unified Communications
platform may help to offset threats from the larger system
players. Leverage pro forma for the transaction is expected to be
approximately 5x. The ratings are also bolstered by the company's
strong cash generating capabilities and history of debt repayment.
The company generated approximately $116 million of free cash flow
in fiscal 2009, up from $73 million in 2008 during a period when
sales declined 12% driven by cost cutting and working capital
improvements. The company used the free cash flow as well as cash
on hand to reduce debt by over $150 million during this period.
Future cash flows are expected to be reduced from these
exceptional levels due to increased interest expense on the new
debt and an increase in tax rates (due to a run off of NOL's) and
one time nature of 2009's working capital improvements.
The stable ratings outlook reflects Moody's expectation that
performance will improve modestly and the company will continue to
generate sufficient levels of free cash flow to reduce leverage.
These ratings will be changed at closing of the transaction:
* Corporate family rating to B2 from B3
* Probability of default to B2 from B3
These ratings will be assigned at closing:
* $30 million senior secured revolving facility due 2013 -- Ba3,
LGD2, 27%
* $500 million senior secured term loan B due 2015 -- Ba3, LGD2,
27%
* $300 million second lien notes due 2016 -- to Caa1, LGD5 81%
These ratings will be withdrawn at closing:
* $50 million senior secured revolving facility due 2010 -- B1,
LGD2, 28%
* $396 million ($725 million original amount) first lien term loan
due 2011 -- B1, LGD2 28%
* $385 million second lien term loan due 2012 -- Caa2, LGD5 82%
The ratings outlook is stable
Moody's most recent rating action on Aspect was January 20, 2009,
when Moody's downgraded Aspect's corporate family ratings to B3.
Aspect Software Inc., headquartered in Chelmsford, Massachusetts,
develops, markets, licenses and supports an integrated suite of
contact center software applications.
ASPECT SOFTWARE: S&P Upgrades Rating to 'B' on Refinancing
----------------------------------------------------------
On April 16, 2010, U.S. contact-center software provider Aspect
announced a proposed transaction to refinance its existing credit
facilities.
The refinancing provides significant covenant schedule relief and
extends Aspect's term loan maturities to 2016.
S&P is raising Aspect's corporate credit rating to 'B' and
revising its outlook to stable from developing.
S&P is assigning a 'B+' rating to the proposed $530 million first-
lien senior secured credit facility and a 'B-' rating to the
proposed $300 million second-lien senior secured credit facility.
The stable outlook reflects Aspect's stabilized performance and
good covenant cushion.
ATRIUM CORP: Sets Financing Guidelines for Exit Loan
----------------------------------------------------
Bill Rochelle at Bloomberg News reports that Atrium Corp. set
initial pricing guidelines on the new debt to provide part of the
financing to exit bankruptcy. In March, the bankruptcy court
approved a $169.2 million investment to buy 92.5% of the equity
upon Atrium's exit from Chapter 11 with a confirmed reorganization
plan. The confirmation hearing for approval of the Chapter 11
plan, negotiated before the bankruptcy filing in January, is set
for April 28.
About Atrium Companies
Atrium Companies, Inc. -- http://www.atrium.com/-- manufactures
residential vinyl and aluminum windows and patio doors in North
America.
Atrium and its U.S. subsidiaries filed voluntary Chapter 11
petitions with the U.S. Bankruptcy Court in Delaware on
January 20, 2010 (Bankr. D. Del. Case No. 10-10150). The
Company's Canadian subsidiary also initiated reorganization
proceedings under the Companies' Creditors Arrangement Act (CCAA)
in the Ontario Superior Court of Justice in Toronto. The Chapter
11 petition says that debts range from $100 million to
$500 million. The Company's legal advisors are Kirkland & Ellis
in the U.S. and Goodmans LLP in Canada. Moelis & Company is
serving as financial advisor. Garden City Group Inc. serves as
claims and notice agent.
AVENTINE RENEWABLE: Former White Energy Exec. Named CFO
-------------------------------------------------------
Aventine Renewable Energy Holdings, Inc., has named John Castle to
serve as its Chief Financial Officer, effective April 15, 2010.
Before joining Aventine, Mr. Castle served as Senior Vice
President of Operations and Chief Financial Officer of White
Energy, Inc., an ethanol production company. Mr. Castle is a
Certified Public Accountant with a Masters of Business
Administration from Xavier University and a Bachelor of Science in
Accounting from Eastern Illinois University.
"Mr. Castle's background facilitating the successful turnaround of
organizations coupled with his intimate knowledge of the ethanol
industry makes him ideally suited for his role as Chief Financial
Officer of Aventine," stated Thomas Manuel, Aventine's Chief
Executive Officer. "He is an outstanding financial executive with
practical operating experience. Adding Mr. Castle to the Aventine
executive group augments our assembling one of the most
experienced leadership teams in the industry."
About Aventine Renewable
Pekin, Illinois-based Aventine Renewable Energy Holdings, Inc.
(Pink Sheets: AVRN) -- http://www.aventinerei.com/-- is a
producer and marketer of ethanol to many leading energy companies
in the United States. In addition to ethanol, Aventine also
produces distillers grains, corn gluten meal, corn gluten feed,
corn germ and brewers' yeast.
Morgan Stanley Capital Partners IV bought Aventine in May 2003
from Williams Cos. Aventine had a public offering in May 2006.
The Morgan Stanley group retained 28% of the stock at year's end.
The Company and its affiliates filed for Chapter 11 on April 7,
2009 (Bankr. D. Del. Lead Case No. 09-11214). Joel A. Waite,
Esq., and Ryan M. Bartley, Esq., at Young, Conaway, Stargatt &
Taylor, serves as bankruptcy counsel to the Debtors. Davis Polk
& Wardwell is special tax counsel and Houlihan, Lokey, Howard &
Zukin, Inc., is the financial advisor. Garden City Group, Inc.,
has been engaged as claims agent. Scott D. Cousins, Esq., and
Donald J. Detweiler, Esq., at Greenberg Traurig, LLP, serve as
counsel to the official committee of unsecured creditors. When it
filed for bankruptcy protection from its creditors, Aventine
Renewable listed between $100 million and $500 million each in
assets and debts.
The Court confirmed on February 24, 2010, the Company's plan of
reorganization. The Company emerged from Chapter 11 on March 15,
2010.
BARZEL INDUSTRIES: To Decide If Liquidating Plan Is 'Feasible'
--------------------------------------------------------------
Bill Rochelle at Bloomberg News reports that Barzel Industries
Inc. for a second time sought an extension of the exclusive right
to propose a liquidating Chapter 11 plan. The Company said it
would use the additional time to determine whether "a liquidating
plan is feasible or not." The hearing will be held May 12.
Bloomberg recounts that Barzel sold the assets in November and
made a settlement where secured lenders received a release of
claims in return for giving up $800,000 from sale proceeds.
Chriscott USA Inc., based in Norwood, Massachusetts, bought most
of the assets for $75 million. Barzel had 15 facilities.
About Barzel Industries
Norwood, Massachusetts-based Barzel Industries, Inc., processes
and distributes steel. The Company manufactures steel for the
construction and industrial manufacturing industries, and produces
finished commercial racking products.
Barzel recorded assets of $370,145,000 against debts of
$375,412,000 as of May 30, 2009.
Barzel Industries -- aka Novamerican Steel Inc. and Symmetry
Holdings Inc. -- and seven affiliates filed for Chapter 11 on
September 15, 2009 (Bankr. D. Del. Case No. 09-13204). Judge
Christopher S. Sontchi presides over the cases. J. Kate Stickles,
Esq., at Cole, Schotz, Meisel, Forman & Leonard, in Wilmington,
Delaware, and Karen M. McKinley, Esq., and Norman L. Pernick,
Esq., at Cole Scholtz Meisel Forman Leonard, P.A., in Wilmington,
Delaware, serve as legal counsel.
On the same day, the Company filed applications for relief under
the Canadian Companies' Creditors Arrangement Act in the Ontario
Superior Court of Justice -- Commercial List.
Barzel Industries and substantially all of its U.S. and Canadian
subsidiaries have an Asset Purchase Agreement with Chriscott USA
Inc. and 4513614 Canada Inc. pursuant to which the Buyer will
purchase substantially all of the assets of the Sellers for
$65.0 million in cash, subject to certain adjustments, and assume
certain liabilities from the Sellers associated with the purchased
assets. The deal is subject to approval by both U.S. and Canadian
Courts.
BEAZER HOMES: Fitch Affirms 'CCC' Issuer Default Ratings
--------------------------------------------------------
Fitch Ratings has affirmed Beazer Homes USA, Inc.'s ratings:
-- Issuer Default Rating at 'CCC';
-- Secured revolving credit facility at 'B+/RR1';
-- Second lien secured notes at 'B+/RR1';
-- Senior unsecured notes at 'CC/RR5';
-- Convertible senior notes at 'CC/RR5';
-- Convertible subordinated notes at 'C/RR6';
-- Junior subordinated debt at 'C/RR6'.
The Rating Outlook is Stable.
The Recovery Rating of 'RR1' on Beazer's secured credit revolving
credit facility and second-lien secured notes indicates
outstanding recovery prospects for holders of these debt issues.
The 'RR5' on Beazer's senior unsecured notes indicates below-
average recovery prospects for holders of these debt issues.
Beazer's exposure to claims made pursuant to performance bonds and
joint venture debt and the possibility that part of these
contingent liabilities would have a claim against the company's
assets were considered in determining the recovery for the
unsecured debtholders. The 'RR6' on the company's mandatory
convertible subordinated notes and junior subordinated notes
indicates poor recovery prospects for holders of these debt issues
in a default scenario. Fitch applied a liquidation value analysis
for these RRs.
The ratings and Outlook for Beazer reflect the company's healthy
liquidity position, moderately improved prospects for the housing
sector this year, but still substantial indebtedness. The company
ended its 2010 first quarter (ended Dec. 31, 2009) with
unrestricted cash of $432.7 million. The company also recently
filed an application for a federal income tax refund of
approximately $101 million as a result of the tax legislation
enacted in November 2009. In January 2010, the company completed
an equity offering of 22.4 million shares and the issuance of
$57.5 million of convertible senior notes. The company received
net proceeds of $153.8 million from the offerings, including the
full exercise of over-allotment option for each offering, after
underwriting discounts and commissions. Proceeds from these
offerings were used to redeem $127.3 million of senior notes due
May 15, 2011. Following the redemption of these notes, Beazer
will not have any major debt maturities until April 2012, when
$304 million of senior notes become due. (Note: Holders of
Beazer's $154.5 million convertible senior notes have the right to
require the company to purchase all or any portion of this debt
issue for cash on June 15, 2011.)
The company reported revenues of $218.8 million during the first
quarter of 2010 (1Q'10), flat compared to the same period last
year. Total deliveries increased 8% while the average sales price
fell 8.8% during the quarter. Gross margins, excluding impairment
charges, improved 160 basis points to 12.9% during the first
quarter. SG&A expenses as a percentage of sales remain elevated
at 20.9% during the 1Q'10 but are lower than the 24.7% recorded
last year. Beazer reported a pre-tax loss of $49.5 million during
the 1Q'10, which included $8.8 million of inventory impairment
charges. The pre-tax loss for the 1Q'09 was $81.1 million,
including $12.4 million of inventory impairment charges. Net
orders for the quarter increased 36.6% to 728 homes and the
company had 960 homes in backlog with a value of $232.3 million at
the end of the first quarter. Cancellation rates improved to
26.9% during the 1Q'10 from 46.1% last year and 34.7% during the
prior quarter.
Housing apparently bottomed during 2009, and a so far anemic
recovery has begun. During the next 12-15 months off the bottom,
the recovery may appear jaw-toothed as substantial foreclosures
now in the pipeline present as distressed sales and as meaningful
new foreclosures arise from Alt-A and option ARM resets. High
unemployment rates and the tightening of certain Federal Housing
Administration loan standards will be notable headwinds early in
the upcycle. The continuation and expansion of the scope of the
national housing credit may boost sales in spring of this year.
Also the Federal government's continuing efforts to modify
foreclosures may finally show some success in 2010.
Beazer generated cash flow from operations of negative $59.3
during the 1Q'10. Cash flow from operations totaled
$146.4 million for the latest 12 months from Dec. 31, 2009. For
all of fiscal 2010, Fitch expects Beazer to be cash flow negative,
excluding the expected second-quarter tax refund of $101 million,
as the company starts to rebuild its land position (through land
purchases and development spending).
Beazer amended its secured revolving credit facility in 2009,
reducing the size from $150 million to $22 million, and the
facility is provided by one lender. The amended facility will
continue to provide for working capital and letter of credit needs
collateralized by either cash or assets of the company. Beazer
also entered into three stand-alone, cash-secured, letters of
credit agreements with banks to maintain pre-existing letters of
credit that had been outstanding under the $150 million revolver.
Consistent with Fitch's comment on certain homebuilders'
termination of revolving credit facilities, in the absence of a
traditional revolving credit line, a consistently higher level of
cash and equivalents than was typical should be maintained on the
balance sheet, especially in these still uncertain times.
Future ratings and Outlooks will be influenced by broad housing
market trends as well as company specific activity such as trends
in land and development spending, general inventory levels,
speculative inventory activity (including the impact of high
cancellation rates on such activity), gross and net new order
activity, debt levels and especially free cash flow trends and
uses, and the company's cash position
BERNARD MADOFF: Connecticut AG Sues Westport Bank for Fraud
-----------------------------------------------------------
Attorney General Richard Blumenthal on Monday sued Westport
National Bank, a Wilton money manager and his company seeking to
recover $16.2 million for investors in Bernard Madoff's Ponzi
scheme.
The lawsuit, filed in cooperation with Department of Banking
Commissioner Howard F. Pitkin, charges the bank, Robert L.
Silverman and his company PSCC, Inc. with multiple violations of
state banking laws. The action alleges that they:
-- Ignored repeated and obvious indications of fraud;
-- Failed to fulfill their duty to verify Mr. Madoff's
claimed investments;
-- Miscalculated fees, resulting in millions of dollars in
overcharges;
-- Provided no written information on fund risks and
strategies;
-- Acted as investment advisors without the necessary state
license.
In addition, Westport National Bank allegedly collected
$2.4 million in fees between 2000 and 2007 for performing various
duties as custodian of its clients' funds, but actually did
little, handing over most responsibilities to Mr. Silverman and
his company. The bank even provided Mr. Silverman with its blank
stationary for communications with clients. Mr. Silverman's firm
earned a separate $13.8 million in fees, so much that Mr. Madoff
himself complained, causing them to be lowered.
Mr. Blumenthal is seeking all $16.2 million in fees paid to the
defendants as restitution for investors wiped out when Mr.
Madoff's Ponzi scheme collapsed.
"The bank and Mr. Silverman effectively aided and abetted Madoff's
massive fraud, ignoring clear and compelling signals that his
investments were bogus," Mr. Blumenthal said. "Screaming signs and
sirens shouting fraud -- the same securities bought and sold on
the same day, the same bonds with different maturity dates -- were
repeatedly and reprehensibly disregarded.
"These investors were betrayed twice, first by Madoff and then by
their advisors who charged them millions and then hurled them into
the abyss. Not only did they mislead investors, but miscalculated
fees to enrich themselves.
Mr. Silverman's fees were so high even Mr. Madoff complained.
These defendants deceived their clients and shirked their duties,
anything to keep the gravy train running -- until it ran down
their clients.
"The misdeeds in this case are staggering, revealing monumental
moral rot and malfeasance. Westport National Bank charged
consumers $2.4 million for turning over its supervisory duties to
Mr. Silverman and his company. They even provided him with bank
stationary, streamlining the lie that the bank was looking after
its clients' interests.
"I will fight to recover every penny -- $16.2 million -- for
restitution to investors. They must make their former clients
whole to the greatest extent possible, which is why we seek return
of all $16.2 million in fees. In addition to restitution, my
office will seek harsh penalties -- monetary fines, court orders
and other actions -- to deter future fraud."
Mr. Silverman and his company started doing business with Bernard
L. Madoff Investment Securities in the late 1980s. In 1999, he
hired a new custodian for his Madoff accounts, Westport National
Bank in Westport. Mr. Silverman and the bank set up two
investment funds to funnel money into Mr. Madoff's scheme, one for
general investing and the other for IRAs.
Mr. Blumenthal said that as custodian, Westport National Bank was
supposed to handle billing, do administrative work and take legal
possession of securities and other investments, verifying their
purchase on behalf of investors. The bank, however, conducted none
of these activities, handing them over instead to Silverman and
his company.
Neither Mr. Silverman nor Westport National Bank ever properly
verified that Mr. Madoff made investments he claimed. They also
ignored discrepancies that indicated fraud. For example:
-- Mr. Madoff would send the bank and Silverman notice of a
stock purchase, but a statement issued about the same time
would list the transaction as a sale, or vice versa;
-- Mr. Madoff's funds would provide notice of a U.S. Treasury
Bill purchase listing a maturity date, but the same bond
would have a different maturity date on the statement
issued about the same time.
In addition to restitution, Mr. Blumenthal is seeking a $100,000
fine for each violation of state banking laws and the state's
legal costs.
Mr. Blumenthal said that 240 consumers -- of whom 97 live in
Connecticut -- invested in the two Westport National Bank Madoff
funds. He estimated that consumers originally invested about
$10 million.
Because some investors withdrew money before the funds collapsed,
possibly earning a profit, any restitution may be pro-rated, he
said.
Mr. Blumenthal thanked Assistant Attorney General Patrick Ring and
Assistant Attorney General Matthew Budzik, chief of the Attorney
General's Finance Division, and for their hard work on the case.
About Bernard L. Madoff
Bernard L. Madoff Investment Securities LLC and Bernard L.
Madoff orchestrated the largest Ponzi scheme in history, with
losses topping US$50 billion.
On December 15, 2008, the Honorable Louis A. Stanton of the
U.S. District Court for the Southern District of New York granted
the application of the Securities Investor Protection Corporation
for a decree adjudicating that the customers of BLMIS are in need
of the protection afforded by the Securities Investor Protection
Act of 1970. The District Court's Protective Order (i) appointed
Irving H. Picard, Esq., as trustee for the liquidation of BLMIS,
(ii) appointed Baker & Hostetler LLP as his counsel, and (iii)
removed the SIPA Liquidation proceeding to the Bankruptcy Court
(Bankr. S.D.N.Y. Adv. Pro. No. 08-01789) (Lifland, J.).
On April 13, 2009, former BLMIS clients filed an involuntary
Chapter 7 bankruptcy petition against Bernard Madoff (Bankr.
S.D.N.Y. 09-11893). The case is before Hon. Burton Lifland. The
petitioning creditors -- Blumenthal & Associates Florida General
Partnership, Martin Rappaport Charitable Remainder Unitrust,
Martin Rappaport, Marc Cherno, and Steven Morganstern -- assert
$64 million in claims against Mr. Madoff based on the balances
contained in the last statements they got from BLMIS.
On April 14, 2009, Grant Thornton UK LLP as receiver placed Madoff
Securities International Limited in London under bankruptcy
protection pursuant to Chapter 15 of the U.S. Bankruptcy Code
(Bankr. S.D. Fla. 09-16751).
The Chapter 15 case was later transferred to Manhattan. In June
2009, Judge Lifland approved the consolidation of the Madoff SIPA
proceedings and the bankruptcy case.
Judge Denny Chin of the U.S. District Court for the Southern
District of New York on June 29, 2009, sentenced Mr. Madoff to
150 years of life imprisonment for defrauding investors in
United States v. Madoff, No. 09-CR-213 (S.D.N.Y.)
BH S&B: Deferred Rent Rolled Into Rejection Damage Claims
---------------------------------------------------------
WestLaw reports that deferred payments to which commercial lessors
became entitled under lease modification and landlord consent
agreements with assignee that assumed original tenant's
obligations under leases, to extent that they were treated as
obligations arising under the leases, were not payable on a
priority basis in the debtor-assignee's Chapter 11 case, pursuant
to a statute requiring the trustee or debtor-in-possession to
timely perform the debtor's obligations under any unexpired lease
until the lease was assumed or rejected. The triggering event for
these deferred payments was termination of the leases. Thus, the
debtor's obligations for these payments did not arise during the
postpetition, prerejection period, but were in the nature of lease
rejection damages. In re BH S & B Holdings LLC, --- B.R. ----,
2010 WL 1347102 (Bankr. S.D.N.Y.) (Glenn, J.).
BH S&B Holdings LLC and seven affiliates sought Chapter 11
protection (Bankr. S.D.N.Y. Case No. 08-14604) on Nov. 19, 2008.
BH S&B was formed by investment firms Bay Harbour Management and
York Capital Management in August 2008 to acquire the business
operations and assets of bankrupt retailer Steve & Barry's for
$163 million in August 2008. Steve and Barry's, based in Port
Washington, New York, was a specialty retailer of apparel and
accessories, selling, among other things, university apparel and
lifestyle brands, private-label casual clothing, and exclusive
celebrity endorsed apparel.
Steve & Barry's had 240 locations when it was bought and the new
owners had planned to cut that down to 173 stores. BH S&B had
intended to operate certain Steve & Barry's stores as going
concerns and to liquidate inventory at other locations. Since the
sale closing, however, for various reasons, including the general
health of the American economy and the state of the retail market
in particular, sales at all stores have been disappointing, and BH
S&B's revenue has suffered. As a result, BH S&B was not in
compliance with certain covenants under their senior secured
credit facility and had no prospects for continued financing of
their business as a going concern. In consultation with its
lenders, BH S&B decided the appropriate course of action to
maximize value for the benefit of all of its stakeholders was an
orderly liquidation in Chapter 11.
Joel H. Levitin, Esq., and Richard A. Stieglitz, Jr., Esq., at
Cahill Gordon & Reindel LLP, in Manhattan, serve as bankruptcy
counsel to BH S&B and its affiliates. RAS Management Advisors
LLC is the company's restructuring advisors, and Kurtzman
Carson Consultants LLC is the claims and noticing agent.
BIODELIVERY SCIENCES: Cherry Bekaert Raises Going Concern Doubt
---------------------------------------------------------------
BioDelivery Sciences International, Inc., filed its annual report
on Form 10-K for the year ended December 31, 2009.
Cherry, Bekaert & Holland, L.L.P., in Tampa, Fla., expressed
substantial doubt about the Company's ability to continue as a
going concern. The independent auditors noted that during 2009,
the Company recognized net income of roughly $33 million,
principally due to the recognition of roughly $58 million of
previously deferred revenue. Further, the Company had a net loss
of roughly $17.2 million in 2008 and at December 31, 2009, had
incurred cumulative net losses of roughly $59.2 million.
The Company reported net income of $33.0 million on $62.8 million
of revenue for 2009, compared with a net loss of $17.2 million on
$263,180 of revenue for 2008.
The Company's balance sheet as of December 31, 2009, showed
$39.7 million in assets, $25.2 million of debts, and $14.5 million
of stockholders' equity.
A full-text copy of the annual report is available for free at:
http://researcharchives.com/t/s?6068
BioDelivery Sciences International, Inc. (NASDAQ: BDSI) is a
specialty pharmaceutical company that is leveraging its novel and
proprietary patented drug delivery technologies to develop and
commercialize, either on its own or in partnerships with third
parties, new applications of proven therapeutics. BDSI's
headquarters is located in Raleigh, North Carolina.
BIODELIVERY SCIENCES: To Raise $10 Million in Shares Offering
-------------------------------------------------------------
BioDelivery Sciences International, Inc., in a regulatory filing,
disclosed that it has entered into a definitive securities
purchase agreement with a group of select institutional investors
to purchase $10 million of its securities in a registered direct
offering.
Under the terms of the securities purchase agreement, the Company
will sell an aggregate of 2,824,858 shares of its common stock at
a price of $3.54 per share and issue warrants to acquire an
aggregate of 1,412,429 shares of common stock, which warrants will
have an exercise price of $4.67 per share. The warrants will be
immediately exercisable following their issuance and will expire
on the fifth anniversary of the date of issuance.
Proceeds from the transaction will be used for the continued
clinical development of BDSI's product candidate pipeline,
including BEMA Buprenorphine and for general corporate and working
capital purposes. The closing of the offering is expected to
occur on April 23, 2010.
A full-text copy of the Company's press release is available at no
charge at http://researcharchives.com/t/s?6069
About BioDelivery Sciences
BioDelivery Sciences International, Inc. (NASDAQ: BDSI) is a
specialty pharmaceutical company that is leveraging its novel and
proprietary patented drug delivery technologies to develop and
commercialize, either on its own or in partnerships with third
parties, new applications of proven therapeutics. BDSI's
headquarters is located in Raleigh, North Carolina.
The Company's balance sheet as of December 31, 2009, showed
$39.7 million in assets, $25.2 million of debts, and $14.5 million
of stockholders' equity.
* * *
Cherry, Bekaert & Holland, L.L.P., in Tampa, Fla., expressed
substantial doubt about the Company's ability to continue as a
going concern. The independent auditors noted that during 2009,
the Company recognized net income of roughly $33 million,
principally due to the recognition of roughly $58 million of
previously deferred revenue. Further, the Company had a net loss
of roughly $17.2 million in 2008 and at December 31, 2009, had
incurred cumulative net losses of roughly $59.2 million.
BLACK CROW: GECC Claims Rights to Cash Paid to Professionals
------------------------------------------------------------
Bill Rochelle at Bloomberg News reports that secured lender
General Electric Capital Corp., owed $38.9 million by Black Crow
Media Group LLC, filed a lawsuit on April 16 asking the bankruptcy
judge to declare that it has valid security interests in the
Debtor's cash and accounts receivable. The complaint also served
to warn Black Crow's professionals that GECC later may attempt to
force them to disgorge more than $200,000 in retainers they
received just before the Chapter 11 filing. GECC wants the judge
to rule that the lender maintained a valid security interest in
the cash used to pay retainers.
As reported by the TCR on April 14, the Bankruptcy Court rejected
a request by secured lender GE Capital to dismiss the Chapter 11
case of Black Crow. The Court also denied a request by GECC to
modify the automatic stay so it could foreclose the business.
Black Crow has already obtained approval of $1.5 million in
debtor-in-possession financing. GECC had opposed.
About Black Crow Media
Daytona Beach, Florida-based Black Crow Media Group, LLC, owns and
operates 17 FM and 5 AM radio stations in Daytona Beach, Live Oak,
Valdosta, Huntsville, Alabama, and Jackson, Tennessee.
The Company filed for Chapter 11 bankruptcy protection on
January 11, 2010 (Bankr. M.D. Fla. Case No. 10-00172). The
Company's affiliates -- Black Crow Media, LLC, et al. -- also
filed separate Chapter 11 petitions.
Mariane L. Dorris, Esq., and R Scott Shuker, Esq., at Latham
Shuker Eden & Beaudine LLP, assist the Company in its
restructuring effort. The Company listed $10,000,001 to
$50,000,000 in assets and $50,000,001 to $100,000,000 in
liabilities.
BRITTWOOD CREEK: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: Brittwood Creek LLC
11500 W 79th St.
Burr Ridge, IL 60527
Bankruptcy Case No.: 10-15776
Chapter 11 Petition Date: April 9, 2010
Court: United States Bankruptcy Court
Northern District of Illinois (Chicago)
Judge: Jacqueline P. Cox
Debtor's Counsel: Michael J. Davis
Springer, Brown, Covey, Gaetner & Davis
400 S County Farm Road, Suite 330
Wheaton, IL 60187
Tel: (630) 510-0000
Fax: (630) 510-0004
E-mail: mdavis@springerbrown.com
Estimated Assets: $10,000,001 to $50,000,000
Estimated Debts: $10,000,001 to $50,000,000
The petition was signed by Daniel Callaghan, manager
List of Brittwood Creek LLC's 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Institute In Basic Life Lots 1-16, $13,102,000
Prinicples 18-30 ($32,000,000
943 N. Adams Rd. in Brittwood secured)
Oak Brook, IL 60523 Creek Subdivision ($22,134,063
senior lien)
Daniel P. Callghan Loan $1,179,000
Revocable Trust
c/o Jeffrey Schmidt, trustee
2580 Foxfield, St. 201
Saint Charles, IL 60174
David G. Callaghan Loan $1,000,000
Revocable Trust
c/o Jeffrey Schmidt, trustee
2580 Foxfield, St. 201
Saint Charles, IL 60174
Forest Gate Inc. Loan $456,705
43 Baybrook Ln.
Oak Brook, IL 60523
Callaghan Associates, Inc. Trade Debt $326,294
P. Walker Bros., Inc. Trade Debt $103,093
Prairie Path Pavers, Inc. Trade Debt $70,205
O'Neill Masonry, Inc. Trade Debt $33,941
Engineering Resource Assoc,
Inc Trade Debt $19,163
Visa Trade debt $7,722
Morrissey & Robinson Trade Debt $7,158
John H. Yelnick Construction Trade Debt $6,456
J & L Enterprises, LTD Trade Debt $5,000
Trident Custom Builders Trade Debt $3,400
Contech Construction
Products, Inc Trade Debt $2,806
Fergon Architects, LLC Trade Debt $1,542
Image Enterprises, Inc. Trade Debt $1,167
All American Plumbing Trade Debt $1,115
Siebert Trucking Service, Inc. Trade Debt $1,059
Pac Van Trade debt $975
BROCAM LLC: Voluntary Chapter 11 Case Summary
---------------------------------------------
Debtor: Brocam, LLC
7077 East Marilyn Road
Bldg. 2, Suite 1
Scottsdale, AZ 85254
Bankruptcy Case No.: 10-11453
Chapter 11 Petition Date: April 19, 2010
Court: United States Bankruptcy Court
District of Arizona (Phoenix)
Judge: George B. Nielsen Jr.
Debtor's Counsel: Donald W. Powell, Esq.
Carmichael & Powell, P.C.
7301 N. 16th St., #103
Phoenix, AZ 85020
Tel: (602) 861-0777
Fax: (602) 870-0296
E-mail: d.powell@cplawfirm.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
The Debtor did not file its list of largest unsecured creditors
when it filed its petition.
The petition was signed by Carrie A. Martz.
C&S GROUP: S&P Affirms 'BB-' Rating on $300 Mil. Senior Notes
-------------------------------------------------------------
Standard & Poor's Ratings Services said it affirmed its 'BB-'
senior-secured debt ratings on C&S Group Enterprises LLC's
$300 million 8.375% senior secured notes due 2017 following the
upsizing of the note issue by $50 million. At the same time, the
'4' recovery rating remains the same, indicating S&P's expectation
that the note holders would receive average (30%-50%) recovery in
the event of a payment default. These notes are guaranteed by C&S
Wholesale Grocers, GU Markets LLC, ES3 LLC, Surry Licensing LLC,
and Warehouse Technologies LLC.
Proceeds are expected to be used for repaying borrowings under the
parent company, C&S Wholesale Grocers Inc., and other related
entities senior secured asset-based revolving credit facility.
"The speculative-grade rating on privately owned C&S Wholesale
Grocers reflects the company's position as one of the leading
wholesale grocery distributors, characteristically thin margins,
significant customer concentration, some seasonality to quarterly
operating results, high debt leverage, and moderate cash flow
protection measures. This is partially offset by its fairly low
cost operating position and an experienced management team," said
Standard & Poor's credit analyst Jayne Ross. "In S&P's view, C&S
Wholesale Grocers plays an important role between suppliers and
grocery retailers and that its size and economies of scale give it
an advantage over smaller competitors in this fragmented industry.
However, significant customer concentration is a concern and, in
S&P's view, operating performance could be materially affected by
the loss of one or more large customers."
Ratings List
C&S Wholesale Grocers Inc.
Corporate credit rating BB-/Stable/--
C&S Group Enterprises LLC
Ratings Affirmed
$300 mil. 8.375% senior
secured notes due 2017* BB-
Recovery Rating 4
CAMBRIA MOONSTONE, THE: Case Summary & 20 Largest Unsec. Creditors
------------------------------------------------------------------
Debtor: The Cambria Moonstone, LP
604 Henderson Avenue
Suite 200
San Luis Obispo, CA 93401
Bankruptcy Case No.: 10-11869
Chapter 11 Petition Date: April 19, 2010
Court: United States Bankruptcy Court
Central District of California (Santa Barbara)
Judge: Robin Riblet
Debtor's Counsel: William C. Beall, Esq.
Beall and Burkhardt
1114 State St. Suite 200
Santa Barbara, CA 93101
Tel: (805) 966-6774
Fax: (805) 963-5988
E-mail: artyc@aol.com
Scheduled Assets: $9,662,000
Scheduled Debts: $9,523,044
A list of the Company's 20 largest unsecured creditors is
available for free at http://bankrupt.com/misc/cacb10-11869.pdf
The petition was signed Pragna Patel, partner.
CASA NOSTRA: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------
Debtor: Casa Nostra, LLC
151 N Delaware St., Suite 1104
Indianapolis, IN 46204
Bankruptcy Case No.: 10-05531
Chapter 11 Petition Date: April 19, 2010
Court: United States Bankruptcy Court
Southern District of Indiana (Indianapolis)
Judge: Basil H. Lorch III
Debtor's Counsel: Eric C. Redman, Esq.
Redman Ludwig PC
151 N Delaware St. Suite 1106
Indianapolis, IN 46204
Tel: (317) 685-2426
Fax: (317) 636-8686
E-mail: ksmith@redmanludwig.com
Scheduled Assets: $516,000
Scheduled Debts: $1,573,850
A list of the Company's 20 largest unsecured creditors is
available for free at http://bankrupt.com/misc/insb10-05531.pdf
The petition was signed by KC Cohen, managing member.
CHAPARRAL ENERGY: Moody's Upgrades Corporate Family Rating to 'B3'
------------------------------------------------------------------
Moody's Investors Service upgraded Chaparral Energy, Inc.'s
Corporate Family Rating to B3 from Caa2 and the Probability of
Default Rating to B3 from Caa2. Moody's also upgraded Chaparral's
$325 million senior unsecured notes due 2015 and the $325 million
senior unsecured notes due 2017 to Caa1 from Caa3. The
Speculative Grade Liquidity rating was affirmed at SGL-3. The
rating outlook is stable.
"The rating upgrade reflects the company's improved liquidity and
financial flexibility, a result of a $345 million placement of new
equity," commented Francis J. Messina, Moody's Vice President.
"Nevertheless, high finding and development cost combined with
high financial leverage and a high operating cost structure
continue as a concern."
Chaparral has added a new equity partner, CCMP Capital Advisors,
LLC (37% equity owner) and structured a new JP Morgan led
$450 million senior secured bank facility that matures in four
years and replaces a $513 million fully drawn facility that was
due to mature in October 2010. The $450 million credit facility
plus the $345 million equity placement and cash on hand will repay
the $513 million facility and provide time, liquidity, and
flexibility to Chaparral. Also, it helps to cure the ACTNA test
for both its bonds and new bank facility. After the retirement of
$513 million borrowing base facility, the new $450 million secured
facility will have approximately $175 million drawn.
Chaparral's B3 CFR rating reflects high financial leverage and a
high cost structure. Chaparral continues to carry one of the
highest leverage and operating cost structures among the Moody's
rated E&P universe. Specifically, Moody's estimate Chaparral's
three year average all sources finding and development costs above
$50/boe, its total full cycle costs estimated above $80/boe, and
its Debt/PD boe reserves above $9/boe. Also, Chaparral's debt
plus future FAS 69 proven reserve development capex on total
proven reserves is estimated to exceed $734.6 million. Leverage
on production is approximately $44,000/day and Chaparral will
continue to need significant resources to develop its current PUD
reserves bookings estimated 34% of total proved reserves.
The Caa1 senior unsecured notes rating reflect both its position
in the capital structure and the overall probability of default of
Chaparral, to which Moody's assigns a PDR of B3, and a loss given
default of LGD 5, 71%.
The last rating action on Chaparral was February 9, 2010, at which
time Chaparral's CFR, PDR, and unsecured note ratings were
upgraded to Caa2, Caa2, and Caa3, respectively.
Chaparral Energy, Inc., is privately held independent oil and
natural gas production company. Including the $345 million equity
investment from CCMP, ownership totals are: CCMP Capital at 37%,
Fischer Investments at 26%, Chesapeake Energy at 21%, and Altoma
Energy at 16%.
CHEMTURA CORP: Joins In Panel Objections to CERT's $9 Bil. Claims
-----------------------------------------------------------------
The Official Committee of Unsecured Creditors in Chemtura Corp.'s
cases filed a document asking Bankruptcy Judge Robert E. Gerber
for the Southern District of New York to disallow three claims,
asserting $3,000,000,000 each, filed by the Counsel for Education
and Research on Toxics against Chemtura Corporation and its debtor
affiliates for injuries attributable to certain chemicals the
Debtors previously produced as a flame retardant.
The Debtors subsequently submitted to the Court a joinder to the
Creditors Committee's Objection to the CERT Claims.
Richard M. Cieri, Esq., at Kirkland & Ellis LLP, in New York --
richard.cieri@kirkland.com -- reiterates the Committee's
assertion that CERT is not a creditor as defined by the
Bankruptcy Code and therefore, lacks standing to assert the
Claims.
Mr. Cieri argues that CERT:
-- does not specifically identify an actual, particularized
injury it sustained and, therefore, fails to establish that
it suffered an "injury in fact";
-- provides no evidence to substantiate a causal link between
the Debtors' prior production and distribution of chemicals
and the alleged toxic injuries to animals and humans; and
-- fails to demonstrate re-dressability of the asserted injury
and does not present any likelihood of success on the
merits with respect to any one of its Claims.
CERT Files Supporting Memo
In response to the Committee's claims objection, CERT submitted
to the Court a memorandum of points and authorities.
Raphael Metzger, Esq., at the Metzger Law Group, in Long Beach,
California, asserts that the Committee's argument that CERT is
not a creditor and lacks standing to assert a claim is "as
frivolous as the Creditors' Committee's request for sanctions."
"The plain, unalterable and tragic fact is that these debtors
have committed the greatest harm to people, animals, wildlife,
and the environment in the history of mankind, a catastrophe
which exceeds the toxic harms caused by DDT, PCBs, and other
persistent organic pollutants," Mr. Metzger says.
Accordingly, Mr. Metzger contends that CERT has a claim for the
harm done, is therefore a creditor, and has standing to assert
its claim, because members of CERT have high levels of the
Debtors' Polybrominated diphenyl ethers in their bodies and have
sustained concrete and particularized harm, which is both actual
and imminent and neither conjectural nor hypothetical.
For these reasons, CERT asks the Court to overrule the
Committee's objection to its Claims.
In separate filings, these parties submitted declarations in
support of CERT's response:
* Laura A. Abulafia, a resident of the State of California
* Michele Hammond, a resident of California
* Holly Lohuis, a resident of California
* Ake Bergman, Ph.D., a professor in environmental chemistry
at Stockholm University
* Arlene Blum, Ph.D., a visiting scholar in chemistry at the
University of California at Berkeley and the executive
director of the Green Science Policy Institute
* Phil Brown, Ph.D., an environmental sociologist
* Theodora Colborn, Ph.D., a professor emeritus at the
University of Florida, Gainesville
* Margarita Curras-Collazo, Ph.D., a neuroscientist
* David Epel, Ph.D., a professor emeritus of biological and
marine sciences at Stanford University
* Bruce Hammock, Ph.D., a professor of entomology at the
University of California at Davis
* John Meeker, Ph.D., assistant professor of environmental
health sciences at the University of Michigan School of
Public Health
* Brian Roach, Ph.D., a research associate at the Global
Development and Environment Institute at Tufts University
* Cindy Russell, M.D., a physician specializing in plastic and
reconstructive surgery
* Susan D. Shaw, D.P.H., an environmental scientist and a
doctor of public health
* Heather Stapleton, Ph.D., an assistant professor in the
Nicholas School of the Environment at Duke University in
Durham, North Carolina
* Mary Turyk, Ph.D., a research assistant professor of
epidemiology at the University of Illinois at Chicago,
School of Public Health
* Roland Weber, Ph.D., a chemist and an expert on halogenated
Dioxins and organic pollutants
* Thomas Webster, D.Sc., an associate professor and associate
chairman of the Department of Environmental Health at the
Boston University School of Public Health
Debtors & Committees Respond
On behalf of the Creditors Committee, Daniel H. Golden, Esq., at
Akin Gump Strauss Hauer & Feld LLP, in New York --
dgolden@akingump.com -- argues that the Memorandum filed by CERT
failed to provide any legal or factual basis to grant CERT
standing to bring claims against the Debtors' estates in the name
of the "public interest" or for any other purpose.
Mr. Golden further asserts that CERT failed to justify why its
arguments and facts should now be considered by the Court.
In separate filings, the Debtors and the Official Committee of
Equity Security Holders join in the Creditors Committee's
response to the CERT Memorandum.
CERT Talks Back
Mr. Metzger asks the Court to reject the arguments made by the
Debtors and the Committees. He maintains that CERT is properly
seeking injunctive relief, on an organizational basis, pursuant
to a claim for unfair business practices under the State of
California's Business and Professions Code and pursuant to a
common law claim for abatement of a public nuisance.
In addition, Mr. Metzger contends that the Debtors and the
Committees did not submit any scientific evidence to refute the
Declarations submitted in support of the CERT Memorandum.
Mr. Metzger asserts that the contention that the CERT Claims may
interfere with the Debtors' reorganization is not a legal ground
to expunge the Claims.
* * *
In a separate filing dated April 5, 2010, CERT asked Judge
Gerber:
(a) for permission to file a surreply to respond to new
arguments and evidence raised for the first time by the
joinder reply briefs of the Debtors and the Equity
Committee with respect to the Creditors Committee's
Objection to the CERT Claims; and
(b) to conduct an evidentiary hearing with respect to its
Claims as CERT asserted it has filed several declarations
that set forth scientific and factual date in support of
its Claims.
The Court, in an order dated April 6, 2010, granted CERT leave to
file a surreply, but denied CERT's request for evidentiary
hearings.
Subsequently, in an April 8 report, Bloomberg News' Tiffany Kary
related that Judge Gerber has dismissed CERT's Claim against
Chemtura. The Bankruptcy Court held that CERT "lacks standing to
bring a claim in the case because it isn't a creditor, and it
made the claim too late," the report noted.
"The notion that CERT could decide who would be entitled to what
from [Chemtura's] estate and distribute it boggles the mind,"
Bloomberg News quoted Judge Gerber as saying.
The Bloomberg report also noted that Judge Gerber disallowed CERT
from amending its complaint because of a "sketchy basis" for the
size of its claim.
The Court's oral ruling is to be followed by a written order,
Chemtura's counsel, Natasha Labovitz, Esq., of Kirkland & Ellis
-- natasha.labovitz@kirkland.com -- told Reuters in a separate
report.
About Chemtura Corp.
Based in Middlebury, Connecticut, Chemtura Corporation (CEM) --
http://www.chemtura.com/-- with 2008 sales of $3.5 billion, is a
global manufacturer and marketer of specialty chemicals, crop
protection products, and pool, spa and home care products.
Chemtura Corporation and 26 of its U.S. affiliates filed voluntary
petitions for relief under Chapter 11 on March 18, 2009 (Bankr.
S.D.N.Y. Case No. 09-11233). M. Natasha Labovitz, Esq., at
Kirkland & Ellis LLP, in New York, serves as bankruptcy counsel.
Wolfblock LLP serves as the Debtors' special counsel. The
Debtors' auditors and accountant are KPMG LLP; their investment
bankers are Lazard Freres & Co.; their strategic communications
advisors are Joele Frank, Wilkinson Brimmer Katcher; their
business advisors are Alvarez & Marsal LLC and Ray Dombrowski
serves as their chief restructuring officer; and their claims and
noticing agent is Kurtzman Carson Consultants LLC.
As of December 31, 2008, the Debtors had total assets of
$3.06 billion and total debts of $1.02 billion.
Bankruptcy Creditors' Service, Inc., publishes Chemtura
Bankruptcy News. The newsletter tracks the Chapter 11
proceedings undertaken by Chemtura Corp. and its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
CHEMTURA CORP: Given More Time to Probe Diacetyl Claim Liabilities
------------------------------------------------------------------
Chemtura Corp. and its units asked the U.S. Bankruptcy Court for
authority to estimate diacetyl-related claims and establish
estimation procedures that will govern the schedule and process
for estimating Diacetyl Claims.
Subsequently, in separate filings, these entities submitted
objections to the Debtors' diacetyl-related claims request:
* Karen Smith and certain other diacetyl claimants
* Irma Mancilla f/k/a Irma Ortiz, Victor Mancilla, and Ricardo
Corona
* Ungerer & Company
* Citrus & Allied Essences, Ltd.
* Interstate Fire & Casualty Company, ACE American Insurance
Company and Illinois Union Insurance Company
* The Chartis Insurers composed of AIU Insurance Company,
American Home Assurance Company, Chartis Specialty Insurance
Company, Granite State Insurance Company, Illinois National
Insurance Company, The Insurance Company of the State of
Pennsylvania, Lexington Insurance Company and National Union
Fire Insurance Company of Pittsburg, PA
* Century Indemnity Company, Westchester Fire Insurance
Company, Central National Insurance Company of Omaha, and
Pacific Employers Insurance Company
* The Official Committee of Equity Security Holders
* Certain underwriters at Lloyd's, London
The Equity Committee noted that it has no "quarrel" with the
Debtors' desire to pursue a valuation of the diacetyl-related
claims. However, the Equity Committee is concerned of the
"narrow" scope and brief period of discovery.
Accordingly, the Equity Committee suggested that (i) any case
management order entered by the Court does not preclude it from
seeking additional discovery, and (ii) the production deadline is
extended by a minimum of two additional weeks or until May 21,
2010.
In connection with the service of fact discovery on the Diacetyl
Claimants, the Equity Committee proposed that the Debtors and the
Equity Committee combine their subpoenas and discovery requests
and serve them, subject to a retention of all rights by the
Debtors and the Equity Committee.
Jay M. Goffman, Esq., at Skadden Arps Slate Meagher & Flom LLP,
in New York -- jay.goffman@skadden.com -- asserted that the
approach proposed by the Equity Committee has the benefit of
achieving cost-savings and lessens the burden on the subpoena
recipients, who will have to respond to fewer subpoenas. The
joint effort, he added, will plainly assist the Debtors' estates
by making the discovery process less duplicative and more
efficient.
For their part, Karen Smith and certain diacetyl claimants
informed the Court that they do not oppose the concept of a
judicial estimation of the Debtors' aggregate diacetyl liability
for purposes of formulating and confirming a plan of
reorganization, provided that the estimation (i) does not affect
a separate termination of the validity and amount of individual
claims, and (ii) does not infringe on their rights to a jury
trial and to have claims determined by the U.S. District Court
for the Southern District of New York for distribution purposes.
Nevertheless, the Smith Claimants pointed out that certain
aspects of the estimation process the Debtors have proposed are
problematic and in some instances, unfair to the Diacetyl
Claimants. In this light, the Smith Claimants asked the Court to
deny the Debtors' request unless those objectionable elements are
corrected or otherwise sufficiently remedied.
Specifically, the Smith Claimants suggested that:
-- a statutory committee of Diacetyl Claimants be appointed
and allowed to participate in the estimation proceeding;
-- in any order approving estimation, the Court should make
clear that the estimation will solely be for purposes of
formulating and confirming a Chapter 11 plan of
reorganization, and will not affect any determination of
the validity or amount of individual claims;
-- discovery must be a reciprocal process and they should be
permitted to pursue discovery of the Debtors, as well as
other parties;
-- fact discovery permitted from them should be narrowed; and
-- the Debtors should clarify whether the estimation they
contemplate will include future claims. If the estimation
will encompass future claims, then a future claimants'
representative should be appointed.
The Other Objecting Parties also joined in the Smith Claimants'
call for an official committee of Diacetyl Claimants.
Debtors and Creditors Committee Respond
In separate filings, the Debtors and the Official Committee of
Unsecured Creditors pointed out that none of the Objecting
Parties dispute the importance of estimating Diacetyl Claims.
Indeed, Richard M. Cieri, Esq., at Kirkland & Ellis LLP, in New
York, related, the dispute before the Court in the context of the
Estimation Procedures is not whether the Diacetyl Claims should
be estimated -- but rather, how the estimation should proceed.
In that regard, the Debtors have been able to reach consensus in
several areas and expect to be able to resolve other currently
open questions before the hearing on the Estimation Request, he
noted.
The Debtors, however, do not agree that the timeframe for
estimation should be extended for three to five months as has
been suggested by one of the Objecting Parties, according to Mr.
Cieri. The Debtors added that they do not agree that the proper
scope of discovery should include merits-based issues like if the
Diacetyl Claims were being individually liquidated, or that the
Case Management Order should be amended to include evidentiary
rules similar to those used in merits trials.
With regard to the formation of an official equity committee, Mr.
Cieri contended that the Debtors do not agree that one should be
formed because the Debtors' estates would pay the litigation
expenses of one group of creditors but not those of other
distinctly identifiable groups like the Debtors' bondholders.
The Creditors Committee supports the Debtors' stand. Daniel H.
Golden, Esq., at Akin Gump Strauss Hauer & Feld LLP, in New York
-- dgolden@akingump.com -- noted that a party seeking the
formation of an additional committee must first bring its request
to the Office of the United States Trustee for the Southern
District of New York before seeking relief from the Bankruptcy
Court.
A chart listing the Debtors' specific replies for each Objecting
Party is available for free at:
http://bankrupt.com/misc/ChemDiacEstRsp.pdf
Against this backdrop, the Debtors asked the Court to resolve
issues in their favor and enter a revised Case Management Order,
a copy of which is available for free at:
http://bankrupt.com/misc/ChemRevCMO.pdf
Among others, the Debtors propose these dates in relation to the
Diacetyl Claims Estimation Request:
April 30, 2010 Deadline for parties to serve discovery
requests
May 21, 2010 Deadline for parties to produce documents
responsive to the discovery requests
May 21, 2010 Deadline to identify testifying experts
June 11, 2010 Deadline for Debtors to file expert reports
and an opening estimation brief
June 11 to Period within which parties may engage in
July 19, 2010 discovery
July 2, 2010 Deadline for Diacetyl Claimants, the Creditors
Committee, the Equity Committee and Lenders to
serve expert reports and responsive estimation
briefs
July 12, 2010 Deadline for Debtors to serve rebuttal expert
reports and reply briefs
July 14, 2010 Deadline for parties to exchange witness lists
and affirmative trial exhibits
August 2, 2010 Estimation Hearing
* * *
Judge Gerber has given the Debtors more time to investigate the
value of their Diacetyl Claim liabilities, Bloomberg News'
Tiffany Kary reported on April 8, 2010.
The Bankruptcy Court gave the Debtors until August 2, 2010 "to
prepare a dispute over how much it may need to set aside in
[their] bankruptcy to cover claims from diacetyl," Ms. Kary
related.
Judge Gerber has also allowed the Debtors to seek information
from past settlements and present expert witnesses, the report
disclosed. He, however, said it was "premature" to rule on
whether the Debtors can set a cap for the Diacetyl Claims.
"I'm not looking to decide on individual settlements," Bloomberg
News also quoted Judge Gerber as saying.
About Chemtura Corp.
Based in Middlebury, Connecticut, Chemtura Corporation (CEM) --
http://www.chemtura.com/-- with 2008 sales of $3.5 billion, is a
global manufacturer and marketer of specialty chemicals, crop
protection products, and pool, spa and home care products.
Chemtura Corporation and 26 of its U.S. affiliates filed voluntary
petitions for relief under Chapter 11 on March 18, 2009 (Bankr.
S.D.N.Y. Case No. 09-11233). M. Natasha Labovitz, Esq., at
Kirkland & Ellis LLP, in New York, serves as bankruptcy counsel.
Wolfblock LLP serves as the Debtors' special counsel. The
Debtors' auditors and accountant are KPMG LLP; their investment
bankers are Lazard Freres & Co.; their strategic communications
advisors are Joele Frank, Wilkinson Brimmer Katcher; their
business advisors are Alvarez & Marsal LLC and Ray Dombrowski
serves as their chief restructuring officer; and their claims and
noticing agent is Kurtzman Carson Consultants LLC.
As of December 31, 2008, the Debtors had total assets of
$3.06 billion and total debts of $1.02 billion.
Bankruptcy Creditors' Service, Inc., publishes Chemtura
Bankruptcy News. The newsletter tracks the Chapter 11
proceedings undertaken by Chemtura Corp. and its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
CHINA DIGITAL: Bongiovanni & Associates Raises Going Concern Doubt
------------------------------------------------------------------
China Digital Media Corporation filed on April 14, 2010, its
annual report on Form 10-K for the year ended December 31, 2009.
Bongiovanni & Associates, CPA's, in Cornelius, N.C., expressed
substantial doubt about the Company's ability to continue as a
going concern. The independent auditors noted that the Company
had an accumulated deficit of $12,136,140 and a working capital
deficiency of $9,905,650 at December 31, 2009.
The Company reported net income of $2,210,139 on $9,525,141 of
revenue for 2009, compared with a net loss of $13,375,575 on
$7,290,344 of revenue for 2008.
The Company's balance sheet as of December 31, 200, showed
$25,711,723 in assets, $19,351,627 of debts, and $6,360,096 of
stockholders' equity.
A full-text copy of the annual report is available for free at:
http://researcharchives.com/t/s?606f
Headquartered in E. Kowloon, Hong Kong, China Digital Media
Corporation was previously known as HairMax International, Inc., a
Nevada corporation. The Company is primarily engaged in: 1) cable
television operational support services and digital broadcast
technology development; and 2) advertising sales.
CHINA DU: Keith Zhen Raises Going Concern Doubt
-----------------------------------------------
China Du Kang Co., Ltd., filed on April 14, 2010, its annual
report on Form 10-K for the year ended December 31, 2009.
Keith Z. Zhen, CPA, in Brooklyn, N.Y., expressed substantial
doubt about the Company's ability to continue as a going concern.
The independent auditor noted that the Company has incurred an
operating loss in 2009 and 2008 and has a working capital
deficiency and a shareholders' deficiency as of December 31, 2009.
The Company reported a net loss of $532,075 on $1,987,659 of
revenue for 2009, compared with a net loss of $1,502,067 on
$1,143,195 of revenue for 2008.
The Company's balance sheet as of December 31, 2009, showed
$9,867,391 in assets and of $16,999,234 of debts, for a
stockholders' deficit of $7,131,843.
A full-text copy of the annual report is available for free at:
http://researcharchives.com/t/s?606d
Headquartered in Shaanxi, PRC, China Du Kang Co., Ltd. (OTC: CDKG)
was incorporated as U.S. Power Systems, Inc. in the State of
Nevada on January 16, 1987. The Company manufactures, sells,
licenses and distributes a proprietary line of white wines that
are generally known in China under the heading Du Kang. Du Kang
is a generic description, like "vodka" or "merlot" and is one of
the most famous Chinese white wine brands.
CHRYSLER LLC: Wins Confirmation of Liquidating Plan
---------------------------------------------------
The United States Bankruptcy Court for the Southern District of
New York confirmed on April 20, 2010, the Second Amended Joint
Plan of Liquidation filed by Old Carco LLC, formerly known as
Chrysler LLC, and its 24 debtor subsidiaries, Bloomberg News
reports.
More than 99% in dollar amount of first-lien creditors and over
98% of general unsecured creditors voted to accept the Plan,
gaining overwhelming support from creditors.
The hearings on the Plan began April 20.
About 19 parties filed objections to the Plan and majority of
these objections were either resolved or withdrawn prior to the
April 20 hearing.
Under the confirmed Plan, unsecured creditors will get nothing
other than proceeds, if any, from a lawsuit against former owner
Daimler AG, and only if the recovery exceeds $25 million. The
U.S. government will also get nothing in return for the $4 billion
TARP loan it extended to the company in January 2008.
According to Bloomberg, the government's $4 billion loan under
the Troubled Asset Relief Program turned out to be worth nothing
because the security was a valueless third-lien on most of Old
Chrysler's properties. "The loan failed to help Chrysler avoid
bankruptcy," Bloomberg's Bill Rochelle pointed out.
The Plan gives first-lien secured creditors the proceeds from
their collateral.
The United Auto Workers' Retiree Medical Benefits Trust, a
voluntary employees' beneficiary association trust which will
provide health benefits for Chrysler workers, owns 55% of new
Chrysler, while the U.S. government owns 8% and Canadian
governmental units have 2%.
Old Chrysler's Liquidating Plan obtained Court approval of its
Plan almost a year after the Chapter 11 filing. The company
delivered its Chapter 11 petition in Court on April 30, 2009, and
subsequently sold the business to Fiat S.p.A. in June. Fiat owns
20% of New Chrysler.
Modified Plan
Old Chrysler submitted additional modifications to their Second
Amended Joint Plan of Liquidation on April 13, 2010. The Plan was
modified to provide that as of the Effective Date, the DIP Credit
Agreement will be deemed extinguished and of no further force and
effect as against the Debtors or any affiliate of the Debtors,
provided that the rights of the Government DIP Lenders will be
enforceable against the Liquidation Trust only as and to the
extent set forth the Plan and in the DIP Lender Winddown Order.
In addition to the previously-set conditions precedent to the
Effective Date, the Modified Plan provides that the Effective Date
will not occur, and the Plan will not be consummated, unless and
until a Confirmation Order is entered by April 30, 2010.
The Modified Plan provides that on or before the effective date of
the Plan, an Environmental Reserve will be established, which is a
segregated account in the original amount of $15 million to be
funded from previously unallocated Winddown Funds. The
Environmental Reserve is comprised of the EPA Reserve, the Owned
Property Reserve and, if and when funded, the Keck Orphan Reserve.
The Liquidation Trust will maintain separate sub-accounts in the
Environmental Reserve for the reserves. Within the Owned Property
Reserve, the Liquidation Trust will maintain separate sub-accounts
for the Allocated Shares for each of the Designated Owned
Properties.
The funds in the Owned Property Reserve will be available solely
to address environmental clean-up of contamination at or migration
from Terminated Properties, as well as administrative expenses
associated with the Terminated Properties. None of the funds in
the Owned Property Reserve will be available for third party
purchasers of any Owned Property.
A copy of the Second Modified Plan can be obtained for free at:
http://bankrupt.com/misc/Chysler_ModifiedPlan_04132010.pdf
A blacklined copy of the Second Modified Plan identifying changes
made to the First Modified Plan is available for free at:
http://bankrupt.com/misc/Chysler_PlanBlacklined1_04132010.pdf
A copy of the consolidated blackline of the Plan identifying the
First Modifications and the Second Modifications is available for
free at:
http://bankrupt.com/misc/Chysler_PlanBlacklined2_04132010.pdf
Plan Feasibility Analysis
Robert J. Manzo, executive director of Capstone Advisory Group
LLC, files a supplemental declaration in support of the Plan.
Capstone is the Debtors' financial advisor.
The Supplemental Declaration contains the Plan Feasibility
Analysis dated April 14, 2010, that revises the analysis dated
March 11, 2010.
The New Plan Feasibility Analysis provides for increased estimated
administrative, secured and priority claims, and Liquidation Trust
expenses. The establishment of the Environmental Reserve is also
reflected in the new analysis with the Total Environmental Reserve
Funding pegged at $15 million.
A copy of the new Plan Feasibility Analysis is available for free
at http://bankrupt.com/misc/Chrysler_PlanFeasibility_04142010.pdf
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: Dealer Issues with North Carolina Resolved
--------------------------------------------------------
BankruptcyData.com reports that Chrysler LLC said that the U.S.
Bankruptcy Court approved an agreement with the State of North
Carolina.
"Chrysler Group is pleased to reach an amicable resolution to our
issues with the State of North Carolina. Such state dealer laws
grant rejected dealers specific statutory rights previously
afforded only to existing dealers, and are preempted in accordance
with the Bankruptcy Court's prior rulings. The actions to reduce
Chrysler's dealer network were a necessary part of Chrysler
Group's viability and central to the interim financing and
partnership with Fiat. The process to determine which dealership
contracts were rejected evaluated dealership performance and
market factors using data driven criteria and was applied to every
dealer. The only alternative would have been complete liquidation
of the Company, which would have resulted in all 3,200 dealers
closing, hundreds of thousands of lost jobs, and defaults on
billions of dollars in taxpayer loans. There is no denying that
Chrysler Group's and the public's economic interests are
inextricably linked. Chrysler Group not only employed sound
business judgment in restructuring its dealer network, but is
acting in the greater public interest by protecting the dealer
network that was created during bankruptcy. Chrysler Group is
confident the difficult decisions made during bankruptcy will
continue to position the company for sustainable success and will
enable the company to repay the U.S. Taxpayers in a timely
manner."
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)
CIRCUIT CITY: Court OKs Sale of Whitehall Property to H&L
---------------------------------------------------------
The Bankruptcy Court approved the agreement between Circuit City
Stores, Inc., the Seller, and H&L Holdings, LLC, the Purchaser,
for the sale of Circuit City's real property located at Grape
Street and Jordan Boulevard in Whitehall, Pennsylvania.
The sale hearing was held on March 18, 2010, following an auction
on March 16. The Alternate Bidder was Dowel-Allentown, LLC.
The Court held that any and all objections not waived, withdrawn,
settled, adjourned or otherwise resolved are overruled on the
merits and denied with prejudice.
The Agreement and any related agreements, documents or other
instruments may be modified, amended or supplemented by the
parties, in a writing signed by the parties, without further
Court order. However, any modification should be disclosed to
the Official Committee of Unsecured Creditors and not have a
material adverse effect on the Seller's estate, in the good faith
business judgment of the Seller.
Upon consummation of the Agreement, the Seller's right, title and
interest in the Property will be transferred to H&L Holdings free
and clear of all Liens except the Permitted Encumbrances, with
all Liens to attach to the cash proceeds of the Sale in the order
of their priority, with the same validity, force, and effect
which they had as against the Property immediately before the
transfer, subject to any claims and defenses the Seller may
possess with respect thereto.
A full-text copy of the Sale Order is available at no charge at:
http://bankrupt.com/misc/CC_WhitehallSaleOrd031910.pdf
About Circuit City
Headquartered in Richmond, Virginia, Circuit City Stores Inc.
(NYSE: CC) -- http://www.circuitcity.com/-- was a specialty
retailer of consumer electronics, home office products,
entertainment software and related services in the U.S. and
Canada.
Circuit City Stores together with 17 affiliates filed a voluntary
petition for reorganization relief under Chapter 11 of the
Bankruptcy Code on November 10 (Bankr. E.D. Va. Lead Case No. 08-
35653). InterTAN Canada, Ltd., which runs Circuit City's Canadian
operations, also sought protection under the Companies' Creditors
Arrangement Act in Canada.
Gregg M. Galardi, Esq., and Ian S. Fredericks, Esq., at Skadden,
Arps, Slate, Meagher & Flom, LLP, are the Debtors' general
restructuring counsel. Dion W. Hayes, Esq., and Douglas M. Foley,
Esq., at McGuireWoods LLP, are the Debtors' local counsel. The
Debtors also tapped Kirkland & Ellis LLP as special financing
counsel; Wilmer, Cutler, Pickering, Hale and Dorr, LLP, as special
securities counsel; and FTI Consulting, Inc., and Rotschild Inc.
as financial advisors. The Debtors' Canadian general
restructuring counsel is Osler, Hoskin & Harcourt LLP. Kurtzman
Carson Consultants LLC is the Debtors' claims and voting agent.
The Debtors disclosed total assets of $3,400,080,000 and debts of
$2,323,328,000 as of August 31, 2008.
Circuit City has opted to liquidate its 721 stores. It has
obtained the Bankruptcy Court's approval to pursue going-out-of-
business sales, and sell its store leases.
In May 2009, Systemax Inc., a multi-channel retailer of computers,
electronics, and industrial products, acquired certain assets,
including the name Circuit City, from the Debtors through a Court-
approved auction.
Bankruptcy Creditors' Service, Inc., publishes Circuit City
Bankruptcy News. The newsletter tracks the Chapter 11 proceedings
of Circuit City Stores Inc. and its debtor-affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000).
CIRCUIT CITY: Plan Confirmation Hearing Continued to May 11
-----------------------------------------------------------
The hearing to consider the confirmation of Circuit City Stores
Inc.'s First Amended Joint Plan of Liquidation has been further
continued from April 6, 2010, to May 11, 2010, at 10:00 a.m.,
Eastern Time, or as soon as counsel can be heard before Judge
Kevin Huennekens, United States Bankruptcy Court for the Eastern
District of Virginia.
The Confirmation Hearing may be adjourned from time to time by
announcing the adjournment in open court.
The Liquidating Plan
The Plan provides for the orderly liquidation of the remaining
assets of the Debtors and the distribution of the proceeds of the
liquidation of the Debtors' assets according to the priorities
set forth under the Bankruptcy Code.
Under the Debtors' Joint Plan of Liquidation, all claims against
the Debtors -- other than administrative claims and priority tax
claims, which will be paid in full -- are classified into eight
classes:
Estimated
Estimated Aggregate Amount
Class Description Recovery of Allowed Claims
----- ----------- --------- -----------------
1 Miscellaneous Secured Claims 100% $5 mil.-$20 mil.
2 Non-Tax Priority Claims 100% $35 mil.-$95 mil.
3 Convenience Claims 10% unknown
4 General Unsecured Claims 0%-13.5% $1.8 bil.-$2 bil.
5 Intercompany Claims 0% $0
6 Subordinated 510(c) Claims 0% $0
7 Subordinated 510(b) Claims 0% $0
8 Interests 0% -
A Liquidating Trust will be established on the Plan Effective
Date. All Distributions to the Holders of allowed claims will be
from the Liquidating Trust.
The Plan Proponents also filed on September 24, 2009, clean and
final version of their Disclosure Statement and First Amended
Plan, a full-text copy of which is available at no charge at:
http://bankrupt.com/misc/CC_DS&1stAmPlan_092409.pdf
About Circuit City
Headquartered in Richmond, Virginia, Circuit City Stores Inc.
(NYSE: CC) -- http://www.circuitcity.com/-- was a specialty
retailer of consumer electronics, home office products,
entertainment software and related services in the U.S. and
Canada.
Circuit City Stores together with 17 affiliates filed a voluntary
petition for reorganization relief under Chapter 11 of the
Bankruptcy Code on November 10 (Bankr. E.D. Va. Lead Case No. 08-
35653). InterTAN Canada, Ltd., which runs Circuit City's Canadian
operations, also sought protection under the Companies' Creditors
Arrangement Act in Canada.
Gregg M. Galardi, Esq., and Ian S. Fredericks, Esq., at Skadden,
Arps, Slate, Meagher & Flom, LLP, are the Debtors' general
restructuring counsel. Dion W. Hayes, Esq., and Douglas M. Foley,
Esq., at McGuireWoods LLP, are the Debtors' local counsel. The
Debtors also tapped Kirkland & Ellis LLP as special financing
counsel; Wilmer, Cutler, Pickering, Hale and Dorr, LLP, as special
securities counsel; and FTI Consulting, Inc., and Rotschild Inc.
as financial advisors. The Debtors' Canadian general
restructuring counsel is Osler, Hoskin & Harcourt LLP. Kurtzman
Carson Consultants LLC is the Debtors' claims and voting agent.
The Debtors disclosed total assets of $3,400,080,000 and debts of
$2,323,328,000 as of August 31, 2008.
Circuit City has opted to liquidate its 721 stores. It has
obtained the Bankruptcy Court's approval to pursue going-out-of-
business sales, and sell its store leases.
In May 2009, Systemax Inc., a multi-channel retailer of computers,
electronics, and industrial products, acquired certain assets,
including the name Circuit City, from the Debtors through a Court-
approved auction.
Bankruptcy Creditors' Service, Inc., publishes Circuit City
Bankruptcy News. The newsletter tracks the Chapter 11 proceedings
of Circuit City Stores Inc. and its debtor-affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000).
CIRCUIT CITY: Removal Period Extended Until August 3
----------------------------------------------------
Circuit City Stores Inc. and its units sought and obtained the
Court's approval to extend the time period within which they may
remove actions pending as of the Petition Date through the later
of (i) August 3, 2010, or (ii) 30 days after entry of an order
terminating the automatic stay with respect to any particular
action sought to be removed.
Since the Debtors announced their liquidation on January 16,
2009, the Debtors have been focused on, among other matters,
executing on a wind-down plan with the dual goal of winding down
as expeditiously as possible and maximizing value for the
benefit of their estates, Gregg M. Galardi, Esq., at Skadden,
Arps, Slate, Meagher & Flom, LLP, in Wilmington, Delaware,
explained to the Court.
These efforts, he said, included closing and vacating
approximately 600 retail stores, distribution, service and call
centers, and corporate headquarters, marketing and selling or
otherwise realizing value from their various assets, reviewing,
reconciling and objecting to administrative, priority, and
unsecured claims, investigating causes of action against third
parties, documenting and seeking collection of obligations owed
to the Debtors' estates under existing agreements, and otherwise
winding down their remaining affairs. The Debtors have also
negotiated a consensual plan of liquidation with the Official
Committee of Unsecured Creditors and obtained approval of the
associated disclosure statement.
In light of these developments, the Debtors maintained that the
requested extension of time is in the best interests of their
estates and creditors. Moreover, the extension will afford the
Debtors additional time to attempt to make fully informed
decisions concerning whether the Actions may and should be
removed, thereby protecting the Debtors' valuable right to
adjudicate lawsuits pursuant to 28 U.S.C. Section 1452.
About Circuit City
Headquartered in Richmond, Virginia, Circuit City Stores Inc.
(NYSE: CC) -- http://www.circuitcity.com/-- was a specialty
retailer of consumer electronics, home office products,
entertainment software and related services in the U.S. and
Canada.
Circuit City Stores together with 17 affiliates filed a voluntary
petition for reorganization relief under Chapter 11 of the
Bankruptcy Code on November 10 (Bankr. E.D. Va. Lead Case No. 08-
35653). InterTAN Canada, Ltd., which runs Circuit City's Canadian
operations, also sought protection under the Companies' Creditors
Arrangement Act in Canada.
Gregg M. Galardi, Esq., and Ian S. Fredericks, Esq., at Skadden,
Arps, Slate, Meagher & Flom, LLP, are the Debtors' general
restructuring counsel. Dion W. Hayes, Esq., and Douglas M. Foley,
Esq., at McGuireWoods LLP, are the Debtors' local counsel. The
Debtors also tapped Kirkland & Ellis LLP as special financing
counsel; Wilmer, Cutler, Pickering, Hale and Dorr, LLP, as special
securities counsel; and FTI Consulting, Inc., and Rotschild Inc.
as financial advisors. The Debtors' Canadian general
restructuring counsel is Osler, Hoskin & Harcourt LLP. Kurtzman
Carson Consultants LLC is the Debtors' claims and voting agent.
The Debtors disclosed total assets of $3,400,080,000 and debts of
$2,323,328,000 as of August 31, 2008.
Circuit City has opted to liquidate its 721 stores. It has
obtained the Bankruptcy Court's approval to pursue going-out-of-
business sales, and sell its store leases.
In May 2009, Systemax Inc., a multi-channel retailer of computers,
electronics, and industrial products, acquired certain assets,
including the name Circuit City, from the Debtors through a Court-
approved auction.
Bankruptcy Creditors' Service, Inc., publishes Circuit City
Bankruptcy News. The newsletter tracks the Chapter 11 proceedings
of Circuit City Stores Inc. and its debtor-affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000).
CITADEL BROADCASTING: Files Annual Report on Form 10-K
------------------------------------------------------
A full-text copy of Citadel Broadcasting Corporation's Annual
Report ending December 31, 2009, filed with the Securities and
Exchange Commission on Form 10-K is available at no charge at:
http://bankrupt.com/misc/09Citadel10K.pdf
Citadel Broadcasting Corporation and Subsidiaries
Consolidated Balance Sheet
As of December 31, 2009
ASSETS
Current assets:
Cash $57,441,000
Accounts receivable 159,201,000
Prepaid expenses and other current assets 21,177,000
---------------
Total current assets $237,819,000
Long-term assets:
Property and equipment, net $201,542,000
FCC Licenses 600,603,000
Goodwill 321,976,000
Customer and affiliate relationships 36,284,000
Other assets, net 19,765,000
---------------
Total assets $1,417,989,000
===============
LIABILITIES & SHAREHOLDERS' EQUITY (DEFICIT)
Liabilities not subject to compromise:
Accounts payable $36,376,000
Long-term liabilities:
Senior debt -
Convertible subordinated notes -
Other long-term liabilities 2,631,000
Deferred income tax liabilities 180,422,000
---------------
Total liabilities subject to compromise $219,429,000
Liabilities subject to compromise 2,270,418,000
---------------
Total liabilities $2,489,847,000
Stockholders' deficit:
Preferred stock $-
Common stock 2,940,000
Additional paid-in capital 2,447,084,000
Treasury stock (344,371,000)
Accumulated deficit (3,177,511,000)
---------------
Total stockholders' deficit ($1,071,858,000)
Total liabilities & stockholders' deficit $1,417,989,000
===============
Citadel Broadcasting Corporation and Subsidiaries
Consolidated Statement of Operations
For the year ended December 31, 2009
Net revenue $723,620,000
Operating expenses:
Cost of revenue 306,648,000
Selling, general, and administrative 203,871,000
Corporate general and administrative 26,320,000
Local marketing agreement fees 1,027,000
Asset impairment and disposal charges 985,653,000
Depreciation and amortization 35,599,000
Non-cash amounts related to contractual -
obligations
Other, net 6,841,000
--------------
Operating expenses 1,565,959,000
--------------
Operating loss (842,339,000)
Reorganization costs 4,556,000
Interest expense, net 190,175,000
Gain on extinguishment of debt (428,000)
Write-off of deferred financing costs 814,000
--------------
Loss before income taxes (1,037,456,000)
Income tax benefit (254,097,000)
--------------
Net loss ($783,359,000)
==============
Citadel Broadcasting Corporation and Subsidiaries
Consolidated Statement of Cash Flows
For the year ended December 31, 2009
Cash flows from operating activities:
Net loss ($783,359,000)
Adjustments to reconcile net loss to net cash:
Depreciation and amortization 35,599,000
Non-cash amounts related to contracts -
Gain on extinguishment of debt (428,000)
Write-off of deferred financing costs 160,000
Asset impairment and disposal charges 985,653,000
Non-cash debt-related amounts 105,141,000
Non-cash reorganization costs 4,087,000
Fair value of swap liability (9,578,000)
Provision for bad debts 6,231,000
Loss(gain) on sale of assets 271,000
Deferred income taxes (245,517,000)
Stock-based compensation expense 10,535,000
Changes in operating assets & liabilities:
Accounts receivable 5,586,000
Prepaid expenses (2,502,000)
Accounts payable (46,226,000)
--------------
Net cash provided by operating activities $65,653,000
Cash flows from investing activities:
Capital expenditures (7,761,000)
FCC license upgrades -
Cash paid to acquire stations -
Proceeds from sale of assets 23,000
Restricted cash (2,460,000)
Other assets, net 50,000
ABC Radio merger acquisition costs -
--------------
Net cash used in investing activities (10,148,000)
Cash flows from financing activities:
Payments for early extinguishment of debt (292,000)
Debt issuance costs (11,477,000)
Proceeds from senior credit and term facility -
Other debt-related expenses (654,000)
Purchase of shares held in treasury (73,000)
Principal payments on other long-term obligations (192,000)
Repayment of ABC Radio indebtedness -
Borrowings from senior credit facility -
Principal payments on senior credit facility (4,010,000)
Dividends paid to holders of common stock -
Stock issuance costs associated with ABC merger -
Repayment of stockholder notes -
--------------
Net cash used in financing activities (16,698,000)
Net increase in cash 38,807,000
Cash, beginning of period 18,634,000
--------------
Cash and cash equivalents, end of period $57,441,000
==============
About Citadel Broadcasting
Citadel Broadcasting Corporation (OTC BB: CTDB) --
http://www.citadelbroadcasting.com/-- is the third largest radio
group in the United States, with a national footprint reaching
more than 50 markets. Citadel is comprised of 166 FM stations and
58 AM stations in the nation's leading markets, in addition to
Citadel Media, which is one of the three largest radio networks in
the United States.
Citadel Broadcasting filed for Chapter 11 with 50 affiliates on
Dec. 20, 2009, in Manhattan (Bankr. S.D.N.Y. Case No. 09-17422).
The Company listed assets of $1.4 billion and debt of $2.5 billion
in its Chapter 11 filing. Kirkland & Ellis LLP is serving as
legal counsel and Lazard Freres & Co. LLC. As financial advisor
for the restructuring. Kurtzman Carson Consultants is serving as
claims and notice agent.
Bankruptcy Creditors' Service, Inc., publishes Citadel
Broadcasting Bankruptcy News. The newsletter tracks the Chapter
11 proceeding undertaken by Citadel Broadcasting Corp. and other
affiliates. (http://bankrupt.com/newsstand/or 215/945-7000)
CITADEL BROADCASTING: Says Aurelius Violated Stock Purchase Limits
------------------------------------------------------------------
Bill Rochelle at Bloomberg News reports that Citadel Broadcasting
Corp. is asking the Bankruptcy Court to void the purchase by
affiliates of Aurelius Capital Management LP of 16.7 million
shares of Citadel.
According to the report, Citadel claims that Aurelius has violated
a court order prohibiting anyone from acquiring more than 12
million shares without permission from the company. Early in its
Chapter 11 case, Citadel received permission from the Bankruptcy
Court to prohibit the acquisition of large blocks of stock that
would result in a change of control, and in the process cause the
possible loss of tax-loss carryforwards.
About Citadel Broadcasting
Citadel Broadcasting Corporation (OTC BB: CTDB) --
http://www.citadelbroadcasting.com/-- is the third largest radio
group in the United States, with a national footprint reaching
more than 50 markets. Citadel is comprised of 166 FM stations and
58 AM stations in the nation's leading markets, in addition to
Citadel Media, which is one of the three largest radio networks in
the United States.
Citadel Broadcasting filed for Chapter 11 with 50 affiliates on
Dec. 20, 2009, in Manhattan (Bankr. S.D.N.Y. Case No. 09-17422).
The Company listed assets of $1.4 billion and debt of $2.5 billion
in its Chapter 11 filing. Kirkland & Ellis LLP is serving as
legal counsel and Lazard Freres & Co. LLC. As financial advisor
for the restructuring. Kurtzman Carson Consultants is serving as
claims and notice agent.
Bankruptcy Creditors' Service, Inc., publishes Citadel
Broadcasting Bankruptcy News. The newsletter tracks the Chapter
11 proceeding undertaken by Citadel Broadcasting Corp. and other
affiliates. (http://bankrupt.com/newsstand/or 215/945-7000)
CITIGROUP INC: Says It Was "Not Involved" in Goldman Probe
----------------------------------------------------------
The New York Times reports that Citigroup Inc. said Monday that it
was "not involved" in the government's fraud investigation into
Goldman Sachs' subprime mortgage dealings.
"Let me be clear about one issue that has attracted a lot of
attention since Friday," John C. Gerspach, Citigroup's chief
financial officer, said on a conference call to discuss the bank's
first-quarter earnings, according to the NY Times. "So let me
state the following: Citi is not involved in the matter the S.E.C.
announced on Friday."
The NY Times notes that the impromptu remark came at the end of
Mr. Gerspach's presentation on Citi's financial results.
According to NY Times, Mr. Gerspach did point analysts to a
disclaimer in Citi's annual report that states Citi's subprime-
related mortgage business has been under investigation by the
Securities and Exchange Commission since September 2007.
As reported by the Troubled Company Reporter on April 20, 2010,
Citigroup reported first quarter 2010 net income of $4.4 billion
or $0.15 per diluted share, and revenues of $25.4 billion.
Revenues grew $7.5 billion and net income increased $5.8 billion,
excluding the $10.1 billion pre-tax loss from the TARP repayment
and exit of the loss-sharing agreement with the U.S. government in
the fourth quarter of 2009. Provisions for credit losses and for
benefits and claims declined $2.4 billion sequentially to
$8.6 billion, the lowest level since the first quarter of 2008.
Expenses were down 6% sequentially to $11.5 billion.
A full-text copy of Citigroup's earnings release is available at
no charge at http://ResearchArchives.com/t/s?604e
A full-text copy of Citigroup's quarterly financial data
supplement is available at no charge at:
http://ResearchArchives.com/t/s?604f
About Citigroup
Based in New York, Citigroup Inc. (NYSE: C) -- is a global
diversified financial services holding company whose businesses
provide a broad range of financial services to consumer and
corporate customers. Citigroup has roughly 200 million customer
accounts and does business in more than 140 countries.
Citigroup's businesses are aligned in three reporting segments:
(i) Citicorp, which consists of Regional Consumer Banking (in
North America, EMEA, Asia, and Latin America) and the
Institutional Clients Group (Securities and Banking, including the
Private Bank, and Transaction Services); (ii) Citi Holdings, which
consists of Brokerage and Asset Management, Local Consumer
Lending, and a Special Asset Pool; and (iii) Corporate/Other.
As reported in the Troubled Company Reporter on November 25, 2008,
the U.S. government entered into an agreement with Citigroup to
provide a package of guarantees, liquidity access, and capital.
The U.S. Treasury and the Federal Deposit Insurance Corporation
agreed to provide protection against the possibility of unusually
large losses on an asset pool of roughly $306 billion of loans and
securities backed by residential and commercial real estate and
other such assets, which will remain on Citigroup's balance sheet.
As a fee for this arrangement, Citigroup issued preferred shares
to the Treasury and FDIC. The Federal Reserve agreed to backstop
residual risk in the asset pool through a non-recourse loan.
Citigroup, the third-biggest U.S. bank, received $45 billion in
bailout aid. Other bailed-out banks, including Bank of America
Corp., Wells Fargo & Co., have pledged to repay TARP money.
JPMorgan Chase & Co., Goldman Sachs Group Inc. and Morgan Stanley,
repaid TARP funds in June. Citigroup is selling assets to repay
the bailout funds.
Citigroup is one of the banks that, according to results of the
government's stress test, need more capital.
COLLINS & AIKMAN: Ex-CEO Stockman Settles SEC Suit for $7.2MM
-------------------------------------------------------------
The Securities and Exchange Commission reached settlements in SEC
v. Collins & Aikman Corp., et al., No. 07-CV-2419 (SAS) (S.D.N.Y.)
with defendants David A. Stockman, J. Michael Stepp, Elkin B.
McCallum, David R. Cosgrove, and Paul C. Barnaba, all former
executives or board members of Collins & Aikman Corporation, an
auto parts supplier that went bankrupt in 2005. The proposed
settlements are subject to Court approval.
Mr. Stockman, C&A's former CEO and Chairman of the Board, Mr.
Stepp, C&A's former CFO and Vice Chairman of the Board, Mr.
McCallum, a former C&A Board member, and Mr. Cosgrove, C&A's
former Corporate Controller, without admitting or denying the
Commission's allegations, would each consent to entry of a final
judgment permanently enjoining them from violating the antifraud
provisions of Sections 17(a)(2) and 17(a)(3) of the Securities Act
of 1933 and the reporting, recordkeeping, internal controls, and
lying to auditors provisions of the Securities Exchange Act of
1934. Messrs. Stockman and Stepp also would be permanently
enjoined from violating the Sarbanes-Oxley certification
provisions. Messrs. Barnaba, C&A's former Vice President and
Director of Purchasing-Plastic Division, without admitting or
denying the Commission's allegations, would consent to entry of a
final judgment permanently enjoining him from violation of the
reporting, recordkeeping, internal controls, and lying to auditors
provisions of the Exchange Act.
Pursuant to the settlement, Mr. Stockman has agreed to pay
$7.2 million, comprised of $400,000 in civil penalties,
disgorgement of $4,424,000, and prejudgment interest of
$2,376,000, with the disgorgement and prejudgment interest
obligations subject to an offset of up to $4.4 million for
payments Mr. Stockman makes to settle two securities class action
lawsuits against him seeking recovery of the same money as the
Commission. Messrs. Stepp and McCallum have each agreed to pay a
civil penalty of $75,000, Cosgrove has agreed to pay a civil
penalty of $40,000, and Mr. Barnaba has agreed to pay a civil
penalty of $20,000. Upon motion to the Court, the civil penalties
paid by Stockman may be distributed pursuant to the Fair Funds
provisions of Section 308(a) of the Sarbanes-Oxley Act of 2002.
In addition, based upon the anticipated entry of a permanent
injunction against him, Cosgrove has offered to consent, without
admitting or denying the Commission's findings, to the issuance of
an administrative order pursuant to Rule 102(e) of the
Commission's Rules of Practice, suspending him from appearing or
practicing before the Commission as an accountant with a right to
apply for reinstatement after three years.
The SEC's complaint alleges that Stockman participated in
fraudulent rebate transactions, joined by Messrs. Stepp, McCallum,
Cosgrove, and Barnaba, to inflate C&A's reported income between
2001 and 2004. The complaint alleges that Stockman and other
defendants obtained false documents from suppliers designed to
mislead C&A's external auditors. The complaint also alleges that
Stockman and other defendants caused C&A to file financial
statements with the SEC that materially misrepresented C&A's
financial results. According to the complaint, during the time
Stockman was engaged in this conduct, he was collecting millions
of dollars in management fees C&A paid Stockman's private equity
fund, Heartland Industrial Partners.
As part of the settlement, the Commission has submitted proposed
stipulated dismissals of its fraud charges under Section 17(a)(1)
of the Securities Act and Section 10(b) and Rule 10b-5 under the
Exchange Act against Messrs. Stockman, Stepp, McCallum, Cosgrove,
and Barnaba. In addition, the Commission has submitted proposed
stipulated dismissals of all claims against defendants John G.
Galante, C&A's former Treasurer, Christopher M. Williams, C&A's
former Executive Vice President of Business Development, Gerald E.
Jones, C&A's former Chief Operating Officer and Executive Vice
President of Fabrics, and Thomas V. Gougherty, C&A's former
Controller-Plastics Division. C&A, without admitting or denying
the Commission's allegations, previously consented to the entry of
a final judgment permanently enjoining it from, among other
things, violating the antifraud provisions of the federal
securities laws, Section 17(a) of the Securities Act and Section
10(b) of the Exchange Act and Exchange Act Rule 10b-5.
The SEC's civil enforcement action will be concluded if the Court
approves the proposed settlements and dismissals.
About Collins & Aikman
Headquartered in Troy, Mich., Collins & Aikman Corporation --
http://www.collinsaikman.com/-- is a global leader in cockpit
modules and automotive floor and acoustic systems and is a leading
supplier of instrument panels, automotive fabric, plastic-based
trim, and convertible top systems. The Company has a workforce of
approximately 23,000 and a network of more than 100 technical
centers, sales offices and manufacturing sites in 17 countries
throughout the world. The Company and its debtor-affiliates filed
for chapter 11 protection on May 17, 2005 (Bankr. E.D. Mich.
Case No. 05-55927). Richard M. Cieri, Esq., at Kirkland & Ellis
LLP, represents C&A in its restructuring. Lazard Freres & Co.,
LLC, provides the Debtors with investment banking services.
Michael S. Stammer, Esq., at Akin Gump Strauss Hauer & Feld LLP,
represents the Official Committee of Unsecured Creditors
Committee. When the Debtors filed for protection from their
creditors, they listed $3,196,700,000 in total assets and
$2,856,600,000 in total debts.
On Aug. 30, 2006, the Debtors filed a Joint Chapter 11 Plan and a
Disclosure Statement explaining that plan. On Dec. 22, 2006, they
filed an Amended Plan and on Jan. 22, 2007, filed a modified
Amended Plan. On Jan. 25, 2007, the Court approved the adequacy
of the Disclosure Statement. On July 18, 2007, the Court
confirmed the Debtors' Liquidation Plan which became effective on
Oct. 12, 2007.
COLONIAL BANCGROUP: IBS Seeks to Acquire Substantial Interest
-------------------------------------------------------------
netDockets reports that IBS Capital, LLC of Boston, Massachusetts
has filed a notice with the Bankruptcy Court for the Middle
District of Alabama expressing its intention to become a
"Substantial Equityholder" in the preferred stock of The Colonial
BancGroup, Inc. The notice is required pursuant to a November 23,
2009 order entered by judge Dwight H. Williams, Jr. which
restricts transfers of interests in Colonial BancGroup to protect
certain tax attributes, including net operating loss carryforwards
and carrybacks, of Colonial's bankruptcy estate.
According to netDockets, for purposes of Judge Williams' order, a
substantial holder of Colonial's preferred stock is defined as a
holder of at least 14,250 shares (or approximately 4.75% of all
issued and outstanding shares). netDockets relates IBS Capital
disclosed that it currently owns 14,200 preferred shares, but
intends to increase its position to 29,700 shares by acquiring an
additional 15,500 shares. The party from whom IBS Capital intends
to acquire the additional shares is not named in the notice.
netDocket says that Colonial BancGroup and the Official Committee
of Unsecured Creditors appointed in its bankruptcy case each have
10 business days to review the proposed transaction and object to
it. If neither party objects within that time frame (or if both
earlier provide written authorization), IBS Capital can proceed
with the transaction. However, if either party timely objects,
IBS Capital is precluded from acquiring the additional preferred
shares unless the bankruptcy court specifically approves the
transaction in a final and nonappealable order.
About The Colonial BancGroup
Headquartered in Montgomery, Alabama, The Colonial BancGroup, Inc.
(NYSE: CNB) was holding company to Colonial Bank, N.A, its
banking subsidiary. Colonial bank -- http://www.colonialbank.com/
-- operated 354 branches in Florida, Alabama, Georgia, Nevada and
Texas with over $26 billion in assets. On August 14, 2009,
Colonial Bank was seized by regulators and the Federal Deposit
Insurance Corporation was named receiver. The FDIC sold most of
the assets to Branch Banking and Trust, Winston-Salem, North
Carolina. BB&T acquired $22 billion in assets and assumed
$20 billion in deposits of the Bank.
The 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.
CONSUMER PRODUCTS: Case Summary & 20 Largest Unsec. Creditors
-------------------------------------------------------------
Debtor: The Consumer Products Shippers' Ltd.
231 Blossum Ln
West Palm Beach, FL 33404
Bankruptcy Case No.: 10-20325
Chapter 11 Petition Date: April 19, 2010
Court: United States Bankruptcy Court
Southern District of Florida (West Palm Beach)
Judge: Paul G. Hyman, Jr.
Debtor's Counsel: Brian K. McMahon, Esq.
6801 Lake Worth Rd #315
Lake Worth, FL 33467
Tel: (561) 642-3000
Fax: (561) 965-4966
E-mail: briankmcmahon@gmail.com
Estimated Assets: $0 to $50,000
Estimated Debts: $1,000,001 to $10,000,000
A list of the Company's 20 largest unsecured creditors is
available for free at http://bankrupt.com/misc/flsb10-20325.pdf
The petition was signed by Warren Jeffery, president.
CORUS BANKSHARES: FDIC Closes on Loan & Asset-Backed Note Sale
--------------------------------------------------------------
The Federal Deposit Insurance Corporation closed on two note
offerings backed by performing and non-performing construction
loans, residential loans and real estate owned assets formerly
held by the FDIC as receiver for Corus Bank, N.A., Chicago, and
Franklin Bank, S.S.B, Houston. The sales were conducted through
private offerings to qualified purchasers.
The $1.38 billion of Corus notes are backed by performing and non-
performing construction loans and REO assets with a related
aggregate unpaid balance of approximately $4.5 billion. The notes
were originally issued in October 2009 to the Corus Bank
receivership in connection with the creation of an LLC to hold the
aforementioned assets, and are guaranteed by the FDIC in its
corporate capacity. The FDIC still retains its 60% equity interest
issued by the LLC, and ST Residential, formed by a consortium of
investors led by Starwood Capital Group, still owns the 40% equity
interest sold to it by the FDIC in October 2009.
The sale of the Corus notes sale features three classes of notes
with maturities of approximately 1.5 years, 2.5 years, and 3.5
years from the closing date. The notes do not accrue interest or
make payment prior to maturity, but rather are sold at a discount
to their principal balance and allow investors to earn the
difference between the sale price and the principal balance paid
at maturity. The timely payment of principal due on the notes is
guaranteed by the FDIC, and that guaranty is backed by the full
faith and credit of the United States.
The $653 million of Franklin notes are backed by performing and
non-performing residential loans and REO assets with a related
aggregate unpaid balance of approximately $1.22 billion. The
notes, which were restructured for the current transaction, were
originally issued in September 2009 to the Franklin Bank
receivership in connection with the creation of an LLC to hold the
aforementioned assets, and are guaranteed by the FDIC in its
corporate capacity and that guaranty is backed by the full faith
and credit of the United States. This original transaction was the
pilot sale of receivership assets to test the funding mechanism of
the Legacy Loans Program. The FDIC still retains its 50% equity
interest issued by the LLC, and RCS Franklin Venture still owns
the 50% equity interest sold to it by the FDIC in September 2009.
Proceeds in the amount of $1.31 billion generated from the notes
sale will go to the Corus Bank receivership, and proceeds in the
amount of $652 million (including accrued interest) generated from
the notes sale will go to Franklin Bank receivership.
Thus, the note sales will increase recoveries for the two
receiverships and recover substantial funds for the FDIC's Deposit
Insurance Fund.
Barclays Capital Inc., New York, served as the sole bookrunner,
structuring agent, and financial advisor to the FDIC on the sale
of both notes, and also as structuring agent and financial advisor
to the FDIC for the October 2009 structured sale of an equity
interest in the Corus Bank receivership assets to ST Residential.
These offerings mark the second and third sales of structured sale
notes by the FDIC since the early 1990s, and the second and third
sale of FDIC guaranteed debt backed by the full faith and credit
of the United States.
On September 11, 2009, Corus Bank, a wholly owned subsidiary of
Corus Bankshares, Inc., was closed by the Office of the
Comptroller of the Currency and the Federal Deposit Insurance
Corporation was appointed as receiver of Corus Bank. Since that
time, the Company has been working diligently with its financial
and professional advisers in considering its future options.
Bankruptcy Warning
As reported by the Troubled Company Reporter on March 10, 2010,
Corus Bankshares said a Chapter 11 or liquidation are among the
alternatives being considered by the Company. Corus said,
"Management is investigating alternatives for the Company's
future, including, but not limited to, reorganization under
Chapter 11, liquidation and the dissolution and winding up of the
Company. Given the Company's outstanding obligations and other
contingencies, the Company presently does not believe that there
will be any assets remaining to be distributed to its common
shareholders."
About Corus Bank
Corus Bank, N.A., was the banking subsidiary of Chicago, Illinois-
based Corus Bankshares, Inc. (NASDAQ: CORS). Corus Bank was
closed September 11, 2009, by regulators and the Federal Deposit
Insurance Corporation was named receiver. To protect the
depositors, the FDIC entered into a purchase and assumption
agreement with MB Financial Bank, National Association, Chicago,
Illinois, to assume all of the deposits of Corus Bank.
CREDITWEST CORPORATION: Gets Interim Okay to Use Cash Collateral
----------------------------------------------------------------
Creditwest Corporation sought and obtained interim authorization
from the Hon. Alan Jaroslovsky of the U.S. Bankruptcy Court for
the Northern District of California to use cash collateral
Texas Capital Bank, N.A. (TCB), has provided financing for the
Debtor's business. At present, the approximate payoff of the debt
owing to TCB is $6,896,787.02. TCB asserts a security interest in
the revenues generated from the Debtor's business activities.
The Court has authorized the Debtor to use the asserted cash
collateral of TCB to pay expenses that must be paid to preserve
the Debtor's business operations pending a further preliminary
hearing on the Debtor's motion at 10:00 a.m. on April 13, 2010.
To the extent that TCB has a lien on the Debtor's cash collateral
that is used, TCB is granted a replacement lien on the revenues
the Debtor generates post-petition and on the assets the Debtor
acquires post-petition.
The Debtor believes that TCB is adequately protected because the
requested use of cash collateral will preserve the cash flow
stream.
TCR is represented by Terrence V. Ponsford at Sheppard, Mullin,
Richter & Hampton LLP.
Rohnert Park, California-based CreditWest Corporation filed for
Chapter 11 bankruptcy protection on April 4, 2010 (Bankr. N.D.
Calif. Case No. 10-11212). Steven M. Olson, Esq., at the Law
Offices of Steven M. Olson, assists the Company in its
restructuring effort. The Company estimated its assets and debts
at $10,000,001 to $50,000,000.
DECODE GENETICS: Plan Confirmation Hearing Set for May 14
---------------------------------------------------------
The Hon. Peter J. Walsh of the U.S. Bankruptcy Court for the
District of Delaware will consider at a hearing on May 14, 2010,
at 9:30 a.m. (prevailing Eastern Time,) the confirmation of
deCODE Genetics Inc.'s Plan of Liquidation. Objections, if any,
are due on May 6, 2010, at 4:00 p.m. E.T. The Debtor may file a
reply to any objections by May 12, 2010, at 12:00 p.m. E.T.
The deadline for returning completed ballots is 4:00 p.m. E.T. on
May 6, 2010.
According to the Disclosure Statement, the Plan provides for the
liquidation of the Debtor's estate and the distribution of the
Debtor's assets to holders of allowed claims. The Plan also
contemplates the transfer of the Debtor's assets and liabilities
into the DGI liquidating trust.
Treatment of Claims
Type of Claim Treatment Estimated Recovery
------------- --------- ------------------
Class 1 Priority Claims Paid full in cash 100%
Class 2 Secured Claims Paid full in cash 100%
Class 3 General
Unsecured Claims Pro Rata Share 2.5% - 3.5%
Class 4 Interest No Distribution 0%
A full-text copy of the Disclosure Statement is available for free
at http://bankrupt.com/misc/DeCodeGenetics_AmendedDS.pdf
The Debtor is represented by:
Richards, Layton & Finger, P.A.
Attn: Mark D. Collins, Esq.
Christopher M. Samis, Esq.
One Rodney Square
920 North Ling Street
Wilmington, DE 19801
About deCODE Genetics
deCODE Genetics Inc. is a global leader in analyzing and
understanding the human genome. deCODE has identified key
variations in the sequence of the genome conferring increased risk
of major public health challenges from cardiovascular disease to
cancer, and employs its gene discovery engine to develop DNA-based
tests to assess individual risk of common diseases; to license its
tests and intellectual property to partners; and to provide
comprehensive, leading- edge contract services to companies and
research institutions around the globe. The Company was founded
in 1996 and is headquartered in Reykjavik, Iceland.
The Company filed for Chapter 11 on November 16, 2009 (Bankr. D.
Del. Case No. 09-14063). The petition listed assets of
$69.9 million against debt of $314 million. Liabilities include
$230 million on 3.5% senior convertible notes.
DEEP MARINE: Files Schedules of Assets and Liabilities
------------------------------------------------------
Deep Marine Technology Incorporated filed with the U.S. Bankruptcy
Court for the Southern District of Texas its schedules of assets
and liabilities, disclosing:
Name of Schedule Assets Liabilities
---------------- ----------- -----------
A. Real Property N/A
B. Personal Property $91,060,850
C. Property Claimed as
Exempt
D. Creditors Holding
Secured Claims $10,274,666
E. Creditors Holding
Unsecured Priority
Claims $313,629
F. Creditors Holding
Unsecured Non-priority
Claims $53,502,842
----------- -----------
TOTAL $91,060,850 $64,091,137
headquartered in Houston, Texas, Deep Marine Technology --
http://www.deepmarinetech.com/-- is an independent subsea service
provider to the Offshore Oil and Gas Industry. Deep Marine
Holdings, Inc., filed for chapter 11 bankruptcy protection (Case
No. 09-39314) on December 4, 2009, before the United States
Bankruptcy Court for the Southern District of Texas in Houston.
Affiliates Deep Marine Technology Inc., Deep Marine 1, LLC, Deep
Marine 2, LLC, Deep Marine 3, LLC, and Deep 4 Marine, LLC, also
sought bankruptcy protection.
The Debtors are represented by Bracewell & Guiliani, L.L.P. The
Debtors disclosed 100,000,001 to 500,000,000 in total assets.
DENNY HECKER: Trustee Tags Valuable Items for Auction
-----------------------------------------------------
Dee DePass at Star Tribune in Minneapolis-St. Paul, Minnesota,
reports that Matthew Burton, Esq. -- the lawyer for Randall L.
Seaver, the bankruptcy trustee in Denny Hecker's bankruptcy case
-- finally gained access to Mr. Hecker's Medina home Monday and
tagged valuable items for auction.
Star Tribune says Mr. Burton was accompanied by an auctioneer and
Mr. Hecker's criminal defense attorney Brian Toder, Esq. Star
Tribune says neither Mr. Hecker nor his girlfriend, Christi Rowan,
was present.
The Troubled Company Reporter said Wednesday that Mr. Seaver last
week asked the Bankruptcy Court for permission to bring the U.S.
Marshals after Ms. Rowan refused him entry to the Medina home she
shares with Mr. Hecker. According to St. Paul Pioneer Press in
Minnesota, the Court order authorized U.S. marshals to use
"reasonable force," if needed, to assist the Bankruptcy Trustee.
The marshals weren't needed Monday, however, according to Star
Trubine.
About Denny Hecker
Denny Hecker filed for Chapter 7 bankruptcy on June 4, 2009,
before the U.S. Bankruptcy Court for the District of Minnesota.
Mr. Hecker listed $18 million in assets and $767 million in debts
owed to automakers, lenders, business partners and former
employees.
According to the Star Tribune in Minneapolis-St. Paul, the
bankruptcy filing had been widely anticipated. Star Tribune noted
Mr. Hecker has been forced to sell or close 25 of his 26
dealerships in recent months, and Chrysler Financial won a
$477 million court judgment against him in April. The bankruptcy
filing temporarily halted efforts by Chrysler and other creditors
from collecting money they say they are owed.
The Troubled Company Reporter on November 20 said Bankruptcy Judge
Robert Kressel held Mr. Hecker in contempt of court for failing to
turn over his financial records in a timely manner.
William R. Skolnick, Esq., at Skolnick & Shiff, P.A., in
Minneapolis, represents Mr. Hecker.
ELES BROS: Selling Four Parcels in Pittsburgh for $265,000
----------------------------------------------------------
Jeffrey J. Sikirica, the Chapter 11 Trustee overseeing Eles Bros.,
Inc.'s Chapter 11 proceeding (Bankr. W.D. Pa. Case No. 05-23954),
is asking the U.S. Bankruptcy Court for the Western District of
Pennsylvania for authority to sell four parcels of real estate
located at 801 Knoll Drive in Pittsburgh, Pa., to the Urban
Redevelopment Authority for $265,000. Objections, if any, must be
filed and served by Apr. 29, 2010. The Honorable Thomas P.
Agresti has scheduled a sale hearing for May 6, 2010, at which
time he will entertain any higher and better offers. Arrangements
for inspection of the property prior to the sale hearing may be
made with:
Jeffrey J. Sikirica
121 Northbrook Drive
Gibsonia PA 15044
Telephone: 724-625-2566
E-mail: TrusteeSikirica@consolidated.net
ERICKSON RETIREMENT: Court Okays Valuation of Assets Under Plan
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Texas
approved the valuation of Erickson Retirement Communities LLC and
its debtor-affiliates' assets and allocation of the proceeds of
the sale of the Debtors' assets to Redwood-ERC Senior Living
Holdings, LLC, as set forth in the Debtors' Fourth Amended Joint
Plan of Reorganization.
The valuation is adopted for all matters relating to the
confirmation of the Plan, the Court ruled.
As previously reported, Strategic Ashby Ponds Lender LLC and
Strategic Concord Landholder, LP, reminded the Court that a Second
Amended Master Purchase and Sale Agreement entered between
Erickson Retirement Communities and Redwood-ERC Senior Living
Holdings, LLC, contemplates a bulk sale of the Debtors' assets for
$365 million. However, the Amended MSPA notes that Redwood will
be acquiring an aggregate of $29.4 million of the Debtors' cash as
part of the transaction and that $9 million of the sales proceeds
will be paid to the National Senior Campuses, Inc. Thus, the net
purchase price is actually $326.6 million, G. Martin Green, Esq.,
at Baker Botts L.L.P, in Dallas, Texas, points out. Moreover, the
MSPA does not allocate the sales price to any particular asset
being purchased but simply reserves a right for Redwood to
designate an allocation for tax purposes only, he notes. Against
this backdrop, the Strategic Entities asked the Court to determine
the allocation of the Transaction Proceeds among the assets being
sold under the Amended MSPA and allocate those proceeds to the
applicable Debtors owning those assets.
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: Seeks Approval of Sovereign Bank Settlement
----------------------------------------------------------------
Erickson Retirement Communities LLC seeks permission from the
U.S. Bankruptcy Court for the Northern District of Texas to enter
into a settlement and release agreement with Point View II, LLC,
PPF MF 3900 Gracefield Road, LLC and Sovereign Bank.
As previously reported, ERC initiated an adversary proceeding
against Sovereign Bank and PPF, seeking a declaratory judgment
that all of the conditions precedent to the termination of a
guaranty agreement have been met. CCVI acquired Point View
Campus, LLC and borrowed $25,000,000 from PPF. Prior to CCVI's
acquisition of Point View, the New Jersey Economic Development
Authority issued municipal bonds for $80,695,000 to CCVI. CCVI
obtained a letter of credit from Sovereign Bank to secure payment
on the bonds. Point View II and ERC provided a guaranty to
Sovereign Bank pursuant to a Guaranty Agreement.
Since Point View II is a wholly owned subsidiary of ERC and the
Plan contemplates that holders of certain allowed claims will be
paid in part out of the funds on deposit in an escrow account
held by Sovereign Bank as escrow agent, and because the remainder
of the Cedar Crest Receivable is being assigned to Redwood-ERC
Senior Living Holdings, LLC, the prosecution of an NJ Action will
have a direct, adverse impact on the Debtors' reorganization
efforts, Vincent P. Slusher, Esq., at DLA Piper LLP, in Dallas,
Texas, points out. The escrow account holds initial entrance
deposits of residents in Cedar Crest Retirement Community.
ERC also sought a preliminary injunction and temporary
restraining order against PPF and Sovereign, Bank enjoining (i)
PPF from prosecuting an action before the Superior Court of New
Jersey, Law Division, Morris County; and (ii) Sovereign Bank from
releasing the funds in the Escrow Account. The Debtors also
objected to Claim No. 1148 filed by Sovereign Bank.
To resolve their dispute, the Debtors, Point View II, PPF and
Sovereign Bank entered into the Settlement Agreement, the terms
of which are subject to the confirmation of the Fourth Amended
Joint Plan of Reorganization and the occurrence of the effective
date of the Plan.
The salient terms of the Settlement Agreement are:
(1) All funds held in the Escrow Account will be released to
PPF.
(2) Sovereign Bank acknowledges the termination of the
Guaranty Agreement, the Escrow Agreement and the Escrow
Fund Disbursement Agreement.
(3) Point View II acknowledges that in light of its failure
to timely pay at least six monthly payments on the PPF
Loan due under an amended promissory note and a
modification agreement, the entire indebtedness owed by it
to PPF is due and payable.
(4) Sovereign Bank acknowledges that the Guaranty Agreement it
entered with Point View II and ERC has terminated pursuant
to its own terms.
(5) Sovereign Bank will withdraw Claim No. 1148.
(6) The NJ Action will be dismissed upon release of the funds
in the Escrow Account to PPF.
(7) ERC will dismiss the Adversary Proceeding and the TRO
Motion.
(8) After the release of the Escrow Account funds, all funds,
including the Initial Entrance Deposits that have been
deposited into a revolving account pursuant to a trust
indenture among New Jersey Economic Development Authority,
CCVI, and Manufacturers Traders Trust Company, as trustee,
and that otherwise would have been deposited in the Escrow
Account or paid to Point View II pursuant to the Trust
Indenture, will be distributed solely to PPF until the
time that all sums due under the PPF Loan.
(9) The Settling Parties will exchange mutual releases from
any and all claims arising out the Guaranty Agreement, the
Escrow Agreement and the Escrow Fund Distribution
Agreement, other than the obligations set forth in the
Settlement Agreement.
(10) Pending approval of the Settlement Agreement and
confirmation of the Plan, the time for the parties to file
responses to the complaints in the NJ Action, Adversary
Proceeding, the TRO Motion and the Claim Objection will be
extended to June 1, 2010.
Mr. Slusher asserts that the Settlement Agreement resolves the
Claim Objection, Adversary Proceeding, TRO Motion and the NJ
Action without the need for costly litigation. Moreover, the
extension of the response deadline with respect to the subject
matter will allow the Plan confirmation process to move forward,
he maintains.
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: Coastwood Supports $9MM Auction Fee Payment
----------------------------------------------------------------
ERC Investment Holdings, LLC, referred to as Coastwood, submitted
to the U.S. Bankruptcy Court for the Northern District of Texas a
brief supporting Erickson Retirement Communities LLC and its
debtor-affiliates' intent to obtain the Court's permission to pay
the $9 million auction fee to Coastwood pursuant to the Debtors'
Fourth Amended Joint Plan of Reorganization.
Kevin M. Lippman, Esq., at Munsch Hardt Kopf & Harr, P.C., in
Dallas, Texas, tells the Court that the Auction Fee was the result
of a postpetition agreement reached between the Debtors and
Coastwood at a December 22, 2009 auction. The Debtors induced
Coastwood to submit a cash bid for $305 million and to continue
participating in the Auction in exchange for the Debtors'
agreement to the Auction Fee, he emphasizes. He asserts that the
Debtors' agreement to pay the Auction Fee provided a clear and
substantial benefit to the Debtors' estates and their
stakeholders.
The Auction Fee, Mr. Lippman elaborates, was structured in a
manner so as to guarantee that any amounts bid exceeding
$275 million would result in an immediate savings to the Debtors
of either $1.5 million or $2 million plus additional proceeds of
90% of any incremental bid exceeding $275 million to the Debtors'
estates for distribution to creditors.
By inducing Coastwood's continued participation in the Auction,
the Debtors ultimately obtained $81 million in cash that is
available for distribution to creditors under the Plan, Mr.
Lippman stresses.
For those reasons, Coastwood believes that the Auction Fee
satisfies the requirements for administrative priority treatment
pursuant to Section 503(b) of the Bankruptcy Code. In fact, the
Court authorized payment of the Auction Fee under Section 363(b)
of the Bankruptcy Code when it approved the Debtors' Bidding
Procedures, Mr. Lippman notes. Thus, in the alternative,
Coastwood believes that the Court may authorize payment of the
Auction Fee pursuant to Section 1129(a)(4) of the Bankruptcy
Code.
Mr. Lippman notes that the contemplated payment of the Auction
Fee was disclosed in the Disclosure Statement and in the
solicitation version of the Plan. Based on the benefit to the
Debtors' estates resulting from their agreement to pay the
Auction Fee, he asserts that the actual payment easily satisfies
the requirement that the Auction Fee be "reasonable."
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)
EXPRESSWAY DEVELOPMENT: Case Summary & 10 Largest Unsec. Creditors
------------------------------------------------------------------
Debtor: Expressway Development, LLC
P.O. Box 22100
Oklahoma City, OK 73123
Bankruptcy Case No.: 10-12088
Chapter 11 Petition Date: April 9, 2010
Court: United States Bankruptcy Court
Western District of Oklahoma (Oklahoma City)
Debtor's Counsel: Charles E. Wetsel, Esq.
Robertson & Williams
9658 North May Avenue, Suite 200
Oklahoma City, OK 73120
Tel: (405) 848-1944
E-mail: cwetsel@robertsonwilliams.com
Estimated Assets: $10,000,001 to $50,000,000
Estimated Debts: $10,000,001 to $50,000,000
The petition was signed by Frank J. Battle, manager.
List of Debtor's 10 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
99 I-35 Partners, LLC Private Loan $1,272,000
4880 South Lewis, Ste. 200
Tulsa, OK 74105
Bank 7 Bank Loan $469,179
1039 NW 63rd Street
Oklahoma City, OK 73116
CP3 Enterprises INc. Water Lines $90,000
Installation
Department of Environmental Civil Penalty $3,650
Quality
Fox Lake Home Owners Dues $2,500
James B. Battle Trust Loan $237,478
McCarty Brinlee Architects Architect Services $3,675
Oklahoma Natural Gas Co. Gas Line $40,000
Installaion
Smith Carney and Co, P.C. Accounting Services $5,550
Smith Roberts Baldischwiter Engineering Fees $30,000
EXTENDED STAY: Backs Centerbridge-Paulson Offer
-----------------------------------------------
Extended Stay Inc. is favoring a new offer proposed by
Centerbridge Partners LP and Paulson & Co. to invest in the
company as part of a plan to take it out of bankruptcy.
Extended Stay's board of directors lately signed a commitment
letter backing the new bid, which matched the offer of a group of
investors led by Starwood Capital Group and promised not to
charge any of the fees required under the Starwood group's
proposal, according to a report by The Wall Street Journal.
The new offer includes $450 million in cash, $200 million to
backstop a rights offering and as much as $255.4 million for
creditors who elect to take cash at a 30% discount to the value
of the stock the reorganization plan otherwise would give them.
The $450 million equity injection is for 43% of the new company
and the backstopped offering represents another 19% of the new
company, Bloomberg News reports.
Under the new Centerbridge-Paulson proposal, Extended Stay is
allowed to seek better offers. Extended Stay is set to hold an
open auction on May 27, Bloomberg relates.
"The boards of directors of the debtors determined that the
amended letter with the Centerbridge-Paulson investors was
superior to the Starwood agreement," Bloomberg News quoted Marcia
Goldstein, Esq., at Weil Gotshal & Manges LLP, in New York, as
telling Judge James Peck at an April 8 hearing.
Ms. Goldstein said Extended Stay has received a $150 million
deposit from Centerbridge and Paulson, and is hoping the Starwood
group would continue to participate in the auction, Bloomberg
News notes.
Starwood's lawyer, Bruce Zirinsky, Esq., at Greenberg Traurig
LLP, in New York, said he does not know if his client would bid,
according to the Bloomberg News report.
Should the Centerbridge-Paulson offer emerge as the winning bid,
they are expected to bring in Doug Geoga to become chairman of
Extended Stay.
Centerbridge and Paulson originally offered Extended Stay a
$450 million investment, consisting of a $225 million cash
contribution in exchange for a stake in a new reorganized company
and a $225 million backstopped rights offering. The initial
deal, however, was terminated after Extended Stay reached an
agreement with the Starwood group to obtain $905 million to fund
the reorganization plan of its affiliates.
The Starwood $905 million offer consists of a $450 million equity
investment, a $200 million rights offering backstopped by the
investors, and an additional $255.4 million fund for creditors
who will opt for cash instead of equity.
Extended Stay earlier withdrew its motions for approval of an
investment agreement with the Starwood group and for approval of
a Disclosure Statement describing a reorganization plan hinged on
the Starwood deal. The motions were supposed to be considered
for approval at hearings scheduled for April 8 and 22.
Prior to the withdrawal, Manufacturers and Traders Trust Company,
opposed approval of the Extended Stay-Starwood agreement, saying
it was unclear what assets were to be transferred to the new
company and whether Extended Stay has stake in those assets that
should be protected.
About Extended Stay
Extended Stay is the largest owner and operator of mid-price
extended stay hotels in the United States, holding one of the most
geographically diverse portfolios in the lodging sector with
properties located across 44 states (including 11 hotels located
in New York) and two provinces in Canada. As a result of
acquisitions and mergers, Extended Stay's portfolio has expanded
to encompass over 680 properties, consisting of hotels directly
owned or leased by Extended Stay or one of its affiliates.
Extended Stay currently operates five hotel brands: (i) Crossland
Economy Studios, (ii) Extended Stay America, (iii) Extended Stay
Deluxe, (iv) Homestead Studio Suites, and (v) StudioPLUS Deluxe
Studios.
Extended Stay Inc. and its affiliates filed for Chapter 11 on
June 15, 2009 (Bankr. S.D.N.Y. Case No. 09-13764). Judge James M.
Peck handles the case. Marcia L. Goldstein, Esq., at Weil Gotshal
& Manges LLP, in New York, represents the Debtors. Lazard Freres
& Co. LLC is the Debtors' financial advisors. Kurtzman Carson
Consultants LLC is the claims agent. Extended Stay had assets of
$7.1 billion and debts of $7.6 billion as of the end of 2008.
Bankruptcy Creditors' Service, Inc., publishes Extended Stay
Bankruptcy News. The newsletter provides gavel-to-gavel coverage
of the Chapter 11 proceedings undertaken by Extended Stay Inc. and
its various affiliates. (http://bankrupt.com/newsstand/or
215/945-7000).
EXTENDED STAY: Pushed to Bankruptcy by Buyout, Says Examiner
------------------------------------------------------------
The structure of the financing that was used in the acquisition
of Extended Stay Inc. and its affiliates pushed them to
bankruptcy, according to a report by the examiner appointed to
investigate what caused the hotel chain's bankruptcy.
In a 436-page report made public yesterday in the Chapter 11
cases of ESI and its affiliated debtors, Court-appointed examiner
Ralph Mabey opined that the financing was a "poor fit for an
operating business like Extended Stay."
"The financing was problematic not only because of the sheer
amount of leverage involved but also because the mechanics of the
loan agreements . . . were flawed and left the debtors with
very little margin for error," Mr. Mabey said.
The Debtors were acquired from Blackstone Group LP in 2007 by an
investment consortium led by Lightstone Group LLC Chairman David
Lichtenstein through a $7.4 billion loan from Bear Stearns
Commercial Mortgage Inc. and two U.S. banks. The loan consisted
of $4.1 billion in mortgage loans and $3.3 billion in mezzanine
loans.
When the Debtors filed for bankruptcy protection on June 15,
2009, they disclosed that they are "significantly over-leveraged"
and the projected cash flows could not continue to service over
$7 billion in debt.
The examiner report also noted that the Debtors inherited as much
as $1.7 billion in additional debt after the acquisition which
provided no benefit to them. Moreover, the additional debt
exceeded the benefits that should have been provided through the
buyout, including the benefit of the new owners' experience,
synergies resulting from business plans and strategies expected
to be employed by the new owner, among other things, the report
pointed out.
The new owners, Mr. Lichtenstein and Lightstone Group, did not
have the experience to operate a hotel chain. They also did not
bring any expected strategy to the organization that could be
called "consideration," Mr. Mabey said in his report.
The Examiner further opined that the Debtors' estates could
assert claims for unjust enrichment against the sellers, the
buyers and even those advisers involved in the 2007 acquisition.
"These parties were all enriched by the acquisition since they
each received benefits through payments received, directly or
indirectly, from money that was ultimately obtained through
borrowing against the Debtors' assets," Mr. Mabey said.
"These benefits came at the expense of the Debtors, [which]
experienced a significant depletion of their assets as a result
of the acquisition," he further said in the report.
A full-text copy of the ESI Examiner Report is available without
charge at http://bankrupt.com/misc/ESI_ExaminerReport.pdf
Blackstone spokesman Peter Rose said his company strongly
disagrees with the examiner report's conclusion, according to an
April 8 report by The Wall Street Journal.
"Blackstone sold Extended Stay in an open and competitive auction
to a purchaser who arranged financing with some of the largest
and most sophisticated lenders in the U.S.," WSJ quoted Mr. Rose
as saying. "The subsequent unprecedented economic crisis which
caused Extended Stay's bankruptcy . . . was not foreseeable at
the time of the transaction."
A spokeswoman for Lightstone declined to comment on the report,
according to WSJ.
About Extended Stay
Extended Stay is the largest owner and operator of mid-price
extended stay hotels in the United States, holding one of the most
geographically diverse portfolios in the lodging sector with
properties located across 44 states (including 11 hotels located
in New York) and two provinces in Canada. As a result of
acquisitions and mergers, Extended Stay's portfolio has expanded
to encompass over 680 properties, consisting of hotels directly
owned or leased by Extended Stay or one of its affiliates.
Extended Stay currently operates five hotel brands: (i) Crossland
Economy Studios, (ii) Extended Stay America, (iii) Extended Stay
Deluxe, (iv) Homestead Studio Suites, and (v) StudioPLUS Deluxe
Studios.
Extended Stay Inc. and its affiliates filed for Chapter 11 on
June 15, 2009 (Bankr. S.D.N.Y. Case No. 09-13764). Judge James M.
Peck handles the case. Marcia L. Goldstein, Esq., at Weil Gotshal
& Manges LLP, in New York, represents the Debtors. Lazard Freres
& Co. LLC is the Debtors' financial advisors. Kurtzman Carson
Consultants LLC is the claims agent. Extended Stay had assets of
$7.1 billion and debts of $7.6 billion as of the end of 2008.
Bankruptcy Creditors' Service, Inc., publishes Extended Stay
Bankruptcy News. The newsletter provides gavel-to-gavel coverage
of the Chapter 11 proceedings undertaken by Extended Stay Inc. and
its various affiliates. (http://bankrupt.com/newsstand/or
215/945-7000).
FAIRFIELD RESIDENTIAL: Hearing on Och-Ziff Ouster Set for Today
---------------------------------------------------------------
The Hon. Brendan L. Shannon U.S. Bankruptcy Court for the District
of Delaware will consider at a hearing today, April 22, at 9:00
a.m. (Easter Daylight Time), approval of a settlement agreement
reached by Fairfield Residential LLC and its units.
The Debtors sought approval of the settlement agreement entered
among California State Teachers' retirement System and Och-Ziff
Real Estate Acquisitions LP.
The terms of the settlement include, among other things:
a. Acquisitions will immediately withdraw as a new money
investor pursuant to the Plan;
b. The March 5 agreement will be terminated; and
c. CalSTRS will irrevocably and unconditionally release
Acquisitions from any and all charges.
CalSTRS and Acquisitions served as new money investors, agreeing
to invest, in the aggregate, $119.5 million in the Debtors'
reorganization. In order to facilitate the complex series of
transactions, CalSTRS and Acquisitions entered into the Och-Ziff
Real Estate/CalStrs Proposed Investment in Fairfield/Newco letter
agreement dated as of March 5, 2010. One of the key provisions
had the effect of locking-up CalSTRS with Acquisitions through
June 30, 2010.
The Debtors relate that after the approval of the Disclosure
Statement, they reviewed Acquisitions' communications with
potential third party investors and determined to withdraw
Acquisitions from the Chapter 11 process.
The Debtors believe that the settlement will allow third party
investors to conduct due diligence, move forward with an
alternative transaction and facilitate the Debtors' emergence from
Chapter 11.
About Fairfield Residential
San Diego, California-based Fairfield Residential LLC is a fully
integrated multifamily housing company that through its various
subsidiaries provides a diverse mix of services to a wide range of
investors, joint venture partners and clients. FFR either
directly or indirectly acts as a general partner or managing
member of, and owns varying stakes in, a number of project level
operating companies.
The Company and its affiliates -- FF Development, Inc., et al. --
filed for Chapter 11 bankruptcy protection on December 13, 2009
(Bankr. D. Delaware Case No. 09-14378). Daniel J. DeFranceschi,
Esq.; Lee E. Kaufman, Esq.; Paul Noble Heath, Esq.; and Travis A.
McRoberts, Esq., at Richards, Layton & Finger, P.A., assist the
Debtors in their restructuring efforts. The Official Committee of
Unsecured Creditors is represented by Brett H. Miller, Esq.,
Stefan W. Engelhardt, Esq., and Melissa A. Hager, Esq., at
Morrison & Foerster LLP; and William E. Chipman Jr., Esq., Kerri
K. Mumford, Esq., and Kimberly A. Brown, Esq., at Landis Rath &
Cobb LLP. Fairfield Residential listed $100,000,001 to
$500,000,000 in assets and more than $1,000,000,000 in
liabilities. Dow Jones says Fairfield listed assets worth
$958 million and liabilities of nearly $835 million.
FEDERAL-MOGUL: Eyes Companies Developing Emerging Technologies
--------------------------------------------------------------
Federal-Mogul Corporation is eyeing to acquire companies that
develop emerging technologies for electric vehicles, Crain's
Detroit Business reported on April 4, 2010.
Jose Maria Alapont told Crain's that the company is in talks to
acquire at least two undisclosed companies, which deals would
bring new technologies needed for electric and hybrid electric
vehicles to its existing portfolio of engine and safety
components.
"There is real competition in today's technologies for current
vehicles, but for vehicle electrification, we need to take into
consideration that all the technologies that are specifically
unique to the electrification of the vehicle . . . those
technologies are brand new," Crain's quoted Mr. Alapont as saying.
"The volumes today are very small (for electrified vehicles,)" Mr.
Alapont said. "That means whoever gets into those
technologies, you need to globalize it."
Mr. Alapont recently entered into an amended employment agreement
to extend his employment through 2013 as Federal-Mogul's president
and CEO. He said that he is turning 60 this year and has
considered retiring. However, he said, the opportunity to lead
Federal-Mogul in an automotive market that is on the mend was made
him want to stay, Crain's reports.
"That has changed my mind, and I have finally decided to stay for
a longer period," Mr. Alapont added.
About Federal-Mogul
Federal-Mogul Corporation -- http://www.federalmogul.com/-- is a
global supplier of powertrain and safety technologies, serving the
world's foremost original equipment manufacturers of automotive,
light commercial, heavy-duty, agricultural, marine, rail, off-road
and industrial vehicles, as well as the worldwide aftermarket.
The company's leading technology and innovation, lean
manufacturing expertise, as well as marketing and distribution
deliver world-class products, brands and services with quality
excellence at a competitive cost. Federal-Mogul is focused on its
sustainable global profitable growth strategy, creating value and
satisfaction for its customers, shareholders and employees.
Federal-Mogul was founded in Detroit in 1899. The company is
headquartered in Southfield, Michigan, and employs nearly 39,000
people in 36 countries.
The Company filed for Chapter 11 protection on October 1, 2001
(Bankr. Del. Case No. 01-10582). Lawrence J. Nyhan Esq., James F.
Conlan, Esq., and Kevin T. Lantry, Esq., at Sidley Austin Brown &
Wood, and Laura Davis Jones, Esq., at Pachulski, Stang, Ziehl &
Jones, P.C., represented the Debtors in their restructuring
efforts. When the Debtors filed for protection from their
creditors, they listed $10.15 billion in assets and $8.86 billion
in liabilities. Federal-Mogul Corp.'s U.K. affiliate, Turner &
Newall, is based at Dudley Hill, Bradford. Peter D. Wolfson,
Esq., at Sonnenschein Nath & Rosenthal; and Charlene D. Davis,
Esq., Ashley B. Stitzer, Esq., and Eric M. Sutty, Esq., at The
Bayard Firm represented the Official Committee of Unsecured
Creditors.
The Debtors' Fourth Amended Plan was confirmed by the Bankruptcy
Court on November 8, 2007, and affirmed by the District Court on
November 14, 2007. Federal-Mogul emerged from Chapter 11 on
December 27, 2007. (Federal-Mogul Bankruptcy News; Bankruptcy
Creditors' Service Inc., http://bankrupt.com/newsstand/or
215/945-7000)
* * *
As reported by the TCR on June 5, 2009, Standard & Poor's Ratings
Services said it has lowered its corporate credit rating on
Federal-Mogul Corp. to 'B+' from 'BB-'. S&P also lowered the
ratings on the company's senior secured debt; the recovery ratings
are unchanged. The outlook is negative. "The ratings reflect
Federal-Mogul's weak business risk profile as
a major participant in the highly competitive global auto
industry, and its aggressive financial risk profile," S&P said.
FEDERAL-MOGUL: Named GM's Supplier of the Year
----------------------------------------------
Federal-Mogul Corporation (Nasdaq:FDML - News) has received the
prestigious 2009 Supplier of the Year Award from General Motors,
in recognition of its performance in engine piston products.
Federal-Mogul supplies aluminum pistons, rings and connecting rods
to General Motors for both passenger cars and light trucks. This
is the third consecutive year Federal-Mogul has received the GM
award.
Federal-Mogul President and Chief Executive Officer Jose Maria
Alapont accepted the award from Bob Socia, GM group vice
president, Global Purchasing and Supply Chain, during a
presentation held March 11 at the GM Design Dome in Warren,
Michigan.
"We're very honored to receive this award, as it demonstrates our
continued focus on meeting and exceeding high performance
standards for General Motors," Mr. Alapont said. "We remain
committed to providing world-class, innovative products and
services for GM and value our strategic development and supply
partnership with the company."
The award recognizes the significant contributions of GM's
suppliers in 2009 as part of the company's global product and
performance achievements. The Supplier of the Year program
started in 1992, and each year a global team of purchasing,
engineering, quality, manufacturing and logistics executives
determines the winners.
"We look forward to continue developing a long-term relationship
based on strategic businesses that benefit both companies," said
Mr. Socia.
About Federal-Mogul
Federal-Mogul Corporation -- http://www.federalmogul.com/-- is a
global supplier of powertrain and safety technologies, serving the
world's foremost original equipment manufacturers of automotive,
light commercial, heavy-duty, agricultural, marine, rail, off-road
and industrial vehicles, as well as the worldwide aftermarket.
The company's leading technology and innovation, lean
manufacturing expertise, as well as marketing and distribution
deliver world-class products, brands and services with quality
excellence at a competitive cost. Federal-Mogul is focused on its
sustainable global profitable growth strategy, creating value and
satisfaction for its customers, shareholders and employees.
Federal-Mogul was founded in Detroit in 1899. The company is
headquartered in Southfield, Michigan, and employs nearly 39,000
people in 36 countries.
The Company filed for Chapter 11 protection on October 1, 2001
(Bankr. Del. Case No. 01-10582). Lawrence J. Nyhan Esq., James F.
Conlan, Esq., and Kevin T. Lantry, Esq., at Sidley Austin Brown &
Wood, and Laura Davis Jones, Esq., at Pachulski, Stang, Ziehl &
Jones, P.C., represented the Debtors in their restructuring
efforts. When the Debtors filed for protection from their
creditors, they listed $10.15 billion in assets and $8.86 billion
in liabilities. Federal-Mogul Corp.'s U.K. affiliate, Turner &
Newall, is based at Dudley Hill, Bradford. Peter D. Wolfson,
Esq., at Sonnenschein Nath & Rosenthal; and Charlene D. Davis,
Esq., Ashley B. Stitzer, Esq., and Eric M. Sutty, Esq., at The
Bayard Firm represented the Official Committee of Unsecured
Creditors.
The Debtors' Fourth Amended Plan was confirmed by the Bankruptcy
Court on November 8, 2007, and affirmed by the District Court on
November 14, 2007. Federal-Mogul emerged from Chapter 11 on
December 27, 2007. (Federal-Mogul Bankruptcy News; Bankruptcy
Creditors' Service Inc., http://bankrupt.com/newsstand/or
215/945-7000)
* * *
As reported by the TCR on June 5, 2009, Standard & Poor's Ratings
Services said it has lowered its corporate credit rating on
Federal-Mogul Corp. to 'B+' from 'BB-'. S&P also lowered the
ratings on the company's senior secured debt; the recovery ratings
are unchanged. The outlook is negative. "The ratings reflect
Federal-Mogul's weak business risk profile as
a major participant in the highly competitive global auto
industry, and its aggressive financial risk profile," S&P said.
FEDERAL-MOGUL: To Hold 1st Qtr 2010 Fin'l Results Call on April 28
------------------------------------------------------------------
Federal-Mogul Corporation (Nasdaq: FDML) announced that the
Company's first quarter 2010 financial results conference call and
audio Web cast will be held on Wednesday, April 28, 2010, at
10:00 a.m., EDT.
To participate in the call:
Domestic calls: 888-680-0894
International calls: 617-213-4860
Pass code I.D. # 27899418
To facilitate rapid connection the morning of the call, please
click
https://www.theconferencingservice.com/prereg/key.process?key=PP8
JXVKUG
to pre-register.
The live audio Web cast will be available in the Investor
Relations section of the corporate Web site --
http://www.federalmogul.com/investors-- on April 28, 2010.
An audio replay of the call will be available two hours following
the call and will be accessible until May 28, 2010 at:
Domestic calls: 888-286-8010
International calls: 617-801-6888
Pass code I.D. # 20301319
The first quarter press release can be downloaded on Wednesday,
April 28 at 7:30 a.m., EDT, by clicking here
[http://federalmogul.mediaroom.com].
Investor Relations Contact:
David Pouliot
(248) 354-7967
David.Pouliot@federalmogul.com
About Federal-Mogul
Federal-Mogul Corporation -- http://www.federalmogul.com/-- is a
global supplier of powertrain and safety technologies, serving the
world's foremost original equipment manufacturers of automotive,
light commercial, heavy-duty, agricultural, marine, rail, off-road
and industrial vehicles, as well as the worldwide aftermarket.
The company's leading technology and innovation, lean
manufacturing expertise, as well as marketing and distribution
deliver world-class products, brands and services with quality
excellence at a competitive cost. Federal-Mogul is focused on its
sustainable global profitable growth strategy, creating value and
satisfaction for its customers, shareholders and employees.
Federal-Mogul was founded in Detroit in 1899. The company is
headquartered in Southfield, Michigan, and employs nearly 39,000
people in 36 countries.
The Company filed for Chapter 11 protection on October 1, 2001
(Bankr. Del. Case No. 01-10582). Lawrence J. Nyhan Esq., James F.
Conlan, Esq., and Kevin T. Lantry, Esq., at Sidley Austin Brown &
Wood, and Laura Davis Jones, Esq., at Pachulski, Stang, Ziehl &
Jones, P.C., represented the Debtors in their restructuring
efforts. When the Debtors filed for protection from their
creditors, they listed $10.15 billion in assets and $8.86 billion
in liabilities. Federal-Mogul Corp.'s U.K. affiliate, Turner &
Newall, is based at Dudley Hill, Bradford. Peter D. Wolfson,
Esq., at Sonnenschein Nath & Rosenthal; and Charlene D. Davis,
Esq., Ashley B. Stitzer, Esq., and Eric M. Sutty, Esq., at The
Bayard Firm represented the Official Committee of Unsecured
Creditors.
The Debtors' Fourth Amended Plan was confirmed by the Bankruptcy
Court on November 8, 2007, and affirmed by the District Court on
November 14, 2007. Federal-Mogul emerged from Chapter 11 on
December 27, 2007. (Federal-Mogul Bankruptcy News; Bankruptcy
Creditors' Service Inc., http://bankrupt.com/newsstand/or
215/945-7000)
* * *
As reported by the TCR on June 5, 2009, Standard & Poor's Ratings
Services said it has lowered its corporate credit rating on
Federal-Mogul Corp. to 'B+' from 'BB-'. S&P also lowered the
ratings on the company's senior secured debt; the recovery ratings
are unchanged. The outlook is negative. "The ratings reflect
Federal-Mogul's weak business risk profile as
a major participant in the highly competitive global auto
industry, and its aggressive financial risk profile," S&P said.
FIDDLER'S CREEK: GBFC Marina Files Schedules of Assets & Debts
--------------------------------------------------------------
GBFC Marina, Ltd., a debtor-affiliate of Fiddler's Creek, LLC,
filed with the U.S. Bankruptcy Court for the Middle District of
Florida its schedules of assets and liabilities, disclosing:
Name of Schedule Assets Liabilities
---------------- ----------- -----------
A. Real Property $10,640,000
B. Personal Property $394,056
C. Property Claimed as
Exempt
D. Creditors Holding
Secured Claims $9,407,360
E. Creditors Holding
Unsecured Priority
Claims $76,256
F. Creditors Holding
Unsecured Non-priority
Claims $5,095,963
----------- -----------
TOTAL $11,034,056 $14,579,579
In a separate filing, Fiddler's Creek, LLC, listed $0 assets and
debts, and most entries with unknown value.
About Fiddler's Creek
Fiddler's Creek, LLC, et al., each own, operate and/or are
otherwise affiliated with the premier, fully integrated, master
planned residential community known as "Fiddler's Creek" in
southwestern Florida. Fiddler's Creek is located in Collier
County, Florida, approximately 12 miles southeast of the City of
Naples and six miles north of Marco Island. The Fiddler's Creek
development is comprised of nearly 4,000 zoned acres of prime land
in Naples, Florida, and is planned for and capable of
accommodating up to 6,000 residences upon projected build-out,
which is estimated to be in 2020. Fiddler's Creek contains five
distinctive neighborhoods known as: Fiddler's Creek, Veneta,
Aviamar, Marsh Cove and Meadow Run.
Naples, Florida-based Fiddler's Creek, LLC, filed for Chapter 11
bankruptcy protection on February 23, 2010 (Bankr. M.D. Fla. Case
No. 10-03846). The Company estimated assets and debts at
$100,000,001 to $500,000,000.
FRANKLIN BANK: FDIC Closes on Loan & Asset-Backed Note Offering
---------------------------------------------------------------
The Federal Deposit Insurance Corporation closed on two note
offerings backed by performing and non-performing construction
loans, residential loans and real estate owned assets formerly
held by the FDIC as receiver for Corus Bank, N.A., Chicago, and
Franklin Bank, S.S.B, Houston. The sales were conducted through
private offerings to qualified purchasers.
The $1.38 billion of Corus notes are backed by performing and non-
performing construction loans and REO assets with a related
aggregate unpaid balance of approximately $4.5 billion. The notes
were originally issued in October 2009 to the Corus Bank
receivership in connection with the creation of an LLC to hold the
aforementioned assets, and are guaranteed by the FDIC in its
corporate capacity. The FDIC still retains its 60% equity interest
issued by the LLC, and ST Residential, formed by a consortium of
investors led by Starwood Capital Group, still owns the 40% equity
interest sold to it by the FDIC in October 2009.
The sale of the Corus notes sale features three classes of notes
with maturities of approximately 1.5 years, 2.5 years, and 3.5
years from the closing date. The notes do not accrue interest or
make payment prior to maturity, but rather are sold at a discount
to their principal balance and allow investors to earn the
difference between the sale price and the principal balance paid
at maturity. The timely payment of principal due on the notes is
guaranteed by the FDIC, and that guaranty is backed by the full
faith and credit of the United States.
The $653 million of Franklin notes are backed by performing and
non-performing residential loans and REO assets with a related
aggregate unpaid balance of approximately $1.22 billion. The
notes, which were restructured for the current transaction, were
originally issued in September 2009 to the Franklin Bank
receivership in connection with the creation of an LLC to hold the
aforementioned assets, and are guaranteed by the FDIC in its
corporate capacity and that guaranty is backed by the full faith
and credit of the United States. This original transaction was the
pilot sale of receivership assets to test the funding mechanism of
the Legacy Loans Program. The FDIC still retains its 50% equity
interest issued by the LLC, and RCS Franklin Venture still owns
the 50% equity interest sold to it by the FDIC in September 2009.
Proceeds in the amount of $1.31 billion generated from the notes
sale will go to the Corus Bank receivership, and proceeds in the
amount of $652 million (including accrued interest) generated from
the notes sale will go to Franklin Bank receivership.
Thus, the note sales will increase recoveries for the two
receiverships and recover substantial funds for the FDIC's Deposit
Insurance Fund.
Barclays Capital Inc., New York, served as the sole bookrunner,
structuring agent, and financial advisor to the FDIC on the sale
of both notes, and also as structuring agent and financial advisor
to the FDIC for the October 2009 structured sale of an equity
interest in the Corus Bank receivership assets to ST Residential.
These offerings mark the second and third sales of structured sale
notes by the FDIC since the early 1990s, and the second and third
sale of FDIC guaranteed debt backed by the full faith and credit
of the United States.
About Franklin Bank
Franklin Bank, S.S.B., Houston, Texas, was closed November 7,
2208, by the Texas Department of Savings and Mortgage Lending, and
the Federal Deposit Insurance Corporation was named receiver. To
protect the depositors, the FDIC entered into a purchase and
assumption agreement with Prosperity Bank, El Campo, Texas, to
assume all of the deposits, including those that exceeded the
insurance limit, of Franklin Bank.
As of September 30, 2008, Franklin Bank had total assets of
$5.1 billion and total deposits of $3.7 billion. Prosperity Bank
agreed to assume all the deposits, including the brokered
deposits, for a premium of 1.7 percent. In addition to assuming
all of the failed bank's deposits, Prosperity Bank will purchase
approximately $850 million of assets. The FDIC said it will
retain the remaining assets for later disposition.
GEMS TV: Cash Declining to $19.2 Million by July 2
--------------------------------------------------
Bill Rochelle at Bloomberg News reports that Gems TV (USA) Ltd.,
filed a cash-flow projection showing that cash would top out last
week at about $24.6 million. Cash is expected to decline to $19.2
million by July 2.
Reno, Nevada-based Gems TV (USA) Limited, aka Gems TV, is a
television retailer of gemstone jewelry products. Its parent is
Gems TV Holdings Ltd., which owns and operates jewelry home
shopping TV channels in the U.S., U.K. and Japan.
The Company filed for Chapter 11 bankruptcy protection on April 5,
2010 (Bankr. D. Del. Case No. 10-11158). Robert S. Brady, Esq.,
and Robert F. Poppiti, Jr., Esq., at Young, Conaway, Stargatt &
Taylor, assist the Company in its restructuring effort. Focus
Management Group is the Company's financial advisor. Epiq
Bankruptcy Solutions serves as claims and notice agent. The
Company listed $10,000,000 to $50,000,000 in assets and
$100,000,000 to $500,000,000 in liabilities.
GENBAND INC: Moody's Assigns 'B2' Corporate Family Rating
---------------------------------------------------------
Moody's Investors Service assigned a B2 corporate family rating
to first time issuer GENBAND, Inc., and B2 ratings to its
$250 million secured debt pending GENBAND's acquisition of Nortel
Networks Corporation's Carrier VoIP, Applications and Solutions
business. The debt along with approximately $175 million of
equity from a private equity firm, One Equity Partners and cash on
hand will be used to finance the acquisition. The ratings outlook
is stable.
The B2 rating reflects the market leading positions of the
combined businesses' VoIP softswitch and gateway carrier grade
equipment but tempered by the recent price erosion and modest
growth prospects in the evolving carrier VoIP equipment industry.
The ratings also recognize the complexity and challenges inherent
in integrating the two businesses, a concern that is partially
addressed by the large cash position at closing (approximately
$195 million). The cash is expected to fund initial working
capital needs, restructuring and transition expenses as well as
providing a substantial cushion. Given the risks and costs
associated with the integration, the cash level is critical to
supporting the B2 rating. While trailing EBITDA of the combined
companies is essentially breakeven, combining the two businesses
and rationalizing the cost structure should result in double digit
EBITDA margins and leverage levels under 3x by 2011. As such, the
ratings are prospective and reflect Moody's expectation of the
business post the integration period.
Nortel's CVAS business has experienced several years of declines
driven by the combination of shrinking legacy TDM switch business,
carrier cutbacks due to the downturn, Nortel Network's bankruptcy
filing and significant price erosion in the VoIP softswitch and
media gateway product lines. Industry analysts expect some modest
growth in fixed IP switching in 2010. Carriers are expected to
continue their conversion to IP based networks and replace legacy
switches with VoIP systems, however, network designs continue to
evolve and the company will need to continue to address potential
shifts, including shifts to IMS architected networks. Competition
is fierce in the sector and contributes to the significant pricing
pressure of recent years. The combined companies will have a
significantly broader product portfolio which should facilitate
bundled offerings as well as an ability to contend with several
much larger competitors. Nortel brings one of the largest
installed bases of legacy fixed switches in the industry along
with deep relationships and understanding of the major carriers'
networks. Moody's views these relationships to be critical to the
success of the combined entities. The challenge to GENBAND will
be preserving these relationships while attempting to aggressively
reduce the cost structure (largely headcount) of the combined
businesses.
The stable ratings outlook reflects the likelihood that the large
cash balances will be sufficient to fund the integration and
provide an adequate cushion should problems arise. The ratings
could face downward pressure if revenues continue to decline or
the business does not show signs of generating positive free cash
flow by year end 2010.
These ratings were assigned:
* Corporate family rating: B2
* Probability of default: B2
* $250 million senior secured term loan due 2015, B2, LGD3, 45%
* Ratings outlook: stable
GENBAND, headquartered in Plano, Texas, is a leading provider of
carrier VoIP equipment and had 2009 revenues of $134 million.
Nortel's CVAS business, had 2009 revenues of approximately
$687 million.
GENBAND INC: S&P Assigns Corporate Credit Rating at 'B'
-------------------------------------------------------
Standard & Poor's Ratings Services said it assigned its 'B'
corporate credit rating to Plano, Texas-based next-generation
media and security gateway solutions provider GENBAND Inc. The
outlook is negative.
At the same time, S&P assigned GENBAND's proposed $250 million
term loan B a 'B' rating with a recovery of '3', indicating S&P's
expectation for meaningful (50&-70%) recovery in the event of a
payment default. Together with $175 million of private common
equity (provided by One Equity Partners, the private-equity arm of
JP Morgan), the company will use the proceeds of the loan to
finance the acquisition of substantially all assets of the Nortel
Carrier VoIP and Application Solutions Business.
"The rating reflects significant integration risks related to the
purchase of the CVAS business, which is about 5x the size of
GENBAND," said Standard & Poor's credit analyst Jennifer Pepper,
"and modest liquidity given restructuring costs S&P expect, as
well as its dependence on sizable cost-cutting initiatives to
attain profitability." An improved competitive position as a
result of the combination and strong market shares partially
offsets these factors.
GENERAL GROWTH: Simon Receives Add'l $1.1-Bil. to Boost Bid
-----------------------------------------------------------
imon Property Group, Inc., has received $1.1 billion in new
capital commitments from ING Clarion Real Estate Securities, Oak
Hill Advisors, RREEF and Taconic Capital Advisors to support a
recapitalization of General Growth Properties, Inc. These
commitments are in addition to the previously announced
$2.5 billion proposed investment by SPG and $1 billion co-
investment commitment by Paulson & Co. SPG's firm, fully financed
proposal would be at the same per-share price as the Brookfield-
sponsored proposal but without the expensive and highly dilutive
equity warrants that GGP proposes to issue to Brookfield, Pershing
Square and Fairholme Capital.
David Simon, Chairman and Chief Executive Officer of SPG, said,
"We are pleased to announce the addition of these new investors to
our proposed GGP recapitalization. This is a highly sophisticated
collection of investors with a deep knowledge of the real estate
industry. Their participation further underscores the fact that
dilutive warrants required by Brookfield, which could cost GGP
shareholders $895 million, are unnecessary and unfair to GGP's
current shareholders. We are continuing to have productive
discussions with additional parties interested in co-investing in
GGP without requiring these costly warrants."
Mr. Simon continued: "Importantly, our proposed recapitalization
would result in a new GGP with less concentrated ownership among a
diverse group of investors, including dedicated, real-estate
focused institutions with a longer-term investment outlook and who
are better positioned to support the future growth of the
company."
About Simon Property Group
Simon Property Group, Inc. -- http://www.simon.com-- is an S&P
500 company and the largest real estate company in the U.S. The
Company currently owns or has an interest in 381 properties
comprising 260 million square feet of gross leasable area in North
America, Europe and Asia. Simon Property Group is headquartered
in Indianapolis, Indiana and employs more than 5,000 people
worldwide. The Company's common stock is publicly traded on the
NYSE under the symbol SPG.
About General Growth
Based in Chicago, Illinois, General Growth Properties, Inc. --
http://www.ggp.com/-- is the second-largest U.S. mall owner,
having ownership interest in, or management responsibility for,
more than 200 regional shopping malls in 44 states, as well as
ownership in master planned community developments and commercial
office buildings. The Company's portfolio totals roughly
200 million square feet of retail space and includes more than
24,000 retail stores nationwide. General Growth is a self-
administered and self-managed real estate investment trust. The
Company's common stock is trading in the pink sheets under the
symbol GGWPQ.
General Growth Properties Inc. and its affiliates filed for
Chapter 11 on April 16, 2009 (Bankr. S.D.N.Y., Case No.
09-11977). Marcia L. Goldstein, Esq., Gary T. Holtzer, Esq.,
Adam P. Strochak, Esq., and Stephen A. Youngman, Esq., at Weil,
Gotshal & Manges LLP, have been tapped as bankruptcy counsel.
Kirkland & Ellis LLP is co-counsel. Kurtzman Carson Consultants
LLC has been engaged as claims agent. The Company also hired
AlixPartners LLP as financial advisor and Miller Buckfire Co. LLC,
as investment bankers. The Debtors disclosed
$29,557,330,000 in assets and $27,293,734,000 in debts as of
December 31, 2008.
Bankruptcy Creditors' Service, Inc., publishes General Growth
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by General Growth Properties Inc. and its various
affiliates. (http://bankrupt.com/newsstand/or 215/945-7000)
GLUTH BROTHERS: Bank Lender Not Entitled to Defense Costs
---------------------------------------------------------
WestLaw reports that a bank whose sole claim in the debtor-
borrower's Chapter 11 case had been disallowed, after its
prepetition loan was fully paid out of proceeds from the sale of
the debtor's assets and by a guarantor of the debtor's debt, did
not have an allowed secured claim, and was not entitled to
attorney fees that it incurred in defense of deepening insolvency,
lender liability and other claims that were subsequently asserted
against it by the trustee of a creditors' trust established under
the debtor's confirmed plan. Indeed, the bankruptcy statute
pursuant to which it sought these fees, which was applicable to
creditors holding allowed secured claims to the extent that their
claims were oversecured, 11 U.S.C. Sec. 506(b), was inapplicable
postconfirmation. In re Gluth Bros. Const., Inc., --- B.R. ----,
2010 WL 1169789 (Bankr. N.D. Ill.).
Gluth Bros. Construction, Inc., a construction project contractor
based in Woodstock, Ill., sought chapter 11 protection (Bankr.
N.D. Ill. Case No. 07-71375) on June 5, 2007. Robert R. Benjamin,
Esq., at Querrey & Harrow, Ltd., in Chicago, represents the
Debtor. At the time of the filing, the Debtor disclosed
$3,214,430 in assets and liabilities totalling $8,150,879. On
March 4, 2009, the Court entered an order confirming a Plan of
Liquidation Dated January 27, 2009. Pursuant to the Plan, and the
Gluth Bros. Construction, Inc. Creditor Trust Agreement, entered
into among the Debtor, the Official Committee of Unsecured
Creditors and the Creditor Trustees, all remaining property of the
Debtor's estate, including causes of action, were vested in the
Creditor Trust, and the Creditor Trustees were granted the
authority to commence actions. Charles Dixon and Charles Graeber,
Jr., serve as the Trustees of the Creditor Trust. The Trust is
represented by Shira R. Isenberg, Esq., at Freeborn & Peters
LLP in Chicago.
GRAY TELEVISION: Moody's Assigns 'Caa2' Rating on $365 Mil. Notes
-----------------------------------------------------------------
Moody's Investors Service assigned a Caa2 rating to the proposed
$365 million issuance of guaranteed senior secured second lien
notes due 2015 by Gray Television, Inc. At the same time, Moody's
upgraded its Probability of Default Rating and Speculative Grade
Liquidity Rating for the company, to Caa1 from Caa2 and to SGL-2
from SGL-4, respectively. The former Caa1 (LGD3-34%) ratings for
the company's existing Revolving Credit Facility due 2014 (now
totaling $40 million, vs. $50 million previously) and Term Loan
due 2014 ($792 million outstanding at 12/31/09, to be reduced with
net proceeds from the pending offering) were also upgraded, to B2
(LGD2-28%). The rating outlook was also revised to stable from
negative. Gray's Caa1 Corporate Family Rating remains unchanged.
The aforementioned rating actions are predicated on the assumed
successful completion of the pending transactions. Gray plans to
utilize the net offering proceeds to repay a portion of its first
lien senior secured term loan and Series D perpetual preferred
stock. In Moody's estimation, the refinancing would improve the
company's liquidity profile by extending maturities for a
meaningful portion of its debt while notably increasing previously
restrictive and unmanageable headroom under bank credit facility
financial maintenance covenants. While the transaction will
likely increase Gray's run-rate of cash interest, Moody's projects
this will be partially offset by repayment of the first lien term
loan from free cash flow and a reduction of current "incentive"
and other fees governed by the existing amended credit agreement.
Upgrades:
Issuer: Gray Television, Inc.
-- Probability of Default Rating, Upgraded to Caa1 from Caa2
-- Speculative Grade Liquidity Rating, Upgraded to SGL-2 from
SGL-4
-- Senior Secured Bank Credit Facility, Upgraded to B2, LGD2-28%
from Caa1, LGD3-34%
Assignments:
Issuer: Gray Television, Inc.
-- Senior Secured (Second Lien) Regular Bond/Debenture due 2015,
Assigned Caa2, LGD5-82%
Outlook Actions:
Issuer: Gray Television, Inc.
-- Outlook, Changed to Stable from Negative
The rating outlook change to stable is based on Gray's improved
liquidity profile pro forma for the assumed successful completion
of the transaction and Moody's expectation for an improved
advertising outlook. Moody's expects the combination of an
overall improvement in the broadcast advertising market and the
boost from political revenue in 2010 will raise Gray's EBITDA and
free cash flow considerably this year. Further, Moody's believes
the projected improvement in operating performance along with the
elimination of Gray's current net total leverage covenant (and
subsequent introduction of more flexible net first-lien leverage
and fixed charge coverage tests, calculated on an eight quarter
average basis, and again assuming the transaction is completed)
will enable Gray to maintain EBITDA cushion exceeding 15% over the
next 12 months, notwithstanding a tightening of requisite covenant
compliance levels. The increased headroom and improving free cash
flow drive the speculative grade liquidity rating upgrade to SGL-2
from SGL-4.
The upgrade of the PDR to the same level of the CFR (vs. the
former one-notch difference) is driven by the perceived reduction
in estimated default risk resulting from the proposed transaction
and the introduction of junior capital which now affords the bank
debt an important layer of first-loss position debt cushion
beneath it. This, in turn, supports the two-notch upgrade of the
existing rated bank debt to B2 from Caa1, with a notable reduction
in loss given default estimate to LGD2-28% from LGD3-34%.
Gray's Caa1 CFR continues to reflect the strong local market
position of its portfolio of broadcast television assets offset by
the company's still very high debt-to-EBITDA financial leverage of
about 12.7x (LTM 12/31/2009 incorporating Moody's standard
adjustments), which resulted in large part from the substantial
decline in cyclical advertising revenue during the most recent
economic downturn. The cash flow profile is supported,
nonetheless, by the strength of the company's news franchise and
ability to garner significant political revenues in its local
markets. Gray's disproportionate level of political revenue on a
comparative basis with other TV broadcasters leads to some added
volatility in the company's credit metrics, however, and limits
free cash generation in non-political years.
"Moody's views the company's current level of financial leverage,
as exacerbated by a concentrated maturity profile, to be
unsustainable for a TV broadcaster and indicative of elevated
restructuring risk over the longer-term," according to Russell
Solomon, Senior Vice President. Pro forma for the pending
transaction, all of Gray's debt (including its debt-like Series D
Preferred Stock) comes due in 2014-2015. Moody's believes Gray
will need to significantly reduce its debt with free cash flow and
will probably need to issue additional equity in order to further
moderate its leverage profile over the next few years prior to
accessing the capital markets again to refinance current
obligations. The Caa1 CFR incorporates Moody's view that leverage
will remain excessive over at least the next two years.
The company's improved liquidity position should provide greater
flexibility to manage through another advertising downturn and
realize the potential de-leveraging benefits of a recovery in
economic conditions and the advertising market. In the event that
Gray's cash flow growth and debt repayments associated with an
economic rebound ultimately drive leverage materially lower, there
could be upward rating momentum in future periods.
The Caa2 rating for the proposed senior secured second lien notes
reflects their effective subordination to Gray's senior secured
first lien bank credit facility. The notes are expected to be
guaranteed on a senior secured (albeit second lien) basis by all
of the company's current and future domestic subsidiaries.
Moody's last rating action for Gray occurred on April 1, 2009,
when it lowered the company's CFR to Caa1 from B3, its PDR to Caa2
from Caa1, and the senior secured credit facility ratings to Caa1
from B3.
Headquartered in Atlanta, Georgia, Gray Television, Inc., operates
36 primary television stations serving 30 mid-sized markets. The
company's total revenues were approximately $270 million for the
year ended December 31, 2009.
GRAY TELEVISION: S&P Assigns 'CCC' Rating on $365 Mil. Notes
------------------------------------------------------------
Standard & Poor's Ratings Services assigned Gray Television Inc.'s
proposed $365 million senior secured second-lien notes due 2015
its issue-level rating of 'CCC' with a recovery rating of '6',
indicating S&P's expectation of negligible (0% to 10%) recovery
for noteholders in the event of a payment default.
At the same time, S&P placed its 'CCC' corporate credit rating for
the company, as well as the 'CCC' issue-level rating on the
company's senior secured credit facilities, on CreditWatch with
positive implications.
The company plans to use the net proceeds of the second-lien notes
issue to repay a portion of its term loan borrowings, repurchase
some of its series D preferred stock, and pay related fees and
expenses. This rating assumes the notes' successful placement and
will be withdrawn if the issuance is not completed. If the notes
offering is successful, S&P could raise the corporate credit
rating, possibly by two notches, to 'B-'. A two-notch upgrade and
a $365 million notes issuance would also likely lead to a change
in S&P's recovery rating on Gray's senior secured credit
facilities, which will have a first lien on the company's assets,
to '2' from '4'. This would, in turn, lead to an upgrade of the
issue-level rating on this debt to 'B', one notch higher than the
corporate credit rating, in accordance with S&P's notching
criteria for a recovery rating of '2'.
"The positive CreditWatch listing reflects S&P's view that
Atlanta-based TV broadcaster Gray's financial performance is
beginning to turn around and could improve significantly in 2010,"
explained Standard & Poor's credit analyst Deborah Kinzer.
"However, absent a successful notes issue, the company still faces
very high pricing on its bank debt and a steep covenant tightening
in the first quarter of 2011. Even with the offering, Gray's
leverage remains extremely high and its interest coverage is
thin."
On March 31, 2010, Gray amended its credit agreement to loosen its
financial covenants. The amendment also reduced revolving credit
commitments to $40 million from $50 million. The amendment
imposes on Gray an additional fee of 2% per annum, payable
quarterly in arrears, until such time as the company completes an
offering of capital stock or debt securities that results in the
repayment of at least $200 million under the term loan.
In resolving S&P's CreditWatch listing, S&P will evaluate Gray's
capital structure following the completion of the notes offering.
S&P could raise the rating by up to two notches, depending on the
final size of the notes issuance and the company's pro forma
interest expense and bank covenants under the new capital
structure. On the other hand, S&P could affirm the rating with a
negative outlook if the notes issuance is unsuccessful or if the
size of the issuance is reduced such that Gray is unable to repay
at least $200 million of term loan outstandings, in view of the
company's very high interest expense and drastic leverage covenant
tightening in the first quarter of 2011.
GRYPHON HOLDINGS: SEC Halts Internet-Based Scam
-----------------------------------------------
The Securities and Exchange Commission charged a Staten Island,
N.Y.-based investment advisory firm, its owner, and four
associates with operating an Internet-based scam that misleads
investors into paying fees for phony stock tips and investment
advice from fictional trading experts. The SEC obtained an
emergency court order to freeze the assets of the firm and
individuals involved.
The SEC alleges that Gryphon Holdings Inc., owner Kenneth E.
Marsh, and the Gryphon associates induced investors to pay fees of
up to $250,000 for securities recommendations that they falsely
claim are based on sound research and successful strategies of
trading experts with superior knowledge. In an effort to lend
legitimacy to the firm's advisory business, Gryphon touts trading
experts with fake names who boast millions of dollars in trading
riches as well as top-notch educational backgrounds and prominent
experience at major Wall Street firms. Gryphon representatives
even fabricated glowing testimonials from George Soros and
purported clients who profited by trading securities the firm
recommended.
According to the SEC's complaint, filed in U.S. District Court for
the Eastern District of New York, investors who followed the
guidance of Gryphon's purported experts have suffered significant
losses by trading on those tips or, in at least one instance, by
allowing Gryphon to trade on their behalf.
"Gryphon and its associates attracted clients through postings on
the Internet that falsely exaggerated their investment prowess,"
said George S. Canellos, Director of the SEC's New York Regional
Office. "They sold a bill of goods by pretending to be legitimate
money managers with a long track record of extraordinary returns,
distinguished clients, and hundreds of millions of dollars under
management."
David Rosenfeld, Associate Director of the SEC's New York Regional
Office, added, "They touted offices on Wall Street and around the
world while, in reality, defrauding investors from a strip mall on
Staten Island. Gryphon was nothing more than a sham designed to
separate clients from their money."
In addition to Gryphon and Marsh, the SEC's complaint charges
Baldwin Anderson and Robert Anthony Budion, both of Staten Island,
N.Y., Jeanne Lada, of Freehold, N.J., and James Levier of
Beachwood, N.J.
According to the SEC's complaint, Gryphon obtained more than
$17.5 million from its operations over the past three years.
Gryphon and its associates made numerous material
misrepresentations and omissions since at least 2007 to entice
unsuspecting clients to purchase its services. Gryphon's
representatives used high-pressure tactics to obtain additional
fees from clients to purportedly give those clients access to
"better" yielding investment tips, even if Gryphon had not
provided all the advisory services for which the client had
already paid.
The SEC specifically alleges that Gryphon falsely touted that it:
* Has significant trading operations
* Manages or advises hedge funds with holdings in excess of
$1.4 billion
* Has a principal who "pull[ed] in revenues that exceed
$50 billion"
* Has a "self made billionaire" who is a "great stock picker"
* Has key personnel who were educated at prestigious
institutions or who were affiliated with major investment
banks
* Received an endorsement from George Soros
The SEC's complaint alleges that Gryphon made these and many other
material misrepresentations in the course of inducing clients to
purchase investment services or providing personalized securities
recommendations to clients.
Gryphon markets itself as a publisher of financial information.
Gryphon frequently posts investment tips on the Internet using at
least 40 different monikers such as "Wolves of Wall Street," "Wall
Street's Most Wanted," "Pure Profit," and "Mafia Trader." In
reality, as alleged in the SEC's complaint, Gryphon's financial
publications only serve as a vehicle to attract unsuspecting
clients to pay fees for personalized investment recommendations,
portfolio analysis, and money management services that Gryphon
purportedly provided.
The Honorable Jack B. Weinstein of the U.S. District Court for the
Eastern District of New York granted the SEC's request for a
temporary restraining order and asset freeze against the
defendants and six others, including Marsh's wife, who each
obtained in excess of $500,000 from Gryphon's bank account.
The SEC's investigation is continuing.
The Commission would like to thank the U.S. Attorney's Office for
the Eastern District of New York and the United States Postal
Inspection Service for its assistance and cooperation in this
matter.
HAWAII MEDICAL: Shareholders & Unsecureds Submit Chapter 11 Plan
----------------------------------------------------------------
Linda Cheim at Pacific Business News reports that Hawaii Medical
Center's physician shareholders and unsecured creditors filed a
joint Chapter 11 plan of reorganization.
According to Pacific Business News, the plan creates a new 11-
member public board of directors. It also promises to pay all
of the approximately $49 million it owes to one of its biggest
lenders and the hospitals' former owners, St. Francis Healthcare
System of Hawaii, over a period of seven years.
The competing plan of the sister of St. Francis seeking to take
back the the hospitals they once owned is yet to be addressed, Ms.
Cheim says. Both plans went out to creditors for a confirmation
votes this week. A court confirmation hearing is set for May 24,
2010, Ms. Cheim notes.
About Hawaii Medical Center
Hawaii Medical Center is the first for-profit, physician-owned
hospital in the state. In January 2007, Hawaii Physician Group
LLC together with Cardiovascular Hospitals of America (CHA), a
leading U.S. hospital management company, established the new
Hawaii Medical Center with two hospital campuses on Oahu - HMC
West in Ewa Beach and HMC East in Liliha. HPG membership is
nearly 130 physicians strong and the group retains 49% ownership
of HMC, with the other 51% retained by CHA.
Wichita, Kansas-based CHA Hawaii LLC, and its affiliates --
including Hawaii Medical Center LLC -- filed for Chapter 11
protection on Aug. 29, 2008 (Bankr. D. Del. Case No. 08-12027).
Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP
represents the Debtors in their restructuring efforts. The
Debtors listed assets of between $1 million and $10 million and
liabilities of between $50 million and $100 million when they
filed for bankruptcy.
HAWAIIAN TELCOM: Court Approves $6.4MM Fee Payment to Lazard & FTI
------------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware authorized
Hawaiian Telcom Communications, Inc., and its debtor-affiliates to
pay Lazard Freres & Co. LLC $4,000,000 in fees and $206,569 in
expenses for the period from December 1, 2008 through November 30,
2009. The Debtors are also authorized to (i) pay Lazard any
holdback amount, and (ii) reimburse Lazard for any applicable
state of Hawaii General Excise Tax incurred in connection with the
Debtors' Chapter 11 cases.
The Court ruled that with respect to FTI Consulting, Inc.'s final
fee application, the expenses to be reimbursed to the firm is
decreased from $153,840 to $151,240. The fees awarded to FTI
total $2,438,710 for services rendered for the period from
December 12, 2008, to December 18, 2009.
About Hawaiian Telcom
Based in Honolulu, Hawaii, Hawaiian Telcom Communications, Inc.
-- http://www.hawaiiantel.com/-- operates a telecommunications
company, which offers an array of telecommunications products and
services including local and long distance service, high-speed
Internet, wireless services, and print directory and Internet
directory services.
The Company and seven of its affiliates filed for Chapter 11
protection on December 1, 2008 (Bankr. D. Del. Lead Case No.
08-13086). As reported by the TCR on December 30, 2008, Judge
Peter Walsh of the U.S. Bankruptcy Court for the District of
Delaware approved the transfer of the Chapter 11 cases to the U.S.
Bankruptcy Court for the District of Hawaii before Judge Lloyd
King (Bankr. D. Hawaii Lead Case No. 08-02005).
Richard M. Cieri, Esq., Paul M. Basta, Esq., and Christopher J.
Marcus, Esq., at Kirkland & Ellis LLP, represent the Debtors in
their restructuring efforts. The Debtors proposed Lazard Freres &
Co. LLC as investment banker; Zolfo Cooper Management LLC as
business advisor; Deloitte & Touche LLP as independent auditors;
and Kurztman Carson Consultants LLC as notice and claims agent.
An official committee of unsecured creditors has been appointed
and is represented by Christopher J. Muzzi, Esq., at Moseley Biehl
Tsugawa Lau & Muzzi LLC, in Honolulu, Hawaii.
When the Debtors filed for protection from their creditors, they
listed total assets of $1,352,000,000 and total debts of
$1,269,000,000 as of September 30, 2008.
Bankruptcy Creditors' Service, Inc., publishes Hawaiian Telcom
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by Hawaiian Telcom Communications, Inc., and seven of
its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000)
HAWKEYE RENEWABLE: Wants Plan Exclusivity Until June 19
-------------------------------------------------------
Bill Rochelle at Bloomberg News reports that Hawkeye Renewables
LLC is asking a June 19 extension of its exclusive period to
propose a Chapter 11 plan. A hearing on the request is scheduled
for May 11.
Hawkeye Renewables has filed a prepackaged plan. The Plan grants
ownership of the reorganized company and new secured term loan to
the prepetition first-lien lenders. The second lien holders would
receive stock if they vote in favor of the Plan. Unsecured
creditors and equity holders won't receive anything.
According to the report, the second lien lenders opposed the Plan
at three days of confirmation hearings that concluded March 12.
The bankruptcy judge told the contending parties to submit post-
trial papers by April 30.
A copy of the Plan is available for free at:
http://bankrupt.com/misc/HAWKEYE_plan.pdf
A copy of the disclosure statement is available for free at:
http://bankrupt.com/misc/HAWKEYE_disclosurestatement.pdf
http://bankrupt.com/misc/HAWKEYE_disclosurestatement2.pdf
About Hawkeye Renewables
Ames, Iowa-based Hawkeye Renewables, LLC -- dba Iowa Falls Ethanol
Plant, LLC -- filed for Chapter 11 bankruptcy protection on
December 21, 2009 (Bankr. D. Delaware Case No. 09-14461). L.
Katherine Good, Esq., and Mark D. Collins, Esq., at Richards,
Layton & Finger, P.A., assist the Company in its restructuring
effort. Blackstone Advisory Partners, LP, is the Company's
financial advisor. Epiq Bankruptcy Solutions, LLC, is the
Company's claims agent. The Company listed $100,000,001 to
$500,000,000 in assets and $500,000,001 to $1,000,000,000 in
liabilities.
HICKS ROAD: Case Summary & 4 Largest Unsecured Creditors
--------------------------------------------------------
Debtor: Hicks Road, LLC
8521 Windolyn Circle, North
Bartlett, TN 38133
Bankruptcy Case No.: 10-04141
Chapter 11 Petition Date: April 19, 2010
Court: U.S. Bankruptcy Court
Middle District of Tennessee (Nashville)
Judge: Marian F. Harrison
Debtor's Counsel: Paul E. Jennings, Esq.
Paul E. Jennings Law Offices, P.C.
805 South Church Street Suite 3
Murfreesboro, TN 37130
Tel: (615) 895-7200
Fax: (615) 895-7294
E-mail: paulejennings@bellsouth.net
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $500,001 to $1,000,000
A copy of the Company's list of 4 largest unsecured creditors
filed together with the petition is available for free at
http://bankrupt.com/misc/tnmb10-04141.pdf
The petition was signed by Victor Bishara, managing member.
HOLIDAY 360: Gets Interim Okay to Use Cash Collateral
-----------------------------------------------------
Holiday 360, LTD., et al., sought and obtained interim
authorization from the U.S. Bankruptcy Court for the Northern
District of Texas to use cash collateral of Hall Stay 190-Holiday
DFW LLC and Hall Element DFW, LLC.
Keith M. Aurzada, Esq., at Bryan Cave LLP, the attorney for the
Debtors, explains that the Debtors need the money to fund their
Chapter 11 case, pay suppliers and other parties. The Debtors
will use the collateral pursuant to a budget, a copy of which is
available for free at:
http://bankrupt.com/misc/HOLIDAY_360_budget.pdf
In exchange for using cash collateral, the Debtors will grant the
Hall Lenders valid, perfected, and enforceable replacement
security interests in and liens and mortgages upon all categories
of property of the Debtors and their estates.
A final hearing on the Debtors' request to use cash collateral
won't be set until the motion to transfer venue is filed and
decided.
Irving, Texas-based Holiday 360 Ltd. is a single asset real
estate. It filed for Chapter 11 bankruptcy protection on April 5,
2010 (Bankr. N.D. Texas Case No. 10-42412). The Company estimated
its assets and debts at $10,000,000 to $50,000,000.
These affiliates filed separate Chapter 11 petitions on April 5,
2010:
-- Hotel 635 Beltline, LP (Case No. 10-42415), estimating its
assets and debts at $10 million to $50 million; and
-- Stay 190, Ltd. (Case No. 10-42413), estimating its
assets and debts at $10 million to $50 million.
John C. Leininger, Esq., at Bryan Cave LLP, assist the Debtors in
their restructuring efforts.
HOVNANIAN ENTERPRISES: Fitch Affirms 'CCC' Issuer Default Rating
----------------------------------------------------------------
Fitch Ratings has affirmed Hovnanian Enterprises, Inc.'s ratings:
-- Issuer Default Rating at 'CCC';
-- Senior secured notes at 'B-/RR3';
-- Senior secured notes (third lien) at 'C/RR6';
-- Senior unsecured notes at 'C/RR6';
-- Senior subordinated notes at 'C/RR6';
-- Series A perpetual preferred stock at 'C/RR6'.
The Rating Outlook is Negative.
Fitch's Recovery Rating of 'RR3' on HOV's senior secured notes
indicates good recovery prospects for holders of these debt
issues. The 'RR6' on HOV's senior secured (third lien), senior
unsecured notes, senior subordinated notes and preferred stock
indicates poor recovery prospects in a default scenario. HOV's
exposure to claims made pursuant to performance bonds and the
possibility that part of these contingent liabilities would have a
claim against the company's assets were considered in determining
the recovery for the unsecured debt holders. Fitch applied a
liquidation value analysis for these RRs.
The rating for HOV is influenced by the company's execution of its
business model, land policies and geographic, price point and
product line diversity as well as its liquidity position. While
Fitch expects somewhat better prospects for the housing industry
this year, the Rating Outlook for HOV remains Negative given the
challenges still facing the housing market, which are likely to
meaningfully moderate the early stages of this recovery, and the
company's still substantial debt position and high leverage.
The company reported homebuilding revenues of $312 million during
the first quarter of 2010 (1Q'10), a 14.6% decline compared to the
same period last year. Total deliveries, excluding unconsolidated
joint ventures, declined 9.7% while the average sales price fell
4.6% during the quarter. Gross margins, excluding impairment
charges, improved to 9.6% during the 1Q'10 from (0.6%) during the
1Q'09. SG&A expenses as a percentage of sales remain elevated at
18.5% during the 1Q'10 but are lower than the 24% recorded last
year. HOV reported a pretax loss of $55 million during the 1Q'10,
which included $5 million of inventory impairment charges and a
$2.6 million gain from the early extinguishment of debt. The
pretax loss for the 1Q'09 was $177.8 million, including
$110.2 million of inventory impairment charges and a $79.5 million
gain from the early extinguishment of debt. Net orders for the
quarter decreased 5.1% to 912 homes and the company had 1,593
homes in backlog with a value of $505.4 million at the end of the
first quarter. Cancellation rates improved to 21% during the
1Q'10 from 31% last year and 24% during the prior quarter.
Housing apparently bottomed during 2009, and a so far anemic
recovery has begun. During the next 12-15 months off the bottom,
the recovery may appear jaw-toothed as substantial foreclosures
now in the pipeline present as distressed sales and as meaningful
new foreclosures arise from Alt-A and option ARM resets. High
unemployment rates and the tightening of certain Federal Housing
Administration loan standards will be notable headwinds early in
the upcycle. The continuation and expansion of the scope of the
national housing credit may boost sales in spring of this year.
And the Federal government's continuing efforts to modify
foreclosures may finally show some success in 2010.
Over the past year, HOV has lowered its absolute debt levels
through the repurchase of debt in open market transactions and
cash tender offers. Total homebuilding debt declined from
$2.6 billion at Oct. 31, 2008, to $1.76 billion at Jan. 31, 2010.
Since the end of the first quarter, the company purchased
approximately $76.4 million of principal amount of its unsecured
senior notes and $11.2 million of its senior subordinated notes
for approximately $70.8 million in cash. HOV's debt maturities in
the next two years are manageable at roughly $103 million. The
company had $328.3 million of unrestricted cash at Jan. 31, 2010.
Subsequent to the end of the first quarter, the company also
received $274.1 million of federal income tax refund and expects
to receive an additional $17.2 million later this year.
During the fourth quarter of 2009, HOV announced the termination
of its $300 million revolving credit facility, which provided
$100 million of borrowings for general corporate purposes and
$200 million for the issuance of letters of credit. Following the
termination of the credit facility, HOV entered into certain stand
alone cash collateralized letter of credit agreements. At
Jan. 31, 2010, there were $117.1 million of letters of credit
issued under these facilities that were collateralized with
$121.3 million of cash. Consistent with Fitch's comment on
homebuilders' termination of revolving credit facilities, in the
absence of a revolving credit line, a consistently higher level of
cash and equivalents than was typical should be maintained on the
balance sheet, especially in these still uncertain times.
HOV generated cash flow from operations of negative $51.4 during
the 1Q'10. Cash flow from operations totaled negative
$111.3 million for the latest 12 months from Jan. 31, 2010. For
all of fiscal 2010, Fitch expects HOV to be cash flow negative,
excluding tax refunds, as the company starts to rebuild its land
position (through land purchases and development spending).
During the first quarter, the company spent $77 million on
approximately 2,100 lots, which included previously optioned lots
as well as newly identified land parcels.
At Jan. 31, 2010, the company controlled 31,264 lots (including
unconsolidated joint ventures), of which 56% were owned and the
remaining lots controlled through options and joint venture
partnerships. Based on the LTM closings, HOV controlled 5.7 years
of land and owned roughly 3.2 years of land.
Fitch will continue to monitor broad housing market trends as well
as company-specific activity, such as land and development
spending, general inventory levels, speculative inventory
activity, gross and net new-order activity, debt levels (including
the potential for additional debt repurchases) and especially free
cash flow trends and uses and the company's cash position.
HPT DEVELOPMENT: Files Schedules of Assets and Liabilities
----------------------------------------------------------
HPT Development Corporation filed with the U.S. Bankruptcy Court
for the District of Arizona its schedules of assets and
liabilities, disclosing:
Name of Schedule Assets Liabilities
---------------- ----------- -----------
A. Real Property $14,475,000
B. Personal Property $218,278
C. Property Claimed as
Exempt
D. Creditors Holding
Secured Claims $12,380,440
E. Creditors Holding
Unsecured Priority
Claims $64,736
F. Creditors Holding
Unsecured Non-priority
Claims $2,507,094
----------- -----------
TOTAL $14,693,278 $14,952,270
Paradise Valley, Arizona-based HPT Development Corporation filed
for Chapter 11 bankruptcy protection on March 10, 2010 (Bankr. D.
Ariz. Case No. 10-06294). D. Lamar Hawkins, Esq., at Aiken Schenk
Hawkins & Ricciardi PC, assists the Company in its restructuring
effort. The Company listed $10,000,001 to $50,000,000 in assets
and $10,000,001 to $50,000,000 in liabilities.
INNKEEPERS USA: Preparing for Bankruptcy; Misses Debt Payment
-------------------------------------------------------------
Innkeepers USA Trust is getting ready for a possible bankruptcy
filing after missing debt payments earlier this month, Reuters
reports, citing four people familiar with the matter. According
to Reuters, the sources said Innkeepers has hired law firm
Kirkland & Ellis and investment bankers Moelis & Co. to advise it
on restructuring.
Palm Beach, Florida-based Innkeepers USA Trust is a U.S. real
estate investment trust with interests in about 73 hotels. It was
bought out by Apollo Investment Corp. in 2007 in a $1.5 billion
deal.
Reuters relates that Innkeepers a week ago said it missed interest
payments on some debt and warned that it could miss future
payments. According to Reuters, Fitch Ratings said on Tuesday
that an $825.4 million loan on 45 hotels owned by Innkeepers was
transferred to the care of special servicer Midland Loan Services.
Reuters, citing a report from ratings agency Realpoint, said the
loan on the hotels had been halved and securitized into two
commercial mortgage-backed securities deals.
Reuters relates that, according to Realpoint, the 45 properties
represent more than 60% of Innkeepers' hotels in the United States
and the portfolio was originally appraised at $1.173 billion at
issuance near the height of the U.S. commercial real estate boom
in 2007.
INTELLIPHARMACEUTICS: Reports $1.4MM Net Loss for Q1 Ended Feb. 28
------------------------------------------------------------------
Intellipharmaceutics International Inc. posted a net loss of
$1,427,533 on $2,597 of revenue for the three months ended
February 28, 2010, compared with a net loss of $573,011 on
$224,372 of revenue for the three months ended March 31, 2009.
The Company's balance sheet as of February 28, 2010, showed
$8,081,074 in assets, $4,814,813 of debts, and $3,266,261 of
stockholders' equity.
"The Company has incurred losses from operations since inception,
and has an accumulated deficit of $14,734,004. As the Company has
several projects in the research and development stage, it expects
to incur additional losses and require additional financial
resources to support its operating activities for the foreseeable
future. The continuation of the Company's research and
development activities and the commercialization of its products
are dependent upon the Company's ability to successfully complete
its research programs, protect its intellectual property and
finance its cash requirements on an ongoing basis.
"If the Company is not able to raise additional funds to finance
its operations for the foreseeable future, there is substantial
doubt about the Company's ability to continue as a going concern
and realize its assets and pay its liabilities as they become
due."
A full-text copy of the Company's financial statements for the
three months ended February 28, 2010, is available for free at:
http://researcharchives.com/t/s?606e
About the Company
Toronto, Ontario-based Intellipharmaceutics International Inc.
(Nasdaq: IPCI) (TSX: I) -- http://www.intellipharmaceutics.com/--
is a pharmaceutical company specializing in the research,
development and manufacture of controlled and targeted novel oral
solid drugs. The Company's patented Hypermatrix(TM) technology is
a unique and validated multidimensional controlled-release drug
delivery platform that can be applied to the efficient development
of a wide range of existing and new pharmaceuticals. Based on
this technology, Intellipharmaceutics has a pipeline of products
in various stages of development in therapeutic areas that include
neurology, cardiovascular, GIT, pain and infection. Several of
these products are partnered.
Intellipharmaceutics' lead generic product under development is
Dexmethylphenidate XR (dexmethylphenidate hydrochloride), a
generic version of Focalin XR(R), which is an extended-release
capsule for the treatment of Attention Deficit Hyperactivity
Disorder.
Intellipharmaceutics' lead non-generic product under development
is Rexista(TM), an abuse- and alcohol-resistant controlled-release
oral oxycodone formulation for the relief of pain.
J CREW: Moody's Upgrades Corporate Family Rating to 'Ba1'
---------------------------------------------------------
Moody's Investors Service upgraded J. Crew Operating Corp.'s debt
ratings to Ba1 from Ba2, including its Corporate Family and
Probability of Default Ratings and the rating on the company's
senior secured term loan due May 2013. The ratings outlook is
stable.
The upgrades reflect the company's strong and consistent operating
performance and cash flow generation that, when combined with
conservative financial management and debt reduction, have led to
solid improvement in the company's credit profile, despite the
challenging economic environment.
J. Crew's Ba1 Corporate Family Rating is supported by the
company's solid merchandising skills as reflected by several years
of strong sales growth, its credible market position in the highly
fragmented specialty apparel retailing segment, strong EBITA
margins relative to peers, low absolute debt levels and solid
credit metrics. Liquidity is very good, supported by sizeable
cash balances, and the expectation for continued positive free
cash flow and ample revolver availability.
The ratings are constrained by J. Crew's relatively small scale
and high business risk as a specialty apparel retailer, which
exposes the company to potential performance volatility as a
result of fashion risk or changes in consumer spending. Given the
company's short history of maintaining strong metrics through
tough economic cycles, additional upward rating movement is
unlikely in the near term.
The stable ratings outlook reflects Moody's expectation that J.
Crew will maintain strong operating performance, liquidity and
conservative financial policies while targeting measured, organic
growth over the intermediate term.
These ratings were upgraded:
* Corporate Family Rating to Ba1 from Ba2;
* Probability of Default Rating to Ba1 from Ba2;
* Senior secured term loan due 2013 to Ba1 (LGD 4, 51%) from Ba2
(LGD 3, 40%).
The last rating action on J. Crew was on December 3, 2007, when
Moody's upgraded the company's Corporate Family Rating to Ba2 from
Ba3, with a stable outlook. The last credit opinion update was on
May 14, 2009.
J. Crew Operating Corp., headquartered in New York, NY, is a
multi-channel apparel retailer that operates 323 retail and
factory outlet stores under the J. Crew, crewcuts and Madewell
names, and a catalog and website under the J. Crew name. Revenues
for the fiscal year ended January 30, 2010, exceeded $1.5 billion.
JOSHUA FARMER: Noteholders Want Bankr. Custodianship for Assets
---------------------------------------------------------------
1230 Overbrook Drive Holdings, LLC, and CBA-Mezzanine Capital
Finance, LLC ave asked the U.S. Bankruptcy Court for the Western
District of North Carolina to excuse Easlan Management Company,
Inc., from compliance with Section 543(a)-(c) of the U.S.
Bankruptcy Code and for an order converting the state court
receivership into a bankruptcy custodianship for certain assets of
Josh and Andrea Farmer. In the alternative, the Noteholders want
the appointment of a trustee or examiner in the Chapter 11 cases
of the Farmers.
The Noteholders are secured lenders of the Farmers on account of
debt secured by a first lien mortgage on two apartment complexes
in Gaffney, South Carolina, which can be generally described as
Creekside at Wellington Apartments at 1230 Overbrook Drive,
Gaffney, Cherokee County, South Carolina, and Magnolia Ridge
Apartments at 266 Goldmine Springs Road, Gaffney, Cherokee County,
South Carolina.
In September 2006, a loan was made to Gaffney Apartments, LLC, by
Keybank National Association, a national banking association with
an indebtedness in the original principal amount of $5,330,000,
which loan is evidenced by a promissory Note A, dated September
25, 2006. 1230 Overbrook is the current owner and holder of Note
A. On September 25, 2006, a loan was made to the Debtor by the
Original Lender with an indebtedness in the original principal
amount of $350,000, which loan is evidenced by a promissory Note
B, dated September 25, 2006. CBA-Mezzanine Capital is the current
owner and holder of Note B. The Notes are secured by, among other
things, a mortgage, assignment of leases and rents, security
agreement, and fixture filing, dated as of September 25, 2006. To
further secure the Note, the Borrower also executed an assignment
of leases and rents, dated September 25, 2006. The Borrower
defaulted under the terms of the Notes and Mortgage.
In June 2009, the Cherokee County, South Carolina Circuit Court,
in a lawsuit styled, "1230 Overbrook Drive Holdings, LLC, vs.
Gaffney Apartments, LLC, entered an order appointing Easlan as
receiver to manage and operate the Debtors' properties.
Pursuant to the order appointing the receiver, a bond in the
amount of $100,000 was posted with the Clerk of Cherokee County,
South Carolina Circuit Court. After the entry of the order
appointing the receiver and the posting of the Bond, Easlan
immediately commenced its duties and took possession, management
and operation of the Properties. Easlan has been operating the
Properties continuously since that time.
A special referee's order and judgment of foreclosure and sale was
entered, ordering an April 5, 2010 foreclosure sale of the
Properties.
A Quitclaim Title to Real Estate was made and delivered on
March 30, 2010, and recorded on April 1, 2010, with the Cherokee
County, South Carolina real property records, purporting to convey
the Properties to the Debtors.
On April 5, 2010, the Debtors filed for Chapter 11 bankruptcy
protection. The purported conveyance of the Properties to the
Grantees and their subsequent filing of the voluntary petitions
stayed the foreclosure sale of the Properties.
The Noteholders claim that the Debtor's estate would be better
served by permitting Easlan to manage and operate the Properties.
In the event that the Court elects not to excuse the receiver's
compliance with Section 543(a)-(c) of the Bankruptcy Code and
authorize the receiver to continue in the management and control
of the property, the Noteholders ask that the Court appoint Easlan
as trustee or examiner.
More information on the Noteholders' request is available for free
at http://bankrupt.com/misc/JOSH_FARMER_examinermotion.pdf
The Noteholders are represented by James H. Pulliam
(jpulliam@kilpatrickstockton.com) at Kilpatrick Stockton, LLP.
About Joshua Farmer
Rutherfordton, North Carolina-based Joshua Farmer and Andrea
Farmer -- dba Two Mile Properties, LLC, et al. -- filed for
Chapter 11 bankruptcy protection on April 5, 2010 (Bankr. W.D.
N.C. Case No. 10-40270). The Company listed $10,000,001 to
$50,000,000 in assets and $50,000,001 to $100,000,000 in
liabilities.
Raymond Farmer and Diane Farmer filed a separate Chapter 11
petition on April 5, 2010 (Case No. 10-40269), listing $10,000,001
to $50,000,000 in assets and $50,000,001 to $100,000,000 in
liabilities.
Travis W. Moon, Esq., at Hamilton Moon Stephens Steele Martin,
assists the Debtors in their restructuring efforts.
JUAN MEDINA: Case Summary & 10 Largest Unsecured Creditors
----------------------------------------------------------
Debtor: Juan Medina
25 North 12th Street
Newark, NJ 07107
Bankruptcy Case No.: 10-21706
Chapter 11 Petition Date: April 19, 2010
Court: U.S. Bankruptcy Court
District of New Jersey (Newark)
Judge: Novalyn L. Winfield
Debtor's Counsel: Tomas Espinosa, Esq.
4005 Bergenline Avenue Apartment 1
Union City, NJ 07087
Tel: (201) 223-1803
Fax: (201) 223-1893
E-mail: drtomasespinosa@yahoo.com
Estimated Assets: $0 to $50,000
Estimated Debts: $1,000,001 to $10,000,000
A copy of the Debtor's list of 10 largest unsecured creditors
filed together with the petition is available for free at
http://bankrupt.com/misc/njb10-21706.pdf
The petition was signed by the Debtor.
JULIO POLO: Voluntary Chapter 11 Case Summary
---------------------------------------------
Debtor: Julio E. Polo
721 Fifth Avenue #47B
New York, NY 10022
Bankruptcy Case No.: 10-12035
Chapter 11 Petition Date: April 19, 2010
Court: U.S. Bankruptcy Court
Southern District of New York (Manhattan)
Judge: Robert E. Gerber
Debtor's Counsel: Robert A. Mahler, Esq.
Law Office of Robert A. Mahler
419 East 64th Street, Suite #2C
New York, NY 10065
Tel: (212) 472-9569
Fax: (212) 472-9785
E-mail: rmahler999@aol.com
Estimated Assets: not stated
Estimated Debts: $1,000,001 to $10,000,000
The Debtor did not file a list of creditors together with its
petition.
The petition was signed by the Debtor.
KEMET CORP: Moody's Assigns 'B2' Corporate Family Rating
--------------------------------------------------------
Moody's Investors Service assigned to KEMET Corporation a
Corporate Family Rating of B2 and Probability of Default Rating of
B2. Concurrently, Moody's assigned a B1 rating to KEMET's
proposed $225 million Senior Notes due 2018 offering. Moody's
also assigned an SGL-2 speculative grade liquidity rating. The
rating outlook is stable.
KEMET is a leading global manufacturer of capacitors. Private
equity firm, Platinum Equity (through its affiliate, K Equity,
LLC), is effectively the company's largest shareholder with an
approximate 49.9% stake in the form of a warrant. The ratings
were assigned in connection with KEMET's proposed debt issuance,
which will be used to prepay substantially all of its existing
debt including a portion of its convertible notes, existing credit
facilities and term loans, as well as lines of credit. The
assigned ratings are subject to review of final documentation and
no material change in the terms and conditions of the transaction
as advised to Moody's. The notes are secured by 51% of certain of
the company's foreign subsidiaries' stock.
KEMET's B2 CFR reflects KEMET's highly volatile business model,
which is susceptible to economic cycles, small scale as measured
by revenues and lower operating margins relative to other
semiconductor and electronic component manufacturers, high
customer concentration, and intense competition in an industry
experiencing a long-term trend toward lower prices for capacitors.
In addition, the rating is constrained by relatively high leverage
as measured by debt to EBITDA (Moody's adjusted for capitalized
leases) of about 5x expected at the close of the transaction.
At the same time, the rating is supported by the company's leading
market position within its three operating segments of Tantalum,
Ceramic and Film & Electrolytic, its global reach and geographic
revenue diversity, strong customer relationships, and broad
product portfolio. In addition, management has successfully
restructured its Tantalum and Ceramic businesses while in the
process of revamping its F&E business, creating a low-cost
production base to ensure sustained profitability and steady free
cash flow.
The SGL-2 speculative grade liquidity rating reflects KEMET's good
liquidity profile over the next twelve months. The company is
expected to have cash of approximately $65 million at the close of
the transaction and should generate free cash flow in excess of
$20 million. While the company has stable internal sources of
liquidity, KEMET is not expected to have a committed revolving
credit facility when the deal closes. The lack of a revolving
credit facility could limit the company's financial flexibility.
Although Moody's expects the company to generate sufficient cash
flow to meet its working capital requirements and capital
expenditure needs for the next twelve months, there may be interim
quarters with negative cash flow which would require the company
to fund its needs using cash on the balance sheet as no revolver
would be available.
The stable rating outlook incorporates the potential for operating
improvement as management continues to streamline its business and
restructures the F&E business while a slow rebound begins in the
semiconductor and electronic components industries during 2010.
It also reflects Moody's expectation for a gradual increase in
revenue and profitability in 2010 such that the company's
financial leverage improves.
These first-time ratings/assessments were assigned:
* Corporate Family Rating -- B2
* Probability of Default Rating -- B2
* $225 Million Senior Notes due 2018 -- B1 (LGD-3, 38%)
* Speculative Grade Liquidity Rating of SGL-2
The last rating action for KEMET was on February 12, 2010, when
Moody's withdrew all ratings in response to the company
indefinitely postponing its notes offering as a result of
unfavorable market conditions.
KEMET Corporation, headquartered in Greenville, South Carolina, is
a large manufacturer and supplier of passive electronic
components, specializing in tantalum, multilayer ceramic, film,
solid aluminum, electrolytic, and paper capacitors. Revenues for
the twelve months ended December 31, 2009 were approximately
$659 million.
KEMET CORP: S&P Assigns Corporate Credit Rating at 'B'
------------------------------------------------------
Standard & Poor's Ratings Services said it assigned its 'B'
corporate credit rating to Greenville, S.C.-based capacitor
supplier Kemet Corp. The ratings outlook is stable.
At the same time, S&P assigned its 'B' rating and '4' recovery
rating to the company's proposed issue of $225 million senior
notes due 2018. Proceeds from sale of the new notes will be used
to repay the majority of the company's existing debt. In February
2010, Kemet had planned to sell a $275 million note issue for the
same purposes, but market conditions were not favorable and the
planned issue was withdrawn.
"Ratings reflect highly competitive market conditions, the
company's modest scope in several of its served markets, a history
of unprofitable operations, and limited liquidity," said Standard
& Poor's credit analyst Bruce Hyman. The company's improving
operating profitability following a series of restructuring
actions and its low capital intensity offset those factors in
part. Kemet's corporate credit rating reflects an anticipated
successful sale of the planned note issue.
KRATON POLYMERS: S&P Raises Corporate Credit Rating to 'B+'
-----------------------------------------------------------
Standard & Poor's Ratings Services said that it raised its
corporate credit rating on Kraton Polymers LLC by two notches to
'B+' from 'B-'.
"The rating action reflects Kraton's improved financial profile
following $100 million of debt reduction from initial public
offering proceeds and S&P's expectation of positive operating
trends in 2010 and beyond," said Standard & Poor's credit analyst
Henry Fukuchi. "S&P expects these trends to be supported by a
rebound in sales volumes, improving economic conditions, ongoing
efforts to maintain favorable pricing, and the benefits of past
and future cost reductions."
At the same time, S&P raised the issue-level rating on Kraton's
term loan to 'BB' from 'B' and revised the recovery rating to '1',
which indicates S&P's expectation of very high (90% to 100%)
recovery in the event of a payment default, from '2'. S&P also
raised the issue-level rating on Kraton's senior subordinated
notes to 'B-' from 'CCC'. The recovery rating is unchanged at
'6', which indicates S&P's expectation of negligible (0% to 10%)
recovery in the event of default.
In addition, S&P removed all ratings from CreditWatch where they
were placed with positive implications on Oct. 2, 2010. The
outlook is stable.
LEHMAN BROTHERS: $1.8 Bil. in Claims Change Hands March 16-31
-------------------------------------------------------------
The Office of the Clerk of the Bankruptcy Court received more
than 100 notices of transfer of claims, aggregating more than
$1.8 billion in the Debtors' Chapter 11 cases from March 16 to
31, 2010:
* Banco Espanol de Credito, S.A.
Transferors Claim No. Claim Amount
----------- --------- ------------
Santander Asset Management 22251 $1,755,552
S.A., S.G.I.I.C. 22252 $477,802
22253 $1,755,552
22261 $477,802
* Barclays Bank PLC
Transferors Claim No. Claim Amount
----------- --------- ------------
Fir Tree Value Master Fund, L.P. 50316 $5,500,000
50316 $4,200,000
Hontai Life Insurance Co., Ltd. 41185 $5,061,722
41185 $5,053,833
41185 $5,099,458
41185 $7,170,104
United Coconut Planters Bank 63441 $5,000,000
63442 $5,000,000
Fir Tree Capital Opportunity 50315 $1,000,000
Master Fund, L.P. 50315 $800,000
* Caspian Capital Partners L.P., et al.
Transferors Claim No. Claim Amount
----------- --------- ------------
JPMorgan Chase Bank, N.A. 50055 $5,148,237
* CC Arbitrage, Ltd.
Transferors Claim No. Claim Amount
----------- --------- ------------
Fairfax Financial Holdings Limited 10222 $2,781,550
10223 $2,781,550
* Citigroup Financial Products Inc.
Transferors Claim No. Claim Amount
----------- --------- ------------
Altma Fund Sicav Plc 43812 $1,176,252
Citibank Belgium S.A. 55408 $159,298,211
Scottwood Master Ltd. 43813 $11,893,222
* C.V.I G.V.F. (Lux) Master S.a.r.l.
Transferors Claim No. Claim Amount
----------- --------- ------------
Deutsche Bank AG, London Branch 59832 TBD
Knightsbridge Guarding Ltd. 6181 $595,913
Oranje-Nassau Energie BV 11423 $3,520,834
Black River Commodity Fund Ltd. 22703 $138,358
26163 $138,358
Summit Petroleum Limited 14019 $5,616,462
14018 $5,616,462
* Contrarian Funds, LLC
Transferors Claim No. Claim Amount
----------- --------- ------------
Friendship Village of West County 15432 $234,000
Total Alpha Investment Fund Management 10953 $202,054
Company S.A.
* David Kempner International, Ltd.
Transferors Claim No. Claim Amount
----------- --------- ------------
Knight Capital Europe Limited 56081 $18,362,101
* David Kempner International Partners L.P.
Transferors Claim No. Claim Amount
----------- --------- ------------
Knight Capital Europe Limited 56081 $14,315,625
* Davidson Kempner Distressed Opportunities Fund LP
Transferors Claim No. Claim Amount
----------- --------- ------------
Knight Capital Europe Limited 56081 $1,866,575
* David Kempner Distressed Opportunities Int'l Ltd.
Transferors Claim No. Claim Amount
----------- --------- ------------
Knight Capital Europe Limited 56081 $4,059,063
* Davidson Kempner Institutional Partners, L.P.
Transferors Claim No. Claim Amount
----------- --------- ------------
Knight Capital Europe Limited 56081 $14,315,625
* Davidson Kempner Partners
Transferors Claim No. Claim Amount
----------- --------- ------------
Knight Capital Europe Limited 56081 $8,225,943
* Deutsche Bank AG, London Branch
Transferors Claim No. Claim Amount
----------- --------- ------------
Aggregating Trust 1, LLC 30317 $115,216
30307 $2,433,359
Aggregating Trust 2, LLC 30316 $48,906
30306 $1,032,921
Aggregating Trust 3, LLC 30305 $3,868,554
30315 $293,443
Aggregating Trust 4, LLC 30310 $73,635
30653 $1,555,183
Aggregating Trust 5, LLC 30309 $20,698
30652 $437,153
Aggregating Trust 6, LLC 30308 $51,654
30651 $1,090,950
Aggregating Trust 7, LLC 30657 $2,267,008
30314 $107,339
Aggregating Trust 8, LLC 30656 $1,963,887
30313 $179,509
Aggregating Trust 9, LLC 30655 $1,110,292
30312 $52,570
Aggregating Trust 10, LLC 30654 $22,871,260
30311 $1,082,919
Bank of Scotland plc 58945 $245,240,811
Cheyne Fund L.P. 44991 $2,616,163
Cheyne Leverage Fund L.P. 45213 $2,616,163
Credit Suisse AG 55829 EUR600,000
55829 CHF30,160,000
ICICI Bank UK Plc 58791 $14,201,500
NML General Fund 63584 $569,501
Nomura International plc 62770 $17,793,993
AXA Wholesale Core Australian Fixed 63582 $17,652,813
Interest Fund
Siemens/Convertible Global-Markets 44990 $2,616,163
t/a Innovest Eu
* Far Eastern International Bank
Transferors Claim No. Claim Amount
----------- --------- ------------
Chinfon Commercial Bank 57924 $279,000
* Goldman Sachs International
Transferors Claim No. Claim Amount
----------- --------- ------------
The Kiyo Bank Ltd. 59325 $14,395,042
59324 $9,653,492
* Goldman, Sachs & Co.
Transferors Claim No. Claim Amount
----------- --------- ------------
Aggregating Trust 1 LLC 29006 $1,355,000
29035 $240,000
Aggregating Trust 2 LLC 29005 $505,000
29034 $120,000
Aggregating Trust 3 LLC 29004 $3,190,000
29033 $690,000
Aggregating Trust 4 LLC 28999 $1,625,000
29028 $230,000
Aggregating Trust 6 LLC 28998 $620,000
29027 $155,000
Aggregating Trust 7 LLC 29003 $1,080,000
29032 $255,000
Aggregating Trust 8 LLC 29002 $1,025,000
29031 $510,000
Aggregating Trust 9 LLC 29030 $120,000
29001 $580,000
Aggregating Trust 10 LLC 29029 $2,680,000
29000 $15,020,000
CVI GVF (Lux) Master S.a.r.l. 59098 $78,691,815
Fir Tree Value Master Fund L.P. 50316 $37,133,387
Fir Tree Capital Opportunity
Master Fund 50315 $7,030,282
LBVN Holdings, L.L.C. 58881 $30,000,000
* Gruss Arbitrage Master Fund, Ltd.
Transferors Claim No. Claim Amount
----------- --------- ------------
Gruss Arbitrage Master Fund 21303 $18,051
(Enhanced) Ltd.
* HBK Master Fund L.P.
Transferors Claim No. Claim Amount
----------- --------- ------------
Goldman Sachs Lending Partners LLC 66294 $169,848
66288 $93,612
66289 $257,766
66290 $3,358,792
66291 $827,276
66292 $234,131
66293 $11,508
66312 $4,078,143
* Ingram Pension Plan/NY Life Co. TTEE Ingram Indus
Transferors Claim No. Claim Amount
----------- --------- ------------
Lehman Brothers Alpha Transport 24608 $128,547
Fund SPC 24610 $128,547
* JPMorgan Chase Bank, N.A.
Transferors Claim No. Claim Amount
----------- --------- ------------
Chiba Bank, Ltd. 66367 $10,000,000
The Shoko Chukin Bank, Ltd. 66415 $5,700,000
Vitol S.A. 66353 $12,220,661
Vitol Asia Pte Ltd. 66354 $3,821,189
* J.P. Morgan Securities, Ltd.
Transferors Claim No. Claim Amount
----------- --------- ------------
Samsung Life Insurance Co., Ltd. 49769 $36,408,788
49770 $22,078,789
* Jorvik Multi-Strategy Master Fund, L.P.
Transferors Claim No. Claim Amount
----------- --------- ------------
J.P. Morgan Securities Ltd. 46967 --
* King Street Acquisition Company LLC
Transferors Claim No. Claim Amount
----------- --------- ------------
Goldman Sachs Lending Partners LLC 33647 $12,482,338
33646 $12,482,338
* Knighthead Master Fund, L.P.
Transferors Claim No. Claim Amount
----------- --------- ------------
Banc of America Securities LLC 44630 $14,647,096
60700 $4,272,900
* Knight Capital Europe Limited
Transferors Claim No. Claim Amount
----------- --------- ------------
Commerzbank AG 56081 $48,391,382
* Kreissparkasse Heinsberg
Transferors Claim No. Claim Amount
----------- --------- ------------
Yorvik Partners, LLP 27006 $21,664,012
* Lehman Brothers Offshore Partners Ltd.
Transferors Claim No. Claim Amount
----------- --------- ------------
Lehman Brothers Alpha Transport 24609 $14,531
Fund SPC 24611 $14,531
* Longacre Opportunity Fund, L.P.
Transferors Claim No. Claim Amount
----------- --------- ------------
The Christian and Missionary 15309 $105,000
Alliance Foundation 15072 $105,000
* Lyxor/York Fund Limited
Transferors Claim No. Claim Amount
----------- --------- ------------
J.P. Morgan Securities Ltd. 46967 --
* Macquarie Bank Limited
Transferors Claim No. Claim Amount
----------- --------- ------------
Banca Popolare di Spoleto S.p.A. 56044 $3,632,070
Ente Nazionale di Previdenza 55525 $14,745,426
ed Assistenza
* Merrill Lynch Credit Products, LLC
Transferors Claim No. Claim Amount
----------- --------- ------------
Janus Capital Management LLC 32617 $153,460,243
32618 $153,460,243
32619 $93,566
32620 $2,816,054
32621 $191,134
32622 $140,349
32623 $268,056
32624 $540,144
* Merrill Lynch International
Transferors Claim No. Claim Amount
----------- --------- ------------
First International Bank of Israel 65793 $12,261,542
Merrill Lynch Japan Securities Co. 46849 $957,946
Banco De La Pequena Y Mediana 37027 $710,050
Empresa SA 37030 $2,130,150
37033 $2,130,150
* Merrill Lynch Japan Finance Co., Ltd.
Transferors Claim No. Claim Amount
----------- --------- ------------
Kagome Co., Ltd. 22953 $1,153,944
1411 $1,143,933
* Merrill Lynch Japan Securities Co., Ltd.
Transferors Claim No. Claim Amount
----------- --------- ------------
Misuzu Industry Co., Ltd. 46849 $957,946
* Morgan Stanley & Co. Incorporated
Transferors Claim No. Claim Amount
----------- --------- ------------
Aviva Insurance Company 66054 $5,000,000
Pilot Insurance Company 66055 $5,000,000
* Morgan Stanley & Co. International plc
Transferors Claim No. Claim Amount
----------- --------- ------------
Aktia Bank Plc 50355 $2,830,200
DZ Privatbank (Schweiz) AG 60347 $14,342,166
Palatine Asset Management 55843 $6,835,220
Svenska Litteratursaillskapet 50351 $4,425,300
VR-LIW GmbH 55203 $2,148,732
55199 $3,589,098
* M.H. Davidson & Co.
Transferors Claim No. Claim Amount
----------- --------- ------------
Knight Capital Europe Limited 56081 $1,562,082
* Natixis S.A.
Transferors Claim No. Claim Amount
----------- --------- ------------
Caisse D'Epargne et de Prevoyance 63848 $10,111,955
de Midi-Pyrenees
* Newtonville Partners LLC
Transferors Claim No. Claim Amount
----------- --------- ------------
Goldman Sachs Lending Partners LLC 33276 $10,580,967
* OCM Opportunities Fund VII Delaware, L.P.
Transferors Claim No. Claim Amount
----------- --------- ------------
Morgan Stanley & Co. International 58710 $784,470
58720 $583,036
58714 $6,625,375
58714 $5,761,195
60593 $3,135,580
59406 $2,394,355
Yorvik Partners LLP 35510 $8,540,165
* Oaktree Huntington Investment Fund, L.P.
Transferors Claim No. Claim Amount
----------- --------- ------------
Morgan Stanley & Co. International 58710 $285,261
58720 $199,192
58714 $2,016,418
60593 $1,070,755
59406 $818,178
Yorvik Partners LLP 35510 $2,983,997
* Oaktree Opportunities Fund VIII Delaware, L.P.
Transferors Claim No. Claim Amount
----------- --------- ------------
Yorvik Partners LLP 35510 $9,821,190
Morgan Stanley & Co. International 58710 $927,101
58720 $671,727
60593 $3,612,734
59406 $2,758,308
* Permal York Ltd.
Transferors Claim No. Claim Amount
----------- --------- ------------
J.P. Morgan Securities Ltd. 46967 --
* The Royal Bank of Scotland plc
Transferors Claim No. Claim Amount
----------- --------- ------------
ICICI Bank UK plc 58791 $14,316,551
* RBS Securities Japan Limited
Transferors Claim No. Claim Amount
----------- --------- ------------
Mizuho Securities Co., Ltd. 44616 $1,895,137
* SMC Credit Opportunities Fund, Ltd.
Transferors Claim No. Claim Amount
----------- --------- ------------
Goldman Sachs SMC Credit 15899 $1,008,699
Opportunities 2008 Fund 15900 $1,008,699
* Soros Fund Management LLC
Transferors Claim No. Claim Amount
----------- --------- ------------
Goldman Sachs International 58795 $9,465,215
58851 $4,450,000
58798 $6,000,000
58816 $6,810,000
58801 $4,150,000
Goldman Sachs & Co. 58830 $3,066,209
58827 $4,097,731
* Stone Lion Portfolio L.P.
Transferors Claim No. Claim Amount
----------- --------- ------------
Banc of America Securities LLC 59509 $4,366,932
* Strategic Value Master Fund, Ltd.
Transferors Claim No. Claim Amount
----------- --------- ------------
Lehman Brothers International Europe 62783 $5,708,138
Futanami Securities Co., Ltd. 62783 $5,708,138
45391 $5,691,092
HSBC Securities Japan Limited 62783 $5,708,138
45391 $5,691,092
* Vanguard Fiduciary Trust Company
Intermediate-Term Bond Trust
Transferors Claim No. Claim Amount
----------- --------- ------------
Vanguard Fiduciary Trust Company 16805 --
Corporate Bond Trust 16722 --
16721 --
Vanguard Fiduciary Trust Company 16714 --
Asset-Banked Securities Trust 16713 --
* York Credit Opportunities Fund, L.P.
Transferors Claim No. Claim Amount
----------- --------- ------------
J.P. Morgan Securities Ltd. 46967 --
* York Credit Opportunities Master Fund, L.P.
Transferors Claim No. Claim Amount
----------- --------- ------------
York Credit Opportunities Unit Trust 55535 $107,777,277
J.P. Morgan Securities Ltd. 46967 --
* York Capital Management, L.P.
Transferors Claim No. Claim Amount
----------- --------- ------------
J.P. Morgan Securities Ltd. 46967 --
Yorvik Partners, LLP 27006 $21,664,012
* York European Opportunities Master Fund, L.P.
Transferors Claim No. Claim Amount
----------- --------- ------------
J.P. Morgan Securities Ltd. 46967 --
* York Global Value Master Fund, L.P.
Transferors Claim No. Claim Amount
----------- --------- ------------
J.P. Morgan Securities Ltd. 46967 --
* York Investment Master Fund, L.P.
Transferors Claim No. Claim Amount
----------- --------- ------------
J.P. Morgan Securities Ltd. 46967 --
* York Select Master Fund, L.P.
Transferors Claim No. Claim Amount
----------- --------- ------------
York Select Unit Trust 55533 $26,168,416
J.P. Morgan Securities Ltd. 46967 --
* York Select L.P.
Transferors Claim No. Claim Amount
----------- --------- ------------
J.P. Morgan Securities Ltd. 46967 --
* Yorvik Partners LLP
Transferors Claim No. Claim Amount
----------- --------- ------------
LHB Internationale Handelsbank AG 37371 $6,403,073
Oberoesterreichische Versicherung AG 64112 $2,835,000
Raiffeisenlandesbank Oberosterreich AG 35510 $21,804,900
* Yuanta Commercial Bank
Transferors Claim No. Claim Amount
----------- --------- ------------
Chinfon Commercial Bank 57924 $246,000
About Lehman Brothers
Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the
fourth largest investment bank in the United States. For more
than 150 years, Lehman Brothers has been a leader in the global
financial markets by serving the financial needs of corporations,
governmental units, institutional clients and individuals
worldwide.
Lehman Brothers filed for Chapter 11 bankruptcy September 15, 2008
(Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition
listed US$639 billion in assets and US$613 billion in debts,
effectively making the firm's bankruptcy filing the largest in
U.S. history. Several other affiliates followed thereafter.
The Debtors' bankruptcy cases are handled by Judge James M. Peck.
Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife,
Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil,
Gotshal & Manges, LLP, in New York, represent Lehman. Epiq
Bankruptcy Solutions serves as claims and noticing agent.
On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the
U.S. District Court for the Southern District of New York, entered
an order commencing liquidation of Lehman Brothers, Inc., pursuant
to the provisions of the Securities Investor Protection Act (Case
No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as
trustee for the SIPA liquidation of the business of LBI
The Bankruptcy Court has approved Barclays Bank Plc's purchase of
Lehman Brothers' North American investment banking and capital
markets operations and supporting infrastructure for
US$1.75 billion. Nomura Holdings Inc., the largest brokerage
house in Japan, purchased LBHI's operations in Europe for US$2
plus the retention of most of employees. Nomura also
bought Lehman's operations in the Asia Pacific for US$225 million.
International Operations Collapse
Lehman Brothers International (Europe), the principal UK trading
company in the Lehman group, was placed into administration,
together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE
Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and
Mike Jervis, partners at PricewaterhouseCoopers LLP, have been
appointed as joint administrators to Lehman Brothers International
(Europe) on September 15, 2008. The joint administrators have
been appointed to wind down the business.
Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc.
filed for bankruptcy in the Tokyo District Court on September 16.
Lehman Brothers Japan Inc. reported about JPY3.4 trillion
(US$33 billion) in liabilities in its petition.
Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by Lehman Brothers Holdings, Inc., and other insolvency
and bankruptcy proceedings undertaken by its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
LEHMAN BROTHERS: Examiner Report on CME Exchange Unsealed
---------------------------------------------------------
Anton Valukas, the examiner appointed in Lehman Brothers' Chapter
11 cases, filed in Court an unredacted copy of Volume 5 of his
report.
Volume 5 consists of documents which include a notice of transfer
of claim from Fonds Commun De Placement Tait Bout Obligation euro
Tax to Merrill Lynch International, and an agreement evidencing
the transfer. Full-text copies of those documents is available
for free at:
http://bankrupt.com/misc/LBHI_Volume5ExaminerReport.pdf
The unredacted version of the documents, which were previously
filed under seal, was released to the public pursuant to the
Court's order authorizing publication of those documents and
overruling CME Group Inc.'s objection to the unsealing of the
report. The unveiled portion of the report revealed that Goldman
Sachs Group Inc., Barclays PLC, and DRW Trading as buyers of
Lehman's derivatives positions held at futures exchange CME Group
after a judge ordered details of the bidding process released.
The move to reveal the identities could open the way for
creditors to pursue lawsuits against the exchange company or the
firms that bought Lehman's positions in what Mr. Valukas
characterized as a fire sale of more than $2 billion in
commodity, interest-rate and equity-index contracts, Jacob Bunge
of The Wall Street Journal reported. The Examiner said in his
report that creditors could argue that the transfers were
"fraudulent" due to the fact that Lehman took a $1.2 billion loss
related to the sale.
Goldman Sachs, Barclays, DRW and CME, however, are likely to be
protected from lawsuits seeking to recoup losses associated with
the auction of Lehman's futures book, according to the Examiner.
Mr. Valukas said those fraudulent transfer claims are likely to
be unsuccessful, as CME and the buyers of Lehman-owned futures
were seen to be protected by CME's role as a self-regulator of
its exchanges and safe-harbor provisions of bankruptcy law.
About Lehman Brothers
Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the
fourth largest investment bank in the United States. For more
than 150 years, Lehman Brothers has been a leader in the global
financial markets by serving the financial needs of corporations,
governmental units, institutional clients and individuals
worldwide.
Lehman Brothers filed for Chapter 11 bankruptcy September 15, 2008
(Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition
listed US$639 billion in assets and US$613 billion in debts,
effectively making the firm's bankruptcy filing the largest in
U.S. history. Several other affiliates followed thereafter.
The Debtors' bankruptcy cases are handled by Judge James M. Peck.
Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife,
Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil,
Gotshal & Manges, LLP, in New York, represent Lehman. Epiq
Bankruptcy Solutions serves as claims and noticing agent.
On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the
U.S. District Court for the Southern District of New York, entered
an order commencing liquidation of Lehman Brothers, Inc., pursuant
to the provisions of the Securities Investor Protection Act (Case
No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as
trustee for the SIPA liquidation of the business of LBI
The Bankruptcy Court has approved Barclays Bank Plc's purchase of
Lehman Brothers' North American investment banking and capital
markets operations and supporting infrastructure for
US$1.75 billion. Nomura Holdings Inc., the largest brokerage
house in Japan, purchased LBHI's operations in Europe for US$2
plus the retention of most of employees. Nomura also
bought Lehman's operations in the Asia Pacific for US$225 million.
International Operations Collapse
Lehman Brothers International (Europe), the principal UK trading
company in the Lehman group, was placed into administration,
together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE
Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and
Mike Jervis, partners at PricewaterhouseCoopers LLP, have been
appointed as joint administrators to Lehman Brothers International
(Europe) on September 15, 2008. The joint administrators have
been appointed to wind down the business.
Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc.
filed for bankruptcy in the Tokyo District Court on September 16.
Lehman Brothers Japan Inc. reported about JPY3.4 trillion
(US$33 billion) in liabilities in its petition.
Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by Lehman Brothers Holdings, Inc., and other insolvency
and bankruptcy proceedings undertaken by its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
LEHMAN BROTHERS: Examiner Report Shows UBS Misconduct, Says Vernon
------------------------------------------------------------------
The 2,200 page Lehman Bankruptcy Examiner's Report issued in March
is another nail in the UBS coffin in FINRA arbitrations involving
Lehman principal protected notes and other Lehman structured
notes. Although the Lehman Report deals with a lot of complex
transactions and related terminology such as "counterparties" and
"Repo 105," at its core, it reveals additional wrongdoing by UBS
that is both simple and disturbing.
Specifically, the Lehman Bankruptcy Report reveals that for much
of the time that UBS was convincing its own clients to loan money
to Lehman through Lehman principal protected notes and other
structured products, UBS itself was loaning money to Lehman on far
safer and far more profitable terms than the structured note
loans. UBS was able to negotiate these favorable loans for its
own benefit because it was well aware of and taking advantage of
Lehman's desperate financial situation.
As revealed by the Lehman Report, UBS acted as a "counterparty" to
the now infamous "Repo 105" transactions. Effectively, by acting
as a "counterparty" to the "Repo 105" transactions, UBS was making
high interest loans to Lehman on a collateralized and very short
term basis. These loans kept Lehman's toxic assets off the books
just long enough for the company to pay off some debt, issue
rosier quarterly reports in late 2007 and early 20083 and then
borrow more money to buy back the toxic assets.
Acting as counterparty, UBS was making a lot of money from loaning
money to Lehman despite the fact that the loans by UBS to Lehman
were short term and despite the fact that UBS received collateral
to repay the loan in the event that Lehman defaulted. This
arrangement is in stark contrast to the much longer term loans
that UBS was simultaneously recommending that its own clients make
to Lehman on a completely unsecured basis through Lehman
structured notes.
UBS's recent public statement that the Lehman Bankruptcy Report
does not show that the "counterparties acted inappropriately" both
highlights and misses the point in the context of UBS clients who
were sold Lehman structured notes such as the Lehman principal
protected notes. In contrast to the UBS public statement, the
Lehman Bankruptcy Report is significant additional evidence that
may lead FINRA arbitration panels to award punitive damages in
favor of former UBS clients who bring claims against UBS relating
to Lehman structured notes.
How outrageous was UBS's behavior? While still selling Lehman
structured notes to investors who have retained our firm and many
others in March of 2008, UBS charged the now "desperate" Lehman a
fee of $186 million on a very short term and fully collateralized
multi-billion dollar loan. If this short term loan return were
annualized, it would equate to a return to UBS of more than 150
percent on the loan. As one of Lehman's own employees said in
early 2008, "Everyone knows 105 is an off balance sheet mechanism
so counterparties are looking for ridiculous levels" to try to
squeeze Lehman.
The Vernon Healy Law Firm is now investigating whether UBS decided
at some point that Lehman was in such bad shape that it should
scale back on the "Repo 105" loans even though they were
collateralized, short term, and lucrative. If such a scale back
occurred, then an issue will be whether UBS took any similar
action in 2008 to inform or protect its own structured note
clients in connection with their exposure as lenders to Lehman.
Prior to the release of the 2,200 page Lehman Bankruptcy
Examiner's report in March 2010, UBS had already lost multiple
FINRA arbitrations related to Lehman structured notes. Therefore,
the information disclosed by the Lehman Bankruptcy report builds
on an already troubling trail of Lehman red flags that were
ignored by UBS, such as: Lehman's status as the lowest rated of
the investment banks; Lehman's Archstone deal that was a disaster
for the company4; Lehman's illiquid balance sheet assets that rose
300 percent from 2006 to the first quarter of 20085; Lehman's
underwriting of more mortgage-backed securities in 2007 than any
other firm, resulting in a staggering percentage of Lehman's
overall equity being tied up in risky assets; and dramatic write-
downs by Lehman.
A cross section of Vernon Healy's clients with Lehman structured
note claims, including baby boomers, a teacher, a hospital
employee, wealthy retirees, and a charitable foundation reveals
how aggressively and indiscriminately that UBS was selling Lehman
Structured notes as late as late March 2008 -- after the Bear
Stearns melt down that rocked Wall Street and ignited panic among
Wall Street insiders. This indiscriminate sale is further
evidenced by the fact that individuals from overseas, especially
the U.K. are now seeking to retain Vernon Healy to assist them in
pursuing UBS in connection with the sale of Lehman Structured
Notes.
About Lehman Brothers
Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the
fourth largest investment bank in the United States. For more
than 150 years, Lehman Brothers has been a leader in the global
financial markets by serving the financial needs of corporations,
governmental units, institutional clients and individuals
worldwide.
Lehman Brothers filed for Chapter 11 bankruptcy September 15, 2008
(Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition
listed US$639 billion in assets and US$613 billion in debts,
effectively making the firm's bankruptcy filing the largest in
U.S. history. Several other affiliates followed thereafter.
The Debtors' bankruptcy cases are handled by Judge James M. Peck.
Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife,
Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil,
Gotshal & Manges, LLP, in New York, represent Lehman. Epiq
Bankruptcy Solutions serves as claims and noticing agent.
On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the
U.S. District Court for the Southern District of New York, entered
an order commencing liquidation of Lehman Brothers, Inc., pursuant
to the provisions of the Securities Investor Protection Act (Case
No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as
trustee for the SIPA liquidation of the business of LBI
The Bankruptcy Court has approved Barclays Bank Plc's purchase of
Lehman Brothers' North American investment banking and capital
markets operations and supporting infrastructure for
US$1.75 billion. Nomura Holdings Inc., the largest brokerage
house in Japan, purchased LBHI's operations in Europe for US$2
plus the retention of most of employees. Nomura also
bought Lehman's operations in the Asia Pacific for US$225 million.
International Operations Collapse
Lehman Brothers International (Europe), the principal UK trading
company in the Lehman group, was placed into administration,
together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE
Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and
Mike Jervis, partners at PricewaterhouseCoopers LLP, have been
appointed as joint administrators to Lehman Brothers International
(Europe) on September 15, 2008. The joint administrators have
been appointed to wind down the business.
Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc.
filed for bankruptcy in the Tokyo District Court on September 16.
Lehman Brothers Japan Inc. reported about JPY3.4 trillion
(US$33 billion) in liabilities in its petition.
Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by Lehman Brothers Holdings, Inc., and other insolvency
and bankruptcy proceedings undertaken by its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
LEHMAN BROTHERS: Regulators Could Have Stopped Repo 105
-------------------------------------------------------
Bankruptcy Law360 reports that the U.S. House of Representatives
Democrats said Tuesday greater authority and resources for federal
regulators could have stopped Lehman Brothers Holdings Inc. from
participating in off-sheet "Repo 105" tactics and other risky
behavior prior to its collapse.
The House Financial Services Committee heard testimony from
Lehman's former leadership, its primary regulators and its court-
appointed bankruptcy examiner, Jenner & Block LLP partner Anton
Valukas, Law360 says.
Richard Fuld, the former chief executive officer of Lehman
Brothers Holdings Inc., also testified at a hearing before
the House Financial Services Committee. Mr. Fuld told
lawmakers he never assumed the U.S. goverment would bail out
Lehman before it filed for bankruptcy September 2008. "We did
not need a capital bailout," Mr. Fuld said. "We needed a
liquidity bridge" that would have bought Lehman time to be
acquired by another company, he said.
About Lehman Brothers
Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the
fourth largest investment bank in the United States. For more
than 150 years, Lehman Brothers has been a leader in the global
financial markets by serving the financial needs of corporations,
governmental units, institutional clients and individuals
worldwide.
Lehman Brothers filed for Chapter 11 bankruptcy September 15, 2008
(Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition
listed US$639 billion in assets and US$613 billion in debts,
effectively making the firm's bankruptcy filing the largest in
U.S. history. Several other affiliates followed thereafter.
The Debtors' bankruptcy cases are handled by Judge James M. Peck.
Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife,
Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil,
Gotshal & Manges, LLP, in New York, represent Lehman. Epiq
Bankruptcy Solutions serves as claims and noticing agent.
On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the
U.S. District Court for the Southern District of New York, entered
an order commencing liquidation of Lehman Brothers, Inc., pursuant
to the provisions of the Securities Investor Protection Act (Case
No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as
trustee for the SIPA liquidation of the business of LBI
The Bankruptcy Court has approved Barclays Bank Plc's purchase of
Lehman Brothers' North American investment banking and capital
markets operations and supporting infrastructure for
US$1.75 billion. Nomura Holdings Inc., the largest brokerage
house in Japan, purchased LBHI's operations in Europe for US$2
plus the retention of most of employees. Nomura also
bought Lehman's operations in the Asia Pacific for US$225 million.
International Operations Collapse
Lehman Brothers International (Europe), the principal UK trading
company in the Lehman group, was placed into administration,
together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE
Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and
Mike Jervis, partners at PricewaterhouseCoopers LLP, have been
appointed as joint administrators to Lehman Brothers International
(Europe) on September 15, 2008. The joint administrators have
been appointed to wind down the business.
Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc.
filed for bankruptcy in the Tokyo District Court on September 16.
Lehman Brothers Japan Inc. reported about JPY3.4 trillion
(US$33 billion) in liabilities in its petition.
Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by Lehman Brothers Holdings, Inc., and other insolvency
and bankruptcy proceedings undertaken by its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
LEHMAN BROTHERS: Metavante Claim Settlement Approved
----------------------------------------------------
Lehman Brothers Special Financing Inc. won approval from the U.S.
Bankruptcy Court for the Southern District of New York of a
settlement requiring Metavante Corp. to drop its $5.4 million
claim against the company under a swap transaction.
The settlement, if approved by the Court, would also require
Metavante to drop an appeal it filed before a district court to
reverse the Bankruptcy Court's September 17 decision that
directed Metavante to honor the terms of the swap agreement.
The Bankruptcy Court issued the September 17 ruling after
Metavante allegedly refused to make payments to LBSF although the
latter has not yet assumed or rejected their swap agreement.
The district court earlier issued an order remanding the appeal
to permit the Bankruptcy Court to consider the proposed
settlement.
The terms of the proposed settlement are:
(1) On February 1, 2012, the date that the transaction matures
under the terms of the swap agreement, one final net
payment will be made representing all net payments accrued
under the swap agreement from the date of LBSF's
bankruptcy filing to the maturity date. Payments will
accrue through February 1, 2012, on a net basis and no
payments will be made by either party in the interim.
(2) Metavante agrees that its obligations to make either the
final net payment on February 1, 2012, or a final net
payment in case it terminates the swap agreement, will not
be subject to any defenses, set-off, waivers or
satisfaction of conditions precedent.
(3) Metavante will have the right to terminate the swap
agreement not less than five days' prior notice to LBSF.
If Metavante terminates the swap agreement, one final net
payment will be calculated on the basis of an agreed-upon
formula.
(4) The parties will drop all existing litigation and legal
actions. Upon approval of the settlement agreement,
Metavante will withdraw the appeal and all proofs of claim
against the Debtors.
(5) No interest will accrue or be payable by either party on
The final net payments.
(6) LBSF will purchase an interest rate cap that will match
the notional amortization and reset rates of the swap
agreement to be held in escrow for the benefit of
Metavante until the latter terminates, if ever, the swap
agreement.
(7) Metavante will withdraw its proofs of claim, forgo its
right to other hedging costs that have allegedly accrued
subsequent to the filing of the proofs of claim, and forgo
reimbursement for its costs and expenses under the swap
agreement. LBSF will reimburse Metavante for its expenses
and allow a modest deduction on the final net payment made
by Metavante on the maturity date.
Based on the financial terms of the swap agreement and current
and projected interest rates, LBSF expects that the agreement
will entitle it to a payment less only a modest deduction under
the proposed settlement, according to Daniel Ehrmann, managing
director at Alvarez & Marsal North America LLC.
About Lehman Brothers
Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the
fourth largest investment bank in the United States. For more
than 150 years, Lehman Brothers has been a leader in the global
financial markets by serving the financial needs of corporations,
governmental units, institutional clients and individuals
worldwide.
Lehman Brothers filed for Chapter 11 bankruptcy September 15, 2008
(Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition
listed US$639 billion in assets and US$613 billion in debts,
effectively making the firm's bankruptcy filing the largest in
U.S. history. Several other affiliates followed thereafter.
The Debtors' bankruptcy cases are handled by Judge James M. Peck.
Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife,
Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil,
Gotshal & Manges, LLP, in New York, represent Lehman. Epiq
Bankruptcy Solutions serves as claims and noticing agent.
On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the
U.S. District Court for the Southern District of New York, entered
an order commencing liquidation of Lehman Brothers, Inc., pursuant
to the provisions of the Securities Investor Protection Act (Case
No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as
trustee for the SIPA liquidation of the business of LBI
The Bankruptcy Court has approved Barclays Bank Plc's purchase of
Lehman Brothers' North American investment banking and capital
markets operations and supporting infrastructure for
US$1.75 billion. Nomura Holdings Inc., the largest brokerage
house in Japan, purchased LBHI's operations in Europe for US$2
plus the retention of most of employees. Nomura also
bought Lehman's operations in the Asia Pacific for US$225 million.
International Operations Collapse
Lehman Brothers International (Europe), the principal UK trading
company in the Lehman group, was placed into administration,
together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE
Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and
Mike Jervis, partners at PricewaterhouseCoopers LLP, have been
appointed as joint administrators to Lehman Brothers International
(Europe) on September 15, 2008. The joint administrators have
been appointed to wind down the business.
Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc.
filed for bankruptcy in the Tokyo District Court on September 16.
Lehman Brothers Japan Inc. reported about JPY3.4 trillion
(US$33 billion) in liabilities in its petition.
Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by Lehman Brothers Holdings, Inc., and other insolvency
and bankruptcy proceedings undertaken by its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
LEHMAN BROTHERS: Sues IRS to Demand Return of $110 Million
----------------------------------------------------------
Lehman Brothers Holdings, Inc., filed an adversary complaint for
recovery of a refund of $110,301,837 in federal income taxes and
penalties that it overpaid to the United States of America -
Internal Revenue Service for its 1999 and 2000 tax years,
together with deficiency interest paid plus overpayment interest
on the amounts to be refunded, or the greater amount as is
legally refundable.
The tax reporting positions at issue in the complaint resulted
from transactions in 1999 and 2000 in which Lehman Brothers Inc.
lent stock issued by corporations resident in the United Kingdom
to Lehman Brothers International (Europe) plc.
As a regulated broker-dealer in the United States, LBI bought,
sold, borrowed, lent, and otherwise transacted in stock issued by
companies resident in the United States, the United Kingdom, and
other foreign countries on a regular basis on behalf of its
customers and affiliates and for its own account. LBI frequently
borrowed stock, including U.K. Stock, from unrelated lenders in
the United States pursuant to standard stock lending agreements.
Whenever dividends were paid by the issuers of the borrowed
stock, LBI made payments to the unrelated lenders that were
representative of the actual dividends paid.
As a regulated broker-dealer, LBIE bought, sold, borrowed, lent,
and otherwise transacted in stock issued by companies resident in
the United States, the United Kingdom, and other foreign
countries on a regular basis on behalf of its customers and
affiliates and for its own account. As a broker-dealer, LBIE
regularly required a variety of stock and securities, including
U.K. Stock, to satisfy the demands of its customers and for its
own purposes. LBIE, therefore, frequently borrowed U.K. Stock
from LBI pursuant to a master overseas stock lending agreement,
which governed all stock lending transactions between LBI and
LBIE. Whenever dividends were paid by the issuers of the
borrowed U.K. Stock, this agreement required LBIE to make
payments to LBI that were representative of the actual dividends
paid.
Pursuant to the requirements of U.K. tax law and the provisions
of the Convention for the Avoidance of Double Taxation and the
Prevention of Fiscal Evasion with Respect to Taxes on Income and
Capital Gains, U.S.-U.K., Dec. 31, 1975, 31 U.S.T. 5668, LBI
incurred U.K. taxes with respect to the Substitute Payments
received from LBIE in connection with the Stock Loan
transactions.
LBHI asserted $141,412,611 of foreign tax credits on its 1999-
2000 Tax Returns for the U.K. taxes that LBI incurred with
respect to the Substitute Payments received from LBIE in
connection with the Stock Loan transactions. The IRS proposed
these adjustments to LBHI's 1999-2000 Tax Returns related to the
Stock Loan transactions:
-- disallowance of the Credits in the amount of $141,412,611
and reduction of taxable income in an amount equal to the
disallowed Credits, resulting in a $91,918,198 net increase
in LBHI's tax liability in the 1999 and 2000 tax years; and
-- imposition of accuracy-related penalties in the amount of
$18,383,639.
According to Shai Y. Waisman, Esq., at Weil Gotshal & Manges LLP,
in New York, more than 120 days have passed since LBHI properly
filed the 1999-2000 Refund Claims, and the IRS has not yet
responded to the claims. Accordingly, under Section
505(a)(2)(B)(i) of the Bankruptcy Code, the Court has
jurisdiction to determine the amount of any refund relating to
the 1999-2000 Refund Claims. No judicial or administrative
tribunal of competent jurisdiction has yet adjudicated the
claims, Mr. Waisman says.
By this adversary proceeding, LBHI asks the Court for:
(a) for erroneous denial of 1999 foreign tax credits, judgment
in favor of LBHI against the IRS in the amount of
$29,808,526 plus deficiency interest assessed on the
amount paid by LBHI and overpayment interest on the
amounts to be refunded, or any greater amount as is
legally refundable;
(b) for erroneous denial of 2000 foreign tax credits, judgment
in favor of LBHI against the IRS in the amount of
$62,109,672 plus deficiency interest assessed on the
amount paid by LBHI and overpayment interest on the
amounts to be refunded, or any greater amount as is
legally refundable;
(c) for erroneous assessment of penalties for 1999, judgment
in favor of LBHI in the amount of $5,961,705 plus interest
assessed on the amount paid by LBHI and overpayment
interest on the amounts to be refunded, or any greater
amount as is legally refundable;
(d) for erroneous assessment of penalties for 2000, judgment
in favor of LBHI in the amount of $12,421,934 plus
interest assessed on the amount paid by LBHI and
overpayment interest on the amounts to be refunded, or any
greater amount as is legally refundable; and
(e) LBHI's costs of the action.
About Lehman Brothers
Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the
fourth largest investment bank in the United States. For more
than 150 years, Lehman Brothers has been a leader in the global
financial markets by serving the financial needs of corporations,
governmental units, institutional clients and individuals
worldwide.
Lehman Brothers filed for Chapter 11 bankruptcy September 15, 2008
(Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition
listed US$639 billion in assets and US$613 billion in debts,
effectively making the firm's bankruptcy filing the largest in
U.S. history. Several other affiliates followed thereafter.
The Debtors' bankruptcy cases are handled by Judge James M. Peck.
Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife,
Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil,
Gotshal & Manges, LLP, in New York, represent Lehman. Epiq
Bankruptcy Solutions serves as claims and noticing agent.
On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the
U.S. District Court for the Southern District of New York, entered
an order commencing liquidation of Lehman Brothers, Inc., pursuant
to the provisions of the Securities Investor Protection Act (Case
No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as
trustee for the SIPA liquidation of the business of LBI
The Bankruptcy Court has approved Barclays Bank Plc's purchase of
Lehman Brothers' North American investment banking and capital
markets operations and supporting infrastructure for
US$1.75 billion. Nomura Holdings Inc., the largest brokerage
house in Japan, purchased LBHI's operations in Europe for US$2
plus the retention of most of employees. Nomura also
bought Lehman's operations in the Asia Pacific for US$225 million.
International Operations Collapse
Lehman Brothers International (Europe), the principal UK trading
company in the Lehman group, was placed into administration,
together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE
Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and
Mike Jervis, partners at PricewaterhouseCoopers LLP, have been
appointed as joint administrators to Lehman Brothers International
(Europe) on September 15, 2008. The joint administrators have
been appointed to wind down the business.
Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc.
filed for bankruptcy in the Tokyo District Court on September 16.
Lehman Brothers Japan Inc. reported about JPY3.4 trillion
(US$33 billion) in liabilities in its petition.
Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by Lehman Brothers Holdings, Inc., and other insolvency
and bankruptcy proceedings undertaken by its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
LESARRA ATTACHED: Files Schedules of Assets and Liabilities
-----------------------------------------------------------
Lesarra Attached Homes, L.P., filed with the U.S. Bankruptcy Court
for the District of Nevada its schedules of assets and
liabilities, disclosing:
Name of Schedule Assets Liabilities
---------------- ----------- -----------
A. Real Property $16,799,753
B. Personal Property $217,874
C. Property Claimed as
Exempt
D. Creditors Holding
Secured Claims $28,203,379
E. Creditors Holding
Unsecured Priority
Claims $1,040
F. Creditors Holding
Unsecured Non-priority
Claims $543,853
----------- -----------
TOTAL $17,017,627 $28,748,272
Reno, Nevada-based Lesarra Attached Homes, L.P., filed for Chapter
11 bankruptcy protection on March 12, 2010 (Bankr. D. Nev. Case
No. 10-50808). Stephen R. Harris, Esq., at Belding, Harris &
Petroni, Ltd, assists the Company in its restructuring effort.
The Company listed $10,000,001 to $50,000,000 in assets and
$10,000,001 to $50,000,000 in liabilities.
LEXINGTON PRECISION: Files Amended Reorganization Plan
------------------------------------------------------
Bill Rochelle at Bloomberg News reports that Lexington Precision
Corp. filed an amended Chapter 11 plan and disclosure statement
saying its reorganization will be funded partly by the sale of $22
million of stock, at $10 a share, to Commercial Finance Services
407 LLC. Other terms of the Plan are:
* Debt would be reduced by more than $50 million.
* Holders of senior subordinated notes will recover 51%.
Subordinated-note holders, owed $34.2 million in principal,
would elect to take 51% in cash or swap for stock,
exchanging about $20 of debt for each new share.
* General unsecured creditors are to be paid 80%, with 8% in
cash on implementation of the plan. The remainder is to be
paid 8.6% in cash at each of the ensuing nine quarters.
* Asbestos claims are to be paid in full with insurance
proceeds. If insurance is insufficient, the remainder will
be paid over time like general unsecured creditors.
* Secured debt under the company's plan is to be paid in full
through revised credit agreements.
The official creditors' committee and secured lenders are now
proposing a competing plan. In January, secured lenders withdrew a
separate reorganization plan they were proposing.
About Lexington Precision
Headquartered in New York, Lexington Precision Corp. --
http://www.lexingtonprecision.com/-- manufactures tight-tolerance
rubber and metal components for use in medical, automotive, and
industrial applications. As of February 29, 2008, the Company
employed about 651 regular and 22 temporary personnel.
The Company and its affiliate, Lexington Rubber Group Inc., filed
for Chapter 11 protection on April 1, 2008 (Bankr. S.D.N.Y. Lead
Case No.08-11153). Christopher J. Marcus, Esq., and Victoria
Vron, Esq., at Weil, Gotshal & Manges, represent the Debtors in
their restructuring efforts. The Debtors selected Epiq Systems -
Bankruptcy Solutions LLC as claims agent. The U.S. Trustee for
Region 2 appointed six creditors to serve on an official committee
of unsecured creditors. Paul N. Silverstein, Esq., and Jonathan
Levine, Esq., at Andrews Kurth LLP, represent the Committee as
counsel.
On June 30, 2008, the Debtors filed with the Bankruptcy Court a
plan of reorganization. It was amended twice, the latest
amendment dated December 8, 2008. The Debtors currently plan to
complete the liquidation of their connector-seal business before
seeking approval of the Amended Plan.
LIMITED BRANDS: Fitch Assigns 'BB' Rating on $300 Mil. Notes
------------------------------------------------------------
Fitch Ratings has assigned a 'BB' rating to Limited Brands, Inc.'s
proposed $300 million senior unsecured guaranteed notes due 2020.
The Rating Outlook is Negative. The notes will be guaranteed on
an unsecured basis by each of the subsidiaries that guarantee the
senior credit facility and the $500 million 8.5% senior notes due
2019. The net proceeds of the offering will be used to purchase
any and all of Limited's $191.5 million outstanding 6.125% notes
due 2012 and a portion of its $500 million outstanding 5.25% notes
due 2014 in two separate cash tender offers in an aggregate
principal amount equal to $300 million. Any proceeds from the
offering not spent on the purchasing of the notes may be used for
general corporate purposes and the repayment of other existing
debt.
The rating and Outlook reflect Limited's credit metrics,
increasingly competitive landscape and track record of
shareholder-friendly activities. The rating also reflects
Limited's strong market positions in intimate apparel and personal
care and beauty products, solid cash flow generation and strong
liquidity.
Limited is a leading intimate apparel as well as beauty and
personal care retailer under the brands Victoria's Secret, Pink,
La Senza, Bath & Body Works, C.O. Bigelow, White Barn Candle Co.
and Henri Bendel with 2,971 specialty stores presently. The
company's credit metrics improved in fiscal 2009 with leverage
(adjusted debt/EBITDAR) decreasing to 4.0 times (pro forma for the
recent $200 million term loan repayment) from 4.6x in fiscal 2008
and EBITDAR coverage of interest and rent expense remaining flat
at 2.3x over the same period. Limited has strong liquidity that
is supported by approximately $1.8 billion of cash as of Jan. 30,
2010, and over $800 million of availability under its credit
facility, which will provide financial flexibility to the company.
In addition, the company generated free cash flow of $779 million
in fiscal 2009. Fitch expects the company will use excess cash
flow for share repurchases given that the limitation on restricted
payments in the credit facility covenants has been lifted.
Fitch currently rates Limited:
-- Long-term Issuer Default Rating 'BB+';
-- Bank credit facility 'BB+';
-- Senior unsecured notes 'BB';
-- Short-term IDR 'B';
-- Commercial Paper 'B'.
LIMITED BRANDS: Moody's Rates $300 Mil. Senior Notes at 'Ba1'
-------------------------------------------------------------
Moody's Investors Service rated Limited Brands, Inc.'s
$300 million senior unsecured guaranteed notes due 2020 at Ba1.
All other existing ratings are affirmed including the Corporate
Family Rating at Ba2. The rating outlook remains positive.
The proceeds from the $300 million senior unsecured guaranteed
notes will be used to refinance a portion of Limited Brands 2012
and 2014 bond maturities. Moody's views the extension of Limited
Brands debt maturities as a credit positive event. Both the
newly-issued $300 million senior unsecured guaranteed notes and
the existing $500 million senior unsecured guaranteed notes due
2019 are rated one notch higher than the Corporate Family Rating
and two notches higher than the company's other senior unsecured
notes given their position in the capital structure and the
support provided by subsidiary guarantees. The two senior
unsecured guaranteed notes (totaling $800 million) are effectively
subordinated to the company's $926 million secured revolving
credit facility which is unrated.
Limited Brands' Ba2 Corporate Family Rating reflects its good
credit metrics, solid merchandising skills, well recognized brand
names, and ample liquidity. Despite these strengths, the rating
is constrained by Moody's concern that Limited Brands' two
predominant brands (Victoria's Secret and Bath & Body Works) may
have reached maturity. The rating agency is also concerned that
lower-than-anticipated returns at the larger multi-department
Victoria Secret stores that were opened as part of an expansion
initiative just prior to the recession, could constrain Limited
Brand's overall performance. An additional risk factor is the
company's historically shareholder friendly financial policy.
Moody's notes that Limited Brands' credit agreement has been
amended to provide it with additional flexibility to make dividend
payments and share repurchases.
The positive outlook reflects the possibility that Limited Brands'
ratings may be upgraded over the next 12 to 18 months given the
improvement in credit metrics.
This rating is assigned:
* $300 million senior unsecured guaranteed notes at Ba1 (LGD 3,
37%).
These ratings were affirmed and LGD point estimates changed:
* Corporate family rating at Ba2;
* Probability of default rating at Ba2;
* $500 million senior unsecured guaranteed notes at Ba1 ( LGD 3,
37% from 32%).
* Senior unsecured notes rating at Ba3 (LGD 5, 82% from 78%);
* Senior unsecured shelf rating at (P)Ba3;
* Senior subordinated shelf rating at (P)B1;
* Preferred stock shelf rating at (P)B2;
* Commercial paper rating at Not Prime.
The last rating action on Limited Brands was on March 9, 2010,
when its senior unsecured guaranteed notes were upgraded to Ba1
and the rating outlook was changed to positive from stable.
Headquartered in Columbus, Ohio, Limited Brands, Inc., operates
2,970 specialty stores under the Victoria's Secret, Bath & Body
Works, C.O. Bigelow, La Senza, White Barn Candle Co., and Henri
Bendel name plates. The company's products are also available
online. Revenues are about $8.6 billion.
LIMITED BRANDS: S&P Assigns 'BB' Rating on $300 Mil. Senior Notes
-----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB' rating to
Limited Brands's proposed offering of $300 million senior notes
due 2020. The notes will be guaranteed by certain of Limited's
subsidiaries on a senior unsecured basis and will therefore rank
pari passu with the company's $500 million 8.5% senior guaranteed
notes and senior to all other existing unsecured notes. The
recovery rating on the new notes is '3', indicating S&P's
expectation for meaningful (50%-70%) recovery in the event of
payment default. In addition, S&P affirmed the 'BB' corporate
credit rating on the company.
Limited will use proceeds to purchase any or all of its
$191.5 million unsecured notes due 2012 and a portion of its
$500 million unsecured notes due 2014 in two separate cash tender
offers. The company may use proceeds from the offering not spent
on purchasing the 2012 and 2014 notes for general corporate
purposes and payment of other outstanding debt.
S&P also raised its issue-level rating on the company's unsecured
notes to 'BB' from 'BB-' (the same as the corporate credit rating)
and revised S&P's recovery rating on these notes to '4',
indicating its expectation for average (30%-50%) recovery in the
event of default, from '5'. This rating action is due to
Limited's March 2010 prepayment of the remainder of its priority
term loan and an expected reduction in the company's revolver at
the time of S&P's default scenario, as Limited extended only
$800 million of its $1 billion revolver to 2014 through an
amendment in March 2010. Despite an expected increase in senior
guaranteed notes as a result of this transaction, overall reduced
debt levels result in improved expected recovery for the unsecured
notes in the event of payment default.
The ratings on Limited reflect the company's participation in the
intensely competitive specialty retail industry and weak credit
measures. The company's satisfactory market positions in intimate
apparel and personal care products and its geographic diversity
partially mitigate these weaknesses.
LIONS GATE: Urges Shareholders to Reject the Icahn Group's Offer
----------------------------------------------------------------
Lionsgate's Board of Directors, in consultation with its financial
and legal advisors, has determined, by unanimous vote of the
directors present and upon the unanimous recommendation of the
Special Committee of the Board, that the unsolicited amended
tender offer from Carl Icahn and certain of his affiliated
entities to purchase up to all of the common shares of Lionsgate
for U.S.$7.00 per share is financially inadequate, opportunistic
and coercive and is not in the best interests of Lionsgate, its
shareholders and other stakeholders.
Accordingly, the Board recommends that Lionsgate's shareholders
reject the Icahn Group's offer and not tender their shares. All
of Lionsgate's directors and executive officers have informed
Lionsgate that they do not currently intend to tender their shares
into the offer.
The basis for the Board's recommendation, which followed a
thorough review of the terms and conditions of the offer by the
Special Committee and the Board, is set forth in Lionsgate's
amended Schedule 14D-9 filed with the Securities and Exchange
Commission and notice of change to directors' circular filed with
Canadian securities regulators.
"We believe that the Icahn Group's offer remains financially
inadequate and does not reflect the full value of Lionsgate
shares," said Lionsgate Co-Chairman and Chief Executive Officer
Jon Feltheimer. "We believe that the offer pales in comparison to
the value inherent in the world class platform we have established
over the past ten years."
In addition to rejecting the Icahn Group's revised offer, the
Board recommends that shareholders vote to approve the Shareholder
Rights Plan at the Special Meeting of Shareholders to be held on
May 4, 2010.
Shareholders who do not attend the Special Meeting of Shareholders
can vote by submitting the WHITE proxy card they receive in the
mail. To ensure that all shares are accounted for, shareholders
should vote all of the WHITE cards that they receive.
About Lions Gate
British Columbia-domiciled and Santa Monica, California-
headquartered Lions Gate is a leading, diversified independent
producer and distributor of motion pictures, home entertainment,
television programming and animation worldwide and holds a
majority interest in the pioneering CinemaNow VOD business. The
Lions Gate brand name is synonymous with original, cutting edge,
quality entertainment in markets around the world.
As reported by the Troubled Company Reporter on March 10, 2010,
Standard & Poor's Ratings Services revised its rating outlook on
Lions Gate to negative from stable. At the same time, S&P
affirmed ratings on Lions Gate, including the 'B-' corporate
credit rating.
Lions Gate carries Moody's "B2" corporate family rating and
probability of default rating.
LIVE NATION: Moody's Rates New Senior Secured Facilities at 'Ba2'
-----------------------------------------------------------------
Moody's Investors Service rated Live Nation Entertainment, Inc.'s
(Live Nation or the company) proposed new senior secured credit
facilities Ba2 and its new senior unsecured notes B1. As part of
the rating action, the company was assigned a Ba3 corporate family
rating, a Ba3 probability of default rating and a SGL-1
speculative grade liquidity rating (indicating very good
liquidity). The rating outlook is stable.
LNE is the parent company of Live Nation Worldwide, Inc. and
TicketMaster Entertainment LLC. Through a comprehensive
refinancing and legal entity reorganization transaction, most of
the existing debts of LNW and TM will be repaid with surviving
debts becoming direct obligations of Live Nation. Among the
surviving debts is $287 million of 10.75% senior unsecured notes
issued by TM due August 1, 2016. Upon being assumed by Live
Nation, these notes will rank equally with Live Nation's other
unsecured debts and will be rated B1 (downgraded from Ba3).
Moody's will withdraw ratings that do not survive the transaction
in due course.
Viewed in isolation, since the refinancing transaction
contemplates repayment of preferred shares, contributes additional
cash to the balance sheet and involves fees and expenses, it
results in modestly increased debt and leverage. Moody's expect
this to be transitory. The rating assessment reflects Live
Nation's leading position in the live entertainment industry with
a revenue stream derived from live entertainment ticketing, venue
operation, concert promotion (based on a significant roster of
well-recognized performing artists), and artist management
(through a controlling interest in Front Line Management Group,
Inc.). Moody's view the business as being relatively stable;
while the number of events and event goers has been adversely
impacted by the ongoing recession, revenues have held up quite
well as pricing gains largely off-set volume declines. The
assessment also incorporates anticipated benefits from the merger
of previously separate businesses operated by TM and LNW. Despite
this, Moody's expect margins to be relatively thin, and even with
limited capital expenditures for a couple of years, anticipate
that free cash flow will amount to only +/- 5% of total adjusted
debt during 2010 and 2011. Subsequently, with business
integration costs behind it and merger benefits fully realized,
the company may be able to repay more material amounts of debt.
While management has noted this as a goal, Live Nation has a
history of pursuing growth and it remains to be seen whether
management will have the discipline to allocate cash towards debt
reduction.
The company has very good liquidity (SGL-1). While much of Live
Nation's cash balance relates to ticket sales for future artist
performances Moody's estimate that +/- $440 million of cash is
"free." When combined with a $300 million five year committed
revolving credit facility that is expected to be largely undrawn
at closing, and access to which is not expected to be encumbered
by financial covenant compliance considerations, liquidity is
assessed as being very good. It is also noted that Live Nation
does not have any material near-term debt maturities, and has some
non-core assets that could be disposed of should liquidity
augmentation be required.
Outlook and Rating Actions:
Assignments:
Issuer: Live Nation Entertainment, Inc.:
* Corporate Family Rating: Assigned Ba3
* Probability of Default Rating: Assigned Ba3
* Outlook: Assigned Stable
* Speculative Grade Liquidity Rating: Assigned SGL-1
* Guaranteed Senior Secured Credit Facility Rating: Assigned Ba2
(LGD2, 29%)
* Guaranteed Senior Unsecured Notes: Assigned B1 (LGD5, 77%)
* Guaranteed Senior Unsecured Notes (originally issued by TM):
Downgraded to B1 (LGD5, 77%) from Ba3 (LGD5, 84%)
To be withdrawn shortly after closing:
Issuer: Live Nation Worldwide, Inc.:
* Corporate Family Rating: Currently B1
* Probability of Default Rating: Currently B1
* Outlook: Currently Stable
* Speculative Grade Liquidity Rating: Currently SGL-3
* Guaranteed Senior Secured Credit Facility Rating: Currently Ba3
(LGD3, 31%)
Issuer: TicketMaster Entertainment LLC:
* Corporate Family Rating: Currently Ba2
* Probability of Default Rating: Currently Ba2
* Outlook: Currently Stable
* Speculative Grade Liquidity Rating: Currently SGL-1
* Guaranteed Senior Secured Credit Facility Rating: Currently Ba1
(LGD3, 30%)
This is the initial rating action for Live Nation. Previously, on
January 26, 2010, Moody's concluded concurrent ratings reviews for
LNW and TM by confirming ratings for both companies.
Live Nation, headquartered in Beverly Hills, California, operates
a leading live entertainment ticketing and marketing company,
owns, operates and/or exclusively books live entertainment venues
in the U.S. and Europe, and owns the rights to several globally
recognized performing artists under contracts of varying scope and
duration.
LOCATION BASED: February 28 Balance Sheet Upside-Down by $1.4MM
---------------------------------------------------------------
Location Based Technologies, Inc., filed on April 19, 2010, its
quarterly report on Form 10-Q for the three months ended
February 28, 2010.
The Company's balance sheet as of February 28, 2010, showed
$3,224,946 in assets and $4,655,733 of debts, for a stockholders'
deficit of $1,432,787.
The Company reported a net loss of $1,465,032 on $164,297 of
revenue for the three months ended February 28, 2010, compared
with a net loss of $2,015,678 on $70,782 of revenue for the same
period of 2009.
"The Company has incurred net losses since inception, and as of
February 28, 2010, had an accumulated deficit of $23,543,700.
These conditions raise substantial doubt as to the Company's
ability to continue as a going concern."
A full-text copy of the quarterly report is available for free at:
http://researcharchives.com/t/s?6077
Headquartered in Irvine, Calif., Location Based Technologies, Inc.
(OTC BB: LBAS) designs, develops, and markets personal, pet,
personal property and vehicle locator devices and services.
LYONDELL CHEMICAL: Names Initial Members of New Topco Board
-----------------------------------------------------------
Lyondell Chemical Company and its debtor affiliates filed with the
U.S. Bankruptcy Court for Southern District of New York on
April 5, 2010, certain exhibits to their Third Amended Joint Plan
of Reorganization.
Initial Members and Officers of
New Topco Board
In accordance with Section 1129(a)(5)(A) of the Bankruptcy Code
and the Amended Plan, these individuals are the current known,
expected members of the initial Supervisory Board of
LyondellBasell Industries N.V.:
* Joshua J. Harris
* Scott M. Kleinman
* Phillip Kassin
* Jeffrey S. Serota
The other members of the Supervisory Board have not yet been
identified and will be disclosed prior to confirmation hearing on
the Amended Plan, George A. Davis, Esq., at Cadwalader, Wickersham
& Taft LLP, in New York -- george.davis@cwt.com -- counsel to the
Debtors, says.
Subject to confirmation of the Amended Plan and the occurrence of
the effective date of the Amended Plan, these individuals are the
executive officers who will manage the New Topco:
Name Title
---- -----
James L. Gallogly Chief Executive Officer
C. Kent Potter Chief Financial Officer
Craig Glidden Executive Vice President
and Chief Legal Officer
Kevin W. Brown Senior Vice President,
Refining
Bhavesh B. (Bob) Patel Senior Vice President, O&P
- Americas
Anton de Vries Senior Vice President, O&P
-EAI
Patrick Quarles Senior Vice President
Intermediates & Derivatives
Just Jansz Senior Vice President,
Technology
A full-text copy of the employment backgrounds of the Initial
Members and Officers is available for free at:
http://bankrupt.com/misc/Lyondell_InitialOfficersProfiles.pdf
Equity Compensation Plans
A LyondellBasell Industries Medium Term Incentive Plan and a
LyondellBasell Industries 2010 Long-Term Incentive Plan of the New
Topco will automatically become effective as of the Plan Effective
Date.
The purpose of the LTI Plan is to further the interests of the New
Topco and its shareholders by providing incentives in the form of
Awards to employees and directors who can contribute materially to
the success and profitability of the Company, Mr. Davis relates.
Similarly, the MTI aims to attract, motivate, and retain highly
talented and competent individuals to serve as senior management
and executive employees of the New Topco by providing competitive
compensation opportunities similar to those of comparable
companies, he adds.
The initial awards to employees and directors under the
Compensation Plans will consist of an aggregate of:
(i) about $18 million in MTI target awards granted under the
MTI;
(ii) stock options and stock appreciation rights with respect
to about 9 million shares of new Common Stock granted
under the LTI; and
(iii) restricted stock or restricted stock units in respect of
about four million shares of new Common Stock granted
under the LTI.
The form and terms of all or a portion of the Emergence Grants,
including the methodology for allocations of MTI and LTI awards
under the Compensation Plans, were reviewed and authorized by the
Remuneration Committee of the Supervisory Board of LyondellBasell
Industries AF S.C.A. and, will be approved by the Supervisory
Board of the New Topco at their meetings this month.
To the extent the Emergence Grants are not fully allocated as of
the Effective Date, not more than 90 days after the Effective
Date, the Boards will authorize and approve the grant of all
Unallocated Emergence Grants using the same methodology used by
the Boards for individual selection and valuing and allocating
among individual MTI and LTI awards as used by the Boards for the
Allocated Emergence Grants.
The number of shares reserved for issuance under the Compensation
Plans represents about 3.90% of the total number of shares of new
Common Stock issued and outstanding on the Effective Date.
In addition and upon review, the Remuneration Committee of the
Supervisory Board of LBI determined to award Stephen Cooper, as
vice chairman of the Supervisory Board and chairman of the
Restructuring Committee $9,750,000 for his extraordinary efforts
and contributions in furtherance of the Debtors' restructuring
efforts, Mr. Davis discloses. On April 5, 2010, the Supervisory
Board approved payment of a bonus to Mr. Cooper for $9,750,000 as
recommended by the Remuneration Committee. Mr. Cooper was recused
from the Supervisory Board's vote on the approval
of his bonus.
A full-text copy of the Compensation Plans is available for free
at http://bankrupt.com/misc/Lyondell_CompensationPlans.pdf
Creditors Committee's Supplements
In a letter appended to the Plan Supplement, the Official
Committee of Unsecured Creditors disclosed certain information
related to certain of the documents in the Plan Supplement.
According to the Creditors' Committee, the Plan Supplement will
create the vehicles for pursuing certain claims on behalf of
holders of Allowed General Unsecured Claims and Allowed 2015 Notes
Claims after the confirmation of the Amended Plan.
The Creditors Committee reminded the Court that two separate
trusts, a Litigation Trust and Creditor Trust, will be formed to
pursue the Claims. Edward S. Weisfelner, Esq., a member at Brown
Rudnick LLP -- eweisfelner@brownrudnick.com -- and the Creditors'
Committee's lead attorney has been selected as Trustee for the
Litigation and Creditor Trusts, subject to the oversight of the
Trust Advisory Board.
The Creditors Committee also related that certain of the claims of
defendants in an action it commenced against the Debtors'
prepetition lenders and directors and not party to the Revised
Lender Litigation Settlement will be tried as part of the Phase I
as soon as late 2010.
Together with the Creditors Committee's Letter, the Debtors also
submitted drafts of (i) the responsibilities of a creditor
representative; (ii) Litigation and Creditor Trust Agreements; and
(iii) a cooperation agreement to be entered between LyondellBasell
Industries AF S.C.A. and Mr. Weisfelner. A full-text copy of the
Creditors Committee Supplements is available for free at
http://bankrupt.com/misc/Lyondell_CredCommSupplemnts.pdf
Issuance of Notes
The Debtors submitted a draft description of Third Lien Notes to
be issued by the New TopCo under an indenture pursuant to the
Amended Plan, available for free at:
http://bankrupt.com/misc/Lyondell_ThirdLienNotes.pdf
A draft copy of the related Third Lien Notes Indenture is
available for free at:
http://bankrupt.com/misc/Lyondell_3rdLienNotesIndenture.pdf
Moreover, Lyondell Chemical will issue 2014 Notes under an
indenture pursuant to the Amended Plan if the DIP Roll-Up Claims
Class votes against the Amended Plan. A draft description of the
2014 Notes is available for free at:
http://bankrupt.com/misc/Lyondell_2014Notes.pdf
A draft copy of the related 2014 Notes Indenture is available for
free at http://bankrupt.com/misc/Lyondell_2014NotesIndenture.pdf
The New TopCo will issue warrants exercisable until the expiration
date to purchase up to an aggregate of 11,508,204 shares of Class
A Common Stock at an exercise price of $15.90 per share pursuant
to an agreement it will enter with a warrant agent. A draft of
the Warrant Agreement is available for free at:
http://bankrupt.com/misc/Lyondell_WarrantAgr.pdf
Exit Financing Transactions
As previously reported, the Debtors sought and obtained the
Court's authority to enter into transactions related to their exit
financing under the Amended Plan.
The exit financing transactions are:
* a $500,000,000 term loan credit facility among the New
TopCo, LBI Escrow Corporation, Lyondell Chemical, UBS AG,
Stamford Branch and certain lenders;
* an indenture for 8% senior secured dollar notes due 2017 and
8% senior secured euro notes due 2017, among LBI Escrow, the
New Topco and Wilmington Trust FSB as indenture trustee; and
* an asset-based revolving credit facility for $1,750,000,000
among New Topco, LBI Escrow and certain lenders.
Executed copies of the Credit Agreements are:
http://bankrupt.com/misc/Lyondell_TermLoanFacility.pdf
http://bankrupt.com/misc/Lyondell_FirstLienIndenture.pdf
http://bankrupt.com/misc/Lyondell_ABLCreditFacility.pdf
In light of these exit financing transactions, the New Topco will
enter into first lien, junior lien and third lien intercreditor
agreements with the collateral agents under the ABL Facility, Term
Loan Agreement, the Third Lien Notes and 2014 Notes. A draft copy
of the Intercreditor Agreement is available for free at:
http://bankrupt.com/misc/Lyondell_IntercreditorAgrs.pdf
Other Exhibits
The Debtors will assume certain executory contracts under the
Amended Plan, a list of which is available for free at:
http://bankrupt.com/misc/Lyondell_ContractstobeAssumed.pdf
Any party that objects to the treatment of its contracts of claims
under the Assumption Schedule must file an objection by April 14,
2010.
The Debtors also filed with the Court drafts of:
(a) an amendment to the articles of association of the New
Topco, available for free at:
http://bankrupt.com/misc/Lyondell_AmArticleofAssn.pdf
(b) a nomination agreement between an investor and the New
Topco, whereby an investor will be entitled to nominate
one, two or three individuals to the New Topco Supervisory
Board, available for free at:]
http://bankrupt.com/misc/Lyondell_NominationAgr.pdf
(c) the Rules of the Supervisory Board of the New Topco,
available for free at:
http://bankrupt.com/misc/Lyondell_NewTopcoRules.pdf
(d) a certificate of amendment of Lyondell Chemical's
certificate of incorporation, available for free at:
http://bankrupt.com/misc/Lyondell_AmCertofIncorporatn.pdf
(e) a Millennium Custodial Trust Agreement to be entered among
Debtor Millennium Chemicals, Inc., AlixPartners LLP as
Managing and liquidating trustee an a Delaware trustee,
available for free at:
http://bankrupt.com/misc/Lyondell_CustodialTrustAgr.pdf
(f) an Environmental Custodial Trust Agreement to be entered
among the Debtors, the United States of America and
certain governmental entities, available for free at:
http://bankrupt.com/misc/Lyondell_EnvlCustodialTrustAgr.pdf
(g) a registration rights agreement to be entered by the New
Topco and holders of the company's new common stock,
available for free at:
http://bankrupt.com/misc/Lyondell_RegistrationRightsAgr.pdf
About Lyondell Chemical
LyondellBasell Industries is one of the world's largest polymers,
petrochemicals and fuels companies. It is the global leader in
polyolefins technology, production and marketing; a pioneer in
propylene oxide and derivatives; and a significant producer of
fuels and refined products, including biofuels. Through research
and development, LyondellBasell develops innovative materials and
technologies that deliver exceptional customer value and products
that improve quality of life for people around the world.
Headquartered in The Netherlands, LyondellBasell --
http://www.lyondellbasell.com/-- is privately owned by Access
Industries.
Basell AF and Lyondell Chemical Company merged operations in 2007
to form LyondellBasell Industries, the world's third largest
independent chemical company. LyondellBasell became saddled with
debt as part of the US$12.7 billion merger. On January 6, 2009,
LyondellBasell Industries' U.S. operations and one of its European
holding companies -- Basell Germany Holdings GmbH -- filed
voluntary petitions to reorganize under Chapter 11 of the U.S.
Bankruptcy Code to facilitate a restructuring of the company's
debts. The case is In re Lyondell Chemical Company, et al.,
Bankr. S.D.N.Y. Lead Case No. 09-10023). Seventy-nine Lyondell
entities, including Equistar Chemicals, LP, Lyondell Chemical
Company, Millennium Chemicals Inc., and Wyatt Industries, Inc.
filed for Chapter 11. In May 2009, one of the cases was dismissed
-- Case No. 09-10068 -- because it is duplicative of Case No. 09-
10040 relating to Debtor Glidden Latin America Holdings.
The Hon. Robert E. Gerber presides over the case. Deryck A.
Palmer, Esq., at Cadwalader, Wickersham & Taft LLP, in New York,
serves as the Debtors' bankruptcy counsel. Evercore Partners
serves as financial advisors, and Alix Partners and its subsidiary
AP Services LLC, serves as restructuring advisors. AlixPartners'
Kevin M. McShea acts as the Debtors' Chief Restructuring Officer.
Clifford Chance LLP serves as restructuring advisors to the
European entities. Lyondell Chemical estimated that consolidated
assets total US$27.12 billion and debts total US$19.34 billion as
of the bankruptcy filing date.
Lyondell has obtained approximately US$8 billion in DIP financing
to fund continuing operations. The DIP financing includes two
credit agreements: a US$6.5 billion term loan, which comprises a
US$3.25 billion in new loans and a US$3.25 billion roll-up of
existing loans; and a US$1.57 billion asset-backed lending
facility.
LyondellBasell Industries AF S.C.A. and another affiliate were
voluntarily added to Lyondell Chemical's reorganization filing
under Chapter 11 on April 24, 2009, in order to seek protection
against claims by certain financial and U.S. trade creditors. On
May 8, 2009, LyondellBasell Industries added 13 non-operating
entities to Lyondell Chemical Company's reorganization filing
under Chapter 11 of the U.S. Bankruptcy Code. All of the entities
are U.S. companies and were added to the original Chapter 11
filing for administrative purposes.
Bankruptcy Creditors' Service, Inc., publishes Lyondell Bankruptcy
News. The newsletter tracks the Chapter 11 proceeding undertaken
by Lyondell Chemical Company and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
LYONDELL CHEMICAL: Settles $7 Bil. in Environmental Claims by U.S.
------------------------------------------------------------------
Lyondell Chemical Co. and its units seek the U.S. Bankruptcy
Court's permission to enter into a settlement agreement with the
United States of America; certain state environmental agencies
from the states of California, Illinois, Maryland, Michigan, North
Carolina, Pennsylvania and Texas; and a trustee under the
Environmental Custodial Trust.
Christopher R. Mirick, Esq., at Cadwalader, Wickersham & Taft LLP,
in New York, tells the Court that the Settlement Agreement
resolves multiple environmental claims and liabilities asserted by
the federal and state governments totaling $7 billion. He reminds
the Court that the federal and state government agencies filed
proofs of claim against certain of the Debtors asserting various
environmental claims and liabilities totaling $5.5 billion. The
asserted Claims are:
Agency Claim No. Claim Amt.
------ --------- ----------
California Regional Water Quality 12788, 12789, 12790, -
Control Board of the Los Angeles 12790, 12791, 12792,
Region -- LA Regional Board -- 12793, 12974, 12795
California State Water Resources 12796, 12797, 12798,
Control Board -- California 12799, 12800, 12801,
State Board -- 12802, 12803
Michigan Department of Natural 12483 $360,296,257
Resources and the Environment to $408,696,257
and the Michigan Natural
Resource Trustees -- Settling
Michigan Agencies --
U.S. Environmental Protection 11940, 11941, 12968,
Agency, the U.S. Department of 12969, 12970, 12971,
the Interior and the National 12972, 12973, 12974,
Oceanic and Atmospheric 279491
Administration -- Settling
Federal Agencies --
California Department of Toxic 12866, 12873 $24,876,506
Substance Control -- California
DTSC -- 12867 $10,890,000
North Carolina Division of 4430 $6,495,010
Waste Management -- NCDWM --
Texas Commission on Environmental 8183 -
Quality -- TCEQ --
Illinois Environmental Protection 13031 -
Agency and the Illinois
Department of Natural Resources --
State of Illinois Natural Resources
Trustees --
The Debtors previously objected to the Claims. The U.S., the LA
Regional Board, the California State Board, and the California
DTSC asked the U.S. District Court for the Southern District of
New York to withdraw the reference to the Bankruptcy Court as to
the Objections. In March 2010, the District Court denied the
Motion to Withdraw the Reference as moot upon suggestion of
settlement, but provided that any party to the Motion to Withdraw
the Reference could restore the matter to the District Court's
calendar within 60 days.
Pursuant to the Debtors' Third Amended Joint Plan of
Reorganization, the Environmental Custodial Trust is created to
own certain real property, free and clear of all liens for the
benefit of the U.S.; the California Regional Water Quality
Control Board, Central Valley Region; the State of Illinois;
EIPA; the Maryland Department of the Environment; MDNRE; NCDWM;
the Department of Environmental Protection of the Commonwealth of
Pennsylvania; and the TCEQ.
The Transferred Real Properties consist of these parcels: the
Allied Paper Mill property in Michigan; the Beaver Valley
property in Pennsylvania; the Bully Hill; Rising Star and
Excelsior Mine properties in California; the Charlotte property
in North Carolina; the Gypsum Pile property in Illinois; the
Saint Helena property in Maryland; and the Turtle Bayou property
in Texas.
The salient terms of the Settlement Agreement are:
(A) The allowance as general unsecured claims of the claims
filed by the:
-- the U.S. on behalf of the EPA, aggregating
$1,011,144,336;
-- the U.S. on behalf of the "Federal Trustees,"
aggregating $124,731,125;
-- the U.S. on behalf of the DOI, aggregating $20,529;
-- California DTSC, aggregating $7,000,000;
-- California Central Valley Regional Board, aggregating
$1,000,000;
-- LA Regional Board, aggregating $5,000,000;
-- State of Illinois Natural Resource Trustees, for
$955,161; and
-- Settling Michigan Agencies for $30,067,687.
(B) The allocation of the funds to be transferred to the
Environmental Custodial Trust pursuant to an Environmental
Custodial Trust Agreement:
* $53,721,850 for the Allied Paper Mill Transferred Real
Property;
* $2,000,000 for the Beaver Valley Transferred Real
Property;
* $8,000,000 for the Bully Hill, Rising Star, and
Excelsior Mines Transferred Real Properties;
* $5,300,000 for the Charlotte Transferred Real Property;
* $1,100,000 for the Gypsum Pile Transferred Real
Property;
* $10,000,000 for the Saint Helena Transferred Real
Property;
* $6,800,000 for the Turtle Bayou Transferred Real
Property; and
* $21,500,000 for administrative expenses of the
Environmental Custodial Trust;
(C) Cash payments and distributions to the:
(a) United States on behalf of the EPA, aggregating
$53,628,150;
(b) California DTSC, for $4,000,000;
(c) LA Regional Board, for 3,500,000; and
(d) California Central Valley Regional Board, for $500,000
to resolve Debtors' injunctive obligations as alleged
by the Settling Agencies.
(D) The creation of procedures for the determination of
liability and the satisfaction of any claims against the
Debtors that may arise out of certain additional sites and
reserved additional sites. Additional Sites are sites not
owned or operated by a Debtor that were listed on the
Debtors' Statements of Financial Affairs, but were not the
subject of a proof of claim filed by the relevant
government agency.
(E) The payment to the United States, the Settling California
Agencies, the State of Illinois Natural Resource Trustees,
and the Settling Michigan Agencies, as applicable, of 70%
of any insurance proceeds that the Debtors may recover on
account of any liquidated site exceeding the Debtors'
costs of pursuing those insurance proceeds.
(F) The resolution and satisfaction of the Debtors'
obligations to perform work pursuant to any outstanding
Consent Decree, Unilateral Administrative Order, Agreed
Order, Administrative Order on Consent, or permit
regarding any of the Transferred Real Properties and the
removal of the Debtors as a party to those orders,
decrees, or permits;
(G) The withdrawal of the Objections to the U.S., California
DTSC, the California State Board, and the LA Regional
Board Proofs of Claim;
(H) The withdrawal of the U.S. and the Settling
California Agencies' Motion to Withdraw the Reference.
(I) The covenant by the EPA, the States, Federal Trustees,
TCEQ, not to file a civil action or to take any
administrative or other civil action against the Debtors
or the "Custodial Trust Parties" under Section 106 or 107
of the Comprehensive Environmental Response, Compensation,
and Liability Act, and Section 7002 or 7003 of the
Resource Conservation and Recovery Act, or any similar
state laws with respect to each of the Liquidated Sites
and Transferred Real Properties.
(J) The covenant not to sue and agreement not to assert or
pursue any claims or causes of action by the Debtors and
the Environmental Custodial Trust Trustee against the
U.S. and the States with respect to the Liquidated Sites
or Transferred Real Properties and the cash payments set
forth in the Settlement Agreement.
(K) The protection of the Debtors and the Custodial Trust
Parties from contribution actions or claims as provided by
Section 113(f)(2) of CERCLA.
(L) The release of all financial assurance maintained by the
Debtors at Liquidated Sites or Transferred Real
Properties, within 30 days after the Debtors transfer all
funds pursuant to the Settlement Agreement.
Pursuant to the Settlement Agreement, the Debtors and the
Environmental Custodial Trust Beneficiaries have agreed to
appoint Jay A. Steinberg of Le Petomane XXIII, Inc. as the
Environmental Custodial Trust Trustee.
Mr. Mirick stresses that the Settlement Agreement resolves about
$5.5 billion of asserted claims against the Debtors for allowed
general unsecured claims for $1.18 billion. The creation of the
Environmental Custodial Trust, and its funding for
$108.4 million, removes nine properties, which are subject to
significant environmental liabilities, from the Debtors' estates,
he further notes. More importantly, the Settlement Agreement
reflects a substantial compromise of the legal positions of
federal and state government entities, and the legal
position of the Debtors, he asserts. Absent the Settlement
Agreement, the Debtors will have to expend significant resources
litigating these disputes, potentially causing delay to their
reorganization, and with no assurance that the Debtors will
succeed at trial, he maintains.
U.S. Files Notice in Federal Register
The U.S. asks the Bankruptcy Court to not approve the Settlement
Agreement at this time.
Counsel to the U.S., Pierre G. Armand, Esq., assistant U.S.
attorneys, in New York -- pierre.armand@usdoj.gov -- relates that
the notice of the lodging of the Settlement Agreement will be
published in the Federal Register, after which the U.S.
Department of Justice will accept public comments on the
Settlement Agreement for a 15-day period. In addition, the
States will accept public comments on the Settlement Agreement
during the same 15-day period. After the conclusion of the
comment period, the U.S. and the States will file with the
Bankruptcy Court any comments received, as well as responses to
the comments, and at that time, if appropriate, will seek the
Bankruptcy Court's approval of the Settlement Agreement.
The Bankruptcy Court will consider the Debtors' request on
April 23. Objections are due April 14.
Georgia-Pacific Objects
Georgia-Pacific, LLC complains that the 15-day period for public
comment and review of the Settlement Agreement violates the
timeframe under CERCLA. Mark A. Broude, Esq., at Latham & Watkins
LLP, in New York -- mark.broude@lw.com -- counsel to Georgia-
Pacific, asserts that the CERCLA requires a 30-day notice period
for public comment. Neither the EPA nor the Debtors can ignore
that statutory requirement, was designed to give aggrieved non-
parties like Georgia-Pacific a sufficient opportunity to review
and comment on settlements that could negatively impact them, he
argues. For this reason, the U.S. is without authority to enter
into the Settlement Agreement, he tells the Court.
Mr. Broude further contends that the Debtors' Settlement Agreement
Motion is silent on the legal standards for the approval of the
Settlement Agreement under the CERCLA, and yet, it is clear that
the Settlement Agreement must comply with the CERCLA's
requirements.
Thus, Georgia-Pacific asks the Bankruptcy Court to deny the
Debtors' Settlement Agreement Motion. Georgia-Pacific further
asks the Bankruptcy Court to adjourn the April 23 hearing on the
Settlement Agreement Motion and direct the U.S. to comply with the
30-day minimum public comment period through a publication of a
new 30-day Notice in the Federal Register or an extension of the
existing Notice.
Kalamazoo River Advocates
Seek Justification on CleanUp Amount
Advocates of Kalamazoo River, in Michigan want federal officials
to explain how they determined $53.7 million was enough to clean
up the Allied landfill, Chris Killian of mlive.com reports.
The Allied Landfill is among the properties subject to the
proposed Settlement Agreement, whereby the Debtors agreed to pay
about $162 million to settling state environmental agencies.
"The agreement provides no information on how these sums were
arrived at," Robert Whitesides, treasurer of the watershed council
was quoted by mlive.com as saying.
According to the report, the council intends to send a letter to
the Justice Department requesting the agency to hold a public
meeting in Kalamazoo before April 23. The council will use the
meeting to (i) lobby for more funding on the landfill cleanup and
(ii) seek justification of the cleanup amount from the federal
officials, mlive.com discloses.
The bankruptcy of the Debtors delayed the cleanup of the Kalamazoo
River, Tiffany Kary of Bloomberg News reports. The Debtors
previously objected to certain claims filed by state environmental
agencies, including a $2.5 billion in cleanup costs asserted by
EPA for the Kalamazoo River.
About Lyondell Chemical
LyondellBasell Industries is one of the world's largest polymers,
petrochemicals and fuels companies. It is the global leader in
polyolefins technology, production and marketing; a pioneer in
propylene oxide and derivatives; and a significant producer of
fuels and refined products, including biofuels. Through research
and development, LyondellBasell develops innovative materials and
technologies that deliver exceptional customer value and products
that improve quality of life for people around the world.
Headquartered in The Netherlands, LyondellBasell --
http://www.lyondellbasell.com/-- is privately owned by Access
Industries.
Basell AF and Lyondell Chemical Company merged operations in 2007
to form LyondellBasell Industries, the world's third largest
independent chemical company. LyondellBasell became saddled with
debt as part of the US$12.7 billion merger. On January 6, 2009,
LyondellBasell Industries' U.S. operations and one of its European
holding companies -- Basell Germany Holdings GmbH -- filed
voluntary petitions to reorganize under Chapter 11 of the U.S.
Bankruptcy Code to facilitate a restructuring of the company's
debts. The case is In re Lyondell Chemical Company, et al.,
Bankr. S.D.N.Y. Lead Case No. 09-10023). Seventy-nine Lyondell
entities, including Equistar Chemicals, LP, Lyondell Chemical
Company, Millennium Chemicals Inc., and Wyatt Industries, Inc.
filed for Chapter 11. In May 2009, one of the cases was dismissed
-- Case No. 09-10068 -- because it is duplicative of Case No. 09-
10040 relating to Debtor Glidden Latin America Holdings.
The Hon. Robert E. Gerber presides over the case. Deryck A.
Palmer, Esq., at Cadwalader, Wickersham & Taft LLP, in New York,
serves as the Debtors' bankruptcy counsel. Evercore Partners
serves as financial advisors, and Alix Partners and its subsidiary
AP Services LLC, serves as restructuring advisors. AlixPartners'
Kevin M. McShea acts as the Debtors' Chief Restructuring Officer.
Clifford Chance LLP serves as restructuring advisors to the
European entities. Lyondell Chemical estimated that consolidated
assets total US$27.12 billion and debts total US$19.34 billion as
of the bankruptcy filing date.
Lyondell has obtained approximately US$8 billion in DIP financing
to fund continuing operations. The DIP financing includes two
credit agreements: a US$6.5 billion term loan, which comprises a
US$3.25 billion in new loans and a US$3.25 billion roll-up of
existing loans; and a US$1.57 billion asset-backed lending
facility.
LyondellBasell Industries AF S.C.A. and another affiliate were
voluntarily added to Lyondell Chemical's reorganization filing
under Chapter 11 on April 24, 2009, in order to seek protection
against claims by certain financial and U.S. trade creditors. On
May 8, 2009, LyondellBasell Industries added 13 non-operating
entities to Lyondell Chemical Company's reorganization filing
under Chapter 11 of the U.S. Bankruptcy Code. All of the entities
are U.S. companies and were added to the original Chapter 11
filing for administrative purposes.
Bankruptcy Creditors' Service, Inc., publishes Lyondell Bankruptcy
News. The newsletter tracks the Chapter 11 proceeding undertaken
by Lyondell Chemical Company and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
LYONDELL CHEMICAL: Texas Tax Claimants Object to Plan
-----------------------------------------------------
County of Calhoun, Texas; Hardin-Jefferson Independent School
District; County of Harrison; Harrison Central Appraisal District;
City of Mansfield, collectively known as Texas Tax Claimants
complain that the Debtors' Third Amended Joint Plan of
Reorganization fail to provide fair and equitable treatment to the
Texas Tax Authorities' administrative expense claims as required
under Section 1129(b)(1) and (2)(A) of the Bankruptcy Code.
The Texas Tax Claimants assert that clarification is needed that
their ad valorem tax claims:
(i) are deemed to be "liabilities incurred in the ordinary
course of business;
(ii) will be paid timely in the ordinary course of business;
and
(iii) will neither be subject to the requirements of filing
claims for those taxes, nor be subject to any provisions
regarding the Administrative Expense Bar Date.
Michael Reed, Esq., at McCreary, Veselka, Bragg & Allen, P.C., in
Round Rock, Texas -- mreed@mvbalaw.com -- argues that under Texas
law, the Texas Tax Claimants' claims are secured and are entitled
to express retention of their property tax liens, at the priority
they hold under Texas law, until all taxes, penalties and interest
protected by those liens have been paid.
The Texas Tax Claimants, thus, ask the Court to deny confirmation
of the Amended Plan unless appropriate provisions are included to
clarify their rights.
About Lyondell Chemical
LyondellBasell Industries is one of the world's largest polymers,
petrochemicals and fuels companies. It is the global leader in
polyolefins technology, production and marketing; a pioneer in
propylene oxide and derivatives; and a significant producer of
fuels and refined products, including biofuels. Through research
and development, LyondellBasell develops innovative materials and
technologies that deliver exceptional customer value and products
that improve quality of life for people around the world.
Headquartered in The Netherlands, LyondellBasell --
http://www.lyondellbasell.com/-- is privately owned by Access
Industries.
Basell AF and Lyondell Chemical Company merged operations in 2007
to form LyondellBasell Industries, the world's third largest
independent chemical company. LyondellBasell became saddled with
debt as part of the US$12.7 billion merger. On January 6, 2009,
LyondellBasell Industries' U.S. operations and one of its European
holding companies -- Basell Germany Holdings GmbH -- filed
voluntary petitions to reorganize under Chapter 11 of the U.S.
Bankruptcy Code to facilitate a restructuring of the company's
debts. The case is In re Lyondell Chemical Company, et al.,
Bankr. S.D.N.Y. Lead Case No. 09-10023). Seventy-nine Lyondell
entities, including Equistar Chemicals, LP, Lyondell Chemical
Company, Millennium Chemicals Inc., and Wyatt Industries, Inc.
filed for Chapter 11. In May 2009, one of the cases was dismissed
-- Case No. 09-10068 -- because it is duplicative of Case No. 09-
10040 relating to Debtor Glidden Latin America Holdings.
The Hon. Robert E. Gerber presides over the case. Deryck A.
Palmer, Esq., at Cadwalader, Wickersham & Taft LLP, in New York,
serves as the Debtors' bankruptcy counsel. Evercore Partners
serves as financial advisors, and Alix Partners and its subsidiary
AP Services LLC, serves as restructuring advisors. AlixPartners'
Kevin M. McShea acts as the Debtors' Chief Restructuring Officer.
Clifford Chance LLP serves as restructuring advisors to the
European entities. Lyondell Chemical estimated that consolidated
assets total US$27.12 billion and debts total US$19.34 billion as
of the bankruptcy filing date.
Lyondell has obtained approximately US$8 billion in DIP financing
to fund continuing operations. The DIP financing includes two
credit agreements: a US$6.5 billion term loan, which comprises a
US$3.25 billion in new loans and a US$3.25 billion roll-up of
existing loans; and a US$1.57 billion asset-backed lending
facility.
LyondellBasell Industries AF S.C.A. and another affiliate were
voluntarily added to Lyondell Chemical's reorganization filing
under Chapter 11 on April 24, 2009, in order to seek protection
against claims by certain financial and U.S. trade creditors. On
May 8, 2009, LyondellBasell Industries added 13 non-operating
entities to Lyondell Chemical Company's reorganization filing
under Chapter 11 of the U.S. Bankruptcy Code. All of the entities
are U.S. companies and were added to the original Chapter 11
filing for administrative purposes.
Bankruptcy Creditors' Service, Inc., publishes Lyondell Bankruptcy
News. The newsletter tracks the Chapter 11 proceeding undertaken
by Lyondell Chemical Company and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
LYONDELL CHEMICAL: Tax Assessment Moved to State Court
------------------------------------------------------
Bill Rochelle at Bloomberg News reports that U.S. Bankruptcy Judge
Robert E. Gerber told Lyondell Chemical Co. to take its litigation
over a real estate tax assessment for a refinery in Houston to a
Texas state court. Judge Gerber said a Texas judge may be more
familiar with valuing refineries. He also said it was unrealistic
to expect he could conduct a valuation trial in two days.
According to the report, Judge Gerber noted that Lyondell
creditors have $20 billion in claims. The dispute over the
refinery assessment involves about $10 million in taxes.
About Lyondell Chemical
LyondellBasell Industries is one of the world's largest polymers,
petrochemicals and fuels companies. It is the global leader in
polyolefins technology, production and marketing; a pioneer in
propylene oxide and derivatives; and a significant producer of
fuels and refined products, including biofuels. Through research
and development, LyondellBasell develops innovative materials and
technologies that deliver exceptional customer value and products
that improve quality of life for people around the world.
Headquartered in The Netherlands, LyondellBasell --
http://www.lyondellbasell.com/-- is privately owned by Access
Industries.
Basell AF and Lyondell Chemical Company merged operations in 2007
to form LyondellBasell Industries, the world's third largest
independent chemical company. LyondellBasell became saddled with
debt as part of the US$12.7 billion merger. On January 6, 2009,
LyondellBasell Industries' U.S. operations and one of its European
holding companies -- Basell Germany Holdings GmbH -- filed
voluntary petitions to reorganize under Chapter 11 of the U.S.
Bankruptcy Code to facilitate a restructuring of the company's
debts. The case is In re Lyondell Chemical Company, et al.,
Bankr. S.D.N.Y. Lead Case No. 09-10023). Seventy-nine Lyondell
entities, including Equistar Chemicals, LP, Lyondell Chemical
Company, Millennium Chemicals Inc., and Wyatt Industries, Inc.
filed for Chapter 11. In May 2009, one of the cases was dismissed
-- Case No. 09-10068 -- because it is duplicative of Case No. 09-
10040 relating to Debtor Glidden Latin America Holdings.
The Hon. Robert E. Gerber presides over the case. Deryck A.
Palmer, Esq., at Cadwalader, Wickersham & Taft LLP, in New York,
serves as the Debtors' bankruptcy counsel. Evercore Partners
serves as financial advisors, and Alix Partners and its subsidiary
AP Services LLC, serves as restructuring advisors. AlixPartners'
Kevin M. McShea acts as the Debtors' Chief Restructuring Officer.
Clifford Chance LLP serves as restructuring advisors to the
European entities. Lyondell Chemical estimated that consolidated
assets total US$27.12 billion and debts total US$19.34 billion as
of the bankruptcy filing date.
Lyondell has obtained approximately US$8 billion in DIP financing
to fund continuing operations. The DIP financing includes two
credit agreements: a US$6.5 billion term loan, which comprises a
US$3.25 billion in new loans and a US$3.25 billion roll-up of
existing loans; and a US$1.57 billion asset-backed lending
facility.
LyondellBasell Industries AF S.C.A. and another affiliate were
voluntarily added to Lyondell Chemical's reorganization filing
under Chapter 11 on April 24, 2009, in order to seek protection
against claims by certain financial and U.S. trade creditors. On
May 8, 2009, LyondellBasell Industries added 13 non-operating
entities to Lyondell Chemical Company's reorganization filing
under Chapter 11 of the U.S. Bankruptcy Code. All of the entities
are U.S. companies and were added to the original Chapter 11
filing for administrative purposes.
Bankruptcy Creditors' Service, Inc., publishes Lyondell Bankruptcy
News. The newsletter tracks the Chapter 11 proceeding undertaken
by Lyondell Chemical Company and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
MAGIC BRANDS: Signs Agreement for Assets Sale to Tavistock
----------------------------------------------------------
Magic Brands, LLC, parent of the Fuddruckers and Koo Koo Roo
restaurant brands, has signed an Asset Purchase Agreement with
Tavistock Group to sell substantially all of its assets in a
$40 million going concern transaction.
As required under the purchase agreement and to facilitate the
sale, Magic Brands, LLC, and certain of its affiliates have
voluntarily filed petitions under Chapter 11 of the U.S.
Bankruptcy Code. None of the 135 franchisee-owned Fuddruckers
restaurants are included in the filing.
The Tavistock purchase is subject to court approval and Magic
Brands will file a motion to establish bidding procedures to allow
other qualified bidders to submit higher and better offers to
purchase the assets. Magic expects the sale process to be
completed within 60 to 90 days.
"During the course of the transaction, Fuddruckers and Koo Koo Roo
guests will see no difference in the quality dining experience
they have come to expect in our restaurants," said CEO Peter
Large. "Our daily operations will continue as usual in more than
200 restaurants across the country. Employees will be paid
without interruption.
"This transaction with Tavistock Group allows Fuddruckers to
restructure our finances to provide the highest degree of
flexibility to fund our remodel and expansion program," Mr. Large
said. "As demonstrated by the level of interest from potential
bidders over the past several weeks, Fuddruckers is a strong brand
with a national reputation for quality gourmet burgers in a
family-friendly environment."
As part of Fuddruckers plan to concentrate resources in operations
with the strongest potential for growth, the company will use the
Chapter 11 process to terminate certain leases and will close 24
corporate-owned Fuddruckers restaurants by April 30, 2010.
"We regret that some team members have lost their positions as a
result of the restaurant closures, but these difficult actions are
essential to the long-term strength of Fuddruckers," said Mr.
Large. "By shedding burdensome leases under the protection of
Chapter 11, Fuddruckers will regain the financial stability and
flexibility it needs to pursue strategic growth initiatives that
will benefit our brand, our franchisees and, most importantly, our
guests."
More than 200 Fuddruckers restaurant locations remain open and
their daily operations will continue as usual. Gift cards
purchased at closed restaurants will be honored at all Fuddruckers
and Koo Koo Roo locations.
Wells Fargo Capital Finance, Inc., the company's existing senior
lender, has committed to provide debtor-in-possession financing in
the amount of $14 million to facilitate the sale and
restructuring.
FocalPoint Securities, LLC serves as investment banker to Magic
Brands and Goulston & Storrs serves as lead bankruptcy counsel.
For further information regarding the sale transaction and
restructuring process, please contact the Company's information
line at 877-340-2764 or visit www.fuddruckersrestructures.com.
Fuddruckers -- http://www.fuddruckers.com/-- was founded in 1980
in San Antonio, Texas, with the goal of serving hamburgers that
are cooked to order and made with fresh ingredients. Magic
Brands, based in Austin, Texas, purchased the chain in 1998 and
has sought to broaden its appeal by expanding its menu.
MAGNA ENTERTAINMENT: Equity Holders Want Full Valuation
-------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware has
commenced hearings to consider confirmation of the Chapter 11 plan
of Magna Entertainment Corp.
The State of Maryland and equity holders of have filed objections
to the Plan, as amended. The Plan proposes to transfer the
Debtors' Maryland assets, including Preakness Stakes, Pimlico Race
Course and Laurel Park to MI Development US Financing Inc.
The State of Maryland is arguing that the Plan provides no
mechanism for the State to exercise its statutory right of first
refusal as to transfer of the Preakness Stakes. The State,
however, is discussing a resolution with MID US Financing and
certain Debtors that will resolve the objection.
The non-insider equity holders of Magna Entertainment Corp.
relates that the Plan includes a purported settlement between the
unsecured creditors and MID. MID, according to the equity
holders, is a clear insider of the Debtor and the entity that
controls the Debtor's business, the equity holders point out. The
equity holders add that the Plan terms give creditors less than
half of what they are owed, and then turns the ownership and
management of the Debtor over to the very insider and majority
shareholder. The equity holders also asked the Court to allow an
independent party time to perform a full valuation of the Debtor
prior to consideration of any plan.
A full-text copy of the Amended Plan is available for free at:
http://bankrupt.com/misc/MagnaEntertainment_BlacklinedPLan.pdf
The Debtors are represented by:
Mark D. Collins, Esq.
L. Katherine Good, Esq.
Drew G. Sloan, Esq.
Tyler D. Semmelman, Esq.
Richards, Layton & Finger, P.A.
One Rodney Square
920 North King Street
Wilmington, DE 19801
Tel: (302) 651-7700
Fax: (302) 651-7701
Marcia L. Goldstein, Esq.
Brian S. Rosen, Esq.
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, NY 10153
Tel: (212) 310-8000
Fax: (212) 310-8007
About Magna Entertainment
Based in Aurora, Ontario, Magna Entertainment Corp. is North
America's largest owner and operator of horse racetracks based on
revenue. The Company develops, owns and operates horse racetracks
and related pari-mutuel wagering operations, including off-track
betting facilities. MEC also develops, owns and operates casinos
in conjunction with its racetracks where permitted by law.
MEC owns and operates AmTote International, Inc., a provider of
totalisator services to the pari-mutuel industry, XpressBet(R), a
national Internet and Tel account wagering system, as well
as MagnaBet(TM) internationally. Pursuant to joint ventures, MEC
has a 50% interest in HorseRacing TV(R), a 24-hour horse racing
television network, and TrackNet Media Group LLC, a content
management company formed for distribution of the full breadth of
MEC's horse racing content.
Following its failure to meet obligations to lenders led by PNC
Bank, National Association, and Wells Fargo Bank, National
Association, and controlling shareholder MI Developments Inc.'s
decision not to provide further financial backing, Magna
Entertainment Corp. and 24 affiliates filed for Chapter 11 on
March 5, 2009 (Bankr. D. Del. Lead Case No. 09-10720).
Marcia L. Goldstein, Esq., and Brian S. Rosen, Esq., at Weil,
Gotshal & Manges LLP, have been engaged as bankruptcy counsel.
Mark D. Collins, Esq., L. Katherine Good, Esq., and Maris J.
Finnegan, Esq., at Richards, Layton & Finger, P.A., are the
Debtors' local counsel. Miller Buckfire & Co. LLC is the Debtors'
investment banker and financial advisor. Kurtzman Carson
Consultants LLC is the claims and noticing agent for the Debtors.
Magna Entertainment Corp. had total assets of $1.054 billion and
total liabilities of $947.3 million based on unaudited
consolidated financial statements as of December 31, 2008.
MAGNA ENTERTAINMENT: Pulls Out of Caruso Retail Venture Project
---------------------------------------------------------------
A.D. Pruitt at Dow Jones Newswires reports that a unit of Magna
Entertainment earlier this month notified real estate investor
Rick Caruso that it was backing out of a deal to build a roughly
800,000 square-foot retail development near its Santa Anita Park
thoroughbred horse racing track in Arcadia, California. Dow Jones
says an entity controlled by Mr. Caruso has protested the move in
a court filing.
According to Dow Jones, Mr. Caruso's joint venture with Magna
proposed The Shops at Santa Anita, a high-end and luxury retail
center in 2005 with a planned investment more than $500 million.
The report says the project was initially slated to be completed
by 2011, but was put on hold when Magna filed for bankruptcy. The
ground hasn't been broken yet on the development site.
Dow Jones relates that Mr. Caruso said in an interview that he
remains optimistic that the project can be salvaged. "We're in
discussions and negotiations," he said, according to Dow Jones.
"I'm confident we're going to work something out." Mr. Caruso is
the owner and developer of The Grove in Los Angeles and The
American at Brand in Glendale.
A representative from Magna Entertainment could not be reached for
comment, the report says.
About Magna Entertainment
Based in Aurora, Ontario, Magna Entertainment Corp. is North
America's largest owner and operator of horse racetracks based on
revenue. The Company develops, owns and operates horse racetracks
and related pari-mutuel wagering operations, including off-track
betting facilities. MEC also develops, owns and operates casinos
in conjunction with its racetracks where permitted by law.
MEC owns and operates AmTote International, Inc., a provider of
totalisator services to the pari-mutuel industry, XpressBet(R), a
national Internet and telephone account wagering system, as well
as MagnaBet(TM) internationally. Pursuant to joint ventures, MEC
has a 50% interest in HorseRacing TV(R), a 24-hour horse racing
television network, and TrackNet Media Group LLC, a content
management company formed for distribution of the full breadth of
MEC's horse racing content.
Following its failure to meet obligations to lenders led by PNC
Bank, National Association, and Wells Fargo Bank, National
Association, and controlling shareholder MI Developments Inc.'s
decision not to provide further financial backing, Magna
Entertainment Corp. and 24 affiliates filed for Chapter 11 on
March 5, 2009 (Bankr. D. Del. Lead Case No. 09-10720).
Marcia L. Goldstein, Esq., and Brian S. Rosen, Esq., at Weil,
Gotshal & Manges LLP, have been engaged as bankruptcy counsel.
Mark D. Collins, Esq., L. Katherine Good, Esq., and Maris J.
Finnegan, Esq., at Richards, Layton & Finger, P.A., are the
Debtors' local counsel. Miller Buckfire & Co. LLC is the Debtors'
investment banker and financial advisor. Kurtzman Carson
Consultants LLC is the claims and noticing agent for the Debtors.
Magna Entertainment Corp. had total assets of $1.054 billion and
total liabilities of $947.3 million based on unaudited
consolidated financial statements as of December 31, 2008.
MANCHESTER JBJ: Case Summary & 2 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Manchester JBJ J.V.
P.O. Box 331822
Murfreesboro, TN 37133-1822
Bankruptcy Case No.: 10-04140
Chapter 11 Petition Date: April 19, 2010
Court: U.S. Bankruptcy Court
Middle District of Tennessee (Nashville)
Judge: Marian F. Harrison
Debtor's Counsel: Paul E. Jennings, Esq.
Paul E. Jennings Law Offices, P.C.
805 South Church Street Suite 3
Murfreesboro, TN 37130
Tel: (615) 895-7200
Fax: (615) 895-7294
E-mail: paulejennings@bellsouth.net
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
A copy of the Company's list of 2 largest unsecured creditors
filed together with the petition is available for free at
http://bankrupt.com/misc/tnmb10-04140.pdf
The petition was signed by Clair D. Vanderschaaf, managing member.
MATERA RIDGE: Files Schedules of Assets and Liabilities
-------------------------------------------------------
Matera Ridge, LLC, filed with the U.S. Bankruptcy Court for the
District of Nevada its schedules of assets and liabilities,
disclosing:
Name of Schedule Assets Liabilities
---------------- ----------- -----------
A. Real Property $13,000,000
B. Personal Property $585
C. Property Claimed as
Exempt
D. Creditors Holding
Secured Claims $20,400,491
E. Creditors Holding
Unsecured Priority
Claims $260
F. Creditors Holding
Unsecured Non-priority
Claims $2,004,084
----------- -----------
TOTAL $13,000,585 $22,404,835
Reno, Nevada-based Matera Ridge, LLC, filed for Chapter 11
bankruptcy protection on March 10, 2010 (Bankr. D. Nev. Case No.
10-50749). Stephen R. Harris, Esq., at Belding, Harris & Petroni,
LTD, assists the Company in its restructuring effort. The Company
listed $10,000,001 to $50,000,000 in assets and $10,000,001 to
$50,000,000 in liabilities.
MCGINN SMITH: SEC Files Action to Halt Fraudulent Scheme
--------------------------------------------------------
The Securities and Exchange Commission filed an emergency
enforcement action to halt a fraudulent scheme being orchestrated
by two co-owners of an Albany, N.Y.-based firm who misused
investor money to fund their struggling business operations and
meet ever-increasing liquidity needs. The SEC has obtained a
court order to freeze their assets.
According to the SEC's complaint, filed in U.S. District Court for
the Northern District of New York, Timothy M. McGinn and David L.
Smith -- through their firm McGinn, Smith & Co., Inc., and
affiliated entities -- raised approximately $120 million from
investors in more than 25 debt offerings that were not registered
with the SEC under the securities laws. They misrepresented that
the investments would generate sufficient income to support the
promoted interest rates and the return of principal at the end of
the notes' terms.
The SEC alleges that McGinn and Smith knew that it would never be
possible to repay investors their principal, let alone the
quarterly interest payments promised. McGinn and Smith instead
misused offering proceeds to support their financially troubled or
bankrupt entities, to make payroll for MS & Co., and even for
their own personal activities such as procuring strippers for a
"sexually themed" cruise. Although the full extent of the fraud
is not yet known, it appears that investors are currently owed at
least $80 million.
"McGinn and Smith deceived investors about the true purpose behind
these offerings," said Andrew M. Calamari, Associate Director of
the SEC's New York Regional Office. "They falsely promised
investors a profitable payday but secretly siphoned off money for
their own payroll."
According to the SEC's complaint, the debt offerings have been
sold to hundreds of investors through four funds and at least 18
trusts created by MS & Co. affiliates. They made a host of
representations about the extent of due diligence they had
performed, among other things. Contrary to their representations
to investors, McGinn and Smith used much of the money raised in
these offerings to make prohibited investments in their other
businesses or make unsecured loans to financially support them.
They also misused investor funds to pay exorbitant commission and
transaction fees to their affiliated entities and make interest
payments to investors in the other entities.
The Commission would like to thank the Financial Industry
Regulatory Authority for its assistance in this matter. The SEC's
investigation is continuing.
MERIT MINING: Signs Subscription Agreement with Huakan Investment
-----------------------------------------------------------------
In connection with its Memorandum of Understanding with Tianjin
Huakan Group Co. Ltd., Merit Mining Corp. announced that it has
signed a Subscription Agreement with Hong Kong Huakan Investment
Co., Limited, a subsidiary of Tianjin, whereby Huakan will
subscribe for 27,955,223 common shares of Merit for aggregate
proceeds of $15,500,000, subject to due diligence, shareholder and
regulatory approval.
Under the terms of the Subscription Agreement, the Offering will
be completed in two tranches. The first tranche of $9,500,000,
priced at $0.50 per share, will be completed as soon as possible
but no later than May 31, 2010. The second tranche of $6,000,000,
priced at $0.67 per share, will be completed as soon as possible
after the closing of the first tranche, but in any event no later
than June 30, 2010.
The proceeds of the Offering will be used to:
(i) pay approximately $350,000 to unsecured creditors in
connection with Merit's proposal under the Bankruptcy and
Insolvency Act (Canada) (the "BIA Proposal");
(ii) repay all outstanding principal amounts and accrued
interest of approximately $4.39 million (assuming the first
tranche closes on May 31, 2010) in the aggregate to
extinguish debt owed to Wega Mining AS ("Wega") and Munday
Home Sales Ltd. ("Munday");
(iii) pay any and all accrued and unpaid interest in arrears of
approximately $442,000 (assuming the first tranche closes
on May 31, 2010) to the holders (the "Jory
Debentureholders") of debentures (the "Jory Debentures")
issued pursuant to the Trust Indenture dated July 21, 2008
between Merit and Computershare Trust Company of Canada;
(iv) to advance the Greenwood Gold project, located near
Greenwood, BC and the J&L project, located near Revelstoke,
BC; and
(v) for general corporate purposes in the ordinary course of
business.
"The Huakan investment will enable Merit to return to its vision
of becoming an intermediate sized mining company with its initial
focus in British Columbia. Merit's management looks forward to
working with Huakan's mine operating and technical staff in the
development of its projects", said Fred Sveinson, President and
CEO of Merit.
Jiang Chen, Chairman of the board of Huakan, said "The investment
in Merit by Huakan will be a win-win situation. Huakan intends to
be a responsible and long-term investor. I believe that Merit
will have a great future".
In connection with the execution of the Subscription Agreement,
Merit has appointed Mr. Deli Tian to its board of directors,
subject to approval of the TSX Venture Exchange ("TSXV"). Upon
closing of the first tranche, the parties have agreed, subject to
TSXV approval, to appoint a second nominee of Huakan to Merit's
board of directors and a designate of Huakan as Chief Financial
Officer. Following closing of the first tranche, Merit will also
call a shareholders' meeting to facilitate the appointment of a
third nominee of Huakan to its board of directors.
The closing of the first and second tranches will be conditional
on customary terms and conditions, including certain approvals of
the People's Republic of China, as well as conditions that the
amounts owed under the BIA Proposal and to Wega and Munday are
extinguished, and the interest in arrears owed to the Jory
Debentureholders is paid. In addition, it is a condition of
closing that the Jory Debentureholders approve an extraordinary
resolution:
(i) to extend the term of the Jory debentures by three years
to July 21, 2014;
(ii) to modify the conversion terms of the Jory Debentures so
that they are convertible on the fourth and fifth year of
the term as they are in the third year ($20 per share);
(iii) to provide for no conversion in the sixth and final year;
and
(iv) to modify the redemption terms of the Jory Debentures to
delete the 5% Redemption Premium set out in the Trust
Indenture so that the Jory Debentures may be redeemed
upon payment of the principal, together with accrued and
unpaid interest, with no payment of premium.
Subject to regulatory approval and registration exemptions, Merit
will pay a finder's fee of 3% (payable as to 2% in cash and 1% in
shares) and 5% in warrants, exercisable at the applicable
subscription price of the subscription amount.
METRO-GOLDWYN-MAYER: Filming of New Bond Movie Halted Pending Sale
------------------------------------------------------------------
According to The New York Times, the producers of the 23rd James
Bond film are suspending movie production while they awaited the
possible auction of Metro-Goldwyn-Mayer, which releases James Bond
movies. According to the NY Times, citing a statement reported by
Reuters, the producers -- Michael Wilson and Barbara Broccoli --
said, "Due to the continuing uncertainty surrounding the future of
MGM and the failure to close a sale of the studio, we have
suspended development on Bond 23 indefinitely."
As reported by the Troubled Company Reporter on April 12, 2010,
Bankruptcy Law360 said brothers Tony and Sir Ridley Scott have
expressed an interest in running MGM. According to Bankruptcy
Law360, the entertainment business duo have said they would be
interested in running the studio, possibly pitting them against
bidders including Time
Warner Inc.
As reported by the Troubled Company Reporter on April 1, 2010, Dow
Jones Newswires' Nat Worden said MGM creditors agreed to extend
the studio's debt deadline as it explores strategic options, like
a sale of the company. Dow Jones said the extension -- the fourth
such move in the past few months -- allows MGM to put off payments
on its nearly $4 billion debt load until May 14, according to
Susie Arons, an outside spokeswoman for company.
As widely reported, creditors have been disappointed with the bids
that came in for MGM. Bloomberg, citing an unidentified person,
relates that Time Warner Inc. offered $1.5 billion. Billionaire
Len Blavatnik's Access Industries proposed to reduce MGM's debt
and provide cash for film production. Lions Gate Entertainment
Corp. dropped out of the bidding. Liberty Media Corp. and Elliott
Management Corp. are also out.
MGM put itself up for sale last year after failing to make
payments on $3.7 billion in debt.
The Wall Street Journal reported early in March that MGM is
readying a backup plan should bids for its assets come in too low.
Sources told the Journal, MGM creditors are increasingly willing
to assume control over the studio. The sources said that under
that scenario, MGM would likely pursue a "standalone" plan in
which lenders would convert their debt to equity.
MGM has hired investment bank Moelis & Company and the law firm
Skadden, Arps, Slate, Meagher & Flom. In August, it hired the
restructuring expert Stephen F. Cooper to help lead the company.
About Metro-Goldwyn-Mayer
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.
MGM MIRAGE: Closes Private Offering of $1.15-Bil. in 4.25% Notes
----------------------------------------------------------------
MGM MIRAGE has closed the private offering of $1.15 billion in
aggregate principal amount of its 4.25% convertible senior notes
due 2015. Initial purchasers exercised their option to purchase
$150 million in aggregate principal amount of additional notes to
cover over-allotments, which is included in the $1.15 billion of
gross proceeds. The Company received approximately $1.12 billion
in net proceeds from the offering. Net proceeds were used to repay
a portion of the Company's outstanding revolving indebtedness
under its senior credit facility.
"The closing of this transaction is another milestone for our
Company and its shareholders. We received strong investor demand
and the transaction exceeded our expectations. We believe this
capital raise was achieved to the benefit of all of our
stakeholders," said Jim Murren, Chairman and Chief Executive
Officer of MGM MIRAGE.
"We continue to improve the maturity profile of our Company by
accessing the capital markets opportunistically and at attractive
yields," said Dan D'Arrigo, Executive Vice President and Chief
Financial Officer of MGM MIRAGE.
The notes are general unsecured senior obligations of the Company,
guaranteed by substantially all of the Company's wholly-owned
domestic subsidiaries, which also guarantee the Company's other
senior indebtedness, and equal in right of payment with, or senior
to, all existing or future unsecured indebtedness of the Company
and each guarantor. The notes will pay interest semi-annually at
a rate of 4.25% per annum and mature on April 15, 2015. The notes
are convertible at an initial conversion rate of approximately
53.83 shares of the Company's common stock per $1,000 principal
amount of the notes, representing an initial conversion price of
approximately $18.58 per share of the Company's common stock and a
conversion premium of approximately 27.5% based on the last
reported sale price per share of the Company's common stock on the
New York Stock Exchange on April 15, 2010 of $14.57 per share.
The initial conversion rate is subject to adjustment under certain
circumstances. The notes are convertible into shares of the
Company's common stock at any time prior to the close of business
on the third scheduled trading day immediately preceding the
maturity date of the notes.
In connection with the offering, the Company has entered into
capped call transactions with several of the initial purchasers of
the notes or their respective affiliates. The capped call
transactions are expected generally to reduce the potential
dilution to the Company's common stock upon any conversion of
notes in the event that the market value per share of the
Company's common stock, as measured under the terms of the capped
call transactions, is greater than the strike price of the capped
call transactions (which corresponds to the initial conversion
price of the notes and is subject to certain adjustments
substantially similar to those contained in the notes). The capped
call transactions have a cap price equal to approximately $21.86
(approximately 50% above the last reported sale price of the
Company's common stock on the New York Stock Exchange on April 15,
2010). In conjunction with this capped call transaction, the
Company made a cap call payment to these initial purchasers of the
notes or their respective affiliates.
The Company has been advised that, in connection with hedging the
capped call transactions, the counterparties or their affiliates
have entered into various derivative transactions with respect to
the Company's common stock and may, from time to time, enter into
or unwind various derivatives and/or purchase or sell the
Company's common stock in secondary market transactions. These
activities could increase (or reduce the size of any decrease in)
the price of the Company's common stock and could also cause or
avoid an increase or a decrease in the price of the Company's
common stock following any conversion of notes and during the
period prior to the maturity date.
The notes, and any shares of the Company's common stock issuable
upon conversion of the notes, have not been registered under the
Securities Act of 1933, as amended, or any state securities law
and may not be offered or sold in the United States or to any U.S.
persons absent registration under the Securities Act, or pursuant
to an applicable exemption from, or in a transaction not subject
to, the registration requirements of the Securities Act and
applicable state securities laws. The notes, and any shares of the
Company's common stock issuable upon conversion of the notes, will
be offered only to "qualified institutional buyers" under Rule
144A of the Securities Act.
About MGM MIRAGE
Headquartered in Las Vegas, Nevada, MGM MIRAGE (NYSE: MGM) --
http://www.mgmmirage.com/-- owns and operates 16 properties
located in Nevada, Mississippi and Michigan, and has 50%
investments in four other properties in Nevada, New Jersey,
Illinois and Macau. CityCenter, an urban metropolis on the Las
Vegas Strip scheduled to open in late 2009, is a joint venture
between MGM MIRAGE and Infinity World Development Corp, a
subsidiary of Dubai World. MGM MIRAGE Hospitality has entered
into management agreements for future casino and non-casino
resorts throughout the world.
The Company reported $22.51 billion in total assets, $2.38 billion
in total current liabilities, $3.03 billion in deferred income
taxes, $12.97 billion in long term debt, and $256.83 million other
long term obligation, resulting to a $3.87 billion stockholders'
equity as of Dec. 31, 2009. At September 30, 2009, MGM MIRAGE had
stockholders' equity of $4.29 billion.
* * *
As reported by the Troubled Company Reporter on March 22, 2010,
Moody's Investors Service affirmed MGM MIRAGE's ratings, including
its Caa1 Corporate Family Rating and raised the company's
Speculative Grade Liquidity rating to SGL-3 from SGL-4. The
rating outlook remains stable.
As reported by the TCR on March 11, 2010, Standard & Poor's
Ratings Services affirmed all of its existing ratings on MGM
MIRAGE, including the 'CCC+' corporate credit rating. The rating
outlook is developing. "The 'CCC+ corporate credit rating
reflects MGM MIRAGE's significant debt burden, S&P's expectation
for continued declines in cash flow generation in 2010, and the
company's tight liquidity position," said Standard & Poor's credit
analyst Ben Bubeck.
MIRAMAX FILMS: Disney Finalizing Sale to Weinstein
--------------------------------------------------
The Wall Street Journal's Ethan Smith and Lauren A.E. Schuker,
citing people familiar with the matter, report that Weinstein Co.
over the weekend moved closer to acquiring Miramax Films from Walt
Disney Co. Sources told the Journal that lawyers for both sides
worked through the weekend to try to finalize a deal. However,
the people cautioned that many details remain to be worked out and
the talks could fall apart, the Journal says.
"Signaling an edge for the Weinsteins' roughly $600 million bid
over two other bidders, Disney late last week entered an exclusive
window of negotiation with Weinstein Co. That window was expected
to last until some time this week, with a resolution possible by
Tuesday," according to the Journal. The Weinstein bid is backed
in large part by Los Angeles billionaire Ron Burkle, according to
the report.
As reported by the Troubled Company Reporter on March 3, 2010, The
Deal's Richard Morgan said Lions Gate Entertainment Corp. was
tipped to acquire Miramax for between $300 million and $500
million.
Brothers Bob and Harvey Weinstein founded Miramax in 1979 and
named it for their parents, Max and Miriam Weinstein. The
Weinsteins sold the film outfit to Disney in 1993 and left in 2005
to start their current film studio.
About Miramax
Miramax Films -- http://www.miramax.com/-- is the art-
house/independent film division of The Walt Disney Company, and
acts as both producer and distributor for its own films or foreign
films. Disney acquired Miramax in 1993 from the Weinstein
brothers, who continued to oversee the outfit until 2005, when
they left to found the Weinstein Company.
Citing The New York Times and The Wall Street Journal, the
Troubled Company Reporter on February 2, 2010, reported that Walt
Disney has been seeking buyers for its Miramax film unit. Brooks
Barnes at The New York Times, citing a mergers and acquisitions
expert with knowledge of the process, said Disney has attracted
seven to 10 interested bidders. According to New York Times'
source, the initial discussions indicate a price of more than $700
million for the Miramax name and its 700-film library.
The Wall Street Journal's Ethan Smith said Disney has been
gradually dismantling Miramax's filmmaking capacity for some time,
laying off staff and executives. In January, Disney closed
Miramax's offices and dismissed the majority of its remaining
personnel.
MORTGAGEBROKERS.COM: Dec. 31 Balance Sheet Upside-Down by $588,000
------------------------------------------------------------------
MorgageBrokers.com Holdings, Inc., filed on April 19, 2010, its
annual report on Form 10-K for the year ended December 31, 2009.
The Company's balance sheet as of December 31, 2009, showed
$2,143,870 in assets and $2,732,753 of debts, for a stockholders'
deficit of $588,883.
The Company reported net income of $863,679 on $16,851,224 of
revenue for 2009, compared with a net loss of $519,352 on
$15,802,861 of revenue for 2008.
McGovern, Hurley, Cunningham, LLP, in Toronto, expressed
substantial doubt about the Company's ability to continue as a
going concern. The independent auditors noted that of the
Company's operating losses, negative working capital, and total
capital deficiency.
A full-text copy of the annual report is available for free at:
http://researcharchives.com/t/s?6075
Based in City of Vaughan, Ontario, MortgageBrokers.com Holdings,
Inc. provides mortgage brokerage services in the Canadian
provincial markets of Newfoundland, Nova Scotia, New Brunswick,
Prince Edward Island, Ontario, Saskatchewan and Alberta.
NEWLAND INTERNATIONAL: Fitch Puts 'B+' Rating on $200 Mil. Notes
----------------------------------------------------------------
Fitch Ratings has placed the 'B+' rating of Newland International
Properties, Corp.'s $220 million senior secured notes on Rating
Watch Negative due to a recently disclosed construction cost
overrun for the Trump Ocean Club International Hotel & Tower
project, along with a delay in the delivery of finished units to
buyers, and continued concern over the willingness and ability of
the end-buyer to take possession of units upon delivery. Newland
is developing the TOC, a multi-use tower located on the Punta
Pacifica Peninsula in Panama City, Panama.
Newland recently disclosed that the project is facing a
$26.9 million construction cost overrun attributed to the
completion of common area finishes, furniture fixtures and
equipment and operating supplies and equipment costs. As
stipulated in the transaction documents, the developer is
obligated to replenish the construction account by any shortfall
amount within 10 business days of the receipt of the engineer's
evaluation report. This report is expected to be received by the
end of April, thus giving the developers until approximately May
14th to comply with the replenishment obligation.
Newland has stated that the developers are working to secure this
funding. However, no clear plan has yet been provided to
investors, and failure to replenish this account in a timely
manner could result in a technical default on the bonds.
Currently, it is expected that there will be sufficient funds in
the collection and debt service reserve accounts to make the
required interest payments this year. In the meantime,
construction is on-going and there remains approximately
$41 million in the construction escrow account, mitigating the
risk of construction ceasing in the near term due to the
shortfall. Fitch's rating does not address the accelerated
payments that would be due if a technical default were declared;
rather, the ratings address the likelihood of timely interest and
principal payments according to the original schedule.
In addition to the cost overrun, Newland also announced that the
delivery of units will be delayed until the end of the year and
that the hotel grand opening will be moved to early 2011.
Although, this delay is relatively minor - from August to
December, it raises the concern that there could be further
construction delays in the future that could result in additional
carrying costs for the project and increase the possibility of
more buyers giving back their units because of the delays.
Along with the cost overrun and delivery delay, Fitch has
previously noted a concern stemming from the constraints in the
capital markets that were expected to increase the difficulty of
securing financing for real estate assets, especially given the
target market of the project, which is focused on foreign buyers
that do not intend to make the TOC their primary residence.
Additionally, Fitch believes that overall property prices within
this segment have decreased, which can be seen by the approximate
25% decline in sales prices reported by the TOC management for new
unit sales at the project. While to date, there have been only
six unit defaults and Newland was able to keep all deposits
attributed to those units, this number could increase as the final
delivery of units approaches, especially given that property
prices have declined and mortgage financing remains constrained.
Sales have continued at the TOC and the project is approximately
84% sold-out by unit count. Downpayments for units are averaging
approximately 32% and are non-refundable. Although prices have
declined approximately 25%, there is still an incentive for buyers
to take possession of their units upon delivery.
OCEAN SMART: Posts Net Loss of $323,039 in Q2 Ended February 28
---------------------------------------------------------------
Ocean Smart, Inc., filed its quarterly report on Form 10-Q,
showing a net loss of $323,039 on $654,942 of revenue for the
three months ended February 28, 2010, compared with a net loss of
$728,705 on $432,977 of revenue for the same period of 2008.
The Company's balance sheet as of February 28, 2010, showed
$5,068,131 in assets, $2,499,010 of debts, and $2,569,121 of
stockholders' equity.
The Company has suffered operating losses since inception. As of
February 28, 2010, the Company had a cash balance of roughly
$24,600 and an accumulated deficit of roughly $25,900,000
including a net loss of roughly $589,000 for the first six months
of its 2010 fiscal year. "Until our operations are able to
demonstrate and maintain positive cash flows, we may require
additional working capital to fund our ongoing operations and
execute our business strategy of expanding our operations. In
fact, based on our current estimates of future sales and capital
costs of expanding our farms in order to increase future crop
yields, we will require additional financings to continue expand
our operations. Based on these factors, there is substantial
doubt about our ability to continue as a going concern."
A full-text copy of the annual report is available for free at:
http://researcharchives.com/t/s?6076
Based in Gaithersburg, Maryland, Ocean Smart, Inc. (OTC BB: OCSM)
through its subsidiary, Island Scallops Ltd., engages in farming,
processing, and marketing marine species, such as scallops and
sablefish. The Company's primary product is farmed 'Qualicum
Beach Scallop' for sale throughout North America. The Company was
formerly known as Edgewater Foods International, Inc. and changed
its name to Ocean Smart, Inc., in 2009.
PACE UNIVERSITY: Moody's Affirms 'Ba1' Rating on Bonds
------------------------------------------------------
Moody's has affirmed its Ba1 rating on Pace University's bonds
issued through the Dormitory Authority of the State of New York.
The University had $125 million of rated debt in FY 2009. The
outlook remains negative. The University's thin unrestricted
liquidity and significant reliance on drawdown note program
throughout the year for seasonal cash flow remain chief credit
concerns. The negative outlook could be lifted in the next 12-18
months as management process improvements offer the potential to
help prevent future missteps in enrollment and financial aid
management as well as improve operating performance, liquidity and
student market positioning.
Legal Security: Loan payments are a general obligation of the
University secured by a security interest in Pledged Revenues
(including tuition and fees) equal to maximum annual debt service.
The University's obligations to the Authority under the Loan
Agreement are additionally secured by a mortgage on certain
property, which is not initially pledged to bondholders unless an
event of default occurs and the bond insurer requests that the
Authority assign the mortgage to the Trustee.
The debt service reserve funds for the Series 1997, 2000, and 2005
bonds were funded with bond proceeds. The Series 2005 debt
service reserve fund was also funded with a surety bond issued by
MBIA. Pace was notified by the Trustee in July 2008 that it was
required to deposit collateral with the Trustee in the amount of
$2.769 million, replacing the Surety Bond over a five year period
as a result of the downgrade of MBIA.
Debt-Related Derivatives: Pace has entered into a floating to
fixed interest rate swap agreement to hedge the interest rate on
its Series 2005A bonds (current outstanding notional amount of
swap is $73.7 million as of April 8, 2010). As of April 8, 2010,
the market valuation of the swap was negative $5.2 million to
Pace. In December 2009, Pace restructured the swap with the
counterparty Merrill Lynch Capital Services (with an unconditional
guarantee provided by Merrill Lynch & Co.). Pursuant to a
reinsurance agreement between MBIA Insurance Corp and National
Public Finance Guarantee Corp, National reinsures the swap policy.
Prior to the restructuring Pace could have been required to post
collateral equal to the negative market valuation of the swap.
Post restructuring, Pace is not required to post collateral with
its Ba1 rating level unless the market valuation of the swap
exceeds negative $10 million (new threshold). If the value of the
swap exceeds $10 million, Pace is required to post the amount in
excess of $10 million only.
Challenges
* Pace's financial resource base provides thin coverage for debt
and large expense base, and net assets are significantly
depressed by $60 million post-retirement health benefit
liability. In FY 2009, the University experienced a 20%
endowment loss, and total financial resources declined to
$8.3 million ($67.9 million when adjusted for post-retirement
health liability). The University's liquidity is very thin for
its size with management reporting $38.7 million of unrestricted
cash and investments with monthly liquidity as of June 30, 2009.
This liquidity would cover 53 days of cash expenses. Further,
as of June 30, 2009, the University had $58 million of debt
outstanding under a Merrill Lynch drawdown note program (with an
additional $3 million authorized but not drawn as of June 30,
2009), so unrestricted monthly liquidity net of the debt would
have been negative. This thin liquidity and heavily reliance on
debt for seasonal cash flow needs is a key credit concern.
Pace's ability to reduce reliance on the note program and grow
its unrestricted cash would help strengthen its credit profile.
* Pace has experienced several notable missteps in enrollment and
financial aid management in recent years, and the University
continues to restructure reporting lines and reinforce senior
level management's oversight of these functions. During the
current FY 2010, the University overspent its financial aid
budget, with $112.9 million spent on financial aid compared to
an original budget of $88.4 million, including $15 million of
financial aid over-awarded to continuing students. In order to
compensate for this error, the University has continued to focus
significantly on expense containment during the current fiscal
year and plans to reduce aid for continuing students during FY
2011. In order to try to prevent future errors, the University
has created a financial aid committee and is in the process of
hiring a new budget director.
* Pace has multiple campuses, including one in downtown Manhattan
and several in Westchester County which creates operational
challenges. The University is in the process of reviewing and
"rationalizing" its real estate holdings and could consolidate
campuses in the future.
* In addition to $184.1 million of debt outstanding in FY 2009,
the University has a significant amount of other liabilities
including the $60 million post-retirement health benefit
liability and sizeable operating lease commitments
($21.5 million of operating lease payments in FY 2009, although
$13.5 million of the FY 2009 lease payments relate to student
housing which generates auxiliary revenue).
Strengths
* Management is committed to bringing operating performance back
into balance in the near term and growing liquidity. Pace's
operations improved significantly in FY 2008 and 2009, with
essentially breakeven performance in those years as calculated
by Moody's, compared to moderate-sized deficits in FY 2005
through 2007. The University is in the final year of a three
year "stability plan" which has focused extensively on operating
expense containment and improvement in margins. The
University's FY 2009 operating expenses are only 2% higher than
FY 2006 expenses. Areas of cost reduction have included
elimination of certain open staff positions, changes in employee
benefit programs, and lower interest expense as a result of
reduced volatility of the University's variable-rate bonds
during the past two years. (Series 2005A and B bonds were
issued R-FLOATS, which have a variable interest rate but cannot
be tendered back to the University). Moody's expect FY 2010
operating results to be comparable to FY 2009 based on
management's projections.
* Pace is a large comprehensive urban university ($280 million of
expenses in FY 2009) with a diverse array of undergraduate,
graduate, and professional programs, including schools of
nursing, business, and law. In fall 2009, the University
enrolled 10,297 full-time equivalent students, up 452 FTE during
the past two years (exclusive of discontinuation of certain
education programs, FTE growth during the past two years would
be closer to 800 FTE). In order to maintain a stable enrollment
base, Pace is focused on several recruitment initiatives,
including attracting community college transfers, increased
recruitment of international students, and possible future
growth of adult education programs.
* Pace relies on net tuition and auxiliary revenue streams for a
very high 88% of operating revenue, so continued growth of net
tuition revenue and careful management of financial aid budget
are critical credit factors. Since a significant dip in the
fall 2006 entering freshmen class (23% smaller than 2005), the
University has steadily grown enrollment and net tuition per
student. In FY 2009, the University generated $21,067 of net
tuition per student, a 14% increase over FY 2005. Moody's will
continue to closely monitor the University's tuition discount
and ability to meet budgeted financial aid targets. Moody's
expect that the recent tighter alignment between enrollment and
student aid budgeting divisions could help the University
project the anticipated financial aid budget with more accuracy
in the future.
Outlook
Moody's negative outlook reflects ongoing concerns about
enrollment management and financial aid oversight, given the
University's very heavy reliance on student charges, as well as
thin liquidity and dependence on debt for seasonal cash flow.
What Could Change the Rating -- UP
Significant growth of unrestricted liquidity coupled with further
strengthening of operating performance and student market position
What Could Change the Rating -- DOWN
Deterioration of unrestricted liquidity; sustained deterioration
in operating performance including flat or declining net tuition
revenue; additional debt absent growth of revenue available to pay
debt service
Key Indicators (Fall 2009 enrollment data and FY 2009 audited
financial data):
* Total Full-Time Equivalent Students: 10,297 FTE
* Freshmen Selectivity: 78%
* Freshmen Matriculation: 20%
* Total Financial Resources: $8.3 million
* Cash and Investments (excluding debt service reserve funds):
$132.9 million
* Direct Debt: $184.1 million
* Expendable Financial Resources-to-Debt: -0.4 times
* Adjusted Expendable Financial Resources-to-Debt (excluding
$60 million post-retirement health benefit liability): -0.2
times
* Monthly Liquidity (unrestricted cash and investments as of
June 30, 2009, which could be liquidated in one month):
$38.7 million
* Monthly Days Cash (unrestricted funds available within 1 month
divided by operating expenses excluding depreciation, divided by
365 days): 53 days
* Three-Year Average Operating Margin: -2.3%
* Three-Year Average Debt Service Coverage: 1.4 times
* Reliance on Student Charges: 88%
Rated Debt
* Series 1997, 2000, 2005A and 2005B bonds: Ba1 underlying rating,
insured by National Public Finance Guarantee Corporation
(National's current financial strength rating is Baa1 with a
developing outlook)
The rating assigned to Pace University was issued on Moody's
municipal rating scale. Moody's has announced its plans to
recalibrate all U.S. municipal ratings to its global scale and
therefore, upon implementation of the methodology published in
conjunction with this initiative, the rating will be recalibrated
to a global scale rating comparable to other credits with a
similar risk profile. Market participants should not view the
recalibration of municipal ratings as rating upgrades, but rather
as a recalibration of the ratings to a different rating scale.
This recalibration does not reflect an improvement in credit
quality or a change in Moody's credit opinion for rated municipal
debt issuers.
The last rating action was on October 20, 2008, when Pace
University's Ba1 rating and negative outlook were affirmed.
PACIFIC ENERGY: Plan Exclusivity Extended to July 2
---------------------------------------------------
Bill Rochelle at Bloomberg News reports that Pacific Energy
Resources Ltd. was granted an extension until July 2 of the
exclusive right to file a liquidating Chapter 11 plan. The
Company said it needed additional time to "assess the viability of
a liquidating plan."
According to the report, the Bankruptcy Court also gave the
official creditors' committee authority to file preference suits.
The Creditors Committee said there may be $30 million in
recoverable preferences. The Committee was also given permission
to settle preference claims.
The Debtor sold the bulk of the assets in Alaska and off the
California coast. In buying California assets in exchange for
debt, secured lenders gave up $12.8 million to be used in winding
up the business.
About Pacific Energy
Headquartered in Long Beach, California, Pacific Energy Resources
Ltd. -- http://www.pacenergy.com/-- engaged in the acquisition
and development of oil and gas properties, primarily in the United
States.
The Company and seven of its affiliates filed for
Chapter 11 protection on March 8, 2009 (Bankr. D. Del. Lead Case
No. 09-10785). Attorneys at Pachulski Stang Ziehl & Jones LLP,
represent the Debtors as counsel. The Debtors proposed Rutan &
Tucker LLP as special corporation and litigation counsel;
Schully, Roberts, Slattery & Marino, PLC, as special oil and gas
and transactional counsel; Devlin Jensen as special Canadian
counsel; Scott W. Winn, at Zolfo Cooper Management, LLC, as chief
restructuring officer; Lazard Freres & Co. LLC as investment
banker; and Albrecht & Associates, Inc., as agent for the Debtors
in the sale of their oil and gas properties. Omni Management
Group, LLC, is the claims, balloting, notice and administrative
agent for the Debtors. When the Debtors filed for protection from
their creditors, they listed between $100 million and
$500 million each in assets and debts.
PALM INC: Analysts Doubt About Ability to Get Premium Price
-----------------------------------------------------------
Cyrus Sanati at The New York Times reports that analysts voiced
doubts about the chances that Palm Inc. would be able to sell
itself at its current market price.
The NY Times relates that Tavis McCourt, an analyst at Morgan
Keegan, downgraded Palm on Monday, questioning its ability to get
a premium price for the company. According to the NY Times, Mr.
McCourt said he became concerned about Palm after it disclosed
Friday that Michael Abbott, Palm's senior vice president of
software and service, was resigning and that Palm was adopting a
key employee retention program. "These are not activities that
inspire confidence about Palm's ability or willingness to sell out
at a premium valuation in the near term," Mr. McCourt said in a
note to clients, according to the NY Times.
The NY Times also relates that analysts at the 451 Group, a
technology investment research firm, questioned whether Palm could
find a suitable merger partner. The NY Times reports 451 Group
analysts said they were concerned about Palm's ability to attract
a strong bid as its sales have languished.
As reported by the Troubled Company Reporter, Palm has tapped
Goldman Sachs Group Inc. and Frank Quattrone's Qatalyst Partners
to find a buyer. The TCR, citing Serena Saitto and Ari Levy at
Bloomberg News, said people familiar with the situation indicated
that Taiwan's HTC Corp. and China's Lenovo Group Ltd. have looked
at Palm and may make offers. According to Bloomberg, the sources
declined to be identified because a sale hasn't been announced.
Bloomberg said two of the people familiar with the matter have
indicated that Dell Inc. looked at Palm, though it decided against
an offer. Bloomberg said Jess Blackburn, a spokesman for Dell,
didn't respond to a call for comment.
Elevation Partners LP owns about 30% of Palm.
About Palm Inc.
Sunnyvale, California-based Palm, Inc. (NASDAQ: PALM) creates
intuitive and powerful mobile experiences that enable consumers
and businesses to connect to their information in more useful and
usable ways. Palm products are sold through select Internet,
retail, reseller and wireless operator channels, and at the Palm
online store at http://www.palm.com/store
At February 28, 2010, Palm had total assets of $1,007,237,000
against total current liabilities of $601,133,000; long-term debt
of $387,000,000; non-current deferred revenues of $19,001,000;
non-current tax liabilities of $6,286,000; Series B redeemable
convertible preferred stock of $272,961,000; and Series C
redeemable convertible preferred stock of $18,782,000; resulting
in stockholders' deficit of $297,926,000. At May 31, 2009,
stockholders' deficit was $406,568,000.
* * *
As reported by the Troubled Company Reporter on March 5, 2010,
Standard & Poor's Ratings Services affirmed its 'CCC+' corporate
credit rating and other ratings on Palm Inc. and revised the
ratings outlook to negative from positive. "The action reflects
the company's announcement that revenues in the February 2010
quarter and fiscal year ending May 2010 will be well below earlier
expectations," said Standard & Poor's credit analyst Bruce Hyman.
PENSON WORLDWIDE: Moody's Assigns 'B1' Corporate Family Rating
--------------------------------------------------------------
Moody's assigned a first-time Corporate Family rating of B1 to
Penson Worldwide, Inc. The rating outlook is stable. Moody's
also expects to assign a B1 rating to Penson's planned
$200 million Senior Second Lien Secured notes, pending review of
the final terms and conditions of the notes.
The B1 rating reflects Penson's solid franchise as an independent
provider of execution, clearing and settlement services for
correspondent brokers, mainly in the U.S. and Canada, as well as
the firm's planned capital structure. "Notwithstanding its solid
franchise, Penson's principal rating driver -- and its chief
credit challenge -- is the limited financial flexibility stemming
from high cash-flow leverage", said Alexander Yavorsky, a Vice
President at Moody's.
Pro-forma for its planned issuance of $200 million in senior
second lien secured notes, as well as an existing $60 million
convertible note and pro-forma for a $30 million seller note to
finance the planned acquisition of Broadridge's clearing business,
Penson's ratio of total financial debt to annualized EBITDA is
about 4.5x and its interest coverage is about 2.3x. Provided that
the acquisition is well executed, Moody's expectation is for
earnings to gradually improve in 2011 on the back of rising
interest rates and expense savings. However, this expectation is
already incorporated in the B1 rating and stable outlook.
Penson's main sources of revenue are clearing and commission fees
on trades executed by its end-clients (institutional and retail
investors) as well as spread interest income earned on client
balances (including margin loans.) Together with its stock
borrowing/lending business, these revenue streams accounted for
over 73% of Penson's overall net revenue in 2009.
An important credit strength for Penson is the limited risk
profile of its business model, the rating agency observed. Aside
from its limited proprietary trading business, Penson does not
have a natural need to take on market and unsecured credit risk.
Penson's balance sheet is principally driven by customer activity,
with offsetting assets and liabilities in the form of segregated
cash and margin loans and customer payables. Liquidity friction
arising from spikes in clearinghouse requirements or unusual net
buying activity by customers can further be mitigated by access to
bank lines and the stock lending channel. Overall, the liquidity
profile of its operating subsidiaries is good.
"The holding company, however, will have approximately $29 million
in annual cash interest costs", Yavorsky said, -- "a large cash
demand relative to its ability to receive dividends from
subsidiaries, particularly if operating conditions worsen."
Therefore, the B1 rating incorporates Moody's expectation that
Penson will maintain adequate cash reserves at the holding company
to ensure that it can meet its near-term obligations under stress.
Regarding what could change the rating, Yavorsky said, "steady and
profitable growth, combined with a conservative financial policy
could lead to an upgrade, as could sustainable improvements in
revenue diversification without increases in the firm's risk
profile." Conversely, a sustained increase in cash-flow leverage,
as measured by Debt/EBITDA, to above 6x would lead to a downgrade.
This is a first-time rating.
Penson Worldwide, Inc., is a leading provider of clearing services
headquartered in Dallas Texas. The firm is the largest
independent clearing broker in the US and Canada, with operations
also in Australia, the UK and Asia. At the end of 2009, Penson
had 290 correspondent broker clients (placing it at #3 among the
U.S. clearing firms by that measure) and $5 billion in customer
payables (a measure of client assets). Since its founding, Penson
has seen profit growth from market share gains and from the
secular growth in equity trading volumes in the U.S. Penson
reported $25.8 million of pre-tax earnings for 2009.
PERRY COUNTY: Affiliate Files Schedules of Assets and Liabilities
-----------------------------------------------------------------
Perry Uniontown Ventures I, LLC, a debtor-affiliate of Perry
County Associates, LLC, filed with the U.S. Bankruptcy Court for
the Southern District of Alabama its schedules of assets and
liabilities, disclosing:
Name of Schedule Assets Liabilities
---------------- ----------- -----------
A. Real Property $0
B. Personal Property $15,009,538
C. Property Claimed as
Exempt
D. Creditors Holding
Secured Claims $58,600,000
E. Creditors Holding
Unsecured Priority
Claims $0
F. Creditors Holding
Unsecured Non-priority
Claims $8,889,007
----------- -----------
TOTAL $15,009,538 $67,489,007
Atlanta, Georgia-based Perry County Associates, LLC, filed for
Chapter 11 bankruptcy protection on January 26, 2010 (Bankr. S.D.
Ala. Case No. 10-00277). Jeffery J. Hartley, Esq., at Helmsing,
Leach, Herlon, Newman & Rouse, assists the Company in its
restructuring effort. The Company listed $50,000,001 to
$100,000,000 in assets and $50,000,001 to $100,000,000 in
liabilities.
The Company's affiliate -- Perry Uniontown Ventures I, LLC --
filing a separate Chapter 11 bankruptcy petition.
PHILADELPHIA NEWSPAPERS: Court Extends Exclusivity Until April 30
-----------------------------------------------------------------
Christopher K. Hepp at The Philadelphia Inquirer reports that
Chief Bankruptcy Judge Stephen Raslavich on Tuesday extended until
April 30 the period during which only Philadelphia Newspapers
L.L.C., can file a plan of reorganization.
According to Bankruptcy Law360, unsecured creditors have pitched a
fit over Philadelphia Newspapers' bid to extend yet again its
exclusivity period for filing a reorganization plan, complaining
that the debtors have dragged their feet with "peripheral and
distracting litigation."
The extension allows the Debtors to have exclusivity beyond the
auction scheduled for April 27. The outcome of the auction is
subject to Court approval at a confirmation hearing starting May
25.
The Inquirer notes that the auction is central to the Debtors'
plan to settle $318 million in debt to its senior lenders, who
include Angelo, Gordon & Co., the CIT Syndicated Loan Group,
Credit Suisse, and Eaton Vance Management.
The Inquirer notes that the only bid for the Debtors at the moment
is from a new entity, Philly Papers L.L.C., which is made up of
two previous investors in Philadelphia Newspapers -- Bruce Toll,
vice chairman of Toll Bros. Inc., and the Carpenters Union pension
fund -- and a newcomer, the philanthropist David Haas. Philly
Papers, the so-called stalking horse bidder, has offered $35
million in cash and a $17 million letter of credit to purchase
everything but the Debtors' North Broad Street headquarters, which
would go to the lenders.
Competing bids are due by 5 p.m. on April 23. The auction will
start at 11 a.m. next Tuesday at the New York offices of Proskauer
Rose L.L.P., one of the Debtors' two law firms.
As reported by the Troubled Company Reporter on April 13, 2010,
the U.S. Court of Appeals for the Third Circuit denied a request
by lenders to halt the auction for Philadelphia Newspapers'
assets. The secured lenders wanted the auction put off pending
further review by the Court of Appeals or the Supreme Court with
respect to the Court of Appeals' ruling that barred lenders from
submitting a credit bid at the auction. As reported by the TCR on
March 23, the Court of Appeals, in a 96-page opinion, has allowed
Philadelphia Newspapers to pursue a sale process that would bar
credit bidding by secured lenders.
A copy of the Third Circuit Ruling is available for free at
http://bankrupt.com/misc/PhillyPapers_AppealsCourt_Ruling.pdf
The Chapter 11 Plan
Philadelphia Newspapers has already obtained approval of the
disclosure statement explaining the Plan and is now soliciting
votes on the Plan.
The Plan is based upon a sale of all of the Debtors' business to
Bruce E. Toll-led Philly Papers LLC, subject to higher and better
offers. According to the disclosure statement explaining the
Plan, with the sale of the Debtors' business to Bruce Toll,
holders of secured claims, including $66 million, senior secured
claims, will recover 100 cents on the dollar. Holders of
$350 million prepetition unsecured debt claims will recover less
than 1% of their claims. Holders of prepetition unsecured trade
claims will recover up to 6%. The Plan allocates $750,000
liquidating trust in favor of general unsecured trade creditors
and a 3% distribution of equity interests in Philly Papers to
holders of unsecured prepetition claims other than general trade
creditors.
A copy of the Debtors' Disclosure Statement is available for free
at http://bankrupt.com/misc/PhillyNews_DiscStatement.pdf
A copy of the Debtors' Insider Chapter 11 Plan is available for
free at http://bankrupt.com/misc/PhillyNews_Ch11Plan.pdf
About Philadelphia Newspapers
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.
PHILLIPS-VAN HEUSEN: Moody's Puts 'B2' Rating on $525 Mil. Notes
----------------------------------------------------------------
Moody's Investors Service assigned a B2 rating to Phillips-Van
Heusen's proposed $525 million senior unsecured notes due 2020.
This rating was also placed under review for possible downgrade.
The rating assigned is based on terms and conditions as advised to
Moody's are subject to receipt and review of final documentation.
Should PVH's planned acquisition of Tommy Hilfiger conclude on the
terms and financing conditions currently contemplated, Moody's
anticipates that it would confirm the senior unsecured note rating
at B2.
All of PVH's ratings remain on review following its March 15, 2010
announcement that it has entered into a definitive agreement to
acquire Tommy Hilfiger B.V. from funds affiliated with Apax
Partners L.P. in a transaction that values Tommy at approximately
EUR2.2 billion plus the assumption of EUR100 million in
liabilities. The consideration includes EUR1.924 billion in cash
and EUR276 million in PVH common stock.
PVH has stated that it will fund the cash portion of the
acquisition and refinance its existing $300 million existing
senior unsecured notes with a combination of approximately
$385 million of cash on hand, $2.45 billion of senior secured
debt, $525 million of senior unsecured notes (subject of the
rating action), and $200 million in PVH perpetual convertible
preferred stock. In addition the company currently plans to raise
approximately $275 million in common stock through a public
offering prior to closing.
As stated in Moody's press release dated March 15, 2010, assuming
the transaction closes on the financing terms currently
contemplated, Moody's expects PVH's Corporate Family Rating to be
downgraded by one notch to Ba3 from Ba2. The B2 rating assigned
to the $525 million senior unsecured notes reflects Moody's
expectation that PVH's Corporate Family Rating would be lowered to
Ba3 upon closing of the acquisition. The rating assigned to the
notes is two notches lower than the expected post-acquisition
Corporate Family Rating, reflecting the note's unsecured position,
ranking junior to the company's proposed $2.45 billion senior
secured bank credit facilities which will have a security interest
in the significant majority of PVH's consolidated assets following
the acquisition of Tommy. Should the Tommy acquisition conclude
on the terms and financing conditions currently contemplated,
Moody's anticipates it would confirm the unsecured note rating at
B2.
These ratings were assigned, and placed on review for possible
downgrade:
* $525 million senior unsecured notes due 2020 at B2 (LGD 5, 86%)
These ratings remain under review for possible downgrade:
* $450 million five-year revolving credit facility at Ba2 (LGD 3,
33%)
* $500 million five-year Term Loan A at Ba2 (LGD 3, 33%)
* $1,500 million six-year Term Loan B at Ba2 (LGD 3, 33%)
* Corporate Family Rating at Ba2
* Probability of Default Rating at Ba2
* $100 million senior secured debentures due 2023 at Baa3
* $300 million of senior unsecured notes due 2011/2013 at Ba3
Moody's last rating action on Phillips-Van Heusen was on March 30,
2010, when a Ba2 rating was assigned (and placed under review for
downgrade) to PVH's proposed $2.45 billion senior secured bank
credit facilities.
Phillips-Van Heusen Corporation, headquartered in New York, NY,
designs, sources, markets, licenses and distributes a broad line
of dress shirts, neckwear and sportswear under owned brands
including Van Heusen, Calvin Klein, IZOD and Arrow and its
licensed brands including Tommy Hilfiger, Geoffrey Beene, Kenneth
Cole New York and numerous other licensees.
PHILLIPS-VAN HEUSEN: S&P Affirms 'BB+' Corporate Credit Rating
--------------------------------------------------------------
Standard & Poor's Ratings Services said that it affirmed its 'BB+'
corporate credit rating on Phillips-Van Heusen Corp. and assigned
its 'BB' rating to PVH's proposed $525 million senior unsecured
note offering. Proceeds from the offering will be used to fund
the tender offer currently underway for its outstanding senior
notes (two issues totaling $300 million) as well as costs
associated with the Tommy Hilfiger transaction. In addition, S&P
assigned a '5' recovery rating, indicating S&P's expectation that
lenders will receive modest (10% to 30%) recovery in the event of
a payment default. The ratings are based on preliminary terms and
are subject to review upon receipt of final information.
"The rating actions reflect S&P's expectation for the likely
completion of PVH's acquisition of Tommy Hilfiger B.V. for EUR
2.2 billion (approximately $3.1 billion), primarily with debt,
during second quarter 2010," said Standard & Poor's credit analyst
Linda I Phelps. S&P recently lowered its corporate credit rating
to speculative grade to reflect PVH's more aggressive financial
policy, the execution challenges of acquiring a company of the
same size with international operations, and the deterioration of
its credit metrics. S&P expects PVH to improve credit measures
over the next few years through debt repayment and cash flow
growth. Over the near to intermediate term, S&P also expect the
company to forego share repurchases, maintain its current
dividend, and restrict acquisitions to small, tuck-in
opportunities financed with free cash flow.
"The ratings on PVH reflect the company's participation in the
highly competitive and cyclical apparel industry, which is
vulnerable to fashion risk and changes in consumer discretionary
spending, its more aggressive financial policy, integration risk,
and high leverage," added Ms. Phelps. These risks are partially
offset by the company's dominant market position in the men's
dress shirt market and its diversified portfolio of well-
recognized brands across various distribution channels. The
rating also reflects successful integration of past acquisitions,
geographic diversification, and an experienced management team.
PVH is a designer, marketer, and retailer of men's and women's
apparel, accessories, and footwear. In S&P's view, PVH's past
acquisitions and licensing arrangements have leveraged its
operating expertise and spurred the company's growth in recent
years while reducing its reliance on its legacy dress shirt
business. In addition, the company has developed brands by using
its infrastructure, specifically sourcing, information technology,
logistics, and warehousing.
The outlook on PVH is negative. Despite the additional scale and
product portfolio and geographic diversity from the proposed
acquisition of Tommy Hilfiger, credit measures deteriorated
measurably and are more in-line with 'BB-' rating category
medians. If the company has difficulty integrating the
acquisition, PVH could have problems improving credit protection
measures significantly in the near term. S&P could lower the
rating if pro forma leverage does not decline to about 3.6x by
year-end 2010. To reach the above EBITDA level, EBITDA would need
to rise 10% from pro forma 2009 level. Although unlikely in the
near term, S&P could raise the ratings if the company is able to
reduce leverage below 2.8x and trend down to 2.5x.
POINT BLANK: Organizational Meeting to Form Panel on April 26
-------------------------------------------------------------
Roberta A. DeAngelis, Acting United States Trustee for Region 3,
will hold an organizational meeting on April 26, 2010, at
12:00 p.m. in the bankruptcy case of Point Blank Solutions, Inc.,
et al.
The meeting will be held at J. Caleb Boggs Federal Building, 844
King Street, Room 5209, Wilmington, DE 19801.
The sole purpose of the meeting will be to form a committee or
committees of unsecured creditors in the Debtors' cases.
The organizational meeting is not the meeting of creditors
pursuant to Section 341 of the Bankruptcy Code. A representative
of the Debtor, however, may attend the Organizational Meeting, and
provide background information regarding the bankruptcy cases.
To increase participation in the Chapter 11 proceeding, Section
1102 of the Bankruptcy Code requires that the United States
Trustee appoint a committee of unsecured creditors as soon as
practicable. The Committee ordinarily consists of the persons,
willing to serve, that hold the seven largest unsecured claims
against the debtor of the kinds represented on the committee.
Section 1103 of the Bankruptcy Code provides that the Committee
may consult with the debtor, investigate the debtor and its
business operations and participate in the formulation of a plan
of reorganization. The Committee may also perform other services
as are in the interests of the unsecured creditors whom it
represents.
Point Blank Solutions, Inc. --
http://www.pointblanksolutionsinc.com/-- designs and produces
body armor systems for the U.S. Military, Government and law
enforcement agencies, as well as select international markets.
The Company is recognized as the largest producer of soft body
armor in the U.S. The Company maintains facilities in Pompano
Beach, FL and Jacksboro, TN.
Point Blank Solutions filed for Chapter 11 on April 14, 2010
(Bankr. D. Del. Case No. 10-11255).
PRIVE VEGAS: Nightclub Ceases Operations
----------------------------------------
According to Las Vegas Review-Journal, Prive Nightclub has ceased
operations. The nightclub was operating under 30-day temporary
licenses from Clark County. Harrah's Entertainment, which assume
ownership of Planet Hollywood, told the club owner to either pay
past-due rent and expenses or leave the hotel-casino.
Prive Vegas owns the Living Room and Prive, adjacent nightclubs
inside the Planet Hollywood Resort and Casino in Las Vegas. Prive
Vegas LLC filed for Chapter 11 protection in Miami (Bankr. S.D.
Fla. Case No. 09-34880). The case was assigned to U.S. Bankruptcy
Judge A. Jay Cristol. The petition says debt is $1 million to
$10 million while assets are less than $1 million.
PTC ALLIANCE: Court Enters Order Approving Sale of All Assets
-------------------------------------------------------------
PTC Alliance disclosed the U.S. Bankruptcy Court has entered an
order authorizing the sale of substantially all of the company's
assets in the U.S. and the stock of its non-debtor German
subsidiary, Wiederholt GmbH.
The Hon. Christopher S. Sontchi of the U.S. Bankruptcy Court for
the District of Delaware signed and entered the order on the court
docket for the Chapter 11 proceedings.
As previously announced, the sale to agents of the company's
credit facilities supported by funds managed by Black Diamond
Capital Management L.L.C. was authorized at a hearing on April 14,
2010.
PTC Alliance is represented by law firms DLA Piper LLP and Messana
Rosner & Stern LLP in the Chapter 11 proceedings.
PTC Alliance and its U.S. subsidiaries filed voluntary petitions
for relief under Chapter 11 of the U.S. Bankruptcy Code on
October 1, 2009, in the U.S. Bankruptcy Court for the District of
Delaware. The case number is 09-13395.
About PTC Alliance
PTC Alliance is a leading manufacturer and marketer of welded and
cold drawn mechanical steel tubing and tubular shapes, fabricated
parts, precision components and chrome-plated rod. The company's
major customers include steel service centers, automotive and
truck manufacturers, construction and agricultural equipment OEMs
and machinery and appliance makers. With eleven strategically
located factories in North America and a manufacturing complex in
Germany, PTC Alliance is able to minimize lead time, shipping
distance and expense for its customers.
RECTICEL NORTH AMERICA: Two Units to Exit Bankruptcy on April 23
----------------------------------------------------------------
According to RubberNews.com, Recticel Interiors North America
L.L.C. and Recticel Urepp North America Inc. will exit Chapter 11
bankruptcy protection on April 23.
Brussels-based Recticel SA (NYSE Euronext: REC) ---
http://www.recticel.com/-- makes and sells foam filling for
automobiles.
Two units of Recticel -- Recticel North America, Inc., and
Recticel Interiors North America, LLC -- filed for Chapter 11 on
Oct. 29, 2009 (Bankr. E.D. Mich. Case No. 09-73411).
RINA makes and sell interior trim for cars in the United States
and RUNA operates in the manufacture of Colo-fast light-stable
polyurethane compounds, which are used by RINA. RINA and RUNA
have 250 employees.
Together, the Auburn Hills, Michigan-based companies reported
revenue of $69.6 million in 2008 and $28.3 million for the first
nine months of 2009. Combined assets are $13.9 million, with
combined debt totaling $105.9 million.
The case is In re Recticel North America Inc., 09-73411,
U.S. Bankruptcy Court, Eastern District Michigan (Detroit).
RESURRECTION CHRISTIAN: Files for Chapter 11 Bankruptcy
-------------------------------------------------------
Erin Richards at the Journal Sentinel says Resurrection Christian
Academy, a private school, has filed for Chapter 11 bankruptcy.
According to Journal Sentinel, the school was evicted from its
rented space at 8634 W. Brown Deer Road on March 24. School
leader Mary Jones filed for bankruptcy the day before the school
was evicted.
R.H. HOOVER: Involuntary Chapter 11 Case Summary
------------------------------------------------
Alleged Debtor: R.H. Hoover, Inc.
9209 East Mission Avenue, Suite F
Spokane, WA 99206-4096
Case Number: 10-02378
Involuntary Chapter 11 Petition Date: April 20, 2010
Court: U.S. Bankruptcy Court
Eastern District of Washington (Spokane/Yakima)
Judge: Patricia C Williams
Petitioner's Counsel: Barry W Davidson, Esq.
Davidson Backman Medeiros PLLC
601 West Riverside Avenue, Suite 1550
Spokane, WA 99201
Tel: (509) 624-4600
Fax: (509) 623-1660
E-mail: cnickerl@dbm-law.net
Creditor that signed the Chapter 11 petition:
Petitioner Nature of Claim Claim Amount
---------- --------------- ------------
Charles G. Little, Jr. Indemnity $14,425
5400 Little Parkway
Sherrills Ford, NC 2867
RITZ CAMERA: Wins Confirmation of Liquidating Chapter 11 Plan
-------------------------------------------------------------
Bill Rochelle at Bloomberg News reports that Ritz Camera Centers
Inc. won approval of a liquidating Chapter 11 plan proposed by the
company and the official creditor's committee. Under the Plan,
unsecured creditors are to recover 4% to 14% of their claims.
Bloomberg recounts that Ritz generated $40 million by selling all
129 Boater's World Marine Centers. A group including the
company's chief executive officer paid $16.25 million in cash and
a $7.8 million note in July to buy at least 163 of the remaining
375 camera stores. Later, Ritz sold a $4 million account
receivable for $1.5 million to an owner of the company that owed
the debt.
About Ritz Camera
Headquartered in Beltsville, Maryland, Ritz Camera Centers, Inc. -
- http://www.ritzcamera.com/-- sold digital cameras and
accessories, and electronic products. The Company filed for
Chapter 11 protection on February 22, 2009 (Bankr. D. Del. Case
No. 09-10617). Irving E. Walker, Esq., Gary H. Leibowitz, Esq.,
at Cole, Schotz, Meisel, Forman & Leonard, P.A., in Baltimore, are
bankruptcy counsel to the Debtor. Norman L. Pernick, Esq., and
Karen M. Mckinley, Esq., at Cole, Schotz, Meisel, Forman &
Leonard, P.A., in Wilmington, Delaware, serve as local counsel.
Thomas & Libowitz, P.A., is Debtor's special corporate counsel and
conflicts counsel. Marc S. Seinsweig, at FTI Consulting, Inc,
acts as the Debtor's chief restructuring officer. Kurtzman Carson
Consultants LLC is the claims and noticing agent. Attorneys at
Cooley Godward Kronish LLP represent the official committee of
unsecured creditors as lead counsel. The Committee selected
Bifferato LLC as Delaware counsel. In its schedules, the Debtor
listed total assets of $277 million and total debts of
$172.1 million.
RIVERS EDGE: Case Summary & 4 Largest Unsecured Creditors
---------------------------------------------------------
Debtor: Rivers Edge of Rutherford, Inc.
P.O. Box 331822
Murfreesboro, TN 37133
Bankruptcy Case No.: 10-04138
Chapter 11 Petition Date: April 19, 2010
Court: U.S. Bankruptcy Court
Middle District of Tennessee (Nashville)
Judge: George C. Paine II
Debtor's Counsel: Paul E. Jennings, Esq.
Paul E. Jennings Law Offices, P.C.
805 South Church Street Suite 3
Murfreesboro, TN 37130
Tel: (615) 895-7200
Fax: (615) 895-7294
E-mail: paulejennings@bellsouth.net
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
A copy of the Company's list of 4 largest unsecured creditors
filed together with the petition is available for free at
http://bankrupt.com/misc/tnmb10-04138.pdf
The petition was signed by Clair D. Vanderschaaf, managing member.
R L PHIPPS: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------
Debtor: R L Phipps Construction Inc.
dba Eucon Construction, Inc.
6137 Alum Ridge Road
Riner, VA 24149
Bankruptcy Case No.: 10-70954
Chapter 11 Petition Date: April 19, 2010
Court: U.S. Bankruptcy Court
Western District of Virginia (Roanoke)
Judge: Ross W. Krumm
Debtor's Counsel: Mark A. Black, Esq.
Brumberg Mackey & Wall PLC
P.O. Box 2470
30 W Franklin Road Suite 800
Roanoke, VA 24010
Tel: (540) 343-2956
E-mail: mblack@bmwlaw.com
Estimated Assets: $100,001 to $500,000
Estimated Debts: $1,000,001 to $10,000,000
A copy of the Company's list of 20 largest unsecured creditors
filed together with the petition is available for free at
http://bankrupt.com/misc/vawb10-70954.pdf
The petition was signed by Ricky Lee Phipps, vice president.
ROBERTO SOLTERO: Case Summary & 7 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: Roberto Soltero
18751 State Highway 305
Poulsbo, WA 98370
Bankruptcy Case No.: 10-14330
Chapter 11 Petition Date: April 19, 2010
Court: U.S. Bankruptcy Court
Western District of Washington (Seattle)
Judge: Thomas T. Glover
Debtor's Counsel: David Carl Hill, Esq.
Law Office of David Carl Hill
2472 Bethel Road SE Suite A
Port Orchard, WA 98366
Tel: (360) 876-5015
E-mail: bankruptcy@hilllaw.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
According to the schedules, the Debtor says that assets total
$1,346,720 while debts total $1,210,020.
A copy of the Debtor's list of 7 largest unsecured creditors filed
together with the petition is available for free at
http://bankrupt.com/misc/wawb10-14330.pdf
The petition was signed by the Debtor.
SARATOGA RESOURCES: Wins Confirmation of Reorganization Plan
------------------------------------------------------------
Saratoga Resources, Inc. disclosed that the United States
Bankruptcy Court for the Western District of Louisiana, Lafayette
Division, the Honorable Robert Summerhays presiding, confirmed by
court order the Company's Third Amended Plan of Reorganization.
Confirmation of the Plan was not only unopposed, but 99.9% of the
creditors of the Company voted to confirm the Plan. The Plan was
sponsored by the Company, its subsidiaries, the Official Committee
of Equity Security Holders and Macquarie Americas Corporation.
The Plan provides for, among other things, restructuring of the
Company's existing secured credit facilities, including a
reduction in the interest rate under the Company's term loan
facility, payment in full for all trade creditors within 12 months
of the Plan's effective date and equity retaining substantially
all of their interests, with some dilution as the Company is
issuing both warrants and new stock to the creditors pursuant to
the terms of the Plan. The Plan will become effective upon
execution of new loan documentation relating to the restructured
secured credit facilities and related documentation. Notice of
the Effective Date of the Plan will be filed of record with the
Court.
Thomas F. Cooke, Chairman and CEO, said: "We are very satisfied
with the results of the long and arduous path this bankruptcy
proceeding has taken and we very much appreciate the support of
our vendors and our lenders through the process. We are anxious
to go forward now with our development plan which will allow us to
exploit the oil and gas resources under the Company's leases,
which in turn will allow us to perform under the Plan and pay all
creditors in full." Cooke added: "We also want to acknowledge the
help, guidance and able assistance of our bankruptcy counsel,
Adams and Reese, LLP, and that of our oil and gas counsel,
Slattery, Marino & Roberts, APLC, as the Company navigated the
bankruptcy and restructuring process."
About Saratoga Resources
Saratoga Resources Inc. (OTCBB: SROEQ) is an independent
exploration and production company with offices in Houston and
Covington. Saratoga engages in the acquisition and development of
oil and gas producing properties that allow the Company to grow
through low-risk development and risk-managed exploration.
Saratoga operates 14 fields in Louisiana and Texas with 106 active
producing wells. Current net production is roughly 3,000
barrels of oil equivalent per day -- BOEPD -- with 70% oil versus
gas. Principal holdings cover 37,756 gross (34,246 net) acres,
mostly held-by-production, located in the state waters offshore
Louisiana.
Saratoga Resources, Inc., and certain operating subsidiaries filed
on March 31, 2009, voluntary Chapter 11 petitions in the U.S.
Bankruptcy Court for the Western District of Louisiana in
Lafayette, Louisiana. Saratoga is being advised by its legal
counsel, Adams & Reese LLP; its investment banker, Pritchard
Capital Partners LLC; and its financial advisor, Ambrose
Consulting LLC.
The case is In Re Harvest Oil and Gas, LLC (Bankr. W.D. La. Lead
Case No. 09-50397). Robin B. Cheatham, Esq., at Adams & Reese
LLP, represents the Debtors in their restructuring effort. The
Debtors listed between $100 million and $500 million each in
assets and debts.
SEA PINE: Voluntary Chapter 11 Case Summary
-------------------------------------------
Debtor: Sea Pine, Inc.
88 Grandview Avenue
Boothbay Harbor, ME 04538-2247
Tel: (207) 633-3135
Bankruptcy Case No.: 10-10590
Chapter 11 Petition Date: April 19, 2010
Court: United States Bankruptcy Court
Maine (Bangor)
Debtor's Counsel: Roger A. Clement, Jr., Esq.
Verrill Dana, LLP
One Portland Square
P.O. Box 586
Portland, ME 04112-0586
Tel: (207) 774-4000
Fax: (207) 774-7499
E-mail: rclement@verrilldana.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $10,000,001 to $50,000,000
The Debtor did not file its list of largest unsecured creditors
when it filed its petition.
The petition was signed by Joseph M. Paolillo, president.
SIX FLAGS: Court Extends Removal Period to July 8
-------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware extended to
July 8, 2010, the time within which Six Flags, Inc., and its
debtor-affiliates may file notices of removal of civil actions in
which they may become parties.
As previously reported, Daniel J. DeFranceschi, Esq., at Richards,
Layton & Finger, P.A., in Wilmington, Delaware, relates that the
Debtors have focused on stabilizing their business and ensuring a
smooth transition into Chapter 11, while at the same time,
focusing on other time-sensitive aspects of these cases.
According to Mr. DeFranceschi, since the filing of the Second
Removal Extension, the Debtors have, among other things:
(a) participated in the contested Disclosure Statement hearing,
pursuant to which the Court approved (i) the Disclosure
Statement fort the Third Amended Plan, (ii) the extension of
the Debtors' exclusivity; (iii) the Exit Financing Motion
and (iv) the Backstop Commitment Motion;
(b) filed two plans or reorganization;
(c) filed the Complaints against Park Landlords -- Kentucky
State Fair Board, Kentucky State Property and Buildings
Commission and the Finance and Administration Cabinet of the
Commonwealth of Kentucky -- for their interference with the
Debtors' removal of their property from the leased premises
owned partly by the Park Landlords; and litigated, as
defendants in an adversary proceeding filed by KSFB and the
Park Landlords, who allege that the Debtors are liable for
damages for committing breach of contract, for their removal
of certain rides and other Tenant Improvements from the
Leased Premises without obtaining the consent of the KSFB;
(d) commenced the Confirmation Hearing; and
(e) met the expedited discovery schedule, conducting broad
discovery in accordance with the Scheduling Order.
Specifically, with respect to the Civil Actions, the Debtors are
continuing to review their files and records to determine whether
they should remove any claims or civil causes of action that may
be pending in state or federal court, Mr. DeFranceschi says.
Furthermore, the Debtors are parties to numerous lawsuits, and
are still assessing these lawsuits to determine whether removal
is warranted. The key management personnel conducting this
review are also actively involved in the Debtors' reorganization,
and have yet to finish their analysis as to whether any of the
pending suits should be removed, he relates. As a result, the
Debtors require additional time to consider filing notices of
removal in the Civil Actions, Mr. DeFranceshi contends.
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: Discloses Substantial Interest in Seven Entities
-----------------------------------------------------------
Pursuant to Rule 2015.3 of the Federal Rules of Bankruptcy
Procedure, Six Flags, Inc., and its debtor-affiliates submitted to
the U.S. Bankruptcy Court for the District of Delaware a report
regarding value, operations and profitability of entities in which
they hold a substantial or controlling interest as of December 31,
2009.
The Debtors disclose that they hold a substantial interest in
these entities:
Interest of
Name of Entity the Estate
-------------- -----------
CPIH LLC 39.2%
Parc Six Flags Montreal, S.E.C. 100.0%
HWP Development, LLC 41.0%
Texas Flags Ltd. 52.0%
Six Flags Over Georgia II, LLP 28.9%
Dormant Entities 100.0%
Special Purpose Entities 49.0%
The Dormant Entities is composed of five companies which are not
active in its operations. The Special Purpose Entities is
composed of two companies holding liquor licenses for the
entities which the Debtors have controlling 49% interest.
The Report also includes copies of balance sheets, statements of
income and description of operations for entities held by the
Debtors as of December 31, 2009.
A full-text copy of the 2015.3 Report is available for free
at http://bankrupt.com/misc/SixF_2015_3.pdf
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: Resilient Capital Wants to Join Confirmation Hearing
---------------------------------------------------------------
Resilient Capital Management, LLC, seeks permission from the U.S.
Bankruptcy Court for the District of Delaware to join in the
continued confirmation hearing of Six Flags, Inc., and its debtor-
affiliates' Modified Fourth Amended Plan of Reorganization
scheduled for April 28, 2010. Further, Resilient asks the Court
to allow the expert testimony of Scott Eisenberg of Amherst
Capital Partners, L.L.C.
Resilient is a holder of the Debtors' Preferred Income Equity
Redeemable Shares (PIERS).
Frederick B. Rosner, Esq., at Messana Rosner & Stern LLP in
Wilmington, Delaware -- frosner@mrs-law.com -- relates that
Resilient intends to join in the confirmation hearing in order to
represent the interests of PIERS in the Debtors' chapter 11 cases.
Resilient has maintained throughout the Debtors' Chapter 11
proceedings that the Debtors' enterprise value is substantially
greater than the values indicated in the reports and testimony
proffered by the Debtors, the Official Committee of Unsecured
Creditors, and the Ad Hoc Groups of SFO and SFI Noteholders, Mr.
Rosner tells the Court.
According to Mr. Rosner, Houlihan, Lokey, Howard and Zukin
Capital, Inc., the Debtors' financial advisor estimates the
Debtors' enterprise value to be between $1.2 billion to $1.9
billion. Resilient's valuation expert, Amherst Capital Partners,
L.L.C., estimates the Debtors' enterprise value to be
$2,679,000,000 as of March 31, 2010. Resilient believes that
this valuation is high enough to cover all of the PIERS claims of
approximately $300 million in full and provide residual value to
common shareholders.
Denying all of the PIERS holders more than $300 million seems
patently unfair. The Board of Directors, management and the
Creditors' Committee should have been representing the interests
of the PIERS holders as part of their fiduciary obligations, Mr.
Rosner avers. Their collective failure to represent the
interests of PIERS is troubling, since the management appears to
be looking to collect its bankruptcy jackpot rather than looking
out for the interests of the PIERS, he stresses.
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).
SMURFIT-STONE: Court Allows At Least $21MM in Professional Fees
---------------------------------------------------------------
Warren H. Smith & Associates P.C., acting in its capacity as fee
auditor in Smurfit-Stone Container Corp. and its debtor-
affiliates' Chapter 11 cases, recommends the approval of fees and
expenses of these professionals:
Professional Fees Expenses Period
----------- ---- -------- ------
PricewaterhouseCoopers
* as special tax advisor $10,266,947 $- Jan. to
Sept. 2009
* as financial advisor 2,658,976 200,969 May to
Aug. 2009
The Levin Group L.P. 2,350,000 15,792 Feb. to
Oct. 2009
Grubb & Ellis Company 29,326 - Feb. to
Sept. 2009
Young Conaway Stargatt & 136,490 16,089 Oct. to
Taylor LLP Dec. 2009
FTI Consulting, Inc. 675,000 1,712 Oct. to
Dec. 2009
Houlihan Lokey 800,000 16,325 Jul. to
Oct. 2009
Armstrong Teasdale 320,118 37,963 Jul. to
Dec. 2009
State Tax Solutions LLC 220,817 0 Jul. 2009 to
d/b/a John C. Blase Feb. 2010
* * *
The U.S. Bankruptcy Court for the District of Delaware approved
these professionals' applications for payment of fees and
reimbursement of expenses covering the periods from February to
November 2009:
Professional Fees Expenses
------------ ---- --------
Young Conaway $107,228 $7,885
Sidley Austin 2,208,199 39,355
Lazard Freres & Co. 500,000 7,473
PricewaterhouseCoopers
- as financial advisor 2,659,416 232,070
- as special tax advisor 10,266,947 0
Ernst & Young 529,320 5,084
Grubb & Ellis 1,087,654 0
State Tax Solutions 30,985 0
The Levin Group 2,350,000 16,704
Warren H. Smith & Associates 30,156 163
Pachulski Stang 31,330 9,285
Kramer Levin 784,720 16,853
Bennett Jones 166,574 12,761
FTI Consulting 712,903 12,164
The Court also approved the quarterly expense reimbursement of
certain members of the Official Committee of Unsecured Creditors
for the April to September 2009 period. The reimbursement totals
$993.
About Smurfit-Stone
Smurfit-Stone Container Corp. -- http://www.smurfit-stone.com/--
is one of the leading integrated manufacturers of paperboard and
paper-based packaging in North America and one of the world's
largest paper recyclers. The Company operates 162 manufacturing
facilities that are primarily located in the United States and
Canada. The Company also owns roughly one million acres of
timberland in Canada and operates wood harvesting facilities in
Canada and the United States. The Company employs roughly 21,250
employees, 17,400 of which are based in the United States. For
the quarterly period ended September 30, 2008, the Company
reported roughly US$7.450 billion in total assets and
US$5.582 billion in total liabilities on a consolidated basis.
Smurfit-Stone and its U.S. and Canadian subsidiaries filed for
Chapter 11 protection on January 26, 2009 (Bankr. D. Del. Lead
Case No. 09-10235). Certain of the company's affiliates,
including Smurfit-Stone Container Canada Inc., a wholly owned
subsidiary of SSCE, and certain of its affiliates, filed to
reorganize under the Companies' Creditors Arrangement Act in the
Ontario Superior Court of Justice in Canada.
Smurfit-Stone joined pulp- and paper-related bankruptcies as
rising Internet use hurts magazines and newspapers. Corporacion
Durango SAB, Mexico's largest papermaker, sought U.S. bankruptcy
in October. Quebecor World Inc., a magazine printer and Pope &
Talbot Inc., a pulp-mill operator, also sought cross-border
bankruptcies for their operations in the U.S. and Canada.
James F. Conlan, Esq., Matthew A. Clemente, Esq., Dennis M.
Twomey, Esq., and Bojan Guzina, Esq., at Sidley Austin LLP, in
Chicago, Illinois; and Robert S. Brady, Esq., and Edmon L. Morton,
Esq., at Young Conaway Stargatt & Taylor in Wilmington, Delaware,
serve as the Debtors' bankruptcy counsel. PricewaterhouseCoopers
LLC, serves as the Debtors' financial and investment consultants.
Lazard Freres & Co. LLC acts as the Debtors' investment bankers.
Epiq Bankruptcy Solutions LLC acts as the Debtors' notice and
claims agent.
Bankruptcy Creditors' Service, Inc., publishes Smurfit-Stone
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
and ancillary foreign proceedings undertaken by Smurfit-Stone
Container Corp. and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
SMURFIT-STONE: Monitor Files 13th-15th Reports on Canada Unit
-------------------------------------------------------------
Deloitte & Touche, Inc., the monitor in the proceedings under the
Companies' Creditors Arrangement Act commenced by Smurfit-Stone
Container Canada, Inc., et al., delivered its 13th, 14th and 15th
monitor reports to the Superior Court of Justice (Commercial List)
for the Province of Ontario, in Canada.
The Monitor informs the Court that the purpose of the:
* 13th Report is to provide the Court with a summary of the
Joint Plan of Reorganization for SSCC and its Debtor
Subsidiaries and Plan of Compromise and Arrangement for SSC
Canada and Affiliated Canadian Debtors, as well as the
Monitor's assessment of the Plan and its recommendation.
Based on its review of the Plan, the Monitor tells the Court
that the Plan is fair and reasonable in the circumstances.
* 14th Report is to provide the Court with an overview of the
proposed sale by MBI Limited/Limitee, as general partner of
Smurfit-MBI, of a certain property located at 220 Water
Street, Whitby, Ontario to 2119342 Ontario, Inc. pursuant to
an agreement of purchase and sale dated March 4, 2010, as
amended on March 19, 2010, and to provide the Monitor's
support of the sale.
* 15th Report is to advise the Court of the results of the
creditors' meeting held on April 6, 2010.
Full-text copies of the Monitor's 13th, 14th and 15th Reports are
available for free at:
http://bankrupt.com/misc/SSC13thMonRep.pdf
http://bankrupt.com/misc/SSC14thMonRep.pdf
http://bankrupt.com/misc/SSC15thMonRep.pdf
The Monitor tells the Court that at the Meeting, after a brief
introduction, the Monitor provided an overview of the analysis
and recommendations contained in its Thirteenth Monitor Report,
copies of which were made available at the meeting.
After the overview, the resolution for each class of affected
Creditors in respect of the Plan was tabled and subsequently
voted on by each class.
Accordingly, the Monitor notes that:
(a) a majority in number representing more than two-thirds in
value of each of these classes have voted to accept the
Plan:
* the Affected Secured Creditors of SSC Canada;
* the Affected Secured Creditors of Smurfit-MBI;
* the Affected Secured Creditors of MBI Limited;
* the Affected Secured Creditors of Francobec Company;
* the Affected Secured Creditors of 3083527 Nova Scotia
Company;
* the Affected Unsecured Creditors of SSC Canada; and
* the Affected Unsecured Creditors of Smurfit-MBI; and
(b) the Plan was not approved by the requisite majorities of
the Affected Unsecured Creditors of Stone Container
Finance Company of Canada II.
About Smurfit-Stone
Smurfit-Stone Container Corp. -- http://www.smurfit-stone.com/--
is one of the leading integrated manufacturers of paperboard and
paper-based packaging in North America and one of the world's
largest paper recyclers. The Company operates 162 manufacturing
facilities that are primarily located in the United States and
Canada. The Company also owns roughly one million acres of
timberland in Canada and operates wood harvesting facilities in
Canada and the United States. The Company employs roughly 21,250
employees, 17,400 of which are based in the United States. For
the quarterly period ended September 30, 2008, the Company
reported roughly US$7.450 billion in total assets and
US$5.582 billion in total liabilities on a consolidated basis.
Smurfit-Stone and its U.S. and Canadian subsidiaries filed for
Chapter 11 protection on January 26, 2009 (Bankr. D. Del. Lead
Case No. 09-10235). Certain of the company's affiliates,
including Smurfit-Stone Container Canada Inc., a wholly owned
subsidiary of SSCE, and certain of its affiliates, filed to
reorganize under the Companies' Creditors Arrangement Act in the
Ontario Superior Court of Justice in Canada.
Smurfit-Stone joined pulp- and paper-related bankruptcies as
rising Internet use hurts magazines and newspapers. Corporacion
Durango SAB, Mexico's largest papermaker, sought U.S. bankruptcy
in October. Quebecor World Inc., a magazine printer and Pope &
Talbot Inc., a pulp-mill operator, also sought cross-border
bankruptcies for their operations in the U.S. and Canada.
James F. Conlan, Esq., Matthew A. Clemente, Esq., Dennis M.
Twomey, Esq., and Bojan Guzina, Esq., at Sidley Austin LLP, in
Chicago, Illinois; and Robert S. Brady, Esq., and Edmon L. Morton,
Esq., at Young Conaway Stargatt & Taylor in Wilmington, Delaware,
serve as the Debtors' bankruptcy counsel. PricewaterhouseCoopers
LLC, serves as the Debtors' financial and investment consultants.
Lazard Freres & Co. LLC acts as the Debtors' investment bankers.
Epiq Bankruptcy Solutions LLC acts as the Debtors' notice and
claims agent.
Bankruptcy Creditors' Service, Inc., publishes Smurfit-Stone
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
and ancillary foreign proceedings undertaken by Smurfit-Stone
Container Corp. and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
SOUTH BAY EXPRESSWAY: Otay River Sues for Breach of Contract
------------------------------------------------------------
Otay River Constructors notifies the United States Bankruptcy
Court for the Southern District of California and parties-in-
interest of the removal to the Bankruptcy Court of an action
formerly pending in the Superior Court for the state of
California, County of San Diego, entitled Otay River Constructors,
a joint venture of Washington Group International, Inc., and Fluor
Enterprises, Inc., plaintiff, v. South Bay Expressway, L.P.;
California Transportation Ventures, Inc.; State of California and
its Department of Transportation; Chicago Title Company, as
trustee; Wells Fargo Bank, National Association, as Collateral
Agent, on behalf of various lenders, including Banco Bilbao
Vizcaya Argentaria, S.A., DEPFA Bank plc, and the United States
Department of Transportation, acting through the Federal Highway
Administration; and DOES 1 through 100.
ORC filed its complaint for breach of contract and foreclosure of
mechanic's lien against numerous defendants on September 24, 2009.
The next day, ORC filed its Notice of Lis Pendens for $233,110,946
and Mechanic's Lien of $145,476,376, as later amended. The
complaint was amended on March 12, 2010.
On November 25, 2009, upon the application made by ORC, the
Superior Court dismissed without prejudice these defendants:
* Bank Leumi USA;
* California Commercial Asphalt, LLC;
* California National Bank, a National Banking Association;
* City of Chula Vista;
* City of San Diego;
* Commonwealth Land Title Company, as trustee;
* County of San Diego;
* Coxcom, Inc., d/b/a Cox Communications, San Diego;
* Eastlake Village West Association;
* First American Title Company, as trustee;
* General Electric Capital Corporation;
* Pacific Bell Telephone Company;
* The Eastlake Company LLC;
* San Diego County Water Authority;
* McMillan Otay Ranch LLC;
* Otay Land Company, LLC;
* San Diego Gas & Electric Company;
* Sunroad Otay Partners, LP; and
* VWE LLC.
In the Removed Action, ORC seeks a determination of the existence,
validity, priority and enforcement of ORC's mechanic's lien and,
if not resolved by the JAMS arbitration, the amount of ORC's claim
against the Debtors arising from breaches of the design build
contract for work on the Toll Road. The case primarily involves a
dispute between ORC and the Lenders over the validity and priority
of ORC's mechanic's lien.
David L. Osias, Esq., at Allen Matkins Leck Gamble Mallory &
Natsis LLP, in San Diego, California -- dosias@allenmatkins.com
-- contends that the Removed Action arises in and relates to the
Debtors' Chapter 11 cases, and is one which may be removed to
the Bankruptcy Court by ORC pursuant to the provisions of Section
1452(a) of the Judicial and Judiciary Procedures Code and Rule
9027(a) of the Federal Rules of Bankruptcy Procedure.
Mr. Osias further asserts that the Complaint involves core
proceedings pursuant to Section 157(b)(2) of the Judicial and
Judiciary Procedures Code. He adds that ORC consents to the entry
of final orders or judgments by the Bankruptcy Court in the
Removed Action.
A status conference on the adversary proceeding will be held on
April 22, 2010.
ORC and Caltrans Stipulate
In light of the removal and the activity associated with the
Debtors' bankruptcy cases during the first several weeks of the
cases, and the recent retention of bankruptcy counsel by Caltrans,
ORC and Caltrans have stipulated to extend the time for Caltrans
to respond to the amended complaint to April 19, 2010.
Caltrans' deadline to file a response to the amended complaint is
on April 12, 2010.
About South Bay Expressway
South Bay Expressway, L.P., dba San Diego Expressway, L.P., filed
for Chapter 11 on March 22, 2010 (Bankr. S.D. Calif. Case No. 10-
04516). Its affiliate, California Transportation Ventures Inc.,
also filed for bankruptcy.
The Debtors developed and operate a four lane, nine mile express
toll road in Southern California commonly referred to as the South
Bay Expressway or State Road 125. Both estimated assets and debts
of $500 million to $1 billion in their bankruptcy petitions.
Robert Pilmer, Esq., at Kirkland & Ellis LLP, represents the
Debtors in their restructuring effort. PricewaterhouseCoopers LLP
is auditor and tax advisor. Imperial Capital LLC is financial
advisor. Epiq Bankruptcy Solutions LLC serves as claims and notice
agent.
The Debtors say that as of the bankruptcy filing, they have
roughly $640 million in book value of total assets and roughly
$570 million in book value of total liabilities.
Bankruptcy Creditors' Service, Inc., publishes South Bay
Expressway Bankruptcy News. The newsletter tracks the Chapter 11
proceeding undertaken by South Bay Expressway LP and California
Transportation Ventures Inc. (http://bankrupt.com/newsstand/or
215/945-7000).
SOUTH BAY EXPRESSWAY: To Hire Professionals in Ordinary Course
--------------------------------------------------------------
South Bay Expressway, L.P., and California Transportation
Ventures, Inc., employ various attorneys, accountants, auditors
and other professionals in the ordinary course of their
businesses. The OCPs provide services for the Debtors in a
variety of matters unrelated to the Chapter 11 cases, particularly
specialized legal services. The Debtors' current OCPs, include:
OCP Name Services Provided
-------- -----------------
Clayton Utz Case Management in
Contractor Litigation
Farella Braun Martel LLP Litigation Counsel
Milbank, Tweed, Hadley Corporate Counsel
and McCloy LLP
Robins, Kaplan, Miller Surety Counsel
& Ciresi LLP
Wertz McDade Wallace Litigation and General
Moot & Brower Corporate Counsel
Howard Rice Nemerovski Litigation Counsel
Canady Falk & Rabkin
Osborne & Nesbitt LLP Insurance Counsel
Weil, Gotshal & Manges LLP Litigation Counsel
Barger & Wolen LLP Litigation Consultant
Ajalat, Polley, Ayoob Tax Counsel
& Matarese
By this motion, the Debtors seek the Court's authority to employ
and compensate the OCPs in the ordinary course of their business,
without the need for each OCP to file formal applications for
retention and compensation pursuant to Sections 327, 328 and 330
of the Bankruptcy Code.
The OCPs have a great deal of background knowledge, expertise and
familiarity with the Debtors and their operations, relates R.
Alexander Pilmer, Esq., at Kirkland & Ellis LLP, in Los Angeles,
California.
In light of the number of OCPs, and the costs associated with the
preparation of employment applications for professionals, who will
receive relatively modest fees, the Debtors submit that it would
be impractical and inefficient for the Debtors and their legal
advisors to prepare and submit individual applications and
proposed retention orders for each OCP.
The Debtors propose that within 30 days following the Petition
Date on which an OCP commences work for the Debtors, each OCP on
the OCP List will file with the Court a declaration of
disinterestedness, and serve the Declaration upon certain notice
parties, which include the Debtors, key parties' counsel and the
U.S. Trustee.
The Notice Parties will have 10 days after the date of filing of
each OCP's Declaration to object to the retention of the OCP. The
objecting party will file its objection with the Court and serve
the objection upon the Notice Parties. If any objection cannot be
resolved within 10 days of its receipt, the matter will be
scheduled for hearing at the next regularly-scheduled omnibus
hearing date. The Debtors will not be authorized to retain and
pay the OCP until all outstanding objections have been withdrawn,
resolved or overruled by a Court order.
If no objection is received by the Objection Deadline with respect
to any particular OCP, the Debtors will be authorized to retain
the OCP. The Debtors will be authorized to pay, without formal
application to the Court by any OCP, 100% of fees and
disbursements to each of the OCPs retained by the Debtors pursuant
to the OCP Procedures upon submission to the Debtors of an
appropriate invoice, provided that fees paid to OCPs, excluding
costs and disbursements, may not exceed $30,000 per month per OCP
in the aggregate, calculated as an average over a rolling three-
month period while the Chapter 11 cases are pending.
Any payments to an OCP in excess of the OCP Cap will be subject to
prior approval of the Court in accordance with Sections 330 and
331 of the Bankruptcy Code.
Beginning on July 1, 2010, and for each quarter, the Debtors will
within 25 days thereof file with the Court and serve on the Notice
Parties a statement with respect to the OCPs paid during the
immediately preceding three-month period.
The Debtors reserve the right to retain additional OCPs from time
to time during the Chapter 11 cases by including those OCPs on an
amended version of the OCP List that is filed with the Court and
served on the Notice Parties, and having the OCPs comply with the
OCP Procedures.
The Court will convene a hearing on May 27, 2010, to consider the
Debtors' request.
About South Bay Expressway
South Bay Expressway, L.P., dba San Diego Expressway, L.P., filed
for Chapter 11 on March 22, 2010 (Bankr. S.D. Calif. Case No. 10-
04516). Its affiliate, California Transportation Ventures Inc.,
also filed for bankruptcy.
The Debtors developed and operate a four lane, nine mile express
toll road in Southern California commonly referred to as the South
Bay Expressway or State Road 125. Both estimated assets and debts
of $500 million to $1 billion in their bankruptcy petitions.
Robert Pilmer, Esq., at Kirkland & Ellis LLP, represents the
Debtors in their restructuring effort. PricewaterhouseCoopers LLP
is auditor and tax advisor. Imperial Capital LLC is financial
advisor. Epiq Bankruptcy Solutions LLC serves as claims and notice
agent.
The Debtors say that as of the bankruptcy filing, they have
roughly $640 million in book value of total assets and roughly
$570 million in book value of total liabilities.
Bankruptcy Creditors' Service, Inc., publishes South Bay
Expressway Bankruptcy News. The newsletter tracks the Chapter 11
proceeding undertaken by South Bay Expressway LP and California
Transportation Ventures Inc. (http://bankrupt.com/newsstand/or
215/945-7000).
SOUTH BAY EXPRESSWAY: Wants to Pay Park Betterments Obligations
---------------------------------------------------------------
When the South Bay Expressway opened in November 2007, various
work remained outstanding, including certain off-site work
included in the Franchise Agreement and described as "Betterments"
pursuant to a Cooperative Agreement between Caltrans and the
county of San Diego executed on January 16, 2002, which is
incorporated as collateral under the Term Loan Agreement and the
TIFIA Loan Agreement, relates R. Alexander Pilmer, Esq., at
Kirkland & Ellis LLP, in Los Angeles, California.
Basically, Mr. Pilmer says, the Betterments include certain
mandated mitigation for impacts to the county of San Diego caused
by the construction and operation of the Expressway. The
mitigation includes the construction of trails and other
improvements in Sweetwater Regional Park and the East View Day
Park, and the purchase and renovation of the Sweetwater Valley
Little League complex. While the Betterments related to the
Sweetwater complex have already been completed at a cost of
approximately $9 million, the Park Betterments remain outstanding.
Completion of the Park Betterments commenced in January 2010 and
is scheduled to be completed in or around October 2010. Under the
Franchise Agreement, the Debtors are obligated to complete the
Park Betterments no later than December 31, 2010.
In connection with the Park Betterments, the Debtors rely to a
significant degree on, and routinely contract with, a number of
third parties, who may be entitled under applicable non-bankruptcy
law to assert liens against the Debtors and their property if the
Debtors fail to pay for the services and goods provided to them.
The Debtors depend on the Park Betterments Claimants, which
include contractors, consultants, and suppliers, to provide
services, supplies, and building materials necessary to ensure the
completion of the Park Betterments in a timely manner, as required
under the Franchise Agreement.
Mr. Pilmer relates that the Debtors, their Secured Lenders and
agents, and certain of their existing equity holders are parties
to that certain Standstill Agreement, dated December 15, 2009.
Under the Standstill Agreement, the Equity Holders agreed to
provide additional funding to fulfill certain contractual funding
obligations, and the Secured Lenders agreed, during the standstill
period, to forbear from seeking to exercise rights against the
Debtors and collateral with respect to certain alleged defaults
and events of default under the Term Loan Agreement.
Among other things, the Standstill Agreement provided that the
Equity Holders would fund the Park Betterments, which is budgeted
to cost $4.25 million. Consistent with the Standstill Agreement,
the Equity Holders and the Debtors executed that certain SBX Park
Betterments Funding Agreement, whereby the Equity Holders agreed
to fund the Park Betterments by cash collaterizing a $5 million
letter of credit issued by Bank of New York Mellon to be used for
that purpose.
Proceeds of the nontransferable irrevocable Park Betterments LOC,
issued on January 12, 2010, are not cash collateral of the Secured
Lenders and, pursuant to the Funding Agreement, the Equity Holders
are obligated to pay all fees and expenses in connection with the
Park Betterments LOC. The Park Betterments LOC provides specific
procedures for access to funds, which are only released in the
amount of a validly issued and undisputed invoice for completed
work, says Mr. Pilmer.
The beneficiaries of the Park Betterments LOC are SBX and the
Collateral Agent. The Park Betterments Claimants are not
identified as beneficiaries under the Park Betterments LOC and,
thus, do not have recourse to the Park Betterments LOC in the
event of nonpayment by the Debtors. As of the Petition Date, the
available balance under the Park Betterments LOC is approximately
$4.95 million.
The Debtors estimate that, as of the Petition Date, the
outstanding prepetition invoices of the Park Betterments Claimants
may total approximately $150,000.
By this motion, the Debtors seek the Court's authority to:
(a) pay and discharge, on a case-by-case basis and in their
sole discretion, amounts incurred prepetition only in
respect of the Park Betterments and covered under the Park
Betterments LOC in the ordinary course of business and in
accordance with prepetition practice and the terms of the
Franchise Agreement and the Park Betterments LOC; and
(b) to continue to honor, perform and exercise their rights
and obligations, whether arising prepetition or
postpetition, in respect of the Park Betterments, whether
arising under the Franchise Agreement, Park Betterments
LOC or otherwise.
Paying the Park Betterments Claimants will benefit the Debtors'
bankruptcy estates and their creditors by allowing work on the
Park Betterments to continue without interruption, preventing
costly delays and disputes that would be detrimental to the
estates, Mr. Pilmer contends. Although the Debtors generally make
timely payments to their Park Betterments Claimants, as of the
Petition Date, some Park Betterments Claimants have not been paid
for certain prepetition services as to which payment is not yet
due, and thus, hold Perk Betterments Claims, he explains.
As a result, the Park Betterments Claimants may have a right under
applicable state or other laws to assert and perfect
materialmans', mechanics', artisans', shippers', warehousemans',
or other liens against the Debtors' interests in the Park
Betterments, notwithstanding the automatic stay under Section 362
of the Bankruptcy Code, Mr. Pilmer argues. He adds, among other
things, that in addition to being in the best interests of the
estates by preventing costly delays and potential defaults under
the Debtors' prepetition Franchise Documents, and preserving the
value of the going concern value of the Debtors' business, payment
of the Park Betterments Claimants will not prejudice any parties-
in-interest because the Park Betterments is funded entirely by the
Park Betterments LOC, which can only be used for that purpose.
A hearing will be held on May 27, 2010, to consider the Debtors'
request.
About South Bay Expressway
South Bay Expressway, L.P., dba San Diego Expressway, L.P., filed
for Chapter 11 on March 22, 2010 (Bankr. S.D. Calif. Case No. 10-
04516). Its affiliate, California Transportation Ventures Inc.,
also filed for bankruptcy.
The Debtors developed and operate a four lane, nine mile express
toll road in Southern California commonly referred to as the South
Bay Expressway or State Road 125. Both estimated assets and debts
of $500 million to $1 billion in their bankruptcy petitions.
Robert Pilmer, Esq., at Kirkland & Ellis LLP, represents the
Debtors in their restructuring effort. PricewaterhouseCoopers LLP
is auditor and tax advisor. Imperial Capital LLC is financial
advisor. Epiq Bankruptcy Solutions LLC serves as claims and notice
agent.
The Debtors say that as of the bankruptcy filing, they have
roughly $640 million in book value of total assets and roughly
$570 million in book value of total liabilities.
Bankruptcy Creditors' Service, Inc., publishes South Bay
Expressway Bankruptcy News. The newsletter tracks the Chapter 11
proceeding undertaken by South Bay Expressway LP and California
Transportation Ventures Inc. (http://bankrupt.com/newsstand/or
215/945-7000).
SPANSION INC: ITC to Discontinue Probe on Patent Violations
-----------------------------------------------------------
The U.S. International Trade Commission discontinued an initial
determination involving patent violations of certain flash memory
chips being imported into the US, circuitsassembly.com reported.
According to the report, the investigation began Dec. 18, 2008,
based on a complaint filed by Spansion Inc., which complaint
named more than 30 respondents.
The report said Spansion filed on Mar. 15, 2010, a consent motion
for partial termination of the investigation as to all asserted
claims of the patent.
About Spansion Inc.
Spansion Inc. (Pink Sheets: SPSNQ) -- http://www.spansion.com/--
is a Flash memory solutions provider. Spansion is a former joint
venture of AMD and Fujitsu.
Spansion Inc., Spansion LLC, Spansion Technology LLC, Spansion
International, Inc., and Cerium Laboratories LLC filed voluntary
petitions for Chapter 11 on March 1, 2009 (Bankr. D. Del. Lead
Case No. 09-10690). On February 9, 2009, Spansion's Japanese
subsidiary, Spansion Japan Ltd., voluntarily entered into a
proceeding under the Corporate Reorganization Law (Kaisha Kosei
Ho) of Japan to obtain protection from its creditors as part of
the company's restructuring efforts. None of Spansion's
subsidiaries in countries other than the United States and Japan
are included in the U.S. or Japan filings.
Michael S. Lurey, Esq., Gregory O. Lunt, Esq., and Kimberly A.
Posin, Esq., at Latham & Watkins LLP, have been tapped as
bankruptcy counsel. Michael R. Lastowski, Esq., at Duane Morris
LLP, is the Delaware counsel. Epiq Bankruptcy Solutions LLC, is
the claims agent. The United States Trustee has appointed an
official committee of unsecured creditors in the case. As of
September 30, 2008, Spansion disclosed total assets of
US$3,840,000,000, and total debts of US$2,398,000,000.
Spansion Japan Ltd. filed a Chapter 15 petition on April 30, 2009
(Bankr. D. Del. Case No. 09-11480). The Chapter 15 Petitioner's
counsel is Gregory Alan Taylor, Esq., at Ashby & Geddes. It said
that Spansion Japan had US$10 million to US$50 million in assets
and US$50 million to US$100 million in debts.
Bankruptcy Creditors' Service, Inc., publishes Spansion Bankruptcy
News. The newsletter tracks the Chapter 11 proceeding
undertaken by Spansion Inc. and its affiliates
(http://bankrupt.com/newsstand/or 215/945-7000)
SPANSION INC: Noteholders Appeal Rejection of Ch. 11 Plan
---------------------------------------------------------
In separate notices, three parties informed the U.S. Bankruptcy
Court for the District of Delaware that they intend to take an
appeal to the U.S. District Court for the District of Delaware
regarding the U.S. Bankruptcy Court's opinion denying
confirmation of the Plan issued on April 1, 2010:
(1) Ad Hoc Committee of Convertible Noteholders;
(2) Ad Hoc Committee of Equity Security Holders of Spansion,
Inc. consisting of Esopus Creek Value L.P., Plainfield
Special Situations Master Fund II Limited, Plainfield
Liquid Strategies Master Fund Limited, and Plainfield OC
Master Fund Limited; and
(3) The John Gorman 401(k).
Judge Kevin J. Carey of the U.S. Bankruptcy Court for the
District of Delaware confirmed Spansion Inc., and its debtor-
affiliates' Second Amended Plan of Reorganization on April 16,
2010.
Judge Carey rejected the Ad Hoc Committee's Alternative Plan
saying that the offer came too late, Bloomberg reported.
"You come with a plan on the eve of confirmation," Judge Carey
told attorneys for the Ad Hoc Committee. "You have to understand
that's awfully late in the process," he said.
Randy Furr, chief financial officer of Spansion, testified during
the Confirmation Hearing that any delay of the Debtors exiting
Chapter 11 will be more detrimental to the estate, Bloomberg
added.
A full-text copy of the Confirmation Order is available for free
at http://bankrupt.com/misc/Spansion_ConfirmationOrd.pdf
About Spansion Inc.
Spansion Inc. (Pink Sheets: SPSNQ) -- http://www.spansion.com/--
is a Flash memory solutions provider. Spansion is a former joint
venture of AMD and Fujitsu.
Spansion Inc., Spansion LLC, Spansion Technology LLC, Spansion
International, Inc., and Cerium Laboratories LLC filed voluntary
petitions for Chapter 11 on March 1, 2009 (Bankr. D. Del. Lead
Case No. 09-10690). On February 9, 2009, Spansion's Japanese
subsidiary, Spansion Japan Ltd., voluntarily entered into a
proceeding under the Corporate Reorganization Law (Kaisha Kosei
Ho) of Japan to obtain protection from its creditors as part of
the company's restructuring efforts. None of Spansion's
subsidiaries in countries other than the United States and Japan
are included in the U.S. or Japan filings.
Michael S. Lurey, Esq., Gregory O. Lunt, Esq., and Kimberly A.
Posin, Esq., at Latham & Watkins LLP, have been tapped as
bankruptcy counsel. Michael R. Lastowski, Esq., at Duane Morris
LLP, is the Delaware counsel. Epiq Bankruptcy Solutions LLC, is
the claims agent. The United States Trustee has appointed an
official committee of unsecured creditors in the case. As of
September 30, 2008, Spansion disclosed total assets of
US$3,840,000,000, and total debts of US$2,398,000,000.
Spansion Japan Ltd. filed a Chapter 15 petition on April 30, 2009
(Bankr. D. Del. Case No. 09-11480). The Chapter 15 Petitioner's
counsel is Gregory Alan Taylor, Esq., at Ashby & Geddes. It said
that Spansion Japan had US$10 million to US$50 million in assets
and US$50 million to US$100 million in debts.
Bankruptcy Creditors' Service, Inc., publishes Spansion Bankruptcy
News. The newsletter tracks the Chapter 11 proceeding
undertaken by Spansion Inc. and its affiliates
(http://bankrupt.com/newsstand/or 215/945-7000)
SRV & ASSOCIATES: Case Summary & 2 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: SRV & Associates, LLC
dba Saratoga Resorts Villas
4787 W Irlo Bronson Hwy 192
Kissimmee, FL 34746
Bankruptcy Case No.: 10-15778
Chapter 11 Petition Date: April 9, 2010
Court: United States Bankruptcy Court
Northern District of Illinois (Chicago)
Judge: Eugene R. Wedoff
About the Business: The Company is a Single Asset Real
Estate Debtor.
Debtor's Counsel: Michael L Flynn
936 Maple Ave
Downers Grove, IL 60515
Tel: (630) 810-1492
Estimated Assets: $10,000,001 to $50,000,000
Estimated Debts: $10,000,001 to $50,000,000
The petition was signed by Marek R.V. Harrison, managing member.
List of Debtor's 2 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
KUA Trade Debt $134,229
1701 W. Carroll St.
Kissimmee, Fl 34741
Tel: (407) 933-9800
Guest Supply Trade Debt $20,254
P.O. Box 910
Monmouth Junction, NJ 0885
Tel: (800) 221-1457
STANDARD PACIFIC: Fitch Upgrades Issuer Default Rating to 'B-'
--------------------------------------------------------------
Fitch Ratings has upgraded Standard Pacific Corp.'s
Issuer Default Rating and other outstanding debt ratings:
-- IDR to 'B-' from 'CCC';
-- Senior unsecured debt to 'B-/RR4' from 'CC/RR5';
-- Senior subordinated debt to 'CC/RR6' from 'C/RR6'.
The Rating Outlook has been revised to Stable from Negative.
The 'RR4' Recovery Rating on the company's unsecured debt
indicates average recovery prospects for holders of these debt
issues. Standard Pacific's exposure to claims made pursuant to
performance bonds and joint venture debt and the possibility that
part of these contingent liabilities would have a claim against
the company's assets were considered in determining the recovery
for the unsecured debt holders. The 'RR6' on Standard Pacific's
senior subordinated notes indicate poor recovery prospects in a
default scenario. Fitch applied a liquidation value analysis for
these RRs.
The upgrade of Standard Pacific's IDR and the Outlook revision to
Stable from Negative reflect the company's much healthier
liquidity position, better than expected financial performance in
recent quarters, improved operating results and moderately
stronger prospects for the housing sector this year. Furthermore,
Standard Pacific has also very sharply reduced its exposure to
joint ventures over the past two years.
The company generated $33.6 million of cash flow from operations
during the first quarter of 2010 (1Q'10), including a tax refund
of $108 million as a result of the tax legislation enacted in
November 2009. The company ended the first quarter with
unrestricted cash of $577.5 million. For all of fiscal 2010,
Fitch expects Standard Pacific to be cash flow negative, excluding
tax refunds, as the company starts to rebuild its land position
(through land purchases and development spending). During the
first quarter, the company spent $50.8 million on land purchases
compared with $3.7 million last year. During the first quarter,
Standard Pacific also approved the purchase of $105 million of
land, comprised of approximately 1,800 lots, 76% of which are
finished, 11% partially developed and 13% raw. As of March 31,
2010, the company had outstanding roughly $179 million of approved
land purchases and option contracts, of which $113 million is
expected to be purchased in 2010 and $66 million is expected to be
purchased in 2011 and beyond. At a minimum, $164 million of land
purchases is committed for acquisitions in 2010, with the
potential for as much as $400 million of land purchases this year.
By comparison, the company spent about $65 million in land
purchases for all of 2009.
During 2009, the company repaid in full and terminated the
revolving loan portion of its $330 million revolving credit
facility and elected to reduce the letter of credit commitment
under the facility to $5 million. At Dec. 31, 2009, the company
had four LOC facilities (including the $5 million revolving credit
facility) that aggregated $65 million. These facilities had
$14.7 million of LOCs outstanding that were secured by cash
collateral deposits of $15.1 million. Consistent with Fitch's
comment on homebuilders' termination of revolving credit
facilities, in the absence of a revolving credit line, a
consistently higher level of cash and equivalents than was typical
should be maintained on the balance sheet, especially in these
still uncertain times.
Standard Pacific reduced its debt levels by approximately
$387 million since the end of 2008. More importantly, the company
pushed out its near-term debt maturities by refinancing/paying
down debt coming due in the next three years. Standard Pacific's
debt maturities in the next two years are manageable at roughly
$123 million. The company also reduced its exposure to JVs over
the past two years. Total JV recourse debt was reduced from
$173.9 million at Dec. 31, 2008 to $37.5 at March 31, 2010. (The
company's JV recourse debt was $408.6 million at the end of 2007.)
The company reported homebuilding revenues of $175.4 million
during 1Q'10, a 16% decline compared to the same period last year.
Total deliveries fell 22% while the average sales price increased
9% during the quarter. The increased average sales price was due
primarily to a greater proportion of homes delivered within
California during the quarter compared to last year. Gross
margins, excluding impairment charges, improved 530 basis points
to 22.7% during the first quarter. SG&A expenses as a percentage
of sales improved to 18.7% compared with 25% last year. Standard
Pacific reported a pre-tax loss of $5 million during 1Q'10
compared to a pre-tax loss of $48.7 million last year. The
company did not record impairment charges during 1Q'10 and had
$30.8 million of asset impairment charges last year. Net orders
for the quarter increased 3% to 759 homes, and the company had 821
homes in backlog with a value of $278.3 million at the end of the
first quarter. Cancellation rates continued to recede and the
rate was 15% during 1Q'10 compared with 24% last year and 21%
during the prior quarter.
Housing apparently bottomed during 2009, and a so far anemic
recovery has begun. During the next 12-15 months off the bottom,
the recovery may appear jaw-toothed as substantial foreclosures
now in the pipeline present as distressed sales and as meaningful
new foreclosures arise from Alt-A and option ARM resets. High
unemployment rates and the tightening of certain Federal Housing
Administration loan standards will be notable headwinds early in
the upcycle. The continuation and expansion of the scope of the
national housing credit may boost sales in spring of this year.
And the Federal government's continuing efforts to modify
foreclosures may finally show some success in 2010.
Future ratings and Outlooks will be influenced by broad housing
market trends as well as company specific activity, such as trends
in land and development spending, general inventory levels,
speculative inventory activity (including the impact of high
cancellation rates on such activity), gross and net new order
activity, debt levels and especially free cash flow trends and
uses, and the company's cash position.
STANDARD PACIFIC: Fitch Assigns 'B-/RR4' Rating on $200 Mil. Notes
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Fitch Ratings expects to assign a 'B-/RR4' rating to Standard
Pacific Corp.'s proposed offering of $200 million of senior
unsecured notes due 2018. The issue will be ranked on a pari
passu basis with all other senior unsecured debt. The proceeds
from the notes offering will be used to purchase through a tender
offer any and all of the company's outstanding 2013 notes and to
redeem any such notes that are not validly tendered and accepted
for payment in the tender offer, with the remaining proceeds to be
used to repay approximately $73.2 million of the company's
intercompany indebtedness.
Fitch's current Issuer Default Rating for Standard Pacific is
'B-'. The Rating Outlook is Stable.
The 'RR4' Recovery Rating on the company's unsecured debt
indicates average recovery prospects for holders of these debt
issues. Standard Pacific's exposure to claims made pursuant to
performance bonds and joint venture debt and the possibility that
part of these contingent liabilities would have a claim against
the company's assets were considered in determining the recovery
for the unsecured debt holders. Fitch applied a liquidation value
analysis for these RR.
The ratings and Outlook for Standard Pacific reflect the company's
healthy liquidity position, improved operating results and
moderately stronger prospects for the housing sector this year.
The company generated $33.6 million of cash flow from operations
during the first quarter of 2010 (1Q'10), including a tax refund
of $108 million as a result of the tax legislation enacted in
November 2009. The company ended the first quarter with
unrestricted cash of $577.5 million. For all of fiscal 2010,
Fitch expects Standard Pacific to be cash flow negative, excluding
tax refunds, as the company starts to rebuild its land position
(through land purchases and development spending). During the
first quarter, the company spent $50.8 million on land purchases
compared with $3.7 million last year. During the first quarter,
Standard Pacific also approved the purchase of $105 million of
land, comprised of approximately 1,800 lots, 76% of which are
finished, 11% partially developed and 13% raw. As of March 31,
2010, the company had outstanding roughly $179 million of approved
land purchases and option contracts, of which $113 million is
expected to be purchased in 2010 and $66 million is expected to be
purchased in 2011 and beyond. At a minimum, $164 million of land
purchases is committed for acquisitions in 2010, with the
potential for as much as $400 million of land purchases this year.
By comparison, the company spent about $65 million in land
purchases for all of 2009.
The company reported homebuilding revenues of $175.4 million
during 1Q'10, a 16% decline compared to the same period last year.
Total deliveries fell 22% while the average sales price increased
9% during the quarter. The increased average sales price was due
primarily to a greater proportion of homes delivered within
California during the quarter compared to last year. Gross
margins, excluding impairment charges, improved 530 basis points
to 22.7% during the first quarter. SG&A expenses as a percentage
of sales improved to 18.7% compared with 25% last year. Standard
Pacific reported a pre-tax loss of $5 million during 1Q'10
compared to a pre-tax loss of $48.7 million last year. The
company did not record impairment charges during 1Q'10 and had
$30.8 million of asset impairment charges last year. Net orders
for the quarter increased 3% to 759 homes, and the company had 821
homes in backlog with a value of $278.3 million at the end of the
first quarter. Cancellation rates continued to recede and the
rate was 15% during 1Q'10 compared with 24% last year and 21%
during the prior quarter.
Housing apparently bottomed during 2009, and a so far anemic
recovery has begun. During the next 12-15 months off the bottom,
the recovery may appear jaw-toothed as substantial foreclosures
now in the pipeline present as distressed sales and as meaningful
new foreclosures arise from Alt-A and option ARM resets. High
unemployment rates and the tightening of certain Federal Housing
Administration loan standards will be notable headwinds early in
the upcycle. The continuation and expansion of the scope of the
national housing credit may boost sales in spring of this year.
And the Federal government's continuing efforts to modify
foreclosures may finally show some success in 2010.
Future ratings and Outlooks will be influenced by broad housing
market trends as well as company specific activity, such as trends
in land and development spending, general inventory levels,
speculative inventory activity (including the impact of high
cancellation rates on such activity), gross and net new order
activity, debt levels and especially free cash flow trends and
uses, and the company's cash position.
STANDARD PACIFIC: Moody's Raises Corporate Family Rating to 'B3'
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Moody's Investors Service raised the ratings of Standard Pacific
Corp., including its corporate family, probability of default, and
senior note rating to B3 from Caa1, its senior subordinated debt
rating to Caa2 from Caa3, and its speculative grade liquidity
rating to SGL-2 from SGL-3. At the same time, Moody's assigned a
B3 rating to the company's new $200 million of senior unsecured
notes due 2018, proceeds of which will be used to tender for the
notes due in 2013 as well as to retire other debt. The outlook is
stable.
The upgrade to B3 reflects Moody's expectation that Standard
Pacific has reduced costs sufficiently that it can begin turning
profitable later this year with some modest volume increases.
Impairments and other charges, totaling approximately $2.5 billion
over the past four years, are likely to be non-material from this
point, given the company's attractive gross margin performance,
stabilizing pricing environment, and increasing absorptions. The
company has also effectively reduced its off-balance sheet joint
venture exposure, going from $409 million recourse JV debt in 2007
to $39 million in 2009. The company also now faces a more
favorable liquidity environment, with $578 million of unrestricted
cash on hand at March 31, 2010, very relaxed covenant requirements
in its Term Loan B facility, and reduced near-term maturities.
At the same time, however, the company remains saddled with a
daunting debt leverage profile. Adjusted debt/capitalization at
March 31, 2010, was approximately 75%. Net worth to support the
company's growth expectations was a relatively small $435 million.
Cash flow, one of the main sources of strength for the company
during the worst years of the downturn, is likely to turn
negative, as the company continues to buy land and build
inventory.
The stable rating outlook reflects Moody's belief that the
industry's fundamental credit conditions have stabilized although
they remain weak, that Standard Pacific's liquidity has improved
although it could still benefit from additional refinancing of
some of the earlier debt maturities, and that the company will
maintain capital structure discipline as it pursues additional
growth opportunities during the next few years.
The outlook and/or ratings could come under pressure if the
company were to deplete its cash reserves either through sharper-
than-expected operating losses or through a sizable investment or
other transaction. The outlook could improve if the company were
to become and remain profitable, maintain strong liquidity, grow
its tangible equity base, and reduce debt leverage to below 60%.
These rating actions were taken:
* B3 (LGD3, 48%) assigned to the proposed $200 million senior
unsecured notes due 2018;
* Corporate family rating raised to B3 from Caa1;
* Probability of default rating raised to B3 from Caa1;
* Senior unsecured note rating raised to B3 (LGD3, 48%) from Caa1
(LGD4, 52%);
* Senior subordinated note rating raised to Caa2 (LGD6, 95%) from
Caa3 (LGD6,95%);
* Speculative grade liquidity rating raised to SGL-2 from SGL-3.
All of Standard Pacific's debt is guaranteed by its principal
operating subsidiaries.
Moody's most recent announcement concerning the ratings for
Standard Pacific was on September 9, 2009, at which time Moody's
rated a new issue of senior unsecured notes Caa1.
Headquartered in Irvine, California and begun in 1966, Standard
Pacific Corp. constructs and sells single-family attached and
detached homes, with homebuilding operations located in
California, Texas, Arizona, Colorado, Florida, North and South
Carolina, and Nevada. Homebuilding revenues and consolidated net
income for the year ended December 31, 2009 were approximately
$1.2 billion and ($14) million, respectively.
STANFORD INT'L: SEC's Ft. Worth Office Aware of Fraud Since 1997
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Mary L. Schapiro, chairman of the U.S. Securities and Exchange
Commission, issued a statement on April 16, 2010, regarding SEC
Office of the Inspector General Report 526 -- "Investigation of
the SEC's Response to Concerns Regarding Robert Allen Stanford's
Alleged Ponzi Scheme".
According to Ms. Schapiro, "This report recounts events that
occurred at the Commission between 1997 and 2005. Since that
time, much has changed and continues to change regarding the
agency's leadership, its internal procedures and its culture of
collaboration. The report makes seven recommendations, most of
which have been implemented since 2005. We will carefully analyze
the report and implement any additional reforms as necessary for
effective investor protection."
According to the OIG report, the OIG investigation found that the
SEC's Fort Worth office was aware since 1997 that Robert Allen
Stanford was likely operating a Ponzi scheme, having come to that
conclusion a mere two years after Stanford Group Company,
Stanford's investment adviser, registered with the SEC in 1995.
"We found that over the next 8 years, the SEC's Fort Worth
Examination group conducted four examinations of Stanford's
operations, finding in each examination that the CDs could not
have been 'legitimate,' and that it was 'highly unlikely' that the
returns Stanford claimed to generate could have been achieved with
the purported conservative investment approach. Fort Worth
examiners dutifully conducted examinations of Stanford in 1997,
1998, 2002 and 2004, concluding in each case that Stanford's CDs
were likely a Ponzi scheme or a similar fraudulent scheme. The
only significant difference in the Examination group's findings
over the years was that the potential fraud grew exponentially,
from $250 million to $1.5 billion," the report said.
The OIG investigation also found that the SEC bureaucracy may have
discouraged the staff from pursuing novel legal cases. The report
said the former head of the Fort Worth office confirmed that the
arduous process of getting the SEC staff's approval in Washington,
D.C., to recommend an Enforcement action to the Commission was a
factor in deciding which investigations to pursue. A former
branch chief in the examination program stated that she believed
that the desire of the Enforcement staff to avoid difficult cases
was partly due to the challenges in dealing with the Commission's
bureaucracy.
A full-text copy of the OIG report is available at no charge
at http://sec.gov/news/studies/2010/oig-526.pdf
About Stanford International Bank
Domiciled in Antigua, Stanford International Bank Limited --
http://www.stanfordinternationalbank.com/-- is a member of
Stanford Private Wealth Management, a global financial services
network with US$51 billion in deposits and assets under management
or advisement. Stanford Private Wealth Management serves more
than 70,000 clients in 140 countries.
On February 16, 2009, the United States District Court for the
Northern District of Texas, Dallas Division, signed an order
appointing Ralph Janvey as receiver for all the assets and records
of Stanford International Bank, Ltd., Stanford Group Company,
Stanford Capital Management, LLC, Robert Allen Stanford, James M.
Davis and Laura Pendergest-Holt and of all entities they own or
control. The February 16 order, as amended March 12, 2009,
directs the Receiver to, among other things, take control and
possession of and to operate the Receivership Estate, and to
perform all acts necessary to conserve, hold, manage and preserve
the value of the Receivership Estate.
The U.S. Securities and Exchange Commission, on Feb. 17, 2009,
charged before the U.S. District Court in Dallas, Texas, Mr.
Stanford and three of his companies for orchestrating a
fraudulent, multi-billion dollar investment scheme centering on
an US$8 billion Certificate of Deposit program.
A criminal case was pursued against him in June 2009 before the
U.S. District Court in Houston, Texas. Mr. Stanford pleaded not
guilty to 21 charges of multi-billion dollar fraud, money-
laundering and obstruction of justice. Assistant Attorney General
Lanny Breuer, as cited by Agence France-Presse News, said in a 57-
page indictment that Mr. Stanford could face up to 250 years in
prison if convicted on all charges. Mr. Stanford surrendered to
U.S. authorities after a warrant was issued for his arrest on the
criminal charges.
The criminal case is U.S. v. Stanford, H-09-342, U.S. District
Court, Southern District of Texas (Houston). The civil case is SEC
v. Stanford International Bank, 3:09-cv-00298-N, U.S. District
Court, Northern District of Texas (Dallas).
STANLEY JOHNSON: Case Summary & 20 Largest Unsecured Creditors
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Joint Debtors: Stanley H. Johnson, Sr.
dba Consulting Dynamics
dba Advance Body Imaging
Easter L. Turnipseed-Johnson
aka Easter L Barnes
206 W Catalina Road
Fullerton, CA 92835
Bankruptcy Case No.: 10-14999
Chapter 11 Petition Date: April 19, 2010
Court: United States Bankruptcy Court
Central District of California (Santa Ana)
Judge: Erithe A. Smith
Debtor's Counsel: Rose M. Hollander, Esq.
17195 Newhope St #110
Fountain Valley, CA 92708
Tel: (714) 444-1895
E-mail: sun_coast@earthlink.net
Scheduled Assets: $744,300
Scheduled Debts: $7,744,228
A list of the Company's 20 largest unsecured creditors is
available for free at http://bankrupt.com/misc/cacb10-14999.pdf
The petition was signed by Stanley H. Johnson, Sr. and Easter L.
Turnipseed-Johnson.
STATION CASINOS: Reaches Deal With Fertita Gaming Over Plan
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BankruptcyData.com reports that Station Casinos announced that an
agreement as been reached between Fertitta Gaming, which is owned
by Frank and Lorenzo Fertitta, and the steering committee
representing over 60% of the Company's senior secured bank debt
(the Opco Lenders) to support the Debtors' Joint Plan of
Reorganization, which will be modified pursuant to the terms of
the Opco Plan Support Agreement. The Joint Plan now has the
support of holders of almost 90% of the Debtors' combined secured
debt.
Pursuant to the Opco Plan Support Agreement, the Opco Lenders have
agreed to support the $772 million stalking horse bid by a newly-
formed company (Newco) to be owned by Fertitta Gaming, Colony
Capital and the mortgage lenders to FCP Propco, to purchase
substantially all of the assets of the Company, which include
Santa Fe Station, Texas Station, Fiesta Henderson, Fiesta Rancho
and Native American gaming projects (the Opco Properties).
Newco's purchase of the Opco Properties is subject to the Company
conducting a sale process for such assets under the supervision of
the U.S. Bankruptcy Court. The Newco bid for the Opco Properties
will entail significant new investment in Newco by the Fertittas
and would result in a substantial cash recovery to the Opco
Lenders. If Newco is the successful bidder, Fertitta Gaming will
manage the Opco Properties under a long-term management agreement.
Also pursuant to the Opco Plan Support Agreement, the parties have
agreed to support the Joint Plan as it relates to the
restructuring of Propco, which includes the acquisition of Red
Rock Casino Resort Spa, Palace Station, Boulder Station and Sunset
Station by Newco. "We are pleased to have reached agreement with
the steering committee of the Opco senior lenders on the
acceptance of our stalking-horse bid and our plan of
reorganization. This agreement is another important step toward
maximizing the value of all of the Station Casinos' properties for
the benefit of our team members, guests, lenders and the Las Vegas
community," said Frank Fertitta III, chairman and chief executive
officer of Station Casinos.
About Station Casinos
Station Casinos, Inc., is a gaming and entertainment company that
currently owns and operates nine major hotel/casino properties
(one of which is 50% owned) and eight smaller casino properties
(three of which are 50% owned), in the Las Vegas metropolitan
area, as well as manages a casino for a Native American tribe.
The Company owns and operates Red Rock Casino Resort Spa, Palace
Station Hotel & Casino, Boulder Station Hotel & Casino, Santa Fe
Station Hotel & Casino, Wildfire Rancho and Wild Wild West
Gambling Hall & Hotel in Las Vegas, Nevada, Texas Station Gambling
Hall & Hotel and Fiesta Rancho Casino Hotel in North Las Vegas,
Nevada, and Sunset Station Hotel & Casino, Fiesta Henderson Casino
Hotel, Wildfire Boulder, Gold Rush Casino and Lake Mead Casino in
Henderson, Nevada. Station also owns a 50% interest in Green
Valley Ranch Station Casino, Aliante Station Casino and Hotel,
Barley's Casino & Brewing Company, The Greens and Wildfire Lanes
in Henderson, Nevada and a 6.7% interest in the joint venture that
owns the Palms Casino Resort in Las Vegas, Nevada. In addition,
the Company manages Thunder Valley Casino near Sacramento,
California on behalf of the United Auburn Indian Community.
Station Casinos Inc., together with its affiliates, filed for
Chapter 11 on July 28, 2009 (Bankr. D. Nev. Case No. 09-52477).
Station Casinos has hired Milbank, Tweed, Hadley & McCloy LLP as
legal counsel in the Chapter 11 case; Brownstein Hyatt Farber
Schreck, LLP, as regulatory counsel; and Lewis and Roca LLP as
local counsel. The Debtor is also hiring Lazard Freres & Co. LLC
as investment banker and financial advisor. Kurtzman Carson
Consultants LLC is the claims and noticing agent.
In its bankruptcy petition, Station Casinos said that it had
assets of $5,725,001,325 against debts of $6,482,637,653 as of
June 30, 2009. About 4,378,929,997 of its liabilities constitute
unsecured or subordinated debt securities.
Bankruptcy Creditors' Service, Inc., publishes Station Casinos
Bankruptcy News. The newsletter tracks the Chapter 11 proceedings
of Station Casinos Inc. and its debtor-affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
STERLING MINING: Alberta Star Unsuccessful in Bid to Acquire Firm
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Alberta Star Development Corp. was unsuccessful in its bid to
acquire 100% of the shares of Sterling Mining Company and the
Sunshine Mine Lease pursuant to a bankruptcy auction held on
April 21, 2010. As a result of the unsuccessful bid, the Company
has confirmed that certain conditions contained in the Acquisition
Agreement with Sterling Mining Company dated November 17, 2009,
have not been satisfied in accordance with the terms of the
Agreement. As a result of the unsatisfied conditions, the Company
will pursue a compensation fee of US$250,000 in accordance with
the terms of the Agreement and the Second Amended Plan and
Disclosure Statement filed by Sterling.
About Sterling Mining
Based in Coeur d'Alene, Idaho, Sterling Mining Company (OTCBB:SRLM
and FSE:SMX) -- http://www.SterlingMining.com/-- is a mineral
resource development and exploration company. Sterling is engaged
in the business of acquiring, exploring, developing and mining
mineral properties primarily those containing silver and
associated base and precious metals. Sterling operates the
Sunshine Silver Mine in Idaho and has exploration projects in
Idaho, U.S.A. Sterling was incorporated under the laws of the
State of Idaho on February 3, 1903 and its common shares are
currently listed on the OTCBB: SRLMQ and Frankfurt Stock Exchange:
SMX.
Sterling is currently a debtor-in-possession in Chapter 11
Bankruptcy in the District of Idaho, U.S.A. Sterling Mining filed
for bankruptcy protection on March 3, 2009 (Bankr. D. Idaho Case
No. 09-20178). Bruce A. Anderson, Esq., at Elsaesser Jarzabek
Anderson Marks Elliott & McHugh, Chartered represents the Debtor
as counsel.
As of September 30, 2008, Sterling Mining had $31.9 million in
total assets, and $13.2 million in total current liabilities and
$1.6 million in total long-term liabilities. In its schedules,
the Debtor listed total assets of $11,706,761 and total debts of
$14,159,010.
SUK HEE SUH: Case Summary & 20 Largest Unsecured Creditors
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Debtor: Suk Hee Suh
805 Valley Crest
La Canada Flintridge, CA 91011
Bankruptcy Case No.: 10-23682
Chapter 11 Petition Date: April 9, 2010
Court: United States Bankruptcy Court
Central District of California (Los Angeles)
Judge: Victoria S. Kaufman
Debtor's Counsel: Robert M. Yaspan, Esq.
Law Offices of Robert M Yaspan
21700 Oxnard St Ste 1750
Woodland Hills, CA 91367
Tel: (818) 905-7711
Fax: (818) 501-7711
E-mail: ryaspan@yaspanlaw.com
Estimated Assets: $10,000,000 to $50,000,000
Estimated Debts: $10,000,000 to $50,000,000
The petition was signed by the Debtor.
List of Debtor's 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Karlis, LLC -- $6,854,100
3435 Wilshire Blvd., Suite 2820 Collateral FMV
Los Angeles, CA 90010 $5,000,000
EDF Resource Capital INc. -- $2,000,000
1050 Iron Point Road Collateral FMV
Folsom CA 95360 $0
Wyndham Hotel Group -- $269,659
22 Sylvan Way Disputed
Parisppany NJ 07054
Su Nam Kae -- $240,000
Daniel Suh -- $160,000
S&S Resort -- $120,000
Daniel Suh -- $100,000
Bank of America -- $100,000
Collateral FMV
$90,000
DHS Investment INc. -- $75,000
City of Victorville -- $12,886
Fire Protection Safety Svcs. -- $8,332
Southern California Edison -- $3,760
Southwest Gas -- $3,732
Charter -- $3,631
Thyssenkrupp -- $2,276
EcoLabs -- $1,786
City of Victorville -- $1,775
American Hotel -- $1,691
Verizon -- $1,392
HD Supply -- $1,279
SUNNYMEADE LEASING: Case Summary & 20 Largest Unsecured Creditors
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Debtor: Sunnymeade Leasing, LLC
4255 Amboy Road
Staten Island, NY 10308
Bankruptcy Case No.: 10-43362
Chapter 11 Petition Date: April 19, 2010
Court: U.S. Bankruptcy Court
Eastern District of New York (Brooklyn)
Judge: Carla E. Craig
Debtor's Counsel: David J. Doyaga, Esq.
Doyaga & Schaefer
26 Court Street, Suite 1002
Brooklyn, NY 11242
Tel: (718) 488-7500
Fax: (718) 488-7505
E-mail: david.doyaga@verizon.net
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
A copy of the Company's list of 20 largest unsecured creditors
filed together with the petition is available for free at
http://bankrupt.com/misc/nyeb10-43362.pdf
The petition was signed by Robert Arminante, Sr., president and
sole shareholder.
SUSPECT DETECTION: Davis Accounting Raises Going Concern Doubt
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Suspect Detection Systems Inc. filed on April 14, 2010, its annual
report on Form 10-K for the year ended December 31, 2009.
Davis Accounting Group P.C., in Cedar City, Utah, expressed
substantial doubt about the Company's ability to continue as a
going concern. The independent auditors noted that the Company
has not established sufficient sources of revenue to cover its
operating costs and expenses.
The Company reported a net loss of $1,092,984 on $888,635 of
revenue for 2009, compared with a net loss of $251,267 on zero
revenue for 2008.
The Company's balance sheet as of December 31, 2009, showed
$2,227,677 in assets, $1,329,223 of debts, and $898,454 of
stockholders' equity.
A full-text copy of the annual report is available for free at:
http://researcharchives.com/t/s?606c
Based in Jerusalem, Israel, Suspect Detection Systems Inc. was
incorporated in the State of Delaware on October 5, 2006. SDS
specializes in the development and application of proprietary
technologies for law enforcement and border control, including
counter terrorism efforts, immigration control and drug
enforcement, as well as human resource management, asset
management and the transportation sector.
TALBOTS INC: Gets Approval for NYSE Amex Listing of Warrants
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The Talbots, Inc., the warrants to acquire shares of Talbots
common stock issued in Talbots' offer to exchange each outstanding
BPW Acquisition Corp. warrant for shares of Talbots common stock
or Talbots warrants have been approved for listing on the NYSE
Amex. Trading is expected to commence on the NYSE Amex today,
April 21, 2010, under the ticker symbol "TLB.WS."
Hingham, Massachusetts-based The Talbots, Inc. (NYSE:TLB) is a
specialty retailer and direct marketer of women's apparel, shoes
and accessories. At the end of third quarter 2009, the Company
operated 589 Talbots brand stores in 46 states, the District of
Columbia, and Canada. Talbots brand on-line shopping site is
located at http://www.talbots.com/
As of October 31, 2009, the Company had $839,703,000 in total
assets, including $479,741,000 in total current assets, against
total current liabilities of $483,687,000; long-term debt less
current portion of $20,000,000; related party debt less current
portion of $241,494,000; deferred rent under lease commitments of
$124,126,000; deferred income taxes of $28,456,000; other
liabilities of $132,501,000; resulting in stockholders' deficit of
$190,561,000.
TERRACE POINTE: Asks for Court's Nod to Use Cash Collateral
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Terrace Pointe Apartments I, LLC, seeks authority from the U.S.
Bankruptcy Court for the Middle District of Florida to use the
cash collateral securing their obligation to their prepetition
lenders.
In August 2006, the Debtors entered into a certain Promissory
Note, Mortgage, Security Agreement and Assignment of Rents, in the
original principal amount of $11,400,000 in favor of Bank of
America, N.A. The same set of Loan Documents encumbers all three
parcels of real property. Pursuant to the Loan Documents, it
appears that the Debtors may have granted to the holder of the
Loan Documents security interests in the Complex, lease and rent
payments, and the proceeds thereof (collectively, the Collateral).
As of the Petition Date, the Debtors estimate that they owe the
holder of the Loan Documents approximately $11,332,494 under the
Loan Documents.
The Debtors believes that Bank of America may assert valid and
perfected security interests in cash collateral. The proceeds
generated by the lease or rental of units may constitute the cash
collateral of Bank of America. As of the Petition Date, the
Debtors had certain funds in various bank accounts. The Debtors
also continue to receive lease and rental payments from tenants of
individual leases of apartments. The Debtors anticipates that
they will receive additional payments from leases entered into
following the Petition Date in the ordinary course of their
business.
Scott A. Stichter, Esq., at Stichter, Riedel, Blain & Prosser,
P.A., the attorney for the Debtors, explains that the Debtors need
the money to fund their Chapter 11 case, pay suppliers and other
parties.
In exchange for using the cash collateral, the Debtors propose to
grant as adequate protection replacement liens on all Cash
Collateral acquired by the Debtors or the estates on or after the
Petition Date to the same extent, validity, and priority held as
of the Petition Date. The Debtors allege that Bank of America is
also adequately protected by virtue of an equity cushion.
Tampa, Florida-based Terrace Pointe Apartments I, LLC, aka Terrace
Pointe Apartments, filed for Chapter 11 bankruptcy protection on
April 5, 2010 (Bankr. M.D. Fla. Case No. 10-07946). Amy Denton
Harris, Esq., at Stichter, Riedel, Blain & Prosser, P.A., assists
the Company in its restructuring effort. The Company estimated
its assets and debts at $10,000,001 to $50 million.
Terrace Pointe Apartments II, LLC, and Terrace Pointe Apartments
III, LLC -- each disclosing assets and debts of up to $50 million
-- and other affiliates also filed for Chapter 11.
TERRACE POINTE: Taps Stichter Riedel as Bankruptcy Counsel
----------------------------------------------------------
Terrace Pointe Apartments I, LLC, et al., have sought permission
from the U.S. Bankruptcy Court for the Middle District of Florida
to employ Stichter, Riedel, Blain & Prosser, P.A., as bankruptcy
counsel.
Stichter Reidel will, among other things:
a. prepare on behalf of the Debtors necessary motions,
applications, orders, reports, pleadings, and other legal
papers;
b. appear before this Court, any appellate courts, and the
U.S. Trustee to represent and protect the interests of the
Debtors;
c. take necessary legal steps to confirm a plan of
reorganization;
d. represent the Debtors in all adversary proceedings,
contested matters, and matters involving administration of
this case, both in federal and in state courts;
e. represent the Debtors in negotiations with potential
financing sources and preparing contracts, security
instruments, or other documents necessary to obtain
financing.
The Debtors have agreed to compensate Stichter Riedel on an hourly
basis in this case in accordance with Stichter Riedel's ordinary
and customary rates, which are in effect on the date the services
are rendered, subject only to approval of this Court. The Debtors
and Stichter Riedel didn't disclose the rates.
Amy Denton Harris, Esq., an attorney at Stichter Riedel, assures
the Court that the firm is "disinterested" as that term is defined
in Section 101(14) of the Bankruptcy Code.
Tampa, Florida-based Terrace Pointe Apartments I, LLC, aka Terrace
Pointe Apartments, filed for Chapter 11 bankruptcy protection on
April 5, 2010 (Bankr. M.D. Fla. Case No. 10-07946). The Company
estimated its assets and debts at $10,000,001 to $50 million.
Terrace Pointe Apartments II, LLC, and Terrace Pointe Apartments
III, LLC -- each disclosing assets and debts of up to $50 million
-- and other affiliates also filed for Chapter 11.
TEXTRON INC: S&P Gives Stable Outlook; Affirms 'BB+/B' Rating
-------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on
Providence, R.I.-based Textron Inc. to stable from negative and
its outlook on Textron's wholly owned finance unit Textron
Financial Corp. to stable from developing. S&P also affirmed its
'BBB-/A-3' corporate credit rating on Textron and its 'BB+/B'
counterparty credit rating on TFC.
"The outlook revision on Textron reflects improved liquidity and
cash generation, faster-than-expected liquidations of noncaptive
finance receivables at TFC and consequent minimal future net
capital contributions expected from Textron, and stabilizing
conditions in the business jet and industrial markets," said
Standard & Poor's credit analyst Roman Szuper. "S&P based the
outlook revision on TFC on demonstrated discipline toward
maximizing the value of its receivables through orderly
liquidation and support from Textron to meet its debt maturities,"
he continued. In December 2008, Textron announced that it would
be exiting the noncaptive portfolio of TFC, leaving only
activities financing products of Textron.
The outlook on Textron and TFC is stable. S&P expects steady
results from defense operations, the improving economy, and
Textron's various efficiency initiatives to increase cash
generation, which, combined with sizable cash balances, should be
sufficient to meet all operating and financing requirements. In
addition, a disciplined process by TFC in liquidating noncaptive
receivables should minimize required capital contributions by
Textron. Better-than-expected improvement in earnings and cash
generation, resulting in good liquidity and sustained funds from
operations (FFO) to total debt of more than 35% (adjusted for
excess cash), and an accelerated downsizing at TFC within the
framework of the current liquidation model could lead us to raise
the ratings. A weaker-than-expected economy, delaying recovery in
Cessna's business jets and industrial activities, could pressure
profitability and cash generation, resulting in reduced liquidity
and a sustained FFO to total debt below 20%. In addition,
materially larger-than-expected losses on TFC's liquidating
receivables could require Textron to make material additional
capital contributions, while receiving lower dividends. These
factors could lead us to lower the ratings.
THEFLYONTHEWALL.COM: 3 Banks Ask Court to Keep Injunction
---------------------------------------------------------
Reuters reports that Bank of America Corp.'s Merrill Lynch
unit, Barclays Plc and Morgan Stanley have asked a federal
district court in Manhattan not to lift an injunction on
Theflyonthewall.com Inc.'s quick publication of analyst rating
changes. According to Reuters, the Banks argued that
Theflyonthewall.com failed to show the ban threatens its ability
to stay in business. Reuters says the Banks told the Court the
two e-mails Theflyonthewall.com produced that canceled
subscriptions did not signal its "certain demise."
Glenn Ostrager, a lawyer representing Theflyonthewall.com,
declined to comment, Reuters notes.
As reported by the Troubled Company Reporter on April 20, 2010,
Bloomberg News' Elizabeth Amon said Theflyonthewall.com said last
week it may go out of business unless a court delays a ruling that
barred it from posting immediate reports about changes to stock
ratings. According to Ms. Amon, President Ron Etergino said last
week that customers are canceling subscriptions because
Theflyonthewall.com can no longer issue immediate reports. Ms.
Amon said Mr. Etergino asked that the Court's ruling from
March be postponed until the Company's appeal is decided.
U.S. District Judge Denise Cote in New York ruled on March 18 that
Theflyonthewall.com couldn't post immediate online reports about
stock upgrades and downgrades by Barclays Plc, Bank of America
Corp.'s Merrill Lynch and Morgan Stanley. The banks argued at a
March trial that Theflyonthewall.com wrongfully obtains and sells
reports on changes to the banks' stock evaluations. According to
Bloomberg, the banks accused Theflyonthewall.com of "free riding"
on research reports by sending headlines on upgrades and
downgrades. Each bank spends "hundreds of millions of dollars per
year in creating the research," the judge wrote in her decision.
Reuters says Theflyonthewall.com asked for the injunction to be
lifted while it appeals to the U.S. 2nd Circuit Court of Appeals
in New York. Alternatively, according to Reuters, it sought
permission to report research first published by Bloomberg LP,
CNBC television, Dow Jones Newswires, The New York Times, Thomson
Reuters or The Wall Street Journal.
Summit, New Jersey-based Theflyonthewall.com said the injunction
gives competitors an unfair advantage, raises issues under the
First Amendment to the U.S. Constitution, and subjected it to a
"day-to-day challenge to remain in business."
Reuters says Theflyonthewall.com has said it employs 30 people,
and charges $50 a month, or $480 annually, for its services.
The case is Barclays v. Theflyonthewall.com, 06-cv-04908, U.S.
District Court, Southern District of New York (Manhattan).
THERMON HOLDINGS: Moody's Assigns 'B1' Corporate Family Rating
--------------------------------------------------------------
Moody's assigned a B1 Corporate Family Rating to Thermon Holdings
Corporation and a B1 rating to its $200 million senior secured
notes due 2017. This is Moody's initial rating of Thermon. The
ratings are assigned in connection with the acquisition of Thermon
by a sponsor group led by the private equity firm Code Hennessey
and Simmons LLC for approximately $310 million. The
sponsors/management will contribute roughly $127 million in equity
of which approximately $16 million would be contributed by
Thermon's management and key employees. The outlook is stable and
the Speculative Grade Liquidity rating is a SGL-2 indicating a
good liquidity profile.
Ratings assigned:
Thermon Holdings Corporation
* Corporate family rating -- B1
Thermon Industries, Inc.
* $200 million of senior secured notes due 2017 -- B1, 57%, LGD4
The B1 CFR reflects Thermon's operational and geographic
diversity, stability of its customer base, its strong number two
position in the heat tracing industry, and good liquidity. The
ratings are, nonetheless, limited by its small revenue base
(generating $187 million of revenues for the LTM period ending
December 31, 2009), single product focus, and the doubling of debt
such that the debt to revenues ratios is over one time. Thermon
and subsidiaries have operations in 18 countries and manufacturing
facilities in five countries of which the primary one is located
in San Marcos, Texas. About two thirds of the company's revenues
are derived outside of the US. Many of its top customers have
been doing business with Thermon for more than 25 years.
The rating of the proposed notes issue at the same level as the
CFR reflects their prominent position in the capital structure.
The stable outlook reflects Moody's expectation that Thermon will
maintain its profitability and margins, and will generate free
cash flow that will over time be applied towards debt reduction.
Thermon would also need to demonstrate that despite a meaningful
restricted payment basket of $7.5 million it would not make debt
financed dividend payments to its sponsors or debt financed
acquisitions at high multiples such that the credit metrics weaken
substantially and do not provide adequate support to the ratings.
The current size of the company's revenue base at about
$200 million and the high level of goodwill and intangibles
approaching $296 million, such that tangible net worth is a
negative $174 million, substantially limits any upside to the CFR.
The CFR could come under pressure if Thermon's margins and cash
flow metrics deteriorate, the backlog decreased substantially, or
the company pays a sizeable debt financed dividend to its owners.
The SGL-2 reflects a good liquidity profile bolstered by the
expectation of stable cash flows, access to a majority of the
proposed $40 million ABL revolver with significant covenant
headroom, low capex (relative to operating cash flow) and, a
favorable debt maturity profile.
Thermon Holdings Corporation is the second largest provider of
industrial heat tracing solutions globally for refining, chemical
processing, power generation and other complex process industries.
Electric heat tracing applications account for roughly 90% of its
revenues, with steam heat tracing providing the rest. Based on
San Marcos, Texas, Thermon's sales for LTM period ended on
December 31, 2009, were approximately $187 million.
TIB FINANCIAL: To Receive $25MM in New Equity from Patriot
----------------------------------------------------------
TIB Financial Corp., the parent company of TIB Bank and Naples
Capital Advisors, disclosed last week that it has entered into a
non-binding term sheet with Patriot Financial Partners, L.P.
pursuant to which Patriot would purchase $20.0 million to
$25.0 million of newly issued shares of the Company's common stock
in a private placement. Patriot's potential investment is part of
the Company's previously announced plan to raise new capital.
The proposed investment by Patriot is conditioned on, among other
things, a maximum price per share of $0.70, a minimum of
$150 million of new capital is raised including Patriot's proposed
investment, Patriot will have received the non-objection from the
Board of Governors of the Federal Reserve with a determination
that Patriot will not be deemed a bank holding company, and a
representative of Patriot will be appointed to each of the
Company's and TIB Bank's boards of directors.
The term sheet provides that upon the Company securing firm
commitments for a majority of the $150 million of capital to be
raised, Patriot will negotiate a stock purchase agreement setting
forth the terms of the proposed investment.
"We are pleased to receive this indication of interest from
Patriot that exhibits confidence in the future of the Company,"
said Thomas J. Longe, Vice Chairman, Chief Executive Officer and
President of TIB Financial Corp. "Their interest in
participating in our growth and the execution of our business
plans in our Southwest Florida and Keys markets is an endorsement
of the underlying strength and future potential of our
organization, and should enhance our position as the leading
community banking company serving our markets. We look forward to
a representative from Patriot joining our boards and contributing
their significant financial and banking industry experience to the
strategic and operating focus of the Company. We are continuing
to pursue similar investments by other interested private equity
investors."
About Patriot Financial Partners, L.P.
Patriot Financial Partners --
http://www.patriotfinancialpartners.com/-- is a private equity
fund focused on investing in community banks, thrifts and other
financial service related companies.
About TIB Financial Corp.
Headquartered in Naples, Florida, TIB Financial Corp. (NASDAQ:
TIBB) is a bank holding company which through its wholly owned
subsidiaries, TIB Bank -- http://www.tibbank.com/-- and Naples
Capital Advisors, Inc. -- http://www.naplescapitaladvisors.com/--
offers a wide range of commercial, retail and private
banking and trust, investment management and other financial
services to businesses, individuals and families.
The Company's balance sheet as of December 31, 2009, showed
$1.705 billion in assets, $1.650 billion of debts, and
$55.5 million of stockholders' equity. At December 31, 2009, the
Company had net loans of $1.168 billion and total deposits of
$1.369 billion.
* * *
As reported in the Troubled Company Reporter on April 6, 2010,
Crowe Horwath LLP, in Fort Lauderdale, Fla., expressed substantial
doubt about the Company's ability to continue as a going concern.
The independent auditors noted that the Company incurred net
losses in 2009, 2008 and 2007, primarily from loan and investment
impairments. In addition, the Company's bank subsidiary is
operating under an informal agreement with bank regulatory
agencies that requires, among other provisions, higher regulatory
capital requirements. The Bank did not meet the higher capital
requirement as of December 31, 2009, and therefore is not in
compliance with the regulatory agreement. Failure to comply with
the regulatory agreement may result in additional regulatory
enforcement actions.
TILLIE JAHNKE: Case Summary & 10 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Tillie Jahnke
P.O. Box 6247
Santa Barbara, CA 93160
Bankruptcy Case No.: 10-11873
Chapter 11 Petition Date: April 19, 2010
Court: United States Bankruptcy Court
Central District Of California (Santa Barbara)
Judge: Robin Riblet
Debtor's Counsel: Charles Shamash, Esq.
Caceres & Shamash LLP
8200 Wilshire Blvd Ste 400
Beverly Hills, CA 90211
Tel: (310) 205-3400
Fax: (310) 878-8308
E-mail: cs@locs.com
Scheduled Assets: $7,030,650
Scheduled Debts: $2,310,474
A list of the Company's 10 largest unsecured creditors is
available for free at http://bankrupt.com/misc/cacb10-11873.pdf
The petition was signed by Tillie Jahnke.
TONGJI HEALTHCARE: Kabani & Company Raises Going Concern Doubt
--------------------------------------------------------------
Tongji Healthcare Group, Inc., filed on April 14, 2010, its annual
report on Form 10-K for the year ended December 31, 2009.
Kabani & Company, Inc., in Los Angeles, expressed substantial
doubt about the Company's ability to continue as a going concern.
The independent auditors noted that of the Company's significant
operating losses and insufficient capital.
The Company's balance sheet as of December 31, 2009, showed
$5,886,584 in assets, $5,703,685 of debts, and $182,899 of
stockholders' equity.
A full-text copy of the annual report is available for free at:
http://researcharchives.com/t/s?606b
Based in Guangxi, People's Republic of China, Tongji Healthcare
Group, Inc. was incorporated in the State of Nevada on
December 19, 2006. The Company operates Nanning Tongji Hospital,
a general hospital with 105 licensed beds in Nanning in the
province of Guangxi, PRC.
TRIBUNE CO: Court Orders Examiner to Probe Zell LBO
---------------------------------------------------
The bankruptcy judge signed an order ordering the U.S. Trustee to
appoint an examiner to investigate Samuel Zell's 2007 leveraged
buyout of Tribune Co.
According to Bill Rochelle at Bloomberg News, the examiner, whose
report is due by July 12, will investigate whether the
$13.8 billion LBO in 2007 included fraudulent transfers because
operating subsidiaries pledged their assets for new loans and
didn't receive equal value in return.
The bankruptcy judge, according to the Bloomberg report, also
charged the examiner with investigating whether the indenture
trustee for $1.2 billion in exchangeable subordinated notes
violated the automatic stay by filing suit in March against
secured lenders who financed the LBO. The lawsuit seeks the
equitable subordination of the secured debt. The defendants in
the suit include JPMorgan Chase Bank NA, Merrill Lynch Capital
Corp., Citibank NA and Morgan Stanley & Co.
The bankruptcy judge will hold a status conference on May 10 to
consider the examiner's work plan and estimated expenses.
About Tribune Co.
Headquartered in Chicago, Illinois, Tribune Co. --
http://www.tribune.com/-- is a media company, operating
businesses in publishing, interactive and broadcasting, including
ten daily newspapers and commuter tabloids, 23 television
stations, WGN America, WGN-AM and the Chicago Cubs baseball team.
The Company and 110 of its affiliates filed for Chapter 11
protection on Dec. 8, 2008 (Bankr. D. Del. Lead Case No. 08-
13141). The Debtors proposed Sidley Austion LLP as their counsel;
Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel;
Lazard Ltd. and Alvarez & Marsal North Americal LLC as financial
advisors; and Epiq Bankruptcy Solutions LLC as claims agent. As
of Dec. 8, 2008, the Debtors have $7,604,195,000 in total assets
and $12,972,541,148 in total debts.
Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy
News. The newsletter tracks the chapter 11 proceeding undertaken
by Tribune Company and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
TRIBUNE CO: Settles With Major Creditors Regarding Plan
-------------------------------------------------------
Tribune Company and its debtor affiliates informed Judge Kevin
Carey of the U.S. Bankruptcy Court for the District of Delaware
that they have reached an agreement supported by major creditors
led by JPMorgan Chase Bank, N.A., and Angelo Gordon & Co LP,
lenders under the company's prepetition senior credit facility,
and Centerbridge Partners, holder of approximately 37% of the
company's outstanding prepetition senior notes. The settlement
proposes to resolve all potential claims arising from the
company's going-private transactions in 2007.
The terms of the agreement, which also has the support of the
Official Committee of Unsecured Creditors, will be incorporated
into a plan of reorganization for the Debtors to be filed with the
Court.
"The company supports the resolution of our bankruptcy through a
plan of reorganization that implements the terms of this
agreement. The plan will allow us to resolve these cases without
the distraction, expense and delay of protracted litigation, and
is in the best interests of Tribune and all of our constituents,"
said Don Liebentritt, Tribune's Chief Legal Officer.
"We're very pleased that an agreement has been reached, and we
appreciate the support we've received from J.P. Morgan, Angelo
Gordon, Centerbridge and the Committee," said Randy Michaels,
Tribune's Chief Executive Officer. "This will enable us to file
our plan prior to next Tuesday's court hearing. It is another
significant step forward as we continue to transform our media
businesses, attract and retain talented people, and seize
opportunities to grow."
Under the Settlement Plan, Senior Loan Claims and Bridge Loan
Claims will be treated together in a single class "Parent Loan
Claims Class." Senior Noteholder Claims and other general
unsecured claims that are not in the Parent Loan Claims Class will
be treated together in a single class "Other Parent Claims Class."
The Settlement Plan provides that the distributable value of
Tribune and its subsidiaries will be allocated in this manner:
(i) 8.8% of the Distributable Enterprise Value will be
allocated for distribution to holders of claims against
Tribune;
(ii) 91.2% of the Distributable Enterprise Value will be
allocated for distributions to holders of claims against
the subsidiaries of Tribune that are guarantors of the
obligations of Tribune under the Senior Loan Agreement and
Bridge Loan Agreement.
The allocation of Distributable Enterprise Value of $6.1 billion
will be fixed for purposes of the Settlement Plan.
Holders of claims in the Other Parent Claims Class will receive
distributable cash, new debt issued by reorganized Tribune and
common stock of the reorganized Tribune such that when distributed
pro rata among the Other Parent Claims Class, the Senior
Noteholders will receive, in the aggregate, 7.4% of the
Distributable Enterprise Value. General unsecured claims against
Subsidiary Debtors that are not in the Guaranty Claims Classes
will be paid in full in cash. If the Debtors estimate that the
sum of all allowed claims will be greater than $150 million in the
aggregate on the Plan Effective Date, the distributions to the
holders of those claims will be limited to their pro rata share of
$150 million unless the Senior Lender Settlement Committee
decides, in its sole discretion, to provide additional
consideration to those creditors.
On the Effective Date, Centerbridge Credit Advisors LLC and Law
Debenture Trust Company of New York will be allowed and
reimbursed:
(i) up to $5.25 million in the aggregate on account of
reasonable and documented fees, costs and expenses of
their legal and financial advisors and the reasonable and
documented internal fees, costs and expenses of Law
Debenture; and
(ii) any additional reasonable and documented fees, costs and
expenses of their legal and financial advisors incurred in
connection with the Bankruptcy Cases that are not
inconsistent with the Settlement or confirmation of the
Settlement Plan.
Members of the Creditors' Committee will be reimbursed up to
$1.5 million on account of reasonable and documented fees, costs
and expenses of their legal and financial advisors.
On the Effective Date, the debt capital structure for the
reorganized Debtors and their affiliates will be comprised of:
(a) a new revolving credit facility to fund working capital
and letters of credit; and
(b) the New Debt in a principal amount to be determined by the
Senior Lender Settlement Committee.
The Debtors relate that, under the Plan they would emerge from
bankruptcy, significantly deleveraged, with their business units
intact and with adequate liquidity for operating and capital
needs.
A full-text copy of the Settlement Term Sheet is available for
free at http://bankrupt.com/misc/Tribune_SettlemenTermSheet.pdf
About Tribune Co.
Headquartered in Chicago, Illinois, Tribune Co. --
http://www.tribune.com/-- is a media company, operating
businesses in publishing, interactive and broadcasting, including
ten daily newspapers and commuter tabloids, 23 television
stations, WGN America, WGN-AM and the Chicago Cubs baseball team.
The Company and 110 of its affiliates filed for Chapter 11
protection on Dec. 8, 2008 (Bankr. D. Del. Lead Case No. 08-
13141). The Debtors proposed Sidley Austion LLP as their counsel;
Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel;
Lazard Ltd. and Alvarez & Marsal North Americal LLC as financial
advisors; and Epiq Bankruptcy Solutions LLC as claims agent. As
of Dec. 8, 2008, the Debtors have $7,604,195,000 in total assets
and $12,972,541,148 in total debts.
Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy
News. The newsletter tracks the chapter 11 proceeding undertaken
by Tribune Company and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
TRIBUNE CO: Wilmington Trust Denies Any Violations
--------------------------------------------------
Wilmington Trust Company, as successor indenture trustee for the
$1.2 billion exchangeable subordinated debentures due 2029,
generally referred to as the PHONES, asks the Court to deny the
Debtors' motion (i) determining that it has violated the automatic
stay, (ii) requiring it to show cause why it should not be held in
contempt of Court, and (iii) halting all proceedings with respect
to the complaint and the proposed amended complaint.
Wilmington Trust contends that contrary to the Debtors'
protestations, it has not exerted any control over estate causes
of action. Wilmington Trust argues that it asserts in the
complaint only direct, personal causes of action, requesting
relief that is entirely inter-creditor in nature, redressing
wrongs that the LBO Banks purposefully imposed upon holders of the
PHONES.
In a separate filing, Wilmington Trust seeks the Court's authority
to file its unredacted objection and Exhibit A under seal.
Wilmington Trust asserts that the Objection and Exhibit A contain
information marked as "Confidential" in accordance with the
Court's December 15, 2009 order establishing a document
depository.
Committee's Statement
The Official Committee of Unsecured Creditors tells the Court that
it concurs with the arguments made by the Debtors in their motions
and supports the requests for entry of an order finding that
Wilmington Trust has violated the automatic stay.
The Committee asserts that the attempted usurpation of estate
remedies, counsel's breach of Committee confidentiality and
counsel's misappropriation of Committee work product, warrants the
relief sought by the Debtors.
Debtors Seek to File Late Reply
The Debtors ask the Court to extend their time to file a reply to
Wilmington Trust's objection to permit them to address numerous
arguments raised in the Objection.
As previously reported, Wilmington Trust filed a complaint
against, among other defendants, JPMorgan Chase Bank, N.A. the
administrative agent for the $8.028 billion Credit Agreement,
dated May 17, 2007.
The Debtors aver that rather than attempt to demonstrate why its
Complaint for Equitable Subordination and Disallowance of Claims,
Damages, and Constructive Trust should not be dismissed, the
Objection abandons the Complaint altogether and offers a new one.
"Even casual scrutiny, however, reveals that the Amended Complaint
suffers from the same fundamental flaws as the original one, as
well as new, additional deficiencies," asserts Kate J. Stickles,
Esq., at Cole, Schotz, Meisel, Forman & Leonard, P.A., in
Wilmington, Delaware -- kstickles@coleschotz.com
Mr. Stickles maintains that the improper nature of Wilmington
Trust's actions is compounded by the fact that Wilmington Trust
has evidently filed the Complaint and the Amended Complaint as
part of a larger effort to undermine the Debtors' reorganization
process in hopes that its litigiousness will force a settlement.
About Tribune Co.
Headquartered in Chicago, Illinois, Tribune Co. --
http://www.tribune.com/-- is a media company, operating
businesses in publishing, interactive and broadcasting, including
ten daily newspapers and commuter tabloids, 23 television
stations, WGN America, WGN-AM and the Chicago Cubs baseball team.
The Company and 110 of its affiliates filed for Chapter 11
protection on Dec. 8, 2008 (Bankr. D. Del. Lead Case No. 08-
13141). The Debtors proposed Sidley Austion LLP as their counsel;
Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel;
Lazard Ltd. and Alvarez & Marsal North Americal LLC as financial
advisors; and Epiq Bankruptcy Solutions LLC as claims agent. As
of Dec. 8, 2008, the Debtors have $7,604,195,000 in total assets
and $12,972,541,148 in total debts.
Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy
News. The newsletter tracks the chapter 11 proceeding undertaken
by Tribune Company and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
UNITED WESTERN: Chief Financial Officer Retires
-----------------------------------------------
United Western Bancorp, Inc., disclosed that William D. Snider has
retired from the Company as chief financial officer and from all
other day-to-day roles with the Company and its subsidiaries. Mr.
Snider will continue to serve as a director of the Company. Mr.
Snider has been with the Company, as both a director and chief
financial officer, since December 2005. Mr. Snider's retirement
was effective April 15, 2010.
Guy A. Gibson, the Company's Chairman of the Board, expressed his
thanks for Mr. Snider's service over the past four years saying,
"We appreciate the personal commitment Bill made to the Company
and wish both him and his wife, Lisa, all the best as they enjoy
retirement."
The Company is considering both internal and external candidates
to replace Mr. Snider in the future. In the interim, the
functions formerly performed by Mr. Snider will be shared between
Benjamin C. Hirsh, the Company's Chief Accounting Officer, and
Charles Caswell, Chief Financial Officer to the Company's
principal subsidiary, United Western Bank.
About United Western Bancorp
Denver, Colo.-based United Western Bancorp, Inc. (NASDAQ: UWBK) --
http://www.uwbancorp.com/-- is a unitary thrift holding company
that operates a community-based bank. The Holding Company's UW
Trust Company subsidiary provides deposit services to
institutional customers and custodial, administrative, and escrow
services. At Dec. 31. 2009, the Company's balance sheet showed
$2.5 billion in assets and $2.3 billion in liabilities, and the
company reported a $42 million loss in 2009.
US AIRWAYS: Fougere Holcombe Seeks to Delay Case Closing
--------------------------------------------------------
Claimant Fougere Holcombe asks Judge Stephen S. Mitchell of the
U.S. Bankruptcy Court for the Eastern District of Virginia to
adjourn the hearing on the Reorganized Debtors' motion for final
accounting and final decree which hearing was set for March 16,
2010.
As previously reported, Ms. Holcombe asked the Court not to close
the Debtors' bankruptcy case and requested that distribution not
be made until her case is decided in the Court of Appeals for the
Fourth Circuit.
Ms. Holcombe had appealed to the U.S. District Court for the
Eastern District of Virginia regarding Judge Mitchell's findings
and conclusions which resulted to the disallowance of her Claim
No. 3018 for $60,475,000.
The District Court affirmed the Bankruptcy Court's order granting
the Debtors' request to disallow Ms. Holcombe's Claim No. 3018.
On March 5, 2010, the Court of Appeals entered its judgment,
according to which the previous decision in the matter was
affirmed in part, reversed in part and remanded to the District
Court for further proceedings. Ms. Holcombe alleges that the
notice of judgment specifically indicates that all parties may
undertake further steps in the appellate process within the time
limitations established by law.
Accordingly, Judge Stephen Mitchell adjourned the hearing on the
Motion to April 20, 2010, at 11:00 a.m.
About US Airways
US Airways -- http://www.usairways.com/-- along with US Airways
Shuttle and US Airways Express, operates more than 3,000 flights
per day and serves more than 190 communities in the U.S., Canada,
Mexico, Europe, the Middle East, the Caribbean, Central and South
America.
Under a Chapter 11 plan declared effective on March 31, 2003,
USAir emerged from bankruptcy with the Retirement Systems of
Alabama taking a 40% equity stake in the deleveraged carrier in
exchange for $240 million infusion of new capital.
US Airways and its subsidiaries filed another Chapter 11 petition
on September 12, 2004 (Bankr. E.D. Va. Case No. 04-13820). Brian
P. Leitch, Esq., Daniel M. Lewis, Esq., and Michael J. Canning,
Esq., at Arnold & Porter LLP, and Lawrence E. Rifken, Esq., and
Douglas M. Foley, Esq., at McGuireWoods LLP, represented the
Debtors in their restructuring efforts. The USAir II bankruptcy
plan became effective on September 27, 2005. The Debtors
completed their merger with America West on the same date. (US
Airways Bankruptcy News; Bankruptcy Creditors' Service Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).
* * *
As of December 31, 2009, US Airways had total assets of
$7,454,000,000, including $2,331,000,000 in total current assets,
against total current liabilities of $2,789,000,000 and total
noncurrent liabilities and deferred credits of $5,020,000,000,
resulting in $355,000,000 stockholders' deficit.
US Airways Group carries Moody's "Caa1" Long-Term rating, LT Corp.
family rating and probability of default rating. Outlook is
negative.
US Airways Group carries Standard & Poor's "B-" LT Foreign Issuer
Credit rating and LT Local Issuer credit rating. Outlook is also
negative.
US Airways Group carries Fitch's "CCC" LT Issuer default rating
and "C" Senior unsecured debt rating. Outlook is also negative.
US AIRWAYS: Looks to Reduce Auction Rate Security Exposure
----------------------------------------------------------
US Airways Group, Inc., delivered to the U.S. Securities and
Exchange Commission, on April 5, 2010, a report updating its
financial and operational outlook for 2010:
* 2010 Capacity Guidance -- For 2010, total system capacity is
expected to be up slightly. Mainline is forecast to be up
approximately one percent, with domestic down approximately
two percent and international up approximately nine percent.
Express is expected to be down approximately two to three
percent.
* Cash -- As of December 31, 2009, the Company had approximately
$2.0 billion in total cash and investments, of which
$0.5 billion was restricted. In addition, as of December 31,
2009, the Company's Auction Rate Securities had a book value of
$203 million ($347 million par value).
During the first quarter, the Company monetized approximately
$131 million (book value) of its auction rate securities. The
Company continues to look at other opportunities to reduce its
auction rate security exposure. While these securities are
held as investments in non-current marketable securities on
the Company's balance sheet, they are included in our
unrestricted cash calculation. The Company expects to end the
first quarter with approximately $2.0 billion in total cash and
investments of which $0.45 billion is restricted.
* Fuel -- For the first quarter 2010, the Company anticipates
paying between $2.15 and $2.20 per gallon of mainline jet fuel
(including taxes). Forecasted volume and fuel prices are
provided in the table below.
* Profit Sharing/CASM -- Profit sharing equals 10% of pre-tax
earnings excluding special items up to a 10% pre-tax margin
and 15% above the 10% margin. Profit sharing is excluded in
the CASM guidance given below.
First quarter mainline and Express CASM guidance (excluding
fuel, special items & profit sharing) increased by
approximately one percentage point primarily due to the winter
storm related flight cancellations that occurred throughout
the month of February. During that month, the Company
cancelled approximately 7.1 percent of its flights, which was
the highest cancellation rate since the merger of US Airways
and America West in 2005.
* Cargo/Other Revenue -- cargo revenue, ticket change fees,
excess/overweight baggage fees, first and second bag fees,
contract services, simulator rental, airport clubs, Materials
Services Company (MSC), and inflight service revenues. The
Company's a la carte revenue initiatives are expected to
generate in excess of $500 million in revenue in 2010.
* Taxes/NOL -- As of December 31, 2009, net operating losses
(NOL) available for use by the Company is approximately
$2.1 billion, all of which is expected to be available for use
in 2010. The Company's net deferred tax asset, which includes
the NOL, is subject to a full valuation allowance. As of
December 31, 2009, the valuation allowances associated with
Federal and state NOL are $546 million and $77 million,
respectively. In accordance with generally accepted
accounting principles, future utilization of the NOL will
result in a corresponding decrease in the valuation allowance
and offset the Company's tax provision dollar for dollar. As
a result, income tax benefits are not recognized in the
Company's statement of operations.
To the extent profitable, in 2010, the Company will use NOL to
reduce Federal and state taxable income. The Company also may be
subject to AMT liability and obligated to record and pay state
income tax related to certain states where NOL may be limited or
not available to be used.
A full-text copy of the investor relations update is available for
free at http://researcharchives.com/t/s?5f5a
About US Airways
US Airways -- http://www.usairways.com/-- along with US Airways
Shuttle and US Airways Express, operates more than 3,000 flights
per day and serves more than 190 communities in the U.S., Canada,
Mexico, Europe, the Middle East, the Caribbean, Central and South
America.
Under a Chapter 11 plan declared effective on March 31, 2003,
USAir emerged from bankruptcy with the Retirement Systems of
Alabama taking a 40% equity stake in the deleveraged carrier in
exchange for $240 million infusion of new capital.
US Airways and its subsidiaries filed another Chapter 11 petition
on September 12, 2004 (Bankr. E.D. Va. Case No. 04-13820). Brian
P. Leitch, Esq., Daniel M. Lewis, Esq., and Michael J. Canning,
Esq., at Arnold & Porter LLP, and Lawrence E. Rifken, Esq., and
Douglas M. Foley, Esq., at McGuireWoods LLP, represented the
Debtors in their restructuring efforts. The USAir II bankruptcy
plan became effective on September 27, 2005. The Debtors
completed their merger with America West on the same date. (US
Airways Bankruptcy News; Bankruptcy Creditors' Service Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).
* * *
As of December 31, 2009, US Airways had total assets of
$7,454,000,000, including $2,331,000,000 in total current assets,
against total current liabilities of $2,789,000,000 and total
noncurrent liabilities and deferred credits of $5,020,000,000,
resulting in $355,000,000 stockholders' deficit.
US Airways Group carries Moody's "Caa1" Long-Term rating, LT Corp.
family rating and probability of default rating. Outlook is
negative.
US Airways Group carries Standard & Poor's "B-" LT Foreign Issuer
Credit rating and LT Local Issuer credit rating. Outlook is also
negative.
US Airways Group carries Fitch's "CCC" LT Issuer default rating
and "C" Senior unsecured debt rating. Outlook is also negative.
US AIRWAYS: Resolves Claims Dispute With Ronald Katz
----------------------------------------------------
Ronald A. Katz Technology Licensing, LP, filed proof of claims
against the Debtors in 2005:
Claim No. Claim Amount
--------- ------------
4193 $3,749,397
4194 3,249,930
4195 3,749,397
4196 3,249,930
5884 4,366,793
5885 4,366,793
The Debtors filed an omnibus objection to claims including Ronald
A. Katz's proofs of claims.
Ronald A. Katz filed responses to the omnibus objection.
Pursuant to the Plan, the Reorganized Debtors are authorized to
resolve claims by stipulation without further Court order.
Accordingly, the Reorganized Debtors and the Katz have agreed
that:
* Claim No. 4194 is reduced and allowed, and is no longer
subject to revision or amendment, as a Class USAI-9 (General
Unsecured Claim) for $3,280,000, which is in full and
final satisfaction of all Claims;
* Claim No. 5884 is reduced and allowed, and is no longer
subject to revision or amendment, as an Administrative Claim
for $500,000, payment of which will be in full and final
satisfaction of all Administrative Claims against the
Reorganized Debtors; and
* Claim Nos. 4193, 4195 and 5885 are withdrawn with prejudice
to re-filing or allowance.
About US Airways
US Airways -- http://www.usairways.com/-- along with US Airways
Shuttle and US Airways Express, operates more than 3,000 flights
per day and serves more than 190 communities in the U.S., Canada,
Mexico, Europe, the Middle East, the Caribbean, Central and South
America.
Under a Chapter 11 plan declared effective on March 31, 2003,
USAir emerged from bankruptcy with the Retirement Systems of
Alabama taking a 40% equity stake in the deleveraged carrier in
exchange for $240 million infusion of new capital.
US Airways and its subsidiaries filed another Chapter 11 petition
on September 12, 2004 (Bankr. E.D. Va. Case No. 04-13820). Brian
P. Leitch, Esq., Daniel M. Lewis, Esq., and Michael J. Canning,
Esq., at Arnold & Porter LLP, and Lawrence E. Rifken, Esq., and
Douglas M. Foley, Esq., at McGuireWoods LLP, represented the
Debtors in their restructuring efforts. The USAir II bankruptcy
plan became effective on September 27, 2005. The Debtors
completed their merger with America West on the same date. (US
Airways Bankruptcy News; Bankruptcy Creditors' Service Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).
* * *
As of December 31, 2009, US Airways had total assets of
$7,454,000,000, including $2,331,000,000 in total current assets,
against total current liabilities of $2,789,000,000 and total
noncurrent liabilities and deferred credits of $5,020,000,000,
resulting in $355,000,000 stockholders' deficit.
US Airways Group carries Moody's "Caa1" Long-Term rating, LT Corp.
family rating and probability of default rating. Outlook is
negative.
US Airways Group carries Standard & Poor's "B-" LT Foreign Issuer
Credit rating and LT Local Issuer credit rating. Outlook is also
negative.
US Airways Group carries Fitch's "CCC" LT Issuer default rating
and "C" Senior unsecured debt rating. Outlook is also negative.
VALLEY FORGE: Net Losses Cue Going Concern Doubt
------------------------------------------------
Valley Forge Composite Technologies, Inc., filed on April 14,
2010, its annual report on Form 10-K for the year ended December
31, 2009.
R.R. Hawkins & Associates International, PSC, in Los Angeles,
expressed substantial doubt about the Company's ability to
continue as a going concern. The independent auditors noted that
the Company has incurred net losses since inception.
The Company reported a net loss of $2,038,623 on $3,202,815 of
revenue for 2009, compared with a net loss of $1,848,755 on
$132,000 of revenue for 2008.
The Company's balance sheet as of December 31, 2009, showed
$2,215,039 in assets and $2,792,668 of debts, for a stockholders'
deficit of $577,629.
A full-text copy of the annual report is available for free at:
http://researcharchives.com/t/s?606a
Covington, Ky.-based Valley Forge Composite Technologies, Inc.,
produces various momentum wheels and other mechanical devices for
special aerospace projects.
VALLEY MORTGAGE: Voluntary Chapter 11 Case Summary
--------------------------------------------------
Debtor: Valley Mortgage, Inc.
dba Valley Investments, Inc.
Blue Mountain Village, LLP
CLP, LLC
New Liberty Homes, Inc
S & P Properties, LLC
The Meadows, LLC
200 Grand Avenue
Suite 200
Grand Junction, CO 81501
Bankruptcy Case No.: 10-19101
Chapter 11 Petition Date: April 19, 2010
Court: United States Bankruptcy Court
District of Colorado (Denver)
Judge: Sidney B. Brooks
Debtor's Counsel: John C. Smiley, Esq.
Lindquist & Vennum PLLP
600 17th St.
Ste. 1800-South
Denver, CO 80202
Tel: (303) 573-5900
Fax: (303) 573-1956
E-mail: jsmiley@lindquist.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $10,000,001 to $50,000,000
The Debtor did not file its list of largest unsecured creditors
when it filed its petition.
The petition was signed by Kirk Rider.
VERINT SYSTEMS: S&P Retains CreditWatch Developing on Ratings
-------------------------------------------------------------
Standard & Poor's Ratings Services said that its ratings on
Melville N.Y.-based software provider Verint Systems Inc. remain
on CreditWatch with developing implications, which indicates that
S&P could raise or lower the ratings.
S&P placed Verint's ratings on CreditWatch on Jan. 29, 2010, due
to Standard & Poor's concerns that the company's extended period
of non-compliance with SEC financial reporting requirements could
result in administrative proceedings by the SEC, including the
possible revocation of its registration statement. Additionally,
Verint's inability to meet financial reporting requirements
contained in its senior secured credit would constitute an event
of default under the credit facility.
Since S&P's initial CreditWatch listing, Verint has filed 10k's
containing audited financial information through the year ended
Jan. 31, 2009. The company has also released limited preliminary
financial information for the year ended Jan. 31, 2010, which
indicates improvement in credit metrics over the past two years.
However, the company remains delinquent on required SEC quarterly
and annual filings for the year ended Jan. 31, 2010, and has not
met credit agreement financial filing requirements.
"In resolving the CreditWatch, S&P will continue to monitor
Verint's progress in meeting the financial reporting requirements
contained in its senior secured credit facility," said Standard &
Poor's credit analyst Susan Madison. If Verint is able to provide
audited financial statements to meet its credit facility filing
requirements in the very near term, and the audited numbers are in
line with recently released preliminary financial results, S&P
would likely raise the corporate credit rating to 'B+' with a
stable outlook from 'B'.
"On the other hand," added Ms. Madison, "as S&P get closer to
May 1, 2010, the date by which audited financial statements for
the year ended Jan. 31, 2010, are required by the credit
agreement, and Verint appears unlikely to meet or extend this
deadline, S&P could lower the rating by one or more notches."
VIRGIN METALS: Issues First Default Status Report
-------------------------------------------------
Virgin Metals Inc. was granted a Management Cease Trade Order by
its principal regulator, the Ontario Securities Commission, on
April 1, 2010.
The Company has issued its first biweekly status report as
required by National Policy 12-203 following its March 30, 2010
announcement that it would not be filing its audited annual
financial statements for the year ended December 31, 2009,
management's discussion and analysis of audited annual financial
statements, and CEO and CFO certificates for audited annual
financial statements before the prescribed deadline of March 31,
2010.
The Company anticipates that it will be able to return to
compliance by April 30, 2010.
The Company reports that since the Default Notice and the granting
of the MCTO: (i) there is no material change to the information
contained in the Default Notice that has not been generally
disclosed; (ii) there has been no failure by the Company in
fulfilling its stated intentions with respect to satisfying the
provisions of the alternative information guidelines set out in NP
12-203; (iii) there has not been any other specified default by
the Company under NP 12-203; and (iv) there is no other material
information concerning the affairs of the Company that has not
been generally disclosed since the Default Notice was issued.
The Company will continue to satisfy the provisions of the
alternative information guidelines under NP 12-203 by issuing bi-
weekly default status reports in the form of news releases as long
as it remains in default of the filing requirements.
About Virgin Metals
Virgin Metals is a junior exploration and development company; its
projects include two copper-molybdenum porphyry properties in
Sonora, northern Mexico. One of these, Los Verdes, has been the
subject of a pre-feasibility study and is expected to evolve
rapidly towards production while the other, Cuatro Hermanos, has
been the focus of an intense exploration effort.
VERMILLION INC: Professional Fees Reach $3.8 Million
----------------------------------------------------
Vermillion, Inc. disclosed that the United States Bankruptcy Court
for the District of Delaware approved the final fee application in
the case. The total professional fees and expenses in the case
were approximately $3.8 million of which approximately $2.7
million remained unpaid as of March 31, 2010. Vermillion's
consolidated cash and cash equivalents balances as of March 31,
2010 were approximately $37.7 million. Vermillion announced on
April 16, 2010 that an aggregate of $5 million is to be paid out
of that amount as the cash portion of a management incentive plan
approved by the United States Bankruptcy Court for the District of
Delaware.
Vermillion also announced that significant progress is being made
on the commercialization and reimbursement efforts for its
OVA1(TM) Test and that initial orders have been received. "We
recently announced the favorable coverage decision from Highmark
Medicare Services. We will be working with Premiere Source
Diagnostics, a group with expertise in procuring reimbursement for
high-value diagnostics, in an effort to fully capture the value
proposition of OVA1," said Gail Page, Chief Executive Officer of
Vermillion. "Additionally, we continue to build our sales and
marketing team which is now includes 8 full time employees. We are
well on our way to assembling a small but effective group of
seasoned sales and marketing professionals."
Vermillion also announced that it expects to be current on its
periodic reports required by the Securities and Exchange Act of
1934 by the middle of May 2010.
Vermillion also announced that Dr. Zhen Zhang, Associate Professor
at Johns Hopkins University School of Medicine, will be giving an
oral presentation "OVA1: An in vitro diagnostic multivariate index
assay for preoperative assessment of ovarian tumors" today, April
20, at the 101st Annual Meeting of the American Association for
Cancer Research in Washington DC. Vermillion will also be
attending the 58th Annual Clinical Meeting of the American
Congress of Obstetricians and Gynecologists to be held in San
Francisco from May 15th through the 19th. Dr. Karen Nishida from
Gynecologic Oncology Associates, Inc., Miramar, FL., will be
speaking about the OVA1 test to aid in the detection of malignant
versus benign ovarian tumors.
About Vermillion
Vermillion, Inc. -- http://www.vermillion.com/-- is dedicated to
the discovery, development and commercialization of novel high-
value diagnostic tests that help physicians diagnose, treat and
improve outcomes for patients. Vermillion, along with its
prestigious scientific collaborators, has diagnostic programs in
oncology, hematology, cardiology and women's health. Vermillion
is based in Fremont, California.
The Company filed for Chapter 11 on March 30, 2009 (Bankr. D. Del.
Case No. 09-11091). Vermillion's legal advisor in connection with
its successful reorganization efforts is Paul, Hastings, Janofsky
& Walker LLP. At September 30, 2008, the Debtor had $7,150,000 in
total assets and $32,015,000 in total liabilities.
In January 2010, Vermillion successfully emerged from protection
with all creditors receiving 100 percent of allowed claims and
with the common stock being fully restated.
VISINET LLC: Court Dismisses Chapter 11 Bankruptcy Case
-------------------------------------------------------
JoAnne Young at Lincoln Journal Star reports that a federal court
dismissed the bankruptcy case of Visinet Inc. after the Department
of Health and Human Services opposed the company's request to
extend the filing of its list of creditors.
Based in Omaha, Nebraska, Visinet Inc. filed for Chapter 11
protection on April 8, 2010 (Bankr. D. Ne. Case No.10-81044).
Angela L. Burmeister, Esq., at Berkshire & Burmeister, represents
the Debtor. The Debtor listed both assets and debts of between
$1 million and $10 million.
VOLT INFORMATION: Fitch Affirms 'BB' Issuer Default Rating
----------------------------------------------------------
Fitch Ratings has affirmed Volt Information Sciences, Inc.
ratings:
-- Issuer Default Rating at 'BB';
-- $42 million senior unsecured facility due February 2013 at
'BB';
-- Secured 8.2% $12 million term loan at 'BBB-'.
The Rating Outlook for all ratings remains Negative.
This rating has been withdrawn, as the entity is no longer an
issuer:
Volt Delta Resources, Inc.
-- IDR 'BB'.
The Negative Outlook was assigned in March 2009 due to the
uncertainties posed by the then unknown depth and breadth of the
recession and its effect on Volt's primary line of business -- the
staffing segment. In the first two fiscal quarters of 2009, the
company's consolidated net sales declined 20% relative to the
prior year. In response, Volt spent considerable effort to
streamline its overhead costs and consolidate certain operations.
At the same time, the variable cost components of its staffing
business mitigate the effect on Volt.
Volt has delayed filing its financial statements with the
Securities and Exchange Commission since the second quarter of
2009 while it reviews certain contracts going back to 2002. In
preliminary findings Volt has identified previously recognized
revenue in the amount of approximately $50 million that may need
to be recognized after the second quarter of 2009. The revenues
and related costs are associated with multi-year customer
contracts with multiple deliverables. The company has obtained
agreements from its lenders extending the time to deliver required
audited financial statements to May 10, 2010. The terms of the
extension require the company to maintain consolidated
unrestricted cash in excess of consolidated borrowings. Fitch is
cognizant that the potential restatement reflects the timing of
the recognition of revenues and costs and does not have an impact
on cash.
Fitch currently believes the company's public statements regarding
the potential revenue impact and the level of unrestricted cash
and debt, as well as certain data presented to Fitch, are adequate
to evaluate the company's current performance. An important
factor mitigating concerns regarding Volt's accounting issues and
exposure to the economy is the company's net strong cash position
as of Jan. 31, 2010 when it had approximately $136 million of
unrestricted cash and approximately $84 million of total
borrowings.
The effect of the economy on the company's performance, in Fitch's
view, appears to be stabilizing. In terms of potential rating
action triggers, a downgrade could occur if the company's
operations started burning cash (contrary to its historical
pattern during recessions) and, conversely, the Outlook could
return to Stable if revenue trends were to stabilize and return to
growth.
Volt's existing ratings reflect its ability to historically
maintain adequate liquidity and relatively solid coverage and
leverage metrics through up and down cycles in the economy. In
addition, the company has moderately diversified its sources of
operating income away from the staffing services segment, largely
through acquisitions in the computer systems area.
Leverage, as measured by total debt to EBITDA, was 2.9 times for
the last 12 months ending May 3, 2009. In addition to its cash
balances, liquidity is provided by the company's $150 million
accounts receivable securitization program that expires in 2013.
The securitization program had $50 million outstanding as of
May 3, 2009. Additional liquidity is provided by Volt's senior
unsecured $42 million revolving facility ($11 million outstanding
on May 3, 2009) which expires in February 2013. The revolving
credit facility is guaranteed by eight original subsidiaries of
the company as well as three Volt Delta Resources subsidiaries.
The main financial covenants include a minimum interest coverage
ratio of 4.0x and a maximum debt to EBITDA ratio of 3.0x.
WASHINGTON MUTUAL: Court Approves Benefit Plan Settlements
----------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware approved
the settlements reached by Washington Mutual, Inc., and its
debtor-affiliates and certain parties for the resolution of claims
of these participants to Washington Mutual Inc.'s Senior Executive
Life Insurance Plan and Senior Supplemental Executive Retirement
Plan, as well as the release of cash to WaMu under the SELIP
policies:
(1) a multi-party settlement agreement dated March 16, 2010,
by and among Washington Mutual, Inc., and 10 participants
in certain employee benefit plans;
(2) a settlement agreement reached on March 16, 2010, by and
between WaMu and Participant A; and
(3) a settlement agreement dated March 16, 2010, by and
between WaMu and Participant B.
With the Court's consent, the Debtors filed with the Court
redacted copies of the Settlements.
As previously reported, the Settlement Agreements provide for the
parties' exchange of mutual releases and the withdrawal of the
Participants' proofs of claim arising from the SSERP and SELIP
Policies. Specifically, under the Multiparty Settlement
Agreement, WaMu and the Participants agree that:
(a) the Participants will surrender the Policies;
(b) WaMu will receive the Company's cash value from the
Policies;
(c) the Participants will receive their Cash Value;
(d) WaMu will provide each of the Participants the option to
(i) receive a cash payment in an amount equal to the
premium for a replacement life insurance policy that
would provide the same death benefit to the Participant as
under their current Policy or Policies; or (ii) have WaMu
use a portion of the cash payment to purchase the Policy
or a policy with a lesser death benefit on behalf of the
Participant; and
(e) WaMu will provide each of the Participants the option to
receive cash in settlement of their SSERP claim or have
WaMu use the net settlement funds to purchase an
annuity on their behalf.
About Washington Mutual
Based in Seattle, Washington, Washington Mutual Inc. --
http://www.wamu.com/-- is a holding company for Washington Mutual
Bank as well as numerous non-bank subsidiaries. The Company
operates in four segments: the Retail Banking Group, which
operates a retail bank network of 2,257 stores in California,
Florida, Texas, New York, Washington, Illinois, Oregon, New
Jersey, Georgia, Arizona, Colorado, Nevada, Utah, Idaho and
Connecticut; the Card Services Group, which operates a nationwide
credit card lending business; the Commercial Group, which conducts
a multi-family and commercial real estate lending business in
selected markets, and the Home Loans Group, which engages in
nationwide single-family residential real estate lending,
servicing and capital markets activities.
Washington Mutual Bank was taken over September 25 by U.S.
government regulators. The next day, WaMu and its affiliate, WMI
Investment Corp., filed separate petitions for Chapter 11 relief
(Bankr. D. Del. 08-12229 and 08-12228, respectively). Wamu owns
100% of the equity in WMI Investment. Weil Gotshal & Manges
represents the Debtors as counsel. When WaMu filed for protection
from its creditors, it listed assets of $32,896,605,516 and debts
of $8,167,022,695. WMI Investment listed assets of $500,000,000
to $1,000,000,000 with zero debts.
Peter Calamari, Esq., and David Elsberg, Esq., at Quinn Emanuel
Urquhart Oliver & Hedges, LLP, served as legal counsel to WMI with
responsibility for the litigation. Brian Rosen, Esq., at Weil,
Gotshal & Manges LLP served as legal counsel to WMI with
responsibility for the chapter 11 case.
Bankruptcy Creditors' Service Inc. publishes Washington Mutual
Bankruptcy News. The newsletter tracks the Chapter 11 proceedings
of Washington Mutual Inc. (http://bankrupt.com/newsstand/or
215/945-7000).
WASHINGTON MUTUAL: Equity Panel Can Hire Ashby & Geddes as Counsel
------------------------------------------------------------------
The Official Committee of Equity Security Holders in Washington
Mutual, Inc.'s Chapter 11 cases sought and obtained authority from
the U.S. Bankruptcy Court for the District of Delaware to retain
Ashby & Geddes, P.A., as their Delaware counsel, nunc pro tunc to
March 4, 2010.
Ashby & Geddes has the requisite expertise on matters that are
likely to arise in the Debtors' Chapter cases, including, but not
limited to, handling bankruptcy and debt reorganization problems
and procedures arising in the reorganization framework, Equity
Committee Chairman Michael Willingham related.
As Delaware counsel, Ashby & Geddes will be required to render
legal services relating to the administration and reorganization
of the Debtors' Chapter 11 cases and to the issues that may arise
out of the Debtors' businesses including, but not limited, to:
(1) providing legal advice regarding the rules and practices
of the Court applicable to the Equity Committee's powers
and duties under Section 1102 of the Bankruptcy Code;
(2) providing legal advice regarding any disclosure statement
and plan filed in the Debtors' cases and with respect to
the process for approving or disapproving a disclosure
statement and confirming or denying confirmation of a
plan;
(3) preparing and reviewing applications, motions, complaints,
answers, orders, agreements and other legal papers filed
on behalf of the Equity Committee for compliance with the
rules and practices of the Court;
(4) appearing in Court to present necessary motions,
applications and pleadings and otherwise protecting the
interests of the Equity Committee and equity security
holders of the Debtors; and
(5) performing other legal services for the Equity Committee
as may be necessary and proper in these Chapter 11 cases.
While rendering legal services for the Equity Committee, Ashby &
Geddes will coordinate with Venable LLP, as the Equity
Committee's lead counsel, to avoid any duplication of effort and
expense.
Ashby & Geddes' professionals will be paid in accordance with
these hourly rates:
Professional Position Hourly Rate
------------ -------- -----------
William P. Bowden Member $590
Gregory A. Taylor Member $425
Benjamin Keenan Associate $295
Stacy L. Newman Associate $245
Ashby & Geddes will also be reimbursed for their reasonable out-
of-pocket expenses.
William P. Bowden, Esq., a member at Ashby & Geddes, assured the
Court that his firm is a "disinterested person" within the meaning
of Sections 101(14) and 328 of the Bankruptcy Code.
Before the Court approval, William P. Bowden, Esq., at Ashby &
Geddes, P.A., in Wilmington, Delaware, -- wbowden@ashby-geddes.com
-- noted that the Official Committee of Equity Security Holders
had modified its proposed order submitted to the Court. The
Modified Proposed Order incorporated modifications to the
indemnification provisions, as raised by the Office of the U.S.
Trustee. Ashby & Geddes currently represents JP Morgan Chase Bank
in an action unrelated to the Debtors' bankruptcy cases and
pending in the U.S. District Court for the District of Delaware
captioned The Chase Manhattan Bank v. Iridium Africa Corporation,
according to Mr. Bowden.
About Washington Mutual
Based in Seattle, Washington, Washington Mutual Inc. --
http://www.wamu.com/-- is a holding company for Washington Mutual
Bank as well as numerous non-bank subsidiaries. The Company
operates in four segments: the Retail Banking Group, which
operates a retail bank network of 2,257 stores in California,
Florida, Texas, New York, Washington, Illinois, Oregon, New
Jersey, Georgia, Arizona, Colorado, Nevada, Utah, Idaho and
Connecticut; the Card Services Group, which operates a nationwide
credit card lending business; the Commercial Group, which conducts
a multi-family and commercial real estate lending business in
selected markets, and the Home Loans Group, which engages in
nationwide single-family residential real estate lending,
servicing and capital markets activities.
Washington Mutual Bank was taken over September 25 by U.S.
government regulators. The next day, WaMu and its affiliate, WMI
Investment Corp., filed separate petitions for Chapter 11 relief
(Bankr. D. Del. 08-12229 and 08-12228, respectively). Wamu owns
100% of the equity in WMI Investment. Weil Gotshal & Manges
represents the Debtors as counsel. When WaMu filed for protection
from its creditors, it listed assets of $32,896,605,516 and debts
of $8,167,022,695. WMI Investment listed assets of $500,000,000
to $1,000,000,000 with zero debts.
Peter Calamari, Esq., and David Elsberg, Esq., at Quinn Emanuel
Urquhart Oliver & Hedges, LLP, served as legal counsel to WMI with
responsibility for the litigation. Brian Rosen, Esq., at Weil,
Gotshal & Manges LLP served as legal counsel to WMI with
responsibility for the chapter 11 case.
Bankruptcy Creditors' Service Inc. publishes Washington Mutual
Bankruptcy News. The newsletter tracks the Chapter 11 proceedings
of Washington Mutual Inc. (http://bankrupt.com/newsstand/or
215/945-7000).
WASHINGTON MUTUAL: Court Allows Equity Panel to Hire PSJC
---------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware authorized
the Official Committee of Equity Security Holders in Washington
Mutual, Inc.'s Chapter 11 cases to retain Peter J. Solomon Company
as its financial advisor and consulting expert, nunc pro tunc to
February 12, 2010.
As previously reported, as financial advisor to the Equity
Committee, PSJC is expected to:
(1) advise and assist the Equity Committee in assessing the
operating and financial performance of, and strategies
for the Debtors as of or about the Petition Date,
including reviewing and analyzing business plans and
financial projections, and testing assumptions and
comparing those assumptions to historical Company and
industry trends;
(2) advise and assist the Equity Committee in evaluating the
Debtors and their assets and liabilities as of the
Petition Date, including valuations proposed by any
interested party;
(3) advise and assist the Equity Committee in evaluating the
claims made in the Chapter 11 cases, as well as evaluating
tax assets and subsidiary or affiliate values;
(4) advise and assist the Equity Committee in developing a
solvency analysis of the Company as of the Petition Date;
(5) advise and assist the Equity Committee in analyzing the
Debtors' claims regarding seizure of their banking
affiliates;
(6) advise and assist the Equity Committee and Venable LLP as
the Debtors' counsel in the course of any negotiations
with the Company and its creditors and constituencies,
including participation in meetings and telephone or video
conferences;
(7) if requested, provide testimony with respect to the
financial advisory and consulting expert services,
specifically including testimony with respect to valuation
issues or in connection with the Equity Committee's
prosecution of claims; and
(8) render other financial advisory and consulting expert
services as may be agreed upon by PJSC, the Equity
Committee and Venable.
The Equity Committee propose to entitle PJSC to a $175,000
advisory fee per month, subject to certain adjustment mechanisms.
PSJC will also be reimbursed for necessary out-of-pocket expenses
that it may incur.
The Equity Committee and PJSC acknowledge that during the course
of the Debtors' Chapter 11 cases, there may be months in which
the level of services to be provided by PJSC is "materially
diminished or is in excess of the level contemplated currently by
the parties." Accordingly, the parties agree that the Monthly
Fee "may be adjusted downward" based on a mutually agreed upon
amount during those months. The Equity Committee may also
recommend to the Court the payment of an additional fee to PJSC.
Any adjustment will be reviewed by the Equity Committee and PJSC
each month.
The Debtors will indemnify and hold harmless PJSC and its
affiliates from and against any losses, claims or proceedings (i)
related to or arising out of oral or written information provided
by the Debtors, or other action or failure to act by the Debtors,
or (ii) otherwise related to or arising out of the parties'
Engagement Agreement or any transaction or conduct in connection
with the Equity Committee's retention of PJSC.
The Debtors will have no obligation to indemnify PJSC or provide
contribution or reimbursement to PJSC for:
* any claim or expense that is judicially determined to have
arisen from PJSC's bad faith, self-dealing, breach of
fiduciary duty, gross negligence or willful misconduct;
* a contractual dispute in which the Debtors allege the breach
of PJSC's contractual obligations unless the Court
determines that indemnification, contribution or
reimbursement would be permissible; or
* any claim or expense that is settled prior to a judicial
determination to be a claim or expense for which PJSC should
not receive indemnity under the terms of the Engagement
Agreement.
Anders J. Maxwell, a managing director at PJSC, assured the Court
that his firm is eligible to represent the Equity Committee under
Section 1103(b) of the Bankruptcy Code, as it does not represent
any other entity having an adverse interest in connection with
the Debtors' cases. He contends that PJSC is a "disinterested
person" as the term under defined in Section 101(14) of the
Bankruptcy Code.
About Washington Mutual
Based in Seattle, Washington, Washington Mutual Inc. --
http://www.wamu.com/-- is a holding company for Washington Mutual
Bank as well as numerous non-bank subsidiaries. The Company
operates in four segments: the Retail Banking Group, which
operates a retail bank network of 2,257 stores in California,
Florida, Texas, New York, Washington, Illinois, Oregon, New
Jersey, Georgia, Arizona, Colorado, Nevada, Utah, Idaho and
Connecticut; the Card Services Group, which operates a nationwide
credit card lending business; the Commercial Group, which conducts
a multi-family and commercial real estate lending business in
selected markets, and the Home Loans Group, which engages in
nationwide single-family residential real estate lending,
servicing and capital markets activities.
Washington Mutual Bank was taken over September 25 by U.S.
government regulators. The next day, WaMu and its affiliate, WMI
Investment Corp., filed separate petitions for Chapter 11 relief
(Bankr. D. Del. 08-12229 and 08-12228, respectively). Wamu owns
100% of the equity in WMI Investment. Weil Gotshal & Manges
represents the Debtors as counsel. When WaMu filed for protection
from its creditors, it listed assets of $32,896,605,516 and debts
of $8,167,022,695. WMI Investment listed assets of $500,000,000
to $1,000,000,000 with zero debts.
Peter Calamari, Esq., and David Elsberg, Esq., at Quinn Emanuel
Urquhart Oliver & Hedges, LLP, served as legal counsel to WMI with
responsibility for the litigation. Brian Rosen, Esq., at Weil,
Gotshal & Manges LLP served as legal counsel to WMI with
responsibility for the chapter 11 case.
Bankruptcy Creditors' Service Inc. publishes Washington Mutual
Bankruptcy News. The newsletter tracks the Chapter 11 proceedings
of Washington Mutual Inc. (http://bankrupt.com/newsstand/or
215/945-7000).
XERIUM TECHNOLOGIES: Proposes Cadwalader as Lead Counsel
--------------------------------------------------------
Xerium Technologies Inc. and its units ask the Court to allow them
to employ Cadwalader, Wickersham & Taft LLP as their lead counsel,
nunc pro tunc to the Petition Date.
In August 2009, Cadwalader was retained by Xerium to provide
bankruptcy and restructuring-related advice to the Company, with
respect to various restructuring alternatives including potential
chapter 11 filings. In that regard, Cadwalader assisted the
Debtors in the development, negotiation, and documentation of the
proposed Prepackaged Joint Chapter Plan of Reorganization, the
preparation of the Disclosure Statement, the solicitation of votes
on the Plan, and the preparation of the Chapter 11 cases, Stephen
R. Light, Chairman and Chief Executive Officer at Xerium, relates.
As part of the Debtors' restructuring efforts, Cadwalader has
successfully negotiated covenant default waivers under the
Company's prepetition credit facility, documentation terminating
the Company's swap agreements, and successfully negotiated the
terms of the Debtors' proposed debtor-in-possession financing, the
term loan and exit facilities, and other agreements and documents
to be entered into of otherwise to become effective on the
effective date of the Plan, says Mr. Light.
In the course of its prepetition representation of the Debtors
with respect to the restructuring of the Debtors' financial
obligations and their entry into Chapter 11 reorganization,
Cadwalader has become familiar with the Debtors' businesses,
financial affairs, and capital structure.
Accordingly, CWT has the necessary background to deal effectively
with many of the potential legal issues and problems that may
arise in the context of the Chapter 11 cases, Mr. Light avers.
As the Debtors' lead counsel, Cadwalader will perform these
services:
(a) advising the Debtors of their lights, powers, and duties
as debtors and debtors in possession in the continued
management and operation of their businesses and
properties;
(b) preparing, on behalf of the Debtors, all necessary and
appropriate applications, motions, draft, pleadings,
notices, schedules, and other documents, and review all
financial and other reports to be filed in the Debtors'
Chapter 11 cases;
(c) advising the Debtors concerning, and prepare responses to,
applications, motions, other pleadings, notices, and other
papers;
(d) advising the Debtors concerning actions that they might
take to collect and recover property for the benefit of
their estates;
(e) reviewing the nature and validity of any liens asserted
against the Debtors' property and advise them concerning
the enforceability of those liens;
(f) advising and assisting the Debtors in connection with any
potential asset dispositions;
(g) advising the Debtors concerning executory contracts and
unexpired lease assumptions, assignments, and rejections;
(h) assisting the Debtors in reviewing, estimating, and
resolving claims asserted against their estates;
(i) commencing and conducting any and all litigation necessary
or appropriate to assert rights held by the Debtors,
protect assets of their estates, or otherwise further the
goal of completing a successful reorganization;
(j) advising and assisting the Debtors in connection with the
solicitation and confirmation of the plan of
reorganization and related documents;
(k) advising and assisting the Debtors with the preparation
and filing of various documents required for the Debtors'
compliance with U.S securities laws; and
(l) performing all other necessary legal services in
connection with the Debtors' cases and other general
corporate matters concerning the Debtors' businesses.
Cadwalader's professionals will be paid in accordance with these
hourly rates:
Professional Hourly Rate
------------ -----------
Partners $650 - $995
Other Attorneys $335 - $995
Legal Assistants $170 - $265
Cadwalader will also be reimbursed for its necessary out-of-pocket
expenses.
According to Mr. Light, since the commencement of its retention in
August 2009, Cadwalader received from the Debtors an aggregate of
$7,746,405 for its prepetition services rendered and expenses
incurred, as advance payments to cover an estimate for services
rendered and expenses incurred up to the Petition Date. The firm
has reduced the balance of the credit available to the Debtors by
the amount of those charges.
The precise amount of the firm's fees and expenses will be
determined upon the final recording of all charges with respect to
the period prior to the Petition Date, and the advance will be
applied against that amount, says Mr. Light.
As of the Petition Date, Cadwalader estimates that it has a
remaining credit balance in favor of the Debtors for future
professional services to be performed and expenses to be incurred
subsequent to the Petition Date, in the approximate amount of
$450,000. The Debtors propose that the credit balance be treated
as an "evergreen retainer" to be held by Cadwalader as security
throughout the Chapter 11 cases until the firm's fees and expenses
are awarded.
John Rapisardi, Esq., at a partner at Cadwalader, Wickersham &
Taft LLP, assures the Court that his firm is a "disinterested
person," as defined in Section 101 (14) of the Bankruptcy code, as
modified by Section 1107(b).
The Court will convene a hearing on April 28, 2010, to consider
the Debtors' application. Objections, if any, are due by
April 21.
About Xerium Technologies
Based in Raleigh, North Carolina, Xerium Technologies, Inc. (NYSE:
XRM), manufactures and supplies two types of consumable products
used primarily in the production of paper: clothing and roll
covers. The Company, which operates around the world under a
variety of brand names, utilizes a broad portfolio of patented and
proprietary technologies to provide customers with tailored
solutions and products integral to production, all designed to
optimize performance and reduce operational costs. With 32
manufacturing facilities in 13 countries around the world, Xerium
has approximately 3,300 employees.
Xerium Technologies and certain subsidiaries filed for Chapter 11
on March 30, 2010 (Bankr. D. Del. Lead Case No. 10-11031). Judge
Kevin J. Carey presides over the cases. John J. Rapisardi, Esq.;
George A. Davis, Esq.; and Sharon J. Richardson, Esq., at
Cadwalader, Wickersham & Taft LLP; and Mark D. Collins, Esq., at
Richards, Layton & Finger, P.A., serve as bankruptcy counsel.
Brian Fox, Michelle Campbell, and Michael Hartley at AlixPartners,
LLC, serve as the Debtors' restructuring advisors. Stephen Ledoux
and Daniel Gilligan at Rothschild Inc. serve as the Debtors'
investment bankers. Garden City Group Inc. is the Debtors' claims
agent. Xerium Technologies disclosed total assets of $693,511,000
and total debts of $813,168,000 in its petition.
Bankruptcy Creditors' Service, Inc., publishes XERIUM TECHNOLOGIES
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by Xerium Technologies and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
XERIUM TECHNOLOGIES: Proposes Smith as Special Corporate Counsel
----------------------------------------------------------------
By this application, Xerium Technologies Inc. and its units seek
the Court's authority to employ Smith, Anderson, Blount, Dorsett,
Mitchell & Jernigan, LLP, as special corporate counsel, nunc pro
tunc to the Petition Date.
Stephen R. Light, Chairman and Chief Executive Officer at Xerium,
relates that Smith Anderson has extensive prior experience and
knowledge regarding the Debtors' businesses and corporate and
capital structure. Specifically, Smith Anderson has provided to
the Debtors the legal services typically expected from an in-house
general counsel and legal staff, as well as providing services
more typically expected from outside general counsel.
According to Mr. Light, Smith Anderson has provided the Debtors
and their boards of directors with a variety of legal services
over the last two years, including, without limitation, general
corporate and governance matters, various securities regulatory
matters, litigation, real estate, intellectual property, third
party bankruptcy, executive employment and benefits, and financing
and general commercial services. In addition, leading up to the
Petition Date, the firm has assisted the Debtors in negotiations
with its lenders under the Debtors' prepetition credit facility.
Accordingly, Smith Anderson is intimately familiar with the
Debtors' businesses, is uniquely qualified to act as special
corporate counsel for the Debtors and will contribute greatly and
aid in the efficient administration of their estates, Mr. Light
tells the Court.
As special corporate counsel, Smith Anderson (i) will continue to
render general corporate and litigation services, unrelated to the
conduct of the Chapter 11 cases, and (ii) may be requested to
represent the Debtors from time to time during the pendency of the
cases, including representing the Debtors, their boards of
directors and their members with respect to:
(a) general corporate and governance matters;
(b) securities and securities litigation matters;
(c) possible asset dispositions or other corporate merger and
acquisition transactions;
(d) general non-bankruptcy litigation by or against the
Debtors or their boards of directors;
(e) real estate matters;
(f) intellectual property matters;
(g) third party bankruptcy proceedings;
(h) executive compensation and employee benefits matters; and
(i) financing and general commercial services.
Mr. Light contends that Smith Anderson's services are largely
comprised of specific transactional and litigation matters that
would proceed irrespective of the Chapter 11 cases. The services,
Mr. Light adds, will not be duplicative of work performed either
by Cadwalader, Wickersham & Taft, LLP, which represents the
Debtors in connection with their bankruptcy-specific issues, or by
any other law firms retained or to be retained by the Debtors.
On account of the services, Smith Anderson will be paid in
accordance with these hourly rates:
Professional Hourly Rate
------------ -----------
Partners $212 - $490
Associates $158 - $315
Legal Assistants $90 - $190
Mr. Light clarifies that the Debtors do not owe Smith Anderson any
amount for services rendered or expenses incurred prior to the
Petition Date. Thus, Smith Anderson is not a prepetition creditor
of the Debtors. During the year prior to the Petition Date,
however, Smith Anderson received $2,007,114 for prepetition
services rendered and expenses incurred.
Amos U. Priester, Esq., a partner with Smith, Anderson, Blount,
Dorsett, Mitchell & Jernigan, LLP, assures the Court that the firm
is a "disinterested person," as defined in Section 101 (14) of the
Bankruptcy Code, as modified by Section 1107(b).
The Court will convene a hearing on April 28, 2010, to consider
the Debtors' application. Objections, if any, are due by
April 21.
About Xerium Technologies
Based in Raleigh, North Carolina, Xerium Technologies, Inc. (NYSE:
XRM), manufactures and supplies two types of consumable products
used primarily in the production of paper: clothing and roll
covers. The Company, which operates around the world under a
variety of brand names, utilizes a broad portfolio of patented and
proprietary technologies to provide customers with tailored
solutions and products integral to production, all designed to
optimize performance and reduce operational costs. With 32
manufacturing facilities in 13 countries around the world, Xerium
has approximately 3,300 employees.
Xerium Technologies and certain subsidiaries filed for Chapter 11
on March 30, 2010 (Bankr. D. Del. Lead Case No. 10-11031). Judge
Kevin J. Carey presides over the cases. John J. Rapisardi, Esq.;
George A. Davis, Esq.; and Sharon J. Richardson, Esq., at
Cadwalader, Wickersham & Taft LLP; and Mark D. Collins, Esq., at
Richards, Layton & Finger, P.A., serve as bankruptcy counsel.
Brian Fox, Michelle Campbell, and Michael Hartley at AlixPartners,
LLC, serve as the Debtors' restructuring advisors. Stephen Ledoux
and Daniel Gilligan at Rothschild Inc. serve as the Debtors'
investment bankers. Garden City Group Inc. is the Debtors' claims
agent. Xerium Technologies disclosed total assets of $693,511,000
and total debts of $813,168,000 in its petition.
Bankruptcy Creditors' Service, Inc., publishes XERIUM TECHNOLOGIES
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by Xerium Technologies and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
XERIUM TECHNOLOGIES: To Act as Representative in Foreign Countries
------------------------------------------------------------------
Xerium Technologies Inc sought and obtained the Court's authority
to act as foreign representative on behalf of their estates in any
foreign country, including Canada.
The Debtors operate in several countries throughout the world,
including Canada. Currently, as part of their ongoing business
operations, the Debtors have material assets in Canada and
elsewhere, which are critical to the successful restructuring of
the Debtors and their affiliates. Therefore, the Debtors contend,
it is necessary to ensure that their Chapter 11 cases and all
orders issued by the Court are recognized and respected in Canada
and other jurisdictions abroad.
As a Debtor in the Chapter 11 cases and the ultimate parent to
each of the Debtors, Xerium is well-positioned to represent the
Debtors in foreign proceedings and to serve as a conscientious
Foreign Representative to ensure that the proceedings are
coordinated and recognized in those jurisdictions in which the
Debtors have assets, John R. Rapisardi, Esq., at Cadwalader,
Wickersham & Taft LLP, in New York, asserts. In addition, having
Xerium serve as Foreign Representative is the most efficient
option for the Debtors as they will not need to retain a third
party to act as such, with the added expense that would accompany
the retention, thereby preserving the Debtors' assets for the
benefit of their estates and creditors, Mr. Rapisardi further
asserts.
Authorizing Xerium to act as Foreign Representative on behalf of
the Debtors' estates serves the explicit purposes of Chapter 15,
which include the "protection and maximization of the value of the
debtors' assets," Mr. Rapisardi adds.
About Xerium Technologies
Based in Raleigh, North Carolina, Xerium Technologies, Inc. (NYSE:
XRM), manufactures and supplies two types of consumable products
used primarily in the production of paper: clothing and roll
covers. The Company, which operates around the world under a
variety of brand names, utilizes a broad portfolio of patented and
proprietary technologies to provide customers with tailored
solutions and products integral to production, all designed to
optimize performance and reduce operational costs. With 32
manufacturing facilities in 13 countries around the world, Xerium
has approximately 3,300 employees.
Xerium Technologies and certain subsidiaries filed for Chapter 11
on March 30, 2010 (Bankr. D. Del. Lead Case No. 10-11031). Judge
Kevin J. Carey presides over the cases. John J. Rapisardi, Esq.;
George A. Davis, Esq.; and Sharon J. Richardson, Esq., at
Cadwalader, Wickersham & Taft LLP; and Mark D. Collins, Esq., at
Richards, Layton & Finger, P.A., serve as bankruptcy counsel.
Brian Fox, Michelle Campbell, and Michael Hartley at AlixPartners,
LLC, serve as the Debtors' restructuring advisors. Stephen Ledoux
and Daniel Gilligan at Rothschild Inc. serve as the Debtors'
investment bankers. Garden City Group Inc. is the Debtors' claims
agent. Xerium Technologies disclosed total assets of $693,511,000
and total debts of $813,168,000 in its petition.
Bankruptcy Creditors' Service, Inc., publishes XERIUM TECHNOLOGIES
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by Xerium Technologies and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
* Bankruptcy Judges Support Disclosure Rules
--------------------------------------------
David McLaughlin at Dow Jones' Daily Bankruptcy Review reports
that bankruptcy judges spoke at the Turnaround Management
Association's spring conference in New York, where they debated
several of the hottest issues in bankruptcy today, including the
increasingly aggressive tactics used by creditor groups wrangling
for bigger recoveries.
According to Mr. McLaughlin, U.S. Bankruptcy Judge Robert Gerber
for the Southern District of New York called for broader
disclosure rules from investors.
Mr. McLaughlin says Kevin Carey, the chief judge for the Delaware
bankruptcy court, said, "If you want to come into bankruptcy
court, you to tell us who you are." Judge Carey said, "The judge
can't be kept totally in the dark."
Mr. McLaughlin notes Judge Rosemary Gambardella in New Jersey
said, "I think that aggressiveness is good." She said, "I think
that aggressiveness pays out in the end."
* Weil's Harvey Miller Comments on Financial Regulation Proposals
-----------------------------------------------------------------
The Wall Street Journal's Nick Elliott reports that Harvey Miller,
Esq., at Weil, Gotshal & Manges, moderating a panel on the
financial crisis at a meeting of the Turnaround Management
Association in New York, made clear his dim view of some aspects
of financial regulation proposals now in Congress. Mr. Miller
leads the Weil, Gotshal & Manges team in Lehman Brothers Holdings
Inc.'s bankruptcy.
The Journal relates Mr. Miller said the idea that the FDIC could
oversee a complex wind down such as Lehman's was "a little
astounding." According to the Journal, Mr. Miller, noting that
Lehman had more than one million derivatives contracts that have
to be unwound, said the FDIC "wouldn't know a derivative if it hit
it in the face."
The Journal also notes Mr. Miller slammed legislators and
regulators for being opposed to using bankruptcy to handle failure
at large financial institutions. Countering the argument that
bankruptcy can take too long, he pointed out that Lehman was sold
in four days.
* Baker Donelson Taps Johnston Barton's Max A. Moseley
------------------------------------------------------
Baker Donelson Bearman Caldwell & Berkowitz PC has pulled in a
reorganization expert from Johnston Barton Proctor & Rose LLP to
ramp up its bankruptcy and creditors' rights practice, according
to Bankruptcy Law360.
Law360 says Max A. Moseley joined the firm as of counsel in its
Birmingham, Ala., office, where he will concentrate on
representing clients in business reorganization, restructuring,
workouts and Chapter 11 cases.
* John Owens Joins Huron Consulting Group
-----------------------------------------
John Owens (jowens@huronconsultinggroup.com) has joined Huron
Consulting Group as a director in the Restructuring & Turnaround
practice. Mr. Owens has more than 20 years of experience in
commercial lending, corporate finance, and enterprise management.
He has specific expertise in corporate turnarounds and loan
restructurings and is skilled in transaction structuring, contract
negotiation, and cash flow modeling across a broad range of
industries. He also has served in various executive and board
capacities, responsible for both strategic and operating
initiatives.
Chicago, Illinois-based Huron Consulting Group --
http://www.huronconsultinggroup.com-- is a management consulting
firm and not a CPA firm, and does not provide attest services,
audits, or other engagements in accordance with the AICPA's
Statements on Auditing Standards. The Company's restructuring and
turnaround professionals assist financially distressed companies,
creditor constituencies, and other stakeholders in connection with
out-of-court restructurings and bankruptcy proceedings. Huron
Consulting helps clients in diverse industries improve
performance, comply with complex regulations, resolve disputes,
recover from distress, leverage technology, and stimulate growth.
The Company teams with its clients to deliver sustainable and
measurable results. The company provides services to a wide
variety of both financially sound and distressed organizations,
including leading academic institutions, healthcare organizations,
Fortune 500 companies, medium-sized businesses, and the law firms
that represent these various organizations.
* Three Experienced Attorneys Join the McDonald Hopkins Law Firm
----------------------------------------------------------------
McDonald Hopkins welcomes three experienced attorneys to the
Litigation Department in the firm's Detroit office. John E. Benko
and Michael G. Latiff were elected to McDonald Hopkins as Members.
Timothy J. Lowe joins as an Associate. All three attorneys were
previously with the law firm Butzel Long.
"We are delighted to have such outstanding litigators join
McDonald Hopkins," said William J. O'Neill, chair of the firm's
Litigation Department. "They have substantial expertise in the
automotive and construction industries, which is an excellent fit
for our clients in Detroit and nationally."
The Litigation Department at McDonald Hopkins provides a wide
range of litigation services in specialties such as commercial and
financial services, construction law and real estate, labor and
employment, intellectual property, products liability and mass
tort, securities, white collar crime, and trade secret, non-
compete and unfair competition.
John E. Benko, Member
Benko has extensive experience in complex commercial litigation
and contract litigation in which he specializes in the automotive
and construction industries. Benko, who has acted as outside
general counsel to automotive suppliers, has also represented Tier
I and Tier II automotive suppliers in a wide range of legal
matters, including tooling disputes, recall litigation, and
supplier disputes regarding commodity pricing and other commercial
terms. In the construction industry, Benko has represented
numerous contractors in disputes with owners and governmental
entities. He has tried cases in state and federal courts in
Michigan, and represents clients in other jurisdictions around the
country.
A member of the State Bar of Michigan, Benko received his J.D. in
1998 from the University of Michigan Law School and a Bachelor of
Science degree in 1993 from Central Michigan University.
Michael G. Latiff, Member
Latiff, who was the Litigation Practice Group leader at his former
firm, has extensive experience as lead counsel in the litigation
of significant commercial, business, construction, real property,
OSHA, and automotive indirect supply chain disputes. He has tried
several jury and non-jury trials in state and federal courts. In
addition, Latiff has represented clients in many arbitration and
administrative law disputes.
In 2006, Latiff served as lead trial counsel in an E-discovery
abuse case in which he obtained a Default, Sanction and Summary
Judgment Opinion in the U.S. District Court, Eastern District of
Michigan. This was one of the first opinions and orders of its
kind in the U.S. since the modification of discovery rules.
Latiff's expertise also includes significant specialized knowledge
defending construction clients who have been cited for multiple
penalties and large fines by the Michigan Occupational Safety and
Health Administration (MIOSHA). He is a frequent author on the
legal issues related to workplace safety practices.
Latiff is a member of the Arab American Bar Association, the
American Bar Association, the State Bar of Michigan, and the
Macomb County Bar Association.
He received a J.D. in 1994 (cum laude) from the University of
Detroit School of Law and a Bachelor of Arts degree in 1991 from
the University of Michigan.
Timothy J. Lowe, Associate
Lowe has wide-ranging experience in the areas of business and
commercial litigation including business, construction, automotive
supply chain, sales representative, and real property disputes.
He is a member of the State Bar of Michigan, Federal Bar
Association and Detroit Metropolitan Bar Association.
Lowe received a J.D. in 2005 (magna cum laude, Order of the Coif)
from Wayne State University Law School and a Bachelor of Arts
degree in 2002 (magna cum laude) from Aquinas College.
About McDonald Hopkins
McDonald Hopkins is a business advisory and advocacy law firm with
offices in Chicago, Cleveland, Columbus, Detroit, and West Palm
Beach. The firm offers comprehensive legal services in the areas
of business law, litigation, business restructuring, healthcare,
labor and employment, and estate planning. The president of
McDonald Hopkins is Carl J. Grassi.
* Six Sidley Partners Recognized by Law360 as Rising Stars
----------------------------------------------------------
Sidley Austin LLP have been recognized as Rising Stars Under 40 by
Law360 in their respective areas of practice. The lawyers are
Chris Abbinante (Chicago), Theodore Chandler (Los Angeles), Sharon
Flanagan (San Francisco), Robert Hochman (Chicago), Sean Keyvan
(Chicago) and Roger Martella (Washington, D.C.).
"Each of these six partners has demonstrated legal skill,
innovation and leadership within their area of practice," said
Thomas A. Cole, Chair of the firm's Executive Committee. "I am
pleased to congratulate Chris, Ted, Sharon, Rob, Sean and Roger on
this recognition, and I look forward to what I know will be many
future successes."
Chris Abbinante is a partner in the firm's corporate group. He
advises clients on leveraged buy-outs, private equity and venture
capital investments, and strategic mergers, acquisitions and joint
ventures. Mr. Abbinante also has significant experience
representing clients in restructuring transactions, IPOs and other
corporate finance offerings, and corporate governance matters.
Theodore Chandler is a partner in firm's intellectual property
litigation practice. He concentrates on patent litigation and has
handled significant cases in federal court and before the
International Trade Commission.
Sharon Flanagan is a partner in the firm's corporate practice. Ms.
Flanagan regularly represents buyers and sellers in a broad range
of merger and acquisition transactions. Her experience includes
public company mergers, tender offers, spin-offs, restructurings,
and acquisitions of stock and assets of private and public
companies. Ms. Flanagan has extensive experience representing
issuers and underwriters in a variety of securities offerings,
including initial public offerings, follow-on offerings, public
debt offerings and 144A debt offerings. Ms. Flanagan also
regularly advises public companies on their corporate governance
and SEC compliance matters.
Robert Hochman is a partner in the firm's appellate practice. His
practice focuses on general commercial appellate litigation, and
covers a broad range of substantive areas of the law, including
patent, federal preemption, class actions and antitrust. Mr.
Hochman regularly briefs cases and has argued before the United
States Supreme Court. Mr. Hochman represents amici in the Supreme
Court on issues of broad concern to industry groups or other
interested parties. He also regularly briefs and appears for
argument in various state and federal appellate courts.
Sean Keyvan is a partner in firm's insurance practice. Mr.
Keyvan's practice is focused on a variety of corporate and
regulatory matters relating to the insurance and financial
services industry, including the representation of insurance
companies and other insurance and financial service entities in
connection with domestic and cross-border mergers, acquisitions,
divestitures, joint ventures and corporate reorganizations,
including acquisitions and divestitures of books of insurance
business through reinsurance, renewal rights and other alternative
transaction structures; the formation, capitalization and
corporate financing of insurance companies and related ventures;
insurance company holding company system regulation; insurance
company investment activities; the regulation of insurance
producers, agencies and other distribution systems; the structure
and regulation of alternative and novel risk financing mechanisms
and complex reinsurance arrangements.
Roger Martella is a partner in the firm's environmental practice.
Mr. Martella's practice focuses on a range of areas, including
advising companies on developing strategic approaches to achieve
their goals in light of rapidly developing demands to address
climate change, promote sustainability and utilize clean energy; a
broad range of environmental and natural resource litigation and
mediation; and advising multinational companies on compliance with
environmental laws in the United States, China, the European Union
and other nations. Mr. Martella rejoined Sidley after serving as
the General Counsel of the United States Environmental Protection
Agency and as a trial lawyer at the Department of Justice.
Law360 distributes daily legal news in e-mail newsletters focused
on a range of practice areas, including Appellate, Bankruptcy,
Competition, Contract, Corporate Finance, Employment, Energy,
Environmental, Financial Services, Health, IP, Insurance,
International Trade, Product Liability, Securities and Technology.
About Sidley Austin LLP
Sidley Austin LLP is one of the world's largest full-service law
firms, with approximately 1700 lawyers practicing in 17 U.S. and
international cities, including Beijing, Brussels, Frankfurt,
Geneva, Hong Kong, London, Shanghai, Singapore, Sydney and Tokyo.
Every year since 2003, Sidley has been named to Legal Business'
Global Elite, its designation for the 18 firms "that define the
pinnacle of the legal profession." Sidley is recognized for
service and responsiveness--BTI, a Boston-based research and
consulting firm, has named Sidley as one of only two firms to have
been in the top ten of the BTI Client Service rankings every year
since the inception of those rankings in 2001, and was number one
in three of those years.
* Chapter 11 Cases with Assets & Liabilities Below $1,000,000
-------------------------------------------------------------
Recent Chapter 11 cases filed with assets and liabilities below
$1,000,000:
In Re AACCO Cast Products
Bankr. Ariz. Case No. 10-09977
Chapter 11 Petition Filed April 7, 2010
Filed As Pro Se
In Re Go West Ventures LLC
Bankr. Ariz. Case No. 10-09957
Chapter 11 Petition Filed April 7, 2010
Filed As Pro Se
In Re Romar Studios of North America, Inc.
dba Romar Studios
dba Romar Studios, Inc
dba CAC Studios, Inc
Bankr. C.D. Calif. Case No. 10-23265
Chapter 11 Petition Filed April 7, 2010
Filed As Pro Se
In Re Geoffrey Scott Group, Inc.
Bankr. N.D. Calif. Case No. 10-43924
Chapter 11 Petition Filed April 7, 2010
Filed As Pro Se
In Re Coastal Heating & Air of West Florida, Inc.
Bankr. M.D. Fla. Case No. 10-08090
Chapter 11 Petition Filed April 7, 2010
See http://bankrupt.com/misc/flmb10-08090.pdf
In Re Keys To Life, Inc.
Bankr. M.D. Fla. Case No. 10-08086
Chapter 11 Petition Filed April 7, 2010
See http://bankrupt.com/misc/flmb10-08086.pdf
In Re RFH Construction Consultants, Inc.
Bankr. M.D. Fla. Case No. 10-08093
Chapter 11 Petition Filed April 7, 2010
See http://bankrupt.com/misc/flmb10-08093.pdf
In Re Rodney J. Kosares
Karen L. Kosares
Bankr. M.D. Fla. Case No. 10-08094
Chapter 11 Petition Filed April 7, 2010
See http://bankrupt.com/misc/flmb10-08094.pdf
In Re Ocean 1 Properties, LLC
Bankr. S.D. Fla. Case No. 10-19053
Chapter 11 Petition Filed April 7, 2010
See http://bankrupt.com/misc/flsb10-19053.pdf
In Re Robert F. Rood, IV
Bankr. S.D. Fla. Case No. 10-18984
Chapter 11 Petition Filed April 7, 2010
Filed As Pro Se
In Re Reed & Chambers Properties, LLC
Bankr. M.D. Ga. Case No. 10-51094
Chapter 11 Petition Filed April 7, 2010
See http://bankrupt.com/misc/gamb10-51094.pdf
In Re LBCS, Inc.
Bankr. E.D. Mich. Case No. 10-51545
Chapter 11 Petition Filed April 7, 2010
See http://bankrupt.com/misc/mieb10-51545.pdf
In Re The Lou Properties, LLC
Bankr. E.D. Mo. Case No. 10-43697
Chapter 11 Petition Filed April 7, 2010
See http://bankrupt.com/misc/moeb10-43697.pdf
In Re John R. Jacobs
Bankr. W.D. Mo. Case No. 10-20717
Chapter 11 Petition Filed April 7, 2010
Filed As Pro Se
In Re KORE Holdings, Inc.
Bankr. Nev. Case No. 10-16039
Chapter 11 Petition Filed April 7, 2010
See http://bankrupt.com/misc/nvb10-16039.pdf
In Re The Curtain Store, Inc.
Bankr. E.D. N.Y. Case No. 10-72455
Chapter 11 Petition Filed April 7, 2010
See http://bankrupt.com/misc/nyeb10-72455.pdf
In Re Sherrita, LLC
dba Bentleys Bar & Grill
Bankr. W.D. N.C. Case No. 10-30955
Chapter 11 Petition Filed April 7, 2010
See http://bankrupt.com/misc/ncwb10-30955.pdf
In Re Donnie Wayne Jones
dba Dimples Steak House
Rita Faye Jones
Bankr. M.D. Tenn. Case No. 10-03761
Chapter 11 Petition Filed April 7, 2010
See http://bankrupt.com/misc/tnmb10-03761.pdf
In Re Gian Carlos Cristi
Theresa Ann Cristi
Bankr. C.D. Calif. Case No. 10-23462
Chapter 11 Petition Filed April 8, 2010
Filed As Pro Se
In Re Mana 4 J, Inc.
Bankr. E.D. Calif. Case No. 10-29003
Chapter 11 Petition Filed April 8, 2010
See http://bankrupt.com/misc/caeb10-29003.pdf
In Re Joseph Atsus
Bankr. N.D. Calif. Case No. 10-31254
Chapter 11 Petition Filed April 8, 2010
Filed As Pro Se
In Re Rosegarden Properties, LLC
Bankr. Md. Case No. 10-17688
Chapter 11 Petition Filed April 8, 2010
See http://bankrupt.com/misc/mdb10-17688.pdf
In Re Robert S. Powers
Laurie A. Powers
Bankr. W.D. Mich. Case No. 10-04607
Chapter 11 Petition Filed April 8, 2010
See http://bankrupt.com/misc/miwb10-04607.pdf
In Re Fremont Development LLC
Bankr. Nev. Case No. 10-16116
Chapter 11 Petition Filed April 8, 2010
Filed As Pro Se
In Re J&P Equipment, Inc.
Bankr. N.J. Case No. 10-20573
Chapter 11 Petition Filed April 8, 2010
See http://bankrupt.com/misc/njb10-20573.pdf
In Re Errio Construction Co.
Bankr. E.D. N.Y. Case No. 10-42996
Chapter 11 Petition Filed April 8, 2010
See http://bankrupt.com/misc/nyeb10-42996.pdf
In Re Aeon LLC
Bankr. N.D. N.Y. Case No. 10-30898
Chapter 11 Petition Filed April 8, 2010
See http://bankrupt.com/misc/nynb10-30898.pdf
In Re Professional Family Care Services, Inc.
Bankr. E.D. N.C. Case No. 10-02789
Chapter 11 Petition Filed April 8, 2010
See http://bankrupt.com/misc/nceb10-02789.pdf
In Re Kevin Glynn McCloskey
Bankr. W.D. Okla. Case No. 10-12059
Chapter 11 Petition Filed April 8, 2010
See http://bankrupt.com/misc/okwb10-12059.pdf
In Re Early Morning Farm
Bankr. Ore. Case No. 10-61905
Chapter 11 Petition Filed April 8, 2010
See http://bankrupt.com/misc/orb10-61905.pdf
In Re Patton Tire Co., Inc.
Bankr. M.D. Pa. Case No. 10-02914
Chapter 11 Petition Filed April 8, 2010
See http://bankrupt.com/misc/pamb10-02914.pdf
In Re James Michael Wingo
Bankr. M.D. Tenn. Case No. 10-03824
Chapter 11 Petition Filed April 8, 2010
See http://bankrupt.com/misc/tnmb10-03824.pdf
In Re Deco Vega, LLC
Bankr. N.D. Texas Case No. 10-32533
Chapter 11 Petition Filed April 8, 2010
See http://bankrupt.com/misc/txnb10-32533.pdf
In Re Highlands Equipment & Supply, LLC
Bankr. W.D. Va. Case No. 10-70869
Chapter 11 Petition Filed April 8, 2010
See http://bankrupt.com/misc/vawb10-70869.pdf
In Re Osborn Residential, LLC
Bankr. W.D. Wash. Case No. 10-13929
Chapter 11 Petition Filed April 8, 2010
See http://bankrupt.com/misc/wawb10-13929.pdf
In Re High Desert Academy of Applied Arts & Sciences
Bankr. C.D. Calif. Case No. 10-20564
Chapter 11 Petition Filed April 9, 2010
See http://bankrupt.com/misc/cacb10-20564.pdf
In Re Silvera's Steakhouse & Lounge LLC
Bankr. C.D. Calif. Case No. 10-14576
Chapter 11 Petition Filed April 9, 2010
See http://bankrupt.com/misc/cacb10-14576.pdf
In Re Rancho Farm Construction Corporation
Bankr. S.D. Calif. Case No. 10-05845
Chapter 11 Petition Filed April 9, 2010
See http://bankrupt.com/misc/casb10-05845.pdf
In Re His Temple-West, LLC
dba Snap Fitness-Portage
Bankr. W.D. Mich. Case No. 10-04667
Chapter 11 Petition Filed April 9, 2010
See http://bankrupt.com/misc/miwb10-04667p.pdf
See http://bankrupt.com/misc/miwb10-04667c.pdf
In Re MFT Enterprise, Inc.
dba Quiznos
Bankr. Neb. Case No. 10-81052
Chapter 11 Petition Filed April 9, 2010
See http://bankrupt.com/misc/neb10-81052.pdf
In Re Ae Kyoung Yang
Bankr. Nev. Case No. 10-16225
Chapter 11 Petition Filed April 9, 2010
See http://bankrupt.com/misc/nvb10-16225.pdf
In Re Eugenia Bartolome Cabucana
Bankr. Nev. Case No. 10-16216
Chapter 11 Petition Filed April 9, 2010
See http://bankrupt.com/misc/nvb10-16216.pdf
In Re Richard Buontempo
Margaret Buontempo
Bankr. N.J. Case No. 10-20726
Chapter 11 Petition Filed April 9, 2010
See http://bankrupt.com/misc/njb10-20726.pdf
In Re Harrison Bagel, Inc.
Bankr. S.D. N.Y. Case No. 10-22694
Chapter 11 Petition Filed April 9, 2010
Filed As Pro Se
In Re A.L.P. Land Co., Inc.
Bankr. W.D. Pa. Case No. 10-22615
Chapter 11 Petition Filed April 9, 2010
See http://bankrupt.com/misc/pawb10-22615.pdf
In Re Otis Allen Plunk, Jr.
Kimberly Walker Plunk
Bankr. M.D. Fla. Case No. 10-08412
Chapter 11 Petition Filed April 10, 2010
See http://bankrupt.com/misc/flmb10-08412.pdf
In Re Basilicata Realty Corp.
Bankr. S.D. N.Y. Case No. 10-11887
Chapter 11 Petition Filed April 10, 2010
See http://bankrupt.com/misc/nysb10-11887.pdf
In Re Burning Bush Day Care & Learning Center, Inc.
Bankr. E.D. Va. Case No. 10-32597
Chapter 11 Petition Filed April 11, 2010
See http://bankrupt.com/misc/vaeb10-32597.pdf
In Re Two Dogs And A Bone, Inc.
Bankr. N.D. Ala. Case No. 10-41050
Chapter 11 Petition Filed April 12, 2010
See http://bankrupt.com/misc/alnb10-41050.pdf
In Re DaMoor, Inc.
Bankr. C.D. Calif. Case No. 10-14192
Chapter 11 Petition Filed April 12, 2010
See http://bankrupt.com/misc/cacb10-14192.pdf
In Re 411 New York Owners Corp.
Bankr. N.D. Calif. Case No. 10-11310
Chapter 11 Petition Filed April 12, 2010
Filed As Pro Se
In Re Parga Developers, LLC
Bankr. Conn. Case No. 10-50821
Chapter 11 Petition Filed April 12, 2010
See http://bankrupt.com/misc/ctb10-50821.pdf
In Re Livingsun Apartments LLC
Bankr. M.D. Fla. Case No. 10-06025
Chapter 11 Petition Filed April 12, 2010
See http://bankrupt.com/misc/flmb10-06025.pdf
In Re Chdawan Von Sinner
Bankr. S.D. Fla. Case No. 10-19501
Chapter 11 Petition Filed April 12, 2010
See http://bankrupt.com/misc/flsb10-19501c.pdf
See http://bankrupt.com/misc/flsb10-19501p.pdf
In Re 440 Black Rock Road, LLC
Bankr. M.D. Pa. Case No. 10-02999
Chapter 11 Petition Filed April 12, 2010
See http://bankrupt.com/misc/pamb10-02999.pdf
In Re 575-579 Broadway, LLC
Bankr. M.D. Pa. Case No. 10-03000
Chapter 11 Petition Filed April 12, 2010
See http://bankrupt.com/misc/pamb10-03000.pdf
In Re Jose J. Naranjo
aka U.S. Border Cantina
Carmen Marie Naranjo
Bankr. M.D. Tenn. Case No. 10-03915
Chapter 11 Petition Filed April 12, 2010
See http://bankrupt.com/misc/tnmb10-03915.pdf
In Re NWO Properties Assoc., LLC
Bankr. Conn. Case No. 10-21198
Chapter 11 Petition Filed April 13, 2010
Filed As Pro Se
In Re Elmir Slavic
Bankr. M.D. Fla. Case No. 10-03037
Chapter 11 Petition Filed April 13, 2010
See http://bankrupt.com/misc/flmb10-03037.pdf
In Re Solid Ground Concrete Pumping, Inc.
Bankr. M.D. Fla. Case No. 10-06074
Chapter 11 Petition Filed April 13, 2010
See http://bankrupt.com/misc/flmb10-06074p.pdf
See http://bankrupt.com/misc/flmb10-06074c.pdf
In Re Jefferson Montessori School, Inc.
Bankr. Idaho Case No. 10-40612
Chapter 11 Petition Filed April 13, 2010
See http://bankrupt.com/misc/idb10-40612.pdf
In Re DDO Enterprises, LLC
dba aco Johns
dba Didoughs
Bankr. N.D. Ill. Case No. 10-71847
Chapter 11 Petition Filed April 13, 2010
Filed As Pro Se
In Re TJ's of Rockford, Inc.
Bankr. N.D. Ill. Case No. 10-71845
Chapter 11 Petition Filed April 13, 2010
Filed As Pro Se
In Re Wood Avenue Investments, LLC.
Bankr. E.D. Mich. Case No. 10-52152
Chapter 11 Petition Filed April 13, 2010
See http://bankrupt.com/misc/mieb10-52152p.pdf
See http://bankrupt.com/misc/mieb10-52152c.pdf
In Re Wheatley Capital Inc
Bankr. E.D. N.Y. Case No. 10-72619
Chapter 11 Petition Filed April 13, 2010
Filed As Pro Se
In Re Michael R. Condrick
Lona J. Condrick
Bankr. W.D. Pa. Case No. 10-70415
Chapter 11 Petition Filed April 13, 2010
See http://bankrupt.com/misc/pawb10-70415.pdf
In Re Johnson Tire And Service Corporation
dba Number One Tire
dba Number 1 Tire
dba Number 1 Tire And Service
dba Number One Tire And Service
dba Number 1 Tire Stores
Bankr. R.I. Case No. 10-11575
Chapter 11 Petition Filed April 13, 2010
See http://bankrupt.com/misc/rib10-11575.pdf
In Re The Eye Site, Inc.
Bankr. E.D. Tenn. Case No. 10-31859
Chapter 11 Petition Filed April 13, 2010
See http://bankrupt.com/misc/tneb10-31859.pdf
In Re Essential Infrastructure, LLC
fdba Essential IntegrIT
Bankr. N.D. Texas Case No. 10-42581
Chapter 11 Petition Filed April 13, 2010
See http://bankrupt.com/misc/txnb10-42581.pdf
In Re Masonry Specialists II, LLC
Bankr. E.D. Wis. Case No. 10-25710
Chapter 11 Petition Filed April 13, 2010
See http://bankrupt.com/misc/wieb10-25710p.pdf
See http://bankrupt.com/misc/wieb10-25710c.pdf
In Re Skylawn, LLC
Bankr. W.D. Wis. Case No. 10-12847
Chapter 11 Petition Filed April 13, 2010
See http://bankrupt.com/misc/wiwb10-12847.pdf
In Re Blue Velvet, LLC
Bankr. C.D. Calif. Case No. 10-24522
Chapter 11 Petition Filed April 15, 2010
See http://bankrupt.com/misc/cacb10-24522.pdf
In Re Horowitz Management of Troy, Inc.
Bankr. C.D. Calif. Case No. 10-14405
Chapter 11 Petition Filed April 15, 2010
See http://bankrupt.com/misc/cacb10-14405.pdf
In Re 2761 East Oakland Corp.
Bankr. S.D. Fla. Case No. 10-19818
Chapter 11 Petition Filed April 15, 2010
See http://bankrupt.com/misc/flsb10-19818.pdf
In Re 408 West Sixth Street, LLC
Bankr. S.D. Ind. Case No. 10-05405
Chapter 11 Petition Filed April 15, 2010
See http://bankrupt.com/misc/insb10-05405.pdf
In Re George T. Moran, Inc.
Bankr. Md. Case No. 10-18337
Chapter 11 Petition Filed April 15, 2010
See http://bankrupt.com/misc/mdb10-18337.pdf
In Re Joseph A. Schwartz
Linda S. Schwartz
Bankr. W.D. Pa. Case No. 10-70438
Chapter 11 Petition Filed April 15, 2010
See http://bankrupt.com/misc/pawb10-70438.pdf
In Re Old John, Inc.
Bankr. S.D. N.Y. Case No. 10-11992
Chapter 11 Petition Filed April 15, 2010
See http://bankrupt.com/misc/nysb10-11992.pdf
In Re David Thurman Lane
fdba Lane's Backhoe Service
Bankr. M.D. Tenn. Case No. 10-04051
Chapter 11 Petition Filed April 15, 2010
See http://bankrupt.com/misc/tnmb10-04051.pdf
In Re Hillsden, LLC
Bankr. Utah Case No. 10-24809
Chapter 11 Petition Filed April 15, 2010
See http://bankrupt.com/misc/utb10-24809.pdf
In Re Grigg Brothers Tree Service, Inc.
Bankr. E.D. Va. Case No. 10-71806
Chapter 11 Petition Filed April 15, 2010
See http://bankrupt.com/misc/vaeb10-71806.pdf
In Re Slidework, LLC
Bankr. W.D. Wash. Case No. 10-14212
Chapter 11 Petition Filed April 15, 2010
See http://bankrupt.com/misc/wawb10-14212.pdf
In Re Buttercream Dreams Bakery & Supplies, Inc.
Bankr. S.D. Ala. Case No. 10-01724
Chapter 11 Petition Filed April 16, 2010
See http://bankrupt.com/misc/alsb10-01724.pdf
In Re Sky Mountain International LLC
dba Sky Mountain Limousines
Bankr. Ariz. Case No. 10-11187
Chapter 11 Petition Filed April 16, 2010
See http://bankrupt.com/misc/azb10-11187.pdf
In Re T.C. Prine, Inc.
Bankr. M.D. Fla. Case No. 10-08887
Chapter 11 Petition Filed April 16, 2010
See http://bankrupt.com/misc/flmb10-08887.pdf
In Re ITM Associates, Inc.
Bankr. Md. Case No. 10-18453
Chapter 11 Petition Filed April 16, 2010
See http://bankrupt.com/misc/mdb10-18453p.pdf
See http://bankrupt.com/misc/mdb10-18453c.pdf
In Re Galway Bay Decor, Inc.
Bankr. Mass. Case No. 10-14138
Chapter 11 Petition Filed April 16, 2010
See http://bankrupt.com/misc/mab10-14138.pdf
In Re Sean E. Fitzpatrick
Bankr. Mass. Case No. 10-41891
Chapter 11 Petition Filed April 16, 2010
See http://bankrupt.com/misc/mab10-41891.pdf
In Re GIC, LLC
Bankr. N.D. Texas Case No. 10-32689
Chapter 11 Petition Filed April 16, 2010
See http://bankrupt.com/misc/txnb10-32689.pdf
In Re Swan Lake Excavating, Inc.
Bankr. Ore. Case No. 10-62144
Chapter 11 Petition Filed April 16, 2010
See http://bankrupt.com/misc/orb10-62144.pdf
In Re Jesus Manuel Garcia
Christina Tepos Garcia
Bankr. C.D. Calif. Case No. 10-24861
Chapter 11 Petition Filed April 17, 2010
See http://bankrupt.com/misc/cacb10-24861.pdf
In Re ESS Automotive, Inc.
Bankr. N.D. Ohio Case No. 10-13533
Chapter 11 Petition Filed April 17, 2010
See http://bankrupt.com/misc/ohnb10-13533.pdf
In Re Assured Horizons, LLC
Bankr. C.D. Calif. Case No. 10-14970
Chapter 11 Petition Filed April 18, 2010
See http://bankrupt.com/misc/cacb10-14970p.pdf
See http://bankrupt.com/misc/cacb10-14970c.pdf
In Re Donko Properties, LLC
Bankr. Ariz. Case No. 10-11456
Chapter 11 Petition Filed April 19, 2010
See http://bankrupt.com/misc/azb10-11456.pdf
In Re James Michael Willis
Traci Lynn Willis
Bankr. Ariz. Case No. 10-11471
Chapter 11 Petition Filed April 19, 2010
See http://bankrupt.com/misc/azb10-11471.pdf
In Re Lewis Investment Properties, LLC
Bankr. Ariz. Case No. 10-11424
Chapter 11 Petition Filed April 19, 2010
See http://bankrupt.com/misc/azb10-11424.pdf
In Re Carpus, Inc.
Bankr. C.D. Calif. Case No. 10-25046
Chapter 11 Petition Filed April 19, 2010
See http://bankrupt.com/misc/cacb10-25046p.pdf
See http://bankrupt.com/misc/cacb10-25046c.pdf
In Re Wrightcrest, LLC
Bankr. C.D. Calif. Case No. 10-25075
Chapter 11 Petition Filed April 19, 2010
See http://bankrupt.com/misc/cacb10-25075.pdf
In Re Austiaj Limited Partnership Fund II
dba Los Altos Woods
Bankr. N.D. Calif. Case No. 10-53982
Chapter 11 Petition Filed April 19, 2010
Filed As Pro Se
In Re Charles William Bragg, Jr.
Bankr. N.D. Calif. Case No. 10-31380
Chapter 11 Petition Filed April 19, 2010
See http://bankrupt.com/misc/canb10-31380.pdf
In Re Jeannie Fu
aka Jeannie Lan V. Ly-Fu
Chico Fu
aka Chico Chun S. Fu
Bankr. N.D. Calif. Case No. 10-31374
Chapter 11 Petition Filed April 19, 2010
Filed As Pro Se
In Re Shams Azar Yousefi Tehrani
Ashraf Mazhari
Bankr. N.D. Calif. Case No. 10-44391
Chapter 11 Petition Filed April 19, 2010
See http://bankrupt.com/misc/canb10-44391.pdf
In Re NH Meateas Statutory Trust
Bankr. Conn. Case No. 10-21260
Chapter 11 Petition Filed April 19, 2010
Filed As Pro Se
In Re Phoenix Development Group, LLC
Bankr. Conn. Case No. 10-21257
Chapter 11 Petition Filed April 19, 2010
Filed As Pro Se
In Re Zena Nemetz
aka F. Zena Nemetz
aka Frances Nemetz
aka Frances Zena Nemetz
Bankr. Conn. Case No. 10-21256
Chapter 11 Petition Filed April 19, 2010
Filed As Pro Se
In Re Ernesto J. Perez, M.D., LLC
Bankr. M.D. Fla. Case No. 10-09010
Chapter 11 Petition Filed April 19, 2010
See http://bankrupt.com/misc/flmb10-09010.pdf
In Re Rheumatology Arthritis Center, Inc.
Bankr. N.D. Ga. Case No. 10-11477
Chapter 11 Petition Filed April 19, 2010
Filed As Pro Se
In Re 3163 Lanark, LLC
Bankr. Idaho Case No. 10-01072
Chapter 11 Petition Filed April 19, 2010
See http://bankrupt.com/misc/idb10-01072.pdf
In Re DPL Trucking, LLC
Bankr. Md. Case No. 10-18571
Chapter 11 Petition Filed April 19, 2010
See http://bankrupt.com/misc/mdb10-18571p.pdf
See http://bankrupt.com/misc/mdb10-18571c.pdf
In Re Solo Lobo Enterprises, Inc.
dba Final Rinse Laundromat
Bankr. S.D. N.Y. Case No. 10-36118
Chapter 11 Petition Filed April 19, 2010
See http://bankrupt.com/misc/nysb10-36118.pdf
In Re Mackenzie Coffee & Vending Services, LLC
Bankr. E.D. Pa. Case No. 10-21134
Chapter 11 Petition Filed April 19, 2010
See http://bankrupt.com/misc/paeb10-21134.pdf
In Re Jimmy M. Morris
Bankr. M.D. Tenn. Case No. 10-04143
Chapter 11 Petition Filed April 19, 2010
Filed As Pro Se
In Re JMI Maintenance, Inc.
Bankr. N.D. Texas Case No. 10-32723
Chapter 11 Petition Filed April 19, 2010
See http://bankrupt.com/misc/txnb10-32723.pdf
In Re Kevin Maurice Stevenson
Bankr. Ariz. Case No. 10-11648
Chapter 11 Petition Filed April 20, 2010
See http://bankrupt.com/misc/azb10-11648.pdf
In Re N/C Carbon Racing Development Inc.
dba NC Forged Wheels
dba NC Carbon Racing
Bankr. C.D. Calif. Case No. 10-15072
Chapter 11 Petition Filed April 20, 2010
Filed As Pro Se
In Re Ramon Canyon Inc.
Bankr. C.D. Calif. Case No. 10-21730
Chapter 11 Petition Filed April 20, 2010
Filed As Pro Se
In Re Wali A. Hamidy, D.M.D., Inc.
Bankr. S.D. Calif. Case No. 10-06489
Chapter 11 Petition Filed April 20, 2010
See http://bankrupt.com/misc/casb10-06489.pdf
In Re George G. McConnell
Bankr. Colo. Case No. 10-19220
Chapter 11 Petition Filed April 20, 2010
Filed As Pro Se
In Re Mounsef International, Inc.
dba Al-Khyam Grocery
dba Al-Khyam Bakery
Bankr. N.D. Ill. Case No. 10-17513
Chapter 11 Petition Filed April 20, 2010
See http://bankrupt.com/misc/ilnb10-17513.pdf
In Re Fountain of Truth Christian Church, Inc.
Bankr. S.D. Ind. Case No. 10-05602
Chapter 11 Petition Filed April 20, 2010
See http://bankrupt.com/misc/insb10-05602.pdf
In Re J. and J., LLC
Bankr. Md. Case No. 10-18766
Chapter 11 Petition Filed April 20, 2010
See http://bankrupt.com/misc/mdb10-18766p.pdf
See http://bankrupt.com/misc/mdb10-18766c.pdf
In Re Advanced Growing Holdings, Inc.
aka Advanced Holdings, Inc.
Bankr. S.D. Miss. Case No. 10-50910
Chapter 11 Petition Filed April 20, 2010
See http://bankrupt.com/misc/mssb10-50910p.pdf
See http://bankrupt.com/misc/mssb10-50910c.pdf
In Re SAC D-1 LLC
Bankr. Nev. Case No. 10-51441
Chapter 11 Petition Filed April 20, 2010
See http://bankrupt.com/misc/nvb10-51441p.pdf
See http://bankrupt.com/misc/nvb10-51441c.pdf
In Re AtlanticSouth PowerGenerationSystems LLC
Bankr. W.D. N.C. Case No. 10-20105
Chapter 11 Petition Filed April 20, 2010
See http://bankrupt.com/misc/ncwb10-20105.pdf
In Re Jeffrey L. Boyd
dba Jeff Boyd Truck
dba Jeff Boyd
dba Jeff Boyd Trucking
Bankr. E.D. Pa. Case No. 10-13147
Chapter 11 Petition Filed April 20, 2010
See http://bankrupt.com/misc/paeb10-13147.pdf
In Re TH Properties, LLC
Bankr. E.D. Pa. Case No. 10-13157
Chapter 11 Petition Filed April 20, 2010
See http://bankrupt.com/misc/paeb10-13157.pdf
In Re Cafe Annice, Inc.
Bankr. S.D. Texas Case No. 10-33251
Chapter 11 Petition Filed April 20, 2010
See http://bankrupt.com/misc/txsb10-33251.pdf
In Re Digital Phone Works Inc.
Bankr. S.D. Texas Case No. 10-33234
Chapter 11 Petition Filed April 20, 2010
See http://bankrupt.com/misc/txsb10-33234p.pdf
See http://bankrupt.com/misc/txsb10-33234c.pdf
In Re Joan Stephen Liberty
fka Joan Stephen McNeary
Bankr. W.D. Wash. Case No. 10-14394
Chapter 11 Petition Filed April 20, 2010
See http://bankrupt.com/misc/wawb10-14394.pdf
In Re Jomar Holdings, Inc.
Bankr. W.D. Wash. Case No. 10-14400
Chapter 11 Petition Filed April 20, 2010
See http://bankrupt.com/misc/wawb10-14400.pdf
In Re Michael A. Halverson
Linda M. Halverson
fka Linda M. Bohnert
Bankr. W.D. Wis. Case No. 10-13064
Chapter 11 Petition Filed April 20, 2010
See http://bankrupt.com/misc/wiwb10-13064.pdf
*********
Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par. Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable. Those sources may not,
however, be complete or accurate. The Monday Bond Pricing table
is compiled on the Friday prior to publication. Prices reported
are not intended to reflect actual trades. Prices for actual
trades are probably different. Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind. It is likely that some entity
affiliated with a TCR editor holds some position in the issuers'
public debt and equity securities about which we report.
Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
share in public markets. At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets. A company may establish reserves on its balance sheet for
liabilities that may never materialize. The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.
A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the TCR. Submissions about insolvency-
related conferences are encouraged. Send announcements to
conferences@bankrupt.com/
On Thursdays, the TCR delivers a list of recently filed
Chapter 11 cases involving less than $1,000,000 in assets and
liabilities delivered to nation's bankruptcy courts. The list
includes links to freely downloadable images of these small-dollar
petitions in Acrobat PDF format.
Each Friday's edition of the TCR includes a review about a book of
interest to troubled company professionals. All titles are
available at your local bookstore or through Amazon.com. Go to
http://www.bankrupt.com/books/to order any title today.
Monthly Operating Reports are summarized in every Saturday edition
of the TCR.
The Sunday TCR delivers securitization rating news from the week
then-ending.
For copies of court documents filed in the District of Delaware,
please contact Vito at Parcels, Inc., at 302-658-9911. For
bankruptcy documents filed in cases pending outside the District
of Delaware, contact Ken Troubh at Nationwide Research &
Consulting at 207/791-2852.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter is a daily newsletter co-published
by Bankruptcy Creditors' Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland,
USA. Marites Claro, Joy Agravante, Rousel Elaine Tumanda, Howard
C. Tolentino, Joseph Medel C. Martirez, Denise Marie Varquez,
Philline Reluya, Ronald C. Sy, Joel Anthony G. Lopez, Cecil R.
Villacampa, Sheryl Joy P. Olano, Carlo Fernandez, Christopher G.
Patalinghug, and Peter A. Chapman, Editors.
Copyright 2010. All rights reserved. ISSN: 1520-9474.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers. Information contained
herein is obtained from sources believed to be reliable, but is
not guaranteed.
The TCR subscription rate is $775 for 6 months delivered via e-
mail. Additional e-mail subscriptions for members of the same
firm for the term of the initial subscription or balance thereof
are $25 each. For subscription information, contact Christopher
Beard at 240/629-3300.
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