/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/100423.mbx T R O U B L E D C O M P A N Y R E P O R T E R Friday, April 23, 2010, Vol. 14, No. 111 Headlines 650 SAN PEDRO: Case Summary & 2 Largest Unsecured Creditors ABITIBIBOWATER INC: Court Okays E&Y's Amended Scope of Work ABITIBIBOWATER INC: Court Okays Expansion of PwC Canada's Work ABITIBIBOWATER INC: Panel's Advisor Discloses Bear Island Protocol ABITIBIBOWATER INC: Court OKs Payment of $7.6MM Professional Fees AIRTRAN HOLDINGS: Open to Merger Talks, CEO Tells Investors AIRTRAN HOLDINGS: Reports $12 Million Net Loss for Q1 2010 AIRTRAN HOLDINGS: 2010 Stockholders' Meeting Set for May 18 AK STEEL: S&P Puts 'BB-' Corp. Rating on CreditWatch Positive ALERIS INT'L: Electronic Voting on Plan Permitted AMERICAN RENAL: Moody's Assigns 'B2' Corporate Family Rating AMERICAN TIRE: TPG Capital Buys Company for $1.3 Billion AMERICOLD WAREHOUSE: S&P Assigns 'B+' Corporate Credit Rating ASARCO LLC: Claims Objection Deadline Moved to June 11 ASARCO LLC: Files Status Report on Subsidiaries' Wind Down ASARCO LLC: Gets Extension of Plan Sec. 4.4 Deadlines BARK GROUP: Marcum LLP Raises Going Concern Doubt BARNEYS NEW: S&P Puts 'CCC' Rating on CreditWatch Positive BASHAS' INC: Wants to Keep $16-Million Art Collection BELA SHESTOPALOVA: Voluntary Chapter 11 Case Summary BON-TON STORES: S&P Raises Corporate Credit Rating to 'B' BRIER CREEK: Case Summary & 20 Largest Unsecured Creditors BROADSTRIPE LLC: Seeks Plan Exclusivity Until July 2 BUTTRUM GOODYEAR: Section 341(a) Meeting Scheduled for May 18 CALC: Gets Final NASDAQ Determination to Suspend Stock CALPINE CORPORATION: Moody's Affirms 'B2' Corporate Family Rating CASCADE ACCEPTANCE: Plan Outline Hearing Continued to May 14 CENTER FOR INTEGRATIVE CANCER: Case Summary & Creditors List CICM EQUIPMENT: Case Summary & 10 Largest Unsecured Creditors CIMINO BROKERAGE: Can Use Secured Creditors Cash Until May 31 CIRCUIT CITY: Card, et al., Want FRBP 7023 on Class Claim CIRCUIT CITY: Court OKs Sale of Louisville Property to Nicklies CIRCUIT CITY: Gets OK to Hire Alfred Siegel as CRO CITIZENS REPUBLIC: Trust Preferred Payment Deferral Continues CLEARPOINT BUSINESS: Posts $3,075,352 Net Loss for 2009 CONGOLEUM CORP: Reaches Litigation Settlement with Chartis CONSPIRACY ENTERTAINMENT: Reports $979,968 Net Loss for 2009 CONTINENTAL AIRLINES: US Airways Discontinues UAL Merger Talks CONTINENTAL AIRLINES: Said to Weigh No-Premium Stock Deal with UAL COOPER-STANDARD: Proposes Exit Financing Agreements COOPER-STANDARD: Files New Rule 2015.3 Report COOPER-STANDARD: RSM Richter Files Report on Plan COUNTRY GARDEN: Voluntary Chapter 11 Case Summary DAVID SMOLENSKY: Voluntary Chapter 11 Case Summary DBCH LLC: Voluntary Chapter 11 Case Summary DELTA MUTUAL: Cancels ValuCorp Deal for Interim CFO DELTA MUTUAL: Reports $850,091 Net Income for 2009 DEER VALLEY: Section 341(a) Meeting Scheduled for May 18 DIANA LEMUS: Case Summary & 8 Largest Unsecured Creditors DONALD DEMARCO: Voluntary Chapter 11 Case Summary DOUBLE G. RANCH: Voluntary Chapter 11 Case Summary EMISPHERE TECHNOLOGIES: Annual Stockholders Meeting on May 25 ENCORIUM GROUP: Deloitte and Touche Raises Going Concern Doubt ERICKSON RETIREMENT: Asks Court to Determine Tax Liability FANITA RANCH: Section 341(a) Meeting Scheduled for May 11 FOUNTAIN VILLAGE: Promises to Pay Unsecured Claims in Seven Years FRONTIER DRILLING: Moody's Cut Corp. Family Rating to 'Caa2' FX REAL ESTATE: FX Luxury Unit to Liquidate in Bankruptcy GARY MCLEAN: Case Summary & 15 Largest Unsecured Creditors GENERAL GROWTH: GE Capital Out of Creditors Committee GENERAL GROWTH: Proposes Elk Grove City Pact GENERAL GROWTH: White Marsh, 8 Others Emerge from Bankruptcy GENERAL GROWTH: Simon Property Group Beefs Up Offer GENERAL MOTORS: Repays Loans to U.S. Government & Canada's EDC GENERAL MOTORS: Has "Real Possibility" of IPO by Yearend GRAFTECH INTERNATIONAL: S&P Assigns Rating on $230 Mil. Notes GRAYL'S LANTERN: Case Summary & 20 Largest Unsecured Creditors HARMONY PARK: Taps Peter M. Lahni, Jr., as Chapter 11 Trustee HAWKER BEECHCRAFT: Inks Employment Contract with Worth Boisture HAWKINS PRECAST: Case Summary & 20 Largest Unsecured Creditors HEALTHSOUTH CORP: Picks Douglas Coltharp as Chief Fin'l Officer HICKS SPORTS: League "In Control" of Rangers Sale Process HPT DEVELOPMENT: Can Access Business Revenues Until June 30 HPT DEVELOPMENT: U.S. Trustee Unable to Form Creditors Panel HUNTER DEFENSE: Moody's Affirms 'B2' Corporate Family Rating IRVINE SENSORS: Inks Settlement and Release with Looney Entities JACOBS FINANCIAL: Feb. 28 Balance Sheet Upside-Down by $8.9-Mil. JOSHUA FARMER: Wants to Use Cash Collateral; Faces Objections KIRKLAND HUTCHESON: Wants Until April 29 to File Chapter 11 Plan LEE WONG: Case Summary & 20 Largest Unsecured Creditors LEHMAN BROTHERS: Fees to Bankruptcy Lawyers & Advisors Top $730MM LEHMAN BROTHERS: Court OKs Mediation to Resolve Disputed Claims LEHMAN BROTHERS: Investor Wins in Arbitration Case vs. UBS LEHMAN BROTHERS: LBI Proposes Deal with Client Money Claimants LEHMAN BROTHERS: UK Administrators Gain Control of $48 Bil. LIPSTICK BUILDING: Nears Foreclosure by Royal Bank of Canada LIVE NATION: S&P Raises Corporate Credit Rating to 'B+' MAJESTIC STAR: Panel Now Arguing Vessels Are Real Estate MARSH HAWK: Asks for Court OK to Use Cash Collateral MARLIN WASHINGTON: Voluntary Chapter 11 Case Summary MARSHALL GROUP: Chapter 11 Trustee Files Amended Plan Outline MASTER LEASE: Case Summary & 18 Largest Unsecured Creditors MATERA RIDGE: Taps Belding Harris to Handle Reorganization Case MDR DEVELOPMENTS: Voluntary Chapter 11 Case Summary MERIDIAN RESOURCE: Fortis Extends Forbearance Until May 7 MERIDIAN RESOURCE: Initial Payment Under Shell Oil Deal Extended MERIDIAN RESOURCE: Reports $72,636,000 Net Loss for 2009 METALS USA: Registers 5 Million Shares Under Incentive Plans METALS USA: To Redeem Senior Floating Rate Toggle Notes Due 2012 MID VALLEY: Case Summary & 20 Largest Unsecured Creditors MIRAMAX FILMS: Mark Cuban Is No Keen on Weinstein Deal MORTGAGE GUARANTY: Moody's Affirms 'Ba3' Insurance Strength Rating MPM TECHNOLOGIES: Reports $1,563,759 Net Loss for 2009 NATIONAL COAL: Completes Sale of Assets NEW CENTURY COS: Reports $14,920,862 Net Loss for 2009 NEW ENERGY SYSTEMS: Reports $5,837,395 Net Income for 2009 NEXTSAR BROADCASTING: Gets Requisite Consent to Solicit PIK NOTE NEXTMEDIA OPERATING: Moody's Puts 'B3' Corporate Family Rating NICHOLAS WOLFF: Voluntary Chapter 11 Case Summary NORTEL NETWORKS: Ericsson Buying 50% Interest in Korea JV NUTCREA: Completes Sale of Natural Glo, Satin Finish ORLEANS HOMEBUILDERS: Has $120 Million DIP Credit Facility PACIFIC DEVELOPMENT: U.S. Trustee Forms Creditors Committee PACIFIC ETHANOL: Issues 3,750,000 Shares to Socius PENSON WORLDWIDE: S&P Assigns 'BB' Counterparty Credit Rating PHEASANT RUN: Utilities Barred from Cutting Services PHEASANT RUN: Taps Stahl Cowen to Handle Reorganization Case PHILLIPS CATTLE: Case Summary & 20 Largest Unsecured Creditors PINNACLE POINT: Files for Chapter 11 Bankruptcy Protection PINNACLE POINT: Case Summary & 20 Largest Unsecured Creditors POSITRON CORP: Reports $5,749,000 Net Loss for 2009 PROLIANCE INT'L: Hearing on Plan Outline on May 19 PROVIDENCE SERVICE: S&P Raises Issue-Level Loan Ratings to 'BB' R STAR RESTAURANTS: Files for Chapter 11 Bankruptcy RADIANSE INC: Case Summary & 20 Largest Unsecured Creditors RBS GLOBAL: Moody's Upgrades Corporate Family Rating to 'B3' RCLC INC: May Sell Aviation Biz to Others if Hawthorne Deal Falls RCLC INC: Reports $4,713,000 Net Loss for 2009 RCLC INC: Wells Fargo Forbearance Expires Today REXNORD LLC: S&P Assigns 'B-' Rating on Senior Unsec. Debt RIDGE BLVD.: Voluntary Chapter 11 Case Summary RIVIERA HOLDING: Forms Office of CEO on Interim Basis RUSSELL COOLEY: Case Summary & 4 Largest Unsecured Creditors SAC II: Voluntary Chapter 11 Case Summary SANDY HOROWITZ: Former County Exec Coyne to Oversee Properties SECUREALERT INC: Completes Acquisition of Court Programs SECUREALERT INC: Increases Authorized Common Shares to 600-Mil. SECUREALERT INC: Raises $9.4MM in Cash & Converts $16.6MM in Debt SEVEN FALLS: Expects to Have Funding by May 18 SEVERN BANCORP: Reports 62% Improvement in First Quarter Results SMART ONLINE: Reports $9,540,871 Net Loss for 2009 SMART ONLINE: Restates FY2008 & 2009 Quarterly Financials SOUTH BAY EXPRESSWAY: Gets OK to Pay Business Taxes & Licenses SOUTH BAY EXPRESSWAY: Hearing on Further Cash Use on April 22 SOUTH BAY EXPRESSWAY: Sec. 341 Meeting Set for April 27 SOUTH BAY EXPRESSWAY: Sues to Void Mechanics Liens on Expressway SOUTH GATE: S&P Downgrades Rating on Bonds to 'BB-' SOUTHERN STATES: Moody's Assigns 'B3' Rating on $125 Mil. Notes SPANSION INC: Enter Two-Year Service Agreement With ChipMOS SPECIALTY ACQUISITION: Voluntary Chapter 11 Case Summary SPECIALTY TRUST: Voluntary Chapter 11 Case Summary STANDARD PACIFIC CORP: Post $5.1 Mil. Net Loss for 1st Quarter STERLING MINING: Silver Opportunity's $24MM Wins Auction STEVEN SCHULTZ: Case Summary & 20 Largest Unsecured Creditors STEVENS MASONRY: Voluntary Chapter 11 Case Summary STONEYBROOK CREEK: Case Summary & 3 Largest Unsecured Creditors TARRAGON CORPORATION: DIP Loan to Pay Westminster Approved TEKOIL & GAS: Plan of Reorganization Wins Court Approval TRACY MANAGEMENT: Voluntary Chapter 11 Case Summary TYLER FRAZIER: Case Summary & 20 Largest Unsecured Creditors UAL CORP: US Airways Discontinues Merger Talks UAL CORP: Continental Said to Weigh No-Premium Stock Deal UAL CORP: Boeing 777s Upgraded to Add New Perks UAL CORP: Circuit Court Affirms Denial of Carr Late Appeal UAL CORP: Offers Salary Increase to Flight Attendants UAL CORP: Satisfies Escrow Condition on Two Private Offerings US AIRWAYS: Discontinues Merger Talks with United US AIRWAYS: Inks Pacts With Delta on Takeoff & Landing Rights US AIRWAYS: Reports March 2010 Traffic Results VALENCE TECHNOLOGY: Regains Compliance with NASDAQ Rule VANITY EVENTS: Recurring Losses Prompt Going Concern Doubt VEBLEN WEST: Gets Interim Okay to Use AgStar's Cash Collateral VINEYARD NATIONAL: FDIC Claim May Wipe Out Unsecured's Recovery WASHINGTON MUTUAL: May Have Annual Shareholders' Meeting WASHINGTON MUTUAL: Asserts Counterclaim Against Equity Committee WASHINGTON MUTUAL: Broadbill Asserts Claim Over Breach of Contract XERIUM TECHNOLOGIES: Proposes AlixPartners as Fin'l Advisor XERIUM TECHNOLOGIES: Proposes Rothschild as Investment Banker XERIUM TECHNOLOGIES: Wants Baker & McKenzie as European Counsel * Credit Quality Improves Among Junk-Rated Companies, Says Moody's * BOOK REVIEW: Rupert Murdoch: Creator of a Worldwide Empire ********* 650 SAN PEDRO: Case Summary & 2 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: 650 San Pedro Road, LLC 250 Bel Marin Keys Blvd. Novato, CA 94949 Bankruptcy Case No.: 10-11415 Chapter 11 Petition Date: April 20, 2010 Court: United States Bankruptcy Court Northern District of California (Santa Rosa) Judge: Alan Jaroslovsky Debtor's Counsel: Stephen D. Finestone, Esq. Law Offices of Stephen D. Finestone 456 Montgomery St. 20th Fl. San Francisco, CA 94104 Tel: (415) 421-2624 E-mail: sfinestone@pobox.com Scheduled Assets: $1,500,500 Scheduled Debts: $1,885,093 A list of the Company's 2 largest unsecured creditors is available for free at http://bankrupt.com/misc/canb10-11415.pdf The petition was signed by Paul Thompson, president of managing member. ABITIBIBOWATER INC: Court Okays E&Y's Amended Scope of Work ----------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware approved a further amended statement of work with respect to the services to be rendered by Ernst & Young LLP to AbitibiBowater Inc. and its units. Judge Carey authorized the Debtors to expand the scope of Ernst & Young LLP's employment to provide additional tax services, consisting of state, local and indirect bankruptcy tax work or the "SALT Services," upon the terms and conditions contained in the additional statement of work, nunc pro tunc to January 11, 2010. As previously reported, the SALT Services include: (a) tax advisory services regarding the validity of tax claims in order to determine if the tax amount claimed correctly reflects the true tax liability pursuant to applicable tax law and/or bankruptcy protocols, including assistance with state and local tax examinations that may be ongoing in support of tax claims filed and tax advisory support for identifying and securing tax refunds; (b) advisory services and documentation, as appropriate or necessary, related to state and local bankruptcy tax analysis, and bankruptcy tax process and procedure support; and (c) testimony as a fact, but not expert, witness regarding E&Y work done on AbitibiBowater's state and local tax bankruptcy issues. Sean T. Greecher, Esq., at Young Conaway Stargatt & Taylor, LLP, in Wilmington, Delaware, said although the Debtors do not anticipate significant fees to be incurred for the SALT Services, they seek to utilize E&Y's expertise as the Chapter 11 claims are processed. In addition, the Debtors will also require E&Y to assist them with a potential Multistate Tax Commission election and associated amended Michigan Business Tax return or the "MTC Services," upon the terms and conditions contained in the additional statement of work, nunc pro tunc to December 7, 2009, which include: (a) analysis of AbitibiBowater's Michigan Business Tax return for the 2008 calendar year; (b) analysis of potential benefit arising from the MTC election available under Michigan law; and (c) implementation of the MTC election. E&Y has been diligently reviewing a recently enacted Michigan statute and apprising the Debtors of potential benefits that may stem from its application to the Debtors' payment of Michigan business taxes. The Debtors will retain E&Y on a contingency basis for the MTC Services. Consequently, the Debtors will only distribute the Savings Fee to E&Y if, and when, they are awarded a tax refund, a credit for taxes previously paid in prior periods, and a reduction in audit assessments. The Debtors will pay for the services of E&Y's professionals in accordance with these hourly rates: Title Hourly Rate ----- ----------- National Principal/Partner $630 Core Team Principal/Partner $500 National Executive Director $570 Core Team Executive Director $475 National Senior Manager $500 Senior Manager $410 Manager $310 Senior 3 $240 Senior 2 $220 Senior 1 $200 Staff $150 Intern $105 According to Mr. Greecher, the Debtors and E&Y have agreed to a findings-based fee in the amount of 25% of the gross savings achieved with respect to the MTC Services. Gross Savings refer to the inclusion of refunds of taxes plus interest, credits of taxes previously paid in prior periods, and reduction in audit assessments. The Savings Fee arrangement contemplated is reasonable in light of industry practice, market rates both in and out of Chapter 11 proceedings, E&Y's experience in these matters, and the scope of work to be performed by E&Y, Mr. Greecher avers. In addition, the Debtors will reimburse E&Y for expenses incurred in connection with the firm's performance of the Additional Tax Services. E&Y is a "disinterested person," as the term is defined under Section 101(14) of the Bankruptcy Code, Terry Huggins, a partner of E&Y, assured Judge Carey. About AbitibiBowater Inc. Headquartered in Montreal, Canada, AbitibiBowater Inc. -- http://www.abitibibowater.com/-- produces a wide range of newsprint, commercial printing papers, market pulp and wood products. It is the eighth largest publicly traded pulp and paper manufacturer in the world. AbitibiBowater owns or operates 23 pulp and paper facilities and 28 wood products facilities located in the United States, Canada, the United Kingdom and South Korea. Marketing its products in more than 90 countries, the Company is also among the world's largest recyclers of old newspapers and magazines, and has third-party certified 100% of its managed woodlands to sustainable forest management standards. AbitibiBowater's shares trade over-the-counter on the Pink Sheets and on the OTC Bulletin Board under the stock symbol ABWTQ. The Company and several of its affiliates filed for protection under Chapter 11 of the U.S. Bankruptcy Code on April 16, 2009 (Bankr. D. Del. Lead Case No. 09-11296). Judge Kevin J. Carey presides over the case. The Company and its Canadian affiliates commenced parallel restructuring proceedings under the Companies' Creditors Arrangement Act before the Quebec Superior Court Commercial Division the next day. Alex F. Morrison at Ernst & Young, Inc., was appointed CCAA monitor. Paul, Weiss, Rifkind, Wharton & Garrison LLP, serves as the Debtors' U.S. bankruptcy counsel. Stikeman Elliot LLP, acts as the Debtors' CCAA counsel. Young, Conaway, Stargatt & Taylor, in Wilmington, Delaware, serves as the Debtors' co-counsel, while Troutman Sanders LLP in New York, serves as the Debtors' conflicts counsel in the Chapter 11 proceedings. The Debtors' financial advisors are Advisory Services LP, and their noticing and claims agent is Epiq Bankruptcy Solutions LLC. The CCAA Monitor's counsel is Thornton, Grout & Finnigan LLP, in Toronto, Ontario. Abitibi-Consolidated Inc. and various Canadian subsidiaries filed for protection under Chapter 15 of the U.S. Bankruptcy Code on April 17, 2009 (Bankr. D. Del. 09-11348). Judge Carey also handles the Chapter 15 case. Pauline K. Morgan, Esq., and Sean T. Greecher, Esq., at Young, Conaway, Stargatt & Taylor, in Wilmington, represent the Chapter 15 Debtors. As of Sept. 30, 2008, the Company had $9,937,000,000 in total assets and $8,783,000,000 in total debts. Bankruptcy Creditors' Service, Inc., publishes AbitibiBowater Bankruptcy News. The newsletter provides gavel-to-gavel coverage of the Chapter 11 proceedings and parallel proceedings under the Companies' Creditors Arrangement Act in Canada undertaken by Abitibibowater Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). ABITIBIBOWATER INC: Court Okays Expansion of PwC Canada's Work -------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware approved AbitibiBowater Inc. and its units' supplemental application to expand the scope of the retention and employment of PricewaterhouseCoopers LLP (Canada) to include 2010 tax harmonization services, nunc pro tunc to January 14, 2010. As previously reported, the Debtors have employed PwC Canada for the provision of audit, audit-related and tax services, nunc pro tunc to the Petition Date. Pursuant to the 2010 Tax Harmonization Engagement Agreement, PwC will perform the 2010 Tax Harmonization Services, which include: (a) the preparation of an e-mail to inform key employees of the Debtors of the sales tax harmonization and its projected impact on the Debtors' operations; (b) the coordination of an initial meeting with designated personnel to provide them with an overview of the Harmonization, the implementation process and the related training of employees; (c) the coordination of brainstorming sessions with key personnel of the Debtors to assess the impact of the new Harmonized Sales Tax on the Debtors' operations and systems; (d) the provision of training sessions to the employees working in the Debtors' payables and procurement departments to facilitate a greater understanding of the new HST rules; and (e) the provision of assistance to the Debtors in performing studies to evaluate the percentage of energy used in the production of goods for sale at various manufacturing plants. PwC Canada will be paid in accordance with these hourly rates: Professional Hourly Rate ------------ ----------- Partner/Associate Partner C$615-C$680 Senior Manager/Manager C$425-C$600 Senior Associate/Associate C$175-C$300 Paraprofessional & Administrative Assistant C$100-C$140 In addition, the Debtors have agreed to reimburse PwC Canada for reasonable and documented expenses the firm incurred or will incur in connection with the performance of the 2010 Tax Harmonization Services. The PwC Canada professionals providing the 2010 Tax Harmonization Services will consult with internal PwC Canada and PricewaterhouseCoopers LLP US advisors to ensure compliance with the requirements of the Bankruptcy Code, as well as to decrease the overall fees associated with the administrative aspects of PwC Canada postpetition engagements. The 2010 Tax Harmonization Engagement Agreement provides that the Debtors will indemnify PwC Canada and its personnel, subcontractors and agents under certain circumstances. Jerry Whalen, a partner at PWC Canada, assured the Court that his firm is a "disinterested person" as the term defined under Section 101(14) of the Bankruptcy Code. 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's Advisor Discloses Bear Island Protocol ------------------------------------------------------------------ As previously reported, the Official Committee of Unsecured Creditors in AbitibiBowater Inc.'s Chapter 11 cases hired FTI Consulting, Inc., as their financial advisor. In a supplemental affidavit, Samuel Star -- samuel.star@fticonsulting.com -- a senior managing director at FTI Consulting, informed the U.S. Bankruptcy Court for the District of Delaware and parties-in-interest that his firm was selected on March 10, 2010, as financial advisor to the Official Committee of Unsecured Creditors in relation to the Chapter 11 case of Bear Island Paper Company LLC. Bear Island Paper Company and its parent, White Birch Paper Company, operate a paper mill that competes with the Debtors in the newsprint segment. In this light, FTI has established and will maintain these internal procedures: (i) Each FTI professional on the FTI-Abitibi Engagement and the Bear Island Engagement will execute a confidentiality letter acknowledging that he or she may receive certain non-public information and will execute an Ethical Wall Agreement; (ii) FTI-Abitibi Professionals will not directly or indirectly share any non-public information generated by, received from or relating to the FTI-Abitibi Engagement with FTI- Bear Island Professionals. Likewise, FTI-Bear Island Professionals will not directly or indirectly share any non-public information. (iii) FTI is setting up electronic internal security walls to ensure that only FTI employees involved directly with or working on the FTI-Abitibi Engagement may have access to the information relating to that Engagement. (iv) FTI will periodically monitor communications through electronic means among FTI-Abitibi Professionals and FTI- Bear Island Professionals to ensure that those exchanges are performed in a manner consistent with the information in the Screening Wall Procedures. (v) FTI will immediately disclose to the Creditors' Committee's counsel and the U.S. Trustee any material breaches of the Procedures. FTI does not represent any interest adverse to the AbitibiBowater's Creditors' Committee and remains a "disinterested person" as that term is defined under in Section 101(14), as modified by Section 1107(b), of the Bankruptcy Code, Mr. Star assures the Court. 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: Court OKs Payment of $7.6MM Professional Fees ----------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware approved the fee applications of Paul Hastings, Janofsky & Walker LLP; Bennett Jones LLP; FTI Consulting; Lazard Freres & Co. LLC; and Bayard P.A., as professionals rendering services to the Official Committee of Unsecured Creditors in AbitibiBowater, Inc., and its debtor-affiliates' Chapter 11 cases for the period August 1 to October 31, 2009, as recommended by Direct Fee Review LLC. The compensation amounts approved for the five Creditors' Committee- retained firms total approximately US$3.3 million and C$260,000. A schedule of the Creditors' Committee Professionals' fees and expenses is available at no charge at: http://bankrupt.com/misc/ABHFeeAppsCredCmteFirms_Aug-Oct2009.pdf The Court also allowed the payment of fees and reimbursement of expenses of these professionals in the Debtors' Chapter 11 cases, as approved by the Direct Fee, for certain periods between May 2009 to October 2009: * Young Conaway Stargatt & Taylor, LLP * Paul, Weiss, Rifkind, Wharton & Garrison LLP * Ernst & Young LLP * Deloitte Tax LLP * Troutman Sanders LLP * PricewaterhouseCoopers LLP, U.S. * Huron Consulting LLC * Blackstone Advisory Services L.P. * PricewaterhouseCoopers LLP (Canada) * Direct Fee Review LLC The Approved Fees, excluding the holdback amounts, total approximately $4.3 million. The Approved Expenses total approximately $360,000. A schedule of the Debtors' Professionals' fees and expenses is available at no charge at: http://bankrupt.com/misc/ABHFeeAppsCh11Firms_Aug-Oct2009.pdf Daniel A. O'Brien, Esq., at Bayard, P.A., in Wilmington, Delaware, -- dobrien@bayardlaw.com -- as co-counsel to the Creditors' Committee; and Sean T. Greecher, Esq., at Young Conaway Stargatt & Taylor, LLP, in Wilmington, Delaware, filed separate certifications with the Court with respect to the Fee Applications for the Reporting Period. In separate reports submitted to the Court, Direct Fee Review LLC, in its capacity as fee auditor, noted that for the period from November 1, 2009 through January 31, 2010, these firms indicated duplicative and "unnecessary" entries in the expenses they seek to be reimbursed: * FTI Consulting, Inc., as financial advisor to the Official Committee of Unsecured Creditors; * Bennett Jones LLP, as Canadian counsel to the Creditors' Committee; and * Young Conaway Stargatt & Taylor, LLP, as the Debtors' counsel. Accordingly, Direct Fee recommends the payment of fees and reimbursement of expenses to the Firms in these amounts: Firm Fees Expenses ----- ---------- -------- FTI Consulting, Inc. $825,000 $16,899 Young Conaway Stargatt $231,390 $35,183 & Taylor, LLP Bennett Jones LLP C$282,445 C$12,253 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). AIRTRAN HOLDINGS: Open to Merger Talks, CEO Tells Investors ----------------------------------------------------------- The Associated Press reports that AirTran Airways' CEO Robert Fornaro told investors during a conference call on April 21 that the Company would consider a combination with another carrier or a smaller transaction if approached and if such a deal made sense for the Company and shareholders. The conference call was held to discuss AirTran's first-quarter financial results. According to the AP, Mr. Fornaro said AirTran doesn't plan to initiate a deal with another airline. According to the report, Mr. Fornaro said "if someone took a peek at AirTran, we would always do our fiduciary duty to look at it and make sure we're looking out for shareholders." He also said that, "If we can benefit and play a role in a transaction, perhaps as a carve-out, we would certainly take a look at that." The AP recalls that AirTran made a $78 million hostile takeover bid for Midwest Airlines in June 2005. AirTran raised its offer several times, topping out with an offer worth an estimated $445 million when it was made in August 2007. Each time, its offer was rejected. Midwest ultimately agreed to be sold to private equity firm TPG Capital for about $450 million, and AirTran has said repeatedly since then that it was glad it didn't succeed in its bid. About AirTran Holdings Headquartered in Orlando Florida, AirTran Holdings Inc. (NYSE: AAI) -- http://www.airtran.com/-- through its wholly owned subsidiary, AirTran Airways, Inc., operates scheduled airline service throughout the United States and to selected international locations. As of February 1, 2010, the Company operated 86 Boeing B717-200 aircraft and 52 Boeing B737-700 aircraft offering approximately 700 scheduled flights per day to 63 locations in the United States, including San Juan, Puerto Rico, and to Orangestad, Aruba, Cancun, Mexico, and Nassau, The Bahamas. The Company's balance sheet as of Dec. 31, 2009, showed $2.3 billion in assets, $726.5 million of debts, and $501.9 million in stockholders' equity. * * * As reported by the Troubled Company Reporter on December 28, 2009, Moody's Investors Service raised its ratings of AirTran Holdings' corporate family and probability of default ratings each to Caa1 from Caa2. The 'Caa1' corporate family rating considers the still high leverage and AirTran's exposure to cyclical risks in the airline industry. The airline's carries a corporate credit rating of CCC+/Stable/-- from Standard & Poor's. AIRTRAN HOLDINGS: Reports $12 Million Net Loss for Q1 2010 ---------------------------------------------------------- AirTran Holdings, Inc., reported a net loss of $12.0 million or $0.09 per diluted share for the first quarter of 2010. Excluding $4.7 million in unrealized gains on future fuel hedges, the Company's net loss for the quarter would have been $16.7 million dollars or $0.12 per diluted share. AirTran said the impact of historic winter snowstorms along the Eastern Seaboard and more than a 50% increase in fuel expenses offset record total revenues for the first quarter. AirTran Airways experienced significant revenue improvement that accelerated through the quarter with total unit revenues increasing by a solid double-digit margin year-over-year in March. The Company posted record first quarter total revenues of $605.1 million on a record load factor of 77.2%. Operating costs increased 21.8% or $107.8 million as compared to the same period last year. Fuel was the single largest contributor to the cost increase, accounting for over 60% or $67.3 million of the increase. Last year, crude oil averaged $41 per barrel in the first quarter but has risen to $78 this year. Winter storms further pressured unit costs due to reduced capacity and additional expenses related to extreme weather during the quarter. "This winter proved to be one of historic inclement weather for much of the East Coast and particularly for some of our busiest operations like Baltimore/Washington and Atlanta," said Bob Fornaro, AirTran Airways' chairman, president and chief executive officer. "Even though the weather was tough this winter, we are experiencing significant revenue growth and passenger demand. We are well positioned for the future and are beginning to reap the rewards of our diversification efforts and the broader economic recovery." AirTran Airways' unrestricted cash position at quarter's end was $534 million and its revolving line of credit was undrawn. Based on current cost and revenue trends, AirTran Airways' outlook for the second quarter 2010 relative to the prior year is: -- Available seat miles (ASMs): increase approximately 4.0%; -- Total unit revenue per ASM (TRASM): increase 13.0% to 14.0%; -- Average economic cost per gallon of fuel, all-in: $2.37 to $2.42 -- Non-Fuel unit operating cost per ASM: increase 4.0% to 4.5% -- Non-Fuel unit operating cost per ASM, Full Year 2010: increase 4.0% to 5.0% A full-text copy of AirTran's earnings release is available at no charge at http://ResearchArchives.com/t/s?6094 About AirTran Holdings Headquartered in Orlando Florida, AirTran Holdings Inc. (NYSE: AAI) -- http://www.airtran.com/-- through its wholly owned subsidiary, AirTran Airways, Inc., operates scheduled airline service throughout the United States and to selected international locations. As of February 1, 2010, the Company operated 86 Boeing B717-200 aircraft and 52 Boeing B737-700 aircraft offering approximately 700 scheduled flights per day to 63 locations in the United States, including San Juan, Puerto Rico, and to Orangestad, Aruba, Cancun, Mexico, and Nassau, The Bahamas. The Company's balance sheet as of Dec. 31, 2009, showed $2.3 billion in assets, $726.5 million of debts, and $501.9 million in stockholders' equity. * * * As reported by the Troubled Company Reporter on December 28, 2009, Moody's Investors Service raised its ratings of AirTran Holdings' corporate family and probability of default ratings each to Caa1 from Caa2. The 'Caa1' corporate family rating considers the still high leverage and AirTran's exposure to cyclical risks in the airline industry. The airline's carries a corporate credit rating of CCC+/Stable/-- from Standard & Poor's. AIRTRAN HOLDINGS: 2010 Stockholders' Meeting Set for May 18 ----------------------------------------------------------- AirTran Holdings, Inc., will hold its 2010 Annual Meeting of Stockholders on May 18, 2010, at the Pfister Hotel, 424 E. Wisconsin Avenue, in Milwaukee, Wisconsin. The meeting will begin at 11:00 a.m., Central Daylight Time. Stockholders of record at the close of business on March 23, 2010, are entitled to vote at the annual meeting on these matters: (1) Elect three Class III directors for a term of three years each. (2) Ratify the appointment of Ernst & Young LLP as independent registered public accounting firm for 2010. (3) Other businesses that may properly come before the meeting. A full-text copy of the Company's proxy statement is available at no charge at http://ResearchArchives.com/t/s?6095 About AirTran Holdings Headquartered in Orlando Florida, AirTran Holdings Inc. (NYSE: AAI) -- http://www.airtran.com/-- through its wholly owned subsidiary, AirTran Airways, Inc., operates scheduled airline service throughout the United States and to selected international locations. As of February 1, 2010, the Company operated 86 Boeing B717-200 aircraft and 52 Boeing B737-700 aircraft offering approximately 700 scheduled flights per day to 63 locations in the United States, including San Juan, Puerto Rico, and to Orangestad, Aruba, Cancun, Mexico, and Nassau, The Bahamas. The Company's balance sheet as of Dec. 31, 2009, showed $2.3 billion in assets, $726.5 million of debts, and $501.9 million in stockholders' equity. * * * As reported by the Troubled Company Reporter on December 28, 2009, Moody's Investors Service raised its ratings of AirTran Holdings' corporate family and probability of default ratings each to Caa1 from Caa2. The 'Caa1' corporate family rating considers the still high leverage and AirTran's exposure to cyclical risks in the airline industry. The airline's carries a corporate credit rating of CCC+/Stable/-- from Standard & Poor's. AK STEEL: S&P Puts 'BB-' Corp. Rating on CreditWatch Positive ------------------------------------------------------------- Standard & Poor's Ratings Services said that it placed all of its ratings on AK Steel Holding Corp., including the 'BB-' corporate credit rating, on CreditWatch with positive implications. "The CreditWatch placement reflects the company's improving credit profile and S&P's expectations for better financial metrics by the end of 2010," said Standard & Poor's credit analyst Marie Shmaruk. After very weak performance in the first half of 2009, the company's operating results have been showing significant improvements, with first-quarter 2010 EBITDA of more than $100 million. These gains reflect improved industry conditions and pricing that should allow the company to strengthen its financial measures during the course of 2010, despite the risks of higher raw material costs. Although credit metrics remain relatively weak, reflecting weak quarters in 2009, a continuation of trends seen in the first quarter would result in credit measures more consistent with a higher rating, with adjusted debt to EBITDA of around 4x. The CreditWatch also reflects the company's lower adjusted debt levels, which were around $1.9 billion at the end of 2009, down from more than $3 billion in 2006. These improved levels stem from a combination of reduced book debt, which is currently around $600 million, and the company's proactive management of its pension and OPEB liabilities. In resolving the CreditWatch listing, S&P will assess the sustainability of the improved operating performance in light of increasing raw material costs. S&P will also review the company's financial policies, capital spending plans, and financial projections. If an upgrade were to occur it would likely be limited to one notch, given the company's relatively high adjusted debt and the uneven recovery in the company's end markets. S&P could affirm the rating at 'BB-' if S&P feel that margins will be squeezed by higher raw material costs or if S&P concludes that current improvements are unlikely to be sustained. ALERIS INT'L: Electronic Voting on Plan Permitted ------------------------------------------------- Bill Rochelle at Bloomberg News reports that Aleris International Inc. won approval from the Bankruptcy Court to allow electronic voting on its reorganization plan. While paper ballots are traditionally used in voting, Aleris was concerned that foreign creditors might miss the April 29 voting deadline after the volcanic eruption in Iceland shut down air service to Europe. Ballots that were mailed on time will be counted although arriving late. Aleris has support on the Plan from the Official Committee of Unsecured Creditors after reaching a settlement. Under the settlement, the amount of money available for payment to unsecured creditors under Class 5 was increased from an initial proposed amount of $4.0 million to $16.5 million. The confirmation hearing for the Plan has been scheduled for May 13, 2010. About Aleris International Aleris International, Inc., produces and sells aluminum rolled and extruded products. Aleris operates primarily through two reportable business segments: (i) global rolled and extruded products and (ii) global recycling. Headquartered in Beachwood, Ohio, a suburb of Cleveland, the Company operates over 40 production facilities in North America, Europe, South America and Asia, and employs approximately 8,400 employees. Aleris operates 27 production facilities in the United States with eight production facilities that provided rolled and extruded aluminum products and 19 recycling production plants. Aleris International, Inc., aka IMCO Recycling Inc., and various affiliates filed for bankruptcy on February 12, 2009 (Bankr. D. Del. Case No. 09-10478). The Hon. Brendan Linehan Shannon presides over the cases. Stephen Karotkin, Esq., and Debra A. Dandeneau, Esq., at Weil, Gotshal & Manges LLP in New York, serve as lead counsel for the Debtors. L. Katherine Good, Esq., and Paul Noble Heath, Esq., at Richards, Layton & Finger, P.A. In Wilmington, Delaware, serves as local counsel. Moelis & Company LLC, acts as financial advisors; Alvarez & Marsal LLC as restructuring advisors, and Kurtzman Carson Consultants LLC as claims and noticing agent for the Debtors. As of December 31, 2008, the Debtors had total assets of US$4,168,700,000; and total debts of US$3,978,699,000. Bankruptcy Creditors' Service, Inc., publishes Aleris International Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Aleris International, Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945- 7000) AMERICAN RENAL: Moody's Assigns 'B2' Corporate Family Rating ------------------------------------------------------------ Moody's Investors Service assigned a B2 Corporate Family and Probability of Default Rating to American Renal Holdings, Inc. Moody's also assigned a Ba3 (LGD2, 23%) rating to American Renal's proposed senior secured revolving credit facility and a B2 (LGD4, 53%) rating to the company's proposed senior secured notes. The rating outlook is stable. Moody's also assigned a Speculative Grade Liquidity Rating of SGL-2. This is the first time Moody's has assigned a rating to American Renal. Moody's understands that the proceeds of the notes will be used, along with an equity investment of $202 million to fund the $434 million acquisition of the company by Centerbridge Partners and management. American Renal's B2 Corporate Family Rating reflects the considerable financial leverage of the company following the transaction. The rating also considers the modest scale of the company and the expectation that American Renal will use available cash flow to aggressively grow through the development of de novo centers. Finally, the rating considers risks associated with the focus on the dialysis services marketplace and its high concentration of revenues from government based programs, which are subject to a change in reimbursement methodology on January 1, 2011. However, Moody's also considered the company's unique position in its focus on developing centers in partnership with practicing nephrologists, which has resulted in favorable operating performance and relatively rapid maturation of newly developed centers. The ratings also reflect the relatively stable business profile characterized by increasing incidences of end stage renal disease and the medical necessity of the service provided. The stable rating outlook reflects Moody's expectation that the company will continue to recruit and partner with nephrologist partners, which should drive treatment and top line growth. The stable outlook also reflects Moody's expectation that the company will look to grow primarily through de novo development of new centers, which is expected to constrain available free cash flow. However, Moody's acknowledges that these investments could be curtailed and maintenance capital spending is relatively modest, offering a level of cushion. The stable outlook also considers that the company will be able to adjust to the changes in Medicare reimbursement that will be implemented on January 1, 2011, without significant detriment to the credit metrics. The Speculative Grade Liquidity Rating of SGL-2 reflects the expectation that the company will maintain good liquidity for the four quarters following the transaction characterized by stable cash flow that should sufficiently fund all working capital and maintenance capital spending needs. Moody's also believe that the company's planned investment in de novo centers can be adequately funded from projected cash flows but will result in about breakeven free cash flow after considering these investments. Following is a summary of the ratings assigned. * Corporate Family Rating, B2 * Probability of Default Rating, B2 * $25 million senior secured revolving credit facility due 2015, Ba3 (LGD2, 23%) * $225 million senior secured notes due 2018, B2 (LGD4, 53%) * Speculative Grade Liquidity Rating, SGL-2 American Renal's ratings were assigned by evaluating factors Moody's believe are relevant to the credit profile of the issuer, such as i) the business risk and competitive position of the company versus others within its industry, ii) the capital structure and financial risk of the company, iii) the projected performance of the company over the near to intermediate term, and iv) management's track record of tolerance for risk. These attributes were compared against other issuers both within and outside of American Renal's core industry and American Renal's ratings are believed to be comparable to those other issuers of similar credit risk. Headquartered in Beverly, MA, American Renal is a provider of outpatient dialysis services to patients with chronic kidney failure. At March 31, 2010, American Renal, through its subsidiaries, operated 83 centers in 16 states. The centers are jointly owned by nephrologist partners. The company provides managerial, accounting, financial, technological and administrative support services to the joint venture partners. American Renal recognized approximately $263 million in revenue for the year ended December 31, 2009. AMERICAN TIRE: TPG Capital Buys Company for $1.3 Billion -------------------------------------------------------- American Tire Distributors Holdings, Inc., owned by affiliates of Investcorp, Berkshire Partners LLC and Greenbriar Equity Group LLC, has signed a definitive agreement to be acquired by affiliates of TPG Capital in a transaction valued at approximately $1.3 billion. Additional terms were not disclosed. The transaction is expected to close in the second quarter of 2010 and is subject to customary conditions, including receipt of applicable regulatory approvals. "This is an exciting time in the evolution of our company" said William Berry, President and CEO, American Tire Distributors. "We welcome our new partners at TPG, who share the same vision we do for the continued growth of the American Tire Distributors brand as significant growth opportunities remain and we continue to seize opportunities such as geographic expansion and online sales." "American Tire Distributors is a market leader that has demonstrated its ability to perform well over an extended period of time," said Kevin Burns, a partner at TPG. "We're investing behind a great management team and we look forward to working with them to continue to expand this successful franchise." David Tayeh, a Managing Director at Investcorp, said "Over the past five years management implemented a successful strategy that has built American Tire Distributors into the leading replacement tire distributor in the U.S. We are proud to have partnered with management in the development of the strategy and believe TPG is the ideal new partner for the company to support it through the next stage of its development and growth." The transaction has fully committed financing, consisting of a combination of equity to be invested by TPG Capital and debt financing to be provided by certain affiliates of Bank of America, Barclays Capital, General Electric Capital Corporation, RBC Capital Markets, UBS and Wells Fargo Capital Finance, part of Wells Fargo & Company. Barclays Capital, RBC Capital Markets and UBS Securities LLC served as financial advisors to TPG Capital in the transaction. BofA Merrill Lynch and Deutsche Bank acted as joint financial advisors to American Tire Distributors. As a result of the announcement, the planned public offering of American Tire Distributors stock will be suspended. About TPG Capital TPG Capital is the global buyout group of TPG, a private investment firm founded in 1992 with more than $48 billion of assets under management and offices in San Francisco, London, Hong Kong, New York, Fort Worth, Melbourne, Moscow, Mumbai, Paris, Luxembourg, Beijing, Shanghai, Singapore and Tokyo. TPG Capital invests in a variety of industries and has long maintained a strong presence in both retail and related manufacturing sectors. Significant investments have included Neiman Marcus, J.Crew, Burger King, PETCO, Ducati, Armstrong World Industries and Grohe. TPG Capital also controls numerous businesses in financial services, travel and entertainment, technology, media, telecommunications and healthcare. About Investcorp Investcorp -- http://www.investcorp.com/-- provides and manages alternative investment products. It has offices in New York, London and Bahrain and is publicly traded on the London Stock Exchange (IVC) and Bahrain Stock Exchange (INVCORP). Investcorp has five lines of business: private equity, hedge funds, real estate, technology investment, and Gulf growth capital. Founded in 1982, Investcorp has grown to become one of the largest and most diverse alternative investment managers in terms of both product offerings and geography. About Berkshire Partners LLC Berkshire Partners -- http://www.berkshirepartners.com/-- has invested in mid-sized companies for 25 years through seven investment funds with aggregate capital commitments of approximately $6.5 billion. Berkshire seeks transactions in which it can invest $50 million to $500 million of equity capital. Berkshire has developed specific industry experience in several areas, including retailing, consumer products, manufacturing, transportation, energy, business services and communications. Over the past two decades, Berkshire has been an investor in 100 operating companies with approximately $20 billion of acquisition value and combined revenues of over $22 billion. About Greenbriar Equity Group Greenbriar Equity Group LLC -- http://www.greenbriarequity.com/-- a private equity firm with $1.5 billion of limited partner capital commitments, focuses exclusively on the global transportation industry, including companies in the shipping, freight and passenger transport, aerospace & defense, automotive, logistics, and related sectors. Greenbriar's managing partners bring many decades of experience at the highest levels within the transportation industry. About American Tire Distributors Charlotte, North Carolina-based American Tire Distributors is the largest replacement tire distributor in the United States. Through a network of 83 distribution centers serving 37 states, American Tire Distributors offers access to a broad and deep inventory, representing 40,000 stock-keeping units, to 60,000 customers. The company provides tire retailers with a range of services, including frequent and timely delivery of inventory, business support services, such as credit, training and access to consumer market data, administration of tire manufacturer affiliate programs, an online ordering and reporting system and a Web site that enables its tire retailer customers to participate in Internet marketing of tires to consumers. * * * As reported by the Troubled Company Reporter on October 30, 2009, Standard & Poor's Ratings Services affirmed its 'B' corporate credit rating and other ratings on American Tire Distributors. AMERICOLD WAREHOUSE: S&P Assigns 'B+' Corporate Credit Rating ------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B+' corporate credit rating to Americold Warehouse Investment Portfolio LLC. S&P also assigned a 'BB' issue-level rating and '1' recovery rating to A-WHIP's proposed $300 million of senior secured notes due in 2020. The outlook is stable. "S&P's ratings on Atlanta-based A-WHIP reflect a financial risk profile with lease-adjusted credit ratios that are adequate for the rating, along with a liquidity position that is limited but sufficient to meet the company's capital needs, in S&P's view," said Standard & Poor's credit analyst George Skoufis. Additionally, A-WHIP is a wholly owned subsidiary of Americold Realty Trust (not rated), a more leveraged REIT with meaningful capital expenditure needs. A-WHIP's special-purpose portfolio and revenue base are small, and its typical tenant "rent and service" agreements are short; however, the company has a good market position in the temperature-controlled warehouse industry, which, in S&P's view, is somewhat more recession-resistant than other real estate asset types and has historically produced steady margins. S&P's stable outlook reflects its view that A-WHIP's cash flow and debt coverage measures should remain relatively stable due to the historically more recession-resistant TCW business and the limited capital needs of A-WHIP's portfolio. S&P would consider lowering its ratings if cash flow deteriorates, possibly due to weaker- than-expected margins, resulting in coverage metrics that fall below the 2x that S&P's scenario analysis contemplates. S&P view an upgrade as unlikely in the near term. However, improved profitability (perhaps through occupancy gains or margin improvement) could drive positive rating momentum, as would more cushion under current covenants, which would improve the financial risk profile. S&P would also need to see an improved parent-level financial profile to consider an upgrade. ASARCO LLC: Claims Objection Deadline Moved to June 11 ------------------------------------------------------ Mark A. Roberts of Alvarez and Marsal North America LLC, reorganized Asarco's Chapter 11 Plan Administrator, sought and obtained an order from the U.S. Bankruptcy Court for the Southern District of Texas for an extension of his deadline to object to claims pursuant to Section 14.2 of the Confirmed Plan of Reorganization and Rule 9006(b)(1)(1) of the Federal Rules of Bankruptcy Procedure, through and including June 11, 2010. The first extended claims objection deadline expired on April 12, 2010. The Plan Administrator said he sought the extension out of an abundance of caution to prevent any unmeritorious claims from becoming allowed merely by the passage of time. According to Dion W. Hayes, Esq., at McGuirewoods LLP, in Richmond, Virginia -- dhayes@mcguirewoods.com -- the Plan Administrator distributed approximately $3.359 billion on account of Allowed Claims on or immediately following the effective date of the Plan on December 9, 2009. Since the Effective Date, the Plan Administrator has distributed approximately another $25 million as other Disputed Claims have become Allowed, and there are only approximately 420 remaining Disputed Claims, Mr. Hayes noted. Mr. Hayes contended that the requested extension will not prejudice the holders of Disputed Claims because Postpetition Interest continues to accrue and will be paid on the Allowed Amount, if any, of a Disputed Class 3 Claim, if and when it becomes an Allowed Claim. Accordingly, he asserted, cause exists to extend the deadline. About Asarco LLC Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. ASARCO LLC filed for Chapter 11 protection on August 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). Attorneys at Baker Botts L.L.P., and Jordan, Hyden, Womble & Culbreth, P.C., represented the Debtor in its restructuring efforts. On December 9, 2009, Grupo Mexico, S.A.B. consummated the Chapter 11 plan that it sponsored for Asarco LLC. The Plan, which was confirmed both by the bankruptcy and district courts, reintegrated Asarco LLC back to parent Grupo Mexico concluding the four-year Chapter 11 proceeding. Bankruptcy Creditors' Service, Inc., publishes ASARCO Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by ASARCO LLC and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) ASARCO LLC: Files Status Report on Subsidiaries' Wind Down ---------------------------------------------------------- Reorganized ASARCO LLC filed its status report as of April 8, 2010, on the wind down and liquidation process of certain Subsidiary Debtors pursuant to the supplemental confirmation order entered by the United States District Court for the Southern District of Texas on December 4, 2009. The Subsidiary Debtors are: (1) Lac d'Amiante du Quebec Ltee, formerly known as Lake Asbestos of Quebec, Ltd.; (2) Lake Asbestos of Quebec, Ltd.; (3) LAQ Canada, Ltd.; (4) CAPCO Pipe Company, Inc., formerly known as Cement Asbestos Products Company; and (5) Cement Asbestos Products Company. According to the Status Report, ASARCO LLC has not yet completed its analysis with respect to which Subsidiary Debtor's assets were transferred under the Confirmed Plan in connection with the environmental settlements, and which assets remain property of each Subsidiary Debtor. ASARCO LLC says it continues to evaluate a number of issues in connection with winding down and liquidating each Subsidiary Debtor, including the timing of any dissolution, propriety of the dissolution, and whether the dissolution creates additional liabilities, which may not be beneficial to ASARCO's current business plans. In the alternative, ASARCO LLC informs Judge Schmidt that it is considering several different structures for winding down and liquidating the Subsidiary Debtors and considering the tax and other implications associated with those structures. Moreover, because the stock holdings in virtually all of the Subsidiary Debtors have been pledged as collateral to secure the ASARCO Note given to the Section 524(g) Trust under the Plan, ASARCO LLC says it is evaluating whether any wind down or liquidation should wait until the full satisfaction of the ASARCO Note. About Asarco LLC Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. ASARCO LLC filed for Chapter 11 protection on August 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). Attorneys at Baker Botts L.L.P., and Jordan, Hyden, Womble & Culbreth, P.C., represented the Debtor in its restructuring efforts. On December 9, 2009, Grupo Mexico, S.A.B. consummated the Chapter 11 plan that it sponsored for Asarco LLC. The Plan, which was confirmed both by the bankruptcy and district courts, reintegrated Asarco LLC back to parent Grupo Mexico concluding the four-year Chapter 11 proceeding. Bankruptcy Creditors' Service, Inc., publishes ASARCO Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by ASARCO LLC and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) ASARCO LLC: Gets Extension of Plan Sec. 4.4 Deadlines ----------------------------------------------------- Mark A. Roberts, as the Reorganized Debtors' Plan Administrator, and ASARCO LLC jointly ask Judge Schmidt to extend certain deadlines set forth in the Court's first scheduling order governing requests under Section 4.4 of the Confirmed Plan of Reorganization. Motions under Section 4.4 of the Confirmed Plan seek additional postpetition interest and attorneys' fees. The joint request follows several discovery conferences during which it became a real concern that certain discovery propounded by the Plan Administrator and ASARCO LLC may not be produced absent Court intervention, Dion W. Hayes, Esq., at McGuirewoods LLP, in Richmond, Virginia, tells Judge Schmidt. The relief requested is necessary, Mr. Hayes argues, because several parties that filed Section 4.4 Motions have: (a) failed to produce timely certain documents and other information requested by the Plan Administrator and ASARCO LLC in their discovery requests served on March 1, 2010; (b) requested additional time to respond to the Plan Administrator and ASARCO LLC's Discovery Requests; and (c) requested a continuance of certain currently scheduled depositions. Accordingly, the Plan Administrator and ASARCO LLC ask Judge Schmidt to extend to these dates the deadline to complete discovery and other related deadlines: -- June 15, 2010, as the deadline for depositions and third- party discovery; -- July 13, 2010, as the deadline for filing final objections; -- July 27, 2010, as the deadline for the Section 4.4 Parties to file replies to the Final Objections. All other deadlines in the Scheduling Order would remain the same, and all deadlines that have expired would not be extended or revived in any way. Moreover, the separately negotiated deadlines for responding to the Discovery Requests would not be disturbed. Mr. Hayes contends that approval of the extension request will facilitate possible compromises to the discovery disputes and will foster settlement discussions, which the Plan Administrator and ASARCO LLC have already commenced, or shortly will commence, with certain of the Section 4.4 Parties. He points out that there is no feasible way to resolve those disputes and complete discovery prior to the existing discovery deadline of April 16, 2010. In response to the joint request, Mitsui & Co. (U.S.A.), Inc., Ginrei, Inc., and MSB Copper Corp., the Plan Administrator's self-imposed deadlines are unnecessary and unrealistic. Mitsui, therefore, suggests that there is no urgency regarding the resolution of its Section 4.4 Motion, that no purpose is served by any "artificial deadlines" relating to the Section 4.4 Motions, and that the deadlines, at least as to Mitsui's claim, should be suspended pending further Court order. Certain holders of General Unsecured Claims object to the joint motion arguing that it is a blatant, transparent litigation tactic intended to grind out a victory by forcing creditors to reach into their pockets to fund an already long, burdensome process against well-funded parties -- the Plan Administrator and Reorganized ASARCO -- to whom cost is not an issue. * * * Upon review of the joint, Judge Schmidt sets these schedules with respect to the Section 4.4 Motions: -- May 17, 2010 is the deadline for depositions and third-party discovery. -- June 1, 2010 is the deadline for filing final objection to any of the Section 4.4 Motions, if all discovery is completed by May 17, 2010. -- June 15, 2010 is the deadline for the Section 4.4 Parties to file replies to the Final Objections. The extended deadlines supersede and replace all separately negotiated extended deadlines related to the Section 4.4 Motions, except those separately negotiated deadlines for responding to any outstanding Discovery Requests served by the Plan Administrator and ASARCO, which remain unchanged by the order, Judge Schmidt clarifies. About Asarco LLC Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. ASARCO LLC filed for Chapter 11 protection on August 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). Attorneys at Baker Botts L.L.P., and Jordan, Hyden, Womble & Culbreth, P.C., represented the Debtor in its restructuring efforts. On December 9, 2009, Grupo Mexico, S.A.B. consummated the Chapter 11 plan that it sponsored for Asarco LLC. The Plan, which was confirmed both by the bankruptcy and district courts, reintegrated Asarco LLC back to parent Grupo Mexico concluding the four-year Chapter 11 proceeding. Bankruptcy Creditors' Service, Inc., publishes ASARCO Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by ASARCO LLC and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) BARK GROUP: Marcum LLP Raises Going Concern Doubt ------------------------------------------------- Bark Group Inc. filed on April 19, its annual report on Form 10-K for the year ended December 31, 2009. Marcum LLP, in New York, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has not achieved a sufficient level of revenues to support its business and has suffered recurring losses from operations. The Company reported a net loss of $2,569,000 on $3,867,000 of revenue for 2009, compared with a net loss of $3,197,000 on $8,683,000 of revenue for 2008. The Company's balance sheet as of December 31, 2009, showed $9,702,000 in assets, $11,372,000 of debts, and $1,301,000 of non- controlling interests, for a stockholders' deficit of $2,971,000. A full-text copy of the annual report is available for free at: http://researcharchives.com/t/s?6087 About Bark Group Based in Copenhagen K, Denmark, Bark Group Inc. (OTC BB: BKPG) -- http://bark-group.com/-- formerly Exwal Inc., is a commercial communication services company that provides integrated traditional and new media advertising and marketing consulting services to its clients. Clients are comprised primarily of European businesses that range in size from small local businesses to larger trans-national and multi-national corporations. These clients include a range of businesses including financial institutions and banks, consumer products companies and luxury goods companies. BARNEYS NEW: S&P Puts 'CCC' Rating on CreditWatch Positive ---------------------------------------------------------- Standard & Poor's Ratings Services said it placed its ratings on New York City-based retailer Barneys New York Inc. including the 'CCC' corporate credit rating, on CreditWatch with positive implications. "This action reflects S&P's expectation for meaningful improvement during the fourth quarter of 2009 and first half of 2010 due to spending increases by luxury consumers," said Standard & Poor's credit analyst David Kuntz, "as well as weak comparables during the first half of 2009." S&P believes that performance over the near term will be similar to that of other upscale department stores, such as Neiman Marcus and Saks. Additionally, S&P anticipates that the liquidity situation will continue to improve over the near term due to performance gains. However, despite the strengthening of operations, S&P expects that the company's credit protection profile will remain very weak. "S&P would consider raising the rating," added Mr. Kuntz, "if, in its estimation, performance has improved to such an extent that the company is able to fund working capital and capital expenditure needs through cash on hand, cash flow from operations, and availability under its $280 million revolving credit facility." Additionally, S&P would look for some modest liquidity cushion in the future that could potentially absorb some weakening of performance, although S&P does not expect this to occur. BASHAS' INC: Wants to Keep $16-Million Art Collection ----------------------------------------------------- According to Victoria Advocate, Bashas' Inc. and its creditors are fighting over a $16 million art collection put together by the Company's chairman Eddie Basha and Zelma Basha Salmeri. The Company's creditors have been pressing to have the collection sold to pay debts. About Bashas' Inc. Bashas' Inc. is a 77-year-old grocery chain that owns 158 retail stores located throughout Arizona. It is doing business as National Grocery, Bashas Food, Bashas' United Drug, Food City, Eddie's Country Store, A,.J. Fine Foods, Western Produce, Bashas' Distribution Center, Sportsman's, and Bashas' Dine. The Company and its affiliates filed for Chapter 11 bankruptcy protection on July 12, 2009 (Bankr. D. Ariz. Case No. 09-16050). Frederick J. Petersen, Esq., at Mesch, Clark & Rothschild, P.C., assists the Debtors in their restructuring efforts. Michael W. Carmel, Ltd., is the Debtors' co-counsel. Deloitte Financial Advisory LLP serves as financial advisors. Epiq Bankruptcy Solutions, LLC, serves as claims and notice agent. In its bankruptcy petition, Bashas' listed $100 million to $500 million each in assets and debts. BELA SHESTOPALOVA: Voluntary Chapter 11 Case Summary ---------------------------------------------------- Debtor: Bela Shestopalova 12405 Glen Mill Road Potomac, MD 20854 Bankruptcy Case No.: 10-18693 Chapter 11 Petition Date: April 20, 2010 Court: U.S. Bankruptcy Court District of Maryland (Greenbelt) Judge: Wendelin I. Lipp Debtor's Counsel: Richard H. Gins, Esq. The Law Office of Richard H. Gins, LLC 3 Bethesda Metro Center, Suite 530 Bethesda, MD 20814 Tel: (301) 718-1078 Fax: (301) 718-8359 E-mail: richard@ginslaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of creditors together with its petition. The petition was signed by the Debtor. BON-TON STORES: S&P Raises Corporate Credit Rating to 'B' --------------------------------------------------------- Standard & Poor's Ratings Services said that it raised its corporate credit rating on York, Pa.-based Bon-Ton Stores Inc. to 'B' from 'B-'. At the same time, S&P raised the issue-level rating on the company's unsecured debt to 'CCC+' from 'CCC'. The recovery rating remains unchanged at '6'. "The upgrade reflects the significant improvement in operations over the past year coupled with modest debt repayment, which has resulted in a substantial enhancement to the company's credit protection metrics," said Standard & Poor's credit analyst David Kuntz. "The stable ratings outlook reflects S&P's view that performance will continue its positive momentum over the near term and that the company will use some of its available cash to repay outstandings under its revolver." The ratings on Bon-Ton reflect the company's relatively small scale in the highly competitive department store sector, historical difficulties in growing revenues, aside from acquisitions, and highly leveraged capital structure coupled with thin cash flow protection measures. The company has been a consolidator in the department store sector, making important acquisitions in 2003 and 2006. The latter came when Bon-Ton purchased Northern Department Store Group (Carson's) from Saks Inc. With 278 stores located in 23 states, the company is still much smaller than some of its principal competitors, such as J.C. Penney Co. Inc., Kohl's Corp., and Macy's Inc. The stable ratings outlook reflects S&P's expectations that operations will likely trend modestly positive and the company will use some of its available cash flow to repay outstandings under its revolver over the next year. S&P expects revenue growth will be in the low single digits and that margins will remain in- line with recent historical trends as positive operating leverage offsets some increase in expenses. S&P could raise the rating if the company is able to increase sales above expectations and achieve modest margin gains. At that time, sales growth would be above 5% and margins would increase 50 basis points, resulting in leverage in the mid-4.0x range. S&P could lower the rating if sales turn negative due to weak economic conditions or merchandise issues and margins slip slightly as the company loses focus on cost controls. At the time, leverage would increase meaningfully above 6.0x. BRIER CREEK: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Brier Creek FC, LLC dba The Exchange at Brier Creek 8900 Keystone Crossing, Suite 1200 Indianapolis, IN 46240 Bankruptcy Case No.: 10-05645 Chapter 11 Petition Date: April 20, 2010 Court: U.S. Bankruptcy Court Southern District of Indiana (Indianapolis) Judge: Anthony J. Metz III Debtor's Counsel: Wendy D. Brewer, Esq. Barnes & Thornburg LLP 11 S Meridian Street Indianapolis, IN 46204 Tel: (317) 236-1313 Fax: (317) 231-7433 E-mail: wendy.brewer@btlaw.com Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $10,000,001 to $50,000,000 The petition was signed by David M. Flaherty, managing member. Debtor's List of 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ LC Investors, LLC Loan $3,000,000 6467 Holliday Drive East Indianapolis, IN 46260 Flaherty & Collins Development Unpaid $1,240,273 8900 Keystone Crossing, Suite 1200 development fee Indianapolis, IN 46240 Flaherty & Collins Construction Unpaid $981,880 8900 Keystone Crossing, Suite 1200 construction Indianapolis, IN 46240 costs and amounts loaned Flaherty & Collins Construction Trade debt $124,398 Flaherty & Collins Management Trade debt $102,804 Cort Furniture, Inc. Trade debt $18,629 American Asset Corporation, Inc. Trade debt $17,903 Flaherty & Collins Properties Trade debt $10,815 Roto Rooter Trade debt $8,007 CTI Property Services, Inc. Trade debt $3,652 Valet Waste, LLC Utility $3,548 North American Lawn & Trade debt $3,355 Landscape, LLC Wilmar Industries, Inc. Trade debt $3,203 East Coast Fire Protection Trade debt $3,047 Appliance Warehouse of America Trade debt $2,661 Consumer Source, Inc. Trade debt $2,188 HD Supply Facilities Trade debt $2,093 Maintenance, LTD For Rent Media Solutions Trade debt $1,004 Economy Exterminators, Inc. Trade debt $875 Network Communications, Inc. Trade debt $710 BROADSTRIPE LLC: Seeks Plan Exclusivity Until July 2 ---------------------------------------------------- Bill Rochelle at Bloomberg News reports that Broadstripe LLC is seeking a July 2 extension of its exclusive period to propose a Chapter 11 plan. The Bankruptcy Court will consider the Debtor's request for a fifth extension at a hearing on May 4. According to the report, Broadstripe, which has already filed a reorganization plan, said it's not feasible to complete the case until a suit by the unsecured creditors' committee is resolved, which contends that claims of the secured lenders should be subordinated or recharacterized as equity. Broadstripe says the suit will have a "profound effect" on the distribution to creditors. In addition, the committee vows to oppose a plan that validates secured claims, while the lenders promise to defeat a plan that doesn't uphold their claims. In addition, Broadstripe, according to the report, says there are two claims by rival cable operators totaling almost $160 million for alleged failures to complete asset purchase agreements. The company says the outcome likewise will have a "profound impact" on a plan because the claims would be 10 times greater than other unsecured creditors combined. About Broadstripe LLC Headquartered in Chesterfield, Missouri, Broadstripe LLC -- http://www.broadstripe.com/-- provides videos and telephone services to consumers and business in Maryland, Michigan, Washington and Oregon. The Company and five of its affiliates filed for Chapter 11 protection on January 2, 2009 (Bankr. D. Del. Lead Case No. 09-10006). Attorneys at Ashby & Geddes, and Gardere Wynne Sewell LLP represent the Debtors in their restructuring efforts. The Debtors tapped FTI Consulting Inc. as their restructuring consultant, and Epiq Bankruptcy Consultants LLC as their claims agent. In its petition, Broadstripe listed assets and debts between $100 million and $500 million. BUTTRUM GOODYEAR: Section 341(a) Meeting Scheduled for May 18 ------------------------------------------------------------- The U.S. Trustee for Region 14 will convene a meeting of Buttrum Goodyear Commerce Center, LLC's creditors on May 18, 2010, at 10:00 a.m. The meeting will be held at the US Trustee Meeting Room, 230 N. First Avenue, Suite 102, Phoenix, AZ (341-PHX). This is the first meeting of creditors required under Section 341(a) of the U.S. Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Phoenix, Arizona-based Buttrum Goodyear Commerce Center, LLC, filed for Chapter 11 bankruptcy protection on April 13, 2010 (Bankr. D. Ariz. Case No. 10-10712). Don C. Fletcher, Esq., at Lake and Cobb, assists the Company in its restructuring effort. The Company estimated its assets and debts at $10,000,001 to $50,000,000. CALC: Gets Final NASDAQ Determination to Suspend Stock ------------------------------------------------------ California Coastal Communities, Inc., has been informed that the NASDAQ Listing and Hearing Review Council has declined to call for review the NASDAQ Hearings Panel's prior determination to delist the Company's common stock, which will result in the stock ceasing to be traded on The NASDAQ Stock Market effective at the open of trading on April 27, 2010. At that time, the common stock will be eligible to trade over-the-counter in the recently created OTCQB(TM) marketplace. This new comprehensive over-the-counter market tier includes the securities of over 768 SEC reporting companies and banks formerly designated as Pink Sheets(R) stocks, in addition to the 3,050 securities that are currently quoted in both Pink OTC Markets' electronic interdealer quotation system and FINRA's OTCBB(TM). All securities in the new OTCQB tier are displayed on http://www.otcmarkets.com/with an icon reading, "OTCQB - U.S. Registered." The Company was hopeful that the Listing Council would look favorably upon the fact that the Company is in full compliance with all applicable quantitative requirements for continued listing requirements of The NASDAQ Global Market. In that regard, the Panel's delisting decision was discretionary and appeared to be based primarily on the Company's inability to emerge from its voluntary Chapter 11 bankruptcy proceedings by April 26, 2010. The Company commenced the Chapter 11 proceedings on October 27, 2009, in order to extend the maturity dates and change the repayment schedules for its approximately $182 million of Brightwater credit facilities debt in order to be able to repay the debt in full by June 30, 2014, based on currently expected home sales during the next four years. As previously reported, the Company received a delisting notice from the NASDAQ Staff the day after commencing the Chapter 11 proceedings. The Company appealed the Staff's decision to the Panel and, in December 2009, the Panel granted the Company's request for continued listing on NASDAQ until April 26, 2010, upon which date the Company is presently required by the Panel's decision to have emerged from the Chapter 11 process. However, events beyond the Company's control such as the sale of loan positions by certain syndicate members of the Brightwater credit facilities, including KeyBank which was the agent for the lending syndicates, to new parties have caused delays in the Chapter 11 process that make it impossible for the Company to meet the April 26 NASDAQ deadline. The Company filed its plan of reorganization on March 26, 2010, a hearing on its disclosure statement is scheduled for May 12, 2010, and the Company is striving to exit bankruptcy as expeditiously as possible. Therefore, the Company requested that the Panel extend its deadline so that the common stock would remain listed while the Company completes the Chapter 11 process. When the Panel refused to grant any further extension, the Company submitted the matter to the Listing Council. However, the Listing Council elected not to exercise its discretion to call the Company's matter for review or to grant a stay of the Panel's delisting determination. As a result, the Company's common stock is scheduled to be suspended from trading effective at the open of the market on April 27, 2010. The Company has filed an application with NASDAQ seeking the relisting of its securities on The NASDAQ Stock Market following the Company's emergence from the Chapter 11 process. In that regard, all companies, whether listed on NASDAQ or not, are required to satisfy the initial listing requirements upon emergence from a Chapter 11 process to qualify for listing. While the Company plans to take all necessary steps to ensure its compliance with the applicable requirements, there can be no assurance as to whether or when the Company's common stock will be relisted on NASDAQ. Finally, investors should be aware that trading of the Company's common stock in the over-the-counter market rather than on NASDAQ may negatively impact the trading price and the levels of liquidity. About California Coastal The Company is a residential land development and homebuilding company operating in Southern California. The Company's principal subsidiaries are Hearthside Homes which is a homebuilding company, and Signal Landmark which owns 105 acres on the Bolsa Chica mesa where sales commenced in August 2007 at the 356-home Brightwater community. Hearthside Homes has delivered over 2,300 homes to families throughout Southern California since its formation in 1994. CALPINE CORPORATION: Moody's Affirms 'B2' Corporate Family Rating ----------------------------------------------------------------- Moody's Investors Service affirmed the ratings of Calpine Corporation including its Corporate Family Rating at B2, its speculative grade liquidity rating of SGL-2 as well as the B1 rating for Calpine Construction Finance Company, L.P.'s senior secured notes. The rating outlook for Calpine and CCFC is positive. The rating affirmation and the continuation of the positive rating outlook follow the announcement that Calpine would acquire 4,490 megawatts of unregulated generation assets owned by Connectiv Energy, a PEPCO Holdings subsidiary, for approximately $1.65 billion. "We consider Calpine's purchase of Connectiv's generation assets as a credit positive event", stated A.J. Sabatelle, Senior Vice President of Moody's. "Calpine's credit metrics for 2010 should remain in line with 2009 results and should continue trending positively, once a full year of Connectiv's operations are considered", added Sabatelle. The rating affirmation and maintenance of a positive rating outlook reflects the company's continuing improvement in its financial performance, and the expectation for similar financial results through 2010 following the company's acquisition of Connectiv's generation assets. At December 31, 2009, Moody's calculates the ratio of Calpine's cash flow to debt at 7.2%, its cash flow coverage of interest at nearly 2.0x and its free cash flow to debt at 5.9%. All of these metrics represent a meaningful improvement from year-end 2008. Moody's rating and positive rating outlook incorporates a belief that Calpine should be able to meet or exceed 2009 credit metrics over the next 12 months. These financial measures, which incorporate Moody's standard adjustments, are consistent with the financial measures of other B-rated unregulated wholesale power companies. The rating action considers the incremental and fairly predictable contribution to Calpine's earnings and cash flow principally derived from PJM capacity contracts, and the increased diversification to operations, as the transaction greatly increases Calpine's footprint in PJM. While about 30% of the capacity acquired is old and less efficient, all of the capacity receives some form of capacity payment, which should continue given the locational value of several of these assets. From a valuation perspective, Moody's believe that the price paid by Calpine appears attractive even if one ascribes no value to approximately 1,500 mw of older, less efficient fossil-fuel assets. As a point of reference, Moody's calculates that Calpine is selling two of its natural gas plants to a utility for $794 / KW, which equates to a value that is about 40% higher than what Calpine is paying for Connectiv's newest and most efficient generation assets. Moody's understands that Calpine has arranged a $1.3 billion secured term loan which along with cash on hand will be used to finance this acquisition. Importantly, two weeks ago, Calpine agreed to sell its Rocky Mountain and Blue Spruce natural-gas fired generation plants to Public Service Company of Colorado for $739 million, which when completed will reduce consolidated debt by $400 million and provide Calpine with net cash proceeds of around $400 million. Completion of this asset sale is an important consideration in the rating action. The speculative grade rating of SGL-2 reflects Moody's view that Calpine will have good liquidity over the next 12 months based upon internal cash flow generation, balance sheet liquidity, and headroom under the company's covenants. During 2009, Moody's calculates Calpine generated free cash flow of $582 million and expects the company to generate more than $500 million of free cash flow during 2010. At year-end 2009, Calpine had unrestricted cash of nearly $1 billion and access to credit facilities of around $800 million. While cash on hand will decrease by more than $500 million when the Connectiv assets are acquired, cash on hand is expected to be replenished from both internal sources and from the completion of the asset sale with PSCO. Moody's expects the company to be able to satisfy its maturing debt requirements over the next 12 months from internal sources, and expects the company to remain comfortably in compliance with the three financial covenants in its credit facilities. With respect to other forms of liquidity, virtually all of the company's assets are pledged to creditors under either project level subsidiary agreements or under the company's first lien credit agreements. However, the value ascribed to the Rocky Mountain and Blue Spruce transaction supports a view that Calpine's highly efficient fleet of natural-gas fired generation could provide a meaningful source of alternative sources of liquidity for the company. The rating could be upgraded if the company continues to successfully execute on its current plan through strong plant performance and a carefully implemented hedging strategy which results in free cash flow generation that helps facilitate consolidated debt reduction. Specifically, Calpine's CFR could be upgraded if Moody's believe that the company's free cash flow generation will be in the high single digits, its cash flow to debt approaches 10%, and its cash coverage of interest expense remains above 2.0x on a sustainable basis. In light of the positive rating outlook, limited prospects exist for the rating to be downgraded in the near-term. However, should poor operating performance across the fleet emerge or weaker than expected energy markets lead to a decline in expected cash flows resulting in the ratio of cash flow to interest expense falling below 1.5 x or cash flow to debt declining to below 5%, the rating could be downgraded. Moody's last rating action on Calpine and CCFC occurred on October 13, 2009, when Calpine and CCFC's ratings were affirmed and the rating outlook was changed to positive from stable. Ratings affirmed are Calpine's CFR, Probability of Default Rating, secured revolver and secured term loan, all rated B2, its speculative grade liquidity rating of SGL-2 as well as the B1 rating for CCFC senior secured notes. Headquartered in Houston, Texas, Calpine is a major U.S. independent power company with assets of $16.65 billion and an aggregate generating capacity of 24,738 MW, including partnership interests at December 31, 2009. The company owns, leases, and operates natural gas-fueled and renewable geothermal power plants. CASCADE ACCEPTANCE: Plan Outline Hearing Continued to May 14 ------------------------------------------------------------ The U.S. Bankruptcy Court for the Northern District of California has continued until May 14, 2010, at 10:00 a.m., the hearing on approval of Cascade Acceptance Corporation's Disclosure Statement explaining its proposed Plan of Reorganization. The hearing will be held at the Santa Rosa Courtroom. The Debtors will begin soliciting votes on the Plan following approval of the adequacy of the information in the Disclosure Statement. As reported in the Troubled Company Reporter on March 4, 2010, according to the Disclosure Statement, the Plan provides for the reorganization of the Debtor and payment or provision for all of the Debtor's creditors. The Plan also provides for the disposition of the Debtor's assets. The Debtor proposes to pay all creditors in full over a period of six years. Claims in various classes will be treated as: * Class 2 (Secured Claims) will be paid according to the terms and condition of the existing contract. Any existing defaults in any terms or conditions of the underlying loan documentation will be deemed cured by the confirmation of the Plan. * Class 3 (Unsecured Priority Claims) will be paid in full in five equal annual installments with interest at the Plan interest rate. * Class 4 (Unsecured Claims - $18,522,008) -- Unless agreed otherwise by the Class 4 creditor, holders of allowed Class 4 claims will retain their promissory notes with these modifications: (i) the promissory note will bear interest at Plan interest rate of $3%; (ii) the due date of the Class Four Reorganized Debtor Promissory Note will be 36 months from the effective date; (iii) the Reorganized Debtor will make payments from the accumulated cash on hand. Whether or not payment will be made towards the principal amount of the promissory note will be determined by the Reorganized Debtor. * Class 5 (Special Unsecured Claims) -- Upon application to the Reorganized Debtor in writing, any creditor may request that the Reorganized Debtor's board of directors consider and approve a special distribution to that creditor as a Class 5 creditor for a sum not to exceed $10,000. * Class 6 (Subordinated Claims) -- Unless agreed otherwise, holders of Class 6 claims will retain their promissory notes. * Class 7 (Interests) will retain ownership rights. The Debtor proposes to use its cash on hand to pay claims due on the effective date. Payments due after the effective date will be made from the Reorganized Debtor's income or other funds. After the effective date, the Reorganized Debtor may obtain new secured or unsecured financing or refinance indebtedness. A full-text copy of the Disclosure Statement is available for free at http://bankrupt.com/misc/CascadeAcceptance_DS.pdf The hearing on exclusivity extension is also moved to May 14, the hearing was originally set for April 23. About Cascade Acceptance Mill Valley, California-based Cascade Acceptance Corporation filed for Chapter 11 bankruptcy protection on November 23, 2009 (Bankr. N.D. Calif. Case No. 09-13960). Douglas B. Provencher, Esq., at Law Offices of Provencher and Flatt assists the Company in its restructuring effort. The Company listed $50,000,001 to $100,000,000 in assets and debts. CENTER FOR INTEGRATIVE CANCER: Case Summary & Creditors List ------------------------------------------------------------ Debtor: The Center for Integrative Cancer Medicine, P.A. dba PET/CT Imaging of El Paso 4532 North Mesa Street El Paso, TX 79912 Bankruptcy Case No.: 10-30819 Chapter 11 Petition Date: April 20, 2010 Court: U.S. Bankruptcy Court Western District of Texas (El Paso) Judge: Leif M. Clark Debtor's Counsel: Corey W. Haugland, Esq. P.O. Box 1770 El Paso, TX 79949-1770 Tel: (915) 532-3911 E-mail: chaugland@jghpc.com Estimated Assets: $0 to $50,000 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/txwb10-30819.pdf The petition was signed by Jesus A. Gomez, president. CICM EQUIPMENT: Case Summary & 10 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: CICM Equipment Co., LLC 4532 North Mesa El Paso, TX 79912 Bankruptcy Case No.: 10-30818 Chapter 11 Petition Date: April 20, 2010 Court: U.S. Bankruptcy Court Western District of Texas (El Paso) Judge: Leif M. Clark Debtor's Counsel: Corey W. Haugland, Esq. P.O. Box 1770 El Paso, TX 79949-1770 Tel: (915) 532-3911 E-mail: chaugland@jghpc.com Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of 10 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/txwb10-30818.pdf The petition was signed by Jesus A. Gomez, president. CIMINO BROKERAGE: Can Use Secured Creditors Cash Until May 31 ------------------------------------------------------------- The Hon. Arthur S. Weissbrodt of the U.S. Bankruptcy Court for the Northern District of California authorized Cimino Brokerage Company to use the cash collateral of secured creditors -- Wells Fargo Bank and Temple-Inland, Inc. -- until May 31, 2010. A further hearing to consider extended use of cash collateral, as well as the Chapter 11 Status Conference, will be held on May 25, 2010 at 10:15 a.m. The Debtor may file its brief and evidence in support of further use of cash collateral not later than May 14, while the secured creditors may file their objections not later than May 20, 2010. The Debtor is authorized to use the money to fund its Chapter 11 case and pay suppliers and other parties, and exceed budgeted expenses by 15%. As adequate protection for any diminution in value of the lenders' collateral, the Debtors will grant the secured creditors replacement lien on postpetition assets derived. The replacement lien will be subordinate to the (i) compensation and expense reimbursement allowed to a trustee in any successor Chapter 7 case; and (ii) fees payable to the U.S. Trustee. The secured creditors will also be granted superpriority administrative expense claim. The Debtor is also directed to continue making adequate protection payments to the Bank, in the amount of $41,000 per month. As additional condition to the cash collateral use, the Debtor is required to file its plan of reorganization not later than April 23, 2010. A hearing to consider the approval of the disclosure statement describing the Debtor's Plan of Reorganization will be held on May 25, 2010 at 10:15 a.m. About Cimino Brokerage Salinas, California-based Cimino Brokerage Company, a California general partnership -- aka Cimino Brothers Produce and dba Cimino Brothers Produce -- was founded over 15 years ago by the Cimino family, which has been in the agricultural business since 1895. The Debtor is currently owned 50% by Vincent Cimino, 25% by Armand Cimino and 25% by Stephanie Cimino. The Company is a year-round grower, shipper and distributor of fresh vegetables and fruits, primarily broccoli. The Company, through its Mexican wholly-owned subsidiary (Cimino Brothers Produce Mexico S.A. de C.V. is the creator of the Asian Cut Crown broccoli category, and has developed the largest national network of Asian foodservice distributors and customers in the nation. The Company's administrative operations are carried out from its facilities in Salinas, California. The Company's primary cooling facilities in the United States are located in Laredo, Texas. The Company filed for Chapter 11 bankruptcy protection on November 24, 2009 (Bankr. N.D. Calif. Case No. 09-60291). The Company listed $10,000,001 to $50,000,000 in assets and $10,000,001 to $50,000,000 in liabilities. CIRCUIT CITY: Card, et al., Want FRBP 7023 on Class Claim --------------------------------------------------------- Pursuant to the Bankruptcy Court's March 25, 2010 order and Rule 9014 of the Federal Rules of Bankruptcy Procedure, creditors Robert Gentry, Jonathan Card, Jack Hernandez, and Joseph Skaf, et al., ask the Bankruptcy Court to apply Rule 7023 of the Federal Rules of Bankruptcy Procedure to their class proofs of claim. Bankruptcy Rule 7023 provides that "Rule 23 F.R.Civ.P. applies in adversary proceedings." Michael Righetti, Esq., at Righetti Law Firm, P.C., in San Francisco, California -- matt@righettilaw.com -- notes that the court In Re Charter Co. 876 F.2d 866, 873 (C.A.11 (Fla.),1989) discussed when Rule 23 may be invoked. The court stated that the rule may be invoked in two circumstances -- in an adversary proceeding and in a contested matter. "Pursuant to the terms of Bankruptcy Rule 7023, Rule 23 applies in any adversary proceeding. Also, under Bankruptcy Rule 9014, the bankruptcy judge may at his discretion apply Bankruptcy Rule 7023, and by extension Rule 23, in a contested matter." Each of the claims represents a continuation of ongoing state court litigation that existed well before the Debtors filed proceedings in the Bankruptcy Court. The Creditors' claims were originally filed in California Superior Court as proposed class action cases against Debtor Circuit City Stores, Inc., et al. Each case alleges violations by the Debtor of California's strict minimum working condition statutes, Mr. Righetti relates. Mr. Righetti notes that pursuant to Eleventh Circuit and Seventh Circuit case law, which is relied upon and cited heavily by the Bankruptcy Court, a class proof of claim is "deemed allowed" until objected to. In January 2009, the Creditors, individually and on behalf of the class individuals they purport to represent, filed four timely and different class proofs of claim. The four purported class actions are: (a) Gentry v. Circuit City, Inc., originally filed August 29, 2002, in the Los Angeles Superior Court, Case No. BC 280631; (b) Hernandez v. Circuit City, Inc., originally filed on April 17, 2008, in the San Diego Superior Court, Case No. 37-2008-00082173-CU-OE-CTL; (c) Card v. Circuit City, Inc., originally filed November 3, 2008, in the San Diego Superior Court, Case No. 37-2008- 00095260-CU-OE-CTL; and (d) Skaf, et al. v. Circuit City, Inc., originally filed on December 19, 2008, in the Los Angeles Superior Court, Case No. BC 404195. On January 13, 2009, (i) Mr. Gentry filed a secured priority class proof of claim, Claim No. 6039, (ii) Mr. Hernandez filed a secured priority class proof of claim, Claim No. 6045, and (iii) Mr. Card filed a priority secured proof of claim, Claim No. 6040. On January 30, 2009, creditors Messrs. Skaf, Miguel Perez, and Gustavo Garcia filed their secured priority class proof of claim, Claim No. 8717. The Debtors' counsel repeatedly informed the Creditors' counsel that the Bankruptcy Court had previously made clear that it would neither consider relief from the automatic stay, nor allow the parties an opportunity to litigate the claims in Bankruptcy Court, given the limited assets available and the Bankruptcy Court's desire to curtail litigation costs. In reliance on the position taken by the Debtors, up to this point in time, the Creditors have had no realistic opportunity to have their claims considered by the Bankruptcy Court, Mr. Righetti says. As instructed by the Debtors, the Creditors have patiently waited to determine the status of their claims. It was not until over a year after the Claims were filed, on February 25, 2010, that the Debtors first made any substantive objection to the Creditors' class proofs of claim on the grounds that they should not be allowed to proceed on a class-wide basis, Mr. Righetti notes. The Debtors filed their Nineteenth Omnibus Objection, seeking to reclassify the claims, among others, of Messrs. Gentry and Hernandez to general unsecured claims. The Debtors also filed their Thirty-First Omnibus Objection as to the class claims of Messrs. Card and Skaf, seeking to disallow them in general simply because the Debtors "disputed liability." In their supplements to the Objections, the Debtors suddenly objected to the class proofs of claim as to the unnamed claimants that the Creditors seek to represent in the four putative class actions. Before February 25, 2010, the Creditors had absolutely no knowledge whatsoever as to whether the Debtors disputed the specific allegations associated with the class proofs of claim because the Debtors made clear that the Bankruptcy Court would not countenance the Creditors' multiple requests to determine any of the Debtors' contentions regarding any of the four proofs of claim related to the four putative class actions, Mr. Righetti relates. As the Debtors have finally "shown [their] cards" with respect to the discrete issue regarding class certification, the time is now ripe for the Bankruptcy Court to hear and rule upon the Creditors' requests to apply Rule 7023 to their class proofs of claim pursuant to Bankruptcy Rule 9014. It is clear that at no earlier point in time would the Bankruptcy Court have considered a Bankruptcy Rule 7023 motion by the Creditors -- and the Circuit Courts of the 11th and 7th circuits make clear that no such motion was required before now, Mr. Righetti asserts. 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: Court OKs Sale of Louisville Property to Nicklies --------------------------------------------------------------- The Bankruptcy Court approved Circuit City Stores Inc.'s agreement with Janet F. Nicklies for the sale of certain of the real property of the Seller, Circuit City Stores, Inc., located at 5120 Dixie Highway, in Louisville, Kentucky. Judge Huennekens overruled on the merits and denied with prejudice any and all objections not waived, withdrawn, settled, adjourned or otherwise resolved. The sale hearing was held on March 18, 2010. 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 amendment 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, tile and interest in the Property will be transferred to the Successful Bidder free and clear of all Liens except certain 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. Under Section 365 of the Bankruptcy Code, the Seller is authorized to assume the Lease associated with the Property, and to assign the Lease to the Purchaser, which assignment will take place on Closing. Under Section 363 of the Bankruptcy Code, the Seller is authorized to sell the Lease to the Purchaser. Among other things, upon Closing, subject to certain provisions, the Purchaser will succeed to the entirety of the Seller's rights and obligations in the Lease due, accruing, arising or attributable to the time period occurring on or after the Closing, and will have the rights of the landlord thereunder. A full-text copy of the Sale Order is available at no charge at: http://bankrupt.com/misc/CC_LouisvilleSaleOrd031910.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: Gets OK to Hire Alfred Siegel as CRO -------------------------------------------------- Circuit City Stores Inc. and its units received approval, pursuant to Sections 105(a) and 363 of the Bankruptcy Code, to employ Alfred H. Siegel, a partner of Crowe Horwath LLP, a public accounting and consulting firm, as their chief restructuring officer, and, to the extent Mr. Siegel deems appropriate, additional Crowe professionals. The Debtors are continuing to wind down their affairs and hope to secure confirmation of their First Amended Joint Plan of Reorganization in the near future. The Debtors' chief executive officer has resigned and Michelle Mosier, the Debtors' controller and chief accounting officer, has advised the Debtors that she will also leave the company by no later than the hearing on the current motion. Accordingly, the Debtors require a CRO to administer their estates up to the effective date of the Plan, Ms. Mosier says. Moreover, upon the Plan Effective Date, many of the Debtors' current management professionals, including those with the greatest knowledge and primary responsibility for management of the Debtors' Chapter 11 cases, will no longer be involved in the cases. The Debtors will be dissolved and replaced by the Liquidating Trust, as provided in the Plan, to be administered, in consultation with the Liquidating Trust Oversight Committee, by the Liquidating Trustee. Pursuant to the Plan, Mr. Siegel is the proposed Liquidating Trustee, Ms. Mosier relates. Based on the progression of events, Ms. Mosier asserts that it is important that Mr. Siegel be retained and employed as CRO so that he can (i) administer the Debtors' estates now that the CEO has resigned and Ms. Mosier, as Controller and Chief Accounting Officer, has given notice of her plans to do so, and (ii) familiarize himself with the Debtors' Chapter 11 cases. As CRO, Mr. Siegel will begin the Debtors' transition to post- confirmation liquidation, and will be able to take the steps necessary and appropriate for the efficient administration of the Liquidating Trust. According to Ms. Mosier, pursuant to the engagement agreement, Mr. Siegel will serve as CRO to the Debtors at the direction of, and reporting to, the Board. He will provide interim management assistance, including overseeing: (a) the recovery and disposition of the Debtors' remaining assets; (b) the reconciliation of liabilities; (c) the administration of the Debtors' bankruptcy reporting requirements and compliance with obligations as debtor-in -possession under Sections 1107 and 1108 of the Bankruptcy Code; (d) all litigation, claims objection and adversary proceedings; and (e) the Debtors' efforts to obtain confirmation of the Plan. Pursuant to the Engagement Agreement, Mr. Siegel may also engage other Crowe professionals to assist him with operational, financial, tax and accounting matters, as deemed necessary and appropriate. In his capacity as CRO, Mr. Siegel will not have the authority to expand or limit the scope of the services provided by any professional retained by the Debtors in the Chapter 11 cases, although he may make recommendations to the Board with respect to these matters, Ms. Mosier says. Mr. Siegel and Crowe will be paid their customary hourly rates, and will be reimbursed for necessary expenses incurred. The estimated hourly rates are: Mr. Siegel $550 Other partner/director $360-$580 Manager and senior forensice/litigation expert $225-$350 Senior accountant $165-$220 Staff accountant $130-$160 Bookkeeper and paralegal $85-$130 Because Mr. Siegel and Crowe are not being employed as professionals under Section 327 of the Bankruptcy Code, they will not submit quarterly or final fee applications pursuant to Sections 330 and 331 of the Bankruptcy Code. However, Mr. Siegel and Crowe will submit statements of services performed and expenses incurred to the Debtors and other parties in interest on a monthly basis in accordance with the Interim Compensation Order. According to the Debtors, the fact that Mr. Siegel serves as CRO will not conflict or preclude him from serving as the Liquidating Trustee under the Plan. Mr. Siegel discloses in his affidavit that he and Crowe have in the past been retained by, and presently and likely in the future will provide services for, certain creditors of the Debtors, other parties-in-interest, and their attorneys and other professionals in matters unrelated to the parties' claims against the Debtors or interests in the Chapter 11 cases. He informs the Court that he and Crowe currently perform or have previously performed certain services for these entities: * Direct TV; * Samsung Electronics; * Acco Brands; and * Skadden, Arps, Slate, Meagher & Flom, LLP. Mr. Siegel assures the Court that he nor Crowe has provided, and will not provide, professional services to any of the creditors, other parties-in-interest, or their attorneys with regard to any matters related to the Debtors' Chapter 11 cases. Mr. Siegel asserts that he and Crowe do not hold or represent an interest adverse to the estate that would impair their ability to objectively perform professional services for the Debtors, in accordance with Section 327. Mr. Siegel attests that he and Crowe are disinterested persons, as that term is defined in Section 101(14) of the Bankruptcy Code. 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). CITIZENS REPUBLIC: Trust Preferred Payment Deferral Continues ------------------------------------------------------------- After reporting net losses over the last several quarters, Citizens Republic Bancorp, Inc. (Nasdaq: CRBC) determined during the first quarter of 2010, in consultation with the Federal Reserve Bank of Chicago as required by regulatory policy, to defer regularly scheduled quarterly interest payments on its outstanding junior subordinated debentures relating to the 7.50% Enhanced Trust Preferred Securities of Citizens Funding Trust I and its Fixed Rate Cumulative Perpetual Preferred Stock, Series A, issued to the U.S. Department of the Treasury. As reported in the Troubled Company Reporter on Feb. 1, 2010, deferral of these payments, which is permitted pursuant to the underlying documentation, is expected to preserve a total of $4.9 million of cash each quarter, although such amounts will continue to accrue. Citizens says it has demonstrated it has sufficient cash and liquidity to pay these amounts, but is taking these actions to support and preserve its capital position in light of economic conditions and to lessen the potential need for raising any additional capital. Citizens says that it intends to reevaluate the deferral of these payments periodically and, in consultation with its regulators, will consider reinstating these payments when appropriate. Under the terms of the junior subordinated debentures and trust documents, as reported in the Troubled Company Reporter on Feb. 1, 2010, Citizens is allowed to defer payments of interest for up to 10 years without default. Also during the deferral period, Citizens generally may not pay cash dividends on or purchase its common stock or preferred stock, including the TARP Preferred Stock. Dividend payments on the TARP Preferred Stock may be deferred without default, but the dividend is cumulative and may eventually give the holder board representation rights. With $11.7 billion in total assets at Mar. 31, 2010, Citizens Republic Bancorp, Inc. -- http://www.citizensbanking.com/-- is a diversified financial services company providing a wide range of commercial, consumer, mortgage banking, trust and financial planning services to a broad client base. Citizens serves communities in Michigan, Ohio, Wisconsin, and Indiana with 218 offices and 255 ATMs. Citizens is the largest bank holding company headquartered in Michigan with roots dating back to 1871 and is the 46th largest bank holding company headquartered in the United States. CLEARPOINT BUSINESS: Posts $3,075,352 Net Loss for 2009 ------------------------------------------------------- ClearPoint Business Resources, Inc., filed with the Securities and Exchange Commission its annual report on Form 10-K for the fiscal year ended December 31, 2009. ClearPoint Business reported a net loss of $3,075,352 for 2009 from a net loss of $38,785,741 for 2008. Revenue was $5,241,706 for 2009 from $33,496,240 for 2008. As of December 31, 2009, the Company had total assets of $2,559,388 against total liabilities of $27,545,827, resulting in stockholders' deficit of $24,986,439. In its April 15, 2010 report, Asher & Company, Ltd., in Philadelphia, Pennsylvania, said the Company's recurring losses from operations, net working capital deficiency, stockholders' deficit, debt covenant violations, and inability to generate sufficient cash flow to meet its obligations and sustain its operations raise substantial doubt about its ability to continue as a going concern. Historically, ClearPoint has funded its cash and liquidity needs through cash generated from operations and debt financing. At December 31, 2009, the Company had an accumulated deficit of $57,565,895 and working capital deficiency of $19,592,004. For the year ended December 31, 2009, the Company incurred a net loss of $3,075,352. Although the Company restructured its debt and obtained new financing in the third quarter of 2009, cash projected to be generated from operations may not be sufficient to fund operations and meet debt repayment obligations during the next 12 months. To meet its future cash and liquidity needs, the Company may be required to raise additional financing or restructure its existing debt. There is no assurance that the Company will be successful in obtaining additional financing or restructuring of its existing debt. If the Company does not generate sufficient cash from operations, raise additional financing or restructure existing debt, there is substantial doubt about the ability of the Company to continue as a going concern. On February 9, 2010, as a consequence of certain defaults under an Amended Loan Agreement with ComVest, ComVest exercised the default exercise provision under the Amended ComVest Warrant. As a result, ComVest now beneficially owns a majority of the Company's common stock. A full-text copy of the Company's annual report is available at no charge at http://ResearchArchives.com/t/s?6088 Based in Chalfont, Pennsylvania, ClearPoint Business Resources, Inc., is a workplace management solutions provider. Prior to year 2008, ClearPoint provided various temporary staffing services as both a direct provider and as a franchisor. During the year ended December 31, 2008, ClearPoint transitioned its business model from a temporary staffing provider through a network of branch-based offices or franchises to a provider that manages clients' temporary staffing needs through its open Internet portal-based iLabor network. Under the new business model, ClearPoint acts as a broker for its clients and network of temporary staffing suppliers using iLabor. CONGOLEUM CORP: Reaches Litigation Settlement with Chartis ---------------------------------------------------------- Congoleum Corporation has reached a litigation settlement with the Chartis Companies. Under the terms of the agreement, the Chartis Companies have agreed to pay $40 million over a period of six years in exchange for a buyback of certain subject insurance policies. The $40 million will be paid into the trust formed by Congoleum's plan of reorganization for distribution to asbestos claimants. The settlement is subject to court approval and other conditions. Roger S. Marcus, Chairman of the Board, commented, "With this latest settlement, we have now resolved all our insurance litigation and moved one step closer to completing our reorganization. I look forward to the confirmation hearing on our plan that is scheduled for June and believe we can emerge from bankruptcy shortly thereafter." About Congoleum Corp. Based in Mercerville, New Jersey, Congoleum Corporation (PINKSHEETS: CGMCQ) -- http://www.congoleum.com/-- manufactures resilient sheet and tile and plank flooring products available in a wide variety of product features, designs and colors. The Company filed for Chapter 11 protection on December 31, 2003 (Bankr. D. N.J. Case No. 03-51524) as a means to resolve claims asserted against it related to the use of asbestos in its products decades ago. Richard L. Epling, Esq., Robin L. Spear, Esq., and Kerry A. Brennan, Esq., at Pillsbury Winthrop Shaw Pittman LLP, and Paul S. Hollander, Esq., and James L. DeLuca, Esq., at Okin, Hollander & DeLuca, LLP, represent the Debtors. The Asbestos Claimants' Committee is represented by Peter Van N. Lockwood, Esq., and Ronald Reinsel, Esq., at Caplin & Drysdale, Chtd. The Bondholders' Committee is represented by Michael S. Stamer, Esq., and James R. Savin, Esq., at Akin Gump Strauss Hauer & Feld LLP. Nancy Isaacson, Esq., at Goldstein Isaacson, PC, represents the Official Committee of Unsecured Creditors. R. Scott Williams, Esq., at Haskell Slaughter Young & Rediker, LLC, the Court-appointed Futures Claimants Representative, is represented by Roger Frankel, Esq., Richard Wyron, Esq., and Jonathan P. Guy, Esq., at Orrick Herrington & Sutcliffe LLP, and Stephen B. Ravin, Esq., at Forman Holt Eliades & Ravin LLC. American Biltrite, Inc. (AMEX: ABL), which owns 55% of Congoleum, is represented by Matthew Ward, Esq., Mark S. Chehi, Esq., Christopher S. Chow, Esq., and Matthew P. Ward, Esq., at Skadden Arps Slate Meagher & Flom. Various entities have filed bankruptcy plans for the Debtors. In February 2008, the legal representative for future asbestos- related claimants; the asbestos claimants' committee; the official Committee of holders of the Company's 8-5/8 % Senior Notes due August 1, 2008; and Congoleum jointly filed a joint plan of reorganization. Various objections to the Joint Plan were filed. In June 2008, the Bankruptcy Court issued a ruling that the Joint Plan was not legally confirmable. In August 2008, the Bondholders' Committee, the ACC, the FCR, representatives of holders of prepetition settlements and Congoleum entered into a term sheet describing the proposed material terms of a new plan of reorganization and a settlement of avoidance litigation with respect to prepetition claim settlement. Certain insurers and a large bondholder filed objections to the Litigation Settlement or reserved their rights to object to confirmation of the Amended Joint Plan. The Bankruptcy Court approved the Litigation Settlement in October 2008. The Amended Joint Plan was filed in November 2008. In January 2009, certain insurers filed a motion for summary judgment seeking denial of confirmation of the Amended Joint Plan. On February 26, 2009, the Bankruptcy Court rendered an opinion denying confirmation of the Amended Joint Plan. Moreover, the Bankruptcy Court dismissed Congoleum's bankruptcy case. On February 27, 2009, Congoleum and the Bondholders' Committee appealed the Order of Dismissal and the ruling denying plan confirmation to the U.S. District Court for the District of New Jersey. The District Court overturned the dismissal order, and assumed jurisdiction of the bankruptcy proceedings. CONSPIRACY ENTERTAINMENT: Reports $979,968 Net Loss for 2009 ------------------------------------------------------------ Conspiracy Entertainment Holdings, Inc., filed with the Securities and Exchange Commission its annual report on Form 10-K for the fiscal year ended December 31, 2009. The Company reported a net loss of $979,968 for 2009 from net income of $265,603,000 for 2008. Net sales were $9,600,592 for 2009 from $10,905,490 for 2008. At December 31, 2009, the Company had $4,219,368 in total assets against $9,386,807 in total liabilities, resulting in stockholders' deficit of $5,167,439. As of December 31, 2009, the Company had a working capital deficiency of $3,736,214 and an accumulated deficit of $12,400,762. In its 2009 Annual Report, the Company said there are no assurances "that we will be able to achieve a level of revenues adequate to generate sufficient cash flow from operations or obtain additional financing through private placements, public offerings and/or bank financing necessary to support our working capital requirements. To the extent that funds generated from any private placements, public offerings and/or bank financing are insufficient, we will have to raise additional working capital. No assurance can be given that additional financing will be available, or if available, will be on acceptable terms. These conditions raise substantial doubt about our ability to continue as a going concern. If adequate working capital is not available we may be forced to discontinue operations, which would cause investors to lose their entire investment." In its April 14, 2010 report, Chisholm, Bierwolf, Nilson & Morrill LLC in Bountiful, Utah, expressed substantial doubt about the Company's ability to continue as a going concern. A full-text copy of the Company's annual report on Form 10-K is available at no charge at http://ResearchArchives.com/t/s?6082 About Conspiracy Entertainment Holdings Based in Santa Monica, California, Conspiracy Entertainment Holdings, Inc., develops, publishes and markets interactive entertainment software. The Company currently publishes titles for many popular interactive entertainment hardware platforms, such as Sony's PlayStation, Nintendo 64 and Nintendo's Game Boy Color and Game Boy Advance as well as the next generation hardware platforms such as Sony's PlayStation 2, Sony's PSP, Nintendo GameCube, Nintendo's DS, Microsoft's Xbox, and also for the PC. CONTINENTAL AIRLINES: US Airways Discontinues UAL Merger Talks -------------------------------------------------------------- US Airways Group, Inc., on Thursday said it has discontinued recent discussions with UAL Corporation regarding a potential merger between the two companies. US Airways Chairman and CEO Doug Parker said, "US Airways has long been a proponent for consolidation in our industry. As opportunities have arisen for our company to participate in consolidation, we have taken a close and careful look at our options, always with an eye on what is in the best interests of our shareholders, customers, employees and the communities we serve. "We have recently held discussions with United Airlines regarding a possible combination between our two airlines. After an extensive review and careful consideration, our Board of Directors has decided to discontinue those discussions. "While it is our policy not to comment on rumors concerning strategic transactions, because of the persistent rumors about a possible transaction with United Airlines we believe it is appropriate to clarify the status of those negotiations. In the future, we will continue to follow our policy of not commenting on potential strategic transactions until we have entered into a definitive agreement with respect to a specific transaction. "It remains our belief that consolidation makes sense in an industry as fragmented as ours. Whether we participate or not, consolidation that leads to a more efficient industry better able to withstand economic volatility, global competition and the cyclical nature of our industry is a positive outcome. "The US Airways team is doing an outstanding job of running a reliable airline, taking care of our customers and keeping our costs down. We are well along the road to near-term profitability and are well-positioned for sustainable, long-term success. As the industry becomes less fragmented and more stable, everyone will benefit." * * * According to The Wall Street Journal's Susan Carey, US Airways' withdrawal clears the way for United to focus on talks with Continental Airlines Inc. over a possible combination. But Ms. Carey notes US Airways' exit reduces the pressure on Continental to consummate such a deal. Ms. Carey reports that one person familiar with the matter said the recent United-US Airways talks were "deep and earnest" and uncovered synergies from cutting costs and capturing added revenue. Ms. Carey relates another person familiar with the matter said the airlines couldn't agree on the exchange ratio in a share swap or who would run a combined entity. The Journal's source also said US Airways directors "didn't feel like waiting around" and didn't want to "provide more leverage for United in [the Continental] discussions." According to the Journal, two people with knowledge of the matter said Continental was caught off-guard by media reports that United and US Airways were in deep talks. Those two sources told the Journal that Jeff Smisek, Continental's new CEO, called Glenn Tilton, his counterpart at UAL, late last week and due diligence was begun on a potential deal that would be a stock swap. But given what happened two years ago, when Continental rejected United as a partner, everyone is proceeding cautiously, the sources told the Journal, adding talks could break down. About Continental Airlines Continental Airlines Inc. (NYSE: CAL) -- http://www.continental.com/-- is the world's fifth largest airline. Continental, together with Continental Express and Continental Connection, has more than 2,400 daily departures throughout the Americas, Europe and Asia, serving 130 domestic and 132 international destinations. Continental is a member of Star Alliance, which provides access to more than 900 additional points in 169 countries via 24 other member airlines. With more than 41,000 employees, Continental has hubs serving New York, Houston, Cleveland and Guam, and together with its regional partners, carries roughly 63 million passengers per year. At December 31, 2009, Continental had total assets of $12.781 billion against total current liabilities of $4.389 billion; long-term debt and capital leases of $5.291 billion; deferred income taxes of $203 million; accrued pension liability of $1.248 billion; accrued retiree medical benefits of $216 million; and other liabilities of $844 million. At December 31, 2009, the Company had accumulated deficit of $442 million, accumulated other comprehensive loss of $1.185 billion and stockholders' equity of $590 million. The December 31 balance sheet showed strained liquidity: Continental had total current assets of $4.373 billion against total current liabilities of $4.389 billion. * * * As reported by the Troubled Company Reporter on September 4, 2009, Standard & Poor's Ratings Services lowered its issue-level ratings on all senior unsecured debt of Continental to 'CCC+' from 'B-' and revised the recovery ratings on certain unsecured debt issues, excluding industrial revenue bonds, to '6' from '5'. At the same time, S&P affirmed its 'B' corporate credit rating and secured debt ratings on Continental. The ratings on Continental's unsecured debt are based principally on declining aircraft values caused by the global aviation downturn. This could result in reduced asset protection for unsecured creditors if Continental were to file for bankruptcy. Continental continues to carry Moody's Investors Service's B2 corporate family and Fitch Ratings' 'B-' Issuer Default Rating and 'CC/RR6' from 'CCC/RR6' senior unsecured rating. About UAL Corporation Based in Chicago, Illinois, UAL Corporation (NASDAQ: UAUA) -- http://www.united.com/-- is the holding company for United Airlines, Inc. United Airlines is the world's second largest air carrier. The airline flies to Brazil, Korea and Germany. The company filed for Chapter 11 protection on Dec. 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191). James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and Steven R. Kotarba, Esq., at Kirkland & Ellis, represented the Debtors in their restructuring efforts. Fruman Jacobson, Esq., at Sonnenschein Nath & Rosenthal LLP represented the Official Committee of Unsecured Creditors. Judge Eugene R. Wedoff confirmed a reorganization plan for United on Jan. 20, 2006. The Company emerged from bankruptcy on Feb. 1, 2006. Reorganized UAL Corp. carries a 'Caa1' probability of default rating from Moody's, 'B-' long term foreign issuer credit rating from Standard & Poor's, and 'CCC' long term issuer default rating from Fitch. 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. CONTINENTAL AIRLINES: Said to Weigh No-Premium Stock Deal with UAL ------------------------------------------------------------------ UAL Corp.'s United Airlines and Continental Airlines Inc. are considering a stock-for-stock merger with no market premium Bloomberg News reports, citing two people with knowledge of the talks. According to Bloomberg, the people familiar with the private talks said that under the merger UAL Chief Executive Officer Glenn Tilton, 62, would become chairman while Continental CEO Jeff Smisek, 55, would become CEO. The terms aren't final and a deal may be more than a week away, the people said. Bloomberg News said at merger would create a company valued at more than $6 billion. Putting together United and Continental would create the world's largest carrier by passenger traffic, surpassing Delta Air Lines Inc. The discussions were described after US Airways Group Inc. said it had ended merger talks with United, leaving United and Continental as the focus of industry consolidation. About Continental Airlines Continental Airlines Inc. (NYSE: CAL) -- http://www.continental.com/-- is the world's fifth largest airline. Continental, together with Continental Express and Continental Connection, has more than 2,400 daily departures throughout the Americas, Europe and Asia, serving 130 domestic and 132 international destinations. Continental is a member of Star Alliance, which provides access to more than 900 additional points in 169 countries via 24 other member airlines. With more than 41,000 employees, Continental has hubs serving New York, Houston, Cleveland and Guam, and together with its regional partners, carries roughly 63 million passengers per year. At December 31, 2009, Continental had total assets of $12.781 billion against total current liabilities of $4.389 billion; long-term debt and capital leases of $5.291 billion; deferred income taxes of $203 million; accrued pension liability of $1.248 billion; accrued retiree medical benefits of $216 million; and other liabilities of $844 million. At December 31, 2009, the Company had accumulated deficit of $442 million, accumulated other comprehensive loss of $1.185 billion and stockholders' equity of $590 million. The December 31 balance sheet showed strained liquidity: Continental had total current assets of $4.373 billion against total current liabilities of $4.389 billion. * * * As reported by the Troubled Company Reporter on September 4, 2009, Standard & Poor's Ratings Services lowered its issue-level ratings on all senior unsecured debt of Continental to 'CCC+' from 'B-' and revised the recovery ratings on certain unsecured debt issues, excluding industrial revenue bonds, to '6' from '5'. At the same time, S&P affirmed its 'B' corporate credit rating and secured debt ratings on Continental. The ratings on Continental's unsecured debt are based principally on declining aircraft values caused by the global aviation downturn. This could result in reduced asset protection for unsecured creditors if Continental were to file for bankruptcy. Continental continues to carry Moody's Investors Service's B2 corporate family and Fitch Ratings' 'B-' Issuer Default Rating and 'CC/RR6' from 'CCC/RR6' senior unsecured rating. About UAL Corporation Based in Chicago, Illinois, UAL Corporation (NASDAQ: UAUA) -- http://www.united.com/-- is the holding company for United Airlines, Inc. United Airlines is the world's second largest air carrier. The airline flies to Brazil, Korea and Germany. The company filed for Chapter 11 protection on Dec. 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191). James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and Steven R. Kotarba, Esq., at Kirkland & Ellis, represented the Debtors in their restructuring efforts. Fruman Jacobson, Esq., at Sonnenschein Nath & Rosenthal LLP represented the Official Committee of Unsecured Creditors. Judge Eugene R. Wedoff confirmed a reorganization plan for United on Jan. 20, 2006. The Company emerged from bankruptcy on Feb. 1, 2006. Reorganized UAL Corp. carries a 'Caa1' probability of default rating from Moody's, 'B-' long term foreign issuer credit rating from Standard & Poor's, and 'CCC' long term issuer default rating from Fitch. 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. COOPER-STANDARD: Proposes Exit Financing Agreements --------------------------------------------------- Over the past several months, Cooper-Standard Holdings Inc., its debtor affiliates and its advisers have worked on identifying the appropriate debt financing for their Second Amended Joint Chapter 11 Plan of Reorganization. Given the favorable conditions in the high yield debt markets, the Debtors have determined that they will raise $450 million of exit financing in the capital markets through a notes offering, according to Drew Sloan, Esq., Richards Layton & Finger P.A., in Wilmington, Delaware. Mr. Sloan says that based on the Debtors' discussions with financial institutions including potential arrangers and underwriters, the notes offering could provide the reorganized companies with the best financing terms and operational flexibility upon their emergence from bankruptcy. In light of this, the Debtors seek approval of the U.S. Bankruptcy Court for the District of Delaware to (i) enter into certain agreements in connection with anticipated exit financing; (ii) pay related fees and expenses as administrative expenses, and (iii) form a special purpose issuer. New Notes Offering To facilitate the funding of the new notes prior to confirmation of the Plan, the Debtors will form a new non-debtor Delaware company that will, in turn, form CSA Escrow Corporation. CSA Escrow will be created solely to issue the new notes and grant a lien on the proceeds of those notes. The issuer will enter into initial agreements relating to the new notes as well as escrow agreements, under which the proceeds of the notes will be held pending consummation of the Plan. It will also grant a lien on the proceeds from the new notes and all other assets it holds. Prior to confirmation of the Debtors' Plan, CSA Escrow will issue the new notes in an amount not to exceed $450 million. The proceeds of the notes will be held in escrow until certain conditions, including consummation of the Plan, are satisfied. If these conditions are satisfied, CSA Escrow will merge into reorganized Cooper-Standard Automotive Inc., with Cooper-Standard as the surviving entity. The proceeds will then be released to reorganized CSA, which will be assumed by and will become senior obligations of reorganized CSA. During the escrow period, the new notes will be secured by a pledge by CSA Escrow of the proceeds and other escrowed amounts, none of which, whether or not in escrow, will constitute property of the Debtors' estates. The Debtors, conversely, will have no obligations under the new notes other than the fee, expense reimbursement, interest and indemnity obligations. If the conditions are not satisfied, CSA Escrow will be required to redeem the new notes at 100% of their issue price, plus a specified premium expected to be 1% of the aggregate principal amount, and accrued and unpaid interest and the accreted amount of any original issue discount on the new notes in each case to, but excluding, the date of redemption. In connection with any private offering of the new notes, the Debtors have reached agreement in principle, on an uncommitted basis, with Deutsche Bank Securities Inc., Banc of America Securities LLC, UBS Securities LLC and Barclays Capital Inc. The agreement is formalized in a 19-page engagement letter dated April 8, 2010, a copy of which is available without charge at: http://bankrupt.com/misc/CSHI_NewNotesLetter.pdf The agreement provides that each of the financial institutions will act as lead underwriter, lead initial purchaser or lead placement agent for CSA Escrow in connection with the new notes offering on a "best-efforts" basis. These obligations do not constitute a commitment by or obligation of any financial institution to act as an underwriter, initial purchaser or placement agent. Aside from the Engagement Letter, the Debtors will also execute these documents to consummate the new notes offering: (1) a fee letter dated April 8, 2010 providing for the payment of placement fee, upfront fees or original issue discount; (2) a purchase agreement, underwriting agreement or placement agreement and any related agreements; (3) an amendment, waiver or supplement to the Debtor-in- Possession financing credit agreement, the Equity Commitment Agreement and any related documents; and (4) documents in connection with the formation of the new non- debtor Delaware company and CSA Escrow, and agreements for the funding of and payment of fee obligations of the issuer. Senior Term Loan Facility In case the Debtors cannot pursue a notes offering on terms satisfactory to them and to their note holders, the Debtors will raise the $450 million exit financing in the form of a secured term loan credit facility, explains Mr. Sloan. The proceeds of the senior term loan facility will be funded to reorganized CSA on the effective date of the Plan. Pursuant to the April 8 Engagement Letter, Deutsche Bank Securities, Banc of America Securities and UBS Securities will serve as lead arrangers and book managers. Each of these financial institutions will structure, arrange and syndicate the senior term loan facility and will assist reorganized CSA in obtaining commitments from lenders with respect to the facility. The financial institutions will act as co-lead arrangers and joint bookrunners and one of them will act as administrative agent for, in each case, the senior term loan facility. Aside from the Engagement Letter, the Debtors will also execute the April 8 fee letter and other documents needed to obtain the senior term loan facility. The Court will hold a hearing to consider approval of the Debtors' requests on April 15, 2010. The Court will also consider for approval at the hearing the Debtors' motion to file the fee letter under seal. About Cooper-Standard Cooper-Standard Automotive Inc. -- http://www.cooperstandard.com/ -- headquartered in Novi, Michigan, is a leading global automotive supplier specializing in the manufacture and marketing of systems and components for the automotive industry. Products include body sealing systems, fluid handling systems and NVH control systems. The Company is one of the leading suppliers of chassis products in North America, with about 14% of market share. The Company's main custoemrs include Ford Motor Company, General Motors, Chrysler, Audi, Volkswagen, BMW, Fiat and Honda, among other automakers. Cooper-Standard Automotive employs approximately 16,000 people globally with more than 70 facilities throughout the world. Cooper-Standard is a privately held portfolio company of The Cypress Group and Goldman Sachs Capital Partners Funds. Cooper-Standard Holdings Inc., together with affiliates, filed for Chapter 11 on August 4, 2009 (Bankr. D. Del. Case No. 09-12743). Attorneys at Fried, Frank, Harris, Shriver & Jacobson LLP and Richards, Layton & Finger, P.A., will serve as bankruptcy counsel to the Debtors. Lazard Freres & Co. is serving as investment banker while Alvarez & Marsal is financial advisor. Kurtzman Carson Consultants LLC is notice, claims and solicitation agent. In its bankruptcy petition, the Company said that assets on a consolidated basis total $1,733,017,000 while debts total $1,785,039,000 as of March 31, 2009. The Company's Canadian subsidiary, Cooper-Standard Automotive Canada Limited, also sought relief under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice in Toronto, Ontario, Canada. Bankruptcy Creditors' Service, Inc., publishes Cooper-Standard Bankruptcy News. The newsletter tracks the Chapter 11 and CCAA proceedings undertaken by Cooper-Standard Holdings Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945- COOPER-STANDARD: Files New Rule 2015.3 Report --------------------------------------------- Cooper-Standard Holdings Inc. and its affiliated debtors filed in Court a report on the value, operations and profitability of those entities where they hold a substantial or controlling interest as of December 31, 2009, as required by Rule 2015.3 of the Federal Rules of Bankruptcy Procedure. Allen Campbell, vice-president and chief financial officer of CSHI, reported that the Debtors' estates hold stake in these entities: Interest of Entities the Estate -------- ----------- Cooper-Standard Automotive Canada Ltd. 100% Cooper-Standard Automotive Sealing de Mexico SA deC.V. 80% Cooper-Standard Automotive Services S.A. de C.V. 99.99% Coopermex, S.A. de C.V. 99.99% Cooper-Standard Automotive de Mexico S.A. de C.V. 99.99% Manufacturera El Jarudo, S. de R.L. de C.V. 99.99% Cooper-Standard Automotive de Mexico Fluid Services, S. de R.L. de C.V. 99.97% Cooper-Standard Automotive Fluid Systems de Mexico, S. de R.L. de C.V. 99.97% Cooper-Standard Automotive FHS, S.A. de C.V. 99.8% Cooper-Standard Automotive Japan KK 100% Cooper-Standard Automotive Korea Inc. 100% Cooper-Standard Services Korea, Inc. 100% Cooper-Standard (Suzhou) Automotive Co., Ltd. 100% Metzeler Automotive Profiles India Private Ltd. 74% Cooper-Standard Automotive India Private Ltd. 99.99% Cooper-Standard Automotive FHS (Australia) Pty. Ltd. 100% Cooper-Standard Automotive Brasil Sealing Ltda. 100% Cooper-Standard Automotive Brasil Fluid Systems Ltda. 69.02% Itatiaia Standard Industrial Ltda. 54.71% SPB Comercio e Participacoes Ltda. 100% Cooper-Standard Automotive France SAS 81% Cooper-Standard Automotive Polska Sp. z 0.0. 100% Cooper-Standard Automotive UK Sealing Ltd. 100% Cooper-Standard Automotive FHS Ceska republika s.r.o. 99.9% CSA International Holdings CV 99.995% Guyoung Technology Co. Ltd. 20.23% Nishikawa Standard Company LLC 50% The Debtors also filed in Court financial statements for the entities including valuation estimate, balance sheets, statements of income and cash flows, and statements of changes in partners' or shareholders' equity. Copies of these documents are available for free at http://bankrupt.com/misc/CSHI_Rule2015.3Dec3109.pdf About Cooper-Standard Cooper-Standard Automotive Inc. -- http://www.cooperstandard.com/ -- headquartered in Novi, Michigan, is a leading global automotive supplier specializing in the manufacture and marketing of systems and components for the automotive industry. Products include body sealing systems, fluid handling systems and NVH control systems. The Company is one of the leading suppliers of chassis products in North America, with about 14% of market share. The Company's main custoemrs include Ford Motor Company, General Motors, Chrysler, Audi, Volkswagen, BMW, Fiat and Honda, among other automakers. Cooper-Standard Automotive employs approximately 16,000 people globally with more than 70 facilities throughout the world. Cooper-Standard is a privately held portfolio company of The Cypress Group and Goldman Sachs Capital Partners Funds. Cooper-Standard Holdings Inc., together with affiliates, filed for Chapter 11 on August 4, 2009 (Bankr. D. Del. Case No. 09-12743). Attorneys at Fried, Frank, Harris, Shriver & Jacobson LLP and Richards, Layton & Finger, P.A., will serve as bankruptcy counsel to the Debtors. Lazard Freres & Co. is serving as investment banker while Alvarez & Marsal is financial advisor. Kurtzman Carson Consultants LLC is notice, claims and solicitation agent. In its bankruptcy petition, the Company said that assets on a consolidated basis total $1,733,017,000 while debts total $1,785,039,000 as of March 31, 2009. The Company's Canadian subsidiary, Cooper-Standard Automotive Canada Limited, also sought relief under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice in Toronto, Ontario, Canada. Bankruptcy Creditors' Service, Inc., publishes Cooper-Standard Bankruptcy News. The newsletter tracks the Chapter 11 and CCAA proceedings undertaken by Cooper-Standard Holdings Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945- COOPER-STANDARD: RSM Richter Files Report on Plan ------------------------------------------------- RSM Richter Inc., the firm appointed to monitor the assets of Cooper-Standard Automotive Canada Ltd., filed a report dated April 5, 2010, to inform the Ontario Superior Court of Justice about the recent development in connection with the filing of the Canadian unit's plan of compromise or arrangement. The firm disclosed that CSA Canada made "non-substantive" amendments to the plan to conform to the Second Amended Chapter 11 Plan of Reorganization of U.S.-based Cooper-Standard Holdings Inc. and its affiliated debtors. Under CSA Canada's amended plan, the term "Required Backstop Parties" that was previously used throughout the initial plan was replaced with "Consenting Backstop Parties." Consenting Backstop Parties means two-thirds in amount of the parties that are providing the equity commitment based on commitment percentage whose consent may be granted or withheld in accordance with Section 16 of the Equity Commitment Agreement. CSA Canada's amended plan also clarifies that the "prepetition credit facility claim" refers to any claim against CSA Canada arising under the December 23, 2004 credit agreement, including any swap arising under or relating to the agreement. A copy of CSA Canada's amended plan is available without charge at http://bankrupt.com/misc/CSHI_1stAmendedPlanCSACanada.pdf RSM Richter said that the amended plan was supposed to be posted at the Web site of Deutsche Bank Trust Company America three days before the March 26 meeting of lenders to vote on a resolution to approve the plan. The amended plan, however, was inadvertently not posted to the Web site, resulting in the lenders' approving the initial plan, according to the firm. "As the amendments to the plan were minor, [RSM Richter] does not believe that the prepetition lenders have been prejudiced by the posting error," the firm said in the April 5 report. RSM Richter said that Deutsche Bank supports the sanctioning by the Canadian Court of the plan and will be filing an affidavit confirming the voting results of the lenders. The firm also disclosed that it received notices of dispute from three lender groups with respect to the pro rata share of their prepetition credit facility claims. It said that discussions are ongoing between Deutsche Bank and those lenders to resolve the disputed amounts and that those amounts may not be material. RSM Richter also informed the Canadian Court that it did not receive any notices of opposition to the plan. Consequently, all lenders with proven claims for voting purposes will be deemed to have voted in favor of the plan pursuant to the Canadian Court's March 12 order accepting the filing of the plan, the firm said. About Cooper-Standard Cooper-Standard Automotive Inc. -- http://www.cooperstandard.com/ -- headquartered in Novi, Michigan, is a leading global automotive supplier specializing in the manufacture and marketing of systems and components for the automotive industry. Products include body sealing systems, fluid handling systems and NVH control systems. The Company is one of the leading suppliers of chassis products in North America, with about 14% of market share. The Company's main custoemrs include Ford Motor Company, General Motors, Chrysler, Audi, Volkswagen, BMW, Fiat and Honda, among other automakers. Cooper-Standard Automotive employs approximately 16,000 people globally with more than 70 facilities throughout the world. Cooper-Standard is a privately held portfolio company of The Cypress Group and Goldman Sachs Capital Partners Funds. Cooper-Standard Holdings Inc., together with affiliates, filed for Chapter 11 on August 4, 2009 (Bankr. D. Del. Case No. 09-12743). Attorneys at Fried, Frank, Harris, Shriver & Jacobson LLP and Richards, Layton & Finger, P.A., will serve as bankruptcy counsel to the Debtors. Lazard Freres & Co. is serving as investment banker while Alvarez & Marsal is financial advisor. Kurtzman Carson Consultants LLC is notice, claims and solicitation agent. In its bankruptcy petition, the Company said that assets on a consolidated basis total $1,733,017,000 while debts total $1,785,039,000 as of March 31, 2009. The Company's Canadian subsidiary, Cooper-Standard Automotive Canada Limited, also sought relief under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice in Toronto, Ontario, Canada. Bankruptcy Creditors' Service, Inc., publishes Cooper-Standard Bankruptcy News. The newsletter tracks the Chapter 11 and CCAA proceedings undertaken by Cooper-Standard Holdings Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945- COUNTRY GARDEN: Voluntary Chapter 11 Case Summary ------------------------------------------------- Debtor: Country Garden Fruit Market, Inc. 5855 Shirley Ann Drive Harrison, MI 48625 Bankruptcy Case No.: 10-21561 Chapter 11 Petition Date: April 20, 2010 Court: U.S. Bankruptcy Court Eastern District of Michigan (Bay City) Judge: Daniel S. Opperman Debtor's Counsel: Jason W. Bank, Esq. Kerr, Russell and Weber, PLC 500 Woodward Avenue, Suite 2500 Detroit, MI 48226 Tel: (313) 961-0200 Fax: (313) 961-0388 E-mail: jwb@krwlaw.com Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 The Company did not file a list of creditors together with its petition. The petition was signed by Raye Lynn Walraven, vice president. DAVID SMOLENSKY: Voluntary Chapter 11 Case Summary -------------------------------------------------- Debtor: David A. Smolensky 1657 Chapel Ridge Lane Mars, PA 16046 Bankruptcy Case No.: 10-22841 Chapter 11 Petition Date: April 20, 2010 Court: U.S. Bankruptcy Court Western District of Pennsylvania (Pittsburgh) Debtor's Counsel: Donald R. Calaiaro, Esq. Calaiaro & Corbett, P.C. Grant Building, Suite 1105 310 Grant Street Pittsburgh, PA 15219-2230 Tel: (412) 232-0930 Fax: (412) 232-3858 E-mail: dcalaiaro@calaiarocorbett.com Estimated Assets: $500,001 to $1,000,000 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. DBCH LLC: Voluntary Chapter 11 Case Summary ------------------------------------------- Debtor: DBCH, LLC 8390 E. Via de Ventura, F142 Scottsdale, AZ 85258 Bankruptcy Case No.: 10-11655 Chapter 11 Petition Date: April 20, 2010 Court: United States Bankruptcy Court District of Arizona (Phoenix) Judge: Sarah Sharer Curley 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 a list of its largest unsecured creditors together with its petition. The petition was signed by Maria Frank, manager. DELTA MUTUAL: Cancels ValuCorp Deal for Interim CFO --------------------------------------------------- Delta Mutual, Inc., on April 20, 2010, gave notice of termination, effective April 30, 2010, of its agreement with ValuCorp, dated as of November 1, 2009, pursuant to which ValuCorp had provided Michael Gilburd as Interim Chief Financial Officer. Delta Mutual, Inc., invests in oil and gas properties in South America. It intends to focus its investments in the energy sector, including development of energy producing investments and alternative energy production in Latin America and North America. At December 31, 2009, the Company had total assets of $1,750,005 against total liabilities, all current, of $1,206,826, resulting in stockholders' equity of $543,179. At December 31, 2008, the Company had stockholders' deficit of $645,912. During the fiscal year ended December 31, 2009, the Company had a gain from continuing operations of $850,000. The Company has an accumulated deficit of $3,580,837 and working capital deficiency of $967,042 as of December 31, 2009. The Company said it may require additional funding to execute its strategic business plan for 2010. In its April 15, 2010 report, Jewett, Schwartz, Wolfe & Associates in Hollywood, Florida, raised substantial doubt about the Company's ability to continue as a going concern. The auditor pointed to the Company's accumulated deficit and working capital deficiency. The auditor also said the Company is not generating sufficient cash flows to meet its regular working capital requirements. DELTA MUTUAL: Reports $850,091 Net Income for 2009 -------------------------------------------------- Delta Mutual, Inc., filed with the Securities and Exchange Commission its annual report on Form 10-K for the fiscal year ended December 31, 2009. The Company reported net income of $850,091 for 2009 from a net loss of $4,584,309 for 2008. The Company reported $0 sales commissions for 2009 from $43,365 for 2008. At December 31, 2009, the Company had total assets of $1,750,005 against total liabilities, all current, of $1,206,826, resulting in stockholders' equity of $543,179. At December 31, 2008, the Company had stockholders' deficit of $645,912. During the fiscal year ended December 31, 2009, the Company had a gain from continuing operations of $850,000. The Company has an accumulated deficit of $3,580,837 and working capital deficiency of $967,042 as of December 31, 2009. The Company said it may require additional funding to execute its strategic business plan for 2010. In its April 15, 2010 report, Jewett, Schwartz, Wolfe & Associates in Hollywood, Florida, raised substantial doubt about the Company's ability to continue as a going concern. The auditor pointed to the Company's accumulated deficit and working capital deficiency. The auditor also said the Company is not generating sufficient cash flows to meet its regular working capital requirements. A full-text copy of the Company's annual report on Form 10-K is available at no charge at http://ResearchArchives.com/t/s?6083 Delta Mutual, Inc., invests in oil and gas properties in South America. It intends to focus its investments in the energy sector, including development of energy producing investments and alternative energy production in Latin America and North America. DEER VALLEY: Section 341(a) Meeting Scheduled for May 18 -------------------------------------------------------- The U.S. Trustee for Region 14 will convene a meeting of Fanita Ranch, LP's creditors on May 18, 2010, at 9:30 a.m. The meeting will be held at the US Trustee Meeting Room, 230 N. First Avenue, Suite 102, Phoenix, AZ (341-PHX). This is the first meeting of creditors required under Section 341(a) of the U.S. Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Phoenix, Arizona-based Deer Valley Medical Center, LLC, filed for Chapter 11 bankruptcy protection on April 13, 2010 (Bankr. D. Ariz. Case No. 10-10726). Donald W. Powell, Esq., at Carmichael & Powell, P.C., assists the Company in its restructuring effort. The Company estimated its assets and debts at $10,000,001 to $50,000,000. DIANA LEMUS: Case Summary & 8 Largest Unsecured Creditors --------------------------------------------------------- Debtor: Diana E. Lemus 5702 Country Manor Court Richmond, VA 23234 Bankruptcy Case No.: 10-32817 Chapter 11 Petition Date: April 20, 2010 Court: U.S. Bankruptcy Court Eastern District of Virginia (Richmond) Judge: Kevin R. Huennekens Debtor's Counsel: David K. Spiro, Esq. Hirschler Fleischer Post Office Box 500 Richmond, VA 23218-0500 Tel: (804) 771-9500 Fax: (804) 644-0957 E-mail: dspiro@hf-law.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Debtor's list of 8 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/vaeb10-32817.pdf The petition was signed by the Debtor. DONALD DEMARCO: Voluntary Chapter 11 Case Summary ------------------------------------------------- Joint Debtors: Donald Francis DeMarco aka Don DeMarco Jacqueline DeMarco aka Jackie DeMarco 403 Calloway Court Silver Spring, MD 20905 Bankruptcy Case No.: 10-18721 Chapter 11 Petition Date: April 20, 2010 Court: U.S. Bankruptcy Court District of Maryland (Greenbelt) Judge: Paul Mannes Debtor's Counsel: Steven H. Greenfeld, Esq. Cohen, Baldinger & Greenfeld, LLC 7910 Woodmont Avenue, Suite 1103 Bethesda, MD 20814 Tel: (301) 881-8300 Fax: (301) 881-8350 E-mail: steveng@cohenbaldinger.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Joint Debtors did not file a list of creditors together with its petition. The petition was signed by the Joint Debtors. DOUBLE G. RANCH: Voluntary Chapter 11 Case Summary -------------------------------------------------- Debtor: Double G. Ranch, LLC 8955 E. Pinnacle Peak Road, Suite 99 Scottsdale, AZ 85255 Bankruptcy Case No.: 10-53029 Chapter 11 Petition Date: April 20, 2010 Court: U.S. Bankruptcy Court Eastern District of Michigan (Detroit) Judge: Steven W. Rhodes Debtor's Counsel: Matthew Wilkins, Esq. 401 S. Old Woodward Avenue, Suite 460 Birmingham, MI 48009 Tel: (248) 971-1800 E-mail: wilkins@bwst-law.com Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $10,000,001 to $50,000,000 The Company did not file a list of creditors together with its petition. The petition was signed by Peter J. Graves, president. EMISPHERE TECHNOLOGIES: Annual Stockholders Meeting on May 25 ------------------------------------------------------------- Emisphere Technologies Inc. said an annual stockholders meeting will take place on May 25, 2010, at the Park Avenue Club located at 184 Park Avenue, Florham Park, New Jersey. Cedar Knolls, N.J.-based Emisphere Technologies, Inc. (OTC BB: EMIS) -- http://www.emisphere.com/-- is a biopharmaceutical company that focuses on a unique and improved delivery of therapeutic molecules or nutritional supplements using its Eligen(R) Technology. The Company's balance sheet as of December 31, 2009, showed $5.9 million in assets and $53.8 million of debts, for a stockholders' deficit of $47.9 million. ENCORIUM GROUP: Deloitte and Touche Raises Going Concern Doubt -------------------------------------------------------------- Encorium Group, Inc., filed on April 19, 2010, its annual report on Form 10-K for the year ended December 31, 2009. Deloitte and Touche, LLP, in Philadelphia, Pa., expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that of the Company's recurring losses from operations, current available cash, and anticipated level of capital requirements. The Company reported a net loss of $3,869,693 on $21,166,675 of revenue for 2009, compared with a net loss of $21,073,476 on $26,357,162 of revenue for 2008. The Company's balance sheet as of December 31, 2009, showed $12,110,307 in assets, $9,839,756 of debts, and $2,270,551 of stockholders' equity. A full-text copy of the annual report is available for free at: http://researcharchives.com/t/s?608b Wayne, Pa.-based Encorium Group, Inc. is a clinical research organization that engages in the design and management of complex clinical trials for the pharmaceutical and biotechnology industries. ERICKSON RETIREMENT: Asks Court to Determine Tax Liability ---------------------------------------------------------- Various local tax authorities or LTAs filed proofs of claim asserting ad valorem tax claims on certain assets, consisting of personal and real property of Erickson Retirement Communities LLC and its debtor-affiliates. The taxes sought from the Debtors under the Claims are based on the LTAs' asserted valuations of the Owned Properties. Moreover, Vincent P. Slusher, Esq., at DLA Piper LLP, in Dallas, Texas, relates, the Debtors intend to take title on certain properties subject to the junior loans, which Pending Properties have tax balances due and forthcoming. Full-text copies of summaries of the Claims against the Owned Properties and Pending Properties -- Taxed Properties are available for free at: http://bankrupt.com/misc/ERC_OwnedPropClaims.pdf http://bankrupt.com/misc/ERC_PendingPropClaims.pdf The LTAs' valuations of the Owned Properties and Pending Properties far exceed the amount ERC Investment Holdings LLC or Coastwood and Redwood-ERC Senior Living Holdings LLC were willing to pay for them, Mr. Slusher points out. He notes that the Court has already held that the valuation and sale proceeds allocation under the Fourth Amended Joint Plan of Reorganization reflect the fair market value of the Debtors' assets, including the Taxed Properties. In this light, the U.S. Bankruptcy Court for the Northern District of Texas may use its authority to set the values of the Taxed Properties at their fair market values based on the Allocation and the related $365 million sale price of the Debtors' assets, and then adjust the corresponding taxes accordingly, Mr. Slusher points out. Accordingly, by this motion, the Debtors ask the Court to: (a) determine the fair market values of the Taxed Properties based on the Sale Price and Allocation; and (b) adjust the Debtors' tax liabilities related to the properties. City of Overland Park Reacts The City of Overland Park, Kansas, asks the Court to deny the Tax Determination Motion for these reasons: * The value of a real property and improvements owned by Debtor Kansas Campus, LLC, located in Overland cannot be set based on the Tax Determination Motion. * The special assessments on the Kansas Property do not relate to the assessed valuation of the Kansas Property, are owed by Kansas Campus independent of the assessed value of the Kansas Property and thus, cannot be altered based on any re- valuation of the Kansas Property. * The request lacks fundamental due process. Even if the Debtors' proposed valuation method is accepted, Overland asserts that no sale proceeds for the Kansas Property will serve as any determinant of value for that property. 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) FANITA RANCH: Section 341(a) Meeting Scheduled for May 11 --------------------------------------------------------- The U.S. Trustee for Region 15 will convene a meeting of Fanita Ranch, LP's creditors on May 11, 2010, at 4:00 p.m. The meeting will be held at 402 W. Broadway, Sixth Floor, Suite 630 San Diego, CA 92101. This is the first meeting of creditors required under Section 341(a) of the U.S. Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Carlsbad, California-based Fanita Ranch, LP, filed for Chapter 11 bankruptcy protection on April 7, 2010 (Bankr. S.D. Calif. Case No. 10-05750). William A. Smelko, Esq., who has an office in El Cajon, California, assists the Company in its restructuring effort. The Company estimated its assets and debts at $10,000,001 to $50,000,000. The Company's affiliate, Barratt American, Inc., filed a separate Chapter 11 petition on April 7, 2010 (Case No. 08-13249). FOUNTAIN VILLAGE: Promises to Pay Unsecured Claims in Seven Years ----------------------------------------------------------------- Fountain Village Development filed with the U.S. Bankruptcy Court for the District of Oregon a Disclosure Statement explaining its proposed Plan of Reorganization. The Debtor will begin soliciting votes on the Plan following approval of the adequacy of the information in the Disclosure Statement. According to the Disclosure Statement, the Plan provides for each secured creditor to retain its security interest in and liens on its collateral with the same priority the security interest and liens had on the petition date. The Debtor will either (a) deed certain of the properties securing a creditor's claim to that creditor in full satisfaction of the secured claim; or (b) keep the property as a retained property. Creditors holding general unsecured claims will receive pro rata distributions of 50% of excess cash flow generated by the reorganized company on a quarterly basis for seven years. The Debtor owes $1,251,000 to unsecured creditors. In addition, the Debtor anticipates that secured creditors will have deficiency claims totaling $5,010,221 resulting in additional unsecured debt. Under the Plan, all membership interests in the reorganized company will be issued to the general partners. The general partners will transfer all of their assets, except their primary home, household furnishings, and two cars to the reorganized company. Additionally, the Debtor will transfer all retained property to the reorganized company and the general partners will guaranty all of the Plan payments. A full text copy of the Disclosure Statement is available for free at http://bankrupt.com/misc/FountainVillage_DS.pdf The Debtor is represented by: Albert N. Kennedy (al.kennedy@tonkon.com) Tel: (503) 802-2013 Fax: (503) 972-3713 Ava L. Schoen (ava.schoen@tonkon.com) Tel: (503) 802-2143 Fax: (503) 972-3843 Tonkon Torp LLP 1600 Pioneer Tower 888 S.W. Fifth Avenue Portland, OR 97204 About Fountain Village Development Portland, Oregon-based Fountain Village Development, a general partnership, aka Fountain Village Development Co, owns, develops, operates, manages, and/or leases 20 buildings in Portland, Hillsboro, and Gearhart, Oregon. The Company has filed for Chapter 11 bankruptcy protection on November 20, 2009 (Bankr. D. Ore. Case No. 09-39718). The Company listed $50,000,001 to $100,000,000 in assets and $50,000,001 to $100,000,000 in liabilities. FRONTIER DRILLING: Moody's Cut Corp. Family Rating to 'Caa2' ------------------------------------------------------------ Moody's Investors Service downgraded the ratings for Frontier Drilling ASA reflecting multiple covenant violations under its credit agreements and weaker than expected operating performance. Moody's downgraded the Corporate Family Rating to Caa2 from Caa1, the Probability of Default Rating to Caa3 from Caa2, and the second lien term loan to Caa3 from Caa2. Moody's affirmed the ratings for the senior first secured credit facility at B1. The ratings remain under review for further downgrade. The downgrade reflects the company's weak operating performance and the resulting inability to remain in compliance with the maintenance covenants under its credit agreements. The Frontier Phoenix, which is expected to be the largest EBITDA contributor in the fleet, has experienced several issues since leaving the shipyard and commencing contract work in May 2009. The latest incident occurred in November 2009, when the Frontier Phoenix experienced an issue with its thrusters (part of its dynamic positioning or DP system), The rig has been off contracted dayrate since that time. Although it was originally anticipated that the necessary repairs to the Frontier Phoenix would have been completed by now, restart of its operations have been delayed due to additional thruster damage and malfunction during DP trials. While the company expects the Frontier Phoenix to be back on dayrate in early May 2010, the numerous issues with the Frontier Phoenix since it joined the fleet create uncertainty and the rig still has not established a proven track record of meeting operating expectations. In addition, in October of 2009, the Frontier Seillean, the floating Production,Storage and Offloading vessel, finished its contract with Petrobras in Brazil and has been idle since that time. The company is actively marketing this vessel but has been unable to secure a new contract. Even if Frontier does negotiate a new contract for the Frontier Seillean, it may be at a significantly lower dayrate than the contract that finished in October. The combination of these two vessels being off dayrate has led to the company to generate lower than expected EBITDA and has resulted in much higher leverage than previously anticipated. These factors have caused Frontier not to be in compliance with its financial covenants under its credit facilities and, consequently, Frontier is expected to be unable to provide a clean audit of its financial statements, which will also be a violation of the credit agreements' reporting requirements. The company has been negotiating amendments to these facilities, including provisions for higher permitted leverage levels, the infusion of additional capital from Frontier's sponsors to provide liquidity through a sufficient period to cover its cash needs until the Frontier Phoenix is back earning full dayrate, and significantly higher interest rates on the outstanding amounts under the facilities. However, to this point Frontier has been unable to reach agreement with the lenders and has no clear timetable as to when this issue may be resolved. The review for possible further downgrade reflects the concern that Frontier may not obtain the necessary waivers from the lenders and may be forced to seek alternative solutions, including bankruptcy protection. Conclusion of the review will include clear visibility on whether the company receives the waivers necessary to sufficiently bridge to the Frontier Phoenix being back on full dayrate and generating the EBITDA needed to reduce leverage; whether the company will have sufficient liquidity to fund its operations until full dayrate is achieved; or whether the company can and will pursue strategic alternative solutions and these solutions' impact on the debt holders. Under Moody's Loss Given Default methodology, the ratings for the first lien credit facilities do not change despite the downgrade of the CFR. This is due to the slight increase in the paid-in- kind note due to the shareholders which accrete in value and is structurally subordinated to the first lien as well as the 65% recovery rate assumed for the lenders given the strong collateral value of Frontier's fleet. The last rating action for Frontier Drilling ASA was on June 22, 2009, when Moody's upgraded the ratings and changed the outlook to positive from ratings under review direction uncertain. Frontier Drilling ASA, which is incorporated in Norway and has subsidiaries with an administrative office in Houston, Texas, is a subsidiary of privately owned FDR Holdings Ltd., and is a specialized provider of offshore contract drilling and production services to the oil and gas industry. FX REAL ESTATE: FX Luxury Unit to Liquidate in Bankruptcy --------------------------------------------------------- FX Real Estate and Entertainment Inc.'s remaining Las Vegas subsidiary, FX Luxury Las Vegas I, LLC, filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code on April 21, 2010 (Bankr. D. Nev. Case No. 10-17015). The Las Vegas Subsidiary owns approximately 17.72 contiguous acres of real property located at the southeast corner of Las Vegas Boulevard and Harmon Avenue in Las Vegas, Nevada, which secures its mortgage loans in the aggregate principal amount of $454 million as of April 21, 2010. The Las Vegas Property constitutes substantially all of the Company's business. The Las Vegas Subsidiary initiated the Chapter 11 Bankruptcy Proceeding pursuant to the terms and conditions of a Lock Up Agreement, as amended. Reuters says FX Luxury Las Vegas has $139.6 million of assets and $492.6 million of liabilities. Reuters relates the Company said the property is worth $137.7 million, barely half of the $268.1 million of secured claims on it. The Lock Up Agreement contemplates the orderly liquidation of the Las Vegas Subsidiary in the Chapter 11 Bankruptcy Proceeding by disposing of the Las Vegas Property for the benefit of the Las Vegas Subsidiary's (and its predecessor entities') creditors either pursuant to an auction sale for at least $256 million or, if the auction sale is not completed, pursuant to a prearranged sale to the Newco Entities under the terms of the Chapter 11 Bankruptcy Proceeding's plan of liquidation. The Lock Up Agreement is terminable by the first lien lenders, so long as they are not in breach of the Agreement, under certain conditions, including, without limitation, (i) if the interim cash collateral order for the Chapter 11 Bankruptcy Proceeding has not been entered on or before May 5, 2010 or the final cash collateral order for the Chapter 11 Bankruptcy Proceeding has not become a final order on or before June 15, 2010, or (ii) if it is reasonably certain that neither the auction sale of the Las Vegas Property nor the plan of liquidation's effective date is capable of occurring prior to August 11, 2010. The Lock Up Agreement is terminable by the Las Vegas Subsidiary, so long as neither the Las Vegas Subsidiary nor the Newco Entities are in breach of the Agreement, if any of the first lien lenders breach any of their obligations under the Lock Up Agreement after giving effect to any applicable notice and cure period. The Lock Up Agreement is terminable by either the Las Vegas Subsidiary or the Newco Entities if the final order has not been entered confirming the plan of liquidation and allowing the effective date for the plan of liquidation to occur on or before August 10, 2010. If the Las Vegas Property is sold under the Lock Up Agreement pursuant to the auction sale, it is highly unlikely that the Company will receive any benefit from such auction sale. If the auction sale is not completed and the Las Vegas Property is sold under the Lock Up Agreement pursuant to the prearranged sale to the Newco Entities, the Company will not receive any benefit from such prearranged sale. The parties to the First Amendment to Lock Up and Plan Support Agreement, dated as of April 16, 2010, are: (a) The First Lien Lenders under the Amended and Restated Credit Agreement, dated as of July 6, 2007, among FX Luxury Las Vegas I, LLC, a Nevada limited-liability company (fka Metroflag BP, LLC) and FX Luxury Las Vegas II, LLC, a Nevada limited-liability company (fka Metroflag Cable, LLC and subsequently merged into the Debtor), FX Luxury Las Vegas Parent, LLC, a Delaware limited-liability company (fka BP Parent, LLC and subsequently merged into the Debtor), the First Lien Lenders from time to time party thereto and Credit Suisse, Cayman Islands Branch, as administrative agent and collateral agent for the First Lien Lenders and Credit Suisse Securities (USA) LLC, as syndication agent, sole book running manager and sole lead arranger; (b) Landesbank Baden-Wurttemberg, New York Branch (as successor-in-interest to Credit Suisse, Cayman Islands Branch, the "First Lien Agent"; and together with the First Lien Lenders, the "Senior Group"); (c) The Debtor; and (d) LIRA Property Owner, LLC, as New Borrower, a Delaware limited liability company, and LIRA LLC, as New Parent. A full-text copy of the Lock-up Agreement is available at no charge at http://ResearchArchives.com/t/s?60a1 http://researcharchives.com/t/s?6005 Based in New York, FX Real Estate and Entertainment Inc. owns and operates 17.72 contiguous acres of land located at the southeast corner of Las Vegas Boulevard and Harmon Avenue in Las Vegas, Nevada. The Las Vegas property is currently occupied by a motel and several commercial and retail tenants with a mix of short and long-term leases. The first lien lenders had a receiver appointed on June 23, 2009, to take control of the property and as a consequence, the property is no longer being managed or operated by the Company. The Company's balance sheet at December 31, 2009, showed $141.0 million in assets and $494.1 million of debt, for a stockholders' deficit of $353.1 million. LL Bradford, in Las Vegas, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company is in default under the mortgage loan, has limited available cash, has a working capital deficiency and will need to secure new financing or additional capital in order to pay its obligations. GARY MCLEAN: Case Summary & 15 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Gary R. McLean 2716 Elliott Avenue PH2 Seattle, WA 98121 Bankruptcy Case No.: 10-14407 Chapter 11 Petition Date: April 20, 2010 Court: United States Bankruptcy Court Western District of Washington (Seattle) Judge: Thomas T. Glover Debtor's Counsel: Jeffrey L. Smoot, Esq. Lasher Holzapfel Sperry & Ebberson PLLC 601 Union, Suite 2600 Seattle, WA 98101-4000 Tel: (206) 624-1230 Fax: (206) 340-2563 E-mail: smoot@lasher.com Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $10,000,001 to $50,000,000 The petition was signed by Gary R. McLean. Debtor's List of 15 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ SunTrust Bank $2,300,000 PO Box 4418 Atlanta, GA 30302-4418 Marie Durflinger $106,512 The Johnson Law Group $57,982 Smyth & Mason PLLC $40,000 Kathleen Ann McLean $37,649 120 2nd Ave Bldg Assoc $10,263 Hideaway Golf Club $10,000 Quarry Golf Club $10,000 Tehama Golf Club $10,000 Blaine County Treasurer $5,865 Riverside County Treasurer $4,370 The Hideaway Owners Assoc $2,755 Terenue Ventures $465 Textron Financial Corp Unknown US Bank NA Unknown GENERAL GROWTH: GE Capital Out of Creditors Committee ----------------------------------------------------- Pursuant to Section 1102 of the Bankruptcy Code, Diana G. Adams, United States Trustee for Region 2, removed on April 5, 2010, 2010, General Electric Capital Corp., as member of the Official Committee of Unsecured Creditors in General Growth Properties, Inc., and its debtor-affiliates' Chapter 11 cases. The U.S. Trustee also replaced Fidelity Fixed Income Trust, Fidelity Strategic Real Return Fund and Fidelity Investments with Fidelity Summer Street Trust as member of the Creditors Committee. Fidelity Summer can be reached at: Fidelity Summer Street Trust: Fidelity Capital & Income Fund Attn: Andrew Boyd 82 Devonshire Street, V13G Boston, Massachusetts 02109 The Fidelity Entities are managed by Fidelity Management & Research Company. The existing members of the Committee are: -- Eurohypo AG, New York Branch; -- The Bank of New York Mellon Trust Co.; -- American High-Income Trust; -- Fidelity Fixed Income Trust, Fidelity Strategic Real Return Fund and Fidelity Investments; -- Wilmington Trust; -- Taberna Capital Management, LLC; -- Macy's Inc.; -- Millard Mall Services, Inc.; -- Luxor Capital Group, LP; and -- M&T Bank. About General Growth Based in Chicago, Illinois, General Growth Properties, Inc. -- http://www.ggp.com/-- is the second-largest U.S. mall owner, having ownership interest in, or management responsibility for, more than 200 regional shopping malls in 44 states, as well as ownership in master planned community developments and commercial office buildings. The Company's portfolio totals roughly 200 million square feet of retail space and includes more than 24,000 retail stores nationwide. General Growth is a self- administered and self-managed real estate investment trust. The Company's common stock is trading in the pink sheets under the symbol GGWPQ. General Growth Properties Inc. and its affiliates filed for Chapter 11 on April 16, 2009 (Bankr. S.D.N.Y., Case No. 09-11977). Marcia L. Goldstein, Esq., Gary T. Holtzer, Esq., Adam P. Strochak, Esq., and Stephen A. Youngman, Esq., at Weil, Gotshal & Manges LLP, have been tapped as bankruptcy counsel. Kirkland & Ellis LLP is co-counsel. Kurtzman Carson Consultants LLC has been engaged as claims agent. The Company also hired AlixPartners LLP as financial advisor and Miller Buckfire Co. LLC, as investment bankers. The Debtors disclosed $29,557,330,000 in assets and $27,293,734,000 in debts as of December 31, 2008. Bankruptcy Creditors' Service, Inc., publishes General Growth Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Growth Properties Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GENERAL GROWTH: Proposes Elk Grove City Pact -------------------------------------------- Debtor Elk Grove Town Center, L.P., seeks the U.S. Bankruptcy Court for the Southern District of New York's permission to enter into a stipulation with the City of Elk Grove, the Sacramento Area Sewer District and the Sacramento County Water Agency. The Debtor owns a real property in the area of Elk Grove, California. In September 2001, the City and the Debtor entered into a development agreement establishing zoning ordinances and conditions and restrictions applicable to the development by the Debtor of a regional mall on the Shopping Center Site and providing for the Debtor's related financing and installation of the certain offsite public improvements. Development at the Shopping Center Site began in September 2007 and the Elk Grove Promenade was scheduled to open to the general public between October 2008 and March 2009. However, the Debtors suspended development on the Elk Grove Promenade in 2008, and the Infrastructure Improvements remain unfinished. In connection with the Debtor's construction of the Infrastructure Improvements, it entered into various agreements with public entities for reimbursements and credits relating to the Infrastructure Improvements. The agreements related to the Infrastructure Improvements are: (1) a reimbursement agreement for the construction of the Elk Grove Promenade Major Roads Trunk Sewer and related work between the Debtor and the SASD, which provides for a maximum total reimbursement of $730,467 for the construction costs, engineering design and construction staking costs of the trunk sewer facilities; (2) a reimbursement agreement for certain water transmission mains to be located in Promenade Parkway, Bilby Road, Grant Line Road, Kammerer Road and Lent Ranch Parkway between the Debtor and the SCWA, providing for a total allowable reimbursement for engineering and construction costs for $1,032,873 to be provided within five years of the SCWA's acceptance of the major roads water transmission lines; and (3) a reimbursement agreement for the cost of construction of sewer lift station and force main trunk sewer facilities between the Debtor and the SASD, providing for a maximum reimbursement of $2,419,02 for the construction costs, engineering design and construction staking costs associated with the sewer lift station and force main trunk sewer facilities. To obtain the reimbursements or credits provided for under these agreements, the Debtor must complete the Infrastructure Improvements and clear the title to the Infrastructure Improvements so that those improvements may be accepted by the Public Entities. The Debtor and the SCWA, for the benefit of the City, who will own and maintain the improvements, are also finalizing a development impact fee credit agreement for the costs of certain of the Infrastructure Improvements relating to the trunk stormwater drainage infrastructure. The Debtor and SCWA intend to apply the development impact credits provided under the SCWA Trunk Stormwater Drainage Credit Agreement to offset about $1,945,467 in developer impact fees owed by the Debtor. The City agreed to reimburse the Debtor, upon completion of the Infrastructure Improvements, for the cost of construction of the roadways pursuant to the provisions of Chapter 16.95 of the Elk Grove Municipal Code establishing the City's Roadway Fee Program and the terms and conditions of a reimbursement agreement to be negotiated by the City and the Debtor. However, the City and the Debtor were unable to finalize a reimbursement agreement because the Infrastructure Improvements were not completed. The City currently has about $6,000,000 in its Roadway Fee Program fund that is available to reimburse the Debtor once the Public Improvements are completed and accepted by the City. After extensive arm's-length negotiations, the Parties entered into the Stipulation setting forth these salient terms: (1) The Debtor agrees to undertake any and all efforts and expend all amounts necessary to complete the Infrastructure Improvements including completion of the roadways, water and sewer transmission lines, and the sewer lift station, and trunk stormwater drainage. (2) The Debtor agrees to satisfy outstanding amounts for work performed relating to construction of the Infrastructure Improvements. (3) In reliance upon the Parties' Stipulation, including the Debtor's agreement to complete the Infrastructure Improvements: -- The City and the Debtor will enter into the City Reimbursement Agreement, subject to City Council approval, to provide for reimbursement of the actual or allowable costs of the specified roadway-related Infrastructure Improvements; and -- The SCWA and the Debtor will enter into a development impact fee credit agreement providing for certain credits for the cost of construction of certain of the Infrastructure Improvements relating to the trunk stormwater drainage infrastructure. (4) The Debtor will seek Bankruptcy Court approval to complete the Infrastructure Improvements and convey the Infrastructure Improvements free and clear of all liens and interests pursuant to the Reimbursement Agreements. (5) The City will seek preliminary approval of the City Reimbursement Agreement from the Elk Grove City Council. (6) The SCWA will recommend approval of the SCWA Trunk Stormwater Drainage Credit Agreement to the Sacramento County Water Agency's Board of Directors. (7) Pursuant to the Reimbursement Agreements, after the Public Entities' inspection and acceptance of the Infrastructure Improvements, the Debtor will convey and vest full, complete and clear title in the Infrastructure Improvements to the relevant Public Entity. Adam P. Strochak, Esq., at Weil, Gotshal & Manges LLP, in New York, asserts that the Debtor's entry into the Stipulation will enable it to complete the Infrastructure Improvements and obtain valuable reimbursement funds and credits for the completed Infrastructure Improvements available under the Reimbursement Agreements, and positions the Elk Grove Promenade project for eventual completion. In addition, completion and conveyance of the Infrastructure Improvements will allow the Debtor to apply substantial impact fees credits available under the Reimbursement Agreements to offset fees due to the Public Entities, thus recognizing a substantial savings for the Debtor's estate and inuring to the benefit of all stakeholders, he maintains. Although the Debtor believes that the Infrastructure Improvement Conveyances are within the scope of its ordinary course of business and permitted under Section 363(c) of the Bankruptcy Code and the Ordinary Course Sales Order, the Debtor filed this motion out of abundance of caution. The Court will consider the Infrastructure Improvements Motion on April 29, 2010. Objections are due April 22. About General Growth Based in Chicago, Illinois, General Growth Properties, Inc. -- http://www.ggp.com/-- is the second-largest U.S. mall owner, having ownership interest in, or management responsibility for, more than 200 regional shopping malls in 44 states, as well as ownership in master planned community developments and commercial office buildings. The Company's portfolio totals roughly 200 million square feet of retail space and includes more than 24,000 retail stores nationwide. General Growth is a self- administered and self-managed real estate investment trust. The Company's common stock is trading in the pink sheets under the symbol GGWPQ. General Growth Properties Inc. and its affiliates filed for Chapter 11 on April 16, 2009 (Bankr. S.D.N.Y., Case No. 09-11977). Marcia L. Goldstein, Esq., Gary T. Holtzer, Esq., Adam P. Strochak, Esq., and Stephen A. Youngman, Esq., at Weil, Gotshal & Manges LLP, have been tapped as bankruptcy counsel. Kirkland & Ellis LLP is co-counsel. Kurtzman Carson Consultants LLC has been engaged as claims agent. The Company also hired AlixPartners LLP as financial advisor and Miller Buckfire Co. LLC, as investment bankers. The Debtors disclosed $29,557,330,000 in assets and $27,293,734,000 in debts as of December 31, 2008. Bankruptcy Creditors' Service, Inc., publishes General Growth Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Growth Properties Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GENERAL GROWTH: White Marsh, 8 Others Emerge from Bankruptcy ------------------------------------------------------------ Nine affiliates of General Growth Properties, Inc., emerged from Chapter 11 on March 31, 2010, and April 2 and 6, 2010, according to a notice filed with the United States Bankruptcy Court for the Southern District of New York: Debtor Affiliate Emergence Date ---------------- -------------- White Marsh Mall, LLC March 31, 2010 White Marsh Mall Associates March 31, 2010 White Marsh Phase II Associates March 31, 2010 White Marsh General Partnership March 31, 2010 Stonestown Shopping Center Holding L.L.C. April 2, 2010 Stonestown Shopping Center L.L.C. April 2, 2010 Stonestown Shopping Center, L.P. April 2, 2010 Beachwood Place Holding, LLC April 6, 2010 Beachwood Place Mall, LLC April 6, 2010 The Plan Debtors' Joint Plan of Reorganization is deemed effective as of March 31, 2010, and April 2 and 6, 2010. Counsel to General Growth, James H.M. Sprayregen, P.C., at Weil, Gotshal & Manges LLP, in New York -- james.sprayregen@kirkland.com -- informed Bankruptcy Judge Allan L. Gropper that each of the conditions precedent to consummation of the Plan has been satisfied or waived in accordance with the Plan. After the Effective Date, and without the need for further Court approval, the Plan Debtors may (a) cause any or all of the Plan Debtors to be merged into or contributed to one or more of the Plan Debtors or non-Debtor Affiliates, dissolved or otherwise consolidated or converted, (b) cause the transfer of assets between or among the Plan Debtors or non-Debtor Affiliates or (c) engage in any other transaction in furtherance of the Plan. The Plan provides for 100% recovery to all holders of Claims against, and Interests in, the Plan Debtors. The order confirming the Plan on December 15, 2009, the second order confirming the Plan on December 23, 2009, the third order confirming the Plan on January 20, 2010, the fourth order confirming the Plan on February 16, 2010, the fifth order confirming the Plan on March 3, 2010, the sixth order confirming the Plan on March 18, 2010, and the seventh order confirming the Plan on March 26, 2010, and the Plan establish certain deadlines by which holders of Claims must take certain actions. Full-text copies of the Confirmation Orders dated December 15, and 23, 2009, January 20, 2010, February 16, 2010, and March 3, 18 and 20, 2010, are available for free at: * http://bankrupt.com/misc/ggp_Dec15ConfirmationOrder.pdf * http://bankrupt.com/misc/ggp_Dec23ConfOrd.pdf * http://bankrupt.com/misc/ggp_Jan20ConfOrder.pdf * http://bankrupt.com/misc/ggp_Feb16ConfOrder.pdf * http://bankrupt.com/misc/ggp_Mar3ConfOrder.pdf * http://bankrupt.com/misc/ggp_Mar18ConfOrder.pdf * http://bankrupt.com/misc/ggp_Mar26ConfOrder.pdf About General Growth Based in Chicago, Illinois, General Growth Properties, Inc. -- http://www.ggp.com/-- is the second-largest U.S. mall owner, having ownership interest in, or management responsibility for, more than 200 regional shopping malls in 44 states, as well as ownership in master planned community developments and commercial office buildings. The Company's portfolio totals roughly 200 million square feet of retail space and includes more than 24,000 retail stores nationwide. General Growth is a self- administered and self-managed real estate investment trust. The Company's common stock is trading in the pink sheets under the symbol GGWPQ. General Growth Properties Inc. and its affiliates filed for Chapter 11 on April 16, 2009 (Bankr. S.D.N.Y., Case No. 09-11977). Marcia L. Goldstein, Esq., Gary T. Holtzer, Esq., Adam P. Strochak, Esq., and Stephen A. Youngman, Esq., at Weil, Gotshal & Manges LLP, have been tapped as bankruptcy counsel. Kirkland & Ellis LLP is co-counsel. Kurtzman Carson Consultants LLC has been engaged as claims agent. The Company also hired AlixPartners LLP as financial advisor and Miller Buckfire Co. LLC, as investment bankers. The Debtors disclosed $29,557,330,000 in assets and $27,293,734,000 in debts as of December 31, 2008. Bankruptcy Creditors' Service, Inc., publishes General Growth Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Growth Properties Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GENERAL GROWTH: Simon Property Group Beefs Up Offer --------------------------------------------------- Simon Property Group, Inc., has sent a letter to General Growth Properties, Inc., outlining improvements and modifications to the terms of SPG's April 14, 2010, proposal to recapitalize GGP. As previously announced, SPG would invest $2.5 billion at the same per share price as the plan of reorganization sponsored by Brookfield Asset Management. To date, Paulson & Co., ING Clarion Real Estate Securities, Oak Hill Advisors, RREEF and Taconic Capital Advisors have committed to invest a combined $2.1 billion in GGP without receiving any of the highly dilutive and expensive warrants that GGP proposes to issue to Brookfield, Pershing Square and Fairholme Capital. The amended proposal offers significantly higher value and substantially greater certainty to GGP and all of its stakeholders than the transaction proposed by Brookfield. Most notably: SPG has agreed to backstop a $1.5 billion credit facility necessary for GGP to close and emerge from bankruptcy, thus eliminating a great risk and uncertainty inherent in the Brookfield-led proposal; SPG would agree to limits on its governance rights, including a cap on its voting rights at 20%, the right to designate only 2 of 9 GGP board members. SPG's proposed nominees, Dale Anne Reiss and Peter Linneman, are both highly respected, have significant experience in the real estate industry and are not affiliated with SPG; SPG has agreed to waive a $12.5 million fee that would be levied by Brookfield, Pershing Square and Fairholme Capital for their commitment to backstop the contemplated GGO rights offering; and SPG will agree to pay the holders of GGP's unsecured claims cash equal to the amount of accrued and unpaid pre-petition and post- petition interest at the stated non-default contract rate through the effective date of the plan plus default or compound interest, if any. Following is the text of the letter sent by SPG to GGP: April 21, 2010 CONFIDENTIAL Mr. Adam Metz Chief Executive Officer General Growth Properties, Inc. 110 North Wacker Drive Chicago, Illinois 60606 Dear Adam: This will formally confirm that Simon Property Group remains prepared to participate in the recapitalization of General Growth Properties on the terms we proposed in our letter of April 14th, subject to the improvements and modifications in favor of GGP and its stakeholders which we have discussed with you and your team and which are described in this letter. Our amended proposal delivers significantly higher value and substantially greater certainty of closing to GGP and all of its stakeholders than the transaction proposed by Brookfield Asset Management. Consideration. Simon would: acquire 250,000,000 shares of common stock in GGP for $2.5 billion in the aggregate, or $10.00 per share; fully backstop the additional 380,000,000 shares of common stock to be issued in the GGP reorganization and recapitalization, also at $10.00 per share, for $3.8 billion in the aggregate, to the extent commitments have not been received from other investors for that capital (as of today, $2.1 billion of such commitments have already been received, and Simon is highly confident of placing all of the contemplated equity capital); fully backstop the $1.5 billion credit facility contemplated to form a part of GGP's post-recapitalization balance sheet; and fully backstop the GGO rights offering, to the extent not backstopped by identified co-investors. Warrants. Neither Simon nor any of the other purchasers of GGP equity as part of the recapitalization would receive any warrants or similar up-front payment or fees in respect of their commitment to invest in GGP, either on an interim basis, or as part of the post-reorganization consideration to be issued in respect of these equity investments. As we previously noted, we estimate that by eliminating these warrants, and their dilutive effect, this benefit could be at least $895 million, or $2.75 per share based on today's share count. Governance. As you know, in order to avoid the perceived risk of any challenge to the proposed transaction, Simon proposed substantial limits on its governance rights, described in Annex A to our April 14 letter. In response to your request, and in order to even further dispel any concerns, by market participants, regulators or otherwise, regarding GGP's independence after the consummation of a Simon-led recapitalization, Simon would agree to the revised limits on its governance rights described in Annex A hereto, including a cap on its voting rights at 20%, the right to designate only 2 of 9 members to the GGP board of directors (as contrasted with the 3 of 9 that Brookfield would have the right to nominate pursuant to its proposal), and the requirement that any such nominees be independent and not affiliated with Simon. In fact, our 2 proposed directors are Dale Anne Reiss, former Senior Partner and Global Americas Director with Ernst & Young, LLP, and Peter Linneman, Professor of Real Estate, Finance and Public Policy at the Wharton School of Business. Both are distinguished professionals with substantial real estate expertise who are not affiliated with Simon. In this regard, it is not Simon's intent to gain control of GGP pursuant to the backstop obligations it is undertaking so as to provide certainty to GGP and assure a robust post-recapitalization capital structure, and, as set forth on the revised Annex A attached, Simon would agree to dispose of any interest in GGP in excess of 45%, regardless of any other requirement to do so, and to in any event dispose of any interest in GGP in order to satisfy any applicable regulatory authority, or avoid or lift any injunction, and accordingly to provide GGP with great certainty as to closing and equally great certainty as to its ability to operate independently and be perceived as doing so by the market and all of its constituencies. Co-Investors. As of the date of this letter, Simon has received commitment letters from Paulson & Co., Taconic Capital, ING Clarion Real Estate Securities, Oak Hill Advisors and RREEF who are together interested in co-investing, in the aggregate, at least $2.1 billion in equity in connection with a Simon sponsored recapitalization of GGP, discussions with other potential sources of capital are ongoing, and Simon is highly confident of placing all of the contemplated equity capital. As noted, to the extent that Simon does not find replacements for the full amount of the Pershing Square and Fairholme commitments, Simon will fully backstop the entire amount of such co-investment commitments, without any warrants, as well as backstopping an additional $125 million investment in GGO as Pershing Square and Fairholme are currently contemplated to do. As noted, GGP would not be expected or required to issue any warrants or incur any up-front commitment or other similar payments or fees in respect of the Simon, Paulson or other commitments to support the GGP recapitalization. Moreover, the Paulson and other co-investor equity commitments would be subject to claw-back reduction or cancellation by GGP on the same terms as are those of the existing Pershing Square and Fairholme commitments, subject only to the payment of a modest cancellation fee on any unused commitments of the equity co-investors other than Paulson. Additionally, although the Brookfield proposal would prohibit GGP, at closing, from having any five investors (other than Brookfield, Pershing Square and Fairholme) who together owned 30% of GGP's common stock, Simon has agreed to lower this limit from five to four, permitting GGP greater flexibility in seeking additional investors in its recapitalization. $1.5 Billion Debt Incurrence. Under the Brookfield proposal, GGP must incur an additional $1.5 billion of new, unsecured corporate debt in order to close and emerge from bankruptcy. We understand that GGP has not yet obtained this new debt. Simon will eliminate the risk with respect to this $1.5 billion of capital, and the contingency the requirement to raise it imposes on the Brookfield- sponsored recapitalization, by agreeing to backstop the entire amount, on mutually agreeable market terms. Simon will also provide full assistance to GGP in helping arrange this facility, to the extent GGP so requests. Closing Certainty. As a condition to its obligation to consummate its investment, Simon would require GGP to have a minimum liquidity of only $350 million, and a maximum aggregate indebtedness of $22.25 billion, in each case as you have requested as a variation from the terms of the Brookfield transaction. This provides GGP with $300 million more liquidity flexibility - and therefore greater certainty of closing - than the more stringent standards insisted upon by Brookfield (minimum liquidity of $500 million and maximum aggregate indebtedness of $22.1 billion). Further, with respect to the GGO spin-off, Simon would agree to delete the concept of "Essential Assets," thereby providing GGP with greater latitude in structuring the GGO spin-off and eliminating any risk that a delay in the formation of GGO and the transfer of assets to it will jeopardize the closing of the entire GGP recapitalization or allow any party the opportunity to renegotiate the terms of its investment. Preemptive Rights. Brookfield would have preemptive rights with respect to issuances of stock by either GGP or GGO so long as it is a 5% or greater holder in the respective entity. Simon will agree to limit its preemptive rights in GGP, such that they would only apply for so long as Simon holds a 15% or greater interest in GGP. GGO Backstop Fee. Brookfield, Pershing Square and Fairholme propose to receive an aggregate of $12.5 million, payable in GGO shares, as a fee for their commitment to backstop the contemplated GGO rights offering. Simon and its co-investors will waive this fee. Default and Compound Interest. Simon will agree to pay the holders of unsecured claims in GGP cash in the amount equal to the amount of accrued and unpaid prepetition interest and postpetition interest at the stated non-default contract rate through the effective date of the plan plus default or compound interest, if any, as reflected in the Plan Summary Term Sheet attached to our proposed form of Investment Agreement. The Brookfield proposal would not provide unsecured creditors with any recovery for the amount of their claims with respect to default or compound interest. No Financing or Other Contingencies. As in our initial proposal, there will be no financing condition whatsoever to Simon's obligations to close the transaction. As you know, Simon has an equity market capitalization in excess of $27 billion, $3.5 billion of available cash on its balance sheet, and $3.3 billion of available borrowing capacity under its revolving credit facility. Simon would be fully and immediately responsible for its commitment and backstop obligations. Simon's investment would not be contingent on any vote of Simon shareholders. Improvement to Brookfield Terms. Except as specified herein, the terms of Simon's formal binding contractual commitment to invest in GGP would be substantially identical to Brookfield's obligations pursuant to the Brookfield Investment Agreement and the other agreements contemplated thereby. Our proposed form of Investment Agreement, reflecting the revised proposal described above (and including the Plan Summary Term Sheet, also revised to reflect the improvements to our proposal described in this letter), and which we are prepared to enter into immediately, is being forwarded separately by our counsel to your counsel, together with a comparison to the form of agreement we provided to you on April 14 and copies of the additional commitment letters we have received from Taconic Capital, ING Clarion Real Estate Securities, Oak Hill Advisors and RREEF. We look forward to speaking to you on Thursday and to continuing our work towards an agreement. Very truly yours, David Simon Chairman of the Board and Chief Executive Officer cc: Board of Directors, General Growth Properties, Inc. Official Committee of Equity Security Holders Official Committee of Unsecured Creditors Jackson Hsieh, UBS Investment Bank Antitrust Protections The U.S. antitrust authorities have consistently recognized that the retail real estate industry is highly competitive and fragmented. It is one of the only industries exempted from the notification and waiting period requirements of the Hart-Scott- Rodino Act. Furthermore, the federal antitrust agencies and the courts have repeatedly indicated that there is no separate relevant product market for shopping malls. Rather, a properly defined relevant market would include all retail real estate. According to recent estimates, there are over 100,000 shopping centers of all kinds in the U.S. containing approximately 7 billion square feet. Moreover, in addition to the wide variety of physical stores, e-commerce websites and mail order catalogs have become established and powerful retail outlets. Only a small fraction of U.S. retail sales are conducted in properties owned by SPG and GGP. SPG strongly believes that its proposal to take a passive minority stake, with numerous procedural and governance safeguards, and together with a group of highly sophisticated, experienced and independent investors, does not pose any concern for the stakeholders of GGP. Specifically, Simon's acquisition of a 20% voting interest / 25% economic interest in GGP and the right to designate 2 of 9 members to the GGP board with independent directors, unaffiliated with Simon, will be subject to substantial limitations and restrictions. Among other things: GGP will remain a separate company, with its own management and board, and a majority of independent board members. All leasing decisions will be made at the property/operating company level, and Simon will not directly or indirectly try to influence them. The Simon designated GGP board members will not be affiliated with Simon and their service on the GGP board would be consistent with applicable antitrust laws and other rules. Simon designated GGP board members shall not be allowed to cast a vote on any capital investment, acquisition or divestiture decision of GGP that relates to mall/lifestyle center properties that are within the trade area of a mall/lifestyle center that Simon manages or has an interest in. To the extent that Simon acquires in excess of the 45% interest of GGP in order to fulfill the investment currently contemplated to be provided by Pershing Square and Fairholme, Simon will sell or distribute the excess interests, or to put the excess interests into a trust with the following terms and conditions, among others: The excess interests would be nonvoting pending disposition. The trustee would be instructed to sell the excess interests, either as a block or in a series of sales, at such time and under such conditions as to ensure that the divestitures do not adversely affect GGP or its ability to raise capital. The trustee would not be a director, officer, manager, agent or employee of Simon and would expressly have no fiduciary duty to Simon other than to carry forth the purposes of the trust agreement. SPG would also sell, distribute or put into a trust additional GGP shares to the extent required by regulatory authorities. About Simon Property Group Simon Property Group, Inc. 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) GENERAL MOTORS: Repays Loans to U.S. Government & Canada's EDC -------------------------------------------------------------- General Motors Holdings LLC, a wholly owned subsidiary of General Motors Company, on April 20, 2010, repaid all loans and other amounts outstanding under its secured credit agreement with the United States Department of the Treasury in an aggregate amount of $4.7 billion. General Motors of Canada Limited, a wholly owned subsidiary of GM Holdings, repaid all loans and other amounts outstanding under GMCL's loan agreement with Export Development Canada in an aggregate amount of C$1.1 billion. Following the repayment of the obligations under the UST Credit Agreement and the Canadian Loan Agreement, funds in an amount of $6.6 billion that were held in escrow have been released to GM Holdings, and the availability of those funds is no longer subject to the conditions set forth in the UST Credit Agreement. Reuters says GM remains nearly 61% owned by the U.S. government and 12% owned by the Canadian government after the loan repayments. Most of the roughly $50 billion of support from the U.S. government was converted to common and preferred stock. About General Motors General Motors Company -- http://www.gm.com/-- is one of the world's largest automakers, tracing its roots back to 1908. With its global headquarters in Detroit, GM employs 209,000 people in every major region of the world and does business in some 140 countries. GM and its strategic partners produce cars and trucks in 34 countries, and sell and service these vehicles through these brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, Opel, Vauxhall and Wuling. GM's largest national market is the United States, followed by China, Brazil, the United Kingdom, Canada, Russia and Germany. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. GM acquired its operations from General Motors Company, n/k/a Motors Liquidation Company, on July 10, 2009, pursuant to a sale under Section 363 of the Bankruptcy Code. Motors Liquidation or Old GM is the subject of a pending Chapter 11 reorganization case before the U.S. Bankruptcy Court for the Southern District of New York. At December 31, 2009, GM had total assets of US$136.295 billion against total liabilities of US$107.340 billion. At December 31, 2009, total equity was US$21.249 million. About Motors Liquidation General Motors Corporation and three of its affiliates filed for Chapter 11 protection on June 1, 2009 (Bankr. S.D.N.Y. Lead Case No. 09-50026). General Motors changed its name to Motors Liquidation Co. following the sale of its key assets to a company 60.8% owned by the U.S. Government. The Honorable Robert E. Gerber presides over the Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors in their restructuring efforts. Al Koch at AP Services, LLC, an affiliate of AlixPartners, LLP, serves as the Chief Executive Officer for Motors Liquidation Company. GM is also represented by Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as counsel. Cravath, Swaine, & Moore LLP is providing legal advice to the GM Board of Directors. GM's financial advisors are Morgan Stanley, Evercore Partners and the Blackstone Group LLP. Bankruptcy Creditors' Service, Inc., publishes General Motors Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Motors Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GENERAL MOTORS: Has "Real Possibility" of IPO by Yearend -------------------------------------------------------- Reuters' Carey Gillam and David Bailey report that General Motors Co.'s Chief Executive Ed Whitacre said on Wednesday the automaker "a real possibility" of launching an initial public offering by the end of the year. According to Reuters, Mr. Whitacre -- when asked whether GM could complete an offering by the end of 2010 -- said, "I am not certain at all, but we are working hard on it. It is a real possibility." Reuters also relates Mr. Whitacre said GM would invest $257 million at its Kansas City, Kansas, and Detroit Hamtramck assembly plants to build the next version of the Chevrolet Malibu. About General Motors General Motors Company -- http://www.gm.com/-- is one of the world's largest automakers, tracing its roots back to 1908. With its global headquarters in Detroit, GM employs 209,000 people in every major region of the world and does business in some 140 countries. GM and its strategic partners produce cars and trucks in 34 countries, and sell and service these vehicles through these brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, Opel, Vauxhall and Wuling. GM's largest national market is the United States, followed by China, Brazil, the United Kingdom, Canada, Russia and Germany. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. GM acquired its operations from General Motors Company, n/k/a Motors Liquidation Company, on July 10, 2009, pursuant to a sale under Section 363 of the Bankruptcy Code. Motors Liquidation or Old GM is the subject of a pending Chapter 11 reorganization case before the U.S. Bankruptcy Court for the Southern District of New York. At December 31, 2009, GM had total assets of US$136.295 billion against total liabilities of US$107.340 billion. At December 31, 2009, total equity was US$21.249 million. About Motors Liquidation General Motors Corporation and three of its affiliates filed for Chapter 11 protection on June 1, 2009 (Bankr. S.D.N.Y. Lead Case No. 09-50026). General Motors changed its name to Motors Liquidation Co. following the sale of its key assets to a company 60.8% owned by the U.S. Government. The Honorable Robert E. Gerber presides over the Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors in their restructuring efforts. Al Koch at AP Services, LLC, an affiliate of AlixPartners, LLP, serves as the Chief Executive Officer for Motors Liquidation Company. GM is also represented by Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as counsel. Cravath, Swaine, & Moore LLP is providing legal advice to the GM Board of Directors. GM's financial advisors are Morgan Stanley, Evercore Partners and the Blackstone Group LLP. Bankruptcy Creditors' Service, Inc., publishes General Motors Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Motors Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GRAFTECH INTERNATIONAL: S&P Assigns Rating on $230 Mil. Notes ------------------------------------------------------------- Standard & Poor's Ratings Services said that it assigned its 'BBB' issue-level rating (two notches above the corporate credit rating on the parent company, GrafTech International Ltd.) to GrafTech Finance Inc.'s proposed $230 million senior secured revolving credit facility due 2013. The recovery rating is '1', indicating S&P's expectation of very high (90% to 100%) recovery in the event of a payment default. The ratings are based on preliminary terms and conditions. It is S&P's understanding that the borrowers under the facility will be GrafTech Finance and GrafTech Switzerland S.A. The facility will be guaranteed by GrafTech and certain of its subsidiaries, with all guarantors providing a first priority lien on their assets as security to the facility. In addition, the obligations of GrafTech Switzerland S.A. will be secured by a pledge of all the equity and intercompany indebtedness owned by it and all its assets located in the U.S. The ratings on Parma, Ohio-based GrafTech reflect the company's fair business risk profile, which its significant exposure to the cyclical steel industry, high degree of supplier concentration, and continued raw material cost pressures demonstrate. Still, the company maintains a good market position in graphite electrodes, possesses healthy margins, and has an intermediate financial risk profile driven mainly by its very low book debt balances. Ratings List GrafTech International Ltd. Corporate credit rating BB+/Stable/-- New Ratings GrafTech Finance Inc. $230 million secured revolving credit facility due 2013 BBB Recovery rating 1 GRAYL'S LANTERN: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Grayl's Lantern Lane, Inc. 340 Beach Drive N.E. Saint Petersburg, FL 33701 Bankruptcy Case No.: 10-09198 Chapter 11 Petition Date: April 20, 2010 Court: United States Bankruptcy Court Middle District of Florida (Tampa) Debtor's Counsel: Timothy M. Papp, Esq. Timothy Papp & Associates, LLC 11681 Seminole Boulevard Largo, FL 33778 Tel: (727) 393-8351 Fax: (727) 392-2188 E-mail: mbaeten@honestrep.com Scheduled Assets: $2,509,512 Scheduled Debts: $2,307,050 A list of the Company's 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/flmb10-09198.pdf The petition was signed by Dale Grayl, president. HARMONY PARK: Taps Peter M. Lahni, Jr., as Chapter 11 Trustee ------------------------------------------------------------- Harmony Park LLC asks the U.S. Bankruptcy Court for the Southern District of Ohio for permission to employ Peter M. Lahni, Jr., as trustee of the Debtor. Mr Lahni will, among other things: a) take all necessary action to consult with Debtor concerning the marketing and sale of Debtor's assets; b) negotiate with potential purchasers concerning the price and terms of sale of Debtor's assets; c) negotiate with secured creditors concerning the sale of Debtor's assets. The Debtor relate that Mr. Lahni's hourly rate is $225. Mr. Lahni also requests for a $10,000 retainer fee. The best of the Debtor's knowledge, Mr. Lahni is a "disinterested person' as that term is defined in Section 101(14) of the Bankruptcy Code. The Debtor adds that the appointment of Mr. Lahni will provide reassurance to creditors and parties-in-interest, and to the U.S. Trustee's Office, that Debtor's estate is being administered by a disinterested professional. About Harmony Park LLC North Bend, Ohio-based Harmony Park LLC filed for Chapter 11 bankruptcy protection on March 12, 2010 (Bankr. S.D. Ohio Case No. 10-11566). Charles M. Meyer, Esq., and Deepak K. Desai, Esq., at Santen & Hughes LPA, assist the Company in its restructuring effort. HAWKER BEECHCRAFT: Inks Employment Contract with Worth Boisture --------------------------------------------------------------- Hawker Beechcraft Company entered into an employment agreement with Worth W. Boisture, Jr., President of Hawker Beechcraft Acquisition Company, LLC, pursuant to which, among other things, the Company agreed to purchase Mr. Boisture's residence in Savannah, Georgia if he was unable to sell the residence. On April 7, 2010, Mr. Boisture's residence was purchased by a third-party relocation agent acting on the Company's behalf for $1.04 million, the average appraised value of the residence based on two independent third party appraisals. In addition to the residence's purchase price, the Company agreed to pay Mr. Boisture $360,000, and a gross-up payment of $254,859 in respect of additional taxes owed by Mr. Boisture with respect to this payment. Mr. Boisture has agreed that if the relocation agent ultimately sells the residence for less than $1 million, Mr. Boisture will refund the Company 50% of any amounts for which the residence sells for less than $1 million, subject to an agreed floor amount. Hawker Beechcraft Acquisition Company, LLC, headquartered in Wichita, Kansas, manufactures business jets, turboprops and piston aircraft for corporations, governments and individuals worldwide. * * * As reported by the Troubled Company Reporter on Nov. 20, 2009, Moody's affirmed Hawker Beechcraft Acquisition Company LLC's Caa2 Corporate Family and Probability of Default ratings but lowered the rating on the company's senior secured bank obligations to Caa1 from B3 following announcement of plans to expand the size of its secured term loan. At the same time, ratings on Hawker Beechcraft's senior unsecured cash-pay and PIK election notes (Caa3) and subordinated notes (Ca) were affirmed. The company's Speculative Grade Liquidity rating was changed to SGL-4, designating weak liquidity, but is expected to improve once final amounts sourced from an incremental term loan are known. The outlook was revised to negative. The actions follow several developments: an amendment to the company's revolving credit facility reducing the size of the commitment and revising financial covenants, a proposed increase of $200 million to an existing $1,271 million term loan, disclosure of some $0.7 billion of non-cash impairment and other charges during the company's third quarter. On Nov. 19, 2009, the TCR stated that Standard & Poor's assigned its 'CCC+' issue-level rating to Hawker Beechcraft Acquisition Co. LLC's proposed $200 million incremental term loan, the same as the corporate credit rating on parent Hawker Beechcraft Inc., and a '4' recovery rating, which indicates S&P's expectation of average (30%-50%) recovery in a payment default scenario. In addition, S&P affirmed its 'CCC+' corporate credit rating on Wichita, Kansas-based Hawker Beechcraft. The company has about $2.15 billion of debt. S&P also lowered its issue-level rating on HBAC's existing senior secured credit facilities to 'CCC+' from 'B-', the same as the corporate credit rating on Hawker Beechcraft. S&P lowered the recovery rating on this debt to '4' from '2', indicating its expectation of average (30%-50%) recovery in a payment default scenario. At the same time, S&P affirmed its 'CCC-' issue-level rating on HBAC's senior unsecured and subordinated notes, two notches below the corporate credit rating on Hawker Beechcraft. The recovery rating on the senior unsecured and subordinated debt remains at '6', indicating S&P's expectation of negligible (0%- 10%) recovery in a payment default scenario. The outlook is negative. S&P could lower the ratings if the market for business jets deteriorates further, leading to reduced earnings, cash generation, and liquidity, resulting in cash on hand and revolver availability falling below $200 million. HAWKINS PRECAST: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Hawkins Precast Concrete Products, LLC 780 Route 910 Cheswick, PA 15024 Bankruptcy Case No.: 10-22857 Chapter 11 Petition Date: April 20, 2010 Court: U.S. Bankruptcy Court Western District of Pennsylvania (Pittsburgh) Debtor's Counsel: James A. Prostko, Esq. Prostko & Santillan, LLC 650 Corporation Street, Suite 304 Beaver, PA 15009 Tel (412) 261-2755 E-mail: jprostko@fyi.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/pawb10-22857.pdf The petition was signed by Mark T. Hawkins, president. HEALTHSOUTH CORP: Picks Douglas Coltharp as Chief Fin'l Officer --------------------------------------------------------------- HealthSouth Corporation appointed Douglas E. Coltharp as executive vice president and chief financial officer, effective May 6, 2010. Coltharp, who brings more than 20 years of senior financial and strategic planning experience to the position, will be responsible for all financial operations of the Company. This appointment concludes a comprehensive national search process that began at the end of 2009. "We are extremely pleased to welcome Doug as HealthSouth's new chief financial officer," said HealthSouth President and Chief Executive Officer Jay Grinney. "He is a talented finance professional with an impressive track record of exemplary performance and accomplishments. I am confident that Doug's strategic acumen, effective leadership style and broad experience will be a great addition to our executive management team. I would also like to thank Ed Fay, senior vice president -- finance and treasurer, and Andy Price, senior vice president -- chief accounting officer, for their valuable leadership during this transition period." "I am very excited to have the opportunity to join HealthSouth and be a part of an organization that plays such an important role in the delivery of quality rehabilitation services and care to so many patients across the country," said Mr. Coltharp. "I look forward to building on HealthSouth's momentum by working to support the Company's execution and achievement of its strategic objectives, furthering the development of new growth opportunities and delivering value for HealthSouth shareholders." Since May 2007, Mr. Coltharp has been a partner at Arlington Capital Advisors and Arlington Investment Partners, LLC (AIP), a boutique investment banking firm and private equity firm. Prior to that, Coltharp served 11 years as executive vice president and chief financial officer for Saks Incorporated. In this role, he was responsible for recapitalizing the company and guiding it through a series of acquisitions and organic growth strategies that transformed it from a small cap, regional department store operator to a Fortune 1000 national retailer. Mr. Coltharp began his career in 1987 at Nations Bank, N.A. and rose to become senior vice president and head of Southeast Corporate Banking. During this time, Coltharp advised Fortune 100 companies on capital raising and other corporate financial matters. Mr. Coltharp graduated magna cum laude from Lehigh University with a bachelor's degree in Finance and Economics and earned his master's in Business Administration with concentrations in Finance and Strategic Planning from the Wharton School, University of Pennsylvania. Mr. Coltharp currently serves as a member of the Board of Directors of Ares Capital Corporation, Under Armour, Inc. and Rue 21, Inc. About Healthsouth Corp. Birmingham, Alabama-based HealthSouth Corporation (NYSE: HLS) -- http://www.healthsouth.com/-- is the nation's largest provider of inpatient rehabilitative healthcare services. Operating in 26 states across the country and in Puerto Rico, HealthSouth serves patients through its network of inpatient rehabilitation hospitals, long-term acute care hospitals, outpatient rehabilitation satellites, and home health agencies. At Sept. 30, 2009, the Company had $1.754 billion in total assets against $2.288 billion in total liabilities and $387.4 million of convertible perpetual preferred stock. At Sept. 30, 2009, the Company had accumulated deficit of $3.756 billion, healthsouth shareholders' deficit of $1.002 billion, noncontrolling interests of $80.8 million and total shareholders' deficit of $921.9 million. HICKS SPORTS: League "In Control" of Rangers Sale Process --------------------------------------------------------- T.R. Sullivan at MLB.com reports that billionaire Tom Hicks, who controls the Texas Rangers, said the sale of the Rangers to a group headed by Pittsburgh sports attorney Chuck Greenberg is at an "impasse" until the deal is completed with the lending institutions that hold the debt on Hicks Sports Group. According to the report, Major League Baseball has been supportive of the Greenberg group's efforts since it was selected as the winning bidder by Hicks, the outgoing owner of the club. The group includes team president Nolan Ryan. Commissioner Bud Selig has expressed his desire for the transaction to be completed as quickly as possible. Mr. Hicks, according to the report, said the sale has not been completed because a significant holder of HSG debt has not signed off on the amount of money that will be distributed to the lenders out of proceeds from the sale. "I'm concerned about it," Mr. Hicks told reporters at Fenway Park before Wednesday night's game. "The sale is something that I've supported. . . . At the end of the day . . . [the lenders] don't release the liens on the debt unless they approve the deal, and no buyer is going to buy the team unless the liens are released. We said in Spring Training this is a complicated deal. It's even more complicated now." Major League Baseball is "in control of the sale process," according to a statement issued Wednesday night by the Office of the Commissioner. "As part of the Texas Rangers sale process, Tom Hicks selected the Chuck Greenberg/Nolan Ryan group as the chosen bidder on December 15, 2009 and entered into an exclusive agreement with that group. "Major League Baseball is currently in control of the sale process and will use all efforts to achieve a closing with the chosen bidder. Any deviation from or interference with the agreed upon sale process by Mr. Hicks or any other party, or any actions in violation of MLB rules or directives will be dealt with appropriately by the Commissioner." Said Mr. Hicks, "This will be resolved one way or the other. I hope it gets sorted out soon." As reported by the TCR on April 15, 2009, Hicks Sports Group was declared to be in default by a group of 40 financial institutions and other investors holding $525 million in debt. The Company missed a $10 million quarterly interest payment on March 31, 2009, triggering the default notice. About Hicks Sports Hicks Sports Group -- http://www.hickssportsgroup.com/-- was formed in 1999 as a sports and entertainment holding company controlled by Thomas O. Hicks. Prior to the formation of HSG, Mr. Hicks acquired the Dallas Stars in 1996 and then acquired the Texas Rangers from the George W. Bush/Edward W. Rose partnership in 1998. HSG was formed to oversee the Hicks family's sports teams, as well as the Hicks family's sports-related real estate developments. In a joint venture with an affiliate of the Dallas Mavericks, HSG owns a 50% stake in Center Operating Company, the group that manages and leases the American Airlines Center, which is home to the Dallas Stars and the Dallas Mavericks NBA team. Further, HSG operates Hicks Sports Marketing Group, an entity formed in 2006 to represent sports branding opportunities and corporate sponsorships for HSG, most notably for the Stars, the Rangers, and real estate projects related to Hicks' sports venues. HSG has an interest in eight Dr. Pepper StarCenter facilities, including the StarCenter in Frisco, Texas, that serves as the practice facility for the Dallas Stars, and owns approximately 40 acres surrounding the Dr. Pepper/7 Up Ballpark in Frisco, which is designated for future mixed-use development. In Arlington, HSG is involved in the development of over 100 acres, as an exciting mixed-use development focused on restaurants and entertainment, planned between the Rangers Ballpark in Arlington and the new Dallas Cowboys Stadium. HPT DEVELOPMENT: Can Access Business Revenues Until June 30 ----------------------------------------------------------- The Hon. Sarah S. Curley of the U.S. Bankruptcy Court for the District of Arizona authorized, on a preliminary basis, HPT Development Corporation to use all of the revenue generated by the operation of the Debtor's business until June 30, 2010, or on the occurrence of an event of default. Heritage Bank, N.A., claim a lien and security interest on lots 1, 2, 4 and pursuant to that certain construction loan amounting to $11,100,000, and deed of trust executed by the Debtor and Tay land Holdings, L.L.C., to the Bank. The Bank also claims a lien and security interest on Lots 3 and 6 pursuant to that $1,400,000 business loan and deed of trust. The Debtor will use the business revenues to pay operating expenses with a 10% variance. As adequate protection for any diminution in value of the lenders' collateral, the Debtors will grant Heritage Bank postpetition replacement liens on all property from and after the petition date. The Court also said that if no objections are received within 21 days of service, the April 19 order will be final. The Debtor is represented by: D. Lamar Hawkins, Esq. E-mail: dlh@ashrlaw.com Philip R. Rupprecht E-mail: prr@ashrlaw.com Christopher R. Chicoine E-mail: crc@ashrlaw.com Aiken Schenk Hawkins & Ricciardi PC 4742 North 24th St., Suite 100 Phoenix, AZ 85016 Tel: (602) 248-8203 Fax: (602) 248-8840 Paradise Valley, Arizona-based HPT Development Corporation filed for Chapter 11 bankruptcy protection on March 10, 2010 (Bankr. D. Ariz. Case No. 10-06294). The Company listed $10,000,001 to $50,000,000 in assets and $10,000,001 to $50,000,000 in liabilities. HPT DEVELOPMENT: U.S. Trustee Unable to Form Creditors Panel ------------------------------------------------------------ The Office of the U.S. Trustee for Region 14 notified the U.S. Bankruptcy Court for the District of Arizona that it was unable to appoint an official committee of unsecured creditors in the Chapter 11 cases of HPT Development Corporation. The U.S. Trustee said that there were insufficient indications of willingness from the unsecured creditors to serve on the committee. The U.S. Trustee reserves the right to appoint a committee if interest develop among the creditors. 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. HUNTER DEFENSE: Moody's Affirms 'B2' Corporate Family Rating ------------------------------------------------------------ Moody's Investors Service has affirmed the B2 corporate family and probability of default rating of Hunter Defense Technologies, Inc. The affirmation acknowledges Hunter's early 2010 acquisition of Nordic Air, Inc., a manufacturer of environmental control products to principally military customers. The $95 million (including expenses) acquisition was funded with a combination of cash on hand, $35 million of incremental first lien term loan and a common equity contribution. Also in early 2010, Hunter's ultimate parent made another relatively large acquisition of Airborne Systems Group Limited (not rated by Moody's), a manufacturer of military parachute products. Although a shared services agreement exists between Hunter and Airborne, the entity has been financed and is held within a separate borrowing group, unrated by Moody's. Hunter's B2 rating reflects limited scale, customer concentration, and potential for performance volatility against improved operating margin during the first six months of FYE June 2010, and some de-levering that the Nordic Air acquisition brought. The rating benefits from sole-source status many of Hunter's CBRN filter products hold with the U.S. Department of Defense and good penetration of Hunter's environmental control and power generation products within the U.S. military. While the Nordic Air acquisition should widen Hunter's customer range and its environmental control product suite, integration risk should remain elevated until achievement of the cross-sell and manufacturing synergies sought. Additionally, the rating is supported by Moody's expectation that Hunter should maintain adequate liquidity primarily through positive free cash flow throughout the near term. The stable outlook reflects a steady backlog level and expectation of credit metrics on par with the B2 rating. Although organic revenue growth since FY2009 has been flat some improved margins have provided offset. A potentially substantial 2013 earn-out payment on Nordic Air could require an additional liquidity source (could be offset by how the company manages remaining cash flow after required first lien repayments). Outlook stability will depend on sustaining interest coverage metrics, cost-effective integration of Nordic Air, confidence of both near-term liquidity profile adequacy and financial flexibility for the potential 2013 earn-out. Ratings affirmed: * Corporate family and probability of default, B2 * $20 million first lien revolver due August 2013, B1, LGD3, to 36% from 34% * $200 million first lien term loan due August 2014, B1, LGD3, to 36% from 34% * $80 million second lien term loan due February 2015, Caa1, LGD5, to 87% from 85% Moody's last rating action on Hunter occurred August 20, 2009 when the B2 corporate family rating was affirmed. Hunter Defense Technologies, Inc., headquartered in Solon, OH, is a provider of tactical shelters, chemical, biological, radiological, nuclear filters and collective protective systems, and mobile power and temperature control equipment for the U.S. military and Homeland Security. Annual revenues approximate $320 million. IRVINE SENSORS: Inks Settlement and Release with Looney Entities ---------------------------------------------------------------- Irvine Sensors Corporation and its Chief Executive Officer, John C. Carson, and its Chief Financial Officer, John J. Stuart, Jr. entered on March 26, 2010, into a Settlement and Release Agreement with Timothy Looney, Barbara Looney and TWL Group, L.P., pursuant to which the Company and Messrs. Carson and Stuart, on the one hand, and Looney, on the other hand, settled and released all claims and agreed to dismiss all litigation against each other relating to the Company's acquisition of Optex Systems, Inc. in December 2005 and various transactions related thereto, the effectiveness of such Settlement Agreement contingent upon the Company's receipt of consents from its senior creditors, Summit Financial Resources, L.P. and Longview Fund, L.P. The Company obtained such consents from Summit and Longview on or prior to April 9, 2010. In connection with Longview's consent, on April 9, 2010, the Company and Longview entered into an Agreement, Consent and Waiver pursuant to which the Company and Longview made certain agreements regarding the repayment of debt, cooperation in the sale of securities, contingent issuance of securities and waiver of certain rights in consideration for Longview delivering its consent to the Settlement Agreement and transactions related thereto. Specifically, the parties agreed that: (i) the Company will repay to Longview all principal and interest due under a Secured Promissory Note dated July 13, 2007 upon the closing of an equity or debt financing (or a series of equity or debt financings) which results in gross proceeds to the Company in the aggregate in excess of $1,500,000; (ii) if the Company arranges for a third-party investor to purchase the Company's Series A-1 Convertible Preferred Stock and Series A-2 Convertible Preferred Stock beneficially owned by Longview at its Stated Value pursuant to a binding letter of intent delivered to Longview no later than June 1, 2010, Longview will sell the Preferred Stock to such investor on such terms and also sell all the Waiver Securities to such investor at a price per share of $0.30, provided that the closing of such sale occurs no later than July 15, 2010; and (iii) in the event the LOI is not delivered on or prior to June 1, 2010, the Buyout has not closed on or prior to July 15, 2010 or Longview still owns Preferred Stock on July 15, 2010, the Company shall issue to Longview (x) non-voting equity securities, with terms junior to the Company's Series B Convertible Preferred Stock, convertible into 1,000,000 shares of the Company's Common Stock and (y) a two-year warrant to purchase 1,000,000 shares of the Company's Common Stock at an exercise price per share of $0.30, which was the last consolidated closing bid price of the Company's Common Stock prior to the execution of the Longview Agreement as determined in accordance with Nasdaq Marketplace Rules. The terms of the Contingent Securities and the Contingent Warrant will be negotiated in good faith and mutually agreed upon by the parties if such issuances are required, except that both the Contingent Securities and the Contingent Warrant must include a blocker which would preclude conversion into Common Stock resulting in beneficial ownership by the holder and its affiliates of more than 4.99% of the Company's outstanding Common Stock, the Contingent Warrant will include a cashless exercise provision, and neither the Contingent Securities nor the Contingent Warrant will be convertible or exercisable within six months of issuance. Furthermore, pursuant to the Longview Agreement, Longview waived its right to receive dividends on the Preferred Stock that have already accumulated or will accumulate through July 15, 2010, in consideration for the issuance by the Company to Longview of non- voting equity securities, with terms junior to the Company's Series B Convertible Preferred Stock, convertible into 2,750,000 shares of the Company's Common Stock on terms to be negotiated in good faith and mutually agreed upon by the parties, except that the Waiver Securities shall include a Blocker and the Company must use commercially reasonable efforts to issue such Waiver Securities within 15 business days after April 9, 2010. In the event that the Nasdaq Stock Market objects to the Company's issuance of the Contingent Securities, the Contingent Warrant or the Waiver Securities, the parties must negotiate in good faith to modify the Longview Agreement so as to effect as closely as possible the original intent of the parties and, if required, the Company must seek stockholder approval for such issuances at its annual stockholders' meeting in July 2010. Finally, pursuant to the Longview Agreement, Longview agreed to waive (i) all anti-dilution rights under the Preferred Stock, any warrant held by Longview or any other instrument or agreement between the Parties that may arise with respect to the Financing, but only to the extent that the price per share realized in such Financing is not lower than the exercise price per share of the Contingent Warrant and only if the Financing closes on or prior to July 15, 2010; and (ii) to waive all Anti-Dilution Rights with respect to the issuance of the Contingent Securities and the Waiver Securities. In the event that the exercise price of the Contingent Warrant is lower than the conversion price of the Preferred Stock on the Contingency Date, the Longview Agreement is not a waiver of Anti- Dilution Rights with respect thereto. Pursuant to the terms of the Settlement Agreement, the Company agreed to issue to Mr. Looney a secured promissory note in the principal amount of $2,500,000, and, in connection therewith, the Company agreed to enter into a Security Agreement and an Intellectual Property Security Agreement with Mr. Looney. On April 14, 2010, the Company issued the Note and entered into the Security Agreements, all on substantially the terms previously reported, except (i) the Note requires the Company to remit graduated monthly installment payments to Mr. Looney beginning with a payment of $8,000 in May 2010 and ending with a payment of $300,000 in June 2012 and (ii) a final payment of all outstanding principal and interest is due in July 2012. About Irvine Sensors Irvine Sensors Corporation -- http://www.irvine-sensors.com/-- headquartered in Costa Mesa, California, is a vision systems company engaged in the development and sale of miniaturized infrared and electro-optical cameras, image processors and stacked chip assemblies and sale of higher level systems incorporating such products and research and development related to high density electronics, miniaturized sensors, optical interconnection technology, high speed network security, image processing and low- power analog and mixed-signal integrated circuits for diverse systems applications. Optex Systems, Inc., a Texas corporation and a wholly owned subsidiary of Irvine Sensors, on September 21, 2009, filed a voluntary petition for relief under Chapter 7 of the United States Bankruptcy Code in the United States Bankruptcy Court in California. Irvine Sensors reported assets of $5.23 million and $9.23 million, resulting to a $4.0 million stockholders' deficit at the end of the quarterly period ended December 27, 2009. Irvine Sensors received a Nasdaq Staff Determination on March 16, 2010, indicating that the Company has not regained compliance with the $1.00 minimum bid price requirement for continued listing set forth in Nasdaq Marketplace Rule 5550(a)(2), and that the Company's securities are, therefore, subject to delisting from The Nasdaq Capital Market. JACOBS FINANCIAL: Feb. 28 Balance Sheet Upside-Down by $8.9-Mil. ---------------------------------------------------------------- Jacobs Financial Group, 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 $7,389,484 in assets, $13,281,797 of debts, and $2,970,772 of mandatorily redeemable preferred stock, for a stockholders' deficit of $8,863,085. The Company reported a net loss attributable to common stockholders of $355,613 on $345,638 of revenue for the three months ended February 28, 2010, compared with a net loss attributable to common stockholders of $618,951 on $314,839 of revenue for the same period of 2009. "The Company incurred operating losses (after accretion of mandatorily redeemable convertible preferred stock, including accrued dividends) of approximately $3,058,000 and $3,333,000 for the years ended May 31, 2009, and 2008, and has incurred losses of approximately $356,000 and $2,012,000 for the three and nine month periods ended February 28, 2010. Losses are expected to continue until the Company's insurance company subsidiary, First Surety Corporation develops a more substantial book of business. While continued improvement is anticipated as the business plan is more fully implemented, restrictions on the use of FSC's assets, the Company's significant deficiency in working capital and stockholders' equity raise substantial doubt about 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?608d Jacobs Financial Group, Inc. (OTC Bulletin Board: JFGI) is a Charleston, West Virginia-based holding company for First Surety Corporation, a West Virginia domiciled surety, Triangle Surety Agency, an insurance agency that specializes in coal reclamation surety bonds, and Jacobs & Company, a registered investment advisor. JOSHUA FARMER: Wants to Use Cash Collateral; Faces Objections ------------------------------------------------------------- Joshua Farmer and Andrea Farmer seek authority from the U.S. Bankruptcy Court for the Western District of North Carolina to use the cash collateral securing their obligation to their prepetition lenders. Andrew T. Houston, Esq., at Hamilton Moon Stephens Steele & Martin, PLLC, 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 weekly budgets. The Debtors will file copies of the budgets separately as soon as they are available. Because the amount of certain expenses or the timing of all expenses cannot be predicted exactly, the Debtors propose that they be in compliance with the Budgets so long as the Debtors do not exceed the Budgets by more than 10% per line item (on a cumulative basis). In exchange for using the cash collateral, the Debtors propose to provide the lenders with replacement liens in post-petition assets to the same extent and priority as existed pre-petition, for all cash collateral actually expended. Inland Mortgage Capital Corporation has objected to the Debtors' request to use cash collateral. Inland Mortgage is a creditor of Groves Apartments, LLC, which was formed as a "special purpose entity" on or about October 3, 2006, pursuant to a loan in the original principal amount of $5,000,000 that was made by Inland as of October 25, 2006 (the Loan). The Debtors and Raymond B. Farmer and Diane P. Farmer are guarantors in respect of Groves' obligations to Inland under the Loan. "The Debtors' request to use Groves Apartments' rents, revenues and funds is improper as a matter of law and as a matter of equity. First, the Debtors' pre-bankruptcy machinations and lack of disclosure have made it impossible to determine whether there really is a 'emergency' need to use the rents and revenues of Groves Apartments with respect to the maintenance and upkeep of the Groves Apartments. Second, the Debtors admit that they have no evidence of adequate protection to present to the Court. Third, the Debtors cannot establish that they will operate the Groves Apartments or use Inland's assets in the Debtors' ordinary course of business. The Debtors admit that the Groves Apartments were operated by Groves up until Groves was dissolved on April 1, 2010. It also bears noting that the Debtors have not proposed to use segregated accounts for Groves Apartments' rents and revenues. In no instance should the Debtors be allowed to commingle any funds held or received in respect of the Groves Apartments with any other funds," Inland Mortgage says. Should the Court determine that the Debtors have need to use Inland Mortgage's cash collateral on an interim basis, Inland Mortgage asks that the Court, among other things, order the Debtors to: (i) promptly provide a complete accounting of all rents, revenues and proceeds received in respect of the Groves Apartments since January 1, 2010; (ii) promptly segregate, and to keep, all rents, revenues and proceeds received in respect of the Groves Apartments in an insured depository account separate and apart from all other accounts and funds of the Debtors, any of their relatives or any entity that is affiliated with any of the Debtors or any of their relatives; (iii) promptly identify each expert that may be called upon to testify as to the value of the Groves Apartments or the alleged equity cushion of Inland Mortgage and to promptly make the expert available for deposition before the date on which the Court may conduct a subsequent hearing on the Debtors' motion; and (iv) appear at a deposition, before the date on which the Court may conduct a subsequent hearing on the Debtors' motion, to be conducted with respect to the factual issues arising in respect of the motion and without prejudice to Inland Mortgage's rights to subsequently conduct a Rule 2004 examination or deposition of the Debtors. The Palmetto Bank has also objected to the Debtors' request to use cash collateral. The Bank believes that the collateral properties should be managed by an independent third party management company who reports directly to the Court. The Bank joins in the motion of 1230 Overbrook Drive Holdings, LLC, seeking to have Easlan Management Company, Inc., serve as a custodian/trustee/examiner to operate the multifamily apartment and townhouse complexes which serve as lender collateral. The Bank wants: (a) separate accounting for each apartment complex; (b) separate bank accounts to ensure that funds from each collateral property are not commingled; (c) payment of all escrowed funds for taxes into an escrow account held by the respective lender; (d) payment of all funds for property insurance into a trust account maintained by counsel for the Debtors; (e) no payment of Debtors' professional fees or quarterly bankruptcy fees from cash collateral; (f) restrictions on payment of any amounts to insiders of the Debtors, specifically including companies wholly owned by the Debtors; and (g) payment of all net operating cash collateral to the respective lenders on a monthly basis. The Bank is represented by William L. Esser IV, Esq. (willesser@parkerpoe.com) at Parker Poe Adams & Bernstein, LLP. Inland Mortgage is represented by Bradley E. Pearce, Esq. (brad.pearce@kattenlaw.com) at Katten Muchin Rosenman 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. KIRKLAND HUTCHESON: Wants Until April 29 to File Chapter 11 Plan ---------------------------------------------------------------- Kirkland Hutcheson, LLC asks the U.S. Bankruptcy Court for the Western District of Missouri to extend its exclusive period to file a proposed Chapter 11 Plan until April 29, 2010. The Debtor needs additional time to finalize information to incorporate into Plan documents. The Debtor is represented by: David E. Schroeder 1524 East Primrose, Suite A Springfield, MO 65804 Tel: (417) 890-1000 Fax: (417) 886-8563 E-mail: bk1@dschroederlaw.com Branson, Missouri-based Kirkland Hutcheson, LLC -- dba Castle Rock Resort and fka Atrium Inn -- operates a hotel facility. The Company filed for Chapter 11 bankruptcy protection on November 24, 2009 (Bankr. W.D. Mo. Case No. 09-62695). The Company listed $10,000,001 to $50,000,000 in assets and $10,000,001 to $50,000,000 in liabilities. LEE WONG: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------- Debtor: Lee Huynh Wong aka Lee Wong 7756 Seward Park Avenue S Seattle, WA 98118 Bankruptcy Case No.: 10-14379 Chapter 11 Petition Date: April 20, 2010 Court: U.S. Bankruptcy Court Western District of Washington (Seattle) Judge: Samuel J. Steiner Debtor's Counsel: Jeffrey B. Wells, Esq. Attorney at Law 500 Union Street, Suite 502 Seattle, WA 98101 Tel: (206) 624-0088 E-mail: eajbwellaw@aol.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 According to the schedules, the Debtor says that assets total $1,338,000 while debts total $1,604,313. A copy of the Debtor's list of 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/wawb10-14379.pdf The petition was signed by the Debtor. LEHMAN BROTHERS: Fees to Bankruptcy Lawyers & Advisors Top $730MM ----------------------------------------------------------------- Lehman Brothers Holdings Inc. said in its monthly operating report, filed with the Bankruptcy Court and the Securities and Exchange Commission that it has paid all of its bankruptcy lawyers and advisers $731.6 million since its collapse on September 15, 2008 through March 31, 2010. Alvarez & Marsal LLC, the liquidator of LBHI, has collected $262.2 million in fees over 18 months. The restructuring firm, which provided Lehman with its current chief executive officer, Bryan Marsal, is billing the bankruptcy estate for "interim management." Weil Gotshal & Manges LLP, LBHI's lead bankruptcy counsel, is next on the list, having received a total of $164.78 million in fees and reimbursements from the estate. Lehman says that it has $16.6 billion in cash and investments as of March 31, 2010. 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: Court OKs Mediation to Resolve Disputed Claims --------------------------------------------------------------- Bill Rochelle at Bloomberg News reports that Bankruptcy Judge Arthur Gonzalez formally required creditors of Lehman Brothers Holdings Inc. to participate in non-binding mediation to resolve disputed claims. Some of the more than 120 objections filed by financial institutions and creditors were incorporated into the court-approved mediation procedures. According to the report, the mediation procedures provide for these terms: * Once Lehman objects to a claim, the creditor is automatically precluded from conducting discovery or filing papers in bankruptcy court to litigate the claim dispute. Lehman can initiate the process by making an offer of settlement. If the creditor doesn't accept the offer within 15 days, the claim disputes goes to mediation. * If an indenture trustee doesn't have authority under the indenture to mediate or settle on behalf of the holders, holders will be requested to give authority. If the indenture trustee isn't given authority to mediate, the claim dispute will go to bankruptcy court as if mediation failed. * Once Lehman picks a claim for mediation, the mediation will begin within 60 days and must be completed within 120 days after commencement. The mediator will have authority to combine several claims into a single mediation. While the proceedings will take place in New York, a creditor can participate by telephone with the consent of the mediator and the parties. Lehman pays the mediators' fees. 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: Investor Wins in Arbitration Case vs. UBS ---------------------------------------------------------- Vernon Healy says Lehman structured note investors have reason to celebrate again. With the latest Financial Industry Regulatory Authority (FINRA) arbitration ruling announced last week, UBS customers who lost money on Lehman Brothers principal protected notes are now five for five, with the decisions going against UBS and in favor of the customers in every reported case. In the latest reported arbitration award, the FINRA panel awarded more than $400,000 and to a pair of investors who bought Lehman Brothers structured notes, including principal protected notes, from UBS in early 2008. These notes were among $1 billion worth of Lehman products that UBS sold to U.S. investors, according to a UBS statement to Bloomberg. Other brokerages, including Raymond James and Credit Suisse, also pushed Lehman structured products to their clients. The products are now virtually worthless following the Lehman bankruptcy in September 2008. This FINRA ruling and growing number of big and small investors lining up to recover losses from UBS underscores the gross negligence UBS demonstrated when it pushed the now nearly worthless Lehman structured products on unwitting investors. It also reveals the growing momentum for those wronged investors who choose to seek legal counsel in attempting to recover their losses from UBS. Vernon Healy began filing claims against UBS on behalf of investors in early 2009 and has filed almost $2 million in Lehman note arbitration claims against UBS on behalf of investors in the past 2 months alone. A significant number of individual investors represented by Vernon Healy have had Lehman principal protected note losses in excess of $500,000. The international media have recognized Vernon Healy's investigative efforts involving Lehman notes and individuals from overseas, especially from the U.K., are contacting Vernon Healy to assist them in pursuing UBS in connection with the sale of Lehman structured notes in Europe. Based on the investigation by Vernon Healy, it appears that UBS even misled its own financial advisors regarding the safety of the Structured Notes, including the Lehman Principal Protected Notes, that UBS so heavily promoted. Vernon Healy is currently representing multiple Lehman structured product investors in FINRA arbitration. 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: LBI Proposes Deal with Client Money Claimants -------------------------------------------------------------- In line with their objective to save costs whilst winding down the company, the Joint Administrators of Lehman Brothers International (Europe) are proposing to settle in full certain eligible pre- administration client money claimants' entitlements from LBIE's general estate. This proposal applies to payments up to a maximum of $10,000 per client and is in return for an assignment of their pre-administration client money claim. The purpose of this decision is to engage over 500 of LBIE's 1500 pre administration client money claimants in a plan to reduce the client money claimant population, thereby reducing the administrative costs associated with those clients. The Joint Administrators envisage paying out $1m to clients via this process in the next 4 months, compared to the overall pre-administration client money pool of $2.1 billion. This plan will be actioned alongside the appeal proceedings currently pending regarding the correct interpretation of the FSA's client money rules. Andrew Clark, partner at PricewaterhouseCoopers LLP leading the team managing client money matters, said: "In line with the good progress being made across the Administration, this is a significant step to help smaller pre- administration client money claimants reach finality in their claims. At the same time it will materially reduce the costs associated with dealing with client monies for the benefit of all LBIE creditors." Information on LBIE's proposal has been posted on the PwC LBIE website, which sets out further details on eligibility and instructions for claimants on how to lodge a request for consideration. 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: UK Administrators Gain Control of $48 Bil. ----------------------------------------------------------- The Joint Administrators of Lehman Brothers International (Europe) have updated the creditor community with the issue of their progress report for the first 18 months of the administration. The Administrators are pursuing the objective of maximizing recoveries for the company's creditors. The report provides details of the progress made in this complex case. Steven Pearson, Joint Administrator and partner at PricewaterhouseCoopers LLP said, "We have had an exceptionally productive 6 months. We have now gained control of over $48bn of securities and cash to date. As advised in January, we have implemented a highly innovative Claim Resolution Agreement, which has enabled us to begin returning client assets. I expect the unsecured claim determination framework to be materially advanced over the next six months." Commenting on the reason for the strong progress Pearson observed, "The collaboration between the Lehman staff, PwC teams and our legal advisers has been central to our progress. The manner in which the combined team has dealt with the challenges of the past 6-months is reflected in our combined achievements. We are very well positioned to deal with the ongoing challenges of this unprecedented case." Key achievements to date: * The administrators have gained control of $48.6 billion of securities and cash to date, $8.6 billion of which has been dealt with in the last six months. * A further $1.0 billion of assets have been returned to clients in the last six months, bringing the total returned through bilateral agreements to $14.3 billion. In addition, over 90% of client asset creditors signed up to the Claim Resolution Agreement and the first returns to clients under this agreement have been made (post 19 March, the bar date under the CRA) and are in addition to the $14.3 billion. * $13.1 billion was held as cash at March 14, 2010. $13.8 billion of securities were under our control at March 14, 2010. * LBIE has made excellent progress with affiliate companies within the Lehman Brothers group. Of particular note was a bilateral asset agreement with Lehman Brothers Japan. The Administrators have filed $217.3 billion of gross claims against affiliates to date. * A date for proving unsecured claims against LBIE has been set for December 31, 2010. * Administrators' costs were $57.6 million in the 6-month period. Costs in the 18 months to date represent just 0.65% of total assets controlled by the Administrators. * The Administrators concluded a relocation of the LBIE operations from Bank Street to Canada Square in March 2010. The move will result in annual savings of over $73 million. * Over 440 Lehman staff and contractors continue to support the LBIE administration. Lehman staff are an integral part of the management and recovery efforts. A full-text copy of the progress report can be downloaded from www.pwc.co.uk/lehman/ 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) LIPSTICK BUILDING: Nears Foreclosure by Royal Bank of Canada ------------------------------------------------------------ According to Lois Weiss at The New York Post, people familiar with the matter said Royal Bank of Canada is looking to unload a $210 million mortgage it holds on the tower at 885 Third Ave. -- dubbed the Lipstick Building for its oval shape and rose color resembling a tube of lipstick. According to the Post, RBC's $210 million loan was provided as part of a complex financing structure used by Israel's Metropolitan Real Estate Investors -- led by Haim Revah and Jacob Abikzer -- to pay $648.5 million for the property in 2007. To help finance the deal, the Post relates, the buyers sold 79% of the land under the tower to SL Green, Gramercy Capital and a private investor for $317 million. They then got the RBC loan, which matures in 2017 and carries a 6.58% interest rate. The building pays $11 million a year to rent the land. That amount is scheduled to increase in 2012, sources said, according to the Post. The Post relates that people familiar with the matter said the tower has seen its loan reserves depleted as owners dipped into that cash to offset a shortfall in rent revenue. Sources told the Post SL Green is seen as a likely contender to buy RBC's loan given its control of the land. According to the Post, the building's tenants include Bernard Madoff, who occupied 40,000 square feet in the building on a lease that is set to expire next year; and law firm Lathan & Watkins, which has more than 341,000 square feet in the building. Sources told the Post that the U.S. government currently pays for one of the floors, while Surge Trading, the company that bought Mr. Madoff's above-board trading operation, rents the second one. The floor containing the 16,000 square foot trading floor is available for rent at $49 a square foot. The Post says Doug Harmon and Adam Spies at Eastdil Secured have been tapped to market the Lipstick Building loan and another $60 million loan on 292 Madison Ave. According to the Post, Mr. Harmon did not return calls for comment and Mr. Revah could not be reached. Mr. Revah's office had no comment. LIVE NATION: S&P Raises Corporate Credit Rating to 'B+' ------------------------------------------------------- Standard & Poor's Ratings Services said it raised its ratings on Beverly Hills, Calif.-based Live Nation Inc., raising the corporate credit rating to 'B+' from 'B'. At the same time, S&P lowered its ratings on subsidiary Ticketmaster Entertainment Inc., lowering the corporate credit rating to 'B+' from 'BB'. S&P removed all ratings from CreditWatch, where they were placed on Feb. 11, 2009. The rating outlook is positive. In addition, S&P assigned its issue-level and recovery ratings to Live Nation Entertainment's $1.2 billion senior secured credit facilities, consisting of a $300 million revolving credit facility due 2015, a $100 million term loan A due 2015, and a $800 million term loan B due 2016. S&P rated this debt at 'BB-' (one notch higher than the 'B+' corporate credit rating on the company) with a recovery rating of '2', indicating S&P's expectation of substantial (70%-90%) recovery for lenders in the event of a payment default. Finally, S&P assigned Live Nation Entertainment's Rule 144a privately placed $250 million senior notes due 2018 an issue-level rating of 'B' (one notch lower than the corporate credit rating) with a recovery rating of '5', indicating S&P's expectation for modest (10%-30%) recovery in the event of a payment default. Pro forma debt was $1.8 billion at Dec. 31, 2009. "The rating reflects S&P's view of the long-term risks of increasing ticket industry competitiveness and low EBITDA margin of Live Nation's concert promotion business," said Standard & Poor's credit analyst Hal Diamond, "reflecting significant artist clout and operating performance sensitivity to timing of global tours, attendance trends, and consumer and corporate discretionary spending and tastes." In S&P's view, the company's good competitive position in the live entertainment industry with multiyear ticketing contracts does not offset those factors. MAJESTIC STAR: Panel Now Arguing Vessels Are Real Estate -------------------------------------------------------- Bill Rochelle at Bloomberg News reports that the Bankruptcy Court will convene a hearing on April 27 to consider the request of the Official Committee of Unsecured creditors for authority to sue secured lenders on a theory that the security interests in two riverboat casinos in Gary, Indiana, are defective. According to the report, although the Company waived the right to challenge liens as part of an agreement for financing, Majestic Star suggested in an April 20 court filing that the judge not rule on the motion for at least 90 days. The delay in ruling, according to the casino operator, would "allow the parties to settle the claims." Bill Rochelle relates the Creditors Committee is now arguing that the floating casinos are actually real estate and, since no mortgages were filed, the liens are invalid. The lenders counter that the new theory has been presented late. The Committee originally argued that the floating casinos are no longer vessels as they are now permanently attached to land. To have valid security interests, the Committee had argued that liens must have been perfected as fixtures. About Majestic Star The Majestic Star Casino, LLC -- aka Majestic Star Casino, aka Majestic Star -- is based in Las Vegas, Nevada. It is a wholly owned subsidiary of Majestic Holdco, LLC, which is a wholly owned subsidiary of Barden Development, Inc. The Company was formed on December 8, 1993, as an Indiana limited liability company to provide gaming and related entertainment to the public. The Company commenced gaming operations in the City of Gary at Buffington Harbor, located in Lake County, Indiana on June 7, 1996. The Company is a multi-jurisdictional gaming company with operations in three states -- Indiana, Mississippi and Colorado. The Company filed for Chapter 11 bankruptcy protection on November 23, 2009 (Bankr. D. Del. Case No. 09-14136). The Company's affiliates -- The Majestic Star Casino II, Inc., The Majestic Star Casino Capital Corp., Majestic Star Casino Capital Corp. II, Barden Mississippi Gaming, LLC, Barden Colorado Gaming, LLC, Majestic Holdco, LLC, and Majestic Star Holdco, Inc. -- also filed separate Chapter 11 petitions. Kirkland & Ellis LLP is the Debtors' bankruptcy counsel. James E. O'Neill, Esq., Laura Davis Jones, Esq., and Timothy P. Cairns, Esq., at Pachulski Stang Ziehl & Jones LLP are the Debtors' Delaware counsel. Xroads Solutions Group, LLC, is the Debtors' financial advisor, while EPIQ Bankruptcy Solutions LLC are the Debtors' claims and notice agent. The Majestic Star Casino, LLC's balance sheet at June 30, 2009, showed total assets of $406.42 million and total liabilities of $749.55 million. When it filed for bankruptcy, the Company listed up to $500 million in assets and up to $1 billion in debts. MARSH HAWK: Asks for Court OK to Use Cash Collateral ---------------------------------------------------- Marsh Hawk Golf Club, LLC, and Ford's Colony Country Club, Inc., seeks authority from the U.S. Bankruptcy Court for the Eastern District of Virginia to use the cash collateral securing their obligation to their prepetition lenders. In 2006, as part of a financing with Textron Financial Corporation, Marsh Hawk acquired from FCCC the real property which comprises the Country Club and additionally acquired certain of the personal property associated with the Country Club. This financing (the Loan) is evidenced by that certain Promissory Note dated December 26, 2006, in the original principal amount of $18,000,000, as amended by that certain First Amendment to Promissory Note dated as of June 1, 2007 (collectively, the Note). Based upon the representations by its counsel, Prudential Industrial Properties, LLC, is the assignee of a majority interest of the Loan to Marsh Hawk. The Note was originally payable to Textron, but Prudential Industrial has indicated that a majority interest in the underlying loan was subsequently assigned in whole or in part by Textron to Prudential Industrial. No evidence of the assignment has been provided to the Debtors. Marsh Hawk also owes approximately $400,000 in unsecured trade debt, which is due and payable and typically is paid in the ordinary course of its business, and approximately $250,000 in equipment leases with various entities. FCCC is a non-recourse guarantor of the obligations of Marsh Hawk to Prudential Industrial under the Note and related loan documents, having executed that certain Non-Recourse Guaranty dated as of December 26, 2006. Richard Ford executed a limited guarantee of the Note as well. It is unclear at this point in the case the extent to which Prudential Industrial has an interest in cash collateral. The Debtors believe it has a security interest in the accounts and inventory of Marsh Hawk but not the accounts of FCCC. In addition, certain cash collateral is or will be generated by post- petition services. Ross C. Reeves, Esq., at Willcox & Savage, P.C., 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/MARSH_HAWK_budget.pdf The Debtors propose to condition use of cash collateral on Prudential Industrial being granted replacement liens to the same extent, validity and priority as the pre-petition liens in favor of Prudential Industrial. Objection Prudential Industrial has filed an objection to the Debtors' request to use cash collateral. Prudential Industrial wants the Debtors to prove, by a preponderance of the evidence, that Prudential Industrial's interests are adequately protected. Prudential Industrial has also asked the Debtors to provide it with an accounting as to what happened to approximately $400,000 in net cash that was generated during February 2010. Prudential Industrial is represented by Christian K. Vogel, Esq. (Christopher.Perkins@leclairryan.com); Christian K. Vogel, Esq. (Christian.Vogel@leclairryan.com); Grant T. Stein, Esq. (grant.stein@alston.com); Wendy R. Reiss, Esq. (wendy.reiss@alston.com); and Jonathan T. Edwards, Esq. (jonathan.edwards@alston.com). About Marsh Hawk Williamsburg, Virginia-based Marsh Hawk Golf Club, LLC, aka Ford's Colony Country Club, filed for Chapter 11 bankruptcy protection on April 1, 2010 (Bankr. E.D. Va. Case No. 10-50632). Ross C. Reeves, Esq., at Willcox & Savage, P.C., assists the Company in its restructuring effort. The Company estimated its assets and debts at $10,000,000 to $50,000,000. MARLIN WASHINGTON: Voluntary Chapter 11 Case Summary ---------------------------------------------------- Debtor: Marlin R. Washington dba Little Angel Learning Academy 2915 Bellerive Drive Bel-Nor, MO 63121 Bankruptcy Case No.: 10-44232 Chapter 11 Petition Date: April 20, 2010 Court: U.S. Bankruptcy Court Eastern District of Missouri (St. Louis) Judge: Charles E. Rendlen III Debtor's Counsel: Steven N. Cousins, Esq. E-mail: scousins@armstrongteasdale.com 211 N. Broadway, Suite 2600 St. Louis, MO 63102-2740 Susan K. Ehlers, Esq. E-mail: sehlers@armstrongteasdale.com Armstrong, Teasdale et al. One Metropolitan Square, Suite 2600 St. Louis, MO 63102 Tel: (314) 621-5070 Estimated Assets: $500,001 to $1,000,000 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. MARSHALL GROUP: Chapter 11 Trustee Files Amended Plan Outline ------------------------------------------------------------- Conrad Myers, the Chapter 11 trustee, filed with the U.S. Bankruptcy Court for the District of Oregon amended Disclosure Statement in relation to the proposed Plan of Reorganization for The Marshall Group, LLC. According to the amended Disclosure Statement, on the effective date of the Plan, the Debtor's membership units will be issued in the name of the Liquidating Trust. Under the Plan, a reserve fund in the amount of $8,000 will be set aside for payment of allowed convenience claims. The Marshalls each hold a 50% membership interest in Debtor. On the effective date, the interests of the Marshalls will be cancelled and re-issued to the Liquidating Trust. As reported in the Troubled Company Reporter on February 15, 2010, the Plan contemplates paying unsecured creditors who are owed more than $100 from excess cash flow from operation of the Reorganized Debtor's business, after certain other payments to creditors are made. In addition, the Trustee anticipates unsecured creditors will receive the net proceeds from the ultimate sale of the clinics. Although the amount payable to creditors is very difficult to estimate, the Trustee anticipates there being between $1 million and $1.5 million available to pay creditors over a period of 24 to 60 months. The trustee estimates this will lead to a distribution of between 10%-20% (without a discount for the time value of money) to each unsecured creditor. Unsecured creditors owed less than $100 may either receive (1) a cash payment of 20% of their claim within 30 days of the effective date of the Plan, or (2) receive a voucher for services equal to the greater of 50% of their claim or $15. The Debtor's amended schedules list unsecured nonpriority claims totaling $5 million. A full-text copy of the Disclosure Statement is available for free at http://bankrupt.com/misc/MarshallGroup_AmendedDS.pdf The Chapter 11 trustee is represented by: Peter C. McKittrick (PMcKittrick@fwwlaw.com) Christopher L. Parnell (CParnell@fwwlaw.com) Farleigh Wada Witt 121 SW Morrison Street, Suite 600 Portland, OR 97204-3136 Tel: (503) 228-6044 About The Marshall Group LLC The Marshall Group LLC owns and operates two medical clinics - one clinic in Redmond, Oregon, and a second clinic in McMinnville, Oregon. The Debtor owns several parcels of real property in McMinnville, Oregon. There is a new three-story office building, former hotel, restaurant, and 2 empty houses on the McMinnville Complex. The Debtor has completed construction of the first floor of its office building. It has leased space on the first floor. Construction on the second and third floors is not completed. The company filed for Chapter 11 protection on Sept. 4, 2008 (Bankr. D. Ore. Case No. 08-34585). Gary U. Scharff, Esq., at Gary Underwood Scharff Law Office, in Portland, Oregon, represents the Debtor as counsel. In its schedules, the Debtor listed total assets of $12,559,346, and total debts of $12,913,569. MASTER LEASE: Case Summary & 18 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Master Lease of Delaware, LLC 9695 Brighton Road Henderson, CO 80640-8633 Bankruptcy Case No.: 10-19129 Chapter 11 Petition Date: April 20, 2010 Court: United States Bankruptcy Court District of Colorado (Denver) Judge: Elizabeth E. Brown Debtor's Counsel: Jeffrey Weinman, Esq. Weinman & Associates, P.C. 730 17th Street Suite 240 Denver, CO 80202 Tel: (303) 572-1010 Fax: (303) 572-1011 E-mail: jweinman@epitrustee.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's 18 largest unsecured creditors is available for free at http://bankrupt.com/misc/cob10-19129.pdf The petition was signed by William S. Hoebel, manager. MATERA RIDGE: Taps Belding Harris to Handle Reorganization Case --------------------------------------------------------------- Matera Ridge, LLC, asks the U.S. Bankruptcy Court for the District of Nevada for permission to employ Belding, Harris & Petroni, Ltd. as counsel. Belding Harris will, among other things: -- examine and prepare records and reports as required by the Bankruptcy Code, Federal Rules of Bankruptcy Procedure and Local Bankruptcy Rules; -- prepare applications and proposed orders to be submitted to the Court; and -- identify and prosecute claims and causes of action asserted. Stephens R. Harris, Esq., tells the Court that Belding Harris received an advanced retainer of $11,039. The hourly rate of Belding Harris' personnel are: Mr. Harris, Esq. $400 Chris D. Nichols, Esq. $350 Gloria M. Petroni, Esq. $375 Paraprofessional $195 Mr. Harris assures the Court that Belding Harris is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Mr. Harris can be reached at: Belding, Harris & Petroni, Ltd. 417 West Plumb Lane Reno, NV 89509 Tel: (775) 786-7600 Fax: (775) 786-7764 About Matera Ridge, LLC Reno, Nevada-based Matera Ridge, LLC, filed for Chapter 11 bankruptcy protection on March 10, 2010 (Bankr. D. Nev. Case No. 10-50749). The Company listed $10,000,001 to $50,000,000 in assets and $10,000,001 to $50,000,000 in liabilities. MDR DEVELOPMENTS: Voluntary Chapter 11 Case Summary --------------------------------------------------- Debtor: MDR Developments II, LLC 8390 E. Via de Ventura F142 Scottsdale, AZ 85258 Bankruptcy Case No.: 10-11651 Chapter 11 Petition Date: April 20, 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 a list of its largest unsecured creditors together with its petition. The petition was signed by Kenneth Frank, manager. MERIDIAN RESOURCE: Fortis Extends Forbearance Until May 7 --------------------------------------------------------- The Meridian Resource Corporation and certain of its subsidiaries have entered into a Twelfth Amendment to Forbearance and Amendment Agreement, dated as of April 15, 2010, with Fortis Capital Corp., as administrative agent, and the several banks, financial institutions and other entities from time to time parties to the Amended and Restated Credit Agreement, dated as of December 23, 2004, as amended, among The Meridian Resource Corporation, Fortis Capital Corp., as administrative agent. The Twelfth Forbearance Amendment, among other things, extends to May 7, 2010, from April 15, 2010 the date on which the Fortis Forbearance Agreement will terminate if the Company has not then received shareholder approval for the proposed merger with Alta Mesa Holdings, LP. On April 7, 2010, Meridian Resource, Alta Mesa Holdings, and Alta Mesa Acquisition Sub LLC entered into the First Amendment to Agreement and Plan of Merger. Alta Mesa raised its offer price for the outstanding common stock of Meridian to $0.33 per share from $0.29 per share in cash, a 14% increase over its prior offer price and a 23% premium over the closing price of Meridian stock on April 7, 2010. The merger agreement was not amended in any other respect. The special meeting of Meridian Resource's shareholders will be reconvened on April 28, 2010, at 3:00 p.m. Central Time in the auditorium in Fulbright Tower, 1301 McKinney, Houston, Texas. The record date for shareholders entitled to vote at the meeting remains February 8, 2010. Under the Twelfth Forbearance Amendment, the Company was required to pay its Lenders an amendment fee of approximately $207,500. The Twelfth Forbearance Amendment also accelerates by six days the due date for the scheduled May 2010 principal payment required by the Fortis Forbearance Agreement. The members of the lending consortium are: * Fortis Capital Corp., as Administrative Agent, Co-Lead Arranger, Bookrunner, Issuing Lender, and a Lender; * The Bank of Nova Scotia, as Co-Lead Arranger, Syndication Agent, and a Lender; * Comerica Bank; * U.S. Bank National Association; and * Allied Irish Banks plc A full-text copy of the Twelfth Forbearance Amendment is available at no charge at http://ResearchArchives.com/t/s?6079 A full-text copy of the First Amendment to the Merger Agreement is available at no charge at http://ResearchArchives.com/t/s?607a Meridian has hired bankruptcy counsel to prepare for a possible bankruptcy filing in the event its planned merger with Alta Mesa Holdings, LP is not consummated. About Meridian Resource Based in Houston, Texas, The Meridian Resource Corporation (NYSE:TMR) -- http://www.tmrc.com/-- is an independent oil and natural gas company engaged in the exploration, exploitation, acquisition and development of oil and natural gas in Louisiana, Texas, and the Gulf of Mexico. Meridian has access to an extensive inventory of seismic data and, among independent producers, is a leader in using 3-D seismic and other technologies to analyze prospects, define risk, target and complete high- potential wells for exploration and development. Meridian has a field office in Weeks Island, Louisiana. MERIDIAN RESOURCE: Initial Payment Under Shell Oil Deal Extended ---------------------------------------------------------------- The Meridian Resource Corporation on January 11, 2010, entered into a Compromise and Settlement Agreement with Shell Oil Company and SWEPI LP regarding indemnity claims made by Shell under two acquisition agreements related to certain fields the Company acquired from Shell in the late 1990s. On April 15, 2010, the Company and Shell entered into the Second Amendment to Compromise and Settlement Agreement that extended the date for conveyance of certain property and the date for payment of the first of five annual payments of $1 million each to the earlier of July 1, 2010, or the closing of a sale of the assets or equity interest in the Company to a third party -- the transactions contemplated by the proposed merger with Alta Mesa Holdings, LP qualifies as such a sale transaction. About Meridian Resource Based in Houston, Texas, The Meridian Resource Corporation (NYSE:TMR) -- http://www.tmrc.com/-- is an independent oil and natural gas company engaged in the exploration, exploitation, acquisition and development of oil and natural gas in Louisiana, Texas, and the Gulf of Mexico. Meridian has access to an extensive inventory of seismic data and, among independent producers, is a leader in using 3-D seismic and other technologies to analyze prospects, define risk, target and complete high- potential wells for exploration and development. Meridian has a field office in Weeks Island, Louisiana. At December 31, 2009, the Company had total assets of $183,130,000 against total current liabilities of $119,913,000 and other debt of $22,473,000, resulting in stockholders' equity of $40,744,000. In its April 15, 2010 report, BDO Seidman, LLP in Houston, Texas, said at December 31, 2009, the Company was in violation of certain debt covenants resulting in the default on its revolving credit and other debt agreements, which raise substantial doubt about the Company's ability to continue as a going concern. MERIDIAN RESOURCE: Reports $72,636,000 Net Loss for 2009 -------------------------------------------------------- The Meridian Resource Corporation has filed with the Securities and Exchange Commission its annual report on Form 10-K for the fiscal year ended December 31, 2009. Meridian reported a net loss of $72,636,000 for 2009 from a net loss of $209,886,000 for 2008 and net income of $7,137,000 for 2007. Revenues were $89,254,000 for 2009 from $149,165,000 for 2008 and $152,178,000 for 2007. Meridian recorded a net loss in the fourth quarter 2009 of $9,445,000 or $0.10 per share compared to net loss of $214,987,000, or $2.33 per share for the fourth quarter of 2008. At December 31, 2009, the Company had total assets of $183,130,000 against total current liabilities of $119,913,000 and other debt of $22,473,000, resulting in stockholders' equity of $40,744,000. A full-text copy of the Company's annual report is available at no charge at http://ResearchArchives.com/t/s?607b A full-text copy of the Company's earnings release is available at no charge at http://ResearchArchives.com/t/s?607c In its April 15, 2010 report, BDO Seidman, LLP in Houston, Texas, said at December 31, 2009, the Company was in violation of certain debt covenants resulting in the default on its revolving credit and other debt agreements, which raise substantial doubt about the Company's ability to continue as a going concern. About Meridian Resource Based in Houston, Texas, The Meridian Resource Corporation (NYSE:TMR) -- http://www.tmrc.com/-- is an independent oil and natural gas company engaged in the exploration, exploitation, acquisition and development of oil and natural gas in Louisiana, Texas, and the Gulf of Mexico. Meridian has access to an extensive inventory of seismic data and, among independent producers, is a leader in using 3-D seismic and other technologies to analyze prospects, define risk, target and complete high- potential wells for exploration and development. Meridian has a field office in Weeks Island, Louisiana. METALS USA: Registers 5 Million Shares Under Incentive Plans ------------------------------------------------------------ Metals USA Holdings Corp. filed with the Securities and Exchange Commission a Form S-8 Registration Statement under the Securities Act of 1933 to register: -- 2,614,650 shares of common stock issuable under the Company's 2010 Long-Term Incentive Plan; and -- 2,440,340 shares of common stock issuable under the Company's Amended and Restated 2005 Stock Incentive Plan A full-text copy of the Company's registration statement is available at no charge at http://ResearchArchives.com/t/s?602c About Metals USA Based in Houston, Texas, Metals USA Holdings Corp. -- http://www.metalsusa.com/-- provides a wide range of products and services in the heavy carbon steel, flat-rolled steel, non-ferrous metals, and building products markets. Metals USA reported $627.8 million in total assets and $671.5 million in total liabilities, resulting to a stockholders' deficit of $43.7 million as of December 31, 2009. * * * As reported by the Troubled Company Reporter on April 14, 2010, Moody's Investors Service upgraded its ratings for Metals USA Holdings and assigned a stable rating outlook to the North American metal distributor. MUSA Holdings' corporate family rating was raised to B2 from B3 and the rating on the 11.125% notes issued by its subsidiary Metals USA Inc. was raised to B3 from Caa1. The TCR on April 13, 2010, said Standard & Poor's Ratings Services raised its ratings on Metals USA Holdings and its wholly owned subsidiary, Metals USA Inc., to 'B-' from 'CCC+'. METALS USA: To Redeem Senior Floating Rate Toggle Notes Due 2012 ---------------------------------------------------------------- Metals USA Holdings Corp. on April 14, 2010, called for redemption all of its outstanding Senior Floating Rate Toggle Notes due 2012, representing an aggregate principal amount of approximately $169.6 million. The redemption price of the Notes is 100% of the outstanding aggregate principal amount, plus accrued and unpaid interest thereon to but not including May 14, 2010. The 2007 Notes will be redeemed on the Redemption Date. The 2007 Notes were issued and the redemption will be effected pursuant to the provisions of the Indenture, dated as of July 10, 2007, between Metals USA, as Issuer, and Wells Fargo Bank, N.A., as Trustee. None of the 2007 Notes will remain outstanding after the Redemption Date. Metals USA did not and will not incur any early termination penalties in connection with the redemption of the 2007 Notes. Metals USA will use the net proceeds of the initial public offering of its common stock to finance the redemption. Metals USA anticipates that the aggregate cash payment for the redemption, including accrued and unpaid interest, will be approximately $171 million. On April 14, 2010, Metals USA consummated the initial public offering of its common stock, par value $0.01 per share. Metals USA on April 8, 2010, held the initial public offering of 11,426,315 shares of its common stock, at $21.00 per share. The underwriters were granted a 30-day option to purchase up to 1,713,947 additional common shares on a pro rata basis from the selling stockholders at the initial public offering price. Goldman, Sachs & Co., Credit Suisse Securities (USA) LLC, J.P. Morgan Securities Inc. and Morgan Stanley & Co. were the bookrunning managers of the offering. About Metals USA Based in Houston, Texas, Metals USA Holdings Corp. -- http://www.metalsusa.com/-- provides a wide range of products and services in the heavy carbon steel, flat-rolled steel, non-ferrous metals, and building products markets. Metals USA reported $627.8 million in total assets and $671.5 million in total liabilities, resulting to a stockholders' deficit of $43.7 million as of December 31, 2009. * * * As reported by the Troubled Company Reporter on April 14, 2010, Moody's Investors Service upgraded its ratings for Metals USA Holdings and assigned a stable rating outlook to the North American metal distributor. MUSA Holdings' corporate family rating was raised to B2 from B3 and the rating on the 11.125% notes issued by its subsidiary Metals USA Inc. was raised to B3 from Caa1. The TCR on April 13, 2010, said Standard & Poor's Ratings Services raised its ratings on Metals USA Holdings and its wholly owned subsidiary, Metals USA Inc., to 'B-' from 'CCC+'. MID VALLEY: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------- Debtor: Mid Valley Construction, Inc. 218 SW 19th Ave. Ontario, OR 97914 Bankruptcy Case No.: 10-01100 Chapter 11 Petition Date: April 20, 2010 Court: United States Bankruptcy Court District of Idaho (Boise) Debtor's Counsel: Kelly I Beeman, Esq. 708 1/2 W Franklin Boise, ID 83702 Tel: (208) 345-3045 E-mail: jerri@beemangroup.org Scheduled Assets: $750,182 Scheduled Debts: $2,681,876 A list of the Company's 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/idb10-01100.pdf The petition was signed by Tyler B. Frazier, president. MIRAMAX FILMS: Mark Cuban Is No Keen on Weinstein Deal ------------------------------------------------------ Bloomberg News' Brett Pulley in New York reports that Mark Cuban, the billionaire owner of the National Basketball Association's Dallas Mavericks team, said he wasn't sure if he would support a Weinstein Co. deal to acquire Miramax Films. "I am having some issues with the Weinstein Co. right now," Mr. Cuban said in an e-mail, without providing details, according to Bloomberg. "Bob and Harvey have historically worked with our companies to resolve these issues. I'm hoping the same applies here. If not, my position will certainly change." "I haven't made up my mind yet and have my lawyers pulling together all the information," Bloomberg quoted Mr. Cuban as saying. "We have some disputes. So while I'm optimistic we can get them settled, we may have to interject ourselves in the deal legally." As reported by The Troubled Company Reporter on April 22, 2010, The Wall Street Journal's Ethan Smith and Lauren A.E. Schuker, citing people familiar with the matter, said Weinstein over the weekend moved closer to acquiring Miramax from The Walt Disney Co. According to the TCR, sources told the Journal that lawyers for both sides worked through the weekend to try to finalize a deal. The Journal said the Weinsteins have offered roughly $600 million for Miramax. According to the Journal, the Weinstein bid is backed in large part by Los Angeles billionaire Ron Burkle, founder of Yucaipa Cos. Bloomberg reports that two people with knowledge of the talks said Weinsteins and Yucaipa are close to acquiring Miramax for $625 million. Bloomberg relates that, according to Dani Weinstein, a company spokeswoman, the dispute involves the 2009 release "The Road," which did not do well in ticket sales. Bloomberg says that, according to researcher Box Office Mojo, the film -- produced for $25 million -- took in $23.9 million in worldwide ticket sales. According to Bloomberg, Mr. Weinstein said in an e-mail, "Our board is completely up to speed and supportive with regards to our conversations concerning Miramax." Bloomberg also notes that Richard Koenigsberg, a director at Weinstein Co., said in an e-mailed statement the disagreement with Mr. Cuban is over the number of theaters that showed "The Road." According to Bloomberg, Mr. Koenigsberg said Weinstein Co.'s board backs the efforts with Mr. Burkle on Miramax. Bloomberg also reports that one source said Alec Gores and Tom Gores, billionaires who each run Los Angeles-based private equity companies, have raised their bid above the $550 million originally offered. They are being advised by their brother Sam Gores, owner of Paradigm Talent Agency in Beverly Hills, California, Bloomberg says. Bloomberg also relates that Hollywood film producer David Bergstein has also offered about $650 million, according to two people with knowledge of the bid. Mr. Bergstein is advising a "well-capitalized offshore entity" on a Miramax bid, his Pangea Media Group said April 8, Bloomberg relates. 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. MORTGAGE GUARANTY: Moody's Affirms 'Ba3' Insurance Strength Rating ------------------------------------------------------------------ Moody's Investors Service has affirmed the Ba3 insurance financial strength rating of Mortgage Guaranty Insurance Corp and MGIC Indemnity Corporation and changed their outlook to positive from negative. Moody's has also placed the debt ratings of the holding company, MGIC Investment Corporation, under review for possible upgrade. The rating action was prompted by MGIC Investment Corporation's announced public offering of $700 million of equity and $300 million of convertible senior notes due 2017. The proceeds of the offering have been slated for general corporate purposes including the repayment of $78.4 million of senior notes due in 2011, improving holding company liquidity and enhancing MGIC's capital and business profile, said Moody's. MGIC announced that the transaction priced. Moody's added that the positive ratings outlook on the insurance companies reflect the group's improving financial and business profile as a result of the announced equity and debt issuance. The improved liquidity and capital adequacy profile of the group should help MGIC strengthen its market position and benefit from attractive new mortgage insurance production. MGIC's recent market share and new business volume decline reflected the loss of a major customer, the encroachment of the FHA as a competitor, and a focus on capital preservation. MGIC's 1Q2010 results showed some evidence that delinquency trends continue to improve as both new delinquency notices and delinquent inventory declined. These trends are broadly consistent with Moody's February 2010 estimate of $11.3 billion in future claims which incorporated recent observations that new delinquencies may have peaked. Despite these positives, the relatively weak capital adequacy profile of the firm and prolonged uncertainty regarding the medium term prospects for mortgage insurance continues to weigh heavily on the company's overall credit profile. The review of the holding company's ratings for possible upgrade reflects its substantially improved liquidity and the elimination of near term refinancing risks. Moody's anticipates that a sizeable portion of the proceeds of the offerings will be retained at the holding company to meet debt service obligations and other liquidity needs while the insurance companies remain unable to upstream dividends. The rating review will focus on the firm's planned use of the proceeds and resulting holding company resources. Strong holding company liquidity could warrant a three notch differential between the holding company and insurance company ratings, as opposed to the traditional four notch difference for below investment grade insurance companies. This transaction has also been a barometer of the company's financial flexibility and its ability to successfully access the public markets, said the rating agency. List Of Rating Actions These ratings have been affirmed with a positive outlook: * Mortgage Guaranty Insurance Corp -- Ba3 insurance financial strength; and * MGIC Indemnity Corporation -- Ba3 insurance financial strength. These ratings were place under review for possible upgrade: * MGIC Investment Corporation -- senior unsecured debt at Caa1, junior subordinated debt at Ca, and the provisional rating on senior unsecured debt at (P)Caa1. The last rating action on Mortgage Guaranty Insurance Corporation occurred on February 4, 2010, when MGIC's ratings were downgraded, with a negative outlook. MGIC Investment Corporation, headquartered in Milwaukee, Wisconsin, is the holding company for Mortgage Guaranty Insurance Company, one of the largest US mortgage insurers with $207 billion of primary insurance in force at March 31, 2010. MPM TECHNOLOGIES: Reports $1,563,759 Net Loss for 2009 ------------------------------------------------------ MPM Technologies, Inc., filed with the Securities and Exchange Commission its annual report on Form 10-K for the fiscal year ended December 31, 2009. The Company reported a net loss of $1,563,759 for 2009 from a net loss of $1,717,511 for 2008. Total revenues were $558,444 for 2009 from $567,343 for 2008. As of December 31, 2009, the Company had total assets of $1,224,484 against total liabilities, all current, of $14,468,674, resulting in stockholders' deficit of $13,244,190. In its April 15, 2010 report, Rosenberg Rich Baker Berman & Company in Somerset, New Jersey, noted that the Company has not been able to generate any significant revenues and has a working capital deficiency of $14,453,054 at December 31, 2009. These conditions raise substantial doubt about the Company's ability to continue as a going concern without the raising of additional debt or equity financing to fund operations. A full-text copy of the Company's annual report is available at no charge at http://ResearchArchives.com/t/s?6089 About MPM Technologies Headquartered in Parsippany, N.J., MPM Technologies Inc. (OTC BB: MPML) -- http://www.mpmtech.com/-- operates through its three wholly owned subsidiaries: AirPol Inc., NuPower Inc. and MPM Mining Inc. During the year ended Dec. 31, 2007, AirPol was the only revenue generating entity. AirPol operates in the air pollution control industry. It sells air pollution control systems to companies in the United States and worldwide. The company through its wholly owned subsidiary NuPower is engaged in the development and commercialization of a waste-to-energy process known as Skygas. These efforts are through NuPower's participation in NuPower Partnership, in which MPM has a 58.21% partnership interest. NuPower Partnership owns 85% of the Skygas Venture. In addition to its partnership interest through NuPower Inc., MPM also owns 15% of the Venture. NATIONAL COAL: Completes Sale of Assets --------------------------------------- National Coal Corp. has finalized its agreement to sell a portion of its assets located on the New River Tract in Eastern Tennessee for $11.8 million to Ranger Energy Investments, LLC, a company controlled by Jim Justice. National Coal received a portion of the purchase price in cash and the buyer assumed approximately $6.6 million of accounts payable the Company owed to an affiliate of Ranger Energy. In addition, Ranger Energy leased a portion of the Company's coal reserves located on the New River Tract. The Company also received from Ranger Energy the return of approximately $1.9 million in cash that was previously pledged to secure reclamation bonds and other liabilities associated with the New River Tract operation. The assets sold include the Baldwin preparation plant, the active underground mine number 5A, coal inventories located on the property, and the idled surface mine number 3, along with the associated permits and certain liabilities. Additionally, the coal mineral rights on approximately 22,000 acres were leased to Ranger Energy for a royalty, which ranges from 6% to 8% of applicable revenues. Prior to the closing of the asset sale, Ranger Energy purchased from Centaurus Energy Master Fund, LP $30.3 million of the Company's 10.5% senior secured notes due 2010 and the Company's $5 million short-term revolving credit facility, of which $4.5 million had been drawn. "The Company used the majority of the proceeds from this transaction for payment on our outstanding accounts payable and equipment debt, and to pay the $4.5 million outstanding balance owed on the short-term credit facility," said Daniel A. Roling, President and CEO. "In so doing, the Company returned accounts payable to a more current status and terminated the short-term credit facility. These actions cured our default under the credit facility. "We will continue to focus on ways to reduce our expenses and outstanding debt. In addition, we will continue to pursue strategic transactions that will enable us to repay our $42 million in public debt which matures in December 2010," continued Mr. Roling. National Coal's continuing operations in Tennessee include the coal mineral and mining rights to approximately 57,000 acres of land, along with mining complexes that include one active underground mine and one active surface mine. In addition, National Coal continues to own and operate one preparation plant and one unit train loading facility served by the Norfolk Southern Railroad. About National Coal Corp. Headquartered in Knoxville, Tenn., National Coal Corp. -- http://www.nationalcoal.com-- through its wholly owned subsidiary, National Coal Corporation, is engaged in coal mining in East Tennessee. Currently, National Coal employs about 220 people. National Coal sells steam coal to electric utilities and industrial companies in the Southeastern United States. NEW CENTURY COS: Reports $14,920,862 Net Loss for 2009 ------------------------------------------------------ New Century Companies, Inc., filed with the Securities and Exchange Commission its annual report on Form 10-K for the fiscal year ended December 31, 2009. The Company reported a net loss of $14,920,862 for 2009 from net income of $2,181,392 for 2008. Contract revenues were $3,726,431 for 2009 from $4,822,026 for 2008. At December 31, 2009, the Company had total assets of $5,443,348 against total liabilities, all current, of $10,167,691, resulting in stockholders' deficit of $4,724,343. As of December 31, 2009, the Company has an operating loss of $2,441,821, an accumulated deficit of $26,839,000, working capital deficit of $9,491,000 and had events of default on its debt with CAMOFI Master LDC and CAMHZN Master LDC. In its April 15, 2010 report, KMJ Corbin & Company LLP in Costa Mesa, California, raised substantial doubt about the Company's ability to continue as a going concern. The Company intends to fund operations through anticipated increased sales which management believes may be insufficient to fund its capital expenditures, working capital and other cash requirements for the year ending December 31, 2009. Therefore, the Company will be required to seek additional funds to finance its long-term operations in the form of debt and equity financing which the Company believes is available to it. The successful outcome of future activities cannot be determined at this time and there is no assurance that if achieved, the Company will have sufficient funds to execute its intended business plan or generate positive operating results. A full-text copy of the Company's annual report on Form 10-K is available at no charge at http://ResearchArchives.com/t/s?6085 A full-text copy of the Company's earnings release is available at no charge at http://ResearchArchives.com/t/s?6086 Outlook and Business Strategy Although there are near-term market uncertainties, the long-term outlook for the aircraft industry is positive due to the fundamental drivers of air travel growth. Based on long-term global economic growth projections, and factoring in increased utilization of the worldwide airplane fleet and requirements to replace older airplanes, a $3.2 trillion market for 29,000 new airplanes is projected over the next 20 years. Because many of the Company's machines and parts are ultimately used for the U.S. Military, the national defense budget and procurement funding decisions drive demand for business. The U.S. Department of Defense budget has been increasing over the past few years, and government spending requirements for procurement, operations and maintenance for 2010 and beyond will continue to be affected by the global war on terrorism and the related fiscal consequences of war. "The Company's business strategy is to develop and maintain positions of technical leadership in the aerospace and defense markets, to grow the amount of content and volume of product sold to those markets, and to selectively acquire businesses with similar technical capabilities," said President Michael Cabral. "There is unmet demand and a backlog of orders for many suppliers within the aerospace and defense industries, which we believe represents a substantial opportunity for growth." About New Century Cos. New Century Companies, Inc. -- http://www.USAerospace.com/-- is a publicly traded aerospace company based in Southern California. The Company is an emerging world class supplier of aircraft assemblies, structural components, and highly engineered, precision machined details for the United States Department of Defense, United States Air Force, Lockheed Martin Corporation (NYSE: LMT), The Boeing Company (NYSE: BA), L-3 Communications Holdings, Inc. (NYSE: LLL), the Middle River Aircraft Systems subsidiary of General Electric Company (NYSE: GE), and other aircraft manufacturers and defense contractors. The Company is also a leading manufacturer and remanufacturer of specialized aircraft machining tools, including vertical boring mills and large Vertical Turning Centers used to manufacture the largest jet engines, airplane landing gear and other precision components. The Company has offices and production facilities in Santa Fe Springs and Rancho Cucamonga, California. NEW ENERGY SYSTEMS: Reports $5,837,395 Net Income for 2009 ---------------------------------------------------------- New Energy Systems Group has filed with the Securities and Exchange Commission its annual report on Form 10-K for the fiscal year ended December 31, 2009. The Company reported net income of $5,837,395 for 2009 from net income of $4,451,072 for 2008. Revenues were $26,375,890 for 2009 from $19,716,408 for 2008. As of December 31, 2009, the Company had total assets of $53,380,185 against total Liabilities of $13,386,862, resulting in stockholders' equity of $39,993,323. A full-text copy of the Company's annual report is available at no charge at http://ResearchArchives.com/t/s?607d A full-text copy of the Company's conference call transcript is available at no charge at http://ResearchArchives.com/t/s?607e In its quarterly report on Form 10-Q, the Company said it believes it has sufficient cash to continue its current business through September 30, 2010, due to expected increased sales revenue and net income from operations. "However we have suffered recurring losses in the past and have a large accumulated deficit. These conditions raise substantial doubt about the Company's ability to continue as a going concern," the Company said. The Company has taken certain restructuring steps to provide the necessary capital to continue its operations. These steps included 1) acquire profitable operations through issuance of equity instruments, and 2) to continue actively seeking additional funding and restructure the acquired subsidiaries to increase profits and minimize the liabilities. The April 9, 2010 report of Goldman Parks Kurland Mohidin LLP in Encino, California, the Company's independent auditor, does not include a negative going concern opinion about the Company. About New Energy Systems Group With offices in New York and Shenzhen, China, New Energy Systems Group (OTCBB: NEWN) -- http://www.chinadigitalcommunication.com/ -- manufactures and distributes lithium ion batteries. The company assembles and distributes finished batteries through its sales network and channel partners. The company also sells high- quality lithium-ion battery shell and cap products to major lithium-ion battery cell manufacturers in China. The company's products are used to power mobile phones, MP3 players, laptops, digital cameras, PDAs, camera recorders and other consumer electronic digital devices. This concludes the Troubled Company Reporter's coverage of New Energy Systems until facts and circumstances, if any, emerge that demonstrate financial or operational strain or difficulty at a level sufficient to warrant renewed coverage. NEXTSAR BROADCASTING: Gets Requisite Consent to Solicit PIK NOTE ---------------------------------------------------------------- Nexstar Broadcasting Group Inc. said that its subsidiary Nexstar Broadcasting Inc. has received, pursuant to its cash tender offer and consent solicitation for any and all of the outstanding 13% Senior Subordinated Payment-In-Kind Notes due 2014, the requisite consents to adopt proposed amendments to the indenture, as supplemented, under which the Notes were issued that would, among other things, eliminate substantially all restrictive covenants and certain event of default provisions. Nexstar Broadcasting announced that consents had been delivered with respect to $34,337,174 million of the Notes , which Notes had been validly tendered and not validly withdrawn as of 5:00 p.m., New York City time, on April 16, 2010. In conjunction with receiving the requisite consents, Nexstar Broadcasting and The Bank of New York Mellon, as trustee, executed a second supplemental indenture with respect to the indenture, as supplemented, under which the Notes were issued effecting certain amendments that would, among other things, eliminate substantially all restrictive covenants and certain event of default provisions. The second supplemental indenture will not became operative upon acceptance of the Notes for purchase by Nexstar Broadcasting pursuant to the terms and conditions described in the Statement. The tender offer and consent solicitation are being made upon the terms and subject to the conditions set forth in the related Offer to Purchase and Consent Solicitation Statement dated April 5, 2010. Holders who validly tendered their Notes and delivered their consents on or prior to the Consent Payment Deadline are eligible to receive the applicable Total Consideration. A Holder's right to validly withdraw tendered Notes and validly revoke delivered consents expired on the Consent Payment Deadline. Nexstar Broadcasting's obligation to accept for purchase and to pay for the Notes validly tendered and not validly withdrawn and consents validly delivered, and not validly revoked, pursuant to the tender offer and consent solicitation, was subject to and conditioned upon the satisfaction of or, where applicable, Nexstar Broadcasting's waiver of, certain conditions, including: a) the execution by Nexstar Broadcasting and the trustee of the second supplemental indenture implementing the amendments following receipt of the requisite consents; b) consummation of the refinancing of the existing senior secured credit facility of Nexstar Broadcasting and consummation of the proposed offering of senior secured second lien notes due 2017 to be issued by Nexstar Broadcasting and Mission Broadcasting, Inc. on terms satisfactory to Nexstar Broadcasting; and c) satisfaction of the other conditions set forth in the Statement. As of April 19, 2010, each of these conditions has been satisfied and the Notes validly tendered and not validly withdrawn as of the Consent Payment Deadline were accepted for purchase by Nexstar Broadcasting. Holders who validly tendered their Notes on or prior to the Consent Payment Deadline received total consideration equal to $1,045.00 per $1,000 principal amount of the Notes, plus any accrued and unpaid interest on the Notes up to, but not including, the first settlement date. The Total Consideration includes a consent payment of $30.00 per $1,000 principal amount of the Notes. Holders who validly tender their Notes after the Consent Payment Deadline, but on or prior to Midnight, New York City time, on April 30, 2010, unless extended or earlier terminated by Nexstar Broadcasting, and whose Notes are accepted for payment, will receive the tender consideration equal to $1,015.00 per $1,000 principal amount of the Notes, plus any accrued and unpaid interest on the Notes up to, but not including, the final settlement date. Holders of Notes who tender after the Consent Payment Deadline will not receive a Consent Payment. Any Notes not tendered and purchased pursuant to the tender offer will remain outstanding and the holders thereof will be bound by the amendments contained in the second supplemental indenture eliminating substantially all restrictive covenants and certain event of default provisions in the indenture even though they have not consented to the amendments. About Nexstar Broadcasting Group Irving, Texas-based Nexstar Broadcasting Group Inc. currently owns, operates, programs or provides sales and other services to 62 television stations in 34 markets in the states of Illinois, Indiana, Maryland, Missouri, Montana, Texas, Pennsylvania, Louisiana, Arkansas, Alabama, New York, Rhode Island, Utah and Florida. N exstar's television station group includes affiliates of NBC, CBS, ABC, FOX, MyNetworkTV and The CW and reaches approximately 13 million viewers or approximately 11.5% of all U.S. television households. Nexstar Broadcasting Group's balance sheet for December 31, 2009, showed $619.8 million in total assets and $796.0 million in total liabilities, resulting in a $176.2 million stockholders' deficit. * * * According to the Troubled Company Reporter on April 8, 2010, Standard & Poor's Ratings Services affirmed its ratings on Nexstar Broadcasting Group Inc., including the 'B-' corporate credit rating. The rating outlook is positive. NEXTMEDIA OPERATING: Moody's Puts 'B3' Corporate Family Rating -------------------------------------------------------------- Moody's Investors Service assigned a B3 Corporate Family Rating and a B3 Probability of Default Rating to NextMedia Operating, Inc., as well as a Ba3 rating to its proposed $10 million revolving credit facility and a B3 rating to its proposed $135 million second lien term loan. NextMedia plans to use net proceeds from the credit facilities combined with cash from its new equity sponsors to settle existing claims from its December 2009 bankruptcy filing. The rating outlook is stable. Moody's assigned these ratings: NextMedia Operating, Inc. -- Corporate Family Rating, Assigned B3 -- Probability of Default Rating, Assigned B3 -- $10 million First Out Senior Secured Revolving Credit Facility due 2015, Assigned Ba3, LGD1, 1% -- $135 million Senior Secured Term Loan B due 2016, Assigned B3, LGD4, 52% -- Outlook, Stable NextMedia's B3 CFR incorporates its high leverage (approximately 5.8 times debt-to-EBITDA based on LTM 12/31/09 results and the proposed debt structure), which poses challenges for managing a business vulnerable to advertising spending cycles. The small size (annual revenue approximately $75 million) also constrains the rating. Strong margins, expectations for positive free cash flow, and leading positions in most markets support the rating. Both radio and outdoor advertising face fragmentation risk as advertisers diversify their spending across increasing media options, although outdoor advertising offers better long term growth prospects than radio, in Moody's opinion. Moody's anticipates low single digit consolidated revenue growth for NextMedia in 2010, with modest growth in radio advertising but a lag in outdoor as some recessionary contracts set at lower prices expire. The stable outlook assumes that NextMedia maintains leverage below 6.5 times debt-to-EBITDA and generates positive free cash flow, and that the proposed facility provides good liquidity with adequate cushion under all financial covenants. NextMedia Operating, Inc., owns and operates radio stations in 10 mid-sized and suburban markets and outdoor displays in 5 markets. NICHOLAS WOLFF: Voluntary Chapter 11 Case Summary ------------------------------------------------- Joint Debtors: Nicholas Wolff aka Nick Wolff Nicholas R. Wolff Nicholas Richard Wolff Aileen Wolff 62 Hillair Circle White Plains, NY 10605 Bankruptcy Case No.: 10-22750 Chapter 11 Petition Date: April 20, 2010 Court: U.S. Bankruptcy Court Southern District of New York (White Plains) Judge: Robert D. Drain Debtor's Counsel: Lawrence R. Reich, Esq. Reich Reich & Reich, P.C. 235 Main Street, Suite 450 White Plains, NY 10601 Tel: (914) 949-2126 Fax: (914) 949-1604 E-mail: reichlaw@aol.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Joint Debtors did not file a list of creditors together with its petition. The petition was signed by the Joint Debtors. NORTEL NETWORKS: Ericsson Buying 50% Interest in Korea JV --------------------------------------------------------- Nortel Networks Corporation [OTC: NRTLQ] said its principal operating subsidiary Nortel Networks Limited has entered into a share purchase agreement with Telefonaktiebolaget LM Ericsson (Publ) for the sale of its 50% plus 1 share interest in LG-Nortel Co. Ltd., the company's Korean joint venture with LG Electronics Inc., for a purchase price of US$242 million in cash subject to certain purchase price adjustments. "Today's announcement is a positive step forward in securing a sound future for the LG-Nortel business and its valued customers," said Paul House, Chairman and General Manager, LG-Nortel, in an April 20 statement. "Credit is due to the employees of LG-Nortel who have built this Joint Venture into a world class, profitable business." The Agreement is subject to approval of the Ontario Superior Court of Justice as well as satisfaction of customary regulatory and other conditions. Nortel does not expect that the Company's common shareholders or the NNL preferred shareholders will receive any value from the creditor protection proceedings and expects that the proceedings will result in the cancellation of these equity interests. Ericsson previously bought Nortel's primary wireless carrier business for $1.13 billion. It was also part of a group that made the $103 million high bid for Nortel's so-called GSM business. About LG-Nortel LG-Nortel -- http://www.lg-nortel.com/-- is a joint venture of LG Electronics and Nortel. Established in 2005, LG-Nortel provides leading edge telecommunications equipment and network solutions, spanning wired and wireless technologies to service provider and enterprise customers in Korea and around the world. LG-Nortel is also actively developing next generation solutions for global markets, with over 750 skilled R&D engineers currently focused on wireless broadband technology evolution and the development of powerful new product lines. About Nortel Networks Nortel Networks (OTCBB:NRTLQ) -- http://www.nortel.com/-- delivers communications capabilities. The Company's next- generation technologies, for both service provider and enterprise networks, support multimedia and business-critical applications. Nortel's technologies are designed to help eliminate the barriers to efficiency, speed and performance by simplifying networks and connecting people to the information they need, when they need it. Nortel Networks Corp., Nortel Networks Inc., and other affiliated corporations in Canada sought insolvency protection under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice (Commercial List). Ernst & Young was appointed to serve as monitor and foreign representative of the Canadian Nortel Group. The Monitor sought recognition of the CCAA Proceedings in the U.S. by filing a bankruptcy petition under Chapter 15 of the U.S. Bankruptcy Code (Bankr. D. Del. Case No. 09-10164). Mary Caloway, Esq., and Peter James Duhig, Esq., at Buchanan Ingersoll & Rooney PC, in Wilmington, Delaware, serves as the Chapter 15 petitioner's counsel. Nortel Networks Inc. and 14 affiliates filed separate Chapter 11 petitions on January 14, 2009 (Bankr. D. Del. Case No. 09-10138). Judge Kevin Gross presides over the case. James L. Bromley, Esq., at Cleary Gottlieb Steen & Hamilton, LLP, in New York, serves as general bankruptcy counsel; Derek C. Abbott, Esq., at Morris Nichols Arsht & Tunnell LLP, in Wilmington, serves as Delaware counsel. The Chapter 11 Debtors' other professionals are Lazard Freres & Co. LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims and notice agent. Certain of Nortel's European subsidiaries also made consequential filings for creditor protection. The Nortel Companies related in a press release that Nortel Networks UK Limited and certain subsidiaries of the Nortel group incorporated in the EMEA region have each obtained an administration order from the English High Court of Justice under the Insolvency Act 1986. The applications were made by the EMEA Subsidiaries under the provisions of the European Union's Council Regulation (EC) No. 1346/2000 on Insolvency Proceedings and on the basis that each EMEA Subsidiary's centre of main interests is in England. Under the terms of the orders, representatives of Ernst & Young LLP have been appointed as administrators of each of the EMEA Companies and will continue to manage the EMEA Companies and operate their businesses under the jurisdiction of the English Court and in accordance with the applicable provisions of the Insolvency Act. Several entities, particularly, Nortel Government Solutions Incorporated have material operations and are not part of the bankruptcy proceedings. As of September 30, 2008, Nortel Networks Corp. reported consolidated assets of US$11.6 billion and consolidated liabilities of US$11.8 billion. The Nortel Companies' U.S. businesses are primarily conducted through Nortel Networks Inc., which is the parent of majority of the U.S. Nortel Companies. As of September 30, 2008, NNI had assets of about US$9 billion and liabilities of US$3.2 billion, which do not include NNI's guarantee of some or all of the Nortel Companies' about US$4.2 billion of unsecured public debt. Bankruptcy Creditors' Service, Inc., publishes Nortel Networks Bankruptcy News. The newsletter tracks the Chapter 11 proceeding and ancillary foreign proceedings undertaken by Nortel Networks Corp. and its various affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000) NUTCREA: Completes Sale of Natural Glo, Satin Finish ---------------------------------------------------- NutraCea completed the previously disclosed sale of NutraCea's rights to Natural Glo, Satin Finish, and Max-E-Glo equine brands and trademarks, related goodwill and intellectual property along with certain bags, packaging materials and bagged inventory to Manna Pro Products, LLC (Manna Pro) for a total consideration of $753,484. NutraCea determined that it would record in the fourth quarter of 2009 approximately $1.6 million in non-cash charges of impairment related to the trademark assets. NutraCea does not expect to be required to make any future cash expenditures as a result of this impairment. At the closing, Manna Pro and NutraCea entered into an exclusive supply agreement under which NutraCea will be the exclusive supplier of SRB to Manna Pro for the product lines associated with the purchased assets. All products sold by Manna Pro under the trademarks being purchased will be co-branded with a NutraCea SRB logo. W. John Short, Chairman and CEO, commented, "We believe the sale of these equine brands to Manna Pro and our exclusive, co-branded supply arrangement is a win-win for both of our companies. Manna Pro's larger sales force and distribution organization has the ability to increase sales for these brands, which should result in increased bulk sales of SRB for NutraCea. We look forward to working closely with the Manna Pro team to support the growth of these brands." On November 10, 2009 NutraCea filed for court supervised protection to restructure its operation under Chapter 11 of the US Bankruptcy Code. About NutraCea NutraCea is a world leader in production and utilization of stabilized rice bran. NutraCea holds many patents for stabilized rice bran (SRB) production technology and proprietary products derived from SRB. NutraCea's proprietary technology enables the creation of food and nutrition products to be unlocked from rice bran, normally a waste by-product of standard rice processing. Phoenix, Arizona-based Nutracea, a California corporation, filed for Chapter 11 bankruptcy protection on November 10, 2009 (Bankr. D. Ariz. Case No. 09-28817). S. Cary Forrester, Esq., at Forrester & Worth, PLLC, assists the Company in its restructuring effort. The Company listed $50,000,001 to $100,000,000 in assets and $10,000,001 to $50,000,000 in liabilities. ORLEANS HOMEBUILDERS: Has $120 Million DIP Credit Facility ---------------------------------------------------------- Orleans Homebuilders, Inc., has executed a $120 million debtor-in- possession credit facility which will provide a $40 million revolving line of credit, including up to $25 million of cash funding and up to $15 million of letters of credit capacity. The Company intends to use the proceeds of the financing for, among other things, its ordinary course business expenses, including housing restarts and closings. The remaining $80 million of the DIP Credit Facility represents a roll up of a portion of the pre- petition credit agreement debt of certain of the pre-petition lenders. Regarding the approval and closing of the DIP Facility, Mitchell B. Arden, a Managing Director and Shareholder of Phoenix Management who has been serving as Orleans' Chief Restructuring Officer since March 4, 2010, stated: "I am very pleased that we have reached this pivotal event in the tenancy of Orleans' bankruptcy process and would like to thank all of the Company's employees, attorney's, advisors, and lenders who participated in the process of closing this final DIP facility. This new financing provides Orleans with the ability to move forward with its housing restarts and home closings and enables us to serve the Company's contractors, vendors, customers, and employees during this critical time." The Company and most of its operating subsidiaries filed voluntary petitions to commence the Chapter 11 process on March 1 in the U.S. Bankruptcy Court for the District of Delaware in Wilmington. The filing does not include certain of the Company's subsidiaries, including its mortgage services subsidiary, Alambry Funding, Inc., which provides mortgage brokerage services for customers and financial institutions but which does not underwrite any customer mortgages. All of the debtors in the Chapter 11 proceedings are borrowers under the DIP Credit Facility. As security for the DIP Credit Facility, the borrowers provided the lenders a security interest in all of their assets, with a few minor exceptions. The debtors' execution and delivery of the DIP Credit Facility was approved by the Bankruptcy Court on April 16, 2010. About Orleans Homebuilders Orleans Homebuilders, Inc. -- aka FPA Corporation, OHB, Parker & Lancaster, Masterpiece Homes, Realen Homes and Orleans -- develops, builds and markets high-quality single-family homes, townhouses and condominiums. From its headquarters in suburban Philadelphia, the Company serves a broad customer base including first-time, move-up, luxury, empty-nester and active adult homebuyers. The Company currently operates in these 11 distinct markets: Southeastern Pennsylvania; Central and Southern New Jersey; Orange County, New York; Charlotte, Raleigh and Greensboro, North Carolina; Richmond and Tidewater, Virginia; Chicago, Illinois; and Orlando, Florida. The Company's Charlotte, North Carolina operations also include adjacent counties in South Carolina. Orleans Homebuilders employs approximately 300 people. The Company filed for Chapter 11 bankruptcy protection on March 1, 2010 (Bankr. D. Delaware Case No. 10-10684). Cahill Gordon & Reindell LLP is the Debtor's bankruptcy and restructuring counsel. Curtis S. Miller, Esq., and Robert J. Dehney, Esq., at Morris, Nichols, Arsht & Tunnell, are the Debtor's Delaware and restructuring counsel. Blank Rome LLP is the Debtor's special corporate counsel. Garden City Group Inc. is the Debtor's claims and notice agent. The Company estimated assets and debts at $100,000,001 to $500,000,000. PACIFIC DEVELOPMENT: U.S. Trustee Forms Creditors Committee ----------------------------------------------------------- Charles F. McVay, the U.S. Trustee for Region 19, appointed five members to the official committee of unsecured creditors in the Chapter 11 cases of Pacific Development, L.C. The Creditors Committee members are: 1. Cook Family Trust - chairman Attn: Paulette Cook Letz 675 East Center Street Bountiful, UT 84010 Tel: (801) 292-6595 E-mail: cook1718letz@yahoo.com 2. Mountain West Security, LLC Attn: Lucy Messenger 764 North 400 West Orem, UT 84057 Tel: (801) 226-6787 E-mail: lucy@mwsecure.com 3. Brent H. Rowbotham 551 South 880 West Orem, UT 84058 Tel: (801) 224-4415 E-mail: bhrowbo@yahoo.com 4. Helen Tamara Lavulo 668 East 100 North Bountiful, UT 84010 Tel: (801) 298-0219 Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at the Debtor's expense. They may investigate the Debtor's business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. Those committees will also attempt to negotiate the terms of a consensual Chapter 11 plan -- almost always subject to the terms of strict confidentiality agreements with the Debtors and other core parties-in-interest. If negotiations break down, the Committee may ask the Bankruptcy Court to replace management with an independent trustee. If the Committee concludes reorganization of the Debtor is impossible, the Committee will urge the Bankruptcy Court to convert the Chapter 11 cases to a liquidation proceeding. Provo, Utah-based Pacific Development, L.C. filed for Chapter 11 on March 10, 2010, (Bankr. D. Utah Case No. 10-22754.) Danny C. Kelly, Esq. at Stoel Rives LLP represents the Debtor in its restructuring effort. In its petition, the Debtor listed assets between $10,000,001 to $50,000,000 and debts between $1,000,001 to $10,000,000. PACIFIC ETHANOL: Issues 3,750,000 Shares to Socius -------------------------------------------------- The Superior Court of the State of California for the County of Los Angeles on April 13, 2010, entered an Order Approving Stipulation for Settlement of Claim in the matter entitled Socius CG II, Ltd. v. Pacific Ethanol, Inc. The Order provides for the full and final settlement of Socius GC II, Ltd.'s $4,000,000 claim against Pacific Ethanol. Socius purchased the Claim from Lyles United, LLC, a creditor of Pacific Ethanol, pursuant to the terms of a Purchase Agreement dated effective as of April 10, 2010 between Socius and Lyles United. The Claim consists of the right to receive $4,000,000 of principal amount of and under a loan made by Lyles United to Pacific Ethanol pursuant to the terms of an Amended and Restated Promissory Note dated November 7, 2008, in the original principal amount of $30,000,000. Pursuant to the terms of the Order, on April 14, 2010, Pacific Ethanol issued and delivered to Socius 3,750,000 shares of Pacific Ethanol common stock. The Settlement Shares represent approximately 5.67% of the total number of shares of Pacific Ethanol common stock outstanding immediately preceding the date of the Order. As of the date of the Socius-Lyles Purchase Agreement, Pacific Ethanol was indebted to Lyles United for unpaid principal amount of $20,000,000 under the Lyles United Note. In connection with the purchase of the Claim and pursuant to the terms of the Purchase Agreement, on April 12, 2010, Socius filed a complaint for damages against us with the Court. On April 13, 2010, Pacific Ethanol's counsel and counsel for Socius filed with the Court a joint ex parte application for court order approving stipulation for settlement of Claim. After holding a hearing, the Court issued the Order on April 13, 2010. About Pacific Ethanol Pacific Ethanol Holding Co. LLC and four affiliates filed for Chapter 11 on May 17, 2009 (Bankr. D. Del. Case No. 09-11713). Judge Kevin Gross handles the case. Attorneys at Cooley Godward Kronish LLP represent the Debtors as counsel. Attorneys at Potter Anderson & Corroon LLP are co-counsel. Epiq Bankruptcy Solutions LLC is the claims agent. Pacific Ethanol Holding disclosed $50 million to $100 million in assets and $100 million to $500 million in debts in its petition. Pacific Ethanol Inc. and its marketing subsidiaries, Kinergy Marketing LLC, and Pacific Ag. Products, LLC, have not filed for Chapter 11 bankruptcy protection. The Company is expected to continue to manage the Plant Subsidiaries under an Asset Management Agreement and Kinergy and PAP are expected to continue to market and sell the Plant Subsidiaries' ethanol and feed production under existing Marketing Agreements. PENSON WORLDWIDE: S&P Assigns 'BB' Counterparty Credit Rating ------------------------------------------------------------- Standard & Poor's Rating Services said that it assigned its 'BB' long-term counterparty credit rating to Penson Worldwide Inc. The outlook is stable. S&P also assigned its 'BB-' rating to the company's proposed $200 million senior second lien secured notes. "S&P's ratings on Penson reflect the company's strong franchise in providing clearing, execution, securities lending, and other processing services to the global securities industry. The ratings also consider Penson's minimal risk taking. Offsetting these strengths are the high operating leverage inherent in Penson's business model, increased financial leverage, and a risk management framework that S&P believes is not yet fully integrated," said Standard & Poor's credit analyst Vikas Jhaveri. Penson is an independent provider of clearing and other trade- related services for the securities industry. Unlike most of its clearing competitors, Penson is unaffiliated with a large financial institution, and thus does not compete with its clients. S&P believes this independence and its large product offering allow Penson to focus on its clients, and to develop stronger, stickier relationships and growth opportunities. Penson has little market risk, as it does not take on significant security positions for its own account. S&P considers credit risk in Penson's securities-lending business as modest, given its tight lending criteria and the very high quality of securities lent. Nevertheless, the company can become exposed to credit risk if there are unsecured positions that the company does not closely monitor. Since becoming a public company in 2006, Penson has enjoyed solid revenue and earnings growth. However, falling profitability during the past year has highlighted Penson's dependence on market volumes and interest rates. The low interest rates have limited the company's ability to earn spread income on client assets. Operating leverage is high as approximately 70% of its expenses are fixed. Nevertheless, S&P believes that Penson would seek to scale its cost base if a drop in market volumes contributed to a substantial decline in revenues. The stable outlook is based on S&P's opinion that Penson will continue to grow its business by achieving market share gains, without detriment to its operating performance, which S&P expects to remain stable in the short to medium term. Positive ratings momentum will depend on Penson's ability to post sustained growth in earnings, particularly in periods of slow market volumes and low interest rates. Conversely, significant additional debt leverage, a considerable decline in earnings, or a breakdown in risk-management policies and procedures would negatively pressure the ratings. PHEASANT RUN: Utilities Barred from Cutting Services ---------------------------------------------------- James K. Coachys of the U.S. Bankruptcy Court for the Southern District of Indiana, in an interim order, granted Pheasant Run Apartments, L.P.'s motion to prohibit utilities company from altering, refusing or discontinuing services to the Debtor. A final hearing on the motion was scheduled last April 8. Indianapolis, Indiana-based Pheasant Run Apartments, L.P., operates a 20-acre, 184-unit apartment complex. The Company filed for Chapter 11 bankruptcy protection on March 11, 2010 (Bankr. S.D. Ind. Case No. 10-03060). Scott N. Schreiber, Esq., at Stahl Cowen Crowley, LLC, assists the Company in its restructuring effort. According to the schedules, the Company has assets of $10,711,300, and total debts of $10,463,300. PHEASANT RUN: Taps Stahl Cowen to Handle Reorganization Case ------------------------------------------------------------ Pheasant Run Apartments, L.P., asks the U.S. Bankruptcy Court for the Southern District of Indiana for permission to employ Stahl Cowen Crowley, LLC as counsel. SCCA will, among other things: -- provide legal advice with respect to the Debtor's powers and duties as debtor-in-possession; -- prepare the Debtor's schedules, statement of financial affairs and related documents related to the proceeding; and -- prepare, on behalf of the Debtor, all necessary applications, motions, answers, orders, reports and other legal papers as required by applicable Bankruptcy and non Bankruptcy law, as directed by the demands of the case, or as required by the court, and represent the Debtor in any hearings or proceedings related thereto. Scott N. Schreiber, Esq., chairman of SCCA, tells the Court that prepetition, SCCA received a $25,000 retainer. As of the petition date, $14,196 of the retainer remained unapplied. The hourly rates of SCCA's personnel are: Mr. Schreiber $450 Shelly A. DeRousse $350 Other attorneys and Paralegals $215 - $525 Mr. Schreiber assures the Court that SCCA is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Mr. Schreiber can be reached at: Stahl Cowen Crowley, LLC 55 W. Monroe St., Suite 1200 Chicago, IL 60603 Tel: (312) 641-0060 Fax: (312) 641-6959 E-mail: sschreiber@stahlcowen.com About Pheasant Run Apartments, L.P. Indianapolis, Indiana-based Pheasant Run Apartments, L.P., operates a 20-acre, 184-unit apartment complex. The Company filed for Chapter 11 bankruptcy protection on March 11, 2010 (Bankr. S.D. Ind. Case No. 10-03060). According to the schedules, the Company has assets of $10,711,300, and total debts of $10,463,300. PHILLIPS CATTLE: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Phillips Cattle Company, Inc. 345 N. Maple Drive, Suite 296 Beverly Hills, CA 90210 Bankruptcy Case No.: 10-25276 Chapter 11 Petition Date: April 20, 2010 Court: United States Bankruptcy Court Central District Of California (Los Angeles) Judge: Sheri Bluebond Debtor's Counsel: Leslie A. Cohen, Esq. Leslie Cohen Law PC 506 Santa Monica Bl Suite 200 Santa Monica, CA 90401 Tel: (310) 394-5900 Fax: (310) 394-9280 E-mail: leslie@lesliecohenlaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $10,000,001 to $50,000,000 A list of the Company's 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/cacb10-25276.pdf The petition was signed by Phil Bauer, president. PINNACLE POINT: Files for Chapter 11 Bankruptcy Protection ---------------------------------------------------------- Pinnacle Point Properties LLC filed for Chapter 11 bankruptcy, saying its owes $34.93 million to Metropolitan National Bank of Little Rock, and $6.65 million to Chambers Bank of Danville. PINNACLE POINT: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Pinnacle Point Properties, LLC 5413 Pinnacle Point Drive Rogers, AR 72758 Bankruptcy Case No.: 10-72044 Chapter 11 Petition Date: April 20, 2010 Court: United States Bankruptcy Court Western District of Arkansas (Fayetteville) Debtor's Counsel: Stanley V. Bond, Esq. P.O. Box 1893 Fayetteville, AR 72701-1893 Tel: (479) 444-0255 Fax: (479) 444-7141 E-mail: attybond@me.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $10,000,001 to $50,000,000 A list of the Company's 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/arwb10-72044.pdf The petition was signed by Bill Schwyhart, manager. POSITRON CORP: Reports $5,749,000 Net Loss for 2009 --------------------------------------------------- Positron Corporation filed with the Securities and Exchange Commission its annual report on Form 10-K for the fiscal year ended December 31, 2009. The Company reported a net loss of $5,749,000 for 2009 from a net loss of $8,975,000 for 2008. Sales were $1,446,000 for 2009 from $2,126,000 for 2008. At December 31, 2009, the Company had total assets of $988,000 against total liabilities, all current, of $7,947,000, resulting in stockholders' deficit of $6,959,000. In its April 15, 2010 report, Frank L. Sassetti & Co., in Oak Park, Illinois, said there is substantial doubt about the Company's ability to continue as a going concern. Positron Corporation is a molecular imaging company focused on Nuclear Cardiology. PROLIANCE INT'L: Hearing on Plan Outline on May 19 -------------------------------------------------- Proliance International Inc., which has completed sales of most of the assets, filed a liquidating Chapter 11 plan. Under the Plan, secured creditors and holders of administrative claims will be paid in full. Unsecured creditors, however, stand to recover less than 1%. A hearing on the explanatory disclosure statement is scheduled for May 19. The bulk of the domestic assets were sold for $15 million cash to Centrum Equities XV LLC, the company that owns the aftermarket business spun off from Visteon Corp in 2008. The Dutch affiliate went for GBP17.7 million ($27.27 million). According to the Plan, creditor treatment includes: (a) holders of administrative claims and priority claims will be paid in full in cash, (b) holders of secured lender claims have already recovered 100% from sale proceeds, (c) holders of other secured claims will receive the collateral securing the claim or cash equal to the value of the collateral, (d) priority Pension Benefit Guaranty Corp. claims will be paid in full by the liquidating trustee and will recover less than 1% on its unsecured claim from a share of the liquidating trust fund, (e) holders of general unsecured claims will recover less than 1% from the liquidating trust fund and (d) holders of canceled inter-company claims and equity interests will receive no distribution. A hearing for the Disclosure Statement is scheduled for May 19, 2010. About Proliance International Based in New Haven, Connecticut, Proliance International, Inc. -- http://www.pliii.com/-- aka Godan makes automobile parts. The Company and its affiliates filed for Chapter 11 on July 2, 2009 (Bankr. D. Del. Lead Case No. 09-12278). Christopher M. Samis, Esq., and Daniel J. DeFranceschi, Esq., at Richards, Layton & Finger PA, represent the Debtors in their restructuring efforts. The Debtors' financial condition as of June 22, 2009, showed total assets of $160.3 million and total debts of $133.5 million. The sale of Proliance's North American assets to Centrum Equities XV, LLC, was consummated under the provisions of Section 363 of the Bankruptcy Code on August 14, 2009. PROVIDENCE SERVICE: S&P Raises Issue-Level Loan Ratings to 'BB' --------------------------------------------------------------- Standard & Poor's Ratings Services raised its rating on health services provider Providence Service Corp. to 'B+' from 'B-', aided by the better performance of the company's nonemergency transportation business and voluntary debt repayment. At the same time, S&P raised its issue-level ratings on Providence's term loan and revolver to 'BB' from 'B+'. The recovery ratings on these debt issues is a '1', indicating S&P's expectation for very high (90%-100%) recovery in the event of payment default. The rating on Providence reflects the company's weak business risk profile, related to its high dependence on Medicaid contracts with state and local agencies and its aggressive financial risk profile. The company's leading position in a highly fragmented niche market and positive track record of contract retention only partially offset these risks. Despite Providence's position as a leading player in a niche industry that provides home and community-based social services, foster care, nonemergency transportation service, and management of other not-for-profit organizations, it is highly reliant on contracts associated with government agencies that comprise about 80% of its total contract base (11 payors comprise approximately 50% of total revenues). This reliance is a significant factor in the company's business risk profile since many states have encountered budget constraints due to weak macroeconomic conditions. The Logisticare business (representing about 55% of total revenues), which Providence acquired in late 2007, caused a significant decline in performance in the second half of 2008 when weaker profitability raised S&P's concern about the company's ability to comply with its bank covenant compliance requirements. Along with the improved utilization of cost management, the company has now managed to turn this business around and report positive revenue growth of about 21% in 2009 through new contracts. R STAR RESTAURANTS: Files for Chapter 11 Bankruptcy --------------------------------------------------- Nancy Luna, staff writer at The Orange County Register reports that R Star Restaurants filed for Chapter 11 bankruptcy protection, listing $3.4 million in liabilities. The Company operates Lone Star restaurants in Tustin, Laguna Hills, Long Beach, Corona and Lake Elsinore. RADIANSE INC: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Radianse, Inc. 200 Brickstone Square, Suite 302 Andover, MA 01810 Tel: (978) 623-3100 Bankruptcy Case No.: 10-41930 Chapter 11 Petition Date: April 20, 2010 Court: United States Bankruptcy Court District of Massachusetts (Worcester) Judge: Melvin S. Hoffman Debtor's Counsel: Kenneth S. Leonetti, Esq. Foley Hoag LLP Seaport World Trade Center West 155 Seaport Boulevard Boston, MA 02210 Tel: (617) 832-1000 Fax: (617) 832-7000 E-mail: kleonett@foleyhoag.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/mab10-41930.pdf The petition was signed by Paul Tessier, director, CTO. RBS GLOBAL: Moody's Upgrades Corporate Family Rating to 'B3' ------------------------------------------------------------ Moody's Investors Service upgraded RBS Global, Inc.'s Corporate Family Rating and Probability of Default Rating to B3 from Caa1, senior secured credit facilities to Ba3 from B1, senior unsecured notes to Caa1 from Caa2, and senior subordinated notes to Caa2 from Caa3. The company's Speculative Grade Liquidity Rating was changed to SGL-2 from SGL-3. A Caa1 was assigned to the new proposed $1.15 billion senior unsecured notes due 2018. The outlook is stable. The new senior unsecured notes (approximately $1.1 billion) will be utilized to refinance the company's existing $795 million 9.5% senior unsecured notes due 2014, $196.27 million 9.5% senior unsecured notes due 2014, and $79 million 8.875% senior unsecured notes due 2016 which were tendered for in an offer launched on April 7, 2010. The upgrade of the company's CFR to B3 reflects the company's proven ability to generate positive free cash flow and attendant improvement in its liquidity profile. The B3 CFR incorporates Moody's view that even as RBS' leverage metrics remain high post transaction (inclusive of Rexnord Holdings debt, RBS' parent holdco), this proposed refinancing will improve the company's maturity schedule. RBS' performance in this downturn, though negatively impacted due to the contraction in the global demand for its products, has been aided by cost reduction. The company's cost structure combined with the benefits from an improving economy, should support overall profitability. The Water Management segment is likely to lag as it relies on commercial construction. RBS' SGL-2 speculative grade liquidity rating reflects Moody's belief that the company will maintain a good liquidity profile over the next twelve months. Moody's anticipates that the company will continue to produce positive free cash flow, even though operating cash flow has been adversely impacted by the current downturn in the global economy. RBS maintains strong cash balances of over $260 million, with availability under the company's $150 million revolving credit facility of approximately $119 million after LC's. Moody's believes that headroom under the company's financial covenants should be sufficient over the next twelve months. Constraining the liquidity rating is that the company's assets are encumbered to secure its bank borrowings. The stable outlook is based on Moody's expectations that RBS will benefit from improvement in global economic conditions and will continue to generate positive cash flow which has benefited from cost reductions. Assignments: Issuer: RBS Global, Inc. -- Senior Unsecured Regular Bond/Debenture, Assigned a Caa1, LGD4-63% Upgrades: -- Corporate Family Rating, Upgraded to B3 from Caa1 -- Probability of Default Rating, Upgraded to B3 from Caa1 -- Speculative Grade Liquidity Rating, Upgraded to SGL-2 from SGL-3 -- Senior Subordinated Regular Bond/Debenture, Upgraded to Caa2, LGD6-92% from Caa3, LGD6-91% -- Senior Secured Bank Credit Facility, Upgraded to Ba3, LGD2- 13% from B1, LGD2-15% -- Senior Unsecured Regular Bond/Debenture, Upgraded to Caa1, LGD4-63% from Caa2, LGD4-59% The last rating action was on May 1, 2009 at which time Moody's affirmed the company's Caa1 Corporate Family Rating and changed the Probability of Default Rating to Caa1/LD. RBS Global, Inc., headquartered in Milwaukee, WI, is an industrial company comprised of two strategic businesses including power transmission and water management. Revenues for the last twelve months through December 26, 2009 totaled approximately $1.5 billion. RCLC INC: May Sell Aviation Biz to Others if Hawthorne Deal Falls ----------------------------------------------------------------- RCLC, Inc., formerly known as Ronson Corporation, said in a regulatory filing it may seek other purchasers for its aviation business if the deal with Hawthorne TTN Holdings, LLC, is not consummated. However, RCLC indicated that, although prior to execution of the Aviation Sale Agreement with Hawthorne, it had discussions with various parties concerning the proposed sale transactions, none of these parties may now have an interest in these businesses or be willing to offer a reasonable purchase price. Furthermore, the Company may not be in a position to fund operations until other purchasers are identified. In February 2010, the Company completed the sale of its consumer products business to Zippo Manufacturing Company for an adjusted purchase price of $10.48 million in cash. The Consumer Products Sale Agreement provided for a purchase price of $11.1 million in cash less certain credits to which Zippo would be entitled at closing and subject to certain post-closing adjustments as described in the Consumer Products Sale Agreement. The sale included the Ronson trade marks, trade name and other intellectual property and, as such, as part of the sale, the Company agreed to change its name and the names of its subsidiaries. In February 2010, the Company received shareholder approval to sell its aviation business to Hawthorne TTN Holdings, LLC, for $9.5 million in cash subject to certain adjustments. Certain issues relating to Hawthorne's financing have delayed closing. RCLC and its wholly owned subsidiaries have extended a forbearance agreement with their principal lender, Wells Fargo Bank, National Association. Wells Fargo has agreed not to assert existing events of default under the Borrowers' credit facilities with Wells Fargo through April 23, 2010, or such earlier date determined under the Forbearance Agreement, to provide the Borrowers with additional time to consummate the sale to Hawthorne. About RCLC Inc. RCLC, Inc., formerly known as Ronson Corporation, in Woodbridge, New Jersey, historically, has been engaged principally in these businesses -- Consumer Products; and Aviation-Fixed Wing and Helicopter Services. RCLC INC: Reports $4,713,000 Net Loss for 2009 ---------------------------------------------- RCLC, Inc., has filed with the Securities and Exchange Commission its annual report on Form 10-K for the year ended December 31, 2009. RCLC reported a net loss of $4,713,000 for 2009 from a net loss of $1,652,000 for 2008. The Company reported $0 net sales for 2009 and 2008. At December 31, 2009, the Company had $17,220,000 in total assets against total current liabilities of $19,397,000, other long-term liabilities of $2,136,000, and other long-term liabilities of discontinued operations of $476,000, resulting in stockholders' deficiency of $4,789,000. The Company is in the process of liquidating its business. In its April 15, 2010 report, Demetrius & Company, L.L.C. in Wayne, New Jersey, said the Company has suffered recurring losses from operations and has a net capital deficiency that raise substantial doubt about its ability to continue as a going concern. A full-text copy of the Company's annual report is available at no charge at http://ResearchArchives.com/t/s?6090 About RCLC Inc. RCLC, Inc., formerly known as Ronson Corporation, in Woodbridge, New Jersey, historically, has been engaged principally in these businesses -- Consumer Products; and Aviation-Fixed Wing and Helicopter Services. Prior to March 2, 2009, the Company's shares of common stock were listed on the Nasdaq Capital Market and quoted under the symbol RONC. Effective March 2, 2009, the Company's shares of common stock are traded on the Over-the-Counter Pink Sheets and quoted under the symbol RONC.PK. In February 2010, the Company completed the sale of its consumer products business to Zippo Manufacturing Company for an adjusted purchase price of $10.48 million in cash. In February 2010, the Company also received shareholder approval to sell its aviation business to Hawthorne TTN Holdings, LLC, for $9.5 million in cash subject to certain adjustments. Certain issues relating to Hawthorne's financing have delayed closing. RCLC INC: Wells Fargo Forbearance Expires Today ----------------------------------------------- RCLC, Inc., formerly known as Ronson Corporation; and its wholly owned subsidiaries, RCPC Liquidating Corp. -- formerly Ronson Consumer Products Corporation; Ronson Aviation, Inc.; and RCC Inc., formerly Ronson Corporation of Canada Ltd., on April 16, 2010, further extended a forbearance agreement with their principal lender, Wells Fargo Bank, National Association. Wells Fargo has agreed not to assert existing events of default under the Borrowers' credit facilities with Wells Fargo through April 23, 2010, or such earlier date determined under the Forbearance Agreement, to provide the Borrowers with additional time to consummate the sale of RAI's assets to Hawthorne TTN Holdings, LLC, pursuant to a previously disclosed Asset Purchase Agreement dated as of May 15, 2009, as amended, among the Company, RAI and Hawthorne. As a result of the consummation of the sale of the Company's consumer products business to Zippo Manufacturing Company on February 2, 2010, RCPC and Ronson Canada are no longer permitted to request advances under the credit facility with Wells Fargo and any remaining assets of RCPC and Ronson Canada are no longer considered in borrowing base calculations. RAI will continue to be permitted to request advances under the Wells Fargo credit facility until April 23, 2010; provided, however, that Wells Fargo will have no obligation to make advances to RAI if Wells Fargo, in its reasonable discretion, believes that a New Jersey Economic Development Authority-approved bond issuance to finance Hawthorne's acquisition of the assets of RAI is not expected to occur by April 23, 2010. A full-text copy of the Fourteenth Amendment to Forbearance Agreement dated as of April 16, 2010 among RCLC, Inc. (formerly Ronson Corporation), RCPC Liquidating Corp. (formerly Ronson Consumer Products Corporation), Ronson Aviation, Inc., RCC Inc. (formerly Ronson Corporation of Canada Ltd.) and Wells Fargo Bank, National Association, acting through its Wells Fargo Business Credit operating division, is available at no charge at: http://ResearchArchives.com/t/s?608f About RCLC Inc. RCLC, Inc., formerly known as Ronson Corporation, in Woodbridge, New Jersey, historically, has been engaged principally in these businesses -- Consumer Products; and Aviation-Fixed Wing and Helicopter Services. Prior to March 2, 2009, the Company's shares of common stock were listed on the Nasdaq Capital Market and quoted under the symbol RONC. Effective March 2, 2009, the Company's shares of common stock are traded on the Over-the-Counter Pink Sheets and quoted under the symbol RONC.PK. In February 2010, the Company completed the sale of its consumer products business to Zippo Manufacturing Company for an adjusted purchase price of $10.48 million in cash. In February 2010, the Company also received shareholder approval to sell its aviation business to Hawthorne TTN Holdings, LLC, for $9.5 million in cash subject to certain adjustments. Certain issues relating to Hawthorne's financing have delayed closing. REXNORD LLC: S&P Assigns 'B-' Rating on Senior Unsec. Debt ---------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B-' issue-level rating and a '5' recovery rating to Milwaukee-based Rexnord LLC's proposed senior unsecured debt issue. At the same time, S&P affirmed the ratings on Rexnord, including the 'B' corporate credit rating. The ratings reflect the company's highly leveraged financial risk profile and difficult end-market conditions, although operating performance has held up fairly well despite the unfavorable environment. Total adjusted debt to EBITDA for the company remains very high at about 9x. The outlook is negative. The ratings primarily reflect Rexnord's highly leveraged financial risk profile. "S&P could lower the ratings if continued weakness in the company's operating performance limits improvement in credit measures," said Standard & Poor's credit analyst Dan Picciotto. For instance, if the company appears unlikely to maintain funds from operations to total debt of more than 5% or if S&P expects Rexnord will be unable to generate positive free cash flow, S&P could lower the ratings. "S&P could revise the outlook to stable if S&P expects operating performance to improve such that FFO to total debt appears likely to approach 10%," he continued. RIDGE BLVD.: Voluntary Chapter 11 Case Summary ---------------------------------------------- Debtor: Ridge Blvd. Realty, Ltd. 8311 Ridge Boulevard Brooklyn, NY 11209 Bankruptcy Case No.: 10-43380 Chapter 11 Petition Date: April 20, 2010 Court: U.S. Bankruptcy Court Eastern District of New York (Brooklyn) Judge: Elizabeth S. Stong Debtor's Counsel: Kenneth A. Reynolds, Esq. McBreen & Kopko 500 North Broadway, Suite 129 Jericho, NY 11783 Tel: (516) 364-1095 Fax: (516) 364-0612 E-mail: kreynolds@mklawnyc.com Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 The Company did not file a list of creditors together with its petition. The petition was signed by Rosa Gargano, president. Debtor-affiliate filing separate Chapter 11 petition: Entity Case No. Petition Date ------ -------- ------------- 783 McDonald Ave. Realty Corp. 07-44329 10/10/96 RIVIERA HOLDING: Forms Office of CEO on Interim Basis ----------------------------------------------------- Riviera Holdings Corporation's board of directors disclosed the creation of the Office of the chief of executive on an interim basis, which will perform the functions of the company's CEO and will be jointly held by Tullio J. Marchionne, secretary and General Counsel and Riviera Operating Corporation's Secretary and Executive Vice President; Robert A. Vannucci, the President and Chief Operating Officer of ROC; and Phillip Simons, Treasurer and Chief Financial Officer and ROC's Treasurer, CFO and Vice President of Finance. Messrs. Marchionne, Vannucci and Simons will also each continue in their current positions with the Registrant and its subsidiaries. Effective immediately, Vincent L. DiVito, a current member of the Board, was elected Chairman of the Board. The company's CEO William L. Westerman passed away on April 18, 2010. Going Concern Doubt The Company reported a net loss of $24.9 million on $134.0 million of revenue for the year ended December 31, 2009, compared with a net loss of $11.9 million on $169.8 million of revenue for 2008. The Company's balance sheet as of December 31, 2009, showed $198.9 million in assets and $282.0 million of debts, for a stockholders' deficit of $83.1 million. Ernst Young LLP, in Las Vegas, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has incurred recurring operating losses and has a working capital deficiency. In addition, the Company is in default under its Credit Facility and Swap Agreement. About Riviera Holdings Las Vegas, Nevada-based Riviera Holdings Corporation, through its Wholly owned subsidiary, Riviera Operating Corporation, owns and operates the Riviera Hotel & Casino located on the Las Vegas Boulevard in Las Vegas, Nevada. Through its wholly owned subsidiary, Riviera Black Hawk, Inc., the Company owns and operates the Riviera Black Hawk Casino, a casino in Black Hawk, Colorado. RUSSELL COOLEY: Case Summary & 4 Largest Unsecured Creditors ------------------------------------------------------------ Joint Debtors: Russell J. Cooley Kelly Davidson-Cooley 19221 32nd Avenue NW Stanwood, WA 98292 Bankruptcy Case No.: 10-14399 Chapter 11 Petition Date: April 20, 2010 Court: U.S. Bankruptcy Court Western District of Washington (Seattle) Judge: Karen A. Overstreet Debtor's Counsel: Jeffrey B Wells Attorney at Law 500 Union Street, Suite 502 Seattle, WA 98101 Tel: (206) 624-0088 E-mail: eajbwellaw@aol.com Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Joint Debtors' list of 4 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/wawb10-14399.pdf The petition was signed by the Joint Debtors. SAC II: Voluntary Chapter 11 Case Summary ----------------------------------------- Debtor: SAC II 6160 Plumas Street, Suite 200 Reno, NV 89519 Bankruptcy Case No.: 10-51440 Chapter 11 Petition Date: April 20, 2010 Court: U.S. Bankruptcy Court District of Nevada (Reno) Judge: Gregg W. Zive Debtor's Counsel: Sallie B. Armstrong, Esq. 427 W Plumb Lane Reno, NV 89509 Tel: (775) 329-5900 E-mail: sarmstrong@downeybrand.com Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Company did not file a list of creditors together with its petition. The petition was signed by Nello Gonfiantini III, president and chief executive officer. Debtor-affiliates filing separate Chapter 11 petition: Entity Case No. Petition Date ------ -------- ------------- Specialty Trust, Inc. 10-51432 04/20/10 Assets: $100-mil. to $500-mil. Debts: $50-mil. to $100-mil. Specialty Acquisition Corp. 10-51437 04/20/10 Assets: $10-mil. to $50-mil. Debts: $10-mil. to $50-mil. SANDY HOROWITZ: Former County Exec Coyne to Oversee Properties -------------------------------------------------------------- Jim Coyne, former county executive of Albany, said it will oversee and manage several properties in Troy of Sand Horowitz, according to Jessica M. Pasko at The Record. Sandy Horowitz, a property developer in California, filed for bankruptcy under Chapter 11 in late 2009. SECUREALERT INC: Completes Acquisition of Court Programs -------------------------------------------------------- SecureAlert, Inc., has completed its acquisition of Court Programs, Inc. Effective March 31, 2010, SecureAlert entered into an Amended Stock Purchase Agreement with David M. Rothbart as Seller. Pursuant to the Amendment Agreement, the Company exercised its option to purchase the remaining 49% of the capital stock owned by Mr. Rothbart in Court Programs, Court Programs of Florida, Inc., and Court Programs of Northern Florida, Inc. SecureAlert originally purchased a 51% of Court Programs on December 1, 2007, and received at that time an option to purchase the remaining 49%. Since the date of the Original Agreement, Mr. Rothbart has been serving as the President, and as a director of, each of the CP Entities. The fair market value of the consideration received by Mr. Rothbart under the Amendment Agreement is approximately $784,000, consisting of $100,000 cash paid at closing; $200,000 in cash payable in four equal installments of $50,000 each on July 15, 2010, October 15, 2010, January 15, 2011, and April 15, 2011, together with interest on any unpaid amounts at 8% per annum; and 621 shares of the Company's Series D Convertible Preferred Stock. Each share of Series D Convertible Preferred Stock of the Company is convertible into 6,000 shares of Common Stock of the Company. The Amendment Agreement further provides that: -- the Company and Mr. Rothbart will enter into a three-year management agreement, pursuant to which the Company agrees to pay Mr. Rothbart $100,000 per year. Mr. Rothbart will assume the title of Vice President, New Business Development and Legislative Relations of the Company, and will be provided a car for business use, and reimbursement of all vehicle business expenses. -- if the Company chooses to divest its ownership interest in, or substantially all of the assets of, any of the CP Entites, Mr. Rothbart will have the right of first refusal to purchase up to 100% of such interest or assets at the then current market value. -- Mr. Rothbart will be subject to covenants not to compete with the Company during the term of his agreement, and for two years following termination of his agreement. The CP Entities are engaged in providing parole and probation monitoring equipment and services in the states of Florida and Mississippi. The CP Entities lease some of their products from the Company. CPI has over 25 years of expertise focused on case management and offender monitoring services. Their programs include: Youth Court, School Attendance, Pre-Trial Release, Pre-Trial Diversion, Reporting Probation, Day Reporting Center, House Arrest, Alcohol Abuse Monitoring, Defensive Driving School and Drug Testing. CPI has 22 offices located throughout Mississippi and Florida. John Hastings, President and Chief Operating Officer of SecureAlert, Inc., said in a statement dated April 12, "We are excited about the further integration between SecureAlert and Court Programs, bringing them together under one portfolio expands our offender management services and offerings capabilities." Mr. Hastings added, "We expect the acquisition will improve our bottom line once we have maximized the efficiencies between the two companies. Importantly, the acquisition gives us the full array of Court Program's products and services, which we can now capitalize on. The ongoing synergies between the two companies will be a core driver of enhanced financial performance going forward." About SecureAlert Sandy, Utah-based SecureAlert, Inc. (OTCBB: SCRA) -- http://www.securealert.com/-- is a monitoring, case management and advanced communications Technology Company with a portfolio of services utilized by more than 625 law enforcement agencies, judicial districts and county jurisdictions across 35 states. Approximately 15,000 offenders are supported, managed and supervised monthly through the company's programs, services and electronic monitoring initiatives. RemoteMDx, Inc., filed an amendment to its Articles of Incorporation changing its corporate name to SecureAlert, Inc. Additionally, the Company's subsidiary, SecureAlert, Inc., filed an amendment to its Articles of Incorporation changing its corporate name to SecureAlert Monitoring, Inc. At December 31, 2009, the Company's consolidated balance sheets showed $8,212,402 in total assets and $25,255,098 in total liabilities, resulting in a $17,042,696 shareholders' deficit. The Company's consolidated balance sheets at December 31, 2009, also showed strained liquidity with $2,692,487 in total current assets available to pay $23,099,738 in total current liabilities. The Company has incurred recurring net losses, negative cash flows from operating activities, and an accumulated deficit. "These factors raise substantial doubt about the Company's ability to continue as a going concern." The Company said it is presently unable to finance its business solely from cash flows from operating activities. During the three months ended December 31, 2009, the Company financed its business primarily from the issuance of debt and the issuance of stock providing cash proceeds of $1,531,304. SECUREALERT INC: Increases Authorized Common Shares to 600-Mil. --------------------------------------------------------------- SecureAlert, Inc., formerly, RemoteMDx, Inc., filed with the Securities and Exchange Commission on April 15, 2010, an information statement to inform shareholders of the amendment to the Company's Articles of Incorporation to increase the authorized shares of Common Stock from 250,000,000 shares to 600,000,000 shares of Common Stock, par value $0.0001 per share. There will be no change to the authorized shares of preferred stock of the Company. David G. Derrick, the Company's CEO and Director, said the Company's Board of Directors has approved the increase, and holders of not less than a majority of the shares of record or share equivalents on the record date entitled to vote on the proposal have consented in writing to the proposal. As such, the Company is not soliciting Shareholders' consent on the shares increase. All holders of shares of Common Stock and Series D Preferred Stock of record on the close of business on March 31, 2010, are entitled to notice of the action to be taken pursuant to the Proposal. As of January 13, 2010, there were approximately 3,500 holders of record of the Company's Common Stock and 211,765,988 shares of Common Stock of the Company issued and outstanding and 37 holders of record of the Company's Series D Preferred Stock and 25,186 shares of Series D Preferred Stock of the Company issued and outstanding. A full-text copy of the Information Statement is available at no charge at http://ResearchArchives.com/t/s?608e About SecureAlert Sandy, Utah-based SecureAlert, Inc. (OTCBB: SCRA) -- http://www.securealert.com/-- is a monitoring, case management and advanced communications Technology Company with a portfolio of services utilized by more than 625 law enforcement agencies, judicial districts and county jurisdictions across 35 states. Approximately 15,000 offenders are supported, managed and supervised monthly through the company's programs, services and electronic monitoring initiatives. RemoteMDx, Inc., filed an amendment to its Articles of Incorporation changing its corporate name to SecureAlert, Inc. Additionally, the Company's subsidiary, SecureAlert, Inc., filed an amendment to its Articles of Incorporation changing its corporate name to SecureAlert Monitoring, Inc. At December 31, 2009, the Company's consolidated balance sheets showed $8,212,402 in total assets and $25,255,098 in total liabilities, resulting in a $17,042,696 shareholders' deficit. The Company's consolidated balance sheets at December 31, 2009, also showed strained liquidity with $2,692,487 in total current assets available to pay $23,099,738 in total current liabilities. The Company has incurred recurring net losses, negative cash flows from operating activities, and an accumulated deficit. "These factors raise substantial doubt about the Company's ability to continue as a going concern." The Company said it is presently unable to finance its business solely from cash flows from operating activities. During the three months ended December 31, 2009, the Company financed its business primarily from the issuance of debt and the issuance of stock providing cash proceeds of $1,531,304. SECUREALERT INC: Raises $9.4MM in Cash & Converts $16.6MM in Debt ----------------------------------------------------------------- SecureAlert, Inc., has raised a total of $9,440,000 in cash, and has converted a total of $16,681,384 in debt and accrued interest, through the issuance of its Series D Preferred stock. This is an update to the $6,100,000 equity raise and $15,723,204 debt conversion announced on January 14, 2010. The terms and conditions of this incremental recapitalization are consistent with the previous transactions announced in January 2010. John Hastings, President and Chief Operating Officer of SecureAlert, said in a statement dated April 12, "The continued incremental recapitalization provides us with the opportunities to expand our business both through organic growth and acquisitions, as we strive to be the market leader of offender monitoring." About SecureAlert Sandy, Utah-based SecureAlert, Inc. (OTCBB: SCRA) -- http://www.securealert.com/-- is a monitoring, case management and advanced communications Technology Company with a portfolio of services utilized by more than 625 law enforcement agencies, judicial districts and county jurisdictions across 35 states. Approximately 15,000 offenders are supported, managed and supervised monthly through the company's programs, services and electronic monitoring initiatives. RemoteMDx, Inc., filed an amendment to its Articles of Incorporation changing its corporate name to SecureAlert, Inc. Additionally, the Company's subsidiary, SecureAlert, Inc., filed an amendment to its Articles of Incorporation changing its corporate name to SecureAlert Monitoring, Inc. At December 31, 2009, the Company's consolidated balance sheets showed $8,212,402 in total assets and $25,255,098 in total liabilities, resulting in a $17,042,696 shareholders' deficit. The Company's consolidated balance sheets at December 31, 2009, also showed strained liquidity with $2,692,487 in total current assets available to pay $23,099,738 in total current liabilities. The Company has incurred recurring net losses, negative cash flows from operating activities, and an accumulated deficit. "These factors raise substantial doubt about the Company's ability to continue as a going concern." The Company said it is presently unable to finance its business solely from cash flows from operating activities. During the three months ended December 31, 2009, the Company financed its business primarily from the issuance of debt and the issuance of stock providing cash proceeds of $1,531,304. SEVEN FALLS: Expects to Have Funding by May 18 ---------------------------------------------- Market Barrett at Citizen-Times.com reports that a federal judge turned down a request to force Seven Falls LLC to go out of business. A person familiar with the matter said the Company expects to have commitments in place for a new injection of funds of between $5 million and $12 million by May 18. The federal judge noted that it won't wait much long for the Company to get funding to keep going. Seven Falls, LLC, has a golf course and residential development on 400 acres in Hendersonville, North Carolina. The Company filed for Chapter 11 bankruptcy protection on October 26, 2009 (Bankr. W.D. N.C. Case No. 09-11182). The Company listed $50,000,001 to $100,000,000 in assets and $10,000,001 to $50,000,000 in liabilities. SEVERN BANCORP: Reports 62% Improvement in First Quarter Results ---------------------------------------------------------------- Severn Bancorp, Inc.,, reported a net loss for the first quarter ended March 31, 2010, of approximately $500,000 (unaudited), or ($0.10) per share, compared to a net loss of $1.3 million (unaudited) or ($0.18) per share for the first quarter of 2009 and net loss of $2.7 million (unaudited), or $(0.31) per share for the fourth quarter of 2009. The net loss of approximately $500,000 for the quarter was primarily due to an increase in the loan loss reserve of approximately $2.5 million during the quarter ended March 31, 2010. This increase is a non-cash charge against earnings. At March 31, 2010, Severn's regulatory capital ratios continued to exceed the levels required to be considered "well capitalized" under applicable federal banking regulations, including its core (leverage) ratio of approximately 12% compared to the regulatory requirement of 5% for "well capitalized" status. "An increase in our net interest margin and a reduction in our provision for loan losses during the quarter helped improve our earnings on a year over year and sequential basis," said Alan J. Hyatt, president and chief executive officer. "While we are not satisfied with the loss for the quarter, we are encouraged by the improvement in asset quality and the prospects for improved performance for the remainder of 2010. We feel we're on the right track with positive trends in performance and problem assets. Our core earnings remain positive driven largely by our lower cost of funds and overhead cost controls. We continue to position ourselves for a return to stronger performance as the economy improves. " A full-text copy of the Company's earnings release is available at no charge at http://ResearchArchives.com/t/s?6078 As reported by the Troubled Company Reporter on December 28, 2009, the Board of Directors of Severn Bancorp suspended the common stock dividend for the fourth quarter of 2009. This represents a reduction of $0.03 per share from the common stock dividend declared for the third quarter of 2009. As reported by the TCR on November 25, 2009, Annapolis, Maryland- based Severn Bancorp along with its Bank unit, has entered into supervisory agreements with the Office of Thrift Supervision, the Bank's primary federal regulator. The agreements set forth steps being taken in response to regulatory concerns with its operating results and effects of the current economic environment facing the financial services industry. About Severn Savings Bank Founded in 1946, Severn Savings Bank, FSB -- http://www.severnbank.com/-- is a full-service community bank offering a wide array of personal and commercial banking products as well as residential and commercial mortgage lending. It has assets of nearly $1 billion and four branches located in Annapolis, Edgewater and Glen Burnie. The bank specializes in exceptional customer service and holds itself and its employees to a high standard of community contribution. Severn Bancorp, Inc., (Nasdaq: SVBI) is the parent company of Severn Savings Bank. SMART ONLINE: Reports $9,540,871 Net Loss for 2009 -------------------------------------------------- Smart Online, Inc., has filed with the Securities and Exchange Commission its annual report on Form 10-K for the year ended December 31, 2009. The Company reported a net loss of $9,540,871 for 2009 from a net loss of $10,052,149. Total revenues were $1,419,502 for 2009 from $3,879,179 for 2008. At December 31, 2009, the Company had total assets of $1,346,120 against total liabilities of $16,739,899, resulting in stockholders' deficit of $15,393,779. The Company's December 31, 2009 balance sheet showed strained liquidity: The Company had total current assets of $373,693 against total current liabilities of $6,949,043. In its April 15, 2010 report, Cherry, Bekaert & Holland, L.L.P. in Raleigh, North Carolina, said the Company has suffered recurring losses from operations and has a working capital deficiency as of December 31, 2009. These conditions raise substantial doubt about the Company's ability to continue as a going concern. A full-text copy of the Company's annual report is available at no charge at http://ResearchArchives.com/t/s?6091 About Smart Online Durham, North Carolina-based Smart Online, Inc. -- http://www.smartonline.com/-- develops and markets software products and services (One Biz(TM)) targeted to small businesses that are delivered via a Software-as-a-Service model. The Company sells its SaaS products and services primarily through private- label marketing partners. In addition, the Company provides sophisticated and complex Web site consulting and development services, primarily in the e-commerce retail and direct-selling organization industries. SMART ONLINE: Restates FY2008 & 2009 Quarterly Financials --------------------------------------------------------- The Audit Committee of Smart Online, Inc. -- in consultation with Cherry, Bekaert & Holland, the Company's independent registered public accountants -- concluded on April 13, 2010, that the Company's financial statements for the fiscal year ended December 31, 2008 and for the fiscal quarters ended March 31, 2009, June 30, 2009 and September 30, 2009 should no longer be relied upon because of an error in the financial statements. The Company's Board of Directors unanimously approved, authorized and directed the restatements of the financial statements and the filing of a Report on Form 8-K. The Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2009, as filed with the Securities and Exchange Commission, is consistent with the Company's restated financial statements. The financial statements have been restated to include net subscription revenue as compared to the gross subscription revenue as presented in prior filings for 2009 and 2008. Subscription fees primarily consist of sales of subscriptions through private- label marketing partners to end users. "We typically have a revenue-share arrangement with these marketing partners in order to encourage them to market our products and services to their customers. Subscriptions are generally payable on a monthly basis and are typically paid via credit card of the individual end user. We accrue any payments received in advance of the subscription period as deferred revenue and amortize them over the subscription period. In the past we recognized all subscription revenue on a gross basis and in accordance with our policy to periodically review our accounting policies we identified the fact that certain contracts require the reporting of subscription revenue on a gross basis and others on a net basis according to US GAAP. On that basis, we continue to report subscription revenue from certain contracts on a gross basis and others on a net basis," the Company explained. The Company said the net effect of the reclassification of expenses only impacts gross revenue and certain gross expenses; it does not change the net income. In addition to the restatement of subscription revenue, the Company also restated the value of the iMart trade name as of December 31, 2008 because of a recalculation of the net royalty method of valuation. The restatement caused an increase in the amount of loss on impairment of intangible assets for the year ended December 31, 2008 in the amount of $230,000. The restated total loss on impairment of intangible assets is $3,702,141 as compared to the original loss of $3,472,141. A full-text copy of the restatement is available at no charge at http://ResearchArchives.com/t/s?6092 About Smart Online Durham, North Carolina-based Smart Online, Inc. -- http://www.smartonline.com/-- develops and markets software products and services (One Biz(TM)) targeted to small businesses that are delivered via a Software-as-a-Service model. The Company sells its SaaS products and services primarily through private- label marketing partners. In addition, the Company provides sophisticated and complex Web site consulting and development services, primarily in the e-commerce retail and direct-selling organization industries. At December 31, 2009, the Company had total assets of $1,346,120 against total liabilities of $16,739,899, resulting in stockholders' deficit of $15,393,779. The Company's December 31, 2009 balance sheet showed strained liquidity: The Company had total current assets of $373,693 against total current liabilities of $6,949,043. In its April 15, 2010 report, Cherry, Bekaert & Holland, L.L.P. in Raleigh, North Carolina, said the Company has suffered recurring losses from operations and has a working capital deficiency as of December 31, 2009. These conditions raise substantial doubt about the Company's ability to continue as a going concern. SOUTH BAY EXPRESSWAY: Gets OK to Pay Business Taxes & Licenses -------------------------------------------------------------- South Bay Expressway, L.P., and California Transportation Ventures, Inc., obtained approval from the Court to pay franchise, real and personal property, and employment taxes, business license and other similar fees. In the ordinary course of business, the Debtors: (a) incur and collect taxes, including franchise, property and miscellaneous taxes in the operation of their business; (b) incur business license and permit fees and other similar assessments in connection with obtaining licenses and permits necessary to operate their business; and (c) remit the Taxes and Fees to various taxing, licensing and other governmental authorities and make payments to various third parties for Taxes and Fees who, in turn, remit the Taxes and Fees to the Taxing Authorities. The Debtors pay the Taxes and Fees monthly, quarterly, or annually, in each case as required by applicable laws and regulations. R. Alexander Pilmer, Esq., at Kirkland & Ellis LLP, in Los Angeles, California, contends that payment of the Taxes and Fees in the ordinary course of business is justified because, among other things: -- certain of the Taxes and Fees are not property of the bankruptcy estate pursuant to Section 541(d) of the Bankruptcy Code; -- payment of the Taxes and Fees will avoid unnecessary distractions in the Debtors' Chapter 11 cases; -- certain of the Taxes and Fees may constitute secured or priority claims entitled to special treatment under the Bankruptcy Code; and -- the Debtors have authority to remit payment on account of the Taxes and Fees in the ordinary course of business. 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: Hearing on Further Cash Use on April 22 ------------------------------------------------------------- Judge Louise DeCarl Adler granted South Bay Expressway, L.P., and California Transportation Ventures, Inc., permission to use cash collateral on an interim basis. Judge Adler authorized the Debtors to use Cash Collateral during the period commencing immediately after the entry of the Interim Order and terminating upon written notice by the Administrative Agent to the Debtors, their counsel, lead counsel to any official committee and the Notice Parties that an Event of Default has occurred and is continuing, provided that in no event may the Debtors expend more than a total amount of 115% of $999,000 from the Petition Date through and including April 22, 2010. Nothing in the Interim Order will authorize the disposition of any assets of the Debtors or their bankruptcy estates outside the ordinary course of business, except in accordance with the Budget and further Court order, Judge Adler maintained. She added that no Cash Collateral may be used by the Debtors, any official committee, or any other person or entity to object to the validity, extent, perfection, priority or enforceability of the Prepetition Obligations, or any other rights or interests of the Secured Financing Parties, or to assert any claims against the Secured Financing Parties. In addition to the reports and information required to be provided by the Debtors under the Prepetition Secured Loan Documents, the Debtors will provide periodic reports to the Administrative Agent, TIFIA/ Federal Highway Administrator, Caltrans and Otay River Constructors, which include the Weekly Budget Report, Monthly Operating Budget Report and Project Completion Budget Report. The Secured Financing Parties will receive adequate protection, including postpetition replacement liens, an allowed superpriority administrative expense claim and adequate protection payment. The Final Cash Collateral hearing will be held on April 22, 2010, at 2:30 p.m. 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: Sec. 341 Meeting Set for April 27 ------------------------------------------------------- Haeji Hong, the Acting United States Trustee for Region 15, will convene a meeting of creditors of South Bay Expressway, L.P., and California Transportation Ventures, Inc., on April 27, 2010, at 9:00 a.m. Pacific Time, at the Office of the U.S. Trustee at 402 West Broadway, Sixth Floor, Suite 630, in San Diego, California. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in the Debtors' bankruptcy cases. Attendance by the Debtors' creditors at the meeting is welcome, but not required. The Section 341(a) meeting offers the creditors a one-time opportunity to examine the Debtor's representative under oath about the Debtor's financial affairs and operations that would be of interest to the general body of creditors. 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: Sues to Void Mechanics Liens on Expressway ---------------------------------------------------------------- Plaintiffs South Bay Expressway, L.P., and California Transportation Ventures, Inc., filed a complaint against certain parties to resolve an issue critical to a successful reorganization. More specifically, they want the Court to determine whether their interest in a public transportation demonstration project, owned by the State and authorized by statute, be encumbered by a mechanic's lien. The Debtors argue that a prompt resolution of the issue will shape the remainder of the bankruptcy case. The Defendants are: -- Otay River Constructors; -- Wells Fargo Bank, National Association, as Collateral Agent on behalf of various lenders, including Banco Bilbao Vizcaya Argenteria, S.A., Depfa Bank plc, and the United States Department of Transportation, acting through the Federal Highway Administration; and -- Intrans Group, Inc. The Debtors developed and operate the South Bay Expressway or State Road 125. The property on which the Expressway is located is not owned by the Debtors, but is operated pursuant to a 35-year build transfer operate franchise agreement with the state of California Department of Transportation. On May 22, 2003, SBX, as borrower, and (i) BBVA, as administrative agent and joint lead arranger, (ii) Depfa Bank plc, as technical bank and joint lead arranger, and (iii) the lenders from time-to- time party thereto entered into a Term Loan Agreement to finance the development, engineering, construction and operation of the Expressway. On the same day, SBX, as borrower, and TIFIA Lender and, together with the Term Loan Lenders, entered into the Transportation Infrastructure Finance and Innovation Act Loan Agreement, to finance eligible project costs related to the Expressway. SBX, as borrower, and Wells Fargo Bank, as collateral agent for the Secured Lenders, the Administrative Agent, and Depfa, as Modelling Bank and Technical Advisor under the Term Loan, entered into a security agreement, whereby SBX provided the Collateral Agent with a security interest in substantially all of its assets. The Debtors, as borrowers, executed a Construction and Term Loan Deed of Trust, Assignment of Leases and Revenues and Fixture Filing securing the Term Loan, and the TIFIA Loan. The Construction Deed of Trust was recorded in the Official Records of San Diego County, California. Upon conversion of the Construction Loan, SBX entered into a lease with Caltrans and, pursuant to a certain Leasehold Deed of Trust, Assignment of Leases and Revenues and Fixture Filing, granted a leasehold deed of trust in favor of the Chicago Title Company, as trustee for the benefit of the Collateral Agent. As developer of the Expressway, SBX is a party to two separate design build agreements, (i) one for the Gap/Connector, signed on June 6, 2002, with final notice to proceed on August 15, 2002, and one for the Expressway, signed on May 22, 2003, with notice to proceed on the same date, with ORC, the contractor selected for construction of the Gap/Connector and the Expressway. The Debtors and ORC have been engaged in arbitration proceedings to determine the validity of more than 120 claims asserted by ORC relating to the Gap/Connector DBA and the Expressway DBA, which range in value from less than $100,000 to more than $100 million. ORC recorded in the official records of San Diego County, two purported mechanic's liens upon the Expressway, and Debtors' property rights therein, for $233,110,946 and $145,476,376 plus interests and costs. SBX entered into a Fixed Operating Equipment Contract with Intrans on May 15, 2004, to design, furnish and install toll collection, network communications and traffic management systems on and for the Expressway. Intrans has initiated arbitration and litigation proceedings pertaining to an alleged breach of the FOE Contract, for which Intrans alleges it has suffered at least $9,002,000 in damages. The Debtors believe that Intrans recorded in the official records of San Diego County, a purported mechanic's lien upon the Expressway and Debtors' property rights for $9,002,000. ORC's and Intrans' purported mechanic's liens relate to a public work, for a public purpose, on the public property of the state of California, R. Alexander Pilmer, Esq., at Kirkland & Ellis LLP, in Los Angeles, California, relates. Hence, he argues, any purported mechanic's lien is not recognized under California law and cannot encumber any interest in the public transportation project. Neither ORC nor Intrans commenced a work of improvement on the Expressway until some time following the execution of the Term Loan Agreement, Security Agreement and the Construction Deed of Trust, Mr. Pilmer contends. Nor had ORC or Intrans commenced a work of improvement until after the recording of the Construction Deed of Trust, he continues. He adds that at the time of each of their commencement of work on the property at issue, ORC and Intrans were aware and had actual notice of prior secured interests in the Expressway. Therefore, he points out, any mechanic's liens are junior to the secured claims of the Secured Parties. An actual controversy has arisen and exists between the Debtors and the Defendants concerning whether the Defendants' purported mechanic's liens on Debtors' interests in the Expressway are valid, Mr. Pilmer contends. The Debtors assert that any purported mechanic's lien against their interests in the Expressway is invalid. The Debtors, therefore, ask the Court to issue a judgment declaring that (i) any purported mechanic's liens against Debtors' interests in the Expressway are invalid, and (ii) any valid mechanic's liens against the Debtors' interests in the Expressway are junior in priority to the Secured Parties' claims. 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 GATE: S&P Downgrades Rating on Bonds to 'BB-' --------------------------------------------------- Standard & Poor's Ratings Services lowered its underlying rating on South Gate, California's pension obligation bonds to 'BB-' from 'BBB-'. The outlook is negative. "The downgrade reflects S&P's opinion of the continuation of operating deficits that have characterized the city's financial management for at least the past decade; a negative cash balance in audited fiscal year 2009 and negative cash balances in four other city funds; deficit spending in fiscal 2010 that will make negative balances worse; a structurally imbalanced budget; a weak economic base as indicated by a 25% decline in fiscal 2009 sales tax revenues; low per capita effective income and consistently high unemployment; and low assessed value per capita," said Standard & Poor's credit analyst Ian Carroll. The POBs are secured by city revenues from any available source; the city does not have the ability to increase taxes to pay debt service. South Gate (population: approximately 103,000) is a city located in Los Angeles County, 12 miles southeast of downtown Los Angeles, that is 7.5 square miles in area. Several industrial and manufacturing operations have closed or moved over the years, eliminating many of the jobs centered here. As a result, economic activity has been limited, constraining city revenue growth. SOUTHERN STATES: Moody's Assigns 'B3' Rating on $125 Mil. Notes --------------------------------------------------------------- Moody's Investors Service assigned a B3 rating to Southern States Cooperative, Inc.'s proposed $125 million senior unsecured note issue due 2015. Moody's also affirmed the company's B1 Corporate Family Rating, B1 Probability of Default Rating, and SGL-2 Speculative Grade Liquidity rating. The outlook is stable. Proceeds from the proposed offering will be used to tender for Southern States' $82 million senior unsecured notes due 2011, and fund a contribution to the company's underfunded multi-employer pension plan. "The affirmation of Southern States' B1 Corporate Family Rating considers that the new notes will extend the company's debt maturity profile and eliminate the need for minimum contributions to the plan that would have been due in the next few years absent this prefunding" said Moody's Vice President Scott Tuhy. The ratings and stable outlook also reflect Southern States' strong competitive position, moderate leverage, highly diversified customer base, and good liquidity. Key credit concerns include Southern States' low absolute profit margins and high degree of earnings and cash flow volatility driven by factors such as weather and commodity price levels. Rating assigned: * $125 million senior unsecured notes due 2015 at B3 (LGD 5, 86%) Ratings affirmed: * Corporate Family Rating at B1 * Probability of Default Rating at B1 * $82 million senior unsecured notes due 2011 at B3 (LGD 5, 86%) * Speculative Grade Liquidity rating at SGL-2 The B3 rating on Southern States' senior unsecured notes due 2011 will be withdrawn upon repayment with proceeds from the $125 million unsecured note issue once that transaction closes. The last rating action on Southern States was on October 23, 2008, when Moody's upgraded the company's Corporate Family Rating to B1 from B2 and assigned a stable outlook. Southern States Cooperative, Inc., is a retailer and wholesale supplier of agricultural products and services, such as fertilizer, seed, crop protectants, animal feed, petroleum, and farm and home supplies. The company generates annual revenues of about $1.7 billion. SPANSION INC: Enter Two-Year Service Agreement With ChipMOS ----------------------------------------------------------- ChipMOS Technologies (Bermuda) LTD. disclosed that Spansion LLC and ChipMOS TECHNOLOGIES INC., a wholly owned subsidiary of ChipMOS, have entered into a two-year wafer sort services agreement, utilizing the V5400 test platform, making ChipMOS Taiwan the exclusive wafer sort subcontractor of Spansion, except for any sort equipment operated by Spansion LLC or currently located at Spansion Japan Limited. S.J. Cheng, Chairman and Chief Executive Officer of ChipMOS indicated, "ChipMOS and Spansion have continued to work together in what has been the worst global economic downturn in memory. We believe the existing capacity in ChipMOS can fully support Spansion for the company's long-term success. We look forward to continuing to provide the high-quality semiconductor testing services for Spansion that our customers rely on us for." "ChipMOS has been a tremendous long-term ally and strategic wafer sort service provider to Spansion," said John Kispert, Spansion president and CEO. "We are pleased with this new long-term agreement and look forward to succeeding together." The wafer sort services agreement will become effective upon the earlier of (i) the date the U.S. Bankruptcy Court enters an order approving the agreement, and such order is not stayed pending appeal, or (ii) the date a plan of reorganization for Spansion is confirmed by the U.S. Bankruptcy Court and becomes effective. About ChipMOS ChipMOS Technologies (Bermuda) Ltd. -- http://www.chipmos.com-- is a leading independent provider of semiconductor testing and assembly services to customers in Taiwan, Japan, and the U.S. With advanced facilities in Hsinchu and Southern Taiwan Science Parks in Taiwan and Shanghai, ChipMOS and its subsidiaries provide testing and assembly services to a broad range of customers, including leading fabless semiconductor companies, integrated device manufacturers and independent semiconductor foundries. About Spansion Inc. Spansion Inc. (NASDAQ: SPSN) -- http://www.spansion.com/-- is a Flash memory solutions provider, dedicated to enabling, storing and protecting digital content in wireless, automotive, networking and consumer electronics applications. Spansion, previously a joint venture of AMD and Fujitsu, is the largest company in the world dedicated exclusively to designing, developing, manufacturing, marketing, selling and licensing Flash memory solutions. 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. SPECIALTY ACQUISITION: Voluntary Chapter 11 Case Summary -------------------------------------------------------- Debtor: Specialty Acquisition Corp. 6160 Plumas Street, Suite 200 Reno, NV 89519 Bankruptcy Case No.: 10-51437 Chapter 11 Petition Date: April 20, 2010 Court: United States Bankruptcy Court District of Nevada (Reno) Judge: Gregg W. Zive Debtor's Counsel: Sallie B. Armstrong, Esq. Downey Brand 427 West Plumb Lane Reno, NV 89509 Tel: (775) 329-5900 Fax: (775) 786-5443 E-mail: sarmstrong@downeybrand.com Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $10,000,001 to $50,000,000 The petition was signed by Nello Gonfiantini III, company's president and CEO. The Debtor did not file its list of largest unsecured creditors when it filed its petition. Debtor-affiliate that filed separate Chapter 11 petitions: Entity Case No. Petition Date ------ -------- ------------- Specialty Trust, Inc. 10-51432 04/20/10 Assets: $100-mil. to $500-mil. Debts: $50-mil. to $100-mil. SAC II 10-51440 04/20/10 Assets: $10-mil. to $50-mil. Debts: $1-mil. to $10-mil. SPECIALTY TRUST: Voluntary Chapter 11 Case Summary -------------------------------------------------- Debtor: Specialty Trust, Inc. 6160 Plumas Street, Suite 200 Reno, NV 89519 Bankruptcy Case No.: 10-51432 Chapter 11 Petition Date: April 20, 2010 Court: United States Bankruptcy Court District of Nevada (Reno) Judge: Gregg W. Zive Debtor's Counsel: Sallie B. Armstrong, Esq. Downey Brand 427 West Plumb Lane Reno, NV 89509 Tel: (775) 329-5900 Fax: (775) 786-5443 E-mail: sarmstrong@downeybrand.com Estimated Assets: $100,000,001 to $500,000,000 Estimated Debts: $50,000,001 to $100,000,000 The petition was signed by Nello Gonfiantini III, company's president and CEO. The Debtor did not file its list of largest unsecured creditors when it filed its petition. Debtor-affiliate that filed separate Chapter 11 petition: Petition Debtor Case No. Date ------ -------- ---- Specialty Acquisition Corp. 10-51437 04/20/10 Assets: $10-mil. to $50-mil. Debts: $10-mil. to $50-mil. SAC II 10-51440 04/20/10 Assets: $10-mil. to $50-mil. Debts: $1-mil. to $10-mil. STANDARD PACIFIC CORP: Post $5.1 Mil. Net Loss for 1st Quarter -------------------------------------------------------------- Standard Pacific Corp. reported operating results for its first quarter ended March 31, 2010. The company balance sheet for March 31, 2010, showed $1.7 billion and $1.3 billion, for a $400 million stockholders' equity. The Company generated a net loss of $5.1 million, or $0.02 per diluted share, for the 2010 first quarter compared to a net loss of $49.5 million, or $0.21 per diluted share, for the year earlier period. The primary drivers of the improved operating performance were higher gross margins, reduced asset impairments, higher average sales price and lower overhead costs. The 2009 first quarter results included $30.8 million of asset impairment charges, $14.1 million of restructuring charges and a $5.2 million gain on the early extinguishment of debt. The 2010 first quarter did not include any asset impairment or restructuring charges. Homebuilding revenues for the 2010 first quarter were $175.4 million, down 16% from $209.5 million for the 2009 first quarter. The decrease in homebuilding revenues was driven primarily by a 22% decline in new home deliveries to 537 homes. The decrease in deliveries was partially due to the significant reduction in the number of completed and unsold homes available for sale at the beginning of the 2010 first quarter as compared to the year earlier period and, to a lesser extent, a 7% decline in the 2010 first quarter beginning backlog as compared to the prior year period. The decline in deliveries was partially offset by a 9% increase in consolidated average home price to $326,000, largely due to a greater proportion of homes delivered within California during the quarter as compared to the 2009 first quarter. Gross margin from home sales for the 2010 first quarter was 22.7% versus an adjusted gross margin from home sales for the year earlier period of 17.4. The 530 basis point improvement in the 2010 first quarter gross margin from home sales was primarily the result of a larger mix of California deliveries, lower direct construction costs and, to a lesser extent, price increases in California. Excluding impairments and previously capitalized interest costs, gross margin from home sales for the 2010 first quarter was 29.2% versus 23.7% for the 2009 first quarter. The Company's 2010 first quarter SG&A expenses decreased $19.6 million, or 37%, to $32.8 million from $52.4 million in the 2009 first quarter. The Company's 2009 first quarter SG&A expenses included $12.0 million in restructuring charges related to severance and lease terminations. The Company's 2010 first quarter SG&A rate from home sales was 18.7% versus an adjusted rate of 19.6%. The reduction in the Company's SG&A expenses was primarily the result of lower personnel costs, commissions and model costs. The Company generated $33.6 million of cash flows from operations for the 2010 first quarter versus $129.0 million for the year earlier period. The decline in cash flows as compared to the 2009 first quarter was driven primarily by a $47.1 million increase in land purchases and a 22% decline in deliveries resulting from a decrease in the number of unsold completed and under construction homes available for sale as of December 31, 2009 as compared to December 31, 2008. Cash flows from operations for the three months ended March 31, 2010 and 2009 included $50.8 million and $3.7 million, respectively, of land purchases and $108 million and $114 million, respectively, of federal tax refunds. Excluding land purchases and sales, cash flows from operations for the 2010 first quarter were $83.9 million* versus $132.1 million* in the year earlier period. Net new orders for the 2010 first quarter increased 3% from the 2009 first quarter to 759 homes, despite a 20% decrease in the number of average active selling communities, from 158 to 126. The Company's monthly sales absorption rate for the 2010 first quarter was 2.0 per community compared to 1.5 per community for the 2009 first quarter. The Company's cancellation rate for the 2010 first quarter was 15% versus 24% for the 2009 first quarter and 21% for the 2009 fourth quarter. The total number of sales cancellations for the 2010 first quarter was 133, of which 60 cancellations related to homes in the Company's 2010 first quarter beginning backlog and 73 related to orders generated during the quarter. The dollar value of the Company's backlog increased 31% to $278.3 million, or 821 homes, compared to $212.2 million, or 689 homes, for the 2009 first quarter. The increase in backlog value was driven primarily by an increase in the number and average price of California homes in backlog and, to a lesser extent, increased sales during the quarter. During the 2010 first quarter, the Company 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. Approximately 56% of the approved purchases are transactions with developers and 25% with banks. During the same period, the Company purchased approximately 940 lots valued at $51 million. Approximately 42% of the $51 million in land purchases related to land located in California and 37% in the Carolinas, with the balance spread throughout the Company's other operations. As of March 31, 2010, the Company had outstanding approximately $179 million of approved land purchases and option contracts, of which $113 million is expected to be purchased in 2010 and $66 million expected to be purchased in 2011 and beyond. Ken Campbell, the Company's President and CEO commented, "I am pleased with our strong gross margins and reduced spending on overhead. I am also encouraged by the growth in our land opportunities at prices that meet our return thresholds." A full-text copy of the company's earnings release is available for free at http://ResearchArchives.com/t/s?607f Based in Irvine, California, Standard Pacific Corp. (NYSE: SPF) -- http://www.standardpacifichomes.com/-- one of the nation's largest homebuilders, has built more than 108,000 homes during its 43-year history. The Company constructs homes within a wide range of price and size targeting a broad range of homebuyers. Standard Pacific operates in many of the largest housing markets in the country with operations in major metropolitan areas in California, Florida, Arizona, the Carolinas, Texas, Colorado and Nevada. The Company provides mortgage financing and title services to its homebuyers through its subsidiaries and joint ventures, Standard Pacific Mortgage, Inc. and SPH Title. As of December 31, 2009, the Company had $1.861 billion in total assets against $1.421 billion in total liabilities. * * * Standard & Poor's Ratings Services raised its corporate credit rating on Irvine, Calif.-based homebuilder Standard Pacific Corp. to 'B' from 'CCC+'. The upgrade acknowledges improvement in the company's cost structure, as well as previous success in addressing near-term maturity risk. At the same time, S&P raised its ratings on $872 million of senior and subordinated notes and revised its outlook on the company to stable from positive. STERLING MINING: Silver Opportunity's $24MM Wins Auction -------------------------------------------------------- Sterling Mining Company disclosed that court papers will be filed shortly seeking to approve a successful $24.0 million bid for the assets and stock of Sterling Mining Company, the operator of the historic Sunshine Mine. Sterling Mining Company has been reorganizing for the last year under Chapter 11 in the United States Bankruptcy Court for the District of Idaho. The successful bidder -- with a cash price of $24.0 million -- was Silver Opportunity Partners LLC. Michael Williams, President of Silver Opportunity Partners LLC commented on the successful bid: "Silver Opportunity Partners is very pleased to be the successful bidder for the Sunshine Mine. We not only have great respect for the historic significance of the Sunshine Mine but also share with the community a keen regard for the mine's importance to the economic future of the region. As such we intend to honor the Sunshine Mine's legacy with a strong commitment to its rehabilitation in a manner that is both environmentally sensitive and developmentally sustainable. In that effort, we look forward to working constructively and proactively with the Coeur d'Alene community upon approval of the legal process by the US Bankruptcy Court for the District of Idaho." Sterling Mining Company believes that the sale to Silver Opportunity Partners LLC will be of great benefit to the bankruptcy estate, as well as to the entire Silver Valley. The backup bidder is Minco Silver Corporation (MSV.TO). Minco is a Canadian silver mining firm, which is a creditor of Sterling Mining Company. Also participating in the auction was Alberta Star Development Corp. (TSXV-ASX), another Canadian firm. "We will be seeking approval of the sale process on May 3, 2010, in the Bankruptcy Court for the District of Idaho, and both Sterling Mining Company and Silver Opportunity Partners LLC hope to close the transaction shortly thereafter," stated Robert Higdem, CEO of Sterling Mining Company. Mr. Higdem also noted that the auction justified the faith of many investors and employees of Sterling Mining Company who have held on during the very difficult reorganization process. It is anticipated that through the bankruptcy reorganization process, distribution to Sterling Mining Company's creditors, and possibly distribution to shareholders, could occur before the end of 2010. 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. STEVEN SCHULTZ: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Steven Stuart Schultz dba Red Sky Cafe fdba SSS Hospitality, LLC 4255 North Alvernon Way Tucson, AZ 85718 Bankruptcy Case No.: 10-11542 Chapter 11 Petition Date: April 20, 2010 Court: United States Bankruptcy Court District of Arizona (Tucson) Judge: Eileen W. Hollowell Debtor's Counsel: Eric Slocum Sparks, Esq. Eric Slocum Sparks PC 110 S Church Ave. #2270 Tucson, AZ 85701 Tel: (520) 623-8330 Fax: (520) 623-9157 E-mail: eric@ericslocumsparkspc.com Scheduled Assets: $368,900 Scheduled Debts: $1,654,885 A list of the Company's 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/azb10-11542.pdf The petition was signed by Steven Stuart Schultz. STEVENS MASONRY: Voluntary Chapter 11 Case Summary -------------------------------------------------- Debtor: Stevens Masonry & Concrete, Inc. 6542 Sherry Lane Saint Augustine, FL 32095-6837 Bankruptcy Case No.: 10-03275 Chapter 11 Petition Date: April 20, 2010 Court: United States Bankruptcy Court Middle District of Florida (Jacksonville) Debtor's Counsel: Lerone Thurston, Esq. Rusty Law LLC 3700 US Highway 1 South St. Augustine, FL 32092 Tel: (904) 797-9600 Fax: (888) 395-5034 E-mail: lerone@rustylaw.com Estimated Assets: $500,001 to $1,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of its largest unsecured creditors together with its petition. The petition was signed by Thomas M. Stevens, president. STONEYBROOK CREEK: Case Summary & 3 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Stoneybrook Creek, LLC 5413 Pinnacle Point Dr. Rogers, AR 72758 Bankruptcy Case No.: 10-72045 Chapter 11 Petition Date: April 20, 2010 Court: United States Bankruptcy Court Western District of Arkansas (Fayetteville) Debtor's Counsel: Stanley V. Bond, Esq. P.O. Box 1893 Fayetteville, AR 72701-1893 Tel: (479) 444-0255 Fax: (479) 444-7141 E-mail: attybond@me.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $10,000,001 to $50,000,000 A list of the Company's 3 largest unsecured creditors is available for free at http://bankrupt.com/misc/arwb10-72045.pdf The petition was signed by Bill Schwyhart, manager. TARRAGON CORPORATION: DIP Loan to Pay Westminster Approved ---------------------------------------------------------- The U.S. Bankruptcy Court for the District of New Jersey authorized, on a final basis, Tarragon Corporation, et al., to obtain credit and incur debt amounting to $4,820,000 from UTA Capital LLC. The Debtors will use the money to (a) pay Westminster DIP Funding in full satisfaction of its DIP loan; and (b) pay fees due to the DIP lender. The Debtors were unable to obtain unsecured and secured credit on more favorable terms than those provided by the DIP lender. The DIP lender agreed to extend loan to the Debtors on a 15% interest per annum. As adequate protection for any diminution in value of the lender's collateral, the Debtors will grant the DIP lender first priority perfected liens and security interests on property and assets of the Debtors' estates and superpriority administrative expense claim, subject to carve out. Pursuant to the agreement, it would be an event of default if the Debtors fail to obtain order confirming the Plan of Reorganization by June 15, 2010. The Debtors are represented by: Cole Schotz Meisel Forman & Leonard, P.A. Court Plaza North 25 Main Street, P.O. Box 800 Hackensack, NJ 07602-0800 Tel: (201) 489-3000 Fax: (201) 489-1536 http://www.coleschotz.com Based in New York City, Tarragon Corporation (NasdaqGS:TARR) -- http://www.tarragoncorp.com/-- is a leading developer of multifamily housing for rent and for sale. Tarragon's operations are concentrated in the Northeast, Florida, Texas, and Tennessee. Tarragon and its affiliates filed for Chapter 11 protection on January 12, 2009 (Bankr. D. N.J. Case No. 09-10555). The Hon. Donald H. Steckroth presides over the case. Michael D. Sirota, Esq., Warren A. Usatine, Esq., and Felice R. Yudkin, Esq., at Cole Schotz Meisel Forman & Leonard, P.A. TEKOIL & GAS: Plan of Reorganization Wins Court Approval -------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Texas confirmed Tekoil & Gas Corporation and Tekoil & Gas Gulf Coast, LLC's third amended Plan of Reorganization. As reported in the Troubled Company Reporter on Feb. 12, 2010, according to the amended Disclosure Statement, the Plan holders of Class 6A - General Unsecured Claims against Tekoil($42,048,876) and Class 6B - General Unsecured Claims against Gulf Coast ($33,824,809) will receive from the creditor trust in full satisfaction, release and discharge of and in exchange for the claim, a pro rata share of the distributions available for Class 6 creditors from the creditor trust. A full-text copy of the Disclosure Statement is available for free at http://bankrupt.com/misc/TEkoil&Gas_DS.pdf Based in Houston, Tekoil & Gas Corporation and its subsidiaries -- http://www.tekoil.com/-- own interests in four oil and gas properties, including the Trinity Bay, Redfish Reef, Fishers Reef, and North Point Bolivar fields located in Galveston Bay, Texas. The company was incorporated in Florida in 2004. Edward L. Rothberg, Esq., at Weycer Kaplan Pulaski & Zuber, Nancy Lee Ribaudo, Esq., and Patrick J. Neligan, Jr., Esq., at Neligan Foley LLP, represent the Debtors as counsel. David Ronald Jones, Esq., John F. Higgins, Esq., and Joshua Nielson Eppich, Esq., at Porter & Hedges, LLP, represent the Official Committee of Unsecured Creditors of Tekoil & Gas Corp. as counsel. When Tekoil & Gas Corp. filed for protection from its creditors, it listed assets of $10 million to $50 million, and liabilities of $10 million to $50 million. Based in Spring, Texas, Tekoil and Gas Gulf Coast, LLC is an acquisition subsidiary of Tekoil & Gas Corp. Tekoil & Gas Corporation filed for Chapter 11 protection on June 10, 2008 (Bankr. S.D. Tex. Case No. 08-80270). Tekoil and Gas Gulf Coast filed a separate petition for Chapter 11 relief on Aug. 29, 2008 (Bankr. S.D. Tex. Case No. 08-80405). Nancy Lee Ribaudo, Esq., and Patrick J. Neligan, Jr. at Neligan Foley LLP, represent Tekoil and Gas Gulf Coast as counsel. On October 1, 2008, the Court ordered the joint administration of the Debtors' bankruptcy cases. TRACY MANAGEMENT: Voluntary Chapter 11 Case Summary --------------------------------------------------- Debtor: Tracy Management Corporation 1001 Sutton Road Shavertown, PA 18708 Bankruptcy Case No.: 10-03277 Chapter 11 Petition Date: April 20, 2010 Court: U.S. Bankruptcy Court Middle District of Pennsylvania (Wilkes-Barre) Judge: Robert N. Opel II Debtor's Counsel: Robert E Chernicoff, Esq. Cunningham and Chernicoff PC 2320 North Second Street Harrisburg, PA 17110 Tel: (717) 238-6570 Fax: (717) 238-4809 E-mail: rec@cclawpc.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $0 to $50,000 The Company did not file a list of creditors together with its petition. The petition was signed by Harold C. Snowdon, Jr., president. Debtor-affiliate that filed separate Chapter 11 petition: Entity Case No. Petition Date ------ -------- ------------- Harold C. Snowdon, Jr. 09-08864 11/13/09 TYLER FRAZIER: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Joint Debtors: Tyler Frazier Andrea Frazier 719 Morgan Ave. Ontario, OR 97914 Bankruptcy Case No.: 10-01101 Chapter 11 Petition Date: April 20, 2010 Court: United States Bankruptcy Court District of Idaho [LIVE] (Boise) Debtor's Counsel: Michael A Hall, Esq. 660 E. Franklin Road, Suite 220 Meridian, ID 83642 Tel: (208) 884-1995 Fax: (208) 460-1995 E-mail: mike@idahoblg.com Scheduled Assets: $479,876 Scheduled Debts: $2,262,957 A list of the Company's 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/idb10-01101.pdf The petition was signed by Tyler Frazier and Andrea Frazier. UAL CORP: US Airways Discontinues Merger Talks ---------------------------------------------- US Airways Group, Inc., on Thursday said it has discontinued recent discussions with UAL Corporation regarding a potential merger between the two companies. US Airways Chairman and CEO Doug Parker said, "US Airways has long been a proponent for consolidation in our industry. As opportunities have arisen for our company to participate in consolidation, we have taken a close and careful look at our options, always with an eye on what is in the best interests of our shareholders, customers, employees and the communities we serve. "We have recently held discussions with United Airlines regarding a possible combination between our two airlines. After an extensive review and careful consideration, our Board of Directors has decided to discontinue those discussions. "While it is our policy not to comment on rumors concerning strategic transactions, because of the persistent rumors about a possible transaction with United Airlines we believe it is appropriate to clarify the status of those negotiations. In the future, we will continue to follow our policy of not commenting on potential strategic transactions until we have entered into a definitive agreement with respect to a specific transaction. "It remains our belief that consolidation makes sense in an industry as fragmented as ours. Whether we participate or not, consolidation that leads to a more efficient industry better able to withstand economic volatility, global competition and the cyclical nature of our industry is a positive outcome. "The US Airways team is doing an outstanding job of running a reliable airline, taking care of our customers and keeping our costs down. We are well along the road to near-term profitability and are well-positioned for sustainable, long-term success. As the industry becomes less fragmented and more stable, everyone will benefit." * * * According to The Wall Street Journal's Susan Carey, US Airways' withdrawal clears the way for United to focus on talks with Continental Airlines Inc. over a possible combination. But Ms. Carey notes US Airways' exit reduces the pressure on Continental to consummate such a deal. Ms. Carey reports that one person familiar with the matter said the recent United-US Airways talks were "deep and earnest" and uncovered synergies from cutting costs and capturing added revenue. Ms. Carey relates another person familiar with the matter said the airlines couldn't agree on the exchange ratio in a share swap or who would run a combined entity. The Journal's source also said US Airways directors "didn't feel like waiting around" and didn't want to "provide more leverage for United in [the Continental] discussions." According to the Journal, two people with knowledge of the matter said Continental was caught off-guard by media reports that United and US Airways were in deep talks. Those two sources told the Journal that Jeff Smisek, Continental's new CEO, called Glenn Tilton, his counterpart at UAL, late last week and due diligence was begun on a potential deal that would be a stock swap. But given what happened two years ago, when Continental rejected United as a partner, everyone is proceeding cautiously, the sources told the Journal, adding talks could break down. About Continental Airlines Continental Airlines Inc. (NYSE: CAL) -- http://www.continental.com/-- is the world's fifth largest airline. Continental, together with Continental Express and Continental Connection, has more than 2,400 daily departures throughout the Americas, Europe and Asia, serving 130 domestic and 132 international destinations. Continental is a member of Star Alliance, which provides access to more than 900 additional points in 169 countries via 24 other member airlines. With more than 41,000 employees, Continental has hubs serving New York, Houston, Cleveland and Guam, and together with its regional partners, carries roughly 63 million passengers per year. At December 31, 2009, Continental had total assets of $12.781 billion against total current liabilities of $4.389 billion; long-term debt and capital leases of $5.291 billion; deferred income taxes of $203 million; accrued pension liability of $1.248 billion; accrued retiree medical benefits of $216 million; and other liabilities of $844 million. At December 31, 2009, the Company had accumulated deficit of $442 million, accumulated other comprehensive loss of $1.185 billion and stockholders' equity of $590 million. The December 31 balance sheet showed strained liquidity: Continental had total current assets of $4.373 billion against total current liabilities of $4.389 billion. * * * As reported by the Troubled Company Reporter on September 4, 2009, Standard & Poor's Ratings Services lowered its issue-level ratings on all senior unsecured debt of Continental to 'CCC+' from 'B-' and revised the recovery ratings on certain unsecured debt issues, excluding industrial revenue bonds, to '6' from '5'. At the same time, S&P affirmed its 'B' corporate credit rating and secured debt ratings on Continental. The ratings on Continental's unsecured debt are based principally on declining aircraft values caused by the global aviation downturn. This could result in reduced asset protection for unsecured creditors if Continental were to file for bankruptcy. Continental continues to carry Moody's Investors Service's B2 corporate family and Fitch Ratings' 'B-' Issuer Default Rating and 'CC/RR6' from 'CCC/RR6' senior unsecured rating. About UAL Corporation Based in Chicago, Illinois, UAL Corporation (NASDAQ: UAUA) -- http://www.united.com/-- is the holding company for United Airlines, Inc. United Airlines is the world's second largest air carrier. The airline flies to Brazil, Korea and Germany. The company filed for Chapter 11 protection on Dec. 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191). James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and Steven R. Kotarba, Esq., at Kirkland & Ellis, represented the Debtors in their restructuring efforts. Fruman Jacobson, Esq., at Sonnenschein Nath & Rosenthal LLP represented the Official Committee of Unsecured Creditors. Judge Eugene R. Wedoff confirmed a reorganization plan for United on Jan. 20, 2006. The Company emerged from bankruptcy on Feb. 1, 2006. Reorganized UAL Corp. carries a 'Caa1' probability of default rating from Moody's, 'B-' long term foreign issuer credit rating from Standard & Poor's, and 'CCC' long term issuer default rating from Fitch. 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. UAL CORP: Continental Said to Weigh No-Premium Stock Deal --------------------------------------------------------- UAL Corp.'s United Airlines and Continental Airlines Inc. are considering a stock-for-stock merger with no market premium Bloomberg News reports, citing two people with knowledge of the talks. According to Bloomberg, the people familiar with the private talks said that under the merger UAL Chief Executive Officer Glenn Tilton, 62, would become chairman while Continental CEO Jeff Smisek, 55, would become CEO. The terms aren't final and a deal may be more than a week away, the people said. Bloomberg News said at merger would create a company valued at more than $6 billion. Putting together United and Continental would create the world's largest carrier by passenger traffic, surpassing Delta Air Lines Inc. The discussions were described after US Airways Group Inc. said it had ended merger talks with United, leaving United and Continental as the focus of industry consolidation. About Continental Airlines Continental Airlines Inc. (NYSE: CAL) -- http://www.continental.com/-- is the world's fifth largest airline. Continental, together with Continental Express and Continental Connection, has more than 2,400 daily departures throughout the Americas, Europe and Asia, serving 130 domestic and 132 international destinations. Continental is a member of Star Alliance, which provides access to more than 900 additional points in 169 countries via 24 other member airlines. With more than 41,000 employees, Continental has hubs serving New York, Houston, Cleveland and Guam, and together with its regional partners, carries roughly 63 million passengers per year. At December 31, 2009, Continental had total assets of $12.781 billion against total current liabilities of $4.389 billion; long-term debt and capital leases of $5.291 billion; deferred income taxes of $203 million; accrued pension liability of $1.248 billion; accrued retiree medical benefits of $216 million; and other liabilities of $844 million. At December 31, 2009, the Company had accumulated deficit of $442 million, accumulated other comprehensive loss of $1.185 billion and stockholders' equity of $590 million. The December 31 balance sheet showed strained liquidity: Continental had total current assets of $4.373 billion against total current liabilities of $4.389 billion. * * * As reported by the Troubled Company Reporter on September 4, 2009, Standard & Poor's Ratings Services lowered its issue-level ratings on all senior unsecured debt of Continental to 'CCC+' from 'B-' and revised the recovery ratings on certain unsecured debt issues, excluding industrial revenue bonds, to '6' from '5'. At the same time, S&P affirmed its 'B' corporate credit rating and secured debt ratings on Continental. The ratings on Continental's unsecured debt are based principally on declining aircraft values caused by the global aviation downturn. This could result in reduced asset protection for unsecured creditors if Continental were to file for bankruptcy. Continental continues to carry Moody's Investors Service's B2 corporate family and Fitch Ratings' 'B-' Issuer Default Rating and 'CC/RR6' from 'CCC/RR6' senior unsecured rating. About UAL Corporation Based in Chicago, Illinois, UAL Corporation (NASDAQ: UAUA) -- http://www.united.com/-- is the holding company for United Airlines, Inc. United Airlines is the world's second largest air carrier. The airline flies to Brazil, Korea and Germany. The company filed for Chapter 11 protection on Dec. 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191). James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and Steven R. Kotarba, Esq., at Kirkland & Ellis, represented the Debtors in their restructuring efforts. Fruman Jacobson, Esq., at Sonnenschein Nath & Rosenthal LLP represented the Official Committee of Unsecured Creditors. Judge Eugene R. Wedoff confirmed a reorganization plan for United on Jan. 20, 2006. The Company emerged from bankruptcy on Feb. 1, 2006. Reorganized UAL Corp. carries a 'Caa1' probability of default rating from Moody's, 'B-' long term foreign issuer credit rating from Standard & Poor's, and 'CCC' long term issuer default rating from Fitch. 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. UAL CORP: Boeing 777s Upgraded to Add New Perks ----------------------------------------------- United Air Lines, Inc., is upgrading the look of its Boeing 777 aircraft used in certain overseas flights to add perks like video on demand for passengers flying in cheap seats, Julie Johnsson of Chicago Tribune reports. Ms. Johnsson says the upgrade is in light of United's aim to improve passengers' on-board experience and to bring its service closer to that of overseas carriers, including Emirates and Singapore Airlines. United derives much of its profit from international flights, she notes. United is also adding about 21 seats to its Economy Plus cabin and two extra seats in coach, Ms. Johnsson says. This shift reflects travel policies adopted by many companies that require employees to fly in coach rather than in business class, she explains. About UAL Corporation Based in Chicago, Illinois, UAL Corporation (NASDAQ: UAUA) -- http://www.united.com/-- is the holding company for United Airlines, Inc. United Airlines is the world's second largest air carrier. The airline flies to Brazil, Korea and Germany. The company filed for Chapter 11 protection on Dec. 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191). James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and Steven R. Kotarba, Esq., at Kirkland & Ellis, represented the Debtors in their restructuring efforts. Fruman Jacobson, Esq., at Sonnenschein Nath & Rosenthal LLP represented the Official Committee of Unsecured Creditors. Judge Eugene R. Wedoff confirmed a reorganization plan for United on Jan. 20, 2006. The Company emerged from bankruptcy on Feb. 1, 2006. Reorganized UAL Corp. carries a 'Caa1' probability of default rating from Moody's, 'B-' long term foreign issuer credit rating from Standard & Poor's, and 'CCC' long term issuer default rating from Fitch. UAL CORP: Circuit Court Affirms Denial of Carr Late Appeal ---------------------------------------------------------- To recall, Judge John W. Darrah of the U.S. District Court for the Northern District of Illinois affirmed the U.S. Bankruptcy Court for the Northern District of Illinois' refusal to allow Phyllis Carr's late appeal. Judges Frank H. Easterbrook, Richard D. Cudahy and Ilana Diamond Rovner of the U.S. Court of Appeals of the Seventh Circuit affirmed the District Court's order refusing to allow Ms. Carr's Appeal. The Circuit Court panel of judges held that under Rule 8002(c)(2) of the Federal Rules of Bankruptcy Procedure, a bankruptcy court can extend a 10-day limit for filing a notice of appeal only if the movant establishes excusable neglect. The Bankruptcy Court reasoned that Ms. Carr's reliance on her counsel to file a timely appeal was not excusable because she knew three months earlier that her counsel was ill and scaling back her caseload, the Circuit Court noted. Like any client, Ms. Carr is accountable for the inattentiveness of her attorney, the Circuit Court averred. Aware that her lawyer's reliability was questioned, Ms. Carr remained with that lawyer, a decision that was entirely within her control, the Circuit Court further opined. As the Bankruptcy Court found, Ms. Carr cited no reason for her late filing of an appeal other than the illness known to her when she filed her pro se motion to vacate three months earlier, the Circuit Court pointed out. Under those circumstances, the Bankruptcy Court did not abuse its discretion to allow a tardy appeal, the Circuit Court held. A three-page copy of a Non-Precedential Disposition entered by the Circuit Court on December 10, 2009 is available for free at: http://bankrupt.com/misc/UAL_Dec10CircuitDecision.pdf About UAL Corporation Based in Chicago, Illinois, UAL Corporation (NASDAQ: UAUA) -- http://www.united.com/-- is the holding company for United Airlines, Inc. United Airlines is the world's second largest air carrier. The airline flies to Brazil, Korea and Germany. The company filed for Chapter 11 protection on Dec. 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191). James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and Steven R. Kotarba, Esq., at Kirkland & Ellis, represented the Debtors in their restructuring efforts. Fruman Jacobson, Esq., at Sonnenschein Nath & Rosenthal LLP represented the Official Committee of Unsecured Creditors. Judge Eugene R. Wedoff confirmed a reorganization plan for United on Jan. 20, 2006. The Company emerged from bankruptcy on Feb. 1, 2006. Reorganized UAL Corp. carries a 'Caa1' probability of default rating from Moody's, 'B-' long term foreign issuer credit rating from Standard & Poor's, and 'CCC' long term issuer default rating from Fitch. UAL CORP: Offers Salary Increase to Flight Attendants ----------------------------------------------------- United Air Lines, Inc., said it would bring its flight attendants up to the pay scale of their counterparts at Continental Airlines Inc. in exchange for changes in work rules, Joshua Freed of The Associated Press reports. Doug McKeen, United's senior vice president for labor relations, disclosed in a letter to flight attendants that certain experienced flight attendants would get raises of more than 10% if they were brought up to the pay of those at Continental, AP notes. In turn, United wants concessions like more flexibility over which hotels flight attendants stay at, and reductions in benefits earned by flight attendants who trade their flying time, AP says. Mr. McKeen was quoted in the Letter as saying that the reason Continental can afford to pay those rates is that the airline enjoys significant advantages over United in the areas of work rules and benefit costs, AP discloses. United is also using Continental's contract as a basis for a new agreement at United, AP relates, citing the Letter. As previously reported, United flight attendants protested over United's failure to negotiate a new contract, negotiations of which began on April 6, 2009. Greg Davidowitch, head of the Association of Flight Attendants-CWA at United, said in a public statement that United has not made a formal wage proposal, AP relates. In the statement, he added, "We will not agree to the wholesale destruction of portions of our contract to pay for any perceived improvements." About UAL Corporation Based in Chicago, Illinois, UAL Corporation (NASDAQ: UAUA) -- http://www.united.com/-- is the holding company for United Airlines, Inc. United Airlines is the world's second largest air carrier. The airline flies to Brazil, Korea and Germany. The company filed for Chapter 11 protection on Dec. 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191). James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and Steven R. Kotarba, Esq., at Kirkland & Ellis, represented the Debtors in their restructuring efforts. Fruman Jacobson, Esq., at Sonnenschein Nath & Rosenthal LLP represented the Official Committee of Unsecured Creditors. Judge Eugene R. Wedoff confirmed a reorganization plan for United on Jan. 20, 2006. The Company emerged from bankruptcy on Feb. 1, 2006. Reorganized UAL Corp. carries a 'Caa1' probability of default rating from Moody's, 'B-' long term foreign issuer credit rating from Standard & Poor's, and 'CCC' long term issuer default rating from Fitch. UAL CORP: Satisfies Escrow Condition on Two Private Offerings ------------------------------------------------------------- United Air Lines said it satisfied the escrow conditions and the proceeds from the two private offerings on January 15, 2010 consisting of $500,000,000 aggregate principal amount of 9.875% Senior Secured Notes due 2013 and $200,000,000 aggregate principal amount of 12.000% Senior Second Lien Notes due 2013, were released from escrow. In addition, United entered into the Priority Lien Security Agreement dated as of April 19, 2010 between United and Wilmington Trust FSB, as collateral trustee and the Junior Lien Security Agreement dated as of April 19, 2010, between United and the Collateral Trustee, perfecting its interest in the collateral securing United's obligations under the Notes in favor of the Collateral Trustee. A full-text copy of the junior agreement is available for free at http://ResearchArchives.com/t/s?6080 A full-text copy of the junior lien security agreement is available for free at http://ResearchArchives.com/t/s?6081 About UAL Corporation Based in Chicago, Illinois, UAL Corporation (NASDAQ: UAUA) -- http://www.united.com/-- is the holding company for United Airlines, Inc. United Airlines is the world's second largest air carrier. The airline flies to Brazil, Korea and Germany. The company filed for Chapter 11 protection on Dec. 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191). James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and Steven R. Kotarba, Esq., at Kirkland & Ellis, represented the Debtors in their restructuring efforts. Fruman Jacobson, Esq., at Sonnenschein Nath & Rosenthal LLP represented the Official Committee of Unsecured Creditors. Judge Eugene R. Wedoff confirmed a reorganization plan for United on Jan. 20, 2006. The Company emerged from bankruptcy on Feb. 1, 2006. Reorganized UAL Corp. carries a 'Caa1' probability of default rating from Moody's, 'B-' long term foreign issuer credit rating from Standard & Poor's, and 'CCC' long term issuer default rating from Fitch. US AIRWAYS: Discontinues Merger Talks with United ------------------------------------------------- US Airways Group, Inc., on Thursday said it has discontinued recent discussions with UAL Corporation regarding a potential merger between the two companies. US Airways Chairman and CEO Doug Parker said, "US Airways has long been a proponent for consolidation in our industry. As opportunities have arisen for our company to participate in consolidation, we have taken a close and careful look at our options, always with an eye on what is in the best interests of our shareholders, customers, employees and the communities we serve. "We have recently held discussions with United Airlines regarding a possible combination between our two airlines. After an extensive review and careful consideration, our Board of Directors has decided to discontinue those discussions. "While it is our policy not to comment on rumors concerning strategic transactions, because of the persistent rumors about a possible transaction with United Airlines we believe it is appropriate to clarify the status of those negotiations. In the future, we will continue to follow our policy of not commenting on potential strategic transactions until we have entered into a definitive agreement with respect to a specific transaction. "It remains our belief that consolidation makes sense in an industry as fragmented as ours. Whether we participate or not, consolidation that leads to a more efficient industry better able to withstand economic volatility, global competition and the cyclical nature of our industry is a positive outcome. "The US Airways team is doing an outstanding job of running a reliable airline, taking care of our customers and keeping our costs down. We are well along the road to near-term profitability and are well-positioned for sustainable, long-term success. As the industry becomes less fragmented and more stable, everyone will benefit." * * * According to The Wall Street Journal's Susan Carey, US Airways' withdrawal clears the way for United to focus on talks with Continental Airlines Inc. over a possible combination. But Ms. Carey notes US Airways' exit reduces the pressure on Continental to consummate such a deal. Ms. Carey reports that one person familiar with the matter said the recent United-US Airways talks were "deep and earnest" and uncovered synergies from cutting costs and capturing added revenue. Ms. Carey relates another person familiar with the matter said the airlines couldn't agree on the exchange ratio in a share swap or who would run a combined entity. The Journal's source also said US Airways directors "didn't feel like waiting around" and didn't want to "provide more leverage for United in [the Continental] discussions." According to the Journal, two people with knowledge of the matter said Continental was caught off-guard by media reports that United and US Airways were in deep talks. Those two sources told the Journal that Jeff Smisek, Continental's new CEO, called Glenn Tilton, his counterpart at UAL, late last week and due diligence was begun on a potential deal that would be a stock swap. But given what happened two years ago, when Continental rejected United as a partner, everyone is proceeding cautiously, the sources told the Journal, adding talks could break down. About Continental Airlines Continental Airlines Inc. (NYSE: CAL) -- http://www.continental.com/-- is the world's fifth largest airline. Continental, together with Continental Express and Continental Connection, has more than 2,400 daily departures throughout the Americas, Europe and Asia, serving 130 domestic and 132 international destinations. Continental is a member of Star Alliance, which provides access to more than 900 additional points in 169 countries via 24 other member airlines. With more than 41,000 employees, Continental has hubs serving New York, Houston, Cleveland and Guam, and together with its regional partners, carries roughly 63 million passengers per year. At December 31, 2009, Continental had total assets of $12.781 billion against total current liabilities of $4.389 billion; long-term debt and capital leases of $5.291 billion; deferred income taxes of $203 million; accrued pension liability of $1.248 billion; accrued retiree medical benefits of $216 million; and other liabilities of $844 million. At December 31, 2009, the Company had accumulated deficit of $442 million, accumulated other comprehensive loss of $1.185 billion and stockholders' equity of $590 million. The December 31 balance sheet showed strained liquidity: Continental had total current assets of $4.373 billion against total current liabilities of $4.389 billion. * * * As reported by the Troubled Company Reporter on September 4, 2009, Standard & Poor's Ratings Services lowered its issue-level ratings on all senior unsecured debt of Continental to 'CCC+' from 'B-' and revised the recovery ratings on certain unsecured debt issues, excluding industrial revenue bonds, to '6' from '5'. At the same time, S&P affirmed its 'B' corporate credit rating and secured debt ratings on Continental. The ratings on Continental's unsecured debt are based principally on declining aircraft values caused by the global aviation downturn. This could result in reduced asset protection for unsecured creditors if Continental were to file for bankruptcy. Continental continues to carry Moody's Investors Service's B2 corporate family and Fitch Ratings' 'B-' Issuer Default Rating and 'CC/RR6' from 'CCC/RR6' senior unsecured rating. About UAL Corporation Based in Chicago, Illinois, UAL Corporation (NASDAQ: UAUA) -- http://www.united.com/-- is the holding company for United Airlines, Inc. United Airlines is the world's second largest air carrier. The airline flies to Brazil, Korea and Germany. The company filed for Chapter 11 protection on Dec. 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191). James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and Steven R. Kotarba, Esq., at Kirkland & Ellis, represented the Debtors in their restructuring efforts. Fruman Jacobson, Esq., at Sonnenschein Nath & Rosenthal LLP represented the Official Committee of Unsecured Creditors. Judge Eugene R. Wedoff confirmed a reorganization plan for United on Jan. 20, 2006. The Company emerged from bankruptcy on Feb. 1, 2006. Reorganized UAL Corp. carries a 'Caa1' probability of default rating from Moody's, 'B-' long term foreign issuer credit rating from Standard & Poor's, and 'CCC' long term issuer default rating from Fitch. 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: Inks Pacts With Delta on Takeoff & Landing Rights ------------------------------------------------------------- Delta Air Lines and US Airways announced an agreement on March 22, 2010, to transfer to four airlines 12 percent of the takeoff and landing slots involved in a previously announced transaction between the carriers at New York's LaGuardia and Washington's Reagan National airports. The transfers are contingent upon Federal Aviation Administration (FAA) approval and the subsequent closing of the originally proposed Delta-US Airways transaction, according to a company statement. In comments filed with the U.S. government, Delta said it has concluded agreements with AirTran Airways, Spirit Airlines and WestJet to transfer up to five pairs each of takeoff and landing slots at LaGuardia. In a separate transaction, US Airways has agreed to transfer five pairs of Reagan National slots to JetBlue Airways. AirTran, Spirit, WestJet and JetBlue are each considered limited incumbents or new entrant airlines by the FAA at these airports. In recent filings, the four airlines urged the government to approve the proposed Delta-US Airways slot transaction. Under Delta and US Airways' originally announced proposal, US Airways would transfer 125 operating slot pairs to Delta at LaGuardia and Delta would transfer 42 operating slot pairs to US Airways at Reagan National. US Airways also would gain access to the key international destinations of Sao Paulo and Tokyo-Narita. With the new six-way agreement, Delta would operate an additional 110 slot pairs at LaGuardia; AirTran, Spirit and WestJet would obtain five slot pairs each at LaGuardia from Delta; US Airways would acquire 37 slot pairs at Reagan National; JetBlue would gain five slot pairs from US Airways at Reagan National; and US Airways would gain access to Sao Paulo and Tokyo. As previously outlined by Delta and US Airways, the airlines' proposed transaction would add flights to a number of cities from both the New York and Washington, D.C. markets. In New York, Delta will add or preserve service to dozens of small- and medium-sized communities while adding service in a number of markets not currently served by US Airways. The airline would also begin a multimillion dollar construction program at LaGuardia to connect the existing Delta and US Airways terminals. Delta has estimated that the transaction will generate as many as 7,000 new jobs in the New York City area driven by the construction of new facilities and the addition of service. In Washington, D.C., US Airways will add 15 new, daily destinations to its schedule, including eight routes that currently have no daily nonstop service to Reagan National on any airline. US Airways plans to fly to all of the destinations that Delta decides to discontinue as a result of this transaction. The airline also will significantly expand its use of larger dual-class jets by nearly 50 percent at Reagan National. Delta and US Airways on Aug. 12, 2009 announced their plans to transfer slots at LaGuardia and Reagan National airports. On Feb. 9, 2010, the FAA granted conditional approval of the transaction with a requirement that slots be divested at both airports. As part of their filings, Delta and US Airways also submitted comments challenging the legal basis for the divestiture requirement. Delta and US Airways confirmed in today?s filings that they do not intend to go forward with the transaction on the conditions stated in the FAA?s Feb. 9 notice, if the original transaction, as modified by today?s agreement, is not approved. Southwest Pilots' Association Opposes Slot Swap Proposal The Southwest Airlines Pilots' Association is pushing for the Department of Transportation to disallow the permanent exchange of several hundred slots between Delta Airlines and USAirways at LaGuardia (LGA) and Washington National (DCA) Airports. This unprecedented anti-competitive deal would create hubs dominated by Delta at LGA and USAirways at DCA, giving them unchecked market and pricing power. "The pilots of Southwest support our Company's request for a free market process to take place regarding these open slots in two very key destinations," said Capt. Carl Kuwitzky, SWAPA President. "But we also support the benefit to the public of a low-cost carrier providing true competition for flyers in these markets." On March 22, after the DOT comment deadline closed, Delta and USAirways announced a revision to their proposal: they would agree to divest some slots, but only if they could hand-pick four smaller airlines to be given those slots. Southwest Airlines was purposely excluded from an opportunity to bid. "An economic expert estimates that Southwest's service to LGA and DCA would save the public approximately $200 million, annually, if Southwest were given the opportunity to acquire the slots," continued Kuwitzky. "This proposal is a back-room deal specifically designed to keep Southwest Airlines and its low-fare model away from these airports permanently." 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: Reports March 2010 Traffic Results ---------------------------------------------- US Airways Group, Inc. (NYSE: LCC) announced March and year-to- date 2010 traffic results. Mainline revenue passenger miles (RPMs) for the month were 4.9 billion, down 0.1 percent versus March 2009. Mainline capacity was 5.9 billion available seat miles (ASMs), down 1.7 percent versus March 2009. Passenger load factor for the month of March was 83.2 percent, up 1.3 points versus March 2009. US Airways President Scott Kirby said, "Our March consolidated (mainline and Express) passenger revenue per available seat mile (PRASM) increased approximately 18 percent versus the same period last year while total revenue per available seat mile increased approximately 20 percent on a year-over-year basis. The positive momentum that we have seen in the revenue environment has continued with particularly strong year-over-year growth in booked yields." For the month of March, US Airways' preliminary on-time performance as reported to the U.S. Department of Transportation (DOT) was 80.9 percent with a completion factor of 98.6 percent. These summarizes US Airways Group's traffic results for the month and year-to-date ended March 31, 2010 and 2009, consisting of mainline operated flights as well as US Airways Express flights operated by wholly owned subsidiaries PSA Airlines and Piedmont Airlines. US Airways Mainline March 2010 2009 % Change Mainline Revenue Passenger Miles (000) Domestic 3,744,204 3,861,572 (3.0) Atlantic 600,349 536,234 12.0 Latin 563,226 515,379 9.3 --------- --------- Total 4,907,779 4,913,185 (0.1) Mainline Available Seat Miles (000) Domestic 4,417,311 4,589,479 (3.8) Atlantic 752,806 736,310 2.2 Latin 726,960 671,094 8.3 --------- --------- Total 5,897,077 5,996,883 (1.7) Mainline Load Factor (%) Domestic 84.8 84.1 0.7 pts Atlantic 79.7 72.8 6.9 pts Latin 77.5 76.8 0.7 pts --------- --------- Total Mainline Load Factor 83.2 81.9 1.3 pts Mainline Enplanements Domestic 3,929,572 3,973,028 (1.1) Atlantic 145,530 138,256 5.3 Latin 416,659 406,662 2.5 --------- --------- Total Mainline Enplanements 4,491,761 4,517,946 (0.6) Year To Date 2010 2009 % Change Mainline Revenue Passenger Miles (000) Domestic 10,097,812 10,571,930 (4.5) Atlantic 1,462,620 1,371,018 6.7 Latin 1,493,072 1,365,670 9.3 ---------- ---------- Total 13,053,504 13,308,618 (1.9) Mainline Available Seat Miles (000) Domestic 12,477,791 13,092,723 (4.7) Atlantic 2,121,517 2,079,936 2.0 Latin 1,979,272 1,806,453 9.6 ---------- ---------- Total 16,578,580 16,979,112 (2.4) Mainline Load Factor (%) Domestic 80.9 80.7 0.2 pts Atlantic 68.9 65.9 3.0 pts Latin 75.4 75.6 (0.2) pts --------- --------- Total Mainline Load Factor 78.7 78.4 0.3 pts Mainline Enplanements Domestic 10,542,555 10,976,559 (4.0) Atlantic 358,683 354,369 1.2 Latin 1,084,134 1,078,343 0.5 ---------- ---------- Total Mainline Enplanements 11,985,372 12,409,271 (3.4) US Airways Express (Piedmont Airlines, PSA Airlines) March 2010 2009 % Change Express Revenue Passenger Miles (000) Domestic 173,685 175,571 (1.1) Express Available Seat Miles (000) Domestic 253,658 263,975 (3.9) Express Load Factor (%) Domestic 68.5 66.5 2.0 pts Express Enplanements Domestic 635,761 652,000 (2.5) Year To Date 2010 2009 % Change Express Revenue Passenger Miles (000) Domestic 456,517 470,356 (2.9) Express Available Seat Miles (000) Domestic 707,739 761,422 (7.1) Express Load Factor (%) Domestic 64.5 61.8 2.7 pts Express Enplanements Domestic 1,670,664 1,753,883 (4.7) Consolidated US Airways Group, Inc. March 2010 2009 % Change Consolidated Revenue Passenger Miles (000) Domestic 3,917,889 4,037,143 (3.0) Atlantic 600,349 536,234 12.0 Latin 563,226 515,379 9.3 --------- --------- Total 5,081,464 5,088,756 (0.1) Consolidated Available Seat Miles (000) Domestic 4,670,969 4,853,454 (3.8) Atlantic 752,806 736,310 2.2 Latin 726,960 671,094 8.3 ---------- ---------- Total 6,150,735 6,260,858 (1.8) Consolidated Load Factor (%) Domestic 83.9 83.2 0.7 pts Atlantic 79.7 72.8 6.9 pts Latin 77.5 76.8 0.7 pts ---------- ---------- Total 82.6 81.3 1.3 pts Consolidated Enplanements Domestic 4,565,333 4,625,028 (1.3) Atlantic 145,530 138,256 5.3 Latin 416,659 406,662 2.5 ---------- ---------- Total 5,127,522 5,169,946 (0.8) Year To Date 2010 2009 % Change Consolidated Revenue Passenger Miles (000) Domestic 10,554,329 11,042,286 (4.4) Atlantic 1,462,620 1,371,018 6.7 Latin 1,493,072 1,365,670 9.3 ---------- ---------- Total 13,510,021 13,778,974 (2.0) Consolidated Available Seat Miles (000) Domestic 13,185,530 13,854,145 (4.8) Atlantic 2,121,517 2,079,936 2.0 Latin 1,979,272 1,806,453 9.6 ---------- ---------- Total 17,286,319 17,740,534 (2.6) Consolidated Load Factor (%) Domestic 80.0 79.7 0.3 pts Atlantic 68.9 65.9 3.0 pts Latin 75.4 75.6 (0.2) pts ---------- ---------- Total 78.2 77.7 0.5 pts Consolidated Enplanements Domestic 12,213,219 12,730,445 (4.1) Atlantic 358,683 354,369 1.2 Latin 1,084,134 1,078,343 0.5 ---------- ---------- Total 13,656,036 14,163,157 (3.6) US Airways is also providing a brief update on notable company accomplishments during the month of March: * Announced an agreement with Delta Air Lines to divest 12 percent of the takeoff and landing slots involved in a previously announced transaction between the carriers at New York's LaGuardia and Washington's Reagan National airports to four airlines. Under the new six-way agreement, Delta would obtain an additional 110 slot pairs at LaGuardia; AirTran, Spirit and WestJet would obtain five slot pairs each at LaGuardia. US Airways would acquire approximately 37 slot pairs at Reagan National; JetBlue would gain five slot pairs at Reagan National. Finally, US Airways would gain access to Sao Paulo and Tokyo. The divestitures are contingent upon Federal Aviation Administration (FAA) approval and the subsequent closing of the originally proposed Delta-US Airways transaction. * Launched a new wireless Internet product, Gogo(R) Inflight Internet, on five of its Airbus A321 aircraft. Gogo, which is provided by Aircell, allows passengers to use their laptops or Wi-Fi enabled mobile devices to surf the Web, E-mail friends and family, log into corporate Virtual Private Networks (VPN) and access online entertainment options. By June 1, all 51 A321s in US Airways' fleet will be Gogo-equipped. * Detailed four new routes from the East Coast to Mexico and Canada * From its largest hub, Charlotte, N.C. * On May 31, begin daily, year-round service to Ottawa. The new service will be on a 50-seat CRJ-200 regional jet operated by US Airways Express carrier Air Wisconsin. * On June 5, begin year-round service to Puerto Vallarta and Los Cabos, Mexico. Both routes will operate on an Airbus A319 aircraft with seating for 124 customers (12 First Class, 112 main cabin). The new service to Mexico complements US Airways' existing service to both cities from its Phoenix hub. * From Philadelphia * On June 1, the Company will launch its first-ever service to Halifax, Nova Scotia. The year-round daily flights to Halifax will be operated by US Airways Express partner Air Wisconsin on a 50-seat CRJ-200 regional jet. * Announced the resumption of nonstop service between Baton Rouge, La., and Charlotte, N.C. on June 24 after a seven- year hiatus. Three daily flights will be operated by US Airways Express carrier PSA Airlines operating 50-seat CRJ- 200 regional jets. 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. VALENCE TECHNOLOGY: Regains Compliance with NASDAQ Rule ------------------------------------------------------- Valence Technology, Inc., on April 20, 2010, received a letter from The NASDAQ Stock Market confirming that the closing bid price of the Company's common stock has been at $1.00 per share or greater for at least 10 consecutive business days. On March 8, 2010, the Company had received written notice from The NASDAQ Stock Market indicating that the Company was not in compliance with the $1.00 minimum bid price requirement for continued listing on the NASDAQ Capital Market, as set forth in Listing Rule 5550(a)(2). The Company was provided a 180-day grace period, scheduled to end September 7, 2010, to regain compliance with the Listing Rule. As a result of the Company's having satisfied the minimum bid price requirement for at least 10 consecutive business days, The NASDAQ Stock Market has informed the Company that this matter is now closed. Austin, Texas-based Valence Technology, Inc. (NASDAQ: VLNC) -- http://www.valence.com/-- is a global leader in the development of safe, long-life lithium iron magnesium phosphate energy storage solutions and provides the enabling technology behind some of the world's most innovative and environmentally friendly applications. Valence Technology has its Research & Development Center in Nevada, its Europe/Asia Pacific Sales office in Northern Ireland and global fulfillment centers in North America and Europe. VANITY EVENTS: Recurring Losses Prompt Going Concern Doubt ---------------------------------------------------------- Vanity Events Holding, Inc., filed on April 19, 2010, its annual report on Form 10-K for the year ended December 31, 2009. RBSM LLP, in New York, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that of the Company's recurring losses from operations. The Company reported a net loss of $1,547,471 on $72,031 of revenue for 2009, compared with a net loss of $314,085 on $62,356 of revenue for 2008. The Company's balance sheet as of December 31, 2009, showed $1,519,767 in assets, $313,204 of debts, and $1,206,563 of stockholders' equity. A full-text copy of the annual report is available for free at: http://researcharchives.com/t/s?6084 Based in New York, Vanity Events Holding, Inc. (OTC BB: VAEV) -- http://www.vanityeventsholding.com/-- is a holding company with two primary subsidiary companies. The subsidiaries are Vanity Events, Inc. and America's Cleaning Company. America's Cleaning Company(TM) is the Company's flagship division which provides cleaning services to residential and commercial clients. Vanity Events, Inc. seeks out, Licenses, develops, promotes, and brings to market various innovative consumer and commercial products. VEBLEN WEST: Gets Interim Okay to Use AgStar's Cash Collateral -------------------------------------------------------------- Veblen West Dairy LLP sought and obtained interim authorization from the Hon. Charles L. Nail, Jr., of the U.S. Bankruptcy Court for the District of South Dakota to use the cash collateral of AgStar Financial Services, PCA, and AgStar Financial Services, FLCA. Bryant D. Tchida, Esq., at Leonard, Street And Deinard, the attorney for the Debtor, explains that the Debtor needs the money to fund its 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/VEBLEN_budget.pdf As adequate protection for the use of cash collateral, the Debtor will: (i) provide interest-only payments on AgStar's existing loans on a monthly basis; (ii) grant AgStar replacement liens on all after-acquired collateral; and (iii) to operate its business to maximize the value of AgStar's collateral. The Court has set a final hearing for April 30, 2010, at 8:30 a.m. Veblen West Dairy LLP, based in Veblen, South Dakota, filed a petition April 7 seeking protection under Chapter 11 (Bankr. D. S.D. Case No. 10-10071). Veblen West listed assets and debts of $10 million to $50 million. VINEYARD NATIONAL: FDIC Claim May Wipe Out Unsecured's Recovery --------------------------------------------------------------- The Federal Deposit Insurance Corp. has filed an objection to the Joint Plan of Liquidation and Disclosure Statement filed by Vineyard National Bancorp. Among other things, the FDIC claims a super priority claim to certain assets of the estate. Vineyard warned in a regulatory filing that if the FDIC's claim is successful, it will reduce or potentially eliminate any assets available for distribution to the general unsecured creditors. The Court approved the Disclosure Statement explaining the Debtor's Plan dated February 4, 2010 and solicitation of ballots commenced on March 8, 2010. A confirmation hearing for the Joint Plan was originally scheduled for April 8, 2010. Due to an objection to the Joint Plan filed by the FDIC, the confirmation hearing has been continued until May 12, 2010, to allow the parties to respond to the FDIC objection. In December 2009, the Official Committee of the Unsecured Creditors appointed in Vineyard's case filed a lawsuit against certain directors and officers of the Debtor. The Debtor also disclosed that recent changes in the tax rules permit a five-year carry back of net operating losses, which may generate additional assets for the bankruptcy estate. Vineyard also said it is unable to its Quarterly Report on Form 10-Q for the quarter ended March 31, 2010, within the prescribed time period, without unreasonable effort or expense. The Company also said it is unlikely that the Company will be able to complete and file its 2008 Form 10-K, its March 2009 Form 10-Q, its June 2009 Form 10-Q, its September 2009 Form 10-Q, its 2009 Form 10-K or its March 2010 Form 10-Q at anytime in the foreseeable future. In lieu of filing such annual and periodic reports and financial statements, the Company has been filing monthly operating reports with the Office of the United States Trustee. About Vineyard National Vineyard National Bancorp (NASDAQ: VNBC) (AMEX: VXC.PR.D) -- http://www.vineyardbank.com/-- was the financial holding company, which provides a variety of lending and depository services to businesses and individuals through its wholly owned subsidiary, Vineyard Bank, National Association. Vineyard Bank was closed July 17 by regulators, which appointed the Federal Deposit Insurance Corporation as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with California Bank & Trust, San Diego, California, to assume all of the deposits of Vineyard Bank, N.A., excluding those from brokers. As of March 31, 2009, Vineyard Bank, N.A., had total assets of $1.9 billion and total deposits of approximately $1.6 billion. In addition to assuming all of the deposits of the failed bank, California Bank & Trust agreed to purchase approximately $1.8 billion of assets. The FDIC will retain the remaining assets for later disposition. California Bank & Trust purchased all deposits, except about $134 million in brokered deposits, held by Vineyard Bank, N.A. Vineyard National Bancorp filed for Chapter 11 on June 21, 2009 (Bankr. C.D. Calif. Case No. 09-26401). WASHINGTON MUTUAL: May Have Annual Shareholders' Meeting -------------------------------------------------------- U.S. Bankruptcy Judge Mary F. Walrath granted a motion by the official equity committee in Washington Mutual Inc.'s cases allowing a suit to be filed in Washington state where stockholders will seek to compel the holding of an annual meeting. At the meeting, the shareholders may elect new members of the board. Washington Mutual previously requested for disbandment of the equity panel, and opposed the request for a shareholders' meeting. 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: Asserts Counterclaim Against Equity Committee ---------------------------------------------------------------- Washington Mutual, Inc., and its debtor-affiliates argue that in a desperate, self-interested, and reckless attempt to scuttle their Chapter 11 Plan of Reorganization, the Equity Committee seeks to seize control them in a scheme to compel them to hold a "hasty" annual meeting, force them to bear the cost of a proxy contest by including the Equity Committee to a slate of hand-picked directors on the Debtors' proxy materials, and gain a waiver of quorum. As previously reported, the Equity Committee filed an adversary complaint, asking the Bankruptcy Court to compel WaMu to schedule and hold an annual shareholders' meeting on a certain date pursuant to Sections 23B.07.030 and 23B.07.010 of the Revised Code of Washington. The Equity Committee pointed out that WaMu has not held an annual meeting of shareholders since April 15, 2008. The Equity Committee also asked the Court to enter a summary judgment in its favor and require that WaMu schedule the meeting in April 2010. Representing the Debtors, Mark D. Collins, Esq., at Richards, Layton & Finger, in Wilmington, Delaware, acknowledges that the U.S. Trustee formed the Equity Committee so that the interests of WaMu's shareholders would have a voice in the Chapter 11 cases. "Now," he points out, "the Equity Committee seeks to have that voice heard louder than all others." The Equity Committee's Complaint relies on the mistaken assertion that shareholders have "a virtually absolute right" to hold a shareholder meeting to elect directors, Mr. Collins contends. There are limitations on the exercise of shareholders' rights during a bankruptcy process, he relates. Moreover, Mr. Collins specifies, serious questions abound as to whether the Equity Committee possesses the resources to effectuate a proxy solicitation, which costs must be borne by the shareholders, not by the estate. "If the Equity Committee cannot fund [the solicitation] expenses . . . the Equity Committee's actions constitute clear abuse, because it would render the putative annual meeting an expensive exercise with no proxy contest and no practical effect." In view of the critical juncture at which the Chapter 11 Cases rest, the Court should exercise its discretion to ensure that the Debtors are not forced to incur wasteful expenses and endure distractions from seeking to consummate the Agreement and confirm the Plan, Mr. Collins maintains. The Debtors also filed a counterclaim to the Equity Committee's complaint, seeking to "[enjoin] the Equity Committee from bringing suit or prosecuting an action, in any forum, that seeks to compel a meeting of WaMu shareholders." In a separate declaration filed with the Court, Brian S. Rosen, Esq., at Weil, Gotshal & Manges LLP, in New York, contended that "there has been no discovery conference" since the Equity Committee filed its Complaint on March 11, 2010. The Debtors have not yet had the opportunity to take any discovery on the Equity Committee. In the alternative and at a minimum, the Debtors require discovery in order to establish further factual disputes and fully and properly oppose the Motion, Mr. Rosen asserts. Hoffman, Et Al., File Joinders to Equity Committee's Complaint Daniel Hoffman, Morgan Bannister, Russell Endsley and Timothy Morris argued that the Debtors plan to avoid an annual meeting on the eve of filing a Chapter 11 Plan that professes that there is no value for shareholders and will wipe them out, while leaving creditors with only the slightest of impairment. Messrs. Hoffman, Morgan, Bannister, Endsley and Morris told Judge Walrath that they have been authorized to represent to the Court "3,505 shareholders of [WaMu]." Contrary to the Debtors' assertion, Jay Carl Locke argued in a separate joinder that the Debtors' counsel, Weil Gotshal, "has not been working diligently trying to maximize the value of its estate at all." 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: Broadbill Asserts Claim Over Breach of Contract ------------------------------------------------------------------ Between 1982 and 1985, Anchor Savings Bank FSB acquired eight failing savings and loan institutions, the deposits of which were insured by the Federal Savings and Loan Insurance Corporation. As a result, Anchor FSB assumed liabilities determined to exceed the assets it acquired by over $650 million in the aggregate. The difference between the fair values of the assets acquired and the liabilities assumed in the transactions was recorded on Anchor FSB's books as "goodwill." At the time of the acquisitions, the FSLIC had agreed that Anchor FSB, among other things, could include the "goodwill" in its regulatory capital. When the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 was enacted, Anchor FSB still had over $500 million of regulatory capital from supervisory acquisitions on its books, including the "goodwill." FIRREA, however, required the remaining supervisory goodwill to be eliminated immediately for purposes of calculating tangible capital and to be phased out through December 31, 1994 for other regulatory capital purposes. The elimination of the supervisory goodwill and other components of regulatory capital damaged Anchor FSB by creating severe limitations on its activities and requiring the sale of valuable assets under liquidation-like circumstances, Mark E. Felger, Esq., at Cozen O' Connor, in Wilmington, Delaware -- mfelger@cozen.com -- related. Thus, by January 13, 1995, Anchor FSB filed a lawsuit against the U.S. government in the U.S. Court of Federal Claims captioned Anchor Savings Bank FSB v. United States, alleging breach of contract and taking of property without compensation in contravention of the Fifth Amendment to the U.S. Constitution. Shortly after the Anchor Litigation was commenced, Dime Bancorp acquired Anchor and The Dime Savings Bank of New York, FSB acquired Anchor FSB. Accordingly, the Anchor Litigation was transferred to Dime FSB, Mr. Felger noted. Following the combination of Dime and Washington Mutual Inc., the Anchor Litigation was transferred by The Dime Savings Bank FSB to Washington Mutual Bank and WaMu became obligated to convey the value of the net proceeds of the Anchor Litigation to the LTW Holders, Mr. Felger told the Bankruptcy Court. On December 22, 2000, Dime distributed LTWs to holders of outstanding shares of its common stock. The LTW s were registered under a registration statement and were issued pursuant to an agreement referred to as a Warrant Agreement dated as of December 21, 2000, by and among Dime, EquiServe Trust Company, N.A. and EquiServe Limited Partnership, as agents. Dime Bancorp and its board of directors concluded that the optimal contractual means of conveying the value of the net proceeds of the Anchor Litigation to the LTW Holders was through the issuance of what were nominally referred to as "Litigation Tracking Warrants," which gave its holders the right to payment of the net proceeds from the Anchor Litigation upon a "Trigger" by either: (i) an issuance of shares of Dime common stock with a market value at the time of issuance that would enable the holder to realize the value of the net proceeds; or (ii) payment of other consideration as would enable the LTW Holders to realize the value of the net proceeds. In January 2002, Dime merged into WMI and WMI assumed Dime's obligations under the LTWs. WaMu and Mellon Investor Services LLC entered into the 2003 Amended and Restated Warrant Agreement. Section 6.3 1 of the Amended Agreement provides that WMB was to retain sole and exclusive control over the Anchor Litigation and 100% of any recovery from the Litigation. That provision was breached as a consequence of the sale or transfer of the recovery from the Anchor Litigation and the control thereof to JPMorgan Chase Bank, N.A. for value in September 2008, Mr. Felger notes. As a result, the LTW Holders have been deprived of the value of the purchase price paid by JPMorgan for the Anchor Litigation, he points out. Accordingly, Broadbill Investment Corp., as a beneficial holder and owner of the LTWs, seek a declaratory judgment providing that: (i) the sale and transfer of control over, and the recovery from, the Anchor Litigation to JPMorgan constitute a breach and default under the Amended Agreement, which gives rise to a claim in favor of the LTW Holders for WaMu's failure to provide the LTW Holders with the proceeds from the Sale and Transfer; (ii) if WaMu's existing common stock is to be extinguished or cancelled, the Amended Agreement mandates that the LTW Holders have claims against WaMu in the amount of the net proceeds of the Anchor Litigation; (iii) the LTWs do not constitute either stock warrants, equity securities or equity interests in WMI; and (iv) the LTWs represent the "right to payment" of value and are "claims" against WaMu estate. 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 AlixPartners as Fin'l Advisor ----------------------------------------------------------- Xerium Technologies Inc. and its units seek the Court's permission to employ AlixPartners, LLP, as their financial advisor and consultant, nunc pro tunc to the Petition Date. According to Stephen R. Light, Chairman and Chief Executive Officer at Xerium, AlixPartners has a wealth of experience in providing financial and restructuring advisory services, and enjoys an excellent reputation for services it has rendered in large and complex Chapter 11 cases on behalf of debtors and creditors throughout the United States. In addition, AlixPartners assisted the Debtors in coordinating with their various professionals, as well as in managing the prepetition Chapter 11 preparation process and public relations efforts. Consequently, AlixPartners is now familiar with the Debtors' financial affairs, debt structure, operations, and related matters. Likewise, AlixPartners' professionals have worked closely with the Debtors' management and other advisors, Mr. Light says. In accordance with a retention agreement, AlixPartners, as the Debtors' financial advisor, will: (a) provide assistance to management in connection with the Debtors' development of their revised business plan, and other related forecasts as may be required by the bank lenders in connection with negotiations or by the Debtors for other corporate purposes; (b) assist the Debtors' management and their professionals specifically assigned to sourcing, negotiating, and implementing any financing, exit financing facilities, in conjunction with the Plan and the overall restructuring; (c) advise senior management in the negotiation and implementation of restructuring initiatives and evaluation of strategic alternatives; (d) assist in preparing for and filing bankruptcy petitions, coordinating and providing administrative support for the proceeding; (e) assist with the preparation of the statement of affairs, schedules, and other regular reports required by the Court; (f) assist, as requested, in analyzing preferences and other avoidance actions, if requested; (g) manage the claims and claims reconciliation processes; (h) assist the Debtors in the development of its communications strategy for the various stakeholder constituents; (i) render an opinion on the viability of the restructuring concept of Xerium Germany Holding GmbH, which approach is based on the standard for restructuring concepts of the German Auditors Association; (j) assist in managing the "working group" professionals who are assisting the Debtors in the reorganization process or who are working for the Debtors' various stakeholders to improve coordination of their effort and individual work product to be consistent with the Debtors' overall restructuring goals; (k) assist in obtaining and presenting information required by Parties-in-interest in the Debtors' bankruptcy process including official committees appointed by the Court and the Court itself; (l) assist the Debtors in other business and financial aspects of the Chapter 11 proceeding, including, but not limited to, development of the Disclosure Statement and Prepackaged Joint Chapter 11 Plan of Reorganization; (m) provide assistance in litigation support and testimony before the Court; and (n) assist with other matters as may be requested by the Debtors, as mutually agreeable. AlixPartners' professionals will be paid in accordance with these hourly rates: Professional Hourly Rate ------------ ----------- Managing Directors $710 - $995 Directors $530 - $685 Vice Presidents $395 - $520 Associates $280 - $380 Analysts $245 - $270 Paraprofessionals $190 - $210 Brian J. Fox, a managing director at AlixPartners, will be responsible for the overall engagement and will be assisted by a staff of consultants at various levels, who have a wide range of skills and abilities related to this type of assignment, Mr. Light notes. According to Mr. Light, work performed by AlixPartners' consultants outside of North America will be charged at the standard AlixPartners non-North American local rates, converted to U.S. dollars, using fixed conversion rates established on the invoice date. Retainer and Restructuring Fees Mr. Light says that AlixPartners received an initial advance retainer of $250,000 on May 8, 2009, from the Debtors. Pursuant to the Retention Agreement, invoiced amounts have been recouped against the Retainer, and payments on the invoices have been used to replenish the Retainer. During the 90 days prior to the Petition Date, the Debtors paid AlixPartners a total of $1,225,266, incurred in providing services to the Debtors in contemplation of, and in connection with, prepetition restructuring activities, Mr. Light notes. In the Chapter 11 cases, the Debtors and AlixPartners have agreed on contingent incentive compensation in the form of a $250,000 restructuring fee based upon several specific metrics. Pursuant to a restructuring agreement, AlixPartners will receive the Restructuring Fee if the Debtors (i) amend their existing credit agreement or (ii) complete one or more transactions that substantially transfer a significant portion of the business as a going concern to another entity. The Restructuring Fee is due and payable at the closing of the Restructuring. In the event of a Change in Control, as defined in the Retention Agreement, the Restructuring Fee will be due and payable immediately prior to the Change in Control. Mr. Fox contends that AlixPartners 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 Rothschild as Investment Banker ------------------------------------------------------------- By this application, Xerium Technologies Inc. and its units seek Judge Carey's permission to employ Rothschild Inc. as financial advisor and investment banker, nunc pro tunc to the Petition Date. Stephen R. Light, Chairman and Chief Executive Officer at Xerium, relates that Rothschild is well-qualified to act as their financial advisor and investment banker because, among other things, the firm has extensive experience and an excellent reputation in providing high quality investment banking services to debtors and creditors in bankruptcy reorganizations and other restructurings. Prior to the Petition Date, the Debtors engaged Rothschild to provide general investment banking and financial advice in connection with their exploration of various strategic, financial, and restructuring alternatives and to prepare for the commencement of the Chapter 11 cases. Specifically, Rothschild (i) assisted the Debtors in the development and negotiation of the proposed Prepackaged Joint Chapter 11 Plan of Reorganization, (ii) prepared the valuation in the Disclosure Statement, and (iii) assisted the Debtors in procuring, and negotiated the terms of, their proposed debtor-in-possession and exit financing and the amended second lien term loan to be entered into on the effective date of the Plan. Consequently, Rothschild has developed significant relevant experience and expertise regarding the Debtors, their businesses, and their current situation and is uniquely suited to deal effectively and efficiently with any financial problems that may arise in the context of the Debtors' cases, Mr. Light says. Pursuant to an engagement letter, Rothschild, as investment banker, will: (a) review and analyze the Debtors' assets and the operating and financial strategies; (b) review and analyze the business plans and financial projections prepared by the Debtors including, but not limited to, testing assumptions and comparing those assumptions to historical Debtor and industry trends; (c) evaluate the Debtors' debt capacity in light of its projected cash flows and assist in the determination of an appropriate capital structure; (d) assist the Debtors and their other professionals in reviewing the terms of any proposed transaction, as defined in the Engagement Letter; (e) determine a range of values for the Debtors and any securities that the Debtors offer or propose to offer in connection with a Transaction; (f) advise the Debtors on the risks and benefits of considering a Transaction with respect to the Debtors' intermediate and long-term business prospects and strategic alternatives to maximize the business enterprise value of the Debtors; (g) review and analyze any proposals the Debtors receive from third parties in connection with a Transaction, as appropriate; (h) assist or participate in negotiations with the parties-in- interest, including, without limitation, any current or prospective creditors of, holders of equity in, or claimants against the Debtors in connection with a Transaction; (i) advise the Debtors with respect to, and attend, meetings of the Debtors' board of directors, creditor groups, official constituencies and other interested parties, as necessary; (j) participate in hearings before the Court and provide relevant testimony and issues arising in connection with any proposed plan of reorganization; and (k) render such other financial advisory and investment banking services as may be agreed upon by Rothschild and the Debtors. In consideration of the services to be provided by Rothschild, and as more fully described in the Engagement Letter, subject to the approval of the Court, the Debtors have agreed to pay Rothschild in cash under this Fee Structure: (a) A retainer in an amount equal to $175,000, to be applied against the fees and expenses of Rothschild. (b) Commencing as of August 13, 2009, an advisory fee of $175,000 per month, payable by the Debtors in advance on the first day of each month. (c) A completion fee of $4,000,000, payable upon the earlier of (i) the confirmation and effectiveness of a plan of reorganization and (ii) the closing of another Transaction. (d) A new capital fee equal to (i) 1.0% of the face amount of any senior secured debt raised including, without limitation, any debtor-in-possession financing raised, (ii) 2.5% of the face amount of any junior secured or senior or subordinated unsecured debt raised, (iii) 3.0% of the face amount of any unsecured debt raised, and (iv) 5.0% of any equity capital, or capital convertible into equity, raised. Furthermore, Rothschild will credit against the Completion Fee: (a) 50% of the Monthly Fees paid above $1,050,000; and (b) 50% of any New Capital Fees paid. The Debtors and Rothschild have agreed that no New Capital Fee will be earned if the Disclosure Statement is approved and the Plan is confirmed by the Court. Rothschild will also be reimbursed for its necessary out-of-pocket expenses. Mr. Light disclosed that in the 90 days prior to the Petition Date, the Debtors paid Rothschild $700,000 in fees and $27,725 for reimbursement of expenses. As of the Petition Date, Rothschild holds $175,000 on account of the Retainer. According to Mr. Light, although Rothschild's records indicate that it is not owed any amounts in respect of prepetition services provided to the Debtors, it is possible that certain expenses that were incurred by Rothschild, and that are reimbursable under the terms of the Engagement Letter, were not yet reflected on Rothschild's books and records as of the Petition Date. Upon the Court's approval of the Debtors' Application, Rothschild will waive any claim for such unreimbursed expenses in excess of amounts paid to Rothschild prepetition. The Debtors will also indemnify and hold harmless Rothschild and its affiliates from and against any losses, claims, or proceedings, including, without limitation, stockholder actions, damages, judgments, assessments, investigation costs, settlement costs, fines, penalties, arbitration awards, and any other liabilities, costs, fees, and expenses other than as a result of such Indemnified Party's gross negligence, fraud, or willful misconduct. Stephen S. Ledoux, a managing director of Rothschild, contends 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: Wants Baker & McKenzie as European Counsel --------------------------------------------------------------- Xerium Technologies Inc. and its units seek the Court's authority to employ Baker & McKenzie as special European corporate counsel, nunc pro tunc to the Petition Date. As European corporate counsel, Baker will: (a) represent and advise the Debtors in relation to all jurisdictions outside of the U.S. (including, without limitation, Australia, Austria, Brazil, Canada, Finland, France, Germany, Hong Kong, Ireland, Italy, Japan, Mexico, Sweden, United Kingdom, and Vietnam) to review, coordinate and advise on the collateral package (and related corporate in possession and exit financing and the amended second lien term loan to be entered into on the effective date of the Plan; (b) represent and advise the Debtors on and assisting the Debtors in the implementation of certain intercompany transactions to be carried out under the Plan in Austria, Germany, and Italy in connection with the restructuring of the Debtors' obligations under their prepetition credit facility, proposed by the Debtors in cooperation with Ernst & Young LLP and other advisors; and (c) advise the Debtors related to their non-U.S. subsidiaries, especially in the European jurisdictions (Austria, Finland, France, Germany, Ireland, Italy, United Kingdom, Spain, Sweden, Switzerland, and in addition, occasionally in Australia, Brazil, Canada, Hong Kong, Japan, Mexico, and Vietnam), with respect to corporate, litigation, and employment matters, including, without limitation, workforce restructuring and closures, management changes (employment and corporate side), group-internal intercompany transactions, cash pool measures, board meetings, changes in articles, and general corporate legal advice with respect to day-to-day corporate housekeeping. Baker will be paid according to these hourly rates: * Partners $270 (Mexico) to $1,100 (Hong Kong) * Associates $120 (Mexico) to $850 (Hong Kong) * Para-professionals $120 to $340 Baker will also be reimbursed for any out-of-pocket expenses incurred. Olaf Gebler, Esq., a partner at Baker & McKenzie, assures the Court that his firm does not hold or represent any interest adverse to the Debtors or their estates and is a "disinterested person," as defined in section 101(14) of the Bankruptcy Code, as modified by Section 1107(b) of the Bankruptcy Code. 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) * Credit Quality Improves Among Junk-Rated Companies, Says Moody's ------------------------------------------------------------------ According to Bloomberg News, a report released April 21 by Moody's Investors Service said that the default rate over the last year for junk-rated companies fell to 12% in March from 13.9 percent in February. As a result of the loosening of the credit markets, Moody's predicts that the trailing 12-month junk default rate will decline to 3.1% by the end of the year. Moody's also described how credit quality is improving among junk-rated companies. In the first quarter of 2009, 13.6% of larger companies with junk ratings were downgraded. In the first three months of 2010, only 1.3% of the same sample were downgraded. * BOOK REVIEW: Rupert Murdoch: Creator of a Worldwide Empire ------------------------------------------------------------ Author: Jerome Tuccille Publisher: Beard Books Softcover: 304 pages List Price: $34.95 With his recent purchase of the Dow Jones Company, parent company of the Wall Street Journal, Rupert Murdoch added another piece to his global communications empire and again showed why he is the preeminent media mogul in the world. While many books have been written about Murdoch, Rupert Murdoch: Creator of a Worldwide Empire, is among the most enlightening because it was written in 1989 and chronicles Murdoch's activities during the 1980s, a critical period of time when he built his empire in the United States. It was a time when Murdoch "bought and sold properties with dizzying speed," notes the author. Two of the most notable acquisitions were his purchase of Twentieth Century Fox from Marvin Davis and the purchase of Triangle Publications from Walter Annenberg, but many other acquisitions are recounted in this fascinating book. It was also a time when Murdoch fiercely battled regulators, legislators, labor unions, competitors, and even public opinion. These battles are recounted also. In writing Rupert Murdoch: Creator of a Worldwide Empire, the author had access to a multitude of sources inside and outside the Murdoch organization, including Murdoch himself. Tucille demonstrates Murdoch's mastery at taking advantage of tax and financing techniques to borrow more than his rivals without diluting the value of his holdings. Murdoch's business acumen allowed him to continually outbid and outmaneuver the competition to compile a media conglomerate that, in the United States, includes The Boston Herald and The New York Post newspapers; New York, TV Guide, and Seventeen magazines; the HarperCollins publishing house, 20th Century Fox Film Corporation; the Fox television network, and numerous Fox television stations around the country. Murdoch's international assets include the Times of London newspaper and dozens of newspapers and magazines in his native Australia. Murdoch has often been compared to William Randolph Hearst, but Tucille counters that Murdoch is his own man and, in point of fact, has achieved a larger measure of success. At the time of this book's writing, Murdoch controlled a media empire of $12 billion. Hearst's holdings, adjusted to 1989 dollars, would be approximately $700 million. With the acquisition of The Wall Street Journal, Murdoch's combined news, entertainment and Internet enterprises (he also recently added the MySpace web site to his holdings) are now valued at $68 billion. Tucille dispels many of the myths about the man. The author finds Murdoch to be in the mold of the old publishing barons, who are motivated to construct an empire through savvy acquisitions and then by building readership and viewership. Murdoch does not acquire assets with the intent of breaking them down, disposing of them, and quickly turning a profit. He is a "builder" entrepreneur who makes his assets stronger and more valuable. Murdoch is also a risk-taker or, as some have characterized him, as a gambler extraordinaire who, through a combination of luck and good timing, has been able to build an empire although seemingly overpaying for assets. The author notes, however, that ". . . no one's luck lasts that long.Murdoch -- like most successful people -- makes his own luck through hard work and effort, by hiring the right people to do the job and replacing them quickly when they fail." Jerome Tuccille has written more than 20 books, including a biography of Alan Greenspan. ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers' public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com/ On Thursdays, the TCR delivers a list of recently filed Chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to nation's bankruptcy courts. The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. The Sunday TCR delivers securitization rating news from the week then-ending. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland, USA. Marites Claro, Joy Agravante, Rousel Elaine Tumanda, Howard C. Tolentino, Joseph Medel C. Martirez, Denise Marie Varquez, Philline Reluya, Ronald C. Sy, Joel Anthony G. Lopez, Cecil R. Villacampa, Sheryl Joy P. Olano, Carlo Fernandez, Christopher G. Patalinghug, and Peter A. Chapman, Editors. Copyright 2010. All rights reserved. ISSN: 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $775 for 6 months delivered via e- mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. *** End of Transmission ***