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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 30, 2010, Vol. 14, No. 118
Headlines
2737 MEMORIAL: Case Summary & 4 Largest Unsecured Creditors
ACCESS PHARMACEUTICALS: Annual Stockholders' Meeting on May 26
ACCESS PHARMACEUTICALS: Registers 9,160,228 Shares
AFC ENTERPRISES: 2010 Annual Shareholders' Meeting Set for May 20
AFTERSOFT GROUP: Posts $719,000 Net Loss in Q3 Ended March 31
ALAIN SALMEA: Case Summary & 6 Largest Unsecured Creditors
ALERIS INT'L: Proposes to Enter Into $500 Million Exit Facility
ALERIS INT'L: Wants to Reject Fellon-McCord Contract
ALERIS INT'L: Proposes to Terminate 3 U.S. Pension Plans
ALLEGHENY ENERGY: Moody's Affirms Ba1 Senior Unsecured Rating
AMERICAN HOMEPATIENT: Inks Restructuring Deal with Lenders
AMERICAN MORTGAGE: Files Chapter 11 Plan of Reorganization
AMERISTAR CASINOS: Moody's Withdraws Rating on $384 Mil. Loan
AMTRUST FINANCIAL: Seeks to Retain NAI Dus as Real Property Broker
ASSOCIATED BANC: S&P Puts 'BB-' Rating on CreditWatch Negative
ATRIUM COMPANIES: Court Confirms Plan of Reorganization
AUTOBACS STRAUSS: Headed for June 21 Plan Confirmation Hearing
BEAR ISLAND: Dune Capital Says Sale of WB Group's Assets Unfair
BERNARD TOMAINO: Case Summary & 20 Largest Unsecured Creditors
BI-LO: Wins Confirmation of Reorganization Plan
BLOCK COMMUNICATIONS: S&P Gives Stable Outlook; Keeps 'B+' Rating
BRIER CREEK: Section 341(a) Meeting Scheduled for May 25
BRITTWOOD CREEK: Bridgeview Bank Wants Chapter 11 Case Dismissed
CABERNET HOLDINGS: Court to Consider Bankruptcy Plan on May 8
CAPMARK FINANCIAL: Committee Members Can Trade In Securities
CAPMARK FINANCIAL: Merrill Wants Lift Stay to Draw on Collateral
CAPMARK FINANCIAL: Proposes to Expand Lazard Work
CATALYST PAPER: To Appeal Tax Ruling to Supreme Court of Canada
CCG RIVERSIDE: Case Summary & 20 Largest Unsecured Creditors
CCM MERGER: Moody's Confirms Junk Corporate Family Rating
CEDROS PROPERTIES: Case Summary & 10 Largest Unsecured Creditors
CENTENE CORP: S&P Gives Positive Outlook; Affirms 'BB-' Rating
CENTENNIAL MEDICAL: Case Summary & 9 Largest Unsecured Creditors
CHANA TAUB: Judge Stong Appoints a Chapter 11 Trustee
CHARTER COMMUNICATIONS: Posts Tender Offers Results for Notes
CHENIERE ENERGY: Annual Shareholders' Meeting Set for June 4
CHRYSLER LLC: Court's Written Order Confirming Plan
CHRYSLER LLC: Daimler Wants Creditors Committee Suit Dismissed
CHRYSLER LLC: Amends Plan to Ensure April 30 Consummation
CHRYSLER LLC: Sues Colorado Officials to Stop New Dealer Laws
CHRYSLER LLC: Judge Refusal to Reconsider Order Challenged
CITADEL BROADCASTING: Gets Final Nod for Lazard as Fin'l Advisor
CITADEL BROADCASTING: Has Plan Exclusivity Until Sept. 16
CITADEL BROADCASTING: Lease Decision Period Extended Until June 18
CITIGROUP INC: Taps Credit Suisse's Jarrett as Managing Director
CMP SUSQUEHANNA: Moody's Reviews 'Caa3' Corporate Family Rating
CMP SUSQUEHANNA: S&P Raises Corporate Credit Rating to 'B-'
COLORADO TIMBER: Case Summary & 3 Largest Unsecured Creditors
COMMACK INVESTOR: Voluntary Chapter 11 Case Summary
CONGOLEUM CORP: SGS Completes Feasibility Analysis on Company
CONTINENTAL AIRLINES: May Announce Merger Deal with UAL on Monday
CONTINENTAL AIRLINES: UAL Execs to Get Millions in Merger
CONVERSION SERVICES: Glenn Peipert Steps Down as Director
COOPER-STANDARD: Gets $150 Million Working Capital Loan
CRESCENT RESOURCES: Five Mile Soliciting Votes Against Plan
CRYOPORT INC: Registers 1.6MM Shares Under Incentive Plans
CUMULUS MEDIA: Moody's Affirms Corporate Family Rating at 'Caa2'
DOUBLE G: Files List of 21 Largest Unsecured Creditors
DOUBLE G: Taps Brooks Wilkins as General Counsel
DREIER LLP: Settlements with U.S. Government Rejected by Judge
ELECTRICAL COMPONENTS: Has Final Financing Approval
EMERALD DEVELOPMENT: Case Summary & Unsecured Creditor
EMMIS COMMUNICATIONS: CEO to Purchase All Class A Shares
EMPIRE RESORTS: Declared in Default of $65MM in 5-1/2% Notes
ERICKSON RETIREMENT: Court OKs Release of 2 PNC Letters of Credit
ERICKSON RETIREMENT: Westchester Wants to Compel Removal of Bond
ESCADA AG: US Unit Offering Up to 8% to Unsecured Creditors
EXTENDED STAY: Challenge Deadline Moved Until Examiner Report
EXTENDED STAY: Committee Wants Jefferies to Solicit Plan Proposal
EXTENDED STAY: Weil Gotshal Bills $2.7 Million for Nov.-Feb.
FAIRFAX FINANCIAL: Zenith Stockholders OK Sale to Fairfax
FIRSTGOLD CORP: Gets Final Approval for $175,000 DIP Financing
FLYING J: Settles with Shell, Has Short Exclusivity
FORD MOTOR: S&P Changes Outlook to Positive; Affirms 'B-' Rating
FREESCALE SEMICONDUCTOR: Fitch Affirms 'CCC' Issuer Default Rating
GARY MCLEAN: Amends List of Largest Unsecured Creditors
GARY MCLEAN: Section 341(a) Meeting Scheduled for May 26
GENERAL GROWTH: Court Confirms Plan of 2 Las Vegas Malls
GLOBAL CONTAINER: Gets Court's Okay to Sell Two Vessels
GLOWPOINT INC: Annual Stockholders' Meeting Set for June 17
GOTTSCHALKS INC: Founder's Great-Nephew to Open New Stores
GOTTSCHALKS INC: Plan Hearing Continued Until May 21
GOTTSCHALKS INC: Wants Plan Exclusivity Until August 31
GRANT FOREST: Receives Final Chapter 15 Protection
HARRISBURG, PA: City Council Meets with Pepper Hamilton & PwC
HARRISBURG, PA: Finalizing Forbearance Deal with Assured Guaranty
HEIDTMAN MINING: Sells All Mining Assets to Coal America
HELLER EHRMAN: Promises Unsecured Creditors Up To 65% Recovery
HERTZ CORPORATION: Moody's Affirms Corporate Family Rating at 'B1'
HOPEWELL BAPTIST: Voluntary Chapter 11 Case Summary
HOWARD HOOD: Case Summary & 12 Largest Unsecured Creditors
JAMES ARCHIBALD: Voluntary Chapter 11 Case Summary
JEFFREY MCCONVILLE: Case Summary & 12 Largest Unsecured Creditors
JOHN MCMANUS: Voluntary Chapter 11 Case Summary
JOHN RODOLPH: Case Summary & 20 Largest Unsecured Creditors
JOSH WITTE: Case Summary & 20 Largest Unsecured Creditors
KANSAS CITY: S&P Puts 'B' Corp. Rating on CreditWatch Positive
KGB: S&P Affirms Corporate Credit Rating at 'B+'
KING PHARMACEUTICALS: Moody's Affirms 'Ba3' Corp. Family Rating
LAKE AT LAS VEGAS: Hearing on Water Pacts Slated for May 13
LANDRY'S RESTAURANTS: Gets Court Approval to Acquire Oceanaire
LEGACY AT JORDAN LAKE: Files for Chapter 11
LEHMAN BROTHERS: Miller Testifies in Court on Barclays Deal
LIFEMASTERS SUPPORTED: Unsecureds Recovery Dependent on CMS Claim
LODGIAN INC: Completes Merger With Lone Star Affiliate
LODGENET INTERACTIVE: Pinnacle Holds 4.96% of Common Stock
LODGENET INTERACTIVE: Victorian Capital Holds 2.92% of Shares
LYONDELL CHEMICAL: Expects to Emerge from Chapter 11 Today
LYONDELL CHEMICAL: Proposes to Set Distribution Reserve Amount
LYONDELL CHEMICAL: US Environmental Deal Gets Nod Over Objections
MAHALO ENERGY: Consummates Plan to Cede Control to Ableco
MALIBU ASSOCIATES: To Pay Unsecureds in Full Without Interest
MARK PLANTIER: Case Summary & 11 Largest Unsecured Creditors
MARY PALUMBO: Case Summary & 20 Largest Unsecured Creditors
MERIDIAN RESOURCE: Adjourns Shareholders Meet Regarding Merger
MOLL INDUSTRIES: Returns to Chapter 11
MOLL INDUSTRIES: Case Summary & 21 Largest Unsecured Creditors
MOUNT SINAI: Moody's Reviews 'Ba2' Long-Term Bond Ratings
MURPHY PROPERTIES: Case Summary & 20 Largest Unsecured Creditors
NATIONWIDE HEALTH: Fitch Affirms Preferred Stock Rating at 'BB+'
NAVJOT LLC: Case Summary & 14 Largest Unsecured Creditors
NEENAH ENTERPRISES: Has June 23 Plan Confirmation Hearing
NEWLOOK INDUSTRIES: Sees Delay in Filing of Financials
NORTEL NETWORKS: Argentina Unit to Sell Assets to Ciena
NORTEL NETWORKS: CCAA Stay Period Extended Until July 22
NORTEL NETWORKS: Completes Sale of GSM/GSM-R Business
NORTEL NETWORKS: Court OKs Sale of Enterprise Unit to Avaya
NORTEL NETWORKS: District Court Denies Stay for U.K. Agency
NORTEL NETWORKS: Wants Court to Determine 2009 Tax Liabilities
OCEANAIRE TEXAS: Landry's Restaurants Gets Approval to Buy Firm
ODYSSEY PETROLEUM: Has Notice of Default on Late Financials
ODYSSEY PETROLEUM: Files for Chapter 11 in Mississippi
OEMC, LLC: Case Summary & 20 Largest Unsecured Creditors
ORLEANS HOMEBUILDERS: Liberty Mutual Objects to Sale
PACIFIC CAPITAL: Ford to Invest $500MM & Acquire 91% Stake
PACIFIC CAPITAL: Posts $79.9MM Net Loss for First Quarter 2010
PALM INC: Expects Between $90MM and $100MM in Q4 Revenues
PALM INC: Hewlett-Packard to Acquire Business for $1.2 Billion
PALM INC: Moody's Reviews 'B3' Corporate Family Rating
PHONETIME INC: Reveals Change to its Board of Directors
PMI GROUP: S&P Assigns 'CCC+' Rating on $261 Mil. Senior Notes
PORSCHE AUTOMOBILE: Losses From Lawsuit Expands to $2 Billion
PROTECTION ONE: Monarch Agrees to Support GTCR Acquisition
RCLC INC: Further Extends Lender Forbearance Agreement
REMEDIATION FINANCIAL: Plan Outline Hearing Continued Until May 11
RONALD HOLLEY: Case Summary & 20 Largest Unsecured Creditors
ROSEMARIE DEVELOPMENT: Case Summary & 14 Largest Unsec Creditors
ROYAL CARIBBEAN: S&P Gives Stable Outlook; Affirms 'BB-' Rating
S. P. INTERNATIONAL: Voluntary Chapter 11 Case Summary
SAC II: Section 341(a) Meeting Scheduled for May 24
SEAGATE TECHNOLOGY: Fitch Upgrades Issuer Default Rating to 'BB+'
SHARPER IMAGE: Has Green Light to Sue Ex-CEO to Recoup Severance
SIX FLAGS: To Have Confirmed Chapter 11 Reorganization Plan
SOUTHLAND PROPERTIES: Chapter 11 Case Summary & Unsecured Creditor
SPANSION INC: Noteholders Appeal Confirmation Order
SPECIALTY ACQUISITION: Files List of 3 Largest Unsecured Creditors
SPECIALTY ACQUISITION: Section 341(a) Meeting Scheduled for May 17
SPECIALTY TRUST: Files List of Seven Largest Unsecured Creditors
SPECIALTY TRUST: Section 341(a) Meeting Scheduled for May 24
STERLING FINANCIAL: Reaches Agreement with U.S. Treasury
SUNBELT GRAIN: No Equitable Subordination Ruling Affirmed
SUNRISE SENIOR: Completes Partial Settlement with Four Lenders
SW BOSTON: Files for Bankruptcy Protection
SW BOSTON: Case Summary & 20 Largest Unsecured Creditors
TARABRAD INCORPORATED: Voluntary Chapter 11 Case Summary
TAYLOR BEAN: Court OKs Sale of MBS Portfolio to Angelo Gordon
THE LEGACY: Case Summary & 12 Largest Unsecured Creditors
THE NRRE: Chapter 11 Case Summary & Unsecured Creditor
THOS. M. MADDEN: Case Summary & 20 Largest Unsecured Creditors
TORNADO PIZZA: Stay Had No Effect on Franchise Agreement
TOUSA INC: Court Approves Tortosa HOA Settlement
TOUSA INC: Parties Object to Panel Plea to Set Payments
TOUSA INC: Receives Interim Approval to Cash Collateral Use
TRES LAWER: Case Summary & 9 Largest Unsecured Creditors
TRONOX INC: Plan-Filing Exclusivity Extended Until July 12
TRONOX INC: Court Approves Entry Into Century Settlement
TRONOX INC: Court Rejects Anadarko Request to Dismiss Lawsuit
TRONOX INC: Time to Remove Actions Extended to September 30
UAL CORP: May Announce Merger Deal with Continental on Monday
UAL CORP: Executives to Get Millions if Merger Closes
UNITED WESTERN: Unit Files Civil Case Against Countrywide
U.S. CONCRETE: Reaches Deal with Bondholders on Restructuring
U.S. CONCRETE: Comerica Provides $15MM Loan Facility to JV Units
VERTIS HOLDINGS: Commences Comprehensive Refinancing Plan
VERTIS HOLDINGS: Early Consent Dates Expire
VISKASE COS: Moody's Assigns 'B2' Rating on $30 Mil. Notes
VISKASE COS: S&P Affirms Corporate Credit Rating at 'B-'
VISTEON CORP: U.S. Trustee Defends Decision on Equity Panel
VITESSE SEMICONDUCTOR: Lake Union Holds 7.4% of Common Stock
VYTERIS INC: Annual Stockholders' Meeting Set for June 16
VYTERIS INC: Ferring Demands $1,653,000 for Breach
WALID HAZIN: Case Summary & 20 Largest Unsecured Creditors
WASHINGTON MUTUAL: Shareholders Panel Seeking Examiner
WELLINGTON PRESERVE: Case Summary & 19 Largest Unsecured Creditors
W.R. GRACE: Has OK to Contribute $9.9 Million to Pension Plan
W.R. GRACE: Law Firms Seek Payment of Fees for Adversary Cases
W.R. GRACE: Proposes Amended EMC & MMO Settlement
WYNN LAS: S&P Changes Outlook to Stable; Affirms 'BB' Rating
YALE SAGE: Voluntary Chapter 11 Case Summary
ZAVARRELLA FAMILY: Case Summary & Largest Unsecured Creditor
* Oregon Investment Council to Invest in Failed Banks
* Former U.S. Trustee Kelly Beaudin Stapleton Joins MorrisAnderson
* BOOK REVIEW: Corporate Turnaround - How Managers Turn Losers
Into Winners!
*********
2737 MEMORIAL: Case Summary & 4 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: 2737 Memorial LLC
dba Buddha Tao Asian Bistro
1927 South Boston Avenue, Suite 205
Tulsa, OK 74119
Bankruptcy Case No.: 10-12503
Chapter 11 Petition Date: April 28, 2010
Court: U.S. Bankruptcy Court
Western District of Oklahoma (Oklahoma City)
Judge: Niles L. Jackson
Debtor's Counsel: James H. Bellingham, Esq.
2050 Oklahoma Tower
210 Park Avenue, Suite 2050
Oklahoma City, OK 73102
Tel: (405) 235-9371
E-mail: jbellingham@bcllawfirm.com
Estimated Assets: $0 to $50,000
Estimated Debts: $1,000,001 to $10,000,000
A copy of the Company's list of 4 largest unsecured creditors
filed together with the petition is available for free at
http://bankrupt.com/misc/okwb10-12503.pdf
The petition was signed by Tony R. Henry, member manager.
ACCESS PHARMACEUTICALS: Annual Stockholders' Meeting on May 26
--------------------------------------------------------------
The Annual Meeting of Stockholders of Access Pharmaceuticals,
Inc., will be held at the offices of Bingham McCutchen LLP, 399
Park Avenue, 21st Floor, in New York, on May 26, 2009, at 9:00
a.m., local time, for these purposes:
1. To elect two Class 3 Directors to hold office for a term
of three years and until their successors are elected and
qualified.
2. To amend the Company's 2005 Equity Incentive Plan to
increase the number of shares of common stock reserved for
issuance thereunder.
3. To ratify the appointment of Whitley Penn LLP as the
Company's independent registered public accounting firm
for the fiscal year ending December 31, 2010.
4. To transact other business as may properly come before the
Meeting or any postponements or adjournments thereof.
The Board of Directors has fixed the close of business on April 1,
2010, as the record date for the determination of stockholders
entitled to receive notice of, and to vote at, the Meeting and any
adjournment or postponement thereof.
A full-text copy of the Company's proxy statement is available at
no charge at http://ResearchArchives.com/t/s?6030
Access Pharmaceuticals, Inc., is an emerging biopharmaceutical
company focused on developing a range of pharmaceutical products
primarily based upon the Company's nanopolymer chemistry
technologies and other drug delivery technologies. The Company
currently has one approved product, one product candidate at Phase
3 of clinical development, three product candidates in Phase 2 of
clinical development and other product candidates in pre-clinical
development.
At December 31, 2009, the Company's balance sheet showed
$1,583,000 in total assets and $28,572,000 in total liabilities
for $26,989,000 in stockholders' deficit.
Whitely Penn LP of Dallas, Texas, expressed substantial doubt
against Access Pharmaceuticals' ability as a going concern. The
firm reported that the Company has had recurring losses from
operations, negative cash flows from operating activities and has
an accumulated deficit.
ACCESS PHARMACEUTICALS: Registers 9,160,228 Shares
--------------------------------------------------
Access Pharmaceuticals, Inc., has filed with the Securities and
Exchange Commission a Post-Effective Amendment No. 2 to Form S-1
Registration Statement under the Securities Act of 1933 to delay
the effective date of the registration statement. Access
Pharmaceuticals is seeking to register a total of 9,160,228 shares
of common stock. Pursuant to the registration statement and
accompanying prospectus:
(1) 7,577,868 shares are issuable to selling stockholders
upon conversion of Series A Preferred Stock.
(2) 1,582,360 shares of Common Stock that may be issued as
dividends on the Series A Preferred Stock.
The proposed maximum aggregate offering price is $22,900,570.
As of April 23, 2010 1,366,820 shares of Common Stock have been
previously been issued as dividends to the Series A Preferred
Stock stockholders. There are 215,540 shares of Common Stock
remaining that may be issued as dividends on the Series A
Preferred Stock.
A full-text copy of the Post-Effective Amendment No. 2 is
available at no charge at http://ResearchArchives.com/t/s?60e9
Earlier this month, Access Pharmaceuticals also filed with the
Securities and Exchange Commission a Post-Effective Amendment No.
1 to Form S-1 Registration Statement under the Securities Act of
1933 to delay the effective date of the registration statement.
Pursuant to this registration statement and related prospectus,
Access seeks to register $2,551,505.95 in common shares, which
represents 1,041,431 shares of common stock that may be issued
upon exercise of certain common stock purchase warrants. All of
the shares are offered by certain selling stockholders.
A full-text copy of the Post-Effective Amendment No. 1 is
available at no charge at http://ResearchArchives.com/t/s?60ea
About Access Pharmaceuticals
Access Pharmaceuticals, Inc., is an emerging biopharmaceutical
company focused on developing a range of pharmaceutical products
primarily based upon the Company's nanopolymer chemistry
technologies and other drug delivery technologies. The Company
currently has one approved product, one product candidate at Phase
3 of clinical development, three product candidates in Phase 2 of
clinical development and other product candidates in pre-clinical
development.
At December 31, 2009, the Company's balance sheet showed
$1,583,000 in total assets and $28,572,000 in total liabilities
for $26,989,000 in stockholders' deficit.
Whitely Penn LP of Dallas, Texas, expressed substantial doubt
against Access Pharmaceuticals' ability as a going concern. The
firm reported that the Company has had recurring losses from
operations, negative cash flows from operating activities and has
an accumulated deficit.
AFC ENTERPRISES: 2010 Annual Shareholders' Meeting Set for May 20
-----------------------------------------------------------------
The 2010 Annual Meeting of Shareholders of AFC Enterprises, Inc.,
will be held on May 20, 2010, at the Hilton Garden Inn Atlanta
Perimeter, 1501 Lake Hearn Drive, in Atlanta, Georgia. The 2010
Annual Meeting will start at 8:30 a.m., local time.
Items of Business are:
(1) To elect seven directors nominated by the Board of
Directors to the Company's Board of Directors;
(2) To ratify the appointment of PricewaterhouseCoopers LLP
as the Company's independent registered public accounting
firm for the fiscal year ending December 26, 2010;
(3) To approve the material terms of the performance goals
under the AFC Enterprises, Inc. Annual Executive Bonus
Program; and
(4) To transact other business properly coming before the
meeting or any adjournment thereof.
Shareholders of record of the Company's common stock, par value
$.01 per share, on April 9, 2010, are entitled to vote at the
meeting.
A full-text copy of the Company's proxy statement is available at
no charge at http://ResearchArchives.com/t/s?60df
About AFC Enterprises
AFC Enterprises, Inc. (NASDAQ: AFCE), develops, operates and
franchises quick-service restaurants under the trade names
Popeyes(R) Chicken & Biscuits and Popeyes(R) Louisiana Kitchen.
The Company operates two business segments: franchise restaurants
and company-operated restaurants.
The Company's balance sheet as of December 27, 2009, showed
$116.6 million in total assets and $134.8 million in total
liabilities, resulting in a $18.2 million stockholders' deficit.
* * *
As reported by the Troubled Company Reporter on December 18, 2009,
Moody's Investors Service affirmed all ratings of AFC Enterprises,
including its B1 Corporate Family Rating and Ba3 rating of its
senior secured credit facilities, with a stable outlook. Its
Speculative Grade Liquidity rating was affirmed at SGL-3
concurrently.
AFTERSOFT GROUP: Posts $719,000 Net Loss in Q3 Ended March 31
-------------------------------------------------------------
Aftersoft Group, Inc., filed on April 26, 2010, its quarterly
report on Form 10-Q, showing a net loss of $719,000 on $5,550,000
of revenue for the three months ended March 31, 2010, compared
with a net loss of $315,000 on $5,027,000 of revenue for the same
period of 2009.
The Company's balance sheet as of March 31, 2010, showed
$19,085,000 in assets, $14,326,000 of debts, and $4,759,000 of
stockholders' equity.
The Company had an accumulated deficit of $23,660,000 and a
working capital deficit of $7,692,000 at March 31, 2010. The
Company does not expect to be able to make the $3,125,000 balloon
payment due in November 2010 on its Term Loan. These factors
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?60e6
Aftersoft Group, Inc. (OTC BB: ASFG)--
http://www.aftersoftgroup.com/-- is a supplier of Enterprise
Resource Planning ("ERP") supply chain management solutions to
automotive parts manufacturers, distributors and retailers.
ALAIN SALMEA: Case Summary & 6 Largest Unsecured Creditors
----------------------------------------------------------
Debtor: Alain Salmea
433 Tower Road
Beverly Hills, CA 90210
Bankruptcy Case No.: 10-26205
Chapter 11 Petition Date: April 27, 2010
Court: U.S. Bankruptcy Court
Central District of California (Los Angeles)
Judge: Vincent P. Zurzolo
Debtor's Counsel: Blake Lindemann, Esq.
433 N Camden Drive 4th Floor
Beverly Hills, CA 90210
Tel: (310) 279-5269
Fax: (310) 279-5370
E-mail: blindemann@llgbankruptcy.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 6 largest unsecured creditors filed
together with the petition is available for free at
http://bankrupt.com/misc/cacb10-26205.pdf
The petition was signed by the Debtor.
ALERIS INT'L: Proposes to Enter Into $500 Million Exit Facility
---------------------------------------------------------------
Aleris International, Inc., and its debtor affiliates seek
approval from Judge Brendan L. Shannon of the U.S. Bankruptcy
Court for the District of Delaware to enter into a commitment
letter and closing fee letter with respect to their proposed exit
financing facility.
Paul N. Heath, Esq., at Richards, Layton & Finger, P.A., in
Wilmington, Delaware -- heath@rlf.com -- relates that in order to
finance their administrative expenses incurred in connection with
their emergence from bankruptcy, permit the refinancing of loans
and the rollover of existing letters of credit outstanding under
the current DIP Asset-Based Lending Credit Facility, and to
provide for their working capital needs and general corporate
requirements, the Debtors are seeking a first-lien senior secured
asset-based financing for $500 million. The Exit ABL Facility
will be entered into on or after the Effective Date by certain of
the Reorganized Debtors, he says.
Accordingly, the Debtors seek the Court's permission to enter
into the Commitment Letter, including the term sheet, and the
related Fee Letters with:
(a)(i) Bank of America, N.A., as administrative agent; Bank of
America Securities, LLC, as lead arranger; and
(ii) J.P. Morgan Securities Inc., as lead arranger;
(b)(i) BofA Securities;
(ii) JPM Securities;
(iii) Barclays Bank PLC;
(iv) Deutsche Bank Securities Inc.; and
(v) UBS Securities LLC;
(c)(i) RBS Business Capital, a division of RBS Asset
Financing, Inc., a subsidiary of RBS Citizens, N.A.;
and
(ii) KeyBank National Association, each as a senior managing
agent;
(d) JPM Securities as syndication agent;
(e) Bank of America, Deutsche Bank AG New York Branch AG and
JPMorgan Chase Bank, N.A., each as Co-Collateral Agent;
(f) Barclays, DB and UBS, each as a Co-Documentation Agent;
and
(g) the parties who have committed to fund the Exit ABL
Facility.
The Commitment Parties intend to syndicate the exit ABL Facility
to one or more other financial institutions reasonably acceptable
to the Borrowers and to Oaktree Capital Management L.P. and
Apollo ALS Holdings, L.P.
The Commitment Letter and the
Exit ABL Facility
The major terms of the Commitment Letter are:
The Commitment: The total commitment is $500 million.
Fees: The aggregate amount of fees associated with the
structuring, underwriting, commitment, and
arrangement of the Exit ABL Facility is up to
approximately $16 million. Fee payable under
the Fee Letters will be paid upon the closing of
the Exit ABL Facility.
Expense
Reimbursement: The Debtors agree to reimburse fees and expenses
of the Arrangers and their affiliates arising in
connection with the Commitment Letter,
consummation of the Plan, entry into the Exit
ABL Facility, and syndication of the loans.
Reimbursable fees and expenses will be paid upon
the closing of the Exit ABL Facility.
Indemnification: The Debtors agree to indemnify and hold harmless
the Administrative Agent, the Arrangers, the
Co-Collateral Agents, the Senior Management
Agents, the Syndication Agent, and each other
agent or co-agent designated in connection with
the ABL Exit Facility, each lender, and its
affiliates, successors and assigns.
Expiration of
Commitment: 5:00 p.m., New York time, on August 6, 2010,
unless prior to that time the Plan will have
become effective and the financing consummated.
A full-text copy of the Commitment Letter is available for free
at http://bankrupt.com/misc/Aleris_CommitmentLetter.pdf
The Debtors have also sought the Court's approval to file under
seal the closing fee letter and certain fee letters relating to
their proposed exit-financing. The Debtors assert that the
information contained in the Fee Letters falls squarely within
the scope of protection offered by Section 107(b) of the
Bankruptcy Code. According to the Debtors, the Fee Letters
contain confidential commercial information regarding the fees,
individual commitment amounts, minimum hold amounts, and other
terms agreed to among the Debtors and the Commitment Parties in
order to effectuate and implement the Exit ABL Facility.
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)
ALERIS INT'L: Wants to Reject Fellon-McCord Contract
----------------------------------------------------
Aleris International, Inc., seeks the Court's authority to reject
a consulting and management contract with Fellon-McCord &
Associates, LLC.
The Parties entered into the Contract in 2006 whereby Fellon-
McCord agreed to provide certain services to Aleris, including,
among other things, providing advice on energy purchases and
sales from producers and suppliers and centralized energy usage
reporting for Aleris facilities.
Aleris determined, however, that it no longer required Fellon-
McCord's services. Accordingly, in a letter dated February 4,
2010, Aleris notified Fellon-McCord that it no longer required
its services pursuant to the Contract and requested that Fellon-
McCord cease providing all those services immediately.
By letter dated February 5, 2010, Fellon-McCord refused to agree
to a consensual termination of the Contract. The Fellon-McCord
Letter maintained that, in order to terminate the Contact, Aleris
was required to give 60 days' written notice.
Since February 5, 2010, the Parties have attempted to terminate
that Contract consensually, in order to eliminate the need to
formally reject the Contract pursuant to the Bankruptcy Code.
The Parties reached a mutual understanding that the Contract
would terminate on February 28, 2010. Accordingly, Aleris agreed
to permit Fellon-McCord to continue to render services to Aleris
from February 5 until February 28, in order to afford Fellon-
McCord adequate time to "phase out" its performance under the
Contract.
Even though the Parties agreed that the Contract would terminate
on February 28, they have been unable to reach a final agreement
terminating the Contract.
Thus, Aleris asks the Court to approve the rejection of the
Contract effective February 28, 2010.
A full-text copy of the Contract is available for free at:
http://bankrupt.com/misc/Aleris_FellonContract.pdf
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)
ALERIS INT'L: Proposes to Terminate 3 U.S. Pension Plans
--------------------------------------------------------
Aleris Int'l Inc. and its units seek the U.S. Bankruptcy Court's
authority to terminate three of their defined benefit pension
plans in the United States:
(1) the Commonwealth Aluminum Lewisport, LLC Hourly Employees
Pension Plan;
(2) the Commonwealth Industries, Inc. Cash Balance Plan; and
(3) the Alsco Metals Corporation Retirement Plan for Bargained
Employees.
The U.S. Debtors refer to the Debtors which filed for bankruptcy
protection on February 12, 2009.
The Debtors ask the Court to determine that the financial
requirements for a "distressed determination" of the defined
benefit pension plans are satisfied under Section 4041(c)(2)(B)
of the Employees Retirement Income Security Act of 1974, as
amended.
The pension plans have significant unfunded benefit liabilities
-- approximately $47 million in total as of February 12, 2009,
Paul N. Heath, Esq., at Richards, Layton & Finger, P.A., in
Wilmington, Delaware, relates. Those unfunded benefit
liabilities generally have the status of prepetition, unsecured
claims against the U.S. Debtors' estates and accordingly are
subordinated to the debt claims of holders of perfected security
interests against substantially all of the assets of the U.S.
Debtors and to all administrative expense claims, he adds.
According to Mr. Heath, the aggregate debt claims of the U.S.
Debtors' secured creditors (in excess of $1 billion) and the U.S.
Debtors' administrative expense claims relating to debtor-in-
possession financing (also in excess of $1 billion) dwarf the
value of the pledged assets of the U.S. Debtors, as well as the
estimated enterprise value of the U.S. Debtors (approximately
$712.5 million). As a result, Mr. Heath maintains, the aggregate
secured debt and administrative expense claims cannot be paid in
full by the U.S. Debtors under any reasonable likely plan of
reorganization.
"The financial condition of the U.S. Debtors and their
subsidiaries satisfies the statutory criteria for a distress
termination of the Pension Plans because the approval of the
secured creditors and certain administrative expense claim
holders would be required for the Plan or any reasonably likely
plan of reorganization," Mr. Heath avers.
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)
ALLEGHENY ENERGY: Moody's Affirms Ba1 Senior Unsecured Rating
-------------------------------------------------------------
Moody's Investors Service upgraded the ratings of West Penn Power
Company, including its senior unsecured debt to Baa2 from Baa3,
and affirmed the ratings of parent Allegheny Energy, Inc. (AYE:
Ba1 senior unsecured) and the ratings of affiliate Potomac Edison
Company's, including its Issuer Rating at Baa3 and its First
Mortgage Bond rating at Baa1. In conjunction with this rating
action, Moody's has assigned a Baa2 rating to WPP's planned
$200 million senior unsecured credit facility, a Ba1 rating to
AYE's planned $250 million senior unsecured credit facility, and a
Baa3 rating to PEC's planned $150 million senior unsecured
facility. The rating outlook for WPP, AYE, and PEC is stable.
"The rating action factors in a substantially improved liquidity
profile at AYE and its operating subsidiaries, an expectation that
WPP will retain credit metrics in line with other mid-Baa
utilities following the transition to market rates for generation
in Pennsylvania, and Moody's belief that such transition is likely
to occur in a relatively benign way," said A.J. Sabatelle, Senior
Vice President of Moody's.
The upgrade at WPP considers the improved liquidity prospects with
the company's planned establishment of its own $200 million three
year revolver, reflects the expected continuation of strong
fundamental credit metrics after WPP's customers transition to
market rates for generation beginning in 2011, and factors in
Moody's view that the transition appears likely to be relatively
seamless. While the company's historical credit metrics could
justify a higher rating in accordance with Moody's rating
methodology for regulated utilities, credit metrics over the next
several years are expected to be more in line with other mid-Baa
rated transmission and distribution companies. Specifically,
Moody's expect the ratio of cash flow (CFO pre W/C) to debt to
approximate 17% in most years and interest coverage to be around
3.5x. While future capital requirements are expected to increase
due to infrastructure requirements associated with the
distribution business, cash flow metrics are not likely to weaken
materially as Moody's understand that WPP has the right to recover
agreed-upon capital and operating costs on a timely basis as the
infrastructure is being built, based on legislation passed in the
state.
The rating affirmation at AYE considers the rating upgrade at WPP
as well as the company's focus on growing its transmission
business, all of which are balanced against the somewhat less
predictable cash flow and earnings driven by a reasonably well-
positioned generation subsidiary, Allegheny Energy Supply Company,
LLC (AYE Supply: Baa3 senior unsecured). The rating considers the
company's sizeable capital expenditure program, but recognizes
that a meaningful portion of these costs have either already been
completed, were pre-funded through the issuance of securitization
bonds, or can be collected from ratepayers during construction.
The rating affirmation recognizes the degree of structural
subordination that exists at AYE as more than $4.5 billion
(including securitization debt) is structurally superior to any
obligations at AYE.
PEC's rating affirmation considers the historical financial
performance of the company along with the near completion of the
transition to market based rates for generation that is occurring
in two of the states served by PEC. The rating also factors in
the financial and operational inter-relationship of the AYE family
of companies. AYE effectively manages all of its regulated
operating subsidiaries as a single system, including PEC. For
this reason, the ratings of the utilities tend to be closely
aligned. The rating action also considers plans by AYE to sell
its Virginia electric distribution business to a group of electric
cooperatives, which still requires various regulatory approvals.
Net proceeds from the sale are expected to be applied in a
conservative way across the company.
Moody's views favorably actions taken by AYE's management to
materially enhance liquidity throughout the organization by not
only increasing the size of the company's working capital
facilities but establishing separate credit facilities at primary
operating companies. Since September 2009 AYE has increased the
total amount of working capital credit facilities throughout the
organization by more than $650 million to $2.06 billion and now
has separate credit facilities at each of the primary operating
subsidiaries and at the parent. The three new credit facilities
being established at WPP, AYE, and PEC total $600 million and have
very similar terms and conditions including a three year tenor.
Moody's understand that each of the facilities have limited
conditionality to accessing funds under the facility, including no
MAC representation required for new borrowings after the initial
borrowing, and the requirement that total debt (excluding
securitization debt) not exceed 65% of total capitalization.
The rating action also recognizes the planned merger between AYE
and FirstEnergy Corporation (FE: Baa3 senior unsecured; stable
outlook) in a stock-for-stock transaction that values AYE's equity
at $4.7 billion. Under the terms of this merger, FE will be the
surviving parent company upon consummation of the transaction.
Both shareholder and regulatory approvals are required and the
expected timeframe for merger closure is 2011.
The stable rating outlooks for WPP, AYE, and PEC reflects the
expected continuation of predictable earnings and cash flow over
the next several years. The stable rating outlook anticipates
that the transition to market rates in Pennsylvania will continue
to proceed in a credit supportive fashion and that the capital
investment program will be financed in a manner that is reasonably
conservative.
The last rating action on WPP, AYE, and PEC occurred on February
11, 2010 when Moody's affirmed the ratings with a stable outlook
following the announcement that AYE and FE were planning to merge.
Upgrades:
Issuer: West Penn Power Company
-- Issuer Rating, Upgraded to Baa2 from Baa3
-- Senior Secured First Mortgage Bonds, Upgraded to A3 from Baa1
-- Senior Secured Regular Bond/Debenture, Upgraded to A3 from
Baa1
-- Senior Unsecured Regular Bond/Debenture, Upgraded to Baa2
from Baa3
Assignments:
Issuer: Allegheny Energy, Inc.
-- Senior Unsecured Bank Credit Facility, Assigned Ba1
Issuer: Potomac Edison Company (The)
-- Senior Unsecured Bank Credit Facility, Assigned Baa3
Issuer: West Penn Power Company
-- Senior Unsecured Bank Credit Facility, Assigned Baa2
Moody's will withdraw the Ba1 rating on AYE's existing
$376 million (original amount was $400 million) revolver due
May 22, 2011, upon the closing of the new $250 million revolving
credit facility.
Headquartered in Greensburg, PA, AYE is a utility holding company
with total assets of $11.6 billion at 12/31/2009.
AMERICAN HOMEPATIENT: Inks Restructuring Deal with Lenders
----------------------------------------------------------
American HomePatient, Inc., has entered into an agreement with its
senior debt holders and its largest stockholder, an investment
fund managed by Highland Capital Management, to complete
transactions that are intended to result in a going-private
transaction followed by a restructuring of the Company's senior
debt. The restructuring agreement contemplates that the Company
will seek shareholder approval to reincorporate in Nevada, and, if
approved, the Nevada entity will commence a tender offer to
acquire all outstanding shares of stock not held by Highland
managed accounts for $0.67 per share. If these transactions are
completed, the stock of American HomePatient stock would cease to
be publicly traded.
"We are pleased to have an agreement that provides fair value to
our stockholders, extends our relationship with our debt holders,
and allows American HomePatient and its employees to continue to
focus on providing critical services to our customers," said
Joseph F. Furlong, President and Chief Executive Officer of
American HomePatient.
As previously announced, approximately $226 million was due to be
repaid in full by the Company on the maturity date of August 1,
2009, and the Company was in default as a result of being unable
to repay or refinance the senior debt prior to maturity. Since
such date, the Company has been operating under a series of
negotiated short-term forbearance agreements in which the lenders
voluntarily agreed to take no actions against the Company as a
result of the default.
If the reincorporation in Nevada is not approved, the tender offer
and subsequent debt restructuring will not occur. If the tender
offer is completed, the Company's senior secured debt will be
restructured with a new four year term. If the tender offer is
not completed, the Company will remain in default of its
obligations to its senior lenders, the consensual long-term
restructuring of the Company's debt will not occur, and American
HomePatient may make a Chapter 11 bankruptcy filing. The outcome
for existing stockholders in any bankruptcy would be highly
uncertain.
American HomePatient currently anticipates conducting its annual
meeting of stockholders on June 21, 2010, at which stockholders
would vote on the plan to reincorporate to Nevada. Stockholders
of record on May 14, 2010 will be eligible to vote on the
proposal. A Highland managed account, which owns approximately 48
percent of the outstanding shares, has agreed to vote all of its
shares in favor of the reincorporation plan. If its stockholders
approve the reincorporation, the Company expects that the tender
offer will be commenced shortly thereafter. The offer would be
open for 20 business days.
The restructuring plan was approved by a Special Committee of the
Board of Directors of American HomePatient. Raymond James &
Associates, Inc. is serving as financial advisor to the Special
Committee.
The Company also announced today that it has retired $10,157,078
of its secured debt held by a single lender, at a 15% discount.
About American HomePatient
American HomePatient, Inc., is one of the nation's largest home
health care providers with operations in 33 states. Its product
and service offerings include respiratory services, infusion
therapy, parenteral and enteral nutrition, and medical equipment
for patients in their home. American HomePatient, Inc.'s common
stock is currently traded in the over-the-counter market or, on
application by broker-dealers, in the NASD's Electronic Bulletin
Board under the symbol AHOM or AHOM.OB.
AMERICAN MORTGAGE: Files Chapter 11 Plan of Reorganization
----------------------------------------------------------
BankruptcyData.com reports that American Mortgage Acceptance filed
with the U.S. Bankruptcy Court a Chapter 11 Plan of Reorganization
and related Disclosure Statement.
According to the Disclosure Statement, "Under the Plan, the Debtor
will transfer certain assets to Teberna Preferred Funding I, Ltd.
in satisfaction of Taberna's claims against the Debtor. The old
common stock of the Debtor will be cancelled, and the Reorganized
Debtor will issue the new common stock to C-III Capital Partners
LLC, in satisfaction of C-III's claims against the Debtor. Any
administrative claims, allowed tax claims, allowed priority non-
tax claims and allowed unsecured claims other than the claims of
C-III and Taberna will be paid in full under the Plan. Holders of
equity interests will receive no distribution under the Plan, and
all equity interests will be cancelled. The Debtor will maintain
REIT status, and as soon as practicable after the effective date,
the Debtor will issue new preferred shares to raise capital to
fund ongoing operations.The Debtor believes that the only real
alternative to the Plan is conversion of the Debtor's case to case
under Chapter 7 of the Bankruptcy Code..The Debtor believes that a
Chapter 7 would be more expensive and less efficient than the
reorganization proposed by the Plan, and that the creditors would
receive less in a Chapter 7 case than they will receive under the
Plan."
Based in New York City, American Mortgage Acceptance Company (NYSE
Alternext:AMC) -- http://www.americanmortgageco.com/-- is a
real estate investment trust (REIT). The Company operates in
one business segment, which focuses on investing in mortgage
loans and other debt instruments secured by multifamily and
commercial property throughout the United States.
About American Mortgage
American Mortgage Acceptance Co. on April 26 filed for Chapter 11
protection in Manhattan (Bankr. S.D.N.Y. Case No. 10-12196). The
Company listed assets of just $6,366,680 and liabilities of
$119,968,443. American Mortgage had $666 million of assets in
2007. Attorneys at Reid and Riege, P.C. and Platzer, Swergold,
Karlin, Levine Goldberg & Jaslow, LLP represent the Debtor in its
Chapter 11 effort.
AMERISTAR CASINOS: Moody's Withdraws Rating on $384 Mil. Loan
-------------------------------------------------------------
Moody's Investors Service withdrew the rating on Ameristar
Casinos, Inc.'s $384 million term loan facility that expires in
November 2012 because of business reasons. Moody's also affirmed
Ameristar's Ba3 Corporate Family and Probability of Default
ratings along with its B2 senior unsecured note ratings. The
company's SGL-2 Speculative Grade Liquidity rating was also
affirmed. The rating outlook is stable.
Ameristar's Ba3 Corporate Family Rating reflects the company's
very profitable operation relative to its peers, and positive free
cash flow profile despite weak U.S. gaming industry fundamentals.
Key concerns include Ameristar's moderate cash flow
diversification and Moody's current expectation that business
fundamentals for the sector will continue to weaken through 2010
and possibly 2011.
The stable rating outlook anticipates that Ameristar will be able
to boost its free cash flow and reduce leverage despite weak
demand conditions. These factors along with Ameristar's good
liquidity should make it possible for the company to achieve and
sustain debt/EBITDA at below 5 times -- the target leverage level
needed for the company to maintain its current rating.
Debt/EBITDA for the period ended Dec. 31, 2009 was about 5.2
times.
Rating withdrawn:
* $388 million term loan B due 2012 at Ba2 (LGD 3, 30%)
Ratings affirmed:
* Corporate Family Rating at Ba3
* Probability of Default Rating at Ba3
* $650 million 9 ¬% senior unsecured notes due 2014 at B2 (LGD 5,
84%)
* Speculative Grade Liquidity rating at SGL-2
The last rating action for Ameristar occurred on March 25, 2010,
when Moody's withdrew the rating on the company's $150 million
senior secured revolving credit facility and affirmed all other
ratings.
Ameristar Casinos, Inc. owns and operates eight hotel/casinos
in six jurisdictions. The company generates approximately
$1.2 billion of consolidated net revenues.
AMTRUST FINANCIAL: Seeks to Retain NAI Dus as Real Property Broker
------------------------------------------------------------------
BankruptcyData.com reports that AmTrust Financial filed with the
U.S. Bankruptcy Court a motion seeking to retain Business Property
Specialists (dba NAI Dus) (Contact: Jeffrey M. Kahn) as real
property broker to market and sell certain real property located
at 22255 Center Ridge Road, Rocky River, OH 44116 and 26949
Chagrin Blvd., Beachwood, OH 44122. The firm will receive the
following fees: if Center Ridge is sold during the term of the
Center Ridge Agreement or within 180 days thereafter to anyone to
whom Center Ridge had been shown or submitted information during
the term of the Center Ridge Agreement, the Debtors will pay a
commission equal to 2% of the sale price and if Chagrin Blvd. is
sold during the term of the Chagrin Blvd.
Agreement or within 180 days thereafter to anyone to whom Chagrin
Blvd. had been shown or submitted information during the term of
the Chagrin Blvd. Agreement, the Debtors will pay to Daus a
commission equal to 2% of the sale price.
About AmTrust Financial
AmTrust Financial Corp. (PINK:AFNL) was the owner of the AmTrust
Bank. AmTrust was the seventh-largest holder of deposits in South
Florida, with $4.7 billion in deposits and 21 branches.
In November 2008, the Office of Thrift Supervision issued a cease
and desist order requiring AmTrust to improve its capital ratios.
AmTrust Financial, together with affiliates that include AmTrust
Management Inc., filed for Chapter 11 bankruptcy protection on
November 30, 2009 (Bankr. N.D. Ohio Case No. 09-21323). G.
Christopher Meyer, Esq., and Sherri Lynn Dahl, Esq., at Squire
Sanders & Dempsey L.L.P., assist the Debtors in their
restructuring effort. Kurtzman Carson Consultants serves as
claims and notice agent. Attorneys at Hahn Loeser & Parks LLP
serve as counsel to the Official Committee of Unsecured Creditors.
AmTrust Management listed $100,000,001 to $500,000,000 in assets
and $100,000,001 to $500,000,000 in liabilities.
AmTrust Bank is not part of the Chapter 11 filings. On
December 4, 2009, AmTrust Bank was closed by the Office of Thrift
Supervision, which appointed the Federal Deposit Insurance
Corporation as receiver. To protect the depositors, the FDIC
entered into a purchase and assumption agreement with New York
Community Bank, Westbury, New York, to assume all of the deposits
of AmTrust Bank.
ASSOCIATED BANC: S&P Puts 'BB-' Rating on CreditWatch Negative
--------------------------------------------------------------
Standard & Poor's Ratings Services said that it placed its
ratings, including the 'BB-' long-term counterparty credit rating,
on Associated Banc Corp. on CreditWatch with negative
implications.
"The CreditWatch listing reflects S&P's opinion that continued
elevated credit costs likely will further challenge the company's
profitability, at least through 2010," said Standard & Poor's
credit analyst Sunsierre Newsome. Associated reported a
$33.8 million loss for first-quarter 2010. This was the bank's
third quarterly loss within a year, after posting a loss for
fourth-quarter 2009 that was part of a $161.2 million annual loss.
The company undertook a more in-depth review of its credit
portfolio during 2009, which resulted in higher credit costs last
year, and persisted into first-quarter 2010. Provisions and
charge-offs remained above historical levels at $165 million and
$163 million, respectively, for the first quarter. S&P believes
that there could be more credit losses embedded in the portfolio
than S&P expects throughout 2010.
In S&P's view, Associated has a riskier loan portfolio than other
regional banks based on its loan mix. S&P takes a positive view
of Associated's successful Jan. 15, 2010, completion of a common
equity offering, resulting in a net increase in the company's
equity capital of approximately $478 million. As a result, the
company's tangible common equity ratio was 7.73% at the end of
March. This could keep the bank's capital above the ratio
requirement set in the memorandum of understanding that it entered
into with its regulator, the Office of the Comptroller of the
Currency on Nov. 5, 2009. However, S&P believes the company may
require additional capital if credit quality continues to
deteriorate at its current rapid pace.
ATRIUM COMPANIES: Court Confirms Plan of Reorganization
-------------------------------------------------------
Atrium Companies Inc. disclosed that the United States Bankruptcy
Court for the District of Delaware has confirmed its Plan of
Reorganization, positioning the Company to complete its
restructuring and emerge from Chapter 11 by April 30.
Under the Company's Plan of Reorganization, Golden Gate Capital
and Kenner and Company will acquire 92.5 percent of the
reorganized company's new common stock upon its emergence from
Chapter 11. The Company's bondholders will receive the remaining
7.5 percent of the reorganized company's new common stock.
Atrium Companies, Inc., headquartered in Dallas, TX, is one of the
leading manufacturers of residential vinyl and aluminum windows in
North America (based on units sold) producing approximately
3.5 million windows in 2009.
AUTOBACS STRAUSS: Headed for June 21 Plan Confirmation Hearing
--------------------------------------------------------------
Bill Rochelle at Bloomberg News reports that Autobacs Strauss
Inc., doing business as Strauss Discount Auto, is scheduled to
present its plan for confirmation on June 21, after it received
approval of the explanatory disclosure statement on April 27.
According to the report, pursuant to the Plan:
-- Unsecured creditors owed a total of $18.7 million will
recover up to 65%.
-- If the unsecured creditors don't recover at least 45%, they
end up owning all the new stock. If the 45% threshold is
met, Chief Executive Oficer Glenn Langberg has an option to
buy all the stock for $300,000. Recovery by unsecureds
will depend on the outcome of a lawsuit against the
Debtor's parent. In the lawsuit, the creditors committee
wants to subordinate or disallow $44 million in claims by
Autobacs Seven Co.
-- If unsecured creditors are paid 53.25% within two years of
when the plan becomes effective, the group will receive no
further distributions under the plan except recoveries from
the lawsuit against the former parent. If the two-year
target isn't met, unsecured creditors are entitled to
recover as much as 65%.
-- If creditors lose their suit against Autobacs Seven and the
parent's claim is allowed in full, the disclosure statement
tells unsecured creditors that their recovery is a
projected 14.6%, not including the value of the stock they
would receive.
Autobacs Seven contends the plan can't be confirmed because it
violates the absolute priority rule, which says that stockholders
can't retain ownership when creditors aren't paid in full. The
former parent notes that the current owner, GRL Capital Advisors
LLC, is making no contribution to the plan and therefore can't
retain its equity interest.
About Autobacs Strauss
Headquartered in South River, New Jersey, Autobacs Strauss Inc. --
http://www.straussauto.com/-- sells after-market automotive parts
and accessories, and operate automotive service centers located in
New York, New Jersey, Philadelphia, Bethlehem and Pennsylvania.
The Company operates 86 retail store locations and has about 1,450
employees. The Company filed for Chapter 11 protection on
February 4, 2009 (Bankr. D. Del. Case No. 09-10358). Edward J.
Kosmowski, Esq., at Young Conaway Stargatt & Taylor, LLP,
represents the Debtor in its restructuring efforts. As of
January 3, 2009, the Debtor had total assets of $75,000,000 and
total debts of $72,000,000.
The Chapter 11 case is Strauss's third. The preceding Chapter 11
case ended with confirmation of a Chapter 11 plan in April 2007.
The Company was then named R&S Parts & Service Inc.
BEAR ISLAND: Dune Capital Says Sale of WB Group's Assets Unfair
---------------------------------------------------------------
Dune Capital LP, Dune Capital International Ltd., and WTA Dune
Limited ask the U.S. Bankruptcy Court for the Eastern District of
Virginia to disapprove the sale and investor solicitation process
all or substantially all of WB Group's businesses.
Bear Island Paper Company, L.L.C. sought approval of the SISP
to promote a coordinated and comprehensive cross-border sale
process of the businesses of White Birch Paper Holding Company,
the Debtor's indirect parent, and ten Canadian subsidiaries of
White Birch.
The majority second lien lenders are holders in the aggregate
61.5% of the claims in connection with the $100,000,000 second
lien term loan agreement. The lenders tell the Court that assets
of WB Group secure the Debtors' obligations to their lenders.
The lenders add that they did not consent to sale of the asset,
therefore, the Debtor cannot say that the sale is free and clear
of liens and encumbrances.
The Debtor is represented by:
Jonathan L. Hauser, Esq.
Troutman Sanders LLP
222 Central Park Avenue, Suite 2000
Virginia Beach, VA 23462
Tel: (757) 687-7768
Fax: (757) 687-1505
About Bear Island
White Birch is the second-largest newsprint producer in North
America. As of December 31, 2009, the WB Group held a 12% share
of the North American newsprint market and employed roughly 1,300
individuals (the majority of which reside in Canada).
Additionally, for the 12 months ended December 31, 2009, the WB
Group maintained an annual production capacity of roughly
1.3 million metric tons of newsprint and directory paper, up to
50% of which consists of recycled content, and achieved net sales
of roughly $667 million.
Bear Island's assets are almost exclusively located in the U.S.
Bear Island Paper Company, L.L.C., filed a voluntary petition for
relief under Chapter 11 of the United States Bankruptcy Code in
the United States Bankruptcy Court for the Eastern District of
Virginia on February 24, 2010.
The company's parent, White Birch Paper Company, filed for
bankruptcy protection under Canada's Companies' Creditors
Arrangement Act, before the Superior Court for the Province of
Quebec, Commercial Division, Judicial District of Montreal,
Canada. White Birch and five other affiliates -- F.F. Soucy
Limited Partnership; F.F. Soucy, Inc. & Partners, Limited
Partnership; Papier Masson Ltee; Stadacona Limited Partnership;
and Stadacona General Partner, Inc. -- also sought bankruptcy
protection under Chapter 15 of the U.S. Bankruptcy Code.
Jonathan L. Hauser, Esq., at Troutman Sanders LLP, in Virginia
Beach, Virginia; and Richard M. Cieri, Esq., Christopher J.
Marcus, Esq., and Michael A. Cohen, Esq., at Kirkland & Ellis LLP,
in New York, serve as counsel to White Birch, as Foreign
Representative. Kirkland & Ellis and Troutman Sanders also serve
as Chapter 11 counsel to Bear Island. AlixPartnes LLP serves as
financial/restructuring advisor to Bear Island, and Lazard Freres
& Co., serves as investment banker. Chief Judge Douglas O. Tice,
Jr., handles the Chapter 11 and Chapter 15 cases.
BERNARD TOMAINO: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------------
Joint Debtors: Bernard V. Tomaino, Jr.
aka Ben Tomaino
dba Tomaino Agency
Elizabeth Tomaino
aka Bette Tomaino
151 Standish Drive
Pearl River, NY 10965
Bankruptcy Case No.: 10-22816
Chapter 11 Petition Date: April 27, 2010
Court: United States Bankruptcy Court
Southern District of New York (White Plains)
Judge: Robert D. Drain
Debtor's Counsel: Anne J. Penachio, Esq.
Penachio Malara LLP
235 Main Street
Sixth Floor
White Plains, NY 10601
Tel: (914) 946-2889
Fax: (914) 946-2882
E-mail: apenachio@pmlawllp.com
penachio.anne@gmail.com
Scheduled Assets: $1,022,740
Scheduled Debts: $1,947,249
A list of the Company's 20 largest unsecured creditors filed
together with the petition is available for free at
http://bankrupt.com/misc/nysb10-22816.pdf
The petition was signed by Bernard V. Tomaino, Jr. and Elizabeth
Tomaino.
BI-LO: Wins Confirmation of Reorganization Plan
-----------------------------------------------
BI-LO, LLC, and certain affiliates disclosed that the United
States Bankruptcy Court for the District of South Carolina
confirmed the Company's Plan of Reorganization, dated April 13,
2010. BI-LO expects to emerge from bankruptcy in May.
As previously disclosed, the Plan is sponsored by Lone Star Funds
and includes a $150 million new equity investment by Lone Star and
$200 million in committed term loan financing from Credit Suisse.
In addition, GE Capital will provide for a $150 million revolving
credit facility for BI-LO post-emergence to fund working capital
and other normal business needs. The company expects to have
between $40 and $50 million of cash borrowings on the revolving
credit facility immediately after emergence.
"We are very pleased to have reached this major milestone in BI-
LO's history," said Michael Byars, President and Chief Executive
Officer of BI-LO. "This is a great achievement for BI-LO and is a
reflection of the Company's current performance and our commitment
to our customers, suppliers, and Teammates. BI-LO will emerge
from bankruptcy financially stronger, with less debt, and as a
more competitive company in the marketplace."
Mr. Byars continued, "With our improved balance sheet, we will
continue our commitment to the communities we proudly serve and
provide our customers with the lowest possible pricing to deliver
the best overall value, the freshest products and the same top
quality brands they have come to expect, all with friendly,
helpful service from our 15,000 Teammates. On behalf of the
entire management team, I would like to thank our customers,
Teammates, and suppliers for their ongoing support as we continue
to build on the momentum that began in 2009 and has continued
through the first four months of 2010."
About BI-LO LLC
Headquartered in Mauldin, South Carolina, BI-LO LLC operates 214
supermarkets in South Carolina, North Carolina, Georgia and
Tennessee, and employs approximately 15,500 people.
Dallas-based Lone Star Funds bought the business in 2005 from
Koninklijke Ahold NV, the Dutch supermarket operator. Lone Star
also owns Bruno's Supermarkets LLC, a chain of 66 stores
that filed under Chapter 11 in February in Birmingham, Alabama.
BI-LO and its affiliates filed for Chapter 11 bankruptcy
protection on March 23, 2009 (Bankr. D. S.C. Case No. 09-02140).
George B. Cauthen, Esq., Frank B. Knowlton, Esq., at Nelson
Mullins Riley & Scarborough, L.L.P; Josiah M. Daniel, III, Esq.,
Katherine D. Grissel, Esq., at Vinson & Elkins L.L.P. in Dallas;
and Dov Kleiner, Esq., Alexandra S. Kelly, Esq., at Vinson &
Elkins L.L.P., in New York, serve as counsel. Kurtzman Carson
Consultants LLC serves as notice and claims agent. BI-LO listed
between $100 million and $500 million each in assets and debts.
BLOCK COMMUNICATIONS: S&P Gives Stable Outlook; Keeps 'B+' Rating
-----------------------------------------------------------------
Standard & Poor's Ratings Services said it revised its rating
outlook on Toledo, Ohio-based Block Communications Inc. to stable
from negative. At the same time, S&P affirmed its ratings on the
company, including the 'B+' corporate credit rating. Recovery
ratings on the company's debt issues also remain unchanged.
"The outlook revision is primarily based on the stabilization of
Block's credit metrics," said Standard & Poor's credit analyst
Naveen Sarma. Despite the ongoing challenges at both Block's
newspaper business and its TV broadcasting operations, and S&P's
expectations for continued revenue declines at the newspaper
division, S&P has seen recent signs of modest improvements in
financial performance in Block's media properties. This change,
along with continued healthy performance at the company's cable
operations, has contributed to sufficient visibility in its
financial performance over the near term to support the current
rating.
BRIER CREEK: Section 341(a) Meeting Scheduled for May 25
--------------------------------------------------------
The U.S. Trustee for Region 10 will convene a meeting of Gary R
McLean's creditors on May 25, 2010, at 1:30 p.m. The meeting
will be held at Room 416B U.S. Courthouse, 46 E. Ohio Street,
Indianapolis, IN 46204.
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.
Indianapolis, Indiana-based Brier Creek FC, LLC, dba The Exchange
at Brier Creek, filed for Chapter 11 bankruptcy protection on
April 20, 2010 (Bankr. S.D. Ind. Case No. 10-05645). Wendy D.
Brewer, Esq., at Barnes & Thornburg LLP, assists the Company in
its restructuring effort. The Company estimated its assets and
debts at $10,000,001 to $50,000,000.
BRITTWOOD CREEK: Bridgeview Bank Wants Chapter 11 Case Dismissed
----------------------------------------------------------------
Bridgeview Bank Group has asked the U.S. Bankruptcy Court for the
Northern District of Illinois to dismiss Brittwood Creek, LLC's
Chapter 11 case.
Bridgeview Bank says that the Debtor doesn't having no prospect
for reorganization and simply to delay a foreclosure by a secured
lender commenced almost six months ago.
The Debtor is a single purpose entity whose sole asset is a parcel
of real estate fully encumbered by the liens of its undersecured
lenders and has few unsecured liabilities. Bridgeview Bank says
that the Debtor has no employees. "Simply stated, the Debtor has
no clear incentive to pursue this Chapter 11 Case, other than to
avoid foreclosure. Congress did not intend Chapter 11 to be used
in this manner, and the Court should not permit the Debtor to
waste time and money on a Chapter 11 process when reorganization
is both unrealistic and unnecessary to resolve what amounts to a
simple two-party dispute," Bridgeview Bank states.
In the alternative, Bridgeview Bank requests that the Court lift
the automatic stay to allow Bridgeview Bank to prosecute its
foreclosure action and foreclose on its collateral. Bridgeview
Bank submits that, if the Debtor remains in Chapter 11, the Court
should grant Bridgeview Bank adequate protection in the form of
requiring the Debtor to immediately continue debt service of
interest and principal, which has not been paid as regularly
scheduled for nearly nine months.
Bridgeview Bank is represented by Vedder Price P.C.
Burr Ridge, Illinois-based Brittwood Creek LLC filed for Chapter
11 bankruptcy protection on April 9, 2010 (Bankr. N.D. Ill. Case
No. 10-15776). Michael J. Davis, Esq., at Springer, Brown, Covey,
Gaetner & Davis, assists the Company in its restructuring effort.
The Company estimated its assets and debts at $10,000,001 to
$50,000,000.
CABERNET HOLDINGS: Court to Consider Bankruptcy Plan on May 8
-------------------------------------------------------------
The owner of Holiday Inn Express Hotel & Suites at the Vineyards
filed for Chapter 11 bankruptcy protection. Chelsi Zash at
digtriad.com reports that the hotel owner cited financial problem
and hotel buyers backing out of the deal, forcing builders to take
over. A federal judge will consider in May 8, 2010, whether to
approve the hotel's bankruptcy reorganization or proceed with the
foreclosure commenced by New Bridge bank, the report says.
According to The Dispatch, Cabernet Holdings, owned by Concord
developers Leonard Sossamon and Dan Boone, filed for a Chapter 11
reorganization April 1, the last day of the upset period for the
foreclosure sale, said William Miller of High Point law firm
Roberson, Haworth & Reese.
CAPMARK FINANCIAL: Committee Members Can Trade In Securities
------------------------------------------------------------
The Official Committee of Unsecured Creditors in Capmark Financial
Group Inc.'s case received approval of its request to permit its
members to trade in the securities of the Debtors.
According to the Committee, Roberta A. DeAngelis, the Acting U.S.
Trustee for Region 3 informally objected to the Motion and
requested certain changes to the proposed order. To resolve the
U.S. Trustee's issues and potentially enter a consensual Order,
the Committee agreed to adjourn the hearing on the Motion twice.
To address the U.S. Trustee's concerns, the Committee revised the
proposed form of order to provide that:
(a) A Committee Member seeking the protection of the Order is
required to confirm its establishment of enumerated
Blocking Procedures via a sworn or verified declaration to
be served on the U.S. Trustee and the Committee counsel.
(b) The Blocking Procedures with respect to which a Trading
Committee Member must provide Certification of
establishment include certain disclosure and reporting
requirements:
i. A Trading Committee Member must immediately inform
Committee counsel and the U.S. Trustee in writing if
it becomes aware of any material breach of the
Blocking Procedures within its organization.
ii. A Trading Committee Member must disclose to the U.S.
Trustee, in writing, any decrease in dollar amount of
its originally disclosed claims that results in its
holdings being less than one-third of its original
holdings.
iii. A Trading Committee Member must provide declarations
on a quarterly basis to Committee counsel and the U.S.
Trustee confirming the continued existence of the
Blocking Procedures, including certification that the
Committee Member is not aware of any material breach
of the Blocking Procedures.
c. The Blocking Procedures provide that a Trading Committee
Member has existing policies or procedures reasonably designed
to avoid the communication of material nonpublic information,
including through electronic means, between Committee
Personnel and non-Committee Personnel. If its lacks those
Existing Policies, a Trading Committee Member must have
established policies or procedures designed to achieve that
purpose.
d. The Blocking Procedures provide that a Trading Committee
Member has Existing Policies for monitoring trades reasonably
designed to identify whether there is any reason to believe
that trades were not made in compliance with its Existing
Policies regarding information blocking. If a Trading
Committee Member lacks those Existing Policies for monitoring
trades, it must certify that it has established policies
or procedures reasonably designed to identify whether trades
are made in violation of the Blocking Procedures.
e. The Committee has revised the Order to more clearly delineate
which internal employees and regulatory authorities may
receive Information.
f. The revised Order reserves the rights of the Court or any
party-in-interest, including the U.S. Trustee, to take any
appropriate action regarding a Trading Committee Member's
potential breach of fiduciary duty, and further reserves the
rights of the U.S. Trustee, or any party-in-interest, to seek
a Court determination as to whether a Committee Member is
permitted to trade subject to the Order.
A full-text copy of the revised proposed order is available for
free at http://bankrupt.com/misc/Capmark_EthicalProOrd.pdf
The Committee relates in a certification of counsel that at a
hearing held on April 5, 2010, the Committee and the U.S. Trustee
advised the Court that they have resolved the issues in
connection with the proposed order on the Motion.
The Revised Proposed Form of Order provides, among others, that a
Committee Member will (i) file an initial certification of the
amount and types of its claims against the Debtors; and (ii)
update this information through quarterly reports submitted to
the U.S. Trustee.
The bankruptcy judge signed the revised order.
CAPMARK FINANCIAL: Merrill Wants Lift Stay to Draw on Collateral
----------------------------------------------------------------
Merrill Lynch Capital Services, Inc., asks the Court to lift the
automatic stay to draw on the MLCS Collateral that it is holding
under the terms of a Credit Support Annex.
Prior to the Petition Date, affiliates of Capmark Financial
Group, Inc. established a series of eight investment funds as
investment vehicles pursuant to which investors could make an
indirect investment in entities which had an equity interest in
affordable multifamily properties that qualified for federal low
income housing tax credits and other federal income tax benefits.
As a condition to investing in the guaranteed Funds, the
investors required the Funds to provide a creditworthy third
party to support the obligations of the managing member, Capmark
Affordable Properties Inc. Merrill Lynch agreed to fill this
role and entered into a separate International Swaps and
Derivatives Association, Inc., Master Agreement, including the
Schedule, and Confirmations, with respect to each Fund,
collectively the "IRFAs." The IRFAs for each Fund were then
assigned to the investors pursuant to an Assignment and
Assumption Agreement.
As a condition and in consideration of Merrill Lynch entering
into the IRFAs, Capmark Capital Inc. entered into a standard ISDA
Master Agreement - Cross Border Schedule to Master Agreement, and
a Credit Support Annex, pursuant to which Capmark Capital agreed
immediately to repay Merrill Lynch any and all amounts that
Merrill Lynch paid to the investors pursuant to any IRFA.
The swap transactions relating to Fund I and Fund II were
confirmed and became effective pursuant to Confirmation No. 001,
dated as of December 29, 2004. The swap transactions relating to
Fund III, Fund IV, Fund V and Fund VI were confirmed and became
effective pursuant to Confirmation No. 002, dated as of March 30,
2005. The swap transactions relating to Fund VII and Fund VIII
were confirmed and became effective pursuant to Amended and
Restated Confirmation No. 003, dated October 25, 2005. Each BTB
Swap Transaction benefits from the collateralization requirements
provided in the Credit Support Annex.
Scott D. Cousins, Esq., at Greenberg Traurig, LLP, in Wilmington,
Delaware -- cousinss@gtlaw.com --, counsel for Merrill Lynch,
informs the Court that the current amount of the collateral held
by Merrill Lynch in respect of the BTB Swap Transactions is
approximately $30,700,000 in cash.
Mr. Cousins asserts that the filing of bankruptcy petitions by
Capmark Group and Capmark Capital constituted an Event of
Default. He relates that on October 27, 2009, Merrill Lynch
notified Capmark Capital that effective as of October 30, 2009,
it was terminating the Swap Master Agreement on account of the
occurrence of the Bankruptcy Event of Default.
Mr. Cousins avers that pursuant to the Swap Master Agreement,
upon an early termination caused by an Event of Default where
Capmark Capital is the Defaulting Party, Merrill Lynch is
entitled to a payment on early termination equal to its "Loss."
Merrill Lynch has calculated its loss to be $91,825,032, which is
essentially higher than the amount of the Merrill Lynch
Collateral that Merrill Lynch holds pursuant to the Credit
Support Annex.
On November 18, 2009, as permitted under the terms of the Swap
Master Agreement, Merrill Lynch sent the Debtors a Close Out
Amount Notice, which provided the Debtors with notice of the
amount of the Merrill Lynch Claim, but which did not make any
demand upon the Debtors for payment of that amount.
On November 20, 2009, Capmark Group responded to the Termination
Notice or the Close Out Notice. Since that time, the parties
have been negotiating in an attempt to amicably resolve their
issues. Despite their best efforts, however, the parties have
been unable to reach any resolutions.
Thus, Merrill Lynch asks the Court to determine that it is
entitled to the "safe harbor" provisions of Section 560 of the
Bankruptcy Code, or in the alternative, lift the automatic stay
in order to permit it to draw down on the Collateral.
About Capmark Financial
Based in Horsham, Pennsylvania, Capmark Financial Group Inc. --
http://www.capmark.com/-- is a diversified company that provides
a broad range of financial services to investors in commercial
real estate-related assets. Capmark has three core businesses:
lending and mortgage banking, investments and funds management,
and servicing. Capmark operates in North America, Europe and
Asia. Capmark has 1,000 employees located in 37 offices
worldwide.
On October 25, 2009, Capmark Financial Group Inc. and certain of
its subsidiaries filed voluntary petitions for relief under
Chapter 11 (Bankr. D. Del. Case No. 09-13684)
Capmark's financial advisors are Lazard Freres & Co. LLC and
Loughlin Meghji + Company. Capmark's bankruptcy counsel is Dewey &
LeBoeuf LLP. Richards, Layton & Finger, P.A., serves as local
counsel. Beekman Advisors, Inc., is serving as strategic advisor.
KPMG LLP is tax and accounting advisor. Epiq Bankruptcy
Solutions, LLC, is the claims and notice agent.
Capmark has total assets of US$20 billion against total debts of
US$21 billion as of June 30, 2009.
Bankruptcy Creditors' Service, Inc., publishes Capmark Financial
Bankruptcy News. The newsletter tracks the Chapter 11 proceedings
of Capmark Financial Group Inc. and its units.
(http://bankrupt.com/newsstand/or 215/945-7000)
CAPMARK FINANCIAL: Proposes to Expand Lazard Work
-------------------------------------------------
Capmark Financial Group Inc. and its units ask the Court to
approve an expanded scope of services and amended terms of
engagement with respect to their retention of Lazard Freres & Co.
LLC as investment banker and financial advisor, nunc pro tunc to
January 1, 2010.
Lazard was engaged to aid the Debtors which filed for bankruptcy
protection on October 25, 2009, in their restructuring efforts by
providing expertise in high-level strategic transactions and debt
restructurings, including financing transactions and sale
transactions affecting mergers, acquisitions, and transfers of
significant assets. The Debtors relate that since the Petition
Date, Lazard has focused on large-impact transactions involving
the First-Filed Debtors.
The Debtors have requested Lazard's assistance in connection with
the evaluation and possible divesture of their interests,
obligations, and commitments relating to Capmark Investments LP
and Capmark Structured Real Estate Partners, a non-debtor
investment fund managed by CILP.
Specifically, the Debtors have asked Lazard to serve as their
investment banker in connection with a possible sale, assignment
or other transfer in one or a series of transactions, of all or a
significant portion of:
(i) the Debtors' rights or obligations under their investment
management and similar agreements relating to CSREP;
(ii) the Debtors' general partner and similar interests in
CSREP; and
(iii) the Debtors' limited partner and similar interests in
CSREP.
The Debtors have asked Lazard to review and analyze the business,
operations, and financial projections of CILP and CSREP, and to
advise and assist them in maximizing the value of their interests
in CILP and CSREP through one or more potential transactions.
More specifically, the Expanded CILP Services include:
(a) assistance in the identification of prospective
Transaction counterparties and advice relating to strategy
and tactics for initiating discussions with Transaction
counterparties;
(b) assistance in the Debtors' preparation of marketing
materials relating to any potential Transactions;
(c) arranging and attending presentation meetings between
potential Transaction counterparties and the Debtors and
their representative; and
(d) assistance with negotiations with potential Transaction
counterparties.
The Debtors propose to pay Lazard pursuant to this fee structure:
a. Retainer Fee.
An additional retainer fee for the Expanded CILP Services, to
be paid according to these schedule:
i. $250,000 total for the first three months, effective as of
January 1, 2010, and payable promptly following entry of
an order approving the Amended Fee Structure;
ii. $300,000 total for the next three months, payable on
April 1, 2010;
iii. $100,000 per month for each of the next two months,
payable on July 1, 2010, and August 1, 2010; and
iv. $100,000 for each subsequent month, payable on
September 1, 2010, and the first day of each subsequent
month.
b. One additional fee of $750,000, payable upon consummation of
any Investment Management Contract Transaction or GP Interest
Transaction. On the closing date of that Transaction, a pro
rata portion of the unearned part of the most recent monthly
retainer fee paid may be credited toward this fee.
c. An additional fee of $250,000 payable upon consummation of any
LP Interest Transaction.
The Debtors will have the same indemnification, contribution,
reimbursement, and related obligations to Lazard and other
Indemnified Persons as those provided under the Engagement Letter
and Indemnification Letter, and modified and approved by the
Original Retention Order. Those obligations will also apply to
the Expanded CILP Services and any loss, claim, damage, liability
or expense of Lazard.
CATALYST PAPER: To Appeal Tax Ruling to Supreme Court of Canada
---------------------------------------------------------------
Catalyst Paper will seek leave to appeal to the Supreme Court of
Canada, following dismissal of its appeal concerning the North
Cowichan 2009 tax bylaw by the Court of Appeal for British
Columbia. In its April 22nd decision, the Appeal Court declined
to strike down the tax bylaw while calling the "extreme imbalance"
perpetuated by the District of North Cowichan a political problem
requiring a policy decision by elected officials.
While keeping its legal avenues open, Catalyst has also been
working with others to demonstrate broad-based support for interim
relief and a long-term, made-in-BC solution outside of the courts.
In the February 2010 Throne Speech, Premier Campbell announced a
joint committee on municipal property tax reform and the committee
is expected to table its recommendations this fall.
"We were encouraged by the Premier's leadership on this matter,"
said Mr. Garneau, "and the Appeal Court decision now makes it even
more critical that the joint committee does its work, does it
well, and does it quickly."
In the meantime, the City of Powell River and Catalyst have signed
an agreement in principle that would reduce the Class 4 property
taxes paid by the mill while assisting the City in reducing
significantly its capital expenditures for future municipal
service infrastructure.
"The competition for business and markets is fierce and other
jurisdictions are actively encouraging businesses here to abandon
their existing BC communities and set up shop outside this
province, even outside Canada," said Mr. Garneau. "Powell River
city council clearly understands that survival is about everyone
working together to reduce taxes and costs in order to keep
existing jobs and create new ones in this post-recession global
economy. The days are gone when municipalities could set tax
rates that ignored competitive reality and not pay a steep
community price."
About Catalyst Paper
Headquartered in Richmond, British Columbia, Catalyst Paper
Corporation (TSX:CTL) manufactures diverse specialty printing
papers, newsprint and pulp. Its customers include retailers,
publishers and commercial printers in North America, Latin
America, the Pacific Rim and Europe. With six mills strategically
located in British Columbia and Arizona, Catalyst has a combined
annual production capacity of 2.5 million tones.
At December 31, 2009, the Company had total assets of $2.090
billion against total liabilities of $1.295 billion.
* * *
In mid-March 2010, Standard & Poor's Ratings Services lowered its
long-term corporate credit rating on Catalyst Paper to
'SD' (selective default) from 'CC'. Given the weak outlook for
the company's specialty paper and newsprint segments, S&P expects
Catalyst to continue to face challenging market conditions in
2010.
Moody's Investors Service also downgraded Catalyst's Corporate
Family Rating to Caa1 from B3 while revising the Probability of
Default Rating to Caa1/LD from Caa3, with the "/LD" suffix
signaling a "limited default". Catalyst's CFR downgrade
anticipates a marked deterioration in the company's financial
performance over the coming year, with significant EBITDA erosion
compared to 2009 levels and negative free cash flow generation.
CCG RIVERSIDE: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: CCG Riverside, Inc.
dba Citrus City Grille
122 N. Glassel
Orange, CA 92683
Bankruptcy Case No.: 10-15498
Chapter 11 Petition Date: April 27, 2010
Court: U.S. Bankruptcy Court
Central District of California (Santa Ana)
Debtor's Counsel: Alan L. Armstrong, Esq.
18652 Florida Street, #225
Huntington Beach, CA 92648-6006
Tel: (714) 375-1147
E-mail: alan@alanarmstrong.com
Estimated Assets: $50,001 to $100,000
Estimated Debts: $1,000,001 to $10,000,000
According to the schedules, the Company says that assets total
$94,159 while debts total $1,616,842.
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/cacb10-15498.pdf
The petition was signed by Steve Tsirtsis, president.
Debtor-affiliates filing separate Chapter 11 petition:
Entity Case No. Petition Date
------ -------- -------------
California Restaurants, Inc. 10-13661 03/23/10
Glassel Properties, LLC 10-13660 03/23/10
CCM MERGER: Moody's Confirms Junk Corporate Family Rating
---------------------------------------------------------
Moody's Investors Service confirmed CCM Merger, Inc's Caa1
Corporate Family and Probability of Default ratings along with its
B3 senior secured term loan and Caa3 senior unsecured note
ratings. Moody's also assigned a B3 rating to CCM's $70 million
revolver expiring July 2011. A negative ratings outlook was
assigned. This rating action concludes the review for possible
downgrade that began on January 26, 2010.
The Caa1 Corporate Family Rating and negative outlook consider the
refinancing risk associated with the CCM's $70 million revolver
which expires in July 2011. "Although CCM recently received a
one-year revolver extension, it still faces a relatively near-term
revolver expiration," stated Keith Foley, Moody's Senior Vice
President.
The ratings and outlook also anticipate that CCM will continue to
be pressured by weak gaming demand, and as a result, leverage will
likely remain high. Debt/EBITDA is currently over 7 times. CCM's
single asset profile and relatively small size in terms of revenue
are also considered key credit risks.
Positive rating consideration is given to the favorable
demographics, density, and restrictions on competition in the
Detroit, Michigan gaming market. Currently, CCM's MotorCity
Casino is one of only three commercial casinos that are permitted
to operate in Detroit. Also considered is Moody's expectation
that CCM will generate positive free cash flow despite weak gaming
demand trends.
Ratings confirmed and LGD assessments revised where applicable:
* Corporate Family Rating at Caa1
* Probability of Default Rating at Caa1
* Senior secured term loan due 2012 at B3 (LGD 3, 33% from LGD 3,
34%)
* Senior unsecured notes at Caa3 (LGD 5, 87%)
Rating assigned:
* $70 million senior secured revolver expiring July 2011 at B3
(LGD 3, 33%)
Rating withdrawn:
* $100 million senior secured revolver expiring July 2010 at B3
(LGD 3, 34%)
The last rating action on CCM occurred on January 26, 2010, when
Moody's placed the company's ratings on review for possible
downgrade.
CCM Merger, Inc., indirectly owns and operates the MotorCity
Casino in Detroit, Michigan. The company generates approximately
of $466 million of annual net revenue.
CEDROS PROPERTIES: Case Summary & 10 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: Cedros Properties, LLC
8505 Cedros Avenue
Panorama City, CA 91402
Bankruptcy Case No.: 10-14897
Chapter 11 Petition Date: April 27, 2010
Court: U.S. Bankruptcy Court
Central District of California (San Fernando Valley)
Judge: Maureen Tighe
Debtor's Counsel: David B. Golubchik, Esq.
Levene Neale Bender Rankin & Brill LLP
10250 Constellation Boulevard, Suite 1700
Los Angeles, CA 90067
Tel: (310) 229-1234
E-mail: dbg@lnbrb.com
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 10 largest unsecured creditors
filed together with the petition is available for free at
http://bankrupt.com/misc/cacb10-14897.pdf
The petition was signed by Moussa Kashani, managing member.
Debtor-affiliates filing separate Chapter 11 petition:
Entity Case No. Petition Date
------ -------- -------------
Las Vegas Apartments, LLC 09-32896 08/26/09
Central District of California
Russell Avenue Apartments, LLC 09-40619 11/03/09
Central District of California
San Marino Properties, LLC 09-40614 11/03/09
Central District of California
CENTENE CORP: S&P Gives Positive Outlook; Affirms 'BB-' Rating
--------------------------------------------------------------
Standard & Poor's Ratings Services said it revised its outlook on
Centene Corp. to positive from stable. At the same time, S&P
affirmed its 'BB-' counterparty credit and senior unsecured debt
ratings on the company.
"The positive outlook reflects S&P's expectation that Centene will
sustain the developments in its financial and business profiles.
These developments have improved the company's overall
creditworthiness," said Standard & Poor's credit analyst Hema
Singh.
"Centene's key holding company credit metrics have improved and
are supportive of the rating. Financial flexibility has
strengthened because of lower debt levels on the balance sheet,"
said Ms. Singh. The company used recent (January 2010) stock
issuance proceeds to pay down about $84 million of outstanding
debt from its revolving credit line, which resulted in lower
leverage. Debt to capital is about 23% in 2010 (or 28% including
operating lease obligation treated as debt), down from 33.4% at
year-end 2009. EBITDA interest coverage improved to 12x in 2009
as a result of Centene's consistent good cash flow generation.
"S&P expects cash flow to remain strong in 2010, as the company
has demonstrated in the past three years when it generated net
cash flow of about 7% of premium," said Ms. Singh.
In S&P's opinion, Centene's growing presence in multiple markets
helps to mitigate its relatively narrow market-segment focus on
government-sponsored managed Medicaid programs. Centene's focus
on this market segment exposes the company to inherent funding and
regulatory risks.
CENTENNIAL MEDICAL: Case Summary & 9 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: Centennial Medical Imaging, LLC
7610 West Cheyenne Avenue
Las Vegas, NV 89149
Bankruptcy Case No.: 10-17647
Chapter 11 Petition Date: April 28, 2010
Court: U.S. Bankruptcy Court
District of Nevada (Las Vegas)
Judge: Mike K. Nakagawa
Debtor's Counsel: Samuel A. Schwartz, Esq.
701 E. Bridger Avenue, Suite 120
Las Vegas, NV 89101
Tel: (702) 385-5544
Fax: (702) 385-2741
E-mail: sam@schwartzlawyers.com
Estimated Assets: $0 to $50,000
Estimated Debts: $1,000,001 to $10,000,000
A copy of the Company's list of 9 largest unsecured creditors
filed together with the petition is available for free at
http://bankrupt.com/misc/nvb10-17647.pdf
The petition was signed by Vinay Bararia, managing member.
CHANA TAUB: Judge Stong Appoints a Chapter 11 Trustee
-----------------------------------------------------
WestLaw reports that a Chapter 11 debtor-in-possession's retention
or proposed retention of at least eight different counsel over the
21 months that the case had been pending, without moving the case
forward toward confirmation of a Chapter 11 plan, along with the
debtor's failure to meet her administrative obligations and to
comply with court orders and the complex, familial, reflexive, and
often acrimonious relationships among the debtor and the parties
in interest who had been most active in her bankruptcy case, were
such as to warrant appointment of a trustee on an interests-of-
creditors theory. A debtor's ability to work with retained
professionals on a consistent and productive basis is one
indicator of successful management of the Chapter 11
reorganization process. In re Taub, --- B.R. ----, 2010 WL
1443889 (Bankr. E.D.N.Y.).
This is Judge Stong's fifth order attempting to move this
contentious bankruptcy case along. The Troubled Company Reporter
reported about Judge Stong's four earlier orders on Sept. 28,
2009, Oct. 5, 2009, Oct. 15, 2009, and Jan. 11, 2010.
Chana Taub filed a Chapter 11 petition (Bankr. E.D.N.Y. Case No.
08-44210) on July 1, 2008, and is represented by Dennis W. Houdek,
Esq., in Manhattan.
CHARTER COMMUNICATIONS: Posts Tender Offers Results for Notes
-------------------------------------------------------------
Charter Communications, Inc., disclosed that CCO Holdings, LLC,
has received and purchased approximately $740.8 million aggregate
principal amount of its outstanding 8.75% Senior Notes due 2013
and Charter Communications Operating, LLC (a subsidiary of CCO
Holdings, "Charter Operating" and, together with CCO Holdings, the
"Charter Subsidiaries") has received and purchased approximately
$677.3 million aggregate principal amount of its outstanding
8.375% Senior Second Lien Notes (the "2014 Notes") validly
tendered by 5:00 p.m., Eastern Daylight Time (EDT), on April 27,
2010, which was the deadline for holders to submit tenders in
order to receive the consent payments in connection with the
tender offers. Charter Communications has received consents from
holders of approximately 92.6% of the 2013 Notes and approximately
87.9% of the 2014 Notes as of the consent payment deadline.
The consents are sufficient to effect the proposed amendments to
the indenture governing the 2013 Notes and the indenture governing
the 2014 Notes as set forth in the applicable Offer to Purchase
and Consent Solicitation Statement dated April 14, 2010 and the
related Letter of Transmittal and Consent (the "Tender Offer
Documents"), pursuant to which the tender offers and the consent
solicitations are being made. The proposed amendments will
eliminate substantially all of the restrictive covenants and
certain default provisions contained in each indenture. The
supplemental indentures will be binding on the holders of notes
not purchased in the tender offers.
Charter Communications also announced that it is revising the
terms of its tender offers such that holders who tender their
notes after the date hereof and prior to the expiration of the
tender offer at 11:59 p.m., EDT, on May 12, 2010 (unless extended
or earlier terminated by the Company) will receive a tender offer
consideration of $1,029.17 for every $1,000 principal amount of
2013 Notes tendered, and a tender offer consideration of $1,027.92
for every $1,000 principal amount of 2014 Notes tendered, plus, in
each case, accrued and unpaid interest to, but excluding, the
tender offer payment date. As set forth in the Tender Offer
Documents, 2013 Notes and 2014 Notes validly tendered may no
longer be withdrawn.
Charter Communications is simultaneously announcing that it is
irrevocably calling for redemption on May 28, 2010 all 2013 Notes
and 2014 Notes that remain outstanding after the expiration of the
tender offer, at the redemption price of $1,029.17 for every
$1,000 principal amount of 2013 Notes redeemed and at the
redemption price of $1,027.92 for every $1,000 principal amount of
2014 Notes redeemed, plus, in each case, accrued and unpaid
interest to, but excluding the redemption date. Notices of
Redemption are being mailed by Bank of New York, the trustee for
the 2013 Notes, and by Wilmington Trust, the trustee for the 2014
Notes, to the registered holder of such notes. Copies of the
Notices of Redemption and additional information relating to the
procedure for redemption may be obtained by contacting Bank of New
York at 312-827-8546 for the 2013 Notes and Wilmington Trust at
866-521-0079 for the 2014 Notes.
Credit Suisse Securities (USA) LLC and Citigroup Global Markets
Inc. are the Dealer Managers and Solicitation Agents for the
tender offers and consent solicitations. Questions regarding the
tender offers and consent solicitations may be directed to Credit
Suisse Securities (USA) LLC at (800) 820-1653 (toll free) and
(212) 325-5912 (collect) and/or Citigroup Global Markets Inc., at
(800) 558-3745 (toll free) and (212) 723-6106 collect).
About Charter Communications
Based in St. Louis, Missouri, Charter Communications, Inc. (Pink
OTC: CHTRQ) -- http://www.charter.com/-- is a broadband
communications company and the fourth-largest cable operator in
the United States. Charter provides a full range of advanced
broadband services, including advanced Charter Digital Cable(R)
video entertainment programming, Charter High-Speed(R) Internet
access, and Charter Telephone(R). Charter Business(TM) similarly
provides scalable, tailored, and cost-effective broadband
communications solutions to business organizations, such as
business-to-business Internet access, data networking, video and
music entertainment services, and business telephone. Charter's
advertising sales and production services are sold under the
Charter Media(R) brand.
Charter Communications and more than a hundred affiliates filed
voluntary Chapter 11 petitions on March 27, 2009 (Bankr. S.D.N.Y.
Case No. 09-11435). As of March 31, 2009, the Debtors had total
assets of $13,650,000,000, and total liabilities of
$24,501,000,000. Pacific Microwave filed for bankruptcy April 20,
2009, disclosing assets of not more than $50,000 and debts of more
than $1 billion.
The Hon. James M. Peck presides over the cases. Richard M. Cieri,
Esq., Paul M. Basta, Esq., and Stephen E. Hessler, Esq., at
Kirkland & Ellis LLP, in New York, serve as counsel to the
Debtors, excluding Charter Investment Inc. Albert Togut, Esq., at
Togut, Segal & Segal LLP in New York, serves as Charter
Investment, Inc.'s bankruptcy counsel. Curtis, Mallet-Prevost,
Colt & Mosel LLP, in New York, is the Debtors' conflicts counsel.
Ernst & Young LLP is the Debtors' tax advisors. KPMG LLP is the
Debtors' independent auditor. The Debtors' valuation consultants
are Duff & Phelps LLC; the Debtors' financial advisors are Lazard
Freres & Co. LLC; and the Debtors' restructuring consultants are
AlixPartners LLC. The Debtors' regulatory counsel is Davis Wright
Tremaine LLP, and Friend Hudak & Harris LLP. The Debtors' claims
agent is Kurtzman Carson Consultants LLC.
Judge James M. Peck of the U.S. Bankruptcy Court for the Southern
District of New York approved the Debtors' pre-arranged joint plan
of reorganization in a bench ruling on Oct. 15, 2009.
On Nov. 30, 2009, Charter Communications, Inc., announced that it
has successfully completed its financial restructuring, which
significantly improves the Company's capital structure by reducing
debt by approximately 40 percent, or approximately $8 billion.
Charter Communications, Inc., has emerged from Chapter 11 under
its pre-arranged Joint Plan of Reorganization, which was confirmed
by the United States Bankruptcy Court for the Southern District of
New York on Nov. 17, 2009.
CHENIERE ENERGY: Annual Shareholders' Meeting Set for June 4
------------------------------------------------------------
The 2010 Annual Meeting of Stockholders of Cheniere Energy, Inc.,
will be held 9:00 a.m., Central Daylight Time on June 4, 2010, at
The Crystal Ballroom at the Post Rice Lofts, 909 Texas Avenue in
Houston, Texas.
Items of business are:
-- To elect four Class III members of the Board of Directors
to serve until the 2013 annual meeting of stockholders.
-- To ratify the appointment of Ernst & Young LLP as the
Company's independent accountants for the 2010 fiscal
year.
-- To transact other business as may properly come before the
Meeting and any adjournment or postponement thereof.
Stockholders of record on April 5, 2010, are entitled to vote.
A full-text copy of the Company's proxy statement is available at
no charge at http://ResearchArchives.com/t/s?60de
About Cheniere Energy
Houston, Texas-based Cheniere Energy, Inc. (NYSE Amex: LNG) --
http://www.cheniere.com/-- is developing a network of three LNG
receiving terminals and related natural gas pipelines along the
Gulf Coast of the United States. Cheniere is pursuing related
business opportunities both upstream and downstream of the
terminals. Cheniere is also the founder and holds a 30% limited
partner interest in a fourth LNG receiving terminal.
At December 31, 2009, the Company had total assets of
$2,732,622,000 against total current liabilities of $66,212,000,
long-term debt, net of discount of $2,692,740,000, long-term debt-
related parties of $349,135,000, deferred revenue of $33,500,000
and other non-current liabilities of $23,162,000. Total deficit
widened to $432,127,000 at December 31, 2009, from total deficit
of $274,054,000 at December 31, 2008.
CHRYSLER LLC: Court's Written Order Confirming Plan
---------------------------------------------------
Judge Arthur J. Gonzalez of the United States Bankruptcy Court for
the Southern District of New York signed a written order on
April 23, 2010, confirming the modified Second Amended Joint Plan
of Liquidation filed by Old Carco LLC, formerly known as Chrysler
LLC, and its 24 debtor subsidiaries.
Judge Gonzalez confirmed the Plan after finding that it satisfies
the statutory requirements under Sections 1129(a) and (b) of the
Bankruptcy Code:
A. The Plan complies with each applicable provision of the
Bankruptcy Code as required by Section 1129(a)(1), including
the requirements of Sections 1122 and 1123 of the Bankruptcy
Code.
B. The Debtors have complied with all applicable provisions of
Section 1129(a)(2) with respect to the Plan and the
solicitation of acceptances or rejections of that Plan. In
particular, the Plan complies with the requirements of
Sections 1125 and 1126.
In compliance with the Disclosure Statement Order, the Debtors
caused copies of the Solicitation Materials to be transmitted
to all holders of Claims in Classes that were entitled to vote
to accept or reject the Plan and other parties-in-interest.
C. The Plan has been proposed in good faith and not by any means
forbidden by law, and complies with Section 1129(a)(3). The
Chapter 11 cases were filed and the Plan was proposed to
maximize the value of the Debtors' bankruptcy estates for the
benefit of the creditors and parties-in-interest, and for no
ulterior purpose.
The Plan fairly achieves a result consistent with the
objectives and purposes of the Bankruptcy Code. Specifically,
the Plan is designed to liquidate the remaining assets of the
Estates in the most efficient and cost effective manner,
thereby, maximizing the value of the ultimate recoveries for
the creditors. The Plan is the result of extensive good
faith, arm's length negotiations between the Debtors and
certain of their principal constituencies, including the
Official Committee of Unsecured Creditors, the Government DIP
Lenders and the First Lien Agent.
The Plan also reflects substantial input from the principal
constituencies having an interest in the Cases and, as
evidenced by the overwhelming acceptance of the Plan, achieves
the goal of an orderly and consensual liquidation. The
Creditors Committee supports confirmation of the Plan. The
Plan's classification, indemnification, injunction, release
and exculpation provisions have been negotiated in good faith,
are consensual and voluntary and are consistent with Sections
105, 1122, 1123(b)(3)(A), 1123(b)(6), 1129 and 1142 of the
Bankruptcy Code.
D. No payment for services or costs and expenses in or in
connection with the Cases, or in connection with the Plan and
incident to the Cases, has been or will be made by the Debtors
other than payments that have been authorized by Court order.
Except as otherwise provided under the Plan, all payments to
be made to Professionals or other entities asserting a Fee
Claim for services rendered before the Effective Date, other
than Ordinary Course Professionals asserting a Fee Claim for
services rendered or expenses incurred before the Effective
Date, will be subject to review and approval by the Court.
Hence, Section 1129(a)(4) is satisfied.
E. The Debtors are liquidating, and the Original Debtors will
cease to exist pursuant to the Plan. The Original Debtors
will have no officers, managers, directors or trustees after
the Effective Date.
As required by Section 1129(a)(5), the Debtors have disclosed
in their Plan Documents the identity and affiliations of the
Liquidation Trustee and the Litigation Manager, as well as the
nature of their compensation.
The appointment of RJM I, LLC, a limited liability company for
which Robert J. Manzo is the sole manager, as the Liquidation
Trustee, and Alan R. Brayton, Esq., as Litigation Manager is
consistent with the interests of the creditors, equity
security holders and with public policy. The Liquidation
Trustee has been selected with the agreement of the Debtors'
primary creditor constituencies. The Litigation Manager has
been selected by the Creditors Committee, with the approval of
the First Lien Agent and the Government DIP Lenders.
Debtor Alpha Holding will not have any directors or officers
after the Effective Date. On the Effective Date, non-Debtor
Old Carco Canada Holding ULC's Equity Interests in Debtor
Alpha Holding will be transferred to the Liquidation Trust,
subject to the Restructuring Transactions. Nova Scotia Co. is
the general partner of Alpha Holding.
On the Effective Date, the Liquidation Trust will be appointed
as an empowered person with respect to Nova Scotia Co. The
Liquidation Trust is not an insider of the Debtors as the term
is defined in Section 101(31) of the Bankruptcy Code.
F. The Debtors are liquidating and the Plan does not provide for
any changes in rates that require regulatory approval of any
governmental agency. Therefore, Section 1129(a)(6) is not
applicable in these Cases.
G. Each holder of an impaired Claim or Interest in each impaired
Class of Claims or Interests that has not accepted the Plan
will, on account of that Claim or Interest, receive or retain
property under the Plan having a value, as of the Effective
Date, that is not less than the amount that holder would so
receive or retain if the Debtors were liquidated under
Chapter 7 of the Bankruptcy Code on the Effective Date.
Hence, the Debtors have demonstrated that the Plan is in the
best interests of their creditors as required by Section
1129(a)(7).
H. Although impaired Classes 2A and 3A have accepted the Plan,
the Plan has not been accepted by all impaired classes of
Claims and Interests because the holders of Claims in impaired
Classes 2B, 2C and 4A are deemed to have rejected the Plan.
Nevertheless, the Plan is confirmable because it satisfies
Section 1129(b)(1) with respect to those non-accepting Classes
of Claims and Interests. Therefore, the Plan satisfies
Section 1129(a)(8).
I. The Plan provides treatment for Allowed Administrative
Priority Claims, Allowed Priority Tax Claims and Allowed
Priority Claims that is consistent with the requirements of
Section 1129(a)(9).
Specifically, the treatment of Allowed Administrative Priority
Claims pursuant to the Plan satisfies the requirements of
Section 1129(a)(9)(A). The treatment of Allowed Priority
Claims satisfies the requirements of Section 1129(a)(9)(B).
The treatment of Allowed Priority Tax Claims pursuant to the
Plan satisfies the requirements of Section 1129(a)(9)(C). The
treatment of Allowed Secured Claims that would meet the
description of an Allowed Priority Tax Claim but for the
secured status of that Allowed Secured Claim pursuant to the
Plan complies with Section 1129(a)(9)(D).
J. The Plan has been accepted by at least one Class of Claims
that is impaired under the Plan, determined without including
any acceptance of the Plan by any insider, as required by
Section 1129(a)(10)). Specifically, Classes 2A and 3A are
impaired under the Plan and have voted to accept the Plan.
K. The Plan is feasible, within the meaning of Section
1129(a)(11). The evidence proffered and adduced at the
Confirmation Hearing establishes that there is a reasonable
prospect of the Liquidation Trust being able to meet its
financial obligations under the Plan.
Because the Debtors are liquidating, confirmation of the Plan
is not likely to be followed by the need for further financial
reorganization.
L. The Plan satisfies Section 1129(a)(12) because it provides
that Administrative Claims for fees payable pursuant to
Section 1930 of the Judicial and Judiciary Procedures Code
will be paid:
* on or before the Effective Date, by the applicable Debtor or
the Liquidation Trust in Cash equal to the amount of the
Administrative Claims; and
* after the Effective Date, by the Liquidation Trust until the
closing of the Chapter 11 Cases pursuant to Section 350(a)
of the Bankruptcy Code.
M. The Plan complies with Section 1129(a)(13) because, among
other things:
* the Debtors' collective bargaining agreements that provide
for retiree benefits, with the exception of three Excluded
CBAs, have been assumed by the Debtors and assigned to New
Chrysler;
* New Chrysler agreed to the assignment by the Debtors of all
"retiree benefits," as the term is defined in
Section 1114(a) of the Bankruptcy Code, with the exception
of the retiree benefits of UAW-represented retirees, that
New Chrysler is obligated to pay pursuant to an agreement
between New Chrysler and the UAW, and the AMC Retirees;
* pursuant to the UAW Order, upon the closing of the Fiat
Transaction, the Debtors no longer were responsible to pay
"retiree benefits," as defined in Section 1114(a) of the
Bankruptcy Code, to UAW-represented retirees under
Section 1114; and
* certain non-unionized retirees of American Motors
Corporation entered into agreements that provide for certain
health, life insurance and other benefits for themselves,
their spouses and any eligible dependents. To the extent
that the AMC Benefits are "retiree benefits" that the AMC
Retirees are eligible to receive from the Debtors, the
Debtors or the Liquidation Trust will provide for those
benefits, provided that the Debtors and the Liquidation
Trust will not provide the AMC Benefits to the AMC Retirees.
N. Because the Debtors are not required to pay any domestic
support obligations pursuant to either order or statute,
Section 1129(a)(14) does not apply.
O. Because none of the Debtors are individual debtors pursuant to
the Bankruptcy Code, Section 1129(a)(15) does not apply.
P. Each of the Debtors other than Old Carco Institute of
Engineering is a moneyed, business or commercial corporation,
limited liability company or limited partnership. No property
of Debtor Old Carco Institute will be transferred pursuant to
the Plan, provided that to the extent that any transfers of
property under the Plan will be made by Old Carco Institute,
the transfers will be made in accordance with applicable
non-bankruptcy law, including Section 855 of the Michigan
Nonprofit Corporation Act. Accordingly, the Plan satisfies
the requirements of Section 1129(a)(16).
Finding that the Plan complies with the statutory requirements,
Judge Gonzalez confirmed the Plan at the confirmation hearing
held April 20, 2010, and signed his order confirming the Plan on
April 23.
Classes 2B, 2C and 4A are deemed to have rejected the Plan. Based
on the evidence presented by the Debtors at the Confirmation
Hearing, Judge Gonzalez noted that the Plan does not "discriminate
unfairly" because (i) each dissenting Class is comprised of Claims
or Interests that are legally distinct from other Claims and
Interests, and treated substantially equally to similarly situated
classes, and (ii) no holder of a Claim or Interest will receive
more than it is legally entitled to receive on account of its
Claim or Interest.
Judge Gonzalez maintained that the Plan is "fair and equitable"
under Section 1129(b) because:
(a) the holders of Claims in Classes 2B and 2C realize the
indubitable equivalent of their Claims, and therefore,
Section 1129(b)(2)(A)(iii) is satisfied with respect to
those Claims; and
(b) the Plan does not provide a recovery on account of any
Claim or Interest that is junior to the impaired,
non-accepting Class of Interests.
Any Objections or other responses to confirmation of the Plan and
the reservation of rights they contained that (a) have not been
withdrawn, waived or settled prior to the entry of the
Confirmation Order, or (b) are not addressed by the relief granted
in the Order are overruled in their entirety and on their merits,
Judge Gonzalez held. All "withdrawn" Objections or responses are
deemed withdrawn with prejudice, he added.
About 19 parties filed objections to the Plan and majority of
these objections were either resolved or withdrawn prior to the
April 20 Confirmation Hearing.
Under the Confirmation Order, Judge Gonzalez, among other things:
-- approved the Plan Releases in their entirety;
-- ruled that nothing in the Confirmation Order or the Plan
will affect any obligations set forth in or established by
the Fiat Sale Order and the transactions and agreements
executed in connection with the Sale;
-- ruled that nothing in the Confirmation Order, the Plan or
the Winddown Orders:
* will release Daimler, its current or former directors and
officers or any other defendant in the Daimler Litigation
with respect to any claims and causes of action asserted
in the Daimler Litigation; or
* will release any non-Debtor entity of its obligations
under the TARP Loan Agreement. Daimler is not a Released
Party under the Plan;
-- approved consolidation of the Debtors for the purpose of
implementing the Plan, confirmation and distributions to be
made under the Plan;
-- approved the Liquidation Trust Agreement and Litigation
Manager Agreement, and authorized the Debtors to enter into
those Agreements;
-- appointed the Liquidation Trustee and Litigation Manager;
-- ruled that the property of the Debtors' Estates will not
revest in the Debtors on or after the Effective Date but
will be transferred to and vest in the Liquidation Trust
free and clear of any Claims, liens, encumbrances, charges
and other interests of creditors and Interest holders;
-- approved in all respects the injunction as set forth in the
Plan;
-- specifically approved in all respects the Executory
Contract and Unexpired Lease provisions of the Plan;
-- authorized the Debtors to assume and assign, or reject,
Executory Contracts or Unexpired Leases in accordance with
the Plan and the Contract Procedures Order;
-- ruled that on the Effective Date, the Bond Indenture and
the Bonds issued under it will be deemed terminated, and be
of no further force and effect, with respect to the
Debtors. Subject to the Plan, the holders of the Bonds
will have no rights against the Debtors arising from or
relating to those instruments and other documentation, or
the deemed termination;
-- approved in all respects the provisions of the Plan
relating to environmental matters, including the
establishment and administration of the Environmental
Reserve and the establishment of the Allocated Share for
each Designated Owned Property, the Allocated Share Caps
for the Other Owned Properties and the maximum amount of
the Keck Orphan Reserve and the EPA Reserve; and
-- waived as of April 30, 2010, the stay of the Confirmation
Order otherwise imposed by Rule 3020(e) of the Federal
Rules of Bankruptcy Procedure. The Confirmation Order is a
final order, and the period in which an appeal must be
Filed will commence immediately upon its entry.
Under the Plan, unsecured creditors will get nothing other than
proceeds, if any, from a lawsuit against former owner Daimler AG,
and only if the recovery exceeds $25 million. The U.S. government
will also get nothing in return for the $4 billion loan under the
Troubled Asset Relief Program it extended to the company in
January 2008.
A copy of the Confirmation Order is available for free at:
http://bankrupt.com/misc/Chrysler_ConfirmationOrder_042310.pdf
About Chrysler Group LLC
Chrysler Group LLC, formed in 2009 from a global strategic
alliance with Fiat Group, produces Chrysler, Jeep(R), Dodge, Ram
Truck, Mopar(R) and Global Electric Motorcars (GEM) brand vehicles
and products. Headquartered in Auburn Hills, Michigan, Chrysler
Group LLC's product lineup features some of the world's most
recognizable vehicles, including the Chrysler 300, Jeep Wrangler
and Ram Truck. Fiat will contribute world-class technology,
platforms and powertrains for small- and medium-sized cars,
allowing Chrysler Group to offer an expanded product line
including environmentally friendly vehicles.
About Chrysler LLC
Chrysler LLC and 24 affiliates on April 30 sought Chapter 11
protection from creditors (Bankr. S.D.N.Y (Mega-case), Lead Case
No. 09-50002). Chrysler hired Jones Day, as lead counsel; Togut
Segal & Segal LLP, as conflicts counsel; Capstone Advisory Group
LLC, and Greenhill & Co. LLC, for financial advisory services; and
Epiq Bankruptcy Solutions LLC, as its claims agent. Chrysler has
changed its corporate name to Old CarCo following its sale to a
Fiat-owned company. As of December 31, 2008, Chrysler had
$39,336,000,000 in assets and $55,233,000,000 in debts. Chrysler
had $1.9 billion in cash at that time.
In connection with the bankruptcy filing, Chrysler reached an
agreement with Fiat SpA, the U.S. and Canadian governments and
other key constituents regarding a transaction under Section 363
of the Bankruptcy Code that would effect an alliance between
Chrysler and Italian automobile manufacturer Fiat. Under the
terms approved by the Bankruptcy Court, the company formerly known
as Chrysler LLC on June 10, 2009, formally sold substantially all
of its assets, without certain debts and liabilities, to a new
company that will operate as Chrysler Group LLC. Fiat has a 20
percent equity interest in Chrysler Group.
Bankruptcy Creditors' Service, Inc., publishes Chrysler Bankruptcy
News. The newsletter tracks the Chapter 11 proceedings of
Chrysler LLC and its debtor-affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
CHRYSLER LLC: Daimler Wants Creditors Committee Suit Dismissed
--------------------------------------------------------------
Daimler asks the U.S. Bankruptcy Court to dismiss the lawsuit
filed by the Official Committee of Unsecured Creditors for
Chrysler LLC against it.
Daimler contends that the internal inconsistencies and
implausibilities in the Creditors Committee's opposition only
highlight the complaint's failure to state a claim for relief.
The reason the Creditors Committee is pursuing its strained
arguments is obvious -- the Creditors Committee cannot allege,
much less prove, that Chrysler LLC did not receive reasonably
equivalent value in, or was rendered insolvent by, the Cerberus
transaction, Alan S. Goudiss, Esq., at Shearman & Sterling LLP, in
New York -- agoudiss@shearman.com -- tells the Court. He asserts
that all of the Creditors Committee's arguments are contradicted
by the factual allegations of the complaint or are highly
implausible -- or both.
Mr. Goudiss relates that the Creditors Committee contends that
Daimler planned and implemented a scheme involving the
restructuring and "sale" of Chrysler, by which Daimler would
maximize its "profit" at the expense of the company. At the same
time, however, he adds, the Creditors Committee also contends that
certain transfers that were part of the restructuring should be
analyzed in isolation, without considering the billions of dollars
in value that Chrysler received in the Cerberus transaction.
The Creditors Committee's suggestion that Daimler's alleged
fraudulent intent is shown by its supposed "stripping" of assets
from Chrysler is contradicted by the complaint itself and the
Contribution Agreement, which demonstrate that billions of dollars
in value were transferred to Chrysler in the Cerberus transaction,
Mr. Goudiss argues. Although the complaint pleads facts showing
Cerberus's unquestionable interest in the solvency and viability
of Chrysler, the Creditors Committee now contends that Cerberus
agreed to invest billions of dollars in a transaction in which
Chrysler was stripped of its assets and left insolvent, he
continues.
The Creditors Committee cannot resolve or rationalize the
inconsistencies in its contentions, Mr. Goudiss argues. Given
that its pleading, the economic realities, and the formal terms of
the transaction all undermine its claims, the Creditors Committee
resorts to hypertechnicality, illogic, and even an argument that
the Court cannot consider the terms of the Contribution Agreement
on the motion to dismiss, he points out.
The adversary proceeding was a misconceived effort from the
outset, Mr. Goudiss further contends. The Creditors Committee's
implausible and illogical attempts to salvage its claims further
demonstrate the insufficiency of those claims, he said. The
Daimler Parties, hence, ask the Court to dismiss the lawsuit,
without leave to amend.
About Chrysler Group LLC
Chrysler Group LLC, formed in 2009 from a global strategic
alliance with Fiat Group, produces Chrysler, Jeep(R), Dodge, Ram
Truck, Mopar(R) and Global Electric Motorcars (GEM) brand vehicles
and products. Headquartered in Auburn Hills, Michigan, Chrysler
Group LLC's product lineup features some of the world's most
recognizable vehicles, including the Chrysler 300, Jeep Wrangler
and Ram Truck. Fiat will contribute world-class technology,
platforms and powertrains for small- and medium-sized cars,
allowing Chrysler Group to offer an expanded product line
including environmentally friendly vehicles.
About Chrysler LLC
Chrysler LLC and 24 affiliates on April 30 sought Chapter 11
protection from creditors (Bankr. S.D.N.Y (Mega-case), Lead Case
No. 09-50002). Chrysler hired Jones Day, as lead counsel; Togut
Segal & Segal LLP, as conflicts counsel; Capstone Advisory Group
LLC, and Greenhill & Co. LLC, for financial advisory services; and
Epiq Bankruptcy Solutions LLC, as its claims agent. Chrysler has
changed its corporate name to Old CarCo following its sale to a
Fiat-owned company. As of December 31, 2008, Chrysler had
$39,336,000,000 in assets and $55,233,000,000 in debts. Chrysler
had $1.9 billion in cash at that time.
In connection with the bankruptcy filing, Chrysler reached an
agreement with Fiat SpA, the U.S. and Canadian governments and
other key constituents regarding a transaction under Section 363
of the Bankruptcy Code that would effect an alliance between
Chrysler and Italian automobile manufacturer Fiat. Under the
terms approved by the Bankruptcy Court, the company formerly known
as Chrysler LLC on June 10, 2009, formally sold substantially all
of its assets, without certain debts and liabilities, to a new
company that will operate as Chrysler Group LLC. Fiat has a 20
percent equity interest in Chrysler Group.
Bankruptcy Creditors' Service, Inc., publishes Chrysler Bankruptcy
News. The newsletter tracks the Chapter 11 proceedings of
Chrysler LLC and its debtor-affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
CHRYSLER LLC: Amends Plan to Ensure April 30 Consummation
---------------------------------------------------------
Bill Rochelle at Bloomberg News reports that Old Carco LLC,
formerly Chrysler LLC, filed a motion asking the bankruptcy judge
to allow a technical amendment in the confirmed Chapter 11 plan so
that it can be implemented on April 30 as scheduled. At the
confirmation hearing earlier this month, the judge said he would
permit implementation of the plan inside the 14-day waiting period
that ordinarily holds up consummation. Even so, Old Chrysler's
motion filed April 27 asks the judge to allow it to make a
"nonsubstantive" modification to the plan to ensure that
implementation is permitted this week.
About Chrysler Group LLC
Chrysler Group LLC, formed in 2009 from a global strategic
alliance with Fiat Group, produces Chrysler, Jeep(R), Dodge, Ram
Truck, Mopar(R) and Global Electric Motorcars (GEM) brand vehicles
and products. Headquartered in Auburn Hills, Michigan, Chrysler
Group LLC's product lineup features some of the world's most
recognizable vehicles, including the Chrysler 300, Jeep Wrangler
and Ram Truck. Fiat will contribute world-class technology,
platforms and powertrains for small- and medium-sized cars,
allowing Chrysler Group to offer an expanded product line
including environmentally friendly vehicles.
About Chrysler LLC
Chrysler LLC and 24 affiliates on April 30 sought Chapter 11
protection from creditors (Bankr. S.D.N.Y (Mega-case), Lead Case
No. 09-50002). Chrysler hired Jones Day, as lead counsel; Togut
Segal & Segal LLP, as conflicts counsel; Capstone Advisory Group
LLC, and Greenhill & Co. LLC, for financial advisory services; and
Epiq Bankruptcy Solutions LLC, as its claims agent. Chrysler has
changed its corporate name to Old CarCo following its sale to a
Fiat-owned company. As of December 31, 2008, Chrysler had
$39,336,000,000 in assets and $55,233,000,000 in debts. Chrysler
had $1.9 billion in cash at that time.
In connection with the bankruptcy filing, Chrysler reached an
agreement with Fiat SpA, the U.S. and Canadian governments and
other key constituents regarding a transaction under Section 363
of the Bankruptcy Code that would effect an alliance between
Chrysler and Italian automobile manufacturer Fiat. Under the
terms approved by the Bankruptcy Court, the company formerly known
as Chrysler LLC on June 10, 2009, formally sold substantially all
of its assets, without certain debts and liabilities, to a new
company that will operate as Chrysler Group LLC. Fiat has a 20
percent equity interest in Chrysler Group.
Bankruptcy Creditors' Service, Inc., publishes Chrysler Bankruptcy
News. The newsletter tracks the Chapter 11 proceedings of
Chrysler LLC and its debtor-affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
CHRYSLER LLC: Sues Colorado Officials to Stop New Dealer Laws
-------------------------------------------------------------
Old Carco LLC f/k/a Chrysler LLC, Old Carco Motors LLC f/k/a
Chrysler Motors LLC, and Chrysler Group LLC n/k/a New Chrysler
seek a declaration from the Court that recently enacted amendments
to the dealer law of Colorado that impose obligations on New
Chrysler and grant rights to certain dealers are in conflict with,
and therefore are preempted by, the Bankruptcy Code and final
orders issued by the Court in connection with the "free and clear"
sale of substantially all of the Debtors' assets to New Chrysler
and the rejection of dealer agreements with 789 of the Debtors'
Chrysler, Jeep, and Dodge dealers.
In addition, New Chrysler seeks a permanent injunction barring
enforcement of the Colorado Dealer Law against New Chrysler and
relieving New Chrysler of any need to comply with the provisions
of the Colorado Dealer Law with respect to the Rejected Dealers.
Accordingly, the Debtors filed a complaint against these persons:
-- John Suthers, the Attorney General for the State of
Colorado, whose responsibilities include enforcement of
Colorado law;
-- Roxy Huber, the Executive Director of the Colorado
Department of Revenue, which oversees the Motor Vehicle
Dealer Board; and
-- Bruce Zulauf, the Division Director and Executive Secretary
of the Colorado Motor Vehicle Dealer Board, which acts as
the administrative arm in the licensing and regulation of
motor vehicle dealers.
Corinne Ball, Esq., at Jones Day, in New York, relates that
beginning in mid-June 2009, after the entry of the order approving
the sale of substantially all the Debtors' assets to Fiat S.p.A.
and the rejection of executory contracts in connection with the
sale, the Rejected Dealers shifted their fight to intense lobbying
efforts designed to persuade their state legislators to amend
existing dealer laws to provide them with reinstatement rights,
which paid off in Colorado and resulted in the amendment of the
dealer law of Colorado, inter alia, for the reinstatement of
Rejected Dealers.
The Colorado Dealer Law requires New Chrysler to: (i) within 90
days after termination due to a manufacturer's insolvency (a) pay
Rejected Dealers the fair market value of the dealer's goodwill
for the line-make as of the rejection date and (b) reimburse the
Rejected Dealer for any manufacturer-required improvements during
the five years prior to the rejection; or (ii) provide Rejected
Dealers with the option of either a right of first refusal or
receiving payments for goodwill, among other termination-related
payments.
Ms. Ball points out that the Colorado Dealer Law forces New
Chrysler to enter into dealer agreements and do business with
Rejected Dealers whose agreements already were properly rejected
because they were poor performers in terms of sales or customer
satisfaction or as a result of other deficiencies or concerns.
The Colorado Dealer Law essentially grants blocking rights to the
Rejected Dealers and interferes with New Chrysler's ability to
establish "Genesis" dealerships, or dealerships with Chrysler,
Jeep, and Dodge operations under one roof and ownership,
consistent with New Chrysler's business plans underlying the Fiat
Transaction, and thwarts New Chrysler's ability to enter into new
dealer agreements with existing, assumed dealers to accomplish its
Genesis plans, Ms. Ball argues. She explains that by these
effects, among others, the Colorado Dealer Law seeks to impose
liabilities on New Chrysler contrary to the Court's Orders and in
a manner that the Court already has found is preempted.
Ms. Ball also notes that the Debtors will be irreparably harmed if
the enforcement of the Colorado Dealer Law is not enjoined. She
says that the Debtors have a distinct interest in ensuring that
the benefits of the Sale Order and the Rejection Order are
preserved and have an express obligation under the master
transaction agreement that they entered with New Chrysler and Fiat
to take all necessary and appropriate actions after the closing of
the Fiat Transaction to assure to New Chrysler that all of the
assets, rights, interests, and privileges conveyed to New Chrysler
are realized.
About Chrysler Group LLC
Chrysler Group LLC, formed in 2009 from a global strategic
alliance with Fiat Group, produces Chrysler, Jeep(R), Dodge, Ram
Truck, Mopar(R) and Global Electric Motorcars (GEM) brand vehicles
and products. Headquartered in Auburn Hills, Michigan, Chrysler
Group LLC's product lineup features some of the world's most
recognizable vehicles, including the Chrysler 300, Jeep Wrangler
and Ram Truck. Fiat will contribute world-class technology,
platforms and powertrains for small- and medium-sized cars,
allowing Chrysler Group to offer an expanded product line
including environmentally friendly vehicles.
About Chrysler LLC
Chrysler LLC and 24 affiliates on April 30 sought Chapter 11
protection from creditors (Bankr. S.D.N.Y (Mega-case), Lead Case
No. 09-50002). Chrysler hired Jones Day, as lead counsel; Togut
Segal & Segal LLP, as conflicts counsel; Capstone Advisory Group
LLC, and Greenhill & Co. LLC, for financial advisory services; and
Epiq Bankruptcy Solutions LLC, as its claims agent. Chrysler has
changed its corporate name to Old CarCo following its sale to a
Fiat-owned company. As of December 31, 2008, Chrysler had
$39,336,000,000 in assets and $55,233,000,000 in debts. Chrysler
had $1.9 billion in cash at that time.
In connection with the bankruptcy filing, Chrysler reached an
agreement with Fiat SpA, the U.S. and Canadian governments and
other key constituents regarding a transaction under Section 363
of the Bankruptcy Code that would effect an alliance between
Chrysler and Italian automobile manufacturer Fiat. Under the
terms approved by the Bankruptcy Court, the company formerly known
as Chrysler LLC on June 10, 2009, formally sold substantially all
of its assets, without certain debts and liabilities, to a new
company that will operate as Chrysler Group LLC. Fiat has a 20
percent equity interest in Chrysler Group.
Bankruptcy Creditors' Service, Inc., publishes Chrysler Bankruptcy
News. The newsletter tracks the Chapter 11 proceedings of
Chrysler LLC and its debtor-affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
CHRYSLER LLC: Judge Refusal to Reconsider Order Challenged
----------------------------------------------------------
Bankruptcy Law360 reports that dozens of U.S. automobile dealers
are challenging a bankruptcy judge's refusal to reconsider an
order allowing Chrysler LLC castoff Old Carco LLC to reject their
executory contracts and unexpired leases, arguing that the judge
improperly changed the meaning of certain testimony.
About Chrysler Group
Chrysler Group LLC, formed in 2009 from a global strategic
alliance with Fiat Group, produces Chrysler, Jeep(R), Dodge, Ram
Truck, Mopar(R) and Global Electric Motorcars (GEM) brand vehicles
and products. Headquartered in Auburn Hills, Michigan, Chrysler
Group LLC's product lineup features some of the world's most
recognizable vehicles, including the Chrysler 300, Jeep Wrangler
and Ram Truck. Fiat will contribute world-class technology,
platforms and powertrains for small- and medium-sized cars,
allowing Chrysler Group to offer an expanded product line
including environmentally friendly vehicles.
About Chrysler LLC
Chrysler LLC and 24 affiliates on April 30 sought Chapter 11
protection from creditors (Bankr. S.D.N.Y (Mega-case), Lead Case
No. 09-50002). Chrysler hired Jones Day, as lead counsel; Togut
Segal & Segal LLP, as conflicts counsel; Capstone Advisory Group
LLC, and Greenhill & Co. LLC, for financial advisory services; and
Epiq Bankruptcy Solutions LLC, as its claims agent. Chrysler has
changed its corporate name to Old CarCo following its sale to a
Fiat-owned company. As of December 31, 2008, Chrysler had
$39,336,000,000 in assets and $55,233,000,000 in debts. Chrysler
had $1.9 billion in cash at that time.
In connection with the bankruptcy filing, Chrysler reached an
agreement with Fiat SpA, the U.S. and Canadian governments and
other key constituents regarding a transaction under Section 363
of the Bankruptcy Code that would effect an alliance between
Chrysler and Italian automobile manufacturer Fiat. Under the
terms approved by the Bankruptcy Court, the company formerly known
as Chrysler LLC on June 10, 2009, formally sold substantially all
of its assets, without certain debts and liabilities, to a new
company that will operate as Chrysler Group LLC. Fiat has a 20
percent equity interest in Chrysler Group.
Bankruptcy Creditors' Service, Inc., publishes Chrysler Bankruptcy
News. The newsletter tracks the Chapter 11 proceedings of
Chrysler LLC and its debtor-affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
CITADEL BROADCASTING: Gets Final Nod for Lazard as Fin'l Advisor
----------------------------------------------------------------
Citadel Broadcasting Corp. and its units submit require the
services of a capable and experienced financial advisory and
investment banking firm and Lazard Freres & Co. LLC's resources
and capabilities, together with its prepetition experience
advising the Debtors, complements the services offered by the
Debtors' other restructuring professionals and render its
retention integral to the Debtors' success in their Chapter 11
cases.
The Debtors accordingly sought and obtained final approval from
the Court to engage Lazard as their financial advisor and
investment banker, nunc pro tunc to the Petition Date.
Before the Petition Date, the Debtors engaged Lazard to provide
general investment banking and financial advice in connection
with the Debtors' attempts to complete a strategic restructuring,
reorganization or recapitalization on May 20, 2009. Since the
commencement of its engagement, the Debtors assert that Lazard
has, among other things, familiarized itself with the Debtors'
businesses, evaluated the Debtors' liquidity positions and
assisted in identifying areas to improve and preserve liquidity,
evaluated the Debtors' range of financial and strategic
alternatives, including the possible sale of the Debtors to a
third party, and presented certain analyses and recommendations
to the Debtors' management and board of directors.
In addition, the Debtors relate that Lazard played a key role in
a negotiation with the Debtors' prepetition secured lenders,
which led to over 60% of the lenders supporting the framework for
a global restructuring solution.
As the Debtors' finance advisor, Lazard will provide these
services:
(a) review and analyze the Debtors' business, operations and
financial projections;
(b) evaluate the Debtors' potential debt capacity in light of
its projected cash flows;
(c) assist in the determination of a capital structure for the
Debtors;
(d) assist in the determination of a range of values for
Debtors on a going concern basis;
(e) advise the Debtors on tactics and strategies for
negotiating with stakeholders;
(f) render financial advice to the Debtors and participate in
meetings or negotiations with stakeholders or rating
agencies or other appropriate parties in connection with
any restructuring;
(g) advise the Debtors on the timing, nature, and terms of new
securities, other consideration or other inducements to be
offered pursuant to restructuring;
(h) advise and assist the Debtors in evaluating potential
financing transactions and, subject to Lazard's agreement
so to act and, if requested by Lazard, to execution of
appropriate agreements, on behalf of the Debtors, contact
potential sources of capital as the Debtors may designate
and assist the Debtors in implementing such a financing;
(i) assist the Debtors in preparing documentation within
Lazard's area of expertise that is required in connection
with the restructuring;
(j) assist the Debtors in identifying and evaluating
candidates for a potential sale transaction, advise the
Debtors in connection with negotiations and aiding in the
consummation of a sale transaction;
(k) attend meetings of the board of directors and its
committees with respect to matters on which Lazard has
been engaged to advise the Debtors;
(l) provide testimony, as necessary, with respect to matters
on which Lazard has been engaged to advise the Debtors in
any proceeding before the Bankruptcy Court; and
(m) provide the Debtors with other financial restructuring
advice.
The Debtors will pay Lazard a $175,000 monthly fee on the third
day of each month until the earlier of the completion of the
restructuring or the termination of Lazard's engagement. Monthly
Fees paid with respect to the first four months of Lazard's
engagement will be credited against any Restructuring Fee, Sale
Transaction Fee, Minority Sale Transaction Fee or Financing Fee
payable; provided that, the credit will only apply to the extent
that the fees are approved in their entirety by the Court.
In addition, the Debtors will pay Lazard these additional fees:
* Restructuring Fee equal to $6,000,000 payable upon
consummation of a restructuring;
* Sale Transaction Fee:
-- If, whether in connection with the consummation of a
Restructuring or otherwise, the Debtors consummate a
Sale Transaction incorporating all or a majority of the
assets or all or a majority or controlling interest in
the equity securities of the Debtors, Lazard will be
paid a fee equal to the greater of a certain fee
calculated based on a certain aggregate consideration or
the Restructuring Fee.
-- If, whether in connection with the consummation of a
Restructuring or otherwise, the Debtors consummate any
other Sale Transaction, the Debtors will pay Lazard a fee
based on the Aggregate Consideration calculated. One-
half of any Minority Sale Transaction Fee will be
credited against any Restructuring Fee or Sale
Transaction Fee.
-- Any Sale Transaction Fee or Minority Sale Transaction
Fee will be payable upon consummation of the applicable
Sale Transaction.
* Financing Fee:
-- If the Debtors consummate a Financing for which cash
proceeds are provided or made available by certain
entities, upon consummation the Debtors will pay Lazard a
fee by the entities, up to a maximum of $4,000,000. Any
Specified Financing Fee will not be credited against any
Restructuring Fee or Sale Transaction Fee subsequently
payable.
-- If the Debtors consummate any Financing involving other
entities, upon consummation the Debtors will pay Lazard a
fee equal to the amount set in a certain schedule in the
engagement letter with respect to any cash proceeds
provided or made available by other persons or entities.
One-half of any Financing Fee will be credited against
any Restructuring Fee or Sale Transaction Fee
subsequently payable.
In addition to any fees payable to Lazard and, regardless of
whether any transaction occurs, the Debtors will promptly
reimburse Lazard for all (a) reasonable expenses and (b) other
reasonable fees and expenses, including expenses of counsel, if
any.
The Debtors will indemnify and hold harmless Lazard and its
affiliates and its and their directors, officers, agents,
employees and controlling persons under certain circumstances.
Barry Ridings, a managing director of Lazard, assures the Court
that his firm is a "disinterested person" as that term is defined
in Section 101(14) of the Bankruptcy Code.
A copy of the engagement letter of the Parties is available for
free at http://bankrupt.com/misc/CtdlLazardLttr.pdf
About Citadel Broadcasting
Citadel Broadcasting Corporation (OTC BB: CTDB) --
http://www.citadelbroadcasting.com/-- is the third largest radio
group in the United States, with a national footprint reaching
more than 50 markets. Citadel is comprised of 166 FM stations and
58 AM stations in the nation's leading markets, in addition to
Citadel Media, which is one of the three largest radio networks in
the United States.
Citadel Broadcasting filed for Chapter 11 with 50 affiliates on
Dec. 20, 2009, in Manhattan (Bankr. S.D.N.Y. Case No. 09-17422).
The Company listed assets of $1.4 billion and debt of $2.5 billion
in its Chapter 11 filing. Kirkland & Ellis LLP is serving as
legal counsel and Lazard Freres & Co. LLC. As financial advisor
for the restructuring. Kurtzman Carson Consultants is serving as
claims and notice agent.
Bankruptcy Creditors' Service, Inc., publishes Citadel
Broadcasting Bankruptcy News. The newsletter tracks the Chapter
11 proceeding undertaken by Citadel Broadcasting Corp. and other
affiliates. (http://bankrupt.com/newsstand/or 215/945-7000)
CITADEL BROADCASTING: Has Plan Exclusivity Until Sept. 16
---------------------------------------------------------
Citadel Broadcasting Corporation and its affiliated debtors
received from the U.S. Bankruptcy Court for the Southern District
of New York an extension of the periods for which them may
exclusively file a Chapter 11 plan and solicit votes for that
plan.
The Debtors sought and obtained an extension of the exclusive
period for filing a Chapter 11 plan until July 19, 2010, and for
soliciting votes from creditors until September 16.
Pursuant to Section 1121(b) of the Bankruptcy Code, a debtor has
the exclusive right to file a plan of reorganization during the
first 120 days after the commencement of a chapter 11 case. If a
debtor files a plan during this exclusive filing period, Section
1121(c)(3) of the Bankruptcy Code grants an additional 60 days
during which the debtor may solicit acceptances of that plan and
no other party-in-interest may file a competing plan.
Jonathan S. Henes, Esq., at Kirkland & Ellis LLP, in New York --
jonathan.henes@kirkland.com -- notes that the Court has already
approved the Debtors' disclosure statement for their Chapter 11
Plan of Reorganization, thereby authorizing the Debtors to begin
the process of soliciting votes. To that end, a hearing to
consider confirmation of the Plan is set for May 12, 2010.
According to Mr. Henes, the Debtors are working extremely hard to
ensure their swift emergence from Chapter 11. Thus, the Debtors
ask an extension of the Exclusive Periods solely out of an
abundance of caution. He explains that with the Debtors' initial
120-day exclusive period to file a Chapter 11 plan set to expire
on April 19, 2010, it is appropriate and prudent to extend the
Exclusive Periods to preserve the Debtors' rights and ensure
additional time is available to exclusively propose an
alternative Chapter 11 plan if necessary.
Mr. Henes contends that an extension of the Exclusive Periods is
justified by the Debtors' efforts to date. He points out that in
the short time since the Petition Date, the Debtors have made
significant progress towards exiting Chapter 11 on an expedited
and consensual basis.
"The Plan and Disclosure Statement incorporate a global
settlement between and among the Debtors, their secured lenders
and the Committee, which the Debtors were able to broker
(following satisfying extensive diligence requests from the
Committee) in a very short time," Mr. Henes further notes.
About Citadel Broadcasting
Citadel Broadcasting Corporation (OTC BB: CTDB) --
http://www.citadelbroadcasting.com/-- is the third largest radio
group in the United States, with a national footprint reaching
more than 50 markets. Citadel is comprised of 166 FM stations and
58 AM stations in the nation's leading markets, in addition to
Citadel Media, which is one of the three largest radio networks in
the United States.
Citadel Broadcasting filed for Chapter 11 with 50 affiliates on
Dec. 20, 2009, in Manhattan (Bankr. S.D.N.Y. Case No. 09-17422).
The Company listed assets of $1.4 billion and debt of $2.5 billion
in its Chapter 11 filing. Kirkland & Ellis LLP is serving as
legal counsel and Lazard Freres & Co. LLC. As financial advisor
for the restructuring. Kurtzman Carson Consultants is serving as
claims and notice agent.
Bankruptcy Creditors' Service, Inc., publishes Citadel
Broadcasting Bankruptcy News. The newsletter tracks the Chapter
11 proceeding undertaken by Citadel Broadcasting Corp. and other
affiliates. (http://bankrupt.com/newsstand/or 215/945-7000)
CITADEL BROADCASTING: Lease Decision Period Extended Until June 18
------------------------------------------------------------------
The U.S. Bankruptcy Court has extended the time within which
Citadel Broadcasting Corp. may assume or reject unexpired leases
for an additional 60 days, through and including June 18, 2010,
without prejudice to seek additional extensions.
CITIGROUP INC: Taps Credit Suisse's Jarrett as Managing Director
----------------------------------------------------------------
Citigroup Inc. has hired Jennifer Jarrett from Credit Suisse to
join its global health care investment banking team as a managing
director, according to an internal memo obtained by DealBook.
Ms. Jarrett will start in July and be based in San Francisco.
According to the memo, Ms. Jarrett has focused on both large and
small cap biotechnology companies throughout her 15 year
investment banking career and will continue to do so at Citi.
According to the memo, prior to her role at Credit Suisse and
predecessor firm, Donaldson, Lufkin & Jenrette, Ms. Jarrett held
investment banking positions with Merrill Lynch and Kidder
Peabody. She received an MBA from Stanford University and is a
graduate of Dartmouth College.
About Citigroup
Based in New York, Citigroup Inc. (NYSE: C) -- is a global
diversified financial services holding company whose businesses
provide a broad range of financial services to consumer and
corporate customers. Citigroup has roughly 200 million customer
accounts and does business in more than 140 countries.
Citigroup's businesses are aligned in three reporting segments:
(i) Citicorp, which consists of Regional Consumer Banking (in
North America, EMEA, Asia, and Latin America) and the
Institutional Clients Group (Securities and Banking, including the
Private Bank, and Transaction Services); (ii) Citi Holdings, which
consists of Brokerage and Asset Management, Local Consumer
Lending, and a Special Asset Pool; and (iii) Corporate/Other.
As reported in the Troubled Company Reporter on November 25, 2008,
the U.S. government entered into an agreement with Citigroup to
provide a package of guarantees, liquidity access, and capital.
The U.S. Treasury and the Federal Deposit Insurance Corporation
agreed to provide protection against the possibility of unusually
large losses on an asset pool of roughly $306 billion of loans and
securities backed by residential and commercial real estate and
other such assets, which will remain on Citigroup's balance sheet.
As a fee for this arrangement, Citigroup issued preferred shares
to the Treasury and FDIC. The Federal Reserve agreed to backstop
residual risk in the asset pool through a non-recourse loan.
Citigroup, the third-biggest U.S. bank, received $45 billion in
bailout aid. Other bailed-out banks, including Bank of America
Corp., Wells Fargo & Co., have pledged to repay TARP money.
JPMorgan Chase & Co., Goldman Sachs Group Inc. and Morgan Stanley,
repaid TARP funds in June. Citigroup is selling assets to repay
the bailout funds.
Citigroup is one of the banks that, according to results of the
government's stress test, need more capital.
CMP SUSQUEHANNA: Moody's Reviews 'Caa3' Corporate Family Rating
---------------------------------------------------------------
Moody's Investors Service placed its ratings for CMP Susquehanna
Corporation under review for possible upgrade, including the
company's Caa3 Corporate Family Rating and Caa3 Probability-of-
Default Rating. The review is prompted by the expectation that
performance will improve in CMP's major markets in 2010 and
combined with restructuring activities completed in 2009, should
result in improved cash flow and reduced leverage. Covenants
however remain tight and leverage levels will likely remain very
high. The review will consider the outlook for the business, its
ability to stay within its financial covenants and sustainability
of its capital structure.
Details of the ratings placed under review for possible upgrade
are:
* Corporate Family Rating -- Caa3
* Probability of Default rating -- Caa3
* Senior subordinated notes due 2014 -- Ca (LGD6, 96%)
* Senior secured credit facilities due 2012 / 2013 -- Caa3 (LGD3,
39%)
The last rating action on CMP occurred on April 7, 2009 when
Moody's assigned a limited default to CMP's Probability-of-Default
rating following its debt exchange.
CMP Susquehanna Corp., headquartered in Atlanta, Georgia, is a
wholly-owned subsidiary of Cumulus Media Partners LLC, the private
partnership formed by Cumulus Media, Inc. and a consortium of
private equity sponsors. CMP Susquehanna Corp. owns and operates
27 radio stations in nine markets in the U.S. The company's
reported revenues of $169 million for the year ended December 31,
2009.
CMP SUSQUEHANNA: S&P Raises Corporate Credit Rating to 'B-'
-----------------------------------------------------------
Standard & Poor's Ratings Services raised its corporate credit and
issue-level ratings on Atlanta, Ga.-based CMP Susquehanna Radio
Holdings Corp. by one notch. The corporate credit rating was
raised to 'B-' from 'CCC+'. The rating outlook is stable. The
recovery ratings on the company's debt issues remain unchanged.
"The rating upgrade reflects CMP Susquehanna's good EBITDA margin
despite economic and industry pressures, and S&P's expectation
that CMP will maintain adequate liquidity and covenant compliance
over the intermediate term," said Standard & Poor's credit analyst
Jeanne Shoesmith.
The 'B-' rating reflects the company's very high leverage, narrow
cushion of covenant compliance, unfavorable secular trends in
radio advertising, and advertising cyclicality.
CMP owns 27 radio stations in nine markets, including four of the
top 10 markets: San Francisco, Calif.; Houston and Dallas-Fort
Worth, Texas; and Atlanta, Ga. The company competes with much
larger peers, especially in San Francisco and Dallas-Fort Worth.
Some geographic concentration exists in San Francisco and Dallas,
which together contribute roughly half of revenues. CMP's EBITDA
margin, at 40% for the 12 months ended Dec. 31, 2009, compares
favorably to peers'.
COLORADO TIMBER: Case Summary & 3 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: Colorado Timber Ridge Ranch, LP
395 Del Monte Center, #315
Monterey, CA 93940
Bankruptcy Case No.: 10-20006
Chapter 11 Petition Date: April 27, 2010
Court: U.S. Bankruptcy Court
District of Colorado (Denver)
Debtor's Counsel: Kenneth J. Buechler, Esq.
1828 Clarkson Street, Suite 200
Denver, CO 80218
Tel: (720) 381-0045
Fax: (720) 381-0392
E-mail: ken@kjblawoffice.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $500,001 to $1,000,000
According to the schedules, the Company says that assets total
$2,129,227 while debts total $715,908.
A copy of the Company's list of 3 largest unsecured creditors
filed together with the petition is available for free at
http://bankrupt.com/misc/cob10-20006.pdf
The petition was signed by W. Joseph Machock.
COMMACK INVESTOR: Voluntary Chapter 11 Case Summary
---------------------------------------------------
Debtor: Commack Investor Group Inc.
82-84 Lafayette Avenue
Brooklyn, NY 11217
Bankruptcy Case No.: 10-43760
Chapter 11 Petition Date: April 28, 2010
Court: U.S. Bankruptcy Court
Eastern District of New York (Brooklyn)
Judge: Elizabeth S. Stong
Debtor's Counsel: Wilmer Hill Grier, Esq.
823 Jefferson Avenue
Brooklyn, NY 11221
Tel: (646) 286-5551
Fax: (718) 443-3873
Estimated Assets: $1,000,001 to $10,000,000
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 Richard Johnson.
CONGOLEUM CORP: SGS Completes Feasibility Analysis on Company
-------------------------------------------------------------
On April 26, 2010, Congoleum Corporation provided to various
parties in its pending bankruptcy proceedings a copy of an expert
report titled "Feasibility Analysis for Congoleum Corporation",
prepared by SSG Capital Advisors, LLC. SSG was retained to
provide this feasibility analysis for use in litigation and
litigation support in connection with the confirmation of the
Company's Plan of Reorganization. SGS assumes no liability for
certain information contained in the report which were obtained
from the Company's management.
The feasibility analysis is based on projected financial results
for the fiscal years ending December 31, 2010, 2011, 2012, 2013,
and 2014, which were provided by the Company. The financial
projections assume that the effective date of the Plan of
Reorganization is June 30, 2010, and that the Company will have
the following post-confirmation capital structure:
-- Upon the Effective Date, the Company expects to have access
to a $40.0 million revolving credit facility from Wells Fargo
Capital Finance, which is the Company's existing debtor-in-
possession lender. The terms of the Revolver include an 85%
advance on eligible accounts receivable, a 50% advance on
eligible inventory and a $6.5 million advance on fixed assets
(amortizing fully over six years).
-- A note payable related to certain reorganization and legal
fees will be issued in the initial amount of $7.7 million.
The Note will amortize in six quarterly payments of 8.33% of
the original principal amount starting at the end of the
first quarter after the Effective Date followed by four
quarterly payments of 12.5% of the original principal amount.
-- The Company will issue $33 million of New Senior Notes. The
notes are interest only and mature on December 31, 2017.
There will be no interest due for the first six months after
the Effective Date. From the interest payment due month
twelve after the Effective Date through the payment due month
thirty after the Effective Date, the Company will have the
option to pay interest in kind by the issuance of additional
Senior Notes. The projection model assumes that the Company
exercises this option.
-- Commencing with the end of the fiscal year ending
December 31, 2011, the Company will issue Senior Notes in an
amount equal to its net debt capacity (defined as average
EBITDA for the prior two fiscal years times four) less the
amount of total indebtedness. The projections indicate that
the Company will issue $10.9 million of Senior Notes in 2014.
SSG Capital Advisors, L.L.C. is a leading boutique middle market
special situations investment banking firm with offices outside of
Philadelphia, Pa. and in New York, N.Y. Services include mergers
and acquisitions; private placements of senior and subordinated
debt and equity; financial restructurings; and complex valuations
and fairness opinions.
A full-text copy of the feasibility analysis is available at no
charge at http://researcharchives.com/t/s?60e7
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.
CONTINENTAL AIRLINES: May Announce Merger Deal with UAL on Monday
-----------------------------------------------------------------
According to Gina Chon and Susan Carey at The Wall Street Journal,
people familiar with the matter said Continental Airlines Inc. and
UAL Corp.'s United Airlines are expected to announce Monday that
they are merging to form the world's largest airline.
According to the Journal, these sources said UAL's board of
directors is meeting Friday, while Continental's board is meeting
Friday and Sunday to discuss the deal. The sources, however,
cautioned that negotiations could still fall apart as they did in
2008, when Continental backed away. But after a hiccup over
pricing, the talks appear on track, they said.
As reported by the Troubled Company Reporter earlier this week,
Ms. Carey and Ms. Chon had said a $500 million contingent
liability that UAL would have to pay the Pension Benefit Guaranty
Corp. if a merger deal gets done, has added to the impasse between
UAL and Continental. They explained the payment would kick in if
the two carriers merged and together threw off more than $3.5
billion in annual earnings before interest, taxes, depreciation
and aircraft rent. According to the Journal, the liability dates
to 2005, when United terminated its four underfunded employee
pension plans in bankruptcy, and the PBGC took over the plans. In
exchange, the PBGC received $1.5 billion in notes and convertible
stock in the reorganized UAL, which left court protection in early
2006. The Journal added that one person familiar with the matter
said this wrinkle has now become part of the dispute over the
share price in the stock swap.
In their report Thursday, Ms. Chon and Ms. Carey did not indicate
how UAL's obligation to the PBGC will be addressed.
Sources told the Journal Continental's board met Wednesday and
agreed to continue the talks. It was also asked to consider a
range of prices in an effort to resolve the share-swap
disagreement.
The Journal says a weekend impasse over which share-price ratio
should be used to calculate the deal's value appeared to resolved
itself as UAL's share price declined this week. The Journal
relates the market is now expecting a swap of about 1.057 UAL
shares for each share of Continental.
Ms. Chon and Ms. Carey relate that United had wanted the exchange
terms to be based on the closing price of its stock on the day
before any agreement is signed. But that would lower the value
for Houston-based Continental shareholders, since UAL shares have
climbed more than Continental's since United's interest in a
merger was disclosed earlier this month, they report.
People familiar with the details have told the Journal Continental
wants its shareholders to be paid with UAL shares valued at their
average price in the 30-day period before April 7, when UAL stock
started to rise over news reports that it was in merger talks with
US Airways Group Inc. United wants to use the price of its shares
the day before a merger deal is signed.
UAL shares fell 3.6% Monday to $22.17, while Continental stock
rose 5% to $23.13. According to the Journal, Continental's stock
didn't start to rise until news leaked that it began merger talks
with United less than two weeks ago.
The Journal notes that in 4 p.m. trading on the Nasdaq Thursday,
UAL shares were down 1.3% to $21.47, while Continental shares were
up 2.4% to $22.70 on the New York Stock Exchange.
As reported by the Troubled Company Reporter last week, US Airways
withdrew from its own merger talks with United.
Sources have told the Journal that if a merger does go through,
Jeff Smisek, Continental's chief executive, would become chief
executive of the combined company, while Glenn Tilton, UAL's CEO,
would become the nonexecutive chairman. The company would be
based in Chicago, and United would be the surviving brand, the
people said, according to the Journal.
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.
CONTINENTAL AIRLINES: UAL Execs to Get Millions in Merger
---------------------------------------------------------
The Financial Times, citing a blog entry on Footnoted.org, reports
that the top five executives at UAL Corporation stand to receive
millions in cash and stock if United Airlines closes a merger deal
with Continental Airlines Inc.
FT relates that, according to Footnoted.org, had a merger happened
in 2009, UAL Chairman and Chief Executive Glenn Tilton would have
received $9 million in a payout triggered by a change in control
of the company. That figure is nearly four times the figure
listed on the previous year's proxy filing.
According to the report, the executives, as part of their pay
packages, benefit from explicit clauses which trigger accelerated
payouts should there be a change in control. In total, the top
five United executives would have been entitled to about $17.6
million in 2009, FT relates, citing Footnoted.org.
Performance-based equity rewards, normally paid out over several
years, would be brought forward if more than 50% of UAL shares
changed hands, FT notes.
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.
CONVERSION SERVICES: Glenn Peipert Steps Down as Director
---------------------------------------------------------
Glenn Peipert on April 12, 2010, notified Conversion Services
International, Inc., that effective immediately, he is resigning
from the board of directors of the Company. Mr. Peipert's
resignation is not as a result of any disagreement with the
Company on any matter relating to the Company's operations,
policies or practices.
East Hanover, N.J.-based Conversin Services International, Inc. is
a technology and business process improvement and management firm
providing professional services to the Global 2000 as well as mid-
market clientele.
The Company's balance sheet as of December 31, 2009, showed
$4.5 million in assets, $5.3 million of debts, and $1.5 million of
Series A convertible preferred stock, for a stockholders' deficit
of $2.3 million.
Frieman LLP, in East Hanover, N.J., 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, negative cash flows, is not in compliance with a
covenant associated with its Line of Credit and has significant
future cash flow commitments.
COOPER-STANDARD: Gets $150 Million Working Capital Loan
-------------------------------------------------------
Bill Rochelle at Bloomberg News reports that Cooper-Standard
Automotive Inc. is seeking approval from the Bankruptcy Court to
pay fees in connection with a $150 million working-capital loan to
comprise part of the financing enabling an exit from bankruptcy
following the May 12 confirmation hearing for approval of the
Chapter 11 plan. A hearing on the financing commitment is
scheduled for May 5. Other financing for the plan includes a
$450 million note offering and a backstopped $355 million equity-
rights offering.
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
customers 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-
CRESCENT RESOURCES: Five Mile Soliciting Votes Against Plan
-----------------------------------------------------------
Bill Rochelle at Bloomberg News reports that Five Mile Capital
Partners LLC was authorized by the bankruptcy judge on April 26 to
send a letter urging secured creditors to vote against the Chapter
11 plan of Crescent Resources LLC. Five Mile, which once
supported the reorganization plan, now wants creditors to vote
"no" because corporate governance documents filed after approval
of the disclosure statement provide that the board of the
reorganized company will have "no fiduciary duty of care or
fiduciary duty of loyalty" to the Company. Five Mile holds
$112.5 million in secured debt.
Crescent Resources' Plan
The deadline for voting on the Plan is May 10. The hearing for
confirmation of the Plan is set for May 20.
Crescent Resources LLC filed an amended reorganization plan on
March 11. Significant terms of the Amended Plan include:
-- Holders of prepetition secured debt will receive a
combination of reinstated debt and 100% of the equity of the
reorganized company. Holders of the prepetition lenders
claims aggregating $1.55 billion will recover 38% of their
claims.
-- General unsecured creditors owed a total of $305.4 million
will receive an interest in a litigation trust to be formed
as part of the Plan.
-- Various project level lenders will have their existing debt
reinstated.
Lazard estimates the Reorganized Debtors' enterprise value to
range from $588 million to $665 million, with a midpoint of
roughly $626 million. The Reorganization Value was based on the
estimated enterprise value of the operations and assets of the
Reorganized Debtors through the application of, among other
analyses, a discounted cash flow valuation methodology of the
Debtors' operations using a range of discount rates from 15% to
20%, which imputed a present value of free cash flows of those
operations over the life of the business.
Black-lined versions of the Amended Plan and Disclosure Statement
are available for free at:
http://bankrupt.com/misc/Crescent_AmendedDS.pdf
http://bankrupt.com/misc/Crescent_AmendedPlan.pdf
The Official Committee of Unsecured Creditors is opposing the
Plan. It believes that a Chapter 7 liquidation will yield higher
recoveries for unsecured creditors.
About Crescent Resources
Crescent Resources, LLC -- http://www.crescent-resources.com/--
is a land management and real estate development company with
interests in 10 states in the southeastern and southwestern United
States. Based in Charlotte, North Carolina, Crescent Resources is
a joint venture between Duke Energy and the Morgan Stanley Real
Estate Funds. Established in 1969, Crescent creates mixed-use
developments, award-winning country club communities, single-
family neighborhoods, apartment and condominium communities, Class
A office space, business and industrial parks and shopping
centers.
Crescent Resources and 120 affiliates filed separate chapter 11
petitions on June 10, 2009 (Bankr. W.D. Tex. Lead Case No. 09-
11507). The Hon. Craig A. Gargotta presides over the case.
Attorneys at Weil Gotshal Manges LLP represent the Debtors in
their Chapter 11 cases. Eric J. Taube, Esq., at Hohmann, Taube &
Summers, L.L.P., serves as the Debtors' co-counsel. Garden City
Group serves as claims and notice agent. The Debtors disclosed
more than $1 billion each in assets and debts when they filed for
bankruptcy.
CRYOPORT INC: Registers 1.6MM Shares Under Incentive Plans
----------------------------------------------------------
CryoPort, Inc., filed with the Securities and Exchange Commission
a Form S-8 Registration Statement under the Securities Act of 1933
to register an aggregate 1,659,131 shares issuable under the
Company's 2002 Stock Incentive Plan and 2009 Stock Incentive Plan.
The proposed maximum aggregate offering price is $3,648,722.
A full-text copy of the registration statement is available at no
charge at http://ResearchArchives.com/t/s?60e3
About CryoPort Inc.
Headquartered in Lake Forest, Calif., CryoPort, Inc. (OTC BB:
CYRXD) -- http://www.cryoport.com/-- provides innovative cold
chain frozen shipping system dedicated to providing superior,
affordable cryogenic shipping solutions that ensure the safety,
status and temperature of high value, temperature sensitive
materials. The Company has developed a line of cost-effective
reusable cryogenic transport containers capable of transporting
biological, environmental and other temperature sensitive
materials at temperatures below 0o Celsius.
At December 31, 2009, the Company's consolidated balance sheets
showed $1,964,134 in total assets and $21,585,470 in total
liabilities, resulting in a $19,621,336 shareholders' deficit.
The Company's consolidated balance sheets at December 31, 2009,
also showed strained liquidity with $895,205 in total current
assets available to pay $20,092,678 in total current liabilities.
Going Concern
In its report on Form 10-Q for the period ended December 31, 2009,
the Company said it has not generated significant revenues from
operations and has no assurance of any future revenues. The
Company generated revenues from operations of $35,124, incurred a
net loss of $16,705,151 and used cash of $2,586,470 in its
operating activities during the year ended March 31, 2009. The
Company generated revenues from operations of $42,888, had net
loss of $5,085,376, and used cash of $1,941,693 in its operating
activities during the nine months ended December 31, 2009. In
addition, the Company had a working capital deficit of
$19,197,473, and had cash and cash equivalents of $647,308 at
December 31, 2009. The Company's working capital deficit at
December 31, 2009, included $13,740,633 of derivative liabilities,
the balance of which represented the fair value of warrants and
embedded conversion features related to the Company's convertible
debentures which were reclassified from equity during the nine
months ended December 31, 2009. Currently management has
projected that cash on hand, including cash borrowed under the
convertible debentures issued in the first, second, and third
quarter of fiscal 2010, will be sufficient to allow the Company to
continue its operations only into the fourth quarter of fiscal
2010. These matters raise substantial doubt about the Company's
ability to continue as a going concern.
CUMULUS MEDIA: Moody's Affirms Corporate Family Rating at 'Caa2'
----------------------------------------------------------------
Moody's Investors Service affirmed Cumulus Media Inc.'s Caa1
Corporate Family Rating, Caa2 Probability-of-Default Rating and
Caa1 Senior Secured Bank Debt ratings, as outlined below, and
revised the company's rating outlook to stable from negative. The
stable outlook reflects Moody's expectation that while leverage
will remain very high, Cumulus' operating performance should begin
to improve over the rating horizon as economic pressures continue
to gradually subside. The company is also benefiting from a
restructuring of its operations which took a material level of
costs out of the business, only a portion of which are expected to
return as revenues increase.
Cumulus' Caa1 CFR primarily reflects ongoing high debt-to-EBITDA
leverage (9x at FYE 2009, incorporating Moody's standard
adjustments) and uncertainty surrounding the company's ability to
remain in compliance with its total leverage covenant (once
reinstated in March 31, 2011). Over the projection period, modest
revenue growth and significant cost reductions (implemented in
2009) will contribute to Cumulus' positive free cash flow
generation, declining leverage and growing margins. While it will
be challenging for the company to remain in compliance with the
March 2011 covenant and subsequent step-downs, if performance
continues to improve, the likelihood that lenders would provide
another amendment without a major restructuring improves as well.
Details of the rating actions are:
Cumulus Media Inc.
* Corporate Family rating -- affirmed Caa1
* Probability of Default rating -- affirmed Caa2
* Senior secured revolving credit facility due 2012-affirmed Caa1
(LGD 3, 34%)
* $750 million senior secured term loan due 2014 -- affirmed
Caa1(LGD 3, 34%)
The rating outlook has been revised to stable from negative.
The last rating action occurred on April 22, 2009, when Moody's
downgraded Cumulus' CFR to Caa1 from B3 and PDR to Caa2 from Caa1.
Headquartered in Atlanta, Georgia, Cumulus Media Inc. is one of
the nation's largest radio broadcasting companies, operating 344
radio stations in 68 markets. The company reported 2009 revenues
of approximately $256 million.
DOUBLE G: Files List of 21 Largest Unsecured Creditors
------------------------------------------------------
Double G Ranch, LLC, has filed with the U.S. Bankruptcy Court for
the Eastern District of Michigan an amended list of its 21 largest
unsecured creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Peter J. Graves
9097 Pine Lake Road
East Jordan, MI 49727 Loan $660,000
Timothy McKay
14217 Middlebury Court
Shelby Township, MI 48315 Loan $571,000
Carl & Susan Thompson
3461 S. East Court Drive
Stuart, FL 34997 Loan $450,000
Adelaide Barbieri
4601 Inverness Court
Dexter, MI 48130 Loan $260,000
Gary Stroh
P.O. Box 2145
Eagle, CO 81631 Loan $250,000
Radom III Group
Butzel Long
41000 Woodward Avenue
Bloomfield Hills, MI 48304 Loan $250,000
Susanne Stroh
40337 County Road 13
Elizabeth, CO 80107 Loan $250,000
Weatherly Stroh Sammuelson
P.O> Box 404
Wolcott, CO 81655 Loan $250,000
Michael Waterman Profit
Sharing
165 Vorn Lane
Bloomfield, MI 48301 Loan $250,000
Double G Shea Medical Plaza Management Fees $242,000
Double G Arrowhead Orchards Management Fees $213,000
Ann Sulek Loan $205,000
Gary Belfore Loan $200,000
Kenneth Law Loan $200,000
Corrine Smorra Kesteloot &
Arthur Kesteloot Loan $175,000
Arlyne & Walter Zabawa Loan $170,000
Robert & Diane Drost Loan $150,000
Faye Guss Loan $142,000
Depco Partners, LLC Loan $137,500
Dallas Rhodes & Donice Breza Loan $130,000
James & Kathy Schlueter Loan $130,000
Scottsdale, Arizona-based Double G. Ranch, LLC, filed for Chapter
11 bankruptcy protection on April 20, 2010 (Bankr. E.D. Mich. Case
No. 10-53029). Matthew Wilkins, Esq., who has an office in
Birmingham, Michigan, assists the Company in its restructuring
effort. The Company estimated its assets and debts at $10,000,001
to $50,000,000.
DOUBLE G: Taps Brooks Wilkins as General Counsel
------------------------------------------------
Double G Ranch, LLC, has sought permission from the U.S.
Bankruptcy Court for the Eastern District of Michigan to employ
Brooks Wilkins Sharkey & Turco, PLLC (BWST) as general insolvency
counsel.
BWST will, among other things:
a) prepare motions, answers, applications and other
pleadings, reports and paper as necessary in the
administration of the Debtor's estate;
b) take all necessary legal action to protect and preserve
the Debtor's estate, including the prosecution of actions
and adversary or other proceedings on behalf of the
Debtor;
c) defend the Debtor's interest in any adversary proceedings
commenced against the Debtor; and
d) evaluate and object to claims filed against the Debtor's
estate, as necessary.
BWST will be paid based on the hourly rates of its personnel:
Matthew E. Wilkins $430
Paula A. Hall $345
Michael R. Turco $335
James M. McAskin $230
Mary Magdea, Paralegal $125
Matthew E. Wilkins, a member at BWST, assures the Court that the
firm is "disinterested" as that term is defined in Section 101(14)
of the Bankruptcy Code.
Scottsdale, Arizona-based Double G. Ranch, LLC, filed for Chapter
11 bankruptcy protection on April 20, 2010 (Bankr. E.D. Mich. Case
No. 10-53029). The Company estimated its assets and debts at
$10,000,001 to $50,000,000.
DREIER LLP: Settlements with U.S. Government Rejected by Judge
--------------------------------------------------------------
Noeleen G. Walder at New York Journal reports that the U.S.
government and the trustees charged with liquidating the estate of
Marc S. Dreier and his firm Dreier LLP hit a road block when The
Hon. Stuart M. Bernstein of the U.S. Bankruptcy Court for the
Southern District of New York rejected two agreements reached
between the parties. According to the report, Judge Bernstein
said both agreements were reasonable, but concluded that he did
not have jurisdiction to enforce the bar order.
New York Journal relates the first agreement required GSO Capital
Partners, which invested in fake promissory notes peddled by
Dreier, to pay about $9.5 million to the trustees. In return, the
trustees agreed to release GSO from claims relating to payments it
received as a result of the fraud. The second but related pact
provides that the government would release nearly 100 artworks
worth as much as $3 million, which have not been traced to Mr.
Dreier's crimes, to Chapter 11 trustee Sheila Gowan. In turn,
Ms. Gowan, of Diamond McCarthy, had vowed to refrain from
contesting certain forfeited funds, including some $31 million
that GSO will turn over to the government.
About Dreier LLP
Marc Dreier founded New York-based law firm Dreier LLP --
http://www.dreierllp.com/-- in 1996.
On December 8, 2008, the U.S. Securities and Exchange Commission
filed a suit, alleging that Mr. Dreier made fraudulent offers and
sales of securities in several cities, selling fake promissory
notes to hedge and other private investment funds. The SEC
asserted that Mr. Dreier also distributed phony financial
statements and audit opinions, and recruited accomplices in
connection with that scheme. Mr. Dreier has been charged by the
U.S. government for conspiracy, securities fraud and wire fraud
before the U.S. District Court for the Southern District of New
York (Manhattan) (Case No. 09-cr-00085-JSR).
Dreier LLP filed for Chapter 11 on December 16, 2008 (Bankr.
S.D.N.Y. Case No. 08-15051). Judge Robert E. Gerber handles the
case. Stephen J. Shimshak, Esq., at Paul, Weiss, Rifkind, Wharton
& Garrison LLP, has been retained as counsel. The Debtor listed
assets between $100 million and $500 million, and debts between
$10 million and $50 million in its filing.
Wachovia Bank National Association, Sheila M. Gowan as trustee for
Chapter 11 estate of Dreier LLP, and Steven J. Reisman as post-
confirmation representative of the bankruptcy estate of
360networks (USA) Inc. signed a petition that sent Mr. Dreier to
bankruptcy under Chapter 7 on January 26, 2009 (Bankr. S.D. N.Y.,
Case No. 09-10371).
ELECTRICAL COMPONENTS: Has Final Financing Approval
---------------------------------------------------
Bill Rochelle at Bloomberg News reports that Electrical Components
International Inc. received final approval of loans that will
provide funding until May 11 when the bankruptcy court will hold a
confirmation hearing for approval of the prepackaged
reorganization plan.
A group of lenders led by UBS AG, Stamford Branch, as admin. and
collateral agent, is providing a delayed draw term loan facility
in aggregate principal amount of up to $25 million. The DIP
facility will mature six months from the Petition Date.
At the Debtors' option, loans will bear interest based on the Base
Rate or, so long as no event of default has occurred and is
continuing, the London Interbank Offered Rate (LIBOR):
(i) Interest calculated using the Base Rate option will be at
the Base Rate plus the applicable Interest Margin per
annum, calculated on the basis of the actual number of
days elapsed in a year of 365 days and payable monthly in
arrears. The Base Rate is defined as the higher of the
Federal Funds Rate, as published by the Federal Reserve
Bank of New York, plus 1/2 of 1% and the prime commercial
lending rate of UBS AG, as established from time to time
at its Stamford Branch. There is a Base Rate floor of
3.0% per annum.
(ii) Interest calculated at the LIBOR Rte option will be
determined for periods to be selected by the Debtors of
one, two or three months and will be at an annual rate
equal to LIBOR for the corresponding deposits of U.S.
dollars, plus the applicable Interest Margin. LIBOR will
be determined by the postpetition agent at the start of
each interest period and will be fixed through the
period. Interest will be paid at the end of each
Interest Period and will be calculated on the basis of
the actual number of days elapsed in a year of 360 days.
LIBOR will be adjusted for maximum statutory reserve
requirements (if any). There is a LIBOR floor of 2.0%
per annum.
In the event of default, interest will accrue (i) on unpaid
principal or interest on a any loan, at a rate of 2.0% per annum
plus the rate otherwise applicable to the loan and (ii) in the
case of any other unpaid amount, at a rate of 2.0% per annum plus
the non-default interest rate then applicable to Base Rate loans
under the financing. Default interest will be payable on demand.
The DIP lien is subject to a carveout for U.S. Trustee and Clerk
of Court fees; and up to $1,000,000 in fees payable to
professional employed in the Debtors' case and the committee in
pursuing actions challenging the DIP Lenders' lien.
The Debtors are required to pay a host of fees to the Postpetition
Agent including a commitment fee equal to 1.00% per annum on the
average daily unused amount of each DIP commitment of the
postpetition lender during the period from and including the date
of the entry of the interim order but excluding the date on which
the DIP commitment terminates.
The Debtor will pay the Postpetition Agent an exit fee equal to
1.50% of the original aggregate DIP commitments of all of the
postpetition lenders in respect of the DIP Loans, for the account
of the lenders, due and payable on the Maturity Date. The Exit
Fee is equal to 1.50% of $25,000,000.
The Debtor will also pay the Postpetition Agent an arrangement
fee, an agency fee and an upfront fee payable in the amounts and
at times separately agreed upon between the Debtors and the
Postpetition Agent.
The Agent and the lenders will receive (i) a super-priority
administrative expense claim with priority over any and all
administrative expenses and any and all other claims of any kind,
and (ii) a first priority priming lien on and security interest in
all of the right, title and interest of the postpetition loan
parties in, to and under the pledged collateral. The Debtors will
also use the Cash Collateral to provide additional liquidity.
In exchange for using cash collateral, the Debtors will grant
prepetition first lien secured parties in the prepetition first
lien collateral, replacement liens upon all the DIP collateral
subject and subordinate only to the DIP Liens, the Carve-Out and
the prepetition senior liens on all DIP Collateral. As additional
adequate protection, the prepetition first lien secured parties
will be entitled to allowed administrative priority claims for any
diminution in value of the prepetition first lien collateral from
and after the Commencement Date. The Debtors will, upon entry of
the interim order, on a calendar monthly basis promptly pay in
cash all accrued but unpaid reasonable costs and expenses of the
prepetition first lien agent.
The Debtors, in exchange for using cash collateral, will grant
prepetition second lien secured parties replacement liens, subject
and subordinate to the DIP liens, the first priority prepetition
liens, the first lien adequate protection liens, the Carve-Out and
the prepetition senior liens, on all DIP Collateral. As
additional adequate protection to the prepetition second lien
secured parties, the second lien secured parties will be entitled
to allowed administrative expense priority claims. The Debtors
will also promptly pay in cash all accrued but unpaid reasonable
costs and expenses of the prepetition second lien agent.
About Electrical Components
St. Louis, Missouri-based Electrical Components International,
Inc. -- aka Whitehouse Acquisition Co.; Electrical Components
International DE Holdings Co.; Wirekraft Employment Co.; Wire
Harness Contractors, Inc.; Wire Harness Automotive, Inc.; Wire
Harness Industries Inc.; and Wirekraft LLC -- designs,
manufactures and markets wire harnesses and provides assembly
services primarily for major white goods appliance manufacturers.
The Company filed for Chapter 11 bankruptcy protection on
March 30, 2010 (Bankr. D. Del. Case No. 10-11054). Stephen
Youngman, Esq., at Weil, Gotshal & Manges LLP, assists the Company
in its restructuring effort. Chun I. Jang, Esq., Paul N. Health,
Esq., and Travis A. McRoberts, Esq., at Richards, Layton & Finger,
P.A., are the Company's co-counsel.
Epiq Bankruptcy Solutions is the Company's claims agent.
In its petition, the Company estimated its assets and debts at
$100,000,001 to $500 million.
These affiliates of the Company filed separate Chapter 11
petitions:
-- ECM Holding Company (Case No. 10-11055), with estimated
assets and debts at $100 million to $500 million;
-- FP-ECI Holdings Company (Case No. 10-11056); and
-- Noma O.P., Inc. (Case No. 10-11057).
EMERALD DEVELOPMENT: Case Summary & Unsecured Creditor
------------------------------------------------------
Debtor: Emerald Development & Investment, LLC
14552 Goldenwest Street
Westminster, CA 92683
Bankruptcy Case No.: 10-15481
Chapter 11 Petition Date: April 27, 2010
Court: U.S. Bankruptcy Court
Central District of California (Santa Ana)
Judge: Robert N. Kwan
Debtor's Counsel: Phu D. Nguyen, Esq.
10517 Garden Grove Boulevard
Garden Grove, CA 92843
Tel: (714) 590-1700
Fax: (714) 580-7868
E-mail: vickie@usaluatsu.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
According to the schedules, the Company says that assets total
$3,500,000 while debts total $2,500,000.
The petition was signed by Tony Quach, manager.
The list of the Company's largest unsecured creditors contains
only one entry:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Cathay Bank -- $2,500,000
Corporate Lending
20195 Stevens Creek Boulevard
Cupertino, CA 95014
EMMIS COMMUNICATIONS: CEO to Purchase All Class A Shares
--------------------------------------------------------
JS Acquisition, Inc. -- an entity formed by Jeffrey Smulyan, the
Chief Executive Officer, President and Chairman of the Board of
Directors of Emmis Communications Corporation -- and Alden Global
Capital have entered into a Letter of Intent pursuant to which JS
Acquisition intends to purchase all shares of Class A common stock
of Emmis -- excluding shares owned by JS Acquisition, Mr. Smulyan
and his affiliates -- at a price per share of $2.40.
The consideration offered for Emmis' Class A common stock
represents a 74% premium over the 30-trading day average closing
price of the Class A Common Stock and a 118% premium over the 180-
trading day average closing price of the Class A Common Stock.
Alden Global Capital is a private asset management company with
more than $3 billion under management.
The Letter of Intent also contemplates an offer to exchange all of
the outstanding shares of preferred stock of Emmis for newly-
issued 12% senior subordinated notes due 2017 of Emmis with an
aggregate principal amount equal to 60% of the aggregate
liquidation preference (excluding accrued and unpaid dividends) of
the Preferred Stock. The consideration offered for the Preferred
Stock represents a 73% premium over the 30-trading day average
closing price of the Preferred Stock and a 133% premium over the
180-trading day average closing price of the Preferred Stock. The
exchange offer is expected to be exempt from registration under
the Securities Act of 1933 pursuant to Section 3(a)(9). In
connection with the exchange offer, exchanging holders will be
required to consent to (i) eliminate Section 11 of Exhibit A to
Emmis' Articles of Incorporation (providing for a Going Private
Redemption), (ii) provide for the automatic conversion of the
Preferred Stock upon a merger into that amount of consideration
that would be paid to holders of shares of the Class A Common
Stock into which the Preferred Stock was convertible immediately
prior to the merger, and (iii) eliminate the right of the holders
of the Preferred Stock to nominate directors to Emmis' board of
directors.
Alden, which currently holds 42% of the Preferred Stock, has
agreed to consent to such amendments and exchange its Preferred
Stock for Debt. Alden owns 1,162,737 shares of ECC 6.25% Series A
Cumulative Convertible Preferred Stock, par value $0.01 per share
and has a direct or indirect economic interest (excluding its
shares of Preferred Stock) in approximately 10.4% of ECC's
outstanding Class A Common Stock, par value $0.01 per share.
Upon completion of the Transactions, Mr. Smulyan will hold
substantially all of a new class of voting common stock of Emmis
and Mr. Smulyan and his affiliates will hold all of the
outstanding common stock of JS Acquisition. JS Acquisition will
own all of a new class of non-voting common stock of Emmis that
will represent substantially all of the outstanding equity value
of Emmis. Alden has agreed to purchase $80 million principal
amount of Series A Convertible Redeemable PIK Preferred Stock of
JS Acquisition and will receive nominally-priced warrants in
connection therewith.
The completion of the Transactions is subject to certain
conditions including (i) receipt of all required stockholder
approval of the Transactions, (ii) the exchange of 66-2/3% of the
Preferred Stock, (iii) the completion and effectiveness of the
amendments to the terms of the Preferred Stock, (iv) the
satisfaction of applicable regulatory requirements, (v) the Emmis
board of directors waiving certain provisions of the Indiana
Business Corporations Law and agreeing to submit any required
merger directly to the Emmis stockholders for approval without the
Board's recommendation of the merger, (vi) the execution of
definitive documentation, (vii) simultaneous completion of all
parts of the Transactions and (vii) other customary conditions.
Moelis & Company is acting as financial advisor to JS Acquisition
and Paul, Weiss, Rifkind, Wharton & Garrison LLP is acting as
legal counsel to JS Acquisition. Alden is represented by Skadden,
Arps, Slate, Meagher & Flom LLP.
A full-text copy of the parties' Letter of Intent is available at
no charge at http://ResearchArchives.com/t/s?60f3
A full-text copy of Mr. Smulyan's Schedule 13D/A filing is
available at no charge at http://ResearchArchives.com/t/s?60f4
A full-text copy of Alden's Schedule 13D/A filing is available at
no charge at http://ResearchArchives.com/t/s?60f5
About Emmis Communications
Headquartered in Indianapolis, Indiana, Emmis Communications
Corporation owns and operates radio stations and magazine
publications in the U.S. and in Europe.
As of November 30, 2009, the Company had total assets of
$513,406,000 against total liabilities of $497,070,000 and Series
A Cumulative Convertible Preferred Stock of $140,459,000,
resulting in shareholders' deficit of $173,894,000. As of
November 30, 2009, the Company had non-controlling interests of
$49,771,000 and total deficit of $124,123,000.
* * *
As reported by the Troubled Company Reporter on June 22, 2009,
Moody's Investors Service changed Emmis Communications' senior
secured term loan rating to Caa2 from Ca following the completion
of a series of Dutch auction transactions pursuant to a March 3,
2009 credit facility amendment. The revised rating reflects the
Company's capital structure, pro-forma for an roughly
$78 million reduction of term loan debt which has resulted from
these transactions. In addition, Moody's removed the "/LD"
designation previously appended to the Probability of Default
rating on April 27, 2009.
In April 2009, Moody's cut its corporate family rating on the
Company to 'Caa2'.
In May 2009, S&P raised its corporate credit rating on the Company
to 'CCC+'. In June, S&P withdrew the 'CCC+' Corp. Credit Rating
at the Company's request.
EMPIRE RESORTS: Declared in Default of $65MM in 5-1/2% Notes
------------------------------------------------------------
Empire Resorts, Inc., on April 8, 2010, received the Decision,
Order and Judgment from the Supreme Court of the State of New York
in Sullivan County granting defendants', The Bank of New York
Mellon Corporation and The Depository Trust Company, motion for
summary judgment in the action captioned Empire Resorts, Inc. v.
The Bank of New York Mellon Corporation and The Depository Trust
Company. The Decision provides that the Court has determined that
the Defendants properly exercised the option requiring the Company
to repurchase $65 million of 5-1/2% senior convertible notes
issued by the Company in July 2004, that the Company is in default
under the Notes with respect to its failure to repurchase the
Notes on July 31, 2009, and that the Company must now repurchase
the Notes. The Company is working with its financial advisor,
Merrill Lynch, Pierce, Fenner & Smith Incorporated, and its legal
counsel to consider its available financial and legal alternatives
in response to the Decision.
About Empire Resorts
Based in Monticello, New York, Empire Resorts, Inc. (NASDAQ: NYNY)
-- http://www.empireresorts.com/-- currently owns and operates
Monticello Casino & Raceway, a video gaming machine and harness
racing track and casino located in Monticello, New York, 90 miles
northwest of New York City.
The Company's balance sheet as of December 31, 2009, showed $89.4
million in assets, $73.9 million of debts, and $15.5 million of
stockholders' equity.
Auditor Friedman LLP, in New York, said Empire Resorts' ability to
continue as a going concern depends on the Company's ability to
fulfill its obligations with respect to its $65 million of 5-1/2%
senior convertible notes. Friedman also noted of the Company's
continuing net losses and negative cash flows from operating
activities.
ERICKSON RETIREMENT: Court OKs Release of 2 PNC Letters of Credit
-----------------------------------------------------------------
Before the Petition Date, Erickson Retirement Communities LLC and
its units owned a parcel of property located in the Township of
Warminster referred to as Warminster Campus. The Debtors and the
Township entered into an agreement relating to infrastructure
improvements made by the Debtors on the Property. Pursuant to
the Agreement, the Debtors obtained two letters of credit -- an
Irrevocable Standby Letter of Credit for $115,007 and an
Irrevocable Standby Letter of Credit for $550,000 -- from PNC
Bank, National Association, naming the Township as beneficiary.
Upon the Debtors' completion of certain conditions precedent set
forth under the Agreement, the Township agreed to release the
Letters of Credit to the Debtors.
Vincent P. Slusher, Esq., at DLA Piper LLP, in Dallas, Texas --
vince.slusher@dlapiper.com -- tells the Court that the Debtors
have completed, or the Township has otherwise waived, all of the
conditions precedent to the release of the Letters of Credit.
The Debtors are thus entitled to the Township's release of the
Letters of Credit to them. He discloses that the Township has
agreed to release the Letters of Credit upon entry of an order by
the Court authorizing the release.
The Debtors, accordingly, sought and obtained permission for the
Township's release of the Letters of Credit to them.
About Erickson Retirement
The Baltimore, Maryland-based Erickson Retirement Communities LLC
owns 20 continuing care retirement communities in 11 states.
Among Erickson's 20 communities, eight are completed, 11 are open
although in construction, and one is in development. They have
23,000 residents in total.
Erickson, along with affiliates, filed for Chapter 11 on Oct. 19,
2009 (Bankr. N.D. Tex. Case No. 09-37010). DLA Piper LLP (US)
serves as counsel to the Debtors. BMC Group Inc. serves as claims
and notice agent. Houlihan, Lokey, Howard & Zoukin, Inc., is also
serving as investment and financial consultant. Alvarez & Marsal
is serving as restructuring adviser.
As of September 30, 2009, on a book value basis, ERC had
approximately $2.7 billion in assets, including $2.2 billion of
property and equipment, and $3.0 billion in liabilities.
Liabilities include $195.8 million on the revolving credit,
$347.5 million on construction credit, $64 million in accounts
payable, $47.8 million in subordinate debt, and $475 million in
purchase option deposits.
Bankruptcy Creditors' Service, Inc., publishes Erickson Retirement
Bankruptcy News. The newsletter tracks the Chapter 11 proceedings
of Erickson Retirement Communities LLC and its debtor-affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
ERICKSON RETIREMENT: Westchester Wants to Compel Removal of Bond
----------------------------------------------------------------
Westchester Fire Insurance Company, a member of the ACE Group of
Companies issued Construction Performance Bond No. K07621899,
naming Debtor Concord Campus, L.P., care of Erickson Retirement
Communities, LLC, as principal, and Concord Township,
Pennsylvania, as the obligee.
The Bond relates to the construction of a retirement community
campus in the Concord Township.
As previously reported, the ACE Group objected to the purported
assumption and assignment of the Bond under the Fourth Amended
Joint Plan of Reorganization. To resolve ACE's objection, the
Debtors agreed to remove the Bond from the list of contracts to
be assumed under the Plan, Sidney H. Scheinberg, Esq., at Glast,
Phillips & Murray PC, in Dallas, Texas -- sid@gpm-law.com --
relates. The Debtors also stated on the record at the April 15,
2010 confirmation hearing that they agreed to remove the Bond
from the Contract Assumption List.
However, despite the agreement and representation of the Debtors
before the Court, the Third Amended Contract Assumption List
dated April 15, 2010, still lists the Bond, Mr. Scheinberg points
out.
Mr. Scheinberg discloses that the ACE Group asked the Debtors to
file a corrected Contract Assumption List, removing the ACE Bond.
The Debtors, however, failed to respond. To this, the ACE Group
again asked the Debtors to file a revised Contract Assumption
List and advised the Debtors that it intends to file a motion to
compel the Debtors to remove the Bond. In response, the Debtors'
counsel stated that the matter will be addressed, but failed to
respond when the Debtors intend to address the matter, according
to Mr. Scheinberg.
For these reasons, Westchester asks the Court to compel the
Debtors to remove the Bond from the Contract Assumption List.
Westchester further asks the Court to award it attorney's fees and
costs incurred in the pursuit of its Motion to Compel.
About Erickson Retirement
The Baltimore, Maryland-based Erickson Retirement Communities LLC
owns 20 continuing care retirement communities in 11 states.
Among Erickson's 20 communities, eight are completed, 11 are open
although in construction, and one is in development. They have
23,000 residents in total.
Erickson, along with affiliates, filed for Chapter 11 on Oct. 19,
2009 (Bankr. N.D. Tex. Case No. 09-37010). DLA Piper LLP (US)
serves as counsel to the Debtors. BMC Group Inc. serves as claims
and notice agent. Houlihan, Lokey, Howard & Zoukin, Inc., is also
serving as investment and financial consultant. Alvarez & Marsal
is serving as restructuring adviser.
As of September 30, 2009, on a book value basis, ERC had
approximately $2.7 billion in assets, including $2.2 billion of
property and equipment, and $3.0 billion in liabilities.
Liabilities include $195.8 million on the revolving credit,
$347.5 million on construction credit, $64 million in accounts
payable, $47.8 million in subordinate debt, and $475 million in
purchase option deposits.
Bankruptcy Creditors' Service, Inc., publishes Erickson Retirement
Bankruptcy News. The newsletter tracks the Chapter 11 proceedings
of Erickson Retirement Communities LLC and its debtor-affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
ESCADA AG: US Unit Offering Up to 8% to Unsecured Creditors
-----------------------------------------------------------
Escada USA, now known as EUSA Liquidating Inc. following the sale
of its business in January, is promising unsecured creditors owed
a total of $370 million 3% to 8% recovery on their claims,
according to the disclosure statement explaining the Debtors' plan
of reorganization. Tax claims of $2.9 million will be paid in
full. A hearing on the disclosure statement was scheduled for
April 29.
About Escada AG
The ESCADA Group -- http://www.escada.com/-- is an international
fashion group for women's apparel and accessories, which is active
on the international luxury goods market. It has pursued a course
of steady expansion since its founding in 1976 by Margaretha and
Wolfgang Ley and today has 182 own shops and 225 franchise
shops/corners in more than 60 countries.
As of August 10, 2009, the Escada Group operated 176 owned stores
and so-called shop in shops, of which 26 owned stores are located
in the United States and operated by Escada (USA) Inc. and 2
stores are planned to be opened in the United States before year
end. Escada Group products are also sold in 163 stores worldwide
which are operated by franchisees. Escada Group had total assets
of EUR322.2 million against total liabilities of EUR338.9 million
as of April 30, 2009.
Wholly owned subsidiary Escada (USA) Inc. filed for Chapter 11 on
August 14, 2009 (Bankr. S.D.N.Y. Case No. 09-15008). Judge Stuart
M. Bernstein handles the case. O'Melveny & Myers LLP has been
tapped as bankruptcy counsel. Kurtzman Carson Consultants serves
as claims and notice agent. Escada US listed US$50 million to
US$100 million in assets and US$100 million to US$500 million in
debts in its petition.
Bankruptcy Creditors' Service, Inc., publishes Escada USA
Bankruptcy News. The newsletter tracks the Chapter 11 proceedings
of Escada USA, and the insolvency proceedings of ESCADA AG and its
units. (http://bankrupt.com/newsstand/or 215/945-7000)
EXTENDED STAY: Challenge Deadline Moved Until Examiner Report
-------------------------------------------------------------
The Bankruptcy Court signed a consent order, modifying the
Official Committee of Unsecured Creditors for Extended Stay's
"challenge period" by which it can bring or pursue challenges to
the validity, priority or perfection of liens of lenders related
to the Debtors' prepetition mortgage loan.
The Committee's Challenge Period is modified under the July 23,
2009 Final Cash Collateral Use Order and under the September 24,
2009 Bankruptcy Examiner Order in the Debtors' cases.
The Examiner Order is thus modified, whereby the phrase "thirty
(30) days from the filing of the report by the examiner with the
Court" was omitted and replaced by this phrase "thirty (30) days
after the date that the examiner's report is made available to
Committee counsel," the Court clarified.
Accordingly, the Court rules that the Committee has until 30 days
after the date the Examiner Report is made available to the
Committee counsel to bring or pursue any challenge to the liens
and security interests of the Mortgage Loan parties.
About Extended Stay
Extended Stay is the largest owner and operator of mid-price
extended stay hotels in the United States, holding one of the most
geographically diverse portfolios in the lodging sector with
properties located across 44 states (including 11 hotels located
in New York) and two provinces in Canada. As a result of
acquisitions and mergers, Extended Stay's portfolio has expanded
to encompass over 680 properties, consisting of hotels directly
owned or leased by Extended Stay or one of its affiliates.
Extended Stay currently operates five hotel brands: (i) Crossland
Economy Studios, (ii) Extended Stay America, (iii) Extended Stay
Deluxe, (iv) Homestead Studio Suites, and (v) StudioPLUS Deluxe
Studios.
Extended Stay Inc. and its affiliates filed for Chapter 11 on
June 15, 2009 (Bankr. S.D.N.Y. Case No. 09-13764). Judge James M.
Peck handles the case. Marcia L. Goldstein, Esq., at Weil Gotshal
& Manges LLP, in New York, represents the Debtors. Lazard Freres
& Co. LLC is the Debtors' financial advisors. Kurtzman Carson
Consultants LLC is the claims agent. Extended Stay had assets of
$7.1 billion and debts of $7.6 billion as of the end of 2008.
Bankruptcy Creditors' Service, Inc., publishes Extended Stay
Bankruptcy News. The newsletter provides gavel-to-gavel coverage
of the Chapter 11 proceedings undertaken by Extended Stay Inc. and
its various affiliates. (http://bankrupt.com/newsstand/or
215/945-7000).
EXTENDED STAY: Committee Wants Jefferies to Solicit Plan Proposal
-----------------------------------------------------------------
The Official Committee of Unsecured Creditors in Extended Stay
Inc.'s cases previously filed a cross-motion that would allow its
financial adviser, Jefferies and Company, Inc., to solicit
alternative plan proposals using the Debtors' confidential
information that will be protected by confidentiality agreements.
The request was originally scheduled for hearing on April 8,
2010. The hearing has been adjourned to April 22, 2010.
Subsequently, the Debtors and U.S. Bank National Association, as
successor trustee, filed formal objections to the request.
The Debtors refute the Committee's contention that they have
failed to exercise their fiduciary duties in a manner that will
maximize value for all creditors.
The Debtors insist that their professionals have engaged and will
continue to engage in a vigorous marketing process, and have
ensured that any offers are subject to higher or better offers.
In fact, the Debtors have received three competitive and
committed offers from two separate groups of investors led by
Centerbridge Partners, L.P and Starwood ESH, LLC, Jacqueline
Marcus, Esq., at Weil, Gotshal & Manges LLP, in New York, points
out.
Ms. Marcus adds that the Debtors have finalized bidding
procedures that will govern a formalized competitive process to
solicit additional proposals for the sponsorship and funding of a
plan of reorganization for certain of the Debtors. Among others,
the current draft of the Bidding Procedures provides that all
interested parties must submit a binding and committed proposal
by May 17, 2010, along with a $150 million good faith deposit.
The Debtors will be seeking formal Court approval of the Bidding
Procedures.
Against this backdrop, there is no reason for the Committee to
pursue its Cross-Motion, Ms. Marcus says. The Debtors thus ask
the Court to deny the Committee's Cross-Motion.
Granting the Cross-Motion would only allow the Committee to
duplicate efforts already expended by the Debtors' professionals
and may stall the Debtors' restructuring process, Ms. Marcus
says. The Committee's professional fees in carrying out such
duplicative tasks would also pose an additional burden on the
Debtors' estates, she avers.
For its part, U.S. Bank says it shares the Committee's
frustration with the lack of transparency and inclusiveness in
the process the Debtors and their financial advisor, Lazard
Freres & Co., are using in seeking out an investor or investors
in relation to their bankruptcy plan. U.S. Bank asserts that it
must be included in negotiations related to the Debtors'
reorganization.
However, U.S. Bank believes that until the Debtors' Exclusivity
Periods expire, it is premature to have Jefferies actively
solicit investors to fund an alternative bankruptcy plan. Thus,
U.S. Bank objects to the Cross-Motion.
U.S. Bank is successor in interest to Wells Fargo Bank, N.A., as
successor trustee in trust for holders of Wachovia Bank
Commercial Mortgage Trust Commercial Mortgage Pass-Through
Certificates, Series 2007-ESH. U.S. Bank insists that it is by
far the Debtors' largest creditor, holding a $4.1 billion claim,
in relation to a Mortgage Debt the Debtors acquired in June 2007.
Committee Talks Back
The Creditors Committee acknowledges that the Debtors filed a Bid
Procedures Motion for an auction-based sale of substantially all
of their business assets on April 15, 2010. The Committee
believes that this development represents a major step in the
right direction. Consequently, the Committee withdraws that
portion of its Cross-Motion that seeks authority for Jefferies to
run an alternate sales process.
The Committee also avers that it does not object to Lazard Freres
conducting the sales process, provided that it does so while
consulting with and obtaining input from the Committee and U.S.
Bank.
Despite these developments however, the Committee says it
continues to have serious concerns on the ability of the Debtors'
professionals to act independently. No independent directors are
serving on the boards of the two-parent Debtor entities: Extended
Stay Inc. and Homestead Village L.C.C., Mark T. Power, Esq., at
Hahn & Hessen LLP, in New York, -- mpower@hahnhessen.com --
relates. He says the Boards are, in reality, dominated by David
Lichtenstein and his appointments. "The Boards have direct
conflicts of interest with the Debtors' estates and creditors."
The Committee also points to other inherent problems in the
Debtors' sale process -- (i) a non-transparent sale process that
continues to exclude major stakeholders from negotiations on the
plan terms; (ii) bidding procedures that will chill the bidding;
and (iii) a plan under the appearance of being supported by a
third-party, plan sponsor that will favor insiders --
particularly Mr. Lichtenstein -- at the expense of the Debtors'
creditors.
Therefore, the Committee proposes to modify its request under the
Cross-Motion by seeking that, instead of the Committee, the Court
expand the powers of the existing Bankruptcy Examiner to fulfill
the important and necessary role as acting as an independent
fiduciary to oversee the sales process.
The Committee asserts that the Examiner is the ideal, and only
other truly independent, fiduciary as it is already familiar with
the Debtors and other major stakeholders in the Debtors' cases.
Committee's Modified Request is Improper,
Debtors Insist
By substantially modifying the relief requested in the Cross-
Motion, the Committee has essentially filed a new motion upon a
mere two-days' notice and without obtaining an order from the
Court shortening notice, the Debtors argue.
The Committee should abide by the Case Management Order in these
cases, the Local Bankruptcy Rules and the General Bankruptcy
Rules and properly notice its requested relief for hearing, the
Debtors maintain.
Accordingly, the Debtors reserve all their rights to respond to
the relief requested at a later date if the Committee file an
appropriate motion under the Bankruptcy Rules.
About Extended Stay
Extended Stay is the largest owner and operator of mid-price
extended stay hotels in the United States, holding one of the most
geographically diverse portfolios in the lodging sector with
properties located across 44 states (including 11 hotels located
in New York) and two provinces in Canada. As a result of
acquisitions and mergers, Extended Stay's portfolio has expanded
to encompass over 680 properties, consisting of hotels directly
owned or leased by Extended Stay or one of its affiliates.
Extended Stay currently operates five hotel brands: (i) Crossland
Economy Studios, (ii) Extended Stay America, (iii) Extended Stay
Deluxe, (iv) Homestead Studio Suites, and (v) StudioPLUS Deluxe
Studios.
Extended Stay Inc. and its affiliates filed for Chapter 11 on
June 15, 2009 (Bankr. S.D.N.Y. Case No. 09-13764). Judge James M.
Peck handles the case. Marcia L. Goldstein, Esq., at Weil Gotshal
& Manges LLP, in New York, represents the Debtors. Lazard Freres
& Co. LLC is the Debtors' financial advisors. Kurtzman Carson
Consultants LLC is the claims agent. Extended Stay had assets of
$7.1 billion and debts of $7.6 billion as of the end of 2008.
Bankruptcy Creditors' Service, Inc., publishes Extended Stay
Bankruptcy News. The newsletter provides gavel-to-gavel coverage
of the Chapter 11 proceedings undertaken by Extended Stay Inc. and
its various affiliates. (http://bankrupt.com/newsstand/or
215/945-7000).
EXTENDED STAY: Weil Gotshal Bills $2.7 Million for Nov.-Feb.
------------------------------------------------------------
Five professionals retained in the Chapter 11 cases of Extended
Stay Inc. and its affiliated debtors filed fee applications,
seeking interim allowance of fees for services rendered and
reimbursement of expenses incurred for these periods:
Professional Fee Period Fees Expenses
------------ ---------- ---------- --------
Covington & Burling LLP 11/01/09 to $29,751 $13,410
02/28/10
Ernst & Young LLP 11/01/09 to $383,654 $2,630
02/28/10
Lazard Freres & Co. LLC 10/01/09 to $800,000 $26,016
01/31/10
PKF Consulting 08/18/09 to $104,747 $11,092
02/28/10
Weil Gotshal & Manges LLP 11/01/09 to $2,705,232 $60,611
02/28/10
Three other professionals retained by the Official Committee of
Unsecured Creditors also filed their fee applications. They are:
Professional Fee Period Fees Expenses
------------ ---------- ---------- --------
Hahn & Hessen LLP 11/01/09 to $620,463 $10,403
02/28/10
Jefferies & Company Inc. 11/01/09 to $750,000 $22,870
02/28/10
Jones Lang LaSalle Hotels 08/10/09 to $282,080 $14,080
02/28/10
The Creditors Committee also seeks reimbursement of $2,053 for
the expenses incurred by its member, KeyBank National
Association, and reimbursement of $1,768 for the expenses
incurred by Foley & Lardner LLP from attending the meeting held
on March 17, 2010.
One professional retained by Ralph Mabey, the Court-appointed
examiner, filed its fee application for the period November 1,
2009 to February 28, 2010:
Professional Fee Period Fees Expenses
------------ ---------- ---------- --------
Alvarez & Marsal Dispute 11/01/09 to $1,581,063 $55,195
Analysis & Forensic 02/28/10
Services, LLC
Mr. Mabey also seeks interim allowance of fees, totaling
$101,902, and reimbursement of expenses, totaling $11,478, for
the period November 1, 2009 to February 28, 2010.
About Extended Stay
Extended Stay is the largest owner and operator of mid-price
extended stay hotels in the United States, holding one of the most
geographically diverse portfolios in the lodging sector with
properties located across 44 states (including 11 hotels located
in New York) and two provinces in Canada. As a result of
acquisitions and mergers, Extended Stay's portfolio has expanded
to encompass over 680 properties, consisting of hotels directly
owned or leased by Extended Stay or one of its affiliates.
Extended Stay currently operates five hotel brands: (i) Crossland
Economy Studios, (ii) Extended Stay America, (iii) Extended Stay
Deluxe, (iv) Homestead Studio Suites, and (v) StudioPLUS Deluxe
Studios.
Extended Stay Inc. and its affiliates filed for Chapter 11 on
June 15, 2009 (Bankr. S.D.N.Y. Case No. 09-13764). Judge James M.
Peck handles the case. Marcia L. Goldstein, Esq., at Weil Gotshal
& Manges LLP, in New York, represents the Debtors. Lazard Freres
& Co. LLC is the Debtors' financial advisors. Kurtzman Carson
Consultants LLC is the claims agent. Extended Stay had assets of
$7.1 billion and debts of $7.6 billion as of the end of 2008.
Bankruptcy Creditors' Service, Inc., publishes Extended Stay
Bankruptcy News. The newsletter provides gavel-to-gavel coverage
of the Chapter 11 proceedings undertaken by Extended Stay Inc. and
its various affiliates. (http://bankrupt.com/newsstand/or
215/945-7000).
FAIRFAX FINANCIAL: Zenith Stockholders OK Sale to Fairfax
---------------------------------------------------------
Zenith National Insurance Corp.'s its stockholders voted
overwhelmingly in favor of the company's acquisition by Fairfax
Financial Holdings Limited.
At a special meeting of stockholders held today at Zenith's
headquarters in Woodland Hills, California, the required majority
of outstanding shares were voted to adopt the merger agreement and
approve the merger. Based on information provided by
Computershare, the company's inspector of elections for the
special meeting, of the shares voted, 98.94% were voted in favor
of the transaction, representing 76% of the outstanding shares.
Pursuant to the merger agreement, subject to approval by the
California Department of Insurance and the satisfaction or waiver
of other customary closing conditions, an indirect wholly-owned
subsidiary of Fairfax will merge with and into the company, with
the company continuing as the surviving company and an indirect
wholly-owned subsidiary of Fairfax. In the merger, each share of
the company then outstanding (other than shares with respect to
which appraisal rights have properly been exercised) will be
cancelled and automatically convert into the right to receive
$38.00 in cash, without interest and less any required withholding
tax.
The merger is expected to close in the second quarter of 2010.
About Zenith
Zenith National Insurance Corp., a Delaware corporation
incorporated in 1971, is a holding company engaged, through its
wholly-owned subsidiaries, Zenith Insurance Company and ZNAT
Insurance Company, in the workers' compensation insurance
business, nationally.
* * *
As reported in the Troubled Company Reporter on February 23, 2010,
Moody's Investors Service affirmed the Ba1 senior unsecured and
Ba3 preferred share ratings of Fairfax Financial Holdings
Limited's following the announcement that it intends to acquire
100% of Zenith National Insurance Corp. (Zenith; NYSE: ZNT).
Moody's maintains a positive outlook on Fairfax's holding company
debt ratings.
FIRSTGOLD CORP: Gets Final Approval for $175,000 DIP Financing
--------------------------------------------------------------
Firstgold Corp. sought and obtained final authorization from the
U.S. Bankruptcy Court for the District of Nevada to get $175,000
in postpetition secured financing through April 22, 2010.
Stephen R. Harris, Esq., at Belding, Harris & Petroni, Ltd., the
attorney for the Debtor, explained that the Debtors need the money
to fund their chapter 11 case, pay suppliers and other parties.
The Debtor sought to obtain unsecured post-petition financing of
$350,000 in the form of loan agreements, promissory notes and
secured exchangeable promissory notes (collectively, the Gold
Notes), from various undetermined lenders. The Debtor sought to
grant the DIP Lenders an administrative claims status with respect
to payment of the principal and 12% per annum interest due on each
Gold Note.
Although the Gold Notes indicate that the total proceeds to be
raised are $500,000, the Debtor raised $150,000 in cash pre-
petition under the Gold Notes, and asked for court approval to
borrow an additional sum of up to $350,000 post-petition. The
notes are styled as secured exchangeable promissory notes they
aren't secured by any collateral and are in actuality unsecured
notes. Due to immediate cash needs of the Debtor, the Debtor
already obtained an additional $100,000 advance under the Gold
Notes post-petition on February 4, 2010. The DIP Facility will
close following execution of the Gold Notes and satisfying the
terms thereof, subject to the Court's DIP Order.
The Gold Notes will incur interest at 12% per annum. The DIP
Facility will mature 12 months from issuance. The remaining
repayment terms consisting of certain gold rights issued to DIP
Lenders and the Debtor's right to call the Gold Notes and gold
rights therein by paying 4.33 times the original promissory note
amount will be exercised after all administrative, secured,
priority and unsecured creditors are paid in full.
To secure the Debtor's obligations under the DIP Facility,
obligations of the Debtor to the DIP Lenders will be entitled to
administrative expense claim status equal to all other
administrative claims.
A copy of the loan agreement is available for free at:
http://bankrupt.com/misc/FIRSTGOLD_loanpact.pdf
About Firstgold Corp
Lovelock, Nevada-based Firstgold Corp. filed for Chapter 11
bankruptcy protection on January 27, 2010 (Bankr. D. Nev. Case No.
10-50215). Stephen R. Harris, Esq., at Belding, Harris & Petroni,
Ltd, assists the Company in its restructuring effort. The Company
has assets of $17,957,805, and total debts of $26,981,427.
As reported by the TCR on April 28, 2010, Firstgold's management,
at a bankruptcy hearing held on April 20, 2010, reported its
inability to timely develop a reorganization plan to restart
business operations. In light of the foregoing, Firstgold
stipulated to allowing its primary secured lenders, Platinum Long
Term Growth, LLC, and Lakewood Group, LLC, to pursue their
contractual and state law rights and remedies to foreclose and
take possession of all collateral securing their debt obligations
with Firstgold pursuant to their security interests. The
collateral securing their debt obligations includes substantially
all of Firstgold's assets including the Relief Canyon Mine
property, all improvements to the mine property, and additional
mining properties and interests. In addition, Firstgold agreed to
relinquish possession of the collateral to allow Platinum and
Lakewood to preserve and protect such collateral as of April 21,
2010.
Firstgold will continue in a Chapter 11 status which will allow
Firstgold's management to pursue a possible reorganization of the
corporate entity with another company. The next status conference
hearing relating to the Firstgold corporate entity is set for
May 11, 2010.
FLYING J: Settles with Shell, Has Short Exclusivity
---------------------------------------------------
Bill Rochelle at Bloomberg News reports that Flying J Inc.
received from the Bankruptcy Court approval of an $8.5 million
settlement with Shell Oil Products U.S. that will cover the cost
of cleaning up a California oil refinery that Flying J sold as
part of its restructuring.
Flying J, according to the report, also received from the Court a
short extension, until May 26, of the exclusive right to propose a
Chapter 11 plan. A hearing will be held May 25 to consider a
further extension.
About Flying J
Based in Ogden, Utah, Flying J Inc. -- http://www.flyingj.com/--
is among the 20 largest private companies in America, with 2007
sales exceeding $16 billion. The fully integrated oil company
employs approximately 14,700 people in the U.S. and Canada through
its interstate operations, transportation, refining and supply,
exploration and production, as well as its financial services and
communications, divisions.
Flying J and six of its affiliates filed for bankruptcy on
December 22, 2008 (Bankr. D. Del. Lead Case No. 08-13384). Flying
J sought Chapter 11 protections after a precipitous drop in oil
prices and disruption in the credit markets brought to bear
significant short-term pressure on the company's liquidity
position.
Attorneys at Kirkland & Ellis LLP represent the Debtors as
counsel. Young, Conaway, Stargatt & Taylor LLP is the Debtors'
Delaware Counsel. Blackstone Advisory Services L.P. is the
Debtors' investment banker and financial advisor. Epiq Bankruptcy
Solutions LLC is the Debtors' notice, claims and balloting agent.
In its formal schedules submitted to the Bankruptcy Court, Flying
J listed assets of $1,433,724,226 and debts of $640,958,656.
An official committee of unsecured creditors has been appointed in
the case. Pachulski Stang Ziehl & Jones LLP has been tapped as
counsel for the creditors' panel.
FORD MOTOR: S&P Changes Outlook to Positive; Affirms 'B-' Rating
----------------------------------------------------------------
Standard & Poor's Ratings Services said it has revised its outlook
on Ford Motor Co. and related entities to positive from stable and
affirmed its ratings on these entities, including the 'B-'
corporate credit rating on Ford and Ford Motor Credit Co. LLC and
the 'B' rating on FCE Bank PLC. The outlook revision follows
Ford's announcement of profitable first-quarter results, including
an 8.9% pretax margin in its North American automotive operations.
"S&P believes the company's prospects for sustained profitability
in its global automotive operations in 2010 have improved since
S&P's previous assumptions, even if margins do not remain at their
current levels," said Standard & Poor's credit analyst Robert
Schulz. The automaker also reported $200 million in automotive
operating-related cash flow for the quarter, excluding the effect
of upfront subvention payments to Ford Credit. S&P assumes the
company will be modestly cash flow positive in automotive
operations in 2010.
The ratings reflect, among other factors, Ford's substantial
liquidity and better-than-expected results in the last few
quarters of 2009, including a return to some positive free
operating cash flow in its global automotive operations and
ongoing signs of the market's improved perception of Ford's
vehicles and its efforts to broaden its lineup of smaller, more
fuel-efficient vehicles over the next few years.
S&P continue to view Ford's business risk profile as vulnerable
and its financial risk profile as highly leveraged. S&P believes
Ford is making progress in reducing its cash use from automotive
operations as it stabilizes, and perhaps improves, its U.S. market
share. Still, S&P believes fundamental business risks -- most
notably, the company's exposure to a potentially weak recovery in
vehicle demand globally -- will remain unchanged well into 2010 at
least. S&P expects Ford's financial results to remain highly
sensitive to future industry sales, actions by competitors, and
other factors such as higher raw material costs or fuel prices
that are beyond its direct control.
S&P's economists forecast U.S. light-vehicle sales of about
11.7 million units this year, up 12.5% from 2009 levels. S&P
currently expects sales to rise to 13.6 million units in 2011, but
even with this improvement, sales would still be just above the
levels of 2008 that were considered weak.
S&P's outlook for the major auto markets in Europe is less
positive than for the U.S. market. S&P expects sales in Europe to
be about 10% lower in 2010 than in 2009, in part because of a
shifting of sales caused by various government scrappage
incentives. Ford and other high-volume automakers in Europe
benefited from these incentive plans in 2009, but S&P believes the
boost to sales will end in 2010.
Ford Credit's results continue to be aided, in S&P's view, by the
industrywide strength in used-vehicle prices, which led to lower
costs related to lease residuals and reduced credit losses
compared with those of a year ago. S&P believes residual values
will remain volatile and a risk to Ford Credit's future results.
S&P believes Ford Credit's 2010 earnings will be lower than those
in 2009 because of lower accounts receivable and less nonrecurring
income.
The outlook is positive. S&P could raise the rating if, among
other things, the gradual improvement in light-vehicle sales
continues in most global markets and Ford's prospects for
generating free cash flow and profits in its automotive
manufacturing business continue to solidify. For example, S&P
could raise Ford's rating if S&P believed that its global
automotive cash generation in 2010 would be positive and improve
further in 2011 (for example, $3 billion in automotive operating
cash flow would equal approximately 10% of current unadjusted
automotive debt). Other positive rating considerations would be
if Ford can sustain its pretax automotive profit margin in North
America in the mid-single-digit percentage area or higher and
further demonstrate an ability to cope successfully with the
evolving competitive structure of the global auto industry. Such
developments could cause us to reassess Ford's business and/or
financial risk profiles, leading to an upgrade.
S&P could revise the outlook to stable if adverse competitive
developments (for example overproduction, excess inventory,
increased incentives, or unfavorable shifts in customer demand)
reduced the prospects for profitable and cash-positive results in
2010.
FREESCALE SEMICONDUCTOR: Fitch Affirms 'CCC' Issuer Default Rating
------------------------------------------------------------------
Fitch Ratings has affirmed these ratings for Freescale
Semiconductor Inc.:
-- Issuer Default Rating 'CCC';
-- Senior secured bank revolving credit facility 'CCC/RR4';
-- Senior secured notes 'CCC/RR4';
-- Senior secured term loans 'CCC/RR4';
-- Senior unsecured notes 'C/RR6';
-- senior subordinated notes 'C/RR6'.
The Rating Outlook is Postive. Fitch's actions affect
approximately $8 billion of total debt, including undrawn amounts
under the RCF.
The Positive Outlook reflects: i) Freescale's improving
intermediate-term debt maturity profile, following the company's
extension and refinancing of its senior secured term loans due in
2013 and 2014; ii) strengthening end market demand for
semiconductors, and iii) Fitch's expectations for modestly
stronger operating performance, driven by operating leverage and
restructuring. As a result, Fitch has increasing confidence in
Freescale's ability to meet substantial remaining intermediate-
term debt maturities via a combination of refinancing and
internally generated cash.
Since the end of fiscal year 2009, Freescale has extended the
maturity date of approximately $2.3 billion of consenting senior
secured term loan holders to Dec. 1, 2016. However, the amended
and extended senior secured credit agreement provides holders the
right to accelerate the maturity of the term loans if, as of
Sept. 1, 2014, more than $500 million of the approximately
$2.1 billion of senior unsecured debt due on Dec. 1, 2014, is
outstanding and total leverage exceeds 4 times. Freescale also
repaid approximately $2 billion of senior secured debt with net
proceeds from the issuance of approximately $2.3 billion of senior
secured notes due 2018.
Fitch believes Freescale's free cash flow profile, while still
constrained by substantial interest expense, will improve from a
combination of the resumption of positive revenue growth and
benefits of restructuring actions taken during the recent
downturn. Fitch believes that the significant drags on
Freescale's revenue growth over the past three years, primarily a
weak domestic automotive industry and the loss of its largest
wireless handset customer, Motorola, are behind the company.
Freescale's efforts to focus on microcontrollers and analog market
growth opportunities should yield consistent revenue growth over
the intermediate term. Fitch believes Freescale's cost reduction
initiatives, including headcount and capacity reductions, as well
as lower research and development (R&D) related to cellular
handsets, are sustainable and will drive Fitch's expected
operating margin expansion. Overall, Fitch anticipates higher
profitability will more than offset approximately $670 million of
annual maintenance capital expenditures and pro forma cash
interest expenses, assuming continued election to paid in kind
(PIK) interest payments on the $550 million 9.125% senior notes.
Fitch believes revenue growth in 2010 is likely to exceed 10% and
will be broad based across most of the company's end-markets. In
particular, Fitch anticipates the company's largest end-market,
automotive electronics, will rebound from significant declines in
2009. While Freescale remains somewhat concentrated to North
American automotive suppliers, revenue growth increasingly will be
driven by China's strong unit growth and increased penetration of
electronics in cars. Freescale's exposure to industrial markets,
which have demonstrated signs of recovery, should provide
meaningful growth as well, given longer product life cycles.
Fitch anticipates distribution revenues should grow solidly in
2010, due in part to Freescale's ongoing initiatives to increase
penetration within radio frequency, analog and sensors. Revenues
for Freescale's networking business, which represent nearly 25% of
total sales, should grow at more modest rates, given the high
dependence upon and the anticipation of flat and uneven capital
spending patterns by wireless carriers in 2010. Finally, Fitch
expects Freescale's cellular business to continue to contract over
time following its exit from the business in 2009, although the
company will continue generating sales from Research In Motion.
Positive rating action could result from operating EBITDA growth
in-line with the above drivers. Such growth over the next few
years could position the company to reduce net debt levels over
the intermediate term and establish a net leveraged capital
structure that would likely be able to extend its RCF and
refinance at least a significant portion of debt maturing in 2014.
Negative rating action could result from the company's inability
to achieve Fitch's expectations of operating leverage on cash
flows and/or another drop in end-market demand. This will make it
increasingly difficult to refinance debt maturities in 2014 and
beyond.
The ratings are supported by Freescale's: i) leading market
positions in automotive electronics and standard products;
ii) diversified end-market, product and customer base,
particularly in microcontrollers, standard products, and analog;
and iii) 'asset-light' manufacturing strategy, as well as lower
than industry-average R&D. The ratings consider Freescale's:
i) high debt levels and significant interest expense; ii) weakened
operating EBITDA, primarily related to revenue growth challenges;
and iii) limited financial flexibility.
Fitch believes Freescale's liquidity was sufficient as of Dec. 31,
2009, and consisted of approximately $1.4 billion of cash and
equivalents, and approximately $115 million of remaining
availability under the senior secured RCF due Dec. 1, 2012.
Fitch's anticipation of modestly positive free cash flow over the
next couple of years, driven by higher profitability and solid
revenue growth within the context of recovering semiconductor
markets also supports liquidity. Freescale has no debt maturities
until December 2012, aside from modest amortization under the
extended term loans.
Total debt was approximately $7.9 billion as of Dec. 31, 2009,
and, pro forma for the notes offerings, consisted of:
-- $532 million of borrowings under the senior secured revolving
credit facility due Dec. 1, 2012;
-- $2.3 billion of senior secured term loans due Dec. 1, 2016;
-- $2.1 billion of senior secured notes due 2018;
-- $2.1 billion of senior unsecured notes due 2014; and
-- $764 million of senior subordinated notes due 2016.
The Recovery Ratings for Freescale reflect Fitch's recovery
expectations under a distressed scenario, as well as Fitch's
belief that Freescale's enterprise value, and hence recovery rates
for its creditors, will be maximized as a going concern rather
than liquidation scenario. In deriving a distressed enterprise
value, Fitch applies a 50% discount to Fitch's annualized estimate
of Freescale's operating EBITDA for the fourth quarter of 2009 of
approximately $1 billion. While this distressed profitability
level falls short of covering interest expense and maintenance
capital spending, the discount is supported by trough operating
EBITDA levels for Freescale. Fitch applies a 5 times distressed
EBITDA multiple to reach a reorganization enterprise value of
approximately $2.5 billion. As is standard with Fitch's recovery
analysis, the revolver is assumed to be fully drawn and cash
balances fully depleted to reflect a stress event. After reducing
the amount available in reorganization for administrative claims
by 10%, Fitch estimates the senior secured debt would recover 31%-
50%, equating to 'RR4' recovery ratings. The senior unsecured and
senior subordinated debt tranches would recover 0%-10%, equating
to 'RR6' recovery ratings and reflecting Fitch's belief that
minimal if any value would be available for unsecured noteholders.
GARY MCLEAN: Amends List of Largest Unsecured Creditors
-------------------------------------------------------
Gary R. McLean has filed with the U.S. Bankruptcy Court for the
Western District of Washington an amended list of its 17 largest
unsecured creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
SunTrust Bank Ocean Alexander
P.O. Box 4418 2010 68' Pilothouse
Atlanta, GA 30302-4418 (60%) owner)
Location: Lake
Union Nautical $2,300,000
Landing (2,000,000
Value estimated secured)
Marie Durflinger
219 SW 298th Place
Federal Way, WA 98023-3565 Personal Loans $106,512
The Johnson Law Group
800 5th Avenue #101-140
Seattle, WA 98104 Legal Fees $57,983
Kathleen Ann McLean Claimed spousal
maintenance
arrearage; subject
to pending petition
for modification $37,650
Blaine County Treasurer Real property taxes
on Sun Valley
condominium $17,243
Kathleen Ann McLean Judgment for
Unpaid
maintenance
arrearages plus
attorney fees $11,219
120 2nd Ave Building Assoc Dues and
assessments for
Sun Valley
condominium $10,264
Hideaway Golf Club Club charges
(approximate) $10,000
Quarry Golf Club Club charges
(approximate) $10,000
Riverside County Treasurer Real property taxes
On Hideaway lot $4,371
Indiana Dept. of Revenue
Collection Division Tax Debt $4,119
King County Superior Court Judgment for
unpaid
maintenance
arrearages plus
attorney fees $100
Smyth & Mason PLLC Professional
Services
(approximate) $40,000
Tehama Golf Club Club charges
(approximate) $10,000
Terenue Ventures Maintenance fees $465
Textron Financial Corp. Contingent liability
on corporate
guaranty unknown
The Hideaway Owners Assoc Hideaway lot
monthly
assessments and
fees $2,755
Seattle, Washington-based Gary R. McLean filed for Chapter 11
bankruptcy protection on April 20, 2010 (Bankr. W.D. Wash. Case
No. 10-14407). Jeffrey L. Smoot, Esq., at Lasher Holzapfel Sperry
& Ebberson PLLC, assists the Company in its restructuring effort.
The Company estimated its assets and debts at $10,000,001 to
$50,000,000.
GARY MCLEAN: Section 341(a) Meeting Scheduled for May 26
--------------------------------------------------------
The U.S. Trustee for Region 18 will convene a meeting of Gary R
McLean's creditors on May 26, 2010, at 1:00 p.m. The meeting
will be held at the US Courthouse, Room 4107, 700 Stewart Street,
Seattle, WA 98101.
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.
Seattle, Washington-based Gary R. McLean filed for Chapter 11
bankruptcy protection on April 20, 2010 (Bankr. W.D. Wash. Case
No. 10-14407). Jeffrey L. Smoot, Esq., at Lasher Holzapfel Sperry
& Ebberson PLLC, assists the Company in its restructuring effort.
The Company estimated its assets and debts at $10,000,001 to
$50,000,000.
GENERAL GROWTH: Court Confirms Plan of 2 Las Vegas Malls
--------------------------------------------------------
General Growth Properties, Inc., disclosed that the Bankruptcy
Court has confirmed plans of reorganization to restructure the
Fashion Show LLC loan and Phase II Mall Subsidiary, LLC loan, the
final two major secured mortgage loans in its portfolio.
Confirmation of both plans means the Bankruptcy Court has now
confirmed plans of reorganization for the debtor subsidiaries
associated with 107 of the company's 108 secured mortgage loans,
aggregating a total of approximately $14.8 billion. As a result,
220 GGP debtors have now consummated their plans of reorganization
and exited Chapter 11 protection thus far.
"Today's confirmations mark yet another significant step in GGP's
effort to restructure its capital structure and create a strong
financial foundation for its emergence from bankruptcy," said
Thomas H. Nolan Jr., president and chief operating officer of GGP.
"In just one year's time from our bankruptcy filing, we have now
received approval to restructure virtually all of our secured
mortgage indebtedness after consensual negotiations with our
lenders, allowing more than 140 properties to emerge from
bankruptcy and continue on their path to growth."
The revised terms on the $645.9 million syndicated Fashion Show
Loan, which is secured by the Fashion Show Mall in Las Vegas, and
the $249.6 million Palazzo Loan, secured by Las Vegas' Shoppes at
the Palazzo, extend the maturity dates on both loans to May 5,
2017. The interest rates on both were revised to float at 300
basis points over the London Inter-Bank Offered Rate (LIBOR), 300
basis points lower than the rate being paid since the
restructuring of these two loans in November 2008.
Including these two loans, the weighted average contract interest
rate for all $14.8 billion of the confirmed loans is 5.07%, while
the all-in-interest rate after amortization of fees paid in
connection with all of these loans is 5.26%. The weighted average
duration of the loans is 6.5 years from January 1, 2010. Of the
107 loan restructurings confirmed by the court, seven are still
awaiting final closing.
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)
GLOBAL CONTAINER: Gets Court's Okay to Sell Two Vessels
-------------------------------------------------------
Global Container Lines Ltd., et al., sought and obtained
authorization from the Hon. Alan S. Trust of the U.S. Bankruptcy
Court for the Eastern District of New York for the public sale of
two vessels, the M/V Global Progress and the M/V Global
Prosperity, free and clear of liens, claims and encumbrances.
The Court has authorized the Debtors to take all steps necessary
or appropriate to carry out the sale in accordance with the
procedures set forth in the motion, a copy of which is available
for free at:
http://bankrupt.com/misc/GLOBAL_CONTAINER_salemotion.pdf
The Court also allowed the Debtors to execute and deliver all
documents necessary to effectuate the sale of the Vessels
including, but not limited to, entering into memorandum of
agreements with Sea Lion Marine Ltd (SeaLion) for the purchase of
the M/V Global Progress and Marianna Shipping Limited for the
purchase of the M/V Global Prosperity after the Public Sale. The
gross purchase price for each of the Vessels will be $4,520,886 or
$9,041,772 in the aggregate. The Purchasers will each deposit the
sum of $1,356,266.00 or 30% of the purchase price for their
respective Vessels with Debtors' counsel via wire transfer within
one business day of the execution of their respective MOAS.
The Court also approved the Debtors' request to retain Vogt and
Maguire Shipbroking Ltd. as broker for the purpose of conducting
the sale. The Debtors are authorized and directed to pay to the
Broker a commission of 1.5% from the gross proceeds of the sale at
the closing, set for April 10, 2010. The Debtors are further
authorized to pay an address commission of 3% from the gross
proceeds of the sale to the Buyer's broker at the closing.
At the Closing, the Purchasers will tender the balance of the
purchase price for each of their respective Vessels to the Debtors
or their designated agent via certified bank check or wire
transfer in immediately available funds. Also at the Closing, the
aggregate net proceeds of the Sale will be distributed:
(a) first, (i) to the Broker for its commissions in the
amount of 1.5% of the aggregate gross purchase price and
(ii) to the Purchasers Broker for its address commission
in the amount of 3.0 % of the aggregate gross purchase
price;
(b) second, to Debtors' counsel in the amount of $400,000
which sum will be held in escrow by Debtors' counsel;
(c) third, in the amount of up to $342,190 to the National
Bank of Pakistan to reimburse NBP for any sums advanced
to the Debtors to pay crew wages and related repatriation
costs necessary to consummate the Public Sale of the
Vessels and costs of providing hull and machinery
insurance to the Vessels through the Closing Dates; and
(d) fourth, the remaining balance of the Sale Proceeds to NBP
in payment of NBP's preferred ship mortgages against the
Vessels.
The Sale Proceeds distributed to NBP will be subject to later
disgorgement for the benefit of any creditor or other entity
determined to hold a valid, secured claim against the Vessels
pursuant to a maritime lien based upon applicable maritime law
that is senior to NBP's lien in the Sale Proceeds, upon a final
determination by the Court regarding the allowance or disallowance
of the claim after notice and a hearing.
About Global Container Lines Limited
Garden City, New York-based Global Container Lines Limited filed
for Chapter 11 bankruptcy protection on November 10, 2009 (Bankr.
E.D. N.Y. Case No. 09-78585). C. Nathan Dee, Esq., and Matthew G.
Roseman, Esq., at Cullen & Dykman, LLP, 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.
GLOWPOINT INC: Annual Stockholders' Meeting Set for June 17
-----------------------------------------------------------
The Annual Meeting of Stockholders of Glowpoint, Inc., will be
held at 1:30 p.m. local time on June 17, 2010, at the law offices
of Gibbons P.C., One Gateway Center, 21st Floor, in Newark, New
Jersey, for these purposes:
1. To amend the Company's 2007 Stock Incentive Plan to
increase the shares reserved for issuance thereunder;
2. To authorize the Board of Directors, in its discretion, to
amend the Company's certificate of incorporation to effect
a reverse stock split of the Company's issued and
outstanding shares of common stock, without further
approval or authorization of its stockholders, at a ratio
of not less than one-for-two and not more than one-for-
five, with the exact ratio to be set within this range as
determined by the Board of Directors in its sole
discretion at any time prior to the next annual meeting of
stockholders of the Company;
3. To elect five members of the Company's board of directors
to serve a one-year term each;
4. To ratify the appointment of Amper, Politziner & Mattia,
LLP as Independent Registered Public Accounting Firm for
fiscal year 2010; and
5. To transact other business as may properly come before the
meeting.
Stockholders of record as of the close of business on April 16,
2010, are entitled to attend and vote at the Annual Meeting or any
adjournment or postponement thereof.
A full-text copy of the Company's proxy statement is available at
no charge at http://ResearchArchives.com/t/s?60eb
Based in Hillside, New Jersey, Glowpoint, Inc.. provides advanced
video communications solutions. Its suite of telepresence and
video communications solutions enable organizations to communicate
with each other over disparate networks and technology platforms
-- empowering business, governmental agencies and educational
institutions to sharply boost the impact and productivity of their
internal and external communications while at the same time
reducing their on-going operating costs. The Company supports
thousands of video communications systems in more than 35
countries with its 24/7 managed video services, powering
Fortune(R) 500 companies, major broadcasters, as well as global
carriers and video equipment manufacturers and their customers
around the world.
At September 30, 2009, the Company had total assets of $7,192,000
against total liabilities of $8,777,000, resulting in
stockholders' deficit of $1,585,000.
At December 31, 2009, the Company had total assets of $6,914,000
against total liabilities of $5,761,000 resulting in stockholders'
equity of $1,153,000. At December 31, 2008, the Company had
stockholders' deficit of $3,213,000. Also at December 31, 2009,
the Company had accumulated deficit of $162,405,000 from
accumulated deficit of $185,409,000 at December 31, 2008.
In its Form 10-Q filing with the Securities and Exchange
Commission for the quarter ended September 30, 2009, the Company
said there is substantial doubt as to its ability to continue as a
going concern. The Company pointed out, "We have incurred
recurring operating losses and negative operating cash flows since
our inception including a net loss attributable to common
stockholders of $3,222,000 for the nine months ended September 30,
2009. At September 30, 2009, we had cash and cash equivalents of
$1,124,000, a working capital deficit of $4,355,000 and an
accumulated deficit of $165,016,000. We have raised capital in
private placements and have amended the terms of our Preferred
Stock to eliminate any dividends until January 2013, but continue
to sustain losses and negative operating cash flows.
Additionally, current economic conditions may cause a decline in
business and consumer spending which could adversely affect our
business and financial performance."
In its 2009 annual report on Form 10-K, the Company said that
although it generated cash from operations of $124,000 for the
year ended December 31, 2009, it has had negative operating cash
flows since inception. At December 31, 2009, the Company had cash
of $587,000, a working capital deficit of $1,365,000 and an
accumulated deficit of $162,405,000. However, the Company has
historically been able to raise capital in private placements,
most recently $3,000,000 in March 2010, amended the terms of its
preferred stock to eliminate any dividends until January 2013, and
have reached settlements with a majority of the taxing authorities
in which the Company had accrued sales and use taxes and
regulatory fees.
On March 30, 2010, Glowpoint announced the completion of a series
of transactions to provide funds to accelerate the Company's
growth plans and improve the Company's capital structure. The
additional equity capital allows the Company to more aggressively
pursue opportunities in the market and build on its industry
leadership position.
"As a result of this transaction, we have raised additional equity
capital to accelerate our growth plans, while at the same time
reducing the aggregate liquidation preference of our preferred
stock from about $34 million to about $20.2 million," said Dave
Robinson, Glowpoint's Co-Chief Executive Officer, in a statement.
"This transaction demonstrates the strong support of our investors
and their belief in the Company's vision for the tremendous
opportunity that lies ahead. We believe the Company is now very
well positioned from a fundamental business perspective and
capital markets perspective. The prospects of tapping the credit
markets have, for the first time in many years, improved
dramatically, potentially providing additional financial
flexibility to finance growth while minimizing shareholder
dilution."
GOTTSCHALKS INC: Founder's Great-Nephew to Open New Stores
----------------------------------------------------------
Rachel Feintzeig at Dow Jones' Daily Bankruptcy Review reports
that Gottschalks is trying to make a comeback led by Joe Levy, the
great-nephew of founder Emil Gottschalk. Ms. Feintzeig relates
that according to the Business Journal of Fresno, the new stores
are to be called "Gottschalk by Joe Levy" and will open their
doors in the fall. Business Journal said the first location will
be housed in the site of a former Gottschalks at the Sierra Vista
Mall in Clovis, Calif., with two nearby stores opening its doors
shortly thereafter.
Dow Jones recalls Gottschalks sought bankruptcy protection in
January 2009 and soon attempted to find a buyer for its assets
that would keep the family-run business alive. But liquidators
came out on top during a March 2009 auction, besting a bid from a
Chinese company that had sought to purchase the business as a
going concern.
Headquartered in Fresno, California, Gottschalks Inc. (Pink
Sheets: GOTTQ.PK) -- http://www.gottschalks.com/-- is a regional
department store chain, operating 58 department stores and three
specialty apparel stores in six western states. Gottschalks
offers better to moderate brand-name fashion apparel, cosmetics,
shoes, accessories and home merchandise.
The Company filed for Chapter 11 protection on January 14, 2009
(Bankr. D. Del. Case No. 09-10157). O'Melveny & Myers LLP
represents the Debtor in its Chapter 11 case. Lee E. Kaufman,
Esq., and Mark D. Collins, Esq., at Richards, Layton & Finger,
P.A., serves as the Debtors' co-counsel. The Debtor selected
Kurtzman Carson Consultants LLC as its claims agent. The U.S.
Trustee for Region 3 appointed seven creditors to serve on an
official committee of unsecured creditors. When the Debtor filed
for protection from its creditors, it listed $288,438,000 in total
assets and $197,072,000 in total debts.
GOTTSCHALKS INC: Plan Hearing Continued Until May 21
----------------------------------------------------
The U. S. Bankruptcy Court for the District of Delaware has
continued until May 21, 2010, at 10:00 a.m. (EDT), the hearing to
confirm Gottschalks Inc.'s Chapter 11 Plan.
The Debtor said that the Plan confirmation hearing was held on
March 16, 2010, at which the Debtor introduced unconverted
evidence that the Plan was approved by holders of more than 99.5%
of all secured and unsecured claim amounts that voted, including
each member of the Creditors Committee, and the Plan met all
confirmation standards. However, the objection of River Park
properties III, et al. was unresolved as of the confirmation
hearing and remains unresolved as of this filing.
On March 30, a mediation conference between the Debtor and the
River Park was held to resolve the objection and proceed with the
confirmation of the plan. The mediation did not result in a
resolution of the litigation, although discussions between the
parties are being continued.
About Gottschalks Inc.
Headquartered in Fresno, California, Gottschalks Inc. (Pink
Sheets: GOTTQ.PK) -- http://www.gottschalks.com/-- is a regional
department store chain, operating 58 department stores and three
specialty apparel stores in six western states. Gottschalks
offers better to moderate brand-name fashion apparel, cosmetics,
shoes, accessories and home merchandise.
The Company filed for Chapter 11 protection on January 14, 2009
(Bankr. D. Del. Case No. 09-10157). O'Melveny & Myers LLP
represents the Debtor in its Chapter 11 case. Lee E. Kaufman,
Esq., and Mark D. Collins, Esq., at Richards, Layton & Finger,
P.A., serves as the Debtors' co-counsel. The Debtor selected
Kurtzman Carson Consultants LLC as its claims agent. The U.S.
Trustee for Region 3 appointed seven creditors to serve on an
official committee of unsecured creditors. When the Debtor filed
for protection from its creditors, it listed $288,438,000 in total
assets and $197,072,000 in total debts.
GOTTSCHALKS INC: Wants Plan Exclusivity Until August 31
-------------------------------------------------------
Gottschalks Inc. asks the U. S. Bankruptcy Court for the District
of Delaware to extend its exclusive periods to file a Chapter 11
Plan from April 30 to June 30, and solicit acceptances of the
proposed Plan from June 30 to August 31.
The Debtor is still in discussion with River Park Properties III,
et al., in relation to the resolution of River Park's objection to
the confirmation of the Plan.
The Debtor proposed a hearing on its exclusivity periods on
June 23, 2010, at 10:00 a.m. (EDT.) Objections, if any, are due
on May 12, 2010, at 4:00 p.m.
About Gottschalks Inc.
Headquartered in Fresno, California, Gottschalks Inc. (Pink
Sheets: GOTTQ.PK) -- http://www.gottschalks.com/-- is a regional
department store chain, operating 58 department stores and three
specialty apparel stores in six western states. Gottschalks
offers better to moderate brand-name fashion apparel, cosmetics,
shoes, accessories and home merchandise.
The Company filed for Chapter 11 protection on January 14, 2009
(Bankr. D. Del. Case No. 09-10157). O'Melveny & Myers LLP
represents the Debtor in its Chapter 11 case. Lee E. Kaufman,
Esq., and Mark D. Collins, Esq., at Richards, Layton & Finger,
P.A., serves as the Debtors' co-counsel. The Debtor selected
Kurtzman Carson Consultants LLC as its claims agent. The U.S.
Trustee for Region 3 appointed seven creditors to serve on an
official committee of unsecured creditors. When the Debtor filed
for protection from its creditors, it listed $288,438,000 in total
assets and $197,072,000 in total debts.
GRANT FOREST: Receives Final Chapter 15 Protection
--------------------------------------------------
Bill Rochelle at Bloomberg News reports that Grant Forest Products
Inc. received from the U.S. Bankruptcy Court in Delaware an order
recognizing its reorganization in Canada as the "foreign main
proceeding."
According to the report, Grant Forest also received approval from
the U.S. bankruptcy judge to implement and enforce a sale of
assets to Georgia-Pacific LLC which the Ontario Superior Court
approved in June.
Grant Forest is a closely held Canadian maker of oriented strand
board used in residential construction.
Alexander Morrison, Ernst & Young Inc., filed a Chapter 15
petition for Grant Forest Products Inc. (Bankr. D. Del. Case No.
10-11132) on March 31, 2010. Rafael Xavier Zahralddin-Aravena,
Esq., at Elliott Greenleaf, serves as counsel.
The petition estimated assets at $500,000,001 to $1,000,000,000
and debts at $100,000,001 to $500,000,000.
HARRISBURG, PA: City Council Meets with Pepper Hamilton & PwC
-------------------------------------------------------------
Dow Jones Newswires' Romy Varghese reports that experts told the
Harrisburg, Pennsylvania, City Council on Monday evening the
capital city faces a time-consuming process with an uncertain
outcome should it file for a rare municipal bankruptcy.
Dow Jones relates that J. Gregg Miller, Esq., an attorney at
Pepper Hamilton, talked to the City Council about the Chapter 9
filing of Westfall Township, the first municipality in
Pennsylvania to restructure under Chapter 9 of the Bankruptcy
Code. Dow Jones says Mr. Miller told the Council the Pike County
municipality was facing a legal claim of over $20 million to a
real-estate developer whose civil rights were violated; the
settlement reduced the payment to $6 million over 20 years with no
interest.
Harrisburg is coping with $288 million in debt related to a failed
revamp of an incinerator. The $68 million in payments on the debt
this year exceed the city's annual budget.
Dow Jones says Mr. Miller warned, however, that municipal
bankruptcy is "expensive" and "time-consuming". Dow Jones relates
fees from Mr. Miller's firm and accountants totaled $600,000 in
the Westfall filing. Mr. Miller also added that "the outcome is
always uncertain," and that "You really can't know where the case
will come out" unless agreements are struck with creditors
beforehand.
According to Dow Jones, Perry Mandarino, head of restructuring at
PricewaterhouseCoopers, said no matter what course of action the
city selects, hard work and negotiations with creditors are
necessary. "In any restructuring there are no silver bullets," he
told council members. "There are no easy answers."
Dow Jones also relates that City Controller Daniel C. Miller told
the seven-member council during the meeting, "We are looking for
the least worst option. Dow Jones relates Mr. Miller added that,
"bankruptcy is a viable option" and one that "does provide
immediate benefits."
Dow Jones reports that the council took no action during the
committee meeting. According to Dow Jones, Council President
Gloria Martin-Roberts said the meeting was aimed at helping the
council members "gather data and information."
HARRISBURG, PA: Finalizing Forbearance Deal with Assured Guaranty
-----------------------------------------------------------------
Dow Jones Newswires' Romy Varghese reports that Harrisburg,
Pennsylvania's interim finance director, Bob Kroboth, said the
city over "the next week or so" may finalize a forbearance
agreement with Assured Guaranty Municipal, which is responsible
for the bulk of the bond payments should the city and Dauphin
County fail to make them.
Dow Jones relates the bond insurer, a unit of Assured Guaranty,
has proposed a forbearance agreement giving the city 90 days to
develop a plan to address its debt load. The city is requesting a
longer period, and is also working on a forbearance agreement with
Covanta Energy, which operates the incinerator and gave the city a
$25 million loan.
Dow Jones also relates that Fred Reddig, executive director of
Governor's Center for Local Government Services, said the state's
community and economic development department is reviewing
Harrisburg's request to fund several recommendations made by a
consultant paid for by the state, such as merging 911 services
with Dauphin County and managing the city's fleet.
HEIDTMAN MINING: Sells All Mining Assets to Coal America
--------------------------------------------------------
The U.S. Bankruptcy Court for the Western District of Arkansas
authorized Heidtman Mining, LLC, to sell substantially all of its
mining assets to Coal America Corporation, a Nevada corporation.
As reported in the Troubled Company Reporter on February 3, 2010,
pursuant to the agreement:
-- at closing, Coal America will pay to the estate these:
a. $15,000,000; and
b. certain costs and expenses incurred by the Debtor prior
to closing.
-- in addition, at closing Coal America will issue to the
Debtor's estate 5 million shares of preferred stock at $5
par value per share (face value $25,000,000). These shares
will pay a 6% annual dividend to the Debtor's estate
($1,500,000 annually).
-- Coal America will purchase all of the Debtor's assets and
will lease on a 50 year term (subject to another 50 year
extension) the Debtor's coal interests. It will pay
certain royalties to be defined in the asset purchase
agreement.
-- Coal America will assume the Debtor's executory contracts
and leases, and will pay on a going forward basis the
royalties and other contract obligations to, for example,
Wilkem and Asarco.
After closing, the Debtor is authorized to pay any commissions due
as a result of the sale per prior court orders and pay the cure
amounts approved in connection with the assumption and assignment
of leases and contracts.
Resultant Management Group, L.L.C., and its affiliate, the John T.
Boyd Company, as marketing consultants, helped the Debtor reached
an agreement with Coal America.
In connection with the secured claim of GE Capital Corporation,
the Debtor will hold and not distribute the amount of $3,600,000,
pending resolution of the validity, priority and amount of the
allowed secured claim of GE Capital.
The Debtor is represented by:
George H. Tarpley
Cox Smith Matthews Incorporated
1201 Elm Street, Suite 3300
Dallas, TX 75270
About Heidtman Mining
Toledo, Ohio-based Heidtman Mining, LLC, filed for Chapter 11 on
June 12, 2009 (Bankr. W.D. Ark. Case No. 09-72912). George H.
Tarpley, Esq., Marcus Jermaine Watson, Esq., at Cox Smith Matthews
Incorporated; and Mark W. Hodge, Esq., at Chisenhall, Nesturd &
Julian, represent the Debtor in its restructuring efforts. The
Debtor estimated $10 million to $50 million in assets and
$50 million to $100 million in debts in its bankruptcy petition.
HELLER EHRMAN: Promises Unsecured Creditors Up To 65% Recovery
--------------------------------------------------------------
Heller Ehrman, LLP, filed with the U.S. Bankruptcy Court for the
Northern District of California a Disclosure Statement explaining
its proposed Plan of Liquidation.
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 that the
Liquidating Debtor will continue to wind down its affairs and
make distributions to creditors. The Plan also provides for the
revesting of estate assets in the Liquidating Debtor, the
capitalization of the Liquidating Debtor with the former
shareholder settlement payments subject to the terms of the former
shareholder settlement mechanism, the management of the
Liquidating Debtor, and sets forth the Liquidating Debtor's
retained claims and defenses.
Under the Plan, upon the effective date, the Plan of Dissolution
will be deemed amended to replace the Dissolution Committee with
the Plan Administrator, and the Dissolution Committee will be
relieved of its responsibilities for the Debtor.
Treatment of Claims
Class Estimated Percentage Recovery
----- -----------------------------
3 - Secured Claims of Bank of 100%
America and Citibank
4 - Insured Malpractice Claims 100%
5 - Unsecured Claims 23% - 65%
($90.00MM to $100.00MM)
6 - Subordinated Biggers Unsecured 0%
Claims ($7.00MM)
7 - Subordinated Former Shareholder 0%
Claims ($4.84MM)
8 - Interests 0%
The Debtor proposes a hearing on the approval of the Disclosure
Statement on May 5, 2010, at 9:30 a.m. before the Hon. Dennis
Montali. The hearing will be held at the Bankruptcy Court, 235
Pine Street, 22nd Floor, San Francisco, California.
A full-text copy of the Disclosure Statement is available for free
at http://bankrupt.com/misc/HELLEREHRMAN_DS.pdf
The Debtor is represented by:
John D. Fiero
E-mail: jfiero@pszjlaw.com
Kenneth H. Brown
E-mail: kbrown@pszjlaw.com
Teddy M. Kapur
E-mail: tkapur@pszjlaw.com
Pachulski Stang Ziehl & Jones LLP
150 California Street, 15th Floor
San Francisco, CA 94111-4500
Tel: (415) 263-7000
Fax: (415) 263-7010
About Heller Ehrman, LLP
Headquartered in San Francisco, California, Heller Ehrman, LLP
-- http://www.hewm.com/-- was an international law firm of more
than 730 attorneys in 15 offices in the United States, Europe, and
Asia. The firm filed a voluntary petition under Chapter 11 of the
Bankruptcy Code on December 28, 2008 (Bankr. N.D. Calif., Case No.
08-32514). Members of the firm's dissolution committee led by
Peter J. Benvenutti approved a plan dated September 26, 2008, to
dissolve the firm.
The Hon. Dennis Montali presides over the case. John D. Fiero,
Esq., and Miriam Khatiblou, Esq., at Pachulski, Stang, Ziehl,
Young and Jones, represent the Debtors as counsel. Thomas A.
Willoughby, Esq., at Felderstein Fitzgerald Willoughby & Pascuzzi
LLP, represents the official committee of unsecured creditors of
the Debtor. The firm listed assets and debts between $50 million
and $100 million each in its bankruptcy petition. According to
reports, the firm still has roughly $63 million in assets and 54
employees at the time of its filing.
HERTZ CORPORATION: Moody's Affirms Corporate Family Rating at 'B1'
------------------------------------------------------------------
Moody's Investors affirmed the ratings of the Hertz Corporation
and Dollar Thrifty Automotive Group following the announcement of
an agreement under which Hertz will acquire Dollar Thrifty for
approximately $1.3 billion. Hertz's Corporate Family Rating and
Probability of Default Rating are B1, its Speculative Grade
Liquidity rating is SGL-3, and its outlook remains Negative.
Dollar Thrifty's Corporate Family Rating and Probability of
Default Rating are B3, its Speculative Grade Liquidity rating is
SGL-3, and its rating outlook was revised to Positive from Stable
as a result of the proposed transaction.
Under the terms of the proposed agreement the $1.3 billion
purchase price will be funded with: a $750 million cash payment by
Hertz; an approximately $350 million equity issuance by Hertz;
and, a $200 million cash dividend to be paid by Dollar Thrifty to
its shareholders prior to closing. Subsequent to Dollar Thrifty
shareholder approval and satisfactory regulatory review, the
transaction is expected to close during the fourth quarter of
2010.
The acquisition of Dollar Thrifty should result in meaningful
long-term strategic benefits for the combined entity. The value-
oriented, leisure-travel franchise of Dollar Thrifty will fill a
gap in Hertz's existing service offerings, and Hertz anticipates
that a minimum of $180 million in cost synergies will be achieved
within 18 months of closing. Hertz also expects that its share of
the total US car rental market will rise from 16% to 23%; this
compares with public estimates of a 53% share for Enterprise
Holdings and 20% for Avis Budget Group.
The transaction is taking place as car rental industry
fundamentals are improving. Fleet levels are being maintained at
conservative levels, moderate price increases are occurring in the
leisure sector, and used car prices have rebounded sharply. In
addition, the major competitors in the sector are focusing on
improving returns through reducing costs and raising ancillary
revenues. There appears to be less focus on attempts to gain
share through price reductions. Consequently, the overall pricing
environment may be more favorable. Finally, the availability of
securitization funding for the sector has significantly improved.
Notwithstanding the potential long-term benefits of this
transaction, Hertz continues to face a number of near-term
challenges that underpin the negative rating outlook. Despite the
company's successful cost reduction efforts and improving market
fundamentals, its interest expense will rise by approximately
$100 million during 2010 due to: increased borrowing costs
associated with refinancings that were accomplished since 2009;
the anticipated refinancing of international fleet debt; and, a
higher level of revenue earning equipment. In addition, the
company must still refinance approximately $1.7 billion in
securitized debt that supports its international operations.
Finally, should the Dollar Thrifty transaction be completed, Hertz
may have to take on as much as $500 million of debt to preserve
the liquidity used to fund its cash portion of the purchase price.
Consequently, measures of EBITA/interest, which approximated only
1x during 2009, could show little improvement during 2010.
Hertz has stated that it has the capacity to fund its $750 million
cash payment out of its current liquidity resources that include
$801 million in unrestricted cash and $854 million available under
its revolving credit facility. Moody's notes, however, that
utilizing these sources to fund the purchase would materially
weaken the company's liquidity profile, which the rating agency
currently views as adequate as indicated by the SGL-3 Speculative
Grade Liquidity rating. In order to preserve adequate liquidity,
it will be critical for Hertz to obtain an alternate source of
funding to support the cash portion of the purchase. As the date
of the transaction's prospective closing approaches, the absence
of an alternative source of funding could increase the likelihood
that Hertz will fund the payment by utilizing cash on hand or by
drawing on the credit facility. As this risk increases, there
could be downward pressure on Hertz's Speculative Grade Liquidity
and long-term ratings.
Hertz could consider a variety of funding alternatives to address
its international fleet financing requirements and the cash
payment for the Dollar Thrifty acquisition. These alternatives
could include various combinations of asset-backed
securitizations, secured bank debt, and secured or unsecured
bonds. The nature of the financing alternatives Hertz chooses to
utilize to meet its financing requirements could have an impact on
the priority of claim of existing creditors and consequently on
Moody's rating of specific instruments.
Should Hertz complete its European financing, and should favorable
industry fundamentals be sustained during 2010, Hertz's prospects
for strengthening its credit metrics (particularly interest
coverage) would improve, and the rating outlook could be
stabilized later in the year. An ability to sustain
EBITA/interest above 1.2 times and maintain adequate liquidity
would be supportive of a change in the outlook to stable.
Dollar Thrifty benefits from the same positive industry
fundamentals as Hertz. However, the potential purchase by Hertz
would address the major long-term risk factor facing the company.
Dollar Thrifty is a small player relative to Hertz, Enterprise and
Avis. Moreover, it is concentrated in a narrow spectrum of the
car rental sector -- value-oriented leisure travel. To the extent
that Dollar Thrifty is combined with Hertz, this risk would be
mitigated. Consequently, the rating outlook for Dollar Thrifty is
positive. The company's strong cash position of approximately
$500 million should provide it with adequate liquidity to fund the
proposed $200 million dividend.
The last rating action on Hertz was a downgrade of the company's
CFR to B1 and change in its outlook to negative on July 14, 2009.
The last rating action on Dollar Thrifty was an upgrade of the
company's CFR to B3 and change in the outlook to stable on
November 20, 2009.
Hertz Corporation, headquartered in Park Ridge, NJ, is a leading
automobile and equipment rental company.
Dollar Thrifty Automotive Group, headquartered in Tulsa, Oklahoma,
is a large automobile rental company.
HOPEWELL BAPTIST: Voluntary Chapter 11 Case Summary
---------------------------------------------------
Debtor: Hopewell Baptist Church
725 Elizabeth Avenue
Newark, NJ 07112
Bankruptcy Case No.: 10-22655
Chapter 11 Petition Date: April 27, 2010
Court: United States Bankruptcy Court
District of New Jersey (Newark)
Judge: Donald H. Steckroth
Debtor's Counsel: Theresa E. Pollard, Esq.
116 Madonna Place
East Orange, NJ 07018
Tel: (973) 672-5484
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 Jason Guice, CEO.
HOWARD HOOD: Case Summary & 12 Largest Unsecured Creditors
----------------------------------------------------------
Joint Debtors: Howard Hood
Cindy Hood
7406 Widmore Court
Spring, TX 77379
Bankruptcy Case No.: 10-33391
Chapter 11 Petition Date: April 27, 2010
Court: United States Bankruptcy Court
Southern District of Texas (Houston)
Judge: Karen K. Brown
Debtor's Counsel: John L. Green, Esq.
4888 Loop Central Dr, Suite 445
Houston, TX 77081
Tel: (713) 660-7400
Fax: (713) 660-9921
E-mail: jlgreen488@aol.com
Estimated Assets: $100,001 to $500,000
Estimated Debts: $1,000,001 to $10,000,000
A list of the Company's 12 largest unsecured creditors filed
together with the petition is available for free at
http://bankrupt.com/misc/txsb10-33391.pdf
The petition was signed by Howard Hood and Cindy Hood.
JAMES ARCHIBALD: Voluntary Chapter 11 Case Summary
--------------------------------------------------
Debtor: James Archibald
953 Horsham Road
Montgomeryville, PA 18936
Bankruptcy Case No.: 10-13416
Chapter 11 Petition Date: April 28, 2010
Court: U.S. Bankruptcy Court
Eastern District of Pennsylvania (Philadelphia)
Judge: Bruce I. Fox
Debtor's Counsel: Carol B. McCullough, Esq.
McCullough & Eisenberg PC
530 West Street Road, Suite 201
Warminister, PA 18974
Tel: (215) 957-6411
E-mail: mlawoffice@aol.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
The Debtor did not file a list of creditors together with its
petition.
The petition was signed by the Debtor.
JEFFREY MCCONVILLE: Case Summary & 12 Largest Unsecured Creditors
-----------------------------------------------------------------
Debtor: Jeffrey P. McConville
2065 Palmer Drive
Lake Havasu City, AZ 86406
Bankruptcy Case No.: 10-12505
Chapter 11 Petition Date: April 27, 2010
Court: U.S. Bankruptcy Court
District of Arizona (Yuma)
Judge: Randolph J. Haines
Debtor's Counsel: Randy Nussbaum, Esq.
Nussbaum & Gillis, P.C.
14500 N. Northsight Boulevard #116
Scottsdale, AZ 85260
Tel: (480) 609-0011
Fax: (480) 609-0016
E-mail: rnussbaum@nussbaumgillis.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 12 largest unsecured creditors
filed together with the petition is available for free at
http://bankrupt.com/misc/azb10-12505.pdf
The petition was signed by the Debtor.
JOHN MCMANUS: Voluntary Chapter 11 Case Summary
-----------------------------------------------
Joint Debtors: John M. McManus
Holly D. McManus
6771 Wildrye Road
Lincoln, NE 68521
Bankruptcy Case No.: 10-41317
Chapter 11 Petition Date: April 28, 2010
Court: U.S. Bankruptcy Court
District of Nebraska (Lincoln Office)
Judge: Thomas L. Saladino
Debtor's Counsel: John D. Rouse, Esq.
John D. Rouse, P.C.
1023 Lincoln Mall, Suite 101
Lincoln, NE 68508
Tel: (402) 475-1993
Fax: (402) 475-7989
E-mail: jrouselaw@inebraska.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.
JOHN RODOLPH: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: John J. Rodolph
aka Jack Rodolph
297 Howard Street
Rockland, MA 02370
Bankruptcy Case No.: 10-14491
Chapter 11 Petition Date: April 27, 2010
Court: United States Bankruptcy Court
District of Massachusetts (Boston)
Judge: Joan N. Feeney
Debtor's Counsel: Pamela A. Harbeson, Esq.
Looney and Grossman
101 Arch Street
Boston, MA 02110
Tel: (617) 951-2800
Fax: (617) 951-2819
E-mail: pharbeson@lgllp.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 filed
together with the petition is available for free at
http://bankrupt.com/misc/mab10-14491.pdf
The petition was signed by John J. Rodolph.
JOSH WITTE: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------
Debtor: Josh Daniel Witte
dba Witte Construction & Excavation
9187 Dayflower Drive
Ooltewah, TN 37363
Bankruptcy Case No.: 10-12452
Chapter 11 Petition Date: April 27, 2010
Court: United States Bankruptcy Court
Eastern District of Tennessee (Chattanooga)
Judge: Shelley D. Rucker
Debtor's Counsel: David J. Fulton, Esq.
Scarborough, Fulton & Glass
701 Market Street, Suite 1000
Chattanooga, TN 37402
Tel: (423) 648-1880
Fax: (423) 648-1881
E-mail: djf@sfglegal.com
Estimated Assets: $500,001 to $1,000,000
Estimated Debts: $1,000,001 to $10,000,000
A list of the Company's 20 largest unsecured creditors filed
together with the petition is available for free at
http://bankrupt.com/misc/tneb10-12452.pdf
The petition was signed by Josh Daniel Witte.
KANSAS CITY: S&P Puts 'B' Corp. Rating on CreditWatch Positive
--------------------------------------------------------------
Standard & Poor's Ratings Services placed its 'B' corporate credit
rating and other long-term ratings on U.S.-based railroad Kansas
City Southern on CreditWatch with positive implications.
"The rating action reflects potential debt reduction, as well as
an improved capital structure and liquidity position pro forma for
KCS' proposed equity offering," said Standard & Poor's credit
analyst Anita Ogbara. In March 2010, the company completed a two-
year extension and amendment to its U.S. credit facility to allow
the use net proceeds from equity issuance to pay down debt.
"At completion of the equity issuance, S&P will access the new
capital structure and improved liquidity position," she continued.
KGB: S&P Affirms Corporate Credit Rating at 'B+'
-----------------------------------------------
Standard & Poor's Ratings Services said it affirmed its ratings on
New York City-based directory assistance and information provider
kgb, including the 'B+' corporate credit rating. S&P also
affirmed the 'B+' issue rating and '3' recovery rating on kgb's
existing secured term loan. The outlook is stable.
In addition, S&P assigned a 'B+' issue rating and '3' recovery
rating to the company's amended and extended $126 million
revolving credit, which replaces the current $200 million
facility.
The amendments to the credit agreement provide the company with
modestly enhanced liquidity, despite the smaller revolver size,
including an extension of the revolver maturity by 20 months,
exclusion of revolver and term loan B final maturities in the
fixed-charge covenant calculations, and additional credit for cash
balances in the net leverage definition.
"The ratings reflect a weak business position resulting from
ongoing margin compression in the company's wholesale U.S.
business and significant dependence on the retail DA business in
Europe," said Standard & Poor's credit analyst Catherine
Cosentino." Worldwide recessionary economic trends have weakened
demand in much of 2009. Moreover, technological advances in the
provisioning of DA that change the way consumers obtain
information could hurt longer term consumer demand. The limited
size and scale of the company's overall operations also constrain
the ratings.
KING PHARMACEUTICALS: Moody's Affirms 'Ba3' Corp. Family Rating
---------------------------------------------------------------
Moody's Investors Service affirmed King Pharmaceuticals' Ba3
Corporate Family Rating and stable outlook, and assigned a rating
of Ba1 to King's proposed new senior secured revolving credit
agreement of $500 million due 2015.
At the same time, Moody's upgraded King's Speculative-Grade
Liquidity rating to SGL-1 from SGL-2, reflecting the improved
borrowing capacity and headroom under financial covenants. King's
liquidity profile also benefits from high levels of cash and short
term investments ($547 million as of December 31, 2009) and
positive free cash flow expected even after the recent launch of
generic versions of Skelaxin.
The affirmation of King's Ba3 Corporate Family rating reflects the
company's good positions in niche pharmaceutical markets, an
interesting pipeline of pain products, and diversity provided by
its animal health business. King has a solid M&A track record and
has rapidly delevered following the Alpharma acquisition in 2008.
These strengths are offset by declining Skelaxin sales following
recent generic launches, uneven sales trends in other franchises
such as Thrombin JMI, and industry-wide challenges related to
pipeline execution. Last week, an FDA advisory panel recommended
against the approval of Acurox, a novel pain treatment designed to
reduce abuse.
The rating outlook is currently stable. Factors that would
support upward pressure over time include successful uptake of
Embeda (launched in September 2009), good pipeline execution of
Remoxy (slated to be re-filed with the FDA during the fourth
quarter of 2010), and a conservative approach to future
acquisitions. Factors that could create negative pressure include
large debt-financed M&A, unexpected generic competition on core
products, or a major setback in the Remoxy development program.
The Ba1 rating on the proposed new senior secured credit facility
is two notches higher than the Ba3 Corporate Family rating based
on its senior position in King's capital structure, and Moody's
understanding that collateral will consist of an asset pledge
including most of the property of King and its U.S. subsidiaries
including intellectual property, although accounts receivable and
plants and facilities will be carved out. The rating is subject
to Moody's review of final terms and documentation. The Ba1
rating on the secured credit facilities also reflects loss
absorption provided by King's $400 million senior unsecured
convertible notes due 2026, which Moody's does not rate.
Rating assigned:
* Ba1 (LGD2, 16%) $500 million senior secured revolving credit
facility due 2015
Ratings affirmed:
* Ba3 Corporate Family Rating
* Ba3 Probability of Default Rating
Rating upgraded:
* Speculative-Grade Liquidity Rating to SGL-1 from SGL-2
Upon closing of the new credit agreement, Moody's anticipates
withdrawing the Ba2 (LGD2, 28%) rating on King's $475 million
revolving credit agreement maturing in 2012.
Moody's last rating action on King took place on January 7, 2009,
when Moody's affirmed King's Ba3 Corporate Family Rating, upgraded
the senior secured credit facility rating to Ba2 from Ba3, and
lowered the SGL rating to SGL-2 from SGL-1.
King Pharmaceuticals, Inc., headquartered in Bristol, Tennessee,
is a vertically integrated pharmaceutical company that develops,
manufactures, markets and sells branded pharmaceutical products.
The company targets specialty-driven pharmaceutical markets, with
a focus on neuroscience, hospital and acute care medicines. King
reported total revenues of approximately $1.8 billion for the year
ended December 31, 2009.
LAKE AT LAS VEGAS: Hearing on Water Pacts Slated for May 13
-----------------------------------------------------------
The Hon. Linda B. Riegle of the U.S. Bankruptcy Court for the
District of Nevada will consider at a hearing on May 13, 2010, at
9:30 a.m. (Pacific time), Lake at Las Vegas Joint Venture, LLC, et
al.'s motion to approve the water agreements. The hearing will be
held in Courtroom 1 at 300 Las Vegas Blvd. South, Las Vegas,
Nevada. Objections, if any, are due on May 6, 2010.
The Debtors sought approval for various water service agreement
which the provide that the city will transmit raw water and lake
water to LLVJV for future developments within the community. The
agreements include:
-- The Agreement for Raw Water Distribution Within Lake Las
Vegas with the City of Henderson, the Lake Las Vegas Master
Association;
-- The Lake Water Lines Agreement with the city, the MPOA,
LLVJV, and SPE MD Holdings, LLC, the owner of the SouthShore
Golf Course;
-- The Water Service Agreement with the city and LLVJV;
-- The Letter Modification to Agreements with the city, the
MPOA, LLVJV and SPE MD Holdings.
The principal features of the agreements are:
1) The MPOA, the Debtors, and each Golf Course owner would be a
separate customer of the city with respect to its water
needs.
2) The Debtors and the city would agree to terminate the 1991
Agreement, and make available the capacity thereunder to the
city so that the city could serve each of its new, separate
customers.
3) LLVJV would retain the right to 2,000 AFY (as provided for
in the 1991 Agreement) for future needs, as the development
of Phase III of the community.
4) The MPOA, which owns and maintains the Lake, would receive
2,000 AFY in order to replace the water in the Lake lost
each year through evaporation.
5) The MPOA, the Debtors and each golf course owner would
convey its lake water pumps and raw water and lake water
lines to the city. The city would accept the pumps and
lines and would maintain the infrastructure, passing
through the cost of maintenance to the various customers at
the community.
6) Finally, to maintain the lake, and comply with the 404
permit and lake plan, a minimum of 2,000 AFY would be
introduced into the lake and then withdrawn for common area
and golf course irrigation (for a total of approximately
4,000 AFY introduced into the lake each year.) Since the
total annual irrigation allocation for the Golf Courses and
the MPOA is 3,000 AFY, this means that the golf courses and
the MPOA must irrigate with two-thirds lake water and one-
third raw water.
The Debtors are represented by:
Klee, Tuchin, Bogdanoff & Stern LLP
1999 Avenue of the Stars, 39th Floor
Los Angeles, CA 90067-6049
Tel: (310) 407-4000
Fax: (310) 407-9090
About Lake at Las Vegas
Headquartered in Henderson, Nevada, Lake at Las Vegas Joint
Venture, LLC and 14 of its debtor-affiliates --
http://www.lakelasvegas.com/-- are owners and developers of
3,592-acre residential and resort destination Lake Las Vegas
Resort in Las Vegas, Nevada. Centered around a 320-acre man-made
lake, Lake Las Vegas contains more than 9,000 residential units,
and also includes two luxury resort hotels (a Loews and a Ritz-
Carlton), a casino, a specialty retail village shopping area,
marinas, three signature golf courses and related clubhouses, and
other real property.
The Debtors filed separate petitions for Chapter 11 relief on
July 17, 2008 (Bankr. D. Nev. Lead Case No. 08-17814). When Lake
at Las Vegas Joint Venture, LLC, filed for protection from its
creditors, it listed assets of $100 million to $500 million, and
debts of $500 million to $1.0 billion. Courtney E. Pozmantier,
Esq., Martin R. Barash, Esq., at Klee, Tuchin, Bogdanoff & Stern
LLP, Jason D. Smith, Esq., at Santoro, Driggs, Walch, Kearney,
Holley & Thompson, Jeanette E. McPherson, Esq., Lenard E.
Schwartzer, Esq., at Schwartzer & McPherson Law Firm, represent
the Debtors as counsel. Kaaran E. Thomas, Esq., Ryan J. Works,
Esq., at McDonald Carano Wilson LLP, represent the Official
Committee of Unsecured Creditors as counsel.
LANDRY'S RESTAURANTS: Gets Court Approval to Acquire Oceanaire
--------------------------------------------------------------
Landry's Restaurants, Inc., has closed on its offering of an
additional $47.0 million in aggregate principal amount of 11 5/8%
senior secured notes due 2015. The Company received proceeds of
$49.8 million as a result of the sale of the Additional Notes.
The offering of the Additional Notes was led by Jefferies &
Company, Inc., as sole book-running manager. Proceeds from the
offering will be used to pay for the acquisition of The Oceanaire,
Inc. to repay outstanding revolver balances and for general
corporate purposes.
The Company further stated that the Bankruptcy Court had approved
its plan to acquire Oceanaire for approximately $23.4 million plus
the assumption of certain additional working capital liabilities.
The acquisition is expected to close on or about April 30, 2010.
About Landry's Restaurants
Based in Houston, Texas, Landry's Restaurants, Inc. (NYSE: LNY)
owns and operates full-service, casual dining restaurants,
primarily under the names of Rainforest Cafe, Saltgrass Steak
House, Landry's Seafood House, Charley's Crab, The Chart House,
and the Signature Group of restaurants. The Company also owns and
operates select hospitality businesses, including the Golden
Nugget Hotel & Casinos in Las Vegas and Laughlin, Nevada.
* * *
Landry's Restaurants continues to carry S&P's (B/Watch Neg/--)
Corporate Credit Rating; and Moody's 'B2' Corporate Family and
Probability of Default Ratings.
About Oceanaire
The Oceanaire Texas Restaurant Company, L.P., dba The Oceanaire
Seafood Room, and five affiliates, including Oceanaire Inc., filed
for Chapter 11 on July 5, 2009 (Bankr. N.D. Tex. Lead Case No. 09-
34262). Mark Joseph Elmore, Esq., and Robert Dew Albergotti, Esq.,
at Haynes and Boone, LLP, represent the Debtor in their Chapter 11
effort. Oceanaire's petition estimated assets of $1,000,001 to
$10,000,000 against debts of $10,000,001 to $50,000,000 as of the
filing.
LEGACY AT JORDAN LAKE: Files for Chapter 11
-------------------------------------------
Legacy at Jordan Lake LLC filed a Chapter 11 petition (Bankr.
E.D.N.C. Case No. 10-03317) on April 27 in Wilson, North Carolina,
listing assets of $29.1 million and debt of $22.9 million.
Legacy at Jordan Lake is the developer of a masterplanned
community near Chapel Hill, North Carolina. The project consists
of 38 completed lots for single-family homes plus 391 acres of
developable property.
LEHMAN BROTHERS: Miller Testifies in Court on Barclays Deal
-----------------------------------------------------------
Bankruptcy Law360 reports that Weil Gotshal & Manges LLP
restructuring star Harvey R. Miller took the stand Wednesday in
the trial over Lehman Brothers Holdings Inc.'s hasty sell-off of
its brokerage business to Barclays PLC, saying details of the deal
were in flux right up until a hearing to approve the sale.
According to American Bankruptcy Institute, former Lehman
president and CFO Herbert McDade also took the stand, testifying
that there were no secrets kept by those who scrambled to value
Lehman assets in the tumultuous hours before the collapsing U.S.
investment firm sold its core U.S. brokerage to British bank
Barclays in 2008.
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)
LIFEMASTERS SUPPORTED: Unsecureds Recovery Dependent on CMS Claim
-----------------------------------------------------------------
The Hon. Erithe A. Smith of the U.S. Bankruptcy Court for the
Central District of California will consider at a hearing on
June 8, 2010, at 10:30 a.m., the approval of Disclosure Statement
explaining Plan of Reorganization for LifeMasters Supported
SelfCare, Inc. The hearing will be held at Courtroom 5A, 411 W
Fourth St., Santa Ana, California.
The Debtor will begin soliciting votes on the Plan following
approval of the adequacy of the information in the Disclosure
Statement.
The Plan proponents are the Debtor and The Official Committee of
Unsecured Creditors.
According to the Disclosure Statement, the Plan will be funded
entirely by the estate funds and any recovery of funds obtained
from the pursuit of any avoidance causes of action, including the
lawsuit against defendants.
Secured claims will be paid in full out of the estate funds or by
setoff against deposit.
Priority claims will be paid in full out of the estate funds.
General unsecured claims amounting to $128,670 will be paid from
the remaining estate funds on a pro rata basis. The Debtor
estimates that holders of Class 3 allowed claims will receive a
distribution of 8.9% if the $108 million in claims asserted by
Center for Medicare and Medicaid Services are allowed in full and
will receive a distribution of 100% if the claims asserted by CMS
are allowed in the amount of $5.5 million or less.
Equity interests will be paid from the remaining estate funds on a
pro rata basis.
A full-text copy of the Disclosure Statement is available for free
at http://bankrupt.com/misc/LifeMastersSupported_DS.pdf
The Debtor is represented by:
Ron Bender
E-mail: rb@lnbrb.com
Todd M. Arnold
E-mail: tma@lnbrb.com
Levene, Neale, Bender, Rankin & Brill L.L.P.
10250 Constellation Boulevard, Suite 1700
Los Angeles, CA 90067
Tel: (310) 229-1234
Fax: (310) 229-1244
About LifeMasters Supported SelfCare
Irvine, California-based LifeMasters Supported SelfCare, Inc. --
http://www.lifemasters.com/-- is a disease management and health
improvement company with more than 15 years of experience working
with employers, insurers, hospitals and physicians to lower costs
and improve patient satisfaction with the healthcare system.
LifeMasters is accredited by the National Committee for Quality
Assurance (NCQA) and URAC.
The Company filed for Chapter 11 on Sept. 14, 2009 (Bankr. C. D.
Calif. Case No. 09-19722). The Debtor listed assets and debts
both ranging from $10,000,001 to $50,000,000.
LODGIAN INC: Completes Merger With Lone Star Affiliate
------------------------------------------------------
On April 19, 2010, Lodgian, Inc. completed its merger with LSREF
Lodging Merger Co., Inc., a wholly-owned subsidiary of LSREF
Lodging Investments, LLC. As a result of the merger, Lodgian is
now a wholly-owned subsidiary of LSREF Lodging Investments, LLC.
The purchaser is controlled by an affiliate of Lone Star Real
Estate Fund (U.S.), L.P.
Lodgian stockholders will receive $2.50 per share in the all-cash
transaction. The transaction is valued at approximately
$270 million, including assumed debt.
"We are enthusiastic about this transaction and are pleased to
work with Lodgian's talented team to provide customers with the
high quality lodging and outstanding service they have come to
expect from Lodgian properties," said Lone Star Funds' Andre
Collin, Senior Managing Director, Real Estate Americas.
"We look forward to joining the Lone Star family of portfolio
companies and continuing to build upon the success of Lodgian's
hotels," said Daniel E. Ellis, Lodgian President and Chief
Executive Officer. "Not only will Lodgian benefit from Lone
Star's financial strength, but also it will benefit from Lone
Star's broad real estate expertise."
Hunton & Williams LLP is acting as legal counsel to Lone Star.
Dana Ciraldo, previously affiliated with Hodges Ward Elliott,
acted as financial advisor to Lone Star. King & Spalding LLP is
acting as legal counsel to Lodgian. Genesis Capital LLC acted as
a financial advisor to Lodgian, and Houlihan Lokey Howard & Zukin
Financial Advisors, Inc. provided a fairness opinion to the Board
of Directors of Lodgian.
In connection with the closing of the merger, NYSE Amex Equities
filed with the Securities and Exchange Commission on April 20,
2010, an application on Form 25 to delist and deregister the
common stock of Lodgian under Section 12(b) of the Securities
Exchange Act of 1934, as amended. Trading of the common stock on
NYSE Amex Equities was suspended as of the closing of trading on
April 19, 2010.
The aggregate purchase price paid for all equity securities of
Lodgian was approximately $54 million. The purchase price was
funded by cash of the purchaser.
In connection with the merger, all the directors of Lodgian prior
to the merger voluntarily resigned from Lodgian's board of
directors effective as of the effective time of the merger on
April 19, 2010.
About Lone Star Funds
Lone Star is a global investment firm that acquires debt and
equity assets including corporate, commercial real estate, single-
family residential, and consumer debt products, as well as banks
and asset-rich operating companies requiring rationalization.
Since the establishment of its first fund in 1995, the principals
of Lone Star have organized private equity funds totaling roughly
$24 billion of capital that has been invested globally through
Lone Star's worldwide network of affiliate offices.
About Lodgian, Inc.
Atlanta, Ga.-based Lodgian, Inc. -- http://www.lodgian.com/-- is
one of the largest independent hotel owners and operators in the
United States. The Company currently owns and manages a portfolio
of 27 hotels with 5,230 rooms located in 18 states. Of Lodgian's
27-hotel portfolio, 13 are InterContinental Hotels Group brands
(Crowne Plaza and Holiday Inn), 8 are Marriott brands (Marriott,
Courtyard by Marriott, SpringHill Suites by Marriott and Residence
Inn by Marriott), two are Hilton brands, and four are affiliated
with other nationally recognized franchisors including Starwood,
Wyndham, and Carlson.
At December 31, 2009, the Company's consolidated balance
sheets showed $453.0 million in total assets, $319.7 million in
total liabilities, and $133.3 million in total stockholders'
equity.
* * *
As reported in the Troubled Company Reporter on March 18, 2010,
Deloitee & Touche LLP, in Atlanta, Ga., expressed substantial
doubt about the Company's ability to continue as a going concern.
The independent auditors noted that of the Company's inability to
refinance roughly $101.2 million of its debt on a long-term
basis.
LODGENET INTERACTIVE: Pinnacle Holds 4.96% of Common Stock
----------------------------------------------------------
Pinnacle Associates, Ltd., disclosed that as of April 2, 2010, it
may be deemed to beneficially own 1,217,832 shares or roughly
4.96% of the common stock of LodgeNet Interactive Corporation.
Pinnacle is an investment adviser registered under Section 203 of
the Investment Advisers Act of 1940.
About LodgeNet Interactive
Sioux Falls, South Dakota-based LodgeNet Interactive Corporation
(Nasdaq:LNET) -- http://www.lodgenet.com/-- provides media and
connectivity solutions designed to meet the unique needs of
hospitality, healthcare and other guest-based businesses.
LodgeNet Interactive serves more than 1.9 million hotel rooms
worldwide in addition to healthcare facilities throughout the
United States. The Company's services include: Interactive
Television Solutions, Broadband Internet Solutions, Content
Solutions, Professional Solutions and Advertising Media Solutions.
LodgeNet Interactive Corporation owns and operates businesses
under the industry leading brands: LodgeNet, LodgeNetRX, and The
Hotel Networks.
LodgeNet's balance sheet for March 31, 2010, will show $485.07
million in total assets and $542.3 million in total liabilities,
for a $57.22 million stockholders' deficit. At December 31, 2009,
LodgeNet had $70.9 million in stockholders' deficit.
* * *
According to the Troubled Company Reporter on September 30, 2009,
Moody's Investors Service upgraded LodgeNet Interactive
Corporation's speculative grade liquidity rating to SGL-3
(indicating adequate liquidity) from SGL-4 (indicating poor
liquidity) while revising the outlook for all ratings to stable
from negative. Concurrently, Moody's also affirmed LodgeNet's B3
corporate family rating and Caa1 probability of default rating.
LODGENET INTERACTIVE: Victorian Capital Holds 2.92% of Shares
-------------------------------------------------------------
Victorian Capital LP, Incorporated, Pension Corporation Co-
Investment (GP) Limited, and The Truell Charitable Foundation
disclosed that as of April 26, 2010, they may be deemed to
beneficially own 731,463 shares of LodgeNet Interactive
Corporation common stock, representing approximately 2.92% of the
outstanding shares.
Victorian Capital sold 633,193 LodgeNet shares in various
transactions from March 31, 2010, to April 26, 2010. All the
dispositions were through JP Morgan Cazenove Limited. The firm
said none of PCCI's or TCF's directors or executive officers has
effected any transaction in the Common Stock during the past 60
days.
PCCI is the sole general partner of Victorian Capital. TCF owns
all of the outstanding ordinary shares of PCCI.
In a regulatory filing with the Securities and Exchange Commission
earlier this month, Victorian Capital said it began purchasing
shares of Common Stock on November 7, 2008. The shares were
acquired for investment purposes.
Victorian Capital said it intends to assess its investment in the
Company from time to time on the basis of various factors,
including, without limitation, the Company's business, financial
condition, results of operations and prospects, general economic,
market and industry conditions, as well as other developments and
other investment opportunities. Victorian Capital presently
intends to dispose of all or part of the shares of Common Stock,
in open market transactions, privately negotiated transactions or
otherwise.
Any acquisition or disposition may be effected by Victorian
Capital at any time without prior notice.
The firm said its representatives may engage in communications
from time to time with one or more stockholders, officers or
directors of the Company regarding the Company's operating
performance, strategic direction or other matters.
About LodgeNet Interactive
Sioux Falls, South Dakota-based LodgeNet Interactive Corporation
(Nasdaq:LNET) -- http://www.lodgenet.com/-- provides media and
connectivity solutions designed to meet the unique needs of
hospitality, healthcare and other guest-based businesses.
LodgeNet Interactive serves more than 1.9 million hotel rooms
worldwide in addition to healthcare facilities throughout the
United States. The Company's services include: Interactive
Television Solutions, Broadband Internet Solutions, Content
Solutions, Professional Solutions and Advertising Media Solutions.
LodgeNet Interactive Corporation owns and operates businesses
under the industry leading brands: LodgeNet, LodgeNetRX, and The
Hotel Networks.
LodgeNet's balance sheet for March 31, 2010, will show $485.07
million in total assets and $542.3 million in total liabilities,
for a $57.22 million stockholders' deficit. At December 31, 2009,
LodgeNet had $70.9 million in stockholders' deficit.
* * *
According to the Troubled Company Reporter on September 30, 2009,
Moody's Investors Service upgraded LodgeNet Interactive
Corporation's speculative grade liquidity rating to SGL-3
(indicating adequate liquidity) from SGL-4 (indicating poor
liquidity) while revising the outlook for all ratings to stable
from negative. Concurrently, Moody's also affirmed LodgeNet's B3
corporate family rating and Caa1 probability of default rating.
LYONDELL CHEMICAL: Expects to Emerge from Chapter 11 Today
----------------------------------------------------------
Judge Robert E. Gerber of the U.S. Bankruptcy Court for the
Southern District of New York issued an order confirming Lyondell
Chemical Company and its debtor affiliates' modified Third Amended
Joint Plan of Reorganization on April 23, 2010.
Judge Gerber held that the Plan satisfied confirmation
requirements of Section 1129 of the Bankruptcy Code:
(1) The Plan complies with the applicable provisions of the
Bankruptcy Code, thereby satisfying Section 1129(a)(1).
In addition to the Administrative Expenses and Priority
Tax Claims, which need not be classified, the Plan
designates 14 Classes of Claims and Equity Interests.
Valid business, factual, and legal reasons exist for
separately classifying the various Classes of Claims and
Equity Interests created under the Plan, and those Classes
do not unfairly discriminate between holders of Claims and
Equity Interests. Thus, the Plan satisfies Sections 1122
and 1123(a)(1) of the Bankruptcy Code.
The Plan also incorporates, among others (i) the
implementation of the global restructuring transactions,
including an enforcement sale and North American
restructuring transactions; (ii) the establishment and
funding of the Millennium Custodial Trust, the
Environmental Custodial Trust, the Litigation Trust and
the Creditor Trust; and (iii) the raising of additional
capital through the equity rights offering and Exit
Facility, which provisions are appropriate and necessary
for the financial restructuring of the global
LyondellBasell enterprise and its post-emergence efficient
Operations.
(2) The Plan complies with Section 1129(a)(2). Specifically,
each Debtors are eligible debtors under Section 109 of
the Bankruptcy Code. The Debtors have also complied with
applicable provisions of the Bankruptcy Code, the
Bankruptcy Rules, and the Disclosure Statement Order in
transmitting the Plan, the Disclosure Statement, the
Ballots or Notice of Non-Voting Status and related
documents in soliciting and tabulating votes on the Plan.
(3) The Plan has been proposed in good faith and not by any
means forbidden by law, thus satisfying Section
1129(a)(3). The Plan was proposed with the legitimate and
honest purpose of maximizing the value of the Debtors'
estates and to effectuate a successful reorganization of
the Debtors.
(4) Any payment made or to be made by any of the Debtors for
services or for costs and expenses in or in connection
with their Chapter 11 cases, or in connection with the
Plan and incident to the Chapter 11 Cases, has been
approved by, or is subject to the approval of, the Court
as reasonable, thus satisfying Section 1129(a)(4).
(5) The Plan complies with Section 1129(a)(5). The identity
and affiliations of the persons proposed to serve as the
initial directors and officers of the Reorganized Debtors
on the effective date of the Plan have been fully
disclosed, and the appointment to or continuation in those
offices of persons is consistent with the interests of
holders of Claims against and Equity Interests in the
Debtors and with public policy.
Gerald A. O'Brien, the vice president deputy general
counsel of Lyondell also disclosed in a declaration that
in addition to the four previously disclosed initial
members of the Supervisory Board of LyondellBasell '
Industries N.V., Marvin O. Schlanger will also serve as an
initial director of New Topco and four independent members
of the initial Supervisory Board will be selected and
appointed after the effective date of the plan. Mr.
O'Brien also cited the compensation expected to be paid to
each of the top five executive officers of New Topco on
the Plan Effective Date:
2010 Target
Base Bonus Other Employment
Name Salary Percentage Compensation Pact
---- ------ ----------- ------------ ----------
Jim Gallogly $1,500,000 100% of base Medium Term Yes
Salary Incentive Plan;
Long-Term
Incentive Plan
C. Kent 700,000 170% of base N/A No
Potter salary
Craig Glidden 524,550 80% of base Medium Term Yes
Salary Incentive Plan;
Long-Term Incentive
Plan
Kevin Brown 400,000 75% of base Medium Term Yes
Salary Incentive Plan;
Long-Term Incentive
Plan
Anton de 534,953 75% of base Management Yes
Vries salary Incentive Plan;
Medium Term
Incentive Plan;
Long-Term
Incentive Plan
(6) The Debtors do not charge rates subject to regulation by a
governmental commission. Thus, Section 1129(a)(6) is
satisfied.
(7) The Plan satisfies Section 1129(a)(7). The liquidation
analysis provided in the Disclosure Statement, the Plan
Declarations (i) is persuasive and credible, (ii) has not
been controverted by other evidence, and (iii) establishes
that each holder of an impaired Claim or Equity Interest
will receive or retain under the Plan, on account of that
Claim or Equity Interest, property of a value as of the
Effective Date that is not less than the amount that the
holder would receive or retain if the Debtors were
liquidated under Chapter 7 of the Bankruptcy Code on that
date.
Specifically, Michael J. Remsha, managing director and
vice president at American Appraisal Associates, Inc.;
Meade A. Monger, managing director of AlixPartners, LLP;
and Daniel A. Celentano, senior managing director at
Evercore Partners, Inc. filed declarations in support of
confirmation of the Plan.
Based on an appraisal made by American Appraisal, Mr.
Remsha disclosed that as of April 1, 2010, the aggregate
liquidation value in place of certain assets of LBI is
$3,695,950,000. A full-text copy of the Appraisal Report
is available for free at:
http://bankrupt.com/misc/Lyondell_AppraisalReport.pdf
In light of the Liquidation Analysis, Mr. Monger stated
that for each Class of Claims or Interests under the Plan,
liquidation under Chapter 7 of the Bankruptcy Code would
yield recoveries that are no better than -- and, in may
cases, worse than -- the recoveries available under the
Plan. He also said the Millennium Custodial Trust and the
Schedule III Debtors as well as the Environmental
Custodial Trust will have the ability to meet their
obligations under the Plan.
Mr. Celentano, in his declaration, disclosed that the
Debtors' Five Year Projections indicate that the
Reorganized Debtors will have sufficient liquidity to meet
their obligations under the Plan. For the Debtors' to
make the Effective Date Payments, sufficient funds will be
available from these sources: (i) cash on hand provided
from operations of LyondellBasell's business; (ii) the
Exit Facility in the aggregate amount of $5.0 billion;
(iii) the Replacement Euro Securitization; and (iv) about
$2.8 billion from the Rights Offering Proceeds. These
sources of funds exceed the amount of the Effective Date
Payments and thus should enable the Debtors to fulfill the
Effective Date payment condition, he maintained. A full-
text copy of the Valuation Report is available for free
at http://bankrupt.com/misc/Lyondell_ValuationReport.pdf
(8) Financial Balloting Group LLC submitted to the Court on
April 22, 2010, a tabulation of votes received for the
Debtors' Third Amended Plan. Prior to filing the April 22
Report, FBG filed an initial vote tabulation report on
April 20, which disclosed that about 213 claim classes
were entitled to vote on the Amended Plan. The April 22
Report, on the other hand, clarified that 258 classes were
entitled to vote on the Plan and not 213.
According to the April 22 Report, a summary of the
tabulation results for Lyondell Chemical Company's Plan
shows:
# of Ballots # of Ballots Amount Amount
Accepting Rejecting Accepting Rejecting
Description/ (% of Num. (% of Num. (% of Amt. (% of Amt.
Class Voted) Voted) Voted) Voted)
------------ ------------ ----------- ---------- ----------
Lyondell
Chemical
Company
DIP Roll-Up
Claims 447 0 $2,843,135,826 $0
Class 3 (100.00%) (0.00%) (100.00%) (0.00%)
Lyondell
Chemical
Company
Senior
Secured
Claims 807 3 $9,070,454,446 $119,404
Class 4 (99.63%) (0.37%) (100.00%) (0.00%)
Lyondell
Chemical
Company
Bridge Loan
Claims 12 0 $6,631,748,773 $0
Class 5 (100.00%) (0.00%) (100.00%) (0.00%)
Lyondell
Chemical
Company
General
Unsecured Claims
Against
Non-Schedule III
Debtors 2,018 36 $9,247,712,846 $1,357,902
Class 7-A (98.25%) (1.75%) (99.99%) (0.01%)
Lyondell
Chemical
Company
2015 Notes
Claim 129 2 $1,079,513,471 $3,174,479
Class 8 (98.47%) (1.53%) (99.71%) (0.29%)
Summaries of tabulation of votes for the debtor affiliates
of Lyondell are available for free at:
http://bankrupt.com/misc/Lyondell_Apr20TabulationSumm.pdf
http://bankrupt.com/misc/Lyondell_Apr22TabulationSumm.pdf
FGB says it excluded from the tabulation of votes certain
ballots that were not validly completed, executed and
submitted in accordance with the Solicitation Procedures
Order. A schedule of the Excluded Ballots is available
for free at:
http://bankrupt.com/misc/Lyondell_Apr22ExcludedBallots.pdf
Section 1129(a)(8) is satisfied with respect to (i)
Classes 3, 4, 5, 7-A, 7-C, 7-D and 8 and the MHC Inc.
sub-class of Class 7-B, which have voted to accept the
Plan in accordance with Section 1126(c) of the Bankruptcy
Code; and (ii) Classes 1, 2, 6 and 14 and certain of the
sub-classes of Class 7-B,7 which are not impaired under
the Plan. Section 1129(a)(8) has not been satisfied with
respect to (i) the Millennium Holdings LLC sub-class of
Class 7-B, which has voted to reject the Plan; and (ii)
Classes 9, 10, 11, 12 and 13 and certain of the sub-
classes in Class 7-B, which will not receive or retain any
property under the Plan and thus are deemed to have
rejected the Plan pursuant to Section 1126(g) of the
Bankruptcy Code.
Nevertheless, Judge Gerber found that the Plan is
confirmable because it satisfies Section 1129(b) with
respect to the Rejecting Classes. Judge Gerber found that
the Plan does not discriminate unfairly and is fair and
equitable with respect to the Rejecting Classes as
required by Section 1129(b)(1). Moreover, because Class 3
voted to accept the Plan, the Reorganized Debtors will not
issue any Cram Down Notes and will not enter into any Cram
Down Indenture.
(9) The Plan provides for the treatment of Allowed
Administrative Expenses, Priority Non-Tax Claims, and
Priority Tax Claims, thereby satisfying the requirements
of Section 1129(a)(9).
(10) With respect to each of the Debtors, at least one Class of
Claims that is impaired under the Plan has accepted the
Plan, as determined without including any acceptance of
the Plan by any insider of that Debtor, thus satisfying
Section 1129(a)(10).
(11) The projections contained in the Disclosure Statement and
the Plan Declarations, and all evidence proffered or
adduced at the Confirmation Hearing (i) are credible and
persuasive, (ii) have not been controverted by other
evidence, and (iii) establish that confirmation of the
Plan is not likely to be followed by the liquidation or
need for further financial reorganization of the Debtors
or Reorganized Debtors. The Plan also addresses the
discharge and release of Claims and Liens against Obligor
Non-Debtors, which is a necessary component to the Debtors
emerging from Chapter 11. The Plan, thus, satisfies
Section 1129(a)(11).
(12) The Plan provides that on the Effective Date and thus, as
may be required, the Debtors will pay all fees payable
pursuant to Section 1930 of title 28 of the United States
Code, thus satisfying Section 1129(a)(12).
(13) The Plan satisfies Section 1129(a)(13). The Plan provides
that, except with respect to any retiree benefit that has
been terminated or rejected before the Effective Date, on
and after the Effective Date, pursuant to Section
1129(a)(13), the Reorganized Debtors will continue to pay
all retiree benefits of the Debtors, if any, at the level
established in accordance with Section 1114 of the
Bankruptcy Code at any time before the Confirmation Date,
for the duration of the period for which the Debtors are
obligated to provide those benefits.
(14) The Debtors are not required by a judicial or
administrative order, or by statute, to pay a domestic
support obligation. Thus, Section 1129(a)(14) is
inapplicable to the Debtors' Chapter 11 Cases.
(15) The Debtors are not individuals and thus, Section
1129(a)(15) is inapplicable to their Chapter 11 cases.
(16) The Debtors are each a moneyed, business, or commercial
corporation and thus, Section 1129(a)(16) is inapplicable
to their Chapter 11 Cases.
The Debtors' modified Third Amended Plan was submitted to the
Court on April 23, 2010, to incorporate cumulative technical
modifications filed with the Court on April 19 and 20, 2010.
A full-text copy of the April 23 modified Plan is available for
free at http://bankrupt.com/misc/Lyondell_Apr23ThirdAmPlan.pdf
The modifications to the Plan filed on April 19 and 20, 2010 and
on the record at the April 23, 2010 confirmation hearing
constitute technical changes or constitute changes with respect
to particular Claims by agreement with the holders, and do not
adversely affect or change the treatment of any Claims or Equity
Interests, Judge Gerber found. Thus, pursuant to Rule 3019 of
the Federal Rules of Bankruptcy Procedure, these modifications do
not require additional disclosure under Section 1125 of the
Bankruptcy Code, nor do they require that holders of Claims or
Equity Interests be afforded an opportunity to change previously
cast acceptances or rejections of the Plan, Judge Gerber added.
Exit Facility & Other Provisions
Judge Gerber held that the Exit Facility is an essential element
of the Plan, is critical to the success and feasibility of the
Plan and is necessary and appropriate for the consummation of the
Plan. Judge Gerber thus authorized the Debtors and the
Reorganized Debtors to enter into the Exit Facility and execute
all documents relating to the Exit Facility.
If, after the Effective Date, the Confirmation Order is vacated
or reversed and, at the time the Exit Facility is in effect, then
as applicable, the vacatur or reversal of the Confirmation Order
will not adversely affect the validity or priority of any
obligations incurred by the Reorganized Debtors arising in
connection with the Exit Financing or any liens, guaranties or
claims granted the Exit Facility Lenders pursuant to the Exit
Facility.
Judge Gerber also approved the issuance of the Class B Shares to
LeverageSource (Delaware), LLC, an affiliate of Apollo Management
VII, L.P., AI LBI Investment, LLC, an affiliate of Access
Industries, Inc., and Ares Corporate Opportunities Fund III, L.P.
as rights offering sponsors and exercising claimants as part of
the Rights Offering and pursuant to the Equity Commitment
Agreement.
On or before the Effective Date, the Debtors and their affiliates
are authorized to and will effectuate the transactions set forth
in the Plan constituting the Global Restructuring, Judge Gerber
ruled. Judge Gerber also found that the valuation analysis
contained in the Disclosure Statement and the implied
reorganization equity value is reasonable and undisputed. Judge
Gerber said that excluded obligations under a December 20, 2007
Senior Secured Credit Facility and Bridge Loan Facility will
survive the occurrence of the Effective Date and will not be
discharged or released pursuant to the Plan or the Confirmation
Order.
The persons proposed to serve as members of the New Topco
Supervisory Board will constitute LyondellBasell Industries N.V.
or New Topco's Supervisory Board; appointment of any subsequent
members of the New Topco Supervisory Board will be in accordance
with the Plan Supplement, Judge Gerber said.
The Equity Compensation Plans and any grants and awards and award
agreements made or entered into those plans will be binding and
effective on the Effective Date, Judge Gerber said. Similarly,
the agreements relating to formation of the litigation trust, the
creditor trust and cooperation agreement are deemed approved,
Judge Gerber said. The Debtors and Schedule III Debtors and any
other party will also take all actions to form and fund the
Millennium Custodial Trust and the Environmental Custodial Trust.
The applicable subsidiary of Millennium Chemicals Inc. against
which the holders of the Millennium Notes Claims are entitled to
a contractual right is deemed to be, Millennium Americas Inc.,
and any guarantee claim that the holders of the Millennium Notes
may have against MCI will be extinguished pursuant to the Plan,
Judge Gerber stated.
Judge Gerber further held that the principal purpose of the Plan
is not the avoidance of taxes or the avoidance of the application
of Section 5 of the Securities Act of 1933.
A full-text copy of the Confirmation Order dated April 23, 2010,
is available for free at:
http://bankrupt.com/misc/Lyondell_Apr23ConfirmationOrd.pdf
Debtors Want to Expedite Emergence
The Debtors ask the Court to shorten the 14-day stay period
pursuant to Rule 3020(e) of the Federal Rules of Bankruptcy
Procedure, which provides that an order confirming a plan is
stayed until the expiration of 14 days after entry of the order.
The Debtors' request is in light of their aim that the effective
date of their Plan occur at the end of a month, or more
specifically by April 30, 2010, explains George A. Davis, Esq.,
at Cadwalader, Wickersham & Taft LLP, in New York.
Mr. Davis said a mid-month closing would require an expenditure
of about $5 million to $8 million to reconcile books and records
and effectively close the books twice within a single month. A
mid-month closing also brings significant risk of further delays
in the Chapter 11 process ?- the longer the Debtors stay in
bankruptcy, the longer there is a possibility that something will
change and make it more difficult for the Debtors to exit
bankruptcy, he asserted. Under the Debtors' DIP Financing, the
Debtors incur expenses of $40 million to $60 million per month
for staying in Chapter 11, he pointed out. To achieve a month-
end closing, the Debtors need to be in a position to start the
closing on their equity and debt financings and be able to move
money as part of the closing starting April 29, 2010, he added.
About Lyondell Chemical
LyondellBasell Industries is one of the world's largest polymers,
petrochemicals and fuels companies. It is the global leader in
polyolefins technology, production and marketing; a pioneer in
propylene oxide and derivatives; and a significant producer of
fuels and refined products, including biofuels. Through research
and development, LyondellBasell develops innovative materials and
technologies that deliver exceptional customer value and products
that improve quality of life for people around the world.
Headquartered in The Netherlands, LyondellBasell --
http://www.lyondellbasell.com/-- is privately owned by Access
Industries.
Basell AF and Lyondell Chemical Company merged operations in 2007
to form LyondellBasell Industries, the world's third largest
independent chemical company. LyondellBasell became saddled with
debt as part of the US$12.7 billion merger. On January 6, 2009,
LyondellBasell Industries' U.S. operations and one of its European
holding companies -- Basell Germany Holdings GmbH -- filed
voluntary petitions to reorganize under Chapter 11 of the U.S.
Bankruptcy Code to facilitate a restructuring of the company's
debts. The case is In re Lyondell Chemical Company, et al.,
Bankr. S.D.N.Y. Lead Case No. 09-10023). Seventy-nine Lyondell
entities, including Equistar Chemicals, LP, Lyondell Chemical
Company, Millennium Chemicals Inc., and Wyatt Industries, Inc.
filed for Chapter 11. In May 2009, one of the cases was dismissed
-- Case No. 09-10068 -- because it is duplicative of Case No. 09-
10040 relating to Debtor Glidden Latin America Holdings.
The Hon. Robert E. Gerber presides over the case. Deryck A.
Palmer, Esq., at Cadwalader, Wickersham & Taft LLP, in New York,
serves as the Debtors' bankruptcy counsel. Evercore Partners
serves as financial advisors, and Alix Partners and its subsidiary
AP Services LLC, serves as restructuring advisors. AlixPartners'
Kevin M. McShea acts as the Debtors' Chief Restructuring Officer.
Clifford Chance LLP serves as restructuring advisors to the
European entities. Lyondell Chemical estimated that consolidated
assets total US$27.12 billion and debts total US$19.34 billion as
of the bankruptcy filing date.
Lyondell has obtained approximately US$8 billion in DIP financing
to fund continuing operations. The DIP financing includes two
credit agreements: a US$6.5 billion term loan, which comprises a
US$3.25 billion in new loans and a US$3.25 billion roll-up of
existing loans; and a US$1.57 billion asset-backed lending
facility.
LyondellBasell Industries AF S.C.A. and another affiliate were
voluntarily added to Lyondell Chemical's reorganization filing
under Chapter 11 on April 24, 2009, in order to seek protection
against claims by certain financial and U.S. trade creditors. On
May 8, 2009, LyondellBasell Industries added 13 non-operating
entities to Lyondell Chemical Company's reorganization filing
under Chapter 11 of the U.S. Bankruptcy Code. All of the entities
are U.S. companies and were added to the original Chapter 11
filing for administrative purposes.
Bankruptcy Creditors' Service, Inc., publishes Lyondell Bankruptcy
News. The newsletter tracks the Chapter 11 proceeding undertaken
by Lyondell Chemical Company and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
LYONDELL CHEMICAL: Proposes to Set Distribution Reserve Amount
--------------------------------------------------------------
Under Lyondell Chemical's Third Amended Joint Plan of
Reorganization and the Lender Litigation Settlement, a reserve is
to be established from the $450 million in cash and reorganized
equity being made available to general unsecured creditors of
those Debtors party to the Settlement -- Obligor Debtors -- whose
claims have not been resolved when the Plan becomes effective.
The Distribution Reserve will permit interim distributions to
holders of allowed general unsecured claims against the Obligor
Debtors from the Fixed Settlement Consideration on the effective
date of the Plan, but before all unsecured claims become allowed
claims, the holders of those claims will receive the same
proportionate distribution as was made to holders of allowed
claims as of the Effective Date, Christopher R. Mirick, Esq., at
Cadwalader, Wickersham & Taft LLP, in New York, says.
By this motion, the Debtors seek to establish the Distribution
Reserve of about $157.4 million on account of currently disputed
claims and distribute the balance of the $450 million in Fixed
Settlement Consideration in accordance with the Plan and
Settlement on the Effective Date.
The $157.4 million represents the amount that exceeds by ten
percent (10%) the high end of the Debtors' estimate of the total
amount of Fixed Settlement Consideration that will be due to be
distributed to holders of disputed general unsecured claims
against the Obligor Debtors once they become allowed claims and
provide for a proportionate distribution of Fixed Settlement
Consideration among all holders of allowed general unsecured
claims against Obligor Debtors.
The Debtors further estimate that, as of the Effective Date,
there will be about $1.96 billion in allowed general unsecured
claims against Obligor Debtors, including the funded debt claims.
The Debtors also estimate that, as of the Effective Date, the
remaining unresolved claims asserted against the Obligor Debtors
will be allowed in a range of between $413.5 million and
$913.9 million. In total, the Debtors estimate that general
unsecured claims against Obligor Debtors will be allowed in the
range of approximately $2.37 billion to $2.87 billion.
The Debtors' proposal to set the Distribution Reserve at 10%
provides protection against the possibility that the Debtors'
estimates are too low and is sufficiently conservative to
adequately protect holders of Disputed Claims, while allowing
distributions of Fixed Settlement Consideration to be made to the
holders of allowed claims as of the Effective Date, Mr. Mirick
points out. Moreover, under the Settlement and the Plan, if
there is a short-fall in the Distribution Reserve, the
distributions from the Litigation Trust will be used to cure that
deficiency, he notes. Establishing the Distribution Reserve
Amount is reasonable and will not prejudice any Plan
constituents, he maintains.
The Court will consider the Debtors' Motion on April 28, 2010.
Creditors Committee Supports
Debtors' Request
Upon review, the Official Committee of Unsecured Creditors
believes that the Debtors' decision to establish the Distribution
Reserve Amount is prudent and reasonably designed to protect the
rights of holders of disputed claims to receive the same
proportionate distribution as was made to holders of allowed
claims as of the Effective Date.
About Lyondell Chemical
LyondellBasell Industries is one of the world's largest polymers,
petrochemicals and fuels companies. It is the global leader in
polyolefins technology, production and marketing; a pioneer in
propylene oxide and derivatives; and a significant producer of
fuels and refined products, including biofuels. Through research
and development, LyondellBasell develops innovative materials and
technologies that deliver exceptional customer value and products
that improve quality of life for people around the world.
Headquartered in The Netherlands, LyondellBasell --
http://www.lyondellbasell.com/-- is privately owned by Access
Industries.
Basell AF and Lyondell Chemical Company merged operations in 2007
to form LyondellBasell Industries, the world's third largest
independent chemical company. LyondellBasell became saddled with
debt as part of the US$12.7 billion merger. On January 6, 2009,
LyondellBasell Industries' U.S. operations and one of its European
holding companies -- Basell Germany Holdings GmbH -- filed
voluntary petitions to reorganize under Chapter 11 of the U.S.
Bankruptcy Code to facilitate a restructuring of the company's
debts. The case is In re Lyondell Chemical Company, et al.,
Bankr. S.D.N.Y. Lead Case No. 09-10023). Seventy-nine Lyondell
entities, including Equistar Chemicals, LP, Lyondell Chemical
Company, Millennium Chemicals Inc., and Wyatt Industries, Inc.
filed for Chapter 11. In May 2009, one of the cases was dismissed
-- Case No. 09-10068 -- because it is duplicative of Case No. 09-
10040 relating to Debtor Glidden Latin America Holdings.
The Hon. Robert E. Gerber presides over the case. Deryck A.
Palmer, Esq., at Cadwalader, Wickersham & Taft LLP, in New York,
serves as the Debtors' bankruptcy counsel. Evercore Partners
serves as financial advisors, and Alix Partners and its subsidiary
AP Services LLC, serves as restructuring advisors. AlixPartners'
Kevin M. McShea acts as the Debtors' Chief Restructuring Officer.
Clifford Chance LLP serves as restructuring advisors to the
European entities. Lyondell Chemical estimated that consolidated
assets total US$27.12 billion and debts total US$19.34 billion as
of the bankruptcy filing date.
Lyondell has obtained approximately US$8 billion in DIP financing
to fund continuing operations. The DIP financing includes two
credit agreements: a US$6.5 billion term loan, which comprises a
US$3.25 billion in new loans and a US$3.25 billion roll-up of
existing loans; and a US$1.57 billion asset-backed lending
facility.
LyondellBasell Industries AF S.C.A. and another affiliate were
voluntarily added to Lyondell Chemical's reorganization filing
under Chapter 11 on April 24, 2009, in order to seek protection
against claims by certain financial and U.S. trade creditors. On
May 8, 2009, LyondellBasell Industries added 13 non-operating
entities to Lyondell Chemical Company's reorganization filing
under Chapter 11 of the U.S. Bankruptcy Code. All of the entities
are U.S. companies and were added to the original Chapter 11
filing for administrative purposes.
Bankruptcy Creditors' Service, Inc., publishes Lyondell Bankruptcy
News. The newsletter tracks the Chapter 11 proceeding undertaken
by Lyondell Chemical Company and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
LYONDELL CHEMICAL: US Environmental Deal Gets Nod Over Objections
-----------------------------------------------------------------
Lyondell Chemical Co. and its units received permission from the
U.S. Bankruptcy Court's permission to enter into a settlement
agreement with the United States of America; certain state
environmental agencies from the states of California, Illinois,
Maryland, Michigan, North Carolina, Pennsylvania and Texas; and a
trustee under the Environmental Custodial Trust.
Christopher R. Mirick, Esq., at Cadwalader, Wickersham & Taft LLP,
in New York, tells the Court that the Settlement Agreement
resolves multiple environmental claims and liabilities asserted by
the federal and state governments totaling $7 billion. He reminds
the Court that the federal and state government agencies filed
proofs of claim against certain of the Debtors asserting various
environmental claims and liabilities totaling $5.5 billion.
The
asserted Claims are:
Agency Claim No. Claim Amt.
------ --------- ----------
California Regional Water Quality 12788, 12789, 12790, -
Control Board of the Los Angeles 12790, 12791, 12792,
Region -- LA Regional Board -- 12793, 12974, 12795
California State Water Resources 12796, 12797, 12798,
Control Board -- California 12799, 12800, 12801,
State Board -- 12802, 12803
Michigan Department of Natural 12483 $360,296,257
Resources and the Environment to $408,696,257
and the Michigan Natural
Resource Trustees -- Settling
Michigan Agencies --
U.S. Environmental Protection 11940, 11941, 12968,
Agency, the U.S. Department of 12969, 12970, 12971,
the Interior and the National 12972, 12973, 12974,
Oceanic and Atmospheric 279491
Administration -- Settling
Federal Agencies --
California Department of Toxic 12866, 12873 $24,876,506
Substance Control -- California
DTSC -- 12867 $10,890,000
North Carolina Division of 4430 $6,495,010
Waste Management -- NCDWM --
Texas Commission on Environmental 8183 -
Quality -- TCEQ --
Illinois Environmental Protection 13031 -
Agency and the Illinois
Department of Natural Resources --
State of Illinois Natural Resources
Trustees --
The Debtors previously objected to the Claims. The U.S., the LA
Regional Board, the California State Board, and the California
DTSC asked the U.S. District Court for the Southern District of
New York to withdraw the reference to the Bankruptcy Court as to
the Objections. In March 2010, the District Court denied the
Motion to Withdraw the Reference as moot upon suggestion of
settlement, but provided that any party to the Motion to Withdraw
the Reference could restore the matter to the District Court's
calendar within 60 days.
Pursuant to the Debtors' Third Amended Joint Plan of
Reorganization, the Environmental Custodial Trust is created to
own certain real property, free and clear of all liens for the
benefit of the U.S.; the California Regional Water Quality
Control Board, Central Valley Region; the State of Illinois;
EIPA; the Maryland Department of the Environment; MDNRE; NCDWM;
the Department of Environmental Protection of the Commonwealth of
Pennsylvania; and the TCEQ.
The Transferred Real Properties consist of these parcels: the
Allied Paper Mill property in Michigan; the Beaver Valley
property in Pennsylvania; the Bully Hill; Rising Star and
Excelsior Mine properties in California; the Charlotte property
in North Carolina; the Gypsum Pile property in Illinois; the
Saint Helena property in Maryland; and the Turtle Bayou property
in Texas.
The salient terms of the Settlement Agreement are:
(A) The allowance as general unsecured claims of the claims
filed by the:
-- the U.S. on behalf of the EPA, aggregating
$1,011,144,336;
-- the U.S. on behalf of the "Federal Trustees,"
aggregating $124,731,125;
-- the U.S. on behalf of the DOI, aggregating $20,529;
-- California DTSC, aggregating $7,000,000;
-- California Central Valley Regional Board, aggregating
$1,000,000;
-- LA Regional Board, aggregating $5,000,000;
-- State of Illinois Natural Resource Trustees, for
$955,161; and
-- Settling Michigan Agencies for $30,067,687.
(B) The allocation of the funds to be transferred to the
Environmental Custodial Trust pursuant to an Environmental
Custodial Trust Agreement:
* $53,721,850 for the Allied Paper Mill Transferred Real
Property;
* $2,000,000 for the Beaver Valley Transferred Real
Property;
* $8,000,000 for the Bully Hill, Rising Star, and
Excelsior Mines Transferred Real Properties;
* $5,300,000 for the Charlotte Transferred Real Property;
* $1,100,000 for the Gypsum Pile Transferred Real
Property;
* $10,000,000 for the Saint Helena Transferred Real
Property;
* $6,800,000 for the Turtle Bayou Transferred Real
Property; and
* $21,500,000 for administrative expenses of the
Environmental Custodial Trust;
(C) Cash payments and distributions to the:
(a) United States on behalf of the EPA, aggregating
$53,628,150;
(b) California DTSC, for $4,000,000;
(c) LA Regional Board, for 3,500,000; and
(d) California Central Valley Regional Board, for $500,000
to resolve Debtors' injunctive obligations as alleged
by the Settling Agencies.
(D) The creation of procedures for the determination of
liability and the satisfaction of any claims against the
Debtors that may arise out of certain additional sites and
reserved additional sites. Additional Sites are sites not
owned or operated by a Debtor that were listed on the
Debtors' Statements of Financial Affairs, but were not the
subject of a proof of claim filed by the relevant
government agency.
(E) The payment to the United States, the Settling California
Agencies, the State of Illinois Natural Resource Trustees,
and the Settling Michigan Agencies, as applicable, of 70%
of any insurance proceeds that the Debtors may recover on
account of any liquidated site exceeding the Debtors'
costs of pursuing those insurance proceeds.
(F) The resolution and satisfaction of the Debtors'
obligations to perform work pursuant to any outstanding
Consent Decree, Unilateral Administrative Order, Agreed
Order, Administrative Order on Consent, or permit
regarding any of the Transferred Real Properties and the
removal of the Debtors as a party to those orders,
decrees, or permits;
(G) The withdrawal of the Objections to the U.S., California
DTSC, the California State Board, and the LA Regional
Board Proofs of Claim;
(H) The withdrawal of the U.S. and the Settling
California Agencies' Motion to Withdraw the Reference.
(I) The covenant by the EPA, the States, Federal Trustees,
TCEQ, not to file a civil action or to take any
administrative or other civil action against the Debtors
or the "Custodial Trust Parties" under Section 106 or 107
of the Comprehensive Environmental Response, Compensation,
and Liability Act, and Section 7002 or 7003 of the
Resource Conservation and Recovery Act, or any similar
state laws with respect to each of the Liquidated Sites
and Transferred Real Properties.
(J) The covenant not to sue and agreement not to assert or
pursue any claims or causes of action by the Debtors and
the Environmental Custodial Trust Trustee against the
U.S. and the States with respect to the Liquidated Sites
or Transferred Real Properties and the cash payments set
forth in the Settlement Agreement.
(K) The protection of the Debtors and the Custodial Trust
Parties from contribution actions or claims as provided by
Section 113(f)(2) of CERCLA.
(L) The release of all financial assurance maintained by the
Debtors at Liquidated Sites or Transferred Real
Properties, within 30 days after the Debtors transfer all
funds pursuant to the Settlement Agreement.
Various parties objected to the settlement.
U.S. Senators Carl Levin and Debbie Stabenow and Representative
Fred Upton wrote to the U.S. Department of Justice, asserting that
the amount of $162 million under the Settlement Agreement falls
short of $5 billion the U.S. Environmental Protection Agency has
required Lyondell to pay to remediate its environmental
obligations, according to Congressional Documents and
Publications/Contentworks.
Specifically, the Lawmakers are asking how a $103 million
settlement to fund for Lyondell's share of the clean up costs for
the Kalamazoo River Superfund site was reached. The Lawmakers'
concern is in light of Lyondell's estimates set forth in court
documents that its share of cleanup costs could be as high as
2.5 billion.
"While we understand that bankruptcy proceedings often leave
creditors with a fraction of what they are owed by the debtor, we
find it unacceptable that a company that will emerge from
bankruptcy as a profitable entity can only pay pennies on the
dollar of its obligation to clean up the Kalamazoo site," the
Lawmakers say in the letter.
The Lawmakers allege that the bankruptcy proceedings of Lyondell
have derailed the cleanup process, including thousands of hours of
meeting to identify an acceptable cleanup plan.
If the Department cannot justify that the Settlement Agreement is
in the public's best interest, the Lawmakers ask that the comment
period and petition be delayed so those issues can be resolved.
Debtors Respond to Objections
None of the Objections dispute that the Settlement Agreement is in
the best interests of the Debtors' estates and, thus, should be
approved by the Court, Christopher R. Mirick, Esq., at Cadwalader,
Wickersham & Taft LLP, in New York, counsel to the Debtors, points
out.
Instead, he asserts, the Objections raise irrelevant and ancillary
process issue.
Specifically, with respect to Georgia-Pacific, LLC's and
Weyerhaeuser's contentions that the U.S. was obliged under law to
submit the Settlement Agreement for a 30-day public comment are
refuted by the plain language of the CERCLA sections they cite,
and fail to take into account previous bankruptcy settlements for
which the Department of Justice has provided notice and comment
periods far shorter than 30 days, Mr. Mirick argues. In
addition, he says Weyerhaeuser's request for clarifications is
unjustified and unnecessary. To the extent that Weyerhaeuser has
rights under non-bankruptcy law with respect to the matters
addressed in the Settlement Agreement, it is free to invoke those
rights when a justiciable controversy arises, he notes. That
time has not arrived, and the Court should not entertain
Weyerhaeuser's request for clarifications, he stresses.
As to the Insurers, they erroneously contend that the Settlement
Agreement prejudices their rights with respect to certain
insurance policies held by the Debtors, Mr. Mirick complains.
However, the Debtors intend the Settlement Agreement to be
insurance neutral and entirely consistent with the Third Amended
Joint Plan of Reorganization, he asserts. To resolve any
ambiguity in this respect, the Debtors propose to include a
language in the proposed order to the Settlement Agreement to
state that nothing in the Settlement Agreement Motion or the
Approval Order amends or limits Section 9.5 of the Plan. Section
9.5 of the Plan deals with the preservation of rights of the
insurers.
The Debtors thus ask the Court to overrule the Objections and
approve the Settlement Agreement.
U.S. Insists on Settlement
Based on public comments received and a public meeting held on
April 20, 2010 in Kalamazoo, Michigan, the United States of
America, on behalf of the EPA, the U.S. Department of the Interior
and the National Oceanic and Atmospheric Administration maintains
that the Settlement Agreement is fair, reasonable and consistent
with environmental law.
Pierre G. Armand, Esq., assistant U.S. attorney for the Southern
District of New York, in New York, argues that the Kalamazoo
commenters fail to take into consideration the significant risk
that the U.S. would recover less for the Kalamazoo Site if the
Settlement Agreement is not to be approved. Thus, the $1 billion
allowed general unsecured claim is fair and reasonable because it
takes into account the total past and estimated future response
costs and natural resources damages with respect to the non-
debtor-owned portions of the Kalamazoo Site, the Debtor's
equitable share or allocation of liability, as well as bankruptcy
and litigation risk considerations, Mr. Armand asserts.
The U.S. will also be receiving a substantial cash payment of
about $49.5 million to resolve litigation concerning Debtor
Millennium Holdings, LLC's obligation to comply with prepetition
work orders at non-debtor-owned portions of the Kalamazoo Site,
Mr. Armand discloses. The Debtors also must pay more than
$53.6 million cash to the Environmental Custodial Trust towards
the cleanup and restoration of Kalamazoo OU1, which is owned by a
subsidiary of MHLLC, he notes.
Contrary to suggestions that cleanup of the Kalamazoo Site has
been derailed, the EPA is committed to a cleanup of the Kalamazoo
Site that is protective of human health and the environment,
irrespective of the net cash allotted for the Kalamazoo Site in
the Settlement Agreement, Mr. Armand clarifies. To the extent
that members of the public are dissatisfied with any proposed
remedy ultimately selected by EPA for the Kalamazoo Site, those
concerns can be raised during the administrative process after
the proposed remedy is presented to the public in a proposed
plan, he says.
The U.S. also insists that the 15-day comment period does not
render the Settlement Agreement inappropriate, inadequate or
improper.
Court Approves Settlement
Judge Gerber authorized the Debtors' entry into the Settlement
Agreement with the Settling State Environmental Parties. Judge
Gerber also authorized the selection of Le Petomane XXIII, Inc. as
trustee under the Environmental Custodial Trust.
The Debtors' objections to the United States of America and
Settling State Environmental Entities' proofs of claim and the
U.S.'s Motion to Withdraw the Reference are deemed withdrawn with
respect to the causes of action, claims, and defenses asserted in
those pleadings, without costs of attorney's fees to any party.
Nothing amends or limits Section 9.5 of the Plan, Judge Gerber
ruled.
The Court will retain jurisdiction to hear and determine all
matters arising from or relating to the implementation of the
Court's ruling, including any disputes arising under the
Settlement Agreement and the Environmental Custodial Trust
agreement, Judge Gerber said.
David Harpole, spokesperson for Lyondell, told Bloomberg News that
without a settlement on the claims, the company would have been
forced to liquidate. "It provides a fair and equitable resolution
of claims against the entities in bankruptcy as well as provides
remediation funding that otherwise would not exist," Mr. Harpole
was quoted by Bloomberg as saying.
About Lyondell Chemical
LyondellBasell Industries is one of the world's largest polymers,
petrochemicals and fuels companies. It is the global leader in
polyolefins technology, production and marketing; a pioneer in
propylene oxide and derivatives; and a significant producer of
fuels and refined products, including biofuels. Through research
and development, LyondellBasell develops innovative materials and
technologies that deliver exceptional customer value and products
that improve quality of life for people around the world.
Headquartered in The Netherlands, LyondellBasell --
http://www.lyondellbasell.com/-- is privately owned by Access
Industries.
Basell AF and Lyondell Chemical Company merged operations in 2007
to form LyondellBasell Industries, the world's third largest
independent chemical company. LyondellBasell became saddled with
debt as part of the US$12.7 billion merger. On January 6, 2009,
LyondellBasell Industries' U.S. operations and one of its European
holding companies -- Basell Germany Holdings GmbH -- filed
voluntary petitions to reorganize under Chapter 11 of the U.S.
Bankruptcy Code to facilitate a restructuring of the company's
debts. The case is In re Lyondell Chemical Company, et al.,
Bankr. S.D.N.Y. Lead Case No. 09-10023). Seventy-nine Lyondell
entities, including Equistar Chemicals, LP, Lyondell Chemical
Company, Millennium Chemicals Inc., and Wyatt Industries, Inc.
filed for Chapter 11. In May 2009, one of the cases was dismissed
-- Case No. 09-10068 -- because it is duplicative of Case No. 09-
10040 relating to Debtor Glidden Latin America Holdings.
The Hon. Robert E. Gerber presides over the case. Deryck A.
Palmer, Esq., at Cadwalader, Wickersham & Taft LLP, in New York,
serves as the Debtors' bankruptcy counsel. Evercore Partners
serves as financial advisors, and Alix Partners and its subsidiary
AP Services LLC, serves as restructuring advisors. AlixPartners'
Kevin M. McShea acts as the Debtors' Chief Restructuring Officer.
Clifford Chance LLP serves as restructuring advisors to the
European entities. Lyondell Chemical estimated that consolidated
assets total US$27.12 billion and debts total US$19.34 billion as
of the bankruptcy filing date.
Lyondell has obtained approximately US$8 billion in DIP financing
to fund continuing operations. The DIP financing includes two
credit agreements: a US$6.5 billion term loan, which comprises a
US$3.25 billion in new loans and a US$3.25 billion roll-up of
existing loans; and a US$1.57 billion asset-backed lending
facility.
LyondellBasell Industries AF S.C.A. and another affiliate were
voluntarily added to Lyondell Chemical's reorganization filing
under Chapter 11 on April 24, 2009, in order to seek protection
against claims by certain financial and U.S. trade creditors. On
May 8, 2009, LyondellBasell Industries added 13 non-operating
entities to Lyondell Chemical Company's reorganization filing
under Chapter 11 of the U.S. Bankruptcy Code. All of the entities
are U.S. companies and were added to the original Chapter 11
filing for administrative purposes.
Bankruptcy Creditors' Service, Inc., publishes Lyondell Bankruptcy
News. The newsletter tracks the Chapter 11 proceeding undertaken
by Lyondell Chemical Company and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
MAHALO ENERGY: Consummates Plan to Cede Control to Ableco
---------------------------------------------------------
Bill Rochelle at Bloomberg News reports that Mahalo Energy (USA)
Inc., now known as Redbud E&P LLC, implemented a reorganization
plan where secured lender Ableco Finance LLC took ownership of the
reorganized company. The Plan restructured a $35.4 million
secured loan owing to Wells Fargo Foothill LLC. For its
$38 million secured claim, Ableco received stock in the
reorganized company plus a restructured $25.5 million loan.
About Mahalo Energy (USA) Inc.
Mahalo Energy (USA) Inc. has 300 producing wells in Oklahoma and
60,000 acres of gas-bearing shale formations. Tulsa, Oklahoma-
based Mahalo Energy filed for Chapter 11 on May 21, 2009 (Bankr.
E.D. Okla. Case No. 09-80795). The Debtor filed for Chapter 11
following a default in its secured debt, resulting from increasing
commodity prices and failure to meet targets to overall production
levels.
Stephen W. Elliott, Esq., at Kline, Kline, Elliot & Bryant, PC,
represents the Debtor in its restructuring efforts. The Debtor
listed $10 million to $50 million in assets and $100 million to
$500 million in debts.
MALIBU ASSOCIATES: To Pay Unsecureds in Full Without Interest
-------------------------------------------------------------
Malibu Associates, LLC, filed with the U.S. Bankruptcy Court for
the Central District of California a Disclosure Statement
explaining the proposed Plan of Reorganization.
The Debtors will begin soliciting votes on the Plan following
approval of the adequacy of the information in the Disclosure
Statement.
According to the Disclosure Statement, the Plan provides for the
payment of administrative expenses, priority tax claims, the Class
1 secured claims of the L.A. County Tax Collector, the Class 2
claim (secured claim of the bank but excluding the balloon payment
under Option A, and Class 3 claims (general unsecured claims) from
(i) the cash on hand in the Debtor's equity account at Bank of
America; and (ii) new cash to be contributed by the new members in
an amount sufficient to pay (x) the allowed amount of the claims;
and (y) the amounts budgeted to complete the entitlement process
for the property, in exchange for a 100% ownership interest in the
Reorganized Debtor.
The new members will be:
T&J Investment Partners, LLC
HIX Rubenstein Companies
MPK Development, LLC
The Leone-Pekins Trust
Crankstart Foundation
Third Millenium Trust
RSF, JR., LLC
Dr. David Agus
Under the Plan, all secured claims of Los Angeles Country
Treasurer, and U.S. Bank N.A., will paid in full on the effective
date. General unsecured claims, excluding indemnification claims,
will be paid in full without interest. On the effective date, all
Class 4 interest will be deemed cancelled, terminated,
extinguished and of no further force and effect.
A full-text copy of the Disclosure Statement is available for free
at http://bankrupt.com/misc/MalibuAssociates_DS.pdf
The Debtor proposes a hearing on approval of the Disclosure
Statement on May 24, 2010, at 11:00 a.m., at Courtroom 302,
21041 Burbank Blvd., Woodland Hills, CA 91367.
About Malibu Associates, LLC
Malibu, California-based Malibu Associates, LLC, dba Malibu
Country Club and Malibu Country Club filed for Chapter 11 on
November 3, 2009 (Bankr. C.D. Calif. Case No. No. 09-24625).
Ashleigh A. Danker, Esq., at Kaye Scholer LLP represents the
Debtor in its restructuring effort. According to the schedules,
the Company has assets of $42,853,592, and total debts of
$35,758,538 as of the petition date.
MARK PLANTIER: Case Summary & 11 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Mark Plantier
P.O. Box 10076
Bedford, NH 03110
Bankruptcy Case No.: 10-11887
Chapter 11 Petition Date: April 28, 2010
Court: U.S. Bankruptcy Court
District of New Hampshire (Manchester)
Debtor's Counsel: Robert L. O'Brien, Esq.
O'Brien Law
P.O. Box 357
New Boston, NH 03070-0357
Tel: (603) 459-9965
Fax: (603) 250-0822
E-mail: robjd@mail2firm.com
Estimated Assets: $0 to $50,000
Estimated Debts: $1,000,001 to $10,000,000
A copy of the Debtor's list of 11 largest unsecured creditors
filed together with the petition is available for free at
http://bankrupt.com/misc/nhb10-11887.pdf
The petition was signed by the Debtor.
MARY PALUMBO: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Mary V. Palumbo
fdba Law Office of Mary V. Palumbo
Mercury Direct Funding
7643 Gate Parkway #104-1112
Jacksonville, FL 32256
Bankruptcy Case No.: 10-03542
Chapter 11 Petition Date: April 27, 2010
Court: U.S. Bankruptcy Court
Middle District of Florida (Jacksonville)
Debtor's Counsel: Albert H. Mickler, Esq.
5452 Arlington Expressway
Jacksonville, FL 32211
Tel: (904) 725-0822
E-mail: cmickler_32277@yahoo.com
Estimated Assets: $500,001 to $1,000,000
Estimated Debts: $1,000,001 to $10,000,000
According to the schedules, the Debtor says that assets total
$521,098 while debts total $2,927,537.
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/flmb10-03542.pdf
The petition was signed by the Debtor.
MERIDIAN RESOURCE: Adjourns Shareholders Meet Regarding Merger
--------------------------------------------------------------
The Meridian Resource Corporation has adjourned its special
meeting of shareholders regarding its proposed merger with Alta
Mesa Holdings, LP. The meeting will be reconvened on or before
May 7, 2010, at a time and place to be announced. The record date
for shareholders entitled to vote at the meeting remains
February 8, 2010. Meridian's Board of Directors continues its
recommendation that shareholders vote "for" the proposed merger
with Alta Mesa. Shareholders are encouraged to read Meridian's
definitive proxy materials in their entirety as they provide,
among other things, a detailed discussion of the process that led
to the proposed merger and the reasons behind the Board of
Directors' recommendation that shareholders vote "for" the
proposal to adopt the merger agreement.
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.
MOLL INDUSTRIES: Returns to Chapter 11
--------------------------------------
Moll Industries Inc. filed for Chapter 11 on April 27, 2010
(Bankr. D. Del. Case No. 10-11371). The Company blamed the filing
on a loss of business from Whirlpool Corp., once its largest
customer, and by a judgment of almost $1 million where the sheriff
was seizing production equipment.
Reuters relates that the Debtor said in court papers Invensys
Controls had obtained a $947,000 judgment against it and had
requested the sheriff to put equipment located at the Seagrove
facility in North Carolina up for sale. According to Reuters, the
Debtor filed for bankruptcy after the sheriff locked up and posted
for sale some equipment at the plant.
The petition says assets are $16 million against debt of
$74 million. Liabilities include $57.7 million and $6.6 million
owing to first- and second-lien creditors with security
interests in all assets. Unsecured debt is another $2.2 million.
About Moll Industries
Moll Industries Inc. is a Dallas-based manufacturer of injection
molded components for appliance makers. It emerged from Chapter
11 in 2003 after being the target of an involuntary petition in
2002.
MOLL INDUSTRIES: Case Summary & 21 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: Moll Industries, Inc.
13455 Noel Road, Suite 1310
Dallas, TX 75240
Bankruptcy Case No.: 10-11371
Chapter 11 Petition Date: April 27, 2010
About the Business: Moll Industries Inc. is a Dallas-based
manufacturer of injection molded components
for appliance makers. It emerged from Chapter
11 in 2003 after being the target of an
involuntary petition in 2002.
Court: U.S. Bankruptcy Court
District of Delaware (Delaware)
Judge: Mary F. Walrath
Debtor's Counsel: William A. Hazeltine, Esq.
Sullivan Hazeltine Allinson LLC
4 East 8th Street, Suite 400
Wilmington, DE 19801
Tel: (302) 428-8191
Fax: (302) 428-8195
E-mail: Bankruptcy001@sha-llc.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $50,000,001 to $100,000,000
A copy of the Company's list of 21 largest unsecured creditors
filed together with the petition is available for free at
http://bankrupt.com/misc/deb10-11371.pdf
The petition was signed by Jim Campbell, chief financial officer,
secretary, and treasurer.
Debtor-affiliates filing separate Chapter 11 petition:
Entity Case No. Petition Date
------ -------- -------------
Moll Holdings, Inc. 10-11372 04/27/10
Assets: $1,000,001 to $10,000,000
Debts: $50,000,001 to $100,000,000
Moll Europe Holdings, LLC -- 04/27/10
Moll Latin America Holdings, LLC -- 04/27/10
MOUNT SINAI: Moody's Reviews 'Ba2' Long-Term Bond Ratings
---------------------------------------------------------
Moody's Investors Service has placed the Ba2 long-term bond
ratings assigned to Mount Sinai Medical Center of Florida's
outstanding debt issued through the City of Miami Beach Health
Facilities Authority on Watchlist for possible upgrade.
Approximately $257.6 million of debt is affected by this action,
as listed at the conclusion of this report.
The Watchlist action follow receipt of MSMC's 2009 audited
financial statements (FYE December 31, 2009) reflecting a material
financial turn in operations to break-even income (the first year
of an operating income following a decade of operating losses when
excluding transfers from the Foundation) as well as marked growth
in unrestricted cash. Discussions with management regarding
sustainability of current momentum, the fiscal year 2010 budget,
interim fiscal year 2010 operating performance and future capital
and debt plans will be considered in Moody's review.
Moody's expects to conclude Moody's analysis in the next month.
Legal Security: All outstanding bonds are secured by: a gross
revenue pledge of the obligated group; a full and irrevocable
guaranty of the Mount Sinai Medical Center Foundation (the
Foundation) for principal and interest payments; a mortgage on
MSMC's south campus; MSMC's right, title and interest in the
ground lease on the land that the north campus is situated on,
and; a negative pledge from the Medical Center and the Foundation.
Interest Rate Derivatives: None
Rated Debt:
* Series 1998, fixed rate
* Series 2001A, fixed rate
* Series 2004, fixed rate
The rating assigned to MSMC was issued on Moody's municipal rating
scale. Moody's has announced its plans to recalibrate all U.S.
municipal ratings to its global scale and therefore, upon
implementation of the methodology published in conjunction with
this initiative, the rating will be recalibrated to a global scale
rating comparable to other credits with a similar risk profile.
Market participants should not view the recalibration of municipal
ratings as rating upgrades, but rather as a recalibration of the
ratings to a different rating scale. This recalibration does not
reflect an improvement in credit quality or a change in Moody's
credit opinion for rated municipal debt issuers.
The last rating action was on March 30, 2009, when MSMC's rating
was downgraded to Ba2 from Ba1; the negative rating outlook was
maintained at the lower rating level.
MURPHY PROPERTIES: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: Murphy Properties I LP
4901 W 136th Street
Leawood, KS 66224
Bankruptcy Case No.: 10-11369
Chapter 11 Petition Date: April 28, 2010
Court: U.S. Bankruptcy Court
District of Kansas (Wichita)
Judge: Robert E. Nugent
Debtor's Counsel: Edward J. Nazar, Esq.
245 North Waco, Suite 402
Wichita, KS 67202
Tel: (316) 262-8361
Fax: (316) 263-0610
E-mail: ebn1@redmondnazar.com
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/ksb10-11369.pdf
The petition was signed by Gabriel Murphy, Member of General
Partner.
NATIONWIDE HEALTH: Fitch Affirms Preferred Stock Rating at 'BB+'
----------------------------------------------------------------
Fitch Ratings has affirmed the Issuer Default Rating and senior
unsecured securities ratings of Nationwide Health Properties,
Inc.:
Nationwide Health Properties, Inc.
-- IDR at 'BBB';
-- Revolving credit facility at 'BBB';
-- Senior unsecured notes at 'BBB'
-- Perpetual preferred stock (indicative) at 'BB+'.
The Rating Outlook is Stable.
The ratings affirmations reflect NHP's maintenance of strong
leverage and debt service coverage levels, and the increased
diversity of NHP's asset base via the anticipated completion of
its agreement with Pacific Medical Buildings to acquire 18 highly
occupied quality medical office buildings. All of which, with the
exception of one of the buildings under the agreement, have been
acquired to date. NHP's leverage as measured by net debt to
recurring operating EBITDA has improved significantly from 4.5
times as of Dec. 31, 2008, to 3.1x at Dec. 31, 2009. Fitch
anticipates that NHP will maintain leverage between 4.0x-4.5x
after taking into account NHP's anticipated acquisitions and
investment activities during the year. In addition the ratings
affirmation also reflects NHP's improved fixed-charge coverage
ratio (defined as recurring operating EBITDA less capital
expenditures and straight-line rents, divided by interest expense
and capitalized interest) of 3.3x for the 12 months ending
Dec. 31, 2009, up from 2.8x in 2008 and 2.4x in 2007.
Further support for the ratings is provided by NHP's growing and
geographically diverse portfolio of 576 health care facilities
throughout 43 states as of Dec. 31, 2009. NHP's portfolio of
assets comprises five major health service property types and
primarily consists of long-term triple-net leases to experienced
operators of seniors housing and health care facilities. The
majority of NHP's assets are master leased or cross-
collateralized, thereby minimizing the potential impact of adverse
selection upon lease renewal by operators. Fitch notes that less
than 8% of NHP's lease revenue expires in any given year over the
next five years, and the company's 60 multi-tenanted and 19
triple-net-leased MOBs are 88.8% and 100% occupied respectively,
at Dec. 31, 2009.
Fitch views as positive the growth and diversification of NHP's
existing asset base via its acquisition of MOBs due to its
agreement with Pacific Medical Buildings (PMB), the result of
which has decreased NHP's reliance on revenue from its top senior
housing and long-term care operators. The MOBs, many of which are
located on campus and have affiliations with major hospital
systems, are of high quality and highly occupied.
Fitch notes that NHP maintains a liquidity surplus, with sources
of liquidity (unrestricted cash, availability under NHP's
unsecured revolving credit facility and expected retained cash
flows from operating activities after dividend payments) covering
uses of liquidity (debt maturities, and recurring capital
expenditures) by 1.2x for the period Jan. 1, 2010 to Dec. 31,
2011. The liquidity surplus is primarily driven by NHP's
availability under its unsecured revolving line of credit and
assumes NHP's unsecured credit facility is reduced by one-third
upon maturity in 2011.
The ratings also point to the strength of NHP's management team.
In addition, the company's ratios under its unsecured credit
facility's financial covenants do not hinder the company's
financial flexibility.
Fitch's projected fixed-charge coverage on a risk-adjusted
earnings basis under Fitch's base case scenario is 3.3x in each of
2010 and 2011, respectively.
Fitch's primary credit concern is the operator concentration
inherent within NHP's portfolio. NHP's top five operators
collectively represent approximately 40.1% of the company's cash
rental revenue in 2009. However, Fitch notes that NHP's growing
MOB portfolio will aid in minimizing the top five operator
contribution going forward.
The Stable Outlook reflects Fitch's view that NHP will maintain
solid fixed-charge coverage and leverage levels throughout 2010.
In addition, NHP's manageable level of debt maturities, limited
lease rollover, and good liquidity provide further support for the
Outlook. The Outlook also takes into account NHP's continued
diversification of its portfolio through its acquisition of high-
quality, highly occupied MOBs, and the master lease structure on
the majority of its assets, many of which have cross-
collateralized, cross-default provisions. Furthermore, strong
demand for the sector, buoyed by an aging 'Baby Boomer' population
with increased medical needs, limited new supply, and the
potential impact of the health care reform bill bode well for the
senior health care sector and MOB and outpatient facilities.
The two-notch difference between NHP's IDR and its indicative
preferred stock rating is consistent with Fitch's criteria for
corporate entities with hybrid securities. Based on Fitch's
criteria reports, 'Rating Hybrid Securities' and 'Equity Credit
for Hybrids and Other Capital Securities - Amended,' both dated
Dec. 29, 2009, the company's cumulative preferred stock would have
loss absorption elements that would likely result in poor
recoveries in the event of a corporate default.
Fitch's existing ratings and/or Outlook may improve if, on a
consolidated basis:
-- Fixed-charge coverage sustained above 3.75x for several
consecutive quarters (coverage was 3.3x for the year ended
Dec. 31, 2009);
-- Total net debt to annualized recurring operating EBITDA
sustained below 3.5x (leverage is estimated to be 4.2x in
2010);
-- Unencumbered asset to unsecured debt coverage ratio sustained
above 3.8x on a covenanted basis (this ratio was 3.4x as of
Dec. 31, 2009);
-- NHP demonstrates the successful integration of MOBs under its
agreement with PMB.
Conversely, Fitch's existing ratings and/or Outlook could come
under pressure if, on a consolidated basis:
-- Fixed charge coverage fell to 2.3x or lower for several
consecutive quarters;
-- Leverage increased above 5.5x;
-- Unencumbered asset to unsecured debt coverage ratio fell
below 2.5x on a covenanted basis;
-- NHP has a liquidity shortfall.
Nationwide Health Properties, Inc., is a self-managed and self-
administered real estate investment trust that specializes in
investments in health care related senior housing, long-term care
properties, and medical office buildings throughout the United
States. The company's investments primarily consist of health
care facilities that it leases on a triple-net basis to its
tenants. Additionally, the company provides financing, largely
mortgage loans, to select health care operators. As of Dec. 31,
2009, the company had approximately $4.3 billion in total assets
comprising 576 health care facilities in 43 states.
NAVJOT LLC: Case Summary & 14 Largest Unsecured Creditors
---------------------------------------------------------
Debtor: Navjot, LLC
704 4th St.
San Rafael, CA 94901
Bankruptcy Case No.: 10-11533
Chapter 11 Petition Date: April 27, 2010
Court: United States Bankruptcy Court
Northern District of California (Santa Rosa)
Judge: Alan Jaroslovsky
Debtor's Counsel: David N. Chandler, Esq.
Law Offices of David N. Chandler
1747 4th St.
Santa Rosa, CA 95404
Tel: (707) 528-4331
E-mail: DChandler1747@yahoo.com
Estimated Assets: $10,000,001 to $50,000,000
Estimated Debts: $10,000,001 to $50,000,000
The petition was signed by Surinder Pal Sroa, managing member.
Debtor's List of 14 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Margaret Enevold $1,212,600
1403 Serra Dr.
Pacifica, CA 94044
Marin Mortgage Bankers $670,000
300 Drakes Landing Rd.,
Suite 155
Greenbrae, CA 94904
Lotus Cuisine of India $170,955
(Navjots, Inc.)
Vijay Parmar/Gil $139,999
Vijay Parmar/Gil $114,000
Clista Culley $92,000
Placido Reyes $21,767
Anokha Cuisine of India $18,110
(Jyoti, Inc)
Home Depot $8,846
Albert Cordova $7,500
Farmers Insurance Exchange $4,243
Farmers Insurance Exchange $2,653
Marin Municipal Water District $2,553
Claridad & Crowe, CPAs $960
NEENAH ENTERPRISES: Has June 23 Plan Confirmation Hearing
---------------------------------------------------------
Neenah Foundry Co. is scheduled to seek confirmation of its
reorganization plan at a hearing on June 23, after it received
approval of the explanatory disclosure statement on April 27.
According to the Bloomberg report, the plan was negotiated with
holders of 55% of secured notes and all the subordinated notes in
advance of the Chapter 11 filing on Feb. 3. The plan will swap
the $237.5 million in 9.5% senior secured notes for 97% of the new
stock plus a new $50 million secured loan. Tontine Capital
Partners LP, the controlling shareholder and holder of the $88.7
million in 12.5% senior subordinated notes, is to have 3% of the
new equity plus warrants to purchase 10%.
Pursuant to the disclosure statement, Bloomberg relates, senior
noteholders can expect an 80% recovery. The dividend on the
subordinated notes is estimated at 7%. Unsecured creditors with
$12.3 million in claims are to be paid in full as is the $54.2
million secured working capital loan.
About Neenah Enterprises
Headquartered in Neenah, Wisconsin, Neenah Enterprises, Inc. --
http://www.nfco.com/-- is the indirect parent holding company of
Neenah Foundry Company. Neenah Foundry Company and its
subsidiaries manufacture and market a wide range of iron castings
and steel forgings for the heavy municipal market and selected
segments of the industrial markets. Neenah is one of the largest
independent foundry companies in the United States, with
substantial market share in the municipal and various industrial
markets for gray and ductile iron castings and forged steel
products.
The Company filed for Chapter 11 bankruptcy protection on
February 3, 2010 (Bankr. D. Del. Case No. 10-10360). Edmon L.
Morton, Esq., and Kenneth J. Enos, Esq., assist the Company in its
restructuring effort. The Company had $286,611,000 in total
assets against total liabilities of $449,435,000, resulting in
stockholder's deficit of $162,824,000.
The Company's affiliates -- NFC Castings, Inc.; Neenah Foundry
Company; Cast Alloys, Inc.; Neenah Transport, Inc.; Advanced Cast
Products, Inc.; Gregg Industries, Inc.; Mercer Forge Corporation;
Deeter Foundry, Inc.; and Dalton Corporation -- filed separate
Chapter 11 petitions.
NEWLOOK INDUSTRIES: Sees Delay in Filing of Financials
------------------------------------------------------
Newlook Industries Corp. anticipates to be late in filing its
annual financial statements and management, discussion and
analysis for the year ending December 31, 2009 on or before the
prescribed deadline of April 30, 2010.
The Company has made an application with the applicable securities
regulators under National Policy 12-203 requesting that a
management cease trade order be imposed in respect of this late
filing rather than an issuer cease trade order, but there is no
assurance that it will be granted.
Newlook has been unable to complete the required filings within
the prescribed time. Newlook has accepted the resignations of
Gary Hokkanen, Chief Financial Officer, and Jason Moretto,
President and Director, effective immediately. However, Mr.
Moretto has agreed to assist the Company as an independent
contractor as it diligently works to expedite the required filings
by the targeted completion date. As a result of these and certain
changes in its internal accounting staff and processes, the
Company requires additional time for the completion of its annual
financial statements, MD&A and audit.
Newlook fully expects to file its financial statements and MD&A
for the year ending December 31, 2009 on or prior to June 30,
2010. The Company confirms that it will satisfy the provisions of
the alternative information guidelines under NP 12-203 by issuing
bi-weekly default status reports in the form of news releases so
long as it remains in default of the filing requirements to file
its financial statements and MD&A within the prescribed period of
time. Newlook is not subject to any insolvency proceedings at the
present time. The Company confirms that there is no other
material information relating to its affairs that has not been
generally disclosed.
Newlook Industries Corp., headquartered in King City, Ontario is a
publicly traded company listed on the TSX Venture Exchange.
NORTEL NETWORKS: Argentina Unit to Sell Assets to Ciena
-------------------------------------------------------
Nortel Networks Inc. and its affiliates sought and obtained
approvals from the U.S. Bankruptcy Court for the District of
Delaware and the Ontario Superior Court of Justice for Nortel
Networks de Argentina S.A. to sell certain of its assets to Ciena
Corp.
Nortel Argentina made the sale offer as part of Ciena's
acquisition of Nortel's Optical Networking and Carrier Ethernet
business.
The sale offer generally seeks to address the amount of sale
proceeds to be allocated to Nortel Argentina in connection with
the acquisition. It requires Nortel to pay the difference
between the consideration that Nortel Argentina will receive in
consideration for its assets and the consideration allocated to
it in accordance with a certain "Interim Funding and Settlement
Agreement."
The IFSA, which was executed on June 9, 2009, governs certain
intercompany matters, which include the obligations of certain
parties to make an agreement on a protocol for resolving disputes
over the allocation of proceeds from the sales of certain Nortel
assets.
The Nortel Argentina offer is formalized in a 9-page agreement
dated March 19, 2010, a copy of which is available without charge
at http://researcharchives.com/t/s?600b
In another development, NNI filed under seal a list of customer
contracts that will be assumed and assigned to Ciena in
connection with the acquisition of the Optical and Carrier
Ethernet business.
About Nortel Networks
Nortel Networks (OTCBB:NRTLQ) -- http://www.nortel.com/--
delivers communications capabilities that make the promise of
Business Made Simple a reality for the Company's customers. The
Company's next-generation technologies, for both service provider
and enterprise networks, support multimedia and business-critical
applications. Nortel's technologies are designed to help
eliminate the barriers to efficiency, speed and performance by
simplifying networks and connecting people to the information they
need, when they need it.
Nortel Networks Corp., Nortel Networks Inc., and other affiliated
corporations in Canada sought insolvency protection under the
Companies' Creditors Arrangement Act in the Ontario Superior Court
of Justice (Commercial List). Ernst & Young was appointed to
serve as monitor and foreign representative of the Canadian Nortel
Group.
The Monitor sought recognition of the CCAA Proceedings in the U.S.
by filing a bankruptcy petition under Chapter 15 of the U.S.
Bankruptcy Code (Bankr. D. Del. Case No. 09-10164). Mary Caloway,
Esq., and Peter James Duhig, Esq., at Buchanan Ingersoll & Rooney
PC, in Wilmington, Delaware, serves as the Chapter 15 petitioner's
counsel.
Nortel Networks Inc. and 14 affiliates filed separate Chapter 11
petitions on January 14, 2009 (Bankr. D. Del. Case No. 09-10138).
Judge Kevin Gross presides over the case. James L. Bromley, Esq.,
at Cleary Gottlieb Steen & Hamilton, LLP, in New York, serves as
general bankruptcy counsel; Derek C. Abbott, Esq., at Morris
Nichols Arsht & Tunnell LLP, in Wilmington, serves as Delaware
counsel. The Chapter 11 Debtors' other professionals are Lazard
Freres & Co. LLC as financial advisors; and Epiq Bankruptcy
Solutions LLC as claims and notice agent.
Certain of Nortel's European subsidiaries also made consequential
filings for creditor protection. The Nortel Companies related in
a press release that Nortel Networks UK Limited and certain
subsidiaries of the Nortel group incorporated in the EMEA region
have each obtained an administration order from the English High
Court of Justice under the Insolvency Act 1986. The applications
were made by the EMEA Subsidiaries under the provisions of the
European Union's Council Regulation (EC) No. 1346/2000 on
Insolvency Proceedings and on the basis that each EMEA
Subsidiary's centre of main interests is in England. Under the
terms of the orders, representatives of Ernst & Young LLP have
been appointed as administrators of each of the EMEA Companies and
will continue to manage the EMEA Companies and operate their
businesses under the jurisdiction of the English Court and in
accordance with the applicable provisions of the Insolvency Act.
Several entities, particularly, Nortel Government Solutions
Incorporated have material operations and are not part of the
bankruptcy proceedings.
As of September 30, 2008, Nortel Networks Corp. reported
consolidated assets of US$11.6 billion and consolidated
liabilities of US$11.8 billion. The Nortel Companies' U.S.
businesses are primarily conducted through Nortel Networks Inc.,
which is the parent of majority of the U.S. Nortel Companies. As
of September 30, 2008, NNI had assets of about US$9 billion and
liabilities of US$3.2 billion, which do not include NNI's
guarantee of some or all of the Nortel Companies' about
US$4.2 billion of unsecured public debt.
Bankruptcy Creditors' Service, Inc., publishes Nortel Networks
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
and ancillary foreign proceedings undertaken by Nortel Networks
Corp. and its various affiliates. (http://bankrupt.com/newsstand/
or 215/945-7000)
NORTEL NETWORKS: CCAA Stay Period Extended Until July 22
--------------------------------------------------------
Nortel Networks Corporation and its four Canadian affiliates that
filed for creditor protection under the Companies' Creditors
Arrangement Act of Canada sought and obtained an order from the
Ontario Superior Court of Justice further extending through
July 22, 2010, the stay of proceedings that was previously
granted by the Canadian Court.
The purpose of the stay of proceedings is to provide stability to
the Nortel companies to continue with their divestiture and other
restructuring efforts.
About Nortel Networks
Nortel Networks (OTCBB:NRTLQ) -- http://www.nortel.com/--
delivers communications capabilities that make the promise of
Business Made Simple a reality for the Company's customers. The
Company's next-generation technologies, for both service provider
and enterprise networks, support multimedia and business-critical
applications. Nortel's technologies are designed to help
eliminate the barriers to efficiency, speed and performance by
simplifying networks and connecting people to the information they
need, when they need it.
Nortel Networks Corp., Nortel Networks Inc., and other affiliated
corporations in Canada sought insolvency protection under the
Companies' Creditors Arrangement Act in the Ontario Superior Court
of Justice (Commercial List). Ernst & Young was appointed to
serve as monitor and foreign representative of the Canadian Nortel
Group.
The Monitor sought recognition of the CCAA Proceedings in the U.S.
by filing a bankruptcy petition under Chapter 15 of the U.S.
Bankruptcy Code (Bankr. D. Del. Case No. 09-10164). Mary Caloway,
Esq., and Peter James Duhig, Esq., at Buchanan Ingersoll & Rooney
PC, in Wilmington, Delaware, serves as the Chapter 15 petitioner's
counsel.
Nortel Networks Inc. and 14 affiliates filed separate Chapter 11
petitions on January 14, 2009 (Bankr. D. Del. Case No. 09-10138).
Judge Kevin Gross presides over the case. James L. Bromley, Esq.,
at Cleary Gottlieb Steen & Hamilton, LLP, in New York, serves as
general bankruptcy counsel; Derek C. Abbott, Esq., at Morris
Nichols Arsht & Tunnell LLP, in Wilmington, serves as Delaware
counsel. The Chapter 11 Debtors' other professionals are Lazard
Freres & Co. LLC as financial advisors; and Epiq Bankruptcy
Solutions LLC as claims and notice agent.
Certain of Nortel's European subsidiaries also made consequential
filings for creditor protection. The Nortel Companies related in
a press release that Nortel Networks UK Limited and certain
subsidiaries of the Nortel group incorporated in the EMEA region
have each obtained an administration order from the English High
Court of Justice under the Insolvency Act 1986. The applications
were made by the EMEA Subsidiaries under the provisions of the
European Union's Council Regulation (EC) No. 1346/2000 on
Insolvency Proceedings and on the basis that each EMEA
Subsidiary's centre of main interests is in England. Under the
terms of the orders, representatives of Ernst & Young LLP have
been appointed as administrators of each of the EMEA Companies and
will continue to manage the EMEA Companies and operate their
businesses under the jurisdiction of the English Court and in
accordance with the applicable provisions of the Insolvency Act.
Several entities, particularly, Nortel Government Solutions
Incorporated have material operations and are not part of the
bankruptcy proceedings.
As of September 30, 2008, Nortel Networks Corp. reported
consolidated assets of US$11.6 billion and consolidated
liabilities of US$11.8 billion. The Nortel Companies' U.S.
businesses are primarily conducted through Nortel Networks Inc.,
which is the parent of majority of the U.S. Nortel Companies. As
of September 30, 2008, NNI had assets of about US$9 billion and
liabilities of US$3.2 billion, which do not include NNI's
guarantee of some or all of the Nortel Companies' about
US$4.2 billion of unsecured public debt.
Bankruptcy Creditors' Service, Inc., publishes Nortel Networks
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
and ancillary foreign proceedings undertaken by Nortel Networks
Corp. and its various affiliates. (http://bankrupt.com/newsstand/
or 215/945-7000)
NORTEL NETWORKS: Completes Sale of GSM/GSM-R Business
-----------------------------------------------------
Nortel Networks Inc. and its affiliates have completed the sale
of the global assets of their Global System for Mobile and GSM
for Railways Business to Telefonaktiebolaget LM Ericsson and
Kapsch CarrierCom AG.
Ericsson and Kapsch purchased the Nortel GSM Businesses for
US$103 million in cash subject to working capital adjustments.
Ericsson acquired assets comprising Nortel's North American GSM
Business while Kapsch bought Nortel's GSM assets in Taiwan,
Europe, Middle East and Africa. Kapsch also acquired the global
assets of the GSM-R business.
About 670 employees were offered jobs at Ericsson and Kapsch as
part of the deal, which took effect end of day March 31, 2010.
"We've reached another successful milestone in the divestiture of
our businesses," John Doolittle, chief financial officer of
Nortel, said in a statement.
"We wish our transferring employees well, knowing that they are
taking their considerable expertise to Ericsson and Kapsch," Mr.
Doolittle said.
The Debtors do not expect their common shareholders or Nortel
Networks Ltd.'s preferred shareholders to receive any value from
the creditor protection proceedings and expect that the
proceedings will result in the cancellation of those equity
interests.
In a related development, Nortel Networks Corporation and its
four Canadian affiliates sought and obtained approval from the
Ontario Superior Court of Justice to execute a distribution
escrow agreement in connection with the sale of the GSM/GSM-R
businesses. The Agreement contemplates that the proceeds from
the sale will be deposited in an escrow account.
About Nortel Networks
Nortel Networks (OTCBB:NRTLQ) -- http://www.nortel.com/--
delivers communications capabilities that make the promise of
Business Made Simple a reality for the Company's customers. The
Company's next-generation technologies, for both service provider
and enterprise networks, support multimedia and business-critical
applications. Nortel's technologies are designed to help
eliminate the barriers to efficiency, speed and performance by
simplifying networks and connecting people to the information they
need, when they need it.
Nortel Networks Corp., Nortel Networks Inc., and other affiliated
corporations in Canada sought insolvency protection under the
Companies' Creditors Arrangement Act in the Ontario Superior Court
of Justice (Commercial List). Ernst & Young was appointed to
serve as monitor and foreign representative of the Canadian Nortel
Group.
The Monitor sought recognition of the CCAA Proceedings in the U.S.
by filing a bankruptcy petition under Chapter 15 of the U.S.
Bankruptcy Code (Bankr. D. Del. Case No. 09-10164). Mary Caloway,
Esq., and Peter James Duhig, Esq., at Buchanan Ingersoll & Rooney
PC, in Wilmington, Delaware, serves as the Chapter 15 petitioner's
counsel.
Nortel Networks Inc. and 14 affiliates filed separate Chapter 11
petitions on January 14, 2009 (Bankr. D. Del. Case No. 09-10138).
Judge Kevin Gross presides over the case. James L. Bromley, Esq.,
at Cleary Gottlieb Steen & Hamilton, LLP, in New York, serves as
general bankruptcy counsel; Derek C. Abbott, Esq., at Morris
Nichols Arsht & Tunnell LLP, in Wilmington, serves as Delaware
counsel. The Chapter 11 Debtors' other professionals are Lazard
Freres & Co. LLC as financial advisors; and Epiq Bankruptcy
Solutions LLC as claims and notice agent.
Certain of Nortel's European subsidiaries also made consequential
filings for creditor protection. The Nortel Companies related in
a press release that Nortel Networks UK Limited and certain
subsidiaries of the Nortel group incorporated in the EMEA region
have each obtained an administration order from the English High
Court of Justice under the Insolvency Act 1986. The applications
were made by the EMEA Subsidiaries under the provisions of the
European Union's Council Regulation (EC) No. 1346/2000 on
Insolvency Proceedings and on the basis that each EMEA
Subsidiary's centre of main interests is in England. Under the
terms of the orders, representatives of Ernst & Young LLP have
been appointed as administrators of each of the EMEA Companies and
will continue to manage the EMEA Companies and operate their
businesses under the jurisdiction of the English Court and in
accordance with the applicable provisions of the Insolvency Act.
Several entities, particularly, Nortel Government Solutions
Incorporated have material operations and are not part of the
bankruptcy proceedings.
As of September 30, 2008, Nortel Networks Corp. reported
consolidated assets of US$11.6 billion and consolidated
liabilities of US$11.8 billion. The Nortel Companies' U.S.
businesses are primarily conducted through Nortel Networks Inc.,
which is the parent of majority of the U.S. Nortel Companies. As
of September 30, 2008, NNI had assets of about US$9 billion and
liabilities of US$3.2 billion, which do not include NNI's
guarantee of some or all of the Nortel Companies' about
US$4.2 billion of unsecured public debt.
Bankruptcy Creditors' Service, Inc., publishes Nortel Networks
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
and ancillary foreign proceedings undertaken by Nortel Networks
Corp. and its various affiliates. (http://bankrupt.com/newsstand/
or 215/945-7000)
NORTEL NETWORKS: Court OKs Sale of Enterprise Unit to Avaya
-----------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware permits
the Debtors to assume and assign more contracts to Avaya Inc. as
part of the sale of their Enterprise Solutions business.
The Additional Contracts to be assumed and assigned were not
identified when the Debtors filed their request. The Debtors,
however, assured the Court that they will provide a schedule to
each customer whom they executed the contracts with.
In another development, Qwest Services Corp. withdrew its
objection to the Debtors' notice to assume and assign customer
agreements dated November 13, 2009. The Qwest objection was
filed on December 8, 2009.
About Nortel Networks
Nortel Networks (OTCBB:NRTLQ) -- http://www.nortel.com/--
delivers communications capabilities that make the promise of
Business Made Simple a reality for the Company's customers. The
Company's next-generation technologies, for both service provider
and enterprise networks, support multimedia and business-critical
applications. Nortel's technologies are designed to help
eliminate the barriers to efficiency, speed and performance by
simplifying networks and connecting people to the information they
need, when they need it.
Nortel Networks Corp., Nortel Networks Inc., and other affiliated
corporations in Canada sought insolvency protection under the
Companies' Creditors Arrangement Act in the Ontario Superior Court
of Justice (Commercial List). Ernst & Young was appointed to
serve as monitor and foreign representative of the Canadian Nortel
Group.
The Monitor sought recognition of the CCAA Proceedings in the U.S.
by filing a bankruptcy petition under Chapter 15 of the U.S.
Bankruptcy Code (Bankr. D. Del. Case No. 09-10164). Mary Caloway,
Esq., and Peter James Duhig, Esq., at Buchanan Ingersoll & Rooney
PC, in Wilmington, Delaware, serves as the Chapter 15 petitioner's
counsel.
Nortel Networks Inc. and 14 affiliates filed separate Chapter 11
petitions on January 14, 2009 (Bankr. D. Del. Case No. 09-10138).
Judge Kevin Gross presides over the case. James L. Bromley, Esq.,
at Cleary Gottlieb Steen & Hamilton, LLP, in New York, serves as
general bankruptcy counsel; Derek C. Abbott, Esq., at Morris
Nichols Arsht & Tunnell LLP, in Wilmington, serves as Delaware
counsel. The Chapter 11 Debtors' other professionals are Lazard
Freres & Co. LLC as financial advisors; and Epiq Bankruptcy
Solutions LLC as claims and notice agent.
Certain of Nortel's European subsidiaries also made consequential
filings for creditor protection. The Nortel Companies related in
a press release that Nortel Networks UK Limited and certain
subsidiaries of the Nortel group incorporated in the EMEA region
have each obtained an administration order from the English High
Court of Justice under the Insolvency Act 1986. The applications
were made by the EMEA Subsidiaries under the provisions of the
European Union's Council Regulation (EC) No. 1346/2000 on
Insolvency Proceedings and on the basis that each EMEA
Subsidiary's centre of main interests is in England. Under the
terms of the orders, representatives of Ernst & Young LLP have
been appointed as administrators of each of the EMEA Companies and
will continue to manage the EMEA Companies and operate their
businesses under the jurisdiction of the English Court and in
accordance with the applicable provisions of the Insolvency Act.
Several entities, particularly, Nortel Government Solutions
Incorporated have material operations and are not part of the
bankruptcy proceedings.
As of September 30, 2008, Nortel Networks Corp. reported
consolidated assets of US$11.6 billion and consolidated
liabilities of US$11.8 billion. The Nortel Companies' U.S.
businesses are primarily conducted through Nortel Networks Inc.,
which is the parent of majority of the U.S. Nortel Companies. As
of September 30, 2008, NNI had assets of about US$9 billion and
liabilities of US$3.2 billion, which do not include NNI's
guarantee of some or all of the Nortel Companies' about
US$4.2 billion of unsecured public debt.
Bankruptcy Creditors' Service, Inc., publishes Nortel Networks
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
and ancillary foreign proceedings undertaken by Nortel Networks
Corp. and its various affiliates. (http://bankrupt.com/newsstand/
or 215/945-7000)
NORTEL NETWORKS: District Court Denies Stay for U.K. Agency
-----------------------------------------------------------
Judge Joseph J. Farnan, Jr. of the U.S. District Court for the
District of Delaware denied a request by U.K. pension authorities
to stay a Bankruptcy Court ruling that blocked them from
participating in an administrative case against Nortel Networks
Inc. and its debtor affiliates.
In an order issued on April 15, 2010, the District Court opined
that Nortel Networks UK Pension Trust Ltd. and the Board of the
Pension Protection Fund "have not demonstrated the criteria
required to justify a stay pending appeal." It cited in
particular the U.K. Pension Authorities' failure to demonstrate
"irreparable harm" required for a stay.
The District Court, however, granted the U.K. Pension
Authorities' request for relief from its July 23, 2004 Standing
Order, requiring that all appeals from a bankruptcy court are
referred to mandatory mediation.
The U.K. Pension Authorities filed the Stay Motion after Judge
Kevin Gross of the U.S. Bankruptcy Court for the District of
Delaware issued an order on February 26, 2010, prohibiting them
from participating in the administrative case pursued by a U.K.
pensions regulator. The administrative proceeding seeks to
recover as much as GBP2.1 billion from the Debtors in connection
with Nortel Networks UK Ltd.'s pension plan that was allegedly
left underfunded following NNUK filed for bankruptcy.
Under the Stay Motion, the U.K. Pension Authorities wanted the
February 26 ruling stayed pending determination of the appeal
they filed earlier before the District Court contesting that
ruling. They wanted to participate in the administrative case to
support the U.K. pensions regulator's request for issuance of
"financial support direction" or FSD against the Debtors.
Under U.K. law, it is the issuance of an FSD that provides the
basis for assertion of a claim by the U.K. Pension Authorities
against the Debtors, and that would allow the U.K. pensions
regulator to make a claim not only on NNUK 's assets but also on
the far-flung assets of the Debtors.
The FSD is to be issued by a so-called "determinations panel,"
which is an independent committee established by the U.K.
pensions regulator.
The Debtors and the Official Committee of Unsecured Creditors
earlier criticized the Stay Motion, contending that there is no
public interest involved in the administrative case and that the
U.K. pension authorities are not exempted from the automatic stay
with respect to the administrative case since the U.K. pension
regulator is not exercising a police power. In response, the
U.K. Pension Authorities contended that the arguments of the
Debtors and the Creditors Committee lack merit and must be
rejected by the District Court.
The District Court has already referred the matter to Magistrate
Judge Thynge for issuance of a briefing schedule, and an advisory
report and recommendation on the merits of the appeal filed by
the U.K. Pension Authorities.
The deadline for representation of all parties is April 30, 2010.
The hearing before the determinations panel is scheduled to be
held from June 2 to 7, 2010.
About Nortel Networks
Nortel Networks (OTCBB:NRTLQ) -- http://www.nortel.com/--
delivers communications capabilities that make the promise of
Business Made Simple a reality for the Company's customers. The
Company's next-generation technologies, for both service provider
and enterprise networks, support multimedia and business-critical
applications. Nortel's technologies are designed to help
eliminate the barriers to efficiency, speed and performance by
simplifying networks and connecting people to the information they
need, when they need it.
Nortel Networks Corp., Nortel Networks Inc., and other affiliated
corporations in Canada sought insolvency protection under the
Companies' Creditors Arrangement Act in the Ontario Superior Court
of Justice (Commercial List). Ernst & Young was appointed to
serve as monitor and foreign representative of the Canadian Nortel
Group.
The Monitor sought recognition of the CCAA Proceedings in the U.S.
by filing a bankruptcy petition under Chapter 15 of the U.S.
Bankruptcy Code (Bankr. D. Del. Case No. 09-10164). Mary Caloway,
Esq., and Peter James Duhig, Esq., at Buchanan Ingersoll & Rooney
PC, in Wilmington, Delaware, serves as the Chapter 15 petitioner's
counsel.
Nortel Networks Inc. and 14 affiliates filed separate Chapter 11
petitions on January 14, 2009 (Bankr. D. Del. Case No. 09-10138).
Judge Kevin Gross presides over the case. James L. Bromley, Esq.,
at Cleary Gottlieb Steen & Hamilton, LLP, in New York, serves as
general bankruptcy counsel; Derek C. Abbott, Esq., at Morris
Nichols Arsht & Tunnell LLP, in Wilmington, serves as Delaware
counsel. The Chapter 11 Debtors' other professionals are Lazard
Freres & Co. LLC as financial advisors; and Epiq Bankruptcy
Solutions LLC as claims and notice agent.
Certain of Nortel's European subsidiaries also made consequential
filings for creditor protection. The Nortel Companies related in
a press release that Nortel Networks UK Limited and certain
subsidiaries of the Nortel group incorporated in the EMEA region
have each obtained an administration order from the English High
Court of Justice under the Insolvency Act 1986. The applications
were made by the EMEA Subsidiaries under the provisions of the
European Union's Council Regulation (EC) No. 1346/2000 on
Insolvency Proceedings and on the basis that each EMEA
Subsidiary's centre of main interests is in England. Under the
terms of the orders, representatives of Ernst & Young LLP have
been appointed as administrators of each of the EMEA Companies and
will continue to manage the EMEA Companies and operate their
businesses under the jurisdiction of the English Court and in
accordance with the applicable provisions of the Insolvency Act.
Several entities, particularly, Nortel Government Solutions
Incorporated have material operations and are not part of the
bankruptcy proceedings.
As of September 30, 2008, Nortel Networks Corp. reported
consolidated assets of US$11.6 billion and consolidated
liabilities of US$11.8 billion. The Nortel Companies' U.S.
businesses are primarily conducted through Nortel Networks Inc.,
which is the parent of majority of the U.S. Nortel Companies. As
of September 30, 2008, NNI had assets of about US$9 billion and
liabilities of US$3.2 billion, which do not include NNI's
guarantee of some or all of the Nortel Companies' about
US$4.2 billion of unsecured public debt.
Bankruptcy Creditors' Service, Inc., publishes Nortel Networks
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
and ancillary foreign proceedings undertaken by Nortel Networks
Corp. and its various affiliates. (http://bankrupt.com/newsstand/
or 215/945-7000)
NORTEL NETWORKS: Wants Court to Determine 2009 Tax Liabilities
--------------------------------------------------------------
Ann C. Cordo, Esq., at Morris, Nichols, Arhst & Tunnell LLP, in
Wilmington, Delaware, relates that pursuant to Sections
6012(a)(2) and 6072(b) of the Internal Revenue Code of 1986,
as amended, the U.S. Debtors are required to file their 2009
federal income tax returns, including Nortel Networks, Inc.'s
2009 consolidated U.S. federal income tax return for itself and
its affiliated group of corporations on Form 1120 by March 15,
2010, unless an extension is requested.
The U.S. Debtors, Ms. Cordo notes, have filed applications on
Form 7004 for an automatic six-month extension of the deadline to
file the 2009 U.S. Tax Returns. In this light, they intend to
file the 2009 U.S. Tax Returns on Form 1120 on or before
September 15, 2010. The U.S. Debtors also have substantially
similar filing obligations for state and local income tax
purposes.
Notwithstanding the automatic six-month filing extension for
their federal income tax return, the U.S. Debtors were required
to report on Form 7004 the amount of tax they expect they will
owe on the 2009 U.S. Tax Returns by the original March 15
deadline, and pay at least 90% of that amount. The U.S. Debtors
are only required to report their expected tax liability on Form
7004, without description or support.
The U.S. Debtors expect their 2009 U.S. federal income tax to
total $0, due to net operating loss carryovers for U.S. federal
income tax purposes that are sufficient in amount to offset all
items of taxable income incurred by the U.S. Debtors in 2009,
according to Ms. Cordo.
However, certain parts of the U.S. Debtors' major asset sale
transactions in 2009 relating to the allocation of sale proceeds
are still open. Because the U.S. Debtors are unable to make any
determination of the amount of proceeds they will receive for the
2009 Transactions, they are likewise unable to estimate with any
reasonable accuracy the amount of income taxes for which they
would be liable or the amount of net operating loss carryovers
and other tax attributes that would be available for the 2010
taxable year and subsequent years, Ms. Cordo notes. The "2009
Transactions" include the sale of the Debtors' Layer 4-7 data
portfolio to Radware Ltd.; CDMA Business and LTE Access assets to
Telefonaktiebolaget LM Ericsson; Wireless Networks Business to
Hitachi Ltd.; and Enterprise Solutions Business to Avaya Inc.
The U.S. Debtors would be unable to provide an accurate estimate
of their income tax liability at any time before the allocation
of the Sale Proceeds of the 2009 Transactions, Ms. Cordo adds.
This will also be the case in the future so long as no final
allocation has been determined, she says.
Accordingly, the Debtors ask the Court to exercise its powers
provided under Sections 505(a) and 105(a) of the Bankruptcy Code
to determine under U.S. tax laws that:
(a) items of gain or loss with respect to the 2009 Sale
Proceeds, including interest earned while held in escrow,
are not recognizable in determining items of taxable
income for the U.S. Debtors, including for NNI's
consolidated group for the 2009 taxable year;
(b) the U.S. Debtors have properly filed or may file the 2009
U.S. Tax Returns accordingly, including NNI's consolidated
U.S. federal income tax return and tax returns in any
political subdivision of the United States;
(c) future Sale Proceeds, and any interest earned on it while
held in escrow, are not includible in determining taxable
income for purposes of any return, estimation or filing
required by any taxing authority of the United States or
any of its political subdivision prior to the final
allocation of the Sale Proceeds; and
(d) with respect to any tax return for the transfer taxes
filed in the United States or any of its political
subdivision relating to the 2009 Transactions, the U.S.
Debtors will not be subject to interest or penalties as a
result of any amendments to those tax returns that may be
required once the U.S. Debtors' share of proceeds from
that transaction is known.
"The prompt and proper payment of taxes in a manner that will not
prejudice the U.S. Debtors in negotiations regarding the
allocation of the Sale Proceeds is critical to the administration
of the U.S. Debtors' sales," Ms. Cordo says.
IRS, et al., Object
A government lawyer asks the Court to determine whether it has
jurisdiction to grant the Debtors' request for income tax
liability determination.
Representing the Internal Revenue Service, Jan Geht, Esq., says
there is "no actual controversy" for the Court to adjudicate
since the Debtors have not yet filed a tax return.
Mr. Geht also points out that the U.S. Government has made no
assessment against the Debtors for 2009 and has not yet filed a
proof of claim.
"The Debtors cannot point to any actual, imminent, non-
hypothetical injury in fact at this time and only allege a
hypothetical future harm," Mr. Geht says in court papers.
"Given the absence of a showing of actual injury, the Debtors
lack standing to bring a motion seeking affirmation of their
intended reporting position," he says.
The California Franchise Tax Board has also criticized the
Debtors ' request, asserting that there is no existing tax
dispute between them and the taxing authorities since no tax
return has been filed. "There is no actual controversy or tax
dispute for the Court to determine at this time," CFTB says in
court papers.
CFTB also contends that the Debtors have not followed the
procedures of the bankruptcy laws to properly discharge
postpetition tax obligations.
In a statement filed in Court, the Iowa Department of Revenue
asks the Court to rule that the correct time period for
recognizing Iowa income is the same as for federal taxes.
"The IDR does not take a position with regard the proper tax year
for reporting income related to the property sales. Instead, the
IDR simply requests that any ruling apply equally to Iowa and
federal taxes," the statement notes.
About Nortel Networks
Nortel Networks (OTCBB:NRTLQ) -- http://www.nortel.com/--
delivers communications capabilities that make the promise of
Business Made Simple a reality for the Company's customers. The
Company's next-generation technologies, for both service provider
and enterprise networks, support multimedia and business-critical
applications. Nortel's technologies are designed to help
eliminate the barriers to efficiency, speed and performance by
simplifying networks and connecting people to the information they
need, when they need it.
Nortel Networks Corp., Nortel Networks Inc., and other affiliated
corporations in Canada sought insolvency protection under the
Companies' Creditors Arrangement Act in the Ontario Superior Court
of Justice (Commercial List). Ernst & Young was appointed to
serve as monitor and foreign representative of the Canadian Nortel
Group.
The Monitor sought recognition of the CCAA Proceedings in the U.S.
by filing a bankruptcy petition under Chapter 15 of the U.S.
Bankruptcy Code (Bankr. D. Del. Case No. 09-10164). Mary Caloway,
Esq., and Peter James Duhig, Esq., at Buchanan Ingersoll & Rooney
PC, in Wilmington, Delaware, serves as the Chapter 15 petitioner's
counsel.
Nortel Networks Inc. and 14 affiliates filed separate Chapter 11
petitions on January 14, 2009 (Bankr. D. Del. Case No. 09-10138).
Judge Kevin Gross presides over the case. James L. Bromley, Esq.,
at Cleary Gottlieb Steen & Hamilton, LLP, in New York, serves as
general bankruptcy counsel; Derek C. Abbott, Esq., at Morris
Nichols Arsht & Tunnell LLP, in Wilmington, serves as Delaware
counsel. The Chapter 11 Debtors' other professionals are Lazard
Freres & Co. LLC as financial advisors; and Epiq Bankruptcy
Solutions LLC as claims and notice agent.
Certain of Nortel's European subsidiaries also made consequential
filings for creditor protection. The Nortel Companies related in
a press release that Nortel Networks UK Limited and certain
subsidiaries of the Nortel group incorporated in the EMEA region
have each obtained an administration order from the English High
Court of Justice under the Insolvency Act 1986. The applications
were made by the EMEA Subsidiaries under the provisions of the
European Union's Council Regulation (EC) No. 1346/2000 on
Insolvency Proceedings and on the basis that each EMEA
Subsidiary's centre of main interests is in England. Under the
terms of the orders, representatives of Ernst & Young LLP have
been appointed as administrators of each of the EMEA Companies and
will continue to manage the EMEA Companies and operate their
businesses under the jurisdiction of the English Court and in
accordance with the applicable provisions of the Insolvency Act.
Several entities, particularly, Nortel Government Solutions
Incorporated have material operations and are not part of the
bankruptcy proceedings.
As of September 30, 2008, Nortel Networks Corp. reported
consolidated assets of US$11.6 billion and consolidated
liabilities of US$11.8 billion. The Nortel Companies' U.S.
businesses are primarily conducted through Nortel Networks Inc.,
which is the parent of majority of the U.S. Nortel Companies. As
of September 30, 2008, NNI had assets of about US$9 billion and
liabilities of US$3.2 billion, which do not include NNI's
guarantee of some or all of the Nortel Companies' about
US$4.2 billion of unsecured public debt.
Bankruptcy Creditors' Service, Inc., publishes Nortel Networks
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
and ancillary foreign proceedings undertaken by Nortel Networks
Corp. and its various affiliates. (http://bankrupt.com/newsstand/
or 215/945-7000)
OCEANAIRE TEXAS: Landry's Restaurants Gets Approval to Buy Firm
---------------------------------------------------------------
Landry's Restaurants, Inc., has closed on its offering of an
additional $47.0 million in aggregate principal amount of 11 5/8%
senior secured notes due 2015. The Company received proceeds of
$49.8 million as a result of the sale of the Additional Notes.
The offering of the Additional Notes was led by Jefferies &
Company, Inc., as sole book-running manager. Proceeds from the
offering will be used to pay for the acquisition of The Oceanaire,
Inc. to repay outstanding revolver balances and for general
corporate purposes.
The Company further stated that the Bankruptcy Court had approved
its plan to acquire Oceanaire for approximately $23.4 million plus
the assumption of certain additional working capital liabilities.
The acquisition is expected to close on or about April 30, 2010.
About Landry's Restaurants
Based in Houston, Texas, Landry's Restaurants, Inc. (NYSE: LNY)
owns and operates full-service, casual dining restaurants,
primarily under the names of Rainforest Cafe, Saltgrass Steak
House, Landry's Seafood House, Charley's Crab, The Chart House,
and the Signature Group of restaurants. The Company also owns and
operates select hospitality businesses, including the Golden
Nugget Hotel & Casinos in Las Vegas and Laughlin, Nevada.
* * *
Landry's Restaurants continues to carry S&P's (B/Watch Neg/--)
Corporate Credit Rating; and Moody's 'B2' Corporate Family and
Probability of Default Ratings.
About Oceanaire
The Oceanaire Texas Restaurant Company, L.P., dba The Oceanaire
Seafood Room, and five affiliates, including Oceanaire Inc., filed
for Chapter 11 on July 5, 2009 (Bankr. N.D. Tex. Lead Case No. 09-
34262). Mark Joseph Elmore, Esq., and Robert Dew Albergotti, Esq.,
at Haynes and Boone, LLP, represent the Debtor in their Chapter 11
effort. Oceanaire's petition estimated assets of $1,000,001 to
$10,000,000 against debts of $10,000,001 to $50,000,000 as of the
filing.
ODYSSEY PETROLEUM: Has Notice of Default on Late Financials
-----------------------------------------------------------
Odyssey Petroleum Corp. is filing this Notice of Default pursuant
to National Policy 12-203 Cease Trade Orders for Continuous
Disclosure Defaults in respect of the Company's expected inability
to file its annual audited financial statements for the year ended
December 31, 2009 by the deadline of April 30, 2010 as required by
National Instrument 51-102 Continuous Disclosure Obligations. In
connection with the Company's inability to file the Annual
Financial Statements on time, the Company has applied to
applicable Canadian securities regulators requesting that a
management cease trade order (which restricts trading in the
Company's securities by the Company's insiders) be issued as
opposed to an issuer cease trade order (which restricts all
trading in the Company's securities).
The Company is unable to file the Annual Financial Statements on
time due to the cumulative effect of the following factors:
1. The Company's auditors have advised the Company that they do
not expect to be able to complete the audit by the filing
date.
2. The Company's U.S. subsidiary (the "Subsidiary"), which
operates all of the Company's wells, filed a Chapter 11
Bankruptcy Case Filing on April 23, 2010 in the United States
Bankruptcy Court in the Southern District of Mississippi.
This has resulted in a necessity to undertake significantly
increased audit procedures and confirmations. Until this
filing, we had expected that the audit and the required
statements would have been completed and filed on time. The
Company anticipates that the duration of its default
in filing its Annual Financial Statements will be less than 30
days.
The Company intends to remedy the default by taking the following
steps:
1. The Company has provided the auditors with the completed
Accounting records and draft financial statements and is
diligently working with the auditors to complete the audit.
2. The field work of the Subsidiary is currently underway, and is
Completed for the parent Company.
3. The Company has sufficient accounting staff to assist as
necessary.
Pursuant to 12-203, applicable Canadian securities commissions or
regulators may impose an issuer cease trade order against the
Company if the Annual Financial Statements are not filed by
June 30, 2010, being the date that is two months following the
date of the filing deadline for the Annual Financial Statements.
In addition, an issuer cease trade order may be imposed sooner if
the Company fails to file Default Status Reports on time in
accordance with 12-203.
There is no assurance that the Company's application to applicable
Canadian securities regulators will be accepted. If the
securities regulators do not accept the Company's application for
a management cease trade order, they may impose an issuer cease
trade order against the Company.
The Company intends to satisfy the provisions of 12-203 by filing
a bi-weekly Default Status Report containing the information
prescribed by 12-203, as long as the Company remains in default of
the financial statement filing requirement.
The Company is not currently subject to any insolvency
proceedings. If the Company provides any information to any of its
creditors during the period in which it is in default of filing
the Annual Financial Statements, the Company confirms that it will
also file material change reports on SEDAR containing such
information.
ODYSSEY PETROLEUM: Files for Chapter 11 in Mississippi
------------------------------------------------------
Odyssey Petroleum Corp. filed under Chapter 11 of the Bankruptcy
Code (Bankr. S.D. Miss. Case No. 10-____) to seek protection from
its creditors while it works through its present financial
difficulties. The Company said it is now in negotiations with
several parties to obtain funding to move the Company forward, as
well as deal with its present liabilities.
According to The Associated Press, the Company owes almost
$2 million to its largest creditors, including more than
$1 million for an arbitration award and about $129,000 to the
Internal Revenue Service.
Odyssey Petroleum Corp. -- http://www.odysseypetroleum.com/--
is an oil and gas exploration company focused on developing
significant oil and natural gas reserves in the southern United
States.
OEMC, LLC: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------
Debtor: OEMC, LLC
32900 Capitol Avenue
Livonia, MI 48150
Bankruptcy Case No.: 10-54029
Chapter 11 Petition Date: April 28, 2010
Court: U.S. Bankruptcy Court
Eastern District of Michigan (Detroit)
Judge: Phillip J. Shefferly
Debtor's Counsel: Tracy M. Clark, Esq.
25925 Telegraph Road, Suite 203
Southfield, MI 48033-2518
Tel: (248) 352-4700
Fax: (248) 352-4488
E-mail: clark@steinbergshapiro.com
Estimated Assets: $500,001 to $1,000,000
Estimated Debts: $1,000,001 to $10,000,000
According to the schedules, the Company says that assets total
$932,262 while debts total $1,792,792.
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/mieb10-54029.pdf
The petition was signed by Carrie Sullivan, manager.
ORLEANS HOMEBUILDERS: Liberty Mutual Objects to Sale
-----------------------------------------------------
Bill Rochelle at Bloomberg News reports that Liberty Mutual
Insurance Co. objects to procedures proposed by Orleans
Homebuilders Inc. for an auction testing whether the $170 million
bid from NVR Inc. is the best offer for the Debtors' assets.
According to the report, Liberty Mutual, a provider of surety
bonds for Orleans, says the auction rules are defective because
they don't require NVR or other bidders to replace the bonds.
Liberty Mutual argues that a buyer can't take over the bonds
acquired by Orleans. Liberty Mutual also says that development
agreements with local governments will be violated unless bonds
are continually in place. Liberty contends that selling the
property to anyone will automatically discharge the bonds,
creating defaults under development agreements.
A hearing on the proposed sale procedures is scheduled for May 4.
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 CAPITAL: Ford to Invest $500MM & Acquire 91% Stake
----------------------------------------------------------
Pacific Capital Bancorp has entered into a definitive agreement
with SB Acquisition Company LLC -- a wholly owned subsidiary of
Texas billionaire Gerald Ford's Ford Financial Fund, L.P. -- for
Ford to invest approximately $500 million in the Company as part
of the Company's overall recapitalization plan.
Pacific Capital Bancorp has entered into a definitive agreement
with SB Acquisition Company LLC -- a wholly owned subsidiary of
Texas billionaire Gerald Ford's Ford Financial Fund, L.P. -- for
Ford to invest approximately $500 million in the Company as part
of the Company's overall recapitalization plan.
As part of the definitive agreement, the parties have agreed that
the Company will commence a rights offering following the closing
of the Ford investment to provide shareholders of record as of the
close of business on the day prior to the Closing Date -- Legacy
Shareholders -- the non-transferable right to purchase common
stock directly from the Company at a price of $0.20 per share,
which is the same per share price contemplated by the Ford
investment. A maximum of 20% of the pro-forma fully diluted
equity will be available for purchase by Legacy Shareholders in
the rights offering, proportionally to each Legacy Shareholder's
ownership in the Company.
Pursuant to the definitive agreement, the Company agreed to sell
to Ford, at the closing of the investment, 225,000,000 shares of
its common stock at a purchase price of $0.20 per share and
455,000 shares of newly created mandatorily convertible
participating voting preferred stock at a purchase price of $1,000
per share. The Preferred Stock will have a liquidation preference
of $1,000 per share and each share of Preferred Stock will be
convertible into a number of shares of the Company's common stock
equal to the liquidation preference divided by $0.20 (subject to
customary anti-dilution adjustments).
The investment is subject to satisfaction or waiver of certain
closing conditions, including (i) completion of a recapitalization
transaction with the United States Department of the Treasury
involving the exchange of all shares of preferred stock issued by
the Company under the Troubled Asset Relief Program Capital
Purchase Program, having an aggregate liquidation preference of
$180,634,000, and associated warrants, for shares of the Company's
common stock in an amount equal to 20% of that liquidation
preference and the amount of accrued but unpaid dividends on the
preferred shares, with the common stock valued at $0.20 per share
for this purpose; and (ii) completion of tender offers for at
least 70% of the aggregate amount of the Company's $67,330,000
aggregate liquidation amount of trust preferred securities, at a
purchase price equal to 20% of such liquidation amount, and the
Bank's $121,000,000 aggregate principal amount of subordinated
debt instruments, at a purchase price equal to 30% of such
principal amount. Completion of the foregoing transactions and of
the Ford investment would be conditioned upon each other.
The Ford investment is subject to satisfaction or waiver of
additional closing conditions, including, among others, the
receipt of requisite governmental and regulatory approvals and the
Company's receipt of approval from the NASDAQ Stock Market to
issue the securities in reliance on the shareholder approval
exemption set forth in NASDAQ Rule 5635(f).
After giving effect to the Ford investment and the exchange
transaction with the Treasury, it is expected that Ford would own
approximately 91% of the Company's common stock (on an as-
converted basis), the Treasury would own approximately 7% of the
Company's common stock, and the Company's shareholders would own
approximately 2% of the Company's common stock (in each case
without giving effect to the contemplated rights offering). With
the contemplated rights offering, Legacy Shareholders will be
offered a maximum of 20% of the pro-forma fully diluted equity for
purchase, proportionally to each Legacy Shareholder's ownership in
the Company.
Upon closing of the investment, each of the Company and Pacific
Capital Bank, N.A., will add experienced bankers Gerald J. Ford
and Carl B. Webb to its board of directors. Mr. Ford is the
Managing Member of Ford Financial Fund, L.P., and was formerly
Chairman and CEO of Golden State Bancorp, Inc. and California
Federal Bank. Mr. Webb is a Senior Principal at Ford Financial
Fund, L.P. and was formerly President, COO and a director of
Golden State Bancorp and California Federal Bank.
"Following an extensive process to assess the Company's strategic
alternatives, we determined that the Ford investment is in the
best interests of the Company and its stakeholders, and represents
the most attractive alternative available," said George Leis,
President and Chief Executive Officer of Pacific Capital Bancorp.
"We expect that the addition of $500 million in capital, together
with the overall recapitalization plan and rights offering, will
substantially strengthen the Company's capital ratios and place it
on a firm footing for the future," said Mr. Leis. "Additionally,
this gives us the strength to retain and build our franchise value
for the long-term. The combination of Ford's extensive and highly
successful experience in California banking and Pacific Capital's
significant market presence and unique customer service culture
will enable us to continue as one of the strongest community banks
along the Central Coast."
"We are taking these actions today as the best alternative
available to us to assure the Company's future," said Edward
Birch, Chairman of the Board of Directors of Pacific Capital
Bancorp. "We believe these capital strengthening actions, and the
experience provided by Ford, will position the Company to weather
the storms of today and continue its unique banking role in the
California communities we serve."
Mr. Ford said, "We are pleased to have this opportunity to invest
in a financial services franchise with such deep roots in
attractive markets in California. We look forward to helping
strengthen this institution for the benefit of all its
stakeholders, so that it can continue serving its loyal customers
and supporting its community partners, as it has done now for more
than 50 years."
There can be no assurances that the conditions to the transactions
will be satisfied or waived, or that such transactions will be
completed on the terms described.
Sandler O'Neill + Partners served as financial advisor and Manatt,
Phelps & Phillips, LLP and Wachtell, Lipton, Rosen & Katz served
as legal advisors to Pacific Capital Bancorp. J.P. Morgan served
as financial advisor and Skadden, Arps, Slate, Meagher & Flom LLP
served as legal advisor to Ford.
About Ford
Ford Financial Fund, L.P. is a private equity firm focused on
investments in financial services. Its Managing Member, Gerald J.
Ford, and Senior Principal, Carl B. Webb, have successfully
acquired and operated numerous banks and financial services
companies over the past 30 years, including Golden State Bancorp
Inc., First Gibraltar Bank, FSB and First United Bank Group, Inc.
About Pacific Capital Bancorp
Pacific Capital Bancorp is the parent company of Pacific Capital
Bank, N.A., a nationally chartered bank that operates 44 branches
under the local brand names of Santa Barbara Bank & Trust, First
National Bank of Central California, South Valley National Bank,
San Benito Bank and First Bank of San Luis Obispo.
PACIFIC CAPITAL: Posts $79.9MM Net Loss for First Quarter 2010
--------------------------------------------------------------
Pacific Capital Bancorp on Thursday announced results for the
first quarter ended March 31, 2010. The Company recorded a net
loss applicable to common shareholders of ($79.9) million, or
($1.71) per share for the first quarter of 2010, compared with
($7.9) million or ($0.17) per share for the same period in the
prior year. The Company's net loss from continuing operations for
the first quarter of 2010 was ($84.3) million, or ($1.80) per
common share, compared with a net loss from continuing operations
of ($37.6) million, or ($0.81) per common share, in the same
period of the prior year.
The Company's Refund Anticipation Loan and Refund Transfer
businesses were sold during the first quarter of 2010 and are now
treated as discontinued operations. While not a GAAP measurement,
for the first quarter of 2010, the Company generated $12.5 million
in pre-tax, pre-provision income from continued operations,
compared with $3.5 million in the same period of the prior year.
The Company recorded a provision for loan losses of $96.8 million
for the first quarter of 2010, compared with $73.5 million in the
same period of the prior year. The increase in the provision for
loan losses reflects an overall increase in credit loss experience
and a higher level of non-performing assets.
The Company's net interest income for the first quarter of 2010
was $44.3 million, compared with $47.8 million in the same quarter
of 2009. The decrease in net interest income is primarily
attributable to a reduction in average earning assets and a
decline in interest rates on earning assets. The Company's net
interest margin for the first quarter of 2010 was 2.60%, which
compares with 2.50% in the first quarter of 2009 and 2.60% in the
fourth quarter of 2009.
The Company's non-interest income was $19.6 million in the first
quarter of 2010, compared with $15.6 million in the first quarter
of 2009. The increase is due primarily to the net gain on sale of
securities increasing by $2.5 million, and the gain on sale of
loans increasing by $3.4 million. These gains were offset by a
decrease in the market value of a customer swap and lower customer
fees.
During the first quarter of 2010, the Company sold $48.6 million
in securities and $36.2 million of loans. The proceeds were
invested in more liquid assets, which had some positive impact on
the Company's risk-based capital ratios. Non-interest expense was
$51.3 million in the first quarter of 2010, compared with $59.8
million in the first quarter of 2009. The decline in non-interest
expense is primarily due to the improvement in operational
efficiencies as the Company continues its initiatives to reduce
costs.
The Company recorded an $8.2 million gain on the sale of its RAL
and RT businesses in the first quarter of 2010. The gain reflects
the $10 million in cash proceeds received from the sale, partially
offset by the write-off of remaining assets related to the RAL and
RT businesses.
In the first quarter of 2010, the Company recognized a provision
for taxes of $49,000, compared with a $32.4 million tax benefit
recorded in the first quarter of the prior year. It was assumed at
the end of the first quarter 2009 that the Company would be able
to fully utilize the tax benefit arising from the net loss
recognized that quarter through carry backs or carry forwards. At
the end of the second quarter of 2009, following the large loss
recognized that quarter and resulting uncertainty regarding future
taxable income, the Company determined that the only tax benefits
that should be recognized were those whose utilization were
assured through carry backs. All of the available carry backs were
recognized as a receivable by December 31, 2009, and virtually the
only tax expense or benefits now being recognized are adjustments
to the receivable.
The Company's total gross loans held for investment were $4.89
billion at March 31, 2010, compared with $5.17 billion at December
31, 2009, and $5.69 billion at March 31, 2009. The sequential
quarter decline in total gross loans is primarily attributable to
one of the Company's strategies to shrink its balance sheet
through scheduled amortization and early pay-off of loans, and the
sale of loans, primarily from the commercial portfolio and the
residential real estate portfolio.
The Company's total deposits were $5.42 billion at March 31, 2010,
compared with $5.37 billion at December 31, 2009, and $5.46
billion at March 31, 2009.
The Company continues to maintain a strong liquidity position. As
of March 31, 2010, the Company had $1.41 billion in cash and other
liquid assets.
The Company's balance sheet as of Dec. 31, 2009, showed
$7.372 billion in assets, $7.089 billion of debts, and
$282.4 million of stockholders' equity.
The Company's balance sheet as of Dec. 31, 2009, showed
$7.542 billion in assets, $7.178 billion of debts, and
$364.6 million of stockholders' equity.
About Pacific Capital Bancorp
Pacific Capital Bancorp is the parent company of Pacific Capital
Bank, N.A., a nationally chartered bank that operates 44 branches
under the local brand names of Santa Barbara Bank & Trust, First
National Bank of Central California, South Valley National Bank,
San Benito Bank and First Bank of San Luis Obispo.
Ernst & Young LLP, in Los Angeles, expressed substantial doubt
about the Company's ability to continue as a going concern. The
independent auditors noted that of the Company's recurring losses
from operations.
PALM INC: Expects Between $90MM and $100MM in Q4 Revenues
---------------------------------------------------------
Palm, Inc., on Wednesday updated its guidance for the fourth
quarter of fiscal year 2010. The Company expects revenues for its
fourth fiscal quarter to be in the range of roughly $90 million to
$100 million on a GAAP(1) and a non-GAAP basis. Revenues for the
fourth fiscal quarter are being impacted by slow sales of the
Company's products, which has resulted in low order volumes from
carriers. Palm also expects to close its fourth fiscal quarter
with a cash, cash equivalents and short-term investments balance
between $350 million and $400 million.
Also on Wednesday, Palm said it has signed a definitive agreement
under which with Hewlett-Packard Company will purchase Palm at a
price of $5.70 per share of Palm common stock in cash or an
enterprise value of approximately $1.2 billion. The transaction
has been approved by the HP and Palm boards of directors. The
merger consideration takes into account Palm's updated guidance
and other financial information.
As reported by the Troubled Company Reporter, Palm has tapped
Goldman Sachs Group Inc. and Frank Quattrone's Qatalyst Partners
to find a buyer. The TCR, citing Serena Saitto and Ari Levy at
Bloomberg News, said people familiar with the situation indicated
that Taiwan's HTC Corp. and China's Lenovo Group Ltd. have looked
at Palm and may make offers. According to Bloomberg, the sources
declined to be identified because a sale hasn't been announced.
Bloomberg said two of the people familiar with the matter have
indicated that Dell Inc. looked at Palm, though it decided against
an offer. Bloomberg said Jess Blackburn, a spokesman for Dell,
didn't respond to a call for comment.
Elevation Partners LP owns about 30% of Palm.
About Palm Inc.
Sunnyvale, California-based Palm, Inc. (NASDAQ: PALM) creates
intuitive and powerful mobile experiences that enable consumers
and businesses to connect to their information in more useful and
usable ways. Palm products are sold through select Internet,
retail, reseller and wireless operator channels, and at the Palm
online store at http://www.palm.com/store
At February 28, 2010, Palm had total assets of $1,007,237,000
against total current liabilities of $601,133,000; long-term debt
of $387,000,000; non-current deferred revenues of $19,001,000;
non-current tax liabilities of $6,286,000; Series B redeemable
convertible preferred stock of $272,961,000; and Series C
redeemable convertible preferred stock of $18,782,000; resulting
in stockholders' deficit of $297,926,000. At May 31, 2009,
stockholders' deficit was $406,568,000.
* * *
As reported by the Troubled Company Reporter on March 5, 2010,
Standard & Poor's Ratings Services affirmed its 'CCC+' corporate
credit rating and other ratings on Palm Inc. and revised the
ratings outlook to negative from positive. "The action reflects
the company's announcement that revenues in the February 2010
quarter and fiscal year ending May 2010 will be well below earlier
expectations," said Standard & Poor's credit analyst Bruce Hyman.
PALM INC: Hewlett-Packard to Acquire Business for $1.2 Billion
--------------------------------------------------------------
Hewlett-Packard Company, Inc., and Palm, Inc., have entered into a
definitive agreement under which HP will purchase Palm at a price
of $5.70 per share of Palm common stock in cash or an enterprise
value of approximately $1.2 billion. The transaction has been
approved by the HP and Palm boards of directors.
Under the terms of the merger agreement, Palm stockholders will
receive $5.70 in cash for each share of Palm common stock that
they hold at the closing of the merger. The holders of Palm's
Series C Preferred Stock will receive the Common Stock
Consideration on an as-converted basis. The holders of Palm's
Series B Preferred Stock will receive aggregate cash consideration
of $328.3 million, without interest, based on the existing
liquidation preference of the Series B Preferred Stock. Each
outstanding warrant will be converted into the right to receive
$2.45 in cash, without interest, for each share of Palm's common
stock subject to the warrant.
Palm's board of directors has unanimously approved the Merger
Agreement. The Merger Agreement requires that the Merger be
approved by the holders of the outstanding shares of Palm's common
stock, Series B Preferred Stock and Series C Preferred Stock,
voting together as a single class on an as-converted basis, and by
the holders of the outstanding shares of Palm common stock not
beneficially owned by Elevation Partners, L.P. or certain of its
affiliates.
In addition to the Stockholder Approvals, consummation of the
Merger is subject to other customary closing conditions including
the receipt of antitrust approvals and the absence of any
government order or other legal restraint prohibiting the Merger.
Consummation of the Merger is not subject to any financing
condition.
The Merger Agreement contains customary representations,
warranties and covenants by each of Palm and HP.
The Merger Agreement contains termination rights for both Palm and
HP, including for Palm if its board of directors changes its
recommendation of the Merger to its stockholders in connection
with a superior proposal. Upon termination of the Merger
Agreement under certain circumstances, Palm may be obligated to
pay HP a termination fee of $33,000,000.
The Merger Agreement provides that at or immediately prior to the
closing of the Merger, HP will arrange for delivery of funds to
satisfy all obligations of Palm and its subsidiaries under Palm's
Credit Agreement among Palm, the lenders party thereto, JPMorgan
Chase Bank, N.A., as Administrative Agent, and Morgan Stanley
Senior Funding, Inc., as Syndication Agent. Based on Palm's and
HP's expectation that the Merger will close during HP's third
fiscal quarter ending July 31, 2010, a prepayment fee of 1.00% is
expected to apply with respect to the aggregate principal amount
of debt that is prepaid to satisfy all obligations under the
Credit Agreement.
The acquisition is subject to customary closing conditions,
including the receipt of domestic and foreign regulatory approvals
and the approval of Palm's stockholders.
A full-text copy of the Agreement and Plan of Merger dated as of
April 28, 2010, among Palm, Inc., Hewlett-Packard Company and
District Acquisition Corporation, is available at no charge at:
http://ResearchArchives.com/t/s?60ec
A full-text copy of the Voting Agreement dated as of April 28,
2010, among Hewlett-Packard Company, certain stockholders of Palm,
Inc., and Palm, Inc., is available at no charge at:
http://ResearchArchives.com/t/s?60ed
A full-text copy of the Amendment No. 6 to Rights Agreement dated
as of April 28, 2010, between Palm, Inc., a Delaware corporation,
and Computershare Trust Company, N.A. (f/k/a Equiserve Trust
Company, N.A.) as Rights Agent, is available at no charge at:
http://ResearchArchives.com/t/s?60ee
A full-text copy of the Companies' investor presentation is
available at no charge at http://ResearchArchives.com/t/s?60ef
A full-text copy of the Companies' conference call transcript is
available at no charge at http://ResearchArchives.com/t/s?60f0
A full-text copy of the proposed merger FAQ is available at no
charge at http://ResearchArchives.com/t/s?60f1
The combination of HP's global scale and financial strength with
Palm's unparalleled webOS platform will enhance HP's ability to
participate more aggressively in the fast-growing, highly
profitable smartphone and connected mobile device markets. Palm's
unique webOS will allow HP to take advantage of features such as
true multitasking and always up-to-date information sharing across
applications.
"Palm's innovative operating system provides an ideal platform to
expand HP's mobility strategy and create a unique HP experience
spanning multiple mobile connected devices," said Todd Bradley,
executive vice president, Personal Systems Group, HP. "And, Palm
possesses significant IP assets and has a highly skilled team. The
smartphone market is large, profitable and rapidly growing, and
companies that can provide an integrated device and experience
command a higher share. Advances in mobility are offering
significant opportunities, and HP intends to be a leader in this
market."
"We're thrilled by HP's vote of confidence in Palm's technological
leadership, which delivered Palm webOS and iconic products such as
the Palm Pre. HP's longstanding culture of innovation, scale and
global operating resources make it the perfect partner to rapidly
accelerate the growth of webOS," said Jon Rubinstein, chairman and
chief executive officer, Palm. "We look forward to working with HP
to continue to deliver industry-leading mobile experiences to our
customers and business partners."
Palm's current chairman and CEO, Jon Rubinstein, is expected to
remain with the company.
As reported by the Troubled Company Reporter, Palm has tapped
Goldman Sachs Group Inc. and Frank Quattrone's Qatalyst Partners
to find a buyer. The TCR, citing Serena Saitto and Ari Levy at
Bloomberg News, said people familiar with the situation indicated
that Taiwan's HTC Corp. and China's Lenovo Group Ltd. have looked
at Palm and may make offers. According to Bloomberg, the sources
declined to be identified because a sale hasn't been announced.
Bloomberg said two of the people familiar with the matter have
indicated that Dell Inc. looked at Palm, though it decided against
an offer. Bloomberg said Jess Blackburn, a spokesman for Dell,
didn't respond to a call for comment.
Elevation Partners LP owns about 30% of Palm.
About Palm Inc.
Sunnyvale, California-based Palm, Inc. (NASDAQ: PALM) creates
intuitive and powerful mobile experiences that enable consumers
and businesses to connect to their information in more useful and
usable ways. Palm products are sold through select Internet,
retail, reseller and wireless operator channels, and at the Palm
online store at http://www.palm.com/store
At February 28, 2010, Palm had total assets of $1,007,237,000
against total current liabilities of $601,133,000; long-term debt
of $387,000,000; non-current deferred revenues of $19,001,000;
non-current tax liabilities of $6,286,000; Series B redeemable
convertible preferred stock of $272,961,000; and Series C
redeemable convertible preferred stock of $18,782,000; resulting
in stockholders' deficit of $297,926,000. At May 31, 2009,
stockholders' deficit was $406,568,000.
* * *
As reported by the Troubled Company Reporter on March 5, 2010,
Standard & Poor's Ratings Services affirmed its 'CCC+' corporate
credit rating and other ratings on Palm Inc. and revised the
ratings outlook to negative from positive. "The action reflects
the company's announcement that revenues in the February 2010
quarter and fiscal year ending May 2010 will be well below earlier
expectations," said Standard & Poor's credit analyst Bruce Hyman.
PALM INC: Moody's Reviews 'B3' Corporate Family Rating
------------------------------------------------------
Moody's Investors Service placed the ratings of Palm, Inc., under
review for possible upgrade following the announcement that it has
entered into a definitive agreement to be acquired by Hewlett-
Packard for an enterprise value of approximately $1.2 billion
(including $390 million of Palm debt). The transaction, which has
been approved by both the HP and Palm boards of directors, is
expected to close in July 2010, and subject to shareholder and
regulatory approval as well as customary closing conditions.
The review for possible upgrade reflects the potential for
improvement in Palm's credit profile following its acquisition by
HP, which is rated A2/Stable.
Ratings placed under review for possible upgrade include:
* Corporate Family Rating -- B3
* Probability of Default Rating -- B3
* $30 million senior secured revolving facility due 2012 -- B3
(LGD-3, 44%)
* $390 million senior secured term loan due 2014 -- B3 (LGD-3,
44%)
Moody's expects that the Palm's outstanding term loan will be
repaid as per the change of control provision in its current bank
credit facility. However, to the extent that they remain
outstanding, their new rating would depend on whether HP
guarantees the loan.
The last rating action for Palm was on August 13, 2008, when
Moody's lowered the company's corporate family rating to B3 with a
negative ratings outlook.
Palm, Inc., headquartered in Sunnyvale, CA, is a provider of
mobile computing and wireless communication solutions to consumer
and enterprise end-markets. The company's product portfolio
primarily consists of smartphone handsets designed around its new
proprietary webOS operation system as well as Microsoft's Windows
Mobile platform. Palm's product lineup includes smartphones such
as the Palm Pre (high-end, webOS enabled) and the Palm Pixi
(entry-level, webOS enabled). The company sells its products to
wireless carriers, distributors, retailers, and resellers, as well
as through its online stores. Non-GAAP adjusted revenues for the
company for the last twelve month period ended February 28, 2010,
was approximately $1.1 billion.
PHONETIME INC: Reveals Change to its Board of Directors
-------------------------------------------------------
Phonetime Inc. provided this news release in accordance with
National Policy 12-203-Cease Trade Orders for Continuous
Disclosure Defaults. In its initial default announcement of
April 1, 2010, the Company said that it did not file its audited
annual financial statements for the year ended December 31, 2009,
its management's discussion and analysis relating to the Annual
Financial Statements, and its annual information form on or before
the prescribed deadline of March 31, 2010.
As previously announced, on April 15, 2010 the Ontario Securities
Commission issued a temporary management cease trade order in
respect of the Company's late filing of financial statements. The
issuance of such temporary cease trade order does not affect the
ability of persons who have not been directors, officers or
insiders of the Company to trade in their securities. However,
the securities regulatory authorities, in their discretion, may
determine that it would be appropriate to issue a general issuer
cease trade order affecting all of the Company's securities.
Until such time that the Annual Required Filings are filed or the
securities regulatory authorities issue a general cease trade
order, the Company will continue to provide bi-weekly updates, as
contemplated by NP 12-203.
Other than as set out herein and in the Company's Press Release of
April 21, 2010, the Company reports that since the Default Notice:
(i) there is no material change to the information set out in the
Default Notice that has not been generally disclosed; (ii) there
has been no failure by the Company in fulfilling its stated
intentions with respect to satisfying the provisions of the
alternative information guidelines set out in NP 12-203; (iii)
there has not been any other specified default by the Company
under NP 12-203; and (iv) there is no other material information
concerning the affairs of the Company that has not been generally
disclosed.
Resignation of Director
Phonetime announced today that Wayne Silver has resigned from the
board of directors. "We wish to thank Wayne for his service."
Said Gary Clifford, Chairman and Interim CEO. Phonetime's Board
will be considering whether the vacancy created by Mr. Silver's
resignation will be filled prior to the next meeting of
Phonetime's shareholders.
Update on Financial Statements
The Company also announced that it still expects to file its
annual consolidated financial statements for its 2009, as well as
its restated annual and interim consolidated financial statements
for 2008 and 2007, by May 15th, 2010. The Company expects that it
will file its interim consolidated financial statements for the
first quarter of 2010 by May 30th, 2010.
The Company expects that its Revenues for 2009 will be
approximately $171 million compared to $157 million in 2008.
Contingent Liability
The Company has received a demand letter from a recently
terminated senior executive claiming an entitlement to severance
and related termination payments in amounts aggregating up to
$1.6M. The Company is currently reviewing this claim.
About Phonetime
Phonetime Inc. -- http://www.phonetime.com/-- is an international
telecommunications Network carrier. Phonetime provides long-
distance services to major telephone carriers around the world.
In 2009, Phonetime carried in excess of 8 billion minutes for
customers. Phonetime's common shares trade on the Toronto Stock
Exchange under the symbol PHD.
PMI GROUP: S&P Assigns 'CCC+' Rating on $261 Mil. Senior Notes
--------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'CCC+' rating on
PMI Group Inc.'s issuance of $261 million in senior convertible
notes due in April 2020. The issuance does not affect the 'CCC+'
counterparty credit rating on PMI. The outlook on the company
remains negative.
The net proceeds, including the concurrent 77,765,000 share common
stock offering, are expected to total $706 million. Standard &
Poor's expects that PMI will use $75 million of the proceeds to
pay a portion of its indebtedness under its credit facility and
$35 million-$45 million of the proceeds for working capital and
general corporate purposes. In addition, S&P expects PMI to
downstream the remaining net proceeds to PMI Mortgage Insurance
Co. (PMI MIC).
S&P believes that PMI MIC will use a significant portion of the
downstreamed proceeds for general corporate purposes, including to
recapitalize the company because of ongoing operating losses and
to meet claim obligations. Notwithstanding the increase in
capital, the 'B+' counterparty credit and financial strength
ratings on PMI MIC are unchanged considering the continuing
uncertainty regarding macroeconomic conditions and the ultimate
losses that the group could realize.
The outlook on PMI and PMI MIC is negative. Despite signs of
improvement in the macroeconomy, the U.S. economy remains fragile.
Although PMI MIC's rate of new notices has declined recently, the
extent of the operating losses it reported on April 25, 2010,
relative to its peers remains a concern. If the economic recovery
were to experience a setback, delinquencies likely would rise once
again. S&P expects operating losses to continue through 2010 and
into 2011.
In addition, PMI -- as with most of its peers -- faces increasing
litigation risk associated with ongoing rescission activity.
Because of the extent of rescission activity that has occurred
during this loss cycle, adverse judgments could have a significant
adverse impact on PMI's profitability and capitalization. If an
economic setback or adverse judgments related to rescission
activity were to occur and result in higher delinquencies or
losses incurred, PMI's and PMI MIC's capital could be
significantly impaired. This could lead us to lower its ratings
on the companies. If S&P sees significant improvement in
macroeconomic conditions that translates into declining
delinquencies, and ultimately into lower loss activity, S&P could
raise the ratings.
Ratings List
PMI Group Inc.
Counterparty Credit Rating CCC+/Negative/--
New Rating
PMI Group Inc.
Senior Unsecured
$261 mil. convertible notes
due in April 2020 CCC+
PORSCHE AUTOMOBILE: Losses From Lawsuit Expands to $2 Billion
-------------------------------------------------------------
Eighteen investment funds joined the lawsuit against Porsche
Automobil Holding SE and two of its former executives, Wendelin
Wiedeking and Holger Haerter, asserting fraud and securities
manipulation in relation to Porsche SE's failed 2008 attempt to
take over Volkswagen AG. With the addition of the new plaintiffs,
the funds -- now 35 in number -- seek to recover more than
$2 billion dollars in losses suffered after Porsche SE triggered
what The New York Times called "a short squeeze of historic
proportions."
The Amended Complaint, filed this morning in Manhattan federal
court, explains in greater detail how Porsche SE manipulated the
price of VW stock as it secretly cornered the market in VW shares.
According to the Amended Complaint, Porsche SE hid that it was
cornering the market in VW's freely traded shares by repeatedly
issuing misleading statements about its activities and by
spreading purchases of call options around to several
counterparties to avoid detection of its increasing control. The
scheme induced the plaintiff funds to establish short positions on
VW stock. When Porsche SE suddenly revealed the extent of its
true control of VW shares on October 26, 2008, a massive short
squeeze ensued. The price of VW shares skyrocketed several
hundred percent, briefly topping 1,000 Euros. Investors who had
shorted VW lost billions covering their positions in the squeeze.
Porsche SE collected outrageous profits at the expense of
plaintiffs and others by releasing some of its shares into the
market at artificial prices.
The filing reveals previously unknown details of Porsche SE's
plan. The new allegations include that:
Less than a week before Porsche SE revealed the truth -- that it
had amassed control of more than 74 percent of VW's shares -- it
conducted phone calls with investment advisors in New York during
which Porsche SE sought to reassure the New York-based investment
advisors that it was nowhere near 75 percent control. Among the
false statements Porsche SE made was that although it would
acquire a simple majority of VW shares, "going to 75% is not on
the agenda." Porsche SE told another fund that it would stop
acquiring shares after achieving 50-55% control.
Porsche SE admitted to at least one plaintiff that it was
spreading its options trades around to multiple counterparties to
avoid detection.
Porsche SE's fraudulent strategy deliberately targeted short
sellers. In order to secretly obtain 75 percent ownership in VW,
Porsche needed short sellers to borrow stock from owners who would
not or could not sell the stock themselves and then to sell it to
Porsche or Porsche's call-option counterparties. Without the
additional supply created by short sellers, Porsche could never
have gained control of 75 percent.
Porsche SE financed its call-option strategy in part through
selling put options. As the price of VW declined in the third week
of October 2008, Porsche SE's liability on the puts it had sold
threatened to force the company into bankruptcy. It avoided this
threat by forcing the price of VW up, which it accomplished by
announcing its call-option position on October 26, triggering the
squeeze.
The case is pending in the Southern District of New York, where it
is captioned as Elliott Associates, L.P., et al, v. Porsche
Automobil Holding SE, et al, No. 10-civ-532 (HB)(THK).
The funds are represented by Bartlit Beck Herman Palenchar & Scott
LLP (see www.bartlit-beck.com) and Kleinberg, Kaplan, Wolf &
Cohen, P.C.
About Porsche Automobil
Headquartered in Stuttgart, Germany, Porsche Automobil Holding SE
-- http://www.porsche-se.com/-- is a holding company engaged in
the car manufacture industry. The Company's core products are
sports cars and all-terrain vehicles. The Porsche sports car
range includes the Boxster, the Cayman, the 911 and the Carrera
GT. The Boxster and the Boxster S are contemporary
reinterpretations of the Company's original roadsters, the 356/1
and the 550 Spyder. There are several varieties of the 911,
representing the model's continuous evolution. The Carrera GT has
the race-derived chassis construction and minimum weight. The
Company's all-terrain models, Cayenne, Cayenne S, Cayenne Turbo
and Cayenne Turbo S are balanced, four-wheel drive vehicles for
on-road and off-road use. Porsche Automobil Holding SE also
offers financing services, spare parts and accessories for new and
classic models, as well as an approved used car service.
* * *
As reported in the Troubled Company Reporter-Europe on March 19,
2010, The Financial Times said that Porsche sold half of its
sports car business to VW in December to prevent the family-owned
carmaker from being crushed by its large debt load. The FT
relates the carmaker said it had used most of the proceeds from
the EUR3.9 billion sale to pay back debt, reducing its net debt
from about EUR10 billion a year earlier to EUR6.1 billion at the
end of January.
PROTECTION ONE: Monarch Agrees to Support GTCR Acquisition
----------------------------------------------------------
Protection One Inc. on April 26, 2010, entered into two agreements
with Monarch Alternative Capital LP and its affiliated entities in
connection with Protection One's deal to be acquired by affiliates
of GTCR. The Monarch agreements are:
-- Tender and Support Agreement, dated as of April 26, 2010,
by and among Protection Holdings, LLC, Protection
Acquisition Sub, Inc. and Monarch Alternative Capital LP
-- Letter Agreement, dated as of April 26, 2010, by and among
Protection One, Inc., POI Acquisition, L.L.C, and Monarch
Master Funding Ltd.
As reported by the Troubled Company Reporter, POI, Protection
Holdings, LLC as Parent; and Protection Acquisition Sub, Inc., an
indirect, wholly owned subsidiary of Parent, on April 26, 2010,
entered into an Agreement and Plan of Merger. Acquisition Sub has
agreed to commence a tender offer to acquire all of POI's
outstanding shares of Common Stock, for $15.50 per share to the
seller in cash, net of applicable withholdings and without
interest. The Merger Agreement also provides that, following
completion of the Offer, Acquisition Sub will be merged with and
into POI with POI surviving the Merger as a wholly owned
subsidiary of Parent. At the effective time of the Merger, all
remaining outstanding shares of Common Stock not tendered in the
Offer -- other than Shares owned by Parent, Acquisition Sub, POI
and its subsidiaries -- will be acquired for cash at the Offer
Price and on the terms and conditions set forth in the Merger
Agreement.
Monarch has agreed to validly tender the shares owned by it or by
entities whose investments it manages.
POI will reimburse POIA, Monarch and their affiliates for their
out-of-pocket costs and expenses reasonably incurred in connection
with the preparation of the Agreements up to, an aggregate maximum
amount, collectively for POIA, MAC and their affiliates, of
$700,000.
As of April 26, 2010, Monarch Alternative Capital LP; Monarch
Master Funding Ltd.; Monarch Capital Master Partners LP; and, as
successors to MMFL's investment in POI, Monarch Debt Recovery
Master Fund Ltd and Monarch Opportunities Master Fund Ltd, may be
deemed to beneficially own in the aggregate 5,917,732 shares or
roughly 23.27% of the common stock of Protection One.
A full-text copy of Monarch's regulatory filing is available at no
charge at http://ResearchArchives.com/t/s?60f2
Protection One's financial advisor in the transaction is J.P.
Morgan Securities Inc. and its legal advisor is Kirkland & Ellis
LLP. Lazard Freres & Co. LLC advised Protection One's board of
directors and its independent transactions committee with respect
to the fairness of the offer price to be paid in the transaction.
Morgan Keegan & Company, Inc. and Barclays Capital served as M&A
advisors and Barnes Associates served as an industry advisor to
GTCR. Latham & Watkins LLP and Skadden, Arps, Slate, Meagher &
Flom LLP provided GTCR legal counsel.
About GTCR
Founded in 1980, GTCR -- http://www.gtcr.com/-- is a private
equity firm focused on investing in growth companies in the
Financial Services & Technology, Healthcare and Information
Services & Technology industries. The Chicago-based firm
pioneered the "Leaders Strategy" -- finding and partnering with
world-class leaders as the critical first step in identifying,
acquiring and building market-leading companies through
acquisitions and organic growth. Since its inception, GTCR has
invested more than $8.0 billion in over 200 companies.
About Protection One
Protection One, Inc. -- http://www.ProtectionOne.com/-- is
principally engaged in the business of providing security alarm
monitoring services, including sales, installation and related
servicing of security alarm systems for residential and business
customers. The Company also provides monitoring and support
services to independent security alarm dealers on a wholesale
basis. Affiliates of Quadrangle Group LLC and Monarch Alternative
Capital LP own roughly 70% of the Company's common stock.
On March 24, 2010, Protection One filed its annual report on Form
10-K for the year ended December 31, 2009, showing $571.9 million
in assets and $631.0 million of debts, for a stockholders' deficit
of $59.1 million.
RCLC INC: Further Extends Lender Forbearance Agreement
------------------------------------------------------
RCLC, Inc., disclosed the Company, formerly known as Ronson
Corporation, has extended the Asset Purchase Agreement dated
May 15, 2009, among the Company, Ronson Aviation, Inc., and
Hawthorne TTN Holdings, LLC, to April 30, 2010. The APA provides
for the sale of substantially all of the assets of Ronson
Aviation, excluding cash and accounts receivable, to Hawthorne.
The extension amends the APA so that the Company is now able to
offer to sell Ronson Aviation to other potential purchasers, and
the breakup fee is eliminated if the Company sells Ronson Aviation
to a third party after April 30, 2010. The Company is hopeful
that the sale to Hawthorne will ultimately be completed; however,
Hawthorne's financing arrangements have been delayed and Hawthorne
is unable to commit to a final closing date. Therefore, the
Company intends to investigate its options, including contacting
other potential purchasers.
The Company also announced that the Company's primary lender,
Wells Fargo Bank, National Association, has further extended its
moratorium during which the bank will not assert rights relating
to existing events of default through May 5, 2010, or such earlier
date permitted under the company's agreement with the bank. Among
other reasons, the bank may terminate the moratorium if, in the
Lender's discretion, it determines that the company is no longer
pursuing a liquidity transaction.
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.
REMEDIATION FINANCIAL: Plan Outline Hearing Continued Until May 11
------------------------------------------------------------------
The Hon. Charles G. Case II of the U.S. Bankruptcy Court for the
District of Arizona has continued until May 11, 2010, at
11:00 a.m., the hearing on the disclosure statement explaining
RFI Realty, Inc.'s Chapter 11 Plan.
According to the Disclosure Statement, the Plan implements, and
continues to abide by, several major settlements and agreements
entered into by the Debtors during the proceedings. The Debtors
believe that, together, the agreements and the Plan provide the
most efficient and cost-effective means for payment of claims
through sale of the Debtors' most valuable assets -- the real
property and entitlements, and associated claims and other assets.
The Plan implements the key agreements, which create a very
substantial fund for the remediation of the real property, provide
for the sale of substantially all of the Debtors' assets, and
otherwise settle and resolve claims.
The Plan provides for the payment in full of all administrative
claims and expenses and all other claims. Sale proceeds will be
used to pay past or future priming liens as may be necessary to
fund operating and administrative payments. The necessity for the
priming liens is reduced to the extent that administrative and
operating expenses are able to be funded from unencumbered sources
and from the buyer's periodic payments made under SunCal Santa
Clarita, L.L.C. PSA. The Debtors expect to need to draw a priming
lien to the extent that unencumbered sources and the interim
payments under the SunCal PSA are insufficient to provide for
adequate budgeted reserves, and meet administrative and operating
obligations.
The Posta Bella Lenders Settlement has budgeted for operating and
administrative expenses and provided sources for the expenses both
in the monthly budget and budgeted from the sales proceeds at
closing of a sale of a real property.
Claims for remediation, as the claims of the Castaic Lake Water
Agency litigation settlement Agreement Plaintiffs and The
California Department of Toxic Substances Control are to be funded
as directed and provided in the CCSA and CLWA settlement from the
funds om deposit in SF Escrow 1 and SF Escrow 2 and other sources
for remediation.
The Plan does not provide for any distribution on account of
claims made by insider unsecured creditors.
The Plan allocates an amount for unsecured claims that are not for
remediation in the Santa Clarita, L.L.C. estate as a percentage
(3.28%) of funds remaining, which are funds available for
distribution after payment of higher priority claims. The Debtors
estimate that the allocation with produce funds totaling
$1 million to non-insider SCLLC unsecured claims. The Debtors do
not believe that non-insider SCLLC allowed claims will be paid in
full.
The Plan provides for no distribution to holders of interests.
The Plan provides for interests to remain subject to the voting
trust until the bankruptcy cases are closed.
Pursuant the CCSA, Bermite Recovery, L.L.C. has the right to
borrow up to $7 million secured by a lien with priority over all
existing liens. The Debtors have negotiated with First Credit
Bank to provide a first position secured credit facility to
Bermite for up to $7 million in the event the financing is
necessary. The Debtors do not intend to draw the FCB line unless
the buyer terminates the SunCal PSA.
A full-text copy of the Disclosure Statement is available for free
at http://researcharchives.com/t/s?4a8a
The deadline for filing statements of remaining unresolved issues
with Debtors' amended disclosure statement is also extended to
May 6, 2010.
About Remediation Financial
Headquartered in Phoenix, Arizona, Remediation Financial Inc. is a
real estate developer. Remediation Financial and Santa
Clarita, L.L.C., filed for Chapter 11 protection on July 7, 2004
(Bankr. D. Ariz. Case No. 04-11910). RFI Realty Inc. filed on
June 15, 2004 (Bankr. D. Ariz. Case No. 04-10486) and Bermite
Recovery LLC filed on Sept. 30, 2004 (Bankr. D. Ariz. Case No. 04-
17294). The cases are jointly administered under RFI Realty Inc.
Alan A. Meda, Esq., Alisa C. Lacey, Esq., Christopher Graver,
Esq., and Christopher C. Simpson, Esq., at Stinson Morrison Hecker
LLP; Brenda K. Martin, Esq., and Warren J. Stapleton, Esq., at
Osborn Maledon, PA; and Thomas J. Salerno, Esq., at Squire,
Sanders & Dempsey, LLP, represent the Debtors in their
restructuring efforts. No official committee of unsecured
creditors has been appointed in this case. When the Debtors filed
for protection from their creditors, they listed assets of more
than $100 million and debts of $10 million to
$50 million.
RONALD HOLLEY: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------
Joint Debtors: Ronald W. Holley
fdba Country Squire Estates Ltd
fdba Vintage Village Ltd
fdba R & R Butler Ltd
fdba R & M Stateline Ltd
fdba RW Holley Enterprise
Marsha L. Holley
4193 Helmick Avenue
Norton, OH 44203
Bankruptcy Case No.: 10-51963
Chapter 11 Petition Date: April 27, 2010
Court: United States Bankruptcy Court
Northern District of Ohio (Akron)
Judge: Marilyn Shea-Stonum
Debtor's Counsel: David A. Mucklow, Esq.
4882 Mayfair Rd
North Canton, OH 44720
Tel: (330) 896-8190
Fax: (330) 896-8201
E-mail: davidamucklow@yahoo.com
Scheduled Assets: $4,557,124
Scheduled Debts: $6,024,212
A list of the Company's 20 largest unsecured creditors filed
together with the petition is available for free at
http://bankrupt.com/misc/ohnb10-51963.pdf
The petition was signed by Ronald W. Holley and Marsha L. Holley.
ROSEMARIE DEVELOPMENT: Case Summary & 14 Largest Unsec Creditors
----------------------------------------------------------------
Debtor: Rosemarie Development, LLC
10818 Catharpin Road
Spotsylvania, VA 22553
Bankruptcy Case No.: 10-33018
Chapter 11 Petition Date: April 27, 2010
Court: United States Bankruptcy Court
Eastern District of Virginia (Richmond)
Judge: Douglas O. Tice Jr.
Debtor's Counsel: Roy M. Terry, Jr., Esq.
DurretteBradshaw PLC
1111 East Main Street, 16th Floor
Richmond, VA 23219
Tel: (804) 775-6948
Fax: (804) 775-6911
E-mail: rterry@durrettebradshaw.com
Estimated Assets: $500,001 to $1,000,000
Estimated Debts: $1,000,001 to $10,000,000
A list of the Company's 14 largest unsecured creditors filed
together with the petition is available for free at
http://bankrupt.com/misc/vaeb10-33018.pdf
The petition was signed by Bowen Scott Cook, president.
ROYAL CARIBBEAN: S&P Gives Stable Outlook; Affirms 'BB-' Rating
---------------------------------------------------------------
Standard & Poor's Ratings Services revised its rating outlook for
Royal Caribbean Cruises Ltd. to stable from negative. All ratings
on the company, including the 'BB-' corporate credit rating, were
affirmed.
"The outlook revision to stable reflects S&P's expectation that
improving booking and pricing trends so far in 2010 are
sustainable over the intermediate term, and that the company's net
revenue yield measure will increase 3% to 4% over each of the next
two years," noted Standard & Poor's credit analyst Emile Courtney.
This reflects S&P's increasing confidence about continued
improvement in consumer spending on cruising, and moderate GDP
growth in the U.S. and in Europe in 2010 and 2011, and compares to
S&P's previous expectation for flat net revenue yields in 2010
year over year.
S&P's net revenue yield expectation is notwithstanding Royal's
addition of meaningful capacity of about 11% in 2010 and 9% in
2011 from new ship deliveries. As a result, S&P believes that the
company is likely to increase EBITDA sufficiently over the next
two years to reduce S&P's measure of lease-adjusted leverage to
less than 7x in early 2011. This would represent a significant
improvement compared to S&P's calculation for adjusted leverage of
8.3x at December 2009.
In addition, S&P anticipates that its measure for Royal of funds
from operations (after interest costs but before working capital
changes) to total adjusted debt is likely to improve to the low
teens percentage area over the next two years, from about 10% in
2009, largely because of improved profitability. This level of
improvement in FFO to adjusted total debt is in line with the
current 'BB-' rating, given S&P's satisfactory view of Royal's
business. Also supporting a stable outlook at the current 'BB-'
rating is S&P's belief that Royal will improve its already
adequate liquidity position, increase EBITDA coverage of interest
to near 3x by 2011, and maintain a good level of cash and revolver
availability. S&P also expects the company to continue to have
good access to capital markets and government-guaranteed ship
financing arrangements.
S&P's rating and outlook also incorporate S&P's expectation that
improving net revenue yield and capacity increases will result in
2010 revenue growth in the mid- to high-teens percentage area.
This and cost-containment efforts would likely enable EBITDA to
grow between 25% and 30% in 2010. S&P has incorporated into its
rating and outlook that revenue in 2011 would grow between 10% and
15%, mostly due to additional capacity, and that 2011 EBITDA would
grow around 15%. In this scenario, S&P projects that funded debt
balances would rise by about $1.2 billion in 2010 and that
leverage (adjusted for operating leases and port commitment fees)
would decrease to just more than 7x by year-end 2010, due to
EBITDA growth offsetting additional debt balances. With continued
EBITDA growth expected into 2011, S&P believes that Royal could
reduce adjusted leverage to below 7x in early 2011, which would be
in line with the current rating. Given a substantial reduction in
expected levels of capital spending in 2011 and 2012 (about
$1 billion in each year) compared to 2010 (about $2.3 billion
capital spending is expected), S&P believes Royal could begin to
generate positive free operating cash flow by 2011.
The 'BB-' rating on Miami, Fla.-based Royal Caribbean reflects a
highly leveraged financial risk profile, the capital-intensive
nature of the cruise industry, and the sensitivity of the travel
and leisure sector to economic cycles. Royal's solid brands, a
relatively young and high-quality fleet of ships, high barriers to
entry in the cruise industry, and an experienced management team
somewhat offset these factors.
S. P. INTERNATIONAL: Voluntary Chapter 11 Case Summary
------------------------------------------------------
Debtor: S. P. International, Inc.
3506 Cedar Springs Road
Dallas, TX 75219
Bankruptcy Case No.: 10-32870
Chapter 11 Petition Date: April 27, 2010
Court: United States Bankruptcy Court
Northern District of Texas (Dallas)
Judge: Stacey G. Jernigan
Debtor's Counsel: Alan Lintel, Esq.
3506 Cedar Springs Rd.
Dallas, TX 75219
Tel: (469) 236-8333
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 Suzanne Harper, president.
SAC II: Section 341(a) Meeting Scheduled for May 24
---------------------------------------------------
The U.S. Trustee for Region 17 will convene a meeting of SAC II's
creditors on May 24, 2010, at 4:00 p.m. The meeting will be held
at 300 Booth Street, Room 2110, Reno, NV 89509.
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.
Reno, Nevada-based SAC II filed for Chapter 11 bankruptcy
protection on April 20, 2010 (Bankr. D. Nev. Case No. 10-51440).
Sallie B. Armstrong, Esq., who has an office in Reno, Nevada,
assists the Company in its restructuring effort. The Company
listed $10,000,001 to $50,000,000 in assets and $1,000,001 to
$10,000,000 in liabilities.
These affiliates filed 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.
SEAGATE TECHNOLOGY: Fitch Upgrades Issuer Default Rating to 'BB+'
-----------------------------------------------------------------
Fitch Ratings has taken these rating actions on Seagate Technology
and its subsidiaries:
Seagate
-- Issuer Default Rating upgraded to 'BB+' from 'BB';
-- Secured first lien credit facility affirmed at 'BBB-'.
Seagate Technology HDD Holdings
-- IDR upgraded to 'BB+' from 'BB';
-- Secured first lien credit facility affirmed at 'BBB-';
-- Senior unsecured debt upgraded to 'BB+' from 'BB'.
Seagate Technology US Holdings
-- IDR upgraded to 'BB+' from 'BB';
-- Senior unsecured debt upgraded to 'BB+' from 'BB';
-- Subordinated debentures upgraded to 'BB+' from 'BB'.
Seagate Technology International
-- IDR upgraded to 'BB+' from 'BB';
-- Secured second lien notes upgraded to 'BBB-' from 'BB+'.
The Rating Outlook is Stable.
Approximately $2.4 billion of total debt is affected by Fitch's
action, including the company's undrawn $350 million secured
revolving credit facility.
The ratings upgrades reflect Seagate's:
-- Better than expected financial performance due to a strong
rebound in end-market demand, continued benign pricing
environment as supply and demand conditions for the hard disk
drive industry remain in equilibrium, and the company's
improving execution on new product introductions. Fitch
believes pricing conditions in the HDD industry could be
better than historical norms, especially in the near-term,
supported by: i) A gradual improvement in the global economy;
ii) Increasing evidence of an enterprise refresh cycle for
personal computers and servers attributable to Windows
7 and overall aging of the installed base; iii) Constraints
in the HDD supply chain; iv) Prudent HDD capacity additions
given the severity of the recent global economic downturn;
and v) Tight channel inventory.
-- Material improvement in credit protection measures due to
strong revenue growth and profit margin expansion given the
significant operating leverage in the company's business
model, cost savings from prior restructuring actions and a
favorable pricing environment. In the latest 12 months
ended April 2, 2010, EBITDA more than doubled to
approximately $2.4 billion (21.6% of revenue) from
$1.1 billion (10.2%) in the year-ago period on revenue growth
of 7.1%. As a result, total leverage (operating EBITDA/
total debt) declined to 0.8 times at April 2, 2010, from 2.2x
in the prior year, well below Fitch's projected leverage of
1x-1.5x by the end of fiscal 2010 (June 30). Similarly,
interest coverage strengthened to 14.4x in the LTM ended
April 2, 2010, compared with 8.4x in the year-ago period.
Fitch believes Seagate's credit metrics will continue to
strengthen based on improving visibility with respect to end-
market demand and debt reduction, as the company intends to
gradually reduce total outstanding debt to $1.5 billion-
$1.7 billion in the long-term compared with approximately
$2 billion at April 4, 2010.
-- Strengthening liquidity profile, primarily attributable to a
material rebound in free cash flow, which increased to
$1.3 billion in the LTM ended April 2, 2010, compared with
usage of $9 million in the year-ago period. Fitch expects
free cash flow in fiscal year 2010 to be approximately
$1.5 billion compared with $58 million in fiscal 2009.
The ratings are supported by these factors:
-- Broad product portfolio and leading market share based on
revenue in the overall HDD industry;
-- The company's scale and vertically integrated model, which
reduces per unit manufacturing costs;
-- Continued growth of digital rich media by consumers and
enterprise storage requirements bode favorable for longer-
term HDD unit demand.
Fitch's rating concerns consist of:
-- Substantial volatility in earnings and free cash flow due to
the cyclicality of the HDD industry and significant fixed
costs;
-- Seagate's ability to sustain a time to market advantage
critical to achieving market share gains and maintaining
overall profitability, given formidable competition,
especially from Western Digital Corporation and Hitachi
Global Storage Technologies;
-- Consistent declines in average selling prices for HDDs due to
intense competition and low switching costs;
-- Long-term threat of technology substitution from NAND flash-
based solid state drives. Seagate shipped its initial SSD
product for the industry standard server market in September
2009.
Total liquidity as of April 2, 2010, was nearly $2.7 billion,
consisting of $2.3 billion of cash, the vast majority of which is
readily accessible without adverse tax considerations, and
$350 million of availability under an undrawn senior secured
credit facility due in September 2011. The facility is secured by
a first priority lien on all of Seagate's tangible and intangible
assets, including intellectual property, contracts and certain
real estate, stock of the borrower's (Seagate and Seagate HDD)
direct and indirect U.S. subsidiaries and at least 66% of the
stock of foreign subsidiaries. Under the terms of the amended and
restated credit agreement dated April 3, 2009, financial covenants
consist of minimum fixed charge coverage of 1.5x and maximum net
leverage ratio of 1.5x. In addition, the facility requires
minimum liquidity of $500 million, excluding any cash received
from drawing upon the credit facility. Furthermore, liquidity is
supported by the aforementioned improvement in free cash flow.
Fitch estimates total debt is approximately $2 billon, consisting
of:
-- $559 million of 6.375% senior notes due October 2011 (Seagate
HDD);
-- $412 million of 10% senior secured second-priority notes due
April 2014; (STI)
-- $600 million of 6.8% senior notes due October 2016 (Seagate
HDD);
-- $326 million of 2.375% convertible senior notes due 2012
(STUS);
-- $77 million of 6.8% convertible senior notes due 2010 (STUS);
-- $36 million of 5.75% subordinated debentures due 2012 (STUS).
SHARPER IMAGE: Has Green Light to Sue Ex-CEO to Recoup Severance
----------------------------------------------------------------
Peg Brickley at Dow Jones' Daily Bankruptcy Review reports that
Judge Kevin Gross on Wednesday cleared the way for The Sharper
Image Corp. to claw back $6 million worth of severance paid to
ousted chief executive Richard Thalheimer. Ms. Brickley reports
that Judge Gross held that the payment tripped a technical
provision in the Bankruptcy Code that allows troubled companies to
recover payments made to insiders in the two years before a
collapse.
The report notes the Company's former founder had collected his
going-away pay less than a year before, in a settlement negotiated
with a board dominated by new private-equity investors, which
included Knightsbridge Capital Partners.
Mr. Thalheimer said he would appeal the decision. According to
the report, Mr. Thalheimer said Wednesday Sharper Image was not in
financial distress in 2006 when he was pushed out. The report
relates Mr. Thalheimer argued that Jerry Levin, the new chief
executive added to the board by Knightsbridge, and other top
executives were purchasing stock and "bragging that the stock
price would double in six months." He also pointed out the
private-equity investors bought the rest of his stock for
$25 million months after pushing him out.
The report, citing court documents, says any recovery from Mr.
Thalheimer will be used to cover the professional fee bills rung
up in bankruptcy case.
About Sharper Image
Headquartered in San Francisco, California, Sharper Image Corp. --
http://www.sharperimage.com/-- was a multi-channel specialty
retailer. It operated in three principal selling channels: the
Sharper Image specialty stores throughout the U.S., the Sharper
Image catalog and the Internet. The Company has operations in
Australia, Brazil and Mexico. In addition, through its Brand
Licensing Division, it was also licensing the Sharper Image brand
to select third parties to allow them to sell Sharper Image
branded products in other channels of distribution.
The Company filed for Chapter 11 protection on February 19, 2008
(Bankr. D. Del. Case No. 08-10322). Judge Kevin Gross presides
over the case. Harvey R. Miller, Esq., Lori R. Fife, Esq., and
Christopher J. Marcus, Esq., at Weil, Gotshal & Manges, LLP,
serve as the Debtor's lead counsel. Steven K. Kortanek, Esq.,
and John H. Strock, Esq., at Womble, Carlyle, Sandridge & Rice,
P.L.L.C., serve as the Debtor's local Delaware counsel.
An official committee of unsecured creditors has been appointed in
the case. Cooley Godward Kronish LLP is the Committee's lead
bankruptcy counsel. Whiteford Taylor Preston LLC is the
Committee's Delaware counsel.
When the Debtor filed for bankruptcy, it listed total assets of
$251,500,000 and total debts of $199,000,000. As of June 30,
2008, the Debtor listed $52,962,174 in total assets and
$39,302,455 in total debts.
Sharper Image sought and obtained the Court's approval to change
its name to "TSIC, Inc." in relation to an Asset Purchase
Agreement by the Debtor with Gordon Brothers Retail Partners, LLC,
GB Brands, LLC, Hilco Merchant Resources, LLC, and Hilco Consumer
Capital, LLC.
SIX FLAGS: To Have Confirmed Chapter 11 Reorganization Plan
-----------------------------------------------------------
Bill Rochelle at Bloomberg News reports that Six Flags Inc.
settled an objection from operating company bondholders, paving
for the bankruptcy judge to say at the April 28 confirmation
hearing that he will sign an order approving the Chapter 11
reorganization plan. The bankruptcy judge also rejected an effort
by Resilient Capital Management LLC to hold up plan approval while
equity holders sought to show the company is worth enough that
they shouldn't be wiped out.
Bankruptcy Law360 says Six Flags Inc. should be able to emerge
from Chapter 11 within the next few days, following the deal with
the objectors to the plan.
About Six Flags
Headquartered in New York City, Six Flags, Inc., is the world's
largest regional theme park company with 20 parks across the
United States, Mexico and Canada.
Six Flags filed for Chapter 11 protection on June 13, 2009 (Bankr.
D. Del. Lead Case No. 09-12019). Paul E. Harner, Esq., Steven T.
Catlett, Esq., and Christian M. Auty, Esq., at Paul, Hastings,
Janofsky & Walker LLP in Chicago, Illinois, act as the Debtors'
lead counsel. Daniel J. DeFranceschi, Esq., and L. Katherine
Good, Esq., at Richards, Layton & Finger, P.A., in Wilmington,
Delaware, act as local counsel. Cadwalader Wickersham & Taft LLP,
serves as special counsel. Houlihan Lokey Howard & Zukin Capital
Inc., serves as financial advisors, while KPMG LLC acts as
accountants. Kurtzman Carson Consultants LLC serves as claims and
notice agent. As of March 31, 2009, Six Flags had $2,907,335,000
in total assets and $3,431,647,000 in total liabilities.
Bankruptcy Creditors' Service, Inc., publishes Six Flags
Bankruptcy News. The newsletter provides gavel-to-gavel coverage
of the Chapter 11 proceedings undertaken by Six Flags Inc. and its
various affiliates. (http://bankrupt.com/newsstand/or 215/945-
7000).
SOUTHLAND PROPERTIES: Chapter 11 Case Summary & Unsecured Creditor
------------------------------------------------------------------
Debtor: Southland Properties, LLC
3120 Fairway Drive
Morgantown, WV 26508
Bankruptcy Case No.: 10-00923
Chapter 11 Petition Date: April 27, 2010
Court: United States Bankruptcy Court
Northern District of West Virginia (Clarksburg)
Judge: BK Patrick M. Flatley
Debtor's Counsel: David M. Jecklin, Esq.
Gianola, Barnum, & Wigal, L.C.
1714 Mileground
Morgantown, WV 26505
Tel: (304) 291-6300
Fax: (304) 291-6307
E-mail: djecklin@gbwlaw.net
Scheduled Assets: $7,000,000
Scheduled Debts: $11,306,207
In its list of 20 largest unsecured creditors, the Company placed
only one entry:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Dietrich Steve Fansler $2,535,555
3120 Fairway Drive
Morgantown, WV 26508
The petition was signed by Dietrich Steve Fansler, operating
manager.
SPANSION INC: Noteholders Appeal Confirmation Order
---------------------------------------------------
Bankruptcy Law360 reports that reports that an ad hoc committee of
convertible noteholders is appealing an order by a bankruptcy
judge approving Spansion Inc.'s latest reorganization plan, saying
the $425 million they've raised to bolster a competing plan will
provide a better exit deal for creditors.
Law360 says the committee filed a notice Tuesday that it was
appealing Bankruptcy Judge Kevin Carey's confirmation of the
Spansion plan to the U.S. District Court for the District of
Delaware.
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: Files List of 3 Largest Unsecured Creditors
------------------------------------------------------------------
Specialty Acquisition Corp. has filed with the U.S. Bankruptcy
Court for the District of Nevada a consolidated list of its three
largest unsecured creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Robison, Belaustegul, Sharp
And Low
71 Washington Street
Reno, NV 89503 Legal Fees $500
Tholl Fence, Inc.
800 Glendale Avenue
Sparks, NV 89432 Trade Debt $330
City of Phoenix
Water Svcs. Dept.
P.O. Box 29663
Phoenix, AZ 85038 Utilities $5
Reno, Nevada-based Specialty Acquisition Corp. filed for Chapter
11 bankruptcy protection on April 20, 2010 (Bankr. D. Nev. Case
No. 10-51437). Sallie B. Armstrong, Esq., at Downey Brand,
assists the Company in its restructuring effort. The Company
estimated its assets and debts at $10,000,001 to $50,000,000.
These affiliates 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 ACQUISITION: Section 341(a) Meeting Scheduled for May 17
------------------------------------------------------------------
The U.S. Trustee for Region 17 will convene a meeting of Specialty
Trust, Inc.'s creditors on May 17, 2010, at 4:00 p.m. The
meeting will be held at 300 Booth Street, Room 2110, Reno, NV
89509.
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.
Reno, Nevada-based Specialty Acquisition Corp. filed for Chapter
11 bankruptcy protection on April 20, 2010 (Bankr. D. Nev. Case
No. 10-51437). Sallie B. Armstrong, Esq., at Downey Brand,
assists the Company in its restructuring effort. The Company
estimated its assets and debts at $10,000,001 to $50,000,000.
These affiliates 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: Files List of Seven Largest Unsecured Creditors
----------------------------------------------------------------
have filed with the U.S. Bankruptcy Court for the District of
Nevada a list of its seven largest unsecured creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
The Bank of New York
101 Barclay Street - 4W Subordinated
New York, NY 10286 Unsecured Note $29,072,500
Tobin & Tobin
500 Sansome Street, Suite 800
San Francisco, CA 94111 Legal Fees $12,092
Southwest Ground-water
Consultants
3033 N 44th Street, Suite 120
Phoenix, AZ 85018 Trade Debt $5,454
RFB Consulting Trade Debt $5,495
Jill Savini Design Trade Debt $5,000
Great Basin Internet Services Trade Debt $35
Informative Research Trade Debt $21
Reno, Nevada-based Specialty Trust, Inc., filed for Chapter 11
bankruptcy protection on April 20, 2010 (Bankr. D. Nev. Case No.
10-51432). Sallie B. Armstrong, Esq., at Downey Brand, assists
the Company in its restructuring effort. The Company listed
$100,000,001 to $500,000,000 in assets and $50,000,001 to
$100,000,000 in liabilities.
These affiliates 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.
SPECIALTY TRUST: Section 341(a) Meeting Scheduled for May 24
------------------------------------------------------------
The U.S. Trustee for Region 17 will convene a meeting of Specialty
Trust, Inc.'s creditors on May 24, 2010, at 3:00 p.m. The
meeting will be held at 300 Booth Street, Room 2110, Reno, NV
89509.
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.
Reno, Nevada-based Specialty Trust, Inc., filed for Chapter 11
bankruptcy protection on April 20, 2010 (Bankr. D. Nev. Case No.
10-51432). Sallie B. Armstrong, Esq., at Downey Brand, assists
the Company in its restructuring effort. The Company listed
$100,000,001 to $500,000,000 in assets and $50,000,001 to
$100,000,000 in liabilities.
These affiliates 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.
STERLING FINANCIAL: Reaches Agreement with U.S. Treasury
--------------------------------------------------------
Sterling Financial Corporation disclosed that under the terms of
its previously announced agreement with private equity firm Thomas
H. Lee Partners, L.P., it has entered into a definitive exchange
agreement with the U.S. Treasury and has signed a definitive
investment agreement with THL.
The terms of such agreements are described in Sterling's press
release of April 27, 2010. The transactions are conditioned upon
each other and on the other closing conditions previously
described, including the raise by Sterling of a total of at least
$720 million (inclusive of the THL investment), which is expected
to enable Sterling to meet all of its regulatory capital
requirements.
Sterling President and Chief Executive Officer Greg Seibly said,
"We are very pleased to announce definitive agreements with THL
and the Treasury. Their support is critical to our ongoing
efforts to improve our capital position."
About Sterling Financial Corporation
Sterling Financial Corporation of Spokane, Wash., --
http://www.sterlingfinancialcorporation-spokane.com-- is the bank
holding company for Sterling Savings Bank, a commercial bank, and
Golf Savings Bank, a savings bank focused on single-family
mortgage originations. Both banks are state chartered and
federally insured. Sterling offers banking products and services,
mortgage lending, construction financing and investment products
to individuals, small businesses, commercial organizations and
corporations. As of March 31, 2010, Sterling Financial
Corporation had assets of $10.55 billion and operated 178
depository branches throughout Washington, Oregon, Idaho, Montana
and California.
* * *
As reported in the Troubled Company Reporter on March 22, 2010,
Fitch Ratings has downgraded Sterling Financial Corporation's
long-term Issuer Default Rating to 'C' from 'CCC' and Sterling
Savings Bank's long-term and short-term IDRs to 'C' and 'C',
respectively.
SUNBELT GRAIN: No Equitable Subordination Ruling Affirmed
---------------------------------------------------------
WestLaw reports that equitable subordination of a bank's claim
against the proceeds from the trustee's sale of the Chapter 7
debtor-elevator operator's grain inventory was not warranted, a
federal district court in Kansas held. The prepetition buyer of
corn lots from the debtor, as the party seeking subordination, did
not allege, much less put forth any evidence, that the bank was an
insider or a fiduciary of the debtor, nor did the buyer point to
any evidence that the bank's conduct was gross and egregious, or
tantamount to fraud, misrepresentation, overreaching, spoliation,
or moral turpitude. Rather, the bank's conduct, in purportedly
sitting on its rights after the debtor's default for nearly four
months and not filing its foreclosure action until after the buyer
made its corn payments, but before the debtor could deliver more
than 56,000 bushels of the buyer's corn, was, at most, a sharp
business practice. A sharp business practice is not a sufficient
basis for equitably subordinating a claim made by a party that is
neither an insider nor a fiduciary, the court explained. In re
Sunbelt Grain WKS, LLC, --- B.R. ----, 2010 WL 1417734 (D. Kan.).
Creditors filed an involuntary Chapter 7 petition (Bankr. D. Kan.
Case No. 08-10204) against Sunbelt Grain WKS, LLC, on February 4,
2008. Security State Bank was one of the petitioning creditors.
Steven Speth was appointed Chapter 7 trustee. After the order for
relief was entered on March 5, 2008, the trustee sought and
obtained court approval to sell Sunbelt's grain inventory. The
sale occurred on April 10, 2008. Thereafter, the Court approved
the trustee's disbursement of a portion of the sale proceeds to
various open storage holders. Security State Bank and Whitham
Farms Feedyard, L.P., asserted competing claims to the remainder
of the corn sale proceeds held by the trustee, approximately
$3.3 million. The trustee, in turn, commenced an adversary
proceeding (Bankr. D. Kan. Adv. Pro. No. 08-5112) on May 29, 2008,
to determine these parties' interests in the sale proceeds.
Ruling on Security State Bank's summary judgment motion, the
Honorable Robert E. Nugent held that (1) association trade rules
governed contracts between Whitham and the debtor for sale of lots
of corn; (2) Whitham did not have an ownership interest in
undelivered corn for which it had prepaid, absent evidence that
the debtor had sufficient corn on hand to fulfill the buyer's
contract when the prepayment was made; (3) the lender's security
interest attached to the corn that the debtor did not own when it
contracted with the buyer or when the buyer prepaid the debtor for
the corn; and (4) there was no evidence supporting equitable
subordination of the lender's claim. This ruling from the
District Court affirms the Bankruptcy Court's ruling previously
reported in July 8, 2009, edition of the Troubled Company
Reporter.
SUNRISE SENIOR: Completes Partial Settlement with Four Lenders
--------------------------------------------------------------
Sunrise Senior Living, Inc., disclosed that the Company and
certain of its affiliates have completed the previously announced
restructure transactions with three of the lenders to its German
subsidiaries, Capmark Finance Inc., Natixis, London Branch, and
Fortis Bank, UK Branch. Under the restructure transactions, which
were first announced in October 2009, such lenders agreed to
settle and compromise claims that they may have had against
Sunrise with respect to its German subsidiaries.
Sunrise also announced that it has entered into a partial
settlement and waiver declaration with Aareal Bank AG, pursuant to
which Sunrise will be released from its operating deficit and
payment guarantee obligations with respect to loans previously
made by Aareal to certain of Sunrise's German subsidiaries in
exchange for, among other things, a cash payment of EUR2.1 million
(approximately $2.8 million).
Sunrise is actively working to settle and compromise claims that
one remaining lender to its German communities may have against
Sunrise.
"I am very grateful for the persistent work of my colleagues, our
advisors and our banks to accomplish this restructuring," said
Mark Ordan, Sunrise's chief executive officer.
Going Concern Doubt
According to the Troubled Company Reporter on March 3, 2010, Ernst
& Young LLP of McLean, Virginia, express substantial doubt about
Sunrise Senior Living Inc.'s ability as a going concern after
auditing the company's financial statement for the year ended Dec.
31, 2009. The auditor said the Company cannot borrow under the
bank credit facility and the Company has significant debt maturing
in 2010 which it does not have the ability to repay.
Cash and Liquidity Update
Sunrise had $39.3 million of unrestricted cash at Dec. 31, 2009.
Sunrise has no borrowing availability under its bank credit
facility, and has significant scheduled debt maturities in 2010
and significant debt that is in default. As of December 31, 2009,
Sunrise had debt of $440.2 million, of which $227.2 million of
debt is scheduled to mature in 2010, including $33.7 million under
its bank credit facility, which is due in December 2010. Debt that
is in default totals $317.2 million, including $198.7 million of
debt that is in default as a result of the failure to pay
principal and interest to the lenders of Sunrise's German
communities. Sunrise is seeking waivers with respect to existing
defaults to avoid acceleration of these obligations.
On Feb. 12, 2010, Sunrise extended $56.9 million of debt that was
either past due or in default at December 31, 2009. The debt is
associated with an operating community and two land parcels. In
connection with the extension, Sunrise (i) made a $5.0 million
principal payment at closing, (ii) extended the terms of the debt
to no earlier than December 2, 2010, (iii) provided for an
additional $5.0 principal payment on or before July 31, 2010, and,
among other items, (iv) defaults under the loan agreements were
waived by the lenders.
About Sunrise Senior
McLean, Virginia-based Sunrise Senior Living --
http://www.sunriseseniorliving.com/-- employs 40,000 people. As
of November 9, 2009, Sunrise operated 403 communities in the
United States, Canada, Germany and the United Kingdom, with a
combined unit capacity of approximately 41,500 units. Sunrise
offers a full range of personalized senior living services,
including independent living, assisted living, care for
individuals with Alzheimer's and other forms of memory loss, as
well as nursing and rehabilitative services. Sunrise's senior
living services are delivered by staff trained to encourage the
independence, preserve the dignity, enable freedom of choice and
protect the privacy of residents.
The Company reported $910.58 million in total assets and
$884.35 million in total liabilities, resulting to a
$26.23 million stockholders' deficit as of Dec. 31, 2009.
SW BOSTON: Files for Bankruptcy Protection
------------------------------------------
SW Boston Hotel Venture LLC filed for Chapter 11 in Boston (Bankr.
D. Mass. Case No. 10-14535), listing both assets and liabilities
of between $100 million and $500 million. The Debtor is the
developer of the W Hotel in Boston.
SW sought bankruptcy protection "to obtain a period of time in
which to restructure its existing debt," Ashley McCown, a company
spokeswoman, said in an e-mailed statement to Bloomberg. "This
will have no effect on the operation of the W Hotel or the
employees of the W Hotel."
According to Bloomberg, the hotel in Boston's theater district
opened last October, part of a $243 million mixed-use project that
includes 235 hotel rooms and 123 condominiums, according to the
Boston Redevelopment Authority. Sawyer Enterprises, the hotel's
owner, will "remain in full charge of all operations," Ms. McCown
said.
The city's $10.5 million loan to SW Boston "remains secured by the
hotel and condo complex, cash collateral and numerous other
properties owned by Sawyer," Lucy Warsh, a spokeswoman for
Boston's Department of Neighborhood Development, said in an e-
mailed statement to Bloomberg.
Hanify & King PC represents the Debtor in its Chapter 11 effort.
Debtor-affiliates include Auto Sales & Service Inc., General
Trading Co., Frank Sawyer Corp. and 100 Stuart Street LLC.
SW BOSTON: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------
Debtor: SW Boston Hotel Venture LLC
200 Newbury Street, 4th Floor
Boston, MA 02116
Bankruptcy Case No.: 10-14535
Chapter 11 Petition Date: April 28, 2010
Type of Business: The Debtor is the developer of the W Hotel in
Boston.
Court: United States Bankruptcy Court
District of Massachusetts (Boston)
Judge: Joan N. Feeney
Debtor's Counsel: Harold B. Murphy, Esq.
E-mail: bankruptcy@hanify.com
Natalie B. Sawyer, Esq.
E-mail: nbs@hanify.com
Hanify & King, P.C.
One Beacon Street, 21st Floor
Boston, MA 02108
Tel: (617) 423-0400
Fax: (617) 556-8985
Debtor's Special
Counsel: Edwards Angell Palmer & Dodge LLP
Estimated Assets: $100,000,001 to $500,000,000
Estimated Debts: $100,000,001 to $500,000,000
The petition was signed by Carol S. Parks.
Debtor-affiliates filing separate Chapter 11 petition:
Entity Case No. Petition Date
------ -------- -------------
Auto Sales & Service, Inc. 10-14528 04/28/10
Assets: $500,001 to $1,000,000
Debts: $500,001 to $1,000,000
General Trading Company 10-14532 04/28/10
Assets: $1,000,001 to $10,000,000
Debts: $1,000,001 to $10,000,000
Frank Sawyer Corporation 10-14533 04/28/10
Assets: $1,000,001 to $10,000,000
Debts: $1,000,001 to $10,000,000
100 Stuart Street LLC -- 04/28/10
SW Hotel's List of 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Bovis Lend Lease LMB, Inc. -- $699,873
Attn: Geoff
179 Lincoln Street
Boston, MA 02111
The 100 Stuart St. Residential -- $229,807
Condomini
P.O. Box 22051
Lake Buena Vista, FL 32830
Edwards Angell Palmer & Dodge -- $137,603
Attn: Reb
111 Huntington Avenue
Boston, MA 02199
Gilmartin, Magence & Ross, LLP -- $57,956
GS Associates -- $45,265
Otis & Ahern -- $41,529
Capital Hotel Management LLC -- $41,218
UCS Services, Inc. -- $36,771
TRO Jung Brannen -- $34,701
Duff & Phelps -- $29,511
MS Signs Inc. -- $19,977
Prudential Real Estate -- $17,923
Nstar -- $11,337
Meichi Peng Design Studio -- $10,354
DiPesa & Company, CPA's -- $10,000
Inspection & Evaluation -- $6,450
Kortenhaus Communications -- $6,066
Niche Development -- $5,000
Falvey Finishing Co., Inc. -- $4,500
E.A. Spry & Co., Inc. -- $4,313
TARABRAD INCORPORATED: Voluntary Chapter 11 Case Summary
--------------------------------------------------------
Debtor: Tarabrad Incorporated
3506 Cedar Springs Road
Dallas, TX 75219
Bankruptcy Case No.: 10-32867
Chapter 11 Petition Date: April 27, 2010
Court: United States Bankruptcy Court
Northern District of Texas (Dallas)
Judge: Barbara J. Houser
Debtor's Counsel: Alan Lintel, Esq.
3506 Cedar Springs Rd.
Dallas, TX 75219
Tel: (469) 236-8333
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 Suzanne Harper, president.
TAYLOR BEAN: Court OKs Sale of MBS Portfolio to Angelo Gordon
-------------------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Florida in
Jacksonville has approved the sale of a portfolio of Taylor Bean &
Whitaker Mortgage Corp.'s mortgage-backed securities to AG
Mortgage Value Partners Master Fund, a Cayman Islands-registered
hedge fund run by Angelo Gordon & Co.
As reported by the Troubled Company Reporter on April 27, 2010, AG
Mortgage won the auction with its $9.675 million offer. AG
Mortgage was the "stalking horse" bidder, initially offering
$8.76 million for the portfolio.
Patrick Fitzgerald at Dow Jones' Daily Bankruptcy Review, in an
earlier report, said the portfolio once valued at more than
$30 million.
Centerbridge Credit Partners L.P., and the Diocese of Rockville
Centre Lay Pension Plan submitted rival bids. Rockville's
$9,625,000 bid -- plus the Court-approved $275,000
Break-up Fee -- emerged as the second highest bid after seven
rounds of bidding.
Rockville has acknowledged that it is obligated to hold open its
bid in the event that AG Mortgage fails to close.
Mr. Fitzgerald also said that Lewis Ranieri, a former Salomon
Brothers' vice chairman known as the father of mortgage
securitization, is a member of the pension plan's investment
committee.
About Taylor Bean
Taylor, Bean & Whitaker Mortgage Corp. is a 27-year-old company
that grew from a small Ocala-based mortgage broker to become one
of the largest mortgage bankers in the United States. In 2009,
Taylor Bean was the country's third largest direct-endorsement
lender of FHA-insured loans of the largest wholesale mortgage
lenders and issuer of mortgage backed securities. It also managed
a combined mortgage servicing portfolio of approximately
$80 billion. The company employed more that 2,000 people in
offices located throughout the United States.
Taylor Bean filed for Chapter 11 on August 24 (Bankr. M.D. Fla.
Case No. 09-07047). Taylor Bean filed under Chapter 11 three weeks
after federal investigators searched its offices. The day
following the search, the Federal Housing Administration, Ginnie
Mae and Freddie Mac prohibited the company from issuing new
mortgages and terminated servicing rights.
Taylor Bean has more than $1 billion of both assets and
liabilities, and between 1,000 and 5,000 creditors, according to
the bankruptcy petition.
THE LEGACY: Case Summary & 12 Largest Unsecured Creditors
---------------------------------------------------------
Debtor: The Legacy at Jordan Lake, LLC
200 Kellyridge Drive
Apex, NC 27502
Bankruptcy Case No.: 10-03317
Chapter 11 Petition Date: April 27, 2010
Court: U.S. Bankruptcy Court
Eastern District of North Carolina (Wilson)
Judge: Randy D. Doub
Debtor's Counsel: Trawick H. Stubbs Jr., Esq.
Stubbs & Perdue, P.A.
P.O. Drawer 1654
New Bern, NC 28563
Tel: (252) 633-2700
Fax: (252) 633-9600
E-mail: efile@stubbsperdue.com
Estimated Assets: $10,000,001 to $50,000,000
Estimated Debts: $10,000,001 to $50,000,000
According to the schedules, the Company says that assets total
$29,065,065 while debts total $22,870,300.
The petition was signed by Holland C. Gaines, manager.
Debtor's List of 12 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Capital Bank subdivision Phase I $6,950,973
Attn: Manager or Agent
P.O. Box 18949
Raleigh, NC 27619
Sanford Contractors -- $85,000
Attn: Managing Agent
628 Rocky Ford Church Road
Sanford, NC 27332
Time Warner Cable -- $6,641
Attn: Managing Agent
PO Box 409983
Atlanta, GA 30384-9983
The News and Observer -- $5,728
John Deere Landscapes -- $4,110
New Home Guide.com -- $2,565
Southern Neighbor -- $1,350
MSP Pump & Trench -- $888
NewsObserver.com -- $524
CE Group -- $360
Listrak -- $83
Click Culture -- $80
THE NRRE: Chapter 11 Case Summary & Unsecured Creditor
------------------------------------------------------
Debtor: The NRRE, LLC
202 Hobble Creek Canyon
Springville, UT 84663
Bankruptcy Case No.: 10-25480
Chapter 11 Petition Date: April 27, 2010
Court: United States Bankruptcy Court
District of Utah (Salt Lake City)
Judge: Judith A. Boulden
Debtor's Counsel: Lee Rudd, Esq.
716 East 4500 South
P.O. Box 57782
Salt Lake City, UT 84157
Tel: (801) 268-2808
Fax: (866) 724-6381
E-mail: leerudd@ruddlaw.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
In its list of 20 largest unsecured creditors, the Company placed
only one entry:
Entity Nature of Claim Claim Amount
------ --------------- ------------
CME Partners, LLC Promissory Note $3,000,000
500 North Market
Place Drive, Suite 120
Centerville, UT 84014
The petition was signed by Nedra Roney McKell, manager/member.
THOS. M. MADDEN: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: Thos. M. Madden Co.
24 W. 600 St. Charles Road
Carol Stream, IL 60188
Bankruptcy Case No.: 10-18837
Chapter 11 Petition Date: April 27, 2010
Court: U.S. Bankruptcy Court
Northern District of Illinois (Chicago)
Judge: A. Benjamin Goldgar
Debtor's Counsel: Abraham Brustein, Esq.
Dimonte & Lizak, LLC
216 W. Higgins Road
Park Ridge, IL 60068
Tel: (847) 698-9600 Ext. 221
Fax: (847) 698-9623
E-mail: abrustein@dimonteandlizak.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/ilnb10-18837.pdf
The petition was signed by Robert J. Madden Jr., president.
TORNADO PIZZA: Stay Had No Effect on Franchise Agreement
--------------------------------------------------------
WestLaw reports that a franchisor's stay of the enforcement of its
prepetition termination of the Chapter 11 debtor's franchise
agreements for a designated period of time, pursuant to which the
debtor was required to operate its pizza stores in accordance with
the franchise agreements, did not result in executory contracts
that the debtor could assume or reject. Even if the stay of
enforcement, coupled with the debtor's operation of the stores,
somehow reinstated the agreements or otherwise gave rise to
executory contracts, it expired by the mere passage of time during
the debtor's bankruptcy case, without the franchisor being
required to take any action. In re Tornado Pizza, LLC, --- B.R. -
---, 2010 WL 1453067 (Bankr. D. Kan.).
Tornado Pizza, LLC, sought Chapter 11 protection (Bankr. D. Kan.
Case No. 09-24232) on Dec. 22, 2009, and a copy of the Debtor's
petition is available at http://bankrupt.com/misc/ksb09-24232.pdf
at no charge.
TOUSA INC: Court Approves Tortosa HOA Settlement
------------------------------------------------
TOUSA Homes, Inc., received the Court's authority to enter into a
settlement and release agreement with the "Tortosa Homeowners'
Association".
TOUSA Homes owns and develops certain lots in a community located
in Pinal County, Arizona, known as Tortosa. The Tortosa
Homeowners' Association is the property owners' association for
the Tortosa Community.
The Tortosa Community was developed in accordance with the common
scheme of the Master Declaration of Covenants, Conditions and
Restrictions for Tortosa. Pursuant to the Declaration, TOUSA
Homes and the other property owners in the Tortosa Community are
obligated to pay certain assessments. Any owner that meets the
definition of "Builder" within the meaning of the Declaration,
including TOUSA Homes, is obligated to pay assessments to the HOA
only on a reduced basis so that Builders pay 25% of the
assessments paid by other property owners.
The Declaration also provides that Builders must fund any budget
shortfalls or operation deficit of the HOA resulting from, among
other things, the Reduced Assessments. During any period in
which a certain owner may be exempt from payment of the
annual assessments, each Builder, as applicable, will pay or
contribute to the HOA cash as may be necessary to make up any
budget shortfalls of the HOA resulting from the Reduced
Assessments paid by the Builder.
Paul Steven Singerman, Esq., at Berger Singerman, P.A., in Miami,
Florida, relates that the Tortosa HOA and TOUSA Homes have
disputed the amounts due and owing by TOUSA Homes to the Tortosa
HOA with respect to Reduced Assessments and Deficiency
Assessments. The Tortosa HOA filed Claim No. 2060 for $25,392
based on TOUSA Homes' alleged failure to pay prepetition Reduced
Assessments and Deficiency Assessments, as well as and
other fees and costs it incurred.
To resolve all disputes relating to the Reduced Assessments and
Deficiency Assessments, TOUSA Homes and the Tortosa HOA entered
into extensive arm's-length negotiations. As a result of hose
negotiations, the Parties have entered into the Settlement
Agreement, which incorporates a comprehensive resolution of all
claims relating to the Reduced Assessments and Deficiency
Assessments.
The salient terms of the Settlement Agreement are:
(a) TOUSA Homes will pay these amounts to the Tortosa
Association:
-- $11,347 as full and final settlement of all claims for
payments of Reduced Assessments and Deficiency
Assessments through January 29, 2008;
-- $27,070 as full and final settlement of all claims for
payments of Reduced Assessments and Deficiency
Assessments from January 30, 2008 through December 31,
2008;
-- $38,867 as full and final settlement of all claims for
payments of Reduced Assessments and Deficiency
Assessments from January 1, 2009 through December 31,
2009;
-- $9,716 as full and final settlement of all claims for
payments of Reduced Assessments and Deficiency
Assessments from January 1, 2010 through March 31,
2010; and
-- as full and final settlement of all claims for Reduced
Assessments and Deficiency Assessments for the period
of April 1, 2010, through the last day of the month in
which the closing under the Settlement Agreement
occurs, TOUSA Homes will pay the Tortosa HOA on a
monthly basis (x) $2,557 with respect to the lots in
Parcel G, and (y) $681 with respect to the lots in
Parcel L.
(b) Upon payment by TOUSA Homes of the Settlement Funds, the
Tortosa HOA will release and forever discharge TOUSA
Homes and its affiliates from any and all past, present
or future claims arising out of the payment of any
assessments under the Declaration, including the Reduced
Assessments and the Deficiency Assessments.
(c) TOUSA Homes will release and forever discharge the Tortosa
HOA and its affiliates from any and all past, present or
future claims arising out of the payment of Reduced
Assessments and Deficiency Assessments through the last
day of the month in which the closing occurs, including
any and all defenses to its obligations to the HOA to pay
any assessments due and owing as to the date of the
Settlement Agreement and agree to observe all other
covenants under the HOA's governing documents, including
the Declaration.
(d) Upon full payment by TOUSA Homes of the Settlement Funds,
the Claim will be deemed withdrawn with prejudice. Within
10 days after receipt of the payment, the HOA agrees to
execute and deliver a Notice of Withdrawal of Proof of
Claim to TOUSA Homes.
The Settlement Agreement will result in an expedient resolution
of the controversy between the Tortosa HOA and TOUSA Homes with
respect to the disputed Reduced Assessments and Deficiency
Assessments, Mr. Singerman says. In addition, the release given
by the HOA, together with the withdrawal of the Claim, will
eliminate any further exposure that TOUSA Homes could potentially
face under the Declaration vis-a-vis the Association, he
maintains.
About Tousa Inc.
Headquartered in Hollywood, Florida, TOUSA Inc. (Pink Sheets:
TOUS) -- http://www.tousa.com/-- fka Technical Olympic U.S.A.
Inc., dba Technical U.S.A., Inc., Engle Homes, Newmark Homes L.P.,
TOUSA Homes Inc. and Newmark Homes Corp. is a leading homebuilder
in the United States, operating in various metropolitan markets in
10 states located in four major geographic regions: Florida, the
Mid-Atlantic, Texas, and the West.
The Debtor and its debtor-affiliates filed for separate Chapter 11
protection on January 29, 2008 (Bankr. S.D. Fla. Case No. 08-
10928). The Debtors have selected M. Natasha Labovitz, Esq.,
Brian S. Lennon, Esq., Richard M. Cieri, Esq., and Paul M. Basta,
Esq., at Kirkland & Ellis LLP; and Paul Steven Singerman, Esq., at
Berger Singerman, to represent them in their restructuring
efforts. Lazard Freres & Co. LLC is the Debtors' investment
banker. Ernst & Young LLP is the Debtors' independent auditor and
tax services provider. Kurtzman Carson Consultants LLC acts as
the Debtors' Notice, Claims & Balloting Agent.
TOUSA's direct subsidiary, Beacon Hill at Mountain's Edge LLC dba
Eagle Homes, filed for Chapter 11 Protection on July 30, 2008
(Bankr. S.D. Fla. Case No. 08-20746). It listed assets between
$1 million and $10 million, and debts between $1 million and
$10 million.
TOUSA INC: Parties Object to Panel Plea to Set Payments
-------------------------------------------------------
The Official Committee of Unsecured Creditors in Tousa Inc.'s
cases is asking the U.S. Bankruptcy Court for the Southern
District of Florida to set the final amounts to be paid by and to
each party in the adversary complaint it commenced against
Citicorp North America, Inc. and other secured lenders.
The Bankruptcy Court entered on October 30, 2009, a multi-party
remedy that unwinds to the extent possible, defendants'
fraudulent conveyances, referred as "Remedial Order." The
Bankruptcy Court, however, did not assign specific dollar values
to most of the monetary components of that remedy, because at
that time, it lacked the detailed accounting, information
necessary to do so, Patricia A. Redmond, Esq., at Stearns Weaver
Miller Weissler Alhadeff & Sitterson, P.A., in Miami, Florida,
relates. Now that the parties have supplied that information
through post-trial submissions, the Bankruptcy Court can complete
the remedial portion of the action the Committee commenced
against Citicorp by issuing an order specifying the proper
payment amounts, she notes.
In this light, the Committee proposes amounts that it believes
each party is required to pay or receive under the Remedial
Order.
Ms. Redmond says the Committee relied on the information provided
by the parties and their professionals and applies it to the
Remedial Order with certain adjustments. The proposed amounts
are:
* In accordance with the Final Judgment, as amended, the
Conveying TOUSA Subsidiaries should receive prejudgment
interest on all of the damages to which they are entitled.
The Remedial Order expressly provides for prejudgment
interest in connection with some disgorgements, the
Conveying Subsidiaries should be awarded prejudgment
interest as to all disgorgements and damages to ensure that
they are fully compensated.
* The accounting filed by the First Lien Lenders allocates a
disproportionate amount of debtor-paid professional fees to
the Revolver Lenders rather than to the First Lien Lenders.
The Committee thus asserts that the total amount of
professional fees that the First Lien Lenders are jointly
and severally liable to disgorge is $29,288,702, to reflect
a more accurate allocation of professional fees between the
Revolver Lenders and the First Lien Lenders.
* The accountings filed by the Second Lien Lenders did not
include certain professional fees paid by the Debtors prior
to the Petition Date. Thus, the Committee argues that the
Second Lien Lenders are jointly and severally liable to
disgorge $23,285,852, which is based on those prepetition
professional fees that were paid on their behalf.
* The Debtors' Remaining Value Analysis, which allocates
assets and liabilities among various Debtors, must be
translated into a pure asset analysis before it can be used
to calculate the diminution in value of the Conveying
Subsidiaries' liens between July 31, 2007 and October 13,
2009. Specifically, the Committee asserts that the value of
the Conveying TOUSA Subsidiaries' property on October 13,
2009 -- and thus the value of the liens returned on that
date -- comes out to $402,236,000. Subtracting that value
from the liens' starting value of $500 million yields a
diminution of $97,753,000, which should be reimbursed to the
Conveying TOUSA Subsidiaries.
Until the approval of the Payment Motion, the judgment previously
entered by the Bankruptcy Court on the Committee Action will not
be final, Ms. Redmond points out.
In a related request, the Committee sought and obtained the
Bankruptcy Court's authority to file under seal a proposed order
to the Payment Motion and an accompanying declaration of Kevin P.
Clancy. Mr. Clancy is the Committee's accounting expert.
According to the Committee, the documents filed under seal
contain sensitive financial data and information, which the
Committee is obligated to protect pursuant to a protective order
among parties in the Committee Action.
The Bankruptcy Court will consider the Payment Motion on May 17,
2010.
Lenders Object to Payments Motion
In separate filings, Citicorp North America, Inc., Wells Fargo
Bank, N.A. and the Senior Transeastern Lenders oppose the
Official Committee of Unsecured Creditors' request to set the
final amounts to be paid by and to each party in the Adversary
Complaint it commenced against Citicorp and other secured
lenders.
A. Citicorp
Citicorp, as administrative agent for the First Lien Term Loan,
and the First Lien Lenders sought and obtained permission from
the U.S. Bankruptcy Court for the Southern District of Florida to
file under seal:
(i) their response to Payment Motion;
(ii) declarations of Thomas J. Hall and Andrew D.J. Hede in
support of the Response; and
(iii) proposed order on the Payment Motion.
Mr. Hall is a partner at Chadbourne & Parker LLP, Citicorp's
counsel. Mr. Hede is a managing director at Alvarez & Marsal,
LLC, advisors to Citicorp.
Citicorp explains that the documents they filed under seal
contain confidential financial data and reference and discuss
information contained in the Debtors' Remaining Value Analysis,
as amended. As previously reported, the declaration of Kevin P.
Clancy and Proposed Order relating to the Payment Motion were
filed under seal.
B. Wells Fargo
Wells Fargo, as administrative agent under the Second Lien Term
Loan Credit Agreement, and the Second Lien Lenders oppose the
Committee's Payment Motion, asserting that it is an untimely
attempt by the Committee to change the disgorgement amounts.
Jeffrey I. Snyder, Esq., at Bilzin Sumberg Baena Price & Axelrod,
in Miami, Florida, counsel to Wells Fargo, notes that the
Committee has acknowledged its acceptance of the Second Lien
Lenders' $21,643,112 disgorgement amount at a recent status
conference before Chief Judge Federico A. Moreno of the U.S.
District Court for the Southern District of Florida.
There is also no excuse for the Committee's delay in raising the
objection, Mr. Snyder contends, because it has been aware of
$979,481 in Ad Hoc Group Fees and disputed first lien prepetition
fees when the Second Lien Lenders filed their amended disclosure
on November 6, 2009.
Mr. Snyder argues that the Committee has wrongly sought to add
the Ad Hoc Group Fees and Disputed First Lien Prepetition Fees to
the Second Lien Lenders' Disgorgement Amount. The Ad Hoc Group
Fees, he points out, were not paid for the benefit of the Second
Lien Lenders or pursuant to the Second Lien term Loan Agreement
and were not paid pursuant to any of the Cash Collateral Orders.
As to the Disputed First Lien Prepetition Fees, he points out,
Citicorp as the First Lien Agent did not represent the interests
of the then-second lien lenders, and neither the prepetition
second lien lenders nor the current Second Lien Lenders received
the benefit of any fees.
Wells Fargo seeks that 50% of Integra Realty's fees or $831,992
be reallocated from the Second Lien Lenders' Disgorgement Amount
to the First Lien Lenders. Integra Realty was jointly retained
by the First and Second Lien Lenders as real estate expert,
whereby both Lenders paid Integra $1,663,984 for the firm's
services. Given those computations, Wells Fargo asks the Court
to reduce the Second Lien Lenders' Disgorgement Amount to
$20,841,843.
Wells Fargo also joins in Citicorp's contentions with regard to
(i) the absence of jurisdiction pending appeal; (ii) the
inappropriateness of charging prejudgment interest on certain
disgorged amounts; (iii) the appropriate approach to the Debtors'
Remaining Value Analysis; and (iv) the inappropriateness of the
Committee's efforts in its proposed Order to expand certain
aspects of the Final Judgment.
C. Senior Transeastern Lenders
The Senior Transeastern Lenders complain that the Payment Motion
impermissibly seeks to reopen issues finally decided by the
Bankruptcy Court.
Counsel to the Senior Transeastern Lenders, Michael I. Goldberg,
Esq., at Akerman Senterfitt, in Fort Lauderdale, Florida --
michael.goldberg@akerman.com -- points out that the Amended Final
Judgment is clear that prejudgment interests on the amount of the
Senior Transeastern Lenders' disgorgement accrues only from
July 31, 2007 through the date of the Final Judgment, October 13,
2009. "To now hold otherwise would constitute a clear alteration
of the Amended Final Judgment," he stresses. A modification of
the Amended Final Judgment, Mr. Goldberg contends, to allow
prejudgment interest to run through the date of a determination
on the Payment Motion would directly affect the Senior
Transeastern lenders' appeal and is beyond the Bankruptcy Court's
jurisdiction.
The Senior Transeastern Lenders thus ask the Bankruptcy Court to
deny the portions of the Payment Motion that seek to modify (i)
the prejudgment interest award in the Final Judgment, and (ii)
the payment procedures set forth in the Final Judgment.
Centurion CDO 10, Ltd.; Centurion CDO 8, Limited; Centurion CDO
9, Ltd.; Centurion CDO II, Ltd.; Centurion CDO VI, Ltd.;
Centurion CDO VII, Ltd.; Centurion CDO XI, Ltd.; Eaton Vance
Credit Opportunities Fund; Eaton Vance Floating-Rate Income
Trust; Eaton Vance Grayson & Co.; Eaton Vance Limited Duration
Income Fund; Senior Debt Portfolio; Eaton Vance Senior Floating-
Rate Trust; Eaton Vance Senior Income Trust; Eaton Vance VT
Floating-Rate Income Fund; RiverSource Floating Rate Fund; and
Sequils-Centurion V, Ltd. join in the Senior Transeastern
Lenders' Objection.
The Centurion Entities also object to certain portions of the
Proposed Order. The Entities note that the actual name of "Eaton
Vance Senior Debt Portfolio" is Senior Debt Portfolio.
Similarly, the Centurion Entities assert that the footnote
erroneously includes RiverSource Floating Rate Fund as an entity
with a payment amount recoverable from Deutsche Bank Trust
Company Americas.
About Tousa Inc.
Headquartered in Hollywood, Florida, TOUSA Inc. (Pink Sheets:
TOUS) -- http://www.tousa.com/-- fka Technical Olympic U.S.A.
Inc., dba Technical U.S.A., Inc., Engle Homes, Newmark Homes L.P.,
TOUSA Homes Inc. and Newmark Homes Corp. is a leading homebuilder
in the United States, operating in various metropolitan markets in
10 states located in four major geographic regions: Florida, the
Mid-Atlantic, Texas, and the West.
The Debtor and its debtor-affiliates filed for separate Chapter 11
protection on January 29, 2008 (Bankr. S.D. Fla. Case No. 08-
10928). The Debtors have selected M. Natasha Labovitz, Esq.,
Brian S. Lennon, Esq., Richard M. Cieri, Esq., and Paul M. Basta,
Esq., at Kirkland & Ellis LLP; and Paul Steven Singerman, Esq., at
Berger Singerman, to represent them in their restructuring
efforts. Lazard Freres & Co. LLC is the Debtors' investment
banker. Ernst & Young LLP is the Debtors' independent auditor and
tax services provider. Kurtzman Carson Consultants LLC acts as
the Debtors' Notice, Claims & Balloting Agent.
TOUSA's direct subsidiary, Beacon Hill at Mountain's Edge LLC dba
Eagle Homes, filed for Chapter 11 Protection on July 30, 2008
(Bankr. S.D. Fla. Case No. 08-20746). It listed assets between
$1 million and $10 million, and debts between $1 million and
$10 million.
TOUSA INC: Receives Interim Approval to Cash Collateral Use
-----------------------------------------------------------
Judge John K. Olson of the U.S. Bankruptcy Court for the Southern
District of Florida issued an interim order authorizing TOUSA
Inc. and its debtor affiliates access to the cash collateral of
their Prepetition Lenders on and after May 1, 2010.
Prior to the entry of the Court's most recent ruling, the Debtors
filed with the Court a proposed sixth interim Cash Collateral
order, which contained a prepared cash flow budget for the period
from May 2010 to August 2010. The Debtors' estimated total
operating cash flows under the four-month period ending August
2010 are:
Estimated Total
Month ended Operating Cash Flow
-------------- -------------------
May 2010 ($5,439,000)
June 2010 ($4,690,000)
July 2010 ($2,885,000)
August 2010 ($545,000)
The Debtors are authorized to use of the Cash Collateral
pursuant to the May 2010 to August 2010 Budget.
Judge Olson also ruled that the Debtors' use of the Cash
Collateral is conditioned on their compliance with certain
financial covenants. The Financial Covenants will be measured as
(i) actual monthly Operating Cash Flow that must not be less than
the projected monthly Operating Cash Flow set forth in the Budget
minus $10 million; and (ii) cumulative Operating Cash Flow for
the applicable period that must be no less than the amounts set
forth for the applicable period:
Period Minimum Operating Cash Flow
------------------- ---------------------------
05/01/10 - 05/31/10 ($6,707,000)
06/01/10 - 06/30/10 ($6,494,000)
07/01/10 - 07/31/10 ($4,923,000)
08/01/10 - 08/31/10 ($2,468,000)
A full-text copy of TOUSA's Sixth Interim Cash Collateral
Order dated April 15, 2010, is available for free at:
http://bankrupt.com/misc/Tousa_6thIntCashCollOrd.pdf
Judge Olson will convene a final hearing on the Debtors'
cash collateral request on May 4, 2010. Objections are
due April 28, 2010.
About Tousa Inc.
Headquartered in Hollywood, Florida, TOUSA Inc. (Pink Sheets:
TOUS) -- http://www.tousa.com/-- fka Technical Olympic U.S.A.
Inc., dba Technical U.S.A., Inc., Engle Homes, Newmark Homes L.P.,
TOUSA Homes Inc. and Newmark Homes Corp. is a leading homebuilder
in the United States, operating in various metropolitan markets in
10 states located in four major geographic regions: Florida, the
Mid-Atlantic, Texas, and the West.
The Debtor and its debtor-affiliates filed for separate Chapter 11
protection on January 29, 2008 (Bankr. S.D. Fla. Case No. 08-
10928). The Debtors have selected M. Natasha Labovitz, Esq.,
Brian S. Lennon, Esq., Richard M. Cieri, Esq., and Paul M. Basta,
Esq., at Kirkland & Ellis LLP; and Paul Steven Singerman, Esq., at
Berger Singerman, to represent them in their restructuring
efforts. Lazard Freres & Co. LLC is the Debtors' investment
banker. Ernst & Young LLP is the Debtors' independent auditor and
tax services provider. Kurtzman Carson Consultants LLC acts as
the Debtors' Notice, Claims & Balloting Agent.
TOUSA's direct subsidiary, Beacon Hill at Mountain's Edge LLC dba
Eagle Homes, filed for Chapter 11 Protection on July 30, 2008
(Bankr. S.D. Fla. Case No. 08-20746). It listed assets between
$1 million and $10 million, and debts between $1 million and
$10 million.
TRES LAWER: Case Summary & 9 Largest Unsecured Creditors
--------------------------------------------------------
Debtor: Tres F. Lawer
416 Heritage Run Road
Indiana, PA 15701
Bankruptcy Case No.: 10-70491
Chapter 11 Petition Date: April 28, 2010
Court: U.S. Bankruptcy Court
Western District of Pennsylvania (Johnstown)
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
A copy of the Debtor's list of 9 largest unsecured creditors filed
together with the petition is available for free at
http://bankrupt.com/misc/pawb10-70491.pdf
The petition was signed by the Debtor.
TRONOX INC: Plan-Filing Exclusivity Extended Until July 12
----------------------------------------------------------
Bill Rochelle at Bloomberg News reports that Tronox Inc. received
an extension of the exclusive right to propose a reorganization
plan until July 12. Tronox says it's trying to broker a
consensual reorganization plan.
About Tronox Inc.
Headquartered in Oklahoma City, Tronox Incorporated (Pink Sheets:
TRXAQ, TRXBQ) is the world's fourth-largest producer and marketer
of titanium dioxide pigment, with an annual production capacity of
535,000 tonnes. Titanium dioxide pigment is an inorganic white
pigment used in paint, coatings, plastics, paper and many other
everyday products. The Company's four pigment plants, which are
located in the United States, Australia and the Netherlands,
supply high-performance products to approximately 1,100 customers
in 100 countries. In addition, Tronox produces electrolytic
products, including sodium chlorate, electrolytic manganese
dioxide, boron trichloride, elemental boron and lithium manganese
oxide.
Tronox has US$1.6 billion in total assets, including
US$646.9 million in current assets, as at September 30, 2008. The
Company has US$881.6 million in current debts and US$355.9 million
in total noncurrent debts.
Tronox Inc., aka New-Co Chemical, Inc., and 14 other affiliates
filed for Chapter 11 protection on January 13, 2009 (Bankr.
S.D.N.Y. Case No. 09-10156). The case is before Hon. Allan L.
Gropper. Richard M. Cieri, Esq., Jonathan S. Henes, Esq., and
Colin M. Adams, Esq., at Kirkland & Ellis LLP in New York,
represent the Debtors. The Debtors also tapped Togut, Segal &
Segal LLP as conflicts counsel; Rothschild Inc. as investment
bankers; Alvarez & Marsal North America LLC, as restructuring
consultants; and Kurtzman Carson Consultants serves as notice and
claims agent.
An official committee of unsecured creditors and an official
committee of equity security holders have been appointed in the
cases. The Creditors Committee has retained Paul, Weiss, Rifkind,
Wharton & Garrison LLP as counsel.
Until September 30, 2008, Tronox Inc. was publicly traded on the
New York Stock Exchange under the symbols TRX and TRX.B. Since
then, Tronox Inc. has traded on the Over the Counter Bulletin
Board under the symbols TROX.A.PK and TROX.B.PK. As of
December 31, 2008, Tronox Inc. had 19,107,367 outstanding shares
of class A common stock and 22,889,431 outstanding shares of class
B common stock.
Bankruptcy Creditors' Service, Inc., publishes Tronox Bankruptcy
News. The newsletter tracks the Chapter 11 proceeding undertaken
by Tronox Inc. and its 14 affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
TRONOX INC: Court Approves Entry Into Century Settlement
--------------------------------------------------------
The Bankruptcy Court authorized debtors Tronox Worldwide LLC,
Tronox LLC and Southwestern Refining Company, Inc., to enter into
a settlement agreement with Century Indemnity Company to resolve
an insurance coverage dispute by providing for:
(a) the settlement and release of certain defense and
indemnity obligations for bodily injury claims owed by
Century under certain insurance policies issued to the
Debtors; and
(b) the sale of the Tronox Policies to Century free and clear
of any and all liens, claims, interests and encumbrances,
for gross consideration of $4.725 million. The first
installment of $2.5 million will be paid to the Debtors
within ten days of entry of the Order granting the Motion,
if granted. The second installment of $2.25 million will
be paid to the Debtors on or before December 20, 2010.
The Settlement Agreement also requires the Debtors to seek
injunctive relief prohibiting any person from prosecuting any
defense and indemnity obligations for third party bodily injury
insurance coverage claims against Century under the Tronox
Policies.
In addition, the Debtors ask the Court to determine that their
proposed form of adequate protection for parties, if any, that may
have valid interests in the Tronox Policies is appropriate.
The Debtors also ask the Court to approve the Debtors payment of a
contingency fee to Branisa & Zomcik, P.C., who negotiated the
Settlement Agreement on behalf of Tronox, out of the proceeds of
the settlement.
Patrick J. Nash, Jr., Esq., at Kirkland & Ellis LLP, in Chicago,
Illinois, says the Debtors have reached an agreement with Century
that the Debtors believe is fair, equitable and in the best
interest of its estates.
According to Mr. Nash, Century or its predecessors issued certain
commercial general liability insurance policies to the Debtors
that provide defense and indemnity coverage for various policy
periods between 1954 and 1970.
A longstanding dispute exists between Century and the Debtors
regarding both the existence of the Tronox Policies and the extent
to which these policies provide defense and indemnity coverage for
certain third party bodily injury claims allegedly caused by
exposure to toxic substances, including asbestos, benzene and
silica, during the policy periods.
The Debtors estimate that they have incurred defense and indemnity
costs in excess of $4.9 million for asbestos claims and in excess
of $1.9 million for benzene claims, a total of approximately
$6.8 million of out of pocket costs for which the Tronox Policies
arguably provide coverage.
The Debtors have asserted that under the Tronox Policies, Century
owes them reimbursement for as much as 50%, or $3.4 million, of
the Debtors' $6.8 million out of pocket expenditure, and that
Century also has a continuing obligation to defend and indemnify
the Debtors until the policies are fully and completely exhausted.
Century has interposed a number of defenses and exclusions to
coverage under the Tronox Policies, which Tronox has vigorously
disputed, Mr. Nash relates.
After vigorous and extended good faith negotiations, the Parties
have entered into the Settlement Agreement, which resolves
longstanding disputes, terminates protracted and expensive
litigation and infuses money into the Debtors' estates through the
sale of the Tronox Policies to Century free and clear of other
interests for $4.725 million.
In accordance with the Debtors' chapter 11 plan term sheet, the
Debtors will contribute the $1.325 million of net proceeds from
the sale of the Tronox Policies to a tort claims trust, which will
provide funding for distributions to holders of tort claims
against the Debtors.
B&Z Contingency Fees
The Debtors are presently party to litigation styled (a) Tronox
LLC v. The Travelers Indemnity Company, et al., Civil Action No.
3:CV-06-1835P, pending in the United States District Court for the
Northern District of Texas, Dallas Division, to which Century is a
party, and (b) Kerr-McGee Corporation, et al. v. Admiral Insurance
Company, et al., Cause No. 02-0062-F, pending in the 214th
Judicial District Court of Nueces County, Texas to which Century
is a party.
Mr. Nash says that B&Z has represented the Debtors in the Coverage
Litigation since August 2006. Pursuant to the terms of B&Z's
retention for the Coverage Litigation, B&Z is entitled to receive
a reduced hourly rate of $200 for services rendered, plus a 15%
contingency fee for any money recovered in the Coverage
Litigation.
With respect to the Settlement Agreement, B&Z's contingency fee is
15% of the $4.725 million Settlement Amount, or $708,750. This
amount will be paid from the Debtors' $3.4 million in proceeds
from the sale of the Tronox Policies, and thus will not affect the
$1.325 million Net Proceeds that the Debtors' will contribute to
the tort claims trust.
The requests that the Court and the U.S. Trustee authorize Tronox
to make the contingency fee payment to B&Z notwithstanding the
$500,000 cap on payments to ordinary course professionals under
the OCP Order.
About Tronox Inc.
Headquartered in Oklahoma City, Tronox Incorporated (Pink Sheets:
TRXAQ, TRXBQ) is the world's fourth-largest producer and marketer
of titanium dioxide pigment, with an annual production capacity of
535,000 tonnes. Titanium dioxide pigment is an inorganic white
pigment used in paint, coatings, plastics, paper and many other
everyday products. The Company's four pigment plants, which are
located in the United States, Australia and the Netherlands,
supply high-performance products to approximately 1,100 customers
in 100 countries. In addition, Tronox produces electrolytic
products, including sodium chlorate, electrolytic manganese
dioxide, boron trichloride, elemental boron and lithium manganese
oxide.
Tronox has US$1.6 billion in total assets, including
US$646.9 million in current assets, as at September 30, 2008. The
Company has US$881.6 million in current debts and US$355.9 million
in total noncurrent debts.
Tronox Inc., aka New-Co Chemical, Inc., and 14 other affiliates
filed for Chapter 11 protection on January 13, 2009 (Bankr.
S.D.N.Y. Case No. 09-10156). The case is before Hon. Allan L.
Gropper. Richard M. Cieri, Esq., Jonathan S. Henes, Esq., and
Colin M. Adams, Esq., at Kirkland & Ellis LLP in New York,
represent the Debtors. The Debtors also tapped Togut, Segal &
Segal LLP as conflicts counsel; Rothschild Inc. as investment
bankers; Alvarez & Marsal North America LLC, as restructuring
consultants; and Kurtzman Carson Consultants serves as notice and
claims agent.
An official committee of unsecured creditors and an official
committee of equity security holders have been appointed in the
cases. The Creditors Committee has retained Paul, Weiss, Rifkind,
Wharton & Garrison LLP as counsel.
Until September 30, 2008, Tronox Inc. was publicly traded on the
New York Stock Exchange under the symbols TRX and TRX.B. Since
then, Tronox Inc. has traded on the Over the Counter Bulletin
Board under the symbols TROX.A.PK and TROX.B.PK. As of
December 31, 2008, Tronox Inc. had 19,107,367 outstanding shares
of class A common stock and 22,889,431 outstanding shares of class
B common stock.
Bankruptcy Creditors' Service, Inc., publishes Tronox Bankruptcy
News. The newsletter tracks the Chapter 11 proceeding undertaken
by Tronox Inc. and its 14 affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
TRONOX INC: Court Rejects Anadarko Request to Dismiss Lawsuit
-------------------------------------------------------------
Anadarko Petroleum Corporation and its wholly owned subsidiary,
Kerr-McGee Corporation previously asked the Court to dismiss the
Debtors' Adversary Complaint.
The core of the Complaint is the allegation that Anadarko/Kerr-
McGee imposed on the Debtors 70 years of legacy liabilities,
including enormous environmental obligations, and as a
consequence rendered it insolvent and severely undercapitalized.
In a memorandum of opinion and decision, Judge Gropper pointed
out that the Debtors' allegation that "a final split of the good
from the bad assets," is supported by detailed factual
allegations and not by a simple recitation of the contours of the
elements of a cause of action.
"Defendants repeatedly mock the fact that Plaintiffs have charged
the Defendants with having devised a 'scheme,' but the fact that
the Complaint uses an umbrella title to describe Defendants'
alleged actions does not justify ignoring the collective
underlying factual assertions," Judge Gropper said.
Since the allegations of the Complaint must be taken as true,
Anadarko/Kerr-McGee cannot reasonably assert that the allegations
are not plausible on their face, Judge Gropper explained. He
added that the allegation that Old Kerr-McGee set out to separate
its oil and gas business from its chemical business is certainly
plausible because Anadarko/Kerr-McGee does not deny that they
split the businesses.
However, Judge Gropper noted that there is nothing unlawful about
a spin-off of assets. The real issue is whether the
Anadarko/Kerr-McGee did anything wrong in pursuit of their
"scheme" and can be held liable on the claims asserted, Judge
Gropper said.
The case cannot be cut off at its inception on the theory that
the facts asserted and claims made are not plausible, Judge
Gropper further said. He noted that the relative strength of the
parties' explanations is not a question to be decided at the
pleading stage unless the plaintiff's version is so remote as to
be implausible.
"[The Debtors] in this proceeding have satisfied this burden in
their detailed and explicit catalogue of plausible facts," Judge
Gropper said.
A full-text copy of Judge Gropper's decision, signed March 31,
2010, is available for free at:
http://bankrupt.com/misc/tronox_memomarch30.pdf
About Tronox Inc.
Headquartered in Oklahoma City, Tronox Incorporated (Pink Sheets:
TRXAQ, TRXBQ) is the world's fourth-largest producer and marketer
of titanium dioxide pigment, with an annual production capacity of
535,000 tonnes. Titanium dioxide pigment is an inorganic white
pigment used in paint, coatings, plastics, paper and many other
everyday products. The Company's four pigment plants, which are
located in the United States, Australia and the Netherlands,
supply high-performance products to approximately 1,100 customers
in 100 countries. In addition, Tronox produces electrolytic
products, including sodium chlorate, electrolytic manganese
dioxide, boron trichloride, elemental boron and lithium manganese
oxide.
Tronox has US$1.6 billion in total assets, including
US$646.9 million in current assets, as at September 30, 2008. The
Company has US$881.6 million in current debts and US$355.9 million
in total noncurrent debts.
Tronox Inc., aka New-Co Chemical, Inc., and 14 other affiliates
filed for Chapter 11 protection on January 13, 2009 (Bankr.
S.D.N.Y. Case No. 09-10156). The case is before Hon. Allan L.
Gropper. Richard M. Cieri, Esq., Jonathan S. Henes, Esq., and
Colin M. Adams, Esq., at Kirkland & Ellis LLP in New York,
represent the Debtors. The Debtors also tapped Togut, Segal &
Segal LLP as conflicts counsel; Rothschild Inc. as investment
bankers; Alvarez & Marsal North America LLC, as restructuring
consultants; and Kurtzman Carson Consultants serves as notice and
claims agent.
An official committee of unsecured creditors and an official
committee of equity security holders have been appointed in the
cases. The Creditors Committee has retained Paul, Weiss, Rifkind,
Wharton & Garrison LLP as counsel.
Until September 30, 2008, Tronox Inc. was publicly traded on the
New York Stock Exchange under the symbols TRX and TRX.B. Since
then, Tronox Inc. has traded on the Over the Counter Bulletin
Board under the symbols TROX.A.PK and TROX.B.PK. As of
December 31, 2008, Tronox Inc. had 19,107,367 outstanding shares
of class A common stock and 22,889,431 outstanding shares of class
B common stock.
Bankruptcy Creditors' Service, Inc., publishes Tronox Bankruptcy
News. The newsletter tracks the Chapter 11 proceeding undertaken
by Tronox Inc. and its 14 affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
TRONOX INC: Time to Remove Actions Extended to September 30
-----------------------------------------------------------
The United States Bankruptcy Court for the Southern District of
New York has extended the time within which the Debtors may file
notices of removal with respect to any actions that are subject
to removal under Section 1452 of the Judiciary and Judicial
Procedure to the earlier of:
(a) September 30, 2010,
(b) the effective date of a plan of reorganization,
(c) the day that is 30 days after the entry of an order
terminating the automatic stay provided by Section 362 of
the Bankruptcy Code with respect to the particular action
sought to be removed, or
(d) with respect to certain Postpetition Actions, the time
periods set forth in Rule 9027(a)(3).
The Order is without prejudice to the Debtors' right to seek
further extensions of the Actions Removal Period.
About Tronox Inc.
Headquartered in Oklahoma City, Tronox Incorporated (Pink Sheets:
TRXAQ, TRXBQ) is the world's fourth-largest producer and marketer
of titanium dioxide pigment, with an annual production capacity of
535,000 tonnes. Titanium dioxide pigment is an inorganic white
pigment used in paint, coatings, plastics, paper and many other
everyday products. The Company's four pigment plants, which are
located in the United States, Australia and the Netherlands,
supply high-performance products to approximately 1,100 customers
in 100 countries. In addition, Tronox produces electrolytic
products, including sodium chlorate, electrolytic manganese
dioxide, boron trichloride, elemental boron and lithium manganese
oxide.
Tronox has US$1.6 billion in total assets, including
US$646.9 million in current assets, as at September 30, 2008. The
Company has US$881.6 million in current debts and US$355.9 million
in total noncurrent debts.
Tronox Inc., aka New-Co Chemical, Inc., and 14 other affiliates
filed for Chapter 11 protection on January 13, 2009 (Bankr.
S.D.N.Y. Case No. 09-10156). The case is before Hon. Allan L.
Gropper. Richard M. Cieri, Esq., Jonathan S. Henes, Esq., and
Colin M. Adams, Esq., at Kirkland & Ellis LLP in New York,
represent the Debtors. The Debtors also tapped Togut, Segal &
Segal LLP as conflicts counsel; Rothschild Inc. as investment
bankers; Alvarez & Marsal North America LLC, as restructuring
consultants; and Kurtzman Carson Consultants serves as notice and
claims agent.
An official committee of unsecured creditors and an official
committee of equity security holders have been appointed in the
cases. The Creditors Committee has retained Paul, Weiss, Rifkind,
Wharton & Garrison LLP as counsel.
Until September 30, 2008, Tronox Inc. was publicly traded on the
New York Stock Exchange under the symbols TRX and TRX.B. Since
then, Tronox Inc. has traded on the Over the Counter Bulletin
Board under the symbols TROX.A.PK and TROX.B.PK. As of
December 31, 2008, Tronox Inc. had 19,107,367 outstanding shares
of class A common stock and 22,889,431 outstanding shares of class
B common stock.
Bankruptcy Creditors' Service, Inc., publishes Tronox Bankruptcy
News. The newsletter tracks the Chapter 11 proceeding undertaken
by Tronox Inc. and its 14 affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
UAL CORP: May Announce Merger Deal with Continental on Monday
-------------------------------------------------------------
According to Gina Chon and Susan Carey at The Wall Street Journal,
people familiar with the matter said Continental Airlines Inc. and
UAL Corp.'s United Airlines are expected to announce Monday that
they are merging to form the world's largest airline.
According to the Journal, these sources said UAL's board of
directors is meeting Friday, while Continental's board is meeting
Friday and Sunday to discuss the deal. The sources, however,
cautioned that negotiations could still fall apart as they did in
2008, when Continental backed away. But after a hiccup over
pricing, the talks appear on track, they said.
As reported by the Troubled Company Reporter earlier this week,
Ms. Carey and Ms. Chon had said a $500 million contingent
liability that UAL would have to pay the Pension Benefit Guaranty
Corp. if a merger deal gets done, has added to the impasse between
UAL and Continental. They explained the payment would kick in if
the two carriers merged and together threw off more than $3.5
billion in annual earnings before interest, taxes, depreciation
and aircraft rent. According to the Journal, the liability dates
to 2005, when United terminated its four underfunded employee
pension plans in bankruptcy, and the PBGC took over the plans. In
exchange, the PBGC received $1.5 billion in notes and convertible
stock in the reorganized UAL, which left court protection in early
2006. The Journal added that one person familiar with the matter
said this wrinkle has now become part of the dispute over the
share price in the stock swap.
In their report Thursday, Ms. Chon and Ms. Carey did not indicate
how UAL's obligation to the PBGC will be addressed.
Sources told the Journal Continental's board met Wednesday and
agreed to continue the talks. It was also asked to consider a
range of prices in an effort to resolve the share-swap
disagreement.
The Journal says a weekend impasse over which share-price ratio
should be used to calculate the deal's value appeared to resolved
itself as UAL's share price declined this week. The Journal
relates the market is now expecting a swap of about 1.057 UAL
shares for each share of Continental.
Ms. Chon and Ms. Carey relate that United had wanted the exchange
terms to be based on the closing price of its stock on the day
before any agreement is signed. But that would lower the value
for Houston-based Continental shareholders, since UAL shares have
climbed more than Continental's since United's interest in a
merger was disclosed earlier this month, they report.
People familiar with the details have told the Journal Continental
wants its shareholders to be paid with UAL shares valued at their
average price in the 30-day period before April 7, when UAL stock
started to rise over news reports that it was in merger talks with
US Airways Group Inc. United wants to use the price of its shares
the day before a merger deal is signed.
UAL shares fell 3.6% Monday to $22.17, while Continental stock
rose 5% to $23.13. According to the Journal, Continental's stock
didn't start to rise until news leaked that it began merger talks
with United less than two weeks ago.
The Journal notes that in 4 p.m. trading on the Nasdaq Thursday,
UAL shares were down 1.3% to $21.47, while Continental shares were
up 2.4% to $22.70 on the New York Stock Exchange.
As reported by the Troubled Company Reporter last week, US Airways
withdrew from its own merger talks with United.
Sources have told the Journal that if a merger does go through,
Jeff Smisek, Continental's chief executive, would become chief
executive of the combined company, while Glenn Tilton, UAL's CEO,
would become the nonexecutive chairman. The company would be
based in Chicago, and United would be the surviving brand, the
people said, according to the Journal.
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.
UAL CORP: Executives to Get Millions if Merger Closes
-----------------------------------------------------
The Financial Times, citing a blog entry on Footnoted.org, reports
that the top five executives at UAL Corporation stand to receive
millions in cash and stock if United Airlines closes a merger deal
with Continental Airlines Inc.
FT relates that, according to Footnoted.org, had a merger happened
in 2009, UAL Chairman and Chief Executive Glenn Tilton would have
received $9 million in a payout triggered by a change in control
of the company. That figure is nearly four times the figure
listed on the previous year's proxy filing.
According to the report, the executives, as part of their pay
packages, benefit from explicit clauses which trigger accelerated
payouts should there be a change in control. In total, the top
five United executives would have been entitled to about $17.6
million in 2009, FT relates, citing Footnoted.org.
Performance-based equity rewards, normally paid out over several
years, would be brought forward if more than 50% of UAL shares
changed hands, FT notes.
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.
UNITED WESTERN: Unit Files Civil Case Against Countrywide
---------------------------------------------------------
United Western Bancorp, Inc., disclosed that United Western Bank,
the federal savings bank subsidiary of the Company, filed a
lawsuit in the Second Judicial District in the City and County of
Denver, Colorado for losses the Bank incurred relating to six
private label mortgaged-backed securities that the Bank purchased
from Countrywide Financial Corporation and various of its
subsidiaries listed in the complaint in an aggregate original
principal amount of approximately $108 million. In addition to
Countrywide, the defendants in this proceeding include Bank of
America Corporation, UBS Securities LLC and certain officers of
Countrywide.
The MBS were purchased by the Bank over a period beginning on or
around October 5, 2005 through October 12, 2006. The MBS are
described as follows: (i) $31,500,000 in face value of CWALT
Alternative Loan Trust 2005-J10, Class 2-A-3 (CUSIP No.
12668ABT1); (ii) $16,227,000 in face value of CWALT Alternative
Loan Trust 2005-43, Class 1-A-2 (CUSIP No. 12667G5T6); (iii)
$20,000,000 in face value of CWALT Alternative Loan Trust 2005-
J13, Class 1-A-3 (CUSIP No. 12668AB95); (iv) $34,381,000 in face
value of CWHL Mortgage Pass-Through Trust 2005-HYB8, Class 4-A-2
(CUSIP No. 126694QK7); (v) $2,965,173.33 in face value of CWHL
Mortgage Pass-Through Trust 2005-HYB3, Class 2-A-3A (CUSIP No.
12669GE56); and (vi) $2,855,292.86 in face value of CHL Mortgage
Pass-Through Trust 2005-31, Class 2-A-1 (CUSIP No. 126694UL0).
The Bank alleges in the complaint that each registration statement
and prospectus supplement made by the defendants and used to
market the MBS to the Bank contained untrue statements of material
facts and omissions of material facts with regard to Countrywide's
underwriting practices and the nature and characteristics of the
underlying mortgage loans in the MBS. The Bank's complaint seeks
an award of damages against the defendants, jointly and severally,
as a result of the defendants' wrongdoing, including, but not
limited to, an award of damages for violations (i) under Section
11 of the Securities Act of 1933 (the "Act"); (ii) under Section
12(a)(2) of the Act; and (iii) under Section 15 of the Act. In
addition, the complaint seeks rescission regarding the purchase of
each of the MBS and recovery of the consideration paid for each of
the MBS, including statutory interest, pursuant to the Colorado
Securities Act. Bank of America Corporation is a named defendant
in the complaint under successor liability law based upon the fact
that it acquired Countrywide pursuant to a merger on July 1, 2008.
"When Countrywide offered and then sold these securities to the
Bank, the defendants made numerous disclosures and statements
about the securities and the credit quality of the mortgage loans
that backed them. According to the complaint, many of those
statements were untrue and inaccurate. If we had known about
these issues with respect to the Countrywide mortgaged-backed
securities, we would have never purchased them in the first
place," said Guy Gibson, Chairman of the Board of the Company.
Mr. Gibson added, "We intend to pursue legal action against other
issuers of mortgaged-backed securities which the Bank or the
Company own."
About United Western Bancorp
Denver, Colo.-based United Western Bancorp, Inc. (NASDAQ: UWBK) --
http://www.uwbancorp.com/-- is a unitary thrift holding company
that operates a community-based bank. The Holding Company's UW
Trust Company subsidiary provides deposit services to
institutional customers and custodial, administrative, and escrow
services. At Dec. 31. 2009, the Company's balance sheet showed
$2.5 billion in assets and $2.3 billion in liabilities, and the
company reported a $42 million loss in 2009.
* * *
As reported in the Troubled Company Reporter on April 6, 2010,
United Western Bancorp, Inc., has elected to defer regularly
scheduled interest payments on all of the Company's outstanding
junior subordinated debentures, totaling approximately $30.4
million, relating to its trust preferred securities issued by
Matrix Bancorp Capital Trust II, VI and VIII for a period of 20
consecutive quarters on each Security. The terms of the
Securities and the indenture documents allow the Company to defer
payments of interest for the Deferral Period without default or
penalty.
U.S. CONCRETE: Reaches Deal with Bondholders on Restructuring
-------------------------------------------------------------
U.S. Concrete, Inc., reached an agreement with a substantial
majority of its bondholders on the terms of a comprehensive debt
restructuring. The proposed plan will reduce the Company's
subordinated debt by approximately $272 million and significantly
strengthen its balance sheet. To implement the restructuring, the
Company is seeking expedited confirmation of a Plan of
Reorganization filed with the United States Bankruptcy Court in
the District of Delaware.
The filing is not expected to affect the Company's suppliers or
customers. The Company is seeking approval to pay suppliers in
the ordinary course and to continue customer programs, as well as
customary relief to continue its wage and benefit programs for its
employees. The Company also requested approval of an $80 million
debtor-in-possession credit facility led by JPMorgan, as
administrative agent and sole-lead arranger, to fund operations
during the restructuring. The Company expects operations to
continue as usual during the chapter 11 process, which is expected
to be concluded in 75 to 90 days.
"We are very pleased that our bondholders are supportive of the
steps we have taken to improve our balance sheet and, through it,
the long-term health of our Company," said Michael W. Harlan,
President and Chief Executive Officer of U.S. Concrete. "As a
result of the restructuring, we should be positioned to be a
financially strong competitor in our markets. We have taken steps
to minimize the impact of this process on our suppliers, customers
and employees, and we intend to move forward as expeditiously as
possible to complete the restructuring."
The Plan provides that the holders of the Company's 8.325% Senior
Subordinated Notes due 2014 would exchange their Notes for the
equity in the reorganized Company. Existing shareholders would
receive warrants to acquire 15 percent of the equity of the
reorganized Company, with exercise prices to be set based upon
achievement of certain valuation hurdles of the reorganized
Company. The Company is requesting a hearing to approve the
disclosure statement related to the Plan and to set an expedited
schedule for approval of the Plan and for the Company's emergence
from chapter 11. The restructuring does not involve the Company's
joint venture operations in Michigan.
About U.S. Concrete
U.S. Concrete services the construction industry in several major
markets in the United States through its two business segments:
ready-mixed concrete and concrete-related products; and precast
concrete. The Company has 125 fixed and 11 portable ready-mixed
concrete plants, seven precast concrete plants and seven producing
aggregates facilities. During 2009 (including acquired volumes),
these plant facilities produced approximately 4.5 million cubic
yards of ready-mixed concrete and 3.0 million tons of aggregates.
For more information on U.S. Concrete, visit www.us-concrete.com.
U.S. CONCRETE: Comerica Provides $15MM Loan Facility to JV Units
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Effective as of April 1, 2010, Superior Materials, LLC and BWB,
LLC, as Borrowers; the operating subsidiaries of Superior
Materials Holdings, LLC, a joint venture formed by U.S. Concrete
Inc.; and the Edw. C. Levy Co., entered into an Amended and
Restated Credit Agreement, which amended and restated a credit
agreement dated as of April 6, 2007, among the Borrowers and
Comerica Bank.
Pursuant to the JV Credit Agreement, Comerica Bank will provide a
revolving credit facility, under which borrowings of up to $15
million may become available, which amount includes a $5 million
letter of credit subfacility.
The Borrowers intend to use amounts available under the JV Credit
Agreement for working capital and general corporate purposes. The
JV Credit Agreement is secured by substantially all the assets of
the Borrowers. The JV Credit Agreement is scheduled to mature on
September 30, 2010. Availability of borrowings is subject to a
borrowing base of net receivables, inventory and machinery and
equipment, and in certain circumstances letters of credit, in each
case, subject to the eligibility criteria set forth in the JV
Credit Agreement.
Borrowings under the facility are subject to interest at the
election of the Borrowers of a Eurodollar-based rate plus 5.00%
(subject to a 1.00% floor) or a domestic prime rate plus 3.00%
(subject to a floor of 2.5%). Commitment fees at an annual rate
of 0. 25% are payable on the unused portion of the facility.
Holdings and each of the Borrowers' existing and future
subsidiaries, if any, have guaranteed the repayment of all amounts
owing under the JV Credit Agreement. The JV Credit Agreement
contains covenants substantially the same as under the Existing JV
Credit Agreement restricting, among other things, the Borrowers'
and its Subsidiaries' distributions, dividends and repurchases of
capital stock and other equity interests, acquisitions and
investments, mergers, asset sales other than in the ordinary
course of business, indebtedness, liens, changes in business,
changes to charter documents and affiliate transactions. It also
generally limits the Borrowers' capital expenditures and will
require them to maintain compliance with a minimum EBITDA level as
of the end of each fiscal quarter. The JV Credit Agreement
provides that specified change of control events as well as, among
others, customary payment and covenant defaults, breach of
material representations and warranties, impairment of collateral
or guarantees, cross-default to certain material indebtedness,
judgments in excess of a threshold amount, certain ERISA events,
and certain bankruptcy events, would constitute events of default.
As a condition precedent to the initial advance under the JV
Credit Agreement, the Support Parties were required to fund
$3.56 million to the Borrowers in the form of cash equity
contributions representing a prefunding of their respective
obligations under certain support letters entered into in
connection with the Existing JV Credit Agreement for the period
from January 1, 2010 through September 30, 2010. The Company's
portion of this obligation was $1.1 million.
At April 1, 2010, there were $8.2 million outstanding borrowings,
including letters of credit, under the revolving credit facility
and the amount of the available credit was approximately $204,000.
The joint venture was formed effective April 1, 2007 and April 2,
2007, when the Company contributed its ready-mixed concrete and
related concrete products assets in Michigan to Holdings and its
subsidiaries in exchange for a 60% ownership interest, while the
Edw. C. Levy Co. contributed all of its ready-mixed concrete and
related concrete products assets for a 40% ownership interest.
The joint venture consists of 11 active ready-mixed concrete
plants, a 24,000-ton cement terminal and approximately 140 active
ready-mixed concrete trucks.
In addition, effective as of April 6, 2010, the Company entered
into a consent agreement to its Amended and Restated Credit
Agreement, dated June 30, 2006 -- USC Credit Agreement -- which
provides the Company with a revolving credit facility. Pursuant
to the Consent, the Lenders party thereto consented to the
issuance by JPMorgan Chase Bank, N.A., of a letter of credit in
the face amount of $3.5 million. The Specified Letter of Credit
is excluded from the measure of availability at which the fixed
charged coverage ratio is tested thereby providing the Company
with incremental availability of $3.5 million under the USC Credit
Agreement, is subject to a fee accruing at a rate per annum equal
to 7.25% on the average daily maximum undrawn face amount of the
Specified Letter of Credit (which fee is 200 basis points in
excess of the fee otherwise applicable to letters of credit issued
under the USC Credit Agreement), and is contractually subordinated
to payment in full of the secured obligations (other than
obligations in respect of the Specified Letter of Credit) under
the USC Credit Agreement.
Houston, Tex.-based U.S. Concrete, Inc., is a major producer of
ready-mixed concrete, precast concrete products and concrete-
related products in select markets in the United States.
According to the Troubled Company Reporter on March 19, 2010,
U.S. Concrete Inc. filed its annual report Form 10-K for the
year ended December 31, 2009, with the Securities and Exchange
Commission. In the Form 10-K, PricewaterhouseCoopers LLP, in
Houston, expressed substantial doubt about the Company's ability
to continue as a going concern. The independent auditors noted
that the Company has experienced severe sales volume declines and
diminished liquidity and may be unable to satisfy its obligations
and fund its operations in 2010.
The Company's balance sheet as of Dec. 31, 2009, showed
$389.2 million in assets and $399.4 million of debts, for a
stockholders' deficit of $10.2 million.
* * *
The Troubled Company Reporter on April 15, 2010, said Standard &
Poor's Ratings Services lowered its corporate credit rating on
U.S. Concrete to 'D' from 'CC'. At the same time, S&P lowered the
issue-level rating on the company's senior subordinated notes due
2014 to 'D' from 'C'. The recovery rating on the notes is '6',
indicating S&P's expectation for negligible (0% to 10%) recovery
for lenders in the event of a payment default.
"The rating actions stem from the company's nonpayment of the
interest payment due April 1, 2010, on its senior subordinated
notes," said Standard & Poor's credit analyst Tobias Crabtree. A
payment default has not occurred relative to the legal provisions
of the indenture governing the notes since there is a 30-day grace
period to make the payment. However, S&P considers a default to
have occurred, even if a grace period exists, when the nonpayment
is a function of the borrower being under financial stress --
unless S&P is confident that the payment will be made in full
during the grace period.
The TCR on April 21, 2010, said S&P withdrew its ratings on U.S.
Concrete, including the 'D' corporate credit rating, per the
company's request.
VERTIS HOLDINGS: Commences Comprehensive Refinancing Plan
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Vertis Holdings, Inc.'s principal operating subsidiary, Vertis,
Inc., has commenced (i) a private exchange offer, a tender offer
and a consent solicitation relating to its outstanding 13(1)/2
percent Senior Pay-in-Kind Notes due 2014, and (ii) a private
exchange offer and a consent solicitation relating to its 18(1)/2
percent Senior Secured Second Lien Notes due 2012 held by eligible
holders.
The Offers represent elements of a comprehensive $1.1 billion
refinancing of substantially all of Vertis' outstanding secured
and unsecured indebtedness. Upon completion of the planned
transactions, Vertis will have significantly reduced its
outstanding indebtedness and related interest expense and extended
its debt maturity profile. In addition to the Offers, the
refinancing is expected to include:
-- the refinancing of Vertis' existing $225 million revolving
credit facility with the proceeds of a new senior secured
asset-based revolving credit facility of up to $200 million;
-- the incurrence of approximately $600 million of new first lien
indebtedness, the proceeds of which will be used to refinance
Vertis' existing term loan and to fund the cash consideration
for the Second Lien Notes Exchange Offer;
-- the issuance to Avenue Capital of approximately $113 million of
new 13/15 percent PIK-Option Senior Secured Notes due 2016 in a
private exchange for amounts owed to Avenue Capital under
Vertis' existing term loan; and
-- the exchange of approximately $74 million aggregate principal
amount of Existing Second Lien Notes held by Avenue Capital for
shares of 13(1)/2 percent exchangeable pay-in-kind preferred
stock of Holdings.
The purpose of the Refinancing Transactions is to improve Vertis'
capital structure by reducing its overall debt by more than
$250 million, reducing its annual interest expense and extending
its debt maturity profile. Vertis believes consummation of the
Refinancing Transactions will better position Vertis to mitigate
future refinancing risks and provide it with greater flexibility
in making decisions to accomplish its business objectives and
investing in its future. In addition, Vertis believes
consummation of the Refinancing Transactions will provide
customers, employees, suppliers and stakeholders with more
confidence in Vertis as a result of an improved capital structure.
Prior to the date hereof, certain eligible holders of the Notes
executed support agreements whereby they agreed to validly tender
approximately 70 percent of the Senior Notes and more than 75
percent of the Existing Second Lien Notes (excluding Existing
Second Lien Notes held by Avenue Capital) in the applicable Offer
at or prior to the applicable Consent Time.
The Senior Notes Offer
Vertis has commenced a private offer to exchange (the "Senior
Notes Exchange Offer") its outstanding Senior Notes for shares of
Holdings' common stock (the "Common Stock"). Vertis is offering
to exchange 784.377 shares of Common Stock for each $1,000
principal amount of Senior Notes validly tendered, and not validly
withdrawn. The Senior Notes Exchange Offer is open only (i) in
the United States to holders who are "qualified institutional
buyers" or "accredited investors" as such terms are defined under
the Securities Act of 1933 and (ii) outside the United States to
holders who are persons other than U.S. persons in reliance upon
Regulation S under the Securities Act of 1933 ("Eligible Senior
Noteholders").
In addition to the Senior Notes Exchange Offer, Vertis is also
offering to purchase (the "Tender Offer" and, together with the
Senior Notes Exchange Offer, the "Senior Notes Offer") Senior
Notes from (i) Eligible Senior Noteholders and (ii) all remaining
holders of Senior Notes that are not eligible to participate in
the Senior Notes Exchange Offer ("Non-Eligible Senior
Noteholders") for (i) $400.00 for each $1,000 principal amount of
Senior Notes validly tendered by holders at or prior to 5 p.m.,
New York City time, on April 28, 2010 (such time, as it may be
extended, the "Consent Time"), and (ii) $350.00 for each $1,000
principal amount of Senior Notes validly tendered by holders after
the Consent Time, but at or prior to the Expiration Time (as
defined below). The cash consideration payable by Vertis pursuant
to the Tender Offer will be funded by the sale of shares of Common
Stock to Avenue Capital in a private placement.
Concurrently with the Senior Notes Offer, Vertis is soliciting
consents from holders to certain amendments to the indenture
governing the Senior Notes to remove substantially all of the
restrictive covenants and certain events of default in the
indenture. Approval of these amendments requires the consent of
holders of at least a majority of the aggregate outstanding
principal amount of Senior Notes. Eligible Senior Noteholders
that validly tender for equity, and do not validly withdraw, their
Senior Notes at or prior to the Consent Time, will be paid a
consent fee of $5.00 per $1,000 principal amount of Senior Notes.
Holders who validly tender their Senior Notes for exchange and/or
purchase will be deemed to have delivered a consent with respect
to such tendered Senior Notes. Senior Notes may not be withdrawn
after the Consent Time. The consent payment with respect to the
Tender Offer is included in the cash consideration described above
and will only be paid with respect to Senior Notes validly
tendered in the Tender Offer, and not validly withdrawn, at or
prior to the Consent Time.
The Second Lien Notes Exchange Offer
Vertis has also commenced a private offer to exchange (the "Second
Lien Notes Exchange Offer") its outstanding Existing Second Lien
Notes for new 13 percent Senior Secured Notes due 2016 (the "New
Secured Notes"). Vertis is offering to exchange $393.73 principal
amount of New Secured Notes and $591.27 of cash for each $1,000
principal amount of Existing Second Lien Notes validly tendered,
and not validly withdrawn at or prior to the Consent Time.
Eligible holders who have validly tendered, and not withdrawn,
Existing Second Lien Notes after the Consent Time, but at or prior
to the Expiration Time will receive $393.73 principal amount of
New Secured Notes and $561.27 of cash for each $1,000 principal
amount of Existing Second Lien Notes validly tendered. The Second
Lien Notes Exchange Offer is open only (i) in the United States to
holders who are "qualified institutional buyers" or institutional
"accredited investors" as such terms are defined under the
Securities Act of 1933 and (ii) outside the United States to
holders who are persons other than U.S. persons in reliance upon
Regulation S under the Securities Act of 1933 ("Eligible Second
Lien Noteholders").
Eligible Second Lien Noteholders validly tendering Existing Second
Lien Notes at or prior to the Consent Time will also receive
additional New Secured Notes in an amount equal to 98.5 percent of
the accrued and unpaid interest due to such holders from April 1,
2010 until, but not including, the settlement date for the Second
Lien Notes Exchange Offer. Eligible Second Lien Noteholders
validly tendering Existing Second Lien Notes after the Consent
Time will receive additional New Secured Notes in an amount equal
to 95.5 percent of the accrued and unpaid interest due to such
holders from April 1, 2010 until, but not including, the
settlement date for the Second Lien Notes Exchange Offer. Assuming
the settlement date for the Second Lien Notes Exchange Offer
occurs on May 21, 2010, (i) for each $1,000 principal amount of
Existing Second Lien Notes validly tendered at or prior to the
Consent Time and not validly withdrawn, the interest would be
approximately $25.31 principal amount of New Secured Notes and
(ii) for each $1,000 principal amount of Existing Second Lien
Notes validly tendered after the Consent Time, the interest would
be approximately $24.54 principal amount of New Secured Notes.
Concurrently with the Second Lien Notes Exchange Offer, Vertis is
soliciting consents from Eligible Second Lien Noteholders to
certain amendments to the indenture governing the Existing Second
Lien Notes to (i) eliminate substantially all of the restrictive
covenants and certain events of default and related provisions
contained in the indenture and (ii) provide for the release of all
of the liens on the collateral securing the Existing Second Lien
Notes and the related guarantees, including by amending the
indenture and by terminating or amending, as applicable, the
related security documents. Approval of these amendments requires
the consent of holders of at least 75 percent of the aggregate
principal amount of Existing Second Lien Notes (not including
Existing Second Lien Notes held by Avenue Capital or any of
Vertis' other affiliates).
Timetable
The Offers will expire at 5:00 p.m., New York City time, on
May 18, 2010, unless extended by Vertis (the "Expiration Time").
Vertis may elect to extend one or both of the Offers. The Offers
are subject to the terms and conditions set forth in the
applicable confidential offering memorandum and consent
solicitation statement (each an "Offering Memorandum") and the
related letter of transmittal (the "Letter of Transmittal"), each
dated April 15, 2010. Only Eligible Senior Noteholders, Non-
Eligible Senior Noteholders and Eligible Second Lien Noteholders
who have qualified with the Information and Exchange Agent,
Bondholder Communications Group, LLC, electronically or otherwise,
confirming their status, as applicable, may participate in the
Offers. In order to qualify as an Eligible Second Lien Noteholder
and receive a copy of the applicable Offering Memorandum and
Letter of Transmittal, please visit the eligibility website,
htpp://www.bondcom.com/vertis2ndLien or contact the Information
and Exchange Agent at (212) 809-2663. Noteholders wishing to
participate in the Senior Notes Exchange Offer and qualify as an
Eligible Senior Noteholder, as applicable, should visit the
eligibility website http://www.bondcom.com/vertisPIKor contact
the Information and Exchange Agent at (212) 809-2663.
Prior to the date hereof, certain eligible holders of the Senior
Notes, executed support agreements whereby they agreed to validly
tender approximately 70 percent aggregate outstanding principal
amount of Senior Notes at or prior to the Consent Time. In
addition, prior to the date hereof, certain eligible holders of
the Existing Second Lien Notes, executed support agreements
whereby they agreed to validly tender more than 75 percent
aggregate outstanding principal amount of Existing Second Lien
Notes at or prior to the Consent Time.
Consummation of the Refinancing Transactions, including the
Offers, is subject to the satisfaction or waiver by Vertis of
numerous conditions set forth in the applicable Offering
Memorandum and Letter of Transmittal, and we cannot assure you
that they will be consummated on the terms described herein, on
the timetable described herein or at all. In the case of the
Senior Notes Offer, such conditions include, among other things,
(i) noteholders of at least 95 percent of the aggregate
outstanding principal amount of Senior Notes tendering their
Senior Notes at or prior to the Expiration Time, (ii) Eligible
Senior Noteholders not affiliated with Avenue Capital representing
at least 15 percent of the aggregate outstanding principal amount
of Senior Notes validly tendering their Senior Notes in the Senior
Notes Exchange Offer for shares of Common Stock at or prior to the
Expiration Time, (iii) the amendment of Holdings' certificate of
incorporation and certain other agreements such that the issuance
of Common Stock will not conflict with certain limitations in
Holdings' certificate of incorporation or certain agreements to
which Holdings is a party, (iv) the adoption and effectiveness of
certain amendments to Holdings' certificate of incorporation to
increase the authorized Common Stock, and (v) consummation of the
other Refinancing Transactions. In the case of the Second Lien
Notes Exchange Offer, such conditions include, among other things,
(i) Eligible Second Lien Noteholders tendering at least 95 percent
of the aggregate outstanding principal amount of Existing Second
Lien Notes (not including Existing Second Lien Notes held by
Avenue Capital or any of Vertis' other affiliates) at or prior to
the Expiration Time, (ii) the adoption and effectiveness of
certain amendments to Holdings' certificate of incorporation to
eliminate certain provisions relating to governance rights in
favor of the Existing Second Lien Notes, and (iii) consummation of
the other Refinancing Transactions. Vertis may waive any of these
or any other conditions in its sole discretion.
About Vertis Holdings Inc.
Headquartered in Baltimore, Maryland, Vertis Holdings, Inc. --
http://www.vertisinc.com/-- is a provider of targeted print
advertising and direct marketing solutions to America's retail and
consumer services companies.
The company and its six affiliates previously filed for Chapter 11
protection on July 15, 2008 (Bankr. D. Del. Case No. 08-11460).
In August 2008, it emerged from bankruptcy, after completing a
merger with ACG Holdings.
VERTIS HOLDINGS: Early Consent Dates Expire
-------------------------------------------
Vertis Holdings, Inc., disclosed the expiration of the early
consent dates in connection with its principal operating
subsidiary Vertis, Inc.'s previously commenced (i) private
exchange offer, tender offer and consent solicitation relating to
its 13(1)/2 percent Senior Pay-in-Kind Notes due 2014, and (ii)
private exchange offer and consent solicitation relating to its
18(1)/2 percent Senior Secured Second Lien Notes due 2012 and the
receipt of the required consents in the Offers for certain
amendments to the indenture governing the Senior Notes and the
indenture governing the Existing Second Lien Notes.
As of 5:00 p.m., New York City time, on April 28, 2010,
approximately $200.1 million aggregate principal amount of the
Senior Notes were validly tendered in the Senior Notes Offer and
the related consents thereby delivered, and not validly withdrawn.
Of the total Senior Notes validly tendered in the Senior Notes
Offer, approximately $172.3 million aggregate principal amount
were tendered for Holdings' common stock and approximately
$27.8 million aggregate principal amount were tendered for cash,
representing approximately 71 percent and 12 percent,
respectively, of the outstanding principal amount of the Senior
Notes. In addition, as of the Consent Time, approximately
$357.0 million aggregate principal amount (or approximately 94
percent) of the Existing Second Lien Notes were validly tendered
in the Second Lien Notes Exchange Offer and the related consents
thereby delivered, and not validly withdrawn. As of the Consent
Time, the consents delivered in the Offers exceeded the amount
required under the Indentures to approve the adoption of the
Proposed Amendments to each of the Indentures.
Holdings also announced that Vertis will pay the same
consideration to holders of Senior Notes participating in the
Senior Notes Exchange Offer and/or Tender Offer, as applicable,
who validly tender at or prior to 5:00 p.m., New York City time,
on April 30, 2010, that was offered to holders of Senior Notes who
validly tendered, and did not validly withdraw, their Notes at or
prior to the Consent Time in order to provide prospective
participants in the Senior Notes Offer additional time to consider
tendering their Senior Notes and receive such consideration.
Pursuant to the terms of the Offers, Notes already tendered, and
not validly withdrawn, and Notes tendered after the Consent Time
may no longer be withdrawn and the related consents may no longer
be revoked.
The Proposed Amendments to the Senior Notes Indenture will
eliminate substantially all of the restrictive covenants and
certain events of default and related provisions contained in the
Senior Notes Indenture. The Proposed Amendments to the Second
Lien Indenture will (i) eliminate substantially all of the
restrictive covenants and certain events of default and related
provisions contained in the Second Lien Indenture and (ii) provide
for the release of all of the liens on the collateral securing the
Existing Second Lien Notes and the related guarantees.
Based on the receipt of the required consents to the Proposed
Amendments, Vertis, certain of its subsidiaries and the trustees
under each Indenture, are entering into supplemental indentures
reflecting the Proposed Amendments. The Proposed Amendments will
not become operative unless and until the Offers are consummated.
As previously announced, the Offers represent elements of a
comprehensive $1.1 billion refinancing of substantially all of
Vertis' outstanding secured and unsecured indebtedness. Upon
completion of the planned transactions, Vertis will have
significantly reduced its outstanding indebtedness and related
interest expense and extended its debt maturity profile.
The Senior Notes Offer
Upon consummation of the private exchange offer for the Senior
Notes, Holdings will issue 784.377 shares of Common Stock for each
$1,000 principal amount of Senior Notes validly tendered, and not
validly withdrawn, by Eligible Senior Noteholders. The Senior
Notes Exchange Offer is open only (i) in the United States to
holders who are "qualified institutional buyers" or "accredited
investors" as such terms are defined under the Securities Act of
1933 and (ii) outside the United States to holders who are persons
other than U.S. persons in reliance upon Regulation S under the
Securities Act. Eligible Senior Noteholders that have validly
tendered their Senior Notes for the Common Stock at or prior to
5:00 p.m., New York City time, on April 30, 2010, will be paid a
consent fee of $5.00 per $1,000 principal amount of Senior Notes.
Upon consummation of the tender offer for the Senior Notes, Vertis
will pay to Eligible Senior Noteholders and all remaining holders
of Senior Notes that are not eligible to participate in the Senior
Notes Exchange Offer, (i) $400.00 for each $1,000 principal amount
of Senior Notes validly tendered at or prior to 5:00 p.m., New
York City time, on April 30, 2010, and (ii) $350.00 for each
$1,000 principal amount of Senior Notes validly tendered by such
holders after 5:00 p.m., New York City time, on April 30, 2010,
but at or prior to the Expiration Time. The cash consideration
payable by Vertis pursuant to the Tender Offer will be funded by
the sale of shares of Common Stock to Avenue Capital in a private
placement.
The Second Lien Notes Exchange Offer
Upon consummation of Vertis' private offer to exchange its
outstanding Existing Second Lien Notes for new 13 percent Senior
Secured Notes due 2016, Vertis will issue $393.73 principal amount
of New Secured Notes and pay $591.27 of cash for each $1,000
principal amount of Existing Second Lien Notes validly tendered,
and not validly withdrawn, at or prior to the Consent Time by
Eligible Second Lien Holders. Eligible Second Lien Holders who
have validly tendered, and not withdrawn, Existing Second Lien
Notes after the Consent Time, but at or prior to the Expiration
Time, will receive $393.73 principal amount of New Secured Notes
and $561.27 of cash for each $1,000 principal amount of Existing
Second Lien Notes validly tendered. The Second Lien Notes
Exchange Offer is open only (i) in the United States to holders
who are "qualified institutional buyers" or institutional
"accredited investors" as such terms are defined under the
Securities Act of 1933 and (ii) outside the United States to
holders who are persons other than U.S. persons in reliance upon
Regulation S under the Securities Act.
Eligible Second Lien Noteholders validly tendering Existing Second
Lien Notes at or prior to the Consent Time will also receive
additional New Secured Notes in an amount equal to 98.5 percent of
the accrued and unpaid interest due to such holders from April 1,
2010, until, but not including, the settlement date for the Second
Lien Notes Exchange Offer. Eligible Second Lien Noteholders
validly tendering Existing Second Lien Notes after the Consent
Time will receive additional New Secured Notes in an amount equal
to 95.5 percent of the accrued and unpaid interest due to such
holders from April 1, 2010, until, but not including, the
settlement date for the Second Lien Notes Exchange Offer.
The Offers will expire at 5:00 p.m., New York City time, on
May 18, 2010, unless extended by Vertis. Vertis may elect to
extend one or both of the Offers. The Offers are subject to the
terms and conditions set forth in the applicable confidential
offering memorandum and consent solicitation statement and the
related letters of transmittal, each dated April 15, 2010.
Consummation of the Refinancing Transactions, including the
Offers, is subject to the satisfaction or waiver by Vertis of
numerous conditions set forth in the applicable Offering
Memorandum and Letter of Transmittal, and we cannot assure you
that they will be consummated on the terms described herein, on
the timetable described herein or at all.
About Vertis Holdings Inc.
Headquartered in Baltimore, Maryland, Vertis Holdings, Inc. --
http://www.vertisinc.com/-- is a provider of targeted print
advertising and direct marketing solutions to America's retail and
consumer services companies. The company and its six affiliates
filed for Chapter 11 protection on July 15, 2008 (Bankr. D. Del.
Case No. 08-11460). Gary T. Holtzer, Esq., and Stephen A.
Youngman, Esq. at Weil, Gotshal & Manges LLP, represent the
Debtors as lead counsels. Mark D. Collins, Esq., and Michael
Joseph Merchant, Esq., at Richards Layton & Finger, P.A.,
represent the Debtors as Delaware local counsels. Lazard Freres &
Co. LLC is the Company's financial advisor. When the Debtors
filed for protection from their creditors they listed assets of
between $500 million and $1 billion and debts of more than
$1 billion.
(Vertis Bankruptcy News, Issue 7; Bankruptcy Creditors' Service
Inc., http://bankrupt.com/newsstand/or 215/945-7000)
VISKASE COS: Moody's Assigns 'B2' Rating on $30 Mil. Notes
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Moody's Investors Service assigned a B2 rating to the proposed
$30 million senior secured notes due 2018 of Viskase Companies,
Inc. and affirmed the B2 Corporate Family Rating and stable
ratings outlook. Moody's also affirmed the SGL-2 speculative
grade liquidity rating.
The rating is in response to an additional issuance of $30 million
senior secured notes due 2018. The proceeds from the transaction
will be used for general corporate purposes including capital
expenditures. The notes will be issued under the same indenture
as Viskase's existing $175 million 9.785% senior secured notes due
2018.
The B2 corporate family rating reflects Viskase's lack of scale,
concentration of sales, and lack of long-term contracts with
customers. The rating also reflects the nascent competitive
equilibrium, foreign currency exposure, softness in certain
segments, and primarily commoditized product line.
The rating is supported by continued strong end user demand and
current tight industry capacity in the primary segment (cellulosic
casings). The rating is also supported by anticipated strong
operating performance, pro-forma abundance of cash on the balance
sheet and the company's success in its productivity initiatives
and global diversification.
The SGL-2 rating is supported by the pro-forma large cash balance,
no significant near term maturities and full availability on the
asset based revolver (not rated by Moody's). The speculative
grade liquidity rating also contemplates the recent extension of
the asset-based revolver to January 31, 2012.
Moody's took these rating actions for Viskase Companies, Inc.:
* Affirmed Corporate Family Rating, B2
* Affirmed Probability of Default Rating, B2
* Assigned $30 million senior secured notes due 2018, B2 (LGD 3
46%)
* Affirmed $175 million 9.875% senior secured notes due 2018 to B2
(LGD 3 46% from 45%)
* Affirmed Speculative Grade Liquidity Rating, SGL-2
The rating outlook is stable.
The ratings are subject to receipt and review of the final
documentation.
Moody's last rating action on Viskase occurred on December 4, 2009
when Moody's upgraded the company's Corporate Family Rating to B2
from Caa1, revised the ratings outlook to stable and rated new
notes.
Headquartered in Darien, Illinois, Viskase Companies, Inc.
(Viskase) is a producer of cellulose, fibrous and plastic casings
for hot dogs and sausages, lunch meats, hams and other processed
meat and poultry products. Revenues for the twelve months ended
December 31, 2009, were $299 million.
VISKASE COS: S&P Affirms Corporate Credit Rating at 'B-'
--------------------------------------------------------
Standard & Poor's Ratings Services said that it affirmed its
ratings on Darien, Ill.-based Viskase Cos. Inc., including the
'B-' corporate credit rating. The outlook is positive.
"The affirmation follows the announcement of Viskase's plan to add
on $30 million to its existing senior secured notes," said
Standard & Poor's credit analyst James Siahaan.
The issue-level rating on the secured notes was affirmed at 'B-'
(the same as the corporate credit rating) and the '4' recovery
rating remains unchanged. The '4' recovery rating indicates S&P's
expectation of average (30%-50%) recovery in a default scenario.
Pro forma for the proposed offering, the aggregate amount of
Viskase's senior secured notes due 2018 would increase to
$205 million from $175 million.
The notes will be issued under the same indenture as, and will
rank equally in right of payment with, the company's $175 million
senior secured notes (which were issued in December 2009). The
ratings are based on preliminary terms and conditions.
Viskase expects to use proceeds from the notes issuance for
general corporate purposes, which may include capital expenditures
and working capital investments. Despite the addition of
incremental debt, S&P does not expect Viskase's financial risk
profile to undergo substantial deterioration because of the notes
issuance. Pro forma for the transaction, and assuming no benefit
from potential growth-related investments, Viskase's adjusted
total debt to EBITDA and funds from operations to total debt
ratios were roughly 4.4x and 17%, respectively, at Dec. 31, 2009.
The rating actions also reflect Viskase's improved operating
performance and S&P's expectation that steady demand, global
capacity constraints for cellulose casings, and management's
profitability initiatives will continue to sustain operating
margins and EBITDA growth.
VISTEON CORP: U.S. Trustee Defends Decision on Equity Panel
-----------------------------------------------------------
Bill Rochelle at Bloomberg News reports that the U.S. Trustee
submitted a document with the Bankruptcy Court, explaining her
decision not to appoint an official stockholders' committee for
Visteon Corp. The Official Committee of Unsecured Creditors and
the U.S. Trustee are opposing formation of an equity committee.
According to the report, the U.S. Trustee argues that the
bankruptcy judge shouldn't overrule her decision because
stockholders haven't shown a "substantial likelihood" the equity
holders will receive anything under a Chapter 11 plan. She said
"there does not appear to be sufficient value in the debtors'
estates to pay unsecured creditors in full, let alone make
distributions to holders of equity interests."
The shareholders -- Cypress Management Master LP, Lenado Capital
Advisors LLC, and Goshawk Capital Corp. -- have asked the Court to
direct the appointment of an equity committee. The shareholders
are pointing to how some of the bonds have traded at or above par.
A hearing on the equity holders' request for their own statutory
committee has been scheduled for May 5.
About Visteon Corp.
Headquartered in Van Buren Township, Michigan, Visteon Corporation
(NYSE: VC) -- http://www.visteon.com/-- is a global automotive
supplier that designs, engineers and manufactures innovative
climate, interior, electronic and lighting products for vehicle
manufacturers, and also provides a range of products and services
to aftermarket customers. The Company has corporate offices in
Van Buren Township, Michigan (U.S.); Shanghai, China; and Kerpen,
Germany. It has facilities in 27 countries and employs roughly
35,500 people. The Company has assets of US$4,561,000,000 and
debts of US$5,311,000,000 as of March 31, 2009.
Visteon Corporation and 30 of its affiliates filed for Chapter 11
protection on May 28, 2009, (Bank. D. Del. Case No. 09-11786
through 09-11818). Judge Christopher S. Sontchi oversees the
Chapter 11 cases. James H.M. Sprayregen, Esq., Marc Kieselstein,
Esq., and James J. Mazza, Jr., Esq., at Kirkland & Ellis LLP, in
Chicago, Illinois, represent the Debtors in their restructuring
efforts. Laura Davis Jones, Esq., James E. O'Neill, Esq., Timothy
P. Cairns, Esq., and Mark M. Billion, Esq., at Pachulski Stang
Ziehl & Jones LLP, in Wilmington, Delaware, serve as the Debtors'
local counsel. The Debtors' investment banker and financial
advisor is Rothschild Inc. The Debtors' notice, claims, and
solicitation agent is Kurtzman Carson Consultants LLC. The
Debtors' restructuring advisor is Alvarez & Marsal North America,
LLC.
Bankruptcy Creditors' Service, Inc., publishes Visteon Bankruptcy
News. The newsletter tracks the Chapter 11 proceedings of Visteon
Corp. and its debtor-affiliates. (http://bankrupt.com/newsstand/
or 215/945-7000)
VITESSE SEMICONDUCTOR: Lake Union Holds 7.4% of Common Stock
------------------------------------------------------------
Michael Self, Lake Union Capital Management, LLC and Lake Union
Capital Fund, LP based in Seattle, Washington, disclosed that as
of April 14, 2010, they may be deemed to beneficially own
30,000,000 shares or roughly 7.4% of the common stock of Vitesse
Semiconductor Corporation.
About Vitesse
Based in Camarillo, California, Vitesse Semiconductor Corporation
(Pink Sheets: VTSS.PK) -- http://www.vitesse.com/-- designs,
develops and markets a diverse portfolio of semiconductor
solutions for Carrier and Enterprise networks worldwide.
Vitesse had total assets of $87,633,000 against total debts of
$130,120,000 and Series B preferred stock of $1,113,000, resulting
in shareholders' deficit of $43,600,000 as of December 31, 2009.
Vitesse entered into debt restructuring agreements in October 2009
with its major creditors, which allow the Company to satisfy its
creditors by converting most of its debt into new common stock,
preferred stock and new convertible debentures. Vitesse is
seeking stockholder approval to increase the number of authorized
shares of the Company's common stock from 500,000,000 to
5,000,000,000 in conjunction with the debt restructuring
agreements. The Company has warned if stockholders do not approve
the proposal to authorize the Company to issue more shares by
February 15, 2010, it will face a 1.0% per month interest charge
on the New Debentures (at a cost of about $500,000 per month)
beginning on February 16, 2010 and continuing until the increase
in the authorized shares is approved. In addition, the holders of
the New Debentures will have the right to demand repayment of the
principal amount of the debt, plus potentially certain make-whole
interest payments representing interest that would have been
earned if the bonds had not been converted early. The Company
could potentially be forced to file for protection from creditors
under Chapter 11 of the U.S. Bankruptcy Code.
VYTERIS INC: Annual Stockholders' Meeting Set for June 16
---------------------------------------------------------
The annual meeting of stockholders of Vyteris, Inc. will be held
on June 16, 2010 at 10:00 a.m. New York City Time at the Vyteris,
Inc.'s company headquarters at 13-01 Pollitt Drive, in Fair Lawn,
New Jersey.
At the meeting, stockholders will be asked to consider and act on:
1. A proposal to elect eight directors of the Company to
serve until the expiration of their terms and thereafter
until their successors have been duly elected and
qualified.
2. To conduct other business if properly raised at the
meeting or any adjournment thereof.
Only stockholders of record at the close of business on April 22,
2010, are entitled to notice of, and to vote at, the meeting.
A full-text copy of the Company's proxy statement is available at
no charge at http://ResearchArchives.com/t/s?60e4
About Vyteris
Fair Lawn, N.J.-based Vyteris, Inc. (OTC BB: VYTR)
-- http://www.vyteris.com/-- has developed and produced the first
FDA-approved, electronically controlled transdermal drug delivery
system that transports drugs through the skin comfortably, without
needles.
The Company's balance sheet as of December 31, 2009, showed
$2.6 million in assets and $11.4 million of debts, for a
stockholders' deficit of $8.8 million.
Amper, Politziner & Mattia, LLP, in Edison, N.J., expressed
substantial doubt about the Company's ability to continue as a
going concern. The independent auditors noted that the Company
has incurred recurring losses and is dependent upon obtaining
sufficient additional financing to fund operations and has not
been able to meet all of its obligations as they become due.
VYTERIS INC: Ferring Demands $1,653,000 for Breach
--------------------------------------------------
Vyteris, Inc., on April 9, 2010, received notice from Ferring
Pharmaceuticals, Inc., that it was in breach of its obligations
under the arrangements between the two entities for failure to
make payments to Ferring with respect to development costs and
demanded payment in the amount of $1,653,000 by April 30, 2010.
Vyteris does not concur with Ferring's calculation of amounts owed
and is working to reconcile such amount with Ferring. In
furtherance of settling this matter, the Company met with Ferring
representatives on April 20, 2010, and discussed various
settlement possibilities.
To facilitate a mutually agreeable settlement, Ferring has
verbally agreed to forbear from exercising any remedies against
Vyteris for a period of 30 days from April 30, 2010, thus
extending the date by which payment must be made to May 30, 2010.
The Company intends to continue to work with Ferring to arrive at
a mutually acceptable resolution to the outstanding matters
between the two entities.
About Vyteris
Fair Lawn, N.J.-based Vyteris, Inc. (OTC BB: VYTR)
-- http://www.vyteris.com/-- has developed and produced the first
FDA-approved, electronically controlled transdermal drug delivery
system that transports drugs through the skin comfortably, without
needles.
The Company's balance sheet as of December 31, 2009, showed
$2.6 million in assets and $11.4 million of debts, for a
stockholders' deficit of $8.8 million.
Amper, Politziner & Mattia, LLP, in Edison, N.J., expressed
substantial doubt about the Company's ability to continue as a
going concern. The independent auditors noted that the Company
has incurred recurring losses and is dependent upon obtaining
sufficient additional financing to fund operations and has not
been able to meet all of its obligations as they become due.
WALID HAZIN: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------
Joint Debtors: Walid Ramadan Hazin
dba Ben & Jerry's Ice Cream
Aladdin Market & Deli
Mervat Omar Hazin
1366 Stephen Way
San Jose, CA 95129
Bankruptcy Case No.: 10-54344
Chapter 11 Petition Date: April 27, 2010
Court: U.S. Bankruptcy Court
Northern District of California (San Jose)
Judge: Arthur S. Weissbrodt
Debtor's Counsel: Lars T. Fuller, Esq.
The Fuller Law Firm
60 N Keeble Avenue
San Jose, CA 95126
Tel: (408) 295-5595
E-mail: Fullerlawfirmecf@aol.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
According to the schedules, the Joint Debtors say that assets
total $1,339,268 while debts total $2,199,379.
A copy of the Joint Debtors' list of 20 largest unsecured
creditors filed together with the petition is available for free
at http://bankrupt.com/misc/canb10-54344.pdf
The petition was signed by the Joint Debtors.
WASHINGTON MUTUAL: Shareholders Panel Seeking Examiner
------------------------------------------------------
Bill Rochelle at Bloomberg News reports that the Official
Committee of Equity Holders in Washington Mutual Inc.'s case is
asking the Bankruptcy Court in Delaware to direct the appointment
of an examiner to investigate the merits of the proposed
settlement with the Federal Deposit Insurance Corp. and JPMorgan
Chase & Co. The Company and the official creditors' committee
unsuccessfully opposed holding a quick hearing on the motion. The
bankruptcy judge will decide the examiner issue at a May 5
hearing.
According to the report, the Equity Committee last week won, over
objections by management, approval from the Bankruptcy Court to
initiate proceeding in state court to compel the holding of a
shareholders' meeting. The Equity Committee has been at
loggerheads with WaMu since the committee was formed in January.
The Company previously failed to win approval of its request to
disband the Equity Committee.
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).
WELLINGTON PRESERVE: Case Summary & 19 Largest Unsecured Creditors
------------------------------------------------------------------
Debtor: Wellington Preserve Corporation
c/o Ronald G. Neiwirth, Registered Agent
1395 Brickell Avenue
14th Floor
Miami, FL 33131
Bankruptcy Case No.: 10-21225
Chapter 11 Petition Date: April 27, 2010
Court: United States Bankruptcy Court
Southern District of Florida (Miami)
Judge: A. Jay Cristol
Debtor's Counsel: Ronald G Neiwirth, Esq.
1395 Brickell Ave 14 Fl
Miami, FL 33131
Tel: (305) 789-9200
Fax: (305) 789-9201
E-mail: rgn@fowler-white.com
Estimated Assets: $50,000,001 to $100,000,000
Estimated Debts: $50,000,001 to $100,000,000
The petition was signed by Craig A. (Tony) Gomez, company's
president.
Debtor's List of 14 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
CLICO Enterprises, Ltd. $ 73,000,000
c/o Craig A. (Tony) Gomez,
Liquidator
P.O. Box N 1991
Nassau Bahamas
Palm Beach County $2,848,556
Tax Collector
301 North Olive Ave.
P.O. Box 3715
West Palm Beach, FL 33414
CLICO (Bahamas) Limited $720,000
c/o Craig A. (Tony) Gomez
P.O. Box N 1991
Nassau, Bahamas
Agnoli Barber and Brundage $92,316
O'Dell, Inc. Land Development $47,522
H & J Contracting, Inc. $23,059
Hunt & Gross, PA $12,802
Lucido & Associates $7,230
Atlantic Caribbean $4,066
Mapping, Inc.
Alan Gerwig & $3,532
Associates, Inc.
Lake and Wetland $2,697
Management, Inc.
Adonel Concrete $2,219
Village of Wellington Water $954
Utility Dept.
Cotton & Company $750
Marcum Rachlin $518
FPL Deposit Administration $509
Phipps & Howell $452
Genapure Corporation Company $340
Dixie Bluepring Services, Inc. $62
Debtor-affiliate that filed separate Chapter 11 petition:
Petition
Debtor Case No. Date
------ -------- ----
CLICO Bahamas, Ltd. 09-17829 4/28/09
W.R. GRACE: Has OK to Contribute $9.9 Million to Pension Plan
-------------------------------------------------------------
W.R. Grace & Co., and its units obtained the Court's permission to
make contributions their defined benefit retirement plans covering
their employees in the United States, which will total $9,924,866
on or prior to April 15, 2010.
Payment of April 2010 Contributions to the Grace Retirement Plans
is a continuation of the Debtors' "least costly approach" to
assure the Debtors' compliance with the minimum funding
requirements under federal law, David M. Bernick, Esq., at
Kirkland & Ellis, LLP, in New York, relates.
The Debtors have sought and obtained the Court's authority to
contribute an aggregate of $264,224,632 since 2006:
Year Contribution
---- ------------
2006 101,427,573
2007 76,002,734
2008 49,026,185
2009 37,768,140
The future minimum required Contributions through 2010 is expected
to be 45,931,837, Mr. Bernick says.
The total of the required quarterly minimum contributions for the
2010 plan year due on April 15, 2010, must be the lesser of:
-- 25% of the total 2009 minimum contributions minus available
credit balances for each of the Debtors' individual Plans;
or
-- the quarterly minimum amount calculated specifically for
the 2010 Plan year, which will be included in the final
2010 actuarial valuation report.
The total minimum contributions for the 2009 plan year were
approximately $39.9 million, while the available credit balances
are approximately $50,000. The actual amount of the 2010 Plan
year contributions will depend on calculations in the 2010
actuarial report for the Grace Retirement Plans, Mr. Bernick
notes.
The Debtors anticipate that the 2010 Actuarial Valuation Report
will be finalized sometime during May 2010. Because the 2010
actuarial report will not be finalized prior to April 15, 2010,
the April 2010 Contributions will be equal to 25% of the total
2009 minimum contributions, or approximately $9.9 million, Mr.
Bernick discloses.
The Debtors also anticipate that the 2010 Actuarial Report will
not result in quarterly minimum contributions that are lesser than
25% of the total 2009 minimum contributions. However, in the
unlikely event that the 2010 actuarial report does result in
lesser quarterly contributions, any portion of the April 2010
Contributions that are greater than the actual 2010 plan year
quarterly required minimum contributions will be used to offset
subsequent required minimum contributions, Mr. Bernick explains.
After the 2010 actuarial report is finalized, the Debtors will
submit another pension funding request to make all required
contributions for the remainder of 2010 and early 2011. The
Request will specify the exact amount of each contribution
required during that period, as well as information regarding the
overall funded status of the Grace Retirement Plans.
About W.R. Grace
Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA)
-- http://www.grace.com/-- supplies catalysts and silica
products, especially construction chemicals and building
materials, and container products globally.
The Company and its debtor-affiliates filed for Chapter 11
protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139).
David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura
Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP,
represent the Debtors in their restructuring efforts. The Debtors
hired Blackstone Group, L.P., for financial advice.
PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock &
Stroock & Lavan, LLP, and Duane Morris, LLP, represent the
Official Committee of Unsecured Creditors. The Creditors
Committee tapped Capstone Corporate Recovery LLC for financial
advice. David T. Austern, the legal representative of future
asbestos personal injury claimants, is represented by Orrick
Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA.
Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla
R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official
Committee of Asbestos Personal Injury Claimants. The Asbestos
Committee of Property Damage Claimants tapped Scott Baena, Esq.,
and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod,
LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin
Naftalis & Frankel, LLP, represents the Official Committee of
Equity Security Holders.
W.R. Grace and its debtor affiliates, with the support of the
Official Committee of Asbestos Personal Injury Claimants, the
Asbestos PI Future Claimants' Representative and the Official
Committee of Equity Security Holders, have submitted a proposed
Chapter 11 plan of reorganization. The Chapter 11 plan is built
around an April 2008 settlement for all present and future
asbestos personal injury claims, and a subsequent settlement for
asbestos property damage claims. The Plan confirmation hearing
wrapped up on January 25.
Bankruptcy Creditors' Service, Inc., publishes W.R. Grace
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their
affiliates. (http://bankrupt.com/newsstand/or 215/945-7000)
W.R. GRACE: Law Firms Seek Payment of Fees for Adversary Cases
--------------------------------------------------------------
Several professionals ask Bankruptcy Judge Judith Fitzgerald to
approve their remaining fee applications relating to the long-
since resolved and closed fraudulent conveyance adversary
proceedings and allowing the payment of the remaining 20%
holdbacks of legal fees in those proceedings:
* Kirkland & Ells, LLP
* Pachulski, Stang, Ziehl and Jones LLP
* Bilzin Sumberg Baena Price & Axelrod
* Conway DelGenio Gries & Co., LLC
* Ferry Joseph & Pearce P.A.
* Hamilton, Rabinovitz & Associates, Inc.
* W.D. Hilton
* Caplin & Drysdale, Chartered.
Specifically, the Professionals were all authorized to perform
services in November 2002 in the Adversary Proceedings styled
(i) Official Committee of Asbestos Personal Injury Claimants, et
al. v. Sealed Air Corporation and Cryovac, Inc., et al., and
(ii) Official Committee of Asbestos Personal Injury Claimants, et
al, vs. Fresenius Medical Care Holdings, Inc., et al. The
Adversary Proceedings were commenced in March 2002.
Due to their complex nature, the settlement of the Fresenius
Adversary Proceeding was not approved until June 25, 2003, while
the settlement of the Sealed Air Adversary Proceeding was not
approved until June 27, 2005.
The Debtors have recently conducted an audit of their books and
records with respect to their payment of fees and expenses to all
of the professionals retained in their Chapter 11 cases. As a
result, they have discovered that there still remain fee
applications from the Adversary Proceedings that have not been
approved by the Court and holdbacks that have not been paid.
The unpaid holdbacks of legal fees for the Professionals for which
quarterly applications were filed, to which no objections have
been asserted, total $292,817.
The Professionals noted that they were asked by the Debtors to
seek the Court's allowance of the Remaining Fee Applications so
that the Debtors could clear up their books and records with
respect to the outstanding payables.
A certificate of no objection was subsequently filed with respect
to the Motion.
About W.R. Grace
Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA)
-- http://www.grace.com/-- supplies catalysts and silica
products, especially construction chemicals and building
materials, and container products globally.
The Company and its debtor-affiliates filed for Chapter 11
protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139).
David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura
Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP,
represent the Debtors in their restructuring efforts. The Debtors
hired Blackstone Group, L.P., for financial advice.
PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock &
Stroock & Lavan, LLP, and Duane Morris, LLP, represent the
Official Committee of Unsecured Creditors. The Creditors
Committee tapped Capstone Corporate Recovery LLC for financial
advice. David T. Austern, the legal representative of future
asbestos personal injury claimants, is represented by Orrick
Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA.
Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla
R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official
Committee of Asbestos Personal Injury Claimants. The Asbestos
Committee of Property Damage Claimants tapped Scott Baena, Esq.,
and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod,
LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin
Naftalis & Frankel, LLP, represents the Official Committee of
Equity Security Holders.
W.R. Grace and its debtor affiliates, with the support of the
Official Committee of Asbestos Personal Injury Claimants, the
Asbestos PI Future Claimants' Representative and the Official
Committee of Equity Security Holders, have submitted a proposed
Chapter 11 plan of reorganization. The Chapter 11 plan is built
around an April 2008 settlement for all present and future
asbestos personal injury claims, and a subsequent settlement for
asbestos property damage claims. The Plan confirmation hearing
wrapped up on January 25.
Bankruptcy Creditors' Service, Inc., publishes W.R. Grace
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their
affiliates. (http://bankrupt.com/newsstand/or 215/945-7000)
W.R. GRACE: Proposes Amended EMC & MMO Settlement
-------------------------------------------------
W.R. Grace & Co. asks the Court to approve its amended and
restated settlement agreement with Employers Mutual Casualty
Company, Mutual Marine Office, Inc., Pacific Mutual Marne Office,
Inc., and Mutual Marne Office of the Midwest.
Claims have been asserted against Grace alleging injury due to
exposure to asbestos and asbestos-containing materials. The
Company has also incurred certain liabilities, expenses, and
losses arising out of those Claims.
MMO, as attorney-in-fact for EMC, issued three policies of excess
liability insurance that provide, or are alleged to provide,
insurance coverage to Grace. The attachment point of the lowest-
level policy is $50,000,000, while the other two policies attach
at $75,000,000 and $100,000,000. Grace has incurred and may incur
in the future certain liabilities, expenses and losses arising out
of asbestos-related claims, for which Grace seeks coverage under
the Subject Insurance Policies.
In August 1998, Grace, EMC and MMO entered into an Asbestos
Settlement Agreement, resolving disputes regarding the application
of the Subject Insurance Policies to certain claims involving
asbestos.
The Debtors' First Amended Joint Plan of Reorganization
contemplates that Asbestos PI Claims will be enjoined and
channeled to the Asbestos Personal Injury, which will process and
resolve Asbestos PI Claims pursuant to the Asbestos PI Trust
Distribution Procedures. Under the Amended Plan, Asbestos
insurance rights -- including rights under the EMC and MMO
Insurance Policies and under the 1998 Agreement -- are to be
transferred to the Trust, to be used to fund payment of Asbestos
PI Claims.
To resolve disputes that have arose between Grace and EMC and MMO
regarding their rights and obligations under the Insurance
Policies, the Parties entered into an amended settlement agreement
that contemplates, among other things, payment by MMO to the Trust
of the sum of $3,608,247 in four equal quarterly installments
without need for litigation to enforce the assignment by Grace to
the Trust of rights under the Insurance Policies and the 1998
Agreement.
The Amended Agreement also contemplates a compromise of defenses
that EMC and MMO might have with respect to coverage for any
individual Asbestos PI Claim.
Upon the execution date of the Agreement, EMC and MMO agrees to
take no action to oppose confirmation of the Amended Plan. If the
Plan is confirmed, the Trust, at its own expense, will enforce the
Asbestos PI Channeling Injunction with respect to the Asbestos PI
Claims subject to the Asbestos PI Channeling Injunction that are
asserted against EMC and MMO.
The Debtors said that they received no objections to Motion.
About W.R. Grace
Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA)
-- http://www.grace.com/-- supplies catalysts and silica
products, especially construction chemicals and building
materials, and container products globally.
The Company and its debtor-affiliates filed for Chapter 11
protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139).
David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura
Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP,
represent the Debtors in their restructuring efforts. The Debtors
hired Blackstone Group, L.P., for financial advice.
PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock &
Stroock & Lavan, LLP, and Duane Morris, LLP, represent the
Official Committee of Unsecured Creditors. The Creditors
Committee tapped Capstone Corporate Recovery LLC for financial
advice. David T. Austern, the legal representative of future
asbestos personal injury claimants, is represented by Orrick
Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA.
Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla
R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official
Committee of Asbestos Personal Injury Claimants. The Asbestos
Committee of Property Damage Claimants tapped Scott Baena, Esq.,
and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod,
LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin
Naftalis & Frankel, LLP, represents the Official Committee of
Equity Security Holders.
W.R. Grace and its debtor affiliates, with the support of the
Official Committee of Asbestos Personal Injury Claimants, the
Asbestos PI Future Claimants' Representative and the Official
Committee of Equity Security Holders, have submitted a proposed
Chapter 11 plan of reorganization. The Chapter 11 plan is built
around an April 2008 settlement for all present and future
asbestos personal injury claims, and a subsequent settlement for
asbestos property damage claims. The Plan confirmation hearing
wrapped up on January 25.
Bankruptcy Creditors' Service, Inc., publishes W.R. Grace
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their
affiliates. (http://bankrupt.com/newsstand/or 215/945-7000)
WYNN LAS: S&P Changes Outlook to Stable; Affirms 'BB' Rating
------------------------------------------------------------
Standard & Poor's Ratings Services revised its rating outlook on
Wynn Resorts Ltd. and its wholly owned subsidiary, Wynn Las Vegas
LLC, to stable from negative. S&P affirmed its existing ratings
on Wynn, including S&P's 'BB' corporate credit rating.
At the same time, S&P assigned its issue-level and recovery
ratings to the new $382 million 7.875% first-mortgage notes due
2020, co-issued by Wynn Resorts Ltd. subsidiaries Wynn Las Vegas
LLC and Wynn Las Vegas Capital Corp. S&P rated the notes 'BB+'
(one notch higher than the 'BB' corporate credit rating) with a
recovery rating of '2', indicating S&P's expectation of
substantial (70% to 90%) recovery for noteholders in the event of
a payment default. The new notes were issued in exchange for a
like amount of the company's existing 6.625% first-mortgage notes
due in 2014.
"The revision of the outlook to stable reflects S&P's belief that
actions taken by management to bolster liquidity and the debt
maturity profile, combined with S&P's current expectations for the
Las Vegas and Macau gaming markets, will allow Wynn to maintain
credit measures in line with the rating, notwithstanding
substantial intermediate-term development plans in Cotai," said
Standard & Poor's credit analyst Ben Bubeck.
S&P's 'BB' corporate credit rating reflects Wynn's significant
debt burden, the high levels of competition in the Las Vegas and
Macau markets, and S&P's expectation for modest declines in cash
flow generation in Las Vegas in 2010. Still, the company's assets
are among the highest-quality in the gaming sector, and S&P
expects Wynn's solid liquidity position, which last year's IPO in
Macau further strengthened, to allow the company to weather a
prolonged gaming downturn.
YALE SAGE: Voluntary Chapter 11 Case Summary
--------------------------------------------
Debtor: Yale Sage
1418 N Lake Shore Drive, Apartment 14
Chicago, IL 60610-1642
Bankruptcy Case No.: 10-18749
Chapter 11 Petition Date: April 27, 2010
Court: U.S. Bankruptcy Court
Northern District of Illinois (Chicago)
Judge: Pamela S. Hollis
Debtor's Counsel: Neil P. Gantz, Esq.
Neil Gantz Law Offices
105 W Madison Street, Suite 901
Chicago, IL 60602
Tel: (312) 726-4880
Fax: (312) 236-6999
E-mail: neilgantz@yahoo.com
Estimated Assets: $500,001 to $1,000,000
Estimated Debts: $1,000,001 to $10,000,000
According to the schedules, the Debtor says that assets total
$800,000 while debts total $2,215,032.
The Debtor did not file a list of creditors together with its
petition.
The petition was signed by the Debtor.
ZAVARRELLA FAMILY: Case Summary & Largest Unsecured Creditor
------------------------------------------------------------
Debtor: Zavarrella Family Partnership, LLC
105 Day Street
Newington, CT 06111
Bankruptcy Case No.: 10-21365
Chapter 11 Petition Date: April 27, 2010
Court: U.S. Bankruptcy Court
District of Connecticut (Hartford)
Judge: Albert S. Dabrowski
Debtor's Counsel: Peter L. Ressler, Esq.
Groob Ressler & Mulqueen
123 York Street, Suite 1B
New Haven, CT 06511-0001
Tel: (203) 777-5741
Fax: (203) 777-4206
E-mail: ressmul@yahoo.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
The petition was signed by Anna F. Zavarella, member.
The list of the Company's largest unsecured creditors contains
only one entry:
Entity Nature of Claim Claim Amount
------ --------------- ------------
TD Banknorth, N.A. 105 Day Street $348,634
PO Box 70 Gray Road; Newington, CT
ME 100-33
Portland, ME 04112
* Oregon Investment Council to Invest in Failed Banks
-----------------------------------------------------
Dow Jones' Daily Bankruptcy Review reports that the Oregon
Investment Council has approved committing $100 million to a pool
of capital targeting failed banks that is being advised by
Sageview Capital LP.
The Oregon Investment Council --
http://www.ost.state.or.us/About/OIC/-- oversees the investment
of most funds managed by the State Treasury, including the Public
Employees Retirement Fund. The OIC ensures that money in the
funds is invested and reinvested to earn the greatest possible
returns for the beneficiaries.
The Council prescribes the allocation of investments among asset
classes (e.g. stocks, bonds, real estate) to maximize investment
returns while maintaining an appropriate level of risk. The
Council also decides when to make significant new investments, and
selects investment firms to manage investments on Oregon's behalf.
The Council's prescriptions guide the professional financial
managers at the state treasury and at the private firms contracted
to manage state funds as they make day-to-day investment
decisions.
The Council consists of a six-member board made up of four
gubernatorial appointees, the State Treasurer, and the Executive
Director of the Public Employees Retirement System, who serves in
an ex-officio and non-voting capacity. The Council is required to
report to the Governor and the Legislative Assembly at each
regular session and at other times the Council considers to be in
the public interest.
* Former U.S. Trustee Kelly Beaudin Stapleton Joins MorrisAnderson
------------------------------------------------------------------
MorrisAnderson has appointed Kelly Stapleton as a Managing
Director in its New York office. MorrisAnderson is a leading
financial and operational advisory firm, offering interim
management and financial restructuring services to distressed and
underperforming businesses across all industries in the middle
market.
As a Managing Director in the New York office, Stapleton will be
an integral part of the leadership team and responsible for
growing the firm's East Coast presence. She will also provide
financial and business counsel to MorrisAnderson's debtor-based
clients, building upon her extensive experience with bankruptcy
and creditors' rights. Stapleton joins MorrisAnderson from a New
York boutique financial-advisory firm where she represented
creditors and debtors in reorganizations, liquidations, section
363 sales and fraud investigations. Serving as a financial
advisor, she has worked on notable cases such as Meadocraft, Value
City, Trinsum, Archway Cookies and Comfort Co. (Sleep
Innovations).
"Kelly brings invaluable insight into the bankruptcy and
restructuring process and the critical issues facing distressed
companies, creditors and lenders in a wide range of industries,"
said Domenic Aversa, Principal and Manager of the New York City
office. "MorrisAnderson's long-standing success stems from its
deep operational experience; however, Kelly's legal and creditor
experience adds a new dimension to our skill set that will be
vital to the national growth of our firm."
With more than 15 years of professional experience, Stapleton
previously served as U.S. Trustee for Region 3. Appointed by the
U.S. Attorney General, Stapleton managed the bankruptcy system for
Delaware, Pennsylvania and New Jersey and oversaw all bankruptcies
filed in these states. During her tenure, she also was
responsible for oversight on hundreds of significant corporate
restructurings, including Dura Automotive, New Century Financial,
W.R. Grace & Co., Sharper Image, Owens Corning, Linens N Things
and Buffets, Inc. Stapleton also spent 10 years practicing law in
the private sector, and began her career prosecuting cases as an
assistant district attorney in Philadelphia.
Stapleton holds a bachelor's degree from the University of
California, Los Angeles and a J.D. from Georgetown University Law
Center. She is active in the American Bankruptcy Institute (ABI)
where she co-chairs the Business Writing Competition and is the
Education Director of the Ethics Committee. Stapleton is also
involved with the Pennsylvania Bar Association, serving on its
Executive Council and previously co-chairing its Women in the
Profession committee.
Stapleton's appointment follows MorrisAnderson's recent hiring of
Kevin Flanagan as Managing Director of the Milwaukee office and
Terry Bartz as Managing Director of the Minneapolis office.
"This infusion of dynamic, experienced talent is central to our
goal of expanding MorrisAnderson's core capabilities in the middle
market to meet the changing needs of businesses, and in
particular, creditors," said Dan Dooley, Principal and COO of
MorrisAnderson. "All of our offices will benefit from the
addition of proven leaders with unique experience that can
diversify our offerings to a wide range of clients."
As part of MorrisAnderson's growth strategy, the firm's New York,
Atlanta, Cleveland and Chicago offices are actively recruiting
professionals with financial advisory experience to augment its
existing operational advisory work.
About MorrisAnderson Now celebrating its 30th anniversary,
Chicago-based MorrisAnderson has offices in New York, Atlanta,
Milwaukee, Los Angeles, Cleveland, St. Louis, Charlotte, N.C. and
Minneapolis. The firm's service offerings include performance
improvement, financial advisory, interim management, turnarounds,
workouts, litigation support and insolvency services and wind-
downs. MorrisAnderson emphasizes hands-on involvement for
companies with $50 million to $500 million in annual sales.
* BOOK REVIEW: Corporate Turnaround - How Managers Turn Losers
Into Winners!
--------------------------------------------------------------
Author: Donald B. Bibeault
Publisher: Beard Books
Softcover: 424 pages
List Price: $34.95
Corporate Turnaround offers, claims the author, a "four-pronged
approach" to taking the "mystery out of turnaround management."
One of the prongs -- Mr. Biebeault's personal experiences -- is
complemented with another prong -- interviews with sixteen top
turnaround specialists. Together, they bring forth the drama and
the stakes of turnarounds. The other two prongs -- surveys of
eighty-one corporate presidents and the author's exhaustive
research (400 references in all, taken from books, periodicals,
and scholarly writings) -- lend a great deal of substance and
authority to the book's subject matter. This variety of material
greatly enriches the book, which is perhaps more relevant today
than it was in 1982 when it was first published.
Identifying the underlying causes for failure can be a futile
chicken-and-egg pursuit. "Businesses decline for both
uncontrollable external reasons and for controllable internal
reasons," says Mr. Bibeault. Nonetheless, Mr. Bibeault adds that
"[i]n most cases . . . business problems are internally
generated." As one of his sources explains, managing a company is
like piloting a ship. "If the ship is in good condition and the
captain is competent, it is almost impossible for it to be sunk by
a wave or a succession of waves." A competent captain with a ship
in good condition can even bring it through a storm.
The manager of a company is different from the captain of a ship,
however, in that the manager not only has to pilot the company,
but is also responsible for its condition. The central challenge
for a manager is to ensure that the company is structurally solid,
operationally relevant, efficient, and adaptable to be able to
weather any conditions the company might encounter. Even though,
as Bibeault maintains, in practically all cases business problems
are internally generated, this does not rule out having to heed
external conditions. External economic, political, or market
conditions expose and exacerbate a company's internal weaknesses.
"Management is not always able to deal with outside forces, even
when they can see them gathering." A manager can be effective,
however, in "getting a company into a posture, both from a
marketing and financial point of view, where it can resist normal
business hazards and other more serious external challenges." In
such circumstances, a turnaround may be a company's only hope for
survival, and the abilities of a turnaround manager are required.
Bibeault describes such managers as "the George Pattons of the
business world." "They don't have a lot of friends, they're not
social successes, they're just known as blood-and-guts guys," is
the way one corporate executive puts it; a description repeated in
different words by other experienced businesspersons Bibeault
consulted.
In Corporate Turnaround, Bibeault explores every facet of a
turnaround. The causes of a company's decline are followed with a
thorough consideration of the management basics in effecting a
turnaround. The book also examines the attributes of the
turnaround manager and offers specific pragmatic steps for getting
on the path to recovery. Lastly, Corporate Turnaround offers an
overall strategy. The book is not only informative about the
crucial subject of corporate turnaround, but also a manual for
managing one.
Bibeault has worked on turnarounds of distressed companies for
over 25 years in addition to holding top executive positions in a
number of corporations. He also holds advisory or governing board
positions with different universities and business groups.
*********
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 ***