/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/100518.mbx T R O U B L E D C O M P A N Y R E P O R T E R Tuesday, May 18, 2010, Vol. 14, No. 136 Headlines 2151 HOTEL: Request to Use Cash Collateral Denied 2151 HOTEL: Proposes to Sell Assets to Macino for $14 Million ACCEPTANCE INSURANCE: Petition for Writ of Certiorari Denied ACCREDITED HOME: Opposes Creditors' Bid to Probe Claims ACUMENT GLOBAL: S&P Upgrades Credit Rating to B- From CCC+ ALERIS INTERNATIONAL: Court Enters Written Order Confirming Plan ALL AMERICAN: Samsung Appeals Ruling on Antitrust Arbitration ALMATIS BV: Has Injunction Against Utility Companies ALMATIS BV: Proposes to Pay Claims of Critical Vendors ALMATIS BV: Proposes to Pay Prepetition Sales & Use Taxes ALMATIS BV: To Maintain Prepetition Insurance Policies ASARCO LLC: Asbestos Trust Submits 2009 Report ASARCO LLC: Submits March 31 Post-Confirmation Quarterly Report ASARCO LLC: Wants Details on Oppenheimer $10.19MM Fee Request ATLANTIC COAST: Court Reinstates Reorganization Case AVENTINE RENEWABLE: Whitebox Advisors Owns 12.3% of Common Shares BI-LO LLC: Reorganized Entity Has 'B' Credit Rating from S&P BLACK BULL: Court Denies Access to DIP Loans from CIP BB BLOCKBUSTER INC: Incurs $65.4 Million Net Loss in Q1 2010 BOESER INC: Taps Joseph Anthony Wentzell as Bankruptcy Counsel BOESER INC: U.S. Trustee Unable to Form Creditors Committee BOESER INC: Has Access to Prepetition Lenders' Cash Until June 15 BROADSTAR WIND: Files for Chapter 11 Protection BROWN PUBLISHING: Gets Interim OK to Use PNC's Cash Collateral BROWN PUBLISHING: Asks Court to Approve Auction Procedures BROWN PUBLISHING: Asks for Court OK to Obtain DIP Financing BWAY CORP: S&P Affirms B+ Credit Rating; Outlook Negative CALIFORNIA COASTAL: Reinstates Ban on Acquisitions of Common Stock CALIFORNIA COASTAL: Posts $2.4 Million Net Loss in Q1 2010 CANWEST GLOBAL: Canada Unit Has OK to Hold Meeting with Creditors CENTRAL METAL: Plan Outline Hearing Scheduled for May 27 CERTIFIED DIABETIC: Files For Chapter 11 Bankruptcy Protection CHEM RX CORP: Organizational Meeting to Form Panel on May 21 CHEM RX: Needs CRO to Have Access to Cash Collateral CINCINNATI BELL: Fitch Puts B+ IDR on Rating Watch Negative COLLIER LAND: U.S. Trustee Unable to Form Creditors Committee COLLIER LAND: Meeting of Creditors Scheduled for June 16 CONVERSION SERVICES: Reports $557,110 Net Loss for March 31 Qtr COOPER-STANDARD: CS Automotive Sells $450 Million in Notes COOPER-STANDARD: RSM Richter Seeks Nod for Activities COSINE COMMUNICATIONS: Reports $199,000 Net Loss for March 31 Qtr CRESTRIDGE ESTATES: Dismissal or Conversion Hearing Set for May 26 DEAN FOODS: S&P Affirms BB- Rating & Changes Outlook to Negative DELTA MUTUAL: Board OKs Employment Deals with CEO and EVP DELTA MUTUAL: Reports Sale of Shares to Private Investor DOMTAR CORP: S&P Raises Long-Term Credit Rating to BB+ DOWNTOWN MAITLAND: Reorganization Case Transferred to Florida DYNAVAX TECHNOLOGIES: March 31 Balance Sheet Upside-Down by $1.8MM EPICEPT CORP: Reports $4,508,000 Net Loss for March 31 Quarter EPICEPT CORP: Annual Stockholders' Meeting Set for June 3 EPIX PHARMACEUTICALS: To Hold Shareholders Meeting on June 23 EPIX PHARMACEUTICALS: Posts Additional Info on Auction Sale EXTENDED STAY: Bank of America Objects to Plan EXTENDED STAY: Plan Exclusivity Extended Until Sept. 16 EXTENDED STAY: U.S. Trustee Objects to $9MM in Professional Fees FAYETTEVILLE MARKETFAIR: Cash Collateral Hearing Set for May 24 FAYETTEVILLE MARKETFAIR: Plan Confirmation Hearing Set for June 29 FIRST NATIONAL: March 31 Balance Sheet Upside-Down by $8.9 Million GENERAL GROWTH: Bidding Protocol for Equity Investments Approved GENERAL GROWTH: Reports $78,358,000 Net Income for First Quarter GENERAL MOTORS: Old GM Says Claims Reduced by $120 Billion GTC BIOTHERAPEUTICS: Posts $7.7 Million Net Loss in Q1 2010 GULFSTREAM CRANE: Hearing on Continued Cash Use Set for June 10 HANMI FINANCIAL: Incurs $49.5 Million Net Loss in Q1 2010 IMPERIAL CAPITAL: Court Schedules June 14 as Claims Bar Date IMPERIAL CAPITAL: Has Until June 18 to File Chapter 11 Plan INN AT MISSOURI: Wants Receiver to Turn Over Assets INNATECH LLC: Files Schedules of Assets and Liabilities IRVINE SENSORS: Reports $3,419,600 Net Loss for March 29 Quarter LAS VEGAS MONORAIL: Court Extends Claims Bar Date for 45 Days LIQUIDATION OUTLET: Taps Brian L. Budsberg as Bankr. Counsel LIQUIDATION OUTLET: U.S. Trustee Forms 3-Member Creditors Panel LIQUIDATION OUTLET: Can Obtain $2MM DIP Loan from LOI Capital LIQUIDATION OUTLET: Court OKs Sale of All Assets to Hilco Merchant LPATH INC: Reports $659,471 Net Income for March 31 Quarter LPATH INC: Annual Stockholders' Meeting Set for June 30 LPATH INC: Registers 68 Million Shares for Resale LPL HOLDINGS: S&P Changes Outlook to Positive & Affirms B+ Rating MEDICAL STAFFING: Posts $6.5 Million Net Loss in Q1 2010 MIDWEST BANC: March 31 Balance Sheet Upside-Down by $49.5 Million MILESTONE SCIENTIFIC: Reports $83,922 Net Income for March 31 Qtr MILESTONE SCIENTIFIC: Annual Stockholders' Meeting Set for May 26 MORRIS PUBLISHING: Earns $171.5 Million in Q1 2010 NEFF CORP: Commences Prearranged Reorganization Under Chapter 11 NEFF CORP: Receives Approval of First Day Motions NV ENERGY: Fitch Raises IDR & Sr. Unsecured Debt Rating to BB OPUS EAST: Trustee Seeks Approval of APG Settlements OPUS EAST: Wants Lease Decision Period Extension Until Aug. 25 OPUS EAST: Trustee to Assume Albrittain Contracts OPUS WEST: Gets Nod of RGH Geotechnical Settlement PACIFIC ETHANOL: Posts $10.9 Million Net Loss in Q1 2010 PCAA PARENT: Has Approved Sale and Confirmed Plan PCAA PARENT: Aurora Capital Agrees to Buy Firm's Assets PHILADELPHIA NEWSPAPERS: Inks $139MM Ch. 11 Deal with Lenders PILGRIM'S PRIDE: Prisoner Tries to Intervene in Case PROJECT ORANGE: Asks for Court Okay to Obtain DIP Financing PROJECT ORANGE: Gets Interim Okay to Use Cash Collateral RAHAXI INC: Killian McGrath Resigns From Board of Directors RASER TECHNOLOGIES: Incurs $7.6 Million Net Loss in Q1 2010 REFCO INC: Investors Settle with Underwriters & THL Entities REFCO INC: Mayer Brown Not Liable for Mess, 2nd Cir. Affirms REFCO INC: Ex-Directors Forfeit $39MM to Settle Fraud Claims REUNION INDUSTRIES: Steel Partners Ceases to Own Common Shares RQB RESORT: Wants Access to Cash Collateral Extended SAINT VINCENTS: Individuals Can't Exercise State's Powers SAPPHIRE NATIONAL: Court Dismisses Reorganization Case SENSUS USA: S&P Revises Outlook to Stable & Affirms B+ Rating SPECIALTY TRUST: Gets Interim Access to Cash Collateral SPECIALTY TRUST: Taps Pachulski Stang as Gen. Bankruptcy Counsel SPECIALTY TRUST: Wants Schedules Filing Extended Until May 24 STERLING FINANCIAL: Taps Les Biller as Chairman of the Board TAGISH LAKE: Extends CCAA Stay Protection Until July 7 TAYLOR-WHARTON: Selling Cylinders Business in June TEXAS COMMERCIAL: Prepetition Claims Become 'New' Debt Under Plan TP INC: Bankruptcy Administrator Unable to Form Creditors Panel TRIBUNE CO: Lenders Object to Exclusivity Period Extension TROPICANA ENT: LandCo Submits 1st Quarter Post-Confirmation Report TROPICANA ENT: OpCo Wants to Reject IP Agreements TROPICANA ENT: W. Yung, et al., Want Lightsway Suit Dropped TRUMP ENTERTAINMENT: Posts $32 Million Net Loss in Q1 2010 UNI-PIXEL INC: Incurs $2.1 Million Net Loss in Q1 2010 UNION FOR TRADITIONAL JUDAISM: Files for Ch. 11 in White Plains VERENIUM CORP: Posts $12 Million Net Loss for First Quarter VYTERIS INC: Reports $3.2 Million Net Loss for March 31 Quarter VYTERIS INC: Closes Sale of $725,000 Promissory Notes Due 2013 WASHINGTON MUTUAL: FDIC & PBGC Object to Plan Outline WASHINGTON MUTUAL: Files Amended Plan of Reorganization WAVE SYSTEMS: Acquires 2 Storage Security Patents for $1.1MM WAVE SYSTEMS: Posts $764,175 Net Loss for March 31 Quarter WAVE SYSTEMS: 2010 Annual Stockholders' Meeting Set for June 21 WHITE BIRCH: S&P Sees Poor Recovery on CCAA & Ch. 11 Proceedings XERIUM TECHNOLOGIES: Court Enters Order Confirming Prepack Plan XERIUM TECHNOLOGIES: Rule 2015.3 Reports Due June 30 XERIUM TECHNOLOGIES: Schedules Deadline Extended Until June 30 * Fitch Affirms Individual Ratings of 8 Major Credit Unions at E * Poll Shows US City, Not Sovereign, More Likely to Default * Pachulski Stang Bankruptcy Lawyer Joins Venable LLP * Large Companies With Insolvent Balance Sheets ********* 2151 HOTEL: Request to Use Cash Collateral Denied ------------------------------------------------- The Hon. Louise DeCarl Adler of the U.S. Bankruptcy Court for the Southern District of California denied 2151 Hotel Circle South, LLC's request to use cash collateral securing its obligations to prepetition lenders. Stuart J. Wald, Esq., at the Law Offices of Stuart J. Wald, the attorney for the Debtor, explained to the Court that the Debtor needs the money to fund its Chapter 11 case, pay suppliers and other parties. A copy of the budget for the use of cash collateral is available for free at: http://bankrupt.com/misc/2151_HOTEL_cashcollmotionbudget.pdf Ramada Plaza Hotel, the Debtor's primary asset, is encumbered by a deed of trust and assignment of rents in favor of G5 Global Partners IX, LLC, as assignee of Wells Fargo Bank, N.A., as trustee for the Registered Holders of Morgan Stanley Capital I Inc., Commercial Mortgage Pass-Through Certificates, Series 1999- FNV1, which secure a debt of $30,000 in cash. The Debtor has filed a motion for the approval of the sale of the Hotel for $14,000,000, and will ask the Court, after the close of escrow, to dismiss the Debtor's bankruptcy case by no later than June 30, 2010, upon the payment of non-insider creditors in full. The Hotel is being run by a receiver. The Debtor asserted that the Lender is fully protected by and for such use, as the pending offer to purchase the Hotel for $14 million establishes a strong equity cushion in excess of the Lender's $11 million claim. The use will be until the sale can close, which will happen no later than June 14, 2010. Based on the data collected by the Debtor to project its income and expenses for the month of May 2010, the Debtor will need to spend $267,586 to operate its business, including monthly set-asides for real property taxes and insurance. Against these expenses, the Debtor expects to generate revenues of $295,635, providing further adequate protection through profitable operations, which preserve value until the sale can be consummated. The Debtor estimates that June expenses will be roughly similar for the full month, but the sale will close before the month will be half-over. G5 Global, however, objected to the Debtor's request to use cash collateral. In April 2010, two weeks after the Court dismissed the Debtor's second bankruptcy case, and despite a court order prohibiting the re-filing of the case, the Debtor re-filed the case in the U.S. Bankruptcy Court for the Southern District of California. G5 Global said that since the first bankruptcy, the Debtor has used G5 Global or its predecessor in interest's cash collateral without the secured lender's consent or court authority. Months after the unlawful use, the Debtor finally and untimely requested $200,000 a month in cash collateral usage, which was denied by the Court. It can be estimated from that motion that the Debtor, as of April 30, 2010, has already used more than $800,000 of cash collateral, up until its third filing, without consent. G5 also claimed that the Debtor failed to provide adequate protection in return for using cash collateral. Woodland Hills, California-based 2151 Hotel Circle South LLC filed for Chapter 11 bankruptcy protection on April 30, 2010 (Bankr. S.D. Calif. Case No. 10-07330). Stuart J. Wald, Esq., at the Law Offices of Stuart J. Wald, assists the Company in its restructuring effort. The Company estimated its assets and debts at $10,000,001 to $50,000,000. 2151 HOTEL: Proposes to Sell Assets to Macino for $14 Million ------------------------------------------------------------- 2151 Hotel Circle South, LLC, has asked the U.S. Bankruptcy Court for the Southern District of California for permission to sell its assets to Macino Entertainment Hollywood Corporation for $14 million. The Debtor says that the sale price will be more than sufficient to pay all of the Debtor's non-insider creditors in full. The Macino offer requires the Debtor to provide two standard third-party reports, on natural hazard zones and a phase one environmental survey report. Escrow has been opened with a $140,000 deposit and is due to close no later than June 14, 2010, although it may be ready to close earlier than that date. The Debtor, post-closing, will be able to pay off all of its non- insider creditors in full, have its Chapter 11 case dismissed, and proceed to self-liquidated outside of bankruptcy. Woodland Hills, California-based 2151 Hotel Circle South LLC filed for Chapter 11 bankruptcy protection on April 30, 2010 (Bankr. S.D. Calif. Case No. 10-07330). Stuart J. Wald, Esq., at the Law Offices of Stuart J. Wald, assists the Company in its restructuring effort. The Company estimated its assets and debts at $10,000,001 to $50,000,000. ACCEPTANCE INSURANCE: Petition for Writ of Certiorari Denied ------------------------------------------------------------ On December 9, 2003, Acceptance Insurance Companies Inc. filed a complaint against the United States of America in the U.S. Court of Federal Claims. The Company alleged that by not approving the proposed sale of certain insurance assets of its unit American Growers Insurance Company to Rain and Hail L.L.C. the Risk Management Agency rendered valueless the insurance business of American Growers. The Company also alleged that in rejecting the proposed transaction, the RMA effected a taking of the Company's property (i.e., the American Growers insurance assets) for public use without just compensation in violation of the Fifth Amendment to the United States Constitution. The Risk Management Agency of the U.S. Department of Agriculture operates and manages the Federal Crop Insurance Corporation, a wholly-owned Government corporation. FCIC manages the Federal crop insurance program. On September 25, 2008, the U.S. Court of Federal Claims granted the motion of the United States to dismiss, with prejudice, the Company's complaint for failure to state a claim upon which relief may be granted. The Company appealed this dismissal. On October 1, 2009, the U.S. Court of Appeals for the Federal Circuit affirmed the dismissal of the Company's claim. On December 29, 2009, the Company filed a Petition for Writ of Certiorari with the Supreme Court of the United States requesting the Supreme Court to review on appeal the judgment of the Court of Appeals for the Federal Circuit affirming the dismissal of the claim. In a regulatory filing Wednesday, the Company disclosed that the U.S. Supreme Court denied on May 3, 2010, its Petition for Writ of Certiorari. About Acceptance Insurance Headquartered in Council Bluffs, Iowa, Acceptance Insurance Companies, Inc. -- http://www.aicins.com/-- owns, either directly or indirectly, several companies, one of which is an insurance company that accounts for substantially all of the business operations and assets of the corporate groups. The Company filed for Chapter 11 protection on Jan. 7, 2005 (Bankr. D. Nebr. Case No. 05-80059). The Debtor's affiliates -- Acceptance Insurance Services, Inc., and American Agrisurance, Inc. -- each filed Chapter 7 petitions (Bankr. D. Nebr. Case Nos. 05-80056 and 05-80058) on January 7, 2005. John J. Jolley, Esq., at Kutak Rock LLP, represents the Debtor in its restructuring efforts. Lawyers at McGrath North Mullin & Kratz PC, LLO, represent the Official Committee of Unsecured Creditors in Acceptance Insurance's case. ACCREDITED HOME: Opposes Creditors' Bid to Probe Claims ------------------------------------------------------- Bankruptcy Law360 reports that Accredited Home Lenders Holding Co. is fighting a motion from its official committee of unsecured creditors seeking to assume authority to investigate and prosecute claims on its behalf, arguing that it should be allowed to complete its "active pursuit" of a settlement for the claims. AHLH lodged an objection Thursday in the U.S. Bankruptcy Court for the District of Delaware, alongside a similar objection from a separate group of creditors, according to Law360. Accredited Home Lenders Holding Co. -- http://www.accredhome.com/ -- is a mortgage banker servicing U.S. markets for conforming and non-prime residential mortgage loans operating throughout the U.S. and in Canada. Founded in 1990, the company is headquartered in San Diego. The Company was acquired by Lone Star Funds for $300 million in October 2007. Lone Star also owns Bruno's Supermarkets LLC and Bi-Lo LLC, two grocery retailers in Chapter 11. Accredited Home and its affiliates filed for Chapter 11 on May 1, 2009 (Bankr. D. Del. Lead Case No. 09-11516). Gregory G. Hesse, Esq., Lynnette R. Warman, Esq., and Jesse T. Moore, Esq., at Hunton & William LLP, represent the Debtors as counsel. Laura Davis Jones, Esq., James E. O'Neill, Esq., and Timothy P. Cairns, Esq., at Pachulski Stang Ziehl & Jones LLP, serve as Delaware counsel. Kurtzman Carson Consultants is the Debtors' claims agent. Andrew I Silfen, Esq., Schuyler G. Carroll, Esq., Robert M. Hirsch, Esq., at Arent Fox LLP in New York, and Jeffrey N. Rothleder, Esq., at Arent Fox LLP in Washington, DC, represent the official committee of unsecured creditors as co-counsel. Neil R. Lapinski, Esq., and Shelley A. Kinsella, Esq., at Elliott Greenleaf, represent the Committee as Delaware and conflicts counsel. According to its bankruptcy petition, Accredited Home's assets range from $10 million to $50 million and its debts from $100 million to $500 million. ACUMENT GLOBAL: S&P Upgrades Credit Rating to B- From CCC+ ---------------------------------------------------------- Standard & Poor's Ratings Services raised its ratings, including the corporate credit rating to 'B-' from 'CCC+', on Troy, Mich.- based Acument Global Technologies Inc. "At the same time, we placed the ratings on CreditWatch with positive implications, indicating the possibility that we may raise the ratings again in the future." "The upgrade on Acument reflects the company's improved liquidity and operating results," said Standard & Poor's credit analyst Sarah Wyeth. "The CreditWatch listing reflects the company's announcement that they have signed a definitive agreement to sell the Avdel and Global Electronics and Commercial (GEC) business units and will use the proceeds to pay down debt," she continued. "A further upgrade is subject to the timeliness and final terms of the transaction, and our review of the company's subsequent financial and strategic policies." "The CreditWatch positive placement reflects our view that the contemplated sale of Avdel and GEC, if completed according to the terms that we expect, would result in meaningful debt and financial leverage reduction. Subject to our review of financial and strategic policies, we could raise the corporate credit rating on Acument by one notch. We expect to resolve the CreditWatch placement on completion of the transaction and debt repayment. We would also review the ratings and CreditWatch placement if the proposed transaction is delayed, cancelled, or completed on materially different terms than we currently expect." ALERIS INTERNATIONAL: Court Enters Written Order Confirming Plan ---------------------------------------------------------------- Judge Brendan L. Shannon of the U.S. Bankruptcy Court for the District of Delaware confirmed Aleris International, Inc. and its debtor affiliates' First Amended Plan of Reorganization on May 13, 2010. Judge Shannon held that the Debtors have satisfied their burden of proof of producing evidence that the Plan complies with Sections 1129)(a), 1129(b), and 1129(d) of the Bankruptcy Code. Specifically, Judge Shannon ruled that: (1) The Plan complied with all the applicable provisions of Section 1129(a)(1) of the Bankruptcy Code. * All Claims and Equity Interest within each class are substantially similar to the other Claims and Equity Interests within that class. Also, the Plan does not propose a classification scheme to create an impaired consenting class or to manipulate class voting. Thus, the Plan satisfies Section 1122(a) of the Bankruptcy Code. * In accordance with Section 1122(b), the designation of a class of Convenience Claims in Section 3.2.4 of the Plan is reasonable and necessary for administrative convenience. Accordingly, the classification of Convenience Claims in U.S. Debtors Class 4 satisfies Section 1122(b). * The Plan properly and adequately classify all Claims and Equity Interests required to be so classified, and, accordingly, the Plan satisfies Section 1123(a)(1). * Because the Plan identifies the Unimpaired Classes, the Plan satisfies Section 1123(a)(2). * Because the Plan specifies the treatment of each Impaired Class, the Plan satisfies Section 1123(a)(3). * Each member of each Class receives the same treatment as any other member within the same Class. To the extent a Backstop Party receives additional or different consideration under the Plan, the Backstop Party receives that consideration in exchange for the commitments of the Backstop Party under the Equity Commitment Agreement or as part of the 9019 Settlement. Because the Plan provides the same treatment for each Claim or Equity Interest in each class, the Plan satisfies Section 1123(a)(4). * Various provisions of the Plan provide adequate means for implementation of the Plan. The Plan provides, among other things, the: -- offering of Subscription Rights through the Rights Offering; -- issuance and sale of the IntermediateCo Preferred Stock; -- settlement of certain disputes through the 9019 Settlement; and -- issuance of New Common Stock and the IntermediateCo Notes. The Plan contains the provisions governing distribution of property of the Debtors' estates to creditors entitled to receive Distributions under the Plan. The Plan also provides for the assumption and rejection of various executory contracts and unexpired leases. Thus, the Plan satisfies Section 1123(a)(5). * In accordance with the Plan, each Debtor as of the Effective Date will amend or amend and restate its organization documents, which, as amended or amended and restated, will contain a provision prohibiting the issuance of non-voting equity securities. In addition, each of the OpCos (to which the assets of Aleris and certain other Debtors are being transferred pursuant to the Acquisition Agreement) also has in its charter a provision prohibiting the issuance of non-voting equity securities. Accordingly, the Plan satisfies Section 1123(a)(6). * The Debtors identified the initial board of directors for HoldCo and the relevant qualifications of each director. The Plan provides that the current officers of Aleris will, on the Effective Date, become the officers of Holdco with comparable titles and responsibilities, and those officers will serve in accordance with applicable non-bankruptcy law, any employment agreements with Holdco, IntermediateCo, or the Reorganized Debtors, and any Amended and Restated Organizational Documents. Because the appointment of the initial board of directors of Holdco and the continuation in office of the current officers of Aleris are consistent with the interest of creditors and with public policy, the Plan satisfies Section 1123(a)(7). * The Plan provides for the assumption or assumption and assignment of executory contracts and unexpired leases. The Plan also provides for the rejection of executory contracts and unexpired leases. Thus, the Plan complies with Section 1123(b)(2). * The Plan includes a 9019 Settlement which is fair, reasonable, in the best interest of the creditors, and well within the range of reasonableness. Accordingly, the 9019 Settlement is consistent with Section 1123(b)(3)(A). The Plan provides for the retention by the Reorganized Debtors of the right to pursue rights, claims, and causes of action accruing to the Debtors, without limitation, avoidance actions under Chapter 5 of the Bankruptcy Code. Accordingly, the retention of rights is consistent with Section 1123(b)(3)(B). (2) Because the Debtors have complied with Sections 1125 and 1126 of the Bankruptcy Code and all other provisions, the Debtors satisfy Section 1129(a)(2) of the Bankruptcy Code. Prior to entry of the Initial Disclosure Statement Order, the Debtors did not solicit acceptances of the Plan. The Plan provides that holders of Equity Interests in the Impaired Non-Voting Classes will not receive or retain any property under the Plan on account of those Equity Interests. (3) Because the Plan has been proposed with the legitimate and honest purpose of reorganizing the Debtors' business and affairs and maximizing the value available for distribution to creditors, the Debtors have proposed the Plan in "good faith and not by any means forbidden by law" and, in turn, the Plan satisfies Section 1129(a)(3). (4) The Bankruptcy Court has approved all payments made by the Debtors out of the ordinary course of business, and the Plan provides that all payments made or to be made to any professional retained by an order of the Bankruptcy Court will be subject to the Bankruptcy Court's review and approval upon final application of the applicable professional, thus the Plan satisfies Section 1129(a)(4). (5) The Debtors have disclosed in the Disclosure Statement, the Plan, and Exhibits of the Plan the identities and nature of compensation of those persons who will serve, on the Effective Date, as directors and officers of Holdco. Based on, among other things, the experience, education, or particular skills of each individual and the manner of selection of each individual and any successor, the appointment or continuation in office of those individuals is consistent with the interests of creditors and with public policy. Thus, the Plan satisfies Section 1129(a)(5) of the Bankruptcy Code. (6) Because the Plan does not provide for any changes in the rates that require regulatory approval of any governmental agency, Section 1129(a)(6) is not applicable. (7) Each Creditor or holder of any Equity Interests in an Impaired Class (a) will receive a distribution or retain property under the Plan of a value not less than that which that creditor or equity interest holder would receive or retain under chapter 7 liquidation or (b) voted to accept the Plan. Accordingly, the Plan satisfies the "best interest" test under Section 1129(a)(7). (8) Each Voting Impaired Class has accepted the Plan by at least two-thirds in amount and a majority in number of the Claims in each Class actually voting, and all impaired classes of Claims have accepted the Plan. Because holders of Equity Interests in the Non-Voting Impaired Classes will not retain any property on account of their interests, those holders and, in turn, their classes, are impaired and deemed not to have accepted the Plan pursuant to Section 1126(g) of the Bankruptcy Code, and the Plan does not satisfy Section 1129(a)(8). Although the Plan does not satisfy Section 1129(a)(8), the Plan may be confirmed pursuant to Section 1129(b). (9) Section 1129(a)(9) provides for the mandatory treatment of certain claims entitled to priority under the Bankruptcy Code. Thus, the Plan satisfies Section 1129(a)(9). (10) Because each of the Impaired Voting Classes accepted the Plan without including any acceptances by insiders, the Plan satisfies the requirements of Section 1129(a)(10). (11) The feasibility test set forth in Section 1129(a)(11) requires the Bankruptcy Court to determine whether the reorganized debtor has a reasonable assurance of commercial viability. Based on projections, the Debtors and Reorganized Debtors will likely be able to satisfy all their obligations under the Plan after confirmation and will not require liquidation or further financial reorganization after confirmation except as provided under the Plan. (12) The Plan provides that all fees payable pursuant to Section 1930 of title 28 of the United States Code will be paid by the Debtors on or before the Effective Date. Accordingly, the Plan satisfies Section 1129(a)(12). (13) The Debtors are not seeking to modify any retiree benefits protected by Section 1114 of the Bankruptcy Code. The Plan provides that any benefit plans, policies, or programs that the Debtors are required to continue will be deemed to be, and will be treated as though they are, executory contracts that are deemed assumed under the Plan, and the Debtors' obligations under those plans, policies, and programs will be deemed assumed pursuant to Section 365, survive confirmation of the Plan, remain unaffected, and not be discharged. Accordingly, the Plan satisfies Section 1129(a) (13). (14) Sections 1129(a)(14), 1129(a)15), and 1129(a)(16) are not Applicable because the Debtors do not owe any domestic support obligations, are not individuals, and are not non- profit corporations. The Plan received substantial support from key U.S. and European secured creditors as well as unsecured creditors. With this action, Aleris expects the Plan to become effective and the Company and its wholly owned co-debtors to emerge from Chapter 11 as a private Company on or around June 1. Steven J. Demetriou, Aleris Chairman and CEO, said, "We are extremely pleased to receive court approval of our Plan of Reorganization and look forward to exiting Chapter 11 in just a matter of weeks. We have used the past 15 months and this process to substantially reduce our debt, strengthen our balance sheet, and significantly enhance our competitive profile with new financial flexibility and a streamlined operating structure that preserves all of our businesses while reducing costs. "We expect to emerge as a well capitalized downstream aluminum company with excellent liquidity, a committed ownership group, and a robust production platform designed to capitalize on the industrial economic recovery," Mr. Demetriou continued. "We are driving the Aleris Operating System (AOS) initiative which uses Lean Sigma tools to develop standardized global processes throughout the organization in order to drive quality and value for customers in the markets we serve. In doing so we will be even better able to satisfy the needs of our customers and to continue building Aleris into a global aluminum Company that will benefit our business partners and employees for years to come. "I am especially appreciative for all of our hard-working employees around the world who have helped make our restructuring a success and who will be an important part of our future. I also want to thank the Aleris Board of Directors for their support and counsel during this process. Finally, I am also grateful for the support and confidence that our creditors demonstrated by voting overwhelmingly in favor of the plan and participation in the rights offering and exit financing," Mr. Demetriou added. As previously reported, upon the effective date of the Plan, Aleris will be a privately held company that will be majority owned by its existing secured creditors led by certain investment funds managed by Oaktree Capital Management, L.P., affiliates of Apollo Management, L.P., and Sankaty Advisors, LLC. These entities have committed to invest up to $690 million in the reorganized company in a rights offering comprised of $45 million in 10 year unsecured Notes and up to $645 million in new equity. Proceeds from the rights offering will be used to repay outstanding DIP loans and pay fee expenses associated with emergence. Additionally, the Company received court approval to enter into a new fully committed $500 million asset based revolving credit facility upon emergence. Aleris Deutschland Holding GmbH, a non-operating holding company with no employees or operating assets and that conducts no commercial business, was included as part of the overall Aleris Plan of Reorganization and is also expected to emerge from Chapter 11 on or about June 1. Objections Resolved The objections to Plan confirmation filed by these parties have been either withdrawn or resolved: * Pension Benefit Guaranty Corporation * United States on behalf of its Department of Agriculture * Delta Dental Plan of Ohio, Inc. * United States on behalf of its Department of Health and Human Services * Holt Equipment Company, LLC * Dantherm Filtration, Inc. * Sentry Insurance, a Mutual Company * Central States, Southeast and Southwest Areas Pension Fund * Trevor Hayes and Eric Reynolds * Internal Revenue Service The objections of these parties have been overruled: * Lon Burkdoll * Ronald Johnson, Bernard Desberg, and Jerry Abrams and their spouses and dependents A full-text copy of the Confirmation Order is available for free at http://bankrupt.com/misc/Aleris_ConfirmOrd.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) ALL AMERICAN: Samsung Appeals Ruling on Antitrust Arbitration ------------------------------------------------------------- Samsung Electronics Co. Ltd. is challenging a district court's decision that upheld the dismissal of its attempt to block arbitration with All American Semiconductor Inc. over a previous settlement related to dynamic random access memory chips, the overturning of which could put Samsung back on the hook for antitrust claims, according to Bankruptcy Law360. Law360 says Samsung put the U.S. District Court for the Southern District of Florida on notice Thursday that it is appealing its April 15 ruling. About All American Semiconductor Based in Miami, Florida, All American Semiconductor Inc. (Pink Sheets: SEMI.PK) -- http://www.allamerican.com/-- distributed electronic components manufactured by other firms. In total, the company offered approximately 40,000 products produced by approximately 60 manufacturers. The company had 36 strategic locations throughout North America and Mexico, as well as operations in China and Western Europe. The Company and its debtor-affiliates filed for Chapter 11 protection on April 25, 2007 (Bankr. S.D. Fla. Lead Case No. 07-12963). Jason Z. Jones, Esq., Mindy A. Mora, Esq., at Bilzin Sumberg; and Tina M. Talarchyk, Esq., at Squire Sanders, represented the Debtors as counsel. Adrian C. Delancy, Esq., Jerry M. Markowitz, Esq., Rachel Lopate Rubio, Esq., Rilyn A. Carnahan, Esq., Ross R. Hartog, Esq., at Markowitz, Davis, Ringel & Trusty; and Stanley F. Orszula, Esq., at Loeb & Loeb, represented the Official Committee of Unsecured Creditors as counsel. As of June 30, 2007, the company posted total assets of $4,071,000, consisting solely of cash; total liabilities of $18,348,000; and total stockholders' deficit of $14,277,000. The Bankruptcy Court confirmed on April 8, 2009, the Third Amended Plan of Liquidation proposed by the official committee of unsecured creditors appointed in the bankruptcy cases of All American Semiconductor. The Plan contemplated the liquidation of all assets of the consolidated estate for the benefit of the holders of allowed claims and allowed interests. ALMATIS BV: Has Injunction Against Utility Companies ---------------------------------------------------- Almatis B.V. and its affiliated debtors sought and obtained an order from the U.S. Bankruptcy Court for the Southern District of New York, prohibiting 16 U.S.-based utility companies from discontinuing the provision of utility services to the Debtors. The Debtors made the move out of concern that the Utility Companies would terminate their services in light of the Debtors' bankruptcy filing. A list of Almatis' Utility Companies is available for free at: http://bankrupt.com/misc/Almatis_UtilityCompanies.pdf As assurance that each of the Utility Companies will get paid for its future services, the Debtors have proposed to deposit in a segregated bank account a sum of $437,500, which is 50% of their average monthly cost for utility services. The Debtors intend to deposit the cash no later than May 20, 2010. The cash deposit as well as the Debtors' ability to pay for future utility services in the ordinary course of business already constitutes sufficient adequate assurance of future payment to the Utility Companies, Michael Rosenthal, Esq., at Gibson Dunn & Crutcher LLP, in New York, asserts. Any utility company that believes otherwise can request for additional assurance. Any utility company seeking additional assurance of future payment is required to serve a request, which should be received by the Debtors no later than May 20, 2010. The Debtors have more until June 9, 2010, to negotiate with the utility company to resolve its request. The Debtors and the utility company can extend the time for the negotiation upon mutual agreement without application to or approval of the Court. The Debtors may provide the requesting utility company with additional assurance of future payment, including prepayments and other forms of security. If the Debtors are able to reach a resolution with the utility company, they can reduce the deposit by an amount not exceeding the utility company's estimated two- week utility expense. If the Debtors determine that the request is not reasonable and they fail to reach a resolution with the utility company, they can ask the Court to hold a hearing to determine the adequacy of assurances of payment made to the utility company. Until the resolution of the request at the hearing, the utility company cannot discontinue its services to the Debtors. Entergy Objects Prior to the entry of the Court's ruling, Entergy Arkansas Inc. filed an objection, asking the Court to either direct the Debtors to provide it with a $708,000 cash deposit or allow it to terminate its services at the end of the month if no deposit is received. Entergy Arkansas complained that the Debtors' proposed deposit of $437,500 is inadequate and would barely cover half of the utility company's exposure alone. Entergy said the $708,000 cash deposit is equal to the amount that it would be entitled to receive pursuant to state regulations. The Court has urged the Debtors and Entergy Arkansas to reach a resolution by May 25, 2010. The Court will consider Entergy Arkansas' request at the May 26, 2010 evidentiary hearing if no resolution is reached among the parties. About Almatis Group Alamtis B.V., and its affiliates filed for Chapter 11 on April 30, 2010 (Bankr. S.D.N.Y. Lead Case No. 10-12308). Almatis B.V. estimated assets of US$500 million to US$1 billion and debts of more than US$1 billion as of the bankruptcy filing. Almatis, operationally headquartered in Frankfurt, Germany, is a global leader in the development, manufacture and supply of premium specialty alumina products. With nearly 900 employees worldwide, the company's products are used in a wide variety of industries, including steel production, cement production, non- ferrous metal production, plastics, paper, ceramics, carpet manufacturing and electronic industries. Almatis operates nine production facilities worldwide and serves customers around the world. Until 2004, the business was known as the chemical business of Alcoa. Almatis is now owned by Dubai International Capital LLC, the international investment arm of Dubai Holding. Michael A. Rosenthal, Esq., at Gibson, Dunn & Crutcher LLP, serves as counsel to the Debtors in the Chapter 11 cases. & German Counsel: Linklaters LLP is the special English and German counsel and De Brauw Blackstone Westbroek N.V. is Dutch counsel. Epiq Bankruptcy Solutions, LLC, serves as claims and notice agent. ALMATIS BV: Proposes to Pay Claims of Critical Vendors ------------------------------------------------------ Almatis B.V. and its units relate that the successful operation of their businesses requires them to purchase goods and services from select third party vendors and independent contractors in the United States, without which they could not continue to operate their businesses. These Critical Vendors fall into two general categories: 1. Vendors that provide unique or specifically engineered goods or services that are crucial to the continued operation of the Debtors' business, and for which no ready alternative vendors can be found with reasonable diligence; and 2. Vendors that supply essential goods and services, for which replacement with alternative vendors would be prohibitively expensive, due to the lead time required by the alternative vendors, or the alternative vendors' geographical remoteness from the Debtors' operations. Accordingly, the Debtors sought and obtained an interim order from the Bankruptcy Court authorizing them to pay all or a portion of their prepetition obligations to certain Critical Vendors in an aggregate amount not to exceed $400,000. The payment of the Critical Vendors, which, among other things, is conditional on the continued extension of "Customary Trade Terms," the execution of a Critical Vendor Letter Agreement by the Critical Vendor receiving payments, and the release of any and all liens, is necessary to preserve operations and successfully reorganize, the Debtors assert. The Critical Vendors may refuse to deliver goods or refuse to supply services necessary to continue postpetition operations if their claims are not satisfied. The Debtors will determine, in the ordinary course of business, who is a Critical Vendor by considering, among other things: (a) which vendors/service providers the Debtors absolutely needed to continue to operate without disruption; (b) which vendors/service providers would be prohibitively expensive to replace; and (c) which vendors/service providers present an unacceptable risk should they threaten to not provide services or supplies postpetition. The Debtors will also undertake all appropriate efforts to cause Critical Vendors to enter into a Critical Vendor Letter Agreement. The Debtors also sought and obtained an interim order authorizing them to pay claims which are due and owing to any creditor or claimant entitled to administrative priority pursuant to Section 503(b)(9) of the Bankruptcy Code in the ordinary course of business. These claims are on goods delivered by vendors to the Debtors during the 20-day period prior to the Petition Date. Payments of 503(b)(9) Claims, whether made to Critical Vendors or other 503(b)(9) claimants in the United States, could total $1,200,000, the Debtors disclose. Payment on account of any 503(b)(9) Claims will not count against the Critical Vendor Claims Cap, Judge Glenn ruled. All applicable banks and other financial institutions are also authorized to receive, process, honor and pay any and all checks and transfers regarding amounts authorized to be paid under the Critical Vendor Claims Order. About Almatis Group Alamtis B.V., and its affiliates filed for Chapter 11 on April 30, 2010 (Bankr. S.D.N.Y. Lead Case No. 10-12308). Almatis B.V. estimated assets of US$500 million to US$1 billion and debts of more than US$1 billion as of the bankruptcy filing. Almatis, operationally headquartered in Frankfurt, Germany, is a global leader in the development, manufacture and supply of premium specialty alumina products. With nearly 900 employees worldwide, the company's products are used in a wide variety of industries, including steel production, cement production, non- ferrous metal production, plastics, paper, ceramics, carpet manufacturing and electronic industries. Almatis operates nine production facilities worldwide and serves customers around the world. Until 2004, the business was known as the chemical business of Alcoa. Almatis is now owned by Dubai International Capital LLC, the international investment arm of Dubai Holding. Michael A. Rosenthal, Esq., at Gibson, Dunn & Crutcher LLP, serves as counsel to the Debtors in the Chapter 11 cases. & German Counsel: Linklaters LLP is the special English and German counsel and De Brauw Blackstone Westbroek N.V. is Dutch counsel. Epiq Bankruptcy Solutions, LLC, serves as claims and notice agent. ALMATIS BV: Proposes to Pay Prepetition Sales & Use Taxes --------------------------------------------------------- In the ordinary course of their businesses, Almatis B.V. and its units incur, collect, and remit a variety of taxes, fees, and other charges relating to their business operations in the United States. The Taxes and Fees include various trust fund taxes, taxes that may give rise to personal liability for officers and directors, state franchise taxes and other fees, business license fees, regulatory fees, use taxes, certain property taxes, and other similar taxes and fees. The Debtors remit the Taxes and Fees to various federal, state, and local governments and agencies within the United States. Any dispute regarding the payment of Taxes and Fees due in such jurisdictions could results in audits. By this motion, the Debtors ask Judge Glenn to authorize them to pay the Prepetition Taxes and Fees. The Debtors summarize the Taxes and Fees they owe: State Franchise Taxes $30,000 for 2009 Fees Related to Franchise Taxes $8,000 on a quarterly basis Regulatory Fees $80,000 annually Use Taxes $75,000 monthly Property Taxes $937,148 due for Oct. 2010 $157,190 for the postpetition Period The Debtors assert that they must continue to pay the Taxes and Fees to continue operating in certain jurisdictions and to avoid costly distractions during the Chapter 11 Cases. The Debtors contend that failure to pay the Taxes and Fees could adversely affect their business operations because the Governmental Authorities could suspend their operations, file liens, or seek to lift the automatic stay. In addition, certain Governmental Authorities may take precipitous action against the Debtors' directors and officers for unpaid Taxes, which undoubtedly would distract those key employees from their duties related to the Debtors' restructuring. About Almatis Group Alamtis B.V., and its affiliates filed for Chapter 11 on April 30, 2010 (Bankr. S.D.N.Y. Lead Case No. 10-12308). Almatis B.V. estimated assets of US$500 million to US$1 billion and debts of more than US$1 billion as of the bankruptcy filing. Almatis, operationally headquartered in Frankfurt, Germany, is a global leader in the development, manufacture and supply of premium specialty alumina products. With nearly 900 employees worldwide, the company's products are used in a wide variety of industries, including steel production, cement production, non- ferrous metal production, plastics, paper, ceramics, carpet manufacturing and electronic industries. Almatis operates nine production facilities worldwide and serves customers around the world. Until 2004, the business was known as the chemical business of Alcoa. Almatis is now owned by Dubai International Capital LLC, the international investment arm of Dubai Holding. Michael A. Rosenthal, Esq., at Gibson, Dunn & Crutcher LLP, serves as counsel to the Debtors in the Chapter 11 cases. & German Counsel: Linklaters LLP is the special English and German counsel and De Brauw Blackstone Westbroek N.V. is Dutch counsel. Epiq Bankruptcy Solutions, LLC, serves as claims and notice agent. ALMATIS BV: To Maintain Prepetition Insurance Policies ------------------------------------------------------ Almatis B.V. and its debtor affiliates sought and obtained interim Court authority to continue their insurance policies and honor their obligations under those policies. The Debtors maintain insurance policies providing coverage for employment practices liability, workers' compensation, casualty loss, among other things. A schedule of Almatis' Insurance Policies is available for free at http://bankrupt.com/misc/Almatis_InsurancePolicies.pdf The Debtors are required to pay premiums under the Policies based on a fixed rate established and billed by each insurer and are required to pay deductibles based on the terms of a policy. The aggregate premiums for the Policies are about $3.35 million, which are determined and paid annually directly to the insurers. To assist them in the procurement and negotiation of the Policies, the Debtors employ and pay annual fees to their insurance brokers, Aon Inc. and its affiliates. For the current policy year cycle, the Debtors incurred about $359,000 in brokers' fees. As of April 30, 2010, no outstanding amounts are owed to the Debtors' brokers for their pre-bankruptcy services. The Debtors also do not have any premium payments outstanding as of their bankruptcy filing, according to the Debtors' attorney, Michael Rosenthal, Esq., at Gibson Dunn & Crutcher LLP, in New York. In connection with maintaining their Insurance Policies, the Debtors also obtained a Court ruling authorizing their banks and other financial institutions to honor checks and transfers issued or made related to the maintenance of the Insurance Policies. The Court will consider final approval of the Debtors' request at a May 17, 2010 hearing. About Almatis Group Alamtis B.V., and its affiliates filed for Chapter 11 on April 30, 2010 (Bankr. S.D.N.Y. Lead Case No. 10-12308). Almatis B.V. estimated assets of US$500 million to US$1 billion and debts of more than US$1 billion as of the bankruptcy filing. Almatis, operationally headquartered in Frankfurt, Germany, is a global leader in the development, manufacture and supply of premium specialty alumina products. With nearly 900 employees worldwide, the company's products are used in a wide variety of industries, including steel production, cement production, non- ferrous metal production, plastics, paper, ceramics, carpet manufacturing and electronic industries. Almatis operates nine production facilities worldwide and serves customers around the world. Until 2004, the business was known as the chemical business of Alcoa. Almatis is now owned by Dubai International Capital LLC, the international investment arm of Dubai Holding. Michael A. Rosenthal, Esq., at Gibson, Dunn & Crutcher LLP, serves as counsel to the Debtors in the Chapter 11 cases. & German Counsel: Linklaters LLP is the special English and German counsel and De Brauw Blackstone Westbroek N.V. is Dutch counsel. Epiq Bankruptcy Solutions, LLC, serves as claims and notice agent. ASARCO LLC: Asbestos Trust Submits 2009 Report ---------------------------------------------- Hon. Alfred M. Wolin, Ret. and David F. Levi delivered to the Bankruptcy Court an annual report of the ASARCO Asbestos Personal Injury Settlement Trust for the fiscal year ended December 31, 2009. Messrs. Wolin and Levi serve as trustees of the Asbestos PI Trust. The Annual Report includes financial statements and results of operations of the Asbestos Trust for the reporting period as well compensation of the Asbestos Trustees for the same reporting period. ASBESTOS TRUST FINANCIAL STATEMENTS ASARCO Asbestos Personal Injury Settlement Trust Special-Purpose Balance Sheet As of December 31, 2009 ASSETS ASSETS: Cash and cash equivalents $666,160,035 Note receivable 280,000,000 Other assets 206,908 ------------ TOTAL ASSETS $946,366,943 LIABILITIES AND TRUST EQUITY LIABILITIES: Accounts payable $122,500 Income tax payable 326,000 ------------ 448,500 TRUST EQUITY: Trust corpus 945,918,443 ------------ $946,366,943 ============ ASARCO Asbestos Personal Injury Settlement Trust Statement of Changes in Assets and Liabilities From December 9 to December 31, 2009 ADDITIONS: Contributions: Insurance and settlements $945,312,885 Investment income 1,109,796 ------------ 946,422,681 DEDUCTIONS: General and administrative: Legal fees - general 113,097 Trustee 48,133 Registered agent 7,500 Insurance 9,508 Federal income tax 326,000 ------------ 504,238 ------------ NET INCREASE IN TRUST CORPUS 945,918,443 ------------ TRUST CORPUS - beginning - ------------ TRUST CORPUS - ending $945,918,443 ============ ASARCO Asbestos Personal Injury Settlement Trust Special-Purpose Statement of Cash Flows From December 9 to December 31, 2009 CASH FLOWS FROM OPERATING ACTIVITIES: Net increase in trust equity $945,918,443 Adjustments to reconcile net increase to net trust equity from operating activities: Increase in: Note receivable (280,000,000) Other assets (206,908) Accounts payable 122,500 Federal income tax payable 326,000 ------------ 666,160,035 NET CASH PROVIDED BY OPERATING ACTIVITIES ------------ 666,160,035 ------------ CASH - beginning - ------------ CASH - ending $666,160,035 ============ ASBESTOS TRUSTEES COMPENSATION & EXPENSES For Fiscal Year Ending Dec. 31, 2009 Trustee Compensation, Expenses ------- ---------------------- Hon. Alfred M. Wolin, Ret. $18,300 David F. Levi $16,778 Ellen S. Pryor None Delaware Trustee None The Trustees certify that they have performed pursuant to and in compliance with the Confirmed ASARCO Chapter 11 Plan, the Confirmation Order, the Asbestos PI Trust Agreement, the Trust Distribution Procedures, other Plan Documents and Bankruptcy Court orders pertaining to the operation of the Asbestos Trust during the fiscal year ended December 2009. Messrs. Wolin and Levi thus ask the Court to approve the Annual Report, accept the certification of performance and compliance provided in the report, and discharge them from all liability as to any matter disclosed in the Annual Report. The ASARCO Asbestos Trust was established under the Plan in accordance with the Trust Agreement to address the substantial asbestos-related liabilities of ASARCO LLC and its debtor affiliates. The Asbestos Trust was created as of the December 9, 2009 Plan Effective Date. It was funded with over $900 million in assets, including more than $650 million in cash plus a $280 million secured note from Reorganized ASARCO LLC. In addition, the Asbestos Trust received $27.5 million to fund its operating expenses. The Confirmation Order appointed Messrs. Wolin and Levi and Ellen S. Pryor as trustees of the Asbestos Trust. Ms. Pryor resigned as of March 9, 2010, and therefore, does not join in the submission of the Annual Report. Charles A. Koppelman was appointed as successor Trustee. Under the Trust Agreement, a Trust Advisory Committee represents the holders of present Asbestos Personal Injury Claims and a Future Claims Representative represents the holders of future Asbestos Personal Injury Claims. Pursuant to the Confirmation Order, Steven Kazan, Steven T. Baron, Robert Phillips, Alan R. Brayton, and Bryan O. Blevins are members of the TAC. Robert C. Pate is the FCR. The Trust Agreement requires the Asbestos Trustees to meet with the TAC and FCR no less often than quarterly. As the Asbestos Trust was established on December 9, 2009, the Trust did not hold a regular meeting with the TAC and the FCR in 2009. With the consent of the TAC and the FCR, the Trust held its first regular meeting on March 10, 2010. A full-text copy of the Asbestos Trust 2009 Annual Report is available for free at: http://bankrupt.com/misc/ASARCO_AsbestosAnnualRep_Dec09.pdf About Asarco LLC Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. ASARCO LLC filed for Chapter 11 protection on August 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). Attorneys at Baker Botts L.L.P., and Jordan, Hyden, Womble & Culbreth, P.C., represented the Debtor in its restructuring efforts. On December 9, 2009, Grupo Mexico, S.A.B. consummated the Chapter 11 plan that it sponsored for Asarco LLC. The Plan, which was confirmed both by the bankruptcy and district courts, reintegrated Asarco LLC back to parent Grupo Mexico concluding the four-year Chapter 11 proceeding. Bankruptcy Creditors' Service, Inc., publishes ASARCO Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by ASARCO LLC and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) ASARCO LLC: Submits March 31 Post-Confirmation Quarterly Report --------------------------------------------------------------- Mark A. Roberts of Alvarez and Marsal North America, LLC, as Plan Administrator, prepared a post-confirmation report for the period from January 1 to March 31, 2009, for ASARCO LLC and its affiliates. As previously reported, the Chapter 11 Plan for the ASARCO LLC Debtors was declared effective on December 9, 2009. On that date, the Plan Administrator received funds, totaling $3,633,127,834, which were intended to pay for allowed claim amounts and reserved for unresolved claims. The Plan Administrator prepared tables on a summary of plan distributions and administrative expenses incurred by the Debtors. ASARCO LLC, et al. Post-Confirmation Report For Quarter Ended March 31, 2010 Current Balance Quarter Paid to Date Due ------------ ------------- ------- Plan Admin. Fees & Expenses --------------------------- Plan Admin. Compensation $307,903 $884,864 - Legal Fees 44,370 153,662 - Other Professional Fees - - - All Other Expenses 53,330 53,386 - Distributions ------------- Admin. Expenses: Debtor Prof. Fees 4,390,546 10,340,993 - Non-Professional Fees 134,864 302,891,378 - Secured Creditors - 238,416 - Priority Creditors 638,410 900,948 - Unsecured Creditors 6,097,503 3,064,905,173 - Equity Security Holders - - - Other Payments/Transfers - 71,514,618 - ------------- ------------- ------- Total Plan Payments $11,666,926 $3,451,883,437 - ============= ============= ======= ASARCO LLC, et al. Post-Confirmation Report For Quarter Ended March 31, 2010 Current Paid to Balance Debtor Professional Fees Quarter Date Due ------------------------ ---------- ---------- ------- AlixPartners LLP $636,988 $636,988 - Anderson Kill & Olick, PC Op Acct 375,390 564,105 - Baker Botts LLP 1,097,117 1,097,117 - Ballard Spahr, LLP 1,205 1,205 - Barclays Capital Inc. 235,399 5,417,409 - Bates White, LLC - 85,458 - Casecentral, Inc. 17,178 17,178 - Charter Oak Financial Consultants 96,132 96,132 - Colvin Chaney Saenz & Rodriguez LLP 85 85 - Creta Law Firm 23,397 23,397 - Elias, Meginnes, Riffle & Seghetti 1,125 1,125 - Encore 3,181 3,181 - Equivalent Data 1,474 1,474 - Eric L. Hiser, PLC 1,687 1,687 - Exponent, Inc. 9,979 9,979 - Fennemore Craig 193,468 193,468 - Friday, Eldredge & Clark, LLP 727 727 - FTI Consulting, Inc. 100,000 330,045 - Fulbright & Jaworski L.L.P. 14,525 14,525 - George A. Tsiolis 29,114 29,114 - Gnarus Advisors 10,073 10,073 - Goodstein Law Group PLLC 2,202 2,202 - Grant Thornton LLP 56,863 56,863 - Hanna Brophy MacLean McAleer 767 767 - Hawley Troxell 983 983 - Herold Law Operating Account 51,143 51,143 - Intralinks Operating Account 12,089 12,089 - Jennings, Strouss & Salmon, PLC 26,235 26,235 - Jordan, Hyden, Womble & Culbreth 64,926 247,610 - Keegan Linscott & Kenon 137,666 137,666 - Kramer Rayson LLP 11,093 11,093 - Law Office Of Robert C. Pate 16,549 26,202 - Legal Analysis Systems Inc. 4,518 8,132 - Little Pedersen Fankhauser 36 36 - Merrill Communications 26,836 26,836 - Mooney, Wright & Moore, PLLC 9,997 9,997 - Oppenheimer, Blend, Harrison & Tate 109,491 130,180 - Patton Boggs LLP 10,774 10,774 - Porzio Bromberg & Newman PC 41,733 62,419 - Quarles & Brady Streich Lang 89,656 89,656 - Reed Smith LLP 179,760 206,656 - Stone Pigmann Regular Checking 1,081 1,081 - Stutzman, Bromberg, Esserman & Plif 673,916 673,916 - The Claro Group, LLC 7,087 7,087 - The Rangel Law Firm, PC 6,903 6,903 - ---------- ---------- ------- Total $4,390,546 $10,340,993 - ========== ========== ======= The Post-Confirmation Report was delivered to the Court on April 14, 2010. About Asarco LLC Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. ASARCO LLC filed for Chapter 11 protection on August 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). Attorneys at Baker Botts L.L.P., and Jordan, Hyden, Womble & Culbreth, P.C., represented the Debtor in its restructuring efforts. On December 9, 2009, Grupo Mexico, S.A.B. consummated the Chapter 11 plan that it sponsored for Asarco LLC. The Plan, which was confirmed both by the bankruptcy and district courts, reintegrated Asarco LLC back to parent Grupo Mexico concluding the four-year Chapter 11 proceeding. Bankruptcy Creditors' Service, Inc., publishes ASARCO Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by ASARCO LLC and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) ASARCO LLC: Wants Details on Oppenheimer $10.19MM Fee Request ------------------------------------------------------------- ASARCO LLC asks Judge Schmidt to compel Oppenheimer, Blend, Harrison & Tate, Inc., the counsel of the Debtors' Future Claims Representative Robert C. Pate, to produce certain electronic records. Oppenheimer filed its final application for fees, totaling $10,187,728, and reimbursement of expenses, totaling $647,076, for the period from April 11, 2005, through December 9, 2009. Oppenheimer also made a request for a fee enhancement of 25% of its fees. In connection with the Final Fee Application and fee enhancement request, ASARCO has asked Oppenheimer to produce billing records and invoices in electronic format, like timekeeping and invoice files in digital formats. So far, Oppenheimer has steadfastly refused to produce their Electronic Billing Information, according to Charles A. Beckham, Jr., Esq., at Haynes and Boone, LLP, in Houston, Texas. Mr. Beckham contends that Oppenheimer is required to produce the Electronic Billing Information under Rule 34(a)(1) of the Federal Rules of Civil Procedure. Oppenheimer objected to ASARCO's production request on grounds that the Electronic Billing Information could be derived from the documents already filed in the bankruptcy case and was therefore, available from a 'more convenient source' pursuant to Rule 26(b)(2)(i) of the Federal Rules of Civil Procedure. "Oppenheimer's objection is meritless and should be overruled," Mr. Beckham argues. "Given [Oppenheimer's] request for fee enhancement, [Oppenheimer] obviously believes they did an extraordinarily good job representing their client," Mr. Beckham avers. "Why would [Oppenheimer] hesitate to make their fee statements available in a searchable format under these circumstances?" he asks. Mr. Beckham contends that Oppenheimer's refusal to produce the Electronic Billing Information appears to be nothing more than an obstructive and counter-productive tactic intended to increase ASARCO's costs and further delay the discovery process. Oppenheimer Objects Oppenheimer argues that ASARCO is seeking to compel the production of certain billing data (i) that ASARCO failed to request in its discovery pursuant to the deadline in the Court's scheduling order that ASARCO itself drafted, and (ii) that Oppenheimer simply does not have. John H. Tate, II, Esq., at Oppenheimer, in San Antonio, Texas -- jtate@obht.com -- contends that the Motion to Compel is even more inappropriate and offensive in that it seeks to impose a burden on Oppenheimer to create electronic data -- in contravention of the dictates of the Federal Rules -- to give ASARCO an easier time in prosecuting its objections to the firm's fee and enhancement application. "Simply put, the Reorganized Debtor is requesting information from [Oppenheimer] that it already has but wants in a format that will enable [it] to more cheaply process and analyze," Mr. Tate alleges. He adds, among other things, that Oppenheimer processes its electronic records and bills through less expensive proprietary software, which native data is not readable by other software programs. * * * Subsequently, the parties entered into an agreed order providing that Oppenheimer will produce its time entries and expenses as reflected in its monthly statements and interim fee applications in tab-delimited or comma-separated ASCII file formats. Judge Schmidt approved the parties' Agreed Order. About Asarco LLC Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. ASARCO LLC filed for Chapter 11 protection on August 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). Attorneys at Baker Botts L.L.P., and Jordan, Hyden, Womble & Culbreth, P.C., represented the Debtor in its restructuring efforts. On December 9, 2009, Grupo Mexico, S.A.B. consummated the Chapter 11 plan that it sponsored for Asarco LLC. The Plan, which was confirmed both by the bankruptcy and district courts, reintegrated Asarco LLC back to parent Grupo Mexico concluding the four-year Chapter 11 proceeding. Bankruptcy Creditors' Service, Inc., publishes ASARCO Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by ASARCO LLC and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) ATLANTIC COAST: Court Reinstates Reorganization Case ---------------------------------------------------- The Hon. Paul G. Hyman of the U.S. Bankruptcy Court for the Southern District of Florida reinstated the Chapter 11 case of Atlantic Coast Paladin Shores, LLC. In April, the Court had entered an order dismissing the Debtor's case because the U.S. Trustee for Region 21 said that the Debtor failed to appear at the meeting of creditors. Sebastian, Florida-based Atlantic Coast Paladin Shores, LLC, filed for Chapter 11 bankruptcy protection on March 2, 2010 (Bankr. S.D. Fla. Case No. 10-15275). Martin Werner, Esq., who has an office in Boca Raton, Florida, assists the Company in its restructuring effort. AVENTINE RENEWABLE: Whitebox Advisors Owns 12.3% of Common Shares ----------------------------------------------------------------- Whitebox Advisors, LLC, et al., disclosed that as of March 31, 2010, they may be deemed to beneficially own shares of Aventine Renewable Energy Holdings, Inc.'s common stock. Shares Beneficially Company Owned Percentage ------- ------------ ---------- Whitebox Advisors, LLC 1,053,216 12.3% Whitebox Combined Advisors, LLC 429,433 5.0% Whitebox Combined Partners, L.P. 298,392 3.5% Whitebox Multi-Strategy Fund, L.P. 298,392 3.5% Whitebox Multi-Strategy Fund, Ltd. 298,392 3.5% F-Cubed Partners, L.P. 131,041 1.5% Whitebox Combined Fund, L.P. 131,041 1.5% Whitebox Combined Fund, Ltd. 131,041 1.5% Whitebox Hedged High Yield Advisors, LLC 598,644 7.0% Whitebox Hedged High Yield Partners, L.P. 299,083 3.5% Whitebox Credit Arbitrage Fund, L.P. 299,083 3.5% Whitebox Credit Arbitrage Fund, Ltd. 299,083 3.5% DRE Partners, L.P. 299,561 3.5% Whitebox Hedged High Yield Fund, L.P. 299,561 3.5% Whitebox Hedged High Yield Fund, Ltd. 299,561 3.5% Pandora Select Advisors, LLC 25,139 0.3% Pandora Select Partners LP 25,139 0.3% Pandora Select Fund, LP 25,139 0.3% Pandora Select Fund, Ltd 25,139 0.3% A full-text copy of Whitebox Advisors' Schedule 13G is available for free at http://researcharchives.com/t/s?6242 Pekin, Illinois-based Aventine Renewable Energy Holdings, Inc. (Pink Sheets: AVRN) -- http://www.aventinerei.com/-- is a producer and marketer of ethanol to many leading energy companies in the United States. In addition to ethanol, Aventine also produces distillers grains, corn gluten meal, corn gluten feed, corn germ and brewers' yeast. Morgan Stanley Capital Partners IV bought Aventine in May 2003 from Williams Cos. Aventine had a public offering in May 2006. The Morgan Stanley group retained 28% of the stock at year's end. The Company and its affiliates filed for Chapter 11 on April 7, 2009 (Bankr. D. Del. Lead Case No. 09-11214). Joel A. Waite, Esq., and Ryan M. Bartley, Esq., at Young, Conaway, Stargatt & Taylor, serves as bankruptcy counsel to the Debtors. Davis Polk & Wardwell is special tax counsel and Houlihan, Lokey, Howard & Zukin, Inc., is the financial advisor. Garden City Group, Inc., has been engaged as claims agent. Scott D. Cousins, Esq., and Donald J. Detweiler, Esq., at Greenberg Traurig, LLP, serve as counsel to the official committee of unsecured creditors. When it filed for bankruptcy protection from its creditors, Aventine Renewable listed between $100 million and $500 million each in assets and debts. The Court confirmed on February 24, 2010, the Company's plan of reorganization. The Company emerged from Chapter 11 on March 15, 2010. BI-LO LLC: Reorganized Entity Has 'B' Credit Rating from S&P ------------------------------------------------------------ Standard & Poor's Ratings Services assigned its 'B' corporate credit rating to the Greenville, S.C.-based reorganized entity BI- LO, LLC. "We also assigned a 'B' issue rating and '3' recovery rating to the company's $200 million term loan due 2015. The '3' recovery rating indicates our expectation for meaningful (50% to 70%) recovery in the event of a payment default." The $200 million term loan is part of the exit financing package which also includes a $150 million revolving credit facility due 2013 (unrated). The company will use proceeds from the exit financing package, along with $150 million in equity contribution from Lone Star Funds (sponsor) to repay borrowings outstanding under a debtor-in-possession credit facility, pre-petition claims that include a $260 million first-lien term loan, as well as other pre-petition and post-petition claims. On May 12, 2010 the U.S. Bankruptcy Court in the District of Delaware issued its order confirming BI-LO's plan of reorganization. Under the plan of reorganization, BI-LO's capital structure consists of a $150 million secured revolving credit facility, $200 million secured term loan, and about $307 million in capital leases. The exit financing package also includes $150 million equity contribution from Lone Star Funds. "The rating reflects BI-LO's participation in the intensely competitive supermarket industry, an older store base in need of capital investment, regional concentration, as well as high debt leverage upon emergence from Chapter 11," said Standard & Poor's credit analyst Ana Lai. "BI-LO operates in the intensely competitive supermarket industry and faces strong competition from larger competitors such as Wal- Mart, Food Lion, Ingles, Publix, and Kroger. BI-LO is emerging from bankruptcy with 207 stores with concentration in the southeastern U.S. While in Chapter 11, BI-LO closed seven underperforming stores. Despite competitive pressure, BI-LO maintains a favorable market position in its key markets which include Greenville-Spartanburg, Charlotte, Chattanooga, and Columbia. However, we believe BI-LO's store base is in need of capital investment given that 40% of its store base is older than 10 years." "The stable outlook reflects our expectation that BI-LO's improved operating performance, lower debt levels and adequate financial flexibility will continue, and that credit measures will remain relatively unchanged. We would consider a higher rating if BI-LO's operations remain stable and it utilizes most of its free cash flow to repay debt, resulting in credit metrics improvement such that adjusted total debt to EBITDA declines to about 4x. This could occur if EBITDA stays constant and the company reduces debt by about $100 million. We could consider a lower rating liquidity becomes a concern. This could occur if the cushion under the financial covenants narrows to below 15%. This could occur if BI- LO experiences performance issues due to negative same store sales and overall profitability levels deteriorate due to continued price investment and negative sales leverage. A lower rating could also result from a more aggressive financial policy in relation to the company's free cash flow." BLACK BULL: Court Denies Access to DIP Loans from CIP BB -------------------------------------------------------- The Hon. Ralph B. Kirscher of the U.S. Bankruptcy Court for the District of Montana denied a motion by Black Bull Run Development LLC to: -- obtain a $2.6 million superpriority postpetition term loan financing facility with CIP BB Lending, LLC, and secured by substantially all of the assets of the Debtors; -- use cash collateral; and -- grant adequate protection to prepetition secured lenders. The Court ruled that the Debtors must establish: (1) that they are unable to obtain credit otherwise; (2) that the transaction is within the Debtors' business judgment; and (3) that the interests of primed lienholders are adequately protected. Bozeman, Montana-based Black Bull Run Development LLC filed for Chapter 11 bankruptcy protection on March 26, 2010 (Bankr. D. Mont. Case No. 10-60593). James A. Patten, Esq., who has an office in Billings, Montana, assists the Company in its restructuring effort. According to the schedules, the Company has assets of $16,317,641, and total debts of $42,764,571. BLOCKBUSTER INC: Incurs $65.4 Million Net Loss in Q1 2010 --------------------------------------------------------- Blockbuster Inc. filed its quarterly report on Form 10-Q, showing a net loss of $65.4 million on $939.4 million of revenue for the thirteen weeks ended April 4, 2010, compared with net income of $27.7 million on $1.086 billion of revenue for the thirteen weeks ended April 5, 2009. "During the first quarter we continued progress to recapitalize our business. We have had encouraging discussions with both financial and strategic partners and expect to have additional details to report by our annual stockholders' meeting in late June," stated Jim Keyes, Chairman and Chief Executive Officer of Blockbuster Inc. Operating loss for the first quarter of 2010 was $29.4 million, compared to operating income of $50.2 million in the first quarter one year ago. Adjusted operating income, which excludes costs associated with store closures, including lease terminations, severance, and professional fees associated with the Company's recapitalization initiatives, was $8.6 million for the first quarter of 2010, compared to adjusted operating income of $63.8 million in the first quarter of 2009, which excluded costs associated with store closures including lease terminations, severance, an adjustment for game inventory obsolescence and the favorable settlement of a future liability. Blockbuster ended the first quarter of 2010 with $109.9 million in cash and cash equivalents. Cash used in operating activities during the quarter was $50.8 million, compared with $87.2 million of cash used in operating activities in the first quarter of 2009. First quarter free cash flow (net cash used for operating activities less capital expenditures) was negative $54.8 million in the first quarter of 2010, compared with negative free cash flow of $95.7 million in the same period in 2009. First quarter 2010 domestic same-store sales decreased 7.8%, reflecting rental and retail comparable decreases of 6.4% and 13.9%, respectively. The domestic rental and retail comparable results were primarily driven by competitive pressures. International same-store sales for the first quarter of 2010 decreased 5.8%, reflecting rental and retail comparable decreases of 6.2% and 5.1%, respectively. Worldwide same-store sales for the first quarter of 2010 declined 7.1%. Tom Casey, Executive Vice President and Chief Financial Officer of Blockbuster Inc, stated, "We expect the next 12 to 18 months will remain challenging. For the full year of 2010, we remain focused on the following financial initiatives: lowering our debt service costs; aggressively reducing operating expenses; preserving liquidity through operational efficiencies; and focusing on improving top line performance. Also, following their liquidation and store closures, we believe Movie Gallery store closings could favorably affect hundreds of Blockbuster locations." The Company's balance sheet as of April 4, 2010, showed $1.319 billion in assets and $1.693 billion of liabilities, for a stockholders' deficit of $374.2 million. As reported in the Troubled Company Reporter on March 18, 2010, PricewaterhouseCoopers LLP, in Dallas, expressed substantial doubt about the Company's ability to continue as a going concern. "We incurred a net loss from operations for the quarter and fiscal year ended April 4, 2010, and January 3, 2010, respectively, and have a stockholders' deficit as of April 4, 2010, and January 3, 2010. In addition, the increasingly competitive industry conditions under which we operate have negatively impacted our results of operations and cash flows and may continue to do so in the future. These factors raise substantial doubt about our 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?623b A full-text copy of the press release is available for free at: http://researcharchives.com/t/s?623c Dallas-Tex.-based Blockbuster Inc. (NYSE: BBI; BBI.B) -- http://www.blockbuster.com/-- is a leading global provider of rental and retail movie and game entertainment. With a highly recognized brand and a library of more than 125,000 movie and game titles, Blockbuster leverages its multichannel presence to serve nearly 47 million global customers annually. BOESER INC: Taps Joseph Anthony Wentzell as Bankruptcy Counsel -------------------------------------------------------------- Boeser, Inc., asks the U.S. Bankruptcy Court for the District of Minnesota for permission to employ Joseph Anthony Wentzell, Esq. as counsel. Mr. Wentzell will, among other things: -- perform prepetition planning, analysis of the Debtor's financial situation, planned use of cash collateral, postpetition financing; -- render advice and assist the Debtor in filing a petition for relief; and -- prepare statement of financial affairs, and other documents required by this Court. Mr. Wentzell requests that: (i) fee applications will be heard at 60 day intervals on the Court's regularly scheduled hearing dates; and (ii) the payment of attorneys fees and costs be under the paydown provisions to allow counsel to issue monthly statements to the Debtor and the Office of the U.S. Trustee and receive payment for up to 80% of billed attorneys fees and 100% of incurred costs, all prior to obtaining approval of the Court. To the best of the Debtor's knowledge, Mr. Wentzell is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Mr. Wentzell can be reached at: Wentzell Law Office, PLLC 2812 Anthony Lane S St Anthony, MN 55418 Tel: (612) 436.3292 Fax: (612) 788.9879 E-mail: jwentzell@fosterbrever.com About Boeser, Inc. Minneapolis, Minnesota-based Boeser, Inc., filed for Chapter 11 bankruptcy protection on March 25, 2010 (Bankr. D. Minn. Case No. 10-42136). BOESER INC: U.S. Trustee Unable to Form Creditors Committee ----------------------------------------------------------- The Office of the U.S. Trustee for Region 18 notified the U.S. Bankruptcy Court for the District of Minnesota that its was unable to appoint an official committee of unsecured creditors in the Chapter 11 case of Boeser, Inc. Minneapolis, Minnesota-based Boeser, Inc., filed for Chapter 11 bankruptcy protection on March 25, 2010 (Bankr. D. Minn. Case No. 10-42136). Joseph Anthony Wentzell, Esq., at Wentzell Law Office, PLLC, assists the Company in its restructuring effort. BOESER INC: Has Access to Prepetition Lenders' Cash Until June 15 ----------------------------------------------------------------- The Hon. Gregory Kishel of the U.S. Bankruptcy Court for the District of Minnesotta approved a stipulation extending Boeser, Inc.'s access to its prepetition lenders' cash collateral until June 15, 2010. Pursuant to the stipulation, Anchor Bank, N.A., and First Business Capital Corp. will each continue to be granted replacement liens, having the same priority, dignity and effect as AB's and FBCC's respective prepetition liens, on all postpetition property of the Debtor, as security for and protection against any diminution in value resulting from the Debtor's use of its prepetition property that is encumbered by AB's or FBCC's respective prepetition liens. The replacement liens are in addition to AB's and FBC's existing prepetition liens. The postpetition liens do not extend to or cover any causes of action, or any proceeds thereof, arising under Chapter 5 of the Bankruptcy Code. Minneapolis, Minnesota-based Boeser, Inc., filed for Chapter 11 bankruptcy protection on March 25, 2010 (Bankr. D. Minn. Case No. 10-42136). Joseph Anthony Wentzell, Esq., at Wentzell Law Office, PLLC, assists the Company in its restructuring effort. BROADSTAR WIND: Files for Chapter 11 Protection ----------------------------------------------- American Bankruptcy Institute reports that BroadStar Wind Systems Group LLC filed for Chapter 11 protection on Tuesday and has arranged for a $1.5 million debtor-in-possession loan. BroadStar Wind Systems is an engineering and technology firm. BROWN PUBLISHING: Gets Interim OK to Use PNC's Cash Collateral -------------------------------------------------------------- The Brown Publishing Company et al. sought and obtained authorization, on an interim basis, from the Hon. Dorothy Eisenberg of the U.S. Bankruptcy Court for the Eastern District of New York to use the cash collateral of PNC Bank, National Association. Edward M. Fox, Esq., at K&L Gates LLP, the attorney for the Debtors, explains that the Debtors need the money to fund their Chapter 11 case, pay suppliers and other parties. The Debtors will use the collateral pursuant to a budget, a copy of which is available for free at: http://bankrupt.com/misc/BROWN_PUBLISHING_budget.pdf In exchange for using the cash collateral, the Debtors propose to grant PNC replacement lien on all present and after-acquired property of the Debtors. PNC will also be further granted superpriority claims in the event that the replacement lie isn't sufficient to provide adequate protection for the lender.d The Court has set a final hearing for June 1, 2010, at 11:00 a.m. prevailing Eastern time, on the Debtors' request to use cash collateral. Headquartered in Cincinnati, Ohio, The Brown Publishing Company owns business publications in Ohio, Utah, Texas, South Carolina, New York, and Iowa. Brown publishes 15 daily, 32 weekly, 11 business and 41 free publications. There are also 51 websites. Seventy-eight of the publications are in Ohio. Brown publishes Dan's Papers, the weekly newspaper with the largest circulation in the area of eastern Long Island, New York, known as the Hamptons. Brown also publishes the Montauk Pioneer, which it calls the official newspaper of Montauk, New York. The Company filed for Chapter 11 bankruptcy protection on April 30, 2010 (Bankr. E.D.N.Y. Case No. 10-73295). Edward M. Fox, Esq., at K&L Gates LLP, assists the Company in its restructuring effort. The Company estimated its assets and debts at $10,000,001 to $50,000,000. BROWN PUBLISHING: Asks Court to Approve Auction Procedures ---------------------------------------------------------- The Brown Publishing Company, et al., and its units seek permission from the Bankruptcy Court to sell their assets to Brown Media Corporation or to another purchaser with a higher and better offer at an auction. The Debtors have entered into an Asset Purchase Agreement dated May 4, 2010, with Brown Media, which provides for the sale of the assets, subject to any higher and better offers that might be submitted for the sale of the assets to the party or parties that submit the highest and best bid(s) as determined by the Debtors. Under the APA, Brown Media will purchase the assets at $15,300,000. In the event that a better offer is made to the Debtors' assets and Brown Media isn't chosen as the purchaser, the Debtors will pay Brown Media a break-up fee of $800,000. The closing of the sale of the assets will be within five days of satisfaction or waiver of closing conditions, but no later than July 31, 2010. A bid for all of the assets covered by the Brown Media APA must offer to pay a purchase price higher than the purchase price offered by Brown Media by the aggregate amount of the Break-Up Fee plus at least $50,000 for the initial bid, and $50,000 for any additional incremental bid. The bidder's offer must be accompanied by a cash deposit in an amount representing 7% of the purchase price proposed by the bidder for its purchase of the assets. All qualified bids must be submitted in writing no later than three business days prior to the auction. If, on or before the bid deadline, the Debtors receive at least one additional qualified bid for the assets or any portion thereof, the Debtors will hold an auction unless the Debtors, in consultation with their financial advisors, in the exercise of their sound business judgment, decide that all of the qualified bids submitted with respect to the assets are unacceptable and that canceling the auction would be in the best interest of the Debtors' creditors and estates, in which case Brown Media shall be the successful bidder. Qualified bidders must submit bids in minimum increments of at least $50,000 higher than the initial highest bid for any or all of the assets and each subsequent bid. The Debtors have asked the U.S. Bankruptcy Court for the Eastern District of New York to approve its proposed auction procedures, a copy of which is available for free at: http://bankrupt.com/misc/BROWN_PUBLISHING_sales_procedures.pdf About Brown Publishing Headquartered in Cincinnati, Ohio, The Brown Publishing Company owns business publications in Ohio, Utah, Texas, South Carolina, New York, and Iowa. Brown publishes 15 daily, 32 weekly, 11 business and 41 free publications. There are also 51 websites. Seventy-eight of the publications are in Ohio. Brown publishes Dan's Papers, the weekly newspaper with the largest circulation in the area of eastern Long Island, New York, known as the Hamptons. Brown also publishes the Montauk Pioneer, which it calls the official newspaper of Montauk, New York. The Company filed for Chapter 11 bankruptcy protection on April 30, 2010 (Bankr. E.D.N.Y. Case No. 10-73295). Edward M. Fox, Esq., at K&L Gates LLP, assists the Company in its restructuring effort. The Company estimated its assets and debts at $10,000,001 to $50,000,000. BROWN PUBLISHING: Asks for Court OK to Obtain DIP Financing ----------------------------------------------------------- The Brown Publishing Company, et al., seek authority from the U.S. Bankruptcy Court for the Eastern District of New York to obtain postpetition secured financing from a syndicate of lenders led by PNC Bank, N.A., as administrative agent. The DIP lenders have committed to provide up to $1,000,000 available under the Interim DIP Facility and up to $2,500,000 available under the Final DIP Facility. Edward M. Fox, Esq., at K&L GATES LLP, the attorney for the Debtors, explains that the Debtors need the money to fund their Chapter 11 case, pay suppliers and other parties. The DIP facility will mature on July 30, 2010. The DIP facility will incur interest at prime plus 6.75%, subject to a minimum rate of 10%. The Debtors will grant the Agent: (a) superpriority administrative claim status having priority over all other administrative claim; (b) a first priority mortgage, security interest and lien on all Post-Petition Collateral, subject only to the Carve-out and any permitted liens under the Financing Agreements; and (c) a first priority priming lien on all assets and property of the estate securing the Debtors loans under the Pre-Petition Credit Agreements. The DIP lien is subject to a carve-out for U.S. Trustee and Clerk of Court fees; and up to $2,879,000 in fees payable to professional employed in the Debtors' case and fees of the committee in pursuing actions challenging the DIP Lenders' lien. The Debtors are required to pay a host of fees to PNC: (i) agent s fee: $5,000 per month; (ii) unused line fee: 0.5% per annum on the unused portion of each lender share of the DIP Facilities, payable monthly in arrears; and (iii) closing fee: 4% of the maximum. The Debtors, the Agent and the Post-Petition Lenders are still negotiating the terms of a formal credit agreement pursuant to which, among other things, the Agent and the Post-Petition Lenders will provide a revolving credit facility to the Debtors (the DIP Agreement) and a security agreement, pursuant to which the obligations arising under the DIP Facilities will be entitled to superpriority administrative claim status, a first priority security interest on all of the Debtors assets and property and a priming lien on all assets and property of the Debtors estate securing existing loans. The Debtors are required to: (a) file a motion with the Court seeking approval to sell all or substantially all of the Borrowers assets on or before May 4, 2010; (b) obtain an order approving bid procedures for the Sale by May 21, 2010; (c) obtain an order approving the Sale within 30 days of entry of the Bid Procedures Order; and (d) close the Sale within five days of entry of the Sale Order. Headquartered in Cincinnati, Ohio, The Brown Publishing Company owns business publications in Ohio, Utah, Texas, South Carolina, New York, and Iowa. Brown publishes 15 daily, 32 weekly, 11 business and 41 free publications. There are also 51 websites. Seventy-eight of the publications are in Ohio. Brown publishes Dan's Papers, the weekly newspaper with the largest circulation in the area of eastern Long Island, New York, known as the Hamptons. Brown also publishes the Montauk Pioneer, which it calls the official newspaper of Montauk, New York. The Company filed for Chapter 11 bankruptcy protection on April 30, 2010 (Bankr. E.D.N.Y. Case No. 10-73295). Edward M. Fox, Esq., at K&L Gates LLP, assists the Company in its restructuring effort. The Company estimated its assets and debts at $10,000,001 to $50,000,000. BWAY CORP: S&P Affirms B+ Credit Rating; Outlook Negative --------------------------------------------------------- Standard & Poor's Ratings Services affirmed its ratings, including its 'B+' corporate credit rating, on Oak Brook, Ill.-based BWAY Corp. (the operating subsidiary of holding company BWAY Holding Co.). The outlook is negative. The ratings were removed from CreditWatch, where they were placed with negative implications on March 30, 2010, following the announcement that the company had entered into a merger agreement with affiliates of Madison Dearborn Partners LLC, a private equity consortium. S&P also assigned a 'B+' corporate credit rating to BWAY Holding Co., the parent company of BWAY Corp. The rating outlook is negative. "The outlook reflects the possibility that we may lower our ratings during the next year if the company cannot maintain its credit ratios at appropriate levels for the rating following the completion of the LBO," said Standard & Poor's credit analyst James Siahaan. The transaction is valued at about $915 million including the assumption of debt. The acquisition of BWAY is expected to be financed with approximately $565 million of proposed senior secured debt and $200 million of proposed senior unsecured debt. "Standard & Poor's assigned its issue-level and recovery ratings to BWAY's proposed $565 million senior secured credit facilities and $200 million senior unsecured notes. The secured credit facilities were rated 'B+' (the same as the corporate credit rating on BWAY Corp.) with a recovery rating of '3', indicating our expectation for meaningful (50%-70%) recovery in the event of a payment default. The senior unsecured notes were rated 'B-' (two notches lower than the corporate credit rating) with a recovery rating of '6', indicating our expectation for negligible (0%-10%) recovery in the event of a default. The ratings are based on preliminary terms and conditions and could be revised if the terms of the deal change." BWAY, with annual sales of about $1 billion, mainly produces plastic containers and general-line metal containers for packaging paints, solvents, and household products in the U.S. market. CALIFORNIA COASTAL: Reinstates Ban on Acquisitions of Common Stock ------------------------------------------------------------------ California Coastal Communities, Inc., disclosed Thursday that it has reinstated a ban on acquisitions of additional shares of its common stock, under certain circumstances, in order to preserve the tax benefits of its $164 million of net operating loss carryovers. In accordance with provisions of the Company's charter documents, unless the Company has previously consented in writing: (i) no stockholder may acquire shares in an amount that would cause the stockholder to own 5% or more of the Common Stock; and (ii) no current 5% or greater stockholder may acquire any additional shares of Common Stock without the Company's written consent. In 2006, the Company's Board of Directors suspended enforcement of these transfer restrictions because it determined that sufficient cushion existed. All acquisitions of the Company's Common Stock in violation of its charter prohibitions are null and void, and the Company is empowered to effectively reverse the effect of any of these acquisitions. The Company's Board of Directors may, but is not required to, entertain requests for permission to exceed the limitations on stock acquisitions under circumstances it determines are not likely to jeopardize the Company's ability to preserve and use its NOLs. About California Coastal Irvine, Calif.-based California Coastal Communities, Inc. -- http://www.californiacoastalcommunities.com/-- is a residential land development and homebuilding company with properties owned or controlled primarily in Orange County, California, and also in Lancaster in Los Angeles county. The Company's primary asset is a 356-home luxury coastal community known as Brightwater in Huntington Beach, California. California Coastal Communities, Inc. and certain of its direct and indirect wholly-owned subsidiaries filed for Chapter 11 bankruptcy protection on October 27, 2009 (Bankr. C.D. Calif. Case No. 09- 21712). Joshua M. Mester, Esq., who has an office in Los Angeles, California, assists the Debtors in their restructuring efforts. In their petition, the Debtors listed between $100 million and $500 million in assets and between $100 million and $500 million of debts. On March 26, 2010, the Company filed a proposed disclosure statement and proposed joint plan of reorganization with the Bankruptcy Court, neither of which has been approved. The proposed joint plan provides for the extension of the Revolving Loan and the Term Loan to enable the Company to complete construction and sale of the homes at its Brightwater project. A majority of the Company's lenders are opposed to the plan as filed. At March 31, 2010, the Company's balance sheet showed $249.0 million in assets, $218.0 million of liabilities, and $31.0 million of stockholders' equity. CALIFORNIA COASTAL: Posts $2.4 Million Net Loss in Q1 2010 ---------------------------------------------------------- California Coastal Communities, Inc. filed its quarterly report on Form 10-Q, showing a net loss of $2.4 million on $3.0 million of revenue for the three months ended March 31, 2010, compared with net income of $11.2 million on $12.8 million of revenue for the same period of 2009. The Company's balance sheet as of March 31, 2010, showed $249.0 million in assets, $218.0 million of liabilities, and $31.0 million of stockholders' equity. A full-text copy of the quarterly report is available for free at: http://researcharchives.com/t/s?6240 Irvine, Calif.-based California Coastal Communities, Inc. -- http://www.californiacoastalcommunities.com/-- is a residential land development and homebuilding company with properties owned or controlled primarily in Orange County, California, and also in Lancaster in Los Angeles county. The Company's primary asset is a 356-home luxury coastal community known as Brightwater in Huntington Beach, California. California Coastal Communities, Inc. and certain of its direct and indirect wholly-owned subsidiaries filed for Chapter 11 bankruptcy protection on October 27, 2009 (Bankr. C.D. Calif. Case No. 09- 21712). Joshua M. Mester, Esq., who has an office in Los Angeles, California, assists the Debtors in their restructuring efforts. In their petition, the Debtors listed between $100 million and $500 million in assets and between $100 million and $500 million of debts. On March 26, 2010, the Company filed a proposed disclosure statement and proposed joint plan of reorganization with the Bankruptcy Court, neither of which has been approved. The proposed joint plan provides for the extension of the Revolving Loan and the Term Loan to enable the Company to complete construction and sale of the homes at its Brightwater project. A majority of the Company's lenders are opposed to the plan as filed. CANWEST GLOBAL: Canada Unit Has OK to Hold Meeting with Creditors ----------------------------------------------------------------- Canwest Global Communications Corp. disclosed that the Ontario Superior Court of Justice (Commercial List) has granted an order authorizing Canwest Limited Partnership / Canwest Societe en Commandite and certain of its subsidiaries to call and convene a meeting of its unsecured creditors on June 10, 2010. The purpose of the meeting is to consider and vote on a plan of compromise or arrangement consistent with the terms of the bid made by members of an ad hoc committee of holders of 9.25% senior subordinated notes issued by the Limited Partnership to acquire the assets of the LP Entities. As previously disclosed, the AHC bid will provide unsecured creditors with cash, or shares on a pro rata basis for up to 45% of the equity in the new company established to acquire substantially all of the LP Entities' assets. Specifically, unsecured trade creditors with proven claims of less than $1,000 will receive a cash payment for the full value of their claim and unsecured trade creditors with proven claims of $1,000 or more can elect to receive shares in Newco on a pro rata basis or $1,000 in cash. About Canwest Global Canwest Global Communications Corp. (TSX: CGS and CGS.A) -- http://www.canwest.com/-- an international media company, is Canada's largest media company. In addition to owning the Global Television Network, Canwest is Canada's largest publisher of English language daily newspapers and owns, operates and holds substantial interests in conventional television, out-of-home advertising, specialty cable channels, web sites and radio stations and networks in Canada, New Zealand, Australia, Turkey, Indonesia, Singapore, the United Kingdom and the United States. On October 6, 2009, Canwest Global, Canwest Media Inc., Canwest Television Limited Partnership (including Global Television, MovieTime, DejaView and Fox Sports World), The National Post Company and certain subsidiaries voluntarily entered into, and successfully obtained an Order from the Ontario Superior Court of Justice (Commercial Division) commencing proceedings under the Companies' Creditors Arrangement Act. The CMI Entities' commencement of these proceedings was undertaken in furtherance of a proposed recapitalization transaction that is supported by over 70% of holders of the 8% senior subordinated notes issued by CMI. On the same day, FTI Consulting Canada Inc., the Court-appointed Monitor in the CCAA proceedings, sought protection in the United States Bankruptcy Court under Chapter 15 of the United States Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No. 09-15994) for certain of the entities involved in Canwest's television business that filed for protection under the CCAA, including Canwest, Canwest Media Inc. and Canwest Global Broadcasting Inc./Radiodiffusion Canwest Global Inc. Judge Stuart M. Bernstein presides over the Chapter 15 cases. Evan D. Flaschen, Esq., at Bracewell & Giuliani LLP, in Hartford, Connecticut, serves as Chapter 15 Petitioner's counsel. The Chapter 15 Debtors disclosed estimated assets of $500 million to $1 billion and estimated debts of $50 million to $100 million. In a regulatory filing with the U.S. Securities and Exchange Commission, Canwest Media disclosed C$4,847,020,000 in total assets and C$5,826,522,000 in total liabilities at May 31, 2009. Bankruptcy Creditors' Service, Inc., publishes Canwest Bankruptcy News. The newsletter tracks the CCAA proceedings and Chapter 15 proceedings undertaken by Canwest Global Communications Corp. and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000). CENTRAL METAL: Plan Outline Hearing Scheduled for May 27 -------------------------------------------------------- The Hon. Vincent P. Zurzolo of the U.S. Bankruptcy Court for the Central District of California will consider at a hearing on May 27, 2010, at 1:30 p.m., the approval of the Disclosure Statement explaining Central Metal, Inc.'s Plan of Reorganization. The hearing will be held at Courtroom 1368, 255 E. Temple St., Los Angeles, California. 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 that on the effective date, the disbursing agent will deposit into a segregated account an amount of cash equal to 100% of the estimated distribution to be paid on the disputed portion of any claim. Cash together with interest accruing thereon will be held in trust for the benefit of holders of disputed claims. Under the Plan, all secured claims will be paid in full from the post-confirmation income of the Debtor. Priority unsecured claims amounting to $1,988 will be paid in full from the post-confirmation income of the Reorganized Debtor. All general unsecured claims amounting to $1,000,000 will be paid in four payments, each at $250,000. Interest holder, Jong Uk Byun will receive no payments under the Plan. A full-text copy of the Disclosure Statement is available for free at http://bankrupt.com/misc/CentralMetal_DS.pdf The Debtor is represented by: Levene, Neale, Bender, Rankin & Brill L.L.P. Attn: Monica Y. Kim and Juliet Y. Oh 10250 Constellation Blvd., Suite 1700 Los Angeles, CA 90067 Tel: (310) 229-1234 Fax: (310) 229-1244 About Central Metal, Inc. Huntington Park, California-based Central Metal, Inc., is a fully integrated scrap metal processing company that purchases, processes and sells ferrous and non-ferrous metals domestically and internationally. The Company is one of the largest processing companies on the West Coast, has one of the largest land sites and processing capacities, and is fully diversified in its business portfolio that entails dynamic trading relationships with renowned metal manufacturers around the world. The Company filed for Chapter 11 bankruptcy protection on January 8, 2010 (Bankr. C.D. Calif. Case No. 10-10642). Juliet Y. Oh, Esq., who has an office in Los Angeles, California, 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. CERTIFIED DIABETIC: Files For Chapter 11 Bankruptcy Protection -------------------------------------------------------------- BankruptcyData.com reports that Certified Diabetic Services and two affiliated Debtors filed for Chapter 11 protection (Bankr. M.D. Fla. Lead Case No. 10-11046). Jeffrey W. Warren, Esq., represents the Company in its Chapter 11 effort. Headquartered in Fort Myers, Florida, Certified Diabetic Services, Inc. -- http://www.cdiabetic.com/-- is a direct-to-consumer provider of diabetes medical supplies, testing, products, education and information. In addition to being approved as a provider for diabetic Medicare and diabetic Medicaid reimbursement, CDS holds significant contracts with more than 75 private insurance carriers to provide diabetes educational programs for members. CHEM RX CORP: Organizational Meeting to Form Panel on May 21 ------------------------------------------------------------ Roberta A. DeAngelis, Acting United States Trustee for Region 3, will hold an organizational meeting on May 21, 2010, at 10:00 a.m. in the bankruptcy case of Chem Rx Corporation, et al. The meeting will be held at J. Caleb Boggs Federal Building, 844 King Street, Room 5209, Wilmington, DE 19801. The sole purpose of the meeting will be to form a committee or committees of unsecured creditors in the Debtors' cases. The organizational meeting is not the meeting of creditors pursuant to Section 341 of the Bankruptcy Code. A representative of the Debtor, however, may attend the Organizational Meeting, and provide background information regarding the bankruptcy cases. To increase participation in the Chapter 11 proceeding, Section 1102 of the Bankruptcy Code requires that the United States Trustee appoint a committee of unsecured creditors as soon as practicable. The Committee ordinarily consists of the persons, willing to serve, that hold the seven largest unsecured claims against the debtor of the kinds represented on the committee. Section 1103 of the Bankruptcy Code provides that the Committee may consult with the debtor, investigate the debtor and its business operations and participate in the formulation of a plan of reorganization. The Committee may also perform other services as are in the interests of the unsecured creditors whom it represents. About Chem Rx Founded more than 40 years ago, Chem Rx is a major institutional pharmacy serving the New York City metropolitan area, as well as parts of New Jersey, upstate New York, Pennsylvania and Florida. Chem Rx's client base includes skilled nursing facilities and a wide range of other long-term care facilities. Chem Rx annually provides over six million prescriptions to over 69,000 residents of more than 400 institutional facilities. The Company and its units filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code. Chem Rx engaged investment banker Lazard Middle Market LLC to help it facilitate a restructuring of the company. CHEM RX: Needs CRO to Have Access to Cash Collateral ---------------------------------------------------- Chem Rx Corp. received interim approval from the Bankruptcy Court to use cash representing collateral for secured lenders. According to Bloomberg News, as a condition to the use of cash, the Company must continue to employ a chief restructuring officer acceptable to the lenders. The final hearing on the use of cash is scheduled for May 27. About Chem Rx Chem Rx -- http://www.chemrx.net.-- is a major institutional pharmacy serving the New York City metropolitan area, as well as parts of New Jersey, upstate New York, Pennsylvania and Florida. Chem Rx's client base includes skilled nursing facilities and a wide range of other long-term care facilities. Chem Rx annually provides over six million prescriptions to over 69,000 residents of more than 400 institutional facilities. Chem Rx filed for Chapter 11 on __ in Wilmington, Delaware (Bankr. D. Del. Case No. 10-11567). The petition listed assets of $170 million against debt totaling $178 million. Chem Rx has engaged investment banker Lazard Middle Market LLC to help it facilitate a restructuring of the company. CINCINNATI BELL: Fitch Puts B+ IDR on Rating Watch Negative ----------------------------------------------------------- Fitch Ratings has placed Cincinnati Bell Inc.'s (CBB) 'B+' Issuer Default Rating (IDR) on Rating Watch Negative. In addition, the Negative Watch applies to CBB's security ratings, as well as the subsidiary ratings. The rating action follows CBB's announcement that it will acquire privately held data center operator CyrusOne in a cash transaction approximating $525 million. The transaction is expected to close by the end of the second quarter of 2010 following regulatory and customary approvals. To finance the transaction, the company has obtained commitments for a $970 million senior secured credit facility. The company anticipates renewing its existing $210 million senior secured revolving credit facility, which matures in August 2012, and extending its maturity to 2014. In addition the company expects to renew its Term Loan B facility, which has $204 million outstanding, extending the maturity data from August 2012 to 2017. Commitments under the $970 million facility may be reduced by the issuance of senior unsecured debt to finance the $525 million acquisition, plus related fees before the close of the transaction. Pro forma for the acquisition of CyrusOne, Fitch expects CBB's leverage to approximate 5 times (x), significantly higher than the 4.1x recorded in 2009. In Fitch's view, CBB's pro forma leverage is high for the current rating. The high leverage is partly offset by the strong growth prospects of the data center business, as well as the revenue diversification provided by the acquisition. Fitch expects to resolve the Negative Watch prior to the close of the transaction. However, any potential downgrade would likely be limited to one notch. Fitch's existing 'B+' IDR for Cincinnati Bell, Inc. (CBB) reflects expectations for relatively stable credit metrics and the diversified revenue base associated with the company's business model, which integrates the wireline and wireless businesses. The company's results have been pressured by the economy, as well as by competition in the wireline and wireless business segments. CBB has been able to maintain a relatively stable level of EBITDA through aggressive cost control efforts and revenue increases in certain growth areas. Free cash flow, according to the company's guidance and prior to the acquisition of CyrusOne, is expected to approximate $130 million in 2010 and, if achieved, will be relatively solid as measured by the free cash flow margin (free cash flow as a percentage of revenues). Constraining factors in the company's current ratings include the deployment of a portion of its recent and expected free cash flow to stock repurchase programs and CBB's moderately higher leverage relative to its peer group. Fitch has placed the following ratings on Rating Watch Negative: Cincinnati Bell, Inc. --IDR 'B+'; --Senior secured credit facility 'BB+/RR1'; --$792 million senior notes 'BB-/RR3'; --$625 million senior subordinated notes 'B/RR5'; --$129 million convertible preferred stock 'B-/RR6'. Cincinnati Bell Telephone (CBT) --IDR 'B+'; --$208 million senior unsecured notes 'BB+/RR1'. COLLIER LAND: U.S. Trustee Unable to Form Creditors Committee ------------------------------------------------------------- Roberta A. DeAngelis, the Acting U.S. Trustee for Region 3, notified the U.S. Bankruptcy Court for the Western District of Pennsylvania, that she was unable to appoint an official committee of unsecured creditors in the Chapter 11 case of Collier Land & Coal Development, LP. The U.S. Trustee explained that there were insufficient indications of willingness from the unsecured creditors to serve in the committee. Clairton, Pennsylvania-based Collier Land & Coal Development, LP, filed for Chapter 11 bankruptcy protection on March 25, 2010 (Bankr. W.D. Pa. Case No. 10-22059). Robert S. Bernstein, Esq., and Scott E. Schuster, Esq., at Bernstein Law Firm, P.C., assist 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. COLLIER LAND: Meeting of Creditors Scheduled for June 16 -------------------------------------------------------- The U.S. Trustee for Region 3 will convene a meeting of creditors in Collier Land & Coal Development, LP's Chapter 11 case on June 16, 2010, at 11:00 a.m. The meeting will be held at the Liberty Center, 7th Floor, Room 725, 1001 Liberty Avenue, Pittsburgh, Pennsylvania. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Clairton, Pennsylvania-based Collier Land & Coal Development, LP, filed for Chapter 11 bankruptcy protection on March 25, 2010 (Bankr. W.D. Pa. Case No. 10-22059). Robert S. Bernstein, Esq., and Scott E. Schuster, Esq., at Bernstein Law Firm, P.C., assist 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. CONVERSION SERVICES: Reports $557,110 Net Loss for March 31 Qtr --------------------------------------------------------------- Conversion Services International, Inc., reported a net loss attributable to common stockholders of $557,110 for the three months ended March 31, 2010, from a net loss of attributable to common stockholders of $1,726,657 for the same period in 2009. Revenues were $4,976,833 for the 2010 first quarter from $3,810,439 for the same period in 2009. At March 31, 2010, the Company had total assets of $4,380,023; against total current liabilities of $5,075,373; long-term debt, net of current portion of $500,000; and Series A convertible preferred stock of $1,583,332; resulting in stockholders' deficit of $2,778,682. As of March 31, 2010, the Company had a cash balance of approximately $96,740, compared to $96,957 at December 31, 2009, and a working capital deficiency of $800,000. The liquidity issues that have resulted from the Company's history of losses have been addressed in the past through the sale of Company common stock, preferred stock and by entering into various debt instruments. In its March 2010 Form 10-Q report, the Company said it has incurred a $417,110 net loss for the three months ended March 31, 2010 and, while the Company reported a profit of $31,956 for the fiscal year ended December 31, 2009, it incurred significant losses for the years ended December 31, 2004 through 2008, negative cash flows from operating activities for the three months ended March 31, 2010 and the years ended December 31, 2004 through 2008, and had an accumulated deficit of $72.0 million at March 31, 2010. The Company has relied upon cash from its financing activities to fund its ongoing operations as it has not been able to generate sufficient cash from its operating activities in the past, and there is no assurance that it will be able to do so in the future. Due to this history of losses and operating cash consumption, the Company cannot predict how long it will continue to incur further losses or whether it will become profitable again, or if the Company's business will improve. These factors raise substantial doubt as to its ability to continue as a going concern. A full-text copy of the Company's quarterly report on Form 10-Q is available at no charge at http://ResearchArchives.com/t/s?6257 About Conversion Services East Hanover, New Jersey-based Conversion 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. 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: CS Automotive Sells $450 Million in Notes ---------------------------------------------------------- International Financing Review, a Thomson Reuters service, said that Cooper Standard Automotive Inc. sold $450 million of senior notes in the 144a private placement market on April 29, 2010, according to a report by Reuters. Deutsche Bank, Bank of America Merrill Lynch, Barclays and UBS were the joint bookrunning managers for the sale, the report said. BORROWER: COOPER STANDARD AUTOMOTIVE INC. AMT $450 MLN COUPON 8.50 PCT MATURITY 5/2/2018 TYPE SR NOTES ISS PRICE 100.00 FIRST PAY 11/2/2010 MOODY'S N/A YIELD 8.50 PCT SETTLEMENT 5/11/2010 S&P N/A SPREAD 508 BPS PAY FREQ SEMI-ANNUAL FITCH N/A MORE THAN TREAS NON-CALLABLE 4 YRS About Cooper-Standard Cooper-Standard Automotive Inc. -- http://www.cooperstandard.com/ -- headquartered in Novi, Michigan, is a leading global automotive supplier specializing in the manufacture and marketing of systems and components for the automotive industry. Products include body sealing systems, fluid handling systems and NVH control systems. The Company is one of the leading suppliers of chassis products in North America, with about 14% of market share. The Company's main custoemrs include Ford Motor Company, General Motors, Chrysler, Audi, Volkswagen, BMW, Fiat and Honda, among other automakers. Cooper-Standard Automotive employs approximately 16,000 people globally with more than 70 facilities throughout the world. Cooper-Standard is a privately held portfolio company of The Cypress Group and Goldman Sachs Capital Partners Funds. Cooper-Standard Holdings Inc., together with affiliates, filed for Chapter 11 on August 4, 2009 (Bankr. D. Del. Case No. 09-12743). Attorneys at Fried, Frank, Harris, Shriver & Jacobson LLP and Richards, Layton & Finger, P.A., will serve as bankruptcy counsel to the Debtors. Lazard Freres & Co. is serving as investment banker while Alvarez & Marsal is financial advisor. Kurtzman Carson Consultants LLC is notice, claims and solicitation agent. In its bankruptcy petition, the Company said that assets on a consolidated basis total $1,733,017,000 while debts total $1,785,039,000 as of March 31, 2009. The Company's Canadian subsidiary, Cooper-Standard Automotive Canada Limited, also sought relief under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice in Toronto, Ontario, Canada. Bankruptcy Creditors' Service, Inc., publishes Cooper-Standard Bankruptcy News. The newsletter tracks the Chapter 11 and CCAA proceedings undertaken by Cooper-Standard Holdings Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945- COOPER-STANDARD: RSM Richter Seeks Nod for Activities ----------------------------------------------------- RSM Richter Inc., the firm appointed to monitor the assets of Cooper-Standard Automotive Canada Ltd., sought and obtained an order from the Ontario Superior Court of Justice approving its activities since March 10, 2010, which include: * reviewing weekly financial information; * communicating with creditors, as required; * attending in court from time to time; * monitoring filings in the Chapter 11 cases of CSA Canada's U.S.-based affiliates; and * drafting its April 13, 2010 monitor report. About Cooper-Standard Cooper-Standard Automotive Inc. -- http://www.cooperstandard.com/ -- headquartered in Novi, Michigan, is a leading global automotive supplier specializing in the manufacture and marketing of systems and components for the automotive industry. Products include body sealing systems, fluid handling systems and NVH control systems. The Company is one of the leading suppliers of chassis products in North America, with about 14% of market share. The Company's main custoemrs include Ford Motor Company, General Motors, Chrysler, Audi, Volkswagen, BMW, Fiat and Honda, among other automakers. Cooper-Standard Automotive employs approximately 16,000 people globally with more than 70 facilities throughout the world. Cooper-Standard is a privately held portfolio company of The Cypress Group and Goldman Sachs Capital Partners Funds. Cooper-Standard Holdings Inc., together with affiliates, filed for Chapter 11 on August 4, 2009 (Bankr. D. Del. Case No. 09-12743). Attorneys at Fried, Frank, Harris, Shriver & Jacobson LLP and Richards, Layton & Finger, P.A., will serve as bankruptcy counsel to the Debtors. Lazard Freres & Co. is serving as investment banker while Alvarez & Marsal is financial advisor. Kurtzman Carson Consultants LLC is notice, claims and solicitation agent. In its bankruptcy petition, the Company said that assets on a consolidated basis total $1,733,017,000 while debts total $1,785,039,000 as of March 31, 2009. The Company's Canadian subsidiary, Cooper-Standard Automotive Canada Limited, also sought relief under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice in Toronto, Ontario, Canada. Bankruptcy Creditors' Service, Inc., publishes Cooper-Standard Bankruptcy News. The newsletter tracks the Chapter 11 and CCAA proceedings undertaken by Cooper-Standard Holdings Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945- COSINE COMMUNICATIONS: Reports $199,000 Net Loss for March 31 Qtr ----------------------------------------------------------------- CoSine Communications, Inc., reported a net loss of $199,000 or ($0.02) loss per share for the quarter ended March 31, 2010, as compared to net loss of $155,000 or ($0.02) per share for the quarter ended March 31, 2009. CoSine also unveiled the expansion of its strategic plan to include investing its resources with the potential for capital gains. CoSine's expanded strategic plan is to redeploy its existing resources to identify and acquire, or invest in, one or more operating businesses with the potential for generating taxable income or capital gains. At March 31, 2010, the Company had total assets of $22,382,000 against total liabilities of $214,000, resulting in stockholders' equity of $22,168,000. A full-text copy of the Company's earnings release is available at no charge at http://ResearchArchives.com/t/s?6259 In its March 2010 Form 10-Q report, the Company said at March 31, 2010, it has an accumulated deficit of $517 million. The Company said its actions in the fourth quarter of fiscal year 2004 to terminate most of its employees and discontinue production activities in an effort to conserve cash raise substantial doubt about its ability to continue as a going concern. A full-text copy of the Company's Form 10-Q report is available at no charge at http://ResearchArchives.com/t/s?625a The 2010 Annual Meeting of CoSine Stockholders was held at the offices of Collette Erickson Farmer & O'Neill LLP, 235 Pine Street, Suite 1300, San Francisco, California 94104 on May 11, 2010, at 9:00 a.m. Pacific Time. The agenda includes the annual election of directors. CoSine has yet to release the results of the meeting. About Cosine Communications Los Gatos, California-based CoSine Communications, Inc. (Pink Sheets:COSN.pk) was founded in 1998 as a global telecommunications equipment supplier. As of December 31, 2006, CoSine had ceased all its product and customer service related operations. CoSine's strategic plan is to redeploy its existing resources to identify and acquire, or invest in, one or more operating businesses with the potential for generating taxable income or capital gains. This strategy may allow CoSine to realize future cash flow benefits from its net operating loss carry-forwards. No candidates have been identified, and no assurance can be given that CoSine will find suitable candidates, and if it does, that it will be able to utilize its existing NOLs. CRESTRIDGE ESTATES: Dismissal or Conversion Hearing Set for May 26 ------------------------------------------------------------------ The Hon. Robert N. Kwan of the U.S. Bankruptcy Court for the Central District of California will consider at a hearing on May 26, 2010, at 10:30 a.m., the motion to dismiss or convert the Chapter 11 case of Crestridge Estates, LLC. The hearing will be held at Courtroom 5D, 411 W Fourth St., Santa Ana, California. Objections, if any, are due 14 days prior to the hearing date. The U.S. Trustee for Region 16 sought for the dismissal or conversion of the Debtor's case to one under Chapter 7 explaining that the Debtor: (i) has not complied with any of the requirements set forth in the U.S. Trustee's notice of requirements; and ii) failed to appear at its scheduled initial debtor interview. Costa Mesa, California-based Crestridge Estates, LLC, filed for Chapter 11 bankruptcy protection on March 24, 2010 (Bankr. C.D. Calif. Case No. 10-13689). The Company estimated its assets and debts at $10,000,001 to $50,000,000. The Company's affiliate, 468 Ashton LLC, filed a separate Chapter 11 petition on August 29, 2008 (Case No. 08-15323). DEAN FOODS: S&P Affirms BB- Rating & Changes Outlook to Negative ---------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Dallas- Texas based Dean Foods Co. and its wholly owned subsidiary Dean Holding Co. to negative from stable. "At the same time, we affirmed the ratings on the company, including the 'BB-' corporate credit rating. Dean Foods had about $4.2 billion of funded debt outstanding as of March 31, 2010." "The outlook revision to negative reflects our concerns about the company's near-term operating performance and the possibility for the company's leverage covenant to become very tight by fiscal year end 2010," said Standard & Poor's credit analyst Christopher Johnson. "Dean Foods' first-quarter operating performance was weaker than expected, primarily reflecting lower earnings in the company's key Fresh Dairy Direct?Morningstar business segment. This division suffered a $68 million decline in gross profits, primarily reflecting a mix shift away from higher margin branded milk sales in response to aggressive retailer price discounting of private label milk. We are concerned about the company's ability to meaningfully improve credit measures as previously anticipated if these pricing trends continue through the second half of the year. In addition, we believe the lower operating performance could pressure the company's financial covenant cushion by fiscal year end when their maximum net debt to EBITDA covenant (as defined by credit agreements) steps down to 4.5x from 5x." "The ratings on Dean Foods and its subsidiary reflect its aggressive financial profile and high debt leverage. We are concerned about recent retailer milk price discounting, and the impact that may have on the company's branded milk portfolio, in which volume declined in the first quarter. Dean benefits from its position as the leading national dairy company in the U.S., with close to a 40% market share, with a portfolio of national, regional, local, and private-label brands also with solid regional market positions. Dean Foods is the leading U.S. processor and distributor of branded dairy products with solid positions in ice cream and other dairy products, including soy and organic milk products. Dean Foods' distribution network is extensive and covers all channels, including grocery and club retailers, drug and mass merchandisers, convenience stores, and food service. The company's refrigerated direct-store delivery system (5,800 company-owned routes) or its national distribution system serve these channels. In light of the current retail pricing environment for milk, characterized by heavy retailer discounting of private label brands and consumer sentiment to trade down in a weak economy, Standard & Poor's expects that in the near term Dean Foods will accelerate its cost- savings initiatives to stem a further erosion in profitability resulting from this mix shift toward lower margin private-label product. "The negative outlook reflects our concerns about the company's operating performance and financial covenant cushion over the remainder of 2010. We would consider lowering the ratings if adjusted debt to EBITDA exceeded 5.5x and/or EBITDA cushion on its leverage covenant becomes significantly pressured. We believe this would occur if the current retail milk price discounting continues and the company does not achieve its expected cost reduction goals, resulting in a sustained depressed EBITDA margin of 6%. It is unlikely that we would consider raising the rating until the company restores profitability and ensures sufficient covenant cushion, as well as addresses its significant bank loan amortization, which begins in 2011." DELTA MUTUAL: Board OKs Employment Deals with CEO and EVP --------------------------------------------------------- Delta Mutual, Inc., disclosed that on April 26, 2010, its Board of Directors approved five-year term executive employment agreements between the Company and Dr. Daniel R. Peralta, its Chairman and Chief Executive Officer, and Malcolm W. Sherman, its Executive Vice President, effective March 22, 2010 and March 23, 2010, respectively. Dr. Peralta's Employment Agreement provides for a fixed annual salary of $500,000; Mr. Sherman's Employment Agreement provides for a fixed annual salary of $350,000. Under the Employment Agreements, both executives are eligible for participation in a bonus pool with other senior executives. For the second year of the term of each Employment Agreement the bonus will be computed with reference to increases over the corresponding quarterly profit for the year 2006, based on the quarterly reports of the Company for the year 2006; for the third year, the bonus shall be based on the financial performances detailed in the quarterly reports for the year 2007; and for the fourth year of the Employment Agreements, the bonus shall be based on the quarterly reports for the year 2008, and shall continue for the quarterly filings for the year 2009 and each subsequent year during the respective terms of each of the Employment Agreements. Such bonuses will be pooled with those of other senior executives and be computed based on a total bonus pool equal to 15% of the net profits of the Company as set forth in the Company's SEC filings. About Delta Mutual Delta Mutual, Inc., invests in oil and gas properties in South America. It intends to focus its investments in the energy sector, including development of energy producing investments and alternative energy production in Latin America and North America. At December 31, 2009, the Company had total assets of $1,750,005 against total liabilities, all current, of $1,206,826, resulting in stockholders' equity of $543,179. At December 31, 2008, the Company had stockholders' deficit of $645,912. During the fiscal year ended December 31, 2009, the Company had a gain from continuing operations of $850,000. The Company has an accumulated deficit of $3,580,837 and working capital deficiency of $967,042 as of December 31, 2009. The Company said it may require additional funding to execute its strategic business plan for 2010. In its April 15, 2010 report, Jewett, Schwartz, Wolfe & Associates in Hollywood, Florida, raised substantial doubt about the Company's ability to continue as a going concern. The auditor pointed to the Company's accumulated deficit and working capital deficiency. The auditor also said the Company is not generating sufficient cash flows to meet its regular working capital requirements. DELTA MUTUAL: Reports Sale of Shares to Private Investor -------------------------------------------------------- Delta Mutual Inc. disclosed that on April 6, 2010, 16,000 shares of the Company's common stock were sold to a private investor for $0.25 per share. Delta Mutual has filed a report disclosing sales of shares since April 27, 2009. The Company has sold shares to its consultant and to private investors. The Company did not identify the buyers. A full-text copy of the Company's report is available at no charge at http://ResearchArchives.com/t/s?6255 Separately, on May 14, 2010, Delta Mutual filed Amendment No. 1 to its Form 10-K for the year ended December 31, 2009, to amend the consolidated financial statements and Notes and Item 5 under the caption "unregistered sales of equity securities" to preserve the nature and character of the disclosures set forth in the 2009 Form 10-K as of April 15, 2010, the date on which the 2009 10-K was filed, no attempt has been made in this Amendment No. 1 to modify or update disclosures. A full-text copy of Amendment No. 1 to the Form 10-K is available at no charge at http://ResearchArchives.com/t/s?6256 About Delta Mutual Delta Mutual, Inc., invests in oil and gas properties in South America. It intends to focus its investments in the energy sector, including development of energy producing investments and alternative energy production in Latin America and North America. At December 31, 2009, the Company had total assets of $1,750,005 against total liabilities, all current, of $1,206,826, resulting in stockholders' equity of $543,179. At December 31, 2008, the Company had stockholders' deficit of $645,912. During the fiscal year ended December 31, 2009, the Company had a gain from continuing operations of $850,000. The Company has an accumulated deficit of $3,580,837 and working capital deficiency of $967,042 as of December 31, 2009. The Company said it may require additional funding to execute its strategic business plan for 2010. In its April 15, 2010 report, Jewett, Schwartz, Wolfe & Associates in Hollywood, Florida, raised substantial doubt about the Company's ability to continue as a going concern. The auditor pointed to the Company's accumulated deficit and working capital deficiency. The auditor also said the Company is not generating sufficient cash flows to meet its regular working capital requirements. DOMTAR CORP: S&P Raises Long-Term Credit Rating to BB+ ------------------------------------------------------ Standard & Poor's Ratings Services raised its long-term corporate credit rating on Domtar Corp. to 'BB+' from 'BB'. At the same time, S&P raised the issue-level ratings on Domtar's senior secured debt to 'BBB' from 'BBB-' (two notches above the corporate credit rating on the company) and senior unsecured debt to 'BB' from 'BB-' (one notch below the corporate credit rating). The recovery ratings of '1' on the senior secured debt and '5' on the senior unsecured debt are unchanged. The outlook is positive. Standard & Poor's also raised its long-term corporate credit rating on subsidiary Domtar Inc. to 'BB+' from 'BB', and its issue-level rating on the subsidiary's senior unsecured debt to 'BB' from 'BB-'. The outlook is positive. The '5' recovery rating on the senior unsecured debt is unchanged. "We base the upgrade on reduced debt, good operating performance, and management's commitment to reduce debt further," said Standard & Poor's credit analyst Jatinder Mall. "The ratings on Domtar reflect Standard & Poor's view of the company's leading market position in the North American uncoated free sheet (UFS) market and good cost profile. What we see as a steady decline in demand for UFS; and volatile prices for commodity paper and pulp products constrain the ratings." "With about 33% of industry capacity, Domtar is the largest UFS manufacturer in North America, with 3.9 million short tons of capacity and 1.9 million metric tons of pulp capacity. The majority of its paper capacity is in the U.S.; Domtar also manufactures and sells lumber. The company has a leading market share in a consolidated industry where producers are disciplined and quick to take demand related downtime rather than to chase volumes. We expect long-term UFS demand to decline due to the substitution of electronic media. To mitigate this, Domtar has been balancing production to demand and investing in its assets. It is converting its Plymouth paper mill to fluff pulp. In our opinion, the company's paper mills have good cost profiles, as they are large and modern, and have integrated pulp and cogeneration facilities. Domtar's recent closure of more than 1 million short tons of high-cost paper capacity has lowered its cost profile. The company is selling its noncore lumber business, which has generated weak profits, to Eacom Timber Corp. We expect the transaction to close by third-quarter 2010." "The positive outlook reflects Standard & Poor's expectations that Domtar will continue to generate good cash flows in 2010. We expect the company to use some of this excess cash from operations and cash from alternative fuel tax credits and asset sales to pay down debt. We also expect leverage to be about 2x by the end of 2010. We could raise the ratings if the company pays down debt and demonstrates its ability to sustain 2x leverage through the cycle. We could lower the ratings if Domtar cannot reduce debt and market conditions worsen, leading to significantly lower-than-expected EBITDA generation; and if the leverage ratio were to rise above 3x." DOWNTOWN MAITLAND: Reorganization Case Transferred to Florida ------------------------------------------------------------- The Hon. Robert E. Gerber of the U.S. Bankruptcy Court for the Southern District of New York approved the transfer of the Chapter 11 case of Downtown Maitland Property Owner, LLC to Middle District of Florida, Orlando Division. As reported in the Troubled Company Reporter on April 13, 2010, Mercantile Bank, a secured creditor, asked the Court to dismiss the Debtor's bankruptcy case explaining that the filing was done in bad faith. New York-based Downtown Maitland Property Owner, LLC, filed for Chapter 11 bankruptcy protection on March 26, 2010 (Bankr. S.D. N.Y. Case No. 10-11567). Bruce Weiner, Esq., at Rosenberg, Musso & Weiner, LLP, assists the Company in its restructuring effort. According to the schedules, the Company has assets of $12,000,000, and total debts of $9,388,000. DYNAVAX TECHNOLOGIES: March 31 Balance Sheet Upside-Down by $1.8MM ------------------------------------------------------------------ Dynavax Technologies Corp. filed its quarterly report on Form 10-Q, showing a net loss attributable to Dynavax of $9.2 million on $8.3 million of revenue for the three months ended March 31, 2010, compared with net income attributable to Dynavax of $5.1 million on $19.3 million of revenue for the same period of 2009. The Company's balance sheet as of March 31, 2010, showed $44.3 million in assets and $46.1 million of liabilities, for a stockholders' deficit of $1.8 million. As reported in the Troubled Company Reporter on March 18, 2010, Ernst & Young LLP, in San Francisco, Calif., in its report on the Company's financial statements for the year ended December 31, 2009, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has incurred significant operating losses and negative cash flows from operations since its inception. A full-text copy of the quarterly report is available for free at: http://researcharchives.com/t/s?6243 Berkeley, Calif.-based Dynavax Technologies Corporation, a clinical-stage biopharmaceutical company, discovers and develops novel products to prevent and treat infectious diseases, asthma and inflammatory and autoimmune diseases. The Company's lead product candidate is HEPLISAVTM, a Phase 3 investigational adult hepatitis B vaccine designed to enhance protection more rapidly and with fewer doses than current licensed vaccines. EPICEPT CORP: Reports $4,508,000 Net Loss for March 31 Quarter -------------------------------------------------------------- EpiCept Corporation reported a net loss of $4,508,000 for the three months ended March 31, 2010, from a net loss of $22,487,000 for the same period in 2009. Revenue was $167,000 for the three months ended March 31, 2010, from $115,000 for the 2009 first quarter. At March 31, 2010, the Company had total assets of $6,300,000, against total liabilities of $19,042,000, resulting in stockholders' deficit of $12,742,000. In a press statement, Jack Talley, president and chief executive officer of EpiCept, said "Most recently, EpiCept achieved a milestone we have been working towards for many years, namely the full commercial launch of Ceplene(R) in a major market. Mr. Talley continued, "With the launch by our partner Meda AB, we have provided hope to people in Europe with Acute Myeloid Leukemia in first remission. We are excited to be able to play a part in helping these patients. We are looking forward to progressing our application along the regulatory pathways in Canada and the United States, with the goal of expanding the number of patients who can receive this very important therapy." A full-text copy of the Company's earnings release is available at no charge at http://ResearchArchives.com/t/s?625c In its March 2010 Form 10-Q report, the Company said it has devoted substantially all of its cash resources to research and development programs and general and administrative expenses, and to date it has not generated any meaningful revenues from the sale of products. Since inception, the Company has incurred significant net losses each year. As a result, the Company has an accumulated deficit of $239.6 million as of March 31, 2010. The Company's recurring losses from operations and the accumulated deficit raise substantial doubt about its ability to continue as a going concern. A full-text copy of the Company's Form 10-Q report is available at no charge at http://ResearchArchives.com/t/s?625b In the Company's 2009 Annual Report, Deloitte & Touche LLP in Parsippany, New Jersey, expressed substantial doubt against Epicept Corporation's ability as a going concern. The firm noted that the Company has recurring losses from operations and stockholders' deficit. About EpiCept Tarrytown, N.Y.-based EpiCept Corporation is a specialty pharmaceutical company focused on the clinical development and commercialization of pharmaceutical products for the treatment of cancer and pain. The Company's lead product is Ceplene(R), which when used concomitantly with low-dose interleukin-2 is intended as remission maintenance therapy in the treatment of acute myeloid leukemia, or AML, for adult patients who are in their first complete remission. EPICEPT CORP: Annual Stockholders' Meeting Set for June 3 --------------------------------------------------------- The 2010 Annual Meeting of Stockholders of Epicept Corporation will be held at 10:00 AM on June 3, 2010, at the Dolce/IBM Palisades Executive Conference Center, 334 Route 9W, in Palisades, New York, for these purposes: 1. the election of two directors as Class II directors to hold office until the 2013 Annual Meeting and until their respective successors are elected and qualified; 2. the ratification of the selection by the Audit Committee of the Company's Board of Directors of Deloitte & Touche LLP as the independent registered public accounting firm for the year ending December 31, 2010; and 3. such other business as may properly come before the Annual Meeting or any adjournment thereof. Stockholders of record at the close of business on April 19, 2010, are entitled to vote at the Annual Meeting. A full-text copy of the Company's proxy statement is available at no charge at http://ResearchArchives.com/t/s?625d About EpiCept Tarrytown, N.Y.-based EpiCept Corporation is a specialty pharmaceutical company focused on the clinical development and commercialization of pharmaceutical products for the treatment of cancer and pain. The Company's lead product is Ceplene(R), which when used concomitantly with low-dose interleukin-2 is intended as remission maintenance therapy in the treatment of acute myeloid leukemia, or AML, for adult patients who are in their first complete remission. At March 31, 2010, the Company had total assets of $6,300,000, against total liabilities of $19,042,000, resulting in stockholders' deficit of $12,742,000. In its March 2010 Form 10-Q report, the Company said it has devoted substantially all of its cash resources to research and development programs and general and administrative expenses, and to date it has not generated any meaningful revenues from the sale of products. Since inception, the Company has incurred significant net losses each year. As a result, the Company has an accumulated deficit of $239.6 million as of March 31, 2010. The Company's recurring losses from operations and the accumulated deficit raise substantial doubt about its ability to continue as a going concern. In the Company's 2009 Annual Report, Deloitte & Touche LLP in Parsippany, New Jersey, expressed substantial doubt against Epicept Corporation's ability as a going concern. The firm noted that the Company has recurring losses from operations and stockholders' deficit. EPIX PHARMACEUTICALS: To Hold Shareholders Meeting on June 23 ------------------------------------------------------------- Epiq Systems, Inc. will host its 2010 Annual Meeting of Shareholders on Wednesday, June 23, 2010. The meeting is scheduled to start at 10:00 a.m. central time and will take place at the Westin Crown Center Hotel, 1 East Pershing Road, Kansas City, Missouri, 64108. The meeting will also be broadcast over the Internet. To access the broadcast, click on the link located on the home page of http://www.epiqsystems.com/ EPIX Pharmaceuticals, Inc., is a biopharmaceutical company focused on discovering and developing novel therapeutics through the use of its proprietary and highly efficient in silico drug discovery platform. The company has a pipeline of internally-discovered drug candidates currently in clinical development to treat diseases of the central nervous system -- see http://www.trialforAD.com/-- and lung conditions. EPIX also has collaborations with leading organizations, including GlaxoSmithKline, Amgen and Cystic Fibrosis Foundation Therapeutics. * * * As reported by the Troubled Company Reporter, EPIX on July 20, 2009, entered into an Assignment for the Benefit of Creditors in accordance with Massachusetts law. The purpose of the Assignment is to conclude the company's operations and provide for an orderly liquidation of its assets. The Assignment is a common law business liquidation mechanism under Massachusetts law that is an alternative to a formal bankruptcy proceeding. Under the terms of the Assignment, the Company transferred all of its assets to an assignee for orderly liquidation and distribution of the proceeds to the Company's creditors. The designated assignee for the company is Joseph F. Finn, Jr., at Finn, Warnke & Gayton, 167 Worcester Street, Suite 201, Wellesley Hills, MA 02481. EPIX PHARMACEUTICALS: Posts Additional Info on Auction Sale ----------------------------------------------------------- Joseph F. Finn, Jr., C.P.A., Assignee for the Benefit of Creditors of Epix Pharmaceuticals, Inc., disclosed that the MRI imaging intellectual properties of the EP-3600 MRI imaging agent, which will be auctioned on May 28, 2010, include potential royalties of 2% each from the development and commercialization of three additional programs related to MRI imaging agents and/or technologies. There is also a fourth program related to one MRI imaging agent with a potential royalty of 4-6% from the development and commercialization with a buy-up option to increase royalties up to 15-17%. Furthermore, the purchase of EP-3600 also includes the rights to develop and commercialize collagen binding therapeutics using the same proprietary technology that resulted in the discovery of EP-3600. Collagen binding therapeutics could be targeted toward the treatment of debilitating diseases such as scleroderma. The assets of Epix were transferred to him on July 20, 2009 and he is liquidating them for the benefit of Epix creditors. He recently reached an agreement with Bayer Schering Pharma that permits the sale of the MRI imaging programs. EP-3600 and related analogs are gadolinium-based MRI imaging agents with a potential indication for myocardial perfusion imaging. These lead compounds represent first-in-class collagen binding agents that are currently in preclinical development. Persons interested in bidding must sign a Confidentiality Disclosure Agreement ("CDA") obtained from Finn's Office - IPSALESERVICES@FINNWARNKEGAYTON.COM or 781-237-8840. They will then receive a bid package and access to an electronic data room. About Joseph F. Finn, Jr., C.P.A. Joseph F. Finn, Jr., C.P.A. is the owner of the firm Finn, Warnke & Gayton, Certified Public Accountants of Wellesley Hills, Massachusetts. He works primarily in the area of management consulting for distressed enterprises, bankruptcy accounting and related matters, such as assignee for the benefit of creditors and liquidating agent for a corporation. He has been involved in a number of loan workouts and bankruptcy cases for thirty-five (35) years. His most recent Assignments for the Benefit of Creditors in the biotech field include Spherics, Inc., ActivBiotics, Inc. and Prospect Therapeutics, Inc. About EPIX Pharmaceuticals EPIX Pharmaceuticals, Inc., is a biopharmaceutical company focused on discovering and developing novel therapeutics through the use of its proprietary and highly efficient in silico drug discovery platform. The company has a pipeline of internally-discovered drug candidates currently in clinical development to treat diseases of the central nervous system -- see http://www.trialforAD.com/-- and lung conditions. EPIX also has collaborations with leading organizations, including GlaxoSmithKline, Amgen and Cystic Fibrosis Foundation Therapeutics. * * * As reported by the Troubled Company Reporter, EPIX on July 20, 2009, entered into an Assignment for the Benefit of Creditors in accordance with Massachusetts law. The purpose of the Assignment is to conclude the company's operations and provide for an orderly liquidation of its assets. The Assignment is a common law business liquidation mechanism under Massachusetts law that is an alternative to a formal bankruptcy proceeding. Under the terms of the Assignment, the Company transferred all of its assets to an assignee for orderly liquidation and distribution of the proceeds to the Company's creditors. The designated assignee for the company is Joseph F. Finn, Jr., at Finn, Warnke & Gayton, 167 Worcester Street, Suite 201, Wellesley Hills, MA 02481. EXTENDED STAY: Bank of America Objects to Plan ---------------------------------------------- Bank of America N.A. asks the U.S. Bankruptcy Court for the Southern District of New York to deny confirmation of the Debtors' Fourth Amended Chapter 11 Plan of Reorganization. BofA argues that the Fourth Amended Plan impairs its Class 3 secured claim and thus, is not confirmable. BofA points out that this contravenes the "fair and equitable" requirement for a cramdown confirmation of a plan over a dissenting class of creditors. BofA's attorney, Boris Mankovetskiy, Esq., at Sills Cummis & Gross PC, in Newark, New Jersey, -- bmankovetskiy@sillscummis.com -- notes that the Fourth Amended Plan proposes to pay BofA's Class 3 secured claim in the sum of $8.5 million through the issuance of a new mortgage note in the sum of only $5 million. Mr. Mankovetskiy argues that BofA is entitled under the bankruptcy laws to the full value of its secured claim. BofA's claim stemmed from the loan it provided to UD Properties, one of the Debtors, under a February 14, 2008 agreement. 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: Plan Exclusivity Extended Until Sept. 16 ------------------------------------------------------- Bankruptcy Judge James Peck extended through September 16, 2010, the exclusive deadline by which Extended Stay Inc. and its debtor affiliates may file a Chapter 11 plan and solicit votes for that plan. The exclusivity extension prohibits creditors from proposing rival restructuring plans in the Debtors' cases. 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: U.S. Trustee Objects to $9MM in Professional Fees ---------------------------------------------------------------- Diana Adams, the United States Trustee for Region 2, opposes the allowance of the interim fee applications of the bankruptcy examiner, members of the Official Committee of Unsecured Creditors and other professionals retained in the Chapter 11 cases of Extended Stay Inc. and its debtor affiliates. Paul Schwartzberg, the U.S. Trustee's attorney, asserts that the allowance of the full amount of fees requested on the basis of overall case results would be premature given that the Debtors' plan of reorganization has not yet been confirmed and the outcome of their cases has not yet been resolved. "The full payment of the interim fees to the applicants at this time . . . would be inappropriate," Mr. Schwartzberg says. For these reasons, the U.S. Trustee asks Judge Peck to impose a percentage fee reduction. The interim fee applications seek the allowance of $8,772,339 in total fees and $305,743 in expenses for the period from Nov. 1, 2009 to Feb. 28, 2010. The fee applicants include Weil Gotshal & Manges LLP, Lazard Freres & Co. LLC, Covington & Burling LLC, PKF Consulting, Hahn & Hessen LLP, Jefferies & Company Inc., Jones Land LaSalle Hotels, Ernst & Young LLP, Stutman Treister & Glatt, Alvarez & Marsal Dispute Analysis Forensic Services, members of the Creditors Committee and Ralph Mabey, the court-appointed examiner. 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). FAYETTEVILLE MARKETFAIR: Cash Collateral Hearing Set for May 24 --------------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of North Carolina has continued until May 24, 2010, at 2:00 p.m., the hearing on Fayetteville Marketfair Investors, LLC's continued access to the cash collateral of Capmark Finance Inc. The hearing will be held at Room 101, 1760 A Parkwood Blvd., Wilson, North Carolina. As reported by the TCR on January 12, 2010, the Court, in an interim order, authorized the Debtor to use cash securing its obligations to prepetition lenders to fund the Debtor's Chapter 11 case, pay suppliers and other parties. The Debtor will continue to collect rents, and tenants of the real property are directed and authorized to pay rent to the Debtor. The Debtor is authorized to: a. make payment of interest, as adequate protection for use of the cash collateral; b. make payment of all Capmark's reasonable attorneys' fees upon the submission of invoices detailing fees and expenses on not less than 10 days notice, with an opportunity to review, to the Debtor, counsel to the Debtor, counsel to the Committee and the Bankruptcy Administrator: (i) for the period prior to the Petition Date through the date the Final Cash Collateral Order is approved, payable within 10 days after receipt of invoices detailing fees and expenses, provided that no objection to payment of the fees is raised; and (ii) for the period after the date the Final Cash Collateral Order is entered, payable on the 20th day of each month following the submission of each monthly invoice detailing fees and expenses, provided that no objection to payment is raised; and c. to transfer, convey, grant and assign to Capmark as replacement liens for the Prepetition Liens, liens (collectively, the "Postpetition Liens") upon and security interests in the Postpetition Cash Collateral, unless a court of competent jurisdiction were to determine that the Prepetition Liens are invalid, unenforeceable and/or should be avoided and to the extent Cash Collateral is used. The Postpetition Liens will be senior, first- priority, validly perfected liens, subordinate only to payment of fees to the Bankruptcy Administrator. The Debtor will continue to provide to Capmark with information, statements and reports concerning its financial condition and its assets as are required to be furnished under the loan documents or at the reasonable request of Capmark. About Fayetteville Marketfair Investors, LLC Miami, Florida-based Fayetteville Marketfair Investors, LLC, filed for Chapter 11 on Dec. 14, 2009 (Bankr. E.D. N.C. Case No. 09- 10859). William P. Janvier, Esq., at Everett Gaskins Hancock & Stevens, 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. FAYETTEVILLE MARKETFAIR: Plan Confirmation Hearing Set for June 29 ------------------------------------------------------------------ The Hon. Randy D. Doub of the U.S. Bankruptcy Court for the Eastern District of North Carolina conditionally approved the Disclosure Statement explaining Fayetteville Marketfair Investors, LLC's Chapter 11 Plan. The Court will consider the confirmation of the Debtor's Chapter 11 Plan on June 29, 2010, at 2:00 p.m. at Room 101, 1760 A Parkwood Blvd., Wilson, North Carolina. Objections, if any, are due on June 22, 2010. Ballots are also due on June 22. According to the Disclosure Statement, the Plan provides that the Debtor will continue to operate and use the profits to fund its Plan. Under the Plan: * allowed secured claims of Capmark Finance, Inc. will have its full allowed secured claim. * Allowed unsecured deficiency claim of Capmark Finance, Inc. will be paid $3,000 per month for 120 months. * Holders of allowed small unsecured claims of $6,000 or less will be paid 80% of their allowed claims within 120 days after the effective date. * Holders of other allowed general unsecured claims will be paid $3,000 per month for 120 months. * Holders of equity interests -- BDPB Fayetteville, Gulfside FV LLC, Stephan Johansson and Jackson Ward -- will pay the Debtor $5,000 each to retain or repurchase their membership interests in the Debtor. A full-text copy of the Disclosure Statement is available for free at http://bankrupt.com/misc/FayettevilleMarketfair_DS.pdf The Debtor is represented by: William P. Janvier Everett, Gaskins, Hancock & Stevens, LLP P.O. Box 911 Raleigh, NC 27602-0911 Tel: (919) 755-0025 About Fayetteville Marketfair Miami, Florida-based Fayetteville Marketfair Investors, LLC, filed for Chapter 11 on Dec. 14, 2009 (Bankr. E.D. N.C. Case No. 09- 10859). William P. Janvier, Esq., at Everett Gaskins Hancock & Stevens, 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. FIRST NATIONAL: March 31 Balance Sheet Upside-Down by $8.9 Million ------------------------------------------------------------------ First National Bancshares, Inc. filed its quarterly report on Form 10-Q, showing a net loss of $5.4 million on $2.6 million of net interest income for the three months ended March 31, 2010, compared with a net loss of $1.4 million on $4.1 million of net interest income for the same period of 2009. The Company's balance sheet as of March 31, 2010, showed $676.1 million in assets and $685.0 million of liabilities, for a stockholders' deficit of $8.9 million. As reported in the Troubled Company Reporter on March 12, 2010, Elliott Davis LLC has expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that of the Company's significant losses in 2009 and 2008 and the increase in the Company's nonperforming assets. Additionally, the Company's subsidiary bank is significantly undercapitalized under regulatory capital guidelines and during 2009, the subsidiary bank entered into a consent order regulatory enforcement action with its primary regulator, the Office of the Comptroller of the Currency. "The uncertainty of the Company's ability to replenish its capital raises 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?6246 Spartanburg, S.C.-based First National Bancshares, Inc. was organized in 1999 to serve as the holding company for First National Bank of the South. The Company operates a network of full-service branches in select markets across the state of South Carolina. The Company's assets consist primarily of its investment in the Bank, and its primary activities are conducted through the Bank. As of March 31, 2019, the Company's consolidated total assets were $676.1 million, its consolidated total loans were $483.9 million, and its consolidated total deposits were $605.4 million. GENERAL GROWTH: Bidding Protocol for Equity Investments Approved ---------------------------------------------------------------- Judge Allan L. Gropper of the U.S. Bankruptcy Court for the Southern District of New York approved the bidding procedures and issuance of warrants to serve as compensation for the financial commitments to be provided pursuant to a revised $6.55 billion equity investment and $2 billion capital backstop offer from Brookfield Asset Management, Inc.'s affiliate, REP Investments LLC, an affiliate of Brookfield Asset Management Inc., Fairholme Capital Management, LLC, and Pershing Square Capital Management, L.P., for the assets of General Growth Properties, Inc. Latest BFP Proposal Before entry of the bidding procedures order, Thomas H. Nolan, Jr., president and chief operating officer of GGP, testified before the Court in support of the Bidding Procedures Motion. Mr. Nolan reminded the Court that GGP received a revised BFP Proposal on May 3, 2010. He disclosed that on the same day and on May 7, 2010, certain changes have been made into the Revised BFP Proposal. Simon Property Group, Inc., also submitted its "final and best" offer on May 6, 2010. Specifically, the Latest BFP Proposal: (a) provides equity commitments totaling $7 billion, an increase of $500 million over the original commitments; (b) modifies the closing conditions to provide GGP with greater certainty that the transaction will close by lowering the minimum liquidity target to $350 million from the original minimum of $500 million, increasing the maximum consolidated debt cap to $22.25 billion from $22.1, and increasing the share cap to 1.120 billion; (c) provides a full backstop of the $2.0 billion of additional capital to be raised from third parties; (d) establishes a backstop for a loan of $1.5 billion, with no amortization for three years and at market interest rates and fees. This $1.5 billion loan backstop, along with a backstop for additional equity of $500 million, eliminates any perceived risk that the Debtors would not be able to secure all capital necessary to emerge from Chapter 11, Mr. Nolan related; (e) eliminates an "Essential Assets" clause in General Growth Opportunities or GGO conditions, thus providing the company with greater flexibility in accomplishing the GGO spin off; (f) provides the insurance that GGP will have 100% of the capital it needs to emerge from Chapter 11, while still affording the company the flexibility to pursue cheaper capital or a better transaction, thus maximizing and protecting shareholder value; and (g) encourages bidding by setting an important bidding floor. The benefit of a bidding floor has already been evidenced in this case -- after GGP announced the Original BFP Proposal, Simon increased its GGP Mall Co. per share price from $6 to $15. Mr. Nolan further disclosed that the terms of the warrants have been revised to reduce their cost both before and after emergence from Chapter 11. Pershing has agreed to eliminate its interim warrants entirely. Brookfield and Fairholme have also agreed that the warrants will vest over time so that only 40% of the warrants vest upon approval by the Court, an additional 20% will vest on July 12, 2010, and the remaining 40% vests in periodic installments commencing July 13, 2010, and continuing through the end of the commitment period. Upon termination of the Latest BFP Proposal, no further warrants would vest. These changes lower the total value of the warrants and will afford General Growth significantly increased flexibility in its continued efforts to further improve on the emergence transaction without triggering the full cost of the remaining warrants, he explained. The Latest BFP Proposal also increases the strike price of the post-emergence GGP warrants from $10 per share to $10.50 for Fairholme and Pershing and $10.75 for Brookfield, he added. Mr. Nolan also related that the Latest BFP Proposal includes an agreement that Brookfield will enter into a strategic relationship agreement to use GGP as its primary platform for any regional mall opportunities it or one of its affiliates pursues in North America, and will seek to provide global opportunities through Brookfield's institutional relationships. He added that the Official Committee of Equity Security Holders supports the Latest BFP Proposal. Mr. Nolan informed the Court that GGP's board of directors determined that the Latest BFP Proposal, even with the cost of the warrants, and a per share price of $10 for GGP Mall Co. versus an $11 backstop investment bid proposed by Simon, represents a better option for maximizing long-term shareholder recoveries and enterprise value than the Simon Proposal. The Board found that the risks and uncertainties associated with the Simon Proposal and the potential long-term shareholder value of the Latest BFP Proposal outweigh the potential dilutive effects of the Warrants, he said. Among others, the Board believes that Simon would face a tension between being GGP's largest shareholder and the fiduciary duties that Simon's board and management owe to its own shareholders, he related. Despite that decision, he said GGP is prepared to continue to negotiate with Simon on its Proposal and believes that the issuance of the warrants should not preclude that negotiation. In contrast, Mr. Nolan pointed out that Brookfield, Fairholme and Pershing's interests as majority investors in GGP would be wholly aligned with the company to maximize shareholder value. "Those three parties would thus actively work to increase enterprise value, a prime example of which is the strategic relationship agreement in the Latest BFP Proposal that will provide General Growth with valuable corporate opportunities. Simon would not, and could not, enter into any such strategic relationship with its largest competitor," he stated. Mr. Nolan maintained that the warrants are reasonable consideration for the value that GGP will receive from the Latest BFP Proposal and the significant financial commitment that Brookfield, Fairholme and Pershing are making. He disclosed that the interim warrants with 40% vested upon approval by the Court are valued at about $315 million, assuming a change of control transaction valued at $20.00 per share and 20% volatility. Assuming 100% vested following the nine-month commitment period, under the same per share price and volatility, GGP values the interim warrants at approximately $688 million. Mr. Nolan also stated that GGP's agreement to indemnify Brookfield in exchange for the assistance to be provided by Brookfield is reasonable. Other Rulings Judge Gropper found that the Bidding Procedures, including reimbursement of expenses incurred by a bidder in accordance with the Bidding Procedures, are fair, reasonable, and appropriate and are designed to maximize the value GGP may realize through a competitive process for the benefit of all stakeholders. Judge Gropper also averred that GGP has demonstrated sound business justifications for authorization to enter into the Investment Agreements with REP, Fairholme, and Pershing, and for approval to execute, deliver and perform under the warrant agreement, as amended on May 3, 2010, and the Warrants. Judge Gropper said those business justifications include: (i) the establishment of a "floor" price for the value of the equity of GGP for the benefit of all stakeholders while preserving the ability to capture the benefit of increasing equity value in the future; (ii) long-term commitments of capital providing liquidity necessary to emerge from Chapter 11 in a manner intended to permit satisfaction of all unsecured creditors in full and provide a substantial recovery for shareholders; (iii) the preservation of flexibility to cancel some or all of the commitments under the Investment Agreements and to maximize equity value by replacing part of the committed capital with financing from more favorable sources; and (iv) the lengthy nature of the commitments to purchase $6.55 billion of publicly-listed stock at a fixed price and a $2 billion capital backstop. Judge Gropper also held that GGP, assisted by qualified professional advisors, has conducted a competitive process to identify alternative sources of equity capital commitments for a plan of reorganization, as well as explored strategic opportunities, which process will continue. Judge Gropper noted that the Warrant Agreement and the Warrants issued to each Commitment Party are bargained-for and integral parts of the agreement between GGP and the Commitment Party. If the Warrants are not approved by the Court and issued as provided in the Warrant Agreements, each Commitment Party will have the right to terminate its obligations under the applicable Investment Agreement. Plan Confirmation Schedule Pursuant to the Bidding Procedures Order, GGP will conduct a second round process in this timeframe: June 2, 2010 * Deadline to submit Final Proposals -- solid fully financed, binding offers with proposed final documentation. July 2, 2010 * GGP intends to select the Final Proposal it intends to consummate. GGP, in consultation with the entity or entities, which submitted the successful proposal will file a plan and related disclosure statement on or around July 2, 2010. July 30, 2010 * Hearing on the Disclosure Statement. August 6, 2010 * GGP will commence solicitation of the Plan. September 17, 2010 * Confirmation objection deadline. September 30, 2010 * Confirmation Hearing. GGP will (i) provide notice to the advisors to the Official Committee of Unsecured Creditors and the Equity Committee of any material change to the Bidding Procedures without delay and (ii) will advise the Creditors and Equity Committees' Advisors of the identities of any bidders whom GGP determines to exclude from the process contemplated in the Bidding Procedures. Judge Gropper also authorized GGP to reimburse expenses incurred by any bidder in accordance with the Bidding Procedures up to $1 million per bidder. However, Judge Gropper said (i) in no event will GGP reimburse more than an aggregate of $10 million for those expenses and (ii) GGP will provide notice to the Creditors and Equity Committee Advisors of any bidder who receives or is denied expense reimbursement. GGP will endeavor to provide the Creditors' and Equity Committee Advisors (i) copies of all term sheets and final bids, received pursuant to the Bidding Procedures within two business days after receipt by the company; and (ii) drafts of the related plan of reorganization and disclosure statement related at least three business days in advance of filing. GGP will consult with the Creditors' and Equity Committee Advisors (i) at least 24 hours before selection of the proposed transactions, if any, that the company intends to consummate at the conclusion of the second round process and (ii) at least three business days before filing of a related plan of reorganization and disclosure statement. Upon issuance of the Warrants to any Commitment Party, that Commitment Party will be fully and irrevocably vested with all right, title and interest in the Warrants free and clear of any adverse claim or interest. All amounts payable by GGP under the REP Investment Agreement will constitute allowed administrative expenses of General Growth under Sections 503(b) and 507(a)(2) of the Bankruptcy Code, Judge Gropper ruled. All Objections to the Bidding Procedures Motion or the relief requested therein that have not been withdrawn, waived, settled, or specifically addressed in this order, and all reservations of rights included in those objections, are overruled in all respects on the merits, Judge Gropper averred. A full-text copy of the Approved Bidding Procedures is available for free at: http://bankrupt.com/misc/ggp_ApprovdBiddingProcedures.pdf Before entry of the Bidding Procedures Order, Elliott Management Corp. withdrew its objection to the Bidding Procedures Motion. Debtors' Statement "After careful consideration, the Board of Directors agreed that the revised proposal from this investment group represents the best initial sponsor proposal to foster a process that maximizes the enterprise value of GGP," said Adam Metz, Chief Executive Officer of GGP. "This proposal serves as an insurance policy for GGP by providing the Company with the capital it requires to emerge from bankruptcy, while at the same time allowing GGP to continue soliciting higher and better financing and strategic offers pursuant to the bid procedures approved by the Bankruptcy Court." "We are pleased that the Court has approved the bidding procedures and warrants associated with the enhanced investment proposal from Brookfield, Pershing Square and Fairholme, which we expect will lead to a process that maximizes value for our stakeholders," said Thomas H. Nolan, Jr., President and Chief Operating Officer of GGP. "As majority investors in GGP, Brookfield, Fairholme and Pershing's interests would be wholly aligned with the Company to maximize shareholder value. We expect those three parties to actively work to increase enterprise value, as evidenced by the exciting strategic relationship agreement in the new Brookfield- led proposal that will provide General Growth with valuable corporate opportunities. This proposal provides the best opportunity to maximize current and future stockholder value while, at the same time, protecting the Company and its creditors on the downside." Simon's May 6 Offer Before entry of the Bidding Procedures Order, Simon said it has made its best and final offer to acquire GGP in a fully financed transaction valued at $6.5 billion, or $20.00 per GGP share, consisting of $5.00 in cash, $10.00 in shares of SPG common stock, at its current value, and the distribution to GGP shareholders of shares in GGO, valued by GGP at $5.00 per share, according to a public statement dated May 6, 2010. At $20.00 per share, Simon's offer values GGP's equity at $6.5 billion in the aggregate and represents additional value of $2.6 billion, or a 66% premium, to Brookfield Asset Management, Inc., Pershing Square Capital Management and Fairholme Funds- sponsored change of control recapitalization plan, which offers GGP shareholders an aggregate value of $3.9 billion. The acquisition would also include full cash recovery for unsecured creditors. SPG has also improved its previously submitted proposal to sponsor a GGP recapitalization by increasing the price per newly issued GGP share to $11.00. This change in the per share investment price would also apply to an SPG-sponsored recapitalization to the extent it is effected as a backstop of SPG's proposed acquisition of GGP. Both of SPG's proposals would provide substantially more value for GGP's equityholders than the change of control recapitalization proposed by Brookfield, over and above the elimination of the highly dilutive and expensive warrants attached to the Brookfield plan. SPG will not participate in the bidding process in the GGP bankruptcy proceeding in any way once GGP issues warrants associated with the latest Brookfield-sponsored change of control recapitalization. A full-text of SPG's May 6, 2010 offer letter to GGP: May 6, 2010 Board of Directors General Growth Properties, Inc. 110 North Wacker Drive Chicago, Illinois 60606 Ladies and Gentlemen: This letter will formally confirm our improved proposals for an acquisition or recapitalization of General Growth Properties ("GGP"). As detailed below, both alternatives offer immediate, tangible and superior value when compared to the Brookfield-sponsored plan and deserve your full consideration. We look forward to engaging seriously and immediately with you and your advisors and counsel so that we can effectuate a transaction that is clearly in the best interests of your shareholders. SPG is prepared to acquire GGP for $20.00 per share, consisting of $5.00 in cash and $10.00 in SPG shares at their current value, and the distribution to GGP shareholders shares of General Growth Opportunities (GGO), which you have valued at $5.00 per share. The acquisition would also include the same full cash recovery for unsecured creditors as in our recapitalization proposal and provide substantially more value for equityholders. As an alternative, we are also prepared to sponsor the equity recapitalization of GGP, which would replace the Brookfield change of control recapitalization, based on an improved investment price of $11.00 per share, but without issuing any expensive and dilutive warrants. SPG's recapitalization proposal would result in significantly higher value and greater ownership of GGP for its existing shareholders than the Brookfield alternative. These offers are best and final. SPG will not participate In the bidding process in the GGP bankruptcy proceeding in Any way once GGP commits to issue the warrants associated With the latest Brookfield-sponsored plan. SPG's Acquisition Proposal At $20.00 per share, SPG's revised acquisition proposal is more than two times the $9.40 market price of GGP's stock on February 12, 2010, the last trading day before SPG publicly disclosed its initial acquisition proposal. Because, as you know, the current market price reflects the expectation of an SPG transaction, GGP's unaffected stock price is the relevant basis for comparison. However, even using GGP's affected closing stock price of $16.57 on May 5, 2010, our proposal represents a premium of approximately 21%, which is substantially higher than the historical average change of control premium for REIT acquisition transactions. SPG's offer values GGP's equity at $6.5 billion in the aggregate. This compares with an aggregate value of $3.9 billion to current GGP shareholders based on their residual ownership interest following issuance of additional shares and dilutive warrants to the Brookfield group. This tremendous disparity in immediate value cannot be ignored -- whereas SPG would acquire GGP at a premium, the Brookfield plan would sell 75% of GGP and effective control of your company to the Brookfield group at a price below GGP's current market and net asset value. In this context, it is ironic that yesterday Brookfield management publicly accused SPG of not offering fair market value when the Brookfield- led plan offers significantly less and refuses to give up its lucrative warrants, while gaining effective control of the company for its consortium. It is highly unlikely that a recapitalized GGP under the Brookfield-sponsored change of control plan could achieve a $15.00 valuation, especially in light of the dilution that would occur should GGP issue a majority of its stock to the Brookfield consortium. Even if you were to apply SPG's industry-leading implied cap rate to the recapitalized GGP, GGP would still only be valued at approximately $12.50 per share. We do not believe GGP would trade even at this level for several reasons: * GGP would remain highly leveraged. * GGP would face a significant overhang of stock owned by non-long term holders who have no lockups, creating downward pressure on share price. * The proposed warrants and the subscription rights in favor of the Brookfield consortium will impede future attempts to raise capital. * GGP would be unable pay a material cash dividend upon emergence. In contrast, SPG's strong track record of successfully completing large acquisitions, our history of delivering superior property-level performance and the ability to generate substantial operational synergies ideally position SPG to create the most value with GGP's portfolio. Because GGP shareholders would receive a significant portion of their consideration in SPG shares, they would have much higher upside potential through an SPG-GGP combination, considering that: * SPG has the highest credit rating of any publicly traded real estate company and a lower cost of capital. * SPG has a strong balance sheet and substantial flexibility through unrivaled access to capital markets. * SPG has a sector-leading management team with an established track record. * SPG pays a substantial cash dividend. As part of our acquisition, Blackstone Real Estate Advisors, a world leader in private equity real estate investment with $25 billion of capital invested in real estate worldwide and $11 billion in available capital for future real estate investments, has committed to join our proposed acquisition of GGP. However, the proposed transaction would be effected pursuant to an agreement between GGP and SPG, and no default or failure by Blackstone or any other contemplated financing source would itself excuse performance by Simon of its obligation to acquire GGP. You have raised regulatory concerns both publicly and privately, which we believe are misplaced due to the highly fragmented nature of the retail real estate industry. Nonetheless, in the event any governmental challenge to the transaction were to arise, SPG has expressed its willingness, among other things, to sell, hold-separate or otherwise dispose of a sufficient number of SPG and/or GGP assets to address those concerns. In addition, as detailed below, in the highly unlikely event that an acquisition could not be consummated, SPG would remain committed to sponsor a recapitalization as detailed below, and including the regulatory fail safes in a recapitalization that we have proposed. In sum, our offer delivers full value to GGP with no execution risk and provides GGP shareholders with more value than GGP can realistically expect to achieve with the Brookfield group. SPG's Recapitalization Proposal SPG is also willing to proceed with the recapitalization transaction we have previously proposed in order to give the board added certainty and an avenue to provide GGP shareholders with superior value without the issuance of expensive and dilutive warrants. SPG is now prepared to amend its previously submitted proposal to sponsor a recapitalization of GGP by increasing the price per share to be paid by SPG for newly issued GGP shares in the recapitalization to $11.00 per share. Specifically, SPG would acquire 227,272,727 shares of common stock in GGP for $2.5 billion in the aggregate, or $11.00 per share. This change in the per share investment price would also apply to an SPG-sponsored recapitalization in the event it is effected as a backstop of our proposed acquisition of GGP, as described in our May 2 letter. Our $11.00 per share value is significantly superior to the Brookfield-sponsored proposal, especially when the elimination of the warrants is taken into account. Under the SPG recapitalization proposal, existing GGP shareholders would benefit by owning a greater share of GGP that they would after a Brookfield-led recapitalization, and having a more liquid security upon emergence. The purely hypothetical concerns that you have expressed regarding the potential negative consequences of Simon's presence as a shareholder of GGP are misplaced. Given SPG's long track record of successful real estate partnerships, SPG's sponsorship will benefit -- rather than harm -- GGP and its public stockholders. Nonetheless, to allay these concerns, SPG has agreed to numerous requested concessions, including: capping our voting rights at 10%; reducing the number of board nominees to two; appointing only independent directors who would also be subject to information firewalls; not acquiring any incremental shares of GGP after closing without the consent of the independent members of the GGP board; having any acquisition proposal be subject to approval by the independent members of the GGP board and a majority of the non-SPG shareholders who vote on the matter; and giving GGP the right to purchase all of SPG's shares of GGP three years after closing. In contrast to our proposal, which provides substantial protection of ongoing GGP public shareholders, in the Brookfield transaction there is no contractual or legal impediment for the Brookfield group to increase their collective ownership to 100%, including by creeping market acquisitions to squeeze out the remaining public shareholders without having to pay a control premium. Both SPG Proposals Are Superior in Every Way We believe you would be shortchanging your shareholders by supporting the insider Brookfield-Pershing Square-Fairholme transaction, by which 75% of GGP's post-recapitalization equity would be owned by these three fund managers, transferring effective control of the company to this consortium which has no significant retail real estate experience, creating a substantial overhang with respect to GGP's stock, and at a price not available to existing GGP shareholders or other investors. We stand ready to enter into definitive transaction documents before the hearing to approve the Brookfield- Pershing Square-Fairholme warrants that is currently scheduled for this Friday (and which could be postponed to next week), so that GGP can afford its shareholders the benefit of our transaction in preference to the inferior Brookfield proposal. It was in this spirit that we withdrew our formal legal objection, so as to facilitate discussion and negotiation. However, if and when the warrants are issued, SPG will withdraw its proposal and will cease any participation in GGP's bidding process. SPG will not be part of a transaction after hundreds of millions of dollars of value are summarily transferred from GGP shareholders to Brookfield, Pershing Square and Fairholme. We are prepared to answer any questions you may have about these matters and to engage constructively with you immediately. Time is short. We urge you to seize the moment to achieve the best result for GGP and its stakeholders. Very truly yours, David Simon Chairman of the Board and Chief Executive Officer cc: Adam Metz, Chief Executive Officer, General Growth Properties, Inc. Jackson Hsieh, UBS Investment Bank * * * In light of the entry of the Bidding Procedures Order, Mr. Simon said in a public statement cited by Kris Hudson of The Wall Street Journal, "[f]or many months, Simon has tried to work collaboratively and productively with [General Growth] to bring our proposals to fruition." Mr. Simon added in the public statement, "[t]he company's support of a deal that transfers hundreds of millions of dollars of value to the Brookfield consortium has caused us to conclude that we cannot reach a mutually beneficial transaction." GGP's lawyers told the Court at a May 7, 2010 hearing that GGP had engaged with Simon in intense talks for months but a deal couldn't be struck, Mr. Hudson related. Mr. Hudson noted that Judge Gropper's ruling is a rare setback for Mr. Simon, a former Wall Street merger specialist who built his family's company into the largest U.S. retail landlord by completing $25 billion of acquisitions in his 15 years as chief executive. However, certain analysts declined to count Simon out of the running, citing that paying to retire the Brookfield group's warrants isn't a big cost in the context of a $33.5 billion deal, Mr. Hudson stated. Cedrik Lachance, an analyst at Green Street Advisors Inc., pointed out in an interview with The Journal, "It's fair to say a couple of rounds were lost, but you have potential to come back." Mr. Lachance further told The Journal that, "Its a business decision at this point to not be involved in it." In addition, Mr. Hudson disclosed that at the Bidding Procedures hearing, Judge Gropper told Simon's lawyers that he hoped Simon would reconsider its position and continue its pursuit of GGP but noted, "that's entirely its call." Judge Gropper was also quoted by Tiffany Kary and Daniel Taub of Bloomberg News as saying that, "The issues have been carefully vetted and negotiated by the board. This court cannot and will not substitute its judgment for that of the board." Cyrus Madon, senior managing partner at Brookfield, told Bloomberg that Brookfield's plan "gives all shareholders the chance to participate in the tremendous upside of this company for a very, very long time, as opposed to being cashed out at the bottom of the market. Mr. Madon also said in the Bloomberg interview Brookfield will be "working very hard to get through the rest of the bankruptcy process with the company, and then get to the task of creating value." In addition, Fairholme's founder Bruce Berkowitz defended the warrants, reasoning that they help balance the risk associated with a $15 per share investment in GGP, Bloomberg related. GGP closed $0.93 below that price as of May 8, 2010, meaning that Fairholme, without the warrants, currently is closing about $173 million on the investment, Mr. Berkowitz further said, Bloomberg noted. "I promise you these warrants are not free," Mr. Berkowitz was quoted by Bloomberg as saying. "I would not have offered the deal or done the deal if I didn't think so. But it's far from riskless," Mr. Berkowitz added, Bloomberg stated. About General Growth Based in Chicago, Illinois, General Growth Properties, Inc. -- http://www.ggp.com/-- is the second-largest U.S. mall owner, having ownership interest in, or management responsibility for, more than 200 regional shopping malls in 44 states, as well as ownership in master planned community developments and commercial office buildings. The Company's portfolio totals roughly 200 million square feet of retail space and includes more than 24,000 retail stores nationwide. General Growth is a self- administered and self-managed real estate investment trust. The Company's common stock is trading in the pink sheets under the symbol GGWPQ. General Growth Properties Inc. and its affiliates filed for Chapter 11 on April 16, 2009 (Bankr. S.D.N.Y., Case No. 09-11977). Marcia L. Goldstein, Esq., Gary T. Holtzer, Esq., Adam P. Strochak, Esq., and Stephen A. Youngman, Esq., at Weil, Gotshal & Manges LLP, have been tapped as bankruptcy counsel. Kirkland & Ellis LLP is co-counsel. Kurtzman Carson Consultants LLC has been engaged as claims agent. The Company also hired AlixPartners LLP as financial advisor and Miller Buckfire Co. LLC, as investment bankers. The Debtors disclosed $29,557,330,000 in assets and $27,293,734,000 in debts as of December 31, 2008. Bankruptcy Creditors' Service, Inc., publishes General Growth Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Growth Properties Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GENERAL GROWTH: Reports $78,358,000 Net Income for First Quarter ---------------------------------------------------------------- General Growth Properties, Inc. (the Company or GGP) announced its operating results for the three months ending March 31, 2010. "First quarter sales trends improved significantly from the same period last year," said Adam Metz, chief executive officer of General Growth Properties. "The macroeconomic outlook is improving, and we are seeing signs of recovery and growth in a number of our markets. Even previously hard-hit markets like Florida are showing positive trends. Our retailer tenants are largely more profitable than a year ago, with higher margins, improved balance sheets and rising same-store-sales results. Improvement in comparable tenant sales accelerated over the course of the quarter, including a 10% year-over-year increase in March. In this improving environment, we continue to execute a business strategy designed both to strengthen operations within our portfolio of high-quality retail properties and to create long- term value for our stockholders. The combination of these improving conditions and our disciplined operating strategy has led to increased sales and leasing performance in the first quarter. Leasing activity grew 21% year-over-year, and our strong leasing pipeline is a very positive leading indicator for our business. "Our other operating metrics show progress as well," said Mr. Metz. "Occupancy rates have stabilized and we are controlling expenses. Unfortunately, we will not see the full impact of this recovery and improved performance in our operating results for three or four more quarters, the time it takes for signed leases to be reflected in revenue flow." "The decrease in comparable NOI for the quarter, which was consistent with our expectations, reflects the temporary impact of our restructuring and the difficult market conditions of last year, when many of our newer leases were executed. Also, the majority of the negative NOI performance is concentrated in our malls with tenant sales below $350 per square foot. The NOI for malls with tenant sales above $350 per square foot remained essentially flat. We are optimistic that NOI will grow as the economic environment continues to improve and we complete our restructuring. The property-specific planning process we initiated in 2009 is helping us to more effectively execute our business strategy of focusing on the unique characteristics of the market served by each individual shopping center. In the first quarter, we continued to enhance the appeal of our properties to both shoppers and tenants while building a strong financial platform for the future. Also in the first quarter, our Brazilian joint venture Aliansce successfully completed its initial public offering, and our 31% ownership interest in the company provides us access to Brazil's exciting and growing market," continued Mr. Metz. First Quarter 2010 and 2009 Comparable Retail and other Segment NOI 2010 2009 ---- ---- Retail and other segment NOI: $586,277 $605,920 Adjustments: (16,657) (18,470) ---------- --------- Comparable retail and other Segment $569,620 $587,450 NOI: ---------- --------- Decrease in Comparable Retail and other segment NOI: (3.0%) A schedule showing adjustments and non-comparable income and expense items and their impact on 2010 and 2009 operating results is provided with this release. Concurrent with this release, the Company has also made available on its website its quarterly package of supplemental financial information that provides additional detail on its operational results. Operational Highlights GGP is focused on strengthening its assets and operational performance in order to maximize value over the long term. GGP invests in its properties to enhance their positions in the market and their appeal to shoppers and tenants and is committed to nurturing strong and long-lasting relationships with its retail partners. Among the operational highlights of the first quarter of 2010 at the retail property level are: * Anchor Store Activity -- The Company experienced particularly strong big box and department store activity in the first quarter, signing or commencing construction on eleven locations totaling nearly 1.2 million square feet filling previously empty anchor locations. This activity includes new Nordstrom's at St. Louis Galleria (St. Louis, MO) and Christiana Mall (Newark, DE), a new Kohl's at Coronado Center (Albuquerque, NM) and new Target stores at Christiana Mall (Newark, DE) and Valley Plaza Mall (Bakersfield, CA) * Ala Moana Center (Honolulu, HI) -- Ala Moana Center remains the premier shopping destination in Hawaii, which was reinforced by two high-profile "firsts" in the first quarter of 2010. The first Diane von Furstenberg and the first Tory Burch stores in Hawaii were both approved in the quarter and are expected to open later this year. * The Mall in Columbia (Columbia, MD) -- Following one of the most extensive community processes ever conducted, the County Council in Howard County, Md. approved a 30-year master plan for downtown Columbia. This long-term plan is expected to add 5,500 households, 4.3 million square feet of office space and 1.25 million square feet of retail space to this innovative project. * Park Meadows (Lone Tree, CO) -- American Girl opened its eighth store in the nation at the Park Meadows property, a highly anticipated event that attracted approximately 1,800 shoppers by 9:00 AM. In addition, Microsoft closed on a lease for an 8,748 square-foot space with a projected opening date of June 1, a new first-to-market store for Park Meadows. * Water Tower Place (Chicago, IL) -- In an innovative new agreement, Broadway in Chicago (BIC) leased 10,000 square feet of outparcel space in March 2010, with an opening planned in September. BIC is responsible for bringing some of Broadway's hottest shows to Chicago, including Wicked, Mary Poppins, The Producers and Billy Elliott. Broadway in Chicago at Water Tower further solidifies Water Tower's standing as the ultimate Michigan Avenue destination. In addition, Ed Debevic's, a Chicago institution for both locals and tourists, will open in November on Water Tower's mezzanine level. In addition, in January 2010, Aliansce Shopping Centers S.A. ("Aliansce") completed an initial public offering of Aliansce's common shares on the Brazilian Stock Exchange, or BM&FBovespa. GGP did not sell any of its Aliansce shares in the offering and now has approximately a 31.4% ownership interest in Aliansce, which develops, owns and manages shopping centers in Brazil. Segment Results Retail and Other Segment NOI in this segment decreased to $586.3 million for the first quarter of 2010 from the $605.9 million reported for the first quarter of 2009. Excluding the items detailed in the attached schedule of significant items that impact comparability, Comparable NOI for the first quarter of 2010 declined 3.0% year over year. NOI was primarily impacted by reduced revenue and occupancy as a result of the Company's bankruptcy and the economic recession in 2009 when many of our newer leases were signed. Revenues from consolidated properties declined $20.8 million, or approximately 2.8%, for the first quarter of 2010 to $734.2 million, primarily due to declines in minimum rents and tenant recoveries as a result of declines in occupancy rates and in specialty leasing occupancy and sales volumes. Operating expenses for consolidated properties decreased slightly overall, driven by continuing improvements in controllable expenses, partially offset by expenses in the first quarter related to unusual weather events and other one-time costs. Revenues from unconsolidated properties at the Company's ownership share were $151.1 million for the first quarter of 2010, roughly comparable to the $152.1 million in the first quarter of 2009, reflecting continued steady performance. Comparable tenant sales, on a trailing 12 month basis, decreased 3.5% compared to the same period last year. However, on a quarterly basis, comparable tenant sales rose a healthy 7.5% year-over-year, with momentum picking up over the course of the quarter. January 2010 comparable sales increased 2.5% year-over- year, with February and March showing accelerating increases of 6.0% and 10.0%, respectively. Retail leasing activity increased significantly in the first quarter of 2010, with total in-line and outparcel tenant leasing deals covering 1.36 million square feet signed, an increase of 21% over the same period of last year. Within total deals, the number of new lease deals grew 84%, representing new deal square footage of approximately 284 thousand square feet. Although rents remain below 2007 peak levels, they have stabilized. As sales continue their upward trend, the Company expects lease rates to reflect those increases over time. Retail Center occupancy decreased to 90.5% at March 31, 2010, from 90.9% at March 31, 2009, as current occupancy is a sign of, in part, the 2009 economic recession and, accordingly, does not yet reflect the current year increased retail leasing activity described immediately above. Master Planned Communities Segment GGP's premier master planned community segment includes The Woodlands and Bridgeland, both in the Houston metropolitan area, Summerlin in Las Vegas and Columbia and Emerson in Maryland. Land sale revenues for the first quarter of 2010 were $5.1 million for consolidated properties and $12.6 million for unconsolidated properties, compared to $9.0 million and $5.1 million, respectively, for the first quarter of 2009. Decreases in land sale revenues for the consolidated communities, particularly Summerlin, reflect continued weak overall demand for individual lots. These decreases were partially offset by sales of lots in the Houston communities, which improved compared to 2009. NOI from the Master Planned Communities segment for the first quarter of 2010 was a loss of $5.1 million for consolidated properties and earnings of $2.7 million for unconsolidated properties, compared to a loss of $54.4 million and earnings of $0.3 million, respectively, in the first quarter of 2009. The 2009 amount for the consolidated properties includes a provision for impairment of $52.8 million recorded at the Fairwood (Maryland) community to reflect an agreement to sell substantially all of the remaining acreage at the community in a single bulk transaction, which closed in the second quarter of 2009. Individual lot sales in 2010 for the consolidated communities did not exceed selling and community-specific general and administrative costs, which are largely fixed. * * * GGP notified the U.S. Securities and Exchange Commission on May 11, 2010, the company's late filing of its quarterly report on Form 10-Q for the quarter ended March 31, 2010. GGP Senior Vice President and Chief Financial Officer Edmund Hoyt discloses that GGP was required to file the Quarterly Report on Form 10-Q on or before May 10, 2010. However, the Quarterly Report on Form 10-Q has not been completed because the company encountered an unanticipated need for additional time to finalize its financial statements for the quarter, he explains. GGP intends to complete and file its Quarterly Report on Form 10-Q on or before May 17, 2010, he informs the SEC. In addition, GGP's operating loss for the three months ended March 31, 2009, was $95.4 million, and GGP's operating income for the three months ended March 31, 2010 is $270.9 million. The primary reason for the increase in GGP's operating income is due to the decrease in the aggregate provisions for impairment, which were $331.1 million in the first quarter of 2009 as compared to $11.4 million in three months ended March 31, 2010, Mr. Hoyt relates. General Growth Properties, Inc. Consolidated Statements of Income Three Months Ended March 31, 2010 Revenues: Minimum rents $492,758,000 Tenant recoveries 214,251,000 Overage rents 10,346,000 Land sales 5,070,000 Management and other fees 18,086,000 Other 20,726,000 --------------- Total revenues 761,237,000 --------------- Expenses: Real estate taxes 72,095,000 Property maintenance costs 35,844,000 Marketing 7,081,000 Other property operating costs 127,071,000 Land sales operations 10,167,000 Provision for doubtful accounts 6,327,000 Property management and other costs 35,432,000 General and administrative 7,638,000 Strategic initiatives - Provisions for impairment 11,350,000 Depreciation and amortization 177,302,000 --------------- Total expenses 490,307,000 --------------- Operating income (loss) 270,930,000 Interest income 676,000 Interest expense (335,278,000) --------------- Loss before income taxes, noncontrolling interests and equity in income of Unconsolidated Real Estate Affiliates (63,672,000) Benefit from (provision for) income taxes (3,650,000) Equity in income of Unconsolidated Real Estate Affiliates 61,068,000 Reorganization items 89,412,000 --------------- Income (loss) from continuing operations 83,158,000 Discontinued operations - loss on dispositions - --------------- Net (loss) income 83,158,000 Allocation to noncontrolling interests (4,800,000) --------------- Net (loss) income attributable to controlling interests $78,358,000 =============== About General Growth Based in Chicago, Illinois, General Growth Properties, Inc. -- http://www.ggp.com/-- is the second-largest U.S. mall owner, having ownership interest in, or management responsibility for, more than 200 regional shopping malls in 44 states, as well as ownership in master planned community developments and commercial office buildings. The Company's portfolio totals roughly 200 million square feet of retail space and includes more than 24,000 retail stores nationwide. General Growth is a self- administered and self-managed real estate investment trust. The Company's common stock is trading in the pink sheets under the symbol GGWPQ. General Growth Properties Inc. and its affiliates filed for Chapter 11 on April 16, 2009 (Bankr. S.D.N.Y., Case No. 09-11977). Marcia L. Goldstein, Esq., Gary T. Holtzer, Esq., Adam P. Strochak, Esq., and Stephen A. Youngman, Esq., at Weil, Gotshal & Manges LLP, have been tapped as bankruptcy counsel. Kirkland & Ellis LLP is co-counsel. Kurtzman Carson Consultants LLC has been engaged as claims agent. The Company also hired AlixPartners LLP as financial advisor and Miller Buckfire Co. LLC, as investment bankers. The Debtors disclosed $29,557,330,000 in assets and $27,293,734,000 in debts as of December 31, 2008. Bankruptcy Creditors' Service, Inc., publishes General Growth Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Growth Properties Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GENERAL MOTORS: Old GM Says Claims Reduced by $120 Billion ---------------------------------------------------------- Bill Rochelle at Bloomberg News reports that Old General Motors Corp., now formally named Motors Liquidation Co., is asking for a third extension of the exclusive right to propose a Chapter 11 plan. The Court will consider the request for an extension until Sept. 27 at a hearing on May 27. According to the report, Old GM said that claims and assets still must be analyzed before a Chapter 11 plan can be fully negotiated. It says it has already reduced filed claims by $120 billion. Originally, 70,000 claims were filed for $274 billion. Old GM said it's already held discussions on a plan with the official committee representing asbestos claimants and with the representative for so-called future asbestos claimants. About General Motors General Motors Company -- http://www.gm.com/-- is one of the world's largest automakers, tracing its roots back to 1908. With its global headquarters in Detroit, GM employs 209,000 people in every major region of the world and does business in some 140 countries. GM and its strategic partners produce cars and trucks in 34 countries, and sell and service these vehicles through these brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, Opel, Vauxhall and Wuling. GM's largest national market is the United States, followed by China, Brazil, the United Kingdom, Canada, Russia and Germany. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. GM acquired its operations from General Motors Company, n/k/a Motors Liquidation Company, on July 10, 2009, pursuant to a sale under Section 363 of the Bankruptcy Code. Motors Liquidation or Old GM is the subject of a pending Chapter 11 reorganization case before the U.S. Bankruptcy Court for the Southern District of New York. At December 31, 2009, GM had total assets of US$136.295 billion against total liabilities of US$107.340 billion. At December 31, 2009, total equity was US$21.249 million. About Motors Liquidation General Motors Corporation and three of its affiliates filed for Chapter 11 protection on June 1, 2009 (Bankr. S.D.N.Y. Lead Case No. 09-50026). General Motors changed its name to Motors Liquidation Co. following the sale of its key assets to a company 60.8% owned by the U.S. Government. The Honorable Robert E. Gerber presides over the Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors in their restructuring efforts. Al Koch at AP Services, LLC, an affiliate of AlixPartners, LLP, serves as the Chief Executive Officer for Motors Liquidation Company. GM is also represented by Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as counsel. Cravath, Swaine, & Moore LLP is providing legal advice to the GM Board of Directors. GM's financial advisors are Morgan Stanley, Evercore Partners and the Blackstone Group LLP. Bankruptcy Creditors' Service, Inc., publishes General Motors Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Motors Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GTC BIOTHERAPEUTICS: Posts $7.7 Million Net Loss in Q1 2010 ----------------------------------------------------------- GTC Biotherapeutics, Inc., filed its quarterly report on Form 10- Q, showing a net loss of $7.7 million on $346,000 of revenue for the three months ended April 4, 2010, compared with a net loss of $10.4 million on $198,000 of revenue for the same period ended March 29, 2009. The Company's balance sheet as of April 4, 2010, showed $27.0 million in assets and $54.1 million of liabilities, for a stockholders' deficit of $27.1 million. Cash at April 3, 2010 totaled $4.9 million, a $1.1 million increase compared to $3.8 million at January 3, 2010. In February 2010, GTC obtained $7 million of new funding from its collaboration partner LFB Biotechnologies. The secured note has a 36-month term and accrues interest at a rate of 4%, with a single payment of principal and interest at maturity. As reported in the Troubled Company Reporter on March 15, 2010, PricewaterhouseCoopers LLP, in Boston, 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 and limited available funds as of January 3, 2010. "We have incurred losses from operations and negative operating cash flow since inception and have an accumulated deficit of approximately $337 million at April 4, 2010. We also have negative working capital of $13.1 million as of April 4, 2010. Based on our cash balance as of April 4, 2010, as well as potential cash receipts from existing programs, we believe our capital resources will be sufficient to fund operations to the end of the second quarter of 2010. Our recurring losses from operations and limited funds raise substantial doubt about our ability to continue as a going concern." A full-text copy of the annual report is available for free at: http://researcharchives.com/t/s?623a Based in Framingham, Massachusetts, GTC Biotherapeutics, Inc. (OTC BB: GTCB) -- http://www.gtc-bio.com/-- develops, supplies and commercializes therapeutic proteins produced through transgenic animal technology. ATryn(R), GTC's recombinant human antithrombin, has been approved for use in the United States and Europe. ATryn(R) is the first and only therapeutic product produced in transgenic animals to be approved anywhere in the world. In addition to ATryn(R), GTC is developing a portfolio of recombinant human plasma proteins with known therapeutic properties. These proteins include recombinant forms of human coagulation factors VIIa and IX, which are being developed for the treatment of patients with hemophilia, and recombinant alpha- fetoprotein, which is being developed for the treatment of myasthenia gravis and multiple sclerosis. GULFSTREAM CRANE: Hearing on Continued Cash Use Set for June 10 --------------------------------------------------------------- The Hon. Raymond B. Ray of the U.S. Bankruptcy Court for the southern District of Florida authorized Gulfstream Crane, LLC, to access the cash collateral. A hearing on the Debtor's continued use of the cash collateral will be held on June 10, 2010, at 9:30 a.m. The Debtor would use the money to fund its Chapter 11 case, pay suppliers and other parties. The lenders consented to the Debtor's access to the cash collateral, provided that: -- it will not use, sell, or expend, directly or indirectly, the cash collateral of Bank Midwest or any other lender who may claim an interest in cash collateral, except upon the terms and conditions set in the final order; -- the use of cash collateral will be for the funding of ordinary and necessary expenses, subject to a 10% variance, well as to pay any fees to the Office of the U.S. Trustee; -- no payments will be made to any members of the Debtor or any professional employed by the Debtor; -- it will not make any prepayments on any expense except in the ordinary course of its business; -- during the use period, the Debtor will furnish to any of the lenders who requests a copy in writing with a line item description of any variances; -- each lender is granted continuing liens and security interests in all property of the Debtor with the same validity and priority as existed prior to the petition date; and -- the cash collateral use will terminate on the occurrence of an event of default or a termination event. About Gulfstream Crane, LLC Pompano Beach, Florida-based Gulfstream Crane, LLC -- dba General Crane -- is engaged primarily in the business of supplying and renting crane, hoist and rigging equipment. The Company operates and maintains facilities in Florida, Georgia and Texas. The Company filed for Chapter 11 bankruptcy protection on December 8, 2009 (Bankr. S.D. Fla. Case No. 09-37091). Michael D. Seese, Esq., who has an office in Fort Lauderdale, Florida, assists the Company in its restructuring effort. The Company listed $50,000,001 to $100,000,000 in assets and $50,000,001 to $100,000,000 in liabilities. HANMI FINANCIAL: Incurs $49.5 Million Net Loss in Q1 2010 --------------------------------------------------------- Hanmi Financial Corp. filed its quarterly report on Form 10-Q, showing a net loss of $49.5 million on net interest income (before provision for credit losses) of $27.3 million for the three months ended March 31, 2009, compared with a net loss of $17.2 million on $23.1 million of net interest income (before provision for credit losses) for the same period of 2009. The Company's balance sheet as of March 31, 2010, showed $3.018 billion in assets, $2.917 billion of liabilities, and $101.0 million of stockholders equity. As reported in the Troubled Company Reporter on March 17, 2010, KPMG LLP, in Los Angeles, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted the Company and its wholly-owned subsidiary Hanmi Bank, are currently operating under a formal supervisory agreement with the Federal Reserve Bank of San Francisco and the California Department of Financial Institutions, which restricts certain operations of the Company and requires the Company to, among other things, increase contributed equity capital at Hanmi Bank by $100 million by July 31, 2010, and achieve specified capital ratios by July 31, 2010, and December 31, 2010. The Company has also committed to the FRB to adopt a consolidated capital plan to augment and maintain a sufficient capital position. A full-text copy of the quarterly report is available for free at: http://researcharchives.com/t/s?6248 Los Angeles-based Hanmi Financial Corp. is the holding company for Hanmi Bank, a state chartered bank with headquarters located at 3660 Wilshire Boulevard, Penthouse Suite A, in Los Angeles. The Bank is a community bank conducting general business banking, with its primary market encompassing the Korean-American community as well as other communities in the multi-ethnic populations of Los Angeles County, Orange County, San Bernardino County, San Diego County, the San Francisco Bay area, and the Silicon Valley area in Santa Clara County. At December 31, 2009, the Bank maintained a branch network of 27 full-service branch offices in California and two loan production offices in Virginia and Washington. The Company's other subsidiaries are Chun-Ha Insurance Services, Inc. and All World Insurance Services, Inc., which were acquired in January 2007. Chun-Ha and All World are insurance agencies that offer a complete line of insurance products, including life, commercial, automobile, health, and property and casualty. IMPERIAL CAPITAL: Court Schedules June 14 as Claims Bar Date ------------------------------------------------------------ The U.S. Bankruptcy Court for the Southern District of California has established June 14, 2010, as the last day for any individual or entity to file proofs of claim against Imperial Capital Bancorp, Inc. The Court also set June 16, 2010, as the governmental bar date. Proofs of claim or proofs of interest may be mailed or may be delivered by messenger or overnight courier, to these addresses: 1. U.S. Bankruptcy Court 325 West F Street San Diego, CA 92101 2. Stutman, Treister & Glatt Professional Corporation Attn: Gregory K. Jones 1901 Avenue of the Stars, 12th Floor Los Angeles, CA 90067-6013 Tel: (310) 228-5600 Fax: (310) 228-5788 La Jolla, California-based Imperial Capital Bancorp, Inc., filed for Chapter 11 bankruptcy protection on December 18, 2009 (Bankr. S.D. Calif. Case No. 09-19431). Gregory K. Jones, Esq., at Stutman, Treister & Glatt, P.C., assists the Company in its restructuring effort. The Company listed $10,000,001 to $50,000,000 in assets and $50,000,001 to $100,000,000 in liabilities. IMPERIAL CAPITAL: Has Until June 18 to File Chapter 11 Plan ----------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of California extended Imperial Capital Bancorp, Inc.'s exclusive periods to file and solicit acceptances for the proposed Chapter 11 Plan until June 18, 2010, and August 15, 2010. La Jolla, California-based Imperial Capital Bancorp, Inc., filed for Chapter 11 bankruptcy protection on December 18, 2009 (Bankr. S.D. Calif. Case No. 09-19431). Gregory K. Jones, Esq., at Stutman, Treister & Glatt, P.C., assists the Company in its restructuring effort. The Company listed $10,000,001 to $50,000,000 in assets and $50,000,001 to $100,000,000 in liabilities. INN AT MISSOURI: Wants Receiver to Turn Over Assets --------------------------------------------------- Inn at Missouri Research Park, LLLP, has asked for authorization from the U.S. Bankruptcy Court for the Eastern District of Missouri to for receiver Hospitality Management Associates, L.L.C. (HMA) to turn over the Debtor's Hotel owned by Debtor at 32 Research Park Circle in Weldon Springs, Missouri, and provide the necessary accounting of its custodianship to the Debtor. On or about February 7, 2007, at the insistence of Debtor's lender Premier Bank, the Debtor entered into a management contract with HMA for HMA to manage the Property. By letter dated March 25, 2010, Mr. Harold Whitfield, the Vice President of Debtor, sent a letter to HMA attempting to terminate the contract if HMA did not cure certain deficiencies in HMA's performance under the contract within 30 days of the date of that letter. The Debtor's grounds for attempting to send the 30 day termination letter called for under the contract included; (1) failure to provide financial reports as called for by the contract; (2) failure to provide a full time on site manager for the Property despite payment of David Shockley for such services out of the revenues of the Debtor's hotel; (3) failure to pay insurance premiums, taxes and reservation fees; and (4) failure to provide receipts when requested for questionable disbursements by HMA. On April 15, 2010 a representative of HMA named Huck Oberlin advised the Debtor that HMA agreed to terminate the Contract per the Debtor's request and returned certain documents to the Debtor. On April 16, 2010, counsel for Premier, Scot J. Seabaugh, sent a letter to Mr. Whitfield alleging that, due to a prior assignment and subordination of the Contract to Premier requiring Premier's written permission to terminate the Contract, the Termination Letter was void and of no effect. Mr. Seabaugh demanded that Whitfield rescind the Termination Letter. On April 20, 2010 Whitfield had discussions with a representative of Premier about the Debtor's loan and the Termination Letter. On April 21, 2010, without notice of any kind to Debtor, on an ex parte basis, Premier obtained an order from Judge Jon Cunningham of the St. Charles County Circuit Court appointing HMA as receiver of all of Debtor's assets. Premier promptly froze Debtor's bank account containing approximately $40,000, and HMA is currently in possession of all of Debtor's property. On May 4, 2010, the Debtor's counsel provided written notice to HMA by facsimile of the filing of this bankruptcy proceeding and demanded that HMA immediately cease making any disbursements or take any action in the administration of any of Debtor's property, that HMA turn over all of Debtor's property in its possession to Debtor, and that HMA provide the Debtor with an accounting of any property or proceeds, product, offspring, rents or profits of such property, that at any time came into the possession, custody or control of HMA. About Inn at Missouri Research Park St. Louis, Missouri-based Inn at Missouri Research Park, LLP, dba Wingate by Wyndham Hotel, filed for Chapter 11 bankruptcy protection on May 3, 2010 (Bankr. E.D. Mo. Case No. 10-44907). David M. Dare, Esq., at Herren, Dare & Streett, 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. INNATECH LLC: Files Schedules of Assets and Liabilities ------------------------------------------------------- Innatech, LLC, filed with the U.S. Bankruptcy Court for the Eastern District of Michigan its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $4,057,345 B. Personal Property $4,590,830* C. Property Claimed as Exempt D. Creditors Holding Secured Claims $12,295,948 E. Creditors Holding Unsecured Priority Claims $800,093 F. Creditors Holding Unsecured Non-priority Claims $84,716,684 ----------- ----------- TOTAL $8,648,175 $97,812,725 * Amount does not include certain personal property listed on attachments to Schedule B. About Innatech Headquartered in Rochester, Michigan, Innatech LLC, dba Dynamic, manufactures and designs "highly-engineered injection molded components and assemblies." Innatech's are sold to Tier I and Tier II automotive suppliers and to customers in the packaging, office furniture, appliances, household goods, toys, and personal care markets. Innatech employs almost 150 people at three facilities located in Michigan, Indiana and Ohio. The Company filed for Chapter 11 bankruptcy protection on March 23, 2010 (Bankr. E.D. Mich. Case No. 10-49380). Robert D. Gordon, 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. IRVINE SENSORS: Reports $3,419,600 Net Loss for March 29 Quarter ---------------------------------------------------------------- Irvine Sensors Corporation reported a net loss attributable to the Company of $3,419,600 for the 13 weeks ended March 28, 2010, from net income attributable to the Company of $5,128,000 for the 13 weeks ended March 29, 2009. Irvine Sensors reported a net loss attributable to the Company of $5,136,300 for the 26 weeks ended March 28, 2010, from net income attributable to the Company of $3,013,900 for the 26 weeks ended March 29, 2009. Irvine Sensors said total revenues were $2,721,400 for the 13 weeks ended March 28, 2010, from $2,841,200 for the 13 weeks ended March 29, 2009. Irvine Sensors said total revenues were $5,931,600 for the 26 weeks ended March 28, 2010, from $5,584,700 for the 26 weeks ended March 29, 2009. At March 28, 2010, the Company had total assets of $6,184,700 against total liabilities of $13,111,400, and non-controlling interest of $324,400, resulting in stockholders' deficit of $6,926,700. In its March 2010 Form 10-Q Report, the Company noted that it generated significant net losses in fiscal years prior to fiscal 2009. In fiscal 2009, the Company generated net income of $914,800, but this was primarily attributable to the approximately $8.6 million of aggregate non-recurring gains realized by the Company's sale of patent assets and substantial gains on the elimination of consolidated debt and reduction in pension liability. In the first half of fiscal 2010, the 26-week period ended March 28, 2010, the Company had a net loss of $5,136,300. Management believes that the Company's losses in recent years have primarily resulted from a combination of insufficient contract research and development revenue to support the Company's skilled and diverse technical staff believed to be necessary to support monetization of the Company's technologies, amplified by the effects of discretionary investments to productize a variety of those technologies. The Company has not yet been successful in most of these product activities, nor has it been able to raise sufficient capital to fund the future development of many of these technologies. Accordingly, the Company has sharply curtailed the breadth of its product investments, and instead has focused on the potential growth of its chip stacking business, various miniaturized camera products and a system application incorporating such camera products. In addition, the initial acquisition of Optex in December 2005 and the ultimate discontinuation of Optex's operations in October 2008 pursuant to the Optex Asset Sale contributed to increases in the Company's consolidated accumulated deficit, largely due to inadequate gross margins on Optex's products and the related litigation, as well as insufficient capital resources. As of March 28, 2010, the Company also had negative working capital and stockholders' deficit of approximately $6.4 million and $6.9 million, respectively. As of March 28, 2010, the Company also had a litigation judgment pending, for which the Company has recorded expected expenses of $1.2 million. Management is focused on managing costs in line with estimated total revenues for fiscal 2010 and beyond, including contingencies for cost reductions if projected revenues are not fully realized. However, there can be no assurance that anticipated revenues will be realized or that the Company will be able to successfully implement its plans. Accordingly, the Company anticipates that it will need to raise additional funds to meet its continuing obligations and may incur additional losses in the future. A full-text copy of the Company's Form 10-Q report is available at no charge at http://ResearchArchives.com/t/s?625e About Irvine Sensors Irvine Sensors Corporation -- http://www.irvine-sensors.com/-- headquartered in Costa Mesa, California, is a vision systems company engaged in the development and sale of miniaturized infrared and electro-optical cameras, image processors and stacked chip assemblies and sale of higher level systems incorporating such products and research and development related to high density electronics, miniaturized sensors, optical interconnection technology, high speed network security, image processing and low- power analog and mixed-signal integrated circuits for diverse systems applications. Optex Systems, Inc., a Texas corporation and a wholly owned subsidiary of Irvine Sensors, on September 21, 2009, filed a voluntary petition for relief under Chapter 7 of the United States Bankruptcy Code in the United States Bankruptcy Court in California. LAS VEGAS MONORAIL: Court Extends Claims Bar Date for 45 Days ------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Nevada approved the stipulation entered with Wells Fargo Bank, N.A., in its capacity as indenture trustee, extending the May 19, 2010, bar date for an additional 45 days. The extension will allow the trustee or successor trustee for holders of 3rd Tier Bonds to file a proof of claim for and on behalf of holders of the 3rd Tier Bonds. Las Vegas, Nevada-based Las Vegas Monorail Company, organized by the State of Nevada in 2000 as a nonprofit corporation, owns and manages the Las Vegas Monorail. The Monorail is a seven-stop, elevated train system that travels along a 3.9-mile route near the Las Vegas Strip. LVMC has contracted with Bombardier Transit Corporation to operate the Monorail. Though it benefits from its tax-exempt status due to being a nonprofit entity, LVMC claims to be the first privately-owned public transportation system in the nation to be funded solely by fares and advertising. LVMC says it receives no governmental financial support or subsidies. The Company filed for Chapter 11 bankruptcy protection on January 13, 2010 (Bankr. D. Nev. Case No. 10-10464). Gerald M. Gordon, Esq., at Gordon Silver, assists the Company in its restructuring effort. Alvarez & Marsal North America, LLC, is the Debtor's financial advisor. Stradling Yocca Carlson & Rauth is the Debtor's special bond counsel. Jones Vargas is the Debtor's special corporate counsel. The Company listed $10,000,001 to $50,000,000 in assets and $500,000,001 to $1,000,000,000 in liabilities. LIQUIDATION OUTLET: Taps Brian L. Budsberg as Bankr. Counsel ------------------------------------------------------------ Liquidation Outlet, Inc., asks the U.S. Bankruptcy Court for the Western District of Washington for permission to employ Brian L. Budsberg, PLLC as counsel. The firm will represent the Debtor in the Chapter 11 proceedings. The firm received $55,210 representing the hourly rate and the time incurred for legal work performed prepetition. Budsberg currently holds no retainer in the trust account. The Debtor was advised by Budsberg that all fees, sales, and employment of professionals must be completed pursuant to order of the Court. The hourly rates of Budsberg's personnel are: Brian L. Budsberg, Esq. $325 Benjamin J. Riley $225 Paralegals $125 To the best of the Debtor's knowledge, the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Brian L. Budsberg, Esq. Brian L. Budsberg, P.L.L.C. P.O. Box 1489 Olympia, WA 98507-1489 Tel: (360) 584-9093 Fax: (360) 252-8333 The Debtor proposes a hearing on the employment of its counsel on June 1, 2010, at 9:00 a.m. The hearing will be held at Room H, 1717 Pacific Avenue, Tacoma, Washington. Objections, if any, are due on May 25, 2010. About Liquidation Outlet, Inc. Lakewood, Washington-based Liquidation Outlet, Inc., filed for Chapter 11 bankruptcy protection on March 25, 2010 (Bankr. W.D. Wash. Case No. 10-42279). Benjamin J. Riley, Esq., at Brian L Budsberg PLLC, assists the Company in its restructuring effort. According to the schedules, the Company has assets of $16,053,250, and total debts of $7,434,413. LIQUIDATION OUTLET: U.S. Trustee Forms 3-Member Creditors Panel --------------------------------------------------------------- Robert D. Miller Jr., Acting U.S. Trustee for Region 18, appointed three members to the official committee of unsecured creditors in the Chapter 11 case of Liquidation Outlet, Inc. The Creditors Committee members are: 1. Stan Sved Betty Inc. 1801 Swanson Street Philadelphia, PA 19148 2. Michael J. Johnson, chairperson Inside Sales Manager Poly Bag LLC 4301 S Tacoma Way Tacoma, WA 98409 Tel: (253) 473-4660 3. John Falle, president E.H. Greetings, Inc. P.O. Box 33029 950 Franklin Blvd. Cambridge, ON N1R 8R8 Canada Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at the Debtor's expense. They may investigate the Debtor's business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. Those committees will also attempt to negotiate the terms of a consensual Chapter 11 plan -- almost always subject to the terms of strict confidentiality agreements with the Debtors and other core parties-in-interest. If negotiations break down, the Committee may ask the Bankruptcy Court to replace management with an independent trustee. If the Committee concludes reorganization of the Debtor is impossible, the Committee will urge the Bankruptcy Court to convert the Chapter 11 cases to a liquidation proceeding. Lakewood, Washington-based Liquidation Outlet, Inc., filed for Chapter 11 bankruptcy protection on March 25, 2010 (Bankr. W.D. Wash. Case No. 10-42279). Benjamin J. Riley, Esq., at Brian L Budsberg PLLC, assists the Company in its restructuring effort. According to the schedules, the Company has assets of $16,053,250, and total debts of $7,434,413. LIQUIDATION OUTLET: Can Obtain $2MM DIP Loan from LOI Capital ------------------------------------------------------------- The Hon. Paul B. Snyder of the U.S. Bankruptcy Court for the Western District of Washington authorized, on a final basis, Liquidation Outlet, Inc., to obtain credit and incur debt up to the aggregate committed amount of $2,000,000 secured by priming first priority perfected liens on property of the Debtor's estate and with superpriority administrative expense claim from LOI Capital, LLC. As of April 8, 2010, the aggregate amount of all loans and other obligations in respect of the US Bank Loan Agreement equaled $599,533, and, as of the petition date, the aggregate amount of all loans and other obligations in respect of the LOI Loan Agreement equaled $150,000, in each case plus all costs, expenses, fees. The Debtor will use the financing to continue operations and to administer and preserve the value of its estate. The Debtor was unable to obtain unsecured credit and secured credit, on more favorable terms and conditions than those provided in the DIP Credit Agreement. About Liquidation Outlet, Inc. Lakewood, Washington-based Liquidation Outlet, Inc., filed for Chapter 11 bankruptcy protection on March 25, 2010 (Bankr. W.D. Wash. Case No. 10-42279). Benjamin J. Riley, Esq., at Brian L Budsberg PLLC, assists the Company in its restructuring effort. According to the schedules, the Company has assets of $16,053,250, and total debts of $7,434,413. LIQUIDATION OUTLET: Court OKs Sale of All Assets to Hilco Merchant ------------------------------------------------------------------ The Hon. Paul B. Snyder of the U.S. Bankruptcy Court for the Western District of Washington authorized Liquidation Outlet, Inc., to sell substantially all of its assets to its secured creditor, Hilco Merchant Resources, LLC. The Debtor is also authorized to close certain store locations in connection with the sale. Upon the closing, and payment of the initial cash payment, the purchaser will take title to and possession of the acquired assets free and clear of all liens, claims and interests. Lakewood, Washington-based Liquidation Outlet, Inc., filed for Chapter 11 bankruptcy protection on March 25, 2010 (Bankr. W.D. Wash. Case No. 10-42279). Benjamin J. Riley, Esq., at Brian L Budsberg PLLC, assists the Company in its restructuring effort. According to the schedules, the Company has assets of $16,053,250, and total debts of $7,434,413. LPATH INC: Reports $659,471 Net Income for March 31 Quarter ----------------------------------------------------------- Lpath, Inc., reported net income of $659,471 for the three months ended March 31, 2010, from net income of $565,994 for the same period in 2009. Total revenues -- consisting of grant and royalty revenue, and research and development revenue under collaborative agreement -- were $4,077,178 for the 2010 first quarter from $2,678,765 for the 2009 first quarter. At March 31, 2010, Lpath had total assets of $8,695,299 against total current liabilities of $2,040,132 and warrants of $1,893,776, resulting in stockholders' equity of $2,755,167. In its March 2010 Form 10-Q report, the Company said that in the year ended December 31, 2009, Lpath utilized cash in operating activities of $1,054,786. During 2010, the Company expects to continue to incur cash losses from operations. These conditions raise substantial doubt about the Company's ability to continue as a going concern. While the Company had cash totaling $6,830,565 as of March 31, 2010, the cost of its ongoing drug discovery and development efforts, including general and administrative expenses, are expected to consume between $6 million and $9 million during the remainder of 2010. The Company believes that its existing cash together with expected funding from NIH Grants and the remaining amount due under the Merck Agreement during the second quarter of 2010 will be sufficient to meet its projected operating requirements at least through December 2010. The collaboration with Merck terminated effective April 24, 2010. As a result, the Company will need to seek additional sources of capital to finance its research and development activities in 2011. The Company expects to continue to incur cash losses from operations during 2010. In the event the Company needs to raise additional capital, it would: 1. Pursue additional fund raising activities from both existing and potential new investors. 2. Explore cash generating opportunities from strategic alliances, including licensing portions of its technology or entering into corporate partnerships or collaborations. In such transactions, Lpath could transfer certain rights to one or more of its drug discovery or development programs, or to specific indications within those programs and receive infusions of cash in the short-term, and potentially in the long-term as well. 3. Continue to seek additional research grants from the National Institutes of Health or other sources. The Company said "future financings through equity investments may be dilutive to existing stockholders. Also, the terms of securities we may issue in future capital transactions may be more favorable for our new investors. If we raise additional funds through collaboration and licensing arrangements, we may be required to relinquish potentially valuable rights to our product candidates or proprietary technologies, or grant licenses on terms that are not favorable to us. There can be no assurance that additional funds will be available when needed from any source or, if available, will be available on terms that are acceptable to us. If we are unable to raise funds to satisfy our capital needs on a timely basis, we may be required to curtail our operations and current business plans." A full-text copy of the Company's quarterly report on Form 10-Q is available at no charge at http://ResearchArchives.com/t/s?6250 In the Company's 2009 Annual Report on Form 10-K, Moss Adams LLP, in San Diego, Calif., expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company had incurred significant cash losses from operations since inception and expects to continue to incur cash losses from operations in 2010 and beyond. San Diego, Calif.-based Lpath, Inc. is a biotechnology company focused on the discovery and development of lipidomic-based therapeutics, an emerging field of medical science whereby bioactive lipids are targeted to treat human diseases. LPATH INC: Annual Stockholders' Meeting Set for June 30 ------------------------------------------------------- The annual meeting of stockholders of Lpath, Inc. will be held at the offices of Lpath, Inc., 6335 Ferris Square, Suite A, San Diego, California, on June 30, 2010 at 9:00 a.m. Pacific Daylight Time, for these purposes: 1. To elect five directors to hold office until their respective successors are elected and qualified or their earlier resignation, death, or removal; 2. To consider an amendment to our Articles of Incorporation to increase the number of authorized shares of Class A common stock from 100 million to 200 million; 3. To ratify the appointment of Moss Adams LLP as the Company's independent registered public accounting firm for the fiscal year ending December 31, 2010; and 4. To transact such other business as may properly be brought before the meeting or any adjournment or postponement thereof. The Company's Board of Directors recommends a vote FOR each of the director nominees, FOR the amendment to the Articles of Incorporation and FOR the ratification of the appointment of Moss Adams. Stockholders of record at the close of business on April 30, 2010 are entitled to notice of, and to vote on, all matters at the meeting and any reconvened meeting following any adjournments or postponements thereof. A full-text copy of the Company's proxy statement is available at no charge at http://ResearchArchives.com/t/s?6251 About Lpath San Diego, Calif.-based Lpath, Inc. is a biotechnology company focused on the discovery and development of lipidomic-based therapeutics, an emerging field of medical science whereby bioactive lipids are targeted to treat human diseases. At March 31, 2010, Lpath had total assets of $8,695,299 against total current liabilities of $2,040,132 and warrants of $1,893,776, resulting in stockholders' equity of $2,755,167. In its March 2010 Form 10-Q report, the Company said that in the year ended December 31, 2009, Lpath utilized cash in operating activities of $1,054,786. During 2010, the Company expects to continue to incur cash losses from operations. These conditions raise substantial doubt about the Company's ability to continue as a going concern. In the Company's 2009 Annual Report on Form 10-K, Moss Adams LLP, in San Diego, Calif., expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company had incurred significant cash losses from operations since inception and expects to continue to incur cash losses from operations in 2010 and beyond. LPATH INC: Registers 68 Million Shares for Resale ------------------------------------------------- Lpath Inc. has filed with the Securities and Exchange Commission three Post-Effective Amendment No. 4s to Form S-1 Registration Statement under the Securities Act of 1933. The Company seeks to delay the effective date of the registration statements. The prospectuses are: -- One prospectus relates to the resale by certain selling security holders of Lpath, Inc. of up to 31,545,539 shares of the Company's Class A common stock in connection with the resale of: * up to 25,459,514 shares of the Class A common stock which were issued in connection with a merger transaction and private placements; and * up to 6,086,025 shares of the Class A common stock which may be issued upon exercise of certain warrants issued in connection with a merger transaction and private placements (of which 2,348,121 shares of Class A common stock have already been issued upon the exercise of such warrants). See http://ResearchArchives.com/t/s?6252 -- One prospectus relates to the resale by certain selling security holders of Lpath, Inc. of up to 25,729,669 shares of Class A common stock in connection with the resale of: * up to 17,733,737 shares of Class A common stock which were issued in connection with a private placement that closed in April and June 2007; and * up to 7,995,932 shares of Class A common stock which may be issued upon exercise of certain warrants issued in connection with a private placement that closed in April and June 2007 (including warrants issued to the Company's placement agents in such offering). See http://ResearchArchives.com/t/s?6253 -- The prospectus relates to the resale by certain selling security holders of Lpath, Inc. of up to 9,030,487 shares of Class A common stock in connection with the resale of: * up to 7,090,999 shares of Class A common stock which were issued in connection with a private placement that closed on August 12 and 18, 2008; and * up to 1,939,488 shares of Class A common stock which may be issued upon exercise of certain warrants issued in connection with a private placement that closed in August 2008 (including warrants issued to the Company's placement agents in such offering). See http://ResearchArchives.com/t/s?6254 About Lpath San Diego, Calif.-based Lpath, Inc. is a biotechnology company focused on the discovery and development of lipidomic-based therapeutics, an emerging field of medical science whereby bioactive lipids are targeted to treat human diseases. At March 31, 2010, Lpath had total assets of $8,695,299 against total current liabilities of $2,040,132 and warrants of $1,893,776, resulting in stockholders' equity of $2,755,167. In its March 2010 Form 10-Q report, the Company said that in the year ended December 31, 2009, Lpath utilized cash in operating activities of $1,054,786. During 2010, the Company expects to continue to incur cash losses from operations. These conditions raise substantial doubt about the Company's ability to continue as a going concern. In the Company's 2009 Annual Report on Form 10-K, Moss Adams LLP, in San Diego, Calif., expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company had incurred significant cash losses from operations since inception and expects to continue to incur cash losses from operations in 2010 and beyond. LPL HOLDINGS: S&P Changes Outlook to Positive & Affirms B+ Rating ----------------------------------------------------------------- Standard & Poor's Ratings Services changed its outlook on LPL Holdings Inc. to positive from stable, while affirming the ratings, including the 'B+' counterparty credit rating. "The ratings on LPL reflect its solid independent-adviser franchise and a retrenchment from its previous acquisitive strategy and aggressive financial profile," said Standard & Poor's credit analyst Robert B. Hoban, Jr. "But because it is a regulated brokerage firm, LPL's negative consolidated tangible equity is a limiting factor on the rating." The lack of tangible equity is a significant negative for the rating because LPL is a regulated brokerage firm that must meet regulatory capital requirements and support other brokerage- related operational risks and costs. LPL continues to carry a heavy debt burden as a result of its 2005 leveraged buyout. Modest debt reduction and growth in operating cash flow has gradually improved the firm's debt leverage and interest coverage over the past two years. Nonetheless, through March 2010, the company's gross debt-to-trailing 12 months' adjusted EBITDA of 3.6x and interest coverage of 3.97x remain weak and still within the range for a 'B' category rating. "We view positively the company's recent announcement that it seeks to reorganize its debt structure in an effort to stagger debt maturities and reduce funding costs. We believe that if this goes as projected it would contribute to debt metrics moving into the 'BB' category over the near-to-medium term." "The positive outlook reflects our expectation that LPL will maintain its competitive position and adequate liquidity, and complete its debt reorganization as planned. We also believe the company will continue to develop its infrastructure, particularly the risk management function." MEDICAL STAFFING: Posts $6.5 Million Net Loss in Q1 2010 -------------------------------------------------------- Medical Staffing Network Holdings, Inc. filed its quarterly report on Form 10-Q, showing a net loss of $6.5 million on $72.0 million of revenue for the three months ended March 28, 2010, compared with a net loss of $3.7 million on $$98.6 million of revenue for the three months ended March 29, 2009. The Company's balance sheet as of March 28, 2010, showed $87.7 million in assets and $140.8 million of debts, for a stockholders' deficit of $53.1 million. As reported in the Troubled Company Reporter on March 29, 2010, Ernst & Young LLP, in West Palm Beach, Fla., in its report on the Company's financial statements for the year ended December 27, 2009, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that of the Company's recurring operating losses and working capital deficiency. "The Company is not in compliance with certain financial covenants as of March 28, 2010, relative to its Amended Credit Agreements. This caused a default which allows the lenders to demand immediate repayment of the outstanding balances. Management is in communication with the Company's lenders to restructure the debt, as the Company does not expect to regain compliance with the covenants contained in its debt agreement as currently in effect. The Company will require additional financing or revisions to the current financing agreement in order to continue as a going concern. There can be no assurance that the Company will be able to obtain the requisite additional financing or modify the existing debt agreement to satisfactory terms on a timely basis." A full-text copy of the quarterly report is available for free at: http://researcharchives.com/t/s?6249 Boca Raton, Fla.-based Medical Staffing Network Holdings, Inc. (OTC QX: MSNW) is one of of the largest diversified healthcare staffing companies in the United States. The Company provides per diem nurse staffing services and travel, allied health and vendor managed services. MIDWEST BANC: March 31 Balance Sheet Upside-Down by $49.5 Million ----------------------------------------------------------------- Midwest Banc Holdings, Inc. filed its quarterly report on Form 10-Q, showing a net loss of $107.9 million on $14.5 million of net interest income for the three months ended March 31, 2010, compared with a net loss of $5.3 million on $21.1 million of net interest income for the same period of 2009. The Company's balance sheet as of March 31, 2010, showed $3.182 billion in assets and $3.232 billion of liabilities, for a stockholders' deficit of $49.5 million. As reported in the Troubled Company Reporter on April 6, 2010, PricewaterhouseCoopers LLP, in Chicago, expressed substantial doubt about the Company's ability to continue as a going concern. "The Company incurred net losses of $107.9 million for the three months ended March 31, 2010, and $242.7 million for the year ended December 31, 2009. The losses are primarily due to provisions for credit losses, goodwill impairment charges, and tax charges related to a valuation allowance on deferred tax assets. Due to the resulting deterioration in capital levels of the Company and the Bank, combined with (i) the uncertainty as to the Company's ability to raise sufficient amounts of new equity capital, (ii) recent regulatory actions with respect to the Company and the Bank, and (iii) the Company's inability to repay amounts owed under its loan agreements with its primary lender if the primary lender were to declare the amounts outstanding thereunder immediately due and payable, there is 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?6239 Midwest Banc Holdings, Inc. , is a community-based bank holding company headquartered in Melrose Park, Illinois. Through its wholly owned subsidiaries, the Company provides a wide range of services, including traditional banking services, personal and corporate trust services, and insurance brokerage and retail securities brokerage services. The Company's principal operating subsidiary is Midwest Bank and Trust Company, an Illinois state bank that operates 26 banking centers in the Chicago metropolitan area. MILESTONE SCIENTIFIC: Reports $83,922 Net Income for March 31 Qtr ----------------------------------------------------------------- Milestone Scientific Inc. swung to net income applicable to common stockholders of $83,922 for the three months ended March 31, 2010, from a net loss applicable to common stockholders of $561,642 for the same period in 2009. Product sales, net were $2,562,578 for the three months ended March 31, 2010, from $2,204,819 for the 2009 first quarter. At March 31, 2010, the Company had total assets of $5,907,803 against total current liabilities of $2,407,016; and total long- term liabilities of $577,546, resulting in stockholders' equity of $2,923,241. The Company said its recurring historical losses raise substantial doubt about its ability to continue as a going concern. In the Company's 2009 Annual Report, Holtz Rubenstein Reminick LLP, in New York City, 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 since inception. A full-text copy of the Company's quarterly report on Form 10-Q is available at no charge at http://ResearchArchives.com/t/s?624e Piscataway, N.J.-based Milestone Scientific Inc. (OTC BB: MLSS) -- http://www.milestonescientific.com/-- is engaged in pioneering proprietary, highly innovative technological solutions for the medical and dental markets. Central to the Company's IP platform and product development strategy is its patented CompuFlo(R) technology for the improved and painless delivery of local anesthetic. MILESTONE SCIENTIFIC: Annual Stockholders' Meeting Set for May 26 ----------------------------------------------------------------- The Annual Meeting of Stockholders of Milestone Scientific Inc. will be held at Brown, Rudnick, Berlack and Israels, 7 Times Square, in New York, on May 26, 2010 at 9:00 A.M. Eastern Time for the purpose of considering and acting upon: 1. the election of four directors; 2. the advisory approval of Holtz Rubenstein Reminick LLP as Milestone's independent auditors for the current year; and, 3. Any and all related matters, and other business as may legally come before the meeting and any adjournments or postponements thereof. The Board of Directors fixed the close of business on March 26, 2010, as the Record Date for determining the stockholders having the right to notice of and to vote at the meeting. At March 31, 2010, the Company had total assets of $5,907,803 against total current liabilities of $2,407,016; and total long- term liabilities of $577,546, resulting in stockholders' equity of $2,923,241. The Company said its recurring historical losses raise substantial doubt about its ability to continue as a going concern. In the Company's 2009 Annual Report, Holtz Rubenstein Reminick LLP, in New York City, 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 since inception. A full-text copy of the Company's proxy statement is available at no charge at http://ResearchArchives.com/t/s?624f Piscataway, N.J.-based Milestone Scientific Inc. (OTC BB: MLSS) -- http://www.milestonescientific.com/-- is engaged in pioneering proprietary, highly innovative technological solutions for the medical and dental markets. Central to the Company's IP platform and product development strategy is its patented CompuFlo(R) technology for the improved and painless delivery of local anesthetic. MORRIS PUBLISHING: Earns $171.5 Million in Q1 2010 -------------------------------------------------- Morris Publishing Group, LLC filed its quarterly report on Form 10-Q, showing net income of $171.5 million on $59.5 million of revenue for the three months ended March 31, 2010, compared with a net loss of $12.6 million on $64.2 million of revenue for the same period of 2009. As a result of the debt restructuring, the Company recorded pre- tax cancellation of debt income of $164.6 million during the first quarter of 2010. The Company's balance sheet as of March 31, 2010, showed $164.3 million in assets and $195.2 million of liabilities, for a member's deficiency in assets of $30.9 million. On February 17, 2010, the Bankruptcy Court confirmed the Company's prepackaged plan of reorganization, enabling the Company to emerge from bankruptcy on March 1, 2010. The equity ownership interests in the Company did not change as a result of the debt restructuring. A full-text copy of the quarterly report is available for free at: http://researcharchives.com/t/s?6241 Augusta, Ga.-based Morris Publishing Group, LLC, owns and operates 13 daily newspapers as well as non-daily newspapers, city magazines and free community publications in the Southeast, Midwest, Southwest and Alaska. The Company filed for Chapter 11 bankruptcy protection on January 19, 2010 (Bankr. S.D. Ga. Case No. 10-10134). James T. Wilson, Jr., Esq., who has an office in Augusta, Ga., is the Debtor's co-counsel. Lazard Ltd. is the Debtor's financial advisor, while Kurtzman Carson Consultants is its claims agent. The Company listed $100,000,001 to $500,000,000 in assets and $100,000,001 to $500,000,000 in liabilities. On January 19, 2010, the Debtors filed their joint prepackaged plan of reorganization pursuant to Chapter 11 of the Bankruptcy Code. The Plan was confirmed by the Bankruptcy Court on February 17, 2010. The Debtors emerged from bankruptcy on March 1, 2010. NEFF CORP: Commences Prearranged Reorganization Under Chapter 11 ---------------------------------------------------------------- Neff Rental, Inc. disclosed that the company and certain of its affiliates have commenced a prearranged reorganization under Chapter 11 of the United States Bankruptcy Code in New York to deleverage the Company's balance sheet and eliminate more than $400 million of debt. The Company has filed its prearranged chapter 11 plan, and has obtained full commitments from its existing revolving lenders to provide a $175 million debtor in possession and exit financing and has secured support from other key stakeholders, including the Company's largest first lien term loan lenders. The restructuring is backed by certain funds managed by Wayzata Investment Partners and Apollo Capital Management (holding, in the aggregate, in excess of 67% of the aggregate principal amount of the Company's first lien term loan), who have agreed to, among other things, vote in favor of the Company's prearranged plan, exchange their first lien term loans for equity, and have committed to backstop an investment of up to $119 million of new equity to recapitalize the Company's business and provide for future capital needs. In addition, the Company's plan is subject to higher and better offers that may allow for additional recovery to the Company's creditors. "The filing of the Company's Chapter 11 Plan culminates the process that the Company undertook several months ago to reduce debt and puts the Company on sound long term financial footing," said CEO Graham Hood. "The restructuring will provide liquidity for ongoing business needs and allow Neff to make significant investments in its rental equipment fleet." The Company's management team and employees will continue to operate the business in the ordinary course throughout the restructuring. "It is business as usual while we move forward to address our capital structure. During this process the Company will continue to deliver high quality equipment and services to its customers as normal," continued Hood. Together with cash flows from operations, the $175 million in committed financing provides stability and ample liquidity to fund daily operations without interruption, including payments to vendors and to meet all customer and employee obligations. With its committed exit financing and strong support from its stakeholders, the Company expects to complete its prearranged restructuring in the near term. In its petition, Neff Rental said estimated assets range from $100 million to $500 million, estimated liabilities range from $500 million to $1 billion. About Neff Corp. Neff Rental provides construction companies, golf course developers, industrial plants, the oil industry, and governments with reliable and quality equipment that is delivered on time where it is needed. With more than 1,000 employees operating from branches coast to coast, Neff Rental is ranked by Rental Equipment Register (RER) magazine as one of the nation's 10 largest equipment rental companies. Neff Corp. and its units, including Neff Rental Inc. filed for Chapter 11 on May 17, 2010 (Bankr. S.D.N.Y. Case No. 10-12610). Based in Miami, Neff has assets of $299 million and debt of $609 million, according to the disclosure statement explaining the plan. Funded debt totals $580 million. Revenue in 2009 was $192 million. NEFF CORP: Receives Approval of First Day Motions ------------------------------------------------- Neff Rental, Inc., a national, privately owned construction equipment rental company, and certain of its affiliates have commenced a prearranged reorganization under Chapter 11 of the United States Bankruptcy Code to deleverage the Company's balance sheet and eliminate more than $400 million of debt. The Company announced that it has received Bankruptcy Court approval of its "first day" motions at a hearing in the United States Bankruptcy Court for the Southern District of New York. The Bankruptcy Court granted interim approval for the Company's $175 million debtor-in- possession financing and use of its cash resources. The financing and cash resources will provide the Company with the financial flexibility to meet its ongoing financial obligations, including employee wages, healthcare benefits, supplier payments, and other operating expenses. The Bankruptcy Court also scheduled a hearing to approve the disclosure statement for the Debtors' plan of reorganization for July 12, 2010, ensuring that the Company's fast track restructuring remains on course. The Bankruptcy Court also issued a variety of orders on either a final or interim basis that will ensure that the Company continues to operate uninterrupted throughout the reorganization process. The first day motions granted by the Bankruptcy Court ensure that the filing will not impact the Company's day-to-day operations. "We appreciate and are pleased with the Bankruptcy Court's prompt approval of our first day motions," said Graham Hood, the Company's Chief Executive Officer. The approvals will help to ensure that the Company will be able to maintain regular operations and satisfy its employee obligations, while meeting its obligations to its suppliers and serving its customers as it works to realign its capital structure and maximize stakeholder value as expeditiously as possible. The Company's bankruptcy case number is 10-12610 (SCC). About Neff Corp. Neff Rental provides construction companies, golf course developers, industrial plants, the oil industry, and governments with reliable and quality equipment that is delivered on time where it is needed. With more than 1,000 employees operating from branches coast to coast, Neff Rental is ranked by Rental Equipment Register (RER) magazine as one of the nation's 10 largest equipment rental companies. Neff Corp. and its units, including Neff Rental Inc. filed for Chapter 11 on May 17, 2010 (Bankr. S.D.N.Y. Case No. 10-12610). Based in Miami, Neff has assets of $299 million and debt of $609 million, according to the disclosure statement explaining the plan. Funded debt totals $580 million. Revenue in 2009 was $192 million. NV ENERGY: Fitch Raises IDR & Sr. Unsecured Debt Rating to BB ------------------------------------------------------------- Fitch Ratings has upgraded the ratings for NV Energy, Inc. (NVE) and its utility operating subsidiaries Nevada Power Company d/b/a NV Energy (NPC) and Sierra Pacific Power Company d/b/a NV Energy (SPPC) as follows: NVE --Long-term Issuer Default Rating (IDR) to 'BB' from 'BB-'; --Senior unsecured debt to 'BB' from 'BB-'. NPC --Long-term IDR to 'BB+' from 'BB'; --Senior secured debt to 'BBB' from 'BBB-'; --Senior unsecured debt to 'BB+' from 'BB'. SPPC --Long-term IDR to 'BB+' from 'BB'; --Senior secured debt to 'BBB' from 'BBB-'. The Rating Outlook is revised to Stable from Positive. The rating actions affect more than $5.3 billion of long-term debt. The ratings upgrade and Stable Outlook primarily reflect the near- completion of a multi-year plan to significantly increase company- owned generation and a more balanced regulatory environment in Nevada. These factors have enhanced the utilities' operating characteristics and financial profile and set the stage for improved financial performance in future years. The ratings consider the companies' high debt leverage, which Fitch expects will moderate over the next three years, and a reduced growth capital spending budget that is limited to the completion of the Harry Allen Generating Station and other smaller projects included in each utility's latest Integrated Resource Plan (IRP) filing. Recent financial performance reflects the tough economic conditions in Nevada, a state particularly hard hit by the collapse of the housing market and broader recession, which has masked the benefits of the utilities' infrastructure investments. NVE's ratings are one notch below those of NPC and SPPC as a result of structural subordination to the cash flows of the utilities. A central element of NVE's operating strategy during the past several years has been to reduce the utilities' dependence on purchased power through the acquisition or construction of company-owned generation. The company has been successful in implementing this strategy, with the utilities having added more than 3,250 MW of company-owned generating capacity since 2004. SPPC's internal generating capacity became nearly sufficient to meet its peak load requirements following the completion of the Tracy Generating Station in 2008. The Tracy combined cycle plant added 541 MW of nominal rated generation and greatly improved the efficiency and reliability of SPPC's generating fleet. However, SPPC is expected to continue to purchase a significant portion of its power through existing long-term supply contracts, renewable energy supply contracts to satisfy mandates under Nevada's renewable energy portfolio standard (RPS), and future spot market purchases to take advantage of lower-cost hydroelectric or coal- generated power. Fitch also considers NPC's significant increase in company-owned generation to be good for credit quality. NPC's generating fleet is much more efficient now than it was in 2004, the company-owned generation is a more reliable source of power, and NPC is better able to directly control the cost of the power produced. NPC was capable of generating about 72% of its peak power need in 2009, up from just 35% in 2004. This figure should increase to about 80% with the completion of the 500 MW combined cycle plant at Harry Allen, expected to be operational in summer 2011. NPC will remain reliant on purchased power for a portion of its energy needs, though, including RPS-related renewable energy contracts. Although the utilities do generate some of their power from existing coal plants and a small but growing amount from renewables, their newer base load generation facilities are all powered by natural gas. This increased fuel source concentration exposes NPC and SPPC to natural gas prices that have historically been extremely volatile. This concern is largely mitigated by fuel and purchased power cost pass-through mechanisms allowed by the Public Utility Commission of Nevada (PUCN) that help provide some stability to cash flows. The base tariff energy rate (BTER) adjusts rates on a quarterly basis to reflect fuel and purchased power costs. The deferred energy accounting adjustment (DEAA) then provides recovery for (or refunding of) fuel and purchased power deferred energy balances on an annual basis. Fitch's internal forward price forecasts for natural gas also support a more stable pricing structure over the next few years. The PUCN pre-approves planned construction costs for recovery in future general rate cases (GRCs) and has mitigated regulatory lag by permitting use of a hybrid test year methodology. In addition, recently effective rate increases should allow the utilities to improve financial performance by recovering costs spent during the large capital spending program. The build-up of company-owned generation resulted in high debt levels, particularly at NPC, which prolonged the improvement of the entities' weak financial metrics. Based on Fitch's projections, NVE's cash flows and leverage are expected to benefit from the near-completion of the utilities' generation projects and likely recovery of costs in upcoming rate cases, with SPPC filing a GRC this summer and NPC filing a GRC in summer 2011. Capital expenditures peaked in 2008 at more than $1.5 billion, and then decreased to about $820 million in 2009. Fitch expects the company to maintain a more manageable capital spending budget going forward, spending $660 million in 2010 and roughly $570 million in each of 2011 and 2012. About $210 million in 2010 is the bulk of remaining construction costs for NPC's Harry Allen generating facility. In 2011 and 2012, roughly $200 million and $150 million, respectively, of expected capital expenditures are related to projects awaiting regulatory approval in the IRP filings, including the Advanced Service Delivery (ASD) smart grid project that has a $138 million grant from the Department of Energy, the ON Line transmission project, and several renewable energy projects. ON Line, which would be a 500 kilovolt transmission line jointly owned with Great Basin Transmission, LLC (not rated by Fitch), would connect SPPC in the north with NPC in the south. Fitch considers this jointly owned project favorable because it would be a cost-effective way to create energy-sharing efficiencies between NPC and SPPC and provide NPC with access to renewable energy resources in parts of northern and eastern Nevada, which would help NPC meet the RPS mandates. The utilities experienced extremely high residential customer growth during the early and middle part of the last decade, with annual growth rates of more than 5% in the NPC service territory and of more than 3% in the SPPC service territory as recently as 2005. However, the collapse of the housing market and the broader recession have greatly impacted both utilities' service territories. As of March 2010, unemployment was more than 13% in Nevada, and residential customer growth was slightly negative. The local economy is of concern to Fitch, because continued economic malaise in Nevada over a prolonged period would dampen the uplift in utility cash flows expected from the slowdown in capital spending. Fitch considers the utilities' liquidity position to be adequate to meet near-term needs, with both utilities having closed last month on three-year revolving credit facilities. NPC has a $600 million facility and SPPC has a $250 million facility. Availability under each facility is reduced by negative mark-to- market exposure of hedging obligations, but availability will remain at least $300 million at NPC and $125 million at SPPC. Hedging obligations are not large and are expected to decline as a result of the utilities' suspension of their hedging programs in October 2009. As of April 28, 2010, negative mark-to-market exposure reduced availability by $81.5 million at NPC and $27.8 million at SPPC. Both utilities currently have sufficient availability under their facilities. NVE is a holding company and parent to vertically integrated, regulated utilities NPC and SPPC, which collectively do business as NV Energy. NPC serves more than 825,000 electric customers in southern Nevada, including the Las Vegas metropolitan area. SPPC serves more than 365,000 electric and nearly 150,000 natural gas customers in northern Nevada and the Lake Tahoe region in California. OPUS EAST: Trustee Seeks Approval of APG Settlements ---------------------------------------------------- In separate filings, Jeoffrey L. Burtch, the Chapter 7 trustee for the Opus East Debtors' estates, asks Judge Walrath to approve two separate "profit participation and escrow agreements" he entered into with the United States of America, acting through the Secretary of the Army, and the Commonwealth Land Title Insurance Company, as escrow agent, in relation to the sale of certain property interests of the Debtors in an Aberdeen Proving Grounds development site. The Chapter 7 Trustee also seeks approval of a distribution of funds on deposit with the Escrow Agent. As previously reported, the Chapter 7 Trustee sought and obtained Court approval to sell certain property interests in the Aberdeen Site to St. John Properties, Inc. Debtors APG I LLC and APG II LLC are ground tenants for Lots 1 and 2 in Land Bay F of the Aberdeen Project Site and as ground tenants, the Debtors are contractually obligated to pay to the U.S. Government a "profit participation fee" that included the amount of "net sales proceeds" realized as a result of the transactions authorized by the Court's sale order. Dale R. Dube, Esq., at Cooch and Taylor, in Wilmington, Delaware, relates that the Chapter 7 Trustee and the U.S. Government were unable to calculate the Net Sales Proceeds because of the nature and timing of the transactions authorized by the Sale Order. Accordingly, the Chapter 7 Trustee and the Government agreed to address the Net Sales Proceeds issue by having the Trustee segregate from the sale proceeds and deposit with the Escrow Agent $67,976 for APG I and $477,188 for APG, Mr. Dube tells the Court. He notes that the amounts are to be administered pursuant to the terms of two Escrow Agreements. Mr. Dube avers that the Chapter 7 Trustee and the Government have complied with the terms of the Escrow Agreements by producing required documentation in support of the calculation of Net Sales Proceeds and by engaging in good faith and arm's-length negotiations. To fully address the matter on the profit participation fees, the parties wish to enter into settlement agreement, which provides that: -- The Chapter 7 Trustee and Government acknowledge and agree that the Escrow Agreements remain in full force and effect and is ratified and affirmed; -- Upon the Court's approval of the Proposed Settlement Agreement, the Chapter 7 Trustee and the Government will authorize the Escrow Agent to promptly distribute the principals of the Escrow Funds and any interests accrued; -- The distribution of the Escrow Fund principals and any accrued interest will be as follows: (a) $52,449 for APG I and $380,593 for APG II principal sums will be distributed to the Government, together with all accrued interests on the Escrow Funds; and (b) The remaining principal balance of the Escrow Funds, $15,527 for APG I and $96,595 for APG II, will be distributed to the Chapter 7 Trustee; -- Distributions to the Government will be made only after the Escrow Agent receives completed "W-9" forms from the Government, at which time the amounts to be distributed to the Government will be transferred to separate federally insured escrow accounts; and -- The Lot 1 and 2 Escrow Agreements will be completed upon the disbursement of the Escrow Funds by the Escrow Agent. About Opus East Rockville-based Opus East LLC has developed more than 13.3 million square feet of space since starting operations in 1994. It filed for Chapter 7 liquidation in the U.S. Bankruptcy Court for the District of Delaware. Opus East LLC listed $100 million to $500 million in debts, against $50 million to $100 million in assets in its Chapter 7 petition. Bankruptcy Creditors' Service, Inc., publishes Opus West Bankruptcy News. The newsletter tracks the separate Chapter 11 proceedings of Opus West Corp. and Opus South Corp. and Chapter 7 proceedings of Opus East their related debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) OPUS EAST: Wants Lease Decision Period Extension Until Aug. 25 -------------------------------------------------------------- Jeoffrey L. Burtch, the Chapter 7 trustee for the Opus East Debtors' estates, asks the United States Bankruptcy Court for the District of Delaware for a further extension of the time by which he must cause to assume or reject the executory contracts and unexpired property leases of the Opus East Debtors, through and including August 25, 2010. The Period was previously set by the Court for April 27, 2010. Dale Dube, Esq., at Cooch and Taylor P.A., in Wilmington, Delaware, contends that contracts and leases in the Opus East Debtors' cases remain both numerous and voluminous. "While the Chapter 7 Trustee has been able to limit their number through the sale or abandonment of various Debtor properties, it remains unreasonable to expect the Trustee to have analyzed each and every of the Contracts and Leases in connection with the administration of the Estates," Mr. Dube says. Moreover, Mr. Dube adds, the complex nature of the Debtors' organization makes it difficult to determine which of the Contracts and Leases are relevant to which individual Debtor, if at all. About Opus East Rockville-based Opus East LLC has developed more than 13.3 million square feet of space since starting operations in 1994. It filed for Chapter 7 liquidation in the U.S. Bankruptcy Court for the District of Delaware. Opus East LLC listed $100 million to $500 million in debts, against $50 million to $100 million in assets in its Chapter 7 petition. Bankruptcy Creditors' Service, Inc., publishes Opus West Bankruptcy News. The newsletter tracks the separate Chapter 11 proceedings of Opus West Corp. and Opus South Corp. and Chapter 7 proceedings of Opus East their related debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) OPUS EAST: Trustee to Assume Albrittain Contracts ------------------------------------------------- Dittmar Company, The TJO Trust and The Albrittain Family Trust previously opposed the Opus East Debtors' Chapter 7 Trustee's request to assume and assign a real estate sales contract and an escrow agreement the Debtors entered into with the Albrittain and TJO Trusts and Dittmar. Subsequently, the Objection was voluntarily withdrawn and upon the withdrawal, the Court granted the Opus East Trustee's authority to assume and assign the Albrittain Contracts. COPT Acquisitions, Inc. is the assignee of the Sales Contract and the Escrow Agreement. The Sales Contract and the Escrow Agreement have not expired and remain in full force and effect. As previously reported, the Debtors already deposited $200,000 into the Escrow Account, but failed to make another deposit which would have brought the total amount to $250,000. In this light, the Court ordered COPT Acquisitions to pay the Trusts $250,000 no later than May 7, 2010. Moreover, the Opus East Trustee and the Albrittain and TJO Trusts will jointly direct Chicago Title Insurance Company to terminate the Escrow Agreement established pursuant to the Sales Contract and to immediately pay the escrowed funds to the Trusts for application to the purchase price at the closing of the sale. COPT is also directed to pay to the Chapter 7 Trustee $50,000 for the benefit of the Opus East estate. About Opus East Rockville-based Opus East LLC has developed more than 13.3 million square feet of space since starting operations in 1994. It filed for Chapter 7 liquidation in the U.S. Bankruptcy Court for the District of Delaware. Opus East LLC listed $100 million to $500 million in debts, against $50 million to $100 million in assets in its Chapter 7 petition. Bankruptcy Creditors' Service, Inc., publishes Opus West Bankruptcy News. The newsletter tracks the separate Chapter 11 proceedings of Opus West Corp. and Opus South Corp. and Chapter 7 proceedings of Opus East their related debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) OPUS WEST: Gets Nod of RGH Geotechnical Settlement -------------------------------------------------- Debtor Opus West Construction Corporation won approval from the U.S. Bankruptcy Court for the Northern District of Texas of a compromise and settlement of claims and controversy with RGH Geotechnical and Environmental Consultants. The relationship between OWCC and RGH stems from a certain "Agreement Between Contractor and Consultant for Geotechnical Consultants" the parties entered into with respect to a certain project of OWCC, pursuant to which OWCC owes certain indemnity obligations to RGH. Before the Petition Date, STRS Ohio CA Real Estate Investments I LLC filed claims against OWCC and RGH relating to a property located at 3680 Kelsey Knolls, in Santa Rosa, California, commonly known as The Boulders at Fountaingrove. Subsequently, RGH filed Claim No. 577 on November 9, 2009, asserting an indemnity claim against OWCC in an unknown amount related to STRS' claim against OWCC and RGH with respect to The Boulders project. Clifton R. Jessup, Esq., at Greenberg Traurig LLP, in Dallas, Texas, tells the Court that OWCC and RGH desire to avoid the expense, inconvenience, delay, and uncertainty of litigation by compromising and settling claims and controversies arising prepetition under the parties' Contract related to The Boulders project and raised in the RGH Proof of Claim. Accordingly, the parties agree that: a. RGH's Claims against OWCC will be withdrawn; and b. RGH retains any and all rights to pursue an indemnity claim to the extent the claims are directed solely to insurance proceeds available under insurance policies providing or potentially providing any relevant coverage for OWCC. About Opus West Corporation Based in Phoenix, Arizona, Opus West Corporation is a full-service real estate development firm that focuses on acquiring, constructing, operating, managing, leasing and/or disposing of real estate development projects primarily located in the western United States. Opus West and its affiliates filed for Chapter 11 on July 6, 2009 (Bankr. N.D. Tex. Case No. 09-34356). Clifton R. Jessup, Jr., at Greenberg Traurig, LLP, represents the Debtors in their restructuring efforts. Franklin Skierski Lovall Hayward, LLP, is co-counsel to the Debtors. Pronske & Patel, P.C., is conflicts counsel. Chatham Financial Corp. is financial advisor. BMC Group is the Company's claims and notice agent. As of May 31, Opus West -- together with its non-debtor affiliates -- had $1,275,334,000 in assets against $1,462,328,000 in debts. In its bankruptcy petition, Opus West said it had assets and debts both ranging from $100 million to $500 million. Opus West joins affiliates that previously filed for bankruptcy. Opus East LLC, a real estate operator from Rockville, Maryland, commenced a Chapter 7 liquidation on July 1 in Delaware. Opus South Corp., a Florida condominium developer based in Atlanta, filed a Chapter 11 petition April 22 in Delaware. Bankruptcy Creditors' Service, Inc., publishes Opus West Bankruptcy News. The newsletter tracks the separate Chapter 11 proceedings of Opus West Corp. and Opus South Corp. and their related debtor-affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000). PACIFIC ETHANOL: Posts $10.9 Million Net Loss in Q1 2010 -------------------------------------------------------- Pacific Ethanol, Inc. filed its quarterly report on Form 10-Q, showing a net loss of $10.9 million on $71.3 million of revenue for the three months ended March 31, 2010, compared with a net loss of $25.7 million on $86.7 million of revenue for the corresponding period of 2009. The Company's balance sheet as of March 31, 2010, showed $231.9 million in assets and $333.4 million of liabilities, for a stockholders' deficit of $101.5 million. Hein & Associates LLP, in Irvine, Calif., expressed substantial doubt about the Company's ability to continue as a going concern after auditing the Company's financial statements for the year ended December 31, 2009. The independent auditors noted that the Company does not have sufficient liquidity to meet its anticipated working capital, debt service and other liquidity needs in the very near term. "As a result of ethanol industry conditions that have negatively affected our business and ongoing financial difficulties, we believe we have sufficient liquidity to meet our anticipated working capital, debt service and other liquidity needs until either June 30, 2010, if we are unable to timely close a prospective $5.0 million credit facility, or through December 31, 2010, if we are able to timely close the credit facility and either pay or further defer a $1.5 million payable owed to a judgment creditor on June 30, 2010. These expectations concerning our available liquidity until June 30, 2010, or through December 31, 2010, presume that a creditor does not pursue any action against us due to our default on an aggregate of $17.5 million of remaining principal, plus accrued interest and fees, and that we maintain our current levels of borrowing availability under Kinergy's line of credit. Accordingly, there continues to be substantial doubt as to our 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?623d Sacramento, Calif.-based Pacific Ethanol, Inc. (NASDAQ GM: PEIX) - - http://www.ethanol.net/-- produces and sells ethanol and its co-products in the western United States, primarily in California, Nevada, Arizona, Oregon, Colorado, Idaho, and Washington. On May 17, 2009, five indirect wholly-owned subsidiaries of the Company each filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code. These subsidiaries are: Pacific Ethanol Holding Co. LLC; Pacific Ethanol Madera LLC; Pacific Ethanol Columbia, LLC; Pacific Ethanol Stockton, LLC; and Pacific Ethanol Magic Valley, LLC. The cases are consolidated (for procedural purposes only) and are jointly administered under Case No. 09- 11713. Judge Kevin Gross handles the case. Attorneys at Cooley Godward Kronish LLP represent the Debtors as counsel. Attorneys at Potter Anderson & Corroon LLP are co-counsel. Epiq Bankruptcy Solutions LLC is the claims agent. Pacific Ethanol Holding disclosed $50 million to $100 million in assets and $100 million to $500 million in debts in its petition. Neither Pacific Ethanol, Inc., as the parent company, nor any of its other direct or indirect subsidiaries, including Kinergy Marketing LLC and Pacific Ag. Products, LLC, have filed petitions for relief under the Bankruptcy Code. PCAA PARENT: Has Approved Sale and Confirmed Plan ------------------------------------------------- Bill Rochelle at Bloomberg News reports that the bankruptcy judge told Parking Co. of America Airports LLC at a May 14 confirmation hearing that she will sign an order approving the Chapter 11 plan. The plan incorporates a settlement where unsecured creditors with $8.9 million in claims will receive at least $2.825 million, before taking the price increase into consideration. According to the report, the judge also approved the sale of the assets for $141 million to Commercial Finance Services 2907 Inc., which won the auction by increasing the price by 26%. About PCAA Parent Essington, Pennsylvania-based PCAA Parent, LLC, runs the largest domestic off-site airport parking business, operating 31 off-site airport parking facilities comprising over 40,000 parking spaces near 20 major airports across the U.S. The Company owns or leases its off-airport parking facilities in, among other states, California, Arizona, Colorado, Texas, Georgia, Tennessee, Pennsylvania, Connecticut, New York, New Jersey, and Illinois. The Company filed for Chapter 11 bankruptcy protection on January 28, 2010 (Bankr. D. Del. Case No. 10-10250). John Henry Knight, Esq.; Lee E. Kaufman, Esq.; and Mark D. Collins, Esq.; and Zachary I. Shapiro, Esq., at Richards, Layton & Finger, P.A., assist the Company in its restructuring effort. The Company listed $50,000,001 to $100,000,000 in assets and $100,000,001 to $500,000,000 in liabilities. Bloomberg News says assets were on the books for $94 million on Sept. 30, when debt totaled $233 million. The Company's affiliates -- PCAA Chicago, LLC; Parking Company of America Airports, LLC; PCA Airports, Ltd.; PCAA GP, LLC; Parking Company of America Airports Phoenix, LLC; RCL Properties, LLC; PCAA LP, LLC; PCAA Properties, LLC; Airport Parking Management, Inc.; PCAA SP-OK, LLC; PCAA SP, LLC; PCAA Oakland, LLC; and PCAA Missouri, LLC -- filed separate Chapter 11 bankruptcy petitions. PCAA PARENT: Aurora Capital Agrees to Buy Firm's Assets ------------------------------------------------------- An affiliate of Aurora Capital Group has entered into a definitive agreement to purchase the assets of Parking Company America Airports, a leading off-airport parking operator. PCAA currently operates 27 parking lot facilities near major domestic airports including seven of the nation's ten busiest airports and maintains over 30,000 parking spaces nationwide. Anthony DiSimone, Managing Partner of Aurora Resurgence, the complex situations fund within Aurora Capital Group, commented, "We are excited about the long term prospects available to the new company and look forward to bringing our resources to PCAA to support its employees in building a leading national platform." As previously announced, on January 28, 2010, PCAA filed for Chapter 11 protection in the United States Bankruptcy Court for the District of Delaware. The Bankruptcy Court established a bid process whereby interested parties, including Aurora, could submit bids for PCAA's assets. The Bankruptcy Court has approved the sale and the parties are working together to close the transaction as expeditiously as practical. The transaction is also subject to the expiration or early termination of the waiting period under the Hart-Scott-Rodino Act and other customary closing conditions. About Aurora Capital Group Aurora Capital Group is a Los Angeles-based private equity firm managing over $2.0 billion with two distinct investment strategies. Aurora Resurgence invests in debt and equity securities of middle-market companies and targets complex situations that are created by operational or financial challenges either within a company or a broader industry. Aurora Equity focuses principally on control-investments in middle-market industrial, manufacturing and selected service oriented businesses. About PCAA Parent Essington, Pennsylvania-based PCAA Parent, LLC, runs the largest domestic off-site airport parking business, operating 31 off-site airport parking facilities comprising over 40,000 parking spaces near 20 major airports across the U.S. The Company owns or leases its off-airport parking facilities in, among other states, California, Arizona, Colorado, Texas, Georgia, Tennessee, Pennsylvania, Connecticut, New York, New Jersey, and Illinois. The Company filed for Chapter 11 bankruptcy protection on January 28, 2010 (Bankr. D. Del. Case No. 10-10250). John Henry Knight, Esq.; Lee E. Kaufman, Esq.; and Mark D. Collins, Esq.; and Zachary I. Shapiro, Esq., at Richards, Layton & Finger, P.A., assist the Company in its restructuring effort. The Company listed $50,000,001 to $100,000,000 in assets and $100,000,001 to $500,000,000 in liabilities. Bloomberg News says assets were on the books for $94 million on Sept. 30, when debt totaled $233 million. The Company's affiliates -- PCAA Chicago, LLC; Parking Company of America Airports, LLC; PCA Airports, Ltd.; PCAA GP, LLC; Parking Company of America Airports Phoenix, LLC; RCL Properties, LLC; PCAA LP, LLC; PCAA Properties, LLC; Airport Parking Management, Inc.; PCAA SP-OK, LLC; PCAA SP, LLC; PCAA Oakland, LLC; and PCAA Missouri, LLC -- filed separate Chapter 11 bankruptcy petitions. PHILADELPHIA NEWSPAPERS: Inks $139MM Ch. 11 Deal with Lenders ------------------------------------------------------------- Bankruptcy Law360 reports that Philadelphia Newspapers LLC said Friday it had worked out lingering disputes with its creditors and a group of lenders that offered a winning $139 million bid for the bankrupt publisher, paving the way for an exit from Chapter 11 with a new executive at the helm. Philadelphia Newspapers -- http://www.philly.com/-- owns and operates numerous print and online publications in the Philadelphia market, including the Philadelphia Inquirer, the Philadelphia Daily News, several community newspapers, the region's number one local Web site, philly.com, and a number of related online products. The Company's flagship publications are the Inquirer, the third oldest newspaper in the country and the winner of numerous Pulitzer Prizes and other journalistic recognitions, and the Daily News. Philadelphia Newspapers and its debtor-affiliates filed for Chapter 11 bankruptcy protection on February 22, 2008 (Bankr. E.D. Pa. Case No. 09-11204). Mark K. Thomas, Esq., and Paul V. Possinger, Esq., at Proskauer Rose LLP in Chicago, Illinois; and Lawrence G. McMichael, Esq., Christie Callahan Comerford, Esq., and Anne M. Aaronson, Esq., at Dilworth Paxson LLP, in Philadelphia, Pennsylvania, serve as bankruptcy counsel. The Debtors' financial advisor is Jefferies & Company Inc. The Garden City Group, Inc., serves as claims and notice agent. Ben Logan, Esq., at O'Melveny & Myers LLP in Los Angeles, California; and Gary Schildhorn, Esq., at Eckert Seamans Cherin & Mellott, LLC in Philadelphia, represent the Official Committee of Unsecured Creditors. Fred S. Hodara, Esq., Abid Qureshi, Esq., and Alexis Freeman, Esq., at Akin Gump Strauss Hauer & Feld LLP in New York, represent the Steering Group of Prepetition Secured Lenders. Philadelphia Newspapers listed assets and debts of $100 million to $500 million in its bankruptcy petition. PILGRIM'S PRIDE: Prisoner Tries to Intervene in Case ---------------------------------------------------- Bill Rochelle at Bloomberg News reports that Jonathan Lee Riches, an inmate in a federal penitentiary named has latched onto another target, Pilgrim's Pride Corp., which emerged from bankruptcy reorganization at the end of December. Mr. Riches, who claims he's also known as Bernard Madoff, is appealing denial of his motion to intervene in the Pilgrim's Pride bankruptcy. Mr. Riches says in his latest filing on May 6 that Pilgrim's Pride "continues to serve us uncooked tainted chicken in prison, in which we got food poisoning from." He also says there are videotapes of company employees engaging in "chicken pornography." According to Bloomberg, Mr. Riches is an experienced litigator. In denying a motion to intervene in the Madoff case, U.S. Bankruptcy Judge Burton R. Lifland said that Riches has filed more than a thousand lawsuits in federal district courts. Mr. Riches is currently incarcerated at the Federal Medical Center in Lexington, Kentucky. His release date is March 2012, according to the Federal Bureau of Prisons Web site. About Pilgrim's Pride Pilgrim's Pride Corporation -- http://www.pilgrimspride.com-- employs approximately 41,000 people and operates chicken processing plants and prepared-foods facilities in 12 states, Puerto Rico and Mexico. The Company's primary distribution is through retailers and foodservice distributors. Pilgrim's Pride Corp. filed for Chapter 11 on December 1, 2008 (Bankr. N.D. Tex. Lead Case No. 08-45664). Weil, Gotshal & Manges LLP served as bankruptcy counsel. Lazard Freres & Co., LLC, was the Company's investment bankers. Kurtzman Carson Consulting LLC served as claims and notice agent. Kelly Hart and Brown Rudnick represented the official equity committee. Attorneys at Andrews Kurth LLP represented the official committee of unsecured creditors. On Dec. 10, 2009, the Bankruptcy Court entered an order confirming Pilgrim's Pride's Chapter 11 plan of reorganization. The plan relies upon a sale of the business to JBS SA. Under the Plan, creditors are paid in full. Existing owners retained 34% of the equity. PROJECT ORANGE: Asks for Court Okay to Obtain DIP Financing ----------------------------------------------------------- Project Orange Associates, LLC, seeks authority from the U.S. Bankruptcy Court for the Southern District of New York to obtain postpetition secured financing from a syndicate of lenders led by Gas Alternative Systems, Inc., as administrative agent. The DIP lenders have committed to provide interim financing of $75,000,000 and final financing of $150,000. Timothy W. Walsh, Esq., from DLA Piper LLP (US), the attorney for the Debtor, explains that the Debtor needs the money to fund its Chapter 11 case, pay suppliers and other parties. The DIP facility will mature 180 days from the petition date. The DIP facility will incur interest at Prime plus three percent (3%) per annum. In the event of default, the Debtors will pay an additional 3% default interest per annum. The credit agreement with Gas Alternative provides that the DIP Lender is granted an administrative claim for the amount of the DIP Loan. The DIP Lender has agreed to subordinate its administrative claim to quarterly fees payable to the Office of the U.S. Trustee plus any interest owed thereon and any valid secured claim. The DIP Loan is unsecured and there is no collateral. Accordingly, the DIP Loan is entitled to administrative expense priority. In addition, the DIP Lender has agreed to subordinate its administrative claim to the Carve-Out Expenses and any valid secured claim. The Credit Agreement does provide the DIP Lender the option to convert the DIP Loan to equity in the event a plan of reorganization is confirmed in the Chapter 11 case. The DIP Lender is not requesting any fees with respect to the DIP Loan, nor is the DIP Lender being reimbursed for legal expenses and costs. A copy of the DIP financing agreement is available for free at: http://bankrupt.com/misc/PROJECT_ORANGE_dippact.pdf New York-based Project Orange Associates, LLC, filed for Chapter 11 bankruptcy protection on April 29, 2010 (Bankr. S.D.N.Y. Case No. 10-12307). Timothy W. Walsh, Esq., at DLA Piper LLP (US), assists the Company in its restructuring effort. The Company estimated its assets and debts at $10,000,001 to $50,000,000. PROJECT ORANGE: Gets Interim Okay to Use Cash Collateral -------------------------------------------------------- Project Orange Associates, LLC, sought and obtained interim authorization from the Hon. Martin Glenn of the U.S. Bankruptcy Court for the Southern District of New York to use the cash collateral. Until recently, the Debtor has also supplied steam, at a highly discounted rate, to Syracuse University, fulfilling the needs of the University's campus buildings, as well providing steam for resale by the University to three area hospitals and a state college. The Debtor profits by trading daily in energy markets and on its ability to produce energy at a price that on any given day which is beneath that day's market "bid" price. This distinction will be crucial when analyzing the University's potential security interests. The University will likely assert a security interest in revenues generated by the Debtor pursuant to these contracts: 1) A Mortgage and Security Agreement, dated April 5, 1991; 2) A Mortgage and Security Agreement, dated April 5, 1991; 3) A Security Agreement, dated April 5, 1991; 4) A Security Agreement, dated April 5, 1991. The Agreements provide certain security interests which while clearly intended to apply to contracts, and specifically long term energy contacts like the 40-year contract the Debtor had with New York State when the Agreements were entered into, the University may now allege these Agreements grant a security interest in the Debtor's current revenues. While the Debtor believes that such an argument is fallacious, out of an abundance of caution, the Debtor files this motion seeking to use cash collateral, to the extent its revenues are cash collateral. Timothy Walsh, Esq., at DLA Piper LLP (US), the attorney for the Debtor, explains that the Debtor needs the money to fund its Chapter 11 case, pay suppliers and other parties. In exchange for using the cash collateral, the Debtors propose to grant the University replacement security interests and liens in and upon all assets and properties. The Debtor makes much of the change in its business from selling electricity to Niagara Mohawk pursuant to a long-term contract and its current operation of selling power as a participant in the New York Independent System Operator (NYISO). The University submits that, despite the change in the Debtor's business, the Debtor continues to sell electricity pursuant to agreements to sell on a day-ahead basis in the spot market, which agreements constitute the University's collateral, together with the proceeds of the sales. The University also holds a security interest in the payments made by the NYISO for the electricity capacity, energy and voltage support. "It is the University's position that the University was granted a security interest in all of the proceeds of the electricity being sold by the Debtor from the Facility," the University stated. The Court has set a final hearing for June 3, 2010, at 2:00 p.m. on the Debtor's request to use cash collateral. New York-based Project Orange Associates, LLC, filed for Chapter 11 bankruptcy protection on April 29, 2010 (Bankr. S.D.N.Y. Case No. 10-12307). Timothy W. Walsh, Esq., at DLA Piper LLP (US), assists the Company in its restructuring effort. The Company estimated its assets and debts at $10,000,001 to $50,000,000. RAHAXI INC: Killian McGrath Resigns From Board of Directors ----------------------------------------------------------- Killian McGrath submitted a letter of resignation from his position as a member of the Board of Directors of Rahaxi, Inc. with an effective date of May 10, 2010. Mr. McGrath left the company for personal reasons and to explore other business opportunities. Rahaxi, Inc., provides payment services and processing. Its principal offices are in Wicklow, Ireland; the Company also has offices in Helsinki, Finland; and Santo Domingo, the Dominican Republic. At December 31, 2009, the Company had total assets of $2,881,216 against total current liabilities of $6,102,244 and long-term portion of notes payable of $887,977; resulting in stockholders' deficit of $4,602,784. The Company believes that anticipated revenues from operations will be insufficient to satisfy its ongoing capital requirements for the next 12 months. If the Company's financial resources are insufficient, the Company will require additional financing in order to execute its operating plan and continue as a going concern. The Company cannot predict whether this additional financing will be in the form of equity or debt, or be in another form. The Company may not be able to obtain the necessary additional capital on a timely basis, on acceptable terms, or at all. In any of these events, the Company may be unable to implement its current plans for expansion, repay its debt obligations as they become due, or respond to competitive pressures, any of which circumstances would have a material adverse effect on its business, prospects, financial condition and results of operations. Management is pursuing all available options to provide the Company with the ability to continue as a going concern. The Company continues to pursue financing through the sale of its stock in private placements to individual investors. However, given the challenges presented by the current capital markets, as well as the decline in the Company's stock price and the Company's continued losses, management is considering a broader range of options, which may include a registered offering for investors, additional debt issuances or financings at the subsidiary level, such as the sale of a portion of Rahaxi Processing Oy. The Company may also pursue the acquisition of certain strategic industry partners where appropriate. RASER TECHNOLOGIES: Incurs $7.6 Million Net Loss in Q1 2010 ----------------------------------------------------------- Raser Technologies, Inc.filed its quarterly report on Form 10-Q, showing a net loss of $7.6 million on $1.0 million of revenue for the three months ended March 31, 2010, compared with a net loss of $7.7 million on revenue for the same period of 2009. The Company's balance sheet as of March 31, 2010, showed $148.2 million in assets, $136.6 million of liabilities, $2.6 million of preferred stock, and $9.0 million of stockholders' equity. Hein & Associates LLP, in Denver, in its report on the Company's financial statements for the year ended December 31, 2009, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has suffered recurring losses, has used significant cash for operating activities since inception, has significant purchase commitments in 2010 and has a lack of sufficient working capital. The Company is not currently generating significant revenues. "In addition, we may encounter difficulties in raising additional funds because of the deficiency notice that we received from the New York Stock Exchange on April 27, 2010. Section 802.01C of the NYSE's Listed Company Manual requires that a company's common stock have a minimum average closing price of $1.00 per share during a consecutive 30-day trading period. Under the NYSE's rules, we have six months from the date of the notice to bring our average common stock price over a 30-day trading period back above $1.00 or we will be delisted from the NYSE." A full-text copy of the quarterly report is available for free at: http://researcharchives.com/t/s?6247 Based in Provo, Utah, Raser Technologies (NYSE: RZ) -- http://www.rasertech.com/-- is an environmental energy technology company focused on geothermal power development and technology licensing. Raser's Power Systems segment is seeking to develop clean, renewable geothermal electric power plants and bottom- cycling operations, incorporating licensed heat transfer technology. Raser's Transportation and Industrial segment focuses on extended-range plug-in-hybrid vehicle solutions and using Raser's award-winning Symetron(TM) technology to improve the torque density and efficiency of the electric motors and drive systems used in electric and hybrid-electric vehicle powertrains and industrial applications. REFCO INC: Investors Settle with Underwriters & THL Entities ------------------------------------------------------------ RH Capital Associates LLC and Pacific Investment Management Company LLC, as lead plaintiffs in a consolidated investor lawsuit alleging fraud at Refco Inc., entered into two separate settlements with certain underwriter defendants, audit committee defendants and certain THL Entities in April 2010. The Lawsuit is In re Refco, Inc. Securities Litigation, 05-Civ.- 8626, originally commenced in 2005 and currently pending in the U.S. Bankruptcy Court for the Southern District of New York under Judge Jed S. Rakoff. The Lawsuit sought to hold certain parties, including Refco affiliates, former Refco officers auditors, and underwriters, responsible for the Company's failure to disclose "hundreds of millions of dollars in debt owed to it by former Chief Executive Officer Phillip Bennett." The Underwriters Defendants have agreed to settle the claims of the Refco investors for $49.5 million in cash. The Underwriters Settling Defendants are Credit Suisse Group (USA) LLC; Bank of America Securities LC, Deutsche Bank Securities Inc.; Goldman Sachs & Co.; Merrill Lynch, Pierce, Fenner & Smith Incorporated; J.P. Morgan Securities Inc.; HSBC Securities (USA) Inc.; William Blair Company, L.L.C.; BMO Capital Markets Corp. fka Harris Nesbitt Corp.; Samuel A. Ramirez & Company, Inc.; Muriel Siebert & Co., Inc.; and The Williams Capital Group, L.P. Also under the Underwriters Settlement, the parties agree that claims against defendants CMG Institutional Trading, LLC, and Utendahl Capital Partners, L.P. will be dismissed. The Underwriters Settlement was presented to the District Court for preliminary approval on April 20, 2010. Grant & Eisenhofer P.A. and Bernstein Litowitz Berger & Grossman LP represent the Lead Investor Plaintiffs in the Lawsuit. "The [underwriters] settlement provides substantial monetary benefits to the settlement class," according to James Sabella, Esq., of Grant & Eisenhofer, Bloomberg News cites. "These benefits must be compared to the risks that protracted and contested litigation, including dispositive motion practice, trial and likely appeals, might lead to no recovery, or a smaller recovery, against the underwriter defendants." The Lead Plaintiffs previously entered into a settlement with Underwriter Defendant Sandler O'Neill & Partners, L.P., for a payment of 3.5 million in cash in October 2008. The District Court preliminarily approved the Sandler Settlement on November 5, 2008. If the District Court grants final approval to the two Underwriter Settlements, the claims against the Underwriter Defendants will be resolved for a total payment of $53 million. In a related development, the Audit Committee Defendants and the THL Defendants agreed to settle the claims of the Refco Investors for $130 million in cash plus an amount equal to 50% of any additional amount that the THL Entities receive as restitution from the government in connection with their claims against Refco, up to a maximum additional amount of $10 million. The Audit Committee Defendants are Ronald L. O'Kelley, Leo R. Breitman and Nathan Gantcher. The THL Defendants are Thomas H. Lee Equity Fund V, L.P.; Thomas H. Lee Parallel Fund V, L.P.; Thomas H. Lee Equity (Cayman) Fund V, L.P.; Thomas H. Lee Partners, L.P.; THL Equity Advisors V, LLC; Thomas H. Lee Investors Limited Partnership; The 1997 Thomas H. Lee Nominee Trust; Thomas H. Lee, David V. Harkins; Scott L. Jaeckel and Scott A. Schoen. The Audit Committee/THL Entities Settlement was presented to the District Court for preliminary approval on April 5, 2010. Previously, the Lead Plaintiffs reached an accord with Austria's Bawag PSK Bank for $140 million in April 2007. Grant Thornton LLP, Refco's former outside auditing firm, hasn't settled with the Refco Investors. About Refco Inc. Headquartered in New York, Refco Inc. -- http://www.refco.com/-- was a diversified financial services organization with operations in 14 countries and an extensive global institutional and retail client base. Refco's worldwide subsidiaries were members of principal U.S. and international exchanges, and were among the most active members of futures exchanges in Chicago, New York, London and Singapore. Refco was also a major broker of cash market products, including foreign exchange, foreign exchange options, government securities, domestic and international equities, emerging market debt, and OTC financial and commodity products. Refco was one of the largest global clearing firms for derivatives. The Company had operations in Bermuda. The Company and 23 of its affiliates filed for Chapter 11 protection on October 17, 2005 (Bankr. S.D.N.Y. Case No. 05- 60006). J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represented the Debtors in their restructuring efforts. Milbank, Tweed, Hadley & McCloy LLP, represented the Official Committee of Unsecured Creditors. Refco reported US$16.5 billion in assets and US$16.8 billion in debts to the Bankruptcy Court on the first day of its Chapter 11 cases. The Court confirmed the Modified Joint Chapter 11 Plan of Refco Inc. and certain of its Direct and Indirect Subsidiaries, including Refco Capital Markets, Ltd., and Refco F/X Associates, LLC, on December 15, 2006. That Plan became effective on Dec. 26, 2006. Pursuant to the plan, RJM, LLC, was named plan administrator to reorganized Refco, Inc. and its affiliates, and Marc S. Kirschner as plan administrator to Refco Capital Markets, Ltd. Bankruptcy Creditors' Service, Inc., publishes Refco Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by Refco Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) REFCO INC: Mayer Brown Not Liable for Mess, 2nd Cir. Affirms ------------------------------------------------------------ The U.S. Court of Appeals for the Second Circuit handed down a ruling on April 27, 2010, affirming Judge Gerard E. Lynch's dismissal order of securities fraud claims against Mayer Brown LLP and Joseph P. Collins in connection with Refco Inc. The April 27 ruling was issued in a civil lawsuit, 09-1619-cv, brought by Pacific Investment Management Company LLC and RH Capital Associates LLC against Mayer Brown and Mr. Collins in the 2nd Circuit. Mayer Brown is Refco's former outside legal counsel. Mr. Collins is the Mayer Brown partner in charge of the Refco account. PIMCO and RH Capital, as representative plaintiffs of certain Refco investors, alleged that Mayer Brown and Mr. Collins violated federal securities law in the course of representing Refco Inc. They asserted that Mayer Brown participated in 17 sham Refco loan transactions between 2000 and 2005. The 2nd Circuit opined that "[a] secondary actor [including counsel or lawyers] can be held liable for false statements in a private damages action for securities fraud only if the statements are attributed to the defendant at the time the statements are disseminated." It held, upon analysis, that attribution is required for secondary actors to be liable in a private damages action for securities fraud. "Absent attribution, [the] [P]laintiffs cannot show that they relied on [Mayer Brown's] own false statements, and participation in the creation of those statements amounts, at most, to aiding and abetting securities fraud," the 2nd Circuit held. The 2nd Circuit ruling was entered by Circuit Court Judge Jose A. Cabranes, Circuit Court Judge Barrington D. Parker Jr. and Judge Carol B. Amon for the U.S. District Court for the Eastern District of New York, sitting by designation. The Plaintiffs originally filed the securities law violation complaint against the Mayer Brown Defendants in the U.S. District Court for the Southern District of New York in October 2007. District Court Judge Lynch dismissed the Plaintiffs' claims in March 2009 as he found that no statements in the Refco documents were attributed to Mayer Brown and held that the Plaintiffs failed to adequately lead a violation of federal securities law. The Plaintiffs thus brought the civil case to the 2nd Circuit for a review of the District Court's 2009 decision. Applying the attribution standard to the alleged false statements, the 2nd Circuit concluded that Judge Lynch properly dismissed the Plaintiff's claims against Mayer Brown and Mr. Collins. "No statements in the Offering Memorandum, the Registration Statement, or the IPO Registration Statement are attributed to Collins, and he is not even mentioned by name in any of those documents." The 2nd Circuit also agrees with the District Court's ruling that the Plaintiff's claims for 'scheme liability' are foreclosed by the Supreme Court's decision in Stoneridge Investment Partners, LLC v. Scientific-Atlanta, Inc., 552 U.S. 148(2008). "As was the case in Stoneridge, it was Refco, not the Mayer Brown Defendants, that filed fraudulent financial statements; nothing the Mayer Brown Defendants did made it necessary or inevitable for Refco to record the transactions as it did." Moreover, the 2nd Circuit declines to grant the Plaintiffs leave to amend their Complaint. "Plaintiffs [did] not disclose to us . . . recently discovered facts and there is therefore no basis for suggesting, much less concluding, that plaintiffs could amend their claims against Mayer Brown and Collins in a way that would make them viable." A full-text copy of the 27-page 2nd Circuit ruling is available for free at: http://bankrupt.com/misc/Refco_09-1619cvOpinion.pdf James Sabella, Esq., of Grant & Eisenhofer, representing Plaintiff Pacific Investment Management, disagrees with the Circuit Court ruling, according to the New York Law Journal. "It practically insulates a lot of the perpetrators of fraud from liability to the victims of fraud," the news source quoted Mr. Sabella as saying. Pacific Investment is considering its options, according to Mr. Sabella. The 2nd Circuit lawsuit one of three lawsuits against Mayer Brown that has been dismissed. Another lawsuit is pending before Judge Jed S. Rakoff, captioned Thomas H. Lee Equity Fund v. Mayer Brown Rowe & Maw, 07-cv-06767, the New York Law Journal notes. The lawsuit alleges "racketeering in connection with Thomas H. Lee's $507 million leveraged buyout of a controlling interests in Refco in 2004," the report notes. NASCAT Dismayed Over 2nd Cir. Ruling WASHINGTON, D.C. -- April 28, 2010 -- The National Association of Shareholder and Consumer Attorneys (NASCAT) expressed dismay with the April 27 decision in PIMCO Funds, et al v. Mayer Brown LLP, et al. by a three-judge panel of the U.S. Court of Appeals for the Second Circuit, which continued a pattern of rigid and overly technical interpretations of investors' rights under the federal securities laws. Indeed, the Court tossed the clearly meritorious claims brought by shareholders and bondholders of bankrupt Refco, Inc. against that derivatives dealers' outside counsel who has been criminally convicted of the fraud alleged by investors and is serving a seven year sentence in federal prison. "This disheartening decision rejects the common-sense approach taken by the U.S. Securities and Exchange Commission (SEC), one fully supported by the relevant statute, Section 10 of the Securities Exchange Act of 1934, that investors do have a right of action against these defendants. Indeed, Section 10 refers generally to the prohibition of 'any manipulative or deceptive device or contrivance in contravention' to SEC rules, which go beyond personally uttering a misrepresentation and surely encompasses using others to knowingly make a false public statement. Instead, the Second Circuit's holding rendered the obvious merits of Refco's investors' claims irrelevant. Indeed, unnecessarily going beyond even the two Supreme Court decisions (Central Bank in 1994 and Stoneridge in 2008) that the lower court noted were ripe for legislative re-examination, the panel granted complete immunity from lawsuits to all those who knowingly engage in securities fraud unless they are publicly identified or publicly participate in the wrongdoing," explained Ira Schochet, Esq., NASCAT's President. "The Second Circuit's decision underscores the need for Congress to restore accountability to investors for all who knowingly enable securities fraud," Mr. Schochet continued. "Senator Arlen Specter, a former prosecutor and senior Member of the Judiciary Committee and Chairman Barney Frank of the House Financial Services Committee have each sponsored legislation to restore the right of investors to take action against those who knowingly and substantially participate in securities fraud including gatekeepers such as accountants, lawyers and investment advisers, without whom many complex frauds such as the Refco and Lehman Brothers 'book cooking' scams and the unfolding alleged Goldman Sachs derivatives-based swindle could not have occurred." The SEC had filed a friend of court brief with the Court of Appeals arguing that in cases such as Refco, so-called "secondary actors" such as consulting accountants and attorneys can be held liable as a "primary violator" of SEC Rule 10b-5's bar against "mak[ing]" false or misleading statements to investors if that person creates and then provides the false or misleading information to another person intending that it be put into a public statement. A flexible reading of the statute, which in prior decades the Supreme Court encouraged, readily allows the words "to make," relating to a materially false statement, to carry that meaning (since the statute does not say "to express" or "to utter" or use similar more restrictive verbs). Nonetheless, the Second Circuit panel held that the "secondary actor" must be the one who publicly states the false or misleading information even if the lawyer (as in Refco) designed the sham transactions that made the fraud possible and then wrote the false statements made by other violators to investors and the public. The underlying lawsuit brought by Refco's shareholders and bondholders alleged that Refco's outside attorney and its law firm (Mayer Brown, LLP) designed and helped sell to counterparties sham transactions and falsified securities offering documents to cover-up hundreds of millions of dollars in losses by Refco, Inc. Refco, the once global, publicly traded derivatives dealer, collapsed in 2005 when its cover-up of the devastating losses unraveled. Although the lower court judge recognized the merits of the Refco plaintiffs' suit, he cited the Supreme Court Central Bank and Stoneridge decisions as compelling the dismissal of the investors' class action. Since the lower court ruled, one of the defendants in that lawsuit, Joseph P. Collins, a partner at the law firm of Mayer Brown, and a former Refco legal adviser, has been convicted in a federal court of conspiracy to commit securities fraud and four other counts of illegal actions and is serving a seven year prison sentence. Two others have pled guilty to fraud charges in this case. "Private investors form a key front-line defense against financial fraud and abuse because they are in a unique position to quickly identify and take action against unlawful conduct by corporate issuers and their advisers," Mr. Schochet continued. "Traditionally, securities market regulation and law enforcement relied upon a 'three legged stool' of the SEC, federal and state attorneys general and investor actions. In recent years, however, two legs of the regulatory stool were weakened by laxity in enforcement of federal securities law and Supreme Court decisions, and lower court rulings interpreting those decisions, which have curtailed investors' rights of action. By immunizing fraud enablers from accountability to investors, the Courts have unwittingly encouraged unscrupulous corporate lawyers, accountants and other gatekeepers to profit from wrongdoing." The National Association of Shareholder and Consumer Law Attorneys is a nonprofit organization comprised of about 100 law firms representing consumers and investors -- including pension funds and individuals -- in cases of securities fraud and other forms of "white collar" wrongdoing and criminal activity. About Refco Inc. Headquartered in New York, Refco Inc. -- http://www.refco.com/-- was a diversified financial services organization with operations in 14 countries and an extensive global institutional and retail client base. Refco's worldwide subsidiaries were members of principal U.S. and international exchanges, and were among the most active members of futures exchanges in Chicago, New York, London and Singapore. Refco was also a major broker of cash market products, including foreign exchange, foreign exchange options, government securities, domestic and international equities, emerging market debt, and OTC financial and commodity products. Refco was one of the largest global clearing firms for derivatives. The Company had operations in Bermuda. The Company and 23 of its affiliates filed for Chapter 11 protection on October 17, 2005 (Bankr. S.D.N.Y. Case No. 05- 60006). J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represented the Debtors in their restructuring efforts. Milbank, Tweed, Hadley & McCloy LLP, represented the Official Committee of Unsecured Creditors. Refco reported US$16.5 billion in assets and US$16.8 billion in debts to the Bankruptcy Court on the first day of its Chapter 11 cases. The Court confirmed the Modified Joint Chapter 11 Plan of Refco Inc. and certain of its Direct and Indirect Subsidiaries, including Refco Capital Markets, Ltd., and Refco F/X Associates, LLC, on December 15, 2006. That Plan became effective on Dec. 26, 2006. Pursuant to the plan, RJM, LLC, was named plan administrator to reorganized Refco, Inc. and its affiliates, and Marc S. Kirschner as plan administrator to Refco Capital Markets, Ltd. Bankruptcy Creditors' Service, Inc., publishes Refco Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by Refco Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) REFCO INC: Ex-Directors Forfeit $39MM to Settle Fraud Claims ------------------------------------------------------------ Preet Bharara, the United States Attorney for the Southern District of New York, related in a public statement that Edwin L. Cox, Jr., William L. Graham, and two trusts related to these individuals have agreed to forfeit a total of $39 million to resolve civil forfeiture claims alleged in a civil Complaint filed on May 6, 2010. The Complaint alleges that Messrs. Cox and Graham, and the two trusts directly or indirectly own, control, or have an interest in property traceable to $39 million in proceeds of securities fraud, wire fraud, bank fraud, and money laundering at the defunct financial services company Refco. As alleged in the Complaint: PHILLIP R. BENNETT, TONE N. GRANT, SANTO C. MAGGIO, ROBERT C. TROSTEN, and others were involved in hiding customer trading losses, concealing the firm's proprietary trading activities, fraudulently shifting expenses off the books of Refco, and artificially padding Refco's revenues in order to achieve through fraud, the 2004 leveraged buyout ("LBO") of Refco and the 2005 initial public offering ("IPO") of the Company's stock. From as early as the mid-1990s, Refco sustained hundreds of millions of dollars of losses through, among other things, its customers' trading. In order to hide the existence of the losses, BENNETT and others transferred many of the losses to appear as a debt owed to Refco by Refco Group Holdings, Inc. ("RGHI") -- the holding company that controlled Refco and was, in turn, controlled by BENNETT, GRANT, and, at certain times, THOMAS DITTMER. COX, 63, of Athens, Texas, served on Refco's Board of Directors and Executive Committee from September 28, 1998, through June 1, 1999. GRAHAM, 61, of Dallas, Texas, served on Refco's Board of Directors from April 26, 1999, through August 23, 1999. From 1999 through 2005, BENNETT and others directed a series of transactions every year to hide the RGHI receivable from, among others, Refco's auditors, by temporarily paying down the receivable from RGHI over Refco's fiscal year-end (and, after February 2004, Refco's quarter-ends) and replacing it with a receivable from one or more other entities not related to RGHI. Thus, at every fiscal year-end and, later, at every fiscal quarter-end, BENNETT and others directed transactions that turned the debt owed to Refco from RGHI into a debt owed to Refco by a Refco customer. Shortly after each fiscal year- or quarter-end, these transactions were unwound, returning the debt to RGHI. In early August 2004, Thomas H. Lee Partners, L.P., purchased a majority interest in Refco for approximately $1.9 billion through an LBO. In connection with that transaction, Refco sold approximately $600 million of bonds to the public and borrowed approximately $800 million from a syndicate of banks. Proceeds of Refco's fraudulent LBO were distributed to BENNETT, GRANT, MAGGIO, and TROSTEN, as well as certain other former Refco insiders. Later in August 2004, DITTMER agreed to pay COX, or his appointed agent, $39 million to resolve, among other things, a dispute over the rights that COX had to proceeds of Refco's LBO. $39 million in LBO proceeds was paid under this agreement (the "LBO Settlement Agreement") in September 2004 and June 2005. In August 2005, Refco conducted an IPO of its stock, raising approximately $583 million from the public. Refco's stock was then listed on the New York Stock Exchange. On October 10, 2005, Refco issued a press release announcing, in substance, that it had discovered that it was owed a debt of approximately $430 million by an entity controlled by BENNETT. Following release of this information, the market price of Refco stock plummeted, and Refco's stock was subsequently delisted by the New York Stock Exchange. Refco, Inc., and many of its subsidiaries filed petitions in bankruptcy on October 17, 2005. The $39 million in LBO proceeds transferred under the LBO Settlement Agreement are directly traceable to various properties (the "Directly Forfeitable Properties") owned or controlled, directly or indirectly, by COX, GRAHAM, and two related trusts and/or entities that they control or in which they have an ownership or beneficial interest. The two trusts are EKC Grantor Trusts 2000 and WUG Grantor Trusts 2000, both of which have United States Virgin Island and United States situs. GRAHAM is the grantor for both trusts, and COX is a beneficiary of EKC Grantor Trusts 2000. COX, GRAHAM, and the two trusts have agreed to forfeit $39 million to settle the Government's civil forfeiture claims against the Directly Forfeitable Properties. This represents 100 percent of the LBO fraud proceeds distributed under the LBO Settlement Agreement. They have not admitted to any liability in settling the lawsuit, and they agreed to forfeit the $39 million on the understanding that the United States Attorney's Office for the Southern District of New York will request that the forfeited $39 million be made available to innocent victims of the Refco fraud to compensate their losses. * * * The case was investigated by the Criminal Investigators of the Securities and Commodities Fraud Task Force of the United States Attorney's Office, along with the United States Postal Inspection Service. Mr. Bharara praised the work of those investigators and thanked the United States Securities and Exchange Commission and the Commodity Futures Trading Commission for their assistance in the case. Assistant United States Attorney Jeffrey Alberts is in charge of the case. The case was brought in coordination with President Barrack Obama's Financial Fraud Enforcement Task Force, on which Mr. Bharara serves as a Co-Chair of the Securities and Commodities Fraud Working Group. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes. About Refco Inc. Headquartered in New York, Refco Inc. -- http://www.refco.com/-- was a diversified financial services organization with operations in 14 countries and an extensive global institutional and retail client base. Refco's worldwide subsidiaries were members of principal U.S. and international exchanges, and were among the most active members of futures exchanges in Chicago, New York, London and Singapore. Refco was also a major broker of cash market products, including foreign exchange, foreign exchange options, government securities, domestic and international equities, emerging market debt, and OTC financial and commodity products. Refco was one of the largest global clearing firms for derivatives. The Company had operations in Bermuda. The Company and 23 of its affiliates filed for Chapter 11 protection on October 17, 2005 (Bankr. S.D.N.Y. Case No. 05- 60006). J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represented the Debtors in their restructuring efforts. Milbank, Tweed, Hadley & McCloy LLP, represented the Official Committee of Unsecured Creditors. Refco reported US$16.5 billion in assets and US$16.8 billion in debts to the Bankruptcy Court on the first day of its Chapter 11 cases. The Court confirmed the Modified Joint Chapter 11 Plan of Refco Inc. and certain of its Direct and Indirect Subsidiaries, including Refco Capital Markets, Ltd., and Refco F/X Associates, LLC, on December 15, 2006. That Plan became effective on Dec. 26, 2006. Pursuant to the plan, RJM, LLC, was named plan administrator to reorganized Refco, Inc. and its affiliates, and Marc S. Kirschner as plan administrator to Refco Capital Markets, Ltd. Bankruptcy Creditors' Service, Inc., publishes Refco Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by Refco Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) REUNION INDUSTRIES: Steel Partners Ceases to Own Common Shares -------------------------------------------------------------- Steel Partners II, LP, et al., disclosed in a regulatory filing on May 12, 2010, that as of May 7, 2010, they have ceased to own shares of Reunion Industries, Inc.'s common stock. On April 5, 2010, Reunion Industries, the Trustee, Steel Partners GP, Steel Holdings and Steel Partners II filed a joint motion in the Bankruptcy Court for the District of Connecticut, Bridgeport Division, seeking approval of a full and final settlement relating to the Senior Notes and other related matters. On May 7, 2010, the Bankruptcy Court approved the Senior Notes Settlement Order. Pursuant to the terms of the Senior Notes Settlement Order: (a) Reunion Industries agreed to pay $1,300,000 in full and final resolution of the claims relating to the Senior Notes to be allocated as set forth in the Senior Notes Settlement Order, (b) Reunion Industries agreed to cause its lawsuit filed in the Court of Common Pleas, Allegheny County, Pennsylvania (which was subsequently removed to the U.S. District Court for the Western District of Pennsylvania) against Steel Partners GP, Steel Holdings, Steel Partners II and the Trustee to be dismissed or discontinued with prejudice and (c) all charges, mortgages and other security interests of the Trustee in or on the assets of Reunion Industries, including the Pledged Shares, will automatically terminate. The parties to the Senior Notes Settlement Order also entered into mutual general releases. Accordingly, the Reporting Persons no longer beneficially own, or may be deemed to beneficially own, the Pledged Shares or any other equity or debt securities of Reunion Industries. A full-text copy of the Schedule 13D filing is available at no charge at http://researcharchives.com/t/s?623f Reunion Industries filed for Chapter 11 protection on November 26, 2007 (Bankr. D. Conn. Case No. 07-50727). Two Reunion Industries stockholders, Charles E. Bradley, Sr. Family Limited Partnership, and John Grier Poole Family Limited Partnership filed separate Chapter 11 petitions on the same day (Bankr. D. Conn. Case Nos. 07-50725 and 07-50726). Carol A. Felicetta, Esq., David M. S. Shaiken, Esq., Eric A. Henzy, Esq., at Reid and Riege, P.C.; and Derek M. Johnson, Esq., at Ruben, Johnson and Morgan, represent Reunion Industries as counsel. RQB RESORT: Wants Access to Cash Collateral Extended ---------------------------------------------------- Bill Rochelle at Bloomberg News reports that RQB Resort is asking for an extension of the right to use cash representing collateral for $193 million owing to secured creditor Goldman Sachs Mortgage Co. Existing cash-use authority expires May 28. Goldman Sachs has a motion seeking permission to foreclose scheduled for hearing on June 21. The first hearing on cash use will be May 25. RQB Resort LP and RQB Development LP own Florida's Sawgrass Marriott Resort, the site of the U.S. PGA Tour's Tournament Players Championship. Ponte Vedra Beach, Florida-based RQB Resort, LP, aka Sawgrass Marriott Resort & Cabana Club, filed for Chapter 11 bankruptcy protection on March 1, 2010 (Bankr. M.D. Fla. Case No. 10-01596). The Company's affiliate -- RQB Development, LP, aka Sawgrass Marriott Golf Villas & Spa -- filed a separate Chapter 11 petition. The Company estimated its assets and debts at $100,000,001 to $500,000,000. SAINT VINCENTS: Individuals Can't Exercise State's Powers --------------------------------------------------------- Bill Rochelle at Bloomberg News reports that a bankruptcy judge in New York ruled on May 14 in the Chapter 11 case of St. Vincent Catholic Medical Centers that when a hospital is closing under supervision of state health regulators, a lawsuit by private plaintiffs in state court to block the closing is a violation of the automatic stay. According to the report, Saint Vincents has secured approval from the bankruptcy judge to continue closing pursuant to an agreement worked out with the state Department of Health. Individuals who didn't want the hospital to close sued the Health Department in state court a week after bankruptcy. The hospital was not named as a party in the state-court suit. The report relates that in terms of violating the automatic stay, Bankruptcy Judge Cecelia Morris said it was an inconsequential "technicality" that the hospital was not a defendant in the state- court suit. Using the state judge to force the Health Department into keeping the hospital open was an attempt to "exercise control over property of the estate," the judge said. The suit was therefore a violation of the automatic stay that prohibits lawsuits against bankrupts or actions attempting to control the debtor or its property. Even though the Health Department could use regulatory powers to keep the hospital open, Judge Morris said an individual cannot cloak itself in regulatory powers by using a state court. About Saint Vincents Catholic Medical Centers St. Vincents Catholic Medical Centers returned to bankruptcy court by filing another Chapter 11 petition April 14, 2010, in New York (Bankr. S.D.N.Y. Case No. 10-11963). The new petition listed assets of $348 million against debt totaling $1.09 billion. Adam C. Rogoff, Esq., and Kenneth H. Eckstein, Esq., at Kramer Levin Naftalis & Frankel LLP, represent the Debtor in its Chapter 11 effort. Although the hospitals emerged from the prior reorganization in July 2007 with a Chapter 11 plan said to have a "a realistic chance" of paying all creditors in full, the bankruptcy left the medical center with more than $1 billion in debt. The new filing occurred after a $64 million operating loss in 2009 and the last potential buyer terminated discussions for taking over the flagship hospital. Saint Vincents Catholic Medical Centers -- http://www.svcmc.org/- - is anchored by St. Vincent's Hospital Manhattan, an academic medical center located in Greenwich Village and the only emergency room on the Westside of Manhattan from Midtown to Tribeca, St. Vincent's Westchester, a behavioral health hospital in Westchester County, and continuing care services that include two skilled nursing facilities in Brooklyn, another on Staten Island, a hospice, and a home health agency serving the Metropolitan New York area. Saint Vincent Catholic Medical Centers of New York and six of its affiliates first filed for Chapter 11 protection on July 5, 2005 (Bankr. S.D.N.Y. Case No. 05-14945 through 05-14951). SAPPHIRE NATIONAL: Court Dismisses Reorganization Case ------------------------------------------------------ The Hon. George R. Hodges of the U.S. Bankruptcy Court for the Western District of North Carolina dismissed the Chapter 11 case of Sapphire National, LLC. As reported in the Troubled Company Reporter on April 13, 2010, Creditor Textron Financial Corporation sought for the dismissal or suspension of the Debtor's involuntary Chapter 11 bankruptcy case. According to Textron, the involuntary bankruptcy case wasn't filed in good faith, because: (a) this case was filed on the eve of a state court hearing on Textron's motion to appoint a receiver; (b) the "creditors" who filed this case are attorneys and accountants who represent the Debtor and acted in concert with the Debtor to manufacture an "involuntary" bankruptcy case in an effort to avoid the full recourse obligations owing by certain guarantors of the Debtor's debts that are triggered in the event of a voluntary bankruptcy case; and (c) the continuance of this involuntary bankruptcy case is causing irreparable harm to Textron, as the Debtor continues to collect and misappropriate rent and revenues without any license to do so. Sapphire, North Carolina-based Sapphire National, LLC -- aka Sapphire National Golf Club and Sapphire National Golf Course -- owns and operates the golf course known as Sapphire National Gold Club. Todd L. Nelson; Peter A. Paul, PC; and Hansen & Associates commenced on March 23, 2010, an involuntary petition for relief under Chapter 11 of the U.S. Bankruptcy Code against the Company (Bankr. W.D. N.C. Case No. 10-20080). D. Rodney Kight, Jr., Esq., at Kight Law Office is the petitioners' counsel. The Debtor hasn't appointed any counsel. Mr. Nelson claims that he is owed $6,221 in legal fees reimbursal. Peter A. Paul claims that it is owed $20,221 in attorney's fees. Hansen & Associates claims that it is owed $5,450 for its services. SENSUS USA: S&P Revises Outlook to Stable & Affirms B+ Rating ------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Raleigh, N.C.-based Sensus USA Inc. to stable from negative. All the ratings have been affirmed, including S&P's corporate credit rating of 'B+'. "The company has achieved improved credit measures commensurate with the rating, and it has improved the cushion on its covenants," said Standard & Poor's credit analyst John Sico. "We expect the progress the company has made in deploying its smart- grid infrastructure to continue helping maintain credit measures in line with the rating in the absence of any large debt-financed acquisitions," he continued. The ratings on Sensus reflect the company's weak business risk profile and aggressively leveraged financial risk profile. Raleigh, N.C.-based Sensus is one of the largest global manufacturers of utility meters and provides automated meter reading (AMR) technology and fixed advanced metering infrastructure (AMI) networks. The metering systems industry is highly competitive, and success depends on a company's breadth of product offering, product quality and availability, customer service, customers' acceptance of new technology, and price. Sensus's customers include distributors of metering products, utilities, and municipalities. "The market is shifting to advanced communication technologies that are especially prevalent in electric meters for smart grids. Revenues from the meter business provide some stability, and the majority of sales occur as aftermarket replacement/upgrades. Still, we expect overall long-term growth to be in the low single digits. However, sales of AMR devices and AMI network in North America should expand faster than sales of meters, given what is still a relatively small installed base. The penetration rate for North American AMR devices is roughly 25% for all three major utility industries (water, gas, and electric). Globally, the total potential market is more than $5 billion. "We believe liquidity is currently adequate for the ratings. Cash on hand is about $59 million, and $55 million was available under the $70 million revolving credit facility as of March 31, 2010 (letters of credit are $15 million). The company's working capital needs may expand as a result of new contracts, and we project capital expenditures to increase slightly as Sensus rolls out its AMI infrastructure. We expect Sensus to generate positive free cash flow in fiscal 2011, which we expect the company to use for debt reduction." "The outlook is stable. We expect the company's improved operating performance and enhanced compliance cushion to help Sensus maintain rating stability in the near term. We could revise the outlook to positive or raise the ratings if Sensus achieves much better performance from the strides it has made in delivering advanced metering systems and products to utility customers, allowing it to continue generating much better positive free cash flow and reducing leverage beyond our expectations." "On the other hand, we could lower the ratings if Sensus fails to sustain operating income to meet modified covenant ratios. We could consider lowering the ratings if a possible reversal in the recovery of its end markets hinders Sensus's ability to maintain credit measures that we expect at the current ratings. If such issues result in an adjusted leverage ratio that approaches 6x, we could take a negative rating action." SPECIALTY TRUST: Gets Interim Access to Cash Collateral ------------------------------------------------------- The U.S. Bankruptcy Court for the District of Nevada authorized, on an interim basis, Specialty Trust, Inc., et al., to use the cash collateral in which the prepetition secured lenders assert an interest until two days after the final hearing date. A final hearing on the Debtors' cash collateral use will be held on June 13, 2010. The Debtors requested for cash collateral use until September 30, 2010. The Debtor would use the cash collateral to pay wages, management fees and other operating expenses and expenses of administration of the cases. The Debtors relate that prepetition secured lenders are adequately protected by (i) the equity cushion in the value of the pledged assets; and (ii) the preservation and enhancement in the Debtors' going concern value from the utilization of cash collateral to operate the business. 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: Taps Pachulski Stang as Gen. Bankruptcy Counsel ---------------------------------------------------------------- Specialty Trust, Inc., et al., ask the U.S. Bankruptcy Court for the District of Nevada for permission to employ Pachulski Stang Ziehl & Jones LLP as general bankruptcy counsel. PSZ&J will, among other things: a. advise the Debtors of their rights, powers, and duties as debtors-in-possession, of the requirements of the Bankruptcy Code and the Federal Rules of Bankruptcy Procedure, and the requirements of the U.S. Trustee pertaining to the administration of the Debtors' estates; b) prepare motions, applications, answers, orders, memoranda, reports, and papers, etc., in connection with the administration of the estate; and c) assist the Debtors in reviewing and consummating any transactions contemplated during these cases. PSZ&J received $125,419 in payments for prepetition representation of the Debtors. In addition to the prepetition services retainer, the firm received $180,000 as its postpetition services retainer. The hourly rates of PSZ&J personnel are: Ira D. Kharasch $825 Scotta E. McFarland $575 Victoria A. Newmark $625 Beth Dassa, paralegal $235 To the best of the Debtors' knowledge, PSZ&J is a "disinterested person' as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Ira D. Kharasch, Esq. Email: ikharasch@pszjlaw.com Scotta E. McFarland, Esq. Email: smcfaland@pszjlaw.com Victoria A. Newmark, Esq. Email: vnewmark@pszjlaw.com Pachulski Stang Ziehl & Jones LLP 10100 Santa Monica Boulevard, 11th Floor Los Angeles, CA 90067-4100 Tel: (310) 277-6910 Fax: (310) 201-0760 The Debtors propose a hearing on employment of counsel on June 2, 2010, at 2:00 p.m. 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: Wants Schedules Filing Extended Until May 24 ------------------------------------------------------------- Specialty Trust, Inc., et al., ask the U.S. Bankruptcy Court for the District of Nevada to extend until May 24, 2010, their time to file schedules of assets and liabilities; schedule of current income and expenditures; schedule of executory contracts and unexpired leases; and statement of financial affairs. The Debtors filed their request for an extension before their filing period was set to expire on May 4, 2010. The Debtors need additional time to assemble the information necessary, including, among other things, reviewing their records determine the prepetition liabilities to each individual creditor as of the petition date, and compiling and reviewing each of their unexpired leases and executory contracts. The Debtors propose a meeting on their filing extension on June 2, 2010, at 2:00 p.m. 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. Two other affiliates filed separate Chapter 11 petitions. STERLING FINANCIAL: Taps Les Biller as Chairman of the Board ------------------------------------------------------------ Sterling Financial Corporation has approved the appointment of Leslie ("Les") S. Biller as chairman of its board of directors, subject to approval by bank regulators and the successful completion of the Sterling recapitalization transactions, which were initially announced in its April 27, 2010 press release. "Les Biller's extensive business leadership and banking expertise will be a tremendous asset for Sterling," said Greg Seibly, president and chief executive officer of Sterling. "We look forward to working under his direction after we complete our recapitalization transactions and continue through our recovery efforts." Biller said, "I am pleased and enthusiastic about the prospect of joining the Sterling organization and helping its management team continue to move forward as a major regional player in community banking across the Pacific Northwest." Biller has more than 30 years of banking and investment experience. He began Greendale Capital, a private investment company, after retiring in 2002 as vice chairman and chief operating officer of Wells Fargo & Company. Prior to Wells Fargo, Biller was president and chief operating officer of Norwest Corporation. He has also served in executive leadership roles at Bank of America and at Citicorp. Biller earned his bachelor's degree in chemical engineering from City College of New York and a master's degree in business administration from Xavier University in Cincinnati, Ohio. He serves on the boards of Ecolab, Inc., Knowledge Schools, Inc., and Knowledge Universe Education LLP. He also serves as a director of the Autry National Center. About Sterling Financial Spokane, Wash.-based Sterling Financial Corporation (NASDAQ: STSA) -- 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 operated 178 depository branches throughout Washington, Oregon, Idaho, Montana and California. The Company's balance sheet as of March 31, 2010, showed $10.555 billion in assets, $10.309 billion in total liabilities, and $245.5 million in stockholders' equity. * * * As reported in the Troubled Company Reporter on March 22, 2010, BDO Seidman, LLP, in Spokane, Wash., expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has suffered significant net losses during 2009 and 2008, a decline in regulatory capital to support operations, and regulatory issues. TAGISH LAKE: Extends CCAA Stay Protection Until July 7 ------------------------------------------------------ Tagish Lake Gold Corp. commenced proceedings in the Supreme Court of British Columbia pursuant to the Companies' Creditors Arrangement Act (Canada) and obtained the Initial Order for protection from its creditors until May 7, 2010. Pursuant to the Initial Order, Grant Thornton Limited was appointed as the Monitor for the Company. Pursuant to further Orders of the Court made May 7, 2010, the creditor protection provided in the Initial Order was confirmed and extended to July 7, 2010, the time for holding the annual general meeting of shareholders of the Company was postponed until further Order of the Court and a claims process for the Company's creditors was approved. In accordance with the Claims Process, all creditors of the Company must deliver their proofs of claim to the Monitor by 5:00 p.m. on June 11, 2010. Subject to the provisions of the Claims Process, any claims against the Company which are not received by the Monitor on or before the Claims Bar Date will be forever released, barred and extinguished as against Tagish Lake. The Company will use the Extension to proceed with the Claims Process, negotiate with its creditors and develop a Plan of Compromise and Arrangement, subject to the approval of the Court and the Company's creditors. Tagish Lake believes that the decision to seek creditor protection is in the best interests of the Company and its stakeholders as it allows Tagish Lake to develop a Restructuring Plan and ultimately move forward with the restructuring of its business. TAYLOR-WHARTON: Selling Cylinders Business in June -------------------------------------------------- Bill Rochelle at Bloomberg News reports that Taylor-Wharton International LLC received approval from the bankruptcy court to conduct an auction on June 3 to learn if anyone will beat an $11 million offer for the cylinders business known as TWI Cylinders LLC. The initial offer will come from Norris Cylinder Co. Parties that intend to participate in the auction must submit initial bids by June 1. The report adds that the Company has begun the process of having the bankruptcy court terminate three labor agreements with the United Steelworkers union. Both actions are designed to enable confirmation of the reorganization plan worked out before the Chapter 11 filing in November. A hearing on the motion to scrap the contracts is scheduled for May 25. According to the Bloomberg report, Taylor-Wharton has received approval for a settlement with Harsco Corp., which sold the business to the current owners in November 2007 in a $340 million transaction. Harsco's $31.9 million claim was settled in return for approval of a $23.2 million unsecured claim. Part of the claim related to termination of the lease for a building in Harrisburg, Pennsylvania. About Taylor-Wharton Taylor-Wharton International, LLC, is the world's leading technology, service and manufacturing network for gas applications involving pressure vessels and precision valves. Taylor-Wharton International operates three complementary businesses from 16 manufacturing, sales, warehouse and service facilities in six countries on four continents, and markets its products in over 80 countries worldwide. The Company filed for Chapter 11 bankruptcy protection on November 18, 2009 (Bankr. D. Del. Case No. 09-14089). The Company listed $10,000,001 to $50,000,000 in assets and $100,000,001 to $500,000,000 in liabilities. These affiliates of the Company also filed separate Chapter 11 petitions: Alpha One, Inc.; American Welding & Tank, LLC; Beta Two, Inc.; Delta Four, Inc.; Epsilon Five, Inc.; Gamma Three, Inc.; Sherwood Valve, LLC; Taylor-Wharton Intermediate Holdings LLC; Taylor-Wharton International LLC; TW Cryogenics LLC; TW Cylinders LLC; TW Express LLC; and TWI-Holding LLC. TEXAS COMMERCIAL: Prepetition Claims Become 'New' Debt Under Plan ----------------------------------------------------------------- Bill Rochelle at Bloomberg News reports that Chief Judge Edith H. Jones from the 5th U.S. Circuit Court of Appeals in New Orleans ruled in a May 13 opinion that a creditor didn't violate the injunction contained in a confirmed Chapter 11 plan by drawing down a letter of credit securing an obligation to make payments under the plan. The decision reversed prior rulings by the lower courts. Bloomberg News recounts that the case involved a letter of credit that the reorganized company posted to insure post-confirmation payments owing to a creditor who supplied services both before and after the Chapter 11 plan was approved. Although the company was current on payment for services after emerging from Chapter 11, it defaulted on payments owing under the plan. When the creditor drew the letter of credit to collect on the plan payments, the bankruptcy judge ruled that drawing on the letter of credit was a violation of the injunction in the plan prohibiting action to collect prebankruptcy debt. The district court affirmed. According to Mr. Rochelle, writing for a panel of three judges, Judge Jones reversed. She reasoned that the old debt was extinguished by plan confirmation. It was replaced by a new obligation owing under the plan. Since the creditor was not collecting an old obligation, there was no violation of the injunction in the confirmed plan. The case is Electric Reliability Council of Texas Inc. v. May (In re Texas Commercial Energy), 08-40890, 5th U.S. Circuit Court of Appeals (New Orleans). About Texas Commercial In December 2003, Texas Commercial Energy emerged from bankruptcy after the approval of its reorganization plan by all parties. TCE filed for Chapter 11 bankruptcy protection on March 6, 2003, to protect its customers and gain the time needed to prove that anti- trust behavior and market manipulation significantly contributed to its problems. TP INC: Bankruptcy Administrator Unable to Form Creditors Panel --------------------------------------------------------------- Majorie K. Lynch, Bankruptcy Administrator for Eastern District of North Carolina, notified the U.S. Bankruptcy Court that she was unable to appoint an official committee of unsecured creditors in the Chapter 11 case of TP, Inc. Ms. Lynch explained that there were insufficient indications of willingness from the unsecured creditors to serve in the committee. Boone, North Carolina-based TP, Inc., filed for Chapter 11 bankruptcy protection on March 1, 2010 (Bankr. E.D. N.C. Case No. 10-01594). David J. Haidt, Esq., at Ayers, Haidt & Trabucco, P.A., assists the Company in its restructuring effort. The Company estimated its assets and liabilities at $10,000,001 to $50,000,000. TRIBUNE CO: Lenders Object to Exclusivity Period Extension ---------------------------------------------------------- Bankruptcy Law360 reports that credit agreement lenders in the Tribune Co. bankruptcy are again fighting the company's request to extend its period of exclusivity for submitting a Chapter 11 plan of reorganization, saying another extension will be a waste of time and resources. Law360 says the group of lenders lodged its objection in the U.S. Bankruptcy Court for the District of Delaware on Thursday. Headquartered in Chicago, Illinois, Tribune Co. -- http://www.tribune.com/-- is a media company, operating businesses in publishing, interactive and broadcasting, including ten daily newspapers and commuter tabloids, 23 television stations, WGN America, WGN-AM and the Chicago Cubs baseball team. The Company and 110 of its affiliates filed for Chapter 11 protection on Dec. 8, 2008 (Bankr. D. Del. Lead Case No. 08- 13141). The Debtors proposed Sidley Austion LLP as their counsel; Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel; Lazard Ltd. and Alvarez & Marsal North Americal LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims agent. As of Dec. 8, 2008, the Debtors have $7,604,195,000 in total assets and $12,972,541,148 in total debts. Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Tribune Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TROPICANA ENT: LandCo Submits 1st Quarter Post-Confirmation Report ------------------------------------------------------------------ Michael Usgaard, corporate controller of the LandCo Debtors, submitted separate post-confirmation quarterly summary reports of the LandCo Debtors for the reporting period from January 1, 2010, to March 31, 2010: Beginning Ending LandCo Debtor Cash Balance Cash Balance ------------- ------------ ------------ Adamar of Nevada Corporation $0 $0 Hotel Ramada of Nevada Corporation 0 0 Tropicana Development Company LLC 0 0 Tropicana Enterprises 0 0 Tropicana Las Vegas Holdings, LLC 0 0 Tropicana Las Vegas Resort and Casino LLC 0 0 Tropicana Real Estate Company, LLC 0 0 The Chapter 11 Plan of the LandCo Debtors was confirmed on May 5, 2009, and was subsequently declared effective on July 1, 2009. About Tropicana Entertainment Tropicana Entertainment LLC and its units owned eleven casino properties in eight distinct gaming markets with premier properties in Las Vegas, Nevada, and Atlantic City, New Jersey. Tropicana Entertainment LLC and certain affiliates filed for Chapter 11 protection on May 5, 2008 (Bankr. D. Del. Case No. 08- 10856). Kirkland & Ellis LLP and Mark D. Collins, Esq., at Richards Layton & Finger, represent the Debtors in their restructuring efforts. Their financial advisor is Lazard Ltd. Their notice, claims, and balloting agent is Kurtzman Carson Consultants LLC. Epiq Bankruptcy Solutions LLC is the Debtors' Web site administration agent. AlixPartners LLP is the Debtors' restructuring advisor. Stroock & Stroock & Lavan LLP and Morris Nichols Arsht & Tunnell LLP represent the Official Committee of Unsecured Creditors in this case. Capstone Advisory Group LLC is financial advisor to the Creditors' Committee. The OpCo Debtors, a group of Tropicana entities owning casinos and resorts in Atlantic City, New Jersey and Evansville, Indiana obtained confirmation from the Bankruptcy Court of a reorganization plan. On April 29, 2009, non-debtor units of the OpCo Debtors, designated as the New Jersey Debtors -- Adamar of New Jersey, Inc., and its affiliate, Manchester Mall, Inc. -- filed for Chapter 11 (Bankr. D. N.J. Lead Case No. 09- 20711) to effectuate a sale of the Atlantic City Resort and Casino to a group of Investors-led by Carl Icahn. Judge Judith H. Wizmur presides over the cases. Manchester Mall is a wholly owned subsidiary of Adamar that owns and operates certain real property utilized in the New Jersey Debtors' business operations. Effective March 8, Tropicana Entertainment successfully emerged from the Chapter 11 reorganization process as an Carl Icahn-owned entity. A group of Tropicana entities, known as the LandCo Debtors, which own Tropicana casino property in Las Vegas, have obtained approval of a separate Chapter 11 plan. Ilana Volkov, Esq., and Michael D. Sirota, Esq., at Cole, Schotz, Meisel, Forman & Leonard, in Hackensack, New Jersey, represented the New Jersey Debtors. Kurtzman Carson Consultants LLC acts as their claims and notice agent. Adamar disclosed $500 million to $1 billion both in total assets and debts in its petition. Manchester Mall disclosed $1 million to $10 million in total assets, and less than $50,000 in total debts in its petition. Bankruptcy Creditors' Service, Inc., publishes Tropicana Bankruptcy News. The newsletter tracks the chapter 11 restructuring proceedings commenced by Tropicana Entertainment LLC and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000 TROPICANA ENT: OpCo Wants to Reject IP Agreements ------------------------------------------------- The Reorganized OpCo Debtors, a group of Tropicana entities owning casinos and resorts in Atlantic City, New Jersey and Evansville, Indiana, seek to reject all executory contracts and unexpired leases, if any, involving Intellectual Property Rights granted by the OpCo Debtors in favor of the LandCo Debtors or the "OpCo to LandCo IP Agreements" retroactive as of the July 1, 2009 LandCo Plan Effective Date. The OpCo to LandCo IP Agreements that the Reorganized OpCo Debtors seek to reject include, but are not limited to, these specified agreements: * A Trade Name Agreement dated September 1, 1980, as amended, by and among Tropicana Enterprises, the Jaffe Group, Ramada Inns, Inc., Hotel Ramada of Nevada Corporation, and Adamar of New Jersey, Inc. * An Amended and Restated Lease dated November 1, 1984, as amended. * A Trade Name Assignment, Guaranty and Agreement, dated December 12, 1989, as amended, by and among Aztar Corporation, Ramada Inc., formerly Ramada Inns, Inc., Hotel Ramada of Nevada, Adamar of New Jersey, Inc., the Jaffe Group, and Trop C.C. The Reorganized OpCo Debtors also ask the Bankruptcy Court to require all proofs of claim arising from the rejection of the OpCo to LandCo IP Agreements, and all pleadings asserting any other right arising as a result of the rejection, to be filed no later than 30 days after the date of entry of an order authorizing the rejection of the Agreements. Lee E. Kaufman, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, points out that the OpCo Debtors and the LandCo Debtors are no longer interrelated companies. They are wholly separate enterprises that are controlled and operated by separate managements and boards, and conduct separate and distinct business operations. Thus, Mr. Kaufman avers, continued maintenance of the IP Agreements no longer serves any legal or business purpose. Moreover, the Reorganized OpCo Debtors do not receive royalties or other payments by the Liquidating LandCo Debtors in exchange for any IP Rights granted to them by the Reorganized OpCo Debtors, Mr. Kaufman notes. Thus, the Reorganized OpCo Debtors do not and will not receive any economic benefit from the continued maintenance of the OpCo to LandCo IP Agreements. With respect specifically to the 1980 Trade Name Agreement, rejection of that agreement will also prevent the potential forfeiture of the Reorganized OpCo Debtors' ownership rights in the Tropicana Marks, Mr. Kaufman emphasizes. "Any such forfeiture could be severely damaging to the Reorganized OpCo Debtors and would only serve to provide an unjustified and inequitable windfall to the [] LandCo Debtors, (which, prior to confirmation, never purported to even assert any ownership rights in the Tropicana Marks.)" Mr. Kaufman relates that a litigation case is pending between the OpCo Debtors and the LandCo Debtors in relation to the Tropicana Marks. After the July 1, 2009, LandCo Effective Date, the LandCo Debtors commenced an action against the OpCo Debtors in the District Court for Clark County Nevada, entitled Tropicana Las Vegas, Inc., Hotel Ramada of Nevada, Inc. v. Aztar Corporation, Tropicana Entertainment LLC, Case No. 09-A-595469. The LandCo Debtors asserted under the Complaint that they are the owners of the Tropicana trademark rights. The OpCo Debtors, for their part, sought dismissal of the LandCo Claims. Upon consideration of the parties' summary judgment motions, the Nevada state court entered a Minute Order which denied both motions. The Nevada Court suggests that the LandCo Debtors retained a reversionary interest in the ownership of the Tropicana Marks under the 1980 Trade Name Agreement. The Reorganized OpCo Debtors, however, believe this suggestion was erroneous because any interest in the Tropicana Marks was reiterated in a 1984 lease, all rights of which was terminated in an amended lease agreement by the parties in 2002. The Reorganized OpCo Debtors seek a retroactive effective date of the proposed rejection of the "OpCo to LandCo IP Agreements," Mr. Kaufman elaborates, because the new owners of the LandCo Debtors were on notice as of July 1, 2009, (i) that the Reorganized OpCo Debtors were the owners of the Tropicana Marks; (ii) that any unauthorized use of those marks after July 1, 2009 would be unlawful; and (iii) that the Reorganized OpCo Debtors contested their right to use the Tropicana Marks from and after July 1, 2009. The Reorganized OpCo Debtors also seek to assume all executory contracts and unexpired leases involving Intellectual Property Rights granted by the LandCo Debtors in favor of the OpCo Debtors or the "LandCo to OpCo IP Agreements" that are determined to exist. In the alternative, to prevent the inadvertent forfeiture of any IP Rights pending the final adjudication of the Nevada Action, the Reorganized OpCo Debtors ask the Bankruptcy Court to defer consideration of all motions to assume IP Rights until a date to be determined by the Bankruptcy Court after entry of an order fully and finally resolving the Nevada Action. About Tropicana Entertainment Tropicana Entertainment LLC and its units owned eleven casino properties in eight distinct gaming markets with premier properties in Las Vegas, Nevada, and Atlantic City, New Jersey. Tropicana Entertainment LLC and certain affiliates filed for Chapter 11 protection on May 5, 2008 (Bankr. D. Del. Case No. 08- 10856). Kirkland & Ellis LLP and Mark D. Collins, Esq., at Richards Layton & Finger, represent the Debtors in their restructuring efforts. Their financial advisor is Lazard Ltd. Their notice, claims, and balloting agent is Kurtzman Carson Consultants LLC. Epiq Bankruptcy Solutions LLC is the Debtors' Web site administration agent. AlixPartners LLP is the Debtors' restructuring advisor. Stroock & Stroock & Lavan LLP and Morris Nichols Arsht & Tunnell LLP represent the Official Committee of Unsecured Creditors in this case. Capstone Advisory Group LLC is financial advisor to the Creditors' Committee. The OpCo Debtors, a group of Tropicana entities owning casinos and resorts in Atlantic City, New Jersey and Evansville, Indiana obtained confirmation from the Bankruptcy Court of a reorganization plan. On April 29, 2009, non-debtor units of the OpCo Debtors, designated as the New Jersey Debtors -- Adamar of New Jersey, Inc., and its affiliate, Manchester Mall, Inc. -- filed for Chapter 11 (Bankr. D. N.J. Lead Case No. 09- 20711) to effectuate a sale of the Atlantic City Resort and Casino to a group of Investors-led by Carl Icahn. Judge Judith H. Wizmur presides over the cases. Manchester Mall is a wholly owned subsidiary of Adamar that owns and operates certain real property utilized in the New Jersey Debtors' business operations. Effective March 8, Tropicana Entertainment successfully emerged from the Chapter 11 reorganization process as an Carl Icahn-owned entity. A group of Tropicana entities, known as the LandCo Debtors, which own Tropicana casino property in Las Vegas, have obtained approval of a separate Chapter 11 plan. Ilana Volkov, Esq., and Michael D. Sirota, Esq., at Cole, Schotz, Meisel, Forman & Leonard, in Hackensack, New Jersey, represented the New Jersey Debtors. Kurtzman Carson Consultants LLC acts as their claims and notice agent. Adamar disclosed $500 million to $1 billion both in total assets and debts in its petition. Manchester Mall disclosed $1 million to $10 million in total assets, and less than $50,000 in total debts in its petition. Bankruptcy Creditors' Service, Inc., publishes Tropicana Bankruptcy News. The newsletter tracks the chapter 11 restructuring proceedings commenced by Tropicana Entertainment LLC and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000 TROPICANA ENT: W. Yung, et al., Want Lightsway Suit Dropped ----------------------------------------------------------- Defendants William J. Yung, III; Wimar Tahoe Corporation, formerly known as Tropicana Casino and Resorts, Inc.; Columbia Sussex Corporation; Joe Yung; 1994 William J. Yung Family Trust; CSC Holdings, LLC; JMBS Casino Trust; and Casuarina Cayman Holdings, LLC ask the Court to dismiss the Complaint of Lightsway Litigation Services LLC for failure to state a claim pursuant to Rules 7008 and 7012 of the Federal Rules of Bankruptcy Procedure, and Rules 8(a)(2) and 12(b)(6) of the Federal Rules of Civil Procedure. In an effort to attach responsibility for the unfortunate circumstances that led to the bankruptcy of the Debtors, Lightsway, as trustee of Tropicana Litigation Trust, has initiated the instant action by filing a fatally flawed Complaint premised on conclusory averments unsupported by factual allegations against the Defendants, Sandra G. M. Selzer, Esq., at Greenberg Traurig, LLP, in Wilmington, Delaware -- selzers@gtlaw.com -- says. Ms. Selzer asserts that the Complaint should be dismissed for these reasons: (1) The pleading deficiencies in the allegation of Breach of Fiduciary Obligation by Defendants Mr. Yung, Wimar, and Columbia Sussex make it impossible to discern which of the three defendants named had or breached any duty to any defendant. The clear deficiencies further disallow the application of appropriate choice of law analysis and, in turn, do not permit a determination of whether the tort claims made (i) were timely filed, (ii) are actionable under the law of the state that has the most significant contacts, and (iii) are amenable to a dispositive defense like the Economic Loss Doctrine or Business Judgment Rule. (2) The allegation of Breach of Contract against Wimar and Columbia Sussex purports to set forth claims that arise from the alleged breach of Service Agreements between Columbia Sussex and Wimar and largely unspecified defendants. It is axiomatic that in a breach of contract claim, Lightsway must adequately plead the existence of an enforceable contract, a breach of the terms of the contract, and the damages resulting from the breach. (3) The allegation of Breach of Good Faith and Fair Dealing against Wimar and Columbia Sussex under the Complaint must be dismissed because none of the possible jurisdictions identified in "somewhat illusory terms" -- Indiana, Mississippi, Nevada, and New Jersey -- recognize a breach of good faith and fair dealing as an independent cause of action. (4) The request for Equitable Subordination set forth in only the most conclusory language does not adequately allege facts that support either a finding of the required inequitable conduct by any of the named Equitable Subordination Defendants or that any of the three Defendants exercised the requisite control over the Debtors required by Section 101(31)(B)(iii) of the Bankruptcy Code. In separate filings, the parties sought and obtained approval from the Court of their stipulation extending until May 21, 2010, Lightsway's time to respond to the Motion to Dismiss. About Tropicana Entertainment Tropicana Entertainment LLC and its units owned eleven casino properties in eight distinct gaming markets with premier properties in Las Vegas, Nevada, and Atlantic City, New Jersey. Tropicana Entertainment LLC and certain affiliates filed for Chapter 11 protection on May 5, 2008 (Bankr. D. Del. Case No. 08- 10856). Kirkland & Ellis LLP and Mark D. Collins, Esq., at Richards Layton & Finger, represent the Debtors in their restructuring efforts. Their financial advisor is Lazard Ltd. Their notice, claims, and balloting agent is Kurtzman Carson Consultants LLC. Epiq Bankruptcy Solutions LLC is the Debtors' Web site administration agent. AlixPartners LLP is the Debtors' restructuring advisor. Stroock & Stroock & Lavan LLP and Morris Nichols Arsht & Tunnell LLP represent the Official Committee of Unsecured Creditors in this case. Capstone Advisory Group LLC is financial advisor to the Creditors' Committee. The OpCo Debtors, a group of Tropicana entities owning casinos and resorts in Atlantic City, New Jersey and Evansville, Indiana obtained confirmation from the Bankruptcy Court of a reorganization plan. On April 29, 2009, non-debtor units of the OpCo Debtors, designated as the New Jersey Debtors -- Adamar of New Jersey, Inc., and its affiliate, Manchester Mall, Inc. -- filed for Chapter 11 (Bankr. D. N.J. Lead Case No. 09- 20711) to effectuate a sale of the Atlantic City Resort and Casino to a group of Investors-led by Carl Icahn. Judge Judith H. Wizmur presides over the cases. Manchester Mall is a wholly owned subsidiary of Adamar that owns and operates certain real property utilized in the New Jersey Debtors' business operations. Effective March 8, Tropicana Entertainment successfully emerged from the Chapter 11 reorganization process as an Carl Icahn-owned entity. A group of Tropicana entities, known as the LandCo Debtors, which own Tropicana casino property in Las Vegas, have obtained approval of a separate Chapter 11 plan. Ilana Volkov, Esq., and Michael D. Sirota, Esq., at Cole, Schotz, Meisel, Forman & Leonard, in Hackensack, New Jersey, represented the New Jersey Debtors. Kurtzman Carson Consultants LLC acts as their claims and notice agent. Adamar disclosed $500 million to $1 billion both in total assets and debts in its petition. Manchester Mall disclosed $1 million to $10 million in total assets, and less than $50,000 in total debts in its petition. Bankruptcy Creditors' Service, Inc., publishes Tropicana Bankruptcy News. The newsletter tracks the chapter 11 restructuring proceedings commenced by Tropicana Entertainment LLC and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000 TRUMP ENTERTAINMENT: Posts $32 Million Net Loss in Q1 2010 ---------------------------------------------------------- Trump Entertainment Resorts, Inc. filed its quarterly report on Form 10-Q, showing a net loss of $32.0 million on $168.4 million of net revenues for the three months ended March 31, 2010, compared with a net loss of $65.6 million on $192.3 million of net revenues for the same period of 2009. Loss from operations was $21.3 million during the three months ended March 31, 2010, compared to $26.8 million during the three months ended March 31, 2009 due to the decrease in net revenues partially offset by a $29.3 million decrease in total costs and expenses. The decrease in total costs and expenses was primarily due to a $13.1 million decrease in gaming expenses and an $11 million decrease in reorganization expense and related costs. Interest expense was $10.9 million during the three months ended March 31, 2010, compared to $39.3 million during the three months ended March 31, 2009. The Company's balance sheet as of March 31, 2010, showed $1.372 billion in assets and $2.096 billion of liabilities, for a stockholders' deficit of $723.8 million. On December 24, 2009, the Debtors and the Ad Hoc Committee filed with the Bankruptcy Court the AHC/Debtors Plan and AHC/Debtors Disclosure Statement. On May 7, 2010, the Bankruptcy Court entered an order confirming the AHC/Debtors Plan. The Company anticipates that the effective date of the AHC/Debtors Plan will occur during the third quarter of 2010. If the AHC/Debtors Plan becomes effective, the Debtors will receive $100 million in available funds upon emergence to fund their operations and capital expenditures, as well as to repay any borrowings under the DIP Note Purchase Agreement. A full-text copy of the quarterly report is available for free at: http://researcharchives.com/t/s?623e Based in Atlantic City, New Jersey, Trump Entertainment Resorts Inc. (NASDAQ: TRMP) -- http://www.trumpcasinos.com/-- owns and operates three casino hotel properties in Atlantic City, New Jersey, which include Trump Taj Mahal Casino Resort, Trump Plaza Hotel and Casino, and Trump Marina Hotel Casino. The Company conducts gaming activities and provides customers with casino resort and entertainment. Donald Trump is a shareholder of the Company and, as its non- executive Chairman, is not involved in the daily operations of the Company. The Company is separate and distinct from Mr. Trump's privately held real estate and other holdings. Trump Entertainment Resorts, TCI 2 Holdings, LLC, and other affiliates filed for Chapter 11 on February 17, 2009 (Bankr. D. N.J., Lead Case No. 09-13654). The Company has tapped Charles A. Stanziale, Jr., Esq., at McCarter & English, LLP, as lead counsel, and Weil Gotshal & Manges as co-counsel. Ernst & Young LLP is the Company's auditor and accountant and Lazard Freres & Co. LLC is the financial advisor. Garden City Group is the claims agent. The Company disclosed assets of $2,055,555,000 and debts of $1,737,726,000 as of December 31, 2008. Trump Hotels & Casino Resorts, Inc., filed for Chapter 11 protection on Nov. 21, 2004 (Bankr. D. N.J. Case No. 04-46898 through 04-46925). Trump Hotels' obtained the Court's confirmation of its Chapter 11 plan on April 5, 2005, and in May 2005, it exited from bankruptcy under the name Trump Entertainment Resorts Inc. UNI-PIXEL INC: Incurs $2.1 Million Net Loss in Q1 2010 ------------------------------------------------------ Uni-Pixel, Inc. filed its quarterly report on Form 10-Q, showing a net loss of $2,147,271 on $63,536 of revenue for the three months ended March 31, 2010, compared with a net loss of $1,819,586 on zero revenue for the same period of 2009. The Company's balance sheet as of March 31, 2010, showed $1,277,782 in assets and $4,125,039 of liabilities, for a stockholders' deficit of $2,847,257. PMB Helin Donovan, LLP, in Houston, in its report on the Company's financial statements for the year ended December 31, 2009, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has sustained losses and negative cash flows from operations since inception. "Uni-Pixel incurred recurring net losses of $2.1 million and $1.8 million for the three months ended March 31, 2010, and 2009, respectively, has negative working capital of $3.2 million and has an accumulated deficit of $52.1 million as of March 31, 2010. The Company's ability to meet its obligations in the ordinary course of business is dependent upon its ability to establish profitable operations, raise additional financing through public or private equity financings, enter into collaborative or other arrangements with corporate sources, or secure other sources of financing to fund operations. A full-text copy of the quarterly report is available for free at: http://researcharchives.com/t/s?624a The Woodlands, Tex.-based Uni-Pixel, Inc. Uni-Pixel, Inc., a Delaware corporation, is the parent company of Uni-Pixel Displays, Inc., its wholly-owned operating subsidiary. The Company's common stock, par value $0.001 per share, is quoted on the NASDAQ Over the Counter - Bulletin Board under the ticker symbol "UNXL." Uni-Pixel is a production stage company delivering its Clearly Superior(TM) Performance Engineered Films to the Lighting & Display, Solar and Flexible Electronics market segments. UNION FOR TRADITIONAL JUDAISM: Files for Ch. 11 in White Plains --------------------------------------------------------------- Union for Traditional Judaism, a not-for-profit organization that trains and places rabbis, filed a Chapter 11 bankruptcy petition on May 14 in White Plains, New York (Bankr. S.D.N.Y. Case No. 10- 22958). Bill Rochelle at Bloomberg News reports that the Debtor filed for bankruptcy to facilitate sale of its facility in Teaneck, New Jersey. In addition to training rabbis, the Union says in a court filing that it "supports and encourages traditional Jewish practices among individuals." According to the report, a court filing says there is a $1.45 million cash offer to purchase the Teaneck facility. The Union says that a sale has been blocked by litigation with Netivot Shalom, a congregation that uses part of the facility. The Union says it intends on using the bankruptcy court to force a sale of the property. The petition says assets and debt are both more than $1 million. VERENIUM CORP: Posts $12 Million Net Loss for First Quarter ----------------------------------------------------------- Verenium Corporation filed its quarterly report on Form 10-Q, showing a net loss attributed to Verenium of $12.0 million on $13.0 million of revenue for the three months ended March 31, 2010, compared with net income attributed to Verenium of $3.3 million on $14.4 million of revenue for the same period of 2009. "I'm very pleased with the successful first quarter and start to 2010 Verenium had with both its biofuels and specialty enzymes business units," said Carlos A. Riva, President and Chief Executive Officer of Verenium. "Of note, the $5.0 million in gross margin generated from enzyme sales for the quarter is a record for us and is an indication of the strength in that business." Product gross margin dollars increased to $5.0 million in the first quarter ended March 31, 2010, versus $4.8 million for the same period in the prior year, due primarily to an increase in the royalty on Phyzyme profits received from Danisco, combined with an increase in sales of higher margin enzyme products. As of March 31, 2010, the Company had unrestricted cash and cash equivalents totaling roughly $15.5 million compared to $32.1 million as of December 31, 2009. A significant portion of the decrease in cash and cash equivalents is due to the deconsolidation of Vercipia cash and cash equivalents of roughly $7.2 million, based upon authoritative accounting guidance effective on January 1, 2010. The Company's balance sheet as of March 31, 2010, showed $149.4 million in assets, $135.9 million of liabilities, and $13.5 million of stockholders' equity. As reported in the Troubled Company Reporter on March 19, 2010, Ernst & Young LLP, in San Diego, Calif., expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that of the Company's recurring operating losses and accumulated deficit of $630.0 million at December 31, 2009. "The Company has incurred a net loss of $12.0 million for the three months ended March 31, 2010, and has an accumulated deficit of $637.9 million as of March 31, 2010. Based on the Company's current operating plan, its existing working capital will not be sufficient to meet the cash requirements to fund the Company's planned operating expenses, capital expenditures, required and potential payments under the 2007 Notes, the 2008 Notes, and the 2009 Notes, and working capital requirements through December 31, 2010, without additional sources of cash and/or the deferral, reduction or elimination of significant planned expenditures." These factors raise substantial doubt about the Company's ability to continue as a going concern. A full-text copy of the press release is available for free at: http://researcharchives.com/t/s?6245 A full-text copy of the quarterly report is available for free at: http://researcharchives.com/t/s?6244 Cambridge, Mass.-based Verenium Corporation (NASDAQ: VRNM) -- http://www.verenium.com/-- operates in two business segments, biofuels and specialty enzymes. The Company's biofuels business segment operates through its wholly-owned subsidiary, Verenium Biofuels Corporation, and is focused on developing unique technical and operational capabilities designed to enable the production and commercialization of biofuels, in particular ethanol produced from cellulosic biomass. The Company's specialty enzymes segment develops high-performance enzymes for use within the alternative fuels, specialty industrial processes, and animal nutrition and health markets to enable higher throughput, lower costs, and improved environmental outcomes. VYTERIS INC: Reports $3.2 Million Net Loss for March 31 Quarter --------------------------------------------------------------- Vyteris, Inc., reported a net loss of $3,206,293 for the three months ended March 31, 2010, from a net loss of $1,662,401 for the same period in 2009. Total revenues were $14,323 for the 2010 first quarter from $814,487 for the 2009 first quarter. At March 31, 2010, the Company had total assets of $3,551,507 against total liabilities of $13,033,654, resulting in stockholders' deficit of $9,482,147. The March 31, 2010 balance sheet showed strained liquidity: The Company had total current assets of $1,816,956 against total current liabilities of $9,984,423. In its March 2010 Form 10-Q report, the Company said there is substantial doubt about its ability to continue as a going concern. On March 31, 2010, the Company's cash position was $1.7 million, and it had a working capital deficit of $8.2 million. The Company said it implemented several cost reduction measures in 2009, including headcount and salary reductions, reducing the level of effort spent on research and development programs, general decrease in overhead costs and renegotiation of its cost structures with its vendors. In December 2009, Ferring discontinued its collaborative effort with the Company for its joint infertility project. As reported by the Troubled Company Reporter, the Company on April 9, 2010, received notice from Ferring that the Company 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 $1.7 million by April 30, 2010. The Company does not concur as to the calculation of the amount owed and will endeavor to resolve the sum due with Ferring. Ferring has agreed to forbear from exercising any remedies against the Company 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. "Unless we are able to raise additional funding, we may be unable to continue operations. Especially in the current economic climate, additional funding may not be available on favorable terms or at all. Failure to obtain such financing would require management to substantially curtail operations, which would result in a material adverse effect on our financial position and results of operations. In the event that we do raise additional capital through a borrowing, the covenants associated with existing debt instruments may impose substantial impediments on us," the Company said. A full-text copy of the Company's Form 10-Q report is available at no charge at http://ResearchArchives.com/t/s?6258 Based in Fair Lawn, New Jersey, Vyteris, Inc. (formerly Vyteris Holdings (Nevada), Inc., has developed and produced the first FDA- approved electronically controlled transdermal drug delivery system that transports drugs through the skin comfortably, without needles. This platform technology can be used to administer a wide variety of therapeutics either directly into the skin or into the bloodstream. The Company holds approximately 50 U.S. and 70 foreign patents relating to the delivery of drugs across the skin using an electronically controlled "smart patch" device with electric current. VYTERIS INC: Closes Sale of $725,000 Promissory Notes Due 2013 -------------------------------------------------------------- Vyteris, Inc., on May 6, 2010, consummated a private placement to accredited investors of $725,000 principal amount of Senior Subordinated Convertible Promissory Notes due 2013. The sale of the Notes also included issuance to Investors of five-year warrants to purchase an aggregate of 3,625,000 shares of Vyteris' common stock with an exercise price of $0.25 per share. This closing was the final closing of the private placement of Notes. Spencer Trask Ventures, Inc. acted as placement agent in connection with the private placement. The Notes bear no interest and are convertible into common stock of Vyteris at the option of the Investors at an initial conversion price of $0.20 per share. In addition, the Notes automatically convert into common stock of Vyteris if the closing bid price of Vyteris' common stock equals or exceeds 300% of the conversion price for a period of twenty consecutive trading days. Vyteris provided customary "piggyback" registration rights for a 24-month period to the Investors with respect to the shares of common stock of Vyteris underlying the Notes and warrants. In connection with the final closing, Vyteris received net proceeds of $605,337 after payment of an aggregate of $94,250 of commissions and expense allowance to the placement agent and approximately $25,412 of other offering and related costs. The placement agent also received warrants to purchase 1,450,000 shares of Vyteris' common stock (725,000 warrants at an exercise price of $0.20 and 725,000 warrants at an exercise price of $0.25) bearing substantially the same terms as the Investor warrants. This private placement transaction to accredited investors is exempt from registration under the Securities Act of 1933, as amended, pursuant to Section 4(2) thereof and Regulation D, promulgated thereunder. About Vyteris Based in Fair Lawn, New Jersey, Vyteris, Inc. (formerly Vyteris Holdings (Nevada), Inc., has developed and produced the first FDA- approved electronically controlled transdermal drug delivery system that transports drugs through the skin comfortably, without needles. This platform technology can be used to administer a wide variety of therapeutics either directly into the skin or into the bloodstream. The Company holds approximately 50 U.S. and 70 foreign patents relating to the delivery of drugs across the skin using an electronically controlled "smart patch" device with electric current. At March 31, 2010, the Company had total assets of $3,551,507 against total liabilities of $13,033,654, resulting in stockholders' deficit of $9,482,147. The March 31, 2010 balance sheet showed strained liquidity: The Company had total current assets of $1,816,956 against total current liabilities of $9,984,423. In its March 2010 Form 10-Q report, the Company said there is substantial doubt about its ability to continue as a going concern. In December 2009, Ferring discontinued its collaborative effort with the Company for its joint infertility project. As reported by the Troubled Company Reporter, the Company on April 9, 2010, received notice from Ferring that the Company 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 $1.7 million by April 30, 2010. The Company does not concur as to the calculation of the amount owed and will endeavor to resolve the sum due with Ferring. Ferring has agreed to forbear from exercising any remedies against the Company 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. "Unless we are able to raise additional funding, we may be unable to continue operations. Especially in the current economic climate, additional funding may not be available on favorable terms or at all. Failure to obtain such financing would require management to substantially curtail operations, which would result in a material adverse effect on our financial position and results of operations. In the event that we do raise additional capital through a borrowing, the covenants associated with existing debt instruments may impose substantial impediments on us," the Company said. WASHINGTON MUTUAL: FDIC & PBGC Object to Plan Outline ----------------------------------------------------- Bankruptcy Law360 reports that the Federal Deposit Insurance Corp. and Pension Benefit Guaranty Corp. are objecting to the proposed disclosure statement for Washington Mutual Inc., arguing it is premised on an unlikely global settlement of substantial pending litigation. A proposed settlement that would resolve claims against WaMu, its new owner JPMorgan Chase Bank NA and the FDIC is only a draft and not all parties have yet agreed, according to Law60. Based in Seattle, Washington, Washington Mutual Inc. -- http://www.wamu.com/-- is a holding company for Washington Mutual Bank as well as numerous non-bank subsidiaries. The Company operates in four segments: the Retail Banking Group, which operates a retail bank network of 2,257 stores in California, Florida, Texas, New York, Washington, Illinois, Oregon, New Jersey, Georgia, Arizona, Colorado, Nevada, Utah, Idaho and Connecticut; the Card Services Group, which operates a nationwide credit card lending business; the Commercial Group, which conducts a multi-family and commercial real estate lending business in selected markets, and the Home Loans Group, which engages in nationwide single-family residential real estate lending, servicing and capital markets activities. Washington Mutual Bank was taken over September 25 by U.S. government regulators. The next day, WaMu and its affiliate, WMI Investment Corp., filed separate petitions for Chapter 11 relief (Bankr. D. Del. 08-12229 and 08-12228, respectively). Wamu owns 100% of the equity in WMI Investment. Weil Gotshal & Manges represents the Debtors as counsel. When WaMu filed for protection from its creditors, it listed assets of $32,896,605,516 and debts of $8,167,022,695. WMI Investment listed assets of $500,000,000 to $1,000,000,000 with zero debts. Peter Calamari, Esq., and David Elsberg, Esq., at Quinn Emanuel Urquhart Oliver & Hedges, LLP, served as legal counsel to WMI with responsibility for the litigation. Brian Rosen, Esq., at Weil, Gotshal & Manges LLP served as legal counsel to WMI with responsibility for the chapter 11 case. Bankruptcy Creditors' Service Inc. publishes Washington Mutual Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Washington Mutual Inc. (http://bankrupt.com/newsstand/or 215/945-7000). WASHINGTON MUTUAL: Files Amended Plan of Reorganization ------------------------------------------------------- Washington Mutual, Inc. has filed with the United States Bankruptcy Court for the District of Delaware an Amended Plan of Reorganization (the "Plan") and Disclosure Statement. The Plan contemplates the implementation of a global settlement agreement among WMI, the Federal Deposit Insurance Corporation and JPMorgan Chase Bank, N.A. The terms are reflected in the Amended Plan and Disclosure Statement filed with the Bankruptcy Court. As previously announced, the Plan, under which the Settlement will be implemented, contemplates, among other things: WMI will establish a liquidating trust to make distributions to creditors on account of their allowed claims. In accordance with the terms of the Plan, the trust will distribute funds in excess of approximately $7 billion, including approximately $4 billion of previously disputed funds on deposit with JPMC. It is anticipated that the reorganized WMI will undertake a rights offering pursuant to which certain creditors will receive a right to purchase newly issued shares of reorganized WMI common stock. The reorganized WMI will retain equity interests in WMI Investment Corp. and WM Mortgage Reinsurance Company. JPMC will assume certain liabilities related to benefit plans (including the pension plan sponsored by WMI). The various litigations involving WMI, JPMC and FDIC will be stayed or dismissed. In addition, JPMC and the FDIC (in its capacity as receiver of Washington Mutual Bank and in its corporate capacity) will withdraw claims against WMI's bankruptcy estate and the parties will exchange mutual releases. Preferred and common equity securities previously issued by WMI will be cancelled. The Bankruptcy Court will hold a hearing on May 19, 2010 to consider approval of the Disclosure Statement. Following approval of the Disclosure Statement, WMI will ask the Bankruptcy Court to confirm the Plan. The Disclosure Statement filed today contains historical information regarding WMI and certain of its affiliates, a description of proposed distributions to creditors, an analysis of the Plan's feasibility, as well as many of the technical matters required for the solicitation process, such as descriptions of who will be eligible to vote on the Plan and the voting process itself. WMI's Plan and Disclosure Statement are available at www.kccllc.net/wamu. T he Plan is subject to confirmation by the Court. 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). WAVE SYSTEMS: Acquires 2 Storage Security Patents for $1.1MM ------------------------------------------------------------ Wave Systems Corp. on May 7, 2010, entered into a Patent Purchase Agreement with Antique Books, Inc. and Robert Thibadeau, Ph.D. pursuant to which the Company acquired two U.S. patents pertaining to the methods and systems for promoting security in a computer employing attached storage devices for an aggregate purchase price of $1.1 million in cash. The patents (U.S. patents #7,036,020 and #7,426,747) describe certain elements of core technology underlying self-encrypting hard drives. Mr. Thibadeau is a noted computer security expert who joined Wave in February 2010 as Senior Vice President and Chief Scientist. Mr. Thibadeau is the sole shareholder of Antique Books. The patents were issued in 2006 and 2008 and are valid until 2021. "These patents cover certain core specifications of self- encrypting hard drives, making them an important addition to our existing IP portfolio," said Steven Sprague, CEO & President of Wave. "We believe that these assets can help to strengthen our position in the emerging hardware security market and that it furthers Wave's strategic and commercial interest to have these as part of our IP portfolio. " Lee, Massachusetts-based Wave Systems Corp. (NASDAQ: WAVX) -- http://www.wave.com/-- develops, produces and markets products for hardware-based digital security, including security applications and services that are complementary to and work with the specifications of the Trusted Computing Group, an industry standards organization comprised of computer and device manufacturers, software vendors and other computing products manufacturers. At March 31, 2010, the Company had total assets of $9,485,633 against total liabilities of $7,702,494, resulting in stockholders' deficit of $1,783,139. In its March 2010 quarterly on Form 10-Q, Wave said substantial doubt exists with respect to its ability to continue as a going concern, due to its current cash position, its capital needs over the next 12 months and beyond, the fact that it may require additional financing and uncertainty as to whether it will achieve our sales forecast for products and services. Wave noted it has had substantial operating losses since its inception, and as of March 31, 2010, had an accumulated deficit of $348,800,290. Wave also expects to incur an operating loss for the fiscal year 2010. As of March 31, 2010, Wave had positive working capital of $1,571,032. WAVE SYSTEMS: Posts $764,175 Net Loss for March 31 Quarter ---------------------------------------------------------- Wave Systems Corp. reported a net loss of $764,175 for the three months ended March 31, 2010, from a net loss of $1,523,233 for the same period in 2009. Total net revenues from licensing and servicing were $5,869,428 for the 2010 first quarter from $4,034,181 for the 2009 first quarter. At March 31, 2010, the Company had total assets of $9,485,633 against total liabilities of $7,702,494, resulting in stockholders' deficit of $1,783,139. In its March 2010 quarterly on Form 10-Q, Wave said substantial doubt exists with respect to its ability to continue as a going concern, due to its current cash position, its capital needs over the next 12 months and beyond, the fact that it may require additional financing and uncertainty as to whether it will achieve our sales forecast for products and services. Wave noted it has had substantial operating losses since its inception, and as of March 31, 2010, had an accumulated deficit of $348,800,290. Wave also expects to incur an operating loss for the fiscal year 2010. As of March 31, 2010, Wave had positive working capital of $1,571,032. Due to the early stage nature of its market category, Wave is unable to predict with a high enough level of certainty whether enough revenue will be generated to fund its cash flow requirements for the 12-months ending March 31, 2011. Given the uncertainty with respect to Wave's revenue forecast for the 12- months ending March 31, 2011, Wave may be required to raise additional capital through either equity or debt financing in order to adequately fund its capital requirements for the 12- months ending March 31, 2011. As of March 31, 2010, Wave had approximately $5.1 million of cash on hand and positive working capital of approximately $1.6 million. Considering its current cash balance and Wave's projected operating cash requirements, the Company projects it will have enough liquid assets to continue operating through March 31, 2011. A full-text copy of the Company's quarterly report on Form 10-Q is available at no charge at http://ResearchArchives.com/t/s?624b A full-text copy of the Company's earnings release is available at no charge at http://ResearchArchives.com/t/s?624c Lee, Massachusetts-based Wave Systems Corp. (NASDAQ: WAVX) -- http://www.wave.com/-- develops, produces and markets products for hardware-based digital security, including security applications and services that are complementary to and work with the specifications of the Trusted Computing Group, an industry standards organization comprised of computer and device manufacturers, software vendors and other computing products manufacturers. WAVE SYSTEMS: 2010 Annual Stockholders' Meeting Set for June 21 --------------------------------------------------------------- The 2010 Annual Meeting of Stockholders of Wave Systems Corp. will be held at 4:00 p.m. on June 21, 2010 at The New York Helmsley Hotel, 212 East 42nd Street, in New York, for these purposes: 1. To re-elect John E. Bagalay, Jr., Nolan Bushnell, George Gilder, John E. McConnaughy, Jr. and Steven Sprague as directors of the Company to hold office until the next Annual Meeting and until their successors are duly elected and qualified; 2. Ratification of the appointment of KPMG LLP as the Company's independent registered public accounting firm for 2010; and 3. To transact such other business as may properly come before the Annual Meeting or at any adjournments or postponements thereof. The Board of Directors has fixed the close of business on May 3, 2010, as the record date for the determination of the stockholders entitled to notice of, and to vote at, the Annual Meeting of Stockholders and at any adjournments or postponements thereof. A full-text copy of the Company's proxy statement is available at no charge at http://ResearchArchives.com/t/s?624d Lee, Massachusetts-based Wave Systems Corp. (NASDAQ: WAVX) -- http://www.wave.com/-- develops, produces and markets products for hardware-based digital security, including security applications and services that are complementary to and work with the specifications of the Trusted Computing Group, an industry standards organization comprised of computer and device manufacturers, software vendors and other computing products manufacturers. At March 31, 2010, the Company had total assets of $9,485,633 against total liabilities of $7,702,494, resulting in stockholders' deficit of $1,783,139. In its March 2010 quarterly on Form 10-Q, Wave said substantial doubt exists with respect to its ability to continue as a going concern, due to its current cash position, its capital needs over the next 12 months and beyond, the fact that it may require additional financing and uncertainty as to whether it will achieve our sales forecast for products and services. Wave noted it has had substantial operating losses since its inception, and as of March 31, 2010, had an accumulated deficit of $348,800,290. Wave also expects to incur an operating loss for the fiscal year 2010. As of March 31, 2010, Wave had positive working capital of $1,571,032. WHITE BIRCH: S&P Sees Poor Recovery on CCAA & Ch. 11 Proceedings ---------------------------------------------------------------- Standard & Poor's Ratings Services revised its recovery rating on White Birch Paper Co.'s first-lien term loan to '6' from '4', indicating our expectation of negligible (0% to 10%) recovery upon the conclusion of proceedings under the Companies' Creditors Arrangement Act in Canada and Chapter 11 in the U.S. The issue- level rating on the first-lien term loan remains at 'D'. At the same time, S&P withdrew the 'D' issue-level and '1' recovery ratings on the company's asset-based revolving credit facility, which was repaid in full in March 2010 with a portion of the proceeds of the company's $140 million debtor-in-possession (DIP) financing. "The recovery rating revision reflects our expectation that after we deduct priority claims, which include claims under the DIP facility, from our estimated gross enterprise value of approximately $140 million, only a nominal amount of enterprise value would remain to cover the first-lien term loan," said Standard & Poor's credit analyst Andy Sookram. "As a result, we have revised the recovery rating to '6' on the first-lien term loan." "We plan to withdraw our ratings on White Birch's first-lien and second-lien term debt shortly. As a result, these ratings will not be subject to any further surveillance or review. RATINGS LIST White Birch Paper Co. Corporate Credit Rating D/--/-- Senior Secured First-Lien Term Ln D Senior Sec. Second-Lien Term Ln D Recovery Rating 6 To From Rating Revised White Birch Paper Co. First-Lien Term Loan Recovery Rating 6 4 Ratings Withdrawn To From White Birch Paper Co. Senior Sec. Revolving Credit Fac NR D Recovery Rating NR 6 XERIUM TECHNOLOGIES: Court Enters Order Confirming Prepack Plan --------------------------------------------------------------- Judge Kevin J. Carey of the U.S. Bankruptcy Court for the District of Delaware confirmed the Prepackaged Chapter 11 Plan of Reorganization filed by Xerium Technologies, Inc., and its debtor affiliates on May 12, 2010, after determining that the Plan satisfies the requirements of Section 1129(a) of the Bankruptcy Code. Judge Carey also approved the Disclosure Statement explaining the Prepackaged Plan having found that it contains adequate information under Section 1125(a)(1). Judge Carey presided over a combined Disclosure Statement and Plan Confirmation Hearing on May 12. Before the hearing, the Debtors submitted a proposed confirmation order stepping the Court through the 16 requirements for confirmation under Section 1129(a). Judge Carey signed the proposed confirmation order as filed. The Court has determined that the indicative total enterprise value for the Debtors of $715 million is a reasonable determination of their going concern value as of the Effective Date; reflects a fair resolution of the positions of the Debtors' significant stakeholders with respect to the Debtors' going concern value as of the Effective Date; and is supported by the extensive negotiations of the Debtors and their significant stakeholders in achieving the resolution. The plan confirmation objection of Privet Fund Management, LLC, and Tiburon Capital Management, LLC, is overruled in all respects for all reasons stated at the Disclosure Statement and Plan Confirmation Hearing held on May 12. Privet and Tiburon, after entry of the Confirmation Order, withdrew their plan objection. All other objections that have not been withdrawn prior to the entry of the Confirmation Order or are not cured by the Confirmation Order are deemed overruled. All withdrawn objections, if any, are deemed withdrawn with prejudice. To the extent not previously satisfied pursuant to the prior order of the Court, all valid claims relating to reclamation demands given in accordance with Section 546(a) will be satisfied pursuant to the Plan and all Reclamation Demands given to any of the Debtors that have not been withdrawn prior to the entry of the Confirmation Order are deemed withdrawn with prejudice. One Tech Westborough, LLC, will be allowed a claim pursuant to Section 502(b)(6) in the aggregate amount of $417,352 in full and final satisfaction of all its claims. The Xerium Inc. Union Pension Plan and the Xerium Inc. Pension Plan for US Salaried and Non-Union Hourly Employees will be assumed under the Plan by Debtor Stowe Woodward LLC. A full-text copy of the Confirmation Order is available for free at http://bankrupt.com/misc/xeriumplanconforder.pdf About Xerium Technologies Based in Raleigh, North Carolina, Xerium Technologies, Inc. (NYSE: XRM), manufactures and supplies two types of consumable products used primarily in the production of paper: clothing and roll covers. The Company, which operates around the world under a variety of brand names, utilizes a broad portfolio of patented and proprietary technologies to provide customers with tailored solutions and products integral to production, all designed to optimize performance and reduce operational costs. With 32 manufacturing facilities in 13 countries around the world, Xerium has approximately 3,300 employees. Xerium Technologies and certain subsidiaries filed for Chapter 11 on March 30, 2010 (Bankr. D. Del. Lead Case No. 10-11031). Judge Kevin J. Carey presides over the cases. John J. Rapisardi, Esq.; George A. Davis, Esq.; and Sharon J. Richardson, Esq., at Cadwalader, Wickersham & Taft LLP; and Mark D. Collins, Esq., at Richards, Layton & Finger, P.A., serve as bankruptcy counsel. Brian Fox, Michelle Campbell, and Michael Hartley at AlixPartners, LLC, serve as the Debtors' restructuring advisors. Stephen Ledoux and Daniel Gilligan at Rothschild Inc. serve as the Debtors' investment bankers. Garden City Group Inc. is the Debtors' claims agent. Xerium Technologies disclosed total assets of $693,511,000 and total debts of $813,168,000 in its petition. Bankruptcy Creditors' Service, Inc., publishes XERIUM TECHNOLOGIES BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by Xerium Technologies and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) XERIUM TECHNOLOGIES: Rule 2015.3 Reports Due June 30 ---------------------------------------------------- Xerium Technologies Inc. received an extension until June 30, 2010, of the deadline to file reports pursuant to Rule 2015.3 of the Federal Rules of Bankruptcy Procedure. About Xerium Technologies Based in Raleigh, North Carolina, Xerium Technologies, Inc. (NYSE: XRM), manufactures and supplies two types of consumable products used primarily in the production of paper: clothing and roll covers. The Company, which operates around the world under a variety of brand names, utilizes a broad portfolio of patented and proprietary technologies to provide customers with tailored solutions and products integral to production, all designed to optimize performance and reduce operational costs. With 32 manufacturing facilities in 13 countries around the world, Xerium has approximately 3,300 employees. Xerium Technologies and certain subsidiaries filed for Chapter 11 on March 30, 2010 (Bankr. D. Del. Lead Case No. 10-11031). Judge Kevin J. Carey presides over the cases. John J. Rapisardi, Esq.; George A. Davis, Esq.; and Sharon J. Richardson, Esq., at Cadwalader, Wickersham & Taft LLP; and Mark D. Collins, Esq., at Richards, Layton & Finger, P.A., serve as bankruptcy counsel. Brian Fox, Michelle Campbell, and Michael Hartley at AlixPartners, LLC, serve as the Debtors' restructuring advisors. Stephen Ledoux and Daniel Gilligan at Rothschild Inc. serve as the Debtors' investment bankers. Garden City Group Inc. is the Debtors' claims agent. Xerium Technologies disclosed total assets of $693,511,000 and total debts of $813,168,000 in its petition. Bankruptcy Creditors' Service, Inc., publishes XERIUM TECHNOLOGIES BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by Xerium Technologies and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) XERIUM TECHNOLOGIES: Schedules Deadline Extended Until June 30 -------------------------------------------------------------- The Bankruptcy Court gave Xerium Technologies Inc. and its units until June 30, 2010, to file their schedules of assets and liabilities and statements of financial affairs. About Xerium Technologies Based in Raleigh, North Carolina, Xerium Technologies, Inc. (NYSE: XRM), manufactures and supplies two types of consumable products used primarily in the production of paper: clothing and roll covers. The Company, which operates around the world under a variety of brand names, utilizes a broad portfolio of patented and proprietary technologies to provide customers with tailored solutions and products integral to production, all designed to optimize performance and reduce operational costs. With 32 manufacturing facilities in 13 countries around the world, Xerium has approximately 3,300 employees. Xerium Technologies and certain subsidiaries filed for Chapter 11 on March 30, 2010 (Bankr. D. Del. Lead Case No. 10-11031). Judge Kevin J. Carey presides over the cases. John J. Rapisardi, Esq.; George A. Davis, Esq.; and Sharon J. Richardson, Esq., at Cadwalader, Wickersham & Taft LLP; and Mark D. Collins, Esq., at Richards, Layton & Finger, P.A., serve as bankruptcy counsel. Brian Fox, Michelle Campbell, and Michael Hartley at AlixPartners, LLC, serve as the Debtors' restructuring advisors. Stephen Ledoux and Daniel Gilligan at Rothschild Inc. serve as the Debtors' investment bankers. Garden City Group Inc. is the Debtors' claims agent. Xerium Technologies disclosed total assets of $693,511,000 and total debts of $813,168,000 in its petition. Bankruptcy Creditors' Service, Inc., publishes XERIUM TECHNOLOGIES BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by Xerium Technologies and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) * Fitch Affirms Individual Ratings of 8 Major Credit Unions at E ---------------------------------------------------------------- Fitch Ratings has affirmed the long- and short-term Issuer Default Ratings (IDRs) at 'A+' and 'F1+', respectively, of the eight major corporate credit unions that it rates. The Rating Outlook is Stable. The affirmation of the IDRs is based on the National Credit Union Administration's (NCUA) continued support for these companies. Most recently, the NCUA has demonstrated its support by extending a waiver that permits corporate credit unions to operate below minimum regulatory capital requirements. Additionally, NCUA is in the process of developing a plan to remove approximately $50 billion of problem securities from the corporate credit union system. The IDRs reflect the companies' '1' support and 'A+' support floor ratings, which acknowledge the government support provided and emphasizes the importance of government support in assessing probability of default. Therefore, given this continued support, Fitch believes that the existing support ratings, support floors, and IDRs remain appropriate at this time. As such, the Outlook is Stable. Additionally, Fitch believes that the corporate credit unions will continue to benefit from government support throughout the planned restructuring of the corporate credit union network and the implementation of new regulations. However, Fitch recognizes that a restructuring of the network could potentially lessen the level support provided to these companies in the future. The Individual ratings of the corporate credit unions rated by Fitch are at 'E', reflecting that these companies still have serious capital challenges and largely operate below regulatory capital minimums. Further, with the exception of Eastern Corporate Federal Credit Union (EasCorp) and Mid-Atlantic Corporate Federal Credit Union (Mid-Atlantic), the corporate credit unions operate with total capital ratios below mandatory regulatory requirements necessitating regulatory forbearance from the NCUA, and in the case of Constitution Corporate Federal Credit Union (CCFCU), operating under special regulatory assistance related to its depleted capital position. The capital positions of these corporate credit unions, like all corporate credit unions, have been affected by a full impairment of their capital investment in U.S. Central Federal Credit Union (USC), and several of these institutions have been affected by material losses in their own investment portfolios. Additionally, for certain institutions, there is a heightened risk of regulatory intervention due to the corporate credit unions' respective weak capital position and the prospect of future losses in their investment book. Should any institution require regulatory intervention, Fitch would expect the level of governmental support for the company to remain unchanged. While the Individual ratings for Fitch's universe of rated corporate credit unions have been affirmed at 'E'(which denotes a company that requires or will likely require external support), Fitch considers these companies as failures for the purpose of assessing failure in Fitch's statistics and studies of corporate failures. In Fitch's opinion, these institutions would likely have defaulted if not for being beneficiaries of significant external support. The corporate credit unions continue to benefit from the various support mechanisms put in place to maintain liquidity in the corporate credit union system and as noted above, most of the corporate credit unions currently require regulatory forbearance from the NCUA given their weak capital positions. Fitch has affirmed the following ratings: Central Corporate Credit Union --Long-term IDR at 'A+'; --Short-term IDR at 'F1+' --Short-term debt at 'F1+'; --Individual at 'E', --Support at '1'; --Support Floor at 'A+'. Constitution Corporate Federal Credit Union --Long-term IDR at 'A+'; --Short-term IDR at 'F1+'; --Short-term debt at 'F1+'; --Individual at 'E'; --Support at '1'; --Support Floor at 'A+'. Eastern Corporate Federal Credit Union --Long-term IDR at 'A+'; --Short-term IDR at 'F1+'; --Short-term debt at 'F1+'; --Individual at 'E'; --Support at '1'; --Support Floor at 'A+'. First Corporate Credit Union --Long-term IDR at 'A+'; --Short-term IDR at 'F1+'; --Individual at 'E'; --Support at '1'; --Support Floor at 'A+'. Mid-Atlantic Corporate Federal Credit Union --Long-term IDR at 'A+'; --Short-term IDR at 'F1+'; --Individual at 'E'; --Support at '1'; --Support Floor at 'A+'. Members United Corporate Federal Credit Union --Long-term IDR at 'A+'; --Short-term IDR at 'F1+'; --Short-term debt at 'F1+'; --Individual at 'E'; --Support at '1'; --Support Floor at 'A+'. Southeast Corporate Federal Credit Union --Long-term IDR at 'A+'; --Short-term IDR at 'F1+'; --Short-term debt at 'F1+'; --Individual at 'E'; --Support at '1'; --Support Floor at 'A+'. Southwest Corporate Federal Credit Union --Long-term IDR at 'A+'; --Short-term IDR at 'F1+'; --Short-term debt at 'F1+'; --Individual at 'E'; --Support at '1'; --Support Floor at 'A+'. * Poll Shows US City, Not Sovereign, More Likely to Default ----------------------------------------------------------- Amid the economic turmoil in Greece, more restructuring experts believe that a major U.S. municipality default is more likely than is a sovereign debt default at some point in 2010 or 2011. Some 90% of restructuring pros polled last week predicted a major U.S. city will default this year or next, versus 63% who anticipate the default of a country in the same time period, according to an informal but closely watched annual survey by AlixPartners, the global business-advisory firm. "In our 2009 survey of restructuring professionals, a large number pointed to municipalities as the top upcoming problem sector of the U.S. economy," said Peter Fitzsimmons, AlixPartners' president of North America and co-head of the firm's Turnaround and Restructuring Services practice. "Clearly, that sentiment has only intensified. On a more positive note, however, 60% of those surveyed say they don't believe the U.S. will experience a double- dip recession." The survey was conducted last week among 91 bankruptcy lawyers, bankers, fund managers and other restructuring professionals to gauge expectations around a host of issues, including economic growth, financial reform, employment, bankruptcy trends and government fiscal health. When asked where a sovereign debt default would most likely occur geographically, 74% said Europe; another 12% pointed to South America, while 8% cited the Middle East. Asia and North America each were cited by only 1% of the respondents. The poll unearthed a surprising dichotomy of opinion on the current health of corporate America. Approximately one-third (31%) of the restructuring experts said they believe U.S. bankruptcy filings will jump by more than 15% during the coming 12 months, despite the record number of filings in 2009. At the same time, however, 33% said the increase in the number of filings will come in somewhere between 1% and 6%. The survey also found that a near-unanimous majority, or 97%, of experts believe the recent trend of prepackaged, pre-arranged and accelerated bankruptcies will continue in 2010 and beyond. Again, in almost unanimous agreement, 98% of respondents believe that corporate bankruptcies in 2010 will be seen mostly in middle- market companies (those with assets of less than $1 billion). Additionally, 82% of respondents said an accelerated proceeding is a better solution for all involved in large-cap-company restructurings either "always" or "a majority of the time." This survey was taken in the midst of a year in which many companies have received temporary relief from their debt woes thanks to "amend-and-extend" maturities arrangements. But that is no panacea, according to Lisa Donahue, a managing director at AlixPartners and co-head of the Turnaround and Restructuring Services practice. "I think this trend underscores the ongoing need for companies, regardless of industry, to aggressively manage liquidity and improve operations during these tumultuous times," said Donahue. "Many companies with weak balance sheets are now being allowed some 'runway' to hopefully deal with underlying operating issues. However, without improved operational performance, a looming maturity, even one 12 months out, is still problematic." In examining the U.S. economic outlook, the survey found that the vast majority, or 72%, anticipates that the country's unemployment rate will be somewhere between 7% and 9% at the end of 2010. However, the balance of the restructuring experts - or 28% of those polled - believe unemployment will rise to the 10% to 12% range. In terms of expectations for GDP growth this year, there was broad disagreement in the survey. Roughly one-third of respondents, or 33%, believe 2010 GDP growth will be anywhere from 2% to 3%, while 29% say it will be higher than 3%. The other 28% believe growth will be in the 1% to 2% range. Approximately 75% say that another economic stimulus package won't be needed in 2010 or 2011. Most U.S. restructuring experts sounded a dour note on the prospects of success for the major financial reform packages now before Congress. Asked whether such reforms would fix the fundamental issues behind the recent financial crisis, 91% said "no." When asked, "Which (political) party is best situated to facilitate an effective, post-financial crisis restructuring of America," 42% said Republicans, while 20% pointed to Democrats. Tellingly, however, fully 38% answered "other." About AlixPartners AlixPartners LLP -- http://www.alixpartners.com/-- is a global business-advisory firm offering comprehensive services to improve corporate performance, execute corporate turnarounds, and provide litigation consulting and forensic accounting services. The firm's specialty is urgent, high-impact situations when results really matter. The firm has more than 900 professionals in 14 offices across North America, Europe and Asia. Contact: Healy Corporate Communications Sean Healy Tel: 201-218-2039 E-mail: sean@healycorp.com -- or -- Tim Yost Tel: 248-204-8689 E-mail: tyost@alixpartners.com * Pachulski Stang Bankruptcy Lawyer Joins Venable LLP ----------------------------------------------------- Veteran bankruptcy attorney Hamid Rafatjoo has joined Venable LLP from the Los Angeles-based bankruptcy boutique firm Pachulski Stang Ziehl & Jones LLP, according to Bankruptcy Law360. Law360 says Rafatjoo officially began his new job May 6 as a partner in Venable's L.A. office. Prior to that, he spent 10 years at Pachulski Stang. * Large Companies With Insolvent Balance Sheets ----------------------------------------------- Total Total Share- Total Working Holders' Assets Capital Equity Company Ticker ($MM) ($MM) ($MM) ------- ------ ------ ------- -------- ACCO BRANDS CORP ABD US 1,062.7 240.1 (118.0) AFC ENTERPRISES AFCE US 116.6 (2.7) (18.2) ALEXZA PHARMACEU ALXA US 67.1 24.2 (18.8) ALLIANCE DATA ADS US 7,919.8 3,352.2 (53.6) AMER AXLE & MFG AXL US 1,967.6 (0.3) (545.4) AMR CORP AMR US 25,525.0 (1,407.0) (3,892.0) ARIAD PHARM ARIA US 50.4 (8.2) (110.8) ARRAY BIOPHARMA ARRY US 131.5 21.5 (109.5) ARVINMERITOR INC ARM US 2,769.0 345.0 (877.0) AUTOZONE INC AZO US 5,425.0 (100.6) (421.7) BLUEKNIGHT ENERG BKEP US 303.6 (15.3) (147.2) BOARDWALK REAL E BEI-U CN 2,378.3 - (45.0) BOARDWALK REAL E BOWFF US 2,378.3 - (45.0) CABLEVISION SYS CVC US 7,364.2 54.8 (6,201.5) CARDTRONICS INC CATM US 449.3 (36.6) (2.3) CC MEDIA-A CCMO US 17,400.0 1,279.2 (7,054.8) CENTENNIAL COMM CYCL US 1,480.9 (52.1) (925.9) CENVEO INC CVO US 1,563.5 212.7 (180.6) CHENIERE ENERGY CQP US 1,883.2 37.6 (491.7) CHENIERE ENERGY LNG US 2,736.6 212.8 (468.7) CHOICE HOTELS CHH US 360.6 (6.3) (115.0) CINCINNATI BELL CBB US 2,589.6 (3.3) (634.6) COMMERCIAL VEHIC CVGI US 276.8 105.5 (10.7) CONSUMERS' WATER CWI-U CN 895.2 (5.3) (254.9) CUMULUS MEDIA-A CMLS US 323.1 (32.4) (372.3) DENNY'S CORP DENN US 313.7 (24.7) (119.0) DISH NETWORK-A DISH US 8,689.0 305.1 (1,850.3) DOMINO'S PIZZA DPZ US 427.6 92.8 (1,290.0) DUN & BRADSTREET DNB US 1,699.5 (454.1) (778.3) EASTMAN KODAK EK US 7,178.0 1,588.0 (53.0) EPICEPT CORP EPCT SS 6.3 0.2 (12.7) EXELIXIS INC EXEL US 284.2 (32.7) (199.3) FORD MOTOR CO F US 195,485.0 (7,269.0) (5,437.0) FORD MOTOR CO F BB 195,485.0 (7,269.0) (5,437.0) GENCORP INC GY US 1,018.7 114.6 (268.0) GLG PARTNERS-UTS GLG/U US 403.5 155.5 (285.9) GRAHAM PACKAGING GRM US 2,126.4 187.6 (629.0) GREAT ATLA & PAC GAP US 2,827.2 201.3 (396.4) HALOZYME THERAPE HALO US 65.2 48.9 (3.2) HEALTHSOUTH CORP HLS US 1,716.1 90.6 (474.5) HOVNANIAN ENT-A HOV US 2,100.2 1,222.4 (110.7) IDENIX PHARM IDIX US 61.0 16.8 (20.7) INCYTE CORP INCY US 502.7 332.9 (114.4) INTERMUNE INC ITMN US 190.9 102.8 (21.3) IPCS INC IPCS US 559.2 72.1 (33.0) JAZZ PHARMACEUTI JAZZ US 106.7 (31.2) (69.0) JUST ENERGY INCO JE-U CN 1,387.1 (387.0) (356.5) KNOLOGY INC KNOL US 641.7 30.9 (28.3) LIBBEY INC LBY US 776.9 128.0 (18.3) LIN TV CORP-CL A TVL US 780.6 22.9 (164.2) LINEAR TECH CORP LLTC US 1,615.8 742.7 (50.7) LORILLARD INC LO US 2,902.0 718.0 (37.0) MAGMA DESIGN AUT LAVA US 123.3 (3.4) (7.2) MAGUIRE PROPERTI MPG US 3,517.3 - (830.6) MANNKIND CORP MNKD US 243.3 8.5 (100.9) MEAD JOHNSON MJN US 1,996.7 319.9 (583.7) METALS USA HOLDI MUSA US 655.4 294.1 (43.0) MOODY'S CORP MCO US 2,003.3 (138.9) (534.0) NATIONAL CINEMED NCMI US 620.4 106.9 (462.7) NAVISTAR INTL NAV US 9,126.0 1,277.0 (1,622.0) NEUROGESX INC NGSX US 43.6 28.7 (8.3) NEWCASTLE INVT C NCT US 3,471.2 - (1,117.8) NEXSTAR BROADC-A NXST US 619.8 36.9 (176.3) NPS PHARM INC NPSP US 140.4 95.2 (227.6) PALM INC PALM US 1,007.2 141.7 (6.2) PDL BIOPHARMA IN PDLI US 358.3 (83.5) (501.1) PETROALGAE INC PALG US 7.1 (9.8) (43.8) PRIMEDIA INC PRM US 236.5 (2.2) (103.3) PROTECTION ONE PONE US 562.9 (7.6) (61.8) QWEST COMMUNICAT Q US 19,362.0 (585.0) (1,120.0) REGAL ENTERTAI-A RGC US 2,588.9 (168.9) (260.7) REVLON INC-A REV US 765.8 63.9 (1,027.2) RSC HOLDINGS INC RRR US 2,669.6 (66.1) (9.8) RURAL/METRO CORP RURL US 286.2 38.7 (100.9) SALLY BEAUTY HOL SBH US 1,531.5 366.1 (553.1) SANDRIDGE ENERGY SD US 2,971.7 (33.9) (171.3) SEALY CORP ZZ US 1,011.9 173.1 (92.3) SINCLAIR BROAD-A SBGI US 1,576.6 48.1 (187.8) SOUTHGOBI ENERGY 1878 HK 560.7 388.8 (2.8) SOUTHGOBI ENERGY SGQ CN 560.7 388.8 (2.8) SUN COMMUNITIES SUI US 1,173.3 - (118.3) TALBOTS INC TLB US 825.8 (261.9) (185.6) TAUBMAN CENTERS TCO US 2,572.3 - (494.8) TEAM HEALTH HOLD TMH US 797.4 52.1 (58.6) TENNECO INC TEN US 3,034.0 203.0 (14.0) THERAVANCE THRX US 249.9 196.6 (113.0) UAL CORP UAUA US 19,952.0 (1,019.0) (2,887.0) UNISYS CORP UIS US 2,711.8 320.6 (1,221.7) UNITED RENTALS URI US 3,584.0 30.0 (48.0) US AIRWAYS GROUP LCC US 7,808.0 (445.0) (447.0) VECTOR GROUP LTD VGR US 743.1 231.5 (13.4) VENOCO INC VQ US 799.5 10.6 (127.6) VIRGIN MOBILE-A VM US 307.4 (138.3) (244.2) WABASH NATIONAL WNC US 249.0 (154.6) (62.4) WARNER MUSIC GRO WMG US 3,752.0 (557.0) (116.0) WEIGHT WATCHERS WTW US 1,093.0 (408.5) (700.1) WORLD COLOR PRES WC CN 2,641.5 479.2 (1,735.9) WORLD COLOR PRES WCPSF US 2,641.5 479.2 (1,735.9) WORLD COLOR PRES WC/U CN 2,641.5 479.2 (1,735.9) WR GRACE & CO GRA US 3,957.9 1,177.5 (234.4) ********* 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 ***